<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 3, 1998
REGISTRATION NO. 333-57715
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
AMENDMENT NO. 1
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------
<TABLE>
<S> <C> <C>
TRITON PCS, INC. DELAWARE 4812
TRITON MANAGEMENT COMPANY, INC. DELAWARE 4812
TRITON PCS HOLDINGS COMPANY L.L.C. DELAWARE 4812
TRITON PCS PROPERTY COMPANY L.L.C. DELAWARE 4812
TRITON PCS EQUIPMENT COMPANY L.L.C. DELAWARE 4812
TRITON PCS OPERATING COMPANY L.L.C. DELAWARE 4812
TRITON PCS LICENSE COMPANY L.L.C. DELAWARE 4812
EXACT NAME OF REGISTRANT STATE OR OTHER JURISDICITON OF PRIMARY STANDARD
AS SPECIFIED IN ITS CHARTER INCORPORAITON OR ORGANIZATION INDUSTRIAL CLASSIFICATION CODE
<S> <C>
TRITON PCS, INC. 23-2930873
TRITON MANAGEMENT COMPANY, INC. 23-2940271
TRITON PCS HOLDINGS COMPANY L.L.C. 23-2941874
TRITON PCS PROPERTY COMPANY L.L.C. 23-2941874
TRITON PCS EQUIPMENT COMPANY L.L.C. 23-2941874
TRITON PCS OPERATING COMPANY L.L.C. 23-2941874
TRITON PCS LICENSE COMPANY L.L.C. 23-2941874
EXACT NAME OF REGISTRANT IRS EMPLOYER
AS SPECIFIED IN ITS CHARTER IDENTIFICATION NUMBER
</TABLE>
101 LINDENWOOD DRIVE
SUITE 125
MALVERN, PA 19355
(610) 651-5900
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
--------------
MICHAEL E. KALOGRIS
CHIEF EXECUTIVE OFFICER
TRITON PCS, INC.
101 LINDENWOOD DRIVE
SUITE 125
MALVERN, PA 19355
(610) 651-5900
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
--------------
COPIES TO:
JAMES F. ROGERS, ESQ. DAVID CLARK
LATHAM & WATKINS TRITON PCS, INC.
1001 PENNSYLVANIA AVENUE, N.W. 101 LINDENWOOD DRIVE
SUITE 1300 SUITE 125
WASHINGTON, DC 20004 MALVERN, PA 19355
(202) 637-2200 (610) 651-5900
--------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
If any of the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance
with General Instruction G, check the following box. [_]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TITLE OF EACH CLASS OF AMOUNT AMOUNT OF
SECURITIES TO BE TO BE OFFERING PRICE AGGREGATE REGISTRATION
REGISTERED REGISTERED(1) PER NOTE OFFERING PRICE FEE
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
11% Senior Subordinated
Discount Notes due
2008................... $511,989,000 58.595% $300,000,000(2) $88,500
- ------------------------------------------------------------------------------------
Subsidiary Guarantees of
the 11% Senior
Subordinated Discount
Notes due 2008......... -- -- -- (3)
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(1) The "Amount to be Registered" with respect to the 11% Senior Subordinated
Discount Notes due 2008 represents the aggregate principal amount at
maturity of such notes.
(2) Represents gross proceeds from the initial private offering of the 11%
Senior Subordinated Discount Notes due 2008 by Triton. The net proceeds
from the Private Offering were approximately $290 million after deducting
the Initial Purchasers' discounts and estimated transaction fees payable
by the Company.
(3) Pursuant to Rule 457(n), no separate registration fee is payable with
respect to the subsidiary guarantees.
--------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
TRITON PCS, INC.
CROSS REFERENCE SHEET
PURSUANT TO RULE 404(A) AND ITEM 501(B) OF REGULATION S-K
SHOWING LOCATION IN PROSPECTUS OF THE INFORMATION
REQUIRED BY PART I OF FORM S-4
<TABLE>
<S> <C>
1.Forepart of Registration
Statement and Outside Front Outside Front Cover Page; Cross Reference
Cover Page of Prospectus..... Sheet; Inside Front Cover Page
2.Inside Front and Outside Back Inside Front Cover Page; Outside Back Cover
Cover Pages of Prospectus.... Page
3.Risk Factors, Ratio of Earnings
to Fixed Charges and Other Prospectus Summary; Risk Factors; Selected
Information.................. Historical Financial Data
4.Terms of the Transaction....... The Exchange Offer; Certain United States
Federal Income Tax Consequences;
Description of Notes
5.Pro Forma Financial Prospectus Summary; Summary Unaudited Pro
Information.................. Forma Financial Data
6.Material Contacts with the
Company Being Acquired....... Not Applicable
7.Additional Information Required
for Reoffering by Persons and
Parties Deemed to be
Underwriters................. Not Applicable
8.Interests of Named Experts and
Counsel...................... Not Applicable
9.Disclosure of Commission
Position on Indemnification
for Securities Act
Liabilities.................. Not Applicable
10.Information with Respect to S-3
Registrants.................. Not Applicable
11.Incorporation of Certain
Information by Reference..... Not Applicable
12.Information with Respect to S-2
or S-3 Registrants........... Not Applicable
13.Incorporation of Certain
Information by Reference..... Not Applicable
14.Information with Respect to
Registrants Other Than S-3 or Prospectus Summary; Capitalization;
S-2 Registrants.............. Selected Historical Financial Data; Summary
Unaudited Pro Forma Financial Data;
Management's Discussion and Analysis of
Financial Condition and Results of
Operations; Business; Management; Security
Ownership; Certain Relationships and
Related Transactions; Description of Credit
Facility; Description of Notes; Description
of Capital Stock; Financial Statements
15.Information with Respect to S-3 Not Applicable
Companies....................
16.Information with Respect to S-2
or S-3 Companies............. Not Applicable
17.Information with Respect to
Companies Other Than S-2 or
S-3 Companies................ Not Applicable
18.Information if Proxies,
Consents or Authorizations
are to be Solicited
Authorizations are to be
Solicited.................... Not Applicable
19.Information if Proxies,
Consents or Authorizations
are not to be Solicited or in Management; The Exchange Offer; Certain
an Exchange Offer............ Relationships and Related Transactions
</TABLE>
<PAGE>
TRITON PCS, INC.
CROSS REFERENCE SHEET
PURSUANT TO RULE 404(A) AND ITEM 501(B) OF REGULATION S-K
SHOWING LOCATION IN PROSPECTUS OF THE INFORMATION
REQUIRED BY PART I OF FORM S-1
<TABLE>
<S> <C>
1.Forepart of Registration
Statement and Outside Front Outside Front Cover Page; Cross Reference
Cover Page of Prospectus..... Sheet; Inside Front Cover Page
2.Inside Front and Outside Back Inside Front Cover Page; Outside Back Cover
Cover Pages of Prospectus.... Page
3.Summary Information Risk
Factors, and Ratio of
Earnings to Fixed Charges and Prospectus Summary; Risk Factors; Selected
Other Information............ Historical Financial Data
4.Use of Proceeds................ Use of Proceeds
5.Determination of Offering
Price........................ Not Applicable
6.Dilution....................... Not Applicable
7.Selling Security Holders....... Not Applicable
8.Plan of Distribution........... Plan of Distribution
9.Description of Securities to be
Registered................... Description of Notes
10.Interests of Named Experts and
Counsel...................... Not Applicable
11.Information with Respect to Prospectus Summary; Capitalization;
Registrant................... Selected Historical Financial Data;
Management's Discussion and Analysis of
Financial Condition and Results of
Operations; Business; Management; Security
Ownership; Certain Relationships and
Related Transactions; Description of
Credit Facility; Description of Notes;
Description of Capital Stock; Financial
Statements
12.Disclosure of Commission
Position on Indemnification
for Securities Act
Liabilities.................. Not Applicable
</TABLE>
<PAGE>
EXPLANATORY NOTE
This Registration Statement contains a prospectus (the "Prospectus")
relating to the offer (the "Exchange Offer") for all outstanding 11% Senior
Subordinated Discount Notes due 2008 (the "Private Notes") of Triton PCS, Inc.
("Triton") in exchange for Triton's 11% Senior Subordinated Discount Notes due
2008 (the "Exchange Notes"). In addition, this Registration Statement contains
a prospectus (the "Market-Making Prospectus") relating to certain market-
making activities with respect to the Exchange Notes which may, from time to
time, be carried out by J.P. Morgan Securities Inc. ("JPMS") and Chase
Securities Inc. ("CSI" and, together with JPMS, the "Market Makers"). The two
prospectuses will be identical in all material respects except for the front
cover page and the Plan of Distribution and except for the fact that the
Market-Making Prospectus will not contain the information in the Prospectus
Summary relating to the Exchange Offer, the information under the caption "The
Exchange Offer" and "Certain United States Federal Tax Consequences--Exchange
of Private Notes for Exchange Notes" will be deleted and certain conforming
changes will be made to delete references to the Exchange Offer. The
Prospectus for the Exchange Offer follows immediately after this Explanatory
Note. Following such Prospectus are the form of alternative cover page and
Plan of Distribution section for the Market-Making Prospectus and alternative
pages covering conforming changes.
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION DATED AUGUST , 1998
PROSPECTUS
, 1998
OFFER TO EXCHANGE
11% SENIOR SUBORDINATED DISCOUNT NOTES DUE 2008
FOR ALL OUTSTANDING 11% SENIOR SUBORDINATED DISCOUNT NOTES DUE 2008
OF
TRITON PCS, INC.
-----------
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME ON , 1998
UNLESS EXTENDED.
Triton PCS, Inc., a Delaware corporation ("Triton"), is hereby offering (the
"Exchange Offer"), upon the terms and subject to the conditions set forth in
this Prospectus and the accompanying Letter of Transmittal (the "Letter of
Transmittal"), to exchange $1,000 principal amount of its 11% Senior
Subordinated Discount Notes due 2008 (the "Exchange Notes"), which exchange has
been registered under the Securities Act of 1933, as amended (the "Securities
Act"), pursuant to a registration statement of which this Prospectus is a part
(the "Registration Statement"), for each $1,000 principal amount of its
outstanding 11% Senior Subordinated Discount Notes due 2008 (the "Private
Notes"), of which $511,989,000 in aggregate principal amount at maturity was
issued on May 4, 1998 (the "Private Offering") and is outstanding as of the
date hereof. The form and terms of the Exchange Notes are the same as the form
and terms of the Private Notes except that (i) the exchange will have been
registered under the Securities Act, and, therefore, the Exchange Notes will
not bear legends restricting the transfer thereof and (ii) holders of the
Exchange Notes will not be entitled to certain rights of holders of the Private
Notes under the Registration Rights Agreement (as defined herein), which rights
will terminate upon the consummation of the Exchange Offer. The Exchange Notes
will evidence the same indebtedness as the Private Notes (which they replace)
and will be entitled to the benefits of an indenture dated as of May 4, 1998
governing the Private Notes and the Exchange Notes (the "Indenture"). The
Private Notes and the Exchange Notes are sometimes referred to herein
collectively as the "Notes." See "The Exchange Offer" and "Description of
Notes."
The Exchange Notes will bear interest at the same rate and on the same terms
as the Private Notes. Consequently, the Exchange Notes will be issued at a
substantial discount to their principal amount at maturity. The Exchange Notes
will accrete in value from and including the date of issuance of the Private
Notes (May 4, 1998) until May 1, 2003 at which time they will have an aggregate
principal amount of $511,989,000. Thereafter, cash interest will accrue on the
Exchange Notes and will be payable semiannually in arrears on May 1 and
November 1, commencing November 1, 2003, at a rate of 11% per annum. Holders
whose Private Notes are accepted for exchange will be deemed to have waived the
right to receive any interest accrued on the Private Notes.
SEE "RISK FACTORS" BEGINNING ON PAGE 12 FOR A DISCUSSION OF CERTAIN FACTORS
THAT INVESTORS SHOULD CONSIDER IN CONNECTION WITH THE EXCHANGE OFFER AND AN
INVESTMENT IN THE EXCHANGE NOTES.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
The Notes will be redeemable at the option of Triton, in whole or in part,
at any time on or after May 1, 2003, at the redemption prices set forth
herein, plus accrued and unpaid interest, if any, thereon to the date of
redemption. In addition, prior to May 1, 2001, Triton may redeem up to 35% of
the aggregate principal amount at maturity of the Notes with the net cash
proceeds received from one or more Equity Offerings (as defined herein) of
Triton, Triton PCS Holdings, Inc., a Delaware corporation, or a Special
Purpose Corporation (as defined herein) at a redemption price of 111% of the
Accreted Value (as defined herein) thereof, plus accrued and unpaid interest,
if any, to the redemption date; provided, however, that at least 65% in
aggregate principal amount at maturity of the Notes remains outstanding
immediately after any such redemption.
The Notes will be general unsecured obligations of Triton, will be
subordinated in right of payment to all Senior Debt (as defined herein) of
Triton, including all obligations under the Credit Facility (as defined
herein). Triton has no independent assets and/or operations from that of its
operating subsidiaries. The Notes will be guaranteed on a full, unconditional,
and joint and several basis (the "Guarantees") by all of the subsidiaries of
Triton that are direct obligors under, or in respect of, any Senior Credit
Facilities (as defined herein) (the "Guarantors"). As of the date of this
registration statement, all of Triton's direct and indirect subsidiaries are
guarantors. Triton PCS Holdings, Inc., the direct parent and sole stockholder
of Triton, is not a guarantor. The Guarantees will be unsecured obligations of
the Guarantors, subordinated in right of payment to all Senior Debt of the
Guarantors, including all of the Guarantors' obligations under the Credit
Facility. As of August 25, 1998 Triton and the Guarantors had $150 million of
Senior Debt outstanding.
Upon the occurrence of a Change of Control (as defined herein), Triton will
be required to make an offer to purchase all the outstanding Notes at 101% of
the Accreted Value thereof or the principal amount at maturity, as applicable,
together with accrued and unpaid interest to the purchase date. See
"Description of Notes."
Triton will accept for exchange any and all validly tendered Private Notes
not withdrawn prior to 5:00 p.m., New York City time, on , 1998 (the
"Expiration Date"), unless the Exchange Offer is extended by Triton in its
sole discretion. Tenders of Private Notes may be withdrawn at any time prior
to the Expiration Date. Private Notes may be tendered only in integral
multiples of $1,000. The Exchange Offer is subject to certain customary
conditions. See "The Exchange Offer--Conditions."
Based on an interpretation by the staff of the Securities and Exchange
Commission (the "Commission") set forth in no-action letters issued to third
parties (See e.g. Exxon Capital Holdings Corp., SEC No-Action Letter
(available April 13, 1989) and Morgan Stanley & Co. Inc., SEC No-Action Letter
(available June 5, 1991), collectively, the "No-Action Letters"), Triton
believes that the Exchange Notes issued pursuant to the Exchange Offer in
exchange for Private Notes may be offered for resale, resold and otherwise
transferred by a holder thereof (other than (i) a broker-dealer who purchases
such Exchange Notes directly from Triton to resell pursuant to Rule 144A or
any other available exemption under the Securities Act or (ii) a person that
is an affiliate of Triton within the meaning of Rule 405 under the Securities
Act), without compliance with the registration and prospectus delivery
provisions of the Securities Act; provided that the holder is acquiring the
Exchange Notes in the ordinary course of its business and is not
participating, and had no arrangement or understanding with any person to
participate, in the distribution of the Exchange Notes. Holders who tender
their Private Notes in the Exchange Offer with the intention of participating
in a distribution of the Exchange Notes will not be able to rely on the No-
Action Letters or similar no-action letters. Holders of Private Notes wishing
to accept the Exchange Offer must represent to Triton, as required by the
Registration Rights Agreement, that such conditions have been met. Each
broker-dealer that receives Exchange Notes for its own account in exchange for
Private Notes, where such Private Notes were acquired by such broker-dealer as
a result of market-making activities or other trading activities, must
acknowledge that it will deliver a prospectus in connection with any resale of
such Exchange Notes. Triton believes that none of the registered holders of
the Private Notes is an affiliate (as such term is defined in Rule 405 under
the Securities Act) of Triton.
(Continued on next page)
i
<PAGE>
(Continued from previous page)
Prior to the Exchange Offer, there has been no public market for the Notes.
Triton does not intend to list the Exchange Notes on any securities exchange,
but the Private Notes are eligible for trading in the National Association of
Securities Dealers, Inc.'s Private Offerings, Resales and Trading through
Automatic Linkages (PORTAL) market. There can be no assurance that an active
market for the Notes will develop. To the extent that a market for the Notes
does develop, the market value of the Notes will depend on market conditions
(such as yields on alternative investments), general economic conditions,
Triton's financial condition and certain other factors. Such conditions might
cause the Notes, to the extent that they are traded, to trade at a significant
discount from face value. See "Risk Factors--bsence of Public Market for the
Notes; Restrictions on Transfer."
Each broker-dealer that receives Exchange Notes for its own account pursuant
to the Exchange Offer must acknowledge that it will deliver a prospectus in
connection with any resale of such Exchange Notes. The Letter of Transmittal
states that by so acknowledging and by delivering a prospectus, a broker-
dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act. This Prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of Exchange Notes received in exchange for Private Notes where
such Private Notes were acquired by such broker-dealer as a result of market-
making activities or other trading activities. Triton has indicated its
intention to make this Prospectus (as it may be amended or supplemented)
available to any broker-dealer for use in connection with any such resale for
a period of 180 days after the Expiration Date. See "Plan of Distribution."
Triton will not receive any proceeds from, and has agreed to bear the
expenses of, the Exchange Offer. No underwriter is being used in connection
with this Exchange Offer. See "The Exchange Offer."
THE EXCHANGE OFFER IS NOT BEING MADE TO, NOR WILL TRITON ACCEPT SURRENDERS
FOR EXCHANGE FROM, HOLDERS OF PRIVATE NOTES IN ANY JURISDICTION IN WHICH THE
EXCHANGE OFFER OR THE ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE WITH THE
SECURITIES OR BLUE SKY LAWS OF SUCH JURISDICTION.
NO PERSON IS AUTHORIZED IN CONNECTION WITH THE EXCHANGE OFFER TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS OR
THE ACCOMPANYING LETTER OF TRANSMITTAL, AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY TRITON. NEITHER THE DELIVERY OF THIS PROSPECTUS OR THE
ACCOMPANYING LETTER OF TRANSMITTAL, NOR ANY EXCHANGE MADE HEREUNDER SHALL
UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED
HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF.
UNTIL , 1998 (90 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL DEALERS
OFFERING TRANSACTIONS IN THE EXCHANGE NOTES, WHETHER OR NOT PARTICIPATING IN
THE EXCHANGE OFFER, MAY BE REQUIRED TO DELIVER A PROSPECTUS IN CONNECTION
THEREWITH. THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A
PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD
ALLOTMENTS OR SUBSCRIPTIONS.
The Exchange Notes will be available initially only in book-entry form.
Triton expects that the Exchange Notes issued pursuant to the Exchange Offer
will be issued in the form of one or more fully registered global notes that
will be deposited with, or on behalf of, the Depository Trust Company ("DTC"
or the "Depository") and registered in its name or in the name of Cede & Co.,
as its nominee. Beneficial interests in the global note representing the
Exchange Notes will be shown on, and transfers thereof will be effected only
through, records maintained by the Depository and its participants. After the
initial issuance of such global note, Exchange Notes in certificated form will
be issued in exchange for the global note only in accordance with the terms
and conditions set forth in the Indenture. See "The Exchange Offer--Book-Entry
Transfer" and "Book Entry; Delivery and Form."
(Continued on Next Page)
ii
<PAGE>
(Continued from Previous Page)
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
THIS PROSPECTUS INCLUDES "FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF
SECTION 27A OF THE SECURITIES ACT AND SECTION 21E OF THE SECURITIES EXCHANGE
ACT OF 1934, AS AMENDED. ALL STATEMENTS OTHER THAN STATEMENTS OF HISTORICAL
FACTS INCLUDED IN THIS PROSPECTUS, INCLUDING WITHOUT LIMITATION, CERTAIN
STATEMENTS UNDER THE "PROSPECTUS SUMMARY," "THE COMPANY," "MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS" AND
"BUSINESS" AND LOCATED ELSEWHERE HEREIN REGARDING THE COMPANY'S FINANCIAL
POSITION AND BUSINESS STRATEGY, MAY CONSTITUTE FORWARD-LOOKING STATEMENTS.
ALTHOUGH THE COMPANY BELIEVES THAT THE EXPECTATIONS REFLECTED IN SUCH FORWARD-
LOOKING STATEMENTS ARE REASONABLE, IT CAN GIVE NO ASSURANCE THAT SUCH
EXPECTATIONS WILL PROVE TO HAVE BEEN CORRECT. IMPORTANT FACTORS THAT COULD
CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THE COMPANY'S EXPECTATIONS
("CAUTIONARY STATEMENTS") ARE DISCLOSED IN THIS PROSPECTUS, INCLUDING WITHOUT
LIMITATION IN CONJUNCTION WITH THE FORWARD-LOOKING STATEMENTS INCLUDED IN THIS
PROSPECTUS AND UNDER "RISK FACTORS." ALL SUBSEQUENT WRITTEN AND ORAL FORWARD-
LOOKING STATEMENTS ATTRIBUTABLE TO THE COMPANY OR PERSONS ACTING ON ITS BEHALF
ARE EXPRESSLY QUALIFIED IN THEIR ENTIRETY BY THE CAUTIONARY STATEMENTS.
iii
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary....................................................... 1
The Exchange Offer....................................................... 7
Risk Factors............................................................. 12
Use of Proceeds.......................................................... 29
Capitalization........................................................... 30
Selected Historical and Pro Forma Consolidated Financial Data............ 31
Management's Discussion and Analysis of Financial Condition and Results
of Operations........................................................... 35
Business................................................................. 41
Management............................................................... 58
Security Ownership....................................................... 63
Certain Relationships and Related Transactions........................... 65
Description of Credit Facility........................................... 72
Description of Notes..................................................... 74
Description of Capital Stock............................................. 102
Certain United States Federal Income Tax Consequences.................... 104
Book-Entry; Delivery and Form............................................ 108
Plan of Distribution..................................................... 110
Legal Matters............................................................ 111
Experts.................................................................. 111
Available Information.................................................... 112
Glossary of Selected Terms............................................... 113
</TABLE>
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by, and should be read in
conjunction with, the more detailed information and the financial statements
and related notes appearing elsewhere in this Prospectus. As used herein, the
term "Triton" refers to Triton PCS, Inc., "Holdings" refers to Triton PCS
Holdings, Inc., the direct parent and sole stockholder of Triton, and "Company"
refers to Triton, Holdings and Triton's subsidiaries unless the context
indicates otherwise. Certain of the statements contained in this summary and
elsewhere in this Prospectus, including information with respect to the
Company's expected PCS operations and build-out, its strategy for its PCS
business and related financings, are forward-looking statements. The term
"Pops" means population equivalents as determined by Paul Kagan Associates,
Inc. ("Kagan") estimates of the 1997 population of a geographic area. See
"Certain Definitions," and "Glossary of Selected Terms" for definitions of
certain terms used in this Prospectus.
THE COMPANY
The Company intends to become a leading provider of wireless broadband
Personal Communications Services ("PCS") in the southeastern United States.
Triton was established by Michael Kalogris, Steven Skinner and other former
executives of Horizon Cellular Group ("Horizon"), along with various private
equity investors, with the intent to develop and operate a leading PCS network
in the Southeast. In October 1997, the Company entered into a joint venture
agreement with AT&T Wireless PCS, Inc. ("AT&T PCS"), a wholly-owned subsidiary
of AT&T Corp. ("AT&T Corp." and, together with its affiliates, "AT&T"), whereby
the Company will be the exclusive provider of wireless mobility services under
the AT&T consumer brand name in a contiguous area covering approximately 11
million Pops in the southeastern United States (the "Licensed Area"). AT&T PCS
contributed PCS licenses (the "PCS Licenses") to Triton covering the Licensed
Area in exchange for an equity interest in the Company. Additionally, the
Company is a party to agreements with AT&T that, among other things, allow the
Company to benefit from AT&T's nationwide wireless footprint and promotional
and marketing efforts and provide the Company with favorable roaming and long
distance rates for services on AT&T's wireless and long distance networks. See
"Certain Relationships and Related Transactions--The AT&T Agreements." The PCS
Licenses authorize the Company to provide PCS services to such major population
and business centers as Charleston, SC, Columbia, SC, Greenville/Spartanburg,
SC, Richmond, VA and Augusta, GA, as well as major destination resorts such as
Myrtle Beach, SC, Hilton Head, SC and Kiawah Island, SC. The Company expects to
commence commercial operations by the end of the first quarter of 1999 or
shortly thereafter in an initial area covering approximately 40% of the Pops in
the Licensed Area (the "Initial Configuration").
The Company believes the Licensed Area has outstanding demographic
characteristics, including strong population growth and favorable population
density and traffic patterns. The Company believes that its Licensed Area,
together with AT&T's recently launched wireless systems located in the adjacent
cities of Washington, D.C., Charlotte, NC and Atlanta, GA, creates a large,
contiguous area which provides numerous cost and other synergistic benefits.
The Company intends to offer customers affordable, reliable, high-quality
mobile telecommunications services. Specific service offerings will include
single number service and advanced features such as call screening and caller
ID. As the market for wireless telecommunications services and the Company's
technological capabilities continue to develop, the Company expects to offer
additional wireless applications such as high-speed data transmission to and
from computers, "wireless office," advanced paging, facsimile and Internet
access services.
1
<PAGE>
The Company has chosen to build its PCS network using Time Division Multiple
Access ("TDMA") technology based upon the IS-136 standard ("TDMA/IS-136") which
is the technology utilized by AT&T's nationwide wireless network, thus allowing
the Company's network to be compatible with AT&T's and other TDMA/IS-136
networks immediately upon launch of operations. On June 30, 1998 the Company
acquired an existing cellular system (the "Myrtle Beach System"), which serves
Myrtle Beach, SC and the surrounding area (the "Myrtle Beach Acquisition"),
from Vanguard Cellular Systems of South Carolina, Inc. ("Vanguard") for a
purchase price of approximately $162.5 million. The Company believes it will
seamlessly integrate the Myrtle Beach System, which uses digital TDMA/IS-136
cellular technology, into its planned PCS network as part of the Initial
Configuration.
The Company has signed a purchase agreement to acquire from AT&T PCS, Inc.
(the "Norfolk Acquisition") (i) an FCC license to use 20MHz of authorized
frequencies to provide broadband PCS services throughout the entirety of the
Norfolk, Virginia BTA and (ii) certain assets of AT&T PCS used in the operation
of the PCS system in such BTA for an aggregate purchase price of $105 million,
including $13.5 million of Series D Preferred Stock to be issued to AT&T PCS.
The build-out of the network relating to the Norfolk Acquisition, including the
installation of a switch, has been substantially completed. The Norfolk
Acquisition is subject to closing conditions typical in acquisitions of this
nature. There can be no assurance that the Norfolk Acquisition will be
consummated on the terms described herein or at all.
In addition to the contribution by AT&T PCS of the PCS Licenses, the Company
has raised $140 million of irrevocable equity commitments payable over a three-
year period (the "Cash Equity"), $45 million of which has been received by the
Company to date, from, or from entities managed by, Chase Capital Partners,
J.P. Morgan Investment Corporation, Desai Capital Management Incorporated,
Toronto Dominion Capital (USA), Inc., First Union Capital Partners, Inc. and
Duff Ackerman Goodrich & Assoc. L.P. (collectively, the "Cash Equity
Investors") and certain management stockholders, as well as a $425 million
Credit Facility (the "Credit Facility"). See "Certain Relationships and Related
Transactions--The Securities Purchase Agreement" and "Description of Credit
Facility." The Company has received additional equity contributions of $35
million ("Myrtle Contributions") from the Cash Equity Investors in connection
with the Myrtle Beach Acquisition. The Company has also received additional
non-binding cash equity commitments of approximately $16.5 million (the
"Norfolk Commitments", and together with the contribution of the PCS Licenses,
the Cash Equity, and the Myrtle Contributions, the "Equity Investments") from
certain of the Cash Equity Investors in connection with the Norfolk
Acquisition. In addition, the Private Offering, consummated on May 4, 1998,
provided approximately $290 million of net proceeds to the Company. The net
proceeds from the Private Offering, in conjunction with the Equity Investments
and borrowings under the Credit Facility, are expected to be sufficient to
complete the planned build-out of the Company's PCS network. See "--Network
Build-Out and Financing Plan."
2
<PAGE>
STRATEGIC ALLIANCE WITH AT&T
AT&T holds FCC licenses to provide wireless telecommunications service in
areas covering more than 80% of the U.S. population. In order to effectively
and rapidly construct its PCS markets and commence offering wireless service,
AT&T has focused on building out selected cities within its coverage area,
while entering into agreements with certain independent wireless operators,
such as the Company, to build out and operate the remainder of its PCS markets.
AT&T contributed the PCS Licenses, covering 20 MHz of spectrum in the Licensed
Area, in exchange for an equity interest in the Company and certain other
rights including preemptive rights and the right to appoint one board member.
AT&T has retained 10 MHz of spectrum in the Licensed Area for use as a non-
mobile wireless provider. The terms of the joint venture between the Company
and AT&T are set forth in the AT&T Agreements described below. See "Certain
Relationships and Related Transactions--The AT&T Agreements."
POTENTIAL ACQUISITION
The Company has entered into a non-binding letter of intent with AT&T, dated
as of March 24, 1998, to acquire an additional 1.9 million net incremental Pops
(2.4 million additional Pops less 0.5 million Pops located in the Hagerstown,
MD and Cumberland, MD BTAs that Triton will return to AT&T), located primarily
in Georgia and North Carolina (the "Georgia/North Carolina Pops"), all of which
are contiguous to the Licensed Area. The aggregate consideration for the
additional 1.9 million Pops is approximately $32 million, all of which is
expected to be represented by additional non-cash equity interests in the
Company issued to AT&T. The Georgia/North Carolina Pops have not yet been
built, but the Company expects they will be subject to a build-out plan similar
to that developed for the Licensed Area. This potential acquisition is subject
to conditions typical in acquisitions of this nature, certain of which,
including FCC consent, may be beyond the Company's control. There can be no
assurance, therefore, that this acquisition will be consummated on the terms
described herein or at all. See "Risk Factors--Risks Related to Potential
Acquisition."
NETWORK BUILD-OUT AND FINANCING PLAN
The Company expects to launch commercial operations in the Initial
Configuration, covering approximately 40% of the Pops and comprising 14 of the
largest cities in the Licensed Area (based on 1997 Pops), by the end of the
first quarter of 1999 or shortly thereafter. Upon completion of the Initial
Configuration, the Company intends to target the remaining cities, connecting
highway corridors and counties along the interstates with population densities
of 50 or more per square mile. The Company expects to extend its coverage to
approximately 85% of the Pops in the Licensed Area by the end of the fourth
quarter of 2001, which the Company believes will generally provide greater
coverage than current cellular operators in such markets.
The Company has contracted with several leading telecommunications equipment
manufacturers to construct its wireless network. Ericsson, the Company's
primary equipment supplier, and other vendors were selected based on their
extensive experience in wireless technology and their ability to assist the
Company in rapidly deploying a high quality network.
The Company has substantially completed its RF design for the build-out of
the Initial Configuration. The Company has also engaged two site acquisition
firms to implement its cell site acquisition strategy. As of August 17, 1998,
the Company had signed leases or lease options for approximately 57% of the 500
sites required for commencement of operations in the Initial Configuration. See
"Risk Factors--Network Build-Out and System Implementation Risks."
3
<PAGE>
Management estimates that the Company's total projected capital requirement
from inception through year-end 2001, when its network build-out is expected to
be completed, including the consummation of the Myrtle Beach Acquisition and
assuming the consummation of the Norfolk Acquisition, is approximately $993
million. These requirements include capital expenditures related to the build-
out of the network, customer acquisition costs, operating losses incurred
through the build-out phase, debt service and closing costs. Management
projects that it will invest approximately $47 per covered Pop in system
capital expenditures (excluding Myrtle Beach and Norfolk, each of which has
been substantially built out), which will enable it to build a superior system
resulting in better penetration and higher usage. The Company believes that the
proceeds from the Private Offering, together with the availability under the
Credit Facility and the Equity Investments, provide the Company with funds
sufficient to complete the build-out of the Company's planned network within
the Licensed Area.
4
<PAGE>
The following table sets forth the Company's estimated sources and uses of
capital from inception through December 31, 2001, assuming the Company covers
approximately 85% of the Pops in the Licensed Area and consummation of the
Norfolk Acquisition, thereby completing the planned build-out of its PCS
network. See "Business--Network Build-Out" and "Description of Credit
Facility."
<TABLE>
<CAPTION>
IN MILLIONS
<S> <C>
SOURCES
Credit Facility(1).................................................. $336.4
The Private Notes(2)................................................ 300.0
Cash Equity(3)...................................................... 191.5
Non-Cash Equity(4).................................................. 132.1
Operating Cash Flow................................................. 32.9
------
Total Sources..................................................... $992.9
======
USES
Acquisition of PCS Licenses and Related Intangibles................. $118.6
Myrtle Beach Acquisition............................................ 160.0
Norfolk Acquisition................................................. 105.0
Capital Expenditures................................................ 449.3
Cash Interest....................................................... 96.2
Working Capital/Operating Cash Flow................................. 43.8
Closing Costs(5).................................................... 20.0
------
Total Uses........................................................ $992.9
======
</TABLE>
- --------
(1) The Credit Facility provides for up to $425 million of term loan and
revolver financing. See "Description of Credit Facility."
(2) Consists of gross proceeds of the offering (the "Private Offering") by
Triton of the Private Notes on May 4, 1998.
(3) Holdings has issued or will issue preferred stock to the Cash Equity
Investors in exchange for (i) their initial cash investments plus their
commitments to provide the balance of the Cash Equity, (ii) the Myrtle
Contribution and (iii) the Norfolk Commitments. See "Certain Relationships
and Related Transactions--The Securities Purchase Agreement" and "--The
Myrtle Equity Contribution."
(4) The Non-Cash Equity represents the fair value of the PCS Licenses and
related agreements with AT&T which were contributed to, or entered into
with, the Company in exchange for preferred stock issued by Holdings. In
addition, $13.5 million in preferred stock is expected to be issued to AT&T
by Holdings as part of the $105 million purchase price for the proposed
Norfolk Acquisition. See "Certain Relationships and Related Transactions--
The Securities Purchase Agreement" and "--The Norfolk Commitment." On April
3, 1998, the PCS Licenses and related agreements were valued at $118.6
million by Kagan.
(5) Closing costs consist of costs incurred in connection with the formation of
the Company, the acquisition of the PCS Licenses, the Credit Facility, the
Myrtle Beach Acquisition, the Norfolk Acquisition and the Private Offering.
5
<PAGE>
CORPORATE STRUCTURE
All of the outstanding capital stock of Triton is held directly by Holdings.
Substantially all of the Company's operations will be conducted through
Property LLC, Equipment LLC, Operating LLC and License LLC (each as defined
herein). All of the PCS Licenses are held by License LLC. The following chart
illustrates the ownership structure of the Company.
LOGO
[Corporate Structure Chart Appears Here]
Triton is a Delaware corporation. All of Triton's executive operations are
conducted at Management Co. which has its principal executive offices at 101
Lindenwood Drive, Suite 125, Malvern, PA 19355. The telephone number at such
offices is (610) 651-5900.
6
<PAGE>
THE EXCHANGE OFFER
The Exchange Offer...... The Company is hereby offering to exchange $1,000
principal amount at maturity of Exchange Notes for
each $1,000 principal amount at maturity of Private
Notes that are properly tendered and accepted. The
company will issue Exchange Notes on or promptly
after the Expiration Date. As of the date hereof,
there is $511,989,000 aggregate principal amount at
maturity of Private Notes outstanding. see "The
Exchange Offer."
Based on an interpretation by the staff of the
Commission set forth in No-Action letters issued to
third parties, the Company believes that the Exchange
Notes issued pursuant to the Exchange Offer in
exchange for Private Notes may be transferred by a
holder thereof (other than (i) a broker-dealer who
purchases such Exchange Notes directly from the
Company to resell pursuant to Rule 144A or any other
available exemption under the Securities Act or (ii)
a person that is an affiliate of the Company within
the meaning of Rule 405 under the Securities Act),
without compliance with the registration and
prospectus delivery provisions of the Securities Act;
provided that the holder is acquiring Exchange Notes
in the ordinary course of its business and is not
participating, and had no arrangement or
understanding with any person to participate, in the
distribution of the Exchange Notes. (See e.g., Exxon
Capital Holdings Corp., SEC No-Action Letter
(available April 13, 1989) and Morgan Stanley & Co.,
Inc., Sec No-Action Letter (available June 5, 1991),
collectively, the "No-Action Letters"). Holders who
tender their Private Notes in the Exchange Offer with
the intention of participating in a distribution of
the Exchange Notes will not be able to rely on the
No-Action Letters or similar No-Action Letters. Each
broker-dealer that receives Exchange Notes for its
own account in exchange for Private Notes, where such
Private Notes were acquired by such broker-dealer as
a result of market-making activities or other trading
activities, must acknowledge that it will deliver a
prospectus in connection with any resale of such
Exchange Notes. See "The Exchange Offer--Resale of
the Exchange Notes."
Registration Rights
Agreement.............. The Private Notes were sold by the Company on May 4,
1998 to J.P. Morgan Securities Inc., Chase Securities
Inc., and Lehman Brothers Inc. (the "Initial
Purchasers") pursuant to a Purchase Agreement, dated
April 29, 1998, by and among the Company and the
Initial Purchasers (the "Purchase Agreement").
Pursuant to the Purchase Agreement, the Company and
the Initial Purchasers entered into a Registration
Rights Agreement, dated as of May 4, 1998 (the
"Registration Rights Agreement"), which grants the
holders of the Private Notes certain exchange and
registration rights. The Exchange Offer is intended
to satisfy such rights, which will terminate upon the
consummation of the Exchange Offer. The holders of
the Exchange Notes will not be entitled to any
exchange or registration rights with respect to the
Exchange Notes. See "The Exchange Offer--Termination
of Certain Rights."
Expiration Date......... The Exchange Offer will expire at 5:00 p.m., New York
City time, on , 1998, unless the Exchange Offer
is extended by the Company in its sole discretion, in
which case the term "Expiration Date"
7
<PAGE>
shall mean the latest date and time to which the
Exchange Offer is extended. See "The Exchange Offer--
Expiration Date; Extensions; Amendments."
Accrued Interest on the
Exchange Notes and the
Private Notes.......... The Exchange Notes will accrete in value from and
including the date of issuance of the Private Notes
(May 4, 1998) until March 1, 2003 at which time they
will have an aggregate principal amount of
$511,989,000. Thereafter, cash interest will accrue
on the Exchange Notes and will be payable
semiannually in arrears on May 1 and November 1,
commencing November 1, 2003, at a rate of 11% per
annum. Holders whose Private Notes are accepted for
exchange will be deemed to have waived the right to
receive any interest accrued on the Private Notes.
See "The Exchange Offer--Interest on the Exchange
Notes."
Conditions to the
Exchange Offer.........
The Exchange Offer is subject to certain customary
conditions that may be waived by the Company. The
Exchange Offer is not conditioned upon any minimum
aggregate principal amount at maturity of Private
Notes being tendered for exchange. See "The Exchange
Offer--Conditions."
Procedures for
Tendering Private Each holder of Private Notes wishing to accept the
Notes.................. Exchange Offer must complete, sign and date the
Letter of Transmittal, or a facsimile thereof, in
accordance with the instructions contained herein and
therein, and mail or otherwise deliver such Letter of
Transmittal, or such facsimile, together with such
Private Notes and any other required documentation,
to PNC Bank, National Association, as exchange agent
(the "Exchange Agent"), at the address set forth
herein. By executing the Letter of Transmittal, the
holder will represent to and agree with the Company
that, among other things, (i) the Exchange Notes to
be acquired by such holder of Private Notes in
connection with the Exchange Offer are being acquired
by such holder in the ordinary course of its
business, (ii) such holder has no arrangement or
understanding with any person to participate in a
distribution of the Exchange Notes, (iii) that if
such holder is a broker-dealer registered under the
Exchange Act or is participating in the Exchange
Offer for the purposes of distributing the Exchange
Notes, such holder will comply with the registration
and prospectus delivery requirements of the
Securities Act in connection with a secondary resale
transaction of the Exchange Notes acquired by such
person and cannot rely on the position of the staff
of the Commission set forth in no-action letters (see
"The Exchange Offer--Resale of Exchange Notes"), (iv)
such holder understands that a secondary resale
transaction described in clause (iii) above and any
resales of Exchange Notes obtained by such holder in
exchange for Private Notes acquired by such holder
directly from the Company should be covered by an
effective registration statement containing the
seller securityholder information required by Item
507 or Item 508, as applicable, of Regulation S-K of
the Commission and (v) such holder is not an
"affiliate," as defined in Rule 405 under the
Securities Act, of the Company. (See e.g., Exxon
Capital Holdings Corp., SEC No-Action Letter
(available April 13, 1989) and Morgan Stanley & Co.,
Inc., SEC No-Action Letter (available June 5, 1991),
collectively, the
8
<PAGE>
"No-Action Letters"). Holders who tender their
Private Notes in the Exchange Offer with the
intention of participating in a distribution of the
Exchange Notes will not be able to rely on the No-
Action Letters or similar no-action letters. If the
holder is a broker-dealer that will receive Exchange
Notes for its own account in exchange for Private
Notes that were acquired as a result of market-making
activities or other trading activities, such holder
will be required to acknowledge in the Letter of
Transmittal that such holder will deliver a
prospectus in connection with any resale of such
Exchange Notes; however, by so acknowledging and by
delivering a prospectus, such holder will not be
deemed to admit that it is an "underwriter" within
the meaning of the Securities Act. See "The Exchange
Offer--Procedures for Tendering."
Special Procedures for
Beneficial Owners...... Any beneficial owner whose Private Notes are
registered in the name of a broker, dealer,
commercial bank, trust company or other nominee and
who wishes to tender such Private Notes in the
Exchange Offer should contact such registered holder
promptly and instruct such registered holder to
tender on such beneficial owner's behalf. If such
beneficial owner wishes to tender on such owner's own
behalf, such owner must, prior to completing and
executing the Letter of Transmittal and delivering
such owner's Private Notes, either make appropriate
arrangements to register ownership of the Private
Notes in such owner's name or obtain a properly
completed bond power from the registered holder. The
transfer of registered ownership may take
considerable time and may not be able to be competed
prior to the Expiration Date. See "The Exchange
Offer--Procedures for Tendering."
Procedures.............. Holders of Private Notes who wish to tender their
Private Notes and whose Private Notes are not
immediately available or who cannot deliver their
Private Notes, the Letter of Transmittal or any other
documentation required by the Letter of Transmittal
to the Exchange Agent prior to the Expiration Date
must tender their Private Notes according to the
guaranteed delivery procedures set forth under "The
Exchange Offer--Guaranteed Delivery Procedures."
Acceptance of the
Private Notes and Subject to the satisfaction or waiver of the
Delivery of the conditions to the Exchange Offer, the Company will
Exchange Notes......... accept for exchange any and all Private Notes that
are properly tendered in the Exchange Offer prior to
the Expiration Date. The Exchange Notes issued
pursuant to the Exchange Offer will be delivered on
the earliest practicable date following the
Expiration Date. See "The Exchange Offer--Terms of
the Exchange Offer."
Withdrawal Rights....... Tenders of Private Notes may be withdrawn at any time
prior to the Expiration Date. See "The Exchange
Offer--Withdrawal of Tenders."
Certain Federal Income
Tax Consequences....... For a discussion of certain material federal income
tax consequences relating to the exchange of the
Exchange Notes for the Private Notes, see "Certain
United States Federal Income Tax Consequences."
9
<PAGE>
THE EXCHANGE NOTES
The Exchange Offer applies to $511,989,000 in aggregate principal amount at
maturity of the Private Notes. The form and terms of the Exchange Notes are the
same as the form and terms of the Private Notes except that (i) the exchange
will have been registered under the Securities Act and, therefore, the Exchange
Notes will not bear legends restricting the transfer thereof and (ii) holders
of the Exchange Notes will not be entitled to certain rights of holders of the
Private Notes under the Registration Rights Agreement, which rights will
terminate upon consummation of the Exchange Offer. The Exchange Notes will
evidence the same indebtedness as the Private Notes (which they replace) and
will be issued under, and be entitled to the benefits of, the Indenture. For
further information and for definitions of certain capitalized terms used
below, see "Description of Notes."
Securities Offered...... $511,989,000 in aggregate principal amount at
maturity of 11% Senior Discount Notes due 2008.
Maturity Date........... May 1, 2008.
Yield and Interest...... 11% per annum (computed on a semiannual bond
equivalent basis) calculated from May 4, 1998. Cash
interest will not accrue prior to May 1, 2003.
Commencing on November 1, 2003, cash interest will be
payable semiannually on May 1 and November 1 (an
"Interest Payment Date").
Original Issue Each Note is being offered at an original issue
Discount............... discount for federal income tax purposes. Thus,
although cash interest will not accrue on the Notes
prior to May 1, 2003, original issue discount (i.e.,
the difference between the principal amount at
maturity and the issue price of such Notes) will
accrue from the issue date of such Notes up to May 1,
2003 and will be included as interest income
periodically in a holder's gross income for federal
income tax purposes in advance of receipt of the cash
payments to which the income is attributable. See
"Certain United States Federal Income Tax
Consequences."
Optional Redemption..... The Notes are not redeemable prior to May 1, 2003,
except as set forth below. The Notes will be
redeemable at the option of Triton, in whole or in
part, at any time on or after May 1, 2003, at the
redemption prices set forth herein, together with
accrued and unpaid interest to the redemption date.
In addition, prior to May 1, 2001, Triton may redeem
up to 35% of the aggregate principal amount at
maturity of the Notes with the net cash proceeds
received from one or more Equity Offerings of Triton,
Holdings or a Special Purpose Corporation at a
redemption price of 111% of the Accreted Value
thereof, plus accrued and unpaid interest, if any, to
the redemption date; provided, however, that at least
65% in aggregate principal amount at maturity of the
Notes remains outstanding immediately after any such
redemption.
Guarantee...............
The Notes will be guaranteed on a joint and several
basis by all of Triton's subsidiaries that are direct
or indirect obligors under, or in respect of, any
Senior Credit Facilities. As of the date of this
registration statement, all of Triton's direct and
indirect subsidiaries are guarantors on a full,
unconditional, and joint and several basis. Triton
PCS Holdings, Inc., the direct parent and sole
stockholder of Triton, is not a guarantor. The
Guarantees will be unsecured obligations of the
Guarantors, subordinated in right of payment to all
Senior Debt of the Guarantors, including all of the
Guarantors' obligations under their guarantees of the
Credit Facility.
10
<PAGE>
Ranking.................
The Notes will be general unsecured obligations of
Triton, subordinated in right of payment to all
Senior Debt of Triton, including all obligations
under the Credit Facility. The Guarantees will be
unsecured obligations of the Guarantors, subordinated
in right of payment to all Senior Debt of the
Guarantors, including all of the Guarantors'
obligations under their guarantees of the Credit
Facility. As of August 25, 1998, Triton and the
Guarantors had $150 million of Senior Debt
outstanding. See "Description of Credit Facility."
Change of Control.......
Upon a Change of Control, each holder of the Notes
may require the Company to repurchase such holder's
Notes, in whole or in part, at a purchase price equal
to 101% of the Accreted Value thereof or the
principal amount at maturity, as applicable plus
accrued and unpaid interest to the purchase date. See
"Description of Notes--Covenants--Change of Control."
The Credit Facility will prohibit the purchase of
outstanding Notes prior to repayment of the
borrowings under the Credit Facility. There can be no
assurance that upon a Change of Control the Company
will have sufficient funds to repurchase any of the
Notes. See "Description of Credit Facility."
Certain Covenants....... The Indenture contains certain covenants that, among
other things, limit the ability of Triton or any of
its Restricted Subsidiaries to incur additional
Indebtedness, make certain Restricted Payments and
Investments, create Liens, permit dividend or other
payment restrictions to apply to Subsidiaries, enter
into certain transactions with Affiliates or
consummate certain merger, consolidation or similar
transactions. In addition, in certain circumstances,
the Company will be required to offer to purchase the
Notes at 100% of the Accreted Value or principal
amount at maturity thereof, as applicable, with the
net proceeds of certain asset sales. These covenants
are subject to a number of significant exceptions and
qualifications. See "Description of Notes."
For additional information regarding the Notes, see "Description of Notes."
RISK FACTORS
For a discussion of certain factors that should be considered in connection
with participating in the Exchange Offer, see "Risk Factors."
11
<PAGE>
RISK FACTORS
This Prospectus includes "Forward-Looking Statements" within the meaning of
Section 27A of the Securities Act and Section 21E of the Securities Exchange
Act of 1934, as amended. Although the Company believes that its plans,
intentions and expectations reflected in such forward-looking statements are
reasonable, it can give no assurance that such plans, intentions or
expectations will be achieved. Important factors that could cause actual
results to differ materially from the Company's forward-looking statements are
set forth below and elsewhere in this Prospectus. All forward-looking
statements attributable to the Company or persons acting on its behalf are
expressly qualified in their entirety by the cautionary statements set forth
below.
OPERATING LOSSES AND NEGATIVE CASH FLOW FROM OPERATIONS
The Company expects to incur significant operating losses and to generate
significant negative cash flow from operating activities during the next
several years while it develops and constructs its PCS network and builds its
customer base. If and when the Company has successfully completed its network
build-out and started to provide services to customers, the Company's
operating profitability will depend upon many factors, including, among
others, its ability to market its services successfully, achieve its projected
market penetration, manage customer turnover rates effectively and price its
services competitively. There can be no assurance that the Company will
achieve or sustain operating profitability or positive cash flow from
operating activities in the future. If the Company does not achieve and
maintain operating profitability and positive cash flow from operating
activities on a timely basis, it may not be able to meet its debt service
requirements, including its obligations with respect to the Notes.
SUBSTANTIAL CAPITAL REQUIREMENTS AND LIQUIDITY; HIGHLY LEVERAGED CAPITAL
STRUCTURE
The build-out of the Company's PCS network and the marketing of the
Company's PCS services will require substantial capital. As it completes its
build-out, the Company will be highly leveraged. The Company currently
estimates that its capital requirements (capital expenditures, working
capital, debt service requirements, anticipated operating losses and closing
costs) for the period from inception through year-end 2001 (including the
territory covered by the Myrtle Beach Acquisition and assuming substantial
completion of the Company's network build-out to cover 85% of the Pops in the
Licensed Area by such time and the consummation of the Norfolk Acquisition)
will total approximately $993 million. Actual amounts of the funds required
may vary materially from these estimates. Additional funds would be required
in the event of significant departures from the current business plan,
unforeseen delays, cost overruns, unanticipated expenses, regulatory changes,
engineering design changes and other technological risks or if the Company
acquires additional licenses. The Company engages, from time to time, in
discussions with AT&T regarding possible acquisitions of additional PCS
licenses from AT&T. See "Prospectus Summary--Potential Acquisition."
Furthermore, the Company may engage in discussions regarding future
acquisitions of cellular licenses within the Licensed Area. Sources of funding
for the Company's further financing requirements may include any or all of the
following: vendor financing, public offerings or private placements of equity
and debt securities, commercial bank loans and additional capital
contributions from equity investors. Due to its highly leveraged capital
structure, there can be no assurance that any other additional financing will
be available to the Company, or, if available, that such financing can be
obtained on a timely basis and on terms acceptable to the Company and within
limitations contained in the Indenture, the Credit Facility and any new
financing arrangements. Failure to obtain any such financing, should the need
for it develop, could result in the delay or abandonment of the Company's
development and expansion plans or the failure to meet regulatory
requirements. It also could impair the Company's ability to meet its debt
service requirements (including its obligations with respect to the Notes) and
could have a material adverse effect on its business. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations--
Liquidity and Capital Resources."
The degree to which the Company is leveraged could have certain other
important consequences to the Company and to the holders of the Notes,
including increasing its vulnerability to changes in general economic
conditions, increases in prevailing interest rates or competitive pressures on
pricing. In addition, the fact that the Company may be more leveraged than
certain of its competitors may become a competitive disadvantage.
12
<PAGE>
Investment in the Notes involves a high degree of risk. Prospective
purchasers of Notes should carefully consider the following factors in
addition to the other information contained herein in evaluating the Company
before purchasing any Notes.
DEVELOPMENT STAGE COMPANY; ABSENCE OF COMMERCIAL OPERATIONS
The Company is at an early stage of development. As of the date of this
Prospectus, the RF designs for the build-out of the Initial Configuration are
completed and the cell site acquisition process has been initiated; however,
the Company has only started building its PCS network and has not commenced
commercial PCS operations. The Company will require expenditures of
significant funds for development, construction, testing and deployment of its
PCS network before commencement of commercial operations. Such activities are
expected to place significant demands on the Company's managerial, operational
and financial resources. In addition, the Company's management has retained
direct control over its vendors and the system build-out process and will,
together with Entel Technologies, Inc. ("Entel") and Gearon & Co., Inc.
("Gearon"), oversee and implement the Company's build-out strategy. The
Company's future performance will depend, in part, on the Company's ability to
manage the build-out process successfully, to implement its operational and
administrative systems, to expand its employee base and to train and manage
its employees, including engineering, customer support, marketing and sales
personnel. There can be no assurance that the Company will be able to manage
operations successfully. Management's failure to guide and control growth
effectively (including implementing adequate systems, procedures and controls
in a timely manner) could have a material adverse effect on the Company. In
addition, there can be no assurance that the Company will be able to attract
or retain the highly qualified personnel required to operate its network
successfully. See "Business" and "Management."
NETWORK BUILD-OUT AND SYSTEM IMPLEMENTATION RISKS
In order for the Company to complete its PCS network and to provide its
wireless communications services to customers throughout the Licensed Area, it
must successfully (i) lease or otherwise obtain rights to a sufficient number
of cell and switch sites, (ii) develop and implement sophisticated information
systems, (iii) complete the purchase and installation of equipment, build-out
the physical infrastructure and test the network and (iv) relocate microwave
paths of existing users that may otherwise impair the Company's operations.
There can be no assurance that these events will occur on a timely basis or on
the cost basis assumed by the Company, or at all. Implementation of the
network involves various risks and contingencies, many of which are not within
the control of the Company and all of which could have a material adverse
effect on the implementation of the Company's system should there be delays or
other problems.
Site Acquisition. The successful implementation of the Company's PCS system
will be dependent, to a significant degree, upon the Company's ability to
lease or otherwise obtain rights to cell sites for the location of its base
station equipment. The cell site selection process will require the lease or
acquisition of approximately 500 sites prior to commencement of commercial
operations of the Company's PCS network in the Initial Configuration and
approximately 1,200 sites prior to full operation in the Licensed Area, many
of which are likely to require the Company to obtain zoning variances or other
local governmental or third-party approvals or permits. As of August 17, 1998,
the Company had signed leases or options for 292 sites, 142 of which were
pending zoning. As of August 17, 1998, there were 83 sites under construction.
In addition, changes to the Company's RF design resulting from difficulties in
the site acquisition process could have a negative impact on the ability of
the Company to complete the build-out of its network in a timely fashion,
which could cause operations in the Initial Configuration to be delayed or
limited. The inability of the Company to lease or otherwise obtain rights to
the cell sites required under the Company's RF design or to obtain the
requisite zoning and other local approvals in a timely and cost effective
manner could have a material adverse effect on the Company. As the Company
expands the geographic coverage of its PCS system, it expects that the site
acquisition process will continue, subject to site availability and the
continued need to receive zoning and other local approvals.
13
<PAGE>
Information Systems. The successful implementation and launch of the
Company's PCS system is dependent on the Company's ability to develop and
implement an integrated customer service, network management and billing
system. The majority of the systems work (including integration of hardware
and software) will be performed by the Company's vendors using their
respective platforms. Integration requires that numerous and diverse hardware
and software platforms work together through interfaces. The number of vendors
and the Company's tight implementation time frame will leave little time for
resolving problems discovered during testing. The Company expects to complete
an information system sufficient to enable it to launch commercial service by
the end of the first quarter of 1999 or shortly thereafter. Any failure to
develop an integrated information systems solution on schedule will have an
adverse effect on the ability of the Company to commence PCS commercial
operations in the Initial Configuration and the rest of the Company's planned
network.
Commencement of Operations. The Company's schedule for the commencement of
its operations in the Licensed Area is aggressive. Prior to commencing
operations, the Company will need to, among other things, purchase and install
network equipment, build out the physical infrastructure and test the network.
The Company intends to install a sophisticated, state-of-the-art network
requiring adherence to a strict build-out design; therefore, the Company may
experience system and construction delays prior to achieving full operation.
Any delay in full operation of the Company's system could have a material
adverse effect on the Company's financial condition and results of operations.
Relocation of Microwave Paths. For a period of up to five years after the
grant of a PCS license (subject to extension), a PCS licensee will be required
to share spectrum with existing microwave licensees that operate certain
microwave paths within its license area. PCS licensees are not permitted to
interfere with such existing licensees, so the Company may be required to
relocate those users to different frequency bands. See "Business--Network
Build-Out--Microwave Relocation." The Company estimates it must relocate a
total of 15 microwave paths in the Licensed Area, of which two need to be
relocated to launch commercial service in the Initial Configuration. As of
August 17, 1998, the two relocation agreements have been executed. In places
where relocation is necessary to permit operation of the Company's PCS system,
any delay in the relocation of such licensees may adversely affect the
Company's ability to commence commercial operations, which could have a
material adverse effect on the Company. The Company's estimated capital
requirements of $167 million for the Licensed Area through 1998, include $7
million allocated to the cost of relocating certain microwave paths. There can
be no assurance that the relocation of incumbent microwave operators can be
achieved for the amounts currently estimated or at all. The actual amounts of
funds required may vary materially from these estimates. See "--Government
Regulation; Dependence on FCC Licenses" and "Business--Regulation."
DEPENDENCE ON AT&T AFFILIATION
Pursuant to the AT&T Agreements, the Company is closely affiliated with
AT&T. Under the License Agreement (as defined herein), the Company has the
right to market its services under the AT&T brand name for a period of five
years (with an automatic five year renewal if neither party terminates such
agreement), and under the Stockholders' Agreement (as defined herein), the
Company is designated as AT&T's exclusive provider of mobile wireless services
within the Licensed Area for a period of 11 years. The Company and AT&T are
also parties to a reciprocal roaming agreement for a period of 20 years. Each
such agreement is subject to termination for breach of any material terms,
including, without limitation, certain minimum build-out and network quality
requirements and limitations on the use by the Company of the Licensed Marks
(as defined herein). See "Certain Relationships and Related Transactions--The
AT&T Agreements." In addition, in the event of a merger or other business
combination involving AT&T and another telecommunications company meeting
certain criteria set forth in the Stockholders' Agreement (a "Qualifying
Company"), AT&T has the right to terminate (i) its agreements not to compete
with the Company in the provision of mobile wireless services and (ii) its
obligations to use the Company as its exclusive provider of such mobile
wireless services in the Licensed Area. See "Certain Relationships and Related
Transactions--The AT&T Agreements--The Stockholders' Agreement." The Company
believes that as of the date of this Prospectus, only Sprint Corporation,
BellSouth Corporation and GTE Corporation qualify as Qualifying Companies. The
non-renewal or termination of any AT&T Agreement would have a material adverse
effect on the Company's operations.
14
<PAGE>
AT&T has entered into, and anticipates entering into similar affiliation
agreements with other companies (the "Affiliates") in other MTAs pursuant to
its nationwide PCS build-out strategy. The Company plans to capitalize on its
affiliation with AT&T and, consequently, the Affiliates, through the marketing
advantages that will arise from the successful implementation of AT&T's
services within the AT&T BTAs. As a result, the results of operations of the
Company are highly dependent on the Company's relationship with AT&T and
AT&T's and the Affiliates' success as wireless services providers. AT&T and
the Affiliates are subject, to varying degrees, to the economic,
administrative, logistical and other risks set forth in this Prospectus. There
can be no assurance that AT&T's and the Affiliates' PCS operations will be
successful. See "Business--Competition." In June 1998, AT&T announced a
proposed merger between TeleCommunications, Inc. and AT&T. The Company does
not believe that this contemplated merger will have any adverse impact on its
affiliation with AT&T.
RELATIONSHIP WITH AT&T; POSSIBLE CONFLICT OF INTEREST
The interests of AT&T and the Company may conflict and there can be no
assurance that any such conflict will be resolved in favor of the Company.
Pursuant to the Stockholders' Agreement, AT&T has the right to (i) select one
of the seven directors of the Company and (ii) approve, along with Michael
Kalogris and Steven Skinner, the selection of the two independent directors
nominated by the Cash Equity Investors. Pursuant to the Securities Purchase
Agreement, AT&T owes no duty to the Company except to the extent expressly set
forth in the Securities Purchase Agreement and the AT&T Agreements. Officers
and directors generally do not have fiduciary duties to holders of debt
securities such as the Notes. See "Management."
COMPETITION
The Company will initially compete directly in each of its markets within
the Licensed Area with two cellular providers. The existing cellular providers
in the Company's markets, most of which have an infrastructure in place and
have been operational for a number of years, and several of which have
significantly greater financial and technical resources than the Company, may
upgrade their networks to provide comparable services in competition with the
Company. The Company may also compete with several PCS license holders in each
of its markets. The Company believes that the ownership structure of PCS
licenses in the Licensed Area is fragmented; however, certain other PCS
license holders do hold licenses that overlap large portions of the Licensed
Area. The Company believes most PCS license holders have not commenced the
roll-out of their networks in the Licensed Area. However, the Company does
expect to compete directly with one or more PCS service providers in each of
its markets in the future. See "Business--Regulation."
The Company expects to also face competition from other existing
communications technologies such as SMR and ESMR, currently employed by Nextel
Communications, Inc. ("Nextel") in the Company's Licensed Area. SMR and ESMR
systems, which can provide services that may be competitive with those offered
by PCS, are often significantly less expensive to build and operate than PCS
systems. The FCC now licenses SMR systems in the 800 and 900 MHz bands in
contiguous blocks in defined geographic areas. The first auction of such SMR
spectrum occurred in October 1997. The results of these auctions may lead to
additional competition for the Company.
The Company anticipates that market prices for two-way wireless services
generally will decline in the future based upon increased competition. The
Company's ability to compete successfully will depend, in part, on its ability
to anticipate and respond to various competitive factors affecting the
industry, including new services that may be introduced, changes in consumer
preferences, demographic trends, economic conditions and discount pricing
strategies by competitors, all of which could adversely affect the Company's
operating margins. See "Business--Competition."
LIMITED PCS OPERATING HISTORY IN THE UNITED STATES; SIGNIFICANT CHANGE IN
WIRELESS INDUSTRY
PCS systems have limited operating history in the United States and there
can be no assurance that the operation of these systems in the Company's
markets will become profitable. In addition, the extent of potential demand
for PCS in the Company's markets cannot be estimated with any degree of
certainty. The inability of the Company to establish and successfully market
PCS services could have a material adverse effect on the Company's financial
condition and results of operations.
15
<PAGE>
The wireless telecommunications industry is experiencing significant
technological change, as evidenced by the increasing pace of digital upgrades
in existing analog wireless systems, ongoing improvements in the capacity and
quality of digital technology, shorter development cycles for new products and
enhancements and changes in end-user requirements and preferences. There is
also uncertainty as to the extent of customer demand as well as the extent to
which airtime and monthly access rates may continue to decline. As a result,
the future prospects of the industry and the Company, and the success of PCS
and other competitive services, remain uncertain.
GOVERNMENT REGULATION; DEPENDENCE ON FCC LICENSES
The licensing, construction, operation, sale and interconnection
arrangements of wireless telecommunications systems are regulated to varying
degrees by the FCC and, depending on the jurisdiction, state and local
regulatory agencies. In addition, the FCC, in conjunction with the Federal
Aviation Administration (the "FAA"), regulates tower marking and lighting.
There can be no assurance that either the FCC, the FAA or those state agencies
having jurisdiction over the Company's business will not adopt regulations or
take other actions that would adversely affect the business of the Company.
The Company's principal assets will be its licenses from the FCC to provide
PCS services. The loss of any such licenses would have a material adverse
effect on the Company. FCC licenses to provide PCS services are subject to
renewal and revocation. AT&T was initially granted the PCS Licenses on June
23, 1995. The FCC has adopted specific standards to apply to PCS renewals,
under which the FCC will award a renewal expectancy to a PCS licensee that (i)
has provided substantial service during its past license term and (ii) has
substantially complied with applicable FCC rules and policies and the
Communications Act of 1934 (the "Communications Act"). As a licensee, the
Company must construct facilities that offer coverage to one-third of the
population of its service areas within five years of the initial license
grants to AT&T and to two-thirds of the population within ten years. Licensees
that fail to meet the coverage requirements are subject to forfeiture of the
license. The Company expects to comply with the coverage requirements within
the requisite time period. See "Business--Regulation."
DEPENDENCE ON KEY PERSONNEL
The Company's business is managed by a small number of key executive
officers, the loss of certain of whom could have a material adverse effect on
the Company. The Company believes that its future success will also depend in
large part on its continued ability to attract and retain highly qualified
technical and management personnel. The Company believes that there is and
will continue to be intense competition for qualified personnel in the PCS
equipment and service industry as the emerging PCS market develops, and no
assurance can be given that the Company will be successful in retaining its
key personnel or in attracting and retaining other highly qualified technical
and management personnel. A number of key officers (Messrs. Kalogris, Skinner,
and Clark) are also officers of Triton Cellular Partners, L.P. ("Triton
Cellular"). Triton Cellular acquires, owns and operates cellular RSA's.
Through June 1998, a significant portion of the Company's officers' time had
been spent on this venture. With the appointment of a President and CEO for
Triton Cellular in July 1998, the portion of the Company's officers' time
spent on this venture was reduced. The Company's management is currently
attempting to hire the remaining key positions of the Triton Cellular
management team, which is expected to reduce the loss or diversion of the
Company's management's time and attention to Triton Cellular. There can be no
assurance that the Company will be able to hire such a management team. The
Company does not presently maintain "key man" life insurance with respect to
any of its executive officers or other employees. See "Management."
RISKS RELATED TO THE NORFOLK ACQUISITION
Consummation of the Norfolk Acquisition is subject to a number of regulatory
and closing conditions (including, without limitation, FCC approval), certain
of which are beyond the Company's control. Accordingly, there can be no
assurance as to when the Norfolk Acquisition will be consummated or that it
will be consummated on the terms described herein or at all. See "Prospectus
Summary--The Company."
16
<PAGE>
RISKS RELATED TO POTENTIAL ACQUISITION
The Company is currently a party to a non-binding letter of intent to
acquire the Georgia/North Carolina Pops. The acquisition of the Georgia/North
Carolina Pops is subject to the negotiation of definitive agreements. In
addition, the acquisition of the Georgia/North Carolina Pops is expected to be
subject to other conditions
typical in acquisitions of this nature, and certain of such conditions, such
as FCC approval, may be beyond the Company's control. There can be no
assurance that definitive agreements will be entered into with respect to the
Georgia/North Carolina Pops or, if entered into, that such acquisition will be
completed. See "Prospectus Summary--Potential Acquisition."
In addition, the Company may continue to pursue, on an opportunistic basis,
additional strategic acquisitions to enhance operational and financial
performance. Future acquisitions by the Company could result in the incurrence
of debt and/or contingent liabilities, which could materially adversely affect
the Company's business, financial condition and results of operations.
Acquisitions involve numerous risks, including difficulties in the
assimilation of the operations, technologies and services of the acquired
companies and the diversion of management's attention from other business
concerns. In the event that any such acquisitions were to occur, there can be
no assurance that the Company's business, financial condition and results of
operations would not be materially adversely affected.
OPERATING COSTS DUE TO FRAUD
As do most companies in the wireless industry, the Company will likely incur
costs associated with the unauthorized use of its network, including
administrative and capital costs associated with detecting, monitoring and
reducing the incidence of fraud. Fraud impacts interconnection costs, capacity
costs, administrative costs, fraud prevention costs and payments to other
carriers for unbillable fraudulent roaming.
TECHNOLOGY RISKS
The Company intends to employ digital wireless communications technology,
utilizing the new TDMA/IS-136 standard. Other digital technologies, such as
CDMA and GSM, may ultimately prove to be more advantageous than TDMA. If
another technology becomes the preferred industry standard, the Company may be
at a competitive disadvantage and competitive pressures may require the
Company to change its digital technology at substantially increased costs.
There can be no assurance that the Company could respond to such pressures and
implement new technology on a timely basis, or at an acceptable cost. If TDMA
technology becomes obsolete at some time in the future, and the Company is
unable to effect a cost-effective migration path, it could materially and
adversely effect the Company's financial condition, results of operations and
liquidity. There can be no assurance that TDMA/IS-136 will always meet or
exceed the capabilities and quality of other technologies. See "Business--TDMA
Technology."
RADIO FREQUENCY EMISSION CONCERNS; MEDICAL DEVICE INTERFERENCE
Media reports have suggested that certain RF emissions from wireless
handsets may be linked to various health concerns, including cancer, and may
interfere with various electronic medical devices, including hearing aids and
pacemakers. Concerns over RF emission may have the effect of discouraging the
use of wireless handsets, which could have an adverse effect upon the
Company's business. During the past two years, the FCC has updated the
guidelines and methods it uses for evaluating RF emissions from radio
equipment, including wireless handsets. While the updates impose more
restrictive standards on RF emissions from lower power devices such as
wireless handsets, all wireless handsets the Company proposes to offer its
customers will comply with the new proposed standards. In addition, certain
interest groups have requested that the FCC investigate claims that TDMA and
other digital technologies pose health concerns and cause interference with
hearing aids and other medical devices. The FCC recently initiated a
rulemaking proceeding to implement provisions of the Telecommunications Act of
1996 (the "Telecommunications Act") designed to ensure that PCS handsets and
other technological equipment are accessible to people with disabilities.
17
<PAGE>
LIMITATIONS IMPOSED BY CERTAIN INDEBTEDNESS
The documents governing the indebtedness of the Company (including the Credit
Facility and the Indenture) contain significant covenants that limit Triton's
and its subsidiaries' ability to engage in various transactions and, in the
case of the Credit Facility, require satisfaction of specified financial
performance criteria. In addition, under each of the foregoing documents, the
occurrence of certain events (including, without limitation, failure to comply
with the foregoing covenants, material inaccuracies of representations and
warranties, certain defaults under or acceleration of other indebtedness and
events of bankruptcy or insolvency) would, in certain cases after notice and
grace periods, constitute an event of default permitting acceleration of the
indebtedness covered by such documents. The limitations imposed by the
documents governing the outstanding indebtedness of Triton and its subsidiaries
are substantial, and failure to comply with them could have a material adverse
effect on Triton and its subsidiaries. See "Description of Notes" and
"Description of Credit Facility."
SUBORDINATION
The Notes and the Guarantees will be unsecured obligations of Triton and its
subsidiaries and will be subordinated in right of payment to all current and
future Senior Debt, including indebtedness under the Credit Facility. As of
August 25, 1998, Triton and the Guarantors had $150 million of borrowings under
the Credit Facility. In the event of a liquidation, dissolution,
reorganization, bankruptcy or any similar proceeding of Triton and its
subsidiaries, the assets of Triton and its subsidiaries will be available to
pay obligations on the Notes and the Guarantees only after Senior Debt of
Triton has been paid in full. Accordingly, there may not be sufficient funds
remaining to pay amounts due on all or any of the Notes. See "Description of
Notes--Ranking."
The Company has granted to the lenders under the Credit Facility a security
interest in substantially all of the assets of Triton and each existing and
subsequently acquired or organized domestic subsidiary of Triton, including a
first priority pledge of all of the capital stock of all domestic subsidiaries
of Triton. In the event of a default on secured indebtedness, the parties
granted such security interests will have a prior secured claim on the capital
stock of Triton's subsidiaries and the assets of Triton and its subsidiaries.
If such parties should attempt to foreclose on their collateral, the Company's
financial condition and the value of the Notes would be materially adversely
affected. See "Description of Credit Facility."
POSSIBLE INABILITY TO REPURCHASE NOTES UPON A CHANGE OF CONTROL
The Credit Facility prohibits the Company from purchasing any of the Notes
and also provides that certain change of control events with respect to the
Company constitute a default thereunder. Any future credit agreements or other
agreements relating to Senior Debt to which the Company becomes a party may
contain similar restrictions and provisions. In the event a Change of Control
occurs at a time when the Company is prohibited from purchasing the Notes, the
Company could seek the consent of its lenders to the purchase of the Notes or
could attempt to refinance the borrowings that contain such prohibition. If the
Company does not obtain such a consent or repay such borrowings, the Company
will remain prohibited from purchasing the Notes by the relevant Senior Debt.
In such case, the Company's failure to purchase the tendered Notes would
constitute an event of default under the Indenture which would, in turn,
constitute a default under the Credit Facility and/or other Senior Debt.
Furthermore, no assurance can be given that the Company will have sufficient
resources to satisfy its repurchase obligation with respect to the Notes
following a Change of Control. See "Description of Notes."
FRAUDULENT CONVEYANCE
Various fraudulent conveyance laws have been enacted for the protection of
creditors and may be utilized by a court to subordinate or avoid the Notes or
any of the Guarantees in favor of other existing or future creditors of Triton
or any of its subsidiaries. If a court in a lawsuit on behalf of any unpaid
creditor of Triton or its subsidiaries or a representative of Triton's or any
of its subsidiaries' creditors were to find that, at the time Triton and its
subsidiaries issued the Notes and the Guarantees, Triton or any of its
subsidiaries (x) intended to hinder,
18
<PAGE>
delay or defraud any existing or future creditor or contemplated insolvency
with a design to prefer one or more creditors to the exclusion in whole or in
part of others or (y) did not receive fair consideration or reasonably
equivalent value for issuing the Notes or any of the Guarantees and Triton or
any of its subsidiaries (i) were insolvent, (ii) were rendered insolvent by
reason of such issuance, (iii) were engaged or about to engage in a business
or transaction for which its remaining assets constituted unreasonably small
capital to carry on its business or (iv) intended to incur, or believed that
it would incur, debts beyond its ability to pay such debts as they matured,
such court could void Triton's or such subsidiary's obligations under the
Notes and/or the Guarantees and void such transactions. Alternatively, in such
event, claims of the holders of the Notes could be subordinated to claims of
the other creditors of Triton or its subsidiaries. Based upon financial and
other information currently available to it, Triton believes that the Notes
and the Guarantees are being incurred for proper purposes and in good faith
and Triton and its subsidiaries are solvent and will continue to be solvent
after issuing the Notes, will have sufficient capital for carrying on its
business after such issuance and will be able to pay its debts as they mature.
FAILURE TO EXCHANGE PRIVATE NOTES
Exchange Notes will be issued in exchange for Private Notes only after
timely receipt by the Exchange Agent of such Private Notes, a properly
completed and duly executed Letter of Transmittal and all other required
documentation. Therefore, holders of Private Notes desiring to tender such
Private Notes in exchange for Exchange Notes should allow sufficient time to
ensure timely delivery. Neither the Exchange Agent nor the Company is under
any duty to give notification of defects or irregularities with respect to
tenders of Private Notes for exchange. Private Notes that are not tendered or
are tendered but not accepted will, following consummation of the Exchange
Offer, continue to be subject to the existing restriction upon transfer
thereof. In addition, any holder of Private Notes who tenders in the Exchange
Offer for the purpose of participating in a distribution of the Exchange Notes
will be required to comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any resale transaction.
Each broker-dealer that receives Exchange Notes for its own account in
exchange for Private Notes, where such Private Notes were acquired by such
broker-dealer as a result of market-making activities or any other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such Exchange Notes. To the extent that Private Notes are
tendered and accepted in the Exchange Offer, the trading market for untendered
and tendered but unaccepted Private Notes could be adversely affected due to
the limited amount, or "float," of the Private Notes that are expected to
remain outstanding following the Exchange Offer. Generally, a lower "float" of
a security could result in less demand to purchase such security and could,
therefore, result in lower prices for such security. For the same reason, to
the extent that a large amount of Private Notes are not tendered or are
tendered and not accepted in the Exchange Offer, the trading market for the
Exchange Notes could be adversely affected. See "Plan of Distribution" and
"The Exchange Offer."
ORIGINAL ISSUE DISCOUNT CONSEQUENCES OF EXCHANGE NOTES
The Exchange Notes will bear interest at the same rate and on the same terms
as the Private Notes. Therefore, the Private Notes have been issued at a
substantial discount from their principal amount at maturity. Although cash
interest will not accrue on the Exchange Notes prior to May 1, 2003 and there
will be no periodic payments of cash interest on the Exchange Notes prior to
November 1, 2003, original issue discount (the difference between the
aggregate principal amount at maturity and the issue price of the Exchange
Notes) will accrue from the issue date of the Exchange Notes. Consequently,
those who participate in the Exchange Offer generally will be required to
include amounts in gross income for United States federal income tax purposes
in advance of their receipt of the cash payments to which the income is
attributable. Such amounts in the aggregate will be equal to the difference
between the stated redemption price at maturity (inclusive of stated interest
on the Exchange Notes) and the issue price of the Exchange Notes. See "Certain
United States Federal Income Tax Consequences" for a more detailed discussion
of the federal income tax consequences of the purchase, ownership and
disposition of the Exchange Notes.
19
<PAGE>
In the event a bankruptcy case is commenced by or against the Company under
the United States Bankruptcy Code after the exchange of the Exchange Notes,
the claim of a holder of Exchange Notes may be limited to an amount equal to
the sum of (i) the initial offering price and (ii) that portion of the
original issue discount which is not deemed to constitute "unmatured interest"
for purposes of the Bankruptcy Code. Any original issue discount that was not
amortized as of the date of any such bankruptcy filing would constitute
"unmatured interest." To the extent that the Bankruptcy Code differs from the
Internal Revenue Code in determining the method of amortization of original
issue discount, a holder of Exchange Notes may realize taxable gain or loss on
payment of such holder's claim in bankruptcy.
ABSENCE OF PUBLIC MARKET FOR THE NOTES; RESTRICTIONS ON TRANSFER
As of the date hereof, the only registered holder of Private Notes is Cede &
Co., as its nominee. The Company believes that, as of the date hereof, such
holder is not an "affiliate" (as such term is defined in Rule 405 under the
Securities Act) of the Company. Prior to the Private Offering, there had been
no market for the Notes and there can be no assurance that such a market will
develop or, if such a market develops, as to the liquidity of such market. The
Exchange Notes will not be listed on any securities exchange, but the Private
Notes are eligible for trading in the National Association of Securities
Dealers, Inc.'s Private Offering, Resales and Trading through Automatic
Linkages (PORTAL) market. The Exchange Notes are new securities for which
there is currently no market. The Exchange Notes may trade at a discount from
their initial offering price, depending upon prevailing interest rates, the
market for similar securities, the performance of the Company and other
factors. The Company has been advised by the Initial Purchasers that they
intend to make a market in the Exchange Notes, as well as the Private Notes,
as permitted by applicable laws and regulations; however, the Initial
Purchasers are not obligated to do so and any such market-making activities
may be discontinued at any time without notice. In addition, such market-
making activities may be limited during the Exchange Offer and the pendency of
the Shelf Registration Statement (as defined in the Registration Rights
Agreement). Therefore, there can be no assurance that an active market for the
Notes will develop. See "The Exchange Offer" and "Plan of Distribution."
20
<PAGE>
THE EXCHANGE OFFER
PURPOSE OF THE EXCHANGE OFFER
The Private Notes were sold by the Company on May 4, 1998 (the "Closing
Date") to the Initial Purchasers pursuant to the Purchase Agreement. The
Initial Purchasers subsequently sold the Private Notes (i) to "qualified
institutional buyers" ("QIBs"), as defined in Rule 144A under the Securities
Act ("Rule 144A"), in reliance on Rule 144A and (ii) pursuant to offers and
sales that occurred outside the United States within the meaning of Regulation
S under the Securities Act. As a condition to the sale of the Private Notes,
the Company and the Initial Purchasers entered into the Registration Rights
Agreement on May 4, 1998. Pursuant to the Registration Rights Agreement, the
Company agreed that, unless the Exchange Offer is not permitted by applicable
law or Commission policy, it would (i) file with the Commission a Registration
Statement under the Securities Act with respect to the Exchange Notes within
90 days after the Closing Date, (ii) use its best efforts to cause such
Registration Statement to become effective under the Securities Act within 150
days after the Closing Date and (iii) use its best efforts to consummate the
Exchange Offer within 180 days after the Closing Date. A copy of the
Registration Rights Agreement has been filed as an exhibit to the Registration
Statement. The Registration Statement is intended to satisfy certain of the
Company's obligations under the Registration Rights Agreement and the Purchase
Agreement.
RESALE OF THE EXCHANGE NOTES
With respect to the Exchange Notes, based upon an interpretation by the
staff of the Commission set forth in certain no-action letters issued to third
parties, the Company believes that a holder (other than (i) a broker-dealer
who purchases such Exchange Notes directly from the Company to resell pursuant
to Rule 144A or any other available exemption under the Securities Act or (ii)
any such holder that is an "affiliate" of the Company within the meaning of
Rule 405 under the Securities Act) who exchanges Private Notes for Exchange
Notes in the ordinary course of business and who is not participating, does
not intend to participate, and has no arrangement with any person to
participate, in a distribution of the Exchange Notes, will be allowed to
resell Exchange Notes to the public without further registration under the
Securities Act and without delivering to the purchasers of the Exchange Notes
a prospectus that satisfies the requirements of Section 10 of the Securities
Act. (See e.g., Exxon Capital Holdings Corp., SEC No-Action Letter (available
April 13, 1989) and Morgan Stanley & Co. Inc., SEC No-Action Letter (available
June 5, 1991)). However, if any holder acquires Exchange Notes in the Exchange
Offer for the purpose of distributing or participating in the distribution of
the Exchange Notes or is a broker-dealer, such holder cannot rely on the
position of the staff of the Commission enumerated in certain no-action
letters issued to third parties and must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with any
resale transaction, unless an exemption from registration is otherwise
available. Each broker-dealer that receives Exchange Notes for its own account
in exchange for Private Notes, where such Private Notes were acquired by such
broker-dealer as a result of market-making activities or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such Exchange Notes. The Letter of Transmittal states that
by so acknowledging and by delivering a prospectus, a broker-dealer will not
be deemed to admit that it is an "underwriter" within the meaning of the
Securities Act. This Prospectus, as it may be amended or supplemented from
time to time, may be used by a broker-dealer in connection with resales of
Exchange Notes received in exchange for Private Notes where such Private Notes
were acquired by such broker-dealer as a result of market-making or other
trading activities. Pursuant to the Registration Rights Agreement, the Company
has agreed to make this Prospectus, as it may be amended or supplemented from
time to time, available to broker-dealers for use in connection with any
resale for a period of 180 days after the Expiration Date. See "Plan of
Distribution."
TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions set forth in this Prospectus
and in the Letter of Transmittal, the Company will accept any and all Private
Notes validly tendered and not withdrawn prior to the Expiration Date. The
Company will issue $1,000 principal amount at maturity of Exchange Notes in
exchange for each $1,000 principal amount at maturity of outstanding Private
Notes surrendered pursuant to the Exchange Offer. Private Notes may be
tendered only in integral multiples of $1,000.
21
<PAGE>
The form and terms of the Exchange Notes are the same as the form and terms
of the Private Notes except that (i) the exchange will be registered under the
Securities Act and, therefore, the Exchange Notes will not bear legends
restricting the transfer thereof and (ii) holders of the Exchange Notes will
not be entitled to any of the rights of holders of Private Notes under the
Registration Rights Agreement, which rights will terminate upon the
consummation of the Exchange Offer. The Exchange Notes will evidence the same
indebtedness as the Private Notes (which they replace) and will be issued
under, and be entitled to the benefits of, the Indenture, which also
authorized the issuance of the Private Notes, such that both series of Notes
will be treated as a single class of debt securities under the Indenture.
As of the date of this Prospectus, $511,989,000 in aggregate principal
amount at maturity of the Private Notes are outstanding and registered in the
name of Cede & Co., as nominee for the Depository. Only a registered holder of
the Private Notes (or such holder's legal representative or attorney-in-fact)
as reflected on the records of the Trustee under the Indenture may participate
in the Exchange Offer. There will be no fixed record date for determining
registered holders of the Private Notes entitled to participate in the
Exchange Offer.
Holders of the Private Notes do not have any appraisal or dissenters' rights
under the Indenture in connection with the Exchange Offer. The Company intends
to conduct the Exchange Offer in accordance with the provisions of the
Registration Rights Agreement and the applicable requirements of the
Securities Act, the Exchange Act and the rules and regulations of the
Commission thereunder.
The Company shall be deemed to have accepted validly tendered Private Notes
when and if the Company has given oral or written notice thereof to the
Exchange Agent. The Exchange Agent will act as agent for the tendering holders
of Private Notes for the purposes of receiving the Exchange Notes from the
Company.
Holders who tender Private Notes in the Exchange Offer will not be required
to pay brokerage commissions or fees or, subject to the instructions in the
Letter of Transmittal, transfer taxes with respect to the exchange of Private
Notes pursuant to the Exchange Offer. The Company will pay all charges and
expenses, other than certain applicable taxes described below, in connection
with the Exchange Offer. See "--Fees and Expenses."
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "Expiration Date" shall mean 5:00 p.m., New York City time on
, 1998, unless the Company, in its sole discretion, extends the Exchange
Offer, in which case the term "Expiration Date" shall mean the latest date and
time to which the Exchange Offer is extended.
In order to extend the Exchange Offer, the Company will (i) notify the
Exchange Agent of any extension by oral or written notice, (ii) mail to the
registered holders an announcement thereof and (iii) issue a press release or
other public announcement which shall include disclosure of the approximate
number of Private Notes deposited to date, each prior to 9:00 a.m., New York
City time, on the next business day after the previously scheduled Expiration
Date. Without limiting the manner in which the Company may choose to make a
public announcement of any delay, extension, amendment or termination of the
Exchange Offer, the Company shall have no obligation to publish, advertise, or
otherwise communicate any such public announcement, other than by making a
timely release to an appropriate news agency.
The Company reserves the right, in its sole discretion, (i) to delay
accepting any Private Notes, (ii) to extend the Exchange Offer or (iii) if any
conditions set forth below under "--Conditions" shall not have been satisfied,
to terminate the Exchange Offer by giving oral or written notice of such
delay, extension or termination to the Exchange Agent. Any such delay in
acceptance, extension, termination or amendment will be followed as promptly
as practicable by oral or written notice thereof to the registered holders. If
the Exchange Offer is amended in a manner determined by the Company to
constitute a material change, the Company will promptly disclose such
amendment by means of a prospectus supplement that will be distributed to the
registered holders, and the Company will extend the Exchange Offer for a
period of five to ten business days, depending upon the significance of the
amendment and the manner of disclosure to the registered holders, if the
Exchange Offer would otherwise expire during such five to ten business day
period.
22
<PAGE>
INTEREST ON THE EXCHANGE NOTES
The Exchange Notes will bear interest at the same rate and on the same terms
as the Private Notes. Consequently, the Exchange Notes will be issued at a
substantial discount to their principal amount at maturity. The Exchange Notes
will accrete in value from and including the date of issuance of the Private
Notes (May 4, 1998) until May 1, 2003 at which time they will have an
aggregate principal amount at maturity of $511,989,000. Thereafter, cash
interest will accrue on the Exchange Notes and will be payable semi-annually
in arrears on May 1 and November 1, commencing November 1, 2003, at a rate of
11% per annum. Holders whose Private Notes are accepted for exchange will be
deemed to have waived the right to receive any interest accrued on the Private
Notes.
PROCEDURES FOR TENDERING
Only a registered holder of Private Notes may tender such Private Notes in
the Exchange Offer. To tender in the Exchange Offer, a holder of Private Notes
must complete, sign and date the Letter of Transmittal, or a facsimile
thereof, have the signatures thereon guaranteed if required by the Letter of
Transmittal, and mail or otherwise deliver such Letter of Transmittal or such
facsimile to the Exchange Agent at the address set forth below under "--
Exchange Agent" for receipt prior to the Expiration Date. In addition, either
(i) certificates for such Private Notes must be received by the Exchange Agent
along with the Letter of Transmittal, (ii) a timely confirmation of a book-
entry transfer (a "Book-Entry Confirmation") of such Private Notes, if such
procedure is available, into the Exchange Agent's account at the Depository
pursuant to the procedure for book-entry transfer described below, must be
received by the Exchange Agent prior to the Expiration Date or (iii) the
holder must comply with the guaranteed delivery procedures described below.
The tender by a holder that is not withdrawn prior to the Expiration Date
will constitute an agreement between such holder and the Company in accordance
with the terms and subject to the conditions set forth herein and in the
Letter of Transmittal.
THE METHOD OF DELIVERY OF PRIVATE NOTES AND THE LETTER OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND RISK
OF THE HOLDER. INSTEAD OF DELIVERY BY MAIL, IT IS RECOMMENDED THAT HOLDERS USE
AN OVERNIGHT OR HAND DELIVERY SERVICE, PROPERLY INSURED. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE DELIVERY TO THE EXCHANGE AGENT
BEFORE THE EXPIRATION DATE. NO LETTER OF TRANSMITTAL OR PRIVATE NOTES SHOULD
BE SENT TO THE COMPANY. HOLDERS MAY REQUEST THEIR RESPECTIVE BROKERS, DEALERS,
COMMERCIAL BANKS, TRUST COMPANIES OR NOMINEES TO EFFECT THE ABOVE TRANSACTIONS
FOR SUCH HOLDERS.
Any beneficial owner(s) of the Private Notes whose Private Notes are
registered in the name of a broker, dealer, commercial bank, trust company or
other nominee and who wishes to tender should contact the registered holder
promptly and instruct such registered holder to tender on such beneficial
owner's behalf. If such beneficial owner wishes to tender on such owner's own
behalf, such owner must, prior to completing and executing the Letter of
Transmittal and delivering such owner's Private Notes, either make appropriate
arrangements to register ownership of the Private Notes in such owner's name
or obtain a properly completed bond power from the registered holder. The
transfer of registered ownership may take considerable time.
Signatures on a Letter of Transmittal or a notice of withdrawal described
below (see "--Withdrawal of Tenders"), as the case may be, must be guaranteed
by an Eligible Institution (as defined below) unless the Private Notes
tendered pursuant thereto are tendered (i) by a registered holder who has not
completed the box titled "Special Delivery Instructions" on the Letter of
Transmittal or (ii) for the account of an Eligible Institution. In the event
that signatures on a Letter of Transmittal or a notice of withdrawal, as the
case may be, are required to be guaranteed, such guarantee must be made by a
member firm of a registered national securities exchange or of the National
Association of Securities Dealers, Inc., a commercial bank or trust company
having an office or correspondent in the United States or an "eligible
guarantor institution" within the meaning of
23
<PAGE>
Rule 17Ad-15 under the Exchange Act which is a member of one of the recognized
signature guarantee programs identified in the Letter of Transmittal (an
"Eligible Institution").
If the Letter of Transmittal is signed by a person other than the registered
holder of any Private Notes listed therein, such Private Notes must be
endorsed or accompanied by a properly completed bond power, signed by such
registered holder as such registered holder's name appears on such Private
Notes.
If the Letter of Transmittal or any Private Notes or bond powers are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity,
such persons should so indicate when signing, and unless waived by the
Company, evidence satisfactory to the Company of their authority to so act
must be submitted with the Letter of Transmittal.
The Exchange Agent and the Depository have confirmed that any financial
institution that is a participant in the Depository's system may utilize the
Depository's Automated Tender Offer Program to tender Private Notes.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance and withdrawal of tendered Private Notes will be
determined by the Company in its sole discretion, which determination will be
final and binding. The Company reserves the absolute right to reject any and
all Private Notes not properly tendered or any Private Notes the Company's
acceptance of which would, in the opinion of counsel for the Company, be
unlawful. The Company also reserves the right to waive any defects,
irregularities or conditions of tender as to particular Private Notes. The
Company's interpretation of the terms and conditions of the Exchange Offer
(including the instructions in the Letter of Transmittal) will be final and
binding on all parties. Unless waived, any defects or irregularities in
connection with tenders of Private Notes must be cured within such time as the
Company shall determine. Although the Company intends to notify holders of
defects or irregularities with respect to tenders of Private Notes, neither
the Company, the Exchange Agent nor any other person shall incur any liability
for failure to give such notification. Tenders of Private Notes will not be
deemed to have been made until such defects or irregularities have been cured
or waived.
While the Company has no present plan to acquire any Private Notes that are
not tendered in the Exchange Offer or to file a registration statement to
permit resales of any Private Notes that are not tendered pursuant to the
Exchange Offer, the Company reserves the right in its sole discretion to
purchase or make offers for any Private Notes that remain outstanding
subsequent to the Expiration Date or, as set forth below under "--Conditions,"
to terminate the Exchange Offer and, to the extent permitted by applicable
law, purchase Private Notes in the open market, in privately negotiated
transactions or otherwise. The terms of any such purchases or offers could
differ from the terms of the Exchange Offer.
By tendering, each holder of Private Notes will represent to the Company
that, among other things, (i) Exchange Notes to be acquired by such holder of
Private Notes in connection with the Exchange Offer are being acquired by such
holder in the ordinary course of business of such holder, (ii) such holder has
no arrangement or understanding with any person to participate in the
distribution of the Exchange Notes, (iii) if such holder is a resident of the
State of California, it falls under the self-executing institutional investor
exemption set forth under Section 25102(i) of the Corporate Securities Law of
1968 and Rules 260.102.10 and 260.105.14 of the California Blue Sky
Regulations, (iv) if such holder is a resident of the Commonwealth of
Pennsylvania, it falls under the self-executing institutional investor
exemption set forth under Sections 203(c), 102(d) and (k) of the Pennsylvania
Securities Act of 1972, Section 102.111 of the Pennsylvania Blue Sky
Regulations and an interpretive opinion dated November 16, 1985, (v) such
holder acknowledges and agrees that any person who is a broker-dealer
registered under the Exchange Act or is participating in the Exchange Offer
for the purposes of distributing the Exchange Notes must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with a secondary resale transaction of the Exchange Notes acquired
by such person and cannot rely on the position of the staff of the Commission
set forth in certain no-action letters, (vi) such holder understands that a
secondary resale transaction described in clause (v) above and any resales of
Exchange Notes obtained by such holder in exchange for Private Notes acquired
by such holder directly from the Company should be covered by an effective
registration statement containing the selling securityholder information
24
<PAGE>
required by Item 507 or Item 508, as applicable, of Regulation S-K of the
Commission and (vii) such holder is not an "affiliate," as defined in Rule 405
under the Securities Act, of the Company. If the holder is a broker-dealer
that will receive Exchange Notes for such holder's own account in exchange for
Private Notes that were acquired as a result of market-making activities or
other trading activities, such holder will be required to acknowledge in the
Letter of Transmittal that such holder will deliver a prospectus in connection
with any resale of such Exchange Notes; however, by so acknowledging and by
delivering a prospectus, such holder will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
RETURN OF PRIVATE NOTES
If any tendered Private Notes are not accepted for any reason set forth in
the terms and conditions of the Exchange Offer or if Private Notes are
withdrawn or are submitted for a greater principal amount at maturity than the
holders desire to exchange, such unaccepted, withdrawn or non-exchanged
Private Notes will be returned without expense to the tendering holder thereof
(or, in the case of Private Notes tendered by book-entry transfer into the
Exchange Agent's account at the Depository pursuant to the book-entry transfer
procedures described below, such Private Notes will be credited to an account
maintained with the Depository) as promptly as practicable.
BOOK-ENTRY TRANSFER
The Exchange Agent will make a request to establish an account with respect
to the Private Notes at the Depository for purposes of the Exchange Offer
within two business days after the date of this Prospectus, and any financial
institution that is a participant in the Depository's systems may make book-
entry delivery of Private Notes by causing the Depository to transfer such
Private Notes into the Exchange Agent's account at the Depository in
accordance with the Depository's procedures for transfer. However, although
delivery of Private Notes may be effected through book-entry transfer at the
Depository, the Letter of Transmittal or facsimile thereof, with any required
signature guarantees and any other required documents, must, in any case, be
transmitted to and received by the Exchange Agent at the address set forth
below under "--Exchange Agent" on or prior to the Expiration Date or pursuant
to the guaranteed delivery procedures described below.
GUARANTEED DELIVERY PROCEDURES
Holders who wish to tender their Private Notes and (i) whose Private Notes
are not immediately available or (ii) who cannot deliver their Private Notes,
the Letter of Transmittal or any other required documents to the Exchange
Agent prior to the Expiration Date, may effect a tender if:
(a) The tender is made through an Eligible Institution;
(b) Prior to the Expiration Date, the Exchange Agent receives from such
Eligible Institution a properly completed and duly executed Notice of
Guaranteed Delivery substantially in the form provided by the Company (by
facsimile transmission, mail or hand delivery) setting forth the name and
address of the holder, the certificate number(s) of such Private Notes and
the principal amount at maturity of Private Notes tendered, stating that
the tender is being made thereby and guaranteeing that, within five New
York Stock Exchange trading days after the Expiration Date, the Letter of
Transmittal (or a facsimile thereof), together with the certificate(s)
representing the Private Notes in proper form for transfer or a Book-Entry
Confirmation, as the case may be, and any other documents required by the
Letter of Transmittal, will be deposited by the Eligible Institution with
the Exchange Agent; and
(c) Such properly executed Letter of Transmittal (or facsimile thereof),
as well as the certificate(s) representing all tendered Private Notes in
proper form for transfer and all other documents required by the Letter of
Transmittal are received by the Exchange Agent within five New York Stock
Exchange trading days after the Expiration Date.
Upon request to the Exchange Agent, a Notice of Guaranteed Delivery will be
sent to holders who wish to tender their Private Notes according to the
guaranteed delivery procedures set forth above.
25
<PAGE>
WITHDRAWAL OF TENDERS
Except as otherwise provided herein, tenders of Private Notes may be
withdrawn at any time prior to the Expiration Date.
To withdraw a tender of Private Notes in the Exchange Offer, a written or
facsimile transmission notice of withdrawal must be received by the Exchange
Agent at its address set forth herein prior to the Expiration Date. Any such
notice of withdrawal must (i) specify the name of the person having deposited
the Private Notes to be withdrawn (the "Depositor"), (ii) identify the Private
Notes to be withdrawn (including the certificate number or numbers and
principal amount at maturity of such Private Notes) and (iii) be signed by the
holder in the same manner as the original signature on the Letter of
Transmittal by which such Private Notes were tendered (including any required
signature guarantees). All questions as to the validity, form and eligibility
(including time of receipt) of such notices will be determined by the Company
in its sole discretion, whose determination shall be final and binding on all
parties. Any Private Notes so withdrawn will be deemed not to have been
validly tendered for purposes of the Exchange Offer and no Exchange Notes will
be issued with respect thereto unless the Private Notes so withdrawn are
validly retendered. Properly withdrawn Private Notes may be retendered by
following one of the procedures described above under "The Exchange Offer--
Procedures for Tendering" at any time prior to the Expiration Date.
CONDITIONS
Notwithstanding any other term of the Exchange Offer, the Company shall not
be required to accept for exchange, or exchange the Exchange Notes for, any
Private Notes, and may terminate the Exchange Offer as provided herein before
the acceptance of such Private Notes, if the Exchange Offer violates
applicable law, rules or regulations or an applicable interpretation of the
staff of the Commission.
If the Company reasonably determines in good faith that any of these
conditions are not satisfied, the Company may (i) refuse to accept any Private
Notes and return all tendered Private Notes to the tendering holders, (ii)
extend the Exchange Offer and retain all Private Notes tendered prior to the
expiration of the Exchange Offer, subject, however, to the rights of holders
to withdraw such Private Notes (see "--Withdrawal of Tenders") or (iii) waive
such unsatisfied conditions with respect to the Exchange Offer and accept all
properly tendered Private Notes that have not been withdrawn. If such waiver
constitutes a material change to the Exchange Offer, the Company will promptly
disclose such waiver by means of a prospectus supplement that will be
distributed to the registered holders of the Private Notes, and the Company
will extend the Exchange Offer for a period of five to ten business days,
depending upon the significance of the waiver and the manner of disclosure to
the registered holders, if the Exchange Offer would otherwise expire during
such five to ten business day period.
TERMINATION OF CERTAIN RIGHTS
All rights under the Registration Rights Agreement (including registration
rights) of holders of the Private Notes eligible to participate in the
Exchange Offer will terminate upon consummation of the Exchange Offer except
with respect to the Company's continuing obligations (i) to indemnify such
holders (including any broker-dealers) and certain parties related to such
holders against certain liabilities (including liabilities under the
Securities Act), (ii) to provide, upon the request of any holder of a
transfer-restricted Private Note, the information required by Rule 144A(d)(4)
under the Securities Act in order to permit resales of such Private Notes
pursuant to Rule 144A, (iii) to use its best efforts to keep the Registration
Statement effective to the extent necessary to ensure that it is available for
resales of transfer-restricted Private Notes by broker-dealers for a period of
up to 180 days from the Expiration Date and (iv) to provide copies of the
latest version of the Prospectus to broker-dealers upon their request for a
period of up to 180 days after the Expiration Date.
ADDITIONAL INTEREST
In the event the Company fails to file and keep effective a registration
statement in connection with the Exchange Offer or the resale of the Notes, if
necessary, the Company is required to pay, as liquidated damages, Additional
Interest (as defined in the Registration Rights Agreement) to each holder of
Registrable Securities (as
26
<PAGE>
defined below) during the first 90-day period immediately following the
occurrence of such registration default at a rate of .25% per annum on the
Private Notes constituting Registrable Securities held by such holder. Such
Additional Interest rate will increase by an additional .25% per annum at the
beginning of each subsequent 90-day period during which the registration
default continues. Registrable Securities shall mean each Private Note until
(i) a registration statement covering such Private Notes has been declared
effective by the Commission and such Private Notes have been disposed of in
accordance with such effective registration statement, (ii) such Private Notes
are sold in compliance with Rule 144 under the Securities Act or (iii) such
Private Notes cease to be outstanding. The amount of the Additional Interest
will increase at a rate of an additional .25% per annum on Private Notes
constituting Registrable Securities for each subsequent 90-day period until
all registration defaults have been cured, up to a maximum Additional Interest
of 1.0% per annum. Following the cure of all defaults relating to the filing
or effectiveness of registration statements under the Registration Rights
Agreement, the payment of Additional Interest will cease. The filing and
effectiveness of the Registration Statement of which this Prospectus is a part
and the consummation of the Exchange Offer will eliminate all rights of the
holders of Private Notes eligible to participate in the Exchange Offer to
receive damages that would have been payable if such actions had not occurred.
EXCHANGE AGENT
PNC Bank, National Association has been appointed as Exchange Agent of the
Exchange Offer. Questions and requests for assistance, requests for additional
copies of this Prospectus or of the Letter of Transmittal and requests for
Notice of Guaranteed Delivery should be directed to the Exchange Agent
addressed as follows:
By Registered or Certified Mail: By Hand Delivery:
PNC Bank, National Association PNC Bank, National Association
Corporate Trust Department
1600 Market Street, 30th Floor Corporate Trust Department
1600 Market Street, 30th Floor
Philadelphia, PA 19103 Philadelphia, PA 19103
By Overnight Delivery: By Facsimile:
PNC Bank, National Association (215) 585-8872
Corporate Trust Department
1600 Market Street, 30th Floor Confirm by Telephone:
Philadelphia, PA 19103 (215) 585-3848
FEES AND EXPENSES
The expenses of soliciting tenders will be borne by the Company. The
principal solicitation is being made by mail; however, additional solicitation
may be made by telegraph, telephone or in person by officers and regular
employees of the Company and its affiliates.
The Company has not retained any dealer-manager in connection with the
Exchange Offer and will not make any payments to brokers, dealers or others
soliciting acceptances of the Exchange Offer. The Company, however, will pay
the Exchange Agent reasonable and customary fees for its services and will
reimburse it for its reasonable out-of-pocket expenses in connection
therewith.
The cash expenses to be incurred in connection with the Exchange Offer will
be paid by the Company and are estimated in the aggregate to be approximately
$270,000. Such expenses include registration fees, fees and expenses of the
Exchange Agent and the Trustee, accounting and legal fees and printing costs,
among others.
The Company will pay all transfer taxes, if any, applicable to the exchange
of Private Notes pursuant to the Exchange Offer. If, however, a transfer tax
is imposed for any reason other than the exchange of the Private Notes
pursuant to the Exchange Offer, then the amount of any such transfer taxes
(whether imposed on the registered holder or any other persons) will be
payable by the tendering holder. If satisfactory evidence of payment of such
taxes or exemption therefrom is not submitted with the Letter of Transmittal,
the amount of such transfer taxes will be billed directly to such tendering
holder.
27
<PAGE>
CONSEQUENCE OF FAILURES TO EXCHANGE
Participation in the Exchange Offer is voluntary. Holders of the Private
Notes are urged to consult their financial and tax advisors in making their
own decisions on what action to take.
The Private Notes that are not exchanged for the Exchange Notes pursuant to
the Exchange Offer will remain restricted securities. Accordingly, such
Private Notes may be offered, resold, pledged or otherwise transferred only
(1) to a person who the seller reasonably believes is a QIB in a transaction
meeting the requirements of Rule 144A, in a transaction meeting the
requirements of Rule 144 under the Securities Act, outside the United States
to a foreign person in a transaction meeting the requirements of Rule 904
under the Securities Act, or in accordance with another exemption from the
registration requirements of the Securities Act (and based upon an opinion of
counsel if the Company so requests), (2) to the Company or (3) pursuant to an
effective registration statement, and, in each case, in accordance with any
applicable securities laws of any State of the United States or any other
applicable jurisdiction.
ACCOUNTING TREATMENT
For accounting purposes, the Company will recognize no gain or loss as a
result of the Exchange Offer. The expenses of the Exchange Offer will be
amortized over the term of the Exchange Notes.
28
<PAGE>
USE OF PROCEEDS
The Company will not receive proceeds from the Exchange Offer. The net
proceeds to the Company from the Private Offering were approximately $290
million after deducting the Initial Purchasers' discounts and estimated
transaction fees and expenses payable by the Company, of which $127.5 million
was used for the Myrtle Beach Acquisition. The remaining net proceeds raised
by the Company in the Private Offering will be used, together with borrowings
under the Credit Facility, for (i) capital expenditures, including the build-
out of the PCS Network, (ii) the Norfolk Acquisition, (iii) working capital,
(iv) operating losses, (v) general corporate purposes and (vi) potential
acquisitions.
In the event (i) the acquisition of the Norfolk Pops is not consummated by
December 31, 1998 or (ii) the acquisition of the Georgia/North Carolina Pops
is not consummated by December 31, 1998, the Company must prepay its
obligations under the Credit Facility in an amount equal to $75 million, in
each case. The Company's obligations under the Credit Facility accrue
interest, at the Company's option, at (i) an adjusted LIBO rate plus the
Applicable Margin (as defined herein) or (ii) the higher of (a) the
Administrative Agent's prime rate and (b) the Federal Funds Effective Rate (as
defined in the Credit Facility) plus 0.5%, plus the Applicable Margin. See
"Description of Credit Facility." Proceeds from the Credit Facility may be
used to fund capital expenditures related to the construction of the Company's
PCS network, the acquisition of related businesses, working capital needs and
subscriber acquisition costs.
29
<PAGE>
CAPITALIZATION
The following table sets forth the combined capitalization of Triton and its
subsidiaries as of June 30, 1998, and as adjusted, to reflect the Norfolk
Acquisition as if the transaction had been consummated as of June 30, 1998.
The table should be read in conjunction with "Selected Historical and Pro
Forma Consolidated Financial Data" and "Description of Credit Facility."
<TABLE>
<CAPTION>
AS OF AS OF
JUNE 30, 1998 JUNE 30, 1998
ACTUAL AS ADJUSTED
------------- -------------
<S> <C> <C>
In thousands
Long-term debt:
Credit Facility(1)............................. $ 75,000 $ 75,000
Capital lease obligation....................... 108 108
11% Senior Subordinated Discount Notes......... 296,584 296,584
-------- --------
Total long-term debt......................... 371,692 371,692
-------- --------
Shareholder's equity:
Common stock................................... -- --
Additional paid-in-capital(2).................. 181,821 211,821
Accumulated deficit............................ (10,558) (10,558)
-------- --------
Total shareholder's equity................... 171,263 201,263
-------- --------
Total capitalization......................... $542,955 $572,955
======== ========
</TABLE>
- --------
(1) The Credit Facility provides for up to $425 million of term loan and
revolver financing. See "Description of Credit Facility." On August 5,
1998, the Company borrowed an additional $75 million under the Credit
Facility.
(2) Includes non-binding equity commitments related to the Norfolk Acquisition
of $16.5 in cash equity and $13.5 in non-cash equity.
30
<PAGE>
SELECTED HISTORICAL AND PRO FORMA CONSOLIDATED FINANCIAL DATA
On March 6, 1997, Triton Communications L.L.C. ("L.L.C.") was formed to
explore various business opportunities in the wireless telecommunications
industry, principally related to PCS and cellular activities. During the
period from March 6, 1997 through October 1, 1997, L.L.C.'s activities
consisted principally of hiring a management team, raising capital, and
negotiating strategic business relationships, primarily related to PCS
business opportunities. Triton PCS, Inc. (formerly Triton PCS License Company,
Inc., with its subsidiaries referred to as "Triton") was formed on October 2,
1997 as a wholly owned subsidiary of Triton PCS Holdings, Inc. (formerly
Triton PCS, Inc. referred to as "Holdings"). Subsequent to October 2, 1997,
the above activities continued but were conducted primarily through Triton.
Consequently, for purposes of the accompanying financial statements, L.L.C.
has been treated as a "predecessor" entity. The chief executive officer of
L.L.C. is also the chief executive officer of Holdings and Triton. As a result
of this relationship, certain financing relationships and the similar nature
of the business activities conducted by each respective legal entity, L.L.C.
and Triton are considered companies under common control.
The following tables present selected financial data derived from the
combined financial statements of Triton and its predecessor company as of and
for the six month period ended June 30, 1998, the period from March 6, 1997
through June 30, 1997, and from the audited combined financial statements for
the period from inception on March 6, 1997 to December 31, 1997. The table
also presents selected financial data for the Myrtle Beach System as of and
for the six months period ended June 30, 1998 and 1997, and from the audited
financial statements of Vanguard for the year ended December 31, 1997. In
addition, the following table presents unaudited pro forma summary financial
data for Triton as of and for the six month period ended June 30, 1998 and the
year ended December 31, 1997. The pro forma summary statements of operations
data have been adjusted to give pro forma effect to: (i) the initial
borrowings under the Credit Facility, (ii) the Private Offering, and (iii) the
Myrtle Beach Acquisition as if each of such transactions had been consummated
on January 1, 1997. The pro forma summary balance sheet data have been
adjusted to give effect to: (i) certain Equity Investments and the
contribution of such Equity Investments from Holdings to Triton, and (ii) the
Norfolk Acquisition, as if each of such transactions had been consummated on
June 30, 1998.
The unaudited pro forma financial data presented do not purport to represent
what Triton's results of operations and financial condition would have
actually been or what operations of Triton in any future period would be if
the transactions described above had occurred on the dates assumed. The
following information is qualified by reference to and should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and the financial statements and related notes
included elsewhere in this Prospectus.
31
<PAGE>
<TABLE>
<CAPTION>
HISTORICAL TRITON AND PREDECESSOR
FOR THE PERIOD
-----------------------------------------------
MARCH 6, 1997 MARCH 6, 1997 JANUARY 1, 1998
THROUGH THROUGH THROUGH
DECEMBER 31, 1997 JUNE 30, 1997 JUNE 30,1998
----------------- ------------- ---------------
<S> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues...................... $ -- $ -- $ --
Cost and Expenses
Costs of services........... -- -- --
Operations and development.. 873 -- 1,444
Marketing and selling....... -- -- --
General and administrative.. 1,863 523 3,737
Depreciation and
amortization............... 5 -- 1,086
------- ------- --------
Total cost and expenses... 2,741 523 6,267
(Loss) from operations........ (2,741) (523) (6,267)
Interest expense.............. 1,228 -- 9,872
Interest income............... (8) -- (2,739)
------- ------- --------
Loss before taxes............. (3,961) (523) (13,400)
Income tax benefit............ -- -- 6,803
------- ------- --------
Net (loss).................... $(3,961) $ (523) $ (6,597)
======= ======= ========
OTHER DATA:
Deficiency of earnings to
fixed charges................ $(3,961) $(13,617)
======= ========
<CAPTION>
HISTORICAL VANGUARD
-----------------------------------------------
SIX MONTHS
JANUARY 1, 1997 ENDED JUNE 30
THROUGH -----------------------------
DECEMBER 31, 1997 1997 1998
----------------- ------------- ---------------
<S> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues...................... $23,608 $11,059 $ 14,538
Cost and Expenses
Costs of services........... 5,306 2,164 2,755
Operations and development.. -- -- --
Marketing and selling....... 3,944 1,664 2,215
General and administrative.. 8,275 3,610 4,486
Depreciation and
amortization............... 5,162 2,023 3,080
------- ------- --------
Total cost and expenses... 22,687 9,461 12,536
Income from operations........ 921 1,598 2,002
Interest expense.............. 6,451 3,072 3,560
Other expense, net............ -- 334 6
------- ------- --------
Loss before taxes............. (5,530) (1,808) (1,564)
Income tax benefit............ 6,892 -- 598
------- ------- --------
Net income (loss)............. $ 1,362 $(1,808) $ (966)
======= ======= ========
</TABLE>
32
<PAGE>
<TABLE>
<CAPTION>
PRO FORMA DATA
------------------------------
JANUARY 1, 1997 SIX MONTHS
THROUGH ENDED
DECEMBER 31, 1997 JUNE 30,1998
----------------- ------------
<S> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues........................................ $ 23,608 $ 14,538
Cost and Expenses
Costs of services............................. 5,306 2,755
Operations and development.................... 874 1,444
Marketing and selling......................... 3,944 2,215
General and administrative.................... 10,137 8,223
Depreciation and amortization(1).............. 9,938 6,055
-------- ---------
Total cost and expenses..................... 30,199 20,692
(Loss) from operations.......................... (6,591) (6,154)
Interest expense(2)............................. 40,745 19,060
Interest income................................. -- --
-------- ---------
Loss before taxes............................... (47,336) (25,214)
Income tax benefit.............................. -- 10,698
-------- ---------
Net (loss)...................................... $(47,336) $ (14,516)
======== =========
OTHER DATA:
Deficiency of earnings to fixed charges(3)...... $(47,336) $ (25,431)
======== =========
</TABLE>
<TABLE>
<CAPTION>
HISTORICAL TRITON AND
PREDECESSOR AS OF
-------------------------------
DECEMBER 31 1997 JUNE 30, 1998
----------------- -------------
<S> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents....................... $11,362 $ 261,509
Working Capital................................. (5,683) 257,736
Total assets.................................... 13,253 566,445
Long-term debt.................................. -- 371,692
Shareholder's Equity (deficit).................. $(3,961) $ 171,263
======= =========
<CAPTION>
HISTORICAL
VANGUARD AS OF
-----------------
DECEMBER 31, 1997
-----------------
<S> <C> <C>
BALANCE SHEET DATA SHEET (4):
Cash and cash equivalents....................... $ 121
Working Capital................................. (51,709)
Total assets.................................... 53,931
Long-term debt.................................. --
Shareholder's deficit........................... (11,145)
=======
</TABLE>
33
<PAGE>
<TABLE>
<CAPTION>
PRO FORMA
-------------
AS OF
-------------
JUNE 30, 1998
-------------
<S> <C>
BALANCE SHEET DATA:
Cash and cash equivalents......................................... $185,509
Working Capital................................................... 181,736
Total assets...................................................... 596,445
Long-term debt.................................................... 371,692
Shareholders equity............................................... $201,263
========
</TABLE>
- --------
(1) Pro forma depreciation and amortization expense has been adjusted to
reflect the recording of the purchased fixed assets and the resultant
depreciation and amortization expenses for the Myrtle Beach Acquisition.
(2) Pro forma interest expense includes (i) interest on the Notes in the
Private Offering at a rate of 11.00% per annum and (ii) interest on $75
million of initial borrowings under the Credit Agreement at a rate of
8.70%.
(3) For the period indicated, earnings were inadequate to cover fixed charges.
For purposes of determining the deficiency of earnings to fixed charges,
loss is defined as losses from continuing operations, plus capitalized
interest costs.
(4) In June 1998, Vanguard Cellular Systems, Inc., the parent company of
Vanguard, transferred certain assets to Vanguard from an affiliated
entity. Such assets were not acquired by Triton. Accordingly, all
historical information presented reflects the operations and financial
position of the Myrtle Beach System of Vanguard and does not include the
transferred assets or the results of operations related to the transferred
assets.
34
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
FORWARD-LOOKING STATEMENTS
When used in this Form S-4 and in future filings by the Company with the
Securities and Exchange Commission ("SEC"), in the Company's press releases
and in oral statements made with the approval of an authorized executive
officer of the Company, the words or phrases "will likely result," "management
expects" or "the Company expects," "will continue," "is anticipated,"
"estimated" or similar expressions (including confirmations by an authorized
executive officer of the Company or any such expressions made by a third party
with respect to the Company) are intended to identify "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Readers are cautioned not to place undue reliance on any such
forward-looking statements, each of which speak only as of the date made. Such
statements are subject to certain risks and uncertainties that could cause
actual results to differ materially from historical earnings and those
presently anticipated or projected. The Company has no obligation to release
publicly the result of any revisions, which may be made to any forward-looking
statements to reflect anticipated or unanticipated events or circumstances
occurring after the date of such statements.
GENERAL
The following discussion and analysis is based upon the combined financial
statements of the Company and its predecessor, Triton Communications L.L.C.
("L.L.C.") for the periods presented herein, and should be read in conjunction
with the combined financial statements and the notes thereto contained
elsewhere in this prospectus.
On March 6, 1997, L.L.C. was formed to explore various business
opportunities in the wireless telecommunications industry, principally related
to PCS and cellular activities. During the period from March 6, 1997 through
October 1, 1997, L.L.C.'s activities consisted principally of hiring a
management team, raising capital, and negotiating strategic business
relationships, primarily related to PCS business opportunities. Triton PCS,
Inc. (formerly Triton PCS License Company, Inc., with its subsidiaries
referred to as "Triton") was formed on October 2, 1997 as a wholly owned
subsidiary of Triton PCS Holdings, Inc. (formerly Triton PCS, Inc. referred to
as "Holdings"). Subsequent to October 2, 1997, the above activities continued
but were conducted primarily through Triton. Consequently, for purposes of the
accompanying financial statements, L.L.C. has been treated as a "predecessor"
entity. The chief executive officer of L.L.C. is also the chief executive
officer of Holdings and Triton. As a result of this relationship, certain
financing relationships and the similar nature of the business activities
conducted by each respective legal entity, L.L.C. and Triton are considered
companies under common control.
OVERVIEW
The Company intends to become a leading provider of wireless broadband PCS
in the southeastern United States. The Company was established by Michael
Kalogris, Steven Skinner and other former executives of Horizon Cellular
Group, along with various private equity investors, with the intent to develop
and operate a leading PCS network in the Southeast. In October 1997, the
Company entered into a joint venture agreement with AT&T PCS, a wholly-owned
subsidiary of AT&T Corp., whereby the Company will be the exclusive provider
of wireless mobility services under the AT&T consumer brand name in a
contiguous area covering approximately 11 million Pops (population
equivalents) in the southeastern United States. AT&T PCS contributed the PCS
Licenses to the Company covering the Licensed Area in exchange for an equity
interest in Holdings. Additionally, the Company is a party to agreements with
AT&T that, among other things, allow the Company to benefit from AT&T's
nationwide wireless footprint and promotional and marketing efforts and
provide the Company with favorable roaming and long distance rates for
services on AT&T's wireless and long distance networks. The PCS Licenses
authorize the Company to provide PCS services to such major population and
business centers as Charleston, SC, Columbia, SC, Greenville/Spartanburg, SC,
Richmond, VA and Augusta, GA, as well as major resort destination such as
Myrtle Beach, SC, Hilton Head, SC and Kiawah Island, SC. The Company expects
to commence commercial operations by the end of the first quarter of 1999 or
shortly thereafter in the Initial Configuration.
35
<PAGE>
On June 30, 1998, the Company acquired an existing cellular system (the
"Myrtle Beach System"), which serves Myrtle Beach, SC and the surrounding area
(the "Myrtle Beach Acquisition"), from Vanguard Cellular Systems of South
Carolina, Inc. for a purchase price of approximately $162.5 million. The
Company believes it will seamlessly integrate the Myrtle Beach System, which
uses digital TDMA/IS-136 cellular technology, into its planned PCS network as
part of the Initial Configuration. Since the Myrtle Beach System is within the
Licensed Area, it will operate under the AT&T Agreements. The Company expects
that the Myrtle Beach Acquisition will (i) provide the Company with a system
that currently generates positive cash flow, (ii) accelerate the ability of
the Company to capture roaming traffic generated by Myrtle Beach's highly
transitory population, (iii) accelerate the Company's time-to-market in South
Carolina and (iv) render a PCS build-out in the Myrtle Beach region
unnecessary.
The Company has signed a purchase agreement to acquire from AT&T PCS, Inc.
(the "Norfolk Acquisition") (i) an FCC license to use 20MHz of authorized
frequencies to provide broadband PCS services throughout the entirety of the
Norfolk, Virginia BTA and (ii) certain assets of AT&T PCS used in the
operation of the PCS system in such BTA for an aggregate purchase price of
$105 million, including $13.5 million of Series D Preferred Stock to be issued
to AT&T PCS. The build-out of the network relating to the Norfolk Acquisition,
including the installation of a switch, has been substantially completed. The
Norfolk Acquisition is subject to closing conditions typical in acquisitions
of this nature. There can be no assurance that the Norfolk Acquisition will be
consummated on the terms described herein or at all.
The Company has entered into a non-binding letter of intent with AT&T, dated
as of March 24, 1998, to acquire an additional 1.9 million net incremental
Pops (2.4 million additional Pops less 0.5 million Pops located in the
Hagerstown, MD and Cumberland, MD BTAs that Triton will return to AT&T),
located primarily in Georgia and North Carolina (the "Georgia/North Carolina
Pops"), all of which are contiguous to the Licensed Area. The aggregate
consideration for the additional 1.9 million Pops is approximately $32
million, all of which is expected to be represented by additional non-cash
equity interests in the Company issued to AT&T. The Georgia/North Carolina
Pops have not yet been built, but the Company expects they will be subject to
a build-out plan similar to that developed for the Licensed Area. This
potential acquisition is subject to conditions typical in acquisitions of this
nature, certain of which, including FCC consent, may be beyond the Company's
control. There can be no assurance, therefore, that this acquisition will be
consummated on the terms described herein or at all.
To date, the Company has incurred expenditures in connection with the
establishment of its business, raising capital, the initial design and
construction of its PCS network, and engineering, marketing, administrative
and other start-up related expenses. The Company expects to launch commercial
operations in the Initial Configuration by the end of the first quarter of
1999 or shortly thereafter. Upon completion of the Initial Configuration, the
Company intends to target the remaining cities, connecting highway corridors
and counties along the interstates with population densities of 50 or more per
square mile. The Company expects to extend its coverage to approximately 85%
of the Pops in the Licensed Area by the end of the fourth quarter of 2001,
which the Company believes will generally provide greater coverage than
current cellular operators in such markets. The extent to which the Company is
able to generate operating revenues and earnings is dependent on a number of
business factors, including construction of the network at or below its
estimated costs, successfully deploying the PCS network and attaining
profitable levels of market demand for the Company's products and services.
RESULTS OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1998 COMPARED TO THE PERIOD FROM MARCH 6,
1997 (INCEPTION) TO JUNE 30, 1997
Operations and Development
Operations and development costs for the period were $1.4 million. These
expenses represent costs associated with the operations of the Company's
regional offices, and consisting principally of salaries and employee-related
expenses and facility costs.
36
<PAGE>
General and Administrative Expenses
General and administrative costs for the period increased $3.2 million to
$3.7 million in the six months ended June 30, 1998 as compared to the period
from March 6, 1997 to June 30, 1997, primarily due to the increase in
personnel related to the establishment of the Company's organizational
structure. During the six months ended June 30, 1998, depreciation and
amortization expenses was $1.1 million, primarily due to the amortization of
intangible assets associated with certain agreements contributed to the
Company as part of the AT&T Transaction.
Interest Expense
For the six months ended June 30, 1998, interest expense, including interest
related to the preferred return on the convertible notes of $0.4 million, was
$9.9 million, net of capitalized interest of $0.2 million. The Company had
borrowings of $371.7 million as of June 30, 1998, with a weighted average
interest rate of 10.54%.
Tax Benefit
For the six months ended June 30, 1998, the Company recorded a tax benefit
of $6.8 million related to operating losses for the current and prior year. No
valuation allowance was considered necessary for this deferred tax asset,
principally due to the existence of a significant deferred tax liability which
was recorded upon the closing of the AT&T transaction in February of 1998.
Net Loss
Net loss increased $6.1 million to $6.6 million in the six months ended June
30, 1998 as compared to the prior period in 1997. The loss resulted primarily
from the items discussed above.
FROM MARCH 6, 1997 (INCEPTION) TO DECEMBER 31, 1997
Operations and Development
Operations and development costs for the period were $0.9 million. These
expenses represent costs associated with the operations in the Company's
regions and consist principally of salaries and employee-related expenses and
facility costs.
General and Administrative Expenses
General and Administrative costs were $1.9 million. This includes costs
associated with salary, benefits and expenses of administrative personnel of
$1.2 million and costs associated with professional and legal fees associated
with the market research and formation of the Company of $0.2 million. There
was nominal depreciation expense during the period.
Financing Costs
Financing costs consist of interest related to the preferred return on the
convertible notes of $1.2 million.
Net loss
Net loss for the period was $4.0 million due primarily to the items
discussed above.
LIQUIDITY AND CAPITAL RESOURCES
Net Cash Used in Operating Activities
Net cash used in operating activities for the six months ended June 30, 1998
was $0.2 million, a decrease of $0.2 million over the period from March 6,
1997 to June 30, 1997. The decrease is due primarily to changes in accrued
interest of $4.0 million and accounts payable and accrued expenses of $2.4
million offset with an adjustment to net income for a benefit from deferred
income taxes of $6.8 million.
37
<PAGE>
Net Cash Used in Investing Activities
Net cash used in investing activities for the six months ended June 30, 1998
was $172.2 million, an increase of $172.2 million over the period from March
6, 1997 to June 30, 1997. This increase was primarily due to capital
expenditures related to the initial network build-out, the establishment of
administrative operations and payment of approximately $162.5 million
attributable to the Myrtle Beach Acquisition completed on June 30, 1998.
Net Cash Provided By Financing Activities
Net cash provided by financing activities for the six months ended June 30,
1998 was $422.6 million, an increase of $422.0 million over the period from
March 6, 1997 to June 30, 1997. During the period, the Company had proceeds
from borrowings under the Bank Credit Facility of $75 million. The Company had
net proceeds from the Private Offering of $290 million, net of an initial
purchasers discount of $9 million and fees and expenses of $1 million. In
addition, the Company received capital contributions of $68 million from
Holdings related to funding of capital commitments by the initial cash equity
investors and receipt of additional capital commitments related to the Myrtle
Beach Acquisition.
Liquidity
The build-out of the Company's PCS network and the marketing of the
Company's PCS services will require substantial capital. As it completes its
build-out, the Company will be highly leveraged. The Company currently
estimates that its capital requirements (including capital expenditures,
working capital, debt service requirements and anticipated operating losses)
for the period from inception through year-end 2001 (including the territory
covered by the Myrtle Beach Acquisition and assuming substantial completion of
the Company's network build-out to cover 85% of the Pops in the Licensed Area
by such time and consummation of the Norfolk Acquisition) will total
approximately $993 million. Actual amounts of the funds required may vary
materially from these estimates.
The Company is engaged in a substantial construction project. The Company
expects to spend $167 million on the build-out of its initial coverage area in
1998. The build-out will include the installation of two switches and the
lease or acquisition of approximately 500 cell sites, as well as spectrum
clearing costs, retail store fitout, developing a NOC and administrative
systems. The Company estimates that it will spend $128 million in 1999 for
cell site acquisition and construction costs as it continues to build-out to
85% coverage. Other capital expenditures budgeted for 1999 include an
aggregate of $19 million to be spent on administrative systems, spectrum
clearing and switch software. The preceding capital forecasts exclude internal
engineering and capitalized interest costs.
At various dates in 1997, certain private equity investors provided $1.6
million in financing to L.L.C. in the form of convertible promissory notes.
The notes originally bore interest at 14% annually, payable at maturity. On
January 15, 1998, L.L.C. assigned the notes to the Company. Triton, in
conjunction with Holdings and the noteholders, subsequently negotiated a
revised arrangement under which no interest would be paid on the notes which
became convertible into approximately $3.2 million worth of Holdings' Series C
Preferred Stock. The conversion of the L.L.C. notes into Holdings equity
occurred on February 4, 1998. The $1.6 million preferred return to the
investors has been accounted for as a financing cost during the period the
notes were outstanding. Accordingly, the Company has accrued $1.2 million in
financing costs on the notes as of December 31, 1997. The remaining $0.4
million financing costs were recognized in the first quarter of calendar 1998.
The Company currently has no sources of revenue to meet its capital
requirements other than through its operation of the Myrtle Beach System;
therefore the Company's revenues will remain insufficient to meet its capital
requirements. The Cash Equity Investors and the Management Stockholders have
severally made initial irrevocable commitments to contribute $140 million in
cash to the Company through January 2001 in exchange for 1.4 million shares of
Series C Preferred Stock. To date, the Cash Equity Investors, along with the
Management Stockholders, have contributed an aggregate of $45 million of the
$140 million. The Cash Equity Investors, along with Management Stockholders,
will contribute an additional $35 million on each of the first
38
<PAGE>
and second anniversaries of the Securities Purchase Closing Date (as defined
herein), and $25 million on the third anniversary of the Securities Purchase
Closing Date. In addition, the Company has received an additional equity
contribution of $35 million for the Myrtle Beach Acquisition from the Cash
Equity Investors on terms substantially similar to those set forth in the
Securities Purchase Agreement.
Holdings has received additional non-binding equity commitments of $16.5
million from certain of the Cash Equity Investors in order to fund a portion
of the $105 million purchase price for the Norfolk Acquisition. In
consideration therefor, at the closing of such acquisition, Holdings expects
to issue to such Cash Equity Investors an additional $16.5 million of
Holdings' Series C Preferred Stock, which is intended to be contributed to the
Company. At such closing, Holdings is also expected to issue to AT&T PCS an
additional $13.5 million of Holdings' Series D Preferred Stock. The balance of
the purchase price is expected to be financed through use of $75 million from
the net proceeds of the Private Offering.
Holdings has also received non-binding commitments from the Cash Equity
Investors for an additional $25 million equity contributions relating to the
potential acquisition of additional PCS licenses covering sections of Georgia
and North Carolina. The Company expects to use the additional equity
contributions in the build-out of the areas covered by such additional PCS
licenses. These commitments are contingent on the execution of definitive
documentation with respect to, and the consummation of, such potential
acquisition.
On February 3, 1998, the Credit Facility Effective Date, the Company entered
into the Credit Facility. The Credit Facility provides for (i) a $175 million,
eight and one-half year Tranche A Term Loan, (ii) a $150 million, nine and
one-quarter year Tranche B Term Loan and (iii) a $100 million, eight and one-
half year Revolving Credit Facility. The commitment to make Revolving Credit
Loans is reduced automatically beginning on the date that is six years and six
months after the Credit Facility Effective Date and the Term Loans must be
repaid beginning on the date that is four years after the Credit Facility
Effective Date. In addition, the Credit Facility requires the Company to make
mandatory prepayments of outstanding borrowings under the Credit Facility
commencing with the fiscal year ending December 31, 2001 based on a percentage
of excess cash flow, and contains customary financial and other convenants. To
date, $150 million of the Tranche B Term Loans have been drawn by the Company,
which are expected to fund the Company's future operations. Borrowings under
the facilities are secured by a first priority pledge of all assets of the
Company, including the capital stock of the Company and its subsidiaries that
hold the PCS Licenses. See "Description of Credit Facility."
On May 4, 1998 the Company issued $511,989,000 11% Senior Subordinated
Discount Notes due 2008 (the "Notes"). The Private Offering provided
approximately $290 million of net proceeds to the Company. Of these proceeds,
$127.5 million was used for the Myrtle Beach Acquisition, and it is
anticipated that $75 million will be used for the Norfolk Acquisition. The
remaining proceeds will be used primarily for the acquisition and construction
of wireless communications towers, and for general corporate purposes
including working capital. Prior to May 1, 2003, interest expense on the Notes
will consist solely of non-cash accretion of original issue discount and the
Notes will not require cash interest payments. After such time, the Notes will
have accreted to $511,989,000 and will require annual cash interest payments
of approximately $56.3 million. In addition, the Notes mature on May 1, 2008.
NEW ACCOUNTING PRONOUNCEMENTS
The Company adopted Statement of Financial Accounting Standard No. 130,
"Reporting Comprehensive Income" (SFAS 130), which was effective for fiscal
year beginning after December 15, 1997. SFAS 130 established standards for
reporting and display of comprehensive income and its components in a full set
of general-purpose financial statements. Comprehensive income is the change in
equity of a business enterprise during a period from transactions and the
events and circumstances from non-owner sources. For the periods presented in
the accompanying statements of operations, comprehensive income equals the
amounts reported on the accompanying statement of operations.
In February 1997, the FASB issued Statement No. 129, "Disclosure of
Information about Capital Structure" ("SFAS 129"). This statement establishes
standards for disclosing information about an entity's capital structure and
is effective for periods ending after December 15, 1997. The Company has
adopted SFAS
39
<PAGE>
129. The effect of initial application of this statement did not have a
material effect on the Company's financial statements.
In June 1997, the FASB issued Statement No. 131, "Disclosures About Segments
of an Enterprise and Related Information" ("SFAS 131"). This statement
establishes additional standards for segment reporting in the financial
statements and is effective for fiscal years beginning after December 15,
1997. The Company has adopted SFAS 131. The effect of initial application of
the statement did not have a material effect on the Company's financial
statements.
In February 1998, the FASB issued Statement No. 132, "Employers' Disclosures
about Pensions and Other Postretirement Benefits" ("SFAS 132"). This statement
is effective for fiscal years beginning after December 15, 1997. It is not
expected that application of this statement will have a material effect on the
Company's financial statements.
In, April 1998, the Accounting Standards Executive Committee (AcSEC) of the
AICPA issued Statement of Position (SOP) 98-5, Reporting on the Costs of
Start-up Activities ("SOP 98-5"). This statement requires that the costs of
start-up activities, including organization costs, be expensed as incurred and
is effective for fiscal years beginning after December 31, 1998. The Company
has elected early adoption of this statement beginning in fiscal year ending
December 31, 1998. The effect of initial application of the statement did not
have a material effect on the Company's financial statements.
In June 1998, the FASB issued Statement No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS 133"). This statement is effective
for all fiscal quarters of all fiscal years beginning after June 15, 1999. The
Company has not yet fully analyzed the impact of this statement on its
financial statements.
YEAR 2000
The Year 2000 Issue is the result of computer programs being written using
two digits rather than four to define the applicable year. This issue will
impact not only Information Technology ("IT"), but Non-IT systems as well,
given Non-IT systems typically include embedded technology such as
microcontrollers. If date sensitive software recognize the year "00" as the
year 1900 rather than the Year 2000, the potential exists for computer system
failure or miscalculations, which could cause disruption of operations.
Given that the Company is in the development stage, and is currently in the
process of selecting and implementing its operational and financial systems,
the Company believes that it has adequately considered Year 2000 compliance in
its selection of IT systems. In addition, given the nature of the Company's
operations, potential non-compliance of Non-IT systems are not expected to
have a significant impact on the Company. However, there can be no assurance
that non-compliance of Non-IT systems will not have a material adverse effect
on the Company or its operations.
The Company has initiated communications with all of its significant
software suppliers and service bureaus to determine their plans for
remediating the Year 2000 Issue in their software which the Company uses or
relies upon. The Company's estimate to complete the remediation plan includes
the estimated time associated with mitigating the Year 2000 Issue for third
party software. However, there can be no guarantee that the systems of other
companies on which the Company relies will be converted on a timely basis, or
that a failure to convert by another company would not have material adverse
effect on the Company.
A thorough assessment of the Year 2000 Issue relative to the Myrtle Beach
Acquisition will be performed. The Company intends to migrate the Myrtle Beach
operational and financial systems to the systems currently being implemented
for the Company and expects to complete this migration by December 31, 1998.
There can be no assurance that this migration will be successful. The failure
to successfully migrate the Myrtle Beach operational and financial systems
into the Company's systems could have a material adverse effect on the
Company.
40
<PAGE>
The costs and risks associated with the Year 2000 Issue are not expected to
have a significant impact on the Company.
INFLATION
The Company does not believe that inflation has had a material impact on the
Company's operations. However, there can be no assurance that a high rate of
inflation in the future will not have a material adverse effect on the
Company's operating results.
BUSINESS
THE COMPANY
The Company intends to become a leading provider of wireless broadband PCS
in the southeastern United States. Triton was established by Michael Kalogris,
Steven Skinner and other former executives of Horizon, along with various
equity investors, with the intent to develop and operate a leading PCS network
in the Southeast. In October 1997, the Company entered into a joint venture
agreement with AT&T PCS, a wholly-owned subsidiary of AT&T Corp., whereby the
Company will be the exclusive provider of wireless mobility services under the
AT&T consumer brand name in a contiguous area covering approximately 11
million Pops in the southeastern United States. AT&T PCS contributed the PCS
Licenses to Triton covering the Licensed Area in exchange for an equity
interest in the Company. Additionally, the Company is a party to agreements
with AT&T that, among other things, allow the Company to benefit from AT&T's
nationwide wireless footprint and promotional and marketing efforts and
provide the Company with favorable roaming and long distance rates for
services on AT&T's wireless and long distance networks. See "Certain
Relationships and Related Transactions--The AT&T Agreements." The PCS Licenses
authorize the Company to provide PCS services to such major population and
business centers as Charleston, SC, Columbia, SC, Greenville/Spartanburg, SC,
Richmond, VA and Augusta, GA, as well as major destination resorts such as
Myrtle Beach, SC, Hilton Head, SC and Kiawah Island, SC. The Company expects
to commence commercial operations by the end of the first quarter of 1999 or
shortly thereafter in the Initial Configuration.
The Company believes the Licensed Area has outstanding demographic
characteristics, including strong population growth and favorable population
density and traffic patterns. According to Kagan, from 1995 to 2000,
population growth in the Company's markets is expected to be nearly double the
national average. Additionally, the population density in the Company's
markets is 57% above the national average, and traffic density in the
Company's markets (measured by daily car miles per interstate highway miles)
is 7% above the national average. See "--Summary Market Data." The Company
believes that its Licensed Area, together with AT&T's recently launched
wireless systems located in the adjacent cities of Washington, D.C.,
Charlotte, NC and, Atlanta, GA, creates a large, contiguous area which
provides numerous cost and other synergistic benefits.
The Company intends to offer customers affordable, reliable, high-quality
mobile telecommunications services. Specific service offerings will include
single number service and advanced features such as call screening and caller
ID. As the market for wireless telecommunications services and the Company's
technological capabilities continue to develop, the Company expects to offer
additional wireless applications such as high-speed data transmission to and
from computers, "wireless office," advanced paging, facsimile and Internet
access services.
The Company has chosen to build its PCS network using TDMA/IS-136 which is
the technology utilized by AT&T's nationwide wireless network, thus allowing
the Company's network to be compatible with AT&T's and other TDMA/IS-136
networks immediately upon launch of operations. TDMA/IS-136, among other
things, allows service providers to offer enhanced integrated services not
currently offered by traditional analog cellular providers, including
integrated voicemail, custom-calling and short-messaging. Currently three of
the top four wireless telecommunications companies in the U.S., based on
current customers, utilize TDMA/IS-136 technology. See "--TDMA Digital
Technology."
41
<PAGE>
The Company has acquired the Myrtle Beach System, which serves Myrtle Beach,
SC and the surrounding area, from Vanguard for a purchase price of
approximately $162.5 million. The Company believes it will seamlessly
integrate the Myrtle Beach System, which uses digital TDMA/IS-136 cellular
technology, into its planned PCS network as part of the Initial Configuration.
Since the Myrtle Beach System is within the Licensed Area, it will operate
under the AT&T Agreements. The Company expects that the Myrtle Beach
Acquisition will (i) provide the Company with a system that currently
generates positive cash flow, (ii) accelerate the ability of the Company to
capture roaming traffic generated by Myrtle Beach's highly transitory
population, (iii) accelerate the Company's time-to-market in South Carolina
and (iv) render a PCS build-out in the Myrtle Beach region unnecessary.
The Company has signed a purchase agreement to acquire from AT&T PCS, Inc.
(the "Norfolk Acquisition") (i) an FCC license to use 20 MHz of authorized
frequencies to provide broadband PCS services throughout the entirety of the
Norfolk, Virginia BTA and (ii) certain assets of AT&T PCS used in the
operation of the PCS system in such BTA for an aggregate purchase price of
$105 million. The build-out of the network relating to the Norfolk
Acquisition, including the installation of a switch, has been substantially
completed. The Norfolk Acquisition is subject to closing conditions typical in
acquisitions of this nature. There can be no assurance that the Norfolk
Acquisition will be consummated on the terms described herein or at all.
In addition to the contribution by AT&T PCS of the PCS Licenses, the Company
has raised $140 million of irrevocable equity commitments payable over a
three-year period, $45 million of which has been received by the Company to
date, from, or from entities managed by, Chase Capital Partners, J.P. Morgan
Investment Corporation, Desai Capital Management Incorporated, Toronto
Dominion Capital (USA), Inc., First Union Capital Partners, Inc. and Duff
Ackerman Goodrich & Assoc., L.P. and certain management stockholders. See
"Certain Relationships and Related Transactions--The Securities Purchase
Agreement." The Company has received additional equity contributions of $35
million from certain of the Cash Equity Investors in connection with the
Myrtle Beach Acquisition. Additionally, the Company has also received
additional non-binding equity commitments of approximately $16.5 million from
certain Cash Equity Investors in connection with the Norfolk Acquisition. In
addition, the Private Offering, consummated on May 4, 1998, provided
approximately $290 million of net proceeds to the Company. The net proceeds
from the Private Offering, in conjunction with the Equity Investments and
borrowings under the Credit Facility, are expected to be sufficient to
complete the planned build-out of the Company's PCS network. See "Prospectus
Summary--Network Build-Out and Financing Plan."
STRATEGIC ALLIANCE WITH AT&T
AT&T holds FCC licenses to provide wireless telecommunications service in
areas covering more than 80% of the U.S. population. In order to effectively
and rapidly construct its PCS markets and commence offering wireless services,
AT&T has focused on building out selected cities within its coverage area,
while entering into agreements with certain independent wireless operators,
such as the Company, to build out and operate the remainder of its PCS
markets. AT&T contributed the PCS Licenses, covering 20 MHz of spectrum in the
Licensed Area, in exchange for an equity interest in the Company and certain
other rights including preemptive rights and the right to appoint one board
member. AT&T has retained 10 MHz of spectrum in the Licensed Area for use as a
non-mobile wireless provider. The terms of the joint venture between the
Company and AT&T including those governing the 10 MHz of spectrum retained by
AT&T, are set forth in the AT&T Agreements described below. See "Certain
Relationships and Related Transactions--The AT&T Agreements."
The Company believes its alliance with AT&T will enable the Company to
benefit from AT&T's brand name recognition and marketing efforts and provides
numerous other strategic advantages, including the following:
LICENSE RIGHTS. The Company will market its PCS services as "Member, AT&T
Wireless Services Network" and will use the globally recognized AT&T logo.
COMPANY EXCLUSIVITY. The Company will be AT&T's exclusive provider of
wireless mobility services for people residing within the Licensed Area.
42
<PAGE>
AT&T EXCLUSIVITY. The Company will use AT&T as its provider of
telecommunications services, other than wireless mobility, for its
ancillary or bundled services, including long distance and, where
applicable, local service to the Company.
ROAMING. AT&T's and the Company's customers who own dual-band/dual-mode
phones will roam on each other's mobile wireless systems. The Company will
be the preferred provider of mobile wireless telecommunications for AT&T's
wireless customers that roam in the Licensed Area.
PRODUCTS AND SERVICES. The Company has benefited and expects to continue
to benefit from AT&T related discounts on such products and services as
handsets, infrastructure equipment and billing services. For example, the
Company has entered into an agreement with Ericsson to supply mobile
telephone equipment, software and services at the discounted prices set for
AT&T affiliates.
RESALE BY AT&T. The Company's network will be utilized by AT&T to provide
the Company's service to accounts that reside in the Licensed Area. See
"Certain Relationships and Related Transactions--The Stockholders'
Agreement--Exclusivity."
BUSINESS STRATEGY
The Company intends to become a leading provider of wireless broadband
communications services in its markets. To achieve its objective, the Company
will pursue the following business strategies:
LEVERAGE RELATIONSHIP WITH AT&T. The Company intends to capitalize on the
marketing opportunities derived from its relationship with AT&T, including
(i) co-branding with the AT&T logo, (ii) nationwide coverage, (iii) an
expansive home calling area and (iv) bundling of AT&T telecommunications
products and service offerings. The Company believes its affiliation with
AT&T will also yield the following benefits: (i) favorable vendor
contracts, (ii) long-term roaming arrangements with prescribed pricing,
including preferred carrier status for AT&T-affiliated roaming traffic, and
(iii) availability of AT&T's NOCs and customer service centers.
EXECUTE INTEGRATED MARKETING PLAN. The Company intends to adopt a
marketing approach that leverages AT&T's nationwide presence and brand
name. The Company expects to capitalize on its regional focus and its
ability, as a small, entrepreneurial company, to respond quickly and
creatively to changing customer needs. In all of its marketing efforts, the
Company intends to emphasize the improved quality, enhanced features and
favorable pricing of its PCS system. Its marketing strategy has been
designed to increase overall wireless communications penetration with an
emphasis on mass marketing concepts designed to appeal to a broad
demographic base.
CAPITALIZE ON EXTENSIVE TERRITORIAL REACH. The Licensed Area covers a
significant percentage of the population of Virginia, virtually all of
South Carolina, the Augusta region of northeast Georgia and large sections
of the eastern and western portions of North Carolina. The Company believes
that it will have an advantage over its competitors, which have less
extensive and/or non-contiguous coverage by offering regional and state-
wide PCS services using 100% of its own network facilities. Thus, the
Company will not need to use a third party long-distance carrier, and will
therefore be able to complete almost any call, within its region, without
incurring roaming charges. The Company believes it can optimally design its
network to minimize its interconnect expenses and reduce infrastructure
costs. In addition, the Company expects to operate its entire system
utilizing only two regional offices, thereby reducing its general and
administrative expenses.
PROVIDE SUPERIOR CUSTOMER SERVICE. The Company's strategy is predicated
on building strong, enduring relationships with customers. The Company is
developing an organization in which each employee views his or her function
in terms of their impact on the customer. In support of this strategy, the
Company is currently developing a compensation plan tied to the attainment
of customer quotas and customer retention rates. Furthermore, the Company
intends to effectively manage its customer relationships through the use of
sophisticated information systems that best meet the evolving needs of
individual customers.
DEPLOY STATE-OF-THE-ART TECHNOLOGY. The Company's choice of TDMA
technology utilizing the IS-136 platform provide the Company with the
opportunity to capitalize on certain advantages, such as higher
43
<PAGE>
voice quality, greater security and enhance features, relative to analog
cellular service providers. This technology also provides for more powerful
error correction, less susceptibility to fading and reduced interference
(which results in fewer dropped calls) and increased customer capacity
relative to a typical analog system. In addition, the TDMA dual-band/dual-
mode handsets provide operating capability in both digital mode at 1900 MHz
and 800 MHz and analog mode at 800 MHz, thereby increasing the customer's
roaming capabilities. Furthermore, TDMA utilizes a hierarchical cell
structure that allows for cost-effective capacity enhancement and greater
customization of calling plans. See "--TDMA Digital Technology." The
deployment of this technology involves risk. See "Risk Factors--Technology
Risks."
EXECUTE HIGH QUALITY BUILD-OUT PLAN. The Company plans to construct a
state-of-the-art, high quality network. The Company's RF design has a high
density of cell sites which, together with the use of digital technology,
will allow the Company's system to handle higher traffic demand than
cellular operators, thereby allowing the Company to offer lower per-minute
rates. The Company's network design will also allow extensive use of micro-
and mini-cell sites to service expensive, difficult to reach locations and
coverage gaps within the Company's wireless network. See "Prospectus
Summary--Network Build-Out and Financing Plan."
POTENTIAL ACQUISITION
The Company has entered into a non-binding letter of intent with AT&T, dated
as of March 24, 1998, to acquire an additional 1.9 million net incremental
Pops (2.4 million additional Pops less 0.5 million Pops located in the
Hagerstown, MD and Cumberland, MD BTAs that Triton will return to AT&T),
located primarily in Georgia and North Carolina, all of which are contiguous
to the Licensed Area. The aggregate consideration for the additional 1.9
million Pops is approximately $32 million, all of which is expected to be
represented by additional non-cash equity interests in the Company issued to
AT&T. The Georgia/North Carolina Pops have not yet been built, but the Company
expects they will be subject to a build-out plan similar to that developed for
the Licensed Area. This potential acquisition is subject to conditions typical
in acquisitions of this nature, certain of which, including FCC consent, may
be beyond the Company's control. There can be no assurance, therefore, that
this acquisition will be consummated on the terms described herein or at all.
See "Risk Factors--Risks Related to Potential Acquisition."
44
<PAGE>
SUMMARY MARKET DATA
The Company believes the contiguous markets covered by the PCS Licenses are
in an area with attractive demographic characteristics, including strong
population growth, high population and local interstate traffic density.
<TABLE>
<CAPTION>
% GROWTH POPULATION LOCAL INTERSTATE
LICENSED AREAS(1) POPS(2) 1995-2000(3) DENSITY(4) TRAFFIC DENSITY(5)
- ----------------- -------- ------------ ---------- ------------------
<S> <C> <C> <C> <C>
CHARLOTTE MTA
Anderson, SC............. 329.4 0.97% 114 29,830
Asheville/Hendersonville,
NC...................... 568.2 1.41 93 28,806
Charleston, SC........... 638.0 (0.10) 118 36,887
Columbia, SC............. 627.9 1.18 158 31,678
Fayetteville/Lumberton,
NC...................... 642.0 1.51 133 27,781
Florence, SC............. 257.0 0.80 113 24,924
Goldsboro/Kinston, NC.... 233.0 0.98 114 9,068
Greenville/Washington,
NC...................... 241.3 1.31 60 n.a
Greenville/Spartanburg,
SC...................... 853.2 0.94 215 28,578
Greenwood, SC............ 72.8 0.58 91 n.a.
Hickory/Lenoir, NC....... 319.9 1.16 196 31,709
Jacksonville, NC......... 150.3 0.67 197 n.a.
Myrtle Beach, SC......... 156.6 0.83 137 n.a.
New Bern, NC............. 166.9 0.49 82 n.a.
Orangeburg, SC........... 118.8 0.25 63 27,530
Roanoke Rapids, NC....... 79.6 0.55 63 28,837
Rocky Mount/Wilson, NC... 212.7 0.82 150 26,101
Sumter, SC............... 154.1 0.87 92 19,303
Wilmington, NC........... 304.3 2.50 106 14,139
KNOXVILLE MTA
Kingsport, TN............ 682.2 0.38 116 23,560
Middlesboro/Harlan, KY... 123.3 0.23 77 n.a.
ATLANTA MTA
Augusta, GA.............. 567.8 0.51 88 24,425
Savannah, GA............. 128.9 1.38 78 24,362
WASHINGTON MTA
Charlottesville, VA...... 211.4 1.13 73 15,981
Cumberland, MD........... 159.9 (0.09) 63 15,239
Fredricksburg, VA........ 132.5 2.64 98 67,775
Hagerstown,
MD/Chambersburg, PA..... 353.8 0.64 160 25,319
Harrisonburg, VA......... 140.9 0.98 57 29,618
Winchester, VA........... 154.8 1.23 116 25,166
RICHMOND MTA
Danville, VA............. 177.6 0.32 79 n.a.
Lynchburg, VA............ 158.1 0.01 116 32,447
Martinsville, VA......... 89.3 (0.34) 102 n.a.
Richmond/Petersburg, VA.. 1,202.7 0.84 131 36,233
Roanoke, VA.............. 638.8 0.48 90 27,649
Staunton/Waynesboro, VA.. 106.9 0.62 75 27,180
TRITON TOTAL/AVERAGE..... 11,155.9(6) 1.57(7) 121(8) 33,570(9)
U.S. AVERAGE............. n.a. 0.83(10) 77(11) 31,521(12)
</TABLE>
- --------
All figures based on estimates for 1997 by Paul Kagan Associates, Inc., Carmel,
CA.
45
<PAGE>
(1) Licensed Areas are segmented into BTAs, except for Savannah, GA, which
includes only Beaufort, Hampton and Jasper counties from the Savannah, GA
BTA.
(2) Pops in thousands. Based on Kagan estimates, in which the estimated
average annual population growth rate for 1995-2000 was applied to
estimates of 1995 Pops to calculate the 1997 Pops in each market.
(3) Estimated average annual population growth based on 1995 population and
estimated 2000 population.
(4) Number of Pops per square mile.
(5) Daily vehicle miles traveled (interstate only) divided by interstate
highway miles in that market.
(6) Total Pops in the Licensed Area.
(7) See note 3. Weighted by Pops. Projected average annual population growth
in the Licensed Area.
(8) Weighted by Pops. Average number of Pops per square mile in the Licensed
Area.
(9) Weighted by interstate miles. Average daily vehicle miles traveled
(interstate only) divided by interstate highway miles in the Licensed
Area.
(10) See note 3. Projected average annual population growth for the U.S.
(11) Average number of Pops per square mile for the U.S.
(12) Average daily vehicle miles traveled (interstate only) divided by
interstate highway miles for the U.S.
SERVICES AND FEATURES
The Company intends to provide affordable, reliable, high-quality mobile
telecommunications service. Through its digital PCS network, the Company
plans, immediately upon commencement of commercial operations currently
scheduled for the end of the first quarter of 1999, or shortly thereafter, to
introduce a wide array of services and features that are designed to provide
customers with greater capabilities in call management and increase usage for
both outgoing and incoming calls.
CONTIGUOUS FOOTPRINT. The Company believes that its large contiguous
footprint which is adjacent to AT&T's recently launched wireless network
markets of Washington, D.C., Charlotte, NC and Atlanta, GA, will be a
substantial competitive advantage. The Company's affiliation with the "AT&T
Wireless Services Network" will provide the Company with access to nationwide
coverage, while its sizable home area, which will include adjacent AT&T
wireless markets, will allow the Company to offer cost-effective, competitive
calling plans stretching down much of the Mid-Atlantic and Southeastern
coastal regions.
IMPROVED QUALITY AND TECHNOLOGY. As the quality of digital wireless
telephony networks continues to approach that of wireline systems, increased
customer usage is expected. The Company believes that PCS providers will in
general be the first to offer mass market all-digital mobile networks. In
addition, the Company believes PCS providers will be the first to be able to
offer mass market wireless applications in competition with switched and
direct access local telecommunications services.
SINGLE NUMBER SERVICE. This service will transfer all incoming calls between
primary landline and wireless locations automatically. When a customer's
handset is activated, the Company's network will route all incoming calls to
the customer's wireless number. When the handset is deactivated, all calls
will be directed to the customer's primary landline location. This advanced
intelligent network service application makes it possible for the customer to
receive all his or her calls and text messages through a single telephone
number, enhancing the "anytime, anywhere" functionality of the Company's
wireless telecommunications. This increased reachability will be managed
through a set of advanced features such as selective call screening,
rejection, routing and forwarding screening, caller ID, message waiting and
call hold.
CALLER ID, VOICEMAIL, MESSAGE WAITING INDICATOR, SHORT MESSAGING. Caller ID
enables users to choose which calls to accept and which to send to voicemail,
a feature that will boost customer willingness to leave the phone on for
incoming calls. Digital voicemail is available at a very cost effective rate
and allows for fewer missed calls. Digital handset displays with message
waiting indicators will eliminate the need to "dial-in" to check voicemail,
and will permit the delivery of short messages similar to E-mail or alpha-
numeric paging.
46
<PAGE>
DUAL-BAND/DUAL-MODE HANDSETS. Through dual-band/dual-mode PCS handsets, the
Company will offer customers the ability to make and receive calls on both PCS
and cellular frequency bands utilizing both digital and analog technology.
These advanced handsets allow seamless roaming on cellular networks where
compatible PCS service is not offered and can be equipped for a variety of
enhanced features and applications.
EXTENDED BATTERY LIFE. New digital handsets are capable of operating in
"sleep mode" while powered on but not in use, thus improving efficiency and
extending battery life. The estimated effect of this capability is to extend
battery life to five to six times that of analog handsets. The Company expects
that this feature will increase usage, especially for incoming calls, as the
phone can be left on for longer periods.
AUTHENTICATION, VOICE PRIVACY. Through the use of an authentication key,
the digital technology eliminates the need for "Personal Identification
Numbers or PINs." Digital technology also offers enhanced privacy of calls.
Each voice signal is converted into a stream of data bits, which is encoded
and then separated. Greater privacy results, as it is more difficult for a
call to be decoded.
WIRELESS DATA EXCHANGE. The Company believes that, as data transmission
technologies develop, a number of potential uses for such services will
emerge, including short message service, mobile office applications (e.g.,
facsimile, electronic mail and connecting notebook computers with the Internet
and other computer/data networks), access to stock quote services,
transmission of text such as maps and manuals, transmission of photographs,
connections of wireless point-of-sale terminals to host computers, monitoring
of alarm systems, automation of meter reading and monitoring of status and
inventory levels of vending machines.
MARKETING STRATEGY
The Company intends to adopt a marketing approach that leverages AT&T's
nationwide presence and brand name. The Company expects to capitalize on its
regional focus and its ability, as a small, entrepreneurial company, to
respond quickly and creatively to changing customer needs. In all of its
marketing efforts, the Company intends to emphasize the improved quality,
enhanced features and favorable pricing of its PCS system. Its marketing
strategy has been designed to increase overall wireless communications
penetration with an emphasis on mass marketing concepts designed to appeal to
a broad demographic base.
AFFILIATION WITH AT&T. The Company intends to capitalize on the marketing
opportunities derived from the AT&T relationship, including (i) co-branding
with the AT&T logo, (ii) nationwide coverage, (iii) an expansive home calling
area and (iv) bundling of AT&T telecommunications products and service
offerings. See "Business--Business Strategy" and "Certain Relationships and
Related Transactions--The AT&T Agreements."
LOCAL FOCUS/CUSTOMER SERVICE. The Company expects to benefit from its
intense focus on the Virginia, South Carolina, North Carolina and Georgia
markets. Operational executives will be close to the customer and better able
to build ties with the local community by emphasizing its regional
identification. The Company will employ full-time customer service
representatives that are extensively trained and authorized to solve
customer's concerns/questions about PCS services, activation, changing
personal options, and other service information. Customer service
representatives will be accessible from any of the Company's handsets at no
charge.
PRICING. The Company's pricing strategy will be based upon simplified,
customer-friendly service plans allowing for customer preferred options and
"usage friendly" features. "Usage friendly" features will include long
distance throughout the continental U.S., caller ID, free first incoming
minute and selective routing to voicemail. The Company's consumer pricing
strategy is expected to result in low monthly access charges, statewide local
calling, usage-enhancing features and low per-minute rates. Lower per-minute
rates relative to analog cellular providers are possible because digital cell
and switch sites have greater capacity, thereby enabling the Company to market
high use customer plans at significantly lower prices. Simultaneously, the
Company will be able to offer the business user substantial economic savings
on such features as: home regional roaming rates; free long distance
throughout the contiguous United States; messaging; and reduced rates for
incoming calls.
47
<PAGE>
ADVERTISING. The ability to benefit from the AT&T name and reputation will
allow the Company to achieve customer growth more efficiently than competitors
with low brand awareness. AT&T has spent billions of dollars nationally in
advertising to build its brand name. In addition to participating in
nationwide advertising campaigns promoting the AT&T brand name, the Company
intends, subject to the terms of the License Agreement, to advertise its
products and services using television, radio, print advertisements, outdoor
advertising and promotional displays in retail stores. The Company will market
its products and services under a local company name as "Member, AT&T Wireless
Services Network" with the AT&T logo. The focus of its advertising campaign
will be "local folks providing national wireless services."
BUNDLING OF SERVICES. In addition to its basic and enhanced wireless service
packages, the Company may bundle its wireless services with other
telecommunications services, including long distance services, through
strategic alliances and resale agreements. The Company may also seek to
provide bundled service options in partnership with local businesses and
affinity marketing groups. Examples include bundling wireless service with
local telephone or utility services, banking services, cable television,
Internet access or alarm monitoring services, or with local information
services (permitting the customer to access information such as account
status, weather and traffic reports, stock quotes and sports scores as text
messages from any location).
WIRELESS OFFICE. The Company expects that one of its future product
orientations will be the "wireless office" plan featuring (i) a wireless PBX
with one handset for both on-premises and mobile use and (ii) separate pricing
plans for calls within and outside such premises. The interconnection through
PBX equipment provides (i) security through voice privacy and authentication,
(ii) all connections through least-cost routing, (iii) private-four-digit
dialing that can reach regional or national end-users, (iv) concurrent ringing
of landline and mobile phone, and (v) caller control to select the routing if
no answer. The flexibility in available pricing plans offered by wireless
office is expected to give the Company the opportunity to attract high volume
end users to its services. See "--TDMA Digital Technology."
SALES AND DISTRIBUTION
The Company plans to target a broad range of consumer and business markets
utilizing a multi-channel sales plan. While the Company plans to have access
to AT&T's national sales channels, the Company also plans to offer its
services and products through traditional cellular channels, such as company
retail stores, mass merchandisers and retail outlets, a direct sales force and
a third party independent agent program, as well as through new, lower-cost
channels such as a corporate website and telemarketing. The Company is
planning 7 to 12 retail points of presence per 100,000 Pops. In total, the
Company estimates that approximately 60% to 70% of its gross additions will be
generated by retail distribution.
RETAIL STORES. The Company plans to open between 90 and 110 retail stores.
These stores are expected to provide the Company with the strong local
presence required to achieve high penetration in suburban and rural areas.
Sales representatives in corporate stores will receive in-depth training which
will allow them to explain PCS service in an informed and persuasive manner.
The Company believes that these representatives will foster effective and
enduring customer relationships.
MASS MERCHANDISERS AND OUTLETS. The Company's retail store strategy will be
complemented with mass market retail outlets in specifically identified areas
in which the Company believes that established retailers offer the highest
likelihood for success in reaching target customers. The Company also plans on
utilizing small in-line stores and kiosks in smaller areas of 8,000 Pops or
more.
THIRD PARTY INDEPENDENT AGENT PROGRAM. The Company's independent agent
strategy will create opportunities for distribution in areas that may not be
served by retail stores and mass merchandisers.
AT&T MAJOR ACCOUNT TEAMS. The Company plans on utilizing AT&T's Business
Marketing Division as a primary source of generating customers. Through
developing and implementing a cross sell services strategy,
48
<PAGE>
and creating an administrative tracking system for referrals, the Company
plans on providing compensatory incentives for the AT&T Major Account Teams to
promote and sell the Company's product.
DIRECT SALES FORCE. The Company plans on servicing major accounts through a
direct sales force. The focus will be on those business accounts not covered
by AT&T's Business Marketing Division.
WEBSITE AND TELEMARKETING. The Company plans on developing these less
expensive and more innovative sales channels to complement the retail presence
within the Licensed Area as the build-out of the Initial Configuration nears
completion. The primary concept of sales through the website is to communicate
with customers in the way most preferred by that category of customer.
Distribution of the Company's product can be divided into a two step
process-sale and activation. The Company's management intends to take
advantage of the technological features intrinsic to TDMA/IS-136 technology to
separate the activation of the phone from the sale of the phone. This
separation will provide several advantages to the Company, including: (i)
higher quality service activation than is normally the case through mass
merchandising retail channels; (ii) the opportunity for the Company to "up
sell" additional features, products or customized services at the time of
activation; and (iii) reduced churn because customer expectations are set
appropriately as basic training can be provided at the time of activation.
TDMA DIGITAL TECHNOLOGY
The Company has selected TDMA digital technology utilizing the state-of-the-
art IS-136 standard for its PCS network. The Company selected TDMA on the IS-
136 standard because it (i) offers quality digital service with enhanced
service capability, (ii) is compatible with AT&T's wireless network and (iii),
in comparison to CDMA technology, allows the Company to take advantage of
hierarchical cell sites to enhance coverage and create customized billing
plans.
The Company believes that systems using TDMA digital technology on the IS-
136 standard offer three times the capacity of analog cellular systems and
offer enhanced transmission and routing capabilities, thus providing
significantly improved sound clarity relative to analog systems. TDMA digital
technology also allows the Company to offer an enhanced package of services to
its customers, including message waiting indicator, caller ID, sleep mode,
voice privacy, short message services, data communications, authentication and
others.
Since the Company has chosen the TDMA/IS-136 standard, its network will be
compatible with AT&T's nationwide network immediately upon launch of
operations. AT&T's network, together with that of the Company and other
affiliates of AT&T, is expected to span more than 80% of the United States.
Finally, the Company has also chosen TDMA/IS-136 because it is capable of
providing a hierarchical cell site structure which allows cost-effective
capacity enhancement and greater customization of calling plans. An area
covered by a macro-cell site can be overlapped with the addition of micro-
cells and pico-cells to provide enhanced coverage within the same area. In
addition, the technology allows for customized billing by cell site, if
necessary. This is especially important in offering wireless office services.
A pico-cell will provide coverage within an office building and can be billed
on a specialized rate plan. As a user leaves the building, a micro-cell will
provide localized coverage for a "campus-based" environment that will be
billed accordingly. When the user leaves the specialized coverage area and is
picked up by a macro-cell site, they will then be billed as a traditional
mobile customer.
NETWORK BUILD-OUT
The build-out of the Company's network involves systems design, acquisition
of cell sites, equipment procurement, relocation of existing microwave users,
interconnection with other communications providers, construction of cell
sites, installation of switches, and testing, optimization and implementation
of advanced management information and billing systems. A planning and
engineering team, composed of approximately 35 engineering employees,
independent contractors and consultants, is designing and constructing the
Company's
49
<PAGE>
digital PCS network based on the regional marketing and product requirements
to meet the Company's targets for consistency, uniformity and reliability.
The Company's principal objective is to maximize population coverage levels
within targeted demographic segments and geographic areas, rather than
building out wide-area cellular-like networks. The Company expects to cover
40% of the Pops in the Licensed Area and intends to commence commercial
service in the Initial Configuration by the end of the first quarter of 1999
or shortly thereafter. The Company expects to extend its coverage to
approximately 85% of the Pops in the Licensed Area by the end of the fourth
quarter of 2001.
RF DESIGN. The Company, along with Wireless Facilities Inc., an RF
engineering firm, has developed the RF design for the initial build-out of its
digital PCS network in the Initial Configuration. This process includes cell
site design, frequency planning and network optimization for each such market.
RF engineering also allocates voice channels and assigns frequencies to cell
sites taking into consideration both PCS and microwave interference issues.
PROPERTY ACQUISITION. Two experienced vendors, Entel and Gearon, are
responsible for identifying and obtaining the required property for build-out
of the PCS network, including securing all zoning, permitting and surveying
approvals and licenses. The cell site selection process will require the lease
or acquisition of approximately 500 sites prior to commencement of commercial
operations of the Company's PCS network in the Initial Configuration and
approximately 1,200 sites prior to full operation in the Licensed Area, many
of which are likely to require the Company to obtain zoning variances or other
local governmental or third-party approvals or permits. As of August 17, 1998,
the Company had signed leases or options for 292 sites, 142 of which were
awaiting required zoning approvals.
CONSTRUCTION AND INSTALLATION. The Company, along with Entel and Gearon,
will oversee the deployment of its digital PCS network. Entel and Gearon will
act as general construction contractors and employ local construction firms to
build the cell sites.
MICROWAVE RELOCATION. The Company must clear its spectrum by relocating
certain commercial microwave service users within the Licensed Areas to become
operational. The Company has contracted with Entel to assist in the microwave
relocation process. Recently, the FCC adopted a microwave relocation cost-
sharing plan that limits permissible relocation costs and outlines new
procedures for the sharing of relocation costs where the relocation of private
microwave facilities benefits multiple broadband PCS licensees. See "--
Regulation."
The Company believes it must relocate a total of 15 microwave paths in the
Licensed Areas, of which two need to be relocated to launch commercial service
in the Initial Configuration. As of August 17, 1998, the two relocation
agreements have been executed. The remaining 13 microwave paths will be
relocated as business requirements for service coverage expansion dictate and
as FCC negotiation periods expire. See "Risk Factors--Network Build-Out and
System Implementation Risks."
INTERCONNECTION. The Company's digital PCS network will connect to local
exchange carriers (LECs). The Company is negotiating, or intends to negotiate,
interconnection agreements with telephone companies operating or providing
service in the areas where the Company is deploying its digital PCS network.
The Company intends to use AT&T as its interexchange (long-distance) carrier
as provided in the Stockholders' Agreement.
ROAMING. Wireless service providers are able to offer service to customers
from other systems who are traveling in or through their service area.
Customers typically pay higher rates while "roaming" outside of their home
market. Roaming is made possible in today's analog and digital cellular
environment by virtue of common frequency and signaling technology. PCS and
analog cellular systems operate on different frequencies and with different
signaling technologies.
50
<PAGE>
In areas where TDMA-based PCS service is not available, the Company intends
to offer a roaming option on the traditional analog cellular and digital
cellular systems via dual-band/dual-mode handsets capable of transmitting over
either cellular or PCS frequencies. Access to cellular coverage will be
provided through the use of dual-band/dual-mode handsets which first became
commercially available in June of 1997. Pursuant to the AT&T Agreements, the
Company's customers who own dual-band/dual-mode handsets will be able to roam
on AT&T's wireless network. In addition, pursuant to the Stockholders'
Agreement, AT&T will use commercially reasonable efforts to enable the Company
to become a party to the roaming agreements between AT&T and other operators
of cellular or PCS systems.
INFORMATION TECHNOLOGY. The Company will require advanced and sophisticated
management information systems to handle customer care, billing, network
management and financial and administrative services. The systems are focused
on three primary areas: (i) customer care, including billing systems and
customer service and support systems, (ii) network management, including
service activation, traffic and usage monitoring, trouble management and
operational support systems and (iii) business systems, including financial,
purchasing, human resources and other administrative systems.
The Company, together with its equipment vendors, also plans to introduce
sophisticated network management and operations support systems which will
facilitate network fault detection, correction and management, performance and
usage monitoring and security. System capabilities are being developed which
will allow over-the-air activation of the handset and provision of services.
The Company is currently in discussions with several vendors, including
those currently providing services to AT&T, regarding information technology
services. See "Risk Factors--Network Build-Out and System Implementation
Risks."
51
<PAGE>
THE WIRELESS COMMUNICATIONS INDUSTRY
OVERVIEW
Wireless communications systems use a variety of radio frequencies to
transmit voice and data. Broadly defined, the wireless communications industry
includes one-way radio applications, such as paging or beeper services, and
two-way radio applications, such as PCS, cellular telephone and ESMR networks.
Historically, each application has been licensed by the FCC and operates in a
distinct radio frequency block.
Since its introduction in 1983, wireless service has grown dramatically. The
following chart illustrates the annual growth in United States wireless
customers through December 31, 1997:
LOGO
The following table sets forth certain United States wireless industry
statistics:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------
WIRELESS INDUSTRY
STATISTICS(1) 1992 1993 1994 1995 1996 1997
- ----------------- ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Total service revenues (in
billions).................... $ 7.8 $ 10.9 $ 14.2 $ 19.1 $ 23.6 $ 27.5
Ending subscribers (in
millions).................... 11.0 16.0 24.1 33.8 44.0 55.3
Subscriber growth............. 46.0% 45.1% 50.8% 40.0% 30.4% 25.6%
Average monthly service
revenue per subscriber(2).... $70.13 $67.13 $59.08 $54.91 $50.61 $46.11
Average monthly subscriber
revenue per subscriber(3).... $61.40 $58.74 $51.48 $47.59 $44.66 $41.12
Ending penetration............ 4.4% 6.2% 9.4% 13.0% 16.3% 20.2%
</TABLE>
- --------
Source: Cellular Telecommunications Industry Association and Kagan.
(1) Reflects domestic U.S. commercially operational cellular, ESMR and PCS
providers.
(2) Per subscriber revenue including roaming revenue.
(3) Per subscriber revenue excluding roaming revenue.
52
<PAGE>
In the wireless communications industry, there are two principal services
licensed by the FCC for transmitting voice and data signals: "PCS" and
"cellular." PCS spectrum (1850-1990 MHz) was auctioned by the FCC beginning in
late 1994 and is to be used by PCS licensees to provide wireless
communications services. PCS will initially compete directly with existing
cellular telephone, paging and specialized mobile radio services. PCS will
also include features that are not generally offered by cellular providers,
such as data transmissions to and from portable computers, advanced paging
services and facsimile services. The Company believes that PCS providers will
be the first direct wireless competitors to cellular providers. In addition,
wireless providers may offer mass market wireless local loop applications in
competition with wired local communications services. See "Business--
Regulation" for a discussion of the FCC auction process and allocation of
wireless licenses.
Cellular service is currently the predominant form of wireless voice
communications service available. The FCC has made available for cellular
service a portion of the radio spectrum from 824-894 MHz. Cellular systems
were originally analog-based systems, although digital technology has been
introduced in several markets. Analog technology currently has several
limitations, including lack of privacy and limited capacity. Digital systems
convert voice or data signals into a stream of digits that is compressed
before transmission, enabling a single radio channel to carry multiple
simultaneous signal transmissions. This enhanced capacity, along with
improvements in digital signaling, allows digital-based wireless technologies
to offer new and enhanced services, such as greater call privacy, and robust
data transmission features, such as "mobile office" applications (including
facsimile, electronic mail and wireless connections to computer/data networks,
including the Internet). See "--Operation of Wireless Communications Systems."
OPERATION OF WIRELESS COMMUNICATIONS SYSTEMS
Wireless communications system service areas, whether PCS or cellular, are
divided into multiple cells. In both PCS and cellular systems, each cell
contains a transmitter, a receiver and signaling equipment (the "Cell Site").
The Cell Site is connected by microwave or landline telephone lines to a
switch that uses computers to control the operation of the cellular
communications system for the entire service area. The system controls the
transfer of calls from cell to cell as a subscriber's handset travels,
coordinates calls to and from handsets, allocates calls among the cells within
the system and connects calls to the local landline telephone system or to a
long distance telephone carrier. Wireless communications providers establish
interconnection agreements with local exchange carriers and interexchange
carriers, thereby integrating their system with the existing landline
communications system.
Because the signal strength of a transmission between a handset and a Cell
Site declines as the handset moves away from the Cell Site, the switching
office and the Cell Site monitor the signal strength of calls in progress.
When the signal strength of a call declines to a predetermined level, the
switching office may "hand off" the call to another Cell Site where the signal
strength is stronger. If a handset leaves the service area of a PCS or
cellular system, the call is disconnected unless there is a technical
connection with the adjacent system.
Analog cellular handsets are functionally compatible with cellular systems
in all markets within the United States. As a result, analog cellular handsets
may be used wherever a subscriber is located, as long as a cellular system is
operational in the area.
Although PCS and cellular systems utilize similar technologies and hardware,
they operate on different frequencies and may use different technical and
network standards. As a result, until the introduction of dual-band/dual-mode
handsets in June 1997, it was not possible for users of one type of system to
roam on a different type of system outside of their service area, or to hand
off calls from one type of system to another.
PCS systems operate under one of three principal digital signal transmission
technologies, or standards, that have been proposed by various operators and
vendors for use in PCS systems: TDMA, CDMA or GSM. TDMA and GSM are both "time
division-based" standards but are incompatible with each other and with CDMA.
Accordingly, a subscriber of a system that utilizes TDMA technology is
currently unable to use a TDMA handset when traveling in an area not served by
TDMA-based PCS operators, unless the subscriber carries a dual band/dual-mode
handset that permits the subscriber to use the analog cellular system in that
area.
53
<PAGE>
COMPETITION
Competition for subscribers among wireless licensees is based principally
upon the services and features offered, the technical quality of the wireless
system, customer service, system coverage, capacity and price. Such
competition may increase to the extent that licenses are transferred from
smaller, stand-alone operators to larger, better capitalized and more
experienced wireless communications operators who may be able to offer
subscribers certain network advantages similar to those to be offered by the
Company.
The Company will initially compete directly with two cellular providers in
each of its Licensed Areas. The existing cellular providers in the Company's
markets, most of which have an infrastructure in place and have been
operational for a number of years, and several of which have significantly
greater financial and technical resources than the Company, may upgrade their
networks to provide comparable services in competition with the Company. The
technologies employed by these competitors are CDMA, whose relative strengths
as compared to TDMA include good voice quality and longer battery life, and
GSM, whose relative strengths as compared to TDMA include larger system
capacity, a low cost infrastructure, and international roaming capabilities
due to worldwide deployment.
The Company will also compete with PCS license holders in each of its
markets. The Company believes that the ownership structure of PCS licenses in
the Licensed Area is fragmented. However, Sprint Corporation and BellSouth
Corporation, among others, hold licenses that overlap large portions of the
Licensed Area. The Company believes that most PCS license holders have not
commenced the roll-out of their networks in the Licensed Area. However, the
Company does expect to compete directly with one or more PCS service providers
in each of its markets in the future. See "Business--Regulation."
The Company expects to also face competition from other existing
communications technologies such as SMR and ESMR, currently employed by Nextel
in the Company's Licensed Area. Although SMR was originally created by the FCC
as a non-interconnected service principally for fleet dispatch, in the last
decade it has liberalized the rules to permit ESMR, to offer services that are
functionally equivalent to cellular and PCS, and may be less expensive to
build and operate than PCS systems.
The FCC requires all cellular and PCS licensees to provide service to
"resellers." A reseller provides wireless service to customers but does not
hold an FCC license or own facilities. Instead, the reseller buys blocks of
wireless telephone numbers and capacity from a licensed carrier and resells
service through its own distribution network to the public. Thus, a reseller
is both a customer of a wireless licensee's services and also a competitor of
that licensee. Several small resellers currently operate in competition with
the Company. With respect to PCS licensees, the resale obligations terminate
five years after the last group of initial licenses of currently allotted PCS
spectrum is awarded.
The Company anticipates that market prices for two-way wireless services
generally will decline in the future based upon increased competition. The
Company's ability to compete successfully will depend, in part, on its ability
to anticipate and respond to various competitive factors affecting the
industry, including new services that may be introduced, changes in consumer
preferences, demographic trends, economic conditions and competitors' discount
pricing strategies, all of which could adversely affect the Company's
operating margins. The Company plans to use its digital feature offerings,
national network through its AT&T affiliations, contiguous footprint providing
an expanded home rate billing area, and local presence in secondary markets,
to combat potential competition. The Company expects that its extensive
digital network, once deployed, will provide the cost effective means to react
effectively to any price competition.
REGULATION
The FCC regulates the licensing, construction, operation, acquisition and
sale of PCS systems in the United States pursuant to the Communications Act,
as amended from time to time, and the rules, regulations and policies
promulgated by the FCC thereunder.
Licensing of PCS Systems
A broadband PCS system operates under a protected geographic service area
license granted by the FCC for a particular market on one of six frequency
blocks allocated for broadband PCS service. Narrowband PCS is
54
<PAGE>
for non-voice applications such as paging and data service and is separately
licensed. The FCC has segmented the United States into PCS markets as follows:
51 large regions called MTAs, which in turn are comprised of 493 smaller
regions called BTAs. Two licenses are awarded for each MTA and four for each
BTA, so that generally six licensees will be authorized to compete in each
area. The two MTA licenses authorize the use of 30 MHz of spectrum. One of the
BTA licenses is for 30 MHz of spectrum, and the other three are for 10 MHz
each. The FCC permits licensees to split their licenses and assign a portion,
on either a geographic or frequency basis or both, to a third party. It was in
this fashion that AT&T assigned to the Company 20 MHz of its 30 MHz licenses
covering the Licensed Area.
The FCC awards all PCS licenses by auction. Auctions began with the 30 MHz,
MTA-wide licenses, and concluded last year with the last of the BTA licenses.
Due to defaults in payment of the bid price, the FCC is considering a variety
of approaches for dealing with the defaulting bidders. Accordingly, certain
licenses may be re-auctioned in the future.
Under the FCC's current rules specifying spectrum aggregation limits
affecting broadband PCS licensees, no entity may hold "attributable" interests
(generally 20% or more of the equity, or an officer or director position) in
licenses for more than 45 MHz of PCS, cellular and certain SMR services where
there is significant overlap in any geographic area. Significant overlap will
occur when at least ten percent of the population of the PCS licensed service
area is within the cellular and/or SMR service area(s).
All PCS licenses have a 10-year term, at the end of which they must be
renewed. The FCC will award a "renewal expectancy" to a PCS licensee that (i)
has provided substantial service during its past license term and (ii) has
substantially complied with applicable FCC rules and policies and the
Communications Act. All PCS licensees must satisfy certain coverage
requirements. In the Company's case, it must construct facilities that offer
coverage to one-third of the population of its service area within five years
of the original license grants to AT&T and to two-thirds of the population
within ten years. Licensees that fail to meet the coverage requirements may be
subject to forfeiture of the license.
For a period of up to five years after the grant of a PCS license (subject
to extension), a PCS licensee will be required to share spectrum with existing
licensees that operate certain fixed microwave systems within its license
area. To secure a sufficient amount of unencumbered spectrum to operate its
PCS systems efficiently and with adequate population coverage, the Company
will need to relocate many of these incumbent licensees. In an effort to
balance the competing interests of existing microwave users and newly
authorized PCS licensees, the FCC has adopted (i) a transition plan to
relocate such microwave operators to other spectrum blocks and (ii) a cost
sharing plan so that if the relocation of an incumbent benefits more than one
PCS licensee, the benefiting PCS licensees will share the cost of the
relocation. Initially, this transition plan allowed most microwave users to
operate in the PCS spectrum for a two-year voluntary negotiation period and an
additional one-year mandatory negotiation period. For public safety entities
dedicating a majority of their system communications for police, fire or
emergency medical services operations, the voluntary negotiation period is
three years, with an additional two-year mandatory negotiation period. The FCC
has recently shortened the voluntary negotiation period by one year (without
lengthening the mandatory negotiation period) for non-public safety PCS
licensees in the C, D, E and F Blocks. Parties unable to reach agreement
within these time periods may refer the matter to the FCC for resolution, but
the incumbent microwave user is permitted to continue its operations until
final FCC resolution of the matter. The transition and cost sharing plans
expire on April 4, 2005, at which time remaining incumbents in the PCS
spectrum will be responsible for their costs to relocate to alternate spectrum
locations.
PCS systems are subject to certain FAA regulations governing the location,
lighting and construction of transmitter towers and antennas and may be
subject to regulation under the National Environmental Policy Act and the
environmental regulations of the FCC. State or local zoning and land use
regulations also apply to the Company's activities. The Company expects to use
common carrier point to point microwave facilities to connect Cell Sites and
to link them to the main switching office. These facilities are separately
licensed by the FCC and are subject to regulation as to technical parameters
and service.
55
<PAGE>
The Communications Act preempts state and local regulation of the entry of,
or the rates charged by, any provider of CMRS, which includes PCS and cellular
service, or any private mobile radio service ("PMRS"), and the FCC does not
regulate such rates.
Transfers and Assignments of PCS Licenses
The Communications Act and FCC rules require the FCC's prior approval of the
assignment or transfer of control of a license for a PCS or cellular system.
In addition, the FCC has established transfer disclosure requirements that
require licensees who transfer control of or assign a PCS license within the
first three years of their license term to file associated contracts for sale,
option agreements, management agreements or other documents disclosing the
total consideration that the licensee would receive in return for the transfer
or assignment of its license. Non-controlling interests in an entity that
holds a FCC license generally may be bought or sold without FCC approval. Any
acquisition or sale by the Company of PCS or cellular interests may also
require the prior approval of the Federal Trade Commission and the Department
of Justice, if over a certain size, as well as state or local regulatory
authorities having competent jurisdiction.
Foreign Ownership
Under existing law, no more than 20% of an FCC licensee's capital stock may
be owned, directly or indirectly, or voted by non-US citizens or their
representatives, by a foreign government or its representatives or by a
foreign corporation. If an FCC licensee is controlled by another entity, as is
the case with the Company's ownership structure, up to 25% of that entity's
capital stock may be owned or voted by non-US. citizens or their
representatives, by a foreign government or its representatives or by a
foreign corporation. Foreign ownership above the 25% level may be allowed
should the FCC find such higher levels not inconsistent with the public
interest. The FCC has recently issued an order in which it ruled that higher
levels of foreign ownership (even up to 100%) are presumptively consistent
with the public interest with respect to investors from most nations. If
foreign ownership of the Company were to exceed the permitted level, the FCC
could revoke the Company's FCC licenses, although the Company could seek a
declaratory ruling from the FCC allowing the foreign ownership or take other
actions to reduce the Company's foreign ownership percentage in order to avoid
the loss of its licenses. The Company has no knowledge of any present foreign
ownership in violation of these restrictions.
Recent Industry Developments
The FCC has announced rules for making emergency 911 services available by
cellular, PCS and other mobile service providers, including "enhanced 911"
services that provide the caller's telephone number, location and other useful
information. The original timetable required PCS providers to be able to
process and transmit 911 calls (without call validation), including those from
callers with speech or hearing disabilities, by late 1997, to take actions
enabling them to relay a caller's automatic number identification and cell
site by mid-1998, and by 2001 to be able to identify the location of a 911
caller within 125 meters in 67% of all cases. The FCC is currently considering
a revised implementation schedule for these requirements State actions
incompatible with the FCC rules are subject to preemption.
On August 1, 1996, the FCC released a Report and Order expanding the
flexibility of cellular, PCS and other CMRS providers to provide fixed as well
as mobile services. Such fixed services include, but need not be limited to,
"wireless local loop" services, e.g., to apartment and office buildings, and
wireless backup to PBXs and local area networks, to be used in the event of
interruptions due to weather or other emergencies. The FCC has not yet decided
whether such fixed services should be subjected to universal service
obligations, or how they should be regulated, but it has proposed a
presumption that they be regulated as CMRS services.
On August 8, 1996, the FCC released its order implementing the
interconnection provisions of the Telecommunications Act. The FCC's decision
is lengthy and complex and is still subject to further review, and its precise
impact is difficult to predict with certainty. Although many of the provisions
of this order were struck
56
<PAGE>
down by the United States Court of Appeals for the Eighth Circuit, the
rationale of the order has been adopted by many states' public utility
commissions, with the result that the charges that cellular and PCS operators
pay to interconnect their traffic to the public switched telephone network are
expected to decline significantly from pre-1996 levels.
The FCC recently adopted rules on telephone number portability which will
enable customers to migrate their landline and cellular telephone numbers to a
PCS or cellular carrier and from a PCS or cellular carrier to another service
provider. The FCC has also adopted rules requiring PCS and cellular operators
to provide functions to facilitate electronic surveillance by law enforcement
officials. Representatives of the cellular and PCS industry are challenging
both set of rules.
INTELLECTUAL PROPERTY
The AT&T globe design logo is a service mark registered with the United
States Patent and Trademark Office. The service mark is owned by AT&T. The
Company expects, pursuant to the License Agreement, to use, royalty-free, the
AT&T and globe design logo and certain other service marks of AT&T in
connection with marketing, offering and providing Licensed Services (as
defined herein) to end-users and resellers, solely within the Licensed Area.
The License Agreement also grants to the Company the right and license to use
the Licensed Marks on certain permitted mobile phones.
Except in certain instances, AT&T has agreed not to grant to any other
person a right or license to provide or resell, or act as agent for any person
offering, Licensed Services under the Licensed Marks. In all other instances,
AT&T reserves for itself and its affiliates the right to use the Licensed
Marks in providing its services (subject to its exclusivity obligations
described above), whether within or without the Licensed Area.
The License Agreement contains numerous restrictions with respect to the use
and modification of any of the Licensed Marks. See "Certain Relationships and
Related Transactions--The AT&T Agreements--License Agreement."
EMPLOYEES
As of June 30, 1998, the Company employed 48 persons, none of whom is
represented by a union. The Company believes its relations with its employees
are good.
PROPERTIES
The Company, through Management Co., maintains its executive offices in
Malvern, Pennsylvania. The Company also maintains two regional offices in
Richmond, VA and Charleston, SC.
LEGAL PROCEEDINGS
The Company is not a party to any lawsuit or proceeding which, in the
opinion of management, is likely to have a material adverse effect on the
Company.
57
<PAGE>
MANAGEMENT
EXECUTIVE OFFICERS AND DIRECTORS
The table below sets forth certain information regarding the directors of
Holdings and the executive officers of Triton and certain executive officers
of Triton's subsidiaries. Triton is a wholly-owned subsidiary of Holdings and
Michael Kalogris is the sole director of Triton.
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Michael Kalogris........ 48 Chairman of the Board of Directors and Chief Executive Officer
Steven Skinner.......... 55 President, Chief Operating Officer and Director
Clyde Smith............. 58 Executive Vice President and Chief Technical Officer
David Clark............. 34 Senior Vice President, Chief Financial Officer and Secretary
David Standig........... 42 Senior Vice President of Marketing
Michael Mears........... 42 President and General Manager of the South Carolina Region
Scott Anderson.......... 38 Director
John Beletic............ 46 Director
Arnold Chavkin.......... 47 Director
William Hague........... 43 Director
John Watkins............ 36 Director
</TABLE>
MICHAEL KALOGRIS has been Chairman and Chief Executive Officer of the
Company since its inception. Mr. Kalogris was previously President and Chief
Executive Officer of Horizon which he joined October 1, 1991. Under Mr.
Kalogris' leadership, Horizon became the fifth largest independent non-
wireline company in the United States, specializing in suburban markets and
small cities encompassing approximately 3.2 million Pops, and was sold for
approximately $575.0 million. Prior to joining Horizon, Mr. Kalogris served as
President and Chief Executive Officer of Metrophone of Philadelphia
("Metrophone"), a non-wireline carrier in Philadelphia. Metrophone was
acquired by Comcast Corporation for over $1.1 billion. Prior to joining
Metrophone, Mr. Kalogris worked at IBM. Mr. Kalogris is a member of the Board
of Directors of General Magic, Inc.
STEVEN SKINNER has served as President, Chief Operating Officer and a
Director of the Company since its inception. Mr. Skinner previously served as
the Vice President of Operations and Chief Operating Officer of Horizon
beginning in May of 1993. From March 1992 to May 1993, Mr. Skinner served as
Vice President of Acquisitions for Horizon. From January 1991 to March 1992 he
served as a consultant in the area of cellular acquisitions to Norwest Venture
Capital Management, Inc. and others. From August 1987 to January 1991 he
served as President and General Manager of Houston Cellular Telephone Company.
Prior to 1987 he served as a General Manager of Cybertel, Inc., a non-wireline
carrier serving St. Louis. Mr. Skinner has also been active in the National
CellularOne Group, most recently acting as Chairman of the Advisory Committee.
CLYDE SMITH has served as the Executive Vice President and Chief Technical
Officer of the Company since January 1998. Mr. Smith previously served as Vice
President and Chief Technical officer of ALLTEL Communications Inc. ("ALLTEL")
from January 1993 to January 1998, where he oversaw the expansion and
migration of its wireless network to include digital and wireless data
technologies. Prior to joining ALLTEL, Mr. Smith served as Director of
Wireless Technologies for Bell Atlantic Mobile Systems, where he was
responsible for the evaluation of new technologies. Mr. Smith is active in
industry organizations, having served as the Chairman of the CTIA Chief
Technical Officers Forum. In addition, Mr. Smith served as Secretary/Treasurer
of the CDMA Development Group.
58
<PAGE>
DAVID CLARK has served as Senior Vice President, Chief Financial Officer and
Secretary of the Company since its inception. Prior to joining Triton, he was
a Managing Director at Furman Selz L.L.C. specializing in communications
finance, which he joined in March 1996. Prior thereto, Mr. Clark spent over
ten years at Citibank N.A. and Citicorp Securities Inc. as a lending officer
and a high yield finance specialist.
DAVID STANDIG has served as the Senior Vice President of Marketing of the
Company since January 1998. Mr. Standing served as Vice President of
Marketing, among other executive positions, at Metrophone, for the six years
prior thereto. In this capacity Mr. Standig managed all aspects of marketing
operations and strategy.
MICHAEL MEARS has served as President and General Manager of the Company's
South Carolina region since its inception. Mr. Mears previously served as the
Vice President and General Manager of American Telecommunications Inc. from
June 1995 until April 1997. Prior to that Mr. Mears was the Regional and Area
General Manager of GTE Corp., serving in that capacity from 1992 October 1991
to June 1995. From 1986 to 1992 Mr. Mears served as Regional and Area General
Manager for Providence Journal Co.
SCOTT ANDERSON has served as a member of the Board of Directors of Holdings
since February 1998. He is currently a member of the Board of Directors of
PriCellular Corporation, Wireless Facilities, Inc., and Tegic Corp. and a
principal of Cedar Grove Partners, LLC. Mr. Anderson was previously Senior
Vice President for Acquisitions and Development at AT&T Wireless Services,
Inc. (formerly McCaw Cellular Communications, Inc.), which he joined in 1986,
and a director of Horizon.
JOHN BELETIC has served as a member of the Board of Directors of Holdings
since February 1998. Mr. Beletic currently serves as Chairman and Chief
Executive Officer of Pagemart Wireless Inc., which he joined in March 1992. He
currently also serves as a director of Pulsepoint Communications, Inc., PCIA
and President of the Paging Leadership Association.
ARNOLD CHAVKIN has served as a member of the Board of Directors of Holdings
since February 1998. Mr. Chavkin is also a member of the advisory board of
Triton Cellular and a director of American Radio Systems Corp., American Tower
Systems, Bell Sports Corporation, Patina Oil & Gas Corporation, R&B Falcon
Corporation, Wireless One, Inc. and U.S. Silica Company. He also serves on the
Advisory Investment Boards of Richina Group, the Indian Private Equity Fund
and the Southeast Asian Investment Fund. Mr. Chavkin has been a General
Partner of Chase Capital Partners since January 1992. Prior to joining Chase
Capital Partners, he was a member of Chemical Bank's merchant banking group
and a generalist in its corporate finance group specializing in mergers and
acquisitions and private placements for the energy industry.
WILLIAM HAGUE has served as member of the Board of Directors of Holdings
since February 1998. Mr. Hague serves as the Senior Vice President of
Acquisitions and Development at AT&T Wireless Services, Inc., which he joined
in 1995. Prior thereto and beginning in 1992, he acted as Director of Legal
Affairs and Human Resources at Pacific Northwest Cellular Western Wireless,
Inc. Mr. Hague also serves as a Director of Telecorp.
JOHN WATKINS has served as a member of the Board of Directors of Holdings
since February 1998. Mr. Watkins serves as a member of the advisory board of
FrontierVision Partners L.P. and Triton Cellular. Mr. Watkins is also a
Managing Director and an officer of J.P. Morgan Capital Corporation.
Previously, Mr. Watkins was a director of Horizon, Prism Radio Partners, L.P.
and Inference Corp.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company established a compensation committee in June of 1998. The
compensation committee currently consisits of Mr. Beletic, as chairman, Mr.
Chavkin and Mr. Watkins. Compensation for the Company's executive officers for
the year ended December 31, 1997 was determined by Mr. Kalogris and two
representatives from the Cash Equity Investors.
59
<PAGE>
COMPENSATION OF DIRECTORS
It is not anticipated that the non-independent members of the Board of
Directors will receive cash compensation for service on the Board of
Directors, although such members will be reimbursed for certain out-of-pocket
expenses in connection with attendance at board meetings. The two independent
directors of the Company will receive compensation of $10,000 per annum, plus
$1,000 for each meeting attended in person and $500 for each meeting attended
via conference call, and shares of Common Stock that may be awarded to them
pursuant to Triton's Independent Director Stock Award Plan adopted as of
February 4, 1998.
EXECUTIVE COMPENSATION
The following table sets forth certain information concerning the
compensation paid by Triton for the year ended December 31, 1997 to the Chief
Executive Officer of Triton and to each of Triton's other executive officers
(the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
---------------------- --------------------------
RESTRICTED
STOCK ALL OTHER
NAME PRINCIPAL POSITION YEAR SALARY BONUS AWARD COMPENSATION(1)
---- ------------------ ---- -------- -------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Michael Kalogris........ Chairman of the 1997 $228,619 $350,000 -- --
Board of
Directors and
Chief Executive
Officer
Steven Skinner.......... President and 1997 148,712 225,000 -- --
Chief Operating
Officer
David Clark............. Senior Vice 1997 122,243 165,000 -- $83,188
President, Chief
Financial
Officer and
Secretary
Patricia Gallagher(2)... Vice President 1997 50,758 90,000 -- --
and Treasurer
</TABLE>
- --------
(1) "All Other Compensation" includes relocation and related expenses.
(2) Ms. Gallagher resigned from the Company on August 14, 1998 (effective
September 4, 1998).
EMPLOYMENT AGREEMENTS
On February 4, 1998, Management Co. entered into an employment agreement
(the "Kalogris Employment Agreement") with Michael Kalogris, Chairman of the
Board of Directors and Chief Executive Officer of the Company. The Kalogris
Employment Agreement has a term of five years unless terminated earlier by
either Mr. Kalogris or Holdings. Mr. Kalogris may terminate the Kalogris
Employment Agreement (i) at any time at his sole discretion upon 30 days'
prior written notice and (ii) immediately, upon written notice, if (A) there
is a Change of Control (as defined in the Kalogris Employment Agreement) or
(B) Mr. Kalogris is demoted, removed or not re-elected as Chairman of the
Board of Directors of Holdings (as used in this paragraph, "Good Reason");
provided, that following the IPO Date (as defined herein), so long as Mr.
Kalogris remains a member of the Board of Directors and Chief Executive
Officer of Holdings, it is not considered "Good Reason" if Mr. Kalogris is no
longer Chairman of the Board of Directors. Holdings may terminate the Kalogris
Employment Agreement (i) at any time, upon written notice, at the sole
discretion of Holdings (as used in this paragraph, "Without Cause") and (ii)
for cause or the death or disability of Mr. Kalogris. Mr. Kalogris is entitled
to receive from Holdings upon termination of the Kalogris Employment Agreement
by Mr. Kalogris for Good Reason or by Holdings Without Cause the following
severance benefits: (A) $1.0 million, (B) up to an additional $500,000 if Mr.
Kalogris is unable to secure employment in a senior executive capacity by the
second anniversary date of the termination of the agreement, (C) if the
termination occurs prior to February 4, 2001, 50% of all shares of Common
Stock that are unvested under such employment agreement as of such date will
vest and, if the
60
<PAGE>
termination occurs between February 4, 2001 and February 3, 2002, 25% will
vest and, if the termination occurs after such period, none will vest and
(D) Holdings will allow Mr. Kalogris to participate in all health, dental,
disability and other benefit plans maintained by Holdings for a period of two
years following the date of termination of the agreement. In the event Mr.
Kalogris' employment is terminated on or after the initial five year term of
the Kalogris Employment Agreement, or due to Holdings' failure to renew the
Kalogris Employment Agreement, Holdings will pay Mr. Kalogris a severance
benefit in the amount of his base salary at such time. The Kalogris Employment
Agreement provides for an initial annual base salary of $350,000, subject to
annual increases at the discretion of the Compensation Committee of the Board
of Directors, and an annual bonus in an amount up to 100% of his base salary
based on the Company's performance. Mr. Kalogris is also entitled to acquire
shares of Holdings' Series C Preferred Stock pursuant to a stock purchase plan
to be created by Holdings as promptly as practicable pursuant to the terms of
the Kalogris Employment Agreement (the "Stock Purchase Plan") and is required
to invest toward the purchase of such shares 30% of any amounts he receives on
account of an annual bonus in excess of 50% of his base salary.
On February 4, 1998, Management Co. entered into an employment agreement
(the "Skinner Employment Agreement") with Steven Skinner, President and Chief
Operating Officer of the Company. The Skinner Employment Agreement has a term
of five years unless terminated earlier by either Mr. Skinner or Holdings. Mr.
Skinner may terminate the Skinner Employment Agreement (i) at any time at his
sole discretion upon 30 days' prior written notice and (ii) immediately, upon
written notice, if (A) there is a Change of Control (as defined in the Skinner
Employment Agreement) or (B) Mr. Skinner is demoted, removed or, prior to the
IPO Date, not re-elected to the Board of Directors of Holdings (as used in
this paragraph, "Good Reason"). Holdings may terminate the Skinner Employment
Agreement (i) at any time, upon written notice, at the sole discretion of
Holdings (as used in this paragraph, "Without Cause") and (ii) for cause or
the death or disability of Mr. Skinner. Mr. Skinner is entitled to certain
benefits from Holdings upon termination of the Skinner Employment Agreement by
Mr. Skinner for Good Reason or by Holdings Without Cause. Mr. Skinner is
entitled to receive from Holdings upon termination of the Skinner Employment
Agreement by Mr. Skinner for Good Reason or by Holdings Without Cause the
following severance benefits: (A) $675,000, (B) up to an additional $337,500
if Mr. Skinner is unable to secure employment in a senior executive capacity
by the second anniversary date of the termination of the agreement, (C) if the
termination occurs prior to February 4, 2001, 50% of all shares of Common
Stock that are unvested under such employment agreement as of such date will
vest and, if the termination occurs between February 4, 2001 and February 3,
2002, 25% will vest and, if the termination occurs after such period, none
will vest and (D) Holdings will allow Mr. Skinner to participate in all
health, dental, disability and other benefit plans maintained by Holdings for
a period of two years following the date of termination of the agreement. In
the event Mr. Skinner's employment is terminated on or after the initial five
year term of the Skinner Employment Agreement, or due to Holdings' failure to
renew the Skinner Employment Agreement, Holdings will pay Mr. Skinner a
severance benefit in the amount of his base salary at such time. The Skinner
Employment Agreement provides for an initial annual base salary of $225,000,
subject to annual increases at the discretion of the Compensation Committee of
the Board of Directors, and an annual bonus in an amount up to 100% of his
base salary based on the Company's performance. Mr. Skinner is also entitled
to acquire shares of Holdings' Series C Preferred Stock pursuant to the Stock
Purchase Plan and is required to invest toward the purchase of such shares 30%
of any amounts he receives on account of an annual bonus in excess of 50% of
his base salary.
61
<PAGE>
On January 8, 1998, Management Co. entered into an employment agreement (the
"Smith Employment Agreement") with Clyde Smith, Executive Vice President and
Chief Technical Officer of the Company. The Smith Employment Agreement has a
term of five years unless terminated earlier by either Mr. Smith or Management
Co. Mr. Smith may terminate the Smith Employment Agreement (i) at any time at
his sole discretion upon 60 days' prior written notice and (ii) upon 60 days'
written notice, in the event that the employment by the Company of each of
Michael Kalogris and Steve Skinner has been terminated during the five year
period (as used in this paragraph, "Good Reason"). Management Co. may
terminate the Smith Employment Agreement (i) at any time, upon 60 days'
written notice, at the sole discretion of Management Co. (as used in this
paragraph, "Without Cause") and (ii) for cause (as defined in the Smith
Employment Agreement) or at the death, or due to a specified period of
disability, of Mr. Smith (as described in the Smith Employment Agreement). Mr.
Smith is entitled to certain benefits from Management Co. upon termination of
the Smith Employment Agreement prior to the termination of five years by Mr.
Smith for Good Reason or by Management Co. Without Cause. Mr. Smith is
entitled to received from Management Co. upon termination of the Smith
Employment Agreement prior to the termination of five years by Mr. Smith for
Good Reason or by Management Co. Without Cause the following severance
benefits: (A) an amount equal to 150% of Mr. Smith's then annual base salary
and (B) vesting of certain of Mr. Smith's unvested shares as follows: (1) the
percentage of unvested shares that would have vested in the year following the
year of his termination and (2) a pro rata amount (based on the number of days
worked that year) of the shares that would have vested in the year of
Mr. Smith's termination. The Smith Employment Agreement provides for an
initial annual base salary of $220,000, subject to annual increases at the
discretion of the Compensation Committee of the Board of Directors, and an
annual bonus in an amount up to 100% of his base salary based on the Company's
performance. After the first calendar year of the Employment Period, the
Company has agreed to pay Mr. Smith a guaranteed bonus of 100% of his base
salary. Mr. Smith has also received 3,762.01 shares of Common Stock, such
shares to vest according to the schedule set forth in a letter agreement dated
as of February 4, 1998, as amended June 29, 1998 between Management Company
and Mr. Smith.
62
<PAGE>
SECURITY OWNERSHIP
The following table sets forth, as of June 30, 1998, certain information
with respect to the beneficial holdings of each director, each of the
executive officers named in the Summary Compensation Table, and all executive
officers and directors as a group, of Holdings, as well as the holding of each
stockholder of Holdings who was known to the Company to be the beneficial
owner, as defined in Rule 13d-3 under the Exchange Act, of more than 5% of the
Common Stock (as defined herein) and the Series C Preferred Stock, based upon
Company records. Shares of Series C Preferred Stock are convertible
immediately into shares of Common Stock on a one-for-one basis, and
accordingly, holders of Series C Preferred Stock are deemed to own the same
number of shares of Common Stock. On all matters to be submitted to the
stockholders of Holdings, the holders of the Series C Preferred Stock have the
right to vote on an as-converted basis as a single class with the holders of
the Common Stock.
<TABLE>
<CAPTION>
SERIES C
COMMON STOCK PREFERRED STOCK TOTAL
------------------------- ------------------------- -------------------------
NAME(1) NUMBER PERCENTAGE NUMBER PERCENTAGE NUMBER PERCENTAGE
------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Michael Kalogris........ 142,672.94(9) 60.7% 5,000 *% 147,672.94 6.3%
Steven Skinner.......... 70,537.30(10) 30.0 2,500 * 73,037.70 3.1
Clyde Smith............. 3,762.01(11) 1.6 -- -- 3,762.01 *
David Clark............. 7,053.27(12) 3.0 -- -- 7,053.27 *
Patricia Gallagher...... 3,526.89(13) 1.5 -- -- 3,526.89 *
Scott Anderson.......... 847.11 * -- -- 847.11 *
John Beletic............ 847.11 * -- -- 847.11 *
Arnold Chavkin(2)....... -- -- -- -- -- --
William Hague........... -- -- -- -- -- --
John Watkins(3)......... -- -- -- -- -- --
CB Capital Investors,
L.P.(4)................ -- -- 507,143.68 24.0 507,143.68 21.6
J.P. Morgan Investment
Corporation(5)......... -- -- 504,715 (15) 23.8 504,715 (15) 21.5
Desai Capital Management
Incorporated(6)........ -- -- 487,094.22(16) 23.0 487,094.22(16) 20.7
Toronto Dominion Capital
(USA), Inc.(7)......... -- -- 121,774.18 5.8 121,774.18 5.2
AT&T Wireless PCS,
Inc.(8)................ -- -- 366,131 (17) 17.3 366,131 (17) 15.6
All directors and
executive officers as a
group.................. 235,125.68(14) 100.0 7,500 * 242,625.68 10.3
</TABLE>
- --------
* Represents less than 1%.
(1) Unless otherwise indicated, the address of each person listed in this
table is c/o Triton PCS, Inc., 101 Lindenwood Drive, Suite 125, Malvern,
PA 19355.
(2) CB Capital Investment Inc. is the sole general partner of CB Capital
Investors, L.P. Mr. Chavkin is a vice president of CB Capital Investments
Inc. Mr. Chavkin disclaims beneficial ownership of any such shares.
(3) Mr. Watkins is a managing director and an officer of J.P. Morgan
Investment Corporation. Mr. Watkins disclaims beneficial ownership of any
such shares.
(4) The address of this person is 380 Madison Avenue, New York, NY 10017.
(5) The address of this person is 101 California Street, San Francisco, CA
94111.
(6) The address of this person is 540 Madison Avenue, New York, NY 10022.
(7) The address of this person is 31 West 52nd Street, New York, NY 10019.
(8) The address of this person is 5000 Carillon Point, Kirkland, WA 98033.
63
<PAGE>
(9) Includes 48,622.67 shares held by Mr. Kalogris as trustee under the
Amended and Restated Common Stock Trust Agreement for Management
Employees and Independent Directors, dated June 26, 1998 (the "Common
Stock Trust Agreement"), pursuant to which the Company will distribute
Common Stock to management employees and independent directors. 84,645.24
of the 94,050.27 shares of Common Stock directly held by Mr. Kalogris are
subject to forfeiture in accordance with the Kalogris Employment
Agreement over a five year period.
(10) 63,483.93 of the 70,537.70 shares of Common Stock are subject to
forfeiture in accordance with the Skinner Employment Agreement over a
five year period.
(11) All 3,762.01 shares of Common Stock are subject to forfeiture in
accordance with the Smith Employment Agreement over a five year period.
(12) All 7,053.77 shares of Common Stock are subject to forfeiture in
accordance with the letter agreement, dated as of February 4, 1998,
between the Company and Mr. Clark, as amended on June 29, 1998.
(13) All 3,526.89 shares of Common Stock are subject to forfeiture in
accordance with the letter agreement, dated as of February 4, 1998,
between the Company and Ms. Gallagher, as amended on June 29, 1998. Ms.
Gallagher resigned from the Company on August 14, 1998 (to be effective
September 4, 1998). In connection with the termination of her employment,
as of September 4, 1998 Ms. Gallagher's share ownership in Holdings will
be reduced to 1,410.76 shares, and such shares will vest 50% on February
4, 1999 and 50% on February 4, 2000. The remaining 2,116.13 shares will
be sold back to the Company and will be eligible for distribution to
management members and independent directors of Holding as pursuant to
the Amended and Restated Common Stock Trust Agreement Employees and
Independent Directors, dated June 26, 1998.
(14) See footnotes (9)-(13). Also includes 5,878.15 shares of Common Stock
held by certain management employees subject to forfeiture in accordance
with letter agreements, dated as of February 4, 1998, between the Company
and each such management employee, as amended on June 29, 1998.
(15) Includes 25,687 shares of Series C Preferred Stock held by Sixty Wall
Street SBIC Fund, L.P., an affiliate of J.P. Morgan Investment
Corporation.
(16) Consists of 243,547.11 shares of Series C Preferred Stock held by Private
Equity Investors III, L.P., and 243,547.11 shares of Series C Preferred
Stock held by Equity Linked Investors II, each an affiliate of Desai
Capital Management Incorporated.
(17) Consists of 366,131 shares of Series D Preferred Stock. Shares of Series
D Preferred Stock are convertible into an equivalent number of shares of
Series C Preferred Stock at any time. AT&T Wireless PCS, Inc. also owns
732,371 shares of Series A Preferred Stock.
64
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The closing under the Securities Purchase Agreement occurred on February 4,
1998 (the "Securities Purchase Closing Date"). Certain terms under the
Securities Purchase Agreement and the AT&T Agreements were modified pursuant
to the Closing Agreement, dated as of February 4, 1998 (the "Closing
Agreement"), by and among the parties to the Securities Purchase Agreement.
The Securities Purchase Agreement and the AT&T Agreements are summarized below
as modified by the Closing Agreement. The following summary of the material
provisions of the Securities Purchase Agreement and the AT&T Agreements does
not purport to be complete and is qualified in its entirety by reference to
such agreements. Copies of the Securities Purchase Agreement and the AT&T
Agreements will be made available to prospective investors as set forth under
the caption "Available Information."
THE SECURITIES PURCHASE AGREEMENT
Pursuant to the Securities Purchase Agreement, dated as of October 8, 1997
(the "Securities Purchase Agreement"), by and among AT&T PCS, the Cash Equity
Investors, Michael Kalogris, Steven Skinner (Steven Skinner together with
Michael Kalogris, the "Management Stockholders") and Holdings, AT&T
transferred to Triton the PCS Licenses, which cover 20 MHz of authorized
frequencies, and entered into certain other agreements, in exchange for
732,371 shares of Series A Preferred Stock and 366,131 shares of Series D
Preferred Stock. AT&T has retained 10 MHz of spectrum within the Licensed
Areas for use as a non-mobility wireless provider.
The Cash Equity Investors have severally made irrevocable commitments to
contribute to Holdings $139.3 million in cash in exchange for 1,392,500 shares
of Series C Preferred Stock, and the Management Stockholders have severally
made irrevocable commitments to contribute to Holdings $750,000 in cash in
exchange for 7,500 shares of Series C Preferred Stock. The Cash Equity
Investors, together with the Management Stockholders, have contributed an
aggregate of $45 million of their $140 million commitment as of the date
hereof. The Cash Equity Investors and the Management Stockholders are required
to contribute the unfunded portion of their respective commitments under the
Securities Purchase Agreement (the "Unfunded Commitment Amount") to Holdings
on the first, second, and third anniversary dates of the Securities Purchase
Closing Date. Each Cash Equity Investor's obligation to make capital
contributions to Holdings after the Securities Purchase Closing Date in
respect of its Unfunded Commitment Amount is (i) an unconditional and
irrevocable obligation, and is not subject to counterclaim, set-off, deduction
or defense, or to abatement, suspension, deferment, diminution or reduction
for any reason whatsoever and (ii) secured by a pledge of all shares of Series
C Preferred Stock issued to such party under the Securities Purchase Agreement
pursuant to a pledge agreement between Holdings and such party.
THE MYRTLE EQUITY CONTRIBUTION
Pursuant to a Preferred Stock Purchase Agreement, dated as of June 29, 1998,
Holdings has received additional equity contributions of $35 million in the
aggregate from the Cash Equity Investors in exchange for 350,000 shares of
Series C Preferred Stock on terms substantially similar to those set forth in
the Securities Purchase Agreement. These contributions were concurrently
contributed to Triton.
THE NORFOLK COMMITMENT
Holdings has received additional non-binding equity commitments of
$16.5 million from certain of the Cash Equity Investors in order to fund a
portion of the $105 million purchase price for the Norfolk Acquisition. These
commitments are contingent on the execution of definitive documentation with
respect to such equity financing. In consideration therefor, at the closing of
such acquisition, Holdings expects to issue to such Cash Equity Investors an
additional $16.5 million of Holdings' Series C Preferred Stock which is
intended to be contributed to the Company. At such closing, Holdings is also
expected to issue to AT&T PCS an additional $13.5 million of Holdings'
Series D Preferred Stock. The balance of the purchase price is expected to be
financed through use of $75 million from the net proceeds of the Private
Offering.
65
<PAGE>
THE GEORGIA/NORTH CAROLINA COMMITMENT
Holdings has also received non-binding commitments from the Cash Equity
Investors for an additional $25 million equity contributions relating to the
potential acquisition of additional PCS licenses covering sections of Georgia
and North Carolina. The Company expects to use the additional equity
contributions in the build-out of the areas covered by such additional PCS
licenses. These commitments are contingent on the execution of definitive
documentation with respect to, and the consummation of, such potential
acquisition.
THE AT&T AGREEMENTS
The Stockholders' Agreement
General. Pursuant to the Stockholders' Agreement, dated as of February 4,
1998 (the "Stockholders' Agreement"), by and among AT&T PCS, the Cash Equity
Investors, the Management Stockholders, David Clark, Clyde Smith, Patricia
Gallagher, David Standig and Michael Mears (collectively the "Other Management
Stockholders" and, together with AT&T PCS, the Cash Equity Investors and the
Management Stockholders, the "Stockholders") and Holdings, the Stockholders
and Holdings have agreed to certain matters in connection with the management
and operations of the Company and the sale, transfer or other disposition of
the capital stock of Holdings.
Board of Directors. Holdings is governed by a board of directors (the "Board
of Directors") consisting of seven persons, and, unless otherwise required,
actions of the Board of Directors require the affirmative vote of a majority
of the entire Board of Directors. The Stockholders have agreed to vote for the
seven persons as follows: (i) two directors selected by a majority in interest
of Common Stock and securities convertible into Common Stock held by the Cash
Equity Investors in their sole discretion, (ii) two directors selected by a
majority in interest of Common Stock and securities convertible into Common
Stock held by the Cash Equity Investors, which directors shall be acceptable
to Michael Kalogris and Steven Skinner, on the one hand, and AT&T PCS, on the
other hand, each in their sole discretion, (iii) Michael Kalogris so long as
he is an officer of Holdings, (iv) Steven Skinner so long as he is an officer
of Holdings, and (v) one director (the "Series A Director") selected by AT&T
PCS in its capacity as holder of the Series A Preferred Stock so long as it
has the right to elect one director in accordance with the Restated
Certificate of Incorporation (as defined herein). Representatives of AT&T PCS
and certain Cash Equity Investors also have the right to attend each meeting
of the Board of Directors as observers, provided that certain capital stock
ownership thresholds are met. Any transactions between the Company and the
Stockholders (other than the AT&T Agreements and other arms-length agreements
or transactions entered into from time to time between the Company and AT&T)
must be approved by a majority of disinterested directors. Under the
Stockholders' Agreement, the two directors selected pursuant to clause (ii)
above of this paragraph are deemed not to have been designated by any of the
Stockholders. If an executive committee of the Board of Directors is formed,
it must consist of at least the Series A Director, one of the directors
selected pursuant to clause (i) above of this paragraph and Michael Kalogris
(so long as he is an officer of Holdings). The Cash Equity Investors also have
agreed to contribute all or part of the Unfunded Commitment Amount at any time
to Holdings upon 20 business days' notice from the Board of Directors.
Restrictions on Transfer. The Stockholders' Agreement imposes numerous
restrictions with respect to the sale, transfer or other disposition
(collectively, "Transfer") of the capital stock of Holdings. Generally, prior
to the date on which Holdings receives in excess of $20 million in gross
proceeds from the sale of Common Stock pursuant to a registration statement
under the Securities Act (the "IPO Date"), no Transfers are permitted except:
(i) Series C Preferred Stock, Series D Preferred Stock and Common Stock may be
transferred (at any time) (A) to an affiliate of a person that is a transferee
or a successor in interest to any or all of such person's capital stock of
Holdings and that is required to become a party to the Stockholders' Agreement
in accordance with the terms thereof (an "Affiliated Successor") or (B) in the
case of a transfer by a Cash Equity Investor, to any partners, limited
partners or members of a Cash Equity Investor that are transferees of Series C
Preferred
66
<PAGE>
Stock or Common Stock pursuant to distributions in accordance with the
partnership agreement or operating agreement of such Cash Equity Investor (an
"Equity Investor Affiliate"), (ii) after the third anniversary of the
Securities Purchase Closing Date, the Cash Equity Investors may Transfer
Series C Preferred Stock or Common Stock to another Cash Equity Investor, and
(iii) after the third anniversary of the Securities Purchase Closing Date,
Series C Preferred Stock and Common Stock may be transferred to any person
(except a Prohibited Transferee (as defined herein)), subject to certain
rights of first refusal of the non-transferring Stockholders (the "Rights of
First Refusal"). Additionally, prior to the IPO Date, (x) no Cash Equity
Investor nor AT&T PCS may Transfer less than all of its Series C Preferred
Stock or Common Stock to any person except an Affiliated Successor or a Equity
Investor Affiliate unless after giving effect to such Transfer, the transferor
and the transferee will each own at least the lesser of (A) 5% of Common Stock
and (B) one-half of the Common Stock beneficially owned by such transferor on
the date of Transfer, and (y) no Management Stockholder or Other Management
Stockholder (together, the "Employee Stockholders") may effect more that one
Transfer of its Common Stock during any 12-month period to any person other
than an Affiliated Successor.
On and after the IPO Date, no Transfers of Series D Preferred Stock or
Common Stock are generally permitted except: (i) after the third anniversary
of the Securities Purchase Closing Date, the Cash Equity Investors may
Transfer Series C Preferred Stock or Common Stock to another Cash Equity
Investor, (ii) Series D Preferred Stock and Common Stock may be transferred
(at any time) to an Affiliated Successor or an Equity Investor Affiliate and
(iii) Common Stock may be transferred to any person, subject to the Rights of
First Refusal.
AT&T PCS is subject to all of the foregoing restrictions with respect to its
Series C Preferred Stock and Common Stock. AT&T PCS may not Transfer any of
its Series D Preferred Stock at any time other than to an Affiliated
Successor. Finally, with respect to AT&T PCS' Series A Preferred Stock, (a)
prior to the IPO Date, no Transfers are permitted except (i) to an Affiliated
Successor or (ii) to any person after first complying with certain provisions
relating to the Rights of First Refusal, and (b) on or after IPO Date, no
Transfer restrictions exist.
In addition to the foregoing transfer restrictions, each Stockholder has
agreed, subject to certain exceptions, not to Transfer any Series A Preferred
Stock, Series B Preferred Stock (as defined herein), Series D Preferred Stock
or Common Stock to a Prohibited Transferee. A "Prohibited Transferee" is
defined generally as one of the three largest carriers (other than AT&T, or
any person that derives a material portion of its business from wireless
communications systems and utilizes TDMA technology in a substantial majority
of those systems) of telecommunications services that currently constitute
interexchange services.
Registration Rights. The Stockholders' Agreement grants certain demand and
piggyback registration rights to the Stockholders. On or after the 91st day
after the IPO Date, the following Stockholders may cause an underwritten
demand registration, subject to customary pro rata cutback and blackout
restrictions, so long as such registration is reasonably expected to result in
aggregate proceeds of at least $10 million: (a) AT&T PCS, (b) a holder of
shares of Series C Preferred Stock or Common Stock (if such registration is
reasonably expected to result in aggregate gross proceeds of at least $25
million) or (c) Employee Stockholders beneficially owning at least 50.1% of
the shares of Common Stock then beneficially owned by the Employee
Stockholders. In addition to such demand registration rights, any Stockholder
may piggyback on a registration by Holdings at any time (other than
registrations on Forms S-4 or S-8 of the Securities Act), subject to customary
pro rata cutback restrictions. The demand and piggyback registration rights
and obligations survive 20 years.
Furthermore, if the IPO Date has not occurred by the fifth anniversary of
the Securities Purchase Closing Date, Holdings, at the request of (i) any
holders beneficially owning in the aggregate greater than one-third of the
Series C Preferred Stock and Common Stock then outstanding or (ii) AT&T PCS
for so long as it beneficially owns greater than two-thirds of the initial
issuance to AT&T PCS of Series A Preferred Stock, shall undertake a
registration of Common Stock that results in the IPO Date.
Preemptive Rights. The Stockholders' Agreement grants preemptive rights in
certain circumstances to the Stockholders. If, on or prior to the IPO Date,
Holdings proposes to issue any equity security (including in an initial public
offering, but excluding pursuant to any stock option or stock appreciation
rights plan), for cash, each Stockholder shall have a preemptive right to
purchase its pro rata portion of such securities.
67
<PAGE>
Exclusivity. Holdings and the Stockholders have also reached several
agreements regarding operational matters pertaining to the Company. The
Stockholders have agreed that during the term of the Stockholders' Agreement,
none of the Stockholders nor their respective affiliates will provide or
resell, or act as the agent for any person offering, within the Territory (as
defined in the Stockholders' Agreement) mobile wireless telecommunications
services initiated or terminated using TDMA and frequencies licensed by the
FCC ("Company Communications Services"), except AT&T PCS and its affiliates
may (i) resell or act as agent for the Company in connection with the
provision of Company Communications Services, (ii) provide or resell wireless
telecommunications services to or from certain specific locations, and (iii)
assuming consummation of the Norfolk Acquisition, resell Company
Communications Services for another person in any area where the Company has
not yet placed a system into commercial service; provided that AT&T PCS has
provided the Company with prior written notice of AT&T PCS' intention to do so
and only dual band/dual mode phones are used in connection with such resale
activities. Additionally, with respect to the markets listed on the Roaming
Agreement, each of the Company and AT&T PCS agrees to cause their respective
affiliates in their home carrier capacities to (a) program and direct the
programming of customer equipment so that the other party in its capacity as
the serving carrier is the preferred provider in such markets, and (b) refrain
from inducing any of its customers to change such programming.
Build-Out. The Company is bound to certain operational obligations,
including meeting the construction requirements set forth in an agreed-upon
minimum build-out plan, ensuring compatibility of the Company's PCS systems
with the majority of systems in the southeastern region of the United States,
satisfying the FCC construction requirements in the Territory, offering
certain core service features with respect to its systems, causing the
Company's systems to comply with AT&T PCS' TDMA quality standards, and
refraining from providing or reselling interexchange services other than
interexchange services that constitute Company Communications Services or that
are procured from AT&T. In the event that the Company materially breaches any
of the foregoing operational obligations or if, in the event AT&T PCS decides
to adopt in a majority of its markets a new technology standard and the
Company declines to adopt such new technology, AT&T PCS may terminate its
exclusivity obligations.
Certain Transactions. In the event a merger, consolidation, asset
acquisition or disposition or other business combination involving (i) AT&T
and (ii) a person that (a) derives from telecommunications businesses annual
revenues in excess of $5 billion, (b) derives less than one-third of its
aggregate revenues from the provision of wireless telecommunications and (c)
owns FCC Licenses to offer (and does offer) mobile wireless telecommunications
services serving more than 25% of the Pops within the Territory (such person,
the "Other Party"), the Company and AT&T have certain rights, including the
following: (i) AT&T may, upon written notice, terminate certain of its
obligations described above under the caption "--Exclusivity" in the portion
of the Territory in which the Other Party owns an FCC License to offer CMRS;
provided, that, upon such termination, the Company has the right to cause AT&T
PCS to exchange (A) certain shares of its Series A Preferred Stock into Series
B Preferred Stock and (B) certain shares of its Series D Preferred Stock (or
Series C Preferred Stock or Common Stock into which such Series D Preferred
Stock has been converted) into Series B Preferred Stock; (ii) if AT&T PCS
proposes to sell, transfer or assign to any non-affiliate any PCS system owned
and operated by AT&T PCS and its affiliates in any of the Charlotte, NC,
Atlanta, GA, Baltimore/Washington, D.C. or Richmond, VA BTAs (the "Subject
Markets"), then AT&T PCS will provide the Company with the opportunity for a
180-day period to have AT&T PCS joint market with the applicable Subject
Markets the portion of the Territory included in the MTA that includes such
Subject Markets.
Without the prior written consent of AT&T PCS, Holdings and its subsidiaries
may not effect any sale of substantially all of the assets of Holdings or any
of its subsidiaries or liquidation, merger or consolidation of Holdings or any
of its subsidiaries, with certain limited exceptions.
Acquisition of Licenses. The Company may acquire cellular licenses that the
Board of Directors has determined are demonstrably superior alternatives to
constructing a PCS system in the applicable area within the Territory,
provided that: (i) a majority of the cellular Pops are within the Territory,
(ii) AT&T PCS and its affiliates do not own CMRS licenses in such area, and
(iii) the Company's ownership of such cellular license will not cause AT&T PCS
or any affiliate to be in breach of any law or contract.
68
<PAGE>
Equipment, Discounts and Roaming. If requested by the Company, AT&T PCS has
agreed to use all commercially reasonable efforts (i) to assist the Company in
obtaining discounts from any vendor with whom the Company is negotiating for
the purchase of any infrastructure equipment or billing services and (ii) to
enable the Company to become a party to the roaming agreements between AT&T
PCS and its affiliates and operators of other cellular and PCS systems.
Resale Agreements. The Company, upon the request of AT&T PCS, will enter
into resale agreements relating to the Territory. The rates, terms and
conditions of service provided by the Company shall be at least as favorable
to AT&T PCS, taken as a whole, as the rates, terms and conditions provided by
the Company to other customers.
Subsidiaries. All of Holdings' subsidiaries must be direct or indirect
wholly-owned subsidiaries of Holdings.
Amendments. Amendments to the Stockholders' Agreement require the consent of
holders of (i) a majority of the shares of each class of capital stock,
including AT&T PCS, (ii) two-thirds of the Common Stock beneficially owned by
the Cash Equity Investors, and (iii) 60.1% of the Common Stock beneficially
owned by the Employee Stockholders; provided however, that in the event any
party thereto ceases to own any shares of Equity Securities, such party ceases
to be a party to the Stockholders' Agreement and the rights and obligations of
such party thereunder terminates.
Termination. The Stockholders' Agreement terminates upon the earliest to
occur of (i) the written consent of each party thereto, (ii) the eleventh
anniversary of the Securities Purchase Closing Date, and (iii) one Stockholder
owning all the Common Stock; provided, some provisions expire on the IPO Date
and certain consent rights of AT&T PCS expire when it fails to own the
requisite amount of capital stock of Holdings.
License Agreement
Pursuant to the Network Membership License Agreement, dated as of February
4, 1998 (the "License Agreement"), between AT&T Corp. and Operating LLC, AT&T
Corp. has granted to the Company a royalty-free, non-transferable, non-
sublicensable, non-exclusive, limited right and license to use the Licensed
Marks solely in connection with Licensed Activities. The Licensed Marks
include the logo containing the AT&T and globe design and the expression
"Member, AT&T Wireless Services Network." The "Licensed Activities" include
(i) the provision to end-users and resellers, solely within the Territory, of
Company Communications Services on frequencies licensed to the Company for
CMRS provided in accordance with the AT&T Agreements (collectively, the
"Licensed Services") and (ii) marketing and offering the Licensed Services
within the Territory. The License Agreement also grants to the Company the
right and license to use Licensed Marks on certain permitted mobile phones.
Except in certain instances, AT&T has agreed not to grant to any other
person a right or license to provide or resell, or act as agent for any person
offering, Company Communications Services within the Territory under the
Licensed Marks. In all other instances, AT&T reserves for itself the right to
use the Licensed Marks in the providing of its services (subject to its
exclusivity obligations described above), whether within or without the
Territory.
The License Agreement contains numerous restrictions with respect to the use
and modification of any of the Licensed Marks. Furthermore, the Company is
obligated to use commercially reasonable efforts to cause all Licensed
Services marketed and provided using the Licensed Marks to be of comparable
quality to the Licensed Services marketed and provided by AT&T in areas that
are comparable to the Territory taking into account, among other things, the
relative stage of development of the areas. The License Agreement also sets
forth specific testing procedures to determine compliance with these
standards, and affords the Company with a grace period to cure any instances
of alleged noncompliance therewith. Following the cure period, the Company
must cease using the Licensed Marks until the Company is back in compliance.
69
<PAGE>
The Company may not assign or sublicense any of its rights under the License
Agreement; provided, however, that the License Agreement may be, and has been,
assigned to the Company's lenders under the Credit Facility and after the
expiration of any applicable grace and cure periods under the Credit Facility,
such lenders may enforce the Company's rights under the License Agreement and
assign the License Agreement to any person with AT&T's consent.
The term of the License Agreement is for five years (the "Initial Term") and
renews for an additional five-year period if neither party terminates the
Agreement. The License Agreement may be terminated by AT&T at any time in the
event of a significant breach by the Company, including the Company's misuse
of any Licensed Marks, the Company licensing or assigning any of the rights in
the License Agreement, the Company's failure to maintain AT&T's quality
standards or a change in control of the Company occurs. After the Initial
Term, in the event AT&T converts any shares of Series A Preferred Stock into
Common Stock in connection with a transaction described above under the
caption "--Stockholders' Agreement--Certain Transactions," the License
Agreement terminates on the later of (i) two years from the date of such
conversion and (ii) the then existing expiration date of the License
Agreement. After the Initial Term, AT&T may also terminate the License
Agreement upon the occurrence of certain transactions described above under
the caption "--Stockholders' Agreement--Certain Transactions."
Roaming Agreement
Pursuant to the Intercarrier Roamer Service Agreement, dated as of February
4, 1998 (the "Roaming Agreement"), between AT&T Wireless Service, Inc. (on
behalf of its affiliates) and Operating LLC (on behalf of the Company), each
of AT&T and the Company agrees to provide (each in its capacity as serving
provider, the "Serving Provider") mobile wireless radiotelephone service for
registered customers of the other party's (the "Home Carrier") customers while
such customers are out of the Home Carrier's geographic area and in the
geographic area where the Serving Carrier (itself or through affiliates) holds
a license or permit to construct and operate a mobile wireless radiotelephone
system and station. Each Home Carrier whose customers receive service from a
Serving Carrier shall pay to such Serving Carrier 100% of the Serving
Carrier's charges for wireless service and 100% of pass-through charges (i.e.,
toll or other charges). Each Service Carrier's service charges per minute or
partial minute for the use for the first 3 years will be fixed at a declining
rate, and thereafter will be equal to an adjusted average home rate or such
lower rate as the parties negotiate from time to time provided, however, that
with respect to the Norfolk BTA (assuming consummation of the Norfolk
Acquisition), the service rate is equal to the lesser of (a) $0.25 per minute
and (b) the applicable home rate of AT&T PCS, or such other rate as agreed to
by the parties. Each Serving Carrier's toll charges per minute of use for the
first 3 years will be fixed at a declining rate, and thereafter such other
rates as the parties negotiate from time to time.
The Roaming Agreement has a term of 20 years, unless earlier terminated by a
party due to the other party's uncured breach of any term of the Roaming
Agreement, the other party's voluntary liquidation or dissolution or the FCC
revoking or denying renewal of the other party's license or permit to provide
CMRS.
Neither party may assign or transfer the Roaming Agreement or any of its
rights thereunder except to an assignee of all or part of its license or
permit to provide CMRS, provided that such assignee expressly assumes all or
the applicable part of the obligations of such party under the Roaming
Agreement.
Resale Agreement
Pursuant to the terms of the Stockholders' Agreement, the Company is
required to enter into a Resale Agreement, substantially in the form of
Exhibit C to the Securities Purchase Agreement (the "Resale Agreement" and,
together with the Stockholders' Agreement, the License Agreement and the
Roaming Agreement, the "AT&T Agreements"), at the request of AT&T. Pursuant to
the Resale Agreement, AT&T PCS will be granted the right to purchase and
resell on a nonexclusive basis access to and usage of the Company's services
in the Territory. AT&T PCS will pay to the Company the charges, including
usage and roaming charges, associated with services requested by AT&T PCS
under the Resale Agreement. The Company will retain the continuing right to
market and sell its services to customers and potential customers in
competition with AT&T PCS.
70
<PAGE>
The Resale Agreement will have a term of ten years and will renew
automatically for successive one-year periods unless either party elects to
terminate the Resale Agreement. Following the eleventh anniversary of the
Resale Agreement, either party may terminate on 90 day prior written notice.
Furthermore, AT&T PCS may terminate the Resale Agreement at any time for any
reason on 180 days written notice.
Pursuant to the Stockholders' Agreement, Holdings has agreed that the rates,
terms and conditions of service, taken as a whole, provided by the Company to
AT&T PCS pursuant to the Resale Agreement shall be at least as favorable as
(or if permitted by applicable law, superior to) the rates, terms and
conditions of service, taken as a whole, provided by the Company to any other
customer. Without limiting the foregoing, the rate plans offered by the
Company pursuant to the Resale Agreement will be designed to result in a
discounted average actual rate per minute paid by AT&T PCS for service below
the weighted average actual rate per minute billed by the Company to its
customers generally for access and air time.
Neither party may assign or transfer the Resale Agreement or any of its
rights thereunder without the other party's prior written consent, which will
not be unreasonably withheld, except (a) to an affiliate of that party at the
time of execution of the Resale Agreement, (b) by the Company to any of its
operating subsidiaries, and (c) to the transferee of a party's stock or
substantially all of its assets, provided that all FCC and other necessary
approvals have been received.
OTHER RELATED PARTY TRANSACTIONS
Over the course of fiscal year 1997, L.L.C., a predecessor of Triton,
incurred certain costs on behalf of Triton Cellular, an entity affiliated with
the Company by virtue of management overlap and sharing of leased facilities.
Such costs totaled $148,100 and will be reimbursed by Triton Cellular in 1998.
See "Risk Factors--Dependence on Key Personnel." In addition, the Company
purchased $22,800 of equipment from Horizon Cellular Telephone Company, L.P.
("Horizon Cellular"), an entity affiliated with the Company by virtue of
management overlap and the sharing of leased facilities.
On February 3, 1998, the Company entered into the Credit Facility. Certain
affiliates of each of J.P. Morgan Investment Corporation, a holder of
approximately 20% of the issued and outstanding capital stock of the Company,
and CB Capital Investors, a holder of approximately 24% of the issued and
outstanding capital stock of the Company, serve as agent and lenders under the
Credit Facility. Each of the agent and lenders under the Credit Facility have
received customary fees and expenses in connection with the execution of the
Credit Facility.
On February 4, 1998, the Company entered into letter agreements with Messrs.
Clark, Standig and Mears, and Ms. Gallagher in connection with their
employment. Pursuant to such letter agreements they were issued shares of
Common Stock which vest at 20 percent per year over a five year period.
Messrs. Clark, Standig, and Mears received 7,053.77, 3,526.89, and 2,351.26,
respectively, and Ms. Gallagher received 3,526.89. See "Security Ownership."
At various dates in 1997, certain private equity investors provided $1.6
million in financing to L.L.C. in the form of convertible promissory notes.
The notes originally bore interest at 14% annually, payable at maturity. On
January 15, 1998, L.L.C. assigned the notes to the Company. Triton, in
conjunction with Holdings and the noteholders, subsequently negotiated a
revised arrangement under which no interest would be paid on the notes which
became convertible into approximately $3.2 million worth of Holdings' Series C
Preferred Stock. The conversion of the L.L.C. notes into Holdings equity
occurred on February 4, 1998. The $1.6 million preferred return to the
investors has been accounted for as a financing cost during the period the
notes were outstanding. Accordingly, the Company has accrued $1.2 million in
financing costs on the notes as of December 31, 1997. The remaining $0.4
million financing costs were recognized in the first quarter of calendar 1998.
71
<PAGE>
On January 19, 1998, Operating LLC entered into the Master Services
Agreement with Wireless Facilities Inc. ("WFI") pursuant to which WFI will
provide RF design and system optimization support services to the Company. The
Master Services Agreement could result in payments by the Company to WFI of up
to$6.0 million. Mr. Scott Anderson, a director of Holdings, is also a director
of WFI.
On May 4, 1998, the Company consummated the Private Offering pursuant to
which the Company raised net proceeds of approximately $290 million. J.P.
Morgan Securities Inc. and Chase Securities Inc., each an affiliate of
entities that own in the aggregate approximately 48.3% of the outstanding
Series C Preferred Stock, acted as initial purchasers in connection with the
Private Offering and received a placement fee of $6.3 million in connection
therewith.
DESCRIPTION OF CREDIT FACILITY
On February 3, 1998 (the "Credit Facility Effective Date"), Triton entered
into a $425 million Credit Facility (as amended, the "Credit Facility") with
Holdings, The Chase Manhattan Bank, as Administrative Agent, and certain banks
and other financial institutions party thereto. The Credit Facility provides
for (i) a $175 million senior secured term loan (the "Tranche A Term Loan")
which matures on the date that is eight and one-half years from the Credit
Facility Effective Date, (ii) a $150 million senior secured term loan (the
"Tranche B Term Loan" and, together with the Tranche A Term Loan, the "Term
Loans") which matures on the date that is nine and one-quarter years from the
Credit Facility Effective Date and (iii) a $100 million senior secured
revolving credit facility (the "Revolving Credit Facility" and, together with
the commitments to make the Term Loans, the "Facilities") which matures on the
date that is eight and one-half years from the Credit Facility Effective Date.
The Credit Facility also provides for letters of credit in an aggregate face
amount not to exceed $3 million outstanding at any one time.
The commitment to make loans under the Revolving Credit Facility ("Revolving
Credit Loans" and, together with the Term Loans, the "Loans") automatically
and permanently reduces, beginning on the date that is six years and six
months after the Credit Facility Effective Date, in eight quarterly reductions
(the amount of each of the first two reductions, $5 million, the next four
reductions, $10 million, and the last two reductions, $25 million). The
Tranche A Term Loans are required to be repaid, beginning on the date that is
four years after the Credit Facility Effective Date, in eighteen consecutive
quarterly installments (the amount of each of the first four installments,
$4,375,000, the next four installments, $6,562,500, the next four
installments, $8,750,000, the next four installments, $10,937,500, and the
last two installments, $26,250,000). The Tranche B Term Loans are required to
be repaid, beginning on the date that is four years after the Credit Facility
Effective Date, in twenty-one consecutive quarterly installments (the amount
of each of the first sixteen installments, $375,000, the next four
installments, $7,500,000, and the last installment, $114 million).
Interest on all Loans accrues, at Triton's option, either at (i) (a) a LIBO
rate multiplied by a fraction, the numerator of which is the number one and
the denominator of which is the number one minus the aggregate of the maximum
reserve percentages (including any marginal, special, emergency or
supplemental reserves) expressed as a decimal established by the Board of
Governors of the Federal Reserve System which the Administrative Agent is
subject for eurocurrency funding, plus (b) the Applicable Rate (as defined
below) (Loans bearing interest described in (i), "Eurodollar Loans") or (ii)
(a) the higher of (1) the Administrative Agent's prime rate and (2) the
Federal Funds Effective Rate (as defined in the Credit Facility) plus 0.5%,
plus (b) the Applicable Rate (Loans bearing interest described in (ii), "ABR
Loans"). At June 30, 1998, the rates under (i) and (ii) were 8.675% and 10.25%
respectively. Interest on any overdue amounts will be at a rate per annum
equal to 2% plus the rate otherwise applicable to such amount. The Applicable
Rate means, with respect to Tranche B Term Loans, 1.75% per annum, in the case
of an ABR Loan, and 3.00% per annum, in the case of a Eurodollar Loan, and,
with respect to Tranche A Term Loans and Revolving Credit Loans, a rate
between 0.0% to 1.25% per annum (depending on the level of the Company's ratio
of debt to EBITDA), in the case of an ABR Loan, and a rate between 1.00% and
2.25% per annum (depending on the level of the Company's ratio of debt to
EBITDA), in the case of a Eurodollar Loan.
72
<PAGE>
The Credit Facility requires an annual commitment fee of between 0.375% and
0.50% (depending on the level of the Company's ratio of debt to EBITDA) of the
unused portion of the Facilities payable quarterly in arrears and a separate
agent's fee payable to the Administrative Agent. The Credit Facility also
requires Triton to purchase one or more interest rate hedging contracts
covering an amount equal to at least 60% of the total amount of the
outstanding indebtedness of Triton. To date, the Company has not been required
to purchase any interest rate hedges due to the percentage of fixed interest
rate borrowings in its debt portfolio.
The Term Loans will be prepaid and commitments under the Revolving Credit
Facility reduced in an aggregate amount equal to (i) 50% of excess cash flow
of each fiscal year commencing the fiscal year ending December 31, 2001, (ii)
100% of the net proceeds of asset sales outside the ordinary course of
business, in excess of a $1 million yearly threshold, or unused insurance
proceeds, (iii) 100% of the net cash proceeds in excess of the initial $150
million of issuances of debt obligations (other than the issuance of the Notes
pursuant to the Private Offering) and (iv) 50% of the net cash proceeds of
issuances of equity securities (other than in connection with the Cash
Equity); provided, that the prepayments and reductions set forth under clauses
(iii) and (iv) will not be required if, after giving effect to such issuance,
(a) Triton's ratio of senior debt to EBITDA would be less than 5 to 1 and (b)
Triton would be in pro forma compliance with certain covenants in the Credit
Facility. In addition, in the event (i) the acquisition of the Norfolk Pops is
not consummated by December 31, 1998 or (ii) the acquisition of the
Georgia/North Carolina Pops is not consummated by December 31, 1998, the
Company must prepay obligations under the Term Loans and reduce commitments
under the Revolving Credit Facility in an amount equal to $75 million, in each
case.
All obligations of Triton under the Credit Facility are unconditionally and
irrevocably guaranteed (the "Bank Facility Guarantees") by Holdings and each
existing and subsequently acquired or organized domestic subsidiary of Triton.
The Facilities and the Bank Facility Guarantees, and any related hedging
contracts provided by the lenders under the Credit Facility, are secured by
substantially all of the assets of Triton and each existing and subsequently
acquired or organized domestic subsidiary of Triton, including a first
priority pledge of all of the capital stock held by Holdings or Triton, or any
of its subsidiaries; provided that the pledge of shares of foreign
subsidiaries may be limited to 65% of the outstanding shares of such foreign
subsidiaries. The PCS Licenses are held by License LLC, a single purpose
subsidiary of Triton, and have not been pledged to secure the obligations of
Triton under the Credit Facility; however the membership interests of License
LLC have been pledged to secure the obligations of Triton under the Credit
Facility. Each single purpose subsidiary will not be allowed by Triton to
incur any liabilities or obligations other than the Bank Facility Guarantee
issued by it, the security agreement entered into by it in connection with the
Credit Facility, and, in the case of any single purpose subsidiary established
to hold real estate, liabilities incurred in the ordinary course of business
of such subsidiary which are incident to being the lessee of real property or
the purchaser, owner or lessee of equipment and taxes and other liabilities
incurred in the ordinary course in order to maintain its existence.
The Credit Facility contains covenants customary for facilities and
transactions similar to the Credit Facility, including covenants relating to
the amounts of indebtedness that Triton may incur, limitations on dividends
and distributions on, and redemptions and repurchases of, capital stock and
other similar payments and various financial maintenance covenants. The Credit
Facility also contains covenants relating to the number of Pops covered by the
Company's network and number of customers and customary representations,
warranties, indemnities, conditions precedent to borrowing, and events of
default.
Loans under the Credit Facility are available to fund capital expenditures
related to the construction of the Company's PCS network, the acquisition of
related businesses, working capital needs of the Company and customer
acquisition costs.
73
<PAGE>
DESCRIPTION OF NOTES
As used below in this "Description of Notes" section, the "Company" means
Triton PCS, Inc. but not any of its subsidiaries. The Exchange Notes are to be
issued under an Indenture, dated as of May 4, 1998 (the "Indenture"), between
the Company, the Guarantors and PNC Bank, National Association, as Trustee
(the "Trustee"). The Exchange Notes (hereinafter referred to as "Exchange
Notes" or "Notes") will evidence the same indebtedness as the Private Notes
(which they replace) and will be entitled to the benefits of the Indenture.
The form and terms of the Exchange Notes are the same as the form and terms of
the Private Notes except that (i) the Exchange Notes will have been registered
under the Securities Act, and, therefore, the Exchange Notes will not bear
legends restricting the transfer thereof and (ii) Holders of the Exchange
Notes will not be entitled to certain rights of Holders of Private Notes under
the Registration Rights Agreement, which rights will terminate upon the
consummation of the Exchange Offer. The Indenture and the Registration Rights
Agreement are attached as exhibits hereto. The terms of the Notes include
those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"). The Exchange Notes are subject to all such terms, and Holders of the
Exchange Notes are referred to the Indenture and the Trust Indenture Act for a
statement thereof. A copy of the proposed form of the Indenture and the
Registration Rights Agreement described below will be made available to
prospective investors upon request. The statements under this caption relating
to the Exchange Notes, the Indenture and the Registration Rights Agreement are
summaries and do not purport to be complete, and where reference is made to
particular provisions of the Indenture or the Registration Rights Agreement,
such provisions, including the definitions of certain terms, are qualified in
their entirety by such reference. In addition, certain defined terms used in
the Indenture and in the Prospectus appear in "Glossary of Selected Terms" and
"--Certain Definitions."
The Notes will be general unsecured obligations of the Company, limited to
$450 million of gross proceeds, of which $300 million of gross proceeds were
offered in the Private Offering. Additional amounts of Notes may be issued in
one or more series from time to time subject to the limitations set forth
under "Covenants--Limitations on Incurrence of Indebtedness." All such
additional Notes shall be treated as a single series for all purposes under
the Indenture. The Notes will be senior subordinated obligations of the
Company, subordinated in right of payment to all Senior Debt of the Company.
The Notes will be issued only in fully registered form, without coupons, in
denominations of $1,000 and any integral multiple thereof. No service charge
will be made for the registration of transfer or exchange of Notes, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. Initially, the Trustee
will act as paying agent and registrar for the Notes.
PRINCIPAL, MATURITY AND INTEREST
The Notes will mature on May 1, 2008. Cash interest will not be required to
accrue or be payable on the Notes prior to May 1, 2003. Cash interest will
accrue at the rate per annum shown on the cover page hereof, except as noted
under "--Registration Rights," from May 1, 2003 and will be payable semi-
annually on May 1 and November 1 of each year, commencing November 1, 2003, to
the Person in whose name a Note is registered (a "Holder") at the close of
business on the preceding April 15 or October 15 (each, a "Record Date"), as
the case may be. Cash 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
May 1, 2003. Cash interest on the Notes will be computed on the basis of a
360-day year of twelve 30-day months. Holders must surrender the Notes to the
paying agent for the Notes to collect principal payments. At the Company's
option principal and interest may be paid at the Trustee's corporate trust
office or by check mailed to a holder's registered address.
OPTIONAL REDEMPTION
The Notes will be subject to redemption, at the option of the Company, in
whole or in part, at any time on or after May 1, 2003 and prior to maturity,
upon not less than 30 nor more than 60 days' notice mailed to each Holder of
Notes to be redeemed at its address appearing in the register for the Notes,
in amounts of $1,000 or an integral multiple of $1,000, at the following
redemption prices (expressed as percentages of principal amount),
74
<PAGE>
plus accrued interest, if any, to but excluding the date fixed for redemption
(subject to the right of Holders on the relevant Record Date to receive
interest, if any, due on an interest payment date that is on or prior to the
date fixed for redemption), if redeemed during the 12-month period beginning
on May 1 of the years indicated:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
---- ----------
<S> <C>
2003........................................................... 105.50%
2004........................................................... 103.67%
2005........................................................... 101.84%
2006 and thereafter............................................ 100.00%
</TABLE>
In addition, on or prior to May 1, 2001, the Issuers may redeem up to 35% of
the principal amount at maturity of Notes issued under the Indenture at a
redemption price equal to 111% of the Accreted Value to the redemption date
with the net proceeds of one or more Equity Offerings of Qualified Stock of
(i) the Company, (ii) Triton PCS Holdings, Inc. or (iii) a special purpose
corporation (a "Special Purpose Corporation") formed to own Qualified Stock of
the Company or Triton PCS Holdings, Inc., in any such case; provided that at
least 65% of the aggregate principal amount at maturity of Notes issued under
the Indenture would remain outstanding immediately after giving effect to such
redemption. Notice of redemption pursuant to this paragraph must be mailed to
holders of Notes not later than 60 days following the consummation of the
relevant Equity Offering.
Selection of Notes for any partial redemption shall be made by the Trustee,
in accordance with the rules of any national securities exchange on which the
Notes may be listed or, if the Notes are not so listed, pro rata or by lot or
in such other manner as the Trustee shall deem appropriate and fair. Notes in
denominations larger than $1,000 may be redeemed in part but only in integral
multiples of $1,000. Notice of redemption will be mailed before the date fixed
for redemption to each holder of Notes to be redeemed at his or her registered
address. On and after the date fixed for redemption, interest will cease to
accrue on Notes or portions thereof called for redemption.
The Notes will not have the benefit of any sinking fund.
RANKING
The Company's obligations with respect to the payment of the principal of,
premium, if any, and interest (including Additional Interest) on, and all
other obligations in respect of each and all of the Notes shall be
subordinated in right of payment, to the extent and in the manner provided in
the Indenture, to the prior payment in full in cash of all existing and future
Senior Debt of the Company.
Upon any payment or distribution of assets or securities of the Company of
any kind or character (whether in cash, property or securities), upon any
total or partial dissolution or winding up or total or partial liquidation or
reorganization of the Company, whether voluntary or involuntary or in
bankruptcy, insolvency, receivership or other proceedings, all amounts due or
to become due with respect to Senior Debt of the Company (including any
interest accruing subsequent to an event of bankruptcy regardless of whether
such interest is an allowed claim enforceable against the debtor under the
Bankruptcy Code) shall first be paid in full in cash, before the Holders or
the Trustee on their behalf shall be entitled to receive any Note Payment (as
defined below). Before any Note Payment may be made by, or on behalf of, the
Company of the principal of, premium, if any, or interest (including
Additional Interest) on, or any other obligation in respect of, the Notes upon
any such dissolution or winding up or liquidation or reorganization, any
payment or distribution of assets or securities of the Company of any kind or
character, whether in cash, property or securities, to which the Holders or
the Trustee on their behalf would be entitled, but for the subordination
provisions of the Indenture, shall be made by the Company or by any receiver,
trustee in bankruptcy, liquidating trustee, agent or other person making such
payment or distribution, directly to the holders of Senior Debt of the Company
(pro rata to such holders on the basis of the respective amounts of Senior
Debt held by such holders) or their representatives or to the trustee or
trustees under any indenture pursuant to which any such Senior Debt may have
been issued as their respective interests may appear, to the extent necessary
to pay all such Senior Debt in full, in cash, after giving effect to any
concurrent payment, distribution or provision therefor to or for the holders
of such Senior Debt.
75
<PAGE>
No direct or indirect payment, deposit or distribution of any kind or
character, whether in cash, property or securities (including any payment made
to Holders of the Notes under the terms of Indebtedness subordinated to the
Notes, but excluding any payment or distribution of Permitted Junior
Securities) by or on behalf of the Company of principal of, premium, if any,
or interest (including Additional Interest) on, or any other obligation in
respect of, the Notes (other than payments to Holders from funds held in trust
for the benefit of Holders), whether pursuant to the terms of the Notes or
upon acceleration, by way of repurchase, redemption, defeasance or otherwise
(all such payments, deposits or distributions being referred to herein,
individually and collectively, as a "Note Payment"), shall be made if, at the
time of such Note Payment, there exists a default in the payment when due of
all or any portion of the obligations under or in respect of any Designated
Senior Debt, whether at maturity, on account of mandatory redemption or
prepayment, acceleration or otherwise, and such default shall not have been
cured or waived or the benefits of this sentence waived by or on behalf of the
holders of such Designated Senior Debt. In addition, during the continuance of
any non-payment default or non-payment event of default with respect to any
Designated Senior Debt pursuant to which the maturity thereof may be
accelerated, and upon receipt by the Trustee of notice (a "Payment Blockage
Notice") from a holder or holders of such Designated Senior Debt or the
trustee or agent acting on behalf of such Designated Senior Debt, then, unless
and until such default or event of default has been cured or waived or has
ceased to exist or such Designated Senior Debt has been discharged or repaid
in full, in cash, no Note Payment may be made by or on behalf of the Company
on account of or with respect to the Notes, except payments to Holders from
funds held in trust for the benefit of Holders, during a period (a "Payment
Blockage Period") commencing on the date of receipt of such Payment Blockage
Notice by the Trustee and ending 179 days thereafter. Notwithstanding anything
herein to the contrary, (x) in no event will a Payment Blockage Period extend
beyond 179 days from the date of the Payment Blockage Notice in respect
thereof was given and (y) there must be 180 days in any 360 day period during
which no Payment Blockage Period is in effect. Not more than one Payment
Blockage Period may be commenced with respect to the Notes during any period
of 360 consecutive days. No default or event of default that existed or was
continuing on the date of commencement of any Payment Blockage Period with
respect to the Designated Senior Debt initiating such Payment Blockage Period
may be, or be made, the basis for the commencement of any other Payment
Blockage Period by the holder or holders of such Designated Senior Debt or the
trustee or agent acting on behalf of such Designated Senior Debt, whether or
not within a period of 360 consecutive days, unless such default or event of
default has been cured or waived for a period of not less than 90 consecutive
days.
The failure to make any payment or distribution for or on account of the
Notes by reason of the provisions of the Indenture described under this
section will not be construed as preventing the occurrence of an Event of
Default described in clause (a), (b) or (c) of the first paragraph under "--
Events of Default."
By reason of the subordination provisions described above, in the event of
insolvency of the Company, funds which would otherwise be payable to Holders
will be paid to holders of Senior Debt of the Company to the extent necessary
to repay such Senior Debt in full, and the Company may be unable to fully meet
its obligations with respect to the Notes. Subject to the restrictions set
forth in the Indenture, in the future the Company may incur additional Senior
Debt.
At August 25, 1998, there was approximately $150 million of Senior Debt of
the Company outstanding.
THE GUARANTEES
The Indenture provides that the Guarantors will, jointly and severally,
unconditionally guarantee on a senior subordinated basis all of the
obligations of the Company under the Indenture, including its obligation to
pay principal, premium, if any, and interest (including Additional Interest)
with respect to the Notes. As of the date of this registration statement, all
of Triton's direct and indirect subsidiaries are guarantors on a full,
unconditional, and joint and several basis. Triton PCS Holdings Inc., the
direct parent and sole stockholder of Triton, is not a guarantor. The
obligation of each Guarantor is limited to the maximum amount which, after
giving effect to all other contingent and fixed liabilities of such Guarantor,
will result in the obligations of such Guarantor under the Guarantee not
constituting a fraudulent conveyance or fraudulent transfer under federal or
state law.
76
<PAGE>
The Company will not permit any Subsidiary to become a direct or indirect
obligor under, or in respect of, any Senior Credit Facilities without causing
such Subsidiary to become a Guarantor. Any such Subsidiary shall (a) execute
and deliver a supplemental indenture in form reasonably satisfactory to the
Trustee pursuant to which such Subsidiary shall unconditionally guarantee all
of the Company's obligations under the Notes and the Indenture on the terms
set forth in the Indenture and (b) deliver to the Trustee an opinion of
counsel that such supplemental indenture has been duly authorized, executed
and delivered by such Subsidiary and constitutes a valid and legally binding
and enforceable obligation of such Subsidiary.
Any Guarantor that is no longer a direct or indirect obligor (including as a
guarantor) under, or in respect of, all Senior Credit Facilities shall be
released from its Guarantee upon delivery of an Officers' Certificate to the
Trustee certifying to such effect.
In addition, the Indenture provides that if all of the Capital Stock of a
Guarantor is sold (including by issuance or otherwise) by the Company or any
Subsidiary in a transaction constituting an Asset Disposition (or which, but
for the provisions of clause (c) of such term, would constitute an Asset
Disposition), and (x) the Net Available Proceeds from such Asset Dispositions
are used in accordance with the covenant described under "--Covenants--
Limitation on Certain Asset Dispositions" or (y) the Company delivers to the
Trustee an Officers' Certificate to the effect that the Net Available Proceeds
from such Asset Disposition will be used in accordance with the covenant
described under "--Covenants--Limitation on Certain Asset Dispositions" within
the time limits specified by such covenant, then such Guarantor shall be
released and discharged from its Guarantee obligations upon such use in the
case of clause (x) or upon such delivery in the case of clause (y).
The Company may, at its option, cause any of its Subsidiaries to be a
Guarantor.
The obligations of each Guarantor under its Guarantee are subordinated in
right of payment to the prior payment in full of all Senior Debt of such
Guarantor on the same basis as the obligations of the Company on the Notes are
subordinated to Senior Debt of the Company. Each Guarantee will rank pari
passu in right of payment with any other senior subordinated indebtedness of
the Guarantor and senior in right of payment to any future Subordinated
Indebtedness of each Guarantor.
COVENANTS
The Indenture contains, among others, the following covenants:
Limitation on Incurrence of Indebtedness
The Indenture provides that the Company will not, and will not cause or
permit any Restricted Subsidiary to, directly or indirectly, Incur any
Indebtedness (including Acquired Indebtedness), except:
(i) Indebtedness of the Company, if immediately after giving effect to
the Incurrence of such Indebtedness and the receipt and application of the
net proceeds thereof (including, without limitation, the application or use
of the net proceeds therefrom to repay Indebtedness, consummate an Asset
Acquisition or make any Restricted Payment), (a) the ratio of (x) Total
Consolidated Indebtedness to (y) Annualized Pro Forma Consolidated
Operating Cash Flow would be less than (i) 7.0 to 1.0, if the Indebtedness
is to be incurred prior to July 1, 2004, or (ii) 6.0 to 1.0 if the
Indebtedness is to be incurred on or after July 1, 2004, or (b) in the case
of any incurrence of Indebtedness prior to July 1, 2004 only, Total
Consolidated Indebtedness would be equal to or less than 75% of Total
Invested Capital;
(ii) Indebtedness of the Company and the Restricted Subsidiaries Incurred
under one or more Senior Credit Facilities in an aggregate principal amount
at any one time outstanding not to exceed $425.0 million in the aggregate
for all such Senior Credit Facilities;
(iii) Indebtedness of the Company and its Restricted Subsidiaries
outstanding from time to time pursuant to any Vendor Credit Arrangement;
77
<PAGE>
(iv) Indebtedness owed by the Company to any Restricted Subsidiary or
Indebtedness owed by a Restricted Subsidiary to the Company or another
Restricted Subsidiary; provided, however, that upon either (x) the transfer
or other disposition by such Restricted Subsidiary or the Company of any
Indebtedness so permitted under this clause (iv) to a Person other than the
Company or another Restricted Subsidiary or (y) the issuance (other than
directors' qualifying shares), sale, transfer or other disposition of
shares of Capital Stock or other ownership interests (including by
consolidation or merger) of such Restricted Subsidiary to a Person other
than the Company or another such Restricted Subsidiary, the exception
provided by this clause (iv) shall no longer be applicable to such
Indebtedness and such Indebtedness shall be deemed to have been Incurred at
the time of any such issuance, sale, transfer or other disposition, as the
case may be;
(v) Indebtedness of the Company or any Restricted Subsidiary under any
interest rate agreement to the extent entered into to protect the Company
or such Restricted Subsidiary from fluctuations in interest rates on any
other Indebtedness permitted under the Indenture (including the Notes) and
not for speculative purposes;
(vi) Indebtedness Incurred to Refinance any Indebtedness Incurred under
the prior clause (i) or (iii) above, the Notes or the Guarantees; provided,
however, that (x) such Indebtedness does not exceed the principal amount
(or accreted value, if less) of the Indebtedness so Refinanced plus the
amount of any premium required to be paid in connection with such
Refinancing pursuant to the terms of the Indebtedness being Refinanced or
the amount of any premium reasonably determined by the issuer of such
Indebtedness as necessary to accomplish such Refinancing by means of a
tender offer, exchange offer, or privately negotiated repurchase, plus the
expenses of such issuer reasonably incurred in connection therewith and
(y)(1) in the case of any Refinancing of Indebtedness that is pari passu
with the Notes, such Refinancing Indebtedness is made pari passu with or
subordinate in right of payment to the Notes, and, in the case of any
Refinancing of Indebtedness that is subordinate in right of payment to the
Notes, such Refinancing Indebtedness is subordinate in right of payment to
the Notes on terms no less favorable to the Holders than those contained in
the Indebtedness being Refinanced, (2) in either case, the Refinancing
Indebtedness by its terms, or by the terms of any agreement or instrument
pursuant to which such Indebtedness is issued, does not have an Average
Life that is less than the remaining Average Life of the Indebtedness being
Refinanced and (3) any Indebtedness Incurred to Refinance any Indebtedness
is Incurred by the obligor on the Indebtedness being Refinanced or by the
Company;
(vii) Indebtedness of the Company under the Exchange Notes and
Indebtedness of the Guarantors under the Guarantee incurred in accordance
with the Indenture;
(viii) Capital Lease Obligations of the Company or any Restricted
Subsidiary with respect to the leasing by the Company or any Restricted
Subsidiary of tower sites and equipment that is a fixture thereto;
provided, that such Capital Lease Obligations shall not exceed $25 million
in aggregate principal amount at any time outstanding;
(ix) Indebtedness of the Company or any Restricted Subsidiary consisting
of a guarantee of Indebtedness of the Company or a Restricted Subsidiary of
the Company that was permitted to be incurred by another provision of this
covenant;
(x) Indebtedness of the Company or any Restricted Subsidiary in respect
of statutory obligations, performance, surety or appeal bonds or other
obligations of a like nature incurred in the ordinary course of business;
and
(xi) Indebtedness of the Company not otherwise permitted to be Incurred
pursuant to clauses (i) through (x) above which, together with any other
outstanding Indebtedness Incurred pursuant to this clause (xi), has an
aggregate principal amount not in excess of $75 million at any time
outstanding.
Indebtedness of a person existing at the time such person becomes a
Restricted Subsidiary or which is secured by a Lien on an asset acquired by
the Company or a Restricted Subsidiary (whether or not such Indebtedness is
assumed by the acquiring person) shall be deemed incurred at the time the
person becomes a Restricted Subsidiary or at the time of the asset
acquisition, as the case may be.
78
<PAGE>
For purposes of determining compliance with this covenant, in the event that
an item of Indebtedness meets the criteria of more than one of the categories
of Indebtedness permitted pursuant to clauses (i) through (xi) above, the
Company is, in its sole discretion, permitted to classify such item of
Indebtedness in any manner that complies with this covenant and may from time
to time reclassify such item of Indebtedness in any manner that would comply
with this covenant at the time of such reclassification. Accrual of interest
and the accretion of accreted value will not be deemed to be an incurrence of
Indebtedness for purposes of this covenant.
LIMITATION ON LAYERED DEBT
The Indenture provides that the Company will not (i) directly or indirectly,
Incur any Indebtedness that by its terms would expressly rank senior in right
of payment to the Notes and rank subordinate in right of payment to any other
Indebtedness of the Company and (ii) cause or permit any Guarantor to, and no
Guarantor will, directly or indirectly, incur any Indebtedness that by its
terms would expressly rank senior in right of payment to the Guarantee of such
Guarantor and rank subordinate in right of payment to any other Indebtedness
of such Guarantor; provided, that no Indebtedness shall be deemed to be
subordinated solely by virtue of being unsecured.
LIMITATION ON RESTRICTED PAYMENTS
The Indenture provides that the Company will not, and will not cause or
permit any Restricted Subsidiary to, directly or indirectly, on or prior to
December 31, 2000:
(i) declare or pay any dividend, or make any distribution of any kind or
character (whether in cash, property or securities), in respect of any
class of Capital Stock of the Company, excluding any dividends or
distributions payable solely in shares of Qualified Stock of the Company or
in options, warrants or other rights to acquire Qualified Stock of the
Company,
(ii) purchase, redeem, or otherwise acquire or retire for value any
shares of Capital Stock of the Company, any options, warrants or rights to
purchase or acquire such shares or any securities convertible or
exchangeable into such shares (other than any such shares of Capital Stock,
options, warrants, rights or securities that are owned by the Company or a
Restricted Subsidiary),
(iii) make any Investment (other than a Permitted Investment) in, any
Person, other than the Company or a Restricted Subsidiary, or
(iv) redeem, defease, repurchase, retire or otherwise acquire or retire
for value, prior to its scheduled maturity, repayment or any sinking fund
payment, Subordinated Indebtedness (each of the transactions described in
clauses (i) through (iv) (other than any exception to any such clause)
being a "Restricted Payment");
and at any time after December 31, 2000, the Company will not, and will not
cause or permit any Restricted Subsidiary to, directly or indirectly, make a
Restricted Payment if, at the time thereof:
(1) a Default or an Event of Default shall have occurred and be
continuing at the time of or after giving effect to such Restricted
Payment,
(2) immediately after giving effect to such Restricted Payment, the
Company could not Incur at least $1.00 of additional Indebtedness pursuant
to clause (i) of "--Limitation on Incurrence of Indebtedness" above, and
(3) immediately upon giving effect to such Restricted Payment, the
aggregate amount of all Restricted Payments declared or made on or after
the Issue Date (including any Designation Amount) exceeds the sum (without
duplication) of: (i) the amount of (x) the Consolidated Cash Flow of the
Company after December 31, 2000, through the end of the latest full fiscal
quarter for which consolidated financial statements of the Company are
available preceding the date of such Restricted Payment (treated as a
single accounting period) less (y) 150% of the cumulative Consolidated
Interest Expense of the Company after December 31, 2000, through the end of
the latest full fiscal quarter for which consolidated financial statements
of the Company
79
<PAGE>
are available preceding the date of such Restricted Payment (treated as a
single accounting period), plus (ii) the aggregate net cash proceeds (other
than Excluded Cash Proceeds) received by the Company as a capital
contribution in respect of Qualified Stock or from the proceeds of a sale
of Qualified Stock made after the Issue Date (excluding in each case (x)
the proceeds from a sale of Qualified Stock to a Restricted Subsidiary and
(y) the proceeds from a sale, other than from a Public Sale, of Qualified
Stock the proceeds of which are applied to optionally redeem Notes on or
prior to May 1, 2001), plus (iii) the aggregate net cash proceeds received
by the Company or any Restricted Subsidiary from the sale, disposition or
repayment (other than to the Company or a Restricted Subsidiary) of any
Investment made after the Issue Date and constituting a Restricted Payment
in an amount equal to the lesser of (x) the return of capital with respect
to such Investment and (y) the initial amount of such Investment, in either
case, less the cost of disposition of such Investment, plus (iv) an amount
equal to the consolidated net Investment on the date of Revocation made by
the Company and/or any of the Restricted Subsidiaries in any Subsidiary
that has been designated as an Unrestricted Subsidiary after the Issue Date
upon its redesignation as a Restricted Subsidiary in accordance with the
covenant described under "--Limitation on Designations of Unrestricted
Subsidiaries." For purposes of the preceding clause (ii), the value of the
aggregate net cash proceeds received by the Company from, or as a capital
contribution in connection with, the issuance of Qualified Stock either
upon the conversion of convertible Indebtedness of the Company or any of
its Restricted Subsidiaries or in exchange for outstanding Indebtedness of
the Company or any of its Restricted Subsidiaries or upon the exercise of
options, warrants or rights will be the net cash proceeds received by the
Company or any of its Restricted Subsidiaries upon the issuance of such
Indebtedness, options, warrants or rights plus the incremental amount
received by the Company or any of its Restricted Subsidiaries upon the
conversions, exchange or exercise thereof. For purposes of the preceding
clause (iv), the value of the consolidated net Investment on the date of
Revocation shall be equal to the Fair Market Value of the aggregate amount
of the Company's and/or any Restricted Subsidiary's Investments in such
Subsidiary on the applicable date of Designation.
For purposes of determining the amount expended for Restricted Payments,
cash distributed shall be valued at the face amount thereof and property other
than cash shall be valued at its Fair Market Value on the date such Restricted
Payment is made by the Company or a Restricted Subsidiary, as the case may be.
The provisions of this covenant do not prohibit (i) the payment of any
dividend or distribution within 60 days after the date of declaration thereof,
if at such date of declaration such payment would comply with the provisions
of the Indenture; (ii) so long as no Default or Event of Default shall have
occurred and be continuing, the purchase, redemption, retirement or other
acquisition of any Capital Stock of the Company out of the net cash proceeds
of the substantially concurrent capital contribution to the Company in
connection with Qualified Stock or out of the net cash proceeds received by
the Company from the substantially concurrent issue or sale (other than to a
Restricted Subsidiary) of Qualified Stock; provided that (x) any such net cash
proceeds shall be excluded from clause (3)(ii) of the second preceding
paragraph, (y) such proceeds do not constitute Excluded Cash Proceeds and (z)
such proceeds, if from a sale other than a Public Sale, are not applied to
optionally redeem Notes on or prior to May 1, 2001; (iii) so long as no
Default or Event of Default shall have occurred and be continuing, the
purchase, redemption, retirement, defeasance or other acquisition of
Subordinated Indebtedness of the Company made by exchange for or conversion
into, or out of the net cash proceeds received by the Company, or out of a
capital contribution to the Company in connection with a concurrent issue and
sale (other than to a Restricted Subsidiary) of (a) Qualified Stock (provided
that (x) any such net cash proceeds are excluded from clause (3)(ii) of the
second preceding paragraph, (y) such proceeds do not constitute Excluded Cash
Proceeds and (z) such proceeds, if from a sale other than a Public Sale, are
not applied to optionally redeem Notes on or prior to May 1, 2001) or (b)
other Subordinated Indebtedness of the Company that has an Average Life equal
to or greater than the Average Life of the Subordinated Indebtedness being
purchased, redeemed, retired, defeased or otherwise acquired; (iv) so long as
no Default or Event of Default shall have occurred and be continuing, the
making of a direct or indirect Investment constituting a Restricted Payment in
an amount not to exceed the amount of the proceeds of a concurrent capital
contribution in respect of Qualified Stock or from the issue or sale (other
than to a Restricted Subsidiary) of Qualified Stock of the Company; provided
that (x) any such net cash proceeds are excluded from clause (3)(ii) of the
second preceding paragraph, (y) such proceeds do
80
<PAGE>
not constitute Excluded Cash Proceeds and (z) such proceeds, if from a sale
other than a Public Sale, are not applied to optionally redeem Notes on or
prior to May 1, 2001; or (v) so long as no Default or Event of Default has
occurred and is continuing, dividends or distributions by the Company to
Triton PCS Holdings, Inc. to be used to repurchase, redeem, acquire or retire
for value any Capital Stock of Triton PCS Holdings, Inc. held by any member of
management of Triton PCS Holdings, Inc., the Company or any of its
Subsidiaries pursuant to any management equity subscription agreement, stock
option agreement or other similar agreement; provided that (x) the aggregate
amount of such dividends or distributions shall not exceed $2.0 million in any
twelve-month period and (y) any unused amount in any twelve-month period may
be carried forward to one or more future periods.
Restricted Payments made pursuant to clauses (i) and (v) of the immediately
preceding paragraph shall be included in making the determination of available
amounts under clause (3) of the third preceding paragraph and Restricted
Payments made pursuant to clauses (ii), (iii) and (iv) of the immediately
preceding paragraph shall not be included in making the determination of
available amounts under clause (3) of the third preceding paragraph.
LIMITATION ON RESTRICTIONS AFFECTING RESTRICTED SUBSIDIARIES
The Indenture provides that the Company will not, and will not cause or
permit any Restricted Subsidiary to, directly or indirectly, create or
otherwise cause or suffer to exist any consensual encumbrance or restriction
of any kind on the ability of any Restricted Subsidiary to (i) pay, directly
or indirectly, dividends, in cash or otherwise, or make any other
distributions in respect of its Capital Stock or pay any Indebtedness or other
obligation owed to the Company or any other Restricted Subsidiary, (ii) make
any Investment in the Company or any other Restricted Subsidiary or (iii)
transfer any of its property or assets to the Company or any other Restricted
Subsidiary, except for such encumbrances or restrictions existing under or by
reason of (a) any agreement in effect on the Issue Date as any such agreement
is in effect on such date, (b) any Senior Credit Facilities, (c) any agreement
relating to any Indebtedness Incurred by such Restricted Subsidiary prior to
the date on which such Restricted Subsidiary was acquired by the Company and
outstanding on such date and not Incurred in anticipation or contemplation of
becoming a Restricted Subsidiary; provided, however, that such encumbrance or
restriction shall not apply to any property or assets of the Company or any
Restricted Subsidiary other than such Restricted Subsidiary, (d) customary
provisions contained in an agreement which has been entered into for the sale
or disposition of all or substantially all of the Capital Stock or assets of a
Restricted Subsidiary; provided, however, that such encumbrance or restriction
is applicable only to such Restricted Subsidiary or its property and assets,
(e) any agreement effecting a Refinancing or amendment of Indebtedness
Incurred pursuant to any agreement referred to in clause (a) above; provided,
however, that the provisions contained in such Refinancing or amendment
agreement relating to such encumbrance or restriction are no more restrictive
in any material respect than the provisions contained in the agreement that is
the subject thereof in the reasonable judgment of (i) the Board of Triton PCS
Holdings, Inc. if, at the time of such Refinancing or amendment, the Company
is a Subsidiary of Triton PCS Holdings, Inc. or (ii) the Board of the Company
if, at the time of such Refinancing or amendment, the Company is not a
Subsidiary of Triton PCS Holdings, Inc., (f) the Indenture, (g) applicable law
or any applicable rule, regulation or order, (h) customary provisions
restricting subletting or assignment of any lease governing any leasehold
interest of any Restricted Subsidiary, (i) purchase money obligations for
property acquired in the ordinary course of business that impose restrictions
of the type referred to in clause (iii) of this covenant; (j) restrictions of
the type referred to in clause (iii) of this covenant contained in security
agreements securing Indebtedness of a Restricted Subsidiary to the extent that
such Liens were otherwise incurred in accordance with "--Limitation on Liens"
below and restrict the transfer of property subject to such agreements; or (k)
customary provisions in joint venture agreements and other similar agreements
entered into in the ordinary course of business.
LIMITATION ON LIENS
The Indenture provides that the Company will not, and will not cause or
permit any Restricted Subsidiary to, directly or indirectly, create, cause,
incur or suffer to exist any Lien on or with respect to the Capital Stock or
81
<PAGE>
any property or assets of the Company or such Restricted Subsidiary owned on
the Issue Date or thereafter created or acquired to secure any Indebtedness,
without making, or causing such Restricted Subsidiary to make, effective
provision for securing the Notes and all other amounts due under the Indenture
equally and ratably with such Indebtedness or, in the event such Indebtedness
is Subordinated Indebtedness, prior to such Indebtedness, as to such property
or assets for so long as such Indebtedness shall be so secured.
The foregoing restrictions do not apply to (i) Liens existing on the Issue
Date securing Indebtedness existing on the Issue Date; (ii) Liens securing
Senior Debt (including Liens securing Indebtedness under any Senior Credit
Facilities) and any guarantees thereof to the extent that the Indebtedness
secured thereby is permitted to be incurred under the covenant described under
"--Limitation on Incurrence of Indebtedness" above; (iii) Liens securing only
the Notes and the Guarantees, if any; (iv) Liens in favor of the Company or
any Guarantor; (v) Liens to secure Indebtedness Incurred in connection with
Vendor Credit Arrangements; (vi) Liens on property existing immediately prior
to the time of acquisition thereof (and not created in connection with or in
anticipation or contemplation of the financing of such acquisition); (vii)
Liens on property of a Person existing at the time such Person is acquired or
merged with or into or consolidated with the Company or any such Restricted
Subsidiary (and not created in connection with or in anticipation or
contemplation thereof); (viii) Liens to secure the performance of statutory
obligations, surety or appeal bonds or bid or performance bonds, or
landlords', carriers', warehousemen's, mechanics', suppliers', materialmen's
or other similar Liens, in any case incurred in the ordinary course of
business and with respect to amounts not yet delinquent or being contested in
good faith by appropriate process of law, if a reserve or other appropriate
provision, if any, as is required by GAAP shall have been made therefor; (ix)
Liens for taxes, assessments or governmental charges or claims that are not
yet delinquent or that are being contested in good faith by appropriate
proceedings promptly instituted and diligently concluded, provided that any
reserve or other appropriate provision that shall be required in conformity
with GAAP shall have been made therefor; (x) Liens to secure Indebtedness
Incurred to Refinance, in whole or in part, any Indebtedness secured by Liens
referred to in the foregoing clauses (i)-(ix) so long as such Liens do not
extend to any additional category of property and the principal amount of
Indebtedness so secured is not increased except for the amount of any premium
required to be paid in connection with such Refinancing pursuant to the terms
of the Indebtedness Refinanced or the amount of any premium reasonably
determined by the Company as necessary to accomplish such Refinancing by means
of a tender offer, exchange offer or privately negotiated repurchase, plus the
expenses of the issuer of such Indebtedness reasonably incurred in connection
with such Refinancing; and (xi) Liens in favor of the Trustee as provided for
in the Indenture on money or property held or collected by the Trustee in its
capacity as Trustee.
LIMITATION ON CERTAIN ASSET DISPOSITIONS
The Indenture provides that the Company will not, and will not cause or
permit any Restricted Subsidiary to, directly or indirectly, make any Asset
Dispositions unless: (i) the Company or such Restricted Subsidiary, as the
case may be, receives consideration for such Asset Disposition at least equal
to the fair market value of the assets sold or disposed of as determined by
either (x) the Board of Triton PCS Holdings, Inc., if at the time of such
Asset Disposition, the Company is a Subsidiary of Triton PCS Holdings, Inc. or
(y) the Board of the Company if, at the time of such Asset Disposition, the
Company is not a Subsidiary of Triton PCS Holdings, Inc., in good faith and
evidenced by a resolution of such Board filed with the Trustee; (ii) other
than in the case of a Permitted Asset Swap, not less than 75% of the
consideration received by the Company or such Restricted Subsidiary from the
disposition consists of (x) cash or Cash Equivalents, (y) the assumption of
Indebtedness (other than non-recourse Indebtedness or any Subordinated
Indebtedness) of the Company or such Restricted Subsidiary or other
obligations relating to such assets (accompanied by the irrevocable
unconditional release of the Company or such Restricted Subsidiary from all
liability on the Indebtedness or other obligations assumed) or (z) notes or
other obligations received by the Company or such Restricted Subsidiary from
such transferee that are converted by the Company or such Restricted
Subsidiary into cash concurrently with the receipt of such notes or other
obligations (to the extent of the cash actually received by the Company); and
(iii) all Net Available Proceeds, less any amounts invested within 365 days of
such Asset Disposition to acquire all or substantially all of the assets of,
or a majority of the Voting Stock of, an entity primarily engaged in a
Permitted Business, to
82
<PAGE>
make a capital expenditure or to acquire other long-term assets that are used
or useful in a Permitted Business, are applied, on or prior to the 365th day
after such Asset Disposition, unless and to the extent that the Company shall
determine to make an Offer to Purchase, to the permanent reduction and
prepayment of any Senior Debt of the Company then outstanding (including a
permanent reduction of the commitments in respect thereof). Any Net Available
Proceeds from any Asset Disposition which is subject to the immediately
preceding sentence that are not applied as provided in the immediately
preceding sentence shall be used promptly after the expiration of the 365th
day after such Asset Disposition (or earlier if the Company so elects), to
make an Offer to Purchase outstanding Notes at a purchase price in cash equal
to (a) 100% of the Accreted Value on the Purchase Date, if such Purchase Date
is on or before May 1, 2003 and (b) 100% of the principal amount at maturity
plus accrued and unpaid interest to the Purchase Date, if such Purchase Date
is after May 1, 2003. Notwithstanding the foregoing, the Company may defer
making any Offer to Purchase outstanding Notes until there are aggregate
unutilized Net Available Proceeds from Asset Dispositions otherwise subject to
the two immediately preceding sentences equal to or in excess of $15.0 million
(at which time, the entire unutilized Net Available Proceeds from Asset
Dispositions otherwise subject to the two immediately preceding sentences, and
not just the amount in excess of $15.0 million, shall be applied as required
pursuant to this paragraph). Any remaining Net Available Proceeds following
the completion of the required Offer to Purchase may be used by the Company
for any other purpose (subject to the other provisions of the Indenture) and
the amount of Net Available Proceeds then required to be otherwise applied in
accordance with this covenant shall be reset to zero. These provisions will
not apply to a transaction consummated in compliance with the provisions of
the Indenture described under "--Mergers, Consolidations and Certain Sales of
Assets" below.
Pending application as set forth above, the Net Available Proceeds of any
Asset Disposition may be invested in Cash or Cash Equivalents or used to
reduce temporarily Indebtedness outstanding under any revolving credit
agreement to which the Company is a party and pursuant to which it has
incurred Indebtedness.
In the event that the Company makes an Offer to Purchase the Notes, the
Company shall comply with any applicable securities laws and regulations,
including any applicable requirements of Section 14(e) of, and Rule 14e-1
under, the Exchange Act.
LIMITATION ON TRANSACTIONS WITH AFFILIATES
The Indenture provides that the Company will not, and will not cause or
permit any Restricted Subsidiary to, directly or indirectly, conduct any
business or enter into, renew or extend any transaction with any of their
respective Affiliates or any beneficial holder of 10% or more of any class of
Capital Stock of the Company or Triton PCS Holdings, Inc., including, without
limitation, the purchase, sale, lease or exchange of property, the rendering
of any service, or the making of any guarantee, loan, advance or Investment,
either directly or indirectly, unless the terms of such transaction are at
least as favorable as the terms that could be obtained at such time by the
Company or such Restricted Subsidiary, as the case may be, in a comparable
transaction made on an arms'-length basis with a Person that is not such an
Affiliate; provided, however, that (x) in any transaction involving aggregate
consideration in excess of $10.0 million, the Company shall deliver an
officer's certificate to the Trustee stating that a majority of the
disinterested directors of either (i) the Board of Triton PCS Holdings, Inc.
if, at the time of such transaction, the Company is a Subsidiary of Triton PCS
Holdings, Inc. or (ii) the Board of the Company if, at the time of such
transaction, the Company is not a Subsidiary of Triton PCS Holdings, Inc.,
have determined, in their good faith judgment, that the terms of such
transaction are at least as favorable as the terms that could be obtained by
the Company or such Restricted Subsidiary, as the case may be, in a comparable
transaction made on an arm's-length basis between unaffiliated parties and
(y), if the aggregate consideration is in excess of $25.0 million, the Company
shall also deliver to the Trustee, prior to the consummation of the
transaction, the favorable written opinion of a nationally recognized
accounting, appraisal or investment banking firm as to the fairness of the
transaction to the Holders of the Notes, from a financial point of view.
Notwithstanding the foregoing, the restrictions set forth in this covenant
do not apply to (i) transactions between or among Company and/or any
Restricted Subsidiaries, (ii) any Restricted Payment or Permitted
83
<PAGE>
Investment permitted by the covenant described under "--Limitation on
Restricted Payments," (iii) directors' fees, indemnification and similar
arrangements, officers' indemnification, employee stock option or employee
benefit plans and employee salaries and bonuses paid or created in the
ordinary course of business, (iv) any other agreement in effect on the Issue
Date, as the same shall be amended from time to time; provided that any
material amendment shall be required to comply with the provisions of the
preceding paragraph of this covenant, (v) transactions with AT&T Corp.or any
of its Affiliates (collectively, "AT&T") relating to the marketing or
provision of telecommunication services or related hardware, software or
equipment on terms that are no less favorable (when taken as a whole) to the
Company or such Restricted Subsidiary, as applicable, than those available
from unaffiliated third parties, (vi) transactions involving the leasing or
sharing or other use by the Company or any Restricted Subsidiary of
communications network facilities (including, without limitation, cable or
fiber lines, equipment or transmission capacity) of any Affiliate of the
Company or any beneficial holder of 10% or more of any class of Capital Stock
of the Company or Triton PCS Holdings, Inc. (such Affiliate or holder being a
"Related Party") on terms that are no less favorable (when taken as a whole)
to the Company or such Restricted Subsidiary, as applicable, than those
available from such Related Party to unaffiliated third parties,
(vii) transactions involving the provision of telecommunication services by a
Related Party in the ordinary course of its business to the Company or any
Restricted Subsidiary, or by the Company or any Restricted Subsidiary to a
Related Party, on terms that are no less favorable (when taken as a whole) to
the Company or such Restricted Subsidiary, as applicable, than those available
from such Related Party to unaffiliated third parties, (viii) any sales agency
agreements pursuant to which an Affiliate has the right to market any or all
of the products or services of the Company or any of the Restricted
Subsidiaries, and (ix) customary commercial banking, investment banking,
underwriting, placement agent or financial advisory fees paid in connection
with services rendered to the Company and its subsidiaries in the ordinary
course.
LIMITATION ON ACTIVITIES OF THE COMPANY AND THE RESTRICTED SUBSIDIARIES
The Indenture provides that the Company will not, and will not permit any
Restricted Subsidiary to, engage in any business other than a Permitted
Business, except to such extent as is not material to the Company and its
Restricted Subsidiaries, taken as a whole.
CHANGE OF CONTROL
Within 30 days following the date of the consummation of a transaction
resulting in a Change of Control, the Company will commence an Offer to
Purchase all outstanding Notes at a purchase price in cash equal to (i) 101%
of the Accreted Value on the Purchase Date if such date is on or before May 1,
2003 and (ii) 101% of the principal amount at maturity, plus accrued and
unpaid interest, if any, to the Purchase Date, if such date is after May 1,
2003. Such Offer to Purchase will be consummated not earlier than 30 days and
not later than 60 days after the commencement thereof. Each holder shall be
entitled to tender all or any portion of the Notes owned by such holder
pursuant to the Offer to Purchase, subject to the requirement that any portion
of a Note tendered must be in an integral multiple of $1,000 principal amount.
In the event that the Company makes an Offer to Purchase the Notes, the
Company shall comply with any applicable securities laws and regulations,
including any applicable requirements of Section 14(e) of, and Rule 14e-1
under, the Exchange Act.
The Company will not be required to make an Offer to Purchase upon a Change
of Control if a third party makes the Offer to Purchase in the manner, at the
times and otherwise in compliance with the requirements set forth in the
Indenture applicable to an Offer to Purchase made by the Company and purchases
all Notes validly tendered and not withdrawn under such Offer to Purchase.
With respect to the sale of assets referred to in the definition of "Change
of Control," the phrase "all or substantially all" of the assets of the
Company will likely be interpreted under applicable law and will be dependent
upon particular facts and circumstances. As a result, there may be a degree of
uncertainty in ascertaining whether a sale or transfer of "all or
substantially all" of the assets of the Company has occurred. In
84
<PAGE>
addition, no assurances can be given that the Company will be able to acquire
Notes tendered upon the occurrence of a Change of Control. The ability of the
Company to pay cash to the holders of Notes upon a Change of Control may be
limited by its then existing financial resources. The Credit Agreement
contains certain covenants prohibiting, or requiring waiver or consent of the
lenders thereunder prior to, the repurchase of the Notes upon a Change of
Control and future debt agreements of the Company may provide the same. If the
Company does not obtain such waiver or consent or repay such Indebtedness, the
Company will remain prohibited from repurchasing the Notes. In such event, the
Company's failure to purchase tendered Notes would constitute an Event of
Default under the Indenture which would in turn constitute a default under the
Credit Agreement and possibly other Indebtedness. None of the provisions
relating to a repurchase upon a Change of Control are waivable by the Board of
the Company or the Trustee.
The foregoing provisions will not prevent the Company from entering into
transactions of the types described above with management or their affiliates.
In addition, such provisions may not necessarily afford the holders of the
Notes protection in the event of a highly leveraged transaction, including a
reorganization, restructuring, merger or similar transaction involving the
Company that may adversely affect the holders because such transactions may
not involve a shift in voting power or beneficial ownership, or even if they
do, may not involve a shift of the magnitude required under the definition of
Change of Control to trigger the provisions.
AMENDMENTS TO SECURITIES PURCHASE AGREEMENT
The Indenture provides that neither the Company nor Triton PCS Holdings,
Inc. will amend, modify or waive, or refrain from enforcing, any provision of
the Securities Purchase Agreement dated October 8, 1997, as amended as of the
date hereof, among AT&T Wireless PCS Inc., the Cash Equity Investors (named
therein), the Management Stockholders (named therein) and Triton PCS Holdings,
Inc., in any manner that would materially alter the obligations of the Cash
Equity Investors or the Management Stockholders thereunder to provide
additional equity capital to Triton PCS Holdings, Inc. (and to further
contribute such equity capital to the Company in the form of Qualified Stock
of the Company) until such time as the Company has received subsequent to the
Issue Date, net cash proceeds from capital contributions, or sales, in respect
of Qualified Stock of the Company equal to at least $122 million.
PROVISION OF FINANCIAL INFORMATION
The Indenture provides that, whether or not required by the rules and
regulations of the Commission, so long as any Notes are outstanding, the
Company will furnish to the Holders of Notes (i) all quarterly and annual
financial information that would be required to be contained in a filing with
the Commission on Forms 10-Q and 10-K if the Company were required to file
such Forms, including a "Management's Discussion and Analysis of Financial
Condition and Results of Operations" that describes the financial condition
and results of operations of the Company and its consolidated Subsidiaries
and, with respect to the annual information only, a report thereon by the
Company's certified independent accountants, and (ii) all current reports that
would be required to be filed with the Commission on Form 8-K if the Company
were required to file such reports, in each case within the time period
specified in the Commission's rules and regulations; provided that no such
information or reports shall be required to be furnished prior to the date on
which the exchange offer registration statement is required by the terms of
the Registration Rights Agreement to be filed with the Commission. In
addition, following the consummation of the exchange offer contemplated by the
Registration Rights Agreement, whether or not required by the rules and
regulations of the Commission, the Company will file a copy of all such
information and reports with the Commission for public availability within the
time periods specified in the Commission's rules and regulations (unless the
Commission will not accept such a filing) and make such information available
to securities analysts and prospective investors upon request. In addition,
the Company will, for so long as any Notes remain outstanding, furnish to the
Holders and to securities analysts and prospective investors, upon their
request, the information required to be delivered pursuant to Rule 144A(d)(4)
under the Securities Act.
85
<PAGE>
LIMITATION ON DESIGNATIONS OF UNRESTRICTED SUBSIDIARIES
The Indenture provides that the Company may designate any Subsidiary of the
Company (other than the License Subsidiary, the Real Property Subsidiary and
the Equipment Subsidiary) as an "Unrestricted Subsidiary" under the Indenture
(a "Designation") only if:
(i) no Default or Event of Default shall have occurred and be continuing
at the time of or after giving effect to such Designation; and
(ii) the Company would be permitted under the Indenture to make an
Investment at the time of Designation (assuming the effectiveness of such
Designation) in an amount (the "Designation Amount") equal to the Fair
Market Value of the aggregate amount of its Investments in such Subsidiary
on such date; and
(iii) except in the case of a Subsidiary in which an Investment is being
made pursuant to and as permitted by the third paragraph of the covenant
"Limitation on Restricted Payments," the Company would be permitted to
incur $1.00 of additional Indebtedness pursuant to clause (i) of the
covenant described under "--Limitation on Incurrence of Indebtedness" at
the time of Designation (assuming the effectiveness of such Designation).
In the event of any such Designation, the Company shall be deemed to have
made an Investment constituting a Restricted Payment pursuant to the covenant
described under "--Limitation on Restricted Payments" for all purposes of the
Indenture in the Designation Amount. The Indenture further provides that the
Company shall not, and shall not permit any Restricted Subsidiary to, at any
time (x) provide direct or indirect credit support for or a guarantee of any
Indebtedness of any Unrestricted Subsidiary (including of any undertaking,
agreement or instrument evidencing such Indebtedness), (y) be directly or
indirectly liable for any Indebtedness of any Unrestricted Subsidiary or (z)
be directly or indirectly liable for any Indebtedness which provides that the
holder thereof may (upon notice, lapse of time or both) declare a default
thereon or cause the payment thereof to be accelerated or payable prior to its
final scheduled maturity upon the occurrence of a default with respect to any
Indebtedness of any Unrestricted Subsidiary (including any right to take
enforcement action against such Unrestricted Subsidiary), except, in the case
of clause (x) or (y), to the extent permitted under the covenant described
under "--Limitation on Restricted Payments."
The Indenture further provides that the Company may revoke any Designation
of a Subsidiary as an Unrestricted Subsidiary (a "Revocation"), whereupon such
Subsidiary shall then constitute a Restricted Subsidiary, if:
(a) no Default shall have occurred and be continuing at the time of and
after giving effect to such Revocation; and
(b) all Liens and Indebtedness of such Unrestricted Subsidiary
outstanding immediately following such Revocation would, if incurred at
such time, have been permitted to be incurred for all purposes of the
Indenture.
All Designations and Revocations must be evidenced by Resolutions of the
Company delivered to the Trustee certifying compliance with the foregoing
provisions.
MERGERS, CONSOLIDATIONS AND CERTAIN SALES OF ASSETS
The Company will not consolidate or merge with or into any Person, or sell,
assign, lease, convey or otherwise dispose of (or cause or permit any
Restricted Subsidiary to consolidate or merge with or into any Person or sell,
assign, lease, convey or otherwise dispose of) all or substantially all of the
Company's assets (determined on a consolidated basis for the Company and the
Restricted Subsidiaries), whether as an entirety or substantially an entirety
in one transaction or a series of related transactions, including by way of
liquidation or dissolution, to any Person unless, in each such case: (i) the
entity formed by or surviving any such consolidation or merger (if other than
the Company or such Restricted Subsidiary, as the case may be), or to which
such sale, assignment, lease, conveyance or other disposition shall have been
made (the "Surviving Entity"), is a
86
<PAGE>
corporation organized and existing under the laws of the United States, any
state thereof or the District of Columbia; (ii) the Surviving Entity assumes
by supplemental indenture all of the obligations of the Company on the Notes
and under the Indenture; (iii) immediately after giving effect to such
transaction and the use of any net proceeds therefrom on a pro forma basis,
the Company or the Surviving Entity, as the case may be, could Incur at least
$1.00 of Indebtedness pursuant to clause (i) of the provisions of the
Indenture described under "--Limitation on Incurrence of Indebtedness" above;
(iv) immediately after giving effect to such transaction and treating any
Indebtedness which becomes an obligation of the Company or any of its such
Restricted Subsidiaries as a result of such transaction as having been
Incurred by the Company or such Restricted Subsidiary, as the case may be, at
the time of the transaction, no Default or Event of Default shall have
occurred and be continuing; and (v) if, as a result of any such transaction,
property or assets of the Company or a Restricted Subsidiary would become
subject to a Lien not excepted from the provisions of the Indenture described
under "--Limitation on Liens" above, the Company, Restricted Subsidiary or the
Surviving Entity, as the case may be, shall have secured the Notes as required
by said covenant. The provisions of this paragraph shall not apply to any
merger of a Restricted Subsidiary with or into the Company or a Wholly Owned
Subsidiary or the release of any Guarantor in accordance with the terms of the
Guarantee and the Indenture in connection with any transaction complying with
the provisions of the Indenture described under "--Limitation on Certain Asset
Dispositions" above.
EVENTS OF DEFAULT
The following are Events of Default under the Indenture: (a) failure to pay
the Accreted Value or principal of (or premium, if any, on) any Note when due
(whether or not prohibited by the provisions of the Indenture described under
"--Ranking" above); (b) failure to pay any interest on any Note when due,
continued for 30 days (whether or not prohibited by the provisions of the
Indenture described under "--Ranking" above); (c) default in the payment of
the Accreted Value or principal of and interest on Notes required to be
purchased pursuant to an Offer to Purchase as described under "--Covenants--
Change of Control" and "--Covenants--Limitation on Certain Asset Dispositions"
above when due and payable (whether or not prohibited by the provisions of the
Indenture described under "--Ranking" above); (d) failure to perform or comply
with any of the provisions described under "--Covenants--Mergers,
Consolidations and Certain Sales of Assets" above; (e) failure to perform any
other covenant or agreement of the Company under the Indenture or the Notes
continued for 60 days after written notice to the Company by the Trustee or
Holders of at least 25% in aggregate principal amount of outstanding Notes;
(f) default under the terms of one or more instruments evidencing or securing
Indebtedness of the Company or any of its Subsidiaries having an outstanding
principal amount of $15.0 million or more individually or in the aggregate
that has resulted in the acceleration of the payment of such Indebtedness or
failure to pay principal when due at the final stated maturity of any such
Indebtedness; (g) the rendering of a final judgment or judgments (not subject
to appeal) against the Company or any of its Subsidiaries in an amount of
$15.0 million or more which remains undischarged or unstayed for a period of
60 days after the date on which the right to appeal has expired; (h) certain
events of bankruptcy, insolvency or reorganization affecting the Company or
any Material Subsidiary; and (i) any Guarantee of a Material Subsidiary ceases
to be in full force and effect or is declared null and void and unenforceable
or is found to be invalid or any Guarantor denies its liability under the
Guarantee (other than by reason of a release of such Guarantor from the
Guarantee in accordance with the terms of the Indenture and the Guarantee).
If an Event of Default (other than an Event of Default with respect to the
Company described in clause (h) of the preceding paragraph) shall occur and be
continuing, either the Trustee or the Holders of at least 25% in aggregate
principal amount at maturity of the outstanding Notes may accelerate the
maturity of all Notes; provided, however, that after such acceleration, but
before a judgment or decree based on acceleration, the Holders of a majority
in aggregate principal amount at maturity of outstanding Notes may, under
certain circumstances, rescind and annul such acceleration if all Defaults,
other than the non-payment of accelerated principal, have been cured or waived
as provided in the Indenture. If an Event of Default specified in clause (h)
of the preceding paragraph with respect to the Company occurs, the outstanding
Notes will ipso facto become immediately due and payable without any
declaration or other act on the part of the Trustee or any Holder. For
information as to waiver of defaults, see "--Modification and Waiver."
87
<PAGE>
The Indenture provides that the Trustee shall, within 30 days after the
occurrence of any Default or Event of Default with respect to the Notes, give
the holders thereof notice of all uncured Defaults or Events of Default known
to it; provided, however, that, except in the case of an Event of Default or a
Default in any payment with respect to the Notes or a Default or Event of
Default in complying with "--Covenants--Mergers, Consolidations and Certain
Sales of Assets," the Trustee shall be protected in withholding such notice if
and so long as the Board or responsible officers of the Trustee in good faith
determine that the withholding of such notice is in the interest of the
holders of the Notes.
No holder of any Note will have any right to institute any proceeding with
respect to the Indenture or for any remedy thereunder, unless such holder
shall have previously given to the Trustee written notice of a continuing
Event of Default and unless the holders of at least 25% in aggregate principal
amount at maturity of the outstanding Notes shall have made written request,
and offered reasonable indemnity, to the Trustee to institute such proceeding
as Trustee, and the Trustee shall not have received from the holders of a
majority in aggregate principal amount at maturity of the outstanding Notes a
direction inconsistent with such request and shall have failed to institute
such proceeding within 60 days. However, such limitations do not apply to a
suit instituted by a holder of a Note for enforcement of payment of the
principal of and premium, if any, or interest on such Note on or after the
respective due dates expressed in such Note.
The Company will be required to furnish to the Trustee annually a statement
as to its performance of certain of its obligations under the Indenture and as
to any default in such performance.
SATISFACTION AND DISCHARGE OF INDENTURE; DEFEASANCE
The Company may terminate its substantive obligations and the substantive
obligations of the Guarantors in respect of the Notes and the Guarantees by
delivering all outstanding Notes to the Trustee for cancellation and paying
all sums payable by the Company on account of principal of, premium, if any,
and interest on all Notes or otherwise. In addition to the foregoing, the
Company may, provided that no Default or Event of Default has occurred and is
continuing or would arise therefrom (or, with respect to a Default or Event of
Default specified in clause (h) of "--Events of Default" above, any time on or
prior to the 91st calendar day after the date of such deposit (it being
understood that this condition shall not be deemed satisfied until after such
91st day)) and provided that no default under any Senior Debt would result
therefrom, terminate its substantive obligations and the substantive
obligations of the Guarantors in respect of the Notes and the Guarantees
(except for the Company's obligation to pay the principal of (and premium, if
any, on) and the interest on the Notes and such Guarantors' guarantee thereof)
by (i) depositing with the Trustee, under the terms of an irrevocable trust
agreement, money or United States Government Obligations sufficient (without
reinvestment) to pay all remaining indebtedness on the Notes to maturity or to
redemption, (ii) delivering to the Trustee either an Opinion of Counsel or a
ruling directed to the Trustee from the Internal Revenue Service to the effect
that the holders of the Notes will not recognize income, gain or loss for
federal income tax purposes as a result of such deposit and termination of
obligations, (iii) delivering to the Trustee an Opinion of Counsel to the
effect that the Company's exercise of its option under this paragraph will not
result in the Company, the Trustee or the trust created by the Company's
deposit of funds pursuant to this provision becoming or being deemed to be an
"investment company" under the Investment Company Act of 1940, as amended, and
(iv) complying with certain other requirements set forth in the Indenture. In
addition, the Company may, provided that no Default or Event of Default has
occurred, and is continuing or would arise therefrom (or, with respect to a
Default or Event of Default specified in clause (h) of "--Events of Default"
above, any time on or prior to the 91st calendar day after the date of such
deposit (it being understood that this condition shall not be deemed satisfied
until after such 91st day)) and provided that no default under any Senior Debt
would result therefrom, terminate all of its substantive obligations and all
of the substantive obligations of the Guarantors in respect of the Notes and
the Guarantees (including the Company's obligation to pay the principal of
(and premium, if any, on) and interest on the Notes and such Guarantors'
guarantee thereof by (i) depositing with the Trustee, under the terms of an
irrevocable trust agreement, money or United States Government Obligations
sufficient (without reinvestment) to pay all remaining indebtedness on the
Notes to maturity or to redemption, (ii) delivering to the Trustee either
88
<PAGE>
a ruling directed to the Trustee from the Internal Revenue Service to the
effect that the holders of the Notes will not recognize income, gain or loss
for federal income tax purposes as a result of such deposit and termination of
obligations or an Opinion of Counsel based upon such a ruling addressed to the
Trustee or a change in the applicable Federal tax law since the date of the
Indenture, to such effect, (iii) delivering to the Trustee an Opinion of
Counsel to the effect that the Company's exercise of its option under this
paragraph will not result in the Company, the Trustee or the trust created by
the Company's deposit of funds pursuant to this provision becoming or being
deemed to be an "investment company" under the Investment Company Act of 1940,
as amended, and (iv) complying with certain other requirements set forth in
the Indenture.
The Company may make an irrevocable deposit pursuant to this provision only
if at such time it is not prohibited from doing so under the subordination
provisions of the Indenture or certain covenants in the instruments governing
Senior Debt and the Company has delivered to the Trustee and any Paying Agent
an Officers' Certificate to that effect.
GOVERNING LAW
The Indenture, the Notes and the Guarantees are governed by the laws of the
State of New York without regard to principles of conflicts of laws.
MODIFICATION AND WAIVER
Modifications and amendments of the Indenture may be made by the Company and
the Trustee with the consent of the holders of a majority in aggregate
principal amount at maturity of the outstanding Notes; provided, however, that
no such modification or amendment may, without the consent of the holder of
each Note affected thereby, (a) change the stated maturity of the principal of
any Note, (b) alter the optional redemption or repurchase provisions of any
Note or the Indenture in a manner adverse to the holders of the Notes, (c)
reduce the principal amount of any Note, (d) reduce the rate of or change the
time for payment of interest on any Note, (e) change the place or currency of
payment of principal of or interest on any Note, (f) modify any provisions of
the Indenture relating to the waiver of past defaults (other than to add
sections of the Indenture subject thereto) or the right of the holders to
institute suit for the enforcement of any payment on or with respect to any
Note or the Guarantee, or the modification and amendment of the Indenture and
the Notes (other than to add sections of the Indenture or the Notes which may
not be amended, supplemented or waived without the consent of each holder
affected), (g) reduce the percentage of the principal amount of outstanding
Notes necessary for amendment to or waiver of compliance with any provision of
the Indenture or the Notes or for waiver of any Default, (h) waive a default
in the payment of principal of, interest on, or redemption payment with
respect to, any Note (except a rescission of acceleration of the Notes by the
holders as provided in the Indenture and a waiver of the payment default that
resulted from such acceleration), (i) modify the ranking or priority of the
Notes or the Guarantees, or modify the definition of Senior Debt or Designated
Senior Debt or amend or modify the subordination provisions of the Indenture
in any manner adverse to the Holders, (j) release any Guarantor from any of
its obligations under its Guarantee or the Indenture otherwise than in
accordance with the Indenture, or (k) modify any of the provisions (including
the definitions relating thereto) relating to any Offer to Purchase required
under the covenants described under "--Covenants--Limitation on Certain Asset
Dispositions" or "--Covenants--Change of Control" in a manner materially
adverse to the holders of Notes with respect to any Asset Disposition that has
been consummated or Change of Control that has occurred.
The holders of a majority in aggregate principal amount at maturity of the
outstanding Notes, on behalf of all Holders of Notes, may waive compliance by
the Company with certain restrictive provisions of the Indenture. Subject to
certain rights of the Trustee, as provided in the Indenture, the holders of a
majority in aggregate principal amount at maturity of the outstanding Notes,
on behalf of all holders of Notes, may waive any past default under the
Indenture, except a default in the payment of principal, premium or interest
or a default arising from failure to purchase any Note tendered pursuant to an
Offer to Purchase, or a default in respect of a provision that under the
Indenture cannot be modified or amended without the consent of the holder of
each outstanding Note affected.
89
<PAGE>
Notwithstanding the foregoing, without the consent of any Holder of Notes,
the Company and the Trustee may amend or supplement the Indenture or the Notes
to cure any ambiguity, defect or inconsistency, to provide for uncertificated
Notes in addition to or in place of certificated Notes, to provide for the
assumption of the Company's obligations to Holders of Notes in the case of a
merger or consolidation or sale of all or substantially all of the Company's
assets, to make any change that would provide any additional rights or
benefits to the Holders of Notes or that does not adversely affect the legal
rights under the Indenture of any such Holder, or to comply with requirements
of the Commission in order to effect or maintain the qualification of the
Indenture under the Trust Indenture Act.
NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS
No director, officer, employee or stockholder of the Company or any of its
Subsidiaries, as such, will have any liability for any obligations of the
Company or any Guarantor under the Notes, the Indenture, the Guarantees or any
claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for issuance
of the Notes. Such waiver may not be effective to waive liabilities under the
federal securities laws, and it is the view of the Commission that such a
waiver is against public policy.
THE TRUSTEE
The Indenture provides that, except during the continuance of a Default, the
Trustee will perform only such duties as are specifically set forth in the
Indenture. During the existence of a Default, the Trustee will exercise such
rights and powers vested in it under the Indenture and use the same degree of
care and skill in their exercise as a prudent person would exercise under the
circumstances in the conduct of such person's own affairs. The Indenture and
provisions of the Trust Indenture Act incorporated by reference therein
contain limitations on the rights of the Trustee, should it become a creditor
of the Company, the Guarantors, or any other obligor upon the Notes, to obtain
payment of claims in certain cases or to realize on certain property received
by it in respect of any such claim as security or otherwise. The Trustee is
permitted to engage in other transactions with the Company or an Affiliate of
the Company; provided, however, that if it acquires any conflicting interest
(as defined in the Indenture or in the Trust Indenture Act), it must eliminate
such conflict or resign.
CERTAIN DEFINITIONS
Set forth below is a summary of certain of the defined terms used in the
Indenture or the Registration Rights Agreement. Reference is made to the
Indenture or the Registration Rights Agreement for the full definition of all
such terms, as well as any other terms used herein for which no definition is
provided.
"Accreted Value" shall mean, as of any date of determination prior to May 1,
2003, the sum of (a) the initial offering price of each Note and (b) the
portion of the excess of the principal amount of each Note over such initial
offering price which shall have been amortized by the Company in accordance
with GAAP through such date, such amount to be so amortized on a daily basis
and compounded semi-annually on each interest payment date at a rate of 11%
per annum from the Issue Date through the date of determination computed on
the basis of a 360-day year of twelve 30-day months.
"Acquired Indebtedness" means, with respect to any Person, Indebtedness of
such Person (i) existing at the time such Person becomes a Restricted
Subsidiary or (ii) assumed in connection with the acquisition of assets from
another Person, including Indebtedness Incurred in connection with, or in
contemplation of, such Person becoming a Restricted Subsidiary or such
acquisition, as the case may be.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with any specified Person. For purposes of this definition, "control"
when used with respect to any Person means the power to direct the management
and policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
90
<PAGE>
"Annualized Pro Forma Consolidated Operating Cash Flow" means Consolidated
Cash Flow for the latest two full fiscal quarters for which consolidated
financial statements of the Company are available multiplied by two. For
purposes of calculating "Consolidated Cash Flow" for any period for purposes
of this definition only, (i) any Subsidiary of the Company that is a
Restricted subsidiary on the date of the transaction giving rise to the need
to calculate "Annualized Pro Forma Consolidated Operating Cash Flow" (the
"Transaction Date") shall be deemed to have been a Restricted Subsidiary at
all times during such period and (ii) any Subsidiary of the Company that is
not a Restricted Subsidiary on the Transaction Date shall be deemed not to
have been a Restricted subsidiary at any time during such period. In addition
to and without limitation of the foregoing, for purposes of this definition
only, "Consolidated Cash Flow" shall be calculated after giving effect on a
pro forma basis for the applicable period to, without duplication, any Asset
Dispositions or Asset Acquisitions (including, without limitation, any Asset
Acquisition giving rise to the need to make such calculation as a result of
the Company or one of the Restricted Subsidiaries (including any person who
becomes a Restricted Subsidiary as a result of the Asset Acquisition)
incurring, assuming or otherwise being liable for Acquired Indebtedness)
occurring during the period commencing on the first day of such two fiscal
quarter period to and including the Transaction Date (the "Reference Period"),
as if such Asset Sale or Asset Acquisition occurred on the first day of the
Reference Period.
"Asset Acquisition" means (i) any purchase or other acquisition (by means of
transfer of cash or other property to others or payment for property or
services for the account or use of others, or otherwise) of Equity Interests
of any person by the Company or any Restricted Subsidiary, in either case,
pursuant to which such person shall become a Restricted Subsidiary or shall be
merged with or into the Company or any Restricted Subsidiary or (ii) any
acquisition by the Company or any Restricted Subsidiary of the property or
assets of any person which constitute all or substantially all of an operating
unit or line of business of such person.
"Asset Disposition" means any sale, transfer or other disposition
(including, without limitation, by merger, consolidation or sale-and-leaseback
transaction) of (i) shares of Capital Stock of a Subsidiary of the Company
(other than directors' qualifying shares), (ii) any FCC license for the
provision of wireless telecommunications services held by the Company or any
Restricted Subsidiary (whether by sale of Capital Stock or otherwise) or (iii)
property or assets of the Company or any Subsidiary of the Company; provided,
however, that an Asset Disposition shall not include (a) any sale, transfer or
other disposition of shares of Capital Stock, property or assets by a
Restricted Subsidiary to the Company or to any other Restricted Subsidiary or
by the Company to any Restricted Subsidiary, (b) any sale, transfer or other
disposition of defaulted receivables for collection or any sale, transfer or
other disposition of property or assets in the ordinary course of business,
(c) any sale, transfer or other disposition that does not (together with all
related sales, transfers or dispositions) involve aggregate consideration in
excess of $5.0 million, (d) the sale, lease, conveyance or disposition or
other transfer of all or substantially all of the assets of the Company as
permitted under "--Covenants--Mergers, Consolidations and Certain Sales of
Assets" above or (e) any disposition that constitutes a Change of Control.
"Average Life" means, as of the date of determination, with respect to any
Indebtedness for borrowed money or Preferred Stock, the quotient obtained by
dividing (i) the sum of the products of the number of years from the date of
determination to the dates of each successive scheduled principal or
liquidation value payments of such Indebtedness or Preferred Stock,
respectively, and the amount of such principal or liquidation value payments,
by (ii) the sum of all such principal or liquidation value payments.
"Bankruptcy Code" means Title 11, United States Code.
"Board" of any person means the board of directors, management committee or
other governing body of such person.
"Capital Lease Obligations" of any Person means the obligations to pay rent
or other amounts under a lease of (or other Indebtedness arrangements
conveying the right to use) real or personal property of such Person which are
required to be classified and accounted for as a capital lease or liability on
the face of a balance sheet of such Person in accordance with GAAP. The amount
of such obligations shall be the capitalized amount thereof
91
<PAGE>
in accordance with GAAP and the stated maturity thereof shall be the date of
the last payment of rent or any other amount due under such lease prior to the
first date upon which such lease may be terminated by the lessee without
payment of a penalty.
"Capital Stock" of any Person means any and all shares, interests, rights to
purchase, warrants options, participations or other equivalents of or
interests in (however designated) of corporate stock or other equity
participations, including partnership interest, whether general or limited of
such Person.
"Cash Equivalents" means (i) direct obligations of, or obligations the
principal of and interest on which are unconditionally guaranteed by, the
United States of America (or by any agency thereof to the extent such
obligations are backed by the full faith and credit of the United States of
America), in each case maturing within one year from the date of acquisition
thereof; (ii) investments in commercial paper maturing within 365 days from
the date of acquisition thereof and having, at such date of acquisition, the
highest credit rating obtainable from Standard & Poor's Corporation or from
Moody's Investors Service; (iii) investments in certificates of deposit,
banker's acceptance and time deposits maturing within 365 days from the date
of acquisition thereof issued or guaranteed by or placed with, and money
market deposit accounts issued or offered by, any domestic office of any
commercial bank organized under the laws of the United States of America or
any State thereof which has a combined capital and surplus and undivided
profits of not less than $500,000,000; (iv) fully collateralized repurchase
agreements with a term of not more than 30 days for securities described in
clause (i) above and entered into with a financial institution satisfying the
criteria described in clause (iii) above; and (v) money market funds
substantially all of whose assets comprise securities of the type described in
clauses (i) through (iii).
"Change of Control" means the occurrence of one or more of the following
events: (i) any "person" or "group" (as such terms are used in Section 13(d)
and 14(d) of the Exchange Act) other than a Permitted Holder or Permitted
Holders or a person or group controlled by a Permitted Holder or Permitted
Holders becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5
under the Exchange Act, except that a person shall be deemed to have
"beneficial ownership" of all such securities that such person has the right
to acquire within one year, upon the happening of an event or otherwise), is
or becomes the "beneficial owner" (as defined in Rule 13d-3 and 13d-5 under
the Exchange Act), directly or indirectly, of (A) securities of Triton PCS
Holdings, Inc. representing 50% or more of the combined voting power of Triton
PCS Holdings, Inc.'s then outstanding Voting Stock, or (B) securities of the
Company representing 50% or more of the combined voting power of the Company's
then outstanding Voting Stock; (ii) the following individuals cease for any
reason to constitute more than a majority of the number of directors then
serving on the Board of Triton PCS Holdings, Inc. or the Company: individuals
who, on the date hereof, constitute the Board and any new director (other than
a director whose initial assumption of the office is in connection with an
actual or threatened election contest, including but not limited to a consent
solicitation, relating to the election of directors of Triton PCS Holdings,
Inc. or the Company) whose appointment or election by the Board or nomination
for election by the Company's stockholders was approved by the vote of at
least two-thirds ( 2/3) of the directors then still in office or whose
appointment, election or nomination was previously so approved or recommended;
or (iii) the shareholders of Triton PCS Holdings, Inc. or of the Company shall
approve any Plan of Liquidation (whether or not otherwise in compliance with
the provisions of the Indenture).
For purposes of the foregoing, the transfer (by lease, assignment, sale or
otherwise, in a single transaction or series of transactions) of all or
substantially all of the properties or assets of one or more Subsidiaries of
the Company, the Capital Stock of which constitutes all or substantially all
of the properties and assets of the Company, shall be deemed to be the
transfer of all or substantially all of the properties and assets of the
Company.
"Common Stock" of any Person means Capital Stock of such Person that does
not rank prior, as to the payment of dividends or as to the distribution of
assets upon any voluntary or involuntary liquidation, dissolution or winding
up of such Person, to shares of Capital Stock of any other class of such
Person.
92
<PAGE>
"Commission" means the Securities and Exchange Commission.
"Consolidated Cash Flow" of any Person means for any period the Consolidated
Net Income of such Person for such period (x) increased (to the extent
Consolidated Net Income for such period has been reduced thereby) by the sum
of (without duplication) (i) Consolidated Interest Expense of such Person for
such period, plus (ii) Consolidated Income Tax Expense of such Person for such
period, plus (iii) the consolidated depreciation and amortization expense of
such Person and its Restricted Subsidiaries for such period, plus (iv) any
other non-cash charges of such Person and its Restricted Subsidiaries for such
period except for any non-cash charges that represent accruals of, or reserves
for, cash disbursements to be made in any future accounting period and (y)
decreased (to the extent Consolidated Net Income for such period has been
increased thereby) by any non-cash gains from Asset Dispositions.
"Consolidated Income Tax Expense" of any Person means for any period the
consolidated provision for income taxes of such Person and its Restricted
Subsidiaries for such period calculated on a consolidated basis in accordance
with GAAP.
"Consolidated Interest Expense" for any Person means for any period, without
duplication, (a) the consolidated interest expense included in a consolidated
income statement (without deduction of interest or finance charge income) of
such Person and its Restricted Subsidiaries for such period calculated on a
consolidated basis in accordance with GAAP (including, without limitation, (i)
any amortization of debt discount, (ii) the net costs under interest rate
agreements, (iii) all capitalized interest, (iv) the interest portion of any
deferred payment obligation and (v) all amortization of any premiums, fees and
expenses payable in connection with the Incurrence of any Indebtedness, plus
(b) the interest component of Capital Lease Obligations paid, accrued and/or
scheduled to be paid or accrued by such Person and its Restricted Subsidiaries
during such period as determined on a consolidated basis in accordance with
GAAP.
"Consolidated Net Income" of any Person means for any period the
consolidated net income (or loss) of such Person and its Restricted
Subsidiaries for such period determined on a consolidated basis in accordance
with GAAP; provided, however, that there shall be excluded therefrom (a) the
net income (or loss) of any Person acquired by such Person or a Restricted
Subsidiary of such Person in a pooling-of-interests transaction for any period
prior to the date of such transaction, (b) the net income (but not loss) of
any Restricted Subsidiary of such Person which is subject to restrictions
which prevent or limit the payment of dividends or the making of distributions
to such Person to the extent of such restrictions (regardless of any waiver
thereof), (c) the net income of any Person that is not a Restricted Subsidiary
of such Person, except to the extent of the amount of dividends or other
distributions representing such Person's proportionate share of such other
Person's net income for such period actually paid in cash to such Person by
such other Person during such period, (d) gains or losses (other than for
purposes of calculating Consolidated Net Income under clause (3) of the first
paragraph under "Limitation on Restricted Payments") on Asset Dispositions by
such Person or its Restricted Subsidiaries, (e) all extraordinary gains (but
not, other than for purposes of calculating Consolidated Net Income under
clause (3) under "Limitation on Restricted Payments," losses) determined in
accordance with GAAP and (f) in the case of a successor to the referent Person
by consolidation or merger or as a transferee of the referent Person's assets,
any earnings (or losses) of the successor corporation prior to such
consolidation, merger or transfer of assets.
"Credit Agreement" means the Credit Facility dated February 3, 1998, among
the Company, certain domestic subsidiaries of the Company, the agent and
certain banks referred to therein, as such agreement is amended through the
Issue Date and from time to time thereafter.
"Default" means any event that is, or after notice or lapse of time or both
would become, an Event of Default.
"Designated Senior Debt" means (i) so long as any Indebtedness under one or
more Senior Credit Facilities is outstanding or any lender has any commitment
to extend credit to the Company thereunder, the Senior Debt Incurred under any
such Senior Credit Facility and (ii) so long as outstanding, any other Senior
Debt which has
93
<PAGE>
at the time of initial issuance an aggregate outstanding principal amount in
excess of $25.0 million which has been so designated as Designated Senior Debt
by the Board of the Company at the time of initial issuance in a resolution
delivered to the Trustee.
"Designation" has the meaning set forth under "--Certain Covenants--
Limitation on Designations of Unrestricted Subsidiaries."
"Designation Amount" has the meaning set forth under "--Certain Covenants--
Limitation on Designations of Unrestricted Subsidiaries."
"Disqualified Stock" of any Person means any Capital Stock of such Person
which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the option of the holder thereof,
in whole or in part, on or prior to the final maturity of the Notes.
"Equipment Subsidiary" means Triton PCS Equipment Company L.L.C., a Delaware
limited liability company.
"Equity Offering" means any public or private sale of Qualified Stock made
on a primary basis by the Company, Triton PCS Holdings, Inc. or a Special
Purpose Corporation, including through the issuance or sale of Qualified Stock
to one or more Strategic Equity Investors; provided that proceeds from such
issuance or sale of any Qualified Stock sold by Triton PCS Holdings, Inc. or
the Special Purpose Corporation, as the case may be, will be required, prior
to any redemption of Notes prior to May 1, 2001, to be contributed as equity
in exchange for Qualified Stock to, or be used to purchase Qualified Stock in,
the Company.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated by the Commission thereunder.
"Excluded Cash Proceeds" means the first $122 million of net cash proceeds
received by the Company subsequent to the Issue Date from capital
contributions in respect of Qualified Stock of the Company or from the issue
or sale (other than to a Restricted Subsidiary) of Qualified Stock of the
Company; provided, that if the Myrtle Beach System is not acquired on or prior
to March 31, 1999 pursuant to the Myrtle Beach Acquisition Agreement such
amount shall be reduced to the first $95 million received by the Company
subsequent to the Issue Date from capital contributions in respect of
Qualified Stock of the Company or from the issue or sale (other than to a
Restricted Subsidiary) of Qualified Stock of the Company.
"Fair Market Value" means, with respect to any asset or property, the price
that could be negotiated in an arm's-length free market transaction, for cash,
between a willing seller and a willing buyer, neither of whom is under
pressure or compulsion to complete the transaction. Unless otherwise specified
in the Indenture, Fair Market Value shall be determined by the Board of the
Company acting in good faith.
"GAAP" means generally accepted accounting principles, consistently applied,
as in effect from time to time in the United States of America, as set forth
in the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as is approved by a significant segment of the
accounting profession in the United States.
"Guarantee" means the guarantee of both the Private Notes and the Exchange
Notes by each Guarantor under the Indenture.
"Guarantor" means (i) each Restricted Subsidiary that, on the Issue Date, is
a direct or indirect obligor under, or in respect of, one or more Senior
Credit Facilities and (ii) each Restricted Subsidiary that pursuant to the
terms of the Indenture executes a supplement to the Indenture as a Guarantor,
in each case, until such Restricted Subsidiary is released from its Guarantee.
94
<PAGE>
"Incur" means, with respect to any Indebtedness or other obligation of any
Person, to create, issue, incur (including by conversion, exchange or
otherwise), assume, guarantee or otherwise become liable in respect of such
Indebtedness or other obligation or the recording, as required pursuant to
GAAP or otherwise, of any such Indebtedness or other obligation on the balance
sheet of such Person (and "Incurrence," "Incurred" and "Incurring" shall have
meanings correlative to the foregoing). Indebtedness of any Person or any of
its Restricted Subsidiaries existing at the time such Person becomes a
Restricted Subsidiary (or is merged into or consolidates with the Company or
any Restricted Subsidiary), whether or not such Indebtedness was incurred in
connection with, or in contemplation of, such Person becoming a Restricted
Subsidiary (or being merged into or consolidated with the Company or any
Restricted Subsidiary), shall be deemed Incurred at the time any such Person
becomes a Restricted Subsidiary or merges into or consolidates with the
Company or any Restricted Subsidiary.
"Indebtedness" means (without duplication), with respect to any Person,
whether recourse is to all or a portion of the assets of such Person and
whether or not contingent, (i) every obligation of such Person for money
borrowed, (ii) every obligation of such Person evidenced by bonds, debentures,
notes or other similar instruments, including obligations incurred in
connection with the acquisition of property, assets or businesses, (iii) every
reimbursement obligation of such Person with respect to letters of credit,
bankers' acceptances or similar facilities issued for the account of such
Person, (iv) every obligation of such Person issued or assumed as the deferred
purchase price of property or services (but excluding trade accounts payable
or accrued liabilities arising in the ordinary course of business which are
not overdue or which are being contested in good faith), (v) every Capital
Lease Obligation of such Person, (vi) every net obligation under interest rate
swap or similar agreements of such Person and (vii) every obligation of the
type referred to in clauses (i) through (vi) of another Person and all
dividends of another Person the payment of which, in either case, such Person
has guaranteed or is responsible or liable for, directly or indirectly, as
obligor, guarantor or otherwise. Indebtedness shall include the liquidation
preference and any mandatory redemption payment obligations in respect of any
Disqualified Stock of the Company and any Restricted Subsidiary, and any
Preferred Stock of a Subsidiary of the Company. Indebtedness shall never be
calculated taking into account any cash and cash equivalents held by such
Person. Indebtedness shall not include obligations arising from agreements of
the Company or a Restricted Subsidiary to provide for indemnification,
adjustment of purchase price, earn-out, or other similar obligations, in each
case, incurred or assumed in connection with the disposition of any business
or assets of a Restricted Subsidiary. The amount of any Indebtedness
outstanding as of any date shall be (i) the accreted value thereof, in the
case of any Indebtedness issued with original issue discount, (ii) the
principal amount thereof, in the case of any Indebtedness other than
Indebtedness issued with original issue discount, and (iii) the greater of the
maximum repurchase or redemption price or liquidation preference thereof, in
the case of any Disqualified Stock or Preferred Stock.
"Investment" by any Person means any direct or indirect loan, advance,
guarantee or other extension of credit or capital contribution to (by means of
transfers of cash or other property to others or payments for property or
services for the account or use of others, or otherwise), or purchase or
acquisition of Capital Stock, bonds, notes, debentures or other securities or
evidence of Indebtedness issued by any other Person.
"Issue Date" means May 4, 1998, the original issue date of the Notes.
"License Subsidiary" means Triton PCS License Company L.L.C., a Delaware
limited liability company.
"Lien" means, with respect to any property or assets, any mortgage or deed
of trust, pledge, hypothecation, assignment, security interest, lien, charge,
easement (other than any easement not materially impairing usefulness or
marketability), encumbrance, preference, priority or other security agreement
with respect to such property or assets (including, without limitation, any
conditional sale or other title retention agreement having substantially the
same economic effect as any of the foregoing).
"Material Subsidiary" means, at any date of determination, (a) any
Restricted Subsidiary that, together with its Subsidiaries that constitute
Restricted Subsidiaries (i) for the most recent fiscal year of the Company
accounted for more than 10.0% of the consolidated revenues of the Company and
the Restricted Subsidiaries or
95
<PAGE>
(ii) as of the end of such fiscal year, owned more than 10.0% of the
consolidated assets of the Company and the Restricted Subsidiaries, all as set
forth on the consolidated financial statements of the Company and the
Restricted Subsidiaries for such year prepared in conformity with GAAP, and
(b) any Restricted Subsidiary which, when aggregated with all other Restricted
Subsidiaries that are not otherwise Significant Restricted Subsidiaries and as
to which any event described in clause (h) of "Events of Default" above has
occurred, would constitute a Significant Restricted Subsidiary under clause
(a) of this definition.
"Myrtle Beach Acquisition Agreement" means the Asset Purchase Agreement
dated March 10, 1998 by and between the Company and Vanguard Cellular Systems
of South Carolina, Inc., including any amendments, modifications, supplements
or replacements thereof.
"Myrtle Beach System" means the existing cellular system serving the South
Carolina 5--Georgetown Rural Service Area.
"Net Available Proceeds" from any Asset Disposition by any Person means cash
or readily marketable cash equivalents received (including by way of sale or
discounting of a note, installment receivable or other receivable, but
excluding any other consideration received in the form of assumption by the
acquirer of Indebtedness or other obligations relating to such properties or
assets or received in any other non-cash form) therefrom by such Person,
including any cash received by way of deferred payment or upon the
monetization or other disposition of any non-cash consideration (including
notes or other securities) received in connection with such Asset Disposition,
net of (i) all legal, title and recording tax expenses, commissions and other
fees and expenses incurred and all federal, state, foreign and local taxes
required to be accrued as a liability as a consequence of such Asset
Disposition, (ii) all payments made by such Person or any of its Restricted
Subsidiaries on any Indebtedness which is secured by such assets in accordance
with the terms of any Lien upon or with respect to such assets or which must
by the terms of such Lien, or in order to obtain a necessary consent to such
Asset Disposition or by applicable law, be repaid out of the proceeds from
such Asset Disposition, (iii) all payments made with respect to liabilities
associated with the assets which are the subject of the Asset Disposition,
including, without limitation, trade payables and other accrued liabilities,
(iv) appropriate amounts to be provided by such Person or any Restricted
Subsidiary thereof, as the case may be, as a reserve in accordance with GAAP
against any liabilities associated with such assets and retained by such
Person or any Restricted Subsidiary thereof, as the case may be, after such
Asset Disposition, including, without limitation, liabilities under any
indemnification obligations and severance and other employee termination costs
associated with such Asset Disposition, until such time as such amounts are no
longer reserved or such reserve is no longer necessary (at which time any
remaining amounts will become Net Available Proceeds to be allocated in
accordance with the provisions of clause (iii) of the covenant of the
Indenture described under "--Covenants--Limitation on Certain Asset
Dispositions") and (v) all distributions and other payments made to minority
interest holders in Restricted Subsidiaries of such Person or joint ventures
as a result of such Asset Disposition.
"Net Investment" means the excess of (i) the aggregate amount of all
Investments made in any Unrestricted Subsidiary or joint venture by the
Company or any Restricted Subsidiary on or after the Issue Date (in the case
of an Investment made other than in cash, the amount shall be the Fair Market
Value of such Investment as determined in good faith by the Board of the
Company or such Restricted Subsidiary) over (ii) the aggregate amount returned
in cash on or with respect to such Investments whether through interest
payments, principal payments, dividends or other distributions or payments;
provided, however, that such payments or distributions shall not be (and have
not been) included in subclause (iii) of clause (3) of the first paragraph
described under "--Covenants--Limitation on Restricted Payments"; provided,
further, that with respect to all Investments made in any Unrestricted
Subsidiary or joint venture the amounts referred to in clause (ii) above with
respect to such Investments shall not exceed the aggregate amount of all such
Investments made in such Unrestricted Subsidiary or joint venture.
"Note Payment" has the meaning set forth in "Ranking."
96
<PAGE>
"Offer to Purchase" means a written offer (the "Offer") sent by the Company
by first class mail, postage prepaid, to each holder at his address appearing
in the register for the Notes on the date of the Offer offering to purchase up
to (i) the Accreted Value of Notes if such Offer is on or prior to May 1, 2003
or (ii) the principal amount at maturity of the Notes if such Offer is after
May 1, 2003 specified in such Offer at the purchase price specified in such
Offer (as determined pursuant to the Indenture). Unless otherwise required by
applicable law, the Offer shall specify an expiration date (the "Expiration
Date") of the Offer to Purchase which shall be not less than 30 days nor more
than 60 days after the date of such Offer and a settlement date (the "Purchase
Date") for purchase of Notes within five Business Days after the Expiration
Date. The Company shall notify the Trustee at least 15 Business Days (or such
shorter period as is acceptable to the Trustee) prior to the mailing of the
Offer of the Company's obligation to make an Offer to Purchase, and the Offer
shall be mailed by the Company or, at the Company's request, by the Trustee in
the name and at the expense of the Company. The Offer shall contain all the
information required by applicable law to be included therein. The Offer shall
contain all instructions and materials necessary to enable such holders to
tender Notes pursuant to the Offer to Purchase. The Offer shall also state:
(1) the Section of the Indenture pursuant to which the Offer to Purchase
is being made;
(2) the Expiration Date and the Purchase Date;
(3) the aggregate principal amount at maturity of the outstanding Notes
offered to be purchased by the Company pursuant to the Offer to Purchase
(including, if less than 100%, the manner by which such amount has been
determined pursuant to the Section of the Indenture requiring the Offer to
Purchase) (the "Purchase Amount");
(4) the purchase price to be paid by the Company for each $1,000
aggregate principal amount at maturity of Notes accepted for payment (as
specified pursuant to the Indenture) (the "Purchase Price");
(5) that the holder may tender all or any portion of the Notes registered
in the name of such holder and that any portion of a Note tendered must be
tendered in an integral multiple of $1,000 principal amount at maturity;
(6) the place or places where Notes are to be surrendered for tender
pursuant to the Offer to Purchase;
(7) that interest on any Note not tendered or tendered but not purchased
by the Company pursuant to the Offer to Purchase will continue to accrue;
(8) that on the Purchase Date the Purchase Price will become due and
payable upon each Note being accepted for payment pursuant to the Offer to
Purchase and that interest thereon shall cease to accrue on and after the
Purchase Date;
(9) that each holder electing to tender all or any portion of a Note
pursuant to the Offer to Purchase will be required to surrender such Note
at the place or places specified in the Offer prior to the close of
business on the Expiration Date (such Note being, if the Company or the
Trustee so requires, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Trustee
duly executed by, the holder thereof or his attorney duly authorized in
writing);
(10) that holders will be entitled to withdraw all or any portion of
Notes tendered if the Company (or its Paying Agent) receives, not later
than the close of business on the fifth Business Day next preceding the
Expiration Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the holder, the principal amount of the Note the
holder tendered, the certificate number of the Note the holder tendered and
a statement that such holder is withdrawing all or a portion of his tender;
(11) that (a) if Notes in an aggregate principal amount at maturity less
than or equal to the Purchase Amount are duly tendered and not withdrawn
pursuant to the Offer to Purchase, the Company shall purchase all such
Notes and (b) if Notes in an aggregate principal amount at maturity in
excess of the Purchase Amount are tendered and not withdrawn pursuant to
the Offer to Purchase, the Company shall purchase Notes having an aggregate
principal amount at maturity equal to the Purchase Amount on a pro rata
basis (with such adjustments as may be deemed appropriate so that only
Notes in denominations of $1,000 or integral multiples thereof shall be
purchased); and
97
<PAGE>
(12) that in the case of any holder whose Note is purchased only in part,
the Company shall execute and the Trustee shall authenticate and deliver to
the holder of such Note without service charge, a new Note or Notes, of any
authorized denomination as requested by such holder, in an aggregate
principal amount at maturity equal to and in exchange for the unpurchased
portion of the Note so tendered.
An Offer to Purchase shall be governed by and effected in accordance with
the provisions above pertaining to any Offer.
"Permitted Asset Swap" means any exchange of assets by the Company or a
Restricted Subsidiary of the Company where the Company and/or its Restricted
Subsidiaries receive consideration at least 75% of which consists of (a) cash,
(b) assets that are used or useful in a Permitted Business or (c) any
combination thereof.
"Permitted Business" means (i) the delivery or distribution of
telecommunications, voice, data or video services, (ii) any business or
activity reasonably related or ancillary thereto, including, without
limitation, any business conducted by the Company or any Restricted Subsidiary
on the Issue Date and the acquisition, holding or exploitation of any license
relating to the delivery of the services described in clause (i) of this
definition or (iii) any other business or activity in which the Company and
the Restricted Subsidiaries are expressly contemplated to be engaged in
pursuant to the provisions of the certificate of incorporation and by-laws of
the Company as in effect on the Issue Date.
"Permitted Holder" means (i) each of AT&T Corporation, Chase Capital
Partners, J.P. Morgan Investment Corporation, Desai Capital Management
Incorporated, and any of their respective Affiliates and the respective
successors (by merger, consolidation, transfer or otherwise) to all or
substantially all of the respective businesses and assets of any of the
foregoing and (ii) any "person" or "group" (as such terms are used in Section
13(d) and 14(d) of the Exchange Act) controlled by one or more persons
identified in clause (i) of this definition.
"Permitted Investments" means (i) Investments in Cash Equivalents; (ii)
Investments representing Capital Stock or obligations issued to the Company or
any Restricted Subsidiary in the course of the good faith settlement of claims
against any other Person or by reason of a composition or readjustment of debt
or a reorganization of any debtor of the Company or any Restricted Subsidiary;
(iii) deposits, including interest-bearing deposits, maintained in the
ordinary course of business in banks; (iv) any Investment in any Person;
provided, however, that after giving effect to any such Investment such Person
is or becomes a Restricted Subsidiary or such Person is merged, consolidated
or amalgamated with or into, or transfers or conveys substantially all of its
assets to, or is liquidated into, the Company or a Restricted Subsidiary of
the Company; (v) trade receivables and prepaid expenses, in each case arising
in the ordinary course of business; provided, however, that such receivables
and prepaid expenses would be recorded as assets of such Person in accordance
with GAAP; (vi) endorsements for collection or deposit in the ordinary course
of business by such Person of bank drafts and similar negotiable instruments
of such other Person received as payment for ordinary course of business trade
receivables; (vii) any interest rate agreements with an unaffiliated Person
otherwise permitted by clause (v) or (vi) under "--Covenants Limitation on
Incurrence of Indebtedness"; (viii) Investments received as consideration for
an Asset Disposition in compliance with the provisions of the Indenture
described under "--Covenants--Limitation on Certain Asset Dispositions" above;
(ix) loans or advances to employees of the Company or any Restricted
Subsidiary in the ordinary course of business in an aggregate amount not to
exceed $5.0 million in the aggregate at any one time outstanding; (xi) any
Investment acquired by the Company or any of its Restricted Subsidiaries as a
result of a foreclosure by the Company or any of its Restricted Subsidiaries
or in connection with the settlement of any outstanding Indebtedness or trade
payable; (xii) loans and advances to officers, directors and employees for
business-related travel expense, moving expenses and other similar expenses,
each incurred in the ordinary course of business; and (xiii) other Investments
(with each such Investment being valued as of the date made and without giving
effect to subsequent changes in value) in an aggregate amount not to exceed
$7.5 million at any one time outstanding.
"Permitted Junior Securities" means (i) Qualified Stock, (ii) securities of
the Company or any other corporation authorized by an order or decree giving
effect, and stating in such order or decree that effect is given,
98
<PAGE>
to the subordination of such securities to the Senior Debt, and made by a
court of competent jurisdiction in a reorganization proceeding under any
applicable bankruptcy, insolvency or other similar law, or (iii) any
securities of the Company provided for by a plan of reorganization or
readjustment that are subordinated in right of payment to all Senior Debt that
may at the time be outstanding to substantially the same extent as, or to a
greater extent than, the Notes are subordinated as provided in this Indenture.
"Person" means any individual, corporation, limited or general partnership,
joint venture, association, joint stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
"Plan of Liquidation" means, with respect to any Person, a plan (including
by operation of law) that provides for, contemplates or the effectuation of
which is preceded or accompanied by (whether or not substantially
contemporaneously) (i) the sale, lease, conveyance or other disposition of all
or substantially all of the assets of the referent Person and (ii) the
distribution of all or substantially all of the proceeds of such sale, lease,
conveyance or other disposition and all or substantially all of the remaining
assets of the referent Person to holders of Capital Stock of the referent
Person.
"Preferred Stock", as applied to the Capital Stock of any Person, means
Capital Stock of such Person of any class or classes (however designated) that
ranks prior, as to the payment of dividends or as to the distribution of
assets upon any voluntary or involuntary liquidation, dissolution or winding
up of such Person, to shares of Capital Stock of any other class of such
Person.
"Public Sale" means any underwritten public offering, made on a primary
basis pursuant to a registration statement filed with, and declared effective
by, the Commission in accordance with the Securities Act.
"Purchase Date" has the meaning set forth in the definition of "Offer to
Purchase" above.
"Qualified Stock" means any Capital Stock of the Company, Triton PCS
Holdings, Inc. or a Special Purpose Corporation other than Disqualified Stock.
"Real Property Subsidiary" means Triton PCS Property Company L.L.C., a
Delaware limited liability company.
"Refinance" means refinance, renew, extend, replace or refund; and
"Refinancing" and "Refinanced" have correlative meanings.
"Restricted Subsidiary" means any Subsidiary of the Company other than an
Unrestricted Subsidiary.
"Revocation" has the meaning set forth under "--Certain Covenants--
Limitation on Designations of Unrestricted Subsidiaries."
"Senior Credit Facilities" means upon the initial issuance of the Notes, the
Credit Agreement and at any time thereafter may include the Credit Agreement
and/or any other agreement providing for loans by banks, trust companies
and/or other institutions principally engaged in the business of lending money
to businesses under a credit facility, loan agreement or similar agreement.
"Senior Debt" means, with respect to any Person at any date, (i) in the case
of the Company or the Guarantors, all Indebtedness and other payment
obligations under one or more Senior Credit Facilities, including principal,
premium, if any, and interest on such Indebtedness and all other amounts due
on or in connection with such Indebtedness including all charges, fees,
expenses, reimbursement obligations, guarantees and indemnity payments, (ii)
all other Indebtedness of such Person for borrowed money or under Vendor
Credit Arrangements, including principal, premium, if any, and interest on
such Indebtedness, unless the instrument under which such Indebtedness for
money borrowed is created, incurred, assumed or guaranteed expressly provides
that such Indebtedness for money borrowed is not senior or superior in right
of payment to the Notes or the Guarantees, as
99
<PAGE>
the case may be, and all Refinancings or modifications or amendments thereof
and (iii) all interest on any Indebtedness referred to in clauses (i) and (ii)
accruing during the pendency of any bankruptcy or insolvency proceeding,
whether or not allowed thereunder. Notwithstanding the foregoing, Senior Debt
shall not include (a) Indebtedness which is pursuant to its terms or any
agreement relating thereto or by operation of law subordinated or junior in
right of payment or otherwise to any other Indebtedness of such Person;
provided, however, that no Indebtedness shall be deemed to be subordinate or
junior in right of payment or otherwise to any other Indebtedness of a Person
solely by reason of such other Indebtedness being secured and such
Indebtedness not being secured, (b) the Notes, (c) any Indebtedness of such
Person to any of its Subsidiaries, (d) Indebtedness Incurred in violation of
the provisions of the Indenture described under "--Covenants--Limitation on
Incurrence of Indebtedness" and (e) any Indebtedness which, when incurred and
without respect to any election under Section 1111(b) of the Bankruptcy Code,
is without recourse to the Company.
"Strategic Equity Investor" means any of the Initial Cash Equity Investors
(as defined in the Securities Purchase Agreement), any Affiliate thereof or
any other Person engaged in a Permitted Business whose Total Equity Market
Capitalization exceeds $500 million.
"Subordinated Indebtedness" means any Indebtedness of the Company or any
Guarantor (whether outstanding on the date hereof or hereafter Incurred) which
is by its terms expressly subordinate or junior in right of payment to the
Notes or the Guarantee of such Guarantor, as the case may be.
"Subsidiary" of any Person means (i) a corporation more than 50% of the
outstanding Voting Stock of which is owned, directly or indirectly, by such
Person or by one or more other Subsidiaries of such Person or by such Person
and one or more other Subsidiaries thereof or (ii) any other Person (other
than a corporation) in which such Person, or one or more other Subsidiaries of
such Person or such Person and one or more other Subsidiaries thereof,
directly or indirectly, has at least a majority ownership and voting power
relating to the policies, management and affairs thereof.
"Total Consolidated Indebtedness" means at any date of determination, an
amount equal to (i) the accreted value of all Indebtedness, in the case of any
Indebtedness issued with original issue discount, plus (ii) the principal
amount of all Indebtedness, in the case of any other Indebtedness, of the
Company and the Restricted Subsidiaries outstanding as of the date of
determination.
"Total Equity Market Capitalization" of any Person means, as of any day of
determination, the sum of (i) the product of (A) the aggregate number of
outstanding primary shares of common stock of such Person on such day (which
shall not include any options or warrants on, or securities convertible or
exchangeable into, shares of common stock of such Person) multiplied by (B)
the average closing price of such common stock listed on a national securities
exchange or the Nasdaq National Market System over the 20 consecutive business
days immediately preceding such day, plus (ii) the liquidation value of any
outstanding shares of preferred stock of such Person on such day.
"Total Invested Capital" means, at any time of determination, the sum of,
without duplication, (i) the total amount of equity contributed to the Company
as of the Issue Date (as set forth on the March 31, 1998 combined balance
sheet of the Company), plus (ii) irrevocable binding commitments to purchase
Capital Stock (other than Disqualified Stock) existing as of the Issue Date,
plus (iii) the aggregate net cash proceeds received by the Company from
capital contributions or the issuance or sale of Capital Stock (other than
Disqualified Stock but including Capital Stock issued upon the conversion of
convertible Indebtedness or from the exercise of options, warrants or rights
to purchase Capital Stock (other than Disqualified Stock)) subsequent to the
Issue Date, other than to a Restricted Subsidiary; provided, however, such
aggregate net cash proceeds received pursuant to this clause (iii) shall
exclude any amounts included as commitments to purchase Capital Stock in the
preceding clause (ii), plus (iv) the aggregate net cash proceeds received by
the Company or any Restricted Subsidiary from the sale, disposition or
repayment of any Investment made after the Issue Date and constituting a
Restricted Payment in an amount equal to the lesser of (a) the return of
capital with respect to such Investment and (b) the initial amount of such
Investment, in either case, less the cost of the disposition of such
Investment, plus (v) an amount
100
<PAGE>
equal to the consolidated net Investment on the date the Company and/or any of
the Restricted Subsidiaries in any Subsidiary that has been designated as an
Unrestricted Subsidiary after the Issue Date upon its redesignation as a
Restricted Subsidiary in accordance with the covenant described under "--
Certain Covenants--Limitation on Designations of Unrestricted Subsidiaries,"
plus (vi) Total Consolidated Indebtedness minus (vii) the aggregate amount of
all Restricted Payments (including any Designation Amount, but other than a
Restricted Payment of the type referred to in clause (iii)(b) of the third
paragraph of the covenant described under "--Certain Covenants--Limitation on
Restricted Payments") declared or made on or after the Issue Date.
"Unrestricted Subsidiary" means any Subsidiary of the Company (other than
the License Subsidiary, the Equipment Subsidiary or the Real Property
Subsidiary) designated after the Issue Date as such pursuant to and in
compliance with the covenant described under "--Certain Covenants--Limitation
on Designations of Unrestricted Subsidiaries." Any such designation may be
revoked by a Resolution of the Company delivered to the applicable Trustee,
subject to the provisions of such covenant.
"Vendor Credit Arrangement" means any Indebtedness (including, without
limitation, Indebtedness under any credit facility entered into with any
vendor or supplier or any financial institution acting on behalf of such
vendor or supplier); provided that the net proceeds of such Indebtedness are
utilized solely for the purpose of financing the cost (including, without
limitation, the cost of design, development, site acquisition, construction,
integration, handset manufacture or acquisition or microwave relocation) of
assets used or usable in a Permitted Business (including, without limitation,
through the acquisition of Capital Stock of an entity engaged in a Permitted
Business).
"Voting Stock" of any Person means the Capital Stock of such Person which
ordinarily has voting power for the election of directors (or persons
performing similar functions) of such Person, whether at all times or only so
long as no senior class of securities has such voting power by reason of any
contingency.
"Wholly Owned Subsidiary" means a Restricted Subsidiary, all of the
outstanding Capital Stock or other ownership interests of which (other than
directors' qualifying shares) shall at the time be owned by the Company and/or
by one or more Wholly Owned Subsidiaries.
101
<PAGE>
DESCRIPTION OF CAPITAL STOCK
GENERAL
The authorized capital stock of Holdings, as set forth in the Restated
Certificate of Incorporation of Triton PCS Holdings, Inc. (the "Restated
Certificate of Incorporation"), consists of (i) 5,500,000 shares of preferred
stock, par value $0.01 per share (the "Preferred Stock"), including 1,000,000
shares designated "Series A Convertible Preferred Stock" (the "Series A
Preferred Stock"), 2,000,000 shares designated "Series B Preferred Stock" (the
"Series B Preferred Stock"), 2,000,000 shares designated "Series C Convertible
Preferred Stock" (the "Series C Preferred Stock") and 500,000 shares
designated "Series D Convertible Preferred Stock" (the "Series D Preferred
Stock") and (ii) 10,000,000 shares of common stock, par value $0.01 per share
(the "Common Stock"). As of the date hereof, 732,371 shares of Series A
Preferred Stock, 1,750,000 shares of Series C Preferred Stock, 366,131 shares
of Series D Preferred Stock and 235,125.68 shares of Common Stock are
outstanding. In addition, no shares of Series A Preferred Stock, 1,098,502
shares of Series B Preferred Stock, 366,131 shares of Series C Preferred
Stock, no shares of Series D Preferred Stock and 2,848,502 shares of Common
Stock are reserved for issuance in connection with transactions contemplated
to occur after the Securities Purchase Closing Date pursuant to the
Stockholders' Agreement.
SERIES A PREFERRED STOCK
The Series A Preferred Stock, with respect to dividend rights and rights on
liquidation, dissolution or winding up, ranks on a parity basis with the
Series B Preferred Stock, and ranks senior to the Series C Preferred Stock,
the Series D Preferred Stock, the Common Stock and any other series or class
of Holdings' preferred or common stock, now or hereafter authorized. The
holders of Series A Preferred Stock are entitled to cumulative quarterly cash
dividends at the annual rate of 10% multiplied by the aggregate accreted value
thereof. Holdings may elect to defer payment of any such dividends until the
42nd quarterly payment is due, at which time (and not earlier) all deferred
payments must be made. Except as required by law or in certain specified
instances, the holders of the Series A Preferred Stock do not have any voting
rights. So long as AT&T PCS owns at least two-thirds of the number of shares
of Series A Preferred Stock owned by it on February 4, 1998, AT&T PCS has the
exclusive right, voting separately as a single class, to elect one director of
Holdings. The Series A Preferred Stock is redeemable at its accreted value at
the option of Holdings on or after February 4, 2008 and at the option of the
holders of the Series A Preferred Stock on or after February 4, 2018. Upon any
liquidation, dissolution or winding up of Holdings, the holders of the Series
A Preferred Stock are entitled to the accreted value thereof. Additionally, on
or after February 4, 2006, AT&T PCS (and certain of its affiliates) and
qualified transferees have the right to convert each share of Series A
Preferred Stock into Common Stock at its accreted value divided by the market
price of one share of Common Stock.
SERIES B PREFERRED STOCK
The Series B Preferred Stock ranks on a parity basis with the Series A
Preferred Stock and is identical in all respects to the Series A Preferred
Stock except (a) the Series B Preferred Stock is not convertible into the
Common Stock or any other security of Holdings at any time, (b) the Series B
Preferred Stock is redeemable at its accreted value at any time at the option
of Holdings and (c) holders of Series B Preferred Stock shall not have the
right to elect any directors of Holdings.
SERIES C PREFERRED STOCK
The Series C Preferred Stock ranks junior to the Series A Preferred Stock
and Series B Preferred Stock with respect to dividend rights and rights on
liquidation, dissolution or winding up, ranks junior to the Series D Preferred
Stock with respect to rights on a statutory liquidation, ranks on a parity
basis with the Series D Preferred Stock and Common Stock with respect to
dividend rights, and ranks senior to the Common Stock and any other series or
class of Holdings' preferred or common stock, now or hereafter authorized
(other than Series A Preferred Stock, Series B Preferred Stock or Series D
Preferred Stock), with respect to rights on liquidation, dissolution and
winding up. The holders of Series C Preferred Stock are entitled to dividends
when, as and if
102
<PAGE>
declared by the Board of Directors of Holdings. Upon any liquidation,
dissolution or winding up of Holdings, the holders of the Series C Preferred
Stock are entitled to, after payment to any stock ranking senior to the Series
C Preferred Stock, a liquidation preference of $100 per share, subject to
adjustment. The holders of the Series C Preferred Stock have the right at any
time to convert each share of Series C Preferred Stock (and upon the IPO Date
each share of Series C Preferred Stock automatically converts) into one share
of Common Stock, subject to adjustment. On all matters to be submitted to the
stockholders of Holdings, the holders of the Series C Preferred Stock shall
have the right to vote on an as-converted basis as a single class with the
holders of the Common Stock. Additionally, the vote of the holders of a
majority of the Series C Preferred Stock is required in certain instances. The
Series C Preferred Stock is not redeemable.
SERIES D PREFERRED STOCK
The Series D Preferred Stock ranks junior to the Series A Preferred Stock
and the Series B Preferred Stock with respect to dividend rights and rights on
liquidation, dissolution or winding up, ranks senior to the Series C Preferred
Stock with respect to rights on a statutory liquidation, ranks on a parity
basis with the Series C Preferred Stock and Common Stock with respect to
dividend rights, and ranks senior to the Common Stock and any other series or
class of Holdings' common or preferred stock now or hereafter authorized
(other than Series A Preferred Stock, Series B Preferred Stock or Series C
Preferred Stock), with respect to rights on liquidation, dissolution and
winding up. Subject to the preceding sentence, the Series D Preferred Stock is
identical in all respects to the Series C Preferred Stock except (a) the
Series D Preferred Stock is convertible into an equivalent number of shares of
Series C Preferred Stock at any time, (b) except as required by law or in
certain specified instances, the holders of the Series D Preferred Stock do
not have any voting rights, and (c) shares of Series D Preferred Stock are not
subject to automatic conversion upon the IPO Date (provided that the
conversion rate will be set on the IPO Date, subject to adjustment).
COMMON STOCK
Each holder of Common Stock is entitled to one vote for each share of Common
Stock on all matters on which stockholders generally are entitled to vote and
to all other rights, powers and privileges of stockholders under Delaware law.
Upon the dissolution, liquidation or winding up of Holdings, after any
preferential amounts to be distributed to the holders of the preferred stock
of Holdings then outstanding have been paid or declared and funds sufficient
for payment thereof in full set apart for payment, the holders of the Common
Stock will be entitled to receive pro rata all the remaining assets of
Holdings available for distribution to its stockholders.
LIMITATION ON DIRECTORS' LIABILITIES
The Delaware General Corporation Law authorizes corporations to limit or
eliminate the personal liability of directors to corporations and their
stockholders for monetary damages for breach of directors' fiduciary duty of
care. The duty of care requires that, when acting on behalf of the
corporation, directors must exercise an informed business judgment based on
all material information reasonably available to them. In the absence of the
limitations authorized by the Delaware statute, directors could be accountable
to corporations and their stockholders for monetary damages for conduct that
does not satisfy their duty of care. Although the statute does not change
directors' duty of care, it enables corporations to limit available relief to
equitable remedies such as injunction or rescission. The Restated Certificate
of Incorporation limits the liability of Holdings' directors to Holdings or
its stockholders to the fullest extent permitted by the Delaware statute.
Specifically, the directors of Holdings will not be personably liable for
monetary damages for breach of a director's fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of loyalty to
Holdings or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii)
under Section 174 of the Delaware General Corporation Law (which relates to
the unlawful payment of dividend or unlawful stock purchase or redemption by a
corporation ) or (iv) for any transaction from which a director derived an
improper personal benefit. The inclusion of this provision in the Restated
Certificate of Incorporation may have the effect of reducing the likelihood of
derivative litigation against directors and may discourage or deter
stockholders or management from bringing a lawsuit against directors for
breach of their duty of care, even though such an action, if successful, might
otherwise have benefited Holdings and its stockholders. In addition, pursuant
to the terms of the Kalogris and the Skinner Employment Agreements, the
Company will purchase director's and officer's liability insurance coverage
for such executives in amounts customary for similarly situated companies.
103
<PAGE>
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following is a discussion of certain material United States federal
income and estate tax consequences of the acquisition, ownership and
disposition of the Notes. Unless otherwise stated, this discussion is limited
to the tax consequences to those persons who hold such Notes as capital assets
within the meaning of Section 1221 of the Internal Revenue Code of 1986, as
amended (the "Code") (for purposes of this section, "Holders"). The discussion
does not purport to address specific tax consequences that may be relevant to
particular persons (including, for example, financial institutions, broker-
dealers, insurance companies, tax-exempt organizations, and persons in special
situations, such as those who hold Notes as part of a straddle, hedge,
conversion transaction, or other integrated investment). In addition, this
discussion does not address U.S. federal alternative minimum tax consequences
or any aspect of state, local or foreign taxation. This discussion is based
upon the Code, the Treasury regulations promulgated thereunder and
administrative and judicial interpretations thereof, all of which are subject
to change, possibly on a retroactive basis.
For purposes of this discussion, a "U.S. Holder" is any United States
citizen or resident, corporation or partnership or other entity created or
organized in or under the laws of the United States or any state thereof,
estate the income of which is subject to United State federal income taxation
regardless of its source, or trust if a United States court exercises primary
jurisdiction over its administration and one or more United States persons
have the authority to control all of its substantial decisions. A "Foreign
Holder" is any Holder other than a U.S. Holder.
PROSPECTIVE PURCHASERS OF THE NOTES ARE URGED TO CONSULT THEIR TAX ADVISORS
CONCERNING THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES TO THEM TO
ACQUIRING, OWNING AND DISPOSING OF THE NOTES, AS WELL AS THE APPLICATION OF
STATE, LOCAL AND FOREIGN INCOME AND OTHER TAX LAWS.
EXCHANGE OF PRIVATE NOTES FOR EXCHANGE NOTES
There will be no federal income tax consequences to Holders exchanging
Private Notes for Exchange Notes pursuant to the Exchange Offer. For federal
income tax purposes, the Exchange Notes will be considered a continuation of
the Private Notes and the exchange of Private Notes for Exchange Notes
hereunder will not alter the federal income tax consequences, including the
accrual of original issue discount ("OID") on the Private Notes, as described
below, of owning the Private Notes to Holders. A Holder will have the same
adjusted basis and holding period in the Exchange Notes as it had in the
Private Notes immediately before the exchange.
CHARACTERIZATION OF THE NOTES
Triton will treat the Notes as indebtedness for federal income tax purposes,
and the following discussion assumes that such treatment will be respected.
TAX CONSEQUENCES TO U.S. HOLDERS
Taxation of Interest. The Notes will be treated as issued with OID. Thus,
all U.S. Holders, regardless of their method of accounting for tax purposes,
will be required to include OID in income as it accrues. OID will generally be
treated as interest income to the U.S. Holder and will accrue on a yield-to-
maturity basis over the life of the Notes, as discussed below.
The amount of OID with respect to a Note will be an amount equal to the
excess of the stated redemption price at maturity of such Note over the issue
price of such Note. The stated redemption price at maturity of each Note will
include all cash payments, including principal and interest, required to be
made under the Note through maturity. Stated interest on the Note will not
qualify as qualified stated interest and, thus, instead of being included in
income when accrued or paid, stated interest on the Notes will be taxed as a
part of OID on the Notes. The issue price of a Note will be the first price at
which a substantial portion of it is sold to the public (subject to certain
exceptions) for cash.
104
<PAGE>
The amount of OID accruing to a Holder with respect to any Note will be the
sum of the "daily portions" of OID with respect to such Note for each day
during the taxable year on which such Holder owns such Note ("accrued OID").
The daily portion is determined by allocating to each day in any "accrual
period" a pro rata portion of the OID allocable to that accrual period. An
accrual period may be of any length and may vary in length over the term of a
Note provided that each accrual period is no longer than one year and each
scheduled payment of principal or interest occurs either on the final day or
on the first day of an accrual period. The amount of OID accruing during any
full accrual period with respect to a Note will be equal to the following
amount: (i) the "adjusted issue price" of such Note at the beginning of that
accrual period, multiplied by (ii) the yield to maturity of such Note (taking
into account the length of the accrual period). OID allocable to a final
accrual period is the difference between the amount payable at maturity and
the adjusted issue price at the beginning of the final accrual period. If all
accrual periods are of equal length, except for an initial short accrual
period, the amount of OID allocable to the initial short accrual period may be
computed under any reasonable method. The adjusted issue price of a Note at
the beginning of its first accrual period will be equal to its issue price.
The adjusted issue price at the beginning of any subsequent accrual period
will be equal to (i) the adjusted issue price at the beginning of the
preceding accrual period, plus (ii) the amount of OID accrued during the
preceding accrual period, minus (iii) any payments made on the Note during the
preceding accrual period and on the first day of such subsequent accrual
period.
In the event of a Change of Control, the Holders of Notes will have the
right to require Triton to purchase their Notes. The Treasury regulations
provide that the right of Holders of the Notes to require redemption of the
Notes upon the occurrence of a Change of Control will not affect the yield or
maturity date of the Notes unless, based on all the facts and circumstances as
of the issue date, it is more likely than not that a Change of Control giving
rise to the redemption right will occur. Triton does not intend to treat this
redemption provision of the Notes as affecting the computation of the yield to
maturity of the Note.
Triton may redeem the Notes at any time on or after a certain date, and, in
certain circumstances, may redeem or repurchase all or a portion of the Notes
any time prior to the maturity date. Under the Treasury regulations, Triton is
deemed to exercise any option to redeem if the exercise of such option would
lower the yield of the debt instrument. Triton believes, and intends to take
the position, that it will not be treated as having exercised an option to
redeem under these rules.
Market Discount and Premium. If a U.S. Holder purchased a Note for an amount
that was less than its "adjusted issue price", the amount of the difference
would be treated as "market discount" for federal income tax purposes, unless
such difference was less than a specified de minimis amount. The adjusted
issue price of a Note is defined as the sum of the issue price of the Note and
the aggregate amount of previously accrued OID, less any prior principal and
interest payments on the Note.
Under the market discount rules, a U.S. Holder will be required to treat any
prior payment on, or any gain on the sale, exchange, retirement or other
disposition of, a Note as ordinary income to the extent of the market discount
which has not previously been included in income (pursuant to an election by
the U.S. Holder to include such market discount in income as it accrues) and
is treated as having accrued on such Note at the time of such payment or
disposition. If such Note is disposed of in a nontaxable transaction (other
than as provided in Code Sections 1276(c) and (d)), accrued market discount
will be includible as ordinary income to the U.S. Holder as if such Holder had
sold the Note at its then fair market value. In addition, the U.S. Holder may
be required to defer, until the maturity of the Note or its earlier
disposition (including a nontaxable transaction other than as provided in Code
Sections 1276(c) and (d)), the deduction of all or a portion or the interest
expense on any indebtedness incurred or maintained to purchase or carry such
Note.
A U.S. Holder who purchased a Note for an amount that was greater than its
adjusted issue price but less than its stated redemption price at maturity
would be considered to have purchased such Note at any "acquisition premium."
Under the acquisition premium rules of the Code and the regulations
thereunder, unless such Holder makes the election described under "Election to
Treat all Interest as Original Issue Discount" below, the amount of OID which
such Holder must include in its gross income with respect to such Note for any
taxable year will be reduced by the portion of such acquisition premium
properly allocable to such year.
105
<PAGE>
Election to Treat All Interest as Original Issue Discount. A U.S. Holder may
elect to include in gross income all interest that accrues on a Note using the
constant-yield method described above under "Taxation of Interest", with the
modifications described below. For purposes of this election, interest
includes stated interest, OID, de minimis OID, market discount, de minimis
market discount and unstated interest, as adjusted by any amortizable bond
premium or acquisition premium.
In applying the constant-yield method to a Note with respect to which this
election has been made, the issue price of the Note will equal the electing
U.S. Holder's adjusted basis in the Note immediately after its acquisition and
the issue date of the Note will be the date of its acquisition by the electing
U.S. Holder. This election will generally apply only to the Note with respect
to which it is made and may not be revoked without the consent of the Internal
Revenue Service.
If the election to apply the constant-yield method to all interest on a Note
is made with respect to a Note with market discount, the electing U.S. Holder
will be treated as having made the election discussed above under "Market
Discount" to include market discount in income currently over the life of all
debt instruments held or thereafter acquired by such U.S. Holder.
Sale, Exchange or Retirement of the Notes. Upon the sale, exchange or
retirement of Notes, a U.S. Holder will recognize gain or loss equal to the
difference between the amount realized upon the sale, exchange or retirement
and the U.S. Holder's adjusted tax basis in the Notes. A U.S. Holder's
adjusted tax basis in the Notes will generally be the U.S. Holder's cost
therefor, increased by the amount of OID previously accrued on the Notes
through the sale, exchange or retirement date and decreased by the amount of
all prior cash payments received with respect to the Notes.
Except as otherwise described under "Market Discount and Premium" above,
gain or loss recognized by a U.S. Holder on the sale, exchange, or retirement
of the Notes will be capital gain or loss. The gain or loss will be long-term
capital gain or loss if the Notes have been held by the U.S. Holder for more
than 12 months. A Holder of Notes who is an individual may qualify for a
reduced long-term capital gains tax rate that is lower than the tax rate
generally applicable to long-term capital gains if the Holder has held his or
her Notes for more than 18 months.
TAX CONSEQUENCES TO FOREIGN HOLDERS
Assuming that the interest income received by a Foreign Holder is not
effectively connected with the Foreign Holder's conduct of a trade or business
in the United States, a Foreign Holder generally will not be subject to United
States federal income or withholding tax on such interest so long as the
Foreign Holder (i) is not actually or constructively a "10 percent
shareholder" of Triton or a "controlled foreign corporation" with respect to
which Triton is a "related person" within the meaning of the Code, and (ii)
provides an appropriate statement, signed under penalties of perjury,
certifying that the beneficial owner of the Note is a foreign person and
providing that foreign person's name and address. If the foregoing conditions
are not satisfied, then interest paid on the Notes will be subject to United
States withholding tax at a rate of 30 percent, unless such rate is reduced or
eliminated pursuant to an applicable tax treaty.
Any capital gain a Foreign Holder realized on the sale, exchange, retirement
or other taxable disposition of a Note will be exempt from United States
federal income and withholding tax, provided that (a) the gain is not
effectively connected with the Foreign Holder's conduct of a trade or business
in the United States, (b) in the case of a Foreign Holder that is an
individual, the Foreign Holder is not present in the United States for 183
days or more in the taxable year and (c) the Foreign Holder is not subject to
tax pursuant to the provisions of U.S. tax law applicable to certain
expatriates.
If the interest, gain or other income a Foreign Holder recognizes on a Note
is effectively connected with the Foreign Holder's conduct of a trade or
business in the United States, the Foreign Holder (although exempt from the
withholding tax previously discussed if an appropriate statement is furnished)
generally will be subject to United States federal income tax on the interest,
gain or other income at regular federal income tax rates. In addition, if the
Foreign Holder is a foreign corporation, it may be subject to a branch profits
tax equal to 30 percent of its "effectively connected earnings and profits,"
as adjusted for certain items, unless it qualifies for a lower rate under an
applicable tax treaty.
106
<PAGE>
If interest on the Notes is exempt from withholding of United States federal
income tax under the rules described above, the Notes will not be included in
the estate of a deceased Foreign Holder for United States federal estate tax
purposes.
INFORMATION REPORTING AND BACKUP WITHHOLDING
Triton will be required to report annually to the IRS, and to each Holder of
record, the amount of interest paid on the Notes (and the amount of interest
withheld for federal income taxes, if any) for each calendar year, except as
to exempt Holders (generally, corporations, tax-exempt organizations,
qualified pension and profit-sharing trusts, individual retirement accounts,
or nonresident aliens who provide certification as to their status). Each
Holder (other than Holders who are not subject to the reporting requirements)
will be required to provide to Triton, under penalties of perjury, a
certificate containing the Holder's name, address, correct federal taxpayer
identification number and a statement that the Holder is not subject to backup
withholding. Should a nonexempt Holder fail to provide the required
certificate, Triton will be required to withhold 31% of the interest otherwise
payable to the Holder and to remit the withheld amount to the IRS as a credit
against the Holder's federal income tax liability.
In the case of payments of interest to Foreign Holders, temporary Treasury
regulations provide that the 31% backup withholding tax and certain
information reporting will not apply to such payments with respect to which
the requisite certification, as described above (for the exemption from the
30% withholding tax), has been received or an exemption has otherwise been
established; provided that neither the Company nor its payment agent has
actual knowledge that the holder is a United States person or that the
conditions of any other exemption are not in fact satisfied. Under temporary
Treasury regulations, these information reporting and backup withholding
requirements will apply, however, to the gross proceeds paid to a Foreign
Holder on the disposition of the Notes by or through a United States office of
a United States or foreign broker, unless the holder certifies to the broker
under penalties of perjury as to its name, address and status as a foreign
person or the holder otherwise establishes an exemption. Information reporting
requirements will also apply to a payment of the proceeds of a disposition of
the Notes by or through a foreign office of a United States broker or foreign
brokers with certain types of relationships to the United States unless such
broker has documentary evidence in its file that the holder of the Notes is
not a United States person, and such broker has no actual knowledge to the
contrary, or the holder establishes an exception; backup witholding will not
apply to such payment, absent actual knowledge that the holder is a U.S.
Holder. Neither information reporting nor backup withholding generally will
apply to a payment of the proceeds of a disposition of the Notes by or through
a foreign office of a foreign broker not subject to the preceding sentence.
The Treasury Department recently promulgated final regulations regarding the
withholding and information reporting rules relating to Foreign Holders
discussed above. In general, the final regulations do not significantly alter
the substantive withholding and information reporting requirements but rather
unify current certification procedures and forms and clarify reliance
standards. The final regulations are generally effective for payments made
after December 31, 1999, subject to certain transition rules. FOREIGN HOLDERS
SHOULD CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE IMPACT, IF ANY, OF
THE NEW FINAL REGULATIONS.
APPLICABLE HIGH-YIELD DISCOUNT OBLIGATIONS
If the Notes are considered to have "significant OID" and if the yield of
the Notes is at least five percentage points above the applicable federal
rate, Triton would not be able to deduct for tax purposes any OID accruing
with respect thereto until such interest is actually paid. In addition, in
that event, if the yield of the Notes is more than six percentage points above
the applicable federal rate, then (i) a portion of such interest corresponding
to the yield in excess of six percentage points above the applicable federal
rate would not be deductible by Triton at any time, and (ii) a U.S. corporate
holder may be entitled to treat the interest that would not be not deductible
as a dividend to the extent of the earnings and profits of Triton, which may
then qualify for the dividends received deduction. In such event, U.S.
corporate holders should consult their tax advisors concerning the
availability of the dividends received deduction. Based on the applicable
federal rate for May of 1998, the Notes will be considered as applicable high-
yield discount obligations since the yield on the Notes exceeds such rate by
more than five percentage points, but the yield will not exceed such rate by
more than six percentage points.
107
<PAGE>
BOOK-ENTRY; DELIVERY AND FORM
Except as set forth below, the Notes will initially be issued in the form of
a global note (the "Global Note"). The Global Note will be deposited on the
Closing Date with, or on behalf of, the Depositary and registered in the name
of Cede & Co., as nominee of the Depositary.
Notwithstanding the foregoing, Notes (i) originally issued to or transferred
to institutional "accredited investors," as defined in Rule 501(a)(1), (2),
(3) or (7) under the Securities Act, who are not qualified institutional
buyers or to any other persons who are not qualified institutional buyers or
(ii) held by qualified institutional buyers who elect to take physical
delivery of their certificates instead of holding their interest through the
Global Note (and which are thus ineligible to trade through the Depositary)
(collectively referred to herein as "Non-Global Purchasers") will be issued,
in registered form, without interest coupons as "Certificated Notes." Upon the
transfer to a qualified institutional buyer of such Certificated Notes
initially issued to a Non-Global Purchaser, such Certificated Notes will,
unless the transferee requests otherwise or the Global Note has previously
been exchanged in whole for Certificated Securities, be exchanged for an
interest in the Global Note representing the principal amount of Notes being
transferred.
The Depositary has advised the Company that it is (i) a limited-purpose
trust company organized under the laws of the State of New York, (ii) is a
member of the Federal Reserve System, (iii) a "clearing operation" within the
meaning of the Uniform Commercial Code, as amended, and (iv) a "Clearing
Agency" registered pursuant to Section 17A of the Exchange Act. The Depositary
was created to hold securities for its participating organizations
(collectively, the "Participants" or the "Depositary's Participants") and to
facilitate the clearance and settlement of transactions in such securities
between Participants through electronic book-entry changes in accounts of its
Participants, thereby eliminating the need for physical movement of
certificates. The Depositary's Participants include securities brokers and
dealers (including the Initial Purchasers), banks and trust companies,
clearing corporations and certain other organizations. Access to the
Depositary's system is also available to other entities such as banks,
brokers, dealers and trust companies (collectively, the "Indirect
Participants" or the "Depositary's Indirect Participants") that clear through
or maintain a custodial relationship with a Participant, either directly or
indirectly. Qualified institutional buyers may elect to hold Notes purchased
by them through the Depositary. Qualified institutional buyers who are not
Participants may beneficially own securities held by or on behalf of the
Depositary only through Participants or Indirect Participants. Persons that
are not qualified institutional buyers may not hold Notes through the
Depositary.
The Company expects that pursuant to procedures established by the
Depositary (i) upon deposit of the Global Note, the Depositary will credit the
accounts of Participants designated by the Initial Purchasers with an interest
in the Global Note and (ii) ownership of the Notes will be shown on, and the
transfer of ownership thereof will be effected only through, records
maintained by the Depositary (with respect to the interests of the
Depositary's Participants), the Depositary's Participants and the Depositary's
Indirect Participants. The laws of some states require that certain persons
take physical delivery in definitive form of securities that they own and that
security interests in negotiable instruments can only be perfected by delivery
of certificates representing the instruments. Consequently, the ability to
transfer Notes or to pledge the Notes as collateral will be limited to such
extent.
So long as the Depositary or its nominee is the registered owner or holder
of the Global Note, the Depositary or such nominee will be considered the sole
owner or holder of the Notes represented by the Global Note for all purposes
under the Indenture. Except as provided below, owners of beneficial interests
in the Global Note will not be entitled to have Notes represented by such
Global Note registered in their names, will not receive or be entitled to
receive physical delivery of Certificated Notes, and will not be considered
the owners or holders thereof under the Indenture for any purpose, including
with respect to the giving of any directions, instructions or approvals to the
Trustee thereunder. As a result, the ability of a person having a beneficial
interest in Notes represented by the Global Note to pledge such interest to
persons or entities that do not participate in the Depositary's system, or to
otherwise take actions with respect to such interest, may be affected by the
lack of a physical certificate evidencing such interest.
108
<PAGE>
Accordingly, each qualified institutional buyer owing a beneficial interest
in the Global Note must rely on the procedures of the Depositary and, if such
qualified institutional buyer is not a Participant or an Indirect Participant,
on the procedures of the Participant through which such qualified
institutional buyer owns its interest, to exercise any rights of a holder
under the Indenture or the Global Note. The Company understands that under
existing industry practice, in the event the Company requests any action of
holders of Notes or a qualified institutional buyer that is an owner of a
beneficial interest in the Global Note desires to take any action that the
Depositary, as the holder of the Global Note, is entitled to take, the
Depositary would authorize the Participants to take such action and the
Participants would authorize the qualified institutional buyers owning through
such Participants to take such action or would otherwise act upon the
instructions of such qualified institutional buyers. Neither the Company nor
the Trustee will have any responsibility or liability for any aspect of the
records of the Depositary or for maintaining, supervising or reviewing any
records of the Depositary relating to the Notes.
Payments with respect to the principal of, premium, if any, interest and
Additional Interest, if any, on any Notes represented by the Global Note
registered in the name of the Depositary or its nominee on the applicable
record date will be payable by the Trustee to or at the direction of the
Depositary or its nominee in its capacity as the registered holder of the
Global Note representing such Notes under the Indenture. Under the terms of
the Indenture, the Company and the Trustee may treat the persons in whose
names the Notes, including the Global Note, are registered as the owners
thereof for the purpose of receiving such payments and for any and all
purposes whatsoever. Consequently, neither the Company nor the Trustee has or
will have any responsibility or liability for the payment of such amounts to
beneficial owners of Notes. The Company believes, however, that it is
currently the policy of the Depositary to immediately credit the accounts of
the relevant Participants with such payments, in amounts proportionate to
their respective holdings of beneficial interests in the Global Note as shown
on the records of the Depositary. Payments by the Depositary's Participants
and the Depositary's Indirect Participants to the beneficial owners of Notes
will be governed by standing instructions and customary practice and will be
the responsibility of the Depositary's Participants or the Depositary's
Indirect Participants.
Neither the Company nor the Trustee will be liable for any delay by the
Depositary or any Participant or Indirect Participant in identifying the
beneficial owners of the related Notes and the Company and the Trustee may
conclusively rely on, and will be protected in relying on, instructions from
the Depositary for all purposes (including with respect to the registration
and delivery, and the respective principal amounts of the Notes to be issued).
The Notes represented by the Global Note are expected to be eligible to
trade in the PORTAL market and to trade in the Depositary's Same-Day Funds
Settlement System, and any permitted secondary market trading activity in such
Notes will, therefore, be required by the Depositary to be settled in
immediately available funds.
CERTIFICATED NOTES
Subject to certain conditions, any person having a beneficial interest in
the Global Note may, upon request to the Trustee, exchange such beneficial
interest for Certificated Notes. Upon any such issuance, the Trustee is
required to register such Certificated Notes in the name of, and cause the
same to be delivered to, such person or persons (or the nominee of any
thereof). All such Certificated Notes evidencing Private Notes will be subject
to the legend requirements applicable to the Private Notes. In addition, if
(i) the Company notifies the Trustee in writing that the Depositary is no
longer willing or able to act as a depository and the Company is unable to
locate a qualified successor within 90 days or (ii) the Company, at its
option, notifies the Trustee in writing that it elects to cause the issuance
of Notes in definitive form under the Indenture, then, upon surrender by the
Depositary of the Global Note, Certificated Notes will be issued to each
person that the Depositary identifies as being the beneficial owner of the
Notes represented by the Global Note.
The information in this section concerning the Depositary and the
Depositary's book-entry system has been obtained from sources the Company
believes to be reliable. The Company will have no responsibility for the
performance by the Depositary or its Participants of their respective
obligations as described hereunder or under the rules and procedures governing
their respective operations.
109
<PAGE>
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Notes for its own account in
connection with the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Notes. This
Prospectus, as it may be amended or supplemented from time to time, may be
used by a broker-dealer in connection with resales of Exchange Notes received
in exchange for Private Notes if such Private Notes were acquired as a result
of market-making activities or other trading activities. The Company has
agreed that for a period of 180 days after the Expiration Date, it will make
this Prospectus, as amended or supplemented, available to any broker-dealer
that requests such documents in the Letter of Transmittal, for use in
connection with any such resale. In addition, until (90 days after the
date of this Prospectus), all dealers effecting transactions in the Exchange
Notes may be required to deliver a prospectus.
The Company will not receive any proceeds from any sale of Exchange Notes by
broker-dealers. Exchange Notes received by broker-dealers for their own
account in connection with the Exchange Offer may be sold from time to time in
one or more transactions in the over-the-counter market, in negotiated
transactions, through the writing of options on the Exchange Notes or a
combination of such methods of resale, at market prices prevailing at the time
of resale, at prices related to such prevailing market prices or negotiated
prices. Any such release may be made directly to purchasers or to or through
brokers or dealers who may receive compensation in the form of commissions of
concessions from any such broker-dealer and/or the purchasers of any such
Exchange Notes. Any broker-dealer that resells Exchange Notes that were
received by it for its own account in connection with the Exchange Offer and
any broker or dealer that participates in a distribution of such Exchange
Notes may be deemed to be an "underwriter" within the meaning of the
Securities Act, and any profit on any such resale of Exchange Notes and any
commissions or concessions received by any such persons may be deemed to be
underwriting compensation under the Securities Act. The Letter of Transmittal
states that by acknowledging that it will delivering a prospectus, a broker-
dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act.
110
<PAGE>
LEGAL MATTERS
Certain legal matters with regard to the validity of the Exchange Notes will
be passed upon for the Company by Latham & Watkins, Washington, D.C.
EXPERTS
The combined financial statements of Triton PCS, Inc. as of December 31,
1997 and for the period from March 6, 1997 (inception) to December 31, 1997
have been included herein and in the registration statement in reliance upon
the report of KPMG Peat Marwick LLP, independent certified public accountants,
appearing elsewhere herein, and upon the authority of said firm as experts in
accounting and auditing.
The audited financial statements of Vanguard Cellular Systems of South
Carolina, Inc. as of December 31, 1997 and 1996 and for the three years in the
period ended December 31, 1997, included in this Registration Statement, have
been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their report with respect thereto, and are included herein in
reliance upon the authority of said firm as experts in accounting and auditing
in giving said reports.
111
<PAGE>
AVAILABLE INFORMATION
The Company has filed with the Commission a Registration Statement on Form
S-4 under the Securities Act with respect to the Exchange Notes offered
hereby. As permitted by the rules and regulations of the Commission, this
Prospectus omits certain information, exhibits and undertakings contained in
the Registration Statement. For further information with respect to the
Company and the Exchange Notes offered hereby, reference is made to the
Registration Statement, including the exhibits thereto and the financial
statements, notes and schedules filed as a part thereof. As a result of the
Exchange Offer, the Company will become subject to the informational
requirements of the Exchange Act. The Registration Statement (and the exhibits
and schedules thereto), as well as the periodic reports and other information
filed by the Company with the Commission, may be inspected and copied at the
Public Reference Section of the Commission at Room 1024, Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549 and at the regional offices of the
Commission located at Room 1400, 75 Park Place, New York, New York 10007 and
Suite 1400, Northwestern Atrium Center, 500 West Madison Street, Chicago,
Illinois 6061-2511. Copies of such materials may be obtained from the Public
Reference Section of the Commission, Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, and its public reference facilities in
New York, New York and Chicago, Illinois at the prescribed rates. The
Commission maintains a web site (http://www.sec.gov), that contains periodic
reports, proxy and information statements and other information regarding
registrants that file documents electronically with the Commission. Statements
contained in this Prospectus as to the contents of any contract or other
document are not necessarily complete, and in each instance reference is made
to the copy of such contract or document filed as an exhibit to the
Registration Statement, each such statement being qualified in all respects by
such reference.
Pursuant to the Indenture, the Company has agreed to furnish to the Trustee
and to registered holders of the Exchange Notes, without cost to the Trustee
or such registered holders, copies of all reports and other information that
would be required to be filed by the Company with the Commission under the
Exchange Act, whether or not the Company is then required to file reports with
the Commission. As a result of this Exchange Offer, the Company will become
subject to the periodic reporting and other informational requirements of the
Exchange Act. In the event that the Company ceases to be subject to the
informational requirements of the Exchange Act, the Company has agreed that,
so long as any Notes remain outstanding, it will file with the Commission (but
only if the Commission at such time is accepting such voluntary filings) and
distribute to holders of the Private Notes or the Exchange Notes, as
applicable, copies of the financial information that would have been contained
in such annual reports and quarterly reports, including a "Management's
Discussion and Analysis of Financial Condition and Results of Operations,"
that would have been required to be filed with the Commission pursuant to the
Exchange Act. The Company will also furnish such other reports as it may
determine or as may be required by law.
112
<PAGE>
GLOSSARY OF SELECTED TERMS
A-BLOCK: One of the two PCS 30 MHz licenses covering an MTA.
ANALOG: A method of transmission where the wave form of the outpost signal is
analogous to the wave form of the input.
BASE STATION: A fixed site with network equipment that is used for RF
communications with mobile stations, and is part of a cell, or a sector within
a cell, and is backhauled to an MTSO or other part of a cellular system.
B-BLOCK: One of two PCS 30 MHz covering an MTA.
BROADBAND PCS: High frequency, next generation of wireless services.
BTA: Basic Trading Area.
BUSINESS MARKETING DIVISION: The account executives charged with selling all
AT&T services, including wireless services, to business accounts.
CELL: The division of wireless communications system service areas.
CELL SITE For each PCS or cellular cell, the transmitter, receiver, and
signaling equipment.
CELLULAR SYSTEM: A telephone system based on grid "cells" deployed at 800 MHz.
Each cell contains transmitters, receivers and antennas, and is connected to
switching gear and control equipment.
CHANNEL: A single path, either RF or voice, for transmitting electrical
signals.
CHURN RATE: Expressed as a rate for a given measurement period, equal to the
number or subscriber units disconnected divided by the average number of units
of the entire installed base of customers.
CDMA: Code Division Multiple Access. A digital spread-spectrum wireless
technology which allows a large number of users to access a single frequency
band by assigning a code to all speech bits, sending a scrambled transmission
of the encoded speech over the air and reassembling the speech to its original
format.
CMRS: Commercial Mobile Radio Service.
CTIA: The Cellular Telecommunications Industry Association. An industry group
in North America representing the cellular telephone and PCS industries.
DIGITAL: A method of storing, processing and transmitting information through
the use of distinct electronic or optical pulses that represent the binary
digits 0 and 1. Digital transmission/switching technologies employ a sequence
of discrete, distinct pulses to represent information, as opposed to the
continuously variable analog signal.
DUAL-BAND/DUAL-MODE PHONE: A mobile or portable phone which is capable of
dual-band/dual-mode operation.
DUAL-BAND/DUAL-MODE OPERATION: A wireless system which is capable of
supporting either different digital protocols or both digital and analog
technologies, including at different frequencies.
EQUITY INVESTMENTS: The Myrtle Contribution, the PCS Licenses, and the Cash
Equity.
ESMR: Enhanced Specialized Mobile Radio. A radio communications system that
employs digital technology with multi-site configuration that permits
frequency reuse, offering enhanced dispatch and two-way switched voice
services.
113
<PAGE>
FCC: Federal Communications Commission.
FREQUENCY: The number of cycles per second, measured in hertz, of a periodic
oscillation or wave in radio propagation.
FREQUENCY REUSE: A measure of relative efficiency in the use of frequency.
GEORGIA/NORTH CAROLINA POPS: The 1.9 million incremental Pops located
primarily in Georgia and North Carolina.
GSM: Global System for Mobile Communications. The standard digital cellular
telephone service in Europe and Japan, guided by a set of standards specifying
the infrastructure for digital cellular service, including the radio
interface, switching, signaling, and intelligent network.
HAND-OFF: The act of transferring communication with a mobile unit from one
base station to another. A hand-off transfers a call from the current base
station to the new base station. A "soft" hand-off establishes communications
with a new cell before terminating communications with the old cell.
HOLDINGS: Triton PCS Holdings, Inc., the direct parent and sole stockholder of
Triton.
HORIZON: Horizon Cellular Group.
INITIAL CONFIGURATION: The initial area (40% of the Pops in the Licensed Area)
in which the Company expects to commence commercial operations by the end of
the first quarter of 1999 or shortly thereafter.
ISDN: Integrated Services Digital Network.
KAGAN: Paul Kagan Associates, Inc.
LANS: Local Area Network.
LEC: Local Exchange Carrier.
LICENSED AREA: The contiguous area covering approximately 11 million Pops in
the southeastern United States.
MSA: Metropolitan Statistical Area.
MTA: Major Trading Area.
MYRTLE CONTRIBUTIONS: The additional equity contributions of $35 million.
NEXTEL: Nextel Communications, Inc.
NOC: The control and monitoring location for a network, including switches and
base stations.
NORFOLK POPS: The 1.8 million Pops located in the Norfolk/Virginia Beach, VA
region.
NORFOLK ACQUISITION: The agreement between the Company and AT&T Wireless PCS
to acquire (i) an FCC license and (ii) certain assets.
PBX: Private branch exchange or switchboard.
PCIA: The Personal Communications Industry Association, a North American trade
association principally representing the PCS and paging industries.
PCS: Personal Communications Services.
114
<PAGE>
PCS LICENSES: The licenses contributed by AT&T to Triton covering the Licensed
Area in exchange for an equity interest in the Company.
PMRS: Private mobile radio service.
POPS: Population equivalents as determined by Paul Kagan Associates, Inc.
estimates of the 1997 population of a geographic area.
PRIVATE NOTES: The notes offered by Triton in the Private Offering on May 4,
1998.
PRIVATE OFFERING: The offering by Triton of the Private Notes on May 4, 1998.
QIB: Qualified institutional buyer as defined in Rule 144A under the
Securities Act.
QUALIFYING COMPANY: AT&T or another telecommunications company involved in a
merger or other business combination that meets certain criteria set forth in
the Stockholders' Agreement.
RF: Radio frequency. Frequencies of the electromagnetic spectrum that are
associated with radio wave propagation.
ROAMING: A service offered by mobile communications network operators which
allows a subscriber to use his/her handset while in the service area of
another carrier. Roaming requires an agreement between operators of different
individual markets to permit customers of either operator to access the
other's system.
RSA: Rural Service Area.
SMR: Specialized Mobile Radio. A two-way analog mobile radio telephone system
typically used for dispatch services such as truck and taxi fleets.
STOCKHOLDERS' AGREEMENT: The agreement by and among AT&T PCS, the Cash Equity
Investors, the Management Stockholders, David Clark, Clyde Smith, Patricia
Gallagher, David Standig and Michael Mears, and Holdings, dated as of
February 4, 1998.
TDMA: Time Division Multiple Access. A digital spread-spectrum technology
which allocates a discrete amount of frequency bandwidth to each user in order
to permit more than one simultaneous conversation on a single RF channel.
TDMA/5-136: The technology utilized by AT&T's nationwide wireless network that
allows the Company's Network to be compatible with AT&T's.
TRITON CELLULAR: Triton Cellular Partners, L.P.
TRITON LLC: Triton Communications L.L.C.
UNFUNDED COMMITMENT AMOUNT: The remaining portion of the $140 million
commitments of the Cash Equity Investors and the Management Stockholders.
VANGUARD: Vanguard Cellular Systems of South Carolina, Inc.
115
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO THE REGISTRATION STATEMENT OR QUALIFICATION UNDER THE +
+SECURITIES LAWS OF ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
[ALTERNATE COVER PAGE]
SUBJECT TO COMPLETION, DATED SEPTEMBER , 1998
PROSPECTUS
TRITON PCS, INC.
11% SENIOR SUBORDINATED DISCOUNT NOTES DUE 2008
There will not be any payment of interest on the 11% Senior Subordinated
Notes due 2008 (the "Notes") of Triton PCS, Inc., a Delaware corporation
("Triton") prior to November 1, 2003. The Notes will accrete in value until May
1, 2003. Thereafter, cash interest will accrue on the Notes and will be payable
semiannually in arrears on May 1 and November 1 at a rate of 11% per annum. The
Notes will be redeemable at the option of Triton, in whole or in part, at any
time on or after May 1, 2003, at the redemption prices set forth herein, plus
accrued and unpaid interest, if any, thereon to the date of redemption. In
addition, prior to May 1, 2001, Triton may redeem up to 35% of the aggregate
principal amount at maturity of the Notes with the net cash proceeds received
from one or more Equity Offerings (as defined herein) of Triton, Triton PCS
Holdings, Inc., a Delaware corporation, or a Special Purpose Corporation (as
defined herein) at a redemption price of 111% of the Accreted Value (as defined
herein) thereof, plus accrued and unpaid interest, if any, to the redemption
date; provided, however, that at least 65% in aggregate principal amount at
maturity of the Notes remains outstanding immediately after any such
redemption.
The Notes are general unsecured obligations of Triton, are subordinated in
right of payment to all Senior Debt (as defined herein) of Triton, including
all obligations under the Credit Facility (as defined herein). The Notes are
guaranteed on a joint and several basis (the "Guarantees") by all of the
subsidiaries of Triton (the "Guarantors") that are direct or indirect obligors
under, or in respect of, any Senior Credit Facilities (as defined herein). The
Guarantees are unsecured obligations of the Guarantors, subordinated in right
of payment to all Senior Debt of the Guarantors, including all of the
Guarantors' obligations under the Credit Facility. As of August 25, 1998,
Triton and the Guarantors had $150 million of Senior Debt outstanding.
SEE "RISK FACTORS" BEGINNING ON PAGE FOR A DISCUSSION OF CERTAIN FACTORS
THAT INVESTORS SHOULD CONSIDER IN CONNECTION WITH THE EXCHANGE OFFER AND AN
INVESTMENT IN THE EXCHANGE NOTES.
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-----------
This Prospectus may be used by J.P. Morgan Securities Inc. and Chase
Securities Inc. (together, the "Market Makers") in connection with offers and
sales of the Notes in market-making transactions at negotiated prices related
to prevailing market prices at the time of sale. The Market Makers may act as
principals or as agents in such transactions. Triton will receive no portion of
the proceeds of the sale of such Notes and will bear the expenses incident to
the registration thereof. For as long as a market-making prospectus is required
to be delivered, the ability of the Market Makers to make a market in the Notes
may, in part, be dependent on the ability of Triton to maintain a current
market-making prospectus.
<PAGE>
[ALTERNATE PAGE]
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary....................................................... 1
Risk Factors............................................................. 12
Use of Proceeds.......................................................... 29
Capitalization........................................................... 30
Selected Historical and Pro Forma Consolidated Financial Data............ 31
Management's Discussion and Analysis of Financial Condition and Results
of Operations........................................................... 35
Business................................................................. 41
Management............................................................... 58
Security Ownership....................................................... 63
Certain Relationships and Related Transactions........................... 65
Description of Credit Facility........................................... 72
Description of Notes..................................................... 74
Description of Capital Stock............................................. 102
Certain United States Federal Income Tax Consequences.................... 104
Book-Entry; Delivery and Form............................................ 108
Plan of Distribution..................................................... 110
Legal Matters............................................................ 111
Experts.................................................................. 111
Available Information.................................................... 112
Glossary of Selected Terms............................................... 113
</TABLE>
<PAGE>
[ALTERNATE PAGE]
SUMMARY DESCRIPTION OF NOTES
The Notes have been registered under the Securities Act and, therefore, the
Notes will not be subject to certain transfer restrictions or registration
rights and will not contain certain provisions providing for an increase in the
interest rate under certain circumstances relating to the Registration Rights
Agreement.
Notes................... Up to $511,989,000 aggregate principal amount at
maturity of 11% Senior Subordinated Discount Exchange
Notes due 2008.
Maturity................ May 1, 2008.
Yield and Interest...... 11% per annum (computed on a semiannual bond
equivalent basis) calculated from May 4, 1998. Cash
interest will not accrue prior to May 1, 2003.
Commencing on November 1, 2003, cash interest will be
payable semiannually on May 1 and November 1 (an
"Interest Payment Date").
Original Issue Each Note has been offered at an original issue
Discount............... discount for federal income tax purposes. Thus,
although cash interest will not accrue on the Notes
prior to May 1, 2003, original issue discount (i.e.,
the difference between the principal amount at
maturity and the issue price of such Notes) will
accrue from the issue date of such Notes up to May 1,
2003 and will be included as interest income
periodically in a holder's gross income for federal
income tax purposes in advance of receipt of the cash
payments to which the income is attributable.
Option Redemption....... The Notes will be redeemable at the option of Triton,
in whole or in part, at any time on or after May 1,
2003, at the redemption prices set forth herein,
together with accrued and unpaid interest to the
redemption date. In addition, prior to May 1, 2001,
Triton may redeem up to 35% of the aggregate
principal amount at maturity of the Notes with the
net cash proceeds received from one or more Equity
Offerings of Triton, Holdings or a Special Purpose
Corporation at a redemption price of 111% of the
Accreted Value thereof, plus accrued and unpaid
interest, if any, to the redemption date; provided,
however, that at least 65% in aggregate principal
amount at maturity of the Notes remains outstanding
immediately after any such redemption.
Guarantee...............
The Notes will be guaranteed on a joint and several
basis by all of Triton's subsidiaries that are direct
or indirect obligors under, or in respect of, any
Senior Credit Facilities. As of the date of this
registration statement, all of Triton's direct and
indirect subsidiaries are guarantors on a full,
unconditional, and joint and several basis. Triton
PCS Holdings, Inc., the direct parent and sole
stockholder of Triton, is not a guarantor. The
Guarantees will be unsecured obligations of the
Guarantors, subordinated in right of payment to all
Senior Debt of the Guarantors, including all of the
Guarantors' obligations under their guarantees of the
Credit Facility.
Ranking................. The Notes are general unsecured obligations of
Triton, subordinated in right of payment to all
Senior Debt of Triton, including all obligations
under the Credit Facility. The Guarantees are
unsecured obligations of the Guarantors, subordinated
in right of payment to all Senior Debt of the
11
<PAGE>
Guarantors, including all of the Guarantors'
obligations under their guarantees of the Credit
Facility. As of August 25, 1998, Triton and the
Guarantors had $150 million of Senior Debt
outstanding.
Change of Control.......
Upon a Change of Control, each holder of the Notes
may require the Company to repurchase such holder's
Notes, in whole or in part, at a purchase price equal
to 101% of the Accreted Value thereof or the
principal amount at maturity, as applicable plus
accrued and unpaid interest to the purchase date. The
Credit Facility will prohibit the purchase of
outstanding Notes prior to repayment of the
borrowings under the Credit Facility. There can be no
assurance that upon a Change of Control the Company
will have sufficient funds to repurchase any of the
Notes.
Covenants............... The Indenture contains certain covenants that, among
other things, limit the ability of Triton or any of
its Restricted Subsidiaries to incur additional
Indebtedness, make certain Restricted Payments and
Investments, create Liens, permit dividend or other
payment restrictions to apply to Subsidiaries, enter
into certain transactions with Affiliates or
consummate certain merger, consolidation or similar
transactions. In addition, in certain circumstances,
the Company will be required to offer to purchase the
Notes at 100% of the Accreted Value or principal
amount at maturity thereof, as applicable, with the
net proceeds of certain asset sales. These covenants
are subject to a number of significant exceptions and
qualifications. See "Description of Notes."For
additional information regarding the Notes, see
"Description of Notes."
RISK FACTORS
See "Risk Factors" beginning after the Summary for a discussion of certain
factors relating to an investment in the Notes.
12
<PAGE>
[ALTERNATE PAGE]
RISK FACTORS
This Prospectus includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act and 21E of the Exchange Act. Although the
Company believes that its plans, intentions and expectations reflected in such
forward-looking statements are reasonable, it can give no assurance that such
plans, intentions or expectations will be achieved. Important factors that
could cause actual results to differ materially from the Company's forward-
looking statements are set forth below and elsewhere in this Prospectus. All
forward-looking statements attributable to the Company or persons acting on
its behalf are expressly qualified in their entirety by the cautionary
statements set forth below.
Investment in the Notes involves a high degree of risk. Prospective
purchasers of Notes should carefully consider the following factors in
addition to the other information contained herein in evaluating the Company
before purchasing any Notes.
ORIGINAL ISSUE DISCOUNT CONSEQUENCES OF NOTES
The Notes have been issued at a substantial discount from their principal
amount at maturity. Although cash interest will not accrue on the Notes prior
to May 1, 2003 and there will be no periodic payments of cash interest on the
Notes prior to November 1, 2003, original issue discount (the difference
between the aggregate principal amount at maturity and the issue price of the
Notes) will accrue from the issue date of the Notes. Consequently, purchasers
of Notes generally will be required to include amounts in gross income for
United States federal income tax purposes in advance of their receipt of the
cash payments to which the income is attributable. Such amounts in the
aggregate will be equal to the difference between the stated redemption price
at maturity (inclusive of stated interest on the Notes) and the accreted value
of the Notes at the time of purchase. See "Certain United States Federal
Income Tax Consequences" for a more detailed discussion of the federal income
tax consequences of the purchase, ownership and disposition of the Notes.
In the event a bankruptcy case is commenced by or against the Company under
the United States Bankruptcy Code prior to May 1, 2003, the claim of a holder
of Notes may be limited to an amount equal to the sum of (i) the initial
offering price and (ii) that portion of the original issue discount which is
not deemed to constitute "unmatured interest" for purposes of the Bankruptcy
Code. Any original issue discount that was not amortized as of the date of any
such bankruptcy filing would constitute "unmatured interest." To the extent
that the Bankruptcy Code differs from the Internal Revenue Code in determining
the method of amortization of original issue discount, a holder of Notes may
realize taxable gain or loss on payment of such holder's claim in bankruptcy.
ABSENCE OF PUBLIC MARKET FOR THE NOTES
The Notes will not be listed on any securities exchange. The Notes are new
securities for which there is currently no established public market. The
Company has been advised by the Market Makers that they intend to make a
market in the Notes as permitted by applicable laws and regulations; however,
the Market Makers are not obligated to do so and any such market-making
activities may be discontinued at any time without notice. If either Market
Maker conducts any market-making activities, it may be required to deliver a
"market-making prospectus" when effecting offers and sales in the Notes
because of the beneficial ownership of the capital stock of the Company by
affiliates of each of the Market Makers. For so long as a market-making
prospectus is required to be delivered, the ability of the Market Makers to
make a market in the Notes may, in part, be dependent on the ability of the
Company to maintain a current market-making prospectus. Therefore, there can
be no assurance that an active market for the Notes will develop.
13
<PAGE>
[ALTERNATE PAGE]
DESCRIPTION OF NOTES
As used below in this "Description of Notes" section, the "Company" means
Triton PCS, Inc. but not any of its subsidiaries. The Notes have been issued
under an Indenture, dated as of May 4, 1998 (the "Indenture"), between the
Company, the Guarantors and PNC Bank, National Association, as Trustee (the
"Trustee"). The terms of the Notes include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"). The Notes are subject to all
such terms, and holders of the Notes are referred to the Indenture and the
Trust Indenture Act for a statement thereof. A copy of the Indenture will be
made available to prospective investors upon request. The statements under
this caption relating to the Notes and the Indenture are summaries and do not
purport to be complete, and where reference is made to particular provisions
of the Indenture, such provisions, including the definitions of certain terms,
are qualified in their entirety by such reference.
The Notes are general unsecured obligations of the Company, limited to $450
million of gross proceeds, of which $300 million of gross proceeds were
offered in the Private Offering. Additional amounts of Notes may be issued in
one or more series from time to time subject to the limitations set forth
under "Covenants--Limitations on Incurrence of Indebtedness." All such
additional Notes shall be treated as a single series for all purposes under
the Indenture. The Notes are senior subordinated obligations of the Company,
subordinated in right of payment to all Senior Debt of the Company. The Notes
have been issued in fully registered form, without coupons, in denominations
of $1,000 and any integral multiple thereof. No service charge will be made
for the registration of transfer or exchange of Notes, but the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith. Initially, the Trustee will act as
paying agent and registrar for the Notes.
PRINCIPAL, MATURITY AND INTEREST
The Notes will mature on May 1, 2008. Cash interest will not be required to
accrue or be payable on the Notes prior to May 1, 2003. Cash interest will
accrue at the rate of 11% per annum from May 1, 2003 and will be payable semi-
annually on May 1 and November 1 of each year, commencing November 1, 2003, to
the Person in whose name a Note is registered (a "Holder") at the close of
business on the preceding April 15 or October 15 (each, a "Record Date"), as
the case may be. Cash 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
May 1, 2003. Cash interest on the Notes will be computed on the basis of a
360-day year of twelve 30-day months. Holders must surrender the Notes to the
paying agent for the Notes to collect principal payments. At the Company's
option principal and interest may be paid at the Trustee's corporate trust
office or by check mailed to a holder's registered address.
71
<PAGE>
[ALTERNATE PAGE]
PLAN OF DISTRIBUTION
This Prospectus may be used by the Market Makers in connection with offers
and sales of the Notes in market-making transactions at negotiated prices
relating to prevailing market prices at the time of sale. The Market Makers
may act as principals or agents in such transactions.
There is currently no established public market for the Notes. The Company
does not currently intend to apply for listing of the Notes on any securities
exchange. Therefore, any trading that does develop will occur on the over-the-
counter market. The Company has been advised by the Market Makers that it
intends to make a market in the Notes but it has not obligation to do so and
any market-making may be discontinued at any time. No assurance can be given
that an active pubic market for the Notes will develop.
Each of the Market Makers acted as an initial purchaser in connection with
the Private Offering and received customary compensation in connection
therewith. J.P. Morgan Securities Inc., one of the Market Makers, is an
affiliate of J.P. Morgan Investment Corporation which as of March 31,1998
owned shares of Series C Preferred Stock of Holdings representing
approximately 19.8% of the outstanding voting stock of Holdings. In addition,
John Watkins, a director of Holdings, is a managing director and an officer of
J.P. Morgan Investment Corporation. An affiliate of J.P. Morgan Securities
Inc. is also a lender to Holdings under the Credit Facility.
Chase Securities Inc., the other Market Maker, is an affiliate of CB Capital
Investors, L.P., which as of March 31, 1998 owned shares of Series C Preferred
Stock of Holdings representing approximately 23.7% of the outstanding voting
stock of Holdings. In addition, Arnold Chavkin, a director of Holdings, is an
officer of the general partner of CB Capital Partners, L.P. and a partner of
Chase Capital Partners, an affiliate of Chase Securities Inc. Chase Securities
Inc. is also an affiliate of The Chase Manhattan Bank which is agent bank and
a lender to Holdings under the Credit Facility.
Although there are no agreements to do so, the Market Makers, as well as
others, may act as brokers or dealers in connection with the sale of Notes
contemplated by this Prospectus and may receive fees or commissions in
connection therewith.
The Company has agreed to indemnify the Market Makers against certain
liabilities under the Securities Act or to contribute to payments that the
Market Makers may be required to make in respect of such liabilities.
108
<PAGE>
[ALTERNATE PAGE]
AVAILABLE INFORMATION
The Company has filed with the Commission a Registration Statement on Form
S-4 under the Securities Act with respect to the Notes offered hereby. As
permitted by the rules and regulations of the Commission, this Prospectus
omits certain information, exhibits and undertakings contained in the
Registration Statement. For further information with respect to the Company
and the Notes offered hereby, reference is made to the Registration Statement,
including the exhibits thereto and the financial statements, notes and
schedules filed as a part thereof. The Registration Statement (and the
exhibits and schedules thereto), as well as the periodic reports and other
information filed by the Company with the Commission, may be inspected and
copied at the Public Reference Section of the Commission at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the
regional offices of the Commission located at Room 1400, 75 Park Place, New
York, New York 10007 and Suite 1400, Northwestern Atrium Center, 500 West
Madison Street, Chicago, Illinois 6061-2511. Copies of such materials may be
obtained from the Public Reference Section of the Commission, Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and its
public reference facilities in New York, New York and Chicago, Illinois at the
prescribed rates. The Commission maintains a web site (http://www.sec.gov),
that contains periodic reports, proxy and information statements and other
information regarding registrants that file documents electronically with the
Commission. Statements contained in this Prospectus as to the contents of any
contract or other document are not necessarily complete, and in each instance
reference is made to the copy of such contract or document filed as an exhibit
to the Registration Statement, each such statement being qualified in all
respects by such reference.
Pursuant to the Indenture, the Company has agreed to furnish to the Trustee
and to registered holders of the Notes, without cost to the Trustee or such
registered holders, copies of all reports and other information that would be
required to be filed by the Company with the Commission under the Exchange
Act, whether or not the Company is then required to file reports with the
Commission. In addition, the Company is currently subject to the periodic
reporting and other informational requirements of the Exchange Act. In the
event that the Company ceases to be subject to the informational requirements
of the Exchange Act, the Company has agreed that, so long as any Notes remain
outstanding, it will file with the Commission (but only if the Commission at
such time is accepting such voluntary filings) and distribute to holders of
the Notes copies of the financial information that would have been contained
in such annual reports and quarterly reports, including a "Management's
Discussion and Analysis of Financial Condition and Results of Operations,"
that would have been required to be filed with the Commission pursuant to the
Exchange Act. The Company will also furnish such other reports as it may
determine or as may be required by law.
110
<PAGE>
TRITON PCS, INC. AND PREDECESSOR COMPANY
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<S> <C>
TRITON PCS, INC. AND PREDECESSOR COMPANY
Combined Financial Statements:
Report of KPMG Peat Marwick LLP F-2
Combined Balance Sheet as of December 31, 1997 F-3
Combined Statement of Operations for the period March 6, 1997
(inception) to December 31, 1997 F-4
Combined Statement of Shareholder's Deficit and Member's Capital for the
period March 6, 1997 (inception) to December 31, 1997 F-5
Combined Statement of Cash Flows for the period March 6, 1997
(inception) to December 31, 1997 F-6
Notes to Combined Financial Statements F-7
Combined Balance Sheet as of June 30, 1998 F-16
Combined Statements of Operations for the six months periods ended June
30, 1998, for the period from March 6, 1997 to June 30, 1997, and for
the period from March 6, 1997 to June 30, 1998 F-17
Combined Statements of Shareholder's Equity (Deficit) and Members
Capital for the period from March 6, 1997 to June 30, 1998 F-18
Combined Statements of Cash Flows for six months ended June 30, 1998,
for the period from March 6, 1997 to June 30, 1997, and for the period
from March 6, 1997 to June 30, 1998 F-19
Notes to the Combined Financial Statements--June 30, 1998 F-20
VANGUARD CELLULAR SYSTEMS OF SOUTH CAROLINA, INC.
Financial Statements:
Report of Arthur Andersen LLP F-29
Balance Sheets as of December 31, 1997 and 1996 F-30
Statements of Operations for the three years ended December 31, 1997 F-31
Statements of Cash Flows for the three years ended December 31, 1997 F-32
Statements of Shareholder's Deficit for the three years ended December
31, 1997 F-33
Notes to Financial Statements F-34
MYRTLE BEACH SYSTEM OF SOUTH CAROLINA
Financial Statements:
Balance Sheet as of June 30, 1998 F-38
Statement of Operations for the sixth months ended June 30, 1997 and
1998 F-39
Statement of Cash Flows for the sixth months ended June 30, 1997 and
1998 F-40
Notes to Financial Statements F-41
TRITON PCS, INC., MYRTLE BEACH SYSTEM AND NORFOLK
Pro forma Financial Statements:
Unaudited pro forma financial statements F-45
Combined Balance Sheet as of June 30, 1998 F-46
Combined Statement of Operations for year ended December 31, 1997 F-47
Combined Statement of Operations for the six months ended June 30, 1998 F-48
Notes to Combined Financial Statements F-49
</TABLE>
F-1
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholder
Triton PCS, Inc.:
We have audited the accompanying combined balance sheet of Triton PCS, Inc. and
Predecessor Company, (a development stage enterprise) as defined in note 2, as
of December 31, 1997, and the related combined statements of operations, share-
holder's deficit and member's capital, and cash flows for the period from March
6, 1997 (inception) to December 31, 1997. These combined financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these combined financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing stan-
dards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of mate-
rial misstatement. An audit includes examining, on a test basis, evidence sup-
porting the amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement pre-
sentation. We believe that our audit provides a reasonable basis for our opin-
ion.
In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the financial position of Triton PCS, Inc.
and Predecessor Company as of December 31, 1997, and the results of their
operations and their cash flows for the period March 6, 1997 (inception) to
December 31, 1997, in conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
Philadelphia, Pennsylvania
March 27, 1998
F-2
<PAGE>
TRITON PCS, INC. AND PREDECESSOR COMPANY
COMBINED BALANCE SHEET
DECEMBER 31, 1997
<TABLE>
<CAPTION>
------------------------- -------
PRO FORMA
(UNAUDITED--
NOTE 3)
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $11,362,212 $120,574,106
Due from related party 148,100 148,100
Prepaid expenses 20,960 20,960
----------- ------------
Total current assets 11,531,272 120,743,166
----------- ------------
Property, plant and equipment:
Office furniture and equipment 121,398 121,398
Construction in progress 356,258 356,258
----------- ------------
477,656 477,656
Less: accumulated depreciation (4,762) (4,762)
----------- ------------
Net property, plant and equipment 472,894 472,894
Intangible assets -- 119,700,000
Deferred transaction costs 1,248,855 7,165,461
----------- ------------
$13,253,021 $248,081,521
=========== ============
LIABILITIES AND SHAREHOLDER'S EQUITY
(DEFICIT) AND MEMBER'S CAPITAL
Current liabilities:
Accounts payable $ 1,580,880 $ 1,580,880
Accrued expenses 1,016,048 1,016,048
Accrued financing costs 1,228,029 --
Due to related party 45,402 45,402
Notes payable 13,343,500 --
----------- ------------
Total current liabilities 17,213,859 2,642,330
----------- ------------
Long-term debt -- 75,000,000
----------- ------------
Deferred income taxes -- 18,456,655
Commitments and contingencies (Note 7)
Shareholder's equity (deficit) and Mem-
ber's Capital:
Common stock, $.01 par value, 1,000
shares authorized, 100 shares
issued and outstanding 1 1
Additional paid-in capital -- 154,731,009
Deficit accumulated during the develop-
ment stage (3,960,839) (2,748,474)
----------- ------------
Total shareholder's equity (deficit) and
member's capital (3,960,838) 151,982,536
----------- ------------
$13,253,021 $248,081,521
=========== ============
</TABLE>
See accompanying notes to combined financial statements.
F-3
<PAGE>
TRITON PCS, INC. AND PREDECESSOR COMPANY
COMBINED STATEMENT OF OPERATIONS
For the period from March 6, 1997 (inception) to December 31, 1997
<TABLE>
<CAPTION>
----------
<S> <C>
Expenses:
Operations and development $ 873,477
General and administrative 1,867,328
----------
Loss from operations 2,740,805
----------
Financing costs 1,228,029
Interest income (7,995)
----------
Net loss $3,960,839
==========
</TABLE>
See accompanying notes to combined financial statements.
F-4
<PAGE>
TRITON PCS, INC. AND PREDECESSOR COMPANY
COMBINED STATEMENT OF SHAREHOLDER'S DEFICIT AND MEMBER'S CAPITAL
For the period from March 6, 1997 (inception) to December 31, 1997
<TABLE>
<CAPTION>
-------------------------------------------------------
DEFICIT
ACCUMULATED
ADDITIONAL DURING THE
COMMON PAID-IN DEVELOPMENT
STOCK CAPITAL STAGE TOTAL
------ ---------- ----------- -----------
<S> <C> <C> <C> <C>
Issuance of common stock $ 1 $-- $ -- $ 1
Net loss -- -- (3,960,839) (3,960,839)
---- ---- ----------- -----------
Balance, December 31,
1997 $ 1 $-- $(3,960,839) $(3,960,838)
==== ==== =========== ===========
</TABLE>
See accompaning notes to combined financial statements.
F-5
<PAGE>
TRITON PCS, INC. AND PREDECESSOR COMPANY
COMBINED STATEMENT OF CASH FLOWS
For the period from March 6, 1997 (inception) to December 31, 1997
<TABLE>
<CAPTION>
-----------
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(3,960,839)
-----------
Adjustments to reconcile net loss to cash used in operating
activities:
Depreciation 4,762
(Increase) in assets:
Prepaid expenses (20,960)
Increase in liabilities:
Accounts payable 656,441
Accrued expenses 1,016,048
Accrued financing costs 1,228,029
-----------
Net cash used in operating activities (1,076,519)
-----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of office furniture and equipment (121,398)
Network construction (356,258)
-----------
Net cash used in investing activities (477,656)
-----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings on notes payable 13,343,500
Issuance of common stock 1
Deferred transaction costs (324,416)
Related-party advances, net (102,698)
-----------
Net cash provided by financing activities 12,916,387
-----------
NET INCREASE IN CASH 11,362,212
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD --
-----------
CASH AND CASH EQUIVALENTS END OF PERIOD $11,362,212
===========
SUPPLEMENTAL NONCASH INVESTING AND FINANCING TRANSACTIONS:
Deferred transaction costs financed via accounts payable $ 924,439
===========
</TABLE>
See accompanying notes to combined financial statements.
F-6
<PAGE>
TRITON PCS, INC. AND PREDECESSOR COMPANY
NOTES TO COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 1997
(1) DESCRIPTION OF BUSINESS
Triton PCS, Inc (formerly Triton PCS Licence Company, Inc., with its subsid-
iaries referred to as the "Company") was formed on October 2, 1997 as a whol-
ly-owned subsidiary of Triton PCS Holdings, Inc. (formerly Triton PCS, Inc.
referred to as "Holdings"). The Company will be the exclusive provider of
wireless mobility services in the AT&T Corp. (together with affiliates "AT&T")
Mid-Atlantic and Southeast regions. The Company intends to become a leading
provider of broadband PCS in Virginia, South Carolina, North Carolina, north-
ern Georgia, and surrounding areas. The Company is authorized to provide per-
sonal communications services ("PCS") in major population and business centers
such as Charleston, SC, Columbia, SC, Greenville / Spartansburg, SC, Richmond,
VA and Augusta GA, as well as major destination resorts such as Myrtle Beach,
SC, Hilton Head, SC, and Kiawah Island, SC.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
On March 6, 1997, Triton Communications L.L.C. ("L.L.C.") was formed to ex-
plore various business opportunities in the wireless telecommunications indus-
try, principally related to PCS and cellular activities. During the period
March 6, 1997 through October 1, 1997, L.L.C.'s activities consisted princi-
pally of hiring a management team, raising capital, and negotiating strategic
business relationships, primarily related to PCS business opportunities. Sub-
sequent to October 2, 1997, these activities continued but were conducted pri-
marily through the Company. Consequently, for purposes of the accompanying fi-
nancial statements, L.L.C. has been treated as a "predecessor" entity. The
chief executive officer and sole member of L.L.C. is also the chief executive
officer and principal shareholder of Holdings, and consequently the Company.
As a result of this relationship, certain financing relationships and the sim-
ilar nature of the business activities conducted by each respective legal en-
tity, L.L.C. and the Company are considered companies under common control.
The combined financial statements incorporate the PCS-related business activi-
ties of L.L.C. and the Company. The consolidated accounts of the Company in-
clude Triton PCS Inc.; Triton PCS Holdings Company L.L.C.; Triton Management
Company, Inc.; Triton PCS Property Company L.L.C.; Triton PCS Equipment Com-
pany L.L.C.; Triton PCS Operating Company L.L.C.; and Triton PCS License Com-
pany L.L.C. All significant intercompany accounts or balances have been elimi-
nated in consolidation.
Development Stage Company
Since its inception, the Company's activities have been limited to developing
and executing a business plan, raising capital and negotiating the contribu-
tion of the PCS Licenses by AT&T. During the next several years, the Company
intends to devote its efforts to designing and constructing a PCS network in
each of its licensed areas. Accordingly, the Company is presently in the de-
velopment stage as defined by the Statement of Financial Accounting Standards
("SFAS") No. 7, Accounting and Reporting by Development Stage Enterprises.
Use of Estimates
The preparation of the financial statements in conformity with generally ac-
cepted accounting principles requires management to make estimates and assump-
tions that affect the reported amounts of assets and disclosure of contingent
assets and liabilities at the date of the financial statements and the re-
ported amount of expenses during the reporting period. Actual results could
differ from those estimates.
Cash and Cash Equivalents
The Company considers all highly liquid investments purchased with an original
maturity of three months or less to be cash equivalents. At the balance sheet
date, cash equivalents were comprised primarily of investments in money market
accounts.
F-7
<PAGE>
TRITON PCS, INC. AND PREDECESSOR COMPANY
NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
(DECEMBER 31, 1997)
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Property and Equipment
Property and equipment is stated at original cost and includes primarily com-
puter equipment and software and office equipment. Depreciation is provided
based on the straight-line method over the estimated useful lives of the re-
spective assets, generally three years for computer equipment and software. In
connection with the construction of the PCS network, the Company will capital-
ize expenditures related to the design, construction, and microwave relocation.
In addition, the Company anticipates it will capitalize interest on expendi-
tures related to the buildout of the network. Expenditures for repairs and
maintenance are charged to expense as incurred.
Investment in PCS Licenses
The Company intends to amortize its licenses over 40 years. Investment in PCS
licenses will be recorded at the fair market value of the licenses upon the
closing of the AT&T transaction (see note 4). Amortization will begin with the
commencement of service to customers and will be computed using the straight-
line method.
Deferred Transaction Costs
At December 31, 1997, costs were incurred in the connection with the negotia-
tion and documentation of the AT&T transaction, bank financing, and the
Company's planned issuance of senior subordinated discount notes. The costs re-
lated to the AT&T transaction will be amortized over the life of the various
intangibles acquired. The costs of the bank financing and planned issuance will
be amortized over the term of the respective agreements.
Income Taxes
The Company accounts for income taxes in accordance with Statement of Financial
Accounting Standards No. 109, which requires the use of the liability method in
accounting for deferred taxes.
New Accounting Pronouncements
In February 1997, the FASB issued Statement No. 129, Disclosure of Information
about Capital Structure ("SFAS 129"). This statement establishes standards for
disclosing information about an entity's capital structure and is effective for
periods ending after December 15, 1997. The Company has adopted SFAS 129. The
effect of initial application of this statement did not have a material effect
on the Company's financial statements.
In June 1997, the FASB issued Statement No. 130, Reporting Comprehensive Income
("SFAS 130"). This statement requires companies to classify items of other com-
prehensive income by their nature in a financial statement and display the ac-
cumulated balance of other comprehensive income separately from retained earn-
ings and additional paid-in capital in the equity section of a statement of fi-
nancial position. SFAS 130 is effective for financial statements issued for
fiscal years beginning after December 15, 1997. Management believes that SFAS
130 will not have a material effect on the Company's financial statements.
In June 1997, the FASB issued Statement No. 131, Disclosure About Segments of
an Enterprise and Related Information ("SFAS 131"). This statement establishes
additional standards for segment reporting in the financial statements and is
effective for fiscal years beginning after December 15, 1997. Management be-
lieves that SFAS 131 will not have a material effect on the Company's financial
statements.
(3) UNAUDITED PRO FORMA BALANCE SHEET
Certain significant transactions occurred subsequent to December 31, 1997,
which will materially effect the Company's financial position, as follows:
. The AT&T transaction, as further described in note 4.
F-8
<PAGE>
TRITON PCS, INC. AND PREDECESSOR COMPANY
NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
(DECEMBER 31, 1997)
(3) UNAUDITED PRO FORMA BALANCE SHEET (CONTINUED)
.The execution of the Bank Credit Facility, as further described in note 6.
.Capital contributions by Holdings, as further described in notes 5 and 9.
The unaudited pro forma balance sheet gives effect to these transactions as if
they had occurred on December 31, 1997. The values assigned to intangible as-
sets acquired in the AT&T transaction are based on an independent appraisal.
(4) AT&T TRANSACTION
On October 8, 1997, Holdings entered into a Securities Purchase Agreement with
AT&T Wireless PCS, Inc ("AT&T PCS"), a subsidiary of AT&T, and the other stock-
holders of Holdings, whereby the Company will be the exclusive provider of
wireless mobility services in the AT&T Mid-Atlantic and Southeast regions.
On February 4, 1998, Holdings executed the Closing Agreement with AT&T PCS and
the other stockholders of Holdings, finalizing the transactions contemplated in
the Securities Purchase Agreement. In accordance with the Closing Agreement,
Holdings and AT&T PCS and the other stockholders of Holdings consented that one
or more of Holding's subsidiaries shall enter into certain agreements or con-
duct certain operations on the condition that such subsidiaries shall at all
times be direct or indirect wholly-owned subsidiaries of Holdings and Holdings
shall cause such subsidiaries to perform the obligations and conduct such oper-
ations required to be performed or conducted under those agreements.
Under the Closing Agreement, Holdings issued equity to AT&T PCS in exchange for
20 MHz A and B block PCS licenses, which were contributed to the Company and
certain other agreements covering certain areas in the southeastern United
States. The fair value of the FCC licenses, as determined by an independent ap-
praisal, was $92.8 million with an estimated useful life of 40 years.
In connection with the closing of the AT&T transaction, the Company executed or
was a party to certain agreements, including the following:
STOCKHOLDERS' AGREEMENT
Resale Agreement
Pursuant to the Stockholders' Agreement, the Company is required to enter into
a Resale Agreement at the request of AT&T. Under this agreement, AT&T PCS will
be granted the right to purchase and resell on a nonexclusive basis access to
and usage of the Company's services in the Company's Licensed Area. The Company
will retain the continuing right to market and sell its services to customers
and potential customers in competition with AT&T PCS.
The Resale Agreement will have a term of ten years and will renew automatically
for successive one-year periods unless, after the eleventh anniversary thereof,
either party elects to terminate the Resale Agreement. Furthermore, AT&T PCS
may terminate the Resale Agreement at any time for any reason on 180 days writ-
ten notice.
The Company has agreed that the rates, terms, and conditions of service, taken
as a whole, provided by the Company to AT&T PCS pursuant to the Resale Agree-
ment, shall be at least as favorable as (or if permitted by applicable law, su-
perior to) the rates, terms, and conditions of service, taken as a whole, pro-
vided by the Company to any other customer. Without limiting the foregoing, the
rate plans offered by the Company pursuant to the Resale Agreement shall be de-
signed to result in a discounted average actual rate per minute paid by AT&T
PCS for service below the weighted average actual rate per minute billed by the
Company to its subscribers generally for access and air time.
Neither party may assign or transfer the Resale Agreement or any of its rights
thereunder without the other party's prior written consent, which will not be
unreasonably withheld, except (a) to an affiliate of that party at the time of
execution of the Resale Agreement, (b) by the Company to any of its operating
subsidiaries, and (c) to the transferee of a party's stock or substantially all
of its assets, provided that all FCC and other necessary approvals have been
received.
F-9
<PAGE>
TRITON PCS, INC. AND PREDECESSOR COMPANY
NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
(DECEMBER 31, 1997)
(4) AT&T TRANSACTION (CONTINUED)
The Company expects to enter into the Resale Agreement upon commencement of its
operations in the initial configuration.
Exclusivity
Under the Stockholders' Agreement, none of the Stockholders will provide or re-
sell, or act as the agent for any person offering, within the Territory mobile
wireless telecommunications services initiated or terminated using Time Divi-
sion Multiple Access and frequencies licensed by the FCC ("Company Communica-
tions Services"), except AT&T PCS and its affiliates may (i) resell or act as
agent for the Company in connection with the provision of Company Communica-
tions Services, (ii) provide or resell wireless telecommunications services to
or from certain specific locations, and (iii) resell Company Communications
Services for another person in any area where the Company has not placed a sys-
tem into commercial service by August 2002. Additionally, with respect to the
markets listed on the Roaming Agreement, each of the Company and AT&T PCS
agrees to cause their respective affiliates in their home carrier capacities to
program and direct the programming of customer equipment so that the other
party in its capacity as the serving carrier is the preferred provider in such
markets, and refrain from inducing any of its customers to change such program-
ming.
Build-out
The Company is required to conform to certain requirements regarding the con-
struction of the Company's PCS system. In the event that the Company breaches
these requirements, AT&T PCS may terminate its exclusivity provisions.
Disqualifying Transactions
In the event of a merger, asset sale, or consolidation, as defined, involving
AT&T and another person that derives annual revenues in excess of $5.0 billion,
derives less than one third of its aggregate revenues from wireless telecommu-
nications, and owns FCC licenses to offer mobile wireless telecommunication
services to more than 25% of the population within the Company's territory,
AT&T and the Company have certain rights. AT&T may terminate its exclusivity in
the territory in which the other party overlaps that of the Company. In the
event that AT&T proposes to sell, transfer, or assign to a non-affiliate its
PCS system owned and operated in Charlotte, NC; Atlanta, GA; Baltimore, MD; and
Washington, DC, or Richmond, VA BTAs, then AT&T will provide the Company with
the opportunity for a 180 day period to have AT&T jointly market the Company's
licenses that are included in the MTA that AT&T is requesting to sell.
The Stockholders' Agreement expires on February 4, 2009. Certain provisions ex-
pire upon an initial public offering.
LICENSE AGREEMENT
Pursuant to a Network Membership License Agreement, dated February 4, 1998 (the
"License Agreement"), between AT&T and the Company, AT&T granted to the Company
a royalty-free, nontransferable, nonsublicensable, limited right, and license
to use certain Licensed Marks solely in connection with certain licensed activ-
ities. The Licensed Marks include the logo containing the AT&T and globe design
and the expression "Member, AT&T Wireless Services Network." The "Licensed Ac-
tivities" include (i) the provision to end-users and resellers, solely within
the Territory, of Company Communications Services on frequencies licensed to
the Company for Commercial Mobile Radio Services ("CMRS") provided in accor-
dance with the AT&T Agreement (collectively, the "Licensed Services") and (ii)
marketing and offering the Licensed Services within the Territory. The License
Agreement also grants to the Company the right and license to use Licensed
Marks on certain permitted mobile phones.
The License Agreement contains numerous restrictions with respect to the use
and modification of any of the Licensed Marks. Furthermore, the Company is ob-
ligated to use commercially reasonable efforts to cause all Licensed Services
marketed and provided using the Licensed Marks to be of comparable quality to
the Licensed Services marketed and provided by AT&T and its affiliates in areas
that are comparable to the Territory taking into account, among other things,
the relative stage of development of the areas. The License Agreement also sets
forth specific testing procedures to deter-
F-10
<PAGE>
TRITON PCS, INC. AND PREDECESSOR COMPANY
NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
(DECEMBER 31, 1997)
(4) AT&T TRANSACTION (CONTINUED)
mine compliance with these standards, and affords the Company with a grace pe-
riod to cure any instances of alleged noncompliance therewith.
The Company may not assign or sublicense any of its rights under the License
Agreement; provided, however, that the License Agreement may be assigned to the
Company's lenders under the Credit Facility (see note 6) and after the expira-
tion of any applicable grace and cure periods under the Credit Facility, such
lenders may enforce the Company's rights under the License Agreement and assign
the License Agreement to any person with AT&T's consent.
The term of the License Agreement is for five years (the "Initial Term") and
renews for an additional five-year period if neither party terminates the
Agreement. The License Agreement may be terminated by AT&T at any time in the
event of a significant breach by the Company, including the Company's misuse of
any Licensed Marks, the Company licensing or assigning any of the rights in the
License Agreement, the Company's failure to maintain AT&T's quality standards,
or a change in control of the Company occurs. After the Initial Term, AT&T may
also terminate the License Agreement upon the occurrence of certain transac-
tions described in the Stockholders' Agreement.
The License Agreement, along with the Exclusivity and Resale Agreements, have a
fair value of $20.3 million, as determined by an independent appraisal, with an
estimated useful life of 10 years.
ROAMING AGREEMENT
Pursuant to the Intercarrier Roamer Service Agreement, dated as of February 4,
1998 (the "Roaming Agreement"), between AT&T Wireless Services, Inc. and the
Company, each of AT&T PCS and the Company agrees to provide (each in its capac-
ity as serving provider, the "Serving Provider") mobile wireless radiotelephone
service for registered customers of the other party's (the "Home Carrier") cus-
tomers while such customers are out of the Home Carrier's geographic area and
in the geographic area where the Serving Carrier (itself or through affiliates)
holds a license or permit to construct and operate a mobile wireless radio/tel-
ephone system and station. Each Home Carrier whose customers receive service
from a Serving Carrier shall pay to such Serving Carrier 100% of the Serving
Carrier's charges for wireless service and 100% of pass-through charges (i.e.,
toll or other charges). Each Service Carrier's service charges per minute or
partial minute for the use for the first 3 years will be fixed at a declining
rate, and thereafter will be equal to an adjusted average home rate or such
lower rate as the parties negotiate from time to time. Each service Carrier's
toll charges per minute of use for the first 3 years will be fixed at a declin-
ing rate, and thereafter such other rates as the parties negotiate from time to
time.
The Roaming Agreement has a term of 20 years, unless earlier terminated by a
party due to the other party's uncured breach of any term of the Roaming Agree-
ment, the other party's license or permit to provide CMRS.
Neither party may assign or transfer the Roaming Agreement or any of its rights
thereunder except to an assignee of all or part of its license or permit to
provide CMRS, provided that such assignee expressly assumes all or the applica-
ble part of the obligations of such party under the Roaming Agreement.
The fair value of the Roaming Agreement, as determined by an independent ap-
praisal, was $5.5 million, with an estimated useful life of 20 years.
F-11
<PAGE>
TRITON PCS, INC. AND PREDECESSOR COMPANY
NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
(DECEMBER 31, 1997)
(5) SHORT-TERM DEBT
Convertible Notes
At various dates in 1997, certain private equity investors provided $1.6 mil-
lion in financing to L.L.C. in the form of convertible promissory notes. The
notes originally bore interest at 14% annually, payable at maturity. On Janu-
ary 15, 1998, L.L.C. assigned the notes to the Company. The Company, in con-
junction with Holdings and the noteholders, subsequently negotiated a revised
arrangement under which no interest would be paid on the notes, which became
convertible into approximately $3.2 million worth of Holdings' Series C pre-
ferred stock. The conversion of L.L.C. notes into Holdings equity occurred on
February 4, 1998. The $1.6 million preferred return to the investors has been
accounted for as a financing cost during the period the notes were outstand-
ing. Accordingly, the Company has accrued $1,228,029 in financing costs on the
notes as of December 31, 1997. The remaining $371,971 financing cost will be
recognized in the first quarter of calendar 1998.
Noninterest-bearing loans
During 1997, Holding's Cash Equity Investors provided short-term financing in
the form of $11.7 million in noninterest-bearing loans, which were advanced to
the Company. Pursuant to the Closing Agreement, such loans were converted to
equity of Holdings as a reduction of the requirements of the initial cash con-
tribution. Concurrently, Holdings contributed these funds to the Company,
which has recorded the transaction as additional paid in capital on the date
of the contribution.
(6) BANK CREDIT FACILITY
On February 3, 1998, (the "Credit Facility Effective Date"), the Company en-
tered into a Credit Agreement (the "Credit Facility"), a $425.0 million Credit
Facility with Holdings, The Chase Manhattan Bank, as Administrative Agent, and
certain banks and other financial institutions party thereto. The Credit Fa-
cility provides for (i) a $175.0 million senior secured term loan (the
"Tranche A Term Loan") which matures on the date that is eight and one-half
years from the credit Facility Effective Date, (ii) a $150.0 million senior
secured term loan (the "Tranche B Term Loan" and, together with the Tranche A
Term Loan, the "Term Loans") which matures on the date that is nine and one-
quarter years from the "Credit Facility Effective Date," and (iii) a $100.0
million senior secured revolving credit facility (the "Revolving Credit Facil-
ity" and, together with the commitments to make the Term Loans, the "Facili-
ties") which matures on the date that is eight and one-half years from the
Credit Facility Effective Date.
The commitment to make loans under the Revolving Credit Facility ("Revolving
Credit Loans" and, together with the Term Loans, the "Loans") automatically
and permanently reduces, beginning on the date that is six years and six
months after the Credit Facility Effective Date, in eight quarterly reductions
(the amount of each of the first two reductions, $5.0 million, the next four
reductions, $10.0 million, and the last two reductions, $25.0 million). The
Tranche A Term Loans are required to be repaid, beginning on the date that is
four years after the Credit Facility Effective Date, in eighteen consecutive
quarterly installments (the amount of each of the first four installments,
$4,375,000, the next four installments, $6,562,500, the next four installments
$8,750,000, the next four installments, $10,937,500, and the last two install-
ments, $26,250,000). The Tranche B Term Loans are required to be repaid begin-
ning on the date that is four years after the Credit Facility Effective Date,
in twenty-one consecutive quarterly installments (the amount of the first six-
teen installments, $375,000, the next four installments $7,500,000, and the
last installment, $114.0 million).
Interest on all loans accrue, at the Company's option, either at (i) (a) a LI-
BOR rate multiplied by a fraction, the numerator of which is the number one
and the denominator of which is the number one minus the aggregate of the max-
imum reserve percentages (including any marginal, special, emergency, or sup-
plemental reserves) expressed as a decimal established by the Board of Gover-
nors of the Federal Reserve System which the Administrative Agent is subject
for eurocurrency funding, plus (b) the Applicable Rate (as defined below)
(Loans bearing interest described in (i), "Eurodollar Loans") or (ii) (a) the
higher of (1) the Administrative Agent's prime rate and (2) the Federal Funds
Effective Rate (as defined in the Credit Facility) plus 0.5%, plus (b) the Ap-
plicable Rate (Loans bearing interest described in (ii), "ABR Loans"). Inter-
est on any overdue amounts will be at a rate per annum equal to 2% plus the
rate otherwise applicable to such amounts. The
F-12
<PAGE>
TRITON PCS, INC. AND PREDECESSOR COMPANY
NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
(DECEMBER 31, 1997)
(6) BANK CREDIT FACILITY (CONTINUED)
Applicable Rate means, with respect to Tranche B Term Loans, 1.75% per annum,
in the case of an ABR Loan, and 3.00% per annum, in the case of a Eurodollar
Loan, and, with respect to Tranche A Term Loans and Revolving Credit Loans, a
rate between 0.0% to 1.25% per annum (depending on the level of the Company's
ratio of debt to earnings before income taxes, depreciation, and amortization
(EBITDA) in the case of an ABR Loan, and a rate between 1.00% and 2.25% per an-
num (depending on the level of the Company's ratio of debt to EBITDA), in the
case of a Eurodollar Loan. The Credit Facility requires an annual commitment
fee of between 0.375% and 0.50% (depending on the level of the Company's ratio
of debt to EBITDA) of the unused portion of the Facilities payable quarterly in
arrears and a separate agent's fee payable to the Administrative Agent. The
Credit Facility also requires the Company to purchase an interest rate hedging
contract covering an amount equal to at least 50% of the total amount of the
outstanding indebtedness of the Company (other than indebtedness which bears
interest at a fixed rate). No such contracts have been entered into to date.
The Tranche A Term Loans and funds under the Revolving Credit Facility are not
available to the Company until the Tranche B Term Loans are fully drawn or be-
come unavailable pursuant to the terms of the Credit Facility.
The Term Loans are required to be prepaid and commitments under the Revolving
Credit Facility reduced in an aggregate amount equal to (i) 50% of excess cash
flow of each fiscal year commencing the fiscal year ending December 31, 2001,
(ii) 100% of the net proceeds of asset sales, in excess of a yearly threshold,
outside the ordinary course of business or unused insurance proceeds, (iii)
100% of the net cash proceeds in excess of the initial $150.0 million of issu-
ances of debt obligations and (iv) 50% of the net cash proceeds of issuances of
equity securities (other than in connection with the Equity Commitments); pro-
vided, that the prepayments and reductions set forth under clauses (iii) and
(iv) will not be required if, after giving effect to such issuance, (a) the
Company's ratio of senior debt to EBITDA would be less than 5 to 1 and (b) the
Company would be in pro forma compliance with certain covenants in the Credit
Facility.
All obligations of the Company under the Facilities are unconditionally and ir-
revocably guaranteed (the "Bank Facility Guarantees") by Holdings and each ex-
isting and subsequently acquired or organized domestic subsidiary of the Compa-
ny. The Facilities and the Bank Facility Guarantees, and any related hedging
contracts provided by the lenders under the Credit Facility, will be secured by
substantially all of the assets of the Company and each existing and subse-
quently acquired or organized domestic subsidiary of the Company, including a
first priority pledge of all of the capital stock held by the Company or any of
its subsidiaries; provided that the pledge of shares of foreign subsidiaries
may be limited to 65% of the outstanding shares of such foreign subsidiaries.
The PCS Licenses will be held by one or more single purpose subsidiaries of the
Company and will not be pledged to secure the obligations of the Company under
the Credit Facility. Each single purpose subsidiary will not be allowed by the
Company to incur any liabilities or obligations other than the Bank Facility
Guarantee issued by it, the security agreement entered into by it in connection
with the Credit Facility, and, in the case of any single purpose subsidiary es-
tablished to hold real estate, liabilities incurred in the ordinary course of
business of such subsidiary which are incident to being the lessee of real
property of the purchaser, owner of lessee of equipment and taxes and other li-
abilities incurred in the ordinary course in order to maintain its existence.
The Credit Facility contains covenants customary for facilities and transac-
tions similar to the Credit Facility, including covenants relating to the
amounts of indebtedness that the Company may incur, limitations on dividends
and distributions on, and redemptions and repurchases of, capital stock and
other similar payments and various financial maintenance covenants. The Credit
Facility also contains covenants relating to the population covered by the
Company's network and number of customers and customary representations, war-
ranties, indemnities, conditions precedent to borrowing, and events of default.
Loans under the Credit Facility are available to fund capital expenditures re-
lated to the construction of the Company's PCS network, the acquisition of re-
lated businesses, working capital needs of the Company, and customer acquisi-
tion costs. All indebtedness under the Credit Facility will constitute Senior
Debt.
The terms of the Credit Facility currently allow the Company to incur only $150
million of indebtedness pursuant to the issuance of Subordinated Debt (as de-
fined in the Credit Facility). The Company is currently negotiating with the
lenders under the Credit Facility to amend the terms of the Credit Facility
(the "Amendment to Credit Facility") to, among other things, allow for the
incurrance of additional indebtedness.
As of March 27, 1998, the Company has drawn $75 million of Tranche B Term Loans
under the facility.
F-13
<PAGE>
TRITON PCS, INC. AND PREDECESSOR COMPANY
NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
(DECEMBER 31, 1997)
(7) COMMITMENTS AND CONTINGENCIES
Operating Leases
The Company has entered into various operating leases for its offices and
equipment. The Company incurred $13,070 of rent expense in the period from in-
ception to December 31, 1997. Future minimum lease payments are as follows:
<TABLE>
<CAPTION>
----------
<S> <C>
1998 $ 317,485
1999 484,090
2000 461,620
2001 457,672
2002 394,530
Thereafter $1,014,750
</TABLE>
Employment Agreements
In 1998, the Company entered into five-year employment agreements with three
of its officers. The employment agreements provide for minimum aggregate an-
nual compensation of $1,015,000 for 1998 and $795,000 for the years 1999
through 2001, as well as annual bonuses based upon performance. The employment
agreements also provide that in the event that the officers are terminated,
certain liabilities will be incurred by the Company. Also, upon the death or
disability of the officers, the Company will be required to make certain pay-
ments.
(8) RELATED-PARTY TRANSACTIONS
During the period covered by these financial statements, L.L.C. incurred cer-
tain costs on behalf of Triton Cellular Partners L.P. (Triton Cellular), an
entity affiliated with the Company by virtue of management overlap and the
sharing of leased facilities. Such costs totaled $148,100 and will be reim-
bursed by Triton Cellular in 1998. In addition, the Company purchased $22,800
of equipment from Horizon Cellular Telephone Company, L.P. (Horizon Cellular),
an entity affiliated with the Company by virtue of management overlap and the
sharing of leased facilities. Horizon Cellular was in the process of conclud-
ing its business activities as of December 31, 1997.
(9) CAPITAL CONTRIBUTIONS
On February 4, 1998, pursuant to the Securities Purchase Agreement, Holdings
issued $140,000,000 of equity to certain institutional investors and manage-
ment stockholders. The Securities Purchase Agreement requires the institu-
tional investors and management stockholders to fund their unconditional and
irrevocable obligations in installments in accordance with the following
schedule:
<TABLE>
<CAPTION>
------------
DATE DUE AMOUNT
-------- ------------
<S> <C>
Initial closing (funded on February 4, 1998) $ 45,000,000
First anniversary of initial closing 35,000,000
Second anniversary of initial closing 35,000,000
Third anniversary of initial closing 25,000,000
$140,000,000
</TABLE>
Pursuant to the Securities Purchase Agreement, the initial cash contribution
and the unfunded commitments are required to be made to Holdings. Pursuant to
the Closing Agreement, Holdings has directed that all cash contributions sub-
sequent to the initial cash contribution be made directly to the Company.
During 1997, Holding's Cash Equity Investors provided short-term financing in
the form of $11.7 million in noninterest-bearing loans, which were advanced to
the Company. Pursuant to the Closing Agreement, such loans were converted to
equity of Holdings as a reduction of the requirements of the initial cash con-
tribution. Concurrently, Holdings contributed these funds to the Company,
which has recorded the transaction as additional paid in capital on the date
of contribution.
F-14
<PAGE>
TRITON PCS, INC. AND PREDECESSOR COMPANY
NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
(DECEMBER 31, 1997)
(9) CAPITAL CONTRIBUTION (CONTINUED)
On March 10,1998, Holdings received commitments for an additional $40 million
in equity contributions, of which $8 million has been received to date. These
funds were concurrently contributed to the Company.
Common Stock
On October 2, 1997, the Company issued 100 shares of its common stock to Hold-
ings.
L.L.C. Members' Capital
Members' capital contributions are recorded when received. Total committed cap-
ital at October 31, 1997 was $1.00. Cash available for distribution will be
made in proportion as their capital accounts. Allocation of income, gains,
losses, and deductions will be in proportion to their capital accounts
(10) INCOME TAXES
The Company accounts for income taxes in accordance with the principles of SFAS
109. There is no provision for income taxes for the period March 6, 1997 to De-
cember 31, 1997.
Total income tax expense differs from the amount computed at the U.S. federal
statutory rate, as follows:
<TABLE>
<CAPTION>
----------
<S> <C>
Income tax benefit at statutory rate of 35% $1,584,336
Valuation allowance (1,584,336)
----------
Total income tax provision $ --
</TABLE>
Deferred income tax assets reflect the net effects of temporary differences be-
tween the carrying value of assets and liabilities and their tax bases. The
components of the Company's deferred tax asset at December 31, 1997 are as fol-
lows:
<TABLE>
<CAPTION>
----------
<S> <C>
Start-up costs capitalized for tax purposes $1,093,123
Accrued financing costs 491,213
----------
1,584,336
Less: valuation allowance (1,584,336)
----------
Net deferred tax asset $ --
</TABLE>
Under SFAS 109, a valuation allowance is recognized if, based on the weight of
available evidence, it is more likely than not that some portion or all of the
deferred tax asset will not be realized. As the Company is a development stage
enterprise, management has concluded that a full valuation allowance for all of
the Company's deferred tax assets is appropriate.
(11) PENDING ACQUISITIONS
On March 10, 1998, the Company signed a purchase agreement to acquire an exist-
ing cellular system (the "Myrtle Beach System") which serves the South Carolina
5--Georgetown Rural Service Area (the "SC-5") for a purchase price of approxi-
mately $160 million from Vanguard Cellular Systems. The Company intends to in-
tegrate the Myrtle Beach System into its planned PCS Network. The acquisition
is subject to closing conditions typical in a transaction of this nature.
On March 24, 1998, Holdings entered into a non-binding letter of intent with
AT&T to acquire additional PCS licenses covering the Norfolk/Virginia Beach, VA
region and sections of Georgia and North Carolina, for an aggregate considera-
tion of approximately $137 million, of which at least $32 million is expected
to be represented by additional equity interests in Holdings. The planned ac-
quisition includes a PCS system covering the Norfolk/Virginia Beach, VA region
that is substantially completed. These potential acquisitions are subject to
conditions typical in acquisitions of this nature, certain of which, including
FCC consent, may be beyond the control of Holdings. If the transaction is con-
summated, Holdings intends to contribute the assets acquired to the Company.
F-15
<PAGE>
TRITON PCS, INC. AND PREDECESSOR COMPANY
COMBINED BALANCE SHEET
JUNE 30, 1998
<TABLE>
<CAPTION>
------------
JUNE 30,
1998
------------
(UNAUDITED)
<S> <C>
ASSETS:
Current assets:
Cash and cash equivalents $261,508,612
Accounts receivable, net of allowances 5,487,000
Due from related party 64,657
Prepaid expenses 928,188
------------
Total current assets 267,988,457
Property, plant and equipment:
Land 313,000
Cellular telephone systems 21,826,000
Office furniture and equipment 3,680,340
Construction in progress 9,212,186
------------
35,031,526
Less accumulated depreciation (108,067)
------------
Net property, plant and equipment 34,923,459
Intangible assets 263,165,305
Other assets 367,789
------------
$566,445,010
============
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 6,611,179
Accrued interest 3,641,389
------------
Total current liabilities 10,252,568
Long-term debt 371,692,463
Deferred income taxes 13,236,630
Commitments and contingencies --
Shareholder's Equity and Members Capital:
Common stock, $.01 par value, 1,000 shares authorized, 100
shares
issued and outstanding 1
Additional paid-in capital 181,821,118
Deficit accumulated during the development stage (10,557,770)
------------
Total shareholder's equity and Members Capital: 171,263,349
------------
$566,445,010
============
</TABLE>
See accompanying notes to combined financial statements.
F-16
<PAGE>
TRITON PCS, INC. AND PREDECESSOR COMPANY
COMBINED STATEMENTS OF OPERATIONS
(UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 1998
<TABLE>
<CAPTION>
---------------------------------------------------------
PERIOD FROM SIX MONTHS PERIOD FROM
MARCH 6, 1997 ENDED MARCH 6, 1997
TO JUNE 30, 1997 JUNE 30, 1998 TO JUNE 30, 1998
---------------- ------------- ----------------
<S> <C> <C> <C> <C> <C>
Expenses:
Operations and
development $ -- $ 1,443,979 $ 2,317,456
General and
administrative 522,823 3,737,427 5,599,755
Depreciation and
amortization -- 1,085,504 1,090,504
-------- ----------- -----------
Loss from operations 522,823 6,266,910 9,007,715
Interest expense -- 9,871,809 11,099,838
Interest (income) -- (2,739,163) (2,747,158)
-------- ----------- -----------
Loss before taxes 522,823 13,399,556 17,360,395
Tax benefit -- 6,802,625 6,802,625
-------- ----------- -----------
Net loss $522,823 $ 6,596,931 $10,557,770
======== =========== ===========
</TABLE>
See accompanying notes to combined financial statements.
F-17
<PAGE>
TRITON PCS, INC. AND PREDECESSOR COMPANY
COMBINED STATEMENTS OF SHAREHOLDER'S EQUITY (DEFICIT) AND MEMBERS CAPITAL
(UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 1998
<TABLE>
<CAPTION>
-----------------------------------------------------
ADDITIONAL
COMMON STOCK PAID-IN ACCUMULATED
SHARES AMOUNT CAPITAL DEFICIT TOTAL
------ ------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Issuance of common stock 100 $ 1 $ -- $ -- $ 1
Net loss -- -- -- (3,960,839) (3,960,839)
--- --- ------------ ------------ ------------
Balance at December 31,
1997 100 1 -- (3,960,839) (3,960,838)
Capital contribution
from Parent -- -- 181,821,118 -- 181,821,118
Net loss -- -- -- (6,596,931) (6,596,931)
--- --- ------------ ------------ ------------
Balance at June 30, 1998 100 $ 1 $181,821,118 $(10,557,770) $171,263,349
=== === ============ ============ ============
</TABLE>
See accompanying notes to combined financial statements.
F-18
<PAGE>
TRITON PCS, INC. AND PREDECESSOR COMPANY
COMBINED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
-------------------------------------------------
PERIOD FROM SIX MONTHS PERIOD FROM
MARCH 6, 1997 ENDED MARCH 6, 1997
TO JUNE 30, 1997 JUNE 30, 1998 TO JUNE 30, 1998
---------------- ------------- ----------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net loss $(522,823) $ (6,596,931) $ (10,557,770)
Adjustments to reconcile
net loss to cash used in
operating activities:
Depreciation and
amortization -- 1,085,504 1,090,266
Deferred income taxes -- (6,802,625) (6,802,625)
Accretion of interest -- 5,980,188 5,980,188
Change in operating
assets and liabilities:
Prepaid expenses (69) (296,228) (317,188)
Accounts payable and
accrued expenses 118,589 2,429,690 4,474,150
Accrued interest -- 4,013,360 4,869,418
--------- ------------- -------------
Net cash used in
operating activities (404,303) (187,042) (1,263,561)
CASH FLOWS FROM INVESTING
ACTIVITIES:
Capital expenditures (10,567) (9,753,582) (10,231,238)
Myrtle Beach acquisition,
net of cash acquired
(note 4) -- (162,475,478) (162,475,478)
--------- ------------- -------------
Net cash used in
investing activities (10,567) (172,229,060) (172,706,716)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Borrowings under credit
facility -- 75,000,000 75,000,000
Borrowings on notes
payable 509,101 -- 13,343,500
Borrowings on subordinated
debt -- 291,000,000 291,000,000
Issuance of common stock -- -- 1
Capital contributions from
parent -- 68,346,606 68,346,606
Payment of deferred
transaction costs -- (11,822,145) (12,146,561)
Advances from related
party, net 68,934 38,041 (64,657)
--------- ------------- -------------
Net cash provided by
financing activities 578,035 422,562,502 435,478,889
--------- ------------- -------------
NET INCREASE IN CASH 163,165 250,146,400 261,508,612
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD -- 11,362,212 --
--------- ------------- -------------
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 163,165 $ 261,508,612 $ 261,508,612
========= ============= =============
</TABLE>
See accompanying notes to combined financial statements.
F-19
<PAGE>
TRITON PCS, INC. AND PREDECESSOR COMPANY
NOTES TO COMBINED FINANCIAL STATEMENTS
JUNE 30, 1998
(UNAUDITED)
(1) DESCRIPTION OF BUSINESS
Triton PCS, Inc (formerly Triton PCS License Company, Inc. with its subsidi-
aries referred to as the "Company") was formed on October 2, 1997 as a wholly-
owned subsidiary of Triton PCS Holdings, Inc. (formerly Triton PCS, Inc. re-
ferred to as "Holdings" or "Parent"). The Company will be the exclusive pro-
vider of wireless mobility services in the AT&T Corp. (together with affiliates
"AT&T") mid-Atlantic and Southeast regions. The Company intends to become the
leading provider of broadband personal communications services ("PCS") in Vir-
ginia, South Carolina, North Carolina, northern Georgia, and surrounding areas.
The Company is authorized to provide PCS Service in major population and busi-
ness centers such as Charleston, SC, Columbia, SC, Greenville/Spartansburg, SC,
Richmond, VA and Augusta, GA, as well as major resort destinations such as Myr-
tle Beach, SC, Hilton Head, SC, and Kiawah Island, SC.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
On March 6, 1997, Triton Communications L.L.C. ("L.L.C.") was formed to ex-
plore various business opportunities in the wireless telecommunications indus-
try, principally related to PCS and cellular activities. During the period
March 6, 1997 through October 1, 1997, L.L.C.'s activities consisted princi-
pally of hiring a management team, raising capital, and negotiating strategic
business relationships, primarily related to PCS business opportunities. Subse-
quent to October 2, 1997, these activities continued but were conducted primar-
ily through the Company. Consequently, for purposes of the accompanying finan-
cial statements, L.L.C. has been treated as a "predecessor" entity. The chief
executive officer and sole member of L.L.C. is also the chief executive officer
and principal shareholder of Holdings, and consequently the Company. As a re-
sult of this relationship, certain financing relationships and the similar na-
ture of the business activities conducted by each respective legal entity,
L.L.C. and the Company are considered companies under common control.
The accompanying combined financial statements are unaudited and have been
prepared by management. In the opinion of management, these combined financial
statements contain all of the adjustments, consisting of normal recurring ad-
justments, necessary to present fairly, in summarized form, the financial posi-
tion and the results of operations of the Company. The results of operations
for the six month periods ended June 30, 1998 are not indicative of the results
that may be expected for the year ending December 31, 1998. The financial in-
formation presented herein should be read in conjunction with the combined fi-
nancial statements for the year ended December 31, 1997.
The combined financial statements incorporate the PCS-related business activ-
ities of L.L.C. and the Company. The consolidated accounts of the Company in-
clude Triton PCS Inc; Triton PCS Holdings Company L.L.C.; Triton Management
Company, Inc.; Triton PCS Property Company L.L.C.; Triton PCS Equipment Company
L.L.C.; Triton PCS Operating Company L.L.C.; and Triton PCS License Company
L.L.C. All significant intercompany accounts or balances have been eliminated
in consolidation.
Use of Estimates
The preparation of the financial statements in conformity with generally ac-
cepted accounting principles requires management to make estimates and assump-
tions that affect the reported amounts of assets and disclosure of contingent
assets and liabilities at the date of the financial statements and the reported
amount of expenses during the reporting period. Actual results could differ
from those estimates.
Comprehensive Income
The Company adopted SFAS No. 130, "Reporting Comprehensive Income", effective
January 1, 1998. SFAS 130 establishes standards for reporting and display of
comprehensive income and its components in a full set of general-purpose
F-20
<PAGE>
TRITON PCS, INC. AND PREDECESSOR COMPANY
NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
JUNE 30, 1998
(UNAUDITED)
financial statements. Comprehensive income is the change in equity of a busi-
ness enterprise during a period from transactions and the events and circum-
stances from non-owner sources. For the periods presented in the accompanying
statements of operations, comprehensive income equals the amounts reported on
the accompanying statements of operations.
Construction in Progress
Construction in progress includes expenditures for the design, construction
and testing of the Company's PCS network and also includes costs associated
with developing information systems. The Company capitalizes interest on cer-
tain of its construction in progress activities. As of June 30, 1998, interest
capitalized totaled $217,415. When the assets are placed in service, the Com-
pany will transfer the assets to the appropriate property and equipment cate-
gory and depreciate these assets over their respective estimated useful lives.
The Company expects to commence PCS service in the first quarter 1999 or
shortly thereafter.
Investment in PCS Licenses
Investments in PCS Licenses are recorded at their fair value as determined by
an independent appraisal. In transactions in which the acquisition of the li-
censes has been funded using debt, the Company records capitalized interest
while readying the licenses in the Company's region for use. The Company will
begin amortizing its licenses over 40 years upon commencement of service,
which is expected in its first market in the first quarter of 1999 or shortly
thereafter.
Intangible Assets
Intangible assets consist of amounts relating to FCC Licenses; License, Exclu-
sivity and Resale Agreements, Roaming Agreement, and deferred financing costs.
These amounts are being amortized on a straight-line basis over their useful
lives as follows:
<TABLE>
<CAPTION>
YEARS
-------
<S> <C>
FCC Licenses 40
Roaming Agreement 20
License, Exclusivity, and Resale Agreements 10
Deferred Financing Costs 8.75-10
Subscriber List 5
</TABLE>
At each balance sheet date, management evaluates the recoverability of intan-
gible assets using certain financial indicators, such as historical and future
ability to generate income from operations. The Company's policy is to record
an impairment loss against the net unamortized cost of the intangible asset in
the period when it is determined that the carrying amount of the asset may not
be recoverable. This determination is based on an evaluation of such factors
as the occurrence of a significant event, a significant change in the environ-
ment in which the business operates or if the expected future net cash flows
(undiscounted and without interest) would become less than the carrying amount
of the asset.
New Accounting Pronouncements
The Company adopted SFAS No. 130, "Reporting Comprehensive Income", which
was effective for fiscal year beginning after December 15, 1997. SFAS 130 es-
tablished standards for reporting and display of comprehensive income and its
components in a full set of general-purpose financial statements. Comprehen-
sive income is the change in equity of a business enterprise during a period
from transactions and the events and circumstances from non-owner sources. For
the periods presented in the accompanying statements of operations, comprehen-
sive income equals the amounts reported on the accompanying statement of
operations.
F-21
<PAGE>
TRITON PCS, INC. AND PREDECESSOR COMPANY
NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
JUNE 30, 1998
(UNAUDITED)
In February 1997, the FASB issued Statement No. 129, "Disclosure of Informa-
tion about Capital Structure." ("SFAS 129") This statement establishes stan-
dards for disclosing information about an entity's capital structure. The Com-
pany has adopted SFAS 129 and is effective for periods ending after December
15, 1997. The effect of initial application of this Statement did not have a
material adverse effect on the Company financial statements.
In June 1997, the FASB issued Statement No. 131, "Disclosures About Segments
of an Enterprise and Related Information" ("SFAS 131"). This statement estab-
lishes additional standards for segment reporting in the financial statements
and is effective for fiscal years beginning after December 15, 1997. The Com-
pany has adopted SFAS 131. The effect of initial application of the statement
did not have a material effect on the Company's financial statements.
In February 1998, the FASB issued Statement No. 132, "Employers' Disclosures
about Pensions and Other Postretirement Benefits" ("SFAS 132"). This statement
is effective for fiscal years beginning after December 15, 1997. It is not ex-
pected that application of this statement will have a material effect on the
Company's financial statements.
In April 1998, the Accounting Standards Executive Committee (AcSEC) of the
AICPA issued Statement of Position (SOP) 98-5, Reporting on the Costs of Start-
up Activities ("SOP 98-5"). This statement requires that the costs of start-up
activities, including organization costs, be expensed as incurred and is
effective for fiscal years beginning after December 31, 1998. The Company has
elected early adoption of this statement beginning in fiscal year ending
December 31, 1998. The effect of initial application of the statement did not
have a material effect on the Company's financial statements.
In June 1998, the FASB issued Statement No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS 133"). This statement is effective
for all fiscal quarters of all fiscal years beginning after June 15, 1999. The
Company has not yet fully analyzed the impact of this statement on its finan-
cial statements.
(3) AT&T TRANSACTION
On October 8, 1997, Holdings entered into a Securities Purchase Agreement with
AT&T Wireless PCS, Inc ("AT&T PCS"), a subsidiary of AT&T, and the other stock-
holders of Holdings, whereby the Company will be the exclusive provider of
wireless mobility services in the AT&T mid-Atlantic and southeast regions.
On February 4, 1998, Holdings executed the Closing Agreement with AT&T PCS and
the other stockholders of Holdings, finalizing the transactions contemplated in
the Securities Purchase Agreement. In accordance with the Closing Agreement,
Holdings and AT&T PCS and the other stockholders of Holdings consented that one
or more of Holdings' subsidiaries shall enter into certain agreements or con-
duct certain operations on the condition that such subsidiaries shall at all
times be direct or indirect wholly-owned subsidiaries of Holdings and Holdings
shall cause such subsidiaries to perform the obligations and conduct such oper-
ations required to be performed or conducted under those agreements.
Under the Closing Agreement, Holdings issued equity to AT&T PCS in exchange for
20 MHz A and B block PCS licenses, which were contributed to the Company, and
certain other agreements covering certain areas in the southeastern United
States.
In connection with the closing of the AT&T transaction, the Company executed or
was a party to certain agreements, including the following:
STOCKHOLDERS' AGREEMENT
Resale Agreement
Pursuant to the Stockholders' Agreement, the Company is required to enter into
a Resale Agreement at the request of AT&T. Under this agreement, AT&T PCS will
be granted the right to purchase and resell on a nonexclusive basis access to
F-22
<PAGE>
TRITON PCS, INC. AND PREDECESSOR COMPANY
NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
JUNE 30, 1998
(UNAUDITED)
and usage of the Company's services in the Company's Licensed Area. The Company
will retain the continuing right to market and sell its services to customers
and potential customers in competition with AT&T PCS.
The Resale Agreement will have a term of ten years and will renew automatically
for successive one-year periods unless, after the eleventh anniversary thereof,
either party elects to terminate the Resale Agreement. Furthermore, AT&T PCS
may terminate the Resale Agreement at any time for any reason on 180 days writ-
ten notice.
The Company has agreed that the rates, terms, and conditions of service, taken
as a whole, provided by the Company to AT&T PCS pursuant to the Resale Agree-
ment, shall be at least as favorable as (or if permitted by applicable law, su-
perior to) the rates, terms, and conditions of service, taken as a whole, pro-
vided by the Company to any other customer. Without limiting the foregoing, the
rate plans offered by the Company pursuant to the Resale Agreement shall be de-
signed to result in a discounted average actual rate per minute paid by AT&T
PCS for service below the weighted average actual rate per minute billed by the
Company to its subscribers generally for access and air time.
Neither party may assign or transfer the Resale Agreement or any of its rights
thereunder without the other party's prior written consent, which will not be
unreasonably withheld, except (a) to an affiliate of that party at the time of
execution of the Resale Agreement, (b) by the Company to any of its operating
subsidiaries, and (c) to the transferee of a party's stock or substantially all
of its assets, provided that all FCC and other necessary approvals have been
received.
The Company expects to enter into the Resale Agreement upon commencement of its
operations in the initial configuration.
Exclusivity
Under the Stockholders' Agreement, none of the Stockholders will provide or re-
sell, or act as the agent for any person offering, within the Territory mobile
wireless telecommunications services initiated or terminated using Time Divi-
sion Multiple Access and frequencies licensed by the FCC ("Company Communica-
tions Services"), except AT&T PCS and its affiliates may (i) resell or act as
agent for the Company in connection with the provision of Company Communica-
tions Services, (ii) provide or resell wireless telecommunications services to
or from certain specific locations, and (iii) resell Company Communications
Services for another person in any area where the Company has not placed a sys-
tem into commercial service by August 2002. Additionally, with respect to the
markets listed on the Roaming Agreement, each of the Company and AT&T PCS
agrees to cause their respective affiliates in their home carrier capacities to
program and direct the programming of customer equipment so that the other
party in its capacity as the serving carrier is the preferred provider in such
markets, and refrain from inducing any of its customers to change such program-
ming.
Build-out
The Company is required to conform to certain requirements regarding the con-
struction of the Company's PCS system. In the event that the Company breaches
these requirements, AT&T PCS may terminate its exclusivity provisions.
Disqualifying Transactions
In the event of a merger, asset sale, or consolidation, as defined, involving
AT&T and another person that derives annual revenues in excess of $5.0 billion,
derives less than one third of its aggregate revenues from wireless telecommu-
nications, and owns FCC licenses to offer mobile wireless telecommunication
services to more than 25% of the population within the Company's territory,
AT&T and the Company have certain rights. AT&T may terminate its exclusivity in
the territory in which the other party overlaps that of the Company. In the
event that AT&T proposes to sell, transfer, or assign to a non-affiliate its
PCS system owned and operated in Charlotte, NC; Atlanta, GA; Baltimore, MD; and
Washington, DC, or Richmond, VA BTAs, then AT&T will provide the Company with
the opportunity for a 180 day period to have AT&T jointly market the Company's
licenses that are included in the MTA that AT&T is requesting to sell.
The Stockholders' Agreement expires on February 4, 2009. Certain provisions ex-
pire upon an initial public offering.
F-23
<PAGE>
TRITON PCS INC. AND PREDECESSOR COMPANY
NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
JUNE 30, 1998
(UNAUDITED)
LICENSE AGREEMENT
Pursuant to a Network Membership License Agreement, dated February 4, 1998 (the
"License Agreement"), between AT&T and the Company, AT&T granted to the Company
a royalty-free, nontransferable, nonsublicensable, limited right, and license
to use certain Licensed Marks solely in connection with certain licensed activ-
ities. The Licensed Marks include the logo containing the AT&T and globe design
and the expression "Member, AT&T Wireless Services Network." The "Licensed Ac-
tivities" include (i) the provision to end-users and resellers, solely within
the Territory, of Company Communications Services on frequencies licensed to
the Company for Commercial Mobile Radio Services ("CMRS") provided in accor-
dance with the AT&T Agreement (collectively, the "Licensed Services") and (ii)
marketing and offering the Licensed Services within the Territory. The License
Agreement also grants to the Company the right and license to use Licensed
Marks on certain permitted mobile phones.
The License Agreement contains numerous restrictions with respect to the use
and modification of any of the Licensed Marks. Furthermore, the Company is ob-
ligated to use commercially reasonable efforts to cause all Licensed Services
marketed and provided using the Licensed Marks to be of comparable quality to
the Licensed Services marketed and provided by AT&T and its affiliates in areas
that are comparable to the Territory taking into account, among other things,
the relative stage of development of the areas. The License Agreement also sets
forth specific testing procedures to determine compliance with these standards,
and affords the Company with a grace period to cure any instances of alleged
noncompliance therewith.
The Company may not assign or sublicense any of its rights under the License
Agreement; provided, however, that the License Agreement may be assigned to the
Company's lenders under the Credit Facility (see note 7) and after the expira-
tion of any applicable grace and cure periods under the Credit Facility, such
lenders may enforce the Company's rights under the License Agreement and assign
the License Agreement to any person with AT&T's consent.
The term of the License Agreement is for five years (the "Initial Term") and
renews for an additional five-year period if neither party terminates the
Agreement. The License Agreement may be terminated by AT&T at any time in the
event of a significant breach by the Company, including the Company's misuse of
any Licensed Marks, the Company licensing or assigning any of the rights in the
License Agreement, the Company's failure to maintain AT&T's quality standards,
or a change in control of the Company occurs.
After the Initial Term, AT&T may also terminate the License Agreement upon the
occurrence of certain transactions described in the Stockholders' Agreement.
ROAMING AGREEMENT
Pursuant to the Intercarrier Roamer Service Agreement, dated as of February 4,
1998 (the "Roaming Agreement"), between AT&T Wireless Services, Inc. and the
Company, each of AT&T PCS and the Company agrees to provide (each in its capac-
ity as serving provider, the "Serving Provider") mobile wireless radiotelephone
service for registered customers of the other party's (the "Home Carrier") cus-
tomers while such customers are out of the Home Carrier's geographic area and
in the geographic area where the Serving Carrier (itself or through affiliates)
holds a license or permit to construct and operate a mobile wireless radio/tel-
ephone system and station. Each Home Carrier whose customers receive service
from a Serving Carrier shall pay to such Serving Carrier 100% of the Serving
Carrier's charges for wireless service and 100% of pass-through charges (i.e.,
toll or other charges). Each Service Carrier's service charges per minute or
partial minute for the use for the first 3 years will be fixed at a declining
rate, and thereafter will be equal to an adjusted average home rate or such
lower rate as the parties negotiate from time to time. Each service Carrier's
toll charges per minute of use for the first 3 years will be fixed at a declin-
ing rate and thereafter such other rates as the parties negotiate from time to
time.
The Roaming Agreement has a term of 20 years, unless earlier terminated by a
party due to the other party's uncured breach of any term of the Roaming Agree-
ment, the other party's license or permit to provide CMRS.
F-24
<PAGE>
TRITON PCS, INC. AND PREDECESSOR COMPANY
NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
JUNE 30, 1998
(UNAUDITED)
Neither party may assign or transfer the Roaming Agreement or any of its rights
thereunder except to an assignee of all or part of its license or permit to
provide CMRS, provided that such assignee expressly assumes all or the applica-
ble part of the obligations of such party under the Roaming Agreement.
(4) MYRTLE BEACH ACQUISITION
On June 30, 1998, the Company acquired an existing cellular system (the "Myrtle
Beach System") which serves the South Carolina 5--Georgetown Rural Service Area
(the "SC-5") for a purchase price of approximately $162.5 million from Vanguard
Cellular Systems. The Company intends to integrate the Myrtle Beach System into
its planned PCS Network. As a result of the acquisition, the Company will no
longer be considered a development stage enterprise under SFAS No. 7. The ef-
fects of the acquisition have been presented using the purchase method and ac-
cordingly, the purchase price was allocated to the assets acquired and liabili-
ties assumed based upon management's best preliminary estimate of their fair
value.
The company expects to further refine the purchase price allocation which may
result in adjustments to recorded amounts. The tentative purchase price has
been allocated as follows, based on the estimated fair values of the acquired
assets and liabilities:
<TABLE>
<CAPTION>
AMOUNT LIFE
------------ --------
<S> <C> <C>
Net Current Assets..................................... $ 3,635,000 --
Net Property, Plant and Equipment...................... 24,692,000 8 years
Licenses............................................... 114,033,000 40 years
Subscriber List........................................ 20,000,000 5 years
Other Net Assets....................................... 140,000 --
------------
Total Purchase Price................................... $162,500,000
</TABLE>
(5) INTANGIBLE ASSETS
A summary of intangible assets and related accumulated amortization as of June
30, 1998 is as follows.
<TABLE>
<S> <C>
FCC Licenses.................................................... $209,302,399
License, Exclusivity and Resale Agreements...................... 20,478,195
Subscriber List................................................. 20,000,000
Roaming Agreement............................................... 5,548,279
Deferred Financing Costs........................................ 9,214,645
265,543,518
------------
Less: accumulated amortization.................................. 1,378,213
$263,165,305
============
</TABLE>
(6) SHORT-TERM DEBT
Convertible Notes
At various dates in 1997, certain private equity investors provided $1.6 mil-
lion in financing to L.L.C. in the form of convertible promissory notes. The
notes originally bore interest at 14% annually, payable at maturity. On January
15, 1998, L.L.C. assigned the notes to the Company. The Company, in conjunction
with Holdings and the noteholders, subsequently negotiated a revised arrange-
ment under which no interest would be paid on the notes, which became convert-
ible into approximately $3.2 million worth of Holdings' Series C preferred
stock. The conversion of L.L.C. notes into Holdings equity occurred on February
4, 1998. The $1.6 million preferred return to the investors was accounted for
as a financing cost during the period the notes were outstanding.
Noninterest bearing loans
During 1997, Holding's Cash Equity Investors provided short-term financing in
the form of $11.7 million noninterest-bearing loans, which were advanced to the
Company. Pursuant to the Closing Agreement, such loans were converted to equity
of Holdings as a reduction of the requirements of the initial cash contribu-
tion. Concurrently, Holdings contributed these funds to the Company, which has
recorded the transaction as additional paid in capital on the date of the con-
tribution.
(7) BANK CREDIT FACILITY
On February 3, 1998, (the "Credit Facility Effective Date"), the Company en-
tered into a Credit Agreement (the "Credit Facility"), a $425.0 million Credit
Facility with Holdings, The Chase Manhattan Bank, as Administrative Agent, and
certain banks
F-25
<PAGE>
TRITON PCS, INC. AND PREDECESSOR COMPANY
NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
JUNE 30, 1998
(UNAUDITED)
and other financial institutions party thereto. The Credit Facility provides
for (i) a $175.0 million senior secured term loan (the "Tranche A Term Loan")
which matures on the date that is eight and one-half years from the credit Fa-
cility Effective Date, (ii) a $150.0 million senior secured term loan (the
"Tranche B Term Loan" and, together with the Tranche A Term Loan, the "Term
Loans") which matures on the date that is nine and one-quarter years from the
"Credit Facility Effective Date," and (iii) a $100.0 million senior secured re-
volving credit facility (the "Revolving Credit Facility" and, together with the
commitments to make the Term Loans, the "Facilities") which matures on the date
that is eight and one-half years from the Credit Facility Effective Date.
The commitment to make loans under the Revolving Credit Facility ("Revolving
Credit Loans" and, together with the Term Loans, the "Loans") automatically and
permanently reduces, beginning on the date that is six years and six months af-
ter the Credit Facility Effective Date, in eight quarterly reductions (the
amount of each of the first two reductions, $5.0 million, the next four reduc-
tions, $10.0 million, and the last two reductions, $25.0 million). The Tranche
A Term Loans are required to be repaid, beginning on the date that is four
years after the Credit Facility Effective Date, in eighteen consecutive quar-
terly installments (the amount of each of the first four installments,
$4,375,000, the next four installments, $6,562,500, the next four installments
$8,750,000, the next four installments, $10,937,500, and the last two install-
ments, $26,250,000). The Tranche B Term Loans are required to be repaid begin-
ning on the date that is four years after the Credit Facility Effective Date,
in twenty-one consecutive quarterly installments (the amount of the first six-
teen installments, $375,000, the next four installments $7,500,000, and the
last installment, $114.0 million).
Interest on all loans accrue, at the Company's option, either at (i) (a) a LI-
BOR rate multiplied by a fraction, the numerator of which is the number one and
the denominator of which is the number one minus the aggregate of the maximum
reserve percentages (including any marginal, special, emergency, or supplemen-
tal reserves) expressed as a decimal established by the Board of Governors of
the Federal Reserve System which the Administrative Agent is subject for
eurocurrency funding, plus (b) the Applicable Rate (as defined below) (Loans
bearing interest described in (i), "Eurodollar Loans") or (ii) (a) the higher
of (1) the Administrative Agent's prime rate and (2) the Federal Funds Effec-
tive Rate (as defined in the Credit Facility) plus 0.5%, plus (b) the Applica-
ble Rate (Loans bearing interest described in (ii), "ABR Loans"). Interest on
any overdue amounts will be at a rate per annum equal to 2% plus the rate oth-
erwise applicable to such amounts. The Applicable Rate means, with respect to
Tranche B Term Loans, 1.75% per annum, in the case of an ABR Loan, and 3.00%
per annum, in the case of a Eurodollar Loan, and, with respect to Tranche A
Term Loans and Revolving Credit Loans, a rate between 0.0% to 1.25% per annum
(depending on the level of the Company's ratio of debt to earnings before in-
come taxes, depreciation, and amortization (EBITDA) in the case of an ABR Loan,
and a rate between 1.00% and 2.25% per annum (depending on the level of the
Company's ratio of debt to EBITDA), in the case of a Eurodollar Loan. The
Credit Facility requires an annual commitment fee of between 0.375% and 0.50%
(depending on the level of the Company's ratio of debt to EBITDA) of the unused
portion of the Facilities payable quarterly in arrears and a separate agent's
fee payable to the Administrative Agent. The Credit Facility also requires the
Company to purchase an interest rate hedging contract covering an amount equal
to at least 60% (as amended in July 1998) of the total amount of the outstand-
ing indebtedness of the Company. The Tranche A Term Loans and funds under the
Revolving Credit Facility are not available to the Company until the Tranche B
Term Loans are fully drawn or become unavailable pursuant to the terms of the
Credit Facility.
The Term Loans are required to be prepaid and commitments under the Revolving
Credit Facility reduced in an aggregate amount equal to (i) 50% of excess cash
flow of each fiscal year commencing the fiscal year ending December 31, 2001,
(ii) 100% of the net proceeds of asset sales, in excess of a yearly threshold,
outside the ordinary course of business or unused insurance proceeds, (iii)
100% of the net cash proceeds in excess of the initial $150.0 million of issu-
ances of debt obligations and (iv) 50% of the net cash proceeds of issuances of
equity securities (other than in connection with the Equity Commitments); pro-
vided, that the prepayments and reductions set forth under clauses (iii) and
(iv) will not be required if, after giving effect to such issuance, (a) the
Company's ratio of senior debt to EBITDA would be less than 5 to 1 and (b) the
Company would be in pro forma compliance with certain covenants in the Credit
Facility.
All obligations of the Company under the Facilities are unconditionally and ir-
revocably guaranteed (the "Bank Facility Guarantees") by Holdings and each ex-
isting and subsequently acquired or organized domestic subsidiary of the Compa-
ny. The Facilities and the Bank Facility Guarantees, and any related hedging
contracts provided by the lenders under the Credit Facility, will be secured by
substantially all of the assets of the Company and each existing and subse-
quently acquired or organized domestic subsidiary of the Company, including a
first priority pledge of all of the capital stock held
F-26
<PAGE>
TRITON PCS, INC. AND PREDECESSOR COMPANY
NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
JUNE 30, 1998
(UNAUDITED)
by the Company or any of its subsidiaries; provided that the pledge of shares
of foreign subsidiaries may be limited to 65% of the outstanding shares of such
foreign subsidiaries. The PCS Licenses will be held by one or more single pur-
pose subsidiaries of the Company and will not be pledged to secure the obliga-
tions of the Company under the Credit Facility. Each single purpose subsidiary
will not be allowed by the Company to incur any liabilities or obligations
other than the Bank Facility Guarantee issued by it, the security agreement en-
tered into by it in connection with the Credit Facility, and, in the case of
any single purpose subsidiary established to hold real estate, liabilities in-
curred in the ordinary course of business of such subsidiary which are incident
to being the lessee of real property of the purchaser, owner of lessee of
equipment and taxes and other liabilities incurred in the ordinary course in
order to maintain its existence.
The Credit Facility contains covenants customary for facilities and transac-
tions similar to the Credit Facility, including covenants relating to the
amounts of indebtedness that the Company may incur, limitations on dividends
and distributions on, and redemptions and repurchases of, capital stock and
other similar payments and various financial maintenance covenants. The Credit
Facility also contains covenants relating to the population covered by the
Company's network and number of customers and customary representations, war-
ranties, indemnities, conditions precedent to borrowing, and events of default.
Loans under the Credit Facility are available to fund capital expenditures re-
lated to the construction of the Company's PCS network, the acquisition of re-
lated businesses, working capital needs of the Company, and customer acquisi-
tion costs. All indebtedness under the Credit Facility will constitute Senior
Debt.
The terms of the Credit Facility originally allowed the Company to incur only
$150 million of indebtedness pursuant to the issuance of Subordinated Debt (as
defined in the Credit Facility). In May 1998, the Company received an amendment
to the Credit Facility, which included provisions that (i) permit the Pending
Acquisition (note 10); (ii) permit up to a total of $450 million in subordi-
nated debt; and (iii) exclude the equity issuances associated with the Pending
Acquisitions from the mandatory prepayment requirement.
As of June 30, 1998, the Company has drawn $75 million of Tranche B Term Loans
under the facility. As of August 25, 1998 the Company had $150 million of Se-
nior Debt outstanding.
(8) SUBORDINATED DEBT
On May 4, 1998, the Company completed an offering (the "Private Offering") of
$511,989,000 of 11% Senior Subordinated Discount Notes ("the Notes"), pursuant
to Rule 144A of the Securities Act of 1933, as amended. The net proceeds of the
Private Offering (after deducting an Initial Purchaser's Discount of $9 million
and fees and expenses of the offering of $1 million) were approximately $290
million. The Company used approximately $127.5 million of the net proceeds of
the Private Offering for the acquisition of the Myrtle Beach System and intends
to use the net proceeds from the Private Offering, together with the Capital
Contributions (note 9) and borrowings under the Credit Facility, to fund: (i)
capital expenditures, including the build-out of its PCS network; (ii) the Nor-
folk Acquisition (note 10); (iii) working capital as required; (iv) operating
losses; (v) general corporate purposes, and (vi) potential acquisitions.
Cash interest will not accrue prior to May 1, 2003. Commencing on November 1,
2003, cash interest will be payable semiannually. Each Note was offered at an
original issue discount (Initial Purchaser's Discount). Although cash interest
will not be paid prior to May 1, 2003, the original issue discount will accrue
from the issue date to May 1, 2003.
The Notes are not redeemable prior to May 1, 2003, except as set forth below.
The Notes may be redeemable at the option of the Company, in whole or in part,
at any time on or after May 1, 2003 and prior to maturity at the following re-
demption prices (expressed as percentages of principal amount), plus accrued
interest, if any, to but excluding the redemption date, if redeemed during the
12-month period beginning on May 1 of the years indicated:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
---- ----------
<S> <C>
2003 105.50%
2004 103.67
2005 101.84
2006 and thereafter 100.00
</TABLE>
F-27
<PAGE>
TRITON PCS, INC. AND PREDECESSOR COMPANY
NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
JUNE 30, 1998
(UNAUDITED)
In addition, on or prior to May 1, 2001, the Company may redeem up to 35% of
the principal amount at maturity of Notes issued under the Indenture at a re-
demption price equal to 111% of the accreted value at the redemption date with
the net proceeds of one or more equity offerings of qualified stock of (a) the
Company, (b) Holdings, or (c) a special purpose corporation formed to own qual-
ified stock of the Company or Holdings, provided that at least 65% of the ag-
gregate principal amount at maturity of Notes issued under the Indenture would
remain outstanding immediately after giving effect to such redemption.
Upon a change in control, each holder of the Notes may require the Company to
repurchase such Holder's Notes, in whole or in part, at a purchase price equal
to 101% of the accreted value thereof or the principal amount at maturity, as
applicable plus accrued and unpaid interest to the purchase date.
(9) CAPITAL CONTRIBUTIONS
On February 4, 1998, pursuant to the Securities Purchase Agreement, Holdings
issued $140,000,000 of equity to certain institutional investors and management
stockholders. The Securities Purchase Agreement requires the institutional in-
vestors and management stockholders to fund their unconditional and irrevocable
obligations in installments in accordance with the following schedule:
<TABLE>
<CAPTION>
------------
DATE DUE AMOUNT
-------- ------------
<S> <C>
Initial closing (funded on February 4, 1998) $ 45,000,000
First anniversary of initial closing 35,000,000
Second anniversary of initial closing 35,000,000
Third anniversary of initial closing 25,000,000
------------
$140,000,000
</TABLE>
Pursuant to the Securities Purchase Agreement, the initial cash contribution
and the unfunded commitments are required to be made to Holdings. Pursuant to
the Closing Agreement, Holdings has directed that all cash contributions subse-
quent to the initial cash contribution be made directly to the Company.
As of June 30, 1998, Holdings received $35 million of additional equity contri-
butions related to the acquisition of the Myrtle Beach System (see note 4).
These funds were concurrently contributed to the Company.
Through May 8, 1998, Holdings received commitments for $55 million in equity
contributions related to the pending acquisition of additional PCS licenses
covering the Norfolk/Virginia Beach, VA region and sections of Georgia and
North Carolina. The Company expects to use the additional equity contributions
for the Norfolk Acquisition and in the build-out of the areas covered by addi-
tional PCS licenses in sections of Georgia and North Carolina. These commit-
ments are contingent on the completion of the pending acquisition.
Common Stock
On October 2, 1997, the Company issued 100 shares of its common stock to Hold-
ings.
L.L.C. Members' Capital
Members' capital contributions are recorded when received. Total committed cap-
ital at October 31, 1997 was $1.00. Cash available for distribution will be
made in proportion to their capital accounts. Allocation of income, gains,
losses, and deductions will be in proportion to their capital accounts.
(10) PENDING ACQUISITION
The Company has signed a purchase agreement to acquire from AT&T PCS, Inc. (the
"Norfolk Acquisition") (i) an FCC license to use 20MHz of authorized frequen-
cies to provide broadband PCS services throughout the entirety of the Norfolk,
Virginia BTA and (ii) certain assets of AT&T PCS used in the operation of the
PCS system in such BTA for an aggregate purchase price of $105 million, includ-
ing $13.5 million of Series D Preferred Stock to be issued to AT&T PCS. The
build-out of the network relating to the Norfolk Acquisition, including the in-
stallation of a switch, has been substantially completed. The Norfolk Acquisi-
tion is subject to closing conditions typical in acquisitions of this nature.
There can be no assurance that the Norfolk Acquisition will be consummated on
the terms described herein or at all.
F-28
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Vanguard Cellular Systems of South Carolina, Inc.:
We have audited the accompanying balance sheets of Vanguard Cellular Systems of
South Carolina, Inc. (a North Carolina corporation and an indirect, wholly-
owned subsidiary of Vanguard Cellular Systems, Inc.) as of December 31, 1997
and 1996, and the related statements of operations, changes in shareholder's
deficit and cash flows for each of the three years in the period ended December
31, 1997. These financial statements referred to below are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing stan-
dards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of mate-
rial misstatement. An audit includes examining, on a test basis, evidence sup-
porting the amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement pre-
sentation. We believe that our audits provide a reasonable basis for our opin-
ion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Vanguard Cellular Systems of
South Carolina, Inc. as of December 31, 1997 and 1996 and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1997, in conformity with generally accepted accounting principles.
Arthur Andersen LLP
Greensboro, North Carolina,
March 20, 1998.
F-29
<PAGE>
VANGUARD CELLULAR SYSTEMS OF SOUTH CAROLINA, INC.
BALANCE SHEETS
(Dollar amounts in thousands, except per share amounts)
<TABLE>
<CAPTION>
-----------------------
DECEMBER 31
1996 1997
-------- --------
<S> <C> <C> <C>
ASSETS
Current Assets:
Cash $ 199 $ 121
Accounts receivable, net of allowances for doubtful
accounts of $200 and $475 1,485 3,199
Cellular telephone inventories 511 526
Prepaid expenses 10 33
Deferred income tax asset -- 8,190
-------- --------
Total current assets 2,205 12,069
-------- --------
Deferred Cellular License Acquisition costs, net of
accumulated amortization of $2,860 and $3,343 16,247 15,764
-------- --------
Property and Equipment, at cost:
Land 306 313
Cellular telephones held for rental 1,653 1,859
Cellular telephone systems 24,068 29,453
Office furniture and equipment 2,323 3,139
-------- --------
28,350 34,764
Less--Accumulated depreciation 5,864 9,252
-------- --------
22,486 25,512
Construction in progress 198 565
-------- --------
22,684 26,077
-------- --------
Other Assets 22 21
-------- --------
Total assets $ 41,158 $ 53,931
======== ========
LIABILITIES AND SHAREHOLDER'S DEFICIT
Current Liabilities:
Accounts payable and accrued expenses $ 315 $ 686
Advances from Vanguard 53,350 63,092
-------- --------
Total current liabilities 53,665 63,778
-------- --------
Deferred Income Tax Liability -- 1,298
-------- --------
Commitments and Contingencies (Note 5)
Shareholder's Deficit:
Common stock--$1 par value, 1,000 shares issued and
outstanding 1 1
Accumulated deficit (12,508) (11,146)
-------- --------
Total shareholder's deficit (12,507) (11,145)
-------- --------
Total liabilities and shareholder's deficit $ 41,158 $ 53,931
======== ========
</TABLE>
The accompanying notes to financial statements are an integral part of these
balance sheets.
F-30
<PAGE>
VANGUARD CELLULAR SYSTEMS OF SOUTH CAROLINA, INC.
STATEMENTS OF OPERATIONS
(Amounts in thousands)
<TABLE>
<CAPTION>
-------------------------
FOR THE YEARS ENDED
DECEMBER 31,
-------------------------
1995 1996 1997
------- ------- -------
<S> <C> <C> <C>
Revenues:
Service fees $16,428 $19,778 $22,508
Cellular telephone equipment revenues 1,077 673 1,100
------- ------- -------
17,505 20,451 23,608
Costs and Expenses:
Cost of service 1,796 3,014 2,811
Cost of cellular telephone equipment 1,853 1,478 2,495
General and administrative 2,260 2,948 4,793
Marketing and selling 2,564 2,731 3,944
Depreciation and amortization 1,765 2,907 5,162
Management fees 1,374 1,620 1,896
Corporate costs allocated from Vanguard 989 1,195 1,586
------- ------- -------
12,601 15,893 22,687
------- ------- -------
Income From Operations 4,904 4,558 921
Interest Expense (4,414) (5,214) (6,451)
Other, net (326) (186) --
------- ------- -------
Income (Loss) Before Income Taxes 164 (842) (5,530)
Income Tax Benefit -- -- 6,892
------- ------- -------
Net Income (Loss) $ 164 $ (842) $ 1,362
======= ======= =======
</TABLE>
The accompanying notes to financial statements are an integral part of these
statements.
F-31
<PAGE>
VANGUARD CELLULAR SYSTEMS OF SOUTH CAROLINA, INC.
STATEMENTS OF CASH FLOWS
(Amounts in thousands)
<TABLE>
<CAPTION>
--------------------------------------------
FOR THE YEARS ENDED DECEMBER 31,
1995 1996 1997
---------- ----------- ----------
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income (loss) $ 164 $ (842) $ 1,362
Adjustments to reconcile net
income (loss) to net cash
provided by (used in) operating
activities:
Depreciation and amortization 1,765 2,907 5,162
Net losses on dispositions of
property and equipment 326 186 --
Deferred income tax benefit -- -- (6,892)
Changes in current items:
Accounts receivable, net (527) 404 (1,714)
Cellular telephone inventories (162) (104) (15)
Accounts payable and accrued
expenses (47) (97) 371
Other, net (20) 13 (23)
---------- ----------- ----------
Net cash provided by (used in)
operating activities 1,499 2,467 (1,749)
---------- ----------- ----------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchases of property and
equipment (8,948) (12,531) (8,072)
---------- ----------- ----------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Net increase in advances from
Vanguard 7,603 10,050 9,742
Other, net (12) -- 1
---------- ----------- ----------
Net cash provided by financing
activities 7,591 10,050 9,743
---------- ----------- ----------
NET INCREASE (DECREASE) IN CASH 142 (14) (78)
CASH, BEGINNING OF YEAR 71 213 199
---------- ----------- ----------
CASH, END OF YEAR $ 213 $ 199 $ 121
========== =========== ==========
SUPPLEMENTAL DISCLOSURE OF CASH
PAID
DURING THE YEAR FOR INTEREST, NET
OF AMOUNTS CAPITALIZED $ 4,414 $ 5,214 $ 6,451
========== =========== ==========
</TABLE>
The accompanying notes to financial statements are an integral part of these
statements.
F-32
<PAGE>
VANGUARD CELLULAR SYSTEMS OF SOUTH CAROLINA, INC.
STATEMENTS OF CHANGES IN SHAREHOLDER'S DEFICIT
(Dollar amounts in thousands)
<TABLE>
<CAPTION>
-----------------------------------
COMMON STOCK ACCUMULATED
SHARES AMOUNT DEFICIT TOTAL
------ ------ ----------- --------
<S> <C> <C> <C> <C>
Balance, January 1, 1995 1,000 $ 1 $(11,830) $(11,829)
Net income -- -- 164 164
----- --- -------- --------
Balance, December 31, 1995 1,000 1 (11,666) (11,665)
Net loss -- -- (842) (842)
----- --- -------- --------
Balance, December 31, 1996 1,000 1 (12,508) (12,507)
Net income -- -- 1,362 1,362
----- --- -------- --------
Balance, December 31, 1997 1,000 1 (11,146) (11,145)
===== === ======== ========
</TABLE>
The accompanying notes to financial statements are an integral part of these
statements.
F-33
<PAGE>
VANGUARD CELLULAR SYSTEMS OF SOUTH CAROLINA, INC.
NOTES TO FINANCIAL STATEMENTS
(Dollar amounts in thousands)
NOTE 1. ORGANIZATION AND BASIS OF PRESENTATION:
Vanguard Cellular Systems of South Carolina, Inc. (the Company), a North Caro-
lina corporation, is a provider of nonwireline cellular telephone service to
the SC-5 (Myrtle Beach) Rural Service Area (RSA). The Company acquired the Myr-
tle Beach RSA license in January 1991 and the cellular system in this market
became operational in the second quarter of 1991. The Company is 100% con-
trolled by Vanguard Cellular Systems, Inc. (Vanguard) and operates under the
trade name of CellularOne(R), which is the trade name many nonwireline carriers
have adopted to provide conformity throughout the industry.
The accompanying financial statements present the financial position, results
of operations and cash flows of the Company as if it were a separate entity for
all periods presented. In accordance with Staff Accounting Bulletin No. 54 of
the Securities and Exchange Commission, Vanguard's investment in the Company is
reflected in the financial statements of the Company ("pushdown accounting").
The accompanying financial statements reflect the allocation of the purchase
price in excess of the net assets acquired on the same basis as in the consoli-
dation with Vanguard.
Substantially all of the Company's assets are pledged under Vanguard's long-
term credit facility. Operating and capital expansion funds have been advanced
between Vanguard and the Company on an interest bearing basis, with the net
amounts of these transfers reflected in advances from Vanguard in the accompa-
nying balance sheets. The debt of Vanguard has not been specifically allocated
to the Company; however, advances from Vanguard approximate the borrowings of
Vanguard that are attributable to the Company. Interest has been charged by
Vanguard to the Company on funds advanced to the Company as an approximation of
the Company's share of Vanguard's consolidated interest cost. Vanguard charges
interest to its subsidiaries based on its consolidated borrowing rates plus 200
basis points. For each of the three years in the period ended December 31,
1997, the average interest rate charged to the Company by Vanguard was approxi-
mately 11%. Total interest charged, net of amounts capitalized, from Vanguard
to the Company was $4,414, $5,214, $6,451 for the years ended December 31,
1995, 1996 and 1997.
The net balance in Advances from Vanguard has been classified as a liability in
the accompanying balance sheets as the Company will repay these advances to
Vanguard upon receipt of the proceeds from the sale of the company's assets to
Triton PCS, Inc. (See Note 7) .
NOTE 2. SIGNIFICANT ACCOUNTING AND REPORTING POLICIES:
Use of Estimates
The preparation of these financial statements and footnote disclosures in ac-
cordance with generally accepted accounting principles requires the use of cer-
tain estimates by management in determining the Company's financial position
and results of operations. Actual results could differ from those estimates.
Revenue Recognition
Service fees are recognized at the time cellular services are provided. Cellu-
lar telephone equipment revenues consist primarily of sales to subscribers,
which are recognized at the time equipment is delivered to the subscriber, and
equipment rentals, which are recognized monthly over the terms of the rental
agreement with the subscriber.
Cellular Telephone Inventories
Inventories, consisting primarily of cellular telephones held for resale, are
valued at the lower of first-in, first-out (FIFO) cost or market.
Deferred Cellular License Acquisition Costs
The Company's investment in deferred cellular license acquisition costs con-
sists of amounts paid for the acquisition of the Federal Communications Commis-
sion construction permit to build and subsequently provide cellular service in
the
F-34
<PAGE>
VANGUARD CELLULAR SYSTEMS OF SOUTH CAROLINA, INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(Dollar amounts in thousands)
Myrtle Beach RSA. The Company amortizes its investment over 40 years. Amortiza-
tion expense of $446, $483, $483 was recorded in 1995, 1996 and 1997.
Property and Equipment
Property and equipment are recorded at cost. Depreciation is calculated on a
straight-line basis for financial reporting purposes over the following esti-
mated useful lives:
------
<TABLE>
<S> <C>
Cellular telephones held for rental............................ 3 years
Cellular telephone systems..................................... 7-20 years
Office furniture and equipment................................. 3-10 years
</TABLE>
At December 31, 1996 and 1997, construction in progress was composed primarily
of the cost of uncompleted additions to the Company's cellular telephone sys-
tems. The Company capitalized interest costs of $106, $125, $43 in 1995, 1996
and 1997, respectively.
Maintenance, repairs and minor renewals are charged to operations as incurred.
Gains or losses at the time of disposition of property and equipment are re-
flected in the statements of operations currently.
Cellular telephones are rented to certain customers generally with a contract
for a minimum length of service. Such customers have the option to purchase the
cellular telephone at any time during the term of the agreement.
Long-Lived Assets
In accordance with Statement of Financial Accounting Standards ("SFAS") No.
121. "Accounting for the Impairment of Long-Lived Assets and for Long-Lived As-
sets to be Disposed Of", the Company reviews for the impairment of long-lived
assets and certain identifiable intangibles, whenever events or changes in cir-
cumstances indicate that the carrying amount of an asset may not be recover-
able. Under SFAS No. 121 an impairment loss would be recognized when estimated
future cash flows expected to result from the use of the asset and its eventual
disposition are less than its carrying amount. No such impairment losses have
been identified by the Company.
Income Taxes
The Company accounts for income taxes in accordance with SFAS No. 109, "Ac-
counting for Income Taxes", which requires the use of the "asset and liability
method" of accounting for income taxes. Accordingly, deferred income tax lia-
bilities and assets are determined based on the differences between the finan-
cial statement and income tax bases of assets and liabilities, using enacted
tax rates in effect for the year in which the differences are expected to re-
verse. The Company is included in the consolidated Federal income tax return of
Vanguard and its subsidiaries. The Company records its share of consolidated
Federal income taxes as if the Company filed a separate return.
NOTE 3. FUTURE CASH FLOW REQUIREMENTS:
The Company's ability to sustain its current and planned operations, maintain
adequate working capital and make required or planned capital expenditures will
depend on its ability to generate sufficient cash flow from operations and ob-
tain additional financing from Vanguard in the form of interest bearing advanc-
es. During 1995, 1996 and 1997, the Company received $7,603, $10,050 and
$9,742, respectively, of these advances. Vanguard has committed to fund the
cash requirements of the Company at least through fiscal 1998 or through the
ultimate date of disposition (Note 7), whichever is earlier. Accordingly, the
accompanying financial statements have been prepared assuming the Company will
continue as a going concern and, as such, adjustments, if any, that may be re-
quired for presentation on another basis have not been considered.
F-35
<PAGE>
VANGUARD CELLULAR SYSTEMS OF SOUTH CAROLINA, INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(DOLLAR AMOUNTS IN THOUSANDS)
NOTE 4. INCOME TAXES:
For Federal income tax reporting purposes, the Company's identified portion of
Vanguard's consolidated net operating loss carryforward was approximately
$20,700 at December 31, 1997. These losses may be used to reduce future taxable
income, if any, and expire through 2012. The primary differences between the
accumulated deficit for financial reporting purposes and the income tax loss
carryforwards relate to differences in the treatment of deferred cellular li-
cense acquisition costs and differences in the depreciation methods and esti-
mated useful lives of property and equipment.
Deferred income taxes are provided for the temporary differences between the
financial reporting and income tax bases of the Company's assets and liabili-
ties. The components of net deferred taxes as of December 31, 1996 and 1997
were as follows:
<TABLE>
<CAPTION>
------------------------------
DECEMBER 31, DECEMBER 31,
1996 1997
------------ ------------
<S> <C> <C> <C>
Deferred income tax assets:
Net operating loss carryforward $ 5,802 $7,936
Other liabilities and reserves 216 254
Valuation allowance (4,776) --
<CAPTION>
------------ ------------
<S> <C> <C> <C>
Total deferred income tax assets 1,242 8,190
<CAPTION>
------------ ------------
<S> <C> <C> <C>
Deferred income tax liabilities:
Unamortized deferred cellular license
acquisition costs 594 705
Property and equipment 648 593
<CAPTION>
------------ ------------
<S> <C> <C> <C>
Total deferred income tax liabilities 1,242 1,298
<CAPTION>
------------ ------------
<S> <C> <C> <C>
Net deferred income taxes $ -- $6,892
<CAPTION>
============ ============
</TABLE>
A valuation allowance of $4,454 as of December 31, 1995 was established because
in the Company's assessment, it was uncertain whether the net deferred income
tax assets would be realized. In addition, because of its continuing assessment
that it was uncertain whether the net deferred income tax assets would be real-
ized, the Company increased the valuation allowance by $322 to offset the 1996
net deferred income tax benefit.
In March 1998, Vanguard entered into an agreement to sell the operational as-
sets of the Company for a cash purchase price of $160,000, subject to adjust-
ment (Note 7). This transaction is expected to generate substantial capital
gains which will utilize an equivalent amount of Vanguard's accumulated net op-
erating loss carryforwards. Based on these anticipated gains, management has
assessed that it is more likely than not that the deferred income tax assets of
Vanguard and its subsidiaries, including the Company, are realizable. Accord-
ingly, for the year ended December 31, 1997, the Company recognized a net de-
ferred income tax benefit of $6,892 upon reversal of the valuation allowance on
its net deferred income tax assets.
A reconciliation between income taxes computed at the statutory Federal rate of
35% and the reported income tax benefit is as follows:
<TABLE>
<CAPTION>
-----------------------------------
FOR THE YEARS ENDED DECEMBER 31,
1995 1996 1997
---------- ---------- ------------
<S> <C> <C> <C>
Amount at statutory Federal rate $ 57 $ (295) $ (l,936)
Change in valuation allowance (63) 322 (4,776)
Other 6 (27) (180)
<CAPTION>
---------- ---------- ------------
<S> <C> <C> <C>
Income tax benefit $ -- $ -- $ (6,892)
<CAPTION>
========== ========== ============
</TABLE>
F-36
<PAGE>
VANGUARD CELLULAR SYSTEMS OF SOUTH CAROLINA, INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(DOLLAR AMOUNTS IN THOUSANDS)
NOTE 5. OPERATING LEASES:
The Company leases office space and land under noncancelable operating leases
expiring through 2004. The future minimum rental payments required under these
lease agreements as of December 31, 1997, were as follows:
<TABLE>
<CAPTION>
-------
<S> <C>
1998 $562
1999 508
2000 508
2001 485
2002 438
Thereafter 4,686
-------
$7,187
=======
</TABLE>
Rent expense under these leases was $349, $439, $573 for the years ended Decem-
ber 31, 1995, 1996 and 1997.
NOTE 6. TRANSACTIONS WITH PARENT AND AFFILIATES:
At December 31, 1997, Vanguard has pledged its investment in the stock of the
Company as well as the assets of the Company as security for debt of Vanguard
totaling $569,000.
Operations Management Agreement
The Company is charged a management fee by Vanguard based upon a percentage of
service fees. The management fee expense under this agreement was $1,374,
$1,620, $1,896 for the years ended December 31, 1995, 1996 and 1997, respec-
tively.
Services Provided by Vanguard
Vanguard performs certain services and incurs certain costs for the Company.
Services provided include treasury, human resources, legal, technical support,
data processing, financial accounting, marketing, and other general corporate
services. The costs of the services provided by Vanguard have been allocated to
the Company based upon the Company's annual subscriber activations and sub-
scriber base as a percentage of Vanguard's total annual subscriber activations
and total subscriber base. Corporate costs of Vanguard totaling $989, $1,195,
$1,586 have been allocated to the Company for the years ended December 31,
1995, 1996 and 1997, respectively. In the opinion of management, the method of
allocating these costs is believed to be reasonable. However, the costs of
these services charged to the Company are not necessarily indicative of the
costs that would have been incurred if the Company had performed these func-
tions.
Other Transactions
During 1997, the Company added certain engineering and managerial functions and
incurred costs for such functions totaling $700 for the year ended December 31,
1997. These services benefited the Company and other Vanguard markets; however,
none of these costs has been allocated to other markets. These costs are in-
cluded in general and administrative expenses in the accompanying statements of
operations.
Employee benefits costs are incurred by Vanguard and are allocated to the Com-
pany based on an overall percentage of salaries expense. Such costs totaled
$267, $322, $557 for the years ended December 31, 1995, 1996 and 1997, respec-
tively, and are included in general and administrative expenses in the accompa-
nying statements of operations. For purposes of these financial statements,
these costs are assumed to be fully funded by the Company and are included in
the Advances from Vanguard in the accompanying balance sheets.
NOTE 7. SUBSEQUENT EVENT:
In March 1998, Vanguard reached an agreement with Triton PCS, Inc. to sell the
assets of the Company, including the cellular license for the Myrtle Beach RSA,
for a cash purchase price of approximately $160,000, subject to adjustment. The
consummation of this transaction is subject to receipt of customary regulatory
approvals.
F-37
<PAGE>
MYRTLE BEACH SYSTEM OF VANGUARD CELLULAR SYSTEMS OF SOUTH CAROLINA, INC.
BALANCE SHEET
(Dollar amounts in thousands, except per share amounts)
<TABLE>
<CAPTION>
-----------
JUNE 30,
1998
-----------
(UNAUDITED)
<S> <C>
ASSETS
Current Assets:
Cash $ 46
Accounts receivable, net of allowances for doubtful accounts of
$461 5,487
Cellular telephone inventories 387
Prepaid expenses 225
Deferred income tax asset 8,671
-------
Total current assets 14,816
-------
Deferred Cellular License Acquisition costs, net of accumulated
amortization of $3,585 15,522
Property and Equipment, at cost:
Land 313
Cellular telephones held for rental 1,710
Cellular telephone systems 30,761
Office furniture and equipment 3,317
-------
36,101
Less--Accumulated depreciation 11,739
-------
24,362
Construction in progress 330
-------
24,692
-------
Other Assets 140
-------
Total assets $55,170
=======
LIABILITIES AND DIVISIONAL EQUITY
Current Liabilities: Accounts payable and accrued expenses $ 2,509
-------
Deferred Income Tax Liability 1,181
-------
Commitments and Contingencies (Note 5)
Divisional Equity-Investments and advances from Vanguard 51,480
-------
Total liabilities and divisional equity $55,170
=======
</TABLE>
The accompanying notes to financial statements are an integral part of this
balance sheet.
F-38
<PAGE>
MYRTLE BEACH SYSTEM OF VANGUARD CELLULAR SYSTEMS SOUTH CAROLINA, INC.
STATEMENT OF OPERATIONS
(Amounts in thousands)
<TABLE>
<CAPTION>
------------------------
SIX MONTHS ENDED
JUNE 30,
------------------------
1997 1998
----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
Revenues:
Service fees $10,602 $13,424
Cellular telephone equipment revenues 457 1,114
<CAPTION>
----------- -----------
<S> <C> <C>
11,059 14,538
Costs and Expenses:
Cost of service 1,185 1,367
Cost of cellular telephone equipment 979 1,388
General and administrative 1,980 2,502
Marketing and selling 1,664 2,215
Depreciation and amortization 2,023 3,080
Management fees 890 1,106
Corporate costs allocated from Vanguard 740 878
<CAPTION>
----------- -----------
<S> <C> <C>
9,461 12,536
<CAPTION>
----------- -----------
<S> <C> <C>
Income From Operations 1,598 2,002
Interest Expense (3,072) (3,560)
Other, net (334) (6)
<CAPTION>
----------- -----------
<S> <C> <C>
Income (Loss) Before Income Taxes (1,808) (1,564)
Income Tax Benefit (Provision) -- 598
<CAPTION>
----------- -----------
<S> <C> <C>
Net Income (Loss) $(1,808) $ (966)
<CAPTION>
=========== ===========
</TABLE>
The accompanying notes to financial statements are an integral part of these
statements.
F-39
<PAGE>
MYRTLE BEACH SYSTEM OF VANGUARD CELLULAR SYSTEMS OF SOUTH CAROLINA, INC.
STATEMENT OF CASH FLOWS
(Amounts in thousands)
<TABLE>
<CAPTION>
------------------------------
SIX MONTHS ENDED JUNE 30,
1997 1998
------------ ------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (1,808) $ (966)
Adjustments to reconcile net loss to net
cash cash used in operating activities:
Depreciation and amortization 2,023 3,080
Deferred income tax benefit -- (598)
Changes in current items:
Accounts receivable, net (1,560) (2,288)
Cellular telephone inventories (260) 139
Accounts payable and accrued expenses 907 1,823
Other, net (44) (192)
------------ ------------
Net cash provided by (used in) operating
activities (742) (998)
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (4,143) (1,453)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in advances from Vanguard 4,945 499
Other, net -- (119)
------------ ------------
Net cash provided by financing
activities 4,945 380
------------ ------------
NET INCREASE (DECREASE) IN CASH 60 (75)
CASH, BEGINNING OF PERIOD 199 121
------------ ------------
CASH, END OF PERIOD $ 259 $ 46
============ ============
SUPPLEMENTAL DISCLOSURE OF CASH PAID
DURING THE PERIOD FOR INTEREST, NET OF
AMOUNTS CAPITALIZED $ 3,072 $ 3,560
============ ============
</TABLE>
The accompanying notes to financial statements are an integral part of these
statements.
F-40
<PAGE>
MYRTLE BEACH SYSTEM OF VANGUARD CELLULAR SYSTEMS OF SOUTH CAROLINA, INC.
NOTES TO FINANCIAL STATEMENTS
(Dollar amounts in thousands)
NOTE 1. ORGANIZATION AND BASIS OF PRESENTATION:
The Myrtle Beach System (the System) of Vanguard Cellular Systems of South Car-
olina, Inc. (the Company), a North Carolina corporation, is a provider of
nonwireline cellular telephone service to the SC-5 (Myrtle Beach) Rural Service
Area (RSA). The Company acquired the Myrtle Beach RSA license in January 1991
and the cellular system in this market became operational in the second quarter
of 1991. The Company is 100% controlled by Vanguard Cellular Systems, Inc.
(Vanguard) and operates the System under the trade name of CellularOne(R),
which is the trade name many nonwireline carriers have adopted to provide con-
formity throughout the industry. Prior to June 1998, the Company's only opera-
tions and net assets were related to the System. During June 1998, Vanguard
transferred certain assets to the Company. Such assets were not acquired by
Triton PCS, Inc. (See Note 7) and are, therefore, not a part of the System in
these financial statements. The accompanying financial statements and footnotes
reflect the historical basis financial position of the System as of June 30,
1998, immediately prior to its sale to Triton, and the results of operations
for the three and six months ended June 30, 1998 and 1997 and the cash flows of
the System for the six months ended June 30, 1997 and 1998.
The accompanying financial statements present the financial position, results
of operations and cash flows of the System as if it were a separate entity for
all periods presented. In accordance with Staff Accounting Bulletin No. 54 of
the Securities and Exchange Commission, Vanguard's investment in the System is
reflected in the financial statements of the Company ("pushdown accounting").
The accompanying financial statements reflect the allocation of the purchase
price in excess of the net assets acquired on the same basis as in the consoli-
dation with Vanguard.
Substantially all of the System's assets were pledged under Vanguard's long-
term credit facility prior to sale of the system to Triton PCS, Inc. Operating
and capital expansion funds have been advanced between Vanguard and the System
on an interest bearing basis, with the net amounts of these transfers reflected
in advances from Vanguard in the accompanying balance sheets. The debt of Van-
guard has not been specifically allocated to the System; however, advances from
Vanguard approximate the borrowings of Vanguard that are attributable to the
System. Interest has been charged by Vanguard to the System on funds advanced
to the System as an approximation of the System's share of Vanguard's consoli-
dated interest cost. Vanguard charges interest to its subsidiaries based on its
consolidated borrowing rates plus 200 basis points. For the six months ended
June 30, 1997 and 1998, the average interest rate charged to the System by Van-
guard was approximately 11%. Total interest charged, net of amounts capital-
ized, from Vanguard to the System was $1,568 (unaudited) and $1,791 (unaudited)
for the three months ended June 30, 1997 and 1998, respectively; and $3,072
(unaudited) and $3,560 (unaudited) for the six months ended June 30, 1997 and
1998, respectively.
NOTE 2. SIGNIFICANT ACCOUNTING AND REPORTING POLICIES:
Use of Estimates
The preparation of these financial statements and footnote disclosures in ac-
cordance with generally accepted accounting principles requires the use of cer-
tain estimates by management in determining the System's financial position and
results of operations. Actual results could differ from those estimates.
Revenue Recognition
Service fees are recognized at the time cellular services are provided. Cellu-
lar telephone equipment revenues consist primarily of sales to subscribers,
which are recognized at the time equipment is delivered to the subscriber, and
equipment rentals, which are recognized monthly over the terms of the rental
agreement with the subscriber.
Cellular Telephone Inventories
Inventories, consisting primarily of cellular telephones held for resale, are
valued at the lower of first-in, first-out (FIFO) cost or market.
Deferred Cellular License Acquisition Costs
The System's investment in deferred cellular license acquisition costs consists
of amounts paid for the acquisition of the Federal Communications Commission
construction permit to build and subsequently provide cellular service in the
F-41
<PAGE>
MYRTLE BEACH SYSTEM OF VANGUARD CELLULAR SYSTEMS OF SOUTH CAROLINA, INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(Dollar amounts in thousands)
Myrtle Beach RSA. The System amortizes its investment over 40 years. Amortiza-
tion expense of $121 (unaudited) and $121 (unaudited) was recorded for three
months ended June 30, 1997 and 1998 respectively; and $242 (unaudited) and $242
(unaudited) for the six months ended June 30, 1997 and 1998, respectively.
Property and Equipment
Property and equipment are recorded at cost. Depreciation is calculated on a
straight-line basis for financial reporting purposes over the following esti-
mated useful lives:
------
<TABLE>
<S> <C>
Cellular telephones held for rental............................ 3 years
Cellular telephone systems..................................... 7-20 years
Office furniture and equipment................................. 3-10 years
</TABLE>
At June 30, 1998, construction in progress was composed primarily of the cost
of uncompleted additions to the System's cellular telephone systems. The System
capitalized interest costs of $14 (unaudited) and $7 (unaudited) in the three-
months ended June 30, 1997 and 1998, respectively, and $21 (unaudited) and $17
(unaudited) for the six months ended June 30, 1997 and 1998, respectively, as
part of the cost of cellular telephone systems.
During the first quarter of 1998, the System revised its estimate of the useful
life of cellular telephones held for rental from 3 years to 18 months to more
closely approximate its historical experience. This change increased deprecia-
tion expense for the three-months ended June 30, 1998 by approximately $400
(unaudited) and $800 (unaudited) for the six months ended June 30, 1998.
Maintenance, repairs and minor renewals are charged to operations as incurred.
Gains or losses at the time of disposition of property and equipment are re-
flected in the statements of operations currently.
Cellular telephones are rented to certain customers generally with a contract
for a minimum length of service. Such customers have the option to purchase the
cellular telephone at any time during the term of the agreement.
Long-Lived Assets
In accordance with Statement of Financial Accounting Standards ("SFAS") No.
121. "Accounting for the Impairment of Long-Lived Assets and for Long-Lived As-
sets to be Disposed Of", management reviews for the impairment of long-lived
assets and certain identifiable intangibles, whenever events or changes in cir-
cumstances indicate that the carrying amount of an asset may not be recover-
able. Under SFAS No. 121 an impairment loss would be recognized when estimated
future cash flows expected to result from the use of the asset and its eventual
disposition are less than its carrying amount. No such impairment losses have
been identified by management.
Income Taxes
The System accounts for income taxes in accordance with SFAS No. 109, "Account-
ing for Income Taxes", which requires the use of the "asset and liability meth-
od" of accounting for income taxes. Accordingly, deferred income tax liabili-
ties and assets are determined based on the differences between the financial
statement and income tax bases of assets and liabilities, using enacted tax
rates in effect for the year in which the differences are expected to reverse.
The System is included in the consolidated Federal income tax return of Van-
guard and its subsidiaries. The System records its share of consolidated Fed-
eral income taxes as if the System filed a separate return.
NOTE 3. FUTURE CASH FLOW REQUIREMENTS:
The System's ability to sustain its current and planned operations, maintain
adequate working capital and make required or planned capital expenditures will
depend on its ability to generate sufficient cash flow from operations and ob-
tain additional financing from Vanguard in the form of interest bearing advanc-
es. During the six months ended June 30, 1997 and 1998, the System received
$4,945 (unaudited) and $499 (unaudited), respectively, of these advances.
F-42
<PAGE>
MYRTLE BEACH SYSTEM OF VANGUARD CELLULAR SYSTEMS OF SOUTH CAROLINA, INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(DOLLAR AMOUNTS IN THOUSANDS)
NOTE 4. INCOME TAXES:
For Federal income tax reporting purposes, the System's identified portion of
Vanguard's consolidated net operating loss carryforward was approximately
$20,700 at December 31, 1997. These losses may be used to reduce future taxable
income, if any, and expire through 2012. The primary differences between the
accumulated deficit for financial reporting purposes and the income tax loss
carryforwards relate to differences in the treatment of deferred cellular li-
cense acquisition costs and differences in the depreciation methods and esti-
mated useful lives of property and equipment.
Deferred income taxes are provided for the temporary differences between the
financial reporting and income tax bases of the System's assets and liabili-
ties. The components of net deferred taxes as of June 30, 1998 were as follows:
<TABLE>
<CAPTION>
-----------
JUNE 30,
1998
-----------
(UNAUDITED)
<S> <C>
Deferred income tax assets:
Net operating loss carryforward $8,424
Other liabilities and reserves 247
--------
Total deferred income tax assets 8,671
Deferred income tax liabilities:
Unamortized deferred cellular license acquisition costs 760
Property and equipment 421
--------
Total deferred income tax liabilities 1,181
--------
Net deferred income taxes $7,490
========
</TABLE>
Based on substantial capital gains expected to be realized during 1998 by Van-
guard, for the year ended December 31, 1997, the System recognized a net de-
ferred income tax benefit of $6,892 upon reversal of the previously provided
valuation allowance on its net deferred income tax assets. For the six months
ended June 30, 1998, the System recognized a net deferred income tax benefit of
$598 (unaudited) related to operating losses generated during the period.
A reconciliation between income taxes computed at the statutory Federal rate of
35% and the reported income tax benefit is as follows:
<TABLE>
<CAPTION>
-------------------------------------------------
FOR THE FOR THE
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1997 1998 1997 1998
----------- ----------- ----------- -----------
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Amount at statutory Federal
rate $(211) $135 $(633) $(548)
Change in valuation allow-
ance 231 -- 692 --
Other (20) 13 (59) (50)
------- ------ ------- -------
Income tax benefit $ -- $148 $ -- $(598)
======= ====== ======= =======
</TABLE>
NOTE 5. OPERATING LEASES:
The System leases office space and land under noncancelable operating leases
expiring through 2004. The future minimum rental payments required under these
lease agreements as of December 31, 1997, were as follows:
<TABLE>
<CAPTION>
-------
<S> <C>
1998 $562
1999 508
2000 508
2001 485
2002 438
Thereafter 4,686
-------
$7,187
=======
</TABLE>
F-43
<PAGE>
MYRTLE BEACH SYSTEM OF VANGUARD CELLULAR SYSTEMS OF SOUTH CAROLINA, INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(DOLLAR AMOUNTS IN THOUSANDS)
Rent expense under these leases was $127 (unaudited) and $170 (unaudited) for
the three-months ended June 30, 1997 and 1998, respectively; and $254 (unau-
dited) and $340 (unaudited) for the six months ended June 30, 1998, respective-
ly.
NOTE 6. TRANSACTIONS WITH PARENT AND AFFILIATES:
At December 31, 1997, Vanguard has pledged its investment in the stock of the
Company as well as the assets of the System as security for debt of Vanguard
totaling $569,000.
Operations Management Agreement
The System is charged a management fee by Vanguard based upon a percentage of
service fees. The management fee expense under this agreement was $612 (unau-
dited) and $648 (unaudited) for the three months ended June 30, 1997 and 1998,
respectively; and $890 (unaudited) and $1,106 (unaudited) for the six months
ended June 30, 1997 and 1998, respectively.
Services Provided by Vanguard
Vanguard performs certain services and incurs certain costs for the System.
Services provided include treasury, human resources, legal, technical support,
data processing, financial accounting, marketing, and other general corporate
services. The costs of the services provided by Vanguard have been allocated to
the System based upon the System's annual subscriber activations and subscriber
base as a percentage of Vanguard's total annual subscriber activations and to-
tal subscriber base. Corporate costs of Vanguard totaling $422 (unaudited) and
$438 (unaudited) have been allocated to the System for the three-months ended
June 30, 1997 and 1998, respectively; and $740 (unaudited) and $878 (unaudited)
have been allocated to the System for the six-months ended June 30, 1997 and
1998, respectively. In the opinion of management, the method of allocating
these costs is believed to be reasonable. However, the costs of these services
charged to the System are not necessarily indicative of the costs that would
have been incurred if the System had performed these functions.
Other Transactions
During 1997, the System added certain engineering and managerial functions and
incurred costs for such functions totaling $45 (unaudited) and $96 (unaudited)
for the three months and six months ended June 30, 1997, respectively. These
services benefited the System and other Vanguard markets; however, none of
these costs has been allocated to other markets. For the three and six months
ended June 30, 1998, such costs totaled approximately $0 (unaudited) and $55
(unaudited), respectively. These costs are included in general and administra-
tive expenses in the accompanying statement of operations.
Employee benefits costs are incurred by Vanguard and are allocated to the Sys-
tem based on an overall percentage of salaries expense. Such costs totaled $131
(unaudited) and $115 (unaudited) for the three months ended June 30, 1997 and
1998, respectively, and $240 (unaudited) and $249 (unaudited) for the six
months ended June 30, 1997 and 1998, respectively, and are included in general
and administrative expenses in the accompanying statements of operations. For
purposes of these financial statements, these costs are assumed to be fully
funded by the System.
NOTE 7. SALE OF SYSTEM ASSETS:
Effective at the close of the business on June 30, 1998, the Company sold sub-
stantially all of the assets of the System to Triton PCS, Inc. for a purchase
price of approximately $162.5 million.
F-44
<PAGE>
Unaudited pro forma financial statements
The following pro forma data is filed herewith: Unaudited condensed combined
pro forma balance sheet as of June 30, 1998 and unaudited condensed combined
pro forma statements of operations for the year ended December 31, 1997 and six
months ended June 30, 1998.
The unaudited condensed combined pro forma balance sheet reflects the Norfolk
Acquisition as of June 30, 1998. The unaudited condensed combined pro forma
statements of operations reflect the acquisition of the Myrtle Beach System as
if such acquisition occurred on January 1, 1997. Since the pro forma financial
statements which follow are based upon the financial condition and operating
results of the Myrtle Beach System during periods when they were not under the
control or management of Triton PCS, Inc., the information presented may not be
indicative of the results which would have actually been obtained had the
acquisition been completed as of January 1, 1997, nor are they indicative of
future financial or operating results. The unaudited pro forma financial
information does not give effect to any synergies that may occur due to the
integration of Triton PCS, Inc. and the Myrtle Beach System. The condensed
combined pro forma financial statements should be read in conjunction with the
historical audited financial statements of Triton PCS, Inc. and the notes
thereto, as well as the audited historical consolidated financial statements of
Vanguard Cellular Systems of South Carolina, Inc. and the notes thereto
included elsewhere herein. The acquisition has been accounted for by the
purchase method.
F-45
<PAGE>
TRITON PCS, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
AS OF JUNE 30, 1998
UNAUDITED
($ 000'S)
<TABLE>
<CAPTION>
----------------------------------------
PRO FORMA
TRITON PCS, INC. ADJUSTMENTS COMBINED
---------------- ----------- ---------
<S> <C> <C> <C>
ASSETS:
Current assets:
Cash and cash equivalents $261,509 $(76,000) $185,509
Due from related party 65 -- 65
Accounts receivable, net of
allowances 5,487 -- 5,487
Cellular telephone inventories and
prepaids 928 -- 928
Total current assets 267,989 (76,000) 191,989
-------- -------- --------
Property, plant, and equipment:
Land 313 -- 313
Cellular telephone systems 21,826 53,500 75,326
Office furniture and equipment 3,680 370 4,050
Construction in progress 9,212 -- 9,212
-------- -------- --------
35,031 53,870 88,901
Less accumulated depreciation (108) (108)
-------- -------- --------
Net property, plant and equipment 34,923 53,870 87,793
Intangible assets and deferred
cellular license acquisition costs 263,165 52,130 315,295
Other assets 368 -- 368
-------- -------- --------
Total assets $566,445 $ 30,000 $596,445
======== ======== ========
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities:
Accounts payable and accrued
expenses $ 6,611 $ -- $ 6,611
Accrued interest 3,642 3,642
-------- --------
Total current liabilities 10,253 -- 10,253
Long-term debt 371,692 371,692
Deferred income taxes 13,237 13,237
Shareholder's Equity
Common stock, $.01 par value, 1,000
shares authorized, 100 shares
issued and outstanding -- --
Additional paid-in capital 181,821 30,000 211,821
Accumulated deficit (10,558) (10,558)
-------- -------- --------
Total shareholder's equity 171,263 30,000 201,263
-------- -------- --------
Total liabilities and shareholder's
equity $566,445 $ 30,000 $596,445
======== ======== ========
</TABLE>
F-46
<PAGE>
TRITON PCS, INC.,
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
($ 000'S)
<TABLE>
<CAPTION>
---------------------------------------------------------
MYRTLE PRO FORMA PRO FORMA
TRITON PCS, INC. BEACH SYSTEM ADJUSTMENTS COMBINED
---------------- ------------ ----------- ---------
<S> <C> <C> <C> <C>
Revenues: $ -- $ 23,608 $ -- $ 23,608
Costs and Expenses:
Costs of services -- 5,306 -- 5,306
Operations and
development 873 -- -- 873
Marketing and
selling -- 3,944 -- 3,944
General and
administrative 1,863 8,275 -- 10,138
Depreciation and
amortization 5 5,162 4,771 (a) 9,938
---------- --------- --------- --------
Total Costs and
Expenses 2,741 22,687 4,771 30,199
---------- --------- --------- --------
Income (loss) from
operations (2,741) 921 (4,771) (6,591)
Interest expense,
net 1,220 6,451 33,074 (b) 40,745
---------- --------- --------- --------
Loss before taxes (3,961) (5,530) (37,845) (47,336)
Tax benefit -- 6,892 (6,892)(c) --
---------- --------- --------- --------
Net income (loss) $ (3,961) $ 1,362 $ (44,737) $(47,336)
========== ========= ========= ========
</TABLE>
F-47
<PAGE>
TRITON PCS, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998
<TABLE>
<CAPTION>
---------------------------------------------------------
MYRTLE BEACH PRO FORMA PRO FORMA
TRITON PCS, INC. SYSTEM ADJUSTMENTS COMBINED
---------------- ------------ ----------- ---------
<S> <C> <C> <C> <C>
Revenues: $ -- $ 14,538 $ -- $ 14,538
Costs and Expenses:
Costs of services -- 2,755 -- 2,755
Operations and
development 1,444 -- -- 1,444
Marketing and selling -- 2,215 -- 2,215
General and
administrative 3,737 4,486 -- 8,223
Depreciation and
amortization 1,086 3,080 1,889 (d) 6,055
----------- --------- -------- --------
Total Costs and Expenses 6,267 12,536 1,889 20,692
----------- --------- -------- --------
Income (loss) from
operations (6,267) 2,002 (1,889) (6,154)
Interest expense, net 7,133 3,566 8,361 (e) 19,060
----------- --------- -------- --------
Loss before taxes (13,400) (1,564) (10,250) (25,214)
Tax benefit 6,803 598 3,297 (f) 10,698
----------- --------- -------- --------
Net income (loss) $ (6,597) $ (966) $ (6,953) $(14,516)
=========== ========= ======== ========
</TABLE>
F-48
<PAGE>
TRITON PCS, INC.,
NOTES TO PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
1.Basis of Presentation
The accompanying unaudited pro forma condensed combined balance sheet gives
effect to the Norfolk Acquisition as if it had occurred on June 30, 1998.
The unaudited pro forma condensed combined statement of operations for the
six months ended June 30, 1998 and the year ended December 31, 1997 give
effect to the Myrtle Beach Acquisition as if it had occurred on January 1,
1997.
The effects of the acquisitions have been presented using the purchase
method and accordingly, the purchase price was allocated to the assets ac-
quired and liabilities assumed based upon management's best preliminary es-
timate of their fair value. The preliminary allocation of the purchase
price will be subject to further adjustments as Triton PCS, Inc. ("Triton")
finalizes its allocation of its purchase price in accordance with generally
accepted accounting principles. The pro forma adjustments related to the
purchase price allocation of the acquisition represent management's best
estimate of the effects of the acquisition.
2. The pro forma balance sheet adjustment consists of entries to record the
purchase of fixed assets related to the Norfolk Acquisition for
approximately $105.0 million, including $30 million of equity
contributions. All Norfolk fixed assets were valued at their net book value
at the date of acquisition, which was deemed to approximate fair market
value. The remaining unallocated purchase price was recorded to intangible
assets with an estimated useful life of 40 years.
3. The pro forma statement of operations adjustments for the year ended
December 31, 1997 consist of:
(a) Pro forma "Depreciation and Amortization Expense" has been adjusted to
reflect the amortization of the intangibles recorded in the purchase of
Myrtle Beach and the adjusted depreciation expense related to the fixed
assets purchased over an estimated useful life of 8 years.
(b) Pro forma interest expense includes (i) interest on the Subordinated Debt
at a rate of 11% per year and (ii) interest on the $75 million of initial
borrowings under the Credit Agreement at a rate of 8.7%, after giving ef-
fect to the Myrtle Beach System's historical interest expense. The impact
of a 1/8% change in the interest rate on the Credit Facility would in-
crease the pro forma net loss by $0.1 million.
(c) Pro forma tax provision has been calculated as if the transaction had
been consummated on January 1, 1997. The Myrtle Beach tax benefit is di-
rectly related to the acquisition by Triton, and, as such, is eliminated
for pro forma presentation.
4. The pro forma statement of operations adjustments for the six months ended
June 30, 1998 consist of:
(d) Pro forma "Depreciation and Amortization Expense" has been adjusted to
reflect the amortization of the intangibles recorded in the purchase of
Myrtle Beach and the adjusted depreciation expense related to the fixed
assets purchased over an estimated useful life of 8 years.
(e) Pro forma interest expense includes (i) interest on the Subordinated Debt
at a rate of 11% per year and (ii) interest on the $75 million of initial
borrowings under the Credit Agreement at a rate of 8.5%. The impact of a
1/8% change in the interest rate on the Credit Facility would increase
the pro forma net loss by $0.04 million.
(f) Pro forma tax provision has been calculated as if the transaction had
been consummated on January 1, 1997. The Myrtle Beach tax benefit is di-
rectly related to the acquisition by Triton, and, as such, is eliminated
for pro forma presentation.
F-49
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13 (S-1). OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses in connection with the Registration Statement are as
follows:
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee................ $ 88,500
Printing and Engraving Expenses.................................... 65,000
Legal Fees and Expenses............................................ 70,000
Accounting fees and Expenses....................................... 25,000
Fees of Trustee (including counsel fees)........................... 10,000
Miscellaneous...................................................... 11,500
--------
$270,000
========
</TABLE>
ITEM 14 (S-1) AND ITEM 20 (S-4). INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Delaware General Corporation Law authorizes corporations to limit or
eliminate the personal liability of directors to corporations and their
stockholders for monetary damages for breach of directors' fiduciary duty of
care. The duty of care requires that, when acting on behalf of the
corporation, directors must exercise an informed business judgment based on
all material information reasonably available to them. In the absence of the
limitations authorized by the Delaware statute, directors could be accountable
to corporations and their stockholders for monetary damages for conduct that
does not satisfy their duty of care. Although the statute does not change
directors' duty of care, it enables corporations to limit available relief to
equitable remedies such as injunction or rescission. The Restated Certificate
of Incorporation limits the liability of Holdings' directors to Holdings or
its stockholders to the fullest extent permitted by the Delaware statute.
Specifically, the directors of Holdings will not be personably liable for
monetary damages for breach of a director's fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of loyalty to
Holdings or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii)
under Section 174 of the Delaware General Corporation Law (which relates to
the unlawful payment of dividend or unlawful stock purchase or redemption by a
corporation) or (iv) for any transaction from which a director derived an
improper personal benefit. The inclusion of this provision in the Restated
Certificate of Incorporation may have the effect of reducing the likelihood of
derivative litigation against directors and may discourage or deter
stockholders or management from bringing a lawsuit against directors for
breach of their duty of care, even though such an action, if successful, might
otherwise have benefited Holdings and its stockholders. In addition, pursuant
to the terms of the Kalogris and the Skinner Employment Agreements, the
Company will purchase director's and officer's liability insurance coverage
for such executives in amounts customary for similarly situated companies.
ITEM 16. (S-1) AND ITEM 21. (S-4). EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
-------
<S> <C>
3.1 Certificate of Incorporation of Triton PCS, Inc.**
3.2 By-laws of Triton PCS, Inc.**
4.1 Indenture, dated as of May 4, 1998, between Triton PCS, Inc., the
Guarantors party thereto and PNC Bank, National Association.*
4.2 Form of 11% Senior Subordinated Discount Notes (the "Private Notes")
(included in Exhibit 4.1).*
4.3 Form of 11% Senior Subordinated Discount Notes (the "Exchange Notes")
(included in Exhibit 4.1).*
</TABLE>
II-1
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
-------
<S> <C>
4.4 Registration Rights Agreement, dated as of May 4, 1998, by and among
Triton PCS, Inc., the subsidiaries of Triton PCS, Inc. listed on the
signature pages thereto, and J.P. Morgan Securities Inc., Chase
Securities Inc. and Lehman Brothers Inc.*
5.1 Opinion of Latham & Watkins regarding the validity of the Exchange
Notes.+
10.1 Credit Agreement, dated as of February 3, 1998, among Triton PCS,
Inc., Triton PCS Holdings, Inc., the Lenders (as defined therein)
party thereto, and The Chase Manhattan Bank, as administrative agent.*
10.2 First Amendment, Consent and Waiver, dated as of April 16, 1998, among
Triton PCS, Inc., Triton PCS Holdings, Inc., the several banks and
other financial institutions and entities from time to time parties
thereto, and The Chase Manhattan Bank, as administrative agent.*
10.2.1 Second Amendment, dated as of July 29, 1998, among Triton PCS, Inc.,
Triton PCS Holdings, Inc., the several banks and other financial
institutions and entities from time to time parties thereto, and The
Chase Manhattan Bank, as administrative agent.**
10.3 Securities Purchase Agreement, dated as of October 8, 1997, among AT&T
Wireless PCS, Inc., the cash equity investors listed on the signature
pages thereto, the management stockholders listed on the signature
pages thereto and Triton PCS, Inc.**
10.4 Amendment No. 1 to Securities Purchase Agreement and Consent
Agreement, dated as of March 10, 1998, by and among AT&T Wireless PCS,
Inc., the cash equity investors listed on the signature pages thereto,
the management stockholders listed on the signature pages thereto, and
Triton PCS Holdings, Inc. (f\k\a Triton PCS, Inc.).*
10.5 Closing Agreement, dated as of February 4, 1998, among AT&T Wireless
PCS, Inc., Triton PCS Holdings, Inc., CB Capital Investors, L.P., J.P.
Morgan Investment Corporation, Sixty Wall Street SBIC Fund, L.P.,
Private Equity Investors III, L.P., Equity-Linked Investors-II,
Toronto Dominion Capital (USA), Inc., First Union Capital Partners,
Inc., DAG-Triton PCS, Inc., Michael E. Kalogris and Steven R.
Skinner.*
10.6 Asset Purchase Agreement, dated as of March 10, 1998, between Triton
PCS, Inc. and Vanguard Cellular Systems of South Carolina, Inc.*
10.7 Preferred Stock Purchase Agreement by and among Cash Equity Investors,
Management Stockholders, Independent Directors, and Triton PCS
Holdings, Inc. dated as of June 29, 1998.**
10.8 AT&T Wireless Services Network Membership License Agreement, dated as
of February 4, 1998, between AT&T Corp. and Triton PCS Operating
Company L.L.C.*
10.9 Stockholders Agreement, dated as of February 4, 1998, among AT&T
Wireless PCS, Inc., Triton PCS Holdings, Inc., CB Capital Investors,
L.P., J.P. Morgan Investment Corporation, Sixty Wall Street SBIC Fund,
L.P., Private Equity Investors III, L.P., Equity-linked Investors-II,
Toronto Dominion Capital (USA), Inc., First Union Capital Partners,
Inc., DAG-Triton PCS, L.P., Michael E. Kalogris, Steven R. Skinner,
David D. Clark, Clyde Smith, Patricia Gallagher and David Standig.*
10.10 Investors Stockholders' Agreement, dated as of February 4, 1998, among
CB Capital Investors, L.P., J.P. Morgan Investment Corporation, Sixty
Wall Street SBIC Fund, L.P., Private Equity Investors III, L.P.,
Equity-Linked Investors-II, Toronto Dominion Capital (USA), Inc., DAG-
Triton PCS, L.P., First Union Capital Partners, Inc., and the
stockholders named therein.*
10.11 Intercarrier Roamer Service Agreement, dated as of February 4, 1998,
between AT&T Wireless Services, Inc. and Triton PCS Operating Company
L.L.C.*
10.12 Master Services Agreement, dated as of January 19, 1998, between
Triton PCS Operating Company, L.L.C., and Wireless Facilities Inc.+
10.13 Site Acquisition, Zoning and A & E Supervision Agreement, dated as of
December 15, 1997, between Triton PCS, Inc. and Gearon & Co., Inc.**
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
-------
<C> <S>
10.14 Site Development Services Agreement, dated as of December 10, 1997,
between Triton PCS, Inc. and Entel Technologies, Inc.**
10.15 Ericsson Acquisition Agreement, dated as of March 11, 1998, between
Triton Equipment Company L.L.C. and Ericsson, Inc.+
10.16 Employment Agreement, dated as of February 4, 1998, among Triton
Management Company, Inc., Triton PCS Holdings, Inc. and Michael E.
Kalogris.*
10.16.1 Amendment No. 1 to Employment Agreement dated as of June 29, 1998
among Triton Management Company, Inc., Triton PCS Holdings, Inc., and
Michael E. Kalogris.**
10.17 Employment Agreement, dated as of January 8, 1998, between Triton
Management Company and Clyde Smith.*
10.18 Employment Agreement, dated as of February 4, 1998, between Triton
Management Company and Steven R. Skinner.*
10.18.1 Amendment No. 1 to Employment Agreement dated as of June 29, 1998
among Triton Management Company, Inc., Triton PCS Holdings, Inc., and
Steven R. Skinner.**
10.19 Amended and Restated Common Stock Trust Agreement for Management
Employees and Independent Directors dated as of June 26, 1998.**
10.20 Form of Pledge Agreement, dated as of February 4, 1998, between
certain shareholders and Triton PCS, Inc. Each of (a) Michael E.
Kalogris, (b) Steven R. Skinner, (c) Sixty Wall Street SBIC Fund,
L.P., (d) CB Capital Investors, L.P., (e) J.P. Morgan Investment
Corporation, (f) DAG-Triton PCS, L.P., (g) First Union Capital
Partners, Inc., (h) Toronto Dominion Capital (USA), Inc. and (i)
Private Equity Investors III, L.P., are party to separate Pledge
Agreements. The terms of each Pledge Agreement are identical other
than (1) the shareholder party thereto and (2) the number of shares of
stock held by such shareholder and, therefore, the number of shares
subject to the applicable Pledge Agreement.+
10.21 Master Tower Site Lease Agreement, dated as of February 13, 1998,
between Triton PCS Property Company L.L.C. and SCANA Communications,
Inc.**
10.22 Master License Agreement, dated as of March 15, 1998, between Triton
PCS Property Company L.L.C. and BellSouth Communications, Inc.**
10.23 Master Tower Site Lease Agreement, dated as of May 28, 1998, between
Triton PCS Property Company L.L.C. and AT&T Corp.**
10.24 Independent Director Stock Award Plan adopted as of February 4,
1998.**
10.25 Letter Agreement, dated as of June 26, 1998 between Triton PCS
Holdings, Inc. and Scott Anderson.**
10.26 Amendment No. 1 to Letter Agreement dated as of June 29, 1998 between
Triton Management Company, Inc. and Scott Anderson.**
10.27 Letter Agreement, dated as of June 26, 1998 between Triton PCS
Holdings, Inc. and John Beletic.**
10.28 Amendment No. 1 to Letter Agreement dated as of June 29, 1998 between
Triton Management Company, Inc. and John Beletic.**
10.29 Asset Purchase Agreement dated as of August 20, 1998 between Triton
PCS Holdings, Inc. and AT&T Wireless PCS, Inc.**
10.30 Construction and Operating Agreement dated as of July 31, 1998 by and
between Triton PCS Operating Company L.L.C. and AT&T Wireless PCS,
Inc.**
10.31 Letter Agreement, dated as of February 1998, between Clyde Smith and
Triton Management Company, Inc.*
10.31.1 Amendment No. 1 to Letter Agreement dated as of June 29, 1998 between
Triton Management Company, Inc. and Clyde Smith.**
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
-------
<C> <S>
10.32 Letter Agreement, dated as of February 1998, between David A. Clark
and Triton Management Company, Inc.*
10.32.1 Amendment No. 1 to Letter Agreement dated as of June 29, 1998 between
Triton Management Company, Inc. and David D. Clark.**
10.33 Letter Agreement, dated as of February 1998, between David Standig and
Triton Management Company, Inc.*
10.33.1 Amendment No. 1 to Letter Agreement dated as of June 29, 1998 between
Triton Management Company, Inc. and David Standig.**
10.34 Letter Agreement, dated as of February 1998, between Michael Mears and
Triton Management Company, Inc.*
10.34.1 Amendment No. 1 to Letter Agreement dated as of June 29, 1998 between
Triton Management Company, Inc. and Michael Mears.**
10.35 Letter Agreement, dated as of February 1998, between Patricia
Gallagher and Triton Management Company, Inc.*
10.35.1 Amendment No. 1 to Letter Agreement dated as of June 29, 1998 between
Triton Management Company, Inc. and Patricia Gallagher.**
10.36 Shared Communications Facilities Master Agreement, dated as of June 3,
1998, between Triton PCS Property Company L.L.C. and The Commonwealth
of Virginia Department of Transportation.**
10.37 Multiple Site Tower Attachment Lease Agreement, dated as of June 1,
1998, between Triton PCS Property Company L.L.C. and 360
Communications Company.**
10.38 Master Tower License Agreement, dated as of June 12, 1998, between
Triton PCS Property Company L.L.C. and Appalachian Power Company.**
10.39 Master Site Agreement, dated as of April 17, 1998, between Triton PCS
Property Company L.L.C. and Nextel Communications, Inc.**
10.40 Lease Agreement, dated as of April 9, 1998, between Triton PCS
Property Company L.L.C. and Virginia Electric and Power Company.**
12.1 Statement of Computation of Deficiency of Earnings to Fixed Charges.**
21.1 Subsidiaries of Triton PCS, Inc.*
23.1 Consent of Latham & Watkins (included in their opinion filed as
Exhibit 5.1).+
23.2 Consent of KPMG Peat Marwick LLP.**
23.3 Consent of Arthur Andersen LLP.**
25.1 Statement of Eligibility and Qualification (Form T-1) under the Trust
Indenture Act of 1939 of PNC Bank, National Association.**
27.1 Financial Data Schedule.**
99.1 Form of Letter of Transmittal and related documents to be used in
conjunction with the Exchange Offer.**
</TABLE>
- --------
* Filed with the original June 25, 1998 Registration Statement.
** Filed with this Amendment No. 1.
+ To be filed with Amendment No. 2.
II-4
<PAGE>
SCHEDULES OMITTED
Schedules not listed above are omitted because of the absence of the
conditions under which they are required or because the information required
by such omitted schedules is set forth in the financial statements or the
notes thereto.
ITEM 17 (S-1) AND ITEM 22 (S-4). UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to the registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned Registrant hereby undertakes that insofar as indemnification
for liabilities arising under the Securities Act of 1933 may be permitted to
directors, officers and controlling persons of the Registrant pursuant to the
foregoing provisions described under Item 20 above, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim of indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit paid by a director, officer or controlling person of the Registrant in
the successful defense of any action, suit or proceeding) is asserted against
the Registrant by such director, officer or controlling person in connection
with the securities being registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes to respond to requests for
information that is incorporated by reference into this Prospectus pursuant to
Items 4, 10(b), 11, or 13 of Form S-4, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This undertaking also includes documents filed
subsequent to the effective date of the Registration Statement through the
date of responding to the request.
The undersigned Registrant hereby undertakes to supply by means of a post-
effective amendment all information concerning a transaction, and the company
being acquired involved therein, that was not the subject of and included in
the Registration Statement when it became effective.
II-5
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THE
REGISTRANT HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS
BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF MALVERN,
STATE OF PENNSYLVANIA ON SEPTEMBER 3, 1998.
Triton PCS, Inc.
/s/ Michael Kalogris
By: ______________________________________
Sole Director and Chief Executive
Officer
Triton Management Company, Inc.
/s/ Michael Kalogris
By: _________________________________
Sole Director and Chief Executive
Officer
Triton PCS Holdings Company L.L.C.
By: Triton Management Company, Inc., its
manager
/s/ Michael Kalogris
By: _________________________________
Sole Director and Chief Executive
Officer
Triton PCS Property Company L.L.C., Inc.
By: Triton Management Company, Inc., its
manager
/s/ Michael Kalogris
By: _________________________________
Sole Director and Chief Executive
Officer
Triton PCS Equipment Company L.L.C.
By: Triton Management Company, Inc., its
manager
/s/ Michael Kalogris
By: _________________________________
Sole Director and Chief Executive
Officer
Triton PCS Operating Company L.L.C.
By: Triton Management Company, Inc., its
manager
/s/ Michael Kalogris
By: _________________________________
Sole Director and Chief Executive
Officer
Triton PCS License Company L.L.C.
By: Triton Management Company, Inc., its
manager
/s/ Michael Kalogris
By: _________________________________
Sole Director and Chief Executive
Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND AS OF THE DATES INDICATED.
SIGNATURE TITLE DATE
/s/ Michael Kalogris
- --------------------------------- Sole Director and Chief September 3,
MICHAEL KALOGRIS Executive Officer of 1998
Triton PCS, Inc. and
Triton Management
Company, Inc.
(Principal Executive
Officer)
/s/ David Clark
- --------------------------------- Senior Vice President, September 3,
DAVID CLARK Chief Financial Officer 1998
and Secretary of Triton
PCS, Inc. and Triton
Management Company,
Inc. (Principal
Financial and
Accounting Officer)
II-6
<PAGE>
EXHIBIT 3.1
CERTIFICATE OF INCORPORATION
OF
TRITON PCS LICENSE COMPANY, INC.
ARTICLE I
The name of the Corporation shall be Triton PCS License Company, Inc.
ARTICLE II
The address of the Corporation's registered office in the State of
Delaware is Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle
County, Delaware 19801. The name of its registered agent at such address is The
Corporation Trust Company.
ARTICLE III
The purpose of the Corporation is to engage in, carry on and conduct
any lawful act or activity for which corporations may be organized under the
General Corporation Law of the State of Delaware (the "GCL").
---
ARTICLE IV
The total number of shares of stock that the Corporation shall have
authority to issue is 1,000 shares of common stock, par value $0.01 per share.
ARTICLE V
The incorporator of the Corporation is Ralph J. Mauro and his mailing
address is c/o Kleinbard, Bell & Brecker, 1900 Market Street, Suite 700,
Philadelphia, PA 19103.
ARTICLE VI
Election of Directors need not be by written ballot.
ARTICLE VII
7.1 Indemnification. Any person who was or is a party or is
---------------
threatened to be made a party to any threatened, pending, or completed action,
suit, or proceeding (a "Proceeding"), whether civil, criminal, administrative,
----------
or investigative (whether or not by or in the right of the Corporation), by
reason of the fact that such person, or a person of whom such person is the
legal
<PAGE>
representative, is or was a director, officer, incorporator, employee, or
agent of the Corporation, or is or was incorporator, employee, partner, trustee,
or agent of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise (an "Other Entity"), shall be entitled to be
------------
indemnified by the Corporation to the full extent then permitted by law against
expenses (including counsel fees and disbursements), judgments, fines (including
excise taxes assessed on a person with respect to an employee benefit plan), and
amounts paid in settlement incurred by him in connection with such Proceeding.
Persons who are not Directors or officers of the Corporation may be similarly
indemnified in respect of service to the Corporation or to an Other Entity at
the request of the Corporation or to an Other Entity at the request of the
Corporation to the extent the Board of Directors at any time specifies that such
persons are entitled to the benefits of this Article VII.
7.2 Advancement of Expenses. The Corporation shall, from time to
-----------------------
time, reimburse or advance to any Director or officer or other person entitled
to indemnification hereunder the funds necessary for payment of expenses,
including attorneys' fees and disbursements, incurred in connection with any
Proceeding, in advance of the final disposition of such Proceeding; provided,
--------
however, that, if (and only if) required by the GCL, such expenses incurred by
- -------
or on behalf of any Director or officer or other person may be paid in advance
of the final disposition of a Proceeding only upon receipt by the Corporation of
an undertaking, by or on behalf of such Director or officer (or other person
indemnified hereunder), to repay any such amount so advanced if it shall
ultimately be determined by final judicial decision from which there is no
further right of appeal that such Director, officer or other person is not
entitled to be indemnified for such expenses.
7.3 Rights Not Exclusive. The rights to indemnification and
--------------------
reimbursement or advancement of expenses provided by, or granted pursuant to,
this Article VII shall not be deemed exclusive of any other rights to which a
person seeking indemnification or reimbursement or advancement of expenses may
have or hereafter be entitled under any statute, this Certificate of
Incorporation, the Bylaws, any agreement, any vote of stockholders or
disinterested Directors or otherwise, both as to action in his or her official
capacity and as to action in another capacity while holding such office.
7.4 Continuing Rights. The rights to indemnification and
------------------
reimbursement or advancement of expenses provided by, or granted pursuant to,
this Article VII shall continue as to a person who has ceased to be a Director
or officer (or other person indemnified hereunder), shall inure to the benefit
of the executors, administrators, legatees and distributees of such person, and
in either case, shall inure whether or not the claim asserted is based on
matters which antedate the adoption of this Article VII.
7.5 Insurance. The Corporation shall have power to purchase and
---------
maintain insurance on behalf of any person who is or was a Director, officer,
employee or agent of the Corporation, or is or was serving at the request of the
Corporation, as a director, officer, employee or agent of an Other Entity,
against any liability asserted against such person and incurred by such person's
status as such, whether or not the Corporation would have the power to indemnify
such person against such liability under the provisions of this Article VII, the
Bylaws or under Section 145 of the GCL or any other provision of law.
2
<PAGE>
7.6 Contract Rights; No Repeal. The provisions of this Article VII
--------------------------
shall be a contract between the Corporation, on the one hand, and each Director
and officer who services in such capacity at any time while this Article VII is
in effect and any other person indemnified hereunder, on the other hand,
pursuant to which the Corporation and each such Director, officer, or other
person intend to be legally bound. No repeal or modification of this Article
VII shall affect any rights or obligations with respect to any state of facts
then or, heretofore or thereafter brought or threatened based in whole or in
part upon any such state of facts.
7.7 Enforceability; Burden of Proof. The rights to indemnification
-------------------------------
and reimbursement or advancement of expenses provided by, or granted pursuant
to, this Article VII shall be enforceable by any person entitled to such
indemnification or reimbursement or advancement of expenses in any court of
competent jurisdiction. The burden of proving that such indemnification or
reimbursement or advancement of expenses is not appropriate shall be on the
Corporation. Neither the failure of the Corporation (including its Board of
Directors, its independent legal counsel and its stockholders) to have made a
determination prior to the commencement of such action that such indemnification
or reimbursement or advancement of expenses is proper in the circumstances nor
an actual determination by the Corporation (including its Board of Directors,
its independent legal counsel and its stockholders) that such person is not
entitled to such indemnification or reimbursement or advancement of expenses
shall constitute a defense to the action or create a presumption that such
person is not so entitled. Such a person shall also be indemnified for any
expenses incurred in connection with successfully establishing his or her right
to such indemnification or reimbursement or advancement of expenses, in whole or
in part, in any such Proceeding.
7.8 Service at the Request of the Corporation. Any Director or
-----------------------------------------
officer of the Corporation serving any capacity in (a) another corporation of
which a majority of the shares entitled to vote in the election of its directors
is held, directly or indirectly, by the Corporation or (b) any employee benefit
plan of the Corporation or any corporation referred to in clause (a) shall be
deemed to be doing so at the request of the Corporation.
7.9 Right to be Covered by Applicable Law. Any person entitled to be
-------------------------------------
indemnified or to reimbursement or advancement of expenses as a matter of right
pursuant to this Article VII may elect to have the right to indemnification or
reimbursement or advancement of expenses interpreted on the basis of the
applicable law in effect at the time of the occurrence of the event or events
giving rise to the applicable Proceeding, to the extent permitted by law, or on
the basis of the applicable law in effect at the time such indemnification or
reimbursement or advancement of expenses is sought; provided, however, that if
-------- -------
no such notice is given, the right to indemnification or reimbursement or
advancement of expenses shall be determined by the law in effect at the time
indemnification or reimbursement or advancement of expenses is sought.
3
<PAGE>
ARTICLE VIII
No Director of the Corporation shall be liable to the Corporation or
any of its stockholders for monetary damages for breach of fiduciary duty as a
Director, provided that this provision does not eliminate the liability of the
Director (i) for any breach of the Director's duty of loyalty to the Corporation
or its stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the GCL or (iv) for any transaction from which the Director
derived an improper personal benefit. For purposes of the prior sentence, the
term "damages" shall, to the extent permitted by law, include without
limitation, any judgment, fine, amount paid in settlement, penalty, punitive
damages, excise or other tax assessed with respect to an employee benefit plan,
or expense of any nature (including, without limitation, counsel fees and
disbursements). Each person who serves as a Director of the Corporation while
this Article VIII is in effect shall be deemed to be doing so in reliance on the
provisions of this Article VIII, and neither the amendment or repeal of this
Article VIII, nor the adoption of any provision of this Certificate of
Incorporation inconsistent with this Article VIII, shall apply to or have any
effect on the liability or alleged liability or any Director of the Corporation
for, arising out of, based upon, or in connection with any acts or omissions of
such Director occurring prior to such amendment, repeal, or adoption of an
inconsistent provision. The provisions of this Article VIII are cumulative and
shall be in addition to and independent of any and all other limitations on or
eliminations of the liabilities of Directors of the Corporation, as such,
whether such limitations or eliminations arise under or are created by any law,
rule, regulation, bylaw, agreement, vote of stockholders or disinterested
directors, or otherwise.
IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Incorporation this 2nd day of October, 1997.
/s/ Ralph J. Mauro
---------------------------------
Ralph J. Mauro, Incorporator
4
<PAGE>
CERTIFICATE OF AMENDMENT OF
CERTIFICATE OF INCORPORATION
OF
TRITON PCS LICENSE COMPANY, INC.
TRITON PCS LICENSE COMPANY, INC., a corporation organized and existing
under and by virtue of the General Corporation Law of the State of Delaware,
DOES HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors of Triton PCS License
Company, Inc., resolutions were duly adopted setting forth a proposed amendment
of the Certificate of Incorporation of said corporation, declaring said
amendment to be advisable and calling a meeting of the stockholders of said
corporation for consideration thereof. The resolution setting forth the proposed
amendment is as follows:
RESOLVED, That the Certificate of Incorporation of this corporation be
amended by changing Article FIRST thereof, so that, as amended the
said Article shall be and read as follows:
ARTICLE I
The name of the Corporation shall be Triton PCS, Inc.
SECOND: That thereafter, pursuant to resolution of its Board of Directors,
the stockholders of said corporation, by unanimous written consent, voted the
necessary number of shares as required by statute in favor of the amendment.
THIRD: The said amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
FOURTH: The capital of said corporation shall not be reduced under or by
reason of said amendment.
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Amendment this 19th day of December, 1997.
TRITON PCS LICENSE COMPANY, INC.
By: /s/ David D. Clark
-----------------------------------------
David D. Clark, Senior Vice President
2
<PAGE>
COMMONWEALTH OF PENNSYLVANIA :
: SS.
COUNTY OF PHILADELPHIA :
On this 19th day of December,1997 before me the undersigned officer,
personally appeared David D. Clark, known to me (or satisfactorily proven) to be
the person whose name is subscribed to the foregoing instrument, and
acknowledged that he executed it for the purposes therein contained.
Witness my hand and official seal the day and year aforesaid.
/s/ Vincenza J. Tribuiari
----------------------------------------
Notary Public
My Commission Expires:
[SEAL APPEARS HERE]
3
<PAGE>
EXHIBIT 3.2
================================================================================
TRITON PCS, INC.
(formerly Triton PCS License Company, Inc.)
BYLAWS
Adopted as of October 2, 1997
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE 1.
STOCKHOLDERS........................................................................................ 1
1.1 Annual Meeting............................................................... 1
1.2 Special Meetings............................................................. 1
1.3 Notice of Meetings; Waiver................................................... 1
1.4 Quorum....................................................................... 2
1.5 Voting....................................................................... 2
1.6 Voting by Ballot............................................................. 2
1.7 Adjournment.................................................................. 2
1.8 Proxies...................................................................... 3
1.9 Organization; Procedure...................................................... 3
1.10 Consent of Stockholders in Lieu of Meeting................................... 3
ARTICLE 2.
BOARD OF DIRECTORS.................................................................................. 3
2.1 General Powers............................................................... 3
2.2 Number and Term of Office.................................................... 4
2.3 Election of Directors........................................................ 4
2.4 Annual and Regular Meetings.................................................. 4
2.5 Special Meetings; Notice..................................................... 4
2.6 Quorum; Voting............................................................... 5
2.7 Adjournment.................................................................. 5
2.8 Action Without a Meeting..................................................... 5
2.9 Regulations; Manner of Acting................................................ 5
2.10 Action by Telephonic Communications.......................................... 5
2.11 Resignation.................................................................. 5
2.12 Removal of Directors......................................................... 5
2.13 Vacancies and Newly Created Directorships.................................... 6
2.14 Compensation................................................................. 6
2.15 Reliance on Accounts and Reports, etc........................................ 6
ARTICLE 3.
EXECUTIVE COMMITTEE AND OTHER COMMITTEES............................................................ 6
3.1 How Constituted.............................................................. 6
3.2 Powers....................................................................... 7
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
3.3 Quorum; Voting................................................................. 7
3.4 Action without a Meeting....................................................... 7
3.5 Regulations; Manner of Acting.................................................. 7
3.6 Action by Telephonic Communications............................................ 7
3.7 Resignation.................................................................... 8
3.8 Removal........................................................................ 8
3.9 Vacancies...................................................................... 8
ARTICLE 4.
OFFICERS.............................................................................................. 8
4.1 Titles......................................................................... 8
4.2 Election....................................................................... 8
4.3 Salaries....................................................................... 8
4.4 Removal and Resignation; Vacancies............................................. 8
4.5 Authority and Duties........................................................... 9
4.6 The Chairman of the Board...................................................... 9
4.7 The President.................................................................. 9
4.8 The Vice Presidents............................................................ 9
4.9 The Secretary................................................................. 10
4.10 The Treasurer................................................................. 10
4.11 Additional Officers........................................................... 11
4.12 Security...................................................................... 11
ARTICLE 5.
CAPITAL STOCK........................................................................................ 12
5.1 Certificates of Stock, Uncertificated Shares.................................. 12
5.2 Signatures; Facsimile......................................................... 12
5.3 Lost, Stolen or Destroyed Certificates........................................ 12
5.4 Transfer of Stock............................................................. 12
5.5 Record Date................................................................... 13
5.6 Registered Stockholders....................................................... 13
5.7 Transfer Agent and Registrar.................................................. 13
ARTICLE 6.
INDEMNIFICATION...................................................................................... 13
6.1 Indemnification............................................................... 13
6.2 Definition.................................................................... 14
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C>
ARTICLE 7.
OFFICES................................................................................................. 14
7.1 Registered Office................................................................ 14
7.2 Other Offices.................................................................... 14
ARTICLE 8.
GENERAL PROVISIONS...................................................................................... 14
8.1 Dividends........................................................................ 14
8.2 Reserves......................................................................... 14
8.3 Execution of Instruments......................................................... 15
8.4 Corporate Indebtedness........................................................... 15
8.5 Deposits......................................................................... 15
8.6 Checks........................................................................... 15
8.7 Sale, Transfer, etc. of Securities............................................... 15
8.8 Voting as Stockholder............................................................ 15
8.9 Fiscal Year...................................................................... 16
8.10 Seal............................................................................. 16
8.11 Books and Records................................................................ 16
ARTICLE 9.
AMENDMENT OF BYLAWS..................................................................................... 16
9.1 Amendment........................................................................ 16
ARTICLE 10.
CONSTRUCTION............................................................................................ 16
10.1 Construction..................................................................... 16
</TABLE>
iii
<PAGE>
BYLAWS
TRITON PCS, INC.
(formerly Triton PCS License Company, Inc.)
ARTICLE 1.
STOCKHOLDERS
1.1 Annual Meeting. The annual meeting of the stockholders of the
--------------
Corporation for the election of directors and for the transaction of such other
business as may properly come before such meeting shall be held at such place,
either within or without the State of Delaware, at 9:00 A.M. on the second
Wednesday of each April of each year (or, if such day is a legal holiday, then
on the next succeeding business day), or at such other date and hour, as may be
fixed from time to time by resolution of the Board of Directors and set forth in
the notice or waiver of notice of the meeting.
1.2 Special Meetings. Special meetings of the stockholders may be
----------------
called at any time by the Chairman of the Board (or, in the event of his absence
or disability, by the President), or by the Board of Directors. A special
meeting shall be called by the Chairman of the Board (or, in the event of his
absence or disability, by the President), or by the Secretary, immediately upon
receipt of a written request therefor by stockholders holding in the aggregate
not less than 10% of the outstanding shares of the Corporation at the time
entitled to vote at any meeting of the stockholders. If such officers or the
Board of Directors shall fail to call such meeting within 20 days after receipt
of such request, any stockholder executing such request may call such meeting.
Any such special meeting of the stockholders shall be held at such place, within
or without the State of Delaware, as shall be specified in the notice or waiver
of notice thereof.
1.3 Notice of Meetings; Waiver. The Secretary or any Assistant
--------------------------
Secretary shall cause written notice of the place, date and hour of each meeting
of the stockholders, and, in the case of a special meeting, the purpose or
purposes for which such meeting is called, to be given personally or by mail,
not less than ten nor more than 60 days before the date of the meeting, to each
stockholder of record entitled to vote at such meeting. If such notice is
mailed, it shall be deemed to have been given to a stockholder when deposited in
the United States mail, postage prepaid, directed to the stockholder at his
address as it appears on the record of stockholders of the Corporation, or, if
he shall have filed with the Secretary a written request that notices to him be
mailed to some other address, then directed to him at such other address. Such
further notice shall be given as may be required by law.
1
<PAGE>
Whenever notice is required to be given to stockholders hereunder, a
written waiver, signed by a stockholder, whether before or after the time stated
therein, shall be deemed equivalent to notice. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of the
stockholders need be specified in a written waiver of notice. The attendance of
any stockholder at a meeting of stockholders shall constitute a waiver of notice
of such meeting, except when the stockholder attends a meeting for the express
purpose of objecting, at the beginning of the meeting, to the transaction of any
business on the ground that the meeting is not lawfully called or convened.
1.4 Quorum. Except as otherwise required by law or by the Certificate
------
of Incorporation, the presence in person or by proxy of the holders of record of
a majority of the shares entitled to vote at a meeting of stockholders shall
constitute a quorum for the transaction of business at such meeting.
1.5 Voting. If, pursuant to Section 5.5 of these Bylaws, a record
------
date has been fixed, every holder of record of shares entitled to vote at a
meeting of stockholders shall be entitled to one vote for each share outstanding
in his name on the books of the Corporation at the close of business on such
record date. If no record date has been fixed, then every holder of record of
shares entitled to vote at a meeting of stockholders shall be entitled to one
vote for each share of stock standing in his name on the books of the
Corporation at the close of business on the day next preceding the day on which
notice of the meeting is given, or, if notice is waived, at the close of
business on the day next preceding the day on which the meeting is held. Except
as otherwise required by law or by the Certificate of Incorporation, the vote of
a majority of the shares represented in person or by proxy at any meeting at
which a quorum is present shall be sufficient for the transaction of any
business at such meeting.
1.6 Voting by Ballot. No vote of the stockholders need be taken by
----------------
written ballot or conducted by inspectors of election, unless otherwise required
by law. Any vote which need not be taken by ballot may be conducted in any
manner approved by the meeting.
1.7 Adjournment. If a quorum is not present at any meeting of the
-----------
stockholders, the stockholders present in person or by proxy shall have the
power to adjourn any such meeting from time to time until a quorum is present.
Notice of any adjourned meeting of the stockholders of the Corporation need not
be given if the place, date and hour thereof are announced at the meeting at
which the adjournment is taken, provided, however, that if the adjournment is
for more than 30 days, or if after the adjournment a new record date for the
adjourned meeting is fixed pursuant to Section 5.5 of these Bylaws, a notice of
the adjourned meeting, conforming to the requirements of Section 1.3 hereof,
shall be given to each stockholder of record entitled to vote at such meeting.
At any adjourned meeting at which a quorum is present, any business may be
transacted that might have been transacted on the original date of the meeting.
2
<PAGE>
1.8 Proxies. Any stockholder entitled to vote at any meeting of the
-------
stockholders or to express consent to or dissent from corporate action without a
meeting may, by a written instrument signed by such stockholder or his
attorney-in-fact, authorize another person or persons to vote at any such
meeting and express such consent or dissent for him by proxy. No such proxy
shall be voted or acted upon after the expiration of three years from the date
of such proxy, unless such proxy provides for a longer period. Every proxy shall
be revocable at the pleasure of the stockholder executing it, except in those
cases where applicable law provides that a proxy shall be irrevocable. A
stockholder may revoke any proxy which is not irrevocable by attending the
meeting and voting in person or by filing an instrument in writing revoking the
proxy or by filing another duly executed proxy bearing a later date with the
Secretary.
1.9 Organization; Procedure. At every meeting of stockholders the
-----------------------
presiding officer shall be the Chairman of the Board or, in the event of his
absence or disability, the President or, in the event of his absence or
disability, a presiding officer chosen by a majority of the stockholders present
in person or by proxy. The Secretary, or in the event of his absence or
disability, the Assistant Secretary, if any, or if there be no Assistant
Secretary, in the absence of the Secretary, an appointee of the presiding
officer, shall act as Secretary of the meeting. The order of business and all
other matters of procedure at every meeting of stockholders may be determined by
such presiding officer.
1.10 Consent of Stockholders in Lieu of Meeting. To the fullest extent
------------------------------------------
permitted by law, whenever the vote of the stockholders at a meeting thereof is
required or permitted to be taken for or in connection with any corporate
action, such action may be taken without a meeting, without prior notice and
without a vote of stockholders, if the holders of outstanding stock having not
less than the minimum number of votes that would be necessary to authorize or
take such action at a meeting at which all shares entitled to vote thereon were
present and voted shall consent in writing to such corporate action being taken.
Prompt notice of the taking of the corporate action without a meeting by less
than unanimous written consent shall be given to those stockholders who have not
so consented in writing.
ARTICLE 2.
BOARD OF DIRECTORS
2.1 General Powers. Except as may otherwise be provided by law, by
--------------
the Certificate of Incorporation or by these Bylaws, the property, affairs and
business of the Corporation shall be managed by or under the direction of the
Board of Directors and the Board of Directors may exercise all the powers of the
Corporation.
3
<PAGE>
2.2 Number and Term of Office. The Board of Directors shall consist
-------------------------
of one to three members, as determined by and as may be modified from time to
time by resolution of the Board of Directors, but in no event shall the number
of Directors be less than one. Each Director (whenever elected) shall hold
office until his successor has been duly elected and qualified, or until his
earlier death, resignation or removal.
2.3 Election of Directors. Except as otherwise provided in Sections
---------------------
2.12 and 2.13 of these Bylaws, the Directors shall be elected at each annual
meeting of the stockholders; provided, however, that unless otherwise named in
the Certificate of Incorporation, the initial Board of Directors shall be
elected by the incorporator(s) of the Corporation. If the annual meeting for the
election of Directors is not held on the date designated therefor, the Directors
shall cause the meeting to be held as soon thereafter as convenient. At each
meeting of the stockholders for the election of Directors, provided a quorum is
present, the Directors shall be elected by a plurality of the votes validly cast
in such election.
2.4 Annual and Regular Meetings. The annual meeting of the Board of
---------------------------
Directors for the purpose of electing officers and for the transaction of such
other business as may come before the meeting shall be held as soon as possible
following adjournment of the annual meeting of the stockholders at the place of
such annual meeting of the stockholders. Notice of such annual meeting of the
Board of Directors need not be given. The Board of Directors from time to time
may by resolution provide for the holding of regular meetings and fix the place
(which may be within or without the State of Delaware) and the date and hour of
such meetings. Notice of regular meetings need not be given, provided, however,
that if the Board of Directors shall fix or change the time or place of any
regular meeting, notice of such action shall be mailed promptly, or sent by
telegram, facsimile or cable, to each Director who shall not have been present
at the meeting at which such action was taken, addressed to him at his usual
place of business, or shall be delivered to him personally. Notice of such
action need not be given to any Director who attends the first regular meeting
after such action is taken without protesting the lack of notice to him, prior
to or at the commencement of such meeting, or to any Director who submits a
signed waiver of notice, whether before or after such meeting.
2.5 Special Meetings; Notice. Special meetings of the Board of
------------------------
Directors shall be held whenever called by the Chairman of the Board or, in the
event of his absence or disability, by the President, at such place (within or
without the State of Delaware), date and hour as may be specified in the
respective notices or waivers of notice of such meetings. Special meetings of
the Board of Directors may be called on 24 hours' notice, if notice is given to
each Director personally or by telephone or facsimile, or on five days' notice,
if notice is mailed to each Director, addressed to him at his usual place of
business. Notice of any special meeting need not be given to any Director who
attends such meeting without protesting the lack of notice to him, prior to or
at the commencement of such meeting, or to any Director who submits a signed
waiver of notice, whether before or after such meeting, and any business may be
transacted thereat.
4
<PAGE>
2.6 Quorum; Voting. At all meetings of the Board of Directors, the
--------------
presence of a majority of the total authorized number of Directors shall
constitute a quorum for the transaction of business. Except as otherwise
required by law, the vote of a majority of the Directors present at any meeting
at which a quorum is present shall be the act of the Board of Directors.
2.7 Adjournment. A majority of the Directors present, whether or not
-----------
a quorum is present, may adjourn any meeting of the Board of Directors to
another time or place. No notice need be given of any adjourned meeting unless
the time and place of the adjourned meeting are not announced at the time of
adjournment, in which case notice conforming to the requirements of Section 2.5
shall be given to each Director.
2.8 Action Without a Meeting. Any action required or permitted to be
------------------------
taken at any meeting of the Board of Directors may be taken without a meeting if
all members of the Board of Directors consent thereto in writing, and such
writing or writings are filed with the minutes of proceedings of the Board of
Directors.
2.9 Regulations; Manner of Acting. To the extent consistent with
-----------------------------
applicable law, the Certificate of Incorporation and these Bylaws, the Board of
Directors may adopt such rules and regulations for the conduct of meetings of
the Board of Directors and for the management of the property, affairs and
business of the Corporation as the Board of Directors may deem appropriate. The
Directors shall act only as a Board, and the individual Directors shall have no
power as such.
2.10 Action by Telephonic Communications. Members of the Board of
-----------------------------------
Directors may participate in a meeting of the Board of Directors by means of
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other, and participation in a
meeting pursuant to this provision shall constitute presence in person at such
meeting.
2.11 Resignation. Any Director may resign at any time by delivering a
-----------
written notice of resignation, signed by such Director, to the Chairman of the
Board, the President or the Secretary. Unless otherwise specified therein, such
resignation shall take effect upon delivery.
2.12 Removal of Directors. Any Director may be removed at any time,
--------------------
either for or without cause, upon the affirmative vote of the holders of
majority of the outstanding shares of stock of the Corporation entitled to vote
for the election of such Director, cast at a special meeting of stockholders
called for that purpose. Any vacancy in the Board of Directors caused by any
such removal may be filled at such meeting by the stockholders entitled to vote
for the election of the Director so removed. If such stockholders do not fill
such vacancy at such meeting (or in the written instrument effecting such
removal, if such removal was effected by consent without a meeting), such
vacancy may be filled in the manner provided in Section 2.13 of these Bylaws.
5
<PAGE>
2.13 Vacancies and Newly Created Directorships. If any vacancies shall
-----------------------------------------
occur in the Board of Directors, by reason of death, resignation, removal or
otherwise, or if the authorized number of Directors shall be increased, the
Directors then in office shall continue to act, and such vacancies and newly
created directorships may be filled by a majority of the Directors then in
office, although less than a quorum. A Director elected to fill a vacancy or a
newly created directorship shall hold office until his successor has been
elected and qualified or until his earlier death, resignation or removal. Any
such vacancy or newly created directorship may also be filled at any time by
vote of the stockholders.
2.14 Compensation. The amount, if any, which each Director shall be
------------
entitled to receive as compensation for his services as such shall be fixed from
time to time by resolution of the Board of Directors.
2.15 Reliance on Accounts and Reports, etc. A member of the Board of
--------------------------------------
Directors, or a member of any Committee designated by the Board of Directors,
shall, in the performance of his duties, be fully protected in relying in good
faith upon the records of the Corporation and upon such information, opinions,
reports or statements presented to the Corporation by any of the Corporation's
officers or employees, or Committees of the Board of Directors, or by any other
person as to matters the member reasonably believes are within such other
person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Corporation, including without limitation
independent certified public accountants and appraisers.
ARTICLE 3.
EXECUTIVE COMMITTEE AND OTHER COMMITTEES
3.1 How Constituted. The Board of Directors may designate one or more
---------------
Committees, including an Executive Committee, each such Committee to consist of
such number of Directors as from time to time may be fixed by the Board of
Directors. The Board of Directors may designate one or more directors as
alternate members of any such Committee, who may replace any absent or
disqualified member or members at any meeting of such Committee. In addition,
unless the Board of Directors has so designated an alternate member of such
Committee, in the absence or disqualification of a member of such Committee, the
member or members thereof present at any meeting and not disqualified from
voting, whether or not he or they constitute a quorum, may unanimously appoint
another member of the Board of Directors to act at the meeting in the place of
any such absent or disqualified member. Thereafter, members (and alternate
members, if any) of each such Committee may be designated at the annual meeting
of the Board of Directors. Any such Committee may be abolished or redesignated
from time to time by the Board of Directors. Each member (and each alternate
member) of any such Committee (whether designated at an annual meeting of the
Board of Directors or to fill a vacancy or otherwise) shall hold office until
his
6
<PAGE>
successor shall have been designated or until he shall cease to be a Director,
or until his earlier death, resignation or removal.
3.2 Powers. During the intervals between the meetings of the Board of
------
Directors, the Executive Committee, if created by the Board of Directors, and
except as otherwise provided in this section, shall have and may exercise all
the powers and authority of the Board of Directors in the management of the
property, affairs and business of the Corporation, including the power to
declare dividends and to authorize the issuance of stock. Each such other
Committee shall have and may exercise such powers of the Board of Directors as
may be provided by resolution of the Board, provided, that neither the Executive
Committee nor any such other Committee shall have the power or authority to (i)
approve or adopt, or recommend to the stockholders, any action or matter
expressly required by the General Corporation Law to be submitted to
stockholders for approval or (ii) adopt, amend or repeal any of these Bylaws.
The Executive Committee shall have, and any such other Committee may be granted
by the Board of Directors, power to authorize the seal of the Corporation to be
affixed to any or all papers which may require it.
3.3 Quorum; Voting. Except as may be otherwise provided in the
--------------
resolution creating such Committee, at all meetings of any Committee the
presence of members (or alternate members) constituting a majority of the total
authorized membership of such Committee shall constitute a quorum for the
transaction of business. The act of a majority of the members present at any
meeting at which a quorum is present shall be the act of such Committee.
3.4 Action without a Meeting. Any action required or permitted to be
------------------------
taken at any meeting of any such Committee may be taken without a meeting, if
all members of such Committee shall consent to such action in writing and such
writing or writings are filed with the minutes of the proceedings of the
Committee.
3.5 Regulations; Manner of Acting. Each such Committee may fix its
-----------------------------
own rules of procedure and may meet at such place (within or without the State
of Delaware), at such time and upon such notice, if any, as it shall determine
from time to time. Each such Committee shall keep minutes of its proceedings and
shall report such proceedings to the Board of Directors at the meeting of the
Board of Directors next following any such proceeding. The members of any such
Committee shall act only as a Committee, and the individual members of such
Committee shall have no power as such.
3.6 Action by Telephonic Communications. Members of any Committee
-----------------------------------
designated by the Board of Directors may participate in a meeting of such
Committee by means of conference telephone or similar communications equipment
by means of which all persons participating in the meeting can hear each other,
and participation in a meeting pursuant to this provision shall constitute
presence in person at such meeting.
7
<PAGE>
3.7 Resignation. Any member (and any alternate member) of any
-----------
Committee may resign at any time by delivering a written notice of resignation,
signed by such member, to the Chairman of the Board or the President. Unless
otherwise specified therein, such resignation shall take effect upon delivery.
3.8 Removal. Any member (any alternate member) of any Committee may
-------
be removed at any time, with or without cause, by resolution adopted by a
majority of the whole Board of Directors.
3.9 Vacancies. If any vacancy shall occur in any Committee, by reason
---------
of death, resignation, removal or otherwise, the remaining members (and any
alternate members) shall continue to act, and any such vacancy may be filled by
the Board of Directors or the remaining members of the Committee as provided in
Section 3.1 hereof.
ARTICLE 4.
OFFICERS
4.1 Titles. The officers of the Corporation shall be chosen by the
------
Board of Directors and shall be a Chairman of the Board, a President, one or
more Vice Presidents, a Secretary and a Treasurer. The Board of Directors also
may elect one or more Assistant Secretaries and Assistant Treasurers in such
numbers as the Board of Directors may determine, and shall also elect a Chairman
of the Board. Any number of offices may be held by the same person. No officer
need be a Director of the Corporation.
4.2 Election. Unless otherwise determined by the Board of Directors,
--------
the officers of the Corporation shall be elected by the Board of Directors at
the annual meeting of the Board of Directors, and shall be elected to hold
office until the next succeeding annual meeting of the Board of Directors. In
the event of the failure to elect officers at such annual meeting, officers may
be elected at any regular or special meeting of the Board of Directors. Each
officer shall hold office until his successor has been elected and qualified, or
until his earlier death, resignation or removal.
4.3 Salaries. The salaries of all officers of the Corporation shall
--------
be fixed by the Board of Directors.
4.4 Removal and Resignation; Vacancies. Any officer may be removed
----------------------------------
with or without cause at any time by the Board of Directors. Any officer may
resign at any time by delivering a written notice of resignation, signed by such
officer, to the Board of Directors or the Chairman of the Board.
8
<PAGE>
4.5 Unless otherwise specified therein, such resignation shall take
effect upon delivery. Any vacancy occurring in any office of the Corporation by
death, resignation, removal or otherwise, shall be filled by the Board of
Directors.
4.6 Authority and Duties. The officers of the Corporation shall have
--------------------
such authority and shall exercise such powers and perform such duties as may be
specified in these Bylaws, except that in any event each officer shall exercise
such powers and perform such duties as may be required by law.
4.7 The Chairman of the Board. The Chairman of the Board shall
-------------------------
preside at all meetings of the stockholders and directors, shall be the chief
executive officer of the Corporation and, together with the President and
subject to the directions of the Board of Directors, shall have general control
and supervision of the business and operations of the Corporation and shall see
that all orders and resolutions of the Board of Directors are carried into
effect. He shall manage and administer the Corporation's business and affairs
and shall also perform all duties and exercise all powers usually pertaining to
the office of a Chairman of the Board of a corporation. He shall have the
authority to sign, in the name and on behalf of the Corporation, checks, orders,
contracts, leases, notes, drafts and other documents and instruments in
connection with the business of the Corporation and, together with the Secretary
or an Assistant Secretary, conveyances of real estate and other documents and
instruments to which the seal of the Corporation is affixed. He shall have the
authority to cause the employment or appointment of such employees and agents of
the Corporation as the conduct of the business of the Corporation may require,
to fix their compensation, and to remove or suspend any employee or agent
elected or appointed by the Chairman of the Board, the President or the Board of
Directors. The Chairman of the Board shall perform such other duties and have
such other powers as the Board of Directors may from time to time prescribe.
4.8 The President. The President shall be the chief operating officer
-------------
of the Corporation and, together with the Chairman of the Board and subject to
the directions of the Board of Directors, shall have general control and
supervision of the policies and operations of the Corporation and shall see that
all orders and resolutions of the Board of Directors are carried into effect. In
the absence of the Chairman of the Board, the President shall preside at all
meetings of the stockholders and directors. He shall manage and administer the
Corporation's business and affairs and shall also perform all duties and
exercise all powers usually pertaining to the office of a chief operating
officer of a corporation. He shall have the authority to sign, in the name and
on behalf of the Corporation, checks, orders, contracts, leases, notes, drafts
and other documents and instruments in connection with the business of the
Corporation and, together with the Secretary or an Assistant Secretary,
conveyances of real estate and other documents and instruments to which the seal
of the Corporation is affixed. He shall have the authority to cause the
employment or appointment of such employees and agents of the Corporation as the
conduct of the business of the Corporation may require, to fix their
compensation, and to remove or suspend any employee or agent elected or
appointed by the Chairman of the Board, the President or the Board of Directors.
The
9
<PAGE>
President shall perform such other duties and have such other powers as the
Chairman of the Board or the Board of Directors may from time to time prescribe.
4.9 The Vice Presidents. Each Vice President shall perform such
-------------------
duties and exercise such powers as may be assigned to him from time to time by
the President. In the absence of the President, the duties of the President
shall be performed and his powers may be exercised by such Vice President as
shall be designated by the President, or failing such designation, such duties
shall be performed and such powers may be exercised by each Vice President in
the order of their election to that office; subject in any case to review and
superseding action by the President.
4.10 The Secretary. The Secretary shall have the following powers and
-------------
duties:
(a) He shall keep or cause to be kept a record of all the proceedings
of the meetings of the stockholders and of the Board of Directors in books
provided for that purpose.
(b) He shall cause all notices to be duly given in accordance with
the provisions of these Bylaws and as required by law.
(c) Whenever any Committee shall be appointed pursuant to a
resolution of the Board of Directors, he shall furnish a copy of such resolution
to the members of such Committee.
(d) He shall be the custodian of the records and of the seal of the
Corporation and cause such seal (or a facsimile thereof) to be affixed to all
certificates representing shares of the Corporation prior to the issuance
thereof and to all instruments the execution of which on behalf of the
Corporation under its seal shall have been duly authorized in accordance with
these Bylaws, and when so affixed he may attest to same.
(e) He shall properly maintain and file all books, reports,
statements, certificates and all other documents and records required by law,
the Certificate of Incorporation or these Bylaws.
(f) He shall have charge of the stock books and ledgers of the
Corporation and shall cause the stock and transfer books to be kept in such
manner as to show at any time the number of shares of stock of the Corporation
of each class issued and outstanding, the names (alphabetically arranged) and
the addresses of the holders of record of such shares, the number of shares held
by each holder and the date as of which each became such holder of record.
(g) He shall sign (unless the Treasurer, an Assistant Treasurer or
Assistant Secretary shall have signed) certificates representing shares of the
Corporation the issuance of which shall have been authorized by the Board of
Directors.
10
<PAGE>
(h) He shall perform, in general, all duties incident to the office
of secretary and such other duties as may be specified in these Bylaws or as may
be assigned to him from time to time by the Board of Directors or the President.
4.11 The Treasurer. The Treasurer shall be the chief financial officer
-------------
of the corporation and shall have the following powers and duties:
(a) He shall have charge and supervision over and be responsible for
the moneys, securities, receipts and disbursements of the Corporation, and shall
keep or cause to be kept full and accurate records of all receipts of the
Corporation.
(b) He shall cause the moneys and other valuable effects of the
Corporation to be deposited in the name and to the credit of the Corporation in
such banks or trust companies or with such bankers or other depositaries as
shall be selected in accordance with Section 8.5 of these Bylaws.
(c) He shall cause moneys of the Corporation to be disbursed by
checks or drafts (signed as provided in Section 8.6 of these Bylaws) upon the
authorized depositories of the Corporation and cause to be taken and preserved
proper vouchers for all moneys disbursed.
(d) He shall render to the Board of Directors or the President,
whenever requested, a statement of the financial condition of the Corporation
and of all his transactions as Treasurer, and render a full financial report at
the annual meeting of the stockholders, if called upon to do so.
(e) He shall be empowered from time to time to require from all
officers or agents of the Corporation reports or statements giving such
information as he may desire with respect to any and all financial transactions
of the Corporation.
(f) He may sign (unless an Assistant Treasurer or the Secretary or an
Assistant Secretary shall have signed) certificates representing stock of the
Corporation the issuance of which shall have been authorized by the Board of
Directors.
(g) He shall perform, in general, all duties incident to the office
of treasurer and such other duties as may be specified in these Bylaws or as may
be assigned to him from time to time by the Board of Directors, or the
President.
4.12 Additional Officers. The Board of Directors may appoint such
-------------------
other officers and agents as it my deem appropriate, and such other officers and
agents shall hold their offices for such terms and shall exercise such powers
and perform such duties as may be determined from time to time by the Board of
Directors. The Board of Directors from time to time may delegate to any officer
or agent the power to appoint subordinate officers or agents and to prescribe
their respective
11
<PAGE>
rights, terms of office, authorities and duties. Any such officer or agent may
remove any such subordinate officer or agent appointed by him, with or without
cause.
4.13 Security. The Board of Directors may direct that the Corporation
--------
secure the fidelity of any or all of its officers or agents by bond or
otherwise.
ARTICLE 5.
CAPITAL STOCK
5.1 Certificates of Stock, Uncertificated Shares. The shares of the
--------------------------------------------
Corporation shall be represented by certificates, provided that the Board of
Directors may provide by resolution that some or all of any or all classes or
series of the stock of the Corporation shall be uncertificated shares. Any such
resolution shall not apply to shares represented by a certificate until each
certificate is surrendered to the Corporation. Notwithstanding the adoption of
such a resolution by the Board of Directors, every holder of stock in the
Corporation represented by certificates and upon request every holder of
uncertificated shares shall be entitled to have a certificate signed by, or in
the name of the Corporation, by the Chairman of the Board, President or a Vice
President, and by the Treasurer or an Assistant Treasurer, or the Secretary or
an Assistant Secretary, representing the number of shares registered in
certificate form. Such certificate shall be in such form as the Board of
Directors may determine, to the extent consistent with applicable law, the
Certificate of Incorporation and these Bylaws.
5.2 Signatures; Facsimile. All of such signatures on the certificate
---------------------
may be a facsimile, engraved or printed, to the extent permitted by law. In case
any officer, transfer agent or registrar who has signed, or whose facsimile
signature has been placed upon a certificate shall have ceased to be such
officer, transfer agent or registrar before such certificate is issued, it may
be issued by the Corporation with the same effect as if he were such officer,
transfer agent or registrar at the date of issue.
5.3 Lost, Stolen or Destroyed Certificates. The Secretary of the
--------------------------------------
Corporation may cause a new certificate of stock or uncertificated shares in
place of any certificate therefor issued by the Corporation, alleged to have
been lost, stolen or destroyed, upon delivery to the Secretary of an affidavit
of the owner or owners of such certificate, or his or their legal representative
setting forth such allegation. The Secretary may require the owner or owners of
such lost, stolen or destroyed certificate, or his or their legal
representative, to give the Corporation a bond sufficient to indemnify it
against any claim that may be made against it on account of the alleged loss,
theft or destruction of any such certificate or the issuance of any such new
certificate or uncertificated shares.
5.4 Transfer of Stock. Upon surrender to the Corporation or the
-----------------
transfer agent of the Corporation of a certificate for shares, duly endorsed or
accompanied by appropriate evidence of
12
<PAGE>
succession, assignment or authority to transfer, the Corporation shall issue a
new certificate to the person entitled thereto, cancel the old certificate and
record the transaction upon its books. Within a reasonable time after the
transfer of uncertificated stock, the Corporation shall send to the registered
owner thereof a written notice containing the information required to be set
forth or stated on certificates pursuant to Section 151, 156, 202(a) or 218(a)
of the General Corporation Law. Subject to the provisions of the Certificate of
Incorporation and these Bylaws, the Board of Directors may prescribe such
additional rules and regulations as it may deem appropriate relating to the
issue, transfer and registration of shares of the Corporation.
5.5 Record Date. In order to determine the stockholders entitled to
-----------
notice of or to vote at any meeting of stockholders or any adjournment thereof,
or entitled to express consent to corporate action in writing without a meeting,
or entitled to receive payment of any dividend or other distribution or
allotment of any rights, or entitled to exercise any rights in respect of any
change, conversion or exchange of stock or for the purpose of any other lawful
action, the Board of Directors may fix, in advance, a record date, which shall
not be more than 60 nor less than ten days before the date of such meeting, nor
more than 60 days prior to any other action. A determination of stockholders of
record entitled to notice of or to vote at a meeting of stockholders shall apply
to any adjournment of the meeting, provided, however, that the Board of
Directors may fix a new record date for the adjourned meeting.-
5.6 Registered Stockholders. Prior to due surrender of a certificate
-----------------------
for registration of transfer, the Corporation may treat the registered owner as
the person exclusively entitled to receive dividends and other distributions, to
vote, to receive notice and otherwise to exercise all the rights and powers of
the owner of the shares represented by such certificate, and the Corporation
shall not be bound to recognize any equitable or legal claim to or interest in
such shares on the part of any other person, whether or not the Corporation
shall have notice of such claim or interest. Whenever any transfer of shares
shall be made for collateral security, and not absolutely, it shall be so
expressed in the entry of the transfer if, when the certificates are presented
to the Corporation for transfer or uncertificated shares are requested to be
transferred, both the transferor and transferee request the Corporation to do
so.
5.7 Transfer Agent and Registrar. The Board of Directors may appoint
----------------------------
one or more transfer agents and registrars, and may require all certificates
representing shares to bear the signature of any such transfer agents or
registrars.
ARTICLE 6.
INDEMNIFICATION
6.1 Indemnification. The Corporation shall, to the fullest extent
---------------
permitted by applicable law from time to time in effect, indemnify any and all
persons who may serve or who
13
<PAGE>
have served at any time as Directors or officers of the Corporation, or who at
the request of the Corporation may serve or at any time have served as Directors
or officers of another corporation (including subsidiaries of the Corporation)
or of any partnership, joint venture, trust or other enterprise, from and
against any and all of the expenses, liabilities or other matters referred to in
or covered by said law. Such indemnification shall continue as to a person who
has ceased to be a Director or officer and shall inure to the benefit of the
heirs, executors and administrators of such a person. The Corporation may also
indemnify any and all other persons whom it shall have power to indemnify under
any applicable law from time to time in effect to the extent authorized by the
Board of Directors and permitted by such law. The indemnification provided by
this Article shall not be deemed exclusive of any other rights to which any
person may be entitled under any provision of the Certificate of Incorporation,
other Bylaw, agreement, vote of stockholders or disinterested Directors, or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office.
6.2 Definition. For purposes of this Article, the term "Corporation"
----------
shall include constituent corporations referred to in Subsection (h) of Section
145 of the General Corporation Law (or any similar provision of applicable law
at the time in effect).
ARTICLE 7.
OFFICES
7.1 Registered Office. The registered office of the Corporation in
-----------------
the State of Delaware shall be located at Corporation Trust Center, 1209 Orange
Street, Wilmington, New Castle County, Delaware 19801, and the Corporation's
registered agent shall be the Corporation Trust Company.
7.2 Other Offices. The Corporation may maintain offices or places of
-------------
business at such other locations within or without the State of Delaware as the
Board of Directors may from time to time determine or as the business of the
Corporation may require.
ARTICLE 8.
GENERAL PROVISIONS
8.1 Dividends. Subject to any applicable provisions of law and the
---------
Certificate of Incorporation, dividends upon the shares of the Corporation may
be declared by the Board of Directors at any regular or special meeting of the
Board of Directors and any such dividend may be paid in cash, property, or
shares of the Corporation.
14
<PAGE>
8.2 Reserves. There may be set aside out of any funds of the
--------
Corporation available for dividends such sum or sums as the Board of Directors
from time to time, in its absolute discretion, thinks proper as a reserve or
reserves to meet contingencies, or for equalizing dividends, or for repairing or
maintaining any property of the Corporation or for such other purpose as the
Board of Directors shall think conducive to the interest of the Corporation, and
the Board of Directors may similarly modify or abolish any such reserve.
8.3 Execution of Instruments. The Chairman of the Board, the
------------------------
President, any Vice President, the Secretary or the Treasurer may enter into any
contract or execute and deliver any instrument in the name and on behalf of the
Corporation. The Board of Directors, the Chairman of the Board or the President
may authorize any other officer or agent to enter into any contract or execute
and deliver any instrument in the name and on behalf of the Corporation. Any
such authorization may be general or limited to specific contracts or
instruments.
8.4 Corporate Indebtedness. No loan shall be contracted on behalf of
----------------------
the Corporation, and no evidence of indebtedness shall be issued in its name,
unless authorized by the Board of Directors. Such authorization may be general
or confined to specific instances. Loans so authorized may be effected at any
time for the Corporation from any bank, trust company or other institution, or
from any firm, corporation or individual. All bonds, debentures, notes and other
obligations or evidences of indebtedness of the Corporation issued for such
loans shall be made, executed and delivered as the Board of Directors shall
authorize. When so authorized by the Board of Directors, any part of or all the
properties, including contract rights, assets, business or good will of the
Corporation, whether then owned or thereafter acquired, may be mortgaged,
pledged, hypothecated or conveyed or assigned in trust as security for the
payment of such bonds, debentures, notes and other obligations or evidences of
indebtedness of the Corporation, and of any interest thereon, by instruments
executed and delivered in the name of the Corporation.
8.5 Deposits. Any funds of the Corporation may be deposited from time
--------
to time in such banks, trust companies or other depositaries as may be
determined by the Board of Directors or the President, or by such officers or
agents as may be authorized by the Board of Directors, Chairman of the Board or
the President to make such determination.
8.6 Checks. All checks or demands for money and notes of the
------
Corporation shall be signed by such officer or officers or such agent or agents
of the Corporation, and in such manner, as the Board of Directors, Chairman of
the Board or the President from time to time may determine.
8.7 Sale, Transfer, etc. of Securities. To the extent authorized by
----------------------------------
the Board of Directors, Chairman of the Board or by the President, any Vice
President, the Secretary or the Treasurer or any other officers designated by
the Board of Directors, Chairman of the Board or the President may sell,
transfer, endorse, and assign any shares of stock, bonds or other securities
owned by or held in the name of the Corporation, and may make, execute and
deliver in the name of the
15
<PAGE>
Corporation, under its corporate seal, any instruments that may be appropriate
to effect any such sale, transfer, endorsement or assignment.
8.8 Voting as Stockholder. Unless otherwise determined by resolution
---------------------
of the Board of Directors, Chairman of the Board, the President or any Vice
President shall have full power and authority on behalf of the Corporation to
attend any meeting of stockholders of any corporation in which the Corporation
may hold stock, and to act, vote (or execute proxies to vote) and exercise in
person or by proxy all other rights, powers and privileges incident to the
ownership of such stock. Such officers acting on behalf of the Corporation shall
have full power and authority to execute any instrument expressing consent to or
dissent from any action of any such corporation without a meeting. The Board of
Directors may by resolution from time to time confer such power and authority
upon any other person or persons.
8.9 Fiscal Year. The fiscal year of the Corporation shall commence on
-----------
the first day of January of each year (except for the Corporation's first fiscal
year which shall commence on the date of incorporation) and shall end in each
case on December 31.
8.10 Seal. The seal of the Corporation shall be circular in form and
----
shall contain the name of the Corporation, the year of its incorporation and the
words "Corporate Seal" and "Delaware". The form of such seal shall be subject to
alteration by the Board of Directors. The seal may be used by causing it or a
facsimile thereof to be impressed, affixed or reproduced, or may be used in any
other lawful manner.
8.11 Books and Records. Except to the extent otherwise required by
-----------------
law, the books and records of the Corporation shall be kept at such place or
places within or without the State of Delaware as may be determined from time to
time by the Board of Directors.
ARTICLE 9.
AMENDMENT OF BYLAWS
9.1 Amendment. These Bylaws may be amended, altered or repealed:
---------
(a) by resolution adopted by a majority of the Board of Directors at
any special or regular meeting of the Board if, in the case of such special
meeting only, notice of such amendment, alteration or repeal is contained in the
notice or waiver of notice of such meeting; or
(b) at any regular or special meeting of the stockholders if, in the
case of such special meeting only, notice of such amendment, alteration or
repeal is contained in the notice or waiver of notice of such meeting.
16
<PAGE>
ARTICLE 10.
CONSTRUCTION
10. Construction. In the event of any conflict between the provisions
------------
of these Bylaws as in effect from time to time and the provisions of the
Certificate of Incorporation as in effect from time to time, the provisions of
the Certificate of Incorporation shall be controlling.
17
<PAGE>
CONFORMED COPY
Exhibit 10.2.1
SECOND AMENDMENT, dated as of July 29, 1998 (this "Amendment"), to the
---------
Credit Agreement, dated as of February 3, 1998, as amended by the First
Amendment, Consent and Waiver thereto, dated as of April 24, 1998 (as further
amended, supplemented or otherwise modified from time to time, the "Credit
------
Agreement"), among TRITON PCS, INC., a corporation organized under the laws of
- ---------
the State of Delaware (the "Borrower"), TRITON PCS HOLDINGS, INC., a corporation
--------
organized under the laws of the State of Delaware ("Holdings"), the several
--------
banks and other financial institutions and entities from time to time parties
thereto (the "Lenders"), and THE CHASE MANHATTAN BANK, as administrative agent
-------
(the "Administrative Agent") for the Lenders.WHEREAS, pursuant to the Credit
--------------------
Agreement, the Lenders have agreed to make certain loans to the Borrower; and
WHEREAS the Borrower has requested that certain provisions of the
Credit Agreement be modified in the manner provided for in this Amendment, and
the Lenders are willing to agree to such modifications as provided for in this
Amendment.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Defined Terms. Capitalized terms used and not defined herein
--------------
shall have the meanings given to them in the Credit Agreement, as amended
hereby.
2. Amendments to the Credit Agreement.
-----------------------------------
(a) Section 1.01 of the Credit Agreement is hereby amended by:
(i) deleting the numbers "21,249,019" and "10,624,509" in the
definition of "AW Pops Acquisition" and substituting in lieu thereof
"212,490.19" and "106,245.09", respectively;
(ii) replacing the words "Section 5.04" in clauses (a) and (b) of the
definition of "Permitted Encumbrances" with the words "Section 5.05"; and
(iii) deleting the numbers "21,249,019" and "10,624,509" in the
definition of Preferred Stock Agreement and substituting in lieu thereof
"212,490.19" and "106,245.09", respectively; and
<PAGE>
(b) Section 5.14 of the Credit Agreement is hereby amended to read in
its entirety:
"Interest Rate Protection. As promptly as practicable, and in
-------------------------
any event within 90 days after the Effective Date, the Borrower will
enter into, and thereafter until the final maturity of all the Loans,
will maintain in effect, one or more interest rate protection
agreements with one or more Lenders on such terms as shall be
reasonably satisfactory to the Administrative Agent, the effect of
which shall be to fix or limit the interest cost to the Borrower with
respect to at least 60% of the outstanding Indebtedness of the
Borrower at a maximum rate reasonably acceptable to the Administrative
Agent."
3. No Other Amendments; Confirmation. Except as expressly amended,
----------------------------------
waived, modified and supplemented hereby, the provisions of the Credit Agreement
are and shall remain in full force and effect.
4. Representations and Warranties. Each of Borrower and Holdings
-------------------------------
hereby represents and warrants to the Administrative Agent and the Lenders as of
the date hereof:
(a) After giving effect to this Amendment, no Default or Event of
Default will exist and be continuing.
(b) The execution, delivery and performance by each of Borrower and
Holdings of this Amendment have been duly authorized by all necessary
corporate and other action and do not and will not require any registration
with, consent or approval of, notice to or action by, any person (including
any governmental agency) in order to be effective and enforceable. The
Credit Agreement as amended by this Amendment constitutes the legal, valid
and binding obligation of each of Borrower and Holdings, enforceable
against each in accordance with its terms, subject only to the operation of
the Bankruptcy Code and other similar statutes for the benefit of debtors
generally and to the application of general equitable principles.
(c) All representations and warranties of the Borrower and Holdings
contained in the Credit Agreement (other than representations or warranties
expressly made only on and as of the Effective Date) are true and correct
as of the date hereof.
<PAGE>
5. Effectiveness. This Amendment shall become effective only upon
--------------
the satisfaction in full of the following conditions precedent:
(a) The Administrative Agent shall have received counterparts hereof,
duly executed and delivered by the Borrower, Holdings and the Requisite
Lenders;
(b) The Administrative Agent shall have received such opinions and
certificates from the Borrower and Holdings and their counsel as it may
reasonably request in form reasonably satisfactory to its counsel;
(c) The Administrative Agent shall have received each of the following
from the Borrower and Holdings:
(i) A copy of resolutions passed by the board of directors of the
Borrower and Holdings, certified by the Secretary or an Assistant
Secretary of the Borrower and Holdings, as the case may be, as being
in full force and effect on the date hereof, authorizing the
execution, delivery and performance of this Amendment;
(ii) A certificate as to the name and signature of each officer
of the Borrower and Holdings authorized to sign this Amendment; and
(iii) A certificate of the chief financial officer of the
Borrower to the effect that (x) all representations and warranties
contained in this Amendment are true and correct as of the date
hereof, (y) since February 4, 1998, there has been no material adverse
change in the business, assets, operations, prospects, condition
(financial or otherwise) of the Borrower and its Subsidiaries taken as
a whole, and (z) that no event has occurred and is continuing which,
under the terms hereof, is an Event of Default or would, with the
lapse of time or notice or both, become an Event of Default.
6. Expenses. The Borrower agrees to reimburse the Administrative
---------
Agent for its out-of-pocket expenses in connection with this Amendment,
including the reasonable fees, charges and disbursements of Cravath, Swaine &
Moore, counsel for the Administrative Agent.
<PAGE>
7. Governing Law; Counterparts. (a) This Amendment and the rights
----------------------------
and obligations of the parties hereto shall be governed by, and construed and
interpreted in accordance with, the laws of the State of New York.
(b) This Amendment may be executed by one or more of the parties to
this Amendment on any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. This Amendment may be delivered by facsimile transmission of the
relevant signature pages hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered by their respective proper and duly authorized
officers as of the day and year first above written.
TRITON PCS, INC.
by
/s/ David D. Clark
--------------------------------
Name: David D. Clark
Title: Chief Financial Officer
TRITON PCS HOLDINGS, INC.,
by
/s/ David D. Clark
--------------------------------
Name: David D. Clark
Title: Chief Financial Officer
THE CHASE MANHATTAN BANK,
individually and as Administrative Agent,
by
/s/ Tracey Navin Ewing
--------------------------------
Name: Tracey Navin Ewing
Title: Vice President
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
by
/s/ Michael J. Gibbons
--------------------------------
Name: Michael J. Gibbons
Title: Managing Director
<PAGE>
TORONTO DOMINION BANK (TEXAS),
by
/s/ Debbie A. Greene
--------------------------------
Name: Debbie A. Greene
Title: Vice President0
BALANCED HIGH YIELD FUND I LTD.,
as Investment Advisor,
by
/s/ Heidimarie Skor
-------------------------------
Name: Heidimarie Skor
Title: Vice President
by
/s/ Dana L. McDougall
-------------------------------
Name: Dana L. McDougall
Title: Vice President
BANKBOSTON, N.A.,
by
/s/ Shepard D. Rainie
-------------------------------
Name: Shepard D. Rainie
Title: Managing Director
BANK OF HAWAII,
by
-------------------------------
Name:
Title:
BANK OF TOKYO-MITSUBISHI TRUST COMPANY,
by
/s/ Glenn B. Eckert
-------------------------------
Name: Glenn B. Eckert
Title: Vice President
<PAGE>
BARCLAYS BANK PLC,
by
/s/ Les Bek
-------------------------------
Name: Les Bek
Title: Director
BAYERISCHE HYPOTHEKEN- UND WECHSEL-
BANK AG, NEW YORK BRANCH,
by
/s/ Andreas Vick
-------------------------------
Name: Andreas Vick
Title: Vice President
by
/s/ R.G. Pankuch
-------------------------------
Name: R.G. Pankuch
Title: First Vice President
BHF BANK AKTIENGESELLSCHAFT,
by
/s/ Heidimarie Skor
-------------------------------
Name: Heidimarie Skor
Title: Vice President
by
/s/ Dana L. McDougall
-------------------------------
Name: Dana L. McDougall
Title: Vice President
THE CIT GROUP/EQUIPMENT FINANCING INC.,
by
/s/ J.E. Palmer
-------------------------------
Name: J.E. Palmer
Title: Assistant Vice President
FIRST UNION NATIONAL BANK,
by
/s/ Jim Redman
-------------------------------
Name: Jim Redman
Title: Senior Vice President
<PAGE>
THE FUJI BANK, LIMITED
New York Branch,
by
/s/ Tiji teramoto
--------------------------------
Name: Tiji Teramoto
Title: Vice President
GENERAL ELECTRIC CAPITAL CORPORATION,
by
/s/ Mark F. Mylon
-------------------------------
Name: Mark F. Mylon
Title: Manager Operations
LEHMAN COMMERCIAL PAPER, INC.,
by
/s/ Michele Swanson
-------------------------------
Name: Michele Swanson
Title: Authorized Signatory
MERRILL LYNCH SENIOR FLOATING
RATE FUND, INC.,
by
/s/ Andrew C. Liggio
-------------------------------
Name: Andrew C. Liggio
Title: Authorized Signatory
UNION BANK OF CALIFORNIA, N.A.,
by
/s/ J. Kevin Sampson
-------------------------------
Name: J. Kevin Sampson
Title: Vice President
VAN KAMPEN AMERICAN CAPITAL PRIME RATE
INCOME TRUST,
by
/s/ Jeffrey W. Maillet
-------------------------------
Name: Jeffrey W. Maillet
Title: Senior Vice President
& Director
<PAGE>
VAN KAMPEN AMERICAN CAPITAL SENIOR
INCOME TRUST,
by
/s/ Jeffrey W. Maillet
-------------------------------
Name: Jeffrey W. Maillet
Title: Senior Vice & Director
<PAGE>
EXHIBIT 10.3
TABLE OF CONTENTS
-----------------
(continued)
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
Schedules
Schedule I - Cash Equity Investors and Commitments
Schedule II - Management Stockholders
Schedule III - PCS Licenses
Schedule IV - Company Territory
Schedule 1.1 - Pre-Closing Expenditures
Schedule 2.1 - Description of AT&T PCS Contributed and Retained Licenses
Schedule 4.2 - Purchaser Consents
Schedule 4.6 - AT&T PCS FCC Proceedings
Schedule 5.2 - Company and Management Stockholder Consents
Schedule 5.7 - Equity Ownership
Schedule 5.12 - Minimum Build-Out Plan
Exhibits
Exhibit A - Form of Employment Agreement
Exhibit B - Form of Network Membership License Agreement
Exhibit C - Form of Resale Agreement
Exhibit D - Form of Restated Bylaws
Exhibit E - Form of Restated Certificate
Exhibit F - Form of Roaming Agreement
Exhibit G - Form of Stockholders Agreement
Exhibit H - Form of Opinion of Counsel to AT&T PCS
Exhibit I - Form of Opinion of FCC Counsel to AT&T PCS
Exhibit J - Form of Opinion of Counsel to Cash Equity Investors
Exhibit K - Form of Pledge Agreement
Exhibit L - Form of Opinion of Counsel to the Company and the Management Stockholders
Exhibit M - Form of Opinion of FCC Counsel to the Company
Exhibit N - Form of Assignment
</TABLE>
<PAGE>
SCHEDULE I
Cash Equity Investors
---------------------
<TABLE>
<CAPTION>
AGGREGATE INITIAL CASH
COMMITMENT # OF SHARES* CONTRIBUTION
<S> <C> <C> <C>
CB Capital Investors $ 49,732,147 $15,985,333
JP Morgan Capital Investment Corporation $ 37,796,428 $12,148,852
Sixty Wall Street SBIC Fund, L.P. $ 1,989,285 $ 639,414
Private Equity Investors III, L.P. $ 19,892,856 $ 6,394,132
Equity-Linked Investors-II $ 19,892,856 $ 6,394,132
Toronto Dominion Capital (USA) Inc. $ 9,946,428 $ 3,197,066
------------ ----------- -----------
Total $139,250,000 1,392,500 $44,758,929
ADDITIONAL CONTRIBUTION SCHEDULE**
--------------------------------
TOTAL 1ST
ANNIVERSARY
CB Capital Capital Investors $12,433,037
JP Morgan Capital Investment Corporation $ 9,449,107
Sixty Wall Street SBIC Fund, L.P. $ 497,321
Private Equity Investors III, L.P. $ 4,973,214
Equity-Linked Investors-II $ 4,973,214
Toronto Dominion Capital (USA) Inc. $ 2,486,607
-----------
Total $34,812,500
</TABLE>
_______________________
* The aggregate number of shares of Series C Preferred Stock to be issued to
the Cash Equity Investors shall be 1,392,500. The number of shares of Series
C Preferred Stock issued to each Cash Equity Investors shall be determined as
follows:
(i) to each holder of Bridge Notes, a number of shares equal to (x) the
product of the aggregate principal amount of all Bridge Notes held by such
holder multiplied by two (2), divided by (y) one hundred (100).
(ii) to each Cash Equity Investor (including each holder of Bridge Notes), a
number of shares equal to its pro rata share (based upon such Cash Equity
Investor's pro rata share of the Aggregate Commitments of all of the Cash
Equity Investors) of a number equal to the aggregate number of shares of
Series C Preferred Stock to be issued to the Cash Equity Investors minus the
aggregate number of shares to be issued to the Bridge Note holders in
accordance with paragraph (i) above.
**Additional Contributions shall be made within 20 business days after
receipt of written notice from the Company in accordance with the terms of
the Stockholders Agreement.
<PAGE>
<TABLE>
<CAPTION>
TOTAL 2ND
ANNIVERSARY
<S> <C>
CB Capital Capital Investors $12,433,037
JP Morgan Capital Investment Corporation $ 9,449,107
Sixty Wall Street SBIC Fund, L.P. $ 497,321
Private Equity Investors III, L.P. $ 4,973,214
Equity-Linked Investors-II $ 4,973,214
Toronto Dominion Capital (USA) Inc. $ 2,486,607
-----------
Total $34,812,500
TOTAL 3RD
ANNIVERSARY
Capital Capital Investors $ 8,880,740
JP Morgan Capital Investment Corporation $ 6,749,362
Sixty Wall Street SBIC Fund, L.P. $ 355,229
Private Equity Investors III, L.P. $ 3,552,296
Equity-Linked Investors-II $ 3,552,296
Toronto Dominion Capital (USA) Inc. $ 1,776,148
-----------
Total $24,866,071
</TABLE>
<PAGE>
SCHEDULE II
Management Stockholders
-----------------------
<TABLE>
<CAPTION>
AGGREGATE INITIAL CASH
COMMITMENT # OF SHARES CONTRIBUTION
<S> <C> <C> <C>
Michael E. Kalogris $500,000 5,000 $160,714
Steven R. Skinner 250,000 2,500 80,357
-------- ----- --------
Total $750,000 7,500 $241,071
</TABLE>
ADDITIONAL CONTRIBUTION SCHEDULE
--------------------------------
<TABLE>
<CAPTION>
TOTAL 1ST
Anniversary
<S> <C>
Michael E. Kalogris $125,000
Steven R. Skinner 62,500
--------
Total $187,500
</TABLE>
<TABLE>
<CAPTION>
TOTAL 2ND
Anniversary
<S> <C>
Michael E. Kalogris $125,000
Steven R. Skinner 62,500
--------
Total $187,500
</TABLE>
<TABLE>
<CAPTION>
TOTAL 3RD
Anniversary
<S> <C>
Michael E. Kalogris $ 89,286
Steven R. Skinner 44,643
--------
Total $133,929
</TABLE>
<PAGE>
SCHEDULE III
------------
UNITED STATES OF AMERICA
FEDERAL COMMUNICATIONS COMMISSION
RADIO STATION AUTHORIZATION
COMMERCIAL MOBILE RADIO SERVICES
PERSONAL COMMUNICATIONS SERVICE - BROADBAND
AT&T WIRELESS PCS INC. Call Sign: KNLF287
1105 Connecticut Avenue, N.W., 4th Floor Market: M044
Washington, D.C. 20036 KNOXVILLE
Channel Block: A
File Number: 00084-CW-L-95
- --------------------------------------------------------------------------------
The licensee hereof is authorized, for the period indicated, to construct and
operate radio transmitting facilities in accordance with the terms and
conditions hereinafter described. This authorization is subject to the
provisions of the Communications Act of 1934, as amended, subsequent Acts of
Congress, international treaties and agreements to which the United States is a
signatory, and all pertinent rules and regulations of the Federal Communications
Commission, contained in Title 47 of the U.S. Code of Federal Regulations.
________________________________________________________________________________
Initial Grant Date.........................JUNE 23, 1995
Five-year Build Out Date...................JUNE 23, 2000
Expiration Date............................JUNE 23, 2005
________________________________________________________________________________
CONDITIONS:
- ----------
Pursuant to Section 309(h) of the Communications Act of 1934, as amended, (47
U.S.C. (S)(S) 309(h)), this license is subject to the following conditions:
This license does not vest in the licensee any right to operate a station nor
any right in the use of frequencies beyond the term thereof nor in any other
manner than authorized herein. Neither this license nor the right granted
thereunder shall be assigned or otherwise transferred in violation of the
Communications Act of 1934, as amended (47 U.S.C. (S) 151, et seq.). This
license is subject in terms to the right of use or control conferred by Section
706 of the Communication Act of 1934, as amended (47 U.S.C. (S) 606).
Conditions continued on page 2.
_______________________________________________________________________________
WAIVERS:
- -------
No waivers associated with this authorization.
________________________________________________________________________________
<PAGE>
CONDITIONS:
- ----------
This authorization is subject to the condition that, in the event that systems
using the same frequencies are granted herein are authorized in an adjacent
foreign territory (Canada/United States), future coordination of any base
station transmitters within 72 km (45 miles) of the United States/Canada border
shall be required to eliminate any harmful interference to operations in the
adjacent foreign territory and to ensure continuance of equal access to the
frequencies by both countries.
This authorization is subject to the condition that the remaining balances of
the winning bid amount will be paid in accordance with Part 1 of the
Commission's rules, 47 C.F.R., Part 1.
<PAGE>
UNITED STATES OF AMERICA
FEDERAL COMMUNICATIONS COMMISSION
RADIO STATION AUTHORIZATION
COMMERCIAL MOBILE RADIO SERVICES
PERSONAL COMMUNICATIONS SERVICE - BROADBAND
AT&T WIRELESS PCS INC. Call Sign: KNLF221
1105 Connecticut Avenue, N.W., 4th Floor Market: M011
Washington, D.C. 20036 ATLANTA
Channel Block: A
File Number: 00018-CW-L-95
- -------------------------------------------------------------------------------
The licensee hereof is authorized, for the period indicated, to construct and
operate radio transmitting facilities in accordance with the terms and
conditions hereinafter described. This authorization is subject to the
provisions of the Communications Act of 1934, as amended, subsequent Acts of
Congress, international treaties and agreements to which the United States is a
signatory, and all pertinent rules and regulations of the Federal Communications
Commission, contained in Title 47 of the U.S. Code of Federal Regulations.
_______________________________________________________________________________
Initial Grant Date..........................JUNE 23, 1995
Five-year Build Out Date....................JUNE 23, 2000
Expiration Date.............................JUNE 23, 2005
________________________________________________________________________________
CONDITIONS:
- ----------
Pursuant to Section 309(h) of the Communications Act of 1934, as amended, (47
U.S.C. (S)(S) 309(h)), this license is subject to the following conditions:
This license does not vest in the licensee any right to operate a station nor
any right in the use of frequencies beyond the term thereof nor in any other
manner than authorized herein. Neither this license nor the right granted
thereunder shall be assigned or otherwise transferred in violation of the
Communications Act of 1934, as amended (47 U.S.C. (S) 151, et seq.). This
license is subject in terms to the right of use or control conferred by Section
706 of the Communication Act of 1934, as amended (47 U.S.C. (S) 606).
Conditions continued on page 2.
________________________________________________________________________________
WAIVERS:
- -------
No waivers associated with this authorization.
________________________________________________________________________________
<PAGE>
CONDITIONS:
- ----------
This authorization is subject to the condition that, in the event that systems
using the same frequencies are granted herein are authorized in an adjacent
foreign territory (Canada/United States), future coordination of any base
station transmitters within 72 km (45 miles) of the United States/Canada border
shall be required to eliminate any harmful interference to operations in the
adjacent foreign territory and to ensure continuance of equal access to the
frequencies by both countries.
This authorization is subject to the condition that the remaining balances of
the winning bid amount will be paid in accordance with Part 1 of the
Commission's rules, 47 C.F.R., Part 1.
<PAGE>
UNITED STATES OF AMERICA
FEDERAL COMMUNICATIONS COMMISSION
RADIO STATION AUTHORIZATION
COMMERCIAL MOBILE RADIO SERVICES
PERSONAL COMMUNICATIONS SERVICE - BROADBAND
AT&T WIRELESS PCS INC. Call Sign: KNLF245
1105 Connecticut Avenue, N.W., 4th Floor Market: M023
Washington, D.C. 20036 RICHMOND-NORFOLK
Channel Block: A
File Number: 00042-CW-L-95
- -------------------------------------------------------------------------------
The licensee hereof is authorized, for the period indicated, to construct and
operate radio transmitting facilities in accordance with the terms and
conditions hereinafter described. This authorization is subject to the
provisions of the Communications Act of 1934, as amended, subsequent Acts of
Congress, international treaties and agreements to which the United States is a
signatory, and all pertinent rules and regulations of the Federal Communications
Commission, contained in Title 47 of the U.S. Code of Federal Regulations.
________________________________________________________________________________
Initial Grant Date..........................JUNE 23, 1995
Five-year Build Out Date....................JUNE 23, 2000
Expiration Date.............................JUNE 23, 2005
________________________________________________________________________________
CONDITIONS:
- ----------
Pursuant to Section 309(h) of the Communications Act of 1934, as amended, (47
U.S.C. (S)(S) 309(h)), this license is subject to the following conditions:
This license does not vest in the licensee any right to operate a station nor
any right in the use of frequencies beyond the term thereof nor in any other
manner than authorized herein. Neither this license nor the right granted
thereunder shall be assigned or otherwise transferred in violation of the
Communications Act of 1934, as amended (47 U.S.C. (S) 151, et seq.). This
license is subject in terms to the right of use or control conferred by Section
706 of the Communication Act of 1934, as amended (47 U.S.C. (S) 606).
Conditions continued on page 2.
________________________________________________________________________________
WAIVERS:
- -------
No waivers associated with this authorization.
________________________________________________________________________________
<PAGE>
CONDITIONS:
- ----------
This authorization is subject to the condition that, in the event that systems
using the same frequencies are granted herein are authorized in an adjacent
foreign territory (Canada/United States), future coordination of any base
station transmitters within 72 km (45 miles) of the United States/Canada border
shall be required to eliminate any harmful interference to operations in the
adjacent foreign territory and to ensure continuance of equal access to the
frequencies by both countries.
This authorization is subject to the condition that the remaining balances of
the winning bid amount will be paid in accordance with Part 1 of the
Commission's rules, 47 C.F.R., Part 1.
<PAGE>
UNITED STATES OF AMERICA
FEDERAL COMMUNICATIONS COMMISSION
RADIO STATION AUTHORIZATION
COMMERCIAL MOBILE RADIO SERVICES
PERSONAL COMMUNICATIONS SERVICE - BROADBAND
AT&T WIRELESS PCS INC. Call Sign: KNLF220
1105 Connecticut Avenue, N.W., 4th Floor Market: M010
Washington, D.C. 20036 WASHINGTON-BALTIMORE
Channel Block: A
File Number: 00017-CW-L-95
- --------------------------------------------------------------------------------
The licensee hereof is authorized, for the period indicated, to construct and
operate radio transmitting facilities in accordance with the terms and
conditions hereinafter described. This authorization is subject to the
provisions of the Communications Act of 1934, as amended, subsequent Acts of
Congress, international treaties and agreements to which the United States is a
signatory, and all pertinent rules and regulations of the Federal Communications
Commission, contained in Title 47 of the U.S. Code of Federal Regulations.
________________________________________________________________________________
Initial Grant Date..........................JUNE 23, 1995
Five-year Build Out Date....................JUNE 23, 2000
Expiration Date.............................JUNE 23, 2005
________________________________________________________________________________
CONDITIONS:
- ----------
Pursuant to Section 309(h) of the Communications Act of 1934, as amended, (47
U.S.C. (S)(S) 309(h)), this license is subject to the following conditions:
This license does not vest in the licensee any right to operate a station nor
any right in the use of frequencies beyond the term thereof nor in any other
manner than authorized herein. Neither this license nor the right granted
thereunder shall be assigned or otherwise transferred in violation of the
Communications Act of 1934, as amended (47 U.S.C. (S) 151, et seq.). This
license is subject in terms to the right of use or control conferred by Section
706 of the Communication Act of 1934, as amended (47 U.S.C. (S) 606).
Conditions continued on page 2.
________________________________________________________________________________
WAIVERS:
- -------
No waivers associated with this authorization.
________________________________________________________________________________
<PAGE>
CONDITIONS:
- ----------
This authorization is subject to the condition that, in the event that systems
using the same frequencies are granted herein are authorized in an adjacent
foreign territory (Canada/United States), future coordination of any base
station transmitters within 72 km (45 miles) of the United States/Canada border
shall be required to eliminate any harmful interference to operations in the
adjacent foreign territory and to ensure continuance of equal access to the
frequencies by both countries.
This authorization is subject to the condition that the remaining balances of
the winning bid amount will be paid in accordance with Part 1 of the
Commission's rules, 47 C.F.R., Part 1.
<PAGE>
UNITED STATES OF AMERICA
FEDERAL COMMUNICATIONS COMMISSION
RADIO STATION AUTHORIZATION
COMMERCIAL MOBILE RADIO SERVICES
PERSONAL COMMUNICATIONS SERVICE - BROADBAND
AT&T WIRELESS PCS INC. Call Sign: KNLF212
1105 Connecticut Avenue, N.W., 4th Floor Market: M006
Washington, D.C. 20036 CHARLOTTE-GREENSBORO-
GREENVILLE-RALEIGH
Channel Block: A
File Number: 00009-CW-L-95
- --------------------------------------------------------------------------------
The licensee hereof is authorized, for the period indicated, to construct and
operate radio transmitting facilities in accordance with the terms and
conditions hereinafter described. This authorization is subject to the
provisions of the Communications Act of 1934, as amended, subsequent Acts of
Congress, international treaties and agreements to which the United States is a
signatory, and all pertinent rules and regulations of the Federal Communications
Commission, contained in Title 47 of the U.S. Code of Federal Regulations.
________________________________________________________________________________
Initial Grant Date............................JUNE 23, 1995
Five-year Build Out Date......................JUNE 23, 2000
Expiration Date...............................JUNE 23, 2005
________________________________________________________________________________
CONDITIONS:
- ----------
Pursuant to Section 309(h) of the Communications Act of 1934, as amended, (47
U.S.C. (S)(S) 309(h)), this license is subject to the following conditions:
This license does not vest in the licensee any right to operate a station nor
any right in the use of frequencies beyond the term thereof nor in any other
manner than authorized herein. Neither this license nor the right granted
thereunder shall be assigned or otherwise transferred in violation of the
Communications Act of 1934, as amended (47 U.S.C. (S) 151, et seq.). This
license is subject in terms to the right of use or control conferred by Section
706 of the Communication Act of 1934, as amended (47 U.S.C. (S) 606).
Conditions continued on page 2.
________________________________________________________________________________
WAIVERS:
- -------
No waivers associated with this authorization.
________________________________________________________________________________
<PAGE>
CONDITIONS:
- ----------
This authorization is subject to the condition that, in the event that systems
using the same frequencies are granted herein are authorized in an adjacent
foreign territory (Canada/United States), future coordination of any base
station transmitters within 72 km (45 miles) of the United States/Canada border
shall be required to eliminate any harmful interference to operations in the
adjacent foreign territory and to ensure continuance of equal access to the
frequencies by both countries.
This authorization is subject to the condition that the remaining balances of
the winning bid amount will be paid in accordance with Part 1 of the
Commission's rules, 47 C.F.R., Part 1.
<PAGE>
SCHEDULE IV
I. From Washington MTA BTA Market Designator
Charlottesville, VA B075
Cumberland, MD B100
Fredericksburg, VA B156
Harrisonburg, VA B183
Hagerstown, MD-Chambersburg, B179
PA,-Martinsburg, WV
Winchester, VA B479
II. From Richmond MTA
Danville, VA B104
Lynchburg, VA B266
Martinsville, VA B284
Richmond, VA B374
Roanoke, VA B376
Staunton-Waynesboro, VA B430
III. From Knoxville MTA
Kingsport, Johnson City, TN-Bristol VA B229
Middlesboro, TN B295
IV. From Atlanta MTA
Augusta, GA B026
Savannah, GA (Beaufort, Hampton and B410
Jasper Counties)
V. From Charlotte MTA
Anderson, SC B016
Ashville-Hendersonville, NC B020
Charleston, SC B072
Columbia, SC B091
Fayetteville-Lumbertan, NC B141
Florence, SC B147
Goldsboro-Kinston, NC B165
Greenville-Spartansburg, SC B177
Greenville-Washington, NC B176
Greenwood, SC B178
Hickory-Lenoir-Morgantan, NC B189
Jacksonville, NC B214
Myrtle Beach, SC B312
New Bern, NC B316
Orangeburg, SC B335
Roanoke Rapids, NC B377
Rocky Mount-Wilson, NC B382
Sumter, SC B436
Wilmington, NC B478
<PAGE>
ADDRESS FOR NOTICES
-------------------
CB Capital Investors
380 Madison Avenue, 12th Floor
New York, New York 10017
Attn: Arnie Chavkin
Tel: (212) 622-3100
Fax: (212) 622-3101
J.P. Morgan Investment Corporation
101 California Street, 38th Floor
San Francisco, CA 94111
Tel: (415) 954-3200
Fax: (415) 954-4737
Sixty Wall Street SBIC Fund, L.P.
101 California Street, 38th Floor
San Francisco, CA 94111
Attn: John Watkins
Tel: (415) 954-3200
Fax: (415) 954-4737
Private Equity Investors III, L.P.
540 Madison Avenue, 36th Floor
New York, New York 10022
Attn: Damon Ball
Tel: (212) 838-9191
Fax: (212) 838-9807
Equity-Linked Investors-II
540 Madison Avenue, 36th Floor
New York, New York 10022
Attn: Damon Ball
Tel: (212) 838-9191
Fax: (212) 838-9807
Toronto Dominion Capital (USA), Inc.
31 West 52nd Street
New York, New York 10019
Tel: (212) 468-0740
Fax: (212) 974-0429
<PAGE>
Toronto Dominion Capital (USA), Inc.
909 Fannin
Suite 1700
Houston, TX 77010
Attn: Martha Gariepy
Tel: (713) 653-8225
Fax: (713) 652-2647
<PAGE>
SCHEDULE 1.1
TRITON COMMUNICATIONS
PRE-CLOSING EXPENDITURES
<TABLE>
<CAPTION>
December
60 Day Optional
Requirement Period
----------- --------
<S> <C> <C>
. RF Engineering services with Wireless $1,312,500 (350 sites)
Facilities, Inc., to be used for:
- Preliminary system design (500 sites) $ 625,000
- Site design approval (50 sites) $ 187,500
. Site acquisition (including cell site equipment) and development services with Entel
Technologies, Inc. and Gearon & Company, Inc.
- Site acquisition (100 sites) $ 700,000 $2,100,000 (300 sites)
- Site zoning (50 sites) $ 350,000 $2,450,000 (350 sites)
. Spectrum clearing services with Entel
Technologies, Inc.
- Spectrum clearing (incumbent path $ 200,000 $1,000,000
verification, preliminary negotiations,
etc.)
. Triton's capital cost (including equipment purchases/leases) and support services required
for RF engineering and site acquisition i.e. drive test frequency with ComSearch, crane rental,
temporary office space, and company engineering, site acquisition and construction personnel.
$ 400,000 $675,000
------------ -------------
TOTALS $2,462,500 $7,537,500
</TABLE>
NOTE: In the event the deal does not close, Triton will deliver to AT&T
the following:
. Preliminary engineering system design for the minimum Phase I build
out schedule required for the 5-year FCC requirement
. RF design search rings for the priority build areas
. All cell site options and leases assignable to AT&T
. Incumbent path verifications for spectrum clearing
. All equipment purchased to support the build out
<PAGE>
SCHEDULE 2.1
DESCRIPTION OF PARTITIONED AREA AND DISAGGREGATED SPECTRUM
The Charlotte MTA has a population of 9,752,317./1/
AT&T proposes to assign the 20 MhZ of A Block broadband PCS spectrum
at 1850-1860 Mhz and 1930-1940 Mhz to TPLC in the following BTAs within the
Charlotte MTA:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
BTA BTA MARKET BTA
NAME DESIGNATOR POPULATION
- --------------------------------------------------------------------------------
<S> <C> <C>
Greenville-Spartanburg, SC BTA B177 788,212
- --------------------------------------------------------------------------------
Charleston, SCBTA B072 624,369
- --------------------------------------------------------------------------------
Fayetteville-Lumberton, NC BTA B141 571,328
- --------------------------------------------------------------------------------
Colombia SCBTA B091 568,754
- ------------------------------------------------------------------------------
Asheville-Hendersonville, NC BTA BO20 510,055
- ------------------------------------------------------------------------------
Anderson, SCBTA B016 305,120
- ------------------------------------------------------------------------------
Hickory-Lenoir-Morganton, NC BTA B189 292,409
- ------------------------------------------------------------------------------
Wilmington, NC BTA B478 249,711
- ------------------------------------------------------------------------------
Florence, SC BTA B147 239,208
- ------------------------------------------------------------------------------
Greenville-Washington NC BTA B176 218,937
- ------------------------------------------------------------------------------
Goldsboro-Kinston, NC BTA B165 217,319
- ------------------------------------------------------------------------------
Rocky Mount-Wilson, NC BTA B382 199,296
- ------------------------------------------------------------------------------
New Bern, NC BTA B316 154,955
- ------------------------------------------------------------------------------
Jacksonville, NC BTA B214 149,838
- ------------------------------------------------------------------------------
Sumter, SC BTA B436 149,524
- ------------------------------------------------------------------------------
Myrtle Beach, SC BTA B312 144,053
- ------------------------------------------------------------------------------
Orangeburg, SC BTA B335 114,458
- ------------------------------------------------------------------------------
Roanoke Rapids. NC BTA B377 76,314
- ------------------------------------------------------------------------------
Greenwood, SC BTA B178 68,435
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Total Population 5,642,295
- ------------------------------------------------------------------------------
</TABLE>
___________________
/1/ MTA and BTA population figures in this exhibit were taken from the April
1, 1990 U.S. Census, U.S. Department of Commerce, Bureau of Census, as
published in Summary of Licenses To Be Auctioned from the August 2, 1995
C Block Bidder Information Package.
<PAGE>
AT&T proposed to retain the 10 Mhz of A Block broadband PCS spectrum
at 1860-1865 Mhz and 1940-1945 Mhz in the following BTAs within the Charlotte
MTA:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
BTA BTA MARKET BTA
NAME DESIGNATOR POPULATION
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<S> <C> <C>
Greenville-Spartanburg, SC BTA B177 788,212
- --------------------------------------------------------------------------------
Charleston. SC BTA B072 624,369
- --------------------------------------------------------------------------------
Fayetteville-Lumberton, NC BTA B 141 571,328
- --------------------------------------------------------------------------------
Columbia, SC BTA B091 568,754
- --------------------------------------------------------------------------------
Asheville-Hendersonville, NC BTA B020 510,055
- --------------------------------------------------------------------------------
Anderson- SC BTA B016 305,120
- --------------------------------------------------------------------------------
Hickory-Lenoir-Morganton, NC BTA B189 292,409
- --------------------------------------------------------------------------------
Wilmington, NC BTA B478 249,711
- --------------------------------------------------------------------------------
Florence, SC BTA B147 239,208
- --------------------------------------------------------------------------------
Greenville-Washington, NC BTA B176 218,937
- --------------------------------------------------------------------------------
Goldsboro-Kinston, NC BTA B165 217,319
- --------------------------------------------------------------------------------
Rocky Mount-Wilson, NC BTA B382 199,296
- --------------------------------------------------------------------------------
New Bern, NC BTA B316 154,955
- --------------------------------------------------------------------------------
Jacksonville, NC BTA B214 149,838
- --------------------------------------------------------------------------------
Sumter, SC BTA B436 149,524
- --------------------------------------------------------------------------------
Myrtle Beach, SC BTA B312 144,053
- --------------------------------------------------------------------------------
Orangeburg, SC BTA B335 114,458
- --------------------------------------------------------------------------------
Roanoke Rapids, NC BTA B377 76,314
- --------------------------------------------------------------------------------
Greenwood, SC BTA B178 68,435
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Total Population 5,642,295
- --------------------------------------------------------------------------------
</TABLE>
AT&T proposed to retain the full 30 Mhz of A Block broadband PCS
spectrum in the following BTAs within the Charlotte MTA:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
BTA BTA MARKET BTA
MARKET NAME DESIGNATOR POPULATION
- --------------------------------------------------------------------------------
<S> <C> <C>
Charlotte-Gastonia, NC BTA B074 1,671,037
- --------------------------------------------------------------------------------
Greensboro-Winston-Salem-High Point, NC BTA B174 1,241,349
- --------------------------------------------------------------------------------
Raleigh-Durham, NC BTA B368 1,089,423
- --------------------------------------------------------------------------------
Burlington, NC BTA B062 108,213
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Total Population 4,110,022
- --------------------------------------------------------------------------------
</TABLE>
2
<PAGE>
AREA AND SPECTRUM TO BE ASSIGNED
Subsequent to the transaction described in the FCC Form 490, Triton
PCS License Company, Inc. will be the licensee of 20 Mhz of A Block broadband
PCS spectrum in the BTAs within the Charlotte MTA as follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
BTA BTA Spectrum
NAME MARKET DESIGNATOR (MHZ)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<S> <C> <C>
Greenville-Spartanburg, SC BTA Bl77 1850-1860/1930-1940
- --------------------------------------------------------------------------------
Charleston, SC BTA B072 850-1860/1930-1940
- --------------------------------------------------------------------------------
Fayetteville-Lumberton, NC BTA B141 850-1860/1930-1940
- --------------------------------------------------------------------------------
Columbia, SC BTA B091 850-1860/1930-1940
- --------------------------------------------------------------------------------
Asheville-Hendersonville, NC BTA B020 850-1860/1930-1940
- --------------------------------------------------------------------------------
Anderson, SC BTA B016 850-1860/1930-1940
- --------------------------------------------------------------------------------
Hickory-Lenoir-Morganton, NC BTA B189 850-1860/1930-1940
- --------------------------------------------------------------------------------
Wilmington, NC BTA B478 850-1860/1930-1940
- --------------------------------------------------------------------------------
Florence, SC BTA B147 850-1860/1930-1940
- --------------------------------------------------------------------------------
Greenville-Washington, NC BTA B176 950-1860/1930-1940
- --------------------------------------------------------------------------------
Goldsboro-Kinston, NC BTA B165 850-1860/1930-1940
- --------------------------------------------------------------------------------
Rocky Mount-Wilson, NC BTA B382 850-1860/1930-1940
- --------------------------------------------------------------------------------
New Bern, NC BTA B316 850-186011930-1940
- --------------------------------------------------------------------------------
Jacksonville, NC BTA B214 850-1860/1930-1940
- --------------------------------------------------------------------------------
Sumter, SC BTA B436 850-1860/1930-1940
- --------------------------------------------------------------------------------
Myrtle Beach, SC BTA B312 850-1860/1930-1940
- --------------------------------------------------------------------------------
Orangeburg, SC BTA B335 850-1860/1930-1940
- --------------------------------------------------------------------------------
Roanoke Rapids, NC BTA B377 850-1860/1930-1940
- --------------------------------------------------------------------------------
Greenwood, SC BTA B178 850-1860/1930-1940
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
3
<PAGE>
AREA AND SPECTRUM TO BE ASSIGNED
Subsequent to the transaction described in the FCC Form 490, AT&T
Wireless PCS Inc. will be the licensee of 10 Mhz of A Block broadband PCS
spectrum in the BTAs within the Charlotte MTA as follows:/2/
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
BTA BTA MARKET SPECTRUM
NAME DESIGNATOR (MHZ)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<S> <C> <C>
Greenville-Spartanburg, SC BTA Bl77 1860-1865/1940-1945
- --------------------------------------------------------------------------------
Charleston, SC BTA B072 1860-1865/1940-1945
- --------------------------------------------------------------------------------
Fayetteville-Lumberton, NC BTA B141 1860-1865/1940-1945
- --------------------------------------------------------------------------------
Columbia, SC BTA B091 1860-1865/1940-1945
- --------------------------------------------------------------------------------
Asheville-Hendersonville, NC BTA B020 1860-1865/1940-1945
- --------------------------------------------------------------------------------
Anderson, SC BTA B016 1860-1865/1940-1945
- --------------------------------------------------------------------------------
Hickory-Lenoir-Morganton, NC BTA B189 1860-1865/1940-1945
- --------------------------------------------------------------------------------
Wilmington, NC BTA B478 1860-1865/1940-1945
- --------------------------------------------------------------------------------
Florence, SC BTA B147 1860-1865/1940-1945
- --------------------------------------------------------------------------------
Greenville-Washington, NC BTA B176 1860-1865/1940-1945
- --------------------------------------------------------------------------------
Goldsboro-Kinston, NC BTA B165 1860-1865/1940-1945
- --------------------------------------------------------------------------------
Rocky Mount-Wilson, NC BTA B382 1860-1865/1940-1945
- --------------------------------------------------------------------------------
New Bern, NC BTA B316 1860-1865/1940-1945
- --------------------------------------------------------------------------------
Jacksonville, NC BTA B214 1860-1865/1940-1945
- --------------------------------------------------------------------------------
Sumter, SC BTA B436 1860-1865/1940-1945
- --------------------------------------------------------------------------------
Myrtle Beach, SC BTA B312 1860-1865/1940-1945
- --------------------------------------------------------------------------------
Orangeburg, SC BTA B335 1860-1865/1940-1945
- --------------------------------------------------------------------------------
Roanoke Rapids, NC BTA B377 1860-1865/1940-1945
- --------------------------------------------------------------------------------
Greenwood, SC BTA B178 1860-1865/1940-1945
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
______________________
/2/ AT&T Wireless PCS Inc. will also be the licensee of a discrete 30 Mhz band
of spectrum in designated BTAs as described in a companion 600 Form which
is part of this application package.
4
<PAGE>
AREA AND SPECTRUM TO BE ASSIGNED
Subsequent to the transaction described in the FCC Form 490, AT&T
Wireless PCS Inc. will be the licensee of the 30 Mhz of A Block broadband
PCS spectrum in the BTAs within the Charlotte MTA as follows:/3/
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
BTA BTA MARKET BTA
NAME DESIGNATOR POPULATION
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Charlotte-Gastonia, NC BTA B074 1860-1865/1940-1945
- --------------------------------------------------------------------------------------------------
Greensboro-Winston-Salem-High Point, NC BTA B174 1860-1865/1940-1945
- --------------------------------------------------------------------------------------------------
Raleigh-Durham, NC BTA B368 1860-1865/1940-1945
- --------------------------------------------------------------------------------------------------
Burlington, NC BTA B062 1860-1865/1940-1945
- --------------------------------------------------------------------------------------------------
</TABLE>
_________________________
/3/ AT&T Wireless PCS Inc. will also be the licensee of a descrete 10 Mhz band
of spectrum in designated BTAs as described in a companion 600 Form which
is part of this application package.
5
<PAGE>
DESCRIPTION OF PARTITIONED AREA AND DISAGGREGATED SPECTRUM
The Washington-Baltimore MTA has a population of 7,777,875./4/
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
BTA BTA MARKET BTA
NAME DESIGNATOR POPULATION
- -------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
Hagerstown, MD-Chambersburg, PA-Martinsburg, WV BTAC B179 327,693
- -------------------------------------------------------------------------------------------------
Charlottesville, VA BTA B075 190,128
- -------------------------------------------------------------------------------------------------
Cumberland, MD BTA B100 156,707
- -------------------------------------------------------------------------------------------------
Winchester, VA BTA B479 137,549
- -------------------------------------------------------------------------------------------------
Harrisonburg, VA BTA B183 128,910
- -------------------------------------------------------------------------------------------------
Fredericksburg, VA BTA B156 124,654
- -------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------
Total Population 1,065,641
- -------------------------------------------------------------------------------------------------
</TABLE>
__________________________
/4/ MTA and BTA population figures in this exhibit were taken from the April 1,
1990 U.S. Census, U.S. Department of Commerce, Bureau of Census, as
published in Summary of Licenses To Be Auctioned from the August 2, 1995 C
Block Bidder Information Package.
6
<PAGE>
AT&T proposed to retain the 10 Mhz of B Block broadband PCS
spectrum at 1880-1885 Mhz and 1960-1965 Mhz in the following BTAs
within the Washington-Baltimore MTA:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
BTA BTA MARKET BTA
NAME DESIGNATOR POPULATION
- -------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
Hagerstown, MD-Chambersburg, PA-Martinsburg, WV BTAC B179 327,693
- -------------------------------------------------------------------------------------------------
Charlottesville, VA BTA B075 190,128
- -------------------------------------------------------------------------------------------------
Cumberland, MD BTA B100 156,707
- -------------------------------------------------------------------------------------------------
Winchester, VA BTA B479 137,549
- -------------------------------------------------------------------------------------------------
Harrisonburg, VA BTA B183 128,910
- -------------------------------------------------------------------------------------------------
Fredericksburg, VA BTA B156 124,654
- -------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------
Total Population 1,065,641
- -------------------------------------------------------------------------------------------------
</TABLE>
AT&T proposed to retain the full 30 Mhz of B Block broadband PCS
spectrum in the following BTAs within the Washington-Baltimore MTA:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
BTA BTA MARKET BTA
NAME DESIGNATOR POPULATION
- -------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
Washington, DC BTA B461 4,118,628
- -------------------------------------------------------------------------------------------------
Baltimore, MD BTA B029 2,430,563
- -------------------------------------------------------------------------------------------------
Salisbury, MD BTA B398 163,043
- -------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------
Total Population
- -------------------------------------------------------------------------------------------------
</TABLE>
7
<PAGE>
AREA AND SPECTRUM TO BE ASSIGNED
Subsequent to the transaction described in the FCC Form 490,
Triton PCS License Company, Inc. will be the licensee of 20 Mhz of B Block
broadband PCS spectrum in the BTAs within the Washington-Baltimore MTA as
follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
BTA BTA MARKET SPECTRUM
NAME DESIGNATOR (MHZ)
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
Hagerstown, MD-Chambersburg, PA-Martinsburg, WV BTAC B179 1880-1885/1960-1965
- --------------------------------------------------------------------------------------------------------
Charlottesville, VA BTA B075 1880-1885/1960-1965
- --------------------------------------------------------------------------------------------------------
Cumberland, MD BTA B100 1880-1885/1960-1965
- --------------------------------------------------------------------------------------------------------
Winchester, VA BTA B479 1880-1885/1960-1965
- --------------------------------------------------------------------------------------------------------
Harrisonburg, VA BTA B183 1880-1885/1960-1965
- --------------------------------------------------------------------------------------------------------
Fredericksburg, VA BTA B156 1880-1885/1960-1965
- --------------------------------------------------------------------------------------------------------
</TABLE>
8
<PAGE>
AREA AND SPECTRUM TO BE ASSIGNED
Subsequent to the transaction described in the FCC Form 490, AT&T
Wireless PCS Inc. will be the licensee of 10 Mhz of B Block broadband PCS
spectrum in the BTAs within the Washington-Baltimore MTA as follows:/5/
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
BTA BTA MARKET SPECTRUM
NAME DESIGNATOR (MHZ)
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
Hagerstown, MD-Chambersburg, PA-Martinsburg, WV BTAC B179 1880-1885/1960-1965
- --------------------------------------------------------------------------------------------------------
Charlottesville, VA BTA B075 1880-1885/1960-1965
- --------------------------------------------------------------------------------------------------------
Cumberland, MD BTA B100 1880-1885/1960-1965
- --------------------------------------------------------------------------------------------------------
Winchester, VA BTA B479 1880-1885/1960-1965
- --------------------------------------------------------------------------------------------------------
Harrisonburg, VA BTA B183 1880-1885/1960-1965
- --------------------------------------------------------------------------------------------------------
Fredericksburg, VA BTA B156 1880-1885/1960-1965
- --------------------------------------------------------------------------------------------------------
</TABLE>
_____________________
/5/ AT&T Wireless PCS Inc. will also be the licensee of a discrete 30 Mhz band
of spectrum in designated BTAs as described in a companion 600 Form which
is part of this application package.
9
<PAGE>
AREA AND SPECTRUM TO BE ASSIGNED
Subsequent to the transaction described in the FCC Form 490, AT&T
Wireless PCS Inc. will be the licensee of the 30 Mhz of B Block broadband
PCS spectrum in the BTAs within the Washington-Baltimore MTA as follows:/6/
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
BTA BTA MARKET SPECTRUM
NAME DESIGNATOR (MHZ)
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
Washington, DC BTA B461 1870-1885/1950-1965
- -----------------------------------------------------------------------------------------------------
Baltimore, MD BTA B029 1870-1885/1950-1965
- -----------------------------------------------------------------------------------------------------
Salisbury, MD BTA B398 1870-1885/1950-1965
- -----------------------------------------------------------------------------------------------------
</TABLE>
_________________________
/6/ AT&T Wireless PCS Inc. will also be the licensee of a discrete 10 Mhz band
of spectrum in designated BTAs as described in a companion 600 Form which
is part of this application package.
10
<PAGE>
DESCRIPTION OF PARTITIONED AREA AND DISAGGREGATED SPECTRUM
The Atlanta MTA has a population of 6,942,084/7/
AT&T proposes to assign the 20 Mhz of A Block broadband PCS spectrum
at 1850-1860 Mhz and 1930-1940 Mhz to TPLC in the following areas within
the Atlanta MTA:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
AREA AREA AREA
NAME DESIGNATOR/8/ POPULATION
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Augusta, GA BTA B026 521,822
- --------------------------------------------------------------------------------------------------
Beaufort County, SC/9/ 86,425
- --------------------------------------------------------------------------------------------------
Hampton County, SC 18,191
- --------------------------------------------------------------------------------------------------
Jasper County, SC 15,487
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
Total Population 641,925
- --------------------------------------------------------------------------------------------------
</TABLE>
AT&T proposes to retain the 10 Mhz of A Block broadband PCS spectrum
at 1860-1865 Mhz and 1940-1945 Mhz in the following areas within the
Atlanta MTA:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
AREA AREA AREA
NAME DESIGNATOR/10/ POPULATION
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Augusta, GA BTA B026 521,822
- --------------------------------------------------------------------------------------------------
Beaufort County, SC/11/ 86,425
- --------------------------------------------------------------------------------------------------
</TABLE>
_______________________
/7/ MTA and BTA population figures in this exhibit were taken from the
April 1, 1990 U.S. Census, U.S. Department of Commerce, Bureau of
Census, as published in Summary of Licenses To Be Auctioned from the
August 2, 1995 C Block Bidder Information Package. Population figures
for sub-markets other than MTAs and BTAs were taken from the 1990
Census. County population figures are from the April 1, 1990 Census
data.
/8/ No "area designator" has been provided for counties since no FCC
reference exists therefor.
/9/ The South Carolina counties of Beaufort, Hampton and Jasper are
counties within the Savannah BTA (B410).
/10/ No "area designator" has been provided for counties since no FCC
reference exists therefor.
11
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
AREA AREA AREA
NAME DESIGNATOR/10/ POPULATION
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
- --------------------------------------------------------------------------------------------------
Hampton County, SC 18,191
- --------------------------------------------------------------------------------------------------
Jasper County, SC 15,487
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
Total Population 641,925
- --------------------------------------------------------------------------------------------------
</TABLE>
________________
/11/ The South Carolina counties of Beaufort, Hampton and Jasper are
counties within the Savannah BTA (B410).
12
<PAGE>
AT&T proposes to retain the full 30 Mhz of A Block broadband PCS
spectrum in the following BTA and/or counties within the Atlanta MTA:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
AREA AREA AREA
NAME DESIGNATOR POPULATION
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Atlanta, GA BTA B024 3,197,171
- --------------------------------------------------------------------------------------------------
Macon-Warner Robins, GA BTA B271 589,208
- --------------------------------------------------------------------------------------------------
Chattanooga, TN BTA B076 510,860
- --------------------------------------------------------------------------------------------------
Columbus, GA BTA B092 342,333
- --------------------------------------------------------------------------------------------------
Albany-Tifton, BA BTA B006 324,899
- --------------------------------------------------------------------------------------------------
Opelika-Auburn, AL BTA B334 124,022
- --------------------------------------------------------------------------------------------------
Rome, GA BTA B384 115,066
- --------------------------------------------------------------------------------------------------
Dalton, GA BTA B102 98,609
- --------------------------------------------------------------------------------------------------
Clevelan,d TN BTA B085 87,355
- --------------------------------------------------------------------------------------------------
La Grange, GA BTA B237 64,164
- --------------------------------------------------------------------------------------------------
Gainesville, GA BTA B160 170,365
- --------------------------------------------------------------------------------------------------
Athens, GA BTA B022 166,0340
- --------------------------------------------------------------------------------------------------
Appling Count, GA/12/ 15,744
- --------------------------------------------------------------------------------------------------
Byran County, GA 15,438
- --------------------------------------------------------------------------------------------------
Bulloch County, GA 43,125
- --------------------------------------------------------------------------------------------------
Candler County, GA 7,744
- --------------------------------------------------------------------------------------------------
Chatham County, GA 216,935
- --------------------------------------------------------------------------------------------------
Effingham County, GA 235,687
- --------------------------------------------------------------------------------------------------
Emanuel County, GA 20,546
- --------------------------------------------------------------------------------------------------
Evans County, GA 8,724
- --------------------------------------------------------------------------------------------------
Jeff Davis County, GA 12,032
- --------------------------------------------------------------------------------------------------
Liberty County, GA 52,745
- --------------------------------------------------------------------------------------------------
Long County, GA 6,202
- --------------------------------------------------------------------------------------------------
Montgomery County, GA 7,163
- --------------------------------------------------------------------------------------------------
Screven County, GA 13,842
- --------------------------------------------------------------------------------------------------
Tattnall County, GA 17,722
- --------------------------------------------------------------------------------------------------
Toombs County, GA 24,072
- --------------------------------------------------------------------------------------------------
Wayne County, GA 22,356
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
Total Population 6,300,159
- --------------------------------------------------------------------------------------------------
</TABLE>
__________
/12/ The counties listed are all the counties within the Savannah BTA
(B410) except for the South Carolina counties of Beaufort, Hampton and
Jasper.
13
<PAGE>
AREA AND SPECTRUM TO BE ASSIGNED
Subsequent to the transaction described in the FCC Form 490, Triton
PCS Licensee Company, Inc. will be the licensee of 20 Mhz of A Block broadband
PCS spectrum in the areas within the Atlanta MTA as follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
AREA AREA SPECTRUM
NAME DESIGNATOR (MHZ)
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Augusta, GA BTA B026 1850-1860/1930-1940
- --------------------------------------------------------------------------------------------------
Beaufort County, SC/13/ 1850-1860/1930-1940
- --------------------------------------------------------------------------------------------------
Hampton County, SC 1850-1860/1930-1940
- --------------------------------------------------------------------------------------------------
Jasper County, SC 1850-1860/1930-1940
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
</TABLE>
________________
/13/ The South Carolina counties of Beaufort, Hampton and Jasper are
counties within the Savannah BTA (B410).
14
<PAGE>
AREA AND SPECTRUM TO BE ASSIGNED
Subsequent to the transaction described in the FCC Form 490, AT&T
Wireless PCS Inc. will be the licensee of 10 Mhz of A Block broadband PCS
spectrum in the areas within the Atlanta MTA as follows:/14/
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
AREA AREA SPECTRUM
NAME DESIGNATOR (MHZ)
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Augusta, GA BTA B026 1850-1865/1940-1945
- --------------------------------------------------------------------------------------------------
Beaufort County, SC/15/ 1850-1865/1940-1945
- --------------------------------------------------------------------------------------------------
Hampton County, SC 1850-1865/1940-1945
- --------------------------------------------------------------------------------------------------
Jasper County, SC 1850-1865/1940-1945
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
</TABLE>
___________________
/14/ AT&T Wireless PCS Inc. will also be the license of a discrete 30 MHz
band of spectrum in designated areas as described in a companion 600
Form which is part of this application package.
/15/ The South Carolina counties of Beaufort, Hampton and Jasper are
counties within the Savannah BTA (B410).
15
<PAGE>
AREA AND SPECTRUM TO BE ASSIGNED
Subsequent to the transaction described in the FCC Form 490, AT&T
Wireless PCS Inc. will be the licensee of the 30 Mhz of A Block broadband PCS
spectrum in the areas within the Atlanta MTA as follows:/16/
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
AREA NAME AREA DESIGNATION SPECTRUM (MHZ)
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
Atlanta, GA BTA B024 1850-1865/1930-1945
- -------------------------------------------------------------------------------------------------
Macon-Warner Robins, GA BTA B271 1850-1865/1930-1945
- -------------------------------------------------------------------------------------------------
Chattanooga, TN BTA B076 1850-1865/1930-1945
- -------------------------------------------------------------------------------------------------
Columbus, GA BTA B092 1850-1865/1930-1945
- -------------------------------------------------------------------------------------------------
Albany-Tifton, BA BTA B006 1850-1865/1930-1945
- -------------------------------------------------------------------------------------------------
Opelika-Auburn, AL BTA B334 1850-1865/1930-1945
- -------------------------------------------------------------------------------------------------
Rome, GA BTA B384 1850-1865/1930-1945
- -------------------------------------------------------------------------------------------------
Dalton, GA BTA B102 1850-1865/1930-1945
- -------------------------------------------------------------------------------------------------
Clevelan,d TN BTA B085 1850-1865/1930-1945
- -------------------------------------------------------------------------------------------------
La Grange, GA BTA B237 1850-1865/1930-1945
- -------------------------------------------------------------------------------------------------
Gainesville, GA BTA B160 1850-1865/1930-1945
- -------------------------------------------------------------------------------------------------
Athens, GA BTA B022 1850-1865/1930-1945
- -------------------------------------------------------------------------------------------------
Appling Count, GA/17/ 1850-1865/1930-1945
- -------------------------------------------------------------------------------------------------
Byran County, GA 1850-1865/1930-1945
- -------------------------------------------------------------------------------------------------
Bulloch County, GA 1850-1865/1930-1945
- -------------------------------------------------------------------------------------------------
Candler County, GA 1850-1865/1930-1945
- -------------------------------------------------------------------------------------------------
Chatham County, GA 1850-1865/1930-1945
- -------------------------------------------------------------------------------------------------
Effingham County, GA 1850-1865/1930-1945
- -------------------------------------------------------------------------------------------------
Emanuel County, GA 1850-1865/1930-1945
- -------------------------------------------------------------------------------------------------
Evans County, GA 1850-1865/1930-1945
- -------------------------------------------------------------------------------------------------
Jeff Davis County, GA 1850-1865/1930-1945
- -------------------------------------------------------------------------------------------------
Liberty County, GA 1850-1865/1930-1945
- -------------------------------------------------------------------------------------------------
Long County, GA 1850-1865/1930-1945
- -------------------------------------------------------------------------------------------------
Montgomery County, GA 1850-1865/1930-1945
- -------------------------------------------------------------------------------------------------
Screven County, GA 1850-1865/1930-1945
- -------------------------------------------------------------------------------------------------
Tattnall County, GA 1850-1865/1930-1945
- -------------------------------------------------------------------------------------------------
Toombs County, GA 1850-1865/1930-1945
- -------------------------------------------------------------------------------------------------
Wayne County, GA 1850-1865/1930-1945
- -------------------------------------------------------------------------------------------------
</TABLE>
___________________
/16/ AT&T Wireless PCS Inc. will also be the licensee of a discrete 10 Mhz
band of spectrum in designated areas as described in a companion 600
Form which is part of this application package.
/17/ The counties listed are all the counties within the Savannah BTA
(B410) except for the South Carolina counties of Beaufort, Hampton and
Jasper.
16
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
AREA NAME AREA DESIGNATION SPECTRUM (MHZ)
- --------------------------------------------------------------------------------
<S> <C> <C>
Wayne County, GA 1850-1865/1930-1945
- --------------------------------------------------------------------------------
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
BTA BTA MARKET BTA
NAME DESIGNATOR POPULATION
- -------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
Kingsport-Johnston City, TN-Bristol, VA/TN BTA B229 652,639
- -------------------------------------------------------------------------------------------------
Middlesboro-Harlan, KY BTA B295 121,217
- -------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------
Total Population 773,856
- -------------------------------------------------------------------------------------------------
</TABLE>
AT&T proposes to retain the 10 Mhz of A Block broadband PCS spectrum at
1860-1865 Mhz and 1940-1945 Mhz in the following BTAs within the Knoxville MTA:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
BTA BTA MARKET BTA
NAME DESIGNATOR POPULATION
- -------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
Kingsport-Johnston City, TN-Bristol, VA/TN BTA B229 652,639
- -------------------------------------------------------------------------------------------------
Middlesboro-Harlan, KY BTA B295 121,217
- -------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------
Total Population 773,856
- -------------------------------------------------------------------------------------------------
</TABLE>
_______________________
/18/ MTA and BTA population figures in this exhibit were taken from the April
1, 1990 U.S. Census. U.S. Department of Commerce, Bureau of Census, as
published in Summary of Licenses To Be Auctioned from the August 2, 1995 C
Block Bidder Information Package.
18
<PAGE>
AT&T proposes to retain the full 30 Mhz of A Block broadband PCS
spectrum in the following BTAs within the Knoxville MTA:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
BTA BTA MARKET BTA
NAME DESIGNATOR POPULATION
- -------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
Knoxville, TB BTA B232 948,055
- -------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------
Total Population 948,055
- -------------------------------------------------------------------------------------------------
</TABLE>
19
<PAGE>
AREA AND SPECTRUM TO BE ASSIGNED
Subsequent to the transaction described in the FCC Form 490, Triton
PCS License Company, Inc. will be the licensee of 20 Mhz of A Block broadbands
PCS spectrum in the BTAs within the Knoxville MTA as follows:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
BTA BTA MARKET BTA
NAME DESIGNATOR POPULATION
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
Kingsport-Johnston City, TN-Bristol, VA/TN BTA B229 1850-1860/1930-1940
- ---------------------------------------------------------------------------------------------------
Middlesboro-Harlan, KY BTA B295 1850-1860/1930-1940
- ---------------------------------------------------------------------------------------------------
</TABLE>
AREA AND SPECTRUM TO BE ASSIGNED
Subsequent to the transaction described in the FCC Form 490, AT&T
Wireless PCS Inc. will be the licensee of 10 MHz of A Block broadband PCS
spectrum in the BTAs within the Knoxville MTA as follows:/19/
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
BTA BTA MARKET
NAME DESIGNATOR SPECTRUM (MHZ)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
Kingsport-Johnson City, TN - Bristol, VA/TN BTA B229 1860-1865/1940-1945
- -------------------------------------------------------------------------------------------------------
Middlesboro-Harlan, KYBTA B295 1860-1865/1940-1945
- -------------------------------------------------------------------------------------------------------
</TABLE>
________________________
/19/ AT&T Wireless PCS Inc. will also be the licensee of a discrete 30 MHz band
of spectrum in designated BTAs as described in a companion 600 Form which
is part of this application package.
20
<PAGE>
AREA AND SPECTRUM TO BE ASSIGNED
Subsequent to the transaction described in the FCC Form 490, AT&T
Wireless PCS Inc. will be the licensee of 30 MHz of A Block broadband PCS
spectrum in the BTAs within the Knoxville MTA as follows:/20/
<TABLE>
<CAPTION>
BTA BTA MARKET
NAME DESIGNATOR SPECTRUM (MHZ)
- --------------------------------------------------------------------------------
<S> <C> <C>
Knoxville TN BTA B232 1850-1865/1930-1945
- --------------------------------------------------------------------------------
</TABLE>
___________________
/20/ AT&T Wireless PCS Inc. will also be the licensee of a discrete 30 MHz band
of spectrum in designated BTAs as described in a companion 600 Form which
is part of this application package.
<PAGE>
DESCRIPTION OF PARTITIONED AREA AND DISAGGREGATED SPECTRUM
The Richmond-Norfolk MTA has a population of 3,846,210./21/
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
BTA BTA MARKET
NAME DESIGNATOR BTA POPULATION
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
Richmond-Petersburg, VA BTA B374 1,090,869
- -----------------------------------------------------------------------------------------------------
Roanoak, VA BTA B376 609,215
- -----------------------------------------------------------------------------------------------------
Danville, VA BTA B104 165,434
- -----------------------------------------------------------------------------------------------------
Lynchburg, VA BTA B266 154,497
- -----------------------------------------------------------------------------------------------------
Staunton-Waynesboro, VA BTA B430 100,322
- -----------------------------------------------------------------------------------------------------
Martinsville, VA BTA B284 90,577
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
Total Population 2,210,914
- -----------------------------------------------------------------------------------------------------
</TABLE>
__________________
/21/ MTA and BTA population figures in this exhibit were taken from the
April 1, 1990 U.S. Census, U.S. Department of Commerce, Bureau of
Census, as published in Summary of Licenses To Be Auctioned fro the
August 2, 1995 C Block Bidder Information Package.
<PAGE>
AT&T proposes to retain the 10 MHz of A Block broadband PCS spectrum
at 1860-1865 MHz and 1940-1945 MHz in the following BTAs within the Richmond-
Norfolk MTA.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
BTA BTA MARKET
NAME DESIGNATOR BTA POPULATION
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
Richmond-Petersburg, VA BTA B374 1,090,869
- -----------------------------------------------------------------------------------------------------
Roanoak, VA BTA B376 609,215
- -----------------------------------------------------------------------------------------------------
Danville, VA BTA B104 165,434
- -----------------------------------------------------------------------------------------------------
Lynchburg, VA BTA B266 154,497
- -----------------------------------------------------------------------------------------------------
Staunton-Waynesboro, VA BTA B430 100,322
- -----------------------------------------------------------------------------------------------------
Martinsville, VA BTA B284 90,577
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
Total Population 2,210,914
- -----------------------------------------------------------------------------------------------------
</TABLE>
AT&T proposes to retain the full 30 MHz of A Block broadband PCS
spectrum in the following BTAs within the Richmond-Norfolk MTA:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
BTA BTA MARKET
NAME DESIGNATOR BTA POPULATION
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
Norfolk-Virginia Beach-Newport News-Hampton VA B324 1,635,296
BTA
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
Total Population 1,635,296
- -----------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
AREA AND SPECTRUM TO BE ASSIGNED
Subsequent to the transaction described in the FCC Form 490, AT&T
Wireless PCS Inc. will be the licensee of 10 Mhz of A Block broadband PCS
spectrum in the BTAs within the Richmond-Norfolk MTA as follows:/22/
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
BTA BTA MARKET
NAME DESIGNATOR BTA POPULATION
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
Richmond-Petersburg, VA BTA B374 1860-1865/1940-1945
- -----------------------------------------------------------------------------------------------------
Roanoak, VA BTA B376 1860-1865/1940-1945
- -----------------------------------------------------------------------------------------------------
Danville, VA BTA B104 1860-1865/1940-1945
- -----------------------------------------------------------------------------------------------------
Lynchburg, VA BTA B266 1860-1865/1940-1945
- -----------------------------------------------------------------------------------------------------
Staunton-Waynesboro, VA BTA B430 1860-1865/1940-1945
- -----------------------------------------------------------------------------------------------------
Martinsville, VA BTA B284 1860-1865/1940-1945
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
</TABLE>
___________________
/22/ AT&T Wireless PCS Inc. will also be the licensee of a discrete 30 MHz
band of spectrum in designated BTAs as described in a companion 600
Form which is part of this application package.
<PAGE>
AREA AND SPECTRUM TO BE ASSIGNED
Subsequent to the transaction described in the FCC Form 490, AT&T
Wireless PCS Inc. will be the licensee of 30 MHz of A Block broadband PCS
spectrum in the BTAs within the Knoxville MTA as follows:/23/
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
BTA BTA MARKET
NAME DESIGNATOR SPECTRUM (MHZ)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
Norfolk-Virginia Beach-Newport New-Hampton VA BTA B232 1850-1865/1930-1945
- -----------------------------------------------------------------------------------------------------
</TABLE>
__________________
/23/ AT&T Wireless PCS Inc. will also be the licensee of a discrete 10 MHz
band of spectrum in designated BTAs as described in a companion 600
Form which is part of this application package.
<PAGE>
AREA AND SPECTRUM TO BE ASSIGNED
Subsequent to the transaction described in the FCC Form 490, AT&T
Wireless PCS Inc. will be the licensee of 20 Mhz of A Block broadband PCS
spectrum in the BTAs within the Richmond-Norfolk MTA as follows:/24/
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
BTA BTA MARKET
NAME DESIGNATOR BTA POPULATION
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
Richmond-Petersburg, VA BTA B374 1860-1865/1940-1945
- -----------------------------------------------------------------------------------------------------
Roanoak, VA BTA B376 1860-1865/1940-1945
- -----------------------------------------------------------------------------------------------------
Danville, VA BTA B104 1860-1865/1940-1945
- -----------------------------------------------------------------------------------------------------
Lynchburg, VA BTA B266 1860-1865/1940-1945
- -----------------------------------------------------------------------------------------------------
Staunton-Waynesboro, VA BTA B430 1860-1865/1940-1945
- -----------------------------------------------------------------------------------------------------
Martinsville, VA BTA B284 1860-1865/1940-1945
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
</TABLE>
________________
/24/ AT&T Wireless PCS Inc. will also be the licensee of a discrete 30 MHz
band of spectrum in designated BTAs as described in a companion 600
Form which is part of this application package.
<PAGE>
SCHEDULE 4.2
Purchaser Consents
------------------
AT&T PCS Consents
- -----------------
The execution, delivery and performance of the Agreement will or may
require the following consents, approvals and reviews:
1. The Federal Communications Commission.
2. The Federal Trade Commission/Department of Justice.
3. Various Governmental Authorities with respect to Franchise Laws.
Cash Equity Investor Consents
- -----------------------------
The execution, delivery and performance of the Agreement will or may
require the following consents, approvals and reviews:
1. The Federal Communications Commission.
2. The Federal Trade Commission/Department of Justice.
3. Various Governmental Authorities with respect to Franchise Laws.
<PAGE>
SCHEDULE 4.6
------------
In Re Applications of Mercury PCS II, L.L.C. DA 97-1782 (WTB Aug. 21 1997), the
Wireless Telecommunication Bureau of the FCC indicated that it had commenced a
general investigation into certain bidding tactics allegedly used during the PCS
auctions. In addition, the Department of Justice has initiated a similar
investigation. AT&T PCS has provided information in connection with its PCS
bidding tactics and contacts with other PCS bidders to both agencies.
Federal-State Joint Board on Universal Service, CC Docket No. 96-45, Notice of
Proposed Rulemaking and Order Establishing Joint Board, 11 FCC Rcd 18092 (rel.
Mar. 8, 1996); Recommended Decision, 12 FCC Rcd 87 (rel. Nov. 8, 1996); Report
and Order, FCC97-157 (rel. May 8, 1997); Order on Reconsideration, FCC 97-246
(rel. July 15, 1997).
Implementation of the Local Competition Provisions in the Telecommunications Act
of 1996, CC Docket No. 96-98, First Report and Order, 11 FCC Rcd 15499 (1996)
Order vacated in part by Iowa Utilities Board v. FCC, No. 96-3321 (8th Cir. July
17, 1997); Petitions for Reconsideration, CC Docket No. 96-98.
Implementation of the Local Competition Provisions of the Telecommunications Act
of 1996, CC Docket No. 96-98, Second Report and Order and Memorandum Opinion and
Order 4 CR 484 (rel. Aug. 8, 1996). Competitive Telecommunications Association
v. FCC, No. 96-3604, 1997 U.S. App. LEXIS 15398 (8th Cir. June 27, 1997)
(upholding the FCC's definition of interconnection and the temporary transition
mechanism to cost-based rules).
Interconnection between Local Exchange Carriers and Commercial Mobile Service
Providers, CC Docket No. 95-185 (consolidated with above in CC Docket No. 96-
98).
Interconnection and Resale Obligations Pertaining to Commercial Mobile Radio
Services, CC Docket No. 94-54, Notice of Proposed Rule Making and Notice of
Inquiry, 9 FCC Rcd 5408 (rel. July 1, 1994); Second Notice of Proposed Rule
Making, 10 FCC Rcd 10666 (rel. Apr. 20, 1995); Implementation of Section 3(n)
and 332 of the Communications Act, GN Docket No. 93-252, Memorandum Opinion and
Order on Partial Reconsideration of Second Report and Order, 11 FCC Rcd 19729
(rel. Dec. 20, 1996) (affirming FCC decision to defer CMRS interconnection and
resale switch proposals); National Wireless Resellers Association, et al. v.
FCC, Petition for Review, No. 97-1071 (D.C. Cir. Feb. 3, 1997) (seeking review
of Memorandum Opinion and Order on Partial Reconsideration of Second Report and
Order).
Telephone Number Portability, CC Docket No. 95-0116, First Report and Order and
Further Notice of Proposed Rulemaking, 11 FCC Rcd 8352 (rel. July 2, 1996).
First Memorandum Opinion and Order on Reconsideration, 6 CFR 1106 (rel. Mar. 11,
1997); U.S. West v. FCC, No. 97-9518 (10th Cir. Apr. 4, 1997) (seeking review of
First Report and Order and First Memorandum Opinion and Order on
Reconsideration). Case held in abeyance pending FCC Action on Reconsideration.
The North American Numbering Council issues Recommendations Regarding the
Implementation of Telephone Number Portability, et al., CC Docket No. 95-116,
Public Notice, DA 97-916 (rel. May 2, 1997); The North American Numbering
Council Issues Recommendations of the North American Numbering Plan
Administrator, Billing and Collection Agent, et. al., CC Docket No. 92-237,
Public Notice, DA 97-1055 (rel. May 19, 1997).
<PAGE>
The Use of N11 Codes and Other Abbreviated Dialing Arrangements, CC Docket No.
92-105, First Report and Order and Further Notice of Proposed Rulemaking, 6 CR
695 (rel. Feb. 19, 1997); Implementation of the Local Competition Provisions in
the Telecommunications Act of 1996, CC Docket No. 96-98, First Report and Order,
11 FCC Rcd 15499 (rel. Aug. 8, 1996); Implementation of Section 703 of the
Telecommunications Act of 1996, CS Docket No. 96-166, Memorandum Opinion and
Order FCC 97-173 (rel. May 22, 1997); Petitions for Reconsideration, CC Docket
No. 96-98.
Amendment of Rules and Policies Governing Pole Attachments, CS Docket No. 97-98,
Notice of Proposed Rulemaking, FCC 97-94 (rel. Mar. 14, 1997).
Section 257 Proceeding to Identify and Eliminate Market Entry Barriers for Small
Businesses, GN Docket No. 96-113, Report, FCC 97-164 (rel. May 8, 1997).
Implementation of Section 6002(b) of the Omnibus Budget Reconciliation Act of
1993, Annual Report and Analysis of Competitive Market Conditions With Respect
to Commercial Mobile services, Second Report, 7 CR 1 (rel. Mar. 25, 1997).
Interconnection and Resale Obligations Pertaining to Commercial Mobile Radio
Services, CC Docket No. 94-54, First Report and Order, 11 FCC Rcd 18455 (rel.
July 12, 1996); Petitions for Reconsideration and Clarification, CC Docket No.
94-54; Cellnet Communications v. FCC, No. 96-4022 (6th Cir. Sep. 19, 1996)
(seeking review of the First Report and Order).
Interconnection and Resale Obligations Pertaining to Commercial Mobile Radio
Services, CC Docket No. 94-54, Second Report and Order and Third Notice of
Proposed Rulemaking, 11 FCC Rcd 9462 (rel. Aug. 15, 1996); Petitions for
Reconsideration, CC Docket No. 94-54, Second Report and Order.
Petition for Declaratory Ruling That Optional Exclusivity Resale Plans Are
Consistent with the Communications Act and FCC Rules, WTB/POI, 97-1, Petition
for Declaratory Ruling (filed Apr. 18, 1997).
Implementation of Section 255 of the Telecommunications Act of 1996 Access to
Telecommunications Services, Telecommunications Equipment, and Customer Premises
Equipment by Persons with Disabilities, WT Docket No. 96-198, Notice of Inquiry,
FCC 96-382 (rel. Sep. 19, 1996); Telecommunications Act Accessibility
Guidelines, Architectural and Transportation Barriers Compliance Board, Docket
No. 97-1, Notice of Proposed Rulemaking (rel. Apr. 18, 1997); Telecommunications
Relay Services, the Americans with Disabilities Act of 1990, and the
Telecommunications Act of 1996, CC Docket 90-571, Notice of Inquiry, 12 FCC Rcd
1152 (rel. Jan. 14, 1997).
Further Forbearance from Title II Regulation for Certain Types of Commercial
Mobile Radio Service Providers, GN Docket No. 94-33, Notice of Proposed
Rulemaking, 9 FCC Rcd 2164 (rel. May 4, 1994).
Revision of the Commission's Rules to Ensure Compatibility with Enhanced 911
Emergency Calling Systems, CC Docket No. 94-102, Report and Order and Further
Notice of Proposed Rulemaking, 11 FCC Rcd 18676 (rel. July 26, 1996); Petitions
for Reconsideration, CC Docket No. 94-102; Commission Seeks Additional Comment
In Wireless Enhanced 911 Rulemaking Proceedings Regarding Ex Parte Presentations
On Certain Technical Issues, CC Docket No. 94-102, Public Notice, DA 97-1502
(rel. July 16, 1997).
2
<PAGE>
Amendment of Part 22 of the Commission's Rules to Provide for Filing and
Processing of Applications for Unserved Areas in the Cellular Service and to
Modify Other Cellular Reconsideration, 12 FCC Rcd 2109 (rel. Jan. 31, 1997);
Implementation of Section 309(j) of the Communications Act -- Competitive
Bidding, PP Docket No. 93-253, Ninth Report and Order, 11 FCC Rcd 14769 (rel.
Nov. 7, 1996).
Wireless Telecommunications Bureau Seeks Comment on Petition for Forbearance
Filed by Broadband Personal Communications Services Alliance of the Personal
Communications Industry Association, Public Notice, DA 97-1155 (rel. June 2,
1997).
Implementation of the Telecommunications Act of 1996; Telecommunications
Carriers' Use of Customer Proprietary Network Information and Other Customer
Information, CC Docket No. 96-115, Notice of Proposed Rulemaking, 11 FCC Rcd
12513 (rel. May 17, 1996); Common Carrier Bureau Seeks Further Comment on
Specific Questions in CPNI Rulemaking, Public Notice, 12 FCC Rcd 3011) (rel.
Feb. 20, 1997).
Implementation of the Communications Assistance for Law Enforcement Act, Initial
Notice and Request for Comments, 60 FR 53643 (rel. Oct. 16, 1995) (re: capacity
requirements); Implementation of Section 109 of the Communications Assistance
for Law Enforcement Act, Final Rule 62 FR 13307 (rel. Mar. 20, 1997) (re: cost
reimbursements); Implementation of Section 104 of the Communications Assistance
for Law Enforcement Act, Second Notice and Request for Comments, 62 FR 1902
(rel. Jan. 14, 1997) (re: capacity requirements).
Guidelines for Evaluating the Environmental Effects of Radiofrequency Radiation,
ET Docket No. 93-62, Report and Order, 11 FCC Rcd 15123 (rel. Aug. 1, 1996);
First Memorandum Opinion and Order, ET Docket No. 93-62, 11 FCC Rcd 17512 (rel.
Dec. 24, 1996); Petitions for Reconsideration, ET Docket No. 93-62; Oppositions
filed Apr. 2, 1997 Second Memorandum Opinion and Order and Notice of Proposed
Rulemaking (rel. Aug. 25, 1997).
Amendment of Parts 2 and 21 to Prohibit Marketing of Radio Scanners Capable of
Intercepting Cellular Telephone Conversations, ET Docket No. 93-1, Report and
Order, 8 FCC Rcd 2911 (rel. Apr. 22, 1993); Manufacturing Illegal Scanners
Includes Scanner Modification, Public Notice, 12 FCC Rcd 2095 (rel. Feb. 13,
1997), revised in Public Notice, DA 97-334 (rel. July 10, 1997).
Revisions of Part 2 of the Commission's Rules Relating to the Marketing and
Authorization of Radio Frequency Devices, ET Docket No. 94-45, Report and Order,
6 CR 522 (rel. Feb. 12, 1997); Petition for Reconsideration and Clarification,
ET Docket No. 94-45.
Amendment of Part 2, 15, 18 and Other Parts of the Commission's Rules to
Simplify and Streamline the Equipment Authorization Process for Radio Frequency
Equipment, ET Docket No. 94-94, Notice of Proposed Rulemaking, FCC 97-84 (rel.
Mar. 27, 1997).
Assessment and Collection of Regulatory Fees for Fiscal Year 1997, MD Docket No.
96-186, Report and Order, FCC 97-215 (rel. June 26, 1997); Implementation of
Section 9 of the Communications Act, Assessment and Collection of Regulatory
Fees for Fiscal Year 1997, MD Docket No. 96-186, Further Notice of Proposed Rule
Making, 97-254 (rel. July 8, 1997).
Rules and Policies on Foreign Participation in the U.S. Telecommunications
market, 1b Docket No. 97-142, Order and Notice of Proposed Rulemaking, FCC 97-
195 (rel. June 4, 1997).
3
<PAGE>
Amendment of Part 1 of the Commission's Rules -- Competitive Bidding Proceeding,
WT Docket No. 97-82, Order Memorandum Opinion and Order and Notice of Proposed
Rulemaking, 6 CR 362 (rel. Feb. 28, 1997).
Commission Opens Inquiry on Competitive Bidding Process for Report to Congress,
WT Docket No. 97-150, Public Notice, FCC 97-232 (rel. Jul. 2, 1997).
Amendment of the Commission's Rules to Permit Flexible Service Offerings in the
Commercial Mobile Radio Services, WT Docket No. 96-6 First Report and Order and
Further Notice of Proposed Rulemaking, 11 FCC Rcd 8965 (rel. Aug. 1, 1996);
Petition for Partial Reconsideration or Clarification, Wt Docket No. 96-6 (filed
Sept. 30, 1996).
Installment Payments for PCS Licenses, Order, DA 97-649 (rel. Mar. 31, 1997);
FCC Announces Grant of Broadband Personal Communications Services D,. E, and F
Block BTA Licenses, Auction Event No. 11, DA 97-883 (rel. Apr. 28, 1997)
(suspending F-block payment).
Wireless Telecommunications Bureau Seeks Comment on Broadband PCS C and F Block
Installation Payment Issues, WT Docket No. 97-82 Public Notice, DA 97-679 (rel.
June 2, 1997); Comment Requested on 7 Percent Interest Rule Imposed on C Block
Installment Payment Plan Notes, Public Notice, DA 97-1152 (rel. June 2, 1997).
Amendment of Commission's Rules Regarding Installment Payment Financing for C
Block Personal Communications Service (PCS) Licensees, WT Docket No. 97-92
Second Report and Order and Further Notice of Proposed Rule Making (adopted
Sept. 25, 1997).
Amendment of the Commission's Rules to Establish Competitive Service Safeguards
for Local Exchange Carrier Provision of Commercial Mobile Radio Service, WT
Docket No. 96-162, Report and Order (adopted Oct. 3, 1997).
Policy and Rules Concerning the Interstate, Interexchange Marketplace,
Implementation of Section 254(g) of the Communications Act of 1934, as amended,
CC Docket No. 96-61, First Memorandum Opinion and Order on Reconsideration, FCC
97-269, rel. July 30, 1997, Order regarding PrimeCo Personal Communications,
L.P. request for stay, rel. Oct. 3, 1997.
CTIA Petition Regarding Cell Siting Memorandum, FCC 97-264.
IVDS Provision of Mobile Services, WT Docket No. 95-47.
Cellular Service and Other Commercial Mobile Radio Services in the Gulf of
Mexico; Amendment of Part 22 of the Commission's Rules to Provide for Filing and
Processing of Applications for Unserved Areas in the Cellular Service and to
Modify Other Cellular Rules, WT Docket No. 97-112; CC Docket No. 90-6, Second
Notice of Proposed Rulemaking, FCC 97-110 (rel. Apr. 16, 1997).
Amendment to the Commission's Rules Regarding a Plan for Sharing the Costs of
Microwave Relocation, WT Docket No. 95-157, Second Report and Order, 12 FCC Rcd
2705 (rel. Feb. 27, 1997).
Amendment of the Commission's Rules to Establish Part 27, the Wireless
Communications Service, GN Docket No. 96-228, Report and Order, 6 CR 771 (rel.
Feb. 19, 1997); Memorandum Opinion and Order, 12 FCC Rcd 3977 (rel. Apr. 2,
1997).
4
<PAGE>
Amendment of Parts 20 and 24 of the Commission's Rules -- Broadband PCS
Competitive Bidding and the CMRS Spectrum Cap, WT Docket No. 96-59, DA 97-81
(rel. Jan. 15, 1997).
Amendment of Part 90 of the Commission's Rules to Facilitate Future Development
of SMR Systems in the 800 MHz Frequency Band, PR Docket No. 93-144; GN Docket
No. 93-252; PP Docket No. 93-253, Order, DA 97-1059 (rel. May 20, 1997).
Geographic Partitioning and Spectrum Disaggregation by Commercial Mobile Radio
Services Licensees; Implementation of Section 257 of the Communications Act --
Elimination of Market Entry Barriers, WT Docket No. 96-148, GN Docket No. 96-
113, Report and Order and Further Notice of Proposed Rulemaking, 5 CR 634 (rel.
Dec. 20, 1996); Petitions for Reconsideration, WT Docket No. 96-148, GN Docket
96-113; Petition for Review, Rural Telecommunications Group v. FCC, No. 97-1077
(D.C. Cir. filed Feb. 5, 1997) (seeking review of the Report and order and
Further Notice of Proposed Rulemaking).
FCC Seeks Comments on Proposal to Reallocate Television Channels 60-69 (746-806
MHz) to Other Services, ET Docket No. 97-157, Public Notice, Report No. ET 97-6
(rel. July 9, 1997).
The Development of Operational, Technical and Spectrum Requirements for Meeting
Federal, State and Local Public Safety Agency Communication Requirements Through
the Year 2000, WT Docket No. 96-86, Notice of Proposed Rulemaking, 11 FCC Rcd
12460 (rel. Apr. 10, 1996).
Access Charge Reform; Price Cap Performance Review for Local Exchange Carriers;
Transport Rate Structure and Pricing; Usage of the Public Switched Network by
Information Service and Internet Access Providers, CC Docket Nos. 96-262, et
al., Notice of Proposed Rulemaking, Third Report and Order, and Notice of
Inquiry, 11 FCC Rcd 21354, (P) 313 (rel. Dec. 24, 1996).
Western PCS I Corp. Petition for Preemption of the Oregon Department of Revenue
Notice of Proposed Assessment; and Request for Declaratory Ruling, File No.
WTB/POL 96-3 (filed July 8, 1996).
Determination that Roseville Ordinance Inhibiting Entry of Commercial Mobile
Radio Service Providers Contravene Section 332(c) of the Communications Act,
File No. CWD 96-16 (filed May 2,3 1995).
Petition for Declaratory Ruling Filed by Pittencrieff Communications Regarding
Preemption of Texas Public Utility Regulatory Act of 1995, WTB/POL 96-2 (filed
Jan. 11, 1996).
Hear-It-Now Petition for Rulemaking, RM-8658 (filed June 15, 1995).
Procedures For Reviewing Requests for Relief From State and Local Regulations
Pursuant to Section 332(c)(7)(B)(v) of the Communications Act of 1934,
Guidelines For Evaluating the Environmental Effects of Radiofrequency Radiation,
Petition For Rulemaking of the Cellular Telecommunications Industry Association
Concerning Amendment of the Commission's Rules to Preempt State and Local
Regulations of Commercial Mobile Radio Service Transmitting Facilities, Docket
No. 97-192 & 93-62 FCC 97-30 (rel. Aug. 25, 1997).
Amendments to Part 90 of the Commission's Rules Concerning Private Land Mobile
Radio Services, Docket No. 97-153, FCC 97-239 (rel. Aug. 25, 1997).
Implementation of Section 703(e) of the Telecommunications Act of 1996/Amendment
of the Commission's Rules and Policies Governing Pole Attachments, Docket No.
97-151, FCC 97-234 (rel. Aug. 12, 1997).
5
<PAGE>
Changes to the Board of Directors of the National Exchange Carrier Association,
Inc./Federal-State Joint Board on Universal Services, Docket No. 97-21 & 96-45,
FCC 97-292 (rel. Aug. 15, 1997).
Amendment of Parts 2, 15 and 97 of the Commission's Rules to Permit Use of Radio
Frequencies Above 40 GHz For New Radio Applications, Docket No. 94-124, FCC 97-
267 (rel. Aug. 14, 1997).
Comment Sought on Balanced Budget Provisions Calling for Reserve Prices or
Minimum Opening Bids in FCC Auctions, Public Notice DA 97-1933, rel. Sept. 5,
1997.
FCC Announces Upcoming Spectrum Auction Schedule -- Two Auctions To Commence
Before End of the Year, Public Notice DA 97-1627, rel. Jul. 30, 1997.
Implementation of Section 309(j) of Communications Act Competitive Bidding, PP
Docket No. 93-253.
Personal Communications Services, GEN Docket No. 90-314, ET Docket No. 92-100.
Advanced Television Systems and Their Impact Upon Existing Television Broadcast
Service, MM Docket No. 97-268 (rel. April 21, 1997).
Telecommunications Relay Services, CC Docket No. 90-571, Notice of Inquiry (rel.
Feb. 14, 1997).
FCC Seeks Comments on CMRS "Calling Party Pays" Service Option, WT Docket 97-XXX
(Sept. 25, 1997).
Balanced Budget Act of 1997.
Telecommunications Act of 1996, Pub. LA. No. 104-104, 110 Stat. 56 (1996).
Omnibus Budget Reconciliation Act of 1993.
6
<PAGE>
SCHEDULE 5.2
------------
Company and Management Stockholder Consents
-------------------------------------------
The execution, delivery and performance of the Agreement will or may
require the following consents, approvals and reviews:
1. The Federal Communications Commission
2. The Federal Trade Commission/Department of Justice
3. Various Governmental Authorities with respect to Franchise Law.
<PAGE>
SCHEDULE 5.7
------------
EQUITY OWNERSHIP
----------------
Michael E. Kalogris................................... 78,494.80
Steven R. Skinner..................................... 58,871.10
----------
137,365.90
<PAGE>
SCHEDULE 5.12
-------------
TRITON COMMUNICATIONS
MINIMUM BUILDOUT SCHEDULE
PHASE 1 4.4 million pops (40% total pops) within 2 years of closing of
Purchase agreement.
11 cities with 3.4 million pops.
Buildout core metro area and suburbs
Greenville, South Carolina
Spartanburg, South Carolina
Richmond, Virginia
Petersburg, Virginia
Charlottesville Virginia
Columbia, South Carolina
Florence, South Carolina
Charleston, South Carolina
Anderson, South Carolina
August, Georgia
Roanoak, Virginia
Over 600 miles of interstate and other primary and key secondary
roads with an ADDITIONAL 1.0 million pops.
I-95 Charleston to Savannah
I-85 Atlanta to Charlotte borders
I-95 Richmond to Fredericksburg
I-64 Charlottesville to Williamsburg
I-26/385 Greenville - Spartanburg to Charleston
I-77 Columbia to Rockville
I-20 Atlanta border (Augusta) to Florence
PHASE II Additional 2.2 million pops (20% total pops) within 3-1/2 hears of
closing of Purchase Agreement
Key secondary cities and connecting highway corridors as defined by
marketing and competitive situations.
PHASE III Final 2.2 million pops (20% total pops) within 5 years of closing of
Purchase Agreement.
<PAGE>
EXHIBIT A HAS BEEN FILED SEPARATELY AS
EXHIBITS 10.16 AND 10.17 TO THE
REGISTRATION STATEMENT
<PAGE>
EXHIBIT B HAS BEEN FILED
SEPARATELY AS EXHIBIT 10.8 TO THE
REGISTRATION STATEMENT
<PAGE>
Exhibit C
RESALE AGREEMENT
THIS RESALE AGREEMENT, containing terms and conditions pertinent to
reselling Service (as defined below), effective as of the ________ day of
________, 199_, is by and between ________ (dba AT&T Wireless Services), a
Delaware corporation with its principal place of business at Kirkland, WA (the
"Reseller"), and Triton PCS Operating Company L.L.C., a Delaware corporation,
which holds licenses to provide Service in areas where Reseller has requested an
Assignment of Numbers (the "Company").
RECITALS
A. Company provides or is authorized to provide Service in certain
geographic Areas (as defined below) in the United States to Customers (as
defined below). The Areas in which the Company is authorized to provide Service
may change from time to time.
B. Reseller desires to purchase and resell access to and usage of
Company's Service within the Areas designated by Reseller on Schedule 1A and any
revised Schedule 1A submitted by Reseller pursuant to Section 4.1.
C. An Affiliate of Reseller has entered into a certain Securities
Purchase Agreement dated as of October __, 1997 with the Company, certain cash
equity investors and certain management stockholders pursuant to which such
Affiliate contributed, in exchange for an equity interest in the Company, a
portion of the radio spectrum for provision of the Service it acquired in the
Areas by FCC auction, and Company, such Affiliate and the other stockholders of
Company have entered into a Stockholders' Agreement (the "Stockholders
Agreement").
D. The Company intends to construct the network required to provide
Service in the Areas.
AGREEMENTS
In consideration of the mutual covenants and the promises contained
herein, the Parties hereto agree as follows:
<PAGE>
ARTICLE 1
DEFINITIONS
The following terms when used herein shall have the following
meanings:
1.1 Activation or Activate shall mean the initiation of the Service
---------- --------
for the account of Reseller.
1.2 Affiliate shall mean any person, partnership, corporation, or
---------
other business association (hereinafter "person") that directly or indirectly
controls, is controlled by, or is under common control with another person.
Control shall be defined as (i) ownership of a majority of the voting power of
all classes of voting stock or (ii) ownership of a majority of the beneficial
interests in income or capital of an entity other than a corporation.
1.3 Area(s) shall mean the areas within the United States, where
-------
Company provides Service from time to time pursuant to licenses granted by the
FCC. A list of the Areas where Company is currently providing Service is set
forth on the attached Schedule 1. Company may update Schedule 1 and/or Schedule
1A at any time to make additions and/or deletions to reflect the acquisition or
disposition of MSA(s), RSA(s), MTA(s) and/or BTA(s) or to reflect additional
Area(s) where Service will be offered under this Agreement.
1.4 Assignment shall mean the assignment of a Number or Number Block
----------
to Reseller.
1.5 Basic Trading Area ("BTA") shall mean a geographic area used by
--------------------------
the FCC as described in 47 C.F.R. (S) 24.202 of the Rules of the Federal
Communications Commission in defining Broadband PCS service areas, which areas
are based on the Rand McNally 1992 Commercial Atlas & Marketing Guide, 123rd
Edition, at pages 38-39.
1.6 Business Day shall mean Monday through Friday, excluding Company
------------
observed holidays for the particular Area handling the pertinent transaction,
except as specifically stated otherwise in Schedule 2.
1.7 Business Hours shall mean 9:00 a.m. to 5:00 p.m. on any Business
--------------
Day at the office responsible for handling the pertinent interaction between
Company and Reseller.
1.8 Calling Plan shall mean the list of services published from time
------------
to time by Company which reflects the rates, terms, and conditions at which it
makes Service available to Customers under different Service Plans.
2
<PAGE>
1.9 Customer shall mean any individual or entity purchasing Service
--------
from Company, including Reseller.
1.1 End User shall mean any person or entity acquiring Service,
--------
directly or indirectly, from or through Reseller.
1.1 Events of Default shall mean the following:
-----------------
(a) the execution of any assignment for the benefit of creditors or
the filing for relief by either party under any applicable bankruptcy,
reorganization, moratorium, or similar debtor relief laws;
(b) the appointment of a receiver for Reseller or Company or for
substantially all of their respective assets or properties;
(c) the failure of either party to pay any sum owed to the other
hereunder at the time such amount comes due;
(d) the failure of either party to perform or observe any other
material term, condition, or covenant to be performed by it under this
Agreement;
(e) the commission of any illegal act (excluding misdemeanor traffic
offenses and other minor misdemeanors not involving dishonesty or moral
turpitude) by or the filing of any criminal indictment or information against
Reseller, its proprietors, partners, officers, or directors or shareholders
controlling in the aggregate or individual 10% or more of the voting rights or
equity interests of Reseller;
(f) the furnishing, within a 12-month period, by Reseller to Company
of two or more checks that are not paid when presented due to insufficient
funds;
(g) an unauthorized assignment of this Agreement; and
(h) failure by Reseller to meet the eligibility requirements as
described in Schedule 2 hereto, including, without limitation, all terms and
conditions of each Service Plan selected by Reseller.
Upon the occurrence of any of these Events of Default, a party shall
be deemed to be in default of this Agreement, unless such Event of Default is
cured within any applicable cure period identified in Section 13.1.
1.1 FCC shall mean the Federal Communications Commission or any
---
successor agency.
3
<PAGE>
1.1 Home Area shall mean the area served by the Company holding the
---------
FCC license for the MSA, RSA, MTA or BTA with which the Number is normally
associated.
1.1 Interexchange Carrier ("IXC") shall mean an entity that is a
-----------------------------
carrier within the meaning of the Communications Act of 1934, as amended from
time to time, that provides Interexchange Service as defined by the FCC.
1.1 Major Trading Area ("MTA") shall mean a geographic area used by
--------------------------
the FCC as described in 47 C.F.R. (S) 24.202 of the Rules of the Federal
Communications Commission in defining Broadband PCS service areas, which areas
are based on the Rand McNally 1992 Commercial Atlas & Marketing Guide, 123rd
Edition, at pages 38-39.
1.1 Metropolitan Statistical Area ("MSA") shall mean a geographic
-------------------------------------
area used by the FCC as described in 47 C.F.R. (S) 22.909 of the Rules of the
FCC in connection with Service.
1.1 NPA/NXX shall mean the Numbering Plan Area (three digit area
-------
code) and three digit central office code of a seven digit telephone number.
1.1 Number shall mean the ten-digit (NPA/NXX-XXXX) number assigned to
------
a Wireless Telephone Unit used to provide access to Service.
1.1 Number Block shall mean the 10,000 telephone number block, or
------------
parts thereof, associated within NPA/NXX in the North American Numbering Plan.
1.2 Region(s) shall mean the grouping(s) of Areas within specified
---------
states, as set forth in Schedule 2.
1.2 Roaming User or Roamer shall mean a Customer using Service
------------ ------
outside the Home Area.
1.2 Rural Service Area ("RSA") shall mean a geographic area used by
--------------------------
the FCC as described in 47 C.F.R. (S) 22.909 of the Rules of the FCC in
connection with Cellular Service.
1.2 Service shall mean, depending upon the Area in which the service
-------
is being provided, Cellular Service or Broadband PCS, as described in 47 C.F.R.
Part 22, Subpart H, and 47 C.F.R. Part 24, Subpart E, respectively, of the Rules
of the FCC, as amended, and such other basic common carrier services as may be
offered by Company to Reseller from time to time under this Agreement.
4
<PAGE>
1.2 Service Plan shall mean the rates, terms, and conditions under
------------
which Reseller purchases Service from Company as described on the Exhibit(s)
attached to Schedule 2 to this Agreement.
1.2 Subscription Fraud shall mean using or assisting another to use
------------------
any scheme, false representation, or false credit device, or other fraudulent
means or devices in connection with Service or activation thereof, including,
but not limited to, the fraudulent production of information regarding a
person's identify or the use of unauthorized credit.
1.2 Unauthorized Access shall mean any unauthorized use of Service
-------------------
through the modification of the Electronic Serial Number ("ESN") originally
installed by the manufacturer in a Wireless Telephone Unit (which shall include
the practices generally referred to as "counterfeiting," "cloning fraud," or
"tumbling fraud.")
1.2 Wireless Telephone Unit shall mean the wireless equipment used by
-----------------------
a Wireless Customer to originate wireless telephone calls or to receive wireless
telephone calls.
1.2 Wireless System shall mean those integrated mobile switching,
---------------
cell sites, and other facilities that are used to provide Service in an MSA,
RSA, MTA or BTA (or portion thereof), as the case may be.
ARTICLE 2
ELIGIBILITY, PROVISION OF SERVICE AND RESELLER RELATIONSHIP
2.1 Provision of Service. Company shall provide on a nonexclusive
--------------------
basis and Reseller may purchase Service from Company within the Area(s) as
designated by Reseller, which Service Reseller may resell to End Users. Company
shall have the continuing right to market and sell Service to Customers and
potential Customers in competition with Reseller.
2.2 Service Plans. Schedule 2 attaches one or more Exhibit(s)
-------------
describing each Service Plan selected by Reseller for each Area where Reseller
is authorized to provide Service. Reseller agrees that all terms and conditions
of each such Service Plan are incorporated into this Agreement by this
reference. Company reserves the right to change any Service Plan at any time as
provided in Section 5.10 below. Reseller must satisfy all eligibility
requirements and other terms and conditions described in Schedule 2 for each
Service Plan selected by Reseller for the respective Area where Reseller is
authorized to provide Service.
5
<PAGE>
ARTICLE 3
TERM OF AGREEMENT
The term of this Agreement shall commence on the date set forth above
(the "Commencement Date"), and shall continue for ten (10) years (the "Initial
Term"), unless earlier terminated in accordance with the terms of this
Agreement. Notwithstanding the foregoing, Reseller may terminate this Agreement
for any reason on one hundred eighty (180) days written notice. This Agreement
shall be automatically renewed for additional successive one (1) year periods
(each a "Renewal Term") unless this Agreement is otherwise terminated pursuant
to the terms hereof. Notwithstanding the foregoing, at any time following the
eleventh anniversary of the Commencement Date, either party may terminate this
Agreement on ninety (90) days written notice to the other that it desires to
terminate this Agreement. During any such ninety (90) day period, Company shall
have the right to provide Reseller with a new agreement for the resale of
Service as may be consistent with then applicable rules and regulations, which
Reseller shall have the right to execute within a stated period of time. If
Reseller fails to execute and return any such renewal agreement prior to the
stated deadline, then Service to Reseller shall be discontinued as of the end of
the term then in effect.
ARTICLE 4
ASSIGNMENT OF NUMBERS, CONNECTIONS
4.1 Provision of Numbers to Reseller. Upon execution of this
--------------------------------
Agreement, Reseller shall provide information reasonably requested to establish
billing account status for Reseller. Reseller acknowledges that, once all
requested information is received by Company, Company may take as long as
fifteen (15) Business Days to complete establishment of billing account status.
Reseller further agrees that upon establishment of billing account status,
Reseller shall accept Assignment of an initial order of at least 10 Numbers.
Such Numbers will contain area codes and exchanges (NPA/NXXs) appropriate to the
MSA(s), RSA(s), MTA(s) and/or BTA(s), as the case may be, specified by Reseller
for those Areas where Reseller indicates on Schedule 1A it desires to provide
Service.
Reseller may cancel the assignment of any Number; provided that in no
event shall the total amount of Numbers assigned to Reseller be less than 10,
and provided further that, where applicable, Reseller pays any cancellation fees
associated with cancellation of Number assignments under the Service Plan
selected by Reseller.
Reseller may, at any time that it is not in default under this
Agreement, and according to procedures (including security requirements as
described in Section 7.10) established by Company, order additional Numbers in
such amounts as may be set
6
<PAGE>
forth in Schedule 2; provided, however, that not later than the 10th day of each
--------
calendar month during the Initial Term and any Renewal Term Reseller shall
deliver to the Company in writing a good faith forecast of the amount of numbers
that Reseller will require during the next calendar month . If that order
contains a request for an assignment of Numbers in an additional Area, Reseller
shall complete and submit to the Company a revised Area Designation Addendum in
the form of a new Schedule 1A hereto. Subject to the availability of Numbers and
the capacity of the Company's facilities, such additional Numbers will be
supplied to Reseller under normal circumstances within five (5) Business Days
after Company's receipt of the order; provided, however, that if Numbers are
ordered for any additional Area, such Numbers will be provided under normal
circumstances not more than fifteen (15) Business Days after Company's receipt
of the order. Company shall process orders for Numbers from all Customers,
including Customers who are owned or controlled by Company or an Affiliate of
Company, in the sequence in which orders for additional Numbers are received.
Reseller and Company shall follow reasonable number conservation policies
generally accepted by the telecommunications industry and Company may, from time
to time upon reasonable advance written notice to Reseller, change number
assignments in conformity with such policies, including changes requested or
ordered by Federal or state regulatory authorities or by number administrators
recognized by such authorities as having responsibility for the assignment of
telephone numbers. If Numbers are unavailable, Company shall follow generally
accepted industry standards and/or regulatory requirements, if any, in
responding to the shortage of Numbers, and shall, by doing so, incur no
liability to Reseller. Reseller shall own the numbers assigned to it hereunder
and have full rights to number portability.
Company's obligation to provide additional Numbers to Reseller shall,
at Company's option, cease (a) upon receipt by Company of Reseller's written
notice of termination, or (b) upon issuance by Company of written notice of
termination or upon notice of default under Section 13.1 to Reseller, whether or
not applicable cure periods have expired. If Reseller cures the defaults
described in the notice of default within the required period, then Company
shall again be obligated to provide additional Numbers as provided in this
Section 4.1.
4.2 Restrictions on Numbers. A Number may not be associated with
-----------------------
more than one Wireless Telephone Unit at the same time, unless otherwise
approved by Company.
4.3 Activation of Service. Company shall use reasonable efforts to
---------------------
Activate Numbers, during Business Hours, as soon as practicable upon its receipt
of the notice and any letter of credit required pursuant to Section 7.10. In
any event, a Number shall be Activated under normal circumstances within thirty
(30) minutes following receipt of Reseller's activation order; provided,
however, that Company shall not be obligated to Activate Service for any Number
assigned to Reseller if Reseller has
7
<PAGE>
committed an Event of Default which has not been cured within the applicable
cure period described in Section 13.1.
4.4 Remote Access. Company will provide remote Number activation,
-------------
deactivation, and modification capabilities to Reseller according to the remote
access procedures described in Schedule 4.
4.5 Modification or Termination of Service. Schedule 4 shall provide
--------------------------------------
the method Reseller is to follow to modify or terminate Service with respect to
one or more Number(s). Company shall modify or terminate Service to such
Number(s) under normal circumstances within thirty (30) minutes following
Reseller's request. Notwithstanding the foregoing, Company may modify or
terminate Service with respect to one or more Number(s) as provided below in
Section 11.2 with respect to abuse or fraudulent use.
4.6 Authorized Representatives. Immediately upon execution of this
--------------------------
Agreement, Company and Reseller shall each notify the other of their respective
authorized representatives for purposes of giving and receiving the notices
provided for under this Article IV and any other Service orders, including those
which involve the activation, change, or discontinuance of Service. Each party
may appoint no more than three representatives at any time, unless the other
party consents to a greater number, which consent will not be unreasonably
withheld. The notice of appointment, and the authority of the representative,
shall remain effective until the notice is canceled or amended by the party for
which such representative is acting. Company will not accept any notice or
orders from any End User or other agent of Reseller.
4.7 Limitations on Service.
----------------------
8
<PAGE>
(a) Limitations on Service within the Home Area. RESELLER
-------------------------------------------
ACKNOWLEDGES THAT SERVICE IS MADE AVAILABLE TO WIRELESS TELEPHONE UNITS EQUIPPED
FOR SERVICE ONLY WHEN WITHIN OPERATING RANGE OF THE FACILITIES WITHIN THE HOME
AREA. SERVICE MAY BE TEMPORARILY REFUSED, INTERRUPTED, OR LIMITED BECAUSE OF:
(a) FACILITIES LIMITATIONS; (b) TRANSMISSION LIMITATIONS CAUSED BY ATMOSPHERIC,
TERRAIN, OTHER NATURAL OR ARTIFICIAL CONDITIONS ADVERSELY AFFECTING
TRANSMISSION, AND OTHER CAUSES REASONABLY OUTSIDE OF COMPANY'S CONTROL; OR (c)
EQUIPMENT MODIFICATIONS, UPGRADES, RELOCATIONS, REPAIRS, AND OTHER SIMILAR
ACTIVITIES NECESSARY FOR THE PROPER OR IMPROVED OPERATION OF SERVICE IN
ACCORDANCE WITH INDUSTRY STANDARDS. INDIVIDUAL CALLS MAY BE "DROPPED" (I.E.,
INVOLUNTARILY DISCONNECTED) FOR A VARIETY OF REASONS, INCLUDING WITHOUT
LIMITATION, ATMOSPHERIC CONDITIONS, TOPOGRAPHY, WEAK BATTERIES, SYSTEM
OVERCAPACITY, MOVEMENT OUTSIDE A SERVICE AREA OR GAPS IN COVERAGE WITHIN A
SERVICE AREA. SO LONG AS IT HAS PERFORMED ITS OBLIGATIONS IN ACCORDANCE WITH
ARTICLE VIII OF THIS AGREEMENT, COMPANY SHALL INCUR NO LIABILITY FOR ITS
INABILITY TO PROVIDE ADEQUATE SERVICES HEREUNDER IF SUCH INABILITY IS DUE TO THE
ABOVE LIMITATIONS OR A LACK OF NETWORK CAPACITY OR TO CAUSES BEYOND THE
REASONABLE CONTROL OF COMPANY, SUBJECT TO COMPANY'S DUTY NOT TO UNREASONABLY
DISCRIMINATE AGAINST RESELLER IN THE PROVISION OF COMMON CARRIER SERVICES. NOR
SHALL COMPANY BE RESPONSIBLE FOR ANY ACT OR OMISSION RELATED TO NON-COMPANY
EQUIPMENT OR SYSTEMS USED IN CONNECTION WITH THE SERVICE.
(b) Limitations on Roaming Service. UNLESS OTHERWISE SET FORTH IN
------------------------------
SCHEDULE 6, COMPANY WILL PROVIDE, AS TO EACH NUMBER ACTIVATED FOR RESELLER, THE
SAME ROAMING SERVICE THAT IS AVAILABLE TO COMPANY'S OTHER CUSTOMERS WITH NUMBERS
ASSOCIATED WITH THE SAME HOME AREA. IF COMPANY, OR ANOTHER ENTITY WITH WHOM
COMPANY HAS A ROAMING AGREEMENT, DISCOVERS OR SUSPECTS ABUSE OR FRAUDULENT USE
AS DESCRIBED IN ARTICLE XI WITH RESPECT TO CERTAIN NUMBERS, THEN ROAMING
PRIVILEGES MAY BE SUSPENDED WITH RESPECT TO SUCH NUMBERS.
IT SHALL BE COMPANY'S POLICY TO USE COMMERCIALLY REASONABLE EFFORTS TO
PROVIDE RESELLER WITH PRIOR, OR PROMPT SUBSEQUENT, NOTIFICATION OF THE
SUSPENSION OF THE ROAMING SERVICE.
9
<PAGE>
4.8 Reassignment of Numbers. SUBJECT TO COMPANY'S OBLIGATIONS UNDER
-----------------------
SECTION 4.1 ABOVE, RESELLER ACKNOWLEDGES THAT COMPANY MAY BE REQUIRED TO CHANGE
OR REASSIGN NUMBERS PREVIOUSLY PROVIDED TO RESELLER FROM TIME TO TIME. COMPANY
WILL PROVIDE RESELLER WITH NOTICE OF THE INTENDED CHANGE REASONABLY IN ADVANCE
OF, AND IN ANY EVENT AT LEAST SIXTY (60) DAYS PRIOR TO, MAKING ANY SUCH CHANGE.
RESELLER AGREES TO INFORM ITS END USERS OF THE PROVISIONS OF THIS SECTION AND
FURTHER ACKNOWLEDGES AND AGREES THAT EXCEPT AS OTHERWISE PROVIDED IN SECTION
4.1, NEITHER IT NOR ANY END USER SHALL HAVE OR ACQUIRE A PROPRIETARY RIGHT IN
ANY SPECIFIC NUMBER OF NUMBER BLOCKS PROVIDED BY THE COMPANY.
4.9 Privacy. Wireless Systems use radio channels to transmit voice
-------
and data communications over a complex network and privacy cannot be guaranteed.
Reseller agrees that Company shall not be liable to Reseller for any such lack
of privacy so long as Company's practices related to protection of privacy
conform to industry standards.
ARTICLE 5
PRICES AND TERMS OF PAYMENT
5.1 Payment of Charges. Reseller shall pay to Company charges
------------------
computed as set forth in Schedule 2. All such charges may be modified from time
to time, subject to the terms of Section 8.11(b) of the Stockholders Agreement.
5.2 Minimum Charges. Reseller shall pay Company any minimum charges
---------------
as set forth in Schedule 2 for each Number assigned to Reseller commencing on
the activation date of the Number.
5.3 Taxes. Except where Reseller provides to Company a valid
-----
certificate of resale or such other documentation as would release Company from
any taxes, levy, or duty, there shall be added to any charges due from Reseller
an amount equal to any duty, fee, surcharge, levy or tax, including but not
limited to, sales, excise, utility, and use taxes, fees or surcharges, imposed
by any local, state or Federal government or governmental agency with respect to
Reseller or the Service, excepting only taxes on the net or gross income or
revenue of the Company.
5.4 Tariffs. In the event that Service provided or charges for
-------
Service are or become subject to any Federal, state, or local regulation or
tariff, then the agreed charges set forth in Schedule 2 (as amended from time to
time) shall be deemed amended immediately to conform to the rates or any changes
in rates or terms and conditions that
10
<PAGE>
may be required under such regulation or tariff, provided that any tariff
changes initiated by Company shall still comply with notice provisions under
this Agreement and the rates charged for Service company with the provisions of
Section 5.1. Nothing in this Agreement shall be deemed (i) to require or
preclude the use of tariff-equivalent or tariff-related charges, or (ii) to
provide or imply that such charges are or are not appropriate in the provision
of Service provided for in this Agreement and in Schedule 2.
5.5 Charges
-------
(a) Charges Generally. Reseller is responsible for payment of and
-----------------
shall pay all charges of the types described in Sections 5.5.2 through 5.5.6
below for Service requested by Reseller under this Agreement that can be
identified to a specific Number or Number Block. Charges will be assessed at the
rates shown on Schedule 2 with respect to each Service Plan selected by
Reseller. Without limitation of the foregoing, Reseller shall bear the risk
associated with abuse or fraudulent use as described in Article XI. The charges
that will appear on Reseller's monthly invoices (which are further described in
Section 5.10 below) will be for Service furnished under this Agreement,
including regular monthly Service charges (access and service features, if any)
and usage charges for all calls processed through the Number for the particular
billing cycle (separated into peak and off-peak, if applicable).
(b) Usage Charges. Usage charges include, but are not limited to,
-------------
charges on a per minute basis for calls that are sent or received by a Wireless
Telephone Unit programmed with a Number assigned to Reseller, as well as long
distance charges, roaming charges and directory listings (as further described
below). In addition, Reseller will be charged for custom calling, network
service, wireless network usage, directory assistance (as further described
below), and 900 service and Service provided under other service access codes
(to the extent these services are made available by Company). Usage charges may
also include charges for additional calling or other services offered by Company
which Reseller may subscribe to at rates determined by Company from time to
time. There is no charge for calls made from the Home Area if no connection is
established.
(c) Roaming Charges. Roaming charges apply when a Wireless Telephone
---------------
Unit is used outside the End User's Home Area. Roaming airtime charges will be
billed at the rates set forth in the attached Schedule 6. When roaming, long
distance (including Interexchange Carrier) charges apply in accordance with
Company's roaming policies in effect from time to time.
(d) Emergency Calls. All airtime usage generated by Reseller or
---------------
Reseller's End Users to access telephone number 911 to the extent available to
Wireless Telephone Units in the Area shall be provided at no charge to Reseller.
11
<PAGE>
(e) Directory Assistance. Calls to local directory assistance will
--------------------
be at the rate as established by Company for each Service Plan selected by
Reseller. Normal airtime charges will also apply. Charges for directory
assistance when roaming will be determined by the serving carrier.
(f) Long Distance.
-------------
(i) General. Long distance charges (including charges of any
-------
Interexchange Carrier to which a call is routed) apply to any call made
from a Wireless Telephone Unit if the call's destination is not in the same
"local calling area" (as defined by the Company) as the wireless network
antenna through which the call originated.
(ii) Preferred Interexchange Carrier. For each Number assigned
-------------------------------
to Reseller, Reseller is permitted to choose a Preferred Interexchange
Carrier ("PIC") from the list of participating IXCs in the same manner that
other Wireless Customers may choose a PIC, which process is referred to by
Company as "interexchange access." If Reseller makes no selection of a PIC,
Company may assign Reseller to a carrier designated by Company. Company
will make every effort to ensure that Reseller's account is set up with the
PIC of Reseller's choice, if any; however, if Reseller discovers that any
Number has been inadvertently set up with the wrong PIC, Reseller shall
notify Company immediately. AT&T shall be made available as a PIC.
Calls made by or to End Users will be routed through Reseller's PIC
under the circumstances determined, from time to time, by the Company or other
carrier providing Service to such End User. If the long distance call is not
carried by Reseller's PIC, the call may be default routed to another carrier.
(iii) International Dialing. Company reserves the right at any
---------------------
time and from time to time to restrict availability for international
dialing, whether on a country or other basis, as it sees fit. Availability
of international dialing may also be restricted by Reseller's PIC.
(iv) Rates for Long Distance. Long distance charges for all
-----------------------
calls routed through Reseller's PIC will be determined by such IXC. Such
charges may be billed by Reseller's PIC or, at the IXC's option, billed
together with Company's charges. Long distance charges for services
provided by other carriers when an End User is roaming will be determined
by such carriers.
5.6 Promotions, Free Airtime and Other Features. Reseller shall be
-------------------------------------------
entitled to participate in any promotions or have access to rewards, free
airtime, special Customer Service offerings, and other features provided to
Wireless Customers, such as
12
<PAGE>
holiday air time promotions, access to or creation of "*" and "#", speed dial or
other special code numbers, special service numbers such as 611, or any features
not specifically set forth herein. Company agrees to establish for Reseller #288
as a special service number which will route End Users to Reseller's Customer
Care representatives at no charge to Reseller or its End Users.
5.7 Guidelines for Calls. Any access, feature and non-usage related
--------------------
charges (if any) are billed monthly, either in advance or in arrears (depending
on the Service Plan). Usage charges are billed monthly in arrears. Airtime
charges incurred for periods when Voice Mail messages are retrieved or when call
waiting, call forwarding, three-party calling, or no-answer transfer features
are in use, even if no radio airtime is actually used. Company reserves the
right to charge a reasonable fee for adding or deleting service features.
5.8 Provision of Magnetic Tapes. Company will establish a reseller
---------------------------
billing cycle for Reseller and will provide billing on a magnetic billing tape
or, upon one hundred eighty (180) days' prior written notice to Company and the
Company's approval (not to be unreasonably withheld), any other medium selected
by Reseller. (Reference in this Agreement to magnetic billing tape or magnetic
tape shall be deemed to refer to the magnetic tape or other medium referred to
in the preceding sentence.) Company shall provide to Reseller or Reseller's
billing agent accurate magnetic billing tapes for Service provided pursuant to
this Agreement and the charges associated therewith within three (3) Business
Days after the cut-off date for each billing cycle. Reseller agrees to notify
Company immediately if it does not receive a magnetic tape within this time
frame. The magnetic tapes provided by Company will include reasonable billing
information compiled using standard industry protocols. Reseller agrees to
notify Company within five (5) Business Days after its receipt of a magnetic
tape containing any defects and return the defective tape to Company's billing
vendor. Reseller must provide Company with written notice of the name, address,
and phone number of its billing agent at least thirty (30) calendar days prior
to the expected mailing date of the billing tape. Each container within which
the magnetic billing tapes are shipped to Reseller's billing agent shall be
labeled with Reseller's name, the appropriate Company name, the applicable Home
Area, the name of the Reseller's billing agent, and the billing period to which
the tape pertains. Company shall provide one magnetic billing tape per reseller
billing cycle billing database. Reseller understands that Company may in its
discretion assign Reseller Numbers to multiple billing databases. Reseller shall
pay Company's costs for any additional or lost tapes. Subject to the prior
notice procedures in the first sentence of this Section 5.8, Company agrees to
make all reasonable efforts to be able to transmit data related to billing by
means other than magnetic tape, such as by optical disk or by way of wired
networks from one computer to another. If Company decides to make such
electronic methods of file transfer available and Reseller selects that method,
the substitution of another form of transmission shall not affect the
transmission, compliance with standard protocols, timeliness of notice regarding
defects, identification of the data
13
<PAGE>
by reasonable "labeling," and responsibility for costs of replacing data, as
nearly as practicable as if magnetic tapes had been used. Company agrees to
offer Reseller electronic data transmission options at such time as those
options are made available by Company to any other customer.
5.9 Invoices.
--------
(a) Itemized Invoices. Company shall bill Reseller for charges
-----------------
incurred (as described in Section 5.6 above) for each Number once per calendar
month, with the billing date to be the same for that Number each successive
month. Company will use reasonable efforts to have all Numbers of Reseller in a
particular billing database assigned to a single cycle, but any Number may be
assigned to any cycle and the cycle to which a Number is assigned may be changed
from time to time; provided, however, that Company shall not unreasonably
require multiple billing cycles for the same billing database for Reseller. When
practicable, Company will provide Reseller with ninety (90) days prior written
notice of any change in billing cycles to be used with respect to Numbers
assigned to Reseller. Reseller shall be billed in advance or arrears (depending
on Company's requirements for the Service Plan chosen) for applicable access,
feature and non-usage related charges, and shall be billed for airtime, long
distance and other usage related charges at the end of each billing cycle.
(b) Payment of Invoices. Payment in full for such invoices shall be
-------------------
due at the location set forth in the invoice, in U.S. currency upon the due date
set forth in the invoice. Payments are past due if not received by the due date
shown on the invoice, or within forty-five (45) days after the magnetic tape was
mailed, whichever is later. In the event payment is not received within this
time period, Reseller agrees to pay a late fee as set forth in Schedule 2. The
resolution of payment disputes shall be made in accordance with the provisions
of Section 5.9.3 and Article XV.
If Reseller submits written explanation of any disputed charges by the
due date set forth in an invoice, Reseller is not required to pay disputed
amounts. Company and Reseller shall make good faith reasonable efforts to
resolve the dispute within thirty (30) days, and will agree to submit any
disputes remaining after that thirty (30) day period to arbitration under
Article XV below.
14
<PAGE>
(c) Disputed Charges.
----------------
(i) Except as otherwise provided in subsection (c) below,
Reseller shall provide company with written notice of any disputed End User
airtime or features charges within seventy-five (75) days after the mailing
date of the first invoice containing such charges, provided Reseller shall
in all events make reasonable good faith efforts to give Company notice of
such disputed charges no more than seventy-two (72) Business Hours after
receiving notice from the End User of the disputed charge. This disputed
charge will be handled under Section 5.9.2 above.
(ii) The requirement set forth in the first sentence of Section
5.9.3(a) above shall not shorten the period within which suit must be filed
as established by the applicable statute of limitations, but shall
constitute a condition precedent to any right of the aggrieved party to
contest prior payments. This condition is designed to allow each party the
opportunity to preserve important evidence in defense of a claim.
(iii) If Reseller claims that certain charges are not payable in
full because they are the result of Unauthorized Access by a person with
whom Reseller has not dealt, then it is Reseller's obligation to supply
Company with satisfactory evidence of the Unauthorized Access. Company
considers the following to be satisfactory evidence of Unauthorized Access:
(i) call detail information for the End User's account; and (ii) a
statement by Reseller that it has thoroughly investigated the alleged
Unauthorized Access and that it will cooperate reasonably in obtaining
affidavits or other required documentation required for any prosecution of
the person fraudulently using the Service. Company reserves the right to
modify this provision to require affidavits prior to issuing any credits if
Reseller does not comply with this Section. Such investigation by Reseller
should include contacting or attempting to contact a sufficient number of
recipients of calls at issue of each End User so as to establish a
reasonable basis for inferring that the remainder of such calls were the
result of Unauthorized Access. If Reseller complies with this section
within seventy-five (75) days of the mailing date of the first invoice
containing such charges at issue (or such other time period as set forth in
Schedule 2), charges will be reduced to the extent set forth in Schedule 2.
Notwithstanding the above, the perpetration or claimed perpetration of any
fraud or deceit by an End User (i.e., "subscriber fraud") does not mitigate
the Reseller's obligations to Company.
(d) Proration of Charges. Access fees (if any) with respect to
--------------------
assigned Numbers for billing periods of less than one month will be prorated
based on the actual number of days in such periods. For purposes of such
prorations, each monthly billing
15
<PAGE>
cycle may be deemed, at Company's discretion, to have thirty (30) days. Company
may, at its option, prorate other monthly charges, such as for calling features.
5.1 Modification to Schedule 2. To the extent that the charges set
--------------------------
forth in Schedule 2 are subject to any Federal, state, or local regulation or
tariff, such charges may be increased or decreased as provided or required by
such regulation or tariff, provided that any tariff changes initiated by Company
shall still comply with notice provisions under this Agreement.
5.1 Reseller Right to Select Other Service Plans.
--------------------------------------------
(a) Reseller may order from any Service Plans provided by Company for
which Reseller is eligible. Once selected, the Service Plan and Rate Sheet
associated with it are binding and deemed incorporated into Schedule 2. Rate
Sheets for various Service Plans are available from Company. If Reseller chooses
to order from another Service Plan, the rates will be as listed in the Rate
Sheets for such plan. If Reseller selects a Service Plan with a term commitment,
Company may impose a reasonable cancellation fee if Reseller cancels Service
prior to fulfilling its term commitment.
(b) Reseller may, from time to time, change its selection of Service
Plan under which Service shall be provided to Reseller's Numbers by providing
Company with thirty (30) days advance written notice of the change, provided
that Reseller complies with all of the terms and conditions of the new Service
Plan and this Section 5.11. In such event, Schedule 2 shall be deemed to include
the Rate Sheet for any Service Plan selected by Reseller. Rate Sheets for each
Service Plan are available from Company, and Reseller acknowledges receipt of a
Rate Sheet for any Service Plan selected by Reseller. Any such modification to
Schedule 2 pursuant to this subparagraph shall not be deemed a modification for
purposes of Section 5.10 above.
(c) Notwithstanding the foregoing provisions, the right to change its
Service Plan shall not affect Reseller's obligations to meet the requirements of
the Service Plan previously selected and to pay any fees or charges owed to
Company as a result of failure to meet such requirements. In addition, if
Reseller selects a Service Plan with a term commitment, Company may impose a
reasonable cancellation fee if Reseller cancels Service or changes its Service
Plan prior to fulfilling its term commitment, as described in Schedule 2 for
that Service Plan.
5.1 Loss of Telephones. In the event an End User's Wireless
------------------
Telephone Unit is lost, stolen, or otherwise absent from the End User's
possession or control, Reseller shall nevertheless be liable for all charges
attributable to the access Number assigned to such Wireless Telephone Unit until
it notifies Company during Business Hours of such loss, theft or unauthorized
absence, in which case Reseller's liability therefore shall terminate when such
notification is received by Company.
16
<PAGE>
5.1 Billing Adjustments. In the event of a total service outage
-------------------
("Outage") within the Home Area or any portion of the Home Area associated with
any Number which is not caused by Reseller or End User and which lasts for a
period of twenty-four (24) hours or more, a credit allowance will be made, at
Reseller's request, in the form of a pro rata adjustment of the fixed charges
billed by Company to Reseller with respect to such Number. Periods of
noncontinuous Outage may not be accumulated in determining if an Outage has
continued for at least twenty-four (24) hours. In order to receive such credit,
Reseller must submit a written request to Company, stating the date and location
of the Outage, the Numbers affected, and such other information as Company may
reasonably require. Such notice must be received by Company within ten (10)
business days following the last date of the period of Outage.
ARTICLE 6
LIMITATIONS OF WARRANTIES AND LIABILITIES
Company supplies a service and not "good(s)" as that term is defined
in the Uniform Commercial Code. Notwithstanding and without limitation of the
foregoing, to the extent that any portion of Service offered by Company might be
construed as a good(s), COMPANY EXPRESSLY DISCLAIMS ANY AND ALL IMPLIED
WARRANTIES OF WHATSOEVER NATURE INCLUDING, BUT NOT LIMITED TO, THE WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR USE.
THE LIABILITY OF COMPANY FOR DAMAGES OR COSTS ARISING FROM ERRORS,
OUTAGES, OR FAILURES OF SERVICE, OR DEFECTS OR MALFUNCTIONS OF THE FACILITIES,
OCCURRING IN THE COURSE OF PERFORMING UNDER THIS AGREEMENT (INCLUDING THE
OBTAINING AND FURNISHING OF INFORMATION WITH RESPECT TO RESELLER, END USERS, OR
OTHER USERS OF SERVICE OR FACILITIES), REGARDLESS OF THE LEGAL BASIS FOR SUCH
CLAIM, SHALL IN ANY EVENT BE LIMITED TO AN AMOUNT EQUAL TO THE PROPORTIONATE
CHARGE TO RESELLER FOR THE PERIOD OF SERVICE DURING WHICH SUCH ERRORS, OUTAGES,
FAILURES, DEFECTS, OR MALFUNCTIONS OF EQUIPMENT OCCUR, SUBJECT TO THE ADDITIONAL
LIMITATIONS IN SECTION 5.13 ABOVE.
IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY
PUNITIVE, INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES RESULTING FROM A CLAIM MADE
IN CONNECTION WITH THIS AGREEMENT OR THE PERFORMANCE OR NONPERFORMANCE OF A
PARTY'S OBLIGATIONS HEREUNDER.
17
<PAGE>
ARTICLE 7
RESELLER'S OBLIGATIONS
7.1 Reseller's Charges. Reseller is solely responsible for all
------------------
charges billed under Article V above if billed by Company to Reseller within
ninety (90) days after actual date of usage with respect to any Number assigned
to it, whether or not Reseller's End User has paid Reseller for such charges.
7.2 Equipment.
---------
(a) Reseller is responsible for ensuring that any equipment utilized
by it, its agents, or its End Users in connection with Service and each agent's
and End User's use thereof shall at all times meet industry standards for
compatibility with Service, including any of Company's requirements for
compatibility with upgraded facilities (provided Company gives Reseller the
notice required in Section 8.3 below), and all FCC and other applicable
regulatory authorities' requirements. In the event that any of the equipment
utilized by an agent or End User does not meet such standards, Reseller shall
use its best efforts to ensure that such equipment is no longer used in the
reception or transmission of Service and shall, if necessary, terminate Service
to such agent or End User.
(b) Company shall not be responsible to Reseller or any End User for
the installation, operation, quality of transmission, or testing and maintenance
of any Wireless Telephone Unit or wireless terminal equipment. In that event,
the relationship between Company and Reseller as to such matters shall be
governed by a separate agreement. Company shall have no obligation to sell or
otherwise provide equipment to Reseller or to its End Users.
7.3 Obligations to End Users.
------------------------
(a) With respect to the matters covered by this Agreement, Company
shall be obligated only to Reseller, with which it is in privity of contract,
and not with End Users with whom Company is not in privity. End Users are not,
and shall not be deemed to be, third party beneficiaries of this Agreement.
(b) Reseller shall provide an adequate and properly trained staff to
receive and investigate any complaints from its End Users relating to Service,
and will report any trouble with Service to Company only upon reasonable
verification that such trouble is due to reasons other than the misuse or
malfunctioning of the End User's equipment or the failure of such equipment to
meet the technical standards for compatibility with Service.
18
<PAGE>
(c) Company is not responsible for sending bills to Reseller's End
Users.
7.4 Ethical Responsibilities. Each party shall be governed in all
------------------------
its dealings with respect to this Agreement by the highest standards of honesty,
integrity, and fair dealing.
7.5 Responsibility for Actions or Omissions. Reseller shall be
---------------------------------------
solely responsible for all risks and expenses incurred in connection with its
actions or omissions in the sale of Service. Reseller shall act in all respects
on its own account, and shall be solely responsible for such things as credit
verification, deposits, billing, collection, consolidation, rebilling, End User
complaints, charges for usage, bad debts, and, except as provided in Section
5.9.3(c), Article XI and Schedule 2, abuse or fraudulent use of any Number
assigned to Reseller, whether by Reseller's employees or agents of Reseller, an
End User, or any third party (excepting only actions by Company, Company's agent
or Company's employees) provided Company has followed Reseller's instructions
under this Agreement with respect to any relevant Number.
7.6 Responsibility for Agents. Reseller is responsible for the
-------------------------
performance of its agents, if any, and shall ensure that its agents are in
compliance with any applicable terms of this Agreement, any controlling tariffs,
and any other applicable industry standards, rules and regulations.
7.7 No Rights to Company's Facilities. No provision of this
---------------------------------
Agreement shall be construed as vesting in the Reseller any control or ownership
interest whatsoever in any facilities or operations of Company.
7.8 Notice to End-Users. Reseller agrees that each End User will be
-------------------
given notice to the effect of the restrictions in Section 4.6, 4.7 and 4.8
hereof and of the following provisions:
[END USER] EXPRESSLY UNDERSTANDS AND AGREES THAT IT HAS NO CONTRACTUAL
RELATIONSHIP WHATSOEVER WITH THE UNDERLYING WIRELESS SERVICE CARRIER AND THAT
[END USER] IS NOT A THIRD PARTY BENEFICIARY OF ANY AGREEMENT BETWEEN [RESELLER]
AND UNDERLYING CARRIER. IN ADDITION, [END USER] EXPRESSLY UNDERSTANDS AND AGREES
THAT THE UNDERLYING CARRIER SHALL HAVE NO LEGAL, EQUITABLE OR OTHER LIABILITY OF
ANY KIND TO [END USER]. IN ANY EVENT, REGARDLESS OF THE FORM OF THE ACTION,
WHETHER FOR BREACH OF CONTRACT, WARRANTY, NEGLIGENCE, STRICT LIABILITY IN TORT
OR OTHERWISE, [END USER'S] EXCLUSIVE REMEDY AND THE TOTAL LIABILITY OF THE
UNDERLYING CARRIER ARISING IN ANY WAY IN CONNECTION WITH THIS AGREEMENT, FOR ANY
CAUSE
19
<PAGE>
WHATSOEVER, INCLUDING BUT NOT LIMITED TO ANY FAILURE OR DISRUPTION OF SERVICE
PROVIDED HEREUNDER IS LIMITED TO PAYMENT OF DAMAGES IN AN AMOUNT EQUAL TO THE
PORTION OF THE MONTHLY CHARGES TO [END USER] FOR THE SERVICES RELATING TO THE
PERIOD OF SERVICE DURING WHICH SAID DAMAGES OCCUR.
7.9 Insurance. Reseller shall keep in full force and effect a policy
---------
of public liability, personal injury, property damage, and contractual liability
insurance with respect to the business operated by Reseller, which insurance
shall cover each occurrence in an amount not less than $1,000,000.00 and shall
cover property damage in an amount not less than $500,000.00. Such policy or
policies shall be procured from an insurance carrier reasonably acceptable to
Company. Within ten (10) days after execution of this Agreement, Reseller shall
furnish Company with a certificate evidencing such insurance. Such insurance
shall provide that the insurer will not cancel, materially alter, or allow such
insurance to expire without first giving Company thirty (30) days prior written
notice.
7.1 Security.
--------
(a) Prior to processing any order for Numbers submitted by Reseller,
or at any time during the term of this Agreement, Company may require that
Reseller provide it with an irrevocable letter of credit, issued by a financial
institution and having terms and conditions satisfactory to Company, in such
amount as is required by Company in its sole discretion. A financial institution
will generally be satisfactory to Company if it is a bank chartered under the
laws of the State of one of the Area(s) in which Reseller purchases Service or
the United States with deposits insured by the Federal Deposit Insurance
Corporation ("FDIC") and with an office located within the Area. This security
may be required by Company to secure performance of Reseller's obligations under
this Agreement, and may be based on its assessment of Reseller's
creditworthiness, including Reseller's payment history with Company, and Company
may waive the requirement of a letter of credit, or may increase or decrease the
amount thereof required from Reseller at any time based on Company's
reassessment of Reseller's creditworthiness or an Event of Default under this
Agreement by Reseller. All decisions with respect to the necessity for and
amount of a letter of credit shall be made in Company's sole discretion. At
termination of this Agreement, upon Reseller's full performance of all terms and
conditions of this Agreement, any letter of credit shall be terminated in
accordance with the terms thereof.
(b) From time to time Company may make drawings under the letter of
credit to apply such amounts to sums due hereunder or to cure other breaches by
Reseller. This right of offset is in addition to all other rights and remedies
available to Company under this Agreement or at law or in equity. Reseller shall
increase the face
20
<PAGE>
amount of the letter of credit to an amount acceptable
to Company within ten (10) days of Company's written notice to do so.
(c) In the event Reseller files for bankruptcy protection or an
involuntary bankruptcy petition is filed against Reseller, Company and Reseller
agree that Company shall be entitled to draw down against the letter of credit
any sums that are owed Company at that time. Should Company seek relief from the
automatic stay in order to effect such draw down, although such relief may not
be required under current law, Reseller agrees and stipulates to the entry of
relief from the stay to allow Company to draw down the letter of credit and
agrees to raise no defenses thereto. Company and Reseller stipulate that the
letter of credit and the Reseller's obligations under this Agreement arise out
of the same transaction. Company agrees that the requirements of this Section
7.10 are waived for Reseller.
ARTICLE 8
COMPANY'S OBLIGATIONS
8.1 Company's Service. Company will provide Service to Reseller
-----------------
subject to the terms and conditions specified in this Agreement which will
comply with laws or regulations prohibiting unreasonable discrimination
applicable at the time Service is provided.
8.2 Informational Material. On or before the Effective Date of this
----------------------
Agreement, Company will provide to Reseller, one time at the commencement of
this Agreement, if available, a coverage map of geographic areas where Company's
Service is in effect. Reseller may request in writing no more frequently than
once in any six (6) month period updated informational material as described in
the first sentence of this Section 8.2. Reseller agrees that it shall not
distribute any informational materials provided to Reseller under this Agreement
unless such distribution complies with the requirements and restrictions of
Section 9.1 below.
8.3 Notice of Material Change in Service. Company agrees to provide
------------------------------------
reasonable notice to Reseller (based on circumstances present) of any material
changes in Service of either a permanent or temporary nature.
8.4 Insurance. Company shall keep in full force and effect a policy
---------
of public liability, personal injury, property damage, and contractual liability
insurance with respect to the business operated by Company, which insurance
shall cover each occurrence in an amount not less than $1,000,000.00 and shall
cover property damage in an amount not less than $500,000.00. Such policy or
policies shall be procured from an insurance carrier reasonably acceptable to
Reseller. Within ten (10) days after execution of this Agreement, Company shall
furnish Reseller with a certificate evidencing such
21
<PAGE>
insurance. Such insurance shall provide that the insurer will not cancel,
materially alter, or allow such insurance to expire without first giving
Reseller thirty (30) days prior written notice.
ARTICLE 9
TRADE NAME AND TRADEMARK
9.1 Company's Marks. Reseller recognizes the right, title, and/or
---------------
interest of Company and its Affiliates through ownership or license in and to
all service marks, trademarks, and trade names owned by or used in connection
with Service by Company (the "Marks"). Reseller agrees not to engage in any
activities or commit any acts, directly or indirectly, which may contest,
dispute, or otherwise impair such right, title, and interest of Company and its
Affiliates therein. Reseller shall not acquire or claim any right, title, or
interest in or to the Marks through resale of Service or otherwise. Reseller is
specifically prohibited from incorporating any of the Marks into Reseller Marks
(as defined in Section 9.2 below) or from using any service mark, trademark or
trade name which is confusingly similar to any of the Marks.
9.2 Reseller's Marks. Company recognizes the right, title, and/or
----------------
interest of Reseller and its Affiliates through ownership or license in and to
all service marks, trademarks, and trade names owned by Reseller or used in
connection with the provision of wireless telephone services by Reseller or its
Affiliates (collectively, "Reseller Marks"). Company agrees not to engage in any
activities or commit any acts, directly or indirectly, which may contest,
dispute, or otherwise impair such right, title, and interest of Reseller and its
Affiliates therein. Except as provided in that certain AT&T Wireless Services
Network Membership License Agreement between the Company and AT&T Corp. (the
"Network License"), Company has no rights to the Reseller Marks, shall not use
any Reseller Marks, and shall not mention "AT&T", "AT&T Wireless Services",
"AWS" or any other Reseller Marks used, directly or indirectly, by Reseller in
connection with the Service, without the prior written consent of Reseller,
except in specifically responding to an End User inquiry. Except as provided in
the Network License, Company shall not acquire or claim any right, title, or
interest in or to the Reseller Marks through sale of the Service or otherwise.
Company is specifically prohibited from incorporating any Reseller Marks into
the Marks or from using any service mark, trademark or trade name confusingly
similar to the Reseller Marks, except as provided in the Network License or
specified in Schedule 8.
22
<PAGE>
ARTICLE 10
PROPRIETARY INFORMATION; CONFIDENTIALITY
10. Confidential Information. During the term of this Agreement
------------------------
either party may (but shall not be obligated to) disclose to the other
information which is considered proprietary or confidential by the disclosing
party. Without the disclosing party's specific prior written consent,
disclosure shall not be made to a third party (including but not limited to End
Users) of any information which is designated confidential or proprietary and
which is supplied by the disclosing party to the other party, and which
information is not otherwise generally available to the public or is not already
known to the other party free of any obligation to keep it confidential;
provided, however, either party may disclose such information that has been or
is subsequently made public: (i) by any person other than the parties and the
disclosing party is not attempting to limit further dissemination; (ii) by the
disclosing party; or (iii) by such party as required by law (including
securities laws) or to enforce its rights under this Agreement; provided,
further, that in the event that such party wishes to or must disclose such
information in connection with court processes or similar agency requirements
such party shall give the disclosing party ten (10) days prior written notice of
the proposed disclosure or as much notice as is reasonably possible if the
situation does not permit such ten (10) day notice. The parties agree that
equitable relief is available for any breach or threatened breach of this
Article X.
10. Additional Protection of Confidential Information. In the
-------------------------------------------------
performance of this Agreement, Company and its affiliates, agents and employees
may come into possession of information about Reseller's End Users, including
but not limited to End User MINs and usage, or other forms of identification of
End User. Neither Company nor any person or entity obtaining such information
by or through Company may use any such information except as required to provide
Service to Reseller under this Agreement. Such information shall be treated as
Reseller proprietary information pursuant to Section 10.1 above. However, any
information independently developed by Company which includes Reseller End User
data may be used by Company at its sole discretion.
ARTICLE 11
RESTRICTIONS ON USE
11. Abuse or Fraudulent Use. Service to a Number may be restricted
-----------------------
according to procedures set forth in this Article XI if there is abuse or
fraudulent use thereof. Abuse and fraudulent use of Service include, but are
not limited to:
23
<PAGE>
(a) Attempting or assisting another to access, alter, or interfere
with the communications of and/or information about another Wireless Customer;
(b) Tampering with or making an unauthorized connection with any
Facilities of Company or Reseller;
(c) Subscription Fraud;
(d) Using Service in such manner so as to interfere unreasonably with
the use of Service by one or more other Wireless Customers or End Users or to
interfere unreasonably with Company's or Reseller's ability to provide Service;
(e) Using Service to convey information which is obscene, salacious,
prurient, or unlawful; and
(f) Unauthorized Access.
The parties agree to make good faith efforts to minimize abuse or
fraudulent use as described above, to report any such abuse or fraudulent use a
party becomes aware of to the other party promptly, and to cooperate in any
investigation or prosecution initiated by either party.
Notwithstanding anything in this Agreement to the contrary, as new
technologies and procedures are developed to minimize fraudulent wireless
charges, Reseller and Company agree to cooperate to implement future revisions
to the fraud control policies of their respective systems with the understanding
that such policies will be implemented by Company's systems for all customers
similarly situated to Reseller and that such policies shall benefit both Company
and Reseller.
11. Cancellation of Service to End User. Company may require
-----------------------------------
Reseller to cancel the right to market or use Service by any of its agents or
End Users abusing or fraudulently marketing or using Service. Reseller may
require Company to cancel Service by any End User abusing or fraudulently using
Service.
11. Interference. The parties understand that from time to time one
------------
or more End Users may interfere with the System in such a way as to impair the
quality of Service provided by Company to its Customers; accordingly, upon
discovery of any such abuse by an End User by either of the parties hereto, the
party having such knowledge shall promptly notify the other party, and the
Reseller shall immediately order the End User to cease from engaging in such
act(s) of interference. Company shall have the right upon giving notice to
Reseller to discontinue Service to that End User should such acts continue.
Reseller shall assist Company in taking all actions reasonably necessary to
prevent further interference.
24
<PAGE>
ARTICLE 12
INDEMNIFICATION
Reseller and Company each hereby agree to defend, indemnify, and hold
harmless each other and each other's Affiliates, and their former, current, and
future officers, directors, employees, agents, successors, and assigns, from and
against any claims, costs, and expenses, including punitive damages, court
costs, and reasonable attorneys' and expert witness' fees before and at trial
and on appeal (collectively, "Claims"), arising from a breach of this Agreement
by, or any conduct in connection with this Agreement of, the indemnifying party
(including such party's Affiliates, and their officers, directors, employees,
agents, and contractors). Reseller further agrees to defend, indemnify, and
hold harmless Company, their Affiliates, and former, current, and future
officers, directors, employees, agents, successors, and assigns, from and
against any Claims of End Users; provided, however, that the obligations (of
both Reseller and Company) to defend, indemnify, and hold harmless shall not
apply to the extent such Claims result from the other party's gross negligence
or willful misconduct.
Within ten (10) days after being notified of any Claim to which these
indemnification obligations may apply, the party receiving such notice shall
notify the party from whom the indemnification is sought (the "Indemnifying
Party"), and shall give reasonable opportunity to the Indemnifying Party to
defend the claim at its own expense and with counsel of its own selection;
provided, however, that the party seeking indemnification shall at all times
have the right to participate fully (at its own expense) in the defense of and
to approve any settlement of the Claim.
If the Indemnifying Party shall, within thirty (30) days after notice,
fail to accept defense of the Claim, then the party seeking indemnification
shall have the right, but not the obligation, to undertake the defense of, and
to compromise or settle (exercising reasonable business judgment), the Claim on
behalf, for the account, and at the risk of the Indemnifying Party. If the
Claims cannot by their nature be defended solely by one party, the other party
shall make available all information and assistance that may reasonably be
requested, regardless of any obligations to indemnify hereunder.
ARTICLE 13
DEFAULT AND TERMINATION
25
<PAGE>
13. Default. In addition to termination in accordance with Article
-------
III above and as elsewhere provided in this Agreement, this Agreement may be
terminated upon an Event of Default by either party if such Event of Default is
not cured by the defaulting party within thirty (30) days after receipt of
written notice of the Event of Default; provided, however, that (i) in the case
of a violation of the eligibility requirements of Article II, this Agreement may
be terminated if such Event of Default is not cured within twenty (20) days
after receipt of written notice of the Event of Default; (ii) in the case of a
violation of Article IX, this Agreement may be terminated if such Event of
Default is not cured within ten (10) days after receipt of written notice of the
Event of Default or (iii) in the case of an Event of Default that by its nature
is not capable of being cured during such 30-day period, such party may not
terminate this Agreement so long as the defaulting party commences to cure the
default during such 30-day period and continues thereafter to diligently
complete such cure.. If such Event of Default remains uncured, termination
shall be effective on the expiration of the cure period without the requirement
of additional notice.
13. Right to Pursue Remedies. If this Agreement is terminated as a
------------------------
result of an Event of Default attributable to Reseller, Company shall have the
immediate right, without further notice or proceedings, to deduct any amounts
due from the security referenced in Section 7.10 above and to pursue such
remedies and other actions as Company may deem appropriate.
13. Survival of Obligations. The obligations undertaken by the
-----------------------
parties pursuant to Articles V (except Section 5.11 only), IX, X, XII, XIII, and
XV shall survive termination of this Agreement.
13. Continuing Obligations. Termination pursuant to the terms of
----------------------
this Agreement, regardless of cause or nature, shall be without prejudice to any
other rights or remedies of the parties, and Reseller shall remain solely
responsible for its obligations to its agents and End Users. Termination of
this Agreement with or without cause shall not release either party hereto from
any liability which at the time of termination has already accrued to the other
party or which thereafter may accrue with respect to any act or omission prior
to termination, or from any obligation which is expressly stated herein to
survive termination; provided, however, that Company may, without liability,
cancel any previously accepted orders for Numbers which have not been assigned
to End Users on or before the date of termination.
13. No Company Obligation for Continuing Service to End Users. Upon
---------------------------------------------------------
termination, Company shall have no further obligation to provide Service to
Reseller under this Agreement. However, in order to avoid disruption of Service
to End Users, Reseller will reasonably cooperate with the Company to enable the
Company to continue Service directly to any End User who meets Company's credit
requirements, and enters into a contract for Service with the Company. From and
after the termination date,
26
<PAGE>
Company may re-route calls using any Numbers previously assigned to Reseller so
that any attempts to access Service will result in connection to Company's
personnel, who will advise callers of the termination. Notwithstanding anything
in this Agreement to the contrary, but provided that Company has met all its
obligations hereunder, Company is not restricted in any way from providing
Service directly to any End User who may request that Company do so.
ARTICLE 14
ASSIGNMENT
No rights or obligations hereunder shall be assigned or delegated, in
whole or in part, by either party to any other person, firm, corporation, or
other entity without the other party's prior written consent, which consent will
not be unreasonably withheld, except (i) that either party may assign or
delegate its rights and obligations hereunder to an Affiliate of that party at
the time this Agreement is made, (ii) the Company may assign or delegate its
rights and obligations hereunder to any of its operating subsidiaries created
after the date hereof; and (iii) either party may assign or delegate its rights
and obligations hereunder to an entity to whom the outstanding common stock or
substantially all the assets of Company are transferred after first receiving
FCC or other necessary governmental approvals. For purposes of this provision,
any change in the ultimate control of a party, by stock sale, merger,
consolidation, or any other means, shall constitute an assignment subject to the
consent requirements hereof. The parties agree that equitable relief is
available for any breach or threatened breach of this Article XIV.
ARTICLE 15
ARBITRATION; JURISDICTION; GOVERNING LAW
15. State Law. The validity, construction, and performance of this
---------
Agreement shall be governed by and interpreted in accordance with the laws of
the State of New York.
15. Dispute Resolution.
------------------
(a) The parties shall use and strictly adhere to the following
dispute resolution processes, except as otherwise expressly provided in this
Section 15.2, to resolve any and all disputes, controversies or claims, whether
based on contract, tort, statute, fraud, misrepresentation or any other legal or
equitable theory (hereinafter, "Dispute(s)"), arising out of or relating to this
Agreement (and any prior agreement this Agreement supersedes), including without
limitation, its making, termination, non-renewal, its alleged breach and the
subject matter of this Agreement (e.g., products or services furnished hereunder
or those related to those furnished):
27
<PAGE>
(b) The parties shall first attempt to settle each Dispute through
good faith negotiations. The aggrieved party shall initiate such negotiations
by giving the other party(ies) written notice of the existence and nature of the
Dispute. The other party(ies) shall in a writing to the aggrieved party
acknowledge such notice of Dispute within ten (10) business days. Such
acknowledgment may also set forth any Dispute that the acknowledging party
desires to have resolved in accordance with this Section.
(c) Thereafter, if any Dispute is not resolved by the parties through
negotiation within thirty (30) calendar days of the date of the notice of
acknowledgment, either party may terminate informal negotiations with respect to
that Dispute and request that the Dispute be submitted to non-binding mediation.
Any mediation of a Dispute under this Section shall be conducted by the CPR
Institute for Dispute Resolution ("CPR") in accordance with the then current CPR
"Model Mediation Procedure for Business Disputes" ("Model Procedures") and the
procedures specified in this Section to the extent that they conflict with,
modify or add to such Model Procedures. Any demand for initiation of mediation
of a Dispute must be given in writing to both the other party(ies) involved and
to the CPR and must set forth the nature of the Dispute. Each party to the
mediation shall bear its own expenses with respect to mediation and the parties
shall share equally the fees and expenses of the CPR and the mediator. The
failure by a party to timely pay its share of the mediation fees and expenses of
the CPR and the mediator shall be a bar to arbitration under Section 15.2(d) of
that party's Dispute(s). Any mediation under this Section shall be conducted
within the State of New York at a site selected by the mediator that is
reasonably convenient to the parties. Each party shall be represented in the
mediation by representatives having final settlement authority with respect to
the Dispute(s). All information and documents disclosed in mediation by any
party shall remain private and confidential to the disclosing party and may not
be disclosed by any party outside the mediation. No privilege or right with
respect to any information or document disclosed in mediation shall be waived or
lost by such disclosure.
(d) Any Dispute not finally resolved after negotiation and mediation
in accordance with Section 15.2(b) and 15.2(c) shall, upon the written demand of
any involved party delivered to the other party(ies) and the CPR, be finally
resolved through binding arbitration in accordance with the then current CPR
"Non-Administered Arbitration Rules" ("Arbitration Rules") and the procedures
specified in this Section to the extent that they conflict with, modify or add
to such Arbitration Rules. Any Dispute of any other party not finally resolved
after negotiation and mediation pursuant to this Section may be made a part of
the arbitration demanded by another party, provided that the written notice of
demand for arbitration of that Dispute is received by the CPR before selection
of an arbitrator by the CPR. Any demand for arbitration of a Dispute received
by the CPR after the selection of the arbitrator must be resolved through a
separate arbitration proceeding in accordance with this Section. Each party
shall bear its own
29
<PAGE>
expenses with respect to arbitration and the parties shall share equally the
fees and expenses of the CPR and the arbitrator. Unless otherwise mutually
agreed by the parties in writing, the arbitration shall be conducted by one (1)
neutral arbitrator. The arbitration shall be conducted in the State of New York
at a site selected by the arbitrator that is reasonably convenient to the
parties. The arbitrator shall be bound by and strictly enforce the terms of the
Agreement and may not limit, expand, or otherwise modify the terms of this
Agreement. The arbitrator shall make a good faith effort to apply applicable
law, but an arbitration decision and award shall not be subject to review
because of errors of law. The arbitrator shall have the sole authority to
resolve issues of the arbitrability of any Dispute, including the applicability
or running of any statute of limitation. The arbitrator shall not have power to
award damages in connection with any Dispute in excess of actual compensatory
damages or to award punitive damages and each party irrevocably waives any claim
thereto. The arbitrator shall not have the power to order pre-hearing discovery
of documents or the taking of depositions. The arbitrator may compel, to the
extent provided by the FAA, attendance of witnesses and the production of
documents at the hearing. The arbitrator's decision and award shall be made and
delivered to the parties within six (6) months of selection of the arbitrator by
the CPR and judgment on the award by the arbitrator may be entered by any court
having jurisdiction thereof.
(e) This Section shall be interpreted, governed by and enforced in
accordance with the United States Arbitration Act, 9 U.S.C. Sections 1-14 (the
"Federal Arbitration Act" or "FAA"). The laws of the State of New York, except
those pertaining to choice of law, arbitration of disputes and those pertaining
to the time limits for bringing an action that conflict with the terms of this
Dispute Resolution provision, shall govern all other substantive matters
pertaining to the interpretation and enforcement of the other terms of this
Agreement with respect to any Dispute. Any party to a Dispute, which is the
subject of a notice initiating the Dispute resolution procedures under this
Section, may seek a temporary injunction in any state or federal court of
competent jurisdiction to the limited extent necessary to preserve the status
quo during the pendency of final resolution of a Dispute in accordance with this
Section. If court proceedings to stay litigation of a Dispute or compel
arbitration of a Dispute are necessary, the party who unsuccessfully opposes
such proceedings shall pay all associated costs, expenses, and attorneys' fees
that the other party reasonably incurs in connection with such court
proceedings. An order to pay such costs, expenses and attorney fees shall become
part of any decision and award of the arbitrator of the Dispute. An arbitrator
appointed pursuant to Section 15.2(d) to resolve a Dispute may also issue such
injunctive orders and shall have the power to modify or dissolve the injunctive
order of any court to the extent it pertains to the Dispute which the arbitrator
has been selected to finally resolve. The parties, their representatives, other
participants, and the mediator and arbitrator shall hold the existence, content,
and result of the mediation and arbitration of a Dispute in confidence except to
the limited extent necessary to enforce a final settlement agreement or to
obtain and secure enforcement of or a judgment on an arbitration decision and
award.
29
<PAGE>
(f) The statute(s) of limitation applicable to any Dispute shall be
tolled upon initiation of the Dispute resolution procedures under this Section
and shall remain tolled until the Dispute is resolved by mediation or
arbitration under this Section. Tolling shall cease if the aggrieved party with
a Dispute does not initiate mediation within sixty (60) calendar days after good
faith negotiations are terminated by any party and, after mediation of a
Dispute, if the aggrieved party with a Dispute does not initiate a demand for
arbitration within sixty (60) calendar days after mediation is terminated.
However, any Dispute is forever barred that has not expressly been made the
subject of the written notice required under Section 15.2(b) above within 365
days after the date the Party asserting the Dispute first knows or should have
known of the existence of the acts or omissions that give rise to such Dispute.
(g) Unless the parties mutually agree in writing, Disputes relating
to trademarks (including service marks), patents and copyrights shall not be
resolved in accordance with the Dispute resolution procedures set forth in this
Section and shall be resolved as otherwise provided in this Agreement.
(h) The parties hereto hereby irrevocably consents to the exclusive
jurisdiction of the state or federal courts in the State of New York, and all
state or federal courts competent to hear appeals therefrom, over any actions
which may be commenced against any of them under or in connection with this
Agreement. The parties hereto hereby irrevocably waives, to the fullest extent
permitted by applicable law, any objection which any of them may now or
hereafter have to the laying of venue of any such dispute brought in such court
or any defense of inconvenient forum for the maintenance of such dispute in the
Southern District of New York and New York County. The parties hereto hereby
agrees that a judgment in any such dispute may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
The parties hereto hereby consents to process being served by any party to this
Agreement in any actions by the transmittal of a copy thereof in accordance with
the provisions of Article 15.
ARTICLE 16
MISCELLANEOUS
16. Headings. Headings to Articles and Sections of this Agreement
--------
are to facilitate reference only, do not form part of this Agreement, and shall
not in any way affect the interpretation hereof.
16. Waiver. Failure on the part of Company to send any notice
------
provided for in this Agreement does not affect the obligations of Reseller under
this Agreement. The waiver, express or implied, by either party of any rights
hereunder or of any failure to perform or breach hereof by the other party shall
not constitute or be
30
<PAGE>
deemed a waiver of any other right hereunder or any other failure to perform or
breach hereof by the other party, whether of a similar or dissimilar nature.
1.83 No Agency. Neither party is authorized to act as an agent for,
---------
or legal representative of, the other party, nor shall either party have
authority to assume or create any obligation on behalf of, in the name of, or
that shall be binding upon, the other party. Reseller shall not represent
itself as an agent of Company in any manner not specifically provided for
herein. All sales by Reseller shall be in its own name and for its own account.
1.84 Notices. Except as otherwise provided in this Agreement, all
-------
notices or other communications required or permitted to be given hereunder
shall be in writing and shall be delivered (i) personally against receipt; (ii)
by certified mail, return receipt requested; (iii) by an overnight courier
service having a record of receipt; or (iv) by facsimile, with a confirming copy
sent by one of the other three methods described in this sentence. Notices
shall be addressed as follows:
(1) If to Company:
Triton PCS Operating Company L.L.C.
101 Lindenwood Drive, Suite 125
Malvern, PA 19355
Attention: Mr. Michael E. Kalogris
Mr. Steven R. Skinner
Phone: (610) 651-5900
FAX: (610) 993-2683
With a copy to:
Kleinbard, Bell & Brecker LLP
1900 Market Street, Suite 700
Philadelphia, PA 19103
Attention: Howard J. Davis
Phone: (215) 568-2000
FAX: (215) 568-00140
31
<PAGE>
(2) If to Reseller:
AT&T Wireless Services, Inc.
Attention: Reseller Manager
5000 Carillon Point
Kirkland, WA 98033
Phone: (425) 827-4500
Fax: (425) 828-1380
with a copy to:
AT&T Wireless Services, Inc.
Attention: Legal Department
5000 Carillon Point
Kirkland, WA 98033
Phone: (425) 827-4500
Fax: (425) 828-1729
Either party hereto may change its address by a notice given to the
other party hereto in the manner set forth above. All notices shall be
effective on receipt.
1.85 Forms. All notices and communications given by Reseller to
-----
Company under this Agreement -- including orders, assignment requests,
deactivation requests, suspension requests, feature modifications, fraud
notices, etc. -- shall be submitted by Reseller on forms prescribed by Company.
This Section does not apply to any notice of termination of the Agreement.
Company may, at its option, approve the use of non-standard forms and may
condition any such approval on payment of a reasonable charge for the handling
of non-standard forms. A request to use a non-standard form will not be
unreasonably denied.
1.86 Severability. Should any part of this Agreement for any reason
------------
be declared invalid by court order or by any regulatory agency, such order shall
not affect the validity of any remaining portion, and the remaining portion of
the Agreement shall continue in full force and effect, unless such order
materially alters the nature of the obligations of either party hereto. In such
event, this Agreement shall immediately terminate.
1.87 Force Majeure. Each party's performance under this Agreement
-------------
shall be excused if such non-performance is due to labor difficulties,
governmental orders, equipment failure, inability or delay in securing
equipment, civil commotion, acts of nature, weather disturbances or adverse
weather conditions, and other circumstances beyond the party's reasonable
control.
32
<PAGE>
1.88 Merger/Entire Agreement. With respect to the subject matter
-----------------------
hereof, this Agreement, including the Schedules and Exhibits hereto, represents
the entire agreement between the parties hereto and, except as expressly
provided, shall not be affected by reference to any other documents. The
attached Schedules (and the Exhibits thereto) are a material and integral part
of this Agreement. The terms and conditions of this Agreement supersede any
other agreements or understandings, including prior or contemporaneous
representations of sales representatives or other Company personnel, whether
oral or written. Notwithstanding the foregoing, if the parties have previously
entered into a written agreement pursuant to which Reseller acquired Service
from Company prior to the effectiveness of this Agreement, the provisions of
such earlier agreement shall be terminated and superseded by the terms hereof,
except to the extent that provisions thereof specifically survive termination
and with respect to payment and other obligations incurred prior to the
termination thereof.
1.89 Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall constitute an original agreement, but all of
which together shall constitute one and the same instrument.
1.90 Compliance With Laws. Company and Reseller shall at all times
--------------------
comply in all material respects with all laws, rules, and regulations applicable
to the performance of this Agreement. If continued performance by Company or
Reseller of one or more provisions under this Agreement would violate or be
inconsistent with applicable law, including any judicial or regulatory decree
binding on that party, then, that party will provide the other party with as
much notice as is reasonable under the law or regulation and thereafter unless
the parties mutually agree to continue performance of this Agreement without
such provision(s), within thirty (30) days of such notice or such shorter time
as required by the law or regulation, this Agreement shall terminate. Each of
Company and Reseller shall be separately responsible for all required payments
or fees applicable to its business (including provision of the Service to
Customers or End Users, as applicable), including without limitation payments or
fees required by the FCC, universal service provisions or NECA.
1.91 Amendments. In addition to Company's right to provide a renewal
----------
agreement as provided in Section 3 hereof, this Agreement (and/or the Schedules
hereto) may be amended by mutual agreement of the parties. Reseller further
acknowledges that, from time to time, Company may find it necessary to change or
update certain procedures set forth in this Agreement in order to more
efficiently conduct its business and provide Service to Reseller, including,
without limitation, to reflect acquisitions or dispositions of Wireless Systems
or the commencement of Service in additional geographical areas. Such changes or
updates may be accomplished by Company providing thirty (30) days written notice
to Reseller and Reseller consenting to such change within thirty (30) days of
notice, such consent not to be unreasonably withheld. This Agreement shall be
33
<PAGE>
deemed automatically amended to the extent it is inconsistent with any tariff
required to be filed by Company.
1.92 The Reseller. AT&T Wireless Services, Inc. may act on behalf of
------------
each and every Reseller for any purpose arising under this Agreement. If any of
such entities shall cease to be affiliated with AT&T Wireless Services, Inc., or
its successors in interest, this Agreement must be terminated or amended by such
entity at such time as the affiliation shall cease, upon thirty (30) days
written notice. Upon any such disaffiliation, Schedules 1 and 2 shall be
amended accordingly. In addition, if any of such entities shall cease to be
affiliated with AT&T Wireless Services, Inc., the minimum Number Block, if any,
as may be required by Schedule 2 from time to time, shall be computed only with
respect to the markets operated by Affiliates of AT&T Wireless Services, Inc.
within the Areas in which Reseller continues to receive Service pursuant to this
Agreement. If the disaffiliation of any entity shall result in Reseller's
failure to comply with any of such provisions, Reseller shall be given thirty
(30) days within which to attain compliance and Reseller shall have the right to
elect during such period to terminate this Agreement by giving thirty (30) days
advance notice without being in breach hereof.
1.93 Successors and Assigns. This Agreement shall be binding upon,
----------------------
and inure to the benefit of, the parties hereto and their respective successors
and permitted assigns.
1.94 Preparation of Agreement. This Agreement shall not subject to
------------------------
any rule of construction or interpretation based on which party was responsible
for its preparation or drafting.
34
<PAGE>
ARTICLE 17
INDEPENDENT INVESTIGATION
COMPANY AND RESELLER ACKNOWLEDGE THEY HAVE READ THIS AGREEMENT AND
UNDERSTAND AND ACCEPT THE TERMS, CONDITIONS, AND COVENANTS CONTAINED HEREIN.
RESELLER ACKNOWLEDGES AND UNDERSTANDS THAT COMPANY MAY AT ANY TIME ALSO BE
ENGAGED DIRECTLY OR INDIRECTLY THROUGH OTHER DEALERS, OR OUTLETS OF ANY KIND, IN
SOLICITING POTENTIAL CUSTOMERS FOR THE SERVICE OR OTHER SERVICES OR PRODUCTS OR
FOR THE SALE, LEASE, INSTALLATION, REPAIR, OR SERVICING OF EQUIPMENT IN THE
AREA. RESELLER ALSO ACKNOWLEDGES AND UNDERSTANDS THAT COMPANY MAY SELL THE
SERVICE TO OTHERS WHO MAY RESELL IT. RESELLER HAS INDEPENDENTLY INVESTIGATED THE
CELLULAR SERVICE OR EQUIPMENT SALE/LEASING BUSINESS AND THE PROFITABILITY (IF
ANY) AND RISKS THEREOF AND IS NOT RELYING ON ANY REPRESENTATION, GUARANTEE, OR
STATEMENT OF COMPANY OTHER THAN AS SET FORTH IN THIS AGREEMENT.
IN PARTICULAR, RESELLER ACKNOWLEDGES THAT COMPANY DOES NOT MAKE ANY
REPRESENTATIONS, WARRANTIES OR COVENANTS REGARDING: (a) RESELLER'S PROSPECTS OR
CHANCES FOR SUCCESS SELLING SERVICES UNDER THIS AGREEMENT; (b) THE TOTAL
INVESTMENT THAT RESELLER MAY NEED TO MAKE TO OPERATE UNDER THIS AGREEMENT
(COMPANY DOES NOT KNOW THE AMOUNT OF THE TOTAL INVESTMENT THAT MAY BE REQUIRED
FOR THIS PURPOSE); OR (c) THAT THE COMPANY WILL LIMIT ITS EFFORTS TO SELL
SERVICE OR ESTABLISH OTHER RESELLING CUSTOMERS IN THE AREA.
RESELLER ALSO ACKNOWLEDGES THAT COMPANY DOES NOT MAKE ANY
REPRESENTATIONS, WARRANTIES OR COVENANTS TO THE EFFECT THAT: (a) COMPANY WILL
PROVIDE LOCATIONS OR ASSIST RESELLER TO FIND LOCATIONS TO PROMOTE THE SALE OF
SERVICE UNDER THIS AGREEMENT; (b) COMPANY WILL PURCHASE ANY PRODUCTS MADE BY
RESELLER THAT ARE IN ANY WAY ASSOCIATED WITH THE SERVICE SOLD BY RESELLER UNDER
THIS AGREEMENT; (c) THE AMOUNT OF PROFITS, NET OR GROSS, THAT RESELLER CAN
EXPECT FROM ITS OPERATIONS UNDER THIS AGREEMENT OR THAT RESELLER WILL DERIVE
INCOME FROM THE SALE OF COMPANY'S SERVICES UNDER THIS AGREEMENT, OR COMPANY WILL
REFUND ANY PAYMENTS MADE BY RESELLER TO COMPANY UNDER THIS AGREEMENT EXCEPT AS
OTHERWISE PROVIDED HEREIN; OR (d) COMPANY WILL PROVIDE A SALES OR
35
<PAGE>
MARKETING PROGRAM THAT WILL ENABLE RESELLER TO DERIVE INCOME UNDER THIS
AGREEMENT.
RESELLER FURTHER ACKNOWLEDGES THAT, EXCEPT AS SPECIFICALLY SET FORTH
IN THIS AGREEMENT, COMPANY DOES NOT MAKE ANY REPRESENTATIONS, WARRANTIES OR
COVENANTS REGARDING: (a) THE QUANTITY OR QUALITY OF SERVICE TO BE SOLD BY
RESELLER; (b) THE PROVISION BY COMPANY TO RESELLER OF TRAINING AND MANAGEMENT
ASSISTANCE; (c) THE SIZE (OTHER THAN THE GEOGRAPHIC AREA), CHOICE, POTENTIAL, OR
DEMOGRAPHIC NATURE OF THE AREA IN WHICH COMPANY'S SERVICE IS AVAILABLE OR THE
NUMBER OF OTHER DEALER OR RESELLING CUSTOMERS THAT ARE OR MAY IN THE FUTURE
OPERATE IN THAT AREA; (d) THE TERMINATION, TRANSFER, OR RENEWAL PROVISIONS OF
THIS AGREEMENT OTHER THAN AS SET FORTH IN THE AGREEMENT; OR (e) THE SPONSORSHIP
OR PARTICIPATION OF A PRIMARY MARKETER OF TRADEMARKED PRODUCTS OR SERVICES IN
RESELLER'S OPERATIONS UNDER THIS AGREEMENT OTHER THAN AS MAY BE SET FORTH IN
THIS AGREEMENT.
RESELLER ACKNOWLEDGES THAT IT UNDERSTANDS THAT IT WILL NOT OBTAIN ANY
EXCLUSIVE RIGHTS UNDER THIS AGREEMENT, EITHER WITH RESPECT TO A TERRITORY OR
OTHERWISE, AND UNDERSTANDS THAT COMPANY MAY APPOINT OTHER DEALERS OR RESELLERS
IN THE AREA AFFECTED BY THIS AGREEMENT. RESELLER ALSO ACKNOWLEDGES THAT COMPANY
CANNOT CALCULATE IN ADVANCE THE TOTAL AMOUNT THAT RESELLER MUST PAY TO COMPANY
UNDER THIS AGREEMENT AS THAT AMOUNT DEPENDS ON THE QUANTITY OF SERVICE THAT
RESELLER'S END USERS PURCHASE.
COMPANY ACKNOWLEDGES THAT RESELLER MAY AT ANY TIME SOLICIT POTENTIAL
CUSTOMERS FOR CELLULAR TELEPHONE SERVICE PROVIDED BY RESELLER DIRECTLY OR
INDIRECTLY THROUGH BUSINESS RELATIONSHIPS WITH ENTITIES COMPETING WITH COMPANY.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers as of the day and year first above
written.
COMPANY: RESELLER:
TRITON PCS OPERATING dba AT&T Wireless Services
COMPANY L.L.C.
By__________________________
By__________________________ Name:_____________________
36
<PAGE>
Name:_____________________ Title:______________________
Title:______________________
37
<PAGE>
SCHEDULE 1
- --------------------------------------------------------------------------------
State Area Operating Entity/Licensee
- --------------------------------------------------------------------------------
<PAGE>
SCHEDULE 1A
AREA DESIGNATION ADDENDUM
Reseller Area Designation. Reseller elects to provide Service to End Users in
the following Areas by marking the box(es) opposite the name of each such Area.
- --------------------------------------------------------------------------------
Area Reseller Area Designation
- --------------------------------------------------------------------------------
<PAGE>
SCHEDULE 2
Service Plan Rates, Terms & Conditions
Rates will vary depending upon the Rate Plan selected by Reseller for any
Number. The following pages contain the Rate Plans and Billing Guidelines
associated with each Home Area, as indicated below. Each Schedule 2 Exhibit
contains a Schedule of Charges by Area.
<PAGE>
SCHEDULE 2 - EXHIBIT ____
Effective ___________, 19__
Schedule of Charges for Service and Service Features
and Order/Billing Information
for ______________Areas
set forth in Schedule 1A
1. Provisions Applicable to ALL Service Plans
1. Billing Guidelines for Calls. Calls are billed in full minute
----------------------------
increments with partial minutes of use rounded up and billed as whole minutes.
The length of calls is measured (i) for calls originated from the Wireless
Telephone Unit, from the time the End User presses the "SEND" key or "YES" key,
and ends when the Unit disconnects from the Company's facilities or when the End
User presses the "END" or "NO" key if sooner; or (ii) for calls received by the
Unit, from the time the Unit responds to a page and ends when the Unit
disconnects from Company's facilities. When airtime is charged for feature use
without radio airtime being used, measurement is based on switch access time.
2. Dropped Calls. Calls may be "dropped" (i.e., involuntarily
-------------
disconnected) for a variety of reasons, including atmospheric conditions,
topography, weak batteries, system overcapacity, movement outside a Service
area, and gaps in coverage within a Service area. Dropped calls will be billed
as any other call. If Reseller's End Users have a problem with dropped calls,
Reseller should call the Reseller coordinator. If Company believes a credit is
appropriate, it may reduce the charges accordingly.
3. Details for Paper Bill. The monthly paper bill provided to Reseller
----------------------
shall include the following information for each Number:
1. Total minutes of peak home airtime and related charges;
2. Total minutes of off-peak home airtime and related charges;
3. Long distance charges assessed by Company;
4. Roaming charges;
5. Access and feature charges; and
<PAGE>
6. Other charges. The paper bill will also report the aggregate minutes
-------------
of home airtime billed, peak and off-peak, as well as the total amount of the
invoice.
4. Late Payment Fee. Reseller shall be charged a fee of 1.5 % of the
----------------
account balance per monthly invoice that is not paid by the due date or the
maximum allowed by law, whichever is less.
5. Minimum Numbers Required. Company shall not be obligated to activate
------------------------
Numbers on the Service Plan selected by Reseller unless Reseller shall then have
at least ten (10) Numbers active on such plan. Additional Number Block shall be
provided under the terms of the Agreement on request of Reseller provided that
any later Number Block is not less than five (5) Numbers.
2. Applicable to Reseller Rate Plan.
- --------------------------------------------------------------------------------
Rate Plan Charges Description Cost
- --------------------------------------------------------------------------------
Rate Plan Charges Description Cost
- --------------------------------------------------------------------------------
Order Information Description Number
- --------------------------------------------------------------------------------
Rate Plan Charges Description Cost
- --------------------------------------------------------------------------------
1. Allocation of Charges Arising From Abuse or Fraudulent Use.
----------------------------------------------------------
Unauthorized Access. In the event of Abuse or Fraudulent Use (as defined
-------------------
in Article XI, Section 11.1) to Service, except as otherwise provided in Section
11.4, Reseller shall be responsible for charges arising therefrom, but only to
the following extent:
0% of the normal charge with respect to Home Area airtime;
<PAGE>
0% of the normal charge with respect to roaming charges; and
0% of the normal charge with respect to long distance charges and other
special usage-based charges such as directory assistance.
2. Monthly Feature Charges. Monthly feature charges will not be pro-
-----------------------
rated, i.e., Reseller will be billed for the full monthly feature charge
whenever that feature is activated for any portion of a billing cycle.
3. Provisions Applicable to All Service Plans other than Reseller Rate Plan.
1. Applicability. These provisions apply to each Service Plan other
-------------
than Reseller Rate Plan described in II above. Except as provided below or in
Section I of this Schedule 2, the terms of each other Service Plan shall be
governed by the applicable rate or features sheet.
2. Monthly Feature Charges. Monthly feature charges will be prorated
-----------------------
for any billing cycle during which the feature is activated or deactivated.
<PAGE>
INITIAL SELECTION OF SERVICE PLAN
The undersigned Reseller, having reviewed Schedule 2 to the Agreement
Relating to the Resale of Cellular Service between Reseller and Company, and
having independently analyzed the options available, has chosen the following
Service Plan(s):
_____ Reseller Service Plan (Selection II of Schedule 2)
_____ Other (Specify name of Service Plan) __________________________________
Reseller:
_________________________________________
[Print Name of Reseller]
By: ____________________________________
Its: ____________________________________
Date ____________________________________
<PAGE>
SCHEDULE 3
Initial Deposit Requirements
WAIVED
<PAGE>
SCHEDULE 4
REMOTE ACCESS PROCEDURES
<PAGE>
SCHEDULE 5
Optional Election by Reseller
for Advance Notice of Unauthorized Access
The undersigned Reseller hereby directs Company to only deactivate
Service after receiving permission from Reseller if (i) a "collision report"
shows that a Number or range of Numbers assigned to the undersigned has been the
subject of use, or is suspected of being used, for Unauthorized Access, or (ii)
there is a deviation from the profiled usage of such Number or range of Numbers
using Company's then existing proprietary criteria, or (ii) there is any other
reasonable suspicion of Unauthorized Access.
Reseller understands and agrees that Reseller has full liability for all
charges, costs or liabilities resulting from any Unauthorized Access until four
(4) hours after Reseller notifies Company that Reseller permits deactivation of
the Numbers suspected of being used for Unauthorized Access. Reseller further
agrees that Company will assume no responsibility for the deactivation of
Numbers which are later shown not to have been the subject of Unauthorized
Access, and that Company will not be responsible for charges incurred before the
Number or Numbers are deactivated.
_________________________________________
Reseller Name
By: _____________________________________
Authorized Representative
Date:____________________________________
<PAGE>
SCHEDULE 6
ROAMING CHARGES AGREEMENT
<PAGE>
EXHIBIT D
================================================================================
TRITON PCS HOLDINGS, INC.
AMENDED AND RESTATED
BYLAWS
Adopted as of February 4, 1998
================================================================================
<PAGE>
AMENDED AND RESTATED BYLAWS
TRITON PCS HOLDINGS, INC.
ARTICLE 1.
STOCKHOLDERS
1.1 Annual Meeting. The annual meeting of the stockholders of the
--------------
Corporation for the election of directors and for the transaction of such other
business as may properly come before such meeting shall be held at such place,
either within or without the State of Delaware, at 9:00 A.M. on the second
Wednesday of each April of each year (or, if such day is a legal holiday, then
on the next succeeding business day), or at such other date and hour, as may be
fixed from time to time by resolution of the Board of Directors and set forth in
the notice or waiver of notice of the meeting.
1.2 Special Meetings. Special meetings of the stockholders may be
----------------
called at any time by the Chairman of the Board (or, in the event of his absence
or disability, by the President), or by the Board of Directors. A special
meeting shall be called by the Chairman of the Board (or, in the event of his
absence or disability, by the President), or by the Secretary, immediately upon
receipt of a written request therefor by stockholders holding in the aggregate
not less than 10% of the outstanding shares of the Corporation at the time
entitled to vote at any meeting of the stockholders. If such officers or the
Board of Directors shall fail to call such meeting within 20 days after receipt
of such request, any stockholder executing such request may call such meeting.
Any such special meeting of the stockholders shall be held at such place, within
or without the State of Delaware, as shall be specified in the notice or waiver
of notice thereof.
1.3 Notice of Meetings; Waiver. The Secretary or any Assistant
--------------------------
Secretary shall cause written notice of the place, date and hour of each meeting
of the stockholders, and, in the case of a special meeting, the purpose or
purposes for which such meeting is called, to be given personally or by mail,
not less than ten nor more than 60 days before the date of the meeting, to each
stockholder of record entitled to vote at such meeting. If such notice is
mailed, it shall be deemed to have been given to a stockholder when deposited in
the United States mail, postage prepaid, directed to the stockholder at his
address as it appears on the record of stockholders of the Corporation, or, if
he shall have filed with the Secretary a written request that notices to him be
mailed to some other address, then directed to him at such other address. Such
further notice shall be given as may be required by law.
Whenever notice is required to be given to stockholders hereunder, a
written waiver, signed by a stockholder, whether before or after the time stated
therein, shall be deemed equivalent to notice. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of the
stockholders need be specified in a written waiver of notice. The
<PAGE>
attendance of any stockholder at a meeting of stockholders shall constitute a
waiver of notice of such meeting, except when the stockholder attends a meeting
for the express purpose of objecting, at the beginning of the meeting, to the
transaction of any business on the ground that the meeting is not lawfully
called or convened.
1.4 Quorum. Except as otherwise required by law or by the
------
Certificate of Incorporation, the presence in person or by proxy of the holders
of record of a majority of the shares entitled to vote at a meeting of
stockholders shall constitute a quorum for the transaction of business at such
meeting.
1.5 Voting. If, pursuant to Section 5.5 of these Bylaws, a record
------
date has been fixed, every holder of record of shares entitled to vote at a
meeting of stockholders shall be entitled to one vote for each share outstanding
in his name on the books of the Corporation at the close of business on such
record date. If no record date has been fixed, then every holder of record of
shares entitled to vote at a meeting of stockholders shall be entitled to one
vote for each share of stock standing in his name on the books of the
Corporation at the close of business on the day next preceding the day on which
notice of the meeting is given, or, if notice is waived, at the close of
business on the day next preceding the day on which the meeting is held. Except
as otherwise required by law or by the Certificate of Incorporation, the vote of
a majority of the shares represented in person or by proxy at any meeting at
which a quorum is present shall be sufficient for the transaction of any
business at such meeting.
1.6 Voting by Ballot. No vote of the stockholders need be taken by
----------------
written ballot or conducted by inspectors of election, unless otherwise required
by law. Any vote which need not be taken by ballot may be conducted in any
manner approved by the meeting.
1.7 Adjournment. If a quorum is not present at any meeting of the
-----------
stockholders, the stockholders present in person or by proxy shall have the
power to adjourn any such meeting from time to time until a quorum is present.
Notice of any adjourned meeting of the stockholders of the Corporation need not
be given if the place, date and hour thereof are announced at the meeting at
which the adjournment is taken, provided, however, that if the adjournment is
for more than 30 days, or if after the adjournment a new record date for the
adjourned meeting is fixed pursuant to Section 5.5 of these Bylaws, a notice of
the adjourned meeting, conforming to the requirements of Section 1.3 hereof,
shall be given to each stockholder of record entitled to vote at such meeting.
At any adjourned meeting at which a quorum is present, any business may be
transacted that might have been transacted on the original date of the meeting.
1.8 Proxies. Any stockholder entitled to vote at any meeting of the
-------
stockholders or to express consent to or dissent from corporate action without a
meeting may, by a written instrument signed by such stockholder or his attorney-
in-fact, authorize another person or persons to vote at any such meeting and
express such consent or dissent for him by proxy. No such proxy shall be voted
or acted upon after the expiration of three years from the date of such proxy,
unless such proxy provides for a longer period. Every proxy shall be revocable
at the
-3-
<PAGE>
pleasure of the stockholder executing it, except in those cases where
applicable law provides that a proxy shall be irrevocable. A stockholder may
revoke any proxy which is not irrevocable by attending the meeting and voting in
person or by filing an instrument in writing revoking the proxy or by filing
another duly executed proxy bearing a later date with the Secretary.
1.9 Organization; Procedure. At every meeting of stockholders the
-----------------------
presiding officer shall be the Chairman of the Board or, in the event of his
absence or disability, the President or, in the event of his absence or
disability, a presiding officer chosen by a majority of the stockholders present
in person or by proxy. The Secretary, or in the event of his absence or
disability, the Assistant Secretary, if any, or if there be no Assistant
Secretary, in the absence of the Secretary, an appointee of the presiding
officer, shall act as Secretary of the meeting. The order of business and all
other matters of procedure at every meeting of stockholders may be determined by
such presiding officer.
1.1 Consent of Stockholders in Lieu of Meeting. To the fullest
------------------------------------------
extent permitted by law, whenever the vote of the stockholders at a meeting
thereof is required or permitted to be taken for or in connection with any
corporate action, such action may be taken without a meeting, without prior
notice and without a vote of stockholders, if the holders of outstanding stock
having not less than the minimum number of votes that would be necessary to
authorize or take such action at a meeting at which all shares entitled to vote
thereon were present and voted shall consent in writing to such corporate action
being taken. Prompt notice of the taking of the corporate action without a
meeting by less than unanimous written consent shall be given to those
stockholders who have not so consented in writing.
ARTICLE 2.
BOARD OF DIRECTORS
2.1 General Powers. Except as may otherwise be provided by law, by
--------------
the Certificate of Incorporation or by these Bylaws, the property, affairs and
business of the Corporation shall be managed by or under the direction of the
Board of Directors and the Board of Directors may exercise all the powers of the
Corporation.
2.2 Number and Term of Office. The number of Directors constituting
-------------------------
the entire Board of Directors shall be seven, which number may be modified from
time to time by resolution of the Board of Directors, but in no event shall the
number of Directors be less than one. Each Director (whenever elected) shall
hold office until his successor has been duly elected and qualified, or until
his earlier death, resignation or removal.
2.3 Election of Directors. Except as otherwise provided in Sections
---------------------
2.12 and 2.13 of these Bylaws, the Directors shall be elected at each annual
meeting of the stockholders. If the annual meeting for the election of Directors
is not held on the date designated therefor, the
-4-
<PAGE>
Directors shall cause the meeting to be held as soon thereafter as convenient.
At each meeting of the stockholders for the election of Directors, provided a
quorum is present, the Directors shall be elected by a plurality of the votes
validly cast in such election.
2.4 Annual and Regular Meetings. The annual meeting of the Board of
---------------------------
Directors for the purpose of electing officers and for the transaction of such
other business as may come before the meeting shall be held as soon as possible
following adjournment of the annual meeting of the stockholders at the place of
such annual meeting of the stockholders. Notice of such annual meeting of the
Board of Directors need not be given. The Board of Directors from time to time
may by resolution provide for the holding of regular meetings and fix the place
(which may be within or without the State of Delaware) and the date and hour of
such meetings. Notice of regular meetings need not be given, provided, however,
that if the Board of Directors shall fix or change the time or place of any
regular meeting, notice of such action shall be mailed promptly, or sent by
telegram, facsimile or cable, to each Director who shall not have been present
at the meeting at which such action was taken, addressed to him at his usual
place of business, or shall be delivered to him personally. Notice of such
action need not be given to any Director who attends the first regular meeting
after such action is taken without protesting the lack of notice to him, prior
to or at the commencement of such meeting, or to any Director who submits a
signed waiver of notice, whether before or after such meeting.
2.5 Special Meetings; Notice. Special meetings of the Board of
------------------------
Directors shall be held whenever called by the Chairman of the Board or, in the
event of his absence or disability, by the President, at such place (within or
without the State of Delaware), date and hour as may be specified in the
respective notices or waivers of notice of such meetings. Special meetings of
the Board of Directors may be called on 24 hours' notice, if notice is given to
each Director personally or by telephone or facsimile, or on five days' notice,
if notice is mailed to each Director, addressed to him at his usual place of
business. Notice of any special meeting need not be given to any Director who
attends such meeting without protesting the lack of notice to him, prior to or
at the commencement of such meeting, or to any Director who submits a signed
waiver of notice, whether before or after such meeting, and any business may be
transacted thereat.
2.6 Quorum; Voting. At all meetings of the Board of Directors, the
--------------
presence of a majority of the total authorized number of Directors shall
constitute a quorum for the transaction of business. Except as otherwise
required by law, the vote of a majority of the Directors present at any meeting
at which a quorum is present shall be the act of the Board of Directors.
2.7 Adjournment. A majority of the Directors present, whether or not
-----------
a quorum is present, may adjourn any meeting of the Board of Directors to
another time or place. No notice need be given of any adjourned meeting unless
the time and place of the adjourned meeting are not announced at the time of
adjournment, in which case notice conforming to the requirements of Section 2.5
shall be given to each Director.
-5-
<PAGE>
2.8 Action Without a Meeting. Any action required or permitted to be
------------------------
taken at any meeting of the Board of Directors may be taken without a meeting if
all members of the Board of Directors consent thereto in writing, and such
writing or writings are filed with the minutes of proceedings of the Board of
Directors.
2.9 Regulations; Manner of Acting. To the extent consistent with
-----------------------------
applicable law, the Certificate of Incorporation and these Bylaws, the Board of
Directors may adopt such rules and regulations for the conduct of meetings of
the Board of Directors and for the management of the property, affairs and
business of the Corporation as the Board of Directors may deem appropriate. The
Directors shall act only as a Board, and the individual Directors shall have no
power as such.
2.10 Action by Telephonic Communications. Members of the Board of
-----------------------------------
Directors may participate in a meeting of the Board of Directors by means of
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other, and participation in a
meeting pursuant to this provision shall constitute presence in person at such
meeting.
2.11 Resignation. Any Director may resign at any time by delivering a
-----------
written notice of resignation, signed by such Director, to the Chairman of the
Board, the President or the Secretary. Unless otherwise specified therein, such
resignation shall take effect upon delivery.
2.12 Removal of Directors. Any Director may be removed at any time,
--------------------
either for or without cause, upon the affirmative vote of the holders of a
majority of the outstanding shares of stock of the Corporation entitled to vote
for the election of such Director, cast at a special meeting of stockholders
called for that purpose. Any vacancy in the Board of Directors caused by any
such removal may be filled at such meeting by the stockholders entitled to vote
for the election of the Director so removed. If such stockholders do not fill
such vacancy at such meeting (or in the written instrument effecting such
removal, if such removal was effected by consent without a meeting), such
vacancy may be filled in the manner provided in Section 2.13 of these Bylaws.
2.13 Vacancies and Newly Created Directorships. If any vacancies
-----------------------------------------
shall occur in the Board of Directors, by reason of death, resignation, removal
or otherwise, or if the authorized number of Directors shall be increased, the
Directors then in office shall continue to act, and such vacancies and newly
created directorships may be filled by a majority of the Directors then in
office, although less than a quorum. A Director elected to fill a vacancy or a
newly created directorship shall hold office until his successor has been
elected and qualified or until his earlier death, resignation or removal. Any
such vacancy or newly created directorship may also be filled at any time by
vote of the stockholders.
2.14 Compensation. The amount, if any, which each Director shall be
------------
entitled to receive as compensation for his services as such shall be fixed from
time to time by resolution of
-6-
<PAGE>
the Board of Directors.
2.15 Reliance on Accounts and Reports, etc. A member of the Board of
--------------------------------------
Directors, or a member of any Committee designated by the Board of Directors,
shall, in the performance of his duties, be fully protected in relying in good
faith upon the records of the Corporation and upon such information, opinions,
reports or statements presented to the Corporation by any of the Corporation's
officers or employees, or Committees of the Board of Directors, or by any other
person as to matters the member reasonably believes are within such other
person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Corporation, including without limitation
independent certified public accountants and appraisers.
ARTICLE 3.
EXECUTIVE COMMITTEE AND OTHER COMMITTEES
3.1 How Constituted. The Board of Directors may designate one or
---------------
more Committees, including an Executive Committee, each such Committee to
consist of such number of Directors as from time to time may be fixed by the
Board of Directors. The Board of Directors may designate one or more directors
as alternate members of any such Committee, who may replace any absent or
disqualified member or members at any meeting of such Committee. In addition,
unless the Board of Directors has so designated an alternate member of such
Committee, in the absence or disqualification of a member of such Committee, the
member or members thereof present at any meeting and not disqualified from
voting, whether or not he or they constitute a quorum, may unanimously appoint
another member of the Board of Directors to act at the meeting in the place of
any such absent or disqualified member. Thereafter, members (and alternate
members, if any) of each such Committee may be designated at the annual meeting
of the Board of Directors. Any such Committee may be abolished or redesignated
from time to time by the Board of Directors. Each member (and each alternate
member) of any such Committee (whether designated at an annual meeting of the
Board of Directors or to fill a vacancy or otherwise) shall hold office until
his successor shall have been designated or until he shall cease to be a
Director, or until his earlier death, resignation or removal.
3.2 Powers. During the intervals between the meetings of the Board
------
of Directors, the Executive Committee, if created by the Board of Directors, and
except as otherwise provided in this section, shall have and may exercise all
the powers and authority of the Board of Directors in the management of the
property, affairs and business of the Corporation, including the power to
declare dividends and to authorize the issuance of stock. Each such other
Committee shall have and may exercise such powers of the Board of Directors as
may be provided by resolution of the Board, provided, that neither the Executive
Committee nor any such other Committee shall have the power or authority to (i)
approve or adopt, or recommend to the stockholders, any action or matter
expressly required by the General Corporation Law to be submitted to
stockholders for
-7-
<PAGE>
approval or (ii) adopt, amend or repeal any of these Bylaws.
The Executive Committee shall have, and any such other Committee may be granted
by the Board of Directors, power to authorize the seal of the Corporation to be
affixed to any or all papers which may require it.
3.3 Quorum; Voting. Except as may be otherwise provided in the
--------------
resolution creating such Committee, at all meetings of any Committee the
presence of members (or alternate members) constituting a majority of the total
authorized membership of such Committee shall constitute a quorum for the
transaction of business. The act of a majority of the members present at any
meeting at which a quorum is present shall be the act of such Committee.
3.4 Action without a Meeting. Any action required or permitted to be
------------------------
taken at any meeting of any such Committee may be taken without a meeting, if
all members of such Committee shall consent to such action in writing and such
writing or writings are filed with the minutes of the proceedings of the
Committee.
3.5 Regulations; Manner of Acting. Each such Committee may fix its
-----------------------------
own rules of procedure and may meet at such place (within or without the State
of Delaware), at such time and upon such notice, if any, as it shall determine
from time to time. Each such Committee shall keep minutes of its proceedings
and shall report such proceedings to the Board of Directors at the meeting of
the Board of Directors next following any such proceeding. The members of any
such Committee shall act only as a Committee, and the individual members of such
Committee shall have no power as such.
3.6 Action by Telephonic Communications. Members of any Committee
-----------------------------------
designated by the Board of Directors may participate in a meeting of such
Committee by means of conference telephone or similar communications equipment
by means of which all persons participating in the meeting can hear each other,
and participation in a meeting pursuant to this provision shall constitute
presence in person at such meeting.
3.7 Resignation. Any member (and any alternate member) of any
-----------
Committee may resign at any time by delivering a written notice of resignation,
signed by such member, to the Chairman of the Board or the President. Unless
otherwise specified therein, such resignation shall take effect upon delivery.
3.8 Removal. Any member (any alternate member) of any Committee may
-------
be removed at any time, with or without cause, by resolution adopted by a
majority of the whole Board of Directors.
3.9 Vacancies. If any vacancy shall occur in any Committee, by
---------
reason of death, resignation, removal or otherwise, the remaining members (and
any alternate members) shall continue to act, and any such vacancy may be filled
by the Board of Directors or the remaining members of the Committee as provided
in Section 3.1 hereof.
-8-
<PAGE>
ARTICLE 4.
OFFICERS
4.1 Titles. The officers of the Corporation shall be chosen by the
------
Board of Directors and shall be a Chairman of the Board, the President, one or
more Vice Presidents, a Secretary and a Treasurer. The Board of Directors also
may elect one or more Assistant Secretaries and Assistant Treasurers in such
numbers as the Board of Directors may determine, and shall also elect a Chairman
of the Board. Any number of offices may be held by the same person. No officer
need be a Director of the Corporation.
4.2 Election. Unless otherwise determined by the Board of Directors,
--------
the officers of the Corporation shall be elected by the Board of Directors at
the annual meeting of the Board of Directors, and shall be elected to hold
office until the next succeeding annual meeting of the Board of Directors. In
the event of the failure to elect officers at such annual meeting, officers may
be elected at any regular or special meeting of the Board of Directors. Each
officer shall hold office until his successor has been elected and qualified, or
until his earlier death, resignation or removal.
4.3 Salaries. The salaries of all officers of the Corporation shall
--------
be fixed by the Board of Directors.
4.4 Removal and Resignation; Vacancies. Any officer may be removed
----------------------------------
with or without cause at any time by the Board of Directors. Any officer may
resign at any time by delivering a written notice of resignation, signed by such
officer, to the Board of Directors or the Chairman of the Board. Unless
otherwise specified therein, such resignation shall take effect upon delivery.
Any vacancy occurring in any office of the Corporation by death, resignation,
removal or otherwise, shall be filled by the Board of Directors.
4.5 Authority and Duties. The officers of the Corporation shall have
--------------------
such authority and shall exercise such powers and perform such duties as may be
specified in these Bylaws, except that in any event each officer shall exercise
such powers and perform such duties as may be required by law.
4.6 The Chairman of the Board. The Chairman of the Board shall
-------------------------
preside at all meetings of the stockholders and directors, shall be the chief
executive officer of the Corporation and, together with the President and
subject to the directions of the Board of Directors, shall have general control
and supervision of the business and operations of the Corporation and shall see
that all orders and resolutions of the Board of Directors are carried into
effect. He shall manage and administer the Corporation's business and affairs
and shall also perform all duties and exercise all powers usually pertaining to
the office of a Chairman of the Board of a corporation.
-9-
<PAGE>
He shall have the authority to sign, in the name and on behalf of the
Corporation, checks, orders, contracts, leases, notes, drafts and other
documents and instruments in connection with the business of the Corporation
and, together with the Secretary or an Assistant Secretary, conveyances of real
estate and other documents and instruments to which the seal of the Corporation
is affixed. He shall have the authority to cause the employment or appointment
of such employees and agents of the Corporation as the conduct of the business
of the Corpor ation may require, to fix their compensation, and to remove or
suspend any employee or agent elected or appointed by the Chairman of the Board,
the President or the Board of Directors. The Chairman of the Board shall perform
such other duties and have such other powers as the Board of Directors may from
time to time prescribe.
4.7 The President. The President shall be the chief operating
-------------
officer of the Corporation and, together with the Chairman of the Board and
subject to the directions of the Board of Directors, shall have general control
and supervision of the policies and operations of the Corporation and shall see
that all orders and resolutions of the Board of Directors are carried into
effect. In the absence of the Chairman of the Board, the President shall
preside at all meetings of the stockholders and directors. He shall manage and
administer the Corporation's business and affairs and shall also perform all
duties and exercise all powers usually pertaining to the office of a chief
operating officer of a corporation. He shall have the authority to sign, in the
name and on behalf of the Corporation, checks, orders, contracts, leases, notes,
drafts and other documents and instruments in connection with the business of
the Corporation and, together with the Secretary or an Assistant Secretary,
conveyances of real estate and other documents and instruments to which the seal
of the Corporation is affixed. He shall have the authority to cause the
employment or appointment of such employees and agents of the Corporation as the
conduct of the business of the Corporation may require, to fix their
compensation, and to remove or suspend any employee or agent elected or
appointed by the Chairman of the Board, the President or the Board of Directors.
The President shall perform such other duties and have such other powers as the
Chairman of the Board or the Board of Directors may from time to time prescribe.
4.8 The Vice Presidents. Each Vice President shall perform such
-------------------
duties and exercise such powers as may be assigned to him from time to time by
the President. In the absence of the President, the duties of the President
shall be performed and his powers may be exercised by such Vice President as
shall be designated by the President, or failing such designation, such duties
shall be performed and such powers may be exercised by each Vice President in
the order of their election to that office; subject in any case to review and
superseding action by the President.
4.9 The Secretary. The Secretary shall have the following powers and
-------------
duties:
(a) He shall keep or cause to be kept a record of all the proceedings
of the meetings of the stockholders and of the Board of Directors in books
provided for that purpose.
(b) He shall cause all notices to be duly given in accordance with
the provisions
-10-
<PAGE>
of these Bylaws and as required by law.
(c) Whenever any Committee shall be appointed pursuant to a
resolution of the Board of Directors, he shall furnish a copy of such resolution
to the members of such Committee.
(d) He shall be the custodian of the records and of the seal of the
Corporation and cause such seal (or a facsimile thereof) to be affixed to all
certificates representing shares of the Corporation prior to the issuance
thereof and to all instruments the execution of which on behalf of the
Corporation under its seal shall have been duly authorized in accordance with
these Bylaws, and when so affixed he may attest to same.
(e) He shall properly maintain and file all books, reports,
statements, certificates and all other documents and records required by law,
the Certificate of Incorporation or these Bylaws.
(f) He shall have charge of the stock books and ledgers of the
Corporation and shall cause the stock and transfer books to be kept in such
manner as to show at any time the number of shares of stock of the Corporation
of each class issued and outstanding, the names (alphabetically arranged) and
the addresses of the holders of record of such shares, the number of shares held
by each holder and the date as of which each became such holder of record.
(g) He shall sign (unless the Treasurer, an Assistant Treasurer or
Assistant Secretary shall have signed) certificates representing shares of the
Corporation the issuance of which shall have been authorized by the Board of
Directors.
(h) He shall perform, in general, all duties incident to the office
of secretary and such other duties as may be specified in these Bylaws or as may
be assigned to him from time to time by the Board of Directors or the President.
4.10 The Treasurer. The Treasurer shall have the following powers and
-------------
duties:
(a) He shall have charge and supervision over and be responsible for
the moneys, securities, receipts and disbursements of the Corporation, and shall
keep or cause to be kept full and accurate records of all receipts of the
Corporation.
(b) He shall cause the moneys and other valuable effects of the
Corporation to be deposited in the name and to the credit of the Corporation in
such banks or trust companies or with such bankers or other depositaries as
shall be selected in accordance with Section 8.5 of these Bylaws.
(c) He shall cause moneys of the Corporation to be disbursed by
checks or drafts (signed as provided in Section 8.6 of these Bylaws) upon the
authorized depositories of the Corporation and cause to be taken and preserved
proper vouchers for all moneys disbursed.
-11-
<PAGE>
(d) He shall render to the Board of Directors or the President,
whenever requested, a statement of the financial condition of the Corporation
and of all his transactions as Treasurer, and render a full financial report at
the annual meeting of the stockholders, if called upon to do so.
(e) He shall be empowered from time to time to require from all
officers or agents of the Corporation reports or statements giving such
information as he may desire with respect to any and all financial transactions
of the Corporation.
(f) He may sign (unless an Assistant Treasurer or the Secretary or an
Assistant Secretary shall have signed) certificates representing stock of the
Corporation the issuance of which shall have been authorized by the Board of
Directors.
(g) He shall perform, in general, all duties incident to the office
of treasurer and such other duties as may be specified in these Bylaws or as may
be assigned to him from time to time by the Board of Directors, or the
President.
4.11 Additional Officers. The Board of Directors may appoint such
-------------------
other officers and agents as it my deem appropriate, and such other officers and
agents shall hold their offices for such terms and shall exercise such powers
and perform such duties as may be determined from time to time by the Board of
Directors. The Board of Directors from time to time may delegate to any officer
or agent the power to appoint subordinate officers or agents and to prescribe
their respective rights, terms of office, authorities and duties. Any such
officer or agent may remove any such subordinate officer or agent appointed by
him, with or without cause.
4.12 Security. The Board of Directors may direct that the Corporation
--------
secure the fidelity of any or all of its officers or agents by bond or
otherwise.
ARTICLE 5.
CAPITAL STOCK
5.1 Certificates of Stock, Uncertificated Shares. The shares of the
--------------------------------------------
Corporation shall be represented by certificates, provided that the Board of
Directors may provide by resolution that some or all of any or all classes or
series of the stock of the Corporation shall be uncertificated shares. Any such
resolution shall not apply to shares represented by a certificate until each
certificate is surrendered to the Corporation. Notwithstanding the adoption of
such a resolution by the Board of Directors, every holder of stock in the
Corporation represented by certificates and upon request every holder of
uncertificated shares shall be entitled to have a certificate signed by, or in
the name of the Corporation, by the Chairman of the Board, President or a Vice
President, and by the Treasurer or an Assistant Treasurer, or the Secretary or
an
-12-
<PAGE>
Assistant Secretary, representing the number of shares registered in
certificate form. Such certificate shall be in such form as the Board of
Directors may determine, to the extent consistent with applicable law, the
Certificate of Incorporation and these Bylaws.
5.2 Signatures; Facsimile. All of such signatures on the certificate
---------------------
may be a facsimile, engraved or printed, to the extent permitted by law. In
case any officer, transfer agent or registrar who has signed, or whose facsimile
signature has been placed upon a certificate shall have ceased to be such
officer, transfer agent or registrar before such certificate is issued, it may
be issued by the Corporation with the same effect as if he were such officer,
transfer agent or registrar at the date of issue.
5.3 Lost, Stolen or Destroyed Certificates. The Secretary of the
--------------------------------------
Corporation may cause a new certificate of stock or uncertificated shares in
place of any certificate therefor issued by the Corporation, alleged to have
been lost, stolen or destroyed, upon delivery to the Secretary of an affidavit
of the owner or owners of such certificate, or his or their legal representative
setting forth such allegation. The Secretary may require the owner or owners of
such lost, stolen or destroyed certificate, or his or their legal
representative, to give the Corporation a bond suf ficient to indemnify it
against any claim that may be made against it on account of the alleged loss,
theft or destruction of any such certificate or the issuance of any such new
certificate or uncertificated shares.
5.4 Transfer of Stock. Upon surrender to the Corporation or the
-----------------
transfer agent of the Corporation of a certificate for shares, duly endorsed or
accompanied by appropriate evidence of succession, assignment or authority to
transfer, the Corporation shall issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.
Within a reasonable time after the transfer of uncertificated stock, the
Corporation shall send to the registered owner thereof a written notice
containing the information required to be set forth or stated on certificates
pursuant to Section 151, 156, 202(a) or 218(a) of the General Corporation Law.
Subject to the provisions of the Certificate of Incorporation and these Bylaws,
the Board of Directors may prescribe such additional rules and regulations as it
may deem appropriate relating to the issue, transfer and registration of shares
of the Corporation.
5.5 Record Date. In order to determine the stockholders entitled to
-----------
notice of or to vote at any meeting of stockholders or any adjournment thereof,
or entitled to express consent to corporate action in writing without a meeting,
or entitled to receive payment of any dividend or other distribution or
allotment of any rights, or entitled to exercise any rights in respect of any
change, conversion or exchange of stock or for the purpose of any other lawful
action, the Board of Directors may fix, in advance, a record date, which shall
not be more than 60 nor less than ten days before the date of such meeting, nor
more than 60 days prior to any other action. A determination of stockholders of
record entitled to notice of or to vote at a meeting of stock holders shall
apply to any adjournment of the meeting, provided, however, that the Board of
Directors may fix a new record date for the adjourned meeting.
-13-
<PAGE>
5.6 Registered Stockholders. Prior to due surrender of a certificate
-----------------------
for registration of transfer, the Corporation may treat the registered owner as
the person exclusively entitled to receive dividends and other distributions, to
vote, to receive notice and otherwise to exercise all the rights and powers of
the owner of the shares represented by such certificate, and the Corporation
shall not be bound to recognize any equitable or legal claim to or interest in
such shares on the part of any other person, whether or not the Corporation
shall have notice of such claim or interest. Whenever any transfer of shares
shall be made for collateral security, and not absolutely, it shall be so
expressed in the entry of the transfer if, when the certificates are presented
to the Corporation for transfer or uncertificated shares are requested to be
transferred, both the transferor and transferee request the Corporation to do
so.
5.7 Transfer Agent and Registrar. The Board of Directors may appoint
----------------------------
one or more transfer agents and registrars, and may require all certificates
representing shares to bear the signature of any such transfer agents or
registrars.
ARTICLE 6.
INDEMNIFICATION
6.1 Indemnification. The Corporation shall, to the fullest extent
---------------
permitted by applicable law from time to time in effect, indemnify any and all
persons who may serve or who have served at any time as Directors or officers of
the Corporation, or who at the request of the Corporation may serve or at any
time have served as Directors or officers of another corporation (including
subsidiaries of the Corporation) or of any partnership, joint venture, trust or
other enterprise, from and against any and all of the expenses, liabilities or
other matters referred to in or covered by said law. Such indemnification shall
continue as to a person who has ceased to be a Director or officer and shall
inure to the benefit of the heirs, executors and administrators of such a
person. The Corporation may also indemnify any and all other persons whom it
shall have power to indemnify under any applicable law from time to time in
effect to the extent authorized by the Board of Directors and permitted by such
law. The indemnification provided by this Article shall not be deemed exclusive
of any other rights to which any person may be entitled under any provision of
the Certificate of Incorporation, other Bylaw, agreement, vote of stockholders
or disinterested Directors, or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office.
6.2 Definition. For purposes of this Article, the term "Corporation"
----------
shall include constituent corporations referred to in Subsection (h) of Section
145 of the General Corporation Law (or any similar provision of applicable law
at the time in effect).
-14-
<PAGE>
ARTICLE 7.
OFFICES
7.1 Registered Office. The registered office of the Corporation in
-----------------
the State of Delaware shall be located at [Corporation Trust Center, 1209 Orange
Street, Wilmington, New Castle County, Delaware 19801, and the Corporation's
registered agent shall be The Corporation Trust Company.]
7.2 Other Offices. The Corporation may maintain offices or places of
-------------
business at such other locations within or without the State of Delaware as the
Board of Directors may from time to time determine or as the business of the
Corporation may require.
ARTICLE 8.
GENERAL PROVISIONS
8.1 Dividends. Subject to any applicable provisions of law and the
---------
Certificate of Incorporation, dividends upon the shares of the Corporation may
be declared by the Board of Directors at any regular or special meeting of the
Board of Directors and any such dividend may be paid in cash, property, or
shares of the Corporation.
8.2 Reserves. There may be set aside out of any funds of the
--------
Corporation available for dividends such sum or sums as the Board of Directors
from time to time, in its absolute discretion, thinks proper as a reserve or
reserves to meet contingencies, or for equalizing dividends, or for repairing or
maintaining any property of the Corporation or for such other purpose as the
Board of Directors shall think conducive to the interest of the Corporation, and
the Board of Directors may similarly modify or abolish any such reserve.
8.3 Execution of Instruments. The Chairman of the Board, the
------------------------
President, any Vice President, the Secretary or the Treasurer may enter into any
contract or execute and deliver any instrument in the name and on behalf of the
Corporation. The Board of Directors, the Chairman of the Board, or the
President may authorize any other officer or agent to enter into any contract or
execute and deliver any instrument in the name and on behalf of the Corporation.
Any such authorization may be general or limited to specific contracts or
instruments.
8.4 Corporate Indebtedness. No loan shall be contracted on behalf of
----------------------
the Corporation, and no evidence of indebtedness shall be issued in its name,
unless authorized by the Board of Directors. Such authorization may be general
or confined to specific instances. Loans so authorized may be effected at any
time for the Corporation from any bank, trust company or other institution, or
from any firm, corporation or individual. All bonds, debentures, notes and
other obligations or evidences of indebtedness of the Corporation issued for
such loans shall be made, executed and delivered as the Board of Directors shall
authorize. When so authorized by the Board of Directors, any part of or all the
properties, including contract rights, assets, business or good will of the
Corporation, whether then owned or thereafter acquired, may
-15-
<PAGE>
be mortgaged, pledged, hypothecated or conveyed or assigned in trust as security
for the payment of such bonds, debentures, notes and other obligations or
evidences of indebtedness of the Corporation, and of any interest thereon, by
instruments executed and delivered in the name of the Corporation.
8.5 Deposits. Any funds of the Corporation may be deposited from
--------
time to time in such banks, trust companies or other depositaries as may be
determined by the Board of Directors or the President, or by such officers or
agents as may be authorized by the Board of Directors, the Chairman of the Board
or the President to make such determination.
8.6 Checks. All checks or demands for money and notes of the
------
Corporation shall be signed by such officer or officers or such agent or agents
of the Corporation, and in such manner, as the Board of Directors, the Chairman
of the Board, or the President from time to time may determine.
8.7 Sale, Transfer, etc. of Securities. To the extent authorized by
----------------------------------
the Board of Directors, the Chairman of the Board, or by the President, any Vice
President, the Secretary or the Treasurer, or any other officers designated by
the Board of Directors, the Chairman of the Board, or the President may sell,
transfer, endorse, and assign any shares of stock, bonds or other securities
owned by or held in the name of the Corporation, and may make, execute and
deliver in the name of the Corporation, under its corporate seal, any
instruments that may be appropriate to effect any such sale, transfer,
endorsement or assignment.
8.8 Voting as Stockholder. Unless otherwise determined by resolution
---------------------
of the Board of Directors, the Chairman of the Board, the President or any Vice
President shall have full power and authority on behalf of the Corporation to
attend any meeting of stockholders of any corporation in which the Corporation
may hold stock, and to act, vote (or execute proxies to vote) and exercise in
person or by proxy all other rights, powers and privileges incident to the
ownership of such stock. Such officers acting on behalf of the Corporation
shall have full power and authority to execute any instrument expressing consent
to or dissent from any action of any such corporation without a meeting. The
Board of Directors may by resolution from time to time confer such power and
authority upon any other person or persons.
8.9 Fiscal Year. The fiscal year of the Corporation shall commence
-----------
on the first day of January of each year (except for the Corporation's first
fiscal year which shall commence on the date of incorporation) and shall end in
each case on December 31.
8.10 Seal. The seal of the Corporation shall be circular in form and
----
shall contain the name of the Corporation, the year of its incorporation and the
words "Corporate Seal" and "Delaware". The form of such seal shall be subject
to alteration by the Board of Directors. The seal may be used by causing it or
a facsimile thereof to be impressed, affixed or reproduced, or may be used in
any other lawful manner.
-16-
<PAGE>
8.11 Books and Records. Except to the extent otherwise required by
-----------------
law, the books and records of the Corporation shall be kept at such place or
places within or without the State of Delaware as may be determined from time to
time by the Board of Directors.
ARTICLE 9.
AMENDMENT OF BYLAWS
9.1 Amendment. These Bylaws may be amended, altered or repealed:
---------
(a) by resolution adopted by a majority of the Board of Directors at
any special or regular meeting of the Board if, in the case of such special
meeting only, notice of such amendment, alteration or repeal is contained in the
notice or waiver of notice of such meeting; or
(b) at any regular or special meeting of the stockholders if, in the
case of such special meeting only, notice of such amendment, alteration or
repeal is contained in the notice or waiver of notice of such meeting.
ARTICLE 10.
CONSTRUCTION
10.1 Construction. In the event of any conflict between the
------------
provisions of these Bylaws as in effect from time to time and the provisions of
the Certificate of Incorporation as in effect from time to time, the provisions
of the Certificate of Incorporation shall be controlling.
-17-
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE 1. STOCKHOLDERS
1.1 Annual Meeting 2
1.2 Special Meetings 2
1.3 Notice of Meetings; Waiver 2
1.4 Quorum 3
1.5 Voting 3
1.6 Voting by Ballot 3
1.7 Adjournment 3
1.8 Proxies 3
1.9 Organization; Procedure 4
1.10 Consent of Stockholders in Lieu of Meeting 4
ARTICLE 2. BOARD OF DIRECTORS
2.1 General Powers 4
2.2 Number and Term of Office 4
2.3 Election of Directors 4
2.4 Annual and Regular Meetings 5
2.5 Special Meetings; Notice 5
2.6 Quorum; Voting 5
2.7 Adjournment 5
2.8 Action Without a Meeting 5
2.9 Regulations; Manner of Acting 6
2.10 Action by Telephonic Communications 6
2.11 Resignation 6
2.12 Removal of Directors 6
2.13 Vacancies and Newly Created Directorships 6
2.14 Compensation 6
2.15 Reliance on Accounts and Reports, etc 7
ARTICLE 3. EXECUTIVE COMMITTEE AND OTHER COMMITTEES
3.1 How Constituted 7
3.2 Powers 7
3.3 Quorum; Voting 8
3.4 Action without a Meeting. 8
3.5 Regulations; Manner of Acting 8
3.6 Action by Telephonic Communications 8
3.7 Resignation 8
3.8 Removal 8
3.9 Vacancies 8
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE 4. OFFICERS
4.1 Titles 9
4.2 Election 9
4.3 Salaries 9
4.4 Removal and Resignation; Vacancies 9
4.5 Authority and Duties 9
4.6 The Chairman of the Board 9
4.7 The President 10
4.8 The Vice Presidents 10
4.9 The Secretary 10
4.10 The Treasurer 11
4.11 Additional Officers 12
4.12 Security 12
ARTICLE 5. CAPITAL STOCK
5.1 Certificates of Stock, Uncertificated Shares 12
5.2 Signatures; Facsimile 13
5.3 Lost, Stolen or Destroyed Certificates 13
5.4 Transfer of Stock 13
5.5 Record Date 13
5.6 Registered Stockholders 13
5.7 Transfer Agent and Registrar 14
ARTICLE 6. INDEMNIFICATION
6.1 Indemnification 14
6.2 Definition 14
ARTICLE 7. OFFICES
7.1 Registered Office 15
7.2 Other Offices 15
ARTICLE 8. GENERAL PROVISIONS
8.1 Dividends 15
8.2 Reserves 15
8.3 Execution of Instruments 15
8.4 Corporate Indebtedness 15
8.5 Deposits 16
8.6 Checks 16
8.7 Sale, Transfer, etc. of Securities 16
8.8 Voting as Stockholder 16
8.9 Fiscal Year 16
8.10 Seal 16
8.11 Books and Records 16
</TABLE>
-19-
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE 9. AMENDMENT OF BYLAWS
9.1 Amendment 17
ARTICLE 10. CONSTRUCTION
10.1 Construction 17
</TABLE>
-20-
<PAGE>
EXHIBIT E
RESTATED CERTIFICATE OF INCORPORATION
OF
TRITON PCS HOLDINGS, INC.
Triton PCS Holdings, Inc., a corporation organized and existing under
the laws of the State of Delaware, hereby certifies as follows:
FIRST: The name of the corporation is Triton PCS Holdings, Inc. (the
"Corporation"). The original Certificate of Incorporation of the Corporation
-----------
was filed with the Secretary of State of the State of Delaware on October 1,
1997 under the name "Triton PCS, Inc." A Certificate of Amendment of
Certificate of Incorporation of the Corporation was filed with the Secretary of
State of Delaware on January 6, 1998 changing the name of the Corporation to
"Triton PCS Holdings, Inc."
SECOND: This Restated Certificate of Incorporation has been duly
adopted in accordance with the provisions of Sections 242 and 245 of the General
Corporation Law of the State of Delaware.
THIRD: This Restated Certificate of Incorporation restates,
integrates and amends the provisions of the Corporation's Restated Certificate
of Incorporation, as follows:
ARTICLE I
The name of the Corporation shall be Triton PCS Holdings, Inc.
ARTICLE II
The address of the Corporation's registered office in the State of
Delaware is Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle
County, Delaware 19801. The name of its registered agent at such address is The
Corporation Trust Company.
ARTICLE III
The purpose of the Corporation is to engage in, carry on and conduct
any lawful act or activity for which corporations may be organized under the
General
<PAGE>
Corporation Law of the State of Delaware (the "GCL").
---
ARTICLE IV
4.1 Classes of Stock. The total number of shares of all classes of
----------------
stock which the Corporation shall have authority to issue is 15,500,000,
consisting of (a) 5,500,000 shares of preferred stock, par value $0.01 per share
(the "Preferred Stock"), including 1,000,000 shares designated "Series A
---------------
Convertible Preferred Stock" (the "Series A Preferred Stock"), 2,000,000 shares
------------------------
designated "Series B Preferred Stock" (the "Series B Preferred Stock"),
------------------------
2,000,000 shares designated "Series C Convertible Preferred Stock" (the "Series
------
C Preferred Stock") and 500,000 shares designated "Series D Convertible
- -----------------
Preferred Stock" (the "Series D Preferred Stock") and (b) 10,000,000 shares of
------------------------
common stock, par value $0.01 per share (the "Common Stock"). (Capitalized
------------
terms used herein and not otherwise defined shall have the meanings set forth in
Section 4.10.)
4.2 Additional Series of Preferred Stock.
------------------------------------
(a) Subject to approval by holders of shares of any class or series
of Preferred Stock to the extent such approval is required by its terms, the
Board of Directors of the Corporation (the "Board of Directors") is hereby
------------------
expressly authorized, by resolution or resolutions, to provide, out of the
unissued shares of Preferred Stock, for series of Preferred Stock in addition to
the Series A Preferred Stock, the Series B Preferred Stock, the Series C
Preferred Stock and the Series D Preferred Stock. Before any shares of any such
series are issued, the Board of Directors shall fix, and hereby is expressly
empowered to fix, by resolutions, the following provisions of the shares
thereof:
(i) the designation of such series, the number of shares to
constitute such series and the stated value thereof if different from the
par value thereof;
(ii) whether the shares of such series shall have voting rights,
in addition to any voting rights provided by law, and, if so, the terms of
such voting rights, which may be general or limited;
(iii) the dividends, if any, payable on such series, whether any
such dividends shall be cumulative, and, if so, from what dates, the
conditions and dates upon which such dividends shall be payable, the
preference or relation which such dividends shall bear to the dividends
payable on any shares of stock of any other class or any other series of
this class;
(iv) whether the shares of such series shall be subject to
redemption by the Corporation, and, if so, the times, prices and other
conditions of such redemption;
<PAGE>
(v) the amount or amounts payable upon shares of such series
upon, and the rights of the holders of such series in, the voluntary or
involuntary liquidation, dissolution or winding up, or upon any
distribution of the assets, of the Corporation;
(vi) whether the shares of such series shall be subject to the
operation of a retirement or sinking fund and, if so, the extent to and
manner in which any such retirement or sinking fund shall be applied to the
purchase or redemption of the shares of such series for retirement or other
corporate purposes and the terms and provisions relative to the operation
thereof;
(vii) whether the shares of such series shall be convertible
into, or exchangeable for, shares of stock of any other class or any other
series of this class or any other securities and, if so, the price or
prices or the rate or rates of conversion or exchange and the method, if
any, of adjusting the same, and any other terms and conditions of
conversion or exchange;
(viii) the limitations and restrictions, if any, to be effective
while any shares of such series are outstanding upon the payment of
dividends or the making of other distributions on, and upon the purchase,
redemption other acquisition by the Corporation of, the Common Stock or
shares of stock of any other class or any other series of this class;
(ix) the conditions or restrictions, if any, upon the creation
of indebtedness of the Corporation or upon the issue of any additional
stock, including additional shares of such series or of any other series of
this class or of any other class; and
(x) any other powers, preferences and relative, participating,
optional and other special rights, and any qualifications, limitations and
restrictions thereof.
(b) The powers, preferences and relative, participating, optional and
other special rights of each series of Preferred Stock, and the qualifications,
limitations or restrictions thereof, if any, may differ from those of any and
all other series at any time outstanding. All shares of any one series of
Preferred Stock shall be identical in all respects with all other shares of such
series, except that shares of any one series issued at different times may
differ as to the dates from which dividends thereon shall be cumulative.
(c) Shares of Preferred Stock of any series that have been redeemed
(whether through the operation of a sinking fund or otherwise) or that, if
convertible or
<PAGE>
exchangeable, have been converted into or exchanged for any other security shall
have the status of authorized and unissued shares of Preferred Stock of the same
series and may be reissued as a part of the series of which they were originally
a part or may be reclassified and reissued as part of a new series of shares of
Preferred Stock to be created by resolution or resolutions of the Board of
Directors or as part of any other series of shares of Preferred Stock, all
subject to the conditions or restrictions on issuance set forth in the
resolution or resolutions adopted by the Board of Directors providing for the
issue of any series of shares of Preferred Stock.
(d) Subject to the provisions of this Restated Certificate of
Incorporation and except as otherwise provided by law, the stock of the
Corporation, regardless of class, may be issued for such consideration and for
such corporate purposes as the Board of Directors may from time to time
determine.
4.3 Powers, Preferences and Rights of the Series A Preferred Stock.
--------------------------------------------------------------
The powers, preferences and rights of the Series A Preferred Stock and the
qualifications, limitations and restrictions thereof are as follows:
(a) Ranking. The Series A Preferred Stock shall, with respect to
-------
dividend rights and rights on liquidation, dissolution or winding up, rank on a
parity with the Series B Preferred Stock, and rank senior to Junior Stock.
(b) Dividends and Distributions.
---------------------------
(i) Dividends. The holders of shares of Series A Preferred Stock
---------
shall be entitled to receive, as and when declared by the Board of
Directors, out of funds legally available therefor, dividends on each
outstanding share of Series A Preferred Stock, at an annual rate per share
equal to 10% of the Accreted Value, calculated on the basis of a 360-day
year consisting of twelve 30-day months. Dividends shall be paid quarterly
in arrears on the Dividend Payment Date commencing March 31, 1998 in the
manner provided in paragraph (iii) below.
(ii) Accrued Dividends; Record Date. Dividends payable pursuant
------------------------------
to paragraph (i) above shall begin to accrue and be cumulative from the
date on which shares of Series A Preferred Stock are issued, and shall
begin to accrue on a daily basis, in each case whether or not earned or
declared. The Board of Directors may fix a record date for the
determination of holders of shares of Series A Preferred Stock entitled to
receive payment of the dividends payable pursuant to paragraph (i) above,
which record date shall not be more than 60 days prior to the Dividend
Payment Date.
(iii) Payment. All dividends shall be payable in cash. Until
-------
the 42nd Dividend Payment Date, the Corporation shall have the option to
defer
<PAGE>
payment of dividends on Series A Preferred Stock. Any dividend payments so
deferred shall be payable on and not earlier than the 42nd Dividend Payment
Date.
(iv) Dividends Pro Rata. All dividends paid with respect to
------------------
shares of Series A Preferred Stock pursuant to this Section 4.3(b) shall be
paid pro rata to the holders entitled thereto. In the event that the funds
legally available therefor shall be insufficient for the payment of the
entire amount of cash dividends payable at any Dividend Payment Date,
subject to Section 4.3(c), such funds shall be allocated for the payment of
dividends with respect to the shares of Series A Preferred Stock and Series
B Preferred Stock pro rata based upon the Liquidation Preference of the
outstanding shares.
(c) Certain Restrictions.
--------------------
(i) Notwithstanding the provisions of Sections 4.3(b), (e) and
(f), cash dividends on the Series A Preferred Stock may not be declared,
paid or set apart for payment, nor may the Corporation redeem, purchase or
otherwise acquire any shares of Series A Preferred Stock, if (A) the
Corporation is not solvent or would be rendered insolvent thereby or (B) at
such time the terms and provisions of any law or agreement of the
Corporation, including any agreement relating to its indebtedness,
specifically prohibit such declaration, payment or setting apart for
payment or such redemption, purchase or other acquisition, or provide that
such declaration, payment or setting apart for payment or such redemption,
purchase or other acquisition would constitute a violation or breach
thereof or a default thereunder.
(ii) So long as shares of Series A Preferred Stock are
outstanding or dividends payable on shares of Series A Preferred Stock have
not been paid in full in cash, then the Corporation shall not declare or
pay cash dividends on, or redeem, purchase or otherwise acquire for
consideration, any shares of Common Stock or other shares of Junior Stock,
except with the prior written consent of holders of a majority of the
outstanding shares of Series A Preferred Stock, except that the Corporation
may acquire, in accordance with the terms of any agreement between the
Corporation and its employees, shares of Common Stock or Preferred Stock at
a price not greater than the Market Price as of such date.
(iii) The Corporation shall not permit any Subsidiary of the
Corporation, or cause any other Person, to make any distribution with
respect to, or purchase or otherwise acquire for consideration, any shares
of capital stock of the Corporation, unless the Corporation could, pursuant
to paragraph (ii) above, make such distribution or purchase or otherwise
acquire such shares at such time and in such manner.
<PAGE>
(d) Voting Rights; Election of Director.
-----------------------------------
(i) The holders of shares of Series A Preferred Stock shall not
have any right to vote on any matters to be voted on by the stockholders of
the Corporation, except as otherwise provided in paragraphs (ii) and (iii)
below or as provided by law, and the shares of Series A Preferred Stock
shall not be included in determining the number of shares voting or
entitled to vote on any such matters (other than the matters described in
paragraphs (ii) and (iii) below or as otherwise required by law).
(ii) Unless the consent or approval of a greater number of
shares shall then be required by law, the affirmative vote of the holders
of a majority of the outstanding shares of Series A Preferred Stock in
person or by proxy, at each special and annual meeting of stockholders
called for the purpose, or by written consent, shall be necessary to (A)
authorize, increase the authorized number of shares of or issue (including
on conversion or exchange of any convertible or exchangeable securities or
by reclassification) any shares of any class or classes of Senior Stock or
Parity Stock or any additional shares of Series A Preferred Stock, (B)
authorize, adopt or approve each amendment to this Restated Certificate of
Incorporation that would increase or decrease the par value of the shares
of Series A Preferred Stock, alter or change the powers, preferences or
rights of the shares of Series A Preferred Stock or alter or change the
powers, preferences or rights of any other capital stock of the Corporation
if after such alteration or change such capital stock would be Senior Stock
or Parity Stock, (C) amend, alter or repeal any provision of this Restated
Certificate of Incorporation so as to affect the shares of Series A
Preferred Stock adversely, or (D) authorize or issue any security
convertible into, exchangeable for or evidencing the right to purchase or
otherwise receive any shares of any class or classes of Senior Stock or
Parity Stock.
(iii) So long as the Initial Holder owns at least two-thirds
(2/3) of the number of shares of Series A Preferred Stock owned by it on
the date hereof, holders of shares of Series A Preferred Stock shall have
the exclusive right, voting separately as a single class, to elect one
director of the Corporation. The foregoing right to elect one director may
be exercised at any annual meeting of stockholders or a special meeting of
stockholders or holders of Series A Preferred Stock held for such purpose
or any adjournment thereof, or by the written consent, delivered to the
Secretary of the Corporation, of the holders of a majority of the issued
and outstanding shares of Series A Preferred Stock. Notwithstanding the
foregoing, the Initial Holder shall have the right, exercisable at any time
by written notice delivered to the Secretary of the Corporation, to
surrender and cancel irrevocably such right to elect one director of the
Corporation.
<PAGE>
(e) Redemption at Option of the Corporation. The Corporation shall
---------------------------------------
have the right to redeem shares of Series A Preferred Stock pursuant to the
following provisions:
(i) The Corporation shall not have any right to redeem shares of
the Series A Preferred Stock prior to, February 4, 2008. Thereafter,
subject to the restrictions in Section 4.3(c)(i), the Corporation shall
have the right, at its sole option and election, to redeem the shares of
the Series A Preferred Stock, in whole but not in part, at any time at a
redemption price (the "Series A Redemption Price") per share equal to the
-------------------------
Accreted Value as of the redemption date;
(ii) Notice of any redemption of the Series A Preferred Stock
shall be mailed at least ten, but not more than sixty, days prior to the
date fixed for redemption to each holder of Series A Preferred Stock to be
redeemed, at such holder's address as it appears on the books of the
Corporation. In order to facilitate the redemption of the Series A
Preferred Stock, the Board of Directors may fix a record date for the
determination of holders of Series A Preferred Stock to be redeemed, or may
cause the transfer books of the Corporation to be closed for the transfer
of the Series A Preferred Stock, not more than sixty days prior to the date
fixed for such redemption;
(iii) Within two Business Days after the redemption date
specified in the notice given pursuant to paragraph (ii) above and the
surrender of the certificate(s) representing shares of Series A Preferred
Stock, the Corporation shall pay to the holder of the shares being redeemed
the Series A Redemption Price therefor. Such payment shall be made by wire
transfer of immediately available funds to an account designated by such
holder or by overnight delivery (by a nationally recognized courier) of a
bank check to such holder's address as it appears on the books of the
Corporation; and
(iv) Effective upon the date of the notice given pursuant to
paragraph (ii) above, notwithstanding that any certificate for such shares
shall not have been surrendered for cancellation, the shares represented
thereby shall no longer be deemed outstanding, the rights to receive
dividends thereon shall cease to accrue from and after the date of
redemption designated in the notice of redemption and all rights of the
holders of the shares of the Series A Preferred Stock called for redemption
shall cease and terminate, excepting only the right to receive the Series A
Redemption Price therefor in accordance with paragraph (iii) above and the
right to convert such shares into shares of Common Stock until the close of
business on the third Business Day preceding the redemption date, as
provided in Section 4.3(i).
<PAGE>
(f) Redemption at Option of Holder.
------------------------------
(i) No holder of shares of Series A Preferred Stock shall have
any right to require the Company to redeem any shares of Series A Preferred
Stock prior to February 4, 2018. Thereafter, subject to the restrictions
set forth in Section 4.3(c)(i), each holder of shares of Series A Preferred
Stock shall have the right, at the sole option and election of such holder,
to require the Corporation to redeem all (but not less than all) of the
shares of Series A Preferred Stock owned by such holder at a price per
share equal to the Series A Redemption Price;
(ii) The holder of any shares of the Series A Preferred Stock
may exercise such holder's right to require the Corporation to redeem such
shares by surrendering for such purpose to the Corporation, at its
principal office or at such other office or agency maintained by the
Corporation for that purpose, certificates representing the shares of
Series A Preferred Stock to be redeemed, accompanied by a written notice
stating that such holder elects to require the Corporation to redeem all
(but not less than all) of such shares in accordance with the provisions of
this Section 4.3(f), which notice may specify an account for delivery of
the Series A Redemption Price;
(iii) Within two (2) Business Days after the surrender of such
certificates, the Corporation shall pay to the holder of the shares being
redeemed the Series A Redemption Price therefor. Such payment shall be
made by wire transfer of immediately available funds to an account
designated by such holder or by overnight delivery (by a nationally
recognized courier) of a bank check to such holder's address as it appears
on the books of the Corporation; and
(iv) Such redemptions shall be deemed to have been made at the
close of business on the date of the receipt of such notice and of such
surrender of the certificates representing the shares of the Series A
Preferred Stock to be redeemed and the rights of the holder thereof, except
for the right to receive the Series A Redemption Price therefor in
accordance herewith, shall cease on such date of receipt and surrender.
(g) Reacquired Shares. Any shares of the Series A Preferred Stock
-----------------
redeemed or purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and canceled promptly after the acquisition thereof.
All such shares shall upon their cancellation become authorized but unissued
shares of Preferred Stock and may be reissued pursuant to Section 4.2(c) as part
of a new series of Preferred Stock to be created by resolution or resolutions of
the Board of Directors, subject to the conditions or restrictions on issuance
set forth herein.
<PAGE>
(h) Liquidation, Dissolution or Winding Up.
--------------------------------------
(i) In the event of any liquidation, dissolution or winding up
of the Corporation, either voluntary or involuntary, before any
distribution or payment to holders of Junior Stock, the holders of shares
of Series A Preferred Stock shall be entitled to be paid an amount equal to
the Accreted Value with respect to each share of Series A Preferred Stock.
(ii) If, upon any liquidation, dissolution or winding up of the
Corporation, the assets of the Corporation available for distribution to
the holders of Series A Preferred Stock shall be insufficient to permit
payment in full to such holders of the sums which such holders are entitled
to receive in such case, then all of the assets available for distribution
to holders of the Series A Preferred Stock and Series B Preferred Stock
shall be distributed among and paid to such holders ratably in proportion
to the amounts that would be payable to such holders if such assets were
sufficient to permit payment in full.
(iii) Neither the consolidation or merger of the Corporation
with or into any other Person nor the sale or other distribution to another
Person of all or substantially all the assets, property or business of the
Corporation, shall be deemed to be a liquidation, dissolution or winding up
of the Corporation for purposes of this Section 4.3(h).
(i) Conversion.
----------
(i) Stockholders' Right To Convert. No holder of shares of
------------------------------
Series A Preferred Stock shall have any right to convert any shares of
Series A Preferred Stock into Common Stock or any other securities of the
Company prior to February 4, 2006. Thereafter, each share of Series A
Preferred Stock held by the Initial Holder or a Qualified Transferee shall
be convertible, at the sole option and election of such Initial Holder or
Qualified Transferee, into fully paid and nonassessable shares of Common
Stock.
(ii) Number of Shares of Common Stock Issuable upon Conversion.
-------------------------------- ------------------------
The number of shares of Common Stock issued upon conversion of shares of
Series A Preferred Stock pursuant to paragraph (i) above shall be equal to
the product of (A) the Series A Conversion Rate as of the date of the
applicable notice pursuant to paragraph (vi) below, multiplied by (B) the
number of shares of Series A Preferred Stock to be converted.
(iii) Fractional Shares. Notwithstanding any other provision of
-----------------
this Restated Certificate of Incorporation, the Corporation shall not be
required to issue fractions of shares upon conversion of any shares of
Series A Preferred Stock or to distribute certificates which evidence
fractional shares. In lieu of
<PAGE>
fractional shares, the Corporation may pay therefor, at the time of any
conversion of shares of Series A Preferred Stock as herein provided, an
amount in cash equal to such fraction multiplied by the Market Price of a
share of Common Stock on such date.
(iv) Reorganization, Reclassification and Merger Adjustment.
------------------------------------------------------
If there occurs any capital reorganization or any reclassification of the
Common Stock of the Corporation, the consolidation or merger of the
Corporation with or into another Person (other than a merger or
consolidation of the Corporation in which the Corporation is the continuing
corporation and which does not result in any reclassification or change of
outstanding shares of its Common Stock) or the sale or conveyance of all or
substantially all of the assets of the Corporation to another Person, then
each share of Series A Preferred Stock shall thereafter be convertible into
the same kind and amounts of securities (including shares of stock) or
other assets, or both, which were issuable or distributable to the holders
of outstanding Common Stock of the Corporation upon such reorganization,
reclassification, consolidation, merger, sale or conveyance, in respect of
that number of shares of Common Stock into which such share of Series A
Preferred Stock might have been converted immediately prior to such
reorganization, reclassification, consolidation, merger, sale or
conveyance; and, in any such case, appropriate adjustments (as determined
in good faith by the Board of Directors of the Corporation, whose
determination shall be conclusive) shall be made to assure that the
provisions set forth herein shall thereafter be applicable, as nearly as
reasonably may be practicable, in relation to any securities or other
assets thereafter deliverable upon the conversion of the Series A Preferred
Stock.
(v) Notice of Adjustment. Whenever the securities or other
--------------------
property deliverable upon the conversion of the Series A Preferred Stock
shall be adjusted pursuant to the provisions hereof, the Corporation shall
promptly give written notice thereof to each holder of shares of Series A
Preferred Stock at such holder's address as it appears on the transfer
books of the Corporation and shall forthwith file, at its principal
executive office and with any transfer agent or agents for the Series A
Preferred Stock and the Common Stock, a certificate, signed by the Chairman
of the Board, President or one of the Vice Presidents of the Corporation,
and by its Chief Financial Officer, Treasurer or one of its Assistant
Treasurers, stating the securities or other property deliverable per share
of Series A Preferred Stock calculated to the nearest cent or to the
nearest one-hundredth of a share and setting forth in reasonable detail the
method of calculation and the facts requiring such adjustment and upon
which such calculation is based. Each adjustment shall remain in effect
until a subsequent adjustment hereunder is required.
<PAGE>
(vi) Mechanics of Conversion. The Initial Holder or Qualified
-----------------------
Transferee may exercise its option to convert by surrendering for such
purpose to the Corporation, at its principal office or such other office or
agency maintained by the Corporation for that purpose, certificates
representing the shares of Series A Preferred Stock to be converted,
accompanied by a written notice stating that such holder elects to convert
such shares in accordance with Section 4.3(i). The date of receipt of such
certificates and notice by the Corporation at such office shall be the
conversion date (the "Series A Conversion Date"). If required by the
------------------------
Corporation, certificates surrendered for conversion shall be endorsed or
accompanied by a written instrument or instruments of transfer, in form
satisfactory to the Corporation, duly executed by the registered holder or
his or its attorney duly authorized in writing. Within ten (10) Business
Days after the Series A Conversion Date (or, if at the time of such
surrender the shares of Common Stock are not listed or admitted for trading
on any national securities exchange and are not quoted on NASDAQ or any
similar service, within ten Business Days of the determination of the
Market Price pursuant to Section 4.3(l)), the Corporation shall issue to
such holder a number of shares of Common Stock into which such shares of
Series A Preferred Stock are convertible pursuant to paragraph (ii) above.
Certificates representing such shares of Common Stock shall be delivered to
such holder at such holder's address as it appears on the books of the
Corporation.
(vi) Reservation of Common Stock. The Corporation shall at all
---------------------------
times reserve and keep available for issuance upon the conversion of the
shares of Series A Preferred Stock the maximum number of its authorized but
unissued shares of Common Stock as is reasonably anticipated to be
sufficient to permit the conversion of all outstanding shares of Series A
Preferred Stock, and shall take all action required to increase the
authorized number of shares of Common Stock if at any time there shall be
insufficient authorized but unissued shares of Common Stock to permit such
reservation or to permit the conversion of all outstanding shares of Series
A Preferred Stock.
(vii) Termination of Rights. All shares of Series A Preferred
---------------------
Stock which shall have been surrendered for conversion as herein provided
shall no longer be deemed to be outstanding and all rights with respect to
such shares, including the rights, if any, to receive notices and to vote,
shall immediately cease and terminate on the Series A Conversion Date,
except only the right of the holders thereof to receive shares of Common
Stock in exchange therefor and payment of any declared and unpaid dividends
thereon.
(ix) No Conversion Charge or Tax. The issuance and delivery of
---------------------------
certificates for shares of Common Stock upon the conversion of shares of
Series A Preferred Stock shall be made without charge to the holder of
shares of Series A Preferred Stock for any issue or transfer tax, or other
incidental expense in
<PAGE>
respect of the issuance or delivery of such certificates or the securities
represented thereby, all of which taxes and expenses shall be paid by the
Corporation.
(x) FCC Approval. Notwithstanding anything herein to the
------------
contrary, if Federal Communications Commission or other regulatory approval
is required to be obtained prior to the conversion of shares of Series A
Preferred Stock, the holder thereof may nevertheless elect to convert any
or all of its shares of Series A Preferred Stock by written notice given to
the Company in accordance with this paragraph (i), provided, that such
--------
conversion shall not become effective until the close of business on the
date of the receipt of the last of any such approvals and of the surrender
of the certificates representing the shares of the Series A Preferred Stock
to be converted, and the rights of the holder thereof shall continue in
full force and effect pending the receipt of all such approvals, except
that no dividends shall be payable in respect of the period following the
Series A Conversion Date, unless the required approvals are not obtained
and the conversion has not been effected within one (1) year of the Series
A Conversion Date and the applicable conversion notice is withdrawn, in
which event the obligation to pay dividends from and after the Series A
Conversion Date shall be payable in accordance with the terms of
Section 4.3(b).
(xi) Qualified Transfer. If at any time an Initial Holder or
------------------
Qualified Transferee desires to sell, transfer or otherwise dispose of
shares of Series A Preferred Stock pursuant to a Qualified Transfer, it
shall, with respect to each such proposed transfer, give written notice (a
"Qualified Transfer Notice") to the Company at its principal executive
office specifying up to 10 prospective transferees. Upon receipt of such
notice, the Company shall have ten (10) days to give written notice to such
Initial Holder or Qualified Transferee specifying its disapproval of (A)
any or all of such prospective transferees if it has good reason for such
disapproval and specifying such reason and (B) up to two (2) of such
prospective transferees with or without good reason.
(j) Notice of Certain Events. In case the Corporation shall propose
------------------------
at any time or from time to time (i) to declare or pay any dividend payable in
stock of any class to the holders of Common Stock or to make any other
distribution to the holders of Common Stock, (ii) to offer to the holders of
Common Stock rights or warrants to subscribe for or to purchase any additional
shares of Common Stock or shares of stock of any class or any other securities,
rights or options, (iii) to effect any reclassification of its Common Stock,
(iv) to effect any consolidation, merger or sale, transfer or other disposition
of all or substantially all of the property, assets or business of the
Corporation which would, if consummated, adjust the Series A Conversion Rate or
the securities issuable upon conversion of shares of Series A Preferred Stock,
or (v) to effect the liquidation, dissolution or winding up of the Corporation,
then, in each such case, the Corporation shall mail to each holder of shares of
Series A Preferred Stock, at such
<PAGE>
holder's address as it appears on the transfer books of the Corporation, a
written notice of such proposed action, which shall specify (A) the date on
which a record is to be taken for the purpose of such dividend or distribution
of rights or warrants or, if a record is not to be taken, the date as of which
the holders of shares of Common Stock of record to be entitled to such dividend
or distribution of rights or warrants are to be determined, or (B) the date on
which such reclassification, consolidation, merger, sale, conveyance,
dissolution, liquidation or winding up is expected to become effective, and such
notice shall be so given as promptly as possible but in any event at least ten
(10) Business Days prior to the applicable record, determination or effective
date, specified in such notice.
(k) Certain Remedies. Any registered holder of shares of Series A
----------------
Preferred Stock shall be entitled to an injunction or injunctions to prevent
breaches of the provisions of this Restated Certificate of Incorporation and to
enforce specifically the terms and provisions of this Restated Certificate of
Incorporation in any court of the United States or any state thereof having
jurisdiction, this being in addition to any other remedy to which such holder
may be entitled at law or in equity.
(l) Appraisal Procedure. If, at the time the Market Price must be
-------------------
determined for the purpose of calculating the Series A Conversion Rate, the
shares of Common Stock are not listed or admitted for trading on any national
securities exchange and are not quoted on NASDAQ or any similar service, the
Market Price shall be determined as follows:
(i) Two independent accounting or investment banking firms of
nationally recognized standing (each, an "Appraiser"), one chosen by the
---------
Corporation and one by the holders of a majority of the outstanding shares
of Series A Preferred Stock, shall each determine and attempt to mutually
agree upon, the Market Price. Each party shall deliver a notice to the
other appointing its Appraiser within 15 days after the applicable notice
and surrender pursuant to Section 4.3(i)(vi). If either the Corporation or
such holders fail to appoint an appraiser within such 15-day period, the
Market Price shall be determined by the Appraiser that has been so
appointed.
(ii) If within 30 days after appointment of the two Appraisers
they are unable to agree upon the Market Price, an independent accounting
or investment banking firm of nationally recognized standing shall within
ten days thereafter be chosen to serve as a third Appraiser by the mutual
consent of such first two Appraisers. The determination of the Market
Price by the third Appraiser so appointed and chosen shall be made within
30 days after the selection of such third Appraiser.
(iii) If three Appraisers shall be appointed and the
determination of one Appraiser is disparate from the middle determination
by more than twice
<PAGE>
the amount by which the other determination is disparate from the middle
determination, then the determination of such Appraiser shall be excluded,
the remaining two determinations shall be averaged, and such average shall
be binding and conclusive on the Corporation and the holders of the Series
A Preferred Stock; otherwise the average of all three determinations shall
be binding and conclusive on the Corporation and the holders of the Series
A Preferred Stock.
(iv) In connection with any appraisal conducted pursuant to this
paragraph (l), the Appraiser shall adhere to the guidelines provided in the
definition of "Market Price" set forth below, including the proviso
------------
thereto.
(v) The fees and expenses of each Appraiser shall be borne by
the Corporation.
4.4 Powers, Preferences and Rights of the Series B Preferred Stock.
--------------------------------------------------------------
The Series B Preferred Stock shall rank on a parity with the Series A Preferred
Stock, and the powers, preferences and rights of the Series B Preferred Stock,
and the qualifications, limitations, and restrictions thereof, shall be
identical to those of the Series A Preferred Stock, except that (a) shares of
Series B Preferred Stock shall not be, pursuant to the terms of Section 4.3(i)
or otherwise, convertible into shares of Common Stock or any other security
issued by the Corporation, (b) the Corporation may redeem shares of Series B
Preferred Stock in accordance with the terms of Section 4.3(e) at any time
without regard to whether the redemption date is before, on or after the date
referred to in Section 4.3(e)(i), (c) shares of Series B Preferred Stock may be
issued by the Corporation in accordance with the terms of Section 4.8, (d)
holders of Series B Preferred Stock shall not, pursuant to Section 4.3(d) or
otherwise, have the right to elect any directors of the Corporation and (e) the
words "Series B Preferred Stock" and "Series A Preferred Stock" shall be
substituted for all references in Section 4.3 to Series A Preferred Stock and
Series B Preferred Stock, respectively.
4.5 Powers, Preferences and Rights of the Series C Preferred Stock.
--------------------------------------------------------------
The powers, preferences and rights of the Series C Preferred Stock and the
qualifications, limitations and restrictions thereof are as follows:
(a) Ranking. The Series C Preferred Stock shall rank (i) junior to
-------
the Series A Preferred Stock and the Series B Preferred Stock with respect to
dividend rights and rights on liquidation, dissolution or winding up, (ii)
junior to the Series D Preferred Stock with respect to rights on a Statutory
Liquidation, (iii) on a parity with Series D Preferred Stock and Common Stock
with respect to dividend rights, and (iv) senior to the Common Stock and any
series or class of the Corporation's common or preferred stock, now or hereafter
authorized (other than Series A Preferred Stock, Series B Preferred Stock or
Series D Preferred Stock), with respect to rights on liquidation, dissolution
and winding up.
<PAGE>
(b) Dividends. Holders of Series C Preferred Stock shall be entitled
---------
to dividends in cash or property when, as and if, declared by the Board of
Directors of the Corporation. No cash or property dividend or distributions
shall be declared or paid on any shares of Common Stock or on any other series
of preferred stock ranking junior to or on a parity with the Series C Preferred
Stock with respect to dividends, unless the holders of the Series C Preferred
Stock receive cash or property dividend or distributions in an amount per share
of Series C Preferred Stock at least equal to the greater of (i) the dividends
or distributions payable on the number of shares of Common Stock into which a
share of Series C Preferred Stock is then convertible or (ii) the dividends or
distributions per share payable to holders of any series of preferred stock
ranking junior to or on a parity with the Series C Preferred Stock multiplied by
a fraction, the numerator of which is the number of shares of Common Stock into
which a share of Series C Preferred Stock is then convertible and the
denominator of which is the number of shares of Common Stock into which a share
of such series of preferred stock ranking junior to or on a parity with the
Series C Preferred Stock is then convertible; provided, that if such other
--------
series of preferred stock is not convertible into Common Stock, then the
numerator of such fraction shall be the liquidation preference of a share of
Series C Preferred Stock and the denominator of such fraction shall be the
liquidation preference of a share of such other series of preferred stock.
(c) Liquidation Preference.
----------------------
(i) In the event of any liquidation, dissolution or winding up
of the Corporation, the holders of Series C Preferred Stock shall be
entitled to receive out of the assets of the Corporation, whether such
assets are capital or surplus of any nature, after payment is made to
holders of all series of preferred stock ranking senior to the Series C
Preferred Stock with respect to rights on liquidation, dissolution or
winding up (including, in the case of a Statutory Liquidation, the Series D
Preferred Stock), but before any payment shall be made or any assets
distributed to the holders of Common Stock or any series of preferred stock
ranking junior to the Series C Preferred Stock with respect to rights on
liquidation, dissolution or winding up, an amount equal to the Liquidation
Preference and no more.
(ii) If upon any liquidation, dissolution or winding up of the
Corporation the assets of the Corporation to be distributed are
insufficient to permit the payment to all holders of Series C Preferred
Stock and any other series of preferred stock ranking on a parity with
Series C Preferred Stock with respect to rights on liquidation, dissolution
or winding up, (including, in the case of a liquidation, dissolution or
winding up other than a Statutory Liquidation of the Series D Preferred
Stock) to receive their full preferential amounts, the entire
<PAGE>
assets of the Corporation shall be distributed among the holders of Series
C Preferred Stock and all such other series ratably in accordance with
their respective liquidation preference.
(iii) After payment to the holders of Series C Preferred Stock
of the amounts set forth in paragraph (i) above, the entire remaining
assets and funds of the Corporation legally available for distribution, if
any, shall be distributed among the holders of Common Stock and the Series
C Preferred Stock and the Series D Preferred Stock in proportion to the
shares of Common Stock then held by them and the shares of Common Stock
into which their shares of Series C Preferred Stock and Series D Preferred
Stock are convertible (as adjusted from time to time in accordance with the
terms of Section 4.5(f)) as of the date of the liquidation, dissolution or
winding up of the Corporation.
(iv) Neither the consolidation or merger of the Corporation with
or into any other Person nor the sale or other distribution to another
Person of all or substantially all the assets, property or business of the
Corporation, shall be deemed to be a liquidation, dissolution or winding up
of the Corporation for purposes of this Section 4.5(c).
(d) Voting Rights.
-------------
(i) Except as set forth in paragraph (ii) below, on all matters
to be submitted to the stockholders (including, without limitation, the
election of directors), the holders of the Series C Preferred Stock shall
have the right and power to vote on any question or in any proceeding and
to be represented on any question or in any proceeding and to be
represented at, or to receive notice of, any meeting of stockholders in the
same manner as holders of Common Stock, and the Series C Preferred Stock
shall vote together with the Common Stock as a single class.
(ii) The affirmative vote of holders of not less than a majority
of Series C Preferred Stock shall be required to (A) authorize, increase
the authorized number of shares of or issue (including on conversion or
exchange of any convertible or exchangeable securities or by
reclassification) any shares of any class or classes of stock ranking
senior to or pari passu with the Series C Preferred Stock or any additional
shares of Series C Preferred Stock, (B) authorize, adopt or approve each
amendment to this Restated Certificate of Incorporation that would increase
or decrease the par value of the shares of Series C Preferred Stock, alter
or change the powers, preferences or rights of the shares of Series C
Preferred Stock or alter or change the powers, preferences or rights of any
other capital stock of the Corporation if after such alteration or change
such capital stock would rank senior to or pari passu with the Series C
Preferred Stock,
<PAGE>
(C) amend, alter or repeal any provision of this Restated Certificate of
Incorporation so as to affect the shares of Series C Preferred Stock
adversely, or (D) authorize or issue any security convertible into,
exchangeable for or evidencing the right to purchase or otherwise receive
any shares of any class or classes of stock senior to or pari passu with
the Series C Preferred Stock.
(iii) On any matters on which the holders of the Series C
Preferred Stock shall be entitled to vote together with the holders of
Common Stock, each holder of Series C Preferred Stock shall be entitled to
the number of votes equal to the number of whole shares of Common Stock
into which its shares of Series C Preferred Stock are convertible (as
adjusted from time to time pursuant to Section 4.5(f) hereof) on the record
date for such vote.
(e) Conversion. The shares of Series C Preferred Stock shall be
----------
convertible into shares of Common Stock as follows:
(i) Optional Conversion. Each share of Series C Preferred Stock
-------------------
shall be convertible, at the option of the holder thereof, at any time and
from time to time, into the number of fully paid and non-assessable shares
of Common Stock of the Corporation as is determined by dividing the Initial
Conversion Price (as hereafter defined) by the Current Conversion Price (as
defined in Section 4.5(f) below) in effect at the time of conversion. For
purposes of this Section 4.5(e), the "Initial Conversion Price" shall equal
$100.00.
(ii) Automatic Conversion. Upon the IPO Date, each share of
--------------------
Series C Preferred Stock then outstanding shall automatically be converted
into such number of fully paid and nonassessable shares of Common Stock of
the Corporation as is determined by dividing the Initial Conversion Price
by the Current Conversion Price then in effect.
(iii) Fractional Shares. No fractional shares of Common Stock
-----------------
shall be issued upon conversion of shares of Series C Preferred Stock. In
lieu of any fractional share to which the holder would otherwise be
entitled after determination of the aggregate full number of shares of
Common Stock issuable in respect of the Series C Preferred Stock then being
converted, the Corporation shall pay cash equal to such fraction multiplied
by the then Current Conversion Price.
(iv) Mechanics of Optional Conversion. In order for a holder of
--------------------------------
Series C Preferred Stock to convert such shares into shares of Common
Stock, such holder shall surrender the certificate or certificates for such
shares of Series C Preferred Stock at the office of the transfer agent for
the Series C Preferred Stock (or if the Corporation serves as its own
transfer agent, at the principal office
<PAGE>
of the Corporation), together with written notice that such holder elects
to convert all or any number of the shares of the Series C Preferred Stock
represented by such certificate or certificates. If required by the
Corporation, certificates surrendered for conversion shall be endorsed or
accompanied by a written instrument or instruments of transfer, in form
satisfactory to the Corporation, duly executed by the registered holder or
his or its attorney duly authorized in writing. The date of receipt of such
certificates and notice by the transfer agent (or by the Corporation if the
Corporation serves as its own transfer agent) shall be the conversion date
(the "Optional Conversion Date"). The Corporation shall, within ten (10)
------------------------
Business Days after the Optional Conversion Date, issue and deliver at such
office to such holder of Series C Preferred Stock, or to his or its
nominees, a certificate or certificates for the number of whole shares of
Common Stock (and any shares of Series C Preferred Stock represented by the
certificate delivered to the Corporation by the holder thereof that are not
converted into Common Stock) issuable upon such conversion in accordance
with the provisions hereof, together with cash in lieu of fractional shares
calculated in accordance with paragraph (iii) of this Section 4.5(e).
(v) Mechanics of Automatic Conversion. All holders of record of
---------------------------------
shares of Series C Preferred Stock will be given at least thirty but not
more than sixty days' prior written notice of the date fixed (the
"Automatic Conversion Date") and the place designated for automatic
--------------------------
conversion of all shares of Series C Preferred Stock pursuant to this
Section 4.5(e). Such notice will be sent by first class or registered
mail, postage prepaid, to each record holder of Series C Preferred Stock at
such holder's address last shown on the records of the transfer agent for
the Series C Preferred Stock (or the records of the Corporation if it
serves as its own transfer agent). On or before the Automatic Conversion
Date, each holder of shares of Series C Preferred Stock shall surrender his
or its certificate or certificates for all such shares to the Corporation
at the place designated in such notice. If required by the Corporation,
certificates surrendered for conversion shall be endorsed or accompanied by
a written instrument or instruments of transfer, in form satisfactory to
the Corporation, duly executed by the registered holder or his or its
attorney duly authorized in writing. On and after the Automatic Conversion
Date, all rights with respect to the Series C Preferred Stock so converted,
including the rights, if any, to receive notices and to vote, will
terminate, except only the rights of the holders thereof, upon surrender of
their certificate or certificates therefor, to receive certificates for the
number of shares of Common Stock into which such Series C Preferred Stock
has been converted, and payment of any declared but unpaid dividends
thereon. As soon as practicable after the Automatic Conversion Date and
the surrender of the certificate or certificates representing shares of
Series C Preferred Stock, the Corporation shall issue and deliver to such
holder, or on his or its written order to his or its nominees, a
certificate or certificates for the number of whole shares of
<PAGE>
Common Stock issuable upon such conversion in accordance with the
provisions hereof, together with cash in lieu of fractional shares
calculated in accordance with paragraph (iii) of this Section 4.5(e).
(vi) Reservation of Shares. The Corporation shall at all times
----------------------
when the Series C Preferred Stock shall be outstanding, reserve and keep
available out of its authorized but unissued stock, for the purpose of
effecting the conversion of the Series C Preferred Stock, such number of
its duly authorized shares of Common Stock as shall from time to time be
sufficient to effect the conversion of all outstanding shares of Series C
Preferred Stock. Before taking any action which would cause Common Stock,
upon the conversion of Series C Preferred Stock, to be issued below the
then par value of the shares of Common Stock, the Corporation will take any
corporate action that may, in the opinion of its counsel, be necessary in
order that the Corporation may validly and legally issue fully paid and
non-assessable shares of Common Stock to the holders of Series C Preferred
Stock.
(vii) Adjustments for Dividends. Upon any conversion of
-------------------------
Series C Preferred Stock, no adjustment to the Initial Conversion Price or
the Current Conversion Price shall be made for declared and unpaid
dividends on the Series C Preferred Stock surrendered for conversion or on
the Common Stock delivered upon conversion.
(viii) Termination of Rights. All shares of Series C Preferred
---------------------
Stock which shall have been surrendered for conversion as herein provided
or, as to shares of Series C Preferred Stock which are subject to automatic
conversion pursuant to paragraph (vi) above, which have not been so
surrendered prior to the Automatic Conversion Date, shall no longer be
deemed to be outstanding and all rights with respect to such shares,
including the rights, if any, to receive notices and to vote, shall
immediately cease and terminate on the Optional Conversion Date or the
Automatic Conversion Date, except only the right of the holders thereof to
receive shares of Common Stock in exchange therefor and payment of any
declared and unpaid dividends thereon. On and as of the Optional
Conversion Date or the Automatic Conversion Date, the shares of Common
Stock issuable upon such conversion shall be deemed to be outstanding, and
the holder thereof shall be entitled to exercise and enjoy all rights with
respect to such shares of Common Stock, including the rights, if any, to
receive notices and to vote. Shares of Series C Preferred Stock converted
into Common Stock will be restored to the status of authorized but unissued
shares of preferred stock without designation as to series, and may
thereafter be issued, whether or not designated as shares of Series C
Preferred Stock.
<PAGE>
(ix) No Conversion Charge or Tax. The issuance and delivery of
---------------------------
certificates for shares of Common Stock upon the conversion of shares of
Series C Preferred Stock shall be made without charge to the holder of
shares of Series C Preferred Stock for any issue or transfer tax, or other
incidental expense in respect of the issuance or delivery of such
certificates or the securities represented thereby, all of which taxes and
expenses shall be paid by the Corporation.
(f) Adjustments to Conversion Price.
-------------------------------
(i) Current Conversion Price. The Initial Conversion Price
------------------------
shall be subject to adjustment from time to time and such conversion price
as adjusted shall likewise be subject to further adjustment, all as
hereinafter set forth. The term "Current Conversion Price" shall mean, as
------------------------
of any time, the Initial Conversion Price in case no adjustment shall have
been made pursuant to this Section 4.5(f), or the Initial Conversion Price
as adjusted pursuant to this Section 4.5(f), as the case may be.
(ii) Adjustment Formula. If at any time the Corporation shall
------------------
issue any shares of Common Stock (other than Excluded Stock, as defined in
paragraph (vii) below) or any shares of a class or series convertible into
Common Stock (other than Excluded Stock) or any Rights or Related Rights
(as defined below) (collectively with the Common Stock, "Securities")
----------
(other than a dividend or other distribution payable in Common Stock or
Convertible Securities, to which paragraph (iv) below applies) for no
consideration or a consideration per share (the consideration in each case
to be determined in the manner provided in clauses (E) and (F) of paragraph
(iii) below) less than the Market Price, as in effect immediately prior to
the issuance of such Securities, the Current Conversion Price in effect
immediately prior to each such issuance shall forthwith be adjusted to a
Current Conversion Price obtained by multiplying such Current Conversion
Price in effect immediately prior to such issuance by a fraction having (i)
a numerator equal to the sum of (x) the total number of shares of Common
Stock outstanding on a Fully Diluted Basis immediately prior to such
issuance multiplied by the Market Price as in effect immediately prior to
such issuance, plus (y) the consideration received by the Corporation upon
such issuance, and (ii) a denominator equal to the total number of shares
of Common Stock outstanding on a Fully Diluted Basis immediately after such
issuance, multiplied by the Market Price as in effect immediately prior to
such issuance.
(iii) Adjustment Considerations. For the purpose of any
-------------------------
adjustment of the Current Conversion Price pursuant to paragraph (ii)
above, the following provisions shall be applicable:
(A) In the case of the issuance of options or warrants to purchase,
or rights to subscribe for, Common Stock other than Excluded Stock
(collectively,
<PAGE>
the "Rights"), the aggregate maximum number of shares of Common Stock
------
deliverable upon exercise of the Rights shall be deemed to have been issued
at the time the Rights were issued, for an aggregate consideration equal to
(i) the consideration (determined in the manner provided in clauses (E) and
(F) below), if any, received by the Corporation upon the issuance of the
Rights, plus (ii) the minimum purchase price provided in the Rights for the
Common Stock covered thereby; provided, however, that such shares of
-------- -------
Common Stock deliverable upon the exercise of the Rights shall not be
deemed to have been issued unless such aggregate consideration per share
would be less than the Market Price as in effect on the date of and
immediately prior to such issuance.
(B) In the case of the issuance of securities by their terms
convertible into or exchangeable for Common Stock other than Excluded Stock
(collectively, the "Convertible Securities"), or options or warrants to
----------------------
purchase, or rights to subscribe for, securities by their terms convertible
into or exchangeable for Common Stock other than Excluded Stock
(collectively, the "Related Rights"), the aggregate maximum number of
--------------
shares of Common Stock deliverable upon conversion, exchange or exercise of
any Convertible Securities or Related Rights shall be deemed to have been
issued at the time the Convertible Securities or the Related Rights were
issued and for an aggregate consideration equal to (i) the consideration
received by the Corporation upon issuance of the Convertible Securities or
the Related Rights (excluding any cash received on account of accrued
interest or accrued dividends), plus (ii) the additional consideration, if
any, to be received by the Corporation upon the conversion, exchange or
exercise of the Convertible Securities or Related Rights (the consideration
in each case to be determined in the manner provided in clauses (E) and (F)
below); provided, however, that such shares of Common Stock deliverable
-------- -------
upon such conversion, exchange or exercise of the Convertible Securities or
Related Rights shall not be deemed to have been issued unless such
aggregate consideration per share would be less than the Market Price as in
effect on the date of and immediately prior to such issuance.
(C) On any change in the number of shares of Common Stock deliverable
upon the exercise of the Rights or Related Rights or upon the conversion,
exchange or exercise of the Convertible Securities or on any change in the
minimum purchase price of the Rights, Related Rights or Convertible
Securities other than a change resulting from the anti-dilution provisions
of the Rights, Related Rights or Convertible Securities, the Current
Conversion Price shall forthwith be readjusted to such Current Conversion
Price as would have been obtained had the adjustment made upon the issuance
of such Rights, Related Rights or Convertible Securities not converted,
exchanged or exercised prior to such change, been made upon the basis of
such change.
<PAGE>
(D) On the expiration of any of the Rights, Related Rights or
Convertible Securities, the Current Conversion Price shall forthwith be
readjusted to such Current Conversion Price as would have been obtained had
the adjustment made upon the issuance of such Rights or Related Rights or
the issuance of any such Convertible Securities been made upon the basis of
the issuance of only the number of shares of Common Stock actually issued
upon the exercise of such Rights or Related Rights or the conversion,
exchange or exercise of any such Convertible Securities.
(E) In the case of the issuance of Securities for cash, the
consideration shall be deemed to be the amount of cash paid therefor.
(F) In the case of the issuance of Securities for a consideration in
whole or in part other than cash, the consideration other than cash shall
be deemed to be the fair value thereof as determined in good faith by the
Board of Directors of the Corporation, whose determination shall be
conclusive.
(iv) Effect of Dividends, Distributions, Subdivisions or
---------------------------------------------------
Combinations. If the Corporation declares a dividend or other distribution
------------
payable in Common Stock or Convertible Securities or subdivides its
outstanding shares of Common Stock into a larger number or combines its
outstanding shares of Common Stock into a smaller number, then the Current
Conversion Price in effect immediately prior to such dividend, other
distribution, subdivision or combination, as the case may be, shall
forthwith be adjusted to that price determined by multiplying the Current
Conversion Price by a fraction (x) the numerator of which shall be the
total number of shares of Common Stock outstanding on a Fully Diluted Basis
immediately prior to such dividend, other distribution, subdivision or
combination and (y) the denominator of which shall be the total number of
shares of Common Stock outstanding on a Fully Diluted Basis immediately
after such dividend, other distribution, subdivision or combination.
(v) Effect of Distributions In Kind. In case the Corporation
-------------------------------
shall distribute to the holders of its capital stock any additional shares
of its capital stock (other than Securities), stock or other securities of
other persons, evidences of indebtedness issued by the Corporation or other
persons, assets (excluding cash dividends) or options, warrants or rights
(excluding Rights or Related Rights), then, in each such case, immediately
following the record date fixed for the determination of the holders of
Common Stock entitled to receive such distribution, the Current Conversion
Price in effect thereafter shall be determined by multiplying the Current
Conversion Price in effect immediately prior to such record date by a
fraction (A) the numerator of which shall be an amount equal to the
remainder of (x) the Market Price of one share of Common Stock less (y) the
<PAGE>
fair value (as determined in good faith by the Corporation's Board of
Directors, whose determination shall be conclusive) of the stock,
securities, evidences of indebtedness, assets, options, warrants or rights
so distributed in respect of one share of Common Stock, as of the record
date applicable to such distribution, as the case may be, and (B) the
denominator of which shall be the Market Price of one share of Common
Stock, as of the record date applicable to such distribution. Such
adjustment shall be made on the date such distribution is made, and shall
become effective at the opening of business on the business day following
the record date for the determination of stockholders entitled to such
distribution.
(vi) Notice of Changes. Whenever the Current Conversion Price
-----------------
shall be adjusted as provided in this Section 4.5(f), the Corporation shall
forthwith file, at the office of the transfer agent for the Series C
Preferred Stock, at the principal office of the Corporation or at such
other place as may be designated by the Corporation, a statement, certified
by the chief financial officer of the Corporation, showing in detail the
facts requiring such adjustment and the Current Conversion Price that shall
be in effect after such adjustment. The Corporation shall also cause a
copy of such statement to be sent by first class mail, postage prepaid, to
each holder of record of Series C Preferred Stock at such holder's address
as shown in the records of the Corporation.
(vii) Excluded Stock. As used in this Section 4.5(f), "Excluded
--------------
Stock" shall mean (A) a maximum of 100,000 shares (such amount to be
appropriately adjusted in the event of any stock dividend, stock split or
combination, or similar recapitalization affecting the Common Stock) of
Common Stock or options for the purchase thereof issued, sold or granted,
in the past or future, by the Corporation to its employees or consultants
pursuant to bona fide employee stock purchase, option or similar benefit
plans or other arrangements approved by the Board of Directors of the
Corporation, (B) with the approval of holders of a majority of the
outstanding shares of Series C Preferred Stock, a maximum of 5% of the
outstanding shares of Common Stock on a Fully Diluted Basis consisting of
Common Stock or Convertible Securities issued to creditors in connection
with incurrence of indebtedness, and (C) any shares of Series C Preferred
Stock or Common Stock issued upon conversion of Preferred Stock as provided
herein.
(g) Certain Restrictions.
--------------------
(i) Notwithstanding the provisions of Sections 4.5(b), cash
dividends on the Series C Preferred Stock may not be declared, paid or set
apart for payment, nor may the Corporation redeem, purchase or otherwise
acquire any shares of Series C Preferred Stock, if (A) the Corporation is
not solvent or would be rendered insolvent thereby or (B) at such time the
terms and provisions of any
<PAGE>
law or agreement of the Corporation, including any agreement relating to
its indebtedness, specifically prohibit such declaration, payment or
setting apart for payment or such redemption, purchase or other
acquisition, or provide that such declaration, payment or setting apart for
payment or such redemption, purchase or other acquisition would constitute
a violation or breach thereof or a default thereunder.
(ii) So long as shares of Series C Preferred Stock are
outstanding or dividends payable on shares of Series C Preferred Stock have
not been paid in full in cash, the Corporation shall not declare or pay
cash dividends on, or redeem, purchase or otherwise acquire for
consideration, any shares of Common Stock or other shares of capital stock
of the Corporation ranking junior to or on a parity basis with the Series C
Preferred Stock (including the Series D Preferred), except with the prior
written consent of holders of a majority of the outstanding shares of
Series C Preferred Stock, except that the Corporation may acquire, in
accordance with the terms of any agreement between the Corporation and its
employees, shares of Common Stock from its employees at a price equal to
such employee's purchase price therefor without such consent.
(iii) The Corporation shall not permit any Subsidiary of the
Corporation, or cause any other Person, to make any distribution with
respect to, or purchase or otherwise acquire for consideration, any shares
of Common Stock or other shares of capital stock of the Corporation ranking
junior to or on a parity basis with the Series C Preferred Stock (including
the Series D Preferred Stock) unless the Corporation could, pursuant to
paragraph (i) above, make such distribution or purchase or otherwise
acquire such shares at such time and in such manner.
(h) Redemption. The Series C Preferred Stock is not redeemable.
----------
(i) Sinking Fund. There shall be no sinking fund for the payment of
------------
dividends or liquidation preferences on the Series C Preferred Stock.
4.6 Powers, Preferences and Rights of the Series D Preferred Stock.
--------------------------------------------------------------
(a) Ranking. The Series D Preferred Stock shall rank (i) junior to
-------
the Series A Preferred Stock and the Series B Preferred Stock with respect to
dividend rights and rights on liquidation, dissolution or winding up, (ii)
senior to the Series C Preferred Stock with respect to rights on a Statutory
Liquidation, (iii) on a parity with Series C Preferred Stock and Common Stock
with respect to dividend rights, and (iv) senior to the Common Stock and any
series or class of the Corporation's common or preferred stock, now or hereafter
authorized (other than Series A Preferred Stock, Series B Preferred Stock or
Series C Preferred Stock), with respect to rights on liquidation, dissolution
and winding up.
<PAGE>
(b) Other Powers, Preferences and Rights. Subject to paragraph (a)
------------------------------------
above, the powers, preferences and rights of the Series D Preferred Stock, and
the qualifications, limitations, and restrictions thereof, shall be identical to
those of the Series C Preferred Stock, except that (a) in addition to the
conversion rights set forth in Section 4.5(e) (subject to clause (c) below),
shares of Series D Preferred Stock shall be convertible at the option of the
holder thereof, at any time and from time to time, into an equivalent number of
fully paid and non-assessable shares of Series C Preferred Stock, any such
conversion being made in accordance with the applicable provisions of Section
4.5(e); (b) the shares of Series D Preferred Stock shall not have any right to
vote on any matters to be voted on by the stockholders of the Corporation, and
the shares of Series D Preferred Stock shall not be included in determining the
number of shares voting or entitled to vote on any such matters, except that it
shall have the right to vote on matters specified in Section 4.5(d)(ii) or as
otherwise provided by law; (c) shares of Series D Preferred Stock shall not be
subject to automatic conversion upon the IPO Date in accordance with Section
4.5(e)(ii); provided, however, that (i) on and after the IPO Date, the Current
-------- -------
Conversion Price shall be deemed to be the Current Conversion Price as of the
IPO Date and (ii) the Series D Preferred Stock shall be renamed "Senior Common
Stock" upon the IPO Date; and (d) the words "Series D Preferred Stock" and
"Series C Preferred Stock" shall be substituted for all references in Section
4.5 to Series C Preferred Stock and Series D Preferred Stock, respectively.
(c) Reservation of Shares. The Corporation shall at all times when
---------------------
the Series D Preferred Stock shall be outstanding, reserve and keep available
out of its authorized but unissued stock, for the purpose of effecting the
conversion of the Series D Preferred Stock, such number of its duly authorized
shares of Series C Preferred Stock and Common Stock as shall from time to time
be sufficient to effect the conversion of all outstanding shares of Series D
Preferred Stock.
(d) FCC Approval. Notwithstanding anything herein to the contrary,
------------
if Federal Communications Commission or other regulatory approval is required to
be obtained prior to the conversion of shares of Series D Preferred Stock, the
holder thereof may nevertheless elect to convert any or all of its shares of
Series D Preferred Stock by written notice given to the Company in accordance
with the provisions of Section 4.5(e), provided, that such conversion shall not
--------
become effective until the close of business on the date of the receipt of the
last of any such approvals and of the surrender of the certificates representing
the shares of the Series D Preferred Stock to be converted and the rights of the
holder thereof shall continue in full force and effect pending the receipt of
all such approvals.
4.7 Common Stock. Each holder of Common Stock shall be entitled to
------------
one vote for each share of Common Stock held of record on all matters on which
<PAGE>
stockholders generally are entitled to vote and to all other rights, powers and
privileges of stockholders under Delaware law. Upon the dissolution,
liquidation or winding up of the Corporation, after any preferential amounts to
be distributed to the holders of the Preferred Stock and any other class or
series of stock having a preference over the Common Stock then outstanding have
been paid or declared and funds sufficient for the payment thereof in full set
apart for payment, the holders of the Common Stock shall be entitled to receive
pro rata all the remaining assets of the Corporation available for distribution
to its stockholders.
4.8 Exchange of Capital Stock. Notwithstanding any other provision
-------------------------
of this Restated Certificate of Incorporation to the contrary, in the event that
the Initial Holder terminates its obligations under Section 8.6 of the
Stockholders Agreement pursuant to Section 8.8(c) thereof with respect to any
Overlap Territory (as defined therein) (any such termination being referred to
hereinafter as the "Exchange Event"), the following provisions shall apply:
--------------
(a) Right to Exchange. The Corporation shall have the right,
-----------------
exercisable in its sole discretion by written notice (the "Exchange Notice")
---------------
given to the Initial Holder within 60 days after the Exchange Event, to:
(i) require the Initial Holder and each Section 4.8 Transferee
to exchange for an equivalent number of shares of Series B Preferred Stock
either (A) all of the shares of Series A Preferred Stock then owned by the
Initial Holder and each Section 4.8 Transferee or (B) a number of shares of
Series A Preferred Stock then owned by each such holder equal to the
product of (x) the number of shares of Series A Preferred Stock then owned
by such holder multiplied by (y) a fraction, the numerator of which is
equal to the number of POPs (as defined in the Stockholders Agreement) in
the Overlap Territory and the denominator of which is equal to the total
number of POPs in the Territory (as defined in the Stockholders Agreement);
and
(ii) require the Initial Holder and each Section 4.8 Transferee
to exchange, for a number of shares of Series B Preferred Stock determined
in accordance with paragraph (b) below, either (A) all of the shares of
Series D Preferred Stock owned by the Initial Holder on the date hereof (or
shares of Series C Preferred Stock or Common Stock into which such shares
or any shares of Series A Preferred Stock shall have been converted) and
that the Initial Holder or such Section 4.8 Transferee, as the case may be,
continues to own on the date of delivery of the Exchange Notice (any such
shares of Series D Preferred Stock, Series C Preferred Stock or Common
Stock being referred to hereinafter collectively as "Original Shares") or
---------------
(B) a number of Original Shares of Series D Preferred Stock, Series C
Preferred Stock and/or Common Stock, as the case may be, equal to the
product of (x) the number of Original Shares of Series D Preferred
<PAGE>
Stock, Series C Preferred Stock and/or Common Stock, as the case may be,
then owned by each such holder, multiplied by (y) a fraction, the numerator
of which is equal to the number of POPs in the Overlap Territory and the
denominator of which is equal to the total number of POPs in the Territory;
provided, that (x) if the Corporation exercises its right under clause (i)(A) of
- --------
this paragraph (a), it shall be required to exercise its right under clause
(ii)(A) of this paragraph (a), and vice-versa; and if the Corporation exercises
its right under clause (i)(B) of this paragraph (a), it shall be required to
exercise its right under clause (ii)(B) of this paragraph (a), and vice-versa
and (y) the provisions of this Section 4.8(a) shall not apply to any Section 4.8
Transferee which is a Cash Equity Investor.
(Shares of Series A Preferred Stock, and shares of Series D Preferred Stock (and
shares of Series C Preferred Stock or Common Stock into which such shares shall
have been converted) subject to exchange pursuant to this Section 4.8 are
hereinafter referred to collectively as "Exchange Shares.")
---------------
(b) Number of Shares of Series B Preferred Stock Issuable in
--------------------------------------------------------
Exchange. The number of shares of Series B Preferred Stock issuable in exchange
for Original Shares pursuant to clause (ii) of paragraph (a) above shall be
equal to the quotient of the aggregate purchase price paid by the Initial Holder
for the Original Shares being exchanged, divided by the Liquidation Preference
of the Series B Preferred Stock.
(c) Fractional Shares. Notwithstanding any other provision of this
-----------------
Restated Certificate of Incorporation, the Corporation shall not be required to
issue fractions of shares upon exchange of any Exchange Shares or to distribute
certificates which evidence fractional shares. In lieu of fractional shares,
the Corporation may pay therefor, at the time of any exchange of Exchange Shares
as herein provided, an amount in cash equal to such fraction multiplied by the
Market Price of a share of Common Stock on such date.
(d) Mechanics of Exchange. The Exchange Notice shall specify the
---------------------
date fixed for the exchange (the "Exchange Date"), which shall be at least 10
-------------
but no more than 60 days following delivery of the Exchange Notice, and the
place designated for exchange of the Exchange Shares pursuant to this Section
4.8. Such notice will be sent by first class or registered mail, postage
prepaid, to the Initial Holder at such holder's address last shown on the
records of the transfer agent for the Series A Preferred Stock (or the records
of the Corporation if it serves as its own transfer agent). On or before the
Exchange Date, the Initial Holder shall surrender its certificate or
certificates for all such shares to the Corporation at the place designated in
such notice. If required by the Corporation, certificates surrendered for
exchange shall be endorsed or accompanied by a written instrument or instruments
of transfer, in form satisfactory to the Corporation, duly executed by the
Initial Holder or its attorney duly authorized in writing.
<PAGE>
(e) Termination of Rights. On and after the Exchange Date (whether
---------------------
or not the applicable certificates have theretofore been surrendered), all
rights with respect to the Exchange Shares, including the rights, if any, to
receive notices and to vote, will terminate, except only the rights of the
Initial Holder and Section 4.8 Transferees to receive certificates for the
number of shares of Series B Preferred Stock into which such Exchange Shares
have been exchanged, upon surrender of its certificate or certificates therefor,
and payment of any declared but unpaid dividends thereon (which shall accrue and
be payable at the times and on the other terms applicable to such dividends when
declared) and payment of any deferred dividends in respect of Series A Preferred
Stock which shall be payable as set forth in Section 4.3(b)(iii). Within ten
(10) Business Days after the Exchange Date, the Corporation shall issue and
deliver to the Initial Holder, or on its written order to its nominees, a
certificate or certificates for the number of whole shares of Series B Preferred
Stock issuable upon such exchange in accordance with the provisions hereof,
together with cash in lieu of fractional shares calculated in accordance with
paragraph (c) of this Section 4.8.
(f) Reservation of Shares. The Corporation shall at all times
---------------------
reserve and keep available for issuance upon the exchange of Exchange Shares the
maximum number of its authorized but unissued shares of Series B Preferred Stock
as is reasonably anticipated to be sufficient to permit the exchange of all
outstanding Exchange Shares, and shall take all action required to increase the
authorized number of shares of Series B Preferred Stock if at any time there
shall be insufficient authorized but unissued shares of Series B Preferred Stock
to permit such reservation or to permit the exchange of all outstanding Exchange
Shares.
(g) Adjustments for Dividends. Upon any exchange of shares of Series
-------------------------
A Preferred Stock or Series D Preferred Stock, no adjustment to the rate of
conversion shall be made for accrued and unpaid dividends (whether or not
declared) on the Series A Preferred Stock or Series D Preferred Stock, as the
case may be, surrendered for exchange or on the Series B Preferred Stock
delivered upon exchange.
(h) No Exchange Charge or Tax. The issuance and delivery of
-------------------------
certificates for shares of Series B Preferred Stock upon the exchange of
Exchange Shares shall be made without charge to the Initial Holder for any issue
or transfer tax, or other incidental expense in respect of the issuance or
delivery of such certificates or the securities represented thereby, all of
which taxes and expenses shall be paid by the Corporation.
4.9 Redemption of Capital Stock. Notwithstanding any other provision
---------------------------
of this Restated Certificate of Incorporation to the contrary, outstanding
shares of capital stock of the Corporation held by Disqualified Holders shall
always be subject to redemption by the Corporation, by action of the Board of
Directors, if, in the judgment of the Board of Directors, such action should be
taken, pursuant to Section 151(b) of the
<PAGE>
GCL or any other applicable provision of law, to the extent necessary to prevent
the loss or secure the reinstatement of any license or franchise from any
governmental agency held by the Corporation or any of its subsidiaries to
conduct any portion of the business of the Corporation or any of its
subsidiaries, which license or franchise is conditioned upon some or all of the
holders of the Corporation's stock possessing prescribed qualifications. The
terms and conditions of such redemption shall be as follows:
(a) the redemption price of the shares to be redeemed pursuant to
this Section 4.9 shall be equal to the lesser of (i) the Market Price or (ii) if
such stock was purchased by such Disqualified Holder within one year of the
Section 4.9 Redemption Date, such Disqualified Holder's purchase price for such
shares;
(b) the redemption price of such shares may be paid in cash,
Redemption Securities or any combination thereof;
(c) if less than all the shares held by Disqualified Holders are to
be redeemed, the shares to be redeemed shall be selected in such manner as shall
be determined by the Board of Directors, which may include selection first of
the most recently purchased shares thereof, selection by lot or selection in any
other manner determined by the Board of Directors;
(d) at least 30 days' written notice of the Section 4.9 Redemption
Date shall be given to the record holders of the shares selected to be redeemed
(unless waived in writing by any such holder); provided, however, that only 10
-------- -------
days' written notice of the Redemption Date shall be given to record holders if
the cash or Redemption Securities necessary to effect the redemption shall have
been deposited in trust for the benefit of such record holders and subject to
immediate withdrawal by them upon surrender of the stock certificates for their
shares to be redeemed; provided, further, that the record holders of the shares
-------- -------
selected to be redeemed may transfer such shares prior to the Section 4.9
Redemption Date to any holder that is not a Disqualified Holder and, thereafter,
for so long as such shares are not held by a Disqualified Holder, such shares
shall not be subject to redemption by the Corporation;
(e) from and after the Section 4.9 Redemption Date, any and all
rights of whatever nature (including without limitation any rights to vote or
participate in dividends declared on stock of the same class or series as such
shares) with respect to the shares selected from redemption held by Disqualified
Holders on the Section 4.9 Redemption Date shall cease and terminate and such
Disqualified Holders thenceforth shall be entitled only to receive the cash or
Redemption Securities payable upon redemption; and
(f) such other terms and conditions as the Board of Directors shall
determine.
<PAGE>
4.10 Definitions. For the purposes of this Restated Certificate of
-----------
Incorporation, the following terms shall have the meanings indicated:
"Accreted Value" shall mean, with respect to each share of Series A
--------------
Preferred Stock or Series B Preferred Stock, as of any date, the sum of the
Liquidation Preference, plus an amount equal to all unpaid dividends thereon,
including accrued dividends whether or not declared, through such date.
"Affiliate" means, with respect to any Person, any other Person that
---------
directly, or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with that Person. For purposes of this
definition, "control" (including the terms "controlling" and "controlled") means
the power to direct or cause the direction of the management and policies of a
Person, directly or indirectly, whether through the ownership of securities or
partnership or other ownership interests, by contract or otherwise.
"Appraiser" has the meaning assigned to such term in Section
---------
4.3(l)(i).
"Board of Directors" has the meaning assigned to such term in
------------------
Section 4.2(a).
"Business Day" shall mean any day other than a Saturday, Sunday or
------------
other day on which commercial banks in the City of New York are authorized or
required by law or executive order to close.
"Closing Price" shall mean, with respect to each share of any class or
-------------
series of capital stock for any day, (i) the last reported sale price regular
way or, in case no such sale takes place on such day, the average of the closing
bid and asked prices regular way, in either case as reported on the principal
national securities exchange on which such class or series of capital stock is
listed or admitted for trading or (ii) if such class or series of capital stock
is not listed or admitted for trading on any national securities exchange, the
last reported sale price or, in case no such sale takes place on such day, the
average of the highest reported bid and the lowest reported asked quotation for
such class or series of capital stock, in either case as reported on NASDAQ or a
similar service if NASDAQ is no longer reporting such information.
"Common Stock" has the meaning assigned to such term in Section 4.1.
------------
"Disqualified Holder" shall mean any holder of shares of capital stock
-------------------
of the Corporation whose holding of such stock, either individually or when
taken together with the holding of shares of capital stock of the Corporation by
any other holders, may result, in the judgment of the Board of Directors, in the
loss of, or the failure to secure the reinstatement of, any license or franchise
from any governmental agency held by the
<PAGE>
corporation or any of its subsidiaries or affiliates to conduct any portion of
the business of the corporation or any of its subsidiaries or affiliates.
"Dividend Payment Date" shall mean the last day of each March, June,
---------------------
September and December, except that if any Dividend Payment Date is not a
Business Day, then the next succeeding Business Day shall be the Dividend
Payment Date.
"Excluded Stock" has the meaning assigned to such term in Section
--------------
4.5(f)(vii).
"Fully Diluted Basis" shall mean, with respect to the outstanding
-------------------
shares of Common Stock, the number of shares of Common Stock outstanding
assuming the conversion of all outstanding convertible securities (other than
the Series A Preferred Stock) and the exercise of all outstanding warrants,
options or other rights to subscribe for or purchase any shares of Common Stock.
"Initial Holder" means AT&T Wireless PCS Inc., a Delaware corporation,
--------------
and/or any of its Affiliates that is a Subsidiary of AT&T Corp.
"IPO Date" shall mean the first date on which (a) the Common Stock
--------
shall have been registered pursuant to an effective Registration Statement under
the Securities Act of 1933, as amended, (b) the aggregate gross proceeds
received by the Company in connection with such Registration Statement(s) equals
or exceeds $20 million, and (c) the Common Stock shall be listed for trading on
the New York Stock Exchange or the American Stock Exchange or authorized for
trading on NASDAQ, including without limitation its National Market System.
"Junior Stock" shall mean, with respect to shares of Series A
------------
Preferred Stock or Series B Preferred Stock, any capital stock of the
Corporation, including without limitation the Series C Preferred Stock, Series D
Preferred Stock and the Common Stock, ranking junior to the Series A Preferred
Stock or Series B Preferred Stock, as the case may be, with respect to
dividends, distribution in liquidation or any other preference, right or power.
"Liquidation Preference" shall mean, with respect to each share of
----------------------
Preferred Stock, $100 and no more (subject to adjustment for subdivisions or
combinations affecting the number of shares of the applicable class or series of
Preferred Stock).
"Market Price" shall mean, with respect to each share of any class or
------------
series of capital stock for any day, (i) the average of the daily Closing Prices
for the ten consecutive trading days commencing 15 days before the day in
question or (ii) if on such date the shares of such class or series of capital
stock are not listed or admitted for trading
<PAGE>
on any national securities exchange and are not quoted on NASDAQ or any similar
service, the cash amount that a willing buyer would pay a willing seller
(neither acting under compulsion) in an arm's-length transaction without time
constraints per share of such class or series of capital stock as of such date,
viewing the Company on a going concern basis, as determined (A) in the case of a
determination of "Market Price" for the purpose of calculating the Series A
Conversion Rate, pursuant to the terms of Section 4.3(l) and (B) in the case of
a determination of Market Price for any other purpose, in good faith by the
Board of Directors, whose determination shall be conclusive; provided that, in
--------
determining such cash amount, the following shall be ignored: (i) any contract
or legal limitation in respect of shares of Common Stock or Preferred Stock,
including transfer, voting and other rights, (ii) the "minority interest" status
of shares of Common Stock into which shares of Series A Preferred Stock would be
converted, and (iii) any illiquidity arising by contract in respect of the
shares of Common Stock and any voting rights or control rights amongst the
stockholders.
"NASDAQ" shall mean the National Association of Securities Dealers
------
Automated Quotations System.
"Parity Stock" shall mean, with respect to shares of Series A
------------
Preferred Stock or Series B Preferred Stock, any capital stock of the
Corporation ranking on a parity with the Series A Preferred Stock or Series B
Preferred Stock, as the case may be, with respect to dividends, distribution in
liquidation or any other preference, right or power.
"Person" shall mean any individual, firm, corporation, partnership,
------
trust, incorporated or unincorporated association, joint venture, joint stock
company, governmental agency or political subdivision thereof or other entity of
any kind, and shall include any successor (by merger or otherwise) of such
entity.
"Preferred Stock" has the meaning assigned to such term in
---------------
Section 4.1.
"Qualified Transfer" shall mean a sale, transfer or other disposition
------------------
of shares of Series A Preferred Stock to any prospective transferee specified in
a Qualified Transfer Notice, other than a prospective transferee as to which the
Company disapproves in accordance with the terms of the second sentence of
Section 4.3(i)(xi), provided such sale, transfer or other disposition is made
--------
pursuant to a binding agreement entered into no later than one hundred eighty
(180) days after the applicable Qualified Transfer Notice is given.
"Qualified Transferee" shall mean, with respect to any shares of
--------------------
Series A Preferred Stock, (i) any Cash Equity Investor that acquired such shares
pursuant to Section 4.2 of the Stockholders Agreement or (ii) any other holder
that acquired such shares in a Qualified Transfer from an Initial Holder or
Qualified Transferee.
<PAGE>
"Qualified Transfer Notice" has the meaning assigned to such term in
-------------------------
Section 4.3(i)(x).
"Redemption Securities" shall mean any debt or equity securities of
---------------------
the Corporation, any of its subsidiaries or affiliates or any other corporation,
or any combination thereof, having such terms and conditions as shall be
approved by the Board of Directors and which, together with any cash to be paid
as part of the redemption price payable pursuant to Section 4.9, in the opinion
of any nationally recognized investment banking firm selected by the Board of
Directors (which may be a firm which provides investment banking, brokerage or
other services to the Corporation), has a value, at the time notice of
redemption is given pursuant to Section 4.9(d) at least equal to the price
required to be paid pursuant to Section 4.9(a) (assuming, in the case of
Redemption Securities to be publicly traded, that such Redemption Securities
were fully distributed and subject only to normal trading activity).
"Section 4.8 Transferee" shall mean any transferee of shares of Series
----------------------
A Preferred Stock or Series D Preferred Stock issued to the Initial Holder on
the date hereof (or any shares of Series C Preferred Stock or Common Stock into
which any such shares are converted) that are acquired in a private transaction.
"Section 4.9 Redemption Date" shall mean the date fixed by the Board
---------------------------
of Directors for the redemption of any shares of stock of the corporation
pursuant to Section 4.9.
"Senior Stock" shall mean, with respect to shares of Series A
------------
Preferred Stock or Series B Preferred Stock, as the case may be, any capital
stock of the Corporation ranking senior to the Series A Preferred Stock or the
Series B Preferred Stock, as the case may be, with respect to dividends,
distribution in liquidation or any other preference, right or power.
"Series A Conversion Date" has the meaning assigned to such term in
------------------------
Section 4.3(i)(vi).
"Series A Conversion Rate" shall mean, as of any date of
------------------------
determination, a fraction in which the numerator is the Accreted Value of one
share of Series A Preferred Stock as of such date, and the denominator is the
Market Price of Common Stock as of such date.
"Series A Preferred Stock" has the meaning assigned to such term in
------------------------
Section 4.1.
"Series A Redemption Price" has the meaning assigned to such term in
-------------------------
Section 4.3(e)(i).
<PAGE>
"Series B Preferred Stock" has the meaning assigned to such term in
------------------------
Section 4.1.
"Series C Preferred Stock" has the meaning assigned to such term in
------------------------
Section 4.1.
"Series D Preferred Stock" has the meaning assigned to such term in
------------------------
Section 4.1.
"Statutory Liquidation" shall mean the liquidation of the Corporation
---------------------
pursuant to Section 275 of the GCL, as amended.
"Stockholders Agreement" means the Stockholders Agreement, dated as of
----------------------
February 4, 1998, by and among the Corporation, the Initial Holder and the other
stockholders of the Corporation named therein, as the same may be amended,
modified or supplemented in accordance with the terms thereof, a copy of which
is available for inspection by any stockholder at the principal executive
offices of the company.
"Subsidiary" shall mean, with respect to any Person, a corporation or
----------
other entity of which 50% or more of the voting power of the voting equity
securities or equity interest is owned, directly or indirectly, by such Person.
ARTICLE V
Election of Directors need not be by written ballot.
ARTICLE VI
Subject to the separate class vote requirements relating to any class
or series of Preferred Stock, the holders of shares of Series C Preferred Stock
and Common Stock representing at least two-thirds (2/3) of the votes entitled to
be cast for the election of directors of the Corporation, voting together as a
single class, in person or by proxy, at a special or annual meeting of
stockholders called for the purpose, or by written consent, may amend, alter or
repeal this Restated Certificate of Incorporation or the bylaws of the
Corporation (the "Bylaws").
------
ARTICLE VII
7.1 Indemnification. Any person who was or is a party or is
---------------
threatened to be made a party to any threatened, pending, or completed action,
suit, or proceeding (a "Proceeding"), whether civil, criminal, administrative,
----------
or investigative (whether or not by
<PAGE>
or in the right of the Corporation), by reason of the fact that such person, or
a person of whom such person is the legal representative, is or was a director,
officer, incorporator, employee, or agent of the Corporation, or is or was
serving at the request of the Corporation as a director, officer, incorporator,
employee, partner, trustee, or agent of another corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise (an "Other Entity"),
------------
shall be entitled to be indemnified by the Corporation to the full extent then
permitted by law against expenses (including counsel fees and disbursements),
judgments, fines (including excise taxes assessed on a person with respect to an
employee benefit plan), and amounts paid in settlement incurred by him in
connection with such Proceeding. Persons who are not Directors or officers of
the Corporation may be similarly indemnified in respect of service to the
Corporation or to an Other Entity at the request of the Corporation to the
extent the Board of Directors at any time specifies that such persons are
entitled to the benefits of this Article VII.
7.2 Advancement of Expenses. The Corporation shall, from time to
-----------------------
time, reimburse or advance to any Director or officer or other person entitled
to indemnification hereunder the funds necessary for payment of expenses,
including attorneys' fees and disbursements, incurred in connection with any
Proceeding, in advance of the final disposition of such Proceeding; provided,
--------
however, that, if (and only if) required by the GCL, such expenses incurred by
- -------
or on behalf of any Director or officer or other person may be paid in advance
of the final disposition of a Proceeding only upon receipt by the Corporation of
an undertaking, by or on behalf of such Director or officer (or other person
indemnified hereunder), to repay any such amount so advanced if it shall
ultimately be determined by final judicial decision from which there is no
further right of appeal that such Director, officer or other person is not
entitled to be indemnified for such expenses.
7.3 Rights Not Exclusive. The rights to indemnification and
--------------------
reimbursement or advancement of expenses provided by, or granted pursuant to,
this Article VII shall not be deemed exclusive of any other rights to which a
person seeking indemnification or reimbursement or advancement of expenses may
have or hereafter be entitled under any statute, this Restated Certificate of
Incorporation, the Bylaws, any agreement, any vote of stockholders or
disinterested Directors or otherwise, both as to action in his or her official
capacity and as to action in another capacity while holding such office.
7.4 Continuing Rights. The rights to indemnification and
-----------------
reimbursement or advancement of expenses provided by, or granted pursuant to,
this Article VII shall continue as to a person who has ceased to be a Director
or officer (or other person indemnified hereunder), shall inure to the benefit
of the executors, administrators, legatees and distributees of such person, and
in either case, shall inure whether or not the claim asserted is based on
matters which antedate the adoption of this Article VII.
<PAGE>
7.5 Insurance. The Corporation shall have power to purchase and
---------
maintain insurance on behalf of any person who is or was a Director, officer,
employee or agent of the Corporation, or is or was serving at the request of the
Corporation, as a director, officer, employee or agent of an Other Entity,
against any liability asserted against such person and incurred by such person
in any such capacity, or arising out of such person's status as such, whether or
not the Corporation would have the power to indemnify such person against such
liability under the provisions of this Article VII, the Bylaws or under Section
145 of the GCL or any other provision of law.
7.6 Contract Rights; No Repeal. The provisions of this Article VII
--------------------------
shall be a contract between the Corporation, on the one hand, and each Director
and officer who serves in such capacity at any time while this Article VII is in
effect and any other person indemnified hereunder, on the other hand, pursuant
to which the Corporation and each such Director, officer, or other person intend
to be legally bound. No repeal or modification of this Article VII shall affect
any rights or obligations with respect to any state of facts then or, heretofore
or thereafter brought or threatened based in whole or in part upon any such
state of facts.
7.7 Enforceability; Burden of Proof. The rights to indemnification
-------------------------------
and reimbursement or advancement of expenses provided by, or granted pursuant
to, this Article VII shall be enforceable by any person entitled to such
indemnification or reimbursement or advancement of expenses in any court of
competent jurisdiction. The burden of proving that such indemnification or
reimbursement or advancement of expenses is not appropriate shall be on the
Corporation. Neither the failure of the Corporation (including its Board of
Directors, its independent legal counsel and its stockholders) to have made a
determination prior to the commencement of such action that such indemnification
or reimbursement or advancement of expenses is proper in the circumstances nor
an actual determination by the Corporation (including its Board of Directors,
its independent legal counsel and its stockholders) that such person is not
entitled to such indemnification or reimbursement or advancement of expenses
shall constitute a defense to the action or create a presumption that such
person is not so entitled. Such a person shall also be indemnified for any
expenses incurred in connection with successfully establishing his or her right
to such indemnification or reimbursement or advancement of expenses, in whole or
in part, in any such Proceeding.
7.8 Service at the Request of the Corporation. Any Director or
-----------------------------------------
officer of the Corporation serving in any capacity in (a) another corporation of
which a majority of the shares entitled to vote in the election of its directors
is held, directly or indirectly, by the Corporation or (b) any employee benefit
plan of the Corporation or any corporation referred to in clause (a) shall be
deemed to be doing so at the request of the Corporation.
7.9 Sight to Be Covered by Applicable Law. Any person entitled to be
-------------------------------------
indemnified or to reimbursement or advancement of expenses as a matter of right
<PAGE>
pursuant to this Article VII may elect to have the right to indemnification or
reimbursement or advancement of expenses interpreted on the basis of the
applicable law in effect at the time of the occurrence of the event or events
giving rise to the applicable Proceeding, to the extent permitted by law, or on
the basis of the applicable law in effect at the time such indemnification or
reimbursement or advancement of expenses is sought. Such election shall be made,
by a notice in writing to the Corporation, at the time indemnification or
reimbursement or advancement of expenses is sought; provided, however, that if
-------- -------
no such notice is given, the right to indemnification or reimbursement or
advancement of expenses shall be determined by the law in effect at the time
indemnification or reimbursement or advancement of expenses is sought.
ARTICLE VII
No Director of the Corporation shall be liable to the Corporation or
any of its stockholders for monetary damages for breach of fiduciary duty as a
Director, provided that this provision does not eliminate the liability of the
Director (i) for any breach of the Director's duty of loyalty to the Corporation
or its stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the GCL or (iv) for any transaction from which the Director
derived an improper personal benefit. For purposes of the prior sentence, the
term "damages" shall, to the extent permitted by law, include without
limitation, any judgment, fine, amount paid in settlement, penalty, punitive
damages, excise or other tax assessed with respect to an employee benefit plan,
or expense of any nature (including, without limitation, counsel fees and
disbursements). Each person who serves as a Director of the Corporation while
this Article VIII is in effect shall be deemed to be doing so in reliance on the
provisions of this Article VIII, and neither the amendment or repeal of this
Article VIII, nor the adoption of any provision of this Restated Certificate of
Incorporation inconsistent with this Article VIII, shall apply to or have any
effect on the liability or alleged liability of any Director of the Corporation
for, arising out of, based upon, or in connection with any acts or omissions of
such Director occurring prior to such amendment, repeal, or adoption of an
inconsistent provision. The provisions of this Article VIII are cumulative and
shall be in addition to and independent of any and all other limitations on or
eliminations of the liabilities of Directors of the Corporation, as such,
whether such limitations or eliminations arise under or are created by any law,
rule, regulation, bylaw, agreement, vote of stockholders or disinterested
Directors, or otherwise.
IN WITNESS WHEREOF, the undersigned officer of the Corporation has
executed this Restated Certificate of Incorporation this 4th day of February,
1998.
______________________________
Name:
Title:
<PAGE>
EXHIBIT F HAS BEEN FILED SEPARATELY AS
EXHIBIT 10.11 TO THE REGISTRATION STATEMENT
<PAGE>
EXHIBIT G HAS BEEN FILED SEPARATELY AS
EXHIBIT 10.9 TO THE REGISTRATION STATEMENT
<PAGE>
EXHIBIT H
To the Persons Listed on Schedule A Hereto
Ladies and Gentlemen:
We have acted as counsel for AT&T Wireless PCS Inc., a Delaware
corporation ("AT&T PCS"), AT&T Corp., a New York corporation ("AT&T Corp."), and
AT&T Wireless Services. Inc. a Delaware corporation ("AWS" and, together with
AT&T PCS and AT&T Corp., the "AT&T Parties"), in connection with the closing
(the "Closing") under the Securities Purchase Agreement dated as of October 8,
1997 (the "Securities Purchase Agreement"), by and among AT&T PCS. the Cash
Equity Investors, the Management Stockholders, and Triton PCS Holdings, Inc.. a
Delaware corporation (the "Company"). Capitalized terms used herein without
definition shall have the respective meanings ascribed to them in the Securities
Purchase Agreement. This opinion is being delivered pursuant to Section 7 of the
Securities Purchase Agreement.
In connection herewith, we have examined executed copies or
photocopies of executed copies of the following documents (collectively, the
"Transaction Documents"):
1. the Securities Purchase Agreement;
2. the Stockholders' Agreement;
3. the Network Membership License Agreement;
4. the Roaming Agreement; and
5. the instruments of assignment referred to in Section 3.1 of the
Securities Purchase Agreement (the "Instruments of Assignment").
We have also examined the form of Resale Agreement which form is
unexecuted and undated and attached to the Securities Purchase Agreement as
Exhibit C.
In giving this opinion, we have examined and relied on the
representations as to factual matters contained in or made pursuant to the
Transaction Documents, and have also examined and relied upon the originals, or
copies certified or otherwise identified to our satisfaction. of such corporate
records, documents, certificates and other instruments, and have made such other
investigations, as in our judgment are necessary or appropriate to enable us to
render the opinions expressed below.
In our examinations, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to us as originals. the conformity to original documents of all
documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such copies. We have also assumed that each of
the parties (other than the AT&T Parties) has the full power, authority and
legal right to enter into and perform its obligations under each of the
Transaction Documents to which it is a party has duly authorized. executed and
delivered the same, has complied with the terms of the
<PAGE>
Page 2
Transaction Documents, and that each such agreement or instrument is its valid
and binding obligation, enforceable against it in accordance with its terms. We
express no opinion as to the effect on the opinions expressed herein of (a) the
compliance or non-compliance of any party (other than the AT&T Parties) to the
Transaction Documents with any state, Federal or other laws or regulations
applicable to them, (b) the regulatory status or the nature of the business of
any party to the Transaction Documents (other than the AT&T Parties) or (c) the
applicability or effect of any fraudulent transfer or similar law on the
Transaction Documents or any transactions contemplated thereby.
As used herein, the term "Applicable Laws" means the General
Corporation Law of the State of Delaware, the laws of the State of New York and
the Federal laws of the United States of America. "Governmental Authorities"
mean any New York, Delaware or federal executive, legislative, judicial,
administrative or regulatory body. Whenever our opinion herein is indicated to
be based upon our knowledge of any matter or issue, it is intended to signify
that. in the course of our preparation of this opinion and representation of the
AT&T Parties in connection with its execution and delivery of the Transaction
Documents, without having made any special investigation, none of the attorneys
who were involved in the preparation of the opinion. or such representation of
the AT&T Parties, has acquired actual knowledge of the matter or issue.
Based upon the foregoing. subject to the assumptions, qualifications
and limitations stated herein, and relying as to factual matters solely upon
statements of fact contained in the documents that we have examined, we are of
the opinion that:
1. Each AT&T Party is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its
incorporation.
2. Each AT&T Party has all requisite corporate power to own, lease
and operate its properties and to carry on its business as now
being conducted. and to execute, deliver and perform its
obligations under the Transaction Documents to which it is a
party, including the assignment to the Company of the AT&T
Contributed Licenses, and in each case to engage in the
respective Transactions.
3. The execution, delivery and performance by each AT&T Party of
each of the Transaction Documents to which it is a party, and the
consummation of the Transactions to which it is a party,
including the License Transfer, have been duly authorized by all
necessary corporate action on the part of such, AT&T Party and
its stockholders, if applicable, and no other proceedings on its
part or the part of its stockholders is necessary to authorize
the Transaction Documents or to consummate the Transactions.
4. Each Transaction Document to which an AT&T Party is a party (a)
has been duly executed and delivered by such AT&T Party and (b)
constitutes the valid and binding obligation of such AT&T Party,
enforceable against
<PAGE>
Page 3
such AT&T Party in accordance with its terms, subject to the
following qualifications (collectively, the "Enforceability
Qualifications"):
(i) (x)enforcement may be limited by applicable
bankruptcy. insolvency, fraudulent conveyance, reorganization.
moratorium or other similar laws now or hereafter in effect
relating to or affecting creditors' rights or remedies generally
and by general principles of equity (regardless of whether
enforcement is sought in equity or at law) and the discretion of
the court before which any proceeding therefor may be brought,
(y) courts might award damages rather than specific performance
of contractual provisions involving matters other than the
payment of money, and (z) to the extent particular remedies are
available;
(ii) our opinion is subject to limitations on the
enforceability of any rights to contribution or indemnification
provided for in any of the Transaction Documents which are
violative of the public policy underlying any law, rule or
regulation (including any federal or state securities law or
regulation);
(iii) no opinion is expressed as to the enforceability of
provisions relating to restrictive covenants, waiver of remedies
(or the delay or omission of enforcement thereof). disclaimers,
liability limitations with respect to third parties, releases of
legal or equitable rights, or discharges of defenses;
(iv) any provision requiring the payment of attorneys' fees
may be enforceable only to the extent that a court determines
such fees to be reasonable;
(v) no opinion is expressed as to any agreement by any
AT&T Party to the jurisdiction of a particular court or to the
submission to arbitration; and
(vi) no opinion is expressed as to any provision (1)
purporting to waive any objection to the laying of venue or any
claim that an action or proceeding has been brought in an
inconvenient forum or (11) which provides that the Transaction
Documents may only be amended, modified or waived in writing or
stating that all rights or remedies of any party are cumulative
and may be enforced in addition to any other right or remedy and
that the election of a particular remedy does not preclude
recourse to one or more remedies.
5. Except as set forth in the Transaction Documents (including by
reference to a schedule or exhibit), neither the execution,
delivery and performance by each AT&T Party of the Transaction
Documents to which it is a party,
<PAGE>
Page 4
nor the consummation by any AT&T Party of the Transactions,
including the License Transfer will, (a) conflict with any
provision of the organizational documents of such AT&T Party; (b)
contravene any provision of Applicable Law; or (c) require any
consent, waiver, agreement, approval or authorization of or
declaration, filing notice or registration (collectively,
"Consents") (other than Consents that have been obtained) on the
part of any Governmental Authority, except, in the case of
clauses (b) and (c) hereof, where such contravention. or the
failure to obtain or give such Consent, would not have a Material
Adverse Effect on it or materially adversely affect the
Transactions.
6. The Securities Purchase Agreement and the Instruments of
Assignment are in form sufficient to effect the License Transfer.
We express no opinion. however. as to the nature or extent of
AT&T PCS's rights in, or title to. the AT&T PCS Contributed
Licenses or any other property purported to be transferred by the
Securities Purchase Agreement or the Instrument of Transfer.
7. Assuming the due authorization. execution and delivery by AWS of
the Resale Agreement. in the form of Exhibit C to the Securities
Purchase Agreement, the Resale Agreement will. upon such
authorization. execution and delivery, constitute the legal.
valid and binding obligation of AWS enforceable against AWS in
accordance with its terms subject to the Enforceability
Qualifications.
Our opinions rendered in paragraph 5 above are based upon our
consideration of only those statutes, rules and regulations which, in our
experience, are normally applicable to parties in transactions of the type
contemplated by the Transaction Documents.
The foregoing opinions are limited to the laws of the State of New
York. the General Corporation Law of the State of Delaware and the Federal laws
of the United States of America. except that we express no opinion as to (a)
matters arising under or governed by the Communications Act of 1934 or the rules
and regulations of the Federal Communications Commission (the "FCC") promulgated
thereunder, (b) the public service or public utilities laws, rules or
regulations of any jurisdiction, (c) the antitrust, securities, antifraud. trade
regulations, investment company or similar laws of the United States or any
other jurisdiction, (d) the franchise or similar laws of the United States, or
any other jurisdiction, (e) the laws, rules or regulations of any municipality
or other local agency within any state, or (f) the laws of any other
jurisdiction. We are members of the bar of the State of New York. and. as such,
do not purport to be experts on laws other than the laws of the State of New
York, the General Corporation Law of the State of Delaware and certain Federal
laws of the United States. With respect to regulatory matters governed by the
Communications Act of 1934, and the rules and regulations, decisions and
policies published and promulgated by the FCC thereunder and pursuant thereto,
we have relied. with your permission, on the opinion of Young & Jatlow dated
today and addressed to each of you. a copy of which is annexed hereto. With
respect to our opinions set
<PAGE>
Page 5
forth in paragraphs 1. 2, 3. 4(a) and 5(a). we have relied solely with your
permission, on the opinion of Michael Berg. General Attorney for AT&T Corp.
dated today and addressed to each of you. a copy of which is annexed hereto.
This opinion is being furnished to you in connection with the Closing
occurring today. This opinion is solely for your benefit and is not to be used,
circulated, quoted or otherwise referred to for any other purpose without our
prior written consent. We assume no obligation to update or supplement this
opinion to reflect any facts or circumstances that may hereafter come to our
attention or any changes in facts or law that may hereafter occur.
Very truly yours,
<PAGE>
Schedule A
----------
Company:
- --------
Triton PCS Holdings, Inc.
c/o Triton Communications, L.L.C.
101 Lindenwood Drive, Suite 125
Malvern, PA 19355
Attn: Michael E. Kalogris
Steven R. Skinner
Cash Equity Investors:
- ----------------------
CB Capital Investors, L.P. Toronto Dominion Capital (USA), Inc.
380 Madison Avenue, 12th Floor 31 West 52nd Street
New York, NY 10017 New York, NY 10019
Attn: Arnie Charkin Attn. Brian Rich
J.P. Morgan Investment Corporation Toronto Dominion Capital (USA), Inc.
101 California Street, 38th Floor 909 Fannin, Suite 1700
San Francisco, CA 94111 Houston, TX 77010
Attn: John Watkins Attn: Martha Gariepy
Sixty Wall Street SBIC Fund, L.P. First Union Capital Partners, Inc.
101 California Street, 38th Floor One First Union Center
San Francisco, CA 94111 301 South College Street, 5th Floor
Attn: John Watkins Charlotte, NC 28288-0732
Attn: Watts Hamrick
Private Equity Investors III, L.P. Dag-Triton PCS, L.P.
540 Madison Avenue, 36th Floor Two Embarcadero Center, Suite 2930
New York, NY 10022 San Francisco, CA 94111
Attn: Damon Ball Attn: John Duff
Equity-Linked Investors-II
540 Madison Avenue, 36th Floor
New York, NY 10022
Attn: Damon Ball
Management Stockholders:
- ------------------------
Michael E. Kalogris Steven R. Skinner
c/o Triton Communications, L.L.C. c/o Triton Communications, L.L.C.
101 Lindenwood Drive, Suite 125 101 Lindenwood Drive, Suite 125
Malvern, PA 19355 Malvern, PA 19355
<PAGE>
February 4, 1998
To the Persons Listed on Schedule A Hereto
Ladies and Gentlemen:
I am General Attorney for AT&T Corp., a New York corporation
("AT&T Corp."), the parent of AT&T Wireless Services, Inc. a Delaware
corporation ("AWS") and AT&T Wireless PCS Inc., a Delaware corporation ("AT&T
PCS" and, together with AWS and AT&T Corp., the "AT&T Parties"), and have acted
in connection with the closing (the "Closing" under the Securities Purchase
Agreement dated as of October 8, 1997 (the "Securities Purchase Agreement"), by
and among AT&T PCS, the Cash Equity Investors, the Management Stockholders, and
Triton PCS Holdings, Inc., a Delaware corporation (the "Company"). Capitalized
terms used herein without definition shall have the respective meanings ascribed
to them in the Securities Purchase Agreement. This opinion is being delivered
pursuant to Section 7 of the Securities Purchase Agreement.
In connection herewith, we have examined executed copies or
photocopies of executed copies of the following documents (collectively, the
"Transaction Documents"):
1. the Securities Purchase Agreement;
2. the Stockholders' Agreement;
3. the Network Membership License Agreement;
4. the Roaming Agreement; and
5. the instruments of assignment referred to in Section 3.1 of the
Securities Purchase Agreement (the "Instruments of Assignment").
In giving this opinion, I have examined and relied on the
representations as to factual matters contained in or made pursuant to the
Transaction Documents, and have also examined and relied upon the originals, or
copies certified or otherwise identified, of such corporate records, documents,
certificates and other instruments, and have made such other investigations, as
in my judgment are necessary or appropriate to enable me to render the opinions
expressed below.
In such examinations. I have assumed the legal capacity of all natural
persons, the genuineness of all signatures. the authenticity' of all documents
submitted to me as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such copies. I have also assumed that each of
the parties (other than the AT&T Parties) has the full power. authority and
legal right to enter into and perform its obligations under each of the
Transaction Documents to which it is a party, and has duly authorized, executed
and delivered the same, and that each such agreement or
<PAGE>
Page 2
instrument is its valid and binding obligation, enforceable against it in
accordance with its terms. I express no opinion as to the effect on the opinions
expressed herein of (a) the compliance or non-compliance of any party (other
than the AT&T Parties) to the Transaction Documents with any state, Federal or
other laws or regulations applicable to them, (b) the regulatory status or the
nature of the business of any party to the Transaction Documents (other than the
AT&T Parties) or (c) the applicability or effect of any fraudulent transfer or
similar law on the Transaction Documents or any transactions contemplated
thereby.
As used herein, the term "Applicable Laws" means the General
Corporation Law of the State of Delaware and the laws, rules and regulations of
the State of New York and of the United States; and "Governmental Authorities"
mean any New York, Delaware or federal executive, legislative, judicial,
administrative or regulatory body.
Based upon the foregoing, subject to the assumptions, qualifications
and limitations stated herein, and relying as to factual matters solely upon
statements of fact contained in the documents that we have examined, we are of
the opinion that:
1. Each AT&T Party is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its
incorporation.
2. Each AT&T Party has all requisite corporate power to own, lease
and operate its properties and to carry on its business as now
being conducted, and to execute, and deliver and perform its
obligations under the Transaction Documents to which it is a
party, including the assignment to the Company of the AT&T
Contributed Licenses, and in each case to engage in the
respective Transactions.
3. The execution, delivery and performance by each AT&T Party of
each of the Transaction Documents to which it is a party, and the
consummation of the Transactions, including the License Transfer,
have been duly authorized by all necessary corporate action on
the part of each such AT&T Party and its stockholders and no
other proceedings on its part or the part of its stockholders is
necessary to authorize the Transaction Documents or to consummate
the Transactions.
4. Each Transaction Document to which an AT&T Party is a party has
been duly executed and delivered by such AT&T Party and
constitutes the valid and binding obligation of such AT&T Party.
5. Except as set forth in the Transaction Documents (including by
reference to a schedule or exhibit), neither the execution,
delivery and performance by each AT&T Party of the Transaction
Documents to which it is party, nor the consummation by any AT&T
Party of the Transactions, including the License Transfer will,
conflict with any provision of the organizational documents of
such AT&T Party.
<PAGE>
Page 3
The foregoing opinions are limited to the laws of the State of New
York. the General Corporation Law of the State of Delaware and the Federal laws
of the United States of America, except that I express no opinion as to (a)
matters arising under or governed by the Communications Act of 1934 or the rules
and regulations of the Federal Communications Commission (the "FCC") promulgated
thereunder, (b) the public service or public utilities laws, rules or
regulations of any jurisdiction, (c) the antitrust or similar laws of the United
States or any other jurisdiction, (d) the franchise or similar laws of the
United States, or any other jurisdiction, or (e) the laws of any municipality or
other local agency within any state. I am a member of the bar of the State of
New York, and, as such, do not purport to be an expert on laws other than the
laws of the State of New York, the General Corporation Law of the State of
Delaware and certain Federal laws of the United States.
This opinion is being furnished to you in connection with the Closing
occurring today. This opinion is solely for your benefit and is not to be used,
circulated, quoted or otherwise referred to- for any other purpose without our
prior consent. except that Rubin Baum Levin Constant & Friedman ("Rubin Baum"),
counsel to AT&T PCS may rely on this opinion in connection with rendering Rubin
Baum's opinion as required under the Purchase Agreement. We assume no obligation
to update or supplement this opinion to reflect any facts or circumstances that
may hereafter come to our attention or any changes in facts or law that may
hereafter occur.
Very truly
Michael Berg
General Attorney
<PAGE>
Schedule A
----------
Company:
- --------
Triton PCS Holdings, Inc.
c/o Triton Communications, L.L.C.
101 Lindenwood Drive, Suite 125
Malvern, PA 19355
Attn: Michael E. Kalogris
Steven R. Skinner
Cash Equity Investors:
- ----------------------
CB Capital Investors, L.P. Toronto Dominion Capital (USA), Inc.
380 Madison Avenue, 12th Floor 31 West 52nd Street
New York, NY 100 17 New York, NY 10019
Attn: Arnie Charkin Attn. Brian Rich
J.P. Morgan Investment Corporation Toronto Dominion Capital (USA), Inc.
101 California Street, 3 8th Floor 909 Fannin, Suite 1700
San Francisco, CA 94111 Houston, TX 77010
Attn: John Watkins Attn: Martha Gariepy
Sixty Wall Street SBIC Fund, L.P. First Union Capital Partners, Inc.
101 California Street, 3 8th Floor One First Union Center
San Francisco, CA 94111 301 South College Street, 5th Floor
Attn: John Watkins Charlotte, NC 28288-0732
Attn: Watts Hamrick
Private Equity Investors III, L.P. Dag-Triton PCS, L.P.
540 Madison Avenue, 36th Floor Two Embarcadero Center, Suite 2930
New York, NY 10022 San Francisco, CA 94111
Attn: Damon Ball Attn: John Duff
Equity-Linked Investors-II
540 Madison Avenue, 36th Floor
New York, NY 10022
Attn: Damon Ball
Management Stockholders:
Michael E. Kalogris Steven R. Skinner
c/o Triton Communications, L.L.C. c/o Triton Communications, L.L.C.
101 Lindenwood Drive, Suite 125 101 Lindenwood Drive, Suite 125
Malvern, PA 19355 Malvern, PA 19355
<PAGE>
EXHIBIT I
Triton PCS, Inc.
101 Lindenwood Drive
Suite 125
Malvern, PA 19335
Cash Equity Investors
On the Attached Schedule
Gentlemen:
We have acted as special communications counsel on Federal
Communications Commission ("FCC") matters to AT&T Wireless PCS Inc., its
subsidiaries and affiliates ("AT&T PCS") in connection with the negotiation,
preparation and execution of the Securities Purchase Agreement and Stockholders
Agreement (collectively referred to as "Agreements"). This opinion is delivered
to you pursuant to Section 7.2(e) and 7.4(e) of the Securities Purchase
Agreement. Unless otherwise defined herein or the context hereof otherwise
requires, each term used herein with its initial letter capitalized has the
meaning given to such term in the Agreements.
In connection with this opinion, we have examined executed copies of
the Agreements, and related documents referred to herein. We have also examined
such records, documents, certificates, and other instruments, including without
limitation those of the FCC, and have made such investigations of fact and law
as we deem necessary to render this opinion. In making such examinations, we
have assumed the authenticity of all signatures and of all documents submitted
to us as originals and the conformity to originals of all documents submitted to
us as copies. We have relied on representations made by officers and authorized
employees of AT&T PCS. We have limited our investigation to matters of record
before the FCC and to matters which have come to our attention in representing
AT&T PCS. This opinion is limited to matters arising under the Communications
Act of 1934, as amended ("the Act"), and the rules and regulations of the FCC
("Commission rules").
Based upon and subject to the foregoing, it is our opinion that:
1. AT&T PCS is the legal holder of the PCS Licenses attached to
Schedule III of the Securities Purchase Agreement. Each of the PCS Licenses is
valid and is in full force and effect. With regard to the PCS Licenses, AT&T PCS
has submitted to the FCC all required material documents, applications and
reports required pursuant to FCC Rules and is in compliance with respect to the
operation of the PCS Licenses in all material respects.
2. There is not pending, nor to the best of our knowledge, threatened,
against AT&T PCS or the PCS Licenses, any application, action, petition,
objection or other pleading, or any proceeding pending at the FCC which
questions or consents the validity of, or seeks the revocation, non-renewal or
suspension of, any of the PCS Licenses or which seeks modification
<PAGE>
Page 2
of any of the PCS Licenses in any case which would have a material adverse
effect on the ability of AT&T PCS to consummate the transactions contemplated by
the Agreements.
3. All FCC consents required in order to consummate the transactions
contemplated by the Agreements have been obtained and all such consents are
Final Orders.
4. There is not pending at the FCC any action, petition or proceeding,
nor to the best of our knowledge is any such matter threatened, against AT&T PCS
which could cause AT&T PCS to be ineligible to hold the PCS Licenses.
This opinion is furnished by us as counsel to AT&T PCS, to you, your
counsel, your successors and assigns solely in connection with the subject
transactions. This opiruon may not be relied upon by you for any other purpose,
or furnished to, quoted to or relied upon by any other person, firm or
corporation for any purpose without our prior written consent. Notwithstanding
the foregoing, we hereby consent to reliance hereon by your lenders under your
senior credit facility and your lenders successors and any future participants
and assigns that are financial institutions as expressly permitted by the credit
agreement provided that you advise the recipient that: (1) this opinion speaks
only as of the date hereof and to its addressees and their respective successors
and permitted participants and assigns, (2) we have no responsibility or
obligation to update this opinion to consider its applicability or correctness;
and (3) we have no responsibility or obligation to take into account changes in
law, facts or any other development of which we may later become aware.
Sincerely,
Young & Jatlow
__________________________________
David C. Jatlow
For the Firm
<PAGE>
EXHIBIT J
February 4, 1998
AT&T Wireless PCS Inc.
Management Stockholders listed
on Schedule I hereto
Ladies and Gentlemen:
We have acted as counsel for those entities listed on Exhibit
A hereto (the "Cash Equity Investors") in connection with the closing (the
---------------------
"Closing") under the Securities Purchase Agreement, dated as of October 8, 1997
-------
(the "Securities Purchase Agreement"), by and among the Cash Equity Investors,
-----------------------------
AT&T Wireless PCS Inc., a Delaware corporation ("AT&T PCS"), the Management
--------
Stockholders named therein and Triton PCS Holdings, Inc., a Delaware corporation
(the "Company"). Capitalized terms used herein without definition shall have the
-------
respective meanings ascribed to them in the Securities Purchase Agreement. This
opinion is being delivered pursuant to Section 7 of the Securities Purchase
---------
Agreement.
In connection with this opinion, we have examined originals or
copies, certified or otherwise identified to our satisfaction of the following:
(i) the Securities Purchase Agreement,
(ii) the Stockholders' Agreement;
(iii) the Pledge Agreements;
(iv) the Restated Certificate; and
(v) the Restated Bylaws.
The items referred to in clauses (i) - (iii) above are
------- --- -----
referred to herein as the "Transaction Documents". We have also examined such
---------------------
corporate and limited partnership records, documents, certificates and other
instruments as we have deemed necessary as a basis for the opinions set forth
below. We wish to point out that we do not represent. and are not familiar with,
the business or operations of the Cash Equity Investors. Accordingly. as to
questions of fact material to such opinions. we have been shed with, and with
your consent have relied solely and without independent investigation upon, (a)
the foregoing records. documents and other instruments, (b) the truth and
accuracy of the representations and warranties of the parties set forth in or
made pursuant to the Transaction Documents and (c) certificates and assurances,
including telephonic advice, from public officials, in each case as we have
deemed necessary for purposes of expressing the opinions set forth herein.
<PAGE>
AT&T Wireless PCS Inc.
Management Stockholders
February 4, 1998
Page 2
In our examination, and for all purposes of the opinions
expressed in this letter, we have assumed, with your permission. and without
independent investigation, that:
(a) the signatures of individuals (other than
individuals signing on behalf of the Cash Equity Investors)
signing all documents in connection with which this opinion is
rendered are genuine and authorized;
(b) all documents submitted to us as copies, whether
certified or not, conform to authentic original documents;
(c) all parties (other than the Cash Equity
Investors) to the documents reviewed by us have full power and
authority to execute, deliver and performed thereunder and
under the documents required or permitted to be delivered and
performed thereunder, and all such documents have been duly
authorized by all necessary corporate or other actions on the
part of such parties, have been duly executed by such parties,
have been duly delivered by such parties and, as to all such
parties, constitute the legal, valid and binding obligations
of such parties;
(d) no consent, approval, authorization, declaration
or filing by or with any governmental commission, board or
agency is required for the valid execution and delivery by the
parties to the Transaction Documents (other than the Cash
Equity Investors); and
(e) there are no agreements between any of the
parties that would alter the agreements set forth in the
Transaction Documents.
As used herein, the term "Applicable Laws" means the General
Corporation Law of the State of Delaware and the laws. rules and regulations of
the State of New York and of the United States, subject in each case to the
exceptions set forth below. "Governmental Authorities" means any New York,
Delaware or federal executive, legislative, judicial, administrative or
regulatory body. Whenever our opinion with respect to the existence or absence
of facts is indicated to be based on our knowledge or awareness, we are
referring solely to the actual knowledge of the particular Mayer Brown & Platt
attorneys who have represented the Cash Equity Investors in connection with the
Transaction Documents. Except as expressly set forth herein, we have not
undertaken any independent investigation to determine the existence or absence
of such facts and no inference as to our knowledge concerning such facts should
be drawn from the fact that such representation has been undertaken by us.
Based upon the foregoing, subject to the assumptions,
qualifications and limitations stated herein, we are of the opinion that:
1. Each Cash Equity Investor is validly existing and in good
standing under the laws of the jurisdiction of its incorporation or
organization.
<PAGE>
AT&T Wireless PCS Inc.
Management Stockholders
February 4, 1998
Page 3
2. Each Cash Equity Investor has all requisite corporate,
limited partnership, or limited liability company (as the case may be) power to
execute, deliver and perform its obligations under the Transaction Documents to
which it is a party.
3. The execution, delivery and performance by each Cash Equity
Investor of each of the Transaction Documents to which it is a party, and the
consummation of the transactions contemplated thereby, have been duly authorized
by all necessary cornomte or partnership (as the case may be) action on the part
of each such Cash Equity Investor and its stockholders or partners (as the case
may be) and no other proceedings on its part or the part of its stockholders or
partners is necessary to authorize the Transaction Documents or consummate the
Transactions.
4. Each Transaction Document to which a Cash Equity Investor
is a party has been duly executed and delivered by such Cash Equity Investor and
constitutes the valid and binding obligation of such Cash Equity Investor.
enforceable against such Cash Equity Investor in accordance with its terms,
subject to the following qualifications:
(a) enforcement may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally and by
general principles of equity (regardless of whether
enforcement is sought in equity or at law);
(b) our opinion is subject to the effect of general
principles of equity, including, without limitation. concepts
of materiality. reasonableness, good faith and fair dealing
(regardless of whether considered in a proceeding in equity or
at law) and by limitations on the availability of specific
performance. injunctive relief or other equitable remedies;
(c) our opinion is subject to limitations on the
enforceability of any rights to contribution or
indemnification provided for in any of the Transaction
Documents which are violative of the public policy underlying
any law, rule or regulation (including any federal or state
securities law or regulation);
(d) no opinion is expressed as to the enforceability
of provisions relating to restrictive covenants, waiver of
remedies (or the delay or omission of enforcement thereof),
disclosures, liability, limitations, with respect to third
parties, releases of legal or equitable rights or discharges
of defenses;
(e) no opinion is expressed as to any agreement by
any Cash Equity Investor to the jurisdiction of a particular
court or to the submission to arbitration; and
(f) no opinion is expressed as to any provision (i)
purporting to waive
<PAGE>
AT&T Wireless PCS Inc.
Management Stockholders
February 4, 1998
Page 4
any objection to the laying of venue or any claim that an
action or proceeding has been brought in an inconvenient forum
or (ii) which provides that the Transaction Documents may only
be amended, modified or waived in writing or stating that all
rights or remedies of any party are cumulative and may be
enforced in addition to any other right or remedy and that the
election of a particular remedy does not preclul@ recourse to
one or more remedies.
5. Except as set forth in the Transaction Documents (including
by reference to a schedule or exhibit), neither the execution, delivery and
performance by any Cash Equity Investor of the Transaction Documents to which
such Cash Equity Investor is a party, nor the consummation by the Cash Equity
Investors of the Transactions, will (a) conflict with the organizational
documents of such Cash Equity Investor; (b) contravene any provision of
Applicable Law; or (c) require any Consent on the part of any Governmental
Authority, other than consents required by the Federal Communications Commission
and the Federal Trade Commission, except, in the case of clauses (b) and (c)
hereof, where such contravention, or the failure to obtain or give such Consent,
would not have a Material Adverse Effect on it or materially adversely affect
the Transactions.
The foregoing opinions are limited to the laws of the State of
New York, the General Corporation Law of the State of Delaware and the Federal
laws of the United States of America, except that we express no opinion as to
(i) matters arising under or governed by the Communications Act of 1934 or the
rules and regulations of the Federal Communications Commission (the "FCC")
promulgated thereunder, (ii) public service or public utilities, securities,
antitrust. investment company or similar laws of the United States or any other
jurisdiction, (iv) the franchise or similar laws of the United States or any
other jurisdiction, or (v) the laws of any county, city. municipal or other
local ordinances. rules or regulations of any state. Our opinions rendered in
paragraphs 1, 2, our opinion with respect to due execution and delivery in
paragraph 4 and our opinion in paragraph 5(a) are based solely upon the opinion
of Messrs. Howard Rice Nemerovski Canady Falk & Rabkin, dated February 4, 1998,
with respect to DAG-Triton PCS, L.P., a copy of which is attached hereto. Our
opinions rendered in paragraphs 1, 2, 3, our opinion with respect to due
execution and delivery in paragraph 4 and our opinion in paragraph 5(a) are
based solely upon the opinion of Steve Antal, Counsel to First Union Capital
Partners, Inc., dated February 4, 1998, with respect to First Union Capital
Partners, Inc., a copy of which is attached hereto. Our opinions rendered in
paragraph 5(b) and (c) above are based upon our review of those statutes, rules,
regulations and judicial decisions which n our experience are normally
applicable to or normally relevant in connection with transactions of the type
provided for in the Transaction Documents. We are members of the bar of the
State of New York, and, as such, do not purport to be experts on laws other than
the laws of the State of New York, the General Corporation Law of the State of
Delaware and certain Federal laws of the United States.
<PAGE>
AT&T Wireless PCS Inc.
Management Stockholders
February 4, 1998
Page 5
The opinion expressed herein shall be effective only as of the
date of this opinion letter. We do not assume responsibility for updating this
opinion letter as of any date subsequent to the date of this opinion letter.
This opinion is being furnished to you solely in connection
with the Closing occurring today. This opinion is solely for your benefit and is
not to be used, circulated, quoted or otherwise referred to for any other
purpose without our prior written consent.
Very truly yours,
<PAGE>
SCHEDULE I
Management Stockholders:
-----------------------
Michael Kalogris
Steven Skinner
<PAGE>
Exhibit A
CASH EQUITY INVESTORS
---------------------
CB Capital Investors, L.P. First Union Capital Partners, Inc.
380 Madison Avenue, 12th Floor One First Union Center
New York, NY 10017 301 South College Street / 5th Floor
Attn: Arnie Chavkin Charlotte, NC 28288-0732
Tel: (212) 622-3100 Attn: Watts Hanuick
Fax: (212) 622-3101 Tel: (704) 374-4791
Fax: (704) 374-6711
J.P. Morgan Investment Corporation DAG-Triton PCS, L.P.
101 California Street, 38th Floor Two Embarcadero Center
San Francisco, CA 94111 Suite 2930
Attn: John Watkins San Francisco, CA 94111
Tel: (415) 954-3200 Attn: John Duff
Fax: (415) 954-4737 Tel: (415) 788-2755
Fax: (415) 788-7311
Sixty Wall Street SBIC Fund, L.P.
101 California Street, 3 8th Floor
San Francisco, CA 94111
Attn: John Watkins
Tel: (415) 954-3200
Fax: (415) 954-4737
Private Equity Investors III, L.P.
540 Madison Avenue, 36th Floor
New York, NY 10022
Attn: Damon Ball
Tel: (212) 838-9191
Fax: (212) 838-9807
Equity-Linked Investors-II
540 Madison Avenue, 36th Floor
New York, NY 10022
Attn: Damon Ball
Tel: (212) 838-9191
Fax: (212) 838-9807
<PAGE>
[Opinion of Messrs. Howard Rice Nemerovski Canady Falk & Rabkin]
<PAGE>
February 4, 1998
Mayer, Brown & Platt
1675 Broadway
New York, NY 10019-5820
Ladies and Gentlemen:
We have acted as counsel for DAG-Triton PCs, L.P., a Delaware
limited partnership (the "Partnership"), in connection with the closing (the
"Closing") under the Securities Purchase Agreement, dated as of October 8, 1997
(the "Securities Purchase Agreement"), by and among AT&T Wireless PCs Inc., a
Delaware corporation ("AT&T PCs"), the Cash Equity Investors, the Management
Stockholders, and Triton PCs, Inc., a Delaware corporation (the "Company"). By
Joinder to Securities Purchase Agreement dated as of December 19, 1997, Duff
Ackerman Goodrich & Associates, L.P. ("DAG") joined and agreed to be bound by
the Securities Purchase Agreement. By Assignment and Assumption Agreement dated
as of December 22, 1997, DAG assigned to the Partnership, and the Partnership
assumed, all of DAG's rights and obligations under the Securities Purchase
Agreement. Capitalized terms used herein without definition shall have the
respective meanings ascribed to them in the Securities Purchase Agreement. This
opinion in being delivered pursuant to Section 7 of the Securities Purchase
Agreement.
In connection herewith, we have examined executed copies or
photocopies of executed copies of the following documents (collectively, the
"Transaction Documents"):
1. the Securities Purchase Agreement;
2. the Restated Certificate and Restated Bylaws;
3. the stockholders' Agreement; and
4. the Pledge Agreement.
In giving this opinion, we have examined and relied on the
representations as to factual matters contained in or made pursuant to the
Transaction Documents, and have also examined and relied upon the originals, or
copies, certified or otherwise identified to our satisfaction, of such corporate
and partnership records, documents, certificates and other instruments, and have
made such other investigations, as in our judgment are necessary or appropriate
to enable us to render the opinions expressed below.
In our examinations, we have assumed the legal capacity of all
natural persons, the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such copies.
<PAGE>
Mayer, Brown & Platt
February 4, 1998
Page 2
Based upon the foregoing, subject to the assumptions,
qualifications and limitations stated herein, we are of the o,o2.n3.on that:
1. The Partnership is validly existing and in good standing
under the laws of the State of Delaware.
2. The Partnership has all requisite limited partnership power
to execute, deliver and perform its obligations under the Transaction Documents
to which it is a party, and in each case to engage in the respective
Transactions.
3. The execution, delivery and performance by the Partnership
of each of the Transaction Documents to which it in a party, and the
consummation of the Transactions, have beer. duly authorized by all necessary
partnership action on the part of the Partnership and its partners, and no other
proceedings on its part or an the part of its partners is necessary to authorize
the Transaction Documents or consummate the Transactions.
4. Each Transaction Document to which the Partnership is a
party has been duly executed and delivered by the Partnership.
5. Except as set forth in the Transaction Documents (including
by reference to a schedule or exhibit), neither the execution, delivery and
performance by the Partnership of the Transaction Documents to which the
Partnership is a party, nor the consummation by the Partnership of the
Transactions, will conflict with the organizational documents of the
Partnership.
We have disclosed to you that we are members of the bar of the
State of California, are admitted to practice only in the State of California,
and are opining herein only with respect to the substantive laws of the State of
California and the General Corporation Law of the State of Delaware. Without
limiting the foregoing, we express no opinion as to (i) matters arising under or
governed by the Communications Act of 1934 or the rules and regulations of the
Federal Communications Commission Promulgated thereunder, (ii) the public
service or public utilities laws, rules or regulations of any jurisdiction,
(iii) the antitrust or similar laws of the United States or any other
jurisdiction, (iv) the franchise or similar laws of the United States or any
other jurisdiction, or (v) the laws of any municipality or other local agencies
within any state. In addition, we express no opinion as to conflicts of law or
choice o-@ law.
This opinion is being furnished to you in connection with the
Closing occurring today. This opinion is solely for your benefit and is not to
be used, circulated, quoted or otherwise referred to for any other purpose
without our prior consent. We assume no obligation to update or supplement this
opinion to reflect any facts or circumstances that may hereafter come to our
attention or any changes in facts or law that may hereafter occur.
<PAGE>
Mayer, Brown & Platt
February 4, 1998
Page 3
Very truly yours,
HOWARD, RICE, NEMEROVSKI, CANADY,
FALK & RABKIN
A Professional Corporation
By:______________________________
Donald S. Scherer
<PAGE>
[Opinion of Steve Antal, Counsel to First Union Capital Partners, Inc.]
<PAGE>
February 4, 1998
MAYER, BROWN & PLATT
1675 Broadway
New York, New York 10019-5820
Ladies and Gentlemen:
We have acted as counsel for First Union Capital Partners,
Inc. ("FUCP") in connection with the closing (the "Closing") under the
Securities Purchase Agreement, dated as of October 8, 1997 (the "Securities
Purchase Agreement"), by and among certain Cash Equity Investors, (including
FUCP), AT&T Wireless PCS Inc., a Delaware corporation ("AT&T PCS"), the
Management Stockholders, and Triton PCS, Inc., a Delaware Corporation (the
"Company"). Capitalized terms used herein without definition shall have the
respective meanings ascribed to them in the Securities Purchase Agreement.
In connection herewith, we have examined executed copies or
photocopies of executed copies of the following documents (collectively, the
"Transaction Documents"):
1. The Securities Purchase Agreement;
2. The Restated Certificate and Restated Bylaws;
3. The Stockholders' Agreement
4. The Pledge Agreement
In giving this opinion, we have examined and relied on the
representations as to factual matters contained in or made pursuant to the
Transaction Documents, and have also examined and relied upon the originals, or
copies certified or otherwise identified to our satisfaction, of such corporate
records, documents, certificates and other instruments, and have made such other
investigations, as in our judgment are necessary or appropriate to enable use to
render the opinions expressed below.
In our examinations, we have assumed the legal capacity of all
natural persons, the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such copies. We have also assumed that each of
the parties (other than FUCP) has the full power, authority and legal right to
enter into and perform its obligations under each of the Transaction Documents
to which it is a party, and that each such agreement or instrument is its valid
and binding obligation, enforceable against it in accordance whit its terms. We
express no opinion as to the effect on the opinion s expressed herein of (i) the
compliance or non-compliance of any party (other than FUCP) to the Transaction
Documents with any state, federal or other laws or regulations applicable to
them,
<PAGE>
Mayer, Brown & Platt
February 4, 1998
Page 2
(ii) the regulatory status or the applicability or effect of any fraudulent
transfer or similar law on the Transaction Documents or any transactions
contemplated thereby.
As used herein, the term "Applicable Laws" means the General
Corporation Law of the State of Delaware and the law, rules and regulations of
the State of New York and of the United States, subject in each case to
exceptions set forth in the penultimate paragraph of this opinion. "Governmental
Authorities" means any New York, Delaware or regulatory body. Whenever our
opinion herein is indicated intended to signify that, in the course of our
preparation of this opinion. "Governmental Authorities" means any New York,
Delaware or federal executive, legislative, judicial, administrative or
regulatory body. Whenever our opinion herein is indicated to be based upon our
knowledge of any matter or issue, it is intended to signify that, in the course
of our preparation of this opinion and representation of FUCP in connection with
its execution and delivery of the Transaction Documents, without having made any
special investigation, none of the attorneys who were involved in the
preparation of the opinion, or such representation of FUCP, has acquired actual
knowledge of the matter or issue.
Based upon the foregoing, subject to the assumption,
qualifications and limitations stated herein, and relying as to factual matters
solely upon statements of fact contained in the document that we have examined,
we are of the opinion that:
1. FUCP is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation.
FUCP has all requisite corporate power to execute, deliver and
perform its obligations under the Transaction Documents to which it is a party,
and in each case to engage in the respective Transactions.
The execution, delivery and performance by FUCP of each of the
Transaction Documents to which it is a party, and the consummation of the
Transactions, have been duly authorized by all necessary corporate action on the
part of FUCP and no other proceedings on its part or the part of its
stockholders is necessary to authorize the Transaction Documents or consummate
the Transactions.
Each Transaction Document to which FUCP is a party has been
duly executed and delivered by FUCP and constitutes the valid and binding
obligation of FUCP, enforceable against FUCP in accordance with its terms,
subject to the following qualifications:
a. enforcement may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally and by
general principles of equity (regardless of whether
enforcement is sought in equity or at law);
b. our opinion is subject to limitations on the
enforceability of any rights to contribution or
indemnification provided for in any of the Transaction
<PAGE>
Mayer, Brown & Platt
February 4, 1998
Page 3
Documents which are violative of the public policy underlying
any law, rule or regulation (including any federal or state
securities law or regulation); and
c. no opinion is expressed as to the enforceability
of provisions relating to restrictive covenants, waiver of
remedies (or delay or omission of enforcement thereof),
disclosures, liability, limitations, with respect to third
parties, indemnification, releases of legal or equitable
rights or discharges of defenses.
5. Except as set forth in the Transaction Documents
(including by reference to a schedule or exhibit),
neither the execution, delivery and performance by
FUCP of the Transaction Documents to which FUCP is a
party, nor the consummation by FUCP of the
Transactions, will (a) conflict with the
organizational documents of the Company; (b)
contravene any provision of Applicable Law; or (c)
require any Consent on the part of any Governmental
Authority, except, in the case of clauses (b) and (c)
hereof, where such contravention, or the failure to
obtain or give such Consent, would not have a
Material Adverse Effect on it or materially adversely
affect the Transactions.
The foregoing opinions are limited to the law of the State of
New York, the General Corporation Law of the State of Delaware and the Federal
laws of the United States of America, except that we express no opinion as to
(i) matters arising under or governed by the Communications Act of 1934 or the
rules and regulations of the Federal Communications Commission (the "FCC")
promulgated thereunder, (ii) the public service or public utilities laws, rules
or regulations of any jurisdiction, (iii) the antitrust or similar laws of the
United States or any other jurisdiction, (iv) the franchise, blue-sky or similar
laws of the United States or any other jurisdiction, or (v) the laws of any
municipality or other local agencies within any state. We are members of the bar
of the State of New York, and, as such, do not purport to be experts on laws
other than the laws of the State of New York, the General Corporation Law of the
State of Delaware and certain Federal laws of the United States.
This opinion is being furnished to you in connection with the
Closing occurring today. This opinion is solely for your benefit and is not to
be used, circulated, quoted or otherwise referred to for any other purpose
without our prior consent. We assume no obligation to update or supplement this
opinion to reflect any facts or circumstances that may hereafter come to our
attention or any changes in facts or law that may hereafter occur.
Very truly yours,
<PAGE>
Mayer, Brown & Platt
February 4, 1998
Page 4
Stephen J. Antal
<PAGE>
EXHIBIT K
PLEDGE AGREEMENT
----------------
PLEDGE AGREEMENT, dated February 4, 1998, made by Steven R. Skinner
("Pledgor"), to Triton PCS, Inc., a Delaware corporation ("Pledgee").
------- -------
WHEREAS, Pledgor has entered into a Securities Purchase Agreement, dated as
of October 8, 1997 (the "Purchase Agreement"; capitalized terms defined therein
------------------
and not otherwise defined herein being used herein as therein defined), with the
Company, the other Cash Equity Investors, and the other parties named therein,
pursuant to which Pledgor has agreed, among other things, to make Cash Equity
Investor Contributions to the Company on the terms and subject to the conditions
thereof;
WHEREAS, Pledgor is the owner of 2,500 shares (the "Pledged Shares") of
--------------
Series C Preferred Stock, par value $0.01 per share, of the Company;
WHEREAS, the other parties to the Purchase Agreement have required, as a
condition to their execution and delivery of the Purchase Agreement and their
consummation of the transactions contemplated thereby, that Pledgor make the
pledge contemplated by this Agreement in order to secure Pledgor's obligation to
make capital contributions to the Company in respect of its Unfunded Commitment
in accordance with the terms of Section 2.2 of the Securities Purchase Agreement
and Section 3.10 of the Stockholders Agreement (the "Unfunded Commitment
-------------------
Obligations");
- -----------
NOW, THEREFORE, in consideration of the premises and in order to induce the
other Purchasers to make their respective Contributions to the Company, Pledgor
hereby agrees with Pledgee as follows:
SECTION 1. Pledge. Pledgor hereby pledges to Pledgee, and grants to
------
Pledgee a security interest in the following, whether now owned or hereafter
acquired (the "Collateral"):
----------
(a) the Pledged Shares and the certificates representing the Pledged
Shares, and all dividends, cash, instruments, securities and other property from
time to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of the Pledged Shares; and
(b) all proceeds of any and all of the foregoing Collateral (including,
without limitation, proceeds that constitute property of the types described
above).
SECTION 2. Security for Obligations. This Agreement secures the Unfunded
------------------------
Commitment Obligations and all Pledgor's obligations under, in respect of or in
connection with this Agreement (all such obligations being referred to
hereinafter,
<PAGE>
together with the Unfunded Commitment Obligations, as the "Obligations").
-----------
Without limiting the generality of the foregoing, this Agreement secures the
payment of all amounts that constitute part of the Obligations and would be owed
by Pledgor to Pledgee under the Purchase Agreement or Stockholders Agreement but
for the fact that they are unenforceable or not allowable due to the existence
of a bankruptcy, reorganization or similar proceeding involving Pledgor.
SECTION 3. Delivery of Collateral. All certificates or instruments
----------------------
representing or evidencing the Collateral shall be delivered to and held by or
on behalf of Pledgee pursuant hereto and shall be in suitable form for transfer
by delivery, or shall be accompanied by duly executed instruments of transfer or
assignment in blank, all in form and substance satisfactory to Pledgee. Pledgee
shall have the right, at any time in its discretion and without notice to
Pledgor, to transfer to or to register in the name of Pledgee or any of its
nominees any or all of the Collateral, subject only to the rights specified in
Section 6(a); provided, that notwithstanding the foregoing, until any transfer
--------
of beneficial ownership with respect to the Collateral pursuant to any exercise
of remedies under Section 11, Pledgor shall continue to be the beneficial owner
of the Collateral. In addition, Pledgee shall have the right at any time to
exchange certificates or instruments representing or evidencing Collateral for
certificates or instruments of smaller or larger denominations.
SECTION 4. Representations and Warranties. Pledgor represents and
------------------------------
warrants as follows:
(a) Pledgor is the legal and beneficial owner of the presently
existing Collateral free and clear of any Lien except for the security interest
created by this Agreement and Liens created by the Stockholders Agreement.
(b) The pledge of the Pledged Shares pursuant to this Agreement,
together with the delivery of the Pledged Shares pursuant to Section 3, creates
a valid and perfected first priority security interest in the presently existing
Collateral, securing the payment of the Obligations.
(c) No consent of any other Person and no authorization, approval, or
other action by, and no notice to or filing with, any Governmental Authority is
required (i) for the pledge by Pledgor of the Collateral pursuant to this
Agreement or for the execution, delivery or performance of this Agreement by
Pledgor, (ii) for the perfection or maintenance of the security interest created
hereby (including the first priority nature of such security interest) or (iii)
for the exercise by Pledgee of the voting or other rights provided for in this
Agreement or the remedies in respect of the Collateral pursuant to this
Agreement (except (x) as may be required in connection with any disposition of
any portion of the Pledged Shares by laws affecting the offering and sale of
securities generally, (y) that the consent, authorization or approval of the FCC
may be required if
2
<PAGE>
the exercise of rights or remedies by Pledgee hereunder would result in a
voluntary or involuntary assignment of or transfer of control of a License and
(z) for the filing of financing statements pursuant to the Code (as defined
below) with respect to Collateral).
SECTION 5. Further Assurances. Pledgor agrees that at any time and
------------------
from time to time, at the expense of Pledgor, Pledgor will promptly execute and
deliver all further instruments and documents, and take all further action, that
may be necessary, or that Pledgee may reasonably request, in order to perfect
and protect any security interest granted or purported to be granted hereby or
to enable Pledgee to exercise and enforce its rights and remedies hereunder with
respect to any Collateral, including, without limitation, all action specified
in Section 13.
SECTION 6. Voting Rights; Dividends; Etc. (a) Unless and until
-----------------------------
Pledgor shall fail to pay in full within 35 days of the due date any of the
Unfunded Commitment Obligations:
(i) Pledgor shall be entitled to exercise or refrain from exercising
any and all voting and other consensual rights pertaining to the Collateral
or any part thereof for any purpose not inconsistent with the terms of this
Agreement or the Stockholders Agreement.
(ii) Pledgor shall be entitled to receive and retain any and all
dividends and interest, cash, instruments and other property paid in
respect of the Collateral, provided that any and all
--------
(A) dividends and interest paid or payable other than in cash
in respect of, and instruments and other property received, receivable
or otherwise distributed in respect of, or in exchange for, any
Collateral,
(B) dividends and other distributions paid or payable in cash
in respect of any Collateral in connection with a partial or total
liquidation or dissolution or in connection with a reduction of
capital, capital surplus or paid-in-surplus, and
(C) cash paid, payable or otherwise distributed in respect of
principal of, or in redemption of, or in exchange for, any Collateral,
shall be, and shall be forthwith delivered to Pledgee to hold as,
Collateral and shall, if received by Pledgor, be received in trust for the
benefit of Pledgee, be segregated from the other property or funds of
Pledgor, and be forthwith delivered to Pledgee as Collateral in the same
form as so received (with any necessary endorsement or assignment).
3
<PAGE>
(b) In the event that Pledgor shall fail to pay in full within 35
days of the due date any of the Unfunded Commitment Obligations:
(i) All rights of Pledgor to exercise or refrain from exercising the
voting and other consensual rights which it would otherwise be entitled to
exercise pursuant to Section 6(a)(i), and to receive the dividends,
interest, cash, instruments and other property which it would otherwise be
authorized to receive and retain pursuant to Section 6(a)(ii), shall cease,
and all such rights shall thereupon become vested in Pledgee who shall
thereupon have the sole right to exercise or refrain from exercising such
voting and other consensual rights and to receive and hold as Collateral
such dividends and interest payments.
(ii) All dividends and interest payments that are received by Pledgor
contrary to Section 6(b)(i) shall be received in trust for the benefit of
Pledgee, shall be segregated from other funds of Pledgor and shall be
forthwith paid over to Pledgee as Collateral in the same form as so
received (with any necessary endorsement or assignment).
(c) Pledgee shall execute and deliver (or cause to be executed and
delivered) to Pledgor all such proxies and other instruments as Pledgor may
reasonably request for the purpose of enabling Pledgor to exercise the voting
and other rights which it is entitled to exercise pursuant to Section 5(b)(i)
above and to receive the dividends or interest payments that it is authorized to
receive and retain pursuant to Sections 6(a)(ii) and 6(b)(ii).
SECTION 7. Transfer Restriction. Pledgor shall not Transfer (as such
--------------------
term is defined in the Stockholders' Agreement) any Pledged Shares or other
Collateral to any Person, unless this Pledge Agreement remains in effect with
respect to all of the Collateral (if any) other than the Collateral being
Transferred and concurrently with such Transfer the transferee pledges all of
the transferred Collateral in favor of the Company pursuant to a pledge
agreement in the form of this Pledge Agreement. The Pledgee shall release the
security interest created by this Agreement to the extent necessary in order to
facilitate any Transfer complying with the terms of this Section 7.
SECTION 8. Pledgee Appointed Attorney-in-Fact. If at any time the
----------------------------------
Pledgor shall fail to pay in full within 35 days of the due date any of its
Unfunded Commitment Obligations, Pledgee shall automatically and without further
action become Pledgor's attorney-in-fact, with full authority in the place and
stead of Pledgor and in the name of Pledgor or otherwise, from time to time in
Pledgee's discretion to take any action and to execute any instrument which
Pledgee may deem necessary or advisable to accomplish the purposes of this
Agreement (subject to the rights of Pledgor under Section 6), including, without
limitation, to receive, endorse and collect all instruments made
4
<PAGE>
payable to Pledgor representing any dividend, interest payment or other
distribution in respect of the Collateral or any part thereof and to give full
discharge for the same.
SECTION 9. Pledgee May Perform. If Pledgor fails to perform any
-------------------
agreement contained herein, Pledgee may itself perform, or cause performance of,
such agreement, and the expenses of Pledgee incurred in connection therewith
shall be payable by Pledgor under Section 12.
SECTION 10. Pledgee's Duties. The powers conferred on Pledgee
----------------
hereunder are solely to protect its interest in the Collateral and shall not
impose any duty upon it to exercise any such powers. Except for the reasonable
care in the custody and preservation of any Collateral in its possession and the
accounting for monies and other instruments and property actually received by it
hereunder, Pledgee shall have no duty as to any Collateral, as to ascertaining
or taking action with respect to calls, conversions, exchanges, maturities,
tenders or other matters relative to any Collateral, whether or not Pledgee has
or is deemed to have knowledge of such matters, or as to the taking of any
necessary steps to preserve rights against any parties or any other rights
pertaining to any Collateral. Pledgee shall be deemed to have exercised
reasonable care in the custody and preservation of any Collateral in its
possession if such Collateral is accorded treatment substantially equal to that
which Pledgee accords its own property.
SECTION 11. Remedies Upon Default. In the event that Pledgor shall
---------------------
fail to pay in full within 35 days of the due date any of its Obligations:
(a) Pledgee may exercise in respect of the Collateral, in addition to
other rights and remedies provided for herein or otherwise available to it, all
the rights and remedies of a secured party on default under the Uniform
Commercial Code in effect in the State of New York at that time (the "Code")
----
(whether or not the Code applies to the affected Collateral), and may also,
without notice except as specified below, sell the Collateral or any part
thereof in one or more parcels at public or private sale, at any exchange,
broker's board or at any of Pledgee's offices or elsewhere, for cash, on credit
or for future delivery, and upon such other terms as Pledgee may deem
commercially reasonable. Pledgor agrees that, to the extent notice of sale
shall be required by law, at least ten days' notice to Pledgor of the time and
place of any public sale or the time after which any private sale is to be made
shall constitute reasonable notification. Pledgee shall not be obligated to
make any sale of Collateral regardless of notice of sale having been given.
Pledgee may adjourn any public or private sale from time to time by announcement
at the time and place fixed therefor, and such sale may, without further notice,
be made at the time and place to which it was so adjourned.
(b) Any cash held by Pledgee as Collateral and all cash proceeds
received by Pledgee in respect of any sale of, collection from, or other
realization upon all or any part of the Collateral may, in the discretion of
Pledgee, be held by Pledgee as
5
<PAGE>
collateral for, and/or then or at any time thereafter be applied (after payment
of any amounts payable to Pledgee pursuant to Section 12) in whole or in part by
Pledgee against, all or any part of the Obligations then due. Any surplus of
such cash or cash proceeds held by Pledgee and remaining after payment in full
of all the Obligations shall be paid over to Pledgor.
SECTION 12. Interest and Expenses. In the event that Pledgor shall
---------------------
fail to pay in full within 35 days of the due date any of the Unfunded
Commitment Obligations, it will upon demand pay to Pledgee (a) in respect of the
period commencing on the date of such payment default and ending on the date its
Unfunded Commitment equals zero, interest (computed on the basis of a 360-day
year of twelve 30-day months) on the aggregate amount of its Unfunded Commitment
at a fluctuating rate per annum equal to the Company's borrowing rate under the
Credit Agreement, plus four percent (4%), provided that in no event shall the
--------
Pledgor be obligated to pay interest in excess of the maximum interest rate
permitted under applicable law, and (b) the amount of all reasonable expenses,
including the reasonable fees and expenses of its counsel and of any experts and
agents, that Pledgee may incur in connection with (i) the administration of this
Agreement, (ii) the custody or preservation of, or the sale of, collection from,
or other realization upon, any of the Collateral, (iii) the exercise or
enforcement of any of the rights of Pledgee hereunder or (iv) the failure by
Pledgor to perform or observe any of the provisions hereof.
SECTION 13. Amendments, Etc. No amendment or waiver of any provision
---------------
of this Agreement, and no consent to any departure by Pledgor here from, shall
in any event be effective unless the same shall be in writing and signed by
Pledgee and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
SECTION 14. Notices. All notices and other communications provided
-------
for hereunder shall be in writing and shall be delivered by hand, by nationally
recognized overnight courier or by facsimile transmission, in each case to the
address for the recipient specified in the Purchase Agreement. All such notices
and other communications shall be effective upon delivery or upon facsimile
transmission, when confirmed by return facsimile transmission.
SECTION 15. Continuing Security Interest.
----------------------------
(a) This Agreement shall create a continuing security interest in the
Collateral and shall (a) remain in full force and effect until the date
Pledgor's Unfunded Commitment equals zero, or, if Pledgor shall have failed to
pay in full when due any of the Unfunded Commitment Obligations, the later of
such date and the date it has paid in full in cash all of the Obligations, (b)
be binding upon Pledgor, its successors and assigns,
6
<PAGE>
and (c) inure, together with the rights and remedies of Pledgee hereunder, to
the benefit of, and be enforceable by, Pledgee and its successors.
(b) Pledgee agrees to release the Collateral upon deposit by Pledgor
into a cash collateral account in favor of Pledgee, the terms of which cash
collateral account shall be acceptable to Pledgee in its sole discretion, the
aggregate amount of the cash equal to Pledgor's remaining Unfunded Commitment
Obligations.
SECTION 16. Release and Termination. Upon the date Pledgor's
-----------------------
Unfunded Commitment equals zero, or, if Pledgor shall have failed to pay in full
when due any of the Unfunded Commitment Obligations, the later of such date and
the date it has paid in full in cash all of the Obligations, the security
interest granted hereby shall terminate and all rights to the Collateral shall
revert to Pledgor. Upon any such termination, Pledgee will, at Pledgor's
expense, release to Pledgor all Collateral then held by it and execute and
deliver to Pledgor such documents as Pledgor shall reasonably request to
evidence such termination.
SECTION 17. Governing Law; Terms. This Agreement shall be governed
--------------------
by, and construed in accordance with, the laws of the State of New York, except
as required by mandatory provisions of law and except to the extent that the
validity or perfection of the security interest hereunder, or remedies
hereunder, in respect of any particular Collateral are governed by the laws of a
jurisdiction other than the State of New York. Unless other wise defined herein
or in the Purchase Agreement, terms defined in Article 9 of the Code are used
herein as therein defined.
7
<PAGE>
IN WITNESS WHEREOF, Pledgor has caused this Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
STEVEN R. SKINNER
________________________________
Agreed and Accepted:
TRITON PCS HOLDINGS, INC.
By_______________________
Name:
Title:
8
<PAGE>
EXHIBIT L
AT&T Wireless Services, Inc.
5000 Carillon Point
Kirkland, WA 98033
The Cash Equity Investors party to
the Securities Purchase Agreement
referred to below
Ladies and Gentlemen:
We have acted as counsel to Triton PCS Holdings, Inc, a
Delaware corporation formerly known as Triton PCS, Inc. (the "Company"), the
subsidiaries listed on Exhibit A-1 hereto (the "Subsidiaries") and those
stockholders listed on Exhibit A-2 hereto as Type I Management Stockholders (the
"Type I Management Stockholders") and Type II Management Stockholders (the "Type
II Management Stockholders" and collectively with the Type I Management
Stockholders. the "Management Stockholders"), in connection with the closing
(the "Closing") under the Securities Purchase Agreement, dated as of October 8,
1997 (together with the documents attached as schedules and exhibits thereto,
the "Securities Purchase Agreement"), by and among the Company, Michael E.
Kalogris ("Kalogris"), Steven R. Skinner ("Skinner"), AT&T Wireless PCS Inc.. a
Delaware corporation ("AT&T PCS"), and the Cash Equity Investors that are
parties thereto. Capitalized terms used herein without definition shall have the
respective meanings ascribed to them in the Securities Purchase Agreement. This
opinion letter is being delivered to you pursuant to Sections 7.3(d) and 7.4(d)
of the Securities Purchase Agreement.
In connection herewith, we have examined executed copies or
photocopies of executed copies of the following documents (collectively, the
"Transaction Documents"):
1. the Securities Purchase Agreement;
2. the Restated Certificate and Restated Bylaws;
3. the Stockholders' Agreement;
4. the Network Membership License Agreement;
5. the Roaming Agreement;
6. the Employment Agreements; and
7. the Pledge Agreements executed by Kalogris and
Skinner.
In rendering this opinion letter, we have examined and relied
on the representations as to factual matters contained in or made pursuant to
the Transaction Documents, and have also examined and relied upon the originals,
or copies certified or
<PAGE>
otherwise identified to our satisfaction, of such corporate records, documents,
certificates (including the certificate attached hereto as Exhibit B) and other
---------
instruments, and have made such other investigations as in our judgment are
necessary or appropriate to enable us to render the opinions expressed below.
With respect to our opinions expressed in paragraph 1 below as to whether the
Company and its Subsidiaries are in good standing under the laws of the State of
Delaware, we have, with your permission, relied solely on good standing
certificates issued prior to the date hereof by the Office of the Secretary of
State of the State of Delaware.
In our examinations, we have assumed the legal capacity of all
natural persons, the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified or Photostat copies and the
authenticity of the originals of such copies. We have also assumed that (i) each
of the parties (other than the Company, the Subsidiaries and the Type I
Management Stockholders) has the full power. authority and legal right to enter
into and perform its obligations under each of the Transaction Documents to
which it is a party, (ii) each of the parties (other than the Company, the
Subsidiaries and the Type I Management Stockholders) has duly authorized,
executed and delivered the same, (iii) each of the parties (other than the
Company, the Subsidiaries and the Type I Management Stockholders) has compiled
with the terms of the Transaction Documents, and (iv) each Transaction Document
(except, with the respect to the Stockholders' Agreement, as to which our
opinion is set forth in paragraph 7 below) is the valid and binding obligation
of each party thereto, enforceable against such party in accordance with its
terms. We express no opinion as to the effect on the opinions expressed herein
of (a) the compliance or non-compliance of any party to the Transaction
Documents with any state, federal or other laws or regulations applicable to
them except for the compliance by the Company. the Subsidiaries and the
Management Stockholders with the DGCL and the DLLCA (as each such term is
hereinafter defined) as expressly provided in this opinion letter, (b) the
regulatory status or the nature of the business of any party to the Transaction
Documents or (c) the applicability or effect of any fraudulent transfer or
similar law on the Transaction Documents or any transactions contemplated
thereby.
Whenever any opinion herein is stated to be based upon our
knowledge of any matter or issue, it is intended to signify that, in the course
of our preparation of this opinion letter and representation of the Company, the
Subsidiaries and the Management Stockholders in connection with their execution
and delivery of the Transaction Documents, without having made any special
investigation, none of the attorneys who were involved in the preparation of
this opinion letter or such representation of the Company. the Subsidiaries and
the Management Stockholders has acquired actual knowledge of the matter or
issue.
Based upon the foregoing, subject to the assumptions,
qualifications and limitations stated herein, and relying as to factual matters
solely upon statements of fact contained in the documents that we have examined,
we are of the opinion that:
1. The Company and each of its Subsidiaries that is a
corporation are corporations duly organized, validly
existing and in good standing- under the laws of the
State of Delaware. Each of the Subsidiaries that is a
2
<PAGE>
limited liability company is a limited liability
company duly formed, validly existing and in good
standing under the laws of the State of Delaware.
2. The Company and each of its Subsidiaries have all
requisite corporate (or limited liability company, as
applicable) power to own, lease and operate their
respective properties and to carry on their
respective businesses as now being conducted and as
proposed to be conducted under the Transaction
Documents, and in the case of the Company to execute,
deliver and perform its obligations under the
Transaction Documents to which it is a party,
including the issuance of the Preferred Stock and the
Common Stock, and in each case to engage in the
respective Transactions.
3. The execution, delivery and performance by the
Company and the Subsidiaries of each of the
Transaction Documents to which it is a party, and the
consummation of the Transactions by the Company and
the Subsidiaries, have been duly authorized by all
necessary corporate, limited liability company or
trust action on the part of the Company, the
Subsidiaries and the Type I Management Stockholders
and no other proceeding on the part of the Company.
the Subsidiaries or the Type I Management
Stockholders is necessary to authorize the
Transaction Documents or to consummate the
Transactions. Each Transaction Document to which the
Company, any Subsidiary or a Type I Management
Stockholder is a party has been duly executed and
delivered by the Company, such Subsidiary and such
Type I Management Stockholders.
4. Except as set forth in the Transaction Documents
(including by reference to a schedule or exhibit).
neither the execution, delivery and performance by
the Company or any Subsidiary of the Transaction
Documents to which it is a party, nor the
consummation of the Transactions, will (i) conflict
with any provisions of (a) with respect to the
Company, the Restated Certificate or the Restated
Bylaws, (b) with respect to Triton Management
Company, Inc., its certificate of incorporation or
its bylaws, or (c) with respect to any other
Subsidiary, its certificate of formation or limited
liability company agreement, or (ii) require any
Consent under the DGCL or DLLCA that has not already
been obtained. The execution, delivery and
performance by the Company and the Management
Stockholders of the Stockholders' Agreement will not
contravene any provision of the DGCL.
5. Before giving effect to the filing of the Restated
Certificate, (i) the authorized capital stock of the
Company consists of 1,000,000 shares of Common Stock,
par value $0.01 per share, 140,505.69 of which shares
are issued and outstanding, have been validly issued
and fully paid and are
3
<PAGE>
nonassessable, and (ii) to our knowledge, based
solely on a review of the Company's stock ledger, the
record owners of such shares of Common Stock as of
the date hereof, before giving effect to the
Transactions,. are set forth on Exhibit A-3 hereto.
-----------
To our knowledge, before giving effect to the
Transactions, there are no options, wan-ants. calls,
subscriptions, or other rights, or other agreements
or commitments, obligating the Company to issue,
transfer or sell any shares of capital stock of the
Company except pursuant to the Securities Purchase
Agreement.
6. Upon consummation of the Transactions, the shares of
Preferred Stock being issued pursuant to the
Securities Purchase Agreement will have been duly
authorized and validly issued, will be fully paid and
nonassessable, and will be free of any Liens caused
or created by the Company, except as set forth in the
Stockholders' Agreement and the Restated Certificate.
The shares of Common Stock or Preferred Stock issued
upon conversion or exchange of the Preferred Stock.
when issued p t to the terms of the Preferred Stock
and the Restated Certificate, will be validly issued,
fully paid and nonassessable, and will be free of any
Liens caused or created by the Company. except as set
forth in the Stockholders' Agreement and the Restated
Certificate.
7. The Stockholders' Agreement has been duly executed
and delivered by the Company and the Type I
Management Stockholders and constitutes the valid and
binding obligation of the Company and the Type I
Management Stockholders. enforceable against the
Company and the Type I Management Stockholders in
accordance with its terms. Assuming the due execution
and delivery of the Stockholders' Agreement by the
Type II Management Stockholders. the Stockholders'
Agreement constitutes the valid and binding
obligation of the Type II Management Stockholders in
accordance with its terms.
The Opinions set forth in paragraph 7 above are subject to the
following qualifications:
(i) (A) enforcement may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or other similar
laws now or hereafter in effect relating to or affecting creditors' rights or
remedies generally and by general principles of equity (regardless of whether
enforcement is sought in equity or at law) and the discretion of the court
before which any proceeding therefor may be brought, (B) courts might award
damages rather than specific performance of contractual provisions involving
matters other than the payment of money, and (C) to the extent particular
remedies are available;
(ii) our opinions are subject to limitations on the
enforceability of any rights to contribution or indemnification provided for in
the Stockholders' Agreement that are violative of the public policy underlying
any law, rule or regulation;
4
<PAGE>
(iii) no opinion is expressed as to the enforceability of
provisions relating to restrictive covenants, waiver of remedies (or the delay
or omission of enforcement thereof), disclaimers, liability limitations with
respect to third parties. releases of legal or equitable rights, or discharges
of defenses-,
(iv) any provision requiring the payment of attorneys' fees
may be enforceable only to the extent that a court determines such fees to be
reasonable;
(v) no opinion is expressed as to any agreement by the
Company or any Management Stockholder to the jurisdiction of a particular court
or to the submission to arbitration; and
(vi) no opinion is expressed as to any provision (A)
purporting to waive any objection to the laying of venue or any claim that an
action or proceeding has been brought in an inconvenient form or (B) that
provides that the Stockholders' Agreement may only be amended, modified or
waived in writing or stating that all rights or remedies of any party are
cumulative and may be enforced in addition to any other right or remedy and that
the election of a particular remedy does not preclude recourse to one or more
remedies.
The foregoing opinions are limited to the Delaware General
Corporation Law (the "DGCL") and the Delaware Limited Liability Company Act (the
"DLLCA"). We are members of the bar of the Conunonwealth of Pennsylvania, and,
as such, do not purport to be experts on laws other than the laws of the
Commonwealth of Pennsylvania, the DGCL and the DLLCA.
This opinion letter is being furnished to you in connection
with the Closing occurring today. This opinion letter is solely for your benefit
and is not to be used circulated. quoted or otherwise referred to for any other
purpose without our prior consent. We assume no obligation to update or
supplement this opinion letter to reflect any facts or circumstances that may
hereafter come to our attention or any changes in facts or law that may
hereafter occur.
Very truly yours,
KLEINBARD, BELL & BRECKER LLP
By:_________________________________
Ralph J. Mauro, Partner
5
<PAGE>
Exhibit A- I
SUBSIDIARIES
------------
Triton Management Company, Inc.
Triton PCS Holdings Company L.L.C.
Triton PCS Operating Company L.L.C.
Triton PCS License Company L.L.C.
Triton PCS Property Company L.L.C.
Triton PCS Equipment Company L.L.C.
6
<PAGE>
Exhibit A-2
MANAGEMENT STOCKHOLDERS
-----------------------
Type I Management Stockholders
Michael E. Kalogris
Steven R. Skinner
Michael E. Kalogris, as Trustee under Common Stock Trust
Agreement for Management Employees dated the date hereof
Type II Management Stockholders
Clyde Smith
David D. Clark
Patricia Gallagher
David Standig
Michael Mears
7
<PAGE>
Exhibit A-3
STOCKHOLDERS OF TRITON PCS HOLDINGS, INC.
----------------------------------------
STOCKHOLDER NUMBER OF SHARES OWNED
Michael E. Kalogris 78,494.80
Steven R. Skinner 58,871.10
Clyde Smith 3,139.79
--------
Total 140,505.69
8
<PAGE>
Exhibit B
CERTIFICATE
-----------
Each of the undersigned hereby certifies to Kleinbard, Bell &
Brecker LLP as of the date first above written that:
1. As to matters set forth herein, I either have personal
knowledge or have obtained information from officers and employees of the
Company and its subsidiaries in whom I have confidence and whose duties require
them to have personal knowledge thereof.
2. I have read and am familiar with the Transaction Documents
and the opinion letter to be executed by Kleinbard, Bell & Brecker LLP in
connection therewith. The undersigned is executing this certificate to induce
Kleinbard, Bell & Brecker LLP to render its opinion letter and understands that
Kleinbard, Bell & Brecker LLP will rely upon the foregoing. I know of no reason
why the opinion letter should not be issued.
TRITON PCS HOLDINGS, INC.
By:____________________________________________
David D. Clark, Senior Vice President
TRITON PCS INC.
By:____________________________________________
David D. Clark, Senior Vice President
TRITON MANAGEMENT COMPANY, INC.
By:____________________________________________
David D. Clark, Senior Vice President
9
<PAGE>
TRITON PCS HOLDINGS COMPANY L.L.C.
TRITON PCS OPERATING COMPANY L.L.C.
TRITON PCS PROPERTY COMPANY L.L.C.
TRITON PCS EQUIPMENT COMPANY L.L.C.
TRITON PCS LICENSE COMPANY L.L.C.
By: Triton Management Company, Inc.
its manager
By: ________________________________________
David D. Clark, Senior Vice President
10
<PAGE>
EXHIBIT M
AT&T Wireless PCS, Inc.
c/o AT&T Wireless Services, Inc.
5000 Carillon Point
Kirkland, WA 98033
Re: Securities Purchase Agreement dated as of October 8, 1997
(the "Securities Purchase Agreement") by and among Triton
PCS. Inc., AT&T Wireless PCS, Inc., Cash Equity Investors
(as such term is defined in the Securities Purchase
Agreement), and Management Stockholders (as such term is
defined in the Securities Purchase Agreement)
---------------------------------------------
Ladies and Gentlemen:
We have acted as special communications counsel on Federal
Communications Commission ("FCC") matters to Triton PCS Holdings, Inc., Triton
PCS, Inc., and their subsidiaries and affiliates (collectively referred to as
"Triton PCS") in connection with the negotiation, preparation and execution of
the Securities Purchase Agreement and the Stockholders Agreement (collectively
referred to as the "Agreements"). This opinion is rendered to you pursuant to
Section 7.3(d) of Securities Purchase Agreement. Capitalized terms defined in
the Agreements and used herein without definition shall have the meanings given
such terms in the Agreements.
As such counsel, we have examined such matters of fact and questions
of law as we have considered appropriate for purposes of rendering the opinions
expressed below, except where a statement is qualified as to knowledge or
awareness, in which case we have made only the limited inquiry specified below.
For purposes of this opinion, we have made such examination of the
Communications Act of 1934, as amended (the "Communications Act") and the rules,
regulations and written policies of the FCC ("FCC Rules") as we have deemed
necessary. We have also examined, among other things, the Agreements. In our
examination, we have assumed the genuiness of all signatures, the legal capacity
of all natural persons executing documents, the authenticity of all documents
submitted to us as originals, and the conformity to authentic original documents
of all documents submitted to us as copies.
With respect to factual matters relating to this opinion. we have
relied only upon (i) an examination of the public files of the FCC relating to
Triton PCS publicly available on January 29. 1998, (ii) pertinent statements and
representations of members of the staff of the FCC, (together with the items in
section (i) of this paragraph, the "FCC Records"), and (iii) such certificates
from officers of Triton PCS as we have deemed necessary. We have not made any
independent review or investigation of factual or other matters for purposes of
rendering this opinion. We have also assumed the accuracy, completeness and
authenticity of the foregoing public information. We have not examined the
records of any governmental agency other than the FCC Records.
<PAGE>
Page 2
We are opining herein as to the effect on the subject transaction of
the Communications Act and the FCC Rules and we express no opinion with respect
to the applicability thereto, or the effect thereon, of any other laws,
statutes, rules, or regulations. Our opinion does not address the effect, if
any, of pending legislation or of proceedings before the FCC or the courts to
which Triton PCS is not a party.
Whenever a statement herein is qualified by "to the best of our
knowledge" or a similar phrase, it is intended to indicate that those attorneys
in this firm who have rendered legal services in connection with the Agreements
do not have current actual knowledge of the inaccuracy of such statement. Except
as otherwise expressly indicated in this opinion, however, we have not
undertaken any independent investigation to determine the accuracy of any such
statement, and no inference that we have any knowledge of any matters pertaining
to such statement should be drawn from our position as special communications
counsel to Triton PCS.
Subject to the foregoing and the other qualifications set forth
herein, it is our opinion that, as of the date hereof:
1. There is not now pending at the FCC any action, petition or
proceeding, nor to the best of our knowledge is any such matter threatened,
against Triton PCS that could cause Triton PCS to be ineligible to hold the AT&T
PCS Contributed Licenses.
2. The execution and delivery of the Agreements by Triton PCS and
the performance by Triton PCS of its obligations thereunder will not violate the
Communications Act or the FCC Rules.
This opinion is rendered only to you and is solely for your benefit in
connection with the transactions covered hereby. This opinion may not be relied
upon by you for any other purpose, or furnished to, quoted to or relied upon by
any other person, firm or corporation for any purpose, without our prior written
consent.
Very truly yours,
<PAGE>
EXHIBIT N
INSTRUMENT OF ASSIGNMENT
INSTRUMENT OF ASSIGNMENT from AT&T WIRELESS PCS INC., a Delaware
corporation ("Assignor"), to TRITON PCS, INC., a Delaware corporation (the
"Company").
Assignor, Triton PCS Holdings, Inc., the owner of 100% of the stock of
the Company, and the other parties referred to therein have executed and
delivered a Securities Purchase Agreement, dated as of October 8, 1997 (the
"Purchase Agreement"). Capitalized terms used herein without definition shall
have the respective meanings assigned to them in the Purchase Agreement.
1. Pursuant to Section 2.1 of the Purchase Agreement, for valuable
consideration, receipt of which is hereby acknowledged, Assignor does hereby
assign, transfer and convey to the Company, its successors and assigns forever,
the AT&T PCS Contributed Licenses,
TO HAVE AND TO HOLD, all and singular, the assets and properties
hereby assigned, conveyed, transferred and delivered or intended so to
be unto the Company and its successors and assigns to and for its or
their use forever.
2. Nothing contained in this Instrument of Assignment shall in any
way supersede, modify, replace, amend, change, rescind, waive, exceed, expend,
enlarge or in any way affect the provisions, including the warranties,
covenants, agreements, conditions, representations, or, in general any of the
rights and remedies, and any of the obligations and indemnifications of Assignor
or Triton PCS Holdings, Inc., set forth in the Purchase Agreement, including
without limitation any limits on indemnification specified therein. This
Instrument of Assignment is intended only to effect the transfer of a certain
interest the transfer of which is contemplated in the Purchase Agreement and
shall be governed in accordance with the terms and conditions of the Purchase
Agreement.
3. This Instrument of Assignment is (i) executed pursuant to the
Purchase Agreement and may be executed in counterparts, each of which as so
executed shall be deemed to be an original, but all of which together shall
constitute one instrument and (ii) shall be governed by and in accordance with
the internal laws of the State of New York, without regard to the principles of
conflicts of law thereof.
<PAGE>
IN WITNESS THEREOF, Assignor has caused this instrument of Assignment
to be duly executed and delivered as of this ___ day of __________, 1998.
AT&T WIRELESS PCS INC.
By:__________________________
Name:_____________________
Title:____________________
Accepted:
TRITON PCS, INC.
By:________________________
Name:___________________
Title:__________________
2
<PAGE>
EXHIBIT 10.7
[EXECUTION COPY]
================================================================================
PREFERRED STOCK PURCHASE AGREEMENT
by and among
CASH EQUITY INVESTORS,
MANAGEMENT STOCKHOLDERS,
INDEPENDENT DIRECTORS,
and
TRITON PCS HOLDINGS, INC.
Dated as of June 29, 1998
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
ARTICLE IDEFINITIONS............................................................................................ -1-
ARTICLE II
PURCHASE AND SALE OF SECURITIES;CERTAIN RESTRICTIONS ON TRANSFER................................................ -6-
2.1 Myrtle Beach Contribution....................................................................... -6-
-------------------------
2.2 Issuance of Securities; Deliveries.............................................................. -7-
----------------------------------
2.3 Restrictive Legends............................................................................. -7-
-------------------
2.4 Use of Proceeds................................................................................. -8-
---------------
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF CASH EQUITY INVESTORS,MANAGEMENT
STOCKHOLDERS AND INDEPENDENT DIRECTORS.......................................................................... -8-
3.1 Organization, Power and Authority............................................................... -8-
---------------------------------
3.2 Consents; No Conflicts.......................................................................... -9-
----------------------
3.3 Litigation...................................................................................... -9-
----------
3.4 FCC Compliance.................................................................................. -10-
--------------
3.5 Brokers......................................................................................... -10-
-------
3.6 No Distribution................................................................................. -10-
---------------
3.7 Investor Acknowledgments........................................................................ -10-
------------------------
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OFTHE COMPANY.................................................................... -11-
4.1 Organization, Power and Authority............................................................... -11-
---------------------------------
4.2 Consents; No Conflicts.......................................................................... -12-
----------------------
4.3 Litigation...................................................................................... -12-
----------
4.4 FCC Compliance.................................................................................. -12-
--------------
4.5 Brokers......................................................................................... -12-
-------
4.6 Capitalization.................................................................................. -13-
--------------
4.7 Shares.......................................................................................... -13-
------
4.8 Subsidiaries.................................................................................... -13-
------------
4.9 Offering of Securities.......................................................................... -13-
----------------------
4.10 Small Business Matters.......................................................................... -14-
----------------------
ARTICLE V
COVENANTS....................................................................................................... -14-
5.1 Use of Proceeds................................................................................. -14-
---------------
5.2 SBIC Regulatory Provisions...................................................................... -14-
--------------------------
5.3 Regulatory Compliance Cooperation............................................................... -15-
---------------------------------
5.4 Related Agreement Amendments; Amendments to Restated Certificate................................ -15-
----------------------------------------------------------------
</TABLE>
-i-
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
5.5 Offering of Securities.......................................................................... -16-
----------------------
5.6 Waiver of Preemptive Rights..................................................................... -16-
---------------------------
ARTICLE VI
SURVIVAL AND INDEMNIFICATION.................................................................................... -16-
6.1 Survival........................................................................................ -16-
--------
6.2 Indemnification by the Cash Equity Investors.................................................... -16-
--------------------------------------------
6.3 Indemnification by the Company.................................................................. -16-
------------------------------
6.4 Indemnification by the Management Stockholders.................................................. -17-
----------------------------------------------
6.5 Indemnification by the Independent Directors.................................................... -17-
--------------------------------------------
6.6 Procedures...................................................................................... -17-
----------
6.7 Registration Rights............................................................................. -19-
-------------------
6.8 Limit on Indemnity.............................................................................. -19-
------------------
ARTICLE VII
MISCELLANEOUS PROVISIONS........................................................................................ -19-
7.1 Amendment and Modification...................................................................... -19-
--------------------------
7.2 Waiver of Compliance; Consents.................................................................. -19-
------------------------------
7.3 Notices......................................................................................... -19-
-------
7.4 Expenses........................................................................................ -20-
--------
7.5 Parties in Interest; Assignment................................................................. -20-
-------------------------------
7.6 Applicable Law.................................................................................. -21-
--------------
7.7 Counterparts.................................................................................... -21-
------------
7.8 Interpretation.................................................................................. -21-
--------------
7.9 Entire Agreement................................................................................ -21-
----------------
7.10 Publicity....................................................................................... -21-
---------
7.11 Specific Performance............................................................................ -22-
--------------------
7.12 Remedies Cumulative............................................................................. -22-
-------------------
</TABLE>
-ii-
<PAGE>
LIST OF SCHEDULES AND EXHIBITS
<TABLE>
<CAPTION>
Schedules
- -----------------
<S> <C>
Schedule I - Cash Equity Investors and Contributions
Schedule II - Management Stockholders
Schedule III - Independent Directors
Schedule 4.6(a) - Equity Ownership
Schedule 4.6(b) - Obligations to Issue Capital Stock
Schedule 4.8 - Company Subsidiaries
</TABLE>
-iii-
<PAGE>
PREFERRED STOCK PURCHASE AGREEMENT
PREFERRED STOCK PURCHASE AGREEMENT, dated as of June 29, 1998 by and
among the investors listed on Schedule I (individually, a "Cash Equity Investor"
---------- --------------------
and, collectively, the "Cash Equity Investors"), the individuals listed on
---------------------
Schedule II (individually, a "Management Stockholder" and collectively, the
- ----------- ----------------------
"Management Stockholders"), the individuals listed on Schedule III
- ------------------------ ------------
(individually, an "Independent Director" and collectively, the "Independent
-------------------- -----------
Directors"), and Triton PCS Holdings, Inc., a Delaware corporation (the
- ---------
"Company").
-------
W I T N E S S E T H
WHEREAS, the Cash Equity Investors, the Management Stockholders and
the Independent Directors are stockholders of the Company; and
WHEREAS, Triton PCS, Inc., a Delaware corporation and wholly-owned
subsidiary of the Company ("Triton PCS"), and Vanguard Cellular Systems of South
----------
Carolina, Inc. ("Vanguard"), are parties to a certain Asset Purchase Agreement
--------
dated March 10, 1998 (the "Myrtle Beach Acquisition Agreement") pursuant to
----------------------------------
which Triton PCS and/or one or more of its direct or indirect wholly-owned
subsidiaries intends to acquire substantially all of Vanguard's assets used in
the South Carolina RSA 5 market for approximately $160 million (the "Myrtle
------
Beach Acquisition"); and
- -----------------
WHEREAS, in connection with the consummation of the transactions
contemplated by the Myrtle Beach Acquisition Agreement (the "Myrtle Beach
------------
Closing"), on the date hereof (a) each of the Cash Equity Investors wishes to
- -------
purchase additional securities of the Company in consideration of contributions
of cash to the capital of the Company, and (b) the Company wishes to accept such
contributions and issue additional securities to each of the Cash Equity
Investors, the Management Stockholders and the Independent Directors, all on the
terms and subject to the conditions herein set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants, conditions and agreements hereinafter
set forth, the parties agree as follows:
ARTICLE I
DEFINITIONS
-----------
As used herein, the following terms have the following meanings
(unless indicated otherwise, all Section and Article references are to Sections
and Articles in this Agreement, and all Schedule and Exhibit references are to
Schedules and Exhibits to this Agreement):
-1-
<PAGE>
"Affiliate" means, with respect to any Person, any other Person that
---------
directly, or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with that Person. For purposes of this
definition, "control" (including the terms "controlling" and "controlled") means
------- ----------- ----------
the power to direct or cause the direction of the management and policies of a
Person, directly or indirectly, whether through the ownership of securities or
partnership or other ownership interests, by contract or otherwise.
"Agreement" means this Preferred Stock Purchase Agreement, as the same
---------
may be amended, modified or supplemented in accordance with the terms hereof.
"Business Day" means any day that is not a Saturday, Sunday or other
------------
day on which commercial banks in New York City are authorized or required by Law
to remain closed.
"Capital Stock" means any and all shares, interests, participations or
-------------
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants, rights or options to purchase or subscribe for any of
the foregoing, or any warrants, rights or options to purchase or subscribe for
any such warrants, rights or options.
"Cash Equity Investors" has the meaning set forth in the preamble.
---------------------
"Claim" has the meaning set forth in Section 6.6.
----- -----------
"Common Stock" has the meaning set forth in Section 2.2(a).
------------- --------------
"Company" has the meaning set forth in the preamble.
-------
"Consents" means all consents and approvals of Governmental
--------
Authorities or other third parties necessary to authorize, approve or permit the
parties hereto to consummate the Transactions.
"Credit Agreement" means the agreement among the Company, the lenders
----------------
and the agents referred to therein, dated as of the February 3, 1998, as amended
by the First Amendment, Consent and Waiver dated as of April 24, 1998, providing
a credit facility having aggregate commitments of $425 million, as the same may
be amended, modified or supplemented in accordance with the terms thereof.
"Credit Documents" means the Credit Agreement and all agreements,
----------------
instruments and documents executed and delivered pursuant thereto, as the same
may from time to time be amended, modified or supplemented in accordance with
the terms thereof.
"Employment Agreements" means collectively the Employment Agreements
---------------------
dated as of February 4, 1998 between Triton Management and each of Michael E.
Kalogris and Steven R.
-2-
<PAGE>
Skinner, and the Employment Agreement dated as of January 8, 1998 between Triton
Management and Clyde Smith, as the same may be amended, modified or supplemented
in accordance with the terms thereof.
"FCC" means the Federal Communications Commission or similar
---
regulatory authority established in replacement thereof.
"FCC Law" means the Communications Act of 1934, as amended, including
-------
as amended by the Telecommunications Act of 1996, and the rules, regulations and
policies promulgated thereunder.
"Financing" has the meaning set forth in the SBIC Regulations.
---------
"Governmental Authority" means a Federal, state or local court,
----------------------
legislature, governmental agency (including, without limitation, the United
States Department of Justice), commission or regulatory or administrative
authority or instrumentality.
"Independent Directors" has the meaning set forth in the preamble.
---------------------
"Indemnified Party" has the meaning set forth in Section 6.6.
----------------- -----------
"Indemnifying Party" has the meaning set forth in Section 6.6.
------------------ -----------
"Investors Stockholders' Agreement" means the Investors Stockholders'
---------------------------------
Agreement dated as of February 4, 1998 by and among certain stockholders of the
Company, as the same may be amended, modified or supplemented in accordance with
the terms thereof.
"Law" means applicable common law and any statute, ordinance, code or
---
other law, rule, permit, permit condition, regulation, order, decree, technical
or other standard, requirement or procedure enacted, adopted, promulgated,
applied or followed by any Governmental Authority.
"License" means a license, permit, certificate of authority, waiver,
-------
approval, certificate of public convenience and necessity, registration or other
authorization, consent or clearance issued or granted by a Governmental
Authority, including without limitation, Licenses to construct or operate a
facility, including any emissions, discharges or releases therefrom, or to
transact an activity or business, to construct a tower or to use an asset or
process.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
----
charge, security interest, right of first refusal or right of others therein, or
encumbrance of any nature whatsoever in respect of such asset.
"Losses" has the meaning set forth in Section 6.2.
------ -----------
-3-
<PAGE>
"Management Stockholders" has the meaning set forth in the preamble.
-----------------------
"Material Adverse Effect" means a material adverse effect on the
-----------------------
business, financial condition, assets, liabilities or results of operations or
prospects of the Person specified.
"Morgan Entity" means J.P. Morgan Investment Corporation and Sixty
-------------
Wall Street SBIC Fund, L.P.
"Myrtle Beach Acquisition" has the meaning set forth in the recitals.
------------------------
"Myrtle Beach Acquisition Agreement" has the meaning set forth in the
----------------------------------
recitals.
"Myrtle Beach Contribution" means, with respect to each Cash Equity
-------------------------
Investor, the amount set forth opposite its name on Schedule I under the heading
----------
"Myrtle Beach Contribution".
"Network Membership License Agreement" means the Network Membership
------------------------------------
License Agreement dated as of February 4, 1998 between AT&T Corp., a New York
corporation, and Triton Operating Company, as the same may be amended, modified
or supplemented in accordance with the terms thereof.
"New York Courts" has the meaning set forth in Section 7.6.
--------------- -----------
"Person" means an individual, corporation, partnership, limited
------
liability company, association, joint stock company, Governmental Authority,
business trust, unincorporated organization, or other legal entity.
"Preferred Stock" means the shares of Series C Preferred Stock to be
---------------
issued hereunder in accordance with the terms hereof.
"Regulatory Problem" means, with respect to any SBIC Holder providing
------------------
Financing under this Agreement, any set of facts or circumstances wherein it has
been asserted by any governmental regulatory agency (or any SBIC Holder
reasonably believes in good faith that there is a substantial risk of such
assertion) that such SBIC Holder and its Affiliates are not entitled to hold, or
exercise any significant right with respect to, the Securities.
"Related Agreements" means the Network Membership License Agreement,
------------------
the Employment Agreements, the Vesting Agreements, the Resale Agreement, the
Roaming Agreement, the Stockholders' Agreement, and the Investors Stockholders'
Agreement.
"Resale Agreement" means the form of Resale Agreement attached as
----------------
Exhibit C to the Securities Purchase Agreement, as the same may be amended,
- ---------
modified or supplemented in accordance with the terms thereof.
-4-
<PAGE>
"Restated Certificate" means the Amended and Restated Certificate of
--------------------
Incorporation of the Company, dated as of February 4, 1998, as the same may be
amended, modified or supplemented in accordance with the terms thereof.
"Roaming Agreement" means the Intercarrier Roamer Service
------------------
Agreement dated as of February 4, 1998 between Triton Operating Company and
AT&T Wireless Services, Inc., as the same may be amended, modified or
supplemented in accordance with the terms thereof.
"SBA" has the meaning set forth in Section 5.2(b).
--- --------------
"SBA Compliance Documents" has the meaning set forth in Section
------------------------ -------
2.2(d).
"SBIC" means a small business investment company licensed under the
----
SBIC Act.
"SBIC Act" means the Small Business Investment Company Act of 1958, as
--------
amended.
"SBIC Holder" means each Cash Equity Investor that is an SBIC.
-----------
"SBIC Regulations" means the SBIC Act and the regulations issued
----------------
thereunder as set forth in 13 CFR (S)(S)107 and 121, as amended.
"Section 6.2 Indemnified Party" has the meaning set forth in Section
----------------------------- -------
6.2.
- ---
"Section 6.3 Indemnified Party" has the meaning set forth in Section
----------------------------- -------
6.3.
- ---
"Section 6.4 Indemnified Party" has the meaning set forth in Section
----------------------------- -------
6.4.
- ---
"Section 6.5 Indemnified Party" has the meaning set forth in Section
----------------------------- -------
6.5.
- ---
"Securities" means the shares of Common Stock and Series C Preferred
----------
Stock to be issued hereunder in accordance with the terms hereof, together with
any shares of Common Stock issued upon conversion of the Series C Preferred
Stock.
"Securities Act" means the Securities Act of 1933, as amended, and the
--------------
rules, regulations and policies promulgated thereunder.
"Series A Preferred Stock" means the Company's Series A Convertible
------------------------
Preferred Stock, par value $0.01 per share.
"Series B Preferred Stock" means the Company's Series B Preferred
------------------------
Stock, par value $0.01 per share.
-5-
<PAGE>
"Series C Preferred Stock" has the meaning set forth in Section
------------------------- -------
2.2(a).
- ------
"Series D Preferred Stock" means the Company's Series D Convertible
------------------------
Preferred Stock, par value $0.01 per share.
"Stockholders' Agreement" means the Stockholders' Agreement dated as
-----------------------
of February 4, 1998 by and among the Company, AT&T Wireless PCS, Inc. and the
other stockholders of the Company, as the same may be amended, modified or
supplemented in accordance with the terms thereof.
"Subsidiary" shall mean, with respect to any Person, a corporation or
----------
other entity of which 50% or more of the voting power or the voting equity
securities or equity interest is owned, directly or indirectly, by such Person.
"Transactions" means the transactions contemplated by this Agreement
------------
in its entirety.
"Transfer Taxes" has the meaning set forth in Section 3.3.
-------------- -----------
"Triton Management" means Triton Management Company, Inc., a Delaware
-----------------
corporation and Subsidiary of the Company.
"Triton Operating Company" means Triton PCS Operating Company L.L.C.,
------------------------
a Delaware limited liability company and Subsidiary of the Company.
"Triton PCS" has the meaning set forth in the recitals.
----------
"Vanguard" has the meaning set forth in the recitals.
--------
"Vesting Agreements" means the letter agreements dated as of February
------------------
4, 1998 among Triton Management, the Company and each of Clyde Smith, David
Clark, Patricia Gallagher, David Standig, Michael Mears, and any other Person
(including the Independent Directors who have executed similar agreements dated
June 26, 1998) who has been required to sign a similar agreement as a condition
to the award of any of the Company's Capital Stock, as the same may be amended,
modified or supplemented in accordance with the terms thereof.
ARTICLE II
PURCHASE AND SALE
OF SECURITIES; CERTAIN RESTRICTIONS ON TRANSFER
-----------------------------------------------
2.1 Myrtle Beach Contribution. In reliance upon the
-------------------------
representations, warranties and agreements of the Company herein contained, each
Cash Equity Investor shall contribute to the capital of the Company by wire
transfer of immediately available funds an amount equal to its
-6-
<PAGE>
Myrtle Beach Contribution and the Company shall accept such contribution to the
capital of the Company.
2.2 Issuance of Securities; Deliveries. In reliance upon the
----------------------------------
representations, warranties and agreements herein contained of the Cash Equity
Investors, the Management Stockholders and the Independent Stockholders, the
Company shall on the date hereof issue, sell and deliver to the Cash Equity
Investors, the Management Stockholders and the Independent Directors, as
applicable, the following:
(a) to the Cash Equity Investors, the number of shares of the
Company's Series C Convertible Preferred Stock, par value $.01 per share (the
"Series C Preferred Stock"), the terms of which are set forth in the Restated
- -------------------------
Certificate, which, subject to the terms thereof, are convertible at any time
into shares of newly issued common stock, par value $.01 per share (the "Common
------
Stock") of the Company (as provided in the Restated Certificate), set forth
- -----
opposite its name on Schedule I under the heading "Number of Myrtle Beach
----------
Shares";
(b) to the Management Stockholders, the number of shares of Common
Stock set forth opposite his (her) name on Schedule II under the heading "Number
-----------
of Myrtle Beach Shares";
(c) to the Independent Directors, the number of shares of Common
Stock set forth opposite his name on Schedule III under the heading "Number of
------------
Myrtle Beach Shares"; and
(d) to each SBIC Holder, (i) the Size Status Declaration on Form 480,
the Assurance of Compliance for Nondiscrimination on Form 652 and the Portfolio
Financing Report on Form 1031 (Parts A and B) (collectively, the "SBA Compliance
--------------
Documents"), and (ii) a list, after giving effect to the Transactions of (a)
- ---------
the name of each of the Company's directors, (b) the name and title of each of
the Company's officers and (c) the name of each of the Company's stockholders
and the number and class of shares held by each stockholder;
(e) to the Cash Equity Investors, one or more opinions of the
Company's counsel respecting the valid issuance of the Series C Preferred Stock
and the enforceability of this Agreement against the Company.
2.3 Restrictive Legends. Each certificate representing
-------------------
Securities (including Securities originally issued hereunder or delivered upon
conversion of the Series C Preferred Stock, or delivered in substitution or
exchange for any of the foregoing) will bear a legend reading substantially as
follows until such Securities have been sold pursuant to an effective
registration statement under the Securities Act, Rule 144 under the Securities
Act, or an opinion of counsel reasonably satisfactory in form and substance to
the Company and otherwise in full compliance with any other applicable
restrictions on transfer, including those contained in this Agreement and the
Stockholders' Agreement:
-7-
<PAGE>
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"), OR UNDER ANY STATE SECURITIES OR 'BLUE SKY' LAWS.
SAID SECURITIES MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED,
HYPOTHECATED OR OTHERWISE DISPOSED OF, UNLESS AND UNTIL REGISTERED UNDER
THE ACT AND THE RULES AND REGULATIONS THEREUNDER AND ALL APPLICABLE STATE
SECURITIES OR 'BLUE SKY' LAWS OR EXEMPTED THEREFROM UNDER THE ACT AND ALL
APPLICABLE STATE SECURITIES OR 'BLUE SKY' LAWS."
2.4 Use of Proceeds. The Company shall use the net cash proceeds of
---------------
its sale of Securities hereunder for consummation of the Transactions
contemplated by the Myrtle Beach Acquisition.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF CASH EQUITY INVESTORS,
--------------------------------------------------------
MANAGEMENT STOCKHOLDERS AND INDEPENDENT DIRECTORS
-------------------------------------------------
Each of the Cash Equity Investors (as to itself), the Management
Stockholders (as to himself/herself, and solely with respect to the
representations contained in Sections 3.1(b), 3.1(e), 3.1(f), 3.6 and 3.7) and
--------------------------------------------
the Independent Directors (as to himself, and solely with respect to the
representations and warranties contained in Sections 3.1(b), 3.1(e), 3.1(f), 3.6
------------------------------------
and 3.7), represents and warrants to the Company and each of the other parties
- -------
as follows:
3.1 Organization, Power and Authority.
---------------------------------
(a) Each Cash Equity Investor is a corporation, general partnership
or limited partnership, duly organized, validly existing and in good standing
under the Laws of its jurisdiction of organization and has the requisite power
and authority to own, lease and operate its properties and to carry on its
business as now being conducted.
(b) It has the requisite power and authority to execute, deliver and
perform this Agreement, and each other instrument, document, certificate and
agreement required or contemplated to be executed, delivered and performed by it
hereunder and thereunder to which it is or will be a party.
(c) It is duly qualified to do business in each jurisdiction where
the character of its properties owned or held under lease or the nature of its
activities makes such qualification necessary other than any such jurisdiction
in which the failure to be so qualified would not have a Material
-8-
<PAGE>
Adverse Effect on it or materially adversely affect the Transactions or its
ability to perform its obligations under the Related Agreements.
(d) The execution and delivery of this Agreement by it and the
consummation of the Transactions by it have been duly and validly authorized by
its Board of Directors (or equivalent body) and no other proceedings on its part
which have not been taken (including, without limitation, approval of its
stockholders, partners or members) are necessary to authorize this Agreement or
to consummate the Transactions.
(e) This Agreement has been duly executed and delivered by it and
constitutes its valid and binding obligation, enforceable against it in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, moratorium or other similar Laws affecting or relating
to enforcement of creditors' rights generally and may be subject to general
principles of equity.
(f) After giving effect to the Transactions, it is not in breach of
any obligation under this Agreement or any of the Related Agreements.
3.2 Consents; No Conflicts. Neither the execution, delivery and
----------------------
performance by it of this Agreement nor the consummation of the Transactions
will (a) conflict with, or result in a breach or violation of, any provision of
its organizational documents; (b) constitute, with or without the giving of
notice or passage of time or both, a breach, violation or default, create a
Lien, or give rise to any right of termination, modification, cancellation,
prepayment or acceleration, under (i) any Law or License or (ii) any note, bond,
mortgage, indenture, lease, agreement or other instrument, in each case which is
applicable to or binding upon it or any of its assets; or (c) require any
Consent or the approval of its board of directors, general partner, stockholders
or similar constituent bodies, as the case may be (which approvals have been
obtained), except in each case, where such breach, violation, default, Lien,
right, or the failure to obtain or give such Consent would not have a Material
Adverse Effect on it or materially adversely affect the Transactions or its
ability to perform its obligations under the Related Agreements. To its
knowledge, there is no fact relating to it or its Affiliates that would be
reasonably expected to prevent it from consummating any of the Transactions or
performing its obligations under any of the Related Agreements.
3.3 Litigation. There is no action, proceeding or investigation
----------
pending or, to its knowledge, threatened against it or any of its properties or
assets that would be reasonably expected to have an adverse effect on its
ability to consummate the Transactions to which it is a party or to fulfill its
obligations under this Agreement or any of the Related Agreements to which it is
a party, or which seeks to prevent or challenge the Transactions.
-9-
<PAGE>
3.4 FCC Compliance. It complies with all eligibility rules issued by
--------------
the FCC to hold broadband PCS licenses, including without limitation, FCC rules
on foreign ownership and the CMRS spectrum cap. The fact that it owns an equity
interest in the Company will not cause the Company to be ineligible under FCC
rules to hold PCS Licenses in general or any other FCC licenses.
3.5 Brokers. It has not employed any broker, finder or investment
-------
banker or incurred any liability for any brokerage fees, commissions or finder's
fees in connection with the Transactions.
3.6 No Distribution. It has acquired the Securities purchased by it
---------------
hereunder for the purpose of investment and not with a view to or for sale in
connection with any distribution thereof (other than in compliance with the
Securities Act and all applicable state securities Laws).
3.7 Investor Acknowledgments.
------------------------
(a) It is an "accredited investor" as defined in Regulation D of the
Securities Act. Its representatives have been provided an opportunity to ask
questions of, and have received answers thereto from, the Company and its
representatives regarding the terms and conditions of its purchase of
Securities, and the Company and its proposed business generally, and have
obtained all additional information requested by it (including the Confidential
Offering Memorandum of Triton PCS dated April 29, 1998) to verify the accuracy
of all information furnished to it in connection with such purchase.
(b) It has such knowledge and experience in financial and business
affairs that it is capable of evaluating the merits and risks of purchasing the
Securities it is purchasing hereunder.
(c) It is not relying on and acknowledges that no representation is
being made by any other Cash Equity Investor, the Company or any of its
officers, employees, Affiliates, agents or representatives, or any Management
Stockholder or Independent Director, except for representations and warranties
expressly set forth in this Agreement and the Related Agreements, and, in
particular, it is not relying on, and acknowledges that no representation is
being made in respect of, (x) any projections, estimates or budgets delivered to
or made available to them of future revenues, expenses or expenditures, or
future results of operations and (y) any other information or documents
delivered or made available to it or its representatives, except for
representations and warranties expressly set forth in this Agreement and the
Related Agreements.
(d) In deciding to invest in the Company, it has relied exclusively
on the representations and warranties expressly set forth in this Agreement and
the Related Agreements and the investigations made by itself and its
representatives and its and such representatives' knowledge of the industry in
which the Company operates. Based solely on such representations and warranties
-10-
<PAGE>
and such investigations and knowledge, it has determined that the Securities it
is purchasing are a suitable investment for it.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
THE COMPANY
-----------
The Company represents and warrants to the Cash Equity Investors, the
Management Stockholders and the Independent Directors as follows:
4.1 Organization, Power and Authority.
---------------------------------
(a) Each of the Company and each of its Subsidiaries that is a
corporation is a corporation, duly organized, validly existing and in good
standing under the Laws of the jurisdiction of its incorporation and has the
requisite corporate power and authority to own, lease and operate its properties
and to carry on its business as now being conducted and as proposed to be
conducted. Each of the Company's Subsidiaries that is a limited liability
company is a limited liability company, duly formed, validly existing and in
good standing under the Laws of the jurisdiction of formation and has the
requisite limited liability company power and authority to own, lease and
operate its properties and to carry on its business as now being conducted and
as proposed to be conducted.
(b) It has the requisite power, authority and/or legal capacity to
execute, deliver and perform this Agreement and each other instrument, document,
certificate and agreement required or contemplated to be executed, delivered and
performed by it hereunder and thereunder to which it is or will be a party.
(c) Each of the Company and each of its Subsidiaries is duly
qualified to do business in each jurisdiction where the character of its
properties owned or held under lease or the nature of its activities makes such
qualification necessary other than any such jurisdiction in which the failure to
be so qualified would not have a Material Adverse Effect on the Company or such
Subsidiary or materially adversely affect the Transactions or its ability to
perform its obligations under the Related Agreements.
(d) The execution and delivery of this Agreement by the Company and
the consummation of the Transactions by the Company have been duly and validly
authorized by the Board of Directors of the Company and, no other corporate
proceedings on the part of the Company which have not been taken (including,
without limitation, approval of its stockholders) are necessary to authorize
this Agreement or to consummate the Transactions.
(e) This Agreement has been duly executed and delivered by the
Company and constitutes the valid and binding obligation of the Company,
enforceable against it in accordance
-11-
<PAGE>
with its terms, except as such enforceability may be limited by bankruptcy,
insolvency, moratorium or other similar Laws affecting or relating to
enforcement of creditors' rights generally and may be subject to general
principles of equity.
(f) After giving effect to the Transactions, the Company is not in
breach of any obligation under this Agreement, any Related Agreement or any of
the Credit Documents.
4.2 Consents; No Conflicts. Neither the execution, delivery and
----------------------
performance by the Company of this Agreement nor the consummation of the
Transactions will (a) conflict with, or result in a breach or violation of, any
provision of the Company's organizational documents; (b) constitute, with or
without the giving of notice or passage of time or both, a breach, violation or
default, create a Lien (other than Liens under the Credit Documents), or give
rise to any right of termination, modification, cancellation, prepayment or
acceleration, under (i) any Law or License, or (ii) any note, bond, mortgage,
indenture, lease, agreement or other instrument, in each case which is
applicable to or binding upon the Company or any of its assets; or (c) require
any Consent on the part of the Company or the approval of the Company's Board of
Directors (which approval has been obtained), except in each case where such
breach, violation, default, Lien, right, or the failure to obtain or give such
Consent would not have a Material Adverse Effect on it or materially adversely
affect the Transactions, its ability to perform its obligations under the
Related Agreements or the operation of the Company's business after the date
hereof. To its knowledge, there is no fact relating to it or its Affiliates
that would be reasonably expected to prevent it from consummating any of the
Transactions or performing any of its obligations under the Related Agreements.
4.3 Litigation. There is no action, proceeding or investigation
----------
pending or, to the knowledge of the Company, threatened against the Company or
any of its properties or assets that would have an adverse effect on its ability
to consummate the Transactions or to fulfill its obligations under this
Agreement or any of the Related Agreements, or to operate its business after the
date hereof, or which seeks to prevent or challenge the Transactions. There is
no judgment, decree, injunction, rule or order outstanding against the Company
which would limit in any material respect the ability of the Company to operate
its business in the manner currently contemplated.
4.4 FCC Compliance. Assuming the accuracy of the representations and
--------------
warranties contained in Section 3.4, it complies with all eligibility rules
-----------
issued by the FCC to hold broadband PCS licenses, including without limitation,
FCC rules on foreign ownership and the CMRS spectrum cap.
4.5 Brokers. The Company has not employed any broker, finder or
-------
investment banker or incurred any liability for any brokerage fees, commissions
or finder's fees in connection with the Transactions.
-12-
<PAGE>
4.6 Capitalization.
--------------
(a) As of the date hereof, the authorized capital stock of the
Company consists of 10,000,000 shares of Common Stock, 1,000,000 shares of
Series A Preferred Stock, 2,000,000 shares of Series B Preferred Stock,
2,000,000 shares of Series C Preferred Stock, and 500,000 shares of Series D
Preferred Stock. As of the date hereof, prior to giving effect to the
Transactions, there have been issued and are outstanding 196,237 shares of
Common Stock, 732,371 shares of Series A Preferred Stock, no shares of Series B
Preferred Stock, 1,480,000 shares of Series C Preferred Stock and 366,131 shares
of Series D Preferred Stock. The record and beneficial owners of such
outstanding shares of Common Stock and Preferred Stock are set forth on Schedule
--------
4.6(a).
- ------
(b) Except as set forth on Schedule 4.6(b), there are not any existing
---------------
options, warrants, calls, subscriptions, or other rights, or other agreements or
commitments, obligating the Company to issue, transfer or sell any shares of
capital stock of the Company, except the Series C Preferred Stock and Common
Stock hereunder.
4.7 Shares. The shares of Series C Preferred Stock being issued to
------
the Cash Equity Investors hereunder, when issued and paid for pursuant to the
terms of this Agreement, will be duly authorized, validly issued, fully paid and
nonassessable, and will be free of any Liens caused or created by the Company,
except as set forth in the Stockholders' Agreement and the Restated Certificate.
The shares of Common Stock issued upon conversion of the Series C Preferred
Stock, when issued pursuant to the terms of the Series C Preferred Stock, will
be validly issued, fully paid and nonassessable, and will be free of any Liens
caused or created by the Company, except as set forth in the Stockholders'
Agreement and the Restated Certificate.
4.8 Subsidiaries. The Company owns directly or indirectly all of the
------------
outstanding shares of Capital Stock of each of its Subsidiaries, free and clear
of any Liens, except Liens granted to the Lenders pursuant to the Credit
Documents. Set forth on Schedule 4.8 is a complete list of its direct and
------------
indirect Subsidiaries indicating the jurisdictions in which each such Subsidiary
is organized or qualified to conduct business.
4.9 Offering of Securities.
----------------------
(a) None of the Company or any Person acting on its behalf has
offered the Securities or any similar equity securities of the Company for sale
to, or solicited any offers to buy Securities or any similar equity securities
of the Company from, any Person, other than the Cash Equity Investors and a
limited number of other "accredited investors" (as defined in Rule 501(a) under
the Securities Act).
(b) Assuming the accuracy of the representations and warranties of
the Cash Equity Investors, the Management Stockholders and the Independent
Directors contained in Sections 3.6 and 3.7, the offering and sale of Securities
--------------------
under this Agreement to the Cash Equity Investors, the
-13-
<PAGE>
Management Stockholders and the Independent Directors complies with all
applicable requirements of Federal and state securities Laws.
4.1 Small Business Matters. Neither the Company nor any Subsidiary:
----------------------
(a) presently engages in, and none of them shall hereafter engage in, any
activities, or (b) shall use directly or indirectly the proceeds from the sale
of the Securities for any purpose, which, in either case, a SBIC is prohibited
from engaging in or providing funds for by the SBIC Act and the regulations
thereunder (including Title 13, Code of Federal Regulations, Section 107.720).
ARTICLE V
COVENANTS
---------
5.1 Use of Proceeds. The Company shall use the proceeds of the sale
----------------
of Securities only for the purpose described in Section 2.4.
-----------
5.2 SBIC Regulatory Provisions.
--------------------------
(a) The Company shall notify each SBIC Holder as soon as practicable
(and, in any event, not later than 15 days) prior to taking any action after
which the number of record holders of the Company's voting stock would be
increased from fewer than 50 to 50 or more, and the Company shall notify each
SBIC Holder of any other action or occurrence after which the number of record
holders of the Company's voting stock was increased (or would increase) from
fewer than 50 to 50 or more, as soon as practicable after the Company becomes
aware that such other action or occurrence has occurred or is proposed to occur.
(b) Within 75 days after the date hereof, the Company shall deliver
to each SBIC Holder a written statement certified by the Company's president or
chief financial officer describing in reasonable detail the use of the proceeds
of the sale of Securities hereunder by the Company and its Subsidiaries. In
addition to any other rights granted hereunder, the Company shall grant each
SBIC Holder and the United States Small Business Administration (the "SBA")
---
access to the Company's records for the purpose of verifying the use of such
proceeds to the extent required pursuant to SBIC Regulations.
(c) Promptly after the end of each fiscal year (but in any event
prior to February 28 of each year), the Company shall deliver to each SBIC
Holder a written assessment of the economic impact of each SBIC Holder's
investment in the Company, specifying the full-time equivalent jobs created or
retained in connection with the investment, the impact of the investment on the
revenues and profits of the business and on taxes paid by the business and its
employees.
-14-
<PAGE>
(d) During the one-year period commencing on the date hereof, the
Company shall not engage in any activity which constitutes an ineligible
business activity (within the meaning of the SBIC Regulations as in effect on
the date hereof).
5.3 Regulatory Compliance Cooperation. In the event that any SBIC
---------------------------------
Holder reasonably determines that it has a Regulatory Problem, to the extent
reasonably necessary, such SBIC Holder shall have the right to transfer its
Securities (and any shares of Common Stock issued upon conversion thereof) to
another Person without regard to any restrictions on transfer set forth in this
Agreement or in Section 4.1(c) of the Stockholders' Agreement and without
--------------
complying with the provisions of Section 4.3 of the Stockholders' Agreement, but
-----------
subject to the other provisions of the Stockholders' Agreement and all
applicable Laws, including without limitation federal and state securities Law
restrictions, and the Company shall take all such actions as are reasonably
requested by such SBIC Holder in order to (i) effectuate and facilitate such
transfer by such SBIC Holder of any Securities of the Company then held by such
SBIC Holder to such Person, (ii) permit such SBIC Holder (or any of its
Affiliates) to exchange all or any portion of voting Securities then held by it
on a share-for-share basis for shares of a class of non-voting Securities of the
Company, which non-voting Securities shall be identical in all respects to such
voting Securities, except that such non-voting Securities (or Common Stock, as
applicable) shall be non-voting and shall be convertible into voting Securities
(or Common Stock, as applicable) on such terms as are requested by such SBIC
Holder in light of regulatory considerations then prevailing, (iii) continue and
preserve the respective allocation of the voting interests with respect to the
Company arising out of the SBIC Holder's ownership of voting Securities and/or
provided for in the Stockholders' Agreement before the transfers and amendments
referred to in this Section (including entering into such additional agreements
as are reasonably requested by such SBIC Holder to permit any Person(s)
designated by such SBIC Holder) to exercise any voting power which is
relinquished by such SBIC Holder and (iv) amend this Agreement, the Restated
Certificate, and any other related documents, agreements or instruments to
effectuate and reflect the foregoing. The parties to this Agreement agree to
vote their Securities in favor of such amendments and actions.
5.4 Related Agreement Amendments; Amendments to Restated Certificate.
----------------------------------------------------------------
Certain of the parties hereto (and/or certain of their respective Affiliates)
are (or, with respect to the Resale Agreement, will be) parties to the Related
Agreements. It is the intention of the parties hereto that, upon consummation
of the Transactions, each Related Agreement shall be amended and/or restated as
necessary to give effect to, among other things, (a) the Securities issued to
the Purchasers, the Management Stockholders and the Independent Directors, it
being agreed that the rights and obligations of the parties under the Related
Agreements pertaining to the securities thereunder shall pertain also to the
Securities hereunder (including amendments to the Employment Agreements and the
Vesting Agreements to reflect the shares of Common Stock issued hereunder). It
is also the intention of the parties hereto that the Restated Certificate shall
be amended as necessary (e.g., to increase the number of authorized shares of
Capital Stock) to give effect to, among other things, the Securities issued to
the Cash Equity Investors, the Management Stockholders and the Independent
Directors on the date hereof.
-15-
<PAGE>
5.5 Offering of Securities. None of the Company or any Person acting
----------------------
on its behalf will, directly or indirectly, take any action which might subject
the offering, issuance or sale of the Securities to the registration and
prospectus delivery requirements of Section 5 of the Securities Act.
5.6 Waiver of Preemptive Rights. With respect to the Transactions
---------------------------
and the issuance of the shares of Series C Preferred Stock and Common Stock
hereunder, each of the Cash Equity Investors and the Management Stockholders
hereby waives (a) the notice requirements set forth in Section 7.2(b) of the
--------------
Stockholders' Agreement and (b) its preemptive rights that are afforded such
party in Section 7.2 of the Stockholders Agreement.
-----------
ARTICLE VI
SURVIVAL AND INDEMNIFICATION
----------------------------
6.1 Survival. The representations and warranties made in this
--------
Agreement shall survive until the second anniversary of the date hereof and
shall thereupon expire together with any right to indemnification in respect
thereof (except to the extent a written notice asserting a claim for breach of
any such representation or warranty and describing such claim in reasonable
detail shall have been given prior to such date to the party which made such
representation or warranty). The sole and exclusive remedy of the parties for
any breach or inaccuracy of any representation or warranty contained in this
Agreement, or any other claim (whether or not alleging a breach of this
Agreement) that arises out of the facts and circumstances constituting such
breach or inaccuracy, shall be the indemnity provided in this Article VI.
----------
6.2 Indemnification by the Cash Equity Investors. Each Cash Equity
--------------------------------------------
Investor, severally and not jointly, shall indemnify and hold harmless each
other Cash Equity Investor, the Company, each Management Stockholder, each
Independent Director and their respective Affiliates, and the shareholders,
members, managers, officers, employees, agents and/or the legal represen
tatives of any of them (each, a "Section 6.2 Indemnified Party"), against all
-----------------------------
liabilities and expenses (including amounts paid in satisfaction of judgments,
in compromise, as fines and penalties, and as counsel fees) (collectively,
"Losses") incurred by him or it in connection with the investigation, defense,
- -------
or disposition of any action, suit or other proceeding in which any Section 6.2
Indemnified Party may be involved or with which he or it may be threatened that
arises out of or results from (a) any representation or warranty of such Cash
Equity Investor contained in this Agreement being untrue in any material respect
as of the date on which it was made or (b) any material default by such Cash
Equity Investor or any of its Affiliates in the performance of their respective
obligations under this Agreement, except to the extent (but only to the extent)
any such Losses arise out of or result from the gross negligence or willful
misconduct of such Section 6.2 Indemnified Party or its Affiliates.
6.3 Indemnification by the Company. The Company shall indemnify and
------------------------------
hold harmless each Cash Equity Investor, each Management Stockholder, each
Independent Director and
-16-
<PAGE>
their respective Affiliates, and the shareholders, members, managers, officers,
employees, agents and/or the legal representatives of any of them (each, a
"Section 6.3 Indemnified Party"), against all Losses incurred by him or it in
-----------------------------
connection with the investigation, defense, or disposition of any action, suit
or other proceeding in which any Section 6.3 Indemnified Party may be involved
or with which he or it may be threatened that arises out of or results from (a)
any representation or warranty of the Company contained in this Agreement being
untrue in any material respect as of the date on which it was made or (b) any
material default by the Company or any of its Affiliates in the performance of
their respective obligations under this Agreement, except to the extent (but
only to the extent) any such Losses arise out of or result from the gross
negligence or willful misconduct of such Section 6.3 Indemnified Party or its
Affiliates.
6.4 Indemnification by the Management Stockholders. Each Management
----------------------------------------------
Stockholder, severally and not jointly, shall indemnify and hold harmless each
of the Cash Equity Investors, the Company, the Independent Directors, the other
Management Stockholders and their respective Affiliates, and the shareholders,
members, managers, officers, employees, agents and/or the legal representatives
of any of them (each, a "Section 6.4 Indemnified Party"), against all Losses
-----------------------------
incurred by him or it in connection with the investigation, defense, or
disposition of any action, suit or other proceeding in which any Section 6.4
Indemnified Party may be involved or with which he or it may be threatened that
arises out of or results from (a) any representation or warranty of such
Management Stockholder contained in this Agreement being untrue in any material
respect as of the date on which it was made or (b) any material default by such
Management Stockholder or any of its Affiliates in the performance of their
respective obligations under this Agreement, except to the extent (but only to
the extent) any such Losses arise out of or result from the gross negligence or
willful misconduct of such Section 6.4 Indemnified Party or its Affiliates.
6.5 Indemnification by the Independent Directors. Each Independent
--------------------------------------------
Director, severally and not jointly, shall indemnify and hold harmless each of
the Cash Equity Investors, the Company, any other Independent Director, the
Management Stockholders and their respective Affiliates, and the shareholders,
members, managers, officers, employees, agents and/or the legal representatives
of any of them (each, a "Section 6.5 Indemnified Party"), against all Losses
-----------------------------
incurred by him or it in connection with the investigation, defense, or
disposition of any action, suit or other proceeding in which any Section 6.5
Indemnified Party may be involved or with which he or it may be threatened that
arises out of or results from (a) any representation or warranty of such
Independent Director contained in this Agreement being untrue in any material
respect as of the date on which it was made or (b) any material default by such
Independent Director or any of its Affiliates in the performance of their
respective obligations under this Agreement, except to the extent (but only to
the extent) any such Losses arise out of or result from the gross negligence or
willful misconduct of such Section 6.5 Indemnified Party or its Affiliates.
6.6 Procedures.
----------
(a) The terms of this Section 6.6 shall apply to any claim (a
-----------
"Claim") for indemnification under the terms of Sections 6.2, 6.3, 6.4 or 6.5.
----- -----------------------------
The Section 6.2 Indemnified Party,
-17-
<PAGE>
Section 6.3 Indemnified Party, Section 6.4 Indemnified Party, or Section 6.5
Indemnified Party (each, an "Indemnified Party"), as the case may be, shall give
-----------------
prompt written notice of such Claim to the indemnifying party (the "Indemnifying
------------
Party") under the applicable Section, which party may assume the defense
- -----
thereof, provided that any delay or failure to so notify the Indemnifying Party
shall relieve the Indemnifying Party of its obligations hereunder only to the
extent, if at all, that it is materially prejudiced by reason of such delay or
failure. The Indemnified Party shall have the right to approve any counsel
selected by the Indemnifying Party and to approve the terms of any proposed
settlement, such approval not to be unreasonably delayed or withheld (unless
such settlement provides only, as to the Indemnified Party, the payment of money
damages actually paid by the Indemnifying Party and a complete release of the
Indemnified Party in respect of the claim in question). Notwithstanding any of
the foregoing to the contrary, the provisions of this Article VI shall not be
----------
construed so as to provide for the indemnification of any Indemnified Party for
any liability to the extent (but only to the extent) that such indemnification
would be in violation of applicable Law or that such liability may not be
waived, modified or limited under applicable Law, but shall be construed so as
to effectuate the provisions of this Article VI to the fullest extent permitted
----------
by Law.
(b) In the event that the Indemnifying Party undertakes the defense
of any Claim, the Indemnifying Party will keep the Indemnified Party advised as
to all material developments in connection with such Claim, including, but not
limited to, promptly furnishing the Indemnified Party with copies of all
material documents filed or served in connection therewith.
(c) In the event that the Indemnifying Party fails to assume the
defense of any Claim within ten Business Days after receiving written notice
thereof, the Indemnified Party shall have the right, subject to the Indemnifying
Party's right to assume the defense pursuant to the provisions of this Article
-------
VI, to undertake the defense, compromise or settlement of such Claim for the
- --
account of the Indemnifying Party. Unless and until the Indemnified Party
assumes the defense of any Claim, the Indemnifying Party shall advance to the
Indemnified Party any of its reasonable attorneys' fees and other costs and
expenses incurred in connection with the defense of any such action or
proceeding. Each Indemnified Party shall agree in writing prior to any such
advancement that, in the event he or it receives any such advance, such
Indemnified Party shall reimburse the Indemnifying Party for such fees, costs
and expenses to the extent that it shall be determined that he or it was not
entitled to indemnification under this Article VI.
----------
(d) In no event shall an Indemnifying Party be required to pay in
connection with any Claim for more than one firm of counsel (and local counsel)
for each of the following groups of Indemnified Parties: (i) the Cash Equity
Investors, their respective Affiliates and the shareholders, members, managers,
officers, employees, agents and/or the legal representatives of any of them; and
(ii) the Management Stockholders, the Independent Directors, the Company, its
Affiliates and the shareholders, members, managers, officers, employees, agents
and/or the legal representatives of any of them.
-18-
<PAGE>
6.7 Registration Rights. Notwithstanding anything to the contrary in
-------------------
this Article VI, the indemnification and contribution provisions set forth in
----------
Sections 5(e) and 5(f) of the Stockholders' Agreement shall govern any claim
- ----------------------
made with respect to the registration statements filed pursuant to Section 5 of
---------
the Stockholders' Agreement or sales made thereunder.
6.8 Limit on Indemnity. So long as the Company does not conduct any
------------------
business or engage in any activities other than those described in the first
sentence of the definition of "Business" (as such term is defined in the
Stockholders' Agreement), each party waives its right to indemnification under
this Article VI or any other right to assert any claim arising from any
----------
inaccuracy in the Company's representations and warranties set forth in Section
-------
4.10 or the violation by the Company of the covenant set forth in Section 5.2(d)
- ---- --------------
to the extent such Section relates to ineligible or prohibited activities of
SBICs.
ARTICLE VII
MISCELLANEOUS PROVISIONS
------------------------
7.1 Amendment and Modification. This Agreement may be amended,
--------------------------
modified or supplemented only by written agreement of each of the parties.
7.2 Waiver of Compliance; Consents. Any failure of any of the
------------------------------
parties to comply with any obligation, covenant, agreement or condition herein
may be waived by the party or parties entitled to the benefits thereof only by a
written instrument signed by the party granting such waiver, but such waiver or
failure to insist upon strict compliance with such obligation, covenant,
agreement or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure. Whenever this Agreement requires
or permits consent by or on behalf of any party hereto, such consent shall be
given in writing in a manner consistent with the requirement for a waiver of
compliance as set forth in this Section 7.2.
-----------
7.3 Notices. All notices or other communications hereunder shall be
-------
in writing and shall be given (and shall be deemed to have been duly given upon
receipt) by delivery in person, by facsimile transmission, or by overnight
courier or registered or certified mail (return receipt requested), postage
prepaid, with an acknowledgment of receipt signed by the addressee or an
authorized representative thereof, addressed as follows (or to such other
address for a party as shall be specified by like notice; provided that notice
of a change of address shall be effective only upon receipt thereof):
-19-
<PAGE>
If to a Cash Equity Investor, to its address set forth on
Schedule I.
----------
With a copy to:
Mayer, Brown & Platt
1675 Broadway
New York, New York 10019
Attention: Mark S. Wojciechowski
Facsimile: (212) 262-1910
If to the Company or any Management Stockholder or Independent
Director, to it or him/her :
c/o Triton Management Company, Inc.
101 Lindenwood Drive, Suite 125
Malvern, PA 19355
Attention: Michael E. Kalogris
Steven R. Skinner
Facsimile: (610) 993-2683
With a copy to:
Kleinbard Bell & Brecker LLP
1900 Market Street, Suite 700
Philadelphia, PA 19103
Attention: Howard J. Davis
Facsimile: (215) 568-0140
And with a copy to each other party sent to the addresses set forth in
this Section 7.3.
-----------
7.4 Expenses. The Company agrees to pay, and save the Cash Equity
--------
Investors harmless against, the reasonable fees and disbursements of counsel to
each of the Cash Equity Investors in connection with the preparation,
negotiation, execution and delivery of this Agreement, the instruments and
documents executed pursuant hereto or thereto or in connection herewith or
therewith, and the consummation of any such Transaction; provided, however, that
as a condition to the Company's foregoing obligation, counsel for the Cash
Equity Investors shall be directed to, and shall, deliver to the Company on a
monthly basis detailed invoices for legal services rendered during such month.
7.5 Parties in Interest; Assignment. This Agreement is binding upon
-------------------------------
and is solely for the benefit of the parties hereto and their respective
permitted successors, legal representatives and permitted assigns. None of the
Company or any Cash Equity Investor may assign its rights and obligations
hereunder without the prior written consent of each of the other parties, except
(a) either
-20-
<PAGE>
Morgan Entity may assign its rights and obligations hereunder to the other
without any prior consent and (b) CB Capital Investors, L.P. shall have the
right to assign to one or more of its Affiliates, any and all rights and
obligations of C.B. Capital Investors, L.P. under this Agreement (provided that
such assignee shall have assumed in writing all the obligations of C.B. Capital
Investors, L.P. hereunder and no such assignment shall relieve C.B. Capital
Investors, L.P. of its obligations hereunder).
7.6 Applicable Law. This Agreement shall be governed by and
--------------
construed in accordance with the Laws of the State of New York without giving
effect to the conflicts of Law principles thereof. The parties hereto hereby
irrevocably and unconditionally consent to submit to the non-exclusive
jurisdiction of the courts of the State Of New York and of the United States of
America located in the County of New York, New York (the "New York Courts") for
---------------
any litigation arising out of or relating to this Agreement and the
Transactions, waive any objection to the laying of venue of any such litigation
in the New York Courts and agrees not to plead or claim in any New York Court
that such litigation brought therein has been brought in an inconvenient forum.
7.7 Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
7.8 Interpretation. The article and section headings contained in
--------------
this Agreement are for convenience of reference only, are not part of the
agreement of the parties and shall not affect in any way the meaning or
interpretation of this Agreement. All pronouns and any variations thereof shall
be deemed to refer to the masculine, feminine or neuter, singular or plural, as
the identity of the antecedent Person or Person may require.
7.9 Entire Agreement. This Agreement, including the exhibits and
----------------
schedules hereto and the certificates and instruments delivered pursuant to the
terms of this Agreement, embodies the entire agreement and understanding of the
parties hereto in respect of the Transactions. There are no restrictions,
promises, representations, warranties, covenants or undertakings, other than
those expressly set forth or referred to herein or therein. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such Transactions.
7.10 Publicity. So long as this Agreement is in effect, the parties
---------
agree to consult with each other in issuing any press release or otherwise
making any public statement with respect to any Transaction, and no party shall
issue any press release or make any such public statement prior to such
consultation, except as may be required by Law. No press release or other
public statement by the parties hereto shall disclose any of the financial terms
of the Transactions without the prior consent of the other parties, except as
may be required by Law (including securities Laws) and except as counsel to the
Company reasonably determines in connection with the Company's contemplated
exchange offer for its $511,989,000 principal amount at maturity of 11% Senior
Subordinated Discount Notes due 2008.
-21-
<PAGE>
7.1 Specific Performance. The parties hereto agree that irreparable
--------------------
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof in any New York Courts.
7.1 Remedies Cumulative. All rights, powers and remedies provided
-------------------
under this Agreement or otherwise available in respect hereof at law or in
equity shall be cumulative and not alternative, and the exercise or beginning of
the exercise of any thereof by any party shall not preclude the simultaneous or
later exercise of any other such right, power or remedy by such party.
[signature pages follow]
* * *
-22-
<PAGE>
[SIGNATURE PAGES TO PREFERRED STOCK PURCHASE AGREEMENT]
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
Company:
TRITON PCS HOLDINGS, INC.
By: /s/ David D. Clark
---------------------------------
Name: David D. Clark
Title: Senior Vice President
Cash Equity Investors:
CB CAPITAL INVESTORS, L.P.
By: CB Capital Investors, Inc., its general
partner
By:
---------------------------------
Name:
Title:
J.P. MORGAN INVESTMENT CORPORATION
By:
---------------------------------
Name:
Title:
SIXTY WALL STREET SBIC FUND, L.P.
By: Sixty Wall Street SBIC Corporation its general
partner
By:
---------------------------------
Name:
Title:
[SIGNATURES CONTINUED ON NEXT PAGE]
<PAGE>
[SIGNATURE PAGES TO PREFERRED STOCK PURCHASE AGREEMENT]
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
Company:
TRITON PCS HOLDINGS, INC.
By:
---------------------------------
Name:
Title:
Cash Equity Investors:
CB CAPITAL INVESTORS, L.P.
By: CB Capital Investors, Inc., its general
partner
By: /s/ Arnold L. Chavkin
---------------------------------
Name: Arnold L. Chavkin
Title: General Partner
J.P. MORGAN INVESTMENT CORPORATION
By:
---------------------------------
Name:
Title:
SIXTY WALL STREET SBIC FUND, L.P.
By: Sixty Wall Street SBIC Corporation its general
partner
By:
---------------------------------
Name:
Title:
[SIGNATURES CONTINUED ON NEXT PAGE]
<PAGE>
[SIGNATURE PAGES TO PREFERRED STOCK PURCHASE AGREEMENT]
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
Company:
TRITON PCS HOLDINGS, INC.
By:
---------------------------------
Name:
Title:
Cash Equity Investors:
CB CAPITAL INVESTORS, L.P.
By: CB Capital Investors, Inc., its general
partner
By:
---------------------------------
Name:
Title:
J.P. MORGAN INVESTMENT CORPORATION
By: /s/ John Watkins
---------------------------------
Name: John Watkins
Title: Managing Director
SIXTY WALL STREET SBIC FUND, L.P.
By: Sixty Wall Street SBIC Corporation its general
partner
By: /s/ John Watkins
---------------------------------
Name: John Watkins
Title: Managing Director
[SIGNATURES CONTINUED ON NEXT PAGE]
<PAGE>
[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
PRIVATE EQUITY INVESTORS III, L.P.
By: Rohit M. Desai Associates III, L.L.C., its
general partner
By: /s/
---------------------------------
Name:
Title:
EQUITY-LINKED INVESTORS-II
By: Rohit M. Desai Associates-II, its general
partner
By: /s/
---------------------------------
Name:
Title:
TORONTO DOMINION CAPITAL (U.S.A.), INC.
By:
---------------------------------
Name:
Title:
FIRST UNION CAPITAL PARTNERS, INC.
By:
---------------------------------
Name:
Title:
DAG-TRITON PCS, INC.
By: Duff Ackerman Goodrich, LLC, its general
partner
By:
---------------------------------
Name:
Title:
[SIGNATURES CONTINUED ON NEXT PAGE]
<PAGE>
[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
PRIVATE EQUITY INVESTORS III, L.P.
By: Rohit M. Desai Associates III, L.L.C., its
general partner
By:
---------------------------------
Name:
Title:
EQUITY-LINKED INVESTORS-II
By: Rohit M. Desai Associates-II, its general
partner
By:
---------------------------------
Name:
Title:
TORONTO DOMINION CAPITAL (U.S.A.), INC.
By: /s/ Martha L. Garing
---------------------------------
Name: Martha L. Garing
Title: Secretary/Treasurer
FIRST UNION CAPITAL PARTNERS, INC.
By:
---------------------------------
Name:
Title:
DAG-TRITON PCS, INC.
By: Duff Ackerman Goodrich, LLC, its general
partner
By:
---------------------------------
Name:
Title:
[SIGNATURES CONTINUED ON NEXT PAGE]
<PAGE>
[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
PRIVATE EQUITY INVESTORS III, L.P.
By: Rohit M. Desai Associates III, L.L.C., its
general partner
By:
---------------------------------
Name:
Title:
EQUITY-LINKED INVESTORS-II
By: Rohit M. Desai Associates-II, its general
partner
By:
---------------------------------
Name:
Title:
TORONTO DOMINION CAPITAL (U.S.A.), INC.
By:
---------------------------------
Name:
Title:
FIRST UNION CAPITAL PARTNERS, INC.
By: /s/
---------------------------------
Name:
Title: Senior Vice President
DAG-TRITON PCS, INC.
By: Duff Ackerman Goodrich, LLC, its general
partner
By:
---------------------------------
Name:
Title:
[SIGNATURES CONTINUED ON NEXT PAGE]
<PAGE>
[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
PRIVATE EQUITY INVESTORS III, L.P.
By: Rohit M. Desai Associates III, L.L.C., its
general partner
By:
---------------------------------
Name:
Title:
EQUITY-LINKED INVESTORS-II
By: Rohit M. Desai Associates-II, its general
partner
By:
---------------------------------
Name:
Title:
TORONTO DOMINION CAPITAL (U.S.A.), INC.
By:
---------------------------------
Name:
Title:
FIRST UNION CAPITAL PARTNERS, INC.
By:
---------------------------------
Name:
Title:
DAG-TRITON PCS, INC.
By: Duff Ackerman Goodrich, LLC, its general
partner
By: /s/ John M. Duff, Jr.
---------------------------------
Name: John M. Duff, Jr.
Title: Managing Member
[SIGNATURES CONTINUED ON NEXT PAGE]
<PAGE>
[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
Management Stockholders:
/s/ Michael E. Kalogris
---------------------------------
Michael E. Kalogris
/s/ Steven R. Skinner
---------------------------------
Steven R. Skinner
/s/ David D. Clark
---------------------------------
David D. Clark
/s/ Clyde Smith
---------------------------------
Clyde Smith
/s/ Patricia Gallagher
---------------------------------
Patricia Gallagher
/s/ David Standig
---------------------------------
David Standig
---------------------------------
Michael Mears
Independent Directors:
---------------------------------
Scott Anderson
---------------------------------
John Beletic
<PAGE>
[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
Management Stockholders:
---------------------------------
Michael E. Kalogris
/s/ Steven R. Skinner
---------------------------------
Steven R. Skinner
/s/ David D. Clark
---------------------------------
David D. Clark
---------------------------------
Clyde Smith
---------------------------------
Patricia Gallagher
---------------------------------
David Standig
/s/ Michael Mears
---------------------------------
Michael Mears
Independent Directors:
---------------------------------
Scott Anderson
---------------------------------
John Beletic
<PAGE>
[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
Management Stockholders:
/s/ Michael E. Kalogris
---------------------------------
Michael E. Kalogris
/s/ Steven R. Skinner
---------------------------------
Steven R. Skinner
/s/ David D. Clark
---------------------------------
David D. Clark
/s/ Clyde Smith
---------------------------------
Clyde Smith
/s/ Patricia Gallagher
---------------------------------
Patricia Gallagher
/s/ David Standig
---------------------------------
David Standig
---------------------------------
Michael Mears
Independent Directors:
/s/ Scott Anderson
---------------------------------
Scott Anderson
---------------------------------
John Beletic
<PAGE>
[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
Management Stockholders:
/s/ Michael E. Kalogris
---------------------------------
Michael E. Kalogris
/s/ Steven R. Skinner
---------------------------------
Steven R. Skinner
/s/ David D. Clark
---------------------------------
David D. Clark
---------------------------------
Clyde Smith
/s/ Patricia Gallagher
---------------------------------
Patricia Gallagher
/s/ David Standig
---------------------------------
David Standig
---------------------------------
Michael Mears
Independent Directors:
---------------------------------
Scott Anderson
/s/ John Beletic
---------------------------------
John Beletic
<PAGE>
[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
Management Stockholders:
---------------------------------
Michael E. Kalogris
---------------------------------
Steven R. Skinner
---------------------------------
David D. Clark
---------------------------------
Clyde Smith
---------------------------------
Patricia Gallagher
---------------------------------
David Standig
---------------------------------
Michael Mears
/s/ Michael E. Kalogris
---------------------------------
Michael E. Kalogris, as Trustee under Amended
and Restated Common Stock Trust Agreement for
Management Employees and Independent Directors
dated June 26, 1998
Independent Directors:
---------------------------------
Scott Anderson
---------------------------------
John Beletic
<PAGE>
SCHEDULE I
CASH EQUITY INVESTORS
<TABLE>
<CAPTION>
AGGREGATE MYRTLE NUMBER OF MYRTLE
BEACH CONTRIBUTION BEACH SHARES
------------------ -------------------
<S> <C> <C>
CB Capital Investors, L.P.* $10,242,968 102,429.68
JP Morgan Capital Investment Corporation 9,534,900 95,349.00
Sixty Wall Street SBIC Fund, L.P. 465,100 4,651.00
Private Equity Investors III, L.P. 4,919,011 49,190.11
Equity-Linked Investors-II 4,919,011 49,190.11
Toronto Dominion Capital (U.S.A.) Inc. 2,459,518 24,595.18
First Union Capital Partners, Inc. 1,229,746 12,297.46
DAG-Triton PCS, Inc. 1,229,746 12,297.46
----------- ----------
Total $35,000,000 350,000.00
</TABLE>
* Inclusive of $8,000,000 previously contributed by CP Capital Investors,
L.P. in exchange for the issuance of 80,000 shares of Class C Preferred
Stock in connection with the execution of the Myrtle Beach Acquisition
Agreement. Therefore, on the date hereof, CB Capital Investors, L.P. will
contribute $2,242,968 to the capital of the Company and the Company will
issue to CB Capital Investors, L.P. 22,429.68 shares of the Company's
Series C Preferred Stock.
<PAGE>
SCHEDULE I (CONT.)
ADDRESS FOR NOTICES
-------------------
CB Capital Investors, L.P.
380 Madison Avenue, 12th Floor
New York, NY 10017
Attn: Arnie Chavkin
Tel: (212) 622-3100
Fax: (212) 622-3101
J.P. Morgan Investment Corporation
101 California Street, 38th Floor
San Francisco, CA 94111
Attn: John Watkins
Tel: (415) 954-3200
Fax: (415) 954-4737
Sixty Wall Street SBIC Fund, L.P.
101 California Street, 38th Floor
San Francisco, CA 94111
Attn: John Watkins
Tel: (415) 954-3200
Fax: (415) 954-4737
Private Equity Investors III, L.P.
540 Madison Avenue, 36th Floor
New York, NY 10022
Attn: Damon Ball
Tel: (212) 838-9191
Fax: (212) 838-9807
Equity-Linked Investors-II
540 Madison Avenue, 36th Floor
New York, NY 10022
Attn: Damon Ball
Tel: (212) 838-9191
Fax: (212) 838-9807
Toronto Dominion Capital (U.S.A.), Inc.
31 West 52nd Street
New York, NY 10019
Attn: Brian Rich
Tel: (212) 468-0740
Fax: (212) 974-0429
Toronto Dominion Capital (U.S.A.), Inc.
909 Fannin
Suite 1700
Houston, TX 77010
Attn: Martha Gariepy
Tel: (713) 653-8225
Fax: (713) 652-2647
First Union Capital Partners, Inc.
One First Union Center
301 South College Street / 5th Floor
Charlotte, NC 28288-0732
Attn: Watts Hamrick
Tel: (704) 374-4791
Fax: (704) 374-6711
DAG-Triton PCS, Inc.
Two Embarcadero Center
Suite 2930
San Francisco, CA 94111
Attn: John Duff
Tel: (415) 788-2755
Fax: (415) 788-7311
<PAGE>
SCHEDULE II
MANAGEMENT STOCKHOLDERS
<TABLE>
<CAPTION>
NUMBER OF MYRTLE
BEACH SHARES
----------------
<S> <C>
Michael E. Kalogris 15,555.47
Steven R. Skinner 11,666.60
Clyde Smith 622.22
David D. Clark 1,166.66
Patricia Gallagher 583.33
David Standig 583.33
Michael Mears 388.89
Michael E. Kalogris, as
Trustee under Amended and
Restated Common Stock
Trust Agreement for
Management Employees and
Independent Directors
dated June 26, 1998 8,041.96
---------
Total 38,608.46
</TABLE>
<PAGE>
SCHEDULE III
INDEPENDENT DIRECTORS
<TABLE>
<CAPTION>
NUMBER OF MYRTLE
BEACH SHARES
----------------
<S> <C>
Scott Anderson 140.11
John Beletic 140.11
------
Total 280.22
</TABLE>
<PAGE>
SCHEDULE 4.6(A)
EQUITY OWNERSHIP
----------------
<TABLE>
<CAPTION>
Shares
Stockholders Owned
- ----------------------------------------------
Series A Preferred Stock:
- ------------------------
<S> <C>
AT&T Wireless PCS, Inc. 732,371
Series C Preferred Stock:
- ------------------------
CB Capital Investors, L.P. 484,714*
J.P. Morgan Investment
Corporation 383,679
Sixty Wall Street SBIC
Fund, L.P. 21,036
Private Equity Investors III, L.P. 194,357
Equity-Linked Investors-II 194,357
Toronto Dominion Capital
(USA) Inc. 97,179
First Union Capital Partners, Inc. 48,589
Duff Ackerman Goodrich &
Associates, L.P. 48,589
Michael E. Kalogris 5,000
Steven R. Skinner 2,500
</TABLE>
* Includes 80,000 shares issued March 10, 1998 in connection with execution
of Myrtle Beach Acquisition Agreement.
<PAGE>
SCHEDULE 4.6(A) (CONT.)
<TABLE>
<CAPTION>
Series D Preferred Stock:
- ------------------------
<S> <C>
AT&T Wireless PCS, Inc. 366,131
Common Stock:
- ------------
Michael E. Kalogris 78,494.80
Steven R. Skinner 58,871.10
David D. Clark 5,887.11
Clyde Smith 3,139.79
Patricia Gallagher 2,943.56
David Standig 2,943.56
Michael Mears 1,962.37
Scott Anderson 707.00
John Beletic 707.00
Michael E. Kalogris, as Trustee
under Amended and Restated
Common Stock Trust
Agreement for Management
Employees and Independent
Directors dated June 26, 1998 40,580.71
</TABLE>
<PAGE>
SCHEDULE 4.6(B)
OBLIGATIONS TO ISSUE CAPITAL STOCK
----------------------------------
1. The Company intends to offer to its employees and the employees of its
subsidiaries the opportunity to acquire shares of the Company's Series C
Preferred Stock in an aggregate amount not to exceed $2 million. Each of the
stockholders of the Company agrees that (a) it shall not have any preemptive
rights (whether contained in Section 7.2 of the Stockholders' Agreement or
otherwise) with respect to such offering and (b) the Company shall be entitled
to reduce such stockholder's scheduled contributions hereunder on a pro-rata
basis with respect to the aggregate amount of securities purchased by such
employees.
2. Pursuant to an Independent Director Stock Award Plan adopted by the
Board of Directors of the Company, the Company may issue shares of the Company's
Common Stock (not exceeding 2,500 shares in the aggregate) to Directors of the
Company who are nominated pursuant to Section 3.1(a)(ii) of the Company's
Stockholders' Agreement.
3. Pursuant to the terms of the Restated Certificate, the Series A
Preferred Stock, the Series C Preferred Stock and the Series D Preferred Stock,
the Company may be required under certain circumstances contained therein to
issue shares of Preferred Stock or Common Stock, as the case may be, upon
conversion thereof.
4. The Company has been negotiating, but has not signed definitive
documentation with respect to, the terms of (a) the acquisition from AT&T
Wireless PCS, Inc. ("AT&T PCS") of substantially all of its assets relating to
the PCS system in the Norfolk, Virginia BTA (the "Norfolk Acquisition"); and
(b) the contribution by AT&T PCS to the capital of the Company of 20 MHz of the
30 MHz of certain PCS licenses owned by AT&T PCS (the "License Contribution").
In the event that the Norfolk Acquisition is consummated, the Company expects to
issue additional shares of Series D Preferred Stock to AT&T PCS. In the event
that the License Contribution is consummated, the Company expects to issue
additional shares of (i) Series A and Series D Preferred Stock to AT&T PCS, (ii)
Series C Preferred Stock to those investors who elect to make equity
contributions to the Company at such time (it being understood and agreed that
as of the date hereof no Cash Equity Investor is obligated to make any such
equity contributions to the Company), and (iii) Common Stock to the Management
Stockholders and the Independent Directors.
<PAGE>
SCHEDULE 5.8
COMPANY SUBSIDIARIES
--------------------
<TABLE>
<CAPTION>
State of Foreign
Subsidiary Organization Qualification
----------------------------------- ------------ -----------------
<S> <C> <C> <C>
1. Triton PCS, Inc. DE None
2. Triton Management Company, Inc. DE PA, VA*, SC*, NC*
3. Triton PCS Holdings Company L.L.C. DE None
4. Triton PCS Property Company L.L.C. DE VA, SC*, NC*
5. Triton PCS License Company L.L.C. DE None
6. Triton PCS Equipment Company L.L.C. DE VA, SC*, NC*
7. Triton PCS Operating Company L.L.C. DE VA, SC*, NC*
</TABLE>
* Authorization pending
<PAGE>
EXHIBIT 10.13
SITE ACQUISITION, ZONING AND
A&E SUPERVISION AGREEMENT
THE SITE ACQUISITION, ZONING AND CONSTRUCTION SUPERVISION AGREEMENT
(the "Agreement") is dated this ___ day of __________, 1997 by and between
Triton PCS, Inc., or its nominee (the "Company"), located at Suite 125, 101
Lindenwood Drive, Malvern, PA 19355, and Gearon & Co., Inc. (the "Contractor"),
located at 1760 The Exchange NW, Suite 200, Atlanta, GA 30339. The Company
desires to engage Contractor to perform the "Services," as defined below, and
Contractor desires to provide the Services. Therefore, the parties agree as
follows:
1. SERVICES. The Company hereby engages Contractor as an independent contractor
to provide the following services (hereafter the "Services") with respect to
Company's establishment of a Personal Communications Services network for
Company's South Carolina and Georgia trading areas ("Trading Areas"); Contractor
shall identify up to three candidate sites per search ring. Company shall select
one primary, and one secondary candidate site per search ring for which
Contractor shall secure a leasehold or other ownership interest in the primary
and the secondary if so requested by Company. In addition, Contractor shall
manage the services provided by surveyors and other third party contractors as
may be required to carry out this component of services. At its sole discretion,
Company may reduce the required three candidate sites per search ring to one or
two sites, as well as require two leasehold interests to be secured. The
Services are further set forth in Attachment A. Company's payment obligations
for the Services are set forth in Attachment B.
2. FACILITIES. Company shall provide, at its cost and expense, space in
Company's Charleston, S.C. office facilities as more fully described on
Attachment C for Contractor's personnel performing the Services throughout the
term of this Agreement. The office facilities shall include the use of copiers,
fax, machines, printers, office supplies and local phone service, but not
computers or peripherals. Company will provide, as reasonably needed, clerical
and other administrative support for the project office, but not for
Contractor's site acquisition or zoning specific tasks. Contractor shall be
responsible for excluded expenses as set forth in Attachment B.
3. RELATIONSHIP BETWEEN THE PARTIES. Contractor will be acting as an
independent contractor to the Company, and nothing in this Agreement will be
deemed to create a relationship of employer-employee, principal-agent, partner
or joint venture between Contractor and the Company. Neither party has any
authority to bind the other to any contract or agreement without the other's
written permission. Contractor shall operate an independent business consistent
with both companies' businesses and agrees to be responsible for all of
Contractor's federal and state local taxes, withholding, social security,
insurance, and other benefits.
4. COMPANY DELIVERABLES. Company shall deliver to Contractor not less than 50
"Search Rings" for PCS sites in accordance with Exhibit A-3(3) no later than 30
days after the start of this Agreement, the remaining 300 "Search Rings" in
accordance with Exhibit A-3(3) will be delivered no later than 120 days after
the start of this Agreement.
<PAGE>
5. CHANGES TO CONTRACT SCOPE. Company may make changes at any time to the
general scope of the Services contained herein only by means of a written Change
Order. Any Change Order that exceeds the scope of Services outlined in
Attachment A and which requires additional services on the part of the
Contractor shall result in an adjustment of the price to be paid to Contractor.
Contractor shall, upon receipt of a written Change Order request from Company,
provide Company with an estimate of additional charges required to complete the
Change Order. Prior to commencement of additional work, the Change Order shall
be approved by a Company representative. Any changes for additional work
commenced by Contractor without a written Change Order may be denied by the
Company at its sole discretion.
6. CONTRACTOR DELIVERABLES; REPORTING; APPROVAL BY COMPANY. Within 21 days
after execution of this Agreement, Company and Contractor shall agree upon and
prepare a detailed schedule for the completion of Services on a site-by-site
basis, which schedule shall become Attachment C to this Agreement. The schedule
shall contain, at a minimum, milestone dates for the completion by Contractor of
Site Acquisition, Site Zoning, and Site Construction Services (each as defined
in Exhibit A). This Agreement shall automatically terminate if the parties are
unable, after good faith negotiations, to agree to a schedule within the
allotted 21 days. Notwithstanding this, Contractor agrees to proceed working
under this Agreement, including deploying necessary personnel, immediately after
execution of this Agreement as set forth in Attachment D. Following approval of
this schedule by the Company, the Contractor shall thereafter for the term of
this Agreement provide the Company with not less than a written weekly report
outlining the progress made to attain the schedule previously submitted. Any
change in schedule which results in a time extension of one week or greater on
an individual site basis shall be clearly noted and the reasons therefore shall
be explained in writing. Company may, at its sole discretion, agree to a time
extension from the detained schedule originally provided. Contractor shall
attend all project meetings reasonably requested by Company.
7. SITE LEASES. Attached hereto as Attachment E is the form of lease acceptable
to Company which may be used by Contractor for site acquisitions without the
need for prior approval by Company. Contractor shall provide Company with a red-
lined lease version showing any changes made to the original in Attachment E.
Although Contractor is authorized to negotiate on behalf of Company for lease to
a site, Contractor shall have no authority to bind Company to any contractual
obligation, including any lease or option. Contractor shall inform all
perspective lessors that Contractor has no authority to bind Company and that
all proposed leases and options are subject to review, approval and execution by
an officer of Company.
8. TERM. The Agreement shall have an initial term of fifteen (15) months
commencing on the date hereof, unless otherwise terminated in accordance with
Section 20 below. This Agreement shall be renewed automatically for additional
one year terms unless one party notifies the other party of its intent to cancel
the Agreement at the end of the then current term upon 60 days' prior written
notice.
9. CONTRACTOR'S REPRESENTATION, WARRANTIES, AND COVENANTS.
A. Contractor's execution of this Agreement and Contractor's performance of
2
<PAGE>
Contractor's obligations hereunder does not and will not violate any agreement
between Contractor and any third party, or any obligation of Contractor to any
third party, including without limitation any non-compete agreement or
obligation.
B. Contractor warrants that Contractor has complied with all applicable
federal, state and local registration and licensing requirements to enable
Contractor to act as an independent contractor under the terms of this
Agreement.
C. Contractor has the skill necessary to perform the services required
pursuant to this Agreement, and all Services provided by Contractor shall be
performed in a professional manner and shall be of a high grade, nature, and
quality, commensurate with that which is customary in the industry.
D. Each of the employees and subcontractors utilized by Contractor for the
Services hereunder shall be of the highest professional skill and quality. At
any time, with prior notice Company has the right to require the removal of any
employee of subcontractor utilized or supervised by Contractor at Company's sole
discretion.
E. Contractor shall pay all applicable local, state and federal
withholding and insurance amounts when due and shall comply with all applicable
minimum wage requirements with respect to its employees.
F. Contractor will during the term of this Agreement maintain insurance
policies sufficient to protect Contractor's business against all applicable
risks. Without limiting the scope of the foregoing, Contractor shall maintain
Commercial General Liability coverage in an amount of not less than $1,000,000
per occurrence for bodily injury or death, personal injury and property damage
liability; and for all motor vehicles used by employees during the course of
this Agreement, liability and property damage insurance in the amount of
$1,000,000. Contractor agrees to name the Company as additional insured under
the above coverages. Contractor will secure and maintain all required insurance
for its employees during the term of this Agreement. All subcontractors or
other agents hired by Contractor under the terms of this Agreement must adhere
to the conditions contained in this paragraph, which shall be paid by
subcontractor and Contractor shall provide Company with a copy of said
insurance. Contractor shall provide Company with evidence of such insurance
prior to commencement of work under this contract, and as otherwise reasonable
requested by Company.
G. Contractor shall, while on Company property or performing any of the
Services hereunder, comply with all applicable local, state and federal laws and
regulations including without limitation laws and regulations under the
Occupational Safety and Health Act ("OSHA").
10. BOOKKEEPING. Contractor shall maintain a separate set of books or records
that reflect all items of income and expenses, which may become the obligations
of Company, related to Services provided under this Agreement. Company shall be
provided upon reasonable written request copies of such books and records at no
additional cost.
3
<PAGE>
11. CONFIDENTIALITY. Contractor acknowledges that Contractor may be given
access to certain confidential or secret information and material relating to or
owned by the Company, including but not limited to the Company's proposed
acquisitions, proposed FCC filings (including cellular and/or PCS filings),
financial information, customer lists, files and other information regarding
individual customers, company's business or Company's organization and
operations, solely in order that Contractor may best perform Contractor's duties
hereunder. Such information and material shall be the sole and exclusive
property of the Company, and Contractor agrees that during the term of this
Agreement and at all times thereafter Contractor will not disclose such
confidential or secret information or material to any governmental agency
(except as required by law), person, entity, firm or corporation without the
explicit prior written consent of the Company. Contractor agrees to return to
Company promptly upon termination of this Agreement all correspondence, letters,
documents or other tangible things or copies thereof (whether stored in hard
copy, in electromagnetic media, or in any other form) which mention or contain
said confidential or secret information or material.
All information and materials or product provided, generated or
produced by Contractor under this Agreement shall be and remain the sole and
exclusive property of Company and shall be held by Contractor as a trustee for
the benefit of the Company.
12. NON-COMPETITION. Until the expiration or early termination of this
Agreement, the Contractor agrees that it will provide written notice to the
Company if it intends to perform services which are the same or comparable to
the Services, for any entity which offers paging services, Enhanced Specialized
Mobile Radio Services ("ESMR"), cellular services or Personal Communication
Services ("PCS") ("Competitor"), in any area which is within the Trading Area.
In addition, the Contractor will provide five (5)days written notice of any
situation where the Contractor has been engaged to perform such services for a
Competitor with respect to a site which is located within one mile of the target
of a Search Ring. Such notices shall reasonably apprise the Company of the
nature and scope of such services. The Contractor agrees that, if it provides
any of such services to a Competitor, it will not use any of the same field
personnel to provide services to both the Company and the Competitor and that it
will not, directly or indirectly, permit any information regarding the Company,
the PCS System or the Services to be communicated to any of its field personnel
who are providing services to a Competitor. Until the expiration or early
termination of this Agreement, the Contractor agrees that it will not accept
assignments from, or conduct such services for, any Competitor, which would
conflict with or impair the unbiased performance of its duties hereunder.
13. MODIFICATIONS. This Agreement may be modified only in writing executed by
both parties.
14. ASSIGNMENT. Contractor acknowledges that the services to be rendered by
Contractor are unique and personal. Accordingly, Contractor may not assign any
of Contractor's rights, including the right to receive payments, or delegate any
of Contractor's duties or obligations under this Agreement without the prior
written consent of the Company.
4
<PAGE>
The Company may assign its right hereunder to (1) any corporation
resulting from any merger, consolidation or other reorganization to which the
Company is a party, (2) any corporation, partnership, association, or other
person to which the Company may transfer all or substantially all of the assets
or business of the Company existing at such time, or (3) any majority-owned
subsidiary of the Company. The Company may otherwise assign its rights to any
other entity with the written consent of Contractor, such consent not to be
unreasonably withheld or delayed. This Agreement shall inure to the benefit of
and shall be binding upon the successors and assigns of the parties.
15. NOTICES. All notices or other written communications required under this
Agreement shall be given personally or by registered mail to the parties at the
following addresses:
To Company: Triton Communications L.L.C.
Suite 125
101 Lindenwood Drive
Malvern, PA 19355
Attention: President
Fax: (610) 993-2683
and
Triton Communications L.L.C.
6 Skyeman Drive
Charleston, SC 29414
Attention: Michael Mears
To Contractor: Gearon & Co. Inc.
1760 The Exchange, N.W.
Suite 200
Atlanta, GA 30339
Fax: 770-952-4999
16. DISPUTE RESOLUTION; GOVERNING LAW. This Agreement shall be governed by and
construed according to the laws of the Commonwealth of Pennsylvania. The parties
hereby submit to the jurisdiction of any state court sitting in Pennsylvania, or
any federal district court for the district in which said county is located,
without regard to the conflict of laws or choice of law principles.
17. REMEDIES. The parties agree that damages may be inadequate to compensate
for the unique losses to be suffered in the event of a breach hereof, and that
the damaged party will be entitled, in addition to any other remedy it may have
under this Agreement or at law, to seek and obtain injunctive relief and other
equitable relief, including specific performance of the terms of this Agreement,
without the necessity of posting bond.
18. INDEMNITY. Each party agrees to indemnify, defend and hold the other
harmless from
5
<PAGE>
and against any and all claims, damages, losses and expenses, including but not
limited to reasonable attorneys' fees and disbursements, arising out of or
resulting from any claim, action or other proceeding (including without
limitation any proceeding by any of the indemnitor's employees, agents or
contractors) that is based upon the indemnitor's breach of this Agreement or any
negligent act or omission or willful misconduct of the indemnitor.
19. ATTORNEYS' FEES. If any legal action or PROCEEDING is brought to enforce
this Agreement, the substantially prevailing party shall be entitled to recover
reasonable attorneys' fees and other costs incurred in that action or proceeding
(including, without limitation, expert witness fees), in addition to any other
relief to which the prevailing party may be entitled.
20. TERMINATION. In addition to Company's right to terminate this Agreement in
accordance with Section 8, this Agreement may be terminated:
A. By Company or Contractor, immediately upon written notice of
termination, in the event of a material breach of this Agreement by the other
party (including, without limitation, the failure to meet any scheduling
deadline and providing services reasonably satisfactory to Company).
B. By Company or Contractor, immediately upon written notice of
termination to the other party, in the event the other party shall: (i) become
insolvent; (ii) make an assignment for the benefit of creditors; (iii) file a
voluntary bankruptcy petition; (iv) acquiesce to any involuntary bankruptcy
petition; (v) be adjudicated bankrupt; or (vi) cease to do business;
C. Upon termination of this Agreement, the parties hereto shall, within
thirty (30) days, return all of the other party's information in written,
graphic or tangible form relating to this Agreement, including but not limited
to all Confidential Information and any promotional literature which is in their
respective possession. Notwithstanding the foregoing, the Company shall be
entitled to retain any and all work product prepared or assembled by Contractor
prior to such termination.
D. After receipt of such written notice of termination but prior to the
effective date of such termination, Contractor shall continue to perform
services required hereunder unless notified by Company to discontinue service.
Contractor will receive per site fees for any Milestone Service which has been
completed prior to the date of discontinuance and time and materials for
Milestone Services in process since the last completed Milestone in accordance
with the rates set forth on Attachment B. Notwithstanding the foregoing,
Contractor will not receive more than 50% of the applicable Milestone Rate for
any Milestone Service not completed as of the date of discontinuance.
E. The rights and obligations set forth in Sections 10, 11, 16, 17 and 18
shall survive any termination of this Agreement.
21. SEVERABILITY. In the event any one or more of the provisions contained in
this Agreement shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such provision shall be deemed severed from this
Agreement, but the remaining provisions of this Agreement
6
<PAGE>
shall be enforceable to the maximum extent possible, and in substitution for any
provision held to be invalid, illegal or unenforceable, there shall be
substituted a provision of similar import reflecting the original intent of the
parties to the fullest extent permissible under law.
22. SELF-DEALING. Contractor will not, nor will any of its affiliates, receive
any compensation from any third party, other than as set forth in Attachment B
as a result of, arising from or relating to the Services. If any such
compensation would have otherwise been payable to Contractor, Contractor will
transfer the benefit of such compensation to the Company.
23. EFFECTIVE DATE. Notwithstanding anything herein to the contrary, Company
shall have the right to terminate this Agreement upon written notice to
Contractor if Company has not acquired the PCS licenses from AT&T for the
Trading Areas.
Triton PCS, Inc.
By:
-------------------------------
Steven R. Skinner, President
Gearon & Co., Inc.
By:
-------------------------------
J. Michael Gearon, Jr.
President
7
<PAGE>
ATTACHMENT A
------------
SCOPE OF WORK
SERVICES: To enable Company to develop, deploy an deliver its PCS network,
Contractor has been engaged to perform the various services as more specifically
described in the Attachments to this Attachment A ("Services"). To enable
Company to develop, deploy and deliver its PCS network, Contractor has been
engaged to perform the various services as more specifically described in the
Attachments to this Attachment A ("Services").
<TABLE>
<CAPTION>
Work Item Attachment
- ---------------------------------------------- ----------------
<S> <C>
Prezoning A-1
Pre-Design A-2
Site Selection A-3
Phase One/NEPA Environmental A-4
Screening
Site Acquisition A-5
Site Survey A-6
Zoning A-7
Building Permit A-8
Project Reporting A-9
Geotechnical Report A-11
FAA Survey A-12
Construction Management A-12
Project Management A-13
</TABLE>
DEFINITIONS: For purposes of this Agreement, the following words will have the
following meanings:
"Deliverables" means any items or work product arising from the performance of
Contractor's Services under this Agreement and delivered to Company, including
letters of intent, leases, purchase agreements, zoning authorizations, building
permits, soil, environmental, title and site reports and studies, drawings,
status reports and similar data, as are to be provided by Contractor under this
Agreement.
"PCS" Equipment means Company's towers, antennas and related equipment necessary
to deploy and deliver PCS from Sites in the MTA/BTA covered by this Agreement.
"RF" means Wireless Facilities, Inc.
"Site Acquisition Milestone" means completing to satisfaction of Company all
Phase One/NEPA Environmental Screening and Site Acquisition Services described
in Attachments A-4 through A-5.
8
<PAGE>
"Site Selection Milestone" means completing to the satisfaction of the Company
the pre-zoning, pre-design and site selection services described in Attachments
A-1 through A-3.
"Site-Zoning Milestone" means completing to satisfaction of Company all Site
Survey and Zoning services described in Attachments A-6 and A-7.
"Site Construction Milestone" means completing to satisfaction of Company all
Building Permit, Project Reporting, Geotechnical Reports, Construction
Management and Project Management services described in Attachments A-8 and A-
13.
9
<PAGE>
ATTACHMENT A-1
--------------
PRE-ZONING
----------
1. Contractor will work with Company to develop zoning classifications to be
utilized in this phase of the project.
2. Contractor will identify, within the BTA coverage area as defined by
Company, all zoning jurisdictions within the BTA. Contractor will obtain
zoning maps and regulations for each jurisdiction, identifying all
restrictions, including, but not limited, to height restrictions, setback
requirements, fence height restrictions, tower fall zones, and other
restrictions. Contractor will obtain the names and telephone numbers of
zoning and building permit contact persons.
10
<PAGE>
ATTACHMENT A-2
--------------
PRE-DESIGN
1. Contractor will identify and catalog all potential sites available to
Company from site providers that previously leased spaced to a Contractor
client or expressed an interest in leasing space to Company ("Friendly
Sites").
11
<PAGE>
ATTACHMENT A-3
--------------
SITE SELECTION
1. RF will issue a search ring based on its preliminary design (such design
will consider Friendly Sites).
2. RF will deliver search rings to Company, which will then issue search rings
to Contractor.
3. Contractor must always give preference to sites available under Company's
existing master lease agreements entered into by Company ("Master Leases").
If Contractor cannot utilize sites under Master Leases, written
documentation must be provided to Company giving justification as to why
sites under Master Leases cannot be used.
4. Contractor will identify up to three (3) potential candidates for each
search ring within 14 days after receipt of the search ring from Company.
Contractor shall have an additional 5 days to identify potential candidates
for additional search rings if Company has delivered more than 20 search
rings to Contractor within a calendar week. If three (3) such candidates are
not available, Contractor will furnish to Company a written explanation of
Contractor's reason(s) why unavailable.
5. Company will approve or reject candidates or re-design a search ring, at
Company's option.
6. Contractor will utilize necessary resources to comply with Company's
established scheduled time lines in accordance with Section 6 of the
Agreement.
7. Contractor will provide search ring reports containing the following minimum
information:
BTA
Site name
Acquisition Agent
GPS coordinates
Site locale
Site address or exact location if address unavailable
4 photos taken from site (photos should be taken for a 360 orientation
for a rooftop site)
4 photos taken of the site
Name of site owner and manager and address (if applicable)
Lessor name and address
Proposed monthly lease rate/purchase price/term
Physical data (overall structure height, height(s) available to mount
antennas, space available for Company's electronic equipment, distance
for coax from
12
<PAGE>
antennas to equipment, tower manufacturer and type, primary use of
structure, etc.) Additional specifics will be required as needed by
Company.
Presence of transmitters, receivers or antennas visible in the area
including operating frequencies, photographs
Indicate if space available is/has:
clean
phone circuits
ventilation
loading dock
pest infestation
air conditioning
emergency power
moisture/water
24 hr/7 day access
elevator to equipment room
adjacent or nearby man-made or natural obstructions
transmitter shelter area - prepare drawings
describe exact dimensions and locations
electrical service available
map with street level detailed showing site location
additional information to assist with site evaluation
13
<PAGE>
ATTACHMENT A-4
--------------
PHASE ONE/NEPA ENVIRONMENTAL SCREENING
Within 30 days after Company has approved a primary site candidate for a search
ring:
1. Contractor agrees that within its scope of work shall be included a
comprehensive investigation and completion of NEPA checklist for all actual
or potential federal, state, local or other jurisdictional environmental
requirements, including, but not limited to, the SARA Title II and Federal
Communications Commission regulations regarding Environmental Assessments
(e.g., FCC Rules on Environmental Impact, 47 C.F.R. 1.11307) referred to as
"Environmental Screening." Company shall oversee and cause to complete,
execute and submit through a subcontractor a fully executed original NEPA
Checklist for each site. The NEPA Checklist shall be in the form acceptable
to Company and shall include, without limitation, whether a proposed site:
. is located in an officially designated wilderness area;
. is located in a designated wilderness preserve;
. may affect threatened or endangered species or their habitats;
. may affect sites listed on the National Register of Historic Places;
. may affect Indian religious sites;
. are located in a flood plain;
. may involve a significant change in surface features;
. whether an antenna tower to be equipped with highly intensity white light
would be located in a residential neighborhood.
Contractor agrees that it shall engage an environmental consultant to
perform a Phase One environmental assessment ("Phase One") in accordance
with Company standards. The results of such assessment shall be delivered to
Company in writing.
2. At Company's option, Contractor will oversee and cause to be performed
activities required to complete the Environmental Screening requirements on
radio frequency emissions to determine whether the proposed facilities are
located where an operator or transmitter would cause human exposure to
levels of radio frequency radiation in excess of the limits specified in
Subsections 1.1310 and 2.1093, 47 C.F.R. (Applications to the FCC for
construction permits, licenses to transmit or renewals thereof, equipment
authorizations or modifications in existing facilities must contain a
statement confirming compliance with the radio frequency limits unless the
facility, operation or transmitter is categorically excluded as discussed in
Subsection 1.1307. Technical information showing the basis for this
statement must be submitted to the FCC upon request.) This particular
Environmental Screening requirement shall be sufficient to uncover the
impact or potential impact of any such jurisdictional requirements,
including, but not limited to, regulatory filings, hearings, approvals,
and/or fees, site sampling, testing, or relocation of the site requirements.
14
<PAGE>
3. Contractor agrees that the results of any and all Environmental Screening
and Phase One performed by sub-contractor or third party ("Third Party")
shall be timely reported to Company. Contractor acknowledges that the timely
reporting of such information may influence the site acquisition decision,
and Contractor shall pro-actively work in good faith with Company to arrive
at the optimal site acquisition decision in light of such information.
Contractor agrees to seek indemnification for Company from the Third Party
for any costs, including reasonable attorney fees associated with any
environmental remediation, fine or other penalty imposed on Company as the
direct or indirect result of Third Party's failure to detect such impact or
requirement as described in this Attachment A-4. Should Contractor not
obtain this indemnification for Company in the Contractor/Third party
agreement, Contractor agrees to indemnify Company for any costs, including
reasonable attorney fees associated with any environmental remediation, fine
or other penalty imposed on Company as the direct or indirect result of
Third party's failure to detect such impact or requirement as described in
this Attachment A-4.
15
<PAGE>
ATTACHMENT A-5
--------------
SITE ACQUISITION
Contractor shall coordinate closely all site acquisition work with any
Third Party.
2. If the site is to be acquired by lease, Contractor will be responsible for
securing proper execution by the site owner/landlord of the appropriate form
of lease with respect to each proposed site. Contractor must use best
efforts to use the Company's standard forms of Master Lease Agreement, PCS
Site Agreement or other lease forms to acquire rights to proposed sites and
will use lease agreements provided by an owner/landlord only as a last
resort. Contractor will also use best efforts to use sites available under
negotiated Master Lease Agreements. Contractor will follow all negotiating
guidelines provided by Company and will not submit any proposed agreement
for Company's consideration that is clearly outside of the proposed
guidelines.
3. Due diligence with respect to title of all sites to be acquired by Company
(by lease, purchase or otherwise) shall be performed at the option of the
Company as follows:
a. acquire an ownership and encumbrance report ("O&E Report") from a
nationally known title insurance company satisfactory to Company which
sets forth the same information as required for an ALTA title
insurance policy described below relating to the proposed site (to the
extent ascertainable by the title company);
b. acquire an ALTA title insurance policy on ground leases, insuring that
Company is the owner of the leasehold estate created by the lease
covering the site in question, such policy is to be issued by a
nationally recognized title insurance company acceptable to Company
and to be in such amount and to contain such exceptions to title as
are satisfactory to Company in Company's sole discretion and in this
regard the title insurance requirements to be followed by Contractor
with respect to the insuring of the leasehold shall be substantially
the same as the title insurance requirements set forth in this Scope
of Work for purchase of sites below;
c. perform or coordinate with the Third Party to ensure that all
applicable due diligence tests and studies have been performed prior
to Company executing the lease to determine to Company's reasonable
satisfaction that the proposed site is suitable for Company's intended
use of it, including, but not limited to:
. with respect to ground lease and vacant land sites only, soil
suitability and compaction testing in accordance with Attachments
A-10 and A-11;
. with respect to sites where Company's electronic equipment will be
located on or in existing improvements constructed prior to 1980,
obtain an asbestos survey; and
16
<PAGE>
. with respect to ground lease sites, switch sites, and vacant land
sites, a Phase I environmental assessment.
d. In addition, the following tasks shall be performed and confirmed in
writing by Contractor or Contractor shall coordinate with a Third
Party to perform and confirm in writing:
. legal access to the site;
. the site will have adequate utility service available to it
consistent with specifications provided by Company to Contractor;
. necessary building permits or other required governmental approvals
relating to the construction and installation of Company's
equipment or other improvements at the site;
. no easements, conditions, restrictions, liens or other matters
exist of record which negatively impact the Company's ability to
use the site for its intended purposes, and that there are no
delinquent taxes or assessments;
. properly zoned for Company's intended use or whether a zoning
change or variance will be necessary;
. receipt in a recordable form of a Memorandum of Lease and any
Subordination and Non-Disturbance Agreements for signature by
applicable parties, substantially in forms provided to the
Contractor by Company;
. that Contractor has obtained detailed construction drawings and
plans and specifications for all improvements to be constructed or
located upon the site;
. obtain resolutions or other appropriate authorizations or consents
pertaining to the due execution and delivery of the lease in
question by the lessor/owner of the site.
4. If the site is to be acquired by purchase, Contractor shall additionally
. Complete all due diligence items to Company's reasonable
satisfaction which are conditions to Company's purchase of a site
as set forth in a purchase agreement (which is to be substantially
in the form provided by Company to Contractor), including, without
limitation, all requirements and conditions pertaining to title
insurance, survey matters, soil testing, environmental compliance,
governmental authorizations and approvals relating to the
development of the site for Company's intended use of its, the
availability of adequate utility service and legal access to the
site, and any other matters permitted by the terms and
17
<PAGE>
provisions of a purchase agreement to enable Company to reasonably
determine whether the site is suitable for Company's intended use
of it;
. collect from seller of the site for delivery to Company all
documents, surveys, drawings and other information pertaining to
the site which the seller is required to deliver to Company
pursuant to terms of a purchase agreement;
. provide preliminary closing statement figures to Company with
respect to the purchase of the site not less than ten (10) days
prior to the projected closing date; and
. assure that all requirements of the title company with respect to
the issuance of its policy of owner's title insurance are satisfied
prior to the closing date, to the extent feasible, but if Company
completes the purchase of a site with outstanding title
requirements unsatisfied, and Contractor has so advised Company in
writing thereof, then Contractor has no liability or responsibility
to Company with respect to any such unsatisfied requirement.
18
<PAGE>
ATTACHMENT A-6
--------------
SITE SURVEY
1. Contractor will obtain and deliver to Company an ALTA/ACSM minimum standards
survey with such additional items as may be required by Company; certified
by a licensed surveyor, and site plan/architectural drawings required by
local zoning authorities. (Contractor may subcontract this work locally.)
Survey drawings shall include, without limitation:
a. site name and number;
b. legal description of parcel, access road easement and utility
easement;
c. relationship of site parcel to adjacent property boundaries by
distance and direction;
d. site parcel and adjacent parcels by map and parcel number, by deed
book and page, and by ownership;
e. name, telephone number and address of surveyor and office contact;
f. the location of all matters described in recorded instruments
affecting the site if capable of being shown on a survey;
g. results of flood plain determination;
2. Contractor will secure and deliver to Company any required survey plats,
mylars, exemption plats or other survey documents required along with any
required signatures.
19
<PAGE>
ATTACHMENT A-7
--------------
ZONING
1. Contractor will prepare and submit all zoning applications and appeals with
required drawings, and other related materials and obtain any required
zoning approval.
2. Contractor will attend all required hearings and represent Company at
Company's request.
3. Contractor will determine needed compliance with any subdivision regulations
for purchased sites.
4. Contractor will involve legal counsel only in zoning situations in which
Company agrees legal representation is warranted.
5. Contractor will staff at Contractor's expense an M.I.S. graphics specialist
and provide the necessary associated equipment to prepare photo simulations.
Photo simulation will be a critical tool in obtaining landlord and zoning
approval.
20
<PAGE>
ATTACHMENT A-8
--------------
BUILDING PERMIT
Contractor shall apply for, coordinate/track and obtain building permit.
21
<PAGE>
ATTACHMENT A-9
--------------
PROJECT REPORTING
1. Contractor will provide Company with weekly reports showing project status.
This status report will be put into a format acceptable to Company. Report
information will be transmitted to Company via electronic means. Each status
report must include all the following items. Next to each task must be
included the date it was completed or the expected date of completion.
a. BTA name
b. Cell name
c. Grid ID
d. Site ID
e. Acquisition received search ring
f. Search area report delivered to RF
g. Site approved by RF, Contractor & Company
h. Draft lease/option delivered to Company
i. Legal review of lease/option complete
j. Lease execution
k. Lease memo recorded
l. Loading study complete
m. Survey and site plan complete
n. Soil borings complete
o. Flood way investigation complete
p. Lien and title insurance complete
q. Phase I NEPA checklist complete
r. Zoning approved
s. Building permit obtained
t. Property closed
u. Site released to construction
v. FAA approval
w. Construction started
x. Construction completed
y. Summary report of number of Sites at each above stage by completion
2. Additional items to report may be added to the above list as reasonably
determined necessary by the Company.
22
<PAGE>
ATTACHMENT A-10
---------------
GEOTECHNICAL REPORT
Contractor through a Third Party will obtain geotechnical report for
applicable land sites. Geotechnical report shall be completed in accordance
with Company standards and laws of any applicable jurisdiction.
23
<PAGE>
ATTACHMENT A-11
---------------
FAA SURVEY
FAA Survey to be coordinated and tracked by RF or as otherwise
specified by Company.
24
<PAGE>
ATTACHMENT A-12
---------------
CONSTRUCTION MANAGEMENT
1. PRE-CONSTRUCTION PLANNING
In support of the pre-construction planning requirements, Contractor
will complete the following activities:
. Conduct construction feasibility assessments with all applicable
contractors to assess construction costs, identify potential problems,
and develop the most efficient design for each of Company's sites.
Coordinate the production and review of all construction drawings to
ensure compliance with Company's specifications and requirements.
. Coordinate and manage new service requests, field surveys and the
installation of power and telephone service to ensure that new utility
service is supplied on time and in compliance with Company's
specifications. Act as a liaison with local building jurisdictions to
ensure that construction permits are expedited and that questions are
answered or additional information is provided as required.
. Qualify and select Construction subcontractors. Develop and deliver
request for quotation packages and systematically evaluate the
responses. Each subcontractor is required to participate in a thorough
qualification process during which Contractor will ensure that each is
fully insured and has obtained all required local, state and federal
licenses and certifications. Review safety programs and records,
references and the financial viability of any subcontractor. Coordinate
subcontractor selection activities with Company.
. At Company's request and additional expense (i) procure materials and
supplies from wireless industry suppliers and manufacturer and (ii)
implement a customized inventory management system, designed to
effectively control material orders and their distribution.
. Develop a Master Construction Plan that includes a detailed schedule for
each of Company's sites. Contractor shall continuously monitor and
update to ensure compliance with project milestones.
2. CONSTRUCTION EXECUTION
In support of construction execution, Contractor will:
. Conduct pre-construction meetings with subcontractors, property managers
and utility service providers to ensure that construction objectives,
property owner
25
<PAGE>
concerns and site specific requirements are understood and agreed upon
by all parties involved in the buildout of Company's network.
. Provide on-site supervision of all construction activities to minimize
disruption to property owners, to ensure adherence to construction
specifications and standards, and complete construction in compliance
with Company construction schedule.
3. QUALITY ASSURANCE
As part of its quality assurance services, Contractor will:
. Conduct a thorough quality assurance inspection upon completion of each
site, ensuring that each of Company's punch list items are resolved
within 48 hours.
. Coordinate and attend site inspections with all local building
department representatives.
. Prepare detailed as-built drawings that accurately reflect the
installation at each site.
. Close out each site by compiling and providing Company with a
comprehensive site completion package. This package will create an
historical record of everything related to the construction of the site
and includes, without limitation, site identification data, construction
permit documentation, material reconciliation construction test results,
site photographs and as-built drawings.
26
<PAGE>
ATTACHMENT A-13
---------------
PROJECT MANAGEMENT
Contractor will provide the following services:
. Develop and implement a thorough deployment plan which tracks all
activities associated with site acquisition and construction management
for each Site. The deployment plan will clearly articulate schedule
dependencies and critical path elements, identify the allocation of
resources, and update regularly to reflect the actual deployment.
. Implement a quality assurance program which ensures that all activities
are performed to the highest quality standards.
. Utilize a comprehensive costs accounting system which will include, at a
minimum procedures for conducting financial tracking and management, and
comprehensive financial reporting.
. Implement comprehensive reporting mechanisms so that detailed site
progress is tracked on a daily basis and complete reports are provided
when required by Company.
. Implement a comprehensive filing system which ensures that all relevant
site information is organized and available. Utilize electronic means
whenever possible.
. Manage and coordinate interactions between Site Acquisition and Site
Construction. Ensure that both formal and informal communications
between these Milestone Services are effective and in the best interest
of Company.
. Manage and coordinate interactions among site acquisition and
construction management and other disciplines involved in the system
deployment (e.g., RF engineering, network engineering, marketing).
Ensure that both formal and informal communications among these
disciplines are effective and in the best interest of Company.
27
<PAGE>
ATTACHMENT B
------------
1. MILESTONE SERVICES
Upon completion to the satisfaction of the Company of the Milestones
Services set forth in Section 1 below, Company will receive the Milestone Rates
in Section 1 below:
<TABLE>
<CAPTION>
Milestone Services Milestone Rate
------------------------------------------------------------------
<S> <C> <C>
A. Site Selection $3,000.00
B. Site Acquisition $4,333.33
C. Site Zoning $7,333.33
D. Site Construction $7,333.33
</TABLE>
2. EXPENSES
Included Expenses
The following expenses are included in the Milestone Rates set forth
above: travel and living, GIS mapping; field expenses for maps, deeds and film
development, cellular phones/pagers; cellular/paging service; vehicles; office
equipment, including computers and copiers; office rent (including rent and
utilities other than the expenses for Contractor's use of space in the Company's
Charleston, S.C. office which expenses will be paid by the Company; office
supplies, overnight mail and telephone service.
Excluded Expenses
The following expenses shall be considered expenses payable by the
Company and are in addition to the Milestone Rates set forth above.
(i) Any and all construction materials used in the construction of
the Sites:
(ii) Any and all construction subcontractor cost including, but not
limited to, cable and antenna contractors, electricians, and
tower erectors;
(iii) Architectural and electrical drawings;
(iv) Azimuth verification surveys;
(v) Building inspection fees;
(vi) Cable sweeps and other technical tests;
(vii) Purchase price for real estate acquisition and easement rights;
(viii) All municipal filings, permit and inspection fees;
(ix) Delivery costs for all materials
(x) Engineering services;
(xi) Federal Aviation Administration study and analysis;
(xii) Floodway investigation;
(xiii) Independent inspection agencies;
(xiv) Legal support and expert witness fees for zoning hearings;
28
<PAGE>
(xv) Option fees for leases, lease options, purchase agreements and
purchase agreement options;
(xvi) Phase I Environmental Study including soil compaction,
engineering and other inspections of the property required or
reasonably deemed necessary to provide a thorough due diligence
review of the project;
(xvii) Photo simulation;
(xviii) Site survey;
(xix) Soils tests and reports, including geotechnical testing;
(xx) Structure loading study and analysis for towers, rooftops, water
tanks, billboards and signs, and other similar facilities
expected to contain PCS equipment;
(xxi) Appraisals, title reports and title insurance premiums; and
(xxii) Tower/foundation design information.
3. TIME AND MATERIALS
<TABLE>
<CAPTION>
Job Description
- ---------------
<S> <C>
Project Manger $110.00 hour
Site Acquisition Manager $ 90.00 hour
Construction/Development Manager $ 70.00 hour
In-house Attorney $150.00 hour
Paralegal $ 60.00 hour
Zoning Manager $ 70.00 hour
Zoning Assistant $ 50.00 hour
Project Tracking $ 30.00 hour
Administrative Assistant $ 25.00 hour
Site Acquisition Specialist $ 70.00 hour
</TABLE>
4. CANCELLATION FEES
If Company selects an alternative site candidate after a primary
candidate has been selected (or a second alternative site candidate after a
first alternative has been selected), Company shall pay Contractor for any
Milestone Service completed prior to date an alternative is selected and time
and materials for a Milestone Service in process in accordance with the fee
schedule above. Notwithstanding the foregoing, Contractor will not receive more
than 50% of the Milestone Rate for a Milestone Service in process as of the date
an alternative candidate is selected (the "Milestone In Process Fee").
Moreover, after an alternative candidate is selected (the "Milestone In Process
Fee"). Moreover, after an alternative candidate is selected, Contractor will
receive as additional payment for completion of the Milestone Service in process
the Milestone Rate less any Milestone In Process Fee paid to Contractor.
Notwithstanding the foregoing, if Company elects to withdraw greater than 5% of
the Search Rings assigned to Contractor then with respect to each replacement
Search Ring in excess of 5% Company shall pay Contractor for all Milestone
Services provided by Contractor.
29
<PAGE>
5. INVOICES
Contractor will submit invoices on the first of each month for
Milestone Services completed during the prior month. Such invoices will
describe the Services rendered and the time and materials attributable thereto
with such particularity and in a format reasonably acceptable to the Company.
Company will make payments for all amounts due hereunder within 30 days of
receipt of invoice less any payments in dispute which will be payable within 30
days of resolution of such dispute. Contractor shall be entitled to assess a 1
1/2% a month late fee on all outstanding invoices properly issued, aged over 45
days and not in dispute.
30
<PAGE>
ATTACHMENT C
------------
SCHEDULE
31
<PAGE>
ATTACHMENT D
------------
PERSONNEL
32
<PAGE>
ATTACHMENT E
------------
LEASE
33
<PAGE>
EXHIBIT 10.14
SITE DEVELOPMENT SERVICES AGREEMENT
-----------------------------------
THIS SITE DEVELOPMENT SERVICES AGREEMENT ("Agreement") dated as of the
10th day of December, 1997 ("Effective Date"), by and between Triton PCS, Inc.,
a Delaware limited liability company or its nominee ("Triton") and Entel
Technologies, Inc., a Delaware corporation ("Entel").
WITNESSETH:
WHEREAS, Triton desires to engage Entel to perform services related to
the development of a personal communication services ("PCS") system (the
"System") to serve the Washington, D.C./Richmond/Norfolk, Virginia Major Trading
Area (the "Service Area") comprising certain sites of real property which are
designated by Triton from time to time through a letter of authorization
("Authorization Letter") and upon which antennae towers, wires, and/or other
ancillary PCS equipment shall be located ("Site").
WHEREAS, Triton desires to enter into an arrangement with Entel for
certain services, as hereinafter defined, relating to the development of certain
portions of the System, to include site acquisition, zoning, and construction
management services.
1. RELATIONSHIP OF PARTIES
-----------------------
The parties intend by this Agreement to establish an independent
contractor relationship. Neither party nor their employees shall be agents or
legal representatives of the other party for any purpose, and neither shall have
authority to act for, bind, or commit the other party. Entel and Triton agrees
that this Agreement does not establish a franchise, joint venture, or
partnership for any purpose.
2. REQUIRED SERVICES
-----------------
Entel shall be assigned a range of sites between 200 sites ("Base
Number") and 250 or more sites ("Maximum Number") to perform site development
services ("Site Development Services") for Triton with respect to the System.
Entel shall devote such time and resources as are necessary to ensure proper and
expeditious completion of its duties hereunder and shall make available to the
System the full range of its expertise and experience in constructing wireless
systems. Site Development Services shall consist of the services described on
Attachment A hereto.
A. Entel Deliverables; Reporting; Approval by Triton. Within 10 business
--------------------------------------------------
days after execution of this Agreement, Triton and Entel shall agree upon and
prepare a detailed schedule for the completion of Site Development Services on a
site-by-site basis, which schedule shall become Attachment B to this Agreement.
The schedule shall contain at a minimum, milestone dates for completion by Entel
of Site Acquisition, Site Zoning, and Site Construction Services (each as
defined in Attachment A). This Agreement shall automatically terminate if the
parties are unable, after good faith negotiations, to agree to a schedule within
the allotted 10 business days; provided, however, in the event of such
-------- -------
termination, Triton shall pay to Entel all professional fees and out-of-pocket
expenses incurred by Entel prior to such termination, which fees shall not
exceed $200,000. Following approval of this schedule by Triton, Entel shall,
thereafter, for the term of this Agreement, provided Triton with not less than a
written weekly report outlining the progress made to attain the schedule
previously submitted. Any change in report schedule which results in a time
extension of one week or greater on an individual site basis shall be clearly
noted and the reasons therefore shall be explained in writing. Triton may, at
its
1
<PAGE>
sole discretion, agree to a time extension from the detained schedule originally
provided. Entel shall attend all project meetings reasonably requested by
Triton.
B. Payment to Contractors. Triton shall be responsible for
----------------------
making all payments due to contractors and subcontractors selected by Triton to
perform services at the Sites. Notwithstanding the foregoing, Triton, at its
option, may require Entel to contract directly with all trade contractors and
subcontractors for provision of services at the Sites. Should Triton exercise
such option, Entel shall be responsible for disbursing funds for payment only to
those contractors, subcontractors, material providers, and other service
providers engaged by Entel directly. Entel shall present copies of all such
invoices relating to construction of the Sites to Triton, and Triton shall then
provide Entel reimbursement of such reimbursements plus eight percent (8%)
within thirty (30) days of Entel's submission of said invoices to Triton.
3. PERSONNEL
---------
A. Entel Employees and Agents. Entel may elect to rely upon its own
--------------------------
employees and agents for the performance of services under this Agreement to the
extent it, in its sole discretion, deems such action to be necessary or
advisable. Triton reserves the right to approve Entel employees and/or
contractors assigned to perform services under this Agreement.
B. Independent Contractors. Entel may engage independent contractors at
-----------------------
Triton's consent to perform Site Development Services. Entel shall be
responsible for selecting and contracting such independent contractors.
C. Self Dealing. Entel may rely upon its employees in accordance with
------------
Section 3(B) above and, in addition, it may provide or contract with an
affiliate of Entel with Triton's consent at fair market rates in accordance with
competitive bids to provide goods or services beyond those which its employees
would perform, if it deems the same to be necessary or advisable for
construction of the Sites. Entel will not, nor will any of its affiliates,
receive any compensation other than as set forth in Section 4 and 6 herein as a
result of, arising from, or relating to Site Development Services. If any such
compensation would have otherwise been payable, Entel agrees to transfer the
benefit of such compensation to Triton.
D. Prohibition of Solicitation. During the term of this Agreement,
---------------------------
neither party shall solicit nor accept for employment any employees of the other
party without the express written consent of the other party.
4. COMPENSATION
------------
A. Reimbursement. Entel's compensation hereunder, as described in Section
-------------
4(B), shall be inclusive of any and all out-of-pocket expenses, as described in
Section 5, incurred by Entel in the performance of its obligations hereunder.
Any extraordinary or other expenses which Entel anticipates incurring which are
not customarily incurred in the ordinary course of business must be approved by
Triton prior to the expenditure in order for Entel to receive reimbursement for
such expenditures.
B. Milestone Rates. In consideration for performance of the Site
---------------
Development Services, Triton shall compensate Entel the Milestone Rates set
forth below:
2
<PAGE>
<TABLE>
<CAPTION>
Milestone Services MILESTONE RATES
------------------------------------------- -------------------
- --------------------------------------------------------------------------------------
<S> <C> <C>
(i) Site Survey Milestone $2,000.00
- --------------------------------------------------------------------------------------
(ii) Lease Milestone $4,000.00
- --------------------------------------------------------------------------------------
(iii) Zoning Milestone $4,000.00
- --------------------------------------------------------------------------------------
(iv) Building Permit Milestone $1,000.00
- --------------------------------------------------------------------------------------
(v) Construction Commencement Milestone $4,000.00
- --------------------------------------------------------------------------------------
(vi) Construction Completion Milestone $4,000.00
- --------------------------------------------------------------------------------------
</TABLE>
C. Alternative Sites. In the event Triton elects to withdraw a Site
-----------------
assigned to Entel under the Authorization Letter or termination this Agreement
in accordance with Section 8 hereof, Triton shall give Entel notice of such
withdrawal, and shall pay Entel 100% of the installment due for a Milestone
Service which has been completed prior to the notice of withdrawal or
termination and time and materials for a Milestone Service in process since the
last completed Milestone in accordance with the rates set forth in Section 4(B).
D. Additional Services. In the event Triton desires Entel to perform
-------------------
isolated tasks associated with a Site not set forth on Attachment A, Triton
shall pay Entel at its standard hourly rates listed on Attachment C.
E. Statements. Entel shall provide Triton with statements showing in
----------
reasonable detail the calculation of Milestone Rates earned during the last
calendar month not more than thirty (30) calendar days following the end of each
calendar month. The Milestone Rates shall be paid by Triton to Entel within
thirty (30) days following such submission of invoices by Entel unless disputed
by Triton as provided below.
F. Applicability of Section. Payment shall be due Entel from Triton under
------------------------
the provisions of this Section with respect to all Site Development Services
performed by Entel for Triton from and after the Effective Date.
5. NON-REIMBURSABLE COSTS
----------------------
Entel's compensation, described in Section 4(B), is inclusive of the
following out-of-pocket expenses.
A. Cellular phones/pagers;
B. Cellular/paging service;
C. Field expenses for maps, deeds, and film development;
D. Vehicle expense;
E. Office equipment, including computers, and copiers, if additional
copiers are required beyond what is provided at Triton's field
offices;
F. Office rent, if additional space is required beyond what is provided
at Triton's field offices;
G. Office supplies;
H. Overnight mail, excluding the cost of overnight mail for construction
bids;
I. Telephone service;
J. Travel and living expenses; and
K. GIS mapping.
3
<PAGE>
6. REIMBURSABLE COSTS
------------------
As described in Section 2(B), Triton, at its option, may require Entel
to contract directly with third parties, trade contractors, and subcontractors
for provision of services at the Sites. The following expenses shall be
considered pass through costs and shall be reimbursed to Entel as additional
compensation in accordance with the terms and conditions, as described in
Section 2(B);
A. Any and all construction materials used in the construction of the
sites;
B. Any and all construction subcontractor cost including, but not limited
to, cable and antenna contractors, electricians, and tower erectors;
C. Architectural and engineering drawings;
D. Azimuth verification surveys;
E. Blueprint reproduction;
F. Building inspection fees;
G. Cable sweeps and other technical tests;
H. Purchase price for real estate acquisitions and easement rights;
I. All municipal filing, permit, and inspection fees;
J. Delivery costs for all materials;
K. Engineering services;
L. Federal Aviation Administration study and analysis;
M. Floodway investigation;
N. Independent inspection agencies;
O. Legal support and expert witness fees for zoning hearings;
P. Option fees for leases, lease options, purchase agreements, and
purchase agreement options;
Q. Overnight mail for construction bids;
R. Phase 1 Environmental Study, including soil compaction, engineering,
and other inspection of the property required or reasonably deemed
necessary to provide a thorough due diligence review of the project;
S. Photo simulations if not available through Entel's in-house
capabilities;
T. Site survey;
U. Soils tests and reports, including geotechnical testing;
V. Structure loading study and analysis for towers, rooftops, water
tanks, billboards and signs and other similar facilities expected to
contain PCS equipment;
W. Appraisals, title reports, and title insurance premiums; and
X. Tower/foundation design information.
7. TERM
----
The Agreement shall have an initial term of fifteen (15) months
commencing on the Effective Date. The Agreement shall be renewed automatically
for additional 1-year terms unless one party notifies the other party of an
intent to cancel the Agreement at the end of its then current term by written
notice delivered at least 90 days prior to the end of the then current term.
8. TERMINATION
-----------
A. In addition to its rights to terminate this Agreement in accordance
with Section 2 and Section 14:
4
<PAGE>
(i) Triton may terminate the Agreement upon written notice
thereof if there is a material breach of the Agreement by Entel
(including, without limitation, Entel's failure to provide either
timely or quality Site Development Services); or
(ii) Triton may terminate the Agreement upon written notice
thereof if Entel shall: (i) become insolvent, (ii) make an assignment
for the benefit of creditors; (iii) file a voluntary bankruptcy
petition; (iv) acquiesce to any involuntary bankruptcy petition; (v)
be adjudicated bankrupt; or (vi) cease to do business.
B. Entel may terminate the Agreement on 30 calendar days' written notice
in the vent of any of the following:
(i) a material breach of the Agreement by Triton, which has not
been cured within 30 calendar days of Triton's receipt of written
notice of such breach from Entel; or
(ii) Triton shall: (i) become insolvent; (ii) make an
assignment for the benefit of creditors; (iii) file a voluntary
bankruptcy petition; (iv) acquiesce to any involuntary bankruptcy
petition; (v) be adjudicated bankrupt; or (vi) cease to do business.
C. After receipt of such written notice of termination, but prior to the
effective date of such termination, Entel shall continue to perform under the
Agreement unless specifically instructed by Triton to discontinue such
performance. Entel will be entitled to Milestone Rates payable in accordance
with Section 4 hereof, which accrue through the date of discontinuance of
performance on the basis of activities preceding the discontinuance of
performance.
9. CONSENT TO JURISDICTION
-----------------------
The parties hereby irrevocably (i) submit to the jurisdiction of any
Pennsylvania state court or federal court sitting in the Commonwealth of
Pennsylvania with respect to any suit, action, or proceeding relating to this
Agreement or any related agreement, (ii) waive any objection which they may now
or hereafter have to the laying of venue of any such suit, action, or proceeding
brought in any such court and any claim that any such suit, action, or
proceeding brought in any such court has been brought in an inconvenient forum,
(iii) waive the right to object that any such court does not have jurisdiction
over them, and (iv) consent to the service of process in any such suit, action,
or proceeding by the mailing of copies of such process to the parties by
certified mail to the addresses indicated in this Agreement or at such other
addresses of which the parties shall have received written notice. Nothing
herein shall preclude any party from enforcing any judgment obtained in the
Commonwealth of Virginia in any other jurisdiction.
10. CONDITIONS, REPRESENTATIONS AND WARRANTIES
------------------------------------------
A. Representations and Warranties. The parties represent and warrant to
------------------------------
one another that they have full power and authority to enter into and perform
this Agreement and that execution of this Agreement and their performance of
their respective obligations hereunder do not and will not violate
5
<PAGE>
any agreement between either such party and any third party or any obligation of
either such party to any third party, including, without limitation, any non-
compete agreement or similar obligation.
B. Entel warrants that it has complied with all applicable federal, state,
and local registration and licensing requirements to enable it to act as an
independent contractor under the terms of this Agreement.
C. Entel has the skill necessary to perform the services required pursuant
to this Agreement, and all Site Development Services provided by Entel shall be
timely and performed in a professional manner and shall be of a high grade
nature and quality, commensurate with that which is customary in the industry.
D. Each of the employees and subcontractors utilized by Entel for Site
Development Services hereunder shall be of the highest professional skill and
quality. At any time, Triton has the right to require the removal of any
employee or subcontractor utilized or supervised by Entel, at Triton's sole
discretion.
E. Entel shall pay all applicable local, state, and federal withholding
and insurance amounts when due and shall comply with all applicable minimum wage
requirements with respect to its employees.
F. Entel will during the term of this Agreement maintain insurance
policies sufficient to protect its business against all applicable risks.
Without limiting the scope of the foregoing, Entel shall maintain: Commercial
General Liability coverage in an amount of not less than $1,000,000 per
occurrence for bodily injury or death, personal injury, and property damage
liability; and for all motor vehicles used by employees during the course of
this Agreement, liability and property damage insurance in the amount of
$1,000,000. Entel agrees to name Triton as additional insured under the above
coverages. Entel will secure and maintain all required insurance for its
employees during the term of this Agreement. All subcontractors or other agents
hired by Entel under the terms of this Agreement must adhere to the conditions
contained in this paragraph, which shall be paid by subcontractor, and Entel
shall provide Triton with a copy of said insurance. Entel shall provide Triton
with evidence of such insurance prior to commencement of work under this
contract and as otherwise reasonably requested by Triton.
G. Covenants. The parties covenant and agree to use their best efforts to
---------
cooperate with each other in the performance of their respective obligations
under the Agreement and to take no action that will interfere with the
performance by the other party of such obligations.
11. ASSIGNMENT
----------
Assigning to Third Parties. Triton may freely assign its rights and
--------------------------
obligations hereunder. Except as specifically permitted herein, Entel may not
assign or transfer any right, interest, or obligation hereunder to any third
party without the express written consent of Triton, such consent not to be
unreasonably withheld or delayed; provided, however, Entel may freely assign
-------- -------
this Agreement to any affiliate of Entel upon written notice to Triton. Any
purported assignment in violation of this Section shall be void.
6
<PAGE>
12. INDEMNIFICATION
---------------
A. Except as a result of Entel's gross negligence or willful misconduct,
Triton agrees to defend and indemnify Entel for and hold it harmless from any
and all claims, actions, damages, or other liabilities (including reasonable
attorneys' fees) incurred by Entel as the result of any act, error, omission,
non-performance by negligence, or wrongful act of Triton arising directly out of
the performance of this Agreement.
B. Except as a result of Triton's gross negligence or willful misconduct,
Entel agrees to defend and indemnify Triton for and hold it harmless from any
and all claims, actions, damages, or other liabilities (including reasonable
attorneys' fees) incurred by Triton as the result of any act, error, omission,
nonperformance by negligence, or wrongful act of Entel arising directly out of
the performance of this Agreement.
13. MISCELLANEOUS
-------------
A. Choice of Law. The Agreement shall be governed by and construed in
-------------
accordance with the laws of the Commonwealth of Pennsylvania, excluding the
conflict of law provisions thereof.
B. Choice of Law. All notices or other communications hereunder shall be
-------------
in writing and shall be deemed to have been duly delivered and effective upon
receipt if personally delivered, or on mailing if mailed by prepaid overnight
express service, addressed to the following (or other addresses as the parties
hereto may designate):
If to Triton:
Triton PCS, Inc.
Drive, Suite 125
Malvern, PA 19355
Attn: President
and
Triton PCS, Inc.
9211 Arboretum Parkway
Richmond, VA 23236
Attn: General Manager
If to Entel:
Entel Technologies, Inc.
1110 North Glebe Road, Suite 850
Arlington, VA 22201
Attn: Chief Financial Officer
C. Entire Agreement. This Agreement constitutes the entire agreement of
----------------
the parties with respect to the subject matters addressed, and shall supersede
any and all prior negotiations, understandings, and agreements with respect
hereto.
7
<PAGE>
D. Modification. This Agreement may be amended only by a written
------------
instrument executed by an officer or authorized representative of each of the
parties.
E. Binding Effect. The Agreement shall be binding upon and enforceable by
--------------
and inure to the benefit of the successors, assigns, and transferees of the
parties.
F. Further Assurance. The parties shall execute, and deliver such further
-----------------
instruments and perform such further acts as may reasonably be required to carry
out the intent and purposes of this Agreement.
G. Severability. In case any term of this Agreement shall be held
------------
invalid, illegal, or unenforceable in whole or in part, neither the validity of
the remaining part of such term nor the validity of the remaining terms of this
Agreement shall in any way be affected thereby.
H. Headings. All section and paragraph titles or captions contained in
--------
this Agreement are for convenience only and shall not be deemed part of the text
of this Agreement.
I. Pronouns. All pronouns and any variations thereof shall be deemed to
--------
refer to the masculine, feminine, neuter, singular, or plural as the context may
require.
J. Counterparts. This Agreement may be signed in any number of
------------
counterparts, each of which shall be considered an original and all of which
taken together shall constitute one and the same instrument.
K. Waiver. The failure of either party to insist upon strict performance
------
of any obligation hereunder, irrespective of the length of time for which such
failure continues, shall not be a waiver of such party's right to demand strict
compliance in the future. No consent or waiver, express or implied, to or of
any breach or default in the performance of any obligation hereunder shall
constitute a consent or waiver to or of any other breach or default in the
performance of the same or any other obligation hereunder.
L. Confidentiality. In order to permit Entel to perform its obligations
---------------
hereunder, Triton may from time to time disclose to Entel confidential or
proprietary information of Triton ("Confidential Information"). Entel shall use
all Confidential Information solely for the purpose of performing its
obligations to Triton under this Agreement, and shall keep confidential and not
disclose to any other person, other than employees or agents of Entel who agree
to be bound by an equivalent undertaking, any Confidential Information. The
foregoing restrictions shall not apply to any Confidential Information:
(i) which is made public by Triton or which otherwise is or
hereafter becomes part of the public domain through no wrongful act,
fault, or negligence on the part of Entel;
(ii) which Entel can reasonably demonstrate is already in
Entel's possession and not subject to an existing agreement of
confidentiality;
(iii) which is received from a third party without restriction
and without breach of an agreement with Triton;
(iv) which is independently developed by Entel as evidenced by
its records; or
8
<PAGE>
(v) which Entel is required to disclose pursuant to a valid
order of a court or other governmental body or any political
subdivision hereof; provided, however, that, to the extent that it may
lawfully do so, Entel shall first have given notice to Triton and
given Triton a reasonable opportunity to interpose an objection or
obtain a protective order requiring that the Confidential Information
so disclosed be used only for the purposes for which the order was
issued.
14. EFFECTIVE DATE
--------------
Notwithstanding anything herein to the contrary, Triton shall have the
right to terminate this Agreement upon written notice to Entel if Triton has not
acquired the PCS Licenses for the Service Area from AT&T, provided, however,
-------- -------
that if Triton fails to obtain such PCS Licenses for the Service Area from AT&T,
then Triton shall pay to Entel all professional fees and out-of-pocket expenses
incurred by Entel, in accordance with the payment terms under Section 4, prior
to Entel's receipt of notification from Triton of Triton's failure to obtain the
PCS Licenses.
IN WITNESS WHEREOF, this Agreement has been duly executed as of the
Effective Date.
TRITON PCS, INC. ENTEL TECHNOLOGIES, INC.
By: By:
------------------------- ----------------------------
Name: Name:
----------------------- --------------------------
Its: Its:
------------------------ ---------------------------
9
<PAGE>
ATTACHMENT A
------------
Scope of Work
SERVICES: To enable Triton to develop, deploy, and deliver its PCS network,
Entel has been engaged to perform the various Site Development Services as more
specifically described in the Attachments to this Attachment A ("Services").
<TABLE>
<CAPTION>
WORK ITEM Attachment
- -------------------------------------------------------------------------------------------
<S> <C>
Pre-zoning A-1
- -------------------------------------------------------------------------------------------
Pre-Design A-2
- -------------------------------------------------------------------------------------------
Site Selection A-3
- -------------------------------------------------------------------------------------------
Site Acquisition A-4
- -------------------------------------------------------------------------------------------
Site Survey A-5
- -------------------------------------------------------------------------------------------
Zoning A-6
- -------------------------------------------------------------------------------------------
Building Permit A-7
- -------------------------------------------------------------------------------------------
Phase One/NEPA Environmental Screening A-8
- -------------------------------------------------------------------------------------------
Project Reporting A-9
- -------------------------------------------------------------------------------------------
Geotechnical Report A-10
- -------------------------------------------------------------------------------------------
FAA Survey A-11
- -------------------------------------------------------------------------------------------
Construction Management A-12
- -------------------------------------------------------------------------------------------
Project Management A-13
- -------------------------------------------------------------------------------------------
Materials Management A-14
- -------------------------------------------------------------------------------------------
</TABLE>
DEFINITIONS: For purposes of this Agreement, the following words will have the
following meanings:
"BUILDING PERMIT MILESTONE" means completing to the reasonable satisfaction
of Triton all Building Permit Services described in Attachment A-7
"DELIVERABLES" means completing to the reasonable satisfaction of Triton
all Building Permit Services described in Attachment A-7.
"PSC" Equipment means Triton's towers, antennas, and related equipment
necessary to deploy and deliver PCS from Sites in the MTA/BTA covered by
this Agreement.
"RF" means Wireless Facilities, Inc.
"CONSTRUCTION COMMENCEMENT MILESTONE" means completing all Phase One/NEPA
Environmental Project Reporting, Geotechnical Reports and FAA Survey
services described in Attachments A-8 through A-11.
"CONSTRUCTION COMPLETION MILESTONE" means completing all Construction
Management, Project Management Services and Materials Management set forth
in Attachments A-12 through A-14.
"LEASE MILESTONE" means completing all Site Selection and Site Acquisition
services set forth in Attachments A-3 through A-4.
10
<PAGE>
"SITE SURVEY MILESTONE" means completing all Pre-Zoning and Pre-Design
services set forth in Attachments A-1 through A-2.
"ZONING MILESTONE" means completing all Site Survey and Zoning Services set
forth in Attachments A-6 through A-7.
11
<PAGE>
ATTACHMENT A-1
--------------
Pre-Zoning
1. Entel will work with Triton to develop zoning classifications to be
utilized in this phase of the project.
2. Entel will identify, within the BTA coverage area as defined by Triton, all
zoning jurisdictions within the BTA. Entel will obtain zoning maps and
regulations for each jurisdiction, identifying all restrictions, including,
but not limited to height restrictions, setback requirements, fence height
restrictions, tower fall zones, and other restrictions. Entel will obtain
the names and telephone numbers of zoning and building permit contact
persons.
12
<PAGE>
ATTACHMENT A-2
--------------
Pre-Design
1. Entel will identify and catalog all potential sites available to Triton
from site providers that previously leased space to an Entel client or
expressed an interest in leasing space to Entel ("Friendly Sites").
13
<PAGE>
ATTACHMENT A-3
--------------
Site Selection
1. RF will issue a search ring based on its preliminary design (such design
will consider Friendly Sites).
2. RF will deliver search rings to Triton, which will then issue search rings
to Entel.
3. Entel must always give preference to sites available under Triton's
existing master lease agreements entered into by Triton ("Master Leases").
If Entel cannot utilize sites under Master Leases, written documentation
must be provided to Triton giving justification as to why sites under
Master Leases cannot be used.
4. Entel will identify three (3) potential candidates for each search ring
within 14 days after receipt of the search ring from Triton. Entel shall
have an additional 5 days to identify potential candidates for additional
search rings if Triton has delivered more than 20 search rings to Entel
within a calendar week. If three (3) such candidates are not available,
Entel will furnish to Triton a written explanation of Entel's reason(s) why
unavailable.
5. Triton will approve or reject candidates or re-design a search ring at
Triton's option.
6. Entel will utilize necessary resources to comply with Triton's established
scheduled time lines in accordance with Section 6 of the Agreement.
7. Entel will provide search ring reports containing the following minimum
information:
A. BTA
B. Site name
C. Acquisition Agent
D. GPS coordinates
E. Site locale
F. Site address or exact location if address unavailable
G. 4 photos taken from site (photos should be taken for a 360 orientation
for a rooftop site)
H. 4 photos taken of the site
I. Name of site owner and manager and address (if applicable)
J. Lessor's name and address
K. Proposed monthly lease rate/purchase price/term
L. Physical data (overall structure height, height(s) available to mount
antennas, space available for Triton's electronic equipment, distance
for coax from antennas to equipment, tower manufacturer and type,
primary use of structure, etc.). Additional specifics will be
required as needed by Triton.
M. Presence of Transmitters, receivers, or antennas visible in the area
including operating frequencies, photographs
N. Indicate if space available is/has:
14
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
. clean . 24 hrs/7y-day access
- ----------------------------------------------------------------------------------------------------
. phone circuits . elevator to equipment room
- ----------------------------------------------------------------------------------------------------
. ventilation . adjacent or nearby man-made or natural obstructions
- ----------------------------------------------------------------------------------------------------
. loading dock . transmitter shelter area - provide drawings
- ----------------------------------------------------------------------------------------------------
. pest infestation . describe exact dimensions and locations
- ----------------------------------------------------------------------------------------------------
. air conditioning . electrical service available
- ----------------------------------------------------------------------------------------------------
. emergency power . map with street level details showing site location
- ----------------------------------------------------------------------------------------------------
. moisture/water . additional information to assist with site evaluation
- ----------------------------------------------------------------------------------------------------
</TABLE>
15
<PAGE>
ATTACHMENT A-4
--------------
Site Acquisition
Entel shall coordinate closely all site acquisition work with any Third Party.
1. If the site is to be acquired by lease, Entel will be responsible for
securing proper execution by the site owner/landlord of the appropriate
form of lease with respect to each proposed site. Entel must use its best
efforts to use Triton's standard forms of Master Lease Agreement, PCS Site
Agreement, or other lease forms to acquire rights to proposed sites and
will use lease agreements provided by an owner/landlord only as a last
resort. Entel will also use its best efforts to use sites available under
negotiated Master Lease Agreements. Entel will follow all negotiating
guidelines provided by Triton and will not submit any proposed agreement
for Triton's consideration that is clearly outside of the provided
guidelines.
2. Due diligence with respect to title of all sites to be acquired by Triton
(by lease, purchase, or otherwise) shall be performed at the option of
Triton as follows:
a. acquire an ownership and encumbrance report ("O&E Report") from a
nationally known title insurance company satisfactory to Triton which
sets forth the same information as required for an ALTA title
insurance policy described below relating to the proposed site (to the
extent ascertainable by the title company);
b. acquire an ALTA title insurance policy on ground leases, insuring that
Triton is the owner of the leasehold estate created by the lease
covering the site in question, such policy to be issued by a
nationally recognized title insurance company acceptable to Triton and
to be in such amount and to contain such exceptions to title as are
satisfactory to Triton in Triton's sole discretion, and in this regard
the title insurance requirements to be followed by Entel with respect
to the insuring of the leasehold shall be substantially the same as
the title insurance requirements set forth in this Scope of Work for
purchase of sites below;
c. perform or coordinate with the subcontractor or third party ("Third
Party") to ensure that all applicable due diligence tests and studies
have been performed prior to Triton executing the lease to determine
to Triton's reasonable satisfaction that the proposed site is suitable
for Triton's intended use of it, including, but not limited to:
. soil suitability and compaction testing in accordance with
Attachments A-10 and A-11 with respect to ground lease sites and
vacant land sites only; and
. an asbestos survey with respect to sites where Triton's electronic
equipment will be located on or in existing improvements
constructed prior to 1980; and
. a Phase I environmental assessment with respect to ground lease
sites, switch sites, and vacant land sites.
d. In addition, the following tasks shall be performed and confirmed in
writing by Entel, or Entel shall coordinate with a Third Party to
perform and confirm in writing:
16
<PAGE>
. legal access to the site;
. adequate utility service available to the site consistent with
specifications provided by Triton to Entel;
. necessary building permits or other required governmental approvals
relating to the construction and installation of Triton's equipment
or other improvements at the site;
. no easements, conditions, restrictions, liens, or other matters exist
of record which negatively impact Triton's ability to use the site
for its intended purposes, and that there are no delinquent taxes or
assessments.
. proper zoning for Triton's intended use or whether a zoning change or
variance will be necessary;
. detailed construction drawings and plans and specifications for all
improvements to be constructed or located upon the site obtained by
Entel;
. resolutions or other appropriate authorizations or consents
pertaining to the due execution and delivery of the lease in question
by the lessor/owner of the site .
e. If the site is to be acquired by purchase, Entel shall additionally
. complete all due diligence items to Triton's reasonable satisfaction
which are conditions to Triton's purchase of a site as set forth in a
purchase agreement (which is to be substantially in the form provided
by Triton to Entel), including, without limitation, all requirements
and conditions pertaining to title insurance, survey matters, soil
testing, environmental compliance, governmental authorizations and
approvals relating to the development of the site for Triton's
intended use of it, the availability of adequate utility service and
legal access to the site, and any other matters permitted by the
terms and provisions of a purchase agreement to enable Triton to
reasonably determine whether the site is suitable for Triton's
intended use of it;
. collect from the seller of the site for delivery to Triton all
documents, surveys, drawings, and other information pertaining to the
site which the seller is required to deliver to Triton pursuant to
the terms of a purchase agreement;
. provide preliminary closing statement figures to Triton with respect
to the purchase of the site not less than ten (10) days prior to the
projected closing date; and
. assure that all requirements of the title company with respect to the
issuance of its policy of owner's title insurance are satisfied prior
to the closing date to the extent feasible, but if Triton completes
the purchase
17
<PAGE>
of a site with outstanding title requirements unsatisfied, and Entel
has so advised Triton in writing thereof, then Entel has no liability
or responsibility to Triton with respect to any such unsatisfied
requirement.
18
<PAGE>
ATTACHMENT A-5
--------------
Site Survey
1. Entel will obtain and deliver to Triton an ALTA/ACSM minimum standards
survey with such additional items as may be required by Triton, certified
by a licensed surveyor, and site plan/architectural drawings required by
local zoning authorities. (Entel may subcontract this work locally.)
Survey drawings shall include, without limitation:
a. site name and number;
b. legal description of parcel, access road easement and utility
easement;
c. relationship of site parcel to adjacent property boundaries by
distance and direction;
d. site parcel and adjacent parcels by map and parcel number, by deed
book and page, and by ownership;
e. name, telephone number, and address of surveyor and office contact;
f. the location of all matters described in recorded instruments
affecting the site if capable of being shown on a survey;
g. result of flood plain determination.
2. Entel will secure and deliver to Triton any required survey plans, mylars,
exemption plats, or other survey documents required along with any required
signatures.
19
<PAGE>
ATTACHMENT A-6
--------------
Zoning
1. Entel will prepare and submit all zoning applications and appeals with
required drawings and other related materials and it will obtain any
required zoning approval.
2. Entel will attend all required hearings and represent Triton at Triton's
request.
3. Entel will determine needed compliance with any subdivision regulations for
purchased sites.
4. Entel will involve legal counsel only in zoning situations in which Triton
agrees legal representation is warranted.
5. Entel will provide staffing, at its expense, and the necessary associated
equipment to scan photographs into a document format. If further
enhancement is required to create special presentation quality materials
for a landlord or zoning approval, Triton agrees to the use of a Third
Party at its specific approval and expense.
20
<PAGE>
ATTACHMENT A-7
--------------
Building Permit
1. Entel shall apply for, coordinate/track, and obtain building permit.
21
<PAGE>
ATTACHMENT A-8
--------------
Phase One-NEPA Environmental Screening
Within a reasonable period after Triton has approved a primary site candidate
for a search ring:
1. Entel agrees that within its scope of work shall be included a
comprehensive investigation and completion of NEPA checklist for all actual
or potential federal, state, local, or other jurisdictional environmental
requirements, including, but not limited to, the SARA Title II and Federal
Communications Commission regulations regarding Environmental Assessment
(e.g., FCC Rules on Environmental Impact, 47 C.F.R. 1.11307) referred to as
"Environmental Screening." Triton shall complete, execute, and submit a
fully executed original NEPA Checklist for each site. The NEPA Checklist
shall be in the form acceptable to Triton and shall include, without
limitation, whether a proposed site:
a. is located in an officially designated wilderness area;
b. is located in a designated wilderness preserve;
c. may affect threatened or endangered species of their habitats;
d. may affect site listed on the National Register of Historic Places;
e. may affect Indian religious sites;
f. is located in a flood plain;
g. may involve a significant change in surface features;
h. whether an antenna tower is to be equipped with high intensity white
light would be located in a residential neighborhood.
2. Entel agrees that it shall engage an environmental consultant to perform a
Phase One Environmental Assessment ("Phase One") in accordance with Triton
standards. The results of such assessment shall be delivered to Triton in
writing.
3. At Triton's option, Entel will coordinate activities required to complete
the Environmental Screening requirement on radio frequency emissions to
determine whether the proposed facilities are located where an operator or
transmitter would cause human exposure to levels of radio frequency
radiation in excess of the limits specified in Subsections 1.1310 and
2.1093, 47 C.F.R. (Applications to the FCC for construction permits,
licenses to transmit or renewals thereof, equipment authorizations, or
modifications in existing facilities must contain a statement confirming
compliance, with the radio frequency limits unless the facility, operation,
or transmitter is categorically excluded as discussed in Subsection 1.1307.
Technical information showing the basis for this statement must be
submitted to the FCC upon request). This particular Environmental
Screening requirement shall be sufficient to uncover the impact or
potential impact of any such jurisdictional requirements, including, but
not limited to, regulatory filings, hearings, approvals and/or fees, site
sampling, testing, or relocation of the site requirements.
4. Entel agrees that the results of any and all Environmental Screening and
Phase One performed Third Party shall be reported to Triton. Entel
acknowledges that the timely reporting of such information may influence
the site acquisition decision, and Entel shall pro-actively work in good
faith with Triton to arrive at the optimal site acquisition decision in
light of such information. Entel agrees to seek indemnification for Triton
for the Third Party for any costs, including reasonable attorneys' fees
associated with any environmental remediation, fine, or other penalty
imposed on Triton as the direct or indirect result of Third Party's failure
to detect
22
<PAGE>
such impact or requirement as described in this Attachment A-8. Should
Entel not obtain this indemnification for Triton in the Entel/Third Party
Agreement, Entel agrees to indemnify Triton for any costs, including
reasonable attorneys' fees associated with any environmental remediation,
fine, or other penalty imposed on Triton as the direct or indirect result
of Third Party's failure to detect such impact or requirement as described
in this Agreement.
23
<PAGE>
ATTACHMENT A-9
--------------
Project Reporting
1. Entel will provide Triton with weekly reports showing project status. This
status report will be put into a format acceptable to Triton. Report
information will be transmitted to Triton via electronic means. Each
status report must include all the following items. Next to each task must
be included the date it was completed or the expected date of completion.
a. BTA name
b. Cell name
c. Grid ID
d. Site ID
e. Acquisition received search ring
f. Search area report delivered to RF
g. Site approved by RF, Entel & Triton
h. Draft lease/option delivered to Triton
i. Legal review of lease/option complete
j. Lease execution
k. Lease memo recorded
l. Loading study complete
m. Survey and site plan complete
n. Soil borings complete
o. Flood way investigation complete
p. Lien and title insurance complete
q. Phase I NEPA checklist complete
r. Zoning approved
s. Building permit obtained
t. Property closed
u. Site released to construction
v. FAA approval
w. Construction started
x. Construction completed
y. Summary report of number of sites at each above stage by completion
2. Additional items to report may be added to the above list as reasonably
determined necessary by Triton.
24
<PAGE>
ATTACHMENT A-10
---------------
Geotechnical Report
1. Entel will use Third Party to obtain geotechnical report for applicable
land sites. Geotechnical report shall be completed in accordance with
Triton standards and laws of any applicable jurisdiction.
25
<PAGE>
ATTACHMENT A-11
---------------
FAA Survey
1. FAA Surveys are to be coordinated and tracked by RF, except as otherwise
specified by Triton.
26
<PAGE>
ATTACHMENT A-12
---------------
Construction Management
PRE-CONSTRUCTION PLANNING
In support of the pre-construction planning requirements, Entel will compete the
following activities:
1. Receive in a recordable form a Memorandum of Lease and any Subordination
and Non-Disturbance Agreements for signature by applicable parties,
substantially in forms provided to Entel by Triton.
2. Conduct construction feasibility assessments with all applicable
subcontractors to assess construction costs, identify potential problems,
and develop the most efficient design for each of Triton's sites.
Coordinate the production and review of all construction drawings to ensure
compliance with Triton's specifications and requirements.
3. Coordinate and manage new service requests, field surveys, and the
installation of power and telephone service to ensure that new utility
service is supplied on time and in compliance with Triton's specifications.
Act as a liaison with local building jurisdiction to ensure that
construction permits are expedited and that questions are answered or
additional information is provided as required.
4. Qualify and select Construction Subcontractors. Develop and deliver
request for quotation packages and systematically evaluate the responses.
Each subcontractor is required to participate in a thorough qualification
process during which Entel will ensure that each is fully insured and has
obtained all required local, state, and federal licenses and
certifications. Review safety programs and records references, and the
financial viability of any subcontractors. Coordinate subcontractor's
selection activities with Triton.
5. Develop a Master Construction Plan that includes a detailed schedule for
each of Triton's sites. Entel shall continuously monitor and update to
ensure compliance with project milestones.
CONSTRUCTION EXECUTION
1. Conduct pre-construction meetings with subcontractors, property managers,
and utility service providers to ensure that construction objectives,
property owner concerns, and site-specific requirements are understood and
agreed upon by all parties involved in the buildout of Triton's network.
2. Provide on-site supervision of all construction activities to minimize
disruption to property owners and to ensure adherence to construction
specifications and standards, and complete construction in compliance with
Triton's construction schedule.
QUALITY ASSURANCE
1. Conduct a thorough quality assurance inspection upon completion of each
site, ensuring that each of Triton's punch list items is resolved within 48
hours.
2. Coordinate and attend site inspections with all local building department
representatives.
27
<PAGE>
3. Prepare detailed as-built drawings that accurately reflect the installation
at each site.
4. Close out each site by compiling and providing Triton with a comprehensive
site completion package. This package will create an historical record of
everything related to the construction of the site and includes, without
limitation, site identification data, construction permit documentation,
material reconciliation construction test results, site photographs, and
as-built drawings
28
<PAGE>
ATTACHMENT A-13
---------------
Project Management
Entel will provide the following services:
1. Develop and implement a thorough deployment plan which tracks all
activities associated with site acquisition and construction management for
each site. The deployment plan will clearly articulate schedule
dependencies and critical path elements, identify the allocation of
resources, and update regularly to reflect the actual deployment.
2. Implement a quality assurance program which ensures that all activities are
performed to the highest quality standards.
3. Utilize a comprehensive cost accounting system which will include, at a
minimum, procedures for conducting financial transactions, financial
tracking and management, and comprehensive financial reporting.
4. Implement comprehensive reporting mechanisms so that detailed site progress
is tracked on a daily basis and complete reports are provided when required
by Triton.
5. Implement a comprehensive filing system which ensures that all relevant
site information is organized and available. Utilize electronic means
whenever possible.
6. Manage and coordinate interactions between site acquisition and site
construction. Ensure that both formal and informal communications between
these Milestone Services are effective and in the best interest of Triton.
Manage and coordinate interactions among site acquisition and construction
management and other disciplines involved in the system deployment (e.g.,
RF engineering, network engineering, marketing). Ensure that both formal
and informal communications among these disciplines are effective and in
the interests of Triton.
29
<PAGE>
ATTACHMENT A-14
---------------
Materials Management
Entel will provide the following services:
1. Provide Procurement Coordinator(s) at the Triton Project office that will
be responsible for all material take-offs, ordering, tracking, coordination
of deliveries, and processing of invoices for all material related to the
construction of the sites. Triton will order the radio equipment.
2. Use primary vendor(s), selected by Triton, to order all standard material
for the construction of the sites.
3. Obtain no less than three (3) bids from manufacturers of custom and
additional items such as electrical, masonry and roofing materials and
miscellaneous hardware.
4. Develop detailed bills of material for each site.
5. Present the bills of materials to Triton for review, approval and issuance
of a purchase order.
6. Place the order with the supplier using the purchase order generated by
Triton.
7. Track the status of the order using both the suppliers material management
system and internal project scheduling
8. Coordinate the time and place for the delivery of material among all
parties and schedule appropriate.
30
<PAGE>
EXHIBIT 10.16.1
AMENDMENT NO.1 TO EMPLOYMENT AGREEMENT
--------------------------------------
AMENDMENT NO.1 TO EMPLOYMENT AGREEMENT ("Agreement"), dated as of June
____,1998, by and among TRITON MANAGEMENT COMPANY, INC., a Delaware corporation
(the "Company"), TRITON PCS HOLDINGS, INC., a Delaware corporation formerly
known as Triton PCS, Inc. ("Triton"), and MICHAEL E. KALOGRIS ("Executive").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Executive is the record and beneficial owner of 78,494.80
shares (the "Original Shares") of Triton's common stock, par value $.01 per
share (the "Common Stock"); and
WHEREAS, the Company, Triton and Executive are parties to that certain
Employment Agreement dated as of February 4, 1998 (the "Employment Agreement")
providing for, among other things, the employment of Executive by the Company
and certain rights and obligations of the parties respecting the Original
Shares; and
WHEREAS, on the date hereof Triton has entered into a certain
Preferred Stock Purchase Agreement dated as of the date hereof (the "Purchase
Agreement") among Triton, the Cash Equity Investors, the Management Stockholders
and the Independent Directors party thereto (as each such term is defined in the
Purchase Agreement); and
WHEREAS, in connection with the Myrtle Beach Closing (as defined in
the Purchase Agreement), Executive was awarded on the date hereof an additional
15,555.47 shares of Common Stock (the "Myrtle Beach Shares"), and Executive is
scheduled to receive additional shares of Common Stock in connection with the
consummation of certain other transactions contemplated by the Purchase
Agreement; and
WHEREAS, the parties desire to amend the Employment Agreement to
reflect the issuance and potential future issuances of shares of Common Stock to
Executive pursuant to the Purchase Agreement;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the Company, Triton and Executive, intending to be legally bound,
hereby agree as follows:
1. Amendment to Definition. From and after the date hereof, all
-----------------------
references to the term "Shares", as that term is defined in the Employment
Agreement, shall include the Original Shares, the Myrtle Beach Shares, and any
other shares of Common Stock that are awarded to Executive pursuant to the
Purchase Agreement.
<PAGE>
2. No Further Changes. Except for such amendment, all other terms and
------------------
conditions of the Employment Agreement shall remain the same and continue in
full force and effect, and the Employment Agreement, as amended hereby, shall
constitute the legally valid and binding obligation of the parties hereto
enforceable in accordance with its terms.
IN WITNESS WHEREOF, each of the Company and Triton has caused this
Agreement to be executed by a duly authorized officer, and Executive has
hereunto set his hand as of the day and year first above written.
COMPANY:
TRITON MANAGEMENT COMPANY, INC.
By: /s/ David D. Clark
----------------------------------------
David D. Clark, Senior Vice President
TRITON:
TRITON PCS HOLDINGS, INC.
By: /s/ David D. Clark
----------------------------------------
David D. Clark, Senior Vice President
EXECUTIVE:
By: /s/ Michael E. Kalogris
----------------------------------------
Michael E. Kalogris
2
<PAGE>
EXHIBIT 10.18.1
AMENDMENT NO.1 TO EMPLOYMENT AGREEMENT
--------------------------------------
AMENDMENT NO.1 TO EMPLOYMENT AGREEMENT ("Agreement"), dated as of June
____,1998, by and among TRITON MANAGEMENT COMPANY, INC., a Delaware corporation
(the "Company"), TRITON PCS HOLDINGS, INC., a Delaware corporation formerly
known as Triton PCS, Inc. ("Triton"), and STEVEN R. SKINNER ("Executive").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Executive is the record and beneficial owner of 58,871.10
shares (the "Original Shares") of Triton's common stock, par value $.01 per
share (the "Common Stock"); and
WHEREAS, the Company, Triton and Executive are parties to that certain
Employment Agreement dated as of February 4, 1998 (the "Employment Agreement")
providing for, among other things, the employment of Executive by the Company
and certain rights and obligations of the parties respecting the Original
Shares; and
WHEREAS, on the date hereof Triton has entered into a certain
Preferred Stock Purchase Agreement dated as of the date hereof (the "Purchase
Agreement") among Triton, the Cash Equity Investors, the Management Stockholders
and the Independent Directors party thereto (as each such term is defined in the
Purchase Agreement); and
WHEREAS, in connection with the Myrtle Beach Closing (as defined in
the Purchase Agreement), Executive was awarded on the date hereof an additional
11,666.60 shares of Common Stock (the "Myrtle Beach Shares"), and Executive is
scheduled to receive additional shares of Common Stock in connection with the
consummation of certain other transactions contemplated by the Purchase
Agreement; and
WHEREAS, the parties desire to amend the Employment Agreement to
reflect the issuance and potential future issuances of shares of Common Stock to
Executive pursuant to the Purchase Agreement;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the Company, Triton and Executive, intending to be legally bound,
hereby agree as follows:
1. Amendment to Definition. From and after the date hereof, all
-----------------------
references to the term "Shares", as that term is defined in the Employment
Agreement, shall include the Original Shares, the Myrtle Beach Shares, and any
other shares of Common Stock that are awarded to Executive pursuant to the
Purchase Agreement.
<PAGE>
2. No Further Changes. Except for such amendment, all other terms and
------------------
conditions of the Employment Agreement shall remain the same and continue in
full force and effect, and the Employment Agreement, as amended hereby, shall
constitute the legally valid and binding obligation of the parties hereto
enforceable in accordance with its terms.
IN WITNESS WHEREOF, each of the Company and Triton has caused this
Agreement to be executed by a duly authorized officer, and Executive has
hereunto set his hand as of the day and year first above written.
COMPANY:
TRITON MANAGEMENT COMPANY, INC.
By: /s/ David D. Clark
--------------------------------------
David D. Clark, Senior Vice President
TRITON:
TRITON PCS HOLDINGS, INC.
By: /s/ David D. Clark
--------------------------------------
David D. Clark, Senior Vice President
EXECUTIVE:
By: /s/ Steven R. Skinner
--------------------------------------
Steven R. Skinner
2
<PAGE>
EXHIBIT 10.19
TRITON PCS HOLDINGS, INC.
AMENDED AND RESTATED COMMON STOCK TRUST AGREEMENT
FOR MANAGEMENT EMPLOYEES AND INDEPENDENT DIRECTORS
This Amended and Restated Common Stock Trust Agreement for Management
Employees and Independent Directors ("Trust Agreement") is made this 26th day of
June 1998, by and between Triton PCS Holdings, Inc., a Delaware corporation
(the "Company"), and Michael E. Kalogris (the "Trustee"):
WHEREAS, pursuant to that certain Common Stock Trust Agreement for
Management Employees (the "Original Trust Agreement") dated February 4, 1998 by
and between the Company and Trustee, the parties created a Trust ("Trust")
pursuant to which the Company deposited with the Trustee shares of the Company's
common stock to be held by the Trustee, subject to the claims of the Company's
creditors in the event of the Company's "insolvency," as herein defined, until
distributed from the Trust;
WHEREAS, it was the intention of the parties to create and maintain a
reserve of common stock, and that such Trust constitute an unfunded arrangement
maintained for the purpose of providing ownership in the Company for a select
group of management employees ("Management Employees"); and
WHEREAS, in addition to the Management Employees, the parties desire to
also provide ownership in the Company for those persons that the Company desires
to attract and retain to serve as Independent Directors pursuant to and in
accordance with the terms of the Company's Independent Director Stock Award Plan
effective as of February 4, 1998; and
WHEREAS, it is the intention of the parties to amend and restate the
Original Trust Agreement in order to amend and modify the terms, conditions and
covenants of the Original Trust Agreement, as more particularly set forth
herein;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained herein, the parties, intending to be legally bound, do
hereby amend and restate the Original Trust Agreement in its entirety and agree
that the Trust shall be comprised, held and disposed of as follows:
Article 1. ESTABLISHMENT OF TRUST
1.01 The Company hereby deposits with Trustee in Trust 41,994.71 shares of
the Company's common stock, par value $0.01 per share, which is the current
equivalent of approximately 21.4% the Company's outstanding common stock, which
shall become the
<PAGE>
principal of the Trust to be held, administered and disposed of by Trustee as
provided in this Trust Agreement.
1.02 The Trust hereby established shall be revocable by the Company;
provided, however, that the Trust shall become irrevocable upon a change of
control, as defined in Section 13.04.
-------------
1.03 This Trust is intended to be a grantor Trust, of which the Company is
the grantor, within the meaning of Section 671 of the Internal Revenue Code of
1986, as amended, and shall be construed accordingly.
1.04 The principal of the Trust, and any dividends or earnings thereon
shall be held separate and apart from other funds of the Company and shall be
used exclusively for the uses and purposes of compensating Management Employees
and Independent Directors (collectively, "Qualified Participants") and general
creditors as herein set forth. No employee or director shall have a preferred
claim on, or beneficial ownership interest in, any assets of the Trust. Any
rights created under this Trust Agreement shall be unsecured contractual rights
of a Qualified Participant against the Company based on written agreement
between the Company and such Qualified Participant. Any assets held by the Trust
shall be subject to the claims of the Company's general creditors under federal
and state law in the event of "insolvency," as defined in Section 3.01 herein.
------------
1.05 Within 60 days following the end of the calendar year ending after the
Trust has become irrevocable pursuant to Section 1.02 hereof, the Company shall
------------
be required to irrevocably deposit additional shares of common stock of the
Company to the Trust in an amount sufficient to pay each Qualified Participant
the benefits payable pursuant to the terms of any written agreement reached
between such Qualified Participant and the Company as of the close of the
calendar year.
Article 2. DISTRIBUTIONS FROM TRUST
2.01 The Company shall deliver to Trustee a schedule (the
"Distribution Schedule") that indicates the number of shares to be distributed
in respect of each Qualified Participant or his or her beneficiaries, that
provides a formula or other instructions acceptable to the Trustee for
determining the shares distributable, the form in which such benefit is to be
distributed, and the time of distribution. Except as otherwise provided herein,
Trustee shall make distributions to a Qualified Participant or his or her
beneficiaries in accordance with such Distribution Schedule. The Trustee shall
make provision for the reporting and withholding of any federal, state or local
taxes that may be required to be withheld with respect to the distribution of
benefits pursuant to the terms of any written agreement between the Company and
the Qualified Participant and shall pay amounts withheld to the appropriate
-2-
<PAGE>
taxing authorities or determine that such amounts have been reported, withheld
and paid by the Company.
2.02 The entitlement of a Qualified Participant or his or her beneficiaries
to benefits under this Trust shall be determined by the Company or such party as
it shall designate, and any claim for such benefits shall be considered and
reviewed under the procedures set out in the written agreement between the
Company and such Qualified Participant.
2.03 The Company may distribute benefits directly to the Qualified
Participant (or beneficiaries) as benefits become due under the terms of the
written agreement between the Company and Qualified Participant. The Company
shall notify the Trustee to distribute benefits directly to the Qualified
Participant prior to the time benefits are due. In addition, if the principal
of the Trust, and any dividends or earnings thereon, are insufficient for
payment of benefits, in accordance with the terms of the written agreement
between the Company and the Qualified Participant, the Company shall supplement
the balance of each such payment as it falls due. The Trustee shall notify the
Company if principal and dividends or earnings are insufficient to make the
required distribution of benefits following receipt of the Company's notice to
distribute benefits.
Article 3. INSOLVENCY OF THE COMPANY.
3.01 The Trustee shall cease distributions of benefits to Qualified
Participants and their beneficiaries if the Company becomes "insolvent."
"Insolvent" means, for purposes this Trust Agreement, that the Company is: (a)
unable to pay its debts as the debts become due, or (b) subject to a pending
proceeding as a debtor under the United States Bankruptcy Code.
3.02 At all times during the continuance of this Trust, as provided in
Section 1.04 hereof, the principal and income of the Trust shall be subject to
- ------------
the claims of general creditors of the Company under federal and state law as
set forth below.
(a) The Board of Directors of the Company shall have the duty to
inform the Trustee in writing of the Company's "insolvency". If any person
claiming to be a creditor of the Company alleges in writing to the Trustee that
the Company has become "insolvent", the Trustee shall conduct the appropriate
inquiries to determine whether the Company is "insolvent" and pending such
determination, the Trustee shall discontinue any and all distributions from the
Trust.
(b) Unless the Trustee has actual knowledge of the Company's
"insolvency", or has received notice from the Company or a person claiming to be
a creditor alleging that the Company is "insolvent", the Trustee shall have no
duty to inquire whether the Company
-3-
<PAGE>
is "insolvent". The Trustee may, at all times, rely on such evidence
concerning the Company's solvency.
(c) If, at any time, the Trustee determines that the Company is
"insolvent", the Trustee shall discontinue distributions from the Trust and
shall hold the assets of the Trust for the benefit of the Company's general
creditors. Nothing in this Trust Agreement shall in any way diminish any rights
of a Qualified Participant (or his or her beneficiaries) to pursue their rights
as general creditors of the Company with respect to benefits due under this
Trust or otherwise.
(d) The Trustee shall resume distribution of benefits in accordance
with Article 2 of this Trust Agreement only after the Trustee determines that
---------
the Company is "insolvent" (or is no longer "insolvent").
3.03 Provided that there are sufficient assets, if the Trustee discontinues
the distribution of benefits from the Trust pursuant to Section 3.02 hereof, and
------------
subsequently resumes such distributions, the first distribution following such
discontinuance shall include the aggregate amount of all distributions due to
the Qualified Participant (or his or her beneficiaries) under the terms of the
written agreement between the Company and Qualified Participant for the period
of such discontinuance, less the aggregate amount of any payments or transfers
of common stock made to the Qualified Participant (or his or her beneficiaries)
by the Company in lieu of the payments provided for hereunder during any such
period of discontinuance.
Article 4. PAYMENTS TO COMPANY.
Except as provided in Article 3 hereof, upon the Trust's becoming
---------
irrevocable, the Company shall have no right or power to direct the Trustee to
return to the Company, or to divert to others, any of the Trust assets before
all required distributions of benefits have been made to Qualified Participants
(or their beneficiaries) pursuant to the terms of any written agreements between
the Company and the Qualified Participants.
Article 5. INVESTMENT AUTHORITY.
The Trustee may invest in securities (including stock or rights to acquire
stock) or obligations issued by the Company. All rights associated with assets
of the Trust shall be exercised by the Trustee or the Trustee's delegate, and
shall in no event be exercisable by or rest with the Qualified Participant,
except to the extent any Qualified Participant is appointed Trustee or delegate
of the Trustee.
-4-
<PAGE>
Article 6. DISPOSITION OF INCOME.
During the term of this Trust, all income received by the Trust, net of
expenses and taxes, shall be accumulated and reinvested in the common stock of
the Company.
Article 7. ACCOUNTING BY TRUSTEE.
The Trustee shall keep accurate and detailed records of all investments,
receipts, disbursements, and all other transactions required to be made,
including such specific records as shall be agreed upon in writing between the
Company and the Trustee. Within 60 days following the close of each calendar
year, and within 60 days after the removal or resignation of the Trustee, the
Trustee shall deliver to the Company a written account of his administration of
the Trust during such year or during the period from the close of the last
preceding year to the date of such removal or resignation, setting forth all
investments, receipts, disbursements and other transactions occurring during
such period, including a description of all securities and investments purchased
and sold with the cost or net proceeds of such purchases or sales (accrued
interest paid or receivable being shown separately), and showing all cash,
securities and other property held in the Trust at the end of such year or as of
the date of such removal or resignation, as the case may be.
Article 8. RESPONSIBILITY OF TRUSTEE.
8.01 The Trustee shall act with the care, skill, prudence and
diligence under the circumstances then prevailing that a prudent person acting
in like capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims; provided, however, that the
Trustee shall incur no liability to any person for any action taken pursuant to
a direction, request or approval given by the Company that is contemplated by,
and in conformity with the terms of any written agreement between the Company
and a Qualified Participant or this Trust and is given in writing by the
Company. In the event of a dispute between the Company and a party, the Trustee
may apply to a court of competent jurisdiction to resolve the dispute.
8.02 If the Trustee undertakes or defends any litigation arising in
connection with this Trust, the Company agrees to indemnify the Trustee against
the Trustee's costs, expenses and liabilities (including, without limitation,
attorneys' fees and expenses) relating thereto and to be primarily liable for
such payments. If the Company does not pay such costs, expenses and liabilities
in a reasonably timely manner, the Trustee may obtain payment from the Trust ,
to the extent that the Trust maintains any cash assets as a result of dividends
or other earnings paid on the common stock in Trust.
-5-
<PAGE>
8.03 The Trustee may consult with legal counsel (who may also be counsel
for the Company generally) with respect to any of his duties or obligations
hereunder.
8.04 The Trustee may hire agents, accountants, actuaries, investment
advisors, financial consultants or other professionals to assist him in
performing any of the duties or obligations hereunder.
8.05 The Trustee shall have, without exclusion, all powers conferred
on trustees by applicable law, unless expressly provided otherwise herein.
8.06 Notwithstanding any powers granted to the Trustee pursuant to this
Trust Agreement or pursuant to applicable law, the Trustee shall not have any
power that could give this Trust the objective of carrying on a business and
dividing the gains therefrom, within the meaning of Section 301.7701-2 of the
Procedure and Administrative Regulations promulgated pursuant to the Internal
Revenue Code.
Article 9. COMPENSATION AND EXPENSES OF TRUSTEE.
The Company shall pay all administrative expenses associated with the
implementation, maintenance and operation of the Trust and all Trustee's fees
and expenses.
Article 10. RESIGNATION AND REMOVAL OF TRUSTEE.
10.01 The Trustee may resign at any time by written notice to the
Company, which shall be effective 30 days following receipt of such notice
unless the Company and the Trustee agree otherwise.
10.02 The Trustee may be removed by the Company on 30 days notice or
upon shorter notice accepted by the Trustee.
10.03 If the Trustee resigns or is removed, a successor Trustee shall
be appointed, in accordance with Article 11 hereof, by the effective date of
----------
resignation or removal. If the Trustee resigns or is removed within one year of
a change of control, as defined in Section 13.04, the Trustee shall select a
-------------
successor Trustee in accordance with the provisions of Section 11.02 hereof
-------------
prior to the effective date of the Trustee's resignation or removal. If no such
appointment has been made, the Trustee may apply to a court of competent
jurisdiction for appointment of a successor Trustee or for instructions for
appointment of a successor Trustee. All expenses of the Trustee in connection
with the proceeding shall be paid by the Company.
10.04 Upon resignation or removal of the Trustee and appointment of a
successor Trustee, all assets shall subsequently be transferred to the successor
Trustee. The transfer
-6-
<PAGE>
shall be completed within 30 days after receipt of notice of resignation,
removal or transfer. The Company may extend the time limit for transfer of
assets, however, in the event of resignation of the Trustee.
Article 11. APPOINTMENT OF SUCCESSOR TRUSTEE.
11.01 If the Trustee resigns or is removed, other than within the time
period provided in Section 10.03 hereof, the Company may appoint any third
-------------
party, such as a bank Trust department or other party that may be granted
corporate Trustee powers under state law, as a Successor Trustee to replace the
Trustee upon resignation or removal. The appointment shall be effective when
accepted in writing by the Successor Trustee, who shall have all of the rights
and powers of the former Trustee, including ownership rights in the Trust
assets. The former Trustee shall execute any instrument necessary or reasonably
requested by the Company or the Successor Trustee to evidence the transfer.
11.02 If the Trustee resigns or is removed within the time period
provided in Section 10.03 hereof and selects a Successor Trustee, the Trustee
-------------
may appoint any third party, such as a bank Trust department or other party
that my be granted corporate Trustee powers under state law. The appointment of
a Successor Trustee shall be effective when accepted in writing by the Successor
Trustee. The Successor Trustee shall have all the rights and powers of the
former Trustee, including ownership rights in Trust assets. The former Trustee
shall execute any instrument necessary or reasonably requested by the Successor
Trustee to evidence the transfer.
11.03 The Successor Trustee need not examine the records and acts of
any prior Trustee and may retain or dispose of existing Trust assets, subject to
Articles 7 and 8 hereof. The Successor Trustee shall not be responsible for and
- ----------------
the Company shall indemnify and defend the Successor Trustee from any claim or
liability resulting from any action or inaction of any prior Trustee or from any
other past event, or any condition existing at the time it becomes Successor
Trustee.
Article 12. AMENDMENT OR TERMINATION.
12.01 This Trust Agreement may be amended by a written instrument
executed by the Trustee and the Company. Notwithstanding the foregoing, no such
amendment shall: (a) take effect less than one year following any change of
control; (b) conflict with the terms of any written agreement between the
Company and a Qualified Participant; or (c) shall make the Trust revocable after
it has become irrevocable in accordance with Section 1.02 hereof.
------------
-7-
<PAGE>
12.02 The Trust shall not terminate until all Qualified Participants
and their beneficiaries are no longer entitled to benefits pursuant to the terms
of their written agreements with the Company. Upon termination of the Trust any
assets remaining in the Trust shall be returned to the Company.
12.03 Upon written approval of all Qualified Participants entitled to
distribution of benefits under this Trust, pursuant to the terms of their
written agreements with the Company, the Company may terminate this Trust prior
to the time all distributions have been made. All assets in the Trust at
termination shall be returned to the Company.
Article 13. MISCELLANEOUS.
13.01 Any provision of this Trust Agreement prohibited by law shall be
ineffective to the extent of any such prohibition, without invalidating the
remaining provisions hereof.
13.02 Benefits payable under this Trust Agreement may not be
anticipated, assigned (either at law or in equity), alienated, pledged,
encumbered or subjected to attachment, garnishment, levy, execution or other
legal or equitable process insofar as the Qualified Participant or his or her
beneficiaries are concerned.
13.03 This Trust Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
13.04 For purposes of this Trust, "change of control" shall mean the
purchase or other acquisition by any person, entity or group of persons, within
the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934
("Act"), or any comparable successor provisions, or beneficial ownership within
the meaning of Rule 13d-3 promulgate under the stock or the combined voting
power of the Company's then outstanding voting securities entitled to vote
generally, or the approval by the stockholders of the Company of a
reorganization, merger, or consolidation, in each case, with respect to which
persons who were stockholders of the Company immediately prior to such
reorganization, merger or consolidation do not, immediately thereafter, own more
than 50 percent of the combined voting power entitled to vote generally in the
election of directors of the reorganized, merged or consolidated Company's then
outstanding securities, or a liquidation or dissolution of Company or of the
sale of all or substantially all of the Company's assets.
[SIGNATURES CONTAINED ON THE NEXT PAGE]
-8-
<PAGE>
IN WITNESS WHEREOF, the Company and Trustee have executed this Trust Agreement
as of the date first above written.
TRITON PCS HOLDINGS, INC.
By: /s/ David D. Clark
-------------------------------------
David D. Clark, Senior Vice President
TRUSTEE:
/s/ Michael E. Kalogris
-------------------------------------
Michael E. Kalogris
-9-
<PAGE>
EXHIBIT 10.21
MASTER TOWER SITE LEASE AGREEMENT
---------------------------------
THIS MASTER TOWER SITE LEASE AGREEMENT ("Master Lease") is entered into
this 1st day of May, 1998, by and between SCANA Communications, Inc., a South
Carolina corporation, ("Landlord") and Triton PCS Property Company , L.L.C. , a
Delaware corporation ("Tenant").
WITNESSETH:
This Master Lease is intended to govern the relationship between the
parties with respect to properties which Landlord wishes to lease to Tenant and
which Tenant wishes to lease from Landlord. The parties acknowledge that they
will enter into a Site Lease Supplement ("Site Supplement"), the form of which
is annexed hereto, for each property to which this Master Lease will apply.
In consideration of the terms, provisions, conditions, covenants, and
agreements herein set forth, Landlord does hereby grant unto Tenant a lease to
place a Communications Facility(ies) (defined below), including without
limitation an equipment shelter on the ground and antennas and associated
cabling and mounting supports on the Tower, as specifically defined in each Site
Supplement. The parties hereto agree as follows:
1. SITE SUPPLEMENT.
---------------
Subject to the following terms and conditions, Landlord agrees to lease to
Tenant certain space on Landlord's Property ("Property"). The Property includes
a parcel of land or interest therein ("Land"), a telecommunications tower
located thereon ("Tower"), and all necessary access and utility easements.
Landlord wishes to lease to Tenant, and Tenant wishes to lease from Landlord,
space on the Land and the Tower sufficient to accommodate the Communications
Facility which Tenant desires to construct on the Property. The parties shall
execute a Site Supplement for each transaction governed by this Master Lease.
Each Site Supplement shall define the Landlord, Tenant, Property, Easements,
Tenant's equipment, monthly rent, and other details specific to that particular
transaction. Tenant's use of the Property shall be limited to the portion of
the Property defined in the Site Supplement, together with easements for access
and utilities described and depicted in Exhibit A thereto. Each Site Supplement
shall commence on the date Landlord completes construction.
2. MASTER LEASE TERM AND RENEWAL.
-----------------------------
The term of the Master Lease shall commence on the date that the first Site
Supplement is fully executed by both parties, and shall terminate on the
expiration or termination date of the last outstanding Site Supplement entered
into pursuant hereto.
3. SITE SUPPLEMENT TERM AND RENEWAL.
--------------------------------
The initial term of each Site Supplement shall be five (5) years from the
commencement date of each as specified therein, unless terminated as provided
herein. Tenant shall have the right to continue each Site Supplement for up to
four additional successive renewal terms of five (5) years each. Each Site
Supplement shall automatically be extended for each successive renewal term
unless Tenant notifies Landlord a minimum of one hundred-twenty (120) days prior
to expiration of the then current term. Notwithstanding the expiration of the
Master Lease, its terms and conditions shall continue to apply to each Site
Supplement until the expiration or termination of that Site Supplement. Each
renewal term shall be on the same terms and conditions as set forth in this
Master Lease and the Site Supplement, except that the rent shall be increased by
an amount equal to 15% of the rent in effect during the preceding term or
renewal term.
4. RENT.
----
(a) Tenant shall pay Landlord, as rent, the sum identified for each site
as set forth in each Site Supplement. If the tower is new construction, Rent
shall commence for each Site Supplement after Landlord completes construction or
as may otherwise specifically be provided therein. If the Tower is an existing
Tower,
- --------------------------------------------------------------------------------
Confidential treatment has been requested for portions of this exhibit.
The copy filed herewith omits the information subject to the confidentiality
request. Omissions are designated as *****. A complete version of this exhibit
has been filed separately with the Securities and Exchange Commission.
<PAGE>
Rent shall commence when tenant begins construction or as may otherwise
specifically be provided therein. Rent shall be due monthly in advance, payable
to SCANA Communications, Inc., at Landlord's address specified on the invoice.
Rent shall be adjusted periodically as described in Paragraph 3, Site Supplement
Term and Renewal.
(b) Within 30 days of the receipt of the invoice, Tenant agrees to make
payment in full, without deduction or setoff. Payment shall refer to the invoice
number. Tenant agrees that any restrictive endorsements, releases, or other
statements on or accompanying payments accepted by Landlord shall not be
effective. Delinquent payments shall bear interest at the rate of ***** per
month, or portion thereof, but not to exceed the maximum lawful rate.
(c) Charges under this Master Lease, including all Site Supplements, do
not include taxes. Tenant agrees to pay any sales, use, or other taxes
(exclusive of taxes on Landlord's net income) that may be levied on Landlord in
connection with the Tenant's attachments on the Tower and use of the Property
pursuant to Paragraph 15, unless Tenant has provided Landlord with a valid tax
exemption certificate.
(d) If Tenant disputes the amount of Landlord's invoice, Tenant shall
notify Landlord in writing within sixty (60) days after the invoice date.
Pending resolution of the dispute as outlined in Paragraph 17, Tenant shall pay
all undisputed amounts and Tenant and Landlord shall adhere to all other rights
and obligations under this Master Lease. If the dispute is ultimately resolved
in the Tenant's favor, Landlord shall issue a credit on Tenant's invoice. If the
Site Supplement has expired or terminated, Landlord shall promptly remit a
refund to Tenant.
(e) If a Site Supplement is terminated at any time other than due to
default by Tenant, rent shall be prorated as of the date of termination and all
prepaid rent shall be refunded to Tenant.
5. PERMITTED USE.
-------------
(a) The Property may be used by Tenant only for permitted uses which are
the transmission and reception of radio communication signals and for the
construction, maintenance, repair or replacement of antennas and other Landlord-
approved equipment and related facilities ("Communications Facility(ies)" or
"Communications System(s)"). Unless otherwise specified by Landlord, Tenant
shall obtain, at Tenant's expense, all licenses and permits required for
Tenant's use of the Property from all applicable government and/or regulatory
entities ("Governmental Approvals"). Tenant may (prior to or after the
commencement date of the Site Supplement) obtain a title report, perform
surveys, soils tests, and other engineering procedures on, under and over the
Property, necessary to determine that Tenant's use of the Property will be
compatible with Tenant's engineering specifications, system design, operations,
Government Approvals and Landlord standards. All on-site activities performed
prior to the commencement date of the Site Supplement, such as feasibility
testing and site suitability assurance, may occur only with the prior written
approval of Landlord, unless otherwise specified in writing by the Landlord.
Tenant must provide a certificate of insurance, or evidence of an approved
program of self insurance consistent with the requirements in Paragraph 9, prior
to conducting any on-site activities, such as feasibility testing and site
suitability assurance.
(b) Prior to execution of a Site Supplement, Tenant will examine the
Property. If requested by Landlord, Tenant will conduct a feasibility study at
Tenant's expense and assure its review and approval by Landlord. Tenant will
determine that the Property is suitable for Tenant's Communications Facility and
intended use. Landlord makes no representations that the Property is suitable
for Tenant's facilities and intended use.
6. INTERFERENCE.
------------
(a) Tenant shall not use the Property in any way which materially
interferes with the use of the Property by Landlord, the provision of services
to Landlord's customers, or the use of the Property by other tenants or
licensees of Landlord. Similarly, Landlord shall not use, nor shall Landlord
permit its tenants, licensees, employees, invitees or agents to use any portion
of Landlord's Property in any way which interferes with the operation of Tenant.
- --------------------------------------------------------------------------------
***** Certain information on this page has been omitted and filed
separately with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted portions.
2
<PAGE>
(b) Tenant agrees not to cause any material interference to the radio
operation of any radio transmission or reception equipment located on the
Property which is in place and operational prior to installation of Tenant's
equipment. Landlord agrees not to cause, and not to allow any other Tenant or
licensee to cause, any material interference to the operation of any of Tenant's
radio transmission or reception equipment located on the Property which is in
place and operational prior to installation of Landlords's or Landlord's other
tenant's or licensee's equipment. In the event that one party causes material
interference, the party causing the interference shall have a) 14 days to
alleviate said interference if the interference adversely affects a non-
interfering party operations, or b) 72 hours to alleviate said interference if
the interference is so extreme as to render a non-interfering party's
communications equipment inoperable.
7. IMPROVEMENTS; UTILITIES; ACCESS; INSPECTION.
-------------------------------------------
(a) Upon execution of a Site Supplement, Tenant shall have the right, at
its expense, to construct, maintain, install, relocate and remove improvements,
personal property and Communications Facilities. Landlord's prior consent to the
site plans and specifications for such building and other improvements shall be
required but shall not be unreasonably withheld or delayed and shall be deemed
given as to those items listed in the Site Supplement.
(b) Tenant shall provide in writing the names, addresses and telephone
numbers of all persons who will perform work on behalf of Tenant at the site.
Landlord shall have the right to inspect identification of any of Tenant's
personnel at any time. Landlord shall have the right to refuse access to any
person who refuses to provide identification upon request or whose name does not
appear on the personnel list provided by Tenant. Landlord reserves the right to
refuse admittance to any of Tenant's personnel for good cause shown.
(c) Tenant shall use for construction, maintenance, installation,
relocation and removal only those contractors and/or subcontractors for which
Landlord has given written approval, such approval not to be unreasonably
withheld. Upon written approval of Landlord, Tenant shall have the right to
replace or upgrade antennas or equipment at any time during the term or renewal
term of a Site Supplement. Tenant shall cause all construction to occur lien-
free and in compliance with all applicable laws and ordinances. The antennas,
cabling and tenant-installed equipment and Communications Facility shall remain
the exclusive personal property of the Tenant. Tenant shall have the right to
remove the antennas, cabling and equipment upon termination of a Site
Supplement. All removal work shall be performed at Tenant's expense. All removal
work shall be completed within 180 days of termination of a Site Supplement.
(d) Tenant, at its expense, may use any and all appropriate means of
restricting access to Tenant's equipment upon written approval of Landlord.
(e) Unless otherwise specified by the Landlord, Tenant shall, at Tenant's
expense, keep and maintain the Property and all building and improvements
utilized by Tenant now or hereafter located thereon in reasonable condition and
repair during the term of a Site Supplement. Upon termination of the Site
Supplement, the Property shall be returned to Landlord in good, usable condition
except for normal wear and tear. Fifty percent of the estimated costs incurred
by Landlord to return Property to good, usable condition shall be paid by Tenant
prior to removal of antennas, cabling and other equipment. The remaining actual
costs will be due to Landlord within 30 days of the date of the final invoice
for these costs.
(f) Landlord covenants that it will keep the Tower in good repair as
required by state and federal law. Landlord shall also comply with all rules and
regulations lawfully promulgated by the Federal Communications Commission and
the Federal Aviation Administration with regard to the lighting, marking,
painting of towers or other requirements, as well as local, state and other
federal laws. If Landlord fails to adhere to such requirements, Tenant may
perform the necessary work to bring the Property within compliance, after 30
days written notice to Landlord. The costs thereof shall be payable to Tenant on
demand. Failure of Landlord to pay shall then authorize Tenant to deduct the
amount from the rental payment.
(g) Tenant shall pay any additional utilities charges due to Tenant's use
of the Property. Upon receipt
3
<PAGE>
of Landlord's prior written approval, such approval not to be unreasonably
withheld Tenant shall have the right to install utilities, at Tenant's expense,
and to improve the present utilities on the Property (including, but not limited
to the installation of emergency power generators and air conditioning systems).
Landlord hereby grants an easement for the term and renewal terms of the Site
Supplement, to permanently place any utilities on or to bring utilities across
the Property in order to service the Property, antennas and other equipment,
subject to Landlord's written approval of the design and installation method and
procedures.
(h) As partial consideration for rent paid under each Site Supplement,
Landlord hereby grants Tenant an easement ("Easement") for ingress, egress, and
access (including access described in Paragraph 1) to the Property adequate to
service the Property, antennas and other equipment. Any Easement provided
hereunder shall have the same term and renewal terms as the applicable Site
Supplement.
(i) Landlord and its agents may inspect or observe at any time any work
while in progress or after completion to ascertain whether the work is in
accordance with the specifications and requirements of this Master Lease or
applicable Site Supplement, reasonable Landlord standards, and applicable laws
and regulations. Landlord may require Tenant to correct any faulty work. Such
inspection and requirement for correction shall not relieve Tenant of full
responsibility for the proper performance of the work.
8. TERMINATION.
-----------
Except as otherwise provided herein, this Master Lease or a Site Supplement
may be terminated, without any penalty or further liability as follows:
(a) Upon thirty (30) days' written notice by Landlord if Tenant fails to
cure a default for payment of amounts due under this Master Lease or any Site
Supplement within that 30-day period;
(b) Upon thirty (30) days' written notice by either party in the event the
other party defaults or violates any term or condition of this Master Lease or
the Site Supplement and fails to cure such default within that 30-day period, or
such longer period as may be required to diligently complete a cure commenced
within that 30-day period;
(c) If Tenant, after execution of the Site Supplement does not obtain or
maintain all Governmental Approvals for the Site Supplement as specified in
Paragraph 5(a) above, after having made a good faith effort, then either party
shall, by notice to the other, have the right to cancel all rights and
obligations under the Site Supplement provided Tenant reimburses Landlord for
actual and other preparatory expenses incurred.
(d) Immediately upon written notice if the Property or the antennae,
equipment or Communications Facility is destroyed, damaged or rendered
inoperative through no fault of Tenant, so as, in Tenant's reasonable judgment,
to substantially and adversely affect the effective use of the site. In such
event, all rights and obligations of the parties shall cease as of the date of
the damage, destruction or inoperability and Tenant shall be entitled to any
rent prepaid by Tenant. Provided, however, that Tenant may elect to continue the
affected Site Supplement and all rent shall abate until the Property,
Communications Facility, and/or antennas and other equipment are restored to
working condition.
(e) Upon lawful condemnation of the Property by an entity having the power
of eminent domain. Parties shall pursue their own separate awards in any eminent
domain action.
(f) For the reasons specified in Paragraph 6.
(g) By Tenant, if Tenant is unable to occupy and utilize the Property due
to an action of the FCC, including without limitation, a take back of channels
or change in frequencies. Tenant shall be obligated to pay Landlord for all
actual and other preparatory expenses incurred.
4
<PAGE>
9. INSURANCE AND SUBROGATION.
-------------------------
(a) Prior to work commencing, including feasibility testing and site
suitabililty assurance described in Paragraphs 5(a) and (b) above, Tenant shall
provide proof of insurance, as outlined below, and shall maintain the coverages
specified during the full term of this Master Lease, and any Site Supplement and
for 180 days after its termination for any reason:
Commercial General Liability Insurance in an aggregate amount of
$1,000,000.
Workers' Compensation coverage in the statutory amount.
Employers' Liability Occupational Disease and Bodily Injury,
Combined Single Limit of $1,000,000.
Automobile Liability for Owned and Non owned Autos,
Combined Single Limit of $1,000,000.
All Risk Insurance with Standard Extended Coverage, Replacement Value,
Without Coinsurance Factor for full replacement value of Tenant's
facilities and Tenant's equipment, tools, and personal property
(including Communications Facilities) located on the Property.
(b) Landlord shall be listed as an additional insured on the policy or
policies. Tenant may satisfy this requirement by obtaining appropriate
endorsement to any master policy of liability insurance Tenant may maintain.
(c) In lieu of above, Tenant may provide evidence of an approved program
of self insurance.
(d) Landlord and Tenant hereby mutually release each other (and their
successors or assigns) from liability and waive all rights of recovery against
the other for any loss or damage covered by their respective first party
property insurance policies for all perils insured thereunder. In the event of
such insured loss, neither party's insurance company shall have a subrogated
claim against the other.
(e) Tenant shall require its contractors and subcontractors to carry
workers' compensation insurance and adequate liability insurance in conformity
with the minimum requirements listed above.
10. LIMITED LIABILITY.
-----------------
Tenant agrees to release and hold Landlord harmless from any and all claims
arising from the installation, construction, use, maintenance, repair,
relocation or removal of the antennas and other equipment, except for claims
arising from the negligent acts or willful misconduct of Landlord, its
employees, or agents. Landlord agrees to release and hold Tenant harmless from
any and all claims arising from the installation, construction, use,
maintenance, repair, relocation or removal of the antennas and other equipment,
except for claims arising from the negligent acts or willful misconduct of
Tenant, its employees, or agents.
11. INDEMNIFICATION.
---------------
(a) Each party shall indemnify and hold the other party harmless against
any claim of liability or loss from personal injury or property damage resulting
from or arising out of the indemnifying party's negligent acts or omissions or
willful misconduct, or those of its servants or agents, in connections with the
Property, except to the extent due to the indemnified party's negligent acts or
omissions or those of its servants or agents.
(b) Tenant will compensate Landlord for the full actual loss, damage or
destruction of Landlord's Property that in any way arises from or is related to
Tenant's negligent use of the Property pursuant to this Master Lease and the
Site Supplement or activities undertaken pursuant to this Master Lease or the
Site Supplement (including, without limitation, the installation, construction,
operation, maintenance, repair or removal of Tenant's Communications
Facilities), except to the extent due to the Landlord's negligent acts or
omissions or those of its servants or agent
5
<PAGE>
(c) Landlord will compensate Tenant for the full actual loss, damage, or
destruction of Tenant's property that results from or arises out of Landlord's
negligent acts or omissions or willful misconduct, or those of its servants or
agents, except to the extent due to the Tenant's negligent acts or omissions or
those of its servants or agents.
(d) Without limiting the foregoing, Tenant will indemnify, defend, and
hold harmless Landlord and Landlord's agents and employees, from any and all
claims asserted by customers of Tenant in any way arising out of or in
connection with this Master Lease or the Site Supplements or Tenant's
Communications System, except to the extent arising out of the gross negligence
or willful misconduct of Landlord or Landlord's agents or employees.
(e) Without limiting the foregoing and to the extent not prohibited by
law, Tenant will release, indemnify, defend, and hold Landlord (and its
affiliates and personnel) harmless against all losses, costs (including
reasonable attorneys' fees), damages, expenses, claims, demands, or liabilities
arising out of or caused by, or alleged to have arisen out of or been caused by:
(1) any defect, failure or malfunction of any facilities or materials
furnished by Tenant;
(2) Tenant's use, maintenance, repair, relocation or removal of its
materials or facilities or presence of such on the Property;
(3) any failure by Tenant to satisfy all claims for labor, equipment,
materials and other obligations relating to the performance of
the work under this Master Lease or the Site Supplements.
12. ENVIRONMENTAL LAWS.
------------------
Tenant represents, warrants and agrees that it will conduct its activities
on the Property in compliance with all applicable Environmental Laws, as defined
below. Landlord represents, warrants and agrees that it will conduct its
activities on the Property in compliance with all applicable Environmental Laws.
Landlord shall promptly conduct any investigation and remediation as
required by any Environmental Laws or common law, of all spills or other
releases of Hazardous Substances, as defined below, not caused solely by Tenant,
that have occurred or which may occur on the Property. Landlord reserves the
right to report to the appropriate agency on Tenant's behalf, any release or
spill where reporting is required by law and where such report is not made by
Tenant within the required time frame. Financial responsibility for
investigation and/or remediation activities shall be shared according to fault.
Tenant agrees to defend, indemnify and hold Landlord harmless from and
against any and all claims, causes of action, demands and liability including,
but not limited to, damages, costs, expenses, assessments, penalties, fines,
losses, judgments and attorneys' fees that Landlord may suffer due to the
existence or discovery of any Hazardous Substances and dangerous conditions on
the Property or the migration of any Hazardous Substances (or likelihood of
migration due to the existence of dangerous conditions) to other properties or
release into the environment that relate to or arise from Tenant's activities on
the Property.
Landlord agrees to defend, indemnify and hold Tenant harmless from and
against any and all claims, causes of action, demands and liability including,
but not limited to, damages, costs, expenses, assessments, penalties, fines,
losses, judgments and attorneys' fees that Tenant may suffer due to the
existence or discovery of any Hazardous Substances on the property or the
migration of any Hazardous Substances to other properties or release into the
environment, that relate to or arise from Landlord's activities or the
activities of any third parties prior to or during the term and renewal term of
this Master Lease and each Site Supplement and from all activities on the
Property prior to commencement of this Master Lease and each Site Supplement.
6
<PAGE>
The indemnifications in this section specifically include, but are not
limited to, costs incurred in connection with any investigation of site
conditions or any cleanup, remediation, removal or restoration work required by
any governmental authority.
As used in this Master Lease, "Environmental Laws" mean all federal, state
and local environmental laws, rules, regulations, ordinances, judicial or
administrative decrees, orders, decisions, authorization or permits, including,
but not limited to, the Resource Conservation and Recovery Act, 42 U.S.C. (S)
6901, et seq. , the Clean Air Act, 42 U.S.C. (S) 7401, et seq., the Federal
Water Pollution Control Act, 33 U.S.C. (S) 1251, et seq., the Emergency Planning
and Community Right to Know Act, 42 U.S.C. (S) 1101, et seq., the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. (S) 9601, et
seq., the Toxic Substances Control Act, 15 U.S.C. (S) 2601, et seq., the Oil
Pollution Control Act, 33 U.S.C. (S) 2701, et seq., or any other comparable
local, state or federal statute or ordinance pertaining to the environment or
natural resources and all regulations pertaining thereto.
As used in this Master Lease, "Hazardous Substances" mean any hazardous
substances as defined by the Comprehensive Environmental Response, Compensation
and Liability Act, as amended from time to time; any hazardous waste as defined
by the Resource Conservation and Recovery Act of 1976, as amended from time to
time; any and all material or substance which is or becomes defined as a
hazardous substance, pollutant or contaminant subject to reporting,
investigation or remediation pursuant to any federal, state or local laws or
regulations or order; and any substance which is or becomes regulated by any
federal, state or local governmental authority; any oil, petroleum products and
their by-products.
13. ASSIGNMENT.
----------
This lease shall run with the Property and shall be binding upon and inure
to the benefit of the parties, their respective successors, personal
representatives and assigns.
Landlord agrees that Tenant may assign this Master Lease and any Site
Supplement, and all rights, benefit, liabilities and obligations hereunder, only
to any person or business entity which is licensed by the FCC to operate a
wireless communications business, is a parent or subsidiary of Tenant, controls
or is controlled by or under common control with Tenant, is merged or
consolidated with Tenant or purchases a majority or controlling interest in the
ownership or assets of Tenant. Tenant shall provide written notification of its
intent to assign at least one-hundred and twenty (120) days in advance. Upon
written notification of Tenant to Landlord of any such action and Assignee's
written assumption of all terms and conditions of this Master Lease and all Site
Supplements, Tenant shall be relieved of all future performance, liabilities and
obligations under this Master Lease and any Site Supplement as of the effective
date of the assignment. Tenant may not otherwise assign this Master Lease or any
Site Supplement without Landlord's written consent.
Tenant may not sublet any Property, Antennas or Cables under this Master
Lease or any Site Supplement.
14. QUIET ENJOYMENT, TITLE AND AUTHORITY.
------------------------------------
Landlord covenants and warrants to Tenant that (a) Landlord has full right,
power and authority to execute this Master Lease and each Site Supplement, and
that Tenant, upon the faithful performance of all of the terms, conditions, and
obligations of Tenant contained in this Master Lease and a Site Supplement,
shall peaceably and quietly hold and enjoy the Property upon the terms,
covenants, and conditions set forth in this Master Lease and the Site Supplement
throughout the initial term and renewal terms thereof; (b) it has good and
unencumbered title to the Property free and clear of any liens or mortgages,
except those disclosed to Tenant which will not interfere with Tenant's right to
or use of the Property; and (c) execution and performance of this Master Lease
and each Site Supplement will not violate any laws, ordinances, covenants, or
the provisions of any mortgage, lease, or other agreement binding on Landlord.
7
<PAGE>
15. TAXES.
-----
Tenant shall pay any personal property taxes assessed on, or any portion of
such taxes attributable to the Communications Facilities or Communications
System. Landlord shall pay when due all real property taxes and all other fees
and assessments attributable to the Property. However, Tenant shall pay, as
additional rent, any increase in real property taxes levied against the Property
(excluding any additional taxes that relate to the period prior to the
commencement date of the Site Supplement, i.e., roll-back taxes) which is
directly attributable to Tenant's use of the Property, and Landlord agrees to
furnish proof of such increase to Tenant, upon Tenant's request. Tenant shall
have the right to request the taxing authority to separately assess its
communications facilities and systems.
16. CONFIDENTIALITY.
---------------
The parties shall keep confidential the terms and conditions of this Master
Lease and all Site Supplements, except as reasonably necessary for performance
thereunder and except to the extent disclosure may be required by applicable
laws or regulations, in which latter case, the party required to make such
disclosure shall promptly inform the other party prior to such disclosure to
enable that party to make known any objections it may have to such disclosure.
17. GOVERNING LAW.
-------------
This Master Lease and each Site Supplement and the performance thereof
shall be governed, interpreted, construed and regulated by the laws of the state
where the Property is located.
18. FORCE MAJEURE.
-------------
Except for payment of the monthly rent and other payments due Landlord,
neither party shall have any liability for its delays or its failure in
performance due to: fire, explosion, pest damage, power failures, strikes or
labor disputes except as outlined in Paragraph 8, acts of God, the elements,
war, civil disturbances, acts of civil or military authorities or the public
enemy, inability to secure raw materials, transportation facilities, fuel or
energy shortages, or other causes beyond its reasonable control, whether or not
similar to the foregoing.
19. NON-WAIVER.
----------
No course of dealing, course of performance or failure of either party
strictly to enforce any term, right or condition of this Master Lease or any
Site Supplement shall be construed as a waiver of any term, right or condition.
8
<PAGE>
20. HEADINGS.
--------
All headings contained in this Master Lease and the Site Supplements are
inserted for convenience only and are not intended to affect the meaning or
interpretation of this Master Lease, the Site Supplements or any clause therein.
21. NOTICES.
-------
All notices, requests, demands and other communications hereunder shall be
in writing and shall be deemed given if personally delivered or mailed via
certified mail-return receipt requested, or sent by overnight carrier to the
following addresses:
If to Landlord, to: If to Tenant, to:
SCANA Communications, Inc. Triton PCS Property Company, L.L.C.
440 Knox Abbott Drive 101 Lindenwood Drive
Suite 240 Suite 125
Cayce, South Carolina 29033 Malvern, PA
with a copy to:
General Manager
Triton PCS Property Company, L.L.C.
Suite 101
Charleston, SC 29405
22. MISCELLANEOUS.
-------------
(a) If either party is represented by a real estate broker or any other
agent in this transaction, that party shall be fully responsible for any fee due
such broker and shall hold the other party harmless from any claims for
commission by such broker.
(b) Each party agrees to cooperate with the other in executing any
documents including a Memorandum of Lease, necessary to protect its rights or
use of the Property. The Memorandum of Lease may be recorded, in place of this
Master Lease, by either party.
(c) If any term of this Master Lease is found to be void or invalid, such
invalidity shall not affect the remaining terms of this Master Lease, which
shall continue in full force and effect.
23. ENTIRE AGREEMENT.
----------------
The terms and conditions contained in this Master Lease and each Site
Supplement supersede all prior oral or written understandings between the
parties and constitute the entire agreement between them concerning the subject
matter of this Master Lease and each Site Supplement. There are no
understandings or representations, express or implied, not expressly set forth
in this Master Lease or the Site Supplements. This Master Lease and each Site
Supplement shall not be modified or amended except by a writing signed by the
authorized representatives of the parties.
In any provision of this agreement which the consent of a party is
required, said consent shall not be unreasonably withheld or delayed.
9
<PAGE>
WHEREFORE, we set our hands and seals,
For the Landlord: For the Tenant:
SCANA COMMUNICATIONS, INC. TRITON PCS PROPERTY COMPANY, L.L.C.
By: Triton Management Company, Inc.
its Manager
By:________________________________ By:________________________________
Printed Name: George J. Bullwinkel, Printed Name: Michael C. Mears
Jr.
Title: President Title: President & G.M. - South
Region
Date_______________________________ Date________________________________
Attest:____________________________ Attest:_____________________________
Printed Name:______________________ Printed Name:_______________________
Title:_____________________________ Title:______________________________
(AFFIX CORPORATE SEAL) (AFFIX CORPORATE SEAL)
10
<PAGE>
NOTARIAL ACKNOWLEDGEMENT
STATE OF ______________________________________
COUNTY OF ____________________________________
I, _____________________________________, a notary public for said county
and state, do hereby certify that ____________________, personally appeared
before me this day and acknowledged that (s)he is the _________________ of
Triton PCS Property Company, L.L.C., and that by authority duly given and as the
act of the corporation, the foregoing instrument was signed in its name by
___________________________, its ________________________, and attested by
______________________ as its ______________________.
WITNESS my hand and official stamp or seal, this _____ day of ___________,
199__.
Sworn to and subscribed before me: this _____ day of ________, 1998.
___________________________________
Notary Public for ____________________
My Commission Expires: ______________
(NOTARY SEAL)
11
<PAGE>
NOTARIAL ACKNOWLEDGEMENT
STATE OF ______________________________________
COUNTY OF ____________________________________
I, _____________________________________, a notary public for said county
and state, do hereby certify that George J. Bullwinkel, Jr., personally appeared
before me this day and acknowledged that he is the President of SCANA
Communications, Inc., a South Carolina corporation, and that by authority duly
given and as the act of the corporation, the foregoing instrument was signed in
its name by George J. Bullwinkel, Jr., its President, sealed with its corporate
seal and attested by Lynn Williams as its Secretary.
WITNESS my hand and official stamp or seal, this _____ day of ___________,
199__.
Sworn to and subscribed before me: this _____ day of ________, 1998.
___________________________________
Notary Public for _____________________
My Commission Expires: ______________
(NOTARY SEAL)
12
<PAGE>
SITE SUPPLEMENT
---------------
SITE SUPPLEMENT NUMBER: TR-0001
TENANT'S NAME: Triton PCS Property Company, L.L.C.
SITE NAME: SC Pipeline
COMMENCEMENT DATE:_______________________
This Site Supplement ("Site Supplement") is made and entered into as of the
_____day of ________________ 1998, by and between SCANA Communications, Inc., a
South Carolina corporation ("Landlord") and Triton PCS Property Company, L.L.C.
("Tenant"). This is a Site Supplement as referred to in that certain Master
Tower Site Lease Agreement executed by the parties as of April 13, 1998 ("Master
Lease"). All of the terms and conditions of the Master Lease are incorporated
herein by reference and made a part hereof without the necessity of repeating or
attaching the Master Lease. In the event of any contradiction, modification or
inconsistency between the terms of the Master and this Site Supplement, the
terms of this Site Supplement shall prevail. Capitalized terms used in this
Site Supplement shall have the same meaning ascribed to them in the Master Lease
unless otherwise indicated herein. The annexed exhibits form a material part of
this Site Supplement.
The Site is described as follows:
Property Legal Description: See attached Lease
Antenna Description: (include height on tower, manufacturer and model numbers)
Operating Frequency(ies) and Power output
Transmission Line Description: (include manufacturer and diameter)
Land Requirement:
Tenant is responsible for providing a Plot Plan Sketch outlining its equipment
shelter location to Landlord for review and approval prior to project
commencement.
DESCRIPTION OF LAND AND EASEMENTS
---------------------------------
The Legal Description of the Land is as follows:
The easements for access and utilities granted with the execution of this Site
Supplement, as described in Paragraph 1 of the Master Lease are as follows: See
Attachment A annexed hereto.
Tenant's designated Tower space:
Tenant's designated Land space:
13
<PAGE>
FEES, CHARGES AND NOTICES
-------------------------
The rent referred to in Paragraph 4(a) of the Master Lease is as follows:
During the initial term, Tenant shall pay a monthly rent of *****
Payments shall be made to SCANA Communications, Inc., and shall be sent to the
address indicated on the invoice, or if an address is not indicated on the
invoice, payment shall be sent to the address indicated below or such other
address as may be designated in writing, from time to time by SCANA
Communications, Inc.
SCANA Communications, Inc.
440 Knox Abbott Drive
Suite 240
Cayce, South Carolina 29033.
All notices shall be sent to the address indicated below or such other addresses
as may be designated from time to time by Tenant:
Triton PCS Property Company, L.L.C.
101 Lindenwood Drive
Suite 125
Malvern, PA 19355
With a copy to:
General Manager
Triton PCS Property Company, L.L.C.
4055 Faber Place
Suite 101
Charleston, SC 29405
CONSTRUCTION
------------
The plans and specifications for building, Tower and other improvements as
referred to in Paragraph 7 of the Master Lease are as follows:
Landlord will be responsible for:
. Reviewing and approving Tenant's equipment shelter installation
specifications and drawings.
. Supervising and approving the placement and installation of Tenant's
shelter.
. Reviewing and approving Tenant's list of contractors and subcontractors
needing access to the Site.
. Reviewing and approving Tenant's list of installation and maintenance
personnel needing access to the Site.
. Providing Tenant with facilities to place a lock.
. Providing Tenant with a list of emergency contact numbers.
Tenant will be responsible for:
. Placing its equipment inside the Tower area. Tenant will follow Landlord's
standards.
. Maintaining the coaxial cables from the Tower yard to its equipment pad.
. Obtaining and supplying its facilities with power from the outside utility
company.
. Obtaining all required zoning, construction, local state or federal
permits.
. Furnishing the antennas, mounts, coaxial cable, equipment, and any other
associated equipment necessary to successfully implement this project.
. Providing equipment installation specifications and drawings for review and
approval by Landlord.
- --------------------------------------------------------------------------------
***** Certain information on this page has been omitted and filed
separately with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted portions.
14
<PAGE>
. Performing equipment, antenna and line installation.
. Providing a list of contractors and subcontractors for review and approval
by Landlord. List will include names, addresses and phone numbers.
. Providing a list of installation and maintenance personnel needing access
to the Site for review and approval by Landlord. List will include names,
addresses and phone numbers.
Tenant will have 24 hour, 365 days a year of unescorted access to this Site
barring any reasonable security concerns that may arise during the term.
IN WITNESS WHEREOF, the parties have caused this Site Supplement to be executed
by their authorized representatives on the dates noted below:
WITNESSES: SCANA COMMUNICATIONS, INC.
a South Carolina corporation
___________________________ BY:__________________________________
___________________________ ITS:_________________________________
DATE:________________________________
Attest:
BY:__________________________________
ITS: _______________________________
(AFFIX CORPORATE SEAL)
WITNESSES: TRITON PCS PROPERTY COMPANY, L.L.C.
By: Triton Management Company, Inc.
its manager
BY:__________________________________
ITS: ________________________________
DATE: ______________________________
Attest:
BY:__________________________________
ITS: _______________________________
(AFFIX CORPORATE SEAL)
15
<PAGE>
MEMORANDUM OF AGREEMENT
-----------------------
This Memorandum of Agreement is entered into on this ____ day of
________________, 1998, by and between SCANA Communications, Inc., a South
Carolina corporation, with an office at 440 Knox Abbott Drive, Suite 240, Cayce,
South Carolina 29033, (hereinafter referred to as "Landlord") and Triton PCS
Property Company, L.L.C. with an office at 101 Lindenwood Drive, Suite 125,
Malvern, Pennsylvania 19355 (hereinafter referred to as "Tenant").
1. Pursuant to a Master Tower Site Lease Agreement, Landlord and Tenant
entered into a Site Lease Supplement ("Site Supplement") on the ____ day of
____________ 1998, for the purpose of installing, operating and maintaining a
telecommunications facility and other improvements. All of the foregoing are
set forth in the Site Supplement.
2. The initial term of the Site Supplement is five (5) years commencing
on _________________, 1998, ("Commencement Date"), and terminating on the fifth
anniversary of the Commencement Date with up to four (4) successive five (5)
year options to renew.
3. The Land which is the subject of the Site Supplement and the portion
of the Land being leased to Tenant is described in Attachment A annexed hereto.
IN WITNESS WHEREOF, the parties have executed this Memorandum of Agreement
as of the day and year first above written.
WITNESSES: SCANA COMMUNICATIONS, INC.
a South Carolina corporation
_________________________ BY:_________________________________
_________________________ ITS:_________________________________
Attest:
BY:__________________________________
ITS:_________________________________
WITNESSES: TRITON PCS PROPERTY COMPANY, L.L.C.
By: Triton Management Company, Inc.
its manager
_________________________ BY:__________________________________
_________________________ ITS:_________________________________
Attest:
_________________________ BY:__________________________________
_________________________ ITS:_________________________________
16
<PAGE>
STATE OF SOUTH CAROLINA
COUNTY OF RICHLAND)
PERSONALLY APPEARED before me the undersigned witness and made oath that
s(he) saw the within-named SCANA COMMUNICATIONS, INC. by George J. Bullwinkel,
Jr., its President and Lynn M. Williams its Secretary, sign, seal and as its act
and deed, deliver the within-written instrument and that (s)he with the other
witness named above witnessed the execution thereof.
___________________________________
SWORN to before me this ________
day of __________, 1998.
_____________________________________
Notary Public for South Carolina
My commission expires: ______________
STATE OF _______________________
COUNTY OF _____________________
PERSONALLY APPEARED before me the undersigned witness and made oath that
s(he) saw the within-named _________________________________________________ by
_____________________________________________, its _____________________________
and _______________________________ its ___________________ Secretary, sign,
seal and as its act and deed, deliver the within-written instrument and that
(s)he with the other witness named above witnessed the execution thereof.
___________________________________
SWORN to before me this ________
day of __________, 1998.
____________________________________
Notary Public for __________________
My commission expires: _____________
17
<PAGE>
SCHEDULE "I" TO MASTER SITE AGREEMENT
-------------------------------------
SITE LEASE/ SUBLEASE/LICENSE/SUBLICENSE] AGREEMENT
--------------------------------------------------
THIS SITE [LEASE/SUBLEASE/LICENSE/SUBLICENSE/AGREEMENT (the "Site
Agreement") is made as of the latter signature date hereof (the "Execution
Date"), by and between ______________, a____________________ [CORPORATION]
[LIMITED PARTNERSHIP], its successors and assigns (hereinafter referred to as
"BellSouth") and TRITON PCS PROPERTY COMPANY, L.L.C., a Delaware limited
liability company (hereinafter referred to as "User").
WHEREAS, the parties are party to the Master Site Agreement dated 1998 (the
"MSA");
WHEREAS, the parties desire that except as set forth in this Site
Agreement, the terms and conditions of the MSA shall govern the relationship of
the parties under this Site Agreement;
WHEREAS, BellSouth [IS THE OWNER OF] [AS LESSEE/LICENSEE, LEASED/LICENSED
FROM_______________(THE "MASTER LANDLORD") PURSUANT TO THAT CERTAIN
LEASE/LICENSE AGREEMENT DATED __________19____ (THE "MASTER LEASE/LICENSE")]
(WHICH MASTER LEASE/LICENSE IS ATTACHED HERETO AS EXHIBIT "A-1") AND
INCORPORATED HEREIN BY REFERENCE, SUBJECT TO REDACTION OF FINANCIAL TERMS)
certain real property located in __________, ______________ as more particularly
described on Exhibit "A" attached hereto and incorporated herein by reference.
NOW, THEREFORE, for valuable consideration, the receipt, adequacy and
sufficiency of which are hereby acknowledged by the parties hereto, the parties
hereby agree as follows:
1. MSA and Defined Terms. Unless otherwise defined herein, capitalized
---------------------
terms shall have the meaning set forth in the MSA. The parties agree that
except as otherwise set forth herein, the terms and conditions of the MSA shall
govern the relationship of the parties under this Site Agreement and the MSA is
incorporated herein by reference. In the event of a conflict or inconsistency
between the terms of the MSA and this Site Agreement, the terms of this Site
Agreement shall govern and control.
2. Demise. BellSouth hereby [LEASES/SUBLEASES/LICENSES/SUBLICENSES] to
------
User and User hereby [LEASES/SUBLEASES/LICENSES/SUBLICENSES] from BellSouth the
following:
(a) Tower Space. [Subject to BellSouth or User obtaining the consent
-----------
of the Master Landlord pursuant to Section 5(a) of the MSA, if required by the
Master Lease/License, in BellSouth's sole reasonable opinion,] [t]ower space on
BellSouth's Tower between the _____________(__) foot and _______________(___)
foot level (the "Tower Space"), for the placement of User's antenna array,
platform, cables, brackets, wires and accessories, as more particularly
described on Exhibit "C" attached hereto and incorporated herein by reference
(the "Tower Facilities"); and
(b) Ground Space. [Subject to BellSouth having ground space
------------
adequate to accommodate User's Ground Facilities, as hereinafter defined, and
BellSouth or User obtaining the consent of the Master Landlord pursuant to
Section 5(a) of the MSA, if required by the Master Lease/License, in BellSouth's
sole reasonable opinion,] [ground space containing ______ (_____) [acres/square
feet], as approximately shown on Exhibit "B" attached hereto and incorporated
herein by this reference and which will be more specifically shown on the As-
Built Survey, as defined in Section 10 (vii) of the MSA, delivered by User to
BellSouth in accordance with Section I 0 (vii) of the MSA and which As-Built
Survey shall be attached to and become a part of this Site Agreement as Exhibit
"B" when initialed
<PAGE>
by BellSouth and User in accordance with Section 10 (vii) of the MSA (the
"Ground Space"), for the placement of equipment shelters and cabinets,
telecommunications equipment within such equipment shelters and cabinets,
concrete pads, generators, cables, wires and accessories, as more particularly
described on Exhibit "C" attached hereto and incorporated herein by reference
(the "Ground Facilities"); together with
(c) Ingress and Egress. Subject to the limitations set forth in
------------------
Section 11 of the MSA (1)the non-exclusive right to use the Tower, at locations
mutually agreed upon by User and BellSouth, for the term hereof for ingress,
egress, and access to the Tower Space adequate to service the Tower Facilities
and (ii) if the term "Leased Space" as used herein includes Ground Space, a
non-exclusive easement for the term hereof, for ingress, egress, and access to
the Leased Space across [(AA)] the Property in locations mutually agreed upon in
writing by BellSouth and User [AND (BB) ACROSS THE PROPERTY OF THE MASTER
LANDLORD TO THE EXTENT AND IN THE LOCATIONS THE MASTER LANDLORD GRANTED INGRESS,
EGRESS AND ACCESS EASEMENTS TO BELLSOUTH IN THE MASTER LEASE/LICENSE.]
(d) Utilities, Cable Runs. BellSouth hereby grants to User the
---------------------
non-exclusive right to use the Tower for the term hereof to place any cable runs
on the Tower, at locations mutually agreed upon in writing by BellSouth and
User, in order to service or operate the Facilities, subject to BellSouth's
prior written approval of the design and installation method and procedures,
such approval not to be unreasonably withheld or delayed. [IF THE TERM "LEASED
SPACE" INCLUDES THE GROUND SPACE, BELLSOUTH HEREBY GRANTS TO USER A NON-
EXCLUSIVE EASEMENT FOR THE TERM HEREOF TO PLACE ANY UTILITIES OR CABLE RUNS ON
OR BRING UTILITIES ACROSS THE PROPERTY AND IF THE PROPERTY IS LEASED OR LICENSED
BY BELLSOUTH, THE PROPERTY OF THE MASTER LANDLORD TO THE EXTENT AND IN THE
LOCATIONS THE MASTER LANDLORD GRANTED UTILITY AND CABLE RUN EASEMENTS].
3. Term/Site Commencement Date. Provided [THE APPLICABLE CONTINGENCIES
---------------------------
SET FORTH IN SECTION 5 OF THE MSA HAVE BEEN SATISFIED,] User has paid BellSouth
any required application fee, and the Site Cost Reimbursement Amount of
[______________Dollars (______)], this Site Agreement term shall begin on the
earlier to occur of (i) the date when User commences the installation of its
Facilities on the Tower or (ii) forty-five (45) days from the Execution Date,
unless further extended by the mutual written agreement of BellSouth and User
(the "Site Commencement Date"), and shall continue until midnight of the tenth
(10th ) anniversary of the Site Commencement Date (the "Initial Term"). Within
five (5) business days of User's commencement of the installation of its
Facilities on the Leased Space, User shall provide BellSouth written notice of
the date User commenced installation of its Facilities on the Leased Space in
the form of Exhibit "E" attached hereto. Provided [THE MASTER LEASE/LICENSE
REMAINS IN EFFECT AND HAS NOT EXPIRED OR BEEN TERMINATED, AND] User is not in
default, User shall have the option of extending this Site Agreement for two (2)
additional five (5) year terms (the "Renewal Terms"). Such renewal options shall
be deemed automatically exercised without notice by User to BellSouth unless
User gives BellSouth written notice of its intention not to exercise any such
option at least ninety (90) days prior to the expiration of the then current
term, in which case, the term of the Site Agreement shall expire at the end of
the then current term.
3. Rent/Renewal Terms. In addition to any required application fee and
------------------
the Site Cost Reimbursement Amount, which shall be paid by User upon the
execution and delivery of this Site Agreement, during the first five (5) years
of the Initial Term, User shall pay annual rent of [Nineteen Thousand and No/100
Dollars ($19,000.00)] in equal annual installments in accordance with the MSA.
For the sixth through tenth year of the Initial Term, the annual rent shall be
increased by twenty percent (20%) over the annual rent for the first five (5)
years of the Initial Term. Upon the commencement of each Renewal Term, the
annual rent shall be increased by twenty percent (20%) over the annual rent then
2
<PAGE>
payable for the immediately preceding term. Unless otherwise directed in
writing by BellSouth, User shall forward all rental and other payments required
hereunder to:
BellSouth Personal Communications, Inc.
Attention: Treasury/Accounting Department
3353 Peachtree Road, N.E., Suite 400
Atlanta, GA 30326
Recurring Invoice No. 71302 - ___-______-________
5. Additional Rent. In addition to the rent set forth in Section 4
---------------
hereof, User hereby agrees to pay additional rent to BellSouth for any
additional equipment added to BellSouth's Tower after the installation of the
Tower Facilities set forth in Exhibit "C" hereto. Additional rent shall be
calculated based on a rental amount for each piece of additional equipment.
Such rental amounts are set forth below:
Equipment Rental Amount
--------- -------------
---------------- $------------
---------------- $------------
---------------- $------------
---------------- $------------
6. Hazardous Substances. [BELLSOUTH IS NOT AWARE OF, AND HAS NOT
--------------------
RECEIVED NOTICE OF, THE DISPOSAL, RELEASE OR PRESENCE OF HAZARDOUS SUBSTANCES ON
THE PROPERTY IN VIOLATION OF ANY FEDERAL, STATE OR LOCAL LAW, REGULATION OR
ORDER.]
[7. NATIONAL ENVIRONMENTAL POLICY ACT COMPLIANCE. ADD PROVISION IF
--------------------------------------------
BELLSOUTH HAS NOT COMPLIED OR IS IN THE PROCESS OF COMPLYING WITH NEPA.]
[8/9]. Notice. All notices hereunder shall be deemed validly given if
------
sent by certified mail, return receipt requested, or with a nationally
recognized courier which provides notice of receipt, postage fully prepaid,
addressed as follows, or to such other addresses as may be given from either
party in writing to the other:
BellSouth: [BELLSOUTH CAROLINAS PCS, L.P.]
[c/o]BellSouth Personal Communications, Inc.
3353 Peachtree Road, N.E., Suite 300
Atlanta, GA 30326
Attn: Real Estate Manager
with a copy to:
[BELLSOUTH CAROLINAS PCS, L.P.]
[c/o]BellSouth Personal Communications, Inc.
3353 Peachtree Road, N.E., Suite 400
Atlanta, GA 30326
Attn: Legal Department
3
<PAGE>
User: Triton PCS Property Company, L.L.C.
101 Lindenwood Drive
Malvern, PA 19355
with a copy to:
Kleinbard, Bell & Brecker, LLP
1900 Market Street, Suite 700
Philadelphia, PA 19103
Attn: Jay Goldstein, Esq.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
4
<PAGE>
IN WITNESS WHEREOF, the parties hereto have set their hands as of the
signature date set forth below.
USER:
----
TRITON PCS PROPERTY COMPANY, L.L.C.
a Delaware limited partnership (SEAL)
By: TRITON PCS PROPERTY COMPANY, INC.
a Delaware corporation,
its Manager
By:________________________________
Name:______________________________
Title:_____________________________
Attest:____________________________
Name:______________________________
Title:_____________________________
[AFFIX CORPORATE SEAL]
Signature Date:____________________
STATE OF ________________)
)
COUNTY___________________)
I, a Notary Public for said County and State, do hereby certify that
_____________ personally appeared before me this day and acknowledged that
he/she is Secretary of TRITON MANAGEMENT COMPANY, INC., a corporation and
Manager of TRITON PCS PROPERTY COMPANY L.L.C., a Delaware limited partnership
liability company, and that by authority and as the act of the corporation as
Manager, the foregoing instrument was signed in its name by its _____________
Secretary.
____________________________________
Notary Public, State of_____________
My Commission Expires:______________
[NOTARIAL SEAL]
5
<PAGE>
STATE OF_______________)
)
COUNTY_________________)
I, a Notary Public for said County and State, do hereby certify that
_____________ personally appeared before me this day and acknowledged that
he/she is Secretary of TRITON MANAGEMENT COMPANY, INC., a corporation and
Manager of TRITON PCS PROPERTY COMPANY L.L.C., a Delaware limited partnership
liability company, and that by authority and as the act of the corporation as
Manager, the foregoing instrument was signed in its name by its _______________
President, sealed with its corporate seal, and attested by him/her as its
____________ Secretary.
_________________________________
Notary Public, State of__________
My Commission Expires:___________
[NOTARIAL SEAL]
6
<PAGE>
IN WITNESS WHEREOF, the parties hereto have set their hands as of the
signature date set forth below.
BELLSOUTH:
---------
[NAME OF CORPORATION OR LIMITED PARTNERSHIP HAVING THE FCC
LICENSE]
[____________, LIMITED PARTNERSHIP,]
BY: [NAME OF CORPORATE GENERAL PARTNER],
ITS GENERAL PARTNER
By:_______________________________
Name:_____________________________
Title:____________________________
Attest:___________________________
Name:_____________________________
Title:____________________________
[AFFIX CORPORATE SEAL]
Signature Date:___________________
STATE OF____________________)
)
COUNTY______________________)
I, a Notary Public for said County and State, do hereby certify that
______________ personally appeared before me this day and acknowledged that
he/she is _________________ Secretary of _____________________________ a _____
_________________ and general partner of _____________________________, a
_____________________, and that by authority and as the act of the corporation
as Manager, the foregoing instrument was signed in its name by its Secretary.
_______________________________________________
Notary Public, State of________________________
My Commission Expires:_________________________
[NOTARIAL SEAL]
7
<PAGE>
EXHIBIT "A"
-----------
Site Description
----------------
Site Name: _____________ MSA/RSA/MTA/BTA:__________
Site Number _____________ Site Address:_____________
Latitude: _____________
Longitude: _____________
Legal Description of Property:
- -----------------------------
Legal Description of Access Easement:
- ------------------------------------
Legal Description of Utility Easement:
- -------------------------------------
8
<PAGE>
EXHIBIT "A-1"
-------------
MASTER LEASE/LICENSE AGREEMENT
------------------------------
(Subject to redaction)
9
<PAGE>
EXHIBIT "B"
-----------
USER'S GROUND SPACE
-------------------
10
<PAGE>
EXHIBIT "C"
-----------
USER'S TOWER FACILITIES AND GROUND FACILITIES
---------------------------------------------
[Attach User's Co-Location Application]
11
<PAGE>
EXHIBIT"D"
----------
Certification as to Ground Lease
--------------------------------
[Date]
----
RE: Site Agreement from [BELLSOUTH'S OR USER'S NAME] to [BELLSOUTH OR
-----------------------------------------------------------------
USER] at
--------
-------------------------------, -------------------
Dear ________:
Pursuant to the above referenced lease (the "Lease"), User hereby certifies
unto BellSouth that User has obtained from the Master Landlord, as defined in
the Site Agreement, a lease of a portion of the Master Landlord's property, as
more particularly described in Section 3(a)(ii) of the Site Agreement, for
ground space to accommodate [USER'S] Ground Facilities together with easements
for access, utilities and cables.
Sincerely,
[BellSouth or User]
12
<PAGE>
EXHIBIT "E"
-----------
NOTICE OF INSTALLATION OF USER'S FACILITIES
-------------------------------------------
[DATE]
----
[BellSouth's Name]
[BellSouth's Address]
RE: Site Agreement from BellSouth to [USERL at
------------------------------------------
-------------------, ---------------
Dear ----------:
Pursuant to Section of the above-referenced this letter serves to advise
you that [USER] commenced the installation of its Facilities on the Leased Space
on the above-referenced property on _____________ 19__, which date shall be the
Commencement Date, as defined in the above referenced Site Agreement.
Sincerely,
[User]
13
<PAGE>
SCHEDULE "II" TO MASTER SITE AGREEMENT
--------------------------------------
ENTRY AND TESTING AGREEMENT
This Entry and Testing Agreement ("Agreement") is made as of the ___ day of
_______, 1998, between BELLSOUTH CAROLINAS PCS, L.P., a Delaware limited
partnership, d/b/a BellSouth Mobility DCS ("BellSouth"), and TRITON PCS PROPERTY
COMPANY, L.L.C., a Delaware limited liability company ("Entrant"), concerning
the following described property [leased] [owned] by BellSouth ("Property"):
[insert site address]
BellSouth currently owns and operates a communications tower (the "Tower")
on the Property. BellSouth and Entrant are in the process of negotiating an
agreement whereby Entrant will lease, sublease or license certain portions of
the Tower and the Property. In order for Entrant to determine the viability and
feasibility of the Property as a tower or antenna site, Entrant desires to enter
upon and inspect the Property and/or to locate temporarily communications
equipment on the Property to conduct short term radio propagation tests; and
As an accommodation to Entrant, BellSouth is willing to grant permission to
Entrant, its employees, agents or contractors to enter upon the Property solely
to conduct such investigations, under the terms and conditions stated herein.
In consideration of the mutual covenants and agreements contained herein, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows.
1. BellSouth grants to Entrant, its contractors, agents, employees and
assigns a right of entry and license to enter upon the Property solely to
conduct and perform boundary surveys, Phase I environmental studies, and radio
propagation tests (the "Permitted Activities"). Entrant's entry rights are
specifically limited to the Permitted Activities and to the Property and shall
not include any other activities, including without limitation any construction
activities, on the Property or any other portion of the property surrounding the
Property. Entrant shall be responsible for any and all costs related to the
Permitted Activities, including any temporary installation, operation and
removal of equipment on the Property and the Tower. Any entry or activity on the
Tower by Entrant shall be coordinated in advance with BellSouth and shall be
subject to BellSouth's approval and supervision, at Entrant's cost.
2. Entrant agrees to comply with all local, state and federal laws, rules
and ordinances applicable to the Permitted Activities. Entrant further agrees to
exercise due care in the performance of all Permitted Activities on the
Property, and not to interfere with BellSouth's or any other party's activities
on the Property. Entrant shall promptly repair, at its cost, any damage to the
Property, the Tower, or any other property caused by the acts or omissions of
Entrant, its agents, employees, contractors or subcontractors.
3. Entrant shall indemnify and hold harmless BellSouth, its employees,
agents or contractors, from all claims, actions, damages, liability and expense,
including without limitation attorneys' fees and costs, in connection with
personal injury or property damage arising out of the acts or omissions of
Entrant, its employees, agents or contractors, including without limitation the
Permitted Activities, upon the Property, the Tower, or any other portion of the
property surrounding the Property. This indemnification shall survive the
expiration or termination of this Agreement.
4. Entrant shall maintain, and shall have its contractors and
subcontractors maintain, adequate insurance coverage, as determined by
BellSouth. At BellSouth's request, Entrant agrees to
14
<PAGE>
provide certificates of insurance evidencing such insurance coverage of Entrant,
its contractors, or subcontractors.
5. The term of this Agreement shall be from the Execution Date to the
earlier of (i) forty-five (45)days from the Execution Date or (ii) until
BellSouth and Entrant enter into a lease, sublease or license with respect to
the Property; provided, however, that BellSouth may immediately terminate this
Agreement in the event Entrant breaches any term of this Agreement.
6. In the event this Agreement expires or is terminated without the
existence of a fully executed lease, sublease or license, Entrant will
immediately remove any and all of its equipment from the Property and restore
the Property to its condition existing immediately prior to such entry.
7. This Agreement constitutes the entire understanding between the
parties with respect to the activities contemplated by this Agreement. All prior
agreements or understandings, whether oral or written, are superseded. This
Agreement may be amended only by a written document duly executed by the
parties. This Agreement is governed by the laws of the State wherein the
Property is located.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands and seals
as of the date first above written.
BELLSOUTH:
________________________,
a _______________________
By:______________________
Print Name:______________
Title:___________________
ENTRANT:
TRITON PCS PROPERTY COMPANY, L.L.C.,
a ______________ limited liability company
By: Triton Management Company, Inc. its Manager
__________________________
its Manager
By:______________________
Print Name:______________
Title:___________________
<PAGE>
EXHIBIT 10.22
MASTER SITE AGREEMENT
---------------------
THIS MASTER SITE AGREEMENT (hereinafter referred to as this "MSA"), is made
as of the 15th day of March , 1998 (the "MSA Commencement Date"), by and
---- -----
between BELLSOUTH CAROLINAS PCS, L.P., a Delaware limited partnership, BELLSOUTH
PERSONAL COMMUNICATIONS, INC., a Delaware corporation, each doing business as
BELLSOUTH MOBILITY DCS, and their respective BellSouth Affiliates, successors
and assigns (hereinafter collectively referred to as "BellSouth") and, TRITON
PCS PROPERTY COMPANY L.L.C., a Delaware limited liability company, and its
successors and permitted assigns (hereinafter referred to as the "User").
WHEREAS, BellSouth is the owner of communications towers located on
property either owned, leased or licensed by BellSouth (individually, a "Tower",
collectively, "Towers");
WHEREAS, User is a provider of certain wireless digital communications
services in the United States as such services are more particularly defined in
Section 3 hereinbelow ("User's Wireless Business");
WHEREAS, BellSouth and User desire to enter into this MSA which will
establish the general terms and conditions whereby User will lease, sublease,
license or sublicense, as applicable, from BellSouth space on one or more of
BellSouth's Towers and ground space on BellSouth's land (real property owned,
leased or licensed by BellSouth with respect to each Site (as defined below)
hereinafter the "Property") for the construction of an equipment shelter or
cabinet(s) for the placement of User's communications equipment for operation of
User's Wireless Business;
WHEREAS, BellSouth and User will enter into a Site Agreement in form and
substance substantially similar to Schedule "I" attached hereto and by reference
-----------
made a part hereof (individually, a "Site Agreement"; collectively, "Site
Agreements") which will establish the terms for use of a specific Site.
NOW, THEREFORE, for valuable consideration, the receipt, adequacy and
sufficiency of which are hereby acknowledged by the parties hereto, the parties
hereby agree as follows:
1. MSA. This MSA sets forth the general terms and conditions upon which
---
all Sites, as defined below, shall be leased, subleased, licensed or sublicensed
to User. From time to time during the term hereof, User and BellSouth may
execute Site Agreements in the form attached hereto as Schedule "I" and by
reference made a part hereof. Each Site Agreement shall identify a particular
Site made subject to this MSA and more fully set forth specific terms particular
to that Site. In the event of a conflict or inconsistency between the terms of
this MSA and a Site Agreement, the terms of the Site Agreement shall govern and
control for that Site.
2. Demise. Subject to the following terms and conditions, BellSouth
------
hereby agrees to lease, sublease, license or sublicense, as applicable, to User
certain space on one or more of BellSouth's Towers together with sufficient
space on the Property with easements for access and utilities. User's use of the
Tower and Property shall be limited to the Tower and Property, together with
easements for access and utilities described and depicted in Exhibit "All to
each Site Agreement (the Property, the space upon BellSouth's Tower utilized by
User and any easements providing access and utilities to the Property are
sometimes referred to herein individually as a "Site" or collectively as
"Sites"). With respect to any Sites which User may desire to lease, sublease,
license or sublicense, as applicable, User shall give written notice to
BellSouth at the address provided in Section 27 hereof of such desire. After
receipt of
- --------------------------------------------------------------------------------
Confidential treatment has been requested for portions of this exhibit.
The copy filed herewith omits the information subject to the confidentiality
request. Omissions are designated as *****. A complete version of this exhibit
has been filed separately with the Securities and Exchange Commission.
<PAGE>
written notice from User of such desire to add a Site to this MSA, BellSouth
shall provide User with a Site Application to be completed by User. Upon receipt
by BellSouth of the completed Site Application, together with any application
fee required by BellSouth, BellSouth shall evaluate the feasibility of
utilization of each Site requested by User to be added to this MSA. Except in
extraordinary circumstances, as determined by BellSouth in its discretion, the
application fee generally will not exceed ***** per Site. BellSouth will use
reasonable best efforts to respond promptly to initial requests for a Site
Application and to Site Applications submitted by User. BellSouth may decline
additional Sites for any reason whatsoever. If BellSouth desires to lease or to
license any Site to User, BellSouth shall deliver to User three (3) completed,
unexecuted counterparts of a Site Agreement pertaining to such Site. User shall
have a period of fifteen (15) business days from User's receipt of such Site
Agreement to execute and return same to BellSouth. If User fails to return all
counterparts of the Site Agreement, properly executed and unmodified by User,
together with the Site Cost Reimbursement Amount (as defined herein) set forth
in the Site Agreement, within such fifteen (15) day period such Site Agreement
shall immediately be deemed null and void. Upon receipt of the properly
executed, unmodified counterparts of the Site Agreement, BellSouth will execute
same and return a fully executed original of the Site Agreement to User,
whereupon the Site Agreement shall be deemed to be added to this MSA.
3. Permitted Use. Subject to the terms of this MSA and User's exclusive
-------------
rights to portions of the applicable Tower (which shall not prevent cabling or
access by BellSouth or third parties across User's space on the Tower) under the
Site Agreement for each respective Site, User shall be permitted the non-
exclusive right to install, maintain, operate, service, and subject to
BellSouth's prior written approval, which approval shall not be unreasonably
withheld, conditioned or delayed, modify and replace its communication equipment
as more particularly described on the User's Co-Location Application attached as
Exhibit "C" to each Site Agreement (the "Facilities") at such Site, including
without limitation, BellSouth's Tower, which Facilities shall be utilized for
the transmission and reception of wireless voice and data communications using
digital communications services technology. These shall be the only permissible
uses under this MSA and each Site Agreement, and User specifically acknowledges
that microwave facilities are not permitted uses.
4. Master Lease/License. A Site Agreement shall be subject and
--------------------
subordinate to all of the terms and conditions of the agreement pursuant to
which BellSouth has rights in and to the Property (the "Master Lease/License"),
which are incorporated in the Site Agreement by reference and a copy of which
has been or will be delivered to User and attached to the Site Agreement as
Exhibit "A-1". subject to redaction of the financial terms set forth therein or
as otherwise required by confidentiality and nondisclosure provisions contained
therein. If applicable, BellSouth agrees to provide User with copies of all
amendments to, extensions of and renewal notices given pursuant to the Master
Lease/License, subject to redaction of the financial terms set forth therein or
as otherwise required by confidentiality and non-disclosure provisions contained
therein. BellSouth represents to User that as of the Execution Date of a Site
Agreement neither BellSouth nor BellSouth's Landlord ("Master Landlord") is in
default under the Master Lease/License, or to the best of BellSouth's knowledge
with the passage of time will be in default under the Master Lease/License.
5. Conditions Precedent.
--------------------
(a) Conditions Precedent Based On Consent of Master Landlord. If
--------------------------------------------------------
BellSouth is party to a Master Lease/License for a Site, the Site Agreement for
such Site shall be contingent upon BellSouth and/or User, as applicable, being
able to satisfy one (1) of the following conditions precedent within thirty (30)
days of the Execution Date of the Site Agreement, if required by the Master
Lease/License, in BellSouth's sole reasonable opinion.
- --------------------------------------------------------------------------------
***** Certain information on this page has been omitted and filed
separately with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted portions.
2
<PAGE>
(i) Notice to Master Landlord of [Sublease/License]. If notice
-----------------------------------------------
to the Master Landlord of the sublease, license or sublicense, is required by
the Master Lease/License, in BellSouth's sole reasonable opinion, BellSouth
shall so notify the Master Landlord and shall deliver, upon User's request,
evidence of such notification; or
(ii) Consent of Master Landlord to [Sublease/License] of Tower
---------------------------------------------------------
Space and Ground Space. BellSouth or User, at BellSouth's option, will obtain
- ----------------------
the written consent of Master Landlord to BellSouth's [sublease, license,
sublicense] to User of Tower Space and Ground Space (as such terms are defined
in the Site Agreement), if required by the Master Lease/License, in BellSouth's
sole reasonable opinion;
(iii) Consent of Master Landlord to Sublease A License of Tower
---------------------------------------------------------
Space and Master Landlord Leasing Ground Space to User. BellSouth or User, at
- ------------------------------------------------------
BellSouth's option, will obtain (aa) the written consent of Master Landlord to
BellSouth's [sublease, license, sublicense] to User of Tower Space, if required
by the Master Lease/License, in BellSouth's sole reasonable opinion, and (bb) a
written ground lease from the Master Landlord providing for the [lease/license]
of ground space from the Master Landlord to User for User's Ground Facilities
(as defined in the Site Agreement), upon terms and conditions acceptable to User
in User's sole and absolute discretion.
BellSouth and User shall cooperate with one another in efforts to obtain
the consent of the Master Landlord pursuant to Sections 5(a)(ii) and 5(a)(iii)
hereof.
If BellSouth or User is able to obtain the written consent of the Master
Landlord to BellSouth's sublease, license or sublicense to User of Tower Space
and Ground Space pursuant to Section 5(a)(ii), (aa) BellSouth or User shall
deliver to the other a copy of such written consent, (bb) the condition
precedent to BellSouth leasing Tower Space and Ground Space to User shall be
deemed satisfied, and (cc) the term "Leased Space" as used in the Site Agreement
shall mean Tower Space and Ground Space and the term "Facilities" as used in the
Site Agreement shall mean the Tower Facilities and Ground Facilities.
If BellSouth or User is able to obtain the written consent of Master
Landlord to BellSouth's lease to User of Tower Space (but not to BellSouth's
sublease, license or sublicense to User of the Ground Space) and BellSouth or
User is able to obtain a ground lease from the Master Landlord pursuant to
Section 5(a)(iii) hereof, (aa) BellSouth or User shall deliver to the other a
copy of such written consent, (bb) User shall deliver to BellSouth a copy of the
certification as to the ground lease or license from the Master Landlord to User
in substantially the form of Exhibit D attached to the Site Agreement, (cc) the
condition precedent set forth in Section 5(a)(ii) hereof shall not have been
satisfied but the condition precedent set forth in Section 5(a)(iii) hereof
shall be deemed satisfied, and (dd) the term "Leased Space" as used in the Site
Agreement shall mean Tower Space only and the term "Facilities" as used in the
Site Agreement shall mean Tower Facilities only. If BellSouth elects to obtain
the ground lease described in Section 5(a)(iii), then such ground lease shall be
subject to User's prior approval and User shall be responsible for the payment
of BellSouth's reasonable, documented costs in obtaining the ground lease and of
all rents and other sums due under the ground lease, as and when such sums are
due and payable.
If BellSouth or User is unable to satisfy the condition set forth in
Section 5(a)(ii) or BellSouth or User is unable to satisfy the conditions set
forth in Section 5(a)(iii) within thirty (30) days of the Execution Date of the
Site Agreement, the Site Agreement shall automatically terminate and become null
and void, unless extended in writing by mutual consent of BellSouth and User.
Upon such termination, neither BellSouth nor User shall have any obligations to
the other except for any indemnity obligations,
3
<PAGE>
including without limitation, environmental indemnity and tax obligations,
arising prior to the date of termination.
(b) Conditions Precedent to Site Commencement Date. Each Site
Agreement is further contingent upon User being able to satisfy the following
conditions prior to the Site Commencement Date, as defined in the Site
Agreement:
(i) Approvals. User obtaining, after the Execution Date of the
---------
Site Agreement, all certificates, permits, licenses and other approvals
including zoning approvals that may be required by any federal, state or local
authorities (the "Approvals") to permit User's intended use of the Leased Space.
User covenants to use its best efforts to obtain all such Approvals. BellSouth
shall cooperate, at User's cost, with User in its effort to obtain such
Approvals. In the event that User notifies BellSouth that (aa) any application
for an Approval is rejected, (bb) an Approval is canceled, expires, lapses, or
is otherwise withdrawn or terminated for any reason whatsoever prior to
installation of the Facilities by User, or (cc) any application for Approval is
not likely to be obtained or approved, as determined in User's sole discretion,
the Approvals shall be deemed to not have been obtained by User.
(ii) Radio Frequency Propagation Test. User determining, in
--------------------------------
User's sole discretion, that the results of any radio frequency propagation
tests are satisfactory, such that User is able to use the Leased Space for
User's intended use.
(iii) Utilities and Access. User determining, in User's sole,
--------------------
reasonable discretion, that (aa) telephone and electric utilities are available
at the Leased Space or Tower of sufficient capacity to accommodate User's
Facilities and (bb) ingress and egress is available to and from the Leased Space
and to and from a publicly dedicated road.
(iv) Tower Capacity. User determining in User's sole,
--------------
reasonable discretion based on a Tower analysis satisfying the requirements of
Section 10 (ii) hereof that the Tower is of sufficient capacity to accommodate
the load requirements of User's Facilities.
(v) Title. User determining in User's sole discretion that the
-----
status of title as to the Leased Space and easements granted herein are
acceptable to User.
(vi) Hazardous Substances. User determining in User's sole
--------------------
discretion that the Leased Space and Property are free of all Hazardous
Substances, as defined in Section 15 (b) hereof.
If any one (1) of the conditions set forth above will not be satisfied as
of the Site Commencement Date of the Site Agreement, User shall have the right
to terminate the Site Agreement by giving BellSouth written notice thereof. If
User elects to terminate the Site Agreement, the Site Agreement shall terminate
as of the date BellSouth receives such notice from User and neither BellSouth
nor User shall have any further obligation under this Site Agreement except for
any indemnity obligations in this Agreement and User's obligation to remove its
Facilities from the Property.
(vii) Site Cost Reimbursement Amount. User shall pay a one-time
------------------------------
site cost reimbursement amount ("Site Cost Reimbursement Amount") to BellSouth,
paid by User to BellSouth with the execution and delivery of the Site Agreement
with respect to such Site. Except in certain circumstances, as set out herein,
the Site Cost Reimbursement Amount generally will not exceed ***** per Site.
BellSouth and User acknowledge and agree that the Site Cost Reimbursement Amount
reflects an equitable sharing of the capital costs incurred by BellSouth
- --------------------------------------------------------------------------------
***** Certain information on this page has been omitted and filed
separately with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted portions.
4
<PAGE>
with respect to the construction of the Tower and the ability of User to locate
its Facilities thereon. Consequently, the Site Cost Reimbursement Amount is
independent of and in addition to, and not in substitution or reduction of, all
or any part of the Base Rent specified in such Site Agreement, or the fair
market value of the rent applicable to such Site. The preceding notwithstanding,
in the event that User has not on or before December 31, 1998 (i) executed and
returned fifty (50) or more Site Agreements, (ii)paid any applicable Site Cost
Reimbursement Amount for said fifty (50) or more Sites, (iii) paid the Site
Application fee for said fifty (50) or more Sites, and (iv) paid the first
annual installment of base rent on said fifty (50) or more Sites, BellSouth may
look back to all existing Sites and charge User an additional Site Cost
Reimbursement Amount of ***** per Site. Beginning January 1, 1999, the Site Cost
Reimbursement Amount for each new Site shall be based upon the amount of the
Site Cost Reimbursement Amount referenced above on the December 31, 1998
deadline. In the event User has submitted less than fifty (50) Site
Applications, together with related fees, by December 31, 1998, the Site Cost
Reimbursement Amount shall remain at ***** until User has submitted fifty (50)
or more Site Applications, together with necessary fees, at which point future
Site Cost Reimbursement Amounts shall be *****. In the event User has submitted
fifty (50) or more Site Applications, together with related fees, by December
31, 1998, the Site Cost Reimbursement Amount shall remain at *****. In the event
that User finds it necessary to structurally enhance or otherwise upgrade the
Tower prior to locating on the Tower, any such enhancement or upgrades shall be
subject to BellSouth's prior written approval and the costs which User incurs in
performing said upgrade shall be applied and credited to the Site Cost
Reimbursement Amount for that particular Site.
6. Term.
-----
(a) MSA Term. The MSA term shall begin on the MSA Commencement Date
--------
and shall continue until midnight of the tenth (10th) anniversary of the MSA
Commencement Date, unless terminated earlier in accordance with the terms hereof
(the "Term").
(b) Site Agreement Term and Renewal. The initial term of each Site
-------------------------------
Agreement and any renewal terms are provided in each Site Agreement.
Notwithstanding the expiration of this MSA, the terms and conditions of this MSA
shall continue to apply to each Site Agreement until the Site Agreement Term,
including any renewal terms expires or terminates.
7. Rent.
----
(a) Base Rent. During the Initial Term of any Site Agreement, User
shall pay annual rent in equal annual installments in the amount set forth in
the Site Agreement in advance on or before the delivery of the fully executed
Site Agreement and then on each anniversary date of the Site Commencement Date.
Rent shall be payable by check, and checks shall be made payable to the order of
the BellSouth entity specified in the applicable Site Agreement and shall be
mailed to the address designated in the applicable Site Agreement. In the event
that the Site Agreement is terminated for a reason other than a default by User,
then BellSouth shall reimburse User the pro rata amount of the annual rent
attributable to the Site where the Site Agreement is terminated based on the
balance of the year remaining on the day the Site Agreement is terminated, so
long as User is not in default under this Agreement. In the event that the
initial base rent is paid by User but the Site Agreement does not commence
because of a failure of a condition precedent described in Section 5 or such
other reason as described herein, through no fault of User, BellSouth shall
refund the initial annual payment of base rent.
- --------------------------------------------------------------------------------
***** Certain information on this page has been omitted and filed
separately with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted portions.
5
<PAGE>
(b) Taxes.
-----
(i) Property Taxes. User shall be responsible for the
--------------
reporting and payment when due of any tax directly related to User's ownership
or operation of the Facilities and such reporting and payment shall be made
directly to the appropriate tax authorities.
(ii) Sales Taxes. BellSouth shall be responsible for billing,
-----------
collecting, reporting, and remitting sales taxes directly related to rent
payments received pursuant to this MSA and any Site Agreement, if any. User
shall be responsible for reimbursing BellSouth for all sales taxes billed
related to rent payments received pursuant to this MSA and any Site Agreement,
such reimbursement to be due and payable within thirty (30) days of BellSouth's
delivery to User of a written invoice and copies of paid tax receipts specifying
the payments made by BellSouth.
(c) Site Agreement Renewal Terms. If and when one or more of the
Site Agreement Renewal Terms (as defined in the applicable Site Agreement) are
exercised by the User, upon the commencement of each Renewal Term, the annual
rent for each Renewal Term shall increase by the percent set forth in such Site
Agreement over the annual rent for the immediately preceding term.
(d) Additional Facilities. If, after the installation of the
Facilities, User, with the prior written approval of BellSouth as required by
Section 10 hereof, modifies the Facilities by adding additional equipment to the
Tower which materially increases the size or structural or windload on the Tower
or is in a different location on the Tower than the Facilities such that
additional rent is payable pursuant to Section 10 (vi) hereof, BellSouth and
User acknowledge that the rent for the Site shall be increased by an amount set
forth in the Site Agreement for each piece of additional equipment. If the Site
Agreement is silent on rent for additional equipment, BellSouth and User
acknowledge that the rent for the Site shall be increased by a mutually agreed
upon amount. In the event BellSouth and User cannot agree upon the increased
rent, the increase in rent shall be the fair market rental value for the
additional equipment placed on the Tower, which shall be determined by BellSouth
and User each designating, within five (5) days of the dispute, an independent
NMI appraiser with demonstrated experience appraising similar property and
telecommunication uses and shall be the average of the two appraisals prepared
by the appraisers. Each party shall pay the fees of its appraiser.
8. BellSouth to Locate on User's Towers. As additional consideration for
------------------------------------
BellSouth's agreement to lease, sublease, license or sublicense, as applicable,
the Site to User, User hereby agrees to lease, sublease, license or sublicense,
as applicable, to BellSouth space on User's tower and ground space adjacent to
such tower for the construction and placement of an equipment shelter or cabinet
(such tower and ground space collectively referred to as a "Reciprocal Site")
and shall be evidenced by a site agreement and master site agreement, in
substantially the same form as the Site Agreement for BellSouth's Tower and
Property and this MSA. In the event User refuses to lease, sublease, license or
sublicense, as applicable, a Reciprocal Site to BellSouth, for reasons unrelated
to User's capacity, zoning, permits, licenses and other required approvals, or
environmental issues with respect to such Reciprocal Site, BellSouth may elect
to terminate any existing Site Agreement with respect to a Site in the same
geographic market as the proposed Reciprocal Site refused by User in accordance
with the provisions set forth in Section 20(b) hereof.
9. Relocation of Facilities.
------------------------
(a) With respect to any Site, BellSouth reserves the right to change
the location of User's Facilities upon sixty (60) days written notice to User to
accommodate the communications
6
<PAGE>
equipment (including a change in frequency) of BellSouth. User shall relocate or
remove the Facilities, at BellSouth's expense, within sixty (60) days of receipt
of any such notice by User; provided, however, if the relocated space is
unacceptable to User, in User's sole discretion, User shall have the right to
terminate the Site Agreement upon written notice to BellSouth, which termination
shall be effective the earlier of (i) the date set forth in User's termination
notice, or (ii) two hundred forty (240) days from User's receipt of BellSouth's
relocation notice. Upon such termination, the parties to the Site Agreement
shall be released from all duties, obligations, liabilities and responsibilities
under the Site Agreement except for any indemnity obligations, including without
limitation, environmental indemnity and tax obligations, and User's obligation
to remove the Facilities from the Property. In the event BellSouth needs
additional capacity at a Site for its equipment and there is no space on the
Tower in which to relocate User's Facilities, upon two hundred and forty (240)
days notice, BellSouth may terminate a Site Agreement, and thereafter the Site
Agreement shall be of no further force and effect, and except for any indemnity
obligations, including without limitation, environmental indemnity and tax
obligations, and User's obligation to remove the Facilities from the Property,
and BellSouth's obligation to reimburse User for the book value (to be
determined at the date of termination of the Site Agreement) of any structural
enhancements made by User to such Site, the parties hereto shall be released
from all duties, obligations, liabilities and responsibilities under the Site
Agreement.
(b) In the event of a termination under this Section 9 within the
Initial Term of the terminated Site Agreement, BellSouth shall also reimburse
User a prorata portion of the Site Cost Reimbursement Amount applicable to such
Site Agreement based on a five-year proration of the full Site Cost
Reimbursement Amount. The amount reimbursed by BellSouth shall be equal to the
prorata portion of the Site Cost Reimbursement Amount from the date of
termination to the expiration of the Initial Term. BellSouth shall deliver such
reimbursement to User within thirty (30) days of the termination date of the
Site Agreement.
10. Installation- Modification and Relocation.
-----------------------------------------
During the term of the Site Agreement, including any renewal terms, User
shall have the right, at User's expense, to install, and with BellSouth's prior
written approval, which approval shall not be unreasonably withheld, delayed or
denied, relocate and modify the Facilities on the Site. User's installation,
maintenance, relocation, modification, and removal shall be in compliance with
the following requirements:
(i) Facilities. With regard to a modification or relocation of
----------
the Facilities, User shall provide BellSouth with an updated Exhibit "C" listing
all communications equipment to be located on the Site.
(ii) Tower Analysis. User shall submit to BellSouth a completed
--------------
Tower analysis, prepared by licensed structural engineer approved by BellSouth
(a) describing any and all installations, modifications, or relocations, as the
case may be, of the Facilities on the Tower, (b) including information
demonstrating continued compliance with the Tower manufacturer's warranty
requirements, if delivered to User, current EIA/TIA standards, other legal
requirements for the Tower, and any other information reasonably requested by
BellSouth and (c) demonstrating that the installation, modification, or
relocation, as the case may be, does not exceed the load capacity of the Tower.
The Tower analysis shall be based on all Facilities listed on Exhibit "C"
-----------
regardless of whether User does not intend to initially install all Tower
Facilities. If the Tower is a monopole, User, at User's cost, shall be
responsible for the installation of any platforms and cutting of portals
required to install User's Tower Facilities; provided, however, User shall not
cut any portal in the Tower if the cutting of such portal
7
<PAGE>
would adversely affect the manufacturer's warranty on the Tower, if any, or the
integrity of the Tower. If the Tower is structurally inadequate to accommodate
User's proposed installation, modification or relocation, User, subject to
BellSouth's consent, which consent shall not be unreasonably withheld or
delayed, shall have the right to structurally enhance the Tower to accommodate
User's proposed installation, modification or relocation of User's Tower
Facilities, provided User complies with the following additional requirements:
(1) Plans and Specifications for Structural Enhancement. User
---------------------------------------------------
shall submit to BellSouth all plans and specifications for structurally
enhancing the Tower, the proposed architect, engineer and/or contractor involved
in the structural enhancement, and a structural analysis demonstrating that the
Tower, as structurally enhanced, will accommodate all equipment located on the
Tower at the time of the structural enhancement and the proposed installation,
modification, or relocation of User's Tower Facilities, as the case may be, all
of which shall be approved by BellSouth, which approval shall not be
unreasonably withheld, conditioned or delayed.
(2) Payment of Costs. User shall pay all costs incurred in
----------------
structurally enhancing the Tower including, without limitation, all material
costs, all architectural, engineering and contracting fees, all certificate,
permit, license and approval fees, and all actual, reasonable costs incurred by
BellSouth to review the plans and specifications and structural analysis.
(3) Ownership of Structural Enhancements. Upon completion of
------------------------------------
and payment by User for the structural enhancements, such structural
enhancements shall become the property of BellSouth, and upon request, User
shall promptly provide to BellSouth any bills of sale or documentation
evidencing BellSouth's ownership of said enhancements.
(iii) Insurance. User shall provide BellSouth with insurance
---------
certificates for each Site evidencing that the insurance required by Section 17
of this MSA is in full force and effect including, without limitation, worker's
compensation insurance and the insurance required of User's contractors and
subcontractors.
(iv) Compliance with Laws. User's installation, modification or
--------------------
replacement of the Facilities on the Site and structural enhancement of the
Tower, if any, shall be in compliance with all applicable laws, regulations and
requirements of any federal, state or local authority, including without
limitation, OSHA work practice standards for performing said work. BellSouth, at
no cost to BellSouth, agrees to cooperate with User to obtain such compliance.
(v) Availability of Space. With regard to the relocation of the
---------------------
Facilities, space on the Tower must be available at the levels, and/or space on
the ground must be available at the locations, to which User desires to relocate
and, if consent of the Master Landlord is required to relocate the Ground
Facilities, then such consent must be obtained prior to relocation.
(vi) Additional Rent. User shall pay BellSouth additional rent,
---------------
in an amount determined in accordance with the provisions of Section 7(d)
hereof.
(vii) Plans and Specifications; Contractor. User shall submit to
------------------------------------
BellSouth (i) the plans and specifications, a detailed site plan and any other
construction documents setting forth the proposed construction, installation and
other work to be performed on the Site and Tower and (ii) the names of the
proposed contractors and subcontractors performing any such construction,
installation or other work, all of which shall be approved by BellSouth, such
approval not to be unreasonably withheld,
8
<PAGE>
conditioned or delayed. Following the completion of any installation,
modification or relocation, User shall provide to BellSouth, at User's expense,
updated, as-built drawings, initialed by User, documenting all installed
Facilities on the Site and conforming to the plans and specifications, site
plan, and any other construction documents approved by BellSouth. The as-built
drawings shall include an as-built survey locating the Site to a monument or the
Tower (the "As-Built Survey"). Upon receipt and provided the As-Built Survey
conforms to the plans and specifications, site plan and any other construction
documents approved by BellSouth, BellSouth shall initial the As-Built Survey.
(viii) User shall keep the Site, Tower, Property and Facilities
free from any liens arising from any work performed, materials furnished or
obligations incurred by or at the request of User in accordance with the
provisions of Section 16 (c) hereof, with the sole exception of any liens with
respect to equipment financing obtained by User for such Facilities provided
that such equipment financing liens do not encumber, attach to or affect, in any
manner, BellSouth's or the Master Landlord's right, title or interest in and to
all or any part of the Towers or the Property. User may collaterally assign this
Agreement to its lender so long as (i) User is not in default under this
Agreement, (ii) the lender agrees to attom to and assume this Agreement in the
event that it takes possession of the sites, (iii) such assignment shall not
attach or affect, in any manner, BellSouth's or the Master Landlord's right,
title or interest in or to all or any part of the Tower or the Property, and
(iv) User shall remain liable under this Agreement.
(ix) Pre-construction Meeting; Other Construction Meetings.
-----------------------------------------------------
Prior tocommencing any installation and/or construction, a duly authorized
representative of User shall meet with a duly authorized representative of
BellSouth at the Tower site to mutually approve the construction methods and
procedures, such approval not to be unreasonably withheld, conditioned or
delayed by either party. BellSouth and User agree to cooperate with one another
in scheduling such pre-construction meeting. In addition, BellSouth and User
will meet during and upon substantial completion of construction to mutually
approve grounding and punch-list items, respectively, and BellSouth and User
agree to cooperate with one another in scheduling such meetings.
11. Ingress and Egress.
-------------------
(a) Upon the Execution Date of a Site Agreement, BellSouth hereby
grants to User, subject to the limitations set forth herein or in the applicable
Site Agreement, (i) the non-exclusive right to use the Tower, at locations
mutually agreed upon by User and BellSouth, for the term hereof for ingress,
egress, and access to the Tower Space adequate to service the Tower Facilities
and (ii) if the term "Leased Space" as used in the Site Agreement includes
Ground Space, a non-exclusive easement for the ten-n hereof, for ingress,
egress, and access to the Leased Space, on a twenty-four (24) hours per day,
seven (7) days per week basis, across (aa) the Property in locations mutually
agreed upon by BellSouth and User and (bb) if the Property is leased or licensed
by BellSouth, across the property of the Master Landlord to the extent and in
the locations of the Master Landlord-granted ingress, egress and access
easements to BellSouth in the Master Lease/License. User or User's qualified,
insured contractors under User's direct supervision shall have access to the
Tower upon twenty-four (24) hours notice to BellSouth, which access shall be
subject to the accompaniment, at BellSouth's option, of BellSouth's field
personnel to provide an escort and/or supervision, and User shall reimburse
BellSouth for BellSouth's actual, reasonable costs related thereto within thirty
(30) days of BellSouth's delivery to User of a written invoice for such costs.
The foregoing notwithstanding, User shall have access to the Leased Space and
User's Facilities immediately and without notice in the event of an emergency,
and User shall notify BellSouth as soon as practicable of User's access during
such emergency. Other security measures required for a particular Site may be
set forth in the Site Agreement.
9
<PAGE>
(b) Prior to the Execution Date of a Site Agreement, User may have
access to a Property and the Tower situated thereon only upon the execution and
delivery by BellSouth and User of an entry and testing agreement in form and
substance substantially similar to Schedule "II" attached hereto and by
reference made a part hereof (an "Entry and Testing Agreement") which will
establish the terms under which User may access the Property and Tower for the
"Permitted Activities," as defined in the applicable Entry and Testing
Agreement.
12. Utilities, Cable Runs. Upon execution of a Site Agreement, BellSouth
---------------------
hereby grants to User the non-exclusive right to use the Tower for the term
hereof to place any cable runs on the Tower, at locations mutually agreed upon
in writing by BellSouth and User, in order to service or operate the Facilities,
subject to BellSouth's prior written approval of the design and installation
method and procedures, such approval not to be unreasonably withheld,
conditioned or delayed. If the term "Leased Space" as used in the Site Agreement
includes the Ground Space, upon execution of the Site Agreement, BellSouth
hereby grants to User a non-exclusive easement for the term hereof to place any
utilities or cable runs on or bring utilities across the Property and if the
Property is leased or licensed by BellSouth, the property of the Master Landlord
to the extent and in the locations the Master Landlord granted utility and cable
run easements. User shall pay the cost of all utility service necessary to
install, maintain and operate the Facilities. Where practicable, User shall
install a separate meter for User's use. If installation of a meter is not
practicable, the parties shall prorate such charges based on approximate actual
use within thirty (30) days of receipt by BellSouth of any invoice from an
applicable utility company. User shall obtain and pay the cost of telephone
connections. Installation of telephone service shall be in compliance with the
procedures for installation and maintenance of Facilities set forth herein.
13. User's Covenants. User covenants that from the Execution Date of a
----------------
Site Agreement, that the Facilities, and all installation, operation,
modification, relocation and maintenance associated therewith, will:
(a) In no way damage BellSouth's Tower, Property, any other structure
or accessories thereto, any Prior User's, as defined below, equipment or
facilities or any Subsequent User's, as defined below, equipment or facilities,
normal wear and tear excepted. If damage, other than normal wear and tear,
occurs and such damage is caused by User, or User's employees, agents,
contractors, or subcontractors, then User shall be liable for repair or
reimbursement of repair for said damages;
(b) Not interfere with BellSouth's operation on the Tower or the
operations of any Prior User (as defined herein). For purposes hereof, a "Prior
User" shall mean any other user of the Tower that has submitted to BellSouth a
site application in good faith prior to the submission of User's Site
Application for such Tower, which site application serves as the basis for a
written agreement for the use of the Tower by such user. In the event BellSouth
determines, in its sole discretion based on standard and accepted engineering
practices, that User's Facilities are interfering with the operation of
BellSouth's or a Prior User's equipment, authorized frequency spectrum or signal
strength, User shall, within forty-eight (48) hours of notification, take all
steps necessary to eliminate the interference, with the exception of ceasing
User's operations. If User cannot eliminate or resolve such interference within
the forty-eight (48) hour period, BellSouth shall have the right to require that
User turn off its Facilities and only turn on its Facilities during off-peak
hours specified by BellSouth in order to test whether such interference
continues or it has been satisfactorily eliminated. In the event that User is
unable to resolve or eliminate, to the satisfaction of BellSouth, such
interference within thirty (30) days from the initial notification of such
interference, User will immediately remove or cease operations of the
objectionable Facilities and BellSouth shall have the right to terminate the
applicable Site Agreement. User shall not on any Site interfere with BellSouth's
use of the Site, the provision of services to BellSouth's customers,
10
<PAGE>
or the use of the Site by other Prior Users. Such interference shall be deemed
a material breach of the Site
(c) Not interfere with the maintenance of BellSouth's Tower and the
Tower lighting system;
(d) Keep the Facilities in a state of repair acceptable to BellSouth
in BellSouth's reasonable discretion;
(e) Identify the Facilities with metal tags fastened securely to its
bracket on the Tower and to each transmission line;
(f) Comply with all applicable rules and regulations of the Federal
Communications Commission ("FCC") and all federal, state and local laws
governing use of the Facilities on the Site;
(g) Comply with all applicable laws and ordinances and promptly
discharge or bond off any lien for labor or material within thirty (30) days of
filing same;
(h) Within thirty (30) days after the expiration or termination of a
Site Agreement, remove all Facilities from the Property and restore the Tower
and the Site to its original condition, normal wear and tear excepted. In the
event User has not removed the Facilities at the time of expiration or
termination of the Site Agreement, User shall pay rent at the then existing
monthly rate or on the existing monthly pro-rata basis if based upon a longer
payment term until such time as the removal of the Facilities is completed. In
the event User does not remove its Facilities within thirty (30) days after the
expiration or termination of the Site Agreement, BellSouth shall have the right
to remove and store the Facilities, at User's sole expense, and User shall
reimburse BellSouth for such expenses upon demand. If BellSouth removes the
Facilities, BellSouth shall not be responsible for any damage to the Facilities
during the removal and storage thereof unless caused by the gross negligence of
BellSouth. Notwithstanding the foregoing, except as may be required under any
lease or license agreement pursuant to which BellSouth has rights in and to the
Property, User shall not be required to remove any concrete pads upon which
User's equipment shelters or cabinets may have been located upon the expiration
or termination of a Site Agreement;
(i) Upon the completion of the initial installation of the Facilities
on the Site, within thirty (30)days of the completion of the relocation of the
Facilities or installation of additional Facilities on the Site and, for any
year in which User has performed a site audit on the Site or the Facilities or
User's operations at the Site have changed or been modified, by December I of
each year throughout the term of the Site Agreement, User shall provide
BellSouth with the number of batteries, battery model numbers, battery
manufacturers, the number of cells in each battery and the amount of sulfuric
acid in User's batteries on the Site in order for BellSouth or if, the property
is leased or licensed by BellSouth, the Master Landlord, to file such
information with the Environmental Protection Agency ("EPA") and any state and
local authorities as required by applicable law. Further, within thirty (30)
days of User's receipt of a written request from BellSouth, User will provide
BellSouth with any other information and copies of documents relating to the
Facilities located on the Site which BellSouth or Master Landlord may be
required to file with the FCC, EPA or any other governmental agencies. User
agrees to indemnify and hold BellSouth hardness from any liabilities resulting
from any inaccuracies in such information or documentation delivered by User to
BellSouth or User's failure to provide BellSouth with such information or
documentation in accordance with the provisions of this Section 13(i);
11
<PAGE>
(j) Be coordinated through BellSouth and User shall cooperate with
BellSouth.
(k) It is recognized that certain construction, such as the erection
of an antenna support structure, can have an effect on a given AM Signal Array
within certain parameters. This issue is addressed in Part 22 of the FCC Rules
and Regulations. A statement of this policy regarding structures erected or
modified by Commission Licensees in the vicinity of broadcast AM Stations is
found in the FCC Report No. CL-90-40, "Re-Publication of Standard Broadcast Re-
Radiation and Tower Construction Authorized Under Part 22 of the Rules." This
policy states that "Licensees and Permitees planning to construct or modify a
tower within 2 miles of a directional AM array or within .5 miles of a non-
directional AM tower should take certain precautions..." to protect the array of
said AM Station(s).
BellSouth has constructed its Towers in compliance with the rules and
regulations of the FCC. By User's collocation on any BellSouth Tower, User
accepts full responsibility (including financial responsibility) to take any and
all measures to comply with the FCC mandate as it pertains to modifications of
existing towers. After this mandate has been satisfied, all documentation to
substantiate compliance will be forwarded to BellSouth for records maintenance.
In the event that the applicable Tower at any Site was fitted with a
detuning apparatus to protect the array of a given AM Station, User will be
responsible for following the procedure set forth below to ensure that the Tower
remains in compliance:
Prior to actual collocation on the existing BellSouth Tower, a
certified letter will be sent from User to the AM station(s) in question
advising said station(s) of the intent to collocate on the BellSouth
existing Tower. This document will reference that BellSouth has detuned
the structure with the installation of a detuning apparatus; furthermore,
the Tower will not be increasing in electrical height and therefore this
collocation will cause no further perturbation to the AM Signal. A copy of
this letter will be furnished to BellSouth for record purposes. After the
collocation has been completed, User will ensure the proper working
condition of the detuning apparatus by retaining the appropriate BellSouth
detuning consultant to take proximity measurements of the Tower to adjust
said apparatus to include the new antenna. This course of action is
necessary because the detuning apparatus will need to be rendered inert
during the actual installation of any additional antennas to the structure.
Any costs involved in following this procedure will be the responsibility
of User.
If, due to User's collocation, it becomes necessary to modify the actual
height of the Tower, it will be the responsibility of User to retain a detuning
consultant and perform a partial proof of performance report and/or
install/modify detuning apparatus to ensure the integrity of a given AM Signal.
14. BellSouth's Covenants. BellSouth covenants that during the term of a
Site Agreement it shall:
(a) Maintain the Tower and surrounding area in a safe condition;
(b) Except as otherwise set forth in this MSA, take no action which
would adversely affect the User's proposed use of the Site;
(c) Upon User's payment of rent and performance of its covenants, but
subject to the terms of any Master Lease/License pursuant to which BellSouth has
rights in and to the Property, and
12
<PAGE>
subject to any prior lien or encumbrance on the Property, ensure User's quiet
use and enjoyment of the Site;
(d) Comply with all applicable rules and regulations of the FCC, the
FAA, and all federal, state and local laws governing the Tower and Property;
(e) Not permit any Subsequent User (as defined herein) to interfere
with the operation of User's equipment, authorized frequency spectrum, signal
strength or Facilities. For purposes hereof, a "Subsequent User" shall mean any
other user of the Tower that submits to BellSouth a site application for the use
of such Tower after the submission of User's Site Application for such Tower.
In the event BellSouth determines, in its sole discretion based on standard and
accepted engineering practices, that the Subsequent User is interfering with the
operation of User's equipment, authorized frequency spectrum, signal strength or
Facilities, BellSouth shall, within forty-eight (48) hours of notification, take
all steps necessary to eliminate the interference, with the exception of ceasing
the Subsequent User's operations. If the Subsequent User cannot eliminate or
resolve such interference within the forty-eight (48) hour period, BellSouth
shall take all steps necessary to require that the Subsequent User turn off its
facilities and only turn on its facilities during off-peak hours specified by
BellSouth in order to test whether such interference continues or it has been
satisfactorily eliminated. In the event that the Subsequent User is unable to
resolve or eliminate, to the satisfaction of BellSouth, such interference within
thirty (30) days from the initial notification of such interference, the
Subsequent User will immediately remove or cease operations of the objectionable
facilities. Notwithstanding the foregoing, if the Subsequent User is a
governmental entity, BellSouth shall have the right to give the governmental
entity five (5) business days notice prior to BellSouth being required to take
any actions required by this Section 14(e) to cure such interference. BellSouth
shall give such governmental entity written notice of the interference within
two (2) business days of BellSouth's determination that such action is
reasonably necessary. BellSouth's notice to the governmental entity shall be
deemed given on the day it is delivered by hand or on the day it is deposited
with an overnight courier or the United States mail;
(f) Not permit any Prior User or Subsequent User to damage User's
Facilities or the Site, normal wear and tear excepted. If damage by BellSouth,
a Prior User, or Subsequent User, other than normal wear and tear, occurs to
User's Facilities or the Site, then BellSouth, such Prior User, or Subsequent
User, shall be liable for repair or reimbursement of repair for such damages
caused by such party;
(g) Use reasonable efforts not to violate or breach any term of the
Master Lease/License giving the Master Landlord the right, with the passage of
time and/or giving of notice, to terminate the Master Lease/License; deliver to
User copies of every notice of default, non-renewal or nonconformance received
from Master Landlord immediately upon receipt thereof by BellSouth, and User
shall have the right, but not the obligation, to cure any such defaults of
BellSouth within the periods afforded BellSouth under the Master Lease;
(h) Provide the Master Landlord with the information necessary to
enable the Master Landlord to comply with the reporting requirements of the EPA
or any other governmental agency; provided, however, BellSouth shall have no
obligation to provide the Master Landlord with information regarding the User's
Facilities if User has not provided BellSouth with such information in
accordance with the provisions of Section 13(i) hereof.
13
<PAGE>
15. Compliance with Laws.
--------------------
(a) FCC and FAA Compliance. BellSouth acknowledges that it is aware
of its obligations under Section 303 of the Communications Act of 1934 (47
U.S.C. 303), as amended, to maintain the painting and illumination of Towers as
prescribed by the FCC. BellSouth further acknowledges that it is aware that it
is subject to forfeitures assessed by the FCC for violations of such rules and
requirements. BellSouth further acknowledges that it, and not User, shall be
responsible for compliance with all Tower or building marking and lighting
requirements which may be required by the Federal Aviation Administration
("FAA") or the FCC. BellSouth shall indemnify and hold harmless User from any
fines or other liabilities caused by BellSouth's failure to comply with such
requirements. Further, should User be cited by either the FCC or FAA because a
Tower is not in compliance within the time frame allowed by the citing agency,
User may terminate the Site Agreement for such Tower immediately upon notice to
BellSouth, or, at User's option, cause the Tower to comply with FAA or FCC
requirements and BellSouth shall be responsible for reimbursing User for its
actual, reasonable costs incurred to bring the Tower into compliance with FAA or
FCC requirements. Notwithstanding the foregoing, if FAA or FCC compliance
requires the removal and/or relocation of the Tower, User's sole remedy shall be
to terminate the Site Agreement for such Tower. Upon such termination, the
parties to the Site Agreement shall be released from all duties, obligations,
liabilities and responsibilities under the Site Agreement except for any
indemnity obligations, including without limitation, environmental indemnity and
tax obligations, and User's obligation to remove the Facilities from the
Property.
(b) Hazardous Substances. BellSouth and User agree that they will not
use, store, dispose, or release any Hazardous Substances on the Property in
violation of any applicable federal, state or local law, regulation, or order.
"Hazardous Substances" means any hazardous material or substance which is or
becomes defined as a hazardous substance, pollutant or contaminant subject to
reporting, investigation or remediation pursuant to any federal, state or local
law, regulation or order; and any substance which is or becomes regulated by any
federal, state or local governmental authority; and any oil, petroleum products
and their by-products. BellSouth and User acknowledge that User, BellSouth,
Prior Users and Subsequent Users may each use diesel fuel and batteries in
appropriate small quantities from time to time to operate emergency back-up
generators provided that the transportation, delivery, storage, use and disposal
by User, BellSouth, a Prior User, or a Subsequent User, as the case may be, is
in compliance with all federal, state and local laws, regulations and orders.
BellSouth agrees to indemnify and save harmless the User against any and all
claims, liabilities, demands, causes of action, losses, damages, orders,
judgments, penalties, clean-up costs, costs and expenses including, without
limitation, attorneys fees and costs, arising from BellSouth's
misrepresentation, breach of warranty or breach of agreement contained in this
Section 15(b). User agrees to indemnify and save harmless BellSouth against any
and all claims, liabilities, demands, causes of action, losses, damages, orders,
judgments, penalties, clean-up costs, costs and expenses including, without
limitation, attorneys fees and costs arising from User's misrepresentation,
breach of warranty or breach of agreement, contained in this Section 15(b). The
obligations of BellSouth and User to indemnify the other pursuant to this
Section 15(b) shall survive the termination or expiration of this MSA and each
Site Agreement.
(c) Phase I - Environmental Site Assessment. After the execution and
---------------------------------------
delivery by BellSouth and User of an Entry and Testing Agreement for a Site User
may perform a Phase I - environmental site assessment on the Property pertaining
to such Site provided such Phase I - environmental site assessment does not
involve any subsurface soils testing and further provided that User provides
BellSouth with a complete written copy of the Phase I - environmental site
assessment within ten (10) days of completion at no expense to BellSouth. Only
with BellSouth's prior written
14
<PAGE>
consent and subject to BellSouth's supervision may User perform a Phase 11 -
environmental site assessment on the Property.
(d) National Environmental Policy Act Compliance. Upon execution of a
--------------------------------------------
Site Agreement, and except as provided in a Site Agreement, BellSouth represents
that the Tower and Property comply with the applicable provisions of the
National Environmental Policy Act, 47 C.F.R. Section 1.1301 et seq. ('NEPA').
BellSouth acknowledges that it, and not the User, shall be responsible for
compliance with all applicable provisions of NEPA. BellSouth shall indemnify
and hold harmless User from any fines or other liabilities caused by BellSouth's
failure to comply with NEPA. In no event shall BellSouth be responsible to User
for lost profits, market share or consequential damages. Further, should
BellSouth be cited for noncompliance with NEPA and fail to bring the Tower
and/or Property into compliance, User, in addition to any and all other remedies
available to User at law or in equity, may terminate this Site Agreement
immediately upon written notice to BellSouth, or, at User's option, cause the
Tower to comply with NEPA and BellSouth shall be responsible for reimbursing
User for its actual, reasonable costs incurred to bring the Tower into
compliance with NEPA requirements. Notwithstanding the foregoing, if NEPA
compliance requires the removal and/or relocation of the Tower, User's sole
remedy shall be to terminate the Site Agreement for such Tower. Upon such
termination, the parties hereto shall be released from all duties, obligations,
liabilities and responsibilities under this Site Agreement except for any
indemnity obligations, including without limitation, environmental indemnity and
tax obligations, and User's obligation to remove the Facilities from the
Property.
(e) User acknowledges and understands that BellSouth has installed or
will install certain signage and/or physical barriers pertaining to radio
frequency exposure from BellSouth's transmitter and other equipment. User shall
instruct all of its personnel and its contractors performing work at the Site to
read carefully all such signage, to follow the instruction provided in such
signage, and to honor all physical barriers. In no event shall User's personnel
or contractors tamper with any such signage or barriers. User shall be
responsible for placement of signage or physical barriers at or near its
facilities at the Site in order to comply with applicable FCC radio frequency
exposure guidelines. BellSouth agrees that it shall cooperate with User in
these efforts and that BellSouth shall instruct its personnel and contractors
performing work at the Site to read carefully all such signage, to follow the
instructions provided in such signage, and to honor all physical barriers. In
no event shall BellSouth's personnel or contractors tamper with any such signage
or barriers. BellSouth and User shall cooperate in good faith to minimize any
confusion or unnecessary duplication that could result from similar signage
being posted respecting the other carrier's transmission equipment (if any) at
or near the Site.
16. Assignment or Subletting; No Liens.
----------------------------------
(a) Assignment by User. User shall not assign, convey, or transfer
its interest in this MSA or any Site Agreement without first obtaining
BellSouth's written approval, which approval may not be unreasonably withheld,
conditioned, or delayed. User is not permitted to sublease or to license its
interest in this MSA or any Site Agreement. Notwithstanding the foregoing, User
has the right, without the necessity of obtaining BellSouth's consent, to assign
this MSA or any Site Agreement to a User Affiliate (as defined herein), provided
that User notifies BellSouth in writing of such assignment. For purposes
hereof, "User Affiliate" shall mean any entity which controls, is controlled by,
or is under common control with User or Triton PCS Holding Company, L.L.C., a
Delaware limited liability company (collectively "Triton"), to any entity
resulting from the merger or consolidation of Triton, or to any person or entity
which acquires substantially all of the assets of Triton, provided that such
assignee
15
<PAGE>
assumes in full all of the obligations of User under this MSA and the Site
Agreements that may be assigned.
(b) Assignment by BellSouth. BellSouth shall have the right to assign
-----------------------
this MSA or any Site Agreement to a BellSouth Affiliate (as defined herein) or
an assignee who purchases an MSA, RSA, BTA or MTA, as defined by the FCC,
without User's prior approval, and shall notify User within a reasonable time of
any such assignment. For purposes of this MSA and the Site Agreements,
"BellSouth Affiliate" shall mean any entity which controls, is controlled by, or
is under common control with BellSouth Carolinas PCS, L.P. ("BSCP") or BellSouth
Personal Communications, Inc. ("BPCI"), to any entity resulting from the merger
or consolidation of BSCP or BPCI, or to any person or entity which acquires
substantially all of the assets of BSCP or BPCI, provided that such assignee
assumes in full all of the obligations of BellSouth, under this MSA and the Site
Agreements that may be assigned.
(c) Liens. Except as provided in Section 10 (viii) hereof, User shall
-----
keep the Property, the Tower, the Site and the Facilities free from any liens
arising from any work performed, materials furnished or obligations incurred by
or at the request of User. All persons either contracting with User or
furnishing or rendering labor and materials to User shall be notified in writing
by User that they must look only to User for payment for any labor or materials.
If any lien is filed against the Property, the Tower, the Site or the Facilities
as a result of the acts or omissions of User, its employees, agents or
contractors or subcontractors, User shall discharge it or bond it off within
thirty (30) days after User learns that the lien has been filed.
17. Insurance: Risk of Loss.
-----------------------
(a) User's Insurance. Prior to installation of the Facilities and to
----------------
having access to a Site and at all times during the term of a Site Agreement,
User shall provide proof of insurance for each individual Site, as outlined
below, satisfactory to BellSouth, and maintain the coverages specified below
during the term of a Site Agreement and until all Facilities are removed from
the Site following termination of a Site Agreement:
(i) Commercial General Liability Insurance with limits of not
less than $2,000,000 per occurrence and in the aggregate.
(ii) Workers' Compensation coverage in the statutory amount.
(iii) Employers Liability coverage with limits of not less than
$500,000 each accident, $500,000 each employee by disease and $500,000 policy
limit by disease.
(iv) Automobile Liability for Owned and Non-Owned Autos, Combined
Single Limit of $1,000,000.
(v) All Risk Insurance with Replacement Value coverage of User's
Facilities and personal property located on the Property.
(b) BellSouth's Insurance. At all times during the term of a Site
---------------------
Agreement, BellSouth shall maintain insurance for such Site as outlined below:
(i) Commercial General Liability Insurance with limits of not
less than $2,000,000 per occurrence and in the aggregate.
16
<PAGE>
(ii) Workers' Compensation coverage in the statutory amount.
(iii) Employers Liability coverage with limits of not less than
$500,000 each accident, $500,000 each employee by disease and $500,000 policy
limit by disease of $1,000,000.
(iv) Automobile Liability for Owned and Non-Owned Autos,
Combined Single Limit
(v) All Risk Insurance with Replacement Value coverage of the
Tower and BellSouth's personal property located on the Property.
(c) Additional Insured. BellSouth shall be named as additional
------------------
insured on the policy listed in Section 17 (a) (i) above. User shall be named
as additional insured on the policy listed in Section 17 (b) (i) above.
Additionally, each party shall obtain a waiver of subrogation from its insurer
on the policies listed in Section 17 (a) (i) and Section (b) (i) above.
BellSouth and User may satisfy this requirement by obtaining appropriate
endorsements to any master or blanket policy of liability insurance User or
BellSouth, as applicable, may maintain. No policy may be cancelable or subject
to reduction of coverage except after thirty (30) days prior written notice to
BellSouth or User.
(d) Third Parties. User and BellSouth shall require their respective
-------------
contractors and subcontractors to carry workers' compensation insurance and
adequate liability insurance in conformity with the minimum requirements listed
above.
(e) Risk of Loss; Limitation of Liability. Notwithstanding anything
-------------------------------------
herein to the contrary, each party shall bear the risk of loss of or damage to
the respective personal property during the term of each Site Agreement except
to the extent caused by the negligence or willful misconduct of the other party.
Neither party shall be liable for any damage to the other party's personal
property except to the extent caused by a party's negligence or willful
misconduct. Notwithstanding anything herein to the contrary, the parties shall
not be liable for any consequential or incidental damages incurred by the other
party due to any malfunction, vandalism, acts of God (including, without
limitation, lightning, wind, rain, hail, fire or storms) or any other damage
resulting from any reason. In the event the Tower or other portions of the Site
are destroyed or so damaged as to be unusable, BellSouth or User shall be
entitled to elect to cancel and terminate the Site Agreement, or in the
alternative may elect to restore the Site, in which case User and BellSouth
shall remain bound hereby but shall be entitled to an abatement of rent during
the loss of use, if the User or BellSouth has not elected to cancel the Site
Agreement. In no event shall the leasehold or other interest created by the
Site Agreement be specifically enforceable and in no event shall either
BellSouth or User be responsible to any party for consequential damages, lost
business opportunities, profits or market share.
(f) Removal of Facilities. User's obligation to provide the insurance
---------------------
coverages set forth in this Section 17 shall survive the expiration or
termination of the Site Agreement until the User's Facilities are removed from
the Property.
18. Indemnification. User does hereby agree to indemnify and save
---------------
BellSouth harmless from any and all claims, liabilities, demands, causes of
action, losses, damages, orders, judgments, penalties, costs and expenses,
including without limitation, reasonable attorneys fees and costs (i) for
property damage or personal injuries or death caused by the negligence or
willful misconduct of User, User's agents, employees, and contractors arising
out of User's occupancy of the Site or the installation, maintenance, operation
and removal of the Facilities, or (ii) resulting from the User's breach of any
term
17
<PAGE>
or condition of this MSA or a Site Agreement. BellSouth does hereby agree to
indemnify and save User harmless from any and all claims, liabilities, demands,
causes of action, losses, damages, orders, judgments, penalties, costs and
expenses, including without limitation, reasonable attorneys fees and costs (i)
for property damage or personal injuries or death caused by the negligence or
willful misconduct of BellSouth, BellSouth's agents, employees, and contractors
arising out of BellSouth's occupancy of the Site or the installation,
maintenance and operation of the Facilities, or (ii) resulting from BellSouth's
breach of any term or condition of this MSA or a Site Agreement. The obligations
to indemnify and hold harmless set forth in this Section shall survive the
expiration or termination of this MSA and each respective Site Agreement.
19. Default.
-------
(a) User's Default. Each of the following shall be considered a
--------------
default of a Site Agreement by the User:
(i) The failure to pay any rent or other charges required
pursuant to this MSA and the Site Agreement within thirty (30) days after
receipt of BellSouth's written notice of such failure;
(ii) The failure to cure, within (30) days after receipt of
BellSouth's written notice thereof, any breach of any other term of this MSA or
the Site Agreement, provided, however, that if such breach is not capable of
being cured within such period but User has undertaken efforts to cure such
breach, and such breach is capable of being cured, such thirty (30) day period
shall be extended for so long as User is diligently attempting in good faith, to
cure such breach, not to exceed an additional thirty (30)calendar days (except
for promises relating to interference as set forth in Section 13 (b) hereof);
(iii) Abandonment of the Site ("Abandonment" being defined as
User not using the Site for sixty (60) consecutive days);
(iv) The failure of User to eliminate interference problems as
set forth in Section 13(b); or
(v) If (a) User gives notice to any governmental body of its
insolvency or pending insolvency or makes an assignment for the benefit of
creditors or takes any other similar action for the protection or benefit of its
creditors, or files an answer admitting the material allegations of, or
consenting to, or defaults in answering any pleading filed with respect to the
commencement of any case or proceeding respecting User under any bankruptcy or
insolvency law, or (b) any order for relief is entered against User in any case
in bankruptcy, any order, judgment or decree is entered against User by a court
of competent jurisdiction appointing a receiver, trustee, custodian or
liquidator of User or of all or a substantial part of its assets, and such
order, judgment, or decree continues unstayed and in effect for a period of
ninety (90) consecutive days, or any proceeding for the reorganization of a
party under, or for an arrangement under, any bankruptcy or insolvency law
applicable to User is commenced whether by or against User and not dismissed
within ninety (90) days from commencement thereof.
Upon default of a Site Agreement by User, in addition to all other remedies
provided at law or in equity, BellSouth may, at its option:
18
<PAGE>
(aa) elect to remove all of the Facilities by legal
process, thereby terminating the Site Agreement, and store the Facilities at
User's expense, payable upon demand by BellSouth.
(bb) elect to treat the Site Agreement in full force and
effect and shall be entitled to collect the rent provided for hereunder.
Upon the termination of a Site Agreement pursuant to Section (aa) above, the
parties hereto shall be released from all duties, obligations, liabilities and
responsibilities under the Site Agreement except for indemnity obligations,
including without limitation, environmental indemnity and tax obligations, any
obligations arising prior to the date of termination, and User's obligation to
remove its Facilities from the Property.
(b) BellSouth's Default. Each of the following shall be
considered a default of a Site Agreement by BellSouth:
(i) The failure to cure, within (30) days after receipt
of User's written notice thereof, any breach of any other term of this MSA or
the Site Agreement, provided, however, that if such breach is not capable of
being cured within such period but BellSouth has undertaken efforts to cure such
breach, and such breach is capable of being cured, such thirty (30) day period
shall be extended for so long as BellSouth is diligently attempting in good
faith, to cure such breach, not to exceed an additional thirty (30) calendar
days (except for promises relating to interference by a Subsequent User as set
forth in Section 14 (e) which must be cured within the time frame set forth in
Section 14 (e) and except for any breach of the Master Lease/License which must
be cured within the time frames set forth in the Master Lease/License); or
(ii) The failure of BellSouth to eliminate interference
problems as set forth in Section 14 (e).
Upon default of a Site Agreement by BellSouth, in addition to all other remedies
provided at law or in equity, User may, at its option:
(aa) elect to cure BellSouth's default, in which event User
shall have the right to offset any and all reasonable costs incurred in curing
BellSouth's default against any rent or other amounts due BellSouth; or
(bb) elect to terminate the Site Agreement as of the date of
the default and to recover from BellSouth all damages (except those for which
BellSouth is not liable under the terms of this MSA) incurred by User as a
result of such default. Upon such termination, the parties hereto shall be
released from all duties, obligations, liabilities and responsibilities under
the Site Agreement except for any indemnity obligations, including without
limitation, environmental indemnity and tax obligations, obligation to pay
damages, and User's obligation to remove the Facilities from the Property.
20. Termination.
-----------
(a) Termination of Site Agreement.
-----------------------------
(i) Termination by User. Notwithstanding anything to the
-------------------
contrary contained in this MSA, User shall be entitled to terminate a Site
Agreement after the Commencement Date, with written notice to BellSouth in the
event:
19
<PAGE>
(a) any Approval is canceled, expires, lapses, or is otherwise
withdrawn or terminated through no fault of User while User is working
in the normal course of business to maintain all such Approvals; or
(b) any notice by BellSouth of relocation of User's Facilities
pursuant to Section 9 hereof is unacceptable to User.
Any such termination by User shall be effective thirty (30) days after receipt
of written notice by BellSouth. Upon such termination, the Site Agreement shall
terminate and be of no further force and effect, and except for any indemnity
obligations, including without limitation, environmental indemnity and tax
obligations, and User's obligations to remove the Facilities from the Property,
the parties hereto shall be released from all duties, obligations, liabilities
and responsibilities under the Site Agreement.
(ii) Termination by BellSouth.
-------------------------
(a) In the event BellSouth's right to occupy the Property is
terminated at any time following execution of a Site Agreement as a result of
the termination or expiration of the Master Lease/License, the Site Agreement
shall automatically terminate upon the effective termination date of the Master
Lease A License and be of no further force and effect, and except for any
indemnity obligations and User's obligation to remove the Facilities from the
Property, the parties hereto shall be released from all duties, obligations,
liabilities and responsibilities under the Site Agreement. It is understood
that BellSouth is under no obligation to extend the term of the Master
Lease/License for any particular Site.
(b) In the event BellSouth needs additional capacity at a
Site for its equipment, BellSouth may terminate a Site Agreement as provided in
Section 9 hereof. In the event User refuses to lease, sublease, license or
sublicense, as applicable, a Reciprocal Site to BellSouth, for reasons unrelated
to User's capacity, zoning, permits, licenses and other required approvals, or
environmental issues with respect to such Reciprocal Site, BellSouth may elect
to terminate any existing Site Agreement in the same geographic market as the
proposed Reciprocal Site refused by User, effective thirty (30) days after
receipt by User of written notice. Upon termination of any Site Agreement, such
terminated Site Agreement shall be of no further force and effect and the
parties hereto shall be released from all duties, obligations, liabilities, and
responsibilities under the terminated Site Agreement, except for indemnity
obligations, User's obligation to remove the Facilities from the terminated
Site, and User's obligations set forth in Section 13 (h) hereof. In the event
User does not remove its Facilities from the terminated Site as provided in
Section 9 or Section 13 (h) hereof, as applicable, BellSouth shall have the
right to remove and store User's Facilities, at User's expense.
21. Condemnation. If the whole of the Property or Site which are
------------
subject of any Site Agreement or so much thereof as to interfere with the use
thereof shall be taken or condemned by any competent authority for any public or
quasi-public use or purpose, such Site Agreement shall terminate as of the date
when possession is taken. In such event, BellSouth shall be under no liability
to User resulting from such condemnation and User shall be entitled to no part
of any condemnation award except so much thereof as the condemning authority
expressly allocates to that portion of the proceeds directly attributable to the
value of User's Facilities on the Tower, its leasehold interest in the Site, and
moving or relocation expenses incurred by User. BellSouth shall provide User
with notice in writing of any actual or threatened condemnation proceedings
promptly after receiving notice thereof. Upon such termination, the parties to
the Site Agreement shall be released from all duties, obligations, liabilities
and responsibilities under the Site Agreement except for any indemnity
obligations, including without
20
<PAGE>
limitation, environmental indemnity and tax obligations, and User's obligation
to remove the Facilities from the Property.
22. Mortgage by BellSouth. This MSA and each Site Agreement is and shall
---------------------
be subject to a security interest or mortgage which might now or hereafter
constitute a lien upon the Site. This MSA and each Site Agreement is and shall
be subject and subordinate in all respects to any and all such mortgages on the
Site and to all renewals, modifications, consolidations, replacements and
extensions thereof. In the event any proceedings are brought for foreclosure or
in the event of the exercise of the power of sale under any mortgage covering
any Site, the User shall attom to the purchaser upon any such foreclosure or
sale and recognize such purchaser as the lessor/licensor, as applicable, under
this MSA and the applicable Site Agreement(s); provided that so long as the User
is not in default hereunder, this MSA and the applicable Site Agreement(s) shall
remain in full force and effect, and User's use and occupancy pursuant to this
MSA and applicable Site Agreements shall not be disturbed.
23. Entirely. This MSA and Site Agreement, including all Schedules and
--------
Exhibits hereto and thereto, constitute the entire agreement between BellSouth
and User and any modification to the MSA or Site Agreement, any Schedule or
Exhibits hereto or thereto, must, in order to be effective, be in writing,
signed by authorized representatives of each party.
24. Waiver. Failure or delay on the part of either party to exercise any
------
right, power, privilege or remedy hereunder shall not operate as a waiver
thereof; nor shall any single or partial exercise of any right under this MSA of
under a Site Agreement preclude any other or further exercise thereof or the
exercise of any other right.
25. Binding Effect. This MSA and the Site Agreements shall extend to and
--------------
bind the heirs, personal representatives, successors, permitted assigns, or its
successors in interest of the parties hereto.
26. Governing Law. This MSA and each Site Agreement and performance
-------------
hereunder and thereunder shall be governed, interpreted, construed and regulated
by the laws of the state where the Property and Site are located.
27. Notice. All notices hereunder shall be deemed validly given if sent by
------
certified mail, return receipt requested, or with a nationally recognized
courier which provides notice of receipt, postage fully prepaid, addressed as
follows, or to such other addresses as may be given from either party in writing
to the other:
BellSouth: BellSouth Personal Communications, Inc.
3353 Peachtree Road, N.E.,
Suite 300
Atlanta, GA 30326
Attn: Real Estate Manager
with a copy to:
BellSouth Personal Communications, Inc.
3353 Peachtree Road, N.E., Suite 400
Atlanta, GA 30326
Attn: Legal Department
21
<PAGE>
User: Triton PCS Property Company L.L.C.,
101 Lindenwood Drive
Malvern, PA 19355
with a copy to:
Kleinbard, Bell & Brecker, LLP
1900 Market Street, Suite 700
Philadelphia, PA 19103
Attn: Jay Goldstein, Esq.
28. Headings. Section headings in this MSA and in each Site Agreement are
--------
included for the convenience of reference only and shall not constitute a part
of this MSA or the Site Agreement for any other purpose.
29. Brokerage. User warrants and represents to BellSouth that it has not
---------
dealt with a real estate agent or broker with respect to this MSA or any Site
Agreement, and shall hold BellSouth harmless against all claims by any real
estate agent or broker claiming a commission hereunder or thereunder on behalf
of User. BellSouth warrants and represents to User that, except for GlobalComm,
Inc., it has not dealt with a real estate agent or broker with respect to this
MSA or any Site Agreement, and shall hold User harmless against all claims by
any real estate agent or broker claiming a commission hereunder or thereunder on
behalf of BellSouth.
30. Memorandum of Lease. At the request of User, BellSouth hereby agrees
-------------------
to execute a memorandum or short form of lease (a "Memorandum of Lease"), in
form satisfactory for recording, and such Memorandum of Lease may be filed of
record by the User, at User's sole cost, including taxes or assessments incurred
in connection therewith. The parties understand and agree that this MSA and the
Site Agreements shall not be recorded of record. User agrees to prepare, execute
and record, at its expense, a release, within thirty (30) days of expiration or
termination of a Site Agreement. In the event User fails to do so, BellSouth has
a contractual right as User's agent for this limited purpose to prepare, execute
and record such release and User shall reimburse BellSouth, upon demand, for all
expenses, including attorney fees and filing fees, incurred in connection
therewith.
31. Counterparts. This MSA and each Site Agreement may be executed in any
------------
number of counterparts, each of which shall be an original, but all of which
together shall constitute but one instrument.
32. Authority. Each party hereby represents and warrants to the other that
---------
all necessary corporate authorizations required for execution and performance of
this MSA and each Site Agreement have been given and that the undersigned
officer is duly authorized to execute this MSA and each Site Agreement and bind
the party for which it signs.
33. Severability. If any term, covenant, condition or provision of this
------------
MSA or the Site Agreement or any application hereof or thereof shall, to any
extent, be invalid or unenforceable, the remainder of this MSA and each Site
Agreement shall not be affected thereby, and shall be valid and enforceable to
the fullest extent permitted by law.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
22
<PAGE>
IN WITNESS WHEREOF, the parties hereto have set their hands the day and
year first above written.
BELLSOUTH:
---------
BELLSOUTH CAROLINAS PCS, L.P.,
a Delaware limited partnership (SEAL)
By: BellSouth Personal Communications, Inc.,
a Delaware corporation, its general partner
By:______________________________________
Name:____________________________________
Title:___________________________________
Attest:__________________________________
Name:____________________________________
Title:___________________________________
[AFFIX CORPORATE SEAL]
BELLSOUTH PERSONAL COMMUNICATIONS, INC.,
a Delaware corporation
By:___________________________________________
Name:_________________________________________
Title:________________________________________
Attest:_______________________________________
Name:_________________________________________
Title:________________________________________
[AFFIX CORPORATE SEAL]
23
<PAGE>
IN WITNESS WHEREOF, the parties hereto have set their hands the day and
year first above written.
USERS:
-----
TRITON PCS PROPERTY COMPANY, L.L.C.
a Delaware limited partnership (SEAL)
By: TRITON PCS PROPERTY COMPANY, INC.
a Delaware corporation,
its Manager
By:_________________________________
Name:_______________________________
Title:_______________________
Attest:_____________________________
Name:_______________________________
Title:
[AFFIX CORPORATE SEAL]
24
<PAGE>
STATE OF____________)
)
COUNTY______________)
I, a Notary Public for said County and State, do hereby certify that ______
personally appeared before me this day and acknowledged that he/she is _________
Secretary of BELLSOUTH PERSONAL COMMUNICATIONS, INC., a Delaware corporation,
individually and as general partner of BELLSOUTH CAROLINAS PCS, L.P., a Delaware
limited partnership, and that by authority and as the act of the corporation,
individually and on behalf of the partnership, the foregoing instrument was
signed in its name by its _______ President, sealed with its corporate seal, and
attested by him/her as its Secretary.
__________________________________________
Notary Public, State of __________________
My Commission Expires:____________________
[NOTARIAL SEAL]
-
STATE OF____________)
)
COUNTY______________)
I, a Notary Public for said County and State, do hereby certify that ______
personally appeared before me this day and acknowledged that he/she is _________
Secretary of TRITON MANAGEMENT COMPANY, INC., a Delaware corporation, and
Manager of TRITON PCS PROPERTY COMPANY L.L.C., a Delaware limited partnership,
and that by authority and as the act of the corporation, individually and on
behalf of the partnership, the foregoing instrument was signed in its name by
its ___President, sealed with its corporate seal, and attested by him/her as its
_____________________Secretary.
__________________________________________
Notary Public, State of___________________
My Commission Expires:____________________
[NOTARIAL SEAL]
-
25
<PAGE>
SCHEDULE "I" TO MASTER SITE AGREEMENT
-------------------------------------
SITE LEASE/ SUBLEASE/LICENSE/SUBLICENSE] AGREEMENT
--------------------------------------------------
THIS SITE [LEASE/SUBLEASE/LICENSE/SUBLICENSE/AGREEMENT (the "Site
Agreement") is made as of the latter signature date hereof (the "Execution
Date"), by and between ___________, a___________________ [CORPORATION] [LIMITED
PARTNERSHIP], its successors and assigns (hereinafter referred to as
"BellSouth") and TRITON PCS PROPERTY COMPANY, L.L.C., a Delaware limited
liability company (hereinafter referred to as "User").
WHEREAS, the parties are party to the Master Site Agreement dated 1998 (the
"MSA");
WHEREAS, the parties desire that except as set forth in this Site
Agreement, the terms and conditions of the MSA shall govern the relationship of
the parties under this Site Agreement;
WHEREAS, BellSouth [IS THE OWNER OF] [AS LESSEE/LICENSEE, LEASED/LICENSED
FROM ____________ (THE "MASTER LANDLORD") PURSUANT TO THAT CERTAIN LEASE/LICENSE
AGREEMENT DATED __________19____ (THE "MASTER LEASE/LICENSE")] (WHICH MASTER
LEASE/LICENSE IS ATTACHED HERETO AS EXHIBIT "A-1") AND INCORPORATED HEREIN BY
REFERENCE, SUBJECT TO REDACTION OF FINANCIAL TERMS) certain real property
located in___________,__________________as more particularly described on
Exhibit "A" attached hereto and incorporated herein by reference.
NOW, THEREFORE, for valuable consideration, the receipt, adequacy and
sufficiency of which are hereby acknowledged by the parties hereto, the parties
hereby agree as follows:
1. MSA and Defined Terms. Unless otherwise defined herein, capitalized
---------------------
terms shall have the meaning set forth in the MSA. The parties agree that
except as otherwise set forth herein, the terms and conditions of the MSA shall
govern the relationship of the parties under this Site Agreement and the MSA is
incorporated herein by reference. In the event of a conflict or inconsistency
between the terms of the MSA and this Site Agreement, the terms of this Site
Agreement shall govern and control.
2. Demise. BellSouth hereby [LEASES/SUBLEASES/LICENSES/SUBLICENSES] to
------
User and User hereby [LEASES/SUBLEASES/LICENSES/SUBLICENSES] from BellSouth the
following:
(a) Tower Space. [Subject to BellSouth or User obtaining the consent
-----------
of the Master Landlord pursuant to Section 5(a) of the MSA, if required by the
Master Lease/License, in BellSouth's sole reasonable opinion,] [t]ower space on
BellSouth's Tower between the _______________(__) foot and ______________ (___)
foot level (the "Tower Space"), for the placement of User's antenna array,
platform, cables, brackets, wires and accessories, as more particularly
described on Exhibit "C" attached hereto and incorporated herein by reference
(the "Tower Facilities"); and
(b) Ground Space. [Subject to BellSouth having ground space adequate
------------
to accommodate User's Ground Facilities, as hereinafter defined, and BellSouth
or User obtaining the consent of the Master Landlord pursuant to Section 5(a) of
the MSA, if required by the Master Lease/License, in BellSouth's sole reasonable
opinion,] [ground space containing ______ (_____) [acres/square feet], as
approximately shown on Exhibit "B" attached hereto and incorporated herein by
this reference and which will be more specifically shown on the As-Built Survey,
as defined in Section 10 (vii) of the MSA, delivered by User to BellSouth in
accordance with Section I 0 (vii) of the MSA and which As-Built Survey shall be
attached to and become a part of this Site Agreement as Exhibit "B" when
initialed
BellSouth's Site Name: ________ User's Site Name:________
Site Number: ________ Site Number: _______
<PAGE>
by BellSouth and User in accordance with Section 10 (vii) of the MSA (the
"Ground Space"), for the placement of equipment shelters and cabinets,
telecommunications equipment within such equipment shelters and cabinets,
concrete pads, generators, cables, wires and accessories, as more particularly
described on Exhibit "C" attached hereto and incorporated herein by reference
(the "Ground Facilities"); together with
(c) Ingress and Egress. Subject to the limitations set forth in
------------------
Section 11 of the MSA (1)the non-exclusive right to use the Tower, at locations
mutually agreed upon by User and BellSouth, for the term hereof for ingress,
egress, and access to the Tower Space adequate to service the Tower Facilities
and (ii) if the term "Leased Space" as used herein includes Ground Space, a non-
exclusive easement for the term hereof, for ingress, egress, and access to the
Leased Space across [(AA)] the Property in locations mutually agreed upon in
writing by BellSouth and User [AND (BB) ACROSS THE PROPERTY OF THE MASTER
LANDLORD TO THE EXTENT AND IN THE LOCATIONS THE MASTER LANDLORD GRANTED INGRESS,
EGRESS AND ACCESS EASEMENTS TO BELLSOUTH IN THE MASTER LEASE/LICENSE.]
(d) Utilities, Cable Runs. BellSouth hereby grants to User the non-
---------------------
exclusive right to use the Tower for the term hereof to place any cable runs on
the Tower, at locations mutually agreed upon in writing by BellSouth and User,
in order to service or operate the Facilities, subject to BellSouth's prior
written approval of the design and installation method and procedures, such
approval not to be unreasonably withheld or delayed. [IF THE TERM "LEASED SPACE"
INCLUDES THE GROUND SPACE, BELLSOUTH HEREBY GRANTS TO USER A NON-EXCLUSIVE
EASEMENT FOR THE TERM HEREOF TO PLACE ANY UTILITIES OR CABLE RUNS ON OR BRING
UTILITIES ACROSS THE PROPERTY AND IF THE PROPERTY IS LEASED OR LICENSED BY
BELLSOUTH, THE PROPERTY OF THE MASTER LANDLORD TO THE EXTENT AND IN THE
LOCATIONS THE MASTER LANDLORD GRANTED UTILITY AND CABLE RUN EASEMENTS].
3. Term/Site Commencement Date. Provided [THE APPLICABLE CONTINGENCIES
---------------------------
SET FORTH IN SECTION 5 OF THE MSA HAVE BEEN SATISFIED,] User has paid BellSouth
any required application fee, and the Site Cost Reimbursement Amount of
[__________________ Dollars (______)], this Site Agreement term shall begin on
the earlier to occur of (i) the date when User commences the installation of its
Facilities on the Tower or (ii) forty-five (45) days from the Execution Date,
unless further extended by the mutual written agreement of BellSouth and User
(the "Site Commencement Date"), and shall continue until midnight of the tenth
(10th ) anniversary of the Site Commencement Date (the "Initial Term"). Within
five (5) business days of User's commencement of the installation of its
Facilities on the Leased Space, User shall provide BellSouth written notice of
the date User commenced installation of its Facilities on the Leased Space in
the form of Exhibit "E" attached hereto. Provided [THE MASTER LEASE/LICENSE
REMAINS IN EFFECT AND HAS NOT EXPIRED OR BEEN TERMINATED, AND] User is not in
default, User shall have the option of extending this Site Agreement for two (2)
additional five (5) year terms (the "Renewal Terms"). Such renewal options shall
be deemed automatically exercised without notice by User to BellSouth unless
User gives BellSouth written notice of its intention not to exercise any such
option at least ninety (90) days prior to the expiration of the then current
term, in which case, the term of the Site Agreement shall expire at the end of
the then current term.
3. Rent/Renewal Terms. In addition to any required application fee and
------------------
the Site Cost Reimbursement Amount, which shall be paid by User upon the
execution and delivery of this Site Agreement, during the first five (5) years
of the Initial Term, User shall pay annual rent of ***** in equal annual
installments in accordance with the MSA. For the sixth through tenth year of the
Initial Term, the annual rent shall be increased by ***** over the annual rent
for the first five (5) years of the Initial Term. Upon the commencement of each
Renewal Term, the annual rent shall be increased by ***** over the annual rent
then
BellSouth's Site Name: ________ User's Site Name:________
Site Number: ________ Site Number: _______
- --------------------------------------------------------------------------------
***** Certain information on this page has been omitted and filed
separately with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted portions.
2
<PAGE>
payable for the immediately preceding term. Unless otherwise directed in writing
by BellSouth, User shall forward all rental and other payments required
hereunder to:
BellSouth Personal Communications, Inc.
Attention: Treasury/Accounting Department
3353 Peachtree Road, N.E., Suite 400
Atlanta, GA 30326
Recurring Invoice No. 71302 - ___-______-________
5. Additional Rent. In addition to the rent set forth in Section 4
---------------
hereof, User hereby agrees to pay additional rent to BellSouth for any
additional equipment added to BellSouth's Tower after the installation of the
Tower Facilities set forth in Exhibit "C" hereto. Additional rent shall be
calculated based on a rental amount for each piece of additional equipment.
Such rental amounts are set forth below:
Equipment Rental Amount
--------- -------------
_______________________ [$__________]
_______________________ [$__________]
_______________________ [$__________]
_______________________ [$__________]
6. Hazardous Substances. [BELLSOUTH IS NOT AWARE OF, AND HAS NOT
RECEIVED NOTICE OF, THE DISPOSAL, RELEASE OR PRESENCE OF HAZARDOUS SUBSTANCES ON
THE PROPERTY IN VIOLATION OF ANY FEDERAL, STATE OR LOCAL LAW, REGULATION OR
ORDER.]
[7. NATIONAL ENVIRONMENTAL POLICY ACT COMPLIANCE. ADD PROVISION IF
BELLSOUTH HAS NOT COMPLIED OR IS IN THE PROCESS OF COMPLYING WITH NEPA.]
[8/9]. Notice. All notices hereunder shall be deemed validly given if
------
sent by certified mail, return receipt requested, or with a nationally
recognized courier which provides notice of receipt, postage fully prepaid,
addressed as follows, or to such other addresses as may be given from either
party in writing to the other:
BellSouth: [BELLSOUTH CAROLINAS PCS, L.P.]
[c/o]BellSouth Personal Communications, Inc.
3353 Peachtree Road, N.E., Suite 300
Atlanta, GA 30326
Attn: Real Estate Manager
with a copy to:
[BELLSOUTH CAROLINAS PCS, L.P.]
[c/o]BellSouth Personal Communications, Inc.
3353 Peachtree Road, N.E., Suite 400
Atlanta, GA 30326
Attn: Legal Department
BellSouth's Site Name: ________ User's Site Name:________
Site Number: ________ Site Number: _______
3
<PAGE>
User: Triton PCS Property Company, L.L.C.
101 Lindenwood Drive
Malvern, PA 19355
with a copy to:
Kleinbard, Bell & Brecker, LLP
1900 Market Street, Suite 700
Philadelphia, PA 19103
Attn: Jay Goldstein, Esq.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
BellSouth's Site Name: ________ User's Site Name:________
Site Number: ________ Site Number: _______
4
<PAGE>
IN WITNESS WHEREOF, the parties hereto have set their hands as of the
signature date set forth below.
USER:
----
TRITON PCS PROPERTY COMPANY, L.L.C.
a Delaware limited partnership (SEAL)
By: TRITON PCS PROPERTY COMPANY, INC.
a Delaware corporation,
its Manager
By:_____________________________
Name:___________________________
Title:__________________________
Attest:_________________________
Name:___________________________
Title:__________________________
[AFFIX CORPORATE SEAL]
Signature Date:______________________________
STATE OF____________)
)
COUNTY______________)
I, a Notary Public for said County and State, do hereby certify that ______
personally appeared before me this day and acknowledged that he/she is Secretary
of TRITON MANAGEMENT COMPANY, INC., a corporation and Manager of TRITON PCS
PROPERTY COMPANY L.L.C., a Delaware limited partnership liability company, and
that by authority and as the act of the corporation as Manager, the foregoing
instrument was signed in its name by its ___________________Secretary.
______________________________________
Notary Public, State of_______________
My Commission Expires:________________
[NOTARIAL SEAL]
-
BellSouth's Site Name: ________ User's Site Name:________
Site Number: ________ Site Number: _______
5
<PAGE>
STATE OF____________)
)
COUNTY______________)
I, a Notary Public for said County and State, do hereby certify that
personally appeared before me this day and acknowledged that he/she is Secretary
of TRITON MANAGEMENT COMPANY, INC., a corporation and Manager of TRITON PCS
PROPERTY COMPANY L.L.C., a Delaware limited partnership liability company, and
that by authority and as the act of the corporation as Manager, the foregoing
instrument was signed in its name by its _____________ President, sealed with
its corporate seal, and attested by him/her as its ____________ Secretary.
____________________________________
Notary Public, State of ____________
My Commission Expires: _____________
[NOTARIAL SEAL]
BellSouth's Site Name:____ User's Site Name:____
Site Number:____ Site Number:____
6
<PAGE>
IN WITNESS WHEREOF, the parties hereto have set their hands as of the
signature date set forth below.
BELLSOUTH:
---------
[NAME OF CORPORATION OR LIMITED PARTNERSHIP
HAVING THE FCC LICENSE]
[___________ , LIMITED PARTNERSHIP,]
BY: [NAME OF CORPORATE GENERAL PARTNER],
ITS GENERAL PARTNER
By:________________________
Name:______________________
Title:_____________________
Attest:____________________
Name:______________________
Title:_____________________
[AFFIX CORPORATE SEAL]
Signature Date:____________________
STATE OF ______________)
)
COUNTY ________________)
I, a Notary Public for said County and State, do hereby certify that
____________ personally appeared before me this day and acknowledged that he/she
is Secretary of ____________ a ______________ and general partner of
_____________, a ________________ , and that by authority and as the act of the
corporation as Manager, the foregoing instrument was signed in its _____________
name by its ___________ Secretary.
________________________________________
Notary Public, State of ________________
My Commission Expires:__________________
[NOTARIAL SEAL]
BellSouth's Site Name:____ User's Site Name:____
Site Number:____ Site Number:____
7
<PAGE>
EXHIBIT "A"
-----------
Site Description
----------------
Site Name: ___________ MSA/RSA/MTA/BTA: ________
Site Number __________ Site Address: ___________
Latitude: ____________
Longitude:____________
Legal Description of Property:
- -----------------------------
Legal Description of Access Easement:
- ------------------------------------
Legal Description of Utility Easement:
- -------------------------------------
BellSouth's Site Name:____ User's Site Name:____
Site Number:____ Site Number:____
8
<PAGE>
EXHIBIT "A-1"
-------------
MASTER LEASE/LICENSE AGREEMENT
------------------------------
(Subject to redaction)
BellSouth's Site Name:____ User's Site Name:____
Site Number:____ Site Number:____
9
<PAGE>
EXHIBIT "B"
-----------
USER'S GROUND SPACE
-------------------
BellSouth's Site Name:____ User's Site Name:____
Site Number:____ Site Number:____
10
<PAGE>
EXHIBIT "C"
-----------
USER'S TOWER FACILITIES AND GROUND FACILITIES
---------------------------------------------
[Attach User's Co-Location Application]
BellSouth's Site Name:____ User's Site Name:____
Site Number:____ Site Number:____
11
<PAGE>
EXHIBIT"D"
----------
Certification as to Ground Lease
--------------------------------
[Date]
----
RE: Site Agreement from [BELLSOUTH'S OR USER'S NAME] to [BELLSOUTH OR
-----------------------------------------------------------------
USER] at
- -------------------------------, ----------------------
Dear ______:
Pursuant to the above referenced lease (the "Lease"), User hereby certifies
unto BellSouth that User has obtained from the Master Landlord, as defined in
the Site Agreement, a lease of a portion of the Master Landlord's property, as
more particularly described in Section 3(a)(ii) of the Site Agreement, for
ground space to accommodate [USER'S] Ground Facilities together with easements
for access, utilities and cables.
Sincerely,
[BellSouth or User]
BellSouth's Site Name:____ User's Site Name:____
Site Number:____ Site Number:____
12
<PAGE>
EXHIBIT "E"
-----------
NOTICE OF INSTALLATION OF USER'S FACILITIES
-------------------------------------------
[DATE]
----
[BellSouth's Name]
[BellSouth's Address]
RE: Site Agreement from BellSouth to [USERL at
------------------------------------------
______________ , _________________
Dear __________:
Pursuant to Section of the above-referenced this letter serves to advise
you that [USER] commenced the installation of its Facilities on the Leased Space
on the above-referenced property on ______ 19__ , which date shall be the
Commencement Date, as defined in the above referenced Site Agreement.
Sincerely,
[User]
BellSouth's Site Name:____ User's Site Name:____
Site Number:____ Site Number:____
13
<PAGE>
SCHEDULE "II" TO MASTER SITE AGREEMENT
--------------------------------------
ENTRY AND TESTING AGREEMENT
This Entry and Testing Agreement ("Agreement") is made as of the ___ day of
, 1998, between BELLSOUTH CAROLINAS PCS, L.P., a Delaware limited partnership,
d/b/a BellSouth Mobility DCS ("BellSouth"), and TRITON PCS PROPERTY COMPANY,
L.L.C., a Delaware limited liability company ("Entrant"), concerning the
following described property [leased] [owned] by BellSouth ("Property"): [insert
site address]
BellSouth currently owns and operates a communications tower (the "Tower")
on the Property. BellSouth and Entrant are in the process of negotiating an
agreement whereby Entrant will lease, sublease or license certain portions of
the Tower and the Property. In order for Entrant to determine the viability and
feasibility of the Property as a tower or antenna site, Entrant desires to enter
upon and inspect the Property and/or to locate temporarily communications
equipment on the Property to conduct short term radio propagation tests; and
As an accommodation to Entrant, BellSouth is willing to grant permission to
Entrant, its employees, agents or contractors to enter upon the Property solely
to conduct such investigations, under the terms and conditions stated herein. In
consideration of the mutual covenants and agreements contained herein, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows.
1. BellSouth grants to Entrant, its contractors, agents, employees and
assigns a right of entry and license to enter upon the Property solely to
conduct and perform boundary surveys, Phase I environmental studies, and radio
propagation tests (the "Permitted Activities"). Entrant's entry rights are
specifically limited to the Permitted Activities and to the Property and shall
not include any other activities, including without limitation any construction
activities, on the Property or any other portion of the property surrounding the
Property. Entrant shall be responsible for any and all costs related to the
Permitted Activities, including any temporary installation, operation and
removal of equipment on the Property and the Tower. Any entry or activity on the
Tower by Entrant shall be coordinated in advance with BellSouth and shall be
subject to BellSouth's approval and supervision, at Entrant's cost.
2. Entrant agrees to comply with all local, state and federal laws, rules
and ordinances applicable to the Permitted Activities. Entrant further agrees to
exercise due care in the performance of all Permitted Activities on the
Property, and not to interfere with BellSouth's or any other party's activities
on the Property. Entrant shall promptly repair, at its cost, any damage to the
Property, the Tower, or any other property caused by the acts or omissions of
Entrant, its agents, employees, contractors or subcontractors.
3. Entrant shall indemnify and hold harmless BellSouth, its employees,
agents or contractors, from all claims, actions, damages, liability and expense,
including without limitation attorneys' fees and costs, in connection with
personal injury or property damage arising out of the acts or omissions of
Entrant, its employees, agents or contractors, including without limitation the
Permitted Activities, upon the Property, the Tower, or any other portion of the
property surrounding the Property. This indemnification shall survive the
expiration or termination of this Agreement.
4. Entrant shall maintain, and shall have its contractors and
subcontractors maintain, adequate insurance coverage, as determined by
BellSouth. At BellSouth's request, Entrant agrees to
BellSouth's Site:____
<PAGE>
provide certificates of insurance evidencing such insurance coverage of Entrant,
its contractors, or subcontractors.
5. The term of this Agreement shall be from the Execution Date to the
earlier of (i) forty-five (45)days from the Execution Date or (ii) until
BellSouth and Entrant enter into a lease, sublease or license with respect to
the Property; provided, however, that BellSouth may immediately terminate this
Agreement in the event Entrant breaches any term of this Agreement.
6. In the event this Agreement expires or is terminated without the
existence of a fully executed lease, sublease or license, Entrant will
immediately remove any and all of its equipment from the Property and restore
the Property to its condition existing immediately prior to such entry.
7. This Agreement constitutes the entire understanding between the
parties with respect to the activities contemplated by this Agreement. All prior
agreements or understandings, whether oral or written, are superseded. This
Agreement may be amended only by a written document duly executed by the
parties. This Agreement is governed by the laws of the State wherein the
Property is located.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands and seals
as of the date first above written.
BELLSOUTH:
_________________________,
a ________________________
By:_______________________
Print Name:_______________
Title:____________________
ENTRANT:
TRITON PCS PROPERTY COMPANY, L.L.C.,
a ____________ limited liability company
By: Triton Management Company, Inc. its Manager
______________________
its Manager
By:___________________
Print Name:___________
Title:________________
BellSouth's Site:____
<PAGE>
EXHIBIT 10.23
MASTER TOWER SITE LEASE AGREEMENT
---------------------------------
THIS MASTER TOWER SITE LEASE AGREEMENT ("Master Lease") is entered to this
28th day May of, 1998 between AT&T Corp. on behalf of itself affiliated AT&T
- ----- -----
Communications companies, Landlord") and Triton PCS Property Company L.L.C., on
behalf of itself and its affiliated companies. ('Tenant').
1. PREMISES
--------
Subject to following terms and conditions, Landlord agrees to lease to
Tenant certain space on one or more of Landlord's towers together with
sufficient rented space in Landlord's equipment building, equipment module, or
on Landlord's land (Property). Each tower location is described in the site
supplements attached as Exhibit A, with each tower site identified separately on
individual pages of Exhibit A. Tenant's use of the property shall be limited to
the described portion of the Property together with easements for access and
utilities corresponding to the sites identified in Exhibit A. Upon receipt of
written communication by Tenant of the desire to add tower sires to this Maser
Lease, Landlord shall provide Tenant with the Tenant Specifications Document to
be completed by Tenant. Upon receipt of the completed document, Landlord shall
evaluate the feasibility of utilization of the site. Landlord may decline an
additional sire lease for its own business purpose or if there is not adequate
space to accommodate Tenant's equipment, antennas and appurtenances.
2. MASTER LEASE TERM AND RENEWAL
-----------------------------
The initial term of the Master Lease shall commence on the date set forth
above ("Commencement Date"). The Master Lease shall terminate at Midnight on
the last day of the month in which the fifth annual anniversary of the
Commencement Date shall have occurred. The Master Lease shall renew
automatically for one additional five (5) year term unless Tenant shall give
written notice of its intention not to exercise any option to renew, at least
one hundred twenty (120) days prior to the expiration date of the Initial term,
in which case the term of the Master Lease shall expire as set forth above.
3. SITE SUPPLEMENT TERM AND RENEWAL
--------------------------------
The initial term of each Site Supplement is five (5) years. A Site
Supplement shall become effective one (1) day after the date Landlord has
completed special construction as set forth in Exhibit E.. ("Effective Date").
Tenant may request renewal of any Site Supplement for up to three successive
terms for five (5) years each. Tenant may request an extension of the Site
Supplement for an additional five (5) year term by giving notice of the renewal
request in writing at least six (6) months prior to the expiration of the
current term. Notwithstanding the expiration of the Master Lease, its terms and
conditions shall continue to apply to each Site Supplement until the Site
Supplement term expires. The renewal shall be on the same terms and conditions
as set forth in this Master Lease, except that the Rent shall be the greater of
***** of the Fair Market Rent for leases of towers of comparable quality in the
area or the current Rent plus a percentage equal to the percentage increase in
the Consumer Price Index as published by the Bureau of Labor Statistics of the
United States Department of Labor for Urban Wage Earners and Clerical Workers
for All Items ("CPI-W"). If Tenant has not notified Landlord of its desire to
extend the then current term of the Site Supplement at least six (6) months
prior to the end of the current term, the Site Supplement shall continue in
force upon the same terms and conditions as set forth in the Master Lease for a
further term of one (1) year and for annual terms thereafter until terminated by
either Party by giving to the other written notice of its intention to so
terminate at least six (6) months prior to the end
- --------------------------------------------------------------------------------
Confidential treatment has been requested for portions of this exhibit.
The copy filed herewith omits the information subject to the confidentiality
request. Omissions are designated as *****. A complete version of this exhibit
has been filed separately with the Securities and Exchange Commission.
<PAGE>
of such term. Rent for the one-year term shall be due monthly and shall be equal
to one hundred and fifty percent of the rent paid for the last month of the
immediately preceding term.
4. RENT.
----
(a) Tenant shall pay Landlord, as rent, the sum identified for each site as
set forth in Exhibit C. Rent shall commence for each Site Supplement after
Landlord has completed Special Construction as set forth in Exhibit E. Rent
shall be due annually in advance, payable to AT&T Corp., at Landlord's address
specified on the invoice. Rent shall be adjusted as described in Paragraph 3,
Site Supplement Term and Renewal.
(b) Within 30 days of the receipt of the invoice, Tenant agrees to make
payment in full, without deduction or setoff. Payment shall refer to the
invoice number. Tenant agrees that any restrictive endorsements, releases, or
other statements on or accompanying payments accepted by Landlord shall not be
effective. Delinquent payments shall bear interest at the rate of ***** per
month, or portion thereof, but not to exceed the maximum lawful rate.
(c) Charges under this Master Lease, including all subsequently executed
Site Supplements, do not include taxes. Customer agrees to pay any sales, use,
or other taxes (exclusive of taxes on Landlord's net income) that may be levied
on Landlord in connection with the Tenant's attachments on the Tower and use of
the Property, unless Tenant has provided Landlord with a valid tax exemption
certificate.
(d) If Tenant disputes the amount of Landlord's invoice, Tenant shall
notify Landlord in writing within sixty (60) days after the invoice date.
Pending resolution of the dispute as outlined in Paragraph 19, Tenant and
Landlord shall adhere to all other rights and obligations under this Master
Lease. If the dispute is ultimately resolved in the Tenant's favor, Landlord
shall issue a credit on Tenant's invoice.
(e) If a Site Supplement is terminated at any time other than due to
default by Tenant Rent shall be prorated as of the date of termination and all
prepaid Rents shall be refunded to Tenant.
5. PERMITTED USE
-------------
(a) The Property may be used by Tenant only for permitted uses which are
the transmission and reception of radio communication signals and for the
construction, maintenance, repair or replacement of antennas and other Landlord-
approved equipment and related facilities ("Communications Facilities or
Communications System") Unless otherwise specified by Landlord, Tenant shall
obtain, at Tenant's expense, all licenses and permits required for Tenant's use
of the Property from all applicable government and or regulatory entities
("Governmental approvals"). Tenant may (Prior to or after the effective date)
obtain a title report, perform surveys, soil tests, and other engineering
procedures, on, under and over the Property, necessary to determine that
Tenant's use of the Property will be compatible with Tenant's engineering
specifications, system design, operations, government approvals and Landlord
standards. All on-site activities performed prior to effective date, such as
feasibility testing and site suitability assurance, may occur only with the
prior written approval of Landlord, unless otherwise specified in writing by the
Landlord. Tenant must provide a certificate of insurance consistent with the
requirements in paragraph 11, prior to conducting any on-site activities, such
as feasibility testing and site suitability assurance.
- --------------------------------------------------------------------------------
***** Certain information on this page has been omitted and filed
separately with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted portions.
2
<PAGE>
(b) Prior to execution of a Site Supplement, Tenant will examine the
Property. If requested by Landlord, Tenant will conduct a Feasibility Study at
Tenant's and assure its' review and approval by Landlord. Tenant will determine
that the Property Is suitable for Tenant's facilities and intended use. Landlord
makes no representations that the Property In suitable for Tenant's facilities
and intended use.
(c) Prior to execution of or during the term of the Master Lease, Tenant
shall, if requested by Landlord, execute a Non-Disclosure Agreement which will
be attached hereto as Exhibit D.
6. INTERFERENCE.
------------
Tenant shall not use the Property in any way which Interferes with the use
of the Property by Landlord, the provision of services to Landlord's customers,
or the use of Property by tenants or licensees of Landlord. Similarly, Landlord
shall not use, nor shall Landlord permit its tenants, licensees, employees,
invitees or agents to use any portion of Landlords Properties in any way which
Interferes with the operation of Tenant. Such Interference shall be deemed a
material breech by the interfering party who shall, upon written notice from the
other, be responsible for terminating said interference. It is expressly
acknowledged and agreed that the obligation to terminate such interference shall
be on the party that is the last to lease space on Landlord's Property. In the
event any such interference does not cease promptly, the parties acknowledge
that continuing interference may cause irreparable injury and, therefore, the
injured party shall have the right, in addition to any other rights that it may
have at law or In equity, to bring an action to enjoin such interference or to
terminate the Site Supplement for the affected location immediately upon written
notice.
7. RELOCATION OF LICENSED SPACE.
----------------------------
Landlord reserves the right to change the location of Tenants antennas or
other equipment upon one hundred eighty (180) days written notice to Tenant.
Upon determination by Landlord that Tenant's Communications Facilities must be
relocated, Landlord will, in good faith, attempt to relocate Tenants
Communications Facilities to space mutually acceptable to Landlord and Tenant,
If agreement cannot be reached. Landlord shall determine the relocated space to
be used. Landlord, at its' own expense, will relocate to the extent necessary,
the antenna. Cabling and any equipment that was installed by or on behalf of
Tenant; however, such relocation will not adversely affect the effectiveness of
Tenants Communications Facilities at the tower site. Should such relocation
adversely affect the effectiveness of Tenant's Communications Facilities at the
tower site, Tenant shall have the right to terminate the Site Supplement for the
affected location immediately upon written notice.
8. IMPROVEMENTS; UTILITIES; ACCESS; INSPECTION
-------------------------------------------
(a) Upon written approval by Landlord, Tenant shall have the right, at its
expense, to construct, maintain, install, relocate and remove improvements,
personal property and facilities. Landlord's prior consent to the site plans
and specifications for such building and other improvements shall be required
but shall not be unreasonably withheld or delayed and shall be deemed given as
to those items listed in Exhibit E.
(b) Tenant shall provide in writing the names, addresses and telephone
numbers of all persons who will perform work on behalf of Tenant at the site.
Landlord shall have the right to inspect identification of any of Tenant's
personnel at any time. Landlord shall have the right to refuse access to any
person who refuses to provide identification upon request or whose name does not
appear on the
3
<PAGE>
personnel list provided by Tenant. Landlord reserves the right to refuse
admittance to any of Tenant's personnel for good cause shown.
(c) Tenant shall use for construction, maintenance, installation,
relocation and removal only those contractors for which Landlord has given
written approval. Upon written approval of Landlord, Tenant shall have the right
to replace or upgrade antennas or equipment at any time during the term of a
Site Supplement. Tenant shall cause all construction to occur lien-free and in
compliance with all applicable laws and ordinances. The antennas, cabling and
tenant-installed equipment shall remain the exclusive personal property of
Tenant. Upon written approval of Landlord, Tenant shall have the right to remove
the antennas, cabling and equipment upon termination of a Site Supplement. All
removal work shall be performed at Tenant's expense; All removal work shall be
completed within 180 days of termination of a site Supplement
(d) Tenant, at its expense, may use any and all appropriate means of
restricting access to Tenant's equipment and/or module, upon written approval of
Landlord.
(e) Each antenna must be identified by a metal tag fastened securely to its
bracket on the Tower and each transmission line shall be tagged at the conduit
opening where it enters Landlord's building,
(f) Unless otherwise specified by the Landlord, Tenant shall, at Tenants
expense, keep and maintain the Property and all building and improvements
utilized by Tenant now or hereafter located thereon in reasonable condition and
repair during the term of a Site Supplement. Upon termination of The Site
Supplement, the Property shall be returned to Landlord in good, usable
condition. Fifty percent of the estimated costs incurred by Landlord to return
Property to good, usable condition shall be paid by Tenant prior to removal of
antennas, cabling and other equipment. The remaining actual coats will be due
to Landlord within 30 days of the date of the final invoice for these costs.
(g) Landlord covenants that it will keep the Tower In good repair as
required by federal law, including the Telecommunications Authorization Act of
1992, 102 P.L. 538, 106 Stat. 3533 (1992) and amendments to Sections 303(g) and
503(b) (5) of the Communications Act of 1934. Landlord shall also comply with
all rules and regulations promulgated by the Federal Communications Commission
and the Federal Aviation Agency with regard to the lighting, marking. painting
of towers or other requirements, as well as local state and other federal laws.
If Landlord falls to adhere to such requirements, Tenant may perform the
necessary work to bring the Property within compliance, after 30-days written
notice to Landlord. The costs thereof shall be payable to Tenant on demand.
Failure of Landlord to pay shall then authorize Tenant to deduct the amount from
the annual rental payment.
(h) Tenant shall pay any additional utilities charges due to Tenant's use
of the Property. Upon receipt of Landlords prior written approval, Tenant shall
have the right to install utilities, at Tenants expense, and to improve the
present utilities on the Property (including, but not limited to the
installation of emergency power generators and air conditioning systems).
Landlord hereby grants an easement for the term of the Site Supplement, to
permanently place any utilities on or to bring utilities across the Property in
order to service the Property, antennas and other equipment, subject to
Landlord's written approval of the design and installation method and
procedures.
As partial consideration for rent paid under each Site Supplement, Landlord
hereby grants Tenant an easement ("Easement") for ingress, egress, and access
(including access described in Paragraph 1) to the
4
<PAGE>
Property adequate to service the Property, antennas and other equipment. Any
Easement provided hereunder shall have the same term as the applicable Site
Supplement.
(i) Landlord and its agents may inspect or observe at any time any work
while in progress or after completion to ascertain whether the work is in
accordance with the specifications and requirement of this Master Lease or
applicable Site Supplement, Landlord standards and applicable laws and
regulations. Landlord may require Tenant to correct any faulty work. Such
inspection and requirement for correction shall not relieve Tenant of full
responsibility for the proper performance of the work.
9. LABOR RELATIONS
---------------
(a) Whenever Tenant has knowledge that a labor dispute is delaying or
threatens to delay the timely performance of work at the Property, Tenant shall
immediately notify Landlord (both orally and in writing).
(b) Tenant shall suspend all work activities when Landlord, in its sole
judgment, determines that entering or leaving the work site will create a new
labor dispute or impact an existing labor dispute for Landlord or for Tenant.
Upon that occurrence and notification by Landlord, Tenant shall enter and depart
the work site only with police or other law enforcement agency escort. Tenant
agrees to assume all costs associated with the escort services when Tenant
proceeds with work under these circumstances. Tenant further assumes sole
responsibility for all risks associated with conducting work activities under
these circumstances.
10. Termination.
------------
Except as otherwise provided herein. this Master Lease or a Site Supplement
may be terminated, without any penalty or further liability as follows:
(a) Upon thirty (30) days' written notice by Landlord if Tenant fails to
cure a default for payment of amounts due under this Master Lease or any Site
Supplement within that 30-day period;
(b) Upon thirty (30) days' written notice by either party if the other
party defaults or violates any term or condition of this Master Lease or any
Site Supplement and fails to cure such default within that 30-day period, or
such longer period as may be required to diligently complete a cure commenced
within that 30-day period.
(c) If Tenant shall not have obtained all Governmental Approvals for a Site
Supplement as specified In (5.a) above, after having made a good faith effort,
then Tenant shall, by notice to Landlord, have the right to cancel all rights
and obligations under this Master Lease pertaining to that Site Supplement,
provided Tenant reimburses Landlord for actual and other preparatory expenses
incurred.
(d) If Tenant, after the Effective Date. having made good faith effort,
fails to obtain any license, permit or Governmental Approval necessary for the
construction and/or operation of the antennas and other equipment of Tenants
business, tenant shall be obligated to pay Landlord the balance of the remaining
Rent due for said current year. Tenant shall also reimburse Landlord for all
actual and other preparatory expenses Incurred.
(e) Upon twenty-four (24) month's written notice by Landlord In the event,
(1) Landlord desires to sell a tower site
5
<PAGE>
without the tower and appurtenant equipment buildings; or (2) Landlord requires
the space occupied on the tower by Tenant for Landlord's reasonable business
purposes or the reasonable business purposes of Landlord's affiliates.
(f) Immediately upon written notice if the Property or the antennae or
equipment are destroyed, damaged or rendered inoperative through no fault of
Tenant, so as in Tenant's reasonable judgment, to substantially and adversely
affect the effective use of the site. In such event, all rights and obligations
of the parties shall cease as of the date of the damage, destruction or
inoperability and Tenant shall be entitled to any Rent prepaid by Tenant. If
Tenant elects to continue the affected Site Supplement, all Rent shall abate
until the Property and/or antennas and other equipment are restored to working
condition.
(g) Upon lawful condemnation of the property by an entity having the power
of eminent domain. Parties shall pursue their own separate awards In any eminent
domain action.
(h) For the reasons specified in Paragraph 6.
11. INSURANCE AND SUBROGATION.
-------------------------
(a) Prior to work commencing, including feasibility testing and site
suitability assurance described in Paragraph 5(a) and (b) above, Tenant shall
provide proof of insurance, as outlined below. and shall maintain the coverages
specified during the full term of this Master Lease and any Site Supplement and
for 180 days after its termination for any reason:
Comprehensive General Liability Insurance in an aggregate amount of
$1,000,000.
Workers' Compensation coverage in the statutory amount.
Employers Liability Occupational Disease and Bodily Injury,
Combined Single Limit of $1,000,000.
Automobile Liability for Owned and Non owned Autos,
Combined Single Limit of $1,000,000.
At Risk Insurance with Standard Extended Coverage, Replacement Value,
Without Coinsurance Factor for full replacement value of Tenant's
facilities and Tenant's equipment, tools, and personal property
(including Antenna Facilities) located on the Property.
(b) Landlord shall be listed as an additional insured on the policy or
policies. Tenant may satisfy this requirement by obtaining appropriate
endorsement to any master policy of liability insurance Tenant may maintain.
(c) Landlord and Tenant hereby mutually release each other (and their
successors or assigns) from liability and waive all rights of recovery against
the other for any loss or damage covered by their respective first part property
insurance policies for all perils insured thereunder. In the event of such
insured loss, neither party's insurance company shall have a subrogated claim
against the other.
6
<PAGE>
(d) If approved for use by Landlord, Tenant shall require its contractors
and subcontractors to carry workers' compensation insurance and adequate
liability insurance in conformity with the minimum requirements listed above.
12. LIMITED LIABILITY.
-----------------
Tenant agrees to release and hold Landlord harmless from any and all claims
arising from the installation, construction, use, maintenance, repair,
relocation or removal of the antennas and other equipment, except for claims
arising from the negligent acts or willful misconduct of Landlord, its
employees, or agents.
13. INDEMNIFICATION.
---------------
(a) Each party shall indemnify and hold the other party harmless against
any claim of liability or loss from personal injury or property damage resulting
from or arising out of the indemnifying party's negligent acts or omissions or
willful misconduct, or those of its servants or agents, in connections with the
Property, except to the extent due to the indemnified party's negligent acts or
omissions or those of its servants or agents.
(b) Tenant will compensate Landlord for the full actual loss, damage or
destruction of Landlord's property that in any way arises from or is related to
Tenant's use of the Property pursuant to this Master Lease and any Site
Supplement or activities undertaken pursuant to this Master Lease or any Site
Supplement (including, without limitation, the installation, construction,
operation. maintenance, repair or removal of Tenant's Communication's
Facilities), except to the extent due to the Landlord's negligent acts or
omissions or those of its servants or agents.
(c) Landlord will compensate Tenant for the full actual loss, damage, or
destruction of Tenant's property that results from or arises out of Landlord's
negligent acts or omissions or willful misconduct, or those of its servants or
agents, except to the extent due to the Tenant's negligent acts or omissions or
those of its servants or agents.
(d) Without limiting the foregoing, Tenant will indemnify, defend, and hold
harmless Landlord and Landlord's agents and employees, from any and all claims
asserted by customers of Tenant in any way arising out of or in connection with
this Master Lease or any Site Supplement or Tenant's Communications System,
except to the extent arising out of the gross negligence or willful misconduct
of Landlord or Landlord's agents or employees.
(e) Without limiting the foregoing and to the extent not prohibited by law.
Tenant will release, indemnify, defend, and hold Landlord (and its affiliates
and personnel) harmless against all losses, costs (including reasonable
attorneys' fees),, damages, expenses, claims. demands, or liabilities arising
out of or caused by, or alleged to have arisen out of or been caused by:
(1) any defect failure, or malfunction of any facilities of materials
furnished by Tenant;
(2) Tenant's use, maintenance, repair, relocation or removal of its
materials or facilities or presence of such on the Property;
7
<PAGE>
(3) any failure by Tenant to satisfy all claims for labor, equipment,
materials and other obligation relating to the performance of the
work under this Master Lease or any Site Supplement;
(f) Tenant will indemnity Landlord for any taxes levied upon Landlord
resulting from Tenant's use of the Property.
14. ENVIRONMENTAL LAWS.
------------------
Tenant represents, warrants and agrees that it will conduct its activities
on the Property in compliance with all applicable Environmental Laws, as
described In Exhibit F. Landlord represents, warrants and agrees that it will
conduct its activities on the Property in compliance with all applicable
Environmental Laws.
Landlord shall promptly conduct any investigation and remediation as
required by any Environmental Laws or common law, of all spills or other
releases of Hazardous Substances, as defined In Exhibit F, not caused solely by
Tenant, that have occurred or which may occur on the Property. Landlord reserves
the right to report to the appropriate agency on Tenant's behalf, any release or
spill where reporting is required by law and where such report is not made by
Tenant within the required time frame. Financial responsibility for
investigation and/or remediation activities shall be shared according to fault.
Tenant agrees to defend, indemnify and hold Landlord harmless from and
against any and all claims, causes of action, demands and liability including,
but not limited to, damages, costs, expenses, assessments, penalties, fines,
losses, judgments and attorneys' fees that Landlord may suffer due to the
existence or discovery of any Hazardous Substances and dangerous conditions on
the Property or the migration of any Hazardous Substances (or likelihood of
migration due to the existence of dangerous conditions) to other properties or
release into the environment that relate to or arise from Tenant's activities on
the Property.
Landlord agrees to defend, indemnify and hold Tenant harmless from and
against any and all claims, causes of action, demands and liability including,
but not limited to, damages, coats, expenses, assessments, penalties, fines,
losses, judgments and attorneys' fees that Tenant may suffer due to the
existence or discovery of any Hazardous Substances on the property or the
migration of any Hazardous Substances to other properties or release into the
environment, that relate to or arise from Landlord's activities during this
Master Lease or any Site Supplement and from all activities on the Property
prior to commencement of this Master Lease or any Site Supplement.
The indemnification in this section specifically include, but are not
limited to, costs incurred In connection with any investigation of site
conditions or any cleanup, remedial, removal or restoration work required by any
governmental authority.
15. ASSIGNMENT.
----------
This lease shall run with the Property and shall be binding upon and inure
to the benefit of the parties, their respective successors, personal
representatives and assigns.
Landlord agrees that Tenant may assign this Master Lease and any Site
Supplement, and all rights, benefits, liabilities and obligations hereunder,
only to any person or business entity which is licensed by the FCC to operate a
wireless communications business, is a parent or subsidiary of Tenant,
8
<PAGE>
controls or is controlled by or under common control with Tenant, is merged or
consolidated with Tenant or purchases a majority or controlling interest in the
ownership or assets of Tenant. Tenant shall provide written notification of its
intent to assign at least one-hundred and twenty (120) days in advance. Upon
written notification of Tenant to Landlord of any such action and Assignee's
written assumption of all terms and conditions of this Master Lease and all Site
Supplements, Tenant shall be relieved of all future performance, liabilities and
obligations under this Master Lease and any Site Supplement as of the effective
date of the assignment. Tenant may not otherwise assign this Master Lease or an
Site Supplement without Landlord's written consent.
Tenant may not sublet any Property under this Master Lease or any Site
Supplement.
16. QUIET ENJOYMENT, TITLE AND AUTHORITY.
-------------------------------------
Landlord covenants and warrants to Tenant that (a) Landlord has full right,
power and authority to execute this Master Lease; (b) it has good and
unencumbered title to the Property free and clear of any liens or mortgages,
except those disclosed to Tenant which will not interfere with Tenant's right to
or use of the Property; and (c) execution and performance of the Master Lease
will not violate any laws, ordinances, covenants, or the provisions of any
mortgage lease, or other agreement binding on Landlord.
17. TAXES.
------
Tenant shall pay any personal property taxes assessed on, or any portion of
such taxes attributed to the Communications Facilities or Communications System.
Landlord shall pay when due all real property taxes and all other fees and
assessments attributable to the Property. However, Tenant shall pay, as
additional rent, any increase in real property taxes levied against the Property
(excluding any additional taxes that relate to the period prior to the Effective
Date, i.e., roll-back taxes) which Is directly attributable to Tenant's use of
the Property, and Landlord agrees to furnish proof of such increase to Tenant,
upon Tenant's request.
18. CONFIDENTIALITY.
---------------
The parties shall keep confidential the terms and conditions of this Master
Lease and any Site Supplement, except as reasonably necessary for performance
thereunder and except to the extent disclosure may be required by applicable
laws or regulations, in which latter case, the party required to make such
disclosure shall promptly inform the other party prior to such disclosure to
enable that party to make known any objections it may have to such disclosure.
19. DISPUTES RESOLUTION.
-------------------
If a dispute arises out of or relates to this Master Lease or any Site
Supplement or breach thereof, and the dispute cannot be settled through
negotiation, the parties agree to submit the dispute to a sole mediator selected
by the parties. If not thus resolved, the parties sole remedy shall be to
submit the dispute to a sole arbitrator selected by the parties within thirty
(30) days after the mediation or, in the absence of such selection, to
arbitration which shall be governed by the United States Arbitration Act.
Judgment on the award may be entered in a court having jurisdiction. Judgment
of the arbitrator shall be binding upon the parties. The arbitrator shall
determine issues of arbitrability, but may not limit, expand or otherwise modify
the terms of this Master Lease or any Site Supplement. The parties, their
representatives and other participants and the mediator and arbitrator shall
hold the existence, content and result of mediation and arbitration in
confidence.
9
<PAGE>
All defenses based on passage of time shall be tolled pending the
termination of the mediation and/or arbitration. Nothing In this clause shall be
construed to preclude any party from seeking injunctive relief in order to
protect is rights pending mediation of arbitration. A request by a party to a
court for such injunctive relief shall not be deemed a waiver of the obligation
to mediate and/or arbitrate as specified herein. Each party will bear its own
attorneys' fees associated with the mediation and arbitration and will pay all
other costs and expenses of the mediation and arbitration as the rules of ft
American Arbitration Association provide.
20. GOVERNING LAW.
-------------
This Master Lease or any She Supplement and the performance thereof shall
be governed, interpreted, construed and regulated by the laws of the state where
the Property is located..
21. FORCE MAJEURE.
-------------
Except for payment of the annual Rent and other payments due Landlord,
neither party shall have any liability for its delays or its failure in
performance due to: fire, explosion, pest damage, power failures, strikes or
labor disputes except as outlined In Paragraph 9, acts of God, the elements,
war, civil disturbances, acts of civil or military authorities or the public
enemy, inability to secure raw materials, transportation facilities, fuel or
energy shortages, or other causes beyond its reasonable control, whether or not
similar to the foregoing.
22. NON-WAIVER.
----------
No course of dealing, course of performance or failure of either party
strictly to enforce any term, right or condition of this Master Lease or any
Site Supplement shall be construed as a waiver of any term, right or condition.
23. HEADINGS.
--------
All headings contained In this Master Lease or any Site Supplement are
inserted for convenience only and are not intended to affect the meaning or
interpretation of this Master Lease or any clause.
24. NOTICES.
-------
All notices, requests, demands and other communications hereunder shall be
in writing and shall be deemed given if personally delivered or mailed via
certified mail-return receipt requested, or sent by overnight carrier to the
following addresses:
If to Landlord, to: If to Tenant, to:
AT&T Corp. Triton PCS Property Company, L.L.C.
Manager, Real Estate 4055 Faber Place Drive
Tower Attachment Group Suite 101
1200 Peachtree St N. E. Charleston, SC. 29405
Atlanta, Georgia 30309 Attn: Mr. Michael C. Mears
10
<PAGE>
25. MISCELLANEOUS-
-------------
(a) If either party is represented by a real estate broker in this
transaction, that party shall be fully responsible for any fee due such broker
and shall hold the other party harmless from any claims for commission by such
broker.
(b) Each party agrees to cooperate with the other in executing any
documents (including a Memorandum of Lease) necessary to protect its rights or
use of the Property, The Memorandum of Lease may be recorded, in place of this
Master Lease, by either party.
(c) If any term of this Master Lease is found to be void or invalid, such
invalidity shall not affect the remaining terms of this Master Lease, which
shall continue in full force and effect.
(d) Landlord hereby waives any and all lien rights it may have, statutory
or otherwise, concerning the Antenna Facilities or any portion thereof which
shall be deemed personal Premises for the purposes of this Lease, regardless of
whether or not same is deemed real or personal Premises under applicable laws.
Removal of said Antenna Facilities shall be in accordance with Paragraph 8.c of
this Master Lease.
26. ENTIRE AGREEMENT.
----------------
The terms and conditions contained in this Master Lease supersede all prior
oral or written understandings between the parties and constitute the entire
agreement between them concerning the subject matter of this Master Lease or any
Site Supplement. There are no understandings or representations, express or
implied, not expressly set forth in this Master Lease or any Site Supplement.
This Master Lease or any Site Supplement shall not be modified or amended except
by a writing signed by the authorized representatives of the parties.
In Witness Whereof, the parties have caused this Master Tower Site Lease
Agreement to be executed by their authorized representatives on the dates noted
below.
WHEREFORE, we set our hands and seal,
For the Landlord, For the Tenant,
AT&T Corp. Triton PCS Property Company, L.L.C.
By:__________________________ By:_________________________________
Printed Name: Its:
Manager - Tower Attachment Group
Date: Date:
11
<PAGE>
EXHIBIT 10.24
Independent Director Stock Award Plan
The Board of Directors of Triton PCS Holdings, Inc., a Delaware corporation
(the "Company"), has adopted this Independent Director Stock Award Plan (the
"Plan") to enable the Company to issue to Independent Directors (as hereinafter
defined) shares ("Shares") of the Company's Common Stock, par value $0.01 per
share (the "Common Stock"). The purpose of the Plan is to benefit the Company
by enabling the Company to attract and retain highly qualified persons to serve
as Independent Directors. The provisions of the Plan are set forth below:
1. ADMINISTRATION. The Plan shall be administered by the Board of
Directors of the Company or, in the Board's discretion, a duly constituted
Compensation Committee of the Board of Directors, if any (in either such case
hereinafter referred to as the "Board"). The Board's actions under the Plan
shall be limited to taking all actions authorized by this Plan or otherwise
reasonably necessary to effect the purposes hereof.
2. SHARES SUBJECT TO THE PLAN. An aggregate of 2,500 Shares of Common
Stock will be made available for award by the Company to Independent Directors
under the Plan, subject to appropriate anti-dilution adjustments to such amount
on account of stock splits, stock dividends, reclassifications and similar
matters. The Shares issuable under the Plan may, in the discretion of the
Board, be either authorized but unissued Shares or treasury Shares.
3. INTERPRETATION. Subject to the express provisions of the Plan, the
Board shall have the authority to interpret the Plan, to prescribe, amend and
rescind rules relating to it, and to make all other determinations necessary or
advisable in administering the Plan, all of which determinations will be final
and binding upon all persons.
4. ELIGIBILITY FOR AWARD. The only persons eligible for award of Common
Stock under the Plan shall be directors of the Company who are nominated
pursuant to Section 3.1(a)(ii) of the Company's Stockholders' Agreement dated as
of February 4, 1998 (the "Stockholders Agreement") among the Company and its
stockholders (the "Independent Directors").
5. LETTER AGREEMENT. As a condition to the award of any Shares
hereunder, the Independent Director receiving any such Shares must execute and
deliver to the Company a vesting letter agreement in the form of Annex I hereto.
-------
6. NO RIGHT TO CONTINUED MEMBERSHIP ON THE BOARD. Neither the Plan nor
any award of Common Stock under the Plan confers upon any Independent Director
any right to continued membership on the Board, nor will an Independent
Director's participation in the Plan create any obligation on the part of the
Board to nominate any Independent Director for re-election by the Company's
stockholders.
7. AMENDMENT OF PLAN. The Board may, at any time, amend the Plan in any
respect; provided, however, if required pursuant to the terms of the
Stockholders Agreement, the Board will not take any of the following actions
without the approval of the Stockholders of the
<PAGE>
Company: (a) increase the number of Shares specified in Section 2 above that may
---------
be made available for issuance under the Plan (except as provided in
Section 2), (b) change the eligibility requirements for participation in the
- ---------
Plan, or (c) impair the vested rights of participating Independent Directors.
8. EFFECTIVE DATE; TERM AND TERMINATION OF THE PLAN. The Plan shall be
effective as of February 4, 1998.
The undersigned Secretary of the Company hereby confirms that this Plan was
duly adopted and approved by the Board of Directors of the Company.
/s/ David D. Clark
-----------------------------
David D. Clark
Secretary of the Company
2
<PAGE>
ANNEX I
[Form of Vesting Letter Agreement ]
Triton PCS Holdings, Inc.
101 Lindenwood Drive , Suite 125
Malvern, PA 19355
[DATE]
[NAME AND ADDRESS OF
INDEPENDENT DIRECTOR]
- ------------------------------------
- ------------------------------------
- ------------------------------------
Re: Issuance of Shares to Independent Directors
Dear :
--------------------
In connection with your election to the Board of Directors of Triton PCS
Holdings, Inc. a Delaware corporation (hereinafter referred to as the "Company")
pursuant to Section 3.1(a)(ii) of the Company's Stockholders' Agreement dated as
of February 4, 1998 among the Company and its stockholders, on the date hereof
you (hereinafter referred to as "Director") have been issued
shares (the "Shares") of the common stock, par value
- ----------------------
$0.01 per share (the "Common Stock") of the Company. As a condition to such
issuance, Director has joined in the Stockholders' Agreement pursuant to which
Director (as a "Stockholder" as referred to therein) has agreed to be bound by
all of the provisions contained therein.
The Shares shall vest over a five-year period, commencing with the first
anniversary of the date hereof, as follows:
First Anniversary 20%
Second Anniversary 20%
Third Anniversary 20%
Fourth Anniversary 20%
Fifth Anniversary 20%
---
Total 100%
provided, however, that in the event of any Change of Control (as hereinafter
defined) prior to the termination of Director's ceasing to be a member of the
Board for any reason, in addition to any Shares that had theretofore vested in
accordance with the foregoing general schedule, all Unvested Shares (as
hereinafter defined) shall vest immediately upon such Change of Control. As
used herein, the term "Change of Control" shall mean any transaction or event,
or series of transactions or events, whether voluntary or involuntary, that
results in, or as a consequence of which, any of the following
1
<PAGE>
events shall occur: (A) any Person (as defined in the Stockholders' Agreement)
that is not an owner of shares of capital stock of the Company on the date of
execution of the Stockholders' Agreement shall acquire, directly or indirectly,
Beneficial Ownership (as defined in Rule 13d-3 of the Securities Exchange Act of
1934, as amended) of more than 50% of the voting stock of the Company except in
connection with any initial public offering of the Company's equity securities,
(B) any sale of all or substantially all of the assets of the Company, or (C) a
proxy contest for the election of directors of the Company results in the
persons constituting the Board of Directors of the Company immediately prior to
the initiation of such proxy contest ceasing to constitute a majority of the
Board of Directors upon the conclusion of such proxy contest.
In order to induce the Company to issue the Shares to Director, Director
hereby agrees that as of any date, the Shares shall be subject to repurchase by
the Company in accordance with the terms of this letter agreement, except to the
extent the Shares shall have theretofore vested in accordance with the terms set
forth above.
As promptly as practicable following the Director's ceasing to be a member
of the Board for any reason, Director shall sell to the Company, and the Company
shall purchase from Director, all of the Shares that have not theretofore vested
in accordance with the terms set forth above (the "Unvested Shares") at a price
per Share equal to Director's original per Share purchase price ($0.01).
The closing of any such purchase and sale shall take place at the Company's
offices on a date mutually agreed by Director or his legal representative and
the Company, but not later than 30 days after the date of Director's cessation
as a member of the Board. At such closing, the Company shall deliver to Director
or such legal representative a check in the amount of the aggregate repurchase
price and, upon delivery thereof, the Company shall become the legal and
beneficial owner of the Unvested Shares being repurchased and all rights and
interests therein or relating thereto, and the Company shall have the right to
retain and transfer to its own name the shares of Common Stock being repurchased
by the Company. Whenever the Company shall have the right to repurchase Common
Stock hereunder, the Company may designate and assign one or more employees,
officers, directors or stockholders of the Company or other persons or
organizations to exercise all or a part of the Company's repurchase rights
hereunder and purchase all or a part of such Common Stock.
Except for the escrow described herein or the transfer of the Shares to the
Company or its assignees contemplated hereby, none of the Unvested Shares or any
beneficial interest therein shall be transferred, encumbered or otherwise
disposed of in any way.
The Certificate(s) representing Unvested Shares shall be held by the
Secretary of the Company as escrow holder (the "Escrow Holder"), along with a
stock power executed by Director in blank. The Escrow Holder is hereby directed
to permit transfer of the Shares only in accordance with this Agreement. In the
event further instructions are desired by the Escrow Holder, he shall be
entitled to rely upon directions executed by a majority of the authorized number
of the Company's Board of Directors. The Escrow Holder shall have no liability
for any act or omission hereunder while acting in good faith in the exercise of
his own judgment. If the Company or any assignee repurchases any of the Shares
pursuant hereto, the Escrow Holder, upon receipt of written notice of such
2
<PAGE>
repurchase from the proposed transferee, shall take all steps necessary to
accomplish such repurchase. From time to time, upon Director's request, the
Escrow Holder shall: (i) cancel the certificate(s) held by the Escrow Holder
and Director representing the Shares, (ii) cause a new certificate to be issued
representing all the Shares that have vested in accordance with the terms set
forth above, which certificate the Escrow Holder shall deliver to Director, and
(iii) cause a new certificate to be issued representing the then remaining
Unvested Shares, which certificate shall be held in escrow by the Escrow Holder
in accordance with the provisions of this paragraph. Subject to the terms
hereof, Director shall have all the rights of a stockholder with respect to the
Shares while they are held in escrow, including without limitation, the right to
vote the Shares and receive any cash dividends declared thereon. If, from time
to time during the term of the Company's repurchase right, there is (a) any
stock dividend, stock split or other change in the Shares, or (b) any merger or
sale of all or substantially all of the assets or other acquisition of the
Company, any and all new, substituted or additional securities to which Director
is entitled by reason of his ownership of the Shares shall be immediately
subject to this escrow, deposited with the Escrow Holder and included thereafter
as "Shares" for purposes hereof and the Company's repurchase right.
The share certificates evidencing the Shares shall be endorsed with the
following legends (in addition to any legend required to be placed thereon by
applicable state securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CON NECTION WITH, THE SALE OR
DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE EFFECTED WITHOUT
AN EFFECTIVE REGIS TRATION STATEMENT RELATED THERETO OR AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED
UNDER THE SECURITIES ACT OF 1933.
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANS FERRED ONLY
IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE
STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.
Intending to be legally bound, the parties have executed this letter
agreement as of the date first above written.
DIRECTOR: COMPANY:
TRITON PCS HOLDINGS, INC.
By:
- ------------------------------- ----------------------------------
Name:
Title:
3
<PAGE>
EXHIBIT 10.25
Triton PCS Holdings, Inc.
101 Lindenwood Drive , Suite 125
Malvern, PA 19355
June 26, 1998
Scott Anderson
4725 Somerset Place, S.E.
Bellevue, WA 98006
Re: Issuance of Shares to Independent Directors
Dear Scott:
In connection with your election to the Board of Directors of Triton PCS
Holdings, Inc. a Delaware corporation (hereinafter referred to as the "Company")
pursuant to Section 3.1(a)(ii) of the Company's Stockholders' Agreement dated as
of February 4, 1998 among the Company and its stockholders, on the date hereof
you (hereinafter referred to as "Director") have been issued 707 shares (the
"Shares") of the common stock, par value $0.01 per share (the "Common Stock") of
the Company. As a condition to such issuance, Director has joined in the
Stockholders' Agreement pursuant to which Director (as a "Stockholder" as
referred to therein) has agreed to be bound by all of the provisions contained
therein.
Although the Shares were not issued until the date hereof, the Shares shall
vest on the following schedule:
February 4, 1999 20%
February 4, 2000 20%
February 4, 2001 20%
February 4, 2002 20%
February 4, 2003 20%
---
Total 100%
provided, however, that in the event of any Change of Control (as hereinafter
defined) prior to the termination of Director's ceasing to be a member of the
Board for any reason, in addition to any Shares that had theretofore vested in
accordance with the foregoing general schedule, all Unvested Shares (as
hereinafter defined) shall vest immediately upon such Change of Control. As used
herein, the term "Change of Control" shall mean any transaction or event, or
series of transactions or events, whether voluntary or involuntary, that results
in, or as a consequence of which, any of the following events shall occur: (A)
any Person (as defined in the Stockholders' Agreement) that is not an owner of
shares of capital stock of the Company on the date of execution of the
Stockholders' Agreement shall acquire, directly or indirectly, Beneficial
Ownership (as defined in Rule 13d-3 of the Securities Exchange Act of 1934, as
amended) of
<PAGE>
more than 50% of the voting stock of the Company except in connection with any
initial public offering of the Company's equity securities, (B) any sale of all
or substantially all of the assets of the Company, or (C) a proxy contest for
the election of directors of the Company results in the persons constituting the
Board of Directors of the Company immediately prior to the initiation of such
proxy contest ceasing to constitute a majority of the Board of Directors upon
the conclusion of such proxy contest.
In order to induce the Company to issue the Shares to Director, Director
hereby agrees that as of any date, the Shares shall be subject to repurchase by
the Company in accordance with the terms of this letter agreement, except to the
extent the Shares shall have theretofore vested in accordance with the terms set
forth above.
As promptly as practicable following the Director's ceasing to be a member
of the Board for any reason, Director shall sell to the Company, and the Company
shall purchase from Director, all of the Shares that have not theretofore vested
in accordance with the terms set forth above (the "Unvested Shares") at a price
per Share equal to Director's original per Share purchase price ($0.01).
The closing of any such purchase and sale shall take place at the Company's
offices on a date mutually agreed by Director or his legal representative and
the Company, but not later than 30 days after the date of Director's cessation
as a member of the Board. At such closing, the Company shall deliver to Director
or such legal representative a check in the amount of the aggregate repurchase
price and, upon delivery thereof, the Company shall become the legal and
beneficial owner of the Unvested Shares being repurchased and all rights and
interests therein or relating thereto, and the Company shall have the right to
retain and transfer to its own name the shares of Common Stock being repurchased
by the Company. Whenever the Company shall have the right to repurchase Common
Stock hereunder, the Company may designate and assign one or more employees,
officers, directors or stockholders of the Company or other persons or
organizations to exercise all or a part of the Company's repurchase rights
hereunder and purchase all or a part of such Common Stock.
Except for the escrow described herein or the transfer of the Shares to the
Company or its assignees contemplated hereby, none of the Unvested Shares or any
beneficial interest therein shall be transferred, encumbered or otherwise
disposed of in any way.
The Certificate(s) representing Unvested Shares shall be held by the
Secretary of the Company as escrow holder (the "Escrow Holder"), along with a
stock power executed by Director in blank. The Escrow Holder is hereby directed
to permit transfer of the Shares only in accordance with this Agreement. In the
event further instructions are desired by the Escrow Holder, he shall be
entitled to rely upon directions executed by a majority of the authorized number
of the Company's Board of Directors. The Escrow Holder,
-2-
<PAGE>
shall have no liability for any act or omission hereunder while acting in good
faith in the exercise of his own judgment. If the Company or any assignee
repurchases any of the Shares pursuant hereto, the Escrow Holder, upon receipt
of written notice of such repurchase from the proposed transferee, shall take
all steps necessary to accomplish such repurchase. From time to time, upon
Director's request, the Escrow Holder shall: (i) cancel the certificate(s) held
by the Escrow Holder and Director representing the Shares, (ii) cause a new
certificate to be issued representing all the Shares that have vested in
accordance with the terms set forth above, which certificate the Escrow Holder
shall deliver to Director, and (iii) cause a new certificate to be issued
representing the then remaining Unvested Shares, which certificate shall be held
in escrow by the Escrow Holder in accordance with the provisions of this
paragraph. Subject to the terms hereof, Director shall have all the rights of a
stockholder with respect to the Shares while they are held in escrow, including
without limitation, the right to vote the Shares and receive any cash dividends
declared thereon. If, from time to time during the term of the Company's
repurchase right, there is (a) any stock dividend, stock split or other change
in the Shares, or (b) any merger or sale of all or substantially all of the
assets or other acquisition of the Company, any and all new, substituted or
additional securities to which Director is entitled by reason of his ownership
of the Shares shall be immediately subject to this escrow, deposited with the
Escrow Holder and included thereafter as "Shares" for purposes hereof and the
Company's repurchase right.
The share certificates evidencing the Shares shall be endorsed with the
following legends (in addition to any legend required to be placed thereon by
applicable state securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CON NECTION WITH, THE SALE OR
DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE EFFECTED WITHOUT
AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED
UNDER THE SECURITIES ACT OF 1933.
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANS FERRED ONLY
IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE
STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.
Intending to be legally bound, the parties have executed this letter
agreement as of the date first above written.
DIRECTOR: COMPANY:
TRITON PCS HOLDINGS, INC.
/s/ Scott Anderson By: /s/ David D. Clark
- -------------------------- -------------------------------------
Scott Anderson David D. Clark, Senior Vice President
-3-
<PAGE>
EXHIBIT 10.26
AMENDMENT NO.1 TO LETTER AGREEMENT
----------------------------------
AMENDMENT NO.1 TO LETTER AGREEMENT ("Agreement"), dated as of June 29,
1998, by and among TRITON MANAGEMENT COMPANY, INC., a Delaware corporation
(the "Company"), TRITON PCS HOLDINGS, INC., a Delaware corporation formerly
known as Triton PCS, Inc. ("Triton"), and SCOTT ANDERSON ("Director").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Director is the record and beneficial owner of 707 shares
(the "Original Shares") of Triton's common stock, par value $.01 per share (the
"Common Stock"); and
WHEREAS, the Company, Triton and Director are parties to that certain
Letter Agreement dated as of June 26, 1998 (the "Letter Agreement") providing
for, among other things, certain rights and obligations of the parties
respecting the Original Shares; and
WHEREAS, on the date hereof Triton has entered into a certain
Preferred Stock Purchase Agreement dated as of the date hereof (the "Purchase
Agreement") among Triton, the Cash Equity Investors, the Management Stockholders
and the Independent Directors party thereto (as each such term is defined in the
Purchase Agreement); and
WHEREAS, in connection with the Myrtle Beach Closing (as defined in
the Purchase Agreement), Director was awarded on the date hereof an additional
140.11 shares of Common Stock (the "Myrtle Beach Shares"), and Director is
scheduled to receive additional shares of Common Stock in connection with the
consummation of certain other transactions contemplated by the Purchase
Agreement; and
WHEREAS, the parties desire to amend the Letter Agreement to reflect
the issuance and potential future issuances of shares of Common Stock to
Director pursuant to the Purchase Agreement;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the Company, Triton and Director, intending to be legally bound,
hereby agree as follows:
1. Amendment to Definition. From and after the date hereof, all
-----------------------
references to the term "Shares", as that term is defined in the Letter
Agreement, shall include the Original Shares, the Myrtle Beach Shares, and any
other shares of Common Stock that are awarded to Director pursuant to the
Purchase Agreement.
<PAGE>
2. No Further Changes. Except for such amendment, all other terms and
------------------
conditions of the Letter Agreement shall remain the same and continue in full
force and effect, and the Letter Agreement, as amended hereby, shall constitute
the legally valid and binding obligation of the parties hereto enforceable in
accordance with its terms.
IN WITNESS WHEREOF, each of the Company and Triton has caused this
Agreement to be executed by a duly authorized officer, and Director has hereunto
set his hand as of the day and year first above written.
COMPANY:
TRITON MANAGEMENT COMPANY, INC.
By: /s/ Steven R. Skinner
------------------------------
Steven R. Skinner, President
TRITON:
TRITON PCS HOLDINGS, INC.
------------------------------
By: /s/ Steven R. Skinner
------------------------------
Steven R. Skinner, President
Director:
Scott Anderson
------------------------------
Scott Anderson
2
<PAGE>
EXHIBIT 10.27
Triton PCS Holdings, Inc.
101 Lindenwood Drive , Suite 125
Malvern, PA 19355
June 26, 1998
John Beletic
- -----------------
- -----------------
Re: Issuance of Shares to Independent Directors
Dear John:
In connection with your election to the Board of Directors of Triton PCS
Holdings, Inc. a Delaware corporation (hereinafter referred to as the "Company")
pursuant to Section 3.1(a)(ii) of the Company's Stockholders' Agreement dated as
of February 4, 1998 among the Company and its stockholders, on the date hereof
you (hereinafter referred to as "Director") have been issued 707 shares (the
"Shares") of the common stock, par value $0.01 per share (the "Common Stock") of
the Company. As a condition to such issuance, Director has joined in the
Stockholders' Agreement pursuant to which Director (as a "Stockholder" as
referred to therein) has agreed to be bound by all of the provisions contained
therein.
Although the Shares were not issued until the date hereof, the Shares shall
vest on the following schedule:
February 4, 1999 20%
February 4, 2000 20%
February 4, 2001 20%
February 4, 2002 20%
February 4, 2003 20%
---
Total 100%
provided, however, that in the event of any Change of Control (as hereinafter
defined) prior to the termination of Director's ceasing to be a member of the
Board for any reason, in addition to any Shares that had theretofore vested in
accordance with the foregoing general schedule, all Unvested Shares (as
hereinafter defined) shall vest immediately upon such Change of Control. As used
herein, the term "Change of Control" shall mean any transaction or event, or
series of transactions or events, whether voluntary or involuntary, that results
in, or as a consequence of which, any of the following events shall occur: (A)
any Person (as defined in the Stockholders' Agreement) that is not an owner of
shares of capital stock of the Company on the date of execution of the
Stockholders' Agreement shall acquire, directly or indirectly, Beneficial
Ownership (as defined in Rule 13d-3 of the Securities Exchange Act of 1934, as
amended) of
<PAGE>
more than 50% of the voting stock of the Company except in connection with any
initial public offering of the Company's equity securities, (B) any sale of all
or substantially all of the assets of the Company, or (C) a proxy contest for
the election of directors of the Company results in the persons constituting the
Board of Directors of the Company immediately prior to the initiation of such
proxy contest ceasing to constitute a majority of the Board of Directors upon
the conclusion of such proxy contest.
In order to induce the Company to issue the Shares to Director, Director
hereby agrees that as of any date, the Shares shall be subject to repurchase by
the Company in accordance with the terms of this letter agreement, except to the
extent the Shares shall have theretofore vested in accordance with the terms set
forth above.
As promptly as practicable following the Director's ceasing to be a member
of the Board for any reason, Director shall sell to the Company, and the Company
shall purchase from Director, all of the Shares that have not theretofore vested
in accordance with the terms set forth above (the "Unvested Shares") at a price
per Share equal to Director's original per Share purchase price ($0.01).
The closing of any such purchase and sale shall take place at the Company's
offices on a date mutually agreed by Director or his legal representative and
the Company, but not later than 30 days after the date of Director's cessation
as a member of the Board. At such closing, the Company shall deliver to Director
or such legal representative a check in the amount of the aggregate repurchase
price and, upon delivery thereof, the Company shall become the legal and
beneficial owner of the Unvested Shares being repurchased and all rights and
interests therein or relating thereto, and the Company shall have the right to
retain and transfer to its own name the shares of Common Stock being repurchased
by the Company. Whenever the Company shall have the right to repurchase Common
Stock hereunder, the Company may designate and assign one or more employees,
officers, directors or stockholders of the Company or other persons or
organizations to exercise all or a part of the Company's repurchase rights
hereunder and purchase all or a part of such Common Stock.
Except for the escrow described herein or the transfer of the Shares to the
Company or its assignees contemplated hereby, none of the Unvested Shares or any
beneficial interest therein shall be transferred, encumbered or otherwise
disposed of in any way.
The Certificate(s) representing Unvested Shares shall be held by the
Secretary of the Company as escrow holder (the "Escrow Holder"), along with a
stock power executed by Director in blank. The Escrow Holder is hereby directed
to permit transfer of the Shares only in accordance with this Agreement. In the
event further instructions are desired by the Escrow Holder, he shall be
entitled to rely upon directions executed by a majority of the authorized number
of the Company's Board of Directors. The Escrow Holder shall have no liability
for any act or omission hereunder while acting in good faith in the exercise of
his own judgment. If the Company or any assignee repurchases any of the Shares
pursuant hereto, the Escrow Holder,
-2-
<PAGE>
upon receipt of written notice of such repurchase from the proposed transferee,
shall take all steps necessary to accomplish such repurchase. From time to time,
upon Director's request, the Escrow Holder shall: (i) cancel the certificate(s)
held by the Escrow Holder and Director representing the Shares, (ii) cause a new
certificate to be issued representing all the Shares that have vested in
accordance with the terms set forth above, which certificate the Escrow Holder
shall deliver to Director, and (iii) cause a new certificate to be issued
representing the then remaining Unvested Shares, which certificate shall be held
in escrow by the Escrow Holder in accordance with the provisions of this
paragraph. Subject to the terms hereof, Director shall have all the rights of a
stockholder with respect to the Shares while they are held in escrow, including
without limitation, the right to vote the Shares and receive any cash dividends
declared thereon. If, from time to time during the term of the Company's
repurchase right, there is (a) any stock dividend, stock split or other change
in the Shares, or (b) any merger or sale of all or substantially all of the
assets or other acquisition of the Company, any and all new, substituted or
additional securities to which Director is entitled by reason of his ownership
of the Shares shall be immediately subject to this escrow, deposited with the
Escrow Holder and included thereafter as "Shares" for purposes hereof and the
Company's repurchase right.
The share certificates evidencing the Shares shall be endorsed with the
following legends (in addition to any legend required to be placed thereon by
applicable state securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CON NECTION WITH, THE SALE OR
DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE EFFECTED WITHOUT
AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED
UNDER THE SECURITIES ACT OF 1933.
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANS FERRED ONLY
IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE
STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.
Intending to be legally bound, the parties have executed this letter
agreement as of the date first above written.
DIRECTOR: COMPANY:
TRITON PCS HOLDINGS, INC.
By: /s/ David D. Clark
- ------------------------- -------------------------------------
John Beletic David D. Clark, Senior Vice President
-3-
<PAGE>
EXHIBIT 10.28
AMENDMENT NO.1 TO LETTER AGREEMENT
----------------------------------
AMENDMENT NO.1 TO LETTER AGREEMENT ("Agreement"), dated as of June 29,
1998, by and among TRITON MANAGEMENT COMPANY, INC., a Delaware corporation
(the "Company"), TRITON PCS HOLDINGS, INC., a Delaware corporation formerly
known as Triton PCS, Inc. ("Triton"), and JOHN BELETIC ("Director").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Director is the record and beneficial owner of 707 shares
(the "Original Shares") of Triton's common stock, par value $.01 per share (the
"Common Stock"); and
WHEREAS, the Company, Triton and Director are parties to that certain
Letter Agreement dated as of June 26, 1998 (the "Letter Agreement") providing
for, among other things, certain rights and obligations of the parties
respecting the Original Shares; and
WHEREAS, on the date hereof Triton has entered into a certain
Preferred Stock Purchase Agreement dated as of the date hereof (the "Purchase
Agreement") among Triton, the Cash Equity Investors, the Management Stockholders
and the Independent Directors party thereto (as each such term is defined in the
Purchase Agreement); and
WHEREAS, in connection with the Myrtle Beach Closing (as defined in
the Purchase Agreement), Director was awarded on the date hereof an additional
140.11 shares of Common Stock (the "Myrtle Beach Shares"), and Director is
scheduled to receive additional shares of Common Stock in connection with the
consummation of certain other transactions contemplated by the Purchase
Agreement; and
WHEREAS, the parties desire to amend the Letter Agreement to reflect
the issuance and potential future issuances of shares of Common Stock to
Director pursuant to the Purchase Agreement;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the Company, Triton and Director, intending to be legally bound,
hereby agree as follows:
1. Amendment to Definition. From and after the date hereof, all
-----------------------
references to the term "Shares", as that term is defined in the Letter
Agreement, shall include the Original Shares, the Myrtle Beach Shares, and any
other shares of Common Stock that are awarded to Director pursuant to the
Purchase Agreement.
<PAGE>
2. No Further Changes. Except for such amendment, all other terms and
------------------
conditions of the Letter Agreement shall remain the same and continue in full
force and effect, and the Letter Agreement, as amended hereby, shall constitute
the legally valid and binding obligation of the parties hereto enforceable in
accordance with its terms.
IN WITNESS WHEREOF, each of the Company and Triton has caused this
Agreement to be executed by a duly authorized officer, and Director has hereunto
set his hand as of the day and year first above written.
COMPANY:
TRITON MANAGEMENT COMPANY, INC.
By: /s/ Steven R. Skinner
--------------------------------------------
Steven R. Skinner, President
TRITON:
TRITON PCS HOLDINGS, INC.
By: /s/ Steven R. Skinner
--------------------------------------------
Steven R. Skinner, President
Director:
/s/ John Beletic
--------------------------------------------
John Beletic
2
<PAGE>
EXHIBIT 10.29
ASSET PURCHASE AGREEMENT
between
AT&T WIRELESS PCS INC.
and
TRITON PCS HOLDINGS, INC.
Dated as of August 20, 1998
<PAGE>
ASSET PURCHASE AGREEMENT
------------------------
ASSET PURCHASE AGREEMENT (the "Agreement"), dated as of August 20,
---------
1998, between AT&T WIRELESS PCS INC., a Delaware corporation ("AT&T PCS"), and
--------
TRITON PCS HOLDINGS, INC., a Delaware corporation (the "Company").
-------
WHEREAS, AT&T PCS has been granted the PCS License described on Schedule I
(the "PCS License");
-----------
WHEREAS, AT&T PCS and Triton PCS Operating Company, L.L.C., a Delaware
limited liability company and Subsidiary (as hereinafter defined) of the Company
("Triton Operating Co."), have entered into a certain Construction and Operating
Agreement dated July 31, 1998 (the "Management Agreement") pursuant to which
Triton Operating Co. will manage and operate the System during the period prior
to Closing (as hereinafter defined);
WHEREAS, AT&T PCS wishes to sell to the Company, and the Company wishes to
acquire from AT&T PCS, the AT&T PCS Contributed License (as hereinafter defined)
and certain of the assets of AT&T PCS used in the operation of the System (as
hereinafter defined), all on the terms and subject to the conditions herein set
forth;
NOW, THEREFORE, in consideration of the promises and the mutual
representations, warranties, covenants, conditions and agreements hereinafter
set forth, the parties agree as follows:
ARTICLE I
DEFINITIONS
-----------
For purposes of this Agreement:
"Affiliate" means, with respect to any Person, any other Person that
---------
directly, or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with that Person. For purposes of this
definition, "control" (including the terms "controlling" and "controlled") means
------- ----------- ----------
the power to direct or cause the direction of the management and policies of a
Person, directly or indirectly, whether through the ownership of securities or
partnership or other ownership interests, by contract or otherwise, provided
that the Company and Triton Operating Co. shall not be deemed to control AT&T
PCS by reason of the Management Agreement or otherwise.
"Assigned Agreements" has the meaning set forth in Section 2.1(d).
-------------------
"Assumed Liabilities" has the meaning set forth in Section 2.4.
-------------------
"AT&T PCS" has the meaning set forth in the preamble.
--------
<PAGE>
"AT&T PCS Contributed License" has the meaning set forth in Section 2.1.
----------------------------
"AT&T PCS Material Adverse Effect" means a material adverse effect on the
--------------------------------
AT&T PCS Contributed License or the Purchased Assets, taken as a whole, or on
the Transactions.
"AT&T PCS Retained License" has the meaning set forth in Section 2.1.
-------------------------
"Business Day" means any day other than a Saturday, Sunday or a legal
------------
holiday in New York, New York or any other day on which commercial banks in New
York, New York are authorized by law or governmental decree to close.
"BTA" means the unit of division (of which there are four hundred ninety-
---
three (493)) for the United States of America, devised by Rand McNally based
upon geography, population and other factors, which units form the basis for the
auction by the FCC of a portion of the Licenses for PCS Systems for Basic
Trading Areas, as defined by the FCC.
"Cash Purchase Price" has the meaning set forth in Section 2.3.
-------------------
"Claim" has the meaning set forth in Section 8.4.
-----
"Closing" has the meaning set forth in Section 3.1.
-------
"Closing Date" has the meaning set forth in Section 3.1.
------------
"Company" has the meaning set forth in the preamble.
-------
"Company Material Adverse Effect" means a material adverse effect on the
-------------------------------
business, financial condition, assets, liabilities or results of operations,
taken as a whole, of the Company or on the AT&T PCS Contributed License or the
Purchased Assets, taken as a whole, or on the Transactions.
"Company Plan" has the meaning set forth in Section 4.5(d).
------------
"Confidential Information" means any and all information regarding the
------------------------
business, finances, operations, products, services and customers of the Person
specified and its Affiliates, in written or oral form or in any other medium.
"Consents" means all consents and approvals of Governmental Authorities or
--------
other third parties necessary to authorize, approve or permit the parties hereto
to consummate the Transactions and for the Company to operate its business after
the Closing Date as currently contemplated.
<PAGE>
"Continuing Employees" has the meaning set forth in Section 4.5(a).
--------------------
"Designated Purchaser" has the meaning set forth in Section 10.4.
--------------------
"Employee" has the meaning set forth in Section 4.5(a).
--------
"Environmental Law" means any of the following: the Resource Conservation
-----------------
Recovery Act, the Comprehensive Environmental Responsibility Compensation and
Liability Act, the Superfund Amendments and Reauthorization Act, the Toxic
Substances Control Act, the Hazardous Materials Transportation Act, the Clean
Air Act, the Clean Water Act, and other similar Federal and state and local
laws, as amended, together with all regulations issued or promulgated
thereunder, relating to pollution, the protection of the environment or the
health and safety of workers or the general public.
"Excluded Liabilities" has the meaning set forth in Section 2.4(a).
--------------------
"Excluded Periods" has the meaning set forth in Section 2.4(a).
----------------
"FCC" means the Federal Communications Commission or similar regulatory
---
authority established in replacement thereof.
"FCC Law" means the Communications Act of 1934, as amended, including as
-------
amended by the Telecommunications Act of 1996, and the rules, regulations and
policies promulgated thereunder.
"Final Order" has the meaning set forth in Section 7.1(b).
-----------
"Governmental Authority" means a Federal, state or local court,
----------------------
legislature, governmental agency, commission or regulatory or administrative
authority or instrumentality.
"Hazardous Material" shall mean anything defined as a "hazardous
------------------
substance," "hazardous material," "hazardous waste," "pollutant," "contaminant,"
"toxic substance" or other similar item in any Environmental Law.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
-------
1976, as amended, and the rules and regulations promulgated thereunder.
"Indemnified Party" has the meaning set forth in Section 8.4.
-----------------
"Indemnifying Party" has the meaning set forth in Section 8.4.
------------------
"Independent Accountant" means Arthur Andersen LLP.
----------------------
"Law" means applicable common law and any statute, ordinance, code or
---
other
<PAGE>
law, rule, permit, permit condition, regulation, order, decree, technical or
other standard, requirement or procedure enacted, adopted, promulgated, applied
or followed by any Governmental Authority.
"License" means a license, permit, certificate of authority, waiver,
-------
approval, certificate of public convenience and necessity, registration or other
authorization, consent or clearance to construct or operate a facility,
including any emissions, discharges or releases therefrom, or to transact an
activity or business, to construct a tower or to use an asset or process, in
each case issued or granted by a Governmental Authority.
"License Transfer" has the meaning set forth in Section 3.2(a).
----------------
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
----
charge, security interest, right of first refusal or right of others therein, or
encumbrance of any nature whatsoever in respect of such asset.
"Losses" has the meaning set forth in Section 8.2.
------
"Management Agreement" has the meaning set forth in the recital
--------------------
clauses.
"Material Agreements" means those Assigned Agreements designated to be
-------------------
material on Exhibit 2.1(d) and as to which AT&T PCS shall be required to obtain
the consent of the other party thereto to the assignment of such Assigned
Agreement to the Company.
"MTA" means the unit of division (of which there are fifty-one (51))
---
for the United States of America, devised by Rand McNally based upon geography,
population and other factors, which units form the basis for the auction by the
FCC of a portion of the Licenses for PCS Systems for Major Trading Areas, as
defined by the FCC.
"New York Courts" has the meaning set forth in Section 10.6.
---------------
"Person" means an individual, corporation, partnership, limited
------
liability company, association, joint stock company, Governmental Authority,
business trust, unincorporated organization, or other legal entity.
"PCS" means Personal Communications Services, which is the term to
---
describe the services that may be provided as a result of obtaining the AT&T PCS
Contributed License under FCC Law.
"Potentially Rejected Sites" has the meaning set forth in Section
--------------------------
7.2(g).
"Purchase Price" has the meaning set forth in Section 2.3.
--------------
<PAGE>
"Purchased Assets" means the assets described in Section 2.1.
----------------
"Representatives" has the meaning set forth in Section 4.2(a).
---------------
"Search Results" has the meaning set forth in Section 4.10.
--------------
"Section 8.2 Indemnified Party" has the meaning set forth in
-----------------------------
Section 8.2.
"Section 8.3 Indemnified Party" has the meaning set forth in
-----------------------------
Section 8.3.
"Securities" means the shares of Series D Preferred Stock being issued
----------
hereunder, together with any shares of Common Stock of the Company issued upon
conversion of shares of Series D Preferred Stock.
"Securities Act" means the Securities Act of 1933, as amended.
--------------
"Series D Preferred Stock" has the meaning set forth in Section 2.3.
------------------------
"Stockholders Agreement" means the Stockholders Agreement of the
----------------------
Company, dated as of February 4, 1998, as the same may be amended, modified or
supplemented in accordance with the terms thereof.
"Subsidiary" shall mean, with respect to any Person, a corporation or
----------
other entity of which 50% or more of the voting power or the voting equity
securities or equity interest is owned, directly or indirectly, by such Person.
"System" means the wireless PCS telecommunications system constructed
------
by AT&T PCS in the Norfolk, Virginia BTA.
"System Cell Sites" has the meaning set forth in Section 4.11.
-----------------
"Third-Party Proposal" has the meaning set forth in Section 4.9.
--------------------
"Transactions" means the transactions contemplated by this Agreement.
------------
"Triton Operating Co." has the meaning set forth in the recital
--------------------
clauses.
When a reference is made in this Agreement to an Article or a Section, such
reference shall be to an Article or a Section of this Agreement unless otherwise
indicated. Unless the context otherwise requires, the terms defined hereunder
shall have the meanings therein specified for all purposes of this Agreement,
applicable to both the singular and plural forms of any of the terms defined
herein. Whenever the words "include," "includes" or "including" are used in this
Agreement, they shall be deemed to be followed by the words "without
limitation." The use of a
<PAGE>
gender herein shall be deemed to include the neuter, masculine and feminine
genders whenever necessary or appropriate. Whenever the word "herein" or
"hereof" is used in this Agreement, it shall be deemed to refer to this
Agreement and not to a particular Section of this Agreement unless expressly
stated otherwise.
ARTICLE II
PURCHASE AND SALE OF ASSETS; PAYMENT OF CONSIDERATION;
------------------------------------------------------
CERTAIN RESTRICTIONS ON TRANSFER
--------------------------------
2.1 Purchase and Sale of Purchased Assets. Upon the terms and subject to
-------------------------------------
the conditions hereof and in reliance upon the representations, warranties,
covenants and agreements herein contained: (a) AT&T PCS shall partition and
disaggregate the PCS License to create, as more particularly described on
Exhibit 2.1, (i) a License (the "AT&T PCS Contributed License") providing in the
----------------------------
aggregate the right to use 20 MHz of authorized frequencies to provide broadband
PCS services throughout the entirety of the Norfolk, Virginia BTA, and (ii) a
License (the "AT&T PCS Retained License") providing in the aggregate the right
-------------------------
to use the balance of the authorized frequencies under the PCS License to
provide broadband PCS services throughout the entirety of the Norfolk-Richmond,
Virginia MTA (which right shall be exercised by AT&T PCS in accordance with the
Stockholders Agreement), and (b) at the Closing, AT&T PCS shall sell, transfer,
assign, convey and deliver to the Company (or one or more Designated
Purchasers), free and clear of all Liens (other than those arising under any of
the obligations being assumed by the Company pursuant to Section 2.4), and the
Company shall purchase, acquire and accept from AT&T PCS, the AT&T PCS
Contributed License. In addition to the AT&T PCS Contributed License, upon the
terms and subject to the conditions hereof and in reliance upon the
representations, warranties, covenants and agreements herein contained, at the
Closing, AT&T PCS shall sell, transfer, assign, convey and deliver to the
Company (or one or more Designated Purchasers), free and clear of all Liens
(other than Liens securing the Assumed Liabilities), and the Company shall
purchase, acquire and accept from AT&T PCS, the following assets of AT&T PCS
used in the operation of the System as the same exist at the Closing Date
(together with the AT&T PCS Contributed License, the "Purchased Assets"):
(a) the fixed assets of AT&T PCS listed on Exhibit 2.1(a) (consisting
of real property, buildings and improvements to real property, furniture,
furnishings, fixtures, leasehold improvements, office or other equipment,
vehicles, machinery and equipment, switches, cell site equipment, electrical
power units, antennas, transmission lines, microwave equipment, tools and
computer hardware and software listed on Exhibit 2.1(a)) or acquired after the
date hereof for use exclusively in the operation of the System;
(b) supplies of AT&T PCS held for use exclusively in the operation of
the System;
(c) all prepaid property taxes, prepaid rent, prepaid freight and
other prepaid
<PAGE>
expenses, deposits and deferred charges of AT&T PCS relating to the operation of
the System;
(d) all rights and benefits under all leases, contracts and other
agreements listed on Exhibit 2.1(d) (the "Assigned Agreements") or entered into
after the date hereof and prior to the Closing Date in accordance with Section
4.3(c) or the Management Agreement;
(e) any operating data, books and records, customer and subscriber
lists and credit information, engineering data, drawings and advertising and
promotional materials, suppliers' lists, manuals, blueprints, employee payroll
and benefit records, economic, demographic and other studies and construction
reports relating exclusively to the System. AT&T PCS may make and retain, or
the Company will furnish to AT&T PCS, copies of such records as reasonably
required by AT&T PCS; and
(f) all other assets used by AT&T PCS exclusively in the business
relating to the System.
The Purchased Assets constitute all of the assets of AT&T PCS which are
used exclusively in the operation of the System and not used by AT&T PCS in any
other of its operations.
2.2 Excluded Assets. Notwithstanding anything to the contrary herein
---------------
contained, there is hereby expressly excluded from the Purchased Assets the
following:
(a) all cash on hand or in banks;
(b) all trade accounts receivable, miscellaneous accounts receivable,
intercompany receivables, claims receivable and notes receivable, whether
relating to the System or otherwise;
(c) subject to the Network Membership License Agreement (as such term
is defined in the Stockholders Agreement), all patents, trade secrets,
inventions, trademarks, service marks, trade names, logos, slogans, copyrights
and mask works (including all registrations and applications for registration of
any of the foregoing), and all other intellectual property rights of any nature
whatsoever of AT&T PCS or its Affiliates, including without limitation any and
all rights to the name and mark "AT&T," any name or mark which incorporates
"AT&T" and any variations, derivations and combinations thereof, whether
relating to the System or otherwise;
(d) AT&T PCS's right to receive payment under the various Cost Sharing
Agreements between AT&T PCS and SprintCom, Inc. relating to co-location by
SprintCom, Inc. of communications equipment at the cell sites leased from the
Virginia Department of Transportation set forth on Exhibit 2.2(d).
(e) all assets of any kind or nature, whether tangible or intangible,
which are not specified herein or are used by AT&T PCS in any of its operations
other than the System; and
<PAGE>
(f) the AT&T PCS Retained License.
2.3 Payment of Consideration. Upon the terms and subject to the
------------------------
conditions hereof and in reliance upon the representations, warranties,
covenants and agreements herein contained, at the Closing, in consideration of
the assignment of the Purchased Assets, the Company shall (i) pay to AT&T PCS by
wire transfer of immediately available funds the amount of Ninety One Million
Five Hundred Eighteen Thousand Six Hundred Fifty One ($91,518,651) Dollars (the
"Cash Purchase Price") (subject to adjustment pursuant to Section 2.4(b) and, in
-------------------
the event that the System Cell Sites shall not have been completed on or prior
to the Closing Date, Section 4.11), (ii) issue and deliver to AT&T PCS
134,813.49 shares of Series D Preferred Stock, par value $0.01 per share
("Series D Preferred Stock"), of the Company and (iii) assume the Assumed
- --------------------------
Liabilities in accordance with Section 2.4 (the Cash Purchase Price, the Series
D Preferred Stock and the assumption of the Assumed Liabilities are collectively
referred to herein as the "Purchase Price").
--------------
2.4 Assumption of Obligations.
-------------------------
(a) On and as of the Closing Date, the Company (or, if applicable, the
Company and any Designated Purchasers, jointly and severally) shall assume and
agree to discharge and perform, when due, the following liabilities and
obligations of AT&T PCS (collectively, the "Assumed Liabilities"): (i) those
-------------------
liabilities and obligations accruing, arising out of or relating to events or
occurrences on or after the date of execution of the Management Agreement under
the Assigned Agreements; and (ii) any and all obligations and liabilities
accruing, arising out of or relating to events or occurrences on or after the
date of execution of the Management Agreement relating to or arising out of the
ownership (after the Closing), use or operation of the System or any of the
Purchased Assets (other than those liabilities and obligations arising out of
(A) a breach by AT&T PCS of this Agreement or the Management Agreement or (B)
any negligence or willful misconduct by AT&T PCS on or after the date of
execution of the Management Agreement or (C) matters relating to the System for
which the Company does not have management responsibility under the Management
Agreement (e.g. employee benefit plans for the System's employees)); provided
that if during any period prior to Closing the Management Agreement is not in
effect (each, an "Excluded Period"), the Assumed Liabilities shall not include
items described in clauses (i) and (ii) above that accrue, arise out of or
relate to events or occurrences during the Excluded Periods. Except for the
Assumed Liabilities, neither the Company nor any of its Affiliates shall assume
or in any way undertake to pay, perform, satisfy or discharge any liabilities
and obligations of AT&T PCS, and AT&T PCS agrees to pay and satisfy when due any
liabilities and obligations relating to or arising out of the ownership, use or
operation of the System or any of the Purchased Assets other than the Assumed
Liabilities (collectively, the "Excluded Liabilities").
--------------------
(b) All payments made by AT&T PCS, and all obligations arising, under
the
<PAGE>
Assigned Agreements shall be prorated as of the Closing Date, and the amounts
thereof allocable or attributable to periods ending prior to the Closing Date
shall be for the account of AT&T PCS and amounts thereof allocable or
attributable to periods commencing on and after the Closing Date shall be for
the account of the Company. For purposes of this Section 2.4(b), AT&T PCS and
the Company agree that amounts expended by AT&T PCS pursuant to Assigned
Agreements with (x) the Virginia Department of Transportation and (y) the
Commonwealth of Virginia, in each case in respect of construction and other
related costs that are credited against AT&T PCS's rental obligations for
periods on or after the Closing Date under leases entered into or to be entered
into pursuant to such Assigned Agreements, shall constitute payments made by
AT&T PCS that are subject to proration pursuant to this Section 2.4(b); provided
that such obligation of the Company to reimburse AT&T PCS in respect of amounts
allocable to periods after the Closing Date pursuant to Assigned Agreements with
the Virginia Department of Transportation shall not exceed $2,600,000. A
preliminary schedule of all adjustments pursuant to this Section 2.4(b) shall be
prepared by AT&T PCS and delivered to the Company at least ten (10) Business
Days prior to the Closing Date. The Company and its representatives will be
provided with supporting documentation used in the preparation thereof by AT&T
PCS. The Company shall have a period of five (5) Business Days to review such
preliminary schedule and supporting documentation and provide AT&T PCS with
written notice of any objections or corrections thereto that the Company may
have. An initial adjustment to the Cash Purchase Price based upon the aggregate
amount of undisputed adjustments on the preliminary schedule shall be made at
the Closing. A final schedule of such adjustments (including the disputed
adjustments) shall be prepared jointly by the Company and AT&T PCS on or prior
to the twentieth (20/th/) Business Day following the Closing Date. In the
absence of mutual agreement regarding such final schedule within such twenty
(20) day period, the parties shall engage the Independent Accountant to
determine the amount of the adjustment to be made pursuant to this Section
2.4(b). The determination of the Independent Accountant shall be final, binding
and conclusive on the parties hereto, and the fees and expenses of the
Independent Accountant shall be borne equally by the parties. A final adjustment
to the Cash Purchase Price based upon such final schedule and payment of the net
amount thereof to which AT&T PCS or the Company shall be entitled under this
Section 2.4(b) shall be made on the twentieth (20/th/) Business Day following
the Closing Date, or upon the determination of the Independent Accountant, as
the case may be. In connection with the final calculation of any such
adjustment, each party shall give to the other party and its agents and
representatives (including its independent auditors and attorneys) and the
Independent Accountant, reasonable access, during normal business hours and upon
reasonable notice, to the records, books, contracts and documents reasonably
requested by such other party or the Independent Accountant for such purpose,
furnish such other party and the Independent Accountant, with all such
information as such other party or the Independent Accountant may reasonably
request for such purpose and cause its appropriate officers, employees,
consultants, agents, accountants and attorneys to cooperate with such attorneys
and representatives and the Independent Accountant in connection therewith.
2.5 No Expansion of Third-Party Rights. The assumption by the Company
----------------------------------
(or, if applicable, the Company and any Designated Purchasers) of the Assumed
Liabilities, and the
<PAGE>
transfer thereof by AT&T PCS to the Company, shall in no way expand the rights
or remedies of any third party against the Company (and, if applicable, such
Designated Purchasers) as compared to the rights and remedies that such third
party would have had against AT&T PCS had the Company (and, if applicable, such
Designated Purchasers) not assumed the Assumed Liabilities. Without limiting the
generality of the preceding sentence, the assumption by the Company (and, if
applicable, such Designated Purchasers) of the Assumed Liabilities shall not
create any third-party beneficiary rights.
2.6 Payment of Certain Expenses. The Company agrees, in the event
---------------------------
the Transactions are consummated, to pay, and save AT&T PCS harmless against,
the reasonable and documented fees and disbursements of AT&T PCS's counsel, up
to a maximum of $50,000 in the aggregate, in connection with (i) the
preparation, negotiation, execution and delivery of this Agreement, the
instruments and documents executed pursuant hereto or in connection herewith,
and (ii) the consummation of the Transactions, including, without limitation,
all legal fees and related expenses incurred in connection with the preparation
and filing of applications on Form 490 with the FCC necessary to effect the
License Transfer.
2.7 Restrictive Legends. Each certificate representing Securities
-------------------
(including the Securities originally issued hereunder or delivered upon
conversion of the Series D Preferred Stock, or delivered in substitution or
exchange for any of the foregoing) will bear a legend reading substantially as
follows until such Securities have been sold pursuant to an effective
registration statement under the Securities Act, Rule 144 under the Securities
Act, or an opinion of counsel reasonably satisfactory in form and substance to
the Company and otherwise in full compliance with any other applicable
restrictions on transfer, including those contained in this Agreement and the
Stockholders Agreement:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE 'ACT'), OR UNDER ANY STATE SECURITIES OR 'BLUE SKY' LAWS. SAID
SECURITIES MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED OR
OTHERWISE DISPOSED OF, UNLESS AND UNTIL REGISTERED UNDER THE ACT AND THE RULES
AND REGULATIONS THEREUNDER AND ALL APPLICABLE STATE SECURITIES OR 'BLUE SKY'
LAWS OR EXEMPTED THEREFROM UNDER THE ACT AND ALL APPLICABLE STATE SECURITIES OR
'BLUE SKY' LAWS."
2.8 Allocation of Purchase Price. On or prior to the Closing Date, the
----------------------------
Company and AT&T PCS shall mutually agree upon the allocation of the Purchase
Price among the Purchased Assets. The parties agree that such allocation shall
be made based upon the relative fair market values of the Purchased Assets as of
the Closing Date. In the absence of mutual agreement within such period, the
parties shall submit promptly the determination of such allocation to
Independent Accountant who will be engaged by the parties to allocate the
Purchase Price among the Purchased Assets based upon their relative fair market
values as of the Closing Date. The
<PAGE>
determination of the Independent Accountant shall be final, binding and
conclusive on the parties hereto, and the fees and expenses of the Independent
Accountant shall be borne equally by the parties. The Company and AT&T PCS agree
to file all tax returns and reports, including Internal Revenue Service Form
8594, in accordance with such allocation and not to take any position
inconsistent therewith unless required to do so pursuant to a "determination" as
such term is defined in Section 1313 of the Code.
ARTICLE III
CLOSING
-------
3.1 Time and Place of Closing. Upon the terms and subject to the
-------------------------
conditions hereof, the closing of the Transactions (the "Closing") shall take
-------
place at the offices of Rubin Baum Levin Constant & Friedman, 30 Rockefeller
Plaza, New York, New York, at 10:00 a.m. local time on the twelfth Business Day
following the date of receipt of the last Consent required by subsections (a)
through (c) of Section 7.1, or at such other place and/or time and/or on such
other date as the parties may agree or as may be necessary to permit the
fulfillment or waiver of the conditions set forth in Article VII (the "Closing
-------
Date"). The Closing shall be deemed to have occurred as of 12:01 a.m. on the
- ----
Closing Date.
3.2 Closing Actions and Deliveries. Upon the terms and subject to
------------------------------
the satisfaction or waiver by the appropriate party, if applicable, of the
conditions set forth in Article VII, to effect the purchase and sale of the
Purchased Assets and the issuance of the Securities in consideration therefor,
the parties shall on the Closing Date take the following actions:
(a) Assignment of License. AT&T PCS shall execute and deliver to the
---------------------
Company one or more instruments of assignment, substantially in the form of
Exhibit 3.2(a), sufficient to assign to the Company (or any Designated
Purchasers) the AT&T PCS Contributed License (such assignment being herein
referred to as the "License Transfer").
----------------
(b) Assignment of Purchased Assets. AT&T PCS shall execute and
------------------------------
deliver to the Company one or more bills of sale or instruments of assignment,
substantially in the form of Exhibit 3.2(b), sufficient to assign to the Company
(or any Designated Purchasers) the Purchased Assets.
(c) Delivery of Cash Purchase Price. The Company shall deliver to
-------------------------------
AT&T PCS the Cash Purchase Price, as adjusted in accordance with Sections 2.4(b)
and 4.11, by wire transfer of immediately available funds.
(d) Delivery of Series D Preferred Stock. The Company shall deliver
------------------------------------
to AT&T PCS stock certificates, duly executed by authorized signatories of the
Company, representing the shares of Series D Preferred Stock to be issued to
AT&T PCS in accordance with the terms of Section 2.3.
<PAGE>
(e) Assumption of Obligations. The Company shall execute and deliver
-------------------------
to AT&T PCS an instrument of assumption, substantially in the form of Exhibit
3.2(e), in respect of the obligations to be assumed by the Company pursuant to
Section 2.4(a).
(f) Other Deliveries.
----------------
(i) AT&T PCS shall execute and deliver or cause to be executed
and delivered to the Company the following additional documents:
(A) original or copies of all Assigned Agreements to the
extent not previously provided to the Company;
(B) the opinion of Rubin Baum Levin Constant & Friedman,
dated the Closing Date, addressed to the Company (and its lenders, if
applicable) and substantially in the form of Exhibit 3.2(f)(i)(B);
(C) the opinion of Young & Jatlow, dated the Closing Date,
addressed to the Company (and its lenders, if applicable) and substantially in
the form of Exhibit 3.2(f)(i)(C);
(D) a certificate of an officer of AT&T PCS, dated the
Closing Date, certifying as to the fulfillment of the conditions set forth in
Sections 7.2(a) and 7.2(b) and that all of the conditions precedent to the
obligations of AT&T PCS hereunder have been waived by AT&T PCS or satisfied;
(E) a certificate of an officer of AT&T PCS, dated the
Closing Date, certifying as to (I) the resolutions adopted by AT&T PCS duly
authorizing the execution, delivery and performance of this Agreement by AT&T
PCS and the execution and delivery by AT&T PCS of all instruments and documents
contemplated hereby and (II) the signatures of the Persons who have been
authorized to execute and deliver this Agreement on behalf of AT&T PCS and any
other agreement executed or to be executed in connection herewith;
(F) A good standing certificate of AT&T PCS from the
Secretary of State of Delaware, dated no earlier than 30 days prior to the
Closing;
(G) The Search Results, as set forth in Section 4.10,
together with all releases, satisfaction pieces and UCC-3 Termination Statements
required to release the Liens on the Purchased Assets shown in the Search
Results (other than Liens securing the Assumed Liabilities).
(H) updated versions of Exhibits 2.1(a) and 2.1(d)
reflecting all acquisitions of Purchased Assets by AT&T PCS since the date
hereof;
<PAGE>
(I) all required consents to the assignments of the
Material Agreements (containing, with respect to the real property leases
included in the Material Agreements, appropriate estoppel representations in
form and substance reasonably satisfactory to the Company); and
(J) all such other documents and instruments as the Company
or its counsel may reasonably request in order to consummate the Transactions.
(ii) The Company shall execute and deliver or cause to be
executed and delivered to AT&T PCS the following additional documents:
(A) the opinion of Kleinbard, Bell & Brecker LLP, dated the
Closing Date, addressed to AT&T PCS and substantially in the form of Exhibit
3.2(f)(ii)(A);
(B) the opinion of Latham & Watkins, dated the Closing
Date, addressed to AT&T PCS and substantially in the form of Exhibit
3.2(f)(ii)(B);
(C) a certificate of an officer of the Company, dated the
Closing Date, certifying as to the fulfillment of the conditions set forth in
Sections 7.3(a) and 7.3(b) and that all of the conditions precedent to the
obligations of the Company hereunder have been waived by the Company or
satisfied;
(D) a certificate of an officer of the Company, dated the
Closing Date, certifying as to (I) the resolutions adopted by the Company duly
authorizing the execution, delivery and performance of this Agreement by the
Company and the execution and delivery by the Company of all instruments and
documents contemplated hereby and (II) the signatures of the Persons who have
been authorized to execute and deliver this Agreement on behalf of the Company
and any other agreement executed or to be executed in connection herewith;
(E) A good standing certificate of the Company from the
Secretary of State of Delaware, dated no earlier than 30 days prior to the
Closing; and
(F) all such other documents and instruments as AT&T PCS or
its counsel may reasonably request in order to consummate the Transactions.
3.3 Closing Costs; Taxes and Fees. The Company shall pay or cause to
-----------------------------
be paid at the Closing or, if due prior to the Closing or thereafter, promptly
when due: (i) all gross receipts taxes, transfer taxes, sales taxes, stamp
taxes, and any other taxes, but excluding any Federal, State or local income
taxes payable in connection with the transfer of the Purchased Assets; and (ii)
one fee under the HSR Act relating to the Transactions hereunder. AT&T PCS
shall pay or cause to be paid at the Closing, or if due prior to the closing or
thereafter, promptly when due, any additional fee under the HSR Act that may be
required to consummate the Transactions.
<PAGE>
ARTICLE IV
COVENANTS
---------
4.1 Consummation of Transactions. Each party shall use all
----------------------------
commercially reasonable efforts to take, or cause to be taken, all actions, and
to do, or cause to be done, all things necessary, proper or advisable and
consistent with applicable law to carry out all of their respective obligations
under this Agreement to consummate the Transactions, which efforts shall include
the following:
(a) The parties shall use all commercially reasonable efforts to cause
the Closing to occur and the Transactions to be consummated in accordance with
the terms hereof, and, without limiting the generality of the foregoing, to
obtain all necessary Consents including the approval of this Agreement and the
Transactions by all Governmental Authorities and agencies, including the FCC,
and to make all filings with and to give all notices to third parties which may
be necessary or reasonably required in order for the parties to consummate the
Transactions.
(b) Each party shall furnish to the other party all information
concerning such party and its Affiliates reasonably required for inclusion in
any application or filing to be made by AT&T PCS or the Company or any other
party in connection with the Transactions or otherwise to comply with applicable
FCC Law.
(c) Upon the request of the other party, each party shall forthwith
execute and deliver, or cause to be executed and delivered, such further
instruments of assignment, transfer, conveyance, endorsement, direction or
authorization and other documents as may reasonably be requested by such party
in order to effectuate the purposes of this Agreement.
(d) Each party covenants and agrees from and after the execution and
delivery of this Agreement to and including the Closing Date as follows:
(i) It is understood that the Closing is subject to prior approval of
the FCC and may be subject to the prior approval of one or more state regulatory
commissions. The parties shall use their best efforts to file with the FCC and
any relevant state agency or agencies, as soon as practicable following the date
hereof and in no event later than ten (10) Business Days from the date hereof, a
joint application requesting the approval of the transfer of the Purchased
Assets to the Company, or its designee. Each of the parties hereto shall
diligently take or cooperate in the taking of all steps which are necessary or
appropriate to expedite the prosecution and favorable consideration of such
applications. The parties covenant and agree to undertake all actions
reasonably requested by the FCC or other regulatory authority and to file such
material as shall be necessary or required to obtain any necessary waivers or
other authority from the FCC or such state agency or agencies in connection with
the foregoing applications.
<PAGE>
(ii) Within fifteen (15) Business Days of the date of execution
hereof, the parties shall file, or cause to be filed, with the Federal Trade
Commission and the Antitrust Division of the Department of Justice any and all
reports or notifications which are required to be filed under the HSR Act or
other Law.
4.2 Confidentiality.
---------------
(a) Each party shall, and shall cause each of its Affiliates, and its
and their respective shareholders, members, managers, directors, officers,
employees and agents (collectively, "Representatives") to, keep secret and
---------------
retain in strictest confidence any and all Confidential Information relating to
any other party that it receives in connection with the negotiation or
performance of this Agreement, and shall not disclose such Confidential
Information, and shall cause its Representatives not to disclose such
Confidential Information, to anyone except the receiving party's Affiliates and
Representatives and any other Person that agrees in writing to keep in
confidence all Confidential Information in accordance with the terms of this
Section 4.2. Until the Closing, each party agrees to use Confidential
Information received from another party only to pursue such Transactions, but
not for any other purpose. All tangible embodiments of Confidential Information
furnished pursuant to this Agreement shall be returned promptly to the party to
whom it belongs upon request by such party.
(b) The obligations set forth in Section 4.2(a) shall be inoperative
with respect to Confidential Information that (i) is or becomes generally
available to the public other than as a result of disclosure by the receiving
party or its Representatives, (ii) was available to the receiving party on a
non-confidential basis prior to its disclosure to the receiving party, or (iii)
becomes available to the receiving party on a non-confidential basis from a
source other than the providing party or its agents, provided, that such source
is not known by the receiving party to be bound by a confidentiality agreement
with the providing party or the providing party's agents. In addition, from and
after the Closing the obligations set forth in Section 4.2(a) shall not apply to
the Company with respect to Confidential Information relating to the System or
the Purchased Assets.
(c) To the fullest extent permitted by law, if a party or any of its
Affiliates or Representatives breaches, or threatens to commit a breach of, this
Section 4.2, the party whose Confidential Information shall be disclosed, or
threatened to be disclosed, shall have the right and remedy to have this Section
4.2 specifically enforced by any court having jurisdiction, it being
acknowledged and agreed that money damages will not provide an adequate remedy
to such party. Nothing in this Section 4.2 shall be construed to limit the
right of any party to collect money damages in the event of breach of this
Section 4.2.
(d) Anything else in this Agreement notwithstanding, each party shall
have the right to disclose any information, including Confidential Information
of the other party or such other party's Affiliates: (i) to the other party and
its Affiliates or Representatives; (ii) as otherwise required by Law, including
securities laws; provided, that any such disclosure shall be
<PAGE>
as limited in scope as possible and shall be made only after giving the other
party as much notice as practicable of such required disclosure and an
opportunity to contest such disclosure if possible; (iii) as required by its
existing or potential lending sources (such lending sources to acknowledge that
any such Confidential Information disclosed to them is subject to the provisions
hereof); (iv) as required to enforce its rights under this Agreement; or (v) as
required to obtain the Consents specified in Sections 7.1(a) through (c).
4.3 Covenants of AT&T PCS. From and after the execution and delivery
---------------------
of this Agreement to and including the Closing Date, AT&T PCS shall:
(a) Comply with all applicable Laws relating to the PCS License and
the Purchased Assets or their use except to the extent that such failure to
comply would not have an AT&T PCS Material Adverse Effect;
(b) Use its reasonable best efforts to maintain the PCS License in
full force and effect;
(c) Without the Company's prior written consent, such consent not to
be unreasonably withheld, delayed or conditioned, not (i) sell, transfer, assign
or dispose of, or offer to, or enter into any agreement, arrangement or
understanding to, sell, transfer, assign or dispose of any of the Purchased
Assets or any interest therein, or negotiate therefor, or (ii) create, incur or
suffer to exist any Lien of any nature whatsoever relating to any of the
Purchased Assets or any interest therein (other than Liens securing the Assumed
Liabilities or Liens which will be terminated and released prior to Closing);
or (iii) enter into any contract or agreement relating exclusively to the
Purchased Assets or the System (it being understood that any such agreement
entered into between the date hereof and the Closing Date with the Company's
prior written consent shall constitute an Assigned Agreement) other than those
which are terminable by AT&T PCS without penalty or any liability at the
Closing;
(d) Give to the Company and its agents and representatives (including
its independent auditors and attorneys) reasonable access (such access not to
interfere unreasonably with the operation of the System or with any other
operations of AT&T PCS) during normal business hours and upon reasonable notice,
to the Purchased Assets and the employees of the System, and to records, books,
contracts and documents relating to the Purchased Assets or the System, furnish
the Company with all such information concerning the Purchased Assets or the
System as the Company may reasonably request and cause the appropriate officers,
employees, consultants, agents, accountants and attorneys of AT&T PCS to
cooperate with such attorneys and representatives in connection with such review
and examination;
(e) Deliver to the Company copies of all environmental assessment
reports, if any, it has in its possession covering any real property at or on
which any of the Purchased Assets is located or that is leased pursuant to an
Assigned Agreement;
<PAGE>
(f) AT&T PCS shall use commercially reasonable efforts to preserve the
Purchased Assets intact and, from time to time, to make all reasonably necessary
repairs thereto;
(g) Give written notice to the Company promptly upon the commencement
of, or upon obtaining knowledge of any facts that would give rise to a threat
of, any claim, action or proceeding commenced against or relating to (other than
proceedings affecting the PCS or wireless communications services industry
generally) the Purchased Assets or their use, and which would reasonably be
expected to have an AT&T PCS Material Adverse Effect;
(h) Promptly after obtaining knowledge of the occurrence of, or the
impending or threatened occurrence of, any event which would cause or constitute
a material breach of any of its warranties, representations, covenants or
agreements contained in this Agreement, or which would reasonably be expected to
have an AT&T PCS Material Adverse Effect, give notice in writing of such event
or occurrence or impending or threatened event or occurrence (provided, that
such disclosure shall not be deemed to cure any violation or breach of any such
representation, warranty, covenant, agreement or provision), to the Company and
use commercially reasonable efforts to prevent or to promptly remedy such
breach;
(i) Cause the Company to be advised promptly in writing of (i) any
event, condition or state of facts known to it, which has had or would
reasonably be expected to have an AT&T PCS Material Adverse Effect, or
materially adversely affect the Purchased Assets (taken as a whole) or their use
(other than proceedings affecting the PCS or wireless communications services
industry generally), (ii) any claim, action or proceeding which seeks to enjoin
the consummation of the Transactions and (iii) any event, occurrence,
transaction or other item that would have been required to have been disclosed
on any Exhibit or Schedule delivered hereunder, had such event, occurrence,
transaction or item existed on the date hereof;
(j) Conduct the business of the System only in the ordinary course and
in this regard use its diligent efforts to preserve the Purchased Assets intact;
(k) use commercially reasonable efforts to preserve its relationships
with all parties to the Assigned Agreements and to perform in all material
respects all of its obligations under the Assigned Agreements according to the
terms and conditions thereof (it being understood and agreed by the parties that
AT&T PCS, in accordance with the Management Agreement, is seeking to amend the
terms of the Assigned Agreements with the Virginia Department of Transportation
to, among other things, increase the amount of rent credits to which AT&T PCS is
entitled thereunder);
(l) maintain true, correct and complete books and records relating to
the System; and
(m) not fail to pay when due any liability or obligations that, if
unpaid, would become a Lien upon any of the Purchased Assets.
<PAGE>
4.4 Covenants of the Company. From and after the execution and
------------------------
delivery of this Agreement to and including the Closing Date, the Company shall:
(a) Comply with all applicable Laws, including all such Laws relating
to the PCS License and the Purchased Assets or their use except to the extent
that such failure to comply would not have a Company Material Adverse Effect;
(b) Comply with the terms of the Stockholders Agreement;
(c) Give written notice to AT&T PCS promptly upon the commencement of,
or upon obtaining knowledge of any facts that would give rise to a threat of,
any claim, action or proceeding commenced against or relating to (other than
proceedings affecting the PCS or wireless communications services industry
generally) it, its properties or assets, and which would reasonably be expected
to have a Company Material Adverse Effect;
(d) Promptly after obtaining knowledge of the occurrence of, or the
impending or threatened occurrence of, any event which would cause or constitute
a material breach of any of its warranties, representations, covenants or
agreements contained in this Agreement or which would reasonably be expected to
have a Company Material Adverse Effect, give notice in writing of such event or
occurrence or impending or threatened event or occurrence (provided, that such
disclosure shall not be deemed to cure any violation or breach of any such
representation, warranty, covenant, agreement or provision), to AT&T PCS and use
commercially reasonable efforts to prevent or to promptly remedy such breach;
and
(e) Cause AT&T PCS to be advised promptly in writing of (i) any event,
condition or state of facts known to it, which has had or would reasonably be
expected to have a Company Material Adverse Effect (other than proceedings
affecting the PCS or wireless communications services industry generally), (ii)
any claim, action or proceeding which seeks to enjoin the consummation of the
Transactions and (iii) any event, occurrence, transaction or other item that
would have been required to have been disclosed on any Exhibit or Schedule
delivered hereunder, had such event, occurrence, transaction or item existed on
the date hereof.
4.5 Employees.
---------
(a) Except as set forth on Exhibit 4.5 or as otherwise agreed by the
Company and AT&T PCS, on or before thirty (30) days prior to the Closing Date,
the Company shall offer each of the employees of AT&T PCS rendering services
exclusively to the System employment with the Company after the Closing Date on
terms consistent with the Company's standard policies (each such employee other
than any person that the Company and AT&T PCS agrees shall not be so offered
employment by the Company, an "Employee"). Notwithstanding the foregoing, the
Company shall offer each Employee comparable employment, whereby the
<PAGE>
Employee's duties and responsibilities are not significantly reduced, the
Employee's base pay is not reduced by more than 10%, and the Employee is not
transferred to a new facility located more than 50 miles from such Employee's
current work site, except that the Company shall, as a condition of such offer
of employment, be permitted to require any Employee to relocate to the Richmond,
Virginia area. Upon reasonable notice, AT&T PCS shall provide the Company with
access to the Employees during normal business hours throughout the period from
the date hereof through the Closing Date, for the purpose of interviewing such
employees, negotiating with the Employees regarding their salary and other terms
of employment, and providing transition training for those employees continuing
in employment after the Closing Date ("Continuing Employees"). AT&T PCS agrees
to use all reasonable efforts to assist the Company in employing the Employees
and, in this regard, to terminate the Employees on or prior to the Closing Date.
Upon such termination, AT&T PCS shall pay each Employee all amounts due and
owing such Employee in respect of salary or benefits (including severance
benefits, if any) relating to the Employee's employment by AT&T PCS. AT&T PCS
waives any claims against the Company or any Employee arising from such
employment of the Continuing Employees of the Company (including arising from
any employment agreement or noncompetition agreement). Nothing contained in this
Agreement shall confer upon any Employee any right with respect to continued
employment by AT&T PCS or the Company. No provision of this Agreement shall
create any third-party rights in any Employee, or any beneficiary or dependent
thereof, with respect to the compensation, terms and conditions of employment
and benefits that may be provided to such Employee by the Company or under any
employee benefit plan that the Company may maintain.
(b) All expenses covered under any medical, dental, vision,
prescription drug, disability, travel accident, accidental death and
dismemberment, and life insurance plans of the Company and which are incurred by
Continuing Employees and their dependents on or after the Closing Date,
including any expenses attributable to facts or conditions existing on or before
the Closing Date, are the responsibility of the Company and shall be paid
directly by the Company or its insurance carrier to such Continuing Employees
and dependents. The Company shall be responsible for any medical, dental or
life insurance coverage under the terms of the Company's plans (if any) due to
any Continuing Employees and their dependents who retire after the Closing Date.
The Company shall fulfill the obligations under continuation coverage rules of
the Consolidation Omnibus Budget Reconciliation Act (COBRA) with respect to a
"qualifying event" within the meaning of Section 4980B(f) of the Internal
Revenue Code of 1986, as amended (the "Code") or Section 603 of the Employee
Retirement Income Security Act of 1974, as amended, occurring on or after the
Closing Date with respect to any Continuing Employees and their dependents. All
short-term, long-term and extended disability benefits under the terms of the
Company's plans (if any) payable to Continuing Employees and their dependents
who become disabled on or after the Closing Date shall be the responsibility of
the Company and shall be paid directly by the Company or its insurance carrier
to such Continuing Employees and their dependents.
(c) Effective as of the Closing Date, the Company shall (to the extent
<PAGE>
permitted under the provisions of the Company's group health plan) cause all
Continuing Employees and their dependents to be eligible to participate in a
group health plan and shall waive any minimum eligibility period of employment
for coverage and any preexisting condition requirement and provide credit
towards the payment of any deductible for any Continuing Employees and their
dependents with respect to such plan.
(d) As soon as practicable after the Closing Date, the Company shall
(to the extent permitted under the Company Plan) cause each Continuing Employee
to be eligible to participate in a defined contribution plan qualified under
Code Section 401(a) and 401(k) (the "Company Plan"). The Company shall (to the
extent permitted under the Company Plan) cause each Continuing Employee to be
granted credit for service with AT&T PCS or any affiliate thereof for purposes
of eligibility and vesting in the Company Plan.
(e) An amount in cash equal to the aggregate value of account balances
in the AT&T Wireless Service 401(k) Retirement Plan attributable to Continuing
Employees, which account balances shall include any employer matching
contributions in respect of employee contributions made prior to the Closing
Date and shall be valued, to the extent administratively feasible, so as to
include earnings and losses to a date not more than 30 days prior to the date of
transfer, will (to the extent permitted under the Company Plan) be transferred
to the Company's Plan, along with corresponding liabilities to pay benefits.
After the aforesaid transfer of account balances, the payment of benefits under
the Company Plan for Continuing Employees shall be the sole responsibility of
the Company, and the Company acknowledges and warrants that AT&T PCS and its
affiliates shall have no responsibility therefor.
4.6 Bulk Sales. Each of the parties hereto waives the obligation of
----------
the other party under the provisions of any "Bulk Sales" laws of the Uniform
Commercial Code as in effect in any state having jurisdiction over AT&T PCS or
the Transactions.
4.7 Assignment of Assigned Agreements. To the extent that any of the
---------------------------------
Assigned Agreements being assigned pursuant hereto is not assignable without the
consent of another Person and such Consent has not been obtained on or prior to
the Closing Date, this Agreement shall not constitute an assignment or attempted
assignment of such Assigned Agreement if such assignment or attempted assignment
would constitute a breach thereof. AT&T PCS agrees to use commercially
reasonable efforts to obtain (i) the Consent of such other Person to an
assignment in all cases in which Consent is required or (ii) novation agreements
to Assigned Agreements not so assignable. If such Consent or novation is not
obtained, AT&T PCS agrees to cooperate with the Company to provide for the
Company, to the extent permitted under the terms of such Assigned Agreement, the
benefits under such Assigned Agreement, including enforcement of any and all
rights of AT&T PCS against the other Person that is a party thereto arising out
of the cancellation by such other Person or otherwise.
4.8 Title; Risk of Loss. Legal title and risk of loss with respect
-------------------
to the Purchased Assets shall not pass to the Company until the Purchased Assets
are transferred at Closing.
<PAGE>
4.9 Non-Solicitation.
----------------
(a) From the date hereof until the Closing Date, AT&T PCS (and any of
AT&T PCS's officers, directors, partners, employees, representatives or agents)
will not solicit, initiate, encourage or participate in negotiations in any
manner with respect to, or furnish or cause or permit to be furnished any
information to any Person (other than to the Company or the Company's
representatives) in connection with, any inquiry or offer for any purchase or
sale of any Purchased Asset or the System (collectively, a "Third-Party
-----------
Proposal"). During such period, AT&T PCS shall promptly inform the Company of
the occurrence of a Third-Party Proposal and the terms thereof (including the
identity of the prospective soliciting party).
(b) If AT&T PCS (or any of AT&T PCS's officers, directors, partners,
employees, representatives or agents) breaches or threatens to commit a breach
of any of the provisions of this section, the Company shall have the right (in
addition to any other rights and remedies available to the Company at law or in
equity) to equitable relief (including injunctions) against such breach or
threatened breach, it being acknowledged and agreed that any such breach or
threatened breach will cause irreparable harm to the Company and that money
damages would not be an adequate remedy to the Company. AT&T PCS agrees that it
will not seek, and hereby waives any requirement for, the securing or posting of
a bond or proving actual damages in connection with the Company's seeking or
obtaining such relief.
4.10 Lien Searches. At least ten (10) days prior to the Closing,
-------------
AT&T PCS shall deliver to the Company Uniform Commercial Code, federal tax lien,
bankruptcy and judgment search reports issued by the Offices of the Secretary of
State of all applicable jurisdictions and all applicable local offices with
respect to the System and the Purchased Assets (the "Search Results"). If the
--------------
Search Results reveal that any Liens on the Purchased Assets exist (other than
Liens securing the Assumed Liabilities), AT&T PCS shall use commercially
reasonable efforts to have such Liens removed as of the Closing.
4.11 Completion of Construction. AT&T PCS has advised the Company
--------------------------
that it intends to construct 108 cell sites as described on Exhibit 4.11 (the
"System Cell Sites"). Such Exhibit 4.11 sets forth that portion of the
- ------------------
construction of the System Cell Sites that has not been completed as of the date
of the Management Agreement and the budgeted cost of such completion. Subject
to the Management Agreement, AT&T PCS covenants and agrees to use its
commercially reasonable efforts to complete such construction on or prior to the
Closing Date; provided, that (i) AT&T PCS shall not be obligated to complete
such construction (it being understood and agreed by the Company that the
completion of such construction shall not be a condition to Closing hereunder),
and (ii) except as set forth in the next succeeding sentence, the Company shall
have no rights of any nature whatsoever against AT&T PCS arising from any
failure on the part of AT&T PCS to complete such construction. In the event
that AT&T PCS has not completed such construction on or prior to the Closing
Date, the Company shall receive at the Closing a credit against the Cash
Purchase Price in respect of each item not completed in
<PAGE>
an amount equal to the budgeted cost for such item on Exhibit 4.11. In the event
that the Management Agreement shall have been terminated, at least ten (10)
Business Days prior to the Closing Date, AT&T PCS shall deliver to the Company a
certificate, signed by an authorized representative, setting forth the status of
such construction and with respect to any portion of such construction that has
not been completed, the corresponding amount by which the Cash Purchase Price
shall be reduced. The Company shall have a period of five (5) Business Days to
review such certificate and provide AT&T PCS with written notice of any
objections or corrections thereto that the Company may have. An initial
adjustment to the Cash Purchase Price based upon the undisputed items shown on
such certificate shall be made at Closing. To the extent that disputed items
exist, a final adjustment to the Cash Purchase Price shall be determined jointly
by the Company and AT&T PCS on or prior to the twentieth (20/th/) Business Day
following the Closing Date. In the absence of mutual agreement regarding such
final adjustment within such twenty (20) day period, the parties shall engage
the Independent Accountant to determine the amount of the adjustment to be made
pursuant to this Section 4.11. The determination of the Independent Accountant
shall be final, binding and conclusive on the parties hereto, and the fees and
expenses of the Independent Accountant shall be borne equally by the parties.
Notwithstanding anything to the contrary contained herein, in the event that the
Management Agreement shall be in effect on the Closing Date, AT&T PCS shall have
no obligation to credit against the Cash Purchase Price any such cost of
construction that has not been completed on or prior to the Closing Date; it
being understood that in such event nothing contained herein shall affect the
obligations of AT&T PCS to the Company pursuant to the Management Agreement with
respect to such cost of completion of such construction.
4.12 FCC Construction Requirement. The Company and AT&T PCS hereby
----------------------------
agree that the Company shall assume and be obligated to satisfy the construction
requirements set forth in 47 C.F.R. 24.203 with respect to the AT&T PCS Retained
License and the AT&T PCS Contributed License.
4.13 Environmental Due Diligence. The Company shall have conducted
---------------------------
an environmental due diligence investigation of the Purchased Assets and the
System, the results of which investigation shall be reasonably satisfactory to
the Company, it being understood that such investigation shall include: (i)
reviewing all Phase I environmental assessments prepared prior to the date
hereof on behalf of AT&T PCS for the parcels of real property subject to leases
included in the Assigned Agreements; and (ii) conducting and reviewing Phase I
environmental assessments for parcels of real property subject to leases
included in the Assigned Agreements for which such assessments have not been
performed prior to the date hereof. In the event the Company is not reasonably
satisfied with the results of its environmental due diligence investigation with
respect to any such parcel, the Company shall provide AT&T PCS with written
notice of such dissatisfaction no later than 30 days after the date hereof,
which written notice shall set forth in reasonable detail the parcels as to
which the Company is not reasonably satisfied and the reasons therefor (the
"Potentially Rejected Sites"). In the event there are five (5) or fewer
- ---------------------------
Potentially Rejected Sites, the Closing shall take place in accordance with the
terms hereof with no reduction in the Purchase Price, and (i) with respect to
each Potentially Registered
<PAGE>
Site the Company shall have the right at the Company's sole cost and expense to
deinstall and remove all Purchased Assets located at any Potentially Rejected
Site, (ii) Section 4.11 shall not be applicable to any Potentially Rejected Site
as to which such right shall be exercised, and (iii) any Assigned Agreements
relating to a Potentially Rejected Site as to which such right shall be
exercised shall be excluded from the Purchased Assets and shall not be assigned
to the Company pursuant to Section 2.1(d) and the liabilities arising thereunder
shall not be Assumed Liabilities pursuant to Section 2.4(a). The Company shall
exercise such right by written notice thereof given at least ten (10) Business
Days prior to the Closing Date. In the event there are more than five (5)
Potentially Rejected Sites, the Company may elect by written notice provided to
AT&T PCS no later than 30 days after the date hereof to terminate this Agreement
in accordance with Article IX; provided, however, that such 30 day period may be
-------- -------
extended by the Company, by written notice given to AT&T PCS, for such period
not to exceed 30 days, as shall be necessary to investigate any potential
environmental liability relating to any Potentially Rejected Site. In the event
that the Company elects to deinstall and remove any Purchased Assets located at
any Potentially Rejected Site in accordance with this Section 4.13, and this
Agreement shall thereafter be terminated without the Closing having occurred,
the Company shall at its sole cost and expense reinstall and restore all
Purchased Assets to their prior locations. Notwithstanding anything to the
contrary contained herein, AT&T PCS shall not be deemed to be in breach of any
representation or warranty contained in this Agreement, or have any
indemnification obligation relating thereto, in respect of any matter of which
the Company acquires knowledge during the course of its environmental due
diligence investigation of the Purchased Assets. As used in this Section 4.13,
the term "knowledge" refers to actual and not constructive knowledge of the
Company. Notwithstanding the foregoing, in the event that the Company shall have
placed the System into commercial operation while the Management Agreement shall
be in effect, the Company shall have no right to terminate this Agreement
pursuant to this Section 4.13.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF AT&T PCS
------------------------------------------
AT&T PCS represents and warrants to the Company as follows:
5.1 Organization, Power and Authority.
---------------------------------
(a) It is a corporation duly organized, validly existing and in good
standing under the laws of Delaware and has the requisite power and authority to
own, lease and operate the Purchased Assets and to carry on its business
relating to the System as now being conducted.
(b) It has the requisite power and authority to execute, deliver and
perform this Agreement and each other instrument, document, certificate and
agreement required or contemplated to be executed, delivered and performed by it
hereunder and thereunder to which it is or will be a party.
<PAGE>
(c) It is duly qualified to do business in each jurisdiction where the
Purchased Assets are used or the nature of its activities conducted in the
operation of the System makes such qualification necessary other than any such
jurisdiction in which the failure to be so qualified would not have an AT&T PCS
Material Adverse Effect.
(d) The execution and delivery of this Agreement by it and the
consummation of the Transactions by it have been duly and validly authorized by
its Board of Directors and no other proceedings on its part which have not been
taken (including approval of its stockholders, partners or members) are
necessary to authorize this Agreement or to consummate the Transactions.
(e) This Agreement has been duly executed and delivered by it and
constitutes its valid and binding obligation, enforceable against it in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, moratorium or other similar laws affecting or relating
to enforcement of creditors' rights generally or may be subject to general
principles of equity.
5.2 Consents; No Conflicts. Neither the execution, delivery and
----------------------
performance by it of this Agreement nor the consummation of the Transactions
will (a) conflict with, or result in a breach or violation of, any provision of
its organizational documents; (b) constitute, with or without the giving of
notice or passage of time or both, a breach, violation or default, create a Lien
on any of the Purchased Assets, or give rise to any right of termination,
modification, cancellation, prepayment or acceleration, under (i) any Law or the
PCS License or (ii) any note, bond, mortgage, indenture, lease, agreement or
other instrument, in each case which is applicable to or binding upon it or any
of its assets; or (c) require any Consent, other than those set forth on Exhibit
5.2, except in the case of clauses (a) and (b), where such breach, violation,
default, Lien or right would not have an AT&T PCS Material Adverse Effect. To
its knowledge, there is no fact relating to it or its Affiliates that would be
reasonably expected to prevent it from consummating the Transactions or
disqualify the Company from obtaining the Consents (including the Consent of the
FCC) required in order to consummate the License Transfer as provided for in
this Agreement.
5.3 Litigation. There is no action, proceeding or investigation
----------
pending or, to its knowledge, threatened against it or any of its properties or
assets that would be reasonably expected to have a material adverse effect on
its ability to consummate the Transactions or to fulfill its obligations under
this Agreement, or which seeks to prevent or challenge the Transactions.
5.4 FCC Compliance. To its knowledge, it is in compliance with all
--------------
eligibility rules issued by the FCC to hold broadband PCS Licenses, including
FCC rules on foreign ownership and the CMRS spectrum cap. To its knowledge, the
fact that it will own the interest in the Company contemplated by this Agreement
will not cause the Company or its wholly owned Subsidiaries to be ineligible
under FCC rules to hold PCS Licenses in general or the AT&T PCS Contributed
License.
<PAGE>
5.5 Brokers. It has not employed any broker, finder or investment
-------
banker and has not incurred and will not incur any liability for any brokerage
fees, commissions or finder's fees in connection with the Transactions.
5.6 Stockholders Agreement. From and after February 4, 1998, through
----------------------
and including the Closing Date, AT&T PCS has performed all covenants and
agreements required to be performed by it pursuant to the Stockholders
Agreement.
5.7 License. It is the authorized legal holder, free and clear of
-------
any Liens, of the PCS License, evidence of which is attached to Schedule I. The
PCS License is, and on the Closing Date the AT&T PCS Contributed License will
be, valid and in full force and effect. Except for proceedings affecting the
PCS or wireless communications services industry generally, there is not
pending, nor to the knowledge of AT&T PCS, threatened against AT&T PCS or
against the PCS License, any application, action, petition, objection or other
pleading, or any proceeding with the FCC which questions or contests the
validity of, or seeks the revocation, nonrenewal or suspension of, the PCS
License, which seeks the imposition of any modification or amendment with
respect thereto, or which adversely affects the ability of the Company to employ
the AT&T PCS Contributed License in its business after the Closing Date. The
PCS License is not subject to any conditions other than those appearing on the
face of the PCS License itself and those imposed by FCC Law.
5.8 No Distribution. It is acquiring the Securities to be acquired
---------------
by it hereunder for the purpose of investment and not with a view to or for sale
in connection with any distribution thereof (other than in compliance with the
Stockholders Agreement and the Securities Act and all applicable state
securities laws).
5.9 Investor Acknowledgments.
------------------------
(a) It is an "accredited investor" as defined in Regulation D of the
Securities Act. Its representatives have been provided an opportunity to ask
questions of, and have received answers thereto from, the Company and its
representatives regarding the terms and conditions of its acquisition of
Securities, and the Company and its proposed business generally, and have
obtained all additional information requested by it to verify the accuracy of
all information furnished to it in connection with such purchase. It is an
existing stockholder of the Company, owning on the date hereof 732,371 shares of
the Company's Series A Preferred Stock, par value $0.01 per share, and 366,131
shares of the Company's Series D Preferred Stock.
(b) It has such knowledge and experience in financial and business
affairs that it is capable of evaluating the merits and risks of acquiring the
Securities it is acquiring hereunder.
(c) It is not relying on and acknowledges that no representation is
being made
<PAGE>
by the Company or any of its officers, employees, Affiliates, agents or
representatives, except for representations and warranties expressly set forth
in this Agreement (including the Exhibits and Schedule attached hereto), and, in
particular, it is not relying on, and acknowledges that no representation is
being made in respect of, (i) any projections, estimates or budgets delivered to
or made available to it of future revenues, expenses or expenditures, or future
results of operations and (ii) any other information or documents delivered or
made available to it or its representatives, except for representations and
warranties expressly set forth in this Agreement (including the Exhibits and
Schedule attached hereto) and such information and documents obtained by it as a
stockholder of the Company and through its representative who serves as a member
of the Company's board of directors.
(d) In deciding to invest in the Company, it has relied exclusively on
the representations and warranties expressly set forth in this Agreement,
investigations made by itself and its representatives and its and such
representatives' knowledge of the industry in which AT&T PCS and the Company
operate. Based solely on such representations and warranties and such
investigations and knowledge and such information obtained by AT&T PCS by virtue
of its status as a stockholder of the Company and through its representative who
serves as a member of the Company's board of directors, it has determined that
the Securities it is acquiring are a suitable investment for it.
5.10 Title to Purchased Assets. AT&T PCS has good and marketable
-------------------------
title to, or a valid and enforceable leasehold interest in, all of the Purchased
Assets, free and clear of all Liens except (only with respect to Purchased
Assets other than the AT&T PCS Contributed License) for Liens for taxes,
assessments, governmental charges or levies which are not due and delinquent or
which hereafter can be paid without penalty, and except for warehousemen's,
mechanics', carriers', landlords', repairmen's, or other similar Liens arising
in the ordinary course of business (none of which, either singly or in the
aggregate, is material). The Purchased Assets do not include fee simple title to
any parcel of real property.
5.11 Employees. Exhibit 5.11 contains a list setting forth as of the
---------
date hereof the name and current annual salary and other compensation payable by
AT&T PCS to each Employee, and the profit sharing, bonus or other form of
additional compensation paid or payable by AT&T PCS to or for the benefit of
each such Employee for the current fiscal year. There are no agreements,
arrangements or understandings that would restrict the ability of the Company to
terminate the employment of any or all of the Employees for any lawful reason or
for no reason at all, without penalty or liability. All Employees are employees
at will. AT&T PCS has withheld all amounts required by law or agreement to be
withheld by it from the wages, salaries and other payments to Employees and is
not liable for any arrears of wages or any taxes for failure to comply with any
of the foregoing. There is no pending action, suit, claim, arbitration, or
other legal or administrative proceedings against AT&T PCS by or with respect to
any Employee.
<PAGE>
5.12 Contracts.
---------
(a) Exhibit 2.1(d) contains a list of all Assigned Agreements existing
at the date hereof.
(b) AT&T PCS has performed and will, up to the Closing Date, perform
in all material respects all obligations required to be performed by it under
all Assigned Agreements.
(c) Each of the Assigned Agreements has been, and each Assigned
Agreement entered into after the date hereof as permitted by Section 4.3(c) will
be, lawfully entered into and is or will be valid and in full force and effect
and is or will be enforceable in accordance with its terms for the period stated
in such Assigned Agreement. There are no currently threatened cancellations of,
nor are there any outstanding disputes or material defaults under, any Assigned
Agreement. AT&T PCS will not modify, amend or waive any provisions of any
Assigned Agreement in a manner that would materially adversely affect the
Purchased Assets or terminate any Assigned Agreement prior to the Closing other
than in the ordinary course of business and with the prior written consent of
the Company, which consent will not be unreasonably withheld.
5.13 Equipment. The items of equipment set forth on Exhibit 2.1(a)
---------
are in good working condition (reasonable wear and tear excepted) and are
useable for the purposes for which intended. To AT&T PCS's knowledge, AT&T PCS
has maintained such equipment in accordance with all warranties provided by the
vendors or manufacturers thereof.
5.14 Environmental Matters. There has been no manufacture, refining,
---------------------
storage, disposal or treatment of Hazardous Substances by AT&T PCS (or, except
as disclosed in any Phase I environmental assessment with respect to any parcel
of real property at which any Purchased Assets are located, to the knowledge of
AT&T PCS, its predecessors in interest) at or from any real property (x) on
which any of the Purchased Assets is located, or (y) that is leased pursuant to
an Assigned Agreement, in violation of any Environmental Laws or which would
require remedial action under any Environmental Law. During its ownership or
occupancy of such real property, AT&T PCS has not received with respect to any
such real property any (i) notice of any such violation with respect to any
Hazardous Substance at or on any of such real property, (ii) notice from any
governmental agency that it, or any present or former owner, lessee or operator
of such real property is a potentially responsible party for cleanup liability
with respect to the emission, discharge or release of any Hazardous Substance or
for any other matter arising under the Environmental Laws or in any litigation,
administrative proceeding, finding, order, citation, notice, investigation or
complaint under any Environmental Law, or (iii) notice of violation, citation,
complaint, request for information, order, directive, compliance schedule,
notice of claim, proceeding or litigation from any party concerning the
compliance of AT&T PCS with any Environmental Law. As used in this Section 5.14,
the term "knowledge" refers to actual and not constructive knowledge and is not
intended to impose upon AT&T PCS any duty to investigate the condition of any
real property.
5.15 Compliance With Laws. With respect to the System and the
--------------------
Purchased Assets,
<PAGE>
AT&T PCS is in, and has operated in, compliance with all applicable Laws,
including all FCC Laws, Environmental Laws and Laws relating to taxes, except
for noncompliance that, individually or in the aggregate, has not and would not
reasonably be expected to have an AT&T PCS Material Adverse Effect. AT&T PCS has
not received notice to the effect that, or otherwise been advised that, it is
not in compliance with any Laws with respect to the System or the Purchased
Assets, and AT&T PCS has not taken any action or failed to take any action that
is a violation of any such Laws with respect to the System or the Purchased
Assets, except for actions or failures to take action that, individually or in
the aggregate, have not and would not reasonably be expected to have an AT&T PCS
Material Adverse Effect.
5.16 Books and Records. All financial, business and accounting
-----------------
books, ledgers, accounts and official and other records relating to the System
and the Purchased have been properly and accurately kept and completed in all
material respects, and there are no material inaccuracies or discrepancies
contained or reflected therein.
5.17 FCC Construction Requirements. Each of the System Cell Sites
-----------------------------
that shall have been constructed by AT&T PCS prior to Closing has been built in
conformance in all material respects with FCC Law, including the technical
requirements of Subpart E of Part 24 of the FCC rules and regulations, and
operates, or shall operate, in conformance in all material respects with FCC
Law. The System would, if in commercial service on the date of this Agreement,
satisfy the five-year construction milestone set forth in 47 CFR 24.203(a) by
providing coverage to 545,100 POPs within the Norfolk, Virginia BTA.
5.18 Incursion Sites. Exhibit 5.18 identifies each System Cell Site
---------------
for which the predicted or measured median field strength exceeds 47dBuV/m at
the boundary of the Norfolk, Virginia BTA.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
---------------------------------------------
The Company represents and warrants to AT&T PCS as follows:
6.1 Organization, Power and Authority.
---------------------------------
(a) Each of the Company and each of its Subsidiaries is a corporation
duly organized, validly existing and in good standing under the laws of Delaware
and has the requisite corporate power and authority to own, lease and operate
its properties and to carry on its business as now being conducted and proposed
to be conducted.
(b) It has the requisite power and authority to execute, deliver and
perform this Agreement, and each other instrument, document, certificate and
agreement required or contemplated to be executed, delivered and performed by it
hereunder and thereunder to which it is or will be a party.
<PAGE>
(c) The Company and each of its Subsidiaries is duly qualified to do
business in each jurisdiction where the character of its properties owned or
held under lease or the nature of its activities makes such qualification
necessary other than any such jurisdiction in which the failure to be so
qualified would not have a Company Material Adverse Effect.
(d) The execution and delivery of this Agreement by the Company and
the consummation of the Transactions by it have been duly and validly authorized
by its Board of Directors and no other proceedings on its part which have not
been taken (including approval of its shareholders) are necessary to authorize
this Agreement or to consummate the Transactions.
(e) This Agreement has been duly executed and delivered by the Company
and constitutes its valid and binding obligation, enforceable against it in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, moratorium or other similar laws affecting or relating
to enforcement of creditors' rights generally or may be subject to general
principles of equity.
(f) As of the Closing, after giving effect to the Transactions, the
Company is not in breach of any obligation under this Agreement or the
Stockholders Agreement.
6.2 Consents; No Conflicts. Neither the execution, delivery and
----------------------
performance by the Company of this Agreement nor the consummation of the
Transactions will (a) conflict with, or result in a breach or violation of, any
provision of its organizational documents; (b) constitute, with or without the
giving of notice or passage of time or both, a breach, violation or default,
create a Lien on its assets, or give rise to any right of termination,
modification, cancellation, prepayment or acceleration, under (i) any Law, or
(ii) any note, bond, mortgage, indenture, lease, agreement or other instrument,
in each case which is applicable to or binding upon it or any of its assets; or
(c) require any Consent on its part, other than those set forth on Exhibit 6.2
or the approval of its Board of Directors, except in the case of clauses (a) and
(b) where such breach, violation, default, Lien or right would not have a
Company Material Adverse Effect. To its knowledge, there is no fact relating to
it or its Affiliates that would be reasonably expected to prevent it from
consummating the Transactions or performing its obligations under this Agreement
or disqualify the Company from obtaining the Consents (including the Consent of
the FCC) required in order to consummate the License Transfer as provided for in
this Agreement.
6.3 Litigation. There is no action, proceeding or investigation
----------
pending or, to the Company's knowledge, threatened against it or any of its
properties or assets that would have a material adverse effect on its ability to
consummate the Transactions or to fulfill its obligations under this Agreement,
or to operate its business after the Closing Date, or which seeks to prevent or
challenge the Transactions. There is no judgment, decree, injunction, rule or
order outstanding against the Company which would limit in any material respect
its ability to operate its business in the manner currently contemplated.
<PAGE>
6.4 FCC Compliance. It complies, and after giving effect to the
--------------
consummation of the Transactions will comply, with all eligibility rules issued
by the FCC to hold broadband PCS Licenses, including FCC rules on foreign
ownership and the CMRS spectrum cap.
6.5 Brokers. The Company has not employed any broker, finder or
-------
investment banker and has not incurred and will not incur any liability for any
brokerage fees, commissions or finder's fees in connection with the
Transactions.
6.6 Stockholders Agreement. From and after February 4, 1998, through
----------------------
and including the Closing Date, the Stockholders Agreement has been in full
force and effect, the Company has performed all covenants and agreements
required to be performed by it pursuant to the Stockholders Agreement.
6.7 Shares. The Series D Preferred Stock being issued to AT&T PCS
------
hereunder, when issued pursuant to the terms of this Agreement, will be duly
authorized, validly issued, fully paid and non-assessable, and will be free of
any Liens caused or created by the Company, except as set forth in the
Stockholders Agreement and the Certificate of Incorporation of the Company. The
shares of Common Stock issued upon conversion of the Series D Preferred Stock,
when issued pursuant to the terms of the Series D Preferred Stock, will be
validly issued, fully paid and non-assessable, and will be free of any Liens
caused or created by the Company, except as set forth in the Stockholders
Agreement and the Certificate of Incorporation of the Company.
6.8 No Additional Representations. The Company is not relying on and
-----------------------------
acknowledges that no representation or warranty is being made by AT&T PCS or any
of its officers, employees, Affiliates, agents or representatives, except for
representations and warranties expressly set forth in this Agreement (including
the Exhibits and Schedule attached hereto), and, in particular, it is not
relying on, and acknowledges that no representation or warranty is being made in
respect of, (i) any projections, estimates or budgets delivered to or made
available to them of future revenues, expenses or expenditures, or future
results of operations of the System and (ii) any other information or documents
delivered or made available to it or its representatives, except for
representations and warranties expressly set forth in this Agreement (including
the Exhibits and Schedule attached hereto).
6.9 Compliance With Laws. The Company is in, and has operated in,
--------------------
compliance with all applicable Laws, except for noncompliance that, individually
or in the aggregate, has not and would not reasonably be expected to have a
Company Material Adverse Effect. The Company has not received notice to the
effect that, or otherwise been advised that, it is not in compliance with any
Laws, and the Company has not taken any action or failed to take any action that
is a violation of any such Laws, except for actions or failures to take action
that, individually or in the aggregate, have not and would not reasonably be
expected to have a Company Material Adverse Effect.
<PAGE>
6.10 No Material Adverse Effect. Since the formation of the Company,
--------------------------
there has been no Company Material Adverse Effect.
ARTICLE VII
CLOSING CONDITIONS
------------------
7.1 Conditions to Obligations of All Parties. The obligation of each
----------------------------------------
of the parties to consummate the Transactions contemplated to occur at the
Closing shall be conditioned on the following, unless waived by each of the
parties:
(a) Any applicable waiting period under the HSR Act shall have expired
or been terminated.
(b) The Consent of the FCC to the License Transfer shall have been
obtained pursuant to a Final Order, free of any conditions materially adverse to
the Company or AT&T PCS, other than those applicable to the PCS or wireless
communications services industry generally. For the purposes of this paragraph,
"Final Order" means an action or decision that has been granted by the FCC as to
-----------
which (i) no request for a stay or similar request is pending, no stay is in
effect, the action or decision has not been vacated, reversed, set aside,
annulled or suspended and any deadline for filing such request that may be
designated by statute or regulation has passed, (ii) no petition for rehearing
or reconsideration or application for review is pending and the time for the
filing of any such petition or application has passed, (iii) the FCC does not
have the action or decision under reconsideration on its own motion and the time
within which it may effect such reconsideration has passed and (iv) no appeal is
pending, including other administrative or judicial review, or in effect and any
deadline for filing any such appeal that may be designated by statute or rule
has passed.
(c) All Consents by any Governmental Authority (other than the
Consents referred to in paragraphs (a) and (b) above) required to permit the
consummation of the Transactions shall have been obtained, except where the
failure to obtain such Consents would not be reasonably expected to have an AT&T
PCS Material Adverse Effect or a Company Material Adverse Effect or to
materially adversely affect the Transactions or the ability of AT&T PCS or the
Company to perform its obligations under this Agreement.
(d) No preliminary or permanent injunction or other order, decree or
ruling issued by a Governmental Authority, nor any statute, rule, regulation or
executive order promulgated or enacted by any Governmental Authority, shall be
in effect that would (i) impose material limitations on the ability of any party
to consummate the Transactions or prohibit such consummation, or (ii) impair in
any material respect the operations of the Company.
(e) The terms " Licensed Territory" as used in the Network Membership
License Agreement (as defined in the Stockholders Agreement) and "Territory" as
used in the
<PAGE>
Stockholders Agreement, and Schedule 2 to the Roaming Agreement (as defined in
the Stockholders Agreement) shall have been appropriately amended to include the
Norfolk, Virginia BTA and the parties shall make such other conforming changes
to the terms of such agreements as shall be necessary to reflect the acquisition
by the Company of the Purchased Assets and to otherwise extend the benefits of
such agreements to the System and the Purchased Assets and, in addition, Exhibit
A to the Roaming Agreement shall have been amended to provide that roaming
charges in the Norfolk, Virginia BTA shall be calculated as set forth on Exhibit
7.1(e) hereto.
7.2 Conditions to Obligations of the Company. The obligation of the
----------------------------------------
Company to consummate the Transactions contemplated to occur at the Closing
shall be further conditioned upon the satisfaction or fulfillment, at or prior
to the Closing, of the following conditions unless waived by the Company:
(a) The representations and warranties of AT&T PCS contained herein
shall be true and correct in all material respects, in each case when made and
at and as of the Closing (except (i) for representations made as of a specified
date, which shall be true and correct as of such date, and (ii) for
representations and warranties that are qualified as to materiality which shall
be true and correct in all respects) with the same force and effect as though
made at and as of such time, except (x) for inaccuracies in respect of the
representations and warranties set forth in Section 5.3 and the third sentence
of Section 5.7 (disregarding any qualifications as to materiality contained
therein) that in the aggregate would not be reasonably expected to have an AT&T
PCS Material Adverse Effect or would not adversely affect AT&T PCS's ability to
perform its obligations under this Agreement and (y) for inaccuracies in respect
of the representations and warranties set forth in Sections 5.10 through 5.16 to
the extent that such inaccuracies are caused by acts or omissions (which
omissions relate to matters for which the Company has responsibility under the
Management Agreement) of the Company during the period that the Company is
managing the System under the Management Agreement.
(b) AT&T PCS shall have performed in all material respects all
agreements contained herein required to be performed by it at or before the
Closing.
(c) AT&T PCS shall have delivered to the Company the documents
required pursuant to Section 3.2(f)(i).
(d) Since the date hereof, neither the Purchased Assets nor the System
shall have been adversely affected in any material way by, or sustained any
material loss, whether or not insured, as a result of, any fire, flood,
lightning, explosion or other calamity or casualty, which shall not have been
repaired in all material respects by AT&T PCS, and no condemnation proceedings
affecting any material portion of the Purchased Assets or the System shall have
been commenced.
(e) Releases, duly executed by the appropriate parties (other than
with respect to Assumed Liabilities), releasing each of the Liens upon the
Purchased Assets, each in form and substance reasonably satisfactory to the
Company, shall have been obtained.
<PAGE>
7.3 Conditions to the Obligations of AT&T PCS. The obligation of
-----------------------------------------
AT&T PCS to consummate the Transactions contemplated to occur at the Closing
shall be further conditioned upon the satisfaction or fulfillment, at or prior
to the Closing, of the following conditions, unless waived by AT&T PCS:
(a) The representations and warranties of the Company contained herein
shall be true and correct in all material respects, in each case when made and
at and as of the Closing (except for representations and warranties made as of a
specified date, which shall be true and correct as of such date and except for
representations and warranties that are qualified as to materiality which shall
be true and correct in all respects) with the same force and effect as though
made at and as of such time, except for inaccuracies in respect of the
representations and warranties set forth in Section 6.3 (disregarding any
qualifications as to materiality contained therein) that in the aggregate would
not be reasonably expected to have a Company Material Adverse Effect or would
not adversely affect the Company's ability to perform its obligations under this
Agreement.
(b) The Company shall have performed in all material respects all
agreements contained herein required to be performed by it at or before the
Closing.
(c) The Company shall have delivered to AT&T PCS the documents
required pursuant to Section 3.2(f)(ii).
(d) Section 8.6(a) of the Stockholders Agreement shall have been
amended as set forth on Exhibit 7.3(d) hereto.
ARTICLE VIII
SURVIVAL AND INDEMNIFICATION
----------------------------
8.1 Survival. Except for the representations and warranties contained in
--------
Sections 5.1(a), (b), (d) and (e), 5.10 and 6.1(a), (b), (d) and (e) (which
shall survive the Closing, without regard to any investigation made by any of
the parties hereto, until the expiration of the applicable statute of
limitations relating thereto), the representations and warranties made in this
Agreement shall survive the Closing without regard to any investigation made by
any of the parties hereto until the second anniversary thereof and shall
thereupon expire together with any right to indemnification in respect thereof
(except to the extent a written notice asserting a claim for breach of any such
representation or warranty and describing such claim in reasonable detail shall
have been given prior to the expiration of the applicable survival period to the
party which made such representation or warranty). The covenants and agreements
contained herein to be performed or complied with prior to the Closing shall
expire at the Closing. The covenants and agreements contained in this Agreement
to be performed or complied with after the Closing shall survive the Closing;
provided, that the right to indemnification pursuant to this Article VIII in
<PAGE>
respect of a breach of a representation or warranty shall expire upon the
application of the applicable survival period (except to the extent written
notice asserting a claim thereunder and describing such claim in reasonable
detail shall have been given prior to such expiration to the party from whom
such indemnification is sought). After the Closing, the sole and exclusive
remedy of the parties for any breach or inaccuracy of any representation or
warranty contained in this Agreement, or any other claim (whether or not
alleging a breach of this Agreement) that arises out of the facts and
circumstances constituting such breach or inaccuracy, shall be the indemnity
provided in this Article VIII.
8.2 Indemnification by AT&T PCS. AT&T PCS shall indemnify and hold
---------------------------
harmless the Company and its Affiliates, and the shareholders, members,
managers, officers, employees, agents and/or the legal representatives of any of
them (each, a "Section 8.2 Indemnified Party"), against all liabilities and
-----------------------------
expenses (collectively, "Losses") incurred by any Section 8.2 Indemnified Party
------
(including, without limitation, amounts paid in satisfaction of judgments, in
compromise, as fines and penalties, and as counsel fees and Losses incurred in
connection with the investigation, defense, or disposition of any action, suit
or other proceeding in which any Section 8.2 Indemnified Party may be involved
or with which any Section 8.2 Indemnified Party may be threatened (whether
arising out of or relating to matters asserted by third parties against a
Section 8.2 Indemnified Party or incurred or sustained by such party in the
absence of a third-party claim), that arise out of or result from (a) any
representation or warranty of AT&T PCS contained in this Agreement being untrue,
including, without limitation Section 5.14 or (b) any default by AT&T PCS or any
of its Affiliates in the performance of their respective obligations under this
Agreement (including its obligation to discharge the Excluded Liabilities),
except to the extent (but only to the extent) any such Losses arise out of or
result from the gross negligence or willful misconduct of such Section 8.2
Indemnified Party or its Affiliates; provided, that the aggregate liability of
AT&T PCS to indemnify Section 8.2 Indemnified Parties against Losses arising out
of or resulting from (x) any representation or warranty of AT&T PCS contained in
this Agreement being untrue, or (y) any default by AT&T PCS or any of its
Affiliates in the performance of their respective obligations under this
Agreement shall (except, in the case of clause (y), to the extent (but only to
the extent) any such Losses arise out of or result from the gross negligence or
willful misconduct of AT&T PCS) be limited to $30,000,000; provided further,
that such $30,000,000 limitation shall not apply to the obligation of AT&T PCS
to indemnify the Section 8.2 Indemnified Parties against Losses arising out of
the Excluded Liabilities.
8.3 Indemnification by the Company. The Company shall indemnify and hold
------------------------------
harmless AT&T PCS and its Affiliates, and the shareholders, members, managers,
officers, employees, agents and/or the legal representatives of any of them
(each, a "Section 8.3 Indemnified Party"), against all Losses incurred by any
-----------------------------
Section 8.3 Indemnified Party (including, without limitation, amounts paid in
satisfaction of judgments, in compromise, as fines and penalties, and as counsel
fees and Losses incurred in connection with the investigation, defense, or
disposition of any action, suit or other proceeding in which any Section 8.3
Indemnified Party may be involved or with which any Section 8.3 Indemnified
Party may be threatened (whether
<PAGE>
arising out of or relating to matters asserted by third parties against a
Section 8.3 Indemnified Party or incurred or sustained by such party in the
absence of a third party claim) that arise out of or result from (a) any
representation or warranty of the Company contained in this Agreement being
untrue or (b) any material default by the Company or any of its Affiliates in
the performance of their respective obligations under this Agreement (including
its obligation to discharge the Assumed Liabilities), except to the extent (but
only to the extent) any such Losses arise out of or result from the gross
negligence or willful misconduct of such Section 8.3 Indemnified Party or its
Affiliates; provided, that the aggregate liability of the Company to indemnify
Section 8.3 Indemnified Parties against Losses arising out of or resulting from
(x) any representation or warranty of the Company contained in this Agreement
being untrue, or (y) any default by the Company or any of its Affiliates in the
performance of their respective obligations under this Agreement shall (except,
in the case of clause (y), to the extent (but only to the extent) any such
Losses arise out of or result from the gross negligence or willful misconduct of
the Company) be limited to $30,000,000; provided further, that such $30,000,000
limitation shall not apply to the obligation of the Company to pay the Purchase
Price or to indemnify the Section 8.3 Indemnified Parties against Losses arising
out of the Assumed Liabilities.
8.4 Procedures.
----------
(a) The terms of this Section 8.4 shall apply to any claim (a "Claim")
-----
for indemnification under the terms of Sections 8.2 or 8.3. The Section 8.2
Indemnified Party or Section 8.3 Indemnified Party (each, an "Indemnified
-----------
Party"), as the case may be, shall give prompt written notice of such Claim to
the indemnifying party (the "Indemnifying Party") under the applicable Section,
------------------
which party may assume the defense thereof, provided, that any delay or failure
to so notify the Indemnifying Party shall relieve the Indemnifying Party of its
obligations hereunder only to the extent, if at all, that it is materially
prejudiced by reason of such delay or failure. The Indemnified Party shall have
the right to approve any counsel selected by the Indemnifying Party and to
approve the terms of any proposed settlement, such approvals not to be
unreasonably delayed or withheld (unless, in the case of approval of a proposed
settlement, such settlement provides only, as to the Indemnified Party, the
payment of money damages actually paid by the Indemnifying Party and a complete
release of the Indemnified Party in respect of the claim in question).
Notwithstanding any of the foregoing to the contrary, the provisions of this
Article VIII shall not be construed so as to provide for the indemnification of
any Indemnified Party for any liability to the extent (but only to the extent)
that such indemnification would be in violation of applicable law or that such
liability may not be waived, modified or limited under applicable law, but shall
be construed so as to effectuate the provisions of this Article VIII to the
fullest extent permitted by law.
(b) In the event that the Indemnifying Party undertakes the defense of
any Claim, the Indemnifying Party will keep the Indemnified Party advised as to
all material developments in connection with such Claim, including promptly
furnishing the Indemnified Party with copies of all material documents filed or
served in connection therewith.
<PAGE>
(c) In the event that the Indemnifying Party fails to assume the
defense of any Claim within thirty (30) days after receiving written notice
thereof, the Indemnified Party shall have the right, subject to the Indemnifying
Party's right to assume the defense pursuant to the provisions of this Article
VIII, to undertake the defense, compromise or settlement of such Claim for the
account of the Indemnifying Party. Unless and until the Indemnified Party
assumes the defense of any Claim, the Indemnifying Party shall advance to the
Indemnified Party any of its reasonable attorneys' fees and other costs and
expenses incurred in connection with the defense of any such action or
proceeding. Each Indemnified Party shall agree in writing prior to any such
advancement that, in the event he or it receives any such advance, such
Indemnified Party shall reimburse the Indemnifying Party for such fees, costs
and expenses to the extent that it shall be determined that he or it was not
entitled to indemnification under this Article VIII.
(d) In no event shall an Indemnifying Party be required to pay in
connection with any Claim for more than one firm of counsel (and local counsel)
for each of the following groups of Indemnified Parties: (i) AT&T PCS, its
Affiliates, and the shareholders, members, managers, officers, employees, agents
and/or the legal representatives of any of them; and (ii) the Company and its
Affiliates, and the shareholders, members, managers, officers, employees, agents
and/or the legal representatives of any of them.
ARTICLE IX
TERMINATION
-----------
9.1 Termination. In addition to any other rights of termination set forth
-----------
herein, this Agreement may be terminated, and the Transactions abandoned,
without further obligation of any party, except as set forth herein, at any time
prior to the Closing Date:
(a) by mutual written consent of the parties;
(b) by any party by written notice to the other party, if the Closing
shall not have occurred on or before the date that is one year after the date
hereof, provided, that the party electing to exercise such right is not
otherwise in breach of its obligations under this Agreement;
(c) by any party by written notice to the other party, if the
consummation of the Transactions shall be prohibited by a final, non-appealable
order, decree or injunction of a court of competent jurisdiction; or
(d) by the Company in accordance with Section 4.13.
9.2 Effect of Termination
---------------------
(a) In the event of a termination of this Agreement, no party hereto
shall have
<PAGE>
any liability or further obligation to any other party to this Agreement, except
as set forth in paragraph (b) below, and except that nothing herein will relieve
any party from liability for any breach by such party of this Agreement.
(b) In the event of a termination of this Agreement pursuant to
Section 9.1, all provisions of this Agreement shall terminate, except Section
4.2 and Articles VIII and X, except that nothing herein will relieve any party
from liability for any breach of this Agreement.
(c) Whether or not the Closing occurs, all costs and expenses incurred
in connection with this Agreement and the Transactions shall be paid by the
party incurring such expenses, except as otherwise provided in Section 2.6.
ARTICLE X
MISCELLANEOUS PROVISIONS
------------------------
10.1 Amendment and Modification. This Agreement may be amended,
--------------------------
modified or supplemented only by written agreement of each of the parties.
10.2 Waiver of Compliance; Consents. Any failure of any of the
------------------------------
parties to comply with any obligation, covenant, agreement or condition herein
may be waived by the party or parties entitled to the benefits thereof only by a
written instrument signed by the party granting such waiver, but such waiver or
failure to insist upon strict compliance with such obligation, covenant,
agreement or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure. Whenever this Agreement requires
or permits consent by or on behalf of any party hereto, such consent shall be
given in writing in a manner consistent with the requirement for a waiver of
compliance as set forth in this Section 10.2.
10.3 Notices. All notices or other communications hereunder shall be
-------
in writing and shall be given (and shall be deemed to have been duly given upon
receipt) by delivery in person against receipt, by facsimile transmission with
confirmation of receipt, or by registered or certified mail (return receipt
requested), postage prepaid, with an acknowledgment of receipt signed by the
addressee or an authorized representative thereof, addressed as follows (or to
such other address for a party as shall be specified by like notice; provided,
that notice of a change of address shall be effective only upon receipt
thereof):
If to AT&T PCS, to it at:
c/o AT&T Wireless Services, Inc.
5000 Carillon Point
Kirkland, WA 98033
Attn: William H. Hague, Esq.
Facsimile: (425) 828-8451
<PAGE>
With a copy to:
Rubin Baum Levin Constant & Friedman
30 Rockefeller Plaza
New York, NY 10112
Attn: Gregg S. Lerner, Esq.
Facsimile: (212) 698-7825
If to the Company, to it at:
Triton PCS Holdings, Inc.
c/o Triton Communications
101 Lindenwood Drive, Suite 125
Malvern, PA 19355
Attn: Michael E. Kalogris
Facsimile: (610) 993-2683
With a copy to:
Kleinbard, Bell & Brecker LLP
1900 Market Suite, Suite 700
Philadelphia, PA 19103
Attn: Howard J. Davis, Esq.
Facsimile: (215) 568-0140
10.4 Designated Purchasers. It is understood and agreed between the
---------------------
parties that the Company may cause one or more of its direct or indirect wholly
owned Subsidiaries (each a "Designated Purchaser") to purchase all or part of
--------------------
the Purchased Assets hereunder; provided, that notwithstanding any such
designation, the Company shall remain fully liable for all of its obligations
and those of the Designated Purchaser hereunder.
10.5 Parties in Interest; Assignment. This Agreement is binding upon
-------------------------------
and is solely for the benefit of the parties hereto and their respective
permitted successors, legal representatives and permitted assigns. Neither party
may assign its rights and obligations hereunder without the prior written
consent of the other party.
10.6 Applicable Law. This Agreement shall be governed by and
--------------
construed in accordance with the laws of the State of New York without giving
effect to the conflicts of law principles thereof. The parties hereto hereby
irrevocably and unconditionally consent to submit to the non-exclusive
jurisdiction of the courts of the State of New York and of the United States of
America located in the County of New York, New York (the "New York Courts") for
---------------
any litigation arising out of or relating to this Agreement and the
Transactions, waive any objection
<PAGE>
to the laying of venue of any such litigation in the New York Courts and agrees
not to plead or claim in any New York Court that such litigation brought therein
has been brought in an inconvenient forum.
10.7 Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument. Facsimile signatures on
this Agreement shall be deemed to be original signatures for all purposes.
10.8 Interpretation. The article and section headings contained in
--------------
this Agreement are for convenience of reference only, are not part of the
agreement of the parties and shall not affect in any way the meaning or
interpretation of this Agreement.
10.9 Entire Agreement. This Agreement, including the Exhibits and
----------------
Schedule hereto and the certificates and instruments delivered pursuant to the
terms of this Agreement, embody the entire agreement and understanding of the
parties hereto in respect of the Transactions. There are no restrictions,
promises, representations, warranties, covenants or undertakings, other than
those expressly set forth or referred to herein or in the Stockholders
Agreement. This Agreement supersedes all prior agreements and understandings
between the parties with respect to the Transactions.
10.10 Publicity. So long as this Agreement is in effect, the parties
---------
agree to consult with each other in issuing any press release or otherwise
making any public statement with respect to the Transactions, and no party shall
issue any press release or make any such public statement prior to such
consultation, except as may be required by Law. No press release or other
public statement by a party shall disclose any of the financial terms of the
Transactions without the prior consent of the other party, except as may be
required by Law. A breach of the provisions of this Section 10.10 by a party
shall not give rise to any right to terminate this Agreement.
10.11 Specific Performance. The parties hereto agree that irreparable
--------------------
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof in any New York Courts.
10.12 Remedies Cumulative. All rights, powers and remedies provided
-------------------
under this Agreement or otherwise available in respect hereof at law or in
equity shall be cumulative and not alternative, and the exercise or beginning of
the exercise of any thereof by any party shall not preclude the simultaneous or
later exercise of any other such right, power or remedy by such party.
10.13 Books and Records. Each party agrees that it will cooperate with
-----------------
and make available to the other party, during normal business hours, all books
and records relating to the
<PAGE>
Purchased Assets, the System, information and employees (without substantial
disruption of employment) retained and remaining in existence after the Closing
that are necessary or useful in connection with any inquiry, audit,
investigation or dispute, any litigation or investigation or any other matter
requiring any such books and records, information or employees for any
reasonable business purpose.
10.14 Severability. Any provision of this Agreement that is prohibited
------------
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. If any court determines
that any covenant or any part of any covenant is invalid or unenforceable, such
covenant shall be enforced to the extent permitted by such court, and all other
covenants shall not thereby be affected and shall be given full effect, without
regard to the invalid portions.
10.15 Beneficiaries of Agreement. The representations, warranties,
--------------------------
covenants and agreements expressed in this Agreement are for the sole benefit of
the other parties hereto and the Section 8.2 Indemnified Parties and Section 8.3
Indemnified Parties and are not intended to benefit, and may not be relied upon
or enforced by, any other party as a third party beneficiary or otherwise.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
TRITON PCS HOLDINGS, INC.
By: ______________________________
Name:
Title:
AT&T WIRELESS PCS INC.
By: ______________________________
Name:
Title:
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE I DEFINITIONS 1
ARTICLE II PURCHASE AND SALE OF ASSETS;
PAYMENT OF CONSIDERATION;CERTAIN RESTRICTIONS ON TRANSFER 6
2.1 Purchase and Sale of Purchased Assets 6
2.2 Excluded Assets 7
2.3 Payment of Consideration 8
2.4 Assumption of Obligations 8
2.5 No Expansion of Third-Party Rights 9
2.6 Payment of Certain Expenses 10
2.7 Restrictive Legends 10
2.8 Allocation of Purchase Price 10
ARTICLE III CLOSING 10
3.1 Time and Place of Closing 11
3.2 Closing Actions and Deliveries 11
3.3 Closing Costs; Taxes and Fees 13
ARTICLE IV COVENANTS 13
4.1 Consummation of Transactions 13
4.2 Confidentiality 14
4.3 Covenants of AT&T PCS 15
4.4 Covenants of the Company 17
4.5 Employees 18
4.6 Bulk Sales 20
4.7 Assignment of Assigned Agreements 20
4.8 Title; Risk of Loss 20
4.9 Non-Solicitation 20
4.10 Lien Searches 21
4.11 Completion of Construction 21
4.12 FCC Construction Requirement 22
4.13 Environmental Due Diligence 22
ARTICLE V REPRESENTATIONS AND WARRANTIES OF AT&T PCS 23
5.1 Organization, Power and Authority 23
5.2 Consents; No Conflicts 23
5.3 Litigation 24
5.4 FCC Compliance 24
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
5.5 Brokers 24
5.6 Stockholders Agreement 24
5.7 License 24
5.8 No Distribution 24
5.9 Investor Acknowledgments 25
5.10 Title to Purchased Assets 25
5.11 Employees 26
5.12 Contracts 26
5.13 Equipment 26
5.14 Environmental Matters 26
5.15 Compliance With Laws 27
5.16 Books and Records 27
5.17 FCC Construction Requirements 27
5.18 27
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF THE COMPANY 28
6.1 Organization, Power and Authority 28
6.2 Consents; No Conflicts 28
6.3 Litigation 29
6.4 FCC Compliance 29
6.5 Brokers 29
6.6 Stockholders Agreement 29
6.7 Shares 29
6.8 No Additional Representations 29
6.9 Compliance With Laws 30
6.10 No Material Adverse Effect 30
ARTICLE VII CLOSING CONDITIONS 30
7.1 Conditions to Obligations of All Parties 30
7.2 Conditions to Obligations of the Company 31
7.3 Conditions to the Obligations of AT&T PCS 32
ARTICLE VIII SURVIVAL AND INDEMNIFICATION 32
8.1 Survival 32
8.2 Indemnification by AT&T PCS 33
8.3 Indemnification by the Company 34
8.4 Procedures 34
ARTICLE IX TERMINATION 35
9.1 Termination 35
9.2 Effect of Termination 36
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
ARTICLE X MISCELLANEOUS PROVISIONS 36
10.1 Amendment and Modification 36
10.2 Waiver of Compliance; Consents 36
10.3 Notices 36
10.4 Designated Purchasers 37
10.5 Parties in Interest; Assignment 37
10.6 Applicable Law 38
10.7 Counterparts 38
10.8 Interpretation 38
10.9 Entire Agreement 38
10.10 Publicity 38
10.11 Specific Performance 38
10.12 Remedies Cumulative 38
10.13 Books and Records 39
10.14 Severability 39
10.15 Beneficiaries of Agreement 39
</TABLE>
<PAGE>
EXHIBIT 10.30
CONSTRUCTION AND OPERATING AGREEMENT
------------------------------------
THIS CONSTRUCTION AND OPERATING AGREEMENT is made and entered into this
31st day of July, 1998, by and between TRITON PCS OPERATING COMPANY L.L.C., a
Delaware limited liability company ("Consultant") (or another entity designated
by Consultant), and AT&T WIRELESS PCS, INC., a Delaware corporation ("Owner").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Owner is the sole holder of a license (the "License") granted to
Owner by the Federal Communications Commission (the "FCC") providing the right
to use 30 MHz of authorized frequencies to provide broadband personal
communications services ("PCS") service throughout the entirety of the Norfolk,
Virginia BTA (the "Area") and is the owner of certain assets used, useful or to
be used in connection with the operation of the wireless PCS telecommunications
system constructed by the Owner in the Area (the "System"); and
WHEREAS, Owner and Triton PCS Holdings, Inc., a Delaware corporation and
affiliate of Consultant ("Purchaser") are negotiating an Asset Purchase
Agreement with respect to the License and the System (such agreement, as
ultimately executed and delivered, the "Purchase Agreement") pursuant to which
Owner will sell or assign to Purchaser and one or more of its affiliates and
Purchaser and one or more of its affiliates will acquire from Owner the
Purchased Assets (as defined in the Purchase Agreement) in accordance with the
terms and conditions therein set forth; and
WHEREAS, the System is in the process of being constructed and has not yet
begun providing PCS service to customers; and
WHEREAS, Owner desires to retain Consultant to assist Owner in developing,
constructing, managing, improving, enhancing, operating and making other
material decisions concerning the System (including completion of the System's
construction and commencement of service) in accordance with the terms and
conditions set forth herein; and
WHEREAS, the parties acknowledge that the terms and conditions set forth in
this Agreement and the performance by the parties of their respective
obligations hereunder are subject to and are intended to be in compliance with
all FCC and other governmental rules and regulations governing the License, the
System and the transactions contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises and mutual covenants,
agreements, representations and warranties contained herein, and with the intent
to be legally bound hereby, the parties agree as follows:
1. APPOINTMENT. During the term of this Agreement and subject to the
-----------
conditions hereinafter set forth, Owner hereby retains Consultant, as an
independent contractor, to render its advice, recommendations and management
services to Owner in connection with the development,
<PAGE>
construction, improvement, enhancement, management and operation of the System
and the Purchased Assets. The appointment of Consultant hereunder is an
exclusive appointment and during the term of this Agreement Owner shall not,
without first fully discussing all matters concerning the System with Consultant
(and providing Consultant with such documentation and other information as
Consultant may deem appropriate) and receiving the written recommendation of
Consultant with respect thereto: (i) retain additional consultants; (ii)
develop, construct, improve, manage, operate or make any material decision
concerning the System or the Purchased Assets; or (iii) enter into or amend any
material contract or commitment; provided that Owner shall retain the right to
renegotiate and amend the System's shared communications facilities agreements
with the Virginia Department of Transportation (collectively, the "VA DOT
Leases") so long as Owner obtains Consultant's consent to any such amendment,
which consent shall not be unreasonably withheld; and provided further that
Consultant shall be required to consent to all amendments to the VA DOT Leases
that increase the amount of the rent credits thereunder. Subject to Owner's
oversight and approval pursuant to Section 4, the parties desire to vest in
---------
Consultant, to the fullest extent permissible under FCC and other governmental
rules or regulations governing the System and the License, the power and
authority on behalf of Owner to take any and all action Consultant may deem
appropriate in connection with the development, construction, improvement,
management, enhancement and operation of the System. Owner shall retain ultimate
use and control over the System in full compliance with FCC and other
governmental rules and regulations governing the System and the License.
2. TERM. The term of this Agreement shall commence on the date hereof
----
and end twelve (12) months thereafter; provided, however, that this Agreement
shall terminate upon the earlier to occur of: (a) the consummation of the
Closing (as defined in the Purchase Agreement), (b) the termination of the
Purchase Agreement pursuant to Section 9.1 thereof, (c) the termination of this
-----------
Agreement pursuant to Section 6, or (d) August 31, 1998, if the Purchase
---------
Agreement has not for any reason whatsoever been executed and delivered by Owner
and Purchaser by such date.
3. SERVICES. Consultant shall devote such time and effort as may be
--------
necessary, in the discretion of Consultant, to provide or cause to be provided,
in a commercially reasonable manner, the services necessary to develop,
construct, improve, enhance, manage and operate the System, including, without
limitation, the following activities:
(a) INITIAL CELL SITE CONSTRUCTION. Set forth on Schedule 3(a) hereto
------------------------------ -------------
is a list of partially constructed cell sites (the "Initial Cell Sites") and the
budget for such Initial Cell Sites. Consultant will complete construction of the
Initial Cell Sites utilizing Owner-provided financing or funds; provided,
however, in the event that the cost of such construction exceeds the budget set
forth on Schedule 3(a), Consultant shall be responsible for such additional
-------------
amounts.
(b) ADDITIONAL BUILD-OUT. Set forth on Schedule 3(b) hereto is a
-------------------- -------------
capital expenditures budget for construction of cell sites in addition to the
Initial Cell Sites (the "Additional Cell Sites"). Consultant will construct the
Additional Cell Sites utilizing its own financing or funds and will be
reimbursed by the Owner pursuant to Section 8(a) hereof.
------------
2
<PAGE>
(c) OPERATING BUDGET. Set forth on Schedule 3(c) hereto is an
---------------- -------------
operating budget for the System (the "Operating Budget"). All updates,
supplements and amendments to the Operating Budget proposed by Consultant will
be presented to Owner for its consideration and approval in accordance with
Section 4. Consultant will expend Owner-provided financing or funds in
- ---------
accordance with the Operating Budget, subject to Owner's right to reimbursement
as provided in Section 8(c)(1); provided, however, that in the event that the
---------------
Consultant incurs costs in excess of the amounts set forth in the Operating
Budget, Consultant shall be responsible for such additional costs.
(d) SYSTEM DESIGN AND CONSTRUCTION SCHEDULES. Consultant shall
----------------------------------------
develop, from time to time, system designs and construction schedules for the
System, which shall include, as applicable: (i) construction budgets detailing
the timing and the projected amounts of expected expenditures for the purchase
and lease of equipment and the improvement and enhancement of the System; and
(ii) system designs, including the anticipated switching arrangements, the
number and approximate location of Additional Cell Sites and the type of
equipment to be used in constructing the System (collectively, the "System
Design and Budget"). The System Design and Budget and all updates, supplements
and amendments thereto proposed by Consultant will be presented to Owner for its
consideration and approval in accordance with Section 4, prior to the
---------
implementation thereof by Consultant or of any significant modification,
improvement or enhancement of the System.
(e) SITE SELECTION AND ACQUISITION. Subject to Owner's approval in
------------------------------
accordance with Section 4, Consultant shall recommend control point, base
---------
station and microwave sites, and system equipment, tower, antenna, retail sales
and service, and office locations; subject to the proviso in Section 1 with
---------
respect to the VA DOT Leases, negotiate (as Owner's agent) for the lease,
purchase, construction, improvement or enhancement of the same; and prepare all
required applications and forms and assist Owner in obtaining planning, zoning,
Federal Aviation Administration ("FAA"), FCC, building, environmental, use,
occupancy, and other permits and licenses required in connection therewith.
(f) EQUIPMENT ACQUISITIONS. Consultant shall recommend one or more
----------------------
equipment and other vendors and lessors and, subject to the approval of Owner in
accordance with Section 4, Consultant shall negotiate (as Owner's agent) the
---------
terms and conditions of the contracts with such vendors and lessors for the
acquisition and/or installation of such equipment as may be necessary or
appropriate to construct, improve, enhance and operate the System as configured
in the System Design and Budget.
(g) SWITCH-SHARING AGREEMENTS. Subject to the approval of Owner in
-------------------------
accordance with Section 4, Consultant shall negotiate (as Owner's agent) a
---------
switch-sharing and other related agreement(s) if such agreements are recommended
by Consultant to improve, enhance or operate the System as configured in the
System Design and Budget.
(h) INTERCONNECTIONS. Subject to the approval of Owner in accordance
----------------
with Section 4, Consultant shall negotiate (as Owner's agent) with such local
---------
exchange telephone permittees or companies as Consultant may deem appropriate,
the terms and conditions by which the System will be interconnected to the local
exchange switched telephone network and/or to the
3
<PAGE>
facilities of one or more interexchange common carriers, and shall supervise and
manage such interconnections.
(i) COMMENCEMENT OF SERVICE. Subject to the approval of Owner in
-----------------------
accordance with Section 4, Consultant shall begin providing PCS service to
---------
customers upon, in Consultant's reasonable opinion, the System becoming
operational.
(j) OTHER MATTERS. Subject to the approval of Owner in accordance
-------------
with Section 4, Consultant shall assist Owner in the following matters:
---------
(1) OVERSIGHT. Overseeing the development and construction of the
---------
System, as a general contractor, and, after construction, managing the day-to-
day operations of the System and overseeing the improvement and enhancement of
the System;
(2) FINANCING. Arranging for financing required for the development,
---------
construction, improvement, enhancement and operation of the System;
(3) STAFFING. The hiring, training and managing of Owner's
--------
administrative, technical and sales staff and independent contractors, as may be
necessary in connection with the development, construction, improvement,
enhancement and operation of the System;
(4) MARKETING. Developing and implementing a marketing program
---------
including, but not limited to, recommendations with respect to the types of
services to be offered, the rates and prices to be charged for such services,
and advertising and promotional campaigns, and handling customer inquiries,
complaints and credit verifications;
(5) BILLING. Arranging for the billing and collection of all fees,
-------
charges or other compensation due to Owner (including, without limitation, the
retention of a billing service company to facilitate the foregoing) and
arranging for the payment of all expenses and fees incurred or payable in
connection with the operation of the System utilizing Owner-provided financing
or funds and operating revenue;
(6) BANK ACCOUNTS. Receiving and distributing the funds of Owner,
-------------
including, without limitation, maintaining bank accounts in the name of Owner;
(7) MAINTENANCE. Arranging for the maintenance, repair and
-----------
replacement of the System;
(8) INSURANCE. Arranging for property, casualty, liability and other
---------
insurance for the System which Consultant shall deem appropriate and necessary
with one or more insurance companies having at least an AA Best insurance rating
listing Owner as the insured and Consultant as an additional insured;
4
<PAGE>
(9) PERMIT APPLICATIONS. Taking all necessary action to arrange for
-------------------
the preparation and delivery to Owner for review and execution all applications
and other instruments necessary for the System to comply with the rules,
regulations, policies and orders of any governmental authority (including,
without limitation, FCC and state public utility filings) having jurisdiction
over Owner, the License or the System, including without limitation,
modifications of the License;
(10) RECORD KEEPING. Arranging for appropriate office record keeping,
--------------
bookkeeping and accounting and for the preparation and filing of all returns or
reports;
(11) OTHER ARRANGEMENTS. Arranging for the provision to the System of
------------------
services, supplies, utilities, concessions and the like;
(12) REPRESENTATION. Representing the System before governmental
--------------
agencies, including the preparation of such reports, tariffs, forms, and
applications as may be necessary or desirable; and
(13) OTHER AGREEMENTS. Obtaining such agreements as may be necessary
----------------
or desirable for roaming, shared facilities, and other services, and other
construction or operational purposes (including, without limitation, resale,
agent and dealer agreements).
(k) GENERAL. In addition to the duties and responsibilities of
-------
Consultant specifically enumerated herein, Consultant shall have the authority
to undertake, and may undertake, any and all other actions necessary or
advisable, in its discretion, to assist Owner in the development, construction,
improvement, enhancement and operation of the System, including, without
limitation, the authority to act as agent for and on behalf of Owner in entering
into and performing contractual arrangements, subject to the review and approval
of Owner in accordance with Section 4 of this Agreement.
---------
4. APPROVALS.
---------
(a) OWNER'S REPRESENTATIVE. Set forth on Schedule 4(a) are the names
---------------------- -------------
and addresses of the individuals that Owner has designated to be its
representatives and points of contact with Consultant (each, a "Designee").
Designee shall be fully authorized to (i) approve on behalf of Owner any and all
System Design and Budget items, proposals and requests made and actions taken by
Consultant pursuant to this Agreement, and Consultant shall be permitted to rely
on such authorization without inquiry or investigation; and (ii) execute on
behalf of Owner all agreements, documents and instruments that may be necessary
or appropriate in connection with the development, construction, management,
improvement, enhancement and operation of the System. Owner may at any time
select, after written notification to Consultant, a new Designee without
amendment of this Agreement and shall do so within ten (10) days of the death,
disability or incapacity of Designee or the termination of Designee by Owner.
Neither Owner nor Designee shall unreasonably withhold, delay or condition
approval of any matter for which Owner's approval is required under this
Agreement or the due execution, delivery and performance by Owner of any
agreement, document, or instrument which may be necessary or appropriate in
connection with the
5
<PAGE>
development, construction, management, improvement, enhancement and operation of
the System. Consultant shall have access to Designee during normal business
hours. Designee shall at all times keep himself/herself adequately informed of
all matters concerning the development, construction, management, improvement,
enhancement and operation of the System.
(b) NOTIFICATION. Designee shall notify (the "Notice") Consultant in
------------
writing within ten (10) business days (unless circumstances beyond the
reasonable control of Consultant require a sooner response, in which case,
Designee shall respond within the time frame required by Consultant) after
Designee's receipt of any request for approval or other action, of Designee's
acceptance or rejection of the contract, proposal or action, which Notice shall
include a reasonably detailed statement of the basis for any rejection. All
matters not specifically rejected by Designee in such Notice shall be deemed
approved. In the event that Consultant fails to receive the Notice with respect
to any matter within the ten (10) business day period, such matter will be
deemed to have been approved.
(c) FAILURE TO APPROVE. Should Designee decline to accept a contract,
------------------
proposal, action or recommendation of Consultant for which approval by Owner is
required within the time provided in Section 4(b), the parties shall exercise
------------
commercially reasonable efforts to modify such contract, proposal, action or
recommendation of Consultant to render it mutually acceptable during a period
not to exceed ten (10) business days after Consultant's receipt of Designee's
rejection; provided that in the absence of such approval Consultant shall not
take such proposed actions requiring the approval of Owner.
(d) DUTY TO COOPERATE. Owner and Designee shall use all commercially
-----------------
reasonable efforts to cooperate with Consultant in order to facilitate
Consultant's performance of its duties under this Agreement. Owner and Designee
shall cooperate with Consultant in making all necessary or desirable filings
with federal, state or local governmental agencies and shall use all
commercially reasonable efforts to cooperate in taking all other actions
reasonably necessary to effectuate the purposes of this Agreement. Owner and
Designee shall notify Consultant promptly of any request, decision, or order
from any governmental agency or third party applicable to the License, the
System or any portion thereof.
(e) MODIFICATION; DIMINIMUS OBLIGATIONS. Consultant shall be
-----------------------------------
authorized, without seeking further approval of Owner, to expend funds to
construct the System in accordance with the System Design and Budget in amounts
not exceeding one hundred ten percent (110%) of the System Design and Budget.
Once approval with respect to a matter has been obtained, Consultant shall be
permitted to rely on such approval in undertaking any action Consultant deems
necessary to implement such approval, with such modifications as Consultant
deems necessary or appropriate in its reasonable discretion; provided, however,
that any material modification must be approved by Designee in accordance with
this Section 4. Consultant shall not be required to obtain the approval of
---------
Owner in connection with any proposal or action concerning obligations of less
than fifty thousand dollars ($50,000), unless as a result thereof, the
expenditures to construct the System exceed one hundred ten percent (110%) of
the System Design and Budget.
6
<PAGE>
5. LICENSE AGREEMENT. During the term of this Agreement, Consultant
-----------------
shall enjoy the benefit of the Network Membership License Agreement dated as of
February 4, 1998 (the "License Agreement"), and shall operate the System on
behalf of Owner, as if the Area were part of the Licensed Territory (as defined
in the License Agreement).
6. TERMINATION. Subject to the terms of Section 2, this Agreement may be
----------- ---------
terminated by either party if the terminating party is not in default with
respect to its obligations hereunder and no event has occurred which with the
giving of notice or the passage of time would constitute a default hereunder, as
follows:
(a) Owner may terminate this Agreement by written notice to Consultant
in the event of a material breach of this Agreement by Consultant which is not
cured within thirty (30) days after written notice of such breach is given by
Owner to Consultant; provided, however, if the cause of such default reasonably
requires more than thirty (30) days to cure, Consultant will not be deemed to be
in breach hereunder if Consultant is diligently pursuing the cure thereof.
(b) Consultant may terminate this Agreement by written notice to Owner
in the event of (i) Owner's failure to pay any amount when due which is not
cured within ten (10) days after written notice of such breach is given by
Consultant to Owner or (ii) a material breach (other than nonpayment) of this
Agreement by Owner which is not cured within thirty (30) days after written
notice of such breach is given by Consultant to Owner; provided, however, if the
cause of such default reasonably requires more than thirty (30) days to cure,
Owner will not be deemed to be in breach hereunder if Owner is diligently
pursuing the cure thereof.
7. ACCOUNTING AND REPORTS.
----------------------
(a) BOOKS AND REPORTS. Consultant with the assistance and cooperation
-----------------
of Owner shall keep or cause to be kept complete and accurate accounts and books
and records with respect to the construction and operation of the System in
accordance with industry standards and generally accepted accounting principles
consistently applied, showing all System costs, expenditures, receipts,
liabilities, profits and losses and all other records required in connection
with the construction and operation of the System.
(b) FINANCIAL STATEMENTS. Upon commencement of PCS services by the
--------------------
System and thereafter, within forty-five (45) days after the end of each
calendar quarter, Consultant with the cooperation and assistance of Owner shall
prepare or cause to be prepared and transmitted to Owner, quarterly financial
statements for the System which shall include a balance sheet, income statement
and statement of cash flows, each prepared in accordance with generally accepted
accounting principles (excluding footnotes). Within ninety (90) days after the
end of each calendar year, Consultant with the cooperation and assistance of
Owner shall prepare or cause to be prepared and transmitted to Owner, annual
financial statements for the System which shall include a balance sheet, income
statement and statement of cash flows, each prepared in accordance with
generally accepted accounting principles (excluding footnotes). Owner shall
provide Consultant promptly with any information which Consultant shall
reasonably request in connection with the preparation of any of the foregoing
statements.
7
<PAGE>
(c) ACCESS TO BOOKS AND RECORDS. Owner shall have access, at all
---------------------------
reasonable times, to the books and records maintained by Consultant pursuant to
Section 7(a) of this Agreement. In addition, such books and records shall be
- ------------
subject to periodic audit and review by the accountants and other
representatives of Owner upon five (5) business days advance notice to ensure
that the services being provided by Consultant hereunder are in a manner
consistent with good business practices and industry standards.
8. COMPENSATION PAYABLE TO CONSULTANT.
----------------------------------
(a) CAPITAL EXPENDITURES REIMBURSEMENT. Owner shall promptly
----------------------------------
reimburse Consultant for the cost of each Additional Cell Site constructed by
Consultant in accordance with Schedule 3(b) hereof, to the extent that, and only
-------------
to the extent that, the cost of any such Additional Cell Site does not exceed
the amount set forth on Schedule 3(b) hereof with respect thereto.
-------------
(b) MANAGEMENT SERVICE FEE. Owner shall pay Consultant a "Management
----------------------
Service Fee", on a monthly basis, for the performance of Consultant's
responsibilities under this Agreement with respect to the operation of the
System in an amount equal to the lesser of (x) three percent (3%) of the
revenues of the System for such month and (y) $30,000.
(c) PAYMENTS.
--------
(1) In the event that the Closing under the Purchase Agreement occurs:
(i) the requirement of Owner to reimburse Consultant in respect of the cost of
any Additional Cell Site and to pay the Management Service Fee shall be
extinguished; (ii) Owner shall pay to Consultant one hundred percent (100%) of
the revenues of the System, and no other payment shall be required in respect
thereof for such expenses, expenditures or fees incurred, made or earned; and
(iii) Consultant shall reimburse Owner for all funds expended by Owner: (A) in
accordance with the Operating Budget; (B) in respect of amounts theretofore
reimbursed to Consultant pursuant to Section 8(a) for the construction of any
------------
Additional Cell Sites; and (C) in respect of amounts theretofore paid to
Consultant pursuant to Section 8(b) as a Management Service Fee.
------------
(2) In the event the Purchase Agreement is terminated for any reason,
Owner shall pay Consultant, within ninety (90) days following the effective date
of such termination, an amount equal to (i) all costs required to be reimbursed
to Consultant pursuant to Section 8(a) (and not theretofore reimbursed to
------------
Consultant) in respect of the construction of any Additional Cell Sites and (ii)
the Management Service Fee incurred and unpaid through the effective date of
such termination.
9. DISPUTE RESOLUTION. All disputes, controversies and claims arising in
------------------
connection with this Agreement that are not settled by agreement between the
parties shall be finally settled in accordance with Section 12.8 of the
Stockholders Agreement of Purchaser dated as of February 4, 1998.
8
<PAGE>
10. MISCELLANEOUS.
-------------
(a) EXPENSES. All expenses incurred by or on behalf of the parties
--------
hereto in connection with the negotiation and preparation of this Agreement,
including, without limitation, all fees and expenses of agents, representatives,
counsel and accountants employed by the parties hereto in connection with the
negotiation, preparation and execution of the transactions contemplated by this
Agreement shall be borne solely by the party who shall have incurred the same.
(b) NOTICES. All notices and other communications hereunder shall be
-------
in writing and shall be given (and shall be deemed to have been duly given upon
receipt) by delivery in person against receipt, by facsimile with confirmation
of receipt, or by registered or overnight courier (return receipt requested),
postage prepaid, with an acknowledgment of receipt signed by the addressee or an
authorized representative thereof, addressed as follows (or to such other
address for a party as shall be specified by like notice; provided, that notice
of a change of address shall be effective only upon receipt thereof):
If to Consultant, to it at:
Triton PCS Operating Company L.L.C.
c/o Triton Communications
101 Lindenwood Drive, Suite 125
Malvern, PA 19355
Attention: Michael Kalogris
Facsimile: (610) 993-2683
with a copy to:
Kleinbard, Bell & Brecker LLP
1900 Market Street, Suite 700
Philadelphia, Pennsylvania 19103
Attention: Howard J. Davis, Esquire
Facsimile: (215) 568-0140
If to Owner or Designee, to it at:
AT&T Wireless PCS, Inc.
c/o AT&T Wireless Services, Inc.
5000 Carillon Point
Kirkland, WA 98033
Attention: William H. Hague, Esquire
Facsimile: (425) 828-8451
9
<PAGE>
with a copy to:
Rubin Baum Levin Constant & Friedman
30 Rockefeller Plaza
New York, NY 10112
Attention: Gregg S. Lerner, Esquire
Facsimile: (212) 698-7825
(c) LIABILITY; INDEMNIFICATION.
--------------------------
(1) Neither Consultant nor any of its affiliates, nor any of their
respective officers, directors, partners, managers, shareholders, managers,
employees or agents, shall be liable to Owner for (i) revocation of the License
or any error of judgment or other act or omission performed or omitted by any of
such parties under this Agreement or otherwise, unless such error or judgment or
other act or omission results from the gross misconduct or negligence of such
parties, or (ii) any delay in the construction of the System or the performance
of its obligations hereunder unless such delay or failure of performance results
from the gross misconduct or negligence of such parties.
(2) Owner hereby indemnifies, defends and holds harmless Consultant
and its affiliates and their respective officers, directors, partners,
shareholders, members, managers, employees and agents from and against all
liabilities and expenses (including reasonable attorneys' fees and
disbursements) incurred by Consultant or its affiliates that arise out of or
result from any default by Owner in the performance of its obligations under
this Agreement or any third party claim against Consultant or its affiliates
based upon the negligence, willful misconduct or breach by Owner of any of the
provisions of this Agreement on its part to be performed, except to the extent
(and only to the extent) any such liabilities or expenses arise out of or result
from the gross negligence or willful misconduct of Consultant or its affiliates.
Consultant hereby indemnifies, defends and holds harmless Owner and its
affiliates and their respective officers, directors, partners, shareholders,
members, managers, employees and agents from and against all liabilities and
expenses (including reasonable attorneys' fees and disbursements) incurred by
Owner or its affiliates that arise out of or result from any default by
Consultant in the performance of its obligations under this Agreement or any
third party claim against Owner or its affiliates based upon the negligence,
willful misconduct or breach by Consultant of any of the provisions of this
Agreement on its part to be performed, except to the extent (and only to the
extent) any such liabilities or expenses arise out of or result from the gross
negligence or willful misconduct of Owner or its affiliates.
(3) Claims for indemnification under Section 10(c)(2) shall be made
----------------
pursuant to the procedures set forth in Section 8.4 of the Purchase Agreement.
(d) WAIVERS AND AMENDMENTS. This Agreement may be amended,
----------------------
superseded, canceled, renewed or extended, and the terms hereof may be waived,
and consents may be provided, only by a written instrument signed by Consultant
and Owner or, in the case of a waiver, by the party waiving compliance. No
delay on the part of any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof; nor shall any waiver on the part of
10
<PAGE>
any party of any such right, power or privilege, nor any single or partial
exercise thereof, preclude any further exercise thereof or the exercise of any
other right, power or privilege.
(e) FURTHER ASSURANCES. Each party hereto shall, whenever and as
------------------
often as reasonably requested to do so by another party hereto, execute and
deliver, or cause to be executed and delivered, to such other party, all such
further instruments as such other party may reasonably request in order to carry
out fully the terms and provisions of this Agreement.
(f) COUNTERPARTS. This Agreement may be executed in any number of
------------
counterparts, each of which will be deemed an original, but all of which
together shall constitute one and the same instrument.
(g) SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
----------------------
shall inure to the benefit of the parties hereto, their respective heirs,
representatives, successors and assigns, but shall not be assignable or
delegable in whole or in part by any party without the prior written approval of
Owner and Consultant, except as expressly provided herein. Notwithstanding the
foregoing, Consultant shall have the unrestricted right to assign this Agreement
to any affiliate of Consultant; provided, however, that Consultant shall remain
liable for the performance of its obligations hereunder notwithstanding any such
assignment.
(h) ENTIRE AGREEMENT. This Agreement together with the Purchase
----------------
Agreement and the Schedules and Exhibits thereto and hereto represents the
entire agreement and understanding of the parties hereto with respect to the
subject matter hereof, supersedes all other and prior negotiations, discussions,
correspondence, communications, memoranda and agreements between the parties
hereto and their Affiliates with respect to the subject matter hereof.
(i) GOVERNING LAW. This Agreement is governed by and shall be
-------------
construed in accordance with the substantive law of the State of New York,
excluding any conflict of laws rule or principle that might refer the governance
or the construction of this operating agreement to the law of another
jurisdiction.
(j) RELATIONSHIP OF PARTIES. This Agreement does not create a
-----------------------
partnership or joint venture between any or all of the parties to this
Agreement.
(k) SECTION HEADINGS. The section headings contained in this
----------------
Agreement are solely for convenience of reference and shall not affect the
meaning or interpretation of this Agreement or any term or provision hereof.
(l) SEVERABILITY. If any provision of this Agreement or any part
------------
thereof is declared invalid by any court of competent jurisdiction, such act
shall not affect the validity of this Agreement, and the remainder of this
Agreement shall remain in full force and effect according to the terms of the
remaining provisions or parts of provisions hereof. If any provision of this
Agreement is found to be unreasonable and unenforceable by any court of
competent jurisdiction, such provision shall be modified to the extent necessary
to cause such provision to be reasonable and binding upon the parties hereto.
11
<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed as of the date
hereinabove indicated.
CONSULTANT:
TRITON PCS OPERATING COMPANY L.L.C.
By: /s/ David D. Clark
------------------------------------------
Name: David D. Clark
Title: Senior Vice President and Chief
Financial Officer
OWNER:
AT&T WIRELESS PCS INC.
By:
-------------------------------------------
Name:
Title:
<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed as of the date
hereinabove indicated.
CONSULTANT:
TRITON PCS OPERATING COMPANY L.L.C.
By:
------------------------------------------
Name:
Title:
OWNER:
AT&T WIRELESS PCS INC.
By: /s/ William W. Hague
-------------------------------------------
Name: William W. Hague
Title:
<PAGE>
SCHEDULE 3(a)
INITIAL CELL SITES AND BUDGET
-----------------------------
See attached.
<PAGE>
ASSET PURCHASE AGREEMENT
Exhibit 4.11
Incomplete Cell Sites
NF-088 (Lynnhaven United)--contract to be awarded week of 7/20, construction
will not start until final court ruling (est. end of July), if AWS do not
receive favorable ruling-site will not be built.
Estimated budget cost-$130,000
NF-121 (Col. Wmsbg)-- tower built, shelter is set, power & telco to be
installed, cables will be installed after installation of power & telco,
existing tower to be dismantled after final completion of new tower.
Estimated budget cost-$200,000
NF-149 (Eberwine)--bids to be received this week, contract to be awarded early
next week, construction time frame is 45 days.
Estimated budget cost-$150,000
<PAGE>
SCHEDULE 3(b)
-------------
BUDGET FOR ADDITIONAL CELL SITES
<TABLE>
<CAPTION>
EXPENSE NORFOLK NOCC NEW CELL CO-LOCATION ROOFTOP OTHER TOTALS
SWITCH SITES SITES SITES CAPITAL
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
# Incremental 2 2 2 6
Sites
- ----------------------------------------------------------------------------------------
RF 0 0 $ 28,000 $ 27,000 $ 27,000 0 $ 82,000
Engineering
- ----------------------------------------------------------------------------------------
Transmission/ 0 0 $ 11,850 $ 4,000 $ 6,000 0 $ 21,850
Microwave
- ----------------------------------------------------------------------------------------
Site 0 0 $ 18,500 $ 18,500 $ 18,500 0 $ 55,500
Acquisition
- ----------------------------------------------------------------------------------------
Zoning/ 0 0 $ 28,500 $ 11,600 $ 11,600 0 $ 51,700
Planning
- ----------------------------------------------------------------------------------------
Architecture 0 0 $ 20,200 $ 14,950 $ 10,800 0 $ 45,950
& Engineering
- ----------------------------------------------------------------------------------------
Construction 0 0 $ 16,000 $ 16,000 $ 16,000 0 $ 48,000
Management
- ----------------------------------------------------------------------------------------
Materials & 0 0 $404,300 $344,300 $330,300 0 $1,078,900
Equipment
- ----------------------------------------------------------------------------------------
System 0 0 0 0 0 0 0
Software &
Equipment
- ----------------------------------------------------------------------------------------
Civil 0 0 $168,700 $ 81,000 $ 78,000 0 $ 327,700
Construction
- ----------------------------------------------------------------------------------------
Retail Fit-Out 0 0 0 0 0 $1,000,000 $1,000,000
- ----------------------------------------------------------------------------------------
Cost Sharing 0 0 0 0 0 0 0
- ----------------------------------------------------------------------------------------
TOTAL 0 0 $696,050 $517,350 $498,200 $1,000,000 $2,711,600
ENGINEERING
CAPITAL
- ----------------------------------------------------------------------------------------
NORFOLK $ 340,000 $ 340,000
SYSTEM
OPTIMIZATION
- ----------------------------------------------------------------------------------------
TOTAL 0 0 $696,050 $517,350 $498,200 $1,340,000 $3,011,600
NORFOLK
- ----------------------------------------------------------------------------------------
</TABLE>
<PAGE>
SCHEDULE 3(C)
-------------
OPERATING BUDGET
SEE ATTACHED MONTHLY BUDGET
<PAGE>
SCHEDULE 3(C)
-------------
MONTHLY BUDGET
<TABLE>
<CAPTION>
Technical Operations
- --------------------
<S> <C>
Payroll.............................................. $ 80,000
Office Overhead (Including Utilities)................ $ 42,000
Sites Leases(1)...................................... $180,000
Total for Technical Operations............................... $302,000
--------
Finance and Administration
- --------------------------
Payroll.............................................. $ 15,000
Office Overhead (Including Utilities)................ $ 6,200
Office Leases........................................ $ 8,600
Materials and Inventory.............................. $ 1,600
Total for Finance and Administration......................... $ 31,400
--------
Total........................................................ $333,400
========
</TABLE>
- -------------
(1) Includes amounts for which AT&T PCS has prepaid rent with the Virginia
Department of Transportation and the Commonwealth of Virginia.
<PAGE>
SCHEDULE 4(A)
-------------
DESIGNEES
DONALD ADAMS
WILLIAM HAGUE
COLIN HOLLAND
<PAGE>
EXHIBIT 10.31.1
AMENDMENT NO.1 TO LETTER AGREEMENT
----------------------------------
AMENDMENT NO.1 TO LETTER AGREEMENT ("Agreement"), dated as of June
28,1998, by and among TRITON MANAGEMENT COMPANY, INC., a Delaware corporation
(the "Company"), TRITON PCS HOLDINGS, INC., a Delaware corporation formerly
known as Triton PCS, Inc. ("Triton"), and CLYDE SMITH ("Executive").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Executive is the record and beneficial owner of 3,139.79
shares (the "Original Shares") of Triton's common stock, par value $.01 per
share (the "Common Stock"); and
WHEREAS, the Company, Triton and Executive are parties to that certain
Letter Agreement dated as of February 4, 1998 (the "Letter Agreement") providing
for, among other things, certain rights and obligations of the parties
respecting the Original Shares; and
WHEREAS, on the date hereof Triton has entered into a certain
Preferred Stock Purchase Agreement dated as of the date hereof (the "Purchase
Agreement") among Triton, the Cash Equity Investors, the Management Stockholders
and the Independent Directors party thereto (as each such term is defined in the
Purchase Agreement); and
WHEREAS, in connection with the Myrtle Beach Closing (as defined in
the Purchase Agreement), Executive was awarded on the date hereof an additional
622.22 shares of Common Stock (the "Myrtle Beach Shares"), and Executive is
scheduled to receive additional shares of Common Stock in connection with the
consummation of certain other transactions contemplated by the Purchase
Agreement; and
WHEREAS, the parties desire to amend the Letter Agreement to reflect
the issuance and potential future issuances of shares of Common Stock to
Executive pursuant to the Purchase Agreement;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the Company, Triton and Executive, intending to be legally bound,
hereby agree as follows:
1. Amendment to Definition. From and after the date hereof, all
-----------------------
references to the term "Shares", as that term is defined in the Letter
Agreement, shall include the Original Shares, the Myrtle Beach Shares, and any
other shares of Common Stock that are awarded to Executive pursuant to the
Purchase Agreement.
<PAGE>
2. No Further Changes. Except for such amendment, all other terms and
------------------
conditions of the Letter Agreement shall remain the same and continue in full
force and effect, and the Letter Agreement, as amended hereby, shall constitute
the legally valid and binding obligation of the parties hereto enforceable in
accordance with its terms.
IN WITNESS WHEREOF, each of the Company and Triton has caused this
Agreement to be executed by a duly authorized officer, and Executive has
hereunto set his hand as of the day and year first above written.
COMPANY:
TRITON MANAGEMENT COMPANY, INC.
By: /s/ Steven R. Skinner
---------------------------------------------
Steven R. Skinner, President
TRITON:
TRITON PCS HOLDINGS, INC.
By: /s/ Steven R. Skinner
---------------------------------------------
Steven R. Skinner, President
EXECUTIVE:
/s/ Clyde Smith
---------------------------------------------
Clyde Smith
2
<PAGE>
EXHIBIT 10.32.1
AMENDMENT NO.1 TO LETTER AGREEMENT
----------------------------------
AMENDMENT NO.1 TO LETTER AGREEMENT ("Agreement"), dated as of June 29,
1998, by and among TRITON MANAGEMENT COMPANY, INC., a Delaware corporation
(the "Company"), TRITON PCS HOLDINGS, INC., a Delaware corporation formerly
known as Triton PCS, Inc. ("Triton"), and DAVID D. CLARK ("Executive").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Executive is the record and beneficial owner of 5,887.11
shares (the "Original Shares") of Triton's common stock, par value $.01 per
share (the "Common Stock"); and
WHEREAS, the Company, Triton and Executive are parties to that certain
Letter Agreement dated as of February 4, 1998 (the "Letter Agreement") providing
for, among other things, certain rights and obligations of the parties
respecting the Original Shares; and
WHEREAS, on the date hereof Triton has entered into a certain
Preferred Stock Purchase Agreement dated as of the date hereof (the "Purchase
Agreement") among Triton, the Cash Equity Investors, the Management Stockholders
and the Independent Directors party thereto (as each such term is defined in the
Purchase Agreement); and
WHEREAS, in connection with the Myrtle Beach Closing (as defined in
the Purchase Agreement), Executive was awarded on the date hereof an additional
1,166.66 shares of Common Stock (the "Myrtle Beach Shares"), and Executive is
scheduled to receive additional shares of Common Stock in connection with the
consummation of certain other transactions contemplated by the Purchase
Agreement; and
WHEREAS, the parties desire to amend the Letter Agreement to reflect
the issuance and potential future issuances of shares of Common Stock to
Executive pursuant to the Purchase Agreement;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the Company, Triton and Executive, intending to be legally bound,
hereby agree as follows:
1. Amendment to Definition. From and after the date hereof, all
-----------------------
references to the term "Shares", as that term is defined in the Letter
Agreement, shall include the Original Shares, the Myrtle Beach Shares, and any
other shares of Common Stock that are awarded to Executive pursuant to the
Purchase Agreement.
<PAGE>
2. No Further Changes. Except for such amendment, all other terms and
------------------
conditions of the Letter Agreement shall remain the same and continue in full
force and effect, and the Letter Agreement, as amended hereby, shall constitute
the legally valid and binding obligation of the parties hereto enforceable in
accordance with its terms.
IN WITNESS WHEREOF, each of the Company and Triton has caused this
Agreement to be executed by a duly authorized officer, and Executive has
hereunto set his hand as of the day and year first above written.
COMPANY:
TRITON MANAGEMENT COMPANY, INC.
By: /s/ Steven R. Skinner
--------------------------------------------------
Steven R. Skinner, President
TRITON:
TRITON PCS HOLDINGS, INC.
By: /s/ Steven R. Skinner
--------------------------------------------------
Steven R. Skinner, President
EXECUTIVE:
/s/ David D. Clark
--------------------------------------------------
David D. Clark
2
<PAGE>
EXHIBIT 10.33.1
AMENDMENT NO.1 TO LETTER AGREEMENT
----------------------------------
AMENDMENT NO.1 TO LETTER AGREEMENT ("Agreement"), dated as of June 29,
1998, by and among TRITON MANAGEMENT COMPANY, INC., a Delaware corporation
(the "Company"), TRITON PCS HOLDINGS, INC., a Delaware corporation formerly
known as Triton PCS, Inc. ("Triton"), and DAVID STANDIG ("Executive").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Executive is the record and beneficial owner of 2,943.56
shares (the "Original Shares") of Triton's common stock, par value $.01 per
share (the "Common Stock"); and
WHEREAS, the Company, Triton and Executive are parties to that certain
Letter Agreement dated as of February 4, 1998 (the "Letter Agreement") providing
for, among other things, certain rights and obligations of the parties
respecting the Original Shares; and
WHEREAS, on the date hereof Triton has entered into a certain
Preferred Stock Purchase Agreement dated as of the date hereof (the "Purchase
Agreement") among Triton, the Cash Equity Investors, the Management Stockholders
and the Independent Directors party thereto (as each such term is defined in the
Purchase Agreement); and
WHEREAS, in connection with the Myrtle Beach Closing (as defined in
the Purchase Agreement), Executive was awarded on the date hereof an additional
583.33 shares of Common Stock (the "Myrtle Beach Shares"), and Executive is
scheduled to receive additional shares of Common Stock in connection with the
consummation of certain other transactions contemplated by the Purchase
Agreement; and
WHEREAS, the parties desire to amend the Letter Agreement to reflect
the issuance and potential future issuances of shares of Common Stock to
Executive pursuant to the Purchase Agreement;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the Company, Triton and Executive, intending to be legally bound,
hereby agree as follows:
1. Amendment to Definition. From and after the date hereof, all
-----------------------
references to the term "Shares", as that term is defined in the Letter
Agreement, shall include the Original Shares, the Myrtle Beach Shares, and any
other shares of Common Stock that are awarded to Executive pursuant to the
Purchase Agreement.
<PAGE>
2. No Further Changes. Except for such amendment, all other terms and
------------------
conditions of the Letter Agreement shall remain the same and continue in full
force and effect, and the Letter Agreement, as amended hereby, shall constitute
the legally valid and binding obligation of the parties hereto enforceable in
accordance with its terms.
IN WITNESS WHEREOF, each of the Company and Triton has caused this
Agreement to be executed by a duly authorized officer, and Executive has
hereunto set his hand as of the day and year first above written.
COMPANY:
TRITON MANAGEMENT COMPANY, INC.
By: /s/ Steven R. Skinner
------------------------------------------
Steven R. Skinner, President
TRITON:
TRITON PCS HOLDINGS, INC.
By: /s/ Steven R. Skinner
------------------------------------------
Steven R. Skinner, President
EXECUTIVE:
/s/ David Standig
------------------------------------------
David Standig
2
<PAGE>
EXHIBIT 10.34.1
AMENDMENT NO.1 TO LETTER AGREEMENT
----------------------------------
AMENDMENT NO.1 TO LETTER AGREEMENT ("Agreement"), dated as of
June 29,1998, by and among TRITON MANAGEMENT COMPANY, INC., a Delaware
corporation (the "Company"), TRITON PCS HOLDINGS, INC., a Delaware corporation
formerly known as Triton PCS, Inc. ("Triton"), and MICHAEL MEARS ("Executive").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Executive is the record and beneficial owner of 1,962.37
shares (the "Original Shares") of Triton's common stock, par value $.01 per
share (the "Common Stock"); and
WHEREAS, the Company, Triton and Executive are parties to that certain
Letter Agreement dated as of February 4, 1998 (the "Letter Agreement") providing
for, among other things, certain rights and obligations of the parties
respecting the Original Shares; and
WHEREAS, on the date hereof Triton has entered into a certain
Preferred Stock Purchase Agreement dated as of the date hereof (the "Purchase
Agreement") among Triton, the Cash Equity Investors, the Management Stockholders
and the Independent Directors party thereto (as each such term is defined in the
Purchase Agreement); and
WHEREAS, in connection with the Myrtle Beach Closing (as defined in
the Purchase Agreement), Executive was awarded on the date hereof an additional
388.89 shares of Common Stock (the "Myrtle Beach Shares"), and Executive is
scheduled to receive additional shares of Common Stock in connection with the
consummation of certain other transactions contemplated by the Purchase
Agreement; and
WHEREAS, the parties desire to amend the Letter Agreement to reflect
the issuance and potential future issuances of shares of Common Stock to
Executive pursuant to the Purchase Agreement;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the Company, Triton and Executive, intending to be legally bound,
hereby agree as follows:
1. Amendment to Definition. From and after the date hereof, all
-----------------------
references to the term "Shares", as that term is defined in the Letter
Agreement, shall include the Original Shares, the Myrtle Beach Shares, and any
other shares of Common Stock that are awarded to Executive pursuant to the
Purchase Agreement.
<PAGE>
2. No Further Changes. Except for such amendment, all other terms and
------------------
conditions of the Letter Agreement shall remain the same and continue in full
force and effect, and the Letter Agreement, as amended hereby, shall constitute
the legally valid and binding obligation of the parties hereto enforceable in
accordance with its terms.
IN WITNESS WHEREOF, each of the Company and Triton has caused this
Agreement to be executed by a duly authorized officer, and Executive has
hereunto set his hand as of the day and year first above written.
COMPANY:
TRITON MANAGEMENT COMPANY, INC.
By: /s/ Steven R. Skinner
---------------------------------------
Steven R. Skinner, President
TRITON:
TRITON PCS HOLDINGS, INC.
By: /s/ Steven R. Skinner
---------------------------------------
Steven R. Skinner, President
EXECUTIVE:
/s/ Michael Mears
---------------------------------------
Michael Mears
-2-
<PAGE>
EXHIBIT 10.35.1
AMENDMENT NO.1 TO LETTER AGREEMENT
----------------------------------
AMENDMENT NO.1 TO LETTER AGREEMENT ("Agreement"), dated as of
June 29,1998, by and among TRITON MANAGEMENT COMPANY, INC., a Delaware
corporation (the "Company"), TRITON PCS HOLDINGS, INC., a Delaware corporation
formerly known as Triton PCS, Inc. ("Triton"), and PATRICIA GALLAGHER
("Executive").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Executive is the record and beneficial owner of 2,943.56
shares (the "Original Shares") of Triton's common stock, par value $.01 per
share (the "Common Stock"); and
WHEREAS, the Company, Triton and Executive are parties to that certain
Letter Agreement dated as of February 4, 1998 (the "Letter Agreement") providing
for, among other things, certain rights and obligations of the parties
respecting the Original Shares; and
WHEREAS, on the date hereof Triton has entered into a certain
Preferred Stock Purchase Agreement dated as of the date hereof (the "Purchase
Agreement") among Triton, the Cash Equity Investors, the Management Stockholders
and the Independent Directors party thereto (as each such term is defined in the
Purchase Agreement); and
WHEREAS, in connection with the Myrtle Beach Closing (as defined in
the Purchase Agreement), Executive was awarded on the date hereof an additional
583.33 shares of Common Stock (the "Myrtle Beach Shares"), and Executive is
scheduled to receive additional shares of Common Stock in connection with the
consummation of certain other transactions contemplated by the Purchase
Agreement; and
WHEREAS, the parties desire to amend the Letter Agreement to reflect
the issuance and potential future issuances of shares of Common Stock to
Executive pursuant to the Purchase Agreement;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the Company, Triton and Executive, intending to be legally bound,
hereby agree as follows:
1. Amendment to Definition. From and after the date hereof, all
-----------------------
references to the term "Shares", as that term is defined in the Letter
Agreement, shall include the Original Shares, the Myrtle Beach Shares, and any
other shares of Common Stock that are awarded to Executive pursuant to the
Purchase Agreement.
<PAGE>
2. No Further Changes. Except for such amendment, all other terms and
------------------
conditions of the Letter Agreement shall remain the same and continue in full
force and effect, and the Letter Agreement, as amended hereby, shall constitute
the legally valid and binding obligation of the parties hereto enforceable in
accordance with its terms.
IN WITNESS WHEREOF, each of the Company and Triton has caused this
Agreement to be executed by a duly authorized officer, and Executive has
hereunto set his hand as of the day and year first above written.
COMPANY:
TRITON MANAGEMENT COMPANY, INC.
By: /s/ Steven R. Skinner
--------------------------------------
Steven R. Skinner, President
TRITON:
TRITON PCS HOLDINGS, INC.
By: /s/ Steven R. Skinner
--------------------------------------
Steven R. Skinner, President
EXECUTIVE:
/s/ Patricia Gallagher
--------------------------------------
Patricia Gallagher
-2-
<PAGE>
EXHIBIT 10.36
SHARED COMMUNICATIONS FACILITIES MASTER AGREEMENT
This Shared Communications Facilities Master Agreement (the " Master
Agreement") made this 3rd day of June 1998, by and between THE COMMONWEALTH OF
VIRGINIA DEPARTMENT OF TRANSPORTATION herein called "VDOT" and TRITON PCS
PROPERTY COMPANY L.L.C, a Delaware corporation, herein called "Triton".
WITNESSETH:
That in consideration of the promises and covenants herein expressed,
VDOT and Triton upon the terms and conditions set forth hereafter, agree to the
installation, operation and maintenance of a tower and communications equipment
to be erected and/or installed on selected portions of those VDOT right-of-ways
described on Exhibit A attached hereto (the "Sites"). The sites shall be chosen
by Triton from time to time, with VDOT approval, during the term of this
Agreement. Each of the Sites so selected and approved is referred to herein as
the "Property".
1. VDOT hereby grants to Triton the right to install, operate and
maintain communications equipment on the Property described on each Exhibit A to
this Master Agreement, and to erect, maintain and repair a tower on the Property
not to exceed Sixty (60) meters in height. All communications equipment, tower,
ground shelter, wires, cable conduits, pipes and utility service required
therefor shall be installed to meet the minimum building requirements of the
appropriate governmental authority at each location incorporated to this Master
Agreement and attached as Exhibit B herein called "the Plan". Each tower erected
by Triton pursuant to the approved plan shall be owned and controlled by VDOT.
The communications equipment placed on each tower or on or in any ground shelter
constructed by
- --------------------------------------------------------------------------------
Confidential treatment has been requested for portions of this exhibit.
The copy filed herewith omits the information subject to the confidentiality
request. Omissions are designated as *****. A complete version of this exhibit
has been filed separately with the Securities and Exchange Commission.
<PAGE>
Triton pursuant to the approved plans, shall be the property of Triton.
Equipment related to traffic control devices provided by VDOT or on behalf of
VDOT by Triton shall be the property of VDOT. All other equipment located on a
tower by a co locator shall remain the property of the owner of such equipment.
Triton shall commence construction of each tower facility and any communications
equipment on or before thirty (30) days subsequent to the Commencement Date, as
hereafter defined, and shall diligently pursue the completion of the
construction. A copy of "as built" plans shall be supplied to the appropriate
District Traffic Engineer or District Traffic Manager by Triton prior to the
site security or performance bond release by VDOT.
2. This Agreement is contingent upon Triton being able to satisfy or
waive satisfaction of the following conditions prior to Commencement Date with
respect to each specific site:
(a) Triton obtaining, all certificates, permits, licenses and
other approvals that may be required by any federal, state or local authorities
to permit Triton's obligations and benefits under this Agreement. VDOT will
cooperate with Triton in its efforts to obtain such approvals.
(b) Triton determining, in their sole discretion, that telephone
and electrical utilities are available to the Property and reasonable access
exists to and from the Property.
(c) Triton determining in their sole discretion that the
Property is free of all hazardous substances.
2
<PAGE>
If any one of the conditions set forth above are not satisfied or
waived as of the Commencement Date, Triton shall have the right to terminate
this Agreement with respect to a specific Property by giving VDOT written notice
thereof.
Provided Triton has satisfied or waived the contingencies set forth
above, VDOT and Triton shall then enter into a letter agreement for the specific
Property incorporating the terms hereof and including any other terms relating
specifically to the selected Property (the "Site Agreements"). The initial term,
as defined below, of each Site Agreement shall commence on the date being the
later of (i) ninety (90) days after the date Triton executes the Site Agreement
(ii) the date Triton notifies VDOT that the aforementioned contingencies have
been satisfied or (iii) the date construction commences; such date shall be "the
Commencement Date"; provided, however, that the initial term shall commence no
later than 180 days after the date Triton executes the Site Agreement unless
otherwise agreed upon in writing by VDOT and Triton.
The duration of this Agreement shall consist of the term of each Site
Agreement, the initial term of which shall be five (5) years ("Initial Term")
commencing on the Commencement Date and ending five (5) years thereafter. Each
Site Agreement shall be automatically renewed without need of any further
documentation for four (4) successive additional five-year terms unless Triton
provides VDOT with notice of its intention not to renew at least ninety (90)
days prior to the ending of each of the five-year terms.
3. Triton shall, during the period of construction, and upon
completion, provide VDOT with copies of all contracts, invoices and other
detailed information related to
3
<PAGE>
the direct construction cost for the work performed by Triton pursuant to
paragraph 1 above. The costs included in the foregoing shall include the actual
cost of the equipment, materials, labor, engineering, survey, foundation
investigation related to the tower, and any traffic control device and equipment
provided for VDOT's exclusive use by Triton in performing its obligations in
accordance with this Agreement and may include any costs for the construction of
an entrance or access road to the property (the "Construction Cost").
Construction Costs shall not include any amount such as profits or sums in
excess of the amounts expended by Triton pursuant to the foregoing.
4. (a) The monthly amounts paid by Triton to VDOT for the rights
granted herein during the initial term of each Site Agreement shall be *****
and shall be paid to VDOT at the address herein indicated for notices. The first
month's amount shall be paid on the commencement date, and on the first day of
the appropriate calendar month thereafter, in advance, without notice, demand or
deduction. Amounts to be paid by Triton shall be prorated for any partial month
at the beginning or end of the term of each Site Agreement. Payment should be
made only by check or money order and shall be drawn payable to the "Treasurer
of Virginia" or in the alternative, with the approval of VDOT, payable by Triton
in the form of direct deposit.
(b) Provided the term of each Site Agreement is extended
pursuant to paragraph 2, the amount paid by Triton to VDOT shall be *****.
- --------------------------------------------------------------------------------
***** Certain information on this page has been omitted and filed
separately with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted portions.
4
<PAGE>
(c) If any installment is not received by VDOT within fifteen
(15) days from the due date, Triton covenants and agrees to pay as an additional
amount a sum equal to ***** of each installment. Triton further agrees to pay
VDOT the actual cost or loss it suffers from each check of Triton returned by
the bank for insufficient funds for any reason. Also, Triton shall reimburse
VDOT for all costs (including, but not limited to, the cost of serving legal
notice, court costs and reasonable attorney's fees) allowed by law incurred in
collecting overdue obligations of Triton.
5. Triton has paid, or before construction of the Tower and other
structures agrees to pay or provide a performance bond in the sum of *****
per site as security for the faithful performance by Triton of the obligations
hereunder. In event of any breach or failure of Triton hereunder, VDOT shall
have the right to use and apply said security or performance bond in the manner
permitted by law. After official notification of completion in accordance with
paragraph 22, VDOT's representative shall make a final inspection of the
installation within ten (10) days. If Triton has faithfully performed their
obligations hereunder, VDOT shall, within thirty (30) days after receipt of
written notification of Triton in accordance with paragraph 22, return the
amount of the security or release of the performance bond to Triton.
6. Triton shall be entitled to a credit towards the amount due VDOT
equal to the lesser of the ***** plus. Triton
- --------------------------------------------------------------------------------
***** Certain information on this page has been omitted and filed
separately with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted portions.
5
<PAGE>
shall not be required to pay any sums until the credit amount has been reduced
to zero. Thereafter, payment shall commence and continue through the term of
each Site Agreement. All payments shall indicate the site specific lease number
as designated by VDOT.
7. Triton further agrees to attach and install any traffic control
devices provided by or on behalf of VDOT at the time of the initial installation
and as designated on the site specific plan attached to an exhibit to this
Master Agreement. Unless otherwise shown on Exhibit B, the attachment space
shall begin at an elevation of 15 meters above the existing ground and continue
to 18 meters. Triton agrees to maintain the integrity of the attachment, any
wires, cables and conduits leading thereto for the duration of this Agreement.
VDOT shall be responsible for the maintenance of any traffic control devices
attached to said tower structure.
8. Notwithstanding any other provisions contained in or incorporated
by reference into this Agreement, each Site Agreement may be terminated by VDOT
at the end of any calendar month upon one hundred eighty (180) days prior
written notice to Triton whenever it is determined either by VDOT's Commonwealth
Transportation Commissioner or by the Director of Right of Way and Utilities
that termination is required for the use of the Property in, or in conjunction
with, any of the state highway systems or for, or in conjunction with, the
construction of any new transportation facility. In the event of such
termination of any Site Agreement, VDOT agrees to provide the following benefits
to Triton depending upon the period that the Site Agreement has been in
existence:
(a) for the first three years from the Commencement Date, VDOT
shall reimburse Triton for any actual costs to relocate Triton's communications
equipment,
6
<PAGE>
building and other facilities to a new site. VDOT shall make every effort to
provide a replacement site within a right of way but provides no guarantee with
regard to a replacement site. The reimbursement of actual costs for the
relocation to Triton shall be based on 23 CFR, (S) 645.117.
(b) from the beginning of the fourth year to the end of the
sixth year from the commencement date, VDOT shall reimburse Triton for fifty
percent (50%) of the actual cost to relocate Triton's communications equipment,
building and other facilities to a new site. VDOT will make every effort to
provide a replacement site within its right of way but provides no guarantee
with regard to the replacement site. The reimbursement of actual costs for the
relocation to Triton shall be based on 23 CFR, (S) 645.117.
(c) in the event of an automatic renewal, from the seventh
through the twenty-fifth year, no reimbursement shall be made in the event VDOT
determines in accordance with the above to terminate this agreement. In any
event, VDOT will make every effort to provide a replacement site within its
right of way, but provides no guarantee with regard to a replacement site.
9. Except for the provisions set forth in Section 8 (a), (b) and
(c), further, regardless of the reason for any termination of a Site Agreement
by VDOT, including the need to use the Property for purposes relating to the use
in or construction of any part of any state highway or road system, Triton shall
not be entitled to any relocation assistance or payment for relocation expenses,
moving expenses, or losses, or other relocation benefits of any type, including
those provided under Chapter 6, Title 25 of the Code of Virginia, which is known
as
7
<PAGE>
the "Uniform Relocation Assistance and Real Property Acquisition Policies Act of
1972" (Virginia Code Section 25-325, et seq.), or any other state or federal law
------
or regulation. Triton hereby waives any rights, under any state or federal laws
or regulations, to receive relocation assistance or payment for relocation
expenses or losses of any type or kind as a result of termination of a Site
Agreement.
10. The tower and communication equipment shall be used by Triton in
connection with the business of operating communications systems licensed by the
Federal Communication Commission (FCC) only.
11. Triton shall have access to the Property, subject to VDOT's
direction, for the purpose of performing necessary engineering, survey,
inspections and reasonably necessary tests related to Triton's proposed use of
the Property for the construction of the Tower and other structures and
equipment. Triton shall fully restore to its prior condition any portion of the
Property disturbed by Triton. Triton covenants that it has thoroughly examined
and knows the condition of the Property upon which the Tower and other equipment
will be constructed, and that no representation as to the condition, by or on
behalf of VDOT has been made prior to or at the execution of this Agreement; and
that Triton will keep and maintain the Tower and structures and equipment
thereon, including any entrances and driveways provided to Triton for access in
clean and safe condition and will repair, at their own expense, during the
period Triton has communications equipment on the Property, any and all damage.
VDOT shall allow reasonable access (not to interfere with the operation and
maintenance of the roadway) to the Tower and any structures and equipment to be
constructed, operated and maintained by Triton.
8
<PAGE>
12. Triton shall install and operate the communications equipment and
erect and maintain the tower structure in a manner that shall comply with all
federal, state and local regulations governing the installation and operation
thereof. Triton shall provide VDOT with a certification that the structural
capability of the Tower structure has been analyzed and that the Tower structure
and equipment attached thereto meet all established criteria.
13. Triton, prior to performing any routine inspection or maintenance
of the facilities installed under this Agreement, shall provide to VDOT's
Resident Engineer a schedule outlining their plan, date and time for performing
such work. Any such work activities determined by VDOT to have an effect on
vehicular traffic shall be subject to the approval of VDOT. In any case, where
the maintenance or inspection work requires access from a limited access
facility, prior approval of VDOT shall be required. VDOT, in addition to
approving the methods and time that the work can be performed, also shall be
provided with notification, by telephone to VDOT's Resident Engineer,
immediately before the actual commencement of the work.
14. Triton covenants for itself, its successors and assigns and any
of its employees, agents or independent contractors, that at no time during the
term of this Agreement will they manufacture, process, distribute, use, treat,
store, dispose, transport, or handle, or emit, discharge, release or threaten
release into the environment, from, on or about the Property, any pollutant,
contaminant, hazardous or toxic substance (including petroleum), as defined or
provided by federal or state law, or permit or allow the same by others on the
Property. Triton will be liable for any damages, losses, obligations, claims,
actions, or causes of action arising due
9
<PAGE>
to the violation of this provision or of any violation by Triton of any federal
or Virginia environmental laws, as they currently exist or as they may be
amended from time to time, and agrees to hold VDOT harmless from any liability
resulting from violations of this provision, including any claim brought for on-
site or off-site contamination or pollution.
15. Any communications equipment, wires, cables, conduits or pipes
(excluding the Tower) installed by Triton for Triton's exclusive use shall
remain the property of Triton and VDOT waives any lien rights it may have
concerning the communications equipment, wires, cables, conduit or pipes. Any
traffic control device or other equipment erected or installed by Triton or by
VDOT, for VDOT's exclusive use shall remain the property of VDOT (as well as the
Tower) and Triton waives any lien rights it may have concerning VDOT's equipment
and the Tower. Triton shall remove all of its communications equipment at their
sole expense on or before the expiration date or earlier termination of each
Site Agreement and shall make any necessary repairs to the Property to return it
to its pre-Agreement condition.
16. Should VDOT at any time during a Site Agreement term, decide to
sell or lease the transportation facility, including any part of the Property
covered by this Agreement, any such transaction shall be subject to this
Agreement and Triton's rights hereunder.
17. Triton shall provide and maintain for the duration of this
Agreement at its sole cost a public liability insurance policy with a combined
single limit of $2,000,000.00 for bodily injury or property damage. Triton shall
furnish a certificate of insurance to VDOT prior to the commencement of each
Site Agreement. VDOT shall be provided with all renewals, termination or
cancellation notices of such insurance for the duration of this Agreement.
10
<PAGE>
18. The rights of Triton to locate its communications equipment or
any structure on the Property is conditioned upon that equipment and structure
not interfering with the operation of VDOT facilities on or in proximity to the
Property. If Triton causes any such interference, Triton shall, at its own
expense, provide and install any filters, isolators and other equipment
necessary to eliminate such interference or if the interference cannot be
eliminated within a reasonable period of time, then VDOT may terminate the Site
Agreement or such portion thereof that may be necessary to eliminate the
interference. Except for the foregoing, Triton is granted a priority
interference status as it relates to any other third party that is allowed to
locate on the Property or the tower subsequent to the date of the execution of
this Agreement. Triton shall provide VDOT with Triton's range of broadcast
frequency, power ratings and equipment specifications to assist VDOT in
accomplishing the foregoing grant of priority status. Additionally, any
structural upgrading required in the future in order to allow for the
installation of any other antenna, radio or other devices on the tower, shall be
the responsibility of the initiating party and shall be done in a manner to
comply with the then current building standards.
19. The initial tower structure shall be designed to accommodate a
minimum of two separate antenna arrays near the top of the structure and VDOT's
Traffic Management Facility shown on the Plan at the elevation as provided for
in accordance with Section 7 hereof. As a primary locator on the tower with
responsibility of property and tower maintenance, Triton shall have the right to
approve, which approval shall not be unreasonably withheld, any additional third
party use of the tower structure or property. VDOT agrees that it will not
solicit any proposals for a third party use of the secondary attachment space
for a period of 180 days after the execution of each Site Agreement. All
attachments to the structure by a party other than
11
<PAGE>
Triton shall be subject to that party entering into an agreement with VDOT under
similar terms and conditions as outlined in this agreement and shall be subject
to the then applicable monetary amount being paid by Triton for the rights
granted herein or on a prorated basis thereof for any other type of attachment.
Should VDOT sublease a portion of the Property to another carrier (the "Second
Carrier"), VDOT shall receive and be entitled to retain all rent paid by the
Second Carrier. Should VDOT sublease a portion of the Property to a third
carrier (the "Third Carrier"), VDOT shall receive for the account of Triton all
rents paid by the Third Carrier and credit Triton rent account in such amount
within thirty (30) days of receipt by VDOT.
20. Triton shall not create, place or suffer the creation or filing
of any mechanic's or materialman's lien against a Property by reason of labor
work or materials provided for or at the request or order of Triton, or of
Triton's agents or contractors. Triton shall discharge any such lien within
thirty (30) days after the same was filed.
21. This Agreement shall be governed by and construed according to
the laws of Virginia. It is agreed that any action at law or suit in equity
involving this Agreement, or any dispute hereunder between the parties, shall be
instituted and maintained only in the State courts of the Commonwealth of
Virginia.
22. That any and all notices that may be required or permitted under
this Agreement shall be given by mailing such notice by certified U.S. mail,
postage prepaid, return receipt requested, or sent via overnight courier
providing proof of service, addressed to the following:
12
<PAGE>
If to VDOT: Virginia Department of Transportation
1401 East Broad Street
Richmond, VA 23219
Attention: R. Wayne Brooks,
State Utilities Engineer
If to Triton: Triton PCS Property Company L.L.C.
9211 Arboretum Parkway
Suite 200
Richmond, Virginia 23236
Attention: Director of Engineering and
Operation
With a copy to: Triton Management Company, Inc.
101 Lindenwood Drive
Suite 125
Malvern, PA 19355
Attention: President
23. Triton for itself, its successors in interest and assigns, as a
part of the consideration hereof, does hereby covenant and agree that (1) no
person, on the ground of race, color, sex or national origin, shall be excluded
by Triton from participation in, be denied the benefits of, or be otherwise
subjected to discrimination in the use of each Property, including under any
assignment of the use of Triton's communications equipment and structures; (2)
that in connection with Triton's construction or making of any improvements on
each Property, Triton's making of repairs to the tower, structures or equipment,
and in Triton's obtaining or furnishing of services thereon, no discrimination
shall be practiced in the selection of employees and contractors, or by Triton's
contractors in the selection and retention of first-tier subcontractors; and (3)
that Triton shall not suffer or permit the violation of any federal or Virginia
civil rights laws pertaining to the use of the Property or access thereto. That
in the event of breach of any of the above nondiscrimination covenants, VDOT
shall have the right to terminate this Agreement and to enter and possess each
Property tower and other structures and
13
<PAGE>
improvements thereon (except Triton's communications equipment) and hold the
same as if this Agreement had never been made or issued.
24. If Triton violates any of the provisions of this Agreement or if
any bankruptcy or insolvency proceedings are filed by or against any person who
is Triton (or a receiver or trustee is appointed for their property), Triton
shall be deemed in default under this Agreement, and VDOT shall be entitled to
avail themselves of all rights and remedies to which it may be entitled, either
at law or in equity, and upon default, VDOT shall have the immediate right to
terminate this Agreement and take possession, and also VDOT shall be entitled to
recover reasonable attorney's fees and costs as allowed by law, VDOT's waiver of
any default by Triton shall not be considered to be a waiver of any subsequent
default, Triton waives the benefit of any exemptions under the homestead,
bankruptcy, and any other insolvency law as to their obligations in this
Agreement.
25. Nothing in this Agreement shall be deemed in any manner to be a
waiver of the sovereign immunity of VDOT. Further, VDOT shall not be liable to
Triton or to any other person resulting from any latent or patent defect in said
Property, nor for any damages arising from any act or neglect of any other
occupant of the same property or of adjacent or contiguous property, except as
may be specifically authorized and provided by law. All Triton personal property
placed on the Property shall be at the sole risk of Triton, and VDOT shall not
be liable for the loss, destruction, theft of or damage to such personal
property. VDOT shall have no liability for consequential damage that may result
from physical damage to the communications equipment installed pursuant to this
Agreement, nor for any other purpose whatsoever. All
14
<PAGE>
VDOT personal property placed on the Property shall be at the sole risk of VDOT,
and Triton shall not be liable for the loss, destruction, theft of or damage to
such personal property.
26. Triton may, upon notice, assign or transfer its rights and
obligations arising under this Agreement to any corporation, partnership, or
other entity that shall merge or consolidate with or into Triton or shall
succeed to all or substantially all of the assets, property and business of
Triton or shall succeed to all or substantially all of Triton's Norfolk,
Richmond M.T.A. as defined by the Federal Communications Commission.
This Agreement is the entire agreement between the parties, and no
modification or addition to it shall be binding unless in writing and signed by
the parties hereto. The covenants, conditions and agreements contained herein
are binding upon, and shall inure to the benefit of, the parties hereto and
their respective successors and assigns. Wherever the context so requires, the
singular number shall include the plural, the plural the singular, and the use
of any gender shall include all other genders.
WITNESS the following signatures and seals:
TRITON PCS PROPERTY COMPANY L.L.C
By: TRITON MANAGEMENT COMPANY, INC.,
Its manager
By:
________________________________________
Title:__________________________________
COMMONWEALTH OF VIRGINIA
DEPARTMENT OF TRANSPORTATION
By: ____________________________________
Title:__________________________________
15
<PAGE>
EXHIBIT 10.37
MULTIPLE SITE TOWER ATTACHMENT LEASE AGREEMENT
----------------------------------------------
THIS MULTIPLE SITE TOWER ATTACHMENT LEASE AGREEMENT (the Multiple Site
Lease) is made this day of June 1, 1998, by and between 360" COMMUNICATIONS
COMPANY (ON BEHALF OF ITSELF AND OF THOSE SUBSIDIARIES OR AFFILIATES NOW IN
EXISTENCE OR TO BE FORMED HEREAFTER EXECUTING ANY ADDENDUM HERETO, AND THEIR
SUCCESSORS AND ASSIGNS), whose address is 360' Communications Company, 8725
Higgins Road, Chicago, IL 60631-2702 (Lessor), and TRITON PCS PROPERTY COMPANY,
LLC (ON BEHALF OF ITSELF AND OF ITS SUBSIDIARIES OR AFFILIATES NOW IN EXISTENCE
OR TO BE FORMED HEREAFTER EXECUTING ANY ADDENDUM HERETO, AND THEIR SUCCESSORS
AND ASSIGNS), whose address is 9211 Arboretum Parkway, Suite 200, Richmond, VA
23236 (Lessee).
WHEREAS, Lessor owns towers, and owns or leases ground space at the
base of such towers;
WHEREAS, Lessee desires to lease tower space on certain of Lessor's
towers for the installation, maintenance, operation and replacement of Lessee's
Facilities (as defined below); and
WHEREAS, the parties desire to enter into this Lease (as defined
below) to define their general rights and responsibilities with respect to the
leased space on each tower, and desire to execute an Addendum (as defined below)
for each specific Site (as defined below);
NOW, THEREFORE, for valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the parties agree this Lease (as defined
below) shall define their rights and responsibilities for each Site (as defined
below) as follows:
AGREEMENT
---------
1. TERMS AND DEFINITIONS. For purposes of this Lease, the following
---------------------
terms shall have the following definitions and meanings
(capitalized terms are defined in alphabetical order):
(a) Addendum. The document, a form of which is attached
--------
hereto as Exhibit A, which, when completed and executed by the
parties, will, together with this Multiple Site Lease, constitute
the entire Lease for a Site.
(b) As Built Survey. A survey completed after the
----------------
construction of Lessee's Facilities locating the Premises to a
monument or the Tower.
(c) Base Rent. The annual rent amount paid by Lessee to
----------
Lessor for a Site, as further described in the applicable
Addendum.
(d) Execution Date. The date on which a specific Addendum
--------------
is fully executed.
(e) Facilities. A party's antenna arrays and related
-----------
equipment for its communications systems, including, without
limitation, antennas, microwave dishes, cables, wires, equipment
buildings and shelters, concrete pads, generators, accessories,
and all replacements, enhancements and modifications
- --------------------------------------------------------------------------------
Confidential treatment has been requested for portions of this exhibit.
The copy filed herewith omits the information subject to the confidentiality
request. Omissions are designated as *****. A complete version of this exhibit
has been filed separately with the Securities and Exchange Commission.
<PAGE>
thereto, as further described in the applicable Addendum. A
party's Facilities shall be the personal property and fixtures of
that party.
(f) FAA. Federal Aviation Administration.
----
(g) FCC. Federal Communications Commission.
----
(h) Ground Space. A parcel of land leased to Lessee at a
-------------
Site for the purpose of installing, maintaining, operating and
replacing its Facilities, as further described in the applicable
Addendum.
(i) Initial Term. The initial term as further described in
--------------
the applicable Addendum, subject to the earlier termination of
the Lease or the Multiple Site Lease, and the earlier termination
or expiration of any applicable Master Lease.
(j) Interference Contractor. An independent radio frequency
-------------------------
interference contractor appointed by Lessor and Lessee to
determine the cause of radio frequency interference affecting a
party's Facilities.
(k) Lease. For each Site, this Multiple Site Lease and the
-------
fully executed Addendum applicable to each Site.
(l) Lease Commencement Date. The date on which the Lease
-------------------------
commences with respect to an Addendum for a Site as further
described it the applicable Addendum.
(m) Lease Term. The Initial Term and all properly exercised
------------
Renewal Term(s), if any, of a specific Addendum, as further
described in the applicable Addendum.
(n) Master Landlord. If applicable, the person or entity
-----------------
from whom the Lessor leases the Property.
(o) Master Lease. If applicable, the lease agreement
--------------
between Lessor and Master Landlord with respect to the Property.
(p) Multiple Site Lease Commencement Date. The term
---------------------------------------
Multiple Site Lease Commencement Date shall have the meaning
given to it in Section 5 herein.
(q) Multiple Site Lease Term. The term Multiple Site Lease
--------------------------
Term shall have the meaning given to it in Section 5 herein.
(r) NEPA. National Environmental Policy Act, as codified in
------
the FCC's Rules at 47 C.F.R. (S) 1. 1301 et seq.
(s) Premises. The term Premises shall have the meaning
---------
given to it in Section 4 herein.
<PAGE>
(t) Prior Lessee. A third party who has installed or has
--------------
the right to install equipment on the Tower prior to the
installation of Lessee's Facilities on the Tower.
(u) Property. The parcel of land which Lessor owns or
--------
leases, as further described in the applicable Addendum, on which
a particular Site is located.
(v) Renewal Term. A rental term in addition to and
------------
subsequent to the Initial Term, as further described in the
applicable Addendum.
(w) Secured Party. A bona fide third-party financing
-------------
entity.
(x) Site. A specific Tower Space and Ground Space (if
------
applicable) leased by Lessor to Lessee, and the property
encumbered by easements granted by Lessor to Lessee, pursuant
to this Lease.
(y) Subsequent Lessee. A third party who installs or has
-------------------
the right to install equipment on the Tower after the
installation of Lessee's Facilities on the Tower.
(z) Tower. The tower owned by Lessor on which Lessee leases
-------
space to locate its Facilities, as further described in the
applicable Addendum.
(aa) Tower Space. Space on the Tower leased to Lessee for
-------------
the purpose of installing, maintaining, operating and replacing
Lessee's Facilities, as further described in the applicable
Addendum.
2. COLOCATION PROJECTS BY ADDENDUM. Lessee shall execute an Addendum
--------------------------------
in the form attached as Exhibit A for each Site Lessor and Lessee
agree upon for colocation. Upon execution of an Addendum, this
Multiple Site Lease and the Addendum together will constitute the
Lease governing the Site contemplated in the Addendum.
3. LEASE SUBJECT TO MASTER LEASE. This Lease is subject and
------------------------------
subordinate to any Master Lease, which, if it exists, is
incorporated herein by reference and attached to the applicable
addendum( Subject to withholding and redaction as required by
confidentiality and non-disclosure provisions in the Master
Lease).
4. LEASE. Lessor hereby leases to Lessee and Lessee hereby lease
-----
from Lessor the Following:
(a) Tower Space. Subject to the terms herein, Lessor hereby
------------
lease to Lessee, and Lessee hereby lease from Lessor Tower Space
on the Tower as set forth in the applicable Addendum; however,
Lessor retains the right to locate cables, lines, wires, and
other communication accessories within the Tower Space; and
<PAGE>
(b) Ground Space. Subject to the terms herein, Lessor
-------------
hereby leases to Lessee, and Lessee hereby leases from Lessor
Ground Space, if such Ground Space is provided for in the
applicable Addendum.
(c) Premises Defined The Tower Space and the Ground Space
----------------
(if any) leased by Lessor to Lessee is referred to collectively
herein as the "Premises." In the event Lessee does not lease
Ground Space from Lessor, only the Tower Space shall constitute
the Premises. The Premises are leased for the sole purpose of
installing, maintaining, operating, and replacing Lessee's
Facilities for its intended use.
5. TERM
----
(a) Multiple Site Lease Commencement Date and Term. The
-----------------------------------------------
Multiple Site Lease is fully executed. The multiple Site term
shall begin on the Multiple Site Lease Commencement date and end
after the expiration or termination of the last existing
Addendum.
(b) Lease Commencement Date and Initial Term The
----------------------------------------
Commencement Date and Initial Term of a particular Lease shall be
as set forth in the Addendum applicable to such Lease.
(c) Lease Renewal Terms. The Renewal Terms, if any, of a
--------------------
particular Lease shall be as set forth in the Addendum applicable
to such Lease. Lessee may renew a Lease pursuant to the terms of
the applicable addendum by giving written notice address shown
below six (6) months prior to the expiration date of the then
current term of the applicable Lease. Lessee shall not have the
option to renew a Lease if Lessee is, at the time of giving such
notice, or on the effective date of such Renewal Term, in default
of any provision or term of this Lease with respect to such
Addendum.
(d) Lease Term Subject to Master Lease Notwithstanding any
----------------------------------
provisions herein to the contrary, the term of each Lease shall
be subject to and co- terminus with the corresponding Master
Lease
(e) Termination. A Lease may be terminated as provided
-----------
herein, and shall automatically terminate upon the termination or
expiration of the corresponding Master Lease, if any.
6. INITIAL ATTACHMENT FEE AND BASE RENT.
------------------------------------
(a) Initial Attachment Fee. On the Lease Commencement Date,
----------------------
Lessee shall pay to Lessor the non-refundable initial attachment
fee as set forth in the applicable Addendum.
(b) Base Rent. During the Initial Term, Lessee shall pay to
---------
Lessor the Base Rent as set forth in the applicable Addendum.
(c) Rent Adjustments Beginning in the first year of each
----------------
Renewal Term, the then current Base Rent shall be adjusted by
multiplying it by the
<PAGE>
change in the Consumer Price Index (CPI) for the immediately
preceding term for which Base Rent has remained constant. For
purposes of calculation, the CPI used shall be the Consumer Price
Index-U.S. City Averages for Urban Wage Earners and Clerical
Workers, All Items (1982-84=100) published by the United States
Department of Labor, Bureau of Labor Statistics.
(d) Payment Address. All payments of Base Rent and/or other
---------------
charges hereunder shall be remitted to the address set forth in
the applicable Addendum (or such other addressees) as Lessor may
designate from time to time).
7. INSTALLATION OF FACILITIES. Lessee shall have the right, subject
--------------------------
to the requirements herein, and at Lessee's sole expense, to
install, maintain, operate and replace its Facilities on the
Premises.
(a) Master Landlord's Consent. In the event a Master Lease
-------------------------
exists, Lessee shall not commence construction until the required
consent and/or certification required pursuant to the Master
Lease has been obtained.
(b) Approvals and Permits. Lessee shall not commence
---------------------
construction until it has obtained all the necessary federal,
state and local approvals and permits, copies of which shall be
provided to Lessor at Lessor's request.
(c) Tower Analysis. Prior to any work on or attachment to
--------------
the Tower, Lessee shall submit to Lessor a completed Tower
analysis prepared by the Tower manufacturer or other firm
approved by Lessor:
(i) taking into account all of Lessee's Facilities
identified in the applicable Addendum, whether or not all
such Facilities will be installed initially, and
(ii) describing all installations, modifications,
replacements or relocations of all antennas, dishes, cables
or other equipment on the Tower. Upon Lessee's request,
Lessor shall provide information to Lessee regarding current
and proposed attachments on the Tower;
(iii) including information demonstrating continued
compliance with the Tower manufacturer's warranty
requirements, current EIA/TIA standards, other legal
requirements for the Tower, and any other information
reasonably requested by Lessor; and
(iv) certifying the proposed installation,
modification, or relocation will not exceed the load
capacity of the Tower.
(d) Plans and Specifications; Contractor Approval. Prior to
-----------------------------------------------
construction, Lessee shall submit to Lessor (i) the plans and
specifications, a detailed site plan and any other construction
documents setting forth the proposed construction, installation
and other work to be performed on the Premises and Property, and
(ii) the names of the proposed contractors and
<PAGE>
subcontractors performing any such construction, installation or
other work, all of which are subject to Lessor's approval prior
to construction.
(e) Separation Distance. Except as otherwise agreed by the
---------------------
parties hereto, Lessee's antennas or dishes shall be located no
less than twenty (20) feet from Lessor's or any other lessee's
antennas or dishes on the Tower, measured from both (i) the top
of Lessee's proposed antennas or dishes to the bottom of Lessor's
or any other lessee's antennas or dishes or (ii) the bottom of
Lessee's proposed antennas or dishes to the top of Lessor's or
any other lessee's antennas or dishes.
(f) Pre-Construction Meeting. Prior to commencing any
--------------------------
installation and/or construction, a duly authorized
representative of Lessee shall meet with a duly authorized
representative of Lessor at the Tower Site to mutually approve
the construction schedule, such approval not to be unreasonably
withheld or delayed by either party. Lessor and Lessee agree to
cooperate with one another in scheduling such pre-construction
meeting.
(g) Portal Drilling. If the Tower is a monopole, Lessee, at
-----------------
its sole cost, shall be responsible for installing any platforms
and cutting any portals required to accommodate Lessee's
Facilities; provided, however, Lessee shall not cut any portal in
the Tower if the cutting of such portal would adversely affect
Lessor's operations, any manufacturer's warranty, or the
integrity of the Tower.
(h) As-Built Drawings. Following the completion of any
------------------
installation, modification or relocation (other than a relocation
under Section 10), Lessee shall provide to Lessor, at Lessee's
expense, updated as-built drawings, initialed by Lessee,
documenting that all installed Facilities on the Premises and
Property conform to the plans and specifications, Site plan, and
other construction documents previously approved by Lessor. The
as-built drawings shall include an As-Built Survey. Upon receipt,
provided the As-Built Survey conforms to the plans and
specifications, Site plan and other construction documents
previously approved by Lessor, Lessor shall initial the As-Built
Survey, and the As-Built Survey will be Schedule 2 to the
applicable Addendum.
(i) Third-Party Inspection. Following the completion of any
------------------------
installation, modification or relocation but prior to the
activation of any Lessee Facilities affected thereby, Lessee, at
Lessee's expense, shall engage an approved, independent third-
party inspector to perform an inspection of the Tower and to
certify in writing to Lessor that all such work has been properly
performed and done in compliance with all applicable plans,
specifications, drawings and/or other requirements.
(j) Later Installation of Facilities. Lessee is not
----------------------------------
required to install all of its Facilities initially. Lessee's
later installation of additional antennas and cables which are
identified as part of the Facilities in the applicable Addendum
shall be treated as an initial installation, and Lessee shall not
be required to comply again with the provisions of Section 7(c)
(unless additional antennas and
<PAGE>
equipment have been attached to the Tower since the date of
Lessee's initial tower analysis), or Section 7(d) (unless a
contractor different from the one previously approved will
perform the work); provided, however, Lessee shall deliver to
Lessor a revised As-Built Survey to Lessor, and comply with the
other provisions of this Section 7.
8. TOWER MODIFICATION OR REPLACEMENT. If the parties so agree
----------------------------------
pursuant to a separate agreement prepared by Lessor, Lessee
may, at its sole cost, structurally enhance or replace the
Tower to accommodate Lessee's proposed Facilities; provided,
however, such enhancement or replacement must comply with all
applicable laws, regulations and requirements of any federal,
state or local authority, and must not interfere with the
operation of Lessor's or other lessees' Facilities located on
the Tower and/or Property. Lessee shall pay all costs incurred
by Lessor and other lessees on the Tower to relocate their
Facilities on the enhanced or new tower. Upon completion of
and payment by Lessee for the structural enhancements or new
Tower, such structural enhancements and/or new Tower shall be
Lessor's property, and Lessee hereby conveys, transfers and
assigns to Lessor such enhancements and/or new Tower free of
all liens and encumbrances except for the rights of Lessee and
other lessees to locate on the Tower. Lessee's replacement or
modification of the Tower shall comply with the provisions of
Section 7.
9. TOWER COMPLIANCE.
----------------
(a) Lessor's Representations and Duties. Lessor represents
-------------------------------------
and warrants that the Tower, its lighting system and markings are
in compliance with all relevant and material government
regulations, including all applicable FCC and FAA rules and
regulations. Lessor shall maintain, repair and operate, at its
sole cost and expense, the Tower and its Facilities in compliance
with such government regulations.
(b) Lessee's Right to Monitor and Assess Condition of
-------------------------------------------------
Tower . Lessor consents to Lessee's installation, at Lessee's
------
sole cost, of equipment required to monitor the Tower for
compliance with government regulations, provided such equipment
does not interfere with the operation of Lessor's Facilities or
those of another lessee. Lessor further agrees to permit Lessee,
at Lessee's sole cost, to assess the condition of the Tower
annually, including, but not limited to, its structural integrity
and compliance with all applicable governmental regulations.
<PAGE>
10. FACILITIES RELOCATION AND MODIFICATION. Lessor may require the
--------------------------------------
relocation of Lessee's Facilities to a different space on the
Tower and/or Property to accommodate the installation,
replacement, modification and enhancement of Lessor's
Facilities, but not those of a Subsequent Lessee. Within one
hundred and eighty (180) days of receiving notice from Lessor,
Lessee shall relocate its Facilities, at Lessor's expense, to
the new space on the Tower and/or Property designated by Lessor;
provided, however, that Lessor shall use good faith efforts to
relocate Lessee's Facilities to comparable space on the Tower
and/or Property and, if the relocated space is unacceptable to
Lessee in Lessee's reasonable discretion, Lessee may terminate
the applicable Addendum as provided in Section 27(f). In the
event that Lessor requires Lessee to relocate its Facilities
pursuant to this Section, Lessor agrees not to require Lessee to
relocate its Facilities again for a period of twelve (12) months
from the date the previous relocation was effected. Lessor shall
have no obligation hereunder to pay for any modification or
enhancement of Lessee's Facilities or the Tower, including,
without limitation, any rebuilds.
11. EASEMENTS.
----------
(a) Ingress and Egress: Advance Notice. Lessor hereby
----------------------------------
grants to Lessee during the Lease Term (i) the non-exclusive
right of ingress, egress, and access over the Property and the
Tower to the Tower Space as depicted in Schedule 3 of the
applicable Addendum; and (ii) if the Premises include the Ground
Space, a non-exclusive easement during the Lease Term for
ingress, egress and access to the Premises as depicted in
Schedule 1 of the applicable Addendum across (1) the Property;
(2) the property of the Master Landlord to the extent and in the
locations the Master Landlord granted ingress, egress and access
easements to Lessor in the Master Lease, so long as such rights
may be subleased or assigned by Lessor under the Master Lease,
and (3) the property of a third party to the extent and in the
locations the third party granted ingress, egress and access
easements to Lessor in a deed of easement, so long as such
rights may be subleased or assigned under such deed of easement.
Lessee or Lessee's qualified, insured contractors under Lessee's
direct supervision shall have access to the Premises and
Lessee's Facilities upon twenty-four (24) hours notice to
Lessor. The foregoing notwithstanding, Lessee shall have access
to the Premises and Lessee's Facilities immediately and without
notice in the event of an emergency, and Lessee shall notify
Lessor as soon thereafter as practicable of Lessee's access
during such emergency.
(b) Utilities, Cable Runs. Lessor hereby grants to Lessee
---------------------
the non-exclusive right during the Lease Term to place utilities
and cable runs to and on the Tower, at locations satisfactory to
Lessor, reasonably necessary to operate Lessee's Facilities. If
the Premises include the Ground Space, Lessor hereby grants to
Lessee a non-exclusive easement during the Lease Term to place
utilities or cable runs on or bring utilities reasonably
necessary to operate Lessee's Facilities across the (i)
Property; and (ii) the property of the Master Landlord to the
extent and in the locations the Master Landlord granted utility
and cable run easements to Lessor, so long as such rights may be
subleased or assigned; and (iii) the property of a third party
to the extent and in the locations
<PAGE>
the third party granted utility and cable run easements to
Lessor in a deed of easement, so long as such rights may be
subleased or assigned under such deed of easement. Lessee shall
pay the cost of all utility service necessary to install,
maintain and operate Lessee's Facilities. Where practicable,
Lessee shall install a separate meter for Lessee's use. Lessee
shall obtain and pay the cost of telephone connections.
Subject to the terms of the Master Lease and this Lease, Lessee has
the right, but not the obligation, to improve at its sole cost the easements
granted herein; provided, however, no improvements shall be made without
Lessor's prior written approval.
12. INSURANCE
---------
For each Site, Lessee shall maintain the following minimum
insurance coverages and limits (written by insurance companies
with a Best's rating of at least an "A-") to protect Lessee and
Lessor from any and all claims against Lessee and/or Lessor for
damages for personal injury, property damage or death which may
be sustained by Lessee, Lessor, their respective officers,
employees and agents, or by any third parties:
Worker's Compensation and Employer's Liability
(1) Coverage A -- Statutory Benefits. Statutory
coverage, including exempt employments.
(2) Coverage B -- Employer's Liability. Limits of
at least $500,000.
(3) Extensions of coverage. Proprietors, partners
and executive officers coverage.
Commercial General Liability.
----------------------------
(1) Extension of Coverage. Contractual liability
and punitive damages coverage.
(2) Minimum Limits.
$1,000,000 combined single limit each
occurrence of bodily injury and/or property
damage.
$2,000,000 general aggregate per Site
$2,000,000 products/completed operations
aggregate
Commercial Automobile Coverage.
(1) Extension of Coverage. Coverage for all owned,
hired and non-owned autos.
<PAGE>
(2) Minimum Limits. $ 1,000,000 combined single
limit each accident for bodily injury and/or
property damage.
(iv) Umbrella/Excess Liability.
-------------------------
(1) Coverage. Excess of employer's liability,
commercial general liability and commercial
automobile liability insurance policies,
including all extensions of coverage.
(2) Minimum Limits. $4,000,000 each occurrence.
The minimum amounts of insurance required in this Section may be
satisfied by Lessee purchasing primary coverage in the amounts specified or by
Lessee buying a separate umbrella and/or excess policy together with lower limit
primary underlying coverage.
(b) Any deductibles, self-insured retentions (SIR), loss
limits, retentions, etc., shall be the responsibility of
Lessee.
(c) Lessor, its directors, officers and employees shall
be named as additional insureds under all General Liability,
Automobile Liability and Umbrella/Excess Liability Policies
obtained by Lessee with respect to each Addendum. Such
additional insured endorsement shall cover Lessor for all
claims arising out of work or operations performed by or on
behalf of Lessee with respect to the applicable Addendum,
shall provide coverage regardless of whether a claim arises
out of the alleged negligence of Lessor, shall not exclude
liability for negligence of Lessor, and shall provide that
such additional insurance is primary insurance and shall not
contribute with any insurance or self-insurance that Lessor
has procured to protect itself. All of the insurance afforded
by Lessee shall be exhausted before Lessor becomes involved,
including Lessor's coverage as an additional insured under
Lessee's Umbrella/Excess Liability insurance policy(ies).
Lessor's insurance coverages shall be excess over any
insurance afforded by Lessee.
(d) Before entering any Site, Lessee agrees to submit to
Lessor's designated representative a certificate of insurance,
such certificate to be signed by a duly authorized officer or
agent of the insurer, certifying that the minimum insurance,
coverages and limits set forth in subsection (a) above are in
effect, that Lessee has complied with the provisions of
subsections (b) and (c) above, and that Lessor will receive at
least thirty (3 0) days' prior written notice of policy
cancellation or non-renewal. At least thirty (30) days prior
to the expiration of the policy, Lessor must be furnished
satisfactory evidence that such policy has been renewed or
replaced by another policy.
At Lessor's request, Lessee shall provide copies of the appropriate
insurance provisions or endorsements as evidence that the required insurance has
been procured, and that Lessor has been named as an additional insured. In no
event shall permitting Lessee to enter the Site be construed as a waiver of the
right of Lessor to assert a claim against Lessee for breach of the obligations
established herein.
<PAGE>
(e) Lessee shall require all of its agents and contractors to
comply with each of the provisions of this insurance Section. This
includes, but is not limited to, naming Lessor as an additional
insured under all liability insurance policies. Prior to Lessee's
agents and contractors entering any Site, Lessee shall require and
maintain certificates of insurance from each such agent or contractor
evidencing the required coverages. At Lessor's request, Lessee shall
timely supply to Lessor copies of such certificates of insurance.
13. SAFETY. Lessee, for itself and its agents and contractors, agrees to
-------
observe the highest safety standards at the Property, which standards
shall, at a minimum, meet the following guidelines:
(a) Lessee shall take necessary safety and other precautions to
protect property and persons from damage, injury or illness arising
out of Lessee's presence at the Site. Lessee shall comply strictly
with local, municipal, state and national laws, orders, and
regulations pertaining to health or safety which are applicable to
Lessee or to the Site, including without limitation the Occupational
Safety and Health Act of 1970 (84 U.S.C. Section 1590), as amended,
and any state plans approved thereunder, and regulations thereunder,
to the extent applicable, and Lessee warrants the materials, equipment
and facilities, whether temporary or permanent, used or furnished by
Lessee in connection with its presence on the Site shall comply
therewith. At all times Lessee shall be responsible for providing its
employees or agents on the Site with a safe place of employment;
(b) Accidents, injuries and illness requiring professional
medical attention, damage to Lessor's property and fires which occur
on the Property shall be orally reported to Lessor at the time of the
incident, with a written report following within forty-eight (48)
hours of the incident;
(c) When the possibility of injury to persons or damage to
property is ascertained, Lessee shall take immediate remedial action,
including the stoppage of work where necessary, to prevent such injury
or damage. If such possibility of injury or damage has been caused, or
is claimed to have been caused by Lessor or its employees, Lessee
shall give Lessor written notice thereof, and shall not resume work
until Lessor gives written permission to do so; and
(d) Lessee shall take particular care to avoid coming in contact
with, or causing damage to, any water, sewer, steam, gas, fuel, other
pipe lines, mains or service pipes, conduits, cables, wires, or
service connections, other private, utility, or governmental
facilities, and any hazardous condition or thing, whether they are
located upon, below, or above the ground surface. The costs of
repairing any such damage, if sustained, will be borne solely by
Lessee. Lessee shall take proper measures to determine the presence of
noxious, combustible, or explosive gases and to prevent all manner of
ignition in and around manholes, excavations, and other openings.
Lessee shall take all necessary and customary precautions to prevent
injury to persons or property from open manholes, excavations, ditches
created or caused by Lessee's activities on the Site, and from
materials or
<PAGE>
equipment left by Lessee on the Site, by placing signs and lights,
erecting barricades, or doing other things as prudence may require.
14. LESSEE'S COVENANTS. Lessee covenants, warrants and represents it has
-------------------
full authority to enter into, execute and perform this Lease.
In addition to Lessee's duties set forth herein, Lessee
further covenants that during the Lease Term:
(a) Damage. The installation, operation, modification,
-------
relocation and maintenance of its Facilities will in no way
damage the Tower, the Tower lighting system, Lessor's
Facilities, the Property, any other structure or accessories
thereto, any other lessee's equipment or facilities'. normal
wear and tear excepted, or interfere with the maintenance
thereof. If such damage, other than normal wear and tear
occurs, Lessee shall report such damage immediately (with
written notification within twenty-four (24) hours) to Lessor,
and shall be liable for the cost of repair for such damages;
(b) Radio Frequency Interference. The installation,
-----------------------------
operation, and maintenance of its Facilities will not
interfere with the radio frequency operation of Lessor's
Facilities or those of a Prior Lessee. In the event there is
such interference, Lessor and Lessee shall mutually appoint,
within two (2) business days of Lessee's receipt of notice of
such interference, an Interference Contractor to evaluate such
interference problems. If Lessor and Lessee cannot agree upon
an Interference Contractor within the two (2) business day
period, the Interference Contractor shall be Denny &
Associates, P.C., 1901 Pennsylvania Ave., N.W., Suite 402,
P.O. Box 19329 (20036-9329), Washington, D.C. 20006-3405. The
Interference Contractor shall determine the cause of such
interference within three (3) business days of being
appointed. In the event the Interference Contractor
determines, in its sole discretion, that Lessee's Facilities
are interfering with the operation of Lessor's or a Prior
Lessee's Facilities, Lessee shall (i) immediately take, at its
sole expense, all steps recommended by the Interference
Contractor necessary to eliminate the interference including,
if required, cutting off power to Lessee's objectionable
Facilities and (ii) pay the fees and expenses of the
Interference Contractor. If Lessee cannot immediately
eliminate the interference, Lessee will remove or cease
operation of its objectionable Facilities;
(c) Maintenance. Its Facilities will be maintained in a
------------
state of repair acceptable to Lessor in Lessor's reasonable
discretion;
(d) Identification. It will identify its Tower
---------------
Facilities with metal tags fastened securely to its bracket on
the Tower and to each transmission and receive cable line;
(e) Liens. Any lien for labor, materials or otherwise
------
will be discharged within thirty (30) days of filing of the
same; and
(f) Removal of Facilities. By the date of termination
----------------------
or expiration of the applicable Addendum it will remove its
Facilities, including permanent
<PAGE>
improvements such as foundations, footings, concrete, paving,
gravel, vegetation and utilities, and restore the Premises as
near as practicable to their original condition, unless
instructed otherwise in writing by Lessor; provided, however,
Lessee need not remove nor restore changes to the Premises not
caused by Lessee, its agents, employees, licensees or invitees,
or resulting from normal wear and tear. In the event Lessee has
not removed its Facilities by the time of expiration or
termination of the applicable Addendum: (i) Lessee shall pay rent
at the rate of two hundred percent (200%) the monthly rent in
effect on the date of such expiration or termination prorated to
the date Lessee's Facilities are removed and the Premises have
been restored to Lessor's reasonable satisfaction; and (ii)
Lessor shall have the right to remove and store Lessee's
Facilities, at Lessee's sole expense, and Lessee shall reimburse
Lessor for such expenses upon demand. If Lessor removes Lessee's
Facilities, Lessor shall not be responsible for any damage to
Lessee's Facilities caused during the removal and storage thereof
unless caused by Lessor's gross negligence.
15. LESSOR'S COVENANTS. Lessor covenants, warrants and represents
------------------
that it has full authority to enter into, execute and perform
this Lease. In addition to Lessor's duties set forth herein,
Lessor further covenants that during the Lease Term:
(a) Tower and Property Maintenance. It will adequately
--------------------------------
maintain the Tower, including, without limitation, the Tower's
structural integrity, lighting system and markings, and the
Property;
(b) Quiet Enjoyment. Upon Lessee's payment of rent and
-----------------
performance of its covenants, but subject to the terms of the
Master Lease and subject to any prior lien or encumbrance on the
Property, it will ensure Lessee's quiet use and enjoyment of the
Premises;
(c) Radio Frequency Interference. It will not permit a
------------------------------
Subsequent Lessee to interfere with the radio frequency operation
of Lessee's Facilities. In the event there is such interference,
Lessor shall ensure that the Subsequent Lessee immediately takes
all steps necessary to eliminate the interference including, if
required, cutting off power to the Subsequent Lessee's
objectionable Facilities. If the Subsequent Lessee cannot
immediately eliminate the interference, Lessor shall cause the
Subsequent Lessee to either remove or cease operation of its
Facilities.
Notwithstanding the foregoing, if the Subsequent Lessee is a
governmental entity, Lessor shall have the right to give the governmental entity
five (5) business days' notice prior to Lessor being required to take any
actions required under this Section. Lessor shall give such governmental entity
written notice of the interference within two (2) business days of Lessor's
receipt of the Interference Contractor's determination. Lessor's notice to the
governmental entity shall be deemed given on the day it is delivered by hand or
on the day it is deposited with an overnight courier or the United States mail;
and,
(d) Insurance. It will maintain in force during the Lease
Term a combined single limit policy of bodily injury and property
damage insurance,
<PAGE>
with a limit of not less than $5,000,000.00 insuring against
liability arising out of Lessor's use, occupancy, and maintenance
of the Tower, Property and its Facilities.
16. ENVIRONMENTAL MATTERS. Lessee represents and warrants that it
---------------------
will not cause or permit any solid or liquid waste which is
classified as toxic or hazardous under any federal, state or
local law or regulation in effect as of the Lease Commencement
Date, to be used, generated, stored or disposed of, in, on or
under, or transported to or from the Premises or to otherwise
contaminate the Premises, except where the use and storage of
such substances is in compliance with applicable law. Lessee
shall indemnify Lessor and its parent, subsidiary and affiliated
companies and their officers, agents and employees, and hold them
harmless from all claims, demands, causes, losses, damages and
expenses, including attorneys' fees, arising directly or
indirectly from a breach of this covenant.
Lessor represents and warrants that it will not cause or permit any
solid or liquid waste which is classified as toxic or hazardous under any
federal, state or local law or regulation in effect as of the Lease Commencement
Date, to be used, generated, stored, disposed of, in, on or under, or
transported to or from the Premises or to otherwise contaminate the Premises,
except where the use and storage of such substances is in compliance with
applicable law. Lessor further represents that there are no environmental
hazards caused by Lessor located on or under the Premises and agrees to hold
Lessee harmless from any and all environmental claims caused by Lessor asserted
against Lessee.
The covenants of this Section shall survive and be enforceable and
shall continue in full force and effect for the benefit of Lessor and its
subsequent transferees, successors and assigns and shall survive both the
expiration of the Multiple Site Lease Term or the expiration or earlier
termination of any applicable Addendum. In no event, however, shall Lessee be
liable to Lessor for lost profits, lost market share or other consequential
damages resulting from the breach of this Section.
17. NATIONAL ENVIRONMENTAL POLICY ACT COMPLIANCE. Lessor represents
--------------------------------------------
that the Tower and Property comply with the applicable provisions
of NEPA. Lessor acknowledges that it, and not the Lessee, shall
be responsible for compliance with applicable provisions of NEPA
with respect to the Tower and Property; provided, however, Lessee
shall be responsible for compliance with the applicable
provisions of NEPA with respect to Lessee's Facilities at the
Site. Prior to conducting any investigation, including, without
limitation, contacting any outside agency, or submitting any
filing relating to NEPA, Lessee shall obtain the written consent
of Lessor. Should Lessee be cited for noncompliance with NEPA and
fail to bring its Facilities into compliance in the time period
set forth in Section 25(a)(iii), Lessee shall be in default, and
all the rights and remedies set forth in Section 25(b) shall be
available to Lessor.
The covenants of this Section shall survive and be enforceable and
shall continue in full force and effect for the benefit of Lessor and its
subsequent transferees, successors and assigns and shall survive both the
expiration of the Multiple Site Lease Term or the expiration or earlier
termination of any applicable Addendum. In no event, however, shall Lessee be
liable to Lessor for lost profits, lost market share or other consequential
damages resulting from the breach of this Section.
<PAGE>
18. SUBORDINATION, ATTORNMENT, AND NONDISTURBANCF,. Lessee agrees
----------------------------------------------
that this Lease shall be subject and subordinate to any mortgages
or deeds of trust now or hereafter placed upon the Premises or
Property and to all modifications thereto, and to all present and
future advances made with respect to any such mortgage or deed of
trust. Lessee agrees to attorn to the mortgagee, trustee, or
beneficiary under any such mortgage or deed of trust, and to the
purchaser in a sale pursuant to the foreclosure thereof.
19. GOVERNMENTAL APPROVALS AND COMPLIANCE. During the Lease Term,
-------------------------------------
Lessor and Lessee agree to comply with all applicable laws,
regulations and zoning ordinances, including all environmental
laws and regulations, affecting the Tower, Premises and Property,
and the operation of their respective Facilities thereon, the
breach of which might result in a penalty to either party, or in
the event a Master Lease exists, a penalty to the Master Landlord
or forfeiture of the Master Landlord's title to the Property.
Lessor agrees to indemnify and hold Lessee harmless from any
liability for damages to any person or property, and liability
for fines imposed or corrective action ordered, caused by
Lessor's failure to comply with this Section. Lessee agrees to
indemnify and hold Lessor harmless from any liability for damages
to any person or property, and liability for fines imposed or
corrective action ordered, caused by Lessee's failure to comply
with this Section. In no event, however, shall either party be
liable to the other for lost profits, lost market share or other
consequential damages resulting from the breach of this Section.
20. ASSIGNMENT AND SUBLEASING.
(a) Lessor may, without Lessee's consent, assign or
otherwise transfer all or any portion of its right, title and
interest under this Multiple Site Lease (and all or any portion
of its right, title and interest in each individual Lease created
under the Multiple Site Lease) including, without limitation, the
right to receive the Initial Attachment Fee(s), Base Rent(s) (as
adjusted) and all other amounts payable hereunder . In the event
of such assignment or other transfer, the payment and other
rights of the assignee or other transferee with respect to the
Multiple Site Lease, and the Leases so assigned or otherwise
transferred shall not be subject to any claim, defense, set-off,
counterclaim or right of recoupment which Lessee may have against
Lessor. Lessor shall give Lessee notice of such assignment or
transfer, and thereafter Lessee shall pay all amounts due
hereunder, without deduction, as such assignee or other
transferee may direct in writing. Following any such assignment
or transfer, the term "Lessor" shall be deemed to refer to
Lessor's assignee or other transferee, Lessor shall be released
from its obligations and duties of such assignment or other
transfer, and Lessee shall look only to such assignee or other
transferee for performance thereof. In connection with any
financing, Lessor or its assignee or other transferee may pledge,
hypothecate, grant a mortgage on, or a security interest in, this
Multiple Site Lease or any individual Lease.
(b) Lessee shall not sublet any Premises in whole or in
part. Lessee shall not assign or transfer this Multiple Site
Lease or any Lease or Addendum or any interest therein, without
the prior written consent of Lessor which shall
<PAGE>
not be unreasonably withheld, delayed or conditioned, and a
consent to an assignment shall not be deemed to be a consent to
any subsequent assignment. Notwithstanding the foregoing,
Lessor's consent shall not be required for Lessee to assign this
Multiple Site Lease or any Lease or any Addendum to any parent,
subsidiary or wholly-owned subsidiary of parent or to any
affiliate of Lessee in which Lessee has a greater than fifty
percent (50%) ownership interest or to any entity which succeeds
to substantially all of the assets, stock or business of Lessee
by sale, merger or consolidation provided that, in cases,
Lessee's assignee shall assume all of Lessee's obligations under
the Multiple Site Lease, any Lease or any Addendum, as
applicable.
21. NOTICES. All notices shall be in writing and shall be deemed
-------
validly given if delivered by hand, sent by overnight delivery
service, or sent by certified mail, return receipt requested to
the address set forth in the applicable Addendum (or to any other
address that the party to be notified may have designated to the
sender by like notice). Notice shall be deemed received upon
receipt when delivered by hand, the next day if sent by overnight
delivery service, or two (2) days after postmarking if sent by
mail.
22. OPERATING EXPENSES. Lessee shall fully and promptly pay for all
------------------
water, gas, heat, light, power, telephone service, and other
public utilities furnished to the Premises and used by Lessee
throughout the Lease Term, and for all other costs. and expenses
of every kind whatsoever in connection with Lessee's use,
operation, and maintenance of its Facilities and all activities
conducted on the Premises. Lessee shall supply its own back-up
power source.
23. TAXES. Lessee shall be responsible for the timely reporting and
-----
payment of any tax directly related to the ownership or operation
of Lessee's Facilities, and any sales or use taxes on any rents
paid by Lessee under this Lease. Lessee shall also pay Lessor for
any increase to Lessor's property taxes or Master Landlord's
property taxes assessed as a result of Lessee's Facilities. The
amount shall be deemed additional rent hereunder and shall be
paid within thirty (30) days of Lessee's receipt of documentation
indicating the amount due.
24. INDEMNITY.
----------
(a) Lessee agrees to defend, indemnify and hold Lessor
harness from any and all liability, loss, claims, damage, cost or
expense (including reasonable attorneys' fees) with respect to
any claims, including but not limited to claims for bodily injury
or wrongful death to any person (including employees of Lessee or
any of its agents or contractors), property damage, or otherwise,
made against Lessor or for any damages suffered by Lessor arising
out of Lessee's presence on the Site or claims, governmental
enforcement or regulatory actions arising out of any breaches of
any term of this Multiple Site Lease Agreement or any Addendum,
in proportion to the amount of contribution of any of its agents
or contractors, or anyone else acting on behalf of the Lessee to
the injury or damage which is the subject of the claim.
<PAGE>
(b) Lessee agrees to accept all responsibility and pay for
all loss which may result in any way from any conduct,
negligence, acts, or omissions of Lessee, any of its agents or
contractors, or anyone else acting on behalf of Lessee. This
includes responsibility for any loss or injury to any workman or
damages to any property on the Site or property encumbered by an
easement granted to Lessee herein.
(c) "Conduct, negligence, acts, or omissions" as used in the
preceding paragraphs shall include, but not be limited to,
conduct relating to taking necessary safety and other precautions
to protect persons and property from damage, injury or illness;
providing all workers with a safe place to work; and compliance
with all local, municipal, state and national laws, orders and
regulations. Nothing in this Section shall be construed as
imposing any obligation on Lessor to undertake any conduct or
activity with respect to Lessee's activities on the Site, except
as otherwise agreed herein.
(d) In the event Lessor seeks to obtain indemnification or
contribution from Lessee with respect to a certain action, suit
or proceeding, Lessee, through competent counsel reasonably
satisfactory to Lessor, shall assume the control and defense of
such action, suit, or proceeding; provided, however that Lessor
shall be entitled to participate in any such action, suit, or
proceeding with counsel of its own choice at its own expense. If
Lessee fails to assume the defense within reasonable time, Lessor
may assume such defense, and the reasonable attorneys' fees and
expenses so incurred will be covered by the indemnity obligation
provided herein. Notwithstanding anything in this Section to the
contrary, Lessee shall not, without the written consent of Lessor
(1) settle or compromise any claim, action, suit or proceeding,
or consent to the entry of any judgment which does not include as
an unconditional term thereof, the delivery by the claimant or
plaintiff to Lessor of a written release of Lessor's liability
with respect to any such claim, action, suit or proceeding; or
(2) settle or compromise any action, suit or proceeding in any
manner that may materially and adversely affect Lessor.
(e) The covenants of this Section shall survive and be
enforceable and shall continue in full force and effect for the
benefit of Lessor and its subsequent transferees, successors and
assigns and shall survive both the expiration of the Multiple
Site Lease Term or the expiration or earlier termination of any
applicable Addendum. In no event, however, shall Lessee be liable
to Lessor for lost profits, lost market share or other
consequential damages resulting from the breach of this Section.
25. DEFAULTS AND REMEDIES.
---------------------
(a) Lessee's Default. Lessee shall be in default under a
------------------
Lease with respect to a specific Addendum:
(i) Fifteen (15) days after the due date for the
payment of rent or other sums due under this Lease, if the
payment due is not received by Lessor within the fifteen
(15) day cure period; or
<PAGE>
(ii) Thirty (30) days after Lessee's receipt of written
notice from Lessor of any breach of this Lease by Lessee
other than the non-payment of rent or other sums, or
defaults addressed in Sections 25(a)(i), (iii) and (iv), if
the breach is not cured within the thirty (30) day cure
period; provided, however, if the breach cannot reasonably
be cured within thirty (30) days, Lessee shall not be deemed
to be in default under this Lease if Lessee commences to
cure the breach promptly after notice of breach and
thereafter diligently pursues such cure to completion; or
(iii) Three (3) days after Lessee's receipt of written
notice from Lessor of a breach of any provisions of Sections
14 or 16, if the breach is not cured within the three (3)
day cure period; provided, however, if the breach cannot
reasonably be cured within three (3) days, Lessee shall not
be deemed to be in default under this Lease if Lessee
commences to cure the breach promptly after notice of breach
and thereafter diligently pursues such cure to completion;
and, further provided, that the default and cure periods of
Sections 25(a)(iv) shall supersede this Section 25(a)(iii),
if applicable, in Lessor's sole and absolute discretion; or
(iv) Unless otherwise agreed in writing by the
authorized representatives of both parties, twenty-four (24)
hours after Lessee's receipt of written notice from Lessor
of a breach of Sections 14(a), 14(c), 17 or 19 when, in
Lessor's sole and absolute opinion, the breach creates a
safety hazard, if the breach is not cured within the twenty-
four (24) hour cure period as to the defaulted Lease(s).
(b) Lessor's Remedies. Upon default by Lessee, in addition
------------------
to all other remedies provided herein and at law or in equity,
Lessor may elect one or more of the following options:
(i) Cure Lessee's default and invoice Lessee for all
reasonable costs incurred; or
(ii) Terminate the applicable Addendum, remove all of
Lessee's Facilities from the Premises, without notice and
without being guilty or liable in any manner for trespass,
and store such Facilities at Lessee's expense, payable upon
demand from Lessor for a period of not more than thirty (30)
days' time after the date of notice of default and, at
expiration of such storage period, consider Lessee's
Facilities as abandoned property which may be sold by Lessor
and the proceeds therefrom applied to any outstanding
amounts owed to Lessor; or
(iii) Consider this Lease in full force and effect and
be entitled to collect the rent provided for hereunder
subject to Lessor's duty to mitigate.
In the event Lessor terminates an Addendum pursuant to this
subsection, Lessee shall not be entitled to a refund of any unaccrued rent paid
to Lessor prior to such termination.
<PAGE>
(c) Lessor's Default. Lessor shall be in default under this
------------------
Lease thirty (30) days after Lessor's receipt of written notice
from Lessee of any breach of this Lease by Lessor, if the breach
is not cured within the thirty (30) day cure period; provided,
however, if the breach cannot reasonably be cured within thirty
(30) days, Lessor shall not be deemed to be in default under this
Lease if Lessor commences to cure the breach promptly after
notice of breach and thereafter diligently pursues such cure to
completion.
(d) Lessee's Remedies. Upon default by Lessor, in addition
-------------------
to all other remedies provided herein and at law or in equity,
Lessee may terminate the applicable Addendum as of the date of
the default and recover from Lessor all prepaid, unaccrued rent
subject to Lessor's right of set-off.
(e) Effect of Termination . Except as otherwise provided
----------------------
herein, upon termination of this Lease pursuant to this Section,
the parties shall be released from all duties, obligations,
liabilities and responsibilities under this Lease except for
obligations to pay damages to the other party, if any, Lessee's
obligation to remove its Facilities as required herein, and in
the event of Lessor's default, Lessor's obligation to return to
Lessee any unaccrued rent paid to Lessor prior to termination,
subject to Lessor's right of set-off.
(f) Attorneys Fees. In the event either party initiates
----------------
proceedings relating to the enforcement or interpretation of this
Lease, the substantially prevailing party shall collect from the
other party the substantially prevailing party's reasonable costs
and expenses incurred in each proceeding, including attorneys'
fees and costs, the value of employees' time spent on such
proceedings, and expert and other witness costs and fees.
26. WAIVER. No course of dealing between the parties or any delay by
------
a party to exercise any right it may have under this Lease shall
operate as a waiver of any of the rights hereunder or of those
provided by law or equity; nor shall any waiver of any prior
default operate as the waiver of any subsequent default.
27. LESSEE'S RIGHT TO TERMINATE. Lessee may terminate an Addendum, at
----------------------------
its option, after giving not less than thirty (30) days' written
notice to Lessor, if:
(a) The approval of or issuance of a license or permit by
any agency, board, court, or other governmental authority
necessary for the construction and/or operation of Lessee's
Facilities as now or hereafter intended by Lessee cannot be
obtained, or is revoked through no fault of Lessee, or if Lessee
determines in its sole discretion that the cost of obtaining or
retaining any such permit or approval is unreasonable;
(b) Lessee determines that technical problems or radio
interference problems from other antennas on the Tower at the
Commencement Date or from nearby radio transmitting facilities,
which problems cannot reasonably be corrected, preclude Lessee
from using the Premises for its intended purpose;
<PAGE>
(c) Lessee determines it does not have acceptable and
legally enforceable means of ingress and egress to and from the
Premises;
(d) Utilities necessary for Lessee's use of the Premises
are not reasonably available;
(e) The Premises are damaged, destroyed, condemned or taken
by eminent domain, to an extent which prohibits or materially
interferes with Lessee's use of the Premises; or
(f) The relocation of Lessee's Facilities pursuant to
Section 10 is unacceptable to Lessee.
Except as otherwise provided herein, upon termination of this Lease
pursuant to this Section, the parties shall be released from all duties,
obligations, liabilities and responsibilities under this Lease except for
obligations to pay damages to the other party, if any, Lessee's obligation to
remove its Facilities as required herein, and in the event of Lessor's default,
Lessor's obligation to return to Lessee any unaccrued rent paid to Lessor prior
to termination, subject to Lessor's right of set-off.
28. CONDEMNATION. If the entire Premises are taken by the power of
------------
eminent domain, or if a partial taking of the Premises by the
power of eminent domain renders the Premises unsuitable for the
use contemplated herein, either party may terminate the
applicable Addendum, and any unaccrued rent paid to Lessor prior
to the effective date of the termination shall be returned to
Lessee. Except as otherwise provided herein, upon termination of
this Lease pursuant to this Section, the parties shall be
released from all duties, obligations, liabilities and
responsibilities under this Lease except for obligations to pay
damages to the other party, if any, Lessee's obligation to remove
its Facilities as required herein, and in the event of Lessor's
default, Lessor's obligation to return to Lessee any unaccrued
rent paid to Lessor prior to termination, subject to Lessor's
right of set-off.
29. SECURITY INTERESTS IN LESSEE'S PROPERTY.
---------------------------------------
(a) Subject to the Secured Party agreeing to the provisions
of this Section , Lessor covenants and agrees that, so long as
Lessee is not in default hereunder, Lessee may, upon at least
thirty (30) days prior written notice to Lessor, grant a security
interest to such Secured Party for the purpose of securing any
bona fide indebtedness in this Lease, the leasehold interest of
Lessee created hereby, and all of Lessee's right, title and
interest in and to its Facilities and any other equipment placed
on the Tower and Property, provided that no such security
interest shall impair or abridge the rights of Lessor as provided
herein. Lessor shall execute such consent to leasehold financing
as may be reasonably required by the Secured Party and approved
by Lessor, which approval shall not be unreasonably withheld,
delayed or conditioned. Lessor acknowledges that any lien it may
have against Lessee's Facilities located on the Tower and
Property shall be junior and subordinate to such financing.
<PAGE>
(b) In the event Lessee grants such a security interest,
Lessee shall notify Lessor of the name and address of the Secured
Party. Lessor agrees to notify the Secured Party of any default
by Lessee under this Lease on the same date that notice is
forwarded to the Lessee. Secured Party shall have the same right
to cure any default as Lessee during the same cure periods
granted to Lessee in herein. If a termination, disaffirmance or
rejection of this Lease pursuant to any laws (bankruptcy or
insolvency laws) by Lessee shall occur, or if Lessor shall
terminate this Lease for any reason, Lessor will give Secured
Party prompt written notice thereof. Lessor will then give
Secured Party the right to enter upon the Property for a thirty
(30) day period commencing on the date of the aforesaid notice
from Lessor for the sole purpose of removing Lessee's Facilities
subject, however, to the following conditions :
(i) Secured Party may not enter upon the Property
without giving Lessor at least ten (10) days prior written
notice thereof '. Lessor may, in its discretion, refuse the
Secured Party unescorted access to the Property and Tower;
(ii) Lessee's Facilities may not be removed by anyone
other than a qualified, licensed, bonded contractor approved
by Lessor in writing prior to the commencement of such
removal;
(iii) Secured Party shall provide Lessor with proper
proof of liability insurance (in an amount reasonably
acceptable to Lessor). From the applicable contractor and/or
Secured Party in connection with the removal of Lessee's
Facilities;
(iv) Lessee's Facilities shall be removed by Secured
Party's contractor in a commercially reasonable manner. Any
damage to the Tower and/or any equipment located thereon
resulting from or arising out of the removal of Lessee's
Facilities shall be immediately repaired at Secured Party's
expense by a contractor approved by Lessor; and
(v) Secured Party shall indemnify and hold Lessor
harmless from all claims (including attorneys' fees, costs
and expenses of defending any such claims) arising from the
acts or omissions of Secured Party and/or its agents,
employees, engineers, contractors, subcontractors, licensees
or invitees in connection with its entry onto the Property
and Tower in connection with the removal of Lessee's
Facilities therefrom.
Notwithstanding the above described right of Lessee to assign its
leasehold interest in this Lease and/or its Facilities to Secured Party, its
successors and assigns, Lessee expressly acknowledges and agrees that: (a) such
secured interest shall not be subsequently transferred by Secured Party to
another party by merger, consolidation, voluntary or involuntary transfer or
otherwise without Lessor's prior written consent; and (b) neither Secured Party
nor its successors and assigns, may assume Lessee's leasehold interest in this
Lease and/or operate Lessee's Facilities on the Property and Tower without
Lessor's prior written consent.
<PAGE>
30. MISCELLANEOUS.
--------------
(a) Binding on Successors. This Lease and all Addenda are
---------------------
binding on and will inure to the benefit of the heirs,
successors, executors, administrators and permitted assigns of
the parties.
(b) Governing Law. This Lease and the relationship of the
-------------
parties shall be governed by the laws of the state in which the
Premises are located.
(c) Entire Agreement. All of the representations and
----------------
obligations of the parties are contained herein, and no
modification, waiver or amendment of this Lease or of any of its
conditions or provisions shall be binding upon a party unless in
writing signed by both parties or duly authorized agents of the
parties empowered by written authority signed by the respective
party.
(d) Headings. The headings of sections and subsections are
--------
for convenient reference only and shall not be deemed to limit,
construe, affect, modify or after the meaning of such sections or
subsections.
(e) Time of Essence. Time is of the essence for Lessor's
---------------
and Lessee's obligations under this Lease
(f) Severability. If any section, subsection, term or
------------
provision of this Lease or the application thereof to any party
or circumstance shall, to any extent, be invalid or
unenforceable, the remainder of the section, subsection, term or
provision of this Lease or the application of same to parties or
circumstances other than those to which it was held invalid or
unenforceable, shall not be affected thereby and each remaining
section, subsection, term or provision of this Lease shall be
valid and enforceable to the fullest extent permitted by law.
(g) Further Assurances. Each of the parties agree to do
------------------
such further acts and things and to execute and deliver such
additional agreements and instruments as the other may reasonably
require to consummate, evidence, confirm or carry out the
intention of this Lease.
(h) Right to Register or Record. Upon the request and at
---------------------------
the expense of Lessee, Lessor agrees to promptly execute, have
notarized and deliver to Lessee a Memorandum of Lease prepared by
Lessee in recordable or registerable form setting forth the
general terms of this Lease.
(i) Interpretation. Each party to this Lease and its
--------------
counsel have reviewed this Lease. The normal rule of construction
to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of
this Lease or of any amendments or exhibits hereto.
(j) Brokerage. Each party shall indemnify and hold the
---------
other party harmless against all claims by any real estate agent
or broker claiming a commission through or as a result of any
action by the indemnifying party. The indemnification obligations
of each party contained in this subsection shall survive the
termination or expiration of this Lease.
<PAGE>
(k) Deed of Lease. In the event the jurisdiction in which
--------------
the Premises are located , requires that the interests conveyed
herein be conveyed by deed, this Lease shall be deemed to be a
Lease Agreement and Deed of Lease, and the interests herein shall
be deemed to be conveyed by such Deed of Lease.
(l) Confidential. The parties agree the terms of this Lease
------------
are confidential, and except for the general terms set forth in a
Memorandum of Lease Agreement, Lessee agrees not to disclose any
terms or conditions of this Lease to any third party except its
attorneys and accountants, or as otherwise required by law.
IN WITNESS WHEREOF, the parties hereto have executed this Lease on the
day and year first above written.
LESSOR: LESSEE:
360 COMMUNICATIONS COMPANY TRITON PCS COMPANY L.L.C.
By TRITON MANAGEMENT COMPANY
By: By:
Title: Title:
Date: Date:
LESSOR NOTARY
STATE/COMMONWEALTH OF
CITY/COUNTY OF ______________, to wit:
Acknowledged before me, a notary public in and for the jurisdiction
aforesaid, this ___________ day of ________________, by ___________________.
My commission expires:
LESSEE NOTARY
STATE/COMMONWEALTH OF
CITY/COUNTY OF _________________, to wit:
<PAGE>
EXHIBIT A
ADDENDUM TO
360" COMMUNICATIONS COMPANY
AND
MULTIPLE SITE TOWER ATTACHMENT LEASE AGREEMENT
SITE NAME: (Site)
LOCATION:
SITE NUMBER:
This Addendum (the Addendum) to the Multiple Site Tower Attachment Lease
Agreement between the parties dated as of , (Multiple Site Lease) is
made as of the day of , 19 , between
(Lessor) and
(Lessee).
In consideration of the mutual promises, the parties agree as
follows:
1. DEFINITIONS. Except as otherwise defined herein,
-----------
capitalized terms are DEFINED as set forth in the Multiple Site
Lease.
2. PURPOSE. This Addendum supplements and incorporates by
-------
reference the Multiple Site Lease, and makes the terms of the
Multiple Site Lease applicable to the Site.
3. PROPERTY AND TOWER.
------------------
(a) The Property is a x parcel of land located at
(b) The Tower is a tower located on the Property.
4. PREMISES. The Premises are described as follows:
(a) The Tower Space consisting of space on the Tower at the
to level; [and]
[INSERT IF LESSEE WILL LEASE GROUND SPACE FROM LESSOR]
(b) The Ground Space consisting of a x parcel of land near
the base of the Tower.
<PAGE>
A more particular description of the Premises and the easements granted to
Lessee in the Multiple Site Lease is contained on the legal description and
site plan prepared by and dated attached as a Schedule1.
The As-Built Survey to be prepared and delivered to Lessor pursuant to the
Multiple Site Lease shall become Schedule 2.
5. LESSEE'S FACILITIES. The Premises shall be used by Lessee
-------------------
solely for the installation, operation, maintenance and replacement of
Lessee's Facilities.
6. TERM
----
(a) Execution Date. The Execution Date of this Addendum is the date
----------------
upon which this Addendum has been duly executed by Lessor or Lessee
whichever is the later to so execute this Addendum.
(b) Lease Commencement Date. The Lease Commencement Date for this
-----------------------
Site shall be
(c) Initial Term. The Initial Term of this Lease shall begin on the
--------------
Lease Commencement Date and shall end at midnight on the earlier
of . or the date of expiration or earlier termination of the
Master Lease, if any.
(d) Renewal Terms. Lessee shall have the option to renew this Lease
-------------
for
(__) additional terms of . (..) years each, on the same terms and
conditions set forth herein and in the Lease. Each additional term shall be
referred to as a "Renewal Term."
7. INITIAL ATTACHMENT FEE AND BASE RENT.
------------------------------------
(a) Initial Attachment Fee. On the Lease Commencement Date, Lessee
------------------------
shall pay to Lessor a non-refundable initial attachment fee of
[$_____________] dollars.
(b) Base Rent During the Initial Term, Lessee shall pay Base Rent in
---------
the amount of Dollars [$____________] per year, paid annually in
advance to Lessor at Lessor's notice address or such other place
Lessor designates to Lessee in writing, beginning on the Lease
Commencement Date and on each anniversary thereafter.
(c) Rent Adjustments. Beginning in the first year of each Renewal
------------------
Term, the then current Base Rent shall be adjusted as set forth in the
Multiple Site Lease.
(d) Payment Address. Except as otherwise specified by Lessor, all
-----------------
payments of Base Rent and/or other remittances shall be sent to:
360' Communications Company
Attn: Revenue Department
Box 60273
Charlotte, NC 28260-0273
<PAGE>
8. MASTER LEASE. A copy of the Master Lease, if any, is attached
-------------
hereto as Schedule 4 (subject to withholding and redaction as required
by confidentiality and nondisclosure provisions of the Master Lease).
If the Master Lease does not contain a plat and legal description of
the Property, a separate plat and legal description for the Property
shall also be attached as Schedule 4. In the event Lessor owns the
Property, Lessor's legal description of the Property shall be attached
as Schedule 4. The consent of Master Landlord to this Addendum, if
required, shall be attached as Schedule 5.
9. SITE COORDINATOR. Each party agrees to designate a site
------------------
coordinator for Site who will have authority to deal with his or her
counterpart on matters within the scope of this Addendum. The identity
and contact information for such site coordinator designated by Lessor
------
is as follows:
Name: __________________________
Office Phone: __________________________
Portable Phone: __________________________
The identity and contact information for the site coordinator
designated by Lessee is as follows:
-------
Name: __________________________
Office Phone: __________________________
Portable Phone: __________________________
Lessee agrees to keep Lessor informed of the progress of construction
at this Site.
(A) NOTICES. Notices given pursuant to the Multiple Site Lease shall
---------
be delivered to Lessor and Lessee at the following addresses:
Lessor: __________________________
__________________________
__________________________
__________________________
Attn:_____________________
__________________________
Phone:____________________
with a copy to Lessor's counsel:
_____________________
_____________________
_____________________
Lessee:
_____________________
_____________________
_____________________
Attn:
---------------------
Phone:
---------------------
<PAGE>
with a copy to Lessee's counsel:
_____________________
_____________________
_____________________
_____________________
_____________________
IN WITNESS WHEREOF, each party has caused this Addendum to be executed
on its behalf by its duly authorized officer.
LESSOR: LESSEE:
_________________________ _________________________
By: By:
Its: Its:
Commonwealth/ State of
CITY/COUNTY OF
My Commission expires:
Notary Public
Acknowledged before me, a notary public in and for the jurisdiction
aforesaid, this _______________ day of , __________, _________ by __________,
as __________ of ________.
COMMONWEALTH STATE OF
CITY/COUNTY OF
Acknowledged before me, a notary public in and for the jurisdiction
aforesaid, this of
My Commission expires:
Notary Public
Its:
Date:
<PAGE>
SCHEDULE 1
----------
Legal Description and
Site Plan of Premises
<PAGE>
SCHEDULE 2
----------
As-Built Survey
<PAGE>
SCHEDULE 3
----------
Lessee's Facilities
Number, manufacturer and type of antennas:
Weight and length of antennas:
Transmission line manufacturer, type, diameter and length:
Height of antennas on Tower:
Tower leg:
Direction of radiowave transmission:
Rated Power:
Transmitting/Receiving frequencies:
Equipment building manufacturer and size:
Equipment in building manufacturer and type:
Generator manufacturer and size:
Building ground ring:
Waveguide bridge length:
Electric and telephone service lines and conduit: As needed
---------
<PAGE>
SCHEDULE 4
----------
Master Lease or Source Deed of Property and Plat of
Property, whichever applies
<PAGE>
SCHEDULE 5
----------
Landlord's Consent
<PAGE>
EXHIBIT 10.38
MASTER TOWER LICENSE AGREEMENT
This MASTER TOWER LICENSE AGREEMENT ("Master License Agreement") is made
this 12th day of June 1998, between Appalachian Power Company, a Virginia
corporation, ("Licensor"), and Triton PCS Property Company L.L.C., a Delaware
limited liability company, 9211 Arboretum Parkway, Ste. 200, Richmond, Virginia
23236 ("Licensee").
Background Information
----------------------
A. Licensee desires to install communication services equipment
consisting of radio communications facilities and towers, including without
limitation an air conditioned equipment shelter of no greater than one hundred
twenty (120) square feet, utility lines, electronic equipment, audio
transmitting and receiving antennas and supporting equipment, all as more
particularly described in the applicable SLA (as defined below) (the
"Communications Equipment") on and underneath certain of AEP Entities' towers
and land sites (individually referred to herein as a "Tower") located in various
counties in the States of West Virginia and Virginia at different Latitudes and
Longitudes (each such Tower location hereinafter referred to as a "Site"). The
Tower and land and the Communications Equipment located near the Tower for any
particular site is hereinafter collectively called the "Licensed Area.
B. Licensor, subject to Licensor's approval in each and every instance,
is willing to permit the installation of the Communications Equipment at each
Site, but subject to Licensee's full and complete compliance with all of the
terms and conditions set forth in this Master License Agreement and the terms of
any particular Site License Agreement.
Statement of Agreement
----------------------
All parties hereto acknowledge the accuracy of the above background
information and in consideration of the terms, provisions, covenants and
agreements herein set forth, agree as follows:
1. MASTER LICENSE.
This Master License Agreement sets forth the basic terms and conditions
upon which each Site or portion thereof is licensed by Licensor to Licensee.
Upon the parties' agreement as to the particular terms of any such license, the
parties shall execute a completed Site License Agreement, in the form attached
hereto as Exhibit A, which is incorporated herein by this reference or in such
other form as both parties may agree ("SLA"). The terms and conditions of any
SLA shall govern and control in the event of a discrepancy or inconsistency with
the terms and conditions of this Master License Agreement.
Licensor does, upon the signing of a particular SLA, hereby represent that
it shall, by reason of either fee ownership, lease, license or easement, have
the right to, and hereby does grant a non-exclusive license to Licensee to
install, maintain, replace and operate on the transmission towers, communication
towers, or real property set forth in the SLA, the Communications Equipment as
set forth in the SLA, subject to the terms and conditions set forth in this
Master License Agreement. Licensor makes no representation or warranty,
expressed or implied, regarding the suitability of the Tower for Licensee's
purposes. In those circumstances where Licensor's rights to the Licensed Area
are limited to easements or licenses permitting Licensor to install, operate and
maintain an electric transmission system, Licensor shall notify Licensee in
writing of any and all approvals, leases, rights, easements or permissions which
must be obtained. If Licensee decides, in its sole discretion, to pursue the
particular Site, Licensor, at the
- --------------------------------------------------------------------------------
Confidential treatment has been requested for portions of this exhibit.
The copy filed herewith omits the information subject to the confidentiality
request. Omissions are designated as *****. A complete version of this exhibit
has been filed separately with the Securities and Exchange Commission.
<PAGE>
sole cost and expense of Licensee *****, shall attempt to obtain and
maintain any approvals, leases, rights, easements or permissions necessary to
install, operate and maintain the Communications Equipment in the Licensed Area.
In the event that the cost and expense for such approvals exceeds ***** for
any Site, Licensor and Licensee shall, before incurring any expense, mutually
agree upon such additional expense on a site by site basis. Prior to Licensee
reimbursing Licensor, Licensor shall supply documentation for the above costs.
If Licensor is unable to obtain said rights, Licensee shall be permitted to
contact the relevant property owner or third party.
2. TERM. The term of this Master License Agreement shall commence as of the
date hereof and shall continue until all of the SLAs have expired. As to any
particular Site, the term of the SLA shall commence on the initiation of any
construction at the Site, but in no event any later than six (6) months after
the signing of the SLA (the "Rental Commencement Date"), and shall continue for
an initial term (the "SLA Original Term") of ten (10) years. In the event that
Licensee shall not have acquired all of the necessary permits within said six
month period, the parties may by written mutual consent adjust the Rental
Commencement Date, provided that Licensee has demonstrated due diligence in
obtaining all of the necessary permits and Licensee agrees to continue such
efforts to obtain such necessary approvals. Licensee shall have the option to
extend any particular SLA for four successive option terms of five years each by
providing written notice to Licensor at least at least six (6) months prior to
the expiration of the then current term.
It is understood and agreed that the consent of an AEP Entity is required
before any specific location is made subject to a SLA. Such consent shall be in
the sole and absolute discretion of the Licensor. The AEP Entities reserve the
right, from time to time, to exclude certain potential Sites from the operation
of this Master License Agreement. AEP Entities shall further be permitted by
providing written notice to Licensee to cease to allow Licensee to select any
new Sites or enter into any new SLAs upon or after the fifth anniversary of the
commencement date of this Master License Agreement.
If during the initial six months after rental commencement date of any SLA,
Licensee determines that the Site is not suitable for its needs, then it may
terminate the SLA upon payment of a fee of *****. Thereafter, Licensee may
terminate any SLA by providing not less than one year's prior written notice.
3. RENT.
(a) Upon the selection of each Site hereunder, Licensee shall pay Licensor
an initiation fee of ***** to cover Licensor's costs in conducting a
preliminary analysis of the suitability of the Site for Licensee's purposes. The
initiation fee paid hereunder shall not cover any of Licensor's costs in
designing and preparing the Site for deployment of Licensee's Communication
Equipment. Such costs shall be billed separately at Licensor's actual cost,
including overheads, plus ***** or as agreed to by both parties
in a separate construction agreement. All such costs shall be approved by
Licensee in advance.
(b) The Annual Base Rent during the Original Term for any SLA entered into
within five years of the execution of this Master License Agreement shall be in
the amount of ***** due and payable, without demand, in advance monthly
installments of ***** for those Sites where Licensee will deploy on an existing
Tower of Licensor ("Tower Site"), and ***** due and payable, without demand, in
advance monthly installments of ***** for those Sites where Licensee must build
its own Tower ("Raw Land Site"). The Annual Base Rent during the Original Term
for any SLA entered into after the fifth anniversary of this Master License
shall be determined by (i) dividing
- --------------------------------------------------------------------------------
***** Certain information on this page has been omitted and filed
separately with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted portions.
2
<PAGE>
(A) the CPI-U indicator (as defined below) published most recently prior to the
commencement date of the SLA, by (B) the CPI-U indicator published at the
commencement of this Master License Agreement, and (ii) multiplying the
resultant number by the Annual Base Rent for those SLAs entered into within the
fifth anniversary of this Master License Agreement. The first payment shall be
prorated from the Rental Commencement Date as set forth in the particular SLA to
the first monthly payment date. Monthly rental payments shall be due on the
first day of each month of each year. Monthly rental payments shall be paid to
Licensor at the address set forth in Section 23 or at such other address as
Licensor may designate in writing at least thirty (30) days in advance of any
rental payment date. Any monthly rent installments (Base Rent or Initiation
fees) shall be deemed late if not received by Licensor on the monthly payment
date and shall begin to bear interest at the prime rate of interest quoted by
Bank One, N.A. (or its successor) plus ***** per annum or the maximum
rate allowed under the laws of the State of Ohio, whichever is less, five (5)
days after the monthly payment date until paid. In addition to the interest
charged for such late payment, Licensee shall pay an administrative fee of *****
for each late notice provided by Licensor pursuant to Section 15 below.
(c) The Annual Base Rent during any renewal term shall be equal to the
Annual Base Rent paid for the previous term adjusted as provided herein and
shall remain the same throughout each year of such renewal term. Each adjustment
to the Annual Base Rent shall be based on the U.S. Department of Labor, Bureau
of Labor Statistic's Consumer Price Index for Urban Consumers, U.S. City Average
("CPI-U") indicator and shall be determined by (i) dividing (A) the CPI-U
indicator published most recently prior to the renewal date, by (B) the CPI-U
indicator published at the beginning of the term then in effect, and (ii)
multiplying the resultant number by the Annual Base Rent paid during the term
then in effect. In the event that the CPI-U is converted to a different standard
reference base or otherwise revised, the determination of the adjustment shall
be made with use of such conversion factor, formula or table for converting the
CPI-U as may be published by the Bureau of Labor Statistics, or if the Bureau
shall fail to publish the same, then with the use of such conversion factor,
formula or table as may be published by Prentice Hall Inc. or any other
nationally recognized publisher of similar statistical information.
(d) In the event that Licensee enters into more than twenty (20) SLAs, the
Annual Base Rent then applicable for each site licensed hereunder shall be
decreased by ***** per month for Tower Sites and ***** per month for Raw Land
Sites. In the event Licensee licenses more than forty (40) Sites the then
applicable Annual Base Rent for each site licensed hereunder shall be decreased
by an additional ***** for Tower Sites and ***** for Raw Land Sites. Such
discounts shall become effective on the first day of the month following the
Rental Commencement Date of the SLA which entitles Licensee to the volume
discount.
(e) No later than three (3) years after the signing of this Master License
Agreement, but after all the Sites have been identified, the parties agree to
develop a comprehensive billing schedule to provide for one quarterly rent
payment for all the Sites. In the event no comprehensive billing schedule is
developed, the rental terms and payments schedule set forth herein shall remain
in effect.
4. INDEMNIFICATION, LIMITATION OF LIABILITY & DAMAGES.
(a) Indemnification by Licensee. Licensee shall indemnify Licensor and
---------------------------
save it harmless from and against any and all claims, actions, damages,
liability and expense in connection with a loss of life, personal injury and/or
damage to property arising from or out of: (i) any occurrence in, upon or at the
Site and Licensed Area caused by the act or omission of Licensee or Licensee's
agents, customers,
- --------------------------------------------------------------------------------
***** Certain information on this page has been omitted and filed
separately with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted portions.
3
<PAGE>
invitees, contractors, servants, vendors, materialmen or suppliers except to the
extent caused by the negligence or willful misconduct of Licensor, Licensor's
agents, customers, invitees, contractors, servants, vendors, materialmen or
suppliers; (ii) any occurrence caused by the violation of any law, regulation or
ordinance applicable to Licensee's actual use or presence on the Site and
Licensed Area or the actual use of or presence on the Site and Licensed Area by
Licensee's agents, contractors, servants, vendors, materialmen or suppliers; or
(iii) real estate brokers claiming by, through or under Licensee for any
commission, fee or payment in connection with this Master License Agreement.
If Licensor is made a party to any litigation commenced by or against
Licensee for any of the above reasons, then Licensee shall protect and hold
Licensor harmless and pay all costs, penalties, charges, damages, expenses and
reasonable attorneys' fees incurred or paid by Licensor in accordance with the
provisions of Section 4(c) of this Agreement.
(b) Indemnification by Licensor. Licensor shall indemnify Licensee and
---------------------------
save it harmless from and against any and all claims, actions, damages,
liability and expense in connection with a loss of life, personal injury and/or
damage to property arising from or out of: (i) any occurrence in, upon or at the
Site and Licensed Area caused by the act or omission of Licensor or Licensor's
agents, contractors, servants, vendors, materialmen or suppliers except to the
extent caused by the negligence or willful misconduct of Licensee, Licensee's
agents, contractors, servants, vendors, materialmen or suppliers; (ii) any
occurrence caused by the violation of any law, regulation or ordinance
applicable to Licensor's actual use of or presence on the Site and Licensed Area
or the actual use of or presence on the Site and Licensed Area by Licensor's
agents, contractors, servants, vendors, materialmen or suppliers; or (iii) real
estate brokers claiming by, through or under Licensor for any commission, fee or
payment in connection with this Master License Agreement.
If Licensee is made a party to any litigation commenced by or against
Licensor for any of the above reasons, then Licensor shall protect and hold
Licensee harmless and pay all costs, penalties, charges, damages, expenses and
reasonable attorneys' fees incurred or paid by Licensee in accordance with the
provisions of Section 4(c) of this Agreement.
(c) Procedure. (i) Any party being indemnified ("Indemnitee") shall give
---------
the party making the indemnification ("Indemnitor") written notice as soon as
reasonably possible if (1) any claim or demand shall be made or liability
asserted against Indemnitee or (2) any suit, action or administrative or legal
proceedings shall be instituted or commenced in which any Indemnitee is involved
or is named as the defendant, either individually or with others.
(ii) If, within forty-five days after the giving of such notice, Indemnitee
receives written notice from Indemnitor stating that the Indemnitor disputes or
intends to defend against such claim, demand, liability, suit, action or
proceedings, then Indemnitor will have the right to select counsel of its choice
and to dispute or defend against such claim, demand, liability, suit, action or
proceeding at Indemnitor's expense. Notwithstanding the foregoing forty-five
day period, however, the Indemnitor shall notify Indemnitee of its intent to
dispute or defend any claim, demand, liability, suit, action or proceedings
within such timeframe as is imposed by any law or statute regarding the legal
obligation to file any pleading, petition, or similar response to any complaint,
petition, writ, or similar filing. Indemnitee will fully cooperate with
Indemnitor in such dispute or defense so long as Indemnitor is conducting such
dispute or defense diligently and in good faith; provided, however, that
Indemnitor will not be permitted to settle such dispute or claim without the
prior written approval of Indemnitee, which shall not be unreasonably withheld,
conditioned or delayed. Even though Indemnitor selects counsel of
4
<PAGE>
its choice, Indemnitee has the right to additional representation by counsel of
its choice to participate in such defense at Indemnitee's sole cost and expense.
(iii) If no such notice of intent to dispute or defend is received by
Indemnitee within the forty-five day period, or if diligent and good faith
defense is not being, or ceases to be, conducted, Indemnitee has the right to
dispute and defend against the claim, demand or other liability at the sole cost
and expense of Indemnitor and to settle such claim, demand or other liability
and in either event to be indemnified as provided for in this section.
Indemnitee is not permitted to settle such dispute or claim without the prior
written approval of Indemnitor which approval shall not be unreasonably
withheld, conditioned or delayed.
(iv) Indemnitor's indemnity obligation includes reasonable attorneys'
fees, investigation costs, and other reasonable costs and expenses incurred by
Indemnitee from the first notice that any claim or demand has been made or may
be made, and is not limited in any way by any limitation on the amount or type
of damages, compensation or benefits payable under applicable workers
compensation acts, disability benefit acts or other employee benefit acts. The
obligations of Licensee and Licensor under this Section 4 shall survive the
termination of this Master License Agreement and/or any SLA.
(d) Waivers. The parties each agree to expressly waive its immunity, if
-------
any, in connection to claims against the other party by each party's respective
employees, as a complying employer under the applicable Worker's Compensation
Law, but only to the extent that such immunity would bar or affect recovery
under or enforcement of the indemnification obligation under this section. Each
party agrees to obtain for the other party's benefit similar waivers of immunity
from its contractors or agents who perform work at the Licensed Area. Licensee
agrees to require in its contracts with its contractors and their subcontractors
to indemnify Licensee and Licensor of all claims for its negligence or willful
misconduct.
(e) Severability. Notwithstanding anything to the contrary contained in
------------
this Agreement or otherwise, it is understood and agreed that in the event that
any part of the aforesaid indemnities shall be held to be invalid by any court
of competent jurisdiction, the aforesaid indemnity shall not be invalidated, but
shall be revised to the extent that would then be the maximum scope which shall
be legally enforceable and the parties hereto hereby consent to the enforcement
of such indemnities as so modified.
5. TAXES. Upon presentation of a bill and other reasonable supporting
documentation, any tax, assessment, levy, charge, fee or license imposed or
required by reason of, attributable to or in connection with the Communications
Equipment or the Licensed Area, shall be paid in full by the Licensee either
directly to the applicable taxing authority or within thirty days of
presentation of the same by Licensor.
6. PERSONAL PROPERTY. The Communications Equipment shall remain the personal
property of Licensee and no part of such Communications Equipment constructed,
erected or placed by Licensee in the Licensed Area shall become, or is to be
considered as a fixture being affixed to or a part of, Licensor's real estate,
any and all provisions and principles of law to the contrary notwithstanding, it
being the specific intention of the parties that all improvements of every kind
and nature constructed, erected or placed by Licensee on the ground in the
Licensed Area shall be and remain the property of Licensee, with the exception
of any below grade grounding system which, at Licensor's option, shall remain in
place. Licensor waives any lien rights it may have concerning the Communications
Equipment which are deemed Licensee's personal property and not fixtures, and
Licensee shall have the right to remove the same at any time without Licensor's
consent (subject to the access restrictions set forth
5
<PAGE>
herein). Licensor acknowledges that Licensee may have entered into a financing
arrangement including promissory notes and financial and security agreements for
the financing of the Communications Equipment (the "Collateral") with a third
party financing entity (and may in the future enter into additional financing
arrangements with other financing entities). In connection therewith, Licensor
(I) consents to the installation of the Collateral; (ii) disclaims any interest
in the Collateral, as fixtures or otherwise; and (iii) agrees that the
Collateral shall be exempt from execution, foreclosure, sale, levy, attachment,
or distress for any Rent due or to become due and that such Collateral may be
removed at any time (provided such removal is undertaken in compliance with the
access provisions set forth herein) without recourse to legal proceedings. Upon
termination of any SLA, Licensee may, in its sole and absolute discretion, allow
Licensor the right to retain all or any portion of the Communications Equipment
provided that Licensor pays Licensee adequate consideration, as determined by
Licensee, for the Communications Equipment.
7. INTERFERENCE AND DAMAGE. Licensee agrees that the Communications Equipment
shall not cause interference with any of Licensor's equipment located on the
Site or equipment of any third party located on the Site prior to the Licensees
execution of an individual SLA, for the same site. In the event that Licensee's
Communications Equipment causes such interference, Licensee agrees to promptly
remedy such interference at its sole expense and further agrees to limit or
cease radio operations during the period of such interference. Further, Licensee
shall hold harmless Licensor from and against any claims of adjoining landowners
to the extent such claims are based on Licensee's use of any Site. Licensor will
not permit or suffer the installation or existence of any subsequent
communications equipment or improvement by a party other than Licensor,
including without limitation, transmission or reception devices, upon any Site
or Licensed Area if such devices or improvement interferes with transmission or
reception by Licensee of its Communications Equipment in any manner whatsoever.
Licensor shall have complete discretion to install any improvements at the Site
or Licensed Area to serve its electric transmission and distribution needs. In
the event that Licensor installs any improvement upon its Tower, Site or
Licensed Area or a third party operates equipment which interferes with the
transmission or reception of Licensee's Communications Equipment and such
interference cannot be eliminated by Licensor and Licensee using their good
faith best efforts within a reasonable period of time, Licensor and Licensee
shall cooperate and use their good faith best efforts to find another Site for
Licensee's Communications Equipment. Licensee shall also have the option upon
any such relocation of terminating the applicable SLA effective as of the date
Licensee removes its facilities. Upon any such relocation Licensee shall have
the option of maintaining a temporary tower at the old site for purposes of
transmitting and receiving for a period of six months following the relocation
provided such temporary tower does not interfere with Licensor's operations or
overburden any existing land rights. Licensee shall be solely responsible for
the cost of relocating its equipment. Licensee agrees not to damage the Tower,
the Licensed Area or Site or any personal property or fixtures thereon in any
way. The liability for any such damage, if committed, shall be the liability of
Licensee in accordance with the terms and conditions of Section 4 hereof.
8. INSTALLATION. All Communications Equipment mounted on the Tower will be
attached securely with Licensor approved mounts, hangers, and clamps, in
accordance with the drawings delivered with each SLA. Installation and
maintenance of Licensee's Communications Equipment in the air shall be done at
Licensee's sole expense, and shall be in accordance with the standards and
requirements of Licensor, copies of which shall be delivered to Licensee, and
shall be done under the Licensor's supervision and shall be subject to
Licensor's final written approval, which approval shall be made in Licensor's
sole discretion. Prior to the installation, Licensee shall submit to Licensor
installation and engineering analysis or drawings for Licensor's approval. The
supervision, approval and other activities of Licensor under this section,
however, shall not constitute the waiver of any term or
6
<PAGE>
condition of this License Agreement. Scheduling of any and all work shall be
coordinated with Licensor, and Licensor reserves the right to have a
representative present during any such work, the cost of which shall be borne by
Licensee at a labor rate per hour pre-approved by Licensee. Licensee shall not
be liable to Licensor for any damage, expense, cost or other liability which is
attributable to (i) the failure of any equipment supplied by Licensor or (ii)
any directive, specification or requirement supplied by Licensor. Licensee shall
provide Licensor an opportunity to bid on all construction and engineering work
not undertaken by Licensee or one of its affiliates by submitting a description
of such work to Licensor and allowing Licensor no less than fifteen (15) days to
submit a bid. However, no preference for an award of said bid shall be given to
Licensor.
If Licensor is retained for engineering and design work, Licensee shall pay
Licensor ***** per Tower. However, after Licensor has completed the engineering
and design for the first two (2) Towers, Licensor may increase the engineering
and design prices to reflect any unforeseen expenses, so long as said unforeseen
expenses are agreed to by Licensee and adequate documentation is supplied to
Licensee to reflect same.
9. MAINTENANCE AND CONSTRUCTION. Licensee's Communications Equipment shall,
at the sole expense of Licensee, be installed, kept and maintained at all times
in a good state of repair and maintenance and in full compliance with all
applicable laws, rules and regulations of any and all governmental authorities,
now in force, or which may hereinafter be in force, including, without
limitation, the National Electrical Safety Code, the National Electric Code, the
Federal Communications Commission, the Occupational Safety and Health
Administration, the Federal Aviation Administration, the Environmental
Protection Agency, all other applicable federal, state, or local statutes,
rules, and codes, and any of Licensor's design or construction requirements.
Pursuant to applicable law, Licensee shall take any necessary precautions by the
installation of protective equipment or other means, to protect all persons and
property of all kinds against injury or damage occurring by reason of Licensee's
Communications Equipment on Licensor's Tower. Licensee shall secure any right,
license or permit from any governmental body, authority or other person or
persons which may be required for the construction or maintenance of the
Communications Equipment. Licensor assumes no responsibility for licensing,
operating or maintaining Licensee's Communications Equipment. Any future
maintenance involving antennas and cables must be coordinated with Licensor
within a reasonable time of not less than seven (7) business days prior to the
work being done, except in case of an emergency, Licensee shall still use its
best efforts to notify Licensor of the proposed maintenance activities in
advance of the work. An emergency includes the Licensee's loss of use of
Communications Equipment, termination of signal or signal degradation.
Notwithstanding the previous sentence, Licensee shall not under any
circumstances access any of the Communications Equipment on any electrical
transmission or distribution tower or pole due to concerns regarding the safety
and reliability of the Licensor's facilities unless, prior to such access,
Licensee provides Licensor with the name and relevant information of the party
which would perform work on such a electrical transmission or communication
tower, which party must be pre-qualified by the AEP Entity and continue to
maintain such AEP approved status, to perform electrical work at or above the
maximum voltage normally carried by the conductors attached to such facilities
("Authorized Party"). All scheduled and unscheduled maintenance work needed by
Licensee upon Licensor's electrical transmission or distribution facilities
shall only be done by Licensor or through an Authorized Party.
In the event that there is an emergency, Licensee shall immediately report
to Licensor the need for such emergency service, and Licensee may contact
Licensor to work towards a mutual resolution to repair the Communications
Equipment. If an Authorized Party has been previously designated, Licensee
- --------------------------------------------------------------------------------
***** Certain information on this page has been omitted and filed
separately with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted portions.
7
<PAGE>
may, upon four- (4) hours notice, access the Premises through such Authorized
Party to perform the emergency restoration work.
10. PERMITTED USES & ACCESS. Licensee shall only use the Licensed Area for the
purpose of constructing, maintaining, replacing and operating the type of
Communications Equipment specified in Exhibit A. Such telecommunication
transmission and operation shall be conducted in accordance with the standards
imposed by the Federal Communications Commission, and any other applicable
local, state or federal body with authority over such transmission and
operation. Licensee shall use the Licensed Area for no other purpose without the
prior written consent of Licensor. Any use of the Licensed Area by Licensee
without the prior written consent of Licensor or in violation of any local,
state, or federal law shall, at Licensor's option be deemed a default of that
applicable SLA and give Licensor the right to terminate the SLA, except that
Licensor shall provide to Licensee by written notice a thirty (30) day period to
cure any violations which do not threaten the safety and operation of Licensor's
core business. If Licensee engages in any activity in violation of a permitted
use or of any applicable law and such activity jeopardizes the safety or
operation of Licensor's core business, then Licensor may terminate this Master
License Agreement and all SLAs immediately upon written notice to Licensee.
If necessary, Licensor shall provide keys or security devices or codes for
accessing the Site. If Licensor makes such keys or security devices available
to Licensee, Licensee shall not duplicate or disclose such keys or security
devices or codes and shall take all necessary precautions to prevent its
employees, agents, or representatives from duplicating any keys or security
devices or codes.
11. INSURANCE. Licensee and Licensee's contractors shall, at their own
expense, carry liability insurance reasonably acceptable to Licensor, which
shall protect Licensor and Licensee jointly and severally from any suit, claim,
or action which may arise from any accident or injury to any person (including
death) or damage to property, during the term of this Master License Agreement,
including any extension thereof. Licensor shall be listed as an additional
insured on such liability insurance policy. An approved certificate of such
insurance shall be furnished to Licensor's Department as identified in each SLA.
The amounts of insurance required under this Master License Agreement shall be
increased as Licensor may reasonably require from time to time provided that
such increase is based on industry-wide adjustment. Licensee acknowledges that
continued maintenance of the insurance requirements under the Master License
Agreement is a substantial and important part of the Master License Agreement
and that any lapse in insurance coverage shall be corrected so that coverage
will be in place during the entire term of this Agreement, with no gaps or
lapses in coverage. Upon commencement of this Master License Agreement, Licensee
and its contractors will procure and maintain public liability policies per Site
with limits of $1,000,000 per occurrence for bodily injury, $1,000,000 for
property damage, with a certificate of insurance to be furnished to Licensor
within 30 days of written request. Such policy will provide that cancellation
will not occur without at least 15 days prior written notice to Licensor.
Notwithstanding the foregoing, Licensee may, at its sole option, choose to be
self-insured and shall provide Licensor with such public non-confidential
information as reasonably requested by Licensor to prove adequate self-insured
funds. Licensee and Licensee's contractors shall also obtain and keep in force
statutory workers' compensation and employer's liability insurance and
automobile liability insurance in an amount not less than $1,000,000 combined
single limit for bodily injury and/or property damage. Such automobile insurance
will include coverage for all automobiles including hired and non- owned.
Licensee acknowledges that Licensor is self-insured.
8
<PAGE>
Licensor and Licensee release each other and their respective principals,
officers, directors, employees, representatives and agents, from any claims for
damage to any person or to the Site or to the Communications Equipment thereon
caused by, or that result from, risks insured against under any insurance
policies carried by the parties and in force at the time of any such damage.
Licensor and Licensee shall cause each insurance policy obtained by them to
provide that the insurance company waives all right of recovery by way of
subrogation against the other in connection with any damage covered by any
policy. Neither Licensor nor Licensee shall be liable to the other for any
damage caused by fire or any of the risks insured against under any insurance
policy required under this Master License Agreement.
12. FIRE OR OTHER UNAVOIDABLE CASUALTY. In the event a Tower or any part
thereof shall at any time during the term of this Agreement or any renewal
thereof be destroyed by fire or other casualty so as to be unfit for Licensee's
occupancy and intended use hereunder and the Tower cannot be restored or rebuilt
by Licensor within 120 days, the affected SLA shall, at the option of Licensee,
terminate and Rent for such SLA shall be abated for the unexpired portion of the
term of such SLA, effective as of the date of such casualty. Licensor shall
notify Licensee within 30 days of the date of casualty of whether (i) it can
restore the Tower within 120 days, and whether (ii) it will restore the Tower
within 120 days. If the Tower can be restored or rebuilt within 120 days,
Licensor shall, with reasonable diligence, restore or rebuild the Tower and the
rent payable hereunder during the period in which the Licensed Area are
untenable shall be abated. In the event a Tower, Licensor's equipment building,
Licensor's facilities or any part thereof shall at any time during the term of
this Master License Agreement or any renewal thereof be destroyed by fire or
other casualty caused by the negligence of Licensee, its employees, contractors
or subcontractors, the existing term of the affected SLA shall not terminate and
there shall be no abatement or adjustment in the rent due. Notwithstanding the
foregoing, in the event of any casualty, Licensor and Licensee shall work
together to immediately erect a temporary communications facility. Upon
restoration and repair of the Tower, Licensee, at its sole cost, shall remove
the temporary facility from the Site.
13. UTILITIES. Licensee shall be solely responsible for and promptly pay all
utility charges for electricity, telephone service or any other utility used or
consumed by Licensee on the Licensed Area. Licensor will allow Licensee use of
the existing electric power source to the Licensed Area, provided there is
sufficient power available for Licensee's operations and it is possible to have
Licensee's usage separately metered.
14. SUBLICENSING. Licensee shall not sublicense Licensee's rights hereunder or
otherwise permit attachment or colocation of any third party communication
equipment within any Licensed Area, unless such arrangement is authorized
pursuant to the applicable SLA. Upon any such authorization Licensee shall pay
additional rent as mutually agreed upon by the parties and set forth in the SLA.
15. ASSIGNMENT. Licensee shall not assign, sell or transfer Licensee's rights
under this Master License Agreement to any other person, partnership,
corporation or other governmental agency without the express written consent of
Licensor, which consent may be withheld in Licensor's sole and absolute
discretion. Notwithstanding the foregoing and provided that Licensee is not in
default under this Master Tower Agreement or any SLA or, if Licensor is in
default, that the successor party remedies such default, Licensor shall not
withhold its consent to assign this Master License Agreement, together with all
of Licensee's rights in all SLAs (whether by absolute assignment or collateral
assignment), to (i) any affiliate of Licensee, (ii) any partnership, venture or
new corporation formed by Licensee, (iii) to any party controlling, controlled
by or under common control with Licensee, or (iv) any party succeeding to
Licensor's interest as a result of a secured interest or upon acquiring fifty-
one percent (51%) or more of
9
<PAGE>
Licensee's stock or assets, provided such entity has the financial and technical
means to support Licensee's obligations hereunder and those obligations
contained within the SLAs and such entity accepts all outstanding liability of
Licensee. Any such assignee shall be deemed to have received all notices
provided prior to such assignment by Licensor to Licensee, including but not
limited to default notices, and Licensee shall remain a guarantor of all
Licensee obligations hereunder, unless specifically released by Licensor. Any
attempted assignment, sale or transfer of Licensee's rights under this Master
License Agreement in violation of this section shall render this Master License
Agreement null and void. No purported assignment, sublicense, sale or transfer
of Licensee's rights under this Master License Agreement, nor the acceptance of
a license payment by Licensor from a purported Licensee, shall release, relieve,
or in any manner modify the obligations of Licensee under the terms of this
Master License Agreement.
16. DEFAULT.
(a) Licensee Event of Default.
-------------------------
Each of the following events shall constitute a Licensee Event of Default
under this Agreement:
(1) Failure to Make Payments When Due.
---------------------------------
Licensee shall fail to pay any amount due and payable hereunder, whether at
its stated payment date or otherwise, which failure shall continue for a period
of ten (10) days after the receipt of written notice from Licensor describing
the delinquency of such payment;
(2) Breach of Covenant.
------------------
Licensee shall fail to perform or observe, in any material respect, any
term, covenant or agreement contained in this Master License Agreement on its
part to be performed or observed and fail to commence to cure such default
within thirty (30) days after receipt of written notice from Licensor describing
such default and thereafter diligently pursue such cure to completion; or
(3) Bankruptcy: etc.
----------------
Either Licensee shall generally not pay its debts as such debts become due,
or shall admit in writing its inability to pay its debts generally, or shall
make a general assignment for the benefit of creditors; or any proceeding shall
be initiated by or against Licensee seeking to adjudicate it as bankrupt or
insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver,
trustee, custodian or other similar official for it or for any substantial part
of its property and, in the case of any such proceeding instituted against it
(but not instituted by it), either such proceeding shall remain undismissed or
unstayed for a period of 120 days, or any of the actions sought in such
proceeding (including, without limitation, the entry of an order for relief
against, or the appointment of a receiver, trustee, custodian or other similar
official for it or for any substantial part of its property) shall occur; or
Licensee shall take any action to authorize any of the actions set forth above
in this subsection (3).
(b) Licensor Remedies for Licensee Default.
--------------------------------------
If a Licensee Event of Default shall have occurred and be continuing,
the parties agree that Licensor may, at its option, exercise any one or more of
the following rights, privileges and remedies:
(1) terminate the SLA for the Site where the Event of Default
occurred;
10
<PAGE>
(2) terminate this Master License Agreement and all SLAs entered into
pursuant to this Master License Agreement, if and only if an Event of Default
exists at more than three Sites or ten percent of the Sites, whichever is
greater;
(3) institute proceedings for the collection of all amounts payable
under this Master License Agreement for the affected Site(s), and enforce any
judgment obtained;
(4) suspend Licensee's access to climb or work on any Tower;
(5) remove or relocate Licensee's Communications Equipment at the
Site where the Event of Default occurred, all at Licensee's expense;
(6) decline to permit the installation of additional Communications
Equipment hereunder until such default is cured; and
(7) exercise any other rights and remedies that may be available at
law or in equity, including, but not limited to, any rights or remedies to
enforce the termination of this Agreement or any SLA.
No liability shall be incurred by Licensor because of any or all such actions.
The remedies provided herein are cumulative and in addition to any other remedy
available to Licensor under this Master License Agreement or otherwise. No such
termination, however, shall reduce or eliminate the obligation of the Licensee
to make an immediate payment of any amounts due to Licensor. In addition, no
such termination shall waive charges for the Communications Equipment beyond the
Master License Agreement term until said equipment is removed from Licensor's
Tower and shall not affect Licensee's Indemnification of Licensor contained in
Section 4, or the insurance requirements set forth in Section 11 hereof.
(c) Licensor Events of Default. Each of the following events shall
-------------------------
constitute a Licensor Event of Default under this Agreement:
(1) Failure to Make Payments When Due. Licensor shall fail to pay
---------------------------------
any amount due and payable hereunder, whether at its stated payment date or
otherwise, which failure shall continue for a period of ten (10) days after
written notice from Licensee to Licensor; or
(2) Breach of Covenant. Licensor shall fail to perform or observe,
------------------
in any material respect, any term, covenant or agreement contained in this
Master License Agreement on its part to be performed or observed and fail to
commence to cure such default within thirty (30) days after receipt of written
notice from Licensee describing such default and thereafter diligently pursue
such cure to completion; or
(3) Bankruptcy: etc. Either Licensor shall generally not pay its
----------------
debts as such debts become due, or shall admit in writing its inability to pay
its debts generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be initiated by or against Licensor seeking
to adjudicate it as bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, or composition of
it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order for relief
or the appointment of a receiver, trustee, custodian or other similar official
for it or for any substantial part of its property and, in the case of any such
proceeding instituted against it (but not instituted by it), either such
proceeding shall remain undismissed or unstayed for a period of 120 days, or any
of the actions
11
<PAGE>
sought in such proceeding (including, without limitation, the entry of an order
for relief against, or the appointment of a receiver, trustee, custodian or
other similar official for it or for any substantial part of its property) shall
occur; or Licensor shall take any action to authorize any of the actions set
forth above in this subsection (3).
(d) Remedies for Licensor Defaults. If a Licensor Event of Default shall
------------------------------
have occurred and be continuing, the parties agree that Licensee may, at its
option, exercise any one or more of the following rights, privileges and
remedies:
(1) terminate the SLA for the Site where the Event of Default
occurred;
(2) institute proceedings for the collection of all amounts payable
under this Master License Agreement, and enforce any judgment obtained;
(3) cause an Authorized Party to remove or relocate Licensee's
Communications Equipment, all at Licensor's expense;
(4) exercise any other rights and remedies that may be available at
law or in equity, including, but not limited to, any rights or remedies to
enforce the termination of the affected SLA.
No liability shall be incurred by Licensee because of any or all such actions.
The remedies provided herein are cumulative and in addition to any other remedy
available to Licensee under this Master License Agreement or otherwise. No such
termination, however, shall reduce or eliminate the obligations of the Licensor
to make an immediate payment of any amounts due to Licensee. In addition, no
such termination shall affect Licensor's Indemnification of Licensee contained
in Section 4, or the insurance requirements set forth in Section 11 hereof.
17. REMOVAL OF COMMUNICATIONS EQUIPMENT. Licensee shall remove the
Communications Equipment, as well as its fixtures, structures, buildings, signs
or other improvements, if any, placed upon a Tower or the Licensed Area within
thirty (30) days after an SLA expires or is terminated, whichever occurs first.
In performing such removal, Licensee shall restore the Site and Licensed Area
and any personal property and fixtures thereon to substantially as good a
condition as they were prior to the installation or placement of such equipment,
fixtures, signs or other improvements, reasonable wear and tear excepted, as
reasonably and objectively determined by Licensor. If Licensee fails to remove
such equipment, fixtures, signs or other equipment upon expiration of this
Master License Agreement, at Licensor's option, Licensee shall compensate
Licensor, on a monthly basis, for each month the Communications Equipment
remains on the Tower or Licensed Area after termination of this Master License
Agreement, at 125% the monthly rate at the time of termination, until such time
as the removal of the Communications Equipment is completed or Licensor may,
after written notice of not longer than sixty (60) days remove and dispose of
such equipment, fixtures, signs or other improvements and Licensee shall
reimburse Licensor for the actual and documented costs of such removal and
disposal.
18. FORCE MAJEURE. Neither party shall be liable for damages caused by its
failure to fulfill its obligations under this Master License Agreement due to,
occasioned by or in consequence of, any of the following causes or
contingencies, viz: acts of God, the elements, storms, hurricanes, tornadoes,
cyclones, sleet, floods, backwaters caused by floods, lightning, earthquakes,
landslides, washouts or other revulsions of nature, epidemics, accidents, fires,
failures of facilities, collisions, explosions, strikes, lockouts, differences
with workmen and other labor disturbances, vandalism, sabotage, riots, inability
to secure materials, supplies or equipment from usual sources, breakage or
failure of machinery, equipment,
12
<PAGE>
electrical lines or equipment, wars, insurrections, blockades, acts of the
public enemy, arrests and restraints of rules and people, civil disturbances,
acts or restraints of federal, state or other governmental authorities, acts or
failure to act of the parties and any other causes or contingencies not within
the control of the parties, whether of the kind herein enumerated or otherwise.
Settlement of strikes and lockouts shall be wholly within the discretion of the
party having the difficulty. Such causes or contingencies affecting performance
shall not relieve either party of liability in the event of its failure to use
reasonable means to remedy the situation and remove the cause with reasonable
dispatch.
19. LICENSOR'S AGREEMENT REGARDING CONSTRUCTION. Licensor acknowledges that
AEP Communications, LLC and ComNet ("Contractor") are, and shall continue to be,
Authorized Parties as defined in this Master License Agreement and that the
Contractors shall be permitted to perform certain construction services for
Licensee on selected Sites in accordance with the terms and conditions of the
Contractor's independent agreements with Licensee, at Licensee's option.
Licensee may submit the names of additional contractors for approval by Licensor
as authorized parties. Said approval shall not be unreasonably withheld or
delayed, provided such additional contractors have the technical and financial
means to safely perform the work requested of them.
20. ENVIRONMENTAL. Licensee will not during the term of this Master License
Agreement and any renewal periods thereof, contaminate the Licensed Area with
any hazardous substance, hazardous waste, or hazardous material. Licensee shall
assume all responsibility and/or liability for all contamination it creates or
has created and shall remediate any such contamination in accordance with all
applicable laws and regulations. Licensee agrees to defend and indemnify
Licensor against any and all such losses, liabilities, claims and/or costs
(including attorneys' fees and costs) arising from any breach of the covenants
contained within this section. The covenants of this section shall survive and
be enforceable and shall continue in full force and effect for the benefit of
either party and its subsequent transferees, successors and assigns throughout
the term of this Master License Agreement and any renewal periods thereof.
Licensor represents and warrants that to the best of its knowledge there are no
environmental hazards on any Site. Licensor shall assume all responsibility
and/or liability for all contamination it creates or has created and shall
remediate any such contamination in accordance with all applicable laws and
regulations. Licensor agrees to defend and indemnify Licensee against any and
all such losses, liabilities, claims and/or costs (including attorneys' fees and
costs) arising from any breach of the covenants contained within this section.
Nothing in this Master License Agreement or in any SLA will be construed or
interpreted to require Licensee to remediate any environmental hazards located
on any Site unless Licensee or Licensee's officers, employees, agents or
contractors place the environmental hazard on such site. Nothing in this Master
License Agreement or in any SLA will be construed or interpreted to require
Licensor to remediate any environmental hazards located on any Site unless
Licensor or Licensor's officers, employees, agents or contractors place the
environmental hazard on such site or unless required by applicable law.
21. RELOCATION/SUBORDINATION. This Master License Agreement is subject to the
right of Licensor, without liability to Licensee or its telecommunications
customers, to relocate, replace, sell in accordance with Section 25 hereunder or
change the location of any or all of its towers and attendant facilities when
Licensor determines that such Site is needed in connection with its business
operations in a manner which is incompatible with Licensee's continued use of
the Site or when Licensor intends to sell a Site because it is no longer needed
in connection with its business operations, but it is understood that (i)
Licensor shall give Licensee not less than six (6) months prior written notice
of such relocation, and (ii) Licensor shall use its good faith, best efforts to
relocate the Communications Equipment along with Licensor's Tower during the
term of this Master License Agreement, but such relocation will not guarantee or
preserve connectivity to all telecommunications customers of Licensee; provided,
however,
13
<PAGE>
that Licensee may elect not to relocate its Communications Equipment in which
case the SLA for such Site shall terminate with no further liability including
any obligation of Licensee to pay rent to Licensor, accruing to either party. In
any such case, Licensee shall not bear any costs of relocating the Tower, but
Licensee shall be responsible for the cost of relocating its Communications
Equipment. In the event that any such relocation is necessitated by the lawful
requirements of governmental authorities the parties shall each bear their own
share of the costs of restoring the Tower. Licensee shall be permitted to erect
and maintain a temporary tower at the old Site for a period of six months
following such relocation, provided such temporary tower does not violate the
terms of any sales agreement or land rights.
This Master License Agreement is and shall be subject and subordinate to
any and all permanent or building loan mortgages or deeds of trust covering the
License Area now existing or hereinafter made by the Licensor and to all
advances made or to be made thereon and to all renewals, modifications,
consolidations, replacements, or extensions thereof and the lien of any such
mortgage or mortgages shall be superior to all rights hereby or hereunder vested
in the Licensee to the full extent of the principal sum secured thereby and
interest thereon.
22. WAIVER. The failure of either party to enforce any terms or conditions of
this Master License Agreement shall not constitute a waiver of the same or other
terms and conditions or otherwise prevent or preclude such party from exercising
its rights or remedies hereunder, at law or in equity.
23. NOTICES. Any and all notices or other written Communications required or
permitted hereunder shall be in writing and mailed postpaid via United States
Certified Mail or reliable, receipted overnight courier service, as follows:
Licensor: American Electric Power Service Corporation, 1 Riverside Plaza,
Columbus, Ohio 43215, Attention: Pat McHugh.
Licensee: Triton PCS Property Company L.L.C., 9211 Arboretum Parkway, Ste.
200, Richmond, Virginia 23236.
24. REGULATION. Both parties acknowledge that prior to negotiation of this
Master License Agreement the parties carefully reviewed all relevant provisions
of state and federal statutes and regulations relating to the regulation of the
facilities licensed hereunder, and that the negotiations freely conducted herein
were undertaken without duress and with full knowledge of any rights either
party may have pursuant to such state or federal law. Both parties believe the
rental rates charged herein to be in compliance with any applicable state or
federal law. Each and every provision of this agreement is considered an
essential exchange of consideration hereto. Any deviation in the rate charged
herein from the calculation of such rate pursuant to any applicable state or
federal law imposed formula is a result of other negotiated concessions made
herein by the AEP Entities or Licensee. To the extent that either party may
challenge any provision of this agreement as violative of state or federal law
and is successful, then upon the sole option of the party to which such
determination adversely affects, this Master License Agreement and all SLAs
shall terminate effective as of such determination. Upon such termination both
parties shall enter into negotiations for a new agreement in compliance with
such determination. It is the intent of both parties that any adjustments made
pursuant to any such judicial or regulatory determination allow Licensor to
recover the maximum amount available in accordance with the applicable regulated
rate.
25. TRANSFER OF LICENSOR'S INTEREST. Licensor shall be liable under a SLA only
while the owner of a Site or Licensed Area. In the event that Licensor
voluntarily relinquishes control of the Site
14
<PAGE>
or Licensed Area and does not exercise other options under the terms of this
Master Agreement, Licensor shall require the new controlling party to assume the
obligations hereunder and under such SLA and perform all of the licensed
obligations thereunder. In the event the facility is involuntarily removed from
Licensor's control, Licensor will use its best efforts to have the SLA and this
Master License Agreement similarly transferred, subject to applicable laws. In
each of the foregoing events, the Licensor shall provide Licensee with the name,
address and phone number of the new controlling entity.
26. LIGHTING REQUIREMENTS. Licensor shall be responsible for compliance with
all marking and lighting requirements of the Federal Aviation Administration
("FAA") and the Federal Communications Commission ("FCC") provided that if the
requirement for compliance results from the Communications Equipment, Licensee
shall pay for such reasonable costs and expenses (including for any lighting
automated alarm system). Should Licensee be cited because the Site is not in
compliance and, should Licensor fail to cure the conditions of noncompliance,
Licensee may either terminate the affected SLA or proceed to cure the conditions
of noncompliance at Licensor's expense, which amounts may be deducted from the
Annual Base Rent next due.
27. MISCELLANEOUS.
Third Parties. This Master License Agreement shall not create for, nor
give to, any third party any claim or right of action against either party to
this Master License Agreement that would not arise in the absence of this Master
License Agreement.
Non-Disclosure. Except as required by law, regulation, or judicial or
administrative order, there shall be no disclosure of the terms of this Master
License Agreement and the parties shall execute a non-disclosure agreement in
substantially the form attached hereto as Exhibit B.
Personal License. This Master License Agreement grants a license only,
revocable or terminable under the terms or conditions herein, and no use,
however extended, of Licensor's Towers or payment of any fee or charge required
hereunder shall create or vest in Licensee any claim of right, possession,
lease, easement, title, ownership or other interest in real estate.
Nothing in this Master License Agreement shall be construed as a grant by
Licensor of an exclusive license, right or privilege to License, nor as a
limitation, restriction, or prohibition of any agreement which Licensor has made
or may, in the future, make. Licensor shall have and retain the right to
extend, renew or grant to others not party to this Master License Agreement any
right or privilege to use its Towers, except as limited by this Master License
Agreement. Nothing in this Master License Agreement shall be construed to
compel Licensor to construct, reconstruct, retain, extend, repair, place,
replace or maintain the Towers which, in Licensor's sole discretion, is not
needed for its own purposes. Licensor and its successors and assigns shall have
the right to operate, relocate and maintain its Towers system and attendant
facilities in such a manner as will best enable it, in its sole discretion, to
fulfill its service requirements. In the event Licensor opts not to restore or
repair any Tower, Licensee may terminate this Master License Agreement and/or
any relevant SLA and receive a rent abatement as provided in Section 12 hereof.
Liens and Encumbrances. If because of any act or omission of Licensee, any
mechanic's lien or other lien, charge, or order for the payment of money shall
be filed against any portion of the Licensed Area, the Licensee shall, at its
own cost and expense, cause the same to be discharged of record or bonded within
ninety (90) days. Licensee shall indemnify and hold harmless Licensor from any
loss,
15
<PAGE>
cost or expense arising from or incurred by Licensor as the result of Licensee's
breach of the foregoing covenants, which indemnities shall survive the
termination of this Master License Agreement.
No Joint Venture. Nothing in this Master License Agreement is intended to,
or shall be deemed to, constitute a joint venture, a partnership or agency
between the Licensee and Licensor.
Survivability. Neither termination nor cancellation of this Master License
Agreement or any authorization granted hereunder shall be deemed to relieve
either party of any obligations that by their nature survive such termination or
cancellation, including but not limited to all guarantees and promises of
indemnity.
Interpretation. The laws of the state where the relevant COMMUNICATIONS
Equipment under each SLA is located shall govern any controversy related thereto
or to any SLA involving such equipment.
Several Liabilities. The obligations, terms and conditions of the
Licensors under this Master License Agreement are several, not joint.
Headings. Section headings of this Master License Agreement are inserted
only for reference and in no way define, limit, or describe the scope or intent
of this Master License Agreement nor affect its terms or provisions.
Multiple Counterparts. This Master License Agreement may be executed in
one or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
Entire Agreement. This Master License Agreement and executed SLAs are the
entire agreement between the parties on the subject matter of this License and
supersede any prior or contemporaneous agreement or understanding between them.
No course of performance, usage of trade or course of dealing shall be relevant
to supplement or explain any term or condition in this Master License Agreement
or SLA. This Master License Agreement or any SLA may not be modified or amended
nor may any obligation of either party be modified, changed or discharged except
in writing signed by a duly authorized officer or employee.
Each party hereby represents and warrants to the other (i) it has full
right, power and authority to make this Master License Agreement and to enter
into any SLA and that the same have been voluntarily negotiated and agreed upon;
(ii) the making of this Master License Agreement and the performance thereof
will not violate any laws, ordinance, restrictive covenants or other agreements
under which such party is bound; (iii) that such party is a duly organized and
existing corporation or limited liability company; (iv) the party is qualified
to do business in any state in which the Site and Licensed Areas are located;
and (v) all persons signing on behalf of such party were authorized to do so by
appropriate corporate or partnership action.
Licensee and Licensor represent to each other that neither has had any
dealings with any real estate brokers or agents in connection with the
negotiation of this Master License Agreement.
16
<PAGE>
In Witness Whereof, the parties have caused this Master License Agreement
to be signed as of the date first above written.
WITNESS the following signatures:
LICENSOR:
Appalachian Power Company
_______________________________________ By:_______________________________
Name______________________________
_______________________________________ Title:____________________________
Date:_____________________________
LICENSEE:
Triton PCS Property Company L.L.C.
By Triton Management Company,
Inc., its Manager
By:_______________________________
Title:____________________________
Date:_____________________________
STATE OF OHIO
COUNTY OF FRANKLIN
This Master License Agreement was acknowledged before me on this _____ day
of __________________, 199___ by _______________________, _________________ of
Appalachian Power Company, for and on behalf of the corporation.
________________________________
Notary Public
Commission expires:_____________
17
<PAGE>
STATE OF__________
COUNTY OF_________
This Master License Agreement was acknowledged before me on this _____ day
of _______________, 1998 by ______________________, __________________ of Triton
Management Company, Inc., for and on behalf of the Company.
_________________________________
Notary Public
Commission expires:______________
18
<PAGE>
License No.____
Structure No.___
Exhibit A
SITE LICENSE AGREEMENT
Site License
Pursuant to the Master Tower License Agreement between Appalachian Power
Company, a Virginia corporation ("Licensor") and Triton PCS Property L.L.C., a
Delaware limited liability company ("Licensee"), the parties intend to bring the
following Licensed Area under the terms of the Master Tower License Agreement.
1. Site No./Name:____________________________________________________
2. Site Address: ____________________________________________________
3. Site Latitude and Longitude:_________________________________________
4. Annual Base Rent:
Additional Rent Costs:
5. Rental Commencement Date:
6. Term: See Master Tower Agreement, Section 2.
7. Special Access Requirements:
8. Legal Description:
9. Access Road:
10. Description of Communications Equipment and frequency at which it will be
operated:
11. Special Provisions:
12. Licensor Contact for Emergency:
13. Licensee Contact for Emergency:
LICENSEE: LICENSOR:
Triton PCS Property L.L.C. Appalachian Power Company
By: Triton Management Company, Inc.
By:________________________________ By:_____________________________
Title:_____________________________ Title:__________________________
Date:______________________________ Date:___________________________
19
<PAGE>
EXHIBIT 10.39
________________________________________________________________________________
MASTER SITE AGREEMENT
between
NEXTEL COMMUNICATIONS, INC.
and each of its wireless subsidiaries
and
TRITON PCS PROPERTY COMPANY L.L.C.
Dated as of April 17, 1998
________________________________________________________________________________
- --------------------------------------------------------------------------------
Confidential treatment has been requested for portions of this exhibit.
The copy filed herewith omits the information subject to the confidentiality
request. Omissions are designated as *****. A complete version of this exhibit
has been filed separately with the Securities and Exchange Commission.
<PAGE>
MASTER SITE AGREEMENT
---------------------
This Master Antenna Site License Agreement ("Agreement"), is entered
into this 17th day of April, 1998, between Nextel Communications, Inc., a
Delaware Corporation, together with its wireless communications subsidiaries and
affiliates which elect to participate in this License, (collectively "Nextel"),
and TRITON PCS PROPERTY COMPANY L.L.C., a Delaware limited liability company,
("Triton").
For good and valuable consideration the receipt and sufficiency of
which is hereby acknowledged, the parties hereto agree as follows:
1.A. Master License. This Agreement sets forth the basic terms and
conditions upon which Nextel shall license antenna sites to Triton and upon
which Triton shall license antenna sites to Nextel. For purposes of this
Agreement, Licensor shall be either Triton or Nextel and Licensee shall be
either Triton or Nextel as defined in the individual Site License. Upon the
parties' agreement as to the particular terms of any such license, the parties
shall execute and attach hereto a completed site license ("Site License") in the
form attached hereto as Exhibit A which is incorporated herein by this
reference. The terms and conditions of any Site License shall govern and control
in the event of a discrepancy or inconsistency with the terms and conditions of
this License.
1.B. Premises. (a) Licensor currently leases parcels of land (each
--------
individual parcel shall be referred to herein as "Land") and owns and operates
telecommunications towers (each individual tower shall be referred to herein as
"Tower") and communications equipment buildings or cabinets (each individual
equipment building or cabinet shall be referred to herein as "Enclosure")
located thereon as identified in the individual Site License (the Tower,
Enclosure and Land are collectively, the "Property"). The Land is more
particularly described in Exhibit 1 attached to each Site License. Licensor
hereby licenses to Licensee and Licensee licenses from Licensor the area of Land
identified on the Site License, and Licensor hereby licenses to Licensee and
Licensee licenses from Licensor space on the Towers (collectively, the
"Premises") and grants Licensee the right to install and maintain transmission
and utility wires, poles, cables conduits and pipes on the Property including
over, under or along a right-of-way extending from the nearest public right-of-
way to the Licensed Premises; said Licensed Premises and right-of-way for access
being substantially as described in Exhibit 2 annexed to each individual Site
License.
(b) Each of the Premises are a part of the same property leased to
the Licensor under an agreement pursuant to which Licensor has rights in and to
the Land (each such individual agreement shall be referred to herein as "Prime
Lease"). Each Prime Lease shall be attached to and made a part of each
individual Site License as Exhibit 4. Except as herein otherwise expressly
provided, or except as the terms of the Prime Lease may be in conflict with or
inconsistent with the terms herein provided or provided in each individual Site
License, all of the terms, covenants and provisions in the Prime Lease are
hereby incorporated into and made a part of each individual Site License as if
fully set forth therein; shall terminate as between Licensor and Licensee on the
effective date of termination of the Prime Lease, and Licensor shall have no
liability to Licensee therefor. Licensor shall give Licensee written notice of
such termination or expiration of the Prime Lease as provided herein or as soon
as practicable.
2. Use. The Premises may be used by Licensee for any activity in
---
connection with the provision of telecommunications services. Licensor agrees to
cooperate with Licensee, at Licensee's
<PAGE>
expense, in making application for and obtaining all licenses, permits and any
and all other necessary approvals that may be required for Licensee's intended
use of the Premises.
3. Tests and Construction. (a) Licensee shall have the right at any
----------------------
time following the full execution of the Site License to enter upon the Land for
the purpose of: making necessary engineering surveys, inspections, soil test
borings, other reasonably necessary tests and constructing the Licensee
Facilities (as defined in Paragraph 7 (a)); provided, however, such tests and
-
construction shall be at Licensee's sole cost and expense. Upon Licensee's
request, Licensor agrees to provide promptly to Licensee copies of all plans,
specification, surveys and tower maps for the Land or Tower in Licensor's
possession or available to Licensor. The tower map plan or similar document
shall include the elevation of all antennas on the Tower and the frequencies
upon which each antenna operates. Prior to installation of the Licensee
Facilities on the Tower, Licensee shall pay for any and all costs associated
with any structural analyses and modification(s) of the Tower and Licensor's
equipment thereon. In approving Licensee's plans, Licensor shall not be required
to approve any modification(s) to Licensor's equipment which would measurably
adversely affect or interfere with Licensor's operation.
(b) None of the Licensee Facilities shall be installed on the Tower
nor shall any construction pertaining to the Licensee Facilities commence until
Licensee has submitted its construction and installation plans, contractors and
subcontractors to Licensor in writing and such plans have been approved in
writing by Licensor. Licensor shall give such approval or provide Licensee with
its requests for changes within ten (10) working days after Licensor's receipt
of Licensee's plans or following receipt of any Tower analysis results, if
applicable. Licensee shall have the right to immediately terminate the Site
License if Licensor has not provided such approval or request for change within
twenty (20) days after such ten (10) working day period. Licensor shall not be
entitled to receive any additional consideration in exchange for giving its
approval of Licensee's plans. Licensee shall not alter any plans so approved
without following the same procedures. Licensee shall be responsible for
grounding all external and internal wiring and cabling installed by Licensee.
Licensee shall obtain Licensor's prior written approval of such grounding plans.
(c) Licensee shall provide all labor for the installation,
maintenance and repair of Licensee's antennas and related equipment on the
Tower, unless Licensor, it its sole discretion, elects to provide such labor, in
which case Licensee shall pay Licensor for such labor; provided, however, that
such labor costs shall be reasonable and that Licensor shall provide Licensee
copies of all bills and invoices for such work.
4. Term. (a) Site Licenses. The term of each individual Site License
----
shall be five (5) years commencing on the date Licensee begins construction of
the Licensee Facilities or that date which is ninety (90) days after execution
of the Site License ("Contingency Date"), whichever first occurs ("Commencement
Date") and terminating on the fifth anniversary of the Commencement Date
("Term") unless otherwise terminated as provided in Paragraph 10. Either
Licensor or Licensee, in its sole discretion, pursuant to the conditions set
forth in paragraphs 5 and 10 below, may terminate any Site License(s). Licensee
shall have the right to extend the Term for three (3) successive five (5) year
periods ("Renewal Terms") on the same terms and conditions as set forth herein.
The Site License shall automatically be extended for each successive Renewal
Term unless Licensee notifies Licensor of its intention not to renew at least
thirty (30) days prior to commencement of the succeeding Renewal Term. The
length of the Term and each Renewal Term of each Site License shall be subject
to the length of the Term of the Prime Lease and the Term or Renewal Term of
each Site License shall be coterminous with the term of the Prime Lease. It is
expressly understood that all rights granted to Licensee under this License are
irrevocable until the Site License expires or sooner terminates as provided in
this Agreement
2
<PAGE>
or each Site License. The termination of this License, its terms and conditions
shall survive and continue to govern with respect to any remaining Site Licenses
in effect until the termination of such Site Licenses.
(b) Master Site Agreement. The term of this Agreement shall be ten
(10) years beginning on the date hereof and ending on the tenth (10th)
anniversary of the date hereof, unless terminated earlier in accordance with the
terms hereof. This Agreement shall automatically renew for an additional term of
five (5) years unless terminated by either party in writing at least ninety (90)
days prior to the end of the initial term. The terms and conditions of this
Agreement shall survive and continue to govern with respect to any remaining
Site Licenses in effect at the termination of this Agreement.
5. Contingencies. Each Site License is subject to the following
-------------
contingencies:
(a) Licensee's ability to obtain all governmental licenses, permits
and approvals required of or deemed necessary or appropriate by Licensee for its
use of the Licensed Premises, including without limitation applications for
zoning variances, zoning ordinances, amendments, special use permits, and
building permits (collectively referred to as "Governmental Approvals");
provided that Licensee shall have the right, without obligation to do so, to
appeal any denial by a governmental agency and the contingency date for
obtaining Governmental Approvals; shall be extended until such time as a final
decision is rendered and is not the subject of any further appeal made or
defended by Licensee. Licensor agrees to make reasonable efforts to cooperate
with Licensee and join in any application for Governmental Approvals, provided,
however, that Licensor shall be reimbursed by Licensee for any of Licensor's
reasonable out-to-pocket costs associated with the foregoing; and
(b) Owner's consent to the Site License on the Owner's consent
attached hereto (and to each Site License) as Exhibit 6, provided such consent
is required pursuant to the Prime Lease.
(c) If either Paragraph 5 contingency is not satisfied or waived
within one (1) year from the date the Site License is fully executed (subject to
appeal and tolling of this contingency date pursuant to Paragraph 5 (a)),
Licensor may terminate this license on thirty (30) days notice without
liability.
6. Site License Rent.
-----------------
(a) Within fifteen (15) business days of the Commencement Date of
each Site License and on the first day of each month thereafter, Licensee shall
pay to Licensor the rent set forth on each individual Site License. Rent may be
negotiated for a particular Site License but shall not exceed ***** per month
attributed to the use of the Tower, and ***** per month attributed to the use of
the Enclosure and Land ("Rent"). In the event Licensee must separately pay rent
to a third party for use of the Enclosure or Land, the Rent shall be reduced and
shall not exceed ***** per month. The Rent shall be increased on each
anniversary of the Commencement Date by ***** of the prior year's rent. The rent
for any fractional month at the beginning or at the end of the Term or Renewal
Term shall be prorated. The Rent shall be payable to Licensor at the address
identified in the Site License.
If Licensee constructs a new tower or pole on the Land and said Land,
just prior to construction, did not contain an existing tower or pole or the
construction is not related to collocation or
- --------------------------------------------------------------------------------
***** Certain information on this page has been omitted and filed
separately with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted portions.
3
<PAGE>
co-development then all Rent shall abate for the first ten (10) years of such
Site License, provided, however, Licensor, shall own such tower or pole.
(b) In the event Licensor and the Owner agree to extend the term of
the Prime Lease for any Property which is the subject of a particular Site
License beyond its current expiration term (the "Additional Extension Term(s)"),
the Licensor shall provide the Licensee with written notice of the Additional
Extension Term(s) within thirty (30) days of the time that the Licensor and the
Owner have come to agreement on the Additional Extension Term(s) (the "Extension
Notice"). Licensee will have thirty (30) days from the receipt of the Extension
Notice to notify Licensor in writing, if it intends to reject the Additional
Extension Term(s). Unless Licensee sends such rejection notice of the Additional
Extension Term(s) within the time period set forth in the preceding sentence,
then the Additional Extension Term(s) shall be deemed automatically incorporated
in the extension terms contemplated in the particular Site License on the same
terms and conditions of this License and the Particular Site License, except
that the License Fee for such Additional Extension Term(s) under the particular
Site License shall be adjusted by the same dollar increase or decrease as the
rental fee under the Prime Lease for the Additional Extension Term(s). The
adjusted License Fee for additional Extension Term(s) shall be distributed
equally between Licensee and all co-locators to reflect the same dollar increase
or decrease as the rental fee under the Prime Lease.
7. Facilities; Utilities; Access.
-----------------------------
(a) Licensee, at its sole cost and expense, has the right to erect,
maintain and operate on the Premises (and as to utilities cable, conduit, etc.
specified areas at the Property) radio communications facilities, including
utility lines, transmission line, and air conditioned equipment shelter or
cabinets, electronic equipment, radio transmitting and receiving antennas and
supporting structures thereto ("Licensee Facilities"). In connection therewith
and subject to Paragraph 3(c) above, Licensee has the right to do all work
necessary to prepare, maintain and alter the Premises for Licensee's business
operations and to install transmission lines connecting the antennas to the
transmitters and receivers. All construction and installation work shall be
performed in a good and workmanlike manner. Title to the Licensee Facilities
shall be held by Licensee. Licensee Facilities shall remain Licensee's personal
property and are not fixtures. Licensee has the right to remove all Licensee
Facilities at its sole expense on or before the expiration or earlier
termination of the Site License; provided, Licensee repairs any damage to the
Property caused by such removal and subject to Paragraph 3(c) above.
(b) Licensee shall pay for the electricity it consumes in its
operation at the rate charged by the servicing utility company. Licensee shall
have the right to draw electricity, by submeter, and other utilities from the
existing utilities on the Property or obtain, at its sole cost and expense,
separate utility services from any utility company that will provide service to
the Property (including a standby power generator for Licensee's exclusive use).
Any easement necessary for such power or other utilities will be at a location
acceptable to licensor and the servicing utility company.
(c) Unless otherwise restricted by the terms of a Prime Lease,
Licensee, Licensee's employees, agents and subcontractors may enter on or across
the Land without notice to Licensor twentyfour (24) hours a day, seven (7) days
a week, at no charge to obtain entry to its Premises for the purpose of
constructing, installing, operating, maintaining and repairing those parts of
the Licensee Facilities that are ground-based. Such access shall be as shown on
Exhibit 2. Licensee shall not, without prior notice to and approval from
Licensor, perform or arrange to be performed for normally scheduled
installation, maintenance or repair of the Licensee Facilities on the Tower. Any
emergency installation,
4
<PAGE>
maintenance or repair of the Licensee Facilities on the Tower shall be performed
only with prior oral or written approval from Licensor.
8. Non-Interference.
----------------
(a) Each party agrees that it has performed adequate testing at the
Property or evaluated the operations of other occupants for interference with
its operation based upon the available information supplied by each party to the
other as to its own operations and, in the case of Licensor, other existing and
known potential wireless communications users at the Property and each party
agrees that the disclosed use or uses, as presently identified on Exhibit 5
attached hereto and made a part hereof and attached to and made a part of each
individual Site License, do not, if properly and lawfully operated, interfere
with such party's use of the Property.
(b) If any measurable adverse interference is caused by Licensor or
anyone now or in the future holding a Property interest from or under Licensor
due to improper or unlawful operations, or any subsequent change or addition of
equipment or improvements by Licensor or any such other holder on the Property,
Licensor agrees to the extent within Licensor's control, reasonably to cause the
elimination of same in a prompt and timely manner. If such measurable adverse
interference by Licensor or such other Property interest holder, or measurable
adverse interference by Licensee's Facilities with existing communications
equipment, cannot be eliminated within a reasonable length of time, but not to
exceed 48 hours after notice thereof for material interference and thirty (30)
days if otherwise measurably adverse, Licensor or Licensee, as the case may be,
shall cause the interference to cease except for brief tests necessary for the
elimination of the interference. In the event that such interference cannot be
eliminated within the time periods set forth in the previous sentence, Licensor
and Licensee acknowledge that such interference will cause irreparable injury,
and that Licensor or Licensee, as the case may be, in addition to all other
remedies available under this Agreement as it applies to the applicable Site
License, at law and/or at equity, shall have the right to bring an action to
enjoin the interference.
9. Taxes. Except as provided immediately below, Licensor shall pay all
-----
real property taxes it is obligated to pay under the Prime Lease. Licensee shall
reimburse Licensor for any increases in real property taxes which are assessed
as a direct result of Licensee's improvements to the land. As a condition of
Licensee's obligation to pay such tax increases, Licensor shall provide to
Licensee the documentation from the taxing authority, reasonably acceptable to
licensee, indicating the increase is due to Licensee's improvements.
10. Site License Termination.
------------------------
(a) Licensee acknowledges that Licensor currently operates a
communications facility at the Property. In the event Licensor's Prime Lease
with Owner terminates during the term hereof, and the applicable Site License
therefore terminates concurrently, Licensee may seek to purchase the monopole or
tower from Licensor at a reasonable cost to be mutually agreed upon between
Licensor and Licensee and agreed to by Licensor's applicable financing
institution. Licensee may also license or lease the Property directlyfrom the
Owner, if the Owner has so permitted or consents thereto. The parties
acknowledge and agree that the foregoing shall notbe deemed an option to
purchase or a right of first refusal to purchase the monopole or tower structure
or an encumbrance of any kind on the monopole or tower structure or restrict in
any way Licensor's or Licensor's successors or assigns' right to freely transfer
Licensor's monopole or tower structure so long as the transferee agrees to all
the terms and conditions of the within Agreement.
5
<PAGE>
(b) Each Site License may be terminated without further liabilityon
thirty (30) days prior written notice as follows: (a) by eitherparty upon a
default of any covenant or term hereof or of a Site License by the other party,
which default is not cured within sixty (60) days of receipt of written notice
of default, provided that the grace period for any monetary default is ten (10)
days from receipt of notice, and, provided further, that any nonmonetary default
which cannot be cured within such sixty (60) day period shall not be a default
hereunder so long as such defaulting party diligently proceeds to cure such
default upon receipt of notice thereof; or (b) by Licensee for any reason or for
no reason, provided Licensee delivers written notice of early termination to
Licensor no later than thirty (30) days prior to the Commencement Date; or (iii)
by Licensee or Licensor if it does not obtain or maintain any license, permit or
other approval necessary for the construction and operation of Licensee
Facilities; or (iv) by Licensee or Licensor if Licensee or Licensor is unable to
occupy and utilize the premises due to an action of the FCC, including without
limitation, a take back of channels or change in frequencies; or (v) by Licensee
if Licensee determines that the Premises are not appropriate for its operations
for economic or technological reasons, including, without limitation, signal
interference.
11. Destruction or Condemnation. If the whole or any substantial
---------------------------
part of the Property shall be taken by any public authority under the power of
eminent domain so as to interfere with Licensee's use and occupancy thereof,
then the Site License shall cease on the part so taken on the date of possession
of that part, and any Rent paid in advance of such date shall be refunded to
Licensee, and the Licensee shall have the right to terminate the Site License
upon written notice to Licensor, which notice shall be delivered within thirty
(30) days following the date notice is received of such taking. If Licensee
chooses not to terminate the Site License, the Rent shall be reduced or abated
in proportion to the actual reduction or abatement of use of the Premises.
12. Insurance.
---------
(a) Each party shall carry for each Site licensed pursuant to a Site
License hereunder during the term of the Site License, at its own cost and
expense, the following insurance: (i) "All Risk" property insurance which
insures the insuring party's property for its full replacement cost; and (ii)
Comprehensive general liability insurance with a commercial general liability
endorsement having a minimum limit of liability of $1,000,000, with a combined
limit for bodily injury and/or property damage for any one occurrence, and (iii)
excess/umbrella coverage of $2,000,000.
(b) Each party shall name the other as an additional insured under
its liability policy and require its insurance company to endeavor to give at
least thirty (30) days' written notice of termination or cancellation of the
policy to the additional insured. A certificate of such insurance, together with
such endorsement, shall be delivered to the additional insured within thirty
(30)days from the execution of each Site License and before the expiration of
any term thereof from an insurance company authorized to do business in the
state in which the Property is located.
13. Assignment and Sublicensing.
---------------------------
(a) Licensee may not assign, or otherwise transfer all or any part
of its interest in this Agreement or an individual Site License, or in the
Premises without the prior written consent of Licensor; provided, however, that
Licensee may assign or otherwise transfer such interest to its parent company,
any subsidiary or affiliate or to any successor-in-interest or entity acquiring
a controlling interest in its stock or assets. Licensor may assign or otherwise
transfer this Agreement or the Site License upon written notice to Licensee,
subject to the assignee or transferee assuming all of Licensor's obligations
herein or therein. Upon assignment or transfer of this Agreement or the Site
License in
6
<PAGE>
accordance with the terms of this paragraph, such party assigning or
transferring this Agreement or a Site License shall have no further rights or
obligations hereunder or thereunder.
(b) Notwithstanding anything to the contrary contained in this
Agreement or in a Site License, Licensee may assign, mortgage, pledge,
hypothecate or otherwise transfer without consent its interest in this Agreement
and each Site License to any financing entity, or agent on behalf of any
financing entity to whom Licensee (i) has obligations for borrowed money or in
respect of guaranties thereof; (ii) has obligations evidenced by bonds,
debentures, notes or similar instruments; or (iii) has obligations under or with
respect to letters of credit, bankers acceptances and similar facilities or in
respect of guaranties thereof.
14. Warranty of Title and Quiet Enjoyment. Licensor warrants with respect
-------------------------------------
to each Site License that: (i) Licensor leases the Land and owns or leases and
operates the Tower and the Enclosure located thereon and has rights of access
thereto; (ii) Licensor has full right to make and perform this Agreement; and
(iii) Licensor covenants and agrees with Licensee that upon Licensee paying the
Rent and observing and performing all the terms, covenants and conditions on
Licensee's part to be observed and performed, Licensee may peacefully and
quietly enjoy the Premises.
15. Maintenance and Repairs.
-----------------------
(a) Licensee shall perform all repairs necessary or appropriate to
keep Licensee's Facilities on or about the Licensed Premises or located on any
appurtenant rights-of-way or access to the Licensed Premises in good and
tenantable condition, reasonable wear and tear, damage by fire, the elements and
other casualty excepted.
(b) Licensor, at Licensor's sole cost and expense, shall maintain
the antenna structure, and any other portions of the Property and improvements
thereto to the extent required to be maintained by Licensor pursuant to the
Prime Lease, in good order and repair, wear and tear, damage by fire, the
elements and other casualty excepted. Damage resulting from the acts or
omissions of Licensee shall be repaired by Licensee, at Licensee's cost and
expense unless otherwise provided herein.
16. Miscellaneous.
-------------
(a) This Agreement constitutes the entire agreement and
understanding between the parties, and supersedes all offers, negotiations and
other agreements concerning the subject matter contained herein. Any amendments
to this Agreement must be in writing and executed by both parties.
(b) If any provision of this Agreement is invalid or unenforceable
with respect to any party, the remainder of this Agreement or the application of
such provision to persons other than those as to whom it is held invalid or
unenforceable, shall not be affected and each provision of this Agreement shall
be valid and enforceable to the fullest extent permitted by law.
(c) This Agreement shall be binding on and inure to the benefit of
the successors and permitted assignees of the respective parties.
(d) Any notice or demand required to be given herein shall be made
by certified or registered mail, return receipt requested, or recognized
overnight courier to the address of the respective parties set forth below:
Triton:
7
<PAGE>
Triton PCS Property Company L.L.C.,
9211 Arboretum Parkway,
Suite 200
Richmond, Virginia 23236
Attn.: Director of Engineering and Operations
With a copy to:
Triton Management Company, Inc.
101 Lindenwood Drive
Suite 125
Malvern, Pennsylvania 19355
Attn: President
Nextel:
[As designated in each Site License]
With a copy to:
Nextel Communications, Inc.
1505 Farm Credit Drive
McLean, Virginia 22102
Attn: Legal Department -
Contracts Manager
Licensor or Licensee may from time to time designate any other address for this
purpose by written notice to the other party.
(e) Each Site License and this Agreement as applied to that Site
License shall be construed in accordance with the laws of the county and state
in which the Site is located.
(f) Subject to any restrictions in the Prime Lease, Licensor
acknowledges that a Memorandum of Agreement in the form annexed hereto as
Exhibit 3 may be recorded by Licensee, at Licensee's option, in the Official
Records of the County where the Land is located. In the event the Land is
encumbered by a mortgage or deed of trust, Licensor agrees to assist Licensee in
obtaining a nondisturbance and attornment instrument for each such mortgage or
deed of trust. Further, Licensor agrees to assist Licensee in obtaining a non-
disturbance and attornment instrument with the owner of the Land.
(g) In any case where the approval or consent of one party hereto is
required, requested or otherwise to be given under this Agreement, such approval
or consent shall not be unreasonably delayed or withheld.
(h) All Riders and Exhibits annexed hereto form material parts of
this Agreement.
(i) This Agreement and each Site License may be executed in
duplicate counterparts, each of which shall be deemed an original.
8
<PAGE>
(j) Each party agrees and hereby waives, any claim for consequential
or incidental damages or lost property as to the other party.
17. Tower Marking and Lighting Requirements.
---------------------------------------
(a) With respect to each Site licensed hereunder, Licensor shall be
responsible for compliance with any applicable marking and light requirements of
the Federal Aviation Administration ("FAA") and the FCC provided that if the
requirement for compliance results from Licensee's Facilities, Licensee shall
pay for the reasonable costs and expenses thereof (including, for any lighting
automated alarm system). Should Licensee be cited because the Property is not
in compliance and, should Licensor fail to cure the conditions of noncompliance,
Licensee may either terminate the Site License, or, with prior written notice to
Licensor and allowing Licensor a reasonable opportunity to cure, proceed to cure
the conditions of noncompliance at Licensor's expense, which amounts may be
deducted from the Rent.
(b) If lighting requirements apply and a lighting automatic alarm
system has been installed by Licensor, Licensor shall allow Licensee to bridge-
in to the system to permit a parallel alarm or to install a second alarm (to the
extent permitted under the Prime Lease) if a bridge would interfere with
Licensor's alarm. Licensee shall be responsible for the cost and expense of
maintaining the bridge or parallel alarm. Notwithstanding anything in this
paragraph 17(b), the responsibility for compliance with FAA and FCC requirements
shall remain with Licensor as provided in Paragraph 17(a) above.
18. Indemnity.
---------
(a) Licensee shall exonerate, hold harmless, indemnify, and defend
Licensor from any and all claims, obligations, liabilities, costs, demands,
damages, expenses, suits or causes of action, including costs and reasonable
attorneys' fees, which may arise out of: 1) any injury to or the death of any
person; or 2) any damage to property, if such injury, death or damage arises out
of or is attributable to or results from the negligent acts or omissions Of
Licensee or Licensee's principals, employees or agents directly relating to
Licensee's use and operation of the Premises.
(b) Licensor shall exonerate, hold harmless, indemnify, and defend
Licensee from and against any and all liabilities, damages, costs and expenses
arising out of or resulting from the negligent acts or omissions of Licensor,
its agents, representatives or subcontractors or other occupants of the
Property, including without limitation, the failure of any such person or entity
to exercise due care with respect to the Licensee Facilities on the Premises or
the negligent interference of any person with the Licensee Facilities.
19. Waiver of Licensor's Lien.
-------------------------
(a) Licensor waives any lien rights it may have concerning the
Licensee Facilities which are deemed Licensee's personal property and not
fixtures, and Licensee has the right to remove the same at any time without
Licensor's consent.
(b) Licensor acknowledges that Licensee had entered into a financing
arrangement and may enter into additional financing arrangements in the future
including promissory notes and a financial and security agreement ("Financing
Agreement") for the financing of the Licensee Facilities ("Collateral") with a
third party or parties (the "Financing Entity"). In connection therewith,
Licensor (i) consents to the installation of the Collateral; (ii) disclaims any
interest in the Collateral, as fixtures or otherwise; and (iii) agrees that the
Collateral shall be exempt from execution, foreclosure, sale, levy,
9
<PAGE>
attachment, or distress for any Rent due or to become due and that such
Collateral may be removed at any time without recourse to legal proceedings.
Licensee agrees to notify Licensor in writing that Licensee has entered into the
Financing Agreement and of the identity of the Financing Entity.
20. Refusal to Deal. The refusal by either party to license or
---------------
sublicense, as applicable, a Site to the other party, for reasons unrelated to
capacity, zoning, permits, licenses and other required approvals, or
environmental issues with respect to a Site, shall be deemed a material breach
under this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.
TRITON PCS PROPERTY NEXTEL COMMUNICATIONS, INC.
COMPANY L.L.C.
By:________________________________
By: Triton Management Name:______________________________
Company, Inc., Manager Title:_____________________________
By:_____________________________ Date:______________________________
Name:___________________________
Title:__________________________
Date:
LICENSE NO._____________________ STRUCTURE NO.____________________
10
<PAGE>
EXHIBIT A
Site License
Pursuant to the Master Site Agreement between Nextel Communications,
Inc., a Delaware corporation, together with its wireless communications
subsidiaries and affiliates, (collectively "Nextel") and Triton PCS Property
Company L.L.C., a Delaware limited liability company, together with its wireless
--------------------------
communications subsidiaries and affiliates (collectively "Triton"). The parties
- --------------------------------------------------------
hereby agree that all of the terms and conditions of the above referenced Master
Site Agreement are incorporated herein by this reference.
1. Name of Licensor:
[Nextel subsidiary or Triton]
2. Name of Licensee:
[Nextel subsidiary or Triton]
3. Site No./Name:
4. Name of Licensee Affiliates:
5. Site Address: (street address and legal description - attach if necessary)
6. Site Latitude and Longitude:
7. Contingency Date:
8. Monthly Rent: [_____________]
9. Term: See paragraph 4 of License Agreement
10. Site Licensor-owned:___________ or Licensor-Leased: __________ If leased,
Term of Underlying Lease:
11. Special Access Requirements:
12. Existing Mortgages, etc.
13. Existing Environmental Issues:
14. Licensor Contact for Access for Emergency:
15. Licensee Contact for Emergency:
<PAGE>
16. Licensee's Address for Notice Purposes:
Licensor:
By:
Title:
Licensee:
By:
Title:
Date:
Attachments:
Exhibit 1: Description of Land
Exhibit 2: Description of Premises (including description of Equipment
Shelter/Room/Cabinet Location(s), Existing Liens, Rights-of-
Way, Easements and Mortgages)
Exhibit 3: Memorandum of Agreement
Exhibit 4: Prime Lease
Exhibit 5: RF Engineering and Current Communications Users of Site
(including frequencies)
Exhibit 6: Owner's Consent
<PAGE>
EXHIBIT 1
DESCRIPTION OF LAND
to the Agreement dated ______________, 199 ___, by and between
_________________________________, as ________________________. The Land is
described and/or depicted as follows:
and otherwise known as
A.P.N. or P.I.N. or Real Property Tax I.D. #:
<PAGE>
EXHIBIT 2
DESCRIPTION OF PREMISES
to the Agreement dated _________________, 199___, by and between
______________________________, as _____________________. The Premises is
described and/or depicted as follows:
Notes:
- -----
1. This Exhibit may be replaced by a land survey of the Premises once it is
received by Licensee.
2. Setback of the Premises from the land's boundaries shall be the distance
required by the applicable governmental authorities.
3. Width of access road shall be the width required by the applicable
governmental authorities, including police and fire departments.
4. The type, number and mounting positions and locations of antennas and
transmission lines are illustrative only. Actual types, numbers, mounting
positions may vary from what is shown above, subject to Licensor's approval
as provided in Paragraph 3 of the License.
5. This Exhibit is to include any plans for routing lines, utility wires, etc.
on or across the Property.
<PAGE>
EXHIBIT 3
MEMORANDUM OF AGREEMENT
-----------------------
This Memorandum of Agreement is entered into on this _____ day of
__________________, 199 _____, by and between ____________________________, a
_____________ corporation, with an office at ________________________________,
(hereinafter referred to as "Licensor") and ________________, a _______________
corporation, with an office at _______________________,(hereinafter referred to
as "Licensee").
1. Licensor and Licensee entered into an Antenna Site License Agreement
("Agreement") on the _____ day of _____________, 199___, for the purpose of
installing, operating and maintaining a radio communications facility and
other improvements. All of the foregoing are set forth in the Agreement.
2. The term of the Agreement is for __________ (____) years commencing on
_______________, 199___ and ending on ______________, with three (3)
successive _______________ (_____) year options to renew. If all options
to renew are exercised, the term of this Agreement will expire twenty (20)
years after the Commencement Date (as defined in the Agreement).
3. The Land which is the subject of the Agreement is described in Exhibit 1
annexed hereto. That portion of the Land being leased to Licensee
("Premises") is described in Exhibit 2 annexed hereto.
IN WITNESS WHEREOF, the parties have executed this Memorandum of
Agreement as of the day and year first above written.
LICENSOR LICENSEE
By: By:
Name: Name:
Title: Title:
Date: Date:
<PAGE>
STATE OF
COUNTY OF
On _________________, before me, _________________________, Notary
Public, personally appeared _____________________, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person whose name
is subscribed to the within instrument and acknowledged to me that he executed
the same in his authorized capacity, and that by his signature on the
instrument, the person, or the entity upon behalf of which the person acted,
executed the instrument.
WITNESS my hand and official seal.
Notary Public
(SEAL)
My commission expires:
<PAGE>
STATE OF
COUNTY OF
On __________, before me, ______, Notary Public, personally appeared
__________________________, personally known to me (or proved to me on the basis
of satisfactory evidence) to be the person whose name is subscribed to the
within instrument and acknowledged to me that he executed the same in his
authorized capacity, and that by his signature on the instrument, the person, or
the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
Notary Public
(SEAL)
My commission expires:
<PAGE>
EXHIBIT 4
PRIME LEASE
to the Agreement dated _______________, 199__, by and between
______________________________________________, as Licensor, and
________________________________________, as Licensee.
The Prime Lease is attached hereto.
<PAGE>
EXHIBIT 5
RF ENGINEERING
LICENSOR FREQUENCIES:
- --------------------
setup:
alpha face:
beta face:
gamma face:
LICENSOR's TENANT FREQUENCIES:
- -----------------------------
setup:
alpha face:
beta face:
gamma face:
LICENSOR's FREQUENCIES:
- ----------------------
setup:
alpha face:
beta face:
gamma face:
OTHER KNOWN FREQUENCIES ON PROPERTY:
- -----------------------------------
<PAGE>
EXHIBIT 6
OWNER'S CONSENT
FOR GOOD AND VALUABLE CONSIDERATION (as defined below) PAID BY LICENSEE TO
OWNER, OWNER HEREBY AGREES AND CONSENTS TO THE FOREGOING LICENSE AGREEMENT,
INCLUDING BUT NOT LIMITED TO THE USES, RIGHTS-OF-WAY AND OTHER RIGHTS AND
RESPONSIBILITIES THEREIN GRANTED TO LICENSEE. THE EXTENT OWNER'S CONSENT OR
APPROVAL IS REQUIRED PURSUANT TO THE LICENSE AGREEMENT, OWNER HEREBY AGREES THAT
SUCH CONSENT OR APPROVAL SHALL NOT BE UNREASONABLY WITHHELD OR DELAYED.
Consideration, as used herein, shall mean the following:
<PAGE>
EXHIBIT 10.40
LEASE AGREEMENT
BETWEEN
TRITON PCS COMPANY L.L.C
AND
VIRGINIA ELECTRIC AND POWER COMPANY
THIS AGREEMENT, made this 9th day of April, 1998, between VIRGINIA
ELECTRIC AND POWER COMPANY, a Virginia public service corporation with its
principal office in Richmond, Virginia ("Lessor") and
TRITON PCS PROPERTY COMPANY L.L.C.
a Delaware Limited Liability Company
with its principal office located in Malvern, Pennsylvania ("Lessee").
WHEREAS, Lessor owns and operates certain telecommunications towers
and structures and electric transmission poles, towers and other structures
(collectively, the "Facilities") within its certificated service territory in
the Commonwealth of Virginia; and,
WHEREAS, Lessor owns or otherwise has a possessory interest in land
upon which its Facilities are located (the "Premises"); and
WHEREAS Lesseee is licensed to operate a wireless communications
system ("PCS) within Lessor's certificated service territory in the Commonwealth
of Virginia; and,
WHEREAS, Lessee desires to lease space on Lessor's Facilities and
Premises to install, use, operate, maintain, repair and replace certain of
lessee's PCS antennas and associated equipment for the purpose of operating a
communications facility; and,
WHEREAS, Lessor is willing to lease to Lessee portions of the Premises
and related Facilities to permit Lessee to locate its equipment on Lessor's
Facilities and/or Premises for such purposes pursuant to the terms and
conditions of this Lease;
NOW THEREFORE, in consideration of the above Recitals which are
incorporated herein, and the mutual covenants and agreements set forth below,
the parties agree as follows:
1. LEASE OF FACILITIES SPACE
a. For each separate pole, tower, structure or ground location owned or
controlled by Lessor at which Lessee wishes to locate its equipment, Lessee will
submit to Lessor in writing, in advance, an application in a form approved by
Lessor ("Application. ")
i. The Application will specify and describe the equipment to be
installed, the description of the specific location on the Facilities or at
the Premises at which the equipment is to be installed, the proposed date
of installation and any special requirements for such installation.
ii. Lessor will, not more than sixty (60) days after its receipt of
such Application, notify Lessee in writing whether such Application has
been approved. If approved, Lessor will
- --------------------------------------------------------------------------------
Confidential treatment has been requested for portions of this exhibit.
The copy filed herewith omits the information subject to the confidentiality
request. Omissions are designated as *****. A complete version of this exhibit
has been filed separately with the Securities and Exchange Commission.
1
<PAGE>
specify any special conditions or requirements imposed upon such
installation and an estimate of the costs to be incurred by Lessor in
connection with the installation specified in such Application.
iii. Lessee will indicate acceptance of and agreement to such
estimated costs and the special conditions or requirements, if any, by
initialing the notice and returning it to Lessor along with the first
installment of the rental fee set forth herein within ninety (90) days of
its receiving such Application from Lessor; provided, however, that Lessee
may extend such ninety (90) day period for subsequent thirty (30) day
periods by giving written notice to Lessor; and further provided that
Lessee may not extend such period or periods for more than twelve (12)
calendar months from the date the Application is received from Lessor.
Failure of Lessee to return such Application to Lessor along with the
rental fee or to give written notice of such extensions to Lessor within
the periods allowed in the previous sentence shall be deemed a withdrawal
of the application and a failure to agree to the special conditions, if
any.
iv. All written Applications when finally agreed upon by both parties
will be attached to and become a part of this Lease and Lessee's rights
hereunder she extend only to the equipment and locations described therein,
subject to the terms of this Lease.
v. All Applications for attachment to towers, poles or structures
will be processed in accordance with the procedures set forth in Exhibit A
which is attached to and made a part of this Lease. Lessor may change such
procedures by giving Lessee thirty (30) days written notice of such change.
b. Lessor hereby leases to Lessee and Lessee leases from Lessor space on
the Facilities and/or Premises identified in the approved Applications attached
to this Lease.
Subject to the terms conditions of this lease, lessee shall have the non-
exclusive right to install, use, operate, maintain, repair, and replace at such
locations its PCS antennas, feedline and associated transmitters, receivers,
cables, equipment cabinets and other equipment indentified in each Application
(collectively the "Equipment.") all such Equipment shall remain the personal
property of Lessee subject to any valid lien of the Lessor.
c. Lessee shall have the exclusive right to occupy the specific space
described in the Applications (each such specific space being referred to as a
"Site")-provided, however, that Lessor shall have the right to require Lessee to
relocate its Equipment to a different space on the same Facilities or to a new
space on different structures when, in the exercise of Lessor's own sole
discretion such relocation is necessary to preserve the safety or integrity of
Lessor's Facilities (or the facilities of third parties attached to such
structure pursuant to an agreement with Lessor that was in effect prior to the
effective date of this Agreement.) Lessee shall have the right to refuse to
accept the new space so proposed. If such new location is unacceptable to
Lessee, Lessee shall have the right to terminate this Lease as to the Equipment
at the original location. Lessor shall refund any rent paid (pro rated on a
daily basis) for the period after the date of such termination; provided,
however, that Lessee shall not be entitled to such refund if the proposed
relocation is to a different space on the same structure. In the event of
relocation pursuant to this paragraph, Lessee shall be responsible for the costs
of relocating the Equipment.
d. As to all Equipment installed at each Site within Lessor's
certificated service territory, Lessee shall purchase its requirements for
alternating current (AC) electric power necessary to operate
2
<PAGE>
the Equipment from Lessor under a separate agreement and at Lessor's applicable
terms and rates.
e. Lessee acknowledges that Lessor may have heretofore entered into, and
may in the future enter into, agreements with other parties for the joint use of
the Facilities and/or Premises. This Lease and Lessee's occupation of the space
on the Facilities and at the Premises is subject to the attachment rights of
such other parties under such agreements. Except as provided in paragraph 11. a,
nothing herein shall be construed as affecting rights or privileges previously
or subsequently conferred by Lessor, by contract or otherwise, to others not
parties to this Lease, to use the Facilities or Premises, and Lessor reserves
the right to grant, continue, and extend such rights or privileges.
f. No use, however extended, of the Facilities or Premises under this
Lease shall create or vest in Lessee any ownership rights in said Facilities or
Premises, but Lessee's rights therein shall be and remain a mere lease. Nothing
herein shall be construed to require Lessor to maintain any of the Facilities or
locations for a period longer than required by Lessor's own service
requirements.
2. TERM
a. The term of this Lease shall be for a period of five (5) years
beginning on the date that appears on the first application that is submitted by
Lessee to Lessor hereunder (the "Lease Term.") This Lease may be renewed in
writing by Lessee for four (4) additional five (5) year terms (each a "Renewal
Term") so long as Lessee is not in default as set forth in paragraph 8, hereof
and so long as Lessee gives Lessor notice of such renewal sixty (60) days in
advance of the expiration of the then current term.
b. Lessee may terminate this Lease as to any Site in the case of the
Lessee's loss of frequency, permits, easement rights or right-of-way or for any
other reason that renders the Site unusable for Lessee's facilities. Lessee
shall give Lessor notice of such termination and the reason therefor. The Lease
payment for any terminated Site shall be refunded to Lessee pro rated on a
calendar month basis from the first day of the month following the date of such
termination to the next anniversary date of the commencement of the Lease Term.
3. RENTAL FEES
a. The rental fee shall be the sum of the annual rent for each Site as
set forth in each approved Application attached to this Lease- provided,
however, that the rent for the first calendar year for any Site for which
Application is made after the date of execution of this Lease shall be pro rated
on a calendar month basis (including any part of a month) from the date the
Application is approved by both parties to the anniversary date of the
commencement of the Lease Term. Lessee shall be obligated to pay the rental fees
for each Site occupied during any part of the Lease Term.
b. Lessee shall pay to Lessor an annual rent ("Rent") for each Site as
follows: (i)***** for each Site located in the City of Alexandria, the counties
of Arlington, Fairfax, Loudon and Prince William or the cities or towns located
therein; and, (ii)***** for all other Sites located within Lessor's service
territory. Lessor may, in its sole discretion, increase the Rent for each Site
annually on the anniversary date of the commencement of the Lease Term by giving
Lessee ninety (90) days written notice of such increase in advance. Such annual
increase may not exceed the increase in the rates (as annualized) for "Radio &
Television Communication Equipment (NSA)" (Commodity Code II 7602) as reflected
in the Producer Price Index published by the U.S. Department of Labor, Bureau of
Statistics or successor index.
- --------------------------------------------------------------------------------
***** Certain information on this page has been omitted and filed
separately with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted portions.
3
<PAGE>
c. Lessee shall be entitled to deduct a discount of ***** of the annual
rental fee from the annual rent for each Site upon which Lessor has not erected
Facilities.
d. Except as otherwise provided herein, rent shall be payable annually in
advance in U. S. dollars on the anniversary date of the commencement of the
Lease Term without demand or notice- provided, however, that if the total annual
rent is ***** or more, Lessee shall have the option to pay such rent
semiannually in equal amounts, with the second payment due to Lessor not later
than ***** days after the due date of the first payment.
e. Lessee shall make all rental payments by check payable to the order of
Virginia Electric and Power Company and mailed to Lessor's authorized
representative identified in paragraph 15, below. Each check shall bear the
notation "[LESSEE- PCS LEASE]." Lessor shall have the right to assign any or all
rent installments to any other party, in its sole discretion. In such event,
Lessor shall give Lessee no less than thirty (30) days written notice of such
assignment and shall provide Lessee with instructions for payment of the rent so
assigned.
No reduction in rent nor refund of any portion of rental fees shall be
due Lessee on account of removal of any item of Equipment by Lessee during the
Lease Term as provided in paragraph 2 I.b.
4. COSTS AND FEES
a. Lessor shall pay, on Lessee's behalf all costs, fees and expenses Lessor
incurs in connection with the physical installation of the Equipment on the
Facilities and shall invoice Lessee therefor for applications that are being
reviewed for approval or disapproval. Lessee shall reimburse Lessor for all such
costs and expenses so incurred within thirty (30) days after the date of said
invoice. If any such reimbursement is not paid when due, Lessor shall notify
Lessee of such delinquency in writing. Lessor shall be entitled to interest
thereon at the rate of ***** per month for any month or portion thereof that the
invoice remains unpaid. If any such reimbursement remains unpaid for thirty (30)
days after the date of Lessee's receipt of the written notice of delinquency, it
shall constitute a default under this Lease and Lessor may, in its sole
discretion, terminate this Lease immediately by giving written notice to Lessee.
For all sites that have been approved by Lessor and Lessee, Lessee shall provide
Lessor with a check in the amount of the estimated construction costs provided
within the application and the performance bond as described in paragraph 21.c.
along with two executed approved applications.
b. Lessee shall reimburse Lessor for all actual costs incurred by Lessor
in connection with any alteration, modification, strengthening or replacement of
Lessor's Facilities when the costs of such alteration, modification,
strengthening or replacement are incurred because of the installation of the
Equipment and would not have been incurred if the Equipment were not installed
on the Facilities.
c. All costs, fees and expenses associated with the installation of the
Equipment other than those described in paragraphs 4.a and 4.b,above, including
without limitation permit fees, costs of obtaining additional rights-of-way, if
any, surveys, structural analyses and engineering studies shall be the paid
directly by Lessee.
d. If either party institutes legal action to collect any sum due it
under this Lease, then, in addition to the relief granted, the party to whom
relief is granted (or, in the case of settlement, the party
- --------------------------------------------------------------------------------
***** Certain information on this page has been omitted and filed
separately with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted portions.
4
<PAGE>
that recovers any portion of the sum sued for) shall be entitled to recover from
the other party all of its costs and expenses of such legal action including
without limitation attorneys' fees and costs (including costs and fees of
appellate proceedings).
5. ACCESS TO THE FACILITIES
Lessee shall have access to the Facilities twenty-four (24) hours per
day, seven (7) clays per week for purposes of installation, operation, use,
maintenance, repair, inspection, removal and replacement of the Equipment under
the following conditions:
a. As to any Equipment located on a structure that is not designed for
the transmission of electricity and as to Equipment located at a height lower
than ten (10) feet above ground level on any structure that is designed for the
transmission of electricity, Lessee may exercise such right of access using its
own employees or the employees of contractors that have been previously approved
by Lessor. Approval of such contractors shall not be unreasonably withheld or
delayed. Lessee and its contractors shall not, under any circumstance, have
physical access to any Equipment located at or higher than ten (10) feet above
ground level on any structure that is designed for the transmission of
electricity. Any service requiring access to Equipment installed at or higher
than ten (10) feet on such structure will be provided by Lessor at Lessee's
expense. The charge for such services shall be in accordance with the
"Maintenance Fees and Costs Schedule" attached as Exhibit B, which is a part of
this Lease.
Lessor may amend the fee schedule contained in Exhibit B once each
calendar year by no more than the increase (as annualized) in the "Wage Rate For
Transportation and Utilities" published by the United States Department of
Labor, Bureau of Labor Statistics. Lessor shall provide Lessee with thirty (30)
days notice of such increase, if any, in writing and shall attach a copy of such
amendment to this Lease.
b. In providing service to the Equipment pursuant to paragraph 5.a,
above, Lessor shall be entitled to give first precedence to servicing its own
facilities and equipment. Any delay in providing service to the Equipment caused
by giving such precedence shall not constitute a breach of this Lease or a
default hereunder. Subject to the provisions of this paragraph 5.b, Lessor
agrees to use its reasonable efforts to provide emergency service within twenty-
four (24) hours of such request and to provide non-emergency service within five
(5) days of such request. For purposes of this paragraph 5.b an "emergency" is
considered to be damage to the Equipment such that Lessee may not provide any
PCS services from the Site at which the Equipment is located.
c. Lessee shall keep a log of each instance wherein Lessee or its
employees, agents or contractors enter the Premises upon which the Facilities
are located. Lessee shall provide a copy of such log to Lessor within twenty-
four (24) hours after receiving a request therefor from Lessor.
d. Lessee's right to install, operate, use, maintain, repair, inspect,
remove and replace the Equipment, to have access to the Facilities or the
Premises upon which the Facilities are located may only be exercised by Lessee's
employees, agents, contractors and subcontractors who have been previously
approved in writing by Lessor; provided, however, that Lessee shall have to
obtain such written authorization once for each employee, agent, contractor or
subcontractor. Lessor' shall have the right, in its sole discretion, to revoke
such authorization by giving written notice to Lessee. Such revocation shall be
effective upon receipt of such notification by Lessee.
5
<PAGE>
6. ALTERATIONS BY LESSEE
a. Subject to the provisions of paragraph 5 of this Lease, Lessee may
make minor alterations, modifications, additions and/or improvements upon or to
the Facilities (collectively, "Improvements") and may install such fixtures
("Fixtures") as Lessee may deem necessary to its operation of the Equipment on
the Facilities, provided Lessor has given Lessee prior written approval for such
Improvements and Fixtures and their location. As to any such Improvements and
Fixtures that are to be installed not higher than ten (10) feet above ground
level on any structure that is designed for the transmission of electricity or
at any height on any structure that is not designed for the transmission of
electricity, Lessor shall not unreasonably withhold, delay or condition such
approval. As to any Improvements or Facilities to be installed higher than ten
(10) feet above ground level on any structure that is designed for the
transmission of electricity, Lessor shall have the right to withhold such
approval in its sole discretion. Lessee shall not be obligated to obtain
Lessor's approval to replace or repair previously approved Equipment, Fixtures
and Improvements installed not higher than ten (10) feet above ground level on
any structure for the transmission of electricity or at any height on any
structure that is not designed for the transmission of electricity, provided
such replaced Equipment, Improvements or Fixtures are of equal or similar size
and quality. All materials used in such Improvements and all Fixtures and
Equipment installed by Lessee shall remain the personal property of Lessee,
subject to any liens of Lessor.
b. All Improvements and Fixtures so approved shall be installed,
maintained, and removed by Lessee's qualified personnel in a good and
workmanlike manner and shall be in compliance with all building codes and
regulations. Approved Improvements and Fixtures shall in no way harm the
structural integrity of the Facilities and Lessee shall not cause or permit any
liens to attach to the Facilities by reason of such Improvements and Fixtures.
Lessor reserves the right, before approving any Improvements or Fixtures, to
require Lessee to furnish such additional indemnification against liens, costs,
damages and expenses as Lessor may reasonably require. In addition to the rental
fees specified in this Lease, Lessee shall fully reimburse Lessor for all sums
which Lessor may be required to pay as taxes on account of the Equipment,
Improvements and Fixtures. Upon written request, Lessor agrees to furnish proof
of such increase to Lessee.
7. INGRESS AND EGRESS
a. During the Lease term, Lessee and its employees and contractors shall
have the right of ingress and egress over the property of Lessor upon which the
Facilities are located for the purpose of installing, maintaining, repairing and
replacing the Equipment.
b. Lessee, its employees and contractors shall have the right of ingress
and egress over the property of Lessor upon which the Facilities are located
while any Application is pending for the purpose of Site inspection and testing.
8. DEFAULT
a. Default in Payment of Rent. If any installment of rent is not paid
when due, Lessee shall pay Lessor interest on such installment at the rate of
one and one-half per cent (1.5%) per month. If any installment of rent remains
past due and unpaid for thirty (30) days after the due date it shall constitute
a default and Lessor may, at Lessor's sole option, terminate this Lease by
giving written notice to Lessee, provided, however, that:
6
<PAGE>
i. For the first instance of default in the payment of rent, Lessor
shall not be entitled to terminate this Lease until it gives Lessee written
notice of such default and allows Lessee five (5) business days from the
receipt of such notice to cure such default by the payment of rent in cash
or by certified or cashier's check. If such default is not cures within
such five (5) day period, the lease shall be automatically terminated
without further action by Lessor.
ii. For any subsequent default in the payment of rent, Lessor shall
not be obligated to give any notice of default nor allow Lessee a period of
time within which to cure such default. Termination shall be effective as
specified in the notice, but not earlier than three (3) days after notice
is received by Lessee.
iii. Termination for default pursuant to the provisions of this
paragraph 8.a shall not constitute a waiver of Lessor's right to receive
the full rent nor any other right or remedy Lessor may have under this
Lease.
b. Other Defaults. Except as otherwise provided herein, if either party
--------------
fails to comply with any of the provisions of this Lease, other than those
provisions concerning payment of rent, and shall fail within thirty (30) days
after written notice from the non-defaulting party to correct such
noncompliance, such failure shall constitute a default and the non-defaulting
party may terminate this Lease by giving written notice to the other. Such
termination shall be effective as specified in the notice but not earlier than
three (3) days following the defaulting party's receipt of such notice.
Termination pursuant to the provisions of this paragraph shall not constitute a
waiver of the non-defaulting party's right to receive the full rent or other sum
nor of any other right or remedy the non-defaulting party may have under this
Lease. In the event of Lessor's termination pursuant to the provisions of this
paragraph Lessee shall not be entitled to any proportionate refund of any rent
already paid.
9. VACATION OF FACILITIES
a. Upon termination or expiration of this Lease, Lessee shall remove all
of its Equipment, Improvements and Fixtures not subject to paragraph 5.a from
the Site and shall repair and restore the Facilities an/or Premises to the
condition such Facilities and/or Premises were in prior to installation of the
Equipment, Improvements and Fixtures, normal wear and tear excepted. Lessee
shall coordinate all such work through Lessor's designated representative and
Lessee shall perform such work in a good and workmanlike manner. If not so
removed within 60 days following termination or expiration of this Lease, Lessor
shall have the right to remove the Equipment, Improvements and Fixtures not
subject to paragraph 5.a and repair and restore the Facilities and/or Premises
to their original condition, reasonable wear and tear excepted, at Lessee's
expense and without obligation to account to Lessee for any Equipment,
Improvements or Fixtures so removed.
b. All Equipment, Improvements and Fixtures subject to the limitations in
paragraph 5.a shall be removed and made available to Lessee within ninety (90)
days following the expiration or termination of this Lease in whole or as to any
Site. At such terminated Site or Sites, the Facilities and/or Premises will be
restored to the condition they were in prior to the installation of such
Equipment, Improvements and Fixtures, normal wear and tear excepted, by Lessor
or Lessor's representatives under Lessee's direction and at Lessee's expense.
Lessee's rights to its Equipment, Improvements and Fixtures subject to the
limitations in paragraph 5.a shall not be effected by Lessor's inability or
failure to remove such Equipment, Improvements and Fixtures within the ninety
(90) day period.
7
<PAGE>
10. MARKING OF EQUIPMENT
At its sole expense, Lessee shall attach identification markers to all
of its Equipment, Improvements and Fixtures. Each such marker shall be of a
distinctive and uniform design and shall be clearly visible and recognizable.
11. NON-INTERFERENCE AND QUIET ENJOYMENT
a. Lessee shall install, use, operate, maintain, repair and remove
Equipment, Improvements and Fixtures at the Sites in such a manner as not to
conflict or interfere in any manner, whether electrically or otherwise, with the
equipment and operations of Lessor or any other party using or having a prior
right to use the Facilities and/or Premises. In the event Lessee's equipment
causes such interference, Lessee will take all steps necessary to correct and
eliminate the interference. Lessor agrees that any future tenants of the
property will be permitted to install only such radio equipment that is of the
type and frequency that will not cause measurable interference whether
electrically or otherwise, with the equipment and operations of to Lessee. In
the event any such tenant's equipment causes such interference, Lessor will see
that the tenant causing such interference will take all steps necessary to
correct and eliminate the interference.
b. So long as Lessee shall have committed no act of default or any act or
omission which, with the giving of notice or passage of time would constitute an
act of default hereunder and upon paying the rent and performing covenants,
Lessee shall peaceably keep and quietly have, hold and enjoy the leased Sites
free from interference by Lessor or any party lawfully claiming by, through or
under Lessor.
12. SAFETY
a. All work performed by the Lessee and its authorized representatives at
the Sites shall be performed in accordance with Lessor's safety rules and
requirements. A single violation of Lessor's safety rules and requirements by
Lessee or its representatives shall be cause for immediate exclusion of Lessee's
personnel from the Facilities. A second or subsequent violation of Lessor's
safety rules and requirements shall constitute a default under the provisions of
paragraph 8 Default. Failure by Lessor
b. Any equipment or appliances installed by Lessee hereunder, if any,
shall be installed and maintained in accordance with the requirements of the
applicable edition of the National Electrical Safety Code, the National
Electrical Code, Lessor's standards and any building code applicable thereto, to
exclude Lessee's personnel from the Facilities or terminate this Lease for
default for a violation of Lessor's safety rules and requirements shall not
constitute a waiver of Lessor's right to exclude personnel or terminate for
default for a subsequent safety violation. In case of termination for default
pursuant to the provisions of this paragraph, Lessee shall not be entitled to
any refund of prepaid rental fees. Copies of Lessor's safety rules and
requirements have been provided to Lessee under separate cover and receipt
thereof by Lessee is hereby acknowledged. Lessor reserves the right to change
its safety rules and requirements at any time by giving Lessee thirty (30) days
written notice thereof.
c. Except for backup batteries and hazardous or toxic materials allowed
by permit or government regulation to be used upon the Premises by Lessee, which
such use upon the Premises is consented to in writing by Lessor, Lessee shall
not, at any time, introduce or store upon the Premises any material designated
pursuant to any law, rule, regulation or ordinance as flammable, explosive,
hazardous or toxic (either in its original form or as waste upon disposal.)
Backup batteries shall be enclosed in seated containers. the introduction,
maintenance, removal and disposal of such batteries shall
8
<PAGE>
be in accordance with all laws, rules and regulations applicable thereto. Lessee
shall indemnify and hold Lessor harmless from and against all costs, expenses
and damages (including clean-up and remediation costs) arising from the presence
of such batteries on the Premises. Lessee shall indemnify and hold Lessor
harmless from and against all costs, expenses and damages (including clean-up
and remediation costs) arising from the presence of any material designated as
flammable or hazardous or toxic (either in its original form or as waste upon
disposal) when such presence is caused by Lessee or by a third party on its
behalf Except as provided in this paragraph, Lessee shall not, at any time,
permit or cause its employees, agents or contractors to bring material
designated as hazardous or toxic (either in its original form or as waste upon
disposal) upon the Premises at any time. Breach of the provisions of this
paragraph will constitute a default under this Lease and, notwithstanding the
provisions of paragraph 8.b, Lessor may immediately terminate this Lease.
d. Lessor will be responsible for all obligations of compliance with any
and all environmental laws, including any regulations, guidelines, standards or
policies of any governmental authorities regulating or imposing standards of
liability or conduct with regard to any environmental conditions in effect from
time to time, that are or were in any way related to activity now or formerly
conducted in, on or in any way related to the Site, unless such conditions are
caused by the activities of the Lessee or its Equipment.
13. GROUND POTENTIAL RISE PROTECTION
Lessee shall provide, at its sole expense, ground potential rise protection
equipment at every location where Lessee, in its sole discretion, determines
there is a need therefor. Lessor shall have no responsibility for determining
the need for such equipment and no liability for any damage to the Equipment
caused, in whole or in part, by a failure to provide ground potential rise
protection.
14. PERMITS AND LICENSES
a. Lessee warrants that it has or will obtain prior to the installation
of the Equipment on the Facilities and will maintain at all times during the
term of this Lease, and all renewals and extensions thereof, all licenses,
permits, rights (including but not limited to licenses, easements or other
appropriate agreements from the owners of lands upon which the Equipment will be
located), variances or other approvals which, under the laws, rules, regulations
or ordinances of any federal, state or local government, Lessee may be required
to hold in order to construct, install, use, operate, maintain, repair, replace
and remove its Equipment on the Facilities.
b. At Lessee's request, Lessor shall cooperate with Lessee in obtaining,
at Lessee's sole expense, all such licenses, permits, rights, variances and
other approvals.
c. In the event Lessor, because of the construction, installation, use,
operation, maintenance, repair, replacement or removal of the Equipment on
Lessor's Facilities, is required to obtain or maintain any license, permit,
right, variance or other approval, Lessee shall reimburse Lessor for all of
Lessor's costs and expenses associated therewith.
15. NOTICES AND REPRESENTATIVES
a. Notices. Any notice required or permitted to be given in writing
-------
hereunder shall be valid when delivered personally, given by telegram or
facsimile with written confirmation copy following, or mailed by certified or
registered mail, return receipt requested, to the authorized representative of
the
9
<PAGE>
other party. The date of receipt of such notices sent by mail, except for
confirmatory notices, shall be the date the notice shall be deemed to have been
given. When speed of notice is essential, written notice shall be preceded by
other appropriate communication. Notices shall be given to the following
authorized representatives at the following addresses:
Lessor:
Mr. David W. Roop
Transmission Lines Manager
Virginia Power
2400 Grayland Avenue
Richmond, Virginia 23220-5260
Lessee:
Triton PCS, Inc.
101 Linden Drive, Ste 125
Malvern, Pennsylvania 19355
Attention: President
Either party may, by written notice to the other, change the representative or
address to which notices shall be sent.
b. Lease Administration. Lessor's authorized representative, designated
--------------------
in the preceding paragraph, shall be responsible for the administration of this
Lease and is authorized to execute, on Lessor's behalf, all documents necessary
in furtherance thereof. Said representative, however, is not authorized to
execute amendments to this Lease made pursuant to paragraph 26.j, below.
16. INDEMNITY
a. Lessee agrees to indemnify, save harmless and, at Lessor's sole
option, defend Lessor and Lessor's directors, officers and employees from and
against all claims, demands, damages, costs, losses, liabilities, expenses,
attorneys' fees including attorneys' fees through the appellate level, in any
manner arising out of, resulting from, caused by or in connection with the
installation, presence, use, operation, maintenance, repair or removal of
Equipment, Improvements or Fixtures by, or any act or omission of, Lessee, its
subcontractors and suppliers of any tier, on or in the vicinity of the
Facilities, including, but not limited to personal injury or death to persons
and damage to Lessor's or Lessee's property or facilities, or the property of
any other person including Lessor's or Lessee's employees. Lessee's obligation
to indemnify Lessor pursuant to this paragraph specifically includes (but is not
limited to) any claims, demands, damages, losses, liabilities, expenses and fees
arising out of Lessee's breach of the provisions of paragraph 12.c of this
Lease. But nothing herein shall be construed as making Lessee liable for any
injuries, deaths or damage caused by the sole negligence of Lessor, its
employees, contractors or other tenants that have equipment installed at the
location.
b. Lessor agrees to indemnify, save harmless and, at Lessor's sole
option, defend Lessee and Lessee's directors, officers and employees from and
against all claims, demands, damages, costs, losses, liabilities, expenses,
attorneys' fees including attorneys' fees through the appellate level arising
out of or resulting from the sole, negligent acts or omissions of Lessor or
Lessor's principals, employees or contractors on the Premises including, but not
limited to personal injury or death to persons and
10
<PAGE>
damage to Lessee's property or facilities, or the property of any other person
including Lessor's or Lessee's employees.
17. INSURANCE
a. Policies and Coverages. Prior to the arrival of Lessee's employees,
----------------------
agents or sub- contractors at any location, Lessee shall obtain and maintain,
and require its subcontractors to obtain and maintain, the following policies of
insurance during the performance of any work at the Facilities:
i. Workers' compensation insurance for all employees in all states
where work is performed and any other states where the employees performing
the work or any portion thereof are normally employed and applicable
employers' liability insurance.
ii. Commercial general liability insurance with bodily injury and
property damage combined single limits of at least $1,000,000 per
occurrence. Such insurance shall include, but not be limited to, specific
coverage for contractual liability encompassing the indemnity provisions in
Paragraph 16 Indemnity, personal injury liability, products/completed
---------
operations liability, and, where applicable, explosion, collapse,
underground hazards coverage and watercraft (protection and indemnity)
liability.
iii. Automobile liability insurance with bodily injury and property
damage combined single limits of at least $ 1, 000, 000 per occurrence
covering vehicles owned, hired or non-owned.
iv. Umbrella or excess liability insurance with a single limit of
$1,000,000 per occurrence in excess of the employer's liability, commercial
general liability and automobile liability policies.
The amounts of insurance required above may be satisfied by Lessee's
purchasing primary coverage in the amounts specified or by Lessee's buying a
separate excess umbrella liability policy together with lower limit primary
underlying coverage. The structure of the coverage is at Lessee's option, so
long as the total amount of insurance meets Lessor's requirements.
The coverages required in paragraphs 17.a.ii, 17.a.iii and 17-a.iv above should
be "occurrence" form policies. If said coverages are written on a "claims- made"
form instead of an occurrence form, Lessee shall arrange for adequate time for
reporting losses. Failure to do so shall be at Lessee's sole risk.
Lessee will require its insurers to waive, to the fullest extent permitted by
such insurers, all rights of recovery against Lessor, its directors, officers
and employees, whether in contract, tort (including negligence and strict
liability) or otherwise.
b. Endorsements. Lessee and its authorized subcontractors and assignees
------------
shall cause their insurers to amend their commercial general liability and, if
applicable, umbrella or excess liability policies with the following
endorsements 1, 2, and 3. Worker's compensation and automobile liability
policies shall be amended with endorsement 3:
i. "Virginia Electric and Power Company, its directors, officers
and employees are additional insureds under this policy" ;and
ii. "This insurance is primary with respect to the interest of
Virginia Electric and
11
<PAGE>
Power Corn any, its directors, officers and employees, and any other
insurance maintained by them is excess and not Contributory with this
insurance"; and
iii. "Notwithstanding any provision of the policy to the contrary,
this policy may not be canceled, non-renewed or materially changed by the
insurer without giving thirty (30) days prior written notice to Virginia
Electric and Power Company. All other terms and conditions of the policy
remain unchanged."
c. Insurance Certificates. Before starting work at any Site, Lessee
----------------------
shall cause its insurers or agents to complete, sign and forward to Lessor a
certificate of insurance evidencing the coverages and limits required by this
Article. Failure of Lessor to receive certificates of insurance does not,
however, relieve Lessee of the requirements of this Article. Failure to obtain
the insurance coverage required by this Article shall in no way relieve or limit
Lessee's obligations and liabilities under any other provisions of this Lease.
18. LIMITATION OF LIABILITY
Except as otherwise provided herein, Lessor shall not be liable to
Lessee for any losses, claims or liabilities for any interruption to service of
Lessee- for interference with the operation of Lessee's Equipment; for Lessee's
loss of use of property or facilities, costs of capital, loss of profits or
revenues, additional expenses incurred in constructing or operating facilities,
costs of repair or clean-up costs; for the claims of any customer of Lessee; or
for any special, incidental, indirect or consequential loss or damage
whatsoever, arising in any manner out of this Lease.
19. COMPLIANCE WITH LAWS
Lessee shall comply with all federal, state and local laws, rules,
regulations and ordinances applicable to its performance hereunder. If fines,
penalties or legal costs are assessed against Lessor by any government agency or
court due to Lessee's noncompliance with such laws, rules, regulations or
ordinances, Lessee shall indemnify and hold harmless Lessor against any and all
losses, liabilities, damages, claims and costs suffered or incurred because of
the failure of Lessee to comply therewith. Lessee shall reimburse Lessor for any
and all legal or other expenses, including attorneys' fees through the appellate
level, reasonably incurred by Lessor in connection with such losses,
liabilities, damages or claims.
20. ASSIGNMENT AND SUBLETTING
Lessee shall not assign this Lease or any part hereof or transfer or
sublet any part of the privileges granted hereunder without the Lessor's prior
written consent. Any such assignment, transfer or sublease without Lessor's
prior written consent shall be void. Notwithstanding the foregoing, Lessors
prior consent shall not be required, nor shall or the Lessor have the right to
cancel this Lease if Lessee assigns or subleases this any interest herein to any
corporation, partnership or other entity which (1) is controlled by, controlling
or under common control with Lessee; or (ii) shall merge or consolidate with or
into Lessee-, or (iii) shall succeed to all or substantially all the assets,
property and business of the Lessee- provided, however, that Lessee shall be
required to give notice in writing to Lessor of such assignment within thirty
(30) days of the date thereof and shall require such assignee or sub-lessee to
acknowledge and agree to the terms of this Lease in writing within the same
period.
12
<PAGE>
21. WAIVER OF LIENS
a. Lessee waives, and shall require its subcontractors and suppliers of
any tier to waive, any and all liens and claims, and the right to file and
enforce or otherwise assert any such liens and claims, against Lessor or
Lessor's property or facilities in connection with Equipment, Improvements or
Fixtures or work done at the Facilities. Lessee shall include and shall require
its subcontractors or suppliers to include this lien waiver provision in all
agreements with subcontractors and suppliers. Notwithstanding the foregoing,
Lessee contemplates financing the purchase of certain equipment and the
institution financing such purchase may require a security interest in the
Equipment. Any liens associated with such financing transactions shall be
permitted hereunder and shall not constitute a breach of this paragraph 2 1. a.
b. If any liens or claims are filed or asserted against Lessor or the
Premises or the Facilities in connection with this Lease, Lessee shall promptly
discharge or remove any such lien or claim by bonding, payment or otherwise and
shall notify Lessor promptly when it has done so. Lessee assumes all liability
for, and will indemnify, protect, save and hold harmless Lessor and Lessor's
directors, officers and employees, from and against all such liens and claims.
So long as Lessee shall not be in default hereunder nor have committed an act
which with the giving of notice or passage of time would constitute a default,
Lessee shall have the right to remove its Equipment at any time without Lessor's
consent.
c. Lessee will, prior to the attachment of any of its Equipment at a Site,
for each such Site, furnish to Lessor a performance bond covering its faithful
performance under this Lease to remove its Equipment, Improvements and Fixtures
in the event of termination or expiration of this Lease and the payment of all
obligations associated therewith. Such bond will be in the amount of ***** for
each Site and in a form and with a surety or sureties satisfactory to Lessor, in
its sole discretion. In the event that Lessee elects to provide Lessor with the
bond described in this paragraph, Lessor will, upon receipt of such bond, waive
any lien.
22. REGULATORY CHANGES
In the event that a governmental agency has authority to regulate the
charges for, and conditions of, Facilities usage such as that described in this
Lease, or acquires such authority subsequent to the effective date of this
Lease, then this Lease shall be subject to regulation by such governmental
agency ("Regulatory Change"). In such event, this Lease shall be modified but
only to the extent necessary to comply with such regulations. Any provision of
this Lease not subject to regulation shall remain in full force and effect. The
parties recognize that this Lease in its entirety provides benefits to both
parties and, should any such Regulatory Change affect the benefits of either
party, the parties agree to renegotiate to restore the relationship of the
benefits to each party that existed prior to the Regulatory Change. If the
parties cannot agree on changes that would restore such relationship, either
party shall have the right to terminate this Lease upon sixty (60) days written
notice to the other party. In case of such termination, as of the effective date
of termination Lessee shall be entitled to a refund of prepaid rental fees, pro-
rated on a daily basis for the remainder of the period covered by such payment.
23. REGULATORY PROHIBITION
Both parties recognize that governmental or regulatory authorities
having jurisdiction over Lessor or the services and activities contemplated by
this Lease, including but not limited to the Virginia State Corporation
Commission, may take action which prevents Lessor from performing its
obligations under this Lease. If any court, governmental or regulatory authority
for any reason prevents
- --------------------------------------------------------------------------------
***** Certain information on this page has been omitted and filed
separately with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted portions.
13
<PAGE>
Lessor in any manner from performing its obligations under this Lease, Lessor
may, by written notice to Lessee, immediately terminate this Lease without
obligation or liability to Lessee, except for obligations and liabilities
arising from any prior breach of this Lease. Such termination shall be effective
upon the date specified in Lessor's notice, but in no event earlier than
Lessee's receipt of Lessor's notice.
24. DAMAGE OR DESTRUCTION BY CASUALTY
If during the term of this Lease the Facilities are damaged or
destroyed by fire, flood, windstorm, strikes, riots, acts of public enemy, acts
of God, or other casualty, so that the Facilities are rendered wholly unfit for
the purposes described herein, and if the Facilities cannot be repaired within
180 days from the -time of such damage or destruction, or if Lessor in its sole
discretion chooses not to repair the Facilities, then, as to the Site located on
such Facilities, this Lease shall terminate as of the date of such damage or
destruction. In such case, Lessee shall be entitled to a refund of prepaid
rental payment, pro-rated on a dairy basis from the termination date to the end
of the period covered by such rental payment.
25. SALE OF TELECOMMUNICATIONS STRUCTURES
If Lessor decides to sell or abandon a facility and/or a Premises upon
which the Lessee has antenna radio equipment, then the Lessee, along with all
other tenants (lessees) of said location, shall have the equal opportunity to
purchase facility and/or Premises through a bid/auction process. Terms and
conditions of the sale, including status/rights of the tenants at the location,
shall be set by Lessor prior to solicitation of offers.
26. MISCELLANEOUS
a. GOVERNING LAW. This Lease and the rights of the parties hereunder
-------------
shall be governed by, construed and enforced in accordance with the laws of the
Commonwealth of Virginia. This Lease shall be deemed to have been executed in
Virginia regardless of the actual place of signing or the actual place of
performance.
b. EXHIBITS, ATTACHMENTS, ETC. All exhibits referred to in this Lease and
--------------------------
any addenda, attachments, and schedules which may, from time to time, be
referred to in any duly executed amendment to this Lease are, by such reference,
incorporated in this Lease and shall be deemed to be a part of this Lease.
c. NON-WAIVER OF RIGHTS. The failure of Lessor to demand strict
--------------------
performance of the terms of, or to exercise any right conferred in, this Lease
shall not be construed as a waiver or relinquishment of its right to assert or
rely upon any such term or right in the future, or a consent to any continuing
or subsequent failure or breach.
d. SEVERABILITY. In the event any provision, or any part or portion of
------------
any provision of this Lease shall become or be declared unlawful, invalid, void
or otherwise unenforceable, the rights and obligations of the parties shall be
reduced only as much as is required to remove the unenforceability.
e. SURVIVAL. Neither completion of performance nor any termination or
--------
cancellation of this Lease shall be deemed to relieve either party of any
obligations hereunder that by their nature survive completion of performance,
including but not limited to all warranties, guarantees, promises of indemnity,
and confidentiality obligations.
14
<PAGE>
f. RELATIONSHIP OF THE PARTIES. This Lease does not and shall not be
---------------------------
construed to establish a partnership, joint venture or other form of business
association between Lessor and Lessee.
g. HEADINGS. Article and paragraph headings contained herein are inserted
--------
for convenience and shall have no effect on interpretation or construction of
this Lease.
h. PUBLICLY. No information relative to this Lease shall be released by
--------
either party for publication, advertising or for any other purpose without the
prior written approval of Lessor.
i. SUCCESSORS AND ASSIGNS. This Lease shall be binding on the parties
----------------------
hereto and their directors, officers, employees, agents, successors and assigns.
j. CONFIDENTIALITY. Lessee and Lessor agree to refrain from disclosing
---------------
this Lease or any part thereof to any third party, except as may be required by
a court, government agency or pursuant to a proper discovery request. If either
party is required to disclose this Lease or any part thereof, such party shall
use its best efforts to insure that such disclosure is made on a confidential
basis and shall promptly notify the other party of such disclosure.
k. MODIFICATION. No amendment or modification of this Lease shall be
------------
valid unless in writing and executed by the duly authorized representatives of
both parties.
l. ENTIRELY. This Lease embodies the entire agreement between Lessor and
--------
Lessee with respect to the subject matter hereof and supersedes any prior or
contemporaneous agreement or understanding between the parties. The parties
shall not be bound by or be liable for any statement, representation, promise,
inducement or understanding of any kind or nature not set forth or provided for
herein. No prior course of dealing, usage of trade or course of performance " be
used to supplement or explain any term, condition or instruction used in this
Lease, nor be deemed to effect any amendment.
IN WITNESS WHEREOF, the parties have caused their duly authorized
representatives to execute this Lease on the date first written above.
TRITON PCS PROPERTY COMPANY L.L.C. BY TRITON MANAGEMENT
COMPANY, INC.
VIRGINIA ELECTRIC AND POWER COMPANY
Vice President
Bulk Power Delivery
15
<PAGE>
APPLICATION PROCESS FOR ANTENNA USE ON LESSOR'S TRANSMISSION OR
TELECOMMUNICATIONS STRUCTURES
Site Selection (5 to 10 Days)
- ----------------------------
EXHIBIT A
APPLICATION PROCESS FOR ANTENNAS USE ON LESSOR'S TRANSMISSION OR
TELECOMMUNICATIONS STRUCTURES
Site Selection (5 to 10 days)
- ----------------------------
Lessee will identify those geographical areas where it wants to use
Lessor's transmission or communication structures for its communications
equipment and will fax the attached "Request for Site Survey Form" to the
designated contact person to coordinate a field survey. It is understood that
the Lessee will perform the field survey with a Lessor representative present.
It is further understood that Lessee will notify Lessor at least three (3) days
prior to any anticipated field survey and will reimburse Lessor for the time
spent on all field surveys, whether or not the related Application is approved
by Lessor.
The purpose of the field visit will be to identify the actual
locations that meet Lessee and Lessor's requirements. Also, the field visits
will identify a viable alternative, if any, which exists in the targeted area so
that if Lessee is unable to secure any necessary authority for installing
equipment and/or site access either from the target landowner or any
governmental authority, Lessee will be prepared to move to a different site that
meets its objectives. In addition, issues such as equipment cabinet locations,
feedline routes, proposed height and configuration of antenna system, Ac power
service, grounding and site access and safety can be discussed, as appropriate
to the nature of the structure and the location. It is understood that the field
survey constitutes a preliminary site selection and that the lessor may reject
any site in its direction
Technical Approval (30 to 60 Days)
- ---------------------------------
After the field survey is completed, Lessee will mail two (2) original
Applications using a form substantially similar to the example attached to these
procedures, to Lessor indicating its proposed plans for the targeted area. The
application will include the Antenna Site Construction information form which
includes specific information for Telecommunications and Transmission Facility
requests.
Lessor will, following the receipt of the Application and completion
of structural analysis, notify Lessee whether or not the equipment proposed for
installation at the specific site is acceptable. In the case of lattice type
Telecommunications structures, Lessor will provide lessee with tower
manufacturer's file number, current and planned (reserved) tower loading
information, and tower analysis criteria so that Lessee can complete a
structural analysis, at its cost, to determine whether structure can support
proposed communications equipment. Situations where Lessor designed and/or
installed foundations for lattice type Telecommunications structures, Lessor
will, after structural analysis is completed and copies provided to Lessor,
evaluate foundations to determine if any foundation modifications will be
required, and if so, identify associated modification costs.
In the case of transmission structures in which the Lessor does not
own the land or have the right to grant site access, and if Location is
acceptable, Lessee will secure an agreement from the
16
<PAGE>
underlying landowner for Lessee's proposed installation. Lessor will cooperate
with Lessee in providing information as it relates to agreements Lessor has with
the underlying landowner, and title information as to sites which the Lessor
owns.
The agreement from the underlying landowner, if such must be obtained
in accordance with the procedures, will contain the technical specification of
the proposed installation including equipment cabinets dimensions and location,
AC power and telephone service drop details, any other site improvements, and
site access requirements. The agreement will state Lessee's intentions and
rights on the landowner's property and contain a certification that the
person(s) executing the agreement is/are the record owner(s) of the underlying
ground and has/have the authority to enter into the agreement.
Where a separate agreement from the underlying landowner is required
under these procedures, the Lessee shall present copies of the executed
agreement to Lessor. After Lessor's receipt of such agreement Lessor will advise
Lessee, in writing, whether or not the application is approved. Where a separate
agreement from the underlying landowner is not required, and where Lessee does
not withdraw application due to structural analysis results, Lessor shall notify
Lessee in writing whether Lessee's application is approved. Lessor shall have
the right to disapprove or approve any application at its sole discretion.
Approval will not be unreasonably withheld or delayed once all conditions of the
application process are met.
If approved, Lessor will advise Lessee of the estimated costs of the
work necessary to be performed by Lessor on its structures to accommodate
Lessee's Equipment and special conditions or restrictions on the proposed
installation, if any. Lessee will indicate its acceptance of and agreement to
the costs and special conditions by signing the Application and returning it to
Lessor after receiving the approved Application from Lessor subject to the
extensions set forth in the Master Agreement.
BILLING
- -------
Construction Costs will be invoiced monthly and will include a
breakdown of the Site Survey, Analysis, Design, Construction, Project
Management, and any Maintenance charges as shown in the billing example attached
to these procedures. Lessee will pay Construction invoices within thirty (30)
days of the Lessee's receipt of the invoice or per any additional terms set
forth in the lease agreement.
TO: VERA HOUGHTON
FROM: FAX:
DATE:
COMPANY NAME:
TRANSMISSION SITE
Site Number:
Structure Number:
Site Address:
Requested Survey Date :
TELECOMMUNICATION SITE
17
<PAGE>
Location:
Structure Type:
Site Address:
Requested Survey Date:
CONTACT INFORMATION:
Name:
Telephone number:
Cellular/PCS number:
FAX number:
Comments:
18
<PAGE>
EXAMPLE OF APPLICATION TO ATTACH TO
TRANSMISSION / TELECOMMUNICATIONS STRUCTURES
[Date]
Mr. David W. Roop
Transmission Lines Manager
Virginia Power
2400 Grayland Avenue
Richmond, Virginia 223220-5260
RE: APPLICATION FOR ANTENNA ATTACHMENT
Dear Mr. Roop:
Lessee wishes to lease space on Lessor's transmission / communication structures
(as described below) pursuant to the terms of the Lease between Triton PCS
Property Company L.L.C. and Virginia Electric and Power Company dated April 9,
1998. Please process this Application in accordance with the terms of the Lease.
Structure locations marked with an asterisk (*) are alternatives if the primary
location is unavailable or if Lessee is unable to secure the necessary easements
and /or approvals.
<TABLE>
- ---------------------------------------------------------------------------------------------------------------
Location Site# Transmission Longitude/Lati- Structure Feedline Type, Antenna Antenna System Type
Structure# tude Height(ft) Manuf# & Qty Height(ft) (attach dwg/loading
data
<S> <C> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
APPROVAL: Lessor herby grants APPROVAL to Lessee to install its Equipment at the
location specified subject to the conditions of the Lease between Virginia
Electric and Power Company and Triton PCS Property Company L.L.C. dated April 9,
1998, payment of the rental fees and costs indicated below and further subject
to the special conditions described, if any. This approval is also contingent
upon Lessee's providing proof that it has acquired any permits or authorizations
required by local authorities as identified under Special Conditions below.
Please indicate your acceptance of and agreement to these terms by signing in
the space provided below.
Site number
Rental Fee For This Location:
19
<PAGE>
VIRGINIA POWER
ANTENNA SITE CONSTRUCTION INFORMATION
Company Name:
Contact Person: Phone#
Site Name: Site#
Virginia Power Structure Number:
Antenna Type Model No. No. Of Antennas Antenna Orientation:
Antenna Orientation Antenna Mounting System
Size and Quantity of Coax: Size of GPS Cable
Existing Structure Height: Height of Antenna Rad Center: New
Telecommunication height: New Structure Type:
New Construction Area at Base of Telecommunications Structure:
Requested Target Date (from Carrier):
Anticipated Date of final approvals from local authority (city or county:
Virginia Power Anticipated Date of Completion:
AREAS OF RESPONSIBILITY
-----------------------
Real Estate:
- -----------
Zoning:
Permitting:
Easements:
Engineering:
- -----------
Structural Analysis of Existing Owner:
*Please provide name, address, and contact if Virginia Power is not providing
analysis.
Prepare Site Plan:
Design of Mounting System:
Approval of Mounting System:
Material Ordering:
Construction:
- ------------
Slab/Foundations:
Prefabricated Building Installation: Antenna and Coax:
Mounting Brackets/Platform: Grounding:
Electrical:
20
<PAGE>
Site Work/Gravel/Cleanup: Equipment Installation:
Testing:
Coordination of Electrical Hookup: Coordination of Telephone Service:
Comments:
- --------
21
<PAGE>
EXHIBIT B
VIRGINIA POWER- FEE SCHEDULE
<TABLE>
<CAPTION>
LABOR EQUIPMENT(w/o Operator)
<S> <C> <C> <C>
*****
Lineman ***** 50 ft Barehand Lift *****
Lead Lineman ***** 60 ft. Barehand Lift *****
Lineman Trainee ***** 75 ft. Barehand Lift *****
Engineering ***** 100 ft. Barehand Lift *****
Line Truck Auger Driver ***** 150 ft. Barehand Lift *****
Technician ***** Go Track 300 *****
Survey Party Chief - ***** Go track Rack 800/digger *****
Survey Instrument Operator ***** Power Wagon - Large *****
Rod and Chain Operator ***** Power Wagon - Small *****
Electrical Serviceman ***** Road Tractor/L. Boy *****
Coor. Of Construction ***** Sedan *****
Coor. Of Operations ***** Special Purpose Veh.ATV *****
Coor. Of Permitting ***** Stickboom Crane
Designer ***** Truck Support Utility 4X4 *****
Real Estate Specialist *****
</TABLE>
*NOTE: These fees represent hourly rates during normal operating hours. Fees for
Saturdays and evening hours during week days will be time-and-a-half Sundays and
Holidays will be double time. Construction crews work Monday through Friday
during normal operating hours. Maintenance crews work Monday through Thursday
during normal operating hours.
- --------------------------------------------------------------------------------
***** Certain information on this page has been omitted and filed
separately with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted portions.
22
<PAGE>
Exhibit 12.1
Computation of Deficiency of Earnings to Fixed Charges
<TABLE>
<CAPTION>
HISTORICAL TRITON PRO FORMA
DECEMBER JUNE DECEMBER JUNE
1997 1998 1997 1998
--------------------------------- ---------------------------------
<S> <C> <C> <C> <C>
EARNINGS
Pre-tax earnings from continuing operations (3,960,839) (13,399,556) (47,336,000) (25,214,000)
Fixed Charges 1,228,026 10,089,224 40,745,000 19,277,415
Less: Interest Capitalized 0 (217,415) 0 (217,415)
--------------------------------- ---------------------------------
Total Adjustment 1,228,026 9,871,809 40,745,000 19,060,000
Earnings (2,732,813) (3,527,747) (6,591,000) (6,154,000)
FIXED CHARGES
Interest Expense including discount and debt expense 1,228,026 9,871,809 40,745,000 19,060,000
Plus: Interest capitalized 0 217,415 0 217,415
--------------------------------- ---------------------------------
Total Fixed Charges 1,228,026 10,089,224 40,745,000 19,277,415
Ratio of earnings to fixed charges (2.23) (0.35) (0.16) (0.32)
Dollar Deficiency (3,960,839) (13,616,971) (47,336,000) (25,431,415)
</TABLE>
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS'
The Board of Directors
Triton PCS, Inc.:
We consent to the use of our report included herein and to the reference to
our firm under the heading "Experts" in the prospectus.
KPMG Peat Marwick LLP
/s/ _________________________________
Philadelphia
September 1, 1998
<PAGE>
EXHIBIT 23.3
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our
report (and to all references to our Firm) included in or made a part of this
Registration Statement.
Arthur Andersen LLP
/s/ ____________________________
Greensboro, North Carolina
September 1, 1998
<PAGE>
________________________________________________________________________________
________________________________________________________________________________
EXHIBIT 25.1
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT
OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ___
PNC BANK, NATIONAL ASSOCIATION
(Exact Name of Trustee as Specified in its Charter)
NOT APPLICABLE
(Jurisdiction of incorporation or organization if not a U.S. national bank)
25-1197336
(I.R.S. Employer Identification No.)
One PNC Plaza
Fifth Avenue and Wood Street, Pittsburgh, Pennsylvania 15222
(Address of principal executive offices - Zip code)
Allan K. Poust, Vice President, PNC Bank, National Association
4th Floor, Two PNC Plaza, Pittsburgh, Pennsylvania 15222
(412) 762-2838
(Name, address and telephone number of agent for service)
TRITON PCS, INC.
(Exact name of obligor as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
4812
(Primary SIC Code Number)
23-2930873
(I.R.S. Employer Identification No.)
101 Lindenwood Drive, Suite 125
Malvern, Pennsylvania 19355
(Address of principal executive offices - Zip code)
11% SENIOR SUBORDINATED DISCOUNT NOTES DUE 2008 AND GUARANTEES OF THE 11% SENIOR
SUBORDINATED DISCOUNT NOTES DUE 2008
(Title of the securities)
______________________________________________________________________________
______________________________________________________________________________
<PAGE>
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Comptroller of the Currency Washington, D.C.
Federal Reserve Bank of Cleveland Cleveland, Ohio
Federal Deposit Insurance Corporation Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Yes. (See Exhibit T-1-3)
ITEM 2. AFFILIATIONS WITH OBLIGOR AND UNDERWRITERS.
If the obligor or any underwriter for the obligor is an affiliate of the
trustee, describe each such affiliation.
Neither any obligor nor any underwriter for any obligor is an
affiliate of the trustee.
ITEM 3 THROUGH ITEM 14.
None of the obligors are currently is in default under any outstanding
securities for which PNC Bank is trustee. Accordingly, responses to Items
3 through 14 of Form T-1 are not required pursuant to Form T-1 General
Instructions B.
ITEM 15. FOREIGN TRUSTEE.
Identify the order or rule pursuant to which the foreign trustee is
authorized to act as sole trustee under the indentures qualified or to be
qualified under the Act.
Not applicable (trustee is not a foreign trustee).
ITEM 16. LIST OF EXHIBITS.
List below all exhibits filed as part of this statement of eligibility.
Exhibit T-1-1 - Articles of Association of the trustee, with all
amendments thereto, as presently in effect, filed as
Exhibit 1 to Trustee's Statement of Eligibility and
Qualification, Registration No. 333-43153 and
incorporated herein by reference.
Exhibit T-1-2 - Copy of Certificate of the Authority of the Trustee to
Commence Business, filed as Exhibit 2 to Trustee's
Statement of Eligibility and Qualification,
Registration No. 2-58789 and incorporated herein by
reference.
Exhibit T-1-3 - Copy of Certificate as to Authority of the Trustee to
Exercise Trust Powers, filed as Exhibit 3 to Trustee's
Statement of Eligibility and Qualification,
Registration No. 2-58789, and incorporated herein by
reference.
Exhibit T-1-4 - The By-Laws of the trustee, filed as Exhibit 4 to
Trustee's Statement of Eligibility and Qualification,
Registration No. 333-28711 and incorporated herein by
refenence.
Exhibit T-1-5 - The consent of the trustee required by Section 321(b)
of the Act.
<PAGE>
Exhibit T-1-6 - The copy of the Balance Sheet taken from the latest
Report of Condition of the trustee published in
response to call made by Comptroller of the Currency
under Section 5211 U.S. Revised Statutes.
NOTE
The answers to this statement, insofar as such answers relate to (a) what
persons have been underwriters for any securities of any obligor within three
years prior to the date of filing this statement, or are owners of 10% or more
of the voting securities of any obligor, or are affiliates or directors or
executive officers of any obligor, and (b) the voting securities of the trustee
owned beneficially by any obligor and each director and executive officer of
each obligor, are based upon information furnished to the trustee by the
obligors and also, in the case of (b) above, upon an examination of the
trustee's records. While the trustee has no reason to doubt the accuracy of any
such information furnished by the obligors, it cannot accept any responsibility
therefor.
- --------------------------------------------------------------------------------
Signature appears on next page
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the trustee,
PNC Bank, National Association, a corporation organized and existing under the
laws of the United States of America, has duly caused this statement of
eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Pittsburgh and Commonwealth of Pennsylvania on
August 27, 1998.
PNC BANK, NATIONAL ASSOCIATION
(Trustee)
By /s/ Allan K. Poust
-----------------------------
Allan K. Poust
Vice President
<PAGE>
EXHIBIT T-1-5
CONSENT OF TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture Act
of 1939, as amended by the Trust Indenture Reform Act of 1990, in connection
with the proposed offering by Triton PCS, Inc. and its Subsidiary Guarantors, of
the 11% Senior Subordinated Discount Notes due 2008 and Guarantees of the 11%
Senior Subordinated Discount Notes due 2008, we hereby consent that reports of
examination by Federal, State, Territorial, or District authorities may be
furnished by such authorities to the Securities and Exchange Commission upon
request therefor.
PNC BANK, NATIONAL ASSOCIATION
(Trustee)
By /s/ Allan K. Poust
-----------------------------
Allan K. Poust
Vice President
Dated: August 27, 1998
<PAGE>
EXHIBIT T-1-6
SCHEDULE RC - BALANCE SHEET
FROM
REPORT OF CONDITION
Consolidating domestic and foreign subsidiaries of
PNC BANK, NATIONAL ASSOCIATION
of PITTSBURGH in the state of PENNSYLVANIA
at the close of business on
March 31, 1998
filed in response to call made by
Comptroller of the Currency,
under title 12, United States Code, Section 161
Charter Number 540
Comptroller of the Currency Northeastern District
BALANCE SHEET
Thousands
of Dollars
----------
ASSETS
<TABLE>
<CAPTION>
Cash and balances due from depository institutions
<S> <C>
Noninterest-bearing balances and currency and coin....... $ 2,571,979
Interest-Bearing Balances................................ 74,141
Securities
Held-to-maturity securities.............................. 0
Available-for-sale securities............................ 6,438,137
Federal funds sold and
Securities purchased under agreements to resell.......... 233,993
Loans and lease financing receivables:
Loans and leases, net of unearned income $53,845,983
LESS: Allowance for loan and lease losses 879,844
LESS: Allocated transfer risk reserve 0
Loans and leases, net of unearned income,
allowance and reserve.................................. 52,966,139
Trading assets............................................ 91,468
Premises and fixed assets (including capitalized leases).. 805,743
Other real estate owned................................... 43,906
Investments in unconsolidated subsidiaries and
associated companies..................................... 2,940
Customers' liability to this bank on acceptances
outstanding.............................................. 74,249
Intangible assets......................................... 1,628,061
Other assets.............................................. 1,995,543
-----------
Total Assets............................................. $66,926,299
===========
</TABLE>
<PAGE>
LIABILITIES
<TABLE>
<CAPTION>
Deposits:
<S> <C>
In domestic offices............................................... $40,991,484
Noninterest-bearing $ 9,664,232
Interest-bearing 31,327,252
In foreign offices, Edge and Agreement subsidiaries,
and IBFs........................................................ 2,253,178
Noninterest-bearing $ 9,137
Interest-bearing 2,244,041
Federal funds purchased and securities sold under agreements
to repurchase in domestic offices of the bank and of its
Edge and Agreement subsidiaries, and in IBFs:
Federal funds purchased and
Securities sold under agreements to repurchase.................. 2,274,573
Demand notes issued to U.S. Treasury............................... 25
Trading Liabilities................................................ 151,785
Other borrowed money
With original maturity of one year or less........................ 8,838,456
With original maturity of more than one year through three years.. 231,929
With original maturity of more than three years................... 4,153,234
Bank's liability on acceptances executed and outstanding........... 74,249
Subordinated notes and debentures.................................. 671,220
Other liabilities.................................................. 1,306,177
-----------
Total liabilities.................................................. 61,036,310
</TABLE>
EQUITY CAPITAL
<TABLE>
<CAPTION>
<S> <C>
Perpetual preferred stock and related surplus........ 0
Common Stock......................................... 218,919
Surplus.............................................. 2,376,731
Undivided profits and capital reserves............... 3,327,385
Net unrealized holding gains (losses) on
available-for-sale securities....................... (33,046)
Cumulative foreign currency translation adjustments.. 0
Total equity capital................................. 5,889,989
-----------
Total liabilities and equity capital................. $66,926,299
===========
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE TRITON
PCS, INC AND PREDECESSOR COMPANY FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0001064735
<NAME> 5*thnvav
<S> <C> <C> <C>
<PERIOD-TYPE> 12-MOS 6-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1997 DEC-31-1998 DEC-31-1997
<PERIOD-END> DEC-31-1997 JUN-30-1998 JUN-30-1997
<CASH> 11,362,212 261,508,612 0
<SECURITIES> 0 0 0
<RECEIVABLES> 0 0 0
<ALLOWANCES> 0 0 0
<INVENTORY> 0 0 0
<CURRENT-ASSETS> 11,531,272 261,844,457 0
<PP&E> 477,656 10,339,526 0
<DEPRECIATION> (4,762) (108,067) 0
<TOTAL-ASSETS> 13,253,021 563,936,010 0
<CURRENT-LIABILITIES> 17,213,859 7,743,568 0
<BONDS> 0 371,692,463 0
0 0 0
0 0 0
<COMMON> 1 1 0
<OTHER-SE> (3,960,839) 171,263,348 0
<TOTAL-LIABILITY-AND-EQUITY> 13,253,021 566,445,010 0
<SALES> 0 0 0
<TOTAL-REVENUES> 0 0 0
<CGS> 0 0 0
<TOTAL-COSTS> 0 0 0
<OTHER-EXPENSES> 2,740,805 6,266,910 522,823
<LOSS-PROVISION> 0 0 0
<INTEREST-EXPENSE> 1,228,029 9,871,809 0
<INCOME-PRETAX> (3,960,839) (13,399,556) (522,823)
<INCOME-TAX> 0 (6,802,625) 0
<INCOME-CONTINUING> (3,960,839) (6,596,931) (522,823)
<DISCONTINUED> 0 0 0
<EXTRAORDINARY> 0 0 0
<CHANGES> 0 0 0
<NET-INCOME> (3,960,839) (6,596,931) (522,823)
<EPS-PRIMARY> 0 0 0
<EPS-DILUTED> 0 0 0
</TABLE>
<PAGE>
EXHIBIT 99.1
NOTICE OF GUARANTEED DELIVERY
FOR
11% SENIOR SUBORDINATED DISCOUNT NOTES DUE 2008
OF
Triton PCS, Inc.
As set forth in the Prospectus dated _______________, 1998 (the
"Prospectus") of Triton PCS, Inc. (the "Company") and in the accompanying Letter
of Transmittal and instructions thereto (the "Letter of Transmittal"), this form
or one substantially equivalent hereto must be used to accept the Company's
Exchange Offer (the "Exchange Offer") to exchange new 11% Senior Subordinated
Discount Notes due 2008 (the "New Notes") that have been registered under the
Securities Act of 1933, as amended (the "Securities Act"), for all of its
outstanding 11% Senior Subordinated Discount Notes due 2008 (the "Old Notes") IF
the Letter of Transmittal or any other documents required thereby cannot be
delivered to the Exchange Agent, or Definitive Registered Notes cannot be
delivered or the procedure for book-entry transfer cannot be completed, prior to
5:00 p.m., New York City Time, on the Expiration Date (as defined in the
Prospectus). This form may be delivered by an Eligible Institution by hand or
transmitted by facsimile transmission, overnight courier or mail to the Exchange
Agent as set forth below. Capitalized terms not defined herein have the meanings
ascribed to them in the Prospectus or the Letter of Transmittal.
- --------------------------------------------------------------------------------
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON _______________, 1998 (AS SUCH DATE AND TIME MAY BE EXTENDED BY THE
COMPANY IN ITS SOLE DISCRETION, THE "EXPIRATION DATE").
- --------------------------------------------------------------------------------
PLEASE READ CAREFULLY THE ATTACHED INSTRUCTIONS
To: PNC Bank, National Association, as Exchange Agent
By Registered or Certified Mail, by Overnight Carrier or by By Facsimile:
Hand:
PNC Bank, National Association
Corporate Trust Department (215) 585-8872
1600 Market Street, 30th Floor
Philadelphia, PA 19103
Delivery of this Notice of Guaranteed Delivery to an address other
than as set forth above or transmission of instructions via a facsimile number
other than that set forth above will not constitute a valid delivery.
This form is not to be used to guarantee signatures. If a signature on
the Letter of Transmittal to be used to tender Old Notes is required to be
guaranteed by an "Eligible Institution" under the instructions thereto, such
signature guarantee must appear in the applicable space provided in the Letter
of Transmittal.
Ladies and Gentlemen:
The undersigned hereby tenders to the Company, upon the terms and
subject to the conditions set forth in the Prospectus and the related Letter of
Transmittal (which together constitute the "Exchange Offer"), receipt of which
is hereby acknowledged, the principal amount of Old Notes specified below
pursuant to the guaranteed delivery procedures set forth in the Prospectus and
in Instruction 2 of the Letter of Transmittal.
<PAGE>
The undersigned understands that tenders of Old Notes pursuant to the
Exchange Offer may not be withdrawn after 5:00 p.m., New York City time, on the
Expiration Date. Tenders of Old Notes may also be withdrawn if the Exchange
Offer is terminated without any such Old Notes being purchased thereunder or as
otherwise provided in the Prospectus.
All authority thereto conferred or agreed to be conferred by this
Notice of Guaranteed Delivery shall survive the death, incapacity or dissolution
of the undersigned and every obligation of the undersigned under this Notice of
Guaranteed Delivery shall be binding upon the heirs, personal representatives,
executors, administrators, successors, assigns, trustees in bankruptcy and other
legal representatives of the undersigned.
The undersigned hereby tenders the Old Notes listed below:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
Aggregate Principal Amount of Old Notes Principal Amount of Old Notes Tendered
- ------------------------------------------------------------------------------------------------
<S> <C>
- ------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------
</TABLE>
NOTE: SIGNATURES MUST BE PROVIDED WHERE INDICATED BELOW
SIGN HERE
Name(s) of Holder(s): _______________________________________________________
Address(es): _______________________________________________________
_______________________________________________________
Telephone Number: _______________________________________________________
Signature(s): _______________________________________________________
_______________________________________________________
Date: _______________________________________________________
DTC Account Number (if applicable): ________________________________________
This Notice of Guaranteed Delivery must be signed by (i) the Holder(s)
of Old Notes exactly as its/their name(s) appear on Definitive Registered Notes,
(ii) the Holder(s) of Old Notes exactly as its/their name(s) appear on a
security position listing maintained by DTC as the owner of Old Notes or (iii)
by person(s) authorized to become Holder(s) by documents transmitted with this
Notice of Guaranteed Delivery. If signature is by a trustee, executor,
administrator, guardian, attorney-in-fact, officer or other person acting in a
fiduciary or representative capacity, such person must provide the following
information:
<PAGE>
Please print name(s) and address(es) of person signing above
Name(s): _______________________________________________________
_______________________________________________________
Capacity: _______________________________________________________
Address(es): _______________________________________________________
_______________________________________________________
_______________________________________________________
<PAGE>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm that is a member of a registered national
securities exchange or of the National Association of Securities Dealers, Inc.,
or is a commercial bank or trust company having an office or correspondent in
the United States, or is otherwise an "eligible guarantor institution" within
the meaning of Rule 17Ad-15 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), hereby (a) represents that the above named
person(s) "own(s)" the Old Notes tendered hereby within the meaning of Rule 14e-
4 under the Exchange Act, (b) represents that such tender of Old Notes complies
with Rule 14e-4 under the Exchange Act and (c) guarantees that delivery to the
Exchange Agent of the Letter of Transmittal (or facsimile thereof), either
Definitive Registered Notes in proper form for transfer or a confirmation of the
book-entry transfer of Book-Entry Interests representing such Old Notes into the
Exchange Agent's account at DTC, pursuant to the procedures for book-entry
transfer set forth in the Prospectus, and delivery of either a properly
completed and duly executed Letter of Transmittal (or manually signed facsimile
thereof) with any required signatures and any other documents required by the
Letter of Transmittal or an Agent's Message, will be received by the Exchange
Agent by 5:00 p.m., New York City time, on the fifth New York Stock Exchange
trading day after the Expiration Date.
THE UNDERSIGNED ACKNOWLEDGES THAT IT MUST DELIVER THE LETTER OF
TRANSMITTAL OR AGENT'S MESSAGE AND OLD NOTES TENDERED HEREBY TO THE EXCHANGE
AGENT WITHIN THE TIME PERIOD SET FORTH THEREIN AND THAT FAILURE TO DO SO COULD
RESULT IN FINANCIAL LOSS TO THE UNDERSIGNED.
----------------------------------------------------------------
SIGN HERE
Name of firm: _______________________________
Authorized Signature: _______________________________
Name (please print): _______________________________
Address: _______________________________
_______________________________
Telephone Number: _______________________________
Date: _______________________________
----------------------------------------------------------------
DO NOT SEND ANY DEFINITIVE REGISTERED NOTES WITH THIS FORM. ACTUAL SURRENDER OF
DEFINITIVE REGISTERED NOTES MUST BE MADE PURSUANT TO, AND BE ACCOMPANIED BY, AN
EXECUTED LETTER OF TRANSMITTAL.
INSTRUCTIONS FOR NOTICE OF GUARANTEED DELIVERY
1. Delivery of this Notice of Guaranteed Delivery. A properly completed
and duly executed copy of this Notice of Guaranteed Delivery and any other
documents required by this Notice of Guaranteed Delivery must be received by the
Exchange Agent at its address set forth herein prior to the Expiration Date. The
method of delivery of this Notice of Guaranteed Delivery and any other required
documents to the Exchange Agent is at the election and risk of the holder, and
the delivery will be deemed made only when actually received by the Exchange
Agent. If delivery is by mail, registered mail with return receipt requested,
properly insured, is recommended. Instead of delivery by mail, it is recommended
that the holder use an overnight or hand delivery service. In all cases
sufficient time should be allowed to assure timely delivery. For a description
of the guaranteed delivery procedure, see Instruction 2 of the Letter of
Transmittal.
<PAGE>
2. Signatures on this Notice of Guaranteed Delivery. If this Notice of
Guaranteed Delivery is signed by the registered holder(s) of the Old Notes to be
tendered (in the case of Definitive Registered Notes), the signature must
correspond with the name(s) as written on the face of such Old Notes without
alteration, enlargement, or any change whatsoever. If this Notice of Guaranteed
Delivery is signed by the DTC participant whose name appears on a security
position maintained by DTC (in the case of Book-Entry Interests), the signature
must correspond exactly with such participant's name as it appears on a security
position maintained by DTC listing such participant as the owner of the Old
Notes, without any change whatsoever.
If any of the Old Notes to be tendered are owned of record by two or
more joint owners, all such owners must sign this Notice of Guaranteed Delivery.
If any Old Notes to be tendered are held in different names on several Old
Notes, it will be necessary to complete, sign, and submit as many separate
copies of the Notice of Guaranteed Delivery documents as there are names in
which Old Notes to be tendered are held.
If this Notice of Guaranteed Delivery or any Old Notes are signed by
trustees, executors, administrators, guardians, attorneys-in-fact, officers of
corporations, or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing and, unless waived by the Company,
evidence satisfactory to the Company of their authority to so act must be
submitted with this Notice of Guaranteed Delivery.
3. Requests for Assistance or Additional Copies. Questions and requests
for assistance and requests for additional copies of the prospectus may be
directed to the Exchange Agent at the address specified in the Prospectus.
Holders also may contact their broker, dealer, commercial bank, trust company,
or other nominee for assistance concerning the Exchange Offer.
<PAGE>
LETTER TO REGISTERED HOLDERS AND DTC PARTICIPANTS
REGARDING THE OFFER TO EXCHANGE
$511,989,000 PRINCIPAL AMOUNT AT MATURITY OF 11% SENIOR SUBORDINATED DISCOUNT
NOTES DUE 2008
FOR ANY AND ALL OUTSTANDING
$511,989,000 PRINCIPAL AMOUNT AT MATURITY OF 11% SENIOR SUBORDINATED DISCOUNT
NOTES DUE 2008
OF
TRITON PCS, INC.
To Registered Holders and The Depository Trust Company Participants:
We are enclosing herewith the materials listed below relating to the
offer by Triton PCS, Inc. (the "Company") to exchange its new 11% Senior
Subordinated Discount Notes due 2008 (the "New Notes"), pursuant to an offering
registered under the Securities Act of 1933, as amended (the "Securities Act"),
for a like principal amount of its issued and outstanding 11% Senior
Subordinated Discount Notes due 2008 (the "Old Notes") upon the terms and
subject to the conditions set forth in the Company's Prospectus, dated
_______________, 1998, and the related Letter of Transmittal (which together
constitute the "Exchange Offer").
Enclosed herewith are copies of the following documents:
1. Prospectus dated _______________, 1998;
2. Letter of Transmittal;
3. Notice of Guaranteed Delivery;
4. Instruction to Registered Holder or DTC Participant from Beneficial
Owner; and
5. Letter which may be sent to your clients for whose account you hold
Definitive Registered Notes or Book-Entry Interests representing Old Notes in
your name or in the name of your nominee, to accompany the instruction form
referred to above, for obtaining such client's instruction with regard to the
Exchange Offer.
WE URGE YOU TO CONTACT YOUR CLIENTS PROMPTLY. PLEASE NOTE THAT THE
EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON _______________,
1998, UNLESS EXTENDED.
The Exchange Offer is not conditioned upon any minimum number of Old
Notes being tendered.
To participate in the Exchange Offer, a beneficial holder must either
(i) cause to be delivered to PNC Bank, National Association (the "Exchange
Agent") at the address set forth in the Letter of Transmittal Definitive
Registered Notes in proper form for transfer together with a properly executed
Letter of Transmittal or (ii) cause a DTC Participant to tender such holder's
Old Notes to the Exchange Agent's account maintained at the Depository Trust
Company ("DTC") for the benefit of the Exchange Agent through DTC's Automated
Tender Offer Program ("ATOP"), including transmission of a computer-generated
message that acknowledges and agrees to be bound by the terms of the Letter of
Transmittal. By complying with DTC's ATOP procedures with respect to the
Exchange Offer, the DTC Participant confirms on behalf of itself and the
beneficial owners of tendered Old Notes all
<PAGE>
provisions of the Letter of Transmittal applicable to it and such beneficial
owners as fully as if it completed, executed and returned the Letter of
Transmittal to the Exchange Agent.
Pursuant to the Letter of Transmittal, each holder of Old Notes will
represent to the Company that: (i) the New Notes or Book-Entry Interests therein
to be acquired by such holder and any beneficial owner(s) of such Old Notes or
interests therein ("Beneficial Owner(s)") in connection with the Exchange Offer
are being acquired by such holder and any Beneficial Owner(s) in the ordinary
course of business of the holder and any Beneficial Owner(s), (ii) the holder
and each Beneficial Owner are not participating, do not intend to participate,
and have no arrangement or understanding with any person to participate, in the
distribution of the New Notes, (iii) if the holder or Beneficial Owner is a
resident of the State of California, it falls under the self-executing
institutional investor exemption set forth under Section 25102(i) of the
Corporate Securities Law of 1968 and Rules 260.102.10 and 260.105.14 of the
California Blue Sky Regulations, (iv) if the holder or Beneficial Owner is a
resident of the Commonwealth of Pennsylvania, it falls under the self-executing
institutional investor exemption set forth under Sections 203(c), 102(d) and (k)
of the Pennsylvania Securities Act of 1972, Section 102.111 of the Pennsylvania
Blue Sky Regulations and an interpretive opinion dated November 16, 1985, (v)
the holder and each Beneficial Owner acknowledge and agree that any person who
is a broker-dealer registered under the Securities Exchange Act of 1934, as
amended (the "Exchange Act") or is participating in the Exchange Offer for the
purpose of distributing the New Notes must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with a
secondary resale transaction of the New Notes or interests therein acquired by
such person and cannot rely on the position of the staff of the Commission set
forth in certain no-action letters, (vi) the holder and each Beneficial Owner
understand that a secondary resale transaction described in clause (v) above and
any resales of New Notes or interests therein obtained by such holder in
exchange for Old Notes or interests therein originally acquired by such holder
directly from the Company should be covered by an effective registration
statement containing the selling security holder information required by Item
507 or Item 508, as applicable, of Regulation S-K of the Commission and (vii)
neither the holder nor any Beneficial Owner(s) is an "affiliate," as defined in
Rule 405 under the Securities Act, of the Company. Upon a request by the
Company, a holder or beneficial owner will deliver to the Company a legal
opinion confirming its representation made in clause (vii) above. If the
tendering holder of Old Notes is a broker-dealer (whether or not it is also an
"affiliate") or any Beneficial Owner(s) that will receive New Notes for its own
or their account pursuant to the Exchange Offer, the tendering holder will
represent on behalf of itself and the Beneficial Owner(s) that the Old Notes to
be exchanged for the New Notes were acquired as a result of market-making
activities or other trading activities, and acknowledge on its own behalf and on
the behalf of such Beneficial Owner(s) that it or they will deliver a prospectus
meeting the requirements of the Securities Act in connection with any resale of
such New Notes; however, by so acknowledging and by delivering a prospectus,
such tendering holder will not be deemed to admit that it or any Beneficial
Owner is an "underwriter" within the meaning of the Securities Act.
The enclosed "Instruction to Registered Holder or DTC Participant from
Beneficial Owner" form contains an authorization by the beneficial owners of Old
Notes for you to make the foregoing representations.
The Company will not pay any fee or commission to any broker or dealer
or to any other persons (other than the Exchange Agent) in connection with the
solicitation of tenders of Old Notes pursuant to the Exchange Offer. The Company
will pay or cause to be paid any transfer taxes payable on the transfer of Old
Notes to it, except as otherwise provided in Instruction 7 of the enclosed
Letter of Transmittal.
Additional copies of the enclosed material may be obtained from PNC
Bank, National Association.
<PAGE>
Very truly yours,
TRITON PCS, INC.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU THE
AGENT OF TRITON PCS, INC. OR PNC BANK, NATIONAL ASSOCIATION OR AUTHORIZE YOU TO
USE ANY DOCUMENT OR MAKE ANY STATEMENT ON THEIR BEHALF IN CONNECTION WITH THE
EXCHANGE OFFER OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS
CONTAINED THEREIN.
<PAGE>
INSTRUCTION TO REGISTERED HOLDER OR DTC PARTICIPANT
FROM BENEFICIAL OWNER
FOR
11% SENIOR SUBORDINATED DISCOUNT NOTES DUE 2008
OF
Triton PCS, Inc.
The undersigned hereby acknowledges receipt of the Prospectus dated
_______________, 1998 (the "Prospectus"), of Triton PCS, Inc., a company
incorporated under the laws of Delaware (the "Company"), and the accompanying
Letter of Transmittal (the "Letter of Transmittal") that together constitute the
Company's offer (the "Exchange Offer"). Capitalized terms used but not defined
herein have the meanings assigned to them in the Prospectus and the Letter of
Transmittal.
This will instruct you as to the action to be taken by you relating to
the Exchange Offer with respect to the 11% Senior Subordinated Discount Notes
due 2008 (the "Old Notes") held by you for the account of the undersigned.
The principal amount of the Old Notes held by you for the account of
the undersigned is (fill in amount): $_____________ principal amount of Old
Notes.
With respect to the Exchange Offer, the undersigned hereby instructs
you (check appropriate box):
[_] To TENDER the following principal amount of Old Notes held by you for
the account of the undersigned (insert amount of Old Notes to be tendered, if
any):
$_____________ principal amount of Old Notes.
[_] NOT to TENDER any Old Notes held by you for the account of the
undersigned.
If the undersigned instructs you to tender the Old Notes held by you
for the account of the undersigned, it is understood that you are authorized:
(a) to make, on behalf of the undersigned (and the undersigned, by
its signature below, hereby makes to you), the representations and
warranties contained in the Letter of Transmittal that are to be made with
respect to the undersigned as a beneficial owner, including but not limited
to the representations that (i) the New Notes or Book-Entry Interests
therein to be acquired by the undersigned (the "Beneficial Owner(s)") in
connection with the Exchange Offer are being acquired by the undersigned in
the ordinary course of business of the undersigned, (ii) the undersigned is
not participating, does not intend to participate, and has no arrangement
or understanding with any person to participate, in the distribution of the
New Notes, (iii) if the undersigned is a resident of the State of
California, it falls under the self-executing institutional investor
exemption set forth under Section 25102(i) of the Corporate Securities Law
of 1968 and Rules 260.102.10 and 260.105.14 of the California Blue Sky
Regulations, (iv) if the undersigned is a resident of the Commonwealth of
Pennsylvania, it falls under the self-executing institutional investor
exemption set forth under Sections 203(c), 102(d) and (k) of the
Pennsylvania Securities Act of 1972, Section 102.111 of the Pennsylvania
Blue Sky Regulations and an interpretive opinion dated November 16,
<PAGE>
1985, (v) the undersigned acknowledges and agrees that any person who is a
broker-dealer registered under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or is participating in the Exchange Offer for
the purpose of distributing the New Notes must comply with the registration
and prospectus delivery requirements of the Securities Act in connection
with a secondary resale transaction of the New Notes or interests therein
acquired by such person and cannot rely on the position of the staff of the
Commission set forth in certain no-action letters, (vi) the undersigned
understands that a secondary resale transaction described in clause (v)
above and any resales of New Notes or interests therein obtained by such
holder in exchange for Old Notes or interests therein originally acquired
by such holder directly from the Company should be covered by an effective
registration statement containing the selling security holder information
required by Item 507 or Item 508, as applicable, of Regulation S-K of the
Commission and (vii) the undersigned is not an "affiliate," as defined in
Rule 405 under the Securities Act, of the Company. Upon a request by the
Company, a holder or beneficial owner will deliver to the Company a legal
opinion confirming its representation made in clause (vii) above. If the
undersigned is a broker-dealer (whether or not it is also an "affiliate")
that will receive New Notes for its own account pursuant to the Exchange
Offer, the undersigned represents that the Old Notes to be exchanged for
the New Notes were acquired by it as a result of market-making activities
or other trading activities, and acknowledges that it will deliver a
prospectus meeting the requirements of the Securities Act in connection
with any resale of such New Notes; however, by so acknowledging and by
delivering a prospectus, the undersigned does not and will not be deemed to
admit that is and "underwriter" within the meaning of the Securities Act;
(b) to agree, on behalf of the undersigned, as set forth in the
Letter of Transmittal; and
(c) to take such other action as necessary under the Prospectus or
the Letter of Transmittal to effect the valid tender of such Old Notes.
SIGN HERE
Name of Beneficial Owner(s): _____________________________________________
Signature(s): _____________________________________________
Name(s) (please print): _____________________________________________
Address: _____________________________________________
_____________________________________________
Telephone Number: _____________________________________________
Taxpayer Identification or Social Security Number: ___________________________
Date: _____________________________________________
<PAGE>
LETTER TO CLIENTS
REGARDING THE OFFER TO EXCHANGE
$511,989,000 PRINCIPAL AMOUNT AT MATURITY OF 11% SENIOR SUBORDINATED DISCOUNT
NOTES DUE 2008
FOR ANY AND ALL OUTSTANDING
$511,989,000 PRINCIPAL AMOUNT AT MATURITY OF 11% SENIOR SUBORDINATED DISCOUNT
NOTES DUE 2008
OF
TRITON PCS, INC.
To Our Clients:
We are enclosing herewith a Prospectus, dated _______________, 1998, of
Triton PCS, Inc. (the "Company") and a related Letter of Transmittal (which
together constitute the "Exchange Offer") relating to the offer by the Company
to exchange its new 11% Senior Subordinated Discount Notes due 2008 (the "New
Notes"), pursuant to an offering registered under the Securities Act of 1933, as
amended (the "Securities Act"), for a like principal amount of its issued and
outstanding 11% Senior Subordinated Discount Notes due 2008 (the "Old Notes")
upon the terms and subject to the conditions set forth in the Prospectus and the
Letter of Transmittal.
PLEASE NOTE THAT THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK
CITY TIME, ON ________, 1998, UNLESS EXTENDED.
The Exchange Offer is not conditioned upon any minimum number of Old
Notes being tendered.
We are the Registered Holder or DTC participant through which you hold
an interest in the Old Notes. A tender of such Old Notes can be made only by us
pursuant to your instructions. The Letter of Transmittal is furnished to you for
your information only and cannot be used by you to tender your beneficial
ownership of Old Notes held by us for your account.
We request instructions as to whether you wish to tender any or all of
your Old Notes held by us for your account pursuant to the terms and subject to
the conditions of the Exchange Offer. We also request that you confirm that we
may on your behalf make the representations contained in the Letter of
Transmittal that are to be made with respect to you as beneficial owner.
Pursuant to the Letter of Transmittal, each holder of Old Notes must
make certain representations and warranties that are set forth in the Letter of
Transmittal and in the attached form that we have provided to you for your
instructions regarding what action we should take in the Exchange Offer with
respect to your interest in the Old Notes.
<PAGE>
LETTER OF TRANSMITTAL
TRITON PCS, INC.
OFFER TO EXCHANGE
$511,989,000 PRINCIPAL AMOUNT AT MATURITY OF 11% SENIOR SUBORDINATED DISCOUNT
NOTES DUE 2008
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT
FOR ANY AND ALL OUTSTANDING
$511,989,000 PRINCIPAL AMOUNT AT MATURITY OF 11% SENIOR SUBORDINATED DISCOUNT
NOTES DUE 2008
PURSUANT TO THE PROSPECTUS, DATED _______, 1998
- --------------------------------------------------------------------------------
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK
CITY TIME, ON ___________, 1998 (AS SUCH DATE AND TIME MAY BE EXTENDED BY THE
COMPANY IN ITS SOLE DISCRETION, THE "EXPIRATION DATE").
- --------------------------------------------------------------------------------
PLEASE READ CAREFULLY THE ATTACHED INSTRUCTIONS
If you desire to accept the Exchange Offer, this Letter of Transmittal
should be completed, signed, and submitted to:
By Registered or Certified Mail, by Overnight Carrier
or by Hand: By Facsimile:
PNC Bank, National Association
Corporate Trust Department (215) 585-8872
1600 Market Street, 30th Floor
Philadelphia, PA 19103
Delivery of this Letter of Transmittal to an address other than as set
forth above or transmission of instructions via a facsimile number other than
that set forth above will not constitute a valid delivery.
The undersigned hereby acknowledges receipt of the Prospectus dated
_______, 1998 (the "Prospectus") of Triton PCS, Inc., a company incorporated
under the laws of the state of Delaware (the "Company"), and this Letter of
Transmittal (the "Letter of Transmittal"), that together constitute the
Company's offer (the "Exchange Offer") to exchange $1,000 principal amount (or
fraction thereof) of a new series of 11% Senior Subordinated Discount Notes due
2008 (the "New Notes") for each $1,000 principal amount (or fraction thereof) of
its outstanding 11% Senior Subordinated Discount Notes due 2008 (the "Old
Notes"). The New Notes and the Old Notes are collectively referred to as the
"Notes." Capitalized terms used but not defined herein have the meanings
ascribed to them in the Prospectus.
THE REGISTRATION STATEMENT ON FORM S-4 (FILE NO. 333-57715) OF WHICH THE
PROSPECTUS IS A PART WAS DECLARED EFFECTIVE BY THE SECURITIES AND EXCHANGE
COMMISSION ON _______, 1998.
Either this Letter of Transmittal or an Agent's Message (as defined) is
to be completed by a holder of Old Notes (which term, for purposes of the
Exchange Offer, includes any participant in the DTC system whose name appears on
a security position listing as the holder of such Old Notes) in order to tender
Old Notes. All deliveries of Old Notes must be made either by (i) endorsement
and delivery of Definitive Registered Notes or (ii) by book-entry transfer of
Book-Entry Interests to the account maintained by the Exchange Agent at DTC
<PAGE>
pursuant to the procedures set forth in the Prospectus under "The Exchange
Offer--Procedures For Tendering Book." Holders of Old Notes who are unable to
deliver (i) endorsed Definitive Registered Notes, (ii) confirmation of the book-
entry tender of their Old Notes into the Exchange Agent's account at DTC (a
"Book-Entry Confirmation") or (iii) in either case all other documents required
by this Letter of Transmittal to the Exchange Agent on or prior to the
Expiration Date must tender their Old Notes according to the guaranteed delivery
procedures set forth in the Prospectus under "The Exchange Offer--Guaranteed
Delivery Procedures." See Instruction 1. Delivery of documents to DTC does not
constitute delivery to the Exchange Agent.
The undersigned has completed the appropriate boxes below and signed
this Letter to indicate the action the undersigned desires to take with respect
to the Exchange Offer.
List below the Old Notes to which this Letter relates. If the space
provided is inadequate, the principal amount of Old Notes should be listed on a
separate signed schedule affixed hereto.
<TABLE>
<CAPTION>
========================================================================================================
BOX 1
DESCRIPTION OF OLD NOTES TENDERED
- --------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF
HOLDER(S) OF OLD NOTES, AGGREGATE PRINCIPAL AMOUNT OF PRINCIPAL AMOUNT OF OLD NOTES
(PLEASE FILL IN, IF BLANK) OLD NOTES TENDERED*
<S> <C> <C>
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
TOTAL
========================================================================================================
</TABLE>
* Unless otherwise indicated in this column, ALL of the Old Notes indicated
in the preceding column of this Box 1 or delivered to the Exchange Agent
herewith shall be deemed tendered. See Instruction 4.
[_] CHECK HERE IF DEFINITIVE REGISTERED NOTES ARE BEING DELIVERED WITH THIS
LETTER OF TRANSMITTAL AND COMPLETE THE FOLLOWING:
Name(s) of Holder(s) ___________________________________________________
Certificate Number(s)___________________________________________________
[_] CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH DTC AND COMPLETE
THE FOLLOWING:
Name of Tendering Institution __________________________________________
The Depository Trust Company Account Number ____ Transaction Code
Number ____
<PAGE>
By crediting the Old Notes to the Exchange Agent's account at DTC in
accordance with DTC's Automated Tender Offer Program ("ATOP") and by complying
with applicable ATOP procedures with respect to the Exchange Offer, including
transmitting a computer-generated message (an "Agent's Message") to the Exchange
Agent in which the holder of the Old Notes acknowledges and agrees to be bound
by the terms of this Letter of Transmittal, the DTC participant confirms on
behalf of itself and the beneficial owners of such Old Notes all provisions of
this Letter of Transmittal applicable to it and such beneficial owners as fully
as if it had completed the information required herein and executed and
transmitted this Letter of Transmittal to the Exchange Agent.
[_] CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE
OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE
THE FOLLOWING:
Name(s) of Holder(s) ___________________________________________________
Name of Institution that guaranteed delivery____________________________
If Definitive Registered Notes are being tendered:
Name of Holder(s) ________________________________________________
Certificate number ________________________________________________
If Book-Entry Interests are being tendered:
The Depository Trust Company: Account Number ________________________
Transaction Code Number ___________
<PAGE>
[_] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
THERETO:
Name ________________________________________________________________
Address _______________________________________________________________
You are entitled to as many copies as you may reasonably request and if
you need more than 10 copies, please so indicate by a notation below.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
<PAGE>
Triton PCS, Inc.
101 Lindenwood Dr.
Malvern, PA 19355
Attention: [_______________]
PNC Bank, National Association
Corporate Trust Department
1600 Market Street, 30th Floor
Philadelphia, PA 19103
Re: Tender of Old Notes for New Notes
---------------------------------
Ladies and Gentlemen:
Upon the terms and subject to the conditions of the Exchange Offer
described in the Prospectus and this Letter of Transmittal, the undersigned
hereby tenders to Triton PCS, Inc. the principal amount of Old Notes indicated
in Box 1 above (the "Tendered Notes"). Subject to, and effective upon, the
acceptance for exchange of the Tendered Notes, the undersigned hereby exchanges,
assigns, and transfers to, or upon the order of, Triton PCS, Inc., all right,
title, and interest in, to and under the Tendered Notes. Each DTC participant
transmitting by means of DTC a computer-generated message forming part of a
Book-Entry Confirmation, on behalf of itself and the beneficial owner of the Old
Notes tendered thereby, acknowledges receipt of the Prospectus and this Letter
of Transmittal and agrees to be bound by the terms and conditions of the
Exchange Offer as set forth in the Prospectus and this Letter of Transmittal.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, exchange, assign, and transfer the Tendered
Notes and that the Company will acquire good and unencumbered title thereto,
free and clear of all liens, restrictions, charges, encumbrances, and adverse
claims when the Tendered Notes are acquired by the Company as contemplated
herein. The undersigned and each beneficial owner of Old Notes tendered by the
undersigned will, upon request, execute and deliver any additional documents
reasonably requested by the Company as necessary or desirable to complete and
give effect to the transactions contemplated hereby.
The undersigned hereby irrevocably constitutes and appoints the Exchange
Agent as the true and lawful agent and attorney in fact of the undersigned with
respect to the Tendered Notes, with full power of substitution (such power of
attorney being deemed to be an irrevocable power coupled with an interest), to
(i) deliver the Tendered Notes to the Company or cause ownership of the Tendered
Notes to be transferred to, or upon the order of, the Company, and deliver all
accompanying evidences of transfer and authenticity to, or upon the order of,
the Company upon receipt by the Exchange Agent, as the undersigned's agent, of
the New Notes to which the undersigned is entitled upon the acceptance by the
Company of the Tendered Notes pursuant to the Exchange Offer, and (ii) receive
all benefits and otherwise exercise all rights of beneficial ownership of the
Tendered Notes, all in accordance with the terms of the Exchange Offer.
The undersigned also acknowledges that this Exchange Offer is being made
by the Company in reliance on an interpretation by the staff of the Securities
and Exchange Commission (the "Commission"), as set forth in certain no-action
letters to third parties, that the New Notes issued in exchange for the Old
Notes pursuant to the Exchange Offer may be offered for resale, resold and
otherwise transferred by holders thereof (other than a broker-dealer, as set
forth below, or any such holder that is an "affiliate" of the Company within the
meaning of
<PAGE>
Rule 405 under the Securities Act of 1933, as amended (the "Securities Act"),
without compliance with the registration and prospectus delivery provisions of
the Securities Act, provided that such New Notes are acquired in the ordinary
course of such holder's business and such holders have no arrangement with any
person to participate in the distribution (within the meaning of the Securities
Act) of such New Notes. By tendering, each holder of Old Notes represents to
the Company that (i) the New Notes or Book-Entry Interests therein to be
acquired by such holder and any beneficial owner(s) of such Old Notes or
interests therein ("Beneficial Owner(s)") in connection with the Exchange Offer
are being acquired by such holder and any Beneficial Owner(s) in the ordinary
course of business of the holder and any Beneficial Owner(s), (ii) the holder
and each Beneficial Owner are not participating, do not intend to participate,
and have no arrangement or understanding with any person to participate, in the
distribution of the New Notes, (iii) if the holder is a resident of the State of
California, it falls under the self-executing institutional investor exemption
set forth under Section 25102(i) of the Corporate Securities Law of 1968 and
Rules 260.102.10 and 260.105.14 of the California Blue Sky Regulations, (iv) if
the undersigned is a resident of the Commonwealth of Pennsylvania, it falls
under the self-executing institutional investor exemption set forth under
Sections 203(c), 102(d) and (k) of the Pennsylvania Securities Act of 1972,
Section 102.111 of the Pennsylvania Blue Sky Regulations and an interpretive
opinion dated November 16, 1985, (v) the holder and each Beneficial Owner
acknowledge and agree that any person who is a broker-dealer registered under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or is
participating in the Exchange Offer for the purpose of distributing the New
Notes must comply with the registration and prospectus delivery requirements of
the Securities Act in connection with a secondary resale transaction of the New
Notes or interests therein acquired by such person and cannot rely on the
position of the staff of the Commission set forth in certain no-action letters,
(vi) the holder and each Beneficial Owner understands that a secondary resale
transaction described in clause (v) above and any resales of New Notes or
interests therein obtained by such holder in exchange for Old Notes or interests
therein originally acquired by such holder directly from the Company should be
covered by an effective registration statement containing the selling security
holder information required by Item 507 or Item 508, as applicable, of
Regulation S-K of the Commission and (vii) neither the holder nor any Beneficial
Owner(s) is an "affiliate," as defined in Rule 405 under the Securities Act, of
the Company. Upon a request by the Company, a holder or beneficial owner will
deliver to the Company a legal opinion confirming its representation made in
clause (vii) above. By tendering, each holder of Old Notes that is a broker-
dealer (whether or not it is also an "affiliate") that will receive New Notes
for its own account pursuant to the Exchange Offer, represents that the Old
Notes to be exchanged for the New Notes were acquired by it as a result of
market-making activities or other trading activities, and acknowledges that it
will deliver a prospectus meeting the requirements of the Securities Act in
connection with any resale of such New Notes; however, by so acknowledging and
by delivering a prospectus, the holder will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
The undersigned understands that tenders of Old Notes pursuant to the
procedures described under the captions "The Exchange Offer--Procedures for
Tendering" in the Prospectus and in the instructions hereto will constitute a
binding agreement between the undersigned and the Company upon the terms and
subject to the conditions of the Exchange Offer, subject only to withdrawal of
such tenders on the terms set forth in the Prospectus under the caption "The
Exchange Offer--Withdrawal of Tenders." All authority herein conferred or
agreed to be conferred shall survive the death or incapacity of the undersigned
and any Beneficial Owner(s), and every obligation of the undersigned or any
Beneficial Owners hereunder shall be binding upon the heirs, representatives,
successors, and assigns of the undersigned and such Beneficial Owner(s).
The undersigned acknowledges and understands that New Notes will be
issued in exchange for Tendered Notes (i) as Definitive Registered Notes
registered in the name(s) of the undersigned and sent to the address(es) shown
above in Box 1 or, if applicable, Box 2 if Definitive Registered Notes were
tendered or (ii) as Book-Entry Interests delivered by book-entry transfer to the
account of the undersigned shown above under Box 1 or, if applicable, Box 2 if
Book-Entry Interests were tendered.
<PAGE>
Unless otherwise indicated in Box 2 below, please deliver New Notes as
specified in Box 1.
The undersigned, by completing Box 1 above and signing this letter, will
be deemed to have tendered the Old Notes as set forth in such Box above.
================================================================================
BOX 2
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 5, 6 AND 7)
To be completed ONLY if the New Notes exchanged for Old Notes and/or if
untendered Old Notes or Old Notes that are not accepted for exchange are to be
delivered to someone other than the undersigned, or to the undersigned at an
address or an account maintained at DTC other than that shown above under Box 1.
Please issue New Notes and/or any unexchanged or unaccepted Old Notes to:
Names(s):
_____________________________________________________________________________
(please type or print)
Address:
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
(include Zip Code)
Tax Identification or
Social Security No.:
[_] Credit Book-Entry Interests in New Notes and/or unexchanged or unaccepted
Old Notes to the DTC account set forth below:
___________________________________________________________________
================================================================================
<PAGE>
================================================================================
BOX 3
USE OF GUARANTEED DELIVERY
[_] CHECK HERE ONLY IF OLD NOTES ARE BEING
TENDERED BY MEANS OF A NOTICE OF GUARANTEED DELIVERY.
See Instruction 2. If this box is checked, please provide the following
information:
Name(s) of Holder(s): ___________________________________________
_________________________________________________________________
Date of Execution of Notice of Guaranteed Delivery: _____________
Name of Institution which Guaranteed Delivery: __________________
================================================================================
IMPORTANT: THIS LETTER OR A FACSIMILE HEREOF OR AN AGENT'S MESSAGE
(TOGETHER WITH A BOOK-ENTRY CONFIRMATION AND ANY OTHER REQUIRED DOCUMENTS OR THE
NOTICE OF GUARANTEED DELIVERY, AS APPLICABLE) MUST BE RECEIVED BY THE EXCHANGE
AGENT PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON OR PRIOR TO THE EXPIRATION
DATE.
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL
CAREFULLY BEFORE COMPLETING ANY BOX ABOVE.
<PAGE>
<TABLE>
<CAPTION>
==============================================================================================
BOX 4
TENDERING HOLDER SIGNATURE
(SEE INSTRUCTIONS 1 AND 5)
- ----------------------------------------------------------------------------------------------
<S> <C>
X ____________________________________ Signature Guarantee
(If required by Instruction 5)
X ____________________________________ Authorized Signature
(Signature of Owner) X _____________________________________
The above lines must be signed by the person Name: _________________________________
in whose name such Old Notes are (i) (please print)
registered in the case of Definitive
Registered Notes being tendered or (ii) Title: ________________________________
registered on the security position listing
maintained by DTC or, in each case, by any Name of Firm: _________________________
person(s) authorized to become holder(s) by (Must be an Eligible
documents transmitted herewith. If Institution as defined in
signature is by a trustee, executor, Instruction 2)
administrator, guardian, attorney-in-fact,
officer, or other person acting in a Address: ______________________________
fiduciary or representative capacity, such
person must set forth his or her full title __________________________
below. See Instruction 5.
__________________________
Name(s): _____________________________ (include Zip Code)
_____________________________ Area Code and Telephone Number:
Capacity: _____________________________ __________________________
Street Address: _______________________ Date: _________________________________
_____________________________
_____________________________
(include Zip Code)
Area Code and Telephone Number:
_____________________________
Tax Identification or Social Security Number:
_____________________________
==============================================================================================
</TABLE>
<PAGE>
INSTRUCTIONS TO LETTER OF TRANSMITTAL
FORMING PART OF THE TERMS AND CONDITIONS
OF THE EXCHANGE OFFER
1. Delivery of the Old Notes and this Letter of Transmittal.
(A) If the holder is tendering Definitive Registered Notes, such holder
must deliver (i) the certificate(s) representing the Old Notes tendered, (ii) a
properly completed and duly executed copy of this Letter of Transmittal and
(iii) any other documents required by this Letter of Transmittal, all of which
must be received by the Exchange Agent at its address set forth herein prior to
the Expiration Date.
(B) If the holder is tendering Book-Entry Interests, such holder must
(i) utilize DTC's ATOP system to tender such holder's Book-Entry Interests to an
account established at DTC by the Exchange Agent, (ii) make the Agent's Message
and cause a Book-Entry Confirmation to be issued to the Exchange Agent or
deliver a properly completed and duly executed copy of this Letter of
Transmittal and (iii) deliver any other documents required by this Letter of
Transmittal, all of which must be received by the Exchange Agent at its DTC
account or address set forth herein prior to the Expiration Date.
The method of delivery of certificates for Old Notes and all other
required documents is at the election and risk of the tendering holder and
delivery will be deemed made only when actually received by the Exchange Agent.
If delivery is by mail, registered mail with return receipt requested, properly
insured, is recommended. Instead of delivery by mail it is recommended that the
holder use an overnight or hand delivery service. In all cases, sufficient time
should be allowed to assure timely delivery. In no event should any Old Notes
or documentation be sent to the Company. Neither the Company nor the registrar
is under any obligation to notify any tendering holder of the Company's
acceptance of Tendered Notes prior to the Expiration Date.
2. Guaranteed Delivery Procedures. Holders, who wish to tender their Old
Notes but who cannot deliver their Old Notes, Letter of Transmittal or any other
documents required by the Letter of Transmittal to the Exchange Agent prior to
the Expiration Date must tender their Old Notes according to the guaranteed
delivery procedures set forth below, including completion of Box 3 (if this
Letter of Transmittal is being delivered). Pursuant to such procedures: (i) such
tender must be made by or through a firm which is a member of a registered
national securities exchange or of the National Association of Securities
Dealers, Inc., or is a commercial bank or trust company having an office or
correspondent in the United States, or is otherwise an "eligible guarantor
institution" within the meaning of Rule 17Ad-15 under the Securities Exchange
Act of 1934, as amended (an "Eligible Institution"), and the Notice of
Guaranteed Delivery must be signed by the holder; (ii) prior to the Expiration
Date, the Exchange Agent must have received from the holder and the Eligible
Institution a properly completed and duly executed Notice of Guaranteed Delivery
(by facsimile transmission, mail or hand delivery) setting forth the name and
address of the holder, in the case of Definitive Registered Notes, the
certificate number or numbers of the Tendered Notes, and, in each case, the
principal amount of Tendered Notes, stating that the tender is being made
thereby and guaranteeing that, within five New York Stock Exchange ("NYSE")
trading days after the Expiration Date, either a properly completed and duly
executed Letter of Transmittal (or a facsimile thereof) or a properly
transmitted Agent's Message, together with the Tendered Notes and any other
required documents will be deposited by the Eligible Institution with the
Exchange Agent; and (iii) such Agent's Message or Letter of Transmittal, such
properly completed and executed documents required by this Letter of Transmittal
and such Tendered Notes in proper form for transfer must be received by the
Exchange Agent within five NYSE trading days after the Expiration Date. Failure
to complete the guaranteed delivery procedures outlined above will not, of
itself, affect the validity or effect a revocation of any Letter of Transmittal
form properly completed and executed by an Eligible Holder who attempted to use
the guaranteed delivery process.
<PAGE>
3. Beneficial Owner Instructions to Registered Holders. Only a holder in
whose name Definitive Registered Notes are registered on the books of the
registrar (or the legal representative or attorney-in-fact of such registered
holder) or who is a DTC participant who owns a Book-Entry Interest in the Old
Notes through a security position maintained by DTC may execute and deliver this
Letter of Transmittal. Any Beneficial Owner of Old Notes who is not the
registered holder or who is not a DTC participant who has a security position in
the Old Notes maintained by DTC in its name must arrange promptly with the
registered holder or a DTC participant, as the case may be, to execute and
deliver this Letter of Transmittal or an Agent's Message on his or her behalf
through the execution and delivery to the registered holder or DTC participant
of the "Instructions to Registered Holder or DTC Participant from Beneficial
Owner" form accompanying this Letter of Transmittal.
4. Partial Tenders. If less than the entire number of Old Notes are
tendered, the tendering holder should fill in the number of Old Notes tendered
in the column labeled "Principal Amount of Old Notes Tendered" of Box 1 above.
The entire number of Old Notes delivered to the Exchange Agent will be deemed to
have been tendered unless otherwise indicated. If the entire number of all Old
Notes indicated in Box 1 above is not tendered, Old Notes in a principal amount
equal to Old Notes not tendered as well as New Notes exchanged for any Old Notes
tendered will be delivered to the address or account, as applicable, indicated
in Box 1, unless a different address or account, as applicable, is provided in
Box 2 of this Letter of Transmittal.
5. Signatures on the Letter of Transmittal; Endorsements; Guarantee Of
Signatures. If this Letter of Transmittal is signed by the registered holder(s)
of the Tendered Notes (in the case of Definitive Registered Notes), the
signature must correspond with the name(s) as written on the face of the
Tendered Notes without alteration, enlargement, or any change whatsoever. If
this Letter of Transmittal is signed by the DTC participant whose name appears
on a security position maintained by DTC (in the case of Book-Entry Interests),
the signature must correspond exactly with such participant's name as it appears
on a security position maintained by DTC listing such participant as the owner
of the Old Notes, without any change whatsoever.
If any of the Tendered Notes are owned of record by two or more joint
owners, all such owners must sign this Letter of Transmittal. If any Tendered
Notes are held in different names on several Old Notes, it will be necessary to
complete, sign, and submit as many separate copies of the Letter of Transmittal
documents as there are names in which Tendered Notes are held.
When this Letter of Transmittal is signed by the holders of the Old
Notes specified herein and tendered hereby, no separate bond powers are
required. If, however, the New Notes are to be issued, or any untendered or
unaccepted Old Notes are to be reissued, to a person other than the holder, then
separate bond powers are required. Signatures on such bond powers must be
guaranteed by an Eligible Institution.
If this Letter of Transmittal or any Old Notes are signed by trustees,
executors, administrators, guardians, attorneys-in-fact, officers of
corporations, or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing and, unless waived by the Company,
evidence satisfactory to the Company of their authority to so act must be
submitted with this Letter of Transmittal.
Signatures on bond powers required by this Instruction 5 must be
guaranteed by an Eligible Institution. Signatures on this Letter of Transmittal
need not be guaranteed by an Eligible Institution if: (i) this Letter of
Transmittal is signed by the registered holder of Definitive Registered Notes
tendered hereby, (ii) this Letter of Transmittal is signed by any participant in
DTC whose name appears on a security position listing maintained by DTC as the
owner of the Old Notes tendered and such person has not completed Box 2 of this
Letter of Transmittal or (iii) the Old Notes are tendered for the account of an
Eligible Institution.
<PAGE>
6. Special Delivery Instructions. Tendering holders of Old Notes should
indicate in Box 2 (i) the name and address to which Definitive Registered Notes
representing New Notes and/or substitute Definitive Registered Notes
representing Old Notes in a principal amount equal to the Old Notes not tendered
or not accepted for exchange are to be sent or (ii) the DTC account to which
Book-Entry Interests in the New Notes issued pursuant to the Exchange Offer
and/or substitute Book-Entry Interests in the Old Notes not tendered or not
accepted for exchange are to be issued, in each case only if the recipient of
such New Notes or substitute Old Notes is different from the person signing this
Letter of Transmittal. The employer identification number or social security
number of the person named must also be indicated. If no such instructions are
given, such New Notes and/or Old Notes not tendered or not accepted for exchange
will be credited to the registered holder or DTC account of the person signing
this Letter of Transmittal.
7. Transfer Taxes. The Company will pay all transfer taxes, if any,
applicable to the sale and transfer of Old Notes to it or its order pursuant to
the Exchange Offer. If, however, a transfer tax is imposed for any reason other
than the transfer and sale of Old Notes to the Company or its order pursuant to
the Exchange Offer, then the amount of any such transfer taxes (whether imposed
on the registered holder or on any other person) will be payable by the
tendering holder. If satisfactory evidence of payment of such taxes or exemption
from taxes therefrom is not submitted with this Letter of Transmittal, the
amount of transfer taxes will be billed directly to such tendering holder.
8. Validity of Tenders. All questions as to the validity, form,
eligibility (including time of receipt), and acceptance of Tendered Notes will
be determined by the Company in its sole discretion, which determination will be
final and binding. The Company reserves the right to reject any and all Old
Notes not validly tendered or any Old Notes the Company's acceptance of which
would, in the opinion of the Company or its counsel, be unlawful. The Company
also reserves the right to waive any conditions of the Exchange Offer or defects
or irregularities in tenders of Old Notes as to any ineligibility of any holder
who seeks to tender Old Notes in the Exchange Offer. The interpretation of the
terms and conditions of the Exchange Offer (including this Letter of Transmittal
and the instructions hereto) by the Company shall be final and binding on all
parties. Unless waived, any defects or irregularities in connection with tenders
of Old Notes must be cured within such time as the Company shall determine. The
Company will use reasonable efforts to give notification of defects or
irregularities with respect to tenders of Old Notes, but shall not incur any
liability for failure to give such notification.
9. Waiver of Conditions. The Company reserves the absolute right to
amend, waive, or modify specified conditions of the Exchange Offer as enumerated
in the Prospectus in the case of any Tendered Notes.
10. No Conditional Tender. No alternative, conditional, irregular, or
contingent tender of Old Notes or transmittal of this Letter of Transmittal will
be accepted.
11. Mutilated, Lost, Stolen or Destroyed Old Notes. Any tendering holder
whose Old Notes have been mutilated, lost, stolen, or destroyed should contact
the Exchange Agent at the address indicated above for further instruction.
12. Requests for Assistance or Additional Copies. Questions and requests
for assistance and requests for additional copies of the Prospectus may be
directed to the Exchange Agent at the address specified in the Prospectus.
Holders may also contact their broker, dealer, commercial bank, trust company,
or other nominee for assistance concerning the Exchange Offer.
13. Acceptance of Tendered Notes and Issuance of New Notes; Return Old
Notes. Subject to the terms and conditions of the Exchange Offer, the Company
will accept for exchange all validly tendered Old Notes as soon
<PAGE>
as practicable after the Expiration Date and will issue New Notes therefor as
soon as practicable thereafter. For purposes of the Exchange Offer, the Company
shall be deemed to have accepted tendered Old Notes when, as and if the Company
has given written or oral notice thereof (such oral notice being promptly
confirmed in writing) to the Exchange Agent. If any Tendered Notes are not
exchanged pursuant to the Exchange Offer for any reason, such unexchanged Old
Notes will be returned, without expense, to the undersigned at the address or
DTC account shown above or at a different address or DTC account as may be
indicated herein under Box 2.
14. Withdrawal. Tenders may be withdrawn only pursuant to the limited
withdrawal rights set forth in the Prospectus under the caption "The Exchange
Offer--Withdrawal of Tenders."
15. Incorporation of Letter of Transmittal. This Letter of Transmittal
shall be deemed to be incorporated in and acknowledged and accepted by any
tender through DTC's ATOP procedures by any DTC participant on behalf of itself
and the beneficial owners of any Book-Entry Interests representing Old Notes so
tendered.
<PAGE>
Triton PCS, Inc.
_______, 1998
Page 26
