<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 6, 1999
REGISTRATION NO. 333-82509
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
AMENDMENT NO. 2 TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
<TABLE>
<CAPTION>
<S> <C> <C> <C>
TRITEL PCS, INC. DELAWARE 4812 64-0896438
TRITEL, INC. DELAWARE 4812 64-0896417
TRITEL COMMUNICATIONS, INC. DELAWARE 4812 64-0896042
TRITEL FINANCE, INC. DELAWARE 4812 64-0896439
(Exact Name of Registrant (State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
as Specified in its Charter) Incorporation or Organization) Classification Code Number) Identification No.)
</TABLE>
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111 E. CAPITOL STREET, SUITE 500, JACKSON, MISSISSIPPI 39201
ATTENTION: CORPORATE SECRETARY (601) 914-8000
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
---------------
JAMES H. NEELD, IV, ESQ.
TRITEL PCS, INC.
111 E. CAPITOL STREET, SUITE 500
JACKSON, MISSISSIPPI 39201
(601) 914-8000
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Agent For Service)
---------------
COPIES OF COMMUNICATIONS TO:
MICHAEL A. KING, ESQ.
BROWN & WOOD LLP
ONE WORLD TRADE CENTER
NEW YORK, NEW YORK 10048
(212) 839-5300
---------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC: AS SOON AS PRACTICABLE AFTER THIS REGISTRATION
STATEMENT BECOMES EFFECTIVE.
If the securities being registered on this form are being offered in connection
with the formation of a holding company and there is compliance with General
Instruction G, check the following box. [ ]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
---------------
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AMOUNT PROPOSED PROPOSED AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES TO BE MAXIMUM OFFERING MAXIMUM AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED(1) PRICE PER UNIT OFFERING PRICE FEE
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
12.75% Senior Subordinated Discount
Notes due 2009 $372,000,000 53.828% $200,239,971(2) $55,667(3)
- -------------------------------------------------------------------------------------------------------------------------
Guarantees of 12.75% Senior Subordinated
Discount Notes due 2009 -- -- -- (4)
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</TABLE>
(1) The "Amount to be registered" with respect to the 12.75% Senior
Subordinated Discount Notes due 2009 represents the aggregate principal
amount at maturity of such notes.
(2) Represents gross proceeds from the initial private offering of the 12.75%
Senior Subordinated Discount Notes due 2009 by Tritel PCS, Inc. The net
proceeds from the private offering were approximately $191 million after
deducting the Initial Purchasers' discounts and estimated transaction
fees payable by Tritel PCS, Inc.
(3) Previously paid.
(4) Pursuant to Rule 457(n), no separate registration fee is payable with
respect to the guarantees.
---------------
The Registrants hereby amend this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrants shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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<PAGE>
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN
OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED OCTOBER 6, 1999
PROSPECTUS
[GRAPHIC OMITTED]
TRITEL PCS, INC.
Offer to Exchange its
12 3/4% Senior Subordinated Discount Notes Due 2009
which have been registered under the
Securities Act of 1933 for any and all of its
Outstanding 12 3/4% Senior Subordinated Discount Notes Due 2009
TERMS OF THE EXCHANGE OFFER
o The exchange offer expires at 5:00 p.m., New York City time, on ,
1999, unless we extend it.
o All outstanding notes that are validly tendered and not withdrawn will be
exchanged.
o Tenders of outstanding notes may be withdrawn at any time prior to the
expiration of the exchange offer.
The notes are eligible for trading in The Portal Market, a subsidiary of
the Nasdaq Market, Inc.
YOUR TENDERING OF OUTSTANDING NOTES FOR NEW NOTES INVOLVES CERTAIN RISKS.
SEE "RISK FACTORS" BEGINNING ON PAGE 10 FOR A DISCUSSION OF MATTERS THAT
PARTICIPANTS IN THE EXCHANGE OFFER SHOULD CONSIDER.
---------------------
We are not making an offer to exchange notes in any jurisdiction where the
offer is not permitted.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of the securities or passed upon the
adequacy of this prospectus. Any representation to the contrary is a criminal
offense.
This prospectus and the related letter of transmittal contain important
information. We urge you to read this prospectus and the related letter of
transmittal carefully before deciding whether to tender outstanding notes
pursuant to the exchange offer.
THE DATE OF THIS PROSPECTUS IS , 1999.
<PAGE>
[INSIDE FRONT COVER]
[MAP OF TRITEL PCS'S, TRITON'S, TELECORP'S AND AT&T'S AND OTHER ROAMING
PARTNER'S NETWORKS]
<PAGE>
TABLE OF CONTENTS
PAGE
----
Prospectus Summary ............................ 1
Risk Factors .................................. 9
Information Regarding Forward-Looking
Statements ................................. 19
Where You Can Find More Information ........... 19
Use of Proceeds ............................... 20
Capitalization ................................ 21
Selected Consolidated Financial Data .......... 22
Management's Discussion and Analysis .......... 24
Organization of Tritel, Inc. and Tritel PCS 33
Business ...................................... 34
Government Regulation ......................... 54
Joint Venture Agreements with AT&T
Wireless ................................... 67
Management .................................... 76
Certain Relationships and Related
Transactions ............................... 83
Principal Stockholders ........................ 87
Description of Certain Indebtedness ........... 89
The Exchange Offer ............................ 92
Description of the Notes ...................... 103
Description of Capital Stock .................. 140
Certain Federal Income Tax
Considerations ............................. 144
Plan of Distribution .......................... 149
Legal Matters ................................. 149
Experts ....................................... 149
Index to Financial Statements ................. F-1
---------------------
- ----------
* The map on the opposite page is not intended to be an exact
representation of each provider's wireless service area.
i
<PAGE>
PROSPECTUS SUMMARY
The following summary highlights information contained elsewhere in this
prospectus. This summary may not contain all of the information that may be
important to you. You should read the entire prospectus carefully.
Market data used throughout this prospectus is based on our good faith
estimates. Our estimates are based upon their review of internal surveys,
independent industry publications and other publicly available information.
Although we believe that these sources are reliable, the accuracy and
completeness of this information is not guaranteed and has not been
independently verified.
TRITEL PCS
We are a development stage enterprise formed to develop wireless personal
communications services, called PCS, telecommunications markets in the
south-central United States. Our PCS licenses cover a population, called Pops,
of approximately 14.0 million people in contiguous markets in the states of
Alabama, Georgia, Kentucky, Mississippi and Tennessee. As a member of the AT&T
Wireless Network, we are the exclusive provider to AT&T Wireless of mobile
wireless PCS services in virtually all of our markets. Our agreements with AT&T
Wireless and certain affiliates allow us to use the AT&T brand name and logo
together with the SunCom name, our regional brand name.
We have commenced commercial PCS service in the Jackson, Mississippi
market. We intend to commence commercial PCS service during 1999 and 2000 in
our major population and business centers as follows and to provide coverage to
approximately 80% of our Pops by the end of 2001.
EXPECTED
MARKET LAUNCH DATE 1998 POPS
------ ----------- ---------
Nashville, TN 4th Quarter 1999 1,675,700
Louisville, KY 4th Quarter 1999 1,448,400
Birmingham, AL 2nd Quarter 2000 1,297,800
Knoxville, TN 4th Quarter 1999 1,074,000
Lexington, KY 4th Quarter 1999 893,400
Jackson, MS Launched September 1999 657,800
Mobile, AL 2nd Quarter 2000 653,900
We have also entered into an agreement with two other AT&T Wireless
affiliates, Triton PCS, Inc. and TeleCorp PCS, Inc., to operate with those
affiliates under a common regional brand name, SunCom, throughout an area
covering approximately 43 million Pops primarily in the south-central and
southeastern United States.
BUSINESS STRATEGY
We expect to take advantage of our affiliation with AT&T Wireless, the
SunCom brand alliance and our management's local market expertise in offering
our PCS services. In particular, we plan to pursue the following business
strategies:
Leverage the Benefits of Our AT&T Wireless Affiliation. We will
aggressively market our affiliation with AT&T Wireless and the AT&T Wireless
Network to distinguish ourselves from other wireless service providers in our
markets.
Distribute through Company Stores. Our distribution strategy will focus
principally on direct distribution through company-owned retail stores. We also
plan to employ a direct sales force to target small to medium-sized businesses.
Enhance Brand Awareness through the SunCom Brand Alliance. We intend to
promote the SunCom brand through joint marketing efforts with our SunCom
affiliates.
1
<PAGE>
Emphasize Advantages of PCS Technology. We will seek to distinguish our
PCS services from those of our analog cellular competitors by emphasizing our
features and benefits.
Capitalize on Management Expertise and Local Market Presence. We intend to
leverage our management's experience in order to create strong ties with
subscribers and their communities.
FINANCING PLAN AND USE OF PROCEEDS
We estimate that our projected capital requirements from inception through
year-end 2001, when our network is expected to be substantially complete and we
expect to generate positive cash flow, will be approximately $1.0 billion.
The following table highlights our projected sources and uses of capital
from inception through December 31, 2001:
<TABLE>
<CAPTION>
AMOUNT
(DOLLARS IN MILLIONS)
---------------------
<S> <C>
SOURCES:
Bank facility ............................................. $ 462.3
Senior subordinated discount notes ........................ 200.2
Government financing ...................................... 47.5
Cash equity ............................................... 163.4
Non-cash equity ........................................... 157.9
---------
Total sources ............................................ $ 1,031.3
=========
USES:
Acquisition of PCS licenses and intangible assets ......... $ 192.9
Capital expenditures ...................................... 529.9
Cash interest and fees .................................... 134.4
Working capital ........................................... 174.1
---------
Total uses ............................................... $ 1,031.3
=========
</TABLE>
2
<PAGE>
TRITEL CORPORATE STRUCTURE
TRITEL, INC.
Holding Company
Issuer of Equity and Guarantor of Senior Bank Debt and High Yield Debt
|
|
|
TRITEL PCS, INC.
Holding Company
Issuer of Senior Bank Debt and High Yield Debt
|
|
|
TRITEL A/B HOLDING COPR.
Holding Company
Guarantor of Senior Bank Debt
|
Five License Subsidiaries Hold FCC A- and B- Block Licenses
|
Guarantors of Senior Bank Debt
TRITEL C/F HOLDING CORP.
Holding Company
Guarantor of Senior Bank Debt
|
Four License Subsidiaries Hold FCC C- and F- Block Licenses
|
Issuers of FCC Debt and Guarantors of Senior Bank Debt
TRITEL COMMUNICATIONS, INC.
Operating Company
Guarantor of Senior Bank Debt and High Yield Debt
TRITEL FINANCE, INC.
Equipment Leasing and Financing
Guarantor of Senior Bank Debt and High Yield Debt
We are a Delaware corporation. Our principal executive offices are located
at 111 E. Capitol Street, Suite 500, Jackson, Mississippi 39201, and our
telephone number is (601) 914-8000.
3
<PAGE>
SUMMARY OF THE EXCHANGE OFFER
Registration Rights
Agreement................... You have the right to exchange your notes for
registered notes with substantially identical
terms. This exchange offer is intended to satisfy
these rights. After the exchange offer is
complete, you will no longer be entitled to any
exchange or registration rights with respect to
your notes.
The Exchange Offer.......... We are offering to exchange $1,000 principal
amount of Tritel PCS's 123/4% Senior Subordinated
Discount Notes due 2009 which have been
registered under the Securities Act for each
$1,000 principal amount at maturity of Tritel
PCS's outstanding 123/4% Senior Subordinated
Discount Notes due 2009 which were issued in May
1999 in a private offering. In order to be
exchanged, an outstanding note must be properly
tendered and accepted. We will exchange all notes
validly tendered and not validly withdrawn. As of
this date there is $372,000,000 aggregate
principal amount at maturity of notes
outstanding. We will issue registered notes on or
promptly after the expiration of the exchange
offer.
Resales..................... We believe that the registered notes may be
offered for resale, resold and otherwise
transferred by you without compliance with the
registration and prospectus delivery provisions
of the Securities Act provided that:
o you acquire the registered notes issued in
the exchange offer in the ordinary course of
your business;
o you are not participating, do not intend to
participate, and have no arrangement or
understanding with any person to participate,
in the distribution of the registered notes
issued to you in the exchange offer; and
o you are not an "affiliate," as defined under
Rule 405 of the Securities Act, of Tritel
PCS.
If our belief is inaccurate and you transfer any
registered note issued to you in the exchange
offer without delivering a prospectus meeting
the requirements of the Securities Act or
without an exemption of your registered notes
from such requirements, you may incur liability
under the Securities Act. We do not assume or
indemnify you against such liability. Each
broker-dealer that issued registered notes for
its own account in exchange for outstanding
notes which were acquired by such broker-dealer
as a result of market-making or other trading
activities must acknowledge that it will deliver
a prospectus meeting the requirements of the
Securities Act in connection with any resale of
the registered notes. A broker-dealer may use
this prospectus for an offer to resell, resale
or other retransfer of the registered notes
issued to it in the exchange offer.
Record Date................. We mailed this prospectus and the related
exchange offer documents to registered holders of
outstanding notes on , 1999.
4
<PAGE>
Expiration Date............. The exchange offer will expire at 5:00 p.m.,
New York City time, , 1999, unless we
decide to extend the expiration date.
Conditions to the
Exchange Offer.............. We may terminate or amend the exchange offer if:
o any legal proceeding, government action or
other adverse development materially impairs
our ability to complete the exchange offer;
o any Securities and Exchange Commission rule,
regulation or interpretation materially
impairs the exchange offer; or
o we have not obtained any necessary
governmental approvals with respect to the
exchange offer.
We may waive any or all of these conditions. At
this time, there are no adverse proceedings,
actions or developments pending or, to our
knowledge, threatened and no governmental
approvals are necessary to complete the exchange
offer.
Procedures for Tendering
Outstanding Notes.......... Each holder of outstanding notes wishing to
accept the exchange offer must:
o complete, sign and date the accompanying
letter of transmittal, or a facsimile
thereof; or
o arrange for The Depository Trust Company to
transmit certain required information to the
exchange agent in connection with a
book-entry transfer.
You must mail or otherwise deliver such
documentation and your outstanding notes to The
Bank of New York, as exchange agent, at the
address set forth under "The Exchange
Offer--Exchange Agent." By tendering your
outstanding notes in this manner, you will be
representing, among other things, that:
o you are acquiring the registered notes
pursuant to the exchange offer in the
ordinary course of your business;
o you are not participating, do not intend to
participate, and have no arrangement or
understanding with any person to participate,
in the distribution of the registered notes
issued to you in the exchange offer; and
o you are not an affiliate of Tritel PCS.
Untendered Outstanding
Notes....................... If you are eligible to participate in the
exchange offer and you do not tender your
outstanding notes, you will not have any further
registration or exchange rights and your
outstanding notes will continue to be subject to
certain restrictions on transfer. Accordingly,
the liquidity of the market for such outstanding
notes could be adversely affected.
5
<PAGE>
Special Procedures for
Beneficial Owners.......... If you beneficially own outstanding notes
registered in the name of a broker, dealer,
commercial bank, trust company or other nominee
and you wish to tender your outstanding notes in
the exchange offer, you should contact such
registered holder promptly and instruct it to
tender on your behalf. If you wish to tender on
your own behalf, you must, prior to completing
and executing the letter of transmittal for the
exchange offer and delivering your outstanding
notes, either arrange to have your outstanding
notes registered in your name or obtain a
properly completed bond power from the registered
holder. The transfer of registered ownership may
take considerable time.
Guaranteed Delivery
Procedures.................. If you wish to tender your outstanding notes and
time will not permit your required documents to
reach the exchange agent by the expiration date
of the exchange offer, or you cannot complete the
procedure for book-entry transfer on time or you
cannot deliver certificates for your outstanding
notes on time, you may tender your outstanding
notes pursuant to the procedures described in
this prospectus under the heading "The Exchange
Offer--Guaranteed Delivery Procedures."
Withdrawal Rights........... You may withdraw the tender of your outstanding
notes at any time prior to 5:00 p.m., New York
City time, on , 1999.
Certain U.S. Federal Tax
Considerations............ The exchange of notes will not be a taxable
event for United States federal income tax
purposes.
Use of Proceeds............. We will not receive any proceeds from the
issuance of registered notes pursuant to the
exchange offer. We will pay all our expenses
incident to the exchange offer.
Exchange Agent.............. The Bank of New York is serving as the exchange
agent in connection with the exchange offer.
SUMMARY OF TERMS OF THE REGISTERED NOTES
The form and terms of the registered notes are the same as the form and
terms of the outstanding notes except that the registered notes will be
registered under the Securities Act and, therefore, will not bear legends
restricting their transfer and will not be entitled to registration under the
Securities Act. In this regard, we use the term notes when describing
provisions that govern or otherwise pertain to both the outstanding notes and
the registered notes. The registered notes will evidence the same debt as the
outstanding notes, and the same indenture will govern both the registered notes
and the outstanding notes.
Issuer...................... Tritel PCS, Inc.
Notes Offered............... $372,000,000 aggregate principal amount at
maturity of 123/4% Senior Subordinated Discount
Notes due 2009.
6
<PAGE>
Maturity Date............... May 15, 2009.
Yield and Interest.......... 123/4% per annum, compounded on a semi-annual
basis, calculated from May 11, 1999. Cash
interest will not accrue prior to May 15, 2004.
Thereafter, cash interest on the notes will
accrue at the rate of 123/4% per year and will be
payable semi-annually on May 15 and November 15
of each year, commencing November 15, 2004.
Original Issue Discount..... The notes were issued at a substantial discount
from their principal amount at maturity.
Consequently, you will generally be required to
include amounts in your gross income for federal
income tax purposes before your receipt of the
cash payments attributable to that income. See
"Certain Federal Income Tax
Considerations--Original Issue Discount."
Optional Redemption......... We can redeem the notes, in whole or in part,
on or after May 15, 2004, at the redemption
prices set forth in this prospectus, plus accrued
and unpaid interest. In addition, before May 15,
2002, we can redeem up to 35% of the aggregate
principal amount at maturity of the notes, with
the proceeds of one or more equity offerings, at
112.75% of their accreted value on the redemption
date, if at least 65% of the aggregate principal
amount at maturity of the notes remains
outstanding.
Parent and Subsidiary
Guarantees................. Our parent company, Tritel, Inc., and two of our
subsidiaries will guarantee the notes on a senior
subordinated basis. All of our future
subsidiaries, other than subsidiaries solely
engaged in the business of holding PCS licenses,
or holding the stock of these subsidiaries, will
also be required to guarantee the notes. If we
fail to make payments on the notes, the
guarantors must make them instead. Our license
subsidiaries will not guarantee the notes.
Our parent company and each of our subsidiaries
have guaranteed our obligations under our bank
facility on a senior basis. We, our parent
company and all of our subsidiaries have pledged
substantially all of our assets, except our PCS
licenses, to secure our obligations under our
bank facility.
Change of Control........... Upon the occurrence of certain change of
control events, you may require us to repurchase
all or a portion of your notes at 101% of the
principal amount thereof, plus accrued and unpaid
interest.
Ranking..................... The notes:
o are unsecured obligations of Tritel PCS;
7
<PAGE>
o are senior in right of payment to existing
and future obligations expressly subordinated
in right of payment to the notes; and
o rank junior to all existing and future
senior debt.
The guarantees:
o are unsecured obligations of the guarantors;
o rank junior to all existing and future
senior debt of the guarantors; and
Because our license subsidiaries will not
guarantee the notes, the notes will be
structurally subordinated to all liabilities of
these subsidiaries, including trade payables.
As of June 30, 1999, you would have been
effectively subordinated to $63.8 million of
total liabilities of our subsidiaries.
Basic Indenture Covenants... The indenture governing the notes contains
covenants that, among other things, limit our
ability and the ability of our restricted
subsidiaries to:
o incur additional indebtedness;
o pay dividends, repurchase our capital stock,
make investments or make other restricted
payments;
o sell or exchange assets;
o engage in transactions with affiliates;
o issue or sell capital stock of restricted
subsidiaries;
o in the case of our restricted subsidiaries,
guarantee indebtedness;
o create liens securing indebtedness that is
pari passu with or subordinated to the notes
or the subsidiary guarantees;
o in the case of our restricted subsidiaries,
agree to certain payment restrictions; or
o engage in certain sale and leaseback
transactions or merge, consolidate or
transfer all or substantially all our assets
and the assets of our subsidiaries on a
consolidated basis.
These covenants are subject to important
exceptions and qualifications. See "Description
of the Notes--Certain Covenants."
8
<PAGE>
RISK FACTORS
Before tendering original notes, you should carefully read and think about
all of the information contained in this prospectus, especially the following
risk factors:
WE ARE A DEVELOPMENT STAGE COMPANY; WE HAVE NOT YET BEGUN COMMERCIAL PCS
OPERATIONS IN MOST OF OUR MARKETS AND WE MAY NOT BE PROFITABLE AFTER WE DO
We are at an early stage of development and have no meaningful historical
financial information for you to evaluate. We will incur significant expenses
before generating revenues, and we expect to have significant operating losses
in our initial stages of operations.
We expect to grow rapidly while we develop and construct our PCS network
and build our customer base. We expect this growth to strain our financial
resources and result in operating losses and negative cash flows until at
earliest the end of 2001. We have not begun commercial PCS operations, except
for the Jackson, Mississippi market, and, therefore, have no significant
revenues to fund expenditures. We have made cumulative cash expenditures
through June 30, 1999 of $105 million, consisting of primarily capital
expenditures for the network buildout.
We cannot be certain of the timing and extent of revenue receipts and
expense disbursements. Also, we cannot be certain that we will achieve or
sustain profitability or positive cash flow from operating activities in the
future. If we do not achieve profitability or positive cash flow in a timely
manner and then sustain it, we may not be able to meet our working capital or
debt service requirements, including our obligations in respect of the notes.
Our future operating results over both the short and long term are
uncertain because of several factors, some of which are outside of our control.
These factors include:
o the significant cost of building our PCS network,
o the cost and availability of PCS infrastructure and subscriber
equipment, including tri-mode handsets,
o possible delays in introducing our services,
o fluctuating market demand and prices for our services,
o pricing strategies for competitive services,
o new offerings of competitive services,
o changes in federal, state and local legislation and regulations,
o the potential allocation by the FCC of additional PCS licenses or other
wireless licenses in our markets,
o technological changes, and
o general economic conditions.
OUR HIGHLY LEVERAGED CAPITAL STRUCTURE LIMITS OUR ABILITY TO OBTAIN ADDITIONAL
FINANCING AND COULD ADVERSELY AFFECT OUR BUSINESS IN SEVERAL OTHER WAYS
It will take substantial funds to complete the buildout of our PCS network
and to market and distribute our PCS products and services. We estimate that
our capital requirements, which include capital expenditures, the cost of
acquiring licenses, working capital, debt service requirements and anticipated
operating losses, will total approximately $1.0 billion for the period from our
inception through the end of 2001. This estimate assumes substantial completion
of the network buildout to cover 80% of our licensed Pops by the end of 2001.
We have expended approximately $105 million of these funds as of June 30, 1999.
9
<PAGE>
We are highly leveraged. As of June 30, 1999, we had $445.1 million of
total indebtedness outstanding, including debt owed to the FCC, which was
carried on our books at $41.4 million as of June 30, 1999 and was incurred in
connection with the acquisition of our C- and F-Block licenses, $200.0 million
outstanding under our bank facility and $203.7 million of the original notes at
their accreted value. This indebtedness represented approximately 69.3% of our
total capitalization at that date. At that date, we also had $69.1 million of
Series A 10% redeemable convertible preferred stock outstanding, which has not
been included in stockholders' equity in our financial statements.
Our large amount of indebtedness could significantly impact our business
for the following reasons:
o It limits our ability to obtain additional financing, if we need it, to
complete our network buildout, to cover our cash flow deficit or for
working capital, other capital expenditures, debt service requirements
or other purposes.
o Even though the notes will not pay cash interest for five years, we
will need to dedicate a substantial portion of our operating cash flow
to fund interest expense on our bank facility and other indebtedness,
thereby reducing funds available for our network buildout, operations or
other purposes.
o We are vulnerable to interest rate fluctuations because a significant
portion of our debt is at variable interest rates.
o It limits our ability to compete with competitors who are not as
highly leveraged.
o It limits our ability to react to changing market conditions, changes
in our industry and economic downturns.
The government financing incurred in connection with the acquisition of
our C- and F-Block licenses bears interest at a below-market rate. Accordingly,
our obligations under this government financing have been recorded in our
financial statements in accordance with generally accepted accounting
principles at its estimated fair market value of $41.4 million as of June 30,
1999. This estimate assumes a fair market borrowing rate of 10%. If the
government financing were declared immediately due and payable after a default,
the amount payable would be $47.5 million plus accrued interest of $1.1 million
as of June 30, 1999.
On July 31, 1998, we were required to begin quarterly installment payments
of interest on our C- and F-Block license debt. We will be required to make
quarterly installment payments of principal on our F-Block license debt
beginning January 31, 2000, and on our C-Block license debt beginning January
31, 2003.
If we default on the government financing or otherwise violate FCC
regulations, the FCC could take a variety of actions, including:
o requiring immediate repayment of all amounts due under the government
financing or repayment of amounts relating to our receipt of bidding
credits totaling $18.0 million,
o revoking some or all of our licenses and fining us an amount equal to
the difference between the price at which we acquired the licenses and
the amount of the winning bid at their re-auction, plus an additional
penalty of 3% of the lesser of the subsequent winning bid and our bid
amount. If the FCC were to take any of these actions, we could default
on our obligations to our other creditors, including our bank lenders
and you.
We believe we have taken steps to comply with and prevent violation of
these regulatory requirements, but it is possible that our ownership and
control structure will be challenged. If any challenges were successful, we
could be required to restructure or recapitalize, and possibly forfeit our C-
and F-Block PCS licenses. If we fail to maintain our designated entity status,
we may face less favorable payment schedules or the acceleration of payments
due under the government financing, or our licenses may be revoked. The
inability of non-control group stockholders to gain control of Tritel could
negatively impact our ability to attract additional capital. This control
requirement may also discourage certain transactions involving an actual or
potential change of control of Tritel.
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Our ability to pay interest on the notes beginning in 2004 and to satisfy
our other debt obligations will depend upon our future operating performance.
Prevailing economic conditions and financial, business and other factors, many
of which are beyond our control, will affect our ability to make these
payments. If, in the future, we cannot generate sufficient cash flow from
operations to make scheduled payments on the notes or to meet our other
obligations, we will need to refinance our indebtedness, obtain additional
financing or sell assets. We cannot be certain that our business will generate
cash flow, or that we will be able to obtain funding sufficient to satisfy our
debt service requirements.
ADDITIONAL FUNDING MAY BE REQUIRED BUT UNAVAILABLE TO US
Our actual capital needs may be greater than we currently anticipate.
Moreover, we may not generate enough cash flow to fund our operations in the
absence of other funding sources. We may require additional funding if certain
developments occur, including if:
o the costs of the buildout of our PCS network are greater than
anticipated,
o the acquisition costs of subscribers is higher than expected,
o other operating costs exceed management's estimates,
o we take advantage of license or market acquisition opportunities,
including those that may arise through future FCC auctions,
o the level of our revenues from subscribers is lower than anticipated,
or
o the number of subscribers is greater than anticipated, leading to
greater than anticipated handset costs and other subscriber acquisition
and operating costs.
In addition, we would require substantial additional funding if AT&T
Wireless does not exercise its option to purchase PCS licenses covering
approximately 2.0 million Pops in Florida and southern Georgia and we then
determine that we will build out these markets ourselves.
We have no revenues at this point. Sources of future financing may include
equipment vendors, bank financing and the public or private debt and equity
markets. Additional required financing may be unavailable to us or it may not
be available on terms acceptable to us and consistent with any limitation under
our outstanding indebtedness or FCC regulations. If we are unable to obtain
such financing it could result in the delay or reduction of our development and
construction plans and could result in our failure to meet certain FCC buildout
requirements and our debt service obligations.
BECAUSE OUR RELATIONSHIP WITH AT&T WIRELESS MAY BE TERMINATED IN CERTAIN
CIRCUMSTANCES, WE MAY LOSE, AMONG OTHER THINGS, THE RIGHT TO USE THE AT&T BRAND
NAME
Our business strategy depends on our relationship with AT&T Wireless. We
are depending on co-branding, roaming and service relationships with them under
our joint venture agreements with them. These relationships are central to our
business plan. The AT&T Wireless agreements create an organizational and
operational structure that defines the relationships between AT&T Wireless and
us. Because of our dependence on these relationships, it is important for you
to understand that there are circumstances in which AT&T Wireless can terminate
our right to use their brand name, as well as other important rights under the
joint venture agreements, if we violate the terms of the joint venture
agreements or if certain other events occur.
AT&T Wireless can terminate our license to use the AT&T brand name,
designation as a member of the AT&T Wireless Network, or use of other AT&T
service marks if we fail to meet AT&T Wireless's quality standards, violate the
terms of the license or otherwise breach one of the AT&T Wireless agreements.
AT&T Wireless has also retained the right to terminate its relationship with us
in the event of a "Disqualifying Transaction," as defined in the section headed
"Joint Venture Agreements With AT&T Wireless," which is in essence, a major
financial transaction involving AT&T Corp. and another entity that owns FCC
mobile wireless licenses covering at least 25% of our Pops.
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The exercise by AT&T Wireless of any of these rights, or other rights described
in the AT&T Wireless agreements, could significantly and materially affect our
operations, future prospects and results of operations. This is because our
business strategy largely involves leveraging the benefits of our AT&T Wireless
affiliation and our membership in the AT&T Wireless Network.
OUR RELATIONSHIP WITH AT&T WIRELESS MAY RESULT IN A CONFLICT OF INTEREST
Our interests and those of AT&T Wireless may conflict, and there can be no
assurance that any conflict will be resolved in our favor. Under a
stockholders' agreement, AT&T Wireless has the right to designate two of the
thirteen directors on our Board and approve the selection of three other
director nominees. AT&T Wireless owes no duty to us except to the extent
expressly set forth in the joint venture agreements. Officers and directors
generally do not have fiduciary duties to holders of debt securities such as
the notes.
WE FACE INTENSE COMPETITION FROM OTHER PCS AND CELLULAR PROVIDERS AND FROM
OTHER TECHNOLOGIES
The viability of our PCS business will depend upon, among other things,
our ability to compete, especially on price, reliability, quality of service
and availability of voice and data features. In addition, our ability to
maintain the pricing of our services may be limited by competition, including
the entry of new service providers in our markets.
There are two established cellular providers in each of our markets. These
providers have significant infrastructure in place, often at low historical
cost, have been operational for many years, have substantial existing
subscriber bases and have substantially greater capital resources than we do.
In addition, in most of our markets, there are at least three PCS providers
currently offering commercial service or likely to begin offering service
before we will. We will also face competition from paging, dispatch and
conventional mobile radio operations, specialized mobile radio, called SMR and
enhanced specialized mobile radio, called ESMR, including those ESMR networks
operated by Nextel Communications and its affiliates in our markets. We will
also be competing with resellers of wireless services. We expect competition in
the wireless telecommunications industry to be dynamic and intense as a result
of the entrance of new competition and the development and deployment of new
technologies, products and services.
In the future, cellular and PCS providers will also compete more directly
with traditional landline telephone service operators, and may compete with
services offered by energy utilities, and cable and wireless cable operators
seeking to offer communications services by leveraging their existing
infrastructure. Additionally, continuing technological advances in
telecommunications, the availability of more spectrum and FCC policies that
encourage the development of new spectrum-based technologies make it impossible
to accurately predict the extent of future competition.
BECAUSE WE DEPEND ON EQUIPMENT AND SERVICE VENDORS TO BUILD OUT OUR PCS
NETWORK, WE CANNOT BE CERTAIN THAT OUR PCS NETWORK WILL BE BUILT OUT IN A
TIMELY AND COST-EFFECTIVE MANNER
Our future financial condition depends on our ability to build out rapidly
and then operate a commercial PCS network in our markets. To do so effectively
will require the timely delivery of infrastructure equipment for use in our
cell sites and switching offices, as well as handsets. There is considerable
demand for PCS infrastructure equipment that may result in substantial backlogs
of orders and long lead times for delivery of certain types of equipment.
Although we have entered into an exclusive equipment supply agreement with
Ericsson for the purchase of at least $300.0 million of certain equipment and
services related to the buildout of our PCS system over a five-year period, we
cannot be certain that we will receive this equipment in the quantities that
are needed to complete the buildout in our markets. If we do not receive this
equipment on time, then we will be unable to begin our PCS operations on
schedule. Because of our exclusive arrangements with Ericsson, our ability to
adhere to our buildout schedule will depend significantly on the ability of
Ericsson to deliver its equipment in a timely fashion. We cannot be certain
that Ericsson or any other vendor will be able to provide us with the equipment
to build out
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our markets in a timely and cost-effective manner. The termination of the
Ericsson agreement or the failure of any of the vendors to perform under any
supply agreement would adversely affect our ability to begin operations as
planned.
In addition to equipment vendors, we depend on our service vendors for
radiofrequency engineering services, site acquisition services and
build-to-suit site construction services. If any of these service vendors fail
to perform on schedule, we may not be able to begin our PCS operations on
schedule.
We anticipate that our subscribers will access wireless services in our
markets and throughout the AT&T Wireless Network by using tri-mode handsets.
Two companies worldwide, Ericsson and Nokia Corporation, currently manufacture
and supply IS-136 TDMA tri-mode handsets in commercial quantities. Other
manufacturers are expected to supply tri-mode handsets in commercial quantities
by the end of 1999. If our vendors fail to supply these handsets when expected,
we will be required to delay our launch of service or offer our customers
handsets without tri-mode capabilities. Without tri-mode handsets, our
customers will not be able to roam on both analog cellular and digital cellular
systems. While we believe we will be able to purchase tri-mode handsets in
sufficient quantity to launch our service as planned, we may be unable to
obtain such handsets from our vendors in the quantities or at the prices we
expect. In that event, our service, our business and our operating results
could be adversely affected.
WE MAY BE UNABLE TO BUILD OUT OUR PCS NETWORK OR PROVIDE PCS SERVICE IN CERTAIN
OF OUR MARKETS
If we are unable to implement our construction plan, we may also be unable
to provide, or may be delayed in providing, PCS service in certain of our
markets. To complete construction of our PCS network, we must first complete
the design of the network, acquire, purchase and install equipment, test the
network and relocate or otherwise accommodate microwave users currently using
the spectrum. Construction of our PCS network will also depend, to a
significant degree, on our ability to lease or acquire sites for the location
of our transmission equipment.
In areas where we are unable to co-locate our transmission equipment on
existing facilities, we will need to negotiate lease or acquisition agreements,
which may involve competitors as counterparties. In many cases, we will be
required to obtain zoning variances and other governmental approvals or
permits. In addition, because of concern over radiofrequency emissions and
tower appearance, local governments, including one city within our markets,
Knoxville, Tennessee, affecting approximately four cell sites, have instituted
moratoria on further construction of antenna sites until the respective health,
safety and historic preservation aspects of this matter are studied further.
Accordingly, we may be unable to construct our PCS network in any particular
market in accordance with our current construction plan and schedule. As a
result, our growth may be limited, our market entry may be delayed and the
costs of building out new markets may increase. Any one of these factors would
be likely to adversely affect our future operating performance in such markets.
THE TECHNOLOGY CHOSEN BY US MAY BECOME OBSOLETE
The wireless telecommunications industry is experiencing significant
technological changes, as evidenced by the increasing pace of digital
installations in existing analog cellular systems, evolving industry standards,
ongoing improvements in the capacity and quality of digital technology, shorter
development cycles for new products and enhancements, and changes in consumer
requirements and preferences. To remain competitive, we must develop or gain
access to new technologies in order to increase product performance and
functionality and to increase cost-effectiveness. Given the emerging nature of
the PCS industry, alternative technological and service advancements could
materialize in the future and prove viable, which could render the IS-136 TDMA
technology employed by us obsolete and, as a result, could have a material
adverse effect on our business and operating results.
OUR DIGITAL PCS TECHNOLOGY MAY NOT GAIN CUSTOMER ACCEPTANCE
Three standards are being used by PCS providers in the United States:
IS-136 TDMA, CDMA and GSM. Although all three standards are digital
transmission technologies and thus share certain basic characteristics and
contrasts to analog transmission technology, they are not compatible or
interchangeable with each other.
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To roam in other markets where no PCS licensee utilizes the IS-136 TDMA
standard, our subscribers must utilize tri-mode handsets to use an analog or
digital cellular system in such markets. Generally, tri-mode handsets are more
expensive than single- or dual-mode handsets. The higher cost of these handsets
may impede our ability to attract subscribers or achieve positive cash flow as
planned.
It is anticipated that CDMA-based PCS providers will own licenses covering
virtually all of the United States population. Other PCS providers have
deployed GSM technology in many of our markets. GSM is the prevalent standard
in Europe.
It is possible that a digital transmission technology other than IS-136
TDMA may gain acceptance in the United States sufficient to affect adversely
the resources currently devoted by vendors to improving IS-136 digital cellular
technology. Any differences that may from time to time exist between the
technology deployed by the other wireless telecommunications service providers,
such as CDMA, GSM or other transmission technology standards that may be
developed in the future, may affect customer acceptance of the services we
offer. If subsequent to our deployment of IS-136 TDMA, consumers perceive that
another technology has marketplace advantages over IS-136 TDMA, we could
experience a competitive disadvantage or be forced to implement that technology
at substantially increased cost.
WE EXPECT TO HAVE INCREASED OPERATING COSTS DUE TO THIRD-PARTY FRAUD
As do most companies in the wireless industry, we will likely incur costs
associated with the unauthorized use of our network, including administrative
and capital costs associated with detecting, monitoring and reducing the
incidence of fraud. Fraud impacts interconnection costs, capacity costs,
administrative costs, fraud prevention costs and payments to other carriers for
unbillable fraudulent roaming.
USE OF WIRELESS HANDSETS MAY POSE HEALTH AND SAFETY RISKS
Media reports have suggested that, and studies are currently being
undertaken to determine whether, radiofrequency emissions from cellular and PCS
wireless handsets may be linked with health risks, including cancer, and
interference with various electronic medical devices, including hearing aids
and pacemakers.
Concerns over radiofrequency emissions may discourage the use of wireless
communications devices, such as PCS handsets, which could adversely affect our
business. In addition, the FCC requires that certain transmitters, facilities,
operations, and mobile and portable transmitting devices used in PCS handsets
meet specific radiofrequency emission standards. Compliance with any new
restrictions could materially increase our costs. Concerns about radiofrequency
emissions may affect our ability to obtain licenses from government entities
necessary to construct microwave sites in certain locations.
Separately, measures that would require hands free use of mobile phones
while operating motor vehicles have been proposed or are being considered in
legislatures in Connecticut, Hawaii, Illinois, Maryland, New York and Ohio,
among other states. Although no state has enacted a law barring the use of
mobile phones, California requires rental cars with mobile phones to include
written operating instructions concerning safe use, Florida permits mobile
phone use as long as the motorist has one ear free to hear surrounding sound
and Massachusetts allows mobile phone use as long as it does not interfere with
the safe operation of the vehicle and as long as the motorist keeps one hand on
the steering wheel at all times.
We cannot predict the success of the proposed laws concerning hands free
car phone use or the effect on usage of mobile phones as a result of the
publicity surrounding the consideration or passage of such laws. In addition,
more restrictive measures or measures aimed at wireless services companies as
opposed to users may be proposed or passed in state legislatures in the future.
The proliferation of such legislation could materially adversely affect us by
requiring us to modify our operations or business plans in response to such
restrictions.
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OUR FCC LICENSES MAY BE REVOKED UNDER CERTAIN CIRCUMSTANCES
Our principal assets are PCS licenses issued by the FCC. The FCC has
imposed certain requirements on its licensees, including PCS operators. For
example, PCS licenses may be revoked by the FCC at any time for cause,
including failure to comply with the terms of the licenses, a violation of FCC
regulations, failure to continue to qualify for the licenses, malfeasance or
other misconduct. The loss of any license, or an action that threatens the loss
of any license, would have a material adverse effect on our business and our
operating results. We have no reason, however, to believe that any of our
licenses will be revoked or will not be renewed.
C- and F-Block License Requirements. The FCC imposed certain additional
restrictions on its C- and F-Block licenses. Participants in the C- and F-Block
auctions, including our predeccessors, Airwave Communications and Digital PCS,
which contributed our C- and F-Block licenses to us, were subject to certain
requirements to qualify as an entrepreneur, as defined by the FCC. In addition,
because Airwave Communications and Digital PCS qualified as small businesses,
as defined by the FCC at the time of the C-Block auction and very small
businesses, as defined by the FCC at the time of the F-Block auction, they
received substantial bidding credits and became entitled to pay a large portion
of the net purchase price for their licenses over a ten-year period at special
interest rates and terms, including making payments of interest only for a
period of time.
With respect to the C- and F-Block licenses, we believe that Airwave
Communications and Digital PCS satisfied the FCC's eligibility requirements for
those licenses. We intend to maintain diligently our qualification for those
licenses. If we do not comply with FCC rules, the FCC could fine us, revoke our
PCS licenses or require a restructuring of our equity. Any of these events
could adversely affect our business and financing.
Network Buildout Requirements. All PCS licenses, including those
contributed to us by AT&T Wireless, Airwave Communications and Digital PCS, are
subject to the FCC's buildout requirements. We have developed a buildout plan
that meets all FCC requirements. However, we may be unable to meet our buildout
schedule. If there are delays in implementing our network buildout, the FCC
could reassess our authorized service area or, in extreme cases, it may revoke
our licenses or impose fines.
Foreign Ownership Limitations. The current restrictions on foreign
ownership could adversely affect our ability to attract additional equity
financing from entities that are, or are owned by, foreign interests. We
believe that we do not have foreign ownership in excess of applicable limits.
However, if our foreign ownership were to exceed the then-applicable limits in
the future, the FCC could revoke our PCS licenses or order an ownership
restructuring.
BECAUSE WE FACE BROAD AND EVOLVING GOVERNMENT REGULATION, WE MAY HAVE TO MODIFY
OUR BUSINESS PLANS OR OPERATIONS IN THE FUTURE
The licensing, construction, operation, sale and interconnection
arrangements of wireless telecommunications systems are regulated to varying
degrees by the FCC, Congress and state and local regulatory agencies. This
regulation is continually evolving. There are a number of issues as to which
regulation has been or in the future may be introduced, including interference
between different types of wireless telecommunications systems and the effect
of wireless telecommunications equipment on medical equipment and devices. As
new regulations are promulgated on these or other subjects, we may be required
to modify our business plans or operations to comply with any new regulations.
It is possible that the FCC, Congress or any state or local regulatory agency
having jurisdiction over our business will adopt or change regulations or take
other actions that could adversely affect our business and our operating
results.
The Telecommunications Act of 1996 mandated significant changes in
existing regulation of the telecommunications industry to promote competitive
development of new service offerings, to expand public availability of
telecommunications services and to streamline regulation of the industry.
Nevertheless, the implementation of these mandates by the FCC and state
authorities will involve numerous changes in established rules and policies
that could adversely affect our business.
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The government financing for C- and F-Block licenses is evidenced by an
FCC installment payment plan note and a security agreement for each license we
acquired in the C- and F-Block auctions. Terms and conditions of the FCC notes
have not yet been definitively interpreted, including, among other things,
matters involving collateral and the assignability of PCS licenses.
IF WE FAIL TO SATISFY FCC CONTROL GROUP REQUIREMENTS, WE MAY LOSE OUR C- AND
F-BLOCK LICENSES
To retain the C- and F-Block licenses and the favorable government
financing granted to us, we must maintain our designated entity status as an
entrepreneur and small business or very small business. To maintain all of the
benefits of our designated entity status, our control group and qualifying
investors must retain certain minimum stock ownership and control of our voting
stock, as well as legal and actual control of us for ten years from the date of
grant of our C- and F-Block PCS licenses. The FCC has indicated that it will
not rely solely on legal control in determining whether the control group and
its qualifying investors are truly in control of an entity. Even if the control
group and the qualifying investors hold the requisite percentages of equity and
voting control, the FCC may still inquire to determine whether actual control
exists.
OUR SUBSIDIARIES' GUARANTEES OF THE NOTES MAY BE VOID UNDER CERTAIN
CIRCUMSTANCES
We are a holding company with no direct operations and no significant
assets other than the stock of our subsidiaries. We will depend on funds from
our subsidiaries to meet our obligations, including cash interest payments on
the notes beginning in 2004. Our operating subsidiary, Tritel Communications,
Inc., and our finance subsidiary, Tritel Finance, Inc., will guarantee our
obligations under the notes and all of our future subsidiaries, other than
subsidiaries whose primary business is to hold PCS licenses and subsidiaries
owning those subsidiaries, may be required to guarantee the notes. You may need
to be able to enforce the subsidiary guarantees to recover your investment in
the notes.
The issuance of a subsidiary guarantee may be subject to review under
federal or state fraudulent conveyance laws in the event of the bankruptcy or
other financial difficulty of the subsidiary guarantor. Although laws differ
among various jurisdictions, in general under fraudulent conveyance laws, a
court could subordinate or avoid a guarantee if it found that:
o the debt under the subsidiary guarantee was incurred with actual intent
to hinder, delay or defraud creditors, or
o the subsidiary guarantor did not receive fair consideration or
reasonably equivalent value for its subsidiary guarantee and the
subsidiary guarantor:
o was insolvent or rendered insolvent because of its subsidiary
guarantee,
o was engaged in a business or transaction for which its remaining
assets constituted unreasonably small capital, or
o intended to incur, or believed that it would incur, debts beyond its
ability to pay upon maturity.
A court is likely to find that a subsidiary guarantor did not receive fair
consideration or reasonably equivalent value for its subsidiary guarantee to
the extent that its liability under the subsidiary guarantee is greater than
the direct benefit it received from the issuance of the notes. By its terms,
each subsidiary guarantee will limit the liability of the subsidiary guarantor
to the maximum amount that it could pay without the subsidiary guarantee being
deemed a fraudulent transfer. A court may not give effect to this limitation on
liability. In this event, a court may find that the issuance of the subsidiary
guarantee rendered the subsidiary guarantor insolvent. If a court voided the
guarantee or held it unenforceable, holders of notes would cease to have a
claim against that subsidiary guarantor and would be solely creditors of our
company and any remaining guarantors. If a court were to give effect to this
limitation on liability, the amount that the subsidiary guarantor, whose
liability was so limited, would be found to have guaranteed might be so low
that there would not be sufficient funds to pay the notes in full.
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YOUR RIGHT TO RECEIVE PAYMENTS ON THE NOTES AND GUARANTEES IS JUNIOR TO
PAYMENTS ON SENIOR INDEBTEDNESS AND TO OUR SECURED OBLIGATIONS
The notes will be subordinated to all our present and future senior debt
and the parent and subsidiary guarantees will be subordinated to all present
and future senior debt of the guarantors. The notes will not be secured by any
of our assets. Our obligations under our bank facility are guaranteed by our
parent and all of our subsidiaries and are secured by substantially all of our
assets and the assets of our parent and our subsidiaries other than our PCS
licenses. Certain of our PCS licenses are subject to liens securing our debt to
the FCC.
If we were to become insolvent or were to be liquidated, or if the banks
were to accelerate our payments under our bank facility, our assets would be
available to pay obligations on the notes only after all payments had been made
on our secured and other senior debt. Similarly, if any guarantor were to
become insolvent or were to be liquidated, its assets would be available to pay
obligations on the notes only after all payments had been made on its secured
and senior debt. In any such event, we cannot assure you that sufficient assets
would remain to make any payments on the notes.
Not all of our subsidiaries will guarantee the notes. In the event of a
bankruptcy, liquidation, dissolution, reorganization or similar proceeding with
respect to any of these subsidiaries, the assets of these non-guarantor
subsidiaries will be available to pay obligations on the notes only after all
outstanding liabilities, including trade payables, of these subsidiaries have
been paid in full. As of June 30, 1999, the total liabilities of these
subsidiaries would have been approximately $63.8 million.
BECAUSE A SIGNIFICANT PORTION OF OUR ASSETS ARE INTANGIBLE THEY MAY HAVE LITTLE
VALUE UPON A LIQUIDATION
Our assets consist primarily of intangible assets, principally FCC
licenses, the value of which will depend significantly upon the success of our
PCS network business and the growth of the PCS and wireless communications
industries in general. If we default on our indebtedness or upon our
liquidation, the value of these assets may not be sufficient to satisfy our
obligations. We had a net tangible book value deficit of $259.6 million
attributable to Tritel's common stock as of June 30, 1999.
YEAR 2000 ISSUES COULD CAUSE INTERRUPTION OR FAILURE OF OUR COMPUTER SYSTEMS
We use a significant number of computer systems and software programs in
our operations, including applications used in support of our PCS network
equipment and various administrative functions. Although we believe that our
computer systems and software applications contain source code that is able to
interpret appropriately dates after December 31, 1999, our failure to make or
obtain necessary modifications to our systems and software could result in
systems interruptions or failures that could have a material adverse effect on
our business.
We do not anticipate that we will incur material expenses to make our
systems Year 2000 compliant. However, unanticipated costs necessary to avoid
potential systems interruptions could exceed our present expectations and
consequently have a material adverse effect on our business. In addition, if
our key equipment and service providers fail to make their respective computer
systems and software programs Year 2000 compliant, then such failure could have
a material adverse effect on our business. See "Management's Discussion and
Analysis -- Year 2000."
YOU MAY HAVE TO INCLUDE INTEREST IN YOUR TAXABLE INCOME BEFORE YOU RECEIVE CASH
PAYMENTS
The notes will be issued at a substantial discount from their principal
amount at maturity. Consequently, you will generally be required to include
amounts in your gross income for federal income tax purposes before you receive
the cash payments attributable to that income. See "Certain Federal Income Tax
Considerations."
In the event of our bankruptcy, your claim may be limited to the issue
price, as determined by the bankruptcy court, plus the accrued portion of the
original issue discount at the date of the bankruptcy filing. To the extent
that the federal bankruptcy laws differ from the Internal Revenue
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Code in determining the method of amortization of original issue discount, you
may realize taxable gain or loss upon payment of your claim in bankruptcy.
WE ARE NOT OBLIGATED TO NOTIFY YOU OF UNTIMELY OR DEFECTIVE TENDERS OF
OUTSTANDING NOTES.
We will issue registered notes pursuant to this exchange offer only after
a timely receipt of your outstanding notes, a properly completed and duly
executed letter of transmittal and all other required documents. Therefore, if
you want to tender your outstanding notes, please allow sufficient time to
ensure timely delivery. We are under no duty to give notification of defects or
irregularities with respect to the tenders of outstanding notes for exchange.
AN ACTIVE TRADING MARKET FOR THE NOTES MAY NOT DEVELOP.
The outstanding notes were not registered under the Securities Act nor
under the securities laws of any state and may not be resold unless they are
subsequently registered or an exemption from the registration requirements of
the Securities Act and applicable state securities laws is available. The
registered notes will be registered under the Securities Act, but will
constitute a new issue of securities with no established trading market, and
there can be no assurance as to:
o the liquidity of any such market that may develop;
o the ability of registered note holders to sell their notes; or
o the price at which the registered note holders would be able to sell
their notes.
If such a market were to exist, the registered notes may trade at higher
or lower prices than their principal amount or purchase price, depending on
many factors, including prevailing interest rates, the market for similar
debentures and the financial performance of Tritel PCS.
The notes are designated for trading among qualified institutional buyers
in The Portal Market. We understand that certain of the Initial Purchasers
presently intend to make a market in the notes. However, they are not obligated
to do so, and any market-making activity with respect to the notes may be
discontinued at any time without notice. In addition, such market-making
activity will be subject to the limits imposed by the Securities Act and the
Securities Exchange Act of 1934, and may be limited during the exchange offer
or the pendency of an applicable shelf registration statement. There can be no
assurance that an active trading market will exist for the notes or that such
trading market will be liquid.
Notes that are not tendered or are tendered but not accepted will,
following the consummation of the exchange offer, continue to be subject to the
existing restrictions upon transfer, and, upon consummation of the exchange
offer, certain registration rights with respect to the outstanding notes will
terminate. In addition, any outstanding note holder who tenders in the exchange
offer for the purpose of participating in a distribution of the registered
notes may be deemed to have received restricted securities, and if so, will be
required to comply with the registration and prospectus delivery requirements
of the Securities Act in connection with any resale transaction. To the extent
that outstanding notes are tendered and accepted in the exchange offer, the
trading market for untendered and tendered but unaccepted outstanding notes
could be adversely affected.
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INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements, including statements
regarding, among other items:
o future earnings and other operating results,
o the estimated cost and timing of our network buildout,
o competition and
o prospects and trends of the wireless industry.
Other statements contained in this prospectus are forward-looking
statements and are not based on historical fact, such as statements containing
the words "believes," "may," "will," "estimates," "continue," "anticipates,"
"intends," "expects" and words of similar import.
These forward-looking statements are subject to risks, uncertainties and
assumptions, including those discussed in "Risk Factors," "Management's
Discussion and Analysis," "Business" and elsewhere in this prospectus.
Actual results may differ materially from those projected. We believe that
our estimates are reasonable; but you should not unduly rely on these
estimates, which are based on our current expectations. We undertake no
obligation to update any forward-looking statement or statements to reflect
events or circumstances after the date on which such statement is made or to
reflect the occurrence of unanticipated events. New factors emerge from time to
time, and it is not possible for us to predict all of these factors. Further,
we cannot assess the impact of each such factor on our business or the extent
to which any factor, or combination of factors, may cause actual results to be
materially different from those contained in any forward-looking statements. We
make no representation, warranty (express or implied) or assurance as to the
completeness or accuracy of these projections and, accordingly, neither express
an opinion or any other form of assurance regarding them.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the Commission a registration statement on Form S-4 to
register the new notes being offered in this prospectus. This prospectus, which
forms part of the registration statement, does not contain all of the
information included in the registration statement. For further information
about Tritel PCS and the registered notes offered in this prospectus, you
should refer to the registration statement and its exhibits.
Our Commission filings are available to the public over the internet at
the Commission's web site at http://www.sec.gov/. You also may read and copy
any document we file at the Commission's public reference room at 450 Fifth
Street, N.W., Washington, D.C. 20549. These documents also are available at the
public reference rooms at the Commission's regional offices in New York, New
York and Chicago, Illinois. Please call the Commission at 1-800-SEC0330 for
further information on the public reference rooms.
While any original notes remain outstanding, we will make available, upon
request, to any holder and any prospective purchaser of original notes the
information required pursuant to Rule 144A(d)(4) under the Securities Act
during any period in which we are not subject to Section 13 or 15(d) of the
Exchange Act. Written requests for such information should be directed to
Tritel, Inc., 111 E. Capitol Street, Suite 500, Jackson, Mississippi 39201,
Attention: Corporate Secretary.
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<PAGE>
USE OF PROCEEDS
Tritel PCS will not receive any cash proceeds from the issuance of the
registered notes in exchange for the outstanding notes. In consideration for
issuing the registered notes, Tritel PCS will receive outstanding notes in like
original principal amount at maturity. Outstanding notes received in the
exchange offer will be cancelled.
The net proceeds to Tritel PCS from the offering of the original notes
were approximately $191.0 million after deducting the discount payable to the
Initial Purchasers and the estimated offering expenses. The net proceeds of
that offering, together with the cash proceeds received by Tritel, Inc. from
the sale of its equity and funds drawn under Tritel PCS's bank facility, will
be used to cover each of the following through the end of 2001, when Tritel PCS
anticipates that it will have substantially completed the planned buildout of
its network and will have achieved positive cash flow from operations:
o approximately $529.9 million for Tritel PCS's capital expenditures,
including the buildout of its PCS network,
o approximately $125.2 million for cash interest and to cover financing
fees and expenses,
o approximately $192.9 million for acquisition of PCS licenses and
intangible assets, and
o approximately $174.1 million for working capital, including operating
cash flow losses.
20
<PAGE>
CAPITALIZATION
The following table sets forth the consolidated capitalization of Tritel,
Inc. as of June 30, 1999. The following table should be read in conjunction
with Tritel, Inc.'s consolidated financial statements and accompanying notes
thereto included elsewhere in this prospectus.
<TABLE>
<CAPTION>
JUNE 30, 1999
---------------
(IN THOUSANDS)
<S> <C>
Cash, cash equivalents and restricted cash .................................... $ 398,262
=========
Long-term debt:
Bank facility(a) ............................................................. $ 200,000
FCC debt(b) .................................................................. 41,430
Senior Subordinated Discount Notes ........................................... 203,656
---------
Total long-term debt ...................................................... 445,086
---------
Series A 10% redeemable convertible preferred stock(c) ........................ 90,668
Adjustment to fair value ...................................................... (21,559)
---------
Total Series A redeemable preferred stock(d) .............................. 69,109
Stockholders' equity(c):
Preferred Stock, par value -- $.01 per share; authorized 1,500,000 shares:
Series B Preferred Stock, no shares issued and outstanding ................ --
---------
Series C Preferred Stock, 184,233 shares issued and outstanding ........... 124,912
---------
Series D Preferred Stock, 46,374 shares issued and outstanding ............ 46,374
Adjustment to fair value .................................................. (11,278)
---------
Total Series D preferred stock(d) ....................................... 35,096
---------
Common Stock, par value -- $.01 per share; authorized 3,040,009 shares;
40,705 shares issued and outstanding ....................................... --
Deficit accumulated during the development stage ............................. (31,914)
---------
Total stockholders' equity ................................................. 128,094
=========
Total capitalization ...................................................... $ 642,289
=========
</TABLE>
- ----------
(a) See Note 20 to the Consolidated Financial Statements.
(b) The aggregate face amount of the FCC debt is $47.5 million, but this
debt is recorded in Tritel's financial statements at a discount to
reflect favorable financing terms.
(c) See Note 10 to the Consolidated Financial Statements.
(d) See the Consolidated Balance Sheets and related Notes.
21
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
The following selected financial data for the periods indicated have been
derived from the Consolidated Financial Statements of Tritel, Inc. which
statements, except for the six-month periods ended June 30, 1998 and 1999, the
related balance sheet data as of June 30, 1999 and the period from inception to
June 30, 1999, have been audited by KPMG Peat Marwick LLP, independent
certified public accountants, whose report thereon, other than operations for
the period from inception through December 31, 1995 and balance sheets at
December 31, 1995 and 1996, appears elsewhere in this prospectus. The unaudited
financial data referred to above includes, in the opinion of management, all
necessary adjustments required for a fair presentation of such data. The
results of operations for the six months ended June 30, 1999 are not
necessarily indicative of results to be anticipated for the entire year. The
selected financial data should be read in conjunction with "Management's
Discussion and Analysis" and the Consolidated Financial Statements and notes
thereto of Tritel included elsewhere in this prospectus.
<TABLE>
<CAPTION>
PERIOD FROM
INCEPTION TO
DECEMBER 31, YEARS ENDED DECEMBER 31,
-------------- -------------------------------------
1995 1996 1997 1998
-------------- ----------- ----------- -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
STATEMENTS OF OPERATIONS DATA:
Revenues ...................... $ -- $ -- $ -- $ --
------ -------- -------- ---------
Operating expenses:
Plant expenses ................ -- 4 104 1,939
General and administrative..... 121 1,481 3,123 4,947
Other operating expenses ...... -- 7 48 800
------ -------- -------- ---------
Total operating expense ...... 121 1,492 3,275 7,686
------ -------- -------- ---------
Operating loss ................ (121) (1,492) (3,275) (7,686)
Interest income ............... 1 31 121 77
Interest expense and
financing cost ............... -- -- -- (722)
------ -------- -------- ---------
Loss before extraordinary
item and income taxes ....... (120) (1,461) (3,154) (8,331)
Extraordinary item --
Loss on return of spectrum..... -- -- -- (2,414)
------ -------- -------- ---------
Loss before income taxes...... (120) (1,461) (3,154) (10,745)
Income tax benefit ............ -- -- -- --
------ -------- -------- ---------
Net loss ..................... $ (120) $ (1,461) $ (3,154) $ (10,745)
====== ======== ======== =========
<CAPTION>
CUMULATIVE CUMULATIVE
AMOUNTS SIX MONTHS AMOUNTS
SINCE INCEPTION, ENDED SINCE INCEPTION,
AT DECEMBER 31, JUNE 30, AT JUNE 30,
------------------ ------------------------ -----------------
1998 1998 1999 1999
------------------ ----------- ------------ -----------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
STATEMENTS OF OPERATIONS DATA:
Revenues ...................... $ -- $ -- $ -- $ --
--------- -------- --------- ---------
Operating expenses:
Plant expenses ................ 2,047 111 3,946 5,993
General and administrative..... 9,672 1,616 7,204 16,876
Other operating expenses ...... 855 33 5,122 5,977
--------- -------- --------- ---------
Total operating expense ...... 12,574 1,760 16,272 28,846
--------- -------- --------- ---------
Operating loss ................ (12,574) (1,760) (16,272) (28,846)
Interest income ............... 230 27 5,332 5,562
Interest expense and
financing cost ............... (722) -- (7,334) (8,056)
--------- -------- --------- ---------
Loss before extraordinary
item and income taxes ....... (13,066) (1,733) (18,274) (31,340)
Extraordinary item --
Loss on return of spectrum..... (2,414) -- -- (2,414)
--------- -------- --------- ---------
Loss before income taxes...... (15,480) (1,733) (18,274) (33,754)
Income tax benefit ............ -- -- 6,036 6,036
--------- -------- --------- ---------
Net loss ..................... $ (15,480) $ (1,733) $ (12,238) $ (27,718)
========= ======== ========= =========
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
------------------------------------------------------- ----------
1995 1996 1997 1998 1999
-------- ---------- ----------- ----------------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents .......................... $ 400 $ 32 $ 1,763 $ 846 $393,101
Other current assets ............................... 4,501 5,000 285 960 2,631
Property and equipment, net ........................ -- 10 13 13,816 60,686
FCC licensing costs ................................ 40 62,503 99,425 71,466 (1) 158,893
Intangible assets .................................. -- -- -- -- 38,857
Other assets ....................................... 3 186 1,027 1,933 42,877
------ ------- -------- --------- --------
Total assets ....................................... $4,944 $67,731 $102,513 $ 89,021 $697,045
====== ======= ======== ========= ========
Total current liabilities .......................... $3,425 $ 8,553 $ 8,425 $ 32,911 $ 7,345
Long-term debt ..................................... -- 53,504 77,200 51,599 (2) 445,086
Other non-current liabilities ...................... -- -- 8,126 6,494 47,411
Total Series A redeemable preferred stock .......... -- -- -- -- 69,109
Total stockholders' equity (deficit) ............... 1,519 5,674 8,762 (1,983) 128,094
------ ------- -------- --------- --------
Total liabilities and stockholders' equity ......... $4,944 $67,731 $102,513 $ 89,021 $697,045
====== ======= ======== ========= ========
OTHER FINANCIAL DATA:
Ratio of earnings to fixed charges ................. -- -- -- -- --
</TABLE>
- ----------
(1) See Note 5 to the consolidated financial statements.
(2) See Note 8 to the consolidated financial statements.
For purposes of determining the ratio of earnings to fixed charges,
earnings are defined as income before income taxes plus fixed charges. Fixed
charges consist of interest expense and other financing costs on all
indebtedness, including amortization of discount and deferred debt issuance
costs. Earnings were insufficient to cover fixed charges by $140,000 for the
period from inception, July 27, 1995, through December 31, 1995, $4.8 million,
$10.4 million and $18.9 million for the years ended December 31, 1996, 1997 and
1998, respectively, and $6.4 million and $28.8 million for the six-month
periods ended June 30, 1998 and 1999.
23
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
The following discussion and analysis of the financial condition and
results of operations of Tritel PCS and Tritel, Inc. should be read in
conjunction with the consolidated financial statements and notes thereto of
Tritel, Inc., which are included in this prospectus. See also "Special Note
Regarding Forward Looking Statements."
GENERAL
Tritel PCS is a development stage enterprise formed for the purpose of
developing PCS markets in the south-central United States. Tritel PCS's PCS
licenses cover approximately 14.0 million Pops in contiguous markets in the
states of Alabama, Georgia, Kentucky, Mississippi and Tennessee. As a member of
the AT&T Wireless Network, Tritel PCS is the exclusive provider to AT&T
Wireless of mobile wireless PCS services in virtually all of its markets.
Tritel PCS's agreements with AT&T Wireless and certain affiliates allow it to
use the AT&T brand name and logo together with the SunCom name.
Tritel PCS has incurred significant expenditures in conjunction with its
organization and financing, PCS license acquisitions, hiring key personnel and
the initial design and construction of its PCS network facilities. Tritel PCS
has not yet commenced commercial operations and, as a result, has not yet
generated operating revenues or earnings. Tritel PCS intends to initiate the
commercial launch of its service in Jackson, Mississippi in the third quarter
of 1999 and expects to initiate service in all of its markets by the end of
2001. The timing of launch in individual markets will be determined by various
factors, principally the success of Tritel PCS's site acquisition program,
zoning and microwave relocation activities, equipment delivery schedules and
local market and competitive considerations. Tritel PCS intends to continue to
expand its coverage in its PCS markets to reach approximately 80% of the
licensed Pops in the aggregate by the end of 2001. Thereafter, Tritel PCS will
evaluate further coverage expansion on a market-by-market basis.
The extent to which Tritel PCS is able to generate operating revenues and
earnings will be dependent on a number of business factors, including
successfully deploying the PCS network and attaining profitable levels of
market demand for Tritel PCS's products and services.
FACTORS AFFECTING FUTURE OPERATIONS
Tritel PCS expects to generate substantially all of its revenues from
sales of mobile wireless telephony services, including local, roaming and long
distance. Tritel PCS will sell its services and equipment to retail consumers,
businesses, institutions and governments at rates and prices that will be
competitive with other wireless providers in its markets. Tritel PCS will
distribute to retail consumers through company-owned stores and to a lesser
extent, independent retail distributors. Tritel PCS will also employ a direct
sales force that will focus primarily on business, institutional and government
sales. Tritel PCS believes that it will be able to generate higher sales and
penetration through the use of company-owned stores and a direct sales force
than would otherwise be achieved through dependence on agents and independent
retailers.
Tritel PCS will market its services and products under the national AT&T
Wireless and regional SunCom brand names. Tritel PCS's marketing efforts will
seek to distinguish its service and product offerings on the basis of the
quality and extent of its wireless coverage, including the virtually nationwide
coverage its subscribers will enjoy through the AT&T Wireless Network, and the
digital service features that will be available to its subscribers. Tritel PCS
believes that this focus on the AT&T and SunCom brand names and quality of
service, coupled with proactive customer care and simplified and flexible
billing will increase revenues and margins, increase customer loyalty and
reduce churn and cost per gross added subscriber.
Industry statistics indicate that average revenue per unit (ARPU) for the
wireless communications business has declined substantially over the period
1993-1998. Although this decline has stabilized recently, management believes
that some deterioration in ARPU will continue. While
24
<PAGE>
management believes that Tritel PCS will benefit from a decline in certain
direct operating costs, including billing, interconnect, roaming and long
distance charges, its ability to improve its margins will depend primarily on
its ability to manage its variable costs, including selling general and
administrative expense and costs per gross added subscriber.
A particular focus of Tritel PCS's strategy will be to reduce subscriber
churn. Industry data suggest that those providers, including PCS providers,
that have offered poor or spotty coverage, poor voice quality, unresponsive
customer care or confusing billing suffer higher than average churn rates.
Accordingly, Tritel PCS will launch service in its markets only after
comprehensive and reliable coverage and service can be maintained in a
particular market. In addition, Tritel PCS's billing systems will be designed
to provide simple and understandable options on flexible cycles.
Tritel PCS will also focus resources on a proactive subscriber retention
program, strict credit policies and alternative methods of payment for
credit-challenged customers. However, Tritel PCS expects PCS churn rates to be
higher than historical trends due to the increase in number of competitors and
expanded marketbase.
OPERATING EXPENSES
Tritel PCS's operating expenses consist of plant operations, sales and
marketing and general and administrative expenses.
Tritel PCS believes that its plant operations expenses will be favorably
affected by its ability to co-locate its antennae and base station equipment on
existing tower sites. Currently, of the total of 1,275 sites that Tritel PCS
plans to build out, it expects to co-locate approximately 70% on existing
towers, enabling Tritel PCS to avoid certain location costs and to share
certain other costs. However, cell site lease costs are competitive, and Tritel
PCS will be responsible for all costs associated with its own base stations and
antennae.
Costs per gross added subscriber include subsidies on handset sales.
Although management expects that handset costs will decline, it does not expect
that it will be able to reduce the overall level of handset subsidies since
management also believes that retail handset prices will decline proportionally
with costs.
Recent industry data indicate that interconnect, roaming and long distance
charges that Tritel PCS will incur will continue to decline, due principally to
competitive pressures and new technologies. Management will focus on
application of systems and procedures to reduce billing expense and improve
subscriber communication. These systems and procedures will include debit
billing, credit card billing, over-the-air payment and Internet billing
systems.
Tritel PCS will incur other costs, including costs related to network
maintenance, administrative overhead, office and store leases, and telephone
and utility costs. These costs will grow significantly as its operations expand
and its customer base and call volumes increase. Over time, these expenses
should represent a reduced percentage of revenues as the customer base grows.
RESULTS OF OPERATIONS
SIX-MONTH PERIODS ENDED JUNE 30, 1998 AND JUNE 30, 1999
Tritel PCS's net loss was $1.7 million for the six months ended June 30,
1998, as compared to a net loss of $12.2 million for the six months ended June
30, 1999. Tritel PCS expects to launch commercial service in some markets in
the third quarter of 1999, and until that time will have no revenue. The
expenses incurred to date primarily relate to developing an infrastructure and
hiring staffing to support the future services Tritel PCS will provide.
Operating Expenses
Plant expenses were $111,000 and $3.9 million for the six months ended
June 30, 1998 and 1999, respectively. Plant expenses include primarily the cost
of engineering and operating staff devoted to the oversight of the design and
implementation of Tritel PCS's network site lease expenses and construction
site office expenses.
25
<PAGE>
Tritel PCS expects that the majority of its future plant expenses will
consist of costs relating to operating the network, including the cost of
interconnection to wireline and other wireless networks, cell site lease costs,
network personnel and repair and maintenance. Tritel PCS expects plant expense
to increase during the remainder of 1999 as it begins commercial operation of
its network in various markets.
General and administrative expenses include primarily the cost of
administrative salaries and benefits, administrative office expenses, legal,
accounting and other professional fees, property taxes and other general office
expenses. General and administrative expenses increased from $1.6 million for
the six month period ended June 30, 1998 to $7.2 million for the six-month
period ended June 30, 1999. The increase was due primarily to increased
staffing in various departments, including information technology, billing and
customer care, accounting, human resources and other administrative functions,
incurred in the preparation for commercial launch of Tritel PCS's network in
1999.
Sales and marketing expenses include primarily the cost of sales and
marketing salaries and benefits, local sales office expenses, and advertising
and promotional expenses. Sales and marketing expenses increased from $20,000
in the first half of 1998 to $2.7 million for the same period in 1999. The
increase was associated with the salary and benefits for sales and marketing
personnel and for market development, including planning and leasing of sales
offices and retail store locations. Tritel PCS expects to incur significant
selling and marketing costs during the remainder of 1999 primarily related to
sales commissions, promotional events and advertising incurred in connection
with market launches in 1999.
Depreciation and amortization expenses were $13,000 for the six-month
period ended June 30, 1998, compared to $2.4 million for the six-month period
ended June 30, 1999. The 1999 expenses related primarily to the amortization of
Tritel PCS's roaming and license agreements with AT&T Wireless and the SunCom
trademark, as well as the depreciation of computer hardware, software,
furniture, fixtures, and office equipment.
Non-Operating Income and Expenses
Interest income increased from $27,000 for the six-month period ended June
30, 1998 to $5.3 million for the six-month period ended June 30, 1999. This
significant increase was a result of Tritel PCS's investment of the cash
received from equity investors of $113.6 million, advances under its bank
facility of $200.0 million and gross proceeds from the sale of senior
subordinated discount notes of approximately $200.2 million. Tritel PCS's
short-term cash investments consist primarily of U.S. Government securities
with a dollar-weighted average maturity of 90 days or less.
Financing costs were $2.2 million for the six-month period ended June 30,
1999. These costs were associated with the January 1999 conversion by Digital
PCS of debt to equity in Airwave Communications.
Interest expense was $5.1 million for the six-months ended June 30, 1999
and consisted of interest on debt in excess of the amount capitalized for the
purpose of completing the network buildout. All interest for the six months
ended June 30, 1998 was capitalized because all debt for that period was
applied to the network buildout.
For the six months ended June 30, 1999, Tritel PCS recorded a deferred
income tax benefit of $6.0 million. No valuation allowance was considered
necessary for this deferred tax asset, principally due to the existence of a
deferred tax liability which was recorded upon the closing of the AT&T
transaction on January 7, 1999. Prior to this date, the predecessor company was
a limited liability corporation and was not subject to income taxes.
YEARS ENDED DECEMBER 31, 1996, DECEMBER 31, 1997 AND DECEMBER 31, 1998
Operating Expenses
Plant expenses were $4,000, $104,000 and $1.9 million for the years ended
December 31, 1996, 1997 and 1998, respectively. These expenses were primarily
related to an increase in engineering and operating staff devoted to the design
and implementation of future operations of Tritel PCS's network.
26
<PAGE>
Tritel PCS expects the majority of its future plant expenses will consist
of costs relating to operating the network including the cost of
interconnection to wireline and other wireless networks, cell site lease costs,
network personnel and repair and maintenance.
General and administrative expenses increased from $1.5 million in 1996,
to $3.1 million in 1997 and $4.9 million in 1998. The increases were due to the
development and growth of infrastructure and staffing relating to information
technology, billing customer care, financial reporting and other administrative
functions incurred in the preparation for commercial launch of Tritel PCS's
network in 1999. Management's strategy of stressing the importance of customer
care will cause the customer care department to become a larger part of ongoing
general and administrative expenses. Billing costs will increase as the number
of customers increases. Tritel's general and administrative expenses also
increased because of the expenses incurred in raising capital for the buildout
and development of the network and certain start-up costs.
Sales and marketing expenses increased from $5,000 in 1996 to $28,000 in
1997 and $452,000 in 1998. These increases were associated with the salary and
benefits for sales and marketing personnel and for market development,
including planning and leasing of regional offices. Management expects to incur
significant selling and marketing costs, including commissions, promotional
events and advertising, as Tritel PCS prepares to launch markets in 1999.
Depreciation and amortization expenses were $2,000 in 1996 compared to
$20,000 in 1997 and $348,000 in 1998. These expenses in 1998 related to the
depreciation of furniture, fixtures and office equipment, as well as the
amortization of deferred charges.
Non-Operating Income and Expenses
Interest expense, net of interest income, for 1998 was $722,000. The
interest expense related to licenses retained by Digital PCS.
During July 1998, Tritel PCS recorded an extraordinary loss of $2.4
million on the forgiveness of debt related to the return of C-Block spectrum
allowed by the FCC under restructuring guidelines.
LIQUIDITY AND CAPITAL RESOURCES
The buildout of the Tritel PCS network and the marketing and distribution
of its products and services will require substantial capital. Tritel PCS
currently estimates that its capital requirements for the period from inception
through the end of 2001, assuming substantial completion of the Tritel PCS
network buildout to cover 80% of the Pops in the aggregate by the end of 2001,
will total approximately $1.0 billion. Tritel PCS estimates those capital
requirements will be met as follows:
Bank facility $ 462.3
Senior subordinated discount notes 200.2
Government financing 47.5
Cash equity 163.4
Non-cash equity 157.9
----------
Total estimated capital requirements $ 1,031.3
==========
On January 7, 1999, Tritel PCS entered into a loan agreement that provides
for a senior bank facility with a group of lenders for an aggregate amount of
$550 million of senior secured credit. The bank facility provides for:
o a $250 million reducing revolving credit facility maturing on June 30,
2007,
o a $100 million term credit facility maturing on June 30, 2007, and
o a $200 million term credit facility maturing on December 31, 2007.
Up to $10 million of the facility may be used for letters of credit. Tritel PCS
estimates that $462.3 million of the $550 million bank facility will be drawn
through the end of 2001 for capital requirements. The terms of the bank
facility will permit Tritel PCS, subject to certain terms and
27
<PAGE>
conditions, including compliance with certain leverage ratios and satisfaction
of buildout and subscriber milestones, to draw up to $550 million to finance
working capital requirements, capital expenditures or other corporate purposes.
As of June 30, 1999, Tritel PCS could have borrowed up to a total of
approximately $550 million pursuant to the terms of the bank facility. See
"Description of Certain Indebtedness -- Bank Facility."
On May 11, 1999, Tritel PCS issued senior subordinated discount notes with
a principal amount at maturity of $372.0 million. These notes were issued at a
substantial discount from their principal amount at maturity for proceeds of
$200.2 million. No interest will be paid or accrued on the notes prior to May
15, 2004. Thereafter, the notes will bear interest at the stated rate. The
notes mature on May 15, 2009.
Airwave Communications and Digital PCS received preferential financing
from the U.S. Government for the C and F-Block licenses, which were contributed
to Tritel, Inc. in exchange for Series C Preferred Stock. As a result, Tritel,
Inc. is obligated to pay $47.5 million to the U.S. Government under the terms
of preferential financing terms. The debt relating to the C-Block licenses
requires interest only payments for the first six years of the term and then
principal and interest payments in years seven through ten. The debt relating
to the F-Block licenses requires interest only payments for the first two years
of the term and then principal and interest payments in years three through
ten.
In connection with the consummation of the joint venture with AT&T
Wireless, Tritel, Inc. received unconditional and irrevocable equity
commitments from institutional equity investors in the aggregate amount of
$149.2 million in return for the issuance of Series C Preferred Stock. On
January 7, 1999, approximately $99.4 million of these commitments were funded.
The remaining equity commitments of $49.8 million are required to be funded on
September 30, 1999. Additionally, on January 7, 1999, Tritel, Inc. received
$14.2 million of cash in exchange for the issuance of Series C Preferred Stock
from Airwave Communications and Digital PCS.
Non-cash equity consists of:
o Series A Preferred Stock and Series D Preferred Stock valued at $137.0
million issued to AT&T Wireless on January 7, 1999 in exchange for the
licenses it contributed and for entering into exclusivity, license and
roaming agreements,
o Series C Preferred Stock valued at $18.3 million issued to Airwave
Communications and Digital PCS on January 7, 1999 in exchange for the
net assets it contributed, and
o Series C Preferred Stock valued at $2.6 million issued to Central
Alabama Partnership on January 7, 1999 in exchange for the net assets it
contributed.
Tritel PCS believes that the proceeds from the senior subordinated
discount notes, together with the financing made available to it by the FCC,
the availability under its bank facility and the equity investments it has
received or that have been committed, will provide it with sufficient funds to
build out its existing network as planned. Although management estimates that
it will have sufficient funds available from its existing financing sources to
build out 80% of its licensed Pops, it is possible that additional funding will
be necessary.
As stated above, Tritel PCS currently estimates that its capital
requirements, including capital expenditures, the cost of acquiring licenses,
working capital, debt service requirements and anticipated operating losses,
for the period from inception through the end of 2001, assuming substantial
completion of the Tritel PCS network buildout to cover 80% of the licensed Pops
in the aggregate by the end of 2001, will total approximately $1.0 billion.
Tritel PCS estimates those capital requirements will be applied as follows:
28
<PAGE>
Acquisition of PCS licenses and exclusivity,
license and roaming agreements $ 192.9
Capital expenditures 529.9
Cash interest and fees 134.4
Working capital 174.1
--------
Total estimated use of capital $1,031.3
========
Tritel, Inc. has applied $192.9 million in capital for the acquisition of
the PCS licenses and the agreements with AT&T Wireless relating to exclusivity,
license and roaming. This amount includes the acquisition of PCS licenses from
AT&T Wireless, Central Alabama Partnership, Airwave Communications and Digital
PCS. The cash portion of this capital requirement of $14.7 million was paid by
Airwave Communications and Digital PCS as a downpayment on the purchase of the
C and F-Block licenses.
Management estimates that capital expenditures associated with the
buildout will total approximately $529.9 million from inception through the end
of 2001, including a commitment to purchase a minimum of $300 million in
equipment and services from Ericsson. Costs associated with the network
buildout include switches, base stations, towers and antennae, radiofrequency
engineering, cell site acquisition and construction, and microwave relocation.
The actual funds required to build out Tritel PCS's network may vary materially
from these estimates, and additional funds could be required in the event of
significant departures from the current business plan, unforeseen delays, cost
overruns, unanticipated expenses, regulatory expenses, engineering design
changes and other technological risks. As of June 30, 1999, Tritel, Inc. had
expended $50.7 million in capital expenditures.
Tritel, Inc. estimates that cash interest and fees through 2001 will total
$134.4 million, including fees relating to the offering of the senior
subordinated discount notes. This amount represents interest and fees on the
senior bank facility and interest on the preferential financing from the U.S.
Government for the C and F-Block licenses. Cash interest will not be paid on
the senior subordinated discount notes until 2004. As of June 30, 1999, Tritel,
Inc. has paid $15.6 million for interest and fees and has incurred fees of
approximately $9 million relating to the offering of the senior subordinated
discount notes.
During May 1999, Tritel PCS notified Digital PCS of its intent to exercise
its option to purchase from Digital PCS licenses covering an additional 2.0
million Pops for approximately $15 million, which will consist of $3.0 million
of Series C Preferred Stock and the assumption of $12 million of FCC debt.
These licenses will be transferred to Tritel PCS after approval by the FCC.
Tritel PCS has committed to grant an option to AT&T Wireless or its designee
for the purchase of these licenses. If AT&T Wireless does not exercise its
option to purchase these licenses and Tritel PCS decides to build out the
markets, Tritel PCS would require additional capital, probably including both
debt and equity of at least $110 million for additional capital expenditures
and to cover operating cash flow losses and working capital requirements.
However, Tritel PCS can not buildout and operate these markets using the AT&T
brand name without permission from AT&T.
In summary, from the inception of the Airwave Communications and Digital
PCS through June 30, 1999, Tritel PCS has used $27.5 million in operating
activities. Those activities have consisted mainly of plant expenses, general
and administrative expenses and sales and marketing expenses totalling over $26
million. Additionally, net interest expense during that same period by Tritel
PCS totaled almost $2.5 million. Also for that period, Tritel PCS has used over
$84 million in investing activities. The investing activities have consisted of
over $50 million spent so far on property and equipment, about $14.7 million
spent to obtain FCC licenses, $7.5 million loaned to ABC Wireless to obtain
licenses for Tritel PCS and $10.5 million in interest on the debt to finance
the FCC licenses and the network buildout. Tritel PCS has received almost
$509.7 million in cash from financing activities. $400.2 million has been
received to date from the bank facility and the senior subordinated discount
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notes. Additionally, Tritel PCS and its predecessor companies, Airwave
Communications and Digital PCS, have received $115.6 million in capital, net of
costs, from the sale of preferred stock and membership interests in the
predecessor companies.
Tritel Finance, Inc. is a wholly owned finance subsidary of Tritel PCS.
Tritel Finance owns all of Tritel PCS's infrastructure equipment located
outside of Mississippi, and leases that equipment to Tritel Communications,
Inc., a wholly owned operating subsidary of Tritel PCS. These intercompany
leases are treated as operating leases. PCS infrastructure equipment located
within Mississippi is owned by Tritel Communications, Inc.
PENDING LICENSE ACQUISITION
On March 23, 1999, the FCC commenced a re-auction of the C-, D-, E- and F-
Block licenses that had been returned to the FCC under an FCC restructuring
order or that had been forfeited for noncompliance with FCC rules or for
default under the related FCC financing. Tritel PCS participated in this
re-auction along with AT&T Wireless and Triton PCS through ABC Wireless,
L.L.C., an entity formed for this purpose. ABC Wireless was eligible to
participate in the C-Block re-auction as a "very small business" under
applicable FCC rules. ABC Wireless agreed to bid on licenses in markets
designated by each of Tritel PCS, AT&T Wireless and Triton PCS, and each of
them agreed to purchase any licenses obtained by ABC Wireless in the markets
designated by them. Before the re-auction, Tritel PCS loaned $7.5 million to
ABC Wireless to fund Tritel PCS's participation in the re-auction.
In the re-auction, ABC Wireless was successful in bidding for an
additional 15 to 30 MHz of spectrum covering a total of 5.7 million Pops, all
of which are already covered by Tritel PCS's existing licenses. Nashville and
Chattanooga are the largest cities covered by the additional licenses. The
total bid price for these additional licenses was $7.8 million. Tritel PCS will
apply its $7.5 million loan to ABC Wireless and pay cash for the balance, to
pay for these licenses.
As a result of the re-auction, Tritel PCS will hold PCS licenses for
spectrum in excess of 45 MHz in several small cities in its markets. FCC rules
limit PCS providers to a total of 45 MHz of spectrum in any given market. In
order to hold a license for more than 45 MHz, Tritel PCS would have to obtain
the consent of the FCC. Tritel PCS believes that it will be able to obtain the
necessary consents, or the FCC will approve the disaggregation of the spectrum
and the transfer to Tritel PCS of a portion of the licenses so that the total
held by Tritel PCS does not exceed 45 MHz.
During July 1998, Tritel PCS took advantage of a reconsideration order by
the FCC allowing companies holding C-Block PCS licenses several options to
restructure their license holdings and associated obligations. Tritel PCS
elected the disagregation option and returned one-half of the broadcast
spectrum originally acquired for each of the C-Block license areas. As a
result, Tritel PCS reduced the carrying amount of the related licenses by
one-half, or $35.4 million, and reduced the discounted debt and accrued
interest due to the FCC by $33.0 million. As a result of the disaggregation
election, Tritel PCS recognized an extraordinary loss of approximately $2.4
million.
YEAR 2000
Many currently installed computer systems and software applications are
encoded to accept only two digit entries in the year entry of the date code
field. Beginning in the year 2000, these codes will need to accept four digit
year entries to distinguish 21st century dates from 20th century dates. Tritel
PCS has implemented a Year 2000 program to ensure that its computer systems and
applications will function properly after 1999. Tritel PCS believes that it has
allocated adequate resources for this purpose and expects to successfully
complete its Year 2000 compliance program on a timely basis, although there can
be no certainty that this will be the case. Tritel PCS does not expect to incur
material expenses or meaningful delays in completing its Year 2000 compliance
program.
Tritel PCS has sought to acquire and implement computer systems and
software that already have the ability to process Year 2000 data. Therefore,
Tritel PCS does not expect a need to convert any
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existing systems or software for Year 2000 compliance. Ericsson has represented
that the software within its PCS equipment will be able to process calendar
dates falling on or after January 1, 2000. However, Tritel PCS cannot be
certain that the Year 2000 software of this equipment will be compatible with
the other software it uses. The ability of Ericsson, or any other third parties
with whom Tritel PCS transacts business, to adequately address its Year 2000
issues is outside of Tritel PCS's control. It is possible that Tritel PCS's
failure, or a third party's failure, to adequately address Year 2000 issues
will adversely affect Tritel PCS's business and operating results.
Because Tritel PCS has sought to acquire systems and software that are
Year 2000 compliant, it does not have a contingency plan. Management will
continue to monitor the risk associated with Year 2000 processing, as well as
its vendors' Year 2000 compliance and will develop a contingency plan if the
circumstances warrant such a plan.
RECENTLY ISSUED ACCOUNTING STANDARDS
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 131, Disclosures about Segments of an
Enterprise and Related Information ("FAS 131"). FAS 131 requires that a public
business enterprise report financial and descriptive information about its
reportable operating segments. The statement defines operating segments as
components of enterprises about which separate financial information in
available that is evaluated regularly by the chief operating decision maker in
deciding how to allocate resources and in assessing performance. Tritel PCS
adopted SFAS 131 and determined that there are no separate reportable segments,
as defined by the standard.
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, Accounting for Derivative Instruments
and Hedging Activities ("FAS 133"). FAS 133 establishes accounting and
reporting standards for derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging activities. It
requires that an entity recognize all derivatives as either assets or
liabilities in the statement of financial position and measure those
instruments at fair value. FAS 133 will significantly change the accounting
treatment of derivative instruments and, depending upon the underlying risk
management strategy, these accounting changes could affect future earnings,
assets, liabilities, and shareholders' equity. Tritel, Inc. and Tritel PCS are
closely monitoring the deliberations of the FASB's derivative implementation
task force. With the issuance of Statement of Financial Accounting Standards
No. 137, Accounting for Derivative Instruments and Hedging Activities --
Deferral of the Effective Date of FASB Statement No. 133, which delayed the
effective date of FAS 133, Tritel, Inc. and Tritel PCS will be required to
adopt FAS 133 on January 1, 2001. Presently, Tritel, Inc. and Tritel PCS have
not yet quantified the impact that the adoption will have on the consolidated
financial statements of Tritel, Inc.
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
Tritel PCS is exposed to market risk from changes in interest rates which
could impact results of operations. Tritel PCS manages interest rates through a
combination of fixed and variable rate debt. Tritel PCS has entered into
interest rate swap agreements as a risk management tool, not for speculative
purposes. See Note 23 of Notes to Consolidated Financial Statements.
At June 30, 1999 Tritel PCS has $200 million of Term B Notes under its
bank facility, which carried a rate of 9.45%; $372 million of the original
senior subordinated discount notes, due 2009; $38.0 million of 7%, discounted
to yield 10%, debt to the FCC, due in quarterly installments from 2003 to 2006;
and $9.5 million of 61/8%, discounted to yield 10%, debt to the FCC, due in
quarterly installments from 2000 to 2008.
Tritel PCS's senior subordinated discount notes and FCC debt are fixed
interest rate and as a result Tritel PCS is less sensitive to market rate
fluctuations. However, Tritel PCS's Term B Notes outstanding and other amounts
available to Tritel PCS under its bank facility agreement are variable interest
rate. Beginning in May 1999, Tritel PCS entered into interest rate swap
agreements with
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notional amounts totaling $200 million to manage its interest rate risk under
the bank facility. The swap aggreements establish a fixed effective rate of
9.05% on the current balance outstanding under the bank facility through the
earlier of March 31, 2002 or the date on which Tritel PCS achieves operating
cash flow breakeven. Market risk, due to potential fluctuations in interest
rates, is inherent in swap agreements.
The following table provides information about Tritel PCS's market risk
exposure associated with changing interest rates on its fixed rate debt at
maturity value of the debt (dollars in millions):
<TABLE>
<CAPTION>
EXPECTED MATURITY
--------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1999 2000 2001 2002 2003 Thereafter Total
---- ---- ---- ---- ---- -------- -=---
Long-term fixed rate debt -- $0.9 $1.0 $1.1 $9.7 $406.8 $419.5
Average interest rate -- 6.1% 6.1% 6.1% 6.9% 12.2% --
</TABLE>
Collectively, Tritel PCS's fixed rate debt has a carrying value of $245.1
million at June 30, 1999. The carrying amount of fixed rate debt is believed to
approximate fair value because a portion of such debt was discounted to reflect
a market interest rate at inception and the remaining portion of fixed rate
debt was issued in May 1999 and therefore approximates fair value due to its
recent issuance.
Tritel PCS is also exposed to the impact of interest rate changes on it's
short-term cash investments, consisting of U.S. Treasury obligations and
certain other investments with the highest credit ratings or fully guaranteed
or insured by the U.S. government, all of which have average maturities of
three months or less. As with all investments, these short-term investments
carry a degree of interest rate risk.
Tritel PCS is not exposed to fluctuations in currency exchange rates since
its operations are entirely within the United States.
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ORGANIZATION OF TRITEL, INC. AND TRITEL PCS
Prior to January 7, 1999, Tritel, Inc.'s operations were conducted through
Airwave Communications, formerly Mercury PCS, LLC, and Digital PCS, formerly
Mercury PCS II, LLC. Airwave Communications was formed in July 1995 by Messrs.
Mounger, Martin and Sullivan who are officers and directors of Tritel, Inc. and
Tritel PCS, and various other investors as a small business, as defined by the
FCC, to participate in the FCC's C-Block PCS spectrum auction. Airwave
Communications acquired six 30 MHz licenses in the C-Block covering
approximately 2.5 million Pops in northern Alabama. Digital PCS was similarly
formed in July 1996 as a very small business, as defined by the FCC, to
participate in the FCC's D-, E- and F-Block PCS spectrum auctions. Digital PCS
acquired 32 10 MHz licenses in the D-, E- and F-Blocks covering approximately
9.1 million Pops in Alabama, Florida, Kentucky, Louisiana, Mississippi, New
Mexico and Texas.
Tritel, Inc. was formed as a Delaware corporation in 1998. On May 20,
1998, Tritel, Inc., Airwave Communications and Digital PCS entered into a
Securities Purchase Agreement with AT&T Wireless and other parties, which
provided for the joint venture arrangement with AT&T Wireless. On January 7,
1999, the parties consummated the joint venture. Under the AT&T Wireless joint
venture, AT&T Wireless contributed to Tritel PCS A- and B-Block licenses
covering approximately 9.1 million licensed Pops, and Airwave Communications
and Digital PCS contributed to Tritel PCS their C-Block licenses and certain of
their E- and F-Block licenses covering 6.6 million licensed Pops. In addition,
Central Alabama Partnership, an unrelated party, contributed C-Block licenses
covering 475,000 Pops in Montgomery, Alabama to Tritel PCS. The Pops
contributed by Airwave Communications and Digital PCS include 1.7 million Pops
that overlap with those contributed by AT&T Wireless. All of the Central
Alabama Pops also overlap with those held by Tritel PCS. As a result, Tritel
PCS holds PCS licenses covering 14.0 million Pops.
In exchange for the licenses contributed by AT&T Wireless and intangible
benefits of the transaction, Tritel, Inc. issued $137.1 million of Series A
Preferred Stock and Series D Preferred Stock to AT&T Wireless. In exchange for
the licenses contributed by Airwave Communications and Digital PCS and
additional cash equity of $11.2 million and $3.0 million contributed by them,
respectively, Tritel, Inc. issued $25.6 million of Series C Preferred Stock to
Airwave Communications and $6.8 million of Series C Preferred Stock to Digital
PCS. Central Alabama received $2.6 million of Series C Preferred Stock in
exchange for its licenses and certain other assets.
In addition, Tritel, Inc. raised $149.2 million of cash equity from
institutional equity investors, $99.4 million of which has already been funded
and $49.8 million of which is committed to be funded, under the institutional
investors' irrevocable and unconditional commitments, on September 30, 1999. In
sum, Tritel, Inc. has received cash and non-cash equity funding and irrevocable
commitments totaling $321.3 million.
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BUSINESS
OVERVIEW
Tritel PCS is a member of the AT&T Wireless Network and intends to become
a leading provider of PCS services in the south-central United States. In May
1998, Tritel entered into a joint venture with AT&T Wireless PCS, Inc., a
wholly owned subsidiary of AT&T Corp., to become the exclusive provider of AT&T
Wireless mobile PCS services in virtually all of a contiguous area covering
approximately 14.0 million Pops in Alabama, Georgia, Kentucky, Mississippi and
Tennessee. In each of its markets, Tritel PCS will use the AT&T brand name with
equal emphasis to the SunCom brand. This joint venture is part of AT&T's
strategy to expand its PCS coverage in the United States.
As a result of the joint venture, Tritel PCS will be able to enter its
markets in a co-branding arrangement using the AT&T brand and logo, which
Tritel PCS believes to be among the most respected and recognized in the world.
Tritel PCS expects to offer its customers immediate, virtually nationwide
roaming over the AT&T Wireless Network. Tritel PCS also expects to benefit from
the nationwide advertising and promotional activities of AT&T Wireless and
AT&T, and from AT&T Wireless's vendor discounts on various products and
services, including handsets and infrastructure equipment.
Supplementally, Tritel has entered into an agreement with two other AT&T
affiliates, Triton PCS and TeleCorp PCS, to operate with those affiliates under
a common regional brand name, SunCom, throughout an area covering approximately
43 million Pops primarily in the south-central and southeastern United States.
Tritel PCS believes this arrangement will allow the SunCom participants to
establish a strong regional brand name within their markets and to achieve
advertising and marketing cost savings.
AT&T Wireless operates the largest digital wireless network in North
America. Its network consists of AT&T Wireless's existing digital and analog
systems, PCS systems being constructed by four joint venture partners,
including Tritel PCS, and systems currently operated by third parties with
which AT&T Wireless has roaming agreements. In the aggregate, these systems
covered 96% of the total Pops throughout the United States as of December 31,
1998.
In forming this joint venture, AT&T Wireless contributed licenses covering
approximately 9.1 million of our 14.0 million total licensed Pops. In exchange
for its licenses and the other benefits to us from the joint venture, AT&T
Wireless received 17.09% of our fully diluted common equity interest, with a
stated vaue of $137.1 million. Airwave Communications and Digital PCS
contributed PCS licenses covering 6.6 million licensed Pops. These contributed
Pops include 1.7 million Pops that overlap with those contributed by AT&T
Wireless, resulting in our holding PCS licenses covering a total of 14.0
million Pops. In exchange for their licenses and $14.2 million of cash, Airwave
Communications and Digital PCS received a total of $32.4 million of our equity.
In addition, we have raised $149.2 million of cash equity from institutional
equity investors, $99.4 million of which has already been funded and $49.8
million of which is committed to be funded, under the investors' irrevocable
and unconditional commitments on September 30, 1999. Central Alabama
Partnership contributed to us 475,000 overlapping Pops in Montgomery, Alabama
in exchange for $2.6 million of equity.
Tritel PCS's licenses authorize it to provide PCS services in the
following major population and business centers, including:
MARKET 1998 POPS
------ ---------
Nashville, TN 1,675,700
Louisville, KY 1,448,400
Birmingham, AL 1,297,800
Knoxville, TN 1,074,000
Lexington, KY 893,400
Jackson, MS 657,800
Mobile, AL 653,900
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Tritel PCS believes that a substantial majority of its licensed Pops are
located in areas that have demographic characteristics well-suited to the
provision of wireless telecommunications services, with favorable commuting
patterns and rapidly growing business environments.
THE TRITEL PCS NETWORK
The Tritel PCS network will offer advanced PCS services on a local and
regional basis and in many other markets throughout the United States. Tritel
PCS intends to offer contiguous market coverage using its own network
facilities, the regional markets covered by the SunCom brand alliance and the
AT&T Wireless Network, all of which use a common technology platform, IS-136
Time Division Multiple Access, or TDMA. Tritel PCS believes that IS-136 TDMA
will provide its subscribers with excellent voice quality, fewer dropped calls
than existing analog systems and virtually nationwide roaming over the AT&T
Wireless Network. To maximize the commercial utility of IS-136 TDMA, Tritel PCS
will offer its customers tri-mode handsets, which can automatically pass or
"hand-off" calls between IS-136 TDMA systems and analog or TDMA-based digital
cellular systems throughout the nation. Several major wireless
telecommunications service providers in North America have selected IS-136 TDMA
for their digital PCS networks, including AT&T Wireless, SBC Communications,
BellSouth, United States Cellular Corporation and Canada's Rogers Cantel Mobile
Communications Inc. BellSouth currently provides IS-136 TDMA service within
many of Tritel PCS's markets.
TRITEL PCS'S OWN NETWORK FACILITIES. Tritel PCS intends to provide
coverage to approximately 80% of its licensed Pops by the end of 2001. Tritel
PCS has begun its initial network buildout, including initial radiofrequency
design and cell site acquisition, in the concentrated population centers within
its markets. Tritel PCS expects to commence PCS service in Jackson, Mississippi
during the third quarter of 1999, Louisville and Lexington, Kentucky, Nashville
and Knoxville, Tennessee during the fourth quarter of 1999, and in Birmingham
and Mobile, Alabama during the second quarter of 2000.
Tritel PCS is designing its PCS network to offer efficient and extensive
coverage within its markets. Tritel PCS's cell site acquisition strategy is to
co-locate as many of its cell sites as possible on existing towers and other
transmitting or receiving facilities. Tritel PCS believes this strategy will
reduce its site acquisition costs and minimize delays due to zoning and other
local regulations. Tritel PCS plans to launch service only after comprehensive
and reliable coverage can be maintained within a particular market.
Tritel PCS expects that there will be areas within its market that it will
ultimately build out, but where it will not, at least initially, have coverage.
In these areas of its markets, Tritel PCS will have the immediate benefit of
AT&T Wireless's existing roaming arrangements with other carriers to provide
service. If it can obtain better rates than those offered by AT&T Wireless,
Tritel PCS may seek direct roaming agreements with some local carriers
providing compatible service. These "intra-market roaming agreements" will
permit Tritel PCS's customers to use their handsets in these areas with less
likelihood of dropped calls. These agreements will also allow Tritel PCS to
launch its service at a lower level of capital expenditures than would
otherwise be required, without adversely impacting the service it will be able
to offer its customers.
THE SUNCOM BRAND ALLIANCE. Tritel has entered into an agreement with two
other AT&T Wireless affiliates, Triton PCS and TeleCorp PCS, to create a common
regional market brand, SunCom, and to provide for sharing certain development,
research, advertising and support costs. This regional brand alliance holds PCS
licenses that cover approximately 43 million Pops in primarily the
south-central and southeastern United States from New Orleans, Louisiana to
Richmond, Virginia.
To ensure that all SunCom customers will receive the same high quality
service throughout the SunCom region, all three SunCom affiliates:
o have agreed to build out their respective networks, adhering to the same
AT&T Wireless quality standards,
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o have agreed to use tri-mode handsets with IS-136 TDMA technology, and
o are expected to enter into roaming agreements.
THE AT&T WIRELESS NETWORK. AT&T Wireless is one of the largest providers
of wireless telecommunications services, with over 9.7 million total wireless
subscribers worldwide, including 5.1 million digital wireless subscribers
worldwide, as of December 31, 1998. AT&T Wireless also has the largest digital
wireless network in North America. Through the AT&T Wireless Network, AT&T
Wireless and Tritel PCS can provide virtually nationwide coverage for wireless
services.
Tritel PCS will be the exclusive provider of mobile PCS services for the
AT&T Wireless Network within Tritel PCS's markets, except for 790,000 mostly
rural Pops in Kentucky. AT&T Wireless has granted Tritel PCS a license to
co-brand with the AT&T logo and other service marks in Tritel PCS's business.
Tritel PCS also has established roaming, purchasing, engineering and other
arrangements with AT&T Wireless. These arrangements will provide Tritel PCS
customers immediate, virtually nationwide roaming on the AT&T Wireless Network.
JOINT VENTURE AND STRATEGIC ALLIANCE WITH AT&T
Tritel PCS's joint venture with AT&T Wireless is part of AT&T's strategy
to expand its IS-136 TDMA digital wireless coverage in the United States.
AT&T's four affiliate agreements, including its joint venture with Tritel PCS,
will provide features and functionality within its national coverage area. The
relationship with AT&T Wireless is valuable to Tritel PCS because, among other
reasons, the relationship enables Tritel PCS to market its PCS service using
what Tritel PCS believes to be one of the world's most respected and
recognizable brands, AT&T. Tritel PCS also expects to take advantage of the
virtually nationwide coverage of the AT&T Wireless Network and the extensive
national advertising of AT&T Wireless and AT&T.
As part of the Tritel PCS-AT&T Wireless alliance, AT&T Wireless
contributed licenses for approximately 9.1 million of Tritel PCS's 14.0 million
total licensed Pops. In exchange for the AT&T contributed Pops and the other
benefits provided for in the agreements governing the joint venture, AT&T
Wireless received a 17.09% fully diluted common equity interest in Tritel PCS,
consisting of preferred stock with a stated value of $137.1 million.
AT&T Wireless contributed licenses provide for the right to use 20 MHz of
authorized frequencies in the geographic areas covered by those licenses. In
order to create these licenses, AT&T Wireless partitioned and disaggregated the
original 30 MHz A- and B-Block PCS licenses it received in these markets. AT&T
Wireless has retained 10 MHz of spectrum in Tritel PCS's coverage area and has
the right to offer any non-competing services on that spectrum. Tritel PCS
believes that its spectrum is sufficient for its coverage areas.
BUSINESS STRATEGY
Tritel PCS plans to employ the following strategies to develop its PCS
business:
LEVERAGE THE BENEFITS OF ITS AT&T WIRELESS AFFILIATION. Tritel PCS will
exploit the following benefits of its AT&T affiliation to distinguish itself
from other PCS providers in its markets, to increase its revenues and to reduce
its operating costs:
Use of AT&T Brand and Logo. Tritel PCS believes the AT&T brand is among the
most recognized brands in the United States. Management believes that
branding has become increasingly important as the consumer base for
wireless services has expanded. The AT&T brand affiliation will be the
highest point of emphasis in marketing Tritel PCS's PCS services. Tritel
PCS expects that, wherever possible, advertisements, handsets, product
packaging, billing statements and in-store retail displays will prominently
display the AT&T logo in equal emphasis with the SunCom logo. Tritel PCS
may not use the AT&T logo on the exterior of its retail stores.
Exclusive Provider of PCS to AT&T Wireless Customers. Tritel PCS will be
the exclusive provider of mobile PCS services for the AT&T Wireless Network
within Tritel PCS's markets,
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except for 790,000 mostly rural Pops in Kentucky. Tritel PCS will provide
PCS services to customers located in Tritel PCS's markets responding to
AT&T's national advertising and to AT&T's national account customers
located in Tritel PCS's markets. Additionally, Tritel PCS will supply
roaming services in its markets to customers of AT&T Wireless and other
AT&T joint venture partners.
Nationwide Roaming. Tritel PCS expects to offer its customers immediate,
virtually nationwide roaming on the AT&T Wireless Network. Tritel PCS
believes many of the roaming arrangements negotiated by AT&T Wireless are
at rates more favorable than Tritel PCS would be able to negotiate on its
own.
AT&T Sales Efforts. AT&T currently employs a sales force for long distance
and other AT&T services of approximately 275 representatives within Tritel
PCS's markets. Tritel PCS expects to piggyback on AT&T's sales efforts to
provide PCS services to those AT&T customers in its markets seeking
wireless services as part of their AT&T service package.
Access to AT&T Wireless Products and Services. As an affiliate of AT&T
Wireless, Tritel PCS expects to benefit from AT&T Wireless-related
discounts on purchases of various products and services including handsets
and infrastructure equipment. Although there is currently no written
agreement, Tritel PCS has access to engineering, technical support and
other AT&T Wireless support services and expects to benefit from AT&T
Wireless's research into new TDMA features.
DISTRIBUTE THROUGH COMPANY STORES. Tritel PCS's distribution strategy will
focus principally on direct distribution through company-owned retail stores.
Tritel PCS expects that the company stores will help foster higher quality
customer contact, resulting in higher sales and penetration, lower customer
acquisition costs and lower customer churn than can typically be achieved
through indirect distribution channels. Tritel PCS currently plans to open 54
company stores to service the markets being launched in 1999 and 2000.
Tritel PCS also plans to employ a direct sales force to target small to
medium-sized businesses. In addition, management believes that the ability to
perform over-the-air activation of service will lead to expanded opportunities
to gain subscribers through alternative channels for sales and marketing.
ENHANCE BRAND AWARENESS THROUGH THE SUNCOM BRAND ALLIANCE. Tritel PCS
intends to promote the SunCom brand through joint marketing efforts with its
SunCom affiliates. The overlapping media markets of the affiliates should allow
the affiliates to advertise effectively on a regional basis. The alliance
intends to produce advertising materials jointly and to seek sponsorship of
sporting and other events to create awareness of the SunCom brand. The alliance
will also be more likely to achieve minimum volume requirements that could not
have been met individually in purchasing customized products bearing the SunCom
logo.
In addition, Tritel PCS will engage in its own independent marketing
efforts under the SunCom brand, including stand-alone media campaigns. Thus,
Tritel PCS will have the flexibility to be a part of a regional brand alliance
and also market more heavily in its home markets according to its own schedule
for launching its PCS services.
CAPITALIZE ON MANAGEMENT EXPERTISE AND LOCAL MARKET KNOWLEDGE AND
PRESENCE. Tritel PCS's and its subsidiaries' management have extensive
experience in successfully building out and managing wireless communications
systems. Several executives of Tritel PCS and its subsidiaries have served as
senior managers at major wireless telecommunications providers, including
United States Cellular Corporation, Nextel Communications, Western Wireless
Corporation and MobileComm.
A number of key members of Tritel PCS's and its subsidiaries' management
teams also have experience managing and operating competitive wireless markets
within Tritel PCS's footprint. Tritel PCS intends to combine its local market
knowledge with the AT&T and SunCom brands to create strong ties with
subscribers and their communities. Additionally, Tritel PCS's and its
subsidiaries' decentralized management structure with regional managers,
company stores and local direct sales
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force should enable Tritel PCS to respond effectively to individual market
changes. Tritel PCS believes that its local market presence, local promotional
efforts and customer service focus, combined with strong consumer recognition
of the AT&T brand, will enable it to gain market share and achieve a favorable
competitive position.
EMPHASIZE ADVANTAGES OF PCS TECHNOLOGY. Tritel PCS will seek to
differentiate its PCS capability from that of its analog cellular competitors
by focusing on the services, features and benefits that digital technology
offers, including superior voice quality, longer battery life, more secure
communications, short text and numeric messages, voice mail, message waiting
indicator, caller ID and single number service. The IS-136 TDMA technology,
unlike the CDMA and GSM digital technologies, allows for the simultaneous use
of digital control channel and analog voice channels. This feature may offer
analog operators an economic means with which to provide digital data features
without the need to upgrade their entire analog systems. Tritel PCS expects
that its customers will roam on a number of analog cellular systems having
digital control channels that will provide digital data features and which are
operated by roaming partners of Tritel PCS and AT&T Wireless.
SERVICES AND FEATURES
Tritel PCS will seek to provide reliable, high quality service at
affordable prices. The following features and services are currently available
to IS-136 TDMA users, and Tritel PCS expects to offer them to its customers:
SUPERIOR VOICE QUALITY AND TECHNOLOGY. Tritel PCS plans to use enhanced
IS-136 TDMA equipment, which is capable of providing superior voice
quality.
EXTENDED BATTERY LIFE. Tritel PCS's handsets will have a battery life that
is significantly longer than the battery life on existing analog cellular
systems, because of the supporting digital control channel. The IS-136 TDMA
technology standard allows a handset to draw significantly less battery
power while accessing a digital control channel by entering into sleep
mode, which alerts the handset of an incoming call and thereby extends the
length of time a battery can be used without having to be recharged. Analog
cellular systems, on the other hand, must stay in constant contact with a
cell site in order to receive an incoming call.
MORE SECURE CALLS. Through the use of an authentication key, the digital
technology eliminates the need for personal identification numbers. Digital
technology also offers enhanced privacy of calls than is available on
analog systems. Because each voice signal is converted into a stream of
data bits, which are encoded and then separated, calls are more difficult
to decode.
SHORT MESSAGING AND SOPHISTICATED CALL MANAGEMENT. These services include a
set of advanced features for receiving short text and numeric messages and
managing calls such as short text messages, voice mail, message waiting
indicator, caller ID, call rejection, call routing and forwarding,
three-way calling and call waiting.
TRI-MODE HANDSETS. The tri-mode phone handsets that Tritel PCS will offer
to its customers can operate in analog mode on the 850 MHz bandwidth, in
digital mode on the 1900 MHz bandwidth and also with a digital control
channel and analog voice channel on the 850 MHz bandwidth. These handsets,
which are designed for use on an IS-136 TDMA system such as Tritel PCS's,
enable a user to initiate a call on a digital cellular or PCS network and
then be handed off, without interruption, to an analog network if the user
roams to a location where digital coverage is unavailable. A user may also
initiate a call on an analog network and have that call handed off to a
TDMA-based digital cellular network.
Tritel PCS currently plans to offer tri-mode handsets manufactured by Nokia
and Ericsson, and expects to offer additional handsets of other
manufacturers as they become available. The Nokia and Ericsson models are
capable of providing advanced digital PCS services and features that meet
the operability and feature set requirements with which Tritel PCS is
required to comply under the AT&T Wireless joint venture. Tritel PCS
expects that all handsets and their packaging will prominently display the
AT&T and SunCom logos with equal emphasis.
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SINGLE NUMBER SERVICE. This service can transfer all incoming calls between
primary landline and wireless locations automatically. When a customer's
handset is activated, Tritel PCS's network can route all incoming calls to
the customer's wireless number. When the handset is deactivated, all calls
can be directed to the customer's primary landline location. This service
will make it possible for customers to receive all of their calls and text
messages through a single telephone number, enhancing the "anytime,
anywhere" functionality of Tritel PCS's wireless communications network.
ADVANCED DATA FEATURES. Tritel PCS expects to launch its PCS service
offering voice and short messaging services only. However, the IS-136 TDMA
technology and tri-mode handsets are capable of handling more complex data
exchange features, which include electronic mail, internet access, and
access to stock quotes, sports scores and weather reports. Tritel PCS will
continue to explore providing these services based on consumer demand.
CUSTOMIZED BILLING. Tritel PCS plans to offer special billing services that
cater to the needs of consumers, including simplified monthly billing
statements and flexible billing cycles. Tritel PCS believes that simple,
accurate bills are necessary to support the customer's perception of
quality service. In addition, Tritel PCS intends to offer customized
billing options, including debit billing, enabling customers to charge
calls against pre-paid accounts, threshold billing, which will limit
customers to a pre-selected level of charges per month and
neighborhood/zonal billing, which will provide service at reduced charges
within certain home areas. Tritel PCS will also be able to offer "Wireless
Office Services" to corporate customers, which can include zonal billing
for all usage and four-digit dialing within the wireless office.
The wireless communications industry continues to undergo substantial
technological innovation. As a result, Tritel PCS expects new services and
features to become commercially available for IS-136 TDMA systems in the
future. Tritel PCS plans to make those services and features available to its
customers.
MARKETING AND DISTRIBUTION
Tritel PCS's overall marketing strategy will be to emphasize the AT&T
brand name, the benefits of digital technology, the breadth of Tritel PCS's
coverage and its focus on customer service, all of which will be provided at
competitive prices. Tritel PCS will employ a sales and marketing approach with
highly definable and measurable goals, which will focus on the use of company
stores as a method of building a customer base.
COMPANY STORES. Tritel PCS's company-owned and operated retail stores will
be modeled after AT&T Wireless's retail stores, with the exception that Tritel
PCS may not use the AT&T logo on the outside of its store fronts. Sales
representatives in company stores will receive in-depth training on the
advantages of PCS and the AT&T Wireless and SunCom alliances. Management also
believes that in-store customer education on PCS services and features will
increase customer satisfaction and usage. The company stores are intended to be
customer destinations in response to advertising and promotions, rather than
impulse stops.
Company stores are being designed to facilitate demonstration of the
benefits of Tritel PCS's PCS services and features. The decentralized nature of
the stores will enable sales representatives to emphasize flexible rate plans
and the different advantages to customers on a market-by-market basis. In
addition, emphasis will be placed on the virtually nationwide roaming and
service features attributable to the IS-136 TDMA technology and the tri-mode
handsets.
Tritel PCS intends to locate company stores on heavy traffic arteries, in
high visibility areas, and near high profile anchor retailers. Nearly all of
the company stores will be located in retail shopping centers and the stores
are expected to range from 1,200 to 2,000 square feet. Tritel PCS plans to open
28 company stores in 1999 and an additional 26 stores in 2000 to service the
markets being launched by the end of 2000.
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DIRECT SALES FORCE. Tritel PCS will also use a direct sales force. Tritel
PCS's sales agents will be assigned to specific regions within its markets
using company stores as bases of operations. Sales agents will receive training
on the advantages of PCS and will be provided with product and service
research, proposal writing and competitor analysis information. The Tritel PCS
sales force will seek to coordinate with AT&T to offer bundled telephony and
related services. Tritel PCS plans to have an initial direct sales force of
approximately 60 sales people to cover the markets expected to be launched in
1999.
INDIRECT DISTRIBUTION CHANNELS. To augment its direct distribution
efforts, Tritel PCS will seek to use mass retailers in its markets. Management
believes that the AT&T brand recognition along with over-the-air activation
capability will facilitate distribution through mass retailers. In the future,
Tritel PCS may use other distribution techniques as well, including simplified
retail sales processes and new, lower cost channels such as inbound telesales
through a toll-free number, affinity marketing programs and Internet sales.
Tritel PCS participates in the existing SunCom Internet website, which is
located on the Internet at http://www.suncom.com. Management believes that
there is a high correlation between Internet users and wireless
telecommunications users. The SunCom website is expected to provide for direct
sales to customers, as well as product and service information and customer
service. Customers on the SunCom website will be directed to the appropriate
SunCom affiliate based on the geographic location of the customer.
Internet-based services and features, such as the ability to e-mail a message
to a SunCom subscriber's handset, will also be explored. Over-the-air
activation will permit direct shipment to customers and remote activation.
Additionally, customers located in Tritel PCS's markets seeking to subscribe
for PCS services on the AT&T Wireless Internet website will be referred through
a toll-free number to Tritel PCS for their PCS services.
FOCUS ON LOCAL ADVERTISING AND PROMOTION. Tritel PCS plans to advertise
and promote its PCS services and products through various local media and
consumer education programs, including local television, radio, print,
billboard and direct mail. To reach a broad base of potential subscribers,
Tritel PCS will combine mass marketing efforts and direct marketing approaches
to build and promote the AT&T Wireless and SunCom brands locally, generate
sales and retain customers. Further, as markets are launched, Tritel PCS will
offer various promotional programs designed to entice new subscribers,
including special limited term and introductory rate and feature programs,
product demonstrations and special events. In addition to its local marketing
strategies, Tritel PCS expects that the national promotional efforts by AT&T
and AT&T Wireless will increase interest and sales through Tritel PCS's
distribution channels. Tritel PCS believes AT&T Wireless's national "customer
pull" strategies for promotion will encourage potential customers to visit
Tritel PCS's company stores and local retailers to seek out the branded
service.
PROMOTIONS TO TARGET SPECIFIC SUBSCRIBER TYPES. Tritel PCS plans to create
distinct marketing programs for different customer segments, including high
volume wireless users, home business operators, corporate accounts and casual
wireless users. For each segment, Tritel PCS expects to create a specific
marketing program including a service package, pricing plan and promotional
strategy. Management believes that by tailoring its service packages and
marketing efforts to specific market segments, customers will perceive a higher
value in relation to the cost of service, will be more inclined to use Tritel
PCS's service, and will have increased customer loyalty and higher levels of
customer satisfaction. Tritel PCS expects to employ sophisticated marketing and
database systems to enable personalization of services for individual customers
and implementation of a proactive customer retention program. The deployment of
these systems should enable Tritel PCS to better identify attractive niche
opportunities and provide feedback on the effectiveness of its marketing
campaigns.
PRICING. Management believes that a service- and feature-based strategy,
as opposed to a rate-based strategy, will be more successful in acquiring and
retaining subscribers. As part of a decentralized marketing strategy, Tritel
PCS will offer its retail subscribers and national and corporate
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account subscribers volume and service based rate plans that are responsive to
market trends. Tritel PCS's billing system has the technology and capacity to
enable Tritel PCS to offer numerous pricing plans to its customers. Tritel PCS
will also offer its customers prepaid debit pricing and neighborhood/zonal
pricing options.
Tritel PCS is not required to use any published AT&T Wireless pricing plan
in its markets, although it may choose to do so. Tritel PCS will evaluate
existing pricing plans of other service providers, including AT&T's Digital
OneRate- plan, and will consider offering such plans to its customers. Tritel
PCS may also offer promotions such as free incoming calls for the first minute
in order to encourage customers to give out their phone numbers.
CUSTOMER SERVICE OPERATIONS. Tritel PCS's customer service strategy is
predicated upon building strong relationships with customers, beginning with
the subscriber's handset purchase. Subscribers who purchase handsets from
company stores will be able to activate service immediately through an in-store
representative of Tritel PCS. Subscribers purchasing their handsets from
independent retailers will be able to activate service by using the handset to
call a customer service representative of Tritel PCS. Either way, the
subscriber will be able to obtain immediate credit approval or establish a
debit billing plan, select service features and a rate plan and set up a
billing program. Tritel PCS also plans to offer special billing services that
cater to the needs of consumers, including simplified monthly billing
statements and flexible billing cycles. Tritel PCS expects future enhancements
to include on-line billing and account information. AT&T Wireless and the
SunCom affiliates, including Tritel PCS, will exchange information and share
best practices in order to provide customers with better customer care.
TRITEL PCS'S MARKETS
Tritel PCS's markets are situated principally in Alabama, Georgia,
Kentucky, Mississippi and Tennessee. The major population centers in Tritel
PCS's markets include the cities of Nashville, Louisville, Birmingham,
Knoxville, Lexington, Jackson and Mobile. Tritel PCS's licenses will complement
the PCS and cellular coverage areas of AT&T Wireless. Tritel PCS anticipates
that its footprint of licensed Pops will contribute to reduced operating
expenses due to its contiguous nature. Tritel PCS believes that a substantial
majority of its licensed Pops are located in areas that have demographic
characteristics that are well-suited to the provision of wireless
telecommunications services with favorable commuting patterns and rapidly
growing business environments. Four state capitals are included within Tritel
PCS's markets. There are over 2,500 total miles of interstate highway within
Tritel PCS's markets. Tritel PCS believes that the significant network of
interstate highways within its markets will lead to increased mobile
communications usage.
- ----------
- - "Digital OneRate" is a registered service mark of AT&T Corp.
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The following table sets forth certain key demographic information for
Tritel PCS's markets:
SELECT DEMOGRAPHIC STATISTICS
GROWTH IN POPS
MARKET 1998 POPS 1990-1998 (%)
- -------------------------------------- ------------- ----------------
Nashville, TN 1,675,700 17.24%
Louisville, KY 1,448,400 7.05
Birmingham, AL 1,297,800 8.12
Knoxville, TN 1,074,000 13.28
Lexington, KY 893,400 9.47
Jackson, MS 657,800 6.87
Mobile, AL 653,900 10.01
Chattanooga, TN 548,400 7.34
Huntsville, AL 496,400 12.87
Montgomery, AL 475,300 7.85
Biloxi, MS 382,000 12.42
Tupelo-Corinth, MS 312,500 7.13
Clarkesville, TN/Hopkinsville, KY 260,800 18.28
Tuscaloosa, AL 253,100 6.39
Bowling Green--Glasgow, KY 244,200 9.65
Dothan--Enterprise, AL 217,500 3.47
Greenville--Greenwood, MS 210,500 (1.59)
Meridian, MS 205,900 2.95
Florence, AL 183,500 6.01
Gadsden, AL 183,500 5.46
Hattiesburg, MS 181,000 11.80
Columbus-Starkville, MS 171,000 2.76
Owensboro, KY 164,700 4.84
Anniston, AL 164,000 1.30
Decatur, AL 142,800 8.51
Corbin, KY 142,200 10.92
Opelika--Auburn, AL 136,900 10.40
Cookeville, TN 132,400 12.59
Somerset, KY 123,900 11.12
Rome, GA 122,300 6.26
Dalton, GA 116,300 17.95
McComb--Brookhaven, MS 110,100 2.61
Atlanta counties (Carroll, Haralson) 108,000 NA
Cleveland, TN 96,100 9.95
Laurel, MS 81,300 2.78
Selma, AL 74,100 (0.54)
Natchez, MS 71,800 (1.91)
La Grange, GA 70,100 9.19
Vicksburg, MS 61,700 4.05
Madisonville, KY 46,300 0.43
Montgomery, MS (Memphis MTA) 12,300 0.59
--------- -----
Total 14,003,900 10.19%
========== =====
National Total Pops and Average
Growth in Pops for all BTAs 276,675,000 9.55%
=========== =====
- ----------
Source: 1999 Cellular/PCS Pop Book, Kagan
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The major metropolitan centers within Tritel PCS's markets are Louisville,
Nashville, Birmingham, Knoxville, Lexington, Jackson and Mobile.
LOUISVILLE. Greater Louisville, which is Tritel PCS's largest market with
approximately 2.3 million people, including Lexington, encompasses several
counties in Kentucky and southern Indiana. Greater Louisville is also at the
cross roads of three major highways, I-64, I-65 and I-71, as well as four major
railways. The Greater Louisville area is a leading manufacturing center,
particularly for automobiles and durable goods with an increasing emphasis on
services, particularly transportation and health care. Major employers include
United Parcel Service, General Electric, Ford Motor, Columbia/HCA Healthcare
and Humana Inc.
NASHVILLE. Nashville, Tennessee's capital, has a population of
approximately 1.7 million people and is a vital transportation, business,
educational and tourist center for the U.S. The population of the ten-county
area comprising Nashville grew by 27% between 1980 and 1996 to 1,250,300, or
23% of Tennessee's total population. Additionally, Nashville International
Airport is served by a number of the major U.S. carriers. Nashville is a major
rail transportation hub connecting 19 states and is a convergence point for
three major interstate highways, I-40, I-65 and I-24. Major employers include
Vanderbilt University and Medical Center, Columbia/HCA Healthcare, Saturn
Corporation, Nissan Motor Corp., Ford Motor Company, BellSouth, Bankers Trust,
SunTrust, Kroger and Ingram Industries.
BIRMINGHAM. Birmingham has a population of approximately 1.3 million
people. The four-county Birmingham area, which includes six colleges and
universities, anchors Alabama's business and cultural life with 21% of the
state's population, 23% of the total business establishments, 24% of the retail
sales and 31% of the payroll dollars. Three major highways pass through
Birmingham, I-20, I-59 and I-65. Major employers include University of Alabama
at Birmingham, Baptist Health System, Bruno's, SouthTrust Bank, BellSouth,
Wal-Mart, Alabama Power Company, Blue Cross-Blue Shield of Alabama and American
Cast Iron Pipe.
KNOXVILLE. Knoxville is a growing city with a population of approximately
1.1 million people and a solid economic foundation. Job growth since 1997 has
been 3.3%, significantly higher than the national average of 1.9%. Knoxville is
centrally located in the eastern United States and is served by three major
interstate highways, I-40, I-75 and I-81. Major manufacturing companies in the
area include Clayton Homes, DeRoyal Industries, Robertshaw Controls and
Matsushita Electronic Corp.
JACKSON. Jackson has a population of approximately 658,000 people and is
home to six colleges and universities. Two major interstate highways, I-20 and
I-55, pass through Jackson. Key industries include automobile parts
manufacturing, aircraft parts manufacturing, telecommunications, healthcare
delivery, government, transportation and poultry processing.
MOBILE. Mobile has a population of approximately 654,000 people and is a
regional center for medical care, research and education. Its port is one of
the nation's leading facilities for coal and forest product exports. Two major
highways, I-10 and I-65, pass through Mobile. Major employers include
BellSouth, Coca-Cola Bottling Company, International Paper Company, DuPont
Mobile Manufacturing and the University of South Alabama.
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NETWORK BUILDOUT
Tritel PCS has begun its initial buildout, including the radiofrequency
design and cell site acquisition, in the concentrated population centers within
its markets. Tritel PCS has commenced its PCS service in the Jackson and
Vicksburg, Mississippi market and anticipates commencing PCS service during
1999 and 2000 in the following markets:
EXPECTED
MARKET LAUNCH DATE 1998 POPS
- --------------------------------- ------------------------- ------------
Jackson and Vicksburg, MS Launched September 1999 719,500
Louisville and Lexington, KY 4th Quarter 1999 2,341,800
Nashville and Clarksville, TN / 4th Quarter 1999 1,936,500
Hopkinsville, KY
Knoxville, TN 4th Quarter 1999 1,074,000
Chattanooga and Cleveland, TN / 4th Quarter 1999 760,800
Dalton, GA
Huntsville and Decatur, AL 4th Quarter 1999 639,200
Montgomery, AL 1st Quarter 2000 475,300
Birmingham, AL 2nd Quarter 2000 1,297,800
Mobile, AL 2nd Quarter 2000 653,900
Tupelo, MS 2nd Half 2000 312,500
Tuscaloosa, AL 2nd Half 2000 253,100
Meridian, MS 2nd Half 2000 205,900
Hattiesburg, MS 2nd Half 2000 181,000
Anniston, AL 2nd Half 2000 164,000
Tritel PCS intends to build out its PCS network to provide coverage to 80%
of the licensed Pops by the end of 2001. Tritel PCS is focusing initially on
the concentrated population and business centers of the major metropolitan
areas and the adjoining interstate highways. Thereafter, Tritel PCS intends to
build out cities with fewer than 375,000 Pops and will continue to build out
interstate and state highways. Tritel PCS intends to launch service only after
a significant portion of the planned buildout for a given major city has been
completed. In addition, prior to launching service, Tritel PCS intends to
perform extensive field testing to ensure comprehensive and reliable coverage
within a particular market.
Bechtel Corporation is providing the overall project and construction
management of the design, site acquisition, installation and testing of its PCS
transmission system. Bechtel is a respected world leader in providing
engineering project and construction management services. The contract with
Bechtel is based on specified hourly fees.
Initial Radiofrequency Design. Two radiofrequency engineering firms,
Galaxy Personal Communications Services, Inc., a wholly owned subsidiary of
World Access, Inc., for the Mississippi, Alabama, Georgia and eastern Tennessee
sites, and Wireless Facilities, Inc., for the Nashville, Tennessee and the
Louisville and Lexington, Kentucky sites, are performing the initial
radiofrequency design for the network. Based upon their engineering designs,
Galaxy and Wireless Facilities determine the required number of cell sites to
operate the network and identify the general geographic areas in which they
propose to locate each of the required cell sites. Tritel PCS's network is
being designed to provide 90% in-building service reliability in urban areas,
88% in-building service reliability in suburban areas and 90% in-car service
reliability in rural areas. The initial radiofrequency design has been
completed for all markets that Tritel PCS expects to launch in 1999 and a
majority has been completed for the markets that Tritel PCS expects to launch
in 2000.
Site Identification, Acquisition and Construction. Tritel PCS has
arrangements with two firms, Spectrasite Communications, Inc. and GeoTrans
Wireless, to identify and acquire the sites on which it
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will locate the towers, antennae and other equipment necessary for the
operation of its PCS system. After Galaxy and Wireless Facilities identify the
general geographic area in which to locate cell sites, Spectrasite and GeoTrans
survey potential sites to identify two potential tower sites within each
geographic location. Galaxy and Wireless Facilities evaluate the alternative
sites within each of the identified geographic areas, giving consideration to
various engineering criteria as well as the desirability of the site from an
economic point of view. The contracts with Spectrasite and GeoTrans are based
upon specified hourly fees.
Tritel PCS can obtain a cell site in three ways:
(1) co-location;
(2) construction of a tower by an independent build-to-suit company; or
(3) construction of a tower by Tritel PCS itself.
First preference in site acquisition is being given to sites on which Tritel
PCS can co-locate with another wireless company or companies by leasing space
on an existing tower or building. The advantages of co-location are that there
are lower construction costs to Tritel PCS associated with the building of a
tower and any zoning difficulties have likely been resolved. Second preference
is being given to sites where Tritel PCS would be able to arrange for the
construction of a tower on a build-to-suit basis by an independent tower
construction company who would acquire the site, build the tower and lease it
back to Tritel PCS. The principal advantage of this method is that it reduces
Tritel PCS's capital expenditures, although operating expenses will reflect the
required lease payments. Third preference is being given to those greenfield
sites that Tritel PCS would acquire and then arrange for the construction of a
tower that it would own.
Tritel PCS expects that it will need approximately 1,275 cell sites in
order to achieve 80% coverage of the licensed Pops. Based on its work to date,
Tritel PCS expects that approximately 70% will be co-locates on existing sites,
25% will be built-to-suit by tower construction companies and 5% will be
constructed by Tritel PCS.
Microwave Relocation. Prior to the FCC's auction of PCS licenses in the
1850-1970 MHz frequency bandwidths, these frequencies were used by various
fixed microwave operators. The FCC has established procedures for PCS licensees
to relocate these existing microwave paths, generally at the PCS licensee's
expense. Tritel PCS has engaged Wireless Facilities to relocate the microwave
paths that currently use its bandwidth. Under its arrangement with Tritel PCS,
Wireless Facilities is performing spectrum analysis, identifying which paths
require relocation, presenting a cost analysis and time frame for the
relocation and, ultimately, performing the relocation of those microwave paths.
Tritel PCS expects to relocate approximately 200 spectrum paths, of which
approximately 120 paths already have been relocated. Including cost sharing for
relocations performed by other PCS licensees and cost sharing reimbursements by
other PCS licenses paid to Tritel PCS, Tritel PCS expects to spend a net total
of approximately $25 million for microwave relocation. Tritel PCS plans to
complete the microwave relocation for all 1999 launch cities by August 1999 and
does not expect any delays to its scheduled service launches.
Mobile Switching Centers. In order to cover its approximately 14.0 million
Pops, Tritel PCS will utilize six switching centers located in six of its major
markets Louisville, Nashville, Birmingham, Knoxville, Mobile and Jackson.
Except for the Mobile location, the locations for the switching centers have
been leased and are currently being constructed or renovated. The Mobile
location is expected to be leased and built on a timely basis in conjunction
with the scheduled launch for that market. Each switching center will serve
several purposes, including, among others, routing calls, managing call
handoff, managing access to landlines and providing access to voice mail.
Network Operations Center. Tritel PCS will utilize Ericsson's Network
Operations Center located in Richardson, Texas during the initial buildout and
deployment of Tritel PCS's network in order to launch service earlier and
reduce its initial capital expenditures. The Network Operations Center's
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function is to monitor the network on a real-time basis for, among other
things, alarm monitoring, power outages, tower lighting problems and traffic
patterns. Tritel PCS plans to build and operate its own Network Operations
Center at its switch facilities in Jackson, Mississippi by 2001.
Interconnection. Tritel PCS's digital PCS network will connect to the
landline telephone system through local exchange carriers. Tritel PCS has
entered into an interconnection agreement with BellSouth and plans to enter
into interconnection agreements with smaller local exchange carriers within its
markets. Additionally, Tritel PCS has entered into a long distance agreement
with AT&T providing for preferred rates for long distance services.
Network Communications Equipment. Tritel PCS has entered into an exclusive
equipment supply agreement with Ericsson under which it will purchase the radio
base stations, switches and certain other related PCS transmission equipment,
software and services necessary to establish its PCS network. Ericsson has
assigned a dedicated project management team to assist Tritel PCS in the
installation and testing of the equipment that will comprise Tritel PCS's PCS
transmission system. Tritel PCS has agreed that, during the term of the
agreement, Ericsson shall be the exclusive provider to Tritel PCS of certain
PCS transmission equipment, materials and services within Tritel PCS's markets.
Tritel PCS has agreed to purchase at least $300 million of equipment over a
five-year period.
TDMA Technology Standard. One of the most important decisions for a PCS
operator is the selection of the network technology standard. Standards are
important in allowing compatability among different wireless systems,
permitting a customer to roam throughout various operators' systems using the
same telephone handset.
There are three primary digital wireless standards: IS-136 TDMA, CDMA or
GSM. Tritel PCS has chosen IS-136 TDMA as its digital technology standard to
offer the highest quality service, a full range of features and services and to
ensure compatibility with systems constructed by AT&T Wireless, which also uses
IS-136 TDMA. IS-136 TDMA offers well-developed features, integrated software
systems and equipment that is commercially available. Wireless providers that
have selected IS-136 TDMA for their digital networks include AT&T Wireless, SBC
Communications, BellSouth and Rogers Cantel. For this reason, IS-136 TDMA is
expected to be widely available in the United States, Canada and South America.
COMPETITION
There are two established cellular providers in each of Tritel PCS's
markets. These providers have significant infrastructure in place, often at low
historical cost, have been operational for many years, have substantial
existing subscriber bases and have substantially greater capital resources than
Tritel PCS. In addition, in most of Tritel PCS's markets, there are at least
three PCS providers currently offering commercial service or likely to begin
offering service before Tritel PCS will. Tritel PCS will also face competition
from paging, dispatch and conventional mobile radio operations, as well as SMR
and ESMR, including those ESMR networks operated by Nextel and its affiliates
in Tritel PCS's markets. Tritel PCS will also be competing with resellers of
wireless services. Tritel PCS expects competition in the wireless
telecommunications industry to be dynamic and intense as a result of the
entrance of new competition and the development of new technologies, products
and services.
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COMPETITION FROM OTHER PCS AND CELLULAR PROVIDERS. Tritel PCS may compete
directly with five or more PCS and cellular providers in each of its markets.
Principal PCS and cellular competitors in Tritel PCS's markets are BellSouth
and its BellSouth Mobility subsidiary, Powertel, GTE, Sprint PCS, Century
Telephone, PrimeCo and ALLTEL. The table set forth below shows the PCS and
cellular entities that management believes currently to hold wireless licenses
for a significant number of Pops within each of Tritel PCS's seven largest
markets. The table also provides for each competitor information on the type of
service, spectrum block, whether operational and technology standard that
management believes to be currently applicable. The table does not reflect the
recently concluded FCC re-auctioning of certain PCS licenses, which licenses
have not yet been granted.
<TABLE>
<CAPTION>
WIRELESS ANNOUNCED
SERVICE AND PCS DIGITAL
MARKET CARRIER SPECTRUM BLOCK OPERATIONAL STANDARD
- ------------------ ---------------------- ----------------- ------------- ----------
<S> <C> <C> <C> <C>
Birmingham, AL GTE Cellular Yes CDMA
(1,297,800 Pops) BellSouth Mobility Cellular Yes TDMA
Sprint PCS PCS -- A Yes CDMA
Powertel PCS -- B Yes GSM
ALLTEL PCS -- D Yes CDMA
Omnipoint PCS -- F No GSM
Jackson, MS BellSouth Mobility Cellular Yes TDMA
(657,800 Pops) Centurytel Cellular Yes Analog
Powertel PCS -- A Yes GSM
21st Century Telesis PCS -- C No --
Sprint PCS PCS -- D No CDMA
Bay Springs PCS -- E No --
PCSouth, Inc. PCS -- F Yes TDMA
Knoxville, TN GTE Cellular Yes CDMA
(1,074,000 Pops) U.S. Cellular Cellular Yes CDMA
BellSouth Mobility PCS -- B Yes GSM
Leap Wireless PCS -- C No CDMA
Sprint PCS PCS -- D Yes CDMA
Powertel PCS -- E No GSM
Tennessee L.P. PCS -- F No --
Lexington, KY BellSouth Mobility Cellular Yes TDMA
(893,400 Pops) GTE Cellular Yes CDMA
Sprint PCS PCS -- B Yes CDMA
Next Wave PCS -- C No CDMA
Powertel PCS -- D Yes GSM
Northcoast Oper Co. PCS -- F No --
</TABLE>
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<TABLE>
<CAPTION>
WIRELESS ANNOUNCED
SERVICE AND PCS DIGITAL
MARKET CARRIER SPECTRUM BLOCK OPERATIONAL STANDARD
- ------------------ -------------------- ----------------- ------------- -----------
<S> <C> <C> <C> <C>
Louisville, KY BellSouth Mobility Cellular Yes TDMA
(1,448,400 Pops) GTE Cellular Yes CDMA
Sprint PCS PCS -- B Yes CDMA
Next Wave PCS -- C No CDMA
Powertel PCS -- D/E Yes GSM
Mobile, AL BellSouth Mobility Cellular Yes TDMA
(653,900 Pops) GTE Cellular Yes CDMA
Sprint PCS PCS -- A No CDMA
PrimeCo PCS -- B Yes CDMA
Mobile Tri-States PCS -- C Yes GSM
ALLTEL PCS -- D Yes CDMA
Nashville, TN BellSouth Mobility Cellular Yes TDMA
(1,675,700 Pops) GTE Cellular Yes CDMA
Sprint PCS PCS -- A Yes CDMA
Leap Wireless PCS -- C No CDMA
Powertel PCS -- D/E Yes GSM
Omnipoint-Galloway PCS -- F No GSM
</TABLE>
Tritel PCS considers its primary competitors to be BellSouth and Powertel.
BellSouth, through its BellSouth Mobility subsidiary, provides analog and
TDMA-based digital cellular services in markets that substantially overlap
Tritel PCS's markets. BellSouth has deployed IS-136 TDMA technology in all of
its digital markets in which it competes with Tritel PCS, except Knoxville
where it has deployed the GSM standard. GTE, Tritel PCS's other principal
cellular competitor, has begun to upgrade its network to provide digital
cellular service.
Powertel's PCS markets overlap nearly all of Tritel PCS's markets.
Powertel has deployed the GSM digital technology standard in all of its PCS
markets. The GSM technology currently does not permit roaming onto an analog
cellular system without reconnecting the call. As a result, Powertel customers
currently have to drop and reinitiate calls as they roam from Powertel's PCS
service to the service of an analog cellular provider.
FCC rules permit the partitioning and disaggregation of broadband PCS
licenses into licenses to serve smaller service areas, which could allow other
new wireless telecommunications providers to enter Tritel PCS's markets. It is
also possible for an A-, B- or C-Block license holder to subdivide its 30 MHz
license into several smaller components, such as 20 MHz and 10 MHz portions. If
such an apportionment did occur, Tritel PCS could face additional PCS
competition in certain of its markets.
COMPETITION FROM OTHER TECHNOLOGIES. In addition to PCS and cellular
operators and resellers, Tritel PCS may also face competition from other
existing communications technologies, including enhanced specialized mobile
radio. The ESMR system incorporates characteristics of cellular technology,
including low power transmission and interconnection with the landline
telephone network. A limited number of ESMR operators have recently begun
offering short messaging, data services and voice messaging service on a
limited basis. Nextel offers ESMR service in a number of Tritel PCS's markets.
The integrated digital enhanced network technology that Nextel has deployed
integrates the capabilities of three currently different devices: a dispatch
radio, a cellular telephone and an alphanumeric pager. Nextel is offering
service in Birmingham, Louisville, Knoxville and
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Nashville, and Tritel PCS believes it is likely that Nextel will expand its
service to other cities in Tritel PCS's markets. Within the area in which
Tritel PCS competes, Southern Communications Services, Inc. also has begun to
deploy ESMR cell sites over much of Georgia, Alabama and southeastern
Mississippi.
In the future, cellular and PCS offerings will also compete more directly
with traditional landline telephone service operators, and may compete with
services offered by energy utilities, and cable and wireless cable operators
seeking to offer communications services through their existing infrastructure.
Additionally, continuing technological advances in telecommunications, the
availability of more spectrum and FCC policies that encourage the development
of new spectrum-based technologies make it impossible to predict the extent of
future competition.
INDUSTRY OVERVIEW
Wireless telecommunications products and services evolved from basic
paging services to mass-market voice only analog cellular services and have now
progressed to PCS, digital cellular and wireless data. Each new generation of
wireless telecommunications products and services has generally been
characterized by improved product quality, broader service offerings and
enhanced features. Because PCS operators have selected different technologies
and are targeting different market segments, no uniform definition of PCS
exists. Rather, individual operators have implemented separate service
strategies with a wide range of differentiation in service offerings and
targeted markets.
The provision of cellular telephone service began with providers utilizing
the 850 MHz band of radio frequency in 1983 when the FCC began issuing two
licenses per market throughout the United States. Since then, the demand for
wireless telecommunications has grown rapidly, driven by the increased
availability of services, technological advancements, regulatory changes,
increased competition and lower prices. According to the Cellular
Telecommunications Industry Association, the number of wireless subscribers in
the United States, including cellular, PCS and SMR, has grown from
approximately 200,000 at June 30, 1985 to over 55.9 million at December 31,
1998, which reflected a penetration rate of 25%.
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The following graph and table set forth certain United States wireless industry
statistics:
U.S. WIRELESS SUBSCRIBERS
DECEMBER 1985 -- DECEMBER 1998
SETNEW TABLE TO COME
WAIT FOR DATA FROM CUSTOMER SERVICE
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------------------------------------------------
1992 1993 1994 1995 1996 1997 1998
WIRELESS INDUSTRY STATISTICS (1) ------------ ------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Total service revenues (in billions) $ 7.8 $ 10.9 $ 14.2 $ 19.1 $ 23.6 $ 27.5 $ 33.1
Wireless subscribers at end of
period (in millions) .............. 11.0 16.0 24.1 33.8 44.0 55.3 69.2
Subscriber growth .................. 46.0 % 45.1 % 50.8 % 40.0 % 30.4 % 25.6 % 25.1 %
Average monthly revenues per
subscriber ........................ $ 68.68 $ 61.49 $ 56.21 $ 51.00 $ 47.70 $ 42.78 $ 39.43
Ending penetration ................. 4.3 % 6.2 % 9.2 % 12.9 % 16.6 % 20.0 % 25.0 %
Digital subscribers at end of
period (in millions) .............. -- -- -- -- -- 6.5 18.3
</TABLE>
- ----------
Source: Cellular Telecommunications Industry Association and Census Bureau
Data.
(1) Reflects domestic U.S. commercially operational cellular, ESMR and PCS
providers.
In 1993, the FCC allocated a portion of the radio spectrum, 1850-1990 MHz,
for the provision of a new wireless communications service commonly known as
PCS. The FCC has described PCS as radio communications that encompass mobile
and ancillary communication that provide services to individuals and businesses
and can be integrated with a variety of competing networks. The FCC's stated
objectives in auctioning bandwidth for PCS were to foster competition to
existing carriers, increase availability of wireless services to a broader
segment of the public, and bring innovative technology to the U.S. wireless
industry. From 1995 through 1997, the FCC conducted auctions in which industry
participants were awarded PCS licenses for designated areas throughout the
United States.
INDUSTRY OUTLOOK. Wireless telecommunication technology developments are
expected to evolve and continue to drive consumer growth as users demand more
sophisticated services and products. Tritel PCS believes that wireless
telecommunications penetration rates will increase as prices fall and
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greater emphasis is placed on the development and use of mass retail
distribution channels. Tritel PCS believes that the initial success of PCS
operators in the United States, and the corresponding acceleration of wireless
penetration overall, supports the forecasted rapid growth of PCS services.
OPERATION OF PCS AND CELLULAR COMMUNICATIONS SYSTEMS. Wireless
communications system service areas, whether PCS or cellular, are divided into
multiple cells. In both PCS and cellular systems, each cell site contains a
transmitter, a receiver and signaling equipment. The cell site is connected by
microwave or landline telephone to a switch that uses computers to control the
operation of the communications system for the entire service area. The system
controls the transfer of calls from cell to cell as a subscriber's handset
travels, coordinates calls to and from handsets, allocates calls among the
cells within the system and connects calls to the local landline telephone
system or to a long distance telephone carrier. Wireless communications
providers establish interconnection agreements with local exchange carriers and
interexchange carriers, thereby integrating their system with the existing
landline communications systems.
Because the signal strength of a transmission between a handset and a cell
site declines as the handset moves away from the cell site, the switching
office and the cell site monitor the signal strength of calls in progress. When
the signal strength of a call declines to a predetermined level, the switching
office tries to hand off the call to another cell site where the signal
strength is stronger. If a handset leaves the service area of a PCS or cellular
system, then the call will be disconnected unless there is a compatible
technology capable of a roaming connection in the adjacent system that will
enable a "hand off."
Analog cellular handsets are functionally compatible with cellular systems
in all markets within the United States. As a result, analog cellular handsets
may be used wherever a subscriber is located, as long as a cellular system is
operational in the area.
Although 1900 MHz PCS and 850 MHz cellular systems utilize similar
technologies and hardware, they operate on different frequencies and may use
different technical and network standards. As a result, until the recent
introduction of dual-mode handsets, it was not possible for users of one type
of system to place calls on a different type of system outside of their service
area, or to hand off calls from one type of system to another.
PCS systems operate under one of three principal digital signal
transmission technologies, or standards, that have been proposed by various
operators and vendors for use in PCS systems: TDMA, CDMA or GSM. TDMA and GSM
are both time division-based standards but are incompatible with each other and
with CDMA. Accordingly, a subscriber of a system that utilizes TDMA technology
is currently unable to use a tri-mode handset when traveling in an area not
served by TDMA-based PCS operators, unless the handset permits the subscriber
to use the analog cellular system in that area.
DIGITAL VS. ANALOG TECHNOLOGY. 850 MHz cellular services transmit voice
and data signals over analog-based systems, which use one continuous electronic
signal that varies in amplitude or frequency over a single radio channel.
Conversely, digital systems convert voice or data signals into a stream of
digits that is compressed before transmission, enabling a single radio channel
to carry multiple simultaneous signal transmissions. This increased capacity,
along with enhancements in digital technology standards, allows digital-based
wireless technologies to offer new and advanced services, such as greater call
privacy and more robust data transmission features, such as "mobile office"
applications, including facsimile, electronic mail, advanced text paging
services and connecting portable computers with computer/data networks.
PCS is an all-digital wireless telephony service, which differs from
existing cellular and other CMRS networks in three primary aspects:
o PCS operates in the 1850-1990 MHz frequency band while cellular and SMR
operate in the 800-900 MHz frequency band.
o PCS spectrum was auctioned in bands of 30 MHz or 10 MHz, while each
initial cellular provider received 25 MHz of bandwidth and ESMR providers
collected approximately 10 to 15 MHz in each market through a combination
of allocations, auctions, acquisitions and management agreements.
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o PCS operators are expected, but not required, to operate fully digital
systems. Compared to analog cellular systems, digital systems, including
PCS and digital cellular systems, offer superior voice quality, increased
protection against eavesdropping and extended battery life due to the
reduced power consumption of digital components.
PCS AUCTIONS. In order to increase competition, promote improved quality
and service, and make available the widest possible range of wireless
telecommunications services to United States consumers, federal legislation was
enacted in 1993 directing the FCC to allocate radio frequency spectrum for PCS
by competitive bidding. In 1993, the FCC allocated 120 MHz of spectrum in the 2
GHz band for the provision of PCS. The 120 MHz of spectrum allocated for PCS
was divided into three 30 MHz blocks, A-, B- and C- Blocks and three 10 MHz
blocks, D-, E- and F- Blocks. Two different service areas have been designated:
51 MTAs for the A- and B-Blocks and 493 BTAs for the C-, D-, E- and F-Blocks.
In March 1995, the FCC completed the A- and B-Block PCS auctions,
resulting in the award of two 30 MHz licenses in all but three of the MTAs,
which three were the subject of previous awards pursuant to the FCC's pioneer
preference program. In May 1996, the FCC completed the C-Block auction,
resulting in the award of one 30 MHz license in each of the BTAs where the
applicant was found qualified to hold a license. In January 1997, the FCC
completed the auctions for the D-, E- and F-Block PCS auctions, resulting in
the award of three 10 MHz BTA licenses in each BTA where the applicant was
found qualified to hold a license. The C- and F-Block licenses are reserved for
Entrepreneurs while the A-, B-, D- and E- Block licenses are not restricted to
any specific type of applicant.
Certain C-Block PCS licensees have chosen to return all or a portion of
their spectrum to the government pursuant to an FCC order permitting such
licensees to restructure. Tritel PCS chose to return 15 MHz of spectrum for
certain Pops in northern Alabama. On April 15, 1999, the FCC completed an
auction of all C-Block spectrum, along with several D-, E- and F- Block
licenses, which have either been returned pursuant to the restructuring order
or otherwise forfeited for noncompliance with the rules or default under the
government financing. Tritel PCS participated in this auction along with AT&T
Wireless, TeleCorp PCS and Triton PCS. Tritel PCS made a loan of $7.5 million
for bidding on licenses to ABC Wireless, L.L.C., an entity through which these
parties participated in the auction. While Tritel PCS was unable to bid on the
northern Alabama licenses which it returned to the FCC, it did bid on
additional spectrum within its markets.
FACILITIES
Tritel PCS currently owns no real property. Tritel PCS has entered into
leases for an aggregate of 44,000 square feet of office space in Jackson,
Mississippi for use as Tritel PCS's principal executive offices. The leases
have initial terms ranging from five years to ten years, with an option to
renew for an additional five years. Tritel PCS has also entered into a lease
for 16,000 square feet of office space in Flowood, Mississippi for use as a
customer operations center. This lease has an initial term of five and one-half
years, with an option to renew for an additional five years. Management expects
that Tritel PCS's current executive office and customer operations office
facilities will be sufficient through at least 2004.
Tritel PCS has entered into leases in Jackson, Birmingham, Mobile,
Nashville, Knoxville, Louisville, Lexington and elsewhere for regional project
offices.
Tritel PCS has leased mobile switching centers in Knoxville, Nashville,
Birmingham, Louisville and Jackson and plans to enter into a lease for a switch
center in Mobile. Each switching center will have a common design with up to
13,000 square feet of space. The lease term for the switch centers is generally
in the range of ten to fifteen years, with Tritel PCS having an option to
extend the term for five or ten years. These six switch centers are sufficient
to cover all of Tritel PCS's markets and, accordingly, Tritel PCS does not
expect to add switch centers in the future.
Company retail stores will be located throughout Tritel PCS's markets.
These stores will generally cover 1,200 to 2,000 square feet of space and the
leases will generally be for an initial five year term,
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with one or more five-year renewal options. Tritel PCS plans to open 28 company
stores in 1999 and an additional 26 in 2000 to service all markets being
launched in 1999 and 2000.
Tritel PCS expects to lease approximately 95% of its cell sites, either
through existing sites or built-to-suit sites. The cell site lease term is
generally for five years with one or more five year renewal options.
Maintenance of the site is typically included in the lease arrangement and
performed by the lessor. Additionally, Tritel PCS is currently negotiating
master lease agreements with other wireless providers and tower companies to
lease space on their existing cell sites throughout Tritel PCS's markets.
Tritel PCS expects that it will need to construct approximately 40 cell sites
for its planned network buildout through 2000.
PERSONNEL
At June 30, 1999, Tritel PCS had 219 employees, including 59 in technical
operations, 68 in marketing and sales operations, 33 in customer operations, 17
in management information systems, 14 in human resources and 28 in corporate
and financial. Most of Tritel PCS's employees are located at the corporate and
customer service operations locations in Jackson, Mississippi. Technical
operations and market and sales operations personnel are located in each of the
regional markets of Birmingham, Chattanooga, Huntsville, Knoxville, Louisville,
Lexington, Mobile, Montgomery and Nashville.
LEGAL PROCEEDINGS
Department of Justice Investigation
On April 25, 1997, Digital PCS, the predecessor-in-interest to Tritel PCS,
received a civil investigative demand letter from the Antitrust Division of the
Department of Justice requesting documents and information concerning its
participation in the FCC's PCS auctions. The civil investigative demand was
issued in connection with the Antitrust Division's investigation of allegations
that Digital PCS and others improperly communicated competitively significant
auction information through strategic bidding behavior. Other bidders
reportedly received similar civil investigative demands. While the FCC was
investigating this specific claim, it issued all but nine of the D-, E- and
F-Block licenses awarded to Digital PCS in the January 1997 auctions.
Subsequently, the FCC issued the remaining nine licenses to Digital PCS in
November 1997 and assessed Digital PCS a $650,000 fine for apparent violations
of FCC bidding rules in connection with Digital PCS's bidding practices. In
August 1998, the FCC rescinded the $650,000 fine, finding that its rules were
not sufficiently clear as to be enforceable against Tritel PCS.
In November 1998, as part of a prearranged settlement, the Department of
Justice simultaneously filed a lawsuit against, and entered into a consent
decree with, Digital PCS and two other companies. The consent decree imposed no
penalties and made no finding of wrongdoing. Pursuant to the terms of the
decree, Digital PCS promised not to use so-called "trailing numbers" in its
bids during future FCC auctions. However, the FCC recently modified its auction
structure so that it is no longer possible for anyone to use trailing numbers
in FCC auctions.
While Tritel PCS was not a party to either the litigation or the consent
decree, Tritel PCS intends to voluntarily abide by the terms of the consent
decree.
Other Proceedings
Tritel PCS is subject to various claims arising in the ordinary course of
business and is a party to various legal proceedings which constitute ordinary
routine litigation incidental to Tritel PCS's business. In the opinion of
management, all such matters in the aggregate are not expected to have a
material adverse effect on Tritel PCS.
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GOVERNMENT REGULATION
OVERVIEW
As a recipient of licenses acquired through the C-Block auction and the
F-Block auction, Tritel PCS's ownership structure and operations are and will
be subject to substantial FCC regulation.
FCC AUTHORITY
The Communications Act of 1934, as amended, grants the FCC the authority
to regulate the licensing and operation of all non-federal government
radio-based services in the United States. The scope of the FCC's authority
includes:
o allocating radio frequencies, or spectrum, for specific services;
o establishing qualifications for applicants seeking authority to operate
such services, including PCS applicants;
o approving initial licenses, modifications thereto, license renewals,
and the transfer or assignment of such licenses;
o promulgating and enforcing rules and policies that govern the
operation of spectrum licensees;
o the technical operation of wireless services, interconnection
responsibilities between and among PCS, other wireless services such as
cellular, and landline carriers; and
o imposition of monetary fines and for license revocation for any
substantial violations of those rules and regulations under its broad
oversight authority.
With respect to market entry and the promotion of a competitive
marketplace for wireless providers, the FCC regularly conducts rulemaking and
adjudicatory proceedings to determine and enforce rules and policies
potentially affecting broadband PCS operations.
REGULATORY FORBEARANCE
The FCC announced that it would forbear from applying several regulations
to CMRS services, including its rules concerning the filing of tariffs for the
provision of interstate services. Congress specifically authorized the FCC to
forbear from applying such regulation in the Omnibus Budget Reconciliation Act
of 1993. With respect to PCS, the FCC has stated its intent to continue
monitoring competition in the PCS service marketplace. The FCC also concluded
that Congress intended to preempt state and local rate and entry regulation of
all CMRS providers, including PCS, but established procedures for state and
local governments to petition the FCC for authority to continue or initiate
such regulation. Thus far the FCC has denied all state petitions seeking to
continue rate or entry regulation of CMRS.
REGULATORY PARITY
The FCC has adopted rules designed to create symmetry in the manner in
which it regulates similar types of mobile service providers. According to
these rules, all commercial mobile radio service, or CMRS, providers that
provide substantially similar services will be subject to similar regulation. A
CMRS service is one in which the mobile radio service is provided for a profit,
interconnected to the public switched telephone networks, and made available to
the public. Under these rules, providers of SMR and ESMR services are subject
to regulations similar to those governing cellular and PCS carriers if they
offer an interconnected commercial mobile service.
COMMERCIAL MOBILE RADIO SERVICE SPECTRUM OWNERSHIP LIMIT
The FCC has limited the amount of broadband CMRS spectrum, including
cellular, broadband PCS and SMR, in which an entity may hold an attributable
interest in a given geographic area to 45 MHz. For these purposes, only PCS and
other CMRS licenses are attributed to an entity where its
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equity exceeds certain thresholds, the entity is an officer or director of a
broadband PCS, cellular or SMR licensee, or certain other relationships exist
which cause an interest to be attributable. Thus, entities with attributable
interests in cellular licenses, which are for 25 MHz, in certain markets cannot
hold more than 20 MHz of PCS spectrum in the same markets. Tritel PCS's ability
to raise capital from entities with attributable broadband CMRS interests in
certain geographic areas is likely to be limited by this restriction. This
restriction was challenged and although the U.S. Court of Appeals for the
District of Columbia Circuit remanded the case to the FCC for further action,
the FCC has affirmed the restriction. Although the case has not been resolved
with finality, Tritel PCS has been advised by its special FCC counsel that the
possibility of a material adverse effect accruing to Tritel PCS as a result of
an unfavorable decision is remote.
OTHER FCC REQUIREMENTS
The FCC had been conducting rulemakings to address interconnection issues
among CMRS carriers and between CMRS and local exchange carriers. These
proceedings were significantly affected by the 1996 Act and FCC rulemakings
conducted pursuant to the 1996 Act.
The FCC has adopted rules that prohibit broadband PCS, cellular and
certain SMR licenses from restricting the resale of their services. The FCC has
determined that the availability of resale will increase competition at a
faster pace by allowing new entrants to the wireless market quickly through the
resale of their competitors' services while they are building out their own
facilities. This prohibition is scheduled to expire in November, 2002. However,
the FCC has received petitions requesting the FCC to extend the five-year
period. Additionally, the FCC requires such carriers to provide roaming service
to subscribers of other such carriers, through which traveling subscribers of
other carriers may make calls after establishing a method of payment with a
host carrier.
The FCC has revised its rules to permit CMRS operators, including PCS
licensees, to use their assigned spectrum to provide fixed local loop and other
services on a co-primary basis with mobile services. The FCC is continuing its
rulemaking proceeding to determine the extent to which such fixed services fall
within the scope of CMRS regulation.
The FCC has imposed number portability requirements on broadband PCS,
cellular and certain SMR providers. The Commission's number portability rules
requires that such licensees provide their customers with the ability to change
carriers while retaining phone numbers. Specifically, by December 31, 1998,
CMRS providers subject to the number portability requirements were required to
have the capability of obtaining routing information, such as by querying the
appropriate regional number portability database, administered by Lockheed
Martin IMS, in order to deliver calls from their networks to ported numbers
anywhere in the United States. Cellular and PCS licensees may accomplish this
end by either contracting with a local exchange carrier or an interexchange
carrier to query number portability databases, or investing in new equipment to
deliver the ported calls. By November 24, 2002, these providers must be able to
offer number portability without the impairment of quality, reliability, or
convenience when switching service providers, including the ability to support
roaming throughout their networks. The FCC has solicited further comment on the
appropriate cost-recovery methods regarding long-term number portability.
The FCC also requires cellular, PCS, and certain SMR carriers to transmit
all wireless 911 emergency calls to Public Safety Answering Points without any
credit checks or validation. The FCC also requires that such carriers must be
capable of transmitting 911 calls from individuals with speech or hearing
disabilities through means such as text telephone devices. Because of
difficulties associated with achieving compatibility on digital wireless
systems, the FCC granted a temporary waiver of this requirement for parties
that requested such a waiver, including Tritel, on December 31, 1998. The FCC
is reviewing the pending petitions for waiver. If Tritel's petition is not
granted, it would be expensive and very difficult to comply. Since October 1,
1998, carriers using digital equipment, including Tritel PCS, have been
required to relay the mobile telephone number of the originator of a 911 call
as well as the location of the cell that is handling the call. By October 2001,
carriers must be able to provide the Public Safety Answering Point with the
location of the mobile caller within a radius of 125 meters. The FCC proceeding
implementing these requirements is ongoing and these
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requirements remain subject to further modification. The FCC has denied
petitions to establish federal cost-recovery methods for the provision of
emergency 911 services, leaving it to local governments to develop
cost-recovery solutions tailored to meet local conditions and needs. In
addition, the Commission has refrained from adopting any limitation of
liability for carriers who transmit 911 calls placed by non-subscribers,
deferring instead to state tort law.
In August 1996, as revised in August 1997, the FCC adopted new guidelines
and methods for evaluating the effects of radiofrequency emissions from
transmitters including PCS mobile telephones and base stations. The new
guidelines, which are generally more stringent than previous requirements, were
effective immediately for hand-held devices and became effective for other
devices on October 15, 1998. These guidelines have been challenged in federal
court as insufficient to protect the public health. If the FCC is required to
impose more stringent requirements as a result, it would adversely affect
Tritel PCS's business.
Wireless providers are subject to the Communications Assistance for Law
Enforcement Act also known as the Wiretap Act, which is under the purview of
the Department of Justice. The Wiretap Act is designed to ensure that law
enforcement can conduct authorized wiretaps of communications utilizing
advanced technologies. Adherence to The Wiretap Act requires carriers to have a
specific number of open ports available for law enforcement personnel with the
appropriate legal authority to perform wiretaps on the carrier's network. In
addition, carriers are required to file their policies and procedures for
complying with The Wiretap Act with the FCC. Full implementation of The Wiretap
Act's assistance capability requirements, however, is not required until June
30, 2000 because the FCC has found that there is a lack of equipment available
to meet these requirements. In addition, there is strong disagreement over the
technical standards with which carriers must comply. The expense that will be
imposed upon wireless carriers as a result of full implementation cannot be
known until the technical standard is adopted.
In September 1997, the FCC initiated a Notice of Inquiry into the service
billing option calling party pays. This option would allow carriers to charge
the party placing the call for wireless air time and all other applicable
charges. Any such regulations in this area could have a significant impact on
wireless carriers as it is believed that overall minutes of use for carriers
would increase as the cost of incoming calls gets shifted to the calling party.
However, before the FCC could implement such a billing option in this country
there are several technological, legal and consumer protection issues which
must be resolved. The primary issue surrounds the ability to alert landline
subscribers placing a call to a mobile subscriber of premium charges resulting
from the use of both a wireless and landline network. Secondarily is the issue
of whether such a billing mechanism should even be regulated. Although the FCC
favors adopting calling party pays, the issues surrounding this proceeding
could take substantial time to resolve.
OTHER FEDERAL REGULATIONS
Wireless networks are subject to certain Federal Aviation Administration,
Environmental Protection Agency and FCC guidelines regarding the location,
lighting and construction of transmitter towers and antennas. In addition, the
FCC has authority to enforce certain provisions of the National Environmental
Policy Act as they would apply to Tritel PCS's facilities. Tritel PCS intends
to use common carrier point-to-point microwave and traditional landline
facilities to connect base station sites and to link them to their respective
main switching offices. These microwave facilities have historically been
separately licensed by the FCC on a first-come, first-served basis, although
the FCC could decide to auction certain of such licenses, and are subject to
specific service rules.
Wireless providers also must satisfy a variety of FCC requirements
relating to technical and reporting matters. One such requirement is the
coordination of proposed frequency usage with adjacent wireless users,
permittees and licensees in order to avoid radiofrequency interference between
adjacent networks. In addition, the height and power of base station
transmitting facilities and the type of signals they emit must fall within
specified parameters.
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STATE AND LOCAL REGULATION
The scope of state regulatory authority covers such matters as the terms
and conditions of interconnection between local exchange carriers and wireless
carriers, customer billing information and practices, billing disputes, other
consumer protection matters, environmental, zoning, and historical
preservation, certain facilities construction issues, the bundling of services
and equipment, and requirements relating to making capacity available to third
party carriers on a wholesale basis. In these areas, particularly the terms and
conditions of interconnection between local exchange carriers and wireless
providers, the FCC and state regulatory authorities share regulatory
responsibilities with respect to interstate and intrastate issues,
respectively.
Tritel PCS and its subsidiaries have been and intend to remain active
participants in rulemaking and other administrative policy proceedings before
the FCC and before state regulatory authorities. Proceedings with respect to
the foregoing policy issues before the FCC and state regulatory authorities
could have a significant impact on the competitive market structure among
wireless providers and the relationships between wireless providers and other
carriers.
GENERAL PCS REGULATIONS
In June 1994, the FCC allocated spectrum for broadband PCS services
between the 1850 to 1990 MHz bands. Of the 120 MHz available for licensed PCS
services, the FCC created six separate blocks of spectrum identified as the A-,
B-, C-, D-, E- and F-Blocks. The A-, B- and C-Blocks are each allocated 30 MHz
of spectrum, the D-, E- and F-Blocks are allocated 10 MHz each. For each block,
the FCC adopted a 10-year PCS license term with an opportunity to renew. The
FCC also allocated 20 MHz of spectrum within the PCS band for unlicensed use.
The FCC adopted a rebuttable presumption that all PCS licensees are common
carriers, subject to Title II of the Communications Act. Accordingly, each PCS
licensee deemed to be a common carrier must provide services upon reasonable
request and the rates, terms and conditions of service must not be unjustly or
unreasonably discriminatory.
STRUCTURE OF PCS BLOCK ALLOCATIONS
The FCC defines the geographic contours of the licenses within each PCS
block based on the major trading areas and basis trading areas. The FCC awarded
A- and B-Block licenses in 51 major trading areas. The C-, D-, E- and F-Block
spectrum were allocated on the basis of 493 smaller basis trading areas. In
addition, there is a CMRS spectrum cap limiting all CMRS licensees to an
aggregate of 45 MHz of PCS, cellular and SMR spectrum in any given market.
All but three of the 51 total A-Block licenses and all 51 B-Block licenses
were auctioned in 1995. Three A-Block licenses were awarded separately pursuant
to the FCC's "pioneer's preference" program. The auctioned A- and B-Block
licenses were awarded in June 1995. Spectrum in the C- and F-Blocks is reserved
for entrepreneurs. The FCC completed its initial auction for the C-Block on May
6, 1996 and relicensed 18 C-Block licenses on which initial auction winners
defaulted in a re-auction that ended on July 16, 1996. Before granting licenses
won by a successful bidder, the FCC requires that such bidder submit a Long
Form Application for each market in which it has submitted a winning bid.
Airwave Communications filed its Long Form Application for the C-Block auction
on May 22, 1996. This submission began an administrative process in which
parties, or the Commission on its own motion, had an opportunity to challenge
Airwave Communications' qualifications to be an FCC licensee. No member of the
public challenged the Airwave Communications' applications and on September 17,
1996, the FCC granted licenses to Airwave Communications for all of its C-Block
markets. On September 24, 1996, Airwave Communications paid to the U.S.
Government the full amount of the downpayment required following the grant of
C-Block licenses.
The D-, E-, and F-Block licenses were auctioned simultaneously, with the
auction closing on January 14, 1997. On January 23, 1997, Digital PCS paid to
the U.S. Government the full amount of the downpayment required following the
close of the D-, E- and F-Block auctions. On January 30,
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1997, Digital PCS submitted its long form application for the licenses won at
the D-, E- and F-Block auctions. The deadline for parties to challenge Digital
PCS's applications was March 21, 1997. Although Digital PCS's applications were
challenged, the FCC has granted licenses to Digital PCS.
In December 1996, the FCC adopted rules permitting broadband PCS carriers
to partition any service areas within their license areas and disaggregate any
amount of spectrum within their spectrum blocks to entities that meet the
eligibility requirements for the spectrum blocks. The purpose of the FCC's rule
change was to permit existing PCS licensees and new PCS entrants to have
greater flexibility to determine how much spectrum and geographic area they
need or desire in order to provide PCS service. Thus, A-, B-, D- and E-Block
licensees may sell or lease partitioned or disaggregated portions of their
licenses at any time to entities that meet the minimum eligibility requirements
of the Communications Act. C- and F-Block licensees may only sell or lease
partitioned or disaggregated portions of their licenses to other qualified
entrepreneurs during the first five years of their license terms, and such
entities would take over partitioned service areas subject to separately
established installment payment obligations. After five years, licenses are
freely transferable, subject to unjust enrichment penalties. If transfer occurs
during years six through ten of the initial license term to a company that does
not qualify for auction preferences, such a sale would be subject to immediate
payment of the outstanding balance of the government installment payment debt
as a condition of transfer. A transfer to a company which qualifies for a lower
level of auction preferences will be subject to partial repayment of bidding
credits and installment payments as a condition of transfer. Additionally, such
a sale may be subject to full repayment of the bidding credits. The FCC's rules
concerning whether C and F Block licenses must repay the bid credit as a
condition of transfer during years six through ten is currently under review.
THE 1996 ACT
On February 8, 1996, the President signed the 1996 Act, which effected a
sweeping overhaul of the Communications Act. In particular, the 1996 Act
substantially amended Title II of the Communications Act, which governs
telecommunications common carriers. The policy underlying this legislative
reform was the opening of the telephone exchange service markets to full
competition. The 1996 Act makes all state and local barriers to competition
unlawful, whether they are direct or indirect. It directs the FCC to initiate
rulemaking proceedings on local competition matters and to preempt all
inconsistent state and local laws and regulations. The 1996 Act requires
incumbent landline local exchange carriers to open their networks to
competition through interconnection and access to unbundled network elements
and prohibits state and local barriers to the provision of interstate and
intrastate telecommunications services.
The 1996 Act prohibits state and local governments from enforcing any law,
rule or legal requirement that prohibits or has the effect of prohibiting any
person from providing interstate or intrastate telecommunications services.
States retain jurisdiction under the 1996 Act to adopt laws necessary to
preserve universal service, protect public safety and welfare, ensure the
continued quality of telecommunications services and safeguard the rights of
consumers.
Implementation of the provisions of the 1996 Act is the task of the FCC,
the state public utility commissions and a joint federal-state board. Much of
the implementation of the 1996 Act is being completed in numerous rulemaking
proceedings with short statutory deadlines. These proceedings address some
issues and proposals that were already before the FCC in pending rulemaking
proceedings affecting the wireless industry, as well as additional areas of
telecommunications regulation not previously addressed by the FCC and the
states.
Some specific provisions of the 1996 Act which are expected to affect
wireless providers are summarized below. These provisions generally have proven
helpful to wireless carriers. There can be no assurance, however, that these
provisions or their implementation by federal or state regulators will not have
a material adverse effect on Tritel PCS.
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EXPANDED INTERCONNECTION OBLIGATIONS
The 1996 Act establishes a general duty of all telecommunications
carriers, including PCS licensees, to interconnect with other
telecommunications carriers, directly or indirectly. The 1996 Act also contains
a detailed list of requirements with respect to the interconnection obligations
of local exchange carriers. These interconnection obligations include resale,
number portability, dialing parity, access to rights-of-way and reciprocal
compensation. The FCC has determined that all CMRS carriers are considered
telecommunications carriers, but for now, CMRS providers such as Tritel do not
meet the 1996 Act's definition of a local exchange carrier.
Local exchange carriers designated as incumbents, those providing landline
local exchange telephone service at the time the 1996 Act was adopted, have
additional interconnection obligations including:
(1) to negotiate in good faith;
(2) to interconnect on terms that are reasonable and non-discriminatory at
any technically feasible point at cost-based rates, plus a reasonable
profit;
(3) to provide nondiscriminatory access to facilities and network elements
on an unbundled basis;
(4) to offer for resale at wholesale rates any service that local exchange
carriers provide on a retail basis; and
(5) to provide actual co-location of equipment necessary for
interconnection or access.
Portions of these requirements have been challenged in court.
The 1996 Act establishes a framework for state commissions to mediate and
arbitrate negotiations between incumbent local exchange carriers and carriers
requesting interconnection, services or network elements. The 1996 Act
establishes deadlines and policy guidelines for state commission
decision-making and federal preemption in the event a state commission fails to
act.
REVIEW OF UNIVERSAL SERVICE REQUIREMENTS
The 1996 Act contemplates that interstate telecommunications providers,
including CMRS providers, will "make an equitable and non-discriminatory
contribution" to support the cost of providing universal service, although the
FCC can grant exemptions in certain circumstances. A decision adopted by the
1996 Act-mandated Federal-State Joint Board rejected arguments that CMRS
providers should be exempted from universal service obligations and concluded
that, to the extent such carriers provide interstate service, they must
contribute to universal service support mechanisms. The Joint Board also found
that states could require CMRS providers to contribute to state support
mechanisms. The FCC now requires all CMRS carriers to contribute to a universal
service fund.
PROHIBITION AGAINST SUBSIDIZED TELEMESSAGING SERVICES
The 1996 Act prohibits incumbent local exchange carriers from subsidizing
telemessaging services, including voice mail, voice storage/retrieval, live
operator service, and related ancillary services) from their telephone exchange
service or exchange access and from discriminating in favor of its own
telemessaging operations.
CONDITIONS ON REGIONAL BELL OPERATING COMPANIES PROVISION OF IN-REGION
INTERLATA SERVICES
The 1996 Act establishes conditions generally requiring that, before
engaging in landline interexchange services in states in which they provide
landline local service, referred to as in-region interLATA services, regional
Bell Operating Companies and their affiliates must provide access and
interconnection to one or more unaffiliated competing providers of telephone
exchange service. Regional Bell Operating Companies and their affiliates may
provide wireless services, including broadband PCS, in markets that cross LATA
boundaries as an incidental interLATA service. The specific interconnection
requirements, which regional Bell Operating Companies must offer on a
non-discriminatory basis, include: interconnection and unbundled access; access
to poles, ducts,
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conduits and rights-of-way owned or controlled by regional Bell Operating
Companies; unbundled local loops; unbundled local transport; unbundled local
switching; access to emergency 911, directory assistance, operator call
completion and white pages; access to telephone numbers, databases and
signaling for call routing and completion; number portability; local dialing
parity; reciprocal compensation; and resale.
REGIONAL BELL OPERATING COMPANIES COMMERCIAL MOBILE JOINT MARKETING
The regional Bell Operating Companies are permitted to market jointly and
sell wireless services in conjunction with telephone exchange service, exchange
access, intraLATA and interLATA telecommunications and information services.
CMRS FACILITIES SITING
The 1996 Act limits the rights of states and localities to regulate
placement of CMRS facilities so as to prohibit or prohibit effectively the
provision of wireless services or to discriminate among providers of such
services. It also eliminates environmental effects from radiofrequency
emissions, provided the wireless system complies with FCC rules, as a basis for
states and localities to regulate the placement, construction or operation of
wireless facilities.
EQUAL ACCESS
The 1996 Act provides that wireless carriers are not required to provide
equal access to common carriers for interexchange toll services. The FCC is
authorized to require unblocked access to long distance providers of the user's
choice subject to certain conditions.
DEREGULATION
The FCC is required to forebear from applying any statutory or regulatory
provision that it determines is not necessary to keep telecommunications rates
and terms reasonable or to protect consumers. A state may not apply a statutory
or regulatory provision that the FCC decides to forebear from applying. In
addition, the FCC must review its telecommunications regulations every two
years and change any that are no longer necessary.
The 1996 Act was explicit in its preemption of certain components of local
regulation of CMRS carriers, including the authority to preclude antenna site
construction due to concerns over radiofrequency emissions. Rather than
directly challenge federal authority in this area, local governments have
instituted moratoria on further construction while the health, safety, and
historic preservation aspects of this matter are studied further. Currently
there are over 200 such moratoria in effect across the country, including one
city in Tritel PCS's markets, Decatur, Alabama. There are a number of bills
pending in Congress, some of which would strengthen the federal government's
preemption authority and some which would weaken federal authority. Tritel PCS
cannot predict how this issue will be resolved and the extent to which it may
have a material impact on its ability to rapidly and efficiently construct its
PCS network.
FCC INTERCONNECTION PROCEEDINGS
In August 1996, the FCC adopted rules to implement the interconnection
provisions of the 1996 Act. In its interconnection order, the FCC determined
that CMRS-to-CMRS interconnection may be accomplished indirectly through the
interconnection of each CMRS provider to an incumbent LEC's network. The FCC
determined that local exchange carriers are required to enter into reciprocal
compensation arrangements with all CMRS providers for the transport and
termination of traffic between local exchange carrier and CMRS networks.
Additionally, the FCC established default proxy rates for reciprocal
compensation, interconnection and unbundled network elements to be used unless
or until a state develops rates for these items based on the Total Element Long
Run Incremental
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Cost. The proxy rates for CMRS-to-local exchange carrier interconnection would
result in significant savings when compared with rates that CMRS providers,
principally cellular carriers, have been paying to local exchange carriers for
transport and termination of traffic.
On July 18, 1997, as amended October 14, 1997, the U.S Court of Appeals
for the Eighth Circuit, acting on consolidated petitions for review of the
FCC's interconnection order, struck down the rate-related portions of the
interconnection order. The court found that the FCC is without jurisdiction to
establish pricing regulations regarding intrastate telephone service. The FCC
appealed the Eighth Circuit's decision to the U.S. Supreme Court and on January
25, 1999, the Court reversed in part and affirmed in part the Eighth Circuit's
decision. The Court upheld the FCC's right to implement the local competition
provisions of the 1996 Act, including the rate-related portions of the
interconnection order. Only Section 51.139 of the FCC's rules was remanded for
further proceedings. Section 51.139 covers a competing carrier's access to a
local exchange carrier's network elements. The FCC has commenced a proceeding
to implement the Court's directive. The Court's ruling should have no material
adverse affect on Tritel PCS.
The portions of the FCC's interconnection order that are not related to
pricing issues went into effect on October 15, 1996. It is not possible to
determine the final outcome of the FCC's actions on remand or the effect such
outcome will have on CMRS carriers, including Tritel PCS.
RELOCATION OF FIXED MICROWAVE LICENSEES
In an effort to balance the competing interests of existing microwave
users and newly authorized PCS licensees in the spectrum allocated for PCS use,
the FCC has adopted (a) a transition plan to relocate fixed microwave operators
that currently are operating in the PCS spectrum, and (b) a cost sharing plan
so that if the relocation of an incumbent benefits more than one PCS licensee,
the benefiting PCS licensees will help defray the costs of the relocation. PCS
licensees will only be required to relocate fixed microwave incumbents if they
cannot share the same spectrum. The transition and cost sharing plans expire on
April 4, 2005, at which time remaining incumbents in the PCS spectrum will be
responsible for their costs to relocate fixed microwave incumbents to alternate
spectrum locations.
Relocation generally involves a PCS operator compensating an incumbent for
costs associated with system modifications and new equipment required to move
to alternate, readily available spectrum. The transition plan, as modified,
allows most microwave users to operate in the PCS spectrum for a two-year
voluntary negotiation period and an additional one-year mandatory negotiation
period. For public safety entities dedicating a majority of their system
communications for police, fire, or emergency medical service operations, the
voluntary negotiation period is three years. The FCC recently shortened the
voluntary negotiation period to one year for commercial microwave operators,
but retained the three year negotiation period for public safety licenses.
Parties unable to reach agreement within these time periods may refer the
matter to the FCC for resolution, but the existing microwave user is permitted
to continue its operations until final FCC resolution of the matter.
The FCC's cost-sharing plan allows PCS licensees that relocate fixed
microwave links outside of their license areas to receive reimbursements from
later-entrant PCS licensees that benefit from the clearing of their spectrum.
Two non-profit clearinghouses currently administer the FCC's cost-sharing plan.
Thus, Tritel PCS may be required in certain circumstances to defray the cost of
earlier relocations by A-, B- and C-Block licensees.
Including cost sharing for relocations performed by other PCS licensees
and cost sharing reimbursements by other PCS licenses paid to Tritel PCS.
Tritel PCS expects to spend a total of approximately $25 million for microwave
relocation. Tritel PCS has completed the microwave relocation for all 1999
launch cities and does not expect any delays to scheduled service launches in
2000.
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C-BLOCK LICENSE REQUIREMENTS
Airwave Communications was the winning bidder for six licenses in the
C-Block auction, which was designated as an entrepreneurs Block. FCC rules
require each C-Block applicant and licensee qualify as entrepreneur in order to
hold C-Block licenses and that it qualify as a small business in order to
receive certain financing preferences. The FCC determined that Entrepreneurs
that qualify as small businesses would be eligible to receive a C-Block Loan
from the U.S. Government for 90% of the dollar amount of their net winning bids
in the C-Block auction. For small businesses, the period during which C-Block
licensees may make interest-only payments is six years, with payments of
principal and interest amortized over the remaining four years of the license
term. The interest rate for outstanding principal is 7.0%. In order to ensure
continued compliance with the FCC rules, the FCC has announced its intention to
conduct random audits during the initial ten-year PCS license terms.
ENTREPRENEURS REQUIREMENTS
In order to hold a C-Block license, an entity and its affiliates must have
had (a) less than $125 million in gross revenues in each of fiscal 1993 and
1994 and (b) less than $500 million in total assets at the time it filed its
application to qualify for the C-Block auction on FCC Form 175. Airwave
Communications filed its Form 175 on November 6, 1995. In calculating a
licensee's gross revenues and total assets for purposes of the entrepreneurs
requirements, the FCC includes the gross revenues and total assets of the
licensee's affiliates, those persons or entities that hold attributable
interests in the licensee, and the affiliates of such persons or entities.
However, the gross revenues and total assets of certain affiliates are not
attributable to the licensee if the licensee maintains an organizational
structure that satisfies certain control group requirements defined below. For
at least five years after winning a C-Block license, a licensee must continue
to meet the entrepreneurs requirements in order to remain eligible for the
bidding credits it received in the FCC's installment payment program.
By claiming status as an entrepreneur, Airwave Communications qualified to
enter the C-Block auction and is qualified to hold C-Block licenses. If the FCC
were to determine that Airwave Communications did not satisfy the entrepreneurs
requirements at the time it participated in the C-Block auction or that Tritel,
Inc. fails to meet the ongoing entrepreneurs requirements, the FCC could revoke
Tritel's PCS licenses, require Tritel, Inc. to restructure in order to come
into compliance with the relevant regulation, fine Tritel, Inc., or take other
enforcement actions, including imposing the unjust enrichment penalties.
Although Tritel, Inc. believes it has met the entrepreneurs requirements, there
can be no assurance that it will continue to meet such requirements or that, if
it fails to continue to meet such requirements, the FCC will not take action
against Tritel, Inc.
SMALL BUSINESS REQUIREMENTS
An entity that meets the entrepreneurs requirements may also receive
certain preferential financing terms if it meets certain other small business
requirements. These preferential financing terms include a 25% bidding credit
and the ability to make quarterly interest-only payments on its C-Block Loan
for the first six years of the license term. To meet the small business
requirements, a licensee must have had average annual gross revenues of not
more than $40 million for the three calendar years preceding the date it filed
its Form 175. In calculating a licensee's gross revenues for purposes of the
small business requirements, the FCC includes the gross revenues of the
licensee's affiliates, those persons or entities that hold attributable
interests in the licensee, and the affiliates of such persons or entities.
By claiming status as a small business, Airwave Communications, Tritel,
Inc.'s predecessor in interest, qualified for the 25% bidding credit and
preferential financing. If the FCC were to determine that Tritel does not
qualify as a small business, then Tritel, Inc. could be forced to repay the
value of the bidding credit and preferential financing for which it was not
qualified. Further, the FCC could revoke Tritel's PCS licenses, require Tritel,
Inc. to restructure in order to come into compliance with the relevant
regulation, fine Tritel, Inc. or take other enforcement actions, including
imposing unjust
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enrichment penalties. Although Tritel, Inc. has been structured to meet the
small business requirements, there can be no assurance that it will continue to
meet such requirements or that, if it fails to continue to meet such
requirements, the FCC will not take any of the aforementioned actions against
Tritel, Inc.
CONTROL GROUP REQUIREMENTS
If a C-Block licensee maintains an organizational structure in which at
least 25% of its total equity on a fully-diluted basis is held by a control
group that meets certain requirements, the FCC excludes certain assets and
revenues from being attributed to such total revenue and gross asset
calculations. The control group requirements mandate that the control group,
among other things, have and maintain both actual and legal control of the
licensee. Under the control group requirements:
o an established group of investors meeting certain financial
qualifications must own at least 15% of the licensee entity's total
equity interest on a fully-diluted basis and at least 50.1% of the
voting power in the licensee entity, and
o additional control group members must hold, on a fully-diluted basis,
the remaining 10% control group equity interest in the licensee entity.
Additional control group members must be either:
o other qualifying investors in the control group;
o individual members of the licensee's management; or
o non-controlling institutional investors, including most venture capital
firms meeting FCC-specified criteria.
A C-Block licensee must have met the control group requirements at the
time it filed its Form 175 and must continue to meet the control group
requirements for five years following the license grant date. Commencing the
fourth year of the license term, the FCC rules (a) eliminate the requirement
that additional control group members hold the 10% control group equity
interest and (b) allow the qualifying investors to reduce the minimum required
control group equity interest from 15% to 10%.
In order to meet the control group requirements, Tritel, Inc.'s Restated
Certificate of Incorporation provides that outstanding shares of capital stock
of Tritel, Inc. shall always be subject to redemption by action of the Board of
Directors of Tritel, Inc. if, in the judgment of the Board of Directors, such
redemption is necessary to prevent the loss or secure the reinstatement of any
license from the FCC held by Tritel, Inc. or any of its subsidiaries. Although
Tritel, Inc. believes that it has taken sufficient steps to meet the control
group requirements, there can be no assurance that Tritel, Inc. has met or will
continue to meet the control group requirements, or that the failure to meet
such requirements would not have a material adverse effect on Tritel PCS,
including the possible revocation of Tritel's PCS licenses by the FCC.
ASSET AND REVENUE CALCULATION
In determining whether an entity qualifies as an entrepreneur and as a
small business, the FCC attributes the gross revenues and assets of the entity,
its attributable investors and their affiliates to the entity's total gross
revenues and total assets. Generally, an individual or entity is an affiliate
of an applicant or person if it, directly or indirectly, (a) controls the
applicant or person or (b) is controlled by such an applicant or person.
Affiliation can arise from common investments, familial or spousal
relationships, contractual relationships, voting trusts, joint venture
agreements, stock ownership, stock options, convertible debentures and
agreements to merge. The gross revenues and assets of noncontrolling investors
and their affiliates with ownership interests that do not exceed the applicable
FCC passive investor ownership thresholds are not attributed to C-Block
licensees for purposes of determining whether such licensees financially
qualify for the applicable C-Block auction preferences.
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The entrepreneurs requirements and the small business requirements provide
that, to qualify as a passive investor, an entity may not own more than 25% of
Tritel, Inc.'s total equity on a fully diluted basis and may not vote more than
25% of the voting interests. Although Tritel, Inc. believes that it currently
complies with the entrepreneurs requirements and the small business
requirements, there can be no assurance that Tritel, Inc.'s ownership
composition will not, in the future, exceed these passive investor limits or
otherwise violate the entrepreneurs requirements or the small business
requirements.
In addition, if an entity makes bona fide loans to a C-Block licensee, the
assets and revenues of the creditor would not be attributed to the licensee
unless the creditor is otherwise deemed an affiliate of the licensee, or the
loan is treated by the FCC as an equity investment and such treatment would
cause the creditor/investor to exceed the applicable ownership interest
thresholds for purposes of the financial affiliation rules. The FCC permits a
creditor/investor to use standard terms to protect its investment in C-Block
licensees, such as covenants, rights of first refusal and super-majority voting
rights. On specified issues, such as those for which the holders of Tritel,
Inc.'s Common Stock have voting rights, the FCC has stated that it will be
guided, but not bound by, criteria used by the Internal Revenue Service to
determine whether a debt investment is bona fide debt. The FCC's application of
its affiliation rules is largely untested and there can be no assurance that
the FCC or the courts will not treat certain of Tritel, Inc.'s lenders or
investors as affiliates of Tritel, Inc. for purposes of determining Tritel,
Inc.'s compliance with the entrepreneurs requirements.
FOREIGN OWNERSHIP LIMITATIONS
The Communications Act requires that non-U.S. citizens, their
representatives, foreign governments or corporations otherwise subject to
domination and control by non-U.S. citizens may not own of record or vote (a)
more than 20% of the capital contribution to a common carrier directly, or (b)
more than 25% of the capital contribution to the parent corporation of a common
carrier licensee, if the FCC determines such holdings are not within the public
interest. Because the FCC classifies PCS as a common carrier offering, PCS
licensees are subject to the foreign ownership limits. Congress recently
eliminated restrictions on non-U.S. citizens serving as members on the board of
directors and officers of a common carrier radio licensee or its parent. In
January 1996, the United States, by its representative to the World Trade
Organization, entered into an agreement with 69 other countries around the
world which, among other things, expanded the permitted level of foreign
ownership in U.S. common carrier licenses. The agreement was ratified by the
United States and the other signatories as of February 5, 1998. Under the World
Trade Organization agreement, the United States has agreed to permit indirect
foreign ownership of up to 100% of a licensed company, however direct ownership
will continue to be limited to 20%. Entities wishing to exceed the 25% indirect
ownership threshold will now be accorded a strong presumption that foreign
investment by other World Trade Organization member countries would serve the
public interest. The FCC will review applications to exceed the 25% benchmark
on a streamlined processing schedule. Airwave Communications' long form
application with the FCC after the completion of the C-Block auction indicates
that Airwave Communications is in compliance with the FCC foreign-ownership
rules. However, if the foreign ownership of Tritel, Inc. were to exceed 25% in
the future, the FCC could revoke Tritel PCS's licenses, require Tritel, Inc. to
restructure its ownership to come into compliance with the foreign ownership
rules or impose other penalties. Further, Tritel, Inc.'s Restated Certificate
of Incorporation enables Tritel, Inc. to redeem shares from holders of Common
Stock whose acquisition of such shares results in a violation of such
limitation. The restrictions on foreign ownership could adversely affect
Tritel, Inc.'s ability to attract additional equity financing from entities
that are, or are owned by, non-U.S. entities.
F-BLOCK LICENSE REQUIREMENTS
The FCC has for the most part extended its C-Block eligibility
requirements and auction rules to the F-Block, with the following exceptions.
For the purposes of determining the entrepreneur's asset limit, F-Block
applicants do not count the value of C-Block licenses, although they must count
other
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CMRS licenses, including A-Block and B-Block PCS licenses. F-Block auction
participants, as well as D- and E-Block participants, were required to pay 20%
of their net winning bid, as opposed to only 10% required of C-Block bidders.
Participants in the F-Block auction could qualify for either of two bidding
credit levels: applicants with average gross revenues of not more than $40
million of the previous three years received a 15% bidding credit, while
applicants with average gross revenues of not more than $15 million for the
same period are referred to as very small businesses and received a 25% bidding
credit. For small businesses and very small businesses, the period during which
F-Block licensees may make interest-only payments is two years, as opposed to
six years for C-Block small businesses, with payments of principal and interest
amortized over the remaining eight years of the license term. The interest rate
applicable to Digital PCS for outstanding principal is 6.125%. Furthermore,
F-Block licensees that fall more than 180 days behind in scheduled installment
payments will incur a 5% late payment fee. By claiming status as a very small
business, Airwave Communications qualified for the 25% bidding credit and the
most favorable installment payment plan offered by the FCC.
Digital PCS was the winning bidder for 32 licenses in the D-, E- and
F-Block auction. The markets are comprised of 29 licenses in the F-Block, one
license in the D-Block and two licenses in the E-Block. With respect to those
licenses won in the F-Block auction, Tritel
1. believes that Digital PCS structured itself to satisfy the FCC's very
small business requirements,
2. intends to maintain diligently its qualification as a very small
business, and
3. has structured the notes, including certain restrictions on ownership
and transfer, in a manner intended to ensure compliance with the
applicable FCC rules.
Tritel, Inc. has relied on representations of its investors to determine
its compliance with the FCC's rules applicable to C-Block and F-Block licenses.
There can be no assurance, however, that Tritel, Inc.'s investors or Tritel,
Inc. itself will continue to satisfy these requirements during the term of any
PCS license granted to its license subsidiaries or that Tritel, Inc. will be
able to successfully implement divestiture or other mechanisms included in
Tritel, Inc.'s Restated Certificate of Incorporation that are designed to
ensure compliance with FCC rules. Any non-compliance with FCC rules could
subject Tritel, Inc. to penalties, including a fine or revocation of its PCS
licenses.
TRANSFER RESTRICTIONS
Within the first five years of the grant of a C- or F- Block license,
transfer of the license is permitted only to another entity eligible for the C-
or F-Block, such as another small business or very small business. If transfer
occurs during years six through ten of the initial license term to a company
that does not qualify for the same level of auction preferences as the
transferor, such a sale would be subject to full payment of bidding credits and
immediate payment of the outstanding balance of the government installment
payment debt as a condition of transfer, known as the FCC unjust enrichment
penalties. In addition, if Tritel, Inc. wishes to make any change in ownership
structure during the initial license term involving the de facto or de jure
control of Tritel, Inc., it must seek FCC approval and may be subject to the
FCC unjust enrichment penalties indicated above.
BUILDOUT REQUIREMENTS
The FCC has mandated that recipients of PCS licenses adhere to five-year
and 10-year buildout requirements. Under both five- and 10-year buildout
requirements, all 30 MHz PCS licensees, such as C-Block licensees, must
construct facilities that offer coverage to at least one-third of the
population in their service area within five years from the date of initial
license grants. Service must be provided to two-thirds of the population within
10 years. In the D-, E- and F-Blocks, 10 MHz PCS licenses are required to reach
one-quarter of the population within five years or make a showing of
substantial service within five years. The FCC, however, has not defined the
term "substantial services." Violations of these regulations could result in
license revocations or forfeitures or fines or other sanctions, such as
reductions in service areas.
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ADDITIONAL REQUIREMENTS
As a C- and F-Block licensee, Tritel, Inc. will be subject to certain
restrictions that limit, among other things, the number of broadband PCS
licenses it may hold as well as certain cross-ownership restrictions pertaining
to cellular and other wireless investments.
PENALTIES FOR PAYMENT DEFAULT
In the event that its license subsidiaries become unable to meet their
obligations under the government financing, the FCC could in such instances
reclaim some or possibly all of Tritel, Inc.'s licenses, re-auction them, and
subject Tritel, Inc. to a penalty comprised of the difference between the price
at which it acquired its license and the amount of the winning bid at
re-auction, plus an additional penalty of three percent of the lesser of the
subsequent winning bid and the defaulting bidder's bid amount.
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JOINT VENTURE AGREEMENTS WITH AT&T WIRELESS
On May 20, 1998, Tritel, Inc., Airwave Communications, Digital PCS, AT&T
Wireless, TWR Cellular, Inc., an indirect wholly-owned subsidiary of AT&T
Corp., cash equity investors purchasing shares of Series C Preferred in a
preferred equity offering and certain members of management entered into the
Securities Purchase Agreement which provided for the formation of the Tritel,
Inc.-AT&T Wireless joint venture and related equity investments. On January 7,
1999, the transactions contemplated by the Securities Purchase Agreement were
closed and the parties entered into a Network Membership License Agreement,
Roaming Agreement, Roaming Administration Agreement, Stockholders' Agreement,
Long Distance Agreement, Closing Agreement and agreed on a form of Resale
Agreement.
The following description is a summary of the material provisions of the
Securities Purchase Agreement, Network Membership License Agreement, Roaming
Agreement, Roaming Administration Agreement, Stockholders' Agreement, Long
Distance Agreement, Closing Agreement and form of Resale Agreement. It does not
restate those agreements in their entirety and is qualified in its entirety by
reference to each agreement.
Securities Purchase Agreement
Under the Securities Purchase Agreement: (1) AT&T Wireless and TWR
assigned the AT&T contributed Pops to Tritel, Inc. or one or more wholly-owned
subsidiaries of Tritel in exchange for shares of Tritel, Inc.'s Series A
Preferred Stock and Series D Preferred Stock (the "AT&T Equity"); (2) Airwave
Communications and Digital PCS assigned to Tritel or one or more wholly-owned
subsidiaries of Tritel, Inc. their contributed Pops and certain other assets in
exchange for shares of Series C Preferred and the assumption of certain
liabilities of Airwave Communications and Digital PCS, including the
indebtedness owed to the United States Department of the Treasury for the
Airwave Communications and Digital PCS contributed Pops; and (3) the Cash
Equity Investors purchased shares of the Series C Preferred.
The AT&T contributed Pops are comprised of licenses providing for the
right to use 20 MHz of authorized frequencies in geographic areas that cover
approximately 9.1 million Pops, which AT&T Wireless has partitioned and
disaggregated from certain of its 30 MHz A- and B-Block PCS licenses. AT&T
Wireless has reserved the right to use, and market and sell to others, any
services on the 10 MHz of spectrum that it retains in the creation of the AT&T
contributed Pops, subject to the exclusivity provisions of the Stockholders'
Agreement and the License Agreement.
In connection with its purchase of the AT&T Equity, AT&T Wireless and TWR
each made certain customary representations and warranties with respect to
their organization, power and authority, conflicts, litigation and their intent
to hold the AT&T Equity as an investment rather than with a view to
distribution. With respect to the AT&T contributed Pops, AT&T Wireless and TWR
each further represented and warranted that they are each in full compliance
with all eligibility rules of the FCC to hold their PCS licenses, and that they
are the authorized legal holders of the PCS licenses that support the AT&T
contributed Pops.
Tritel, Inc. also made certain customary representations and warranties
concerning, among other things, its organization, power and authority,
conflicts, litigation, capitalization, authority to issue the AT&T Equity, the
status of the AT&T Equity, liabilities and the ownership of its subsidiaries.
Tritel, Inc. also represented and warranted that it was in full compliance with
all eligibility rules of the FCC to hold PCS licenses, and that it would
continue to qualify as a small business and as a smaller business within the
meaning of the Small Business Investment Company Act of 1958, as amended.
Tritel, Inc. agreed not to engage in any activity which constitutes an
ineligible business activity within the meaning of the regulations under the
Small Business Investment Company Act. In addition, Tritel, Inc. agreed to take
certain measures to facilitate continued compliance with such regulations,
including using the proceeds of the sale of securities to the cash equity
investors only for eligible business activities within the meaning of the Small
Business Investment Company Act.
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Except as specified in the Securities Purchase Agreement and the related
agreements, none of AT&T Wireless, TWR nor any of their respective affiliates
has any further obligation or commitment to acquire debt or equity securities
of Tritel, Inc., provide or arrange for debt or equity financing for Tritel,
Inc. or provide services to or otherwise assist Tritel, Inc. in connection with
the conduct of its business. The Securities Purchase Agreement does not contain
any restrictions on AT&T Wireless, TWR, or any of their respective affiliates,
from competing, directly or indirectly, with Tritel.
AT&T Wireless Network Membership License Agreement
As part of its strategic alliance with AT&T Wireless, Tritel, Inc. has
entered into the AT&T Wireless Network Membership License Agreement with AT&T
Corp. and its affiliates, including AT&T Wireless. Under the License Agreement,
Tritel, Inc. has been granted a royalty-free, non-exclusive license to use the
AT&T logo with the globe design, the related trade dress and the expression
"Member, AT&T Wireless Services Network" and certain variations of the
foregoing, in equal emphasis with its own brands or marks, in its markets in
the marketing of its mobile wireless telecommunications products and services.
The license does not permit, however, the use of the AT&T licensed marks in
connection with providing or reselling long distance or local service or any
other product or service other than those covered by Tritel, Inc.'s PCS
licenses. AT&T has retained the unimpaired right to use the AT&T licensed marks
in Tritel, Inc.'s markets for marketing, offering or providing any products or
services. AT&T will not grant to any other person providing mobile wireless
telecommunications products or services in Tritel, Inc.'s markets a right or
license to use the AT&T licensed marks, except to a person that is a reseller
of Tritel, Inc.'s services, a person acting as Tritel, Inc.'s agent or a person
that provides fixed wireless telecommunications services to or from specific
locations, such as buildings or office complexes, so long as such services do
not constitute mobile wireless telecommunications services in Tritel, Inc.'s
markets. Tritel, Inc. is not permitted to assign, sub-license or transfer any
of its rights, obligations or benefits under the License Agreement.
In an effort to ensure that Tritel, Inc.'s service meets AT&T's high
quality standards, Tritel, Inc. has agreed to abide by certain quality
standards set forth in the License Agreement and to permit AT&T to conduct
inspections of its facilities from time to time.
The License Agreement is for an initial term of five years. The License
Agreement will be renewed for an additional five-year term if:
o each party gives the other notice of intent to renew at least 90 days
prior to the expiration of the initial term, or
o during the period which begins 120 days prior to expiration and ends
110 days prior to expiration, either party requests that the other party
provide notice of intent to renew, and the other party either gives
notice of intent to renew or fails to respond to such request.
AT&T is permitted to terminate the License Agreement if Tritel, Inc.:
o uses the AT&T licensed marks other than as provided in the License
Agreement;
o uses the AT&T licensed marks in connection with any marketing or
provision of telecommunications services that fails to meet AT&T's
quality standards in any material respect;
o refuses or neglects a request by AT&T Wireless for access to Tritel,
Inc.'s facilities or marketing materials for a period of more than five
business days after the receipt of notice thereof;
o experiences a change of control;
o becomes bankrupt;
o fails to maintain its rights to hold FCC licenses with respect to its
markets representing 5% or more of Tritel, Inc.'s Pops, unless the
failure is the result of AT&T's actions or inactions;
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o licenses, assigns, transfers, disposes of or relinquishes any of the
rights granted to it in, and other than as permitted by, the License
Agreement;
o fails to obtain permission from AT&T Wireless to use the AT&T licensed
marks in sponsoring, endorsing or affiliating with any event, meeting,
charitable endeavor or other undertaking that has a material adverse
effect on AT&T or the AT&T licensed marks;
o fails to maintain any and all confidential information furnished to it
in the strictest confidence; or
o commits a substantial company breach as defined in the Stockholders'
Agreement.
Upon the later to occur of: (a) consummation of a Disqualifying
Transaction, as defined below, or (b) the second anniversary of the date AT&T
gives notice to Tritel, Inc. that it has entered into a letter of intent or
binding agreement to engage in a Disqualifying Transaction, AT&T may terminate
the License Agreement with Tritel, Inc. by providing notice to Tritel, Inc.
However, no such termination may occur during the initial term. If Tritel, Inc.
has not exercised its right to convert all of AT&T's Series A and Series D
Preferred into Series B Preferred, the termination only applies to that portion
of Tritel's markets that overlap the markets in which a party to such
Disqualifying Transaction owns an FCC license to provide Commercial Mobile
Radio Service (the "Overlap Markets"). Upon a termination of the License
Agreement, Tritel must cease using the AT&T Licensed Marks within 90 days.
The License Agreement will also terminate in the event that AT&T Wireless
converts any of its shares of Series A Preferred into Common Stock on the later
of (a) the initial term plus any renewal periods, or (b) two years from the
date of such conversion.
The term "Disqualifying Transaction" means a merger, consolidation, asset
acquisition or disposition, or other business combination involving AT&T Corp.
or its affiliates and another person, which other person
(a) derives from telecommunications businesses annual revenues in excess
of $5 billion,
(b) derives less than one-third of its aggregate revenues from wireless
telecommunications services,
(c) owns FCC Licenses to offer, and does offer, mobile wireless
telecommunications services, except certain specified services, serving
more than 25% of the Pops within Tritel, Inc.'s licensed territory, and
(d) with respect to which AT&T Wireless has given notice to Tritel, Inc.
specifying that such merger, consolidation, asset acquisition or
disposition or other business combination shall be a Disqualifying
Transaction for purposes of this agreement and the transactions
contemplated thereby.
Roaming Agreement
Tritel, Inc. and AT&T Wireless, along with their respective affiliates,
have also entered into an intercarrier roamer service agreement, called the
Roaming Agreement, to allow subscribers of one party to roam onto the wireless
network of the other party when a subscriber travels into a geographic area
that the other party services.
The Roaming Agreement states that both Tritel, Inc. and AT&T Wireless will
provide automatic call delivery to the other party's customers who roam into
its geographic area. To facilitate this service, each party will agree to
provide continuously the necessary hardware, software and transmission
facilities to support such call delivery, either directly or through a separate
network of wireless communications carriers.
The Roaming Agreement has an initial term of 20 years, subject to earlier
termination, and thereafter will continue on a month-to-month basis until
terminated with 90 days written notice. The agreement may be terminated or
suspended upon default by either party for
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o material breach of any term of the Roaming Agreement that continues
unremedied for 30 days;
o a voluntary liquidation or dissolution of either party;
o a final order by the FCC revoking or denying renewal of a material PCS
license or permit granted to either party; or
o a bankruptcy of either party.
Either party may suspend its performance of the Roaming Agreement if it
determines that unauthorized use of the system has reached an unacceptable
level of financial loss.
Roaming Administration Service Agreement
Tritel, Inc. and AT&T Wireless also have entered into a roaming
administration service agreement to allow Tritel, Inc. to receive certain
benefits under intercarrier roaming services agreements between AT&T Wireless
and other specified wireless carriers, to permit subscribers of those other
wireless carriers to use the facilities of Tritel, Inc. in accordance with the
applicable intercarrier roaming services agreements and to make available to
Tritel, Inc. the roaming administration services of AT&T Wireless. The Roaming
Administration Agreement provides that AT&T Wireless will perform, for a fee,
roaming administration and settlement services to manage Tritel, Inc.'s roaming
program.
The Roaming Administration Agreement has an initial term of two years,
subject to earlier termination, and thereafter will renew automatically for
successive terms of one year each until either party chooses not to renew upon
90 days prior written notice. The Roaming Administration Agreement may be
terminated for any of the following reasons:
o material breach by either party;
o material and unreasonable interference of one party's operations by the
operations of the other party for a period exceeding ten days;
o by AT&T Wireless with respect to any intercarrier roaming services
agreement or its interoperability agreement with EDS Personal
Communications Corporation, in the event the applicable agreement expires
or is terminated. The current interoperability agreement with EDS
Personal Communications Corporation expires on March 31, 2000, with
respect to settlement services and on June 30, 1999, with respect to call
validation services;
o by AT&T Wireless in the event that Tritel, Inc. is no longer a member
in good standing with the North American Cellular Network, Inc.;
o by AT&T Wireless with respect to the roaming administration services
received under AT&T Wireless's interoperability agreement with EDS
Personal Communications Corporation should that agreement expire or
terminate; or
o by either party for any reason upon 180 days prior written notice.
Upon termination of the Roaming Administration Agreement for any of the
reasons set forth above, each party shall immediately, or upon final
accounting, pay all amounts owing to the other parties thereunder, whether due
or to become due.
Stockholders' Agreement
AT&T Wireless, the management stockholders and the cash equity investors
have entered into a Stockholders' Agreement with Tritel, Inc.
o to provide for the management of Tritel, Inc.;
o to impose certain restrictions on the sale, transfer or other
disposition of the securities of Tritel; and
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o to create certain rights related to such securities, including a right
of first offer, a right of participation, a right of inclusion and
registration rights.
Management. The Stockholders' Agreement provides that the Board of
Directors of Tritel, Inc. will consist of thirteen members. For so long as
required by the FCC, the management stockholders will designate four members,
each of whom must be an officer of Tritel, Inc. and each of whom will have 1/2
of a vote, AT&T Wireless will designate two members and the cash equity
investors will designate three members. The remaining four directors will be
designated by the management stockholders, and if permitted by FCC regulation,
one such designation will be subject to the consent of the cash equity
investors alone, with the remaining three subject to the consent of the cash
equity investors and AT&T Wireless. Once permitted by FCC regulation, the
remaining four directors will be designated by the cash equity Investors, with
three of these designations subject to the consent of AT&T Wireless and Messrs.
Mounger, Martin and Sullivan. No director may be removed without cause.
All actions of the Board of Directors will require a majority vote of the
entire Board of Directors, except that certain significant transactions will
require the vote of at least three of the five directors designated by the cash
equity investors and AT&T Wireless and four of the six votes cast by the
directors designated by the management stockholders and the four remaining
directors designated by the management stockholders or the cash equity
investors as described above. Such significant transactions include, but are
not limited to,
o a sale or transfer of a material portion of the assets of Tritel, Inc.
or any subsidiary;
o a merger or consolidation of Tritel, Inc. or any subsidiary;
o the offering of any securities of Tritel, Inc. or any subsidiary other
than as contemplated by the Securities Purchase Agreement;
o the hiring or termination of any executive officer of Tritel, Inc.;
o the incurrence of certain indebtedness;
o the making of certain capital expenditures; and
o the initiation of any bankruptcy proceeding, dissolution or liquidation
of Tritel, Inc. or any subsidiary.
Restrictions on Transfer. The stockholders, including AT&T Wireless and
TWR, have agreed not to, directly or indirectly, transfer or otherwise grant or
create certain liens in, give, place in trust or otherwise voluntarily or
involuntarily dispose of ("Transfer") any share of Company Stock, defined in
the Stockholders' Agreement, beneficially owned by such stockholder on or prior
to an initial public offering, or IPO, of Tritel, Inc.'s common stock, subject
to certain limited exceptions.
Right of First Offer. Prior to an IPO and following an IPO, for transfers
of 10% or more of the common stock on a fully diluted basis, if a non-AT&T
Wireless stockholder desires to sell shares of preferred or common stock, other
than Voting Preference Stock and Class C Common Stock, to a third party, such
stockholder must first offer such shares to AT&T Wireless. AT&T Wireless will
then have ten business days to offer to purchase all, but not less than all, of
such shares at the offered price. If AT&T Wireless does not accept such offer,
such investor may offer the shares to other potential purchasers at or above
the offer price, for up to 90 days. If AT&T Wireless or TWR desires to sell
shares of preferred or common stock, other than Voting Preference Stock and
Class C Common Stock, the cash equity investors will have the same right of
first offer. In the event that neither any cash equity investor nor AT&T
Wireless purchases such shares pursuant to the above rights, the shares may be
sold to any person other than a prohibited transferee as defined in the
Stockholders' Agreement.
Right of Participation. On or prior to an IPO, if Tritel, Inc. proposes to
offer, issue, sell or otherwise voluntarily or involuntarily dispose of any
equity security for cash, each stockholder shall have the right to acquire a
proportionate percentage of such equity securities based on the number of
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shares of Class A Voting Common Stock beneficially owned by such stockholder
relative to the total number of Class A Voting Common Stock outstanding. This
purchase right will not apply to an offering pursuant to a stock option or
stock appreciation rights plan.
Right of Inclusion. No stockholder shall Transfer shares of any series or
class of preferred, other than Series B Preferred, or common stock
(collectively, "Inclusion Stock") to persons who are not affiliates of such
person if the Transfer would result in such stockholder, or stockholders acting
in concert, Transferring 25% or more of the outstanding shares of any class of
Inclusion Stock (an "Inclusion Event"), unless the terms and conditions of such
Transfer include an offer to AT&T Wireless, the cash equity investors and the
management stockholders (each, an "Inclusion Event Offeree") for each of them
to sell to the purchaser of the Inclusion Stock the same proportion of each
Inclusion Event Offeree's Inclusion Stock as proposed to be sold by the selling
Stockholder. In the event that such person does not agree to purchase all of
the shares of Inclusion Stock proposed to be sold, then the selling stockholder
and each Inclusion Event Offeree will have the right to sell a proportionate
amount of Inclusion Stock to such person. For purposes of determining an
Inclusion Event, if the Inclusion Stock is Series C Preferred, then Series D
shall also be deemed to be Inclusion Stock, and Series C Preferred and Series D
Preferred shall be deemed to be one class of preferred stock.
Right of First Negotiation. Following an IPO, any stockholder desiring to
Transfer any shares of Common Stock or Series C Preferred (1) pursuant to an
underwritten registration, (2) pursuant to Rule 144 under the Securities Act or
(3) in a transaction or series of related transactions resulting in the
Transfer of not more than ten percent of all common stock on a fully diluted
basis, excluding for such purposes the Series A Preferred Stock, must first
give AT&T Wireless written notice thereof containing the proposed terms of such
sale. For the applicable first negotiation period, AT&T Wireless will have the
exclusive right to negotiate with such Stockholder regarding the purchase of
such shares. The stockholder has the right to reject any offer made by AT&T
Wireless during such first negotiation period. Upon the expiration of the first
negotiation period, the stockholder has the right to sell the shares included
in the notice on such terms and conditions as are acceptable to the Stockholder
in its sole discretion during the applicable offer period.
If shares of common stock are proposed to be Transferred pursuant to an
underwritten registration, the applicable first negotiation period is ten days
and the applicable offer period is 120 days. If shares of common stock are
proposed to be Transferred pursuant to Rule 144, the applicable first
negotiation period is three hours and the applicable offer period is five
business days. If shares of common stock are proposed to be Transferred in a
transaction or series of related transactions resulting in the sale of not more
than ten percent of all common stock on a fully diluted basis, excluding for
such purposes the Series A Preferred, the applicable first negotiation period
is one business day, provided the notice is given prior to 9:00 a.m. on the day
prior to the proposed Transfer, and the applicable offer period is ten business
days.
Demand Registration Rights. From and after the ninety-first day following
the date of the IPO, or such longer period as may be required by the managing
underwriter, any "Qualified Holder" and management stockholders that in the
aggregate beneficially own at least 50.1% of the Class A Voting Common Stock
then beneficially owned by the management stockholders (each, a "Demanding
Stockholder") will have the right to require Tritel, Inc. to file a
registration statement under the Securities Act covering the Class A Common
Stock (a "Demand Registration"), subject to certain limited exceptions.
A "Qualified Holder" is defined as:
(a) any stockholder or group of stockholders that beneficially owns (x)
greater than 331/3% of the outstanding shares of common stock on a
fully diluted basis or (y) shares of Class A Voting Common Stock
reasonably expected, upon sale, to result in aggregate gross proceeds
of at least $25 million; or
(b AT&T Wireless and TWR for so long as they beneficially own in the
aggregate greater than two-thirds of the initial issuance to them of
shares of Series A Preferred.
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Tritel, Inc. will not be obligated to effect more than two separate Demand
Registrations in any twelve-month period, provided that only one request for
Demand Registration may be exercised by AT&T Wireless and/or Management
Stockholders that in the aggregate beneficially own at least 50.1% of the
shares of the Class A Voting Common Stock then beneficially owned by the
Management Stockholders during any twelve-month period. If Tritel, Inc.
determines that a Demand Registration would interfere with any pending or
contemplated material transaction, Tritel, Inc. may defer such Demand
Registration subject to certain limitations.
Piggyback Registration Rights. If Tritel, Inc. proposes to register any
shares of Class A Voting Common Stock with the Securities and Exchange
Commission under the Securities Act, Tritel, Inc. will, subject to certain
limitations, give notice of the proposed registration to all stockholders and
include all common stock as to which it has received a request for inclusion,
subject to customary underwriter cutbacks.
Consequences of a Disqualifying Transaction. Upon consummation of a
Disqualifying Transaction, the exclusivity provisions of the Stockholder
Agreement applicable to AT&T Wireless and TWR will terminate as to all of
Tritel, Inc.'s markets. However, if Tritel, Inc. has not exercised its right to
convert all of AT&T Wireless's Series A and Series D Preferred into Series B
Preferred, the termination applies only to the Overlap Markets.
Upon AT&T Wireless's terminating its obligations and those of TWR in
connection with a Disqualifying Transaction, Tritel, Inc. will have the right
to cause AT&T Wireless and TWR, or their transferees other than any cash equity
investor, to exchange all or a proportionate number of shares of Series A
Preferred then owned by AT&T Wireless and TWR equal to a fraction, the
numerator of which is the number of Pops in the Overlap Markets and the
denominator of which is the total number of Pops in all of Tritel, Inc.'s
markets, for an equivalent number of shares of Series B Preferred. Tritel, Inc.
shall have similar conversion rights with respect to any Series D Preferred
shares, or Series B Preferred or common stock into which such shares have been
converted, owned by AT&T Wireless and TWR.
Additional Covenants. To induce the stockholders to enter into the
Stockholders' Agreement, Tritel has agreed to, among other things:
o construct a network system to cover the territory of its PCS licenses
according to an agreed upon buildout plan;
o arrange for all necessary microwave relocation and reimburse AT&T for
any such relocation costs it incurs in connection with the AT&T
contributed Pops;
o offer certain service features and adhere to certain quality
standards;
o refrain from entering into certain merger, sale or liquidation
transactions or to effect a change in the business of Tritel, Inc.
without the prior consent of AT&T Wireless;
o refrain from marketing, offering, providing or reselling interexchange
services other than its own or AT&T Wireless's;
o enter into Resale Agreements with AT&T Wireless from time to time at
the request of AT&T Wireless;
o refrain from soliciting for employment AT&T Wireless's personnel for a
limited period; and
o permit AT&T Wireless to co-locate certain cell sites in locations
holding Tritel, Inc. cell sites.
Concurrently, AT&T Wireless has agreed to, among other things:
o assist Tritel, Inc. in obtaining discounts from AT&T Wireless
equipment vendors;
o refrain from soliciting for employment Tritel, Inc.'s personnel for a
limited period; and
o permit Tritel, Inc. to co-locate certain cell sites in locations
holding AT&T Wireless cell sites.
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In addition, stockholders other than AT&T Wireless that are subject to the
Stockholders' Agreement have agreed to refrain from providing, reselling or
acting as agent for any person offering wireless services in territories
designated to Tritel, Inc.
Term. The Stockholders' Agreement will terminate after eleven years and
may be terminated earlier upon the consent of all parties, or if one
stockholder should beneficially own all of the Class A Voting Common Stock. If
not otherwise terminated, the provisions regarding the management of Tritel,
Inc. will terminate upon the earlier to occur of an IPO or the expiration of
ten years, and the provisions regarding registration rights will terminate
after 20 years.
Long Distance Agreement
Tritel, Inc. and AT&T Wireless Services, Inc. have entered into a Long
Distance Agreement which provides that Tritel, Inc. will purchase interstate
and intrastate long distance services from AT&T Wireless for a term of up to
three years. These long distance services will be purchased at preferred rates,
which are contingent upon Tritel, Inc.'s continuing affiliation with AT&T
Wireless, and will be resold to Tritel, Inc.'s customers. Under the Long
Distance Agreement, Tritel, Inc. must meet a yearly minimum traffic volume
commitment which is to be negotiated between Tritel, Inc. and AT&T Wireless. If
the minimum traffic volume commitment is not met by Tritel, Inc., then it must
pay to AT&T Wireless an amount equal to the difference between AT&T Wireless's
expected fee based on the minimum traffic volume commitment and its fee based
on the actual traffic volume.
Closing Agreement
Tritel, Inc., AT&T Wireless and the other parties to the Securities
Purchase Agreement have entered into a Closing Agreement to provide for certain
matters set forth in the Securities Purchase Agreement, including, among other
things, consent for certain of Tritel, Inc.'s subsidiaries to enter into
agreements and to conduct Tritel, Inc.'s operations, and direction that certain
PCS licenses be transferred to Tritel, Inc.'s subsidiaries by AT&T Wireless,
Airwave Communications, Digital PCS and Central Alabama Partnership.
Resale Agreement
Tritel, Inc. and AT&T Wireless have also agreed on the form of a Resale
Agreement to be entered into from time to time, which permits AT&T Wireless,
its affiliates and one person designated by AT&T Wireless, who is licensed to
provide telecommunications services in such area under AT&T's service marks,
for any geographic area within the territory covered by Tritel, Inc.'s
licenses, each, referred to as a reseller, to purchase access to and usage of
Tritel, Inc.'s wireless telecommunications services for resale to its
subscribers. Tritel, Inc. has agreed to provide service to the reseller on a
nonexclusive basis, and therefore will retain the right to market and sell its
services to other customers in competition with AT&T Wireless.
The Resale Agreement will have an initial term of ten years and will be
automatically renewed for additional one-year terms, unless it is previously
terminated. The reseller has the right to terminate the Resale Agreement for
any reason upon 180 days written notice. Following the eleventh anniversary of
the commencement date of the Resale Agreement, either party may terminate the
agreement on 90 days written notice for any reason.
In addition, either the reseller or Tritel, Inc. may terminate the Resale
Agreement after any of the following events occur and continue unremedied for
some time period:
o certain bankruptcy events of Tritel, Inc. or the reseller;
o the failure of either the reseller or Tritel, Inc. to pay any sum owed
to the other at the time such amount comes due;
o the failure of the reseller or Tritel, Inc. to perform or observe any
other material term, condition, or covenant to be performed by it under
the Resale Agreement;
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<PAGE>
o the commission of any illegal act by or the filing of any criminal
indictment or information against the reseller, its proprietors,
partners, officers, or directors or stockholders controlling in the
aggregate or individual 10% or more of the voting rights or equity
interests of the reseller;
o the furnishing, within a twelve-month period, by the reseller to
Tritel, Inc. of two or more checks that are not paid when presented due
to insufficient funds;
o an unauthorized assignment of the Resale Agreement;
o failure by the reseller to meet the eligibility requirements as
described in the Resale Agreement; and
o either party attempts to incorporate into its marks, or challenge the
other party's service marks, trademarks or trade names, including,
without limitation, all terms and conditions of each service plan
selected by the reseller.
Upon termination, Tritel, Inc. will have no further obligation to provide
the reseller access to and usage of Tritel, Inc.'s PCS services.
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<PAGE>
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
The executive officers and directors of Tritel, Inc., and their ages, at
July 31, 1999, were as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ------------------------------ ----- ---------------------------------------------------------------
<S> <C> <C>
William M. Mounger, II ....... 42 Chairman of the Board of Directors and Chief Executive
Officer
William S. Arnett ............ 49 Director and President
Jerry M. Sullivan, Jr. ....... 40 Director, Executive Vice President and Chief Operating Officer
E.B. Martin, Jr. ............. 43 Director, Executive Vice President, Treasurer and Chief
Financial Officer
Scott I. Anderson ............ 40 Director
Alex P. Coleman .............. 32 Director
Gary S. Fuqua ................ 47 Director
Ann K. Hall .................. 34 Director
Andrew Hubregsen ............. 38 Director
David A. Jones, Jr. .......... 41 Director
H. Lee Maschmann ............. 41 Director
Elizabeth L. Nichols ......... 45 Director
Kevin J. Shepherd ............ 43 Director
</TABLE>
The executive officers and directors of Tritel PCS, at July 31, 1999, were
as follows:
<TABLE>
<CAPTION>
NAME POSITION
- --------------------------------- ------------------------------------------------------------------
<S> <C>
William M. Mounger, II .......... Chairman of the Board of Directors, Chief Executive Officer and
President
Jerry M. Sullivan, Jr. .......... Director, Executive Vice President and Chief Operating Officer
E.B. Martin, Jr. ................ Director, Executive Vice President, Treasurer and Chief Financial
Officer
</TABLE>
The executive officers, directors and key employees of Tritel
Communications, Inc., our operating subsidiary, at July 31, 1999, were as
follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
- --------------------------------- ----- --------------------------------------------------------
<S> <C> <C>
William M. Mounger, II .......... 42 Chairman of the Board of Directors and Chief Executive
Officer
William S. Arnett ............... 49 President
Jerry M. Sullivan, Jr. .......... 40 Director, Executive Vice President and Chief Operating
Officer
E.B. Martin, Jr. ................ 43 Director, Executive Vice President, Treasurer and Chief
Financial Officer
T. Clark Akers .................. 42 Senior Vice President-External Affairs
Timothy Burnette ................ 43 Senior Vice President-Engineering and Technical
Operations
Keith Halford ................... 48 Senior Vice President-Marketing
Kirk Hughes ..................... 39 Senior Vice President-Information Systems
Doug McQueen .................... 38 Senior Vice President-Market Operations
James H. Neeld, IV .............. 39 Senior Vice President-General Counsel and Secretary
Karlen Turbeville ............... 40 Senior Vice President-Finance
Dennis M. Watford ............... 50 Senior Vice President-Human Resources and
Administration
</TABLE>
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<PAGE>
William M. Mounger, II. Mr. Mounger has served as Chief Executive Officer
of Tritel, Inc. and Mercury Communications since 1998 and 1990, respectively.
In addition, Mr. Mounger served as President of Tritel, Inc. until January
1999. Mr. Mounger was a member of the Cellular One Advisory Council from
1992-1994 and served as its Chairman from 1993-94. In recent years, Mr. Mounger
has served as President of Delta Cellular Communications, as President of
Alaska-3 Cellular, as Vice President of Mobile Talk, Inc., an SMR operator, as
President of Southeastern Cellular Communications, and as President or
executive officer in several other cellular companies. In 1996, Mr. Mounger was
one of three original founders of Unity Communications, a reseller of long
distance and wireless services. From 1983 to 1988, he was a partner in Sunbelt
Cellular Partners, which merged with other entities to form Vanguard Cellular
in 1987.
William S. Arnett. Mr. Arnett has served as President of Tritel, Inc.
since January 1999. Mr. Arnett has served as President of Flying A Towers, a
communication tower leasing company. Mr. Arnett served as President of a
division of Dial Call Communications from 1994 to 1996 and with Nextel
Communications following the merger of Dial Call into Nextel Communications
until 1996. Mr. Arnett served as Chief Operating Officer of Transit
Communications Corporation from 1993 to 1994 and as President of Rural
Cellular, Inc. from 1990 to 1993. Mr. Arnett also held several positions at
United States Cellular from 1984 to 1990, most recently serving as Corporate
Vice President, Marketing and Operations.
Jerry M. Sullivan, Jr. Mr. Sullivan has served as Executive Vice President
and Chief Operating Officer of Tritel, Inc. since 1993. Mr. Sullivan has also
served as the Vice President and Chief Operating Officer of Mercury
Communications, and Alaska-3 Cellular Corporation. In 1994, Mr. Sullivan joined
and became an active member of the Universal Wireless Communications
Consortium. Mr. Sullivan also represents Tritel, Inc. in the Personal
Communications Industry Association, where he is actively involved with the
Broadband PCS Alliance Council.
As Vice President and Chief Operating Officer of Mercury Communications,
Mr. Sullivan was responsible for all operations applicable to Mercury's
cellular markets. Mr. Sullivan served as Regional Manager of Mercury
Communications for multiple Mississippi cellular markets, and was responsible
for seeking potential acquisitions and business opportunities for Mercury
throughout the United States. Prior to joining Mercury in 1993, Mr. Sullivan
was a senior manager of First Energy Corporation, a wholly owned subsidiary of
ChemFirst, Inc., formerly First Mississippi Corporation.
E.B. Martin, Jr. Mr. Martin has served as Executive Vice President,
Treasurer and Chief Financial Officer of Tritel, Inc. since 1997. Mr. Martin
has also served as the Vice President and Chief Financial Officer of Mercury
Communications from 1990 to 1993 and since 1997. Mr. Martin was a shareholder
of the law firm of Young, Williams, Henderson & Fuselier, P.A. from 1993 to
1996 and currently is a shareholder of its affiliate, Young, Williams,
Henderson, Fuselier & Associates, Ltd. Mr. Martin has experience in handling
mergers and acquisitions of domestic and international wireless companies. He
has been responsible for arranging debt and equity financing for numerous
cellular properties and has extensive experience in managing individual and
institutional venture capital investments, litigation and contractual
negotiations. Mr. Martin also serves as Secretary/Treasurer for Mercury
Communications, Alaska-3 Cellular Corporation and Mercury Wireless Management.
Scott I. Anderson. Mr. Anderson has served as a Director of Tritel, Inc.
since January 1999. Since 1997, Mr. Anderson has served as a principal in Cedar
Grove Partners, LLC, an investment and consulting/advisory partnership, and,
since 1998, as a principal in Cedar Grove Investments, LLC, a small "angel"
capital investment fund. Mr. Anderson was an independent board member of
PriCellular Corp from March 1997 through June 1998, when the company went
private. He is a board member and advisory board member of Tegic, a wireless
technology licensing company, a board member of TeleCorp PCS, a board member of
Triton PCS and a board member of Xypoint, a private emergency 911 service
company. He was employed by McCaw Cellular Communications and AT&T Wireless
from 1986 until 1997, where he last served as Senior Vice President of the
Acquisitions and Development group.
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<PAGE>
Alexander P. Coleman. Mr. Coleman has served as a Director of Tritel, Inc.
since January 1999. Since 1996, Mr. Coleman has served as a Vice President and
Investment Partner of Dresdner Kleinwort Benson Private Equity LLC's leveraged
buyout group. Prior to joining Dresdner Kleinwort Benson, Mr. Coleman served in
several corporate finance positions for Citicorp/Citibank N.A. from 1989
through 1995, most recently as Vice President of Citicorp Venture Capital.
Gary S. Fuqua. Mr. Fuqua has served as a Director of Tritel, Inc. since
January 1999. Mr. Fuqua has managed corporate development activities at Entergy
since 1998. In addition, Mr. Fuqua oversees Entergy's non-regulated domestic
retail businesses, including District Energy, Entergy Security and Entergy's
various telecommunications businesses. Before he joined Entergy, Mr. Fuqua
served as a Vice President with Enron Ventures Corporation in London. He also
founded and managed his own company prior to joining Enron in 1988. He is a
member of Entergy Enterprises' Board of Directors, and President of Entergy
Technology Holdings. Mr. Fuqua is also a member of the board of TeleCorp PCS.
Ann K. Hall. Ms. Hall has served as a Director of Tritel, Inc. since
January 1999. Since 1995, Ms. Hall has served in various roles for AT&T
Wireless Services, Inc., most recently as Director of Partnership Markets. In
this role, she has assisted AT&T Wireless's affiliate, Telecorp PCS, in
launching its wireless operations, and she was previously involved in
overseeing the financial operations for AT&T Wireless's partnership interests
in the Los Angeles and Houston markets. Prior to joining AT&T Wireless
Services, Inc., Ms. Hall worked for Ernst & Young LLP's Telecommunications
Consulting Practice, during which time McCaw Cellular was one of her main
clients. Before working in the Telecommunications Industry, Ms. Hall worked as
a Product Development Engineer at National Semiconductor and later at Intel
Corporation in the Technology Development Finance group.
Andrew Hubregsen. Mr. Hubregsen has served as a Director of Tritel, Inc.
since January 1999. Mr. Hubregsen is a Senior Vice President with Conseco
Private Capital Group, Inc. He is responsible for Conseco's approximately $700
million portfolio of private equity and equity related investments in a wide
variety of industries. Mr. Hubregsen joined Conseco in September 1992 in the
area of Corporate Development and has identified, negotiated and structured
acquisitions in both core and non-core business. Prior to joining Conseco, Mr.
Hubregsen was employed at GE Capital Services in the Financial Institutions
Group of the Corporate Finance Division. While at GE Capital, Mr. Hubregsen
worked on a variety of leveraged debt and equity transactions.
David A. Jones, Jr. Mr. Jones has served as a Director of Tritel, Inc.
since July 1999. Mr. Jones is a founder and the Chairman and Managing Director
of Chrysalis Ventures, LLC, a venture capital firm. Prior to founding Chrysalis
Ventures, LLC in 1994, Mr. Jones was an attorney in private practice. Mr. Jones
is also a director of Humana Inc., Mid-America Bancorp and High Speed Access
Corp.
H. Lee Maschmann. Mr. Maschmann has served as a Director of Tritel, Inc.
since January 1999. Mr. Maschmann is Vice President of Partnership Operations,
Engineering for AT&T Wireless Services, Inc. In this role, he has assisted AT&T
Wireless's affiliates, Telecorp PCS and Triton PCS in launching their wireless
operations. He was previously involved in overseeing the Technical Operations
and Engineering for AT&T Wireless's partnership interests in the Los Angeles
and Houston markets. Prior to that, he oversaw the engineering and construction
of AT&T Wireless's PCS markets in the Southwest region. Since 1985, Mr.
Maschmann has held a number of technical leadership positions with AT&T
Wireless Services, Inc., McCaw Communications, and MetroCel Cellular.
Elizabeth L. Nichols. Ms. Nichols has served as a Director of Tritel, Inc.
since January 1999. Ms. Nichols has served as a Director and President of JDN
Realty Corp., a publicly traded real estate investment trust since 1994 and is
a Director of Ruby Tuesday, Inc. Prior to joining JDN Realty Corp., Ms.
Nicholas worked for approximately 18 years in the real estate industry for JDN
Enterprises, Inc., Dobson & Johnson Mortgage Banking firm and First American
National Bank.
Kevin J. Shepherd. Mr. Shepherd has served as a Director of Tritel, Inc.
since January 1999. Mr. Shepherd has served as President of Triune, Inc., a
financial advisory firm servicing high net worth individuals since its
inception in 1989.
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<PAGE>
T. Clark Akers. Mr. Akers has served as Senior Vice President-External
Affairs since 1995. Mr. Akers is responsible for federal, state and local
governmental relations and maintaining Tritel, Inc.'s relationships with the
FCC and the Wireless Bureau and developing relationships with the Public
Service Commissions, Planning Commissions and other regulatory agencies in
states in which Tritel, Inc. will do business.
Timothy Burnette. Mr. Burnette has served as Senior Vice
President--Engineering & Technical Operations since May 1999. He is responsible
for the construction and operation of Tritel, Inc.'s TDMA IS-136 PCS network.
Prior to joining Tritel, Inc., Mr. Burnette served as Director of Network
Operations (River Region) for Nextel from 1994 to 1995, Vice President of
Network Operations (River Region) for Nextel from 1995 to 1996, and Vice
President, Corporate Development, for Hemphill Corporation, a tower and
construction company primarily focused on the wireless communications industry,
from 1996 to 1999.
Keith Halford. Mr. Halford has served as Senior Vice President-Marketing
since February 1999. He is responsible for Tritel, Inc.'s overall marketing
strategy. Prior to joining Tritel, Inc., Mr. Halford was Principal of
Transactional Marketing Consultants beginning in March 1995, where he assisted
television networks, advertising agencies and telemarketing firms in the
creation of e-commerce opportunities. From 1993 through March 1995, Mr. Halford
was President of RSTV Inc. where he created ViaTV, an auction-based, satellite
delivered television channel.
Kirk Hughes. Mr. Hughes has served as Senior Vice President-Information
Systems since 1998. He is responsible for Tritel, Inc.'s management information
systems and support. Prior to joining Tritel, Inc. in 1998, Mr. Hughes was
employed with MobileComm, a national paging company, for 13 years, where he
last served as Vice President of Information Systems. In that capacity Mr.
Hughes managed a staff of 75 employees serving a customer base of 4 million
people.
Doug McQueen. Mr. McQueen has served as Senior Vice President-Market
Operations since July 1998. He is responsible for direct and indirect sales,
oversight of the construction and staffing of the company's retail stores and
overall supervision of Tritel, Inc.'s regional managers. Prior to becoming
Senior Vice President-Market Operations, Mr. McQueen was Vice
President-Regional Manager with Tritel, Inc. from 1997 and General Manager of
Mercury Communications's Madisonville, Kentucky market from September 1991
through April 1994. From May 1994 through January 1997, Mr. McQueen was
employed with Clear Communications as a Regional Manager for its Kentucky and
West Virginia markets. Mr. McQueen was General Manager for United States
Cellular's Evansville, Indiana market from 1986 to 1991.
James H. Neeld, IV. Mr. Neeld has served as Senior Vice President-General
Counsel and Secretary since April 1999 and April 1998, respectively. He is
responsible for general corporate and other legal matters. Prior to becoming
Senior Vice President-General Counsel in 1999, Mr. Neeld was a shareholder of
the Jackson, Mississippi law firm, Young, Williams, Henderson & Fuselier, P.A.
and its affiliate Young, Williams, Henderson, Fuselier & Associates, Ltd. Mr.
Neeld began his career with Young, Williams, Henderson & Fuselier, P.A. in 1985
and was a director of the firm from 1994 through 1997, and remains of counsel
to the firm. While in private practice, Mr. Neeld focused on telecommunications
and general corporate law, corporate finance, acquisitions, transactions and
business planning. Mr. Neeld currently serves on the Executive Committee of the
Business Law Section of the Mississippi Bar and is a member of the Mississippi
Secretary of State's Business Law Advisory Group.
Karlen Turbeville. Ms. Turbeville has served as Senior Vice
President-Finance since 1991. She also has served as Vice President of Alaska -
3 Cellular Corporation and as Vice President of Finance and Director for
Mercury Communications. Since joining Mercury Communications in 1991, Ms.
Turbeville has held direct responsibility for the financial, treasury, billing,
customer care, roaming, investor relations, budgeting and regulatory reporting
functions for all RSA markets. Prior to joining Mercury Communications, Ms.
Turbeville was a Manager at Tann, Brown & Russ Co., Ltd., a Mississippi
accounting firm. Ms. Turbeville is a Certified Public Accountant with
experience in accounting, auditing and consulting, including six years with
Arthur Andersen & Co. where she worked with Worldcom, Skytel and cellular
companies, and companies in the transportation, public utility and banking
industries.
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<PAGE>
Dennis M. Watford. Mr. Watford has served as Senior Vice President-Human
Resources and Administration since August 1999, after joining Tritel, Inc. in
February 1999. Prior to joining Tritel, Inc., Mr. Watford was employed with
Chemfirst Inc. from 1983 to 1999, where he last served as Director of Human
Resources.
The Bylaws of Tritel, Inc. provide that the Board of Directors will have
between one and thirteen members. According to the terms of the Stockholders'
Agreement, the Board of Directors will consist of thirteen members. For so long
as required by the FCC, the management stockholders will designate four
members, each of whom must be an officer of Tritel, Inc. and each of whom will
have 1/2 of a vote, AT&T Wireless will designate two members and the cash
equity investors will designate three members. The remaining four directors
will be designated by the management stockholders, and if permitted by FCC
regulation, one such designation will be subject to the consent of the cash
equity investors alone, with the remaining three subject to the consent of the
cash equity investors and AT&T Wireless. Once permitted by FCC regulation, the
remaining four directors will be designated by the cash equity investors, with
three of these designations subject to the consent of AT&T Wireless and Messrs.
Mounger, Martin and Sullivan. All directors will hold office until the annual
meeting of stockholders next following their election and until their
successors are elected and qualified. No director may be removed without cause.
Officers are elected annually by and serve at the discretion of the Board of
Directors.
Tritel, Inc.'s Bylaws provide that the Board of Directors may establish
committees to exercise certain powers delegated by the Board of Directors. At
present, the Board has established an Audit Committee, whose members are Mr.
Coleman, Mr. Fuqua and Ms. Hall, and a Compensation Committee, whose members
are Messrs. Hubregsen, Maschmann and Shepherd.
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
EXECUTIVE COMPENSATION
The following table sets forth certain information with respect to the
compensation paid by Tritel, Inc. for services rendered during fiscal year 1998
by its chief executive officer and its four most highly compensated executive
officers. Mr. Arnett became President in January 1999 and was not an employee
of Tritel, Inc. prior to such appointment.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------------------------------ -------------
SECURITIES
OTHER ANNUAL UNDERLYING
NAME AND PRINCIPAL POSITION SALARY BONUS COMPENSATION OPTIONS
- ------------------------------------------- ----------- ----------- -------------- -------------
<S> <C> <C> <C> <C>
William M. Mounger, II
Chairman of the Board and Chief
Executive Officer ........................ $225,000 $112,500 -- --
Jerry M. Sullivan, Jr.
Executive Vice President and
Chief Operating Officer .................. 225,000 112,500 -- --
E.B. Martin, Jr.
Executive Vice President and
Chief Financial Officer .................. 225,000 112,500 -- --
Karlen Turbeville
Senior Vice President -- Finance ......... 175,000 87,500 -- --
John Greathouse
Senior Vice President -- Chief
Technical Officer ........................ 175,000 97,500 $2,700 --
</TABLE>
Stock Options
There were no stock options granted to the named executive officers during
fiscal year 1998.
DIRECTORS COMPENSATION
It is not anticipated that the directors designated by the cash equity
investors will receive cash compensation for their service on the Board of
Directors. Other non-employee directors receive a
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<PAGE>
quarterly stipend of $2,500, $1,000 for attending each Board or committee
meeting and $500 for participating in each Board or committee meeting held by
teleconference. In addition, Tritel, Inc. has adopted the 1999 Stock Option
Plan for Non-Employee Directors and anticipates granting stock options to
qualifying non-employee directors in fiscal year 1999. All directors, including
directors who are Tritel, Inc. employees, will be reimbursed for out-of-pocket
expenses in connection with attendance at meetings.
EMPLOYMENT AGREEMENTS
Tritel, Inc. has entered into employment agreements with Messrs. Arnett,
Martin, Mounger and Sullivan. The employment agreements provide for a term of
five years at an annual base salary of $225,000, subject to increase as
determined by the Board of Directors. Each executive officer will also be
eligible for an annual bonus of up to 50% of his base salary upon achievement
of certain objectives to be determined by the Board of Directors or its
Compensation Committee.
The employment agreements provide for termination:
o by the executive officer, at any time and at his sole discretion upon
30 days' written notice to Tritel, Inc.;
o by the executive officer, at any time for "Good Reason," as defined in
the employment agreements, upon written notice to Tritel, Inc.;
o by Tritel, Inc., at any time for "cause," as defined in the employment
agreements, upon written notice to the executive officer;
o automatically, upon the executive officer's death;
o by Tritel, Inc., upon the executive officer's "Disability," as defined
in the employment agreements, upon written notice to the executive
officer;
o by Tritel, Inc., immediately in the event of an uncured breach of the
Management Agreement by the Manager, as defined below; and
o by Tritel, Inc., if Tritel, Inc. does not meet certain corporate
objectives.
Depending upon the reason for termination of the employment agreements,
the executive officer may be entitled to a severance payment upon such
termination.
The employment agreements grant to Tritel, Inc. certain repurchase rights
with respect to the shares of Class A Common and Class C Common received by
some of the executive officers upon the closing of the joint venture and the
shares of Class A Common received by William S. Arnett. The employment
agreements provide that the equity to be received by the executive officers is
subject to the following vesting schedule:
<TABLE>
<CAPTION>
VESTING DATE EVENT PERCENT OF BASE SHARES
- ------------------------------------------------------------------------- -----------------------
<S> <C>
Commencement Date(1) ............................................... 20%
Second Anniversary ................................................. 15
Third Anniversary .................................................. 15
Fourth Anniversary ................................................. 15
Fifth Anniversary .................................................. 15
Completion of Year 1 and Year 2 of Minimum Build-Out Plan .......... 10
Completion of Year 3 of Minimum Build-Out Plan ..................... 10
--
Total ............................................................. 100%
===
------------
(1) The first vesting date event for Mr. Arnett is the First Anniversary.
</TABLE>
For purposes of this vesting schedule, the term "Base Shares" means
eleven-fifteenths (11/15) of the executive officer's Class A Common and Class C
Common and, in the case of Mr. Arnett, eleven-fifteenths (11/15) of Class A
Common. The employment agreements provide for repurchase by
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<PAGE>
Tritel, Inc. of each executive officer's non-vested stock upon the occurrence
of specified events and allow for accelerated vesting upon certain termination
events. Until the stock is vested, the certificates evidencing the shares of
stock are to be held in escrow.
The employment agreements also contain customary restrictions on the
executive officers' ability to compete with Tritel, Inc., solicit employees of
Tritel, Inc. and on the disclosure of confidential information of Tritel, Inc.
Notwithstanding the foregoing, certain terms of Mr. Arnett's employment
agreement differ from the employment agreements of the other executive
officers. With respect to termination, Mr. Arnett may be terminated by Tritel,
Inc., at any time with or without "Cause," as defined in the employment
agreements, upon written notice to him, and Mr. Arnett's employment is not
subject to the terms of the Management Agreement.
1999 STOCK OPTION PLAN
Tritel, Inc.'s 1999 Stock Option Plan authorizes the grant of certain
tax-advantaged stock options that are intended to qualify as "incentive stock
options" under Section 422 of the Internal Revenue Code of 1986, as amended,
nonqualified stock options, restricted shares, deferred shares and stock
appreciation rights for the purchase of an aggregate of up to 13,566 shares of
common stock of Tritel, Inc. ("Awards"). The Stock Option Plan provides for the
grant of Awards to qualified officers, employee directors and other key
employees of, and consultants to, Tritel, Inc. and its subsidiaries, provided,
however that incentive stock options may only be granted to employees. As of
June 30, 1999, no options have been issued under the Stock Option Plan. As of
June 30, 1999, 11,395 shares have been issued pursuant to restricted stock
grants. The maximum term of any stock option to be granted under the Stock
Option Plan is ten years, except that with respect to incentive stock options
granted to an individual who owns stock possessing more than 10% of the total
combined voting power of all classes of stock of Tritel, the term of those
stock options shall be for no more than five years. The number and terms of
each Award and all questions of interpretation with respect to the Stock Option
Plan, including the administration of, and amendments to, the Stock Option
Plan, are determined by the Board of Directors or a compensation committee
designated by the Board.
The exercise price of incentive stock options and nonqualified stock
options granted under the Stock Option Plan must not be less than the fair
market value of the common stock on the grant date, except that the exercise
price of incentive stock options granted to a 10% stockholder must not be less
than 110% of such fair market value on the grant date. The aggregate fair
market value on the date of grant of the common stock for which incentive stock
options are exercisable for the first time by an employee during any calendar
year may not exceed $100,000. The Stock Option Plan will terminate in 2009
unless extended by amendment.
In the event a participant in the Stock Option Plan terminates employment
with Tritel, Inc., the Board or the compensation committee may accelerate the
vesting and exercisability of any stock option or stock appreciation right or
lapse the restrictions on any restricted share or deferred share if it
determines such action to be equitable under the circumstances or in Tritel,
Inc.'s best interest.
1999 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
Tritel, Inc.'s 1999 Stock Option Plan for Non-employee Directors
authorizes the grant of certain nonqualified stock options for the purchase of
an aggregate of up to 50,000 shares of common stock of Tritel, Inc. to
non-employee directors of Tritel, Inc. As of June 30, 1999, no options have
been issued under the Non-employee Directors Plan. The maximum term of any
stock option to be granted under the Non-employee Directors Plan is ten years.
Grants of options under the Non-employee Directors Plan and all questions of
interpretations with respect to the Non-employee Directors Plan, including the
administration of, and amendments to, the Non-employee Directors Plan, are
determined by the Board of Directors.
The exercise price of nonqualified stock options granted under the
Non-employee Directors Plan must not be less than the fair market value of the
common stock on the grant date. The Non-employee Directors Plan will terminate
in 2009 unless extended by amendment.
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
TRANSFER OF LICENSES TO TRITEL, INC.
As part of the joint venture transactions, Tritel, Inc. acquired C-Block
PCS licenses from Airwave Communications and E- and F-Block PCS licenses from
Digital PCS. The members of Digital PCS are Messrs. Mounger, Sullivan and
Martin. Airwave Communications transferred its C-Block PCS licenses, comprising
approximately 2.5 million Pops in Alabama, and $31.9 million of government
financing, to Tritel, Inc. in exchange for $14.4 million of Series C Preferred
Stock. Digital PCS transferred certain of its E- and F-Block licenses,
comprising 4.1 million Pops in Alabama and Mississippi, and $9.5 million of
government financing, to Tritel, Inc., in exchange for $3.8 million of Series C
Preferred Stock. Of the 4.1 million Pops transferred by Digital PCS, 1.7
million overlap with those contributed by AT&T Wireless.
OWNERSHIP OF THE REMAINING AFFILIATE LICENSES; OPTION TO PURCHASE LICENSES IN
GEORGIA AND FLORIDA
Digital PCS continues to hold PCS licenses covering approximately 1.5
million Pops in New Mexico and Texas. Tritel, Inc. has exercised an option to
acquire PCS licenses covering approximately 2.0 million Pops in Florida and
southern Georgia owned by Digital PCS for a purchase price of approximately $15
million in cash and Series C Preferred Stock. These licenses will be
transferred to Tritel PCS upon approval by the FCC. Tritel PCS subsequently
committed to grant to AT&T Wireless or its designee two options to purchase
these licenses, one of which covers the Fort Walton and Pensacola, Florida Pops
and the other the remaining Pops in Florida and southern Georgia. These options
expire on November 20, 1999 and April 20, 2000, respectively, unless extended.
The purchase price for the licenses subject to the option was the number
of shares of Series C Preferred that has a value equal to the aggregate amount
paid by Digital PCS to the FCC for the licenses, excluding the FCC debt
outstanding. Additionally, Tritel, Inc. assumed the FCC debt. Under this
formula, the purchase price equaled approximately $3.0 million in Series C
Preferred Stock and Tritel assumed $12.0 million in FCC debt.
In order to obtain AT&T Wireless's consent to exercise its option with
Digital PCS, Tritel, Inc. has agreed to amend certain of the AT&T joint venture
agreements to provide that the definition of PCS Territory in these documents
excludes the territory covered by the licenses subject to the option and
Tritel, Inc. and its subsidiaries shall only engage in specified permitted
activities related to the licenses or the territories covered by the licenses.
On April 20, 1999, Digital PCS sold licenses covering 1.6 million Pops in
Louisiana to Telecorp PCS, another AT&T Wireless joint venture partner, in
exchange for an equity interest in Telecorp PCS. Management intends for the
remaining licenses, covering 1.5 million Pops in Texas and New Mexico, to
remain with Digital PCS.
LOANS TO PREDECESSORS
On January 7, 1999, Tritel, Inc. entered into a secured promissory note
agreement under which it agreed to lend up to $2.5 million to Airwave
Communications and Digital PCS. Interest on advances under the loan agreement
is 10% per year. The interest will compound annually and interest and principal
are due at maturity of the note. The note is secured by Airwave
Communications's and Digital PCS's ownership interest in Tritel, Inc. and
certain equity securities of TeleCorp PCS. Any proceeds from the sale of
licenses by Airwave Communications and Digital PCS, net of the FCC debt
repayment, are required to be applied to the note balance. If the note has not
been repaid within five years, it will be repaid through a reduction of Airwave
Communications's and Digital PCS's interest in Tritel, Inc. based on a
valuation of Tritel, Inc.'s stock at that time.
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MANAGEMENT AGREEMENT
Tritel, Inc. has entered into a Management Agreement with Tritel
Management, LLC, a Mississippi limited liability company, which is wholly owned
by the Messrs. Martin, Mounger and Sullivan. Pursuant to the Management
Agreement, Tritel Management is to be responsible for the design, construction
and operation of Tritel, Inc. and its business, all subject to Tritel, Inc.'s
oversight, review and ultimate control and approval. Tritel will pay Tritel
Management a fee of $10,000 per year for such services and will reimburse
Tritel Management for out-of-pocket expenses incurred on behalf of Tritel, Inc.
The term of the Management Agreement is five years, subject to termination upon
the occurrence of certain events described in the Management Agreement.
RELATIONSHIP WITH MERCURY COMMUNICATIONS
Mercury Communications, a company wholly owned by Messrs. Martin, Mounger
and Sullivan, provides management services to Alaska-3 Cellular, LLC, the owner
of the non-wireline Alaska-3 Cellular license. In conjunction with Mercury
Communications' transfer of its employees to Tritel, Inc., Mercury
Communications has subcontracted to Tritel, Inc. the back-office management
functions associated with managing Alaska-3's cellular market. For the services
provided by Tritel, Inc., Mercury Communications pays a monthly fee in the
amount of $14,250.
During 1997 and 1998, Tritel, Inc. reimbursed Mercury Communications for
actual expenses to cover the salaries and employee benefits of Mercury
Communications employees who were providing services almost exclusively to
Tritel, Inc. Tritel, Inc. reimbursed Mercury Communications $1,312,000 and
$3,709,000 for such expenses in 1997 and 1998, respectively. On January 7,
1999, after consummation of the transactions described herein, the employees of
Mercury Communications who were providing services to Tritel, Inc. became
employees of Tritel, Inc.
During April 1997, Tritel, Inc. advanced $249,000 on behalf of Mercury
Communications to repay a loan Mercury Communications had incurred from a third
party. The balance due from Mercury Communications on this advance was $247,000
at December 31, 1997 and 1998 and June 30, 1999.
RELATIONSHIP WITH MERCURY WIRELESS MANAGEMENT, INC.
Mercury Wireless Management, Inc., a company wholly owned by Messrs.
Martin, Mounger and Sullivan, provides management and marketing services to
communications tower owners, including municipalities. Mercury Wireless
Management has contracted to provide such services to the City of Jackson,
Mississippi. Under the City of Jackson contract, Mercury Wireless Management
receives a percentage of rentals generated from the leasing of the facilities
managed by Mercury Wireless Management. Tritel, Inc. has entered into various
leases to co-locate its equipment on certain towers owned by the City of
Jackson and managed by Mercury Wireless Management. These leases were
negotiated on an arms length basis and incorporate terms substantially
identical to those offered by the City of Jackson to unrelated third-party
carriers.
Tritel, Inc.'s employees perform certain services on behalf of Mercury
Wireless Management, and Mercury Wireless Management reimburses Tritel, Inc.
for these services. Such amounts totaled $17,000 for 1997 and $11,000 for 1998
and were included in amounts due from affiliates at December 31, 1997 and 1998.
RELATIONSHIP WITH WIRELESS FACILITIES, INC.
Tritel, Inc. receives site acquisition and microwave relocation services
from Wireless Facilities, Inc. Scott I. Anderson, who is a director of Tritel,
is also a director of Wireless Facilities.
RELATIONSHIP WITH AT&T WIRELESS
Tritel, Inc. has entered into joint venture agreements with AT&T Wireless
and its affiliates, including the Securities Purchase Agreement, the Closing
Agreement related thereto, Stockholders' Agreement, Network Membership License
Agreement, Roaming Agreement, Resale Agreement,
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Roaming Administration Agreement and Long Distance Agreement. AT&T Wireless
holds Series A Preferred Stock and Series D Preferred Stock valued at $137.1
million and has designated two directors to Tritel, Inc.'s Board of Directors,
Ann K. Hall and H. Lee Maschmann.
RELATIONSHIP WITH TELECORP PCS AND TRITON PCS
Tritel, Inc. has common stockholders with TeleCorp PCS and Triton PCS and
may be deemed an affiliate by virtue of this common ownership. Scott I.
Anderson and Gary S. Fuqua, two of Tritel, Inc.'s directors, serve as directors
of TeleCorp PCS. Mr. Anderson also serves as a director of Triton PCS. Tritel,
Inc. has entered into an agreement with TeleCorp PCS and Triton PCS to adopt
the common brand name, SunCom, that will be co-branded with the AT&T brand
name.
RELATIONSHIP WITH ABC WIRELESS, L.L.C.
Tritel, Inc. has made a loan of $7.5 million to ABC Wireless, L.L.C. for
the purpose of bidding on licenses in the FCC's auction of C-Block PCS
licenses. The members of ABC Wireless are Mr. Anderson, a director of Tritel,
Inc., and Gerald T. Vento and Thomas H. Sullivan, directors and executive
officers of TeleCorp PCS. See "Management's Discussion and Analysis -- Pending
License Acquisition."
RELATIONSHIP WITH FLYING A TOWERS
Tritel, Inc. has leased several communication towers and expects to lease
several additional towers from Flying A Towers. Mr. Arnett is President of
Flying A Towers.
RELATIONSHIP WITH INITIAL PURCHASERS
Affiliates of the Initial Purchasers also provide banking, advisory and
other financial services to Tritel PCS and its affiliates in the ordinary
course of business. Toronto Dominion (Texas), Inc., an affiliate of TD
Securities (USA) Inc., is the administrative agent and issuing bank and
affiliates of each of the Initial Purchasers are lenders under Tritel, Inc.'s
bank facility. Tritel, Inc. intends to enter into an interest rate swap
agreement with Barclays Bank PLC.
RELATIONSHIP WITH CASH EQUITY INVESTORS
Tritel, Inc. and the cash equity investors have entered into an Investors
Stockholders' Agreement to provide for certain rights with respect to the
management of Tritel, Inc., and to provide for certain restrictions with
respect to the sale, transfer or other disposition of Tritel, Inc. stock beyond
those rights and restrictions set forth in the Stockholders' Agreement.
The Investors Stockholders' Agreement provides, subject to limited
exceptions with respect to removal of directors and filling of vacancies, that
the cash equity investors will vote all of their shares to cause the election
of one individual to be designated as a director by each of Conseco, Dresdner
and Entergy. Initially, the directors designated by Conseco, Dresdner and
Entergy will be Andrew Hubregsen, Alexander P. Coleman and Gary S. Fuqua,
respectively. In the event that the right of the cash equity investors to
nominate directors is reduced to one director, then that right will be
exercisable by cash equity investors owning two-thirds of the outstanding
shares of common stock and/or Series C Preferred Stock held by all cash equity
investors.
Each cash equity investor has agreed, subject to certain limited
exceptions, that it will not directly or indirectly transfer or otherwise grant
or create certain liens in, give, place in trust or otherwise voluntarily or
involuntarily dispose of ("Transfer") any share of the capital stock of Tritel,
Inc. held by it as of January 7, 1999 or thereafter acquired, including a
proposed Transfer to any Prohibited Transferee, as defined in the Stockholders'
Agreement, or any Regional Bell Operating Companies, Microsoft Corporation,
GTE, SNET or any of their respective affiliates, successors or assigns. In
addition, if a cash equity investor desires to Transfer any or all of its
shares of the capital stock of Tritel, Inc. to an affiliate or affiliated
successor, then the cash equity investor must first offer all of
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those shares to the other cash equity investors, subject to certain terms and
conditions. Each cash equity investor also has tag along rights and drag along
rights. The tag along rights enable non-selling cash equity investors to
participate in a sale of certain capital stock of Tritel, Inc. by other selling
cash equity investors, subject to certain terms and conditions. The drag along
rights provide, under certain circumstances, that a cash equity investor that
proposes to sell its shares of the capital stock of Tritel, Inc. may compel
other non-selling cash equity investors to participate in the proposed sale.
The Investors Stockholders' Agreement will terminate upon the termination
of the Stockholders' Agreement.
RELATIONSHIP WITH YOUNG, WILLIAMS, HENDERSON & FUSELIER, P.A.
Young, Williams, Henderson & Fuselier, P.A. provides legal services to
Tritel. E.B. Martin, Jr., who is an officer and director of Tritel, is also a
shareholder of the law firm of Young, Williams, Henderson & Fuselier and
Associates Ltd., an affiliate of Young, Williams, Henderson & Fuselier, P.A.
James H. Neeld, IV, who is Senior Vice President-General Counsel and Secretary
of Tritel, Inc., is also of counsel to Young, Williams, Henderson & Fuselier,
P.A.
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PRINCIPAL STOCKHOLDERS
The following table sets forth certain information with respect to
beneficial ownership of Tritel, Inc.'s voting securities, as well as its
non-voting common stock, as of the date of this prospectus, by
o each stockholder who is known by Tritel, Inc. to own beneficially more
than 5% of any class of Tritel, Inc.'s voting securities,
o each of Tritel, Inc.'s directors,
o each of the named executive officers and
o all directors and executive officers of Tritel, Inc. as a group.
On January 7, 1999, several institutional equity investors, some of which
are named in the table below, purchased an aggregate of $149.2 million of
Series C Preferred Stock of Tritel, Inc. Of this amount, $99.4 million was
funded on January 7, 1999 and the remaining $49.8 million is due to be funded,
under the institutional investors' irrevocable and unconditional commitments,
on September 30, 1999. Most of these institutional investors entered into
investor loan agreements with Ericsson pursuant to which Ericsson provided a
total of $60.8 million of loans to them, severally, to fund a portion of the
January 7, 1999 purchase.
On the same date, Airwave Communications purchased $11.2 million of the
Series C Preferred Stock of Tritel, Inc. and Digital PCS purchased $3.0 million
of Series C Preferred Stock. The full $14.2 million was funded on January 7,
1999 by means of an investor loan from Ericsson in that amount. As part of a
restructuring of their operations, Digital PCS has agreed to transfer all of
its Series C Preferred Stock, including the foregoing $3.0 million of Series C
Preferred Stock, to Airwave Communications, which will also assume the $3.0
million loan from Ericsson.
The investor loans are subject to limited recourse. The interest thereon,
which is at a fixed rate, is not payable for eight years, and the loans are
secured by $121.8 million of Series C Preferred Stock owned by the
institutional investors and $32.4 million of Series C Preferred Stock owned by
Airwave Communications, including the shares to be acquired from Digital PCS.
Ericsson made these loans as an additional inducement for Tritel, Inc. to agree
to purchase from Ericsson not less than $300 million of PCS infrastructure
equipment, including base stations, switches, software and related peripheral
equipment.
Shares of Series C Preferred Stock are convertible immediately into shares
of Class A Common Stock on a one-for-one basis and, accordingly, holders of
Series C Preferred Stock are deemed to own the same number of shares of Class A
Common Stock. On all matters to be submited to the stockholders of Tritel,
Inc., the holders of Series C Preferred Stock have the right to vote on an
as-converted basis as a single class with the holders of Tritel, Inc.'s Class A
Common Stock.
Together the Class A Common Stock and the Series C Preferred Stock cast
4,990,000 votes on all matters not requiring a class vote, while the nine
shares of Voting Preference Common Stock cast 5,010,000 votes on all matters
not requiring a class vote. The votes to which the Class A Common Stock and
Series C Preferred Stock are collectively entitled are allocated to each share
on a pro rata basis. Similarily, the votes to which the nine shares of Voting
Preference Common Stock are entitled are allocated to each share on a pro rata
basis. The Voting Preference Common Stock loses its voting preference when the
rules of the FCC so permit, which is currently ten years after the respective
issuances of Tritel, Inc.'s C- and F-Block licenses. The Class C Common Stock
is non-voting stock.
Unless otherwise indicated, each person named below has sole voting and
investment power with respect to the shares beneficially owned. Unless
otherwise indicated, the address of each person named below is c/o Tritel,
Inc., 111 E. Capitol Street, Suite 500, Jackson, Mississippi 39201.
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<TABLE>
<CAPTION>
COMMON STOCK
---------------------------------------------------------------------
CLASS A CLASS C VOTING PREFERENCE
COMMON COMMON COMMON
------------------------ ------------------------ -------------------
NAME NUMBER % NUMBER % NUMBER %
- ----------------------------------- ------------- ---------- ------------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
AT&T Wireless(2) .................. -- -- -- -- -- --
Conseco, Inc.(4) .................. -- -- -- -- -- --
Dresdner Kleinwort Benson
Private Equity
Partners L.P.(5) ................. -- -- -- -- -- --
Triune PCS, LLC(6) ................ -- -- -- -- -- --
Entergy Wireless
Corporation(7) ................... -- -- -- -- -- --
MF Financial(8) ................... -- -- -- -- -- --
Airwave Communications,
LLC(9) ........................... -- -- -- -- -- --
William M. Mounger, II(9)(10) ..... 5,961.36 16.8% 1,725.56 33.3% 3.0 33.3%
Jerry M. Sullivan, Jr.(9) ......... 5,961.36 16.8 1,725.56 33.3 3.0 33.3
E.B. Martin, Jr. .................. 5,961.36 16.8 1,725.56 33.3 3.0 33.3
Karlen Turbeville ................. 2,713.03 7.7 -- -- -- --
William S. Arnett ................. 4,069.54 11.6 -- -- -- --
All officers and directors as a
group ............................ 33,551.82 100.0% 5,176.68 100.0% 9.0 100.0%
<CAPTION>
PREFERRED STOCK
-----------------------------
PERCENTAGE
SERIES C OF TOTAL
----------------------------- VOTING
NAME NUMBER %(1) POWER(2)
- ----------------------------------- ------------------ ---------- -----------
<S> <C> <C> <C>
AT&T Wireless(2) .................. 46,374.10(3) 20.1% 8.8%
Conseco, Inc.(4) .................. 50,000.00 27.1 9.5
Dresdner Kleinwort Benson
Private Equity
Partners L.P.(5) ................. 30,000.00 16.3 5.7
Triune PCS, LLC(6) ................ 24,139.04 13.1 4.6
Entergy Wireless
Corporation(7) ................... 20,000.00 10.9 3.8
MF Financial(8) ................... 10,000.00 5.4 1.9
Airwave Communications,
LLC(9) ........................... 32,392.36 17.6 6.1
William M. Mounger, II(9)(10) ..... 2,000.00 1.1 18.2
Jerry M. Sullivan, Jr.(9) ......... -- -- 17.8
E.B. Martin, Jr. .................. -- -- 17.8
Karlen Turbeville ................. -- -- *
William S. Arnett ................. -- -- *
All officers and directors as a
group ............................ 2,000.00 1.1% 56.8%
</TABLE>
- ----------
* Represents less than 1%.
(1) The percentage of the Series C Preferred Stock owned by AT&T Wireless
assumes it has converted all of its Series D Preferred Stock into Series C
Preferred Stock. The percentage of the Series C Preferred Stock owned by
each other holder assumes AT&T Wireless has not converted its Series D
Preferred Stock.
The percentage of the total voting power of Tritel, Inc. held by all
persons in the table assumes AT&T Wireless has converted its Series D
Preferred Stock.
(2) Address is: 5000 Carillon Point, Kirkland, WA 98033.
(3) Consists of 46,374.10 shares Series D Preferred Stock, which are assumed
to have been converted into an equivalent number of shares of Series C
Preferred Stock. AT&T Wireless also owns 90,668.33 shares of Series A
Preferred Stock.
(4) These shares are held through Washington National Insurance Company and
United Presidential Life Insurance Company. Address is: 11825 North
Pennsylvania Street, Carmel, IN 46032.
(5) Address is: 75 Wall Street, 24th Floor, New York, NY 10005.
(6) Address is: 4770 Baseline Road, Suite 380, Boulder, CO 80303.
(7) On April 26, 1999, Entergy Wireless Company notified Tritel, Inc. and the
stockholders of Tritel, Inc. of its offer to sell its 20,000 shares of
Series C Preferred Stock pursuant to the right of first offer held by
certain stockholders of Tritel, Inc. under the Stockholders' Agreement and
the Investors Stockholders' Agreement. Entergy has advised Tritel, Inc.
that its decision to sell its shares reflects a shift in its strategic
focus. Tritel, Inc. has received indications that certain other existing
stockholders are interested in purchasing Entergy's shares. Entergy's
address is: Three Financial Centre, 900 South Shackelford, Suite 210,
Little Rock, AR 72211.
(8) Address is: 73 Treemont Street, Suite 13, Boston, MA 02108.
(9) Assumes the transfer of 6,802.4 shares of Series C Preferred Stock from
Digital PCS to Airwave Communications. Southern Farm Bureau Life Insurance
Company has a controlling interest in Airwave Communications. Mr. Mounger
and his family have an approximately 10% equity interest in Airwave
Communications through M3, LLC. Jerry M. Sullivan, Jr.'s wife and members
of her family have a less than 10% equity interest in Airwave
Communications through McCarty Communications LLC. Messrs. Mounger and
Sullivan disclaim any beneficial interest in the shares of Tritel, Inc.
owned by Airwave Communications.
(10) Mr. Mounger controls Trillium PCS, LLC, which owns 2,000 shares of Series
C Preferred Stock.
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DESCRIPTION OF CERTAIN INDEBTEDNESS
GOVERNMENT DEBT
Because Tritel, Inc. qualifies as a small business for the purpose of
C-Block licenses and a very small business for the purposes of F-Block
licenses, it is entitled to receive preferential financing for these licenses
from the U.S. Government. The total license fee payable to the U.S. Government
in respect of the C-Block licenses for which Airwave Communications was named
the winning bidder is approximately $35.5 million. Under the preferential
financing terms for the C-Block Licenses, Airwave Communications has paid a
deposit of 10% of the license fee, which is approximately $3.5 million. Under
the preferential financing terms for the C-Block licenses, Tritel, Inc. will
pay interest only for the first six years of the license term at a fixed
interest rate equal to 7.0% per annum with principal amortized during the
seventh through tenth years of the license. With respect to the F-Block
licenses, the total license fee payable to the U.S. Government is approximately
$12.0 million. Under the preferential financing terms for the F-Block licenses,
Tritel, Inc. will be required to make quarterly payments of interest only, at a
fixed interest rate of 6.125% per annum for the first two years after the
license grant date, and quarterly payments of interest and principal over the
remaining eight years of the license term.
As a C- and F-Block licensee, Tritel, Inc. may incur substantial financial
penalties, license revocation or other enforcement measures at the FCC's
discretion, in the event that it fails to make timely quarterly installment
payments. Where a C or F-Block licensee anticipates defaulting on any required
payment, it may request a three to six month grace period before the FCC
cancels its license. In the event of default by a C- or F-Block licensee, the
FCC could reclaim the licenses, re-auction them, and subject the defaulting
party to a penalty comprised of the difference between the price at which it
acquired its license and the amount of the winning bid at re-auction, plus an
additional penalty of three percent of the subsequent winning bid.
BANK FACILITY
The following description is not complete and is qualified in its entirety
by reference to the provisions of the Amended and Restated Loan Agreement,
dated as of March 31, 1999 among Tritel PCS, as borrower, Tritel, Inc., as
parent, Toronto Dominion (Texas), Inc., Barclays Bank PLC, NationsBank, N.A.,
and other financial institutions signatory thereto, as lenders, and Toronto
Dominion (Texas), Inc., as administrative agent for the lenders and The
Toronto-Dominion Bank, Houston Agency, as the issuing bank, and other related
documents entered into in connection with the bank facility.
The bank facility provides for an aggregate of up to $550 million of
senior secured credit facilities including up to:
o a $250 million reducing revolving credit facility (the "Revolver"),
o a $100 million term credit facility (the "Term Loan A") and
o a $200 million term credit facility (the "Term Loan B").
The final maturity date for the Revolver and the Term Loan A is June 30,
2007 and for the Term Loan B is December 31, 2007. At June 30, 1999, Tritel PCS
had amounts outstanding under the bank facility of approximately $200 million.
Tritel PCS's ability to draw funds under the bank facility is subject to
customary conditions including, among others, the following:
o Total Debt outstanding may not exceed 70% of Total Capital, and
o Senior Debt may not exceed 50% of Total Capital, except that under
certain circumstances, including satisfaction of buildout and subscriber
milestones, this percentage may be increased to as much as 55%.
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As of June 30, 1999, Tritel PCS could have borrowed up to a total of
approximately $550 million pursuant to the terms of the bank facility.
The bank facility also provides Tritel PCS with letters of credit of up to
$10 million under the Revolver.
At the option of Tritel PCS, the Revolver and the Term Loan A bear
interest at either the base rate, which is the greater of the prime rate of
Toronto-Dominion Bank, New York Branch, or the federal funds rate, plus 0.5%,
plus an applicable margin ranging from a minimum of 0.75% to a maximum of
2.75%, or LIBOR, plus an applicable margin ranging from a minimum of 1.75% to a
maximum of 3.75% (the "LIBOR Margin"), in each case, depending on the
occurrence of the third anniversary of the Loan Agreement, the generation of
positive operating cash flow by Tritel PCS and Tritel PCS's total leverage
ratio. At the option of Tritel PCS, the Term Loan B bears interest at either
the base rate, plus an applicable margin of either 2.75% or 3.50%, or LIBOR,
plus an applicable margin of either 3.75% or 4.50%, in each case depending on
whether or not Tritel PCS has achieved positive cash flow and the third
anniversary of the bank facility has occurred. Tritel PCS must pay a per annum
commitment fee equal to the product of either 0.5%, 1% or 1.75%, depending on
the ratio of available Revolver and Term Loan A commitments to total Revolver
and Term Loan A commitments, and the sum of the available Revolver and Term
Loan A commitments. Tritel PCS also must pay a letter of credit fee equal to
the LIBOR Margin plus 0.125% per annum on the undrawn face amount of any
outstanding letters of credit from the date of issuance through the expiration
date of those letters of credit.
Outstanding loans drawn from the Revolver or the Term Loan A bearing
interest at the base rate plus the applicable margin may be prepaid without
penalty. Prepayments of the Term Loan B made on or before December 31, 2001
will require a prepayment fee ranging from 0% to 3% of the prepayment amount,
depending on the date of prepayment. Prepayments of any loans under the Bank
Facility bearing interest at LIBOR plus the LIBOR Margin will require payment
of an additional amount sufficient to compensate the lenders for all losses and
out-of-pocket expenses other than lost margins on the loans incurred in
connection with these prepayments.
The bank facility is secured by:
o a perfected first priority lien on all tangible and intangible assets,
including FCC licenses if legally permitted, of Tritel, Inc., Tritel PCS
and each of their present and future subsidiaries,
o a pledge of all the capital stock of Tritel PCS and each of its present
and future subsidiaries and
o a pledge of Tritel, Inc.'s equity subscription agreements.
In addition, the bank facility is secured by upstream guarantees from Tritel,
Inc. PCS's direct and indirect subsidiaries, both present and future, and a
downstream guarantee from Tritel, Inc.
The bank facility contains various covenants that restrict the ability of
Tritel, Inc. and its subsidiaries, among other things, to:
o incur additional indebtedness,
o grant liens,
o make guarantees,
o engage in mergers, acquisitions, investments, consolidations,
liquidations, dissolutions and asset sales,
o make distributions and other restricted payments,
o engage in transactions with affiliates,
o own real estate and
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o restrict upstream dividends by subsidiaries to Tritel PCS.
The bank facility contains certain financial and operating covenants
including, among other things:
o a maximum senior debt to total capitalization ratio,
o a maximum total debt to total capitalization ratio,
o a minimum percentage of covered Pops,
o a minimum number of subscribers,
o a minimum amount of revenues,
o a maximum amount of capital expenditures,
o a maximum total leverage ratio,
o a maximum senior leverage ratio,
o a minimum fixed charge coverage ratio and
o a minimum interest coverage ratio.
Events of default under the bank facility include:
o any acceleration of, or any default permitting acceleration of,
indebtedness of Tritel PCS, its subsidiaries or Tritel, Inc. exceeding
$5.0 million,
o loss of the right to use any AT&T trademark pursuant to the Network
Membership License Agreement within five years after March 31, 1999 and,
thereafter, loss of such right under specific circumstances,
o failure of any party to the Securities Purchase Agreement, Stockholders'
Agreement or Bid Equity Commitments Documentation, as defined in the
Loan Agreement, to comply with a funding or contribution obligation
thereunder exceeding 30 days,
o the occurrence or existence of any Change of Control Event, as defined
in the Loan Agreement, and
o other usual and customary events of default under senior secured credit
facilities.
The lenders under the bank facility received fees reflecting then-existing
market conditions, as well as reimbursement of their expenses.
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THE EXCHANGE OFFER
PURPOSE AND EFFECT OF THE EXCHANGE OFFER
Tritel PCS originally sold the outstanding notes to NationsBanc Montgomery
Securities LLC, Barclays Capital Inc., TD Securities (USA) Inc., BNY Capital
Markets, Inc., CIBC World Markets Corp. (formerly CIBC Oppenheimer Corp.) and
Credit Lyonnais Securities (USA) Inc. (the "Initial Purchasers"). The Initial
Purchasers subsequently placed the outstanding notes with:
o qualified institutional buyers in reliance on Rule 144A under the
Securities Act; and
o qualified buyers outside the United States in reliance on Regulation S
under the Securities Act.
Tritel PCS entered into a registration rights agreement with the Initial
Purchasers, as a condition to their purchase of the outstanding notes, pursuant
to which Tritel PCS has agreed, for the benefit of the outstanding noteholders,
at its own expense, to use its reasonable best efforts file a registration
statement for this exchange offer, of which this prospectus is a part, with the
Securities and Exchange Commission within 60 days after the issue date of the
notes. In addition, Tritel PCS will use its reasonable best efforts to cause
the registration statement to become effective within 210 days after the issue
date of the notes. When the exchange offer registration statement is declared
effective, Tritel PCS will offer the registered notes in exchange for tender of
the outstanding notes. For each outstanding note tendered to Tritel PCS
pursuant to the exchange offer, the holder of such outstanding note will
receive a registered note having an original principal amount at maturity equal
to that of the tendered outstanding note.
Based upon interpretations by the SEC staff set forth in certain no-action
letters to third parties, including Exxon Capital Holdings Corp., SEC No-Action
Letter (April 13, 1989); Morgan Stanley & Co. Inc., SEC No-Action Letter (June
5, 1991); and Shearman & Sterling, SEC No-Action Letter (July 2, 1993), Tritel
PCS believes that the registered notes issued pursuant to this exchange offer
in exchange for the outstanding notes, in general, will be freely tradable
after the exchange offer, without compliance with the registration and
prospectus delivery requirements of the Securities Act. However, any purchaser
of outstanding notes who is a Tritel PCS "affiliate," within the meaning of
Rule 405 under the Securities Act, who does not acquire the registered notes in
the ordinary course of business, or who tenders in the exchange offer for the
purpose of participating in a distribution of the registered notes, could not
rely on the SEC staff position enunciated in such no-action letters and, in the
absence of an applicable exemption, must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with any
resale transaction. A holder's failure to comply with those requirements in
such an instance may result in that holder incurring liability under the
Securities Act which we will not indemnify.
As the above-mentioned no-action letters and the registration rights
agreement contemplate, each holder accepting the exchange offer is required to
represent to us, in a letter of transmittal, that:
o the holder or the person receiving the registered notes, whether or not
such person is the holder, will acquire those registered notes in the
ordinary course of business;
o the holder or any other acquiror is not engaging in a distribution of
the registered notes;
o the holder or any other acquiror has no arrangement or understanding
with any person to participate in a distribution of the registered
notes;
o neither the holder nor any other acquiror is a Tritel PCS affiliate
within the meaning of Rule 405 under the Securities Act; and
o the holder or any other acquiror acknowledges that if that holder or
other acquiror participates in the exchange offer for the purpose of
distributing the registered notes, it must comply with the registration
and prospectus delivery requirements of the Securities Act in connection
with any such resale and cannot rely on the above-mentioned no-action
letters.
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As indicated above, each broker-dealer that receives for its own account a
registered note in exchange for outstanding notes must acknowledge that it:
o acquired the outstanding notes for its own account as a result of
market-making activities or other trading activities;
o has not entered into any arrangement or understanding with Tritel PCS or
any Tritel PCS "affiliate" to distribute the registered notes; and
o will deliver a prospectus meeting the requirements of the Securities Act
in connection with any resale of the registered notes.
For a description of the procedures for resales by participating
broker-dealers, see "Plan of Distribution."
In the event that (1) changes in the law or the applicable interpretations
of the SEC staff do not permit Tritel PCS to effect this exchange offer, or (2)
if for any other reason the exchange offer is commenced and not consummated
within 30 days after the exchange offer registration statement is declared
effective, or (3) if any holder of Transfer Restricted Securities notifies
Tritel PCS prior to the 20th day following consummation of the exchange offer
that:
o it is prohibited by law or Commission policy from participating in the
exchange offer;
o that it may not resell the registered notes acquired by it in the
exchange offer to the public without delivering a prospectus and the
prospectus contained in the exchange offer registration statement is not
appropriate or available for such resales; or
o that it is a broker-dealer and owns outstanding notes acquired directly
from Tritel PCS or an affiliate of Tritel PCS,
then Tritel PCS will:
o file, on or prior to 30 days after the earlier of (a) the date on which
Tritel PCS determines that the exchange offer registration statement
need not or cannot be filed as a result of clause (1) above and (b) the
date on which Tritel PCS receives the notice specified in clause (3)
above, (such earlier date, the "Shelf Filing Deadline"), a shelf
registration statement pursuant to Rule 415 under the Act, which may be
an amendment to the exchange offer registration statement (the "Shelf
Registration Statement"), covering resales of the outstanding notes;
o use its reasonable best efforts to cause such Shelf Registration
Statement to become effective on or prior to 90 days after the Shelf
Filing Deadline for the Shelf Registration Statement; and
o use reasonable best efforts to keep effective the shelf registration
statement until the earlier of two years after the outstanding notes'
original issuance date, subject to extension under certain
circumstances, or such time as all of the applicable outstanding notes
have been sold.
"Transfer Restricted Securities" means:
o each outstanding note until the date on which such outstanding note has
been exchanged by a person other than a broker-dealer for a registered
note in the exchange offer;
o each outstanding note until following the exchange by a broker-dealer in
the exchange offer of an outstanding note for a registered note, the
date on which such registered note is sold to a purchaser who receives
from such broker-dealer on or prior to the date of such sale a copy of
the prospectus contained in the exchange offer registration statement;
o each outstanding note until the date on which such outstanding note has
been effectively registered under the Securities Act and disposed of in
accordance with the Shelf Registration Statement;
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o each outstanding note until the date on which such outstanding note is
distributed to the public pursuant to Rule 144 under the Securities Act;
and
o each registered note held by a broker-dealer until the date on which
such registered note is disposed of by a broker-dealer pursuant to the
"Plan of Distribution" section in this prospectus.
If:
o Tritel PCS fails to file any of the registration statements required by
the registration rights agreement on or before the date specified for
such filing;
o any of such registration statements is not declared effective by the
Commission on or prior to the date specified for such effectiveness (the
"Effectiveness Target Date");
o Tritel PCS fails to consummate the exchange offer within 30 business
days of the Effectiveness Target Date with respect to the exchange offer
registration statement;
o the Shelf Registration Statement is declared effective but thereafter
ceases to be effective or usable in connection with resales of Transfer
Restricted Securities during the periods specified in the registration
rights agreement; or
o the exchange offer registration statement is filed and declared
effective but thereafter will cease to be effective or fail to be usable
for its intended purpose without being succeeded immediately by a
post-effective amendment to such exchange offer registration statement
that cures such failure and that is itself declared effective
immediately (each such event referred to in the previous five clauses is
a "Registration Default"),
then Tritel PCS will pay liquidated damages to each holder of outstanding
notes, with respect to the first 90-day period immediately following the
occurrence of the first Registration Default in an amount equal to $.05 per
week per $1,000 principal amount of outstanding notes held by such holder.
The amount of the liquidated damages will increase by an additional $.05
per week per $1,000 principal amount of outstanding notes with respect to each
subsequent 90-day period until all Registration Defaults have been cured, up to
a maximum amount of liquidated damages for all Registration Defaults of $.25
per week per $1,000 principal amount of outstanding notes.
All accrued liquidated damages will be paid by Tritel PCS on each damages
payment date to the global note holder by wire transfer of immediately
available funds or by federal funds check and to holders of outstanding
certificated notes by wire transfer to the accounts specified by them or by
mailing checks to their registered addresses if no such accounts have been
specified.
Following the cure of all Registration Defaults, the accrual of liquidated
damages will cease but liquidated damages accrued and unpaid will survive until
paid in full.
Tritel PCS will, if and when it files the Shelf Registration Statement,
provide to each applicable holder of the outstanding notes copies of the
prospectus which is a part of the Shelf Registration Statement. A holder that
sells the outstanding notes pursuant to the Shelf Registration Statement
generally:
o must be named as a selling security holder in the related prospectus;
o must deliver a prospectus to purchasers;
o will be subject to certain of the civil liability provisions under the
Securities Act in connection with such sales; and
o will be bound by the provisions of the registration rights agreement
which are applicable to that holder, including certain indemnification
obligations.
In addition, each of the outstanding noteholders must deliver information
to Tritel PCS, to be used in connection with the Shelf Registration Statement,
in order to have his or her outstanding notes included in the Shelf
Registration Statement and to benefit from the provisions set forth in the
foregoing paragraph.
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The registration rights agreement covering the outstanding notes provides
that Tritel PCS will file an exchange offer registration statement with the SEC
within 60 days after the issue date of the notes. In the event that Tritel PCS
and the guarantors do not comply with their obligations under the registration
rights agreement, they will be required to pay to the holders of the notes
liquidated damages up to a maximum of $0.25 per week per $1,000 in principal
amount of notes held by such holders for each week or part of a week that the
Registration Default continues. Tritel PCS will not be required to pay
liquidated damages for more than one Registration Default at any given time.
Liquidated damages will cease to accrue following the cure of all Registration
Defaults. The sole remedy available to the outstanding noteholders will be the
collection of these liquidated damages. All liquidated damages payable because
a Registration Default occurred will be payable to the outstanding notesholders
in cash on each May 15 and November 15, commencing with the first such date
occurring after any such liquidated damages begin to accrue, until the
Registration Default is cured.
Outstanding noteholders must:
o make certain representations to us in order to participate in the
exchange offer;
o deliver information to be used in connection with the shelf registration
statement, if required; and
o provide comments on the shelf registration statement within the time
periods set forth in the registration rights agreement,
in order to have their outstanding notes included in the Shelf Registration
Statement and to benefit from the provisions regarding liquidated damages
payable because a Registration Default occurred, as set forth above. By
acquiring Transfer Restricted Securities, a holder will be deemed to have
agreed to indemnify Tritel PCS against certain losses arising out of
information furnished by such holder in writing for inclusion in any Shelf
Registration Statement. holders of outstanding notes will also be required to
suspend their use of the prospectus included in the Shelf Registration
Statement under certain circumstances upon receipt of written notice to that
effect from Tritel PCS.
The preceding summary of the material provisions of the registration
rights agreement is subject to, and is qualified in its entirety by, all the
provisions of the registration rights agreement, a copy of which is filed as an
exhibit to the exchange offer registration statement of which this prospectus
is a part.
TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions set forth in this prospectus
and in the letter of transmittal for the exchange offer, we will accept any and
all outstanding notes validly tendered and not withdrawn prior to 5:00 p.m.,
New York City time, on the expiration date. See "--Expiration Date; Extensions;
Amendments." Tritel PCS will issue $1,000 original principal amount at maturity
of registered notes in exchange for each $1,000 original principal amount at
maturity of outstanding notes accepted in the exchange offer. Holders may
tender some or all of their outstanding notes pursuant to the exchange offer.
However, outstanding notes may be tendered only in integral multiples of
$1,000.
The form and terms of the registered notes are the same as the form and
terms of the outstanding notes except that:
o the registered notes have been registered under the Securities Act and
hence will not bear legends restricting their transfer; and
o the registered noteholders will not be entitled to certain rights under
the registration rights agreement covering the outstanding notes,
including the provisions providing for an increase in the interest rate
on the outstanding notes in certain circumstances relating to the timing
of the exchange offer, all of which rights will terminate when the
exchange offer is terminated.
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The registered notes will evidence the same debt as the outstanding notes
and will be entitled to the benefits of the indenture governing the outstanding
notes. As of the date of this prospectus, $372,000,000 aggregate principal
amount at maturity of notes were outstanding. We have fixed the close of
business on , 1999 as the record date for the exchange offer for purposes
of determining the persons to whom this prospectus and the letter of
transmittal will be mailed initially.
Outstanding noteholders do not have any appraisal or dissenters' rights
under the Delaware General Corporation Law or the indenture in connection with
the exchange offer. We intend to conduct the exchange offer in accordance with
the applicable requirements of the Exchange Act and the rules and regulations
of the SEC related to such offers.
Tritel PCS shall be deemed to have accepted validly tendered outstanding
notes when, as and if we give oral or written notice to The Bank of New York,
which is the exchange agent. The exchange agent will act as agent for the
tendering holders for the purpose of receiving the registered notes from Tritel
PCS.
If any tendered outstanding notes are not accepted for exchange either
because of an invalid tender, the occurrence of certain other events set forth
herein, or otherwise, the certificates for the unaccepted outstanding notes
will be returned, without expense, to the tendering holder as promptly as
practicable after the exchange offer's expiration date.
Holders who tender outstanding notes in the exchange offer will not be
required to pay brokerage commissions or fees or, subject to the instructions
in the letter of transmittal, transfer taxes with respect to the exchange of
outstanding notes pursuant to the exchange offer. We will pay all charges and
expenses, other than transfer taxes in certain circumstances, in connection
with the exchange offer. See "--Fees and Expenses."
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
We shall keep the exchange offer open for at least 30 days, or longer if
required by applicable law, including in connection with any material
modification or waiver of the terms or conditions of the exchange offer that
requires such extension, after the date that notice of the exchange offer is
mailed to outstanding noteholders. The expiration date shall be 5:00 p.m., New
York City time, on , 1999, unless we, in our sole discretion, extend the
exchange offer, in which case the expiration date shall be the latest date and
time to which we extend the exchange offer.
If we decide to extend the exchange offer, we will notify the exchange
agent of the extension by oral or written notice, and will mail an announcement
of the extension to the registered holders prior to 10:00 a.m., New York City
time, on the next business day after the previously scheduled expiration date.
Tritel PCS reserves the right, in its sole discretion:
o to delay accepting any outstanding notes, to extend the exchange offer
or to terminate the exchange offer if any of the conditions set forth
below under "--Conditions" shall not have been satisfied, by giving oral
or written notice of such delay, extension or termination to the
exchange agent; or
o to amend the terms of the exchange offer in any manner.
We will give oral or written notice of any delay in acceptance, extension,
termination or amendment to the registered holders as promptly as practicable.
PROCEDURES FOR TENDERING
Only an outstanding noteholder may tender such outstanding notes in the
exchange offer. To tender in the exchange offer, a holder must complete, sign
and date the letter of transmittal, or a facsimile thereof, have the signatures
thereon guaranteed if the letter of transmittal so requires, or transmit an
agent's message in connection with a book-entry transfer, and mail or otherwise
deliver
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the letter of transmittal or facsimile, or agent's message, together with the
outstanding notes and any other required documents, to the exchange agent prior
to 5:00 p.m., New York City time, on the expiration date. In addition, either:
o the exchange agent must receive the letter of transmittal and
certificates for the outstanding notes prior to the expiration date;
o the exchange agent must receive a timely confirmation of a book-entry
transfer of the outstanding notes into the exchange agent's account at
The Depository Trust Company pursuant to the procedure for book-entry
transfer described below, prior to the expiration date; or
o the holder must comply with the guaranteed delivery procedures described
below.
For effective tender, the exchange agent must receive the outstanding
notes or book-entry confirmation, as the case may be, the letter of
transmittal, and other required documents, at the address set forth below under
"--Exchange Agent" prior to 5:00 p.m., New York City time, on the expiration
date. Delivery of documents to the book entry transfer facility in accordance
with its procedure does not constitute delivery to the exchange agent.
DTC has authorized DTC participants that hold outstanding notes on behalf
of the outstanding notes' beneficial owners to tender their outstanding notes
as if they were holders. To effect a tender of outstanding Notes, DTC
participants should either:
o complete and sign the letter of transmittal, or a manually signed
facsimile thereof, have the signature guaranteed if required by the
instructions, and mail or deliver the letter of transmittal, or the
manually signed facsimile, to the exchange agent pursuant to the
procedure set forth in "Procedures for Tendering;" or
o transmit their acceptance to DTC through the DTC automated tender offer
program for which the transaction will be eligible and follow the
procedure for book-entry transfer set forth in "--Book-Entry Transfer."
By executing the letter of transmittal or an agent's message, each holder
will make to Tritel PCS the representations set forth above in the third
paragraph under the heading "--Purpose and Effect of the Exchange Offer."
Each holder's tender, and Tritel PCS's acceptance, will constitute
agreement between such holder and Tritel PCS in accordance with the terms, and
subject to the conditions, set forth herein and in the letter of transmittal or
agent's message.
THE METHOD OF DELIVERY OF OUTSTANDING NOTES, THE LETTER OF TRANSMITTAL OR
AGENT'S MESSAGE, AND ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT
THE HOLDER'S ELECTION AND SOLE RISK. AS AN ALTERNATIVE TO MAIL DELIVERY,
HOLDERS MAY WISH TO CONSIDER OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL CASES,
HOLDERS SHOULD ALLOW SUFFICIENT TIME TO ASSURE DELIVERY TO THE EXCHANGE AGENT
BEFORE THE EXPIRATION DATE. NO LETTER OF TRANSMITTAL OR OUTSTANDING NOTES
SHOULD BE SENT TO TRITEL PCS. HOLDERS MAY REQUEST THEIR RESPECTIVE BROKERS,
DEALERS, COMMERCIAL BANKS, TRUST COMPANIES OR NOMINEES TO EFFECT THE ABOVE
TRANSACTIONS FOR THEM.
Any beneficial owner whose outstanding notes are registered in the name of
a broker, dealer, commercial bank, trust company or other nominee and who
wishes to tender should contact the registered holder promptly and instruct the
registered holder to tender on the beneficial owner's behalf. See "Instructions
to Registered Holder and/or Book-Entry Transfer Facility Participant from
Beneficial Owner" included with the letter of transmittal.
A member of the Medallion System must guarantee signatures on a letter of
transmittal or a notice of withdrawal, as the case may be, unless the
outstanding notes tendered pursuant thereto are tendered:
o by a registered holder who has not completed the box entitled "Special
Registration Instructions" or "Special Delivery Instructions" on the
letter of transmittal; or
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o for the account of a Medallion System member.
In the event that signatures on a letter of transmittal or a notice of
withdrawal, as the case may be, must be guaranteed, such guarantee must be by a
Medallion System member.
If a person other than the registered holder of any outstanding notes
listed therein signs the accompanying letter of transmittal, the outstanding
notes must be endorsed or accompanied by a properly completed bond power,
signed by the registered holder as his or name appears on the outstanding
notes, with the signature guaranteed by a Medallion System member.
If trustees, executors, administrators, guardians, attorneys-in-fact,
offices of corporations, or others acting in a fiduciary or representative
capacity sign the letter of transmittal or any outstanding notes or bond
powers, such persons should so indicate when signing, and they must submit
evidence satisfactory to Tritel PCS of their authority to so act, with the
letter of transmittal.
Tritel PCS will determine, in its sole discretion, all questions as to the
validity, form, eligibility, including time of receipt, and acceptance and
withdrawal of tendered outstanding notes. This determination will be final and
binding. We reserve the absolute right to reject any and all outstanding notes
not properly tendered, or any outstanding notes, Tritel PCS's acceptance of
which would, in the opinion of Tritel PCS's counsel, be unlawful. We also
reserve the right, in our sole discretion, to waive any defects, irregularities
or conditions of tender as to particular outstanding notes. Our interpretation
of the terms and conditions of the exchange offer, including the instructions
in the letter of transmittal, will be final and binding on all parties. Unless
waived, any defects or irregularities in connection with tenders of outstanding
notes must be cured within such time as we shall determine. Although we intend
to notify holders of defects or irregularities with respect to tenders of
outstanding notes, neither Tritel PCS, the exchange agent nor any other person
shall incur any liability for failure to give such notification. Tenders of
outstanding notes will not be deemed to have been made until such defects or
irregularities have been cured or waived. If the exchange agent receives any
outstanding notes that are not properly tendered, and as to which the defects
or irregularities have not been cured or waived, the exchange agent will return
them to the tendering holders, unless otherwise provided in the letter of
transmittal, as soon as practicable following the expiration date.
ACCEPTANCE OF OUTSTANDING NOTES FOR EXCHANGE; DELIVERY OF REGISTERED NOTES
For each outstanding note Tritel PCS accepts for exchange, the holder will
receive a registered note having a principal amount at maturity equal to that
of the surrendered outstanding note. For purposes of the exchange offer, Tritel
PCS shall be deemed to have accepted properly tendered outstanding notes for
exchange when, as and if Tritel PCS has given oral or written notice thereof to
the exchange agent.
In all cases, Tritel PCS will issue registered notes for outstanding notes
that are accepted for exchange pursuant to the exchange offer only after the
exchange agent's timely receipt of certificates for such outstanding notes, or
a timely book-entry confirmation of the outstanding notes into the exchange
agent's account at the book-entry transfer facility, plus a properly completed
and duly executed letter of transmittal or agent's message and all other
required documents. If Tritel PCS does not accept any tendered outstanding
notes for any reason set forth in the terms and conditions of the exchange
offer, we will return the unaccepted or non-exchanged outstanding notes without
expense to the tendering holder, or, in the case of outstanding notes tendered
by book-entry transfer into the exchange agent's account, the non-exchanged
outstanding notes will be credited to an account maintained with the book-entry
transfer facility, as promptly as practicable after the expiration date.
BOOK-ENTRY TRANSFER
The exchange agent will establish a new account or utilize an existing
account at DTC for the outstanding notes promptly after the date of this
prospectus, and any financial institution that is a participant in DTC and
whose name appears on a security position listing as the owner of outstanding
notes may make a book-entry tender of outstanding notes by causing DTC to
transfer such
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outstanding notes into the exchange agent's account in accordance with DTC's
procedures for such transfer. However, the exchange agent must receive, at its
address set forth below under the caption "Exchange Agent," on or prior to the
expiration date, or the holders must comply with the guaranteed delivery
procedures described below to submit, the letter of transmittal, or a manually
signed facsimile thereof, properly completed and validly executed, with any
required signature guarantees, or an agent's message, and any other required
documents. Document delivery to DTC in accordance with DTC's procedures does
not constitute delivery to the exchange agent.
The term "agent's message" means a message transmitted by DTC to, and
received by, the exchange agent, forming a part of a book-entry confirmation,
which states that DTC has received an express acknowledgment from the DTC
participant tendering the outstanding notes, stating:
o the aggregate principal amount of outstanding notes which have been
tendered by such participant;
o that such participant has received and agrees to be bound by the terms
of the letter of transmittal; and
o that Tritel PCS may enforce that agreement against the participant.
GUARANTEED DELIVERY PROCEDURES
Holders who wish to tender their outstanding notes and:
o whose outstanding notes are not immediately available;
o who cannot deliver their outstanding notes, the letter of transmittal or
any other required documents, to The Bank of New York, which is the
exchange agent; or
o who cannot complete the procedures for book-entry transfer, prior to the
expiration date,
may effect a tender if:
(1) the tender is made through a firm which is a member of a registered
national securities exchange or of the National Association of
Securities Dealers, Inc., or a commercial bank or trust company having
an office or correspondent in the United States;
(2) prior to the expiration date, the exchange agent receives from an
institution listed in clause (1) above a properly completed and duly
executed Notice of Guaranteed Delivery, by facsimile transmission, mail
or hand delivery, setting forth the name and address of the holder, the
certificate number(s) of the outstanding notes and the principal amount
of outstanding notes tendered, stating that the tender is being made
thereby and guaranteeing that, within five New York Stock Exchange
trading days after the expiration date, the letter of transmittal, or
facsimile thereof, or an agent's message, together with the
certificate(s) representing the outstanding notes, or a confirmation of
book-entry transfer of the notes into the exchange agent's account at
the book-entry transfer facility, and any other documents required by
the letter of transmittal, will be deposited by the institution with the
exchange agent; and
(3) the exchange agent receives, no later than five New York Stock Exchange
trading days after the expiration date, the certificate(s) representing
all tendered outstanding notes in proper form for transfer, or a
confirmation of book-entry transfer of such outstanding notes into the
exchange agent's account at the book-entry transfer facility, together
with a letter of transmittal, or facsimile thereof, properly completed
and duly executed, with any required signature guarantees, or an agent's
message, and all other documents required by the letter of transmittal.
Holders who wish to tender their outstanding notes according to the
guaranteed delivery procedures set forth above may request that the exchange
agent send them a Notice of Guaranteed Delivery.
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WITHDRAWAL OF TENDERS
Except as otherwise provided herein, tenders of outstanding notes may be
withdrawn at any time prior to 5:00 p.m., New York City time, on , 1999;
otherwise such tenders are irrevocable.
To withdraw a tender of outstanding notes in the exchange offer, the
exchange agent must receive a telegram, telex, letter or facsimile transmission
notice of withdrawal at its address set forth herein prior to 5:00 p.m., New
York City time, on the expiration date. Any such notice of withdrawal must:
o specify the name of the person having deposited the outstanding notes to
be withdrawn;
o identify the outstanding notes to be withdrawn, including the
certificate number(s) and principal amount of such outstanding notes,
or, in the case of outstanding notes transferred by book-entry transfer,
the name and number of the account at the book-entry transfer facility
to be credited;
o be signed by the holder in the same manner as the original signature on
the letter of transmittal by which the outstanding notes were tendered,
including any required signature guarantees, or be accompanied by
documents of transfer sufficient to have the trustee with respect to the
outstanding notes register the transfer of such outstanding notes into
the name of the person withdrawing the tender; and
o specify the name in which to register the outstanding notes, if
different from that of the depositor.
Tritel PCS will determine all questions as to the validity, form and
eligibility, including time of receipt, of the notices. This determination
shall be final and binding on all parties. Any outstanding notes so withdrawn
will be deemed not to have been validly tendered for purposes of the exchange
offer and no registered notes will be issued with respect thereto unless the
outstanding notes so withdrawn are validly retendered. Tritel PCS will return
to the holder any outstanding notes which have been tendered but which are not
accepted for exchange without expense to the holder, as soon as practicable
after withdrawal, rejection of tender, or termination of the exchange offer.
Holders may retender properly withdrawn outstanding notes by following one of
the procedures described above under "--Procedures for Tendering" at any time
prior to the expiration date.
CONDITIONS
Notwithstanding any other term of the exchange offer, we shall not be
required to accept for exchange, or offer registered notes for, any outstanding
notes, and may terminate or amend the exchange offer as provided herein before
the acceptance of the outstanding notes, if:
(1) any action or proceeding is instituted or threatened in any court or by
or before any governmental agency with respect to the exchange offer
which, in our judgment, might impair materially our ability to proceed
with the exchange offer, or any material adverse development has
occurred in any existing action or proceeding with respect to Tritel PCS
or any of its subsidiaries; or
(2) any law, statute, rule, regulation or interpretation by the SEC staff
is proposed, adopted or enacted, which, in our judgment, might impair
materially our ability to proceed with the exchange offer, or impair
materially our contemplated benefits from the exchange offer; or
(3) any governmental approval has not been obtained, which approval we
shall, in our discretion, deem necessary for the consummation of the
exchange offer as contemplated hereby.
If we determine in our discretion that any of the conditions are not
satisfied, we may:
o refuse to accept any outstanding notes and return all tendered
outstanding notes to the tendering holders;
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o extend the exchange offer and retain all outstanding notes tendered
prior to the expiration of the exchange offer, subject, however, to the
holders' rights to withdraw the outstanding notes; or
o waive the unsatisfied conditions and accept all properly tendered
outstanding notes which have not been withdrawn.
We shall keep the exchange offer open for at least 30 days, or longer if
applicable law so requires, including, in connection with any material
modification or waiver of the terms or conditions of the exchange offer that
requires such extension under applicable law, after the date we mail notice of
the exchange offer to outstanding noteholders.
EXCHANGE AGENT
The Bank of New York has been appointed as the exchange agent for this
exchange offer. Questions and requests for assistance, requests for additional
copies of this prospectus or of the letter of transmittal, and requests for
notice of guaranteed delivery should be directed to the exchange agent,
addressed as follows:
The Bank of New York
101 Barclay Street, 21W
New York, New York 10286
Attn: Corporate Trust Administration
By Facsimile:
(212) 815-5915
DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A
VALID DELIVERY.
FEES AND EXPENSES
Tritel PCS will bear the expenses of soliciting tenders. The principal
solicitation is being made by mail; however, additional solicitation may be
made by telegraph, telecopy, telephone or in person by officers and regular
employees of Tritel PCS and its affiliates or its agents.
Tritel PCS has not retained any dealer-manager in connection with the
exchange offer and will not make any payments to brokers, dealers, or others
soliciting acceptances of the exchange offer. Tritel PCS, however, will pay the
exchange agent reasonable and customary fees for its services and will
reimburse it for its reasonable out-of pocket expenses in connection with the
exchange offer.
Tritel PCS will pay the cash expenses incurred in connection with the
exchange offer. Such expenses include the exchange agent's and the trustee's
fees and expenses, accounting and legal fees, and printing costs, among others.
ACCOUNTING TREATMENT
The registered notes will be recorded at the same carrying amount as the
outstanding notes, which is discounted face value, as reflected in Tritel PCS's
accounting records on the date of exchange.
Accordingly, Tritel PCS will not recognize any gain or loss for accounting
purposes. The exchange offer expenses will be expensed over the term of the
registered notes.
CONSEQUENCES OF FAILURE TO EXCHANGE
The outstanding notes that are not exchanged for registered notes pursuant
to the exchange offer will remain restricted securities. Accordingly, such
outstanding notes may be resold only:
o to Tritel PCS, upon redemption thereof or otherwise;
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o so long as the outstanding notes are eligible for resale pursuant to
Rule 144A, to a person inside the United States whom the seller
reasonably believes is a qualified institutional buyer within the
meaning of Rule 144A under the Securities Act in a transaction meeting
the requirements of Rule 144A, in accordance with Rule 144 under the
Securities Act, or pursuant to another exemption from the registration
requirements of the Securities Act, and based upon an opinion of counsel
reasonably acceptable to us;
o outside the United States to a foreign person in a transaction meeting
the requirements of Regulation S under the Securities Act; or
o pursuant to an effective registration statement under the Securities
Act.
Any resale of outstanding notes must comply with any applicable securities
laws of any state of the United States.
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DESCRIPTION OF THE NOTES
You can find the definitions of certain terms used in this description
below under the subheading "--Certain Definitions." Certain other capitalized
terms are defined in the indenture governing the notes. In this section,
"Tritel PCS" means Tritel PCS, Inc. and does not include its subsidiaries.
The registered notes have the same form and terms as the outstanding
notes, which they replace, with two exceptions. First, because the issuance of
the registered notes has been registered under the Securities Act, the
registered notes will not bear legends restricting their transfer. Second, the
holders of registered notes will not be entitled to rights under the
registration rights agreement, since the primary provision of that agreement
will terminate when the exchange offer is consummated. A copy of the indenture,
dated May 11, 1999 between Tritel PCS, the parent and subsidiary guarantors and
The Bank of New York, as trustee, has been filed as an exhibit to the exchange
offer registration statement of which this prospectus forms a part. The terms
of the notes include those stated in the indenture and those made part of the
indenture by reference to the Trust Indenture Act of 1939.
The following description is a summary of the material provisions of the
indenture and the Registration Rights Agreement. It does not restate those
agreements in their entirety. We urge you to read the indenture and the
Registration Rights Agreement because they, and not this description, define
your rights as holders of the notes. Copies of the indenture and the
Registration Rights Agreement are available as set forth below under "--
Additional Information." Certain defined terms used in this description but not
defined below under "-- Certain Definitions" have the meanings assigned to them
in the indenture.
BRIEF DESCRIPTION OF THE NOTES AND THE GUARANTEES
THE NOTES
The notes:
o are senior subordinated obligations of Tritel PCS;
o are subordinated in right of payment with all existing and future Senior
Debt of Tritel PCS;
o are senior in right of payment to any future Subordinated Indebtedness
of Tritel PCS; and
o are unconditionally guaranteed by the Guarantors.
THE GUARANTEES
The notes are guaranteed by:
o our parent company, Tritel, Inc., by means of the Parent Guarantee; and
o all of our Subsidiaries, except our License Subsidiaries, by means of
the Subsidiary Guarantees.
Each Guarantee of the notes:
o is a general unsecured obligation of the Guarantor;
o is subordinated in right of payment to all existing and future Senior
Debt of the Guarantor; and
o is pari passu in right of payment with any future senior subordinated
Indebtedness of the Guarantor.
Our License Subsidiaries will not guarantee the notes. In the event of a
bankruptcy, liquidation or reorganization of any of these non-guarantor
Subsidiaries, they will pay the holders of their debts and their trade
creditors before they will be able to distribute any of their assets to us.
Tritel, Inc., Tritel PCS and the Subsidiary Guarantors held 77.4% of Tritel,
Inc.'s consolidated assets as of June 30, 1999.
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See footnote 17 to our Consolidated Financial Statements included at the back
of this prospectus for more detail about the division of our consolidated
revenues and assets between our guarantor and non-guarantor Subsidiaries.
As of June 30, 1999, Tritel PCS had $200.0 million of Senior Debt
outstanding and non-guarantor Subsidiaries had $41.4 million on a book value
basis of FCC debt outstanding.
As of the date of the indenture, all of Tritel PCS's subsidiaries will be
"Restricted Subsidiaries." However, under the circumstances described below
under the subheading "-- Certain Covenants -- Unrestricted Subsidiaries,"
Tritel PCS will be permitted to designate certain of its subsidiaries as
"Unrestricted Subsidiaries." Unrestricted Subsidiaries will not be subject to
many of the restrictive covenants in the indenture.
PRINCIPAL, MATURITY AND INTEREST
The notes will mature on May 15, 2009, will be limited to $372.0 million
aggregate principal amount at maturity. The notes will be issued at a
substantial discount from the aggregate stated principal amount thereof. For
federal income tax purposes, significant amounts of original issue discount,
taxable as ordinary income, will be recognized by holders of the notes annually
as long as they hold the notes, including in advance of the receipt of cash
interest payments thereon. See "Certain Federal Income Tax Considerations."
No interest will be paid or accrued on the notes prior to May 15, 2004.
Thereafter, each note will bear interest at the rate set forth on the cover
page hereof from May 15, 2004, or from the most recent interest payment date to
which interest has been paid or duly provided for, payable semiannually on May
15 and November 15 in each year, commencing May 15, 2004, until the principal
thereof is paid or duly provided for, to the person in whose name the Note, or
any predecessor note, is registered at the close of business on the May 1 or
November 1 next preceding such interest payment date. Interest will be computed
on the basis of a 360-day year comprised of twelve 30-day months.
The principal of and premium, if any, and interest on the notes will be
payable, and the notes will be exchangeable and transferable, at the office or
agency of Tritel PCS in The City of New York maintained for such purposes,
which initially will be the office of the Trustee located at 101 Barclay
Street, New York, NY 10286, Attn: Corporate Trust Administration Department.
The notes will be issued only in registered form without coupons and only in
denominations of $1,000 and any integral multiple thereof. No service charge
will be made for any registration of transfer or exchange or redemption of
notes, but Tritel PCS may require payment in certain circumstances of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection therewith.
Any notes that remain outstanding after the consummation of the exchange
offer and exchange notes issued in connection with the exchange offer will be
treated as a single class of securities under the Indenture.
The notes will not be entitled to the benefit of any sinking fund.
METHODS OF RECEIVING PAYMENTS ON THE NOTES
If a Holder has given wire transfer instructions to Tritel PCS, Tritel PCS
will pay all principal, interest and premium and Liquidated Damages, if any, on
that Holder's notes in accordance with those instructions. All other payments
on Notes will be made at the office or agency of the Paying Agent and Registrar
within the City and State of New York unless Tritel PCS elects to make interest
payments by check mailed to the Holders at their addresses set forth in the
register of Holders.
PAYING AGENT AND REGISTRAR FOR THE NOTES
The Trustee will initially act as Paying Agent and Registrar. Tritel PCS
may change the Paying Agent or Registrar without prior notice to the Holders,
and Tritel PCS or any of its Restricted Subsidiaries may act as Paying Agent or
Registrar.
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TRANSFER AND EXCHANGE
A Holder may transfer or exchange notes in accordance with the indenture.
The Registrar and the Trustee may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and Tritel PCS may
require a Holder to pay any taxes and fees required by law or permitted by the
indenture. Tritel PCS is not required to transfer or exchange any note selected
for redemption. Also, Tritel PCS is not required to transfer or exchange any
note for a period of 15 days before a selection of notes to be redeemed.
The registered Holder of a note will be treated as the owner of it for all
purposes.
SUBSIDIARY GUARANTEES
The Guarantors will jointly and severally guarantee Tritel PCS's
obligations under the notes. Each Guarantee will be subordinated to the prior
payment in full of all Senior Debt of that Guarantor. The obligations of each
Subsidiary Guarantor under its Subsidiary Guarantee will be limited as
necessary to prevent that Subsidiary Guarantee from constituting a fraudulent
conveyance under applicable law.
Except as provided below, a Guarantor may not sell or otherwise dispose of
all or substantially all of its assets to, or consolidate with or merge with or
into, whether or not such Guarantor is the surviving Person, another Person,
other than Tritel PCS or another Guarantor, unless:
(1) immediately after giving effect to that transaction, no Default or Event of
Default exists; and
(2) either:
(a) the Person acquiring the property in any such sale or disposition or
the Person formed by or surviving any such consolidation or merger
assumes all the obligations of that Guarantor under the Indenture, its
Guarantee and the Registration Rights Agreement pursuant to a
supplemental indenture and appropriate collateral documents
satisfactory to the Trustee; or
(b) the Net Proceeds of any such sale or other disposition of a Subsidiary
Guarantor are applied in accordance with the "Asset Sales" provisions
of the indenture.
A Guarantor will be released from its Guarantee:
(1) in connection with any sale or other disposition of all or substantially
all of the assets of that Guarantor, including by way of merger or
consolidation, to a Person that is not, either before or after giving
effect to such transaction, a Subsidiary of Tritel PCS, if the Guarantor
applies the Net Proceeds of that sale or other disposition in accordance
with the "Asset Sales" provisions of the indenture; or
(2) in connection with any sale of all of the Capital Stock of a Guarantor to a
Person that is not, either before or after giving effect to such
transaction, a Subsidiary of Tritel PCS, if Tritel PCS applies the Net
Proceeds of that sale in accordance with the "Asset Sales" provisions of
the indenture.
See "-- Repurchase at the Option of Holders -- Asset Sales."
A Subsidiary Guarantor will also be automatically released from its
Guarantee if the Subsidiary Guarantor is designated as an Unrestricted
Subsidiary.
The indenture will provide that, in the event the Banks release or
terminate a guarantee by Tritel, Inc. or a Subsidiary Guarantor of all the
obligations under the Bank Credit Agreement, except a release or termination by
or as a result of payment in full of all Obligations under the Bank Credit
Agreement, Tritel, Inc. or such Subsidiary Guarantor, as the case may be, will
be automatically and unconditionally released and discharged from all of its
obligations under its Guarantee.
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SUBORDINATION
The payment of principal, interest and premium and Liquidated Damages, if
any, on the notes will be subordinated to the prior payment in full of all
Senior Debt of Tritel PCS, including Senior Debt incurred after the date of the
indenture.
The holders of Senior Debt will be entitled to receive payment in full of
all Obligations due in respect of Senior Debt, including interest after the
commencement of any bankruptcy proceeding at the rate specified in the
applicable Senior Debt, before the Holders of notes will be entitled to receive
any payment with respect to the notes, except that Holders of notes may receive
and retain Permitted Junior Securities and payments made from the trust
described under "-- Legal Defeasance and Covenant Defeasance," in the event of
any distribution to creditors of Tritel PCS:
(1) in a liquidation or dissolution of Tritel PCS;
(2) in a bankruptcy, reorganization, insolvency, receivership or similar
proceeding relating to Tritel PCS or its property;
(3) in an assignment for the benefit of creditors; or
(4) in any marshaling of Tritel PCS's assets and liabilities.
Tritel PCS also may not make any payment in respect of the notes, except
in Permitted Junior Securities or from the trust described under "-- Legal
Defeasance and Covenant Defeasance", if:
(1) a payment default on Designated Senior Debt occurs and is continuing beyond
any applicable grace period; or
(2) any other default occurs and is continuing on any series of Designated
Senior Debt that permits holders of that series of Designated Senior Debt
to accelerate its maturity and the Trustee receives a notice of such
default (a "Payment Blockage Notice") from Tritel PCS or the holders of
any Designated Senior Debt.
Payments on the notes may and will be resumed:
(1) in the case of a payment default, upon the date on which such default is
cured or waived; and
(2) in case of a nonpayment default, the earlier of the date on which such
nonpayment default is cured or waived or 179 days after the date on which
the applicable Payment Blockage Notice is received, unless the maturity of
any Designated Senior Debt has been accelerated.
No new Payment Blockage Notice may be delivered unless and until:
(1) 360 days have elapsed since the delivery of the immediately prior Payment
Blockage Notice; and
(2) all scheduled payments of principal, interest and premium and Liquidated
Damages, if any, on the notes that have come due have been paid in full in
cash.
No nonpayment default that existed or was continuing on the date of
delivery of any Payment Blockage Notice to the Trustee will be, or be made, the
basis for a subsequent Payment Blockage Notice unless such default will have
been cured or waived for a period of not less than 90 days.
If the Trustee or any Holder of the notes receives a payment in respect of
the notes, except in Permitted Junior Securities or from the trust described
under "-- Legal Defeasance and Covenant Defeasance," when:
(1) the payment is prohibited by these subordination provisions; and
(2) the Trustee or the Holder has actual knowledge that the payment is
prohibited;
the Trustee or the Holder, as the case may be, will hold the payment in trust
for the benefit of the holders of Senior Debt. Upon the proper written request
of the holders of Senior Debt, the Trustee or the Holder, as the case may be,
will deliver the amounts in trust to the holders of Senior Debt or their proper
representative.
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Tritel PCS must promptly notify holders of Senior Debt if payment of the
notes is accelerated because of an Event of Default.
As a result of the subordination provisions described above, in the event
of a bankruptcy, liquidation or reorganization of Tritel PCS, Holders of notes
may recover less ratably than creditors of Tritel PCS who are holders of Senior
Debt.
"Designated Senior Debt" means:
(1) any Indebtedness outstanding under the Bank Credit Agreement; and
(2) any other Senior Debt permitted under the indenture the principal amount of
which is $25.0 million or more and that has been designated by Tritel PCS
as "Designated Senior Debt" by the board of directors of Tritel PCS at the
time of its initial issuance in a resolution delivered to the Trustee.
"Designated Senior Indebtedness" of a Subsidiary Guarantor will have a
correlative meaning.
"Permitted Junior Securities" means:
(1) Equity Interests in Tritel PCS or any Guarantor; or
(2) debt securities that are subordinated to all Senior Debt, and to any debt
securities issued in exchange for Senior Debt, to substantially the same
extent as, or to a greater extent than, the notes and the Subsidiary
Guarantees are subordinated to Senior Debt under the indenture.
"Senior Debt" means:
(1) all Indebtedness of Tritel PCS or any Guarantor outstanding under the Bank
Credit Agreement and all Hedging Obligations with respect thereto;
(2) any other Indebtedness of Tritel PCS or any Guarantor permitted to be
incurred under the terms of the indenture, unless the instrument under
which such Indebtedness is incurred expressly provides that it is on a
parity with or subordinated in right of payment to the notes or any
Subsidiary Guarantee; and
(3) all Obligations with respect to the items listed in the preceding clauses
(1) and (2).
Notwithstanding anything to the contrary in clauses (1), (2) and (3)
above, Senior Debt will not include:
(1) any liability for federal, state, local or other taxes owed or owing by
Tritel PCS;
(2) any Indebtedness of Tritel PCS to any of its Subsidiaries or other
Affiliates;
(3) any trade payables; or
(4) the portion of any Indebtedness that is incurred in violation of the
indenture.
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REDEMPTION
The notes will be redeemable at the election of Tritel PCS, as a whole or
from time to time in part, at any time on or after May 15, 2004, on not less
than 30 nor more than 60 days' prior notice at the redemption prices, expressed
as percentages of principal amount at maturity, set forth below, together with
accrued interest and Liquidated Damages, if any, to the redemption date, if
redeemed during the 12-month period beginning on May 15 of the years indicated
below, subject to the right of holders of record on the relevant record date to
receive interest due on the related interest payment date:
<TABLE>
<CAPTION>
REDEMPTION
YEAR PRICE
- ----------------------- -------------
<S> <C>
2004 ................ 106.375%
2005 ................ 104.250
2006 ................ 102.125
</TABLE>
and thereafter at 100% of the principal amount at maturity, together with
accrued interest and Liquidated Damages, if any, to the redemption date.
In addition, at any time prior to May 15, 2002, Tritel PCS may redeem up
to 35% of the aggregate principal amount at maturity of the notes with proceeds
of one or more Equity Offerings at a redemption price of 112.75% of the
Accreted Value thereof as of the Semi-Annual Accrual Date next preceding the
date of purchase, plus the Accreted Increment as of such date of purchase;
provided that:
(1) at least 65% of the aggregate principal amount at maturity of the notes
remains outstanding immediately after the occurrence of such redemption,
excluding notes held by Tritel PCS and its Restricted Subsidiaries; and
(2) the redemption must occur within 60 days following the date of the closing
of such Equity Offering.
REPURCHASE AT THE OPTION OF HOLDERS
CHANGE OF CONTROL
If a Change of Control occurs, each Holder of notes will have the right to
require Tritel PCS to repurchase all or any part, equal to $1,000 or an
integral multiple thereof, of that Holder's notes pursuant to an offer on the
terms set forth in the indenture ("Change of Control Offer"). In the Change of
Control Offer, Tritel PCS will offer a payment ("Change of Control Payment") in
cash equal to 101% of the Accreted Value as of the Semi-Annual Accrual Date
next preceding the date of purchase, plus the Accreted Increment as of such
date of purchase, if such redemption occurs prior to May 15, 2004, or 101% of
the Accreted Value as of the date of purchase, together with accrued and unpaid
interest and Liquidated Damages, if any, if such redemption date occurs on or
after May 15, 2004. Within ten days following any Change of Control, Tritel PCS
will mail a notice to each Holder describing the transaction or transactions
that constitute the Change of Control and offering to repurchase notes on the
date ("Change of Control Payment Date") specified in such notice, which date
shall be no earlier than 30 days and no later than 60 days from the date such
notice is mailed, pursuant to the procedures required by the indenture and
described in such notice. Tritel PCS will comply with the requirements of Rule
14e-1 under the Exchange Act and any other securities laws and regulations
thereunder to the extent such laws and regulations are applicable in connection
with the repurchase of the notes as a result of a Change of Control. To the
extent that the provisions of any securities laws or regulations conflict with
the Change of Control provisions of the indenture, Tritel PCS will comply with
the applicable securities laws and regulations and will not be deemed to have
breached its obligations under the Change of Control provisions of the
Indenture by virtue of such conflict.
In the event that at the time of any Change of Control the terms of the
Bank Credit Agreement restrict or prohibit the repurchase of notes pursuant to
this covenant, then prior to the mailing of the
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notice to holders of notes provided for in the prior paragraph but in any event
within 30 days following any Change of Control, Tritel PCS convenants that it
will either
(1) repay in full all amounts outstanding under the Bank Credit Agreement or
offer to repay in full all amounts outstanding under the Bank Credit
Agreement and repay the amounts due to each Bank who has accepted such
offer or
(2) obtain the requisite consent under the agreements governing the Bank
Credit Agreement to permit the repurchase of the notes as provided for in
the prior paragraph.
On the Change of Control Payment Date, Tritel PCS will, to the extent
lawful:
(1) accept for payment all notes or portions thereof properly tendered pursuant
to the Change of Control Offer;
(2) deposit with the Paying Agent an amount equal to the Change of Control
Payment in respect of all notes or portions thereof so tendered; and
(3) deliver or cause to be delivered to the Trustee the notes so accepted
together with an Officers' Certificate stating the aggregate principal
amount at maturity of notes or portions thereof being purchased by Tritel
PCS.
The Paying Agent will promptly mail to each Holder of notes so tendered
the Change of Control Payment for such notes, and the Trustee will promptly
authenticate and mail, or cause to be transferred by book entry, to each Holder
a new note equal in principal amount to any unpurchased portion of the notes
surrendered, if any; provided that each such new note will be in a principal
amount of $1,000 or an integral multiple thereof.
The provisions described above that require Tritel PCS to make a Change of
Control Offer following a Change of Control will be applicable regardless of
whether any other provisions of the indenture are applicable. Except as
described above with respect to a Change of Control, the indenture does not
contain provisions that permit the Holders of the notes to require that Tritel
PCS repurchase or redeem the notes in the event of a takeover, recapitalization
or similar transaction.
Tritel PCS will not be required to make a Change of Control Offer upon a
Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set
forth in the indenture applicable to a Change of Control Offer made by Tritel
PCS and purchases all notes validly tendered and not withdrawn under such
Change of Control Offer.
The definition of Change of Control includes a phrase relating to the
direct or indirect sale, lease, transfer, conveyance or other disposition of
"all or substantially all" of the properties or assets of Tritel PCS and its
Restricted Subsidiaries taken as a whole. Although there is a limited body of
case law interpreting the phrase "substantially all," there is no precise
established definition of the phrase under applicable law. Accordingly, the
ability of a Holder of notes to require Tritel PCS to repurchase such notes as
a result of a sale, lease, transfer, conveyance or other disposition of less
than all of the assets of Tritel PCS and its Restricted Subsidiaries taken as a
whole to another Person or group may be uncertain.
ASSET SALES
Tritel PCS will not, and will not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless:
(1) Tritel PCS or the Restricted Subsidiary, as the case may be, receives
consideration at the time of such Asset Sale at least equal to the fair
market value of the assets or Equity Interests issued or sold or otherwise
disposed of;
(2) such fair market value is determined by Tritel PCS's Board of Directors and
evidenced by a resolution of the Board of Directors set forth in an
Officers' Certificate delivered to the Trustee; and
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(3) at least 75% of the consideration therefor received by Tritel PCS or such
Restricted Subsidiary is in the form of cash or Cash Equivalents, or
like-kind property in a like-kind exchange pursuant to Section 1031 of
the Internal Revenue Code. For purposes of this provision, each of the
following shall be deemed to be cash:
(a) any liabilities, as shown on Tritel PCS's or such Restricted
Subsidiary's most recent balance sheet, of Tritel PCS or any Restricted
Subsidiary, other than contingent liabilities and liabilities that are
by their terms subordinated to the notes, that are assumed by the
transferee of any such assets pursuant to a customary novation
agreement that releases Tritel PCS or such Restricted Subsidiary from
further liability; and
(b) any securities, notes or other obligations received by Tritel PCS or
any such Restricted Subsidiary from such transferee that are
contemporaneously, subject to ordinary settlement periods, converted by
Tritel PCS or such Restricted Subsidiary into cash, to the extent of
the cash received in that conversion.
Within 360 days after the receipt of any Net Proceeds from an Asset Sale,
Tritel PCS may apply such Net Proceeds at its option:
(1) to permanently repay or prepay any then outstanding Indebtedness under the
Bank Credit Agreement, other senior Indebtedness of Tritel PCS or
Indebtedness of any Restricted Subsidiary; or
(2) to invest in properties or assets that replace the properties and assets
that are the subject of such Asset Sale or in properties or assets that
will be used in the business of Tritel PCS or any Restricted Subsidiary,
or enter into a legally binding agreement to do so.
If any such legally binding agreement to invest such Net Proceeds is
terminated, then Tritel PCS may, within 90 days of such termination or within
12 months after such Asset Sale, whichever is later, apply or invest such Net
Proceeds, or enter into another legally binding agreement to do so, which
closes within 16 months of such Asset Sale, as provided in clause (1) or (2),
without regard to the parenthetical contained in clause (2), above. Pending the
final application of any such Net Proceeds, Tritel PCS may temporarily reduce
revolving credit borrowings or otherwise invest such Net Proceeds in any manner
that is not prohibited by the indenture.
Any Net Proceeds from Asset Sales that are not applied or invested as
provided in the preceding paragraph will constitute "Excess Proceeds." When the
aggregate amount of Excess Proceeds exceeds $15.0 million, Tritel PCS will make
an offer ("Asset Sale Offer") to all Holders of notes and all holders of other
indebtedness that is pari passu with the Notes containing provisions similar to
those set forth in the indenture with respect to offers to purchase or redeem
with the proceeds of sales of assets to purchase the maximum principal amount
of Notes and such other pari passu Indebtedness that may be purchased out of
the Excess Proceeds. The offer price in any Asset Sale Offer will be equal to
100% of Accreted Value plus accrued and unpaid interest and Liquidated Damages,
if any, to the date of purchase, and will be payable in cash. If any Excess
Proceeds remain after consummation of an Asset Sale Offer, Tritel PCS may use
such Excess Proceeds for any purpose not otherwise prohibited by the Indenture.
If the Accreted Value of the notes and such other pari passu Indebtedness
tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, the
Trustee shall select the notes and such other pari passu Indebtedness to be
purchased on a pro rata basis based on the Accreted Value of the notes and such
other pari passu Indebtedness tendered. Upon completion of each Asset Sale
Offer, the amount of Excess Proceeds shall be reset at zero.
Tritel PCS will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with each
repurchase of notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with the Asset Sales
provisions of the indenture, Tritel PCS will comply with the applicable
securities laws and regulations and will not be deemed to have breached its
obligations under the Asset Sale provisions of the indenture by virtue of such
conflict.
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The agreements governing Tritel PCS's other Indebtedness contain
prohibitions of certain events, including events that would constitute a Change
of Control or an Asset Sale. In addition, the exercise by the Holders of notes
of their right to require Tritel PCS to repurchase the notes upon a Change of
Control or an Asset Sale could cause a default under these other agreements,
even if the Change of Control or Asset Sale itself does not, due to the
financial effect of such repurchases on Tritel PCS. Finally, Tritel PCS's
ability to pay cash to the Holders of notes upon a repurchase may be limited by
Tritel PCS's then existing financial resources.
SELECTION AND NOTICE
If less than all of the notes are to be redeemed at any time, the Trustee
will select notes for redemption as follows:
(1) if the notes are listed, in compliance with the requirements of the
principal national securities exchange on which the notes are listed; or
(2) if the notes are not so listed, on a pro rata basis, by lot or by such
method as the Trustee shall deem fair and appropriate.
No notes of $1,000 or less shall be redeemed in part. Notices of
redemption shall be mailed by first class mail at least 30 but not more than 60
days before the redemption date to each Holder of notes to be redeemed at its
registered address. Notices of redemption may not be conditional.
If any note is to be redeemed in part only, the notice of redemption that
relates to that note shall state the portion of the principal amount thereof to
be redeemed. A new note in principal amount equal to the unredeemed portion of
the original note will be issued in the name of the Holder thereof upon
cancellation of the original note. notes called for redemption become due on
the date fixed for redemption. On and after the redemption date, interest
ceases to accrue on notes or portions of them called for redemption.
CERTAIN COVENANTS
RESTRICTED PAYMENTS
Tritel PCS will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, take any of the following actions on
or prior to December 31, 2002:
(a) declare or pay any dividend on, or make any distribution to holders of,
any shares of the Capital Stock of Tritel PCS or any Restricted
Subsidiary, other than:
(1) dividends or distributions payable solely in Equity Interests, other
than Disqualified Stock; or
(2) dividends or distributions by a Restricted Subsidiary payable to
Tritel PCS or another Restricted Subsidiary;
(b) purchase, redeem or otherwise acquire or retire for value including,
without limitation, in connection with any merger or consolidation
involving Tritel PCS, any Equity Interests of Tritel PCS or any
Affiliate of Tritel PCS, other than any Restricted Subsidiary of Tritel
PCS;
(c) make any payment on or with respect to, or purchase, redeem, defease or
otherwise acquire or retire for value any Subordinated Indebtedness,
except a payment of interest or principal at the Stated Maturity
thereof; or
(d) make any Restricted Investment.
All such payments and other actions set forth in and not excluded from clauses
(a) through (d) above are collectively referred to as "Restricted Payments."
At any time after December 31, 2002, Tritel PCS will not, and will not
permit any Restricted Subsidiary to, directly or indirectly, make any
Restricted Payment unless at the time of, and immediately after giving effect
to, the proposed Restricted Payment:
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(1) no Default or Event of Default shall have occurred and be continuing or
would occur as a consequence thereof;
(2) Tritel PCS would, at the time of such Restricted Payment and after giving
pro forma effect thereto as if such Restricted Payment had been made at
the beginning of the applicable four-quarter period, have been permitted
to incur at least $1.00 of additional Indebtedness, other than Permitted
Debt, pursuant to the first paragraph of the covenant described below
under the caption "-- Incurrence of Indebtedness and Issuance of Preferred
Stock;" and
(3) immediately after giving effect to such Restricted Payment, the aggregate
amount of all Restricted Payments declared or made on or after the Issue
Date would not exceed an amount equal to the sum of:
(a) (A) Consolidated EBITDA accrued during the period, treated as one
accounting period, from January 1, 2003 to the end of Tritel PCS's most
recently ended fiscal quarter for which internal financial statements
are available at the time of such Restricted Payment (the "Computation
Period") less (B) 1.5 times Consolidated Interest Expense accrued
during the Computation Period; plus
(b) the aggregate Net Proceeds received by Tritel PCS either (x) as capital
contributions to Tritel PCS after the Issue Date or (y) from the issue
or sale, other than to a Subsidiary of Tritel PCS, of its Equity
Interests, other than Disqualified Stock, on or after the Issue Date,
excluding proceeds of any Equity Offering that are used to redeem notes
as discussed above under "-- Redemption"; plus
(c) the aggregate Net Proceeds received by Tritel PCS or any Restricted
Subsidiary from the sale, disposition or repayment, other than to
Tritel PCS or a Restricted Subsidiary, of any Investment made after the
Issue Date and constituting a Restricted Payment in an amount equal to
the lesser of (x) the return of capital with respect to such Investment
and (y) the initial amount of such Investment, in either case, less the
cost of disposition of such Investment; plus
(d) the aggregate Net Proceeds received by Tritel PCS from the issuance,
other than to a Subsidiary of Tritel PCS, on or after the Issue Date of
its Equity Interests, other than Disqualified Stock, upon the
conversion of, or exchange for, Indebtedness of Tritel PCS.
For purposes of determining the amount expended for Restricted Payments,
property other than cash will be valued at its fair market value as determined
by the Board of Directors of Tritel PCS, whose good faith determination will be
conclusive.
Notwithstanding the foregoing and so long as no Default or Event of
Default, except with respect to clauses (1), (2), (3) and (4) of this
paragraph, has occurred and is continuing or would be caused thereby, the
preceding provisions will not prohibit, whether the relevant event occurs
before or after December 31, 2002:
(1) the payment of any dividend within 60 days after the date of declaration
thereof, if at said date of declaration such payment would have complied
with the provisions of the indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of
any Equity Interests of Tritel PCS in exchange for, or out of the net
proceeds of the substantially concurrent sale, other than to a Subsidiary
of Tritel PCS, of, Equity Interests of Tritel PCS, other than Disqualified
Stock;
(3) the purchase, redemption, defeasance or other acquisition or retirement for
value of any Subordinated Indebtedness in exchange for, or out of the Net
Proceeds of a substantially concurrent issuance and sale, other than to a
Subsidiary, of Equity Interests, other than Disqualified Stock, of Tritel
PCS;
(4) the purchase, redemption, defeasance or other acquisition or retirement for
value of Subordinated Indebtedness in exchange for, or out of the Net
Proceeds of a substantially
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concurrent issuance or sale, other than to a Restricted Subsidiary, of
Subordinated Indebtedness, so long as Tritel PCS or a Restricted Subsidiary
would be permitted to refinance such original Subordinated Indebtedness
with such new Subordinated Indebtedness pursuant to clause (11) of the
definition of "Permitted Debt" (see "-- Incurrence of Indebtedness and
Issuance of Preferred Stock");
(5) the repurchase of any Subordinated Indebtedness at a purchase price not
greater than 101% of the principal amount of such Subordinated
Indebtedness in the event of a change of control in accordance with
provisions similar to the "-- Repurchase at the Option of Holders --
Change of Control" covenant; so long as, prior to or simultaneously with
such repurchase, Tritel PCS has made the Change of Control Offer as
provided in such covenant with respect to the notes and has repurchased
all notes validly tendered for payment in connection with such Change of
Control Offer;
(6) the purchase, redemption, acquisition, cancellation or other retirement for
value of shares of Capital Stock of Tritel PCS, options on any such shares
or related stock appreciation rights or similar securities held by
officers or employees or former officers or employees, or their estates or
beneficiaries under their estates, or by any employee benefit plan, upon
death, disability, retirement or termination of employment or pursuant to
the terms of any employee benefit plan or any other agreement under which
such shares of stock or related rights were issued; provided that (A) the
aggregate cash consideration paid for such purchase, redemption,
acquisition, cancellation or other retirement of such shares of Capital
Stock after the Issue Date does not exceed $2 million in any fiscal year
and (B) any unused amount in any 12-month period may be carried forward to
one or more future periods;
(7) make payments to Tritel, Inc. pursuant to a tax sharing agreement so long
as such payments in the aggregate do not exceed the lesser of (A) the
aggregate amount of taxes that would be payable by Tritel PCS and its
Subsidiaries if they were filing on a separate return basis as a
consolidated entity and (B) the aggregate amount of taxes paid by Tritel,
Inc. and its consolidated subsidiaries;
(8) make payments to Tritel, Inc. to reimburse Tritel, Inc. for its
out-of-pocket operating and administrative expenses attributable to Tritel
PCS, provided this reimbursement may not exceed $1.0 million in any fiscal
year; and
(9) payments not otherwise permitted by clauses (1) through (8) in an amount
not to exceed $10 million.
The actions described in clauses (2), (3), (5), (6) and (9) of this paragraph
will be Restricted Payments that will be permitted to be taken in accordance
with this paragraph but will reduce the amount that would otherwise be
available for Restricted Payments under clause (3) of the first paragraph of
this covenant and the actions described in clauses (1), (4), (7) and (8) of
this paragraph will be Restricted Payments that will be permitted to be taken
in accordance with this paragraph and will not reduce the amount that would
otherwise be available for Restricted Payments under clause (3) of the first
paragraph of this covenant.
For the purpose of making any calculations under the indenture, (a) if a
Restricted Subsidiary is designated an Unrestricted Subsidiary, Tritel PCS will
be deemed to have made an Investment in amount equal to the fair market value
of the net assets of such Subsidiary at the time of such designation as
determined by the Board of Directors of Tritel PCS, whose good faith
determination will be conclusive, and (b) any property transferred to or from
an Unrestricted Subsidiary will be valued at fair market value at the time of
such transfer, as determined by the Board of Directors of Tritel PCS, whose
good faith determination will be conclusive.
If the aggregate amount of all Restricted Payments calculated under the
foregoing provision includes an Investment in an Unrestricted Subsidiary or
other Person that thereafter becomes a Restricted Subsidiary, the aggregate
amount of all Restricted Payments calculated under the foregoing provision will
be reduced by the lesser of (x) the net asset value of such Restricted
Subsidiary at the time it becomes a Restricted Subsidiary and (y) the initial
amount of such Investment.
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If an Investment resulted in the making of a Restricted Payment, the
aggregate amount of all Restricted Payments calculated under the foregoing
provision will be reduced by the amount of any net reduction in such
Investment, resulting from the payment of interest or dividends, loan
repayment, transfer of assets or otherwise, to the extent such net reduction is
not included in Tritel PCS's Consolidated Net Income, so long as the total
amount by which the aggregate amount of all Restricted Payments may be reduced
may not exceed the lesser of (x) the cash proceeds received by Tritel PCS and
its Restricted Subsidiaries in connection with such net reduction and (y) the
initial amount of such Investment.
INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK
Tritel PCS will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume,
guarantee or otherwise become directly or indirectly liable, contingently or
otherwise, with respect to (collectively, "incur") any Indebtedness, including
Acquired Debt, and Tritel PCS will not issue any Disqualified Stock and will
not permit any of its Restricted Subsidiaries to issue any shares of preferred
stock. However, Tritel PCS and its Subsidiary Guarantors may incur
Indebtedness, including Acquired Debt, or issue Disqualified Stock, if, after
giving pro forma effect to such incurrence, including the application of the
net proceeds therefrom,
(1) the Consolidated Leverage Ratio would be less than or equal to (A) 7.0 to
1.0, if the Indebtedness is to be incurred prior to May 15, 2004 or (B)
6.0 to 1.0, if the Indebtedness is to be incurred on or after May 15,
2004, or
(2) in the case of any incurrence of Indebtedness prior to May 15, 2004, Total
Consolidated Indebtedness would be equal to or less than 75% of Total
Invested Capital.
In making the foregoing calculation,
(A) pro forma effect shall be given to any Indebtedness to be incurred or
repaid on such date;
(B) pro forma effect shall be given to Asset Dispositions and Asset
Acquisitions that occur during the four fiscal quarters for which
financial statements of Tritel PCS are available immediately prior to
such Transaction Date (the "Reference Period") or thereafter and on or
prior to the Transaction Date as if they had occurred and such proceeds
had been applied on the first day of such Reference Period;
(C) pro forma effect shall be given to asset dispositions and asset
acquisitions, including giving pro forma effect to the application of
proceeds of any asset disposition, that have been made by any Person
that has become a Restricted Subsidiary or has been merged with or into
Tritel PCS or any Restricted Subsidiary during such Reference Period or
subsequent to such period and on or prior to the Transaction Date and
that would have constituted Asset Dispositions or Asset Acquisitions
had such transactions occurred when such Person was a Restricted
Subsidiary as if such asset dispositions or asset acquisitions were
Asset Dispositions or Asset Acquisitions that occurred on the first day
of such Reference Period, so long as to the extent that clause (B) or
(C) of this sentence requires that pro forma effect be given to an
Asset Acquisition or Asset Disposition, such pro forma calculation
shall be based upon the four full fiscal quarters immediately preceding
the Transaction Date of the Person, or division or line of business of
the Person, that is acquired or disposed for which financial
information is available; and
(D) the aggregate amount of Indebtedness outstanding as of the Transaction
Date will be deemed to include the total amount of funds outstanding
and/or available under any revolving credit facilities of Tritel PCS
or its Restricted Subsidiaries.
The first paragraph of this covenant will not prohibit the incurrence of
any and all of the following items of Indebtedness (collectively, "Permitted
Debt"):
(1) Indebtedness of Tritel PCS or any Restricted Subsidiary under the Bank
Credit Agreement in an aggregate principal amount at any one time
outstanding not to exceed $600.0 million, and any guarantees of such
Indebtedness by a Restricted Subsidiary;
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(2) Indebtedness of Tritel PCS or any Restricted Subsidiary outstanding on the
Issue Date, other than Indebtedness described under clause (1) above or
(15) below but including Indebtedness then owed to the FCC;
(3) Telecommunications Indebtedness;
(4) Indebtedness represented by the notes and any Subsidiary Guarantee;
(5) Subordinated Indebtedness owed by Tritel PCS to any Restricted Subsidiary
or Indebtedness owed by any Restricted Subsidiary to Tritel PCS or any
other Restricted Subsidiary; provided that, in each case, such
Indebtedness is held by Tritel PCS or such Restricted Subsidiary;
(6) Obligations of Tritel PCS or any Restricted Subsidiary entered into in the
ordinary course of business (A) pursuant to Hedging Obligations relating
to Indebtedness of Tritel PCS or a Restricted Subsidiary otherwise
permitted under the indenture that are entered into for the purpose of
protecting against fluctuations in interest rates in respect of such
Indebtedness and not for speculative purposes, or (B) pursuant to Currency
Agreements entered into by Tritel PCS or any of its Restricted
Subsidiaries in respect of its (x) assets or (y) obligations, as the case
may be, denominated in a foreign currency;
(7) Indebtedness of Tritel PCS or any Restricted Subsidiary consisting of
guarantees, indemnities or obligations in respect of purchase price
adjustments in connection with the acquisition or disposition of assets,
including, without limitation, shares of Capital Stock;
(8) Acquired Debt of a Person, other than Indebtedness incurred in connection
with, or in contemplation of, such Person becoming a Restricted Subsidiary
or the acquisition of assets from such Person, as the case may be,
provided that Tritel PCS on a pro forma basis could incur $1.00 of
additional Indebtedness, other than Permitted Debt, pursuant to the first
paragraph of the "Incurrence of Indebtedness and Issuance of Preferred
Stock" covenant;
(9) Guarantees by any Restricted Subsidiary made in accordance with the
provisions of the "Limitation on Issuances of Guarantees of Indebtedness
by Restricted Subsidiaries" covenant;
(10) Indebtedness of Tritel PCS not permitted by any other clause of this
definition, in an aggregate principal amount not to exceed $50 million at
any one time outstanding;
(11) any renewals, extensions, substitutions, refinancings or replacements
(each, for purposes of this clause, a "refinancing") of any outstanding
Indebtedness, other than Indebtedness incurred pursuant to clause (1),
(3), (5), (6), (7), (9), (10), (12), (13) or (14) of this definition,
including any successive refinancings thereof, so long as
(A) any such new Indebtedness is in a principal amount that does not exceed
the principal amount so refinanced, plus the amount of any premium
required to be paid in connection with such refinancing pursuant to
the terms of the Indebtedness refinanced or the amount of any premium
reasonably determined by Tritel PCS as necessary to accomplish such
refinancing, plus the amount of the expenses of Tritel PCS incurred in
connection with such refinancing,
(B) in the case of any refinancing of Subordinated Indebtedness, such new
Indebtedness is made subordinate to the notes at least to the same
extent as the Indebtedness being refinanced and has a final maturity
date after the maturity date of the notes,
(C) such refinancing Indebtedness does not have an Average Life less than
the Average Life of the Indebtedness being refinanced and has a final
maturity date later than the Indebtedness being refinanced, or permit
redemption at the option of the holder earlier than the earliest date
of redemption at the option of the holder, of the Indebtedness being
refinanced and
(D) such Indebtedness incurred either by Tritel PCS or any Restricted
Subsidiary who is the obligor on the Indebtedness being refinanced;
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(12) Capital Lease Obligations of Tritel PCS or any Restricted Subsidiary with
respect to the leasing by Tritel PCS or any Restricted Subsidiary of tower
sites, telephone and computer systems, operating facilities and, in each
case, equipment that is a fixture thereto, so long as such Capital Lease
Obligations shall not exceed $25 million in aggregate principal amount at
any time outstanding;
(13) Indebtedness of Tritel PCS or a Restricted Subsidiary represented by
letters of credit for the account of Tritel PCS or a Restricted Subsidiary
to provide security for workers compensation claims, payment obligations
for self insurance or similar requirements in the ordinary course of
business;
(14) Indebtedness of Tritel PCS or any Restricted Subsidiary in respect of
statutory obligations; performance, surety, or appeal bonds, or other
obligations of a like nature incurred in the ordinary course of business;
and
(15) Indebtedness of an Restricted Subsidiary to the FCC in respect of PCS
licenses in an aggregate face amount not to exceed $75 million at any
time.
Tritel PCS will not incur any Indebtedness, including Permitted Debt, that
is contractually subordinated in right of payment to any other Indebtedness of
Tritel PCS unless such Indebtedness is also contractually subordinated in right
of payment to the notes on substantially identical terms. However, no
Indebtedness of Tritel PCS shall be deemed to be contractually subordinated in
right of payment to any other Indebtedness of Tritel PCS solely by virtue of
being unsecured.
For purposes of determining compliance with this "Incurrence of
Indebtedness and Issuance of Preferred Stock" covenant, in the event that an
item of proposed Indebtedness meets the criteria of more than one of the
categories of Permitted Debt described in clauses (1) through (15) above, or is
entitled to be incurred pursuant to the first paragraph of this covenant,
Tritel PCS will be permitted to classify such item of Indebtedness on the date
of its incurrence in any manner that complies with this covenant.
LIMITATION ON OTHER SENIOR SUBORDINATED DEBT
Tritel PCS will not incur, create, issue, assume, guarantee or otherwise
become liable for any Indebtedness that is subordinate or junior in right of
payment to any of its Senior Debt and senior in any respect in right of payment
to the notes. No Subsidiary Guarantor will incur, create, issue, assume,
guarantee or otherwise become liable for any Indebtedness that is subordinate
or junior in right of payment to any of its Senior Debt and senior in any
respect in right of payment to such Guarantor's Subsidiary Guarantee.
LIENS
Tritel PCS will not, and will not permit any Subsidiary Guarantor to,
create, incur, assume or otherwise cause or suffer to exist or become effective
any Lien of any kind securing Indebtedness that is pari passu with the notes or
the applicable Subsidiary Guarantee, as the case may be, or is Subordinated
Indebtedness, upon any of their property or assets, now owned or hereafter
acquired, unless all payments due under the Indenture and the notes are secured
equally and ratably with, or prior to, in the case of Subordinated
Indebtedness, the obligations so secured until such time as such obligations
are no longer secured by such Lien, so long as this restriction will not apply
to any Lien securing Acquired Debt created prior to the incurrence of such
Indebtedness by Tritel PCS or any Subsidiary Guarantor, and to successive
extensions or refinancings thereof, where such Lien only extends to the assets
that were subject to such Lien prior to the related acquisition by Tritel PCS
or the Subsidiary Guarantor.
DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING RESTRICTED SUBSIDIARIES
Tritel PCS will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to:
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(1) pay dividends or make any other distributions on its Capital Stock to
Tritel PCS or any of its Restricted Subsidiaries, or with respect to any
other interest or participation in, or measured by, its profits, or pay
any indebtedness owed to Tritel PCS or any of its Restricted Subsidiaries;
(2) pay any Indebtedness owed to Tritel PCS or any other Restricted Subsidiary;
(3) make loans or advances to Tritel PCS or any of its Restricted Subsidiaries;
or
(4) transfer any of its properties or assets to Tritel PCS or any of its
Restricted Subsidiaries.
However, the preceding restrictions will not apply to encumbrances or
restrictions existing under or by reason of:
(1) Existing Indebtedness as in effect on the date of the indenture and any
amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings thereof, provided that such
amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacement or refinancings are no more restrictive, taken as
a whole, with respect to such dividend and other payment restrictions than
those contained in such Existing Indebtedness, as in effect on the date of
the indenture;
(2) any agreement or other instrument of a Person acquired by Tritel PCS or any
Restricted Subsidiary in existence at the time of such acquisition, but
not created in contemplation thereof, which encumbrance or restriction is
not applicable to any Person, or the properties or assets of any Person,
other than the Person, or the property or assets of the Person, so
acquired;
(3) with respect to a Restricted Subsidiary, imposed pursuant to an agreement
that has been entered into for the sale or disposition of all or
substantially all of Tritel PCS's Capital Stock in, or substantially all
the assets of, such Restricted Subsidiary in compliance with the "--
Repurchase at the Option of Holders -- Asset Sales" covenant;
(4) any such customary encumbrance or restriction contained in a security
document creating a Lien permitted under the indenture to the extent
relating to the property or asset subject to such Lien, including, without
limitation, customary restrictions relating to assets securing any
Telecommunications Indebtedness or the Bank Credit Agreement under the
applicable security documents; or
(5) customary non-assignment provisions in leases entered into in the ordinary
course of business and consistent with past practices.
MERGER, CONSOLIDATION OR SALE OF ASSETS
Tritel PCS may not, directly or indirectly: (1) consolidate or merge with
or into another Person, whether or not Tritel PCS is the surviving corporation;
or (2) sell, assign, transfer, convey or otherwise dispose of all or
substantially all of the properties or assets of Tritel PCS and its Restricted
Subsidiaries taken as a whole, in one or more related transactions, to another
Person; unless:
(1) either (a) Tritel PCS is the surviving corporation, or (b) the Person
formed by or surviving any such consolidation or merger, if other than
Tritel PCS, or to which such sale, assignment, transfer, conveyance or
other disposition shall have been made is a corporation organized or
existing under the laws of the United States, any state thereof or the
District of Columbia;
(2) the Person formed by or surviving any such consolidation or merger, if
other than Tritel PCS, or the Person to which such sale, assignment,
transfer, conveyance or other disposition shall have been made assumes all
the obligations of Tritel PCS under the notes, the indenture and the
Registration Rights Agreement pursuant to agreements reasonably
satisfactory to the Trustee;
(3) immediately after giving effect to such transaction or series of
transactions on a pro forma basis, and treating any obligation of Tritel
PCS or a Restricted Subsidiary in connection with or as a result of such
transaction as having been incurred as of the time of such transaction, no
Default or Event of Default exists;
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(4) Tritel PCS or the Person formed by or surviving any such consolidation or
merger, if other than Tritel PCS, or to which such sale, assignment,
transfer, conveyance or other disposition shall have been made:
(a) will have Consolidated Net Worth immediately after the transaction
equal to or greater than the Consolidated Net Worth of Tritel PCS
immediately preceding the transaction; and
(b) will, on the date of such transaction after giving pro forma effect
thereto and any related financing transactions as if the same had
occurred at the beginning of the applicable four-quarter period, be
permitted to incur at least $1.00 of additional Indebtedness, other
than Permitted Indebtedness, pursuant to the first paragraph of the
covenant described above under the caption "-- Incurrence of
Indebtedness and Issuance of Preferred Stock;"
(5) if any of the property or assets of Tritel PCS or any of its Restricted
Subsidiaries would thereupon become subject to any Lien, the provisions of
the "Liens" covenant are complied with; and
(6) Tritel PCS or the Person formed by or surviving any such consolidation or
merger, if other than Tritel PCS, shall have delivered to the Trustee an
officers' certificate and an opinion of counsel, each stating that such
transaction complies with the terms of the indenture.
Upon any consolidation or merger, or any sale, assignment, conveyance,
transfer, lease or disposition of all of substantially all of the properties
and assets of Tritel PCS in accordance with the immediately preceding paragraph
in which Tritel PCS is not the continuing obligor under the Indenture, the
Person formed by or surviving any such consolidation or merger, if other than
Tritel PCS, shall succeed to, and be substituted for, and may exercise every
right and power of, Tritel PCS under the indenture, with the same effect as if
such successor had been named as Tritel PCS therein. When a successor assumes
all the obligations of its predecessor under the indenture and the notes, the
predecessor shall be released from those obligations, so long as in the case of
a transfer by lease, the predecessor shall not be released from the payment of
principal and interest on the Notes.
TRANSACTIONS WITH AFFILIATES
Tritel PCS will not, and will not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit
of, any Affiliate (each, an "Affiliate Transaction"), unless:
(1) such Affiliate Transaction is on terms that are no less favorable to Tritel
PCS or the relevant Restricted Subsidiary than those that would have been
obtained in a comparable transaction by Tritel PCS or such Restricted
Subsidiary with an unrelated Person; and
(2) Tritel PCS delivers to the Trustee:
(a) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of
$10.0 million, a resolution of the Board of Directors set forth in an
Officers' Certificate certifying that such Affiliate Transaction
complies with this covenant and that such Affiliate Transaction has
been approved by a majority of the disinterested members of the Board
of Directors; and
(b) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of
$25.0 million, an opinion as to the fairness to the Holders of such
Affiliate Transaction from a financial point of view issued by an
accounting, appraisal or investment banking firm of national standing.
The following items shall not be deemed to be Affiliate Transactions and,
therefore, will not be subject to the provisions of the prior paragraph:
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(1) any employment or consulting agreement entered into by Tritel PCS or any of
its Restricted Subsidiaries in the ordinary course of business and
consistent with the past practice of Tritel PCS or such Restricted
Subsidiary;
(2) transactions between or among Tritel PCS and/or its Restricted
Subsidiaries;
(3) transactions with a Person that is an Affiliate of Tritel PCS solely
because Tritel PCS owns an Equity Interest in such Person;
(4) payment of reasonable directors fees, expenses and indemnification to
Persons who are not otherwise Affiliates of Tritel PCS;
(5) sales of Equity Interests, other than Disqualified Stock, to Affiliates of
Tritel PCS;
(6) Restricted Payments that are permitted by the provisions of the Indenture
described above under the caption "-- Restricted Payments;"
(7) transactions with AT&T or any of its Affiliates relating to the marketing
or provision of telecommunication services or related hardware, software
or equipment on terms that are no less favorable, when taken as a whole,
to Tritel PCS or such Restricted Subsidiary, as applicable, than those
available from unaffiliated third parties;
(8) transactions involving the leasing or sharing or other use by Tritel PCS or
any Restricted Subsidiary of communications network facilities, including,
without limitation, cable or fiber lines, equipment of transmission
capacity, of any Affiliate of Tritel PCS (such Affiliate being a "Related
Party") on terms that are no less favorable, when taken as a whole, to
Tritel PCS or such Restricted Subsidiary, as applicable, than those
available from such Related Party to unaffiliated third parties;
(9) transactions involving the provision of telecommunication services by a
Related Party in the ordinary course of its business to Tritel PCS or any
Restricted Subsidiary, or by Tritel PCS or any Restricted Subsidiary to a
Related Party, on terms that are no less favorable, when taken as a whole,
to Tritel PCS or such Restricted Subsidiary, as applicable, than those
available from such Related Party to unaffiliated third parties;
(10) any sales agency agreements pursuant to which an Affiliate has the right
to market any or all of the products or services of Tritel PCS or any of
the Restricted Subsidiaries;
(11) transactions involving the sale, transfer or other disposition of any
shares of Capital Stock of any Marketing Affiliate, so long as such
Marketing Affiliate is not engaged in any activity other than the
registration, holding, maintenance or protection of trademarks and the
licensing thereof; and
(12) up to $2.5 million of loans from Tritel PCS to Airwave Communications and
Digital PCS to fund the payment of certain litigation-related expenses and
contingent liabilities, pursuant to the secured promissory note agreement
in effect on the Issue Date.
SALE AND LEASEBACK TRANSACTIONS
Tritel PCS will not, and will not permit any of its Restricted
Subsidiaries to, enter into any sale and leaseback transaction. However, Tritel
PCS or any Restricted Subsidiary may enter into a sale and leaseback
transaction if:
(1) the lease is for a period, including renewal rights, of not in excess of
three years;
(2) the lease secures or relates to industrial revenue or pollution control
bonds;
(3) the transaction is between Tritel PCS and a Restricted Subsidiary or
between Restricted Subsidiaries; or
(4) Tritel PCS or such Restricted Subsidiary, within 12 months after the sale
or transfer of any assets or properties is completed, applies an amount
not less than the net proceeds received from such sale in accordance with
clause (1) or (2) of the second paragraph of the "-- Repurchase at the
Option of Holders -- Asset Sales" covenant.
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LIMITATION ON ISSUANCES AND SALES OF EQUITY INTERESTS IN RESTRICTED
SUBSIDIARIES
Tritel PCS (a) will not permit any Restricted Subsidiary to issue any
Capital Stock, other than to Tritel PCS or a Restricted Subsidiary, and (b)
will not permit any Person, other than Tritel PCS or a Restricted Subsidiary,
to own any Capital Stock of any Restricted Subsidiary. However, this covenant
shall not prohibit (1) the sale or other disposition of all, but not less than
all, of the issued and outstanding Capital Stock of any Restricted Subsidiary
owned by Tritel PCS or any Restricted Subsidiary in compliance with the other
provisions of the indenture or (2) the ownership by directors of directors'
qualifying shares or the ownership by foreign nationals of Capital Stock of any
Restricted Subsidiary, to the extent mandated by applicable law.
LIMITATION ON ISSUANCES OF GUARANTEES OF INDEBTEDNESS BY RESTRICTED
SUBSIDIARIES
Tritel PCS will not permit any of its Restricted Subsidiaries, directly or
indirectly, to Guarantee or pledge any assets to secure the payment of any
other Indebtedness of Tritel PCS unless (a) such Restricted Subsidiary
simultaneously executes and delivers a supplemental indenture providing for the
Guarantee of the payment of the notes by such Restricted Subsidiary, and (b)
with respect to any guarantee of Subordinated Indebtedness by a Restricted
Subsidiary, any such guarantee is subordinated to such Restricted Subsidiary's
guarantee with respect to the notes at least to the same extent as such
Subordinated Indebtedness is subordinated to the notes, provided that the
foregoing provision will not be applicable to (1) any guarantee by any
Restricted Subsidiary that existed at the time such person became a Restricted
Subsidiary and was not incurred in connection with, or in contemplation of,
such person becoming a Restricted Subsidiary or (2) the Bank Credit Agreement.
Any guarantee by a Restricted Subsidiary of the notes pursuant to the
preceding paragraph may provide by its terms that it will be automatically and
unconditionally released and discharged upon (1) any sale, exchange or transfer
to any person not an Affiliate of Tritel PCS of all of Tritel PCS's and the
Restricted Subsidiaries' Capital Stock in, or all or substantially all the
assets of, such Restricted Subsidiary, which sale, exchange or transfer is not
prohibited by the indenture, or (2) the release or discharge of the guarantee
that resulted in the creation of such guarantee of the notes, except a
discharge or release by or as a result of payment under such guarantee.
AMENDMENTS TO SECURITIES PURCHASE AGREEMENT
The indenture will provide that Tritel PCS will cause Tritel, Inc. not to
amend, modify or waive, or refrain from enforcing, any provision of the
Securities Purchase Agreement in any manner that would delay the closing
thereunder of Tritel, Inc.'s preferred stock to a date later than September 30,
1999 or would cause the net cash proceeds from the sale of Tritel's preferred
stock to be less than $49.7 million. Tritel PCS will also cause Tritel, Inc. to
make a capital contribution to it of the net cash proceeds from such sale.
ADDITIONAL SUBSIDIARY GUARANTEES
If Tritel PCS or any of its Restricted Subsidiaries acquires or creates
another Restricted Subsidiary after the Issue Date, then that newly acquired or
created Restricted Subsidiary must become a Subsidiary Guarantor and execute a
supplemental indenture satisfactory to the Trustee, so long as Tritel PCS shall
not cause any License Subsidiary to become a Subsidiary Guarantor unless such
License Subsidiary incurs Indebtedness other than Indebtedness in respect of
the Bank Credit Agreement or Indebtedness to the FCC. Each new Subsidiary
Guarantee will have the same terms as the Subsidiary Guarantees described
above.
BUSINESS ACTIVITIES
Tritel PCS will not, and will not permit any Restricted Subsidiary to,
engage in any business other than a Permitted Business.
UNRESTRICTED SUBSIDIARIES
The Board of Directors of Tritel PCS may designate any Subsidiary,
including any newly acquired or newly formed Subsidiary, to be an Unrestricted
Subsidiary so long as
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(1) neither Tritel PCS nor any Restricted Subsidiary is directly or
indirectly liable for any Indebtedness of such Subsidiary,
(2) no default with respect to any Indebtedness of such Subsidiary would
permit, upon notice, lapse of time or otherwise, any holder of any other
Indebtedness of Tritel PCS or any Restricted Subsidiary to declare a
default on such other Indebtedness or cause the payment thereof to be
accelerated or payable prior to its stated maturity,
(3) any Investment in such Subsidiary made as result of designating such
Subsidiary an Unrestricted Subsidiary will not violate the provisions of
the "-- Restricted Payments" covenant,
(4) neither Tritel PCS nor any Restricted Subsidiary has a contract,
agreement, arrangement, understanding or obligation of any kind, whether
written or oral, with such Subsidiary other than those that might be
obtained at the time from persons who are not Affiliates of Tritel PCS
and
(5) neither Tritel PCS nor any Restricted Subsidiary has any obligation (a)
to subscribe for additional shares of Capital Stock or other equity
interest in such Subsidiary or (b) to maintain or preserve such
Subsidiary's financial condition or to cause such Subsidiary to achieve
certain levels of operating results. Any such designation by the Board of
Directors of Tritel PCS shall be evidenced to the Trustee by filing a
board resolution with such Trustee giving effect to such designation. The
Board of Directors of Tritel PCS may designate any Unrestricted
Subsidiary as a Restricted Subsidiary if immediately after giving effect
to such designation, there would be no Default or Event of Default under
the indenture and Tritel PCS could incur $1.00 of additional
Indebtedness, other than Permitted Indebtedness, pursuant to the first
paragraph of the "-- Incurrence of Indebtedness and Issuance of Preferred
Stock" covenant.
REPORTS
Whether or not required by the SEC, so long as any notes are outstanding,
Tritel PCS will furnish to the Holders of notes, within the time periods
specified in the SEC's rules and regulations:
(1) all quarterly and annual financial information that would be required to be
contained in a filing with the SEC on Forms 10-Q and 10-K if Tritel PCS
were required to file such Forms, including a "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and, with
respect to the annual information only, a report on the annual financial
statements by Tritel PCS's certified independent accountants; and
(2) all current reports that would be required to be filed with the SEC on Form
8-K if Tritel PCS were required to file such reports.
In addition, following the consummation of the exchange offer contemplated
by the Registration Rights Agreement, whether or not required by the SEC,
Tritel PCS will file a copy of all of the information and reports referred to
in clauses (1) and (2) above with the SEC for public availability within the
time periods specified in the SEC's rules and regulations, unless the SEC will
not accept such a filing, and make such information available to securities
analysts and prospective investors upon request. In addition, Tritel PCS has
agreed that, for so long as any notes remain outstanding, it will furnish to
the Holders and to securities analysts and prospective investors, upon their
request, the information required to be delivered pursuant to Rule 144A(d)(4)
under the Securities Act.
Notwithstanding the preceding paragraphs, Tritel PCS may substitute
reports of its parent, Tritel, Inc., for its reports so long as Tritel, Inc. is
permitted under applicable rules, regulations and policies of the SEC to file
such reports with the SEC in lieu of Tritel PCS filing its own reports.
EVENTS OF DEFAULT AND REMEDIES
Each of the following is an "Event of Default":
(1) default for 30 days in the payment when due of interest on, or Liquidated
Damages with respect to, the notes;
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(2) default in payment when due of the principal of, or premium, if any, on the
notes;
(3) failure by Tritel PCS or any of its Restricted Subsidiaries to comply with
the provisions described under the captions "-- Repurchase at the Option
of Holders -- Change of Control," "-- Repurchase at the Option of Holders
-- Asset Sales," "-- Certain Covenants -- Restricted Payments," "--
Certain Covenants -- Incurrence of Indebtedness and Issuance of Preferred
Stock" or "-- Certain Covenants -- Merger, Consolidation or Sale of
Assets;"
(4) failure by Tritel PCS or any of its Restricted Subsidiaries for 30 days
after notice to comply with any of the other agreements in the indenture;
(5) default under any mortgage, indenture or instrument under which there may
be issued or by which there may be secured or evidenced any Indebtedness
for money borrowed by Tritel PCS or any of its Restricted Subsidiaries, or
the payment of which is guaranteed by Tritel PCS or any of its Restricted
Subsidiaries, whether such Indebtedness or guarantee now exists, or is
created after the date of the indenture, if that default:
(a) is caused by a failure to pay principal of, or interest or premium, if
any, on such Indebtedness prior to the expiration of the grace period
provided in such Indebtedness on the date of such default (a "Payment
Default"); or
(b) results in the acceleration of such Indebtedness prior to its express
maturity,
and, in each case, the principal amount of any such Indebtedness, together
with the principal amount of any other such Indebtedness under which there
has been a Payment Default or the maturity of which has been so
accelerated, aggregates $15.0 million or more;
(6) failure by Tritel PCS or any of its Restricted Subsidiaries to pay final
judgments aggregating in excess of $15.0 million, which judgments are not
paid, discharged or stayed for a period of 60 days;
(7) any holder or holders, or any Person acting on any such holder's behalf, of
any Indebtedness in excess of $15.0 million in the aggregate of Tritel PCS
or any Restricted Subsidiary shall, subsequent to the occurrence of a
default with respect to such Indebtedness, notify the Trustee of the
intended sale or disposition of any assets of Tritel PCS or any Restricted
Subsidiary that have been pledged to or for the benefit of such Person to
secure such Indebtedness or shall commence proceedings, or take action to
retain in satisfaction of any such Indebtedness, or to collect on, seize,
dispose of or apply, any such assets of Tritel PCS or any Restricted
Subsidiary pursuant to the terms of any agreement or instrument evidencing
any such Indebtedness of Tritel PCS or any Restricted Subsidiary or in
accordance with applicable law;
(8) the Parent Guarantee or any Subsidiary Guarantee issued by a Significant
Subsidiary ceases to be in full force and effect or is declared null and
void or the Parent Guarantor or any Subsidiary Guarantor that is a
Significant Subsidiary denies that it has any further liability under its
Guarantee, or gives notice to such effect, other than by reason of the
termination of the Indenture or the release of any such Guarantee in
accordance with the indenture, and such condition has continued for a
period of 30 days after written notice of such failure requiring the
Guarantor and Tritel PCS to remedy the same has been given (x) to Tritel
PCS by the Trustee or (y) to Tritel PCS and the Trustee by the holders of
25% in aggregate Accreted Value of the notes then outstanding; and
(9) certain events of bankruptcy or insolvency with respect to Tritel PCS,
Tritel or any Restricted Subsidiary that constitutes a Significant
Subsidiary.
In the case of an Event of Default arising from certain events of
bankruptcy or insolvency, with respect to Tritel PCS, any Restricted Subsidiary
that is a Significant Subsidiary or any group of Subsidiaries that, taken
together, would constitute a Significant Subsidiary, all outstanding notes will
become due and payable immediately without further action or notice. If any
other Event of Default occurs and is continuing, the Trustee or the Holders of
at least 25% in aggregate Accreted Value of the then outstanding notes may
declare all the notes to be due and payable immediately.
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Holders of the notes may not enforce the indenture or the notes except as
provided in the Indenture. Subject to certain limitations, Holders of a
majority in aggregate Accreted Value of the then outstanding notes may direct
the Trustee in its exercise of any trust or power. The Trustee may withhold
from Holders of the notes notice of any continuing Default or Event of Default,
except a Default or Event of Default relating to the payment of principal or
interest or Liquidated Damages, if it determines that withholding notice is in
their interest.
The Holders of a majority in aggregate Accreted Value of the notes then
outstanding by notice to the Trustee may on behalf of the Holders of all of the
notes waive any existing Default or Event of Default and its consequences under
the indenture except a continuing Default or Event of Default in the payment of
interest or Liquidated Damages on, or the principal of, the notes.
In the case of any Event of Default occurring by reason of any willful
action or inaction taken or not taken by or on behalf of Tritel PCS or any
Restricted Subsidiary with the intention of avoiding payment of the premium
that Tritel PCS would have had to pay if Tritel PCS then had elected to redeem
the notes pursuant to the optional redemption provisions of the indenture, an
equivalent premium shall also become and be immediately due and payable to the
extent permitted by law upon the acceleration of the notes. If an Event of
Default occurs prior to May 15, 2004, by reason of any willful action, or
inaction, taken, or not taken, by or on behalf of Tritel PCS with the intention
of avoiding the prohibition on redemption of the notes prior to May 15, 2004,
then the premium specified in the indenture shall also become immediately due
and payable to the extent permitted by law upon the acceleration of the notes.
Tritel PCS is required to deliver to the Trustee annually a statement
regarding compliance with the Indenture. Upon becoming aware of any Default or
Event of Default, Tritel PCS is required to deliver to the Trustee a statement
specifying such Default or Event of Default.
NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS
No director, officer, employee, incorporator or stockholder of Tritel PCS,
as such, shall have any liability for any obligations of Tritel PCS under the
notes, the indenture or for any claim based on, in respect of, or by reason of,
such obligations or their creation. Each Holder of notes by accepting a note
waives and releases all such liability. The waiver and release are part of the
consideration for issuance of the notes. The waiver may not be effective to
waive liabilities under the federal securities laws.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Tritel PCS may, at its option and at any time, elect to have all of its
obligations discharged with respect to the outstanding notes ("Legal
Defeasance") except for:
(1) the rights of Holders of outstanding notes to receive payments in respect
of the principal of, or interest or premium and Liquidated Damages, if
any, on such notes when such payments are due from the trust referred to
below;
(2) Tritel PCS's obligations with respect to the notes concerning issuing
temporary notes, registration of notes, mutilated, destroyed, lost or
stolen notes and the maintenance of an office or agency for payment and
money for security payments held in trust;
(3) the rights, powers, trusts, duties and immunities of the Trustee, and
Tritel PCS's obligations in connection therewith; and
(4) the Legal Defeasance and Covenant Defeasance provisions of the indenture.
In addition, Tritel PCS may, at its option and at any time, elect to have
the obligations of Tritel PCS released with respect to certain covenants that
are described in the indenture ("Covenant Defeasance") and thereafter any
omission to comply with those covenants shall not constitute a
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Default or Event of Default with respect to the notes. In the event Covenant
Defeasance occurs, certain events, not including non-payment, bankruptcy,
receivership, rehabilitation and insolvency events, described under "Events of
Default" will no longer constitute an Event of Default with respect to the
notes.
In order to exercise either Legal Defeasance or Covenant Defeasance:
(1) Tritel PCS must irrevocably deposit with the Trustee, in trust, for the
benefit of the Holders of the notes, cash in U.S. dollars, non-callable
Government Securities, or a combination thereof, in such amounts as will
be sufficient, in the opinion of a nationally recognized firm of
independent public accountants, to pay the principal of, or interest and
premium and Liquidated Damages, if any, on the outstanding notes on the
stated maturity or on the applicable redemption date, as the case may be,
and Tritel PCS must specify whether the notes are being defeased to
maturity or to a particular redemption date;
(2) in the case of Legal Defeasance, Tritel PCS shall have delivered to the
Trustee an Opinion of Counsel reasonably acceptable to the Trustee
confirming that (a) Tritel PCS has received from, or there has been
published by, the Internal Revenue Service a ruling or (b) since the date
of the indenture, there has been a change in the applicable federal income
tax law, in either case to the effect that, and based thereon such Opinion
of Counsel shall confirm that, the Holders of the outstanding notes will
not recognize income, gain or loss for federal income tax purposes as a
result of such Legal Defeasance and will be subject to federal income tax
on the same amounts, in the same manner and at the same times as would
have been the case if such Legal Defeasance had not occurred;
(3) in the case of Covenant Defeasance, Tritel PCS shall have delivered to the
Trustee an Opinion of Counsel reasonably acceptable to the Trustee
confirming that the Holders of the outstanding notes will not recognize
income, gain or loss for federal income tax purposes as a result of such
Covenant Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the
case if such Covenant Defeasance had not occurred;
(4) no Default or Event of Default shall have occurred and be continuing
either: (a) on the date of such deposit, other than a Default or Event of
Default resulting from the borrowing of funds to be applied to such
deposit; or (b) or insofar as Events of Default from bankruptcy or
insolvency events are concerned, at any time in the period ending on the
91st day after the date of deposit;
(5) such Legal Defeasance or Covenant Defeasance will not result in a breach or
violation of, or constitute a default under any material agreement or
instrument, other than the indenture, to which Tritel PCS or any of its
Restricted Subsidiaries is a party or by which Tritel PCS or any of its
Restricted Subsidiaries is bound;
(6) Tritel PCS must have delivered to the Trustee an Opinion of Counsel to the
effect that, assuming no intervening bankruptcy of Tritel PCS between the
date of deposit and the 91st day following the deposit and assuming that
no Holder is an insider of Tritel PCS under applicable bankruptcy law,
after the 91st day following the deposit, the trust funds will not be
subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally;
(7) Tritel PCS must deliver to the Trustee an Officers' Certificate stating
that the deposit was not made by Tritel PCS with the intent of preferring
the Holders of notes over the other creditors of Tritel PCS with the
intent of defeating, hindering, delaying or defrauding creditors of Tritel
PCS or others; and
(8) Tritel PCS must deliver to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that all conditions precedent relating to
the Legal Defeasance or the Covenant Defeasance have been complied with.
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AMENDMENT, SUPPLEMENT AND WAIVER
Except as provided in the next two succeeding paragraphs, the indenture or
the notes may be amended or supplemented with the consent of the Holders of at
least a majority in aggregate Accreted Value of the notes then outstanding,
including, without limitation, consents obtained in connection with a purchase
of, or tender offer or exchange offer for, the notes, and any existing default
or compliance with any provision of the indenture or the notes may be waived
with the consent of the Holders of a majority in aggregate Accreted Value of
the then outstanding Notes, including, without limitation, consents obtained in
connection with a purchase of, or tender offer or exchange offer for, notes.
Without the consent of each Holder affected, an amendment or waiver may
not, with respect to any notes held by a non-consenting Holder:
(1) reduce the Accreted Value of notes whose Holders must consent to an
amendment, supplement or waiver;
(2) reduce the principal of or change the fixed maturity of any note or alter
the provisions with respect to the redemption of the notes, other than
provisions relating to the covenants described above under the caption "--
Repurchase at the Option of Holders";
(3) reduce the rate of or change the time for payment of interest on any note;
(4) waive a Default or Event of Default in the payment of principal of, or
interest or premium or Liquidated Damages, if any, on the notes, except a
rescission of acceleration of the notes by the Holders of at least a
majority in aggregate Accreted Value of the notes and a waiver of the
payment default that resulted from such acceleration;
(5) make any note payable in money other than that stated in the notes;
(6) make any change in the provisions of the indenture relating to waivers of
past Defaults or the rights of Holders of notes to receive payments of
principal of, or interest or premium or Liquidated Damages, if any, on the
notes;
(7) waive a redemption payment with respect to any note, other than a payment
required by one of the covenants described above under the caption "--
Repurchase at the Option of Holders"; or
(8) make any change in the preceding amendment and waiver provisions.
Notwithstanding the preceding, without the consent of any Holder of notes,
Tritel PCS and the Trustee may amend or supplement the indenture or the notes:
(1) to cure any ambiguity, defect or inconsistency;
(2) to provide for uncertificated notes in addition to or in place of
certificated Notes;
(3) to evidence the succession of another Person to Tritel PCS or any other
obligor on the Notes and to provide for the assumption of Tritel PCS's
obligations to Holders of notes in the case of a merger or consolidation
or sale of all or substantially all of Tritel PCS's assets;
(4) to make any change that would provide any additional rights or benefits to
the Holders of notes or that does not adversely affect the legal rights
under the Indenture of any such Holder; or
(5) to comply with requirements of the Commission in order to effect or
maintain the qualification of the indenture under the Trust Indenture Act.
SATISFACTION AND DISCHARGE
The indenture will be discharged and will cease to be of further effect as
to all notes issued thereunder, when:
(1) either:
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(a) all notes that have been authenticated, except lost, stolen or
destroyed notes that have been replaced or paid and notes for whose
payment money has theretofore been deposited in trust and thereafter
repaid to Tritel PCS, have been delivered to the Trustee for
cancellation; or
(b) all notes that have not been delivered to the Trustee for cancellation
have become due and payable by reason of the making of a notice of
redemption or otherwise or will become due and payable within one year
and Tritel PCS has irrevocably deposited or caused to be deposited with
the Trustee as trust funds in trust solely for the benefit of the
Holders, cash in U.S. dollars, non-callable Government Securities, or a
combination thereof, in such amounts as will be sufficient without
consideration of any reinvestment of interest, to pay and discharge the
entire indebtedness on the notes not delivered to the Trustee for
cancellation for principal, premium and Liquidated Damages, if any, and
accrued interest to the date of maturity or redemption;
(2) no Default or Event of Default shall have occurred and be continuing on the
date of such deposit or shall occur as a result of such deposit and such
deposit will not result in a breach or violation of, or constitute a
default under, any other instrument to which Tritel PCS is a party or by
which Tritel PCS or any Guarantor is bound;
(3) Tritel PCS has paid or caused to be paid all sums payable by it under the
indenture; and
(4) Tritel PCS has delivered irrevocable instructions to the Trustee under the
indenture to apply the deposited money toward the payment of the notes at
maturity or the redemption date, as the case may be.
In addition, Tritel PCS must deliver an Officers' Certificate and an
Opinion of Counsel to the Trustee stating that all conditions precedent to
satisfaction and discharge have been satisfied.
INFORMATION CONCERNING THE TRUSTEE
If the Trustee becomes a creditor of Tritel PCS, the Indenture limits its
right to obtain payment of claims in certain cases, or to realize on certain
property received in respect of any such claim as security or otherwise. The
Trustee will be permitted to engage in other transactions; however, if it
acquires any conflicting interest it must eliminate such conflict within 90
days, apply to the Commission for permission to continue or resign.
The Holders of a majority in Accreted Value of the then outstanding notes
will have the right to direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee, subject to
certain exceptions. The indenture provides that in case an Event of Default
shall occur and be continuing, the Trustee will be required, in the exercise of
its power, to use the degree of care of a prudent man in the conduct of his own
affairs. Subject to such provisions, the Trustee will be under no obligation to
exercise any of its rights or powers under the indenture at the request of any
Holder of notes, unless such Holder shall have offered to the Trustee security
and indemnity satisfactory to it against any loss, liability or expense.
ADDITIONAL INFORMATION
Anyone who receives this prospectus may obtain a copy of the indenture and
Registration Rights Agreement without charge by writing to Tritel PCS, Inc.,
111 E. Capitol Street, Suite 500, Jackson, Mississippi 39201, Attention:
Corporate Secretary.
GOVERNING LAW
The indenture and the notes will be governed by, and construed in
accordance with, the laws of the State of New York.
BOOK-ENTRY, DELIVERY AND FORM
Except as set forth in the next paragraph, the notes to be resold as set
forth herein will initially be issued in the form of one Global Note. The
Global Note will be deposited on the Closing Date
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with the Trustee as custodian for The Depository Trust Company (the
"Depositary") and registered in the name of Cede & Co., as nominee of the
Depositary (such nominee being referred to herein as the "Global Note Holder").
Notes originally purchased by persons outside the United States pursuant
to sales in accordance with Regulation S under the Securities Act will be
represented upon issuance by a temporary global Note certificate (the
"Temporary Certificate"), which will not be exchangeable for Certificated Notes
until the expiration of the "40-day restricted period" within the meaning of
Rule 903(c)(3) of Regulation S under the Securities Act. The Temporary
Certificate will be registered in the name of, and held by, a temporary
certificate holder until the expiration of such 40-day period, at which time
the Temporary Certificate will be delivered to the Trustee in exchange for
Certificated Notes registered in the names requested by such temporary
certificate holder. In addition, until the expiration of such 40-day period,
transfers of interests in the Temporary Certificate can only be effected
through such temporary certificate holder in accordance with the requirements
set forth in "Notice to Investors."
The Depositary is a limited-purpose trust company that was created to hold
securities for its participating organizations (collectively, the
"Participants" or the "Depositary's Participants") and to facilitate the
clearance and settlement of transactions in such securities between
Participants through electronic book-entry changes in accounts of its
Participants. The Depositary's Participants include securities brokers and
dealers, including the Initial Purchasers, banks and trust companies, clearing
corporations and certain other organizations. Access to the Depositary's system
is also available to other entities such as banks, brokers, dealers and trust
companies (collectively, the "Indirect Participants" or the "Depositary's
Indirect Participants") that clear through or maintain a custodial relationship
with a Participant, either directly or indirectly. Persons who are not
Participants may beneficially own securities held by or on behalf of the
Depositary only through the Depositary's Participants or the Depositary's
Indirect Participants.
Tritel PCS expects that pursuant to procedures established by the
Depositary (1) upon deposit of the Global Note, the Depositary will credit the
accounts of Participants designated by the Initial Purchasers with portions of
the principal amount of the Global Note and (2) ownership of the notes
evidenced by the Global Note will be shown on, and the transfer of ownership
thereof will be effected only through, records maintained by the Depositary,
with respect to the interests of the Depositary's Participants, the
Depositary's Participants and the Depositary's Indirect Participants.
Prospective purchasers are advised that the laws of some states require that
certain persons take physical delivery in definitive form of securities that
they own. Consequently, the ability to own, transfer or pledge Notes evidenced
by the Global Note will be limited to such extent. For certain other
restrictions on the transferability of the notes, see "Notice to Investors."
So long as the Global Note Holder is the registered owner of any notes,
the Global Note Holder will be considered the sole Holder under the Indenture
of any notes evidenced by the Global Note. Beneficial owners of notes evidenced
by the Global Note will not be considered the owners or Holders thereof under
the indenture for any purpose, including with respect to the giving of any
directions, instructions or approvals to the Trustee thereunder. Neither Tritel
PCS, nor the Trustee will have any responsibility or liability for any aspect
of the records of the Depositary or for maintaining, supervising or reviewing
any records of the Depositary relating to the notes.
Payments in respect of the principal of and premium, if any, and interest
on any notes registered in the name of the Global Note Holder on the applicable
record date will be payable by the Trustee to or at the direction of the Global
Note Holder in its capacity as the registered Holder under the Indenture. Under
the terms of the indenture, Tritel PCS and the Trustee may treat the persons in
whose names notes, including the Global Note, are registered as the owners
thereof for the purpose of receiving such payments. Consequently, neither
Tritel PCS, nor the Trustee has or will have any responsibility or liability
for the payment of such amounts to beneficial owners of the notes. Tritel PCS
believes, however, that it is currently the policy of the Depositary to
immediately credit the accounts of the relevant Participants with such
payments, in amounts proportionate to their respective
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holdings of beneficial interests in the relevant security as shown on the
records of the Depositary. Payments by the Depositary's Participants and the
Depositary's Indirect Participants to the beneficial owners of the notes will
be governed by standing instructions and customary practice and will be the
responsibility of the Depositary's Participants or the Depositary's Indirect
Participants.
EXCHANGE OF GLOBAL NOTES FOR CERTIFICATED NOTES
A Global Note is exchangeable for definitive notes in registered
certificated form ("Certificated Notes") if:
(1) DTC (a) notifies Tritel PCS that it is unwilling or unable to continue as
depositary for the Global Notes and Tritel PCS fails to appoint a
successor depositary or (b) has ceased to be a clearing agency registered
under the Exchange Act;
(2) Tritel PCS, at its option, notifies the Trustee in writing that it elects
to cause the issuance of the Certificated Notes; or
(3) there shall have occurred and be continuing a Default or Event of Default
with respect to the notes.
In addition, beneficial interests in a Global Note may be exchanged for
Certificated Notes upon prior written notice given to the Trustee by or on
behalf of DTC in accordance with the indenture. In all cases, Certificated
Notes delivered in exchange for any Global Note or beneficial interests in
Global Notes will be registered in the names, and issued in any approved
denominations, requested by or on behalf of the depositary, in accordance with
its customary procedures, and will bear the applicable restrictive legend
referred to in "Notice to Investors," unless that legend is not required by
applicable law.
EXCHANGE OF CERTIFICATED NOTES FOR GLOBAL NOTES
Certificated Notes may not be exchanged for beneficial interests in any
Global Note unless the transferor first delivers to the Trustee a written
certificate, in the form provided in the indenture, to the effect that such
transfer will comply with the appropriate transfer restrictions applicable to
such notes. See "Notice to Investors."
SAME DAY SETTLEMENT AND PAYMENT
Tritel PCS will make payments in respect of the notes represented by the
Global Notes, including principal, premium, if any, interest and Liquidated
Damages, if any, by wire transfer of immediately available funds to the
accounts specified by the Global Note Holder. Tritel PCS will make all payments
of principal, interest and premium and Liquidated Damages, if any, with respect
to Certificated Notes by wire transfer of immediately available funds to the
accounts specified by the Holders thereof or, if no such account is specified,
by mailing a check to each such Holder's registered address. The notes
represented by the Global Notes are expected to be eligible to trade in the
PORTAL market and to trade in DTC's Same-Day Funds Settlement System, and any
permitted secondary market trading activity in such Notes will, therefore, be
required by DTC to be settled in immediately available funds. Tritel PCS
expects that secondary trading in any Certificated Notes will also be settled
in immediately available funds.
Because of time zone differences, the securities account of a Euroclear or
Cedel participant purchasing an interest in a Global Note from a Participant in
DTC will be credited, and any such crediting will be reported to the relevant
Euroclear or Cedel participant, during the securities settlement processing
day, which must be a business day for Euroclear and Cedel, immediately
following the settlement date of DTC. DTC has advised Tritel PCS that cash
received in Euroclear or Cedel as a result of sales of interests in a Global
Note by or through a Euroclear or Cedel participant to a Participant in DTC
will be received with value on the settlement date of DTC but will be available
in the relevant Euroclear or Cedel cash account only as of the business day for
Euroclear or Cedel following DTC's settlement date.
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CERTAIN DEFINITIONS
Set forth below are certain defined terms used in the indenture. Reference
is made to the indenture for a full disclosure of all such terms, as well as
any other capitalized terms used herein for which no definition is provided.
"Accreted Increment" means (a) if the redemption date occurs before the
first Semi-Annual Accrual Date, an amount equal to the product of (1) the
Accreted Value for the first Semi-Annual Accrual Date less the original issue
price multiplied by (2) a fraction, the numerator of which is the number of
days from the Closing Date to the redemption date, using a 360-day year of
twelve 30-day months, and the denominator of which is the number of days
elapsed from the Closing Date to the first Semi-Annual Accrual Date, using a
360-day year of twelve 30-day months, or (b) if the redemption date occurs
between two Semi-Annual Accrual Dates, an amount equal to the product of (1)
the Accreted Value for the immediately following Semi-Annual Accrual Date less
the Accreted Value for the immediately preceding Semi-Annual Accrual Date
multiplied by (2) a fraction, the numerator of which is the number of days from
the immediately preceding Semi-Annual Accrual Date to the redemption date,
using a 360-day year of twelve 30-day months, and the denominator of which is
180.
"Accreted Value" means, for any particular date of determination (any such
date being herein referred to as a "Specified Date"), the amount provided below
for each $1,000 principal amount at maturity of notes outstanding:
A. If the Specified Date occurs on one of the following dates (each a
"Semi-Annual Accrual Date"), the Accreted Value will equal the amount set
forth below:
<TABLE>
<CAPTION>
SEMI-ANNUAL
ACCRUAL DATE ACCRETED VALUE
- ------------------------------------- ---------------
<S> <C>
November 15, 1999 $ 573.38
May 15, 2000 609.93
November 15, 2000 648.82
May 15, 2001 690.18
November 15, 2001 734.18
May 15, 2002 780.98
November 15, 2002 830.77
May 15, 2003 883.73
November 15, 2003 940.07
May 15, 2004 or thereafter $ 1,000.00
</TABLE>
B. If the Specified Date occurs before the first Semi-Annual Accrual
Date, the Accreted Value will equal the sum of (1) the original issue price
and (2) an amount equal to the product of (a) the Accreted Value for the
first Semi-Annual Accrual Date less the original issue price multiplied by
(b) a fraction, the numerator of which is the number of days from the issue
date of the notes to the Specified Date, using a 360-day year of twelve
30-day months, and the denominator of which is the number of days elapsed
from the issue date of the notes to the first Semi-Annual Accrual Date,
using a 360-day year of twelve 30-day months.
C. If the Specified Date occurs between two Semi-Annual Accrual Dates,
the Accreted Value will equal the sum of (1) the Accreted Value for the
Semi-Annual Accrual Date immediately preceding such Specified Date and (2)
an amount equal to the product of (a) the Accreted Value for the
immediately following Semi-Annual Accrual Date less the Accreted Value for
the immediately preceding Semi-Annual Accrual Date multiplied by (b) a
fraction, the numerator of which is the number of days from the immediately
preceding Semi-Annual Accrual Date to the Specified Date, using a 360-day
year of twelve 30-day months, and the denominator of which is 180.
D. If the Specified Date occurs after May 15, 2004, the Accreted Value
will equal $1,000.
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"Acquired Debt" means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person,
whether or not such Indebtedness is incurred in connection with, or in
contemplation of, such other Person merging with or into, or becoming a
Subsidiary of, such specified Person; and
(2) Indebtedness secured by a Lien encumbering any asset acquired by such
specified Person.
"Affiliate" means, with respect to any specified Person, any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control," when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meaning correlative to the
foregoing.
"Asset Acquisition" means (a) any capital contribution, by means of
transfers of cash or other property to others or payments for property or
services for the account or use of others, or otherwise, by Tritel PCS or any
Restricted Subsidiary in any other Person, or any acquisition or purchase of
Capital Stock of any other Person by Tritel PCS or any Restricted Subsidiary,
in either case pursuant to which such Person shall become a Restricted
Subsidiary or shall be merged with or into Tritel PCS or any Restricted
Subsidiary or (b) any acquisition by Tritel PCS or any Restricted Subsidiary of
the assets of any Person which constitute substantially all of an operating
unit or line of business of such Person or which is otherwise outside of the
ordinary course of business.
"Asset Disposition" means the sale or other disposition by Tritel PCS or
any of its Restricted Subsidiaries, other than to Tritel PCS or another
Restricted Subsidiary of Tritel PCS, of (a) all or substantially all of the
Capital Stock of any Restricted Subsidiary of Tritel PCS or (b) all or
substantially all of the assets that constitute a division or line of business
of Tritel PCS or any of its Restricted Subsidiaries.
"Asset Sale" means:
(1) the sale, lease, conveyance or other disposition of any assets or rights,
other than sales of inventory in the ordinary course of business
consistent with past practices; provided that the sale, conveyance or
other disposition of all or substantially all of the assets of Tritel PCS
and its Restricted Subsidiaries taken as a whole will be governed by the
provisions of the indenture described above under the caption "--
Repurchase at the Option of Holders -- Change of Control" and/or the
provisions described above under the caption "-- Certain Covenants --
Merger, Consolidation or Sale of Assets" and not by the provisions of the
"-- Repurchase at the Option of Holders -- Asset Sale" covenant; and
(2) the issuance of Equity Interests by any of Tritel PCS's Restricted
Subsidiaries or the sale of Equity Interests in any of its Subsidiaries.
Notwithstanding the preceding, the following items shall not be deemed to
be Asset Sales:
(1) any single transaction or series of related transactions that involves
assets having a fair market value of less than $5.0 million;
(2) any disposition of properties and assets of Tritel PCS that is governed by
the provisions of the indenture described under "-- Merger, Consolidation
and Sale of Assets" above;
(3) a transfer of assets between or among Tritel PCS and its Restricted
Subsidiaries;
(4) transfers of property or assets to an Unrestricted Subsidiary, if permitted
under the "Restricted Payments" covenant;
(5) the sale or lease of equipment, inventory, accounts receivable or other
assets in the ordinary course of business; and
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(6) any transfer by Tritel PCS or a Subsidiary of property or equipment with a
fair market value of less than $5.0 million to a Person who is not an
Affiliate of Tritel PCS in exchange for property or equipment that has a
fair market value at least equal to the fair market value of the property
or equipment so transferred; provided that, in the event of a transfer
described in this clause (6), Tritel PCS shall deliver to the Trustee an
officer's certificate certifying that such exchange complies with this
clause (6).
"Average Life" means, as of the date of determination with respect to any
Indebtedness, the quotient obtained by dividing (a) the sum of the products of
(x) the number of years from the date of determination to the date or dates of
each successive scheduled principal payment, including, without limitation, any
sinking fund requirements, of such Indebtedness multiplied by (y) the amount of
each such principal payment by (b) the sum of all such principal payments.
"Bank Credit Agreement" means the Amended and Restated Loan Agreement
dated as of March 31, 1999 between Tritel PCS, Tritel, Inc., Toronto Dominion
(Texas), Inc, as administrative agent and the Banks, as such agreement may be
amended, restated, supplemented, refinanced or otherwise modified from time to
time.
"Banks" means the banks or other financial institutions that from time to
time are lenders under the Bank Credit Agreement.
"Beneficial Owner" has the meaning assigned to such term in Rule 13d-3 and
Rule 13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular "person," as that term is used in Section 13(d)(3)
of the Exchange Act, such "person" shall be deemed to have beneficial ownership
of all securities that such "person" has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is
exercisable only upon the occurrence of a subsequent condition. The terms
"Beneficially Owns" and "Beneficially Owned" shall have a corresponding
meaning.
"Board of Directors" means:
(1) with respect to a corporation, the board of directors of the corporation;
(2) with respect to a partnership, the Board of Directors of the general
partner of the partnership; and
(3) with respect to any other Person, the board or committee of such Person
serving a similar function.
"Capital Lease Obligation" means, with respect to any person, an
obligation incurred or assumed under or in connection with any capital lease of
real or personal property that, in accordance with GAAP, has been recorded as a
capitalized lease.
"Capital Stock" means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents, however
designated, of corporate stock;
(3) in the case of a partnership or limited liability company, partnership or
membership interests, whether general or limited; and
(4) any other interest or participation that confers on a Person the right to
receive a share of the profits and losses of, or distributions of assets
of, the issuing Person.
"Cash Equivalents" means:
(1) United States dollars;
(2) securities issued or directly and fully guaranteed or insured by the United
States government or any agency or instrumentality thereof, so long as the
full faith and credit of the United States is pledged in support thereof,
having maturities of not more than six months from the date of
acquisition;
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(3) certificates of deposit and eurodollar time deposits with maturities of six
months or less from the date of acquisition, bankers' acceptances with
maturities not exceeding six months and overnight bank deposits, in each
case, with any lender party to the Bank Credit Agreement or with any
domestic commercial bank having capital and surplus in excess of $500.0
million and a Thomson Bank Watch Rating of "B" or better;
(4) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (2) and (3) above
entered into with any financial institution meeting the qualifications
specified in clause (3) above;
(5) commercial paper having the highest rating obtainable from Moody's
Investors Service, Inc. or Standard & Poor's Rating Services and in each
case maturing within six months after the date of acquisition; and
(6) money market funds at least 95% of the assets of which constitute Cash
Equivalents of the kinds described in clauses (1) through (5) of this
definition.
"Change of Control" means the occurrence of any of the following:
(1) for so long as the Voting Preference Common Stock of Tritel, Inc. remains
outstanding and the Voting Preference Common Stock constitutes 50.1% or
more of the combined voting power of all classes of Tritel, Inc.'s
outstanding Voting Stock pursuant to the Restated Certificate of
Incorporation of Tritel, Inc., a "person" or "group," within the meaning
of Sections 13(d) and 14(d)(2) of the Exchange Act, other than a Permitted
Holder, becomes the "beneficial owner," as defined in Rules 13d-3 and
13d-5 under the Exchange Act, except that a person will be deemed to have
"beneficial ownership" of all securities that such person has the right to
acquire, whether such right is exercisable immediately or only after the
passage of time, directly or indirectly, of shares of Voting Preference
Common Stock having more than 50% of the total voting power of such shares
of Voting Preference Common Stock;
(2) if there are no shares of Voting Preference Common Stock outstanding or the
Voting Preference Common Stock no longer constitutes 50.1% or more of the
combined voting power of all classes of Tritel, Inc.'s outstanding Voting
Stock pursuant to the Restated Certificate of Incorporation of Tritel,
Inc., a "person" or "group", other than a Permitted Holder, becomes the
"beneficial owner" of Voting Stock having more than 50% of the voting
power of the total Voting Stock of Tritel, Inc.;
(3) the direct or indirect sale, transfer, conveyance or other disposition,
other than by way of merger or consolidation, in one or a series of
related transactions, of all or substantially all of the properties or
assets of Tritel PCS and its Restricted Subsidiaries taken as a whole to
any "person," as that term is used in Section 13(d)(3) of the Exchange
Act, except to a Permitted Holder;
(4) the adoption of a plan relating to the liquidation or dissolution of Tritel
PCS;
(5) during any consecutive two year period, individuals who at the beginning of
such period constituted the Board of Directors of Tritel PCS, together
with any new directors whose election to such Board of Directors, or whose
nomination for election by the stockholders of Tritel PCS, was approved by
a vote of 66 2/3% of the directors then still in office who were either
directors at the beginning of such period or whose election or nomination
for election was previously so approved, cease for any reason to
constitute a majority of the Board of Directors of Tritel PCS then in
office. However, that changes in specific representatives of the existing
investors that are entitled to nominate board representatives shall be
excluded from consideration for purposes of this clause (5); or
(6) Tritel ceases to own, directly or indirectly, 100% of the Capital Stock of
Tritel PCS.
"Consolidated EBITDA" means, for any period, the sum of, without
duplication, Consolidated Net Income for such period, plus, or, in the case of
clause (d) below, plus or minus, the following
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items to the extent included in computing Consolidated Net Income for such
period: (a) the Consolidated Interest Expense and preferred stock dividends of
Tritel PCS and its Restricted Subsidiaries for such period, plus (b) the
provision for federal, state, local and foreign income taxes of Tritel PCS and
its Restricted Subsidiaries for such period, plus (c) the aggregate
depreciation and amortization expense of Tritel PCS and any of its Restricted
Subsidiaries for such period, plus (d) any other non-cash charges for such
period, and minus non-cash credits for such period, other than non-cash charges
or credits resulting from changes in prepaid assets or accrued liabilities in
the ordinary course of business, so long as income tax expense, interest
expense and preferred stock dividends, depreciation and amortization expense,
and non-cash charges and credits of a Restricted Subsidiary will be included in
Consolidated EBITDA only to the extent, and in the same proportion, that the
net income of such Restricted Subsidiary was included in calculating
Consolidated Net Income for such period.
"Consolidated Interest Expense" means, for any period, the aggregate
amount of (a) interest in respect of Indebtedness, including amortization of
original issue discount on any Indebtedness and the interest portion of any
deferred payment obligation, calculated in accordance with the effective
interest method of accounting; all commissions, discounts and other fees and
charges owed with respect to letters of credit and bankers' acceptance
financings; the net costs associated with Hedging Obligations; and Indebtedness
that is guaranteed or secured by Tritel PCS or any of its Restricted
Subsidiaries, (b) the interest portion of Capital Lease Obligations paid,
accrued or scheduled to be paid or to be accrued by Tritel PCS and its
Restricted Subsidiaries during such period and (c) cash dividends paid on
Disqualified Stock by Tritel PCS and any Restricted Subsidiary to any Person
other than Tritel PCS and its Restricted Subsidiaries.
"Consolidated Leverage Ratio" means, on any Transaction Date, the ratio of
(a) the aggregate amount of Indebtedness of Tritel PCS and its Restricted
Subsidiaries on a consolidated basis as of such date to (b) the product of (x)
the aggregate amount of Consolidated EBITDA for the immediately preceding two
full fiscal quarters for which internal financial statements are available,
taken as one accounting period, multiplied by (y) two.
"Consolidated Net Income" means, for any period, the aggregate net income,
or loss, of Tritel PCS and its Restricted Subsidiaries for such period
determined in conformity with GAAP, so long as that the following items shall
be excluded in computing Consolidated Net Income, without duplication:
(1) the portion of net income, or loss, of any Person, other than Tritel PCS
or a Restricted Subsidiary, including Unrestricted Subsidiaries, in which
Tritel PCS or any Restricted Subsidiary has an ownership interest, except
to the extent of the amount of dividends or other distributions actually
paid to Tritel PCS or any Restricted Subsidiary in cash during such
period;
(2) the net income, or loss, of any Person combined with Tritel PCS or any
Restricted Subsidiary on a "pooling of interests" basis attributable to
any period prior to the date of combination;
(3) the net income of any Restricted Subsidiary to the extent that the
declaration or payment of dividends or similar distributions by such
Restricted Subsidiary is at the date of determination restricted, directly
or indirectly, except to the extent that such net income could be paid to
Tritel PCS or a Restricted Subsidiary thereof by loans, advances,
intercompany transfers, principal repayments or otherwise;
(4) any gains or losses, on an after-tax basis, attributable to Asset Sales;
(5) except for purposes of calculating the amount of Restricted Payments that
may be made pursuant to clause (3) of the first paragraph of the
"Limitation on Restricted Payments" covenant, any amount paid or accrued
as dividends on Preferred Stock, other than accrued dividends which,
pursuant to the terms of the Preferred Stock, will not be payable prior to
the first anniversary after the Stated Maturity of the notes, of Tritel
PCS or any Restricted Subsidiary owned by Persons other than Tritel PCS
and any of its Restricted Subsidiaries; and
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(6) all extraordinary gains and extraordinary losses.
"Consolidated Net Worth" means, with respect to any specified Person as of
any date, the sum of:
(1) the consolidated equity of the common stockholders of such Person and its
Restricted Subsidiaries as of such date; plus
(2) the respective amounts reported on such Person's balance sheet as of such
date with respect to any series of preferred stock, other than
Disqualified Stock, that by its terms is not entitled to the payment of
dividends unless such dividends may be declared and paid only out of net
earnings in respect of the year of such declaration and payment, but only
to the extent of any cash received by such Person upon issuance of such
preferred stock.
"Currency Agreement" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement entered into by a Person
that is designed to protect such Person against fluctuations in currency
values.
"Default" means any event that is, or after notice or passage of time or
both, would be an Event of Default.
"Disqualified Stock" means any Capital Stock that, by its terms, or by the
terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder thereof, or upon the
happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or redeemable at the option of the holder
thereof, in whole or in part, on or prior to the date that is 91 days after the
date on which the notes mature. Notwithstanding the preceding sentence, any
Capital Stock that would constitute Disqualified Stock solely because the
holders thereof have the right to require Tritel PCS to repurchase such Capital
Stock upon the occurrence of a change of control or an asset sale shall not
constitute Disqualified Stock if the terms of such Capital Stock provide that
Tritel PCS may not repurchase or redeem any such Capital Stock pursuant to such
provisions unless such repurchase or redemption complies with the covenant
described above under the caption "-- Certain Covenants -- Restricted
Payments."
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock, but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock.
"Equity Offering" means a capital contribution to Tritel PCS from Tritel,
Inc. or a sale by Tritel PCS of its Capital Stock, which is not Disqualified
Stock, to Tritel, Inc.
"Existing Indebtedness" means up to $41.2 million book value in aggregate
principal amount of Indebtedness of Tritel PCS and its Restricted Subsidiaries
(other than Indebtedness under the Bank Credit Agreement) in existence on the
date of the Indenture, until such amounts are repaid.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect from time to time.
"Government Securities" means securities that are (x) direct obligations
of the United States of America for the payment of which its full faith and
credit is pledged or (y) obligations of a person controlled or supervised by
and acting as an agency or instrumentality of the United States of America, the
payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America, which, in either case, are not
callable or redeemable at the option of Tritel PCS thereof, and shall also
include a depository receipt issued by a bank, as defined in Section 3(a)(2) of
the Securities Act, as a custodian with respect to any such U.S. Government
obligation or a specific payment of principal of or interest on any such U.S.
Government obligation held by such custodian for the account of the holder of
such depository receipt. However, except as required by law, such custodian is
not authorized to make any deduction from the amount payable to the holder of
such depository receipt from any amount received by the custodian in respect of
the U.S. Government obligation or the specific payment of principal of or
interest on the U.S. Government obligation evidenced by such depository
receipt.
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"guarantee" means a guarantee other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness.
"Guarantee" means the guarantees of the notes by the Parent Guarantor and
the Subsidiary Guarantors in accordance with the provisions of the indenture.
"Guarantors" means the Parent Guarantor and the Subsidiary Guarantors.
"Hedging Obligations" means, with respect to any specified Person, the
obligations of such Person under:
(1) interest rate swap agreements, interest rate cap agreements and interest
rate collar agreements; and
(2) other agreements or arrangements designed to protect such Person against
fluctuations in interest rates.
"Indebtedness" means, with respect to any specified Person, any
indebtedness of such Person, whether or not contingent, in respect of:
(1) borrowed money;
(2) evidenced by bonds, notes, debentures or similar instruments or letters of
credit, or reimbursement agreements in respect thereof;
(3) banker's acceptances;
(4) representing Capital Lease Obligations;
(5) the balance deferred and unpaid of the purchase price of any property,
except any such balance that constitutes an accrued expense or trade
payable; or
(6) representing any Hedging Obligations,
if and to the extent any of the preceding items, other than letters of credit,
would appear as a liability upon a balance sheet of the specified Person
prepared in accordance with GAAP. In addition, the term "Indebtedness" includes
all Indebtedness of others secured by a Lien on any asset of the specified
Person, whether or not such Indebtedness is assumed by the specified Person,
and, to the extent not otherwise included, the Guarantee by the specified
Person of any indebtedness of any other Person.
The amount of any Indebtedness outstanding as of any date shall be:
(1) the accreted value thereof, in the case of any Indebtedness issued with
original issue discount; and
(2) the principal amount thereof, together with any interest thereon that is
more than 30 days past due, in the case of any other Indebtedness.
"Investments" means, with respect to any Person, all direct or indirect
investments by such Person: in other Persons, including Affiliates; in the
forms of loans, including Guarantees or other obligations; advances or capital
contributions, excluding commission, travel and similar advances to officers
and employees made in the ordinary course of business; purchases or other
acquisitions for consideration of Indebtedness, Equity Interests or other
securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP. If Tritel PCS
or any Restricted Subsidiary of Tritel PCS sells or otherwise disposes of any
Equity Interests of any direct or indirect Restricted Subsidiary of Tritel PCS
such that, after giving effect to any such sale or disposition, such Person is
no longer a Restricted Subsidiary of Tritel PCS, Tritel PCS shall be deemed to
have made an Investment on the date of any such sale or disposition equal to
the fair market value of the Equity Interests of such Restricted Subsidiary not
sold or disposed of in an
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amount determined as provided in the final paragraph of the covenant described
above under the caption "-- Certain Covenants -- Restricted Payments." The
acquisition by Tritel PCS or any Restricted Subsidiary of Tritel PCS of a
Person that holds an Investment in a third Person shall be deemed to be an
Investment by Tritel PCS or such Restricted Subsidiary in such third Person in
an amount equal to the fair market value of the Investment held by the acquired
Person in such third Person in an amount determined as provided in the final
paragraph of the covenant described above under the caption "-- Certain
Covenants -- Restricted Payments."
"Issue Date" means the date of original issuance of the notes.
"License Subsidiary" means Tritel A/B Holding Corp., Tritel C/F Holding
Corp., NexCom, Inc., Clearcall, Inc., Global PCS, Inc., Clearwave, Inc.,
DigiNet PCS, Inc., DigiCom, Inc. and DigiCall, Inc., each a Delaware
corporation, and Aircom PCS, Inc. and QuinCom, Inc., each an Alabama
corporation, and any other wholly owned Subsidiary of Tritel PCS designated as
a License Subsidiary under the Bank Credit Agreement. However, any such
Subsidiary will be a License Subsidiary only so long as its sole assets consist
of stock on one or more other License Subsidiaries, one or more PCS Licenses
and/or cash from senior loans by Tritel PCS or any Restricted Subsidiary in
order to fund amounts due, substantially contemporaneously, to the FCC or with
respect to franchise taxes and other similar payments related to the PCS
Licenses, and its sole Indebtedness consists of Indebtedness owed to the FCC
attributable to such PCS License or Licenses, amounts owed to Tritel PCS or any
Restricted Subsidiary under such senior loans, and guarantees of the Bank
Credit Agreement.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law,
including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement
under the Uniform Commercial Code, or equivalent statutes, of any jurisdiction.
"Marketing Affiliate" means any Person which engages in no activity other
than the registration, holding, maintenance or protection of trademarks and the
licensing thereof.
"Net Income" means, with respect to any specified Person, the net income,
loss, of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however:
(1) any gain, but not loss, together with any related provision for taxes on
such gain (but not loss), realized in connection with: (a) any Asset Sale;
or (b) the disposition of any securities by such Person or any of its
Restricted Subsidiaries or the extinguishment of any Indebtedness of such
Person or any of its Restricted Subsidiaries; and
(2) any extraordinary gain (but not loss), together with any related provision
for taxes on such extraordinary gain (but not loss).
"Net Proceeds" means (a) with respect to any Asset Sale, the proceeds
thereof in the form of cash or Cash Equivalents including payments in respect
of deferred payment obligations or escrowed funds, but only when received in
the form of, or stock or other assets when disposed for, cash or Cash
Equivalents (except to the extent that such obligations are financed or sold
with recourse to Tritel PCS or any Restricted Subsidiary), net of (1) brokerage
commissions and other fees and expenses (including fees and expenses of legal
counsel and investment banks) related to such Asset Sale, (2) provisions for
all taxes payable as a result of such Asset Sale, (3) payments made to retire
Indebtedness where payment of such Indebtedness is secured by the assets or
properties the subject of such Asset Sale, (4) amounts required to be paid to
any Person, other than Tritel PCS or any Restricted Subsidiary, owning a
beneficial interest in the assets subject to the Asset Sale and (5) appropriate
amounts to be provided by Tritel PCS or any Restricted Subsidiary, as the case
may be, as a reserve required in accordance with GAAP against any liabilities
associated with such Asset Sale and retained by Tritel PCS or any Restricted
Subsidiary, as the case may be, after such Asset Sale, including, without
limitation, pension and other post-employment benefit liabilities, liabilities
related
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to environmental matters and liabilities under any indemnification obligations
associated with such Asset Sale and (b) with respect to any capital
contribution or issuance or sale of Capital Stock as referred to under the
"Restricted Payments" covenant, the proceeds of such capital contribution,
issuance or sale in the form of cash or Cash Equivalents, including payments in
respect of deferred payment obligations when received in the form of, or stock
or other assets when disposed for, cash or Cash Equivalents, except to the
extent that such obligations are financed or sold with recourse to Tritel PCS
or any Restricted Subsidiary, net of attorney's fees, accountant's fees and
brokerage, consultation, underwriting and other fees and expenses actually
incurred in connection with such capital contribution, issuance or sale and net
of taxes paid or payable as a result thereof.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Parent Guarantee" means a guarantee of the notes by the Parent Guarantor
in accordance with the provisions of the indenture.
"Parent Guarantor" means Tritel, Inc. and any successors or assigns
permitted under the indenture.
"Permitted Business" means (a) the delivery or distribution of
telecommunications, voice, data or video services or (b) any business or
activity reasonably related or ancillary thereto, including, without
limitation, any business conducted by Tritel PCS or any Restricted Subsidiary
on the Issue Date and the acquisition, holding or exploitation of any license
relating to the delivery of the services described in clause (a) of this
definition.
"Permitted Holders" means:
(1) each of AT&T, TeleCorp PCS, Triton PCS, the institutional equity investors
that purchased Series C Preferred Stock of Tritel, Inc. on January 7, 1999
and any of their respective Affiliates and the respective successors, by
merger, consolidation, transfer or otherwise, to all or substantially all
of the respective businesses and assets of any of the foregoing;
(2) William M. Mounger, II, E.B. Martin, Jr. and Jerry M. Sullivan, Jr.; the
spouse, descendants and heirs of any of the foregoing persons; any trust
existing solely for the benefit of one or more of the foregoing persons;
the estate or any executor, administrator, conservator or other legal
representative of one or more of the foregoing persons; and any
corporation, limited partnership, limited liability company or similar
entity, all of the Voting Stock of which is owned by one or more of the
foregoing persons; and
(3) any "person" or "group," as such terms are used in Sections 13(d) and 14(d)
of the Exchange Act, controlled by one or more of the persons identified
in clauses (1) or (2) above.
"Permitted Investments" means:
(1) Investments in Cash Equivalents;
(2) Investments in prepaid expenses, negotiable instruments held for collection
and lease, utility and workers' compensation, performance and other
similar deposits;
(3) loans and advances to employees made in the ordinary course of business;
(4) bonds, notes, debentures or other securities received as a result of Asset
Sales permitted under the covenant "-- Repurchase at the Option of Holders
-- Asset Sales;"
(5) Investments by Tritel PCS or any Restricted Subsidiary in another Person,
if as a result of such Investment (a) such other Person becomes a
Restricted Subsidiary or (b) such other Person is merged or consolidated
with or into, or transfers or conveys all or substantially all of its
assets to, Tritel PCS or a Restricted Subsidiary;
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(6) Investments by Tritel PCS or any of the Restricted Subsidiaries in any one
of the other of them; and
(7) Investments the sum of which does not exceed $7.5 million at any one time
outstanding.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company or government or other entity.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" means any Subsidiary other than an Unrestricted
Subsidiary.
"Significant Subsidiary" means any Subsidiary that would be a "significant
subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act, as such Regulation is in effect on the date
hereof.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations
to repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Subordinated Indebtedness" means Indebtedness of Tritel PCS that is
subordinated in right of payment to the Notes.
"Subsidiary" means, with respect to any specified Person:
(1) any corporation, association or other business entity of which more than
50% of the total voting power of shares of Capital Stock entitled, without
regard to the occurrence of any contingency, to vote in the election of
directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by Tritel, Inc. and/or one or more
other subsidiaries of Tritel, Inc.; and
(2) any partnership (a) the sole general partner or the managing general
partner of which is Tritel, Inc. and/or one or more other subsidiaries of
Tritel, Inc. or (b) the only general partners of which are Tritel, Inc.
and/or one or more other subsidiaries of Tritel, Inc..
"Subsidiary Guarantee" means a guarantee of the Notes by a Restricted
Subsidiary in accordance with the provisions of the indenture.
"Subsidiary Guarantor" means any Restricted Subsidiary that issues a
Subsidiary Guarantee.
"Telecommunications Business" means (a) the delivery or distribution of
telecommunications, voice, data or video services or (b) any business or
activity reasonably related or ancillary thereto, including, without
limitation, any business conducted by Tritel PCS or any Restricted Subsidiary
on the Closing Date and the acquisition, holding or exploitation of any license
relating to the delivery of the services described in clause (a) of this
definition.
"Telecommunications Indebtedness" means any credit facility entered into
with any vendor or supplier, or any financial institution acting on behalf of
such a vendor or supplier, so long as the Indebtedness thereunder is incurred
solely for the purpose of (A) financing the cost, including the cost of design,
development, site acquisition, construction, integration, handset manufacture
or acquisition or microwave relocation, of wireless telecommunications networks
or systems or for which Tritel PCS or any Restricted Subsidiary has obtained
the applicable licenses or authorization to utilize the radio frequencies
necessary for the operation of such networks or systems, (B) acquiring the
Capital Stock of an entity engaged in the Telecommunications Business and (C)
paying fees and expenses incurred in connection therewith.
"Total Consolidated Indebtedness" means at any date of determination, an
amount equal to (a) the accreted value of all Indebtedness, in the case of any
Indebtedness issued with original issue discount, plus (b) the principal amount
of all Indebtedness, in the case of any other Indebtedness, of Tritel PCS and
the Restricted Subsidiaries outstanding as of the date of determination.
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"Total Invested Capital" means, at any time of determination, the sum of,
without duplication, (a) $271.5 million, the total amount of equity contributed
to Tritel, Inc. as of the Issue Date, plus (b) irrevocable binding commitments
to purchase Capital Stock, other than Disqualified Stock, of Tritel, Inc.
existing as of the Issue Date, plus (c) the aggregate Net Proceeds received by
Tritel PCS from capital contributions or the issuance or sale of Capital Stock,
other than Disqualified Stock but including Capital Stock issued upon the
conversion of convertible Indebtedness or from the exercise of options,
warrants or rights to purchase Capital Stock (other than Disqualified Stock)
subsequent to the Issue Date, other than to a Restricted Subsidiary. However,
such aggregate net proceeds received pursuant to this clause (c) shall exclude
any amounts included as commitments to purchase Capital Stock in the preceding
clause (b), plus (d) the aggregate Net Proceeds received by Tritel PCS or any
Restricted Subsidiary from the sale, disposition or repayment of any Investment
made after the Issue Date and constituting a Restricted Payment in an amount
equal to the lesser of (x) the return of capital with respect to such
Investment and (y) the initial amount of such Investment, in either case, less
the cost of the disposition of such Investment, plus (e) an amount equal to the
consolidated net Investment that Tritel PCS and/or any of the Restricted
Subsidiaries has in any Subsidiary that was designated as an Unrestricted
Subsidiary after the Issue Date and redesignated as a Restricted Subsidiary in
accordance with the covenant described under "-- Certain Covenants --
Unrestricted Subsidiaries," plus (f) Total Consolidated Indebtedness minus (g)
the aggregate amount of all Restricted Payments declared or made on or after
the Issue Date.
"Transaction Date" means, with respect to the incurrence of any
Indebtedness by Tritel PCS or any of its Restricted Subsidiaries, the date such
Indebtedness is to be incurred and, with respect to any Restricted Payment, the
date such Restricted Payment is to be made.
"Unrestricted Subsidiary" means (a) any Subsidiary that is designated by
the Board of Directors of Tritel PCS as an Unrestricted Subsidiary in
accordance with the "Unrestricted Subsidiaries" covenant and (b) any Subsidiary
of an Unrestricted Subsidiary.
"Voting Stock" of any Person as of any date means the Capital Stock of
such Person that is at the time entitled to vote in the election of the Board
of Directors of such Person.
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DESCRIPTION OF CAPITAL STOCK
The following summary of certain provisions of the capital stock of
Tritel, Inc. does not purport to be complete and is subject to, and qualified
in its entirety by, the provisions of the Restated Certificate of Incorporation
of Tritel, Inc., dated January 4, 1999 (the "Restated Certificate of
Incorporation") and by the provisions of applicable law.
GENERAL
The authorized capital stock of Tritel, Inc., as set forth in the Restated
Certificate of Incorporation, is 4,540,009, which consists of the following:
o 1,500,000 shares of preferred stock, par value $.01 per share (the
"Preferred Stock"), including
o 200,000 shares designated "Series A Convertible Preferred Stock" (the
"Series A Preferred Stock"), 10% redeemable convertible, $1,000 stated
and liquidation value,
o 300,000 shares designated "Series B Convertible Preferred Stock" (the
"Series B Preferred Stock"), 10% cumulative, $1,000 stated and
liquidation value,
o 500,000 shares designated "Series C Convertible Preferred Stock" (the
"Series C Preferred Stock"), 6.5% cumulative convertible, $1,000 stated
and liquidation value, and
o 100,000 shares designated "Series D Convertible Preferred Stock" (the
"Series D Preferred Stock") (collectively, the "Preferred Stock"), 6.5%
cumulative convertible, $1,000 stated and liquidation value, and
o 3,040,009 shares of common stock, par value $.01 per share (the "Common
Stock"), including
o 1,500,000 shares designated "Class A Voting Common Stock" (the "Class A
Common Stock"),
o 1,500,000 shares designated "Class B Non-Voting Common Stock" (the
"Class B Common Stock"),
o 10,000 shares designated "Class C Common Stock" (the "Class C Common
Stock"),
o 30,000 shares designated "Class D Common Stock" (the "Class D Common
Stock") and
o 9 shares designated "Voting Preference Common Stock" (the "Voting
Preference Common Stock") (collectively, the "Common Stock").
SERIES A PREFERRED STOCK
The Series A Preferred Stock, with respect to dividend rights and rights
on liquidation, dissolution or winding up, ranks on a parity basis with the
Series B Preferred Stock, and ranks senior to the Series C Preferred Stock, the
Series D Preferred Stock and the Common Stock. The holders of Series A
Preferred Stock are entitled to receive cumulative quarterly cash dividends at
the annual rate of 10% multiplied by the liquidation preference, which is equal
to $1,000 per share plus declared but unpaid dividends. Tritel, Inc. may elect
to defer payment of any such dividends until the date on which the 42nd
quarterly dividend payment is due, at which time, and not earlier, all deferred
payments must be made. Except as required by law or in certain circumstances,
the holders of the Series A Preferred Stock do not have any voting rights. So
long as AT&T Wireless owns at least two-thirds of the number of shares of
Series A Preferred Stock owned by it on January 7, 1999, it has the exclusive
right, voting separately as a single class, to elect one director of Tritel,
Inc.. The Series A Preferred Stock is redeemable, in whole but not in part, at
the option of Tritel, Inc. on or after January 15, 2009 and at the option of
the holders of the Series A Preferred Stock on or after January 15, 2019. Upon
any liquidation, dissolution or winding up of Tritel, Inc., the holders of the
Series A Preferred Stock are entitled to receive a liquidation preference.
Additionally, on or after January 15, 2007, AT&T Wireless, and qualified
transferees, have the right to convert each share of Series A Preferred Stock
into shares of Class A Common Stock.
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Tritel, Inc. issued 90,668 shares of Series A Preferred Stock with a
stated value of $90.7 million to AT&T Wireless on January 7, 1999.
SERIES B PREFERRED STOCK
The Series B Preferred Stock ranks on a parity basis with the Series A
Preferred Stock and is identical in all respects to the Series A Preferred
Stock, except:
o the Series B Preferred Stock is not convertible into shares of Common
Stock or any other security issued by Tritel, Inc.;
o the Series B Preferred Stock is redeemable at any time at the option of
Tritel, Inc.;
o the Series B Preferred Stock may be issued by Tritel, Inc. pursuant to
an exchange of capital stock; and
o holders of Series B Preferred Stock do not have the right to elect any
directors of Tritel, Inc.
No Series B Preferred Stock has been issued by Tritel, Inc.
SERIES C PREFERRED STOCK
The Series C Preferred Stock (1) ranks junior to the Series A Preferred
Stock and the Series B Preferred Stock with respect to dividend rights and
rights on liquidation, dissolution or winding up, (2) ranks junior to the
Series D Preferred Stock with respect to rights on a statutory liquidation, (3)
ranks on a parity basis with the Series D Preferred Stock with respect to
rights on liquidation, dissolution or winding up, except a statutory
liquidation, (4) ranks on a parity basis with Series D Preferred Stock and
Common Stock with respect to dividend rights, and (5) ranks senior to the
Common Stock and any other series or class of Tritel, Inc.'s common or
preferred stock, now or hereafter authorized, other than Series A Preferred
Stock, Series B Preferred Stock or Series D Preferred Stock, with respect to
rights on liquidation, dissolution and winding up. The holders of Series C
Preferred Stock are entitled to dividends in cash or property when, as and if
declared by the Board of Directors of Tritel, Inc. Upon any liquidation,
dissolution or winding up of Tritel, Inc., the holders of Series C Preferred
Stock are entitled to receive, after payment to any stock ranking senior to the
Series C Preferred Stock, a liquidation preference equal to (1) the quotient of
the aggregate paid-in-capital of all Series C Preferred Stock held by a
stockholder divided by the total number of shares of Series C Preferred Stock
held by that stockholder (the "Invested Amount") plus (2) declared but unpaid
dividends on the Series C Preferred Stock, if any, plus (3) an amount equal to
interest on the Invested Amount at the rate of 6 1/2% per annum, compounded
quarterly. The holders of the Series C Preferred Stock have the right at any
time to convert each share of Series C Preferred Stock, and upon an initial
public offering meeting certain conditions (the "IPO Date"), each share of
Series C Preferred Stock will automatically convert, into shares of Class A
Common Stock of and, under certain circumstances, Class D Common Stock. On all
matters to be submitted to the stockholders of Tritel, Inc., the holders of
Series C Preferred Stock shall have the right to vote on an as-converted basis
as a single class with the holders of the Common Stock. Additionally, the
affirmative vote of the holders of a majority of the Series C Preferred Stock
is required to approve certain matters. The Series C Preferred Stock is not
redeemable.
Tritel, Inc. issued 32,392 shares of Series C Preferred Stock with a
stated value of $32.4 million to Airwave Communications and Digital PCS on
January 7, 1999 in exchange for PCS licenses covering 6.6 million Pops and
$14.2 million in cash. Tritel, Inc. also issued 149,239 shares of Series C
Preferred Stock with a stated value of $149.2 million to institutional
investors on January 7, 1999 in exchange for cash and subscriptions receivable.
Additionally, Tritel, Inc. issued 2,602 shares of Series C Preferred Stock with
a stated value of $2.6 million to Central Alabama Partnership LP on January 7,
1999 in exchange for its net assets.
SERIES D PREFERRED STOCK
The Series D Preferred Stock (1) ranks junior to the Series A Preferred
Stock and the Series B Preferred Stock with respect to dividend rights and
rights on liquidation, dissolution or winding up,
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(2) ranks senior to the Series C Preferred Stock with respect to rights on a
statutory liquidation, (3) ranks on a parity basis with Series C Preferred
Stock with respect to rights on liquidation, dissolution and winding up, except
a statutory liquidation, (4) ranks on a parity basis with Series C Preferred
Stock and Common Stock with respect to dividend rights, and (5) ranks senior to
the Common Stock and any other series or class of Tritel, Inc.'s common or
preferred stock, now or hereafter authorized, other than Series A Preferred
Stock, Series B Preferred Stock or Series C Preferred Stock, with respect to
rights on liquidation, dissolution and winding up. Subject to the preceding
sentence, the Series D Preferred Stock is identical in all respects to the
Series C Preferred Stock, except:
o the Series D Preferred Stock is convertible into an equivalent number of
shares of Series C Preferred Stock at any time;
o the liquidation preference for Series D Preferred Stock equals $1,000
plus declared but unpaid dividends plus an amount equal to interest on
$1,000 at the rate of 61/2% per annum, compounded quarterly, from the
date of issuance of such share to and including the date of the
calculation;
o the holders of Series D Preferred Stock do not have any voting rights,
other than those required by law or in certain circumstances; and
o shares of Series D Preferred Stock are not automatically convertible
upon the IPO Date, but will be renamed as "Senior Common Stock" on such
date.
Tritel, Inc. issued 46,374 shares of Series D Preferred Stock with a
stated value of $46.4 million to AT&T Wireless on January 7, 1999.
COMMON STOCK
The Common Stock is divided into two groups, the "Non-Tracked Common
Stock," which is comprised of the Class A Common Stock, the Class B Common
Stock and the Voting Preference Common Stock, and the "Tracked Common Stock,"
which is comprised of the Class C Common Stock and Class D Common Stock. Each
share of Common Stock is identical, and entitles the holder thereof to the same
rights, powers and privileges of stockholders under Delaware law, except:
o dividends on the Tracked Common Stock track the assets and liabilities
of Tritel C/F Holding Corp., a subsidiary of Tritel, Inc.;
o rights on liquidation, dissolution or winding up of Tritel, Inc. of the
Tracked Common Stock track the assets and liabilities of Tritel C/F
Holding Corp.;
o the Class A Common Stock, together with the Series C Preferred Stock,
has 4,990,000 votes, the Class B Common Stock has no votes, Class C
Common Stock has no votes, the Class D Common Stock has no votes and the
Voting Preference Common Stock has 5,010,000 votes, except that in any
matter requiring a separate class vote of any class of Common Stock or a
separate vote of two or more classes of Common Stock voting together as
a single class, for the purposes of such a class vote, each share of
Common Stock of such classes will be entitled to one vote per share;
o in the event the FCC indicates that the Class A Common Stock and Voting
Preference Stock (1) may be voted as a single class on all matters, (2)
may be treated as a single class for all quorum requirements and (3) may
have one vote per share, then, absent action by the Board of Directors
and upon an affirmative vote of 662/3% or more of the Class A Common
Stock, Tritel, Inc. must seek consent from the FCC to permit the Class A
Common Stock and Voting Preference Common Stock to vote and act as a
single class in the manner described above;
o the holders of shares of Class B Common Stock shall be entitled to vote
as a separate class on any amendment, repeal or modification of any
provision of the Restated Certificate of Incorporation that adversely
affects the powers, preferences or special rights of the holders of the
Class B Common Stock;
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o each share of Class B Common Stock may be converted, at any time at the
holder's option, into one share of Class A Common Stock;
o each share of Class A Common Stock may be converted, at any time at the
holder's option, into one share of Class B Common Stock; and
o in the event the FCC indicates that it will permit the conversion of
Tracked Common Stock into either Class A Common Stock or Class B Common
Stock, then, absent action by the Board of Directors and upon an
affirmative vote of 662/3% or more of the Class A Common Stock, such
conversion will be allowed by Tritel, Inc. at the option of the holders
of the Tracked Common Stock.
Tritel, Inc. issued 35,519 shares of Class A Common Stock, 5,177 shares of
Class C Common Stock and 9 shares of Voting Preference Common Stock to certain
members of its management on January 7, 1999.
LIMITATION ON DIRECTORS' LIABILITIES
The Delaware General Corporation Law authorizes corporations to limit or
eliminate the personal liability of directors to corporations and their
stockholders for monetary damages for breach of directors' fiduciary duty of
care. The duty of care requires that, when acting on behalf of the corporation,
directors must exercise an informed business judgment based on all material
information reasonably available to them. In the absence of the limitations of
personal liability authorized by the Delaware statute, directors could be
accountable to corporations and their stockholders for monetary damages for
conduct that does not satisfy their duty of care. Although the statute does not
change directors' duty of care, it enables corporations to limit available
relief to equitable remedies such as injunction or rescission. The Restated
Certificate of Incorporation limits the liability of Tritel, Inc.'s directors
to Tritel, Inc. or its stockholders to the fullest extent permitted by the
Delaware statute. Specifically, the directors of Tritel, Inc. will not be
personably liable for monetary damages for beach of a director's fiduciary duty
as a director, except for liability (1) for any breach of the director's duty
of loyalty to Tritel, Inc. or its stockholders, (2) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (3) under Section 174 of the Delaware General Corporation Law regarding
liability for any unlawful payment of dividends or unlawful stock purchase or
redemption or (4) for any transaction from which a director derived an improper
personal benefit. The inclusion of this provision in the Restated Certificate
of Incorporation may have the effect of reducing the likelihood of derivative
litigation against directors and may discourage or deter stockholders or
management from bringing a lawsuit against directors for beach of their duty of
care, even though such an action, if successful, might otherwise have benefited
Tritel, Inc. and its stockholders.
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CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
GENERAL
The following is a summary of material United States federal income tax
consequences of the purchase, ownership and disposition of the notes, but does
not purport to be a complete analysis of all potential tax effects. This
summary is based upon the Internal Revenue Code of 1986, as amended (the
"Code"), existing and proposed regulations thereunder, published rulings and
court decisions, all as in effect and existing on the date hereof and all of
which are subject to change at any time, which change may be retroactive. This
summary applies only to those persons who are the initial Holders of notes, who
acquire the notes for cash and who hold notes as capital assets and does not
address the tax consequences to taxpayers who are subject to special rules,
such as financial institutions, tax-exempt organizations, insurance companies
and, except as discussed below under "Foreign Holders," persons who are not
citizens or residents of the United States, domestic corporations or
partnerships, estates that are subject to United States federal income taxation
on income without regard to its source or a trust if a court within the United
States is able to exercise primary supervision of the administration of the
trust and one or more United States persons have the authority to control all
substantial decisions of the trust, or aspects of federal income taxation that
may be relevant to a prospective investor based upon such investor's particular
tax situation. Accordingly, purchasers of notes should consult their own tax
advisors with respect to the particular consequences to them of the purchase,
ownership and disposition of the notes, including the applicability of any
state, local or foreign tax laws to which they may be subject, as well as with
respect to the possible effects of changes in federal and other tax laws.
Tritel PCS has received an opinion from Brown & Wood LLP, counsel to
Tritel PCS, that, based on the assumptions and subject to the qualifications
set forth therein, the information in the following discussion represents their
opinion of the material United States federal income tax consequences of the
purchase, ownership and disposition of the notes by Holders who acquire the
notes in their original issuance, as a capital asset, for a purchase price
equal to the issue price of the notes. The opinion is based on currently
applicable authorities, which are subject to change, and on the facts and
circumstances existing on the date of the opinion. The opinion is not binding
on the Internal Revenue Service or on the courts, and no ruling will be
requested from the Internal Revenue Service on the issues described below.
There can be no assurance that the Internal Revenue Service will not take a
different position concerning the matters discussed below and that such
positions of the Internal Revenue Service would not be sustained.
ORIGINAL ISSUE DISCOUNT
Because the notes are being issued at a discount in excess of a de minimis
amount as defined under Treasury Regulations from their "stated redemption
price at maturity," the notes will have original issue discount ("OID") for
federal income tax purposes. For federal income tax purposes, OID on a note
will be the excess of the stated redemption price at maturity of the note over
its issue price. The issue price of the notes will be the first price to the
public, excluding bond houses, brokers or similar persons or organizations
acting in the capacity of underwriters, placement agents or wholesalers, at
which a substantial amount of the notes is sold. For purposes of this
discussion, it is assumed that all initial Holders will purchase their notes at
the issue price. The stated redemption price at maturity of a note will be the
sum of all payments to be made on such note, including all stated interest
payments, other than payments of "qualified stated interest." Qualified stated
interest is stated interest that is unconditionally payable in cash or
property, other than debt instruments of the issuer, at least annually at a
single fixed rate. Because there will be no required payment of interest on the
notes until November 15, 2004, none of the interest payments on the notes,
under the stated payment schedule, will constitute qualified stated interest.
Therefore, each note will bear OID in an amount equal to the excess of (1) the
sum of its principal amount and all stated interest payments over (2) its issue
price.
A Holder will be required to include OID in income periodically over the
term of a note as such OID accrues, in accordance with a constant yield method
based on a compounding of interest, before
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<PAGE>
receipt of the cash or other payment attributable to such income, regardless of
the Holder's method of tax accounting, but such Holder will not be required to
include separately in income cash payments received on the notes, even if
denominated as interest, to the extent they do not constitute qualified stated
interest. The amount of OID required to be included in a Holder's income for
any taxable year is the sum of the daily portions of OID with respect to the
note for each day during the taxable year or portion of a taxable year on which
such Holder holds the note. The daily portion is determined by allocating to
each day of an accrual period within a taxable year a pro rate portion of an
amount equal to the adjusted issue price of the note at the beginning of the
accrual period multiplied by the yield to maturity of the note. For purposes of
computing OID, Tritel PCS will use six-month accrual periods that end on the
days in the calendar year corresponding to the maturity date of the notes and
the date six months prior to such maturity date, with the exception of an
initial short accrual period. The adjusted issue price of a note at the
beginning of any accrual period is the issue price of the Note increased by the
amount of OID previously includible in the gross income of the Holder, and
decreased by any payments previously made on the note. The yield to maturity is
the discount rate that, when used in computing the present value of all
payments of principal and interest to be made on the note, produces an amount
equal to the issue price of the note. Under these rules, under the stated
payment schedule, Holders of notes will have to include in gross income
increasingly greater amounts of OID in each successive accrual period. A
Holder's tax basis in a note will be increased by the amount of OID includible
in the Holder's income under the rules discussed above and decreased by the
amount of any payment, including payments of stated interest, with respect to
the note.
Tritel PCS has determined that its obligations to pay Liquidated Damages
constitutes a remote and incidental contingency within the meaning of the OID
rules. Accordingly, Tritel PCS does not intend to treat the possibility of
payment of Liquidated Damages as affecting the yield to maturity of a note. In
the event that Liquidated Damages are actually paid, there will be adverse tax
consequences to the Holders of a note. Holders should consult their own tax
advisors as to the tax consequences to them of payment by Tritel PCS of
Liquidated Damages, if any.
EFFECT OF MANDATORY AND OPTIONAL REDEMPTION ON OID
Tritel PCS may redeem the notes, in whole or in part, at any time on or
after May 15, 2004, at redemption prices specified elsewhere herein plus
accrued interest to the date of redemption. The Treasury Regulations contain
rules for determining the "maturity date" and the stated redemption price at
maturity of an instrument that may be redeemed prior to its stated maturity
date at the option of the issuer. Under the OID rules, solely for purposes of
the accrual of OID, it is assumed that the issuer will exercise any option to
redeem a debt instrument if such exercise will lower the yield-to-maturity of
the debt instrument. Tritel PCS has determined that the exercise of its right
to redeem the notes prior to their stated maturity under these rules would not
lower the yield-to-maturity of the notes. On these facts, Tritel PCS would not
be presumed to exercise its right to redeem the notes, prior to their stated
maturity under these rules.
Prior to May 15, 2002, Tritel PCS at its option may redeem up to 35% of
the aggregate principal amount at maturity of the notes with the proceeds of
one or more equity offerings at the redemption price specified elsewhere
herein; provided that not less than 65% of the aggregate principal amount at
maturity of the notes would remain outstanding after such redemption. In the
event of a Change of Control, as defined in the indenture, each holder of notes
shall have the right to require that Tritel PCS purchase such holder's notes,
in whole or in part in integral multiples of $1,000, at a purchase price in
cash in an amount equal to 101% of the Accreted Value of the notes, plus, in
each case, accrued interest, if any, to the date of purchase. Such redemption
rights and obligations will be treated by Tritel PCS as not affecting the
determination of the yield or maturity of the notes. The Treasury Regulations
contain rules for determining the "maturity date" and the stated redemption
price at maturity of an instrument that may be redeemed prior to its stated
maturity date upon the occurrence of one or more contingencies. Under such
Treasury Regulations, if the timing and amounts of the payments that comprise
each payment schedule are known as of the issue date, the "maturity date" and
stated redemption price at maturity of such an instrument are determined by
assuming that payments will be made according to the instrument's stated
payment schedule, unless based upon all
145
<PAGE>
the facts and circumstances as of the issue date, it is more likely than not
that the instrument's stated payment schedule will not occur. Tritel PCS has
determined that the stated maturity date and stated payment schedule of the
notes is more likely than not to occur based on the facts and circumstances
known as of the issue date. On these facts, under these regulations, the
"maturity date" and stated redemption price at maturity of the notes would be
determined on the basis of the stated maturity and stated payment schedule.
If, notwithstanding the foregoing, it is presumed that Tritel PCS will
exercise its option to redeem, then the maturity date of the notes for the
purpose of calculating yield to maturity would be the exercise date of such
call option and the stated redemption price at maturity for each Note would
equal the amount payable upon such exercise. If subsequently the call option is
not exercised then, for purposes of the OID rules, the issuer would be treated
as having issued on the presumed exercise date of the call option a new debt
instrument in exchange for the existing instrument. The new debt instrument
deemed issued would have an issue price equal to the call price. As a result,
another OID computation would have to be made with respect to the
constructively issued new debt instrument.
SALE, EXCHANGE AND REDEMPTION OF NOTES
A sale, exchange or redemption of notes will result in taxable gain or
loss equal to the difference between the amount of cash or other property
received and the Holder's adjusted tax basis in the note. A Holder's adjusted
tax basis for determining gain or loss on the sale or other disposition of a
note will initially equal the cost of the note to such Holder and will be
increased by any amounts included in income as OID, and decreased by the amount
of any cash payments received by such Holder regardless of whether such
payments are denominated as principal or interest. Gain or loss upon a sale,
exchange, or redemption of a note will be capital gain or loss if the note is
held as a capital asset, and will be long term capital gain or loss if the note
has been held by the Holder for more than one year. The deductibility of
capital losses is subject to limitations. Prospective investors should consult
their own tax advisors concerning these tax law provisions.
EXCHANGE OF OUTSTANDING NOTES FOR REGISTERED NOTES
The exchange of the outstanding notes for registered notes pursuant to the
exchange offer will not be treated as an exchange for federal income tax
purposes because the registered notes will not differ materially in kind or
extent from the outstanding notes and because the exchange will occur by
operation of the original terms of the outstanding notes. As a result, Holders
who exchange their outstanding notes for registered notes will not recognize
any income, gain or loss for federal income tax purposes. A Holder will have
the same adjusted basis and holding period in the registered notes immediately
after the exchange as it had in the outstanding notes immediately before the
exchange.
FOREIGN HOLDERS
The following discussion is a summary of certain United States federal
income tax consequences to a Foreign Person that holds a note. The term
"Foreign Person" means a nonresident alien individual or foreign corporation,
but only if the income or gain on the note is not "effectively connected with
the conduct of a trade or business within the United States," in which case,
and subject to an applicable treaty, the nonresident alien individual or
foreign corporation will be subject to tax on such income or gain in
essentially the same manner as a United States citizen or resident or a
domestic corporation, as discussed above, and in the case of a foreign
corporation, may also be subject to the branch profits tax.
Under the "portfolio interest" exception to the general rules for the
withholding of tax on interest and original issue discount paid to a Foreign
Person, a Foreign Person will not be subject to United States tax, or to
withholding, on interest or OID on a note, provided that (a) the Foreign Person
does not actually or constructively own 10% or more of the total combined
voting power of all classes of stock of Tritel PCS entitled to vote and (b)
Tritel PCS, its paying agent or the person who would otherwise be required to
withhold tax receives either (1) a statement (an "Owner's Statement")
146
<PAGE>
on the applicable Internal Revenue Service's Form W-8 or substantially similar
form signed under penalties of perjury by the beneficial owner of the note in
which the owner certifies that the owner is not a United States person and
which provides the owner's name and address, or (2) a statement signed under
penalties of perjury by a financial institution holding the note on behalf of
the beneficial owners, together with a copy of the Owner's Statement.
Regulations which will be effective for payments made after December 31, 2000
would retain these procedures for certifying that a Holder is a Foreign Person
and would add several alternative certification procedures. A Foreign Person
who does not qualify for the "portfolio interest" exception would be subject to
United States withholding tax at a flat rate of 30%, or a lower applicable
treaty rate, on interest payments and payments, including proceeds from a sale,
exchange or retirement, attributable to OID on the notes.
Gain recognized by a Foreign Person upon the redemption, sale or exchange
of a note, including any gain representing accrued market discount, will not be
subject to United States tax unless the Foreign Person is an individual present
in the United States for 183 days or more during the taxable year in which the
note is redeemed, sold or exchanged, and certain other requirements are met, in
which case the Foreign Person will be subject to United States tax at a flat
rate of 30%, unless exempt by applicable treaty.
Federal Estate and Gift Tax
A note beneficially owned by an individual who at the time of death is not
a domiciliary of the United States will not be subject to United States federal
estate tax as a result of such individual's death, provided that such
individual does not actually or constructively own 10% or more of the total
combined voting power of all classes of stock of Tritel PCS entitled to vote
within the meaning of Section 871(h)(3) of the Code and provided that the
interest payments with respect to such note would not have been, if received at
the time of such individual's death, effectively connected with the conduct of
a United States trade or business by such individual.
Any individual will not be subject to United States federal gift tax on a
transfer of notes, unless such person is a domiciliary of the United States.
BACKUP WITHHOLDING
A Holder may be subject, under certain circumstances, to backup
withholding at a 31% rate with respect to payments received with respect to the
notes. This withholding applies if the Holder:
o fails to furnish his or her social security or other taxpayer
identification number,
o furnishes an incorrect taxpayer identification number,
o is notified by the Internal Revenue Service that he or she has failed to
report properly payments of interest and dividends and the Internal
Revenue Service has notified Tritel that he or she is subject to backup
withholding, or
o fails, under certain circumstances, to provide a certified statement,
signed under penalty of perjury, that the taxpayer identification number
provided is his or her correct number and that he or she is not subject
to backup withholding.
Any amount withheld from a payment to a Holder under the backup
withholding rules is allowable as a credit against such Holder's federal income
tax liability, provided that the required information is furnished to the
Internal Revenue Service. Certain Holders, including, among others,
corporations and foreign individuals who comply with certain certification
requirements described above under "Foreign Holders," are not subject to backup
withholding. Holders should consult their tax advisors as to their
qualification for exemption from backup withholding and the procedure for
obtaining such an exemption.
On October 6, 1997, the Treasury Department issued new regulations (the
"New Regulations") which make certain modifications to the withholding, backup
withholding and information reporting rules described above. The New
Regulations attempt to unify certification requirements and modify
147
<PAGE>
reliance standards. The New Regulations will generally be effective for
payments made after December 31, 2000, subject to certain transition rules.
Prospective investors are urged to consult their own tax advisors regarding the
New Regulations.
LIMITATION ON TRITEL PCS'S INTEREST DEDUCTIONS
The notes have a maturity date more than five years from the date of
issue, have a yield to maturity more than five percentage points higher than
the applicable Federal rate and will bear "significant OID." Thus, the notes
will be treated as "applicable high yield discount obligations" under the rules
of Sections 163(e) and 163(i) of the Code. Thus, Tritel PCS will not be able to
deduct any OID accruing with respect thereto until such interest is actually
paid and a portion of such OID will be disallowed altogether. To the extent
that the non-deductible portion of OID would have been treated as a dividend if
it had been distributed with respect to Tritel PCS's stock, it will be treated
as a dividend to corporate Holders of the notes for purposes of the rules
relating to the dividends received deduction. Except as described above,
treatment of the notes as applicable high yield discount obligations will not
affect the reporting of the OID as income by the Holders of the notes.
OTHER TAX CONSEQUENCES
In addition to the federal income tax considerations described above,
prospective purchasers of the notes should consider potential state, local,
income, franchise, personal property and other taxation in any state or
locality and the tax effect of ownership, sale, exchange, or retirement of the
notes in any state or locality. Prospective purchasers of the notes are advised
to consult their own tax advisors with respect to any state or local income,
franchise, personal property or other tax consequences arising out of their
ownership of the notes.
THE FOREGOING DISCUSSION IS FOR GENERAL INFORMATION AND IS NOT TAX ADVICE.
ACCORDINGLY, EACH PROSPECTIVE PURCHASER OF THE NOTES SHOULD CONSULT HIS OWN TAX
ADVISOR AS TO THE PARTICULAR TAX CONSEQUENCES TO HIM OF THE NOTES, INCLUDING
THE APPLICABILITY AND EFFECT OF ANY STATE, LOCAL, OR FOREIGN INCOME TAX LAWS
AND ANY RECENT OR PROSPECTIVE CHANGES IN APPLICABLE TAX LAWS.
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<PAGE>
PLAN OF DISTRIBUTION
Each broker-dealer that receives registered notes for its own account
pursuant to the exchange offer, where its outstanding notes were acquired by
such broker-dealer as a result of market-making activities or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such registered notes. This prospectus, as it may be amended
or supplemented from time to time, may be used by a broker-dealer in connection
with resales of registered notes received in exchange for outstanding notes
where such outstanding notes were acquired as a result of market making or
other trading activities. Until , 1999 (90 days after the commencement of
the exchange offer), all dealers effecting transactions in the registered notes
may be required to deliver a prospectus.
Tritel PCS will not receive any proceeds from any sales of the registered
notes by participating broker-dealers. Registered notes received by
participating broker-dealers for their own account pursuant to the exchange
offer may be sold from time to time in one or more transactions in the
over-the-counter market, in negotiated transactions, through the writing of
options on the registered notes or a combination of such methods of resale, at
market prices prevailing at the time of resale, at prices related to such
prevailing market prices or negotiated prices. Any such resale may be made
directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such
participating broker-dealer that resells the registered notes, and any
commissions or concessions received by any such persons may be deemed to be
underwriting compensation under the Securities Act. The letter of transmittal
for the exchange offer states that, by acknowledging that it will deliver, and
by delivering, a prospectus, a participating broker-dealer will not be deemed
to admit that it is an "underwriter" within the meaning of the Securities Act.
For a period of 180 days after the expiration date, or until all
broker-dealers who exchange outstanding notes which were acquired as a result
of market-making activities for registered notes have sold all registered notes
held by them, we will promptly send additional copies of this prospectus and
any amendment or supplement to this prospectus to any broker-dealer that
requests such documents in the letter of transmittal. Tritel PCS has agreed to
pay all expenses incident to the exchange offer. Tritel PCS will indemnify the
holders of the registered notes, including any broker-dealers, against certain
liabilities, including liabilities under the Securities Act.
The registered notes will not be listed on any stock exchange. The notes
are designated for trading in The Portal Market.
LEGAL MATTERS
The validity of the registered notes will be passed upon for Tritel PCS by
Brown & Wood LLP, New York, New York. Certain other legal matters will be
passed upon for Tritel PCS and the guarantors of the notes by James H. Neeld,
IV, its general counsel, and by Tritel PCS's special FCC counsel, Lukas, Nace,
Gutierrez & Sachs, Washington, D.C.
EXPERTS
The consolidated financial statements of Tritel, Inc. and Predecessor
Companies as of December 31, 1997 and 1998, for each of the years in the
three-year period ended December 31, 1998 and for the period from July 27, 1995
(inception) to December 31, 1998, have been included herein and in the
registration statement in reliance upon the report of KPMG Peat Marwick LLP,
independent certified public accountants, appearing elsewhere herein, and upon
the authority of said firm as experts in accounting and auditing.
149
<PAGE>
TRITEL, INC. AND PREDECESSOR COMPANIES
(DEVELOPMENT STAGE COMPANIES)
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Independent Auditors' Report ........................................................ F-2
Consolidated Balance Sheets as of December 31, 1997 and 1998 and June 30, 1999
(unaudited) ........................................................................ F-3
Consolidated Statements of Operations for the years ended December 31, 1996, 1997 and
1998, the period from July 27, 1995 (inception) to December 31, 1998, the six month
periods ended June 30, 1998 and 1999 (unaudited) and the period from July 27, 1995
(inception) to June 30, 1999 (unaudited) ........................................... F-4
Consolidated Statements of Members' and Stockholders' Equity for the period from
July 27, 1995 (inception) to December 31, 1995, the years ended December 31, 1996,
1997 and 1998 and the six-month period ended June 30, 1999 (unaudited) ............. F-5
Consolidated Statements of Cash Flows for the years ended December 31, 1996, 1997 and
1998, the period from July 27, 1995 (inception) to December 31, 1998, the six month
period ended June 30, 1999 (unaudited), the period from July 27, 1995 (inception) to
June 30, 1999 (unaudited) .......................................................... F-6
Notes to Consolidated Financial Statements .......................................... F-9
</TABLE>
In accordance with Securities and Exchange Commission Staff Accounting
Bulletin 53, the financial statements of Tritel, Inc. and Predecessor Company
are included herein. Tritel PCS, Inc. is a wholly-owned subsidiary of Tritel,
Inc. and Tritel, Inc. fully and unconditionally guarantees the Senior
Subordinated Discount Notes issued by Tritel PCS, Inc. Separate financial
statements of Tritel PCS, Inc. and Subsidiary Guarantors are not included.
However, condensed financial data for Tritel PCS, Inc. and Subsidiary
Guarantors is included in Note 17 to the financial statements. The Subsidiary
Guarantors are wholly-owned subsidiaries of Tritel, PCS, Inc. and their
guarantees are on a full, unconditional, joint and several basis with other
guarantor subsidiaries.
F-1
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Tritel, Inc.:
We have audited the accompanying consolidated balance sheets of Tritel, Inc.
and Predecessor Companies (development stage companies) (the Companies) as of
December 31, 1997 and 1998, and the related consolidated statements of
operations, members' and stockholders' equity, and cash flows for each of the
years in the three-year period ended December 31, 1998 and for the period from
July 27, 1995 (inception) to December 31, 1998. These consolidated financial
statements are the responsibility of the Companies' managements. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Tritel, Inc. and Predecessor Companies as of December 31, 1997 and 1998, and
the results of their operations and their cash flows for each of the years in
the three-year period ended December 31, 1998 and for the period from July 27,
1995 (inception) to December 31, 1998, in conformity with generally accepted
accounting principles.
Jackson, Mississippi KPMG Peat Marwick LLP
February 16, 1999
F-2
<PAGE>
TRITEL, INC. AND PREDECESSOR COMPANIES
(DEVELOPMENT STAGE COMPANIES)
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1997 AND 1998 AND JUNE 30, 1999 (UNAUDITED)
(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------- JUNE 30,
1997 1998 1999
ASSETS ----------- ------------ ------------
(UNAUDITED)
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents ........................................ $ 1,763 846 390,305
Restricted cash .................................................. -- -- 2,796
Due from affiliates .............................................. 275 241 1,508
Prepaid expenses and other current assets ........................ 10 719 1,123
-------- --- -------
Total current assets ............................................ 2,048 1,806 395,732
Restricted cash ................................................... -- -- 5,161
Property and equipment, net ....................................... 13 13,816 60,686
FCC licensing costs ............................................... 99,425 71,466 158,893
Intangible assets, net of amortization of $1,753 in 1999 .......... -- -- 38,857
Deferred charges, net of amortization of $347 in 1997, $348 in 1998
and $775 in 1999 ................................................. 1,027 1,933 29,938
Note receivable ................................................... -- -- 7,550
Other assets ...................................................... -- -- 228
-------- ------ -------
Total assets .................................................... $102,513 89,021 697,045
======== ====== =======
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Notes payable .................................................... $ 5,000 22,405 --
Current maturities of long-term debt ............................. -- -- 443
Accounts payable, accrued expenses and interest .................. 3,425 10,506 7,345
-------- ------ -------
Total current liabilities ....................................... 8,425 32,911 7,788
-------- ------ -------
Non-current liabilities:
Long-term debt ................................................... 77,200 51,599 444,643
Note payable to related party .................................... 5,700 6,270 --
Accrued interest and dividends payable ........................... 2,426 224 4,347
Deferred credit -- vendor discount ............................... -- -- 15,000
Deferred income taxes ............................................ -- -- 28,064
-------- ------ -------
Total non-current liabilities ................................... 85,326 58,093 492,054
-------- ------ -------
Total liabilities ............................................... 93,751 91,004 499,842
-------- ------ -------
Series A 10% redeemable convertible preferred stock ............... -- -- 69,109
Stockholders' equity:
Preferred stock, authorized 1,500,000 shares:
Series C, outstanding 184,233 shares at June 30, 1999 ........... -- -- 174,658
Subscription receivable for Series C preferred stock ............ -- -- (49,746)
-------- ------ -------
Total Series C preferred stock ................................. -- -- 124,912
-------- ------ -------
Series D, outstanding 46,374 shares at June 30, 1999 ............ -- -- 35,096
-------- ------ -------
Net preferred stock ............................................ -- -- 160,008
-------- ------ -------
Common stock, 30 shares issued and outstanding at December 31,
1998 ............................................................. -- -- --
Common stock issued and outstanding at June 30, 1999 --
Class A Voting, 35,519 shares; Class C Non-Voting, 5,177 shares;
and Voting Preference, 9 shares ................................. -- -- --
Contributed capital -- Predecessor Companies ...................... 13,497 13,497 --
Deficit accumulated during the development stage .................. (4,735) (15,480) (31,914)
-------- ------- -------
Total stockholders' equity (deficit) ........................... 8,762 (1,983) 128,094
-------- ------- -------
Total liabilities and stockholders' equity ..................... $102,513 89,021 697,045
======== ======= =======
</TABLE>
See accompanying notes to consolidated financial statements.
F-3
<PAGE>
TRITEL, INC. AND PREDECESSOR COMPANIES
(DEVELOPMENT STAGE COMPANIES)
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1997 AND 1998,
THE PERIOD FROM JULY 27, 1995 (INCEPTION) TO DECEMBER 31, 1998,
THE SIX MONTH PERIODS ENDED JUNE 30, 1998 AND 1999 (UNAUDITED)
AND THE PERIOD FROM JULY 27, 1995 (INCEPTION) TO JUNE 30, 1999 (UNAUDITED)
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
-----------------------------------
1996 1997 1998
----------- ----------- -----------
<S> <C> <C> <C>
Revenues ............................ $ -- -- --
-------- -- --
Operating expenses:
Plant expenses ..................... 4 104 1,939
General and administrative ......... 1,481 3,123 4,947
Sales and marketing ................ 5 28 452
Depreciation and amortization ...... 2 20 348
-------- ----- -----
1,492 3,275 7,686
-------- ----- -----
Operating loss ...................... (1,492) (3,275) (7,686)
Interest income ..................... 31 121 77
Financing cost ...................... -- -- --
Interest expense .................... -- -- (722)
-------- ------ ------
Loss before extraordinary item
and income taxes ................ (1,461) (3,154) (8,331)
Extraordinary item -
Loss on return of spectrum ......... -- -- (2,414)
-------- ------ ------
Loss before income taxes ......... (1,461) (3,154) (10,745)
Income tax benefit .................. -- -- --
-------- ------ -------
Net loss ......................... $ (1,461) (3,154) (10,745)
======== ====== =======
<CAPTION>
CUMULATIVE
AMOUNTS
SINCE SIX-MONTHS CUMULATIVE
INCEPTION ENDED AMOUNTS
AT JUNE 30, SINCE INCEPTION,
DECEMBER 31, ------------------------ AT JUNE 30,
1998 1998 1999 1999
-------------- ----------- ------------ -----------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Revenues ............................ -- -- -- --
-- -- -- --
Operating expenses:
Plant expenses ..................... 2,047 111 3,946 5,993
General and administrative ......... 9,672 1,616 7,204 16,876
Sales and marketing ................ 485 20 2,724 3,209
Depreciation and amortization ...... 370 13 2,398 2,768
----- ----- ----- ------
12,574 1,760 16,272 28,846
------ ----- ------ ------
Operating loss ...................... (12,574) (1,760) (16,272) (28,846)
Interest income ..................... 230 27 5,332 5,562
Financing cost ...................... -- -- (2,230) (2,230)
Interest expense .................... (722) -- (5,104) (5,826)
------- ------ ------- -------
Loss before extraordinary item
and income taxes ................ (13,066) (1,733) (18,274) (31,340)
Extraordinary item -
Loss on return of spectrum ......... (2,414) -- -- (2,414)
------- ------ ------- -------
Loss before income taxes ......... (15,480) (1,733) (18,274) (33,754)
Income tax benefit .................. -- -- 6,036 6,036
------- ------ ------- -------
Net loss ......................... (15,480) (1,733) (12,238) (27,718)
======= ====== ======= =======
</TABLE>
See accompanying notes to consolidated financial statements.
F-4
<PAGE>
TRITEL, INC. AND PREDECESSOR COMPANIES
(DEVELOPMENT STAGE COMPANIES)
CONSOLIDATED STATEMENTS OF MEMBERS' AND STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM JULY 27, 1995 (INCEPTION) TO DECEMBER 31, 1995,
THE YEARS ENDED DECEMBER 31, 1996, 1997 AND 1998 AND
THE SIX-MONTH PERIOD ENDED JUNE 30, 1999 (UNAUDITED)
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
PREFERRED PREFERRED
STOCK STOCK
PREFERRED ISSUANCE SUBSCRIPTION
STOCK COSTS RECEIVABLE
----------- ----------- --------------
<S> <C> <C> <C>
Balance at July 27, 1995 ................. $ -- -- --
Contributed capital, net of expenses of
$25 ..................................... -- -- --
Conversion of debt to members'
equity .................................. -- -- --
Net loss ................................. -- -- --
--------- -- --
Balance at December 31, 1995 ............. -- -- --
Contributed capital, net of expenses of
$40 ..................................... -- -- --
Conversion of debt to members'
equity .................................. -- -- --
Net loss ................................. -- -- --
--------- -- --
Balance at December 31, 1996 ............. -- -- --
Contributed capital, net of expenses of
$148..................................... -- -- --
Conversion of debt to members'
equity .................................. -- -- --
Net loss ................................. -- -- --
--------- -- --
Balance at December 31, 1997 ............. -- -- --
Net loss ................................. -- -- --
--------- -- --
Balance at December 31, 1998 ............. -- -- --
Unaudited:
Conversion of debt to members'
equity in Predecessor Company ......... -- -- --
Series C Preferred Stock issued to
Predecessor Company, including
distribution of assets and
liabilities ........................... 17,193 -- --
Series C Preferred Stock issued in
exchange for cash and receivable....... 163,370 -- (49,746)
Payment of preferred stock issuance
costs ................................. -- (8,507) --
Series C Preferred Stock issued to
Central Alabama in exchange for
net assets ............................ 2,602 -- --
Series D Preferred Stock issued to
AT&T Wireless in exchange for
licenses and other agreements ......... 46,374 -- --
Adjustment to fair value of Series D
Preferred Stock ....................... (11,278) -- --
Accrual of dividends on Series A
redeemable preferred stock ............. -- -- --
Accretion of discount on Series A
redeemable preferred stock ............ -- -- --
Net loss ................................ -- -- --
--------- ------ -------
Balance at June 30, 1999 ................ $ 218,261 (8,507) (49,746)
========= ====== =======
<CAPTION>
DEFICIT
ACCUMULATED MEMBERS'
DURING AND
COMMON CONTRIBUTED DEVELOPMENT STOCKHOLDERS'
STOCK CAPITAL STAGE EQUITY
-------- ------------- ------------- --------------
<S> <C> <C> <C> <C>
Balance at July 27, 1995 ................. -- -- -- --
Contributed capital, net of expenses of
$25 ..................................... -- 1,150 -- 1,150
Conversion of debt to members'
equity .................................. -- 489 -- 489
Net loss ................................. -- -- (120) (120)
-- ----- ---- -----
Balance at December 31, 1995 ............. -- 1,639 (120) 1,519
Contributed capital, net of expenses of
$40 ..................................... -- 3,910 -- 3,910
Conversion of debt to members'
equity .................................. -- 1,706 -- 1,706
Net loss ................................. -- -- (1,461) (1,461)
-- ----- ------ ------
Balance at December 31, 1996 ............. -- 7,255 (1,581) 5,674
Contributed capital, net of expenses of
$148..................................... -- 5,437 -- 5,437
Conversion of debt to members'
equity .................................. -- 805 -- 805
Net loss ................................. -- -- (3,154) (3,154)
-- ----- ------ ------
Balance at December 31, 1997 ............. -- 13,497 (4,735) 8,762
Net loss ................................. -- -- (10,745) (10,745)
-- ------ ------- -------
Balance at December 31, 1998 ............. -- 13,497 (15,480) (1,983)
Unaudited:
Conversion of debt to members'
equity in Predecessor Company ......... -- 8,976 -- 8,976
Series C Preferred Stock issued to
Predecessor Company, including
distribution of assets and
liabilities ........................... -- (22,473) 576 (4,704)
Series C Preferred Stock issued in
exchange for cash and receivable....... -- -- -- 113,624
Payment of preferred stock issuance
costs ................................. -- -- -- (8,507)
Series C Preferred Stock issued to
Central Alabama in exchange for
net assets ............................ -- -- -- 2,602
Series D Preferred Stock issued to
AT&T Wireless in exchange for
licenses and other agreements ......... -- -- -- 46,374
Adjustment to fair value of Series D
Preferred Stock ....................... -- -- -- (11,278)
Accrual of dividends on Series A
redeemable preferred stock ............. -- -- (4,347) (4,347)
Accretion of discount on Series A
redeemable preferred stock ............ -- -- (425) (425)
Net loss ................................ -- -- (12,238) (12,238)
-- ------- ------- -------
Balance at June 30, 1999 ................ -- -- (31,914) 128,094
== ======= ======= =======
</TABLE>
See accompanying notes to consolidated financial statements.
F-5
<PAGE>
TRITEL, INC. AND PREDECESSOR COMPANIES
(DEVELOPMENT STAGE COMPANIES)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1997 AND 1998,
THE PERIOD FROM JULY 27, 1995 (INCEPTION) TO DECEMBER 31, 1998,
THE SIX MONTH PERIODS ENDED JUNE 30, 1998 AND 1999 (UNAUDITED)
AND THE PERIOD FROM JULY 27, 1995 (INCEPTION) TO JUNE 30, 1999 (UANUDITED)
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
----------------------------------------
1996 1997 1998
------------ -------------- ------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss ............................... $ (1,461) (3,154) (10,745)
Adjustments to reconcile net loss to
net cash used in operating
activities:
Loss on return of spectrum .......... -- -- 2,414
Depreciation and amortization ....... 2 20 348
Deferred income taxes ............... -- -- --
Changes in operating assets and
liabilities:
Due from affiliates ................ -- (275) 34
Accrued interest receivable ........ 1 (10) (14)
Other receivables .................. -- -- (168)
Prepaid expenses ................... -- -- (185)
Accounts payable and
accrued expenses ................. 340 45 (180)
Other liabilities .................. -- -- --
Due to affiliates .................. 426 (529) --
-------- ------ -------
Net cash used in operating
activities ...................... (692) (3,903) (8,496)
-------- ------ -------
Cash flows from investing activities:
Purchase of property and equipment (11) (6) (5,970)
Cash paid for organization costs ....... (34) (66) --
Deposit for FCC auctions ............... (5,000) -- --
Payment for FCC licenses ............... (3,549) (3,935) --
Refund of FCC deposit .................. 950 1,376 --
Purchase of trademark .................. -- -- --
Advance under note receivable .......... -- -- --
Capitalized interest on debt used to
obtain licenses ...................... (1,325) (415) (2,905)
Capitalized interest on network
construction ......................... -- -- --
Capitalized direct costs incurred to
obtain licenses ...................... (72) (6) --
-------- --------- -------
Net cash used in investing
activities ......................... (9,041) (3,052) (8,875)
-------- -------- -------
(continued)
<PAGE>
<CAPTION>
CUMULATIVE CUMULATIVE
AMOUNTS SIX-MONTHS AMOUNTS
SINCE ENDED SINCE
INCEPTION, JUNE 30, INCEPTION,
AT DECEMBER 31, -------------------------- AT JUNE 30,
1998 1998 1999 1999
----------------- ------------- ------------ (UNAUDITED)
(UNAUDITED)
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net loss ............................... (15,480) (1,733) (12,238) (27,718)
Adjustments to reconcile net loss to
net cash used in operating
activities:
Loss on return of spectrum .......... 2,414 -- -- 2,414
Depreciation and amortization ....... 370 13 2,398 2,768
Deferred income taxes ............... -- -- (6,036) (6,036)
Changes in operating assets and
liabilities:
Due from affiliates ................ (241) 21 (190) (431)
Accrued interest receivable ........ (24) (7) (336) (360)
Other receivables .................. (168) -- (833) (1,001)
Prepaid expenses ................... (185) -- (589) (774)
Accounts payable and
accrued expenses ................. 271 654 3,171 3,442
Other liabilities .................. -- -- 237 237
Due to affiliates .................. -- -- -- --
------- -------- ------- -------
Net cash used in operating
activities ...................... (13,043) (1,052) (14,416) (27,459)
------- -------- ------- -------
Cash flows from investing activities:
Purchase of property and equipment (5,986) (11) (44,687) (50,673)
Cash paid for organization costs ....... (103) -- -- (103)
Deposit for FCC auctions ............... (9,500) -- -- (9,500)
Payment for FCC licenses ............... (7,485) -- -- (7,485)
Refund of FCC deposit .................. 2,326 -- -- 2,326
Purchase of trademark .................. -- -- (325) (325)
Advance under note receivable .......... -- -- (7,550) (7,550)
Capitalized interest on debt used to
obtain licenses ...................... (4,644) -- (1,625) (6,269)
Capitalized interest on network
construction ......................... -- -- (4,271) (4,271)
Capitalized direct costs incurred to
obtain licenses ...................... (99) -- -- (99)
------- -------- ------- -------
Net cash used in investing
activities ......................... (25,491) (11) (58,458) (83,949)
------- -------- ------- -------
(continued)
</TABLE>
F-6
<PAGE>
TRITEL, INC. AND PREDECESSOR COMPANIES
(DEVELOPMENT STAGE COMPANIES)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1997 AND 1998,
THE PERIOD FROM JULY 27, 1995 (INCEPTION) TO DECEMBER 31, 1998,
THE SIX MONTH PERIODS ENDED JUNE 30, 1998 AND 1999 (UNAUDITED)
AND THE PERIOD FROM JULY 27, 1995 (INCEPTION) TO JUNE 30, 1999 (UNAUDITED)
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
----------------------------------
1996 1997 1998
--------- ----------- ------------
<S> <C> <C> <C>
Cash flows from financing activities:
Proceeds from notes payable to
related parties ........................ 300 5,700 --
Proceeds from notes payable .............. 5,900 5,000 38,705
Proceeds from long-term debt ............. -- -- --
Proceeds from senior subordinated
discount notes ......................... -- -- --
Repayments of notes payable to
related parties ........................ (100) (300) --
Repayments of notes payable .............. (625) (5,900) (21,300)
Payment of preferred stock issuance
costs .................................. -- -- --
Payment of debt issuance costs and
other deferred charges ................. (20) (1,251) (951)
Proceeds from vendor discount ............ -- -- --
Issuance of preferred stock .............. -- -- --
Capital contributions, net of related
expenses ............................... 3,910 5,437 --
----- ------ -------
Net cash provided by (used in)
financing activities ................. 9,365 8,686 16,454
----- ------ -------
Net increase (decrease) in restricted
cash, cash and cash equivalents .......... (368) 1,731 (917)
Restricted cash and cash equivalents at
beginning of period ...................... 400 32 1,763
----- ------ -------
Restricted cash and cash equivalents at
end of period ............................ $ 32 1,763 846
======= ====== =======
(continued)
<PAGE>
<CAPTION>
CUMULATIVE CUMULATIVE
AMOUNTS SIX-MONTHS AMOUNTS
SINCE ENDED SINCE
INCEPTION, JUNE 30, INCEPTION,
AT DECEMBER 31, ------------------------ AT JUNE 30,
1998 1998 1999 1999
----------------- ----------- ------------ (UNAUDITED)
(UNAUDITED)
<S> <C> <C> <C> <C>
Cash flows from financing activities:
Proceeds from notes payable to
related parties ........................ 9,100 -- -- 9,100
Proceeds from notes payable .............. 50,230 500 -- 50,230
Proceeds from long-term debt ............. -- -- 200,000 200,000
Proceeds from senior subordinated
discount notes ......................... -- -- 200,240 200,240
Repayments of notes payable to
related parties ........................ (400) -- -- (400)
Repayments of notes payable .............. (27,825) -- (22,100) (49,925)
Payment of preferred stock issuance
costs .................................. -- -- (8,507) (8,507)
Payment of debt issuance costs and
other deferred charges ................. (2,222) (641) (27,966) (30,188)
Proceeds from vendor discount ............ -- -- 15,000 15,000
Issuance of preferred stock .............. -- -- 113,623 113,623
Capital contributions, net of related
expenses ............................... 10,497 -- -- 10,497
------- ---- ------- -------
Net cash provided by (used in)
financing activities ................. 39,380 (141) 470,290 509,670
------- ---- ------- -------
Net increase (decrease) in restricted
cash, cash and cash equivalents .......... 846 (1,204) 397,416 398,262
Restricted cash and cash equivalents at
beginning of period ...................... -- 1,763 846 --
------- ------ ------- -------
Restricted cash and cash equivalents at
end of period ............................ 846 559 398,262 398,262
======= ====== ======= =======
(continued)
</TABLE>
F-7
<PAGE>
TRITEL, INC. AND PREDECESSOR COMPANIES
(DEVELOPMENT STAGE COMPANIES)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1997 AND 1998,
THE PERIOD FROM JULY 27, 1995 (INCEPTION) TO DECEMBER 31, 1998,
THE SIX MONTH PERIODS ENDED JUNE 30, 1998 AND 1999 (UNAUDITED)
AND THE PERIOD FROM JULY 27, 1995 (INCEPTION) TO JUNE 30, 1999 (UNAUDITED)
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
CUMULATIVE CUMULATIVE
AMOUNTS SIX-MONTHS AMOUNTS
YEARS ENDED SINCE ENDED SINCE
DECEMBER 31, INCEPTION, JUNE 30, INCEPTION,
----------------------------- AT DECEMBER 31, -------------------- AT JUNE 30,
1996 1997 1998 1998 1998 1999 1999
---------- --------- -------- ----------------- -------- ----------- (UNAUDITED)
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
Supplementary Information:
Cash paid for interest, net of
amounts capitalized ................ $ -- -- -- -- -- 5,104 5,104
======= == == == == ===== =====
Significant non-cash investing and
financing activities:
Long-term debt incurred to obtain
FCC licenses, net of discount ...... $53,259 23,116 -- 76,375 -- -- 76,375
======= ====== == ====== == ===== ======
Capitalized interest and discount
on debt used to obtain FCC
licenses ........................... $ 2,033 6,799 7,614 16,466 4,621 455 16,921
======= ====== ===== ====== ===== ===== ======
Deposits applied to purchase of
FCC licenses ....................... $ 4,500 5,000 -- 9,500 -- -- 9,500
======= ====== ===== ====== ===== ===== ======
Conversions of debt to equity ....... $ 1,706 805 -- 3,000 -- 8,976 11,976
======= ====== ===== ====== ===== ===== ======
Capital expenditures included in
accounts payable ................... $ -- -- 5,762 5,762 -- (5,762) --
======= ====== ===== ====== ===== ====== ======
Election of FCC disaggregation
option for return of spectrum:
Reduction in FCC licensing
costs ............................. $ -- -- 35,442 35,442 -- -- 35,442
======= ====== ====== ====== ===== ====== ======
Reduction in accrued interest
payable and long-term debt ........ $ -- -- 33,028 33,028 -- -- 33,028
======= ====== ====== ====== ===== ====== ======
Preferred stock issued
in exchange for assets
and liabilities .................... $ -- -- -- -- -- 123,575 123,575
======= ====== ====== ====== ===== ======= =======
Preferred stock issued
in exchange for stock
subscription receivable ............ $ -- -- -- -- -- 49,746 49,746
======= ====== ====== ====== ===== ======= =======
Distribution of assets
and liabilities to
predecessor company ................ $ -- -- -- -- (4,704) (4,704)
======= ====== ====== ====== ===== ======= =======
</TABLE>
See accompanying notes to consolidated financial statements
F-8
<PAGE>
TRITEL, INC. AND PREDECESSOR COMPANIES
(DEVELOPMENT STAGE COMPANIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.)
(1) DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(A) ORGANIZATION AND PRINCIPLES OF CONSOLIDATION
Airwave Communications, LLC ("Airwave Communications") (formerly Mercury
PCS, LLC) and Digital PCS, LLC ("Digital PCS") (formerly Mercury PCS II,
LLC) were formed on July 27, 1995 and July 29, 1996, respectively, for
the principal purpose of acquiring for development Personal
Communications Services ("PCS") licenses in markets in the south-central
United States. Airwave Communications and Digital PCS are referred to
collectively as "the Predecessor Company" or "the Predecessor
Companies."
Tritel, Inc. ("Tritel") was formed on April 23, 1998 by the controlling
shareholders of Airwave Communications and Digital PCS for the purpose
of developing Personal Communications Services ("PCS") markets in the
south-central United States. Tritel's 1998 activities consisted of $1.5
million in capital expenditures and $32,000 in net loss. On January 7,
1999, the Predecessor Companies transferred substantially all of their
assets and liabilities at historical cost to Tritel in exchange for
18,262 shares of Series C Preferred Stock in Tritel. Tritel is
controlled by the controlling shareholders of the Predecessor Companies.
Tritel will continue the activities of the Predecessor Companies and,
for accounting purposes, this transaction was accounted for as a
reorganization of the Predecessor Company into a C corporation and a
name change to Tritel. Tritel and the Predecessor Company, together with
Tritel's subsidiaries, are referred to collectively as "the Company."
The Company has not commenced commercial PCS operations and is still in
the development stage. The Company continues to devote most of its
efforts to activities such as strategic and financial planning, raising
capital and constructing wireless telecommunications network facilities.
The consolidated accounts of the Company include its subsidiaries,
Tritel PCS, Inc.; Tritel A/B Holding Corp.; Tritel C/F Holding Corp.;
Tritel Communications, Inc.; Tritel Finance, Inc.; and others. All
significant intercompany accounts or balances have been eliminated in
consolidation.
Also on January 7, 1999, Tritel entered into the following transactions:
o AT&T Wireless PCS, Inc. and TWR Cellular, Inc. (collectively, "AT&T
Wireless") contributed PCS licenses to Tritel and entered into
agreements with Tritel for the use of the AT&T logo and other service
marks, and for roaming arrangements. In exchange for the contributed
assets, AT&T Wireless received 90,668 shares of Series A Preferred
Stock and 46,374 shares of Series D Preferred Stock in Tritel with a
stated value of $137,042,000. This transaction was accounted for as an
asset acquisition by Tritel and is further described in Note 19.
o Tritel acquired all of the assets and liabilities of Central Alabama
Partnership, LP 132 in exchange for 2,602 shares of Series C Preferred
Stock in Tritel with a stated value of $2,602,000. Assets, principally
PCS licenses, totaling $9,352,000 were acquired and liabilities of
$6,750,000 were assumed. This transaction was accounted for as a
purchase business combination.
o Tritel issued 14,130 shares of Series C Preferred Stock with a stated
value of $14,130,000 to the Predecessor Companies in exchange for
cash. Additionally, Tritel issued 149,239 shares of Series C Preferred
Stock with a stated value of $149,239,000 to certain private investors
in exchange for cash and stock subscriptions receivable. These
transactions are further described in Note 18.
F-9
<PAGE>
TRITEL, INC. AND PREDECESSOR COMPANIES
(DEVELOPMENT STAGE COMPANIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.)
o Tritel entered into a $550,000,000 bank financing facility as further
described in Note 20 for financing of the development and construction
of its wireless network.
The January 7, 1999 stock transactions described above are summarized as
follows:
<TABLE>
<CAPTION>
STATED CARRYING
SHARES VALUE AMOUNT
---------- ---------- -----------
(AMOUNTS IN THOUSANDS)
<S> <C> <C> <C>
Series A Preferred issued to AT&T Wireless ......................... 90,668 $ 90,668 $ 68,684
Series D Preferred issued to AT&T Wireless ......................... 46,374 46,374 35,096
------ -------- --------
Total to AT&T Wireless in exchange for contributed assets .......... 137,042 137,042 103,780
------- -------- --------
Series C Preferred issued to Airwave Communications ................ 14,427 14,427 10,973
Series C Preferred issued to Digital PCS ........................... 3,835 3,835 6,220
------- -------- --------
Total to Predecessor Companies in exchange for contributed assets... 18,262 18,262 17,193
------- -------- --------
Series C Preferred issued to Central Alabama Partnership ........... 2,602 2,602 2,602
Series C Preferred issued to Predecessor Companies for cash ........ 14,130 14,130 14,130
Series C Preferred issued to certain private investors ............. 149,239 149,239 149,239
------- -------- --------
Total .............................................................. 321,275 $321,275 $286,944
======= ======== ========
</TABLE>
(B) CASH AND CASH EQUIVALENTS
For purposes of financial statement classification, the Company
considers all highly liquid investments with original maturities of
three months or less to be cash equivalents.
(C) PROPERTY AND EQUIPMENT
Property and equipment are stated at cost, less accumulated
depreciation. When assets are placed in service, depreciation is
calculated using the straight-line method over the estimated useful
lives of the respective assets, generally seven years for wireless
network assets and three years for information systems assets. Leasehold
improvements are amortized over the lease term. The Company capitalizes
interest on certain of its wireless network construction activities.
Routine expenditures for repairs and maintenance are charged to expense
as incurred.
(D) FCC LICENSING COSTS
Licensing costs are accounted for in accordance with industry standards
and include the discounted present value of license fees as described in
Note 5 and the direct costs incurred to obtain the licenses. For certain
licenses, licensing costs also include capitalized interest on the
related debt during the period of time necessary to build out the
wireless network.
The FCC grants licenses for terms of up to ten years, and generally
grants renewals if the licensee has complied with its license
obligations. The Company believes it will be able to
F-10
<PAGE>
TRITEL, INC. AND PREDECESSOR COMPANIES
(DEVELOPMENT STAGE COMPANIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.)
secure renewal of its PCS licenses. Amortization of such license costs,
which will begin for each geographic service area upon commencement of
service, will be over a period of 40 years.
The Company adopted Statement of Financial Accounting Standards (SFAS)
No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of" in 1996. Adoption of the statement
did not have a material effect on the Company's financial statements at
the date of adoption. In accordance with the requirements of SFAS 121,
the Company evaluates the propriety of the carrying amounts of its FCC
licensing costs whenever current events or circumstances warrant such
review to determine whether such assets are impaired. There have been no
impairments through June 30, 1999.
(E) DEFERRED CHARGES
Debt issuance costs are deferred and amortized over the term of the
related debt. Direct costs of two purchase business combinations which
closed in January 1999 were deferred at December 31, 1998 and included
as part of the total costs of the acquisitions. Direct costs incurred
for an equity offering which closed in January 1999 were deferred and
will be offset against the proceeds of the offering. Direct costs
incurred for a proposed offering of senior discount notes were deferred
and will be amortized over the term of the related debt.
(F) INCOME TAXES
Because the Predecessor Company was a nontaxable entity, operating
results prior to January 7, 1999 were included in the income tax returns
of its members. Therefore, the accompanying consolidated financial
statements do not include any provision for income tax benefit for the
years ended December 31, 1996, 1997 and 1998 or any deferred income
taxes on any temporary differences in asset bases as of December 31,
1997 and 1998.
As of January 7, 1999, the Company accounts for income taxes in
accordance with Statement of Financial Accounting Standards No. 109,
which requires the use of the asset and liability method in accounting
for deferred taxes.
(G) USE OF ESTIMATES
The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. A significant estimate impacting the
preparation of the consolidated financial statements is the estimated
useful life of FCC licensing costs. Actual results could differ from
those estimates.
(H) RECENTLY ISSUED ACCOUNTING STANDARDS
In June 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 131, Disclosures about Segments of
an Enterprise and Related Information ("FAS 131"). FAS 131 requires that
a public business enterprise report financial and descriptive
information about its reportable operating segments. The statement
defines operating segments as components of enterprises about which
separate financial information is available that is evaluated regularly
by the chief operating decision maker in deciding how to allocate
resources and in assessing performance. The Company adopted SFAS 131 and
determined that there are no separate reportable segments, as defined by
the standard.
F-11
<PAGE>
TRITEL, INC. AND PREDECESSOR COMPANIES
(DEVELOPMENT STAGE COMPANIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.)
In June 1998, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 133, Accounting for Derivative
Instruments and Hedging Activities ("FAS 133"). FAS 133 establishes
accounting and reporting standards for derivative instruments, including
certain derivative instruments embedded in other contracts, and for
hedging activities. It requires that an entity recognize all derivatives
as either assets or liabilities in the statement of financial position
and measure those instruments at fair value. FAS 133 will significantly
change the accounting treatment of derivative instruments and, depending
upon the underlying risk management strategy, these accounting changes
could affect future earnings, assets, liabilities, and shareholders'
equity. The Company is closely monitoring the deliberations of the
FASB's derivative implementation task force. With the issuance of
Statement of Financial Accounting Standards No. 137, Accounting for
Derivative Instruments and Hedging Activities -- Deferral of the
Effective Date of FASB Statement No. 133, which delayed the effective
date of FAS 133, the Company will be required to adopt FAS 133 on
January 1, 2001. Presently, the Company has not yet quantified the
impact that the adoption will have on its consolidated financial
statements.
(I) INTERIM FINANCIAL STATEMENTS
The unaudited condensed consolidated financial statements of the Company
as of June 30, 1999 and for the six-month periods ended June 30, 1998
and 1999 have been prepared pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements presented in
accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations. In the
opinion of management, the condensed consolidated interim financial
statements include all adjustments, consisting of normal recurring
items, necessary to fairly present the results of operations, financial
position and cash flows for the periods presented. The results of
operations for an interim period are not necessarily indicative of the
results of operations that may be expected for the complete fiscal year.
(2) LIQUIDITY
As reflected in the accompanying consolidated financial statements, the
Company is a development stage company because it has not yet commenced
commercial PCS operations. The Company is expected to incur significant
expenses in advance of generating revenues and to realize significant
operating losses in its initial stages of operations. The buildout of the
Company's PCS network and the marketing and distribution of the Company's
PCS products and services will require substantial equity and/or debt and
there can be no assurance that the Company will be able to raise sufficient
capital for such purposes.
The planned high level of indebtedness could have a material adverse effect
on the Company, including the effect of such indebtedness on: (i) the
Company's ability to fund internally, or obtain additional debt or equity
financing in the future for capital expenditures, working capital, debt
service requirements, operating losses, acquisitions and other purposes;
(ii) the Company's ability to dedicate funds for the wireless network
buildout, operations or other purposes, due to the need to dedicate a
substantial portion of operating cash flow to fund interest payments; (iii)
the Company's flexibility in planning for, or reacting to, changes in its
business and market conditions; (iv) the Company's ability to compete with
less highly leveraged competitors; and (v) the Company's financial
vulnerability in the event of a downturn in its business or the economy.
F-12
<PAGE>
TRITEL, INC. AND PREDECESSOR COMPANIES
(DEVELOPMENT STAGE COMPANIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.)
As mentioned above, the Company entered into certain transactions in
January 1999 to fund a significant portion of the planned operating losses
and network buildout costs. Management of the Company believes that those
transactions will provide adequate funding for the planned expenditures in
the initial operations and buildout of the network. During May 1999, the
Company obtained high yield debt in amounts necessary to cover additional
planned cash needs. There can be no assurance that such funds will be
adequate to complete the buildout of the Company's PCS network. Under those
circumstances, the Company could be required to change its plans relating
to the buildout of the network.
(3) RESTRICTED CASH
On March 31, 1999, the Company entered into a deposit agreement with
Toronto Dominion (Texas), Inc., as administrative agent, on behalf of the
depository bank and the banks and other financial institutions who are a
party to the bank facility described in Note 20. Under the terms of the
agreement, the Company has placed on deposit $7,957,000 at June 30, 1999
with the depository bank, which will be used for the payment of interest
and/or commitment fees due under the bank facility.
(4) PROPERTY AND EQUIPMENT
Major categories of property and equipment are as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------- JUNE 30,
1997 1998 1999
--------- ---------- ------------
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Furniture and fixtures ....................... $17 1,779 3,695
Network construction and development ......... -- 11,416 45,117
Leasehold improvements ....................... -- 728 3,676
---- ------ ------
17 13,923 52,488
Less accumulated depreciation ................ (4) (107) (782)
Deposits on equipment ........................ -- -- 8,980
----- ------ ------
$13 13,816 60,686
===== ====== ======
</TABLE>
(5) FCC LICENSING COSTS
The Predecessor Company bid successfully for C-Block licenses with an
aggregate license fee of $70,989,000 (such amount is net of a 25% small
business discount) and such licenses were granted to the Predecessor
Company during 1996. The Predecessor Company also bid successfully for D-,
E- and F-Block licenses with an aggregate license fee of $35,727,000 (such
amount is net of a 25% small business discount) and such licenses were
granted to the Predecessor Company during 1997.
The FCC provided below market rate financing for a portion of the bid price
of the C- and F-Block licenses. Based on the Company's estimates of
borrowing costs for similar debt, the Company discounted the face amount of
the debt to yield a market rate and such discount was applied to reduce the
carrying amount of the licenses and the debt. Accordingly, the licenses
acquired during the years ended December 31, 1996 and 1997 were recorded at
$59,799,000 and $30,676,000, respectively.
F-13
<PAGE>
TRITEL, INC. AND PREDECESSOR COMPANIES
(DEVELOPMENT STAGE COMPANIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.)
During the years ended December 31, 1996, 1997 and 1998, the Company
capitalized interest of $3,358,000, $7,214,000 and $10,519,000,
respectively, relating to FCC debt. During the years ended December 31,
1996 and 1997, the Company incurred direct costs of $72,000 and $6,000,
respectively, to obtain the licenses. The Company did not incur any costs
to obtain licenses during 1998.
During July 1998, the Company took advantage of a reconsideration order by
the FCC allowing companies holding C-Block PCS licenses several options to
restructure their license holdings and associated obligations. The Company
elected the disaggregation option and returned one-half of the broadcast
spectrum originally acquired for each of the C-Block license areas. As a
result, the Company reduced the carrying amount of the related licenses by
one-half, or $35,442,000, and reduced the discounted debt and accrued
interest due to the FCC by $33,028,000. As a result of the disaggregation
election, the Company recognized an extraordinary loss of approximately
$2,414,000.
As mentioned above and in Note 19, AT&T Wireless contributed certain A- and
B-Block PCS licenses to the Company on January 7, 1999 as part of a
purchase business combination. The Company recorded such licenses at their
aggregate appraised value of $97,880,000 plus $635,000 related allocated
costs of the acquisition. Also, in the acquisition of Central Alabama
Partnership, LP 132, the Company acquired licenses with an estimated fair
value of $9,284,000, exclusive of $6,072,000 of debt to the FCC.
Additionally, in connection with the transactions which the Company closed
on January 7, 1999, licenses with a carrying amount, including capitalized
interest and costs, totaling $21,874,000 were retained by the Predecessor
Company (see Note 14). The assets and liabilities retained by the
Predecessor Company have been reflected in these financial statements as a
distribution to the Predecessor Company.
Each of the Company's licenses is subject to an FCC requirement that the
Company construct wireless network facilities offering coverage to certain
percentages of the population within certain time periods following the
grant of such licenses. Failure to comply with these requirements could
result in the revocation of the related licenses or the imposition of fines
on the Company by the FCC.
(6) NOTE RECEIVABLE
On March 1, 1999, the Company entered into agreements with AT&T Wireless,
Lafayette Communications Company L.L.C. ("Lafayette") and ABC Wireless
L.L.C. ("ABC") whereby the Company, AT&T Wireless and Lafayette would lend
$29,500,000 to ABC to fund its participation in the re-auction of FCC
licenses that were returned to the FCC by various companies under the July
1998 reconsideration order. The Company's portion of this loan was
$7,500,000 and was recorded as a note receivable at June 30, 1999.
Subsequent to closing of the agreements, ABC was the successful bidder for
licenses covering the Tritel markets with an aggregate purchase price of
$7,789,000. The Company has agreed to purchase these licenses for
$7,789,000 and expects to consummate that purchase during 1999. Under the
agreement, it will apply its $7,500,000 loan, together with additional cash
of $289,000, to pay the purchase price. If the licenses are not purchased
by March 1, 2004, the note will mature on that date. The note accrues
interest at 16% per year. There are no required payments of principal or
interest on the note until maturity. The note is secured by all assets of
ABC, including, if permitted by the FCC, the FCC licenses awarded in the
re-auction, and ranks pari passu with the notes to AT&T Wireless and
Lafayette.
F-14
<PAGE>
TRITEL, INC. AND PREDECESSOR COMPANIES
(DEVELOPMENT STAGE COMPANIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.)
(7) NOTES PAYABLE
At December 31, 1997, the Company had $5,000,000 payable under a
$15,000,000 loan agreement with a supplier. During 1998, this loan
agreement was increased to $28,500,000 and was replaced by a loan agreement
with a different supplier. The outstanding loan balance at December 31,
1998 was $22,100,000. The loan agreement was secured by a pledge of the
membership equity interests of certain members of Predecessor Company
management and the interest rate was 9%. Amounts outstanding under this
loan agreement were repaid in January 1999 when certain private investors
invested cash in the Company in exchange for convertible preferred stock.
At December 31, 1998, the Predecessor Company has available a $1,000,000
line of credit with a commercial bank, expiring July 27, 1999 bearing
interest at the bank's prime rate of interest plus 1% at December 31, 1998.
The amount outstanding on the line of credit was $305,000 at December 31,
1998. This line of credit relates specifically to licenses that were
retained by the Predecessor Company (see Note 14) and therefore the line
was retained by the Predecessor Company.
(8) FCC DEBT
The FCC provided below market rate financing for 90% of the bid price of
the C-Block PCS licenses and 80% of the bid price of the F-Block PCS
licenses. Such FCC debt is secured by all of the Company's rights and
interest in the licenses financed.
The debt incurred in September 1996 by the Company for the purchase of the
C-Block PCS licenses totaled $63,890,000 (undiscounted). The debt bears
interest at 7%; however, based on the Company's estimate of borrowing costs
for similar debt, a rate of 10% was used to determine the debt's discounted
present value of $52,700,000. As discussed in Note 5, the Company elected
to disaggregate and return one-half of the broadcast spectrum of the
C-block licenses. The FCC permitted such spectrum to be returned effective
as of the original purchase. As a result, the Company reduced the
discounted debt due to the FCC for such licenses by $27,410,000.
F-Block licenses were granted in August and November of 1997. The debt
incurred by the Company for the purchase of such licenses totaled
$15,492,000 (undiscounted) in August 1997 and $12,675,000 (undiscounted) in
November 1997. The debt bears interest at 6.125%, however; based on the
Company's estimate of borrowing costs for similar debt, a rate of 10% was
used to determine the debt's discounted present value of $12,700,000 and
$10,416,000 respectively.
In the acquisition of Central Alabama Partnership, LP 132 on January 7,
1999, the Company assumed debt of $6,072,000 payable to the FCC for the
licenses acquired.
Additionally, as described in Notes 5 and 14, certain licenses and the
related FCC debt for those licenses were retained by the Predecessor
Company. The discounted carrying amount of the debt for the licenses
retained by the Predecessor Company was $15,889,000.
As of December 31, 1998 and June 30, 1999, the following is a schedule of
future minimum principal payments of the Company's FCC debt due within five
years and thereafter:
F-15
<PAGE>
TRITEL, INC. AND PREDECESSOR COMPANIES
(DEVELOPMENT STAGE COMPANIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.)
<TABLE>
<CAPTION>
DECEMBER 31, 1998 JUNE 30, 1999
------------------------ -----------------------
(DOLLARS IN THOUSANDS) (UNAUDITED)
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
December 31, 1999 ............ $ -- June 30, 2000 .......... $ 443
December 31, 2000 ............ 2,494 June 30, 2001 .......... 974
December 31, 2001 ............ 2,975 June 30, 2002 .......... 1,035
December 31, 2002 ............ 3,162 June 30, 2003 .......... 5,296
December 31, 2003 ............ 10,535 June 30, 2004 .......... 10,010
Thereafter ................... 40,946 Thereafter ............. 29,717
-------- --------
60,112 47,475
Less unamortized discount (8,513) (6,045)
-------- --------
Total ....................... $ 51,599 $ 41,430
======== ========
</TABLE>
All the scheduled interest payments on the FCC debt were suspended for the
period from January 1997 through March 1998 by the FCC. Payments of such
suspended interest resumed in July 1998 with the total suspended interest
due in eight quarterly payments.
Interest accruing after March 1998 (the date interest resumed after the
interest suspension) on all FCC debt is required to be paid in quarterly
payments with the first payment due in July 1998. As of June 30, 1999, the
Company's suspended interest will be due in quarterly payments of $135,000
through April 30, 2000. The Company is required to make quarterly principal
and interest payments on the FCC debt as follows:
<TABLE>
<CAPTION>
QUARTERLY
PAYMENTS PAYMENTS PAYMENT
BEGIN END AMOUNT
-------------- --------------- -----------------------
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
C Block licenses ............................. January 2003 October 2006 $2,306
F Block licenses issued in August 1997 ....... January 2000 October 2007 340
F Block licenses issued in November 1997 ..... April 2000 December 2007 36
Licenses acquired with Central Alabama
acquisition ................................ January 2003 October 2006 438
</TABLE>
(9) NOTE PAYABLE TO RELATED PARTIES
In March 1997, the Predecessor Company entered into a loan agreement for a
$5,700,000 long-term note payable to Southern Farm Bureau Life Insurance
Company ("SFBLIC"). SFBLIC is a member of Mercury Southern, LLC, which was
a member of the Predecessor Company, and subsequently became an investor in
the Company. This note was secured by a pledge of the membership equity
interests of certain members of Predecessor Company management and interest
accrued annually at 10% on the anniversary date of the note. At December
31, 1998, the balance of the note was $6,270,000 as a result of the
capitalization of the first year's interest. The indebtedness under the
note was convertible into equity at the face amount at any time at the
option of SFBLIC, subject to FCC equity ownership limitations applicable to
entrepreneurial block license holders. The Predecessor Company and SFBLIC
subsequently negotiated a revised arrangement under which the amount due of
$6,270,000 plus accrued interest of $476,000 was not
F-16
<PAGE>
TRITEL, INC. AND PREDECESSOR COMPANIES
(DEVELOPMENT STAGE COMPANIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.)
paid but instead was converted into $8,976,000 of members' equity in the
Predecessor Company on January 7, 1999. The $2,230,000 preferred return to
the investor was accounted for as a financing cost during the period ended
June 30, 1999. The interest accrued at the contractual rate was capitalized
during the accrual period.
Subsequent to the conversion of debt into members' equity and as described
in Note 1(a), the Predecessor Company transferred certain assets and
liabilities to Tritel in exchange for preferred stock in Tritel.
(10) STOCKHOLDERS' EQUITY
The Predecessor Company was organized as a limited liability corporation
(LLC) and as such had no outstanding stock. Owners (members) actually held
a membership interest in the LLC. As a result, the investment of those
members in the Predecessor Company is reflected as contributed capital --
Predecessor Company in the accompanying balance sheet.
On January 7, 1999, the Company issued stock to the Predecessor Company as
well as other parties as described herein.
PREFERRED STOCK
Following is a summary of the preferred stock of the Company:
1,500,000 shares of authorized preferred stock, par value $.01 per share
(the "Preferred Stock"), 1,100,000 of which have been designated as
follows:
o 200,000 shares designated "Series A Convertible Preferred Stock" (the
"Series A Preferred Stock"), 10% redeemable convertible, $1,000 stated
and liquidation value (See Note 22);
o 300,000 shares designated "Series B Preferred Stock" (the "Series B
Preferred Stock"), 10% cumulative, $1,000 stated and liquidation value
(See Note 22);
o 500,000 shares designated "Series C Convertible Preferred Stock" (the
"Series C Preferred Stock"), 6.5% cumulative convertible, $1,000
stated and liquidation value; and
o 100,000 shares designated "Series D Convertible Preferred Stock" (the
"Series D Preferred Stock"), 6.5% cumulative convertible, $1,000
stated and liquidation value.
Series C Preferred Stock
The Series C Preferred Stock (1) ranks junior to the Series A Preferred
Stock and the Series B Preferred Stock with respect to dividend rights and
rights on liquidation, dissolution or winding up, (2) ranks junior to the
Series D Preferred Stock with respect to rights on a statutory liquidation,
(3) ranks on a parity basis with the Series D Preferred Stock with respect
to rights on liquidation, dissolution or winding up, except a statutory
liquidation, (4) ranks on a parity basis with Series D Preferred Stock and
Common Stock with respect to dividend rights, and (5) ranks senior to the
Common Stock and any other series or class of the Company's common or
preferred stock, now or hereafter authorized, other than Series A Preferred
Stock, Series B Preferred Stock or Series D Preferred Stock, with respect
to rights on liquidation, dissolution and winding up.
The holders of Series C Preferred Stock are entitled to dividends in cash
or property when, as and if declared by the Board of Directors of Tritel.
Upon any liquidation, dissolution or winding up of Tritel, the holders of
Series C Preferred Stock are entitled to receive, after payment to any
stock ranking senior to the Series C Preferred Stock, a liquidation
preference equal to (1) the quotient of the aggregate paid-in-capital of
all Series C Preferred Stock held by a stockholder
F-17
<PAGE>
TRITEL, INC. AND PREDECESSOR COMPANIES
(DEVELOPMENT STAGE COMPANIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.)
divided by the total number of shares of Series C Preferred Stock held by
that stockholder plus (2) declared but unpaid dividends on the Series C
Preferred Stock, if any, plus (3) an amount equal to interest on the
invested amount at the rate of 61/2% per annum, compounded quarterly. The
holders of the Series C Preferred Stock have the right at any time to
convert each share of Series C Preferred Stock, and upon an initial public
offering meeting certain conditions (the "IPO Date"), each share of Series
C Preferred Stock will automatically convert, into shares of Class A Common
Stock of and, under certain circumstances, Class D Common Stock. The number
of shares the holder will receive upon conversion will be determined by
dividing the aforementioned liquidation preference by the conversion price
in effect at the time of conversion. The conversion price currently in
effect is $1,000. On all matters to be submitted to the stockholders of
Tritel, the holders of Series C Preferred Stock shall have the right to
vote on an as-converted basis as a single class with the holders of the
Common Stock. Additionally, the affirmative vote of the holders of a
majority of the Series C Preferred Stock is required to approve certain
matters. The Series C Preferred Stock is not redeemable.
The Company issued 18,262 shares of Series C Preferred Stock with a stated
value of $18,262,000 to the Predecessor Company on January 7, 1999 in
exchange for certain of its assets, liabilities and continuing operations.
The stock was recorded at the historical cost of the assets and liabilities
acquired from the Predecessor Company since, for accounting purposes, this
transaction was accounted for as a reorganization of the Predecessor
Company into a C corporation and a name change to Tritel.
The Company also issued 14,130 shares of Series C Preferred Stock with a
stated value of $14,130,000 to the Predecessor Company on January 7, 1999
in exchange for cash of $14,130,000. In the same transaction, the Company
also issued 149,239 shares of Series C Preferred Stock with a stated value
of $149,239,000 to investors on January 7, 1999 in exchange for cash and
subscriptions receivable. The stock was recorded at its stated value and
the costs associated with this transaction have been offset against equity.
Additionally, the Company issued 2,602 shares of Series C Preferred Stock
with a stated value of $2,602,000 to Central Alabama Partnership, LP 132 on
January 7, 1999 in exchange for its net assets. The stock was recorded at
its stated value and the assets and liabilities were recorded at estimated
fair values.
Series D Preferred Stock
The Series D Preferred Stock (1) ranks junior to the Series A Preferred
Stock and the Series B Preferred Stock with respect to dividend rights and
rights on liquidation, dissolution or winding up, (2) ranks senior to the
Series C Preferred Stock with respect to rights on a statutory liquidation,
(3) ranks on a parity basis with Series C Preferred Stock with respect to
rights on liquidation, dissolution and winding up, except a statutory
liquidation, (4) ranks on a parity basis with Series C Preferred Stock and
Common Stock with respect to dividend rights, and (5) ranks senior to the
Common Stock and any other series or class of Tritel's common or preferred
stock, now or hereafter authorized, other than Series A Preferred Stock,
Series B Preferred Stock or Series C Preferred Stock, with respect to
rights on liquidation, dissolution and winding up. Subject to the preceding
sentence , the Series D Preferred Stock is identical in all respects to the
Series C Preferred Stock, except:
o the Series D Preferred Stock is convertible into an equivalent number
of shares of Series C Preferred Stock at any time;
F-18
<PAGE>
TRITEL, INC. AND PREDECESSOR COMPANIES
(DEVELOPMENT STAGE COMPANIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.)
o the liquidation preference for Series D Preferred Stock equals $1,000
per share plus declared but unpaid dividends plus an amount equal to
interest on $1,000 at the rate of 61/2% per annum, compounded quarterly,
from the date of issuance of such share to and including the date of the
payment:
o the holders of Series D Preferred Stock do not have any voting rights,
other than those required by law or in certain circumstances; and
o shares of Series D Preferred Stock are not automatically convertible
upon an initial public offering of the Company's stock, but will be
renamed as "Senior Common Stock" on such date.
The Company issued 46,374 shares of Series D Preferred Stock with a stated
value of $46,374,000 to AT&T Wireless on January 7, 1999. The stock was
recorded at its stated value and a discount was recorded for the excess of
the stated value of the stock over the fair value of assets, net of
deferred income taxes, received from AT&T Wireless.
COMMON STOCK
Following is a summary of the common stock of the Company:
3,040,009 shares of common stock, par value $.01 per share (the "Common
Stock"), which have been designated as follows:
o 1,500,000 shares designated "Class A Voting Common Stock" (the "Class
A Common Stock"),
o 1,500,000 shares designated "Class B Non-Voting Common Stock" (the
"Class B Common Stock"),
o 10,000 shares designated "Class C Common Stock" (the "Class C Common
Stock"),
o 30,000 shares designated "Class D Common Stock" (the "Class D Common
Stock") and
o 9 shares designated "Voting Preference Common Stock" (the "Voting
Preference Common Stock")
The Common Stock of Tritel is divided into two groups, the "Non-Tracked
Common Stock," which is comprised of the Class A Common Stock, the Class B
Common Stock and the Voting Preference Common Stock, and the "Tracked
Common Stock," which is comprised of the Class C Common Stock and Class D
Common Stock. Each share of Common Stock is identical, and entitles the
holder thereof to the same rights, powers and privileges of stockholders
under Delaware law, except:
o dividends on the Tracked Common Stock track the assets and liabilities
of Tritel C/F Holding Corp., a subsidiary of Tritel;
o rights on liquidation, dissolution or winding up of Tritel of the
Tracked Common Stock track the assets and liabilities of Tritel C/F
Holding Corp.;
o the Class A Common Stock, together with the Series C Preferred Stock,
has 4,990,000 votes, the Class B Common Stock has no votes, the Class C
Common Stock has no votes, the Class D Common Stock has no votes and the
Voting Preference Common Stock has 5,010,000 votes, except that in any
matter requiring a separate class vote of any class of Common Stock or a
separate vote of two or more classes of Common Stock voting together as
a single class, for the purposes of such a class vote, each share of
Common Stock of such classes will be entitled to one vote per share;
o in the event the FCC indicates that the Class A Common Stock and the
Voting Preference Stock (1) may be voted as a single class on all
matters, (2) may be treated as a single class
F-19
<PAGE>
TRITEL, INC. AND PREDECESSOR COMPANIES
(DEVELOPMENT STAGE COMPANIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.)
for all quorum requirements and (3) may have one vote per share, then,
absent action by the Board of Directors and upon an affirmative vote of
662/3% or more of the Class A Common Stock, Tritel must seek consent
from the FCC to permit the Class A Common Stock and the Voting
Preference Common Stock to vote and act as a single class in the manner
described above;
o the holders of shares of Class B Common Stock shall be entitled to vote
as a separate class on any amendment, repeal or modification of any
provision of the restated certificate of Incorporation that adversely
affects the powers, preferences or special rights of the holders of the
Class B Common Stock;
o each share of Class B Common Stock may be converted, at any time at the
holder's option, into one share of Class A Common Stock;
o each share of Class A Common Stock may be converted, at any time at the
holder's option, into one share of Class B Common Stock; and
o in the event the FCC indicates that it will permit the conversion of
Tracked Common Stock into either Class A Common Stock or Class B Common
Stock, then, absent action by the Board of Directors and upon an
affirmative vote of 66 2/3% or more of the Class A Common Stock, such
conversion will be allowed by Tritel at the option of the holders of the
Tracked Common Stock.
On January 7, 1999, the Company issued 35,519 shares of Class A Common
Stock, 5,177 shares of Class C Common Stock and 9 shares of Voting
Preference Common Stock to certain members of management of the Company.
Management has determined the stock to have a nominal value; therefore, no
amounts have been assigned to common stock in the accompanying balance
sheet and no amounts have been amortized into compensation expense for such
shares.
(11) INCOME TAXES
On January 7, 1999 the Company recorded a deferred tax liability of
$34,100,000 primarily related to the difference in asset bases on the
assets acquired from AT&T Wireless.
Because the Predecessor Company was a nontaxable entity, the results
presented below relate solely to the six-month period ended June 30, 1999.
Components of income tax benefit for the six-month period ended June 30,
1999 are as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 1999
------------------------------------
CURRENT DEFERRED TOTAL
--------- ---------- -----------
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Federal ............. $-- (5,234) (5,234)
State ............... -- (802) (802)
--- ------ ------
$-- (6,036) (6,036)
=== ====== ======
</TABLE>
F-20
<PAGE>
TRITEL, INC. AND PREDECESSOR COMPANIES
(DEVELOPMENT STAGE COMPANIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.)
Actual tax expense differs from the "expected" tax benefit using the
federal corporate rate of 35% as follows:
<TABLE>
<CAPTION>
JUNE 30,
1999
-----------------------
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<S> <C>
Computed "expected" tax benefit ................................ $ (6,396)
Reduction (increase) resulting from:
State income taxes, net of federal income tax benefit ......... (594)
Nontaxable loss of Predecessor Company ........................ 954
---------
$ (6,036)
=========
</TABLE>
The tax effects of temporary differences that give rise to significant
portions of the deferred tax liability at June 30, 1999 are as follows:
<TABLE>
<CAPTION>
JUNE 30,
1999
-----------------------
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<S> <C>
Deferred tax assets:
Net operating loss carryforward .................................. $ 4,138
Tax basis of capitalized start-up costs in excess of book basis .. 12,206
Discount accretion in excess of tax basis ........................ 1,306
-------
Total gross deferred tax assets ................................ 17,650
-------
Deferred tax liabilities:
Intangible assets book basis in excess of tax basis .............. 15,122
FCC licenses book basis in excess of tax basis ................... 20,212
Capitalized interest book basis in excess of tax basis ........... 7,694
Discount accretion book basis in excess of tax basis ............. 2,309
Other ............................................................ 377
-------
Total gross deferred tax liabilities ........................... 45,714
-------
Net deferred tax liability ..................................... $28,064
=======
</TABLE>
At June 30, 1999, the Company has net operating loss carryforwards for
federal income tax purposes of $10,277,000 which are available to offset
future federal taxable income, if any, through 2019.
There was no valuation allowance for the gross deferred tax asset at June
30, 1999, principally due to the existence of a deferred tax liability
which was recorded upon the closing of the AT&T Wireless transaction on
January 7, 1999. The ultimate realization of deferred tax assets is
dependent upon the generation of future taxable income during the period in
which those temporary differences become deductible. Management considered
the scheduled reversal of deferred tax liabilities in making this
assessment. Based upon anticipated future taxable income over the periods
in which the deferred tax assets are realizable, management believes it is
more likely than not the Company will realize the benefits of these
deferred tax assets.
F-21
<PAGE>
TRITEL, INC. AND PREDECESSOR COMPANIES
(DEVELOPMENT STAGE COMPANIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.)
(12) FAIR VALUE OF FINANCIAL INSTRUMENTS
The following disclosure of the estimated fair value of financial
instruments is made pursuant to Financial Accounting Standards No. 107,
"Disclosures About Fair Value of Financial Instruments." Fair value
estimates are subject to inherent limitations. Estimates of fair value are
made at a specific point in time, based on relevant market information and
information about the financial instrument. The estimated fair values of
financial instruments are not necessarily indicative of amounts the Company
might realize in actual market transactions. Estimates of fair value are
subjective in nature and involve uncertainties and matters of significant
judgment and therefore cannot be determined with precision. Changes in
assumptions could significantly affect the estimates.
Note receivable: The carrying amount of note receivable is believed to
approximate fair value due to the imminent conversion of the principal
amount as described in Note 6.
Notes payable: The carrying amount of notes payable is believed to
approximate fair value due to the current nature of the liabilities.
Long-term debt: The carrying amount of long-term debt is believed to
approximate fair value because such debt was discounted to reflect a
market interest rate at inception and such discount is believed to be
approximate for valuation of this debt.
(13) RELATED PARTY TRANSACTIONS
During 1995, the Predecessor Company had a notes payable agreement with
Mercury Southern, LLC, a member of the Predecessor Company, whereby Mercury
Southern, LLC loaned the Predecessor Company $3,000,000. During 1995, 1996
and 1997, the notes payable converted to members' equity at the face amount
of the principal. As of December 31, 1997, this note was fully converted to
members' equity.
During 1996, the Predecessor Company had an agreement with Mercury
Southern, LLC under which it paid a management fee to Mercury Southern,
LLC. Management fees were $40,000 per month prior to the PCS auctions and,
thereafter, were three cents per month for each person living in a market
(Pops) for which the Company had purchased a PCS license. The population in
each market was determined in accordance with ordinary estimates and
methods used in the telecommunication industry. Total expenses under this
management agreement for 1996 were $730,000. This management agreement
terminated at the end of 1996.
During 1997 and 1998, the Company reimbursed MSM, Inc. ("MSM"), a company
owned by members of the Company's management, for actual expenses to cover
the salaries and employee benefits of MSM employees who were providing
services almost exclusively to the Company. The Company reimbursed MSM
$1,312,000 and $3,709,000 for such expenses in 1997 and 1998, respectively.
On January 7, 1999, after consummation of the transactions described
herein, the employees of MSM who were providing services to the Company
became employees of the Company.
Further, MSM sometimes paid invoices on behalf of the Company for expenses
directly attributable to the Company and was reimbursed from the Company
for such expenditures. For expenses shared by both MSM and the Company, MSM
paid the expenses and allocated a portion to the Company. The Company
reimbursed MSM $144,000 in 1996, $248,000 in 1997 and $325,000 in 1998 for
such costs incurred on the Company's behalf.
F-22
<PAGE>
TRITEL, INC. AND PREDECESSOR COMPANIES
(DEVELOPMENT STAGE COMPANIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.)
During April 1997, the Company advanced $249,000 on behalf of MSM to repay
a loan MSM had incurred from a third party. The balance due from MSM on
this advance was $247,000 at December 31, 1997 and 1998 and at June 30,
1999.
Also, Mercury Wireless Management, Inc. ("MWM"), a company owned by members
of the Company's management, reimburses the Company for expenses relating
to services performed by the Company's employees on behalf of MWM. Such
amounts totaled $17,000 for 1997 and $11,000 for 1998 and were included in
amounts due from affiliates at December 31, 1997 and 1998. The Company has
also entered into various leases to co-locate its equipment on certain
towers managed by MWM.
In 1999, Tritel entered into a management agreement with Tritel Management,
LLC, a company owned by members of the Company's management, under which
Tritel Management, LLC is responsible for the design and construction of
the network and operation of the Company, subject to the Company's control.
The Company will pay Tritel Management, LLC a fee of $10,000 annually for
five years under the terms of the agreement.
On January 7, 1999, the Company entered into a secured promissory note
agreement under which it agreed to lend up to $2,500,000 to the Predecessor
Company. Interest on advances under the loan agreement is 10% per year. The
interest will compound annually and interest and principal are due at
maturity of the note. The note is secured by the Predecessor Company's
ownership interest in the Company. Any proceeds from the sales of licenses
by the Predecessor Company, net of the repayment of any FCC debt, are
required to be applied to the note balance. If the note has not been repaid
within five years, it will be repaid through a reduction of the Predecessor
Company's interest in the Company based on a valuation of the Company's
stock at that time.
Additional related party transactions are described in note 9.
(14) ASSETS AND LIABILITIES RETAINED BY PREDECESSOR COMPANY
Certain assets and liabilities, with carrying amounts of $22,070,000 and
$17,367,000, respectively, principally for certain FCC licenses and related
FCC debt, which were retained by the Predecessor Company have been
reflected in these financial statements as a distribution to the
Predecessor Company. The Predecessor Company is holding such assets and
liabilities but is not currently developing the PCS markets. Of the assets
retained by the Predecessor Company, Tritel was granted an option to
acquire certain PCS licenses for Series C Preferred Stock with a face value
of approximately $3,000,000 and assumption of the related FCC debt of
approximately $12,000,000. During May 1999, Tritel notified the Predecessor
Company of its intent to exercise this option. Such licenses will be
transferred to Tritel after approval by the FCC. Tritel has committed to
grant an option to AT&T Wireless or its designee for the purchase of such
licenses.
(15) LEASES
The Company leases office space, equipment, and co-location tower space
under noncancelable operating leases. Expense under operating leases was
$3,000 and $334,000 for 1997 and 1998, respectively and was $14,000 and
$1,519,000 for the six month periods ended June 30, 1998 and 1999.
Management expects that in the normal course of business these leases will
be renewed or replaced by similar leases. The leases extend through 2008.
F-23
<PAGE>
TRITEL, INC. AND PREDECESSOR COMPANIES
(DEVELOPMENT STAGE COMPANIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.)
Future minimum lease payments under these leases at December 31, 1998 are
as follows:
<TABLE>
<CAPTION>
(DOLLARS IN THOUSANDS)
<S> <C>
1999 .................... $1,134
2000 .................... 864
2001 .................... 742
2002 .................... 708
2003 .................... 582
Thereafter .............. 135
------
$4,165
======
</TABLE>
(16) COMMITMENTS AND CONTINGENCIES
In December 1998, the Company entered into an acquisition agreement with an
equipment vendor whereby the Company agreed to purchase a minimum of
$300,000,000 of equipment, software and certain engineering services over a
five-year period in connection with the construction of its wireless
telecommunications network. The Company agreed that the equipment vendor
would be the exclusive provider of such equipment during the term of the
agreement. As part of this agreement, the vendor advanced $15,000,000 to
the Company at the closing of the transactions described herein. The
$15,000,000 deferred credit will be accounted for as a reduction in the
cost of the equipment as the equipment is purchased.
During November 1996, High Plains Wireless, L.P. filed a protest with the
FCC against the Predecessor Company alleging, among other things, that
through the use of trailing numbers (i.e., the last three digits) in its
bids, the Predecessor Company was signaling market preferences and other
information to other bidders in violation of FCC rules. While the FCC was
investigating this specific claim, it issued all but nine of the D-, E- and
F-Block licenses awarded to the Predecessor Company in the January 1997
auctions. Subsequently, the FCC issued the remaining nine licenses to the
Predecessor Company in November 1997 and assessed the Predecessor Company a
$650,000 fine for apparent violations of FCC bidding rules in connection
with the Predecessor Company's bidding practices. In August 1998, the FCC
rescinded the $650,000 fine, finding that its rules were not sufficiently
clear as to be enforceable against the Company.
The United States Department of Justice ("DOJ") conducted an investigation
of the Predecessor Company and numerous other parties relating to this same
matter. While a suit was filed against the Predecessor Company in November
1998 by the DOJ, the suit was simultaneously settled pursuant to a consent
decree that imposed no penalties and made no finding of wrongdoing.
The Predecessor Company and certain members of the Company's management are
defendants in a lawsuit in which the plaintiffs allege that a member of the
Company's management knew confidential information about one of the
plaintiffs and that the Predecessor Company conspired to use the
information in the D-, E- and F-Block auctions in violation of pre-existing
contractual arrangements between the management member and one of the
plaintiffs. The suit seeks actual and punitive damages and seeks to convey
the F-Block licenses for Lubbock, Texas to the plaintiffs. Management
believes this case is without merit and intends to vigorously defend the
case.
Additionally, the Predecessor Company, certain members of the Company's
management and several companies related through common ownership are
defendants in a lawsuit in which the plaintiff has claimed wrongful
termination of employment, breach of contract, usurpation of corporate
opportunities, breach of fiduciary duties and other matters. The suit seeks
unspecified
F-24
<PAGE>
TRITEL, INC. AND PREDECESSOR COMPANIES
(DEVELOPMENT STAGE COMPANIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.)
actual and punitive damages plus attorneys' fees and court costs. Further,
the plaintiff seeks 5% of the portion of stock (equity) and FCC licenses of
the Predecessor Company owned by certain members of the Company's
management. Management is vigorously defending all claims in the suit and
believes that the Company's business prospects are not materially affected
by this matter and that adverse resolution of this matter would not have a
material adverse effect on the Company.
(17) SENIOR SUBORDINATED DISCOUNT NOTES
On May 11, 1999, Tritel PCS, Inc. ("Tritel PCS"), a wholly-owned subsidiary
of the Company, issued unsecured senior subordinated discount notes with a
principal amount at maturity of $372,000,000. Such notes were issued at a
discount from their principal amount at maturity for proceeds of $200.2
million. No interest will be paid or accrued on the notes prior to May 15,
2004. Thereafter, Tritel PCS will be required to pay interest semiannually
at 123/4% per annum beginning on November 15, 2004 until maturity of the
notes on May 15, 2009.
The notes are fully unconditionally guaranteed on a joint and several basis
by the Company and by Tritel Communications, Inc. and Tritel Finance, Inc.,
both of which are wholly-owned subsidiaries of Tritel PCS. The notes are
subordinated in right of payment to amounts outstanding under the Company's
$550 million senior bank facility ("Bank Facility") and to any future
subordinated indebtedness of Tritel PCS or the guarantors.
Tritel PCS entered into a registration rights agreement with the initial
purchasers of the notes whereby Tritel PCS agreed to file a registration
statement with the SEC to register the notes within 60 days after the issue
date of the notes.
The indenture governing the notes limit, among other things, the Company's
ability to incur additional indebtedness, pay dividends, sell or exchange
assets, repurchase its stock, or make investments.
The following condensed consolidating financial statements as of and for
the six-month period ended June 30, 1999 are presented for Tritel, Tritel
PCS, those subsidiaries of Tritel PCS who serve as guarantors and those
subsidiaries who do not serve as guarantors of the senior subordinated
discount notes.
F-25
<PAGE>
TRITEL, INC. AND PREDECESSOR COMPANIES
(DEVELOPMENT STAGE COMPANIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.)
CONDENSED CONSOLIDATING BALANCE SHEET
AS OF JUNE 30, 1999
<TABLE>
<CAPTION>
TRITEL GUARANTOR
TRITEL, INC. PCS, INC. SUBSIDIARIES
-------------- ----------- --------------
(AMOUNTS IN THOUSANDS)
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents ..................... $ 0 388,526 4,575
Other current assets .......................... 1,324 21 1,286
Intercompany receivables ...................... 695 75,071 5,401
-------- ------- -----
Total current assets ......................... 2,019 463,618 11,262
Restricted cash ................................ 0 5,161 0
Property and equipment, net .................... 0 0 60,686
Licenses and other intangibles ................. 38,857 0 0
Deferred charges ............................... 0 29,938 0
Notes receivable ............................... 0 7,500 50
Investment in subsidiaries ..................... 175,655 92,369 0
Other long-term assets ......................... 0 228 0
-------- ------- ------
Total assets ................................. $216,531 598,814 71,998
======== ======= ======
Current liabilities:
Accounts payable, accrued expenses and
other current liabilities .................... $ 0 1,103 5,183
Intercompany payables ......................... 823 3,390 75,071
-------- ------- ------
Total current liabilities .................... 823 4,493 80,254
Non-current liabilities:
Long-term debt ................................ 0 403,656 0
Accrued interest and dividends payable ........ 4,347 0 0
Deferred credit ............................... 0 15,000 0
Deferred income taxes ......................... 14,158 10 (5,504)
-------- ------- ------
Total liabilities ............................ 19,328 423,159 74,750
-------- ------- ------
Series A redeemable convertible preferred
stock ......................................... 69,109 0 0
-------- ------- ------
Stockholders' equity ........................... 128,094 175,655 (2,752)
-------- ------- ------
Total liabilities and equity ................. $216,531 598,814 71,998
======== ======= ======
<PAGE>
<CAPTION>
NON-GUARANTOR
SUBSIDIARIES ELIMINATIONS CONSOLIDATED
-------------- -------------- -------------
(AMOUNTS IN THOUSANDS)
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents ..................... 0 0 393,101
Other current assets .......................... 0 0 2,631
Intercompany receivables ...................... 0 (81,167) 0
- ------- -------
Total current assets ......................... 0 (81,167) 395,732
Restricted cash ................................ 0 0 5,161
Property and equipment, net .................... 0 0 60,686
Licenses and other intangibles ................. 158,893 0 197,750
Deferred charges ............................... 0 0 29,938
Notes receivable ............................... 0 0 7,550
Investment in subsidiaries ..................... 0 (268,024) 0
Other long-term assets ......................... 0 0 228
------- -------- -------
Total assets ................................. 158,893 (349,191) 697,045
======= ======== =======
Current liabilities:
Accounts payable, accrued expenses and
other current liabilities .................... 1,502 0 7,788
Intercompany payables ......................... 1,883 (81,167) 0
------- -------- -------
Total current liabilities .................... 3,385 (81,167) 7,788
Non-current liabilities:
Long-term debt ................................ 40,987 0 444,643
Accrued interest and dividends payable ........ 0 0 4,347
Deferred credit ............................... 0 0 15,000
Deferred income taxes ......................... 19,400 0 28,064
------- -------- -------
Total liabilities ............................ 63,772 (81,167) 499,842
------- -------- -------
Series A redeemable convertible preferred
stock ......................................... 0 0 69,109
------- -------- -------
Stockholders' equity ........................... 95,121 (268,024) 128,094
------- -------- -------
Total liabilities and equity ................. 158,893 (349,191) 697,045
======= ======== =======
</TABLE>
F-26
<PAGE>
TRITEL, INC. AND PREDECESSOR COMPANIES
(DEVELOPMENT STAGE COMPANIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.)
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE SIX-MONTHS ENDED JUNE 30, 1999
<TABLE>
<CAPTION>
TRITEL GUARANTOR
TRITEL, INC. PCS, INC. SUBSIDIARIES
-------------- ----------- --------------
(AMOUNTS IN THOUSANDS)
<S> <C> <C> <C>
Revenues ................................... $ 0 0 0
-------- - -
Operating expenses:
Plant expenses ............................ 0 0 3,946
General and administrative ................ 2 44 7,156
Sales and marketing ....................... 0 0 2,724
Depreciation and amortization ............. 1,753 0 645
-------- -- -----
1,755 44 14,471
-------- -- ------
Operating loss ............................. (1,755) (44) (14,471)
Interest income ............................ 77 5,174 81
Financing cost ............................. 0 0 (2,230)
Interest expense ........................... 0 (5,104) 0
-------- ------ -------
Income (loss) before income taxes ......... (1,678) 26 (16,620)
Income tax benefit (expenses) .............. 542 (10) 5,504
-------- ------ -------
Net income (loss) .......................... $ (1,136) 16 (11,116)
======== ====== =======
<CAPTION>
NON-GUARANTOR
SUBSIDIARIES ELIMINATIONS CONSOLIDATED
-------------- -------------- -------------
(AMOUNTS IN THOUSANDS)
<S> <C> <C> <C>
Revenues ................................... 0 0 0
- ---- -
Operating expenses:
Plant expenses ............................ 0 0 3,946
General and administrative ................ 2 0 7,204
Sales and marketing ....................... 0 0 2,724
Depreciation and amortization ............. 0 0 2,398
- ---- -----
2 0 16,272
- ---- ------
Operating loss ............................. (2) 0 (16,272)
Interest income ............................ 0 0 5,332
Financing cost ............................. 0 0 (2,230)
Interest expense ........................... 0 0 (5,104)
--- ---- -------
Income (loss) before income taxes ......... (2) 0 (18,274)
Income tax benefit (expenses) .............. 0 0 6,036
--- ---- -------
Net income (loss) .......................... (2) 0 (12,238)
==== ==== =======
</TABLE>
F-27
<PAGE>
TRITEL, INC. AND PREDECESSOR COMPANIES
(DEVELOPMENT STAGE COMPANIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.)
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE SIX-MONTHS ENDED JUNE 30, 1999
<TABLE>
<CAPTION>
TRITEL GUARANTOR
TRITEL, INC. PCS, INC. SUBSIDIARIES
-------------- ----------- --------------
(AMOUNTS IN THOUSANDS)
<S> <C> <C> <C>
Net cash provided by (used in) operating
activities ........................................ $ (94) 880 (14,946)
---------- --- -------
Cash flows from investing activities:
Capital expenditures .............................. 0 0 (44,687)
Purchase of a trademark ........................... (325) 0 0
Advance under notes receivable .................... 0 (7,500) (50)
Investment in subsidiaries ........................ (69,386) 69,386 0
Capitalized interest on debt used to obtain
licenses ......................................... 0 0 0
Capitalized interest on network construction....... 0 0 (4,271)
---------- ------ -------
Net cash provided by (used in) investing
activities ........................................ (69,711) 61,886 (49,008)
---------- ------ -------
Cash flows from financing activities:
Proceeds from long term debt ...................... 0 200,000 0
Proceeds from senior subordinated debt ............ 0 200,240 0
Repayments of notes payable ....................... (22,100) 0 0
Payment of debt issuance costs & other
deferred charges ................................. (22,198) (14,275) 0
Intercompany receivable/payable ................... 480 (70,044) 67,683
Proceeds from vendor discount ..................... 0 15,000 0
Issuance of preferred stock ....................... 113,623 0 0
---------- ------- -------
Net cash provided by financing activities .......... 69,805 330,921 67,683
---------- ------- -------
Net increase (decrease) in restricted cash, cash
and cash equivalents .............................. 0 393,687 3,729
Restricted cash, cash and cash equivalents at
beginning of period ............................... 0 0 846
---------- ------- -------
Restricted cash, cash and cash equivalents at
end of period ..................................... $ 0 393,687 4,575
========== ======= =======
<PAGE>
<CAPTION>
NON-GUARANTOR
SUBSIDIARIES ELIMINATIONS CONSOLIDATED
-------------- -------------- -------------
(AMOUNTS IN THOUSANDS)
<S> <C> <C> <C>
Net cash provided by (used in) operating
activities ........................................ (256) 0 (14,416)
---- ----- -------
Cash flows from investing activities:
Capital expenditures .............................. 0 0 (44,687)
Purchase of a trademark ........................... 0 0 (325)
Advance under notes receivable .................... 0 0 (7,550)
Investment in subsidiaries ........................ 0 0 0
Capitalized interest on debt used to obtain
licenses ......................................... (1,625) 0 (1,625)
Capitalized interest on network construction....... 0 0 (4,271)
------ ----- -------
Net cash provided by (used in) investing
activities ........................................ (1,625) 0 (58,458)
------ ----- -------
Cash flows from financing activities:
Proceeds from long term debt ...................... 0 0 200,000
Proceeds from senior subordinated debt ............ 0 0 200,240
Repayments of notes payable ....................... 0 0 (22,100)
Payment of debt issuance costs & other
deferred charges ................................. 0 0 (36,473)
Intercompany receivable/payable ................... 1,881 0 0
Proceeds from vendor discount ..................... 0 0 15,000
Issuance of preferred stock ....................... 0 0 113,623
------ ----- -------
Net cash provided by financing activities .......... 1,881 0 470,290
------ ----- -------
Net increase (decrease) in restricted cash, cash
and cash equivalents .............................. 0 0 397,416
Restricted cash, cash and cash equivalents at
beginning of period ............................... 0 0 846
------ ----- -------
Restricted cash, cash and cash equivalents at
end of period ..................................... 0 0 398,262
====== ===== =======
</TABLE>
The condensed combining financial statements for 1998 of Tritel, Inc. and
the Predecessor Companies have been provided below to comply with the
current requirement to show consolidating data for guarantors and
non-guarantors for all periods presented. While Tritel, Inc. and its
subsidiaries were formed during 1998, their only activities in 1998 were
the acquisition of property and equipment approximating $1.5 million and
losses totaling $32,000. The assets of the Predecessor Companies and the
assets acquired from AT&T Wireless and Central Alabama were placed in
Tritel, Inc. and its subsidiaries during 1999. Therefore, the following
statements do not correspond with the current corporate structure and do
not show data by guarantor and non-guarantor relationship to the senior
subordinated discount notes.
F-28
<PAGE>
TRITEL, INC. AND PREDECESSOR COMPANIES
(DEVELOPMENT STAGE COMPANIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.)
COMBINING BALANCE SHEET
AS OF DECEMBER 31, 1998
<TABLE>
<CAPTION>
PREDECESSOR
COMPANIES TRITEL ELIMINATIONS COMBINED
------------ -------- -------------- ------------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents .................................... $ 845 1 -- 846
Due from affiliates .......................................... 1,817 -- (1,576) 241
Other current assets ......................................... 719 -- -- 719
--------- -- ------ ---
Total current assets .................................... 3,381 1 (1,576) 1,806
Property and equipment, net ................................... 12,263 1,553 -- 13,816
FCC licensing costs ........................................... 71,466 -- -- 71,466
Deferred charges, net of accumulated amortization ............. 1,933 -- -- 1,933
--------- ----- ------ ------
Total assets ............................................ $ 89,043 1,554 (1,576) 89,021
========= ===== ====== ======
LIABILITIES AND MEMBERS' EQUITY (DEFICIT)
Current liabilities:
Notes payable ................................................ $ 22,405 -- -- 22,405
Due to affiliates ............................................ -- 1,576 (1,576) --
Accounts payable, accrued expenses and interest .............. 10,496 10 -- 10,506
--------- ----- ------ ------
Total current liabilities ............................... 32,901 1,586 (1,576) 32,911
--------- ----- ------ ------
Non-current liabilities:
Long-term debt ............................................... 51,599 -- -- 51,599
Note payable to related party ................................ 6,270 -- -- 6,270
Accrued interest payable ..................................... 224 -- -- 224
--------- ----- ------ ------
Total non-current liabilities ........................... 58,093 -- -- 58,093
--------- ----- ------ ------
Total liabilities ....................................... 90,994 1,586 (1,576) 91,004
Contributed capital, net ...................................... 13,497 -- -- 13,497
Deficit accumulated during development stage .................. (15,448) (32) -- (15,480)
--------- ----- ------ -------
Total members' equity (deficit) ......................... (1,951) (32) -- (1,983)
--------- ----- ------ -------
Total liabilities and members' equity (deficit) ......... $ 89,043 1,554 (1,576) 89,021
========= ===== ====== =======
</TABLE>
F-29
<PAGE>
TRITEL, INC. AND PREDECESSOR COMPANIES
(DEVELOPMENT STAGE COMPANIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.)
COMBINING STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
PREDECESSOR
COMPANIES TRITEL COMBINED
------------ -------- -----------
<S> <C> <C> <C>
Revenues: .................................. $ -- -- --
--------- -- --
Operating expenses:
Plant expenses ............................ 1,918 21 1,939
General and administrative ................ 4,937 10 4,947
Sales and marketing ....................... 451 1 452
--------- ----- -----
Depreciation and amortization ............. 348 -- 348
--------- ----- -----
7,654 32 7,686
--------- ----- -----
Operating loss ............................. (7,654) (32) (7,686)
Interest income ............................ 77 -- 77
Interest expenses .......................... (722) -- (722)
--------- ----- ------
Loss before extraordinary item ......... (8,299) (32) (8,331)
Loss on return of spectrum ................. (2,414) -- (2,414)
--------- ----- ------
Net loss ............................... $ (10,713) (32) (10,745)
========= ===== =======
</TABLE>
F-30
<PAGE>
TRITEL, INC. AND PREDECESSOR COMPANIES
(DEVELOPMENT STAGE COMPANIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.)
COMBINING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
PREDECESSOR
COMPANIES TRITEL COMBINED
------------ ----------- -----------
<S> <C> <C> <C>
Net cash used in operating activities .............................. (10,039) 1,543 (8,496)
------- ----- ------
Cash flows from investing activities:
Purchase of property and equipment ................................ (4,428) (1,542) (5,970)
Capitalized interest on debt used to obtain FCC licenses .......... (2,905) -- (2,905)
------- ------ ------
Net cash used in investing activities ............................ (7,333) (1,542) (8,875)
------- ------ ------
Cash flows from financing activities:
Proceeds from notes payable to others ............................. 38,705 -- 38,705
Repayments of notes payable to others ............................. (21,300) -- (21,300)
Payment of debt issuance costs and other deferred charges ......... (951) -- (951)
------- ------ -------
Net cash provided by financing activities ........................ 16,454 -- 16,454
------- ------ -------
Net increase (decrease) in cash and cash equivalents ............... (918) 1 (917)
Restricted cash and cash equivalents at beginning of year .......... 1,763 -- 1,763
------- ------ -------
Restricted cash and cash equivalents at end of year ................ 845 1 846
======= ====== =======
</TABLE>
Tritel, Inc. was formed during 1998. Therefore, the 1996 and 1997 combining
financial information is identical to the Consolidated Financial
Statements.
(18) CASH EQUITY INVESTORS
On May 20, 1998, the Company, the Predecessor Company, AT&T Wireless,
certain institutional cash equity investors (the "Cash Equity Investors")
and certain members of management entered into the Securities Purchase
Agreement, which provided for the formation of the Tritel-AT&T Wireless
joint venture and related equity investments. On January 7, 1999, the
transactions contemplated by the Securities Purchase Agreement were closed
and the parties entered into numerous agreements as described throughout
these notes. Pursuant to these agreements, on January 7, 1999, the
Predecessor Company invested an additional $14,130,000 in Series C
Preferred Stock of Tritel, and the Cash Equity Investors purchased an
aggregate of $149,239,000 of Series C Preferred Stock of Tritel. Of the
total Series C Preferred Stock issued to the Predecessor Company and the
Cash Equity Investors, $113,623,000 was funded on January 7, 1999 and the
remaining $49,746,000 is due to be funded, under the Cash Equity Investors'
irrevocable and unconditional commitments, on September 30, 1999.
(19) TRANSACTION WITH AT&T WIRELESS
On May 20, 1998, the Predecessor Company and Tritel entered into a
Securities Purchase Agreement with AT&T Wireless and the other stockholders
of Tritel, whereby the Company agreed to construct a PCS network and
provide wireless services using the AT&T brand name in the south-central
United States.
On January 7, 1999, the parties closed the transactions contemplated in the
Securities Purchase Agreement. Under these agreements, Tritel and AT&T
Wireless and the other stockholders of
F-31
<PAGE>
TRITEL, INC. AND PREDECESSOR COMPANIES
(DEVELOPMENT STAGE COMPANIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.)
Tritel consented that one or more of Tritel's subsidiaries enter into
certain agreements or conduct certain operations on the condition that such
subsidiaries at all times be direct or indirect wholly-owned subsidiaries
of Tritel. Tritel agreed that it would cause such subsidiaries to perform
the obligations and conduct such operations required to be performed or
conducted under those agreements.
At the closing, Tritel issued preferred stock to AT&T Wireless in exchange
for 20 MHz A- and B-Block PCS licenses which were assigned to the Company,
and for certain other agreements covering the Company's markets. The
estimated fair value of the FCC licenses was $97,880,000 with an estimated
useful life of 40 years.
The following table summarizes the transaction with AT&T Wireless:
<TABLE>
<S> <C>
Assets acquired from AT&T Wireless, at fair value:
PCS Licenses ......................................................... $ 97,880,000
License Agreement .................................................... 31,000,000
Roaming Agreement .................................................... 10,000,000
-------------
Gross Assets Acquired .............................................. 138,880,000
Deferred income tax liability assumed relating to above assets ........ (35,100,000)
-------------
Net Assets Acquired ................................................ $ 103,780,000
-------------
</TABLE>
<TABLE>
<CAPTION>
SERIES A SERIES D
PREFERRED PREFERRED TOTAL
ALLOCATION OF FAIR VALUE ADJUSTMENT ---------------- ---------------- ----------------
<S> <C> <C> <C>
Preferred stock issued at stated value ......... $ 90,668,000 46,374,000 137,042,000
Allocation of fair value adjustment ............ (21,984,000) (11,278,000) (33,262,000)
------------- ----------- -----------
$ 68,684,000 35,096,000 103,780,000
============= =========== ===========
</TABLE>
The Series A and Series D Preferred Stock were recorded at a discount from
their stated value for the excess of the stated value of the stock over the
fair value of the net assets acquired. The Series A Preferred Stock issued
by the Company is further described in Note 22 and the Series D Preferred
Stock is further described in Note 10.
In connection with the closing of the AT&T Wireless transaction, the
Company entered into certain agreements, including the following:
(A) LICENSE AGREEMENT
Pursuant to a Network Membership License Agreement, dated January 7,
1999 (the "License Agreement"), between AT&T Corp. and the Company, AT&T
Wireless granted to the Company a royalty-free, nontransferable,
non-exclusive, nonsublicensable, limited right, and license to use
certain licensed marks solely in connection with certain licensed
activities. The licensed marks include the logo containing AT&T and the
globe design and the expression "Member, AT&T Wireless Services
Network." The "Licensed Activities" include (i) the provision to
end-users and resellers, solely within the territory as defined in the
License Agreement, of Company communications services as defined in the
License Agreement on frequencies licensed to the Company for Commercial
Mobile Radio Services ("CMRS") provided in accordance with the License
Agreement (collectively, the "Licensed Services") and (ii) marketing and
offering the Licensed Services within the territory. The License
Agreement also grants to the Company the right and license to use
licensed marks on certain permitted mobile phones.
F-32
<PAGE>
TRITEL, INC. AND PREDECESSOR COMPANIES
(DEVELOPMENT STAGE COMPANIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.)
The License Agreement contains numerous restrictions with respect to the
use and modification of any of the licensed marks. Furthermore, the
Company is obligated to use commercially reasonable efforts to cause all
Licensed Services marketed and provided using the licensed marks to be
of comparable quality to the Licensed Services marketed and provided by
AT&T and its affiliates in areas that are comparable to the territory
taking into account, among other things, the relative stage of
development of the areas. The License Agreement also sets forth specific
testing procedures to determine compliance with these standards, and
affords the Company with a grace period to cure any instances of alleged
noncompliance therewith.
The Company may not assign or sublicense any of its rights under the
License Agreement; provided, however, that the License Agreement may be
assigned to the Company's lenders under the Bank Facility (see Note 20)
and after the expiration of any applicable grace and cure periods under
the Bank Facility, such lenders may enforce the Company's rights under
the License Agreement and assign the License Agreement to any person
with AT&T Wireless's consent.
The term of the License Agreement is for five years and renews for an
additional five-year period if each party gives the other notice to
renew the Agreement. The License Agreement may be terminated by AT&T
Wireless at any time in the event of a significant breach by the
Company, including the Company's misuse of any licensed marks, the
Company licensing or assigning any of the rights in the License
Agreement, the Company's failure to maintain AT&T Wireless's quality
standards or if a change in control of the Company occurs. After the
initial five-year term, AT&T Wireless may also terminate the License
Agreement upon the occurrence of certain transactions described in the
Stockholders' Agreement.
The License Agreement, along with the exclusivity provisions of the
Stockholders' Agreement and the Resale Agreement, have an estimated fair
value of $31,000,000 and will be amortized on a straight-line basis over
the ten-year term of the agreement.
(B) ROAMING AGREEMENT
Pursuant to the Intercarrier Roamer Service Agreement, dated as of
January 7, 1999 (the "Roaming Agreement"), between AT&T Wireless, the
Company, and their affiliates, each party agrees to provide (each in its
capacity as serving provider, the "Serving Carrier") mobile wireless
radiotelephone service for registered customers of the other party's
(the "Home Carrier") customers while such customers are out of the Home
Carrier's geographic area and in the geographic area where the Serving
Carrier (itself or through affiliates) holds a license or permit to
construct and operate a mobile wireless radio/telephone system and
station. Each Home Carrier whose customers receive service from a
Serving Carrier shall pay to such Serving Carrier 100% of the Serving
Carrier's charges for wireless service and 100% of pass-through charges
(i.e., toll or other charges). Each Serving Carrier's service charges
for use per minute or partial minute for the first three years will be
at a fixed rate, and thereafter may be adjusted to a lower rate as the
parties may negotiate from time to time. Each Serving Carrier's toll
charges per minute of use for the first three years will be at a fixed
rate, and thereafter such other rates as the parties negotiate from time
to time.
The Roaming Agreement has a term of 20 years, unless terminated earlier
by a party due to the other party's uncured breach of any term of the
Roaming Agreement.
F-33
<PAGE>
TRITEL, INC. AND PREDECESSOR COMPANIES
(DEVELOPMENT STAGE COMPANIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS 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 applicable part of the obligations of such party under the
Roaming Agreement.
The estimated fair value of the Roaming Agreement is $10,000,000, which
will be amortized on a straight-line basis over the 20-year term of the
agreement.
(C) STOCKHOLDERS' AGREEMENT
The Stockholders' Agreement expires on January 7, 2010. Certain
provisions expire upon an initial public offering.
Exclusivity
Under the Stockholders' Agreement, none of the Stockholders will provide
or resell, or act as the agent for any person offering, within the
Territory, mobile wireless telecommunications services and frequencies
licensed by the FCC ("Company Communications Services"), except AT&T
Wireless and its affiliates may (i) resell or act as agent for the
Company in connection with the provision of Company Communications
Services, (ii) provide or resell wireless telecommunications services to
or from certain specific locations, and (iii) resell Company
Communications Services for another person in any area where the Company
has not placed a system into commercial service in certain instances.
Additionally, with respect to the markets listed on the Roaming
Agreement, the Company and AT&T Wireless agree to cause their respective
affiliates in their home carrier capacities to program and direct the
programming of customer equipment so that the other party in its
capacity as the serving carrier is the preferred provider in such
markets, and refrain from inducing any of its customers to change such
programming.
Build-out
The Company is required to conform to certain requirements regarding the
construction of the Company's PCS system. In the event that the Company
breaches these requirements, AT&T Wireless may terminate its exclusivity
provisions.
Disqualifying Transactions
In the event of a merger, asset sale or consolidation, as defined,
involving AT&T Wireless and another person that derives annual revenues
in excess of $5,000,000,000, derives less than one third of its
aggregate revenues from wireless telecommunications, and owns FCC
licenses to offer mobile wireless telecommunications services to more
than 25% of the population within the Company's territory, AT&T Wireless
and the Company have certain rights. AT&T may terminate its exclusivity
in the territory in which the other party overlaps that of the Company.
Resale Agreement
Pursuant to the Stockholders' Agreement, the Company is required to
enter into a Resale Agreement at the request of AT&T Wireless. Under
this agreement, AT&T Wireless will be granted the right to purchase and
resell on a nonexclusive basis access to and usage of the Company's
services in the Company's licensed area. The Company will retain the
continuing right to market and sell its services to customers and
potential customers in competition with AT&T Wireless.
F-34
<PAGE>
TRITEL, INC. AND PREDECESSOR COMPANIES
(DEVELOPMENT STAGE COMPANIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.)
The Resale Agreement will have a term of ten years and will renew
automatically for successive one-year periods unless, after the eleventh
anniversary thereof, either party elects to terminate the Resale
Agreement. Furthermore, AT&T Wireless may terminate the Resale Agreement
at any time for any reason on 90 days written notice.
The Company has agreed that the rates, terms and conditions of service,
taken as a whole, provided by the Company to AT&T Wireless pursuant to
the Resale Agreement, shall be at least as favorable as (or if permitted
by applicable law, superior to) the rates, terms, and conditions of
service, taken as a whole, provided by the Company to any other
customer. Without limiting the foregoing, the rate plans offered by the
Company pursuant to the Resale Agreement shall be designed to result in
a discounted average actual rate per minute paid by AT&T Wireless for
service below the weighted average actual rate per minute billed by the
Company to its subscribers generally for access and air time.
Neither party may assign or transfer the Resale Agreement or any of its
rights thereunder without the other party's prior written consent, which
will not be unreasonably withheld, except (a) to an affiliate of that
party at the time of execution of the Resale Agreement, (b) by the
Company to any of its operating subsidiaries, and (c) to the transferee
of a party's stock or substantially all of its assets, provided that all
FCC and other necessary approvals have been received.
The Company expects to enter into the Resale Agreement upon commencement
of its operations in the initial configuration.
(20) BANK FACILITY
Subsequent to December 31, 1998, the Company entered into a loan agreement
(the "Bank Facility"), which provides for (i) a $100,000,000 senior secured
term loan (the "Term Loan A"), (ii) a $200,000,000 senior secured term loan
(the "Term Loan B") and (iii) a $250,000,000 senior secured reducing
revolving credit facility (the "Revolver"). Tritel PCS Inc., Toronto
Dominion (Texas), Inc., as Administrative Agent, and certain banks and
other financial institutions are parties thereto.
F-35
<PAGE>
TRITEL, INC. AND PREDECESSOR COMPANIES
(DEVELOPMENT STAGE COMPANIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.)
The commitment to make loans under the Revolver automatically and
permanently reduces, beginning on December 31, 2002. Also, advances under
Term Loan A and Term Loan B are required to be repaid beginning on December
31, 2002, in consecutive quarterly installments. Following is a schedule of
the required reductions in the Revolver and the payments on the term loans:
<TABLE>
<CAPTION>
REPAYMENT DATES REVOLVER TERM LOAN A TERM LOAN B
- -------------------------------------- ---------- ------------- ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
December 31, 2002 .............. $ 6,250 $ 2,500 $ 2,000
March 31, 2003, June 30, 2003,
September 30, 2003 and
December 31, 2003 ............. 7,422 2,969 500
March 31, 2004, June 30, 2004,
September 30, 2004 and
December 31, 2004 ............. 11,328 4,531 500
March 31, 2005, June 30, 2005,
September 30, 2005 and
December 31, 2005 ............. 13,281 5,313 500
March 31, 2006, June 30, 2006,
September 30, 2006 and
December 31, 2006 ............. 16,015 6,406 500
March 31, 2007 and June 30, 2007 25,781 10,313 500
September 30, 2007 ............. -- -- 500
December 31, 2007 .............. -- -- 188,500
</TABLE>
Interest on the Revolver, Term Loan A and Term Loan B accrues, at the
Company's option, either at a LIBOR rate plus an applicable margin or the
higher of the issuing bank's prime rate and the Federal Funds Rate (as
defined in the Bank Facility) plus 0.5%, plus an applicable margin. The
Revolver and Term Loan A require an annual commitment fee ranging from
0.50% to 1.75% of the unused portion of the Bank Facility. Advances under
Term Loan A and funds under the Revolving Bank Facility are not available
to the Company until Term Loan B is fully drawn or becomes unavailable
pursuant to the terms of the Bank Facility.
The Bank Facility also requires the Company to purchase an interest rate
hedging contract covering an amount equal to at least 50% of the total
amount of the outstanding indebtedness of the Company (other than
indebtedness which bears interest at a fixed rate). Such interest rate
hedging contracts are further described in Note 23.
The Term Loans are required to be prepaid and commitments under the
Revolving Bank Facility reduced in an aggregate amount equal to 50% of
excess cash flow of each fiscal year commencing with the fiscal year ending
December 31, 2001; 100% of the net proceeds of asset sales, in excess of a
yearly threshold, outside the ordinary course of business or unused
insurance proceeds; and 50% of the net cash proceeds of issuances of equity
securities (other than in connection with the equity commitments referred
to in Note 18).
All obligations of the Company under the facilities are unconditionally and
irrevocably guaranteed (the "Bank Facility Guarantees") by Tritel, Inc. and
all subsidiaries of Tritel PCS, Inc. The bank facilities and guarantees,
and any related hedging contracts provided by the lenders under the Bank
Facility, are secured by substantially all of the assets of Tritel PCS,
Inc. and certain subsidiaries of Tritel PCS, Inc., including a first
priority pledge of all of the capital stock
F-36
<PAGE>
TRITEL, INC. AND PREDECESSOR COMPANIES
(DEVELOPMENT STAGE COMPANIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.)
held by Tritel or any of its subsidiaries, but excluding the Company's PCS
licenses. The PCS licenses will be held by one or more single purpose
subsidiaries of the Company and, in the future if the Company is permitted
to pledge its PCS licenses, they will be pledged to secure the obligations
of the Company under the Bank Facility.
The Bank Facility contains covenants customary for similar facilities and
transactions, including covenants relating to the amounts of indebtedness
that the Company may incur, limitations on dividends and distributions on,
and redemptions and repurchases of, capital stock and other similar
payments and various financial maintenance covenants. The Bank Facility
also contains covenants relating to the population covered by the Company's
network and number of customers, as well as customary representations,
warranties, indemnities, conditions precedent to borrowing, and events of
default.
Loans under the Bank Facility are available to fund capital expenditures
related to the construction of the Company's PCS network, the acquisition
of related businesses, working capital needs of the Company, and customer
acquisition costs. All indebtedness under the Bank Facility will constitute
senior debt.
The terms of the Bank Facility allow the Company to incur senior
subordinated debt with gross proceeds of not more than $250,000,000.
As of June 30, 1999, the Company has drawn $200,000,000 of advances under
Term Loan B.
(21) STOCK OPTION PLANS
In January 1999, the Company adopted a stock option plan and a stock option
plan for non-employee directors.
Tritel's 1999 Stock Option Plan (the "Stock Option Plan") authorizes the
grant of certain tax-advantaged stock options, nonqualified stock options
and stock appreciation rights for the purchase of an aggregate of up to
13,566 shares of common stock of Tritel. The Stock Option Plan benefits
qualified officers, employee directors and other key employees of, and
consultants to, Tritel and its subsidiaries in order to attract and retain
those persons and to provide those persons with appropriate incentives. The
Stock Option Plan also allows grants or sales of common stock to those
persons. The maximum term of any stock option to be granted under the Stock
Option Plan is ten years. Grants of options under the Stock Option Plan are
determined by the Board of Directors or a compensation committee designated
by the Board.
The exercise price of incentive stock options and nonqualified stock
options granted under the Stock Option Plan must not be less than the fair
market value of the common stock on the grant date. The Stock Option Plan
will terminate in 2009 unless extended by amendment.
During the period from January 7, 1999 to June 30, 1999, 11,395 restricted
shares were granted under the Stock Option Plan. Management has determined
the stock to have a nominal value; therefore, no amounts have been assigned
to the restricted stock. Such shares will vest in varying percentages, up
to 80% vesting, over five years. The remaining 20% will vest if the Company
meets certain performance benchmarks for development and construction of
its wireless PCS network.
Tritel's 1999 Stock Option Plan for Non-employee Directors (the
"Non-employee Directors Plan") authorizes the grant of certain nonqualified
stock options for the purchase of an aggregate of up to 50,000 shares of
common stock of Tritel. The Non-employee Directors Plan benefits
F-37
<PAGE>
TRITEL, INC. AND PREDECESSOR COMPANIES
(DEVELOPMENT STAGE COMPANIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.)
non-employee directors of Tritel in order to attract and retain those
persons and to provide those persons with appropriate incentives. The
maximum term of any stock option to be granted under the Non-employee
Directors Plan is ten years. Grants of options under the Non-employee
Directors are determined by the Board of Directors.
The exercise price of nonqualified stock options granted under the
Non-employee Directors Plan must not be less than the fair market value of
the common stock on the grant date. The Non-employee Directors Plan will
terminate in 2009 unless extended by amendment.
As of June 30, 1999, no options were outstanding under the Non-employee
Directors Plan.
(22) REDEEMABLE PREFERRED STOCK
Following is a summary of the redeemable preferred stock of the Company:
Series A Preferred Stock
The Series A Preferred Stock, with respect to dividend rights and rights on
liquidation, dissolution or winding up, ranks on a parity basis with the
Series B Preferred Stock, and ranks senior to the Series C Preferred Stock,
the Series D Preferred Stock and the Common Stock. The holders of Series A
Preferred Stock are entitled to receive cumulative quarterly cash dividends
at the annual rate of 10% multiplied by the liquidation preference, which
is equal to $1,000 per share plus declared but unpaid dividends. Tritel may
elect to defer payment of any such dividends until the date on which the
42nd quarterly dividend payment is due, at which time, and not earlier, all
deferred payments must be made. Except as required by law or in certain
circumstances, the holders of the Series A Preferred Stock do not have any
voting rights. The Series A Preferred Stock is redeemable, in whole but not
in part, at the option of Tritel on or after January 15, 2009 and at the
option of the holders of the Series A Preferred Stock on or after January
15, 2019. Additionally, on or after January 15, 2007, AT&T Wireless, and
qualified transferees, have the right to convert each share of Series A
Preferred Stock into shares of Class A Common Stock. The number of shares
the holder will receive upon conversion will be the liquidation preference
per share divided by the market price of Class A Common Stock times the
number of shares of Series A Preferred Stock to be converted.
The Company issued 90,668 shares of Series A Preferred Stock with a stated
value of $90,668,000 to AT&T Wireless on January 7, 1999. The stock was
recorded at its stated value and a discount was recorded for the excess of
the stated value of the stock over the fair value of assets, net of
deferred income taxes, received from AT&T Wireless. The discount will be
accreted using the interest method, so that the carrying amount will equal
the redemption amount on January 15, 2019. Each periodic accretion to
increase the carrying amount of the stock will be offset by a charge to
accumulated deficit.
Series B Preferred Stock
The Series B Preferred Stock ranks on a parity basis with the Series A
Preferred Stock and is identical in all respects to the Series A Preferred
Stock, except:
o the Series B Preferred Stock is redeemable at any time at the option of
Tritel,
o the Series B Preferred Stock is not convertible into shares of any
other security issued by Tritel, and
o the Series B Preferred Stock may be issued by Tritel pursuant to an
exchange of capital stock.
F-38
<PAGE>
TRITEL, INC. AND PREDECESSOR COMPANIES
(DEVELOPMENT STAGE COMPANIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.)
No Series B Preferred Stock has been issued by the Company.
(23) INTEREST RATE SWAP AGREEMENTS
Interest rate swap agreements are entered into by the Company to manage
interest rate exposure. These are contractual agreements between
counterparties to exchange interest streams based on notional principal
amounts over a set period of time. Interest rate swap agreements normally
involve the exchange of fixed and floating rate interest payment
obligations without the exchange of the underlying principal amounts. The
notional or principal amount does not represent the amount at risk, but is
used only as a basis for determining the actual interest cash flows to be
exchanged related to the interest rate contracts. Market risk, due to
potential fluctuations in interest rates, is inherent in swap agreements.
As of June 30, 1999, the Company was a party to interest rate swap
agreements with a total notional amount of $200 million. The agreements
establish a fixed effective rate of 9.05% on the current balance
outstanding under the Bank Facility through the earlier of March 31, 2002
or the date on which the Company achieves operating cash flow breakeven.
F-39
<PAGE>
The map on the opposite page is not intended to be an exact representation
of Tritel PCS's wireless service area.
<PAGE>
[inside back cover]
[map of Tritel PCS's wireless service footprint]
<PAGE>
[SUNCOM LOGO]
TRITEL PCS, INC.
OFFER TO EXCHANGE ITS 12 3/4%
SENIOR SUBORDINATED DISCOUNT NOTES DUE 2009
WHICH HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 FOR ANY AND ALL OF ITS
OUTSTANDING 12 3/4% SENIOR SUBORDINATED
DISCOUNT NOTES DUE 2009
--------------------
PROSPECTUS
--------------------
, 1999
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law (the "GCL") provides
as follows:
"(a) A corporation shall have the power to indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of the corporation)
by reason of the fact that the person is or was a director, officer, employee
or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by the person in connection with such action,
suit or proceeding if the person acted in good faith and in a manner the person
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe the person's conduct was unlawful. The termination
of any action, suit or proceeding by judgment, order, settlement, conviction,
or upon a plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that the person did not act in good faith and in a manner
which the person reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that the person's conduct was
unlawful.
(b) A corporation shall have the power to indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that the person is or was a
director, officer, employee or agent of the corporation, or is or was serving
at the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorneys' fees) actually and reasonably incurred
by the person in connection with the defense or settlement of such action or
suit if the person acted in good faith and in a manner the person reasonably
believed to be in or not opposed to the best interests of the corporation and
except that no indemnification shall be made in respect of any claim, issue or
matter as to which such person shall have been adjudged to liable to the
corporation unless and only to the extent that the Court of Chancery or the
court in which such action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such other court
shall deem proper.
(c) To the extent that a present or former director or officer of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections (a) and (b) of this
section, or in defense of any claim, issue or matter therein, such person shall
be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by such person in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this section
(unless ordered by a court) shall be made by the corporation only as authorized
in the specific case upon a determination that indemnification of the present
or former director, officer, employee or agent is proper in the circumstances
because the person has met the applicable standard of conduct set forth in
subsections (a) and (b) of this section. Such determination shall be made with
respect to a person who is a director or officer at the time of such
determination, (1) by a majority vote of the directors who are not parties to
such action, suit or proceeding, even though less than a quorum, or (2) by a
committee of such directors designated by majority vote of such directors, even
though less than a quorum, or (3) if there are no such directors, or if such
directors so direct, by independent legal counsel in a written opinion, or (4)
by the stockholders.
II-1
<PAGE>
(e) Expenses (including attorneys' fees) incurred by an officer or
director in defending any civil, criminal, administrative or investigative
action, suit or proceeding may be paid by the corporation in advance of the
final disposition of such action, suit or proceeding upon receipt of
undertaking by or on behalf of such director or officer to repay such amount if
it shall ultimately be determined that such person is not entitled to be
indemnified by the corporation as authorized in this section. Such expenses
(including attorneys' fees) incurred by former directors and officers or other
employees and agents may be so paid upon such terms and conditions, if any, as
the corporation deems appropriate.
(f) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other subsections of this section shall not be deemed
exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under any bylaw, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in such
person's official capacity and as to action in another capacity while holding
such office.
(g) A corporation shall have power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against such
person and incurred by such person in any such capacity, or arising out of such
person's status as such, whether or not the corporation would have the power to
indemnify such person against such liability under this section.
(h) For purposes of this section, references to "the corporation" shall
include, in addition to the resulting corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers, and employees or agents, so
that any person who is or was a director, officer, employee or agent for such
constituent corporation, or is or was serving at the request of such
constituent corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, shall stand
in the same position under this section with respect to the resulting or
surviving corporation as such person would have with respect to such
constituent corporation if its separate existence had continued.
(i) For purposes of this section, references to "other enterprises" shall
include employee benefit plans; references to "fines" shall include any excise
taxes assessed on a person with respect to an employee benefit plan; and
references to "serving at the request of the corporation" shall include any
service as a director, officer, employee or agent of the corporation which
imposes duties on, or involves services by, such director, officer, employee,
or agent with respect to an employee benefit plan, its participants or
beneficiaries; and a person who acted in good faith and in a manner such person
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the corporation" as referred to in this
section.
(j) The indemnification and advancement of expenses provided by, or
granted pursuant to, this section shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
(k) The Court of Chancery is hereby vested with exclusive jurisdiction to
hear and determine all actions for advancement of expenses or indemnification
brought under this section or under any bylaw, agreement, vote of stockholders
or disinterested directors, or otherwise. The Court of Chancery may summarily
determine a corporation's obligation to advance expenses (including attorneys'
fees)."
Article 6 of Tritel PCS's Bylaws provides:
INDEMNIFICATION
"Indemnification. The Corporation shall, to the fullest extent permitted
by applicable law from time to time in effect, indemnify any and all persons
who may serve or who have served at any time
II-2
<PAGE>
as Directors or officers of the Corporation, or who at the request of the
Corporation may serve or at any time have served as Directors or officers of
another corporation (including subsidiaries of the Corporation) or of any
partnership, joint venture, trust or other enterprise, from and against any and
all of the expenses, liabilities or other matters referred to in or covered by
said law. Such indemnification shall continue as to a person who has ceased to
be a Director or officer and shall inure to the benefit of the heirs, executors
and administrators of such a person. The Corporation may also indemnify any and
all other persons whom it shall have power to indemnify under any applicable
law from time to time in effect to the extent authorized by the Board of
Directors and permitted by such law. The indemnification provided by this
Article shall not be deemed exclusive of any other rights to which any person
may be entitled under any provisions of the Certificate of Incorporation, other
Bylaw, agreement, vote of stockholders or disinterested Directors, or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office.
Definition. For purposes of this Article, the term "Corporation" shall
include constituent corporations referred to in Subsection(h) of Section 145 of
the General Corporation Law (or any similar provision of applicable law at the
time in effect)."
The Amended and Restated Certificate of Incorporation of Tritel PCS also
limits the personal liability of directors to Tritel PCS and its stockholders
for monetary damages resulting from certain breaches of the directors'
fiduciary duties. The Amended and Restated Certificate of Incorporation of
Tritel PCS provides as follows:
"A director of the corporation shall not be personally liable to the
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director except for liability (i) for any breach of the director's
duty of loyalty to the corporation and to its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the Delaware General
Corporation Law, or (iv) for any transaction from which such director derived
any improper personal benefit."
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
- --------- ---------------------------------------------------------------------------------------------
<S> <C>
3.1+ Certificate of Incorporation of Tritel PCS, Inc., (f/k/a Tritel Holding Corp.) dated
May 29, 1998.
3.1.1+ Amendment to Certificate of Incorporation of Tritel PCS, Inc., dated April 16, 1999.
3.2+ Bylaws of Tritel PCS, Inc., dated May 29, 1998.
3.3+ Restated Certificate of Incorporation of Tritel, Inc., dated January 4, 1999.
3.4+ Bylaws of Tritel, Inc., dated April 23, 1998.
3.5+ Certificate of Incorporation of Tritel Communications, Inc., dated May 29, 1998.
3.6+ Bylaws of Tritel Communications, Inc., dated May 29, 1998.
3.7+ Certificate of Incorporation of Tritel Finance, Inc., dated May 29, 1998.
3.8+ Bylaws of Tritel Finance, Inc., dated May 29, 1998.
4.1+ Indenture, dated May 11, 1999 between Tritel PCS, Inc., its parent and certain of its
subsidiaries, and The Bank of New York, as trustee.
4.2+ Registration Rights Agreement, dated May 11, 1999.
4.3+ Form of Notes for 123/4% Senior Subordinated Discount Notes due 2009 originally issued
by Tritel PCS, Inc. on May 11, 1999 (included as exhibits A-1 and A-2 to Exhibit 4.1 of this
registration statement).
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
- ---------- ------------------------------------------------------------------------------------------
<S> <C>
4.4+ Form of Note for 123/4% Senior Subordinated Discount Notes due 2009 to be issued by
Tritel PCS, Inc. and registered under the Securities Act of 1933.
5.1+ Opinion of Brown & Wood LLP.
10.1.1+ Stockholders' Agreement by and among AT&T Wireless PCS Inc., Cash Equity Investors,
Management Stockholders, and Tritel, Inc. dated January 7, 1999.
10.1.2+ First Amendment to Stockholders' Agreement dated August 27, 1999.
10.2+ Investors Stockholders' Agreement by and among Tritel, Inc., Washington National
Insurance Company, United Presidential Life Insurance Company, Dresdner Kleinwort
Benson Private Equity Partners LP, Toronto Dominion Investments, Inc., Entergy Wireless
Corporation, General Electric Capital Corporation, Triune PCS, LLC, FCA Venture
Partners II, L.P., Clayton Associates LLC, Trillium PCS, LLC, Airwave Communications,
LLC, Digital PCS, LLC, and The Stockholders Named Herein dated January 7, 1999.
10.3+ AT&T Wireless Services Network Membership License Agreement between AT&T Corp.
and Tritel, Inc. dated January 7, 1999.
10.4+ Intercarrier Roamer Service Agreement between AT&T Wireless Services, Inc. and Tritel,
Inc. dated January 7, 1999.
10.5+ Amended and Restated Agreement between Telecorp Communications, Inc., Triton PCS,
Inc., Tritel Communications, Inc. and Affiliate License Co., L.L.C. dated April 16, 1999.
10.6+ Form of Employment Agreement.
10.7+ Tritel, Inc. 1999 Stock Option Plan, effective January 7, 1999.
10.8+ Form of Restricted Stock Agreements pursuant to the Tritel, Inc. 1999 Stock Option Plan.
10.9+ Tritel, Inc. 1999 Stock Option Plan for Nonemployee Directors, effective January 7, 1999.
10.10+ Amended and Restated Loan Agreement among Tritel Holding Corp., Tritel, Inc., The
Financial Institutions Signatory Hereto, and Toronto Dominion (Texas), Inc. dated
March 31, 1999.
10.11+ First Amendment to Amended and Restated Loan Agreement among Tritel Holding Corp.,
Tritel, Inc., The Financial Institutions Signatory Hereto, and Toronto Dominion (Texas),
Inc. dated April 21, 1999.
10.12+ Master Lease Agreement between Tritel Communications, Inc. and Crown Communication
Inc. dated October 30, 1998.
10.13+ Master Lease Agreement between Signal One, LLC and Tritel Communications, Inc. dated
December 31, 1998.
10.14+ Management Agreement between Tritel Management, LLC and Tritel, Inc. dated January
1, 1999.
10.15+ Master Antenna Site Lease No. D41 between Pinnacle Towers Inc. and Tritel
Communications, Inc. dated October 23, 1998.
10.16+ Security Agreement between Mercury PCS LLC and the Federal Communications
Commission, dated September 17, 1996.
10.17+ Installment Payment Plan Note made by Mercury PCS, LLC in favor of the Federal
Communications Commission in the amount of $42,525,211.95, dated October 9, 1996.
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
- ----------- -------------------------------------------------------------------------------------------
<S> <C>
10.18+ First Modification of Installment Payment Plan Note for Broadband PCS F Block by and
between Mercury PCS II, L.L.C. and the Federal Communications Commission, dated
July 2, 1998, effective as of July 31, 1998.
10.19 Services Agreement by and between Tritel Communications, Inc. and Wireless Facilities,
Inc., dated July 1, 1999.
10.20+ Letter Agreement by and between Tritel Communications, Inc. and H.S.I. GeoTrans
Wireless, dated July 2, 1998, referring to a service agreement covering certain Site
Acquisition Services applicable to certain FCC licenses owned or to be acquired by Tritel.
10.21+ Services Agreement by and between Tritel Communications, Inc. and Galaxy Personal
Communications Services, Inc., which is a wholly owned subsidiary of World Access, Inc.,
dated as of June 1, 1998.
10.21.1 Addendum to June 1, 1998 Services Agreement, dated as of March 23, 1999.
10.22+ Services Agreement by and between Tritel Communications, Inc. and Galaxy Personal
Communications Services, Inc., which is a wholly-owned subsidiary of World Access, Inc.,
dated as of August 27, 1998.
10.23+ Agreement by and between BellSouth Telecommunications, Inc. and Tritel
Communications, Inc., effective as of March 16, 1999.
10.24 Agreement for Project and Construction Management Services between Tritel
Communications, Inc. and Tritel Finance, Inc. and Bechtel Corporation, dated
November 24, 1998.
10.25+ Services Agreement by and between Tritel Communications, Inc. and Spectrasite
Communications, Inc., dated as of July 28, 1998.
10.26+ Acquisition Agreement Ericsson CMS 8800 Cellular Mobile Telephone System by and
between Tritel Finance, Inc. and Tritel Communications, Inc. and Ericsson Inc., made and
effective as of December 30, 1998.
10.27+ Securities Purchase Agreement by and among AT&T Wireless PCS Inc., TWR Cellular,
Inc., Cash Equity Investors, Mercury PCS, LLC, Mercury PCS II, LLC, Management
Stockholders and Tritel, Inc., dated as of May 20, 1998.
10.28+ Closing Agreement by and among AT&T Wireless PCS, Inc., TWR Cellular, Inc., Cash
Equity Investors, Airwave Communications, LLC, Digital PCS, LLC, Management
Stockholders, Mercury Investor Indemnitors and Tritel, Inc., dated as of January 7, 1999.
10.29 Master Build To Suit And Lease Agreement between Tritel Communications, Inc., a
Delaware corporation and American Tower, L.P., a Delaware limited partnership.
10.30 Master Build To Suit And Lease Agreement between Tritel Communications, Inc. and
SpectraSite Communications, Inc.
10.31 Master Build To Suit Services And License Agreement between Tritel Communications,
Inc. and Crown Communication Inc.
10.32 Master Build To Suit And Lease Agreement by and between Tritel Communications, Inc.
and SBA Towers, Inc.
10.33* Master Site Agreement between Tritel Communications, Inc. and BellSouth Mobility Inc.,
dated July 2, 1999.
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
- --------- ----------------------------------------------------------------------------------------------
<S> <C>
10.34* Master Site Agreement between Tritel Communications, Inc. and BellSouth Mobility PCS, dated
March 10, 1999.
10.35+ Letter Agreement between Airwave Communications, LLC and Ericsson, Inc. dated
December 14, 1998.
10.36+ Consent to Exercise of Option between Tritel, Inc., AT&T Wireless PCS, Inc., TWR
Cellular, Inc. and Management Stockholders dated May 20, 1999.
10.37+ License Purchase Agreement between Digital PCS, LLC and Tritel, Inc. dated as of
May 20, 1999.
12+ Statement of Computation of Deficiency of Earnings to Fixed Charges.
21+ Subsidiaries of Tritel PCS, Inc.
23.1+ Consent of Brown & Wood LLP (included in Exhibit 5.1 of this registration statement).
23.2 Consent of KPMG Peat Marwick LLP.
24 Powers of Attorney (included on the signature page of the initial filing of this registration
statement).
25.1+ Form T-1 Statement of Eligibility of The Bank of New York, as trustee.
27+ Financial Data Schedule.
99.1+ Form of Letter of Transmittal.
99.2+ Form of Notice of Guaranteed Delivery.
99.3+ Form of Exchange Agent Agreement.
</TABLE>
- ----------
+ Previously filed.
* To be filed by Amendment.
ITEM 22. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
and Exchange Act of 1934 (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to Section 15(d) of the Securities and
Exchange Act of 1934) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(b) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant, pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by any such director, officer or
controlling person in connection with the securities being registered, the
registrant will submit, unless in the opinion of its counsel the matter has
been settled by controlling precedent, to a court of appropriate jurisdiction
the question of whether or not such indemnification is against Public policy as
expressed in the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
II-6
<PAGE>
(c) The undersigned registrant hereby undertakes to respond to requests
for information that is incorporated by reference into the prospectus pursuant
to Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through
the date of responding to the request.
(d) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective. This exchange
offer, however, does not involve any acquisition, nor are any acquisitions with
respect to PSSA expected after the registration statement becomes effective.
The transaction covered by this registration statement only involves the
exchange of registered for unregistered securities.
II-7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant has duly caused this amendment to the registration statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of New York, State of New York, on September 29, 1999.
TRITEL PCS, INC.
By: /s/ E.B. Martin, Jr.
------------------------------------
Name: E.B. Martin, Jr.
Title: Executive Vice President,
Treasurer,
Chief Financial Officer and
Director
Pursuant to the requirements of the Securities Act of 1933, as amended,
this amendment to the registration statement has been signed by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------- ----------------------------------------------- ------------------
<S> <C> <C>
*
Chairman of the Board, Chief Executive Officer
- ------------------------- and President September 29, 1999
William M. Mounger, II
/s/ E.B. Martin, Jr. Executive Vice President, Treasurer, Chief
- ------------------------- Financial Officer and Director September 29, 1999
E.B. Martin, Jr.
* Senior Vice President -- Finance (Principal
- ------------------------- Accounting Officer) September 29, 1999
Karlen Turbeville
</TABLE>
* By: /s/ E.B. Martin, Jr.
----------------------------
E.B. Martin, Jr.
Attorney-in-Fact
II-8
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant has duly caused this amendment to the Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of New York, State of New York, on September 29, 1999.
TRITEL, INC.
By: /s/ E.B. Martin, Jr.
------------------------------------
Name: E.B. Martin, Jr.
Title: Executive Vice President,
Treasurer, Chief Financial Officer
and Director
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints E.B. Martin, Jr. his true and
lawful attorney-in-fact and agent, acting alone, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including
post-effective amendments) of and supplements to this Registration Statement
and to file the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, granting
unto such attorney-in-fact and agent and full power and authority to do and
perform each and every act and thing requisite and necessary to be done in and
about the premises, to all intents and purposes and as fully as they might or
could do in person, hereby ratifying and confirming all that such
attorney-in-fact and agent, or his substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this amendment to the Registration Statement has been signed by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ---------------------------- --------------------------------------------- ------------------
<S> <C> <C>
/s/ William M. Mounger, II Chairman of the Board and Chief Executive September 29, 1999
- --------------------- Officer
William M. Mounger, II
/s/ William S. Arnett President and Director September 29, 1999
- ---------------------
William S. Arnett
/s/ E.B. Martin, Jr. Executive Vice President, Treasurer, Chief September 29, 1999
- --------------------- Financial Officer and Director
E.B. Martin, Jr.
/s/ Karlen Turbeville Senior Vice President -- Finance (Principal September 29, 1999
- --------------------- Accounting Officer)
Karlen Turbeville
/s/ Scott I. Anderson Director September 29, 1999
- ---------------------
Scott I. Anderson
/s/ Alex P. Coleman Director September 29, 1999
- ---------------------
Alex P. Coleman
/s/ Gary S. Fuqua Director September 29, 1999
- ---------------------
Gary S. Fuqua
/s/ Ann K. Hall Director September 29, 1999
- ---------------------
Ann K. Hall
/s/ Andrew Hubregsen Director September 29, 1999
- ---------------------
Andrew Hubregsen
/s/ David A. Jones, Jr. Director September 29, 1999
- ---------------------
David A. Jones, Jr.
</TABLE>
II-9
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- -------------------------- ---------- ------------------
<S> <C> <C>
/s/ H. Lee Maschmann Director September 29, 1999
- ---------------------
H. Lee Maschmann
/s/ Elizabeth L. Nichols Director September 29, 1999
- ---------------------
Elizabeth L. Nichols
/s/ Kevin J. Shepherd Director September 29, 1999
- ---------------------
Kevin J. Shepherd
</TABLE>
II-10
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant has duly caused this amendment to the Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of New York, State of New York, on September 29, 1999.
TRITEL COMMUNICATIONS, INC.
By: /s/ E.B. Martin, Jr.
------------------------------------
Name: E.B. Martin, Jr.
Title: Executive Vice President,
Treasurer, Chief Financial Officer
and Director
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints E.B. Martin, Jr. his true and
lawful attorney-in-fact and agent, acting alone, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including
post-effective amendments) of and supplements to this Registration Statement
and to file the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, granting
unto such attorney-in-fact and agent and full power and authority to do and
perform each and every act and thing requisite and necessary to be done in and
about the premises, to all intents and purposes and as fully as they might or
could do in person, hereby ratifying and confirming all that such
attorney-in-fact and agent, or his substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this amendment to the Registration Statement has been signed by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ---------------------------- --------------------------------------------- ------------------
<S> <C> <C>
/s/ William M. Mounger, II Chairman of the Board and Chief Executive September 29, 1999
- --------------------- Officer
William M. Mounger, II
/s/ E.B. Martin, Jr. Executive Vice President, Treasurer, Chief September 29, 1999
- --------------------- Financial Officer and Director
E.B. Martin, Jr.
/s/ Karlen Turbeville Senior Vice President -- Finance (Principal September 29, 1999
- --------------------- Accounting Officer)
Karlen Turbeville
</TABLE>
II-11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant has duly caused this amendment to the Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of New York, State of New York, on September 29, 1999.
TRITEL FINANCE, INC.
By: /s/ E.B. Martin, Jr.
------------------------------------
Name: E.B. Martin, Jr.
Title: Executive Vice President,
Treasurer, Chief Financial Officer
and Director
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints E.B. Martin, Jr. his true and
lawful attorney-in-fact and agent, acting alone, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including
post-effective amendments) of and supplements to this Registration Statement
and to file the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, granting
unto such attorney-in-fact and agent and full power and authority to do and
perform each and every act and thing requisite and necessary to be done in and
about the premises, to all intents and purposes and as fully as they might or
could do in person, hereby ratifying and confirming all that such
attorney-in-fact and agent, or his substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this amendment to the Registration Statement has been signed by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ---------------------------- -------------------------------------------- -------------------
<S> <C> <C>
/s/ William M. Mounger, II Chairman of the Board and Chief Executive September 29, 1999
- --------------------- Officer
William M. Mounger, II
/s/ E.B. Martin, Jr. Executive Vice President, Treasurer, Chief September 29, 1999
- --------------------- Financial Officer and Director (Principal
E.B. Martin, Jr. Accounting Officer)
/s/ Karlen Turbeville Senior Vice President-Finance (Principal September 29, 1999
- --------------------- Accounting Officer)
Karlen Turbeville
</TABLE>
II-12
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION PAGE
- ---------- -------------------------------------------------------------------------------- -----
<S> <C> <C>
3.1+ Certificate of Incorporation of Tritel PCS, Inc., (f/k/a Tritel Holding Corp.)
dated May 29, 1998.
3.1.1+ Amendment to Certificate of Incorporation of Tritel PCS, Inc., dated April
16, 1999.
3.2+ Bylaws of Tritel PCS, Inc., dated May 29, 1998.
3.3+ Restated Certificate of Incorporation of Tritel, Inc., dated January 4, 1999.
3.4+ Bylaws of Tritel, Inc., dated April 23, 1998.
3.5+ Certificate of Incorporation of Tritel Communications, Inc., dated May 29,
1998.
3.6+ Bylaws of Tritel Communications, Inc., dated May 29, 1998.
3.7+ Certificate of Incorporation of Tritel Finance, Inc., dated May 29, 1998.
3.8+ Bylaws of Tritel Finance, Inc., dated May 29, 1998.
4.1+ Indenture, dated May 11, 1999 between Tritel PCS, Inc., its parent and certain
of its subsidiaries, and The Bank of New York, as trustee.
4.2+ Registration Rights Agreement, dated May 11, 1999.
4.3+ Form of Notes for 12 3/4% Senior Subordinated Discount Notes due 2009
originally issued by Tritel PCS, Inc. on May 11, 1999 (included as exhibits A-1
and A-2 to Exhibit 4.1 of this registration statement).
4.4+ Form of Note for 12 3/4% Senior Subordinated Discount Notes due 2009 to be
issued by Tritel PCS, Inc. and registered under the Securities Act of 1933.
5.1+ Opinion of Brown & Wood LLP.
10.1.1+ Stockholders' Agreement by and among AT&T Wireless PCS Inc., Cash
Equity Investors, Management Stockholders, and Tritel, Inc. dated January 7,
1999.
10.1.2+ First Amendment to Stockholders' Agreement dated August 27, 1999.
10.2+ Investors Stockholders' Agreement by and among Tritel, Inc., Washington
National Insurance Company, United Presidential Life Insurance Company,
Dresdner Kleinwort Benson Private Equity Partners LP, Toronto Dominion
Investments, Inc., Entergy Wireless Corporation, General Electric Capital
Corporation, Triune PCS, LLC, FCA Venture Partners II, L.P., Clayton
Associates LLC, Trillium PCS, LLC, Airwave Communications, LLC, Digital
PCS, LLC, and The Stockholders Named Herein dated January 7, 1999
10.3+ AT&T Wireless Services Network Membership License Agreement between
AT&T Corp. and Tritel, Inc. dated January 7, 1999.
10.4+ Intercarrier Roamer Service Agreement between AT&T Wireless Services,
Inc. and Tritel, Inc. dated January 7, 1999.
10.5+ Amended and Restated Agreement between Telecorp Communications, Inc.,
Triton PCS, Inc., Tritel Communications, Inc. and Affiliate License Co.,
L.L.C. dated April 16, 1999.
10.6+ Form of Employment Agreement.
10.7+ Tritel, Inc. 1999 Stock Option Plan, effective January 7, 1999.
10.8+ Form of Restricted Stock Agreements pursuant to the Tritel, Inc. 1999 Stock
Option Plan.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION PAGE
- --------- -------------------------------------------------------------------------------- -----
<S> <C> <C>
10.9+ Tritel Inc. 1999 Stock Option Plan for Nonemployee Directors, effective
January 7, 1999.
10.10+ Amended and Restated Loan Agreement among Tritel Holding Corp., Tritel,
Inc., The Financial Institutions Signatory Hereto, and Toronto Dominion
(Texas), Inc. dated March 31, 1999.
10.11+ First Amendment to Amended and Restated Loan Agreement among Tritel
Holding Corp., Tritel, Inc., The Financial Institutions Signatory Hereto, and
Toronto Dominion (Texas), Inc. dated April 21, 1999.
10.12+ Master Lease Agreement between Tritel Communications, Inc. and Crown
Communication Inc. dated October 30, 1998.
10.13+ Master Lease Agreement between Signal One, LLC and Tritel
Communications, Inc. dated December 31, 1998.
10.14+ Management Agreement between Tritel Management, LLC and Tritel, Inc.
dated January 1, 1999.
10.15+ Master Antenna Site Lease No. D41 between Pinnacle Towers Inc. and Tritel
Communications, Inc. dated October 23, 1998.
10.16+ Security Agreement between Mercury PCS LLC and the Federal
Communications Commission, dated September 17, 1996.
10.17+ Installment Payment Plan Note made by Mercury PCS, LLC in favor of the
Federal Communications Commission in the amount of $42,525,211.95, dated
October 9, 1996.
10.18+ First Modification of Installment Payment Plan Note for Broadband PCS F
Block by and between Mercury PCS II, L.L.C. and the Federal
Communications Commission, dated July 2, 1998, effective as of July 31, 1998.
10.19 Services Agreement by and between Tritel Communications, Inc. and Wireless
Facilities, Inc., dated , 1999.
10.20+ Letter Agreement by and between Tritel Communications, Inc. and H.S.I.
GeoTrans Wireless, dated July 2, 1998, referring to a service agreement
covering certain Site Acquisition Services applicable to certain FCC licenses
owned or to be acquired by Tritel.
10.21+ Services Agreement by and between Tritel Communications, Inc. and Galaxy
Personal Communications Services, Inc., which is a wholly owned subsidiary
of World Access, Inc., dated as of June 1, 1998.
10.21.1 Addendum to June 1, 1998 Services Agreement, dated as of March 23, 1999.
10.22+ Services Agreement by and between Tritel Communications, Inc. and Galaxy
Personal Communications Services, Inc., which is a wholly-owned subsidiary
of World Access, Inc., dated as of August 27, 1998.
10.23+ Agreement by and between BellSouth Telecommunications, Inc. and Tritel
Communications, Inc., effective as of March 16, 1999.
10.24 Agreement for Project and Construction Management Services between Tritel
Communications, Inc. and Tritel Finance, Inc. and Bechtel Corporation, dated
November 24, 1998.
10.25+ Services Agreement by and between Tritel Communications, Inc. and
Spectrasite Communications, Inc., dated as of July 28, 1998.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION PAGE
- ------------ --------------------------------------------------------------------------------- -----
<S> <C> <C>
10.26+ Acquisition Agreement Ericsson CMS 8800 Cellular Mobile Telephone
System by and between Tritel Finance, Inc. and Tritel Communications, Inc.
and Ericsson Inc., made and effective as of December 30, 1998.
10.27+ Securities Purchase Agreement by and among AT&T Wireless PCS Inc.,
TWR Cellular, Inc., Cash Equity Investors, Mercury PCS, LLC, Mercury PCS
II, LLC, Management Stockholders and Tritel, Inc., dated as of May 20, 1998.
10.28+ Closing Agreement by and among AT&T Wireless PCS, Inc., TWR Cellular,
Inc., Cash Equity Investors, Airwave Communications, LLC, Digital PCS,
LLC, Management Stockholders, Mercury Investor Indemnitors and Tritel,
Inc., dated as of January 7, 1999.
10.29 Master Build To Suit And Lease Agreement between Tritel Communications,
Inc., a Delaware corporation and American Tower, L.P., a Delaware limited
partnership.
10.30 Master Build To Suit And Lease Agreement between Tritel
Communications, Inc. and SpectraSite Communications, Inc.
10.31 Master Build To Suit Services And License Agreement between Tritel
Communications, Inc. and Crown Communication Inc.
10.32 Master Build To Suit And Lease Agreement by and between Tritel
Communications, Inc. and SBA Towers, Inc.
10.33* Master Site Agreement between Tritel Communications, Inc. and BellSouth Mobility Inc.,
dated July 2, 1999.
10.34* Master Site Agreement between Tritel Communications, Inc. and BellSouth Mobility PCS, dated
March 10, 1999.
10.35+ Consent to Exercise of Option between Tritel, Inc., AT&T Wireless PCS, Inc.,
TWR Cellular, Inc. and Management Stockholders dated May 20, 1999.
10.36+ License Purchase Agreement between Digital PCS, LLC and Tritel, Inc. dated
as of May 20, 1999.
10.37+ License Purchase Agreement between Digital PCS, LLC and Tritel, Inc. dated as
of May 20, 1999.
12+ Statement of Computation of Deficiency of Earnings to Fixed Charges.
21+ Subsidiaries of Tritel PCS, Inc.
23.1+ Consent of Brown & Wood LLP (included in 5.1 of this registration
statement).
23.2 Consent of KPMG Peat Marwick LLP.
24+ Powers of Attorney (included on the signature page of the initial filing of this
registration statement).
25.1+ Form T-1 Statement of Eligibility of The Bank of New York, as trustee.
27+ Financial Data Schedule.
99.1+ Form of Letter of Transmittal.
99.2+ Form of Notice of Guaranteed Delivery.
99.3+ Form of Exchange Agent Agreement.
</TABLE>
- ----------
+ Previously Filed.
* To be filed by Amendment.
<PAGE>
SERVICES AGREEMENT
THIS SERVICES AGREEMENT (this "Agreement"), dated as of the 1st day of
July, 1999, is made by and between TRITEL COMMUNICATIONS, INC., a Delaware
corporation ("Tritel"), and WIRELESS FACILITIES, INC., a Delaware corporation
("WFI").
In consideration of the mutual covenants contained herein and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereby agree as follows:
SECTION 1. THE SERVICES
1.1 SERVICES.
WFI will perform the services described on Exhibit A and Exhibit D (the
"Services") for Tritel (or subsidiaries or entities under common control with
Tritel, as directed by Tritel) regarding the project described therein (the
"Project") in accordance with the terms and conditions of this Agreement. WFI
will perform the Services in a professional, workmanlike manner, will exercise
reasonable skill, care and diligence in the performance of the Services and will
carry out its responsibilities in accordance with industry accepted good
professional engineering practices and in compliance with all standards and
rules reasonably established by Tritel from time to time. Unless otherwise
agreed by Tritel in writing, WFI will provide all personnel, equipment and
supplies necessary or appropriate to perform the Services.
1.2 EXAMINATION OF THE SERVICES.
WFI has examined the applicable ordinances, rules and regulations, and
has examined the markets where the Services will be provided and satisfied
itself as to all conditions to be encountered in the performance of the
Services.
1.3 TIME IS OF THE ESSENCE.
Upon execution of this Agreement, the parties shall promptly negotiate
and establish a general overall progress schedule for the performance of the
Services in all markets subject to this Agreement and completion of the Project,
which schedule shall be supplemented (prior to commencing Services in any
market) with more detailed and mutually established market by market progress
schedules for RF Engineering Services (the general and more detailed progress
schedules may be hereafter referred to collectively as the "Progress Schedule")
which shall include a description of milestones marking the completion of
certain successive phases of the Services (the "Milestones"). The Progress
Schedule, when executed by Tritel and WFI, shall be deemed an addendum to this
Agreement and become an integral part of this Agreement. The Progress Schedule
may be amended by mutual agreement of Tritel and WFI in writing.
In the performance of WFI's obligations under this Agreement, time is
of the essence. WFI agrees to see to the timely performance of the Services in
accordance with the Progress Schedule and will not delay (beyond deadlines
established in the Progress Schedule) or interfere with other portions of work
on the Project. WFI recognizes that Tritel will incur severe
Page 1 of 37
CONFIDENTIAL MATERIAL TRITEL COMMUNICATIONS, INC.
<PAGE>
economic loss if the Project is not timely completed, and that WFI will be
responsible to compensate Tritel for such loss in accordance with Section 1.9 if
WFI does not comply with the Progress Schedule.
1.4 COMMENCEMENT AND PROGRESS.
Upon Tritel and WFI's mutual execution of the Progress Schedule, WFI
will commence providing Services within a market specified by Tritel [within
three (3) weeks] after written notice from Tritel to WFI, and shall provide the
Services diligently and in accordance with the Progress Schedule.
1.5 PRIORITY OF SERVICES.
Tritel shall have the right to decide the time, order and priority in
which the various portions of the Services shall be performed and all other
matters relevant to the timely and orderly conduct of WFI's Services.
Tritel shall consult with WFI's project manager concerning all such matters.
1.6 COORDINATION.
WFI shall cooperate with Tritel and all other contractors involved in
the Project in the provision of the Services. Tritel shall cooperate with WFI in
connection with its provision of the Services, and shall instruct its
contractors and agents involved in the Project to do likewise.
1.7 AUTHORIZED REPRESENTATIVE; PERSONNEL.
WFI shall designate one or more persons who shall be WFI's authorized
representative(s) on-site and off-site. Tritel shall have the right to approve
any personnel assigned by WFI to perform any Services, which approval shall not
be unreasonably withheld or delayed.
1.8 ASSIGNMENT AND SUBCONTRACTING.
WFI will not assign the work under this Agreement, or subcontract any
portion of it, without the prior written consent of Tritel. WFI will not make
any assignment of payments to be earned by WFI under this Agreement without the
prior written approval of Tritel.
1.9 CONSEQUENCES FOR DELAY.
WFI will be excused for any delay caused by acts of God, war (including
civil war), civil unrest, acts of government, fire, floods, explosions,
inclement weather, epidemics, quarantine restrictions, labor unrest, strikes,
lockouts, delays solely caused by Tritel or its vendors or other contractors, or
other events beyond the control of WFI. WFI will be entitled to extensions of
time for such delay only upon written notice to Tritel [within ten (10) days]
after commencement of the delay.
If due to any act or omission of WFI mutually agreed Acceptance
Criteria (defined below) are not met and the commercial launch of a system is
delayed, WFI shall correct to Tritel's reasonable satisfaction, at WFI's sole
cost, any deficiency in the applicable design
Page 2 of 37
CONFIDENTIAL MATERIAL TRITEL COMMUNICATIONS, INC.
<PAGE>
criteria, including, reasonable costs associated with additional planning
and testing, acquiring and constructing additional cell sites erroneously
omitted from (or required as a result of any flaw in) WFI's original RF design
and the cost of additional base stations and other equipment and supplies not
contemplated in WFI's original RF design, but only to the extent that such flaws
were not caused by the conduct of Tritel, its officers, employees,
subcontractors (other than WFI) or agents ("Tritel Deficiencies"). For
corrective work performed by WFI as a result of Tritel Deficiencies, Tritel
shall compensate WFI on a time and materials basis pursuant to the hourly rates
set forth in Exhibit B. The provisions of this paragraph shall not apply to
deficiencies caused by Tritel's deviation from the original design criteria.
SECTION 2. COMPENSATION
2.1 COMPENSATION.
Tritel will pay WFI for Services rendered in accordance with Exhibit B
and Exhibit E (the "Compensation"). Unless expressly excluded pursuant to the
terms of this Agreement, all costs and expenses related to the provision of the
Services are included in the Compensation. However, any state and local sales or
use taxes arising from Tritel's payment of the Compensation are not included
and, if applicable, shall be payable by Tritel.
2.2 PAYMENT TERMS.
WFI will submit invoices to Tritel in accordance with the Milestone
schedules set forth in Exhibit B for RF Engineering Services, and Exhibit E for
Microwave Relocation Services. Tritel will remit all properly payable amounts
within thirty (30) days of Tritel's receipt of any such invoice [unless Tritel
elects the financing option set forth below. Tritel may elect to finance the
payment of any invoice for a period of up to nine months. If Tritel so elects,
interest will begin to accrue on all charges set forth in any deferred invoice
[CONFIDENTIAL TREATMENT REQUESTED]. Each invoice will describe, in reasonable
detail and with respect to the relevant invoice period (a) a description of the
Services provided, and (b) any work product created. The Compensation shall not
be altered except as specifically provided for in this Agreement.
2.3 INVOICE REPRESENTATION.
All invoices must be accompanied by a representation and warranty of
WFI that all laborers, subcontractors, suppliers and others who might claim lien
rights on the Project have been or will be timely paid in full.
2.4 PAYMENT NOT ACCEPTANCE.
Payment to WFI alone does not constitute or imply acceptance by Tritel
of any portion of WFI's Services.
2.5 WFI PAYMENT FAILURE.
If it appears to Tritel that the labor, material and other bills
incurred in the performance of WFI's Services (which if unpaid may give rise to
lien rights or claims on the Project) are not
Page 3 of 37
CONFIDENTIAL MATERIAL TRITEL COMMUNICATIONS, INC.
<PAGE>
being currently paid, Tritel may take such steps as it deems necessary to insure
that the money paid to WFI will be utilized to pay such bills.
2.6 BACK CHARGES AND WITHHOLDS.
Tritel may withhold payments from WFI in amounts that are sufficient to
protect Tritel in the event of any of the following:
(a) WFI's improper or delayed works, defective work or damage to the
work, which is not corrected by it as prescribed in Section 1.9;
(b) Filing of any claims, demands, suits, attachments and/or liens
against WFI;
(c) Reasonable evidence brought to Tritel's attention that any
claims, demands, suits, attachments and/or liens are to be filed
against WFI which could potentially affect the Project;
(d) Reasonable evidence brought to Tritel's attention of prospective
insolvency of WFI; or
(e) Any bona fide claim or lien against Tritel or the premises upon
which the Services were performed which arises out of WFI's
default in its performance of this Agreement.
2.7 FINAL PAYMENT.
The final payment will be due when WFI's Services have been completed
and accepted by Tritel, which acceptance shall not be unreasonably withheld. For
purposes of this Section 2.7, final payment shall be deemed to have been made
upon Tritel's election to finance the charges subject to the final payment,
effective upon Tritel's provision of notice of such election to WFI. [The making
and acceptance of final payment shall not constitute a waiver of any claims by
WFI against Tritel for compensation for extra work or for compensation of any
kind claimed by WFI because of the activities of Tritel in connection with the
Project.] Prior to final payment WFI shall submit to Tritel:
(a) WFI's affidavit that all payrolls, bills for materials and
equipment, and other indebtedness connected with WFI's Services
for which Tritel or its property might in any way be liable, have
been paid, or otherwise satisfied;
(b) Satisfaction of all required acceptance criteria which shall be
mutually established by Tritel and WFI within [90 days] of
execution of this Agreement in accordance with the parameters and
procedures set forth in the General Milestone and Acceptance
Criteria Schedule attached as Exhibit C (such acceptance criteria
as shall be established may be referred to as the "Acceptance
Criteria"); and
(c) Other data as reasonably required by Tritel, such as receipts,
releases, and waivers of liens.
Page 4 of 37
CONFIDENTIAL MATERIAL TRITEL COMMUNICATIONS, INC.
<PAGE>
Final payment shall not constitute a waiver of all claims by WFI for additional
compensation relating to WFI's Services, but shall in no way relieve WFI of
liability for obligations assumed under this Agreement or for faulty or
defective work appearing within [CONFIDENTIAL TREATMENT REQUESTED] from the
later of (i) final payment; or (ii) commercial in-service use of the applicable
system.
2.8 SUSPENSION OF SERVICES.
During the term of this Agreement, Tritel may elect to suspend Services
in progress in a specific market due to any of the following conditions:
(i) FCC or state regulatory actions which affect a specific Tritel
service area;
(ii) Moratoriums or similar actions imposed by state or local
authorities which would materially affect Tritel's ability to
complete network deployment within such area; or
(iii) Mutual agreement by WFI and Tritel.
If Services were suspended as a result of any of the above conditions, WFI would
receive demobilization compensation during the suspension and remobilization
compensation if WFI's personnel are remobilized. Demobilization compensation
will equal [CONFIDENTIAL TREATMENT REQUESTED] of the hourly rates of personnel
demobilized (assuming a 9-hour workday and 5-day workweek during any period of
demobilization). Tritel will not assign work in progress, suspended under this
provision, to other contractors for resumption of work without the mutual
consent of Tritel and WFI. The Progress Schedule for any market suspended shall
be tolled during any period of suspension. No suspension of services under this
provision will occur prior to completion of the design phase and issuance of
search rings.
SECTION 3. TERM.
The term of this Agreement will commence on the date hereof and, unless
otherwise earlier terminated pursuant to Section 11 or extended upon mutual
written agreement of the parties, will end upon the earlier of: (i) WFI's
completion and Tritel's acceptance of the Services (as determined by the
Acceptance Criteria); or (ii) fifteen (15) months from the date of WFI's
commencement of Services in the last market of Tritel in the Project covered by
this Agreement.
SECTION 4. INDEPENDENT CONTRACTOR.
WFI will perform the Services as an independent contractor of Tritel,
and this Agreement will not be construed to create a partnership, joint venture
or employment relationship between WFI and Tritel. WFI will not represent itself
to be an employee or agent of Tritel or enter into any agreement on Tritel's
behalf or in Tritel's name, unless WFI is specifically authorized in writing by
Tritel to do so.
Page 5 of 37
CONFIDENTIAL MATERIAL TRITEL COMMUNICATIONS, INC.
<PAGE>
SECTION 5. COMPLIANCE WITH LAWS.
WFI will at its own cost (a) comply with all federal, state and local
laws, ordinances, regulations and orders with respect to its performance of the
Services (collectively, the "laws"), (b) file all reports relating to the
Services (including, without limitation, tax returns), (c) pay all filing fees
and federal, state and local taxes applicable to WFI's business as the same
shall become due, and (d) pay all amounts required under local, state and
federal workers' compensation acts, disability benefit acts, unemployment
insurance acts and other employee benefit acts when due. WFI will provide Tritel
with such documents and other supporting materials as Tritel may reasonably
request to evidence WFI's continuing compliance with this Section 5. WFI is
liable to Tritel for all fines and penalties attributable to any acts of
commission or omission by WFI, its employees and agents resulting from the
failure to comply with laws.
SECTION 6. INSURANCE.
6.1 COVERAGE REQUIREMENTS.
WFI will procure and maintain, during the term of this Agreement,
insurance of the following types and coverage amounts:
(a) Workers compensation insurance in accordance with the
provisions of the applicable workers compensation or similar
law of the states applicable to WFI' personnel;
(b) Comprehensive general liability insurance with minimum
coverage of $1,000,000 combined single limit per occurrence
for bodily injury or property damage, including coverage of
liability assumed in this Agreement;
(c) Automobile liability insurance insuring all owned, non-owned
and hired automotive equipment in minimum combined single
limit amounts of $1,000,000;
(d) Umbrella coverage of not less than $4,000,000 combined single
limit in excess of the coverage required in subsections (b)
and (c) above;
(e) Errors and omissions coverage of not less than $1,000,000 per
occurrence.
Tritel shall be named as additional insured under the insurance
required under subsections (b), (c), (d), and (e). WFI shall provide Tritel with
certificates of insurance evidencing the coverage required above. Such insurance
will provide for 30 days prior written notice to Tritel in event of
cancellation, non-renewal, or material changes in coverage.
6.2 CANCELLATION.
WFI's insurance policies shall contain a provision that coverage
afforded under the policies will not be canceled, changed in a manner to reduce
coverage from the levels currently in effect or not renewed (unless replaced
with equivalent coverage with an alternate carrier) until at least thirty days'
prior written notice has been given to Tritel. A statement to this effect will
Page 6 of 37
CONFIDENTIAL MATERIAL TRITEL COMMUNICATIONS, INC.
<PAGE>
be included with WFI's insurance certificates. Certificates of insurance
acceptable to Tritel shall be filed with Tritel prior to the commencement of
WFI's Services.
6.3 WAIVER OF SUBROGATION.
Tritel and WFI waive all rights against each other and against separate
contractors, and all other subcontractors for damages caused by fire or other
perils to the extent covered by Builder's Risk or any other property insurance
purchased for the Project, except such rights as they may have to the proceeds
of such insurance.
6.4 RISK OF LOSS.
WFI will be liable for all loss or damage, other than ordinary wear and
tear, to Tritel's property while in WFI's sole possession or control. In the
event of any such loss or damage, WFI will pay Tritel the full current
replacement cost of such equipment or property within [thirty (30) days] after
its loss or damage. If replacement equipment is not readily available for
acquisition by Tritel, WFI shall obtain, by lease or other means, equipment of
equivalent functionality and provide such equipment to Tritel until permanent
replacement equipment is available for acquisition by Tritel.
6.5 NO WORKERS' COMPENSATION LIMITATION ON INDEMNITY.
In any and all claims against Tritel (or any contractor providing
project or construction management services ("Project Management Contractor"),
currently Bechtel Corporation) by any employee of WFI or anyone directly or
indirectly employed by WFI or anyone for whose acts WFI may be liable, the
indemnification obligations under Section 9 shall not be limited in any way by
any limitation on the amount or type of damages, compensation or benefits
payable by or for WFI under Workers' Compensation laws, disability benefit laws
or other employee benefit laws.
SECTION 7. OWNERSHIP AND USE OF PROPRIETARY MATERIALS
7.1 PROPRIETARY MATERIALS.
As used in this Agreement, "Proprietary Materials" means all products,
devices, computer programs, techniques, know-how, algorithms, procedures,
discoveries or inventions, whether patentable or copyrightable and whether
reduced to practice, and all materials, texts, drawings, specifications, source
code, data and other recorded information, in preliminary or final form and on
any media whatsoever, that (a) is within the scope of the Project or (b) reduced
to practice, developed, discovered, invented or made by WFI during the term of
this Agreement, whether solely or jointly with others, and solely for the
purposes of performing the Services.
7.2 OWNERSHIP.
Tritel will be the exclusive owner of all Proprietary Materials arising
from WFI's performance of this Agreement. To the extent permitted under the U.S.
Copyright Act (17 USC ss. 101 et seq., and any successor statute thereto), the
Proprietary Materials will constitute "works made for hire," and the ownership
of such Proprietary Materials will vest in Tritel at the time
Page 7 of 37
CONFIDENTIAL MATERIAL TRITEL COMMUNICATIONS, INC.
<PAGE>
they are created. To the extent the Proprietary Materials are not "works made
for hire" under applicable copyright laws, WFI hereby assigns and transfers to
Tritel all right, title and interest that WFI may now or hereafter have in the
Proprietary Materials, subject to the limitations set forth in Section 7.4. WFI
will promptly disclose to Tritel all Proprietary Materials.
7.3 FURTHER ACTS.
WFI will take such reasonable action (including, but not limited to,
the execution, acknowledgement, delivery and assistance in preparation of
documents or the giving of testimony) as may be requested by Tritel to evidence,
transfer, vest or confirm Tritel's right, title and interest in the Proprietary
Materials. If testimony or other resources of WFI are required, WFI shall be
compensated for personnel time at the hourly rates set forth in Exhibit B.
7.4 LIMITATION.
Notwithstanding any other provision of this Agreement to the contrary,
this Section 7 will not obligate WFI to assign or offer to assign to Tritel any
of WFI's rights in an invention for which no equipment, supplies, facilities or
trade secret information of Tritel was used and which was developed entirely on
WFI's own time, unless the invention relates directly to the Project.
7.5 USE.
Except as required for WFI's performance of the Services or as
authorized in writing by Tritel, WFI will not use, disclose, publish or
distribute any Proprietary Materials or remove any Proprietary Materials from
Tritel's premises. WFI will hold all Proprietary Materials for Tritel in a
secure place, limiting access thereto, and will deliver them to Tritel upon
request and in any event upon the expiration or termination of this Agreement.
7.6 NON-INFRINGEMENT WARRANTY.
WFI represents and warrants that any Proprietary Materials originating
from WFI, and the exercise by Tritel of its rights hereunder with respect to the
Proprietary Materials, will not infringe upon, violate or misappropriate any
patent, copyright, trade secret, trademark, contract or other right or interest
of any third party.
7.7 OTHER COMPANIES.
During the course of providing the Services, WFI employees may use
software and documentation created by other RF services companies. Each WFI
employee who uses these software products must agree in writing to protect any
confidential information they acquire through training on or use of these
software products.
7.8 REMEDIES.
WFI agrees that damages may be inadequate to compensate for the unique
losses to be suffered in the event of a breach of the provisions set forth in
Sections 7.1 through 7.7, and that Tritel will be entitled, in addition to any
other remedy it may have under this Agreement or at
Page 8 of 37
CONFIDENTIAL MATERIAL TRITEL COMMUNICATIONS, INC.
<PAGE>
law, to seek and obtain injunctive and other equitable relief, including
specific performance of the terms of this Agreement without the necessity of
posting bond.
SECTION 8. NO CONFLICTING OBLIGATIONS.
8.1 OTHER AGREEMENTS.
WFI's execution, delivery and performance of this Agreement will not
violate any other employment, nondisclosure, confidentiality, consulting or
other agreement to which WFI is a party or by which it may be bound.
8.2 THIRD-PARTY CONFIDENTIAL INFORMATION.
WFI will not use, in the performance of the Services or the creation of
any Proprietary Materials, or disclose to Tritel any confidential or proprietary
information of any other person if such use or disclosure would violate any
obligation or duty that WFI owes to such other person. WFI's compliance with
this Section 8.2 will not prohibit, restrict or impair WFI's performance of the
Services and it's other obligations and duties to Tritel.
SECTION 9. INDEMNIFICATION.
WFI shall indemnify, defend and hold Tritel (and Tritel's agents, legal
representatives, officers, directors, shareholders and employees) harmless from
all claims, damages, losses, costs, expenses (including reasonable attorneys'
fees actually paid or incurred) and liabilities, including any amounts paid by
the indemnified party in satisfaction of judgments, in compromise or as fines
and penalties, arising out of or resulting from any claim, action, investigation
or other proceeding (including any proceeding by any of WFI's employees, agents
or subcontractors), actual or threatened, that is based upon (a) a default by
WFI in the performance of its obligations under this Agreement, (b) any
representation or warranty of WFI being untrue in any material respect, (c) the
conduct of WFI's business, (d) any negligent act or omission of WFI, or (e) the
infringement or misappropriation of any foreign or United States patent,
copyright, trade secret or other proprietary right by the Proprietary Materials
originating from WFI.
SECTION 10. NONDISCLOSURE AGREEMENT
As a condition to Tritel's obligations under this Agreement, WFI agrees
to abide by all the terms and conditions of that certain Non-disclosure
Agreement dated as of ___________, 1999, executed by and between Tritel and WFI
(the "Non-disclosure Agreement").
SECTION 11. TERMINATION.
11.1 TERMINATION FOR CAUSE.
Tritel may terminate this Agreement upon an Event of Default (defined
below), provided, however, that as to any of the matters set forth in
subparagraphs (iii) through (vii) of Section 13: (a) Tritel sends written notice
to WFI describing the breach in reasonable detail, (b) WFI does not cure the
breach within [CONFIDENTIAL TREATMENT REQUESTED] following its receipt of such
notice, and (c) following the expiration of the [CONFIDENTIAL TREATMENT
REQUESTED], Tritel
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CONFIDENTIAL MATERIAL TRITEL COMMUNICATIONS, INC.
<PAGE>
sends a second written notice to WFI indicating Tritel's desire to terminate
this Agreement. If an Event of Default results from any of the matters set forth
in subparagraphs (i) and (ii) of Section 13, Tritel's termination of this
Agreement shall be effective upon giving notice of termination to WFI. WFI may
terminate this Agreement upon Tritel's material breach of this Agreement,
provided that (a) WFI sends written notice to Tritel describing the breach in
reasonable detail, (b) Tritel does not cure the breach within [CONFIDENTIAL
TREATMENT REQUESTED] following its receipt of such notice, and (c) following the
expiration of the [CONFIDENTIAL TREATMENT REQUESTED], WFI sends a second written
notice to Tritel indicating WFI's desire to terminate this Agreement.
If Tritel terminates this Agreement for cause as described above,
Tritel, without prejudice to any other remedy it might have, may terminate this
Agreement and complete the Services by such means as Tritel deems fit.
11.2 TERMINATION FOR CONVENIENCE.
Either Tritel or WFI may terminate this Agreement at any time upon
ninety- (90) days' written notice to the other (a "Termination for
Convenience"). Upon a Termination for Convenience by Tritel, WFI shall be
compensated for any Services rendered but which have not been paid ("Unpaid
Services") on a time and materials basis as set forth in Exhibit B, except to
the extent that any Unpaid Services constitute a Milestone in which case payment
shall be made in accordance with the Milestone schedule set forth in Exhibit B
in addition to time and materials compensation for any such post-Milestone
Unpaid Services. Upon a Termination for Convenience by WFI, WFI shall not be
compensated for any Unpaid Services unless the Unpaid Services constitute a
Milestone in which case payment shall be made in accordance with the Milestone
schedule set forth in Exhibit B.
11.3 SURVIVAL.
Sections 5 and 7 and Sections 9 through 24 (together with all other
provisions of this Agreement that may reasonably be interpreted or construed as
surviving termination of the Term) will survive for one year after the
termination of the Term.
SECTION 12. NOTICES.
All notices given hereunder will be given (and shall be deemed to have
been given upon receipt) in writing, will refer to this Agreement and will be
personally delivered, sent by telecopy, by other electronic facsimile
transmission or by registered or certified mail (return receipt requested) to
the address set forth below the parties' signatures at the end of this
Agreement. Any party may from time to time change such address by giving the
other party notice of such change in accordance with this Section 12. A copy of
each notice given hereunder to Tritel shall be given to James Neeld IV, Esq.;
Young, Williams, Henderson & Fuselier, P.A.; 2000 Deposit Guaranty Plaza;
Jackson, MS 39201.
SECTION 13. EVENT OF DEFAULT.
For the purposes of this Agreement, an "Event of Default" shall be if:
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(i) At any time there shall be filed by or against WFI in any
court a petition in bankruptcy or insolvency or for
reorganization or for the appointment of a receiver or trustee
of all or a portion of the property of WFI, and within
forty-five (45) days from the filing date WFI fails to secure
a discharge; or
(ii) WFI makes an assignment for the benefit of creditors or
petitions for or enters into an agreement or arrangement with
its creditors; or
(iii) WFI materially fails to prosecute the Services in accordance
with the Acceptance Criteria, and therefore, fails to complete
the Services entirely on or before any date established in the
Progress Schedule for partial, substantial or final completion
(except for delays for which WFI is entitled to additional
time); or
(iv) There is a material breach of any of WFI's representation or
warranties contained in this Agreement or required to
accompany any invoice rendered under this Agreement; or
(v) WFI fails to supply sufficient labor, material and/or
equipment so as to complete the Services in accordance with
the Progress Schedule, unless such delay is excused in
accordance with Section 1.9; or
(vi) WFI performs defective work and fails to correct promptly and
properly such defective work; or
(vii) Without limitation, WFI fails to perform any material
provision of this Agreement.
SECTION 14. ASSIGNMENT
WFI may assign this Agreement, in whole nor in part, without Tritel's
prior written consent to (a) any corporation or other entity resulting from any
merger, consolidation or other reorganization to which WFI is a party, (b) any
corporation, partnership, association or other entity or person to which WFI may
transfer all or substantially all of the assets and business of WFI existing at
such time, or (c) any subsidiary of or entity under common control with WFI.
Tritel may assign its rights hereunder to (a) any corporation or other entity
resulting from any merger, consolidation or other reorganization to which Tritel
is a party, (b) any corporation, partnership, association or other entity or
person to which Tritel may transfer all or substantially all of the assets and
business of Tritel existing at such time or to which all or part of the system
to which the Project relates is assigned , or (c) any subsidiary of or entity
under common control with Tritel. Upon any such assignment by Tritel and the
full and unconditional assumption by such assignee of all of Tritel's
obligations hereunder arising after such assignment, Tritel shall be released
and free from any obligation or liability under this Agreement arising after
such assignment. All the terms and provisions of this Agreement will be binding
upon and inure to the benefit of and be enforceable by the parties hereto and
their respective successors and permitted assigns.
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SECTION 15. PERSONNEL
The terms and conditions of this Agreement will be binding upon each
party's respective employees, agents, contractors and affiliates.
SECTION 16. WAIVERS
No delay or failure by any party hereto in exercising or enforcing any
of its rights or remedies hereunder, and no course of dealing or performance
with respect thereto, will constitute a waiver thereof. The express waiver by a
party hereto of any right or remedy in a particular instance or will not
constitute a waiver thereof in any other instance. All rights and remedies will
be cumulative and not exclusive of any other rights or remedies.
SECTION 17. AMENDMENTS
No amendment, waiver or discharge of any provision of this Agreement
will be effective unless made in writing that specifically identifies this
Agreement and the provision intended to be amended, waived or discharged and
signed by Tritel and WFI. Each such amendment, waiver or discharge will be
effective only in the specific instance and for the specific purpose for which
given.
SECTION 18. APPLICABLE LAW
This Agreement and each of the documents referred to herein shall be
interpreted, construed, applied and enforced in accordance with the laws of the
State of Mississippi, without regard to any rules governing conflicts of laws.
Subject to the requirement of Section 21 below, any action to enforce arising
out of, or relating in any way to, any of the provisions of this Agreement may
be brought and prosecuted only within such court or courts located in the State
of Mississippi as is provided by law; and the parties consent to the
jurisdiction of said court or courts located in the State of Mississippi and the
service of process by registered mail, return receipt requested, or by any other
manner provided by law.
SECTION 19. SEVERABILITY
If any provision of this Agreement is held invalid, illegal or
unenforceable in any jurisdiction, for any reason, then, to the full extent
permitted by law (a) all other provisions hereof will remain in full force and
effect in such jurisdiction and will be liberally construed in order to carry
out the intent of the parties hereto as nearly as may be possible, (b) such
invalidity, illegality or unenforceability will not affect the jurisdiction of
any court or arbitrator thereover and such court or arbitrator, as applicable,
will have the power to reform such provision to the extent necessary for such
provision to be enforceable under applicable law.
SECTION 20. ENTIRE AGREEMENT
This Agreement and the Non-disclosure Agreement, including the exhibits
and schedules hereto and thereto, constitute the entire agreement between the
parties with respect to their subject matters, and all prior or contemporaneous
oral or written communications,
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understandings or agreements between the parties with respect to such subject
matters are hereby superseded in their entireties.
SECTION 21. DISPUTES
21.1 AGREEMENT TO ARBITRATE.
If not settled by the parties pursuant to good faith negotiations, all
claims, disputes and matters in question arising out of, or relating to, this
Agreement or any claimed breach of this Agreement, , shall be decided by
arbitration in accordance with the Commercial Arbitration Rules of the American
Arbitration Association then in effect unless the parties mutually agree
otherwise. This agreement to arbitrate shall be specifically enforceable.
21.2 DEMAND FOR ARBITRATION.
Notice of demand for arbitration shall be filed in writing with the
other party to this Agreement and with American Arbitration Association. The
demand for arbitration shall be made within thirty (30) days after written
notice of the claim, dispute or other matter in question has been given, and in
no event shall it be made after the time when institution of legal or equitable
proceedings based on such claim, dispute or other matter in question would be
barred by the applicable statute of limitations, whichever occurs first. The
location of the arbitration proceeding shall be Jackson, Mississippi.
21.3 AWARD.
The award rendered by the arbitrator(s) shall be final and judgment may
be entered upon it in accordance with applicable law in any court having
jurisdiction.
21.4 EXCEPTIONS.
This agreement to arbitrate shall not apply to any claim of
contribution or indemnity asserted by one party of this Agreement against the
other party and arising out of an action brought in a state or federal court or
in arbitration by a person who is under no obligation to arbitrate the subject
matter of such action with either of the parties to this Agreement, or who does
not consent to such arbitration.
SECTION 22. COUNTERPARTS.
This Agreement may be executed in two or more counterparts that
together shall constitute a single agreement.
SECTION 23. HEADINGS.
The headings contained in this Agreement are for ease of reference and
shall not affect the interpretation or meaning of this Agreement.
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SECTION 24. PUBLICITY.
So long as this Agreement is in effect, neither WFI nor any of its
affiliates, officers, directors, employees or agents shall issue any press
release or otherwise make any public statement with respect to the existence of
this Agreement or the subject matter of this Agreement without the prior written
consent of Tritel.
The parties have executed this Agreement as of the date first set forth
above.
TRITEL COMMUNICATIONS, INC.
By:_____________________________________
Name: Bill Arnett
Its: President
ADDRESS:
1410 Livingston Lane
Jackson, Mississippi 39213-8003
Attn.: Jerry M. Sullivan, Jr.
WIRELESS FACILITIES, INC.
By:______________________________________
Name: Dr. Masood Tayebi
Its: President
ADDRESS:
9805 Scranton Road, Suite 100
San Diego, CA 92121
Attn.: Dr. Masood Tayebi, President
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EXHIBIT A
GENERAL DESCRIPTION OF SERVICES
A.1 RF ENGINEERING SERVICES
WFI specializes in the design, development and implementation of advanced
wireless communications systems. The firm offers full-service engineering
consulting for system design, implementation and optimization. Listed below are
the major engineering activities and key deliverables (broken down into three
major phases) to be provided by WFI to Tritel regarding Tritel's proposed TDMA
IS-136 PCS system. All RF Engineering services shall be performed in accordance
to specifications set forth in the Tritel Approved RF Engineering Guidelines.
This Agreement is contingent upon Tritel and WFI reaching a consensus on design
methodology and acceptance criteria within [10 days] from the execution of this
Agreement.
A.1.1 PHASE I -RF ENGINEERING SERVICES - INITIAL RF DESIGN
RF design using a basic cell-planning grid, which attempts to meet the technical
design, objectives. This design stage includes cell counts, basic propagation
analysis, and a detailed design document. A consensus allows the RF designer to
proceed to the next design step.
Major Engineering Activities:
o Establish and Finalize Design Criteria
o Perform Detailed Demographic/Traffic Data Analysis
o Complete Propagation Model Validation
o Complete System Design and Demand Analysis
o Complete Site Verification/Survey
o Analyze Drive Test Measurements
o Complete Nominal System Design
Key Deliverable: Search Area
Maps that detail for each
site: Latitude / longitude,
AMSL ground elevation,
address, coverage
objectives and preliminary
site design recommendations
(tower height, ERP, etc.).
Handoff: Site Acquisition
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Phase 1 Interim Deliverables:
o Market Visit Report that further describes market's demographic profile but
also includes data on business expansion and development, and recent
population shifts. Potential sites for propagation model validation drive
testing are identified.
o Drive Test and Propagation Model Validation Data that provides a detailed
coverage and propagation analysis (i.e. path loss per decade, 1 mile
intercept, slope, scattergrams, etc.). This data can be used to generalize
the propagation environment for similar morphological and terrestrial arc
as within the market, thereby providing Tritel with a more refined and
accurate RF prediction-modeling tool.
o Detailed Terrain Analysis Report for the markets under design. This
analysis will include identification of locations that may drastically
affect RF propagation and coverage.
o Preliminary Phase I Initial RF Design Document that includes the estimated
number of cell sites, best server plots and coverage maps for each market.
Final demographic data, terrain analysis and preliminary traffic analysis
if applicable.
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A.1.2 Phase II - RF Engineering Services - Final RF Design and Implementation
Major Engineering Activities:
o Evaluate real world sites and collocation possibilities
o Rank Candidate Sites
o Analyze Drive Test Measurements
o Engineering Analysis of Engineered Sites
o Provide RF engineering information required for FCC/FAA filings
o True-up design -Validate Sites
o Evaluation microwave incumbent cases
o Develop Preliminary Frequency Coordination
o Ensure that special design considerations and growth strategies are
being addressed
KEY DELIVERABLE: APPROVED SITES
Handoff: Site Acquisition, Site
Construction
Phase II Interim Deliverables:
o Candidate Evaluation Report that describes candidate sites submitted by
site acquisition which were evaluated on a per design site basis. The
report will also provide a detailed description of why each site was
approved or disapproved for final consideration.
o Candidate Evaluation Drive Data that provides detailed coverage information
and test configuration setup. [Drive testing for up to [CONFIDENTIAL
TREATMENT REQUESTED] of the candidate sites is included in the fixed rate
pricing.] Additional tests authorized by Tritel shall be billed at a fixed
rate per test.
o Modified RF Network Design pursuant to approved leased candidates and
collocation to be included in the final RF Networking Design. This design
will include sites that have passed zoning and are inline for permanent
placement within the system design.
o Final RF Networking Design that includes coverage, complete frequency
coordination and future issues associated with the design.
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A.1.3 Phase III - RF Engineering Services - Network Optimization
Major Engineering Activities:
o Create System Optimization Procedures
o Perform System Wide Testing and Integration
o Perform system wide interference analysis testing
o Perform Network Optimization
o Complete Frequency Coordination
o Complete Interference Testing from Non-Relocated Market
Incumbents
KEY DELIVERABLE: SYSTEM AVAILABLE FOR COMMERCIAL SERVICE
Handoff: Operations
Phase III - Interim Deliverables:
o RF Network System Optimization Guidelines and Procedures Manual that
includes descriptions of key system parameters, procedures for adjusting
parameters and processes for solving various system problems.
o RF Networking System Optimization Report detailing the current system
parameter settings and the solutions which were provided to resolve system
problems. Identify site-specific RF performance characteristics.
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EXHIBIT B
COMPENSATION
B.1 PRICING SUMMARY:
B.1.1 Fixed Rate Pricing
WFI shall perform the Services for Tritel as described in Exhibit A, Section
A.1. The Fixed Rate Pricing set forth below (which shall apply under this
Agreement unless Tritel elects to procure Services on a time and materials basis
as outlined in Section B.1.3) is on a "per site" basis. WFI shall perform the
Services for all "effective base stations" that Tritel builds in the Markets in
which Tritel has engaged WFI, as listed in Exhibit G. The fixed rate pricing
listed below is expressly based upon WFI's performing the Services for all
effective base stations in all such Markets, and upon WFI's performing all three
phases of RF Engineering Services outlined herein.
An "effective base station" shall mean either (a) the provision of Services
equaling approximately one hundred percent (100%) of the RF engineering services
required to provide RF Design, Implementation and Optimization to construct and
place in commercial service one (1) cell site within Tritel's system, or (b) the
provision of Services equaling less than one hundred percent (100%) of the RF
engineering services required to provide RF Design, Implementation and
Optimization to construct and place in service more than one (1) cell site but
which in the aggregate total approximately one hundred percent (100%) of
Services required to construct and place in commercial service an average cell
site within Tritel's total system.
[FIXED RATE PRICING PER SITE]
[CONFIDENTIAL TREATMENT REQUESTED]
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B.1.2 Volume Purchase Commitment
Section A.1 for a minimum of [CONFIDENTIAL TREATMENT REQUESTED] effective base
stations. At Tritel's election, WFI may also be engaged under this Agreement to
complete additional effective base stations as assigned by Tritel at the same
per site price.
B.1. 3 Hourly Engineering Services Rates
THE FOLLOWING RATES WILL APPLY FOR SERVICES PERFORMED ON A TIME AND MATERIAL
BASIS, IF APPLICABLE, AND ARE GOOD THROUGH DECEMBER OF 1999.
[CONFIDENTIAL TREATMENT REQUESTED]
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B.2 TEST EQUIPMENT CHARGES:
Listed below are the components whose costs are included in the fixed Rate
Pricing of Section B.1.1. This equipment is necessary to perform testing for
propagation model validation, clear channel verification and candidate
evaluation.
[CONFIDENTIAL TREATMENT REQUESTED]
The cost for additional candidate site tests is [CONFIDENTIAL TREATMENT
REQUESTED].
B.3 BOOM TRUCK RENTAL FEES:
At Tritel's request, WFI shall provide a boom truck platform, operator, fuel,
and insurance to be utilized in conjunction with propagation model and candidate
evaluation testing. WFI will provide these items [CONFIDENTIAL TREATMENT
REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED]
Extraordinary travel required by Tritel outside of travel between the designated
markets will be billed at [CONFIDENTIAL TREATMENT REQUESTED].
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B.5 OFFICE EXPENSES:
Office space and all utility costs are not part of this proposal for all markets
outside of San Diego, CA. WFI will require access to a data network, a plotter,
color printer, fax machine, and laser printer. Shipping, supplies, and copying
capabilities to be provided by Tritel at its sole expense. WFI will provide the
following equipment and software required to complete the Project.
o WIZARD(R) RF Prediction and Modeling Tool
o MAPINFO Software
o MAPINFO Databases (Census, Demographic, Traffic)
o Computers - (minimum requirements: 133 MHz, Pentium, 32 MB RAM)
o Laptop computers - (minimum requirements: 100 MHz, Pentium, 16 MB RAM)
[CONFIDENTIAL TREATMENT REQUESTED]
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B.8 TERMS OF PAYMENT
WFI's payment terms are Net 30 days upon Tritel's receipt of invoice, unless
Tritel elects the financing option set forth in the Agreement. Fixed Rate
Billing is based on [a 15-month duration] of work as to each market assigned to
WFI by Tritel during the term of this Agreement. Pricing beyond that time frame
will be based on WFI's Hourly rate set forth in Section B.1.3. Invoices shall be
rendered to the following milestone.
RF Engineering and Project Management Services Payment Milestones
Milestone: Fee:
- --------- ---
[CONFIDENTIAL TREATMENT REQUESTED]
Invoices shall initially be based on the parties' mutual good faith estimate of
the total cell sites required in the market(s) in which Services have been
commenced and which are the subject of the invoices ("Initial Invoices"). If
actual cell site counts differ from the estimated count used to calculate
Initial Invoice amounts:
I) The excess amount invoiced, if any, shall be payable by WFI to Tritel
within 30 days of receipt of WFI's adjusted invoice.
i) Shall be applied as a credit towards future invoices.
[CONFIDENTIAL TREATMENT REQUESTED]
II) The amount of deficiency in the invoice total, it any, shall be payable
by Tritel as follows:
i) if the Initial Invoice terms were net 30, like terms apply;
[CONFIDENTIAL TREATMENT REQUESTED]
As soon as the actual number of cell sites to be constructed in such markets in
determined by Tritel invoices shall thereafter be based on the actual cell site
count rather than the estimate.
B.9 CONDITIONS AND CONSIDERATIONS
The following conditions and specific assumptions apply to the fixed rate
pricing under this Agreement:
o WFI requires [CONFIDENTIAL TREATMENT REQUESTED] from issuance of
Purchase Order.
o WFI assumes a [CONFIDENTIAL TREATMENT REQUESTED] schedule per market based
on FAA tower height approval process.
o Fixed rate pricing assumes the following:
1. Completion of all associated tasks in a [CONFIDENTIAL TREATMENT
REQUESTED] period. Delays beyond such period directly attributable
to equipment vendors, zoning entries, FAA, FCC or regulatory
bodies or to Tritel's internal delays will result in charges on a
time and materials basis.
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2. Propagation Model Validation testing at a maximum of 15% of the
total Project sites.
3. Evaluation of up to [CONFIDENTIAL TREATMENT REQUESTED] viable
candidates submitted by site acquisition personnel per Search
Area.
4. Drive testing of up to [CONFIDENTIAL TREATMENT REQUESTED] of the
total sites will be performed for candidate evaluation. If
requested by Tritel, additional tests can be performed at the rate
specified in Section B.2.
5. Caravan of 1 site per search area.
6. Use of Wizard (R) propagation software for the specified duration
of this Project is included. Use of another tool and any Unix
workstations required for the tool would be at a straight
pass-through charge to Tritel.
[CONFIDENTIAL TREATMENT REQUESTED]
o Tritel will provide WFI personnel access to full office workspace outside
of San Diego, CA at Tritel's sole expense.
o Tritel will provide Letters of Intent for sites to be used in Propagation
Model Validation testing.
o Crane rental charges are optional services available to Tritel as specified
in Section B.3.
o Technology-specific phones and test equipment required for network
optimization is not included.
o FAA filing and authorization is excluded.
o IM testing and Electromagnetic Exposure testing is excluded.
o If WFI is required to redesign the initial search rings, a change order
will be issued from WFI specifying out of scope changes. Additional
payments will be billed on a time and material basis.
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EXHIBIT C
GENERAL MILESTONE AND ACCEPTANCE CRITERIA SCHEDULE
Milestone Completion and Acceptance Criteria of RF Engineering Deliverables for
Tritel Wireless Markets.
The following conditions, when fulfilled, define Milestone completion and
acceptance criteria for the Services ("Acceptance"). Tritel acknowledges and
accepts that failure to adhere to the Acceptance Criteria unless otherwise
authorized in writing by WFI shall constitutes waiver for all Tritel's claims
against WFI for subsequent delays or failures in network performance.
Acceptance Criteria:
MILESTONE NO. 1 NOMINAL RF DESIGN
i. Tritel will designate a single contract to provide authorized
acceptance and final approvals of all WFI deliverables.
ii. Tritel and WFI must create and mutually agree upon market by market
design criteria prior to the initiation of design activities, including
service levels, reliability margins, coverage objectives, subscriber
counts and planned system growth.
iii. Tritel, WFI and Tritel's designated equipment vendor must agree on
equipment performance specifications to be utilized in the design of
Tritel's network prior to the initiation of design activities. Final
responsibility for all equipment performance issues remains with
Tritel's designated equipment vendor.
iv. Tritel and WFI will mutually agree on Computer-aided design tools to be
utilized during the design of Tritel's markets.
v. WFI will recommend at its discretion the appropriate quantity of sites
required for Propagation Model Validation (PMV) Tests in individual
markets in order to calibrate industry accepted computer-aided
simulation models utilized in the design of Tritel's markets. Tritel is
responsible for providing timely permission to access to selected PMV
sites via its designated Site Acquisition Contractor. Tritel is
responsible for providing clear frequencies for use by WFI in PMV
testing, errors resulting from non-clear frequencies provided to WFI
resulting in erroneous PMV data will be Tritel's responsibility.
vi. WFI will make available to Tritel for its approval the nominal RF
design of individual markets, including link budgets, model parameters,
antenna specifications and expected coverage criteria during a formal
design review prior to issuance of Search Area Maps to Tritel's
designated Site Acquisition Contractor.
MILESTONE NO. 2 SEARCH AREA MAPS
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i. Issuance of Search Area Maps
MILESTONE NO. 3 SITE ACCEPTANCE
i. Information for site candidates will be provided in a format mutually
agreed to by WFI, Tritel and its designated Site Acquisition
Contractor. WFI will be responsible for approval or disapproval of
proposed candidates within a mutually agreed to review interval.
ii. Tritel or its designate will provide timely access to all candidate
sites required by WFI for candidate testing during the site approval
process.
iii. Any design criteria exceptions will be mutually agreed upon between WFI
and Tritel and Tritel's equipment vendor if appropriate. Design
criteria exceptions include, but are not limited to: Antenna Radiation
Centerline Heights, Antenna Orientations, Site locations outside of
specified search area, Antenna Placement and deviation from recommended
site validation activities.
iv. WFI and Tritel will mutually agree upon a format for delivering
required information for FCC and FAA filings.
MILESTONE NO. 4 OPTIMIZATION
i. Tritel will provide WFI with available cleared spectrum on a market by
basis for use in frequency planning activities. Available spectrum must
be sufficient to support a mutually agreed upon frequent reuse plan to
meet approval channel counts.
ii. WFI will make available to Tritel for its approval the final RF design
of individual markets, including link budgets, model parameters,
antenna specifications, expected coverage criteria, final frequency
plan and traffic channel plan during a formal design review prior to
initiation of frequency planning activities.
iii. Performance of antennas within specified operational perimeters are the
sole responsibilities of the antenna vendor.
iv. WFI, Tritel and Tritel's equipment vendor will mutually agree on a
format for required equipment database information
v. WFI, Tritel and Tritel's equipment vendor will mutually agree to an
Optimization Test Plan developed by WFI.
vi. WFI will not initiate cluster-testing activities until all sites have
completed Tritel's vendor commissioning process.
vii. Delays in optimization due to equipment failure, installation problems
or construction defects will be the responsibility of Tritel's
designated vendors.
viii. Delays in optimization due to failure to implement required engineering
parameter changes will be the responsibility of Tritel or its
designated operations agent.
ix. WFI requires remote access to switch databases in order to verify
engineering parameter changes.7
x. Optimization Tests will be performed on baseline drives of primary
routes within the established service area, operating to the
established design criteria.
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EXHIBIT D
SCOPE OF SERVICES FOR MICROWAVE RELOCATION SERVICES
I. MICROWAVE RELOCATION SERVICES
WFI, utilizing Comsearch IQ Clear (R), a spectrum sharing tool procured and
provided by WFI, will supply to Tritel all labor, services, resources, and
consultation necessary to perform the following four (4) tasks: 1.) Spectrum
Sharing Engineering Study and Analysis and Initial Market Assessment, 2.)
Negotiations and Program Management 3.) Drive Test Frequency Selection and 4.)
Prior Coordination Notices as described below (collectively "Services") and
assigned pursuant to a work order (each, a "W.O") issued by Tritel and accepted
by WFI, a sample of which is attached hereto as Exhibit F.
1. SPECTRUM SHARING ENGINEERING STUDY AND ANALYSIS AND INITIAL MARKET ASSESSMENT
WFI will perform spectrum-sharing studies, as required, for selected frequency
block(s), in each assigned BTA, based on RF design information provided by
Tritel. If an RF design is not available, WFI will utilize traffic based cell
lay out to conduct the initial analysis. WFI will utilize the results of the
analysis in performing the following steps as required to complete assessment of
interfering paths/incumbents identified in the spectrum sharing study including
status and initial budgetary analyses for each path.
A. SERVICE DESCRIPTION
1. Spectrum Sharing Analyses. WFI will perform spectrum-sharing studies,
as required, for each assigned BTA and frequency block. The study will
be based on RF design information provided by Tritel or on a traffic
based cell layout, and will identify all microwave paths that could
affect or be affected by Tritel's proposed PCS systems, based on FCC
guidelines on interference avoidance.
2. Review and Catalog Path Data. Review information from the spectrum
sharing analysis on a per market and per incumbent basis for both
co-channel and adjacent channel paths. Information such as number of
links, equipment and modulation type, capacity, site names and
locations for each path will be logged for use during negotiations and
relocation program management.
3. Review of Incumbent Data. WFI will review incumbent system data on a
per link basis and compare the information against FCC database
information to determine whether the incumbent is operating on a
primary status with a current license.
4. Path Status Verification and Initial Incumbent Assessment. WFI will
contact each incumbent to confirm database information, verify path
status, i.e. active, negotiated, or decommissioned. If the incumbent
has not entered into an agreement with another PCS licensee, then WFI
will assess the incumbent's willingness to negotiate, identify
strategic information, and discuss preliminary relocation options.
5. Assessment of Previously Negotiated Paths. WFI will attempt to obtain
the terms and status of each relocation agreement entered into between
an incumbent and other PCS licensee(s). WFI will attempt to obtain a
copy of the agreement, provided that it is not
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protected by a non-disclosure agreement. WFI will determine whether
the dates agreed upon in the relocation agreement meet Tritel's
requirements.
6. Estimate Comparable Relocation Costs. Estimate relocation costs on a
per incumbent and per market basis for paths that are determined to be
active or co-channel paths that have been negotiated and/or relocated.
Information such as system type and architecture, number of links
required to be relocated, tower heights and typical system usage will
be used to develop the cost estimates.
7. Route Mapping. Develop route maps on a per incumbent and per market
basis delineating co-channel and adjacent channel active paths.
Deliverables:
WFI will provide Tritel with periodic reports containing the following
information:
1. Copies of FCC licenses for each identified path;
2. Comparable cost documentation for each active path or for each
co-channel paths which have been negotiated and/or relocated;
3. Detailed budgetary cost analysis on a per BTA and frequency block
basis;
4. Route maps; and
5. Frequency relocation contract templates
2. NEGOTIATIONS AND PROGRAM MANAGEMENT
Service Description
1. Introductory Mailing. WFI will identify the proper technical and
negotiation contact for each incumbent and send an introductory mailing
packet containing general information on microwave relocation and
specific information about Tritel and its proposed course of action.
2. Negotiation Parameters. WFI will work with Tritel to develop
negotiation parameters. These parameters should be established prior to
the commencement of negotiations so that settlements may be negotiated
expeditiously.
3. Development of Negotiation Strategies. WFI will work with Tritel to
develop optimal negotiation strategies for each incumbent and market.
These strategies will be based upon the size and location of each
incumbent's network, considering whether the incumbent is present in
multiple Tritel markets, Tritel's priorities and its willingness to
provide various relocation alternatives.
4. Initiate Negotiations. WFI will negotiate with incumbent to reach an
agreement that conforms to Tritel's relocation schedule and cost
parameters.
5. Additional Negotiation and Finalization of Agreement for Amended
Relocation Dates. If a path has been negotiated by another PCS
licensee, but the relocation date(s) are unacceptable to Tritel, then
WFI will initiate negotiations with the incumbent, other PCS
licensee(s) or both to alter the unacceptable relocation dates and
bring them into conformity with Tritel's relocation priorities.
Page 28 of 37
CONFIDENTIAL MATERIAL TRITEL COMMUNICATIONS, INC.
<PAGE>
6. Negotiation Strategy. WFI will re-assess negotiation parameters and
strategies as required based on discussions with incumbents, additional
information obtained from incumbent meeting, and any modifications to
Tritel's deployment schedule
7. Contract Templates. Tritel's inside counsel shall review and modify, as
required, the contract templates that WFI provided to Tritel. These
pre-approved contract templates are essential for enabling WFI to
conclude negotiations in an efficient and expedient manner.
8. Finalize Relocation Terms. WFI will provide the proposed business terms
to Tritel for approval.
9. Finalize Relocation Agreement. Once Tritel has approved the business
terms, WFI, shall work with Tritel's counsel to facilitate the
negotiation and execution of the final relocation agreement between
Tritel and the incumbent.
10. Frequency Coordination. WFI will order frequency coordination. If
required, WFI will prepare the required FCC license applications for
incumbent's signature and submit such applications to the FCC
11. Detailed Relocation System Design. WFI will order engineering services
required to design and engineer the microwave path including path and
site surveys and network system design.
12. Third Party Proposals. WFI will obtain and review third party proposals
for equipment and/or services, including but not limited to
construction, installation, testing and training and other services
required to implement the turnkey replacement and make a recommendation
to Tritel as to which proposal to accept.
13. Tower Stress and Foundation Analysis. WFI will order any required tower
and foundation analyses. WFI will coordinate and program manage the
entire process.
14. Tower Options Analysis. WFI will review results of the tower and/or
foundation analysis and based on the recommendation made by the
Supplier, determine most cost-effective option such as structural
strengthening, replacement, or alternate courses of action.
15. Leased Facilities. In the event that an incumbent transfers its
operations to leased facilities and
requests Tritel's assistance in the transfer, WFI will coordinate the
transfer of the facilities to
alternate leased by the scheduled decommissioning date
16. Relocation Plan. WFI will develop a relocation plan that sets forth
detailed relocation requirements including equipment procurement
requirements, time line requirements, system performance requirements
and detailed installation requirements. These detailed installation
requirements will include testing, acceptance, and commissioning
requirements.
17. Installation Feasibility Analysis. WFI, in coordination with a third
party equipment supplier and installer, will conduct an installation
feasibility analysis in order to identify detailed installation
requirements and to ensure that decommissioning objectives are met.
18. Installation Oversight. WFI will supervise the installation of the
replacement system to ensure that the old system is decommissioned on
schedule and that the incumbent is satisfied with the installation of
the replacement system.
Page 29 of 37
CONFIDENTIAL MATERIAL TRITEL COMMUNICATIONS, INC.
<PAGE>
19. Tower Modification Oversight. WFI will monitor third party Suppliers'
performance to ensure timely completion of their obligations.
20. Documentation Review. WFI will review "as-built" documentation prepared
by third party Suppliers, verify completion of third party supplier
contractual requirements, and recommend to Tritel to proceed with final
payment based on acceptance criteria.
21. Incumbent Acceptance. WFI will obtain final incumbent acceptance of
equipment and facility
installation. WFI will ensure incumbent's satisfaction that the
contractual obligations by Tritel and
its subcontractors (if applicable) have been met
22. Final Cost Documentation. WFI will provide Tritel with a final
accounting of the costs incurred to perform the turnkey relocation
project
23. Monitoring of Incumbent's Performance Obligations. For paths that
resulted in a cash transaction between Incumbent and Tritel, WFI will
monitor incumbent to ensure compliance with contractual obligations and
report such status to Tritel.
24. Decommissioning Notification. WFI will notify Tritel of completion of
the relocation and provide Tritel with copies of FCC Form 415s and/or
FCC licenses indicating that the 2 GHz frequencies have been removed
and decommissioned.
B. Deliverables
WFI will provide Tritel the following deliverables on a per incumbent basis:
1. Signed offer letter;
2. Executed contract between incumbent and Tritel;
3. Periodic reports containing the status on incumbent compliance with
the frequency relocation agreement including status on path
decommissioning.
4. Where applicable, WFI shall provide to Tritel the following
information:
a) Test reports;
b) Procurement documentation;
c) Project management reports;
d) Equipment test certification;
e) Photos, drawings and other information obtained from site
visits
f) Cut-over documentation; and
g) Equipment removal certification.
5. WFI shall provide Tritel with copies of FCC Form 415s for
decommissioned paths.
Page 30 of 37
CONFIDENTIAL MATERIAL TRITEL COMMUNICATIONS, INC.
<PAGE>
3. Drive Test Frequency Selection
WFI will complete the spectrum analysis and provide Tritel with the required
drive test frequencies for the assigned BTS locations (if a non-interfering
frequency is available).
4. Prior Coordination Notices
WFI will prepare Prior Coordination Notices (PCN(s)), mail PCNs to
incumbents and clearinghouses, and coordinate responses and objections to
PCNs, as required. Typically one PCN mailing will be required for each BTA,
unless considerable RF engineering design changes occur later in the
pre-launch phase. As a result of RF design changes, additional PCN(s) will
be performed as required.
5. Cost Sharing Support
WFI will support Tritel in cost sharing negotiations with PCS licensees for
those co-channel paths that have been relocated by these licensees (the "PCS
Relocators"). WFI will analyze the reimbursement amount requested by a PCS
Relocator and the supporting itemized cost documentation provided by the PCS
Relocator and evaluate its validity with respect the FCC's cost-sharing
rules. WFI will support Tritel in negotiations to ensure Tritel pays the
appropriate amount for its reimbursement obligations as per the FCC's rules.
If necessary and if there is no conflict of interest (i.e. WFI has not been
contracted to negotiate on behalf of the PCS Relocator), WFI will negotiate
directly with the PCS Relocator to determine the appropriate reimbursement
amount.
Page 31 of 37
CONFIDENTIAL MATERIAL TRITEL COMMUNICATIONS, INC.
<PAGE>
EXHIBIT E
PRICING AND PASS THROUGH EXPENSES FOR MICROWAVE RELOCATION SERVICES
[CONFIDENTIAL TREATMENT REQUESTED]
B. PAYMENT TERMS:
1) GENERAL
a) Tritel shall pay invoices within thirty days of receipt
2) SPECIFIC
(1) Spectrum Sharing Engineering Study and Analysis and Initial
Market Assessment
(2) WFI will submit an invoice upon submission of applicable
deliverable items
b) Negotiations and Program Management
(1) WFI will submit an invoice for [CONFIDENTIAL TREATMENT
REQUESTED] for the applicable path(s) upon execution of an
agreement with the incumbent
(2) WFI will submit an invoice for the remaining [CONFIDENTIAL
TREATMENT REQUESTED] for the applicable paths(s) once the path
has been decommissioned and upon submitting applicable
deliverable items.
c) Drive Test Frequency Selection
(1) WFI will submit an invoice on a monthly basis for all drive
test frequency selections completed during that month.
d) Prior Coordination Notices
(1) WFI will submit an invoice upon submitting applicable
deliverable items.
e) Cost Sharing Support
(1) WFI will submit an invoice for [CONFIDENTIAL TREATMENT
REQUESTED] for the applicable path(s) upon assignment of such
paths by Tritel.
(2) WFI will submit an invoices on a per path basis for the
remaining [CONFIDENTIAL TREATMENT REQUESTED] of the service
fee for the applicable paths(s) upon completion of
negotiations and an agreement as to the reimbursement amount.
C. EXPENSE REIMBURSEMENT
The pricing set forth above includes WFI's Services only and does not
include additional expenses incurred in completing the microwave
replacement. Tritel shall reimburse WFI for the cost of any expenses
incurred by WFI. The list below sets forth the estimates for the type of
expenses that may be incurred:
ACTIVITY TYPICAL COST
-------- ------------
[CONFIDENTIAL TREATMENT REQUESTED]
Page 32 of 37
CONFIDENTIAL MATERIAL TRITEL COMMUNICATIONS, INC.
<PAGE>
For reimbursable expense items that are less than [CONFIDENTIAL TREATMENT
REQUESTED] WFI shall invoice Tritel promptly upon completion of the event for
which reimbursement is sought. For reimbursable expense items that are equal to
or greater than [CONFIDENTIAL TREATMENT REQUESTED], WFI shall prepare and submit
to Tritel a purchase requisition and Tritel shall pay the third party supplier
directly.
Page 33 of 37
CONFIDENTIAL MATERIAL TRITEL COMMUNICATIONS, INC.
<PAGE>
EXHIBIT F
SAMPLE WORK ORDER
WORK ORDER NO.:___
DATE:
Tritel Communications, Inc. ("Tritel") on this _____ day of __________, 199__
hereby requests that Wireless Facilities, Inc. ("WFI") provide the services set
forth below (the "Services") subject to the terms and conditions set forth
herein and in accordance with the provisions of the Services Agreement dated
____________________ or any subsequent Microwave Relocation Services Agreement
(the "Agreement") by and between Tritel and WFI, according to the following
terms:
1. ASSIGNMENT:
2. DESCRIPTION OF SERVICES:
3. SERVICE FEE:
4. PAYMENT SCHEDULE:
5. PASS THROUGH EXPENSES Tritel shall reimburse WFI for pass through
expenses as set forth in Exhibit B of the Letter of Agreement.
6. COMMENCEMENT OF SERVICES: WFI shall commence performance of the Services
immediately upon full execution of this W.O.
7. INCORPORATION: This W.O. shall be appended to the Letter of Agreement or
the Agreement and is incorporated therein by reference. All of the terms
and conditions of the Letter of Agreement or the Agreement shall apply to
the provision of Services hereunder; however, in case of conflict, the
terms of this W.O. shall govern.
TRITEL COMMUNICATIONS, INC. WIRELESS FACILITIES, INC.
- ------------------------- ---------------------------
- ------------------------- ---------------------------
Print Name Print Name
- ------------------------- ---------------------------
Title Title
Page 34 of 37
CONFIDENTIAL MATERIAL TRITEL COMMUNICATIONS, INC.
<PAGE>
EXHIBIT G
TRITEL MARKETS ASSIGNED TO WFI
<TABLE>
<CAPTION>
PROJECT OFFICE COUNTY STATE NAME MAJOR BASIC METROPOLITAN
TRADING TRADING STATISTICAL AREAS
AREAS AREAS AND RURAL SERVICE
(MTA) (BTA) AREAS (MSA/RSA)
<S> <C> <C> <C> <C> <C>
Louisville Clark Indiana 26 263 37
==================================================================================================
==================================================================================================
Louisville Crawford Indiana 26 263 410
==================================================================================================
==================================================================================================
Louisville Floyd Indiana 26 263 37
==================================================================================================
==================================================================================================
Louisville Harrison Indiana 26 263 410
==================================================================================================
==================================================================================================
Louisville Jefferson Indiana 26 263 411
==================================================================================================
==================================================================================================
Louisville Scott Indiana 26 263 411
==================================================================================================
==================================================================================================
Louisville Washington Indiana 26 263 410
==================================================================================================
==================================================================================================
Louisville Adair Kentucky 26 263 447
==================================================================================================
==================================================================================================
Louisville Anderson Kentucky 26 252 446
==================================================================================================
==================================================================================================
Louisville Bath Kentucky 26 252 450
==================================================================================================
==================================================================================================
Louisville Bourbon Kentucky 26 252 116
==================================================================================================
==================================================================================================
Louisville Boyle Kentucky 26 252 448
==================================================================================================
==================================================================================================
Louisville Breathitt Kentucky 26 252 452
==================================================================================================
==================================================================================================
Louisville Breckinridge Kentucky 26 263 445
==================================================================================================
==================================================================================================
Louisville Bullitt Kentucky 26 263 37
==================================================================================================
==================================================================================================
Louisville Carroll Kentucky 26 263 449
==================================================================================================
==================================================================================================
Louisville Clark Kentucky 26 252 116
==================================================================================================
==================================================================================================
Louisville Edmonson Kentucky 26 52 445
==================================================================================================
==================================================================================================
Louisville Estill Kentucky 26 252 452
==================================================================================================
==================================================================================================
Louisville Fayette Kentucky 26 252 116
==================================================================================================
==================================================================================================
Louisville Fleming Kentucky 26 252 450
==================================================================================================
==================================================================================================
Louisville Franklin Kentucky 26 252 449
==================================================================================================
==================================================================================================
Louisville Garrard Kentucky 26 252 448
==================================================================================================
==================================================================================================
Louisville Grayson Kentucky 26 263 445
==================================================================================================
==================================================================================================
Louisville Green Kentucky 26 263 446
==================================================================================================
==================================================================================================
Louisville Hardin Kentucky 26 263 446
==================================================================================================
==================================================================================================
Louisville Harrison Kentucky 26 252 449
==================================================================================================
==================================================================================================
Louisville Hart Kentucky 26 263 447
==================================================================================================
==================================================================================================
Louisville Henry Kentucky 26 263 449
==================================================================================================
==================================================================================================
Louisville Jackson Kentucky 26 252 452
==================================================================================================
==================================================================================================
Louisville Jefferson Kentucky 26 263 37
==================================================================================================
==================================================================================================
Louisville Jessamine Kentucky 26 252 116
==================================================================================================
==================================================================================================
Louisville Knott Kentucky 26 252 452
==================================================================================================
==================================================================================================
Louisville Larue Kentucky 26 263 446
==================================================================================================
==================================================================================================
Louisville Lee Kentucky 26 252 452
==================================================================================================
==================================================================================================
Louisville Leslie Kentucky 26 252 453
==================================================================================================
==================================================================================================
Louisville Lincoln Kentucky 26 252 448
==================================================================================================
==================================================================================================
Louisville Madison Kentucky 26 252 448
==================================================================================================
==================================================================================================
Louisville Magoffin Kentucky 26 252 451
==================================================================================================
==================================================================================================
Louisville Marion Kentucky 26 263 446
==================================================================================================
==================================================================================================
Louisville Meade Kentucky 26 263 445
==================================================================================================
==================================================================================================
Louisville Menifee Kentucky 26 252 450
==================================================================================================
==================================================================================================
Louisville Mercer Kentucky 26 252 446
==================================================================================================
==================================================================================================
Louisville Montgomery Kentucky 26 252 450
==================================================================================================
==================================================================================================
Louisville Morgan Kentucky 26 252 451
Page 35 of 37
CONFIDENTIAL MATERIAL TRITEL COMMUNICATIONS, INC.
<PAGE>
PROJECT OFFICE COUNTY STATE NAME MAJOR BASIC METROPOLITAN
TRADING TRADING STATISTICAL AREAS
AREAS AREAS AND RURAL SERVICE
(MTA) (BTA) AREAS (MSA/RSA)
==================================================================================================
Louisville Nelson Kentucky 26 263 446
==================================================================================================
==================================================================================================
Louisville Nicholas Kentucky 26 252 450
==================================================================================================
==================================================================================================
Louisville Oldham Kentucky 26 263 37
==================================================================================================
==================================================================================================
Louisville Owen Kentucky 26 252 449
==================================================================================================
==================================================================================================
Louisville Owsley Kentucky 26 252 452
==================================================================================================
==================================================================================================
Louisville Perry Kentucky 26 252 452
==================================================================================================
==================================================================================================
Louisville Powell Kentucky 26 252 452
==================================================================================================
==================================================================================================
Louisville Robertson Kentucky 26 252 450
==================================================================================================
==================================================================================================
Louisville Rockcastle Kentucky 26 252 448
==================================================================================================
==================================================================================================
Louisville Rowan Kentucky 26 252 450
==================================================================================================
==================================================================================================
Louisville Scott Kentucky 26 252 116
==================================================================================================
==================================================================================================
Louisville Shelby Kentucky 26 263 449
==================================================================================================
==================================================================================================
Louisville Spencer Kentucky 26 263 446
==================================================================================================
==================================================================================================
Louisville Taylor Kentucky 26 263 446
==================================================================================================
==================================================================================================
Louisville Trimble Kentucky 26 263 449
==================================================================================================
==================================================================================================
Louisville Warren Kentucky 26 52 445
==================================================================================================
==================================================================================================
Louisville Washington Kentucky 26 263 446
==================================================================================================
==================================================================================================
Louisville Wolfe Kentucky 26 252 452
==================================================================================================
==================================================================================================
Louisville Woodford Kentucky 26 252 116
==================================================================================================
==================================================================================================
Nashville Allen Kentucky 26 52 445
==================================================================================================
==================================================================================================
Nashville Barren Kentucky 26 52 447
==================================================================================================
==================================================================================================
Nashville Butler Kentucky 26 52 445
==================================================================================================
==================================================================================================
Nashville Caldwell Kentucky 43 83 444
==================================================================================================
==================================================================================================
Nashville Christian Kentucky 43 83 209
==================================================================================================
==================================================================================================
Nashville Clinton Kentucky 26 52 447
==================================================================================================
==================================================================================================
Nashville Cumberland Kentucky 26 52 447
==================================================================================================
==================================================================================================
Nashville Logan Kentucky 26 52 445
==================================================================================================
==================================================================================================
Nashville Metcalfe Kentucky 26 52 447
==================================================================================================
==================================================================================================
Nashville Monroe Kentucky 26 52 447
==================================================================================================
==================================================================================================
Nashville Simpson Kentucky 26 52 445
==================================================================================================
==================================================================================================
Nashville Todd Kentucky 43 83 445
==================================================================================================
==================================================================================================
Nashville Trigg Kentucky 43 83 444
==================================================================================================
==================================================================================================
Nashville Warren Kentucky 26 52 445
==================================================================================================
==================================================================================================
Nashville Bedford Tennessee 43 314 648
==================================================================================================
==================================================================================================
Nashville Benton Tennessee 43 314 643
==================================================================================================
==================================================================================================
Nashville Cannon Tennessee 43 314 644
==================================================================================================
==================================================================================================
Nashville Cheatham Tennessee 43 314 46
==================================================================================================
==================================================================================================
Nashville Clay Tennessee 43 314 645
==================================================================================================
==================================================================================================
Nashville Coffee Tennessee 43 314 644
==================================================================================================
==================================================================================================
Nashville Davidson Tennessee 43 314 46
==================================================================================================
==================================================================================================
Nashville DeKalb Tennessee 43 314 644
==================================================================================================
==================================================================================================
Nashville Dickson Tennessee 43 314 46
==================================================================================================
==================================================================================================
Nashville Franklin Tennessee 43 314 648
==================================================================================================
==================================================================================================
Nashville Giles Tennessee 43 314 648
==================================================================================================
==================================================================================================
Nashville Henry Tennessee 43 314 643
==================================================================================================
==================================================================================================
Nashville Hickman Tennessee 43 314 647
==================================================================================================
==================================================================================================
Nashville Houston Tennessee 43 83 643
==================================================================================================
==================================================================================================
Nashville Humphreys Tennessee 43 314 643
==================================================================================================
==================================================================================================
Nashville Lawrence Tennessee 43 314 647
==================================================================================================
==================================================================================================
Nashville Lewis Tennessee 43 314 647
==================================================================================================
Page 36 of 37
CONFIDENTIAL MATERIAL TRITEL COMMUNICATIONS, INC.
<PAGE>
PROJECT OFFICE COUNTY STATE NAME MAJOR BASIC METROPOLITAN
TRADING TRADING STATISTICAL AREAS
AREAS AREAS AND RURAL SERVICE
(MTA) (BTA) AREAS (MSA/RSA)
=================================================================================================
Nashville Macon Tennessee 43 314 645
==================================================================================================
==================================================================================================
Nashville Marshall Tennessee 43 314 648
==================================================================================================
==================================================================================================
Nashville Maury Tennessee 43 314 651
==================================================================================================
==================================================================================================
Nashville Montgomery Tennessee 43 83 209
==================================================================================================
==================================================================================================
Nashville Moore Tennessee 43 314 648
==================================================================================================
==================================================================================================
Nashville Perry Tennessee 43 314 647
==================================================================================================
==================================================================================================
Nashville Robertson Tennessee 43 314 46
==================================================================================================
==================================================================================================
Nashville Rutherford Tennessee 43 314 46
==================================================================================================
==================================================================================================
Nashville Smith Tennessee 43 314 644
==================================================================================================
==================================================================================================
Nashville Stewart Tennessee 43 83 643
==================================================================================================
==================================================================================================
Nashville Sumner Tennessee 43 314 46
==================================================================================================
==================================================================================================
Nashville Trousdale Tennessee 43 314 645
==================================================================================================
==================================================================================================
Nashville Van Buren Tennessee 43 314 644
==================================================================================================
==================================================================================================
Nashville Warren Tennessee 43 314 644
==================================================================================================
==================================================================================================
Nashville Williamson Tennessee 43 314 46
==================================================================================================
==================================================================================================
Nashville Wilson Tennessee 43 314 46
==================================================================================================
</TABLE>
Page 37 of 37
CONFIDENTIAL MATERIAL TRITEL COMMUNICATIONS, INC.
<PAGE>
This Addendum dated as of the 23rd day of March, 1999 is made between Tritel
Communications, Inc. (Tritel) and Galaxy Personal Communications Services Inc.
(Galaxy) and supercedes those provisions agreed to by the parties signed under
the terms and conditions of the "Services Agreement" between Tritel and Galaxy
dated June 1, 1998. All other terms and conditions of the original "Services
Agreement" remain binding upon both parties with the exceptions of the sections
amended below which shall become effective upon the date signed.
Section 1. THE SERVICES
1.3 Time is of the Essence
Tritel and Galaxy acknowledge that the original project schedule
contemplating completion of all activities within fifteen months
per market upon initiation of design activities in each market,
has changed due to new marketing and budget objectives of Tritel.
Galaxy will continue to utilize its best efforts to meet any new
project schedule when it becomes available and agreeable to both
parties.
1.9 Consequences for Delay
This section is to be deleted due to changes in Tritel project
schedule, which led to redesign activities and changes to the
launch dates of markets.
Section 2. COMPENSATION
2.1 Compensation
Tritel will pay Galaxy for services rendered in accordance with
the schedule listed below. This pricing table supercedes the
compensation schedule identified in the original Agreement. Tritel
will compensate Galaxy for services rendered in accordance with
the schedule listed below:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
Service Type Time Staffing Level Price
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Exhibit A RF January 16, 1999 - [CONFIDENTIAL [CONFIDENTIAL
Services December 31, 1999 TREATMENT REQUESTED] TREATMENT REQUESTED](1)
engineers and flat monthly rate(2)
management as including travel and
appropriate living
for approximately 450 expenses. For
turnkey sites and [CONFIDENTIAL
search ring issuance TREATMENT REQUESTED]
in all Phase II and engineers, actual
Phase III markets.(3) travel and living
expenses will be
charged in addition to
the flat monthly rate
- ------------------------------------------------------------------------------------------------
</TABLE>
Tritel agrees to the fees and volume of resources outline above
for Galaxy's professional services until December 31, 1999. This
schedule will remain in effect unless Galaxy is notified by Tritel
sixty (60) days in advance of any staffing reduction at which time
Tritel will define the number and type of engineering resource
required to fulfill the remaining terms of this Services
Agreement.
- -------------------
(1) Includes expenses as described in Exhibit B.4 Travel Expenses in the
original Tritel-Galaxy Services Agreement dated June 1, 1998.
Extraordinary travel, particularly during optimization phases of
project billed at [CONFIDENTIAL TREATMENT REQUESTED].
(2) Monthly rate includes a maximum hourly component of 9 hours per day per
man assuming a five-day workweek. Additional hours billed at hourly
rates as described at Exhibit B.1.3 Hourly Engineering Services Rate in
the original Tritel--Galaxy Services Agreement dated June 3, 1998.
(3) Phase II Markets Include: Mobile, Pascagoula/ Biloxi/ Gulport,
Hattiesburg, Meridian, Laurel, Anniston, Tuscaloosa, Tupelo. Phase III
Markets Include: Florence, Gadsden, Selma, Dothan, Corinth, Starkville,
Greenville, Natchez, McComb/ Brookhaven.
<PAGE>
At Tritel's option, Tritel may increase the number of Galaxy engineering
resources on the project team with thirty (30) days notice to Galaxy of Tritel's
intent to add to the team of twenty-eight full-time staff members. The rate to
add each resource is listed in Schedule B.1.3. of the Services Agreements
between Tritel and Galaxy signed June 1 and August 27, 1998 and would not
require a commitment for the duration of 1999. Tritel would be required to
provide Galaxy thirty (30) days notice prior to releasing those additional
resources from the project.
Section 13. EVENT OF DEFAULT
Delete (iii) This section to be deleted due to changes in project scope.
Delete (v) This section to be deleted due to changes in project scope.
Exhibit B. Compensation
B.1.1 This section to be deleted due to changes in project scope. As of
June 10, 1999, no fixed rate fees are due and owing to Galaxy
Engineering.
B.1.2 This section to be deleted due to changes in project scope.
The parties have executed this amendment of Agreement as of the date first set
forth below:
Tritel Communications, Inc. Galaxy Personal Communications
Services, Inc.
By: By:
Name: William S. Arnett Name: Joseph W. Forbes, Jr.
Its: President Its: President
Date: 6-21-99 Date:
<PAGE>
EXHIBIT I
AGREEMENT
FOR
PROJECT AND CONSTRUCTION
MANAGEMENT SERVICES
BETWEEN
TRITEL COMMUNICATIONS, INC. AND TRITEL FINANCE, INC.
AND
BECHTEL CORPORATION
CONFIDENTIAL
<PAGE>
EXHIBIT 1
TABLE OF CONTENTS
ARTICLE PAGE NO.
1.0 Project.........................................................1
2.0 Contractor's Services...........................................1
3.0 Information and Items to be Furnished by Owner..................3
4.0 Notice to Proceed and Time of Performance.......................4
5.0 Compensation and Payment........................................4
6.0 Accounting of Costs.............................................5
7.0 Changes and Extra Work..........................................5
8.0 Notice and Acceptance of Completion.............................5
9.0 Responsibility of Contractor....................................6
10.0 Insurance.......................................................8
11.0 Ownership of Plans and Title to Work............................9
12.0 Force Majeure..................................................12
13.0 Termination....................................................12
14.0 Suspension of Services.........................................13
15.0 Notices........................................................13
16.0 Representative of the Parties..................................14
17.0 Transfer of Ownership..........................................14
18.0 Assignment and Subcontracts....................................15
19.0 Fair Operation of Agreement....................................15
20.0 Dispute Resolution.............................................15
21.0 Applicable Law.................................................16
22.0 Successors and Assigns.........................................16
23.0 Severability...................................................16
24.0 Entire Agreement...............................................16
25.0 Disclosure.....................................................17
ATTACHMENT A Scope of Services A-1
ATTACHMENT B Compensation B-1
ATTACHMENT C Description of Contractor Positions C-1
ATTACHMENT D Staffing Plan and Estimated ODCs D-1
CONFIDENTIAL
<PAGE>
EXECUTION COPY
AGREEMENT
FOR
PROJECT AND CONSTRUCTION
MANAGEMENT SERVICES
THIS AGREEMENT ("Agreement") is entered into this 24th day of November, 1998,
by and between TRITEL COMMUNICATIONS, INC. and TRITEL FINANCE, INC. (jointly,
"Owner"), and BECHTEL CORPORATION ("Contractor") but shall be effective as of
the date final approval by Owner's board(s) of directors is obtained. Owner
shall notify Contractor in writing promptly of the date that such final
approval is obtained and confirming the effective date of this Agreement.
Contractor agrees to furnish the skill and judgment specified in Paragraph 9.1
in furthering the interests of Owner. Contractor agrees to furnish efficient
administration and management services as described in this Agreement and to
perform such services in an expeditious and economical manner consistent with
this Agreement and the best interests of Owner.
1.0 THE PROJECT
1.1 The project consists of the build-out of a Personal Communications System
incorporating PCS-sites and mobile switching centers (individually, an "MSC")
located in the States of Alabama, Georgia, Indiana, Kentucky, Louisiana,
Mississippi and Tennessee, in the United States of America. As used herein, the
term "Project" or PCS System" shall mean only those areas of the project
described above that are assigned to Contractor by Owner.
1.2 The Project will be described more particularly in the drawings, plans and
specifications to be prepared by Contractor or by other retained design
professionals (whose services will be procured as provided in this Agreement)
and approved by Owner under this Agreement.
2.0 CONTRACTOR'S SERVICES
2.1 Contractor will perform, or cause to be performed, the services
(hereinafter referred to as the "Services") generally described below which are
more fully described in Attachment A ("Scope of Services"), attached hereto and
made a part hereof, and the Services shall be performed by Contractor with
respect to such PCS-sites and MSC locations as are assigned by Owner to
Contractor. Contractor shall perform the Services in accordance with the
standard set forth in Paragraph 9.1, in compliance with all local, city,
county, state and federal laws, rules, regulations, statutes and ordinances now
in effect or hereafter enacted, and in compliance with Owner's instructions
issued from time to time (to the extent not inconsistent with the preceding
standards). Contractor shall use reasonable good faith efforts to minimize
turnover of Project personnel.
2.2 Contractor will provide the overall coordination and administration for the
Project as described in the Scope of Services, including, but not limited to:
2.2.1 providing a preliminary assessment of the Project budget taking into
account the activities contemplated for the Project;
1
<PAGE>
EXECUTION COPY
2.2.2 consulting with any design professionals and Owner concerning the Project
and development of Project plans, drawings and specifications;
2.2.3 providing recommendations on construction feasibility, actions designed
to minimize adverse effects of labor or material shortages, time requirements
for procurement, installation and construction completion, and factors related
to construction costs including estimates of alternate designs or materials;
and providing preliminary budgets and possible economies and budgets detailing
Contractor's anticipated man hours and expenses for the Project on a per
PCS-site and MSC basis;
2.2.4 preparing and periodically updating Project schedules for Owner's
approval, such schedules coordinated and integrated with all equipment,
services and activities provided by others in connection with the Project;
2.2.5 developing and recommending milestone completion dates for the Project;
2.2.6 recommending to Owner phases and timing of issuance of drawings and
specifications to facilitate phased construction of the work taking into
consideration such factors as economies, time of performance, availability of
labor and materials and provisions for temporary facilities;
2.2.7 providing contract administration services, including preparing Owner's
construction documents (such as bid packages and contracts) for the Project for
Owner's approval;
2.2.8 identifying and recommending possible contractors, including suppliers of
materials and equipment for approval and signing by Owner;
2.2.9 recommending to Owner a schedule of procurement for long-lead time items
which constitute part of the work as required to meet the Project schedules;
2.2.10 providing monthly (or such other interval as may be approved by Owner)
written reports to Owner on the progress of the Project to include problems
encountered or other similar relevant data as to all sites for the Project as
Owner may reasonably require;
2.2.11 developing systems of cost control for the Project, including regular
monitoring of actual costs for activities in progress and estimates for
uncompleted tasks and proposed changes;and
2.2.12 administering and coordinating Owner's design professionals, contractors
and suppliers and any other persons performing any work or supplying any
materials for the Project.
2.3 Contractor shall perform the Services as an agent of Owner. Regarding such
capacity as an agent of Owner, upon request Owner shall confirm to third
parties Contractor's authorization to so act for and on behalf of Owner.
2.4 Nothing in this Agreement is intended or shall be construed to constitute
Owner, or any of its employees, agents or contractors, as an employee, agent or
partner of Contractor, nor shall Owner, or any of its employees, agents or
contractors have, authority to bind Contractor in any respect except as may be
provided by written agreement.
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2.5 Contractor's employees, agents and subcontractors shall not be treated as
employees of Owner for any purpose including, but not limited to, federal or
state tax purposes. Contractor shall be solely responsible for the filing of
all tax returns required by law to be filed by Contractor relating to its
performance of the Services, and the payment of all contributions, payments and
taxes, required by law to be filed or paid by Contractor relating to the
performance of the Services by Contractor and its employees, agents and
subcontractors.
3.0 INFORMATION AND ITEMS TO BE FURNISHED BY OWNER
3.1 Owner shall furnish to Contractor in a timely manner available data and
other information to provide the basis upon which Contractor shall perform the
Services. Contractor warrants that it has sufficient data and other information
to commence performance of the Services on the effective date of this Agreement.
3.2 Upon receipt of documents, reports, plans or data from Contractor for
approval, Owner will promptly (and in any event within fifteen (15) days of
their receipt) either approve or disapprove, or furnish other written
instructions to Contractor with respect to said documents, reports, plans or
data. If Owner's written approval or disapproval or other written instruction is
not furnished to Contractor within such fifteen (15) day period, such documents,
reports, plans or data will be deemed to be approved.
3.3 Owner shall furnish sites for the Project and, subject to applicable advance
notice requirements existing in favor of any third parties, shall furnish to
Contractor and Owner's contractors unobstructed access to the sites and all
other locations involved in the performance of the Services.
3.4 Solely with respect to Owner's main Project office in Jackson and regional
Project offices covering areas assigned to Contractor, Owner shall furnish as
reasonably necessary for Contractor's performance of Services the following
items which shall be of substantially comparable kind and quality to those
furnished by Owner to its employees: office space; office equipment; computers;
phone systems; communications networks and connectivity to Contractor's support
offices; and office supplies. Upon the termination or expiration of this
Agreement, Contractor shall return such items to Owner undamaged (taking into
account normal wear and tear).
3.5 Owner and Contractor will establish the general terms and conditions,
including warranties, to be incorporated into all bid packages, contracts, and
purchase orders entered into by Owner for the Project. With respect to any
contracts with others relating to the Project and entered into after the
execution of this Agreement, Owner agrees that Contractor shall be designated as
Owner's agent and that all indemnity, all release and all hold harmless
agreements contained in such contracts and purchase orders whereby the
contractor or supplier agrees to indemnify, release or hold Owner harmless shall
be extended to protect Contractor.
3.6 Owner shall make direct commitments for all services, machinery, equipment,
materials and supplies required for incorporation into the Project or for use in
construction thereof and for the performance of all construction and other work,
and shall make payments directly for such
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commitments; provided that Contractor shall provide the accounting and
controller management services set forth in Attachment A.
3.7 Owner shall furnish or secure the information, items and approvals required
to be furnished or secured by it at such times and in such manner as may be
reasonably required for the expeditious and orderly performance of the Services
by Contractor.
4.0 NOTICE TO PROCEED AND TIME OF PERFORMANCE
4.1 Contractor shall commence the performance of its Services upon the
effective date of this Agreement, which date shall be deemed the date of Notice
to Proceed.
4.2 Subject to the termination provisions of Article 13.0 (Termination), the
term of this Agreement is two (2) years from the effective date of this
Agreement but may, subject to Article 7.0 (Changes and Extra Work), be extended
by mutual agreement of the parties.
5.0 COMPENSATION AND PAYMENT
5.1 For the performance of the Services, Owner agrees to pay Contractor, in the
manner and at the times specified, the Compensation consisting of Hourly Unit
Rate Payments and Other Direct Costs (jointly, "Compensation"), and make
available the amounts needed for Owner to pay the Owner Costs, as such terms are
defined in Attachment B, attached hereto and by this reference made a part
hereof
5.2 In addition, promptly after the effective date of this Agreement, Contractor
shall invoice Owner for any remaining amounts due for work performed by
Contractor under the Letter of Intent between Owner and Contractor dated August
10, 1998, as amended. Owner shall pay Contractor such invoiced amounts within
thirty (30) days after receipt of the invoice.
5.3 Any amounts due and remaining unpaid after the due date shall accrue
interest, commencing on the day after the due date and compounded for each day
thereafter until the date paid, at the rate equal to [CONFIDENTIAL TREATMENT
REQUESTED] above the prime lending rate quoted to substantial and responsible
commercial borrowers on ninety-day loans by the Morgan Guarantee Trust Company,
New York, on each day such interest accrues.
5.4 Any terms or conditions set forth on any invoice which are inconsistent with
or in addition to the terms and conditions set forth in this Agreement shall be
of no effect. Each invoice for Compensation shall include the following
information: first, in support of the Hourly Unit Rate Payments, the name and
position of Contractor's employees that have performed Services during the
period covered by the invoice, the number of hours worked by each such employee
during that same period, the Hourly Unit Rate applicable to each such employee
and the total amount payable to Contractor for Hourly Unit Rate Payments;
second, in support of the Other Direct Costs, the total amount owed for the
Other Direct Costs during the period covered by the invoice, a description of
the type of Other Direct Costs included in the invoice, a breakdown on a
market-by-market basis of where the Other Direct Costs were incurred, and
receipts to support any Other Direct Costs in excess of twenty-five dollars; and
third, in support of the Owner Costs, the relevant invoices of Owner's
contractors and suppliers.
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6.0 ACCOUNTING OF COSTS
6.1 Contractor shall maintain books and accounts of the time expended by its
personnel and of the Other Direct Costs in accordance with generally accepted
accounting principles and practices consistently applied. Owner, during
Contractor's normal business hours for the duration of this Agreement and for a
period of three (3) years after the completion of the Services, shall have
access to these books and accounts to the extent required to verify the hours
charged for which Hourly Unit Rate Payments were received and the Other Direct
Costs (excluding the development of established or standard allowances and
rates) incurred hereunder. A copy of all records relating to the payments made
out of the Owner's Zero Balance Operating Account shall be turned over to Owner
at the conclusion of the Project.
7.0 CHANGES AND EXTRA WORK
7.1 Owner may require or approve changes within the general scope of
Contractor's Services hereunder by a written Change Order, or may request extra
work to be mutually agreed upon.
7.2 In the event any such change causes an increase or decrease in the time for
performing Contractor's Services, the parties shall agree upon an equitable
adjustment of the schedule obligations to the extent they are affected by such
change. Contractor's staffing plan that is mutually agreed upon in accordance
with and for the purposes described in Paragraph I a of Attachment B and the
determination of the applicable Hourly Unit Rate Payments under that Paragraph
shall also be subject to an equitable adjustment to the extent affected by any
such scope change or by any changed circumstances outside of Contractor's
control, including Force Majeure events, changes in law, and Owner's delay in
performing its obligations hereunder.
7.3 Owner reserves the right to direct Contractor to reduce the number of
Contractor's personnel assigned to the Project at any time upon thirty (30)
days prior written notice to Contractor of such reduction. Further, Owner
reserves the right to reduce the number of PCS-sites and/or MSCs assigned to
Contractor at any time. Any such reductions shall be without penalty to Owner.
8.0 NOTICE AND ACCEPTANCE OF COMPLETION
8.1 Upon completion of Services in connection with a particular PCS-site or MSC,
Contractor may, and upon completion of the Services for the Project, Contractor
shall, notify Owner in writing of the date of said completion and request
confirmation thereof by Owner. Upon receipt of such notice, Owner shall confirm
to Contractor in writing that the Services referred to in such notice were
completed on the date indicated in such notice, or provide Contractor with a
written listing of the Services not completed.
8.2 If Owner does not respond to Contractor's initial notice of completion
within thirty (30) days, Contractor shall provide Owner with a second notice of
completion. Any Services included in Contractor's second notice to Owner and not
listed by Owner as incomplete in a listing delivered to Contractor within
fifteen (15) days of receipt of said second notice, shall be deemed complete and
accepted by Owner.
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8.3 With respect to Services listed by Owner as incomplete, Contractor shall
complete such Services and the above acceptance procedure shall be repeated.
8.4 In the event Owner does not respond to Contractor's second notice within
fifteen (15) days after receipt of any such second notice, the Services
included in such second notice shall be deemed complete and accepted by Owner.
9.0 RESPONSIBILITY OF CONTRACTOR
9.1 Contractor will perform its Services, with that degree of skill and
judgment that is normally exercised by recognized international professional
engineering, construction and construction management firms with respect to
services of a similar nature. Contractor shall reperform at its expense any
professional services which are (a) deficient because of Contractor's failure
to perform any such Services in accordance with the above standard, and (b)
reported in writing to Contractor within a reasonable time, not to exceed
thirty (30) days, after the discovery thereof, but in no event later than the
first to occur of (i) twenty-four (24) months after the completion and
acceptance of the applicable Services, and (ii) one (1) year after the assigned
PCS-site or MSC location to which the Services apply has been placed in
commercial service. Except as set forth above in this Paragraph 9.1,
Contractor's responsibility hereunder with respect to each individual PCS-site
and MSC location shall terminate upon the completion and acceptance of Services
with respect to such PCS-site or MSC location. The warranty set forth in this
Paragraph 9.1 is the sole and exclusive warranty of Contractor in connection
with the Services and Contractor hereby disclaims and Owner waives any other
express, implied or statutory warranties, including warranties of
merchantability or fitness for a particular purpose.
9.2 Owner acknowledges that the work required to complete the Project shall
require the involvement and assistance of other professionals and service
companies ("Independent Contractors") which shall include but not be limited to
architects, RF and civil engineers, site acquisition consultants, environmental
consultants, geotechnical firms, surveyors, graphic artists, and construction
crews. Contractor shall make reasonable efforts to locate and interview
Independent Contractors as agent for Owner. Privity of contract shall exist
only between Owner and the Independent Contractors with respect to the services
to be performed by the Independent Contractors pursuant to express written
agreements that are executed by Owner and such Independent Contractors. Owner
shall grant or deny approval of any Independent Contractor recommended by
Contractor and may terminate the services of an Independent Contractor for good
cause or otherwise upon appropriate notice to the Independent Contractor.
Contractor shall coordinate and manage the services of the Independent
Contractors as agent for Owner, subject to any limitations on Contractor's
authority mutually agreed by the parties . Owner shall be solely responsible
for the payment of invoices submitted by the Independent Contractors; provided
that Contractor shall provide the accounting and controller management services
set forth in Attachment A. Owner shall indemnify Contractor from any and all
claims, losses, costs or expenses associated with the services provided by the
Independent Contractors, except to the extent that the same arise from the
failure of Contractor to coordinate, monitor and manage the services of the
Independent Contractors or otherwise perform the Services as required by this
Agreement.
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9.3 In conjunction with meeting Contractor's obligations as set forth in
Attachment A hereto, Contractor shall be responsible for inspecting the work of
Independent Contractors and/or their subcontractors on the construction sites
from time to time or as directed by Owner to monitor compliance by such
Independent Contractors with their contractual responsibilities to Owner. With
regard to work quality and safety, Contractor's obligations are to report any
deficiencies or instances of noncompliance by such Independent Contractors to
Owner and to make recommendations on how to remedy such deficiencies or such
noncompliance, recognizing that Contractor is providing project management
services and that Owner will look to the Independent Contractors to remedy any
deficiencies in their work quality and for implementation of the safety
programs. With respect thereto, Contractor shall be responsible for inspecting
from time to time construction means, methods, techniques, sequences,
procedures, or safety precautions and programs implemented by such Independent
Contractors in connection with the Project in order to monitor compliance by
such Independent Contractors and/or their subcontractors with all construction
specifications and their related contractual obligations to Owner, including
compliance with federal, state, or local laws, regulations and codes as they
pertain to the actual construction work.
9.4 Except for any liabilities arising under the third-party indemnity set forth
in Paragraph 9.7, in no event shall Contractor's liability to Owner, however
caused, exceed in the cumulative aggregate an amount equal to $ 10,000,000 (Ten
Million Dollars), and Owner hereby releases Contractor from any liability in
excess thereof.
9.5 Owner's and Contractor's remedies specified in this Agreement are the sole
and exclusive remedies of either party for liabilities arising out of or in
connection with this Agreement.
9.6 Except for Contractor's obligations set forth in Paragraph 3.4, Contractor's
liability for loss of or damage to the Project or other property of Owner or in
the custody of Owner (including any leased property) shall be limited to those
payments made on Contractor's behalf by the insurers affording the insurance
described in Paragraph 10.2, and Owner hereby releases and agrees to indemnify
Contractor from any loss, damage or expense in excess of those payments.
9.7 Contractor agrees to indemnify, defend and hold harmless Owner and its
directors, officers, partners, agents and employees from and against any
third-party claims for personal injury to or death of persons and for loss of or
damage to third-party property (including reasonable attorneys' fees and
expenses) to the extent resulting from or arising out of the negligence or
willful misconduct of Contractor. Contractor shall not be required to indemnify
Owner for any act or omission of Contractor which is done at the express
direction of Owner, except to the extent that Contractor acts (or fails to act)
in a negligent manner in carrying out Owner's instructions.
9.8 In no event shall either party, it officers, agents or employees or its
subcontractors, or contractors or suppliers of any tier providing equipment,
materials or services for the Project be liable to the other party for
consequential loss or damage, including, but not limited to, loss of use, loss
of profit or loss of revenue, and each party hereby releases the other party,
its respective
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officers, agents, employees, subcontractors, contractors and suppliers from and
against such liability.
9.9 The releases from liability and limitations on liability expressed in this
Agreement shall apply even in the event of the fault, negligence in whole or in
part, strict liability, breach of contract or otherwise, of the party released
or whose liability is limited and shall extend to the subcontractors and
related entities of such party and its and their directors, officers and
employees.
10.0 INSURANCE
10.1 Contractor Insurance
Contractor has in force and will maintain during the performance of the
Services, the following insurance:
10.1.1 Workers' Compensation covering Contractor's employees, and Employers'
Liability Insurance as required by applicable law but in no event with a limit
of less than $ 1,000,000 per occurrence and in the aggregate .
10.1.2 Automobile Bodily Injury and Property Damage Liability Insurance
covering all owned, non-owned or hired by Contractor automobiles or automotive
equipment, with limits as follows:
Bodily Injury and Property Damage: $2,000,000 combined single
limit each occurrence
10.1.3 Comprehensive Crime coverage with limits of $10,000,000 per occurrence.
10.1.4 Owner, Airwave Communications, LLC and Digital PCS, LLC shall be named
as an additional insureds under the insurance required by Paragraph 10.1.2, and
Contractor shall furnish Owner a certificate evidencing each such policy of
insurance in Paragraph 10.1 which shall also include a waiver of subrogation in
favor of Owner, Airwave Communications, LLC and Digital PCS, LLC. Such policies
shall provide that written notice shall be given to Owner and each other
additional insured thirty (30) days prior to cancellation or material change of
any protection which said policies provide for Owner and each other additional
insured.
10.2 Owner's Project Insurance
Prior to commencement of Services at the Project sites, Owner shall take out,
carry and maintain, during the performance of the Services and for such
additional period as hereinafter specified, the following Project Insurance
covering Owner, Contractor and all contractors and subcontractors of every tier
as Named Insureds. Such insurance shall include a waiver of subrogation in
favor of all Named Insureds.
10.2.1 Third-Party Losses and Damages
Comprehensive Bodily and Personal Injury and Property Damage Liability
Insurance, including contractual Broad Form Property Damage Cover and completed
operations coverage, but
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excluding coverage for automobile liability and automobile physical damage
which should be insured by each contractor and subcontractor. The policy limit
will be a combined single limit for Personal Injury and Property Damage of not
less than $ 10,000,000 each occurrence, with a cross-liability or severability
of interest clause, and covering against liabilities arising out of or in any
way connected with the Project, including personal injury claims against any
insured by employees of any other insured. Such insurance shall state that it
is primary and that any other insurance carried by the Named Insureds shall be
specific excess and not contributing therewith. This insurance shall not
contain any exclusion which denies coverage because liability for injuries to
persons or damage to property arising out of the preparation of maps, plans,
designs, specifications, or the performance of inspection services or out of
any other Services to be performed by Contractor under this Agreement. This
insurance shall not cover bodily injury or disease to Contractor's employees
otherwise covered under the Workers' Compensation coverage required in
Paragraph 10.1.1. This insurance shall be maintained in force until three (3)
years after acceptance or termination of the Services.
10.2.2 Builder's Risk or Course of Construction Insurance
Builder's Risk or Course of Construction Insurance, insuring on an "All Risks"
basis with a limit of not less than the full insurable replacement cost of the
Project, subject to reasonable and customary deductible amounts as selected by
Owner, and covering the Project and all materials and equipment to be
incorporated therein, including property in transit, in storage or elsewhere.
Such insurance shall state that it is primary, shall include coverage for
physical damage resulting in any way from the Services, including physical loss
or damage resulting from design error, faulty workmanship or defective
materials, and shall include an insurer's waiver of subrogation or right of
recourse in favor of each Named Insured thereunder. Furthermore, such insurance
shall remain in effect until the entire Project is completed and accepted by
Owner.
10.3 Special Provisions
Owner shall furnish Contractor a certificate evidencing each such policy of
insurance or, upon Contractor's request, a copy of each policy of insurance
required by Paragraph 10.2. Such policies shall provide that written notice
shall be given to Contractor thirty (30) days prior to cancellation or material
change of any protection which said policies provide for Contractor.
10.4 Insurance by Others
In the event Owner elects to cause any of the insurance described in Paragraph
10.2 to be carried by a party other than Owner or Contractor, Owner hereby
agrees to cause such other party to arrange the insurance as herein provided.
11.0 OWNERSHIP OF PLANS, TITLE TO WORK AND CONFIDENTIAL INFORMATION
11.1 All drawings, plans, specifications, findings and reports, developed by
Contractor under this Agreement shall become the exclusive property of Owner for
unrestricted use by Owner. All such drawings, plans and specifications shall at
Owner's request be delivered to Owner upon completion of such Services, but
Contractor may retain and use copies thereof and the
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information contained therein for internal purposes, and shall at all times
retain the copyright to its copyrightable work product, provided, however,
Contractor hereby grants Owner a perpetual license to use any such
copyrighted/copyrightable work product.
11.2 All portions of the Project completed or in the course of construction at
the job sites shall be the sole property of Owner, and the title to such
materials, equipment and supplies, the costs of which are Other Direct Costs,
shall pass immediately to and vest in Owner upon the happening of any event by
which title passes from the vendor or supplier thereof.
11.3 As used in this Agreement, "Confidential Information" means all
information of either party that is not generally known to the public, whether
of a technical, business or other nature (including, without limitation, trade
secrets, know-how and information relating to the technology, customers,
business plans, promotional and marketing activities, finances and other
business affairs of such party), that is disclosed by one party (the
"Disclosing Party") to the other party (the "Receiving Party") and that is
marked or otherwise designated in writing as confidential. Confidential
Information may be contained in tangible materials, such as drawings, models,
data, specifications, reports, compilations and computer programs, or may be in
the nature of unwritten knowledge. In addition, Confidential Information
includes all information that the nondisclosing party may obtain by
walk-through examination of the Disclosing Party's premises, or concerning the
existence, progress and contents of the discussions between the parties to the
extent the disclosure of such information to unauthorized third persons could
reasonably be expected to materially adversely affect the Owner's interests.
For purposes of this Agreement but without limiting the scope of the definition
of Confidential Information, the number, location, configuration and status of
all proposed sites in the PCS System and any associated financial information,
as well as the timetable and operational status of the PCS System itself, shall
be deemed to be Confidential Information of Owner.
11.4 The Receiving Party, except as expressly provided in this Agreement, shall
not disclose Confidential Information to anyone without the Disclosing Party's
prior written consent. The Receiving Party may disclose Confidential
Information to third parties providing services or goods in connection with the
Project to the extent necessary for such third party to perform its work. The
Receiving Party will not use, or permit others to use, Confidential Information
for any purpose other than performing their obligations under this Agreement
or, if to a third party performing work in connection with the Project, then
under such third party's Project agreement. The Receiving Party will take all
reasonable measures to avoid disclosure, dissemination or unauthorized use of
Confidential Information, including at a minimum those measures it takes to
protect its own Confidential Information of a similar nature.
11.5 The provisions of Paragraph 11.4 will not apply to any information that
(i) is or becomes publicly available without breach of this Agreement; (ii) can
be shown by documentation to have been known to the Receiving Party at the time
of its receipt from the Disclosing Party, (iii) can be shown by documentation
to have been independently developed by the Receiving Party without reference
to any Confidential Information, or (iv) was received by the Receiving Party
from a third party either not subject to a confidentiality obligation or not
otherwise prohibited from transmitting the information to the Receiving Party.
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11.6 The Receiving Party shall restrict the possession, knowledge, development
and use of Confidential Information to its employees, agents, subcontractors
and entities controlled by it or under common control with it (collectively,
"Personnel") who have a need to know such Confidential Information in
connection with the purposes set forth in this Agreement. The Receiving Party's
Personnel shall have access only to the Confidential Information they need for
such purposes. The Receiving Party shall ensure that its Personnel comply with
this Agreement.
11.7 If the Receiving Party becomes legally obligated to disclose Confidential
Information by any governmental entity with jurisdiction over it, the Receiving
Party shall give the Disclosing Party prompt written notice sufficient to allow
the Disclosing Party to seek a protective order or other appropriate remedy.
The Receiving Party shall disclose only such information as is legally required
and will use its reasonable best efforts to obtain confidential treatment for
any Confidential Information that is so disclosed.
11.8 All Confidential Information shall remain the exclusive property of the
Disclosing Party, and the Receiving Party shall have no rights, by license or
otherwise, to use the Confidential Information except as expressly provided
herein.
11.9 The Receiving Party acknowledges (1) that the use, misappropriation or
disclosure of the Confidential Information in a manner inconsistent with this
Article 11.0 would cause irreparable injury to the Disclosing Party, (ii) that
all such Confidential Information is the property of the Disclosing Party and
(iii) that it is essential to the protection of the Disclosing Party's goodwill
and to the maintenance of the Disclosing Party's competitive position that the
Confidential Information be kept secret and that the Confidential Information
not be disclosed by the Receiving Party to others or used by the Receiving
Party to the Receiving Party's own advantage or the advantage of others, except
as permitted herein. The Receiving Party further acknowledges that the
Receiving Party's agreement to the provisions of this. Article 11.0 and the
enforceability of such provisions against the Receiving Party are an essential
element of this Agreement and that, absent such provisions and the
enforceability thereof, the Disclosing Party would neither (a) enter into this
Agreement nor (b) permit the Receiving Party access to and use of Confidential
Information.
11.10 Each party acknowledges that the provisions of this Article 11.0 of this
Agreement are material to the other party, that the other party would not have
entered into this Agreement if it did not include Article 11.0, and that the
damages sustained by the other party as a result of a breach of this Article
cannot be adequately remedied by damages at law. Each party therefore agrees
that the other party, notwithstanding any other provision of this Agreement and
in addition to any other remedy it may have at law, shall be entitled to
injunctive and any other equitable relief to prevent or curtail any breach of
this Article.
11.11 The provisions of this Article 11.0 shall survive expiration or
termination of this Agreement and shall remain binding for a period of three
years from the termination or expiration of this Agreement.
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12.0 FORCE MAJEURE
12.1 Neither party hereto shall be considered in default in the performance of
its obligations hereunder to the extent that the performance of any such
obligation, except the obligation for payment of money, is prevented or delayed
by any cause, existing or future, which is beyond the reasonable control of the
affected party, or by a strike, lockout or other labor difficulty, the
settlement of which shall be within the sole discretion of the party involved
(individually or in the aggregate, a "Force Majeure").
12.2 Each party hereto shall give notice promptly to the other of the nature
and extent of any Force Majeure claimed to delay, hinder or prevent performance
of the Services under this Agreement. In the event either party is prevented or
delayed in the performance of its obligations by reason of such Force Majeure,
the parties shall meet and agree upon an equitable adjustment of the schedule
obligations and other affected provisions of this Agreement.
13.0 TERMINATION
13.1 Owner may for its convenience terminate Contractor's Services at any time
by giving Contractor thirty (30) days prior written notice of such termination,
whereupon Contractor shall:
13.1.1 Stop the performance of Services terminated hereunder except as maybe
necessary to carry out such termination;
13.1.2 Terminate, to the extent possible and at Owner's request, outstanding
contracts, subcontracts or purchase orders relating to the Services terminated;
and
13.1.3 Take any other action toward termination of Services which Owner may
reasonably direct.
13.2 This Agreement may be terminated by either party hereto by written notice
to the other party at any time upon a material breach by the other party of any
of the provisions of this Agreement and the breaching party's failure to cure
such breach within thirty (30) days, or such longer period as the parties may
mutually agree to in writing, after its receipt of written notice thereof from
the non-breaching party.
13.3 Should Owner elect to terminate this Agreement for cause under Paragraph
13.2, Contractor will be required to apprise replacement personnel of all
aspects of the Project for a period of thirty (30) days from the effective date
of the termination and shall promptly turn over all documentation prepared in
conjunction with or pertaining to the Project that is the property of Owner.
Should Owner elect to terminate this Agreement for convenience under Paragraph
13.1, Contractor will be required to apprise Owner's replacement personnel (and
not any personnel of a replacement contractor) of all aspects of the Project
for a period of thirty (30) days from the effective date of the termination and
shall promptly turnover all documentation prepared in conjunction with or
pertaining to the Project that is the property of Owner.
13.4 Upon termination or expiration of this Agreement, Contractor (or its
representatives) shall promptly submit to Owner an invoice covering all unbilled
Compensation and Other Direct Costs, if any, earned or incurred to the date of
termination or expiration together with an estimate
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of the Compensation and Other Direct Costs, if any, that would be chargeable to
Owner if any particular services for work then in progress were to be completed
by Contractor. Upon request by Owner (but not otherwise) Contractor shall
complete such work in progress, including any work required under Paragraph
13.3, as Owner shall designate, and this Agreement shall in such case be deemed
extended with respect to such work only until such work is completed and paid
for. Owner shall pay Contractor for any Services performed up to and including
the date of termination in accordance with Attachment B, including Hourly Unit
Rate Payments and Other Direct Costs reasonably incurred in carrying out the
termination and in performing the obligations set forth in Paragraph 13.1 and
13.3. Contractor shall use reasonable efforts to minimize the amounts payable
hereunder.
14.0 SUSPENSION OF SERVICES
14.1 Owner may suspend the performance of Contractor's Services hereunder in
whole or in part, at any time and from time to time upon thirty (30) days prior
written notice of such suspension. Thereafter, Contractor shall resume the full
performance of the Services when directed to do so by reasonable notice from
Owner.
14.2 In the event of suspension of the performance of the Services at Owner's
request, Contractor shall be entitled to Hourly Unit Rate Payments for Services
performed to carry out the suspension and in reactivating the Services after
the suspension and for Bechtel personnel that Owner requests Contractor to
maintain on standby for the Project. In addition, Contractor shall be entitled
to reimbursement for Other Direct Costs reasonably incurred by Contractor in
suspending the Services and during the period of suspension , and in
reactivating the Services after the end of the suspension period to the extent
that such additional costs are incurred. Owner shall specify in its suspension
notice the anticipated duration of such suspension and its instructions
concerning Contractor's maintaining personnel on standby for the Project. If
Owner does not request personnel to remain on standby, Contractor may reassign
personnel as a result of any suspension of Services hereunder. Contractor will
use reasonable efforts to minimize the amounts payable hereunder. In addition,
Contractor shall be entitled to an equitable adjustment of the schedule
obligations upon any suspension.
14.3 In the event any suspension of the Services exceeds a reasonable time (not
to exceed sixty (60) days in the aggregate), Contractor may terminate its
obligation to perform the Services, without thereby being in default and
without prejudice to any of its rights or remedies under this Agreement, by so
notifying Owner in writing, and any such termination shall be treated as if
Owner terminated for convenience under Article 13.0.
14.4 Contractor may suspend or terminate for cause its obligation to perform
the Services if Owner fails to honor any of the payment provisions for two (2)
successive months. In the event of a suspension under this Paragraph 14.4, the
provisions of Article 14.0 shall apply as if it were an Owner suspension.
15.0 NOTICES
15.1 All notices or other communications hereunder shall be in writing and
shall be given (and shall be deemed to have been duly given upon receipt) by
delivery in person, by facsimile
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transmission, or by registered or certified mail (return receipt requested),
postage prepaid, addressed as follows (or to such other address for a party as
shall be specified by like notice; provided that notice of a change of address
shall be effective only upon receipt thereof):
To Owner:
1410 Livingston Lane
Jackson, MS 39213-8003
Attn: Mr. David Walsh
Fax: (601) 362-2664
With a copy to:
1410 Livingston Lane
Jackson, MS 39213-8003
Attn: Mr. Jerry M. Sullivan, Jr.
Fax: (601) 362-2664
To Contractor:
112B East State Street
Ridgeland, MS 39517
Attn: Mr. Russ Glass
Fax: (601) 898-6259
With a copy to:
3000 Post Oak Boulevard
Houston, TX 77056-6503
Attn: Mr. Lester Hurst
Fax: (713) 965-9914
16.0 REPRESENTATIVE OF THE PARTIES
16.1 Contractor and Owner each hereby appoint the representative designated
below who will be authorized and empowered to act for, and on behalf of, each
on matters within the terms of this Agreement:
Owner's Representative: David Walsh
Contractor's Representative: Russ Glass
This appointment will remain in full force and effect until written notice of
substitution is delivered to the other party.
17.0 TRANSFER OF OWNERSHIP
17.1 Owner represents either that it is the sole Owner of the Project or that
it is authorized to bind and does bind all owners of the Project to the
releases and limitations of liability set forth in this Agreement. Owner may
request Contractor to perform any portion of the Services for the benefit of an
affiliate or subsidiary and in such case, Contractor shall perform the Services
for the benefit of such related entity and Owner shall obtain such related
entity's agreement in writing to be bound by such releases and limitations of
liability such that the total aggregate
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liability of Contractor to Owner and such related entities shall not exceed the
limits of liability set forth in this Agreement.
17.2 Owner agrees that it shall obtain from any direct transferee of Owner's
interest in the Project such transferee's agreement in writing that it will be
bound by such releases and limitations of liability such that the total
aggregate liability of Contractor to Owner and such transferees shall not
exceed the limits of liability set forth in this Agreement.
18.0 ASSIGNMENT AND SUBCONTRACTS
18.1 This Agreement shall not be assigned by either party without the prior
written approval of the other, which approval shall not be unreasonably
withheld. In the event Owner sells its assets in conjunction with an assignment
of Owner's Federal Communication Commission licenses for the PCS System or any
subpart thereof, then Owner may assign the warranty in this Agreement to the
buyer without Contractor's approval.
18.2 Except as set forth below in this Paragraph 18.2, Contractor may not
subcontract its Services or any portion thereof without the prior written
approval of the Owner. Contractor may subcontract portions of the Services to
entities controlled by it or under common control with it without the prior
written approval of Owner. Contractor hereby guarantees to Owner that such
entities will comply with the responsibilities and liabilities herein assumed
by Contractor, and Owner may hold Contractor responsible for any failure to so
comply. Contractor agrees that Owner will incur no duplication of costs or
increased taxes resulting from any such subcontract and shall indemnify and
hold Owner harmless from any such costs or taxes. Owner agrees that the
limitations on Contractor's liability set forth in this Agreement constitute
the aggregate limit of liability of Contractor and its related entities under
this Agreement.
19.0 FAIR OPERATION OF AGREEMENT
19.1 In entering into this Agreement, Owner and Contractor recognize that it is
impracticable to make provision for every contingency which may arise during
the life of this Agreement. Owner and Contractor concur in the principle that
this Agreement shall operate between them with fairness and if, in the course
of the performance of this Agreement, an infringement of this principle is
anticipated or disclosed, then Owner and Contractor shall promptly consult
together in good faith in an endeavor to agree upon such action as may be
necessary to remove the cause or causes of such infringement.
20.0 DISPUTE RESOLUTION
20.1 Each party agrees to attempt in good faith to resolve any controversy,
claims, or dispute arising out of or relating to the Agreement or breach
thereof (hereinafter collectively referred to as "Dispute") promptly by
negotiation between representatives of the parties who have authority to settle
the Dispute.
The disputing party shall give the other party a written "Notice of Dispute."
The parties shall determine the procedures for the negotiation after the Notice
of Dispute is received. If a Dispute has not been resolved within thirty (30)
days after the applicable Notice of Dispute is delivered, either party may
pursue its rights under Paragraphs 20.2 and 20.3 below.
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20.2 With the exception of any claim under Article 11.0, any Dispute which has
not been resolved in accordance with Paragraph 20.1 above shall be decided by
arbitration in accordance with the Commercial Rules of Arbitration of the
American Arbitration Association then in effect unless the parties mutually
agree otherwise. This Agreement to arbitrate shall be specifically enforceable
under the prevailing arbitration law or the Federal Arbitration Act. The
parties agree that the site of any arbitration shall be Jackson, Mississippi;
provided that any and all arbitrators will come from neutral locations mutually
agreeable to the parties.
20.3 Any award rendered by the arbitrator(s) shall be final and judgment may be
entered upon it in accordance with applicable law in any court having
jurisdiction thereof.
20.4 Unless otherwise agreed in writing, during any such Dispute Contractor
shall perform the Services and maintain the schedule required by this
Agreement, and Owner shall continue to make payments in accordance with this
Agreement.
21.0 APPLICABLE LAW
21.1 This Agreement shall be construed and interpreted in accordance with the
internal laws of the State of Mississippi without giving effect to the
conflicts of law principles thereof.
22.0 SUCCESSORS AND ASSIGNS
22.1 Except with respect to any indemnities or releases from or limitations of
liability that expressly cover other parties, this Agreement is binding upon
and is solely for the benefit of the parties hereto and their respective
permitted successors, legal representatives and permitted assigns.
23.0 SEVERABILITY
23.1 In the event that any of the provisions, or portions or applications
thereof, of this Agreement are held to be unenforceable or invalid by any court
of competent jurisdiction or arbitrator, as applicable, Owner and Contractor
shall negotiate in good faith an equitable adjustment in the provisions of this
Agreement with a view toward effecting the original purpose of this Agreement
as closely as possible, and the validity and enforceability of the remaining
provisions or portions or applications thereof shall not be affected thereby.
24.0 GENERAL PROVISIONS
24.1 Any Services (other than those performed under the Amendment to the Letter
of Intent between the parties dated as of September 30, 1998) provided for
herein which were performed by Contractor prior to the effective date of this
Agreement shall be deemed to have been performed under this Agreement. This
Paragraph 24.1 is not intended to modify the compensation provisions applicable
to the Services performed under the Letter of Intent between the parties dated
as of August 10, 1998, as amended.
24.2 No delay or failure on the part of any Party hereto in exercising any
right, power or privilege under this Agreement or under any other documents
furnished in connection with or pursuant to this Agreement shall impair any
such right, power or privilege or be construed as a
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waiver of any default or any acquiescence therein. No single or partial
exercise of any such right, power or privilege shall preclude the further
exercise of such right, power or privilege, or the exercise of any other right,
power or privilege under this Agreement. No waiver shall be valid against any
party hereto unless made in writing and signed by the party against whom
enforcement of such waiver is sought and then only to the extent expressly
specified therein.
24.3 Each party to this Agreement represents and warrants to the other party to
this Agreement that neither the execution and delivery of this Agreement nor
the carrying out of any of the transactions contemplated herein will in any
respect result in any violation of or be in conflict with any term or provision
of any agreement, document or instrument to which the representing party is a
party or by which it is bound. Each party to this Agreement further represents
and warrants to the other party to this Agreement that this Agreement has been
duly executed and delivered on behalf of the representing party and constitutes
a valid and binding obligation of the representing party, enforceable in
accordance with its terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors' rights and as may
be limited by the exercise of judicial discretion and the application of
principles of equity including, without limitation, requirements of good faith,
fair dealing, conscionability and materiality (regardless of whether this
Agreement is considered in a proceeding in equity or at law).
24.4 To the fullest extent permitted by law, neither party shall be liable to
the other for exemplary or punitive damages.
24.5 This Agreement, together with all agreements, attachments, exhibits and
instruments referred to herein, constitutes the entire agreement between the
parties hereto relating to the subject matter hereof, and supersedes any
previous agreements or understandings and may be modified only in writing
signed by the parties with the same formalities as this Agreement.
24.6 The singular and plural and any gender shall include the other.
24.7 The headings and captions and any index or table of contents in this
Agreement are for convenience only and shall not be considered a part of or
affect the construction or interpretation of any provision of this Agreement.
24.8 This Agreement may be executed in two or more counterparts, each of which
shall be deemed to be an original, but all of which together shall constitute
one and the same instrument.
25.0 DISCLOSURE
25.1 Contractor shall inform Owner of rebates or discounts, if any, offered by
any services or materials suppliers to Contractor as a result of Contractor's
purchasing activities as agent for Owner hereunder and shall pass on to Owner
any such rebates or discounts.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective
as of the day and year first herein above written.
TRITEL COMMUNICATIONS, INC. TRITEL FINANCE, INC.
By: By:
--------------------------- --------------------------------
Name: Jerry M. Sullivan, Jr. Name: Jerry M. Sullivan, Jr.
------------------------ -------------------------------
Title: Exec. VP/Chief Operating Officer Title: Exec. VP/Chief Operating Officer
--------------------------------- --------------------------------
BECHTEL CORPORATION
By:
----------------------
- -
Name: L.W. Hurst
--------------------
Title: Vice President/General Manager
--------------------------------
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ATTACHMENT A
SCOPE OF SERVICES
Contractor will plan, coordinate and manage the assigned work required for the
deployment of Owner's PCS System of PCS-sites and MSC locations for the BTAs
listed at the end of this attachment. Contractor will provide project and
construction management services, including coordination for RF engineering,
site acquisition, site engineering and design, construction, equipment and
material suppliers and other contractors of Owner involved in the
implementation effort and including the services described in this Attachment A.
PROGRAM OFFICE
Contractor will establish an "umbrella" organization to provide overall
management of the Project. This organization will be located in Owner's office
in Jackson and will provide project and construction management functions for
the Project. There will be a single Project Manager who will serve as the
single point of contact for Owner for all issues on the Project. All of the
Contractor personnel on the Project will report to the Project Manager.
The Project office will also include other Contractor management personnel
necessary to perform the Services for the Project.
Contractor will develop a Project Execution Plan and Quality Plan for Owner's
approval, establish standards for all Project functions, develop Project level
schedules and budgets and monitor and report on total Project progress.
Contractor will also establish engineering standards and criteria, including
standardized site arrangements and details and will produce a work process flow
chart that shows the responsibilities and interfaces for the design and
construction of a typical PCS-site and for assigned MSC locations.
REGIONAL PROJECT MANAGEMENT TEAMS
Since the construction of the PCS System will be spread across seven states,
five Regional Offices will be established to effectively manage the network
implementation. Preliminary locations for the Regional Offices are:
o Jackson, MS - managing the state of Mississippi, except for the Gulf
Coast
o Birmingham, AL - managing the state of Alabama, except for the Gulf
Coast
o Knoxville, TN - managing the Knoxville, Chattanooga and Cleveland BTAs
in Tennessee and the Dalton and Rome BTAs in Georgia
o Nashville, TN - managing the Nashville, Cookeville and Clarksville
BTAs in Tennessee and the Hopkinsville, Madisonville and Bowling Green
BTAs in Kentucky
o Louisville, KY - managing the Louisville, Lexington, Corbin and
Owensboro BTAs in Kentucky
A regional operations management team will be located in each Regional Office
to provide support for site acquisition, site engineering, permitting,
procurement, construction, testing and turnover of PCS-sites and MSC locations
in the region.
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The Contractor team will work with Owner's regional manager and function as
Owner's representatives in the region, will coordinate RF engineering with
other functions, will manage site acquisition, permitting, procurement,
construction, schedule and budget progress and performance, and will manage
Owner contracts, testing and turnover.
PROJECT COST AND SCHEDULE CONTROLS
As overall Project manager, Contractor will assist with the development of
project budgets and define the format and frequency for reporting schedule
progress and performance against budgets, as appropriate. Contractor will
provide annual budgets for its Services revised on a quarterly basis at least
thirty (30) days prior to beginning of each quarter during the term of this
Agreement. Owner's contracts will require that all Project participants (major
equipment vendor, RF engineers, site acquisition contractors) will provide
information to Contractor as specified, for incorporation into Project status
reports.
Schedule progress will be monitored using a hierarchical series of schedules of
varying levels of detail.
The schedule called the Project Milestone Summary Schedule will reflect target
dates for all Regions, and will provide schedule status for the total Project.
The schedules called the Regional Milestone Summary Schedules will be the basis
for monitoring schedule status in each of the Regions, and will depict progress
against critical path milestone activities.
The database called the Project Critical Events database will track progress on
each PCS-site (or candidate site) and MSC location for each Region. This
database will be supported by all Project participants and will be used by
Contractor to generate summary level critical/action items reporting for the
Project.
Owner will ensure that the following are obtained and made available to
Contractor for performance of the Services:
Inputs/Information Required
From Site Acquisition Contractor(s)
o Detailed information on each site or candidate site
o Progress reporting on all data base elements in SAC responsibility on a
weekly basis, with exception reporting daily for critical/problem items.
From RF Engineer(s)
o Detailed information on RF design plan for each Region or sub-network,
identifying critical items and restraints
o Progress reporting on all RF data base elements on a weekly basis, with
exception reporting daily for critical/problem activities.
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From Major Equipment Vendor
o Detailed information on BTS with demarcation points identified and switch
equipment design and delivery schedule for each Region, including
installation and test duration and restraints.
o Progress reporting for all major equipment vendor responsibilities on a
weekly basis, with exception reporting daily for critical/problem
activities.
As the job evolves, additions, deletions and changes to Project scope will be
identified and submitted to Owner for review and approval. As scope changes are
approved, they will be incorporated into the budget to provide a current
assessment of the total Project cost.
Standard reports will be issued on a regular basis to keep Owner informed on
key and/or critical issues regarding the status of the Project.
As required by Paragraph 2.2.10, a report called the Project Progress Report
will be prepared monthly by the Jackson Project Office which will summarize
activity in all Regions. This report will include narrative summaries of the RF
engineering, site acquisition, facility design, construction management and
spectrum clearing activities. It will also provide schedule performance
calculations, percent complete assessment, action items list and the list of
pending scope changes.
Inputs/Information Required
From All Project Participants
o Narrative description of activities ongoing for the month in each of the
Regions. Highlight key accomplishments and critical problem areas.
o Listing and description of any outstanding scope changes including their
effect on cost and schedule.
CONTRACT ADMINISTRATION
Contractor will interpret and maintain Owner's contracts for site design and
construction, as agent for Owner. Contractor will also:
o Provide control of contractor proposals and processing
o Manage the award process for released PCS sites and MSC locations
o Monitor contractors' overall compliance with contract terms and Project
established procedures, and report any instances of noncompliance to Owner
o Manage the contract changes/disputes and claims process Manage the Project
backcharge process
o Provide quality surveillance of contractors' work
o Ensure final inspection items are completed
o Perform contract close-out functions with all contractors and provide
completed turnover package to Owner for all contracts
ACCOUNTING/CONTROLLER MANAGEMENT
Contractor will perform the following activities:
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o Review all invoices for conformance to contract/purchase order, terms and
receiving documents and submit to Owner for approval
o Perform the accounts payable function as Owner's agent by writing all
checks on Owner's check stock for Owner-approved invoices and providing
monthly reconciliation for funds expended for materials, contracts and
subcontracts in accordance with Attachment B
o Provide detailed tax and property asset reporting for all expenses handled
by Contractor accounting
o Perform tracking and statusing of all invoices from the time they are
received, through the review and approval cycle to payment and close-out
of the bill
o Code invoices with accounting and physical location codes to meet Owner's
requirements
o Provide information required for electronic interfaces to Owner's
accounting and management systems.
PROCUREMENT AND MATERIALS MANAGEMENT
Contractor will, as Owner's agent, assist Owner in procuring equipment,
materials and services required for the construction of the PCS-sites and MSC
locations, excluding the radio equipment and switches provided by major
equipment vendor under contract to Owner. All purchase orders and contracts
will be issued by Owner with Contractor acting as agent. Subject to the
requirement set forth in Paragraph 17.1, Owner may request Contractor to
perform these procurement and materials management services in the name of an
affiliate or subsidiary of Owner.
Procurement activities will include receipt of the specification and/or
material requisition; supplier bidding and selection; formation and negotiation
of Owner contracts and purchase orders; expediting and supplier surveillance;
and coordination and management of delivery of materials to installation
contractors, PCS-sites or MSC locations as required.
A Project Procurement Manager ("PPM") will be assigned to the Project Office in
Jackson to plan, organize, staff and manage procurement activities. The PPM
will assist the Owner in developing a procurement plan for third-party
materials which is consistent with the Regional Milestone Schedules.
Each Regional Office will have a Procurement/Materials Manager assigned to
perform the following functions:
o Solicit proposals for A/E and construction contractors and award contracts
for administration in the local markets.
o Obtain material requirements and required delivery dates for approved
sites and forward to Project office for ordering.
o Coordinate with local contractors to confirm delivery of third-party
material.
o Prepare or obtain material receiving reports for third party material to
allow for payment processing
o Assist in the site material reconciliation process, as necessary, to
develop material records, cost reports, etc. for turnover packages, etc.
o Monitor contractors' control of customer-furnished material for
inventory-tracking purposes.
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Material releases to Owner contractors will be coordinated utilizing
Contractor's automated PTS.
Contractor will establish Owner agreements with vendors to ship material for
each site to Owner's contractor responsible for construction. Material will be
shipped on a "just in time" basis to meet the scheduled construction start
dates. Owner's contractor will receive and store all Owner-furnished material
for their respective PCS-sites and MSC locations.
Each Region will maintain a small stock of items to be used in case of lost or
damaged parts; i.e. connectors, jumpers, antennas, etc.
ENGINEERING MANAGEMENT
The Contractor will assist Owner with its development of engineering standards,
technical specifications, and design criteria utilizing information and data as
provided by the Owner, RF engineering, site acquisition and BTS and MSC
equipment suppliers. Contractor will maintain and update these standards as
required and will manage and control the distribution and use of these
documents. These documents will be provided to all local A/E firms for use in
design of the PCS sites and MSC locations in order to standardize PCS sites and
MSC locations and maintain quality throughout the BTAs.
The Contractor will provide engineering support to the Owner to identify
qualified local A/E firms and to establish contracts with a number of firms in
each of the regional areas. Contractor will manage the firms employed by Owner
to provide geotechnical reports and other required studies or analysis.
Contractor will manage the A/E firms engaged to prepare the zoning, permitting,
and construction documents to monitor compliance with the project design
criteria, local codes and standards and Owner requirements.
CONSTRUCTION MANAGEMENT
Contractor will provide construction management services for the construction
of all assigned PCS-sites and MSC locations in the Owner PCS network.
Contractor will assist Owner in identitfying qualified, local contractors in
each of the Regions to perform the construction activities. Contractor will
coordinate and inspect contractor work activities for quality and to maintain
control of the Project schedule.
Contractor will perform a constructability analysis for each MSC location and
each primary PCS-site candidate as part of the overall site assessment effort.
Contractor will manage all civil, electrical and mechanical construction
performed by Owner's contractors to make the site ready for installation of the
BTS or MSC equipment and will conduct site visits to verify compliance with the
contract requirements. Major equipment vendor will be responsible for
installation of the BTS and MSC equipment, under contract with Owner.
Contractor will coordinate with major equipment vendor to verify demarcation
points and schedule the installation and testing activities to meet the
milestone dates on the Project schedule.
Contractor will develop pro forma contracts and scope descriptions for
construction of the PCSsites and MSC locations. When a sufficient number of
PCS-sites have been released for
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construction in a Region (target is 300%), Contractor will notify the
appropriate contractors to begin construction.
Contractor will prepare a Project Safety Plan for Owner's review and approval.
Owner's contractors in each and every Region will be required by contract to
implement a safety program consistent with the work performed and in
conformance with Owner's Project Safety Plan.
PCS-SITE AND MSC LOCATION TURNOVER
The Regional Document Control Center will collect and maintain PCS-site and MSC
location records prior to turnover. Document Control will process records
according to applicable Project procedures, prepare transmittal documents and
obtain appropriate signatures for records turnover to Owner.
Some PCS-site and MSC location records will be turned over progressively, upon
approval and issuance of the documents. Other records will be turned over as a
part of the PCS-site turnover package.
Completion of initial and final inspection by Owner, completion of all
punchlist items, and turnover of all required documents to Owner will be
documented via a letter. Owner will acknowledge receipt and acceptance and will
return the acknowledgment to the Contractor Regional Operations Manager.
The Regional Operations Manager will be responsible for processing and
implementing the PCSSite and MSC Location Turnover Procedure. Owner will be
responsible for receiving turned-over records, verifying transmittals and
returning acknowledgment receipts to the Regional Operations Manager.
The following documents are to be turned over to Owner as the PCS-site or MSC
turnover package. The Contractor Regional Operations Manager, or designee, will
manage document compliance.
o Site License/Lease Abstract (Summary)
o Copy of lease/purchase agreement
o Copy of easement agreements
o Site Option Report/photos, etc.
o Survey, Geotechnical and/or Tower Study
o Intermodulation study report (if required)
o Environmental Phase 1 Report
o Title report, if required, and title insurance policy
o Zoning documentation
o FAA consultant study and FAA approval
o FCC tower registration number - frequency band
o Site Completion Checklist
o Grounding Post-Test Results
o Special installation and Inspection Reports
o Sweep Test Results
o Concrete Cylinder Strength Test Reports
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o Photo Documentation
o Construction As-Built Drawings (Hard copy and disk)
o Vendor Drawings (foundations, poles towers)
o Design Calculations
o Third-Party Materials (type, quantity, cost)
o Final Construction Owner-contractor Cost
o Release of Lien
BTAs Included in Owner Network Implementation
MISSISSIPPI
BTA # 94 Columbus-Starkville
BTA # 175 Greenville-Greenwood
BTA # 186 Hattiesburg
BTA # 210 Jackson
BTA # 246 Laurel
BTA # 269 McComb-Brookhaven
BTA # 292 Meridian
BTA # 315 Natchez
BTA # 449 Tupelo-Corinth
BTA # 455 Vicksburg
ALABAMA
BTA # 17 Anniston
BTA # 44 Birmingham
BTA # 108 Decatur
BTA # 115 Dothan-Enterprise
BTA # 146 Florence
BTA # 158 Gadsden
BTA # 198 Huntsville
BTA # 305 Montgomery
BTA # 334 Opelika-Auburn
BTA # 415 Selma
BTA # 450 Tuscaloosa
KENTUCKY
BTA # 52 Bowling Green-Glasgow
BTA # 98 Corbin
BTA # 252 Lexington
BTA # 263 Louisville
BTA # 273 Madisonville
BTA # 338 Owensboro
TENNESSEE
BTA # 76 Chattanooga
BTA # 83 Clarksville, TN-Hopkinsville, KY
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BTA # 85 Cleveland
BTA # 96 Cookeville
BTA # 232 Knoxville
BTA # 314 Nashville
GEORGIA
BTA # 102 Dalton
BTA # 237 La Grange
BTA # 384 Rome
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ATTACHMENT B
COMPENSATION
[CONFIDENTIAL TREATMENT REQUESTED]
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ATTACEMENT C
DESCRIPTION OF CONTRACTOR POSITIONS
Project Manager
Team leader. Provides policy and procedures for the overall operation of the
Project team. Serves as the focal point for Owner interface with Contractor.
The Project Manager (PM) is the one person in the Contractor team accountable
to the customer for applying Contractor resources for project execution.
Assistant Project Manager/Business Manager
Responsible to the Project Manager for the staffing of the project control,
contract administration and accounting resources for the establishment of the
Project schedule, Project code of accounts, resource budget, accounts payable
and receivable systems, prime and other contract administration processes. The
Assistant Project Manager (APM) serves as the senior member of the Contractor
team in the absence of the PM.
Contracts/QA Manager
The Contracts/Quality Assurance Manager is responsible for contract formation,
administration and management; personnel management of employees performing
contracts functions; developing processes and procedures to effectively control
and manage contract required activities; establishing and maintaining the
Division of Responsibilities matrix and specific contract compliance
responsibility matrices; and monitoring Project performance for compliance with
contract terms and conditions. In addition to managing contracts, this manager
is also responsible for monitoring quality assurance. These responsibilities
include performing quality system audits and making all project participants
aware of the quality program that they are expected to implement.
Controls Manager
The Controls Manager (a.k.a. - Project Controls Manager/PCM) is responsible for
the preparation and maintenance of Project budgets and schedules. The PCM
defines and implements the procedures employed in the Project to establish
capital and non-capital cost budgets, to manage change, and to prepare and
maintain Project schedules. Additionally, the PCM provides direction for the
accounting function.
Engineering Manager
The Engineering Manager (PEM) is responsible for the PCS site architectural
and/or engineering (A/E) Services for the Project. The PEM will direct
Contractor project resources to manage the services provided to the Project by
local A/E firms. The PEM will monitor the A/E firms' compliance with quality
requirements and standard details for their engineering services of PCS site
facilities.
Operations Manager
Assures uniformity of operation throughout the Project. Travel throughout the
regions to train personnel for and monitor processes as developed for the
Project. Direct development of procedures and standards for the Project. All
Regional Operations Managers report to the Operations Manager for overall
Project coordination.
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Accounting Manager
The Accounting Manager (PAM) is responsible to the PCM for the establishment of
the Project accounting processes in accordance with the Generally Accepted
Accounting Practices and the Contractor Commercial Operations and Finance and
Accounting methods and procedures. The PAM operates the accounts payable and
accounts receivable services vital to the Project's operations.
Design Engineer Supervisor
The Design Engineer Supervisor (DES) is responsible to the PEM for providing
technical engineering management services to the Project team to prepare and
maintain cell site engineering standards and specifications applied to define
the services to be provided by local A/E firms and others.
Lead Field Coordinator
Responsible for interfacing with the contractors on day to day construction
activities, schedules, material coordination and quality issues. Coordinate the
construction schedules with all of the regional players, RF, site acquisition,
project controls, RE's, equipment suppliers, contract administrator, fixed
network designers, and Owner. Direct daily activities of the construction field
coordinators.
Coordinators
Manages and coordinates individual cell site construction. Prepares and
executes the individual cell site schedule and monitors the contractors to
assure they meet the schedule. Witness all milestone points during the site
construction (i.e., Concrete pours, Sweep testing, Ground testing, final tower
erection etc.). Final inspection of turnover package to assure completeness.
Procurement Manager
The Procurement Manager (PPM) is responsible to the PM for the establishment
and implementation of procurement process procedures and for material and
procurement tracking processes. The PPM is the person in the Project team
assigned to establish on Owner's behalf the material and services supply
purchase orders and contracts for the development of the project cell sites.
Records Manager
The Records Manager (PRM) is responsible to the PM for the identification and
implementation of Project administrative procedures and processes. The PRM will
manage the document control processes in the program office and the regional
offices to ensure consistent and effective control of the Project documentation
and communications.
Regional Operations Manager
Responsible for the overall Project and construction management as Tritel's
authorized agent for the region build out. Manages and coordinates the work
flow process through all phases of the build out (i.e., site acquisition, RF
design, construction, testing and turnover). Responsible for informing
contractors about, and monitoring contractors' compliance with, the Safety and
Health plan and the Quality plan implemented by these contractors. Accountable
to the Project Manager for management of the capital budget and project
schedule for the region.
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Contract Administrator
Within the authorization limitations specified by Owner, the Contract
Administrator is responsible for administration of all contracts; monitoring,
evaluating and negotiating changes, claims and disputes with contractors;
processing backcharges; managing the contractor invoice/payment process;
coordinating final acceptance process; and contract closeout and processing
warranty claims.
Resident Engineer
The Resident Engineer (RE) is the person responsible for the direct interface
with the project A/E firms. The RE provides oversight of the A/E firms,
reviewing the design/engineering products prepared by the firms for the project.
The RE coordinates the efforts of the A/E firms to ensure the site development
work proceeds in accordance with the Project schedule.
Safety Manager
Responsible for and informing contractors about, and monitoring contractors'
compliance with, the Project Safety and Health Plan implemented by these
contractors. Provide appropriate training throughout the Project regions. Visit
the regions on a regular visit to monitor compliance with the Safety Plan or
individual contractor's plans, if applicable.
Accountants
The Accountants assigned to the Project team are responsible to the PAM for the
processing of project accounting data. In particular, they shall be responsible
for the processing of invoices provided to the Project by its suppliers, and for
the preparation and issue of invoices for Contractor services for payment by
Owner. The accountants shall maintain the necessary accounting records to
provide timely deposit of funds to the ZBA and to provide accounting for the
disbursement of funds from the ZBA.
Cost/Schedule Engineer
The Cost/Schedule (C/S) Engineer is responsible to the PCM for implementation
of Project control procedures, providing monitoring and reporting of resource
expenditures as compared to Project budgets and, schedules. The C/S Engineer is
responsible for maintaining the Cell Site Status System (CS3) database for the
region.
Purchasing Specialist/Material Supervisor
The Purchasing Specialist/Material Supervisor is responsible to the PPM for the
implementation of blanket procurement actions, securing the necessary materials
and services for the development of Project cell sites. The Purchasing
Specialist/Material Supervisor is also responsible for the establishment and
maintenance of an inventory of construction spares in the regional office, to
be used to maintain construction schedules in the event of material shortages
at a site under construction.
Standards/Design Engineer
The Standards/Design Engineer is a resource employable from the Contractor
office in Gaithersburg, MD to provide and maintain Project design standards and
specifications to be used by the local A/E firms.
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Regional Document Control
The Regional Document Control is responsible for the establishment and
operation of the document and correspondence control processes employed in the
Regional offices to collect, categorize, file and maintain for turnover, the
necessary documentation defining the Project cell sites.
Accounts Payable Processor
The Accounts Payable Processor is a specialized accounting position responsible
for the processing of supplier invoices and maintaining and documenting the
disposition of supplier invoices.
Clerical Support
The position Clerical Support refers to clerk and secretarial services which
will be required by the Project to free the Project staff to perform the
technical tasks essential to the implementation of the Project. These positions
will be all local hires.
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ATTACHMENT D
STAFFING PLAN AND ESTIMATED ODCS
(See attached)
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EXECUTION COPY
ATTACHMENT D
STAFFING PLAN
[CONFIDENTIAL TREATMENT REQUIRED]
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EXECUTION COPY
ATTACHMENT D
ESTIMATED OCDS
[CONFIDENTIAL TREATMENT REQUIRED]
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MASTER BUILD TO SUIT AND LEASE AGREEMENT
THIS MASTER BUILD TO SUIT AND LEASE AGREEMENT ("Master Lease" or
"Agreement") is made and entered into by and between TRITEL COMMUNICATIONS,
INC., a Delaware corporation ("Carrier") and AMERICAN TOWER, L.P., a Delaware
limited partnership ("Tower Company").
WHEREAS, Carrier has licenses to provide personal communications
service ("PCS") in the states of Alabama, Florida, Mississippi, Tennessee,
Kentucky and any additional state or markets in which Carrier obtains a license
to provide PCS;
WHEREAS, Carrier requires that in certain instances towers and related
facilities be developed for the installation of antennas, equipment cabinets,
cabling and related equipment;
WHEREAS, Carrier also requires that parcels of real property together
with easements for ingress, egress and utilities to those properties be acquired
for the construction of the towers and related facilities;
WHEREAS, Carrier has acquired or leased parcels of real property for
the operations of a wireless or telecommunications facility;
WHEREAS, Carrier desires to assign to Tower Company certain of those
leases and for Tower Company to construct facilities on the sites;
WHEREAS, Carrier also desires for the Tower Company to lease or
purchase designated parcels of property when Carrier has not already leased such
properties to construct towers or structures for the operation of a wireless or
telecommunications facility;
WHEREAS, Carrier desires to lease space on the facilities from Tower
Company when the towers or structures are completed.
NOW THEREFORE, for [CONFIDENTIAL TREATMENT REQUESTED] and other good
and valuable consideration, the legal receipt and sufficiency of which is hereby
mutually acknowledged and agreed to, Carrier and Tower Company do hereby agree
as follows:
I. DEFINITIONS
1.1 DEFINED TERMS. In addition to the terms defined elsewhere in this Agreement,
the following terms shall have the following meaning (such meanings to be
applicable equally to the singular and plural forms of such terms) unless the
context otherwise requires:
"APPLICABLE TOWER SITE" shall mean a site where Carrier intends to place,
develop or construct a tower.
"ASSIGNMENT" shall mean the assignment of the Ground Lease from Carrier to Tower
Company.
"CARRIER" shall mean Tritel Communications, Inc.
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"CARRIER'S EQUIPMENT OR CARRIER EQUIPMENT" shall mean the equipment to be
located at the Site by Carrier which shall be described in each Site Lease
Agreement.
"CARRIER MARKET" shall mean each market in which Tritel does business and shall
be divided into and include each of the following markets and the term "Market"
shall mean one of the following:
o Knoxville market which encompasses the Knoxville BTA
o Chattanooga market which encompasses the Chattanooga BTA
o Nashville market which encompasses the Nashville BTAs
o Birmingham market which encompasses the Birmingham BTAs
o Huntsville Alabama market which encompasses the Huntsville BTAs
o Mississippi market which encompasses the Memphis and Jackson BTAs
o Kentucky market which encompasses the Louisville, Lexington and Evansville
BTAs
o Montgomery, Alabama market which encompasses the Montgomery and Decatur BTAs
o Any other market in which Carrier does business and is specifically
identified in a Schedule
"CARRIER SPECIFICATIONS" shall mean the specifications of Carrier necessary and
applicable to the Tower Facilities at any Applicable Tower Site for the
construction, installation, use and operation of Carrier's Equipment at such
Applicable Tower Site and for the construction and installation of the Tower
Facilities.
"COMMENCEMENT DATE" shall mean the date for each SLA as defined in Attachment V.
"EASEMENTS" shall mean any and all easements for access, ingress, egress or
utilities easements obtained or intended to be utilized for the Applicable Tower
Site.
"FAA" shall mean the Federal Aviation Administration.
"FCC" shall mean the Federal Communications Commission.
"GROUND LEASE" shall mean the lease, option or other contract between the owner
of the Property and Tower Company (or the Carrier who will assign the lease to
the Tower Company) for the property where the Tower Facilities will be located
"GROUND LESSOR" shall mean the owner of the fee simple interest or other
interest in the entire portion of Property where the Tower Facility is to be
located and the person who has entered into a ground lease with the Tower
Company (or the Carrier who will assign the lease to the Tower Company) for the
lease of the entire Property for the location of a Tower Facility upon the
Property.
"HAZARDOUS MATERIALS" shall mean any substance, chemical or waste identified as
hazardous, toxic or dangerous in any applicable federal, state or local law or
regulation including, without limitation, petroleum or hydrocarbon based fuels
such as diesel, propane or natural gas.
"MASTER LEASE" OR "AGREEMENT" shall mean this Master Build to Suit and Lease
Agreement.
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"MPE" shall mean Maximum Permissible Exposure.
"PCS" shall mean personal communications service.
"PLANS" shall mean plans for the construction of the Tower Facilities.
"PRE-DEVELOPMENT COSTS" shall mean the cost of developing the Site for the
location, construction and operation of a Tower Facility upon the Site and shall
include without limitation, the cost of the site acquisition services, phase 1
environmental assessments, geotechnical analyses, title reports, title opinions,
title commitments and title insurance, designs, Plans and Specifications,
construction plans, the cost incurred in obtaining grants of easements,
supplies, relevant travel expenses, fees or assessments imposed by local, state
or federal governmental entities, recording fees and filing fees, fees of
engineers, surveyors, architects, attorneys, brokerage commissions and others
providing professional services.
"PRE-DEVELOPMENT NOTICE" shall mean notice that Tower Company has delivered to
Carrier all of the Pre-Development Information for the Applicable Tower Site.
"PREMISES" shall mean the space occupied by Carrier's Equipment on each Tower
Facility, the ground space adjacent to the Tower Facility where Carrier's
Equipment is located, all cabling, conduit, wires and utilities running to and
from the Tower Facility and to and from Carrier's Equipment and the Easement.
"PROPERTY" OR "SITE" shall mean the entire portion of property where the
Applicable Tower Site will be located which property is being leased from Ground
Lessor.
"PUNCH LIST" shall mean a list of items that Carrier deems necessary that Tower
Company complete, fix, alter or correct in order for the Tower Facilities to be
completed in accordance with the Plans and Specifications.
"ISLA" shall mean a Site Lease Agreement between Tower Company and Carrier.
"SPECIFICATIONS" shall mean the specifications for the construction of the Tower
Facilities.
"TOWER COMPANY" shall mean American Tower, L.P., a Delaware limited partnership.
"TOWER FACILITY OR TOWER FACILITIES" shall mean the tower, foundations, and
related facilities including concrete foundations, footings and slabs and
fencing to be located upon the Applicable Tower Site.
II. GRANT OF RIGHTS; ASSIGNMENT AND
ASSUMPTION OF GROUND LEASES, AND SUBLEASING
2.1 (a) GRANT. Carrier grants Tower Company the non-exclusive right to develop,
construct and lease those sites in the Carrier Markets as defined above which
involve the construction of towers and related facilities ("Tower Sites") upon
the terms and conditions of this Master Lease. Tower Company acknowledges and
agrees that the right to develop, construct and
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lease the Tower Sites is not an exclusive right and that Carrier may grant
similar rights to other parties in other markets.
(b) APPLICATION.
(i) NOTICE. In the event that Carrier identifies a Tower Site or
search ring where it intends to place, develop and construct a tower, and
Carrier intends to grant to Tower Company the right to develop, construct and
lease such Tower Site, Carrier shall give Tower Company written notice of the
Applicable Tower Site.
(A) NOTICE OF SEARCH RING. In the event that Carrier has
issued a search ring for the Applicable Tower Site, but has not obtained a
lease, contract, option or other right to lease the property for the Applicable
Tower Site, Carrier shall notify Tower Company in writing of the parameters of
the search ring for the Applicable Tower Site (the "Search Ring Notice").
(B) NOTICE OF LEASE. In the event that Carrier has obtained
an option, lease, contract or other right to lease the property for the
Applicable Tower Site, Carrier shall notify Tower Company in writing of such
option, lease, contract or other right. Carrier shall immediately deliver to
Tower Company a complete copy of the lease, option, contract or other right to
lease the property for the Applicable Tower Site (the "Lease Notice").
(C) NOTICE OF BUILDING PERMIT. In the event that Carrier has
obtained a lease, contract, option or other right to lease property for an
Applicable Tower Site and is preparing to apply for a building permit for the
Applicable Tower Site, Carrier shall notify Tower Company in writing, at least
ten (10) days prior to the date that Carrier intends to make or actually makes
an application for a building permit for Applicable Tower Site (the "Building
Permit Notice") (the Search Ring Notice, the Lease Notice and the Building
Permit Notice shall be each be referred to as a "Notice of Applicable Tower
Site"). The Notice of Applicable Tower Site shall also be accompanied by the
Carrier Specifications for the Applicable Tower Site that is the subject of the
Notice of Applicable Tower Site.
(D) OBLIGATION TO GIVE NOTICE. Notwithstanding paragraphs
2.1(b)(i)(A), (B) and (C), Carrier shall not be obligated to provide the Tower
Company the Notice of Applicable Tower Site except in accordance with 2.1
(b)(i)(C), provided however, the Carrier may elect in lieu of providing Tower
Company Notice of the Applicable Tower Site pursuant to 2.1(b)(i)(C) above to
provide the Tower Company Notice of the Applicable Tower Site pursuant to either
2.1(b)(i)(A) or 2.1(b)(i)(B) above If Carrier provides Tower Company Notice of
the Applicable Tower Site pursuant to 2.1(b)(i)(A) above, then Tower Company
shall assist Carrier in locating a suitable Site within the of the parameters of
the search ring set forth in the Search Ring Notice and shall be responsible for
obtaining for Tower Company's own account and in Tower Company's own name a
lease, contract, option or other right to lease property for the Applicable
Tower Site
(ii) ACCEPTANCE OR REJECTION OF APPLICABLE TOWER SITE. Tower
Company shall have a period of fifteen (15) business days (the "Application
Period") from the date of the Notice of Applicable Tower Site to accept (in the
event of acceptance, the "Notice of
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Acceptance") or reject in writing any such Applicable Tower Site because of any
characteristics associated with the Applicable Tower Site which would in the
reasonable opinion of Tower Company adversely impact the development or
ownership by Tower Company of the Applicable Tower Site (including, without
limitation, objectionable ground lease provisions, defects in existing, or
inability to obtain proper, zoning or environmental contamination). In the event
that Tower Company does not accept or reject the Applicable Tower Site within
such fifteen (15) day period, Tower Company shall be deemed to have rejected
such Applicable Tower Site. In the event that Tower Company rejects or does not
accept any Applicable Tower Site, Tower Company shall have no right to require
an assignment of the Ground Lease (hereinafter defined) or obligation to develop
the Applicable Tower Site and Carrier shall have no further obligation to Tower
Company in regards to the Applicable Tower Site under the terms of this
Agreement.
(c) DUE DILIGENCE. During the (i) (A) Application Period; and (B)
in the event that the Tower Company provides the Carrier with a Notice of
Acceptance upon the applicable Tower Site, during the period between the
Application Period and the Commencement Date of the applicable SLA; and (C)
during the term of the applicable SLA, provided that Tower Company has assumed
the Ground Lease, if applicable, and entered into an SLA with Carrier: Carrier
shall make available to Tower Company such information as Tower Company may
reasonably require about the Applicable Tower Site which information shall
include but shall not be limited to (ii) (A) zoning permits and approvals,
variances, building permits and such other federal, state or local governmental
approvals which have been obtained or for which Carrier has made application;
(B) the construction, engineering and architectural drawings and related site
plan and surveys pertaining to the construction of the Tower Facilities on the
Property; (C) the geotechnical report for the Property commissioned by Carrier,
if any; (D) the title reports, commitments for title insurance, ownership and
encumbrance reports, title opinion letters, copies of instruments in the chain
of title or any other information which may have been produced regarding title
to the Property and the Easements; and (E) the environmental assessments
including phase I reports and any reports relating to contemporaneous or
subsequent intrusive testing, the "FCC Checklist" performed pursuant to National
Environmental Protection Act requirements and any other information which may
have been produced regarding the environmental condition of the Property, the
Easements or neighboring real property. Carrier shall cooperate with Tower
Company in making reasonable modifications to the foregoing information at the
request of Tower Company. If the Tower Company provides a Notice of Acceptance
for any such Applicable Tower Site, Tower Company shall reimburse Carrier for
the Pre-Development Costs associated with each accepted Applicable Tower Site in
accordance with the Schedule set forth in Attachment "V".
(d) FEDERAL AVIATION ADMINISTRATION APPROVAL. Carrier shall not
file with the FAA any application, responses, approvals and registration numbers
submitted or received with respect to any Applicable Tower Site without the
prior written approval of Tower Company which approval shall not be unreasonably
withheld, delayed or conditioned by Tower Company.
(e) ASSIGNMENT AND ASSUMPTION OF GROUND LEASE. In the event that
Tower Company accepts the Applicable Tower Site for development pursuant to
Section 2.1 of this Agreement, and Carrier has entered a Ground Lease with the
Ground Lessor, Carrier shall assign to Tower Company and Tower Company shall
assume and agree to be bound, from and after the date of the Assignment, by the
Ground Lease, together with the Easements to the Property
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pursuant to the Assignment and the relationship of the Carrier and Tower Company
with regard to the Applicable Tower Site shall thereafter be governed by this
Agreement. The form of the Assignment by which Carrier assigns the Ground Lease
and any Easements to Tower Company shall be substantially the same form as that
which is attached hereto as Attachment "I". The Assignment shall be executed by
Carrier and Tower Company in three (3) counterpart originals, and one original
execution copy shall be delivered to Carrier and two (2) original execution
copies shall be delivered to Tower Company within ten (10) business days of
Carrier's delivery of the Notice of Acceptance. In addition thereto, Tower
Company and Carrier shall execute a Memorandum of Assignment in substantially
the form of Attachment "II" to be recorded in the office of the property records
in the County where the Property is located. The Memorandum of Assignment shall
be executed and delivered to Tower Company within ten (10) business days of
Carrier's receipt of the Notice of Acceptance. Provided that the Ground Lease is
in the form of an option to lease and such option has not been exercised, Tower
Company shall record the Memorandum of Assignment within fifteen (15) business
days of the Notice of Acceptance, and in any event prior to the commencement of
construction of the Tower Facilities as commencement of construction is defined
in any mechanics or materialman's lien statute in the state where the Property
is located. In addition thereto, Tower Company and Carrier shall exercise their
best efforts to obtain from the Ground Lessor, a release of Carrier from all
liabilities under the Ground Lease and shall include such release language in
the Estoppel Certificate which is attached to the Assignment as Exhibit "E".
Notwithstanding the foregoing provisions of this Section, the Assignment and
Memorandum of Assignment are contingent upon the execution of the SLA by the
Carrier and the execution of the SLA by the Carrier shall be a condition
precedent to the effectiveness of the Assignment. In the event that any Estoppel
Certificate obtained from the Ground Lessor for such Site indicates that a
default exists or may exist under the Ground Lease on the part of the lessee
thereunder, Tower Company shall have the option to terminate the Assignment and
Memorandum of Assignment within ten (10) business days of the receipt of the
notice of such alleged default.
(f) COMPLETION OF PRE-DEVELOPMENT WORK. In the event that Tower
Company accepts the Applicable Tower Site prior to the time that a building
permit has been issued for the Applicable Tower Site, then except to the extent
previously obtained by Carrier, Tower Company shall obtain and be responsible
and liable for the completion of all matters necessary to complete the
construction of the Tower Facilities upon the Applicable Tower Site, including
without limitation (i) obtaining zoning permits and approvals, variances,
building permits and such other federal, state or local governmental approvals
for the Applicable Tower Site; (ii) obtaining the construction, engineering and
architectural drawings and related site plan and surveys pertaining to the
construction of the Tower Facilities on the Property (iii) obtaining the
geotechnical report for the Property; (iv) obtaining a title report, commitment
for title insurance, ownership and encumbrance report, title opinion letter,
copies of instruments in the chain of title or any other information which may
have been produced regarding the marketability of title and title to the
Property and the easements; and (v) obtaining environmental assessments
including phase I reports and a report relating to contemporaneous or subsequent
intrusive testing, the "FCC Checklist" performed pursuant to National
Environmental Protection Act requirements and any other information which may be
necessary to obtain permits and maintain licensing for the operation of a
wireless communications facility upon the Applicable Tower Site (collectively
the "Pre-Development Information"). Tower Company shall make available to and
deliver to Carrier copies of all of the Pre-Development Information obtained by
Tower Company prior to the
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execution of an SLA. Subject to the force majeure provisions of Section 5.5(e),
the Tower Company shall deliver to the Carrier all of the Pre-Development
Information and the Ground Lease for the Applicable Tower Site within the time
periods provided in Attachment "V".
(g) ZONING AND GOVERNMENTAL APPROVALS. In the event that it is
necessary to obtain any zoning or governmental approvals, permits, variances, or
other action from any federal, state or local governmental body or entity
("Governmental Approvals") for the Applicable Tower Site and Tower Company has
accepted the Applicable Tower Site prior to the issuance of such Government
Approvals, Carrier shall have the right to approve, (such approval not to be
unreasonably withheld, delayed or conditioned,) any application, motion, appeal
or action ("Government Application") for such Government Approvals. Where
reasonably practicable and at Carrier's sole cost and expense, Carrier shall
have the right to approve any presentation, witnesses, evidence, materials or
reproduced works, or similar items, matters or parties which Tower Company
intends to utilize or present for or to any person, entity, body or commission
for such Governmental Approval. Where reasonably practicable, Carrier shall have
the right to require Tower Company to hire or use, which shall be at Carrier's
sole cost and expense, any witnesses, attorneys, consultants, lobbyists, public
relations consultants, or parties which Carrier deems reasonably necessary to
obtain the Governmental Approval. So long as Tower Company has not entered into
a lease, license or similar contractual agreement with another wireless or
telecommunications provider for the occupancy of space upon the Tower
Facilities, Carrier shall have the right at any time to control, withdraw,
dismiss, terminate or otherwise cease any process, hearing or proceeding upon or
regarding a Government Application. In the event Government Approval is not
obtained for any Applicable Tower Site, Carrier shall reimburse Tower Company
for all fees and expenses incurred in connection with the Government
Applications and Pre-Development Costs. In the event that the Carrier desires to
terminate, dismiss, withdraw or otherwise cease any process, hearing, or
proceeding upon or regarding a Government Application and in the reasonable
opinion of the Tower Company and the Tower Company's Counsel (in writing) such
Government application could have been approved and Tower Company does not
construct a tower or similar facility upon the Property, the Carrier shall
reimburse the Tower Company for all fees and expenses incurred in connection
with the Government Applications and Pre-Development Costs. In addition, Tower
Company may subsequently terminate, by written notice to Carrier, any
Assignment, Memorandum of Assignment and/or SLA on any Applicable Tower Site
previously entered into pursuant to 2.1 (h)(ii) if any Governmental Approvals
for such Applicable Tower Site cannot be obtained, in which event, Tower Company
and Carrier shall have no further obligation to each other under such SLA or
under this Master Lease in regards the Applicable Tower Site, provided however,
that Tower Company shall assign the Ground Lease (and any related documents
including without limitation any Pre-Development Information) to Carrier without
warranty or representation. In the event that the Carrier elects to proceed to
appeal or obtain any Governmental Approvals for such Applicable Tower Site,
Carrier may award such Applicable Tower Site to another company for the
development, construction and leasing of the Applicable Tower Site, Carrier may
develop, construct and lease the Applicable Tower Site itself or elect to obtain
another tower site or otherwise. In any such event Tower Company and Carrier
shall have no further obligation to each other under such SLA or under this
Master Lease in regards to the Applicable Tower Site.
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(h) SITE LEASE AGREEMENT. (i) In the event that a building permit
has been obtained for the Applicable Tower Site and all Pre-Development
Information has been completed and delivered to Carrier, Carrier shall execute
two original copies of a Site Lease Agreement ("SLA") in substantially the form
of the SLA attached hereto as Attachment III and deliver such SLA to Tower
Company for execution within ten (10) business days of the delivery of the
Pre-Development Information to the Carrier. Tower Company shall execute and
deliver a Memorandum of SLA in substantially the form of the Memorandum of SLA
attached hereto as Attachment "IV" contemporaneously with the execution and
delivery of the SLA.
(ii) In the event that the Notice of Acceptance has been
received prior to the obtaining of a building permit and the delivery of all
Pre-Development Information to Carrier, Carrier shall execute two original SLAs
in substantially the form of the SLA attached hereto as Attachment III and
deliver such SLA to Tower Company for execution within ten (10) business days of
the delivery of all Pre-Development Information to Carrier. Tower Company shall
execute and deliver a Memorandum of SLA in substantially the form of the
Memorandum of SLA attached hereto as Attachment "IV" contemporaneously with the
execution and delivery of the SLA.
(iii) Carrier may refuse to execute the SLA and reject same
on any Applicable Tower Site because of any deficiency in the Pre-Development
Information or any deficiencies which are disclosed in the Pre-Development
Information, (which Carrier did not obtain or prepare), including without
limitation (A) exceptions to the title of the Property or the Easements, (B)
deficiencies in the Plans and Specifications (C) deficiencies in the
geotechnical analysis or environmental assessments for the Property or any
deficiencies regarding the condition of the Property; or (D) deficiencies in any
requirements under the National Environmental Protection Act; (E) any deficiency
in the SLA; or (F) any deficiency in the Ground Lease or the due authorization
thereof. Notwithstanding the foregoing, the Carrier shall give the Tower Company
notice of any deficiency in the Pre-Development Information. Notice of any
deficiencies from Carrier to Tower Company shall state with specificity the
alleged deficiencies and the exact nature of the cure required by Carrier. Tower
Company shall have fifteen (15) business days from the date of such notice to
cure, correct, or otherwise modify such deficiency in the Pre-Development
Information. In the event that Tower Company does not cure such deficiency to
the reasonable satisfaction of Carrier and Carrier refuses to execute or rejects
an SLA, Carrier shall have no obligation to execute an SLA or obligation to
Tower Company under this Master Lease in regards to the Applicable Tower Site.
In the event that Tower Company thereafter does not construct a tower on such
Applicable Tower Site, Carrier shall reimburse Tower Company for its
Pre-Development Costs incurred prior to Tower Company's actual knowledge of such
deficiency, but in any event no more than Sixteen Thousand and no/ 100s Dollars
($16,000.00). Notwithstanding the foregoing provisions, in the event that
Carrier and Tower Company dispute in good faith whether any such deficiency
exists or whether any cure specified by Carrier is reasonable under the
circumstances or any cure undertaken by Tower Company is adequate, and as a
result Carrier refuses to execute or rejects an SLA, in addition to the remedies
and recoveries provided above, Carrier shall submit and grant to Tower Company
any substitute or alternate tower site which Carrier intends to build, develop
and construct as a substitute for the Applicable Tower Site.
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(iv) Tower Company may refuse to execute the SLA and reject
same on any Applicable Tower Site because of any deficiency in the
Pre-Development Information or any deficiencies which are disclosed in the
Pre-Development Information, that was not prepared and available for review by
Tower Company prior to its giving of the Notice of Acceptance for such
Applicable Tower Site, including without limitation (A) exceptions to the title
of the Property or the Easements, (B) deficiencies in the Plans and
Specifications (C) deficiencies in the geotechnical analysis or environmental
assessments for the Property or any deficiencies regarding the condition of the
Property; or (D) deficiencies in any requirements under the National
Environmental Protection Act; (E) any deficiency in the SLA; or (F) any
deficiency in the Ground Lease or the due authorization thereof (unless the
Ground Lease was prepared by Tower Company) Notwithstanding the foregoing, Tower
Company shall give the Carrier notice of any such, which shall state with
specificity the alleged deficiencies.
(v) Carrier shall be responsible for recording and bear the
cost of recording the Memorandum of SLA.
III. DESIGN AND CONSTRUCTION OF TOWER FACILITIES
3.1 COVENANT TO CONSTRUCT. Construction of the Tower Facilities shall
be the responsibility and obligation of Tower Company. Tower Company shall be
responsible for the costs and construction of the Tower Facilities, and subject
to availability and receipt by Tower Company of a building permit and any other
required Governmental Approvals, Tower Company shall construct the Tower
Facilities in accordance with and in substantial compliance with the Plans and
Specifications and all rules, regulations, laws, and orders of any governing
body, local, state or federal. Tower Company shall be responsible for obtaining
all necessary permits and approval of the Plans and Specifications from all
applicable governmental agencies, unless previously obtained by Carrier.
3.2 APPROVAL OF PLANS AND SPECIFICATIONS. (a) In the event that Carrier
has obtained Plans and Specifications for the construction the Tower Facilities,
Carrier shall deliver to Tower Company the Plans and Specifications for the
Tower Facilities within five (5) days of the complete execution of the
Assignment. In the event that Tower Company does not approve the Plans and
Specifications Tower Company shall deliver detailed written objections to the
Plans and Specifications within five (5) business days of the receipt of the
Plans and Specification. If Tower Company modifies the Plans and Specifications
Tower Company shall prepare and deliver to Carrier for approval by Carrier three
copies of any modifications to the Plans and Specifications. Any modifications
to the Plans and Specifications for each Tower Facility shall be delivered to
Carrier within ten (10) business days of the delivery of the Plans and
Specifications to Tower Company. If no objection or modified Plans and
Specifications are delivered to Carrier within the above-referenced time
periods, the Plans and Specifications shall be deemed approved. Within five (5)
business days after receipt of the modified Plans and Specifications, Carrier
shall approve such modified Plans and Specification or deliver to Tower Company
detailed written objections thereto. If Carrier fails to either affirmatively
approve or disapprove the modifications to the Plans and Specifications proposed
by Tower Company within the five (5) day period, Carrier shall be deemed to have
effectively approved the modified Plans and Specifications.
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(b) In the event that Carrier has not obtained Plans and
Specifications for the Tower Facility, Tower Company shall have Plans and
Specifications for the construction of the Tower Facility prepared, designed and
delivered to Carrier within fifteen (15) business days of the execution of the
Assignment, or in the event there is no Assignment, within fifteen (15) business
days of the execution of the Ground Lease with the Ground Lessor, for Carrier's
approval, which approval shall not be unreasonably withheld, delayed or
conditioned. Within five (5) business days of receipt of the Plans and
Specifications, Carrier shall approve the Plans and Specifications or deliver to
Tower Company detailed objections thereto. If Carrier does not affirmatively
approve or disapprove the Plans and Specifications within such five (5) day
period, Carrier shall be deemed to have approved the Plans and Specifications.
(c) The grounds for any disapproval by Carrier of Plans and
Specifications or modifications thereof submitted by Tower Company shall be
limited to failure of the Plans and Specifications to conform to applicable
legal requirements or the to the Carrier Specifications.
(d) Notwithstanding the foregoing, in the event that any federal,
state or local governmental body, requires Tower Company or Carrier to modify
the Plans and Specifications to obtain a Governmental Approval, Carrier or Tower
Company may modify the Plans and Specifications provided the other party
approves such modification, such approval not to be unreasonably withheld,
delayed or conditioned.
3.3 COMMENCEMENT OF CONSTRUCTION. Tower Company shall commence
construction of the Tower Facility promptly, and in any event within ten (10)
days of the receipt of a building permit and shall complete the construction of
each individual Tower Facility within forty-five (45) business days after,
Carrier executes an SLA for the Site upon which the Tower Facility is to be
constructed. Tower Company shall have no obligation to commence construction of
the Tower Facilities unless and until an executed SLA has been executed by
Carrier for the applicable Tower Site. The commencement of construction and the
completion of construction of each Tower Facility shall be subject to delays
from substantial labor disputes, fire, unusual delay in deliveries not caused by
or contributed to by Tower Company or its contractors, abnormal adverse weather
conditions not reasonably anticipated, or government actions or inactions not
caused or contributed to by the Tower Company, or other unavoidable casualties,
force majeure or similar causes beyond reasonable control of Tower Company or
Tower Company's contractor or for time needed to perform additional construction
covered by any change order requested by Carrier. Notwithstanding the foregoing,
Carrier and Tower Company may negotiate and agree upon a different schedule for
the completion of a Tower Facility in a Carrier Market.
3.4 SELECTION OF CONTRACTOR. Prior to the commencement of construction
of a Tower Facility under this Agreement, Tower Company shall provide Carrier
with the names of the contractors it proposes to use for the construction of the
Tower Facility. Carrier may, in its reasonable discretion and within ten (10)
business days of receipt of this information, object to the use of a specific
contractor on a Tower Facility. Failure of Carrier to object to any contractor
within such ten (10) business day period shall constitute approval of all such
contractors.
3.5 MANNER OF CONSTRUCTION. (a) Tower Company represents, warrants and
agrees that the Tower Facilities shall be constructed in a good and workmanlike
manner and in accordance with the Plans and Specifications and all applicable
federal, state and local laws, ordinances,
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rules and regulations and shall be of good quality, free from faults and patent
defects. Tower Company warrants to Carrier that all materials furnished in
connection with the construction of the Tower Facilities will be new unless
otherwise specified, and of good quality, and that such construction will be of
good quality in accordance with industry standards, free from faults and patent
defects.
(b) Tower Company shall supervise and direct the work on the Tower
Facilities (the "Work"), using Tower Company's best skill and attention. Tower
Company shall be solely responsible for and have control over construction
means, methods, techniques, sequences and procedures and for coordinating all
portions of the Work on the Tower Facilities under this Agreement.
(c) Unless otherwise provided in this Agreement, Tower Company
shall provide and pay for labor, materials, equipment, tools, construction
equipment and machinery, water, heat, utilities, transportation, and other
facilities and services necessary for the proper execution and completion of the
Work, whether temporary or permanent and whether or not incorporated or to be
incorporated in the Work.
(d) Tower Company shall enforce strict discipline and good order
among the employees and other persons carrying out this Agreement. Tower Company
shall not permit employment of unfit persons or persons not skilled in tasks
assigned to them.
(e) Tower Company shall pay sales, consumer, use, and other
similar taxes regarding the Tower Facilities, the construction and leasing
thereof, and shall secure and pay for any permits and governmental fees,
licenses and inspections necessary for proper execution and completion of the
Work.
(f) Tower Company shall keep the Tower Facilities and surrounding
area free from accumulation of waste materials or rubbish caused by operations
under this Agreement. At completion of the work Tower Company shall remove from
and about the Tower Facilities waste materials, rubbish, tools, construction
equipment, machinery and surplus materials.
(g) Tower Company shall provide Carrier (and its employees, agents
and contractors) access to the Work in preparation and progress wherever
located, provided that such access shall not interfere with the Work.
(h) Tower Company shall pay all royalties and license fees; shall
defend suits or claims for infringement of patent rights and shall hold Carrier
harmless from loss on account thereof, but shall not be responsible for such
defense or loss when a particular design, process or product of a particular
manufacturer or manufacturers is required by Carrier unless Tower Company has
reason to believe that there is an infringement of patent.
(i) Tower Company shall be responsible for initiating, maintaining
and supervising all safety precautions and programs in connection with the
performance of the Agreement. Tower Company shall take reasonable precautions
for safety of, and shall provide reasonable protection to prevent damage, injury
or loss to:
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(1) employees on the Work, the Tower Facilities or the
Property and other persons who may be affected thereby;
(2) the Work, the Tower Facilities, the Property and
materials and equipment to be incorporated therein; and
(3) other property at the Property or adjacent thereto.
3.6 NO LIENS. Tower Company shall keep the Tower Facilities free of all
involuntary liens and claims other than those arising by, through or under
Carrier, including without limitation, (a) liens and claims arising out of or
related to the performance of the construction, all liens and claims of any
contractor, subcontractor, laborer, mechanic or materialman for labor performed
or material furnished in connection with the performance of the construction;
(b) liens or claims arising from taxes or assessments, except for liens for
taxes or assessments which are not yet due and payable; or (c) liens or claims
which may impair Carrier's interest. Notwithstanding the foregoing, Tower
Company may encumber the Tower Facilities with a lien or mortgage as surety for
construction or permanent financing.
3.7 NOTIFICATION OF COMPLETION. Tower Company shall notify Carrier of
the date when the Tower Facilities have been substantially completed by delivery
of a notice in substantially the same form attached hereto as Attachment "VI"
("Notice of Completion"). Within fifteen (15) business days after the Notice of
Completion, Carrier shall deliver to Tower Company a Punch List. The Tower
Facilities shall be deemed accepted by Carrier if a Punch List is not received
by Tower Company within fifteen (15) days of the date of Notice of Completion.
In the event that Carrier does submit a Punch List to the Tower Company, the
Tower Company shall complete and correct all items on the Punch List within ten
(10) business days after delivery of the Punch List. The Carrier shall not be
deemed to have accepted the Tower Facilities as complete until completion of all
items on the Punch List.
3.8 IMPROVEMENTS BY CARRIER. Unless otherwise provided in this
Agreement or otherwise, Carrier shall be responsible for procuring any and all
permits and approvals from any and all federal, state or local governmental
agencies which may be required for the installation or operation of Carrier's
Equipment on the Tower Facilities for each Site and for the installation of
Carrier's Equipment upon the Premises. In the event that the Tower Company
installs the Carrier Equipment upon the Tower Facilities, the Tower Company
shall perform such installation pursuant to the provisions of the Schedule
attached to Attachment "V". Subject to the provisions of Section 4.12, Carrier
shall submit plans and specifications for the proposed installation of Carrier's
Equipment to Tower Company for Tower Company's approval. Carrier shall not
construct or install any equipment or improvements onto the Premises other than
those which are described in the SLA or alter the radio frequency of operation
of the Carrier's Equipment without first obtaining the prior written consent of
Tower Company which consent shall not be unreasonably withheld, delayed or
conditioned. Notwithstanding the foregoing, so long as Carrier obtains Tower
Company's prior written approval, which approval shall not be unreasonably
withheld, delayed, or conditioned, Carrier shall have the right to make
alterations to the Premises and the Carrier Equipment so long as Carrier does
not increase the area of space upon the Tower Facilities or the ground space
upon the Site, increase the wind or structural load upon the Tower Facility or
create material radio frequency interference with the equipment of
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other users then located upon the Tower Facility who have a written contractual
agreement with the Tower Company for the location of equipment upon the Tower
Facility.
3.9 COMPLIANCE WITH GOVERNMENTAL RULES. All work required to be
performed by Carrier or Carrier's employees, contractors or agents shall be made
in a good and workmanlike manner. Tower Company shall be entitled to require
substantial compliance with the plans and specifications approved by Tower
Company pursuant to paragraph 3.8 including specifications for the grounding of
Carrier's equipment and antennas. All construction, installations and operations
in connection with this Master Lease by Carrier shall meet with all applicable
rules and regulations of the FCC, and all applicable codes and regulations of
the city, county, and state concerned.
IV. LEASE OF THE PREMISES
4.1 PREMISES. Carrier may install, maintain, operate and remove
Carrier's Equipment on the Tower Facilities, only at the heights and in those
locations designated in an SLA upon the Property. The terms and conditions of
this Master Lease shall be incorporated into each SLA and the terms and
conditions of each SLA shall be governed by the terms, covenants and conditions
of this Master Lease as though set forth in the SLA word for word. The SLA for
each Site shall be in substantially the same form as that attached hereto as
Attachment "III". The SLA shall be executed by Carrier and Tower Company and
shall incorporate by reference information about the Site including but not
limited to the legal description of the Premises and the Property which is the
subject of the Ground Lease, the legal description of the Easements, a
description of Carrier's Equipment, and a mounting height of the antennas in the
instance of the applicable Tower Facility or other structure. In no event shall
Carrier's Equipment exceed or deviate from the equipment described in the SLA
without the prior written consent of Tower Company which consent shall not be
unreasonably withheld, delayed or conditioned; provided however, Tower Company
and Carrier acknowledge and agree that so long as Tower Company approves any
substituted, additional or altered equipment, which approval shall not be
unreasonably withheld, delayed or conditioned and any additional or substituted
equipment (i) does not increase the wind load or structural burden upon the
Tower Facilities, (ii) does not increase the space upon the Tower Facilities or
the ground space upon the Site, (iii) does not create a fly material technical
or radio frequency interference with any existing equipment located upon the
Tower Facilities at the time of the request for such modification or
substitution, (iv) and does not increase the effective isotropically radiated
power emitted from the antennae located upon the Carrier Premises in excess of
one thousand six hundred forty (1640) watts. Carrier may substitute, add, alter,
modify and replace Carrier's Equipment described in the SLA upon the Tower
Facilities.
4.2 USE. Subject to the provisions of Section 3.8, Carrier may use the
Premises for (i) the transmission and reception of wireless communications
signals, (ii) the construction, alteration, maintenance, replacement, repair,
and upgrade of Carrier's Equipment, at Carrier's sole cost and expense, subject
to and in accordance with Sections 4.1, 4.12 and other applicable provisions of
this Master Lease, and (iii) activities incidental to any of the foregoing, and
for no other purposes. The use of any Tower Facility granted Carrier by this
Master Lease shall be non-exclusive, but it shall be limited in strict
accordance with this Master Lease. Tower Company shall have the right to enter
into lease and license agreements with others relating to the Tower Facility in
the reasonable discretion of the Tower Company, subject to the covenants,
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terms and conditions of this Master Lease including, without limitation,
covenants prohibiting interference with Carrier's Equipment found in Section
4.12 of this Master Lease.
4.3 INITIAL TERM OF MASTER LEASE. The initial term of this Master Lease
shall be for a period of seven (7) years from the date of this Master Lease. 'Me
Master Lease shall automatically renew for four (4) additional terms of five (5)
years each unless Tower Company or Carrier notifies the other party of its
intention not to renew this Master Lease at least six (6) months prior to the
end of the then existing term or Renewal Term of this Master Lease. The terms
and conditions of the Master Lease which are applicable to each SLA shall remain
in force and continue to apply until the termination or expiration of the
applicable SLA even if the Master Lease is terminated or not renewed.
4.4 INITIAL TERM OF SLAS. The initial term of the SLA for each Tower
Facility shall be for a period of seven (7) years commencing on the Commencement
Date and expiring on the seventh (7th) anniversary of the Commencement Date
("Initial Term"). Carrier and Tower Company shall execute a letter agreement in
substantially the form of Attachment VII, which shall be attached to each SLA
confirming the calendar date which the parties acknowledge and agree is the
Commencement Date for each SLA.
4.5 RENEWAL TERMS FOR SLA. Carrier shall have the right to extend each
SLA for four (4) additional period(s) of five (5) years each ("Renewal Terms").
Carrier shall provide Tower Company written notice of Carrier's intent to renew
any SLA not less than one hundred twenty (120) days prior to the end of the then
existing term. Each Renewal Term shall be on the same terms and conditions as
set forth in this Master Lease except that Rent shall accrue in the manner
described on Attachment V.
4.6 QUIET ENJOYMENT. Subject to Carrier's payment and performance of
all of its duties and obligations under this Master Lease and any applicable
SLA, Tower Company covenants that Carrier shall have the quiet enjoyment of the
Premises throughout the term of the applicable SLA, without threat of hindrance,
ejection or molestation.
4.7 GROUND LEASE. (a) Tower Company covenants that it shall not commit
any act which would result in a default, non-renewal or nonconformance of the
Ground Lease. The SLA shall be subject to the continued existence and
enforceability of the Ground Lease, provided, however, any termination or
expiration of the Ground Lease which occurs as a result of any default,
non-renewal or non-conformance by Tower Company under the terms of the Ground
Lease, without the prior written consent of Carrier, shall be construed as an
event of default under the terms of the SLA.
(b) In the event that the Ground Lease requires the Ground Lessor
to consent to the making of the applicable SLA, it shall be a condition
precedent to the effectiveness of the SLA that Tower Company obtains such
consent. The form and content of such consent shall be subject to Carrier's
approval, which approval shall not be unreasonably withheld, delayed or
conditioned.
(c) In the event that the Ground Lease expires, terminates or is
not otherwise renewed, and subject to the terms and provisions of the Ground
Lease, Tower Company hereby
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grants to Carrier the right to purchase the Tower Facilities (and any
accessories, accessions, attachments, fixtures or other equipment in connection
therewith, etc., including without limitation, storage buildings and fences) for
the fair market value of the Tower Facilities (and such accessories, accessions,
attachments, fixtures, equipment, etc.). Such option must be exercised within
six (6) months of the date of such expiration, termination or non-renewal.
(d) Tower Company agrees to deliver a non-disturbance and
attornment agreement with the landlord under the Ground Lease for Carrier's
continued possession of the Premises under the applicable SLA and/or the
assumption and/or assignment of the Ground Lease to Carrier in the event that
Tower Company elects to terminate the Ground Lease. Carrier acknowledges and
agrees that the language provided in paragraph 5 of the Estoppel Certificate
attached to the Assignment as Exhibit "E" will be sufficient to comply with the
requirements of this provision. This provision shall not imply that Carrier
consents to the expiration or termination of the Ground Lease by Tower Company.
4.8 BASE RENT. As consideration for the use and occupancy of the
Premises under any SLA, Carrier shall pay, without setoff, abatement, deduction,
or demand, except as expressly provided in this Master Lease, to Tower Company
the base rent shown on Attachment V ("Base Rent" or "Rent"). The Base Rent shall
be due and payable in monthly installments, in advance, on the first day of each
month during the term (including Renewal Terms) of this Lease, commencing on the
Commencement Date. Carrier shall pay to Tower Company interest at the rate of
[CONFIDENTIAL TREATMENT REQUESTED] per annum or the highest rate allowed by law
(whichever is less) on all payments of Base Rent not paid when due from due date
thereof until paid.
4.9 CARRIER'S EQUIPMENT. Carrier's Equipment shall remain Carrier's
exclusive personal property throughout the term of this Agreement and upon
termination of the SLA. Carrier shall have the right to remove all the Carrier's
Equipment at Carrier's sole cost and expense on or before the expiration or
earlier termination of the SLA, provided that Carrier repairs any damage to the
Premises, the Property or the Tower Facilities caused by such removal, provided
that Carrier shall not be obligated to remove any pads, utilities or similar
permanent fixtures. Tower Company and Tower Company's agents shall have the
right to enter the Property and the Tower Facility located upon the Property at
all times for the purpose of inspecting the same.
4.10 MECHANICS' LIENS. Carrier shall not permit any mechanics',
materialmen's, contractors' or subcontractors' liens arising from any
construction work, repair, restoration or removal or any other claims or demands
to be enforced against the Tower Facilities or the Property or any part thereof.
Tower Company shall have the right at any time to post and maintain upon the
Property such notices as may be necessary to protect Tower Company against
liability for all such liens and encumbrances. Tower Company shall assume no
liability for the payment of materials or labor which arise from the
installation of Carrier's improvements upon the Premises and no mechanics' or
materialmen's liens for Carrier's improvements shall attach to the interest of
Tower Company in the Tower Facilities. If any mechanics', materialmens',
contractors or subcontractors' liens are filed against the Property or the Tower
Facility due to work performed by Carrier, then Carrier shall remove such liens
by posting any bonds required by the applicable state law.
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4.11 MAINTENANCE AND REPAIRS.
(a) Carrier shall perform all repairs necessary or appropriate to
Carrier's Equipment to maintain Carrier's Equipment in a good and tenantable
condition, reasonable wear and tear, damage by fire, the elements or other
casualty excepted. Damage to Carrier's Equipment resulting from the acts or
omissions of Tower Company shall be repaired by Carrier at Tower Company's cost
and expense. Tower Company shall reimburse Carrier for the actual reasonable
costs incurred as evidenced by adequate documentation by Carrier in repairing
such damage or replacing Carrier's Equipment.
(b) Tower Company shall maintain the Tower Facilities, the Site,
the Easements, and portions of the Property other than Carrier's Equipment (i)
in good order and repair, wear and tear, damage by fire, the elements or other
casualty excepted; and (ii) in such condition that the Tower Facilities and the
Property are required to be maintained by Tower Company pursuant to the Ground
Lease; and (iii) in compliance with all rules, laws, regulations and orders of
any governmental entity. Damage to the Tower Facilities or the equipment or
improvements of Tower Company or others located on the Property or the Tower
Facilities, which results from the acts or omissions of Carrier, shall be
repaired by Carrier at Carrier's cost and expense, or at the option of Tower
Company, Carrier shall reimburse Tower Company for the actual reasonable costs
incurred by Tower Company in repairing such damage or replacing such equipment
or improvements as evidenced by adequate documentation. Notwithstanding the
foregoing or other provisions in this Master Lease to the contrary, Tower
Company may delegate its obligations to maintain or repair the Tower Facilities
to another company provided that, such company to whom the obligations are
delegated complies with all the terms and provisions of this Agreement and
provided that such delegation does not in effect, delegate all or a substantial
portion of Tower Company's obligations under this Agreement.
(c) Tower Company assumes no responsibility for the licensing,
operation and maintenance of the Carrier's Equipment.
4.12 UTILITIES. Carrier shall be solely responsible for the payment of,
and shall pay when due and payable, all utility charges including connection
charges and security deposits incurred in association with the Carrier's
Equipment. Carrier will be responsible for setting up their account for ongoing
power usage. The scope of the installation of the utilities shall be as defined
in Attachment V. Subject to Tower Company's prior written approval (which shall
not be unreasonably withheld, conditioned or delayed), Carrier may (i) install
or improve existing utilities servicing the Tower Facility, (ii) install an
electrical grounding system or improve or connect to any existing electrical
grounding system to provide the greatest possible protection from lightning
damage to the Tower Facility, or (iii) may connect its utilities to any
emergency generator or similar emergency power source which Tower Company may
have at the Tower Site or the Property. Tower Company shall assist Carrier in
obtaining any utility services necessary to service the Carrier Equipment
including, without limitation, any meters, telephone lines or services to the
Premises.
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4.13 INTERFERENCE AND MAXIMUM PERMISSIBLE EXPOSURE.
(a) BY OTHER OCCUPANTS. Tower Company may enter into sublease or
license agreements with other persons or entities for the Tower Facilities which
are the subject of this Master Lease, provided that Tower Company shall require
such sublessee or licensee to install equipment of types and frequencies that
will not cause interference to Carrier's communications operations then being
conducted from the Premises and subject to the provisions of this Master Lease.
Tower Company agrees that in the event such sublessee or licensee causes
interference with Carrier's Equipment, Tower Company will require such sublessee
or licensee to take all steps necessary to correct and eliminate the
interference. If such interference cannot be eliminated within twenty-four (24)
hours after receipt by Tower Company of notice from Carrier of the existence of
interference, Tower Company shall take such actions as are permitted by law and
can be conducted without breach of the peace such as causing such sublessee or
licensee to disconnect the electric power and shut down such sublessee's or
licensee's equipment (except for intermittent operation for the purpose of
testing, after performing maintenance, repair, modification, replacement, or
other action taken for the purpose of correcting such interference) until such
interference is corrected. If such interference is not rectified to the
reasonable satisfaction of Carrier within thirty (30) days after receipt by
Tower Company of such prior notice from Carrier of the existence of
interference, Tower Company shall cause such sublessee or licensee to remove
such sublessee's or licensee's antennas and equipment from the Tower Facilities.
(b) BY CARRIER. In no event shall Carrier alter the operations of
Carrier's Equipment or replace, upgrade or otherwise modify the operations of
Carrier's Equipment or otherwise use the Premises in a manner which will cause
interference with the operations of any other equipment which is then in
existence on the Tower and for which Tower Company has a written contractual
agreement with an independent bona fide third party. Carrier agrees that in the
event Carrier's Equipment causes interference with any existing equipment upon
the Tower Facilities which was placed upon the Tower Facilities prior to the
installation of Carrier's Equipment or of any modifications to Carrier's
Equipment upon the Tower Facilities, Carrier will take all steps necessary to
correct and eliminate the interference. If such interference cannot be
eliminated within twenty-four (24) hours after receipt by Carrier from Tower
Company of notice of the existence of interference, Carrier shall cease
operation of Carrier's Equipment (except for intermittent operation for the
purpose of testing, after performing maintenance, repair, modification,
replacement, or other action taken for the purpose of correcting such
interference) until such interference is corrected. Carrier covenants that
Carrier's Equipment shall be operated in compliance with all applicable federal
state and local laws, ordinances and regulations.
(c) MAXIMUM PERMISSIBLE EMISSIONS; COOPERATIVE EFFORTS. If antenna
power output ("RF Emissions") becomes subject to any restrictions imposed by the
FCC or any other government agency for RF Emissions standards on UTE limits, or
if the Tower Facilities otherwise become subject to federal, state or local
rules, regulations, restrictions or ordinances, Carrier shall comply with Tower
Company's reasonable requests for modifications to Carrier's Equipment which are
reasonably necessary for Tower Company to comply with such limits, rules,
regulations, restrictions or ordinances. The RF Emissions requirements of
Carrier shall be subordinate to any prior users of the Tower Facilities.
Similarly, the RF Emissions of users subsequent to Carrier shall be subordinate
to any requirements of Carrier. If Tower Company or
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Carrier require an engineering evaluation or other power density study be
performed to evaluate RF Emissions compliance with NIPE limits, then all
reasonable costs of such an evaluation or study shall be shared equally between
Tower Company, Carrier, and any other users of the Tower Facilities. If said
study indicates that RF Emissions at the Tower Facility do not comply with MPE
limits, then Tower Company, Carrier, and subsequent tenants shall immediately
take any steps necessary to ensure that they are individually in compliance with
such limits or shall at the demand of Tower Company cease operations until a
maintenance program or other mitigating measures can be implemented to comply
with MPE. Carrier shall have the right, without waiving any other rights or
remedies, to terminate the SLA applicable to any such Site in the event that
such mitigation measures cannot be implemented without materially adversely
affecting the operation of the Carrier Equipment.
(d) SIGNAGE REGARDING MPE. Carrier acknowledges and understands
that Tower Company may install certain signage and/or physical barriers
pertaining to radio frequency exposure from transmitters and other equipment
located upon the Tower Facilities. Tower Company and Carrier shall instruct all
of their personnel and their contractors performing work at the Tower
Facilities, the Property or the Premises, to read carefully all such signage, to
follow the instructions provided in such signage, and to honor all physical
barriers. Carrier shall be responsible for placement of signage or physical
barriers at or near the Carrier Equipment and/or its cabinet or building at the
Premises in order to comply with applicable FCC radio frequency exposure
guidelines. Tower Company agrees that it shall cooperate with Carrier in these
efforts and that Tower Company shall instruct its personnel and contractors
performing work at the Property, the Tower Facilities and the Premises to read
carefully all such signage, to follow the instructions provided in such signage,
and to honor all physical barriers. In no event shall Tower Company's personnel
or contractors tamper with any such signage or barriers. Tower Company and
Carrier shall cooperate in good faith to minimize any confusion or unnecessary
duplication that could result from similar signage being posted respecting other
carriers' transmission equipment (if any) at or near the Premises, the Tower
Facilities and the Property.
(e) NOTICE. In order to facilitate the provisions of this Section,
and the remaining provisions of the Agreement, the Tower Company shall give
Carrier notice of any party who shall occupy the Tower Facilities within sixty
(60) days of notice of such intended occupancy or the complete execution of an
agreement for such occupancy.
4.14 TOWER MARKING AND LIGHTING REQUIREMENTS. Tower Company shall be
responsible for designing and maintaining the Tower Facilities to comply with
any applicable marking and lighting requirements imposed by the FAA and the FCC.
Tower Company shall be responsible for the replacement of bulbs and for the
repair of the tower lighting system.
4.15 INDEMNIFICATION AND RISK OF LOSS.
(a) Carrier shall bear the risk of loss for Carrier's Equipment
from theft or damages caused by (i) acts of God, and such acts or loss were not
contributed to or caused by Tower Company; or (ii) third parties whose interest
in the Premises does not arise from Tower Company and such acts or loss were not
contributed to or caused by the Tower Company; or (iii) third parties who are
not employees, officers, directors, contractors, subcontractors or agents
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or representatives of Tower Company, and such acts or loss were not contributed
to or caused by Tower Company.
(b) Carrier shall exonerate, hold harmless, indemnify, and defend
Tower Company 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 (i) any injury to or the death of any
person; or (ii) any damage to property, if such injury, death or damage arises
out of or is attributable to or results from Carrier's use and occupancy of the
Premises or the negligent or intentional acts or omissions of Carrier or
Carrier's principals, employees, agents or independent contractors and such
injury, death or damage is not contributed to or caused by the acts or omissions
of Tower Company or Tower Company's use, operation or ownership of the Property
or the Tower Facilities; and
(c) Tower Company shall exonerate, hold harmless, indemnify and
defend Carrier 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 (i) any injury to or the
death of any person; or (ii) any damage to property, if such injury, death or
damage arises out of or is attributable to or results from Tower Company's use,
operation or ownership of the Property or the Tower Facilities, or the negligent
or intentional acts or omissions of Tower Company or Tower Company's principals,
employees, agents or independent contractors, and such injury, death of damage
is not caused by or contributed to by the acts or omissions of Carrier or
Carrier's use or operation of the Tower Facilities or Property or its interest
in the Premises.
4.16 ENVIRONMENTAL INDEMNIFICATION.
(a) Carrier, its heirs, grantees, successors, and assigns shall
indemnify, defend, reimburse and hold harmless Tower Company from and against
any and all environmental damages, caused by activities conducted on the
Premises by Carrier which result in or arise from (i) the presence of Hazardous
Materials upon, about or beneath the Premises or migrating to or from the
Premises which were introduced to the Premises by Carrier, or (ii) the violation
of any environmental requirements by Carrier pertaining to the Premises and any
activities thereon. Carrier covenants that it shall not nor shall Carrier allow
its employees, agents or independent contractors to treat, store or dispose of
any Hazardous Materials on the Premises or the Property in violation of any
applicable law.
(b) Tower Company, its heirs, grantees, successors, and assigns
shall indemnify, defend, reimburse and hold harmless Carrier from and against
any and all environmental damages, caused by activities conducted on the
Premises by Tower Company which result in or arise from (i) the presence of
Hazardous Materials upon, about or beneath the Premises or migrating to or from
the Premises which were introduced to the Premises by Tower Company, or (ii) the
violation of any environmental requirements by Tower Company pertaining to the
Premises and any activities thereon. Tower Company covenants that it shall not,
nor shall Tower Company allow its employees, agents or independent contractors
to treat, store or dispose of any Hazardous Materials on the Premises or the
Property in violation of any applicable law.
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4.17 INSURANCE. (a) Carrier shall procure and maintain during the term
of this Master Lease and any applicable SLA the following insurance: (i) "All
Risk" property insurance which insures Carrier's Equipment for their 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 provided
that the imposition of these limits of insurance shall not limit the liability
of Carrier hereunder. The Tower Company, at its option, may require the Carrier
to increase the amounts of the foregoing insurance at the commencement of each
Renewal Term of each SLA by an amount equal to fifteen percent (15%) over the
amount of insurance provided herein in effect for the Previous Initial Term or
Renewal Term.
(b) The Tower Company shall procure and maintain during the terms
of the Master Lease and any applicable SLA, the following insurance: (i) "All
Risk" property insurance which insures the Tower Facilities and the Property for
their full replacement cost; and (ii) comprehensive general liability insurance
with a 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; and (iv)
workers compensation insurance and employees' liability insurance for the
statutory limit, but in no event no less than One Million and No/100 Dollars
($1,000,000.00); and (v) a policy of rental value or business interruption
insurance insuring that rent under the Ground Lease shall continue to be paid
for a period of twelve (12) months; provided that the imposition of these limits
of insurance shall not limit the liability of the Tower Company hereunder. The
Carrier may, at its option, require the Tower Company to increase the amounts of
the foregoing insurance at the commencement of each Renewal Term of each SLA by
an amount equal to fifteen percent (15%) over the amount of insurance provided
herein in effect for the previous Initial Term or Renewal Term.
(c) Tower Company and any party holding a security interest in the
Tower Facilities which is identified to Carrier and any party holding a security
interest in Carrier's Equipment shall be named as an additional insured on any
insurance policy procured by Carrier pursuant to this Master Lease and Carrier
and any party holding a security interest in the Carrier Equipment which is
identified to the Tower Company, shall be named as an additional insured on any
insurance policy procured by Tower Company pursuant to this Master Lease.
4.18 SUBROGATION.
(a) IN GENERAL. All insurance policies required to be maintained
by Carrier and Tower Company under this Master Lease shall contain a waiver of
subrogation provision under the terms of which the insurance carrier waives all
of such carrier's rights to proceed against Tower Company or Carrier as may be
applicable, excluding workers compensation insurance.
(b) MUTUAL RELEASE. Tower Company and Carrier each release the
other and their respective representatives from any claims by them or any one
claiming through or under them by way of subrogation or otherwise for damage to
any person or to the Premises, the Tower Facilities or the Property, and to the
fixtures, personal property, improvements and alterations in or on the Premises
that are caused by or result from risks insured against under any insurance
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policy required to be carried by them pursuant to this Master Lease, provided
that such releases shall be effective only if and to the extent that the same do
not diminish or adversely affect the coverage under such insurance policies.
4.19 DESTRUCTION OR CONDEMNATION. If the whole or any substantial part
of the Premises, or the Tower Facilities shall be taken by any public authority
under the power of eminent domain, or if the whole or any substantial part of
the Premises or the Tower Facilities shall be destroyed by fire or other
casualty, so as to interfere with Carrier's use and occupancy thereof, then, at
the option of Tower Company, the applicable SLA shall cease on the part so taken
on the date of possession by such authority of that part, (or in the event that
Carrier must remove Carrier's Equipment prior to that date, the date Carrier
must move Carrier's Equipment) and any unearned rent paid in advance of such
date shall be refunded by Tower Company to Carrier within thirty (30) days of
such possession, and Tower Company shall have the right to terminate the SLA
upon written notice to Carrier, which notice shall be delivered by Tower Company
within thirty (30) days following the date notice is received by Tower Company
of such taking or possession. If Tower Company elects not to terminate the SLA,
then Tower Company shall rebuild and restore the Tower Facilities to
substantially the same condition as existed prior to the taking, destruction or
other casualty, and the Base Rent shall be reduced or abated in proportion to
the actual reduction or abatement of Carrier's use of the Premises until
completion of such restoration. Such building or restoration or construction
shall be completed within One Hundred and Twenty (120) days of the casualty or
taking. In addition thereto, and subject to the terms of the Ground Lease, the
Carrier shall have the option, at its expense to place a temporary
communications facility upon the Property during the restoration so long as the
placement of the temporary communications facility does not conflict or
interfere with the restoration or construction of the Tower Facilities, or in
the event of the termination of the SLA, for a period of One Hundred and Eighty
(180) days from the termination at a rate equal to onehalf of the amount of the
Rent provided for under the SLA.
4.20 DEFAULT. The occurrence of any of the following instances shall be
considered to be a default or a breach of the Applicable SLA by Carrier:
(a) any failure of Carrier to pay Base Rent or any other charge
for which Carrier has the responsibility of payment under this Master Lease, or
any SLA, within fifteen (15) days of written notice thereof; or
(b) any failure of Carrier to perform or observe any term,
covenant, provision or conditions of this Master Lease, or any SLA, which
failure is not corrected or cured by Carrier within thirty (30) days of receipt
by Carrier of written notice from Tower Company of the existence of such a
default; except such thirty (30) day cure period shall be extended as reasonably
necessary to permit Carrier to complete a cure so long as Carrier commences the
cure within such thirty (30) day cure period and thereafter continuously and
diligently pursues and completes such cure provided, however, that in the event
such default exposes Tower Company to potential liability for damages, fines or
penalties or causes a breach of any other agreement to which Tower Company is a
party, Carrier shall immediately remedy such conditions or Tower Company shall
be entitled to remedy such condition at Carrier's reasonable cost and expense;
or
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(c) Carrier shall become bankrupt, insolvent or file a voluntary
petition in bankruptcy, have an involuntary petition in bankruptcy filed against
Carrier which is not dismissed within sixty (60) clays of the date of the filing
of the involuntary petition, file for reorganization or arrange for the
appointment of a receiver or trustee in bankruptcy or reorganization of all or a
substantial portion of Carrier's assets, or Carrier makes an assignment for such
purposes for the benefit of creditors;
(d) this Master Lease or Carrier's interest herein or Carrier's
interest in the Premises are executed upon or attached and such execution or
attachment is not dismissed, released or removed within thirty (30) days of the
execution or attachment; or
(e) the imposition of any lien on the Carrier's Equipment except
as may be expressly authorized by this Master Lease, or an attempt by Carrier or
anyone claiming through Carrier to encumber Tower Company's interest in the
Tower Facilities or the Property and such lien or encumbrance is not dismissed,
released or removed within thirty (30) days of such imposition or attempt; or
(f) the abandonment of the Premises in the event that such
abandonment would cause the revocation or rescission of any Government Approvals
for the Tower Facilities and another carrier is located upon the Tower
Facilities and such abandonment is not cured within thirty (30) days of written
notice thereof, or in the event that no other Carrier is located upon the Tower
Facility, the Carrier shall not abandon the Tower Facilities for a period of one
(1) year after giving the Tower Company written notice of the proposed
abandonment or the date that an additional or replacement tenant is located upon
the Tower Facility, whichever event occurs first.
Tower Company understands and agrees that a default by Carrier
under the terms of any SLA shall constitute an event of default under that SLA
but shall not constitute a default under any other SLAs and that Tower Company
shall have the right but not the obligation to those remedies afforded to Tower
Company at law or in equity and by Section 4.20 for each applicable SKA, on a
site by site basis, which is subject to this Master Lease. The forbearance of
Tower Company to exercise any remedies available to Tower Company shall not
constitute a wavier of the ability of Tower Company to exercise those remedies
for the same or subsequent defaults.
4.21 REMEDIES OF TOWER COMPANY. In the event of a default by Carrier
under the terms of Section 4.20 of this Master Lease and after Carrier's failure
to cure such default within the time allowed to cure such default, then Tower
Company may, in addition to all other rights or remedies that Tower Company may
have hereunder at law or in equity;
(a) Terminate Carrier's right to possession of the Premises by any
lawful means, in which case the applicable SLA shall terminate and Carrier shall
immediately surrender possession of the Premises to Tower Company and Tower
Company may re-enter the Premises and take possession thereof and remove all
persons therefrom, and Carrier shall have no further claim to the Premises or
the Applicable Tower Site under this Master Lease. In the event of any such
termination, Tower Company shall also be entitled to recover from Carrier all
damages incurred by Tower Company by reason of Carrier's default or breach.
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(b) Alternatively, Tower Company may expel Carrier from the
Premises without terminating the Applicable SLA, make such alterations and
repairs as may be necessary in order to relet the Premises and may relet the
Premises or any part thereof for such term or terms (which may be for a term
extending beyond the term of this Master Lease or the applicable SLA) and at
such rental or rentals and upon such other terms and conditions as Tower Company
in its discretion may deem advisable. Upon each such reletting all rentals and
other sums received by Tower Company from such reletting ~hall be applied to the
payment of any costs and expenses of such reletting and to the payment of rental
and other charges due and unpaid hereunder. If such rentals and other sums
received from such reletting during any month are less than that to be paid
during that month by Carrier hereunder, Carrier shall pay such deficiency to
Tower Company; if such rentals and sums shall be more, Carrier shall have no
right to the excess. Such deficiency shall be calculated and paid monthly.
4.22 MITIGATION BY TOWER COMPANY. No efforts by Tower Company to
mitigate the damage by Carrier's default under this Master Lease shall be deemed
a waiver of Tower Company's rights to recover damages under this Master Lease.
4.23 DEFAULT BY TOWER COMPANY. The occurrence of any of the following
instances shall be considered to be a default or a breach of the Applicable SLA
by Tower Company:
(a) any failure of Tower Company to pay any charge for which Tower
Company has the responsibility of payment under this Master Lease or any SLA
within fifteen (15) days of written notice from Carrier, or its agents or
representatives thereof;
(b) any failure of Tower Company to perform or observe any term,
covenant, provision condition or obligation to commence and complete
construction under the terms of this Agreement, including without limitation to
Section 3.3 and 3.8 of this Agreement and any schedule, attachment or agreement
related thereto, subject to the force majeure provisions of this Agreement,
which failure is not corrected or cured by Tower Company within five (5) days of
receipt by Tower Company of written notice from Carrier of the existence of such
a default; or
(c) any failure of Tower Company to perform or observe any other
term, covenant, provision or conditions of this Master Lease or any SLA which
failure is not corrected or cured by Tower Company within thirty (30) days of
receipt by Tower Company of written notice from Carrier of the existence of such
a default; except such thirty (30) day cure period shall be extended as
reasonably necessary to permit Tower Company to complete a cure so long as Tower
Company commences the cure within such thirty (30) day cure period and
thereafter continuously and diligently pursues and completes such cure;
provided, however, that in the event such default exposes Carrier to potential
liability for damages, fines or penalties or causes a breach of any other
agreement to which Carrier is a party, Tower Company shall immediately remedy
such conditions or Carrier shall be entitled to remedy such condition at Tower
Company's reasonable cost and expense; or
(d) Tower Company shall become bankrupt, insolvent or file a
voluntary petition in bankruptcy, have an involuntary petition in bankruptcy
filed against Tower Company which is not dismissed within sixty (60) days of the
date of the filing of the involuntary petition, file for reorganization or
arrange for the appointment of a receiver or trustee in bankruptcy or
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reorganization of all or a substantial portion of Tower Company's assets, or
Tower Company makes an assignment for such purposes for the benefit of
creditors;
(e) this Master Lease, any SLA or Tower Company's interest herein
or Tower Company's interest in the Premises, the Tower Facilities or the
Property are executed upon or attached and such execution or attachment is not
dismissed, released or removed within thirty (30) days of the execution or
attachment; or
(f) the imposition of any lien on the Tower Facilities except as
may be expressly authorized by this Master Lease, or an attempt by Tower Company
or anyone claiming through Tower Company to encumber Carrier's interest in the
Premises and such lien or encumbrance is not dismissed, released or removed
within thirty (30) days of such imposition or attempt; or
Tower Company understands and agrees that a default by Tower Company under the
terms of any SLA shall constitute an event of default under that SLA but shall
not constitute a breach or a default under any other SLA and that Carrier shall
have the right but not the obligation to those remedies afforded to Carrier at
law or in equity and under Section 4.24 for each applicable SLA, on a
Site-by-Site basis, which is subject to this Master Lease and in any SLA,
provided, however, that in the event that any default hereunder occurs and is
then existing under more than thirty percent (30%) of the SLAs in effect under
his Agreement at any single instance and such defaults are not cured within the
notice periods provided herein, the aggregate of such defaults shall constitute
a default under the terms of this Agreement and Tower Company shall have the
right but not the obligation to those remedies afforded to Tower Company at law
or in equity and/or by Section 4.24 for the Master Lease and for all of the
Sites and the SLAs which are subject to the Master Lease. The forbearance of
Carrier to exercise any remedies available to Carrier shall not constitute a
waiver of the ability of Carrier to exercise those remedies for the same or
subsequent defaults.
4.24 REMEDIES OF CARRIER. In the event of a default by Tower Company
under the terms of Section 4.23 of this Master Lease, or any SLA and after Tower
Company's failure to cure such default within the time allowed to cure such
default, then Carrier may, (a) sue for damages; (b) terminate the applicable
SLA, without waiving its right to sue for damages; (c) cure such defaults itself
and deduct the actual costs of such cure from the Base Rent due under the
applicable SLA, then from the rent or Base Rent due under any other SLAs, and
then from any other amounts, due to Tower Company from the Carrier; (d) in the
case of a default under Section 4.23(b) Carrier shall have the right to complete
construction of or cause the completion of the construction of the Tower
Facilities without further notice to or consent of the Tower Company. Carrier
shall have the right to hire or retain any contractor it shall so choose to
complete the construction of the Tower Facilities in such event. Tower Company
and its employees, contractors, subcontractors, agents and representatives shall
provide the Carrier and its employees, agents, representatives, contractors and
subcontractors free, unobstructed, complete and open access to the Property and
the Easements to complete construction of the Tower Facilities, Carrier's
Equipment and anything related thereto. In addition to any other claims or
damages, Tower Company shall reimburse Carrier for the reasonable cost actually
incurred for the construction or completion of construction of the Tower
Facility and any items related thereto. Carrier may set such amounts due off
against the Rent due under the SLA for the Applicable Tower Facility or any
other SLA and make claim against the Tower Company for
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any amounts due, such remedies to be cumulative and concurrent or sequential at
the election of the Carrier. Such remedies shall be in addition to all other
rights and remedies Carrier may have at law or equity. All of the remedies
provided in this Agreement or in any other SLA or at law or in equity are
cumulative and Carrier may exercise such remedies concurrently or sequentially
in such order as it may choose.
4.25 MITIGATION BY CARRIER. No efforts by Carrier to mitigate the
damage by Tower Company's default under this Master Lease shall be deemed a
waiver of Carrier's rights to recover damages under this Master Lease.
4.26 SUBORDINATION. This Master Lease, at Tower Company's option, shall
be subordinate to any mortgage, deed of trust or other encumbrance now or
hereafter placed upon the Premises and to any and all advances made on the
security thereof and to all renewals, modifications, consolidations,
replacements and extensions thereof, provided that the beneficiary or lender
under such mortgage, deed of trust or other encumbrance enters into a
satisfactory non-disturbance and attornment agreement with Carrier. Subject to
the provisions of Section 4.7 of this Master Lease, any SLA shall be subject to
the terms and provisions of the Ground Lease.
V. GENERAL PROVISIONS
5.1 NOTICES. All notices or demands by or from Tower Company to
Carrier, or Carrier to Tower Company, shall be in writing. Such notices or
demands shall be mailed to the other party at the following address:
Tower Company:
-------------------------------
-------------------------------
-------------------------------
Carrier: Tritel Communications, Inc.
112 E. State Street - Suite B
Ridgeland, MS 39157
Attn: Ken Harris
5.2 ASSIGNMENTS AND SUBLEASES.
(a) ASSIGNMENT BY CARRIER.
(i) ASSIGNMENT OF MASTER LEASE OR SLAS. Carrier shall not voluntarily,
involuntarily or by operation of law assign, sell, or otherwise transfer
Carrier's interest in this Master Lease, any SLA, the Property, the Premises,
the Tower Facilities or any portion thereof without Tower Company's prior
written consent, which consent shall not be unreasonably withheld, conditioned
or delayed; provided, however that no consent of Tower Company shall be required
for any assignment or transfer to by Carrier of its interest in this Master
Lease, and/or each and every Carrier Equipment, SLA, Property, Premises, and
Tower Facility to any person or entity by way of merger, consolidation, or other
reorganization, or to any parent, subsidiary, or affiliate (being a person or
entity that directly or indirectly controls, is controlled by, or is under
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common control with, Carrier), or to any person or entity acquiring all or
substantially all of Carrier's assets, or to any Person or entity acquiring and
continuing that portion of Carrier's business operations conducted pursuant to
this Master Lease, provided that any such assignee or transferee has sufficient
experience and the financial capability to perform the duties and obligations of
Carrier under this Master Lease. Upon any such assignment or transfer, Carrier
shall be released from and relieved of any further duties and obligations under
this Master Lease and each and every SLA, Property, Premises, and Tower Facility
provided that such transferee or assignee assumes all such duties and
obligations.
(ii) PLEDGE BY CARRIER. Notwithstanding anything else contained herein,
Carrier may, without notice or consent of Tower Company, pledge, mortgage,
convey by deed of trust or security deed, assign, create a security interest in,
or otherwise execute and deliver any and all instruments for the purpose of
securing bona fide indebtedness all or any part of Carrier's interest in this
Master Lease, any SLA, any Premises, and/or all or any portion of Carrier's
right, title, and interest in and to any and/or all of Tower Facilities, the
Property or the Easements, provided that Carrier provides Tower Company with a
subordination non-disturbance and attornment agreement reasonably satisfactory
to Tower Company. Promptly on Carrier's or Carrier's lender's request, Tower
Company shall execute and deliver, and shall assist in facilitating the
execution and delivery of, all documents requested by any of Carrier's lenders
including, but not limited to, consents to giving notice to Carrier's lender(s)
in the event of Carrier's default under the provision of the SLA or the Master
Lease, and consents to Carrier's assignment to any lender(s) of any and all of
Carrier's interest in or to this Agreement, any SLA or Premises provided,
however, that all such documents and consents shall be in a form which is
reasonably acceptable to Tower Company and which will not materially increase
Tower Company's burdens nor materially impair Tower Company's rights under this
Master Lease or any SLA. Carrier shall reimburse Tower Company for any
out-of-pocket costs incurred by Tower Company in complying with this provision
including, but not limited to, Tower Company's reasonable attorneys' fees
incurred in reviewing and negotiating such documents and consents.
(b) LIMITATIONS ON ASSIGNMENT BY TOWER COMPANY.
(i) SUBLEASE. Tower Company shall have the right, subject to the
provisions of this Agreement, including without limitation, the provisions in
Section 4.13 hereof, to sublease all or any portion of the Tower Facilities, the
Property or the Easements in Tower Company's reasonable discretion without
obtaining Carrier's consent, provided that such sublease does not violate the
provisions of and is subject to the provisions of this Master Lease and any
applicable SLA. The Tower Company shall give the Carrier notice of such
sublease, license or other agreement within sixty (60) days of the complete
execution of such lease, license or agreement.
(ii) ASSIGNMENT OF MASTER LEASE OR SLAS. Tower Company shall not
voluntarily, involuntarily or by operation of law assign, sell, or otherwise
transfer Tower Company's interest in this Master Lease, any SLA, the Property,
the Premises, the Tower Facilities or any portion thereof without Carrier's
prior written consent, which consent shall not be unreasonably withheld,
conditioned or delayed; provided, however that no consent of Carrier shall be
required for any assignment or transfer to by Tower Company of its interest in
this Master Lease, and each and every SLA, Property, Premises, and Tower
Facility to any person or
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entity by way of merger, consolidation, or other reorganization, or to any
parent, subsidiary, or affiliate (being a person or entity that directly or
indirectly controls, is controlled by, or is under common control with, Tower
Company), or to any person or entity acquiring all or substantially all of Tower
Company's assets, or to any Person or entity acquiring and continuing that
portion of Tower Company's business operations conducted pursuant to this Master
Lease, provided that any such assignee or transferee has sufficient experience
and the financial capability to perform the duties and obligations of Tower
Company under this Master Lease. Upon any such assignment or transfer, Tower
Company shall be released from and relieved of any further duties and
obligations under this Master Lease and each and every SLA, Property, Premises,
and Tower Facility provide that such transferee or assignee assumes all such
duties and obligations..
(iii) ASSIGNMENT OF CONSTRUCTION OBLIGATIONS. Notwithstanding
anything else contained herein, Tower Company shall not voluntarily,
involuntarily or by operation of law assign or otherwise transfer its rights or
obligation (including, but not limited to the obligation to construct the Tower
Facilities and install the Carrier Equipment, if applicable) relating to any
Applicable Tower Site which is subject to this Agreement, prior to the
acceptance of a Site by Carrier pursuant to 3.7.
(iv) PLEDGE BY TOWER COMPANY. Notwithstanding anything else
contained herein, Tower Company may, without notice or consent of Carrier,
pledge, mortgage, convey by deed of trust or security deed, assign, create a
security interest in, or otherwise execute and deliver any and all instruments
for the purpose of securing bona fide indebtedness as to all or any part of
Tower Company's interest in this Master Lease, any SLA, any Premises, and/or all
or any portion of Tower Company's right, title, and interest in and to any
and/or all of Tower Facilities, the Property or the Easements., Notwithstanding
the foregoing, neither the lender nor Tower Company may assign, transfer, sell
or otherwise convey the Master Lease, any SLA, any Ground Lease, any Tower
Facility or any interest therein to any competitor of Carrier that is in the
business of providing telecommunications services similar to those provided by
Carrier; provided that Tower Company may lease or sublease space on the Tower
Facilities or the Property to any person or entity whatsoever.. Promptly on
Tower Company's or Tower Company's lender's request, Carrier shall execute and
deliver, and shall assist in facilitating the execution and delivery of, all
documents requested by any of Tower Company's lenders including, but not limited
to, consents to giving notice to Tower Company's lender(s) in the event of Tower
Company's default under the provision of the SLA or the Master Lease, and
consents to Tower Company's assignment to any lender(s) of any and all of Tower
Company's interest in or to this Agreement, any SLA or Premises provided,
however, that all such documents and consents shall be in a form which is
reasonably acceptable to Carrier and which will not materially increase Tower
Company's burdens nor materially impair Carrier's rights under this Master Lease
or any SLA. Tower Company shall reimburse Carrier for any out-of-pocket costs
incurred by Carrier in complying with this provision including, but not limited
to, Carrier's reasonable attorneys' fees incurred in reviewing and negotiating
such documents and consents.
5.3 REPRESENTATIONS AND WARRANTIES OF CARRIER. Carrier represents and
warrants to Tower Company that:
(a) ORGANIZATION, GOOD STANDING AND AUTHORITY. It is a
corporation, duly organized, validly existing and in good standing under the
laws of Delaware and has the requisite
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corporate power and authority to enter into and perform this Master Lease and
Carrier is duly qualified to do business in the states of Alabama, Florida,
Mississippi, Tennessee, and Kentucky.
(b) AUTHORIZATION AND VALIDITY OF MASTER LEASE. That Carrier's
execution and delivery of this Master Lease have been duly authorized and no
further action on the part of Carrier is necessary to authorize this Master
Lease or the consummation of the transactions contemplated herein. This Master
Lease constitutes the valid and binding obligation of Carrier duly enforceable
in accordance with its terms.
(c) NO BREACH OF OTHER INSTRUMENTS. That there is no contract or
agreement or other instrument to which Carrier is a party or by which Carrier or
its assets are bound which prohibits the execution or delivery by Carrier of
this Master Lease or the performance or observance by Carrier of any term or
condition of this Master Lease and, subject to the fulfillment of all conditions
set forth therein, neither execution and delivery of this Master Lease nor the
consummation of the transactions contemplated hereby will violate any term or
provision of any such contract, agreement, or instrument.
(d) NO VIOLATION OF LAW OR ORDER. That subject to the fulfillment
of all conditions set forth herein, neither the execution and delivery of this
Master Lease nor transactions contemplated hereby, shall result in the violation
by Carrier of any, law, regulation, judgment or order of any court or
governmental authority applicable to Carrier or result in a breach of the terms
of this or any other agreement to which Carrier is a party.
5.4 REPRESENTATIONS AND WARRANTIES OF TOWER COMPANY. Tower Company
represents and warrants to Carrier that:
(a) ORGANIZATION, GOOD STANDING AND AUTHORITY. It is a limited
partnership, duly organized, validly existing and in good standing under the
laws of Delaware and has the requisite partnership power and authority to enter
into and perform this Master Lease and Tower Company is duly qualified to do
business in the states of Alabama, Florida, Mississippi, Tennessee and Kentucky.
(b) AUTHORIZATION AND VALIDITY OF MASTER LEASE. That Tower
Company's execution and delivery of this Master Lease have been duly authorized
and no further action on the part of Tower Company is necessary to authorize
this Master Lease or the consummation of the transactions contemplated herein.
This Master Lease constitutes the valid and binding obligation of Tower Company
duly enforceable in accordance with its terms.
(c) NO BREACH OF OTHER INSTRUMENTS. That there is no contract or
agreement or other instrument to which Tower Company is a party or by which
Tower Company or its assets are bound which prohibits the execution or delivery
by Tower Company of this Master Lease or the performance or observance by Tower
Company of any term or condition of this Master Lease and, subject to the
fulfillment of all conditions set forth therein, neither execution and delivery
of this Master Lease nor the consummation of the transactions contemplated
hereby will violate any term or provision of any such contract, agreement, or
instrument.
(d) NO VIOLATION OF LAW OR ORDER. That subject to the fulfillment
of all conditions set forth herein, neither the execution and delivery of this
Master Lease nor
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<PAGE>
transactions contemplated hereby, shall result in the violation
by Tower Company of any, law, regulation, judgment or order of any court or
governmental authority applicable to Tower Company or result in a breach of the
terms of this or any other agreement to which Tower Company is a party.
5.5 MISCELLANEOUS.
(a) SUCCESSORS AND ASSIGNS. The terms, covenants and conditions
contained in this Master Lease shall be binding upon and inure to the benefit of
the parties hereto, and also their respective heirs, executors, administrators,
personal representatives, successors and assigns subject to the provisions of
paragraph 5.2 of this Master Lease relating to restrictions upon sale,
assignment or subletting of this Master Lease.
(b) INTEGRATION. It is understood that there are no oral
agreements or representations between the parties hereto affecting this Master
Lease and this Master Lease and the SLAs supersede and cancel any and all
previous negotiations, arrangements, agreements or representations and
understandings, if any, between the parties hereto with respect to the subject
matter thereof. There are no other representations or warranties between the
parties and all reliance with respect to representations is solely upon the
representations and agreements contained in this document except for the SLAs,
Memoranda of SLA, Assignments, Memoranda of Assignment; Estoppel Certificates,
Notices of Completion and any other documents or instruments referred to herein.
(c) HEADINGS. The Headings and paragraph titles herein are for
convenience only and do not in any way define, limit or construe the contents of
such Paragraphs.
(d) SEVERABILITY. It is agreed that if any provision of this
Master Lease shall be determined to be void by any court of competent
jurisdiction, then such determination shall not affect any other provisions of
this Master Lease and all such other provisions shall remain in full force and
effect.
(e) FORCE MAJEURE. Except as otherwise provided in this Master
Lease, any prevention, delay or stoppage due to strikes, lockouts, labor
disputes, acts of God, inability to obtain labor or materials or reasonable
substitutes therefor, governmental restrictions, actions or inactions not caused
or contributed to by the Tower Company, governmental controls not caused or
contributed to by Tower Company, enemy or hostile governmental action, civil
commotion, fire or other casualty, and other causes beyond the reasonable
control of the party obligated to perform, shall excuse the performance by such
or a period equal to any such delay or stoppage.
(f) ESTOPPEL CERTIFICATE. (i) Carrier shall, upon the request of
Tower Company, but no more than four (4) times in any single year, upon not less
than ten (10) business days' prior written notice from Tower Company, execute,
acknowledge and deliver to Tower Company's lender a statement in writing on a
form prescribed by Tower Company's lender reasonably acceptable to Carrier (i)
certifying that this Master Lease is unmodified and in full force and effect
(or, if modified, stating the nature of such modification and certifying that
this Master Lease as so modified is in full force and effect), or if not in full
force and effect stating that the Master Lease is not in full force and effect
and the reasons therefore, to the best of its
29
<PAGE>
knowledge, and the date to which the rent and other charges are paid in advance,
if any, (ii) acknowledging that there is not, to the best of Carrier's
knowledge, any uncured default on the part of Tower Company hereunder, or
specifying such default if any is claimed and (iii) such other information as
may reasonably be requested.
(ii) Tower Company shall, upon the request of any lender of
Carrier, but no more than four (4) times in any single year, upon not less than
ten (10) business days' prior written notice from Carrier, execute, acknowledge
and deliver to Carrier's lender a statement in writing on a form prescribed by
Carrier's lender reasonably acceptable to Tower Company (i) certifying that this
Master Lease is unmodified and in full force and effect (or, if modified,
stating the nature of such modification and certifying that this Master Lease as
so modified is in full force and effect), or if not in full force and effect
stating that the Master Lease is not in full force and effect and the reasons
therefore, to the best of its knowledge, and the date to which the rent and
other charges are paid in advance, if any, and (ii) acknowledging that there is
not, to the best of Tower Company's knowledge, any uncured default on the part
of Carrier hereunder, or specifying such default if any is claimed and (iii)
such other information as may reasonably be requested.
(g) ATTORNMENT. (i) Upon request of the mortgagee, Carrier will
attorn, as lessee under this Master Lease, to the purchaser at any foreclosure
sale thereunder, or if any ground or underlying Ground Lease is terminated for
any reason, Carrier will attorn, as Carrier under this Master Lease, to the
ground lessor under the Ground Lease, provided that such Ground Lessor does not
disturb Carrier's possession of the Premises and honors the terms and conditions
of this Master Lease, and Carrier will execute such instruments as may be
necessary or appropriate to evidence such attornment.
(ii) Upon request of the mortgagee, Tower Company will
attorn, as lessor under this Master Lease, to the purchaser at any foreclosure
sale thereunder.
(j) CERTAIN RULES OF CONSTRUCTION. (i) Notwithstanding the fact
that certain references elsewhere in this Master Lease to acts required to be
performed by Carrier hereunder, or to breaches or defaults of this Master Lease
by Carrier, omit to state that such breaches or defaults by Carrier are
material, unless the context implies to the contrary, and all breaches or
defaults by Carrier hereunder shall be deemed material. Carrier shall be fully
responsible and liable for the observance and compliance by concessionaires of
and with all the terms and conditions of this Master Lease, which terms and
conditions shall be applicable to concessionaires as if they were the Carrier
hereunder and failure by a concessionaire fully to observe and comply with the
terms and conditions of this Master Lease shall constitute a default hereunder
by Carrier.
(ii) Notwithstanding the fact that certain references
elsewhere in this Master Lease to acts required to be performed by Tower Company
hereunder, or to breaches or defaults of this Master Lease by Tower Company,
omit to state that such breaches or defaults by Tower Company are material,
unless the context implies to the contrary, and all breaches or defaults by
Tower Company hereunder shall be deemed material. Tower Company shall be fully
responsible and liable for the observance and compliance by concessionaires of
and with all the terms and conditions of this Master Lease, which terms and
conditions shall be applicable to
30
<PAGE>
concessionaires as if they were Tower Company hereunder and failure by a
concessionaire fully to observe and comply with the terms and conditions of this
Master Lease shall constitute a default hereunder by Tower Company.
(k) WARRANTIES AND REPRESENTATIONS. The warranties and
representations made in this Agreement shall be deemed to be made, reaffirmed,
ratified, rewarranted and re-represented upon the execution of each Assignment
and each SLA.
(l) COUNTERPARTS. This Master Lease may be executed in
counterparts with the same effect as if both parties hereto had signed the same
document. Both counterparts shall be construed together and shall constitute one
(1) Master Lease.
(m) INTERPRETATION. The parties hereby acknowledge that the
draftsmanship of this Agreement was a cooperative effort by both parties who
were represented by counsel and that this Master Lease shall not be construed
either for or against Tower Company or Carrier, but this Master Lease shall be
interpreted in accordance with the general tenor of the language in an effort to
reach an equitable result.
(n) GOVERNING LAW. This Master Lease is to be governed by and
construed in accordance with the laws of the state in which the Premises is
situated.
(o) NO PARTNERSHIP. Carrier and Tower Company agree that their
relationship under this Master Lease shall be that of landlord and tenant and
that no partnership is intended or shall be created by this Master Lease.
(p) CONSENT. Tower Company and Carrier covenant that whenever
their consent or approval is required under this Master Lease said consent shall
not be conditioned or unreasonably withheld, delayed, or conditioned.
(q) HOLDING OVER. If Carrier remains in possession of the Premises
at any Applicable Tower Site after expiration or earlier termination of the
applicable SLA for such Applicable Tower Site, then Carrier shall become a
tenant-at-sufferance at 125% of the Base Rent payable at the time of such
expiration or earlier termination, and there shall be no renewal or extension of
any such SLA by operation of law.
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<PAGE>
IN WITNESS WHEREOF, Tower Company and Carrier have executed this
Master Lease and the "Effective Date" of this Master Lease shall be the last
date that this Master Lease is signed by Tower Company and Carrier.
TOWER COMPANY:
AMERICAN TOWER, L.P.
BY: ATC GP, INC.
ITS: GENERAL PARTNER
BY:
--------------------------------------
TITLE:
--------------------------------------
DATE:
--------------------------------------
TRITEL COMMUNICATIONS, I
BY:
--------------------------------------
WILLIAM S. ARNETT
PRESIDENT
MAY 18, 1999
32
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LIST OF ATTACHMENTS
ATTACHMENT DESCRIPTION
- ---------- -----------
I ASSIGNMENT
II MEMORANDUM OF ASSIGNMENT
III SLA
IV MEMORANDUM OF SLA
V REIMBURSEMENT OF PRE-DEVELOPMENT COSTS AND RENT
VI NOTICE OF COMPLETION
VII LETTER CONFIRMING COMMENCEMENT DATE
33
<PAGE>
ATTACHMENT "I"
ASSIGNMENT OF GROUND LEASE
THIS ASSIGNMENT OF GROUND LEASE AGREEMENT ("Assignment ") is made and
entered into as of the __________ day of ______________, _________, by and
between American Tower, L.P., a Delaware limited partnership ("Tower Company"),
and Tritel Communications, Inc., a Delaware Corporation, ("Carrier").
WHEREAS, Carrier has entered into a ground lease agreement, lease
agreement or other similar agreement (the "Ground Lease") for the lease of the
real property more particularly described in Exhibit "A" attached hereto (the
"Property") upon which Carrier desires the construction of a tower and related
facilities and for an easement for ingress, egress and utilities over the real
property more particularly described in Exhibit "B" attached hereto (the
"Easement");
WHEREAS, Carrier desires to assign the Ground Lease for said Property,
a copy of which is attached hereto as Exhibit "C", to Tower Company; and
WHEREAS, Tower Company desires to develop the tower and certain
facilities on the Property and sublease a portion of the space upon the Tower
Facilities to Carrier.
NOW THEREFORE, for and in consideration of the mutual promises outlined
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Carrier and Tower Company do hereby agree as
follows:
1. Assignment. Carrier does hereby transfer, convey and assign to Tower
Company, without warranty or representation, and Tower Company shall and hereby
assumes and agrees to be bound (to the extent provided in paragraph 3 below) by
the Ground Lease, together with any easements for ingress, egress and utilities
("Easements") to the Property.
2. Covenants of Carrier. Carrier covenants that it:
(a) unconditionally and absolutely assigns, transfers, sets over and
conveys to Tower Company, without warranty or representation, all of Carrier's
right, title and interest in, to and under the Ground Lease and the Easements
except as such rights may be limited or modified by any (if any) addenda
attached to the Ground Lease. Carrier represents and warrants to Tower Company
that all addenda to the Ground Lease are attached to this Agreement as part of
Exhibit "C". The Easements, if any, in addition to the Ground Lease are attached
hereto as Exhibit "D".
(b) to the best of its knowledge, without independent inquiry or
investigation, has no knowledge or notice of any default, defense, offset,
claim, demand, counterclaim or cause of action which may presently exist under
the Ground Lease; and
(c) to the extent Carrier may assign, Carrier irrevocably assigns,
transfers, conveys and sets over to Tower Company, without warranty or
representation, and Tower
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<PAGE>
Company accepts from Carrier all of the right, title and interest of Carrier
under each and all of the following items (to the extent that the following may
be assigned):
(i) the Federal Aviation Administration application, responses,
approvals and registration numbers submitted or received by Carrier with
respect to the tower proposed to be constructed on the Property;
(ii) the zoning permits and approvals, variances, building permits and
such other federal, state or local governmental approvals which have been
gained or for which Carrier has made application;
(iii) the construction, engineering and architectural drawings and
related site plan and surveys pertaining to the construction of the Tower
Facilities on the Property;
(iv) the geotechnical report for the Property which has been
commissioned by Carrier;
(v) the title reports, commitments for title insurance, ownership and
encumbrance reports, title opinion letters, copies of instruments in the
chain of title or any other information which may have been produced
regarding title to the Property and the Easements;
(vi) the environmental assessments including phase I reports and any
reports relating contemporaneous or subsequent intrusive testing, the "FCC
Checklist" performed pursuant to NEPA requirements and any other information
which may have been produced regarding the environmental condition of the
Property, Easements or neighboring real property; and
The items described in paragraphs 2(c) may hereinafter be collectively
referred to as "Site Acquisition Items"; (d) to the extent that any of the Site
Acquisition Items cannot legally be assigned, Carrier shall cooperate with Tower
Company and assist Tower Company wherever necessary with respect to any such
Site Acquisition Items to enable Tower Company to perform its obligations to
Carrier under the Master Lease as they relate to such Site Acquisition Items;
(e) shall use diligent efforts to assist Tower Company in obtaining an
estoppel certificate from the lessor in the Ground Lease in substantially the
same form as is attached hereto as Exhibit "E" ("Estoppel Certificate"). Tower
Company shall use diligent efforts to obtain such Estoppel Certificate from each
lessor; and
(f) to indemnify and to forever defend and hold harmless Tower Company
from and against any and all loss, cost, damage and expense ever suffered or
incurred by Tower Company by reason of any act or omission of Carrier under the
Ground Lease prior to the date hereof, including, without limitation any default
by Carrier under the Ground Lease.
3. Covenants of Tower Company. Tower Company covenants that:
(a) Tower Company hereby assumes the Ground Lease, and all of Carrier's
duties and obligations under the Ground Lease, arising subsequent to the date
hereof and Tower Company
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<PAGE>
hereby agrees to promptly and faithfully perform all of such duties and
obligations under the Ground Lease.
(b) Tower Company agrees to indemnify and to forever defend and hold
harmless Carrier from and against any and all loss, cost, damage and expense
ever suffered or incurred by Carrier by reason of any act or omission of Tower
Company under the Ground Lease on or after the date hereof, including, without
limitation any default by Tower Company under the Ground Lease.
4. Master Lease. This Assignment is being executed pursuant to the
terms of a Master Build To Suit and Lease Agreement (the "Master Lease") and in
the event that there is a conflict between the terms and conditions of the
Master Lease, this Assignment, the terms and conditions of this Assignment shall
control. This Assignment shall remain subject to the remaining terms and
conditions of the Master Lease.
IN WITNESS WHEREOF, Tower Company and Carrier have signed this
Agreement as of the date and year first above written.
CARRIER: TOWER COMPANY:
TRITEL COMMUNICATIONS, INC. AMERICAN TOWER, L.P.
BY: ATC GP, INC.
ITS: SOLE GENERAL PARTNER
By: By:
--------------------------------- ---------------------------------
Name: Jerry M. Sullivan, Jr. Name:
------------------------------- -------------------------------
Title: Executive Vice-President Title:
------------------------------ ------------------------------
36
<PAGE>
EXHIBIT "A"
LEGAL DESCRIPTION OF THE PROPERTY
37
<PAGE>
EXHIBIT "B"
LEGAL DESCRIPTION OF EASEMENTS
38
<PAGE>
EXHIBIT "C"
COPY OF GROUND LEASE
39
<PAGE>
EXHIBIT "D"
COPY OF EASEMENTS, IF ANY
40
<PAGE>
EXHIBIT "E"
ESTOPPEL CERTIFICATE
THIS INSTRUMENT is given as of this ___ day of ____________________,
_____, by ______________________ ("Lessor") to American Tower, L.P., a Delaware
limited partnership, ("Assignee" or "Tower Company").
RECITALS
A. Lessor entered into a Lease Agreement or similar agreement with
_________ (____) numbers of addenda attached thereto, (collectively, the "Prime
Lease") dated as of the ______ day of _____________, ________ with Tritel
Communications, Inc., a Delaware corporation ("Lessee").
B. Lessee desires to assign to Assignee its interest in the Prime
Lease.
C. Assignee seeks Lessor's acknowledgment, as of the date of execution
of this Instrument, of certain matters affecting the Prime Lease.
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, intending to be legally bound:
1. Lessor's Estoppel Certificate. Lessor hereby certifies, with the
understanding that Assignee is relying upon the statements made herein, the
following:
a. The Prime Lease with _____ number of addenda constitutes the entire
agreement between the parties with respect to the Premises. The Prime Lease has
not been amended and there are no other agreements between Lessor and Lessee
with respect to the property or the easements which are described in the Prime
Lease.
b. The Prime Lease is in full force and effect in accordance with its
terms. Neither Lessee nor Lessor is in default under any of the terms of the
Prime Lease, and Lessor has not received actual or constructive notice of the
existence of any event which, with the passage of time or the giving of notice
or both, would constitute a default under the Prime Lease.
c. All applicable Prime Lease fees and rent (if any) and other charges
and payments due Lessor from Lessee under the Prime Lease have been paid in full
through the date hereof (except reimbursements for real estate taxes, insurance,
utilities or other reimbursements, if any, due for fiscal periods to the extent
not yet payable).
2. Consent. Lessor hereby acknowledges the right of Lessee to assign
the Prime Lease to Assignee and agrees that all terms of the Prime Lease shall
be in full force and effect between Lessor and Assignee as if Lessor and
Assignee were the original parties to the Prime Lease and that such assignment
shall not violate the terms of the Prime Lease, will not create or cause the
Assignee to be liable for any rent in excess of $_________ per month during the
Initial Term or be considered a sublease under the terms of the Prime Lease or
any addenda thereto.
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<PAGE>
3. Release. Lessor, with the intention of binding itself and its
successors and assignees, expressly forever releases and discharges Lessee and
its successors and assigns from all claims, demands, actions, grievances,
controversies, contracts, promises, agreements, causes of action, in both law
and equity, judgments and executions, damages of whatever nature, past or
present, known and unknown, that it ever had, or now has, known or unknown, or
that anyone claiming through or under Lessor may now have or claim to have,
against Lessee which arise from the Prime Lease, but no further or otherwise.
4. Reliance. Lessor understands that Assignee and Lessee are relying on
the information contained in this Instrument, and agrees that Assignee and
Lessee may rely on this information, for purposes of determining whether to
consummate their transaction. Further, Assignee's and Lessee's subsidiaries,
affiliates, legal representatives and successor and assigns may rely on the
contents of this Instrument. A facsimile of this instrument delivered to
Assignee by telecopier shall be deemed an original for all purposes.
5. Notice; Non-Disturbance. Assignee intends to grant a sub-leasehold
interest to Lessee pursuant to a sublease dated the ______ day of _______,
______ (the "Sublease"). Lessor shall give notice to Lessee at the same time
that Lessor gives notice to Assignee of any default under the Prime Lease, and
Lessor shall accept a cure of any such default from Lessee on Assignee's behalf.
In such case, Lessee shall be entitled to reimbursement from Assignee of any
amount paid or obligation incurred in respect thereof. So long as the Lessee is
not in default under the Sublease beyond any applicable grace or cure period,
Lessee shall be permitted quiet enjoyment of the Premises under the Sublease
notwithstanding any termination or expiration of the Prime Lease and
notwithstanding any termination or expiration of the Prime Lease, Lessor agrees
at the request of the Lessee, to honor the terms and conditions of the Sublease
for the remainder of the term thereof and any renewal terms. Lessee agrees, at
the request of Lessor to attorn to the Lessor upon the terms and conditions of
the Sublease for the remainder of the term thereof (whether original or renewal)
and any renewal terms, and that the Sublease shall continue in full force and
effect as if the Lessor were the sublandlord under the Sublease notwithstanding
the expiration or termination of the Prime Lease.
6. Notices. Any Notices to be received by Assignee, Lessee or Lessor
under the Prime Lease, the Sublease, or this Estoppel Certificate shall be
deemed properly given if marked to Assignee, Lessor or Lessee with proper
postage or sent via a reputable overnight carrier to the following address:
Tower Company:
-----------------------------------
-----------------------------------
-----------------------------------
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<PAGE>
With a copy to:
-----------------------------------
-----------------------------------
-----------------------------------
TO LESSEE: Tritel Communications, Inc.
112 E. State Street
Suite B
Ridgeland, MS 39157
Attention: Ken Harris
IN WITNESS WHEREOF, Lessor and Assignee have executed this Instrument
as of the date set forth above.
LESSOR:
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
TOWER COMPANY:
AMERICAN TOWER, L.P.
BY: ATC GP, INC.
TITLE: SOLE GENERAL PARTNER
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
43
<PAGE>
ATTACHMENT "II"
THIS INSTRUMENT PREPARED BY: SITE NAME: INDEXING
INSTRUCTIONS ---------------------
SITE ID:
- ---------------------------------- -----------------------
- ----------------------------------
- ----------------------------------
- ----------------------------------
- ----------------------------------
Memorandum of Assignment of Prime Lease
This memorandum evidences that an assignment was made and entered into by
written Assignment of Prime Lease (the "Assignment") dated __________, 1999,
between AMERICAN TOWER, LP, a Delaware limited partnership and TRITEL
COMMUNICATIONS, INC., a Delaware corporation("Carrier")..
Such Agreement provides in part that Carrier assigns to, and Carrier does hereby
assign to Tower Company that certain Option and Lease Agreement or similar lease
agreement (the 'Lease) dated ___________ ,for the lease of real property (the
"Property") located in _________ County, in the state of ____________, which
Property is more particularly described on Exhibit "A" attached hereto and made
a part hereof, a memorandum (the "Memorandum") of which lease is of record in
_____________________________ in the _________________________ office for
recording real property records in the __________________ County of the state of
____________________. Carrier hereby assigns the Lease and Memorandum of Lease
to the Tower company pursuant to the terms of the Assignment.
IN WITNESS WHEREOF, the parties have executed this Memorandum as of the day and
year first above written.
TOWER COMPANY
AMERICAN TOWER, L.P.
BY: ATC GP, INC.
TITLE: SOLE GENERAL PARTNER
By:
-----------------------------------
Its:
----------------------------------
Address:
------------------------------
- --------------------------------------
44
<PAGE>
CARRIER
TRITEL COMMUNICATIONS, INC.
By:
-----------------------------------
Its:
----------------------------------
Address:
------------------------------
- --------------------------------------
45
<PAGE>
[ACKNOWLEDGEMENTS]
46
<PAGE>
EXHIBIT "A"
REAL PROPERTY DESCRIPTION
OF PROPERTY LEASED
47
<PAGE>
ATTACHMENT III
SITE LEASE AGREEMENT
THIS SITE LEASE AGREEMENT ("SLA") is executed this ___ day of
____________________, _______, by and between AMERICAN TOWER, L.P., a Delaware
limited partnership ("Tower Company ") and TRITEI COMMUNICATIONS, INC.
("Carrier").
WHEREAS, on the ____ day of ___________, ___, Tower Company and Carrier
entered into that certain Master Build To Suit and Lease Agreement ("Master
Lease") which provides for the execution of individual SLAs for each Site owned
by Tower Company upon which Carrier desires to mount certain antenna, structures
and other equipment.
NOW THEREFORE, for [CONFIDENTIAL TREATMENT REQUESTED] and other good
and valuable consideration, the legal receipt and sufficiency of which is hereby
mutually acknowledged and agreed upon, the Tower Company and the Carrier hereby
agree as follows:
1. DEFINED TERMS. Any terms not defined herein shall have the meaning
set forth in the Master Lease.
2. SITE. Subject to the terms of the Master Lease, Tower Company hereby
leases and grants to Carrier and Carrier hereby leases from and accepts from
Tower Company space to install, maintain, operate, upgrade and remove Carrier's
wireless communications equipment and appurtenances on the tower owned by Tower
Company ("Tower Facilities"), which is shown in the location shown n Exhibit
"B", including antennas and microwave dishes between the heights of
_____________ and ______________________ above ground level on the Tower
Facilities and which is located on certain real property leased by Tower Company
more particularly described in Exhibit "A" attached hereto ("Property"); and to
install, maintain, operate and remove Carrier's compound and related devices
(including, but not limited to emergency generators, equipment shelters,
equipment cabinets, all necessary test equipment and any temporary construction
materials) owned by Carrier on a _____________ hundred (__)square foot portion
of the Property at a location to be agreed upon in writing between Tower Company
and Carrier, which is shown as the cross hatched area shown on Exhibit "B".
Tower Company has granted and hereby grants unto Carrier for the Initial Term
and any Renewal Term an easement for ingress, egress and utilities during the
term of the Master Lease over the property described in Exhibit "C" attached
hereto ("Easement") (the space occupied by Carrier on the Property and the
Tower, all cabling, wiring, conduit, etc. to and from the Tower and to and from
Carrier's Equipment, and the Easement hereinafter shall be referred to
collectively as the "Premises") (The Tower Facilities, Property and Easement
shall constitute and hereinafter be referred to and known as the "Site"). The
Site is more commonly known to Tower Company as the __________ Site. The Site is
more commonly known to Carrier as the ___________ Site.
3 COMMENCEMENT DATE. The Commencement Date of this SLA and the Rent
payable hereunder are defined in Attachment VI to the Master Lease. Carrier and
Tower Company shall execute a letter agreement which shall be attached to this
SLA confirming the calendar date which the parties understand to be the
Commencement Date for each SLA.
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<PAGE>
4 EQUIPMENT. A description of the equipment, antennae, mounting height
of the antenna and other personal property of Carrier which Carrier intends to
locate on the Site ("Carrier's Equipment") is described in Exhibit "D" attached
hereto. Carrier will not install any equipment on the Premises which is not
described in Exhibit "D" without Tower Company's prior, written consent, which
consent shall not be unreasonably withheld, delayed or conditioned. Tower
Company and Carrier acknowledge and agree that so long as Tower Company approves
any substituted, additional or altered equipment, which approval shall not be
unreasonably withheld, delayed or conditioned and any additional or substituted
equipment does not increase the wind load or structural burden upon the Tower
Facilities, does not increase the space upon the Tower Facilities or the ground
space upon the Site, and does not create any technical or radio frequency
interference. with any existing equipment located upon the Tower Facilities at
the time of the request for such modification or substitution ) and does not
increase the effective isotropically radiated power emitted from the antennae
located upon the Carrier Premises in excess of one thousand six hundred forty
(1640) watts, Carrier may substitute, add, alter, modify and replace Carrier's
Equipment described in Exhibit "D" upon the Tower Facilities.
5. GROUND LEASE. A copy of the Ground Lease for this Site is attached
hereto as Exhibit "E".
6. MARKETABLE TITLE. The Tower Company holds good and marketable title
to its interest in the Site.
7. EFFECT OF AGREEMENT. Tower Company and Carrier acknowledge that the
Master Lease is the controlling agreement between the parties with regard to
Carrier's lease of the Site. This SLA is intended to supplement the Master Lease
and fulfill the requirements of paragraph 1 of the Master Lease. In the event of
any conflict between the terms of the Master Lease and this SLA, the terms and
provisions of this SLA shall control.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first set forth above.
TOWER COMPANY
AMERICAN TOWER, L.P.
By: ATC GP, Inc.
Title: Sole General Partner
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
CARRIER:
TRITEL COMMUNICATIONS, INC.
By:
--------------------------------
Name: Jerry M. Sullivan, Jr.
Title: Executive Vice President
49
<PAGE>
EXHIBIT "A"
LEGAL DESCRIPTION OF THE PROPERTY
50
<PAGE>
EXHIBIT "B"
SURVEY OR MAP OF THE SITE WITH LOCATION OF TOWER AND
GROUND SPACE SHOWN AND GROUND SPACE CROSS-HATCHED
51
<PAGE>
EEXHIBIT "C"
LEGAL DESCRIPTION OF EASEMENTS
52
<PAGE>
EXHIBIT "D"
EQUIPMENT LIST
53
<PAGE>
EXHIBIT "E"
GROUND LEASE
54
<PAGE>
ATTACHMENT IV
This instrument Prepared By: Site Name: Site ID: Indexing Instructions
---- ----
- ---------------------------- ---------------------
- ---------------------------- ---------------------
- ---------------------------- ---------------------
MEMORANDUM OF SITE LEASE AGREEMENT
This memorandum evidences that a lease was and hereby is made and entered into
by written Site Lease Agreement dated ___________, 19___, between AMERICAN
TOWER, L.P., a Delaware limited partnership ("Tower Company") and TRITEL
COMMUNICATIONS, INC., a Delaware corporation ("Carrier").
Such Agreement provides in part that Tower Company leases to Carrier and Tower
Company does hereby lease to Carrier space upon a tower (which tower is located
as shown on Exhibit "B") (the "Tower") between the heights of _______ and
_______ above ground level, which Tower is located upon the real property
located at ________, City of ________, County of ________, State of _______,
which real property is described in EXHIBIT A attached hereto (the "Site" or the
"Property") and certain space ("Ground Space") upon the Property which is
described on Exhibit "B" or which is shown as the cross-hatched area on a plat
or survey attached hereto as Exhibit "B" with runs for cable, wiring, conduit,
etc. to the Tower and the Ground Space and with a grant of and Tower Company
hereby grants a non-exclusive easement for unrestricted rights of access thereto
and to electric and telephone facilities which are described on Exhibit "A"
and/or shown on Exhibit "B" such lease and easement to be for a term of five (5)
years commencing on _______, 19_____, which term is subject to four (4)
additional five (5) year extension periods by Carrier. Tower Company has
obtained its interest in the Property pursuant to the terms of a option and
lease agreement or similar document between ______________________ as the
landlord and ______________________ as the tenant, a memorandum of which is of
record in __________________, in the office for recording real property records
in the ________________ County of the state of ____________________ and Tower
Company has obtained its interest in any easements pursuant to the terms of an
easement or similar document between _____________________ and
____________________, which easement is of record in ___________________ in the
office for recording real property records in the __________________ County of
the state of ___________________________.
IN WITNESS WHEREOF, the parties have executed this Memorandum as of the day and
year first above written. CARRIER:
Tritel Communications, Inc.
BY:
--------------------------------------
NAME: Jerry M. Sullivan, Jr.
------------------------------------
TITLE: Exec. Vice President/Chief
Operating Officer
-----------------------------------
55
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ADDRESS: P.O. Box 1348
------------------------------------
Ridgeline, MS 39158-1348
------------------------------------
PHONE NUMBER: 601-362-2200
DATE:
---------------------------------------
56
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TOWER
COMPANY:
-----------------------------------
AMERICAN TOWER, L.P.
By: ATC GP, Inc.
Its: Sole General Partner
BY:
-----------------------------------
NAME:
-----------------------------------
Title:
-----------------------------------
ADDRESS:
-----------------------------------
PHONE NUMBER:
-----------------------------------
TAX ID:
-----------------------------------
DATE:
-----------------------------------
57
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EXHIBIT "A"
Property
Attached hereto Metes and Bound Description of the Real Property
58
<PAGE>
EXHIBIT "B"
GROUND SPACE:
ATTACH HERETO THE SITE PLAN FOR THE SITE WITH THE GROUND SPACE CROSS HATCHED AND
THE TOWER IDENTIFIED.
59
<PAGE>
ATTACHMENT V
SCHEDULES WITH MARKET SPECIFIC TERMS INCLUDING,
WITHOUT LIMITATION, REIMBURSEMENT OF PRE-DEVELOPMENT COSTS,
RENT, AND IF APPLICABLE, SCHEDULES FOR COMPLETION
OF TOWER FACILITIES AND DELIVERIES
No Schedules attached to this Attachment shall be valid unless it is
signed by both Duly Authorized Representatives of Tower Company and Carrier.
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ATTACHMENT VI
NOTICE OF COMPLETION OF TOWER FACILITIES
Carrier
- ------------------------
- ------------------------
- ------------------------ -----------------
Re: Notice of Completion of Tower Facilities ("Notice") for
Site #_______ ("______________ Site")
Dear
On the _____ day of _________________, ______ the Tower Facilities at the
_________ Site were completed in accordance with the terms and conditions of the
Master Lease between Tower Company and Carrier. Pursuant to Paragraph 3.9 of the
Master Lease, Carrier has a period of fifteen (15) days after the date of this
Notice of Completion to provide a Punch List of items to be completed by Tower
Company in order to render the Tower Facilities completed in accordance with the
Plans and Specifications in the opinion of Carrier.
Sincerely,
--------------------------------
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ATTACHMENT VII
____________, 19____
- ------------------------------
- ------------------------------
- ------------------------------
Re: Site Lease Agreement
Site: ____________________
Dear _________________:
Tritel Communications, Inc. ("Carrier") and ________________ (the "Tower
Company") entered into a Site Lease Agreement for the above-captioned site. The
Site Lease Agreement provides that Carrier and Tower company shall execute a
letter agreement which shall be attached to the SLA confirming the calendar date
which the parties understand to be the Commencement Date for each SLA.
Carrier and Tower Company agree that the Commencement Date for the above
referenced site is _____________________.
By countersigning this letter, Tower Company acknowledges and agrees to the
Commencement Date listed above for the Site. This letter shall constitute an
amendment to the Site Lease Agreement.
TRITEL COMMUNICATIONS, INC.
By:
------------------------------
Its:
-----------------------------
Acknowledged and Agreed to this ____ day of ________________, ____.
AMERICAN TOWER, L.P.
By: ATC GP, Inc.
Title: Sole General Partner
By:
------------------------------
Its:
-----------------------------
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<PAGE>
SCHEDULE 1 TO ATTACHMENT "VI"
OF MASTER LEASE BETWEEN
TOWER COMPANY AND CARRIER
MARKET SPECIFIC TERMS
1. CARRIER MARKET: Huntsville Market - This Schedule shall apply to the
Huntsville Market only.
2. NUMBER OF SITES: --
(a) Carrier shall and hereby grants to Tower Company the right to
develop, construct and lease a minimum of twenty (20) Tower Facilities in the
Huntsville Market more particularly described in Exhibit A attached hereto. In
the event that Carrier does not require the construction of 20 new Tower
Facilities in the Huntsville Market during the 1999 calendar year, all of the
new Tower Facilities which Carrier must construct and install in the Huntsville
Market in the 1999 calendar year, which Carrier intends to assign to a third
(3rd) party, shall be constructed, developed and owned by Tower Company. In the
event that the Tower Company elects not to accept an Applicable Tower Site or
otherwise terminates its obligations in regards to an Applicable Tower Site or
does not complete an Applicable Tower Site the total number of Tower Facilities
to be constructed in the Huntsville Market by Tower Company will be reduced by
the number of Applicable Tower Sites rejected, terminated or not otherwise
completed. In the event that the Carrier does not initially assign the Tower
Company twenty (20) Tower Facilities in the Huntsville Market during the 1999
calendar year, the Carrier shall assign to the Tower Company Tower Facilities in
the Huntsville Market or other Carrier Markets to the extent available in the
1999 calendar year and/or the first quarter of the 2000 calendar year so that
the cumulative number of sites in this Schedule shall not be diminished.
(b) In the event that the Tower Company rejects or terminates its
obligations or otherwise fails to complete or does not otherwise complete and
construct twenty percent (20%) or more of the Tower Facilities and installation
of the Carrier Equipment upon the Applicable Tower Sites in the Huntsville
Market, such actions shall constitute an Event of Default under the Master Lease
and in addition to any other remedies at equity or law or in the Master Lease
which Carrier may have, Carrier shall have the right to terminate the Master
Lease upon five (5) days written notice and to require the Tower Company to
assign or reassign any or all Ground Leases under the applicable Tower Sites in
the Huntsville Market to Carrier or its assignee, to assign or reassign any or
all Pre-Development Information to Carrier or its assignee and to assign or
reassign any other easements, leases, licenses, subleases, contracts, suppliers
contracts or agreements regarding or related to any or all of the Applicable
Tower Sites in the Huntsville Market to the Carrier or its assignee. In addition
thereto Carrier shall have the right to require the Tower Company to convey any
other property (real or personal, tangible or intangible) related to or
connected to the Applicable Tower Sites in the Huntsville Market, including
without limitation, the Tower Facilities, any pads, utilities, wiring, cabling,
connections, etc. to the Carrier or its assignee. The Carrier or its assignee
shall reimburse the Tower Company for the fair market value of the tower and the
related accessories, but no further or otherwise.
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3. PRE-DEVELOPMENT COSTS:
(a) For each Tower Site for which Carrier has obtained Pre-Development
Information. Tower Company shall reimburse Carrier up to the following amounts,
but no more than the following amounts for delivery of the Pre-Development
Information for the Applicable Tower Site from the Carrier to the Tower Company
within ten (10) days of the execution of the Assignment based upon the following
milestones:
MILESTONE 1: Delivery of Candidate Site Report
- Selection Form [CONFIDENTIAL TREATMENT REQUESTED]
o Identification of 3 leasable, zonal and constructable candidates
o Coordination of site visit
o Submission of reports including but not limited to Zoning Summary,
Permit Summary, site sketch
MILESTONE 2: Delivery of Lease Package $[CONFIDENTIAL TREATMENT REQUESTED]
o Submission of pre-approved, executed lease, including any access
easements, rights-of-way, etc. that may be required.
o Site Package, Site Survey
MILESTONE 3: Delivery of Title and Title Clearance Items [CONFIDENTIAL TREATMENT
REQUESTED]
o Submission of Title Report
o Submission of evidence curative work complete
MILESTONE 4: Delivery of Zoning Decision [CONFIDENTIAL TREATMENT REQUESTED]
o Submission of zoning application and verification of attendance
at required zoning meetings
o Submission of verification of zoning decision
MILESTONE 5: Building Permit Ready [CONFIDENTIAL TREATMENT REQUESTED]
o Coordination of NEPA, FCC, Environmental Assessments,
Geotechnicals as required
o Receipt of Building Permit and any other permits required for
construction
TOTAL PRICE [CONFIDENTIAL TREATMENT REQUESTED]
4. SCHEDULE OF COMPLETION:
(a) Subject to the force majeure provisions of Section 5.5(e) of the
Master Lease, Tower Company shall deliver to the Carrier all of the
Pre-Development Information and the Ground Lease for the Applicable Tower Sites
by the dates according to the following Schedule:
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June 1, 1999 Four (4) Tower Sites
July 1, 1999 Five (5) Tower Sites
August 1, 1999 Six (6) Tower Sites
August 15, 1999 Five (5) Tower Sites
(b) Tower Company shall deliver all Tower Sites fully completed with
Carrier's Equipment completely installed according to the following schedule,
excepting those Tower Sites delayed by Carrier actions or inaction's or those
Tower Sites delayed beyond Tower Company's control, including but not limited to
Governmental Approvals, moratoria, FAA or force majeure:
July 15, 1999 Four (4) Tower Sites
August 15, 1999 Five (5) Tower Sites
September 15, 1999 Six (6) Tower Sites
October 1, 1999 Five (5) Tower Sites
(c) Tower Company shall diligently exercise its best efforts to
construct and deliver all of the Tower Sites in the clusters which have been
developed by Carrier for the best system optimization. Carrier acknowledges and
agrees that Site Number 108005-RIB constitutes a search ring in an area where
the property is owned by the State of Alabama. Tower Company and Carrier
acknowledge and agree that the Tower Company's failure to obtain a lease
executed by the State of Alabama within the time periods provided in this
Agreement and this Schedule shall constitute an action beyond Tower Company's
control and an act prohibited by force majeure.
5. RENT:
(a) Initial Term. As consideration for the use and occupancy of the
Premises under any SLA during the Initial Term, Carrier shall pay Tower Company
or such entity as Tower Company may designate from time to time, on the first
day of each calendar month during the Initial Term, the sum of [CONFIDENTIAL
TREATMENT REQUESTED] per month. During the initial term of the Master Lease, the
rent shall be increased on each anniversary of the Commencement Date by
[CONFIDENTIAL TREATMENT REQUESTED] annually. Rent shall be payable on the first
day of each month in advance to Tower Company at Tower Company's address as
specified in Paragraph 5.1 of the Master Lease. In the event that the
Commencement Date is other than the first day of a calendar month, Rent shall be
prorated over the number of days remaining in the month in which the SLA
commenced and shall thereafter be paid on the first day of each calendar month.
Tower Company and Carrier shall execute a letter agreement to attach to each SLA
to confirm the amount of the Rent.
(b) Renewal Terms. In the event that Carrier elects to renew an SLA as
provided in paragraph 4.5 of the Master Lease, Rent during the first Renewal
Term of the SLA shall be the same amount as the Rent during the last year of the
Initial Term of the Master Lease. Rent shall be increased by [CONFIDENTIAL
TREATMENT REQUESTED] over the Rent accruing under the immediately prior term of
the SLA, commencing with the beginning. of the Second Renewal Term of the SLA.
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6. INSTALLATION OF CARRIER EQUIPMENT. Carrier and Tower Company acknowledge and
agree that Tower Company shall be obligated to and Tower Company shall provide
all materials, equipment and supplies for the installation and construction of
and shall install and construct all Tower Facilities and install the Carrier's
Equipment ("Carrier's Equipment Installation") except for the placement and
setting of the cabinet upon the Carrier Premises and for the purchase and
delivery of the equipment and items described in Section 6(c), which
installation shall include without limitation, the following:
(a) INSTALLATION. Tower Company shall perform all operations necessary and
required to build sites and install Personal Communications Services ("PCS")
cellular base transmission equipment, including without limitation:
(i) Tower Company shall furnish all labor, supervision, materials and
equipment (other than materials and equipment specified as furnished by others)
and perform all operations necessary and required to build sites and install
Personal Communications Services ("PCS") cellular base transmission equipment.
(ii) Tower Company shall install the Carrier Equipment upon the Tower
Facilities in accordance with their approved construction drawings,
specifications (except for those Tritel furnished specifications) and other
contract documents. Work includes but is not limited to the following:
(A) Preparation of raw land sites by clearing, grubbing and
grading. Construction of access roads as required. Preparation of
building, structures, or roofs in accordance with all legal
requirements and the Carrier Specifications for installing the Carrier
Equipment.
(B) Install electrical work required including raceways, cable
trays, boxes, underground ducts, utility structures, wires, cables,
wiring devices and related work necessary for a functional PCS site.
(C) Installation of framing for support of Carrier Equipment.
(D) Installation of equipment foundations.
(E) Seal penetrations through existing and new construction as
required by local codes and ordinances.
(F) Field quality control and inspections.
(G) Performance of sweep test and provide results in accordance
with project requirements contained in Specification No.
24085-002-3PS-EFW0-00001 and provide test results for Carrier review
and approval.
(H) Perform ground testing for each site and provide results in
accordance with project requirements contained in Specification No.
24085-000-3PS-EG00-G0001 and provide test results for Carrier review
and approval.
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(I) Receipt and storage of Carrier/third party materials, as
required.
(J) Provide concrete testing for all concrete work as required.
(K) Provide all inspections required by local and state
jurisdictions.
(L) Obtain and pay for all permits including special permits, as
required.
(M) Tower Company shall be responsible for obtaining FAA and FCC
permits, applications and approvals.
(N) Tower Company shall be responsible for any AM De-Tuning if
required.
(iii) The Carrier Equipment Installation shall conform to the
construction drawings and specifications, and applicable federal, state, county,
city, local laws, ordinances, rules and regulations of the authorities having
jurisdiction and the Carrier Specifications.
(iv) Tower Company shall furnish all labor, supervision, construction
equipment, transportation, licenses, taxes, safety supplies, consumable
supplies, all materials and each and every item of expense required to complete
the Carrier's Equipment Installation, except the items described in Section 6c
of this Schedule.
(v) Tower Company shall investigate, review, and if applicable, obtain
the proposed rights-of-way for ingress and egress from public and private roads
for clearances, restrictions, bridge load limit, bond requirements, permits (and
waivers of any of the foregoing if necessary) and other limitations that may
affect transportation and storage of Carrier's and Tower Company's equipment,
materials and manpower to or for the Applicable Tower Site.
(vi) Tower Company shall obtain and pay for all work permits required
by governmental authorities and other permits required for Tower Company's
construction pertains including but not limited to Tower Company's licenses,
construction bonds, transportation, equipment, labor and/or other general
permits.
(b) INSPECTION AND ACCEPTANCE
(i) Carrier Equipment Installation shall be subject to the inspection
and approval of Carrier and its agent, such approval not to be unreasonably
withheld, delayed or conditioned, and/or authorities or agencies having
jurisdiction.
(ii) Tower Company shall schedule the work upon the Carrier Equipment
Installation and provide notification to Carrier to comply with any and all
requirements for inspections including, but not limited to, sweep testing,
ground testing and final inspection.
(iii)Tower Company shall provide verification that antennae are aligned
as required by the design drawings and are within the tolerance.
(iv) Tower Company shall coordinate and schedule final inspection walk
down inspections with Tritel and/or its' agents.
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(c) CARRIER SUPPLIED EQUIPMENT AND MATERIAL
Equipment and Materials supplied by the Carrier will be delivered to Tower
Company on a just in time basis to meet scheduled construction start dates, to
the Applicable Tower Sites or Tower Company's facilities as chosen by Tower
Company. Tower Company shall receive, document, store, protect and transport all
materials as required. The receiving notices will be furnished to Carrier within
24 hours of delivery to Tower Company. The following equipment will be furnished
by Carrier, but no further or otherwise:
(i) Antenna Supports/Mounts
(ii) Antennas, including downtilt brackets
(iii) Coax Cable
(iv) Coax Connectors
(v) TMAS
(vi) Surge Suppressors
(vii) Ericsson equipment frames
Tower Company shall provide a bill of material for each Applicable Tower Site
five working days before the materials/equipment are needed for installation.
Tower Company is also responsible for notification of electrical installation
and termination of equipment with Carrier in order to coordinate the
installation of the cabinet and related equipment by Ericcson.
(d) DELIVERY. Tower Company will be required to provide the following
documentation to Carrier at the completion of the Carrier Equipment Installation
for each Applicable Tower Site:
Sweep test results
Grounding test results
Concrete test results
All other test results and reports
Pictures of the ground ring, ground rods before filling trenches with each
A completed and signed off Punch list from the final walkdown
(e) PLANNING AND SCHEDULING. Tower Company will conduct regular process review
meetings with Carrier and/or its agent and provide input into the project
database to report the construction and installation status.
(f) AS BUILT DRAWINGS. As Built Drawings - Tower Company will provide as-built
drawings to Carrier of each Applicable Tower Site which detail all pertinent
information relating to Carrier's equipment and antenna system at the Applicable
Site and shall substantially conform to the specifications supplied by CARRIER
g) PUNCH LIST & ACCEPTANCE - Upon final completion of the Carrier's Equipment
Installation at each Applicable Tower Site by Tower Company in accordance with
the provisions of this Agreement, Tower Company shall request, in writing, final
inspection of the Applicable Tower Site. Carrier will inspect the Carrier's
Equipment Installation within fifteen (15) business
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days of the receipt of Tower Company's notice that the Carrier Equipment
Installation is complete. Within ten (10) business days of inspection, Carrier
will either provide a signed writing evidencing final acceptance of the Carrier
Equipment Installation or, through the use of a punch list form, advise Tower
Company of the portions of the Carrier Equipment Installation that are defective
or incomplete or of obligations that have not been fulfilled but are required
for final acceptance. Tower Company shall complete any unfinished or defective
portion of the Carrier Equipment Installation which are necessary to install and
operate Carrier's equipment within ten (10) business days following issuance of
the punch list. With respect to other punch list items, Tower Company shall
complete all unfinished or defective portions of the Carrier Premises within
fifteen (15) calendar days following issuance of the punch list.
h) TRADE AND CONSTRUCTION PERMITS - Tower Company shall obtain, at its expense,
all necessary local and municipal permits, licenses, inspections, certificates
and approvals necessary to complete the Carrier Equipment Installation, and
shall ensure compliance with all state environmental laws. Tower Company shall
pay all Rents for such permits, licenses, inspections, certificates or approvals
to the appropriate government body or other entity.
i) LIENS. Tower Company shall keep the Tower Facilities and the Carrier
Equipment free of all involuntary liens and claims, including without
limitation, (other than liens and claims arising by, through or under Carrier)
liens and claims (a) arising out of or related to the performance of the
construction, all liens and claims of any contractor, subcontractor, laborer,
mechanic or materialman for labor performed or material furnished in connection
with the performance of the construction; (b) liens or claims arising from taxes
or assessments, except for personal property taxes which may be assessed against
Carrier's Equipment, and except for liens for taxes or assessments which are not
yet due and payable; or (c) liens or claims which may impair Carrier's interest.
7. REPRESENTATIONS - Notwithstanding any other provision contained in this
Schedule or any other terms of this Agreement, the following terms and
conditions shall apply with respect to the materials, equipment and services
provided hereunder:
a) Tower Company, its agents, subcontractors, and employees shall
perform the Carrier Equipment Installation as independent
contractors, and not as agents, partners, joint venturers or
employees of Carrier. Tower Company shall supervise and direct the
Carrier Equipment Installation, using the care and shall
ordinarily used by members of Tower Company's profession
practicing under similar conditions at the same time and in the
same geographic area, and Tower Company shall be solely
responsible for all construction means, methods, techniques,
sequences and procedures and for coordinating all portions of the
Carrier Equipment Installation.
b) Unless otherwise specifically provided in the Carrier Equipment
Installation, Tower Company shall provide and pay for all labor,
supervision, materials, construction surveys and layout,
equipment, tools, construction equipment and machinery, water,
heat, utilities, transportation, and other facilities and services
necessary for the proper execution and completion of the
Applicable Tower Site consistent with the terms of this Schedule
and the Agreement.
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c) Tower Company shall at all times enforce strict discipline and
good order among its employees.
d) Tower Company hereby represents and warrants to Carrier that all
materials and equipment incorporated in the Applicable Tower Site
will be new unless otherwise requested in writing by Tower Company
and agreed to in writing by Carrier prior to their use and all
such materials and equipment shall be of good quality. Tower
Company further represents and warrants that the Carrier's
Equipment Installation to be performed under this Agreement, and
all workmanship, materials and equipment provided, furnished, used
or installed in construction of the same, shall be safe,
substantial, good quality and durable construction in all
respects, and that all of the Carrier's Equipment installation
will be free from faults and defects and in conformance with the
terms of this Agreement. The warranty for the services provided by
Tower Company at each Applicable Tower Site shall be for a period
of Eighteen (18) months from the date of full acceptance of the
Site by Carrier (the "Warranty Period"). Tower Company represents,
warrants and agrees that the Carrier Equipment shall be
constructed and installed in a good and workmanlike manner and in
accordance with the plans and specifications for the installation
of the Carrier Equipment and all applicable federal, state and
local laws, ordinances, rules and regulations and shall be of good
quality, free from faults and patent defects.
e) Tower Company agrees to correct any defective portion of the
Applicable Tower Site or the Carrier Premises. If Tower Company
fails, after ten (10) days following written notice from Carrier:
(i) to commence and continue correction of such defective Carrier
Equipment Installation with diligence and promptness; (ii) to
perform the Carrier Equipment Installation; or (iii) to comply
with any other provision of this Agreement, Carrier may correct
and remedy any such deficiency in addition to any other remedies
it may have. Tower Company shall not be responsible for reasonable
delays caused by inclement weather that would delay a reasonable
contractor's performance of the installation of a wireless
antennae system substantially similar to the Carrier Equipment
Installation set forth herein.
f) Tower Company shall supervise and direct the Carrier Equipment
Installation on the Carrier Equipment (the "Carrier Equipment
Work"), using Tower Company's best skill and attention. Tower
Company shall be solely responsible for and have control over
construction means, methods, techniques, sequences and procedures
and for coordinating all portions of the Carrier Equipment Work on
the Tower Facilities under this Agreement excluding the placement
and setting of any cabinet or shelter and equipment contained
therein; and.
g) Tower Company shall enforce strict discipline and good order among
the employees and other persons carrying out this Agreement. Tower
Company shall not permit employment of unfit persons or persons
not skilled in tasks assigned to them; and
h) Tower Company shall provide Carrier (and its employees, agents and
contractors) access to the Carrier Equipment Work in preparation
and progress wherever located, provided that such access shall not
interfere with the Carrier Equipment Work; and
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i) Tower Company shall pay all royalties and license fees; shall
defend suits or claims for infringement of patent rights and shall
hold Carrier harmless from loss on account thereof, but shall not
be responsible for such defense or loss when a particular design,
process or product of a particular manufacturer or manufacturers
is required by Carrier unless Tower Company has reason to believe
that there is an infringement of patent.
j) Tower Company shall be responsible for initiating, maintaining and
supervising all safety precautions and programs in connection with
the performance of the Agreement. Tower Company shall take
reasonable precautions for safety of, and shall provide reasonable
protection to prevent damage, injury or loss to:
(1) employees on the Carrier Equipment Work, the Tower
Facilities or the Applicable Tower Site and other persons who
may be affected thereby;
(2) the Carrier Equipment Work, the Tower Facilities, the
Applicable Tower Site and materials and equipment to be
incorporated therein; and
(3) other property at the Applicable Tower Site or adjacent
thereto.
8. REIMBURSEMENT FOR INSTALLATION OF CARRIER EQUIPMENT. Carrier shall pay the
Tower Company [CONFIDENTIAL TREATMENT REQUESTED] ("Carrier Installation Rent")
for the installation of the Carrier Equipment as contemplated in Section 7 of
this Schedule.
9. NOTICE OF EXISTING APPLICABLE TOWER SITES. Notwithstanding the provisions
contained within the body of the Master Lease, Tower Company acknowledges that
Carrier has as of the date of this Agreement notified Tower Company of the
Applicable Tower Sites identified in Exhibit "A" to this Schedule (the "Existing
Applicable Tower Sites"). Within fifteen (15) business days from the date of
this Agreement, Tower Company will provide a Notice of Acceptance for or will
reject each such Applicable Tower Site. If Tower Company provides a Notice of
Acceptance for any such Applicable Tower Site, Tower Company shall reimburse
9. Carrier for the Pre-Development Costs associated with each accepted
Applicable Tower Site in accordance with this Schedule.
10. COMMENCEMENT DATE. The term "Commencement Date" shall mean the date when the
initial term of each SLA shall commence and shall be the date which is the later
of (i) the date that Tower Company completes installation of Carrier Equipment
on the Premises in the event that the Tower Company is installing Carrier's
Equipment on the Premises; or (ii) fifteen (15) days after Carrier has accepted
the Tower Facilities pursuant to Paragraph 3.7 of the Master Lease; or (iii) in
the event that Carrier has not accepted the Tower Facilities pursuant to
Paragraph 3.7 of the Master Lease, fifteen (15) days after the date that the
Tower Facilities are substantially complete and Carrier is able to operate the
Carrier Equipment upon the Tower Facilities in compliance with all laws, rules
and regulations; or (iv) October 18, 1999.
11. SCHEDULE IS MODIFICATION. This Schedule shall be added to and modify the
terms and conditions of the Master Lease and hereby is incorporated into the
terms of the Master Lease. In
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the event that there is a conflict or contradiction between the terms and
conditions of the Master Lease and this Schedule, the terms and conditions of
this Schedule shall control.
IN WITNESS WHEREOF, Tower Company and Carrier have signed this Schedule as of
the date and year first above written.
CARRIER: TOWER COMPANY:
TRITEL COMMUNICATIONS, INC. AMERICAN TOWER, L.P., A
DELAWARE LIMITED
PARTNERSHIP
BY: ATC GP, INC.
TITLE: SOLE GENERAL PARTNER
By: By:
------------------------------- -------------------------------
William S. Arnett
President Name:
-----------------------------
Title:
----------------------------
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SCHEDULE 2 TO ATTACHMENT "VI"
OF MASTER LEASE BETWEEN
TOWER COMPANY AND CARRIER
MARKET SPECIFIC TERMS
1. CARRIER MARKET: Montgomery Market - This Schedule shall apply to the
Montgomery Market only.
2. NUMBER OF SITES: --
(a) Carrier shall and hereby grants to Tower Company the right to
develop, construct and lease a minimum of fourteen (14) Tower Facilities in the
Montgomery Market. In the event that Carrier does not require the construction
of 14 new Tower Facilities in the Montgomery Market during the 1999 calendar
year, all of the new Tower Facilities which Carrier must construct and install
in the Montgomery Market in the 1999 calendar year, which Carrier intends to
assign to a third (3rd) party, shall be constructed, developed and owned by
Tower Company. In the event that the Tower Company elects not to accept an
Applicable Tower Site or otherwise terminates its obligations in regards to an
Applicable Tower Site or does not complete an Applicable Tower Site the total
number of Tower Facilities to be constructed in the Montgomery Market by Tower
Company will be reduced by the number of Applicable Tower Sites rejected,
terminated or not otherwise completed. In the event that the Carrier does not
initially assign the Tower Company fourteen (14) Tower Facilities in the
Montgomery Market during the 1999 calendar year, the Carrier shall assign to the
Tower Company Tower Facilities in the Montgomery Market or other Carrier Markets
to the extent available in the 1999 calendar year and/or the first quarter of
the 2000 calendar year so that the cumulative number of sites in this Schedule
shall not be diminished.
(b) In the event that the Tower Company rejects or terminates its
obligations or otherwise fails to complete or does not otherwise complete and
construct twenty percent (20%) or more of the Tower Facilities and installation
of the Carrier Equipment upon the Applicable Tower Sites in the Montgomery
Market, such actions shall constitute an Event of Default under the Master Lease
and in addition to any other remedies at equity or law or in the Master Lease
which Carrier may have, Carrier shall have the right to terminate the Master
Lease upon five (5) days written notice and to require the Tower Company to
assign or reassign any or all Ground Leases under the applicable Tower Sites in
the Montgomery Market to Carrier or its assignee, to assign or reassign any or
all Pre-Development Information to Carrier or its assignee and to assign or
reassign any other easements, leases, licenses, subleases, contracts, suppliers
contracts or agreements regarding or related to any or all of the Applicable
Tower Sites in the Montgomery Market to the Carrier or its assignee. In addition
thereto Carrier shall have the right to require the Tower Company to convey any
other property (real or personal, tangible or intangible) related to or
connected to the Applicable Tower Sites in the Montgomery Market, including
without limitation, the Tower Facilities, any pads, utilities, wiring, cabling,
connections, etc. to the Carrier or its assignee. The Carrier or its assignee
shall reimburse the Tower Company for the fair market value of the tower and the
related accessories, but no further or otherwise.
3. PRE-DEVELOPMENT COSTS:
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(a) For each Tower Site for which Carrier has obtained Pre-Development
Information. Tower Company shall reimburse Carrier up to the
following amounts, but no more than the following amounts for
delivery of the Pre-Development Information for the Applicable
Tower Site from the Carrier to the Tower Company within ten (10)
days of the execution of the Assignment based upon the following
milestones:
MILESTONE 1: Delivery of Candidate Site Report
- Selection Form [CONFIDENTIAL TREATMENT REQUESTED]
o Identification of 3 leasable, zonal and constructable candidates
o Coordination of site visit
o Submission of reports including but not limited to Zoning Summary,
Permit Summary, site sketch
MILESTONE 2: Delivery of Lease Package [CONFIDENTIAL TREATMENT REQUESTED]
o Submission of pre-approved, executed lease, including any access
easements, rights-of-way, etc. that may be required.
o Site Package, Site Survey
MILESTONE 3: Delivery of Title and Title Clearance Items
[CONFIDENTIAL TREATMENT REQUESTED]
o Submission of Title Report
o Submission of evidence curative work complete
MILESTONE 4: Delivery of Zoning Decision [CONFIDENTIAL TREATMENT REQUESTED]
o Submission of zoning application and verification of attendance
at required zoning meetings
o Submission of verification of zoning decision
MILESTONE 5: Building Permit Ready [CONFIDENTIAL TREATMENT REQUESTED]
o Coordination of NEPA, FCC, Environmental Assessments,
Geotechnicals as required
o Receipt of Building Permit and any other permits required for
construction
TOTAL PRICE [CONFIDENTIAL TREATMENT REQUESTED]
4. SCHEDULE OF COMPLETION:
(a) Tower Company and Carrier shall negotiate and reach a mutually
reasonable agreement which defines the schedule for delivery of the
Pre-Development Information and the Ground Leases and for the completion and
installation of the Tower Facilities in the Montgomery Market on or before May
31, 1999. In the event that the Carrier and the Tower Company cannot reach a
mutually reasonable agreement (which agreement shall not be unreasonably
withheld by the Carrier or the Tower Company) this Schedule 2 shall be null and
void and the Carrier and the Tower Company shall have no further obligation to
each other in the Montgomery Market or this Schedule.
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(b) Tower Company shall diligently exercise its best efforts to
construct and deliver all of the Tower Sites in the clusters which have been
developed by Carrier for the best system optimization.
5. RENT:
(a) Initial Term. As consideration for the use and occupancy of the
Premises under any SLA during the Initial Term, Carrier shall pay Tower Company
or such entity as Tower Company may designate from time to time, on the first
day of each calendar month during the Initial Term, the sum of [CONFIDENTIAL
TREATMENT REQUESTED] per month. During the initial term of the Master Lease, the
Rent shall be increased on each anniversary of the Commencement Date by
[CONFIDENTIAL TREATMENT REQUESTED] annually. Rent shall be payable on the first
day of each month in advance to Tower Company at Tower Company's address as
specified in Paragraph 5.1 of the Master Lease. In the event that the
Commencement Date is other than the first day of a calendar month, Rent shall be
prorated over the number of days remaining in the month in which the SLA
commenced and shall thereafter be paid on the first day of each calendar month.
Tower Company and Carrier shall execute a letter agreement to attach to each SLA
to confirm the amount of the Rent.
(b) Renewal Terms. In the event that Carrier elects to renew an SLA as
provided in paragraph 4.5 of the Master Lease, Rent during the first Renewal
Term of the SLA shall be the same amount as the Rent during the last year of the
Initial Term of the Master Lease. Rent shall be increased by [CONFIDENTIAL
TREATMENT REQUESTED] over the Rent accruing under the immediately prior term of
the SLA, commencing with the beginning of the Second Renewal Term of the SLA.
6. INSTALLATION OF CARRIER EQUIPMENT. Carrier and Tower Company acknowledge and
agree that Tower Company shall be obligated to and Tower Company shall provide
all materials, equipment and supplies for the installation and construction of
and shall install and construct all Tower Facilities and install the Carrier's
Equipment ("Carrier's Equipment Installation") except for the placement and
setting of the cabinet upon the Carrier Premises and for the purchase and
delivery of the equipment and items described in Section 6(c), which
installation shall include without limitation, the following:
(a) INSTALLATION. Tower Company shall perform all operations necessary and
required to build sites and install Personal Communications Services ("PCS")
cellular base transmission equipment, including without limitation:
(i) Tower Company shall famish all labor, supervision, materials and
equipment (other than materials and equipment specified as famished by others)
and perform all operations necessary and required to build sites and install
Personal Communications Services ("PCS") cellular base transmission equipment.
(ii) Tower Company shall install the Carrier Equipment upon the Tower
Facilities in accordance with their approved construction drawings,
specifications (except for those Tritel famished specifications) and other
contract documents. Work includes but is not limited to the following:
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(A) Preparation of raw land sites by clearing, grubbing and
grading. Construction of access roads as required. Preparation of
building, structures, or roofs in accordance with all legal
requirements and the Carrier Specifications for installing the Carrier
Equipment.
(B) Install electrical work required including raceways, cable
trays, boxes, underground ducts, utility structures, wires, cables,
wiring devices and related work necessary for a functional PCS site.
(C) Installation of framing for support of Carrier Equipment.
(D) Installation of equipment foundations.
(E) Seal penetrations through existing and new construction as
required by local codes and ordinances.
(F) Field quality control and inspections.
(G) Performance of sweep test and provide results in accordance
with project requirements contained in Specification No.
24085-002-3PS-EFW0-00001 and provide test results for Carrier review
and approval.
(H) Perform ground testing for each site and provide results in
accordance with project requirements contained in Specification No.
24085-000-3PS-EG00-G000 1 and provide test results for Carrier review
and approval.
(I) Receipt and storage of Carrier/third party materials, as
required.
(J) Provide concrete testing for all concrete work as required.
(K) Provide all inspections required by local and state
jurisdictions.
(L) Obtain and pay for all permits including special permits, as
required.
(M) Tower Company shall be responsible for obtaining FAA and FCC
permits, applications and approvals.
(N) Tower Company shall be responsible for any AM De-Tuning if
required.
(iii) The Carrier Equipment Installation shall conform to the
construction drawings and specifications, and applicable federal, state, county,
city, local laws, ordinances, rules and regulations of the authorities having
jurisdiction and the Carrier Specifications.
(iv) Tower Company shall furnish all labor, supervision, construction
equipment, transportation, licenses, taxes, safety supplies, consumable
supplies, all materials and each and every item of expense required to complete
the Carrier's Equipment Installation, except the items described in Section 6c
of this Schedule.
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(v) Tower Company shall investigate, review, and if applicable, obtain
the proposed rights-of-way for ingress and egress from public and private roads
for clearances, restrictions, bridge load limit, bond requirements, permits (and
waivers of any of the foregoing if necessary) and other limitations that may
affect transportation and storage of Carrier's and Tower Company's equipment,
materials and manpower to or for the Applicable Tower Site.
(vi) Tower Company shall obtain and pay for all work permits required
by governmental authorities and other permits required for Tower Company's
construction pertains including but not limited to Tower Company's licenses,
construction bonds, transportation, equipment, labor and/or other general
permits.
(b) INSPECTION AND ACCEPTANCE
(i) Carrier Equipment Installation shall be subject to the inspection
and approval of Carrier and its agent, such approval not to be unreasonably
withheld, delayed or conditioned, and/or authorities or agencies having
jurisdiction.
(ii) Tower Company shall schedule the work upon the Carrier Equipment
Installation and provide notification to Carrier to comply with any and all
requirements for inspections including, but not limited to, sweep testing,
ground testing and final inspection.
(iii) Tower Company shall provide verification that antennae are
aligned as required by the design drawings and are within the tolerance.
(iv) Tower Company shall coordinate and schedule final inspection walk
down inspections with Tritel and/or its' agents.
(c) CARRIER SUPPLIED EQUIPMENT AND MATERIAL
Equipment and Materials supplied by the Carrier will be delivered to Tower
Company on a just in time basis to meet scheduled construction start dates, to
the Applicable Tower Sites or Tower Company's facilities as chosen by Tower
Company. Tower Company shall receive, document, store, protect and transport all
materials as required. The receiving notices will be furnished to Carrier within
24 hours of delivery to Tower Company. The following equipment will be furnished
by Carrier, but no further or otherwise:
(i) Antenna Supports/Mounts
(ii) Antennas, including downtilt brackets
(iii) Coax Cable
(iv) Coax Connectors
(v) TMAS
(vi) Surge Suppressors
(vii) Ericsson equipment frames
Tower Company shall provide a bill of material for each Applicable Tower Site
five working days before the materials/equipment are needed for installation.
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Tower Company is also responsible for notification of electrical installation
and termination of equipment with Carrier in order to coordinate the
installation of the cabinet and related equipment by Ericcson.
(d) DELIVERY. Tower Company will be required to provide the following
documentation to Carteret the completion of the Carrier Equipment Installation
for each Applicable Tower Site:
Sweep test results
Grounding test results
Concrete test results
All other test results and reports
Pictures of the ground ring, ground rods before filling trenches with each
A completed and signed off Punch list from the final walkdown
(e) PLANNING AND SCHEDULING. Tower Company will conduct regular process review
meetings with Carrier and/or its agent and provide input into the project
database to report the construction and installation status.
(f) AS BUILT DRAWINGS. As Built Drawings - Tower Company will provide as-built
drawings to Carrier of each Applicable Tower Site which detail all pertinent
information relating to Carrier's equipment and antenna system at the Applicable
Site and shall substantially conform to the specifications supplied by CARRIER
g) PUNCH LIST & ACCEPTANCE - Upon final completion of the Carrier's Equipment
Installation at each Applicable Tower Site by Tower Company in accordance with
the provisions of this Agreement, Tower Company shall request, in writing, final
inspection of the Applicable Tower Site. Carrier will inspect the Carrier's
Equipment Installation within fifteen (15) business days of the receipt of Tower
Company's notice that the Carrier Equipment Installation is complete. Within ten
(10) business days of inspection, Carrier will either provide a signed writing
evidencing final acceptance of the Carrier Equipment Installation or, through
the use of a punch list form, advise Tower Company of the portions of the
Carrier Equipment Installation that are defective or incomplete or of
obligations that have not been fulfilled but are required for final acceptance.
Tower Company shall complete any unfinished or defective portion of the Carrier
Equipment Installation which are necessary to install and operate Carrier's
equipment within ten (10) business days following issuance of the punch list.
With respect to other punch list items, Tower Company shall complete all
unfinished or defective portions of the Carrier Premises within fifteen (15)
calendar days following issuance of the punch list.
h) TRADE AND CONSTRUCTION PERMITS - Tower Company shall obtain, at its expense,
all necessary local and municipal permits, licenses, inspections, certificates
and approvals necessary to complete the Carrier Equipment Installation, and
shall ensure compliance with all state environmental laws. Tower Company shall
pay all Rents for such permits, licenses, inspections, certificates or approvals
to the appropriate government body or other entity.
i) LIENS. Tower Company shall keep the Tower Facilities and the Carrier
Equipment free of all involuntary liens and claims, including without
limitation, (other than liens and claims arising
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by, through or under Carrier) liens and claims (a) arising out of or related to
the performance of the construction, all liens and claims of any contractor,
subcontractor, laborer, mechanic or materialman for labor performed or material
furnished in connection with the performance of the construction; (b) liens or
claims arising from taxes or assessments, except for personal property taxes
which may be assessed against Carrier's Equipment, and except for liens for
taxes or assessments which are not yet due and payable; or (c) liens or claims
which may impair Carrier's interest.
7. REPRESENTATIONS - Notwithstanding any other provision contained in this
Schedule or any other terms of this Agreement, the following terms and
conditions shall apply with respect to the materials, equipment and services
provided hereunder:
a) Tower Company, its agents, subcontractors, and employees shall
perform the Carrier Equipment Installation as independent
contractors, and not as agents, partners, joint venturers or
employees of Carrier. Tower Company shall supervise and direct the
Carrier Equipment Installation, using the care and skill
ordinarily used by members of Tower Company's profession
practicing under similar conditions at the same time and in the
same geographic area, and Tower Company shall be solely
responsible for all construction means, methods, techniques,
sequences and procedures and for coordinating all portions of the
Carrier Equipment Installation.
b) Unless otherwise specifically provided in the Carrier Equipment
Installation, Tower Company shall provide and pay for all labor,
supervision, materials, construction surveys and layout,
equipment, tools, construction equipment and machinery, water,
heat, utilities, transportation, and other facilities and services
necessary for the proper execution and completion of the
Applicable Tower Site consistent with the terms of this Schedule
and the Agreement.
c) Tower Company shall at all times enforce strict discipline and
good order among its employees.
d) Tower Company hereby represents and warrants to Carrier that all
materials and equipment incorporated in the Applicable Tower Site
will be new unless otherwise requested in writing by Tower Company
and agreed to in writing by Carrier prior to their use and all
such materials and equipment shall be of good quality. Tower
Company further represents and warrants that the Carrier's
Equipment Installation to be performed under this Agreement, and
all workmanship, materials and equipment provided, furnished, used
or installed in construction of the same, shall be safe,
substantial, good quality and durable construction in all
respects, and that all of the Carrier's Equipment installation
will be free from faults and defects and in conformance with the
terms of this Agreement. The warranty for the services provided by
Tower Company at each Applicable Tower Site shall be for a period
of Eighteen (18) months from the date of full acceptance of the
Site by Carrier (the "Warranty Period"). Tower Company represents,
warrants and agrees that the Carrier Equipment shall be
constructed and installed in a good and workmanlike manner and in
accordance with the plans and specifications for the installation
of the Carrier
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Equipment and all applicable federal, state and local laws,
ordinances, rules and regulations and shall be of good quality,
free from faults and patent defects.
e) Tower Company agrees to correct any defective portion of the
Applicable Tower Site or the Carrier Premises. If Tower Company
fails, after ten (10) days following written notice from Carrier:
(i) to commence and continue correction of such defective Carrier
Equipment Installation with diligence and promptness; (ii) to
perform the Carrier Equipment Installation; or (iii) to comply
with any other provision of this Agreement, Carrier may correct
and remedy any such deficiency in addition to any other remedies
it may have. Tower Company shall not be responsible for reasonable
delays caused by inclement weather that would delay a reasonable
contractors performance of the installation of a wireless antennae
system substantially similar to the Carrier Equipment Installation
set forth herein.
f) Tower Company shall supervise and direct the Carrier Equipment
Installation on the Carrier Equipment (the "Carrier Equipment
Work"), using Tower Company's best skill and attention. Tower
Company shall be solely responsible for and have control over
construction means, methods, techniques, sequences and procedures
and for coordinating all portions of the Carrier Equipment Work on
the Tower Facilities under this Agreement excluding the placement
and setting of any cabinet or shelter and equipment contained
therein; and.
g) Tower Company shall enforce strict discipline and good order among
the employees and other persons carrying out this Agreement. Tower
Company shall not permit employment of unfit persons or persons
not skilled in tasks assigned to them; and
h) Tower Company shall provide Carrier (and its employees, agents and
contractors) access to the Carrier Equipment Work in preparation
and progress wherever located, provided that such access shall not
interfere with the Carrier Equipment Work; and
i) Tower Company shall pay all royalties and license fees; shall
defend suits or claims for infringement of patent rights and shall
hold Carrier harmless from loss on account thereof, but shall not
be responsible for such defense or loss when a particular design,
process or product of a particular manufacturer or manufacturers
is required by Carrier unless Tower Company has reason to believe
that there is an infringement of patent.
j) Tower Company shall be responsible for initiating, maintaining and
supervising all safety precautions and programs in connection with
the performance of the Agreement. Tower Company shall take
reasonable precautions for safety of, and shall provide reasonable
protection to prevent damage, injury or loss to:
(1) employees on the Carrier Equipment Work, the Tower
Facilities or the Applicable Tower Site and other persons who
may be affected thereby;
(2) the Carrier Equipment Work, the Tower Facilities, the
Applicable Tower Site and materials and equipment to be
incorporated therein; and
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(3) other property at the Applicable Tower Site or adjacent
thereto.
8. REIMBURSEMENT FOR INSTALLATION OF CARRIER EQUIPMENT. Carrier shall pay the
Tower Company [CONFIDENTIAL TREATMENT REQUESTED] ("Carrier Installation Rent")
for the installation of the Carrier Equipment as contemplated in Section 7 of
this Schedule.
9. COMMENCEMENT DATE. The term "Commencement Date" shall mean the date when the
initial term of each SLA shall commence and shall be the date which is the later
of (i) the date that Tower Company completes installation of Carrier Equipment
on the Premises in the event that the Tower Company is installing Carrier's
Equipment on the Premises; or (ii) fifteen (15) days after Carrier has accepted
the Tower Facilities pursuant to Paragraph 3.7 of the Master Lease; or (iii) in
the event that Carrier has not accepted the Tower Facilities pursuant to
Paragraph 3.7 of the Master Lease, fifteen (15) days after the date that the
Tower Facilities are substantially complete and Carrier is able to operate the
Carrier Equipment upon the Tower Facilities in compliance with all laws, rules
and regulations; or (iv) October 18, 1999.
10. SCHEDULE IS MODIFICATION. This Schedule shall be added to and modify the
terms and conditions of the Master Lease and hereby is incorporated into the
terms of the Master Lease. In the event that there is a conflict or
contradiction between the terms and conditions of the Master Lease and this
Schedule, the terms and conditions of this Schedule shall control.
IN WITNESS WHEREOF, Tower Company and Carrier have signed this Schedule as of
the date and year first above written.
CARRIER: TOWER COMPANY:
TRITEL COMMUNICATIONS, INC. AMERICAN TOWER, L.P., A
DELAWARE LIMITED
PARTNERSHIP
BY: ATC GP, INC.
TITLE: SOLE GENERAL PARTNER
By: By:
------------------------------- -------------------------------
William S. Arnett
President Name:
-----------------------------
Title:
----------------------------
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SCHEDULE 3 TO ATTACHMENT "VI"
OF MASTER LEASE BETWEEN
TOWER COMPANY AND CARRIER
MARKET SPECIFIC TERMS
1. CARRIER MARKET: Birmingham Market - This Schedule shall apply to the
Birmingham Market only.
2. NUMBER OF SITES: -
(a) Carrier shall and hereby grants to Tower Company the right to
develop, construct and lease twenty two (22) Tower Facilities in the Birmingham
Market more particularly described in Exhibit A attached hereto. The granting of
the twenty two (22) sites mentioned above will count towards the fulfillment of
Carrier's obligation to award sites as stated in Schedule 1 and Schedule 2 To
Attachment "VI" of this agreement. It is understood and agreed by Carrier and
Tower Company from this point forward, that any rights to develop, construct and
lease any future sites for Carrier in any market, will be awarded on merit only.
In the event that the Tower Company elects not to accept an Applicable Tower
Site or otherwise terminates its obligations in regards to an Applicable Tower
Site or does not complete an Applicable Tower Site the total number of Tower
Facilities to be constructed in the Birmingham Market (or other Markets if
applicable) by Tower Company will be reduced by the number of Applicable Tower
Sites rejected, terminated or not otherwise completed.
(b) In the event that the Tower Company rejects or terminates its
obligations or otherwise fails to complete or does not otherwise complete and
construct twenty percent (20%) or more of the Tower Facilities and installation
of the Carrier Equipment upon the Applicable Tower Sites in the Birmingham
Market, such actions shall constitute an Event of Default under the Master Lease
and in addition to any other remedies at equity or law or in the Master Lease
which Carrier may have, Carrier shall have the right to terminate the Master
Lease upon five (5) days written notice and to require the Tower Company to
assign or reassign any or all Ground Leases under the applicable Tower Sites in
the Birmingham Market to Carrier or its assignee, to assign or reassign any or
all Pre-Development Information to Carrier or its assignee and to assign or
reassign any other easements, leases, licenses, subleases, contracts, suppliers
contracts or agreements regarding or related to any or all of the Applicable
Tower Sites in the Huntsville Market to the Carrier or its assignee. In addition
thereto Carrier shall have the right to require the Tower Company to convey any
other property (real or personal, tangible or intangible) related to or
connected to the Applicable Tower Sites in the Birmingham Market, including
without limitation, the Tower Facilities, any pads, utilities, wiring, cabling,
connections, etc. to the Carrier or its assignee. The Carrier or its assignee
shall reimburse the Tower Company for the fair market value of the tower and the
related accessories, but no further or otherwise.
3. PRE-DEVELOPMENT COSTS:
(a) For each Tower Site for which Carrier has obtained Pre-Development
Information. Tower Company shall reimburse Carrier up to the
following amounts, but no more than the following amounts for
delivery of the Pre-Development Information for the
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Applicable Tower Site from the Carrier to the Tower Company within
ten (10) days of the execution of the Assignment based upon the
following milestones:
MILESTONE 1: Delivery of Candidate Site Report
- Selection Form [CONFIDENTIAL TREATMENT REQUESTED]
o Identification of 3 leasable, zonal and constructable candidates
o Coordination of site visit
o Submission of reports including but not limited to Zoning Summary,
Permit Summary, site sketch
MILESTONE 2: Delivery of Lease Package [CONFIDENTIAL TREATMENT REQUESTED]
o Submission of pre-approved, executed lease, including any access
easements, rights-of-way, etc. that may be required.
o Site Package, Site Survey
MILESTONE 3: Delivery of Title and Title Clearance Items
[CONFIDENTIAL TREATMENT REQUESTED]
o Submission of Title Report
o Submission of evidence curative work complete
MILESTONE 4: Delivery of Zoning Decision [CONFIDENTIAL TREATMENT REQUESTED]
o Submission of zoning application and verification of attendance
at required zoning meetings
o Submission of verification of zoning decision
MILESTONE 5: Building Permit Ready [CONFIDENTIAL TREATMENT REQUESTED]
o Coordination of NEPA, FCC, Environmental Assessments,
Geotechnicals as required
o Receipt of Building Permit and any other permits required for
construction
TOTAL PRICE [CONFIDENTIAL TREATMENT REQUESTED]
4. SCHEDULE OF COMPLETION:
(a) Subject to the force majeure provisions of Section 5.5(e) of the
Master Lease, Tower Company shall deliver to the Carrier all of the
Pre-Development Information and the Ground Lease for the Applicable Tower Sites
by the dates according to the following Schedule:
This portion of said Schedule shall be completed no later than
July 31, 1999.
(b) Tower Company shall deliver all Tower Sites fully completed with
Carrier's Equipment completely installed according to the following schedule,
excepting those Tower Sites delayed by Carrier actions or inaction's or those
Tower Sites delayed beyond Tower
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Company's control, including but not limited to Governmental Approvals,
moratoria, FAA or force majeure:
This portion of said Schedule shall be completed no later than
July 31, 1999
(c) Tower Company shall diligently exercise its best efforts to
construct and deliver all of the Tower Sites in the clusters which have been
developed by Carrier for the best system optimization.
5. RENT:
(a) Initial Term. As consideration for the use and occupancy of the
Premises under any SLA during the Initial Term, Carrier shall pay Tower Company
or such entity as Tower Company may designate from time to time, on the first
day of each calendar month during the Initial Term, the sum of [CONFIDENTIAL
TREATMENT REQUESTED] per month. During the initial term of the Master Lease, the
rent shall be increased on each anniversary of the Commencement Date by
[CONFIDENTIAL TREATMENT REQUESTED] annually. Rent shall be payable on the first
day of each month in advance to Tower Company at Tower Company's address as
specified in Paragraph 5.1 of the Master Lease. In the event that the
Commencement Date is other than the first day of a calendar month, Rent shall be
prorated over the number of days remaining in the month in which the SLA
commenced and shall thereafter be paid on the first day of each calendar month.
Tower Company and Carrier shall execute a letter agreement to attach to each SLA
to confirm the amount of the Rent.
(b) Renewal Terms. In the event that Carrier elects to renew an SLA as
provided in paragraph 4.5 of the Master Lease, Rent during the first Renewal
Term of the SLA shall be the same amount as the Rent during the last year of the
Initial Term of the Master Lease. Rent shall be increased by [CONFIDENTIAL
TREATMENT REQUESTED] over the Rent accruing under the immediately prior term of
the SLA, commencing with the beginning of the Second Renewal Term of the SLA.
6. INSTALLATION OF CARRIER EQUIPMENT. Carrier and Tower Company acknowledge and
agree that Tower Company shall be obligated to and Tower Company shall provide
all materials, equipment and supplies for the installation and construction of
and shall install and construct all Tower Facilities and install the Carrier's
Equipment ("Carrier's Equipment Installation") except for the placement and
setting of the cabinet upon the Carrier Premises and for the purchase and
delivery of the equipment and items described in Section 6(c), which
installation shall include without limitation, the following:
(a) INSTALLATION. Tower Company shall perform all operations necessary and
required to build sites and install Personal Communications Services ("PCS")
cellular base transmission equipment, including without limitation:
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(i) Tower Company shall furnish all labor, supervision, materials and
equipment (other than materials and equipment specified as furnished by others)
and perform all operations necessary and required to build sites and install
Personal Communications Services ("PCS") cellular base transmission equipment.
(ii) Tower Company shall install the Carrier Equipment upon the Tower
Facilities in accordance with their approved construction drawings,
specifications (except for those Tritel furnished specifications) and other
contract documents. Work includes but is not limited to the following:
(A) Preparation of raw land sites by clearing, grubbing and
grading. Construction of access roads as required. Preparation of
building, structures, or roofs in accordance with all legal
requirements and the Carrier Specifications for installing the Carrier
Equipment.
(B) Install electrical work required including raceways, cable
trays, boxes, underground ducts, utility structures, wires, cables,
wiring devices and related work necessary for a functional PCS site.
(C) Installation of financing for support of Carrier Equipment.
(D) Installation of equipment foundations.
(E) Seal penetrations through existing and new construction as
required by local codes and ordinances.
(F) Field quality control and inspections.
(G) Performance of sweep test and provide results in accordance
with project requirements contained in Specification No.
24085-002-3PS-EFW0-00001 and provide test results for Carrier review
and approval.
(H) Perform ground testing for each site and provide results in
accordance with project requirements contained in Specification No.
24085-000-3PS-EG00-G000 1 and provide test results for Carrier review
and approval.
(I) Receipt and storage of Carrier/third party materials, as
required.
(J) Provide concrete testing for all concrete work as required.
(K) Provide all inspections required by local and state
jurisdictions.
(L) Obtain and pay for all permits including special permits, as
required.
(M) Tower Company shall be responsible for obtaining FAA and FCC
permits, applications and approvals.
(N) Tower Company shall be responsible for any AM De-Tuning if
required.
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(iii) The Carrier Equipment Installation shall conform to the
construction drawings and specifications, and applicable federal, state, county,
city, local laws, ordinances, rules and regulations of the authorities having
jurisdiction and the Carrier Specifications.
(iv) Tower Company shall furnish all labor, supervision, construction
equipment, transportation, licenses, taxes, safety supplies, consumable
supplies, all materials and each and every item of expense required to complete
the Carrier's Equipment Installation, except the items described in Section 6c
of this Schedule.
(v) Tower Company shall investigate, review, and if applicable, obtain
the proposed rights-of-way for ingress and egress from public and private roads
for clearances, restrictions, bridge load limit, bond requirements, permits (and
waivers of any of the foregoing if necessary) and other limitations that may
affect transportation and storage of Carrier's and Tower Company's equipment,
materials and manpower to or for the Applicable Tower Site.
(vi) Tower Company shall obtain and pay for all work permits required
by governmental authorities and other permits required for Tower Company's
construction pertains including but not limited to Tower Company's licenses,
construction bonds, transportation, equipment, labor and/or other general
permits.
(b) INSPECTION AND ACCEPTANCE
(i) Carrier Equipment Installation shall be subject to the inspection
and approval of Carrier and its agent, such approval not to be unreasonably
withheld, delayed or conditioned, and/or authorities or agencies having
jurisdiction.
(ii) Tower Company shall schedule the work upon the Carrier Equipment
Installation and provide notification to Carrier to comply with any and all
requirements for inspections including, but not limited to, sweep testing,
ground testing and final inspection.
(iii) Tower Company shall provide verification that antennae are
aligned as required by the design drawings and are within the tolerance.
(iv) Tower Company shall coordinate and schedule final inspection walk
down inspections with Tritel and/or its' agents.
(c) CARRIER SUPPLIED EQUIPMENT AND MATERIAL
Equipment and Materials supplied by the Carrier will be delivered to Tower
Company on a just in time basis to meet scheduled construction start dates, to
the Applicable Tower Sites or Tower Company's facilities as chosen by Tower
Company. Tower Company shall receive, document, store, protect and transport all
materials as required. The receiving notices will be furnished to Carrier within
24 hours of delivery to Tower Company. The following equipment will be furnished
by Carrier, but no further or otherwise:
(i) Antenna Supports/Mounts
(ii) Antennas, including downtilt brackets
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(iii) Coax Cable
(iv) Coax Connectors
(v) TMAS
(vi) Surge Suppressors
(vii) Ericsson equipment frames
Tower Company shall provide a bill of material for each Applicable Tower Site
five working days before the materials/equipment are needed for installation.
Tower Company is also responsible for notification of electrical installation
and termination of equipment with Carrier in order to coordinate the
installation of the cabinet and related equipment by Ericcson.
(d) DELIVERY. Tower Company will be required to provide the following
documentation to Carrier at the completion of the Carrier Equipment Installation
for each Applicable Tower Site:
Sweep test results
Grounding test results
Concrete test results
All other test results and reports
Pictures of the ground ring, ground rods before filling trenches with each
A completed and signed off Punch list from the final walkdown
(e) PLANNING AND SCHEDULING. - Tower Company will conduct regular process review
meetings with Carrier and/or its agent and provide input into the project
database to report the construction and installation status.
(f) AS BUILT DRAWINGS. As Built Drawings - Tower Company will provide as-built
drawings to Carrier of each Applicable Tower Site which detail all pertinent
information relating to Carrier's equipment and antenna -system at the
Applicable Site and shall substantially conform to the specifications supplied
by CARRIER
g) PUNCH LIST & ACCEPTANCE - Upon final completion of the Carrier's Equipment
Installation at each Applicable Tower Site by Tower Company in accordance with
the provisions of this Agreement, Tower Company shall request, in writing, final
inspection of the Applicable Tower Site. Carrier will inspect the Carrier's
Equipment Installation within fifteen (15) business days of the receipt of Tower
Company's notice that the Carrier Equipment Installation is complete. Within ten
(10) business days of inspection, Carrier will either provide a signed writing
evidencing final acceptance of the Carrier Equipment Installation or, through
the use of a punch list form, advise Tower Company of the portions of the
Carrier Equipment Installation that are defective or incomplete or of
obligations that have not been fulfilled but are required for final acceptance.
Tower Company shall complete any unfinished or defective portion of the Carrier
Equipment Installation which are necessary to install and operate Carrier's
equipment within ten (10) business days following issuance of the punch list.
With respect to other punch list items, Tower Company shall complete all
unfinished or defective portions of the Carrier Premises within fifteen (15)
calendar days following issuance of the punch list.
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h) TRADE AND CONSTRUCTION PERMITS - Tower Company shall obtain, at its expense,
all necessary local and municipal permits, licenses, inspections, certificates
and approvals necessary to complete the Carrier Equipment Installation, and
shall ensure compliance with all state environmental laws. Tower Company shall
pay all Rents for such permits, licenses, inspections, certificates or approvals
to the appropriate government body or other entity.
i) LIENS. Tower Company shall keep the Tower Facilities and the Carrier
Equipment free of all involuntary liens and claims, including without
limitation, (other than liens and claims arising by, through or under Carrier)
liens and claims (a) arising out of or related to the performance of the
construction, all liens and claims of any contractor, subcontractor, laborer,
mechanic or materialman for labor performed or material furnished in connection
with the performance of the construction; (b) liens or claims arising from taxes
or assessments, except for personal property taxes which may be assessed against
Carrier's Equipment, and except for liens for taxes or assessments which are not
yet due and payable; or (c) liens or claims which may impair Carrier's interest.
7. REPRESENTATIONS - Notwithstanding any other provision contained in this
Schedule or any other terms of this Agreement, the following terms and
conditions shall apply with respect to the materials, equipment and services
provided hereunder:
a) Tower Company, its agents, subcontractors, and employees shall
perform the Carrier Equipment Installation as independent
contractors, and not as agents, partners, joint venturers or
employees of Carrier. Tower Company shall supervise and direct the
Carrier Equipment Installation, using the care and skill
ordinarily used by members of Tower Company's profession
practicing under similar conditions at the same time and in the
same geographic area, and Tower Company shall be solely
responsible for all construction means, methods, techniques,
sequences and procedures and for coordinating all portions of the
Carrier Equipment Installation.
b) Unless otherwise specifically provided in the Carrier Equipment
Installation, Tower Company shall provide and pay for all labor,
supervision, materials, construction surveys and layout,
equipment, tools, construction equipment and machinery, water,
heat, utilities, transportation, and other facilities and services
necessary for the proper execution and completion of the
Applicable Tower Site consistent with the terms of this Schedule
and the Agreement.
c) Tower Company shall at all times enforce strict discipline and
good order among its employees.
d) Tower Company hereby represents and warrants to Carrier that all
materials and equipment incorporated in the Applicable Tower Site
will be new unless otherwise requested in writing by Tower Company
and agreed to in writing by Carrier prior to their use and all
such materials and equipment shall be of good quality. Tower
Company further represents and warrants that the Carrier's
Equipment Installation to be performed under this Agreement, and
all workmanship, materials and equipment provided, furnished, used
or installed in construction of the same, shall be safe,
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substantial, good quality and durable construction in all
respects, and that all of the Carrier's Equipment installation
will be free from faults and defects and in conformance with the
terms of this Agreement. The warranty for the services provided by
Tower Company at each Applicable Tower Site shall be for a period
of Eighteen (18) months from the date of full acceptance of the
Site by Carrier (the "Warranty Period"). Tower Company represents,
warrants and agrees that the Carrier Equipment shall be
constructed and installed in a good and workmanlike manner and in
accordance with the plans and specifications for the installation
of the Carrier Equipment and all applicable federal, state and
local laws, ordinances, rules and regulations and shall be of good
quality, free from faults and patent defects.
e) Tower Company agrees to correct any defective portion of the
Applicable Tower Site or the Carrier Premises. If Tower Company
fails, after ten (10) days following written notice from Carrier:
(i) to commence and continue correction of such defective Carrier
Equipment Installation with diligence and promptness; (ii) to
perform the Carrier Equipment Installation; or (iii) to comply
with any other provision of this Agreement Carrier may correct and
remedy any such deficiency in addition to any other remedies it
may have. Tower Company shall not be responsible for reasonable
delays caused by inclement weather that would delay a reasonable
contractor's performance of the installation of a wireless
antennae system substantially similar to the Carrier Equipment
Installation set forth herein.
f) Tower Company shall supervise and direct the Carrier Equipment
Installation on the Carrier Equipment (the "Carrier Equipment
Work"), using Tower Company's best skill and attention. Tower
Company shall be solely responsible for and have control over
construction means, methods, techniques, sequences and procedures
and for coordinating all portions of the Carrier Equipment Work on
the Tower Facilities under this Agreement excluding the placement
and setting of any cabinet or shelter and equipment contained
therein; and.
g) Tower Company shall enforce strict discipline and good order among
the employees and other persons carrying out this Agreement. Tower
Company shall not permit employment of unfit persons or persons
not skilled in tasks assigned to them; and
h) Tower Company shall provide Carrier (and its employees, agents and
contractors) access to the Carrier Equipment Work in preparation
and progress wherever located, provided that such access shall not
interfere with the Carrier Equipment Work; and
i) Tower Company shall pay all royalties and license fees; shall
defend suits or claims for infringement of patent rights and shall
hold Carrier harmless from loss on account thereof, but shall not
be responsible for such defense or loss when a particular design,
process or product of a particular manufacturer or manufacturers
is required by Carrier unless Tower Company has reason to believe
that there is an infringement of patent.
j) Tower Company shall be responsible for initiating, maintaining and
supervising all safety precautions and programs in connection with
the performance of the
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Agreement. Tower Company shall take reasonable precautions for
safety of, and shall provide reasonable protection to prevent
damage, injury or loss to:
(1) employees on the Carrier Equipment Work, the Tower
Facilities or the Applicable Tower Site and other persons who
may be affected thereby;
(2) the Carrier Equipment Work, the Tower Facilities, the
Applicable Tower Site and materials and equipment to be
incorporated therein; and
(3) other property at the Applicable Tower Site or adjacent
thereto.
8. REIMBURSEMENT FOR INSTALLATION OF CARRIER EQUIPMENT. Carrier shall pay the
Tower Company Thirty Thousand and no/100s Dollars ($30,000.00) ("Carrier
Installation Rent") for the installation of the Carrier Equipment as
contemplated in Section 7 of this Schedule.
9. NOTICE OF EXISTING APPLICABLE TOWER SITES. Notwithstanding the provisions
contained within the body of the Master Lease, Tower Company acknowledges that
Carrier has as of the date of this Agreement notified Tower Company of the
Applicable Tower Sites identified in Exhibit "A" to this Schedule (the "Existing
Applicable Tower Sites"). Within fifteen (15) business days from the date of
this Agreement, Tower Company will provide a Notice of Acceptance for or will
reject each such Applicable Tower Site. If Tower Company provides a Notice of
Acceptance for any such Applicable Tower Site, Tower Company shall reimburse
Carrier for the Pre-Development Costs associated with each accepted Applicable
Tower Site in accordance with this Schedule.
10. COMMENCEMENT DATE. The term "Commencement Date" shall mean the date when the
initial term of each SLA shall commence and shall be the date which is the later
of (i) the date that Tower Company completes installation of Carrier Equipment
on the Premises in the event that the Tower Company is installing Carrier's
Equipment on the Premises; or (ii) fifteen (15) days after Carrier has accepted
the Tower Facilities pursuant to Paragraph 3.7 of the Master Lease; or (iii) in
the event that Carrier has not accepted the Tower Facilities pursuant to
Paragraph 3.7 of the Master Lease, fifteen (15) days after the date that the
Tower Facilities are substantially complete and Carrier is able to operate the
Carrier Equipment upon the Tower Facilities in compliance with all laws, rules
and regulations; or (iv) March 1, 1999.
11. SCHEDULE IS MODIFICATION. This Schedule shall be added to and modify the
terms and conditions of the Master Lease and hereby is incorporated into the
terms of the Master Lease. In the event that there is a conflict or
contradiction between the terms and conditions of the Master Lease and this
Schedule, the terms and conditions of this Schedule shall control.
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IN WITNESS WHEREOF, Tower Company and Carrier have signed this Schedule as of
the date and year first above written.
CARRIER: TOWER COMPANY:
TRITEL COMMUNICATIONS, INC. AMERICAN TOWER, L.P., A
DELAWARE LIMITED
PARTNERSHIP
BY: ATC GP, INC.
TITLE: SOLE GENERAL PARTNER
By: By:
------------------------------- -------------------------------
William S. Arnett
President Name:
-----------------------------
Title:
----------------------------
Date: Date:
----------------------------- -----------------------------
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MASTER BUILD TO SUIT AND LEASE AGREEMENT
THIS MASTER BUILD TO SUIT AND LEASE AGREEMENT ("Master Lease" or
"Agreement") is made and entered into by and between TRITEL COMMUNICATIONS, INC.
("Tritel") and SPECTRASITE COMMUNICATIONS, INC. ("SpectraSite").
WHEREAS, Tritel has licenses to provide personal communications service
("PCS") in the states of Alabama, Florida, Mississippi, Tennessee, Kentucky and
any additional state or markets in which Tritel obtains a license to provide PCS
("Tritel Markets");
WHEREAS, Tritel requires that in certain instances towers and related
facilities be developed for the installation of antennas, equipment cabinets,
cabling and related equipment;
WHEREAS, Tritel also requires that parcels of real property together
with easements for ingress, egress and utilities to those properties be acquired
for the construction of the towers and related facilities;
WHEREAS, Tritel has previously engaged SpectraSite and other companies
to acquire parcels of real property to be leased or purchased by Tritel;
WHEREAS, Tritel desires to assign to SpectraSite certain of those
leases and for SpectraSite to construct facilities on the sites and/or to have
SpectraSite lease or purchase designated parcels of property to construct
structures for the operation of a wireless or telecommunications facility.
WHEREAS, Tritel desires to lease space on the facilities from
SpectraSite.
NOW THEREFORE, Tritel and SpectraSite do hereby agree as follows:
I. GRANT OF RIGHTS; ASSIGNMENT AND
ASSUMPTION OF PRIME LEASES AND SUBLEASING
1.1 (a) GRANT. Tritel grants SpectraSite the nonexclusive right to
develop, construct and lease those sites in the Tritel Markets which involve the
construction of towers and related facilities ("Tower Sites") upon the terms and
conditions of this Master Lease. SpectraSite acknowledges and agrees that the
right to develop, construct and lease the Tower Sites is not an exclusive right
and that Tritel may grant similar rights to other parties; provided, however,
that Tritel agrees that it shall grant to SpectraSite the right to develop a
minimum number of Tower Sites for each Tritel Market (as defined below) if set
forth in a schedule to Attachment VII to this Agreement.
(b) APPLICATION.
(i) NOTICE. In the event that Tritel identifies a Tower Site
or search ring where it intends to place, develop and construct a tower, and
Tritel intends to grant to SpectraSite the right to develop, construct and lease
such Tower Site, Tritel shall give SpectraSite notice of the Tower Site, and
such Tower Site shall hereinafter be referred to as the Applicable Tower Site.
(A) Notice of Search Ring. In the event that Tritel has
issued a search ring for the Applicable Tower Site, but has not obtained a
lease, contract, option or other right to lease the property for
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the Applicable Tower Site, Tritel shall notify SpectraSite in writing of the
parameters of the search ring for the Applicable Tower Site (the "Search Ring
Notice").
(B) NOTICE OF LEASE. In the event that Tritel has
obtained an option, lease, contract or other right to lease the property for the
Applicable Tower Site, Tritel shall notify SpectraSite in writing of and deliver
to SpectraSite a complete copy of the lease, option, contract or other right to
lease the property for the Applicable Tower Site (the "Lease Notice").
(C) NOTICE OF BUILDING PERMIT. In the event that Tritel
has obtained a lease, contract, option or other right to lease property for an
Applicable Tower Site and is preparing to apply for a building permit for the
Applicable Tower Site, Tritel shall notify SpectraSite in writing on or before
ten (10) days prior to the date that Tritel intends to make application for a
building permit for Applicable Tower Site (the "Building Permit Notice") (the
Search Ring Notice, the Lease Notice and the Building Permit Notice shall be
collectively referred to as the "Notice of Applicable Tower Site").
(D) OBLIGATION TO GIVE NOTICE. Notwithstanding
paragraphs 1.2(b)(i)(A), (B) and (C), Tritel shall not be obligated to provide
Spectrasite the Notice of applicable Tower Site until ten (10) days prior to the
date that Tritel intends to make application for a building permit for the
applicable tower site, provided however, Tritel may elect to provide Spectrasite
Notice of the Applicable Tower Site pursuant to 1.1(b)(i)(A) or 1.1(b)(i)(B)
above.
(ii) ACCEPTANCE OR REJECTION OF APPLICABLE TOWER SITE.
SpectraSite shall have a period of twenty (20) days (the "Application Period")
from the date of the Notice of Applicable Tower Site to accept (in the event of
acceptance, the "Notice of Acceptance") or reject in writing any such Applicable
Tower Site because of any characteristics associated with the Applicable Tower
Site which would in the reasonable opinion of SpectraSite adversely impact the
development or ownership of the Applicable Tower Site. In the event that
SpectraSite does not accept or reject the Applicable Tower Site within such
twenty (20) day period, SpectraSite shall be deemed to have rejected such
Applicable Tower Site. In the event that SpectraSite rejects or does not accept
any Applicable Tower Site, SpectraSite shall have no right to require an
assignment of the Prime Lease (as hereinafter defined) or obligation to develop
the Applicable Tower Site and Tritel shall have no further obligation to
SpectraSite in regards to the Applicable Tower Site under the terms of this
Agreement.
(c) DUE DILIGENCE. During the (i) Application Period; and (ii) in
the event that SpectraSite provides Tritel with a Notice of Acceptance upon the
Applicable Tower Site, during the period between the Application Period and the
Commencement Date of the applicable SLA; and (iii) during the term of the
applicable SLA (hereinafter defined), provided that SpectraSite has assumed the
Prime Lease, if applicable, and entered into an SLA with Tritel: Tritel shall
make available to SpectraSite such information as SpectraSite may reasonably
require about the Applicable Tower Site which information shall include but
shall not be limited to (i) zoning permits and approvals, variances, building
permits and such other federal, state or local governmental approvals which have
been obtained or for which Tritel has made application; (ii) the construction,
engineering and architectural drawings and related site plan and surveys
pertaining to the construction of the Tower Facilities (hereinafter defined) on
the entire portion of the property where the Applicable Tower Site will be
located (the "Property" or the "Site"), which Property (or an interest therein)
has been leased, licensed or otherwise obtained by Tritel, or will be obtained
by SpectraSite, pursuant to a lease, option or other contract with the Owner
(the "Prime Lessor") of the Property; (iii) the geotechnical report for the
Property which has been commissioned by Tritel; (iv) the title reports,
commitments for title insurance, ownership and encumbrance reports, title
opinion letters, copies of instruments in the chain of title or any other
information
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which may have been produced regarding title to the Property and any and all
easements for access, ingress, egress or utilities easements obtained or
intended to be utilized for the Applicable Tower Site (the "Easements"); and (v)
the environmental assessments including phase I reports and any reports relating
to contemporaneous or subsequent intrusive testing, the " Federal Communication
Commission Checklist" performed pursuant to National Environmental Protection
Act requirements and any other information which may have been produced
regarding the environmental condition of the Property, the Easements or
neighboring real property. Tritel shall cooperate with SpectraSite in making
reasonable modifications to the foregoing information at the request of
SpectraSite. Upon execution of an SLA, Tritel shall assign and convey the
foregoing to SpectraSite without warranty or representation.
(d) FEDERAL AVIATION ADMINISTRATION APPROVAL. Tritel shall not
file with the Federal Aviation Administration ("FAA") any application,
responses, approvals and registration numbers submitted or received with respect
to any Applicable Tower Site without the prior approval of SpectraSite which
approval shall not be unreasonably withheld, delayed or conditioned by
SpectraSite.
(e) ASSIGNMENT AND ASSUMPTION OF PRIME LEASE, In the event that
SpectraSite accepts the Applicable Tower Site for development pursuant to
section 1. 1 of this Agreement, and Tritel has entered a Prime Lease with the
Prime Lessor, Tritel shall assign to SpectraSite and SpectraSite shall assume
and agree to be bound, by the "Prime Lease", together with the Easements to the
Property and the relationship of the parties with regard to the Applicable Tower
Site shall thereafter be governed by this Agreement. The form of the instrument
by which Tritel assigns the Prime Lease and any Easements to SpectraSite shall
be substantially the same form as that which is attached hereto as Attachment
"I" ("Assignment"). The Assignment shall be executed by Tritel and SpectraSite
in three (3) counterpart originals, and one original execution copy shall be
delivered to Tritel and two (2) original execution copies shall be delivered to
SpectraSite within five (5) days of the Notice of Acceptance. In addition
thereto, Spectrasite and Tritel shall execute a Memorandum of Assignment in
substantially the form of Attachment "II" to be recorded in the office of the
property records in the County where the Property is located. The Memorandum of
Assignment shall be executed and delivered to SpectraSite within five (5) days
of the Notice of Acceptance. SpectraSite shall record the Memorandum of
Assignment within ten (10) days of the Notice of Acceptance, and in any event
prior to the commencement of construction of the Tower Facilities as
commencement of construction is defined in any mechanics or materialman's lien
statute in the state where the Property is located. In addition thereto,
SpectraSite shall use its best efforts to obtain from the Prime Lessor, a
release of Tritel from all liabilities under the Prime Lease and shall endeavor
to include such release language in the Estoppel Certificate which is attached
hereto as Attachment "III". SpectraSite shall and hereby agrees to hold Tritel
harmless and indemnify Tritel from any and all claims, losses, obligations,
damages, costs or expenses ever suffered, threatened or incurred by Tritel which
claims, losses, obligations, damages, costs or expenses must be paid by Tritel
to a third party (including without limitation, any lawyers, experts, engineers
or similar professionals) or which Tritel may expend in defending itself against
any claim threatened or made by a third party which arise out of any act or
omission of SpectraSite under the Prime Lease, including without limitation, any
default under the Prime Lease.
(f) COMPLETION OF PRE-DEVELOPMENT WORK. In the event that
SpectraSite accepts the Applicable Tower Site prior to the time that a building
permit has been issued for the Applicable Tower Site, SpectraSite shall obtain
and be responsible and liable for the completion of all matters necessary to
complete the construction of the Tower Facilities upon the Applicable Tower
Site, including without limitation (i) obtaining zoning permits and approvals,
variances, building permits and such other federal, state or local governmental
approvals for the Applicable Tower Site; (ii) obtaining the construction,
engineering and architectural drawings and related site plan and surveys
pertaining to the construction of the Tower Facilities on
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the Property (iii) obtaining the geotechnical report for the Property; (iv)
obtaining the title reports, commitments for title insurance, ownership and
encumbrance reports, title opinion letters, copies of instruments in the chain
of title or any other information which may have been produced regarding title
to the Property and the easements; and (v) obtaining the environmental
assessments including phase I reports and any reports relating to
contemporaneous or subsequent intrusive testing, the "Federal Communication
Commission ("FCC") Checklist" performed pursuant to National Environmental
Protection Act requirements and any other information which may be necessary to
obtain permits and maintain licensing for the operation of a wireless
communications facility upon the Applicable Tower Site (collectively the
"Pre-Development Information"). SpectraSite shall make available to and deliver
to Tritel copies of all of the Pre-Development Information prior to the
execution of an SLA.
(g) ZONING AND GOVERNMENTAL APPROVALS. In the event that it is
necessary to obtain or file any application, motion or appeal for zoning or
governmental approvals, permits, or any other action necessary (the "Government
Application") to obtain any federal, state, municipal or local governmental
approval or permit (the "Government Approval") for the Applicable Tower Site and
SpectraSite has accepted the Applicable Tower Site prior to the issuance of such
Government Approvals, Tritel shall have the right to require SpectraSite to hire
or use any witnesses, attorneys, consultants, lobbyists, public relations
consultants, or parties which Tritel deems reasonably necessary to obtain the
Governmental Approval. Tritel shall pay the cost of such consultants in the
event the costs to obtain such Governmental Approval exceed $3,000.00 in the
aggregate, excluding any attorney fees which might be incurred upon an appeal of
an approval or denial of such Governmental Approval. Whenever reasonably
practicable, SpectraSite shall consult with Tritel prior to filing any
Government Applications and obtain Tritel's approval of such Government
Applications, which approval shall not be unreasonably conditioned, delayed or
withheld. SpectraSite shall provide Tritel with copies of all Governmental
Applications and other documents filed by SpectraSite in obtaining any
Governmental Approvals for each Site. In the event that Tritel desires to
terminate, dismiss, withdraw, or otherwise cease the Government Application,
Tritel shall have the right to do so and, if in the reasonable opinion of
SpectraSite and SpectraSite's Counsel (in writing) such Government Application
could have been approved, and SpectraSite does not construct or build a tower or
similar facility upon the Property, Tritel shall reimburse SpectraSite for all
fees and expenses incurred in connection with the Government Applications and
the reasonable Pre-Development Costs for the Site.
(h) SITE LEASE AGREEMENT. (i) Tritel and SpectraSite shall execute
two original execution copies of a Site Lease Agreement ("SLA") in substantially
the form of the SLA attached hereto as Attachment IV and deliver such SLA to the
other party within five (5) days of the Notice of Acceptance in the event that
an application for a building permit has been submitted for the Applicable Tower
Site and that all Pre-Development Information has been completed and delivered
to Tritel, SpectraSite shall execute and deliver a Memorandum of SLA in
substantially the form of the Memorandum of SLA attached hereto as Attachment V"
contemporaneously with the execution and delivery of the SLA
(ii) In the event that the Notice of Acceptance has been received
prior to the submission of an application for a building permit and the delivery
of all Pre-Development Information to Tritel, Tritel and SpectraSite shall
execute two original SLAs in substantially the form of the SLA attached hereto
as Attachment IV and deliver such SLA to the other party with five (5) days of
the delivery of notice to Tritel (the "Pre-Development Notice") that SpectraSite
has delivered to Tritel all of the Pre-Development Information for the
Applicable Tower Site
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(iii) Contemporaneously with the execution and delivery of the
SLA, Tritel shall execute and deliver a collocation application to SpectraSite
in substantially the form of the collocation application attached hereto as
Attachment "VI".
(iv) Tritel may refuse to execute and reject the SLA on any
Applicable Tower Site because of any deficiency in the Pre-Development
Information or any deficiencies which are disclosed in the Pre-Development
Information, which Tritel did not obtain or prepare, including without
limitation (A) exceptions to the title of the Property or the Easements, (B)
deficiencies in the Plans and Specifications (hereinafter defined) (C)
deficiencies in the geotechnical analysis or environmental assessments for the
Property or any deficiencies regarding the condition of the Property; or (D)
deficiencies in any requirements under the National Environmental Protection
Act; (E) any deficiency in the SLA; or (F) any deficiency in the Prime Lease or
the due authorization thereof. In the event that Tritel refuses to execute or
rejects the SLA, Tritel shall have no obligation to execute an SLA or obligation
to SpectraSite under this Master Lease in regards to the Applicable. Tower Site.
In the event that Tritel refuses to execute an SLA and SpectraSite does not
construct a tower upon the Applicable Tower Site, Tritel shall reimburse
SpectraSite one-half of the Pre-Development Costs (hereinafter defined), which
accrued or were incurred prior to SpectraSite's notice or knowledge of such
deficiency in the Pre-Development Information, but in any event no more than
$15,000.00 for the Pre-Development Costs for the Applicable Tower Site.
(v) Tritel shall be responsible for recording and bear the cost of
recording the Memorandum of SLA.
II. DESIGN AND CONSTRUCTION OF TOWER FACILITIES
2.1 COVENANT TO CONSTRUCT. Construction of the Tower Facilities
(hereinafter defined) shall be the responsibility and obligation of SpectraSite.
SpectraSite shall be responsible for the costs and construction of the tower,
foundations, and related facilities including concrete foundations, footings and
slabs and fencing to be located upon the Applicable Tower Site ("Tower
Facilities"). SpectraSite shall construct the Tower Facilities in accordance
with and substantial compliance with the Plans and Specifications (hereinafter
defined) and all rules, regulations, laws, and orders of any governing body,
local, state or federal. SpectraSite shall obtain all necessary permits and
approval of the Plans and Specifications from all applicable governmental
agencies.
2.2 APPROVAL OF PLANS AND SPECIFICATIONS. (a) In the event that Tritel
has obtained plans for the construction of ("Plans") and specifications for the
construction of (the "Specifications") the Tower Facilities, Tritel shall
deliver to SpectraSite the Plans and Specifications for the Tower Facilities
within five (5) days of the complete execution of the Assignment. In the event
that SpectraSite does not approve the Plans and Specifications or modifies the
Plans and Specifications, SpectraSite shall deliver detailed written objections
to the Plans and Specifications within five (5) days of the receipt of the Plans
and Specifications or SpectraSite shall prepare and deliver to Tritel approval
by Tritel three copies of any modifications to the Plans and Specifications. Any
modifications to the Plans and Specifications for each Tower Facility shall be
delivered to Tritel within ten (10) days of the delivery of the Plans and
Specifications to SpectraSite. If no objection or modified Plans and
Specifications are delivered to Tritel within the above-referenced time periods,
the Plans and Specifications shall be deemed approved. Within five (5) business
days after receipt of the modified Plans and Specifications, Tritel shall
approve such modified Plans and Specifications or deliver to SpectraSite
detailed written objections thereto. If Tritel fails to either affirmatively
approve or disapprove the modifications to the Plans and Specifications proposed
by SpectraSite within the five (5) day period, Tritel shall be deemed to have
effectively approved the Plans and Specifications.
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(b) In the event that Tritel has not obtained Plans and
Specifications for the Tower Facility, SpectraSite shall have Plans and
Specifications for the Tower Facility prepared, designed and delivered to Tritel
within fifteen (15) days of the execution of the Assignment, or in the event
there is no Assignment, within fifteen (15) days of the execution of the Prime
Lease with the Prime Lessor, for Tritel's approval, which approval shall not be
unreasonably withheld, delayed or conditioned. Within five (5) days of receipt
of the Plans and Specifications, Tritel shall approve the Plans and
Specifications or deliver to SpectraSite detailed objections thereto. If Tritel
does not affirmatively approve or disapprove the Plans and Specifications within
such five (5) day period, Tritel shall be deemed to have approved the Plans and
Specifications.
(c) Notwithstanding the foregoing, in the event that any federal,
state or local governmental body, requires SpectraSite or Tritel to modify the
Plans and Specifications to obtain a Governmental Approval, Tritel or
SpectraSite may modify the Plans and Specifications provided that the other
party approves such modification, such approval not to be unreasonably withheld,
delayed or conditioned.
2.3 PRE-DEVELOPMENT COSTS. As used herein, "Pre-Development Costs"
shall include the cost of the site acquisition services, phase I environmental
assessments, geotechnical analyses, designs, Plans and Specifications, including
without limitation, construction plans, the cost incurred in obtaining any
grants of easements for ingress, egress or utilities over real property owned by
persons or entities other than the Prime Lessor under the Prime Lease ,
supplies, relevant travel expenses, fees or assessments imposed by local, state
or federal governmental entities, recording fees and filing fees, fees of
engineers, surveyors, architects, attorneys, brokerage commissions and others
providing professional services ("Pre-Development Costs) SpectraSite shall
reimburse Tritel for portions of these costs as specified in Attachment VII. A
separate Schedule for Attachment VII shall be executed for each Tritel Market
(as hereinafter defined) to define and set the rates, terms, rights, covenants
and conditions and obligations regarding the Pre-Development Costs for each
Market. Each Schedule (the "Schedule" or "Schedules") shall be signed and
executed by Tritel and SpectraSite, and upon due execution and due authorization
by each party, shall modify and amend the terms and conditions of this Master
Lease and shall be incorporated into this Master Lease and shall be governed by
the terms, covenants and conditions of this Master Lease as though set forth
herein word for word. In the event that no Schedule is negotiated for a specific
Market and SpectraSite commences construction of a Tower Facility in such
Market, Tritel and SpectraSite shall divide the Pre-Development Costs equally.
2.4 COMMENCEMENT OF CONSTRUCTION. SpectraSite shall commence
construction of the Tower Facility within twenty (20) days of the delivery of an
SLA executed by Tritel to SpectraSite. SpectraSite shall make reasonable and
diligent efforts to complete the construction of each individual Tower Facility
within thirty-five (35) days after Tritel executes an SLA for the Site upon
which the Tower Facility is to be constructed. SpectraSite shall have no
obligation to commence construction of the Tower Facilities unless and until a
SLA has been executed by Tritel for that Tower Site. The commencement of
construction and the completion of construction of each Tower Facility shall be
subject to delays from substantial labor disputes, fire, unusual delay in
deliveries not caused by or contributed to by SpectraSite or its contractors,
abnormal adverse weather conditions not reasonably anticipated, governmental
actions or inactions, not caused or contributed to by SpectraSite or other
unavoidable casualties or similar causes beyond reasonable control of
SpectraSite or SpectraSite's contractor or for time needed to perform additional
construction covered by any change order requested by Tritel. Notwithstanding
the foregoing, Tritel and SpectraSite may negotiate and agree upon a different
schedule for the completion of the Tower Facilities in each Tritel Market
pursuant to and part of a Schedule attached hereto as a Schedule attached to
Attachment VII.
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2.5 SELECTION OF CONTRACTOR. Prior to the commencement of construction
of a Tower Facility under this Agreement, SpectraSite shall provide Tritel with
the names of the contractors it proposes to use for the construction of the
Tower Facility. Tritel may, in its reasonable discretion and within five (5)
business days of receipt of this information, object to the use of a specific
contractor on a Tower Facility. Tritel may identify and choose any contractors
or subcontractors for construction of any specific Tower Facility so long as
Tritel submits the name of such contractor to SpectraSite on or before the date
that Tritel executes the Assignment and the SLA for the applicable Tower
Facility, and further provided that such contractor meets the financial, quality
and delivery requirements and standards similar to or better than contractors
which SpectraSite retains for the construction of other towers and sites.
2.6 MANNER OF CONSTRUCTION. (a) SpectraSite represents, warrants and
agrees that the Tower Facilities shall be constructed in a good and workmanlike
manner and in accordance with the Plans and Specifications and all applicable
federal, state and local laws, ordinances, rules and regulations. SpectraSite
warrants to Tritel that all materials furnished in connection with the
construction of the Tower Facilities will be new unless otherwise specified, and
of good quality, and that such construction will be of good quality in
accordance with industry standards, free from faults and patent defects.
(b) SpectraSite shall supervise and direct the work on the Tower
Facilities (the "Work"), using SpectraSite's best skill and attention.
SpectraSite shall be solely responsible for and have control over construction
means, methods, techniques, sequences and procedures and for coordinating all
portions of the Work on the Tower Facilities under this Agreement.
(c) Unless otherwise provided in this Agreement, SpectraSite shall
provide and pay for labor, materials, equipment, tools, construction equipment
and machinery, water, heat, utilities, transportation, and other facilities and
services necessary for the proper execution and completion of the Work, whether
temporary or permanent and whether or not incorporated or to be incorporated in
the Work.
(d) SpectraSite shall pay sales, consumer, use, and other similar
taxes regarding the Tower Facilities, the construction and leasing thereof, and
shall secure and pay for any permits and governmental fees, licenses and
inspections necessary for proper execution and completion of the Work.
(e) SpectraSite shall keep the Tower Facilities and surrounding
area free from accumulation of waste materials or rubbish caused by operations
under this Agreement. At completion of the work SpectraSite shall remove from
and about the Tower Facilities waste materials, rubbish, tools, construction
equipment, machinery and surplus materials.
(f) SpectraSite shall provide Tritel (and its employees, agents
and contractors) access to the Work in preparation and progress wherever
located, provided that such access shall not interfere with the Work.
(g) SpectraSite shall pay all royalties and license fees; shall
defend suits or claims for infringement of patent rights and shall hold Tritel
harmless from loss on account thereof, but shall not be responsible for such
defense or loss when a particular design, process or product of a particular
manufacturer or manufacturers is required by Tritel unless SpectraSite has
reason to believe that there is an infringement of patent.
(h) SpectraSite shall be responsible for initiating, maintaining
and supervising all safety precautions and programs in connection with the
performance of the Agreement. SpectraSite shall take
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reasonable precautions for safety of, and shall provide reasonable protection to
prevent damage, injury or loss to:
(1) employees on the Work, the Tower Facilities or the Property
and other persons who may be affected thereby;
(2) the Work, the Tower Facilities, the Property and materials and
equipment to be incorporated therein; and
(3) other property at the Property or adjacent thereto.
2.7 NO LIENS. SpectraSite shall keep the Tower Facilities free of all
involuntary liens and claims, including without limitation, liens and claims (a)
arising out of or related to the performance of the construction, all liens and
claims of any contractor, subcontractor, laborer, mechanic or materialman for
labor performed or material furnished in connection with the performance of the
construction; (b) liens or claims arising from taxes or assessments, except for
liens for taxes or assessments which are not yet due and payable; or (c) liens
or claims which may impair Tritel's interest. Notwithstanding the foregoing,
SpectraSite may encumber the Tower Facilities with a lien or mortgage as surety
for construction or permanent financing.
2.8 NOTIFICATION OF COMPLETION. SpectraSite shall notify Tritel of the
date when the Tower Facilities have been substantially completed by delivery of
a notice in substantially the same form attached hereto as Attachment "VIII"
("Notice of Completion"). Within fifteen (15) business days after the Notice of
Completion, Tritel shall deliver to SpectraSite a list of items ("Punch List")
that Tritel deems necessary that SpectraSite complete or correct in order for
the Tower Facilities to be completed in accordance with the Plans and
Specifications. The Tower Facilities shall be deemed accepted by Tritel if a
Punch List is not received by SpectraSite within fifteen (15) days of the date
of Notice of Completion. SpectraSite shall complete, repair, construct or modify
all the items on the Punch List within ten (10) days of receipt of the Punch
List. The Site shall not be deemed accepted until all items on the Punch List
have been completed to Tritel's reasonable satisfaction.
2.9 IMPROVEMENTS BY TRITEL. Tritel shall be responsible for procuring
any and all permits and approvals from any and all federal, state or local
governmental agencies which may be required for the installation or operation of
Tritel's Equipment (hereinafter defined) on the Tower Facilities for each Site.
Subject to the provisions of Section 3.11, Tritel shall submit plans and
specifications for the proposed installation of Tritel's Equipment to
SpectraSite for SpectraSite's approval or for each Tower Facility which depicts
the location and manner of attachment of Tritel's Equipment to the Premises.
Subject to the provisions of Section 3.11, Tritel shall be responsible for the
delivery of Tritel's Equipment to, and installation of Tritel's Equipment upon
the Premises. Subject to the provisions of Section 3.11, Tritel shall be
responsible for the installation of Tritel's Equipment on the Premises and for
connecting Tritel's Equipment to utilities which have been extended to the
Premises by SpectraSite. Subject to the provisions of Section 3.11, Tritel shall
provide at Tritel's sole cost and expense, Tritel's Equipment and all materials
and equipment for the construction, installation, operation, maintenance and
repair of Tritel's Equipment. Tritel shall not construct or install any
equipment or improvements onto the Premises other than those which are described
in the SLA or alter the radio frequency of operation of the Tritel's Equipment
without first obtaining the prior consent of SpectraSite which consent shall not
be unreasonably withheld, delayed or conditioned. In the event that the changes
to the Tritel Equipment which Tritel desires to make would increase the wind
loading or structural load on the Tower Facilities or increase the space
occupied by Tritel's Equipment on the Premises, SpectraSite may condition such
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consent upon an increase in the amount of Rent payable for that Site in
accordance with industry standards. Notwithstanding the foregoing, so long as
Tritel obtains SpectraSite's prior written approval, which approval shall not be
unreasonably withheld, delayed, or conditioned, Tritel shall have the right to
make alterations to the Premises and the Tritel Equipment (hereinafter defined)
so long as Tritel does not increase the area of space upon the Tower Facilities
or the ground space upon the Site, increase the wind or structural load upon the
Tower Facility or create material radio frequency interference with the
equipment of other users then located upon the Tower Facility
2.10 COMPLIANCE WITH GOVERNMENTAL RULES. All work required to be
performed by Tritel or Tritel's employees, contractors or agents shall be made
in a good and workmanlike manner. SpectraSite shall be entitled to require
substantial compliance with the plans and specifications approved by SpectraSite
pursuant to paragraph 2.10 including specifications for the grounding of
Tritel's equipment and antennas. All construction, installations and operations
in connection with this Master Lease by Tritel shall meet with all applicable
rules and regulations by any federal governmental authority including the FCC,
and all applicable codes and regulations of the city, county, and state
concerned.
2.11 REMEDIES FOR BREACH OF SECTION II. In the event SpectraSite fails
to perform any obligation to commence and complete construction pursuant to
Section 2.5 of this Agreement and any schedule, attachment or agreement related
thereto, provided that such delay in commencement and completion of construction
is not contributed to or caused by Tritel, which failure is not corrected or
cured by SpectraSite within five (5) days of receipt by SpectraSite of written
notice (which may be telecopy notice) from Tritel of the existence of such a
breach, Tritel shall have the right, as its sole and exclusive remedy for such
breach, to complete construction of or cause the completion of the construction
of the Tower Facilities upon notice to SpectraSite. Tritel shall have the right
to hire or retain any contractor it shall so choose to complete the construction
of the Tower Facilities in such event. SpectraSite and its employees,
contractors, subcontractors, agents and representatives shall provide Tritel and
its employees, agents, representatives, contractors and subcontractors free,
unobstructed, complete and open access to the Property and the Easements to
complete construction of the Tower Facilities, Carrier's Equipment and anything
related thereto. SpectraSite shall reimburse Tritel for the reasonable cost
actually incurred for the construction or completion of construction of the
Tower Facility any items related thereto. In the event SpectraSite fails to
reimburse Tritel for such costs within thirty (30) days following receipt of
documentation from Tritel detailing such costs, such failure shall create a
default under the applicable SLA.
III. LEASE OF THE PREMISES
3.1 PREMISES. Tritel may install, maintain, operate and remove certain
equipment on the Tower Facilities, at the heights and in those locations
designated in an SLA upon the Property. The terms and conditions of this Master
Lease shall be incorporated into each SLA and the terms and conditions of each
SLA shall be governed by the terms, covenants and conditions of this Master
Lease as though set forth in the SLA word for word. The SLA for each Site shall
be in substantially the same form as that attached hereto as Attachment "IV".
The SLA shall be executed by Tritel and SpectraSite and shall incorporate by
reference information about the Site including but not limited to the legal
description of the real property which is the subject of the Prime Lease, the
legal description of any easements for ingress, egress or utilities serving the
Premises, a description of the equipment to be located at the Site by Tritel
("Tritel's Equipment" or the "Tritel Equipment") and a mounting height of the
antennas in the instance of a Tower Facility or other structure. In no event
shall Tritel's Equipment exceed or deviate from that described in Exhibit "D" to
the SLA without the prior written consent of SpectraSite which consent shall not
be unreasonably withheld, delayed or conditioned. In the event that the
deviation from the SLA increases the wind load or structural load on the Tower
Facility or
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causes Tritel to occupy additional space on the Tower Facility or the ground
space leased in connection with the Tower Facility, SpectraSite may condition
such approval upon a reasonable increase in Rent in accordance with industry
standards. The space occupied by Tritel's Equipment on each Tower Facility, the
location of Tritel's Equipment upon the ground space adjacent to the Tower
Facility, the Easements and all cables, wiring, conduits, etc. to and from the
Tower Facilities and to and from the Tritel Equipment shall be collectively
referred to as the "Premises".
3.2 USE. (a) Subject to the provisions of Section 2.9, Tritel may use
the Premises for (i) the transmission and reception of wireless communications
signals, (ii) the construction, alteration, maintenance, replacement, repair,
and upgrade of related antennas, communications and other equipment, microwaves,
equipment, transmitters, receivers, cables, wiring, transmission lines, mounting
and grounding hardware switches, batteries, base stations, generators, back-up
power sources, cabinets, shelters and accessories and improvements related
thereto at Tritel's sole cost and expense subject to the covenants prohibiting
interference found in paragraph 3.12 of this Master Lease and provided that such
replacements and upgrades do not increase the structural or wind loading upon
any Tower or increase the space occupied by Tritel's Equipment on the Premises,
and (iii) activities related to any of the foregoing.
(b) The use of any Tower Facility granted Tritel by this Master
Lease shall be non-exclusive and limited in strict accordance with the terms of
this Master Lease. SpectraSite shall have the right to enter into lease and
license agreements with others relating to the Tower Facility and the Tower
Facility in the reasonable discretion of SpectraSite subject to the covenants,
terms and conditions of this Master Lease including, without limitation,
covenants prohibiting interference with Tritel's Equipment found in paragraph
3.13 of this Master Lease.
(c) SpectraSite and Tritel acknowledge and agree that so long as:
(1) SpectraSite approves any substituted, additional or altered
equipment, which approval shall not be unreasonably withheld,
delayed or conditioned; and
(2) Any additional or substituted equipment
(A) does not increase the wind load or structural burden upon the
Tower Facilities, and
(B) does not increase the space upon the Tower Facilities or the
ground space upon the Site, and
(C) does not create any material technical or radio frequency
interference with:
(I) any existing equipment located upon the Tower Facilities
at the time of the request for such modification or
substitution; or
(II) any equipment which SpectraSite is contractually
obligated to allow to be installed upon the Tower and such
equipment is specifically identified and scheduled to be
placed upon the Tower within forty-five (45) days of Tritel's
request for a modification or substitution,
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(III) Tritel may substitute, add, alter, modify and replace Tritel's Equipment
described in the SLA upon the Tower Facilities.
3.3 INITIAL TERM OF MASTER LEASE. The Term of this Master Lease shall
be for a period of five (5) years from the date of this Master Lease. The Master
Lease shall automatically renew for four (4) additional terms of five (5) years
each unless SpectraSite or Tritel notifies the other party of its intention not
to renew this Master Lease at least six (6) months prior to the end of the then
existing term or Renewal Term of this Master Lease. The terms and conditions of
the Master Lease which are applicable to each SLA shall survive the termination
of this Master Lease and shall remain in force and continue to apply even if the
Master Lease is terminated.
3.4 INITIAL TERM OF SLAS. The Initial Term of the SLA for each Tower
Facility shall be for a period of five (5) years commencing on the Commencement
Date as defined in Attachment VII ("Commencement Date") in the Market in which
the Premises is located, and expiring on the fifth (5th) anniversary of the
Commencement Date ("Initial Term"). Tritel and SpectraSite shall execute a
letter agreement in substantially the form of Attachment VIII, which shall be
attached to each SLA confirming the calendar date which the parties acknowledge
and agree is the Commencement Date for each SLA. Rent shall not cease during the
Initial Term except in the event that Spectrasite defaults under any SLA as
defined in this Agreement and such default is not cured within any period
provided for cure and such default gives rise to damages or any other remedy at
law or equity.
3.5 RENEWAL TERMS FOR SLA. Tritel shall have the right to extend each
SLA for four (4) additional period(s) of five (5) years each ("Renewal Terms").
Tritel shall provide SpectraSite written notice of Tritel's intent to renew any
SLA not less than one hundred twenty (120) days prior to the end of the then
existing term. Each Renewal Term shall be on the same terms and conditions as
set forth in this Master Lease except that Rent shall accrue in the manner
described on Attachment VII and the Schedules attached thereto.
3.6 QUIET ENJOYMENT. SpectraSite represents and warrants that Tritel
shall have the quiet enjoyment of the Premises throughout the term of the SLA,
without threat of hindrance, ejection or molestation.
3.7 PRIME LEASE.
(a) SpectraSite covenants that it shall not commit any act which
would result in a default or nonconformance of the Prime Lease. The SLA shall be
subject to the continued existence and enforceability of the Prime Lease,
provided, however, any termination or expiration of the Prime Lease which occurs
as a result of any default or non-conformance by SpectraSite under the terms of
the Prime Lease, without the prior written consent of Tritel, shall be construed
as an event of default under the terms of the applicable SLA. SpectraSite shall
not elect not to renew any Prime Lease and the failure to renew any Prime Lease
shall be construed as an event of default under the terms of the applicable SLA
unless SpectraSite either: (1) provides to Tritel an attornment and
non-disturbance agreement in a form reasonably acceptable to Tritel and
SpectraSite, and provides to Tritel written notice of its decision not to renew
the Prime Lease at lease sixty (60) days prior to the date that SpectraSite must
provide the Prime Lessor notice of its intent not to renew the Prime Lease; or
(2) provides Tritel with the option, which may be exercised in Tritel's sole
discretion to receive an assignment of the Prime Lease and further provided that
SpectraSite provides sufficient evidence to Tritel that the assignment of the
Prime Lease to Tritel is permitted; provided, however, that in the event that
Tritel elects not to receive such an assignment pursuant to Section 3.7(a)(2)
because there is a material defect in such Site which Tritel believes in its
reasonable opinion would impose a liability on Tritel other than those
obligations for payment of
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rent, insurance and taxes imposed by the Prime Lease and such liability would,
in the reasonable opinion of Tritel exceed the amount of Twenty Thousand and
No/100 Dollars ($20,000.00), then SpectraSite's failure to renew the Prime Lease
shall constitute a default under the applicable SLA. In either event any such
non-renewal of the Prime Lease shall not constitute an Event of Default under
the term of the Applicable SLA, provided however, that Tritel's election not to
receive an assignment of the Prime Lease shall not waive any default created by
SpectraSite's failure to renew the Prime Lease.
(b) In the event that the Prime Lease requires the Prime Lessor to
consent to the making of the applicable SLA, it shall be a condition precedent
to the effectiveness of the SLA that SpectraSite obtains such consent. The form
and content of such consent shall be subject to Tritel's approval, not to be
unreasonably withheld, delayed or conditioned.
(c) In the event that SpectraSite loses its possessory right to a
Site because of a termination or expiration of a Prime Lease, SpectraSite hereby
grants to Tritel the option to purchase the Tower Facilities on the applicable
Site (and any accessories, accessions, attachments, fixtures or other equipment
in connection therewith, etc., including without limitation storage buildings
and fences) for the fair market value of the Tower Facilities (and such
accessories, accessions, attachments, fixtures, equipment, etc.).
(d) SpectraSite agrees to exercise its best efforts to deliver a
non-disturbance and attornment agreement with the landlord under the Prime Lease
for Tritel's continued possession of the Premises under the applicable SLA
and/or the assumption of the Prime Lease by Tritel and/or assignment of the
Prime Lease to Tritel in the event that SpectraSite elects to terminate the
Prime Lease. Tritel acknowledges and agrees that the language provided in
paragraph 5 of the Estoppel Certificate attached hereto as Attachment "III" will
be sufficient to comply with the requirements of this provision. This provision
shall not imply that Tritel consents to the expiration or termination of the
Prime Lease by SpectraSite.
(e) RIGHT OF FIRST REFUSAL. (i) In the event that SpectraSite
receives a bona fide arms length offer pursuant to which an independent
non-affiliated third party (the "Third Party") would enter into a sublease,
license or other occupancy agreement with respect to a portion of the Tower
Facilities below the height specified by Tritel at the time Tritel and
SpectraSite executed an SLA, SpectraSite shall send written notice (the "Right
of First Refusal Notice") to Tritel offering to sublease the Right of First
Refusal Space to Tritel for the same rent and under the same terms and
conditions as the aforementioned bona fide offer (the "Right of First Refusal").
The Right of First Refusal Notice shall specify the height at which the offeree
intends to install its equipment and the rent that it shall pay. Tritel shall
have five (5) business days after its Receipt of the Right of First Refusal
Notice to give SpectraSite written notice of its intent to exercise the Right of
First Refusal. If Tritel does not give SpectraSite written notice of its intent
to exercise the Right of First Refusal within five (5) days, Tritel's right to
exercise the Right of First Refusal terminates as to that specific tenant and
offer. SpectraSite may then sublease or license such space to the Third Party.
(ii) In the event SpectraSite constructs a Tower Facility higher
than the height specified by Tritel at the time when Tritel and SpectraSite
execute an SLA, SpectraSite shall send Tritel a written notice specifying the
height of the Tower Facilities and offering Tritel the right to locate the
Tritel Equipment at a different height upon the Tower Facilities and Tritel
shall have the right to locate the Tritel Equipment at any level upon the Tower
Facilities upon the same terms and conditions of the original SLA (the
"Additional Height Right of First Refusal"). Tritel shall have five (5) days
after its receipt of the notice, to notify SpectraSite of its desire to locate
its equipment at a height different from which it originally specified and that
it shall exercise the Additional Height Right of First Refusal.
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(iii) SpectraSite and Tritel shall enter into and execute a
modification of the original SLA and memorandum of SLA to evidence the
modification of the height of the Tritel Equipment upon the Tower Facilities
within thirty (30) days of the date that Tritel gives SpectraSite notice that it
exercised the Right of First Refusal or the Additional Height Right of First
Refusal.
3.8 BASE RENT.
(a) RENT. As consideration for the use and occupancy of the
Premises under any SLA, Tritel shall pay SpectraSite as shown on the Schedules
on Attachment VII. Tritel and SpectraSite acknowledge and agree that the Rent
for each SLA for each of the Tritel Markets may differ and shall be negotiated
separately by each market. The Tritel Markets shall be divided into the
following markets:
o The Knoxville Market
o The Chattanooga Market
o The Nashville Market
o The Birmingham Market
o The Huntsville Market
o The Mississippi Market
o The Kentucky Market
o The Montgomery Market
o Any additional markets not specifically listed above
(each a "Market"). The rent and compensation for each Market shall be negotiated
between Tritel and SpectraSite and the separate Schedule shall be added to the
Master Lease to Attachment VII to define and set the rent and compensation for
each Market.
(b) LATE PENALTIES. Tritel hereby acknowledges that late payment
by Tritel to SpectraSite of Rent and other sums due hereunder shall cause
SpectraSite to incur costs not contemplated by this Master Lease, the exact
amount of which shall be extremely difficult to ascertain. Such costs include,
without limitation, processing and accounting charges and late charges which may
be imposed on SpectraSite by the terms of any security agreement, mortgage or
trust deed covering all or a portion of the Tower Facilities. Accordingly, if
any payment of rent or any other sum due from Tritel shall not be received by
SpectraSite or SpectraSite's designee within fifteen (15) days after written
notice that such payment has not been paid, then Tritel shall then immediately
pay to SpectraSite a late charge equal to [CONFIDENTIAL TREATMENT REQUESTED] of
such overdue amount. The parties hereto hereby agree that such late charge
represents a fair and reasonable estimate, based on the circumstances existing
as of the date hereof, of the costs SpectraSite shall incur by reason of late
payment by Tritel. Acceptance of such late charge by SpectraSite shall in no
event constitute a waiver of Tritel's default with respect to such overdue
amount or prevent SpectraSite from exercising any other right or remedy.
3.9 TRITEL'S EQUIPMENT. Tritel's Equipment shall remain Tritel's
exclusive personal property throughout the term and upon termination of the SLA.
Tritel shall have the right to remove all the Tritel's Equipment at Tritel's
sole cost and expense on or before the expiration or earlier termination of the
SLA, provided that Tritel repairs any damage to the Premises, the Property or
the Tower Facilities caused by such removal, provided that Tritel shall not be
obligated to remove any pads, utilities or similar permanent fixtures.
SpectraSite and SpectraSite's agents shall have the right to enter the Property
and the tower located upon the Property at reasonable times for the purpose of
inspecting the same.
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3.10 MECHANICS' LIENS. Tritel shall not permit any mechanics',
materialmen's, contractors' or subcontractors' liens arising from any
construction work, repair, restoration or removal or any other claims or demands
to be enforced against the Tower Facilities or the Property or any part thereof.
SpectraSite shall have the right at any time to post and maintain upon the
Property such notices as may be necessary to protect SpectraSite against
liability for all such liens and encumbrances. SpectraSite shall assume no
liability for the payment of materials or labor which arise from the
installation of Tritel's improvements upon the Premises and no mechanics' or
materialmen's liens for Tritel's improvements shall attach to the interest of
SpectraSite in the Tower Facilities.
3.11 MAINTENANCE AND REPAIRS
(a) Tritel shall perform all repairs necessary or appropriate to
Tritel's Equipment to maintain Tritel's Equipment in a good and tenantable
condition, reasonable wear and tear, damage by fire, the elements or other
casualty excepted damage to Tritel's Equipment resulting from the acts or
omissions of SpectraSite shall be repaired by Tritel at SpectraSite's cost and
expense; SpectraSite shall reimburse Tritel for the actual reasonable costs
incurred as evidenced by adequate documentation by Tritel in repairing such
damage or replacing Tritel's Equipment.
(b) SpectraSite shall maintain the Tower Facilities, the Site, the
Easements, and portions of the Property other than Tritel's Equipment (i) in
good order and repair, wear and tear, damage by fire, the elements or other
casualty excepted; (ii) in such condition that the Tower Facilities an d the
Property are required to be maintained by SpectraSite pursuant to the Prime
Lease; and (iii) in compliance with all rules, laws, codes, or regulations of
any governmental entity. Damage to the Tower Facilities or the equipment or
improvements of SpectraSite or others located on the Property or the Tower
Facilities, which results from the acts or omissions of Tritel shall be repaired
by Tritel at Tritel's cost and expense, or at the option of SpectraSite, Tritel
shall reimburse SpectraSite for the actual reasonable costs incurred by
SpectraSite in repairing such damage or replacing such equipment or improvements
as evidenced by adequate documentation. Notwithstanding the foregoing or other
provisions in this Master Lease to the contrary, SpectraSite may delegate its
obligations to maintain or repair the Tower Facilities to another company
provided that such delegation does not increase the costs of said services over
and above that which would have been charged by SpectraSite and provided that
such delegation does not in effect, delegate all or a substantial portion of
SpectraSite's obligations under this Agreement.
(c) SpectraSite assumes no responsibility for the licensing,
operation and maintenance of the Tritel's Equipment.
3.12 UTILITIES. Tritel shall be solely responsible for the payment of
utility charges including connection charges and security deposits incurred in
association with the Tritel's Equipment. Tritel will be responsible for setting
up their account for ongoing power usage. SpectraSite will be responsible for
bringing in power to the Tower Site in terms of the meter, base, conduits and
the primary power run from the nearest utility pole. Tritel will coordinate with
the utility companies for the meter for the Tritel Equipment. SpectraSite shall
provide and install telephone conduits inside the compound of the Tower
Facility. Tritel will order T-1 circuits for the Tower Site. SpectraSite will
coordinate the telephone copper punch block, i.e. the telephone pedestal. Any
fiber facilities will be the responsibility of Tritel. Tritel may install or
improve existing utilities servicing the Tower Facility and may install an
electrical grounding system or improve or connect to any existing electrical
grounding system to provide the greatest possible protection from lightning
damage to the Tower Facility. In addition thereto, Tritel may connect its
utilities to any emergency generator or similar emergency
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power source which SpectraSite may have at the Tower Site or the Property.
SpectraSite shall assist Tritel in obtaining any utility services necessary to
service the Tritel Equipment including, without limitation, any meters,
telephone lines or services to the Premises.
3.13 INTERFERENCE AND MAXIMUM PERMISSIBLE EXPOSURE.
(a) BY OTHER OCCUPANTS. SpectraSite may enter into sublease or
license agreements with other companies for the Tower Facilities which are the
subject of this Master Lease, provided that SpectraSite shall require such
Sublessee or licensee to install equipment of types and frequencies that will
not cause interference to Tritel's communications operations then being
conducted from the Premises and subject to the provisions of this Master Lease.
SpectraSite agrees that in the event such Sublessee or licensee causes
interference with Tritel's Equipment, SpectraSite will require such Sublessee or
licensee to take all steps necessary to correct and eliminate the interference.
If such interference cannot be eliminated within forty-eight (48) hours after
receipt by SpectraSite of notice from Tritel of the existence of interference,
SpectraSite shall take such actions as are permitted by law and can be conducted
without breach of the peace such as causing such Sublessee or licensee to
disconnect the electric power and shut down such sublease's or licensee's
equipment (except for intermittent operation for the purpose of testing, after
performing maintenance, repair, modification, replacement, or other action taken
for the purpose of correcting such interference) until such interference is
corrected. If such interference is not rectified to the reasonable satisfaction
of Tritel within thirty (30) days after receipt by SpectraSite of such prior
notice from Tritel of the existence of interference, SpectraSite shall cause
such Sublessee or licensee to remove such sublease's or licensee's antennas and
equipment from the Tower Facilities.
(b) BY TRITEL. In no event shall Tritel alter the operations of
Tritel's Equipment or replace, upgrade or otherwise modify the operations of
Tritel's Equipment in a manner which will cause interference with the operations
of any other equipment which is then in existence on the Tower and for which
SpectraSite has a written contractual agreement. Tritel agrees that in the event
Tritel's Equipment causes interference with any existing equipment upon the
Tower Facilities which was placed upon the Tower Facilities prior to the
installation of any modifications to the Tritel Equipment upon the Tower
Facilities, Tritel will take all steps necessary to correct and eliminate the
interference. If such interference cannot be eliminated within forty-eight (48)
hours after receipt by Tritel from SpectraSite of notice of the existence of
interference, Tritel shall cease operation of Tritel's Equipment (except for
intermittent operation for the purpose of testing, after performing maintenance,
repair, modification, replacement, or other action taken for the purpose of
correcting such interference) until such interference is corrected. Tritel
covenants that Tritel's Equipment shall be operated in compliance with all
applicable federal state and local laws, ordinances and regulations. Tritel
agrees to exercise its best efforts to reasonably cooperate with SpectraSite and
any future occupants of the Tower Facilities with contractual agreements with
SpectraSite to try to resolve any interference issues or problems which may
arise regarding interference by the Tritel Equipment with such other occupants
radio frequency emissions from the Tower Facilities (at the expense of such
occupants or SpectraSite).
(c) MAXIMUM PERMISSIBLE EMISSIONS, COOPERATIVE EFFORTS. If antenna
power output ("FR Emissions") becomes subject to any restrictions imposed by the
FCC or any other government agency for FR Emissions standards on Maximum
Permissible Exposure ("ME") limits, or if the Tower Facilities otherwise become
subject to federal, state or local rules, regulations, restrictions or
ordinances, Tritel shall comply with SpectraSite's reasonable requests for
modifications to Tritel's Equipment which are reasonably necessary for
SpectraSite to comply with such limits, rules, regulations, restrictions or
ordinances. The FR Emissions requirements of Tritel shall be subordinate to any
prior users of the Tower Facilities. Similarly, the FR
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Emissions of users subsequent to Tritel shall become subordinate to any
requirements of Tritel. If SpectraSite or Tritel require an engineering
evaluation or other power density study be performed to evaluate FR Emissions
compliance with ME limits, then all reasonable costs of such an evaluation or
study shall be shared equally between SpectraSite, Tritel, and any other users
of the Tower Facilities. If said study indicates that FR Emissions at the Tower
Facility do not comply with ME limits, then SpectraSite, Tritel, and subsequent
tenants shall immediately take any steps necessary to ensure that they are
individually in compliance with such limits or shall at the demand of
SpectraSite cease operations until a maintenance program or other mitigating
measures can be implemented to comply with ME. Tritel shall have the right,
without waiving any other rights or remedies, to terminate the SLA applicable to
any such site in the event that such mitigation measures cannot be implemented
without materially adversely affecting the operation of the Equipment.
(d) SIGNAGE REGARDING ME. Tritel acknowledges and understands that
SpectraSite may install certain signage and/or physical barriers pertaining to
radio frequency exposure from transmitters and other equipment located upon the
Tower Facilities. SpectraSite and Tritel shall instruct all of their personnel
and their contractors performing work at the Tower Facilities, the Property or
the Premises, to read carefully all such signage, to follow the instructions
provided in such signage, and to honor all physical barriers. Tritel shall be
responsible for placement of signage or physical barriers at or near the Tritel
Equipment and/or its cabinet or building at the Premises in order to comply with
applicable FCC radio frequency exposure guidelines. SpectraSite agrees that it
shall cooperate with Tritel in these efforts and that SpectraSite shall instruct
its personnel and contractors performing work at the Property, the Tower
Facilities and the Premises to read carefully all such signage, to follow the
instructions provided in such signage, and to honor all physical barriers. In no
event shall SpectraSite's personnel or contractors tamper with any such signage
or barriers. SpectraSite and Tritel shall cooperate in good faith to minimize
any confusion or unnecessary duplication that could result from similar signage
being posted respecting other carriers' transmission equipment (if any) at or
near the Premises, the Tower Facilities and the Property.
3.14 TOWER MARKING AND LIGHTING REQUIREMENTS. SpectraSite shall be
responsible for designing and maintaining the Tower Facilities to comply with
any applicable marking and lighting requirements imposed by the FAA and the FCC.
SpectraSite shall be responsible for the replacement of bulbs and for the repair
of the tower lighting system within a reasonable time after receipt of notice
from Tritel of the need for the replacement of bulbs or the repair of the tower
lighting systems.
3.15 INDEMNIFICATION AND RISK OF LOSS.
(a) Tritel shall exonerate, hold harmless, indemnify, and defend
SpectraSite 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 (i) any injury to or the death of any
person; or (ii) any damage to property, if such injury, death or damage arises
out of or is attributable to or results from Tritel's use and occupancy of the
Premises or the negligent or intentional acts or omissions of Tritel or Tritel's
principals, employees, agents or independent contractors to the extent that such
injury, death or damage is not contributed to or caused by the acts or omissions
of SpectraSite or SpectraSite's use, operation or ownership of the Property or
the Tower Facilities; and
(b) SpectraSite shall exonerate, hold harmless, indemnify and
defend Tritel 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 (i) any injury to or the death of any
person; or (ii) any damage to property, if such injury, death or damage arises
out of or is attributable to or results from
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SpectraSite's use, operation or ownership of the Property or the Tower
Facilities, or the negligent or intentional acts or omissions of SpectraSite or
SpectraSite's principals, employees, agents or independent contractors, to the
extent that such injury, death or damage is not caused by or contributed to by
the acts or omissions of Tritel or Tritel's use or operation of the Tower
Facilities or Property or its ownership interest in the Premises.
3.16 ENVIRONMENTAL INDEMNIFICATION.
(a) Tritel, its heirs, grantees, successors, and assigns shall
indemnify, defend, reimburse and hold harmless SpectraSite from and against any
and all environmental damages, caused by activities conducted on the Premises by
Tritel which result in or arise from (i) the presence of any substance, chemical
or waste identified as hazardous, toxic or dangerous in any applicable federal,
state or local law or regulation including petroleum or hydrocarbon based fuels
such as diesel, propane or natural gas (collectively, "Hazardous Materials")
upon, about or beneath the Premises or migrating to or from the Premises which
were introduced to the Premises by Tritel, or (ii) the violation of any
environmental requirements by Tritel pertaining to the Premises and any
activities thereon. Tritel covenants that it shall not nor shall Tritel allow
its employees, agents or independent contractors to treat, store or dispose of
any Hazardous Materials on the Premises or the Property in violation of any
applicable law.
(b) SpectraSite, its heirs, grantees, successors, and assigns
shall indemnify, defend, reimburse and hold harmless Tritel from and against any
and all environmental damages, caused by activities conducted on the Premises by
SpectraSite which result in or arise from (i) the presence of Hazardous
Materials upon, about or beneath the Premises or migrating to or from the
Premises which were introduced to the Premises by SpectraSite, or (ii) the
violation of any environmental requirements by SpectraSite pertaining to the
Premises and any activities thereon. SpectraSite covenants that it shall not,
nor shall SpectraSite allow its employees, agents or independent contractors to
treat, store or dispose of any Hazardous Materials on the Premises or the
Property in violation of any applicable law.
3.17 INSURANCE. (a) Tritel shall procure and maintain during the term
of this Master Lease the following insurance: (i) "All Risk" property insurance
which insures Tritel's Equipment for their 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 provided that the imposition of these
limits of insurance shall not limit the liability of Tritel hereunder.
(b) SpectraSite shall maintain statutory Workers Compensation
Insurance and Employees' Liability for the statutory limit, but in no event no
less than One Million and No/100 Dollars ($1,000,000.00). SpectraSite agrees to
maintain general liability insurance and property insurance, in amounts deemed
reasonable and satisfactory to SpectraSite and Tritel, and which are in amounts
consistent with industry practices for the business in which SpectraSite is
engaged. Upon the prior written approval of Tritel which approval shall not be
unreasonably withheld, delayed or conditioned, SpectraSite shall have the right
to self insure, provided that SpectraSite shall maintain reserves consistent
with industry practices and approved by Tritel and that SpectraSite shall
maintain an excess coverage umbrella policy consistent with industry practices
and approved by Tritel.
(c) SpectraSite and any party holding a security interest in the
Tower Facilities which is identified to Tritel and any party holding a security
interest in Tritel's Equipment shall be named as an additional insured on any
insurance policy procured by Tritel pursuant to this Master Lease and Tritel and
any
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party holding a security interest in the Tritel Equipment who is identified to
SpectraSite shall be named as an additional insured on any insurance policy
procured by SpectraSite pursuant to this Master Lease.
3.18 SUBROGATION.
(a) IN GENERAL. All insurance policies required to be maintained
by Tritel and SpectraSite under this Master Lease shall contain a waiver of
subrogation provision under the terms of which the insurance carrier waives all
of such carrier's rights to proceed against SpectraSite.
(b) MUTUAL RELEASE. SpectraSite and Tritel each release the other
and their respective representatives from any claims by them or any one claiming
through or under them by way of subrogation or otherwise for damage to any
person or to the Premises and to the fixtures, personal property, improvements
and alterations in or on the Premises that are caused by or result from risks
insured against under any insurance policy carried by them, provided that such
releases shall be effective only if and to the extent that the same do not
diminish or adversely affect the coverage under such insurance policies.
3.19 DESTRUCTION OR CONDEMNATION. If the whole or any substantial part
of the Premises, the Tower Facilities or the Property shall be taken by any
public authority under the power of eminent domain, or if the whole or any
substantial part of the Premises, the Tower Facilities or the Property shall be
destroyed by fire or other casualty, so as to interfere with Tritel's use and
occupancy thereof, then the applicable SLA shall cease on the part so taken on
the date of possession by such authority of that part, (or in the event that
Tritel must remove Tritel's Equipment prior to that date, the date Tritel must
move Tritel's Equipment) and any unearned rent paid in advance of such date
shall be refunded by SpectraSite to Tritel within thirty (30) days of such
possession, and Tritel shall have the right to terminate the SLA upon written
notice to SpectraSite, which notice shall be delivered by Tritel within thirty
(30) days following the date notice is received by Tritel of such taking or
possession. If Tritel chooses not to terminate the SLA, the rent shall be
reduced or abated in proportion to the actual reduction or abatement of Tritel's
use of the Premises. In the event of any taking, destruction or other casualty
hereunder which prevents Tritel's use and occupancy of the Premises and/or the
Tower Facilities, subject to the terms of the Prime Lease (including obtaining
any necessary approvals thereunder) the Licensee shall have the option of
placing a temporary communications facility upon the Property for a period of up
to one year at a rate mutually agreeable to the parties.
3.20 DEFAULT. The occurrence of any of the following instances shall be
considered to be a default or a breach of the Applicable SLA by Tritel:
(a) any failure of Tritel to pay Rent or any other charge for
which Tritel has the responsibility of payment under this Master Lease, within
fifteen (15) days of written notice thereof; or
(b) any failure of Tritel to perform or observe any term,
covenant, provision or conditions of this Master Lease which failure is not
corrected or cured by Tritel within thirty (30) days of receipt by Tritel of
written notice from SpectraSite of the existence of such a default; except such
thirty (30) day cure period shall be extended as reasonably necessary to permit
Tritel to complete a cure so long as Tritel commences the cure within such
thirty (30) day cure period and thereafter continuously and diligently pursues
and completes such cure; provided, however, that in the event such default
exposes SpectraSite to potential liability for damages, fines or penalties or
causes a breach of any other agreement to which SpectraSite is a party, Tritel
shall immediately remedy such conditions or SpectraSite shall be entitled to
remedy such condition at Tritel's reasonable cost and expense; or
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(c) Tritel shall become bankrupt, insolvent or file a voluntary
petition in bankruptcy, have an involuntary petition in bankruptcy filed against
Tritel which is not dismissed within sixty (60) days of the date of the filing
of the involuntary petition, file for reorganization or arrange for the
appointment of a receiver or trustee in bankruptcy or reorganization of all or a
substantial portion of Tritel's assets, or Tritel makes an assignment for such
purposes for the benefit of creditors;
(d) this Master Lease or Tritel's interest herein or Tritel's
interest in the Premises are executed upon or attached and such execution or
attachment is not dismissed, released or removed within thirty (30) days of the
execution or attachment; or
(e) the imposition of any lien on the Tritel's Equipment except as
may be expressly authorized by this Master Lease, or an attempt by Tritel or
anyone claiming through Tritel to encumber SpectraSite's interest in the Tower
Facilities or the Property and such lien or encumbrance is not dismissed,
released or removed within thirty (30) days of such imposition or attempt; or
(f) the abandonment of the Premises in the event that such
abandonment would cause the revocation or rescission of any Government Approvals
for the Tower Facilities and another carrier is located upon the Tower
Facilities and such abandonment is not within thirty (30) days of written notice
thereof.
SpectraSite understands and agrees that a default by Tritel under the
terms of any SLA shall constitute an event of default under that Applicable SLA
but shall not constitute a default under any other SLAs and that SpectraSite
shall have the right but not the obligation to those remedies afforded to
SpectraSite at law or in equity and by paragraph 3.20 for each Site which is
subject to this Master Lease, provided, however, that in the event that any
default hereunder occurs under more than thirty-five percent (35%) of the SLAs
in effect under this Agreement at any single instance and such defaults are not
cured within t he notice periods provided herein, the aggregate of such defaults
shall constitute a default under the terms of this Agreement and SpectraSite
shall have the right but not the obligation to those remedies afforded to
SpectraSite at law or in equity by paragraph 3.20 for all of the Sites and the
SLAs which are subject to the Master Lease. The forbearance of SpectraSite to
exercise any remedies available to SpectraSite shall not constitute a wavier of
the ability of SpectraSite to exercise those remedies for the same or subsequent
defaults.
3.21 REMEDIES OF SPECTRASITE. In the event of a default by Tritel under
the terms of paragraph 3.19 of this Master Lease and after Tritel's failure to
cure such default within the time allowed to cure such default, then SpectraSite
may, in addition to all other rights or remedies that SpectraSite may have
hereunder at law or in equity;
(a) Terminate Tritel's right to possession of the Premises by any
lawful means, in which case the Applicable SLA shall terminate and Tritel shall
immediately surrender possession of the Premises to SpectraSite and SpectraSite
may re-enter the Premises and take possession thereof and remove all persons
therefrom, and Tritel shall have no further claim to the Premises or the
Applicable Tower Site under this Master Lease. Such termination shall not
relieve Tritel of any obligation hereunder and SpectraSite may also accelerate
the rent due for the balance of the then existing Term and declare all such
rentals to be immediately due and payable. In the event of any such termination,
SpectraSite shall also be entitled to recover from Tritel all damages incurred
by SpectraSite by reason of Tritel's default or breach including, without
limitation, (i) the cost of recovering possession of the Premises, (ii) expenses
of reletting including costs of necessary renovation and alteration of the
Premises, reasonable attorneys' fees and any real estate commission actually
paid, (iii) the amount of unpaid rent for the balance of the term, and (iv) that
portion of any brokerage fee paid by SpectraSite
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in respect of the SLA applicable to the unexpired term hereof. SpectraSite may
maintain Tritel's right to possession of the Premises, in which case the
Applicable SLA shall continue in effect whether or not Tritel shall have
abandoned the Premises, and enforce SpectraSite's rights and remedies under this
Master Lease and the applicable SLA including, without limitation, the right to
recover rent as it becomes due hereunder.
(b) Alternatively, SpectraSite may expel Tritel from the Premises
without terminating the Applicable SLA, make such alterations and repairs as
which may be necessary in order to relet the Premises and may relet the Premises
or any part thereof for such term or terms (which may be for a term extending
beyond the term of this Master Lease) and at such rental or rentals and upon
such other terms and conditions as SpectraSite in its discretion may deem
advisable. Upon each such reletting all rentals and other sums received by
SpectraSite from such reletting shall be applied, first, to the payment of any
costs and expenses of such reletting, including reasonable brokerage fees and
attorneys' fees and of costs of such alterations and repairs; second, to the
payment of rental and other charges due and unpaid under the applicable SLA;
third to the payment of any indebtedness other than rental due hereunder from
Tritel to Spectrasite; and the residue, if any, shall be held by SpectraSite and
applied in payment of future rental and other charges payable by Tritel
hereunder as the same may become due and payable under the Applicable SLA. If
such rentals and other sums received from such reletting during any month are
less than that to be paid during that month by Tritel hereunder, Tritel shall
pay such deficiency to SpectraSite ; if such rentals and sums shall be more,
Tritel shall have no right to the excess. Such deficiency shall be calculated
and paid monthly. No re-entry or taking possession of the Premises by
SpectraSite shall be construed as an election on its part to terminate this
Master Lease unless a written notice of such intention is given to Tritel or
unless the termination thereof is decreed by a court of competent jurisdiction.
Notwithstanding any such reletting without termination, SpectraSite may at any
time hereafter elect to terminate the Applicable SLA for such previous breach
and pursue any other remedy now or hereafter available to SpectraSite at law or
in equity.
3.22 MITIGATION BY SPECTRASITE. No efforts by SpectraSite to mitigate
the damage by Tritel's default under this Master Lease shall be deemed a waiver
of SpectraSite's rights to recover damages under this Master Lease.
3.23 DEFAULT BY SPECTRASITE. The occurrence of any of the following
instances shall be considered to be a default or a breach of the Applicable SLA
by SpectraSite:
(a) any failure of SpectraSite to pay any charge for which
SpectraSite has the responsibility of payment under this Master Lease or any SLA
within fifteen (15) days of written notice from Tritel, or its agents or
representatives thereof; or
(b) any failure of SpectraSite to perform or observe any term,
covenant, provision or conditions of this Master Lease or any SLA which failure
is not corrected or cured by SpectraSite within thirty (30) days of receipt by
SpectraSite of written notice from Tritel of the existence of such a default;
except such thirty (30) day cure period shall be extended as reasonably
necessary to permit SpectraSite to complete a cure so long as SpectraSite
commences the cure within such thirty (30) day cure period and thereafter
continuously and diligently pursues and completes such cure; provided, however,
that in the event such default exposes Tritel to potential liability for
damages, fines or penalties or causes a breach of any other agreement to which
Tritel is a party, SpectraSite shall immediately remedy such conditions or
Tritel shall be entitled to remedy such condition at SpectraSite's sole cost and
expense; or
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(c) SpectraSite shall become bankrupt, insolvent or file a
voluntary petition in bankruptcy, have an involuntary petition in bankruptcy
filed against SpectraSite which is not dismissed within sixty (60) days of the
date of the filing of the involuntary petition, file for reorganization or
arrange for the appointment of a receiver or trustee in bankruptcy or
reorganization of all or a substantial portion of SpectraSite's assets, or
SpectraSite makes an assignment for such purposes for the benefit of creditors;
(d) this Master Lease or SpectraSite's interest herein or
SpectraSite's interest in the Premises, the Tower Facilities or the Property are
executed upon or attached and such execution or attachment is not dismissed,
released or removed within thirty (30) days of the execution or attachment; or
(e) the imposition of any lien on the Tower Facilities except as
may be expressly authorized by this Master Lease, or an attempt by SpectraSite
or anyone claiming through SpectraSite to encumber Tritel's interest in the
Tower Facilities or the Property and such lien or encumbrance is not dismissed,
released or removed within thirty (30) days of such imposition or attempt.
SpectraSite understands and agrees that a default by SpectraSite under the terms
of any SLA shall constitute an event of default under that SLA but shall not
constitute a breach or a default under any other SLA and that Tritel shall have
the right but not the obligation to those remedies afforded to Tritel at law or
in equity and by paragraph 3.23 for each Tower Facility which is subject to this
Master Lease, provided however, that in the event that any default hereunder
occurs under more than thirty-five percent (35%) of the SLAs in effect under
this Agreement at any single instance and such defaults are not cured within the
notice periods provided herein, the aggregate of such defaults shall constitute
a default under the terms of this Agreement and Tritel shall have the right but
not the obligation to those remedies afforded to Tritel at law or in equity by
Paragraph 3.23 for all of the sites and the SLAs which are subject to the Master
Lease. The forbearance of Tritel to exercise any remedies available to Tritel
shall not constitute a wavier of the ability of Tritel to exercise those
remedies for the same or subsequent defaults.
3.24 REMEDIES OF TRITEL. In the event of a default by SpectraSite under
the terms of Paragraph 3.22 of this Master Lease or any SLA, and after
SpectraSite's failure to cure such default within the time allowed to cure such
default, then Tritel may, (a) sue for damages; and/or (b) terminate the
applicable SLA, without waiving its right to sue for damages, such remedies to
be cumulative and concurrent or sequential at the election of Tritel, in
addition to all other rights and remedies Tritel may have at law or equity. In
the event a default occurs under more than thirty-five percent (35%) of the SLAs
in effect under this Agreement at any single instance and such defaults are not
cured within the notice periods provided in section 3.22, then Tritel may (a)
sue for damages; and/or (b) terminate the Master Lease without waiving its right
to sue for damages; in addition to all other rights and remedies Tritel may have
at law or equity. All of the remedies provided in this Agreement or in any other
SLA or at law or in equity are cumulative and Tritel may exercise such remedies
concurrently or sequentially in such order as it may choose.
3.25 MITIGATION BY TRITEL. No efforts by Tritel to mitigate the damage
by SpectraSite's default under this Master Lease shall be deemed a waiver of
Tritel's rights to recover damages under this Master Lease.
3.26 SUBORDINATION. This Master Lease and any option or right of first
refusal granted hereunder, at SpectraSite's option, shall be subordinate to any
mortgage, deed of trust or other encumbrance now or hereafter placed upon the
Premises and to any and all advances made on the security thereof and to all
renewals, modifications, consolidations, replacements and extensions thereof,
provided that the beneficiary or lender under such mortgage, deed of trust or
other encumbrance enters into a satisfactory non-disturbance and
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attornment agreement with Tritel. Subject to the provisions of Section 3.7 of
this Master Lease, any SLA shall. be subject to the terms and provisions of the
Prime Lease.
IV. GENERAL PROVISIONS
4.1 NOTICES. All notices or demands by or from SpectraSite to Tritel,
or Tritel to SpectraSite, shall be in writing. Such notices or demands shall be
mailed to the other party at the following address:
SpectraSite SpectraSite Communications, Inc.
8000 Regency Park, Suite 570
Cary, NC 27511
Attention: Contracts Management
Tritel: Tritel Communications, Inc.
112 E. State Street
Suite B
Ridgeland, MS 39157
Attention: Ken Harris
4.2 ASSIGNMENTS AND SUBLEASES
(a) LIMITATIONS ON ASSIGNMENT BY TRITEL. Tritel shall not
voluntarily, involuntarily or by operation of law assign, sell, sublease or
otherwise transfer Tritel's interest in this Master Lease, any SLA(s), any Tower
Facility(ies), any Ground Lease(s), any Property(ies) or Premises, without
SpectraSite's prior written consent which consent may not be unreasonably
withheld, delayed or conditioned. Notwithstanding the foregoing, in the event of
a proposed assignment, Tritel may, upon fifteen (15) days' written notice to
SpectraSite, assign this Master Lease, any SLA(s), any Tower Facility(ies), and
Ground Lease(s), and any Property(ies) without SpectraSite's consent if the
proposed assignee, transferee or sublessee provides audited (i) balance sheets
and (ii) statements of operations prepared in accordance with GAAP which
indicate that the assignee has a financial position sufficient to meet its
obligations under this Agreement. If Tritel otherwise desires at any time to
assign or otherwise transfer this Master Lease, any SLA, any Tower Facility, any
Ground Lease, any Property and/or any Premises it shall first notify SpectraSite
of its desire to do so and shall submit in writing to SpectraSite (i) the name
of the proposed sublessees, transferee, purchaser or assignee; (ii) the, terms
and provisions of the proposed sublease, transfer or assignment; and (iii) such
financial and other information as SpectraSite may reasonably request concerning
the proposed Sublessee, transferee, purchaser or assignee. At anytime within
fifteen (15) days after SpectraSite's receipt of the information specified,
SpectraSite may by written notice to Tritel: consent to the subletting or
assignment upon the terms and to the sublessees, transferees, purchasers or
assignees proposed or refuse to give its consent. If SpectraSite consents to
such assignment, purchase, transfer or subletting, Tritel may, within ninety
(90) days after the date of SpectraSite's consent, enter into a valid
assignment, purchase, transfer or sublease of the Master Lease, the applicable
SLA, the applicable Tower Facility, the applicable Premises, or portion thereof
upon the terms and conditions described in the information required above to be
furnished by Tritel to SpectraSite, or upon other terms not more detrimental to
SpectraSite; provided, however, that any material change in such terms shall be
subject to SpectraSite's consent. In such event, Tritel shall be relieved of all
liabilities hereunder relating to the assets which are assigned.
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(b) PLEDGES BY TRITEL. Notwithstanding anything else contained
herein, Tritel may, without notice or consent of SpectraSite, pledge, mortgage,
convey by deed of trust or security deed, assign, create a security interest in,
or otherwise execute and deliver any and all instruments for the purpose of
securing bona fide indebtedness all or any part of Tritel's interest in this
Master Lease, any SLA, any Premises and/or all or any portion of Lessee's right,
title, and interest in and to any and/or all of the Tritel Equipment. Promptly
on Tritel's or Tritel's lender's request, SpectraSite shall execute and deliver,
and shall assist in facilitating the execution and delivery of, all documents
reasonably requested by any of Tritel's lenders including, but not limited to,
waivers of SpectraSite's right to levy or distrain upon for rent any of Tritel's
property given as security for a debt, acknowledgements that none of the Tritel
Equipment shall become fixtures, consents to Tritel's assignment to any
lender(s) of any and all of Tritel's interest in or to this Agreement, any SLA
or Premises, and the Tritel Equipment, consents to giving notice to Tritel's
lender(s) notice in the event of Tritel's default under the provisions of the
SLA or the Master Lease, provided that such Lender requests notice from and
provides notice addresses to SpectraSite and nondisturbance agreements from
SpectraSite; provided, however, that all such documents and consents shall be in
a form which is reasonably acceptable to SpectraSite and which will not
materially increase SpectraSite's burdens nor materially impair SpectraSite's
rights under this Master Lease or any SLA. Tritel shall reimburse SpectraSite
for any out-of-pocket costs incurred by SpectraSite in complying with this
provision including, but not limited to, SpectraSite's reasonable attorneys'
fees incurred in reviewing and negotiating such documents and consents.
(c) LIMITATIONS ON ASSIGNMENT BY SPECTRASITE. (i) SUBLEASE.
SpectraSite shall have the right, subject to the provisions of this Agreement
and the restrictions in paragraph 3.13 hereof, to sublease portions of the Tower
Facilities, the Property or the Easements in SpectraSite's discretion without
obtaining Tritel's consent or giving notice to Tritel, provided that such
sublease does not violate the provisions of and is subject to the provisions of
this Master Lease and any applicable SLA, and provided that such sublease only
leases or licenses a portion of the Tower Facilities or portion of the Property
and a portion of the Easements and does not effect a sublease of the entire
Tower Facilities, the entire Property or the Entire Easement.
(ii) ASSIGNMENT. SpectraSite shall not voluntarily, involuntarily
or by operation of law assign, sell, sublease or otherwise transfer
SpectraSite's interest in this Master Lease, any SLA(s), any Tower
Facility(ies), any Ground Lease(s), any Property(ies) [except as provided in
4.2(c)(i)] or Premises, without Tritel's prior written consent which consent may
not be unreasonably withheld, delayed or conditioned. Notwithstanding the
foregoing, in the event of a proposed assignment, SpectraSite may, upon fifteen
(15) days' written notice to Tritel, assign this Master Lease, any SLA(s), any
Tower Facility(ies), any Ground Lease(s), and any Property(ies) without Tritel's
consent if the proposed assignee, mortgagee or sublessee provides audited (i)
balance sheets and (ii) statements of operations prepared in accordance with
GAAP which indicate that the assignee has a financial position sufficient to
meet its obligations under this Agreement. If SpectraSite otherwise desires at
any time to assign or otherwise transfer this Master Lease, any SLA, any Tower
Facility, any Ground Lease, any Property or Premises it shall first notify
Tritel of its desire to do so and shall submit in writing to Tritel (i) the name
of the proposed sublessees, transferee, purchaser or assignee; (ii) the, terms
and provisions of the proposed sublease, transfer or assignment; and (iii) such
financial and other information as Tritel may reasonably request concerning the
proposed Sublessee, transferee, purchaser or assignee. At any time within
fifteen (15) days after Tritel's receipt of the information specified, Tritel
may by written notice to SpectraSite: consent to the subletting or assignment
upon the terms and to the sublessees, transferees, purchasers or assignees
proposed or refuse to give its consent. If Tritel consents to such assignment,
purchase, transfer or subletting, SpectraSite may, within ninety (90) days after
the date of Tritel's consent, enter into a valid assignment, purchase, transfer
or sublease of the Master Lease, the applicable SLA(s), the applicable Tower
Facility, the applicable Ground Lease, the applicable Property or applicable
Premises or portion thereof
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upon the terms and conditions described in the information required above to be
furnished by SpectraSite to Tritel, or upon other terms not more detrimental to
Tritel; provided, however, that any material change in such terms shall be
subject to Tritel's consent. In such event, SpectraSite shall be relieved of all
liabilities hereunder relating to the assets which are assigned.
(d) PLEDGE BY SPECTRASITE. Notwithstanding anything else contained
herein, SpectraSite may, without notice or consent of Tritel, pledge, mortgage,
convey by deed of trust or security deed, assign, create a security interest in,
or otherwise execute and deliver any and all instruments for the purpose of
securing bona fide indebtedness all or any part of SpectraSite's interest in
this Master Lease, any SLA, any Premises, and/or all or any portion of
SpectraSite's right, title, and interest in and to any and/or all of Tower
Facilities, the Property or the Easements. Promptly on SpectraSite's or
SpectraSite's lender's request, Tritel shall execute and deliver, and shall
assist in facilitating the execution and delivery of, all documents requested by
any of SpectraSite's lenders including, but not limited to, consents to giving
notice to SpectraSite's lender(s) in the event of SpectraSite's default under
the provision of the SLA or the Master Lease, and consents to SpectraSite's
assignment to any lender(s) of any and all of SpectraSite's interest in or to
this Agreement, any SLA or Premises provided, however, that all such documents
and consents shall be in a form which is reasonably acceptable to Tritel and
which will not materially increase SpectraSite's burdens nor materially impair
Tritel's rights under this Master Lease or any SLA. SpectraSite shall reimburse
Tritel for any out-of-pocket costs incurred by Tritel in complying with this
provision including, but not limited to, Tritel's reasonable attorneys' fees
incurred in reviewing and negotiating such documents and consents.
(e) ASSIGNMENT OF CONSTRUCTION OBLIGATIONS. Notwithstanding
anything else contained herein, SpectraSite shall not voluntarily,
involuntarily, or by operation of law assign or otherwise transfer its rights or
obligations (including, but not limited to, the obligation to construct the
Tower Facilities) relating to any Site which is subject to this Agreement, prior
to the acceptance of a Site by Tritel pursuant to paragraph 2.8 hereof.
4.3 REPRESENTATIONS AND WARRANTIES OF TRITEL. Tritel represents and
warrants to SpectraSite that:
(a) ORGANIZATION, GOOD STANDING AND AUTHORITY. It 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 enter
into and perform this Master Lease and Tritel is duly qualified to do business
in the states of Alabama, Florida, Mississippi, Tennessee, Kentucky, and in any
other Market in which Tritel is doing business with SpectraSite.
(b) AUTHORIZATION AND VALIDITY OF MASTER LEASE. That Tritel's
execution and delivery of this Master Lease have been duly authorized and no
further action on the part of Tritel is necessary to authorize this Master Lease
or the consummation of the transactions contemplated herein. This Master Lease
constitutes the valid and binding obligation of Tritel duly enforceable in
accordance with its terms.
(c) NO BREACH OF OTHER INSTRUMENTS. That there is no contract or
agreement or other instrument to which Tritel is a party or by which Tritel or
its assets are bound which prohibits the execution or delivery by Tritel of this
Master Lease or the performance or observance by Tritel of any term or condition
of this Master Lease and, subject to the fulfillment of all conditions set forth
therein, neither execution and delivery of this Master Lease nor the
consummation of the transactions contemplated hereby will violate any term or
provision of any such contract, agreement, or instrument.
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(d) NO VIOLATION OF LAW OR ORDER. That subject to the fulfillment
of all conditions set forth herein, neither the execution and delivery of this
Master Lease nor transactions contemplated hereby, shall result in the violation
by Tritel of any, law, regulation, judgment or order of any court or
governmental authority applicable to Tritel or result in a breach of the terms
of this or any other agreement to which Tritel is a party.
4.4 REPRESENTATIONS AND WARRANTIES OF SPECTRASITE. SpectraSite
represents and warrants to Tritel that:
(a) ORGANIZATION, GOOD STANDING AND AUTHORITY. It 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 enter
into and perform this Master Lease and SpectraSite is duly qualified to do
business in the states of Alabama, Florida, Mississippi, Tennessee and Kentucky,
and in the event that SpectraSite develops, leases and constructs Tower
Facilities in any other Markets, SpectraSite shall become duly qualified to do
business in the state of such Market.
(b) AUTHORIZATION AND VALIDITY OF MASTER LEASE. That SpectraSite's
execution and delivery of this Master Lease have been duly authorized and no
further action on the part of SpectraSite is necessary to authorize this Master
Lease or the consummation of the transactions contemplated herein. This Master
Lease constitutes the valid and binding obligation of SpectraSite duly
enforceable in accordance with its terms.
(c) NO BREACH OF OTHER INSTRUMENTS. That there is no contract or
agreement or other instrument to which SpectraSite is a party or by which
SpectraSite or its assets are bound which prohibits the execution or delivery by
SpectraSite of this Master Lease or the performance or observance by SpectraSite
of any term or condition of this Master Lease and, subject to the fulfillment of
all conditions set forth therein, neither execution and delivery of this Master
Lease nor the consummation of the transactions contemplated hereby will violate
any term or provision of any such contract, agreement, or instrument.
(d) NO VIOLATION OF LAW OR ORDER. That subject to the fulfillment
of all conditions set forth herein, neither the execution and delivery of this
Master Lease nor transactions contemplated hereby, shall result in the violation
by SpectraSite of any, law, regulation, judgment or order of any court or
governmental authority applicable to SpectraSite or result in a breach of the
terms of this or any other agreement to which SpectraSite is a party.
(e) MARKETABLE LEASEHOLD TITLE. SpectraSite holds good and
marketable leasehold title to its interest in the Property, the Easements, the
Premises and the Tower Facilities, subject to any encumbrances or defects which
were created by or known to Tritel prior to the execution of the SLA for a Site;
provided, however, that SpectraSite's liability for a breach of this provision
shall not exceed the amount which SpectraSite is entitled to recover from its
title insurance policy for such Site. SpectraSite hereby agrees to obtain a
policy for title insurance for each Site in an amount which shall not be less
than One Hundred Fifty Thousand and No/100 Dollars ($150,000.00).
4.5 MISCELLANEOUS.
(a) SUCCESSORS AND ASSIGNS. The terms, covenants and conditions
contained in this Master Lease shall be binding upon and inure to the benefit of
the parties hereto, and also their respective heirs, executors, administrators,
personal representatives, successors and assigns subject to the provisions of
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paragraph 4.2 of this Master Lease relating to restrictions upon sale,
assignment or subletting of this Master Lease.
(b) INTEGRATION. It is understood that there are no oral
agreements or representations between the parties hereto affecting this Master
Lease and this Master Lease supersedes and cancels any and all previous
negotiations, arrangements, agreements or representations and understandings, if
any, between the parties hereto with respect to the subject matter thereof,
except the Site Acquisition Services Agreement between Tritel and SpectraSite
dated July 28, 1999 and any Attachments or documents referred to herein. There
are no other representations or warranties between the parties and all reliance
with respect to representations is solely upon the representations and
agreements contained in this document.
(c) HEADINGS. The Headings and paragraph titles herein are for
convenience only and do not in any way define, limit or construe the contents of
such Paragraphs.
(d) SEVERABILITY. It is agreed that if any provision of this
Master Lease shall be determined to be void by any court of competent
jurisdiction, then such determination shall not affect any other provisions of
this Master Lease and all such other provisions shall remain in full force and
effect.
(e) FORCE MAJEURE. Except as otherwise provided in this Master
Lease, any prevention, delay or stoppage due to strikes, lockouts, labor
disputes, acts of God, inability to obtain labor or materials or reasonable
substitutes therefor governmental restrictions, actions or inactions,
governmental controls, enemy or hostile governmental action, civil commotion,
fire or other casualty, and other causes beyond the reasonable control of the
party obligated to perform, shall excuse the performance by such or a period
equal to any such delay or stoppage.
(f) HOLDING OVER. If Tritel remains in possession of the Premises
after the termination of the applicable SLA without the execution of a new SLA,
Tritel shall be deemed to be occupying the Premises as a tenant from
month-to-month at the last applicable monthly rental provided for herein,
subject to all the other conditions, provisions and obligations of this Master
Lease and the applicable SLA insofar as the same are applicable to a
month-to-month tenancy.
(g) ESTOPPEL CERTIFICATE. (i) Tritel shall, upon the request of
any lender of SpectraSite, but no more than two (2) times in any single year,
upon not less than ten (10) days' prior written notice from SpectraSite,
execute, acknowledge and deliver to SpectraSite's lender a statement in writing
on a form prescribed by SpectraSite's lender reasonably acceptable to Tritel (i)
certifying that this Master Lease is unmodified and in full force and effect
(or, if modified, stating the nature of such modification and certifying that
this Master Lease as so modified is in full force and effect), or if not in full
force and effect stating that the Master Lease is not in full force and effect
and the reasons therefore, to the best of its knowledge, and the date to which
the rent and other charges are paid in advance, if any, and (ii) acknowledging
that there is not, to the best of Tritel's knowledge, any uncured default on the
part of SpectraSite hereunder, or specifying such default if any is claimed.
(ii) SpectraSite shall, upon the request of any lender of Tritel,
but no more than two (2) times in any single year, upon not less than ten (10)
days' prior written notice from Tritel, execute, acknowledge and deliver to
Tritel's lender a statement in writing on a form prescribed by Tritel's lender
reasonably acceptable to SpectraSite (i) certifying that this Master Lease is
unmodified and in full force and effect (or, if modified, stating the nature of
such modification and certifying that this Master Lease as so modified is in
full force and
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effect), or if not in full force and effect stating that the Master Lease is not
in full force and effect and the reasons therefore, to the best of its
knowledge, and the date to which the rent and other charges are paid in advance,
if any, and (ii) acknowledging that there is not, to the best of SpectraSite's
knowledge, any uncured default on the part of Tritel hereunder, or specifying
such default if any is claimed.
(h) ATTORNMENT. (i) Upon request of the mortgagee, Tritel will
attorn, as lessee under this Master Lease, to the purchaser at any foreclosure
sale thereunder, or if any ground or underlying Prime Lease is terminated for
any reason, Tritel will attorn, as Tritel under this Master Lease, to the Prime
Lessor under the ground Prime Lease provided that the Prime Lessor agrees not to
disturb Tritel's possession of the Premises and agree to honor Tritel's rights
and obligations under this Agreement and the applicable SLA, and will execute
such instruments as may be necessary or appropriate to evidence such attornment.
(ii) Upon request of the mortgagee, SpectraSite will attorn, as
lessor under this Master Lease, to the purchaser at any foreclosure sale
thereunder.
(i) RIGHT OF APPROVAL BY SECURED PARTY. This Master Lease may not
be modified or amended so as to reduce the Rent, as adjusted, or shorten the
Term without the prior written consent, in each instance, of any mortgagee or
secured party having an interest in the Tower Facilities who has given notice to
Tritel of its security interest.
(j) CERTAIN RULES OF CONSTRUCTION. (i) Notwithstanding the fact
that certain references elsewhere in this Master Lease to acts required to be
performed by Tritel hereunder, or to breaches or defaults of this Master Lease
by Tritel, omit to state that such breaches or defaults by Tritel are material,
unless the context implies to the contrary, and all breaches or defaults by
Tritel hereunder shall be deemed material. Tritel shall be fully responsible and
liable for the observance and compliance by concessionaires of and with all the
terms and conditions of this Master Lease, which terms and conditions shall be
applicable to concessionaires as if they were the Tritel hereunder and failure
by a concessionaire fully to observe and comply with the terms and conditions of
this Master Lease shall constitute a default hereunder by Tritel.
(ii) Notwithstanding the fact that certain references elsewhere in
this Master Lease to acts required to be performed by SpectraSite hereunder, or
to breaches or defaults of this Master Lease by SpectraSite, omit to state that
such breaches or defaults by SpectraSite are material, unless the context
implies to the contrary, and all breaches or defaults by SpectraSite hereunder
shall be deemed material. SpectraSite shall be fully responsible and liable for
the observance and compliance by concessionaires of and with all the terms and
conditions of this Master Lease, which terms and conditions shall be applicable
to concessionaires as if they were SpectraSite hereunder and failure by a
concessionaire fully to observe and comply with the terms and conditions of this
Master Lease shall constitute a default hereunder by SpectraSite.
(k) WARRANTIES AND REPRESENTATIONS. The warranties and
representations. made in this Agreement shall be deemed to be made, reaffirmed,
ratified, rewarranted and re-represented upon the execution of each SLA.
(l) COUNTERPARTS. This Master Lease may be executed in
counterparts with the same effect as if both parties hereto had signed the same
document. Both counterparts shall be construed together and shall constitute one
(1) Master Lease.
(m) INTERPRETATION. The parties hereby acknowledge that the
draftsmanship of this Agreement was a cooperative effort by both parties who
were represented by counsel and that this Master Lease
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shall not be construed either for or against SpectraSite or Tritel, but this
Master Lease shall be interpreted in accordance with the general tenor of the
language in an effort to reach an equitable result.
(n) GOVERNING LAW. This Master Lease is to be governed by and
construed in accordance with the laws of the state in which the Premises is
situated.
(o) NO PARTNERSHIP. Tritel and SpectraSite agree that their
relationship under this Master Lease shall be that of landlord and tenant and
that no partnership is intended or shall be created by this Master Lease.
(p) LIMITATION OF SPECTRASITE'S AND TRITEL'S LIABILITY.
SpectraSite shall not be responsible for any incidental or consequential damages
arising under this Agreement or any SLA incurred or resulting from (i) Tritel's
(or any party claiming by, through or under Tritel's use or Tritel (or any party
claiming by through or under Tritel) inability to use the Premises (or any
portion thereof), or from (ii) damage to Tritel's Equipment (or any party
claiming by, through or under Tritel) which is caused by the negligence of
SpectraSite. Tritel shall not be responsible for any incidental or consequential
damages arising under this agreement or any SLA incurred or resulting from (i)
SpectraSite's (or any party claiming by, through or under Licensor) use or
SpectraSite's (or any party claiming by, through or under SpectraSite) inability
to use the Property, the tower Facilities, the Easements, or the Premises (or
any portion thereof) or from (ii) damage to the Tower Facilities, the Property,
the Easements, the Premises, or equipment or property of SpectraSite (or any
party claiming by, through or under SpectraSite which is caused by the
negligence of Tritel.
(q) CONSENT. SpectraSite and Tritel covenant that whenever their
consent or approval is required under this Master Lease said consent shall not
be conditioned or unreasonably withheld, delayed, or conditioned.
(r) SCHEDULES. Tritel and SpectraSite acknowledge and agree that
Schedules may be added to Attachment VII to the Master Lease to define, set,
modify, covenant and agree upon certain terms and conditions of the Master
Lease. The Schedules shall only be applicable to the Markets identified in each
Schedule and each Schedule must be executed and signed by a duly authorized
representative of SpectraSite and Tritel. Upon execution by a duly authorized
officer of Tritel and SpectraSite, the Schedule shall be added to and be
incorporated into and become a part of the terms, conditions, and covenants of
the Master Lease. In the event of any conflict or contradiction within the terms
and conditions of the Schedule and the Master Lease, the terms and conditions of
the Schedule shall control.
(s) DAYS. In computing any period of time under this Agreement,
the date of the act, event or default upon which the designated period of time
begins to run shall be included in the period of time calculated. In the
calculation of the number of days elapsed, only business days shall be included
in the computation.
(t) NOTICES. Any notices to be received by SpectraSite or Tritel
under this Agreement shall be deemed properly given if marked to the other party
with proper postage via the United States Mail or sent via a reputable overnight
carrier to the following address:
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TO SPECTRASITE:
SpectraSite Communications, inc.
8000 Regency Park, Suite 570
Cary, NC 27511
Attention: Steve Clark
With a copy to:
Lewellen & Frazier, PLC
Plaza West Building
415 North McKinley, suite 1240
Little Rock, AR 72205
Attention: Todd A. Lewellen
TO TRITEL:
Tritel Communications, Inc.
112 E. State Street, Suite B
Ridgeland, MS 39157
Attention: Ken Harris
IN WITNESS WHEREOF, SpectraSite and Tritel have executed this Master
Lease and the "Effective Date" of this Master Lease shall be the last date that
this Master Lease is signed by SpectraSite and Tritel.
SPECTRASITE:
SPECTRASITE COMMUNICATIONS, INC.
BY:
----------------------------------
TITLE:
-------------------------------
DATE:
--------------------------------
TRITEL:
------------------------------
TRITEL COMMUNICATIONS, INC.:
BY:
----------------------------------
JERRY M. SULLIVAN, JR.
EXECUTIVE VICE PRESIDENT
CHIEF OPERATING OFFICER
DATE:
--------------------------------
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LIST OF ATTACHMENTS
ATTACEMENT DESCRIPTION
- ---------- -----------
I ASSIGNMENT
II MEMORANDUM OF ASSIGNMENT
III ESTOPPEL CERTIFICATE
IV SITE LEASE AGREEMENT
V MEMORANDUM OF SITE LEASE AGREEMENT
VI COLLOCATION APPLICATION
VII MARKET SPECIFICATIONS
VIII NOTICE OF COMPLETION OF TOWER FACILITIES
IX LETTER CONFIRMING COMMENCEMENT DATE
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ATTACHMENT I
ASSIGNMENT OF PRIME LEASE
THIS ASSIGNMENT OF PRIME LEASE AGREEMENT ("Assignment ") is made and
entered into as of the _____ day of ________, ________, by and between
SpectraSite Communications, Inc., a Delaware corporation ("SpectraSite"), and
Tritel Communications, Inc., a Delaware Corporation, ("Tritel").
WHEREAS, Tritel has entered into a ground lease agreement, lease
agreement or other similar agreement (the "Prime Lease") for the lease of the
real property more particularly described in Exhibit "A" attached hereto (the
"Property") upon which Tritel has constructed or intends to construct a tower
and related facilities and for an easement for ingress, egress and utilities
over the real property more particularly described in Exhibit "B" attached
hereto (the "Easement");
WHEREAS, Tritel desires to assign the Prime Lease for said Property, a
copy of which is attached hereto as Exhibit "C", to SpectraSite; and
WHEREAS, SpectraSite desires to develop the tower and certain
facilities on the Property and sublease a portion of the space upon the Tower
Facilities to Tritel.
NOW THEREFORE, for and in consideration of the mutual promises outlined
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Tritel and SpectraSite do hereby agree as
follows:
1. Assignment. Tritel does hereby assign to SpectraSite and SpectraSite
shall and hereby assumes and agrees to be bound by the Prime Lease, or such
other contract through which Tritel has acquired an interest in the real
property which is the subject of the Prime Lease together with any easements for
ingress, egress and utilities ("Easements") to the Property.
2. Covenants of Tritel. Tritel covenants that it:
(a) unconditionally and absolutely assigns, transfers, sets over and
conveys to SpectraSite without warranty or representation except as otherwise
set forth herein, free and clear of all liens, claims and encumbrances, except
as shown in Exhibit "D", all of Tritel's right, title and interest in, to and
under the Prime Lease and the Easements except as such rights may be limited or
modified by any (if any) addenda attached to the Prime Lease. Tritel represents
and warrants to SpectraSite that all addenda to the Prime Lease are attached to
this Agreement as part of Exhibit "C". The Easements, if any, in addition to the
Prime Lease are attached hereto as Exhibit "E".
(b) shall warrant, indemnify and defend the leasehold title assigned to
SpectraSite against the lawful claims of all persons provided that such claim
arises as a result of Tritel's interest in the Prime Lease, but no further or
otherwise.
(c) to the best of its knowledge, without independent inquiry or
investigation, has no knowledge or notice of any default, defense, offset,
claim, demand, counterclaim or cause of action which may presently exist under
the Prime Lease; and
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(d) to the extent Tritel may assign, Tritel irrevocably assigns,
transfers, conveys and sets over to SpectraSite without warranty or
representation and SpectraSite accepts from Tritel all of the right, title and
interest of Tritel under each and all of the following items (without warranty
that any of the following may be assigned):
(i) the Federal Aviation Administration application, responses,
approvals and registration numbers submitted or received by Tritel with
respect to the tower proposed to be constructed on the Property;
(ii) the zoning permits and approvals, variances, building permits
and such other federal, state or local governmental approvals which
have been gained or for which Tritel has made application;
(iii) the construction, engineering and architectural drawings and
related site plan and surveys pertaining to the construction of the
Tower Facilities on the Property;
(iv) the geotechnical report for the Property which has been
commissioned by Tritel;
(v) the title reports, commitments for title insurance, ownership
and encumbrance reports, title opinion letters, copies of instruments
in the chain of title or any other information which may have been
produced regarding title to the Property and the Easements;
(vi) the environmental assessments including phase I reports and
any reports relating contemporaneous or subsequent intrusive testing,
the "FCC Checklist" performed pursuant to NEPA requirements and any
other information which may have been produced regarding the
environmental condition of the Property, Easements or neighboring real
property; and
The items described in paragraphs 2(d) may hereinafter be collectively referred
to as "Site Acquisition Items"; and
(e) shall use diligent efforts to assist SpectraSite in obtaining an
estoppel certificate from the lessor in the Prime Lease in substantially the
same form as is attached hereto as Exhibit "E" ("Estoppel Certificate").
SpectraSite shall use diligent efforts to obtain such Estoppel Certificate from
each lessor.
3. Covenants of Spectrasite. SpectraSite covenants that:
(a) SpectraSite hereby assumes the Prime Lease and all of Tritel's
duties and obligations under the Prime Lease arising subsequent to the date
hereof and SpectraSite hereby agrees to promptly and faithfully perform all of
the obligations of Tritel under the Prime Lease.
(b) SpectraSite shall and hereby agrees to hold Tritel harmless and
indemnify Tritel from any and all claims, losses, obligations, damages, costs or
expenses ever suffered, threatened or incurred by Tritel which claims, losses,
obligations, damages, costs or expenses must be paid by Tritel to a third party
(including, without limitation, any lawyers, experts, engineers or similar
professionals) or which Tritel may expend in defending itself against any claim
threatened or made by a third party which arise out of any act or omission of
SpectraSite under the Prime Lease, including without limitation, any default
under the Prime Lease.
4. Master Lease. This Assignment is being executed pursuant to the
terms of a Master Build To Suit and Lease Agreement (the "Master Lease") and in
the event that there is a conflict between the terms and
32
<PAGE>
conditions of the Master Lease, this Assignment, the terms and conditions of
this Assignment shall control. This Assignment shall remain subject to the
remaining terms and conditions of the Master Lease.
IN WITNESS WHEREOF, SpectraSite and Tritel have signed this Agreement
as of the date and year first above written.
TRITEL: SPECTRASITE:
TRITEL COMMUNICATIONS, INC. SPECTRASITE COMMUNICATIONS, INC.
By: By:
--------------------------------- ---------------------------------
Name: Jerry M. Sullivan, Jr. Name:
------------------------------- -------------------------------
Title: Executive Vice President Title:
------------------------------ ------------------------------
33
<PAGE>
EXHIBIT "A"
LEGAL DESCRIPTION OF THE PROPERTY
34
<PAGE>
EXHIBIT "B"
LEGAL DESCRIPTION OF EASEMENTS
35
<PAGE>
EXHIBIT "C"
COPY OF PRIME LEASE
36
<PAGE>
EXHIBIT "D"
COPY OF EASEMENTS, IF ANY
37
<PAGE>
EXHIBIT "E"
ESTOPPEL CERTIFICATE
THIS INSTRUMENT is given as of this ___ day of _________________, __,
by ("Lessor") to SpectraSite Communications, Inc. ("Assignee").
RECITALS
A. Lessor entered into a Lease Agreement or similar agreement with
_____ ( __ )numbers of addenda attached thereto, (collectively, the "Prime
Lease") dated as of the ___ day of _____, ____with Tritel Communications, Inc.,
a Delaware corporation ("Lessee").
B. Lessee desires to assign to Assignee its interest in the Prime
Lease.
C. Assignee seeks Lessor's acknowledgment, as of the date of execution
of this Instrument, of certain matters affecting the Prime Lease.
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, intending to be legally bound:
1. Lessor's Estoppel Certificate. Lessor hereby certifies, with the
understanding that Assignee is relying upon the statements made herein, the
following:
a. The Prime Lease constitutes the entire agreement between the parties
with respect to the Premises. The Prime Lease has not been amended and there are
no other agreements between Lessor and Lessee with respect to the property or
the easements which are described in the Prime Lease.
b. The Prime Lease is in full force and effect in accordance with its
terms. To the best of Lessor's knowledge, neither Lessee nor Lessor is in
default under any of the terms of the Prime Lease, and Lessor has not received
actual or constructive notice of the existence of any event which, with the
passage of time or the giving of notice or both, would constitute a default
under the Prime Lease.
c. All applicable Prime Lease fees and rent (if any) and other charges
and payments due Lessor from Lessee under the Prime Lease have been paid in full
through the date hereof (except reimbursements for real estate taxes, insurance,
utilities or other reimbursements, if any, due for fiscal periods to the extent
not yet payable).
2. Consent. Lessor hereby acknowledges the right of Lessee to assign
the Prime Lease to Assignee and agrees that all terms of the Prime Lease shall
be in full force and effect between Lessor and Assignee as if Lessor and
Assignee were the original parties to the Prime Lease and that such assignment
shall not violate the terms of the Prime Lease, will not create or cause the
Assignee to be liable for any rent in excess of $ per month during the Initial
Term or be considered a sublease under the terms of the Prime Lease or any
addenda thereto.
3. Release. Lessor, with the intention of binding itself and its
successors and assignees, expressly forever releases and discharges Lessee and
its successors and assigns from all claims, demands, actions, grievances,
controversies, contracts, promises, agreements, causes of action, in both law
and equity, judgments
38
<PAGE>
and executions, damages of whatever nature, past or present, known and unknown,
that it ever had, or now has, known or unknown, or that anyone claiming through
or under Lessor may now have or claim to have, against Lessee which arise from
the Prime Lease, but no further or otherwise.
4. Reliance. Lessor understands that Assignee and Lessee are relying on
the information contained in this Instrument, and agrees that Assignee and
Lessee may rely on this information, for purposes of determining whether to
consummate their transaction. Further, Assignee's and Lessee's subsidiaries,
affiliates, legal representatives and successor and assigns may rely on the
contents of this Instrument. A facsimile of this instrument delivered to
Assignee by telecopier shall be deemed an original for all purposes.
5. Notice, Non-Disturbance. Assignee intends to grant a sub-leasehold
interest to Lessee pursuant to a sublease dated the ___ day of _____, ____ (the
"Sublease"). Lessor shall give notice to Lessee at the same time that Lessor
gives notice to Assignee of any default under the Prime Lease, and Lessor shall
accept a cure of any such default from Lessee on Assignee's behalf. In such
case, Lessee shall be entitled to reimbursement from Assignee of any amount paid
or obligation incurred in respect thereof. So long as the Lessee is not in
default under the Sublease beyond any applicable grace or cure period, Lessee
shall be permitted quiet enjoyment of the Premises under the Sublease
notwithstanding any termination or expiration of the Prime Lease and
notwithstanding any termination or expiration of the Prime Lease and, Lessor
agrees at the request of the Lessee to honor the terms and conditions of the
Sublease for the remainder of the term thereof and any renewal terms.. Lessee
agrees, at the request of Lessor to attorn to the Lessor upon the terms and
conditions of the Sublease for the remainder of the term thereof (whether
original or renewal) and any renewal terms, and that the Sublease shall continue
in full force and effect as if the Lessor were the sublandlord under the
Sublease notwithstanding the expiration or termination of the Prime Lease.
6. Notices. Any Notices to be received by Assignee, Lessee or Lessor
under the Prime Lease or this Estoppel Certificate shall be deemed properly
given if marked to Assignee, Lessee or Lessor with proper postage or sent via a
reputable overnight carrier to the following address:
TO ASSIGNEE: SpectraSite:
SpectraSite Communications, Inc.
8000 Regency Park, Suite 570
Cary, NC 27511
Attention: Steve Clark
With a copy to:
Lewellen & Frazier, PLC
Plaza West Building
415 North McKinley, Suite 1240
Little Rock, AR 72205
Attention: Todd A. Lewellen
TO LESSEE: Tritel Communications, Inc.
112 E. State Street
Suite B
Ridgeland, MS 39157
Attention: Ken Harris
39
<PAGE>
TO LESSOR:
IN WITNESS WHEREOF, Lessor has executed this Instrument as of the date
set forth above.
LESSOR:
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
SPECTRASITE:
SpectraSite Communications, Inc.
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
40
<PAGE>
ATTACHMENT "II"
THIS INSTRUMENT PREPARED BY: SITE NAME: INDEXING INSTRUCTIONS
------------
SITE ID:
- ---------------------------- -------------- ---------------------
- ---------------------------- ---------------------
- ---------------------------- ---------------------
Memorandum of Assignment of Prime Lease
This memorandum evidences that an assignment was made and entered into by
written Assignment of Prime Lease (the "Assignment") dated ______________ 1999,
between SPECTRASITE COMMUNICATIONS, INC., a Delaware corporation ("SpectraSite")
and TRITEL COMMUNICATIONS, INC., a Delaware corporation("Tritel")..
Such Agreement provides in part that Tritel assigns to, and Tritel does hereby
assign to SpectraSite that certain Option and Lease Agreement or similar lease
agreement (the 'Lease) dated for the lease of real property (the "Property")
located in ____________ County, in the state of ____________, which Property is
more particularly described on Exhibit "A" attached hereto and made a part
hereof, a memorandum (the "Memorandum") of which lease is of record in
__________ in the ____________ office for recording real property records in the
____________ County of the state of __________ Tritel hereby assigns the Lease
and Memorandum of Lease to the SpectraSite pursuant to the terms of the
Assignment.
IN WITNESS WHEREOF, the parties have executed this Memorandum as of the day and
year first above written.
SPECTRASITE:
SPECTRASITE COMMUNICATIONS, INC.
By:
------------------------------------
Its:
-----------------------------------
Address:
-------------------------------
- ---------------------------------------
TRITEL:
TRITEL COMMUNICATIONS, INC.
By:
------------------------------------
Its:
-----------------------------------
Address:
-------------------------------
- ---------------------------------------
41
<PAGE>
[ACKNOWLEDGEMENTS]
42
<PAGE>
EXHIBIT "A"
REAL PROPERTY DESCRIPTION
43
<PAGE>
ATTACHMENT "III"
ESTOPPEL CERTIFICATE
THIS INSTRUMENT Is given as of this ___ day of ______________, ______, by
_________________ ("Lessor") to SpectraSite Communications, Inc. ("Assignee").
RECITALS
A. Lessor entered into a Lease Agreement or similar agreement with
_______ (___) numbers of addenda attached thereto, (collectively, the "Prime
Lease") dated as of the _____day of ______, ______ with Tritel Communications,
Inc., a Delaware corporation ("Lessee").
B. Lessee desires to assign to Assignee its interest in the Prime
Lease.
C. Assignee seeks Lessor's acknowledgment, as of the date of execution
of this Instrument, of certain matters affecting the Prime Lease.
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, intending to be legally bound:
1. Lessor's Estoppel Certificate. Lessor hereby certifies, with the
understanding that Assignee is relying upon the statements made herein, the
following:
a. The Prime Lease constitutes the entire agreement between the parties
with respect to the Premises. The Prime Lease has not been amended and there are
no other agreements between Lessor and Lessee with respect to the property or
the easements which are described in the Prime Lease.
b. The Prime Lease is in full force and effect in accordance with its
terms. To the best of Lessor's knowledge, neither Lessee nor Lessor is in
default under any of the terms of the Prime Lease, and Lessor has not received
actual or constructive notice of the existence of any event which, with the
passage of time or the giving of notice or both, would constitute a default
under the Prime Lease.
c. All applicable Prime Lease fees and rent (if any) and other charges
and payments due Lessor from Lessee under the Prime Lease have been paid in full
through the date hereof (except reimbursements for real estate taxes, insurance,
utilities or other reimbursements, if any, due for fiscal periods to the extent
not yet payable).
2. Consent. Lessor hereby acknowledges the right of Lessee to assign
the Prime Lease to Assignee and agrees that all terms of the Prime Lease shall
be in full force and effect between Lessor and Assignee as if Lessor and
Assignee were the original parties to the Prime Lease and that such assignment
shall not violate the terms of the Prime Lease, will not create or cause the
Assignee to be liable for any rent in excess of $ per month during the Initial
Term or be considered a sublease under the terms of the Prime Lease or any
addenda thereto.
3. Release. Lessor, with the intention of binding itself and its
successors and assignees, expressly forever releases and discharges Lessee and
its successors and assigns from all claims, demands, actions, grievances,
controversies, contracts, promises, agreements, causes of action, in both law
and equity,
44
<PAGE>
judgments and executions, damages of whatever nature, past or present, known and
unknown, that it ever had, or now has, known or unknown, or that anyone claiming
through or under Lessor may now have or claim to have, against Lessee which
arise from the Prime Lease, but no further or otherwise.
4. Reliance. Lessor understands that Assignee and Lessee are relying on
the information contained in this Instrument, and agrees that Assignee and
Lessee may rely on this information, for purposes of determining whether to
consummate their transaction. Further, Assignee's and Lessee's subsidiaries,
affiliates, legal representatives and successor and assigns may rely on the
contents of this Instrument. A facsimile of this instrument delivered to
Assignee by telecopier shall be deemed an original for all purposes.
5. Notice; Non-Disturbance. Assignee intends to grant a sub-leasehold
interest to Lessee pursuant to a sublease dated the _____ day of ____________,
____ (the "Sublease"). Lessor shall give notice to Lessee at the same time that
Lessor gives notice to Assignee of any default under the Prime Lease, and Lessor
shall accept a cure of any such default from Lessee on Assignee's behalf. In
such case, Lessee shall be entitled to reimbursement from Assignee of any amount
paid or obligation incurred in respect thereof. So long as the Lessee is not in
default under the Sublease beyond any applicable grace or cure period, Lessee
shall be permitted quiet enjoyment of the Premises under the Sublease
notwithstanding any termination or expiration of the Prime Lease and
notwithstanding any termination or expiration of the Prime Lease and, Lessor
agrees at the request of the Lessee to honor the terms and conditions of the
Sublease for the remainder of the term thereof and any renewal terms. Lessee
agrees, at the request of Lessor to attorn to the Lessor upon the terms and
conditions of the Sublease for the remainder of the term thereof (whether
original or renewal) and any renewal terms, and that the Sublease shall continue
in full force and effect as if the Lessor were the sublandlord under the
Sublease notwithstanding the expiration or termination of the Prime Lease.
6. Notices. Any Notices to be received by Assignee, Lessee or Lessor
under the Prime Lease or this Estoppel Certificate shall be deemed properly
given if marked to Assignee, Lessor or Lessee with proper postage or sent via a
reputable overnight carrier to the following address:
TO ASSIGNEE: SpectraSite:
SpectraSite Communications, Inc.
8000 Regency Park, Suite 570
Cary, NC 27511
Attention: Steve Clark
With a copy to:
Lewellen & Frazier, PLC
Plaza West Building
415 North McKinley, Suite 1240
Little Rock, AR 72205
Attention: Todd A. Lewellen
TO LESSEE: Tritel Communications, Inc.
112 E. State Street
Suite B
Ridgeland, MS 39157
Attention: Ken Harris
45
<PAGE>
TO LESSOR:
-------------------------------
-------------------------------
-------------------------------
IN WITNESS WHEREOF, Lessor has executed this Instrument as of the date
set forth above.
LESSOR:
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
SPECTRASITE:
SPECTRASITE COMMUNICATIONS
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
46
<PAGE>
ATTACHMENT IV
SITE LEASE AGREEMENT
THIS SITE LEASE AGREEMENT ("SLA") is executed this ___ day of
___________, ___, by and between SPECTRASITE COMMUNICATIONS, INC.
("SpectraSite") and TRITEL COMMUNICATIONS, INC. ("Carrier" or "Tritel").
WHEREAS, on the ___ day of __________, __, SpectraSite and Carrier
entered into that certain Master Build To Suite and Lease Agreement ("Master
Lease") which provides for the execution of individual SLAs for each Site, as
those terms are defined in the Master Lease, owned by SpectraSite upon which
Tritel desires to mount certain antenna, structures and other equipment.
1. SITE. Subject to the terms of the Master Lease, SpectraSite hereby
leases and grants to Carrier and Carrier hereby leases from and accepts from
SpectraSite space to install, maintain, operate, upgrade and remove Carrier's
wireless communications equipment and appurtenances on the tower owned by
SpectraSite ("Tower Facilities"), including antennas and microwave dishes
between the heights of _________________ above ground level on the Tower
Facilities and which is located on certain real property leased by SpectraSite
more particularly described in Exhibit "A" attached hereto ("Property"); and to
install, maintain, operate and remove Carrier's compound and related devices
(including, but not limited to emergency generators, equipment shelters,
equipment cabinets, all necessary test equipment and any temporary construction
materials) owned by Carrier on a _____________ hundred (__)square foot portion
of the Property at a location to be agreed upon in writing between SpectraSite
and Carrier, which is shown as the cross hatched area shown on Exhibit "B".
SpectraSite has granted and hereby grants unto Tritel for the Initial Term and
any Renewal Term an easement for ingress, egress and utilities during the term
of the Master Lease over the property described in Exhibit "C" attached hereto
("Easement") (the space occupied by Carrier on the Property and the Tower, and
the Easement hereinafter shall be referred to collectively as the "Premises")
(The Tower, Property and Easement shall constitute and hereinafter be referred
to and known as the "Site"). The Site is more commonly known to SpectraSite as
the _____________ Site. The Site is more commonly known to Tritel as the
_____________ Site.
3. RENT AND COMMENCEMENT DATE. The Commencement Date of this SLA, and
the Rent payable hereunder are defined in Attachment VII to the Master Lease and
the term of this Site Lease shall be as set forth in 3.4 and 3.5 of the Master
Lease. Tritel and SpectraSite shall execute a letter agreement which shall be
attached to this SLA confirming the date which the parties understand to be the
Commencement Date for each SLA.
2. EQUIPMENT. A description of the equipment, antennae, mounting height
of the antenna and other personal property of Tritel which Tritel intends to
locate on the Site ("Tritel's Equipment") is described in the Collocation
Application which is attached hereto as Exhibit "D". Tritel will not install any
equipment on the Site which is not described in Exhibit "D" without
SpectraSite's prior, written consent, which consent shall not be unreasonably
withheld, delayed or conditioned. SpectraSite and Tritel acknowledge and agree
that so long as SpectraSite approves any substituted, additional or altered
equipment, which approval shall not be unreasonably withheld, delayed or
conditioned and any additional or substituted equipment does not increase the
wind load or structural burden upon the Tower Facilities, does not increase the
space upon the Tower Facilities or the ground space upon the Site, and does not
create any technical or radio frequency interference with any existing equipment
located upon the Tower Facilities at the time of the request for such
modification or substitution,
47
<PAGE>
Tritel may substitute, add, alter, modify and replace Tritel's Equipment
described in Exhibit "D" upon the Tower Facilities.
3. PRIME LEASE. A copy of the Prime Lease for this Site is attached
hereto as Exhibit "E" and is incorporated by reference herein.
4. EFFECT OF AGREEMENT. SpectraSite and Tritel acknowledge that the
Master Lease is the controlling agreement between the parties with regard to
Tritel's lease of the Site. This SLA is intended to supplement the Master Lease
and fulfill the requirements of paragraph I of the Master Lease.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first set forth above.
SPECTRASITE:
SPECTRASITE COMMUNICATIONS, INC.
By:
---------------------------------
TRITEL:
TRITEL COMMUNICATIONS, INC.
By:
---------------------------------
Name:
Title:
48
<PAGE>
ACKNOWLEDGMENTS
49
<PAGE>
EXHIBIT "A"
LEGAL DESCRIPTION OF THE PROPERTY
50
<PAGE>
EXHIBIT "B"
SURVEY OR MAP OF THE SITE WITH LOCATION OF TOWER AND
GROUND SPACE SHOWN AND GROUND SPACE CROSS-HATCHED
51
<PAGE>
EXHIBIT "C"
LEGAL DESCRIPTION OF EASEMENTS
52
<PAGE>
ATTACHMENT V
This Instrument Prepared By: Site Name: Site ID: Indexing Instructions
---- ----
- ---------------------------- ---------------------
- ---------------------------- ---------------------
- ---------------------------- ---------------------
MEMORANDUM OF SITE LEASE AGREEMENT
This memorandum evidences that a lease was and hereby is made and entered into
by written Site Lease Agreement dated ______________, 19__, between SPECTRASITE
COMMUNICATIONS, INC., a Delaware corporation ("SpectraSite") and TRITEL
COMMUNICATIONS, INC., a Delaware corporation ("Tritel").
Such Agreement provides in part that Tower Company leases to Carrier and Tower
Company does hereby lease to Carrier space upon a tower (which tower is located
as shown on Exhibit "B") (the "Tower") between the heights of ________ and
_______ above ground level, which Tower is located upon the real property
located at _______, City of _________, County of ________, State of _______,
which real property is described in EXHIBIT A attached hereto (the "Site" or the
"Property") and certain space (the "Ground Space") upon the Property which is
described on Exhibit "B" or which is shown as the cross-hatched area on a plat
or survey attached hereto as Exhibit "B" with runs for cable, wiring, conduit,
etc. to the Tower and the Ground Space and with a grant of and Tower Company
hereby grants a non-exclusive easement for unrestricted rights of access thereto
and to electric and telephone facilities which are described on Exhibit "A"
and/or shown on Exhibit "B" such lease and easement to be for a term of five (5)
years commencing on _____, 19__ which term is subject to four (4) additional
five (5) year extension periods by Carrier.
IN WITNESS WHEREOF, the parties have executed this Memorandum as of the day and
year first above written.
TRITEL:
Tritel Communications, Inc.
BY:
---------------------------------------------
NAME: Jerry M. Sullivan, Jr.
---------------------------------------------
TITLE: Exec. Vice President/Chief Operating Officer
---------------------------------------------
ADDRESS: P.O. Box 1348
---------------------------------------------
Ridgeland, MS 39158-1348
---------------------------------------------
PHONE NUMBER: 601-362-2200
---------------------------------------------
DATE:
---------------------------------------------
SPECTRASITE:
SpectraSite Communications, Inc.
BY:
---------------------------------------------
NAME:
---------------------------------------------
TITLE:
---------------------------------------------
ADDRESS:
---------------------------------------------
---------------------------------------------
PHONE NUMBER:
---------------------------------------------
TAX ID:
---------------------------------------------
DATE:
---------------------------------------------
53
<PAGE>
EXHIBIT "A"
Property
Attached hereto Metes and Bound Description of the Real Property
54
<PAGE>
EXHIBIT "B"
GROUND SPACE:
ATTACH HERETO THE SITE PLAN FOR THE SITE WITH THE GROUND SPACE CROSS HATCHED AND
THE TOWER IDENTIFIED.
55
<PAGE>
<TABLE>
<CAPTION>
ATTACHMENT VI
COLLOCATION APPLICATION
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
RETURN THIS APPLICATION TO: (E-MAIL IS PREFERRED)
SpectraSite Communications, Inc. e-mail: [email protected]
8000 Regency Parkway, Suite 570 OFFICE: (919) 468-0112
Cary, NC 27511 FAX: (919) 468-8522
Attn: Collection Management
- ------------------------------------------------------------------------------------------------------------------------------------
APPLICANT INFORMATION
Tower Owner: SpectraSite Communications Tenant Applicant:
Site Name Site Name:
Site Number: Site Number:
Date (to be filled in by SpectraSite): Contact Name:
Contact Number:
Contact Address:
Contact e-mail:
- ------------------------------------------------------------------------------------------------------------------------------------
SPECTRASITE TOWER INFORMATION
- ------------------------------------------------------------------------------------------------------------------------------------
Latitude: Existing Structure Type:
Longitude: Existing Structure Height:
Site Address:
- ------------------------------------------------------------------------------------------------------------------------------------
ANTENNAS
- ------------------------------------------------------------------------------------------------------------------------------------
VI V2 V3
Desired Rad Center (Feet AGL)
Antenna Quantity
Antenna Manufacturer
Antenna Model (Attach Spec Sheet)
Weight (per antenna)
Antenna Dimensions
ERP (watts)
Antenna Gain
Orientation/Azimuth
Mechanical Tilt
Channels
Tower Mount Dimensions
Tower Mount Weight
Tower Mount Mounting Height
Transmit Frequency
Receive Frequency
Number of Coax Cables (PER ANTENNA)
Diameter of Coax Cables
RF Contact Name/Number
Type of Service (i.e., CELLULAR, CDMA, GSM, TDMA,
PAGING):
- ------------------------------------------------------------------------------------------------------------------------------------
GROUND SPACE REQUIREMENTS
- ------------------------------------------------------------------------------------------------------------------------------------
Cabinet Manufacturer/Model Shelter
Manufacturer
Equipment Pad Dimensions Shelter Dimensions
- ------------------------------------------------------------------------------------------------------------------------------------
POWER REQUIREMENTS
- ------------------------------------------------------------------------------------------------------------------------------------
AC Power Required Voltage and Total Amperage
<PAGE>
- ------------------------------------------------------------------------------------------------------------------------------------
Construction Contact Name/ Number:
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
58
<PAGE>
ATTACHMENT VII
MARKET SPECIFIC TERMS
SEE SCHEDULES ATTACHED HERETO
<PAGE>
SCHEDULE 1
MARKET SPECIFIC TERMS
TO ATTACHMENT VII OF MASTER LEASE BETWEEN
SPECTRASITE AND TRITEL
1. TRITEL MARKET: Knoxville Market - This Schedule shall apply to the Knoxville
Market only.
2. MINIMUM NUMBER OF SITES: -- Tritel shall and hereby grants to SpectraSite the
right to develop, construct and lease a minimum of twenty-five (25) Tower
Facilities in the Knoxville Market more particularly described in Exhibit A
attached hereto. In the event that Tritel does not require the construction of
25 new Tower Facilities in the Knoxville Market during the 1999 calendar year,
all of the new Tower Facilities which Tritel must construct and install in the
Knoxville Market in the 1999 calendar year, which Tritel intends to assign to a
third (3rd) party, shall be constructed, developed and owned by SpectraSite, and
Tritel shall grant SpectraSite the right to develop, construct and lease
additional sites in other Tritel Markets in addition to those sites set forth on
the other Schedules to Exhibit VII so that the cumulative minimum number of
sites set forth in Schedules 1 and 2 to Exhibit VII shall not be diminished.
3. PRE-DEVELOPMENT COSTS: (a) For each Tower Site for which SpectraSite has
performed Site Acquisition Services as defined in that certain Site Acquisition
Services Agreement (the "Site Acquisition Services Agreement") by and between
the parties dated the 28th day of July, 1998, and such Site Acquisition Services
commenced prior to or on January 31, 1999, SpectraSite shall reimburse Tritel
[CONFIDENTIAL TREATMENT REQUESTED] per site upon the receipt of a SLA executed
by Tritel. Such payment shall be made within fifteen (15) days of the date that
the Assignment is executed by both parties. Notwithstanding anything contained
in the Master Lease, such payment shall be the only payment or reimbursement
which SpectraSite makes to Tritel for reimbursement of Pre-Development costs for
any Tower Sites upon which Site Acquisition Services commenced prior to January
31, 1999, but no further or otherwise. Upon the execution of the Assignment of
the Prime Lease from Tritel to SpectraSite, SpectraSite shall assume all
responsibility for any Pre-Development Costs incurred after the date of the
Assignment, subject to the terms of the Master Lease. (b) For each Tower Site
for which SpectraSite has performed Site Acquisition Services which commenced
after January 31, 1999, the amount of the reimbursement for such Site
Acquisition Services shall be negotiated between the parties and shall be agreed
upon in an exhibit which shall be attached hereto and made a part hereof and
shall be incorporated into this Agreement as if originally executed and attached
herewith, and such agreement shall be effective upon the execution of the
exhibit by duly authorized representatives of SpectraSite and Tritel. The amount
of reimbursement for such Site Acquisition Services shall also be set forth in
the Notice from Tritel to SpectraSite pursuant to paragraph 1.1(b) to the Master
Lease and in the Acceptance of the Site by SpectraSite pursuant to paragraph
1.1(b) of the Master Lease.
4. SCHEDULE OF COMPLETION: SpectraSite shall deliver all Tower Sites fully
completed and ready for the installation of Tritel's Equipment, excepting those
Tower Sites delayed by Tritel actions or inaction's or those Tower Sites delayed
beyond SpectraSite's control, including but not limited to governmental
approvals, moratoria, FAA or force majeure according to the following schedule
which was mutually agreed upon between the parties at a meeting on April 12,
1999:
May 28, 1999 two (2) Tower Sites
June 15, 1999 five (5) Tower Sites
July 15, 1999 ten (10) Tower Sites
August 15, 1999 eight (8) Tower Sites
58
<PAGE>
SpectraSite shall diligently exercise its best efforts to construct and deliver
all of the Tower Sites in the clusters which have been developed by Tritel for
the best system optimization.
5. RENT: (a) Initial Term. As consideration for the use and occupancy of the
Premises under any SLA during the Initial Term, Tritel shall pay SpectraSite or
such entity as SpectraSite may designate from time to time, on the first day of
each calendar month during the Initial Term, the sum of [CONFIDENTIAL TREATMENT
REQUESTED] per month. Rent shall be payable on the first day of each month in
advance to SpectraSite at SpectraSite's address as specified in Paragraph 4.5(t)
of the Master Lease. In the event that the Commencement Date is other than the
first day of a calendar month, Rent shall be prorated over the number of days
remaining in the month in which the SLA commenced and shall thereafter be paid
on the first day of each calendar month. SpectraSite and Tritel shall execute a
letter agreement to attach to each SLA to confirm the amount of the Rent.
(b) Renewal Terms. In the event that Tritel elects to renew an SLA as
provided in paragraph 3.5, Rent shall be increased by fifteen percent over the
Rent accruing under the immediately prior term of the SLA.
6. COMMENCEMENT DATE. The Initial Term of the SLA for any Tower Facility which
is completed prior to September 1, 1999 in the Knoxville Market shall commence
on the earlier of: (i) September 1, 1999; or (ii) 90 calendar days from the
acceptance of a Site by Tritel pursuant to Section 2.8 of this Agreement (the
"Launch Commencement Date"). The Initial Term of the SLA for any Tower Facility
which is completed on or after September 1, 1999 in the Knoxville Market shall
commence on the date on which Tritel accepts the Site pursuant to Section 2.8 of
this Agreement (the "Post Launch Commencement Date"), (the Launch Commencement
Date and the Post Launch Commencement Date are collectively referred to as the "
Commencement Date").
7. COMPLETION OF REAL ESTATE SERVICES ON NON-SPECTRASITE GREENFIELD SITES. Until
formal written notification from Tritel, SpectraSite shall continue to perform
fee based acquisition services on Greenfield sites in the Knoxville Market and
the Chattanooga Market not assigned to SpectraSite as a Tower Facility under
this Schedule, such services to be performed pursuant to the terms of the Site
Acquisition Services Agreement. Tritel shall elect to either continue the Site
Acquisition Services on the time and materials basis set out in the Site
Acquisition Services Agreement or to convert the Tower Sites at the individually
appropriate points, over to the milestone payment schedule that is attached
hereto as Exhibit "B" to this Schedule. The billing and expense portion of the
Site Acquisition Services Agreement will be altered and modified the day after
receipt of such written notification.
8. COLLOCATION ASSISTANCE. As further consideration for the agreement to grant
the right to construct, develop and lease the Tower Facilities as described
herein, SpectraSite agrees to provide its employee, Julie Best, as collocation
coordinator for the coordination of all collocation sites in the Knoxville
Market and the Chattanooga Market, for a period of time not to exceed 90 days at
SpectraSite's actual cost for such employee. Such cost shall include salary,
taxes, benefits, etc. SpectraSite acknowledges and agrees that such employee
shall remain an employee of SpectraSite and that it shall be primarily
responsible for all obligations to such employee in connection therewith, and
that the employee shall have no claim against Tritel and that the employee is
not a third party beneficiary of this Agreement.
9. SCHEDULE. This Schedule shall be added to and modify the terms and conditions
of the Master Lease and hereby is incorporated into the terms of the Master
Lease. In the event that there is a conflict or contradiction
59
<PAGE>
between the terms and conditions of the Master Lease and this Schedule, the
terms and conditions of this Schedule shall control.
IN WITNESS WHEREOF, SpectraSite and Tritel have signed this Schedule as
of the date and year first above written.
TRITEL: SPECTRASITE:
TRITEL COMMUNICATIONS, INC. SPECTRASITE COMMUNICATIONS, INC.
By: By:
------------------------------- -------------------------------
Jerry M. Sullivan, Jr. Name:
Executive Vice President/ -----------------------------
Chief Operating Officer Title:
----------------------------
60
<PAGE>
EXHIBIT "A"
TO SCHEDULE 1 TO ATTACHMENT VII OF MASTER LEASE
BETWEEN SPECTRASITE AND TRITEL
Agreed Upon BTS Sites and Rebate for Tritel Knoxville
-----------------------------------------------------
Site Number Site Name AGREED UPON REBATE/
- ----------- --------- RENTAL ABATEMENT VALUE
Wise Hill [CONFIDENTIAL TREATMENT REQUESTED]
Westview [CONFIDENTIAL TREATMENT REQUESTED]
Park City [CONFIDENTIAL TREATMENT REQUESTED]
Presley Lake [CONFIDENTIAL TREATMENT REQUESTED]
Oak Grove Heights [CONFIDENTIAL TREATMENT REQUESTED]
Copper Ridge [CONFIDENTIAL TREATMENT REQUESTED]
Stanley Road [CONFIDENTIAL TREATMENT REQUESTED]
Bright Hope Church [CONFIDENTIAL TREATMENT REQUESTED]
Rocky Hill [CONFIDENTIAL TREATMENT REQUESTED]
Matlock [CONFIDENTIAL TREATMENT REQUESTED]
Knob Creek [CONFIDENTIAL TREATMENT REQUESTED]
Seymour [CONFIDENTIAL TREATMENT REQUESTED]
Mill Creek [CONFIDENTIAL TREATMENT REQUESTED]
Walden Creek [CONFIDENTIAL TREATMENT REQUESTED]
Koontz Creek [CONFIDENTIAL TREATMENT REQUESTED]
Hickory Valley [CONFIDENTIAL TREATMENT REQUESTED]
Limestone Creek [CONFIDENTIAL TREATMENT REQUESTED]
East Sevierville [CONFIDENTIAL TREATMENT REQUESTED]
South Clinton [CONFIDENTIAL TREATMENT REQUESTED]
State Road 168 [CONFIDENTIAL TREATMENT REQUESTED]
Ford [CONFIDENTIAL TREATMENT REQUESTED]
West Morristown [CONFIDENTIAL TREATMENT REQUESTED]
Tellico Parkway [CONFIDENTIAL TREATMENT REQUESTED]
Fox Hill [CONFIDENTIAL TREATMENT REQUESTED]
Union Grove [CONFIDENTIAL TREATMENT REQUESTED]
61
<PAGE>
SCHEDULE 2 TO ATTACHMENT VII
OF MASTER LEASE BETWEEN SPECTRASITE AND TRITEL
MARKET SPECIFIC TERMS
1. TRITEL MARKET: Chattanooga Market - This Schedule shall apply to the
Chattanooga Market only.
2. MINIMUM NUMBER OF SITES: __ -- Tritel shall and hereby grants to SpectraSite
the right to develop, construct and lease a minimum of twenty-five (25) Tower
Facilities in the Chattanooga Market more particularly described in Exhibit A
attached hereto. The parties acknowledge and agree that upon the date of the
execution of this Schedule, Tritel and SpectraSite have only identified
seventeen (17) sites for the location of Tower Facilities in the Chattanooga
Market. In the event that Tritel does not require the construction of 25 new
Tower Facilities in the Chattanooga Market during the 1999 calendar year, all of
the new Tower Facilities which Tritel must construct and install in the
Chattanooga Market in the 1999 calendar year, which Tritel intends to assign to
a third (3rd) party, shall be constructed, developed and owned by SpectraSite,
and Tritel shall grant SpectraSite the right to develop, construct and lease
additional sites in other Tritel Markets in addition to those sites set forth on
the other Schedules to Exhibit VII so that the cumulative minimum number of
sites set forth in Schedules 1 and 2 to Exhibit VII shall not be diminished.
3. PRE-DEVELOPMENT COSTS: (a) For each Site identified on Exhibit A attached
hereto, SpectraSite shall reimburse Tritel for the Site Acquisition Services
completed for that Site according to the amounts set forth on Exhibit A. Such
payment shall be made within fifteen (15) days of the date that the Assignment
is executed by both parties. Notwithstanding anything contained in the Master
Lease, such payment shall be the only payment or reimbursement which SpectraSite
makes to Tritel for reimbursement of Pre-Development costs for the Sites
identified on Exhibit A. Upon the execution of the Assignment of the Prime Lease
from Tritel to SpectraSite, SpectraSite shall assume all responsibility for any
Pre-Development Costs incurred after the date of the Assignment, subject to the
terms of the Master Lease. (b) For each additional Tower Site which Tritel
grants SpectraSite the right to develop, construct and lease for which
SpectraSite has performed Site Acquisition Services, the amount of the
reimbursement for such Site Acquisition Services shall be negotiated between the
parties in accordance with the milestone price guide on Exhibit B attached
hereto and shall be agreed upon in an exhibit which shall be attached hereto and
made a part hereof and shall be incorporated into this Agreement as if
originally executed and attached herewith and such agreement shall be effective
upon the execution of the exhibit by duly authorized representatives of
SpectraSite and Tritel. The amount of reimbursement for such Site Acquisition
Services shall also be and shall be set forth in the Notice from Tritel to
SpectraSite pursuant to paragraph 1.1(b) to the Master Lease and in the
Acceptance of the Site by SpectraSite pursuant to paragraph 1.1(b) of the Master
Lease.
4. SCHEDULE OF COMPLETION: SpectraSite shall deliver all Tower Sites fully
completed and ready for the installation of Tritel's Equipment, excepting those
Tower Sites delayed by Tritel actions or inaction's or those Tower Sites delayed
beyond SpectraSite's control, including but not limited to governmental
approvals, moratoria, FAA or force majeure according to the following schedule
which was mutually agreed upon between the parties at a meeting on April 12,
1999:
June 15, 1999 five (5) Tower Sites
July 15, 1999 five (5) Tower Sites
August 15, 1999 three (3) Tower Sites
August 30, 1999 two (2) Tower Sites
September 15, 1999 three (3) Tower Sites
62
<PAGE>
SpectraSite shall diligently exercise its best efforts to construct and deliver
all of the Tower Sites in the clusters which have been developed by Tritel for
the best system optimization.
5. RENT: (a) Initial Term. As consideration for the use and occupancy of the
Premises under any SLA during the Initial Term, Tritel shall pay SpectraSite or
such entity as SpectraSite may designate from time to time, on the first day of
each calendar month during the Initial Term, the sum of [CONFIDENTIAL TREATMENT
REQUESTED] per month. Rent shall be payable on the first day of each month in
advance to SpectraSite at SpectraSite's address as specified in Paragraph 4.5(t)
of the Master Lease. In the event that the Commencement Date is other than the
first day of a calendar month, Rent shall be prorated over the number of days
remaining in the month in which the SLA commenced and shall thereafter be paid
on the first day of each calendar month. SpectraSite and Tritel shall execute a
letter agreement to attach to each SLA to confirm the amount of the Rent.
(b) Renewal Terms. In the event that Tritel elects to renew an SLA as
provided in paragraph 3.5, Rent shall be increased by fifteen percent over the
Rent accruing under the immediately prior term of the SLA.
6. COMMENCEMENT DATE. The Initial Term of the SLA for any Tower Facility which
is completed prior to September 1, 1999 in the Chattanooga Market shall commence
on the earlier of: (i) September 1, 1999; or (ii) 90 calendar days from the
acceptance of a Site by Tritel pursuant to Section 2.8 of this Agreement (the
"Launch Commencement Date"). The Initial Term of the SLA for any Tower Facility
which is completed on or after September 1, 1999 in the Chattanooga Market shall
commence on the date on which Tritel accepts the Site pursuant to Section 2.8 of
this Agreement (the "Post Launch Commencement Date") (the Launch Commencement
Date and the Post Launch Commencement Date are collectively referred to as the
"Commencement Date").
7. COMPLETION OF REAL ESTATE SERVICES ON NON-SPECTRASITE GREENFIELD SITES. Until
formal written notification from Tritel, SpectraSite shall continue to perform
fee based acquisition services on Greenfield sites in the Knoxville Market and
the Chattanooga Market not assigned to SpectraSite as a Tower Facility under
this Schedule, such services to be performed pursuant to the terms of the Site
Acquisition Services Agreement. Tritel shall elect to either continue the Site
Acquisition Services on the time and materials basis set out in the Site
Acquisition Services Agreement or to convert the Tower Sites at the individually
appropriate points, over to the milestone payment schedule that is attached
hereto as Exhibit "A" to this Schedule. The billing and expense portion of the
Site Acquisition Services Agreement will be altered and modified the day after
receipt of such written notification.
8. SCHEDULE. This Schedule shall be added to and modify the terms and conditions
of the Master Lease and hereby is incorporated into the terms of the Master
Lease. In the event that there is a conflict or contradiction between the terms
and conditions of the Master Lease and this Schedule, the terms and conditions
of this Schedule shall control.
63
<PAGE>
IN WITNESS WHEREOF, SpectraSite and Tritel have signed this Schedule as
of the date and year below.
TRITEL: SPECTRASITE:
TRITEL COMMUNICATIONS, INC. SPECTRASITE COMMUNICATIONS, INC.
By: By:
---------------------------------- ----------------------------------
Kenneth F. Harris Name:
Director of Site Acquisition --------------------------------
And Property Administration Title:
-------------------------------
64
<PAGE>
EXHIBIT "A"
TO SCHEDULE 2 TO ATTACHMENT VII OF MASTER LEASE
BETWEEN SPECTRASITE AND TRITEL
Agreed Upon BTS Sites and Rebate for Tritel Chattanooga
-------------------------------------------------------
<TABLE>
<CAPTION>
Site Number Site Name COMPLETION POINT Agreed Upon Rebate/
AS OF 2/25/99 Rental Abatement Value
<S> <C> <C> <C>
076-003-00A Bushtown Complete thru Milestone #3 [CONFIDENTIAL TREATMENT REQUESTED]
076-007-00A O-Grady Complete thru Milestone #3 [CONFIDENTIAL TREATMENT REQUESTED]
076-012-00A Godsey Ridge Complete thru Milestone #3 [CONFIDENTIAL TREATMENT REQUESTED]
076-027-00A Sugartown Complete thru Milestone #3 [CONFIDENTIAL TREATMENT REQUESTED]
076-028-00A Ft Ogelthorpe Complete thru Milestone #3 [CONFIDENTIAL TREATMENT REQUESTED]
076-0300R1 Rock Spring Complete thru Milestone #1 [CONFIDENTIAL TREATMENT REQUESTED]
076-034-00X Slygo Complete thru Milestone #3 [CONFIDENTIAL TREATMENT REQUESTED]
076-035-00X Trenton Complete thru Milestone #1 [CONFIDENTIAL TREATMENT REQUESTED]
076-036-00X Union Complete thru Milestone #4 [CONFIDENTIAL TREATMENT REQUESTED]
076-037-00X New Hope Complete thru Milestone #3 [CONFIDENTIAL TREATMENT REQUESTED]
076-050-0R1 Sale Creek Complete thru Milestone #1 [CONFIDENTIAL TREATMENT REQUESTED]
076-051-00X Graysville Complete thru Milestone #3 [CONFIDENTIAL TREATMENT REQUESTED]
076-052-00X Sentinel Hts (Dayton) Complete thru Milestone #3 [CONFIDENTIAL TREATMENT REQUESTED]
076-053-00A Short Tail Springs Complete thru Milestone #1 [CONFIDENTIAL TREATMENT REQUESTED]
102-008-00A Cedar Ridge Complete thru Milestone #2 [CONFIDENTIAL TREATMENT REQUESTED]
102-010-00X Chattsworth East Complete thru Milestone #3 [CONFIDENTIAL TREATMENT REQUESTED]
102-011-000 Mt. Rachel Complete thru Milestone #2 [CONFIDENTIAL TREATMENT REQUESTED]
-------------
Dayton Boulevard No Reimbursement
</TABLE>
65
<PAGE>
EXHIBIT "B"
MILESTONE PER SITE PRICING
FOR REBATE/RENTAL ABATEMENT ON BTS SITES AND FOR COMPLETION OF
CHATTANOOGA NON-BTS GREENFIELD SITES OR COLLOCATION SITES
REQUIRING SITE ACQUISITION SERVICES
MILESTONE FEE/Rebate
- --------- ----------
1) DELIVERY OF SITE ID REPORTS TO TRITEL (UP TO 4 PER SEARCH RING) [CONFIDENTIAL
TREATMENT
REQUESTED]
2) DELIVERY OF SOR TO TRITEL ON PREFERRED SITE [CONFIDENTIAL
TREATMENT
REQUESTED]
3) DELIVERY OF LEASE TO TRITEL (EXECUTED BY LANDLORD) [CONFIDENTIAL
TREATMENT
REQUESTED]
4) ZONING COMPLETED OR STATEMENT OF NO ZONING REQUIRED** [CONFIDENTIAL
TREATMENT
REQUESTED]
5) NOTICE OF DELIVERED SITE* [CONFIDENTIAL
TREATMENT
REQUESTED]
* PAYMENT FOR NOTICE OF DELIVERED SITE IS NOT TO EXCEED 45 CALENDAR DAYS AFTER
THE LEASE IS EXECUTED IF NO ZONING, OR 10 DAYS AFTER ZONING IS APPROVED IF
ZONING IS REQUIRED.
** TRITEL IS RESPONSIBLE FOR LEGAL FEES IF SUCH REPRESENTATION IS REQUIRED AT
ZONING HEARINGS
NOTE: IN THE EVENT TRITEL ASSIGNS ONE OF THE NON-BTS SITES SUBJECT TO THE ABOVE
TO A BTS COMPANY OTHER THAN SPECTRASITE, SPECTRASITE SHALL BE ALLOWED TO
COMPLETE AND BILL TRITEL FOR THE THEN UNCOMPLETED MILESTONE.
66
<PAGE>
ATTACHMENT "VIII"
NOTICE OF COMPLETION OF TOWER FACILITIES
Tritel
- -----------------------------------
- -----------------------------------
- -----------------------------------
Re: Notice of Completion of Tower Facilities ("Notice") for
Site # _____ ("_________ Site")
Dear _____________:
On the ______ day of _________, ____ the Tower Facilities at the __________
Site were completed in accordance with the terms and conditions of the Master
Lease between SpectraSite and Tritel. Pursuant to Paragraph 2.8 of the Master
Lease, Tritel has a period of fifteen (15) days after the date of this Notice of
Completion to provide a Punch List of items to be completed by SpectraSite in
order to render the Tower Facilities completed in accordance with the Plans and
Specifications in the opinion of Tritel.
Sincerely,
-------------------------------
67
<PAGE>
ATTACHMENT IX
____________, 19__
Re: Site Lease Agreement
Site:
Dear :
Tritel Communications, Inc. ("Tritel") and SpectraSite Communications, Inc.
(the "Tower Company") entered into a Site Lease Agreement for the
above-captioned site. The Site Lease Agreement provides that Tritel and
SpectraSite shall execute a letter agreement which shall be attached to the SLA
confirming the calendar date which the parties understand to be the Commencement
Date for each SLA.
Tritel and SpectraSite agree that the Commencement Date for the
above-referenced site is ____________.
By countersigning this letter, SpectraSite acknowledges and agrees to the
Commencement Date listed above for the Site. This letter shall constitute an
amendment to the Site Lease Agreement.
TRITEL COMMUNICATIONS, INC.
By:
--------------------------------
Its:
-------------------------------
Acknowledged and Agreed to this _ day of _______________, ___.
SPECTRAS1TE COMMUNICATIONS, INC.
By:
--------------------------------
Its:
-------------------------------
68
<PAGE>
SCHEDULE 3 TO ATTACHMENT VII
OF MASTER LEASE BETWEEN SPECTRASITE AND TRITEL
MARKET SPECIFIC TERMS
1. TRITEL MARKET: Birmingham Market - This Schedule shall apply to the
Birmingham Market only.
2. NUMBER OF SITES: -Tritel shall and hereby grants to SpectraSite the right to
develop, construct and lease ten (10) Tower Facilities in the Birmingham Market
more particularly described in Exhibit A attached hereto.
3. PRE-DEVELOPMENT COSTS: (a) For each Site identified on Exhibit A attached
hereto, SpectraSite shall reimburse Tritel for the Site Acquisition Services
completed for that Site according to the amounts set forth on Exhibit A. Such
payment shall be made within fifteen (15) days of the date that the Assignment
is executed by both parties. Notwithstanding anything contained in the Master
Lease, such payment shall be the only payment or reimbursement which SpectraSite
makes to Tritel for reimbursement of Pre-Development costs for the Sites
identified on Exhibit A. Upon the execution of the Assignment of the Prime Lease
from Tritel to SpectraSite, SpectraSite shall assume all responsibility for any
Pre-Development Costs incurred after the date of the Assignment, subject to the
terms of the Master Lease. (b) For each additional Tower Site which Tritel
grants SpectraSite the right to develop, construct and lease for which
SpectraSite has performed Site Acquisition Services, the amount of the
reimbursement for such Site Acquisition Services shall be negotiated between the
parties in accordance with the milestone price guide on Exhibit B attached
hereto and shall be agreed upon in an exhibit which shall be attached hereto and
made a part hereof and shall be incorporated into this Agreement as if
originally executed and attached herewith and such agreement shall be effective
upon the execution of the exhibit by duly authorized representatives of
SpectraSite and Tritel. The amount of reimbursement for such Site Acquisition
Services shall also be and shall be set forth in the Notice from Tritel to
SpectraSite pursuant to paragraph 1.1(b) to the Master Lease and in the
Acceptance of the Site by SpectraSite pursuant to paragraph 1.1(b) of the Master
Lease.
4. SCHEDULE OF COMPLETION: SpectraSite shall deliver all Tower Sites fully
completed and ready for the installation of Tritel's Equipment, excepting those
Tower Sites delayed by Tritel actions or inaction's or those Tower Sites delayed
beyond SpectraSite's control, including but not limited to governmental
approvals, moratoria, FAA or force majeure according to the following schedule:
This portion of said Schedule shall be completed no later than August 31,
1999.
SpectraSite shall diligently exercise its best efforts to construct and deliver
all of the Tower Sites in the clusters which have been developed by Tritel for
the best system optimization.
5. RENT:
(a) Initial Term. As consideration for the use and occupancy of the
Premises under any SLA during the Initial Term, Tritel shall pay SpectraSite or
such entity as SpectraSite may designate from time to time, on the first day of
each calendar month during the Initial Term, the sum of [CONFIDENTIAL TREATMENT
REQUESTED] per month. Rent shall be payable on the first day of each month in
advance to SpectraSite at SpectraSite's address as specified in Paragraph 4.5(t)
of the Master Lease. In the event that the Commencement Date is other than the
first day of a calendar month, Rent shall be prorated over the number of days
remaining in the month in which the SLA commenced and shall thereafter be paid
on the first day of each calendar month. SpectraSite and Tritel shall execute a
letter agreement to attach to each SLA to confirm the amount of the Rent.
69
<PAGE>
(b) Renewal Terms. In the event that Tritel elects to renew an SLA as
provided in paragraph 3.5, Rent shall be increased by fifteen percent over the
Rent accruing under the immediately prior term of the SLA.
6. COMMENCEMENT DATE. The Initial Term of the SLA for any Tower Facility shall
commence on the date on which Tritel accepts the Site pursuant to Section 2.8 of
this Agreement (the "Commencement Date").
7. COMPLETION OF REAL ESTATE SERVICES ON NON-SPECTRASITE GREENFIELD SITES. Until
formal written notification from Tritel, SpectraSite shall continue to perform
fee based acquisition services on sites in the Birmingham not assigned to
SpectraSite as a Tower Facility under this Schedule, such services to be
performed pursuant to the terms of the Site Acquisition Services Agreement.
8. SCHEDULE. This Schedule shall be added to and modify the terms and conditions
of the Master Lease and hereby is incorporated into the terms of the Master
Lease. In the event that there is a conflict or contradiction between the terms
and conditions of the Master Lease and this Schedule, the terms and conditions
of this Schedule shall control.
IN WITNESS WHEREOF, SpectraSite and Tritel have signed this Schedule as of
the date and year below.
TRITEL: SPECTRASITE:
TRITEL COMMUNICATIONS, INC. SPECTRASITE COMMUNICATIONS, INC.
By: By:
-------------------------------- --------------------------------
Kenneth F. Harris Name:
Director of Site Acquisition ------------------------------
And Property Administration Title:
-----------------------------
Date: 8/3/99 Date:
------------------------------ ------------------------------
70
<PAGE>
EXHIBIT "A"
TO SCHEDULE 3 TO ATTACHMENT VII OF MASTER LEASE
BETWEEN SPECTRASITE AND TRITEL
Agreed Upon BTS Sites and Rebate for Tritel
-------------------------------------------
<TABLE>
<CAPTION>
COMPLETION POINT AGREED UPON REBATE/
Site Number Site Name AS OF 7/29/99 RENTAL ABATEMENT VALUE
- ----------- ---------
<S> <C> <C> <C>
044-023-R10 Sicard Hollow In Redesign [CONFIDENTIAL TREATMENT REQUESTED]
044-044-000 Wooddale Milestone 3 [CONFIDENTIAL TREATMENT REQUESTED]
044-054-R10 Morgan Milestone 3 [CONFIDENTIAL TREATMENT REQUESTED]
044-068-R10 USX Milestone 2 [CONFIDENTIAL TREATMENT REQUESTED]
044-069-R10 Hueytown Milestone 3 [CONFIDENTIAL TREATMENT REQUESTED]
044-087-000 Collegeville Milestone 2 [CONFIDENTIAL TREATMENT REQUESTED]
044-135-R10 Longview Milestone 3 [CONFIDENTIAL TREATMENT REQUESTED]
044-139-R10 Alabaster Milestone 3 [CONFIDENTIAL TREATMENT REQUESTED]
*Tritel to complete &
assign lease
-----------
</TABLE>
71
<PAGE>
EXHIBIT "B"
MILESTONE PER SITE PRICING
FOR REBATE/RENTAL ABATEMENT ON BTS SITES
MILESTONE FEE/Rebate
- --------- ----------
1) DELIVERY OF SITE ID REPORTS TO TRITEL (UP TO 4 PER SEARCH RING) [CONFIDENTIAL
TREATMENT
REQUESTED]
2) DELIVERY OF SOR TO TRITEL ON PREFERRED SITE [CONFIDENTIAL
TREATMENT
REQUESTED]
3) DELIVERY OF LEASE TO TRITEL (EXECUTED BY LANDLORD) [CONFIDENTIAL
TREATMENT
REQUESTED]
4) ZONING COMPLETED OR STATEMENT OF NO ZONING REQUIRED* [CONFIDENTIAL
TREATMENT
REQUESTED]
5) NOTICE OF DELIVERED SITE [CONFIDENTIAL
TREATMENT
REQUESTED]
** TRITEL IS RESPONSIBLE FOR LEGAL FEES IF SUCH REPRESENTATION IS REQUIRED AT
ZONING HEARINGS
72
<PAGE>
ATTACHMENT "VIII"
NOTICE OF COMPLETION OF TOWER FACILITIES
Tritel
- -----------------------------
- -----------------------------
- ----------------------------- ----------
Re: Notice of Completion of Tower Facilities ("Notice") for
Site # _____ ("_________ Site")
Dear _____________:
On the ______ day of _________, ____ the Tower Facilities at the ________ Site
were completed in accordance with the terms and conditions of the Master Lease
between SpectraSite and Tritel. Pursuant to Paragraph 2.8 of the Master Lease,
Tritel has a period of fifteen (15) days after the date of this Notice of
Completion to provide a Punch List of items to be completed by SpectraSite in
order to render the Tower Facilities completed in accordance with the Plans and
Specifications in the opinion of Tritel.
Sincerely,
---------------------------------
73
<PAGE>
ATTACHMENT B
AGREED UPON BTS SITES AND REBATE FOR TRITEL CHATTANOOGA
<TABLE>
<CAPTION>
SITE NUMBER SITE NAME COMPLETION POINT AGREED UPON REBATE/
AS OF 2/25/99 RENTAL ABATEMENT VALUE
<S> <C> <C> <C>
076-003-00A Bushtown Complete thru Milestone #3 [CONFIDENTIAL TREATMENT REQUESTED]
076-007-00A O-Grady Complete thru Milestone #3 [CONFIDENTIAL TREATMENT REQUESTED]
076-012-00A Godsey Ridge Complete thru Milestone #3 [CONFIDENTIAL TREATMENT REQUESTED]
076-027-00A Sugartown Complete thru Milestone #3 [CONFIDENTIAL TREATMENT REQUESTED]
076-028-00A Ft Ogelthorpe Complete thru Milestone #3 [CONFIDENTIAL TREATMENT REQUESTED]
076-0300R1 Rock Spring Complete thru Milestone #1 [CONFIDENTIAL TREATMENT REQUESTED]
076-034-00X Slygo Complete thru Milestone #3 [CONFIDENTIAL TREATMENT REQUESTED]
076-035-00X Trenton Complete thru Milestone #1 [CONFIDENTIAL TREATMENT REQUESTED]
076-036-00X Union Complete thru Milestone #4 [CONFIDENTIAL TREATMENT REQUESTED]
076-037-00X New Hope Complete thru Milestone #3 [CONFIDENTIAL TREATMENT REQUESTED]
076-050-0R1 Sale Creek Complete thru Milestone #1 [CONFIDENTIAL TREATMENT REQUESTED]
076-051-00X Graysville Complete thru Milestone #3 [CONFIDENTIAL TREATMENT REQUESTED]
076-052-00X Sentinel Hts (Dayton) Complete thru Milestone #3 [CONFIDENTIAL TREATMENT REQUESTED]
076-053-00A Short Tail Springs Complete thru Milestone #1 [CONFIDENTIAL TREATMENT REQUESTED]
102-008-00A Cedar Ridge Complete thru Milestone #2 [CONFIDENTIAL TREATMENT REQUESTED]
102-010-00X Chattsworth East Complete thru Milestone #3 [CONFIDENTIAL TREATMENT REQUESTED]
102-011-000 Mt. Rachel Complete thru Milestone #2 [CONFIDENTIAL TREATMENT REQUESTED]
-------------
Dayton Boulevard No Reimbursement
</TABLE>
74
<PAGE>
ATTACHMENT A
AGREED UPON BTS SITES AND REBATE FOR TRITEL KNOXVILLE
SITE NUMBER SITE NAME AGREED UPON REBATE/
RENTAL ABATEMENT VALUE
Wise Hill [CONFIDENTIAL TREATMENT REQUESTED]
Westview [CONFIDENTIAL TREATMENT REQUESTED]
Park City [CONFIDENTIAL TREATMENT REQUESTED]
Presley Lake [CONFIDENTIAL TREATMENT REQUESTED]
Oak Grove Heights [CONFIDENTIAL TREATMENT REQUESTED]
Copper Ridge [CONFIDENTIAL TREATMENT REQUESTED]
Stanley Road [CONFIDENTIAL TREATMENT REQUESTED]
Bright Hope Church [CONFIDENTIAL TREATMENT REQUESTED]
Rocky Hill [CONFIDENTIAL TREATMENT REQUESTED]
Matlock [CONFIDENTIAL TREATMENT REQUESTED]
Knob Creek [CONFIDENTIAL TREATMENT REQUESTED]
Seymour [CONFIDENTIAL TREATMENT REQUESTED]
Mill Creek [CONFIDENTIAL TREATMENT REQUESTED]
Walden Creek [CONFIDENTIAL TREATMENT REQUESTED]
Koontz Creek [CONFIDENTIAL TREATMENT REQUESTED]
Hickory Valley [CONFIDENTIAL TREATMENT REQUESTED]
Limestone Creek [CONFIDENTIAL TREATMENT REQUESTED]
East Sevierville [CONFIDENTIAL TREATMENT REQUESTED]
South Clinton [CONFIDENTIAL TREATMENT REQUESTED]
State Road 168 [CONFIDENTIAL TREATMENT REQUESTED]
Ford [CONFIDENTIAL TREATMENT REQUESTED]
West Morristown [CONFIDENTIAL TREATMENT REQUESTED]
Tellico Parkway [CONFIDENTIAL TREATMENT REQUESTED]
Fox Hill [CONFIDENTIAL TREATMENT REQUESTED]
Union Grove [CONFIDENTIAL TREATMENT REQUESTED]
75
<PAGE>
Crown Contract Number: T016
MASTER BUILD-TO-SUIT SERVICES AND LICENSE AGREEMENT
between
CROWN COMMUNICATION INC.,
A DELAWARE CORPORATION,
doing business in
Arizona as Crown Communications New Mexico as CommCrown Inc.
Colorado as Crown Communications North Carolina as Crown
Delaware as Crown Communication Inc. Communication Inc.
Florida as Crown Comm Inc. North Dakota as Crown Communications
Indiana as CommCrown Inc. Ohio as Crown Communications
Kentucky as Crown Communications Oklahoma as Crown Comm Inc.
Louisiana as Crown Communication Inc. Pennsylvania as Crown Communications
(of Delaware) South Carolina as Crown
Michigan as Crown Communication Inc. Communication Inc.
Mississippi as Crown Communication Inc. Tennessee as Crown Communications
Nevada as Crown Communication Inc. Texas as Crown Comm, Inc.
New Jersey as Crown Comm Inc. Utah as Crown Communication Inc.
Virginia as Crown Communication Inc.
West Virginia as Crown Communications
and
TRITEL COMMUNICATIONS, INC.,
A DELAWARE CORPORATION
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MASTER BUILD-TO-SUIT SERVICES AND LICENSE AGREEMENT
THIS MASTER BUILD-TO-SUIT SERVICES AND LICENSE AGREEMENT (the
"Agreement" or "Master License") is made this ____ day of ___________________,
1999, between TRITEL COMMUNICATIONS, INC., a Delaware corporation, with its
principal offices located at 112 East State Street, Suite B, Ridgeland,
Mississippi 39157 ("TRITEL"), and CROWN COMMUNICATION INC., a Delaware
corporation, (doing business in various jurisdictions as indicated on the cover
page of this Agreement), with its principal offices located at 375 Southpointe
Boulevard, Canonsburg, Pennsylvania 15317 ("CROWN").
W I T N E S S E T H:
WHEREAS, CROWN owns or controls or will acquire real property on which
it has or will be constructing communications facilities used for the
installation of wireless communications equipment ("Crown Site");
WHEREAS, TRITEL is a wireless communications services provider that
owns and operates communications facilities;
WHEREAS, TRITEL desires to obtain the right to install and operate its
equipment on communications facilities in service areas licensed by the Federal
Communications Commission ("FCC") to TRITEL and its affiliates; and
WHEREAS, TRITEL desires to contract with CROWN to provide build-to-suit
and development services in accordance with the terms of this Agreement.
NOW THEREFORE, for [CONFIDENTIAL TREATMENT REQUESTED] and other good
and valuable consideration including the mutual covenants contained herein, the
legal receipt and sufficiency of which are hereby mutually acknowledged, the
parties intend to be legally bound hereby and do agree as follows:
I. GRANT, PRE-DEVELOPMENT SERVICES AND ASSIGNMENT
I.A. GRANT.
TRITEL grants CROWN the nonexclusive right to develop, construct and
license those sites in TRITEL Markets which involve the construction of towers
and related facilities ("Tower Sites" or "Sites") upon the terms and conditions
of this Master License. CROWN acknowledges and agrees that the right to develop,
construct and license the Tower Sites is not an exclusive right and that TRITEL
may grant similar rights to other parties; however, TRITEL shall offer CROWN the
opportunity to develop, construct and license the minimum number of Sites in
accordance with the Schedules attached to Exhibit "C" to this Agreement.
I.B. APPLICATION.
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I.B.1 NOTICE. In the event that TRITEL identifies a Tower Site or
search ring where it desires to place wireless communications equipment for its
business operational purposes, and TRITEL intends to grant to CROWN the right to
develop, construct and lease such Tower Site and license usage of such Tower
Site to TRITEL, TRITEL shall give CROWN notice thereof as follows:
I.B.1.a. NOTICE OF SEARCH RING. In the event that TRITEL has
issued a search ring for the Tower Site, but has not obtained a lease, contract,
option or other right to lease the property for the Tower Site, TRITEL shall
notify CROWN in writing of the Parameters of the search ring for the Tower Site
(the "Search Ring Notice").
I.B.1.b. NOTICE OF LEASE. In the event that TRITEL has obtained an
option, lease, contract or other right to lease the property for the Tower Site,
TRITEL shall notify CROWN in writing of and deliver to CROWN a complete copy of
the lease, option, contract or other right to lease the property for the Tower
Site (the "Lease Notice").
I.B.1.c. NOTICE OF BUILDING PERMIT. In the event that TRITEL has
obtained a lease, contract, option or other right to lease property for a Tower
Site and is preparing to apply for a building permit for the Tower Site, TRITEL
shall notify CROWN in writing, at least ten (10) days before the date that
TRITEL intends to make application for a building permit for Tower Site (the
"Building Permit Notice") (the Search Ring Notice, the Lease Notice and the
Building Permit Notice shall be collectively referred to as the "Notice of Tower
Site").
I.B.1.d. OBLIGATION TO GIVE NOTICE. Notwithstanding paragraphs
I.B.1.a, b, and c, TRITEL shall not be obligated to provide CROWN the Notice of
Tower Site until ten (10) days prior to the date that TRITEL intends to make
application for a building permit for the Tower Site, provided however, TRITEL
may elect to provide CROWN Notice of the Tower Site pursuant to I.B.1.a. or
I.B.1.b. above.
I.B.2 ACCEPTANCE OR REJECTION OF TOWER SITE. CROWN shall have a period
of twenty (20) days (the "Application Period") from the date of receipt of the
Notice of Tower Site to accept (in the event of acceptance, the "Notice of
Acceptance") or reject in writing any such Tower Site because of any
characteristics associated with the Tower Site which would in the reasonable
opinion of CROWN adversely impact CROWN's development or ownership of the Tower
Site. In the event that CROWN fails to provide TRITEL with written notice of
either CROWN's acceptance or rejection of the Tower Site within this twenty (20)
day period, CROWN shall be deemed to have rejected such Tower Site. In the event
that CROWN rejects any Tower Site, CROWN shall have no right to require an
assignment of the Prime Lease or obligation to develop the Tower Site and TRITEL
shall have no further obligation to CROWN in regards to the Tower Site under the
terms of the Agreement.
Notwithstanding the foregoing, the parties acknowledge that some of the
Notices of Tower Sites may include Tower Sites that CROWN may conditionally
accept and attempt to obtain further Governmental Approvals (as defined in
Section I.F.) in order to develop and construct those Tower Sites to CROWN's
needs, i.e., developing a multi-carrier, co-locatable Tower Site. Such
conditional approval includes CROWN's right to thereafter reject the Tower Site
because of CROWN's inability to obtain additional Governmental Approvals to so
develop
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the Tower Site subject to any terms or provisions which may be in the Schedules
attached to Exhibit "C".
I.C. DUE DILIGENCE. During the (i) Application Period; and (ii) period
between the Application Period and the Commencement Date of the applicable SLA,
in the event that CROWN provides TRITEL with a Notice of Acceptance upon the
Tower Site; and (iii) term of the applicable SLA, provided that CROWN has
assumed the Prime Lease, if applicable, and entered into a SLA with TRITEL,
TRITEL shall make available to CROWN such information as CROWN may reasonably
require about the Tower Site, which information shall include, but shall not be
limited to: (a) zoning permits and approvals, variances, building permits and
such other federal, state or local governmental approvals which have been
obtained or for which TRITEL has made application; (b) the construction,
engineering and architectural drawings and related site plan and surveys
pertaining to the construction of the Tower Facilities on the Site; (c) the
geotechnical report for the Site which has been commissioned by TRITEL, if
commissioned by TRITEL; (d) the title reports, commitments for title insurance,
ownership and encumbrance reports, title opinion letters, copies of instruments
in the chain of title or any other information which may have been produced
regarding title to the Site and the Easements; and (e) the environmental
assessments including phase I reports and any reports relating to
contemporaneous or subsequent intrusive testing, the "FCC Checklist" performed
pursuant to National Environmental Protection Act ("NEPA") requirements and any
other information which may have been produced regarding the environmental
condition of the Site, the Easements or neighboring real property. TRITEL shall
cooperate with CROWN in making reasonable modifications to the foregoing
information at the request of CROWN.
I.D. ASSIGNMENT AND ASSUMPTION OF PRIME LEASE. In the event that CROWN
accepts the Tower Site for development pursuant to section I.B.2 of this
Agreement, and TRITEL has entered a Prime Lease with the Prime Lessor, TRITEL
shall assign to CROWN, and CROWN shall assume and agree to be bound by, the
Prime Lease, together with the Easements to the Site pursuant to the Assignment
and the relationship of CROWN and TRITEL with regard to the Tower Site shall
thereafter be governed by this Agreement. The form of the Assignment by which
TRITEL assigns the Prime Lease and any Easements to CROWN shall be substantially
the same form as that which is attached hereto as Exhibit "A". The Assignment
shall be executed by TRITEL and CROWN in three (3) counterpart originals, and
one original execution copy shall be delivered to TRITEL and two (2) original
execution copies shall be delivered to CROWN within ten (10) days of the Notice
of Acceptance. In addition thereto, CROWN and TRITEL shall execute a Memorandum
of Assignment in substantially the form of Exhibit "B" to be recorded in the
office of the property records in the County where the Site is located. The
Memorandum of Assignment shall be executed and delivered to CROWN within ten
(10) days of the Notice of Acceptance. CROWN shall record the Assignment prior
to the commencement of construction of the Tower Facilities as commencement of
construction is defined in any mechanics or materialman's lien statute in the
state where the Site is located. In addition thereto, CROWN shall exercise its
best efforts to obtain from the Prime Lessor a release of TRITEL from all
liabilities under the Prime Lease, such best efforts being accomplished by
providing the Prime Lessor with the form of the Estoppel Certificate attached
hereto as Exhibit "G" and requesting its execution. If the Prime Lessor refuses
to execute such Estoppel Certificate, then CROWN agrees to indemnify and hold
harmless TRITEL from any assertions made by the Prime Lessor against TRITEL as a
result of the breach of any underlying agreement obligations. Furthermore,
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CROWN shall and hereby agrees to hold TRITEL harmless and indemnify TRITEL from
any and all claims, losses, obligations, damages, costs or expenses ever
suffered, threatened or incurred by TRITEL by reason of any act or omission of
CROWN under the Prime Lease, including without limitation, any default under the
Prime Lease. TRITEL shall hereby agree to hold CROWN harmless and indemnify
CROWN from any or all claims, losses, objections, damages, costs or expenses
suffered, threatened, or incurred by CROWN by reason of any act or omission of
TRITEL under the Prime Lease which occurred or accrued prior to the Assignment.
I.E. COMPLETION OF PRE-DEVELOPMENT WORK.
I.E.1 In the event that CROWN accepts the Tower Site prior to the
entry of a Prime Lease pursuant to the issuance of a Search Ring Notice, CROWN
shall respond to each Search Ring Notice within thirty (30) days of its receipt
by identifying up to three (3) potential sites reasonably consistent with the
requirements of the Search Ring Notice. Within ten (10) business days of CROWN's
submission to TRITEL of the three candidates for the Tower Site, TRITEL shall
test and/or review the preferred candidate or candidates for the Tower Site and
give CROWN notice whether the candidate(s) is or are satisfactory to fulfill the
conditions of the Search Ring Notice and to satisfy TRITEL's conditions and
criteria for the construction of its wireless communications network. In the
event that TRITEL elects to accept one of the candidates for the Tower Site,
TRITEL shall give CROWN notice that TRITEL accepts the Tower Site ("Preliminary
Site Acceptance") and that within ten (10) days of CROWN's receipt of the notice
that TRITEL has preliminarily accepted the Tower Site, CROWN shall commence
obtaining all Pre-Development Information pursuant to Sections I.E. and I.F.
CROWN shall deliver a copy of a completely executed, complete and duly
authorized lease with the Prime Lessor within thirty (30) days of the
Preliminary Site Acceptance.
I.E.2 In the event that CROWN accepts the Tower Site prior to the
time that a building permit has been issued for the Tower Site, CROWN shall
obtain and be responsible and liable for the completion of all matters necessary
to complete the construction of the Tower Facilities upon the Tower Site,
including without limitation: (a) obtaining preliminary Federal Aviation
Administration ("FAA") aeronautical evaluations for the Tower Site; (b)
obtaining the construction, engineering and architectural drawings and related
site plan and surveys pertaining to the construction of the Tower Facilities on
the Tower Site; (c) obtaining the geotechnical report for the Tower Site; (d)
obtaining a title report, commitment for title insurance, ownership and
encumbrance report, title opinion letter, copies of instruments in the chain of
title or any other information which may have been produced regarding the
marketability of title and title to the Tower Site and the Easements; and, (e)
obtaining environmental assessments including phase I reports and a report
relating to contemporaneous or subsequent intrusive testing, the "FCC Checklist"
performed pursuant to NEPA requirements and any other information, documents,
permits or items which may be necessary to obtain permits and maintain licensing
for the operation of a wireless communications facility upon the Tower Site
(collectively the "Pre-Development Information"). CROWN shall complete, make
available to and deliver to TRITEL copies of all of the Pre-Development
Information prior to the execution of a SLA, in accordance with the time frames
outlined in Exhibit "C". The completion and delivery of the Pre-Development
Information shall be subject to delays from substantial labor disputes, fire,
unusual delay in deliveries not caused by or contributed to by CROWN or its
contractors, abnormal adverse weather conditions not reasonably anticipated, or
government actions or inactions not
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caused or contributed to by CROWN, or other unavoidable casualties or similar
causes beyond reasonable control of CROWN or CROWN's agents.
I.F. ZONING AND GOVERNMENTAL APPROVALS. CROWN acknowledges that TRITEL
may desire to be involved in the zoning and governmental approval process for
any Tower Site for which it is necessary to obtain any zoning or governmental
approvals, permits, variances, or other action from any federal, state or local
governmental body or entity ("Governmental Approvals") for the Tower Site and
for those Tower Sites that CROWN has accepted prior to the issuance of such
Government Approvals, where reasonably practicable and where CROWN has not
entered into a lease or license with any other carrier for the use of the Tower
Site. As such, the parties agree that if TRITEL desires to be involved in such
approval process, then it shall provide CROWN with notice that it intends to be
so involved; however, TRITEL recognizes that CROWN shall be the lead advocate in
obtaining such approvals and coordinate its advocacy with TRITEL in a manner
that will not cause adversity to TRITEL's business reputation. Although CROWN
shall maintain the lead advocacy role, CROWN agrees to coordinate the following
matters with TRITEL prior to their applicable uses:
(i) any application, motion, appeal or action ("Government
Application") for such Government Approvals; and
(ii) any presentations, witnesses, evidence, materials or reproduced
works, or similar items, matters or parties which CROWN intends
to utilize or present for or to any person, entity, body or
commission for such Governmental Approval; and
(iii) TRITEL's request to hire or use any witnesses, attorneys,
consultants, lobbyists, public relations consultants, or parties
which TRITEL deems reasonably necessary to obtain the
Governmental Approval.
If it is determined that TRITEL's participation or approved requests will
increase the cost of obtaining such Governmental Approvals, then TRITEL shall
pay and be liable for that added expense (the addition of which shall be
documented by CROWN). In the event that CROWN has not entered into a lease or
license with any other carrier for the usage of the Tower upon the Tower Site,
TRITEL shall have the right at any time to withdraw, dismiss, terminate or
otherwise cease any process, hearing or proceeding upon or regarding a
Government Application. In the event that there is another carrier which has
entered into a lease or license for space upon the Tower Facility and it is not
necessary for the Government Approval to have more than one (1) carrier located
upon the Tower Facility, and TRITEL desires to withdraw from the Government
application, upon these terms and conditions, TRITEL may withdraw from the
Government Application and shall have no further obligation to CROWN regarding
the Applicable Tower Site. Notwithstanding the foregoing, CROWN may proceed with
the Government Application, provided however, in the event that CROWN elects to
proceed with the Government Application, TRITEL shall have no further obligation
to CROWN in regards to the Government Application, the SLA or this Agreement. In
the event that TRITEL desires to terminate, dismiss, withdraw or otherwise cease
any process, hearing, or proceeding upon or regarding a Government Application
and in the reasonable opinion of CROWN and CROWN s counsel (in writing) such
Government application could have been approved and CROWN does not proceed with
the Government Application as provided above or otherwise construct a tower or
similar
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facility upon the SITE, TRITEL shall reimburse CROWN for all fees and
expenses incurred in connection with the Government Applications and the
Pre-Development Costs.
I.G. DEFICIENCIES IN PRE-DEVELOPMENT INFORMATION.
Within fifteen (15) days following CROWN's delivery of all the
Pre-Development Information, the Plans and Specifications and the Governmental
Approval, as hereinafter defined, TRITEL may refuse to execute and reject a SLA
on any Tower Site because of any deficiency in the Pre-Development Information
or any deficiencies which are disclosed in the Pre-Development Information
(which TRITEL did not obtain or prepare), including without limitation: (a)
exceptions to the title of the Site or the Easements; (b) deficiencies in the
Plans and Specifications; (c) deficiencies in the geotechnical analysis or
environmental assessments for the Site or any deficiencies regarding the
condition of the Site; (d) deficiencies in any requirements under the NEPA; (e)
any deficiency in the SLA; or, (f) any deficiency in the Prime Lease or the due
authorization thereof; or (g) any deficiency in the Governmental Approvals. In
the event that TRITEL refuses to execute or rejects the SLA, TRITEL shall have
no obligation to execute a SLA or obligation to CROWN under this Master License
in regards to the Tower Site. Notwithstanding the foregoing, CROWN shall give
TRITEL notice of any deficiency in the Pre-Development Information and shall
have twenty (20) days from the date of such notice to cure, correct or otherwise
modify such deficiency in the Pre-Development Information. In the event that
CROWN does not cure such deficiency to the reasonable satisfaction of TRITEL,
TRITEL refuses to execute or rejects the SLA, and CROWN does not construct a
Tower upon the Tower Site, then TRITEL shall reimburse CROWN up to one-half of
the Pre-Development Costs (hereinafter defined) which accrued, or were incurred
prior to CROWN's notice of or knowledge of such deficiency in the
Pre-Development Information, pursuant to the schedule of costs and milestones in
Exhibit "C".
I.H. PRE-DEVELOPMENT COSTS.
CROWN shall reimburse TRITEL for the Pre-Development Costs as specified
in Exhibit "C."
I.I. NOTICE TO PROCEED AND CLOSE-OUT PACKAGE.
Upon completion of necessary site acquisition tasks, as described in
this Section I, CROWN will issue a notice to proceed (herein "Notice to
Proceed") to TRITEL indicating that construction is ready to commence. TRITEL by
accepting, executing and returning to CROWN the Notice to Proceed shall evidence
its interest in executing a SLA for the particular Site. CROWN will also provide
a Close-Out Package that represents the development of the Site and site
acquisition associated with completing the Site for TRITEL's use. The Close-Out
Package shall be due to TRITEL upon TRITEL's activation of its antennas at the
Site in TRITEL's regular course of business (not upon testing). The following is
a summary of documents to be delivered by CROWN to TRITEL in the Close-Out
Package:
o A copy of the Search Proposal relating to the Site.
o Description of potential sites identified by CROWN in each search
area.
o Summaries of any title work acquired or an underlying lease, deed
or contract that govern TRITEL's or CROWN's use of the Site and
copies of any and all documents, instruments or agreements which
were executed and if recorded being stamped or
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otherwise evidencing that same was filed in the land records of
the appropriate jurisdiction and that any other action was taken
which was necessary to remove the title exception from the Site
o Instruments showing the due authorization of the Prime Lease by
the Prime Lessor
o In the event that the Prime Lessor is not an individual, copies of
the bylaws, corporate charter, partnership agreement, certificate
of partnership, articles of organization, membership agreement,
trust agreement or similar documents, whichever may be applicable,
and a certificate of existence from the state of formation of the
Prime Lessor dated within thirty (30) days of the date of the
Prime Lease
o NEPA Checklist showing no action items under NEPA requirements
o "Phase I" Environmental Assessment performed at the Site
o Copies of all FAA approvals for the Site
o News articles concerning development of the Site, if found or
known by CROWN.
o A copy of an original document that grants to CROWN an interest in
the Site at the property and, if applicable, a memorandum of said
document, either such document or memorandum being stamped or
otherwise evidencing that same was filed in the land records of
the appropriate jurisdiction and that any other action was taken
which was necessary to perfect CROWN's interest in the Site.
o A copy of an original document that grants to CROWN an interest in
any and all Easements to the real property at the Site, stamped or
otherwise evidencing that same was filed in the land records of
the appropriate jurisdiction and that any other action was taken
which was necessary to perfect CROWN's interest in the Easements.
o A copy of a memorandum of Site License stamped or otherwise
evidencing that same was filed in the land records of the
appropriate jurisdiction and that any other action was taken which
was necessary to perfect TRITEL's interest in the Site.
o Materials, studies, correspondence (including e-mail), analyses,
drawings, and specifications used as evidence to support permits
granted for the Site or created for TRITEL by third parties.
o A copy of the executed SLA authorizing TRITEL to use the Site and
any landlord consents and/or estoppel certificates, if applicable.
o Survey of the Site
o Plans and specifications for the Tower and TRITEL's Equipment to
be located upon the Site
I.J. AGREEMENT NOT EXCLUSIVE.
CROWN acknowledges and agrees that the right to perform site
development services and build-to-suit and construction services under this
Agreement is not an exclusive right and that TRITEL may grant similar rights to
other parties and such grants and agreements shall not be a violation of or
default under this Agreement. However, the parties acknowledge that once the
Notice of Tower Site is issued by TRITEL to CROWN, then that particular search
ring area shall become exclusive to CROWN until CROWN rejects such Site,
defaults under the term of
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this Agreement or TRITEL or CROWN is otherwise entitled to reject such SLA under
the terms of this Agreement.
II. MASTER LICENSE AGREEMENT
II.A. SITE LICENSE.
II.A.1 Each location for which TRITEL issues a Preliminary Site
Acceptance or an Assignment of Lease, CROWN shall prepare, and the parties will
execute, a Site License Acknowledgment ("SLA" or "Site License") in the form
attached hereto as Exhibit "D" describing the specific location, description and
size of that portion of the Site designated for TRITEL's use. Such execution
shall occur within fifteen (15) days of submission of all of the Pre-Development
Information and all zoning and other Governmental Approvals to TRITEL by CROWN,
but in any event not before all time periods have elapsed for TRITEL and/or
CROWN to review and/or object to any and all Pre-Development Information,
Governmental Approvals and/or the Plans and Specifications. Upon such execution,
CROWN shall, and hereby does license to TRITEL, and agree to allow TRITEL to
use, the Site upon the terms and conditions of this Agreement and the SLA. The
terms of this Agreement shall be incorporated in each Site License as if stated
therein. The use of the Site authorized to TRITEL in each Site-specific SLA is
referred to herein as the "TRITEL Premises." The term "TRITEL Premises" shall
also include and mean TRITEL's space upon the Tower, TRITEL's ground space at
the Site for the location of a cabinet or shelter (the "Ground Space"), all
cables, wires, conduit, etc., connecting to and from TRITEL's Equipment upon the
Tower and to and from TRITEL's Equipment upon the Ground Space, and the
non-exclusive right of TRITEL to use any and all Easements. The terms and
conditions of this Agreement shall become a part of and incorporated into each
SLA and the use of the TRITEL Premises shall be subject to this Agreement except
with regard to information that is Site-specific. The terms and conditions of
the SLA shall become effective and be part of this Agreement upon its execution
by both CROWN and TRITEL. The parties acknowledge and agree that,
notwithstanding any other language in this Agreement to the contrary, TRITEL's
use of a Site pursuant to this Agreement does not constitute or convey an
interest in real estate to TRITEL, nor does it convey an interest in
improvements at the Site, or of appurtenant property rights of CROWN. The
relationship between CROWN and TRITEL is not one of tenancy and no interest in
real estate has been or will be created. This Master License and each SLA is a
license for a period of years and this Master License and each SLA shall not be
terminable at will and may only be terminated upon the terms and conditions
under this Master License or the applicable SLA.
II.A.2.i CROWN covenants that it shall not commit any act which would
result in a default, non-renewal or nonconformance of the Prime Lease. The SLA
shall be subject to the continued existence and enforceability of the Prime
Lease, provided, however, any termination or expiration of the Prime Lease which
occurs as a result of any default, non-renewal or non-conformance by CROWN under
the terms of the Prime Lease, shall be construed as an event of default under
the terms of the SLA.
II.A.2.ii In the event that the Prime Lease requires the Prime Lessor
to consent to the making of the applicable SLA, it shall be a condition
precedent to the effectiveness of the SLA that CROWN obtains such consent. The
form and content of such consent shall be subject to TRITEL's approval, not to
be unreasonably withheld, delayed or conditioned.
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II.A.2.iii In the event that the Prime Lease expires or terminates
(provided, however, that this provision does not waive any requirement for CROWN
to maintain the Prime Lease in full force and effect) and CROWN is unable to
relocate the Tower Facilities to another location suitable for TRITEL's use,
such relocation to be at CROWN's sole expense, then CROWN shall grant to TRITEL
the option to purchase the Tower Facilities (and any accessories, accessions,
attachments, fixtures or other equipment in connection therewith, etc.,
including without limitation storage buildings and fences) for the fair market
value of the Tower Facilities (and such accessories, accessions, attachments,
fixtures, equipment, etc.) and enter into negotiations with the Prime Lessor for
continued operation at the Site. Such purchase price shall be no less then the
current market value of the Tower Facilities.
II.A.2.iv CROWN agrees to exercise its best efforts to obtain and
deliver a non-disturbance and attornment agreement and estoppel certificate (the
"Estoppel Certificate") with the Prime Lessor, in the form of the estoppel
certificate attached hereto as Exhibit "G", the terms and conditions of such
Estoppel Certificate shall be reasonably acceptable to TRITEL, which Estoppel
Certificate shall provide for TRITEL's continued possession of the TRITEL
Premises under the applicable SLA in the event that the Prime Lease is
terminated. This provision shall not imply that TRITEL consents to the
expiration or termination of the Prime Lease by CROWN or waives any event of
default such expiration or termination may create.
II.B. USE.
This Agreement authorizes the installation, operation and maintenance of
unmanned radio communications, wireless or telecommunications equipment
consistent with the terms of this Agreement, the applicable SLA, including but
not limited to Exhibit 5 thereto, and any rules or regulations applicable to the
designated TRITEL Premises. TRITEL's use of any Site is limited by this
Agreement to the use of: (a) the space upon the Tower Facilities; (b) the Ground
Space; (c) the conduit, cable, wiring, etc. to and from the Tower Facilities and
to and from the Ground Space; and, (d) the Easements. TRITEL shall not install
any other equipment upon the TRITEL Premises, except the equipment described in
the SLA, without the prior written consent of CROWN, which consent shall not be
unreasonably withheld, delayed or conditioned. It is understood that TRITEL
shall have the right at each and every Site, subject to compliance with the
terms of this Agreement, to replace the equipment described in a SLA with
similar and comparable equipment so long as: (a) there is no greater wind
loading, structural loading, size, weight or height; and, (b) the equipment
operates at the frequency or range of frequencies designated in the applicable
SLA, or at the frequency or range of frequencies identified in TRITEL's current
FCC licenses or successor licenses thereto, for the transmission of wireless
communications signals at that given Site. It is understood that any such
replacement equipment must be frequency compatible with then existing uses of
the Site and that any change in frequency shall not interfere with the then
existing equipment upon the Site. (The equipment located upon the Tower
Facilities as described in the SLA is referred to herein as the "Tower
Attachments"). TRITEL must, at TRITEL's sole expense, comply with all laws,
orders, ordinances, regulations and directives of applicable federal, state,
county and municipal authorities or regulatory agencies including, without
limitation, the FCC and the FAA at all Sites. CROWN agrees to cooperate with
TRITEL, at TRITEL's expense, in executing such documents or applications
required in order for TRITEL to obtain such licenses, permits or other
governmental approval needed for TRITEL's permitted use of the Site.
Notwithstanding the foregoing, CROWN shall obtain municipal permits necessary
for the construction of
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communications facilities at a Site in accordance with the terms of this
Agreement. TRITEL will maintain its equipment at each Site in a reasonable
condition, in compliance with FCC and FAA regulations.
II.C. TERM.
Each SLA pertaining to a Crown Site shall be in effect for an initial term of
sixty-four months from the Commencement Date. The term of each particular SLA
shall automatically be extended for up to four (4) additional five (5) year
terms unless TRITEL terminates a SLA at the end of the then-current term by
giving CROWN written notice of the intent to terminate at least six (6) months
prior to the end of the then-current term. Notwithstanding the foregoing, if
Crown should own or control the Site pursuant to an agreement with a third party
("Prime Lease") that expires or is terminated by its terms before the expiration
or termination of an SLA or other authorization provided to TRITEL under this
Agreement, then TRITEL's right to use the Site shall expire one day prior to the
Prime Lease termination date, provided, however, any termination, non-renewal or
expiration of the Prime Lease which occurs as a result of any default,
non-renewal or non-conformance by CROWN under the terms of the Prime Lease shall
constitute an event of default under the terms of the SLA pursuant to Section
II.A.2.i. Any Prime Lease shall be attached to the applicable SLA as Exhibit 4
thereof.
II.D. FEES.
II.D.1 COMMENCEMENT OF MONTHLY FEES.
For each Site, TRITEL shall pay a monthly fee in advance, beginning on the date
defined and described in Exhibit "C", and continuing every calendar month
thereafter for the term of the SLA as may be extended. The Commencement Date for
each SLA shall be as defined in Exhibit "C" to this Agreement (the "Commencement
Date").
II.D.2 PAYMENT OF FEES.
Payments shall be made to CROWN when due, or to such other person or entity as
CROWN may from time to time designate in writing at least thirty (30) days in
advance of the due date of any fee payment. TRITEL shall exercise its best
efforts to mark each payment with the SLA Site Identification Number.
II.D.3 AMOUNT OF MONTHLY FEES, ESCALATIONS.
The monthly fee for each SLA beginning on the Commencement Date shall be as
defined in Exhibit "C".
II.E. TAXES AND ASSESSMENTS.
TRITEL shall pay any increase in taxes or other assessment which are directly
attributed to the placement of TRITEL's Equipment upon the TRITEL Premises,
including, but not limited to, real estate taxes, levied subsequent to the
Commencement Date against the Site as a result of the placement of TRITEL's
Equipment upon the Site. CROWN will provide reasonable documentation of real
estate taxes or assessments attributable to the improvements, or portions
thereof, that are constructed or installed by or on behalf of TRITEL.
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II.F. INTEREST.
Any fee, whether a monthly fee or an additional fee, that is not paid within ten
(10) days of receipt of written notice by TRITEL from CROWN of a failure to pay,
may, at CROWN's option, bear interest until paid at the lesser of the rate of
[CONFIDENTIAL TREATMENT REQUESTED] per annum or the maximum rate allowed under
the laws of the jurisdiction in which the Site is located. If CROWN has sent
more than three notices to TRITEL in any calendar year, then subsequent payments
in that calendar year which are late will be deemed late and CROWN may claim
TRITEL to be in default of this Agreement.
II.G. ACCESS.
Unless otherwise restricted in accordance with any terms or conditions of the
Prime Lease, TRITEL shall have free access during the term of a SLA to a Site
twenty-four (24) hours per day, seven (7) days per week. TRITEL acknowledges
that the privilege of access is not a Site right and is subject to any
restrictions in this Agreement and in reasonable rules and regulation related
hereto. TRITEL's access to any Site and the TRITEL Premises will be subject to
compliance with all applicable Federal, State or Local safety regulations. Only
authorized engineers, employees, agents or properly authorized contractors of
TRITEL or persons under their direct supervision ("TRITEL Personnel") will be
permitted to enter a Site. In the event of TRITEL Personnel who are performing
services or work upon a Site, such TRITEL Personnel shall have in place
insurance that is in form and substance reasonably satisfactory to CROWN as
provided herein. CROWN will retain ownership of all buildings, fixtures and
appurtenances that CROWN installs at any Site, except for TRITEL's Equipment.
TRITEL covenants that the removal of any of TRITEL's Equipment performed by
TRITEL Personnel and not performed by CROWN will not adversely affect the
integrity of any structures, or the condition of the access route, or violate
any obligations of CROWN under terms or conditions applicable to the Site,
including the SLA.
II.H. IMPROVEMENTS TO TRITEL PREMISES.
II.H.1 TRITEL has the right, at TRITEL's sole cost and expense, to
erect, maintain, and operate at the Site only that communications equipment
specified in the SLA. TRITEL shall require the permission of CROWN at each Site
to replace its equipment described in a SLA, which permission shall not be
unreasonably withheld, delayed or conditioned. Replacement modifications shall
be made by TRITEL: (a) within the TRITEL Premises, (b) to cause no greater wind
loading, structural loading, size, weight or height than TRITEL's installation
as approved in the SLA, and (c) so that the equipment operates as authorized
under TRITEL's then-current FCC Licenses and (d) so that the equipment does not
create material interference with any then existing users of the Tower which
users have a contractual agreement with CROWN for the use of the Tower and the
Site. Prior to commencing any installation or alteration of equipment or
improvements at a Site (other than the initial installation authorized under the
SLA), TRITEL must obtain CROWN's approval of TRITEL's plans for the work and
CROWN's approval of the identity and insurance of any contractor that designs or
performs an installation or alteration, or accesses the Site, such approval not
to be unreasonably withheld, delayed or conditioned.
II.I. CROWN'S RIGHT TO CURE DAMAGE.
In the event any construction, maintenance, replacement or operation performed
by TRITEL or its designee (which is not performed by CROWN or its designee)
materially damages CROWN's
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equipment, or any other third-party's equipment, at the Site, CROWN may make the
repairs and the reasonable costs thereof shall be payable to CROWN by TRITEL
within thirty (30) days of written notice thereof.
II.J. TRITEL LIENS.
TRITEL must keep the Site free from any liens arising from any work performed,
materials furnished or obligations incurred by or at the request of TRITEL. If
any lien is filed against CROWN'S ownership interest in a Site as a result of
the acts or omissions of TRITEL's employees, agents or contractors, TRITEL must
discharge or provide a bond or letter of credit for the lien within thirty (30)
days after TRITEL receives written notice from CROWN, that CROWN requests that
the lien be discharged or provide satisfactory evidence to CROWN that it is
contesting the lien in good faith. If TRITEL fails to discharge any lien within
such period, then, in addition to any other right or remedy of CROWN, CROWN may,
at it's election, discharge the lien by paying the amount claimed to be due, or
by obtaining the discharge by deposit with a court or a title company, or by
posting adequate bond. TRITEL must pay on demand any reasonable amount paid by
CROWN for the discharge or satisfaction of any lien, and all reasonable
attorneys' fees and other reasonable legal expenses of CROWN incurred in
defending any such action or in obtaining the discharge of such lien, together
with all necessary and reasonable disbursements in connection therewith.
II.K. CROWN LIENS.
CROWN shall keep the Tower Facilities free of all involuntary liens and claims,
including without limitation, liens and claims: (a) arising out of or related to
the performance of the construction, all liens and claims of any contractor,
subcontractor, laborer, mechanic or materialman for labor performed or material
furnished in connection with the performance of the construction; (b) liens or
claims arising from taxes or assessments, except for liens for taxes or
assessments which are not yet due and payable; or, (c) liens or claims which may
impair TRITEL's interest. Notwithstanding the foregoing, CROWN may encumber the
Tower Facilities with a lien or mortgage as surety for construction or permanent
financing.
II.L. INTERFERENCE.
TRITEL acknowledges that CROWN is not a licensee of the FCC for purposes of
regulatory compliance of TRITEL Equipment at the Site, and that TRITEL shall
take full responsibility for registration, notice and renewal requirements of
the FCC pertaining to TRITEL Equipment, if any, and shall not rely on CROWN to
perform any such regulatory obligations related to the TRITEL Equipment except
as expressly agreed to in this Agreement. TRITEL agrees to have installed
transmitting and receiving equipment of the type and frequency which will not
cause measurable interference as defined by the FCC to any Present User of a
communications facility at the Site whose equipment is properly tuned and
operating. A "Present User" shall be defined as a telecommunications provider
licensed by the FCC which is located on the Tower Facility at the Site and has
entered into a written contractual agreement with CROWN for the occupancy of
space upon the Tower Facility as of the Commencement Date of each SLA and is
specifically identified in the SLA. In the event that TRITEL's equipment causes
measurable interference with any Present User whose equipment is properly tuned
and operating, TRITEL shall take all steps necessary to correct and eliminate
the interference within forty-eight (48) hours of the notice of such
interference by CROWN via facsimile, or via another notice defined in this
Agreement, to TRITEL's Director of Network Engineering. CROWN agrees that any
future
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users of the Site will have installed transmitting and receiving equipment of
the type and frequency which will not cause measurable interference to TRITEL.
If any user of the Site causes measurable interference to TRITEL, CROWN shall
cure that measurable interference within forty-eight (48) hours of written
notice (which may be telecopier notice in addition to any other forms of notice
under this Agreement) from TRITEL. TRITEL will reasonably cooperate with CROWN
and any user to help eliminate Measurable Interference provided that reasonable
cooperation shall include the expenditure of time and not the expenditure of
money.
II.M. INDEMNIFICATION.
TRITEL shall defend, indemnify and hold CROWN and all subsidiary companies and
affiliates, harmless against any claim of liability or loss from bodily injury
and/or property damage resulting from or arising out of TRITEL's use of or
access to any Site, including but not limited to any claim of liability or loss
associated with any Environmental Hazards as defined in this Agreement, by
TRITEL, its subcontractors, servants or agents, excepting, however, to the
extent such claims or damages may be caused by the gross negligence or willful
misconduct of CROWN, its subcontractors, contractors, employees, officers,
directors, representatives or agents. If CROWN is made a party to or threatened
with any claim or litigation commenced against third parties by TRITEL or
brought by third parties against TRITEL, then TRITEL shall protect and hold
CROWN harmless and pay all costs, penalties, charges, damages, expenses and
reasonable attorneys' fees incurred or paid by CROWN in connection therewith.
TRITEL furthermore agrees to hold harmless CROWN from any claims of TRITEL, it
agents, assigns, subsidiaries or affiliates, arising out of the acts or
omissions of TRITEL's invitees at any Site. With regard to said defense and
indemnification, CROWN may choose, upon sixty (60) days written notice to
TRITEL, to maintain separate legal counsel for its defense at TRITEL's cost
(which cost shall be reasonable) in lieu of representation by TRITEL.
CROWN shall indemnify and hold TRITEL and all subsidiary companies and
affiliates harmless against any claim of liability or loss from bodily injury
and/or property damage resulting from or arising out of CROWN's interest in,
use, management or licensing or leasing of the Site, including but not limited
to any claim of liability or loss associated with any Environmental Hazards as
defined in this Agreement, excepting, however, except to the extent such claims
or damages may be due to or caused by the gross negligence or willful misconduct
of TRITEL, or its subcontractors, servants or agents. If TRITEL is made a party
to or threatened with any claim or litigation commenced by or against CROWN for
any of the above reasons, then CROWN shall protect and hold TRITEL harmless and
pay all costs, penalties, charges, damages, expenses and reasonable attorneys'
fees incurred or paid by TRITEL in connection therewith. CROWN furthermore
agrees to indemnify, defend and hold harmless TRITEL as a result of construction
or operation by CROWN's invitees if CROWN fails to enforce its agreements with
such invitee or otherwise pursue its rights or fails to impose upon and enforce
standard industry practices with respect to such invitees. With regard to said
defense and indemnification, TRITEL may choose upon sixty (60) days written
notice to CROWN, to maintain separate legal counsel for its defense at CROWN's
cost (which cost s hall be reasonable) in lieu of representation by CROWN.
II.N. INSURANCE.
CROWN and TRITEL shall each maintain at their expense throughout the
term of this Agreement, "All Risk" property insurance which insures in the case
of CROWN, the Tower
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Facilities and the Site, and in the case of TRITEL, the TRITEL Equipment, for
its full replacement cost. CROWN and TRITEL shall each maintain at their expense
throughout the term of this Agreement and each SLA, comprehensive general
liability insurance with a combined single limit of five million dollars
($5,000,000.00) for bodily injury and property damage. Coverage shall include
Independent Contractors Liability. Such coverage may be met in part by excess
coverage insurance as reasonably approved by CROWN or TRITEL as may be
applicable. At execution of this Agreement, each party shall provide to the
other a certificate of insurance evidencing the other party as an additional
insured and which shall contain a provision for thirty (30) day notice to the
other party of cancellation or material change. Each party shall also maintain
Auto Liability insurance in an amount no less than one million dollars
($1,000,000.00) combined single limit for bodily injury and/or property damage.
Each party must also maintain statutory Workers' Compensation Insurance and
Employee's Liability for the statutory limit but in no event less than one
million dollars ($1,000,000.00). The amount of the insurance limits identified
above shall be increased on every fifth anniversary of the date of this
Agreement in accordance with then existing industry standards.
All insurers must be licensed to do business in the jurisdiction where
the respective Sites are located. The provision of insurance required in this
Agreement shall not be construed to limit or otherwise affect the liability of
the parties to each other hereunder.
Except as restricted by applicable workers' compensation laws, the
parties hereby waive any and all rights of action for negligence against the
other which may hereafter arise on account of damages to the TRITEL Premises or
Site resulting from any fire, or other casualty of the kind covered by standard
fire and casualty insurance policies, regardless of whether or not, or in what
amounts, such insurance is now or hereafter carried by the parties, or either of
them provided that such releases shall be effective only if and to the extent
that the same do not diminish or adversely affect the coverage under such
insurance policies. TRITEL and CROWN shall each obtain a waiver of subrogation
from their respective insurance companies in which said insurance companies also
waive their respective rights to recover.
II.O. SURRENDER OF PREMISES.
Upon termination or expiration of this Agreement or an SLA, TRITEL
shall, within forty-five (45) business days remove all installations and
improvements made by TRITEL to the Site (or Sites), including but not limited to
any equipment shelter installed at the Site. TRITEL shall restore the TRITEL
Premises to its original condition, reasonable wear and tear, casualties and
permanent fixtures such as pads and utilities excepted, within forty-five (45)
days of expiration or termination of the SLA or Agreement. If such time for
removal causes TRITEL to remain on the Site after termination of this Agreement
or the applicable SLA through no fault of or cause by TRITEL, the monthly fee
shall be increased to one and one-half times the then-existing fee until such
time as the removal of all equipment is completed. Nothing in this provision
shall be construed as providing TRITEL the right to hold over.
II.P. COVENANTS AND WARRANTIES.
II.P.1 CROWN. CROWN warrants, with respect to each particular SLA that:
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a: CROWN holds good and marketable title to its interest in the Site,
the Easements, and the Tower Facilities including, but not limited to, an
interest in the land on which the Site is located, has a right of access
thereto, and has the authority to issues a valid SLA to TRITEL;
b: CROWN will not permit or suffer the installation and existence of
any other improvement upon a Site if such improvement materially interferes with
the transmission or reception by TRITEL's authorized communications equipment
from a TRITEL Premises;
c: With regard to Sites at which Tower Facilities have been built by
CROWN, a Phase I environmental survey has been completed at the Site, which
survey shall be provided to TRITEL and, based on the representations therein,
CROWN has no knowledge of any Environmental Hazards as defined herein or the
violation of any Environmental Laws and CROWN has received no other information
or notice which would indicate the presence of Environmental Hazards upon CROWN
Site or the violation of any Environmental Laws in connection with CROWN Site;
and,
d: CROWN will keep, at CROWN's expense, the Tower Facilities and Site
for which TRITEL has executed an SLA in good repair and in as good a condition
as such Site is required to be maintained by the Prime Lease and as required by
law and applicable federal, state and local (and any other applicable) laws,
rules, orders, codes and regulations, and said Tower Facility shall comply with
rules and regulations enforced by the FCC and FAA with regard to the lighting,
marking and painting.
II.P.2 TRITEL. TRITEL warrants, with respect to each particular SLA
that:
a: TRITEL will maintain the antennas, transmission lines and other
appurtenances in proper operating condition and maintain same as to appearance
and safety common to the industry; and,
b: All installations and operations by TRITEL in connection with this
Agreement shall meet with all applicable rules and regulations of the FCC and
all applicable state and local codes and regulations. CROWN specifically assumes
no responsibility for the licensing, operation and/or maintenance of TRITEL's
radio equipment, except to the extent that CROWN installs or repairs such radio
equipment upon the Tower Facilities.
II.Q. CASUALTY.
If there is a casualty to a structure on any Site on which TRITEL Equipment is
located, CROWN must within ninety (90) days of said casualty repair or restore
the structure. Upon completion of such repair or restoration, TRITEL is entitled
to reinstall TRITEL's communications equipment. The fees identified in this
Agreement shall be reduced to one half during the period such Tower Facility is
damaged and is being repaired and/or restored. In the event such repairs or
restoration will reasonably require more than ninety (90) days to complete,
TRITEL is entitled to terminate the applicable SLA upon thirty (30) days prior
written notice to CROWN. TRITEL shall be entitled to place and install a
temporary communications facility upon CROWN Site during the period of such
damage, repair and restoration. The location of the temporary facility shall be
approved by CROWN so as to not interfere with the reconstruction of the
replacement structure.
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II.R. CONDEMNATION.
If there is a condemnation of a Site, including without limitation a transfer of
the Site by consensual deed in lieu of condemnation, then the SLA for the
condemned Site will terminate upon the earlier of the date that a transfer of
title to the condemning authority occurs or, in the event that TRITEL's
Equipment must be removed prior to that date, the date that TRITEL's Equipment
is removed from the Site, without further liability to either party under this
Agreement or the SLA. TRITEL is entitled to pursue a separate condemnation award
for TRITEL's communications equipment and its interest in the Site from the
condemning authority.
II.S. ENVIRONMENTAL MATTERS.
CROWN represents and warrants that CROWN will obtain a Phase I review
of each Crown Site. Based on said Phase I Review, and no other examination or
study of any Site by CROWN, CROWN represents and warrants that it has no
knowledge of an Environmental Hazard at CROWN Site or violation of any
Environmental Law at CROWN Site, except as stated in the Phase I and that CROWN
has received no other information or notice which would indicate the presence of
Environmental Hazards upon CROWN Site or the violation of any Environmental Laws
in connection with CROWN Site. TRITEL shall not be required to remediate any
Environmental Hazards located at any Site unless TRITEL or TRITEL's officers,
employee, agents or contractors placed or caused the Environmental Hazards on
the Site. Neither CROWN nor TRITEL will bring to, transport across or dispose of
any Environmental Hazards on any Site. TRITEL's use or disposal of any hazardous
substances constituting Environmental Hazards must comply with all applicable
laws, ordinances and regulations governing such use.
The term "Environmental Hazards" means hazardous substances, hazardous wastes,
pollutants, asbestos, polychlorinated biphenyl (PCB), petroleum or other fuels
(including crude oil or any fraction or derivative thereof) and underground
storage tanks or any other substance identified as hazardous in any federal,
state or local or municipal law, rule, order or regulation (excluding radio
frequency or wireless emissions contemplated under this Agreement or emissions
related thereto). The term "Environmental La shall mean any law, regulation,
rule, order or code enacted by any federal, state, municipal or local
governmental entity regarding or relating to Environmental Hazards (excluding
radio frequency or wireless emissions contemplated under this Agreement or
emissions related thereto). This Section shall survive termination of the
Agreement and any particular SLA.
II.T. UTILITIES.
TRITEL will be responsible for subscribing to utility services and
timely payment for all utility services, including taxes or assessments thereon,
provided to TRITEL at CROWN Site. To the extent possible in fact and by law,
CROWN will separately submeter electrical service at each CROWN Site, as
described in Section 3 of Exhibit "F" of the Agreement. TRITEL shall pay for the
cost of all equipment reasonably required to energize its equipment at a Site.
Should CROWN and TRITEL, in their reasonable discretion, provide electrical or
telephone service to TRITEL at a Site, CROWN shall notify TRITEL of its pro-rata
share of the cost of said service, and the cost shall be treated as additional
rent under this Agreement at no additional expense to TRITEL. Should TRITEL not
timely remit the charges for said service to CROWN, a late payment penalty equal
to that as charged by the applicable utility company against the account of
CROWN for such delinquency shall be charged to TRITEL. Any emergency electrical
supply provided by CROWN to TRITEL shall be by separate agreement of the
parties. CROWN shall
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have no obligation to TRITEL for the condition of, or maintenance to, utility
poles, lines or conduits, except with regard to CROWN's installation of same.
II.U.ACCESS.
CROWN shall maintain the Easements in good repair and condition, in
such condition that the Easements are required to be maintained by the
underlying grants of the easements and in compliance with all rules, laws,
regulations and orders of any governmental entity. TRITEL, its employees, and
agents, shall not damage the condition of the access road to any Site, including
but not limited to damage caused by the size, weight or type of vehicle used by
TRITEL, its employees or agents, when traversing a road, or travel across an
access road during or after weather conditions that have impaired the condition
of the road. For any damage to the road that CROWN is reasonably able to
demonstrate was caused by TRITEL, CROWN shall repair the damage and be entitled
to charge to TRITEL as additional rent the reasonable cost of said repair.
TRITEL shall be subject to all security requirements applicable to a Site and
provided to TRITEL in writing, including but not limited to those rules provided
in Exhibit H.
II.V. COMPLIANCE WITH FCC RADIO FREQUENCY RADIATION REQUIREMENTS.
II.V.1 TRITEL's Installation or Modification of Equipment at the Sites.
If TRITEL's installation or modification of equipment at ANY Site would put any
existing user of the Site into non-compliance with the FCC's exposure limits for
radio frequency radiation, then (a) in the event that such non-compliance can be
cured by limiting the general public's access to the Site, then TRITEL shall pay
all costs associated with limiting access to the Site prior to making such
installation and/or modification; or, (b) in the event such non-compliance can
be cured by modifying the equipment of existing users of the Site, and such
users consent to such modifications, TRITEL shall pay all costs associated with
making such modifications. CROWN shall require all subsequent users of the Site
to agree to a substantially similar provision as this provision.
II.V.2 Future Cooperation. In the event that future installations
and/or modifications proposed by third parties would put any user of a Site into
non-compliance with the FCC's exposure limits for radio frequency radiation and
cannot be cured by limiting access to the Site, TRITEL shall not unreasonably
withhold its consent, when requested by CROWN, to modify its equipment so long
as all costs associated with making such modifications to TRITEL's equipment are
borne by the party proposing such installation and/or modification and such
modification does not materially alter or interfere with the TRITEL Equipment or
TRITEL's wireless communications network. TRITEL further agrees that in the
event that there is any change to applicable rules, regulations and procedures
governing radio frequency radiation which put the Site into non-compliance with
the FCC's or any other governmental agency's exposure limits for radio frequency
radiation, TRITEL will cooperate with CROWN and other users of the Site to bring
the Site into compliance, which cooperation shall include but not be limited to
sharing pro rata the costs associated with bringing the Site into compliance.
Notwithstanding anything contained in II.V.1 and II.V.2, the rights of any
subsequent tenant, licensee, occupant or user shall be subordinate to the rights
of TRITEL in the event that all parties cannot reach an agreement regarding
compliance.
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II.V.3 Protection of Workers. TRITEL agrees to reduce power or suspend
operation if necessary and upon reasonable notice to prevent possible
overexposure of workers or the public to RF radiation. In the event that such
reduction or suspension causes a material reduction or impairment in service
and/or impairs in building coverage and the coverage objectives of TRITEL to the
applicable communications facility at the applicable Site for a period of ten
(10) days or more, TRITEL shall have the right to terminate the applicable SLA,
in addition to any other remedies it may have.
II.V.4 Obligations of CROWN. CROWN agrees not to permit any subsequent
installation and/or modification on or to the Site if such installation and/or
modification would put any user of the Site into non-compliance with the FCC's
exposure limits for radio frequency radiation. CROWN further agrees to limit
access to the general public in areas where the FCC's exposure limits are
exceeded and agrees to post appropriate signs warning the general population of
such limited access.
II.V.5 Mutual Certifications. CROWN and TRITEL each certifies to the
other that (a) it has adopted (or is in the process of adopting) a safety plan
for its employees and subcontractors working in the vicinity of each Site to
ensure that no such person is exposed to RF emissions in excess of the limits
specified by the FCC; (b) it has distributed (or will distribute) the safety
plans to its employees and subcontractors who have the potential to be exposed
to RF emissions in excess of FCC prescribed limits; and, (c) its employees and
subcontractors have been directed to comply with the safety plans of TRITEL and
CROWN.
III. CONSTRUCTION OF TOWER FACILITIES
III.A. COVENANT TO CONSTRUCT. Construction of the Tower Facilities
shall be the responsibility and obligation of CROWN. CROWN shall be responsible
for the costs and construction of the Tower Facilities. CROWN shall construct
the Tower Facilities in accordance with and substantial compliance with the
Plans and Specifications and all rules, regulations, laws, and orders of any
governing body, local, state or federal. CROWN shall obtain all necessary
permits and approval of the Plans and Specifications from all applicable
governmental agencies.
III.B. APPROVAL OF PLANS AND SPECIFICATIONS.
III.B.1 In the event that TRITEL has obtained plans for the
construction of ("Plans") and specifications for the construction of (the
"Specifications") the Tower Facilities, TRITEL shall deliver to CROWN the Plans
and Specifications for the Tower Facilities within ten (10) days of the complete
execution of the Assignment. In the event that CROWN does not approve the Plans
and Specifications or modifies the Plans and Specifications, CROWN shall deliver
detailed written objections to the Plans and Specifications within five (5) days
of the receipt of the Plans and Specifications or CROWN shall prepare and
deliver to TRITEL for approval by TRITEL three copies of any modifications to
the Plans and Specifications. Any modifications to the Plans and Specifications
for each Tower Facility shall be delivered to TRITEL within fifteen (15) days of
the delivery of the Plans and Specifications to CROWN. If no objection or
modified Plans and Specifications are delivered to TRITEL within the above-
referenced time periods, the Plans and Specifications shall be deemed approved.
Within ten (10) days after receipt of the modified Plans and Specifications,
TRITEL shall approve such modified Plans and Specification
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or deliver to CROWN detailed written objections thereto. If TRITEL fails to
either affirmatively approve or disapprove the modifications to the Plans and
Specifications proposed by CROWN within the ten (10) day period, TRITEL shall be
deemed to have effectively approved the Plans and Specifications.
III.B.2 In the event that TRITEL has not obtained Plans and
Specifications for the Tower Facility, CROWN shall have Plans and Specifications
for the Tower Facility prepared, designed and delivered to TRITEL within the
time frames described in Exhibit "C", or in the event there is no Assignment,
then also within the time frames described in Exhibit "C". Within ten (10) days
of receipt of the Plans and Specifications, TRITEL shall approve the Plans and
Specifications or deliver to CROWN detailed objections thereto. If TRITEL does
not affirmatively approve or disapprove the Plans and Specifications within such
ten (10) day period, TRITEL shall be deemed to have approved the Plans and
Specifications.
III.B.3 Notwithstanding the foregoing, in the event that any federal,
state or local governmental body, requires CROWN or TRITEL to modify the Plans
and Specifications to obtain a Governmental Approval, TRITEL or CROWN may modify
the Plans and Specifications provided that the other party approves such
modification, such approval not to be unreasonably withheld, delayed or
conditioned.
III.C. COMMENCEMENT OF CONSTRUCTION.
III.C.1 CROWN shall commence construction of the Tower Facility within
those dates in accordance with Exhibit "C". CROWN shall complete the
construction of each individual Tower Facility within those dates also indicated
in Exhibit "C". CROWN shall have no obligation to commence construction of the
Tower Facilities unless and until a SLA has been executed by TRITEL for that
Tower Site. The commencement of construction and the completion of construction
of each Tower Facility shall be subject to delays from substantial labor
disputes, fire, unusual delay in deliveries not caused by or contributed to by
CROWN or its contractors, abnormal adverse weather conditions not reasonably
anticipated, or government actions or inactions not caused or contributed to by
CROWN, or other unavoidable casualties or similar causes beyond reasonable
control of CROWN or CROWN's contractor or for time needed to perform additional
construction covered by any change order requested by TRITEL. Notwithstanding
the foregoing, TRITEL and CROWN may negotiate and agree upon a different
schedule for the completion of the Tower Facilities in each TRITEL Market.
III.D. SELECTION OF CONTRACTOR.
Prior to the commencement of construction of a Tower Facility under
this Agreement, CROWN shall provide TRITEL with the names of the contractors it
proposes to use for the construction of the Tower Facility. TRITEL may, in its
reasonable discretion and within five (5) days of receipt of this information,
object to the use of a specific contractor on a Tower Facility.
III.E. MANNER OF CONSTRUCTION.
III.E.1 CROWN represents, warrants and agrees that the Tower Facilities
shall be constructed in a good and workmanlike manner and in accordance with the
Plans and Specifications and all applicable federal, state and local laws,
ordinances, rules and regulations and shall be of good quality, free from faults
and patent defects. CROWN warrants to TRITEL
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that all materials furnished in connection with the construction of the Tower
Facilities will be new unless otherwise specified, and of good quality, and that
such construction will be of good quality in accordance with industry standards,
free from faults and patent defects.
III.E.2 CROWN shall supervise and direct the work on the Tower
Facilities (the "Work"), using CROWN's best skill and attention. CROWN shall be
solely responsible for and have control over construction means, methods,
techniques, sequences and procedures and for coordinating all portions of the
Work on the Tower Facilities under this Agreement.
III.E.3 Unless otherwise provided in this Agreement, CROWN shall
provide and pay for labor, materials (again, as except as otherwise provided in
this Agreement), equipment, tools, construction equipment and machinery, water,
heat, utilities, transportation, and other facilities and services necessary for
the proper execution and completion of the Work, whether temporary or permanent
and whether or not incorporated or to be incorporated in the Work.
III.E.4 CROWN shall enforce strict discipline and good order among the
employees and other persons carrying out this Agreement. CROWN shall not permit
employment of unfit persons or persons not skilled in tasks assigned to them.
III.E.5 Except as otherwise provided for in this Agreement, CROWN shall
pay sales, consumer, use, and other similar taxes regarding the Tower
Facilities, the construction and leasing thereof, and shall secure and pay for
any permits and governmental fees, licenses and inspections necessary for proper
execution and completion of the Work.
III.E.6 CROWN shall keep the Tower Facilities and surrounding area free
from accumulation of waste materials or rubbish caused by operations under this
Agreement. At completion of the work CROWN shall remove from and about the Tower
Facilities waste materials, rubbish, tools, construction equipment, machinery
and surplus materials.
III.E.7 CROWN shall provide TRITEL (and its employees, agents and
contractors) access to the Work in preparation and progress wherever located,
provided that such access shall not interfere with the Work.
III.E.8 CROWN shall pay all royalties and license fees; shall defend
suits or claims for infringement of patent rights and shall hold TRITEL harmless
from loss on account thereof, but shall not be responsible for such defense or
loss when a particular design, process or product of a particular manufacturer
or manufacturers is required by TRITEL unless CROWN has reason to believe that
there is an infringement of patent.
III.E.9 Except for supervision of TRITEL personnel, CROWN shall be
responsible for initiating, maintaining and supervising all safety precautions
and programs in connection with the performance of the Agreement.
Again, except for supervision of TRITEL personnel, CROWN shall take
reasonable precautions for safety of, and shall provide reasonable protection to
prevent damage, injury or loss to:
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III.E.9.a. CROWN's employees and contractors on the Work, the Tower
Facilities or the Site and other persons who may be affected thereby;
III.E.9.b. the Work, the Tower Facilities, the Site and materials and
equipment to be incorporated therein; and
III.E.9.c. other property at the Site or adjacent thereto.
III.F. NO LIENS.
CROWN shall keep the Tower Facilities free of all involuntary liens and
claims, including without limitation, liens and claims (1) arising out of or
related to the performance of the construction, all liens and claims of any
contractor, subcontractor, laborer, mechanic or materialman for labor performed
or material furnished in connection with the performance of the construction;
(2) liens or claims arising from taxes or assessments, except for liens for
taxes or assessments which are not yet due and payable; or (3) liens or claims
which may impair TRITEL's interest. Notwithstanding the foregoing, CROWN may
encumber the Tower Facilities with a lien or mortgage as surety for construction
or permanent financing, provided that such lender enters into a reasonably
satisfactory non-disturbance agreement with TRITEL, such form agreement being
attached hereto as Exhibit "D".
III.G. NOTIFICATION OF COMPLETION.
CROWN shall notify TRITEL of the date when the Tower Facilities and the
installation of the TRITEL Equipment have been substantially completed by
delivery of a notice in substantially the same form attached hereto as Exhibit
"E" ("Notice of Completion"). Within fifteen (15) days after the Notice of
Completion, TRITEL may inspect the Site, the Tower Facilities and the TRITEL
Equipment and conduct any testing it deems reasonably necessary, including
without limitation sweep tests and ground tests or review of sweep tests and
ground tests performed by CROWN, and TRITEL shall deliver to CROWN a Punch List.
The Tower Facilities (but not the installation of the TRITEL Equipment) shall be
deemed accepted by TRITEL if a Punch List is not received by CROWN within
fifteen (15) days of the date of Notice of Completion. In the event that TRITEL
submits a Punch List to CROWN, CROWN shall commence curing such defects within
fifteen (15) days of receipt of that Punch List and diligently pursue completing
such curing until satisfactory to TRITEL. TRITEL shall not be deemed to have
accepted the Tower Facilities or the TRITEL Equipment as complete until
completion of all items on the Punch List, such acceptance being established by
TRITEL providing to CROWN a "Final Site Acceptance Letter" indicating TRITEL's
satisfaction with CROWN's work and acceptance of the Site as delivered by CROWN
to TRITEL.
III.H. CROWN shall deliver to TRITEL red-lined, record drawings (i.e.,
unstamped) of the Site, the Easements and the Tower Facilities which show, among
other things, the location of the Site, the location of the Easements (including
telephone and electricity) and the location of the Tower Facilities after they
have been constructed upon or to the Tower Site, within twenty (20) days of
TRITEL's acceptance of the Site.
IV. SITE DEVELOPMENT SERVICES
INSTALLATIONS OF ANTENNA SYSTEMS ON CROWN SITES.
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IV.A. SERVICE. The Site shall be developed by CROWN for the use of
TRITEL in accordance with the requirements for development attached as Exhibit
"F". TRITEL shall pay to CROWN for its development of any Site consistent with
the services described in Exhibit "F" a charge as defined in Exhibit "C".
IV.B. SITE PROJECT MANAGER. As stated in Exhibit "F", CROWN shall
identify a Site Project Manager for each new-construction Site. The Project
Manager shall have responsibility for coordination and supervision of all
construction activities for the Site.
IV.C. TRITEL RIGHT TO SOLICIT BIDS. Once during each year of this
Agreement, and during the first year of this Agreement within ninety (90) days
of the execution of this Agreement, TRITEL may solicit bids from other duly
licensed and qualified telecommunications contractors for the installation of
TRITEL Equipment upon the Tower. Such telecommunications contractors must meet
or exceed the financial, quality, and delivery standards which CROWN requires of
its contractors or subcontractors, must be offered a scope of service similar to
that provided to CROWN, and must have working knowledge of and be familiar with
local, industry costs associated with performing such work. In the event that
any of the three (3) bids for the same scope of work is less than CROWN's fee as
described in Exhibit "F", TRITEL may deliver a copy of the bid to CROWN, at
which time CROWN must elect to either match the bid amount or consent to the
installation of TRITEL Equipment upon the Tower Facilities by the lower bidder.
IV.D. CROWN RIGHT TO REJECT SITE DEVELOPMENT SERVICES. In the event
that CROWN elects not to perform the Site Development Services, CROWN may do so
by giving TRITEL written notice of its election not to provide Site Development
Services for the Applicable Tower Site no later than ten (10) days after the
date that CROWN has delivered all of the Pre-Development Information for the
Applicable Tower Site to TRITEL, but in any event, prior to the time that CROWN
commences construction upon the Applicable Tower Site.
IV.E. SITE AUDIT FEE. In the event that an installation or modification
to the Site is performed by a company or individual other than CROWN or its
subcontractor as a result of the foregoing bidding procedures, or otherwise
TRITEL shall pay to CROWN a site audit fee of [CONFIDENTIAL TREATMENT
REQUESTED]. The installation of any cabinet or shelter or any equipment related
to or equipment or materials to be installed in or related to a cabinet or
shelter shall not require the payment of any additional fee. All of TRITEL's
installation and alteration work which is not performed by CROWN must be
performed at TRITEL's sole cost and expense, in a good and workmanlike manner,
using the care and skill ordinarily used by members of the profession practicing
under similar conditions at the same time and in the same geographic area.
IV.F. STRUCTURAL INTEGRITY. Notwithstanding the foregoing, for any
structural alterations or modifications of the improvements on a Tower on a
CROWN Site subsequent to the initial installation of TRITEL Equipment upon the
Tower and the Site, TRITEL must engage a structural engineer approved by CROWN
on a project-by-project basis, such approval not to be unreasonably withheld,
delayed or conditioned to establish that the alteration or modification will not
impair the structural integrity of the Tower or the necessary additions and
modifications to the Tower to accommodate such alteration or modification. Site
installations and material
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alterations must not adversely affect the structural integrity of improvements
upon the Tower at the Site including any structure on or in use at the Site. No
materials may be used in the installation of the antennas or transmission lines
that will cause corrosion or rust or deterioration of the Tower structure or its
appurtenances.
V. TRITEL RIGHT TO COMPLETE CONSTRUCTION
In the event that CROWN fails to perform or observe any term, covenant,
provision or obligation to commence or complete construction in the periods
provided in sections III or IV of this Agreement and/or Exhibit "C" or "T" to
this Agreement, and any schedule, attachment or agreement related thereto which
failure is not corrected or cured by CROWN within five (5) days of receipt by
CROWN of written notice from TRITEL (by telecopier or any other notice provided
in this Agreement) of the existence of such a default, without waiving any other
right or remedy, TRITEL shall have the right to complete construction of or
cause the completion and installation of the construction of the Tower
Facilities and construction and installation of the TRITEL Equipment without
further notice to or consent of (or payment of any audit fee) to CROWN.
TRITEL shall have the right to hire or retain any contractor it shall
so choose to complete the construction and installation of the Tower Facilities
and construction and installation of the TRITEL Equipment in such event CROWN
and its employees, contractors, subcontractors, agents and representatives shall
provide TRITEL and its employees, agents, representatives, contractors and
subcontractors free, unobstructed, complete and open access to the Site and the
Easements to complete construction of the Tower Facilities, TRITEL's Equipment
and anything related thereto. In addition to any other claims, damages or
remedies which TRITEL may have, CROWN shall reimburse TRITEL for the reasonable
cost actually incurred for the construction or completion of construction of the
Tower Facility and any items related thereto.
VI. DEFAULT AND REMEDIES.
VI.A. TRITEL DEFAULTS
The occurrence of any one or more of the following events constitutes an "event
of default" by TRITEL under this Agreement:
1. If TRITEL fails with respect to any Site to pay any fee or other sums
payable by TRITEL to Crown within ten (10) business days of written
notice of failure to make such payment;
2. Breach by TRITEL of any representation, obligation, warranty or
covenant set forth in this Agreement including any SLA, with the
exception of the non-payment of any fee or other sums by TRITEL, which
is not cured within thirty (30) days of receipt of written notice
except where TRITEL commences the cure within such thirty (30) day
period and thereafter continuously and diligently pursues and completes
such cure; in which event the 30-day cure shall be extended as
reasonably necessary to permit TRITEL to complete the cure;
3. If any petition is filed by or against TRITEL under any section or
chapter of the present or any future federal Bankruptcy Code or under
any similar law or statute of the United
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States or any state thereof, and such petition is not dismissed within
sixty (60) days after the filing thereof;
4. If a receiver, custodian or trustee is appointed for TRITEL or for any
of the assets of TRITEL located at a Crown Site, and such appointment
is not vacated within sixty (60) days of the date of appointment;
5. if TRITEL makes a transfer in fraud of creditors;
6. If TRITEL's equipment causes interference as described in this
Agreement and said interference is not timely corrected by TRITEL as
provided herein;
7. If TRITEL fails to notify CROWN of any replacement or modification of
TRITEL Tower Attachments or of any Site; or
8. If TRITEL fails to abide by installation and security requirements
applicable to a Site at a Crown Site.
CROWN acknowledges and agrees that an event of default under the terms
of any SLA shall constitute an event of default under that applicable SLA, but
shall not constitute an event of default under any other SLA or this Master
License; provided however an event of default under sections VI.A.3, 4 or 5 or
an event of default under thirty-five percent (35%) of the SLAs at any time at
the option of CROWN may also constitute an event of default under this Master
License and all SLAs.
VI.B. CROWN'S REMEDIES.
If an event of default occurs, CROWN (without notice or demand except
as expressly required above) may terminate the applicable SLA, in which event
TRITEL will immediately surrender the TRITEL Premises to CROWN and all
obligations of CROWN to TRITEL under the SLA will terminate. TRITEL will be
liable to CROWN for damages equal to the total of:
1. The actual costs of recovering the TRITEL Premises and terminating the
SLA;
2. The fees earned by CROWN as of the date of termination, plus interest
thereon from the date due until paid;
3. For a breach of any SLA, the amount of any fees and other benefits that
CROWN would have received under the applicable SLA for the remainder of
the term under the applicable SLA; and for the breach of this
Agreement, escalation of all fees due or reasonably likely to be due
under the terms and conditions of the SLA including but not limited to
site acquisition fees and development fees anticipated hereby; provided
however, TRITEL does not waive any claim or right to require CROWN to
mitigate its damages under the SLA and/or this Agreement.
4. All other sums of money and damages owing by TRITEL to CROWN under the
applicable SLA.
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CROWN may elect any one or more of the foregoing remedies with respect
to the applicable SLA.
VI.C. CROWN'S DEFAULT.
The occurrence of any one or more of the following events constitute an
"Event of Default" by CROWN under this Agreement.
1. If CROWN fails with respect to any Site to pay any sums payable by
CROWN under the terms of this Agreement or any Prime Lease within ten
(10) business days of written notice of failure to make such payment;
2. Breach by CROWN of any representation, obligation, warranty or covenant
set forth in this Agreement including any SLA, with the exception of
the non-payment of any fee or other sums by CROWN which are provided
for in VI.C.1, which is not cured within thirty (30) days of receipt of
written notice except where CROWN commences the cure within such thirty
(30) day period and thereafter continuously and diligently pursues and
completes such cure; in which event the 30-day cure shall be extended
as reasonably necessary to permit CROWN to complete the cure;
3. If any petition is filed by or against CROWN under any section or
chapter of the present or any future federal Bankruptcy Code or under
any similar law or statute of the United States or any state thereof,
and such petition is not dismissed within sixty (60) days after the
filing thereof;
4. If a receiver, custodian or trustee is appointed for CROWN or for any
of the assets of CROWN located at a Crown Site, and such appointment is
not vacated within sixty (60) days of the date of appointment;
5. If CROWN makes a transfer in fraud of creditors;
6. If this Agreement or any interest herein, any SLA or any CROWN Site or
any Premises are executed upon and such execution or attachment is not
dismissed, released or removed within thirty (30) days of the execution
or attachment; or
7. If any lien is imposed upon the Tower Facilities or CROWN Site except
as may be expressly authorized by this Agreement or an attempt by CROWN
or anyone claiming through CROWN to encumber TRITEL's interest in the
Tower Facilities or CROWN Site and such lien or encumbrance is not
dismissed, released or removed within thirty (30) days of such
imposition or attempt; or
8. If any other party's equipment causes interference as described in this
Agreement and said interference is not timely corrected by CROWN as
provided herein.
TRITEL and CROWN acknowledge and agree that an event of default under
the terms of any SLA shall constitute an event of default under that applicable
SLA, but shall not constitute an event of default under any other SLA or this
Master License, provided, however, an event of default under sections VI.C.3, 4
or 5 or an event of default under thirty-five percent (35%) of the
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SLAs at any time, at the option of TRITEL, shall constitute an event of default
under this Master License and all SLAs.
VI.D. TRITEL'S REMEDIES
If an event of default occurs TRITEL without notice or demand except as
expressly required above) may, in addition to any other remedy available at law
or in equity, at TRITEL's option:
1. Terminate the applicable SLA, without waiving the right to sue for
damages; or
2. Make and claim for and/or sue for damages; or
3. Incur any expense reasonably necessary to perform the obligation of
CROWN specified in such notice and invoice CROWN for the actual and
reasonable expenses, together with interest as set forth herein from
the date named. Any invoice shall be accompanied by documentation
reasonably detailing actual expenses.
All of the remedies provided in this Agreement or in any other SLA or
at law or in equity are cumulative and TRITEL may exercise such remedies
concurrently or sequentially in such order as it may choose.
VII. GENERAL PROVISIONS
VII.A. MUTUAL REPRESENTATIONS REGARDING EXECUTION. Each party
represents and warrants to the other party:
a: It has full right, power and authority to make this Agreement and to
enter into the SLAs;
b: This Agreement and the performance thereof do not violate any laws,
ordinances, restrictive covenants, or agreements under which the party is bound;
c: Each party is qualified to do business and carries any necessary
licenses for operation required under this Agreement in any states in which the
Sites are located; and
d: All persons signing on behalf of such party were authorized to do so
by appropriate corporate action.
VII.B. NO BROKERS.
CROWN and TRITEL represent to each other that neither has had any
dealings with any real estate brokers or other brokers or agents in connection
with this Agreement.
VII.C. ENTIRE AGREEMENT.
It is agreed and understood that this Agreement, including all SLAs and
Exhibits, contain all the agreements, promises and understandings between CROWN
and TRITEL and that no verbal or oral agreements, promises or understandings
shall be binding upon either CROWN or TRITEL in any dispute, controversy or
proceeding at law, and any addition, variation or
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modification to this Agreement shall be void and ineffective unless made in
writing signed by the parties.
VII.D. GOVERNING LAW.
The laws of the state where the Site is located shall govern this
Agreement.
VII.E. ASSIGNMENT.
VII.E.1 This Agreement may not be sold, assigned or transferred, in
whole or in part, by TRITEL without prior approval or consent of CROWN, which
approval shall not be unreasonably withheld, delayed or conditioned; provided,
however, that TRITEL may assign its interest in this Agreement to any party that
is its parent company or a subsidiary, or to any successor-in-interest or entity
acquiring 51% or more of its stock. It is understood that any such assignment
shall relieve and release TRITEL of its obligation to perform this Agreement,
provided that such assignee assumes and agrees to be bound by all of the terms,
conditions, covenants and obligations of TRITEL under this Agreement. As to
other entities, this Agreement may not be sold, assigned or transferred, in
whole or in part, without the written consent of CROWN, for any purpose, which
consent may be not be unreasonably withheld, delayed or conditioned.
VII.E.2 Notwithstanding anything else contained herein, TRITEL may,
without notice or consent of CROWN, pledge, mortgage, convey by deed of trust or
security deed, assign, create a security interest in, or otherwise execute and
deliver any and all instruments for the purpose of securing bona fide
indebtedness all or any part of TRITEL's interest in this Master License, any
SLA, any TRITEL Premises, TRITEL Equipment and/or all or any portion of TRITEL's
right, title, and interest in and to any and/or all of Tower Facilities, CROWN
Site or the Easements. Promptly on TRITEL's or TRITEL's lender's request, CROWN
shall execute and deliver, and shall assist in facilitating the execution and
delivery of, all documents requested by any of TRITEL's lenders including, but
not limited to, consents to giving notice to TRITEL's lender(s) in the event of
TRITEL's default under the provision of the SLA or the Master License, and
consents to TRITEL's assignment to any lender(s) of any and all of TRITEL's
interest in or to this Agreement, any SLA, TRITEL Premises or TRITEL Equipment
provided, however, that all such documents and consents shall be in a form which
is reasonably acceptable to CROWN and which will not materially increase
TRITEL's burdens nor materially impair CROWN's rights under this Master License
or any SLA. TRITEL shall reimburse CROWN for any reasonable out-of-pocket costs
incurred by CROWN in complying with this provision including, but not limited
to, CROWN's reasonable attorneys' fees incurred in reviewing and negotiating
such documents and consents.
VII.E.3 This Agreement may not be sold, assigned or transferred, in
whole or in part, by CROWN without prior approval or consent of TRITEL, which
approval shall not be unreasonably withheld, delayed or conditioned; provided,
however, that CROWN may assign its interest in this Agreement to an entity that
is its parent company or a subsidiary, or to any successor-in-interest or entity
acquiring 51% or more of its stock, provided that such successor demonstrates a
financial position reasonably demonstrating the ability of such assignee to meet
and perform the obligations of CROWN under this Master License and each SLA. It
is understood that any such assignment shall relieve CROWN of its obligation to
perform this Agreement provided that such assignee assumes and agrees to be
bound by all of the terms,
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conditions, covenants and obligations of TRITEL under this Agreement. As to
other entities, this Agreement may not be sold, assigned or transferred, in
whole or in part, without the written consent of TRITEL, for any purpose, which
consent may be not be unreasonably withheld, delayed or conditioned.
Notwithstanding the foregoing, CROWN may delegate its duties under this
Agreement provided that it does not delegate the majority of or whole of its
functions under this Agreement, that CROWN maintains control of such delegates
and that such delegates agree to comply with and abide by all of the terms,
conditions, covenants and agreements under this Agreement.
VII.E.4 Notwithstanding anything else contained herein, CROWN shall not
voluntarily, involuntarily or by operation of law assign or otherwise transfer
its rights or obligations (including, but not limited to the obligation to
construct the Tower Facilities and install the TRITEL Equipment, if applicable)
relating to any Applicable Tower Site which is subject to this Agreement, prior
to the acceptance of a Site by TRITEL pursuant to Section "III G".
Notwithstanding the foregoing or other provision in this Master License to the
contrary, CROWN may delegate its obligations to perform construction services
on, maintain or repair the Tower Facilities to another company provided that
such company to whom the obligations are delegated complies with all the terms
and provides of this Agreement and provided that such delegation does not in
effect, delegate all or a substantial portion of CROWN's obligations under this
Agreement.
VII.E.5 Notwithstanding anything else contained herein, CROWN may,
without notice or consent of TRITEL, pledge, mortgage, convey by deed of trust
or security deed, assign, create a security interest in, or otherwise execute
and deliver any and all instruments for the purpose of securing bona fide
indebtedness all or any part of CROWN's interest in this Master License, any
SLA, any TRITEL Premises, and/or all or any portion of CROWN's right, title, and
interest in and to any and/or all of Tower Facilities, CROWN Site or the
Easements. Notwithstanding the foregoing, neither the lender nor CROWN may
assign, transfer, sell or otherwise convey the Master License, any SLA, any
Prime Lease, any Tower Facility or any interest (excepting licensing or
subleasing of usage of portions of the Site (but not the entire Site) to third
party wireless communications carriers and providers) therein to any other
carrier or competitor of TRITEL. Promptly on CROWN's or CROWN's lender's
request, TRITEL shall execute and deliver, and shall assist in facilitating the
execution and delivery of, all documents requested by any of CROWN's lenders
including, but not limited to, consents to giving notice to CROWN's lender(s) in
the event of CROWN's default under the provision of the SLA or the Master
License, and consents to CROWN's assignment to any lender(s) of any and all of
CROWN's interest in or to this Agreement, any SLA or TRITEL Premises provided,
however, that all such documents and consents shall be in a form which is
reasonably acceptable to TRITEL and which will not materially increase CROWN's
burdens nor materially impair TRITEL's rights under this Master Lease or any
SLA. CROWN shall reimburse TRITEL for any out-of-pocket costs incurred by TRITEL
in complying with this provision including, but not limited to, TRITEL's
reasonable attorneys' fees incurred in reviewing and negotiating such documents
and consents.
VII.F. SEVERABILITY.
If any provision of this Agreement or any SLA subject to the terms
hereof is found by a court of competent jurisdiction to be invalid or
unenforceable with respect to any party, the
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remainder of this Agreement, the SLA, or the application of such provision to
persons other than those as to whom it is held invalid or unenforceable, is not
to be affected and each provision of this Agreement and the applicable SLA is
valid and enforceable to the fullest extent permitted by law.
VII.G. NO WAIVER.
No provision of this Agreement will be deemed to have been waived by
either party unless the waiver is in writing and signed by the party against
whom enforcement is attempted. The rights granted in this Agreement are
cumulative of every other right or remedy that the enforcing party may otherwise
have at law or in equity or by statute and the exercise of one or more rights or
remedies will not prejudice or impair the concurrent or subsequent exercise of
other rights or remedies.
VII.H. REPRESENTATION.
The parties acknowledge and agree that they have been represented by
counsel and that each of the parties has participated in the drafting of this
Agreement. Accordingly, it is the intention and agreement of the parties that
the language, terms and conditions of this Agreement are not to be construed in
any way against or in favor of any party hereto by reason of the
responsibilities in connection with the preparation of this Agreement.
VII.I. NOTICES.
Any notice or demand required to be given in this Agreement, and any
payment to be made other than the monthly fee, shall be made by certified mail,
return receipt requested, or reliable overnight courier, to the address of the
other party set forth below:
As to TRITEL Tritel Communications, Inc.
112 E. State Street - Suite B
Ridgeland, MS 39157
Attention: Kenneth Harris
As to CROWN: Crown Communication Inc.
375 Southpointe Boulevard
Canonsburg, PA 15317
Attention: Legal Department
Any monthly fee shall be mailed to the above CROWN address to the attention of
Accounting. Any demand or payment is deemed received three (3) business days
following deposit in the United States Mail or one business day following
deposit with a reliable overnight courier, addressed as required above. CROWN or
TRITEL may from time to time designate any other address for this purpose by
giving written notice to the other party.
VII.J. BINDING EFFECT.
This Agreement shall extend to and bind the heirs, personal
representatives, successors and assigns of the parties hereto.
VII.K. REVOCATION OF PERMITS.
In the event any governmental permit affecting the use of the Site as a
communications facility is withdrawn or terminated, the SLA relating to the Site
to which said permit or approval,
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applied shall be deemed to have been terminated effective the date of the
termination of the permit or approval provided however, any withdrawal or
termination which is caused by the acts or omissions of CROWN (or any other
occupant of the Site) shall be construed to be an event of default under the
applicable SLA.
VII.L. SUPERSEDES.
This Agreement revokes and supersedes any other oral or written
agreements between the parties that pertains to the subject matter described
herein with the exception of the Master Lease Agreement dated as October 30,
1998 between CROWN and TRITEL, and that certain Independent Contractor Agreement
with Confidentiality and Non-competition Agreements dated as of December 15,
1998, between CROWN and TRITEL, both of which shall continue to operate between
the parties for the sites referenced therein.
VII.M. NON-DISCLOSURE.
The parties agree that without the express written consent of the other
party, neither party shall reveal, disclose or promulgate to any third party the
terms of this Agreement or any portion thereof, except to where such third party
is the auditor, accountant, attorney, contractor or subcontractor of a party to
this Agreement or to a governmental agency if required by regulation, subpoena
or government order to do so.
VII.N. COUNTERPARTS.
This Agreement may be executed simultaneously in several counterparts,
each of which shall be deemed to be an original, but all of which shall
constitute one and the same instrument.
VII.O. TERM OF THE AGREEMENT
All obligations under this Agreement, except with regard to the terms
governing the SLAs issued hereunder shall be for a period of two (2) years from
the date of this Agreement. The Agreement will be extended for three (3)
additional periods of one (1) year each unless either party terminates the
Agreement with six (6) months prior written notice. The terms and conditions of
this Agreement which may apply to any SLA and any representations, warranties,
or indemnifications shall survive the termination of this Agreement and shall
apply to and be incorporated into each SLA until the termination or expiration
of such SLA.
VII.P. WARRANTIES AND REPRESENTATIONS.
The warranties and representations made in this Agreement shall be
deemed to be made, reaffirmed, ratified, rewarranted and re-represented upon the
execution of each SLA.
VII.Q. CONSENT.
CROWN and TRITEL covenant that whenever their consent or approval is
required under this Master License, said consent shall not be conditioned or
unreasonably withheld, delayed or conditioned.
VII.R. SCHEDULES.
TRITEL and CROWN acknowledge and agree that Schedules may be added to
Exhibit "C" to define, set, modify, covenant and agree upon certain terms and
conditions of the Master License. The Schedules shall only be applicable to the
Markets identified in each Schedule and each Schedule must be executed and
signed by a duly authorized representative of CROWN and
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<PAGE>
TRITEL. Upon execution by a duly authorized representative of CROWN and TRITEL,
the Schedule may be added to and be incorporated into and become a part of the
terms, conditions and covenants of the Master License. In the event of any
conflict or contradiction within the terms and conditions of the Schedules and
the Master License, the terms and conditions of the Schedules shall control.
VII.S. DEFINED TERMS.
In addition to the terms defined elsewhere in this Agreement, the
following terms shall have the following meaning (such meanings to be applicable
equally to the singular and plural forms of such terms) unless the context
otherwise requires:
"Assignment" shall mean the assignment of the Prime Lease from TRITEL
to CROWN.
"Commencement Date" shall mean the date when the initial term of each
SLA shall commence and shall be the date defined in the Schedules attached to
Exhibit "C" of this Agreement.
The term "day" shall refer to a business day, i.e., Monday through
Friday, inclusive and shall not include any federal holiday.
"Easements" shall mean any and all easements for access, ingress,
egress or utilities easements obtained or intended to be utilized for the Tower
Site.
"FCC" shall mean the Federal Communications Commission.
"Ground Space" shall mean the space located upon the ground at the Site
which is licensed to TRITEL for the location of TRITEL's cabinet or shelter,
including that which is included in TRITEL Premises.
"Market" shall mean each market in which TRITEL does business and shall
be divided into and include each of the following markets and the term "Market"
shall mean one of the following:
o Knoxville market which encompasses the Knoxville BTA
o Chattanooga market which encompasses the Chattanooga BTAs
o Nashville market which encompasses the Nashville BTAs (excluding any
Sites located in the state of Kentucky)
o Birmingham market which encompasses the Birmingham BTAs
o Huntsville, Alabama market which encompasses the Huntsville BTAs and
Decatur BTAs
o Mississippi market which encompasses the Memphis and Jackson BTAs
o Kentucky market which encompasses the Louisville, Lexington and
Evansville BTAs and any other Sites located in the state of Kentucky
o Montgomery, Alabama market which encompasses the Montgomery
o Any other market in which TRITEL does business or will do business in
the future
32
<PAGE>
"NEPA" shall mean National Environmental Protection Act.
"PARAMETERS" shall mean and include the following information:
TRITEL Assigned Site Name
TRITEL Assigned Site Number
Desired "In Service" Date
Site Latitude
Site Longitude
Site Ground Elevation
TRITEL's Desired Radiation Center on the Tower
Minimum Acceptable Total Elevation (total above sea level to antenna
center line)
Maximum Acceptable Total Elevation (total above sea level to antenna
center line)
Site Location, including City, County and State
7 1/2 Minute Quadrangle Map Name
Issue Date
Coordinate Type
Search Ring Radius
Number of Sectors required by TRITEL
Number of Antennas required by TRITEL
Type of Antennas required by TRITEL
Written Description of coverage objective
TRITEL's Preferred locations (if known)
RF Engineer Contact Name
RF Engineer Contact Phone Number
Copy of Applicable Quadrangle Map with search area parameters overlaid
Site Acquisition Notes (special considerations or limitations for
candidate selection)
Project Notes (any additional comments related to desired facility)
Signature of a TRITEL Representative and Date of Signature
Signature of the RF Engineering Representative and Date or Signature
"Plans" shall mean plans for the construction of the Tower Facilities.
"Pre-Development Costs" shall mean the cost of developing the Site for
the location, construction and operation of a Tower Facility upon the Site and
shall include without limitation, the cost of the site acquisition services
(limited as provided for in Exhibit "C"), phase I environmental assessments,
geotechnical analysis, title reports, title opinions, title commitments and
title insurance (which have been performed for TRITEL and not obtained by CROWN
for the Site and not TRITEL's licensed interest in the TRITEL Premises),
designs, Plans and Specifications, construction plans, the cost incurred in
obtaining grants of easements, supplies, relevant travel expenses (limited as
provided for in Exhibit "C"), fees or assessments imposed by local, state or
federal governmental entities, recording fees and filing fees, fees of
engineers, surveyors, architects, attorneys, brokerage commissions and others
providing professional services.
"Pre-Development Notice" shall mean the notice that CROWN has delivered
to TRITEL all of the Pre-Development Information for the Applicable Tower Site.
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<PAGE>
"Prime Lease" shall mean the lease, option or other contract between
the owner of the Site and CROWN (or TRITEL who will assign the lease to CROWN)
for the Site where the Tower Facilities will be located.
"Prime Lessor" shall mean the owner of the fee simple interest or other
interest in the entire portion of Site where the Tower Facility is to be located
and the person who has entered into a ground lease with CROWN (or TRITEL who
will assign the lease to CROWN) for the lease of the entire Site for the
location of a Tower Facility upon the Site.
"Punch List" shall mean a list of items that TRITEL deems necessary
that CROWN complete, fix, alter or correct in order for the Tower Facilities to
be completed in accordance with the Plans and Specifications.
"Specifications" shall mean the specifications for the construction of
the Tower Facilities.
"TRITEL's Equipment" or "TRITEL Equipment" shall mean the equipment to
be located at the Site by Tritel which shall be described in each SLA.
"TRITEL Premises" shall mean the space occupied by the TRITEL Equipment
on each Tower Facility, the ground space adjacent to the Tower Facility where
TRITEL's Equipment is located, the Easements and all cabling, conduit, wires and
utilities running to and from the Tower Facility and to and from TRITEL's
Equipment.
"Tower Facilities" or "Tower" shall mean the tower, foundations, and
related facilities including concrete foundations, footing and slabs and fencing
to be located upon the Tower Site.
"Tower Site", "Site" or "Crown Property" or "Crown Site" shall mean the
entire portion of property where the Tower Facilities are to be located which
property is being leased pursuant to the Prime Lease between the owner of the
property and CROWN (or is leased to TRITEL which lease will be assigned to
CROWN).
VII.T STANDARDS. Additional terms and conditions applicable to TRITEL's
use of each Site are stated in the Site Standards attached hereto and
incorporated herein as Exhibit "H".
VII.U ATTORNEY FEES. In the event of a breach of this Agreement, the
substantially prevailing party in any litigation (including bankruptcy or
insolvency proceedings) arising as a result of such breach shall be entitled to
its reasonable attorney's fees and court costs including appeals, if any.
VII.V. FORCE MAJEURE. Any prevention, delay or stoppage due to strikes,
lockouts, labor disputes, acts of God, inability to obtain labor or materials or
reasonable substitutes therefor, governmental restrictions, actions or inactions
not caused or contributed to by the party obligated to perform, governmental
controls not caused or contributed to by the party obligated to perform, enemy
or hostile governmental action, civil commotion, fire or other casualty, and
other causes beyond the reasonable control of the party obligated to perform,
shall excuse the performance by such party for a period equal to any such delay
or stoppage.
34
<PAGE>
IN WITNESS WHEREOF, the parties hereto have set their hands and affixed
their respective seals the day and year first above written.
TRITEL COMMUNICATIONS, INC.,
A DELAWARE CORPORATION
By:
--------------------------------
William S. Arnett
President
Date:
------------------------------
CROWN COMMUNICATION INC.,
A DELAWARE CORPORATION
By:
--------------------------------
Print Name:
------------------------
Title:
-----------------------------
Date:
------------------------------
APPROVED BY
CROWN LEGAL DEP'T
-----------------
35
<PAGE>
EXHIBIT "A" TO MASTER BUILD-TO-SUIT
SERVICES AND LICENSE AGREEMENT
ASSIGNMENT AND ASSUMPTION OF
LEASE AGREEMENT
for a wireless communications facility
located at:
Facility:
Street Address:
City:
County:
State:
between
CROWN COMMUNICATION INC., a Delaware corporation,
doing business in
Arizona as Crown Communications New Mexico as CommCrown Inc.
Colorado as Crown Communications North Carolina as Crown
Delaware as Crown Communication Inc. Communication Inc.
Florida as Crown Comm Inc. North Dakota as Crown Communications
Indiana as CommCrown Inc. Ohio as Crown Communications
Kentucky as Crown Communications Oklahoma as Crown Comm Inc.
Louisiana as Crown Communication Inc. Pennsylvania as Crown Communications
(of Delaware) South Carolina as Crown
Michigan as Crown Communication Inc. Communication Inc.
Mississippi as Crown Communication Inc. Tennessee as Crown Communications
Nevada as Crown Communication Inc. Texas as Crown Comm, Inc.
New Jersey as Crown Comm Inc. Utah as Crown Communication Inc.
Virginia as Crown Communication Inc.
West Virginia as Crown Communications
and
Tritel Communications, Inc., a Delaware corporation
36
<PAGE>
ASSIGNMENT AND ASSUMPTION OF
LEASE AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION OF LEASE AGREEMENT (THE "ASSIGNMENT") is
hereby made and entered into as of the ____ day of _________, ____ by and
between TRITEL COMMUNICATIONS, INC., a Delaware corporation, with a principal
place of business located at 112 East State Street, Suite B, Ridgeland,
Mississippi 39157 ("Assignor"), and CROWN COMMUNICATION INC., a Delaware
corporation (doing business in various jurisdictions as indicated on the cover
page of this Assignment), with a principal place of business located at 375
Southpointe Boulevard, Canonsburg, Washington County, Pennsylvania 15317
("Assignee").
RECITALS
A. Assignor and LANDOWNER NAME INCLUDING OWNERSHIP INTEREST
("Landlord") entered into that certain NAME OF LEASE AGREEMENT, dated DATE OF
LEASE AGREEMENT (a copy of this Lease Agreement is attached hereto as Exhibit
"A") (the "Lease Agreement") for a parcel of real property located in
MUNICIPALITY, STATE (Landlord's property being shown on the Tax Map of the
County of COUNTY NAME as Tax Parcel Number ___, and being further described in
Deed Book Volume Number ______ at Page ____ as recorded in the
__________________ Office for recording real property records [a copy of this
Deed is attached hereto as Exhibit "B"]) (the "Leased Premises"); and,
B. Assignor desires to assign the Lease Agreement to Assignee, and
Assignee desires to assume the rights and obligations under the Lease Agreement.
NOW, THEREFORE, for and in consideration of [CONFIDENTIAL TREATMENT
REQUESTED] and other good and valuable consideration each to the other in hand
paid and the premises and covenants hereinafter set forth, Assignor and Assignee
agree as follows:
1. Incorporation of Recitals. To the best of Assignor's knowledge, the foregoing
recitals are true and correct and are expressly incorporated herein by this
reference.
2. Assignment of Lease Agreement. Assignor hereby conveys, grants, assigns and
transfers to Assignee without warranty or representation except as provided
herein, the leasehold estate as set forth in the Lease Agreement, and all of
Assignor's right, title and interest thereunder without warranty or
representation except as provided herein. In addition, Assignor hereby conveys,
grants, assigns and transfers to Assignee without warranty or representation:
(a) all rights to easements and/or licenses which authorize ingress and egress
to the property described in the Lease Agreement and/or placement of guy wires,
anchors and utilities; and, (b) all other rights, privileges and appurtenances
owed by Assignor, reversionary or otherwise, and in any way related to the Lease
Agreement.
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<PAGE>
3. Assumption of Lease Agreement. Assignee hereby accepts the assignment of the
Lease Agreement as herein set forth, expressly assumes the payment and
performance of all of Assignor's obligations under the Lease Agreement (other
than obligations arising out of the acts or conduct of Assignor prior to the
date hereof, or other acts or conduct prior to the date hereof for which the
lessee or tenant is responsible under the terms of the Lease Agreement) arising
from and after the date of this Assignment to the same extent as if the Assignee
were named as the lessee under the Lease Agreement.
4. Indemnity by Assignee. At its sole cost and expense, Assignee agrees to
defend, indemnify and hold harmless Assignor from and against any and all
liability, claims, damages, expenses (including cost of litigation and
reasonable attorneys' fees), judgments, proceedings and causes of action of any
kind ("Claims") whatsoever arising out of, or in any way connected with, this
Assignment or the assignment and transfer of the lessee's obligations under the
Lease Agreement to Assignee as herein provided from, and after, the date of this
Assignment, except for Claims arising out of Assignor's failure to perform and
discharge any of the terms, covenants, conditions and agreements as the lessee
under the Lease Agreement prior to the date hereof, or other acts or conduct
prior to the date hereof for which the lessee or tenant is responsible under the
terms of the Lease Agreement. Also, at its sole cost and expense, Assignee
agrees to defend, indemnify and hold harmless Assignor from and against any and
all Claims whatsoever arising out of, or in any way connected with, Assignee's
failure to perform and discharge any of the terms, covenants, conditions and
agreements required to be performed by Assignee as the lessee under the Lease
Agreement from, and after, the date of this Agreement, except for Claims arising
our of Assignor's failure to perform and discharge any of the terms, covenants,
conditions and agreements as the lessee under the Lease Agreement prior to the
date hereof, or other acts or conduct prior to the date hereof for which the
lessee or tenant is responsible under the terms of the Lease Agreement.
5. Indemnity by Assignor. At its sole cost and expense, Assignor agrees to
defend, indemnify and hold harmless Assignee from and against any and all Claims
whatsoever arising out of, or in any way connected with, Assignor's performance
or discharge, or failure of such performance or discharge, of any of the terms,
covenants, conditions and agreements required to be performed by Assignor as the
lessee under the Lease Agreement prior to the date hereof, or other acts or
conduct prior to the date hereof for which the lessee or tenant is responsible
under the terms of the Lease Agreement.
6. Agreement of the Parties. Assignor and Assignee hereby expressly agree as
follows:
A. Assignor is the current holder of a tenant's interest in the Lease
Agreement.
B. The Lease Agreement is in full force and effect.
C. A true and correct copy of the Lease Agreement and all amendments,
if any, is attached hereto as Exhibit "A" and incorporated herein
by this reference. The Lease Agreement, and all amendments, if
any, constitute the entire agreement between Landlord, Assignor
and Assignee with respect to the Leased Premises. To the best of
Assignor's knowledge, there are no present outstanding defaults
pursuant to the terms and provisions of the Lease Agreement by
either Landlord
38
<PAGE>
or Assignor, and no party has knowledge of any facts which, with
the giving of notice, passage of time, or both, would constitute a
default by any party under the Lease Agreement.
D. The current rent (the "Rent") being paid by Assignor to Landlord
under the Lease Agreement is AMOUNT OF RENT ($_________) per year,
PAID [IN EQUAL MONTHLY INSTALLMENTS/IN AN ANNUAL LUMP SUM/IN EQUAL
INSTALLMENTS ON A QUARTERLY BASIS], and the Rent has been paid
through and including OBLIGATION DATE ("Obligation Date").
Assignee's obligation to pay Rent under this Assignment shall
begin on the first day after the Obligation Date, and Assignor's
obligation to pay Rent shall end thereon.
E. The term of the Lease Agreement expires on EXPIRATION DATE, and
there are RENEWAL TERMS (the "Renewal Terms").
F. Rent is to be increased at the beginning of any applicable Renewal
Term (as defined in the Lease Agreement) by INCREASE AMOUNT.
7. Attorneys' Fees. In the event of any dispute hereunder, or of any action to
interpret or enforce this Assignment, any provision hereof or any matter arising
herefrom, the prevailing party shall be entitled to recover its reasonable
costs, fees and expenses, including, but not limited to, witness fees, expert
fees, attorney (in-house and outside counsel), paralegal and legal assistant
fees, costs and expenses, and other professional fees, costs and expenses,
whether suit be brought or not, and whether in settlement, in any declaratory
action, in any bankruptcy action, at trial or on appeal.
8. Survival of Terms. The representations, warranties and indemnities set forth
herein shall survive the execution and delivery of this Assignment and shall
continue in full force and effect during the term of the Lease Agreement.
9. Binding Agreement. This Assignment constitutes the entire agreement between
the parties hereto with respect to the transaction contemplated herein, and it
supersedes all prior understandings or agreements between the parties relative
to such assignment.
10. Execution and Counterparts. To facilitate execution, the parties hereto
agree that this Assignment may be executed and telecopied to the other party and
that the executed telecopy shall be binding and enforceable as an original. This
Assignment may be executed in as many counterparts as may be required and it
shall not be necessary that the signature of, or on behalf of, each party, or
that the signatures of all persons required to bind any party, appear on each
counterpart; it shall be sufficient that the signature of, or on behalf of, each
party, or that the signatures of the persons required to bind any party, appear
on one or more of such counterparts.
11. Notices. Any notice, communication, request, reply or advise (hereinafter
severally and collectively, "Notice") regarding this Assignment shall be in
writing and shall be given by: (a) established express delivery service which
maintains delivery records; (b) hand delivery; or, (c) certified or registered
mail, postage prepaid, return receipt requested. Notice may also be given by
facsimile, provided Notice is concurrently given by one of the above methods.
Notice is effective upon receipt, or upon attempted delivery if delivery is
refused or if delivery is
39
<PAGE>
impossible because of failure to provide reasonable means for accomplishing
delivery. Notice shall be sent to the parties at the following addresses:
Assignor: Tritel Communications, Inc.
112 East State Street, Suite B
Ridgeland, Mississippi 39157
Attention: Kenneth Harris
Fax:
Assignee: Crown Communication Inc.
375 Southpointe Blvd.
Canonsburg, Pennsylvania 15317
Attn: Legal Department
Fax: (724) 416 - 2200
Any party shall have the right from time to time to change their respective
address for Notice by providing the other with thirty (30) days prior written
notice in the manner set forth above.
IN WITNESS WHEREOF, the parties have executed this Assignment as of the
date and year first written above.
ASSIGNOR: ASSIGNEE:
Tritel Communications, Inc. Crown Communication Inc.
By: By:
--------------------------------- ---------------------------------
Print Name: Kenneth F. Harris Print Name:
------------------------- -------------------------
Title: Director of Site Acquisition
and Property Administration Title:
------------------------------ ------------------------------
40
<PAGE>
ACKNOWLEDGEMENTS TO BE IN THE FORM OF APPROPRIATE
ACKNOWLEDGMENTS FOR STATE WHERE PROPERTY IS LOCATED
41
<PAGE>
EXHIBIT A
COPY OF THE LEASE AGREEMENT
42
<PAGE>
EXHIBIT B
COPY OF THE UNDERLYING DEED
43
<PAGE>
INDEXING INSTRUCTIONS:
- ----------------------
- ----------------------
EXHIBIT "B" TO MASTER BUILD-TO-SUIT
SERVICES AND LICENSE AGREEMENT
ECHO # XXX __-xxx- SITE NAME
MEMORANDUM OF
ASSIGNMENT OF LEASE AGREEMENT
THIS MEMORANDUM OF ASSIGNMENT OF LEASE AGREEMENT ("MEMORANDUM"), made
this __day of _____________, 1999, by and between TRITEL COMMUNICATIONS, INC., a
Delaware corporation, having its principal place of business at 112 East State
Street, Suite B, Ridgeland, Mississippi 39157 (hereinafter, "ASSIGNOR"), and
CROWN COMMUNICATION INC., a Delaware corporation, doing business in Kentucky as
CROWN COMMUNICATIONS, with an office address of 375 Southpointe Blvd.,
Canonsburg, Pennsylvania 15317 (hereinafter, "ASSIGNEE").
WITNESSETH
44
<PAGE>
1. PROPERTY OWNER'S NAME ("LESSOR") and Assignor entered into a Lease
Agreement dated _______________ ("LEASE"), of a portion of certain real property
of Lessor located at _____________________, ___________________ County,
___________, which real property is more particularly described on Exhibit A
attached hereto.
2. That portion of said real property leased by Assignor is a
________feet by ______ feet parcel of land [and 10 feet around all guy lines]
together with a non-exclusive right of ingress and egress seven (7) days per
week, twenty-four (24) hours per day, along a right-of-way extending from the
nearest public right-of-way, together with the right to install, replace and
maintain utility wires, poles, cables, conduits and pipes, which area is more
particularly described and shown on Exhibit "B" attached hereto ("LEASED
PREMISES"), which Lease or Memorandum of Lease is of record in ___________ in
the County __________ Office in the County of _________________, state of
______________________.
3. The Lease conveys to Assignor the right TO HAVE AND TO HOLD the
Leased Premises for a term of ____, unless earlier terminated in accordance with
the terms of the Lease.
4. Assignor has assigned its interest in the Lease to Assignee,
pursuant to an Assignment of Lease Agreement date ___________ (the
"Assignment").
5. A copy of the Lease and the Assignment is on file with Assignor and
Assignee.
6. This Memorandum constitutes a memorandum of the unrecorded
Assignment, all the terms and conditions of which are hereby made a part hereof
with the same force and effect as though fully set forth herein and the terms of
which control this Memorandum notwithstanding any inconsistency between the
provisions hereof, the Lease or the Assignment.
7. The terms, covenants and provisions of the Lease, the Assignment and
this Memorandum shall extend to and be binding upon the respective executors,
administrators, heirs, successors and assigns of Assignor and Assignee.
8. Assignee certifies that its precise address is 375 Southpointe
Blvd., Canonsburg, Pennsylvania 15317.
IN WITNESS WHEREOF, Lessor and Lessee have caused this Memorandum to be
duly executed on the day and year first written above.
"ASSIGNOR"
TRITEL COMMUNICATIONS, INC.,
a Delaware corporation
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
45
<PAGE>
"ASSIGNEE"
CROWN COMMUNICATION INC.,
a Delaware corporation
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
THIS INSTRUMENT PREPARED BY
OR UNDER THE DIRECTION OF:
- -----------------------------------------
- -----------------------------------------
46
<PAGE>
ACKNOWLEDGEMENTS TO BE IN THE FORM
OF APPROPRIATE ACKNOWLEDGEMENT FOR STATE
WHERE PROPERTY IS LOCATED
47
<PAGE>
EXHIBIT "A"
TO
MEMORANDUM OF ASSIGNMENT OF LEASE AGREEMENT
FULL LEGAL DESCRIPTION OF PROPERTY AND SOURCE OF TITLE
48
<PAGE>
EXHIBIT "B"
TO
MEMORANDUM OF ASSIGNMENT OF LEASE AGREEMENT
SITE SURVEY
49
<PAGE>
EXHIBIT "C" TO MASTER BUILD-TO-SUIT
AND LICENSE AGREEMENT
SEE SCHEDULES ATTACHED HERETO
FOR MARKET SPECIFIC TERMS
50
<PAGE>
SCHEDULE 1 TO EXHIBIT "C" TO MASTER BUILD-
TO-SUIT AND LICENSE AGREEMENT
I. NUMBER OF SITES
(a) TRITEL grants to CROWN the right to develop, construct, lease and
license usage of a minimum of forty-five (45) Sites in the Kentucky Market and
other Markets during the twenty-four (24) month period commencing with the date
that this Agreement is executed by TRITEL. In the event that TRITEL develops,
constructs, leases and licenses less than forty-five (45) Tower Sites in the
Kentucky Market, TRITEL shall grant CROWN the right to develop, construct, lease
and license Tower Sites in its other Markets so that the cumulative number of
Tower Sites which CROWN develops is no less than forty-five (45). Furthermore,
TRITEL acknowledges and agrees that any Tower Sites in the event any Tower Sites
are located in any Market other than Kentucky, TRITEL must grant and provide
CROWN the right to develop, construct, lease and license at least ten (10) or
more Sites which are (i) located in the same Market; or (ii) located along a
corridor between two (2) Markets; or (iii) located within one hundred (100)
miles of each other. In the event that CROWN elects not to accept an Applicable
Tower Site or otherwise terminates its obligations in regards to an Applicable
Tower Site or does not complete an Applicable Tower Site the total number of
Tower Facilities to be constructed by CROWN under this provision will be reduced
by the number of Applicable Tower Sites rejected, terminated or not otherwise
completed.
(b) In the event that the CROWN rejects or terminates its obligations
or otherwise fails to complete or does not otherwise complete and construct
twenty percent (20%) or more of the Tower Facilities or in the event that CROWN
does not reject the Site Development Services pursuant to IV.B.1 and fails to
complete or does not otherwise complete the construction and installation of the
TRITEL Equipment (excluding the installation of the cabinet) upon twenty percent
(20%)or more of the Sites for which the Site Development Services have been
accepted, such actions shall constitute an Event of Default under the Agreement
and in addition to any other remedies at equity or law or in the Agreement which
TRITEL may have, TRITEL shall have the right to terminate the Agreement upon
five (5) days written notice and for all Tower Sites for which building permits
have not been issued, to require CROWN to assign or reassign any or all Ground
Leases for the Applicable Tower Sites to TRITEL, or its assignee, to assign or
reassign any or all Pre-Development Information to TRITEL or its assignee and to
assign or reassign any other easements, leases, licenses, subleases, contracts,
suppliers contracts or agreements regarding or related to any or all of the
Applicable Tower Sites to TRITEL or its assignee. TRITEL or its assignee shall
reimburse CROWN for the Pre-Development Costs incurred by CROWN pursuant to the
milestones described in section III of this Schedule.
(c) In the event that CROWN desires to build a Tower Site (for which
TRITEL has not issued a search ring) for which TRITEL shall be the anchor or
first licensee upon the Tower Site, but the Tower Site has not been constructed
already, such Tower Site shall count towards and apply to the minimum number of
Sites which TRITEL must assign to and provide to CROWN under Section I(a) of
this Schedule, but the terms and conditions of the license between TRITEL and
CROWN for such Tower Site shall be governed by that certain Master Lease
Agreement between CROWN and TRITEL dated as of October 30, 1998 and shall not
otherwise be governed by the terms and conditions of this Agreement.
51
<PAGE>
II. DELIVERY OF PRE-DEVELOPMENT INFORMATION
CROWN shall complete, make available to and deliver to TRITEL copies of
all of the Pre-Development Information, as defined within this Agreement, prior
to the execution of an SLA, in accordance with the following time frames:
a) In conjunction with, but in any event not less than sixty (60) days
from the date that TRITEL delivers CROWN notice that TRITEL has accepted a
candidate for the Tower Site pursuant to Section I.E.1 or the date that CROWN
has provided TRITEL with the Notice of Acceptance; CROWN shall deliver to TRITEL
all Pre-Development Information for the Applicable Tower Site, however, the
period for delivering the construction, engineering and architectural drawings
and related site plan as listed in subsection (b) shall be no later than thirty
(30) days following CROWN's receipt of final zoning approval.
b) The Pre-Development Information which shall be delivered within such
sixty (60) day period as described above shall include: (a) preliminary FAA
aeronautical evaluation for the Tower Site; (b) engineering drawings of the
tower structure and foundations to be erected at the Tower Site; (c)
geotechnical report for the Tower Site; (d) title report, commitment for title
insurance, ownership and encumbrance report, title opinion letter, copies of
instruments in the chain of title or any other information that may have been
produced regarding the marketability of title and title to the Tower Site and
the Easements; (e) environmental assessments, including phase I reports, a
report relating to contemporaneous or subsequent intrusive testing, and the "FCC
Checklist" performed pursuant to NEPA requirements; and, (f) the survey of the
Tower Site.
c) The Pre-Development Information that shall be delivered within a
thirty (30) day period from the date of CROWN's receipt of final zoning approval
for the Site shall include: construction, engineering and architectural drawings
and related site plan pertaining to the construction of the Tower Facilities on
the Tower Site and any final zoning and Governmental Approvals necessary for the
construction of a tower Facility upon the Applicable Tower Site.
d) TRITEL shall provide to CROWN, within ten (10) days from the date
that the Notice of Acceptance has been delivered to TRITEL, an application
engineering data sheet related to TRITEL's Equipment installation on the Tower
Site.
e) Notwithstanding the foregoing or anything else contained in the
Master License , CROWN shall deliver twenty-five (25) Tower Sites fully
completed and ready for the installation of TRITEL's Equipment according to the
following schedule, excepting those Tower Sites delayed by TRITEL's actions or
inactions or those Tower Sites delayed beyond CROWN's control, including but not
limited to governmental approvals, moratoria, FAA or force majeure:
October 15, 1999 five (5) Tower Sites
November 15, 1999 ten (10) Tower Sites
December 15, 1999 ten (10) Tower Sites
CROWN shall diligently exercise its best efforts to construct and deliver all of
the Tower Sites in the clusters which have been developed by TRITEL for the best
system optimization.
52
<PAGE>
III. PRE-DEVELOPMENT COSTS
CROWN shall reimburse TRITEL for the Pre-Development Costs as specified below,
based upon the milestones described below (as such milestones would be completed
according to industry standards) if TRITEL has performed those Pre-Development
services; however, if CROWN has performed those services and the conditions of
section I.G. of this Agreement occur, then TRITEL shall reimburse CROWN up to
one-half of the Pre-Development Costs as detailed in section I.G. of this
Agreement upon the occurrence of the events described in section I.G.:
MILESTONE Cost
- --------- ----
Approved Candidate [CONFIDENTIAL TREATMENT REQUESTED]
Fully Executed Ground Lease [CONFIDENTIAL TREATMENT REQUESTED]
Complete Survey (incl. 2-C letter) [CONFIDENTIAL TREATMENT REQUESTED]
Title Report and Title Opinion [CONFIDENTIAL TREATMENT REQUESTED]
Phase One Environmental [CONFIDENTIAL TREATMENT REQUESTED]
NEPA Checklist [CONFIDENTIAL TREATMENT REQUESTED]
Geotechnical Report [CONFIDENTIAL TREATMENT REQUESTED]
Construction Drawings [CONFIDENTIAL TREATMENT REQUESTED]
Non-appealable Zoning Approval [CONFIDENTIAL TREATMENT REQUESTED]
Building Permit [CONFIDENTIAL TREATMENT REQUESTED]
Preliminary Aeronautical Evaluation [CONFIDENTIAL TREATMENT REQUESTED]
* In the event that the actual expense for the Title Report and Opinion
exceeds [CONFIDENTIAL TREATMENT REQUESTED], the Pre-Development Costs for
the Title Report and Opinion shall be reimbursed based upon the actual
expense incurred upon the submission of a copy of the actual invoice.
IV. COMMENCEMENT DATE
The Commencement Date for a particular SLA shall be the date which is the later
of (a) the date when CROWN has completed the installation of TRITEL's antennas
and coaxial cables at the Tower Site in the event that CROWN is installing
TRITEL's antennas and coaxial cable; or (b) the date which is the earlier of (1)
the date that TRITEL has accepted the Tower Facilities pursuant to Section
III(G) or (2) in the event that TRITEL has not accepted the Tower Facilities the
date that the Tower Facilities are substantially complete so that TRITEL would
be able to operate its equipment and antennae upon the Tower Site in substantial
compliance with all laws, rules and regulations.
V. MONTHLY FEES
The monthly fee for each SLA beginning four months after the Commencement Date
shall be as follows:
53
<PAGE>
SLA MONTHLY FEES -- BASE FEE CALCULATION
SLA
Commencing in Month 4 -64
[CONFIDENTIAL TREATMENT REQUESTED]
For each SLA signed by the parties for use of a Site within the first year after
the execution of this Agreement, the monthly fees shall be [CONFIDENTIAL
TREATMENT REQUESTED]. All fee amounts shall increase by [CONFIDENTIAL TREATMENT
REQUESTED] each renewal term. Notwithstanding the foregoing, the SLA Monthly
Fees shall not commence, and TRITEL shall not be obligated to pay for or be
liable for the SLA Monthly Fee, until four (4) months after the Commencement
Date. The foregoing fee shall include the space for up to a 10' x 20' concrete
equipment pad inside the Tower Site compound area. Should TRITEL require a
larger area inside the compound (e.g. for a generator or fuel tank), an
additional fee of [CONFIDENTIAL TREATMENT REQUESTED]/ sq. ft./year will be
charged.
V1. APPROVAL OF PLANS AND SPECIFICATIONS
In the event that TRITEL has not obtained Plans and Specifications for the Tower
Facility, CROWN shall have Plans and Specifications for the Tower Facility
prepared, designed and delivered to TRITEL within the following time frames:
Within a thirty (30) day period from the date of CROWN's receipt of final zoning
approval CROWN shall deliver to TRITEL the site construction, engineering and
architectural drawings and related site plan pertaining to the construction of
the Tower Facilities on the Tower Site and copies of all zoning and Governmental
Approvals necessary for the completion of construction of the Tower Facilities
upon the Tower Site.
VII. CONSTRUCTION SCHEDULE
CROWN shall commence construction of the Tower Facility within the following
time frames:
From the date CROWN or TRITEL receives a non-appealable, final zoning approval,
CROWN agrees to file for any and all applicable building permits for the Tower
Site within ten (10) days. From the date CROWN receives the applicable building
permits, CROWN will commence construction of the Tower Facilities upon the Tower
Site within five (5) days.
CROWN shall deliver all Sites fully completed with the TRITEL Equipment
(excluding the installation of the cabinet) fully installed, excepting those
Sites and/or TRITEL Equipment delayed by TRITEL'S actions or those Sites and/or
TRITEL Equipment delayed beyond CROWN's control, including but not limited to
Governmental Approvals (including FAA applications), moratoria, or force
majeure, within sixty (60) days after the receipt of necessary building permits.
CROWN shall issue a Notice of Completion pursuant to Section III.G of the
Agreement according to the schedules provided in Sections II and VII of this
Exhibit.
54
<PAGE>
CROWN shall have installed and completed the installation of the TRITEL
Equipment (excluding the installation of the cabinet) pursuant to the Site
Development Services outlined in Exhibit "F" on or before the delivery of the
Notice of Completion.
CROWN shall diligently exercise its best efforts to construct and deliver all of
the Tower Sites in the clusters that have been developed by TRITEL for the best
system optimization.
VIII. In the event that CROWN does the Site Development Services described in
Exhibit F for the installation of the TRITEL Equipment (excluding the
installation of the cabinet upon the Applicable Tower Site), upon the completion
of the Site Development Services described in Exhibit F and the acceptance of
the installation of the TRITEL Equipment (excluding the installation of the
cabinet upon the Applicable Tower Site) and the Site Development Services
pursuant to Section III.G, TRITEL shall pay to CROWN the sum of Thirty Seven
Thousand and no/100 Dollars ($37,000.00) for the Site Development Services.
IX. MODIFICATION. This Schedule shall be added to and modify the terms and
conditions of the Master License and hereby is incorporated into the terms of
the Master License. In the event that there is a conflict or contradiction
between the terms and conditions of the Master License and this Schedule, the
terms and conditions of this Schedule shall control.
IN WITNESS WHEREOF, CROWN and TRITEL have signed this Schedule as of the date
and year first above written.
TRITEL: CROWN:
TRITEL COMMUNICATIONS, INC. CROWN COMMUNICATION INC.
By: By:
-------------------------------- --------------------------------
Name: William S. Arnett Name:
------------------------------ ------------------------------
Title: President Title:
----------------------------- -----------------------------
APPROVED BY
CROWN LEGAL DEP'T
-----------------
55
<PAGE>
EXHIBIT "D"
SITE LICENSE ACKNOWLEDGMENT
SITE IDENTIFICATION NO:
----------------------------------
CROWN PROJECT NUMBER:
----------------------------------
SITE NAME:
----------------------------------
This Site License Acknowledgment ("SLA") is made and entered into as of
this ___ day of ______________, _____, by and between TRITEL COMMUNICATIONS,
INC., a Delaware corporation, ("TRITEL") and CROWN COMMUNICATION INC., a
Delaware corporation ("CROWN"), pursuant and subject to that certain Master
Build-To-Suit Services and License Agreement (the "Agreement") by and between
the parties hereto, dated as of __________, 1999. All capitalized terms have the
meanings ascribed to them in the Agreement.
1. CROWN authorizes TRITEL to use and hereby licenses to TRITEL a
portion of that certain parcel of property, located in the Municipality of
_______, the County of ________, and the State of _______, more particularly
described as a ______' by ______' parcel containing approximately ________
square feet situated at _____________ (add legal description) which is described
in Exhibit "1" attached hereto (the "Ground Space"), together with the
non-exclusive right for ingress and egress, seven (7) days a week, twenty-four
(24) hours a day, on foot or motor vehicle, including trucks, and for the
installation and maintenance of utility wires, poles, cables, conduits, and
pipes over, under, or along a _____ feet (______') wide right-of-way and/or
easement extending from the nearest public right-of-way, ____________ to the
premises, said premises and right-of-way for access being substantially as
described herein in Exhibit "1" and to and from such easement, to and from the
Ground Space and to and from the Ground Space to the antennae and equipment
described in Section 2.
2. TRITEL shall also have the right to and CROWN hereby grants to
TRITEL the license to install its antennas and equipment upon the Tower
Facilities consistent with the specifications and in the locations described
below:
Manufacturer and type-number:
------------
------------
Number of antennas:
------------
Weight and dimension of antenna(s) (LxWxD):
------------
Transmission line mfr. & type no.:
------------
Diameter & length of transmission line:
------------
Location of antennas (as described in Exhibit "2"
attached hereto and made a part hereof):
------------
Height of antenna(s) on structure:
------------
56
<PAGE>
Direction of radiation:
------------
Equipment building/floor space dimensions (as described
in Exhibit "3" attached hereto and made a part hereof):
------------
Frequencies/Max Power Output:
------------
That portion of the Site and the rights for ingress, egress, utilities, poles,
cables, conduits and pipes described in paragraph 1 above and the space on and
in the communications facility described in this paragraph 2, and the space for
wires, cables, conduits and pipes to and from the facilities and the space in
the ground constitute the "TRITEL Premises" under the terms of the Agreement. To
the extent that TRITEL requires the use of a building at the Site, such space
within the building shall be included in the definition of the TRITEL Premises
and described in Exhibit 3.
3. The monthly fee payment due and payable by TRITEL to CROWN shall be
as provided in the Agreement. The parties agree that the first monthly fee shall
be in the amount of $______, escalating in accordance with the terms of the
Master Lease or schedule attached thereto by fifteen percent (15%).
4. The term of this SLA shall be in effect for an initial period of
sixty-four (64) months from _____. The term of this SLA shall be automatically
extended for up to four (4) additional five (5) year terms unless TRITEL
terminates this Agreement by giving CROWN written notice of the intent to
terminate at least six (6) months prior to the end of the then-current term.
5. The parties acknowledge that CROWN's rights in the Site derive from
a certain contract dated _______, between CROWN and a third party; said contract
hereinafter referred to as the "Prime Lease" and attached hereto as Exhibit "4"
to the SLA.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]
57
<PAGE>
IN WITNESS WHEREOF, the parties hereto have set their hands and affixed
their respective seals the day and year first above written.
TRITEL COMMUNICATIONS, INC.
By:
-------------------------------------
Print Name: Kenneth F. Harris
-----------------------------
Title: Director of Site Acquisition and
Property Administration
----------------------------------
Date:
-----------------------------------
CROWN COMMUNICATION INC.
By:
---------------------------------------
Print Name:
-------------------------------
Title:
------------------------------------
Date:
-------------------------------------
58
<PAGE>
EXHIBIT "1" TO THE SLA
PROPERTY DESCRIPTION (INCLUDING ACCESS EASEMENT OR RIGHT-OF-WAY)
[Remainder of Page Left Intentionally Blank]
59
<PAGE>
EXHIBIT "2" TO THE SLA
LOCATION OF ANTENNAS
[Remainder of Page Left Intentionally Blank]
60
<PAGE>
EXHIBIT "3" TO THE SLA
DESCRIPTION OF EQUIPMENT BUILDING/FLOOR SPACE (IF ANY)
[Remainder of Page Left Intentionally Blank]
61
<PAGE>
EXHIBIT "4" TO THE SLA
PRIME LEASE
[Remainder of Page Left Intentionally Blank]
62
<PAGE>
EXHIBIT "H"
SPECIAL CONDITIONS, FACILITY RULES AND REGULATIONS,
AND ACCESS AND SECURITY PROCEDURES FOR USERS
I. GENERAL
A. PURPOSE
1. The purpose of these Site Standards is to create a quality site
installation. These standards are to be in effect for each site at
which TRITEL has equipment in, on or at the site and at which
TRITEL has a license to use pursuant to a Tower License to which
this document is an attachment.
B. STATE AND NATIONAL STANDARDS
All installations must conform with all state and national regulations and
the following state and national codes or any supplements, amendments or
provisions which supercede them:
1. American National Standards Institute ("ANSI"):
ANSI/TIA/EIA-222-F Structural Standards for Steel Antenna Towers
and Antenna Supporting Structures
2. FAA Regulations:
Vol. XI, Part 77 Objects Affecting Navigable Airspace Advisory
Circular High Intensity Obstruction Lighting Systems AC
150/5345-43, FAA/DOD Specifications L-856
3. FCC Rules and Regulations:
Code of Federal Construction, Marking and Lighting of Antenna
Regulations Title 47 Structures Chapter I, Part 17
4. National Electrical Code (NFPA 70)
5. Building Officials and Code Administrators International, Inc.
Basic National Building Code
Basic National Mechanical Code
State Building Code
6. National Fire Protection Association ("NFPA")
Code 101 - Life Safety
Code 90A - Installation of Air Conditioning and Ventilating
Systems
Code 90B - Installation of War Air Heating and Air Conditioning
Systems
Code 110 - Emergency and Standby Power Systems
Code 780 - Lightning Protection
7. State Fire Safety Code
1
<PAGE>
8. Occupational Safety and Health Administration ("OSHA")
Safety and Health Standards (29 C.F.R. ss. 1910) General Industry
Subpart R Special Industries
Section 1910.268 Telecommunications
Section 1926.5 10 Subpart M Fall Prevention
9. Motorola Grounding Guideline for Cellular Radio Installations,
Document No. 68P81150E62, 7/23/92 or Lucent (formerly AT&T)
AUTOPLEX(c) Cellular Telecommunications Systems, Lightning
Protection and Grounding, Customer Information Bulletin 148B,
August 1990, or latest revision.
C. GENERAL/APPROVAL
1. TRITEL will furnish the following to CROWN prior to installations
of any equipment:
a. Completed Application. (TRITEL must make new application to
CROWN for change in antenna position or type).
b. Fully executed supplement.
c. Copies of construction/building permits (unless the original
is required by government law, rule or regulation in which
event the original will be supplied), if not obtained by
CROWN or its designee.
d. Final survey by a registered or licensed surveyor outlining
property boundaries, improvements, easements and access, if
not obtained by CROWN or its designee.
e. Accurate block diagrams showing operating frequency range of
all system components (active or passive) with gains and
losses in dB, along with power levels.
f. Complete list of all materials required for the installation.
2. The following will not be permitted at the site without the prior
written consent of CROWN:
a. Any equipment without FCC type acceptance or equipment, which
does not conform to FCC rules and regulations.
b. Add-on power amplifiers.
c. "Hybrid" equipment with different manufacturers' RF strips.
d. Open rack mounted receivers and transmitters.
2
<PAGE>
e. Equipment with crystal oscillator modules that have not been
temperature compensated.
f. Digital/analog hybriding in exciters, unless type-accepted.
g. Non-continuous duty rated transmitters used in continuous
duty applications.
h. Transmitter outputs without a harmonic filter and antenna
matching circuitry.
i. Ferrite devices looking directly at an antenna.
j. Nickel plated connectors.
k. Cascaded receiver multicouplers/preamps.
3. Unless otherwise stated within the Tower License, no work shall be
performed upon the Tower, without the prior written consent of
CROWN, which consent shall not be unreasonably withheld, delayed
or conditioned. Scheduling of work upon the Tower will be
coordinated with CROWN to allow CROWN to have a representative
present at the site during the performance of the work, at CROWN's
option. All installation, repair and maintenance work conducted by
TRITEL will be in accordance with good engineering practices and
this specification.
4. No animals, children or bicycles are permitted at the Site at any
time.
5. Unless otherwise stated within the Tower License, only
representatives or contractors of CROWN are authorized to climb
towers for antenna installation, repair or maintenance, provided
however, upon prior consent of and notice to CROWN, which consent
shall not be unreasonably withheld, delayed or conditioned, and
upon the terms and conditions of the Master License, TRITEL or its
contractors may climb antennas for installation, repair or
maintenance.
D. LIABILITY
1. It will be the responsibility of TRITEL to comply with all of the
Site Standards set forth herein.
E. INSPECTION
In accordance with the terms of the Tower License, CROWN reserves the
right to inspect TRITEL's area during the License Term in order to ensure
compliance with the standards set forth herein. Any such inspection will be
solely for the benefit and use of CROWN and does not constitute any approval
of or acquiescence to the conditions that might be revealed during the
course of the inspection.
3
<PAGE>
F. EQUIPMENT
1. Movement of "bulky" equipment upon the Tower will be restricted to
times designated by CROWN. CROWN will determine the method of
routing such items to ensure the safety of all concerned parties
and minimize damage. Advance notice of at least twenty-four (24)
hours is required for the movement of equipment upon the Tower.
2. CROWN will have the authority to determine the maximum equipment
weight allowed upon the Tower.
II. RADIO FREQUENCY INTERFERENCE PROTECTIVE DEVICES
A. If due to TRITEL's use or proposed use there exists any change to the
Radio Frequency ("RF") environment, it will be at CROWN's reasonable
discretion to require any or all of the following:
1. Intermodulative ("IM") protection panels can be installed in lieu
of separate cavity and isolator configurations; however, CROWN's
approval is required, which approval will not be unreasonably
withheld, delayed or conditioned.
2. TRITEL will provide CROWN with its FCC type acceptance number.
B. Frequencies not included in the above subparagraph will be reviewed on a
case-by-case basis.
C. Hybrid transmitter combining will have a band pass filter installed on
the output with the following minimum attenuation at 1 MHz from the transmit
frequency: 30 MHz to 1 GHz -- 14 dB attenuation.
D. All cavities are to be 3/4 wavelength, silver plated type.
E. Additional protective devices may be required based upon CROWN's
evaluation of the following information:
1. Theoretical Transmitter mixes
2. Antenna location and type
3. Combiner/multicoupler configurations
4. Transmitter specifications
5. Receiver specifications
6. Historical problems
7. Transmitter to transmitter isolation
8. Transmitter to antenna isolation
9. Transmitter to receiver isolation
10. Calculated and measured level of IM products
11. Transmitter output power
12. Transmitter Effective Radiated Power ("ERP")
4
<PAGE>
13. Spectrum analyzer measurements
14. Voltage Standing Wave Radio ("VSWR") measurements
15. Existing cavity selectivity
F. In accordance with the terms of the SLA, TRITEL will be required to
immediately correct excessive cabinet leakage, which causes interference to
other users of the Site.
G. Questions regarding the IM Protection should be directed to the attention
of: Crown Network Systems, Inc., RF Engineer Manager. Telephone: (724)
416-2000.
III. ANTENNAS AND ANTENNA MOUNTS
A. All mounting hardware to be utilized by TRITEL will be as specified by
the tower manufacturer and approved by CROWN, which approval shall not
be unreasonably withheld, delayed or conditioned.
B. Connections will be taped with vinyl stretch tape (Scotch #33-T or
equivalent) and Scothkoted or equivalent, including booted pigtails.
C. Antenna(s) and antenna mounts must be the manufacturer's VSWR
specifications.
D. Any corroded elements must be repaired or replaced.
E. Antenna(s) and antenna mounts will be DC grounded type or will have
appropriate lightning protection as approved by CROWN, which approval
shall not be unreasonably withheld, delayed or conditioned.
F. No welding or drilling on mounts will be permitted.
G. All antennas will be encased in fiberglass or ABS randomes.
H. Antenna lines entering any equipment shelter must have a suitable
lightning surge arrestor installed within two (2) feet of the cable
entry port. The surge arrestor must be bonded to the site grounding
system.
IV. CABLE
A. All transmission lines will be installed and maintained to avoid
kinking and/or cracking.
B. Transmission interconnecting cables and jumpers will be constructed of
solid copper outer conductor "superflex" or hardline.
C. Cables will not be installed, after the initial installation, without
written permission by CROWN, which permission will not be unreasonably
withheld, delayed or conditioned.
5
<PAGE>
D. Each cable will be tagged with weatherproof labels showing the
manufacturer, model and owner's name at both ends of the cable run.
E. Each cable fastener, exposed to the weather, will be stainless steel or
corrosion resistant.
F. All interconnecting cables/jumpers will have shielded outer conductor.
G. Interior cables will run in troughs or cable trays and on cable or
waveguide bridges at intervals of no less than three (3) feet.
H. Outside cables will be attached with stainless steel or corrosion
resistant hangers and non-corrosive hardware. Cables will be routed to
the Tower via the ice bridge.
I. All unused lines will be tagged, using color codes, at both ends
showing termination points with the appropriate impedance termination
at each end.
J. All AC line cords must be 3-conductor type with attached grounding
plugs.
K. All antenna transmission lines will be grounded at both the antenna and
equipment ends and at the equipment shelter entry point, with the
appropriate grounding kits. Grounding will be in accordance with
paragraph XIV of this specification.
L. All antenna lines will have a jacketed, corrugated, solid outer, copper
conductor.
M. All cables running to and from the exterior of the cabinet will be
one-hundred percent (100%) ground shielded. Preferred cables are:
Heliax, Superflex or braided grounds with foil wrap.
N. All other interior cables must be1/4",1/2" superflex or 3/8" value flex
as manufactured by Andrew Corporation or approved equal, which approval
shall not be unreasonably withheld, delayed or conditioned.
V. CONNECTORS
A. Connectors will be Teflon filled, UHF or N type, including
chassis/bulkhead connectors.
B. Connectors will be properly fabricated (soldered, if applicable), if
field installed.
C. Connectors will be taped and Scotchkoted or equivalent at least 4" onto
the jacket, if exposed to the weather.
D. Male pins must be of proper length, in accordance with manufacturer's
specifications.
E. Female contacts will not be spread.
6
<PAGE>
G. Connectors must be "pliers tight." "Hand tight" is not acceptable.
H. Connectors will be silver-plated or brass.
I. Connectors must be electrically and mechanically equivalent to the
Original Equipment Manufacturers ("OEM") connectors.
VI. RECEIVERS
A. No RF preamps will be permitted on the front end, unless authorized by
CROWN, which authorization shall not be unreasonably withheld, delayed
or conditioned. CROWN acknowledges and agrees that TRITEL is hereby
authorized to us a TMA Tower Mounted Amplifier.
B. All RF shielding must be in place.
C. VHF frequencies and higher must use helical resonator front ends.
D. Receivers must meet manufacturer's specifications, particularly with
regard to bandwidth, discriminator, swing and symmetry and spurious
responses.
E. Crystal filters, pre-selectors, and cavities must be installed in RX
legs, where appropriate.
F. All repeater tone squelch circuitry must use "AND" logic.
VII. TRANSMITTERS
A. Transmitters must meet manufacturer's original specification.
B. All RF shielding must remain in place.
C. Each transmitter must be equipped with a visual operation indicator.
D. Transmitters must be tagged with owner's name, contact name, contact
phone number, equipment model number, serial number and operating
frequency(ies) and a copy of TRITEL's current FCC license for the
equipment.
E. All low level, pre-driver and driver stages in the exciters must be
shielded.
F. All power amplifiers must be shielded.
G. Output power will not exceed that specified on the applicable FCC
license.
VIII. COMBINERS/MULTICOUPLERS
A. Combiners/muplticouplers will meet the manufacturer's specifications.
7
<PAGE>
B. Combiners/muplticouplers must be tuned using the manufacturer's
approved procedures.
C. Combiners/muplticouplers must provided a minimum of 60 dB transmitter
to transmitter isolation.
IX. CABINETS
A. All cabinets must be bonded together and to the equipment building
ground system.
B. All cabinet doors must be secured.
C. All non-original holes larger than 1" must be covered with copper
screen or solid metal plates.
D. Current license for all operating frequencies must be mounted on the
cabinet exterior for display at all times.
X. MAINTENANCE/TUNING PROCEDURES
A. Access to equipment and antennas will be by authorized personnel only,
provided however, access to equipment and antennas on the Tower will
only be by authorized and approved personnel.
B. Only qualified employees of TRITEL will perform maintenance and tuning.
Prior written consent is not required for this work.
C. All external indicator lamps/LED displays must be operational.
D. Equipment operating parameters must meet manufacturer's specifications.
E. All cover, shield and rack fasteners must be in place and securely
fastened following these procedures.
F. Local speakers and/or orderwire systems will be used during service,
testing or other maintenance procedures. These systems will be turned
"OFF" following procedures.
XI. INTERFERENCE DIAGNOSTIC PROCEDURES
A. In accordance with the Tower License, TRITEL must cooperate immediately
with CROWN when called upon to investigate a source of interference,
whether or not it can be conclusively proven that TRITEL's equipment is
involved.
XII. TOWER
This section deals with items, which are to be mounted on, attached to or
affixed to the Tower.
8
<PAGE>
A. Ice Shields:
1. At CROWN's reasonable discretion, protective ice shields may be
required.
B. Climbing Bolts and Ladders:
1. All attachments made to the tower will be made in such a manner as
not to cause any safety hazard to other licensees or cause any
restriction of movement on, or to any climbing ladders, leg step bolts
or safety cables.
C. Bridge:
1. The cable or waveguide will be secured to the bridge brackets, if
required using the manufacturer's clamps or other hardware
specified for the application.
2. Supports and support locations will be in accordance with the
manufacturer's recommendations, specific for the type of cable or
waveguide used.
3. No cable or waveguide will be clamped, tied or in any way affixed
to the bridge run owned by CROWN.
D. Cable ladder or Brackets:
1. CROWN will install a ladder or brackets for the vertical routing
of cable and waveguides. This ladder or brackets will extend from
the horizontal to the vertical transmission at the point where the
bridge meets the tower to the location that the cable or waveguide
leaves the bridge to route to the antenna.
2. All cable and waveguides are to be attached to the ladder in
accordance with the cable or waveguide manufacturer's
recommendations.
3. No cable or waveguide will be clamped, tied or in any way affixed
to a run owned by CROWN.
E. Distribution Runs:
1. Cable or waveguide runs, from the cable ladder to the point of
connection with the antenna, shall be routed along tower members
in a neat and workmanlike manner to produce a professional site
appearance.
2. Cable and/or waveguide runs shall be routed so as not to impede
the safe use of the tower leg or climbing bolts. In addition, runs
will not restrict access for CROWN or other TRITEL.
9
<PAGE>
3. Distribution runs will be clamped to the tower in accordance with
the recommendations of the cable or waveguide manufacturer.
4. No cable or waveguide will be clamped, tied or in any way affixed
to a run owned by CROWN.
F. Lengths:
1. Cable and/or wavelength runs will not be longer than necessary to
provide a proper connection and normal maintenance and operation,
unless otherwise approved by CROWN.
2. No coiled lengths will be permitted on the tower, bridge or on the
ground.
G. Entry:
1. Entry of cable or waveguide to the interior of the equipment
shelter will be via ports provided in the equipment shelter's
wall.
2. Cable and/or waveguide entrance port will be provided with a boot
to seal. The boot shall be a Microflect or equivalent commercial
product made specifically for the type of cable or waveguide and
the size of the port.
3. Seals will be installed in accordance with the manufacturer's
instructions and will be sealed against moisture.
XIII. EQUIPMENT LOCATED WITHIN CROWN'S EQUIPMENT BUILDING
A. Equipment Installation Requirements in CROWN Buildings:
1. Mounting of equipment or accessories to interior or exterior
building walls must be approved by CROWN prior to installation.
2. All racks and equipment will be plumb and true with walls and
floor.
3. Installation of the equipment will be consistent with the
electrical and operation requirements of the equipment.
4. Equipment and accessories will be installed in a neat and
workmanlike manner to provide a professional, finished
installation.
B. Transmission Lines and/or Waveguide Routing:
1. All cables or waveguides will be placed and secured in cable trays
or troughs within the equipment shelter to the equipment racks and
termination points.
10
<PAGE>
2. Transmission lines will be fastened to the tower's waveguide
ladder using the proper mechanical hanger or snap-in hanger kit
except on side arms and small masts where stainless steel wraplock
is permitted.
C. Lengths:
1. Cable and waveguide lengths will not be longer than necessary to
provide proper connection.
2. No coiled lengths will be permitted in the tray or elsewhere in
the equipment shelter.
D. CROWN has provided transient surge protection on the primary AC feed to
the equipment shelter. However, CROWN does not provide any warranty
against electrical surge. Therefore, CROWN recommends that TRITEL
install, at TRITEL's expense, individual transient surge protection on
each circuit used by TRITEL.
E. TRITEL will operate its equipment with all shields attached, cabinet
doors closed and side panels attached. All external indicator lamps and
LED's must be operational at all times.
F. Neither TRITEL nor its representatives will interfere with any other
TRITEL's equipment in the equipment shelter. TRITEL will not trip any
electric service breakers for any reason without CROWN's prior, written
approval, which approval shall not be unreasonably withheld, delayed or
conditioned.
G. TRITEL will not adjust, attempt to adjust or otherwise tamper with the
temperature control thermostats within the equipment shelter. CROWN
will adjust thermostats as required to maintain the standard building
temperature.
H. TRITEL will rack mount as much equipment as possible to conserve floor
space.
XIV. GROUNDING
A. TRITEL must adhere to the grounding specifications listed in Section I,
based upon TRITEL's equipment at the site.
B. All exterior grounding connections to the main ground loop will use
exothermic welding (Cadweld).
C. All antennas will be bonded to the Tower.
D. Cable and waveguides will be grounded, as a minimum, at three (3)
specific points. These locations include:
1. At the top of the run, immediately above the hoisting grip.
2. At the bottom of the run, above the horizontal transition.
11
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3. Prior to the point of entry to the equipment shelter.
E. The additional hoisting grips and grounding kits will be in accordance
with the manufacturer's instructions. Hoisting grips will be used at a
minimum of two-hundred and fifty (250) feet vertical intervals.
F. Grounding cable 7/8" diameter or less will enter the building through
the strike plate.
G. All cable and waveguides will be grounded to the Tower at the point
where the run effectively breaks from the Tower for the run to the
antenna. Grounding hardware will be clamps or other hardware
specifically manufactured for the application.
H. All cable and waveguides will be grounded on the vertical run, just
above the transition from a vertical tower to a horizontal bridge run.
Grounding hardware will be clamps or other hardware specifically
manufactured for the application.
I. A grounding plate (buss bar) must be provided on the exterior of each
equipment shelter or cabinet, near the entry ports for the purpose of
terminating ground leads from the cables and waveguides. Grounding
hardware will be clamps or other hardware specifically manufactured for
the application.
J. On installations where the vertical tower length exceeds two-hundred
(200) feet, it is recommended that the run be grounded at equally
spaced intermediate points along the entire length of the run.
K. Cable and waveguide grounding leads will connect to a separate point
for each run to the common ground point.
L. Grounding straps will be kept to a minimum length and as near as
possible to the vertical down lead. Straps will be consistent with the
restraints of protective dress and access.
M. Each rack will be properly sized, insulated ground lead from the rack
safety and signal grounds to a grounding point on the ground plate.
N. The insulated ground lead must follow the cable tray routing and must
be located in the tray.
O. Each rack will be separately grounded.
XV. ELECTRICAL
A. Polarized electrical outlets must be installed for all transmitters
when possible.
B. Surge protection will be provided for all base stations.
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<PAGE>
XVI. ELECTRICAL DISTRIBUTION
A. All electrical wiring from the distribution breaker panel will be via
rigid metal conduit, routed along the under side of the cable tray to a
point directly above the equipment rack.
B. TRITEL may select how to distribute wiring from the point above the
equipment rack to its equipment or equipment rack.
XVII. TEMPORARY LOADS
A. Test equipment, soldering irons or other equipment serving a test or
repair function will be used if the total load connected to any single
or duplex receptacle does not exceed fifteen (15) amps.
B. Test equipment to be used in place for more than seven (7) days will
require approval by CROWN prior to placement, unless otherwise noted in
the Tower License.
XVIII. DOORS
A. Equipment shelter doors will be kept closed at all times unless being
used for moving equipment.
XIX. SITE APPEARANCE
A. TRITEL will be required to remove all trash, dirt, debris and other
materials which it places upon the Site from the site.
B. No food or drink will be permitted in any equipment shelter.
C. No smoking is permitted at the Site.
D. Doorways, vestibules and other areas in and around the Site will not be
obstructed or used by TRITEL for any purpose other than the intended
purpose.
E. TRITEL's installation must be maintained in a neat and orderly manner.
XX. STORAGE
A. No equipment parts or materials will be stored on site by TRITEL.
XXI. REPORTING ON SITE
A. Emergency twenty-four (24) hour contact number(s) must be displayed on
the outside of TRITEL's equipment cabinets or TRITEL's building.
B. Routine service calls will be scheduled between the hours of 8:00 a.m.
and 5:00 p.m. weekdays.
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<PAGE>
C. Personnel must utilize access cards to prevent activation of the alarm
system when entering an equipment shelter. When exiting the equipment
shelter, the security system must be re-armed.
TRITEL will comply with these Site Standards requirements for the security of
the site; however, in the event that such Site Standards differ from the
provisions of the Agreement or the SLA, then the conditions detailed in the
Agreement or the SLA shall control.
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<PAGE>
EXHIBIT "D"
FORM SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
THIS SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT is made as
of _____________________, 1999, by and among KEY CORPORATE CAPITAL INC., as
agent (the "Agent") for itself and the other FINANCIAL INSTITUTIONS listed on
the signature pages of the Loan Agreement (as defined below), and their
successors and assigns, TRITEL COMMUNICATIONS, INC., a Delaware corporation
(hereinafter referred to as "Tenant"), and CROWN COMMUNICATION INC., a Delaware
corporation (hereinafter referred to as "Landlord"). The Agent and such other
financial institutions may be referred to hereinafter individually as a "Bank"
or collectively as the "Banks."
RECITALS
A. Landlord and Tenant are parties to that certain Master Build to Suit
Services and License Agreement, dated as of __________, 1999, (the "Build to
Suit Agreement"), pursuant to which Landlord will build certain communications
towers for Tenant and its affiliates, and Tenant and its affiliates will lease
space on such towers from Landlord pursuant to the terms of site leases, the
form of which lease is attached as an Exhibit to the Build to Suit Agreement
(hereinafter referred to collectively as the "Leases"). The premises that are or
at any time hereafter become subject to a Lease may be hereinafter referred to
collectively as the "Premises".
B. Landlord, Agent and the Banks which are a party thereto have entered
into a Loan Agreement dated as of July 10, 1998 (as the same may be amended,
restated, modified or extended, the "Loan Agreement"), which is hereby
incorporated herein by this reference, pursuant to which the Banks have agreed
to make available to the Borrower up to $100,000,000 on a revolving credit
basis, which is guaranteed by all of Landlord's subsidiaries pursuant to the
Subsidiary Guaranty and secured by among other things, certain Security
Agreements and certain Mortgages (hereinafter referred to as the "Collateral
Documents"). Capitalized terms used herein and not otherwise defined herein
shall have the meanings ascribed to them in the Loan Agreement.
C. Tenant has agreed that the Leases shall be subject and subordinate
to the Collateral Documents held by Lender, provided Tenant is assured of
continued occupancy of the Premises under the terms of the Leases, so long as it
is not in default thereunder.
D. A portion of the proceeds of the Loans will be used by Landlord to
construct Towers pursuant to the Build to Suit Agreement.
E. It is a condition precedent to the extensions of credit to Landlord
under the Loan Agreement that Landlord and Tenant, among other things, shall
have executed and delivered this Agreement.
<PAGE>
AGREEMENTS
In consideration of the foregoing recitals and the mutual covenants
herein contained, the sum of $10.00 and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, and
notwithstanding anything in the Build to Suit Agreement or any Lease to the
contrary, the parties, intending to be legally bound, agree as follows:
1. Agent, Tenant and Landlord do hereby covenant and agree that the
Build to Suit Agreement and the Leases, with all rights, options, liens and
charges created thereby, are and shall continue to be subject and subordinate in
all respects to the Collateral Documents and to any renewals, modifications,
consolidations, replacements and extensions thereof and to all advancements made
thereunder.
2. Agent does hereby agree with Tenant that, in the event Agent becomes
the landlord under any Lease or the owner of any of the Premises by foreclosure,
conveyance in lieu of foreclosure or otherwise, so long as Tenant complies with
and performs its obligations under the applicable Lease, (a) Agent will take no
action which will interfere with or disturb Tenant's possession or use of such
Premises or other rights under such Lease, and (b) such Premises shall be
subject to such Lease and Agent shall recognize Tenant as the tenant of such
Premises for the remainder of the term of such Lease (including renewal options)
in accordance with the provisions thereof; provided, however, that (i) Agent
shall not be subject to any offsets or defenses which Tenant might have against
Landlord or any prior landlord except those which arose under the provisions of
such Lease out of such landlord's default and accrued after Tenant had notified
Agent and given Agent the opportunity to cure same as hereinbelow provided, (ii)
Agent shall not be liable for any act or omission of Landlord or any prior
landlord, (iii) Agent shall not be bound by any rent or additional rent which
Tenant might have paid for more than the current month to Landlord or any prior
landlord, and (iv) Agent shall not be bound by any amendment or modification of
such Lease made without its consent.
3. Tenant does hereby agree with Agent that, in the event Agent or its
assignee or nominee becomes the landlord under any Lease or the owner of any of
the Premises by foreclosure, conveyance in lieu of foreclosure or otherwise,
then Tenant shall attorn to and recognize Agent (or its assignee or nominee) as
the landlord under the applicable Lease for the remainder of the term thereof
(including renewal options), and Tenant shall perform and observe its
obligations thereunder, subject only to the terms and conditions of such Lease.
Tenant further covenants and agrees to execute and deliver upon request of
Agent, or its assignee or nominee, an appropriate agreement of attornment to
Agent or its assignee or nominee and any subsequent titleholder of such
Premises. Such attornment, however, is contingent upon Agent meeting the
assignment requirements of the Build to Suit Agreement and the Leases, i.e., in
all cases, to the extent that Agent has "adequate industry experience" and such
Agent has a minimum Net Worth of Seventeen Million and Five Hundred Thousand
Dollars ($17,500,000), then the attornment shall be effectuated. "Adequate
industry experience" means a minimum of five (5) years experience owning and
managing wireless communication towers either at the level of the company or its
principal managers with multiple collocated carriers and a demonstrated record
of material compliance with all laws and regulations, federal, state and local,
and conformance to reasonable industry standards.
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4. So long as the Commitment or any of the Obligations under the Loan
Agreement or any of the Collateral Documents remains outstanding and
unsatisfied, Tenant will mail or deliver to Agent, at the address and in the
manner hereinbelow provided, a copy of all notices permitted or required to be
given to Landlord by Tenant under and pursuant to the terms and provisions of
any Lease. At any time before the rights of Landlord shall have been forfeited
or adversely affected because of any default of Landlord, or within the time
permitted Landlord for curing any default under any Lease as therein provided
(but not less than thirty days from the receipt of notice in the case of a
non-monetary default and ten (10) days in the case of a monetary default), Agent
may, but shall have no obligation to, pay any taxes and assessments, make any
repairs and improvements, make any deposits or do any other act or thing
required of Landlord by the terms of such Lease; and all payments so made and
all things so done and performed by Agent shall be as effective to prevent the
rights of Landlord from being forfeited or adversely affected because of any
default under such Lease as the same would have been if done and performed by
Landlord. Nothing contained herein shall be construed as an obligation of Agent
to cure such default. Furthermore, nothing contained herein or in any Lease
shall create any express or implied obligation on the part of Agent to perform
any construction of "improvements" under any Lease in the event of default by
Landlord or in the event Agent acquires the Premises by foreclosure or deed in
lieu of foreclosure.
5. Tenant acknowledges that Landlord will grant a security interest to
Agent in the Build to Suit Agreement and the Leases, and in all rents, payments
and other proceeds thereof, as security for the Obligations and the Loans, and
Tenant hereby expressly consents to such grant and security interest and to any
subsequent assignment or transfer by Agent pursuant to the Collateral Documents
following the occurrence and during the continuance of an Event of Default. Such
consent to assignment or transfer, however, is contingent upon such assignment
or transfer being in accordance with the terms of the Build to Suit Agreement
and the Leases.
6. If any Lease contains a right of first refusal, right of first offer
or similar right in favor of Tenant in respect of any transfer of any of the
Premises subject to such Lease, Agent agrees that any assignment or transfer by
Agent pursuant to the Collateral Documents following the occurrence and during
the continuance of an Event of Default shall be subject to any such right.
7. Tenant acknowledges and agrees that the security interests granted
by Landlord to Agent under the Collateral Documents is granted to Agent solely
as security for the Obligations, and Agent shall have no duty, liability or
obligation under the Build to Suit Agreement or any Lease or any extension or
renewal thereof, unless Agent shall specifically undertake such liability in
writing or Agent becomes the successor landlord under such Lease.
8. Landlord and Tenant hereby certify to Agent that the Leases have
been duly executed by Landlord and Tenant and are in full force and effect; that
the Leases and any modifications and amendments specified herein are a complete
statement of the agreement between Landlord and Tenant with respect to the
leasing of the Premises, and the Leases have not been modified or amended except
as specified herein or therein; that to the knowledge of Landlord and Tenant, no
party to any Lease is in default thereunder; that no rent under any Lease has
been paid more than thirty days in advance of its due date; and that Tenant, as
of this date,
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has no charge, lien or claim of offset under any Lease, or otherwise, against
the rents or other charges due or to become due thereunder.
9. Unless and except as otherwise specifically provided herein, any and
all notices, elections, approvals, consents, demands, requests and responses
thereto ("Communications") permitted or required to be given under this
Agreement shall be in writing, signed by or on behalf of the party giving the
same, and shall be deemed to have been properly given and shall be effective
upon the earlier of receipt thereof or deposit thereof in the United States
mail, postage prepaid, certified with return receipt requested, to the other
party at the address of such other party set forth hereinbelow or at such other
address within the continental United States as such other party may designate
by notice specifically designated as a notice of change of address and given in
accordance herewith; provided, however, that the time period in which a response
to any Communication must be given shall commence on the date of receipt
thereof; and provided, further, that no notice of change of address shall be
effective with respect to Communications sent prior to the time of receipt
thereof. Receipt of Communications hereunder shall occur upon actual delivery
whether by mail, telecopy transmission, messenger, courier service, or
otherwise) to an individual party or to an officer or general or limited partner
of a party or to any agent or employee of such party at the address of such
party set forth hereinbelow, subject to change as provided hereinabove. An
attempted delivery in accordance with the foregoing, acceptance of which is
refused or rejected, shall be deemed to be and shall constitute receipt; and an
attempted delivery in accordance with the foregoing by mail, messenger or
courier service (whichever is chosen by the sender) which is not completed
because of changed address of which no notice was received by the sender in
accordance with this provision prior to the sending of the Communication shall
also be deemed to be and constitute receipt. Any Communication, if given to
Agent, must be addressed as follows, subject to change as provided hereinabove:
if given to Agent, to:
Key Corporate Capital Inc.
127 Public Square
Cleveland, Ohio 44114-1306
Attn: Media and Telecommunications Finance Division
Telecopy: 216-689-4666
With a copy (which shall not constitute notice) to:
Timothy J. Kelley, Esq.
Dow, Lohnes & Albertson, PLLC
1200 New Hampshire Avenue, N.W., Suite 800
Washington, D.C. 20036
Telecopy: 202-776-2222
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if given to Tenant, to:
Tritel Communications, Inc.
112 East State Street, Suite B
Ridgeland, Mississippi 39157
Attn: Kenneth Harris
Telecopy: 601-898-6216
and, if given to Landlord, to:
Crown Communication Inc.
375 Southpointe Blvd.
Canonsburg, Pennsylvania 15317
Attn: General Counsel
Telecopy: 724-416-2468
with a copy to (which shall not constitute notice) to:
Crown Castle International Corp.
510 Bering Drive, Suite 500
Houston, TX 77057
Attn: Chief Financial Officer and General Counsel
Telecopy: 713-570-3150
10. This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns. When used
herein, the term "landlord" refers to Landlord and to any successor to the
interest of Landlord under any Lease.
11. This Agreement shall be governed by and construed in accordance
with the laws of the state where the Premises are located without regard to the
conflicts of law provisions thereof.
12. The parties acknowledge that the Leases and any supplements thereto
may be signed by affiliates of Tenant as well as by Tenant. Tenant is executing
this Agreement on behalf of itself and all of its affiliates. Any reference
herein to Tenant shall also, to the extent required or permitted by the context,
be deemed to be a reference to Tenant's affiliates.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal as of the date first above written.
LANDLORD:
Signed, sealed and delivered in the
presence of: CROWN COMMUNICATION INC.
By:
- ----------------------------------- -----------------------------------
Unofficial Witness Name:
---------------------------------
Title:
--------------------------------
[CORPORATE SEAL]
- -----------------------------------
Notary Public
Commission Expiration Date:
- -----------------------------------
(NOTARIAL SEAL)
AGENT:
Signed, sealed and delivered in the
presence of: KEY CORPORATE CAPITAL INC
By:
- ----------------------------------- -----------------------------------
Unofficial Witness Name:
---------------------------------
Title:
--------------------------------
[CORPORATE SEAL]
- -----------------------------------
Notary Public
Commission Expiration Date:
- -----------------------------------
(NOTARIAL SEAL)
<PAGE>
TENANT:
Signed, sealed and delivered in the
presence of: TRITEL COMMUNICATIONS, INC.
By:
- ----------------------------------- -----------------------------------
Unofficial Witness Name:
---------------------------------
Title:
--------------------------------
[CORPORATE SEAL]
- -----------------------------------
Notary Public
Commission Expiration Date:
- -----------------------------------
(NOTARIAL SEAL)
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EXHIBIT "E"
NOTICE OF COMPLETION
NOTICE OF COMPLETION OF TOWER FACILITIES
Carrier
- --------------------
- --------------------
- -------------------- ---------
Re: Notice of Completion of Tower Facilities ("Notice") for
Site #_____ ("___________ Site")
Dear _______________:
On the _____ day of ____________, ____ the Tower Facilities at the
__________ Site were completed in accordance with the terms and conditions of
the Master License between CROWN and TRITEL. Pursuant to Paragraph ___ of the
Master License, TRITEL has a period of fifteen (15) days after the date of this
Notice of Completion to provide a Punch List of items to be completed by CROWN
in order to render the Tower Facilities completed in accordance with the Plans
and Specifications in the opinion of TRITEL.
Sincerely,
--------------------------------
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<PAGE>
EXHIBIT "F" TO THE MASTER LICENSE AGREEMENT
STATEMENT OF WORK FOR SITE DEVELOPMENT SERVICES
CROWN will perform the following tasks to complete construction and installation
processes in the development of a Site and the construction and installation of
the TRITEL Equipment as required at each Site, which shall include, without
limitation, the installation of all antennas and equipment, all cabling,
conduit, utilities and the grounding system, ("Site Development Services"), but
shall exclude the setting, placement and installation of any cabinet shelter.
These tasks will be performed for the Site Development Services Fee stated in
the Agreement.
1. Project and Construction Management - Civil construction activities shall
include project management (scheduling, cost tracking and reporting,
expediting, resource allocation) and construction management (subcontractor
qualification, bidding/bid walk/bid review and award, on-site construction
supervision and punch list resolution). CROWN will assign a Project Manager
to work with TRITEL throughout the Site Development Process. Said Manager
will be responsible for the coordination, scheduling, tracking and reporting
of all development tasks CROWN is performing for TRITEL at all Sites, and
will work closely with appropriate TRITEL personnel to ensure the timely
quality implementation of TRITEL's requirements at the Sites.
2. Equipment Pad Installation - CROWN will install, per TRITEL's
specifications, up to a 10' x 20' concrete equipment pad inside the Site
compound area.
3. Powerand Telephone Utilities Installation - CROWN will install two (2) PVC
underground conduits with pull strings from the Site's common power and
telephone utility points of demarcation to a designated equipment pad on the
ground. As further described in the Agreement at Section II.T, TRITEL will
separately meter its electric utility service. TRITEL will be responsible
for placing service orders with the electric and telephone service providers
at the Site. CROWN will coordinate the utility site walk with the utility
companies. CROWN will obtain all easements and/or right-of-ways needed for
the provision of utility service to TRITEL.
4. Antenna System Installation - TRITEL will provide its antennas, coaxial
cable, jumpers, amplifiers and lightning suppressors and connectors at
TRITEL's sole cost and expense. CROWN will provide all other materials which
are necessary for the installation of the TRITEL Equipment upon the Tower
Facilities and the Tower Site as contemplated under this Exhibit "F"
(excluding the placement of the cabinet and any generators), including
without limitation, antenna mounting brackets/frames, coax hangers/brackets
and clamps and waveguide/ice bridge materials. CROWN will install all
TRITEL-provided antenna system materials and up to 10' of Ice Bridge. CROWN
will sweep the installed antenna systems to TRITEL's specifications and
provide the sweep data to TRITEL. The Site shall be considered to be in
service by TRITEL as of the date of issuance of the sweep data report, but
the TRITEL Equipment installation shall not be considered accepted until
TRITEL accepts the TRITEL Equipment installation pursuant to III.G. of the
Agreement.
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5. Grounding System - CROWN will install a buried ring ground around TRITEL's
equipment pad or foundation, connect this ring to the main site ground and
provide a stub to connect to TRITEL's main grounding bus bar (or similar
connection). CROWN will also connect the tower-mounted coax grounding kits
to a grounding bus connected to the primary site grounding system. TRITEL
will make the final connection of the ground ring stub and the final coax
grounding kit connections to their main equipment ground bus at the time of
their electronics equipment installation. Ground ring connections will be
cadwelded while coax grounding kit connections will be mechanical. Single
point grounding must be maintained to ensure the integrity of the overall
site ground.
6. As-Built Drawings - CROWN will provide as-built drawings to TRITEL of each
Site which detail all pertinent information relating to TRITEL's equipment
and antenna system at the Site and shall substantially conform to the
specifications supplied by TRITEL.
7. Materials Handling and Delivery - TRITEL will ship all of their coax,
connectors, and antennas to a warehouse location designated by CROWN and
CROWN will provide and deliver to TRITEL a detailed receipt of all such
deliveries. CROWN will offload, inventory, store and deliver these materials
to the Site as needed. TRITEL will retain responsibility for the storage,
delivery, offloading and installation of their electronics cabinet(s) or
frames. If TRITEL would prefer that CROWN take delivery of their
electronics, store and deliver electronics to the Site, and offload and
install the cabinet(s), written notice must be delivered to CROWN requesting
same at a Site so designated and TRITEL agrees that additional charges will
be incurred, to be determined by the mutual consent of the parties.
8. Commencement of Service - CROWN shall commence the Site Development
Services, pursuant to this Agreement, promptly upon the commencement date
set forth in the Notice to Proceed and shall prosecute the Site Development
Services on each Site diligently to completion. CROWN shall not perform any
of the Site Development Services or make any financial commitments until
receiving the Notice to Proceed. The performance of any portion of the Site
Development Services or preparation to perform any of the Site Development
Services by CROWN, prior to receiving the Notice to Proceed, is done at
CROWN's own risk.
9. Punch List & Acceptance - Upon final completion of the Site Development
Services at each Site by CROWN in accordance with the provisions of this
Agreement, the parties shall following the requirements detailed in Section
III.G. of the Agreement, Notification of Completion.
10. Change Order - If materials, equipment or labor are required in response to
a request of TRITEL to alter the Site or expand the Site Development
Services (i.e., a "Change Order"), such Change Order is not within the Site
Development Services covered by the fees identified in this Agreement, CROWN
may, at its discretion, supply such materials, equipment or labor itself or
obtain them from independent contractors, provided that the delegation of
such services do not substantially delegate all of CROWN's obligations under
this Agreement. If CROWN supplies any materials, equipment or labor in
addition to the scope of work provided herein, it shall be based on CROWN's
published rates as set forth on the attached schedule. In the event that the
materials, supplies or equipment are not identified
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<PAGE>
upon that schedule, CROWN and TRITEL shall mutually approve a reasonable
rate which shall be no more than the prevailing rate in the industry.
11. Representations - Notwithstanding any other provision contained in the
Agreement, the following terms and conditions shall apply with respect to
the materials, equipment and services provided hereunder:
a) CROWN, its agents, subcontractors, and employees shall perform the
Site Development Services as independent contractors, and not as
agents, partners, joint venturers or employees of TRITEL. CROWN
shall supervise and direct the Site Development Services, using
the care and skill ordinarily used by members of CROWN's
profession practicing under similar conditions at the same time
and in the same geographic area, and CROWN shall be solely
responsible for all construction means, methods, techniques,
sequences and procedures and for coordinating all portions of the
Site Development Services.
b) Unless otherwise specifically provided in the Site Development
Services, CROWN shall provide and pay for all labor, supervision,
materials, construction surveys and layout, equipment, tools,
construction equipment and machinery, water, heat, utilities,
transportation, and other facilities and services necessary for
the proper execution and completion of the Site consistent with
the terms of this exhibit and the Agreement.
c) CROWN shall at all times enforce strict discipline and good order
among its employees.
d) CROWN hereby represents and warrants to TRITEL that all materials
and equipment incorporated in the Site will be new unless
otherwise requested in writing by CROWN and agreed to in writing
by TRITEL prior to their use and all such materials and equipment
shall be of good quality. CROWN further represents and warrants
that the Site Development Services to be performed under this
Agreement, and all workmanship, materials and equipment provided,
furnished, used or installed in construction of the same, shall be
safe, substantial, good quality and durable construction in all
respects, and that all of the Site Development Services will be
free from faults and defects and in conformance with the terms of
this Agreement. The warranty for the services provided by CROWN at
each Site shall be for a period of twelve (12) months from the
date of full acceptance of the Site by TRITEL (the "Warranty
Period"). CROWN represents, warrants and agrees that the TRITEL
Equipment (excluding the cabinet installation) shall be
constructed and installed in a good and workmanlike manner and in
accordance with the plans and specifications for the installation
of the TRITEL Equipment and all applicable federal, state and
local laws, ordinances, rules and regulations and shall be of good
quality, free from faults and patent defects.
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<PAGE>
e) CROWN agrees to correct any defective portion of the Site or the
TRITEL Premises including all materials and equipment which
arises, accrues or occurs during the Warranty Period; provided
that materials supplied by TRITEL which are installed and tested
by CROWN and accepted by TRITEL and such materials (and not the
installation thereof) are thereafter found to be defective, shall
be replaced by CROWN at the expense of TRITEL in accordance with
CROWN's published rates as set forth the attached schedule. If
CROWN fails, after ten (10) days following written notice from
TRITEL: (i) to commence and continue correction of such defective
Site Development Services with diligence and promptness; (ii) to
perform the Site Development Services; or (iii) to comply with any
other provision of this Agreement, TRITEL may correct and remedy
any such deficiency in addition to any other remedies it may have.
CROWN shall not be responsible for reasonable delays caused by
inclement weather that would delay a reasonable contractor's
performance of Site Development Services substantially similar to
the Site Development Services set forth herein.
f) CROWN shall supervise and direct the work performed on the TRITEL
Equipment, excluding the installation of the cabinet, (the "TRITEL
Work"), using CROWN's best skill and attention. CROWN shall be
solely responsible for and have control over construction means,
methods, techniques, sequences and procedures and for coordinating
all portions of the TRITEL Work on the Tower Facilities under this
Agreement.
g) CROWN shall enforce strict discipline and good order among the
employees and other persons carrying out this Agreement. CROWN
shall not permit employment of unfit persons or persons not
skilled in tasks assigned to them.
h) CROWN shall provide TRITEL (and its employees, agents and
contractors) access to the TRITEL Work in preparation and progress
wherever located, provided that such access shall not interfere
with the TRITEL Work.
i) CROWN shall pay all royalties and license fees, shall defend suits
or claims for infringement of patent rights, and shall hold TRITEL
harmless from loss on account thereof, but shall not be
responsible for such defense or loss when a particular design,
process or product of a particular manufacturer or manufacturers
is required by TRITEL unless CROWN has reason to believe that
there is an infringement of patent.
j) CROWN shall be responsible for initiating, maintaining and
supervising all safety precautions and programs in connection with
the performance of the Agreement. CROWN shall take reasonable
precautions for safety of, and shall provide reasonable protection
to prevent damage, injury or loss to:
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(1) employees on the TRITEL Work, the Tower Facilities or the
Site and other persons who may be affected thereby;
(2) the TRITEL Work, the Tower Facilities, the Site and materials
and equipment to be incorporated therein; and
(3) other property at the Site or adjacent thereto.
12. Trade and Construction Permits - CROWN shall obtain, at its expense, all
necessary local and municipal permits, licenses, inspections, certificates
and approvals necessary to complete the Site Development Services, and shall
ensure compliance with all state environmental laws. CROWN shall pay all
fees for such permits, licenses, inspections, certificates or approvals to
the appropriate government body or other entity.
13. CROWN shall be responsible for and install all of the TRITEL Equipment
(excluding the cabinet, any generator and other equipment which is not
contemplated under this Exhibit "F") upon the Tower and the Site. For each
installation, TRITEL shall pay a fee as defined and described below and
shall complete the construction and installation of the TRITEL Equipment and
the Tower Facilities in the time periods described in Exhibit "C".
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SCHEDULE TO EXHIBIT "F"
CROWN DEVELOPMENT SERVICES
Any additional services performed by CROWN or its agents shall be
subject to the following hourly rates upon prior written approval by TRITEL for
the incurring of the specific additional service:
CLASSIFICATIONS RATES
- --------------- -----
Site Researcher [CONFIDENTIAL TREATMENT REQUESTED]
Project Manager [CONFIDENTIAL TREATMENT REQUESTED]
Draftsman [CONFIDENTIAL TREATMENT REQUESTED]
Tower Rigger [CONFIDENTIAL TREATMENT REQUESTED]
Skilled Laborer [CONFIDENTIAL TREATMENT REQUESTED]
Technician [CONFIDENTIAL TREATMENT REQUESTED]
Office Clerical [CONFIDENTIAL TREATMENT REQUESTED]
Electrician [CONFIDENTIAL TREATMENT REQUESTED]
All hourly rates above do not include reasonable travel and lodging
expenses and shall be invoiced by the quarter-hour.
EQUIPMENT RATES
- --------- -----
580 Backhoe [CONFIDENTIAL TREATMENT REQUESTED]
Equipment Truck/Class 1 (daily) [CONFIDENTIAL TREATMENT REQUESTED]
Mileage Charge [CONFIDENTIAL TREATMENT REQUESTED]
Equipment Truck/Class 2 (daily) [CONFIDENTIAL TREATMENT REQUESTED]
Mileage Charge [CONFIDENTIAL TREATMENT REQUESTED]
18 Ton Truck Crane [CONFIDENTIAL TREATMENT REQUESTED]
/hour (minimum 4 hours)
28 Ton Truck Crane [CONFIDENTIAL TREATMENT REQUESTED]
/hour (minimum 4 hours)
Tractor Trailer with 40 Ton Lowboy [CONFIDENTIAL TREATMENT REQUESTED]
Tractor Dump Trailer [CONFIDENTIAL TREATMENT REQUESTED]
Single Axle Dump Truck [CONFIDENTIAL TREATMENT REQUESTED]
977L High Lift [CONFIDENTIAL TREATMENT REQUESTED]
D4 Dozer [CONFIDENTIAL TREATMENT REQUESTED]
Uniloader [CONFIDENTIAL TREATMENT REQUESTED]
Vibratory Roller [CONFIDENTIAL TREATMENT REQUESTED]
Operator Overtime [CONFIDENTIAL TREATMENT REQUESTED]
Quickie Saw (daily) [CONFIDENTIAL TREATMENT REQUESTED]
Tamper (daily) [CONFIDENTIAL TREATMENT REQUESTED]
Chain Saw (daily) [CONFIDENTIAL TREATMENT REQUESTED]
Portable Generator (daily) [CONFIDENTIAL TREATMENT REQUESTED]
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EXHIBIT "G"
ESTOPPEL CERTIFICATE
THIS INSTRUMENT is given as of this ____ day of _________________, ___,
by _________________________ ("Lessor") to _______________________________, a
_____________________ corporation ("Assignee").
RECITALS
Lessor entered into a Lease Agreement or similar agreement with
________ (___) numbers of addenda attached thereto, (collectively, the "Prime
Lease") dated as of the ____ day of __________, ____ with Tritel Communications,
Inc., a Delaware corporation ("Lessee").
Lessee desires to assign to Assignee its interest in the Prime Lease.
Assignee seeks Lessor's acknowledgment, as of the date of execution of
this Instrument, of certain matters affecting the Prime Lease.
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, intending to be legally bound:
1. Lessor's Estoppel Certificate. Lessor hereby certifies, with the
understanding that Assignee is relying upon the statements made herein, the
following:
a. The Prime Lease with ______ number of addenda constitutes the entire
agreement between the parties with respect to the Premises. The Prime Lease has
not been amended and there are no other agreements between Lessor and Lessee
with respect to the property or the easements which are described in the Prime
Lease.
b. The Prime Lease is in full force and effect in accordance with its
terms. To the best of Lessor's knowledge, neither Lessee nor Lessor is in
default under any of the terms of the Prime Lease, and Lessor has not received
actual or constructive notice of the existence of any event which, with the
passage of time or the giving of notice or both, would constitute a default
under the Prime Lease.
c. All applicable Prime Lease fees and rent (if any) and other charges
and payments due Lessor from Lessee under the Prime Lease have been paid in full
through the date hereof (except reimbursements for real estate taxes, insurance,
utilities or other reimbursements, if any, due for fiscal periods to the extent
not yet payable).
2. Consent. Lessor hereby expressly consents and agrees to the
assignment and assumption of the Prime Lease set forth in the Assignment and
hereby releases Lessee from any and all liabilities and obligations under the
Prime Lease. Lessor agrees to solely hole Lessee responsible for performance of
all obligations of the lessee under the Prime Lese from, and after the date of
this Assignment, except liabilities and obligations arising out of Lessee's
failure to
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perform and discharge any of the terms, covenants, conditions and agreements as
the lessee under the Prime Lease prior to the date hereof, or other acts or
conduct prior to the date hereof for which the lessee or tenant is responsible
under the terms of the Prime Lease for which Lessor will look solely to Lessee
and shall not, at any time hereafter, require Lessee to perform any obligations
thereunder, unless the Prime lease is reassigned to Lessee upon default of
Assignee as provided herein.
3. Agreement of Parties. Assignor, Assignee and Lessor hereby expressly
agree as follows:
A. Assignor is the current holder of a tenant's interest in the Lease
Agreement, and Lessor is the current holder of Lessor's interest
in the Lease Agreement.
B. The Lease Agreement is in full force and effect, and Lessor hereby
ratifies and confirms same.
C. A true and correct cop of the Lease Agreement and all amendments,
if any, is attached hereto as Exhibit "A" and incorporated herein
by reference. The Lease Agreement, and all amendments, if any,
constitute the entire agreement between Lessor, Assignor and
Assignee with respect to the Leased Premises. There are no present
outstanding defaults pursuant to the terms and provisions of the
Lease Agreement by either Lessor or Assignor, and no party has
knowledge of any facts which, with the giving of notice, passage
of time, or both would constitute a default by any party under the
Lease Agreement.
D. To Lessor's knowledge, all conditions or obligations under the
Lease Agreement required to be satisfied or performed by Assignor
as of the date hereof have been satisfied or performed, and to
Assignor's knowledge, all conditions or obligations under the
Lease Agreement required to be satisfied or performed by Lessor as
of the date hereof have been satisfied or performed.
E. The current rent (the "Rent") being paid by Assignor to Lessor
under the Lease Agreement is AMOUNT OF RENT ($_________) per year,
paid [IN EQUAL MONTHLY INSTALLMENTS/IN AN ANNUAL LUMP SUM/IN EQUAL
INSTALLMENTS ON A QUARTERLY BASIS], and the Rent has been paid
through and including OBLIGATION DATE ("Obligation Date").
Assignee's obligation to pay Rent under this Assignment shall
begin on the first day after the Obligation Date, and Assignor's
obligation to pay Rent shall end thereon.
F. The term of the Lease Agreement expires on EXPIRATION DATE, and
there are RENEWAL TERMS (the "Renewal Terms").
G. Rent is to be increased at the beginning of any applicable Renewal
Term (as defined in the Lease Agreement) by INCREASE AMOUNT.
In the event of any dispute hereunder, or of any action to interpret or enforce
this Estoppel Certificate, any provision hereof or any matter arising herefrom,
the prevailing party shall be entitled to recover its reasonable costs, fees and
expenses, including, but not limited to, witness
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fees, expert fees, attorney (in-house and outside counsel), paralegal and legal
assistant fees, costs and expenses, and other professional fees, costs and
expenses, whether suit be brought or not, and whether in settlement, in any
declaratory action, in any bankruptcy action, at trial or on appeal.
4. Release. Lessor, with the intention of binding itself and its
successors and assignees, expressly forever releases and discharges Lessee and
its successors and assigns from all claims, demands, actions, grievances,
controversies, contracts, promises, agreements, causes of action, in both law
and equity, judgments and executions, damages of whatever nature, past or
present, known and unknown, that it ever had, or now has, known or unknown, or
that anyone claiming through or under Lessor may now have or claim to have,
against Lessee which arise from the Prime Lease, but no further or otherwise.
5. Reliance. Lessor understands that Assignee and Lessee are relying on
the information contained in this Instrument, and agrees that Assignee and
Lessee may rely on this information, for purposes of determining whether to
consummate their transaction. Further, Assignee's and Lessee's subsidiaries,
affiliates, legal representatives and successor and assigns may rely on the
contents of this Instrument. A facsimile of this instrument delivered to
Assignee by telecopier shall be deemed an original for all purposes.
6. Notice; Non-Disturbance. Assignee intends to grant a sub-leasehold
interest to Lessee pursuant to a sublease dated the ____ day of ________, ____
(the "Sublease"). Lessor shall give notice to Lessee at the same time that
Lessor gives notice to Assignee of any default under the Prime Lease, and Lessor
shall accept a cure of any such default from Lessee on Assignee's behalf. In
such case, Lessee shall be entitled to reimbursement from Assignee of any amount
paid or obligation incurred in respect thereof. So long as the Lessee is not in
default under the Sublease beyond any applicable grace or cure period, Lessee
shall be permitted quiet enjoyment of the Premises under the Sublease
notwithstanding any termination or expiration of the Prime Lease and
notwithstanding any termination or expiration of the Prime Lease, Lessor agrees
at the request of the Lessee, to honor the terms and conditions of the Sublease
for the remainder of the term thereof and any renewal terms. Lessee agrees, at
the request of Lessor to attorn to the Lessor upon the terms and conditions of
the Sublease for the remainder of the term thereof (whether original or renewal)
and any renewal terms, and that the Sublease shall continue in full force and
effect as if the Lessor were the sublandlord under the Sublease notwithstanding
the expiration or termination of the Prime Lease.
7. Notices. Any Notices to be received by Assignee, Lessee or Lessor
under the Prime Lease, the Sublease, or this Estoppel Certificate shall be
deemed properly given if marked to Assignee, Lessor or Lessee with proper
postage or sent via a reputable overnight carrier to the following address:
To Assignee:
---------------------------------
---------------------------------
---------------------------------
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With a copy to:
TO LESSEE: Tritel Communications, Inc.
112 E. State Street
Suite B
Ridgeland, MS 39157
Attention: Ken Harris
TO LESSOR:
---------------------------------
---------------------------------
---------------------------------
Any party shall have the right from time to time to change their respective
address for Notice by providing the other with thirty (30) days prior written
notice in the manner set forth above.
IN WITNESS WHEREOF, Lessor and Assignee have executed this Instrument
as of the date set forth above.
LESSOR:
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
ASSIGNEE:
CROWN COMMUNICATION, INC.
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
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MASTER BUILD TO SUIT AND LEASE AGREEMENT
THIS MASTER BUILD TO SUIT AND LEASE AGREEMENT ("Master Lease" or
"Agreement") is made and entered into by and between TRITEL COMMUNICATIONS,
INC., a Delaware corporation ("Carrier") and SBA TOWERS, INC., a Florida
corporation ("Tower Company").
WHEREAS, Carrier has licenses to provide personal communications
service ("TCS") in the states of Alabama, Florida, Mississippi, Tennessee,
Kentucky and any additional state or markets in which Carrier obtains a license
to provide PCS;
WHEREAS, Carrier requires that in certain instances towers and related
facilities be developed for the installation of antennas, equipment cabinets,
cabling and related equipment;
WHEREAS, Carrier also requires that parcels of real property together
with easements for ingress, egress and utilities to those properties be acquired
for the construction of the towers and related facilities;
WHEREAS, Carrier has acquired or leased parcels of real property for
the operations of a wireless or telecommunications facility;
WHEREAS, Carrier desires to assign to Tower Company certain of those
leases and for Tower Company to construct facilities on the sites;
WHEREAS, Carrier also desires for Tower Company to lease or purchase
designated parcels of property when Carrier has not already leased such
properties to construct towers or structures for the operation of a wireless or
telecommunications facility;
WHEREAS, Carrier desires to lease space on the facilities from Tower
Company when the towers or structures are completed.
NOW THEREFORE, for [CONFIDENTIAL TREATMENT REQUESTED] and other good
and valuable consideration, the legal receipt and sufficiency of which is hereby
mutually acknowledged and agreed to, Carrier and Tower Company do hereby agree
as follows:
I. DEFINITIONS
1.1. DEFINED TERMS. In addition to the terms defined elsewhere in this
Agreement, the following terms shall have the following meaning (such meanings
to be applicable equally to the singular and plural forms of such terms) unless
the context otherwise requires:
"ASSIGNMENT" shall mean the assignment of the Ground Lease from Carrier to Tower
Company.
"CARRIER" shall mean Tritel Communications, Inc.
"CARRIER'S EQUIPMENT" OR "CARRIER EQUIPMENT" shall mean the equipment that may
be installed at the Site by Carrier which shall be described in the Schedule
attached to Attachment "VI" for each Market.
"COMMENCEMENT DATE" shall mean the date when the initial term of each SLA shall
commence and shall be the date which is the later of (i) the date that Tower
Company completes installation of Carrier
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Equipment on the Premises in the event that the Tower Company is installing
Carrier's Equipment on the Premises or (ii) fifteen (15) days after Carrier has
accepted the Tower Facilities pursuant to Paragraph 3.8, or (iii) in the event
that Carrier has not accepted the Tower Facilities pursuant to Paragraph 3.8,
fifteen (15) days after the date that the Tower Facilities are substantially
complete and Carrier is able to operate the Carrier Equipment upon the Tower
Facilities in compliance with all laws, rules and regulations. In the event that
Carrier reasonably disputes Tower Company's assertion that all items on a
Punchlist have been completed and the uncompleted item precludes Carrier's
installation or operation of its equipment, the Commencement Date shall be the
date on which such item has been completed to the reasonable satisfaction of
Carrier.
"EASEMENTS" shall mean any and all easements for access, ingress, egress or
utilities easements obtained or intended to be utilized for the Applicable Tower
Site.
"FAA" shall mean the Federal Aviation Administration.
"FCC" shall mean the Federal Communications Commission.
"GROUND LEASE" shall mean the lease, option or other contract between the owner
of the Property and Tower Company (or Carrier who will assign the lease to Tower
Company) for the property where the Tower Facilities will be located.
"GROUND LESSOR" shall mean the owner of the fee simple interest or other
interest in the entire portion of Property where the Tower Facility is to be
located and the person who has entered into a ground lease with Tower Company
(or Carrier who will assign the lease to Tower Company) for the lease of the
entire Property for the location of a Tower Facility upon the Property.
"HAZARDOUS MATERIALS" shall mean any substance, chemical or waste identified as
hazardous or toxic in any applicable federal, state or local law or regulation
including, without limitation, petroleum or hydrocarbon based fuels such as
diesel, propane or natural gas.
"MASTER LEASE" OR "AGREEMENT" shall mean this Master Build to Suit and Lease
Agreement.
"MARKET" shall mean each market in which Tritel does business and shall be
divided into and include each of the following markets and the term "Market"
shall mean one of the following:
o Knoxville market which encompasses the Knoxville BTA
o Chattanooga market which encompasses the Chattanooga BTAs
o Nashville market which encompasses the Nashville BTAs, but excludes any Sites
located in the State of Kentucky
o Birmingham market which encompasses the Birmingham BTAs
o Huntsville Alabama market which encompasses the Huntsville BTAs
o Mississippi market which encompasses the Memphis and Jackson BTAs
o Kentucky market which encompasses the Louisville, Lexington and Evansville
BTAs and any other Sites located in the State of Kentucky
o Montgomery, Alabama market which encompasses the Montgomery BTA
"MPE" shall mean Maximum Permissible Exposure.
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"PCS" shall mean personal communications service.
"PLANS" shall mean plans for the construction of the Tower Facilities.
"PRE-DEVELOPMENT COSTS" shall mean the cost of developing the Site for the
location, construction and operation of a Tower Facility upon the Site and shall
include without limitation, the cost of the site acquisition. services, phase I
environmental assessments, geotechnical analyses, title reports, title opinions,
title commitments and title insurance, designs, Plans and Specifications,
construction plans, the cost incurred in obtaining grants of easements,
supplies, relevant travel expenses, fees or assessments imposed by local, state
or federal governmental entities, recording fees and filing fees, reasonable
fees of engineers, surveyors, architects, attorneys, brokerage commissions and
others providing professional services.
"PRE-DEVELOPMENT INFORMATION" or "PRE-DEVELOPMENT MATERIALS" shall mean all
items, reports, and matters necessary to complete the development and
construction of the Tower Facilities upon the Applicable Tower Site, including
without limitation (i) zoning permits and approvals, variances, building permits
and such other federal, state or local governmental approvals for the Applicable
Tower Site; (ii) the construction, engineering and architectural drawings and
related site plan and surveys pertaining to the construction of the Tower
Facilities on the Property (iii) the geotechnical report for the Property; (iv)
a title report, commitment for title insurance, ownership and encumbrance
report, title opinion letter, copies of instruments in the chain of title or any
other information which may have been produced regarding the marketability of
title and title to the Property and the easements; and (v) environmental
assessments including phase I reports and a report relating to contemporaneous
or subsequent intrusive testing, the "FCC Checklist" performed pursuant to
National Environmental Protection Act requirements and any other information
which may be necessary to obtain permits and maintain licensing for the
operation of a wireless communications facility upon the Applicable Tower Site.
"PRE-DEVELOPMENT NOTICE" shall mean notice that Tower Company has delivered to
Carrier all of the Pre-Development Information for the Applicable Tower Site.
"PREMISES" shall mean the space occupied by Carrier's Equipment on each Tower
Facility, the ground space adjacent to the Tower Facility where Carrier's
Equipment is located, the Easements and all cabling, conduit, wires and
utilities running to and from the Tower Facility and to and from Carrier's
Equipment for each Applicable Tower Site as defined in each SLA.
"PROPERTY" OR "SITE" shall mean the entire portion of property where the
Applicable Tower Site will be located which property is being leased from Ground
Lessor.
"PUNCH LIST" shall mean a list of items that Carrier deems necessary that Tower
Company complete, fix, alter or correct in order for the Tower Facilities to be
completed in accordance with the Plans and Specifications.
"SPECIFICATIONS" shall mean the specifications for the construction of the Tower
Facilities.
"TOWER COMPANY" shall mean SBA Towers, Inc., a Florida corporation.
Notwithstanding anything to the contrary contained in this Agreement, Tower
Company has the right to delegate certain services and duties under this
Agreement to SBA, Inc. or Communication Site Services, Inc., both of which
corporations are wholly owned by the same corporation that wholly owns Tower
Company, provided that such delegation of duties does not encompass a majority
of or substantial portion of Tower Company's
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duties and obligations under this Agreement and further provided that such
parties agree to comply with and abide by the terms, conditions and provisions
of this Agreement.
"TOWER FACILITIES" shall mean the (i) tower, (ii) foundations, (iii) fenced
compound enclosing the Tower Site, (iv) high capacity telephone service to a
main connection point within the compound, (v) concrete equipment pad for
Carrier's exclusive use, (vi) minimum of 200 amp electrical service to a main
connection point within the compound, (vii) access sufficient for the placement
and routine servicing of tenant antennas and base station equipment, and (viii)
grounding to Carrier's reasonable standards and specifications, to be located
upon the Applicable Tower Site.
II. GRANT OF RIGHTS, ASSIGNMENT AND
ASSUMPTION OF GROUND LEASES, AND SUBLEASING
2.1. (a) GRANT. Carrier grants Tower Company the nonexclusive right to
develop, construct and lease those sites in Carrier Markets which involve the
construction of towers and related facilities ("Tower Sites") upon the terms and
conditions of this Master Lease from the date of this Agreement through December
31, 2000 and any extensions thereto which are mutually agreed upon by Tower
Company and Carrier. Tower Company acknowledges and agrees that the right to
develop, construct and lease the Tower Sites is not an exclusive right and that
Carrier may grant similar rights to other parties.
(b) APPLICATION.
(i) NOTICE. In the event that Carrier identifies a Tower Site or
search ring where it intends to place, develop and construct a tower,
and Carrier intends to grant to Tower Company the right to develop,
construct and lease such Tower Site, Carrier shall give Tower Company
notice of the Tower Site, and such Tower Site shall hereinafter be
referred to as the "Applicable Tower Site".
(A) NOTICE OF SEARCH RING. In the event that Carrier has issued a
search ring for the Applicable Tower Site, but has not obtained a lease,
contract, option or other right to lease the property for the Applicable Tower
Site, Carrier shall notify Tower Company in writing of the parameters of the
search ring for the Applicable Tower Site (the "Search Ring Notice").
(B) NOTICE OF LEASE. In the event that Carrier has obtained a
fully executed option, lease, contract or other right to lease the property for
the Applicable Tower Site, Carrier shall notify Tower Company in writing of and
deliver to Tower Company a complete copy of the lease, option, contract or other
right to lease the property for the Applicable Tower Site (the "Lease Notice").
(C) NOTICE OF BUILDING PERMIT. In the event that Carrier has
obtained a fully executed lease, contract, option or other right to lease
property for an Applicable Tower Site and is preparing to apply for a building
permit for the Applicable Tower Site, Carrier shall notify Tower Company in
writing, at least ten (10) days before the date that Carrier intends to make
application for a building permit for Applicable Tower Site (the "Building
Permit Notice") (the Search Ring Notice, the Lease Notice and the Building
Permit Notice shall be collectively referred to as the "Notice of Applicable
Tower Site").
(D) OBLIGATION TO GIVE NOTICE. Notwithstanding paragraphs
2.1(b)(i)(A), (B) and (C), Carrier shall not be obligated to provide Tower
Company the Notice of Applicable Tower Site until ten (10) days prior to the
date that Carrier intends to make application for a building permit for the
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<PAGE>
Applicable Tower Site, provided however, Carrier may elect to provide Tower
Company Notice of the Applicable Tower Site pursuant to 2.1(b)(i)(A) or
2.1(b)(i)(B) above.
(ii) ACCEPTANCE OR REJECTION OF APPLICABLE TOWER SITE.
(A) Tower Company shall have a period of twenty (20) days (the
"Application Period") from the date of the Notice of Applicable Tower
Site is received by Tower Company to accept (in the event of
acceptance, the "Notice of Acceptance") or reject in writing any such
Applicable Tower Site because of any characteristics associated with
the Applicable Tower Site which would in the reasonable opinion of
Tower Company adversely impact the development or ownership of the
Applicable Tower Site as a multi-tenant tower site. In the event that
Tower Company does not accept or reject the Applicable Tower Site
within such twenty (20) day period, Tower Company shall be deemed to
have rejected such Applicable Tower Site. In the event that Tower
Company rejects or does not accept any Applicable Tower Site, Tower
Company shall have no right to require an assignment of the Ground
Lease or obligation to develop the Applicable Tower Site and Carrier
shall have no further obligation to Tower Company in regards to the
Applicable Tower Site under the terms of this Agreement.
(B) (I)Notwithstanding anything to the contrary contained in this
Agreement, in the event that Tower Company accepts an Applicable Tower
Site, Tower Company will have the right to terminate its obligations
with respect to such Applicable Tower Site under the terms of this
Agreement at any time prior to commencement of construction of the
Tower Facilities by providing a notice to Carrier because of (a) a
title or environmental defect that materially adversely affects Tower
Company's intended use of the Applicable Tower Site as a multi-tenant
tower site and as contemplated under this Agreement provided that such
defect is not caused by or contributed to by Tower Company, (b) Tower
Company is unable to obtain necessary governmental approvals for the
Applicable Tower Site as a multi-tenant tower site, or (c) Tower
Company will be unable to obtain necessary governmental approvals
without excessive cost and/or delay for the Applicable Tower Site as a
multi-tenant tower site. (II) In the event of such a termination, if
the applicable SLA has been signed, it will be deemed terminated
automatically without further notice or agreement. Additionally upon
such termination, Tower Company shall assign to Carrier any Ground
Lease or Pre-Development Information which Tower Company may have
regarding the Applicable Tower Site and Carrier shall assume any
reasonable obligations thereunder the cost of which are provided for
under this Agreement or the SLA and Carrier shall be obligated to the
Tower Company for the reasonable Pre-Development Costs which have been
agreed upon pursuant to the terms of this Agreement, including without
limitation any Pre-Development Costs previously reimbursed by the Tower
Company to the Carrier.
(C) Notwithstanding anything else contained herein, Tower Company
shall not be obligated to accept a Site, an assignment of the Ground
Lease or Pre-Development Information until Carrier has completed all
the items and work necessary for the completion of the stage of work or
milestone which the Carrier has performed or intends to perform.
(c) DUE DILIGENCE. During the (i) Application Period; and (ii) in the
event that Tower Company provides Carrier with a Notice of Acceptance with
respect to the Applicable Tower Site,
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during the period between the Application Period and the Commencement Date on
the applicable SLA; and (iii) during the term of the applicable SLA, provided
that Tower Company has assumed the Ground Lease, and has entered into an SLA
with Carrier for the Applicable Tower Site, Carrier shall make available to
Tower Company the Pre-Development Information. Carrier shall cooperate with
Tower Company in making reasonable modifications to the Pre-Development
Information at the request of Tower Company.
(d) FEDERAL AVIATION ADMINISTRATION APPROVAL. Carrier shall not file
with the FAA any application, responses, approvals and registration numbers
submitted or received with respect to any Applicable Tower Site without the
prior approval of Tower Company which approval shall not be unreasonably
withheld, delayed or conditioned by Tower Company.
(e) ASSIGNMENT AND ASSUMPTION OF GROUND LEASE. In the event that Tower
Company accepts the Applicable Tower Site for development pursuant to paragraph
2.1 of this Agreement, and Carrier has entered a Ground Lease with the Ground
Lessor, Carrier shall assign to Tower Company and Tower Company shall assume and
agree to be bound, by the Ground Lease, together with the Easements to the
Property pursuant to the Assignment and the relationship of the parties with
regard to the Applicable Tower Site shall thereafter be governed by this
Agreement. In the event that the Ground Lessor must consent to the assignment of
the Ground Lease, the Assignment (and assumption on the part of Tower Company)
shall be contingent upon the delivery of the consent of the Ground Landlord to
the Assignment in substantially the form of the consent provided in the Estoppel
Certificate attached hereto as Attachment "III" and such consent shall be a
condition precedent to the Assignment. The form of the Assignment by which
Carrier assigns the Ground Lease and any Easements to Tower Company shall be
substantially the same form as that which is attached hereto as Attachment "I".
The Assignment shall be executed by Carrier and Tower Company in three (3)
counterpart originals, and one original execution copy shall be delivered to
Carrier and two (2) original execution copies shall be delivered to Tower
Company simultaneously with the assignment of the Pre-Development Information.
In addition thereto, Tower Company and Carrier shall execute a Memorandum of
Assignment in substantially the form of Attachment "II" to be recorded in the
office of the property records in the County where the Property is located. The
Memorandum of Assignment shall be executed and delivered to Tower Company
simultaneously with the Assignment. Tower Company shall send the Memorandum of
Assignment to the appropriate recording office for recording prior to the
commencement of construction of the Tower Facilities as commencement of
construction is defined in any mechanics or materialman's lien statute in the
state where the Property is located (provided that Tower Company receives the
Memorandum of Assignment executed by Carrier prior to such time). In addition
thereto, Tower Company and Carrier shall use reasonable efforts to obtain from
the Ground Lessor, a release of Carrier from all liabilities under the Ground
Lease and shall include such release language in the Estoppel Certificate which
is attached hereto as Attachment "III". Tower Company and Carrier shall exercise
reasonable efforts to obtain an estoppel certificate from the Ground Lessor in
substantially the form of the estoppel certificate attached hereto as Attachment
"III." Tower Company shall and hereby agrees to hold Carrier harmless and
indemnify Carrier from any and all claims, losses, obligations, damages, costs
or expenses ever suffered, threatened or incurred by Carrier by reason of any
act or omission of Tower Company under the Ground Lease from and after the date
of the assignment, including without limitation, any default under the Ground
Lease. Carrier shall and hereby agrees to hold Tower Company harmless and
indemnify Tower Company from any and all claims, losses, obligations, damages,
costs or expenses ever suffered, threatened or incurred by Tower Company by
reason of any act or omission of Carrier under the Ground Lease before the date
of the assignment, including without limitation, any default under the Ground
Lease.
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(f) ASSIGNMENT AND ASSUMPTION OF PRE-DEVELOPMENT INFORMATION. In the
event that Tower Company accepts the Applicable Tower Site for development
pursuant to Paragraph 2.1 of this Agreement, and whether or not Carrier has
entered a Ground Lease with the Ground Lessor, Carrier shall assign to Tower
Company and Tower Company shall assume and agree to be bound, by Tower Company's
right, title and interest in the Pre-Development Materials in Carrier's
possession, to the extent transferable or assignable, and without warranty or
representation, pursuant to an assignment and assumption agreement,
substantially in the form of the Assignment attached hereto as Attachment "I"
and the relationship of the parties with regard to the Applicable Tower Site
shall thereafter be governed by this Agreement. The assignment of
Pre-Development Materials shall be executed by Carrier and Tower Company in
three (3) counterpart originals, and one (1) original execution copy shall be
delivered to Carrier and two (2) original execution copies shall be delivered to
Tower Company within five (5) days of the Notice of Acceptance. Unless otherwise
provided in the schedule, simultaneously with the execution of the assignment of
Pre-Development Information by the parties, Tower Company shall pay Carrier the
Pre-Development Costs incurred by Carrier in connection with the Pre-Development
Information in accordance with Attachment "VI".
(g) COMPLETION OF PRE-DEVELOPMENT WORK. In the event that Tower Company
accepts the Applicable Tower Site in accordance with the terms of this
Agreement, Tower Company shall obtain and be responsible and liable for the
completion of all matters necessary to complete the construction of the Tower
Facilities upon the Applicable Tower Site that have not been completed by
Carrier, including without limitation (i) obtaining zoning permits and
approvals, variances, building permits and such other federal, state or local
governmental approvals for the Applicable Tower Site, provided that Carrier will
reasonably cooperate with Tower Company in connection therewith; (ii) obtaining
the construction, engineering and architectural drawings and related site plan
and surveys pertaining to the construction of the Tower Facilities on the
Property (iii) obtaining the geotechnical report for the Property; (iv)
obtaining a title report, commitment for title insurance, ownership and
encumbrance report, title opinion letter, copies of instruments in the chain of
title or any other information which may have been produced regarding the
marketability of title and title to the Property and the easements; and (v)
obtaining environmental assessments including phase I reports and a report
relating to contemporaneous or subsequent intrusive testing, the "FCC Checklist"
performed pursuant to National Environmental Protection Act requirements and any
other information which may be necessary to obtain permits and maintain
licensing for the operation of a wireless communications facility upon the
Applicable Tower Site (collectively the "Pre-Development Information" or the
"Pre-Development Materials"). Tower Company shall make available to and deliver
to Carrier copies of all of the Pre-Development Information prior to the
execution of an SLA.
(h) ZONING AND GOVERNMENTAL APPROVALS. In the event that it is
necessary to obtain any zoning or governmental approvals, permits, variances, or
other action from any federal, state or local governmental body or entity
("Governmental Approvals") for the Applicable Tower Site and Tower Company has
accepted the Applicable Tower Site prior to the issuance of such Government
Approvals, where reasonably practicable and where Tower Company has not entered
into a lease or license with any other carrier for the occupancy of the Tower
Facility upon the Applicable Tower Site and provided that, Carrier has provided
Tower Company notice that it intends to exercise its right to approve the
Government Application contemporaneously with the delivery of the Notice of
Applicable Tower Site, Carrier shall have the right:
(I) to approve, (such approval not to be unreasonably withheld, delayed or
conditioned) any application, motion, appeal or action ("Government
Application") for such Government Approvals; and
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(II) to approve any presentation, witnesses, evidence, materials or
reproduced works, or similar items, matters or parties which Tower
Company intends to utilize or present for or to any person, entity,
body or commission for such Governmental Approval; and
(III) to require Tower Company to hire or use any witnesses, attorneys,
consultants, lobbyists, public relations consultants, or parties which
Carrier deems reasonably necessary to obtain the Governmental Approval.
Carrier shall pay and be liable for the added expense (the addition of which
shall be documented by Tower Company) of exercising its rights under (I), (II),
or (III). The withholding of any approval by Carrier solely because the Tower
Facility has been designed as a multi-tenant tower site shall be an approval
deemed to be unreasonably withheld. In the event that Tower Company has not
entered into a lease or license with any other carrier for the occupancy of the
Tower Facility upon the Applicable Tower Site, Carrier shall have the right at
any time to withdraw, dismiss, terminate or otherwise cease any process, hearing
or proceeding upon or regarding a Government Application. Tower Company may
proceed with the Government Application but in no event shall Tower Company
publish, advertise or otherwise use Carrier's name or likeness in the Government
Application or any proceeding, appeal or other filing for the Government
Approval and further provided that Carrier shall not be liable for any further
costs or expenses incurred in connection with the Applicable Tower Site,
including without limitation for the Government Approvals and that Carrier shall
not be liable or responsible for or obligated to enter an SLA with Tower Company
for the Applicable Tower Site. In the event that Carrier desires to terminate,
dismiss, withdraw or otherwise cease any process, hearing, or proceeding upon or
regarding a Government Application and in the reasonable opinion of Tower
Company and Tower Company's counsel (in writing) such Government Application
could have been approved and Tower Company does not construct a tower or similar
facility upon the Applicable Tower Site, Carrier shall reimburse Tower Company
for all fees and expenses incurred in connection with the Government
Applications and the Pre-Development Costs. If the Tower Company is unable to
obtain the Government Approvals for any Applicable Tower Site within One Hundred
and Twenty (120) days after the Notice of Acceptance, (subject to the force
majeure provisions of Paragraph 5.5(e), provided, however, that such act of
force majeure (or such delay) is not contributed to or caused by any fault or
negligence of Tower Company), Tower Company or Carrier may terminate the SLA
within ten (10) days thereafter by providing written notice of termination to
the other party. Upon such termination, at the option of the Carrier, Tower
Company shall assign or reassign and deliver any or all Ground Leases under the
Applicable Tower Site to Carrier or its assignee, any or all Pre-Development
Information regarding the applicable Tower Site to Carrier or its assignee and
any other easements, leases, licenses, subleases or agreements regarding or
related to the Applicable Tower Site to the Carrier or its assignee.
(i) SITE LEASE AGREEMENT. (i) In the event that an application for a
building permit has been submitted for the Applicable Tower Site by the Carrier
and that all Pre-Development Information has been completed and delivered to
Carrier, Carrier and Tower Company shall execute two original execution copies
of a Site Lease Agreement ("SLA") in substantially the form of the SLA attached
hereto as Attachment "IV" and deliver such SLA to the other party within five
(5) business days of the Notice of Acceptance. Tower Company shall execute and
deliver a Memorandum of SLA in substantially the form of the Memorandum of SLA
attached hereto as Attachment "V" contemporaneously with the execution and
delivery of the SLA.
(ii) In the event that the Notice of Acceptance has been received prior to
the submission of an application for a building permit and the delivery of all
Pre-Development Information to Carrier, Carrier and Tower Company shall execute
two original SLAs in substantially the form of the SLA attached hereto
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as Attachment VI and deliver such SLA to the other party within five (5)
business days of the delivery of Pre-Development Notice to Carrier.
(iii) Carrier may refuse to execute and reject the SLA on any Applicable
Tower Site because of any deficiency in the Pre-Development Information that
materially adversely affects Carrier's intended use of the Applicable Tower Site
for a wireless communications network or any deficiencies which are disclosed in
the Pre-Development Information, (which Carrier did not obtain or prepare, did
not have notice of, or in the event that Carrier had notice of such defect,
Carrier did not object to such defect) which materially adversely affect
Carrier's intended use of the Applicable Tower Site for a wireless
communications network, including without limitation (A) exceptions to the title
of the Property or the Easements that materially adversely affect Carrier's
intended use of the Applicable Tower Site for a wireless communications network;
(B) deficiencies in the Plans and Specifications that materially adversely
affect Carrier's intended use of the Applicable Tower Site for a wireless
communications network; (C) deficiencies in the geotechnical analysis or
environmental assessments for the Property or any deficiencies regarding the
condition of the Property that materially adversely affect Carrier's use of the
Applicable Tower Site for a wireless communications network; or (D) deficiencies
in any requirements under the National Environmental Protection Act that cannot
be remedied within thirty (30) days of Tower Company's receipt of notice of such
deficiency from Carrier; (E) any deficiency in the SLA that materially adversely
affects Carrier's intended use of the Applicable Tower Site for a wireless
communications network; or (F) any deficiency in the Ground Lease or the due
authorization thereof that materially affects Carrier's intended use of the
Applicable Tower Site for a wireless communications network. In the event that
Carrier refuses to execute or rejects the SLA in accordance with this paragraph,
Carrier shall have no obligation to execute an SLA or obligation to Tower
Company under this Master Lease in regards to the Applicable Tower Site. In the
event that Carrier refuses to execute or rejects the SLA under this paragraph
and Tower Company does not construct a tower upon the Applicable Tower Site,
Carrier shall reimburse Tower Company up to one-half of the Pre-Development
Costs (hereinafter defined), which accrued or were incurred, prior to Tower
Company's notice of or knowledge of such deficiency in the Pre-Development
Information, but in any event no more than $15,000.00 for the Pre-Development
Costs for the Applicable Tower Site.
(iv) Carrier shall be responsible for recording and bear the cost of
recording the Memorandum of SLA.
III. DESIGN AND CONSTRUCTION OF TOWER FACILITIES
3.1. COVENANT TO CONSTRUCT. Construction of the Tower Facilities shall
be the responsibility and obligation of Tower Company. Tower Company shall be
responsible for the costs and construction of the Tower Facilities. Tower
Company shall construct the Tower Facilities in accordance with and substantial
compliance with the Plans and Specifications and all rules, regulations, laws,
and orders of any governing body, local, state or federal. Tower Company shall
obtain all necessary permits and approval of the Plans and Specifications from
all applicable governmental agencies.
3.2. APPROVAL OF PLANS AND SPECIFICATIONS. (a) In the event that
Carrier has obtained plans for the construction of the Tower Facilities
("Plans") and specifications for the construction of (the "Specifications") the
Tower Facilities, Carrier shall deliver to Tower Company the Plans and
Specifications for the Tower Facilities within five (5) days of the complete
execution of the Assignment. In the event that Tower Company does not approve
the Plans and Specifications or modifies the Plans and Specifications, Tower
Company shall deliver detailed written objections to the Plans and
Specifications within ten (10) days of the receipt of the Plans and
Specifications or Tower Company shall prepare and
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deliver to Carrier for approval by Carrier three (3) copies of any modifications
to the Plans and Specifications. Any modifications to the Plans and
Specifications for each Tower Facility shall be delivered to Carrier within
thirty (30) days of the delivery of the Plans and Specifications to Tower
Company. If no objection or modified Plans and Specifications are delivered to
Carrier within the above-referenced time periods, the Plans and Specifications
shall be deemed approved. Within ten (10) days after receipt of the modified
Plans and Specifications, Carrier shall approve such modified Plans and
Specification or deliver to Tower Company detailed written objections thereto.
If Carrier fails to either affirmatively approve or disapprove the modifications
to the Plans and Specifications proposed by Tower Company within the ten (10)
day period, Carrier shall be deemed to have effectively approved the Plans and
Specifications.
(b) In the event that Carrier has not obtained Plans and
Specifications for the Tower Facility, Tower Company shall have Plans and
Specifications for the Tower Facility prepared, designed and delivered to
Carrier fourteen (14) business days prior to the date that the Tower Company and
Carrier have agreed that the building permits and Pre-Development Information
must be delivered to the Carrier in Attachment VI. Within five (5) business days
of receipt of the Plans and Specifications, Carrier shall approve the Plans and
Specifications or deliver to Tower Company detailed objections thereto. If
Carrier does not affirmatively approve or disapprove the Plans and
Specifications within such five (5) business day period, Carrier shall be deemed
to have approved the Plans and Specifications.
(c) Notwithstanding the foregoing, in the event that any federal,
state or local governmental body, requires Tower Company or Carrier to modify
the Plans and Specifications to obtain a Governmental Approval, Carrier or Tower
Company may modify the Plans and Specifications provided that the other party
approves such modification, such approval not to be unreasonably withheld,
delayed or conditioned.
3.3. PRE-DEVELOPMENT COSTS. Tower Company shall reimburse Carrier for
the Pre-Development Costs as specified in Attachment VI.
3.4. COMMENCEMENT OF CONSTRUCTION. Tower Company shall commence
construction of the Tower Facility within fifteen (15) days of the availability
of the building permit for the Applicable Tower Site. Tower Company shall
complete construction of each individual Tower Facility within forty-five (45)
days after the availability of the building permit for the Applicable Tower
Site. Tower Company shall have no obligation to commence construction of the
Tower Facilities unless and until a SLA has been executed by Carrier for that
Tower Site. The commencement of construction and the completion of construction
of each Tower Facility shall be subject to delays from substantial labor
disputes, fire, unusual delay in deliveries not caused by or contributed to by
Tower Company or its contractors, abnormal adverse weather conditions not
reasonably anticipated, or government actions or inactions not caused or
contributed to by Tower Company, or other unavoidable casualties or similar
causes beyond reasonable control of Tower Company or Tower Company's contractor
or for time needed to perform additional construction covered by any change
order requested by Carrier. Notwithstanding the foregoing, Carrier and Tower
Company may negotiate and agree upon a different schedule for the completion of
the Tower Facilities in each Carrier Market pursuant to and part of a Schedule
attached hereto as a Schedule attached to Attachment "VI".
3.5. SELECTION OF CONTRACTOR. Prior to the commencement of construction
of a Tower Facility under this Agreement, Tower Company shall provide Carrier
with the names of the contractors it proposes to use for the construction of the
Tower Facility. Carrier may, within five (5) business days of
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receipt of this information, object to the use of a specific contractor on a
Tower Facility on a commercially reasonable basis.
3.6. MANNER OF CONSTRUCTION. (a) Tower Company represents, warrants and
agrees that the Tower Facilities shall be constructed in a good and workmanlike
manner and in accordance with the Plans and Specifications and all applicable
federal, state and local laws, ordinances, rules and regulations and shall be of
good quality, free from faults and patent defects. Tower Company warrants to
Carrier that all materials furnished in connection with the construction of the
Tower Facilities will be new unless otherwise specified, and reasonably believes
to be good quality, and that such construction will be of good quality in
accordance with industry standards, free from faults and patent defects. The
warranties set forth in this Paragraph 3.6 (a) shall be effective for one (1)
year commencing on the date that Carrier accepts the Tower Facilities as
complete pursuant to this Agreement.
(b) Tower Company shall supervise and direct the work on the Tower
Facilities (the "Work"), using Tower Company's professional skill and attention.
Tower Company shall be solely responsible for and have control over construction
means, methods, techniques, sequences and procedures and for coordinating all
portions of the Work on the Tower Facilities under this Agreement.
(c) Unless otherwise provided in this Agreement, Tower Company
shall provide and pay for labor, materials, equipment, tools, construction
equipment and machinery, water, heat, utilities, transportation, and other
facilities and services necessary for the proper execution and completion of the
Work, whether temporary or permanent and whether or not incorporated or to be
incorporated in the Work.
(d) Tower Company shall enforce strict discipline and good order
among the employees and other persons carrying out this Agreement. Tower Company
shall employ people Tower Company reasonably believes to be fit and skilled in
tasks assigned to them.
(e) Tower Company shall pay sales, consumer, use, and other
similar taxes regarding the Tower Facilities, the construction and leasing
thereof, and shall secure and pay for any permits and governmental fees,
licenses and inspections necessary for proper execution and completion of the
Work. Carrier shall pay any taxes due in connection with the Rent (as
hereinafter defined) to the extent that such taxes do not exceed ten percent
(10%) of the base Rent provided for hereunder (excluding any fees or expenses
which may be construed as or defined as Additional Rent).
(f) Tower Company shall keep the Tower Facilities and surrounding
area free from accumulation of waste materials or rubbish caused by operations
under this Agreement. At completion of the work Tower Company shall remove from
and about the Tower Facilities waste materials, rubbish, tools, construction
equipment, machinery and surplus materials.
(g) Tower Company shall provide Carrier (and its employees, agents
and contractors) access to the Work in preparation and progress wherever
located, provided that such access shall not interfere with the Work.
(h) Tower Company shall pay all royalties and license fees with
respect to the Work; shall defend suits or claims for infringement of patent
rights and shall hold Carrier harmless from loss on account thereof in
connection with the Work, but shall not be responsible for such defense or loss
when a particular design, process or product of a particular manufacturer or
manufacturers is required by Carrier unless Tower Company has reason to believe
that there is an infringement of patent.
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(i) Tower Company shall be responsible for initiating, maintaining
and supervising all safety precautions and programs in connection with the
performance of the Agreement. Tower Company shall take reasonable precautions
for safety of, and shall provide reasonable protection to prevent damage, injury
or loss to:
(1) employees on the Work, the Tower Facilities or the
Property and other persons who may be affected thereby;
(2) the Work, the Tower Facilities, the Property and
materials and equipment to be incorporated therein; and
(3) other property at the Property or adjacent thereto.
3.7. NO LIENS. Tower Company shall not cause or allow (which shall mean
any occurrence or item which is within the Tower Company's control) any
involuntary liens or encumbrances to be recorded against the Tower Facilities,
including without limitation, liens and encumbrances (a) arising out of or
related to the performance of the construction, all liens and encumbrances of
any contractor, subcontractor, laborer, mechanic or materialman for labor
performed or material furnished in connection with the performance of the
construction; (b) liens or encumbrances arising from taxes or assessments,
except for liens for taxes or assessments which are not yet due and payable; or
(c) liens or encumbrances which may materially adversely impair Carrier's
interest. In the event any such lien or encumbrance is recorded against all or
any part of the Tower Facilities, Tower Company shall, within thirty (30) days
after its receipt of notice that such a lien or encumbrance has been recorded,
either (a) have such lien or encumbrance released of record, or (b) deliver to
Carrier a bond, in form, content and amount, and issued by a surety, reasonably
satisfactory to Carrier, indemnifying Carrier against all costs and liabilities
resulting from such lien or encumbrance. Upon the delivery to Carrier of the
bond specified in alternative (b) above, Tower Company may contest the validity,
of such lien or encumbrance. Once such a lien or encumbrance is released of
record, for any reason, any bond provided to Carrier hereunder shall be released
and returned to Tower Company. Notwithstanding the foregoing, Tower Company may
encumber the Tower Facilities with a lien or mortgage as surety for construction
or permanent financing, provided that such lender or holder enters into a
reasonably satisfactory non-disturbance agreement with Carrier.
3.8. NOTIFICATION OF COMPLETION. Tower Company shall notify Carrier of
the date when the Tower Facilities have been substantially completed by delivery
of a notice in substantially the same form attached hereto as Attachment "VII"
("Notice of Completion"). Carrier will inspect the Tower Facilities within three
(3) business days of the receipt of Tower Company's notice that the Tower
Facilities are complete. Within three (3) business days of inspection, Carrier
will either provide a signed writing evidencing final acceptance of the
construction and installation of the Tower Facilities or, through the use of a
punch list form, advise Tower Company of the portions of the Tower Facilities
that are defective or incomplete or of obligations that have not been fulfilled
but are required for final acceptance. Any failure of Carrier to complete such
inspection or punch list within such three (3) day periods shall not constitute
an Event of Default under the terms of this Agreement or any SLA, but in such
event the completion dates for installation of the Tower Facilities in this
Agreement or any Schedule attached to Attachment VI shall be extended
automatically an additional day for each day beyond the three (3) day period
that Carrier delays such inspection and/or punch list. In the event that Carrier
does submit a Punch List to Tower Company, Tower Company shall complete and
correct all items on the Punch List within ten (10) days after delivery of the
Punch List, subject to an extension as needed for completion if Tower Company
has made diligent efforts to cure the Punch List items within the ten (10) day
period, and was unable to
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complete the Punch List items for reasons beyond the reasonable control of Tower
Company. Carrier shall not be deemed to have accepted the Tower Facilities as
complete until completion of all items on the Punch List.
3.9. IMPROVEMENTS BY CARRIER. Carrier shall be responsible for
procuring any and all permits and approvals from any and all federal, state or
local governmental agencies which may be required for the installation or
operation of Carrier's Equipment on the Tower Facilities for each Site. Subject
to the provisions of Paragraph 4.12, Carrier shall submit plans and
specifications for the proposed installation of Carrier's Equipment to Tower
Company for Tower Company's approval which depicts the location and manner of
attachment of Carrier's Equipment to the Premises prior to completion of the
final architectural and engineering drawings of the Tower Facilities; and (b)
Carrier shall be responsible for the delivery of Carrier's Equipment to the
Applicable Tower Site at Carrier's cost; and (c) Carrier shall be responsible
for connecting Carrier's Equipment to utilities which have been extended to the
Premises by Tower Company; and (d) Carrier shall provide at Carrier's sole cost
and expense, Carrier's Equipment and all materials and equipment for the
construction, installation, operation, maintenance and repair of Carrier's
Equipment and (e) Carrier shall be responsible for the installation of Carrier's
Equipment upon the Tower Facilities unless otherwise provided herein or in the
Attachments, Assignment or SLA. Carrier shall not construct or install any
equipment or improvements onto the Premises other than those which are described
in the SLA or alter the radio frequency of operation of Carrier's Equipment
without first obtaining the prior consent of Tower Company which consent shall
not be unreasonably withheld, delayed or conditioned. Notwithstanding the
foregoing, subject to paragraph 4.13, so long as Carrier obtains Tower Company's
prior written approval, which approval shall not be unreasonably withheld,
delayed, or conditioned, Carrier shall have the right to make alterations to the
Premises and Carrier Equipment so long as Carrier does not increase the area of
space upon the Tower Facilities or the ground space upon the Site, increase the
wind or structural load upon the Tower Facility or create radio frequency
interference which materially interferes with the equipment or network of other
users who have a written contractual agreement with Tower Company for the
location of equipment upon the Tower Facilities. Upon Carrier's request for
Tower Company's consent to an alteration, Carrier shall provide to Tower Company
(i) a description of the proposed alteration, (ii) plans and specifications if
reasonably requested by Tower Company and, (iii) an intermodulation study report
evidencing that the proposed alteration will not create material radio frequency
interference with the equipment of other users who have commenced rental
payments under a written contractual agreement with Tower Company and have
placed their equipment upon the Tower Facility upon the Applicable Tower Site or
are scheduled to place their equipment upon the Tower Facility upon the
Applicable Tower Site within sixty (60) days of such request.
3.10. COMPLIANCE WITH GOVERNMENTAL RULES. All work required to be
performed by Carrier or Carrier's employees, contractors or agents shall be made
in a good and workmanlike manner. Tower Company shall be entitled to require
substantial compliance with the plans and specifications approved by Tower
Company pursuant to paragraph 3.9 including specifications for the grounding of
Carrier's equipment and antennas. All construction, installations and operations
in connection with this Master Lease by Carrier shall meet with all applicable
rules and regulations of the FCC, and all applicable codes and regulations of
the city, county, and state concerned. Carrier's use of contractors at an
Applicable Tower Site shall be subject to the prior written consent of Tower
Company, which consent shall not be unreasonably withheld, delayed or
conditioned. Prior to the commencement of any work at an Applicable Tower Site,
Carrier shall provide Tower Company with the names of the contractors it
proposes to use for the work. Tower Company may, within three (3) business days
of receipt of this information, object to the use of a specific contractor on a
commercially reasonable basis.
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IV. LEASE OF THE PREMISES
4.1. PREMISES. Carrier may install, maintain, operate and remove all or
portion of Carrier's Equipment on the Tower Facilities, at the heights and in
those locations designated in an SLA upon the Property. The terms and conditions
of this Master Lease shall be incorporated into each SLA and the terms and
conditions of each SLA shall be governed by the terms, covenants and conditions
of this Master Lease as though set forth in the SLA word for word. The SLA for
each Site shall be in substantially the same form as that attached hereto as
Attachment "IV". The SLA shall be executed by Carrier and Tower Company and
shall incorporate by reference information about the Site including but not
limited to the legal description of the Premises and the Property which is the
subject of the Ground Lease, the legal description of the Easements, a
description of Carrier's Equipment, and a mounting height of the antennas in the
instance of a Tower Facility or other structure. In no event shall Carrier's
Equipment exceed or deviate from the equipment described in the SLA without the
prior written consent of Tower Company which consent shall not be unreasonably
withheld, delayed or conditioned, provided however, Tower Company and Carrier
acknowledge and agree that so long as Tower Company approves any substituted,
additional, altered, modified, replaced or upgraded equipment, which approval
shall not be unreasonably withheld, delayed or conditioned and any substituted,
additional, altered, modified, replaced or upgraded equipment does not increase
the wind load or structural burden upon the Tower Facilities, does not increase
the space upon the Tower Facilities or the ground space upon the Site, and does
not create any technical or radio frequency interference which materially
interferes with the equipment or network of other users who are then located
upon the Tower Facilities (or scheduled to be located upon the Tower Facilities
at the Applicable Tower Site within sixty (60) days of such request) who have a
written contractual agreement with Tower Company for the location of equipment
upon the Tower Facilities at the time of the request for such substitution,
addition, alteration, modification, replacement or upgrade, Carrier may
substitute, add, alter, modify, replace or upgrade Carrier's Equipment described
in the SLA upon the Tower Facilities. Upon Carrier's request for Tower Company's
consent to a substitution, addition, alteration, modification, replacement or
upgrade, Carrier shall provide to Tower Company (i) a description of the
proposed substitution, addition, alteration, modification, replacement or
upgrade, (ii) plans and specifications if reasonably requested by Tower Company
and, (iii) an intermodulation study report evidencing that the proposed
substitution, addition, alteration, modification, replacement or upgrade will
not create radio frequency interference which materially interferes with the
equipment or network of other users who have a written contractual agreement
with Tower Company and have placed their equipment upon the Tower Facility upon
the Applicable Tower Site or are scheduled to place their equipment upon the
Tower Facility upon the Applicable Tower Site within sixty (60) days of such
request.
4.2. USE. Subject to the provisions of Paragraph 3.9, Carrier may use
the Premises for (i) the transmission and reception of wireless communications
signals from the Carrier's Equipment, (ii) the construction, alteration,
maintenance, replacement, repair, and upgrade of the Carrier's Equipment at
Carrier's sole cost and expense subject to the covenants in Paragraph 4.1 of
this Master Lease requiring Tower Company's consent in certain instances and
prohibiting the increasing of space upon the Tower Facilities or the ground
space upon the Site, interference and wind load and structural burden, and (iii)
incidental activities related to any of the foregoing. The use of any Tower
Facility granted Carrier by this Master Lease shall be non-exclusive, but it
shall be limited in strict accordance with this Master Lease. Tower Company
shall have the right to enter into lease and license agreements with others
relating to the Tower Facility in the reasonable discretion of Tower Company
subject to the covenants, terms and conditions of this Master Lease including,
without limitation, covenants prohibiting material interference with Carrier's
Equipment found in paragraph 4.13 of this Master Lease. Carrier will have
reasonable right of access to the tower where Carrier Equipment is located,
provided that Carrier must give twenty-four
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(24) hours prior notice. Carrier will have unrestricted access twenty-four (24)
hours a day seven (7) days a week to its ground space. In the event of an
emergency situation which poses an immediate threat of substantial harm or
damage to persons and/or property (including the continued operations of
Carrier's Equipment) which requires ascension of the tower, Carrier may ascend
same and take the actions that are required to protect individuals or personal
property from the immediate threat of substantial harm or damage, provided that
promptly after the emergency entry and in no event later than twenty-four (24)
hours, Carrier gives Tower Company telephonic and written notice of Carrier's
ascension of the tower. Tower Company's prior written approval is necessary for
access of an Applicable Tower Site by any non-Carrier personnel, such approval
not to be unreasonably withheld, delayed or conditioned. Tower Company hereby
approves access by Applicable Tower Sites by the non-Carrier personnel listed on
Attachment IX, subject to entry notice requirements under this paragraph 4.2.
4.3. INITIAL TERM OF MASTER LEASE. The Term of this Master Lease shall
be for a period of five (5) years from the date of this Master Lease. The Master
Lease shall automatically renew for four (4) additional terms of five (5) years
each unless Tower Company or Carrier notifies the other party of its intention
not to renew this Master Lease at least six (6) months prior to the end of the
then existing term or Renewal Term of this Master Lease. The terms and
conditions of the Master Lease which are applicable to each SLA shall remain in
force and continue to apply until the termination or expiration of the
applicable SLA even if the Master Lease is terminated or not renewed.
4.4. INITIAL TERM OF SLAS. The initial term of the SLA for each Tower
Facility shall be for a period of five (5) years commencing on the Commencement
Date and expiring on the fifth (5) anniversary of the Commencement Date
("Initial Term"). Carrier and Tower Company shall execute a letter agreement in
substantially the form of Attachment "VIII", which shall be attached to each SLA
confirming the calendar date which the parties acknowledge and agree is the
Commencement Date for each SLA.
4.5. RENEWAL TERMS FOR SLA. Carrier shall have the right to extend each
SLA for four (4) additional period(s) of five (5) years each ("Renewal Terms"),
provided that Carrier is not in default under the applicable SLA at the time
Carrier provides Tower Company with its renewal notice or on the first day of
the renewal period. Carrier shall provide Tower Company written notice of
Carrier's intent to renew any SLA not less than one hundred twenty (120) days
prior to the end of the then existing term. Each Renewal Term shall be on the
same terms and conditions as set forth in this Master Lease except that Rent
shall accrue in the manner described on Attachment VI and insurance requirements
shall increase in accordance with paragraph 4.17 of this Master Lease.
4.6. QUIET ENJOYMENT. Tower Company represents and warrants that
Carrier shall have the quiet enjoyment of the Premises throughout the term of
the SLA, without threat of hindrance, ejection or molestation, subject to
Carrier's fulfillment of the terms and conditions of this Master Lease and the
applicable SLA, title exceptions disclosed to Carrier as part of the
Pre-Development Materials, and condemnation proceedings.
4.7. GROUND LEASE. (a) Tower Company covenants that it shall not commit
any act which would result in a default, non-renewal or nonconformance of the
Ground Lease beyond any applicable notice or grace period. The SLA shall be
subject to the continued existence and enforceability of the Ground Lease,
provided, however, any termination or expiration of the Ground Lease which
occurs as a result of any default, non-renewal or non-conformance by Tower
Company under the terms of the Ground Lease, without the prior written consent
of Carrier, shall be construed as an event of default under the terms of the
SLA.
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(b) In the event that the Ground Lease requires the Ground Lessor
to consent to the making of the applicable SLA, it shall be a condition
precedent to the effectiveness of the SLA that Tower Company obtains such
consent. The form and content of such consent shall be subject to Carrier's
approval, not to be unreasonably withheld, delayed or conditioned.
(c) In the event that Tower Company loses its possessory right to
a Site because of a termination or expiration of a Ground Lease which occurs
during the term or any renewal term of the Ground Lease and not at or beyond the
final renewal term if all renewal terms were exercised hereunder (including any
agreed upon extension), Tower Company hereby grants to Carrier the option to
purchase the Tower Facilities on the applicable Site (and any accessories,
accessions, attachments, fixtures or other equipment in connection therewith,
etc., including without limitation storage buildings and fences) for the fair
market value of the Tower Facilities (and such accessories, accessions,
attachments, fixtures, equipment, etc.) such fair market value to be measured as
though the Tower Facilities were to continue operation at the Tower Site. Such
right and agreement does not waive any requirement or covenant that Tower
Company must maintain the Site Lease in full force and effect and shall not
commit any act which would result in a non-renewal, default or nonconformance of
the Ground Lease beyond any applicable notice or grace period.
(d) Tower Company agrees to use reasonable efforts to deliver a
nondisturbance and attornment agreement with the Ground Lessor for Carrier's
continued possession of the Premises under the applicable SLA and/or the
assumption and/or assignment of the Ground Lease to Carrier in the event that
Tower Company elects to terminate the Ground Lease. Carrier acknowledges and
agrees that the language provided in paragraph 5 of the Estoppel Certificate
attached hereto as Attachment III will be sufficient to comply with the
requirements of this provision. This provision shall not imply that Carrier
consents to the expiration or termination of the Ground Lease by Tower Company.
(e) RIGHT OF FIRST REFUSAL. (i) In the event that Tower Company
receives a bona fide arms length offer pursuant to which an independent
non-affiliated third party (the "Third Party") would enter into a sublease,
license or other occupancy agreement with respect to a portion of the Tower
Facilities below the height specified by Carrier at the time Carrier and Tower
Company executed an SLA, and Tower Company intends to accept such offer, Tower
Company shall send written notice (the "Right of First Refusal Notice") to
Carrier offering to sublease the Right of First Refusal Space to Carrier for the
same rent and under the same terms and conditions as the aforementioned bona
fide offer (the "Right of First Refusal"). The Right of First Refusal Notice
shall specify the height at which the offeree intends to install its equipment
and the rent that it shall pay. Carrier shall have five (5) business days after
its Receipt of the Fight of First Refusal Notice to give Tower Company written
notice of its intent to exercise the Right of First Refusal. If Carrier does not
give Tower Company written notice of its intent to exercise the Right of First
Refusal within five (5) business days, Carrier's right to exercise the Right of
First Refusal terminates as to that specific tenant and offer. Tower Company may
then sublease or license such space to the Third Party.
(ii) In the event Tower Company constructs a Tower Facility higher
than the height specified by Carrier at the time when Carrier and Tower
Company execute an SLA, Tower Company shall send Carrier a written
notice specifying the height of the Tower Facilities and offering
Carrier the right to locate Carrier Equipment at a different height
upon the Tower Facilities and Carrier shall have the right to locate
Carrier Equipment at any level upon the Tower Facilities upon the same
terms and conditions of the original SLA (the "Additional Height Right
of First Refusal"). Carrier shall have five (5) days after its receipt
of the notice, to notify Tower
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Company of its desire to locate its equipment at a height different
from which it originally specified and that it shall exercise the
Additional Height Right of First Refusal.
(iii) Tower Company and Carrier shall enter into and execute a
modification of the original SLA and memorandum of SLA to evidence the
modification of the height of Carrier Equipment upon the Tower
Facilities within thirty (30) days of the date that Carrier gives Tower
Company notice that it exercised the Right of First Refusal or the
Additional Height Right of First Refusal.
4.8. RENT. As consideration for the use and occupancy of the Premises
under any SLA, Carrier shall pay Tower Company rent as shown on Attachment "VI"
("Rent").
4.9. CARRIER'S EQUIPMENT. Carrier's Equipment shall remain Carrier's
exclusive personal property throughout the term and upon termination of the SLA.
Carrier shall have the right to remove all Carrier's Equipment at Carrier's sole
cost and expense on or before the expiration or earlier termination of the SLA,
and Carrier will restore the Premises and the Tower Facilities to the condition
existing on the Commencement Date of the applicable SLA, except for ordinary
wear and tear and insured casualty loss and will repair any damage to the
Premises, the Property or the Tower Facilities caused by such removal, provided
that Carrier shall not be obligated to remove any pads, utilities or similar
permanent fixtures. Tower Company and Tower Company's agents shall have the
right to enter the Premises and the Tower Facility located upon the Premises at
reasonable times for the purpose of inspecting the same. In the event that
Carrier fails to remove Carrier's Equipment from the Premises on or before the
expiration or earlier termination of the SLA, Carrier's Equipment will be
subject to disconnection, removal and storage by Tower Company at Carrier's
reasonable cost. If Carrier's Equipment remains on the Premises after the
expiration or earlier termination of the SLA, or if Tower Company removes such
equipment from the Tower Site, for so long as Tower Company stores such
equipment, Carrier will pay Tower Company a holdover fee of [CONFIDENTIAL
TREATMENT REQUESTED] of the then-effective monthly rent under the SLA, prorated
from the effective day of termination or expiration to the date Carrier's
Equipment is removed from the Premises.
4.10. MECHANICS' LIENS. Carrier shall not cause or allow (which shall
mean any occurrence or item which is within the Carrier's control) any
involuntary liens or encumbrances to be recorded against the Tower Facilities or
Carrier's Equipment, including without limitation, liens or encumbrances (a)
arising out of or related to the performance of the construction, installation
or operation of the Carrier's Equipment, all liens and other encumbrances of any
contractor, subcontractor, laborer, mechanic or materialman for labor performed
or material furnished in connection with the performance of the construction;
(b) liens or encumbrances arising from taxes or assessments, except for lien or
encumbrances for taxes or assessments which are not yet due and payable; or (c)
liens or encumbrances which may materially adversely impair Tower Company's
interest. In the event any such lien or encumbrance is recorded against all or
any part of the Tower Facilities, Carrier shall, within thirty (30) days after
its receipt of notice that such a lien or encumbrance has been recorded, either
(a) have such lien or encumbrance released of record, or (b) deliver to Tower
Company a bond or letter of credit, in form, content and amount, and issued by a
surety, reasonably satisfactory to Tower Company, indemnifying Tower Company
against all costs and liabilities resulting from such lien or encumbrance. Upon
the delivery to Tower Company of the bond or letter of credit specified in
alternative (b) above, Carrier may contest the validity of such lien or
encumbrance. Once such a lien or encumbrance is released of record, for any
reason, any bond or letter of credit provided to Tower Company hereunder shall
be released and returned to Carrier. Notwithstanding the foregoing, Carrier may
encumber the Carrier Equipment with a
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lien or encumbrance or mortgage as surety for construction or permanent
financing, provided that such lender or holder enters into a reasonably
satisfactory non-disturbance agreement with Tower Company.
4.11. MAINTENANCE AND REPAIRS.
(a) Carrier shall perform all repairs necessary or appropriate to
Carrier's Equipment to maintain Carrier's Equipment in a good and tenantable
condition, reasonable wear and tear, damage by fire, the elements or other
casualty excepted. Damage to Carrier's Equipment resulting from the acts or
omissions of Tower Company shall be repaired by Carrier at Tower Company's cost
and expense. Tower Company shall reimburse Carrier for the actual reasonable
costs incurred as evidenced by adequate documentation by Carrier in repairing
such damage or replacing Carrier's Equipment.
(b) Tower Company shall maintain the Tower Facilities, the Site,
the Easements, and portions of the Property other than Carrier's Equipment (i)
in good order and repair, wear and tear, damage by fire, the elements or other
casualty excepted; and (ii) in such condition that the Tower Facilities and the
Property are required to be maintained by Tower Company pursuant to the Ground
Lease; and (iii) in compliance with all rules, laws, regulations and orders of
any governmental entity. Damage to the Site, Easements, Property or property
surrounding the Property, Tower Facilities or the equipment or improvements of
Tower Company or others located on the Property or the Tower Facilities, which
results from the acts or omissions of Carrier shall be repaired by Carrier at
Carrier's cost and expense, or at the option of Tower Company, Carrier shall
reimburse Tower Company for the actual reasonable costs incurred by Tower
Company in repairing such damage or replacing such equipment or improvements as
evidenced by adequate documentation. Notwithstanding the foregoing or other
provisions in this Master Lease to the contrary, Tower Company may delegate its
obligations to maintain or repair the Tower Facilities to another company
provided that such delegation does not increase the costs of said services over
and above that which would have been charged by Tower Company, that such company
to whom the obligations are delegated complies with all the terms and provisions
of this Agreement, and provided that such delegation does not in effect,
delegate all or a substantial portion of Tower Company's obligations under this
Agreement and further provided that such company or companies complies with and
is required to comply with all the terms, conditions, covenants, warranties and
representations under this Agreement.
(c) Tower Company assumes no responsibility for the licensing,
operation and maintenance of Carrier's Equipment.
4.12. UTILITIES. Carrier shall be solely responsible for the payment of
utility charges including connection charges and security deposits incurred in
association with Carrier's Equipment. Carrier will be responsible for setting up
their account for ongoing power usage. Tower Company will be responsible for
bringing in and connecting power to the Tower Site, including without
limitation, the installation of the meter, the base, conduits and the primary
power run from the nearest utility pole. Carrier will coordinate with the
utility companies for the meter for the Carrier Equipment. Tower Company shall
provide and install telephone conduits inside the compound of the Tower
Facility. Carrier will order T-1 circuits for the Tower Site. Tower Company will
coordinate the telephone copper punch block and/or the telephone pedestal. Any
fiber facilities will be the responsibility of Carrier. Carrier, at Carrier's
expense, may install or improve existing utilities servicing the Tower Facility
and may install an electrical grounding system or improve or connect to any
existing electrical grounding system to provide the greatest possible protection
from lightning damage to the Tower Facility. In addition thereto, Carrier may
connect its utilities to any emergency generator or similar emergency power
source which Tower Company may have at the Tower Site or the Property for a fee
to be mutually agreed upon by Carrier and Tower Company.
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Tower Company, at Carrier's expense, shall assist Carrier in obtaining any
utility services necessary to service Carrier Equipment including, without
limitation, any meters, telephone lines or services to the Premises.
4.13. INTERFERENCE AND MAXIMUM PERMISSIBLE EXPOSURE.
(a) BY OTHER OCCUPANTS. Tower Company may enter into sublease or
license agreements with other companies for the Tower Facilities which are the
subject of this Master Lease, provided that Tower Company shall require such
sublessee or licensee to install equipment of types and frequencies that will
not cause material interference to Carrier's communications operations then
being conducted from the Premises and subject to the provisions of this Master
Lease. Tower Company agrees that in the event such sublessee or licensee causes
material interference with Carrier's Equipment, Tower Company will require such
sublessee or licensee to take all steps necessary to correct and eliminate the
material interference. If such material interference cannot be eliminated within
five (5) business days after receipt by Tower Company of notice from Carrier of
the existence of material interference, Tower Company shall take such actions as
are permitted by law and can be conducted without breach of the peace such as
causing such sublessee or licensee to disconnect the electric power and shut
down such sublessee's or licensee's equipment (except for intermittent operation
for the purpose of testing, after performing maintenance, repair, modification,
replacement, or other action taken for the purpose of correcting such
interference) until such material interference is corrected. If such material
interference is not rectified to the reasonable satisfaction of Carrier within
sixty (60) days after receipt by Tower Company of such prior notice from Carrier
of the existence of material interference, Tower Company shall cause such
sublessee or licensee to remove such sublessee's or licensee's antennas and
equipment from the Tower Facilities. Tower Company agrees to provide Carrier
with notice of the status of the situation within thirty days of Tower Company's
receipt of notice from Carrier of the existence of material interference.
Carrier agrees to cooperate with Tower Company and the other Tower Facility
subtenants to identify and remedy interference, provided that such cooperation
does not result in or incur any additional expense upon Carrier.
(b) BY CARRIER. In no event shall Carrier alter the operations of
Carrier's Equipment or replace, upgrade or otherwise modify the operations of
Carrier's Equipment in a manner which will cause material interference with the
operations of any other equipment which is then in existence on the Tower and
for which Tower Company has a written contractual agreement with an independent
bona fide third party who has commenced rental payments under a written
contractual agreement with Tower Company and has placed their equipment upon the
Tower Facility upon the Applicable Tower Site or are scheduled to place their
equipment upon the Tower Facility upon the Applicable Tower Site within sixty
(60) days of such request. Carrier agrees that in the event Carrier's Equipment
causes material interference with any existing equipment upon the Tower
Facilities which was placed upon the Tower Facilities prior to the installation
of any modifications to Carrier Equipment upon the Tower Facilities, Carrier
will take all steps necessary to correct and eliminate the material
interference. If such material interference cannot be eliminated within five (5)
business days after receipt by Carrier from Tower Company of notice of the
existence of material interference, Carrier shall cease operation of Carrier's
Equipment (except for intermittent operation for the purpose of testing, after
performing maintenance, repair, modification, replacement or other action taken
for the purpose of correcting such material interference) until such material
interference is corrected. If the material interference is not corrected within
the five (5) business day period, Tower Company may take such actions as are
permitted by law and can be conducted without breach of the peace such as
causing such Carrier to disconnect the electric power and shut down Carrier's
equipment (except for intermittent operation for the purpose of testing, after
performing maintenance, repair, modification, replacement, or other action taken
for the purpose of
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correcting such material interference) until such material interference is
corrected. Carrier covenants that Carrier's Equipment shall be operated in
compliance with all applicable federal state and local laws, ordinances and
regulations.
(c) MAXIMUM PERMISSIBLE EMISSIONS; COOPERATIVE EFFORTS. If antenna
power output ("RF Emissions") becomes subject to any restrictions imposed by the
FCC or any other government agency for RF Emissions standards on MTE limits, or
if the Tower Facilities otherwise become subject to federal, state or local
rules, regulations, restrictions or ordinances, Carrier shall comply with Tower
Company's reasonable requests for modifications to Carrier's Equipment which are
reasonably necessary for Tower Company to comply with such limits, rules,
regulations, restrictions or ordinances. The RF Emissions requirements of
Carrier shall be subordinate to any prior users of the Tower Facilities.
Similarly, the RF Emissions of users subsequent to Carrier shall become
subordinate to any requirements of Carrier. If Tower Company or Carrier
reasonably require an engineering evaluation or other power density study be
performed to evaluate RF Emissions compliance with MPE limits, then all
reasonable costs of such an evaluation or study shall be shared equally between
Tower Company, Carrier, and any other users of the Tower Facilities. If said
study indicates that RF Emissions at the Tower Facility do not comply with NPE
limits, then Tower Company, Carrier, and subsequent tenants shall immediately
take any steps necessary to ensure that they are individually in compliance with
such limits or shall at the demand of Tower Company cease operations until a
maintenance program or other mitigating measures can be implemented to comply
with MPE. Carrier shall have the right, without waiving any other rights or
remedies, to terminate the SLA applicable to any such Site in the event that
such mitigation measures cannot be implemented without materially adversely
affecting the operation of Carrier Equipment.
(d) SIGNAGE REGARDING MPE. Carrier acknowledges and understands
that Tower Company may install certain signage and/or physical barriers
pertaining to radio frequency exposure from transmitters and other equipment
located upon the Tower Facilities. Tower Company and Carrier shall instruct all
of their personnel and their contractors performing work at the Tower
Facilities, the Property or the Premises, to read carefully all such signage, to
follow the instructions provided in such signage, and to honor all physical
barriers. Carrier shall be responsible for placement of signage or physical
barriers at or near Carrier Equipment and/or its cabinet or building at the
Premises in order to comply with applicable FCC radio frequency exposure
guidelines. Tower Company agrees that it shall cooperate with Carrier in these
efforts and that Tower Company shall instruct its personnel and contractors
performing work at the Property, the Tower Facilities and the Premises to read
carefully all such signage, to follow the instructions provided in such signage,
and to honor all physical barriers. In no event shall Tower Company's personnel
or contractors tamper with any such signage or barriers. Tower Company and
Carrier shall cooperate in good faith to minimize any confusion or unnecessary
duplication that could result from similar signage being posted respecting other
carriers' transmission equipment (if any) at or near the Premises, the Tower
Facilities and the Property.
(e) NOTICE. In order to facilitate the provisions of this Section,
and the remaining provisions of this Agreement, the Tower Company shall give
Carrier notice of any party who shall occupy the Tower Facilities which notice
may be delivered contemporaneously with and contained in the notices provided
for in 4.7(e).
4.14. TOWER MARKING AND LIGHTING REQUIREMENTS. Tower Company shall be
responsible for designing and maintaining the Tower Facilities to comply with
any applicable marking and lighting requirements imposed by the FAA and the FCC.
Tower Company shall be responsible for the replacement of bulbs and for the
repair of the tower lighting system.
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4.15. INDEMNIFICATION AND RISK OF LOSS.
(a) Carrier shall bear the risk of loss for Carrier's Equipment
for all reasons other than the negligent acts or omissions or intentional
misconduct of Tower Company or other subtenants at a Site.
(b) Carrier shall exonerate, hold harmless, indemnify, and defend
Tower Company 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 (i) any injury to or the death of any
person; or (ii) any damage to property, if such injury, death or damage arises
out of or is attributable to or results from Carrier's use and occupancy of the
Premises, Property or the Tower Facilities or the negligent or intentional acts
or omissions of Carrier or Carrier's principals, employees, agents or
independent contractors and such injury, death or damage is not contributed to
or caused by the acts or omissions of Tower Company or Tower Company's use,
operation or ownership of the Property or the Tower Facilities; and
(c) Tower Company shall exonerate, hold harmless, indemnify and
defend Carrier 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 (i) any injury to or the
death of any person; or (ii) any damage to property, if such injury, death or
damage arises out of or is attributable to or results from Tower Company's use,
operation or ownership of the Property or the Tower Facilities, or the negligent
or intentional acts or omissions of Tower Company or Tower Company's principals,
employees, agents or independent contractors, and such injury, death of damage
is not caused by or contributed to by the acts or omissions of Carrier or
Carrier's use or operation of the Tower Facilities or Property or its ownership
interest in the Premises.
4.16. ENVIRONMENTAL INDEMNIFICATION.
(a) Carrier, its heirs, grantees, successors, and assigns shall
indemnify, defend, reimburse and hold harmless Tower Company from and against
any and all environmental damages, caused by activities conducted on the
Premises by Carrier which result in or arise from (i) the presence of Hazardous
Materials upon, about or beneath the Premises or migrating to or from the
Premises which were introduced to the Premises by Carrier, or (ii) the violation
of any environmental requirements by Carrier pertaining to the Premises and any
activities thereon. Carrier covenants that it shall not nor shall Carrier allow
its employees, agents or independent contractors to treat, store or dispose of
any Hazardous Materials on the Premises or the Property in violation of any
applicable law.
(b) Tower Company, its heirs, grantees, successors, and assigns
shall indemnify, defend, reimburse and hold harmless Carrier from and against
any and all environmental damages, caused by activities conducted on the
Premises by Tower Company which result in or arise from (i) the presence of
Hazardous Materials upon, about or beneath the Premises or migrating to or from
the Premises which were introduced to the Premises by Tower Company, or (ii) the
violation of any environmental requirements by Tower Company pertaining to the
Premises and any activities thereon. Tower Company covenants that it shall not,
nor shall Tower Company allow its employees, agents or independent contractors
to treat, store or dispose of any Hazardous Materials on the Premises or the
Property in violation of any applicable law.
4.17. INSURANCE. (a) (i) Carrier shall procure and maintain during the
term of this Master Lease and commencing with the Assignment and during the term
of any applicable SLA the following
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insurance : (A) 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 (B) excess/umbrella coverage of $2,000,000; and (C) Workers
Compensation Insurance and Employees' Liability Insurance for the statutory
limit, but in no event no less than One Million and No/100 Dollars
($1,000,000.00) and (iii) Carrier shall procure and maintain during the term of
this Master Lease and during the term of any applicable SLA the following
insurance: "All Risk" property insurance which insures Carrier's Equipment for
its full replacement cost; provided that the imposition of these limits of
insurance shall not limit the liability of Carrier hereunder. Tower Company, at
its option, may require Carrier to increase the amounts of the foregoing
insurance at the commencement of each Renewal Term of each SLA by a reasonable
amount over the amount of insurance provided herein in effect for the previous
Initial Term or Renewal Term.
(b) (i) Tower Company shall procure and maintain during the terms
of the Master Lease and commencing with the Assignment and during the term of
any applicable SLA, the following insurance: (A) comprehensive general liability
insurance with a 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 (B) excess umbrella coverage of $2,000,000;
and (C) Workers Compensation Insurance and Employees' Liability Insurance for
the statutory limit, but in no event no less than One Million and No/ 100
Dollars ($1,000,000.00); and (ii) Tower Company shall procure and maintain
during the term of this Master Lease and during the term of any applicable SLA
the following insurance: "All Risk" property insurance which insures the Tower
Facilities and the Property for its full replacement cost; provided that the
imposition of these limits of insurance shall not limit the liability of Tower
Company hereunder. Carrier may, at its option, require Tower Company to increase
the amounts of the foregoing insurance at the commencement of each Renewal Term
of each SLA by a reasonable amount over the amount of insurance provided herein
in effect for the previous Initial Term or Renewal Term.
(c) Tower Company and any party holding a security interest in the
Tower Facilities which is identified to Carrier and any party holding a security
interest in Carrier's Equipment shall be named as an additional insured on any
insurance policy procured by Carrier pursuant to this Master Lease and Carrier
and any party holding a Security Interest in Carrier Equipment which is
identified to Tower Company, shall be named as an additional insured on any
insurance policy procured by Tower Company pursuant to this Master Lease.
4.18. SUBROGATION.
(a) IN GENERAL. All insurance policies required to be maintained
by Carrier and Tower Company under this Master Lease shall contain a waiver of
subrogation provision under the terms of which the insurance carrier waives all
of such carrier's rights to proceed against Tower Company or Carrier as may be
applicable, excluding workers compensation and employee liability insurance.
(b) MUTUAL RELEASE. Tower Company and Carrier each release the
other and their respective representatives from any claim by them or any one
claiming through or under them by way of subrogation or otherwise for damage to
any person or to the Premises, the Tower Facilities or the Property, and to the
fixtures, personal property, improvements and alterations in or on the Premises
that are caused by or result from risks insured against under any insurance
policy carried by them to the extent of such insurance, provided that such
releases shall be effective only if and to the extent that the same do not
diminish or adversely affect the coverage under such insurance policies.
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4.19. DESTRUCTION OR CONDEMNATION.
(a) If the whole or any substantial part of the Premises, the
Tower Facilities or the Property shall be taken by any public authority under
the power of eminent domain, or if the whole or any substantial part of the
Premises, the Tower Facilities or the Property shall be destroyed by fire or
other casualty that is not caused by Carrier, so as to materially interfere with
Carrier's use and occupancy thereof, then, at the option of Carrier, the
applicable SLA shall cease on the part so taken on the date of possession by
such authority of that part, (or in the event that Carrier must remove Carrier's
Equipment prior to that date, the date Carrier must move Carrier's Equipment)
and any unearned rent paid in advance of such date shall be refunded by Tower
Company to Carrier within thirty (30) days of such possession, and Carrier shall
have the right to terminate the SLA upon written notice to Tower Company, which
notice shall be delivered by Carrier within thirty (30) days following the date
notice is received by Carrier of such taking or possession. If Carrier chooses
not to terminate the SLA, the rent shall be reduced or abated in proportion to
the actual reduction or abatement of Carrier's use of the Premises. In the event
of any taking, destruction or other casualty hereunder which prevents Carrier's
use and occupancy of the Premises and/or the Tower Facilities, subject to the
terms of the Ground Lease (including obtaining any necessary approvals
thereunder) Carrier shall have the option of placing a temporary communications
facility upon available space upon the Property (if any) for a period of up to
one year at a rate mutually agreeable to the parties. Carrier shall have first
right to any such available space and any other tenants, licensee, or occupants
of the Tower Site rights shall be subordinate to the rights of Carrier to such
available space.
(b) If the whole or any substantial part of the Premises, the
Tower Facilities or the Property shall be taken by any public authority under
the power of eminent domain, or if the whole or any substantial part of the
Premises, the Tower Facilities or the Property shall be destroyed by fire or
other casualty, so as to materially interfere with Tower Company's ability to
maintain and lease thereof, then, at the option of Tower Company, the applicable
SLA shall cease on the part so taken on the date of possession by such authority
of that part and any unearned rent paid in advance of such date shall be
refunded by Tower Company to Carrier within thirty (30) days of such possession,
and Tower Company shall have the right to terminate the SLA upon written notice
to Carrier, which notice shall be delivered by Tower Company within thirty (30)
days following the date notice is received by Tower Company of such taking or
possession. In the event of any taking, destruction or other casualty hereunder
which prevents Carrier's use and occupancy of the Premises and/or the Tower
Facilities, subject to the terms of the Ground Lease (including obtaining any
necessary approvals thereunder) Carrier shall have the option of placing a
temporary communications facility upon available space upon the Property (if
any) for a period of up to one year at a rate mutually agreeable to the parties.
Carrier shall have first right to any such available space and any other
tenants, licensee, or occupants of the Tower Site rights shall be subordinate to
the rights of Carrier to such available space.
4.20. DEFAULT. The occurrence of any of the following instances shall
be considered to be a default or a breach of the Applicable SLA and the Master
Lease as it may apply to the Applicable SLA (or in the event that events occur
which would constitute an event of default under the Master Lease, the Master
Lease) by Carrier:
(a) any failure of Carrier to pay Rent or any other charge for
which Carrier has the responsibility of payment under this Master Lease, or any
SLA, within fifteen (15) days of written notice thereof; or
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(b) any failure of Carrier to perform or observe any term,
covenant, provision or conditions of this Master Lease, or any SLA, which
failure is not corrected or cured by Carrier within thirty (30) days of receipt
by Carrier of written notice from Tower Company of the existence of such a
default; except such thirty (30) day cure period shall be extended as reasonably
necessary to permit Carrier to complete a cure so long as Carrier commences the
cure within such thirty (30) day cure period and thereafter continuously and
diligently pursues and completes such cure, provided, however, that in the event
such default exposes Tower Company to immediate liability for damages, fines, or
penalties or causes of breach of any other agreement to which Tower Company is a
party, Carrier shall immediately remedy such condition or Tower Company shall be
entitled to remedy such condition at Carrier's reasonable cost and expense; or
(c) Carrier shall become bankrupt, insolvent or file a voluntary
petition in bankruptcy, have an involuntary petition in bankruptcy filed against
Carrier which is not dismissed within sixty (60) days of the date of the filing
of the involuntary petition, file for reorganization or arrange for the
appointment of a receiver or trustee in bankruptcy or reorganization of all or a
substantial portion of Carrier's assets, or Carrier makes an assignment for such
purposes for the benefit of creditors;
(d) this Master Lease or Carrier's interest herein or Carrier's
interest in the Premises are executed upon or attached and such execution or
attachment is not dismissed, released or removed within thirty (30) days of the
execution or attachment; or
(e) the imposition of any lien on the Property, the Premises, the
Tower Facilities, Carrier's Equipment except as may be expressly authorized by
this Master Lease, or an attempt by Carrier or anyone claiming through Carrier
to encumber Tower Company's interest in the Tower Facilities or the Property and
such lien or encumbrance is not dismissed, released or removed within thirty
(30) days of such imposition or attempt; or
(f) the abandonment of the Premises in the event that such
abandonment would cause the revocation or rescission of any Government Approvals
for the Tower Facilities and another carrier is located upon the Tower
Facilities and such abandonment is not cured within thirty (30) days of written
notice thereof.
Tower Company and Carrier understand and agree that a default by
Carrier under the terms of any SLA shall constitute a default under that
applicable SLA but shall not constitute a default under any other SLAs or this
Master Lease, and that Tower Company shall have the right but not the obligation
to those remedies afforded to Tower Company at law or in equity and under
paragraph 4.21 of this Master Lease for each Applicable Tower Site and the
applicable SLA, provided, however, that in the event that a default occurs under
(i) more than twenty-five percent (25%) of the SLAs in effect under this
Agreement at any single instance when at least thirty-two (32) SLAs have been
fully executed, or (ii) more than 8 Sites at any single instance when less than
thirty-two (32) SLAs have been fully executed, and such defaults are not cured
within the notice periods provided herein, the aggregate of such defaults shall
constitute a default under the terms of this Agreement and Tower Company shall
have the right but not the obligation to those remedies afforded to Tower
Company at law or in equity and/or by paragraph 4.21 for the Master Lease and
for all of the Sites and the SLAs which are subject to the Master Lease. If an
event of default occurs under Section 4.21(c), such event shall constitute a
default under the terms of this Agreement and Tower Company shall have the
rights, but not the obligation to those remedies afforded to Tower Company at
law or in equity and/or by Section 4.21 of the Master Lease and for all of the
Sites and SLAs which are subject of this Master Lease. The forbearance of Tower
Company to
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exercise any remedies available to Tower Company shall not constitute a waiver
of the ability of Tower Company to exercise those remedies for the same or
subsequent defaults.
4.21. REMEDIES OF TOWER COMPANY. In the event of a default by Carrier
under the terms of paragraph 4.20 of this Master Lease and after Carrier's
failure to cure such default within the time allowed to cure such default, then
Tower Company may, in addition to all other rights or remedies that Tower
Company may have hereunder at law or in equity in regards to the Applicable
Tower Site and SLA;
(a) Terminate Carrier's right to possession of the Premises by any
lawful means, in which case the applicable SLA shall terminate and Carrier shall
immediately surrender possession of the Premises to Tower Company and Tower
Company may re-enter the Premises and take possession thereof and remove all
persons therefrom, and Carrier shall have no further claim to the Premises or
the Applicable Tower Site under this Master Lease. In the event of any such
termination, Tower Company shall also be entitled to recover from Carrier all
damages incurred by Tower Company by reason of Carrier's default or breach, and
shall have the right to set off such rents against amounts due to Tower Company
under any other SLA or any other agreement.
(b) Alternatively, Tower Company may expel Carrier from the
Premises without terminating the Applicable SLA, make such alterations and
repairs as which may be necessary in order to relet the Premises and may relet
the Premises or any part thereof for such term or terms (which may be for a term
extending beyond the term of this Master Lease or the applicable SLA) and at
such rental or rentals and upon such other terms and conditions as Tower Company
in its discretion may deem advisable. Upon each such reletting all rentals and
other sums received by Tower Company from such reletting shall be applied to the
payment of any costs and expenses of such reletting and to the payment of rental
and other charges due and unpaid hereunder. If such rentals and other sums
received from such reletting during any month are less than that to be paid
during that month by Carrier hereunder, Carrier shall pay such deficiency to
Tower Company; if such rentals and sums shall be more, Carrier shall have no
right to the excess. Such deficiency shall be calculated and paid monthly.
(c) Additionally, Tower Company may cure such defaults itself and
collect the actual costs of such cure as an addition to the Rent due under the
applicable SLA, then as an addition to the rent due under any other SLAs,
provided however that Tower Company shall only be able to collect such rents
from any other SLAs or agreements if an event of default has been declared under
this Master Lease as a result of the occurrence of defaults under twenty-five
percent (25%) or more of the SLAs or eight (8) SLAs as provided under 4.20, such
remedies to be cumulative and concurrent or sequential at the election of Tower
Company. Such remedies shall be in addition to all other rights and remedies
Tower Company may have at law or equity. All of the remedies provided in this
Agreement or in any other SLA or at law or in equity are cumulative and Tower
Company may exercise such remedies concurrently or sequentially in such order as
it may choose.
4.22. MITIGATION BY TOWER COMPANY. No efforts by Tower Company to
mitigate the damage by Carrier's default under this Master Lease shall be deemed
a waiver of Tower Company's rights to recover damages under this Master Lease.
4.23. DEFAULT BY TOWER COMPANY. The occurrence of any of the following
instances shall be considered to be a default or a breach of the Applicable SLA
and the Master Lease as it may apply to the Applicable SLA (or in the event that
events occur which would constitute an event of default under the Master Lease,
the Master Lease) by Tower Company:
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(a) any failure of Tower Company to pay any charge for which Tower
Company has the responsibility of payment under this Master Lease or any SLA
within fifteen (15) days of written notice from Carrier, or its agents or
representatives thereof;
(b) any failure of Tower company to perform or observe any term,
covenant, provision or condition of Paragraph III of this Agreement, including
without limitation, any obligation to commence and complete construction
pursuant to Paragraph 3.4 of this Agreement and any schedule, attachment or
agreement related thereto which failure is not corrected or cured by Tower
Company within ten (10) days of receipt by Tower Company of written notice from
Carrier of the existence of such a default; or
(c) any failure of Tower Company to perform or observe any other
term, covenant, provision or conditions of this Master Lease or any SLA which
failure is not corrected or cured by Tower Company within thirty (30) days of
receipt by Tower Company of written notice from Carrier of the existence of such
a default; except such thirty (30) day cure period shall be extended as
reasonably necessary to permit Tower Company to complete a cure so long as Tower
Company commences the cure within such thirty (30) day cure period and
thereafter continuously and diligently pursues and completes such cure;
provided, however, that in the event such default exposes Carrier to immediate
liability for damages, fines or penalties or causes a breach of any other
agreement to which Carrier is a party, Tower Company shall immediately remedy
such conditions or Carrier shall be entitled to remedy such condition at Tower
Company's reasonable cost and expense; or
(d) Tower Company shall become bankrupt, insolvent or file a
voluntary petition in bankruptcy, have an involuntary petition in bankruptcy
filed against Tower Company which is not dismissed within sixty (60) days of the
date of the filing of the involuntary petition, file for reorganization or
arrange for the appointment of a receiver or trustee in bankruptcy or
reorganization of all or a substantial portion of Tower Company's assets, or
Tower Company makes an assignment for such purposes for the benefit of
creditors;
(e) this Master Lease, any SLA or Tower Company's interest herein
or Tower Company's interest in the Premises, the Tower Facilities or the
Property are executed upon or attached and such execution or attachment is not
dismissed, released or removed within thirty (30) days of the execution or
attachment; or
(f) the imposition of any lien on the Tower Facilities as a result
of the actions or inactions of Tower Company or another subtenant on the Tower
Facilities, except as may be expressly authorized by this Master Lease, or an
attempt by Tower Company or anyone claiming through Tower Company to encumber
Carrier's interest in the Tower Facilities or the Property and such lien or
encumbrance is not dismissed, released or removed within thirty (30) days of
such imposition or attempt; or
Tower Company and Carrier understand and agree that a default by Tower Company
under the terms of any SLA shall constitute a default under that SLA but shall
not constitute a breach or a default under any other SLA or this Master Lease,
and that Carrier shall have the right but not the obligation to those remedies
afforded to Carrier at law or in equity and under paragraph 4.24 of this Master
Lease for each such Applicable Tower Site and applicable SLA which is subject to
this Master Lease, provided, however, that in the event that a default occurs
under (i) more than twenty-five percent (25%) of the SLAs in effect under this
Agreement at any single instance when at least thirty-two (32) SLAs have been
fully executed, or (ii) more than 8 Sites at any single instance when less than
thirty-two (32) SLAs have
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been fully executed, and such defaults are not cured within the notice periods
provided herein, the aggregate of such defaults shall constitute a default under
the terms of this Agreement and Carrier shall have the right but not the
obligation to those remedies afforded to Carrier at law or in equity and/or by
Section 4.24 of the Master Lease for this Master Lease and for all of the Sites
and the SLAs which are subject to the Master Lease. If an event of default
occurs under Section 4.23(d), such event shall constitute a default under the
terms of this Agreement and Carrier shall have the rights, but not the
obligation to those remedies afforded to Carrier at law or in equity and/or by
Section 4.24 for the Master Lease and for all of the Sites and SLAs which are
subject of this Master Lease. The forbearance of Carrier to exercise any
remedies available to Carrier shall not constitute a waiver of the ability of
Carrier to exercise those remedies for the same or subsequent defaults.
4.24. REMEDIES OF CARRIER. In the event of a default by Tower Company
under the terms of Paragraph 4.23 of this Master Lease or any SLA and after
Tower Company's failure to cure such default within the time allowed to cure
such default, then Carrier may, in addition to any other remedy available at
equity or law, (a) sue for damages; (b) terminate the applicable SLA, without
waiving its right to sue for damages; (c) cure such defaults itself and deduct
the actual costs of such cure from the Rent due under the applicable SLA, then
from the rent due under any other SLAs, and then from any other amounts due to
Tower Company from Carrier; (d) in the case of a default under Paragraph 4.23(b)
Carrier shall have the right to complete construction of or cause the completion
of the construction of the Tower Facilities without further notice to or consent
of Tower Company. Carrier shall have the right to hire or retain any contractor
it shall so choose to complete the construction of the Tower Facilities in such
event. Tower Company and its employees, contractors, subcontractors, agents and
representatives shall provide Carrier and its employees, agents,
representatives, contractors and subcontractors free, unobstructed, complete and
open access to the Property and the Easements to complete construction of the
Tower Facilities, Carrier's Equipment and anything related thereto. In addition
to any other claim, damages or remedies which Carrier may have, Tower Company
shall reimburse Carrier for the reasonable cost actually incurred for the
construction or completion of construction of the Tower Facility and any items
related thereto. Carrier may set such amounts due off against the Rent due under
the SLA for the Applicable Tower Facility or any other SLA and make claim
against Tower Company for any amounts due, such remedies to be cumulative and
concurrent or sequential at the election of Carrier. Such remedies shall be in
addition to all other rights and remedies Carrier may have at law or equity. All
of the remedies provided in this Agreement or in any other SLA or at law or in
equity are cumulative and Carrier may exercise such remedies concurrently or
sequentially in such order as it may choose.
4.25. MITIGATION BY CARRIER. No efforts by Carrier to mitigate the
damage by Tower Company's default under this Master Lease shall be deemed a
waiver of Carrier's rights to recover damages under this Master Lease.
4.26. LIMITATION OF LIABILITY. Notwithstanding anything to the contrary
contained in this Agreement, Tower Company shall not be responsible for any
incidental or consequential damages arising under this Agreement or any SLA
unless incurred or resulting from the intentional misconduct of Tower Company or
its agents, representatives, contractors, employees, officers or directors.
Notwithstanding anything to the contrary contained in this Agreement, Carrier
shall not be responsible for any incidental or consequential damages arising
under this agreement or any SLA unless incurred or resulting from the
intentional misconduct of Carrier or its agents, representatives, contractors,
employees, officers or directors.
4.27. SUBORDINATION. This Master Lease and any option or right of first
refusal granted hereunder, at Tower Company's option, shall be subordinate to
any mortgage, deed of trust, or other
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encumbrance now or hereafter placed upon the Premises and to any and all
advances made on the security thereof and to all renewals, modifications,
consolidations, replacements and extensions thereof, provided that the
beneficiary or lender under such mortgage, deed of trust or other encumbrance
enters into a satisfactory non-disturbance and attornment agreement with
Carrier.
V. GENERAL PROVISIONS
5.1. NOTICES. All notices, requests, demands or communications under
this Master Lease or any SLA by or from Tower Company to Carrier, or Carrier to
Tower Company, shall be in writing and personally delivered against receipt,
faxed, sent by overnight mail by a national recognized overnight carrier or
mailed, certified mail, return receipt requested. Such notices or demands shall
be sent to the following address:
Tower
Company: SBA Towers, Inc.
One Town Center Road, 3rd Floor
Boca Raton, Florida 33486
Attention: General Counsel
Fax: 561-997-0343
Carrier: Tritel Communications, Inc.
112 E. State Street - Suite B
Ridgeland, MS 39157
Attn: Kenneth F. Harris
Fax: 601-898-6216
The parties may change the notice addressees, addresses and fax numbers
by giving the other party notice of the change following the procedure set forth
in this paragraph.
5.2. ASSIGNMENTS AND SUBLEASES.
(a) ASSIGNMENT AND SUBLEASES BY CARRIER. (I) Carrier may not
sublease the Premises. Carrier may assign Carrier's interest in this Master
Lease, any SLA or in the Premises without obtaining Tower Company's consent to a
Carrier Affiliate, provided such Carrier Affiliate agrees to be bound hereby and
maintains at the time of such assignment, as demonstrated by current financial
statements provided to Tower Company prior to such assignment, a financial
position reasonably demonstrating the ability of such assignee to meet and
perform the obligations of Carrier hereunder through the unexpired balance of
the Initial Term or any Renewal Terms, as the case may be. For purposes of this
Master Lease, "Carrier Affiliate" shall mean a corporation, limited liability
company, partnership or other business entity that owns or controls Carrier, or
that is owned by or controlled by, or under common ownership or control with,
Carrier, or that merges or consolidates with Carrier or purchases substantially
all of the assets of Carrier or purchases a controlling interest in Carrier's
outstanding voting securities or assets. Carrier shall not otherwise
voluntarily, involuntarily or be operation of law assign, sell or otherwise
transfer Carrier's interest in this Master Lease, any SLA or in the Premises
without obtaining Tower Company's consent, which consent shall not be
unreasonably withheld, delayed or conditioned.
(II) Notwithstanding anything else contained herein, Carrier may,
without notice or consent of Tower Company, pledge, mortgage, convey by deed of
trust or security deed, assign, create a security
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interest in, or otherwise execute and deliver any and all instruments for the
purpose of securing bona fide indebtedness all or any part of Carrier's interest
in this Master Lease, any SLA, any Premises, and/or all or any portion of
Carrier's right, title, and interest in and to any and/or all of Tower
Facilities, the Property or the Easements, provided that Carrier provides Tower
Company with a subordination non-disturbance and attornment agreement reasonably
satisfactory to Tower Company. Promptly on Carrier's or Carrier's lender's
request, Tower Company shall execute and deliver, and shall assist in
facilitating the execution and delivery of, all documents requested by any of
Carrier's lenders including, but not limited to, consents to giving notice to
Carrier's lender(s) in the event of Carrier's default under the provision of the
SLA or the Master Lease, and consents to Carrier's assignment to any lender(s)
of any and all of Carrier's interest in or to this Agreement, any SLA or
Premises provided, however, that all such documents and consents shall be in a
form which is reasonably acceptable to Tower Company and which will not
materially increase Tower Company's burdens nor materially impair Tower
Company's rights under this Master Lease or any SLA. Carrier shall reimburse
Tower Company for any out-of-pocket costs incurred by Tower Company in complying
with this provision including, but not limited to, Tower Company's reasonable
attorneys' fees incurred in reviewing and negotiating such documents and
consents.
(b) LIMITATIONS ON ASSIGNMENT BY TOWER COMPANY.
(i) SUBLEASE. Tower Company shall have the right, subject to the
restrictions of this Agreement, including without limitation, the
restrictions in paragraph 4.13 hereof, to sublease space upon the Tower
Facilities, the Property or the Easements (but not the whole of the
Tower Facilities, the Property or the Easements) without obtaining
Carrier's consent, provided that such sublease does not violate the
provisions of and is subject to the provisions of this Master Lease and
any applicable SLA.
(ii) ASSIGNMENT OF MASTER LEASE OR SLAS. Tower Company may assign
Tower Company's interest in this Master Lease, any SLA, the Tower
Facilities or in the Premises without obtaining Carrier's consent to a
Tower Company Affiliate provided such Tower Company Affiliate agrees to
be bound hereby and assumes all of Tower Company's obligations under
this Agreement and such assignee maintains at the time of such
assignment, as demonstrated by current financial statements provided to
Carrier prior to such assignment, a financial position reasonably
demonstrating the ability of such assignee to meet and perform the
obligations of Tower Company hereunder through the unexpired balance of
the Initial Term and any Renewal Terms. For purposes of this Master
Lease, "Tower Company Affiliate" shall mean a corporation, limited
liability company, partnership or other business entity that owns or
controls Tower Company, or that is owned by or controlled by, or under
common ownership or control with, Tower Company, or that merges or
consolidates with Company or purchases substantially all of the assets
of Tower Company or purchases a controlling interest in Tower Company's
outstanding voting securities or assets. Tower Company shall not
otherwise voluntarily, involuntarily or be operation of law assign,
sell or otherwise transfer Tower Company's interest in this Master
Lease, any SLA or in the Premises without obtaining Carrier's consent,
which consent shall not be unreasonably withheld, delayed or
conditioned. Tower Company shall may not assign Tower Company's
interest in this Master Lease, any SLA, the Tower Facilities, any
Ground Lease or in the Premises to any other carrier or provider of
wireless communications services or competitor of Carrier.
(c) PLEDGE BY TOWER COMPANY. Notwithstanding anything else
contained herein, Tower Company may, without notice or consent of Carrier,
pledge, mortgage, convey by deed of trust or
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security deed, assign, create a security interest in, or otherwise execute and
deliver any and all instruments for the purpose of securing bona fide
indebtedness all or any part of Tower Company's interest in this Master Lease,
any SLA, any Premises, and/or all or any portion of Tower Company's right,
title, and interest in and to any and/or all of Tower Facilities, the Property
or the Easements, provided that Tower Company provides Carrier with a
subordination, non-disturbance agreement that is reasonably satisfactory to
Carrier. Promptly on Tower Company's or Tower Company's lender's request,
Carrier shall execute and deliver, and shall assist in facilitating the
execution and delivery of, all documents requested by any of Tower Company's
lenders including, but not limited to, consents to giving notice to Tower.
Company's lender(s) in the event of Tower Company's default under the provision
of the SLA or the Master Lease, and consents to Tower Company's assignment to
any lender(s) of any and all of Tower Company's interest in or to this
Agreement, any SLA or Premises provided, however, that all such documents and
consents shall be in a form which is reasonably acceptable to Carrier and which
will not materially increase Tower Company's or Carrier's burdens nor materially
impair Carrier's rights under this Master Lease or any SLA. Tower Company shall
reimburse Carrier for any out-of-pocket costs incurred by Carrier in complying
with this provision including, but not limited to, Carrier's reasonable
attorneys' fees incurred in reviewing and negotiating such documents and
consents.
(d) ASSIGNMENT OF CONSTRUCTION OBLIGATIONS. Notwithstanding
anything else contained herein, Tower Company shall not involuntarily,
voluntarily or by operation of law assign or otherwise transfer its rights or
obligations (including, but not limited to, the obligation to construct the
Tower Facilities) relating to any Applicable Tower Site or SLA which is the
subject of this Agreement, prior to the acceptance of the Applicable Site by
Carrier pursuant to paragraph 3.8 hereof.
5.3. REPRESENTATIONS AND WARRANTIES OF CARRIER. Carrier represents and
warrants to Tower Company that:
(a) ORGANIZATION, GOOD STANDING AND AUTHORITY. It 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 enter
into and perform this Master Lease and Carrier is duly qualified to do business
in the states of Alabama, Florida, Mississippi, Tennessee, and Kentucky.
(b) AUTHORIZATION AND VALIDITY OF MASTER LEASE. That Carrier's
execution and delivery of this Master Lease have been duly authorized and no
further action on the part of Carrier is necessary to authorize this Master
Lease or the consummation of the transactions contemplated herein. This Master
Lease constitutes the valid and binding obligation of Carrier duly enforceable
in accordance with its terms.
(c) NO BREACH OF OTHER INSTRUMENTS. That there is no contract or
agreement or other instrument to which Carrier is a party or by which Carrier or
its assets are bound which prohibits the execution or delivery by Carrier of
this Master Lease or the performance or observance by Carrier of any term or
condition of this Master Lease and, subject to the fulfillment of all conditions
set forth therein, neither execution and delivery of this Master Lease nor the
consummation of the transactions contemplated hereby will violate any term or
provision of any such contract, agreement, or instrument.
(d) NO VIOLATION OF LAW OR ORDER. That subject to the fulfillment
of all conditions set forth herein, neither the execution and delivery of this
Master Lease nor transactions contemplated hereby, shall result in the violation
by Carrier of any, law, regulation, judgment or order of any court or
governmental authority applicable to Carrier or result in a breach of the terms
of this or any other agreement to which Carrier is a party.
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5.4. REPRESENTATIONS AND WARRANTIES OF TOWER COMPANY. Tower Company
represents and warrants to Carrier that:
(a) ORGANIZATION, GOOD STANDING AND AUTHORITY. It is a
corporation, duly organized, validly existing and in good standing under the
laws of Florida and has the requisite corporate power and authority to enter
into and perform this Master Lease and Tower Company is duly qualified to do
business in the states of Alabama, Florida, Mississippi, Tennessee and Kentucky
and in any other Market in which Tower Company enters into an SLA or other
agreement with Carrier.
(b) AUTHORIZATION AND VALIDITY OF MASTER LEASE. That Tower
Company's execution and delivery of this Master Lease have been duly authorized
and no further action on the part of Tower Company is necessary to authorize
this Master Lease or the consummation of the transactions contemplated herein.
This Master Lease constitutes the valid and binding obligation of Tower Company
duly enforceable in accordance with its terms.
(c) NO BREACH OF OTHER INSTRUMENTS. That there is no contract or
agreement or other instrument to which Tower Company is a party or by which
Tower Company or its assets are bound which prohibits the execution or delivery
by Tower Company of this Master Lease or the performance or observance by Tower
Company of any term or condition of this Master Lease and, subject to the
fulfillment of all conditions set forth therein, neither execution and delivery
of this Master Lease nor the consummation of the transactions contemplated
hereby will violate any term or provision of any such contract, agreement, or
instrument.
(d) NO VIOLATION OF LAW OR ORDER. That subject to the fulfillment
of all conditions set forth herein, neither the execution and delivery of this
Master Lease nor transactions contemplated hereby, shall result in the violation
by Tower Company of any, law, regulation, judgment or order of any court or
governmental authority applicable to Tower Company or result in a breach of the
terms of this or any other agreement to which Tower Company is a party.
(e) TITLE. Tower Company holds good and marketable title to its
leasehold interest in the Property, the Easements, the Premises and title to the
Tower Facilities except for any items or defects which are disclosed in the
title insurance commitment which is attached to the SLA as Exhibit "F," provided
however, Tower Company's liability for a breach of this provision shall not
exceed the amount which Tower Company is entitled to recover from its title
insurance policy for such Site. Tower Company hereby agrees to obtain a policy
for title insurance for each Applicable Tower Site in an amount which shall not
be less than Two Hundred Thousand and no/100s Dollars ($200,000.00) under which
Tower Company is insured. Tower Company shall deliver a copy of the title
insurance policy for each Applicable Tower Site within six (6) months days of
the acceptance of the Applicable Tower Site pursuant to Section 3.8 of this
Agreement.
5.5. MISCELLANEOUS.
(a) SUCCESSORS AND ASSIGNS. The terms, covenants and conditions
contained in this Master Lease shall be binding upon and inure to the benefit of
the parties hereto, and also their respective heirs, executors, administrators,
personal representatives, successors and assigns subject to the provisions of
paragraph 5.2 of this Master Lease relating to restrictions upon sale,
assignment or subletting of this Master Lease.
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(b) INTEGRATION. It is understood that there are no oral
agreements or representations between the parties hereto affecting this Master
Lease and this Master Lease and the SLAs supersede and cancel any and all
previous negotiations, arrangements, agreements or representations and
understandings, if any, between the parties hereto with respect to the subject
matter thereof. There are no other representations or warranties between the
parties and all reliance with respect to representations is solely upon the
representations and agreements contained in this document except for the SLAs,
Memoranda of SLA, Assignments, Memoranda of Assignment; Estoppel Certificates,
Notices of Completion and any other documents or instruments referred to herein.
(c) HEADINGS. The Headings and paragraph titles herein are for
convenience only and do not in any way define, limit or construe the contents of
such Paragraphs.
(d) SEVERABILITY. It is agreed that if any provision of this
Master Lease shall be determined to be void by any court of competent
jurisdiction, then such determination shall not affect any other provisions of
this Master Lease and all such other provisions shall remain in full force and
effect.
(e) FORCE MAJEURE. Any prevention, delay or stoppage due to
strikes, lockouts, labor disputes, acts of God, inability to obtain labor or
materials or reasonable substitutes therefor, governmental restrictions, actions
or inactions not caused or contributed to by the Tower Company, governmental
controls not caused or contributed to by Tower Company, enemy or hostile
governmental action, civil commotion, fire or other casualty, and other causes
beyond the reasonable control of the party obligated to perform, shall excuse
the performance by such for a period equal to any such delay or stoppage.
(f) ESTOPPEL CERTIFICATE. (i) Carrier shall, upon the request of
any lender of Tower Company, but no more than five (5) times in any single year,
upon not less than ten (10) days' prior written notice from Tower Company,
execute, acknowledge and deliver to Tower Company's lender a statement in
writing on a form prescribed by Tower Company's lender reasonably acceptable to
Carrier (i) certifying that this Master Lease is unmodified and in full force
and effect (or, if modified, stating the nature of such modification and
certifying that this Master Lease as so modified is in full force and effect),
or if not in full force and effect stating that the Master Lease is not in full
force and effect and the reasons therefore, to the best of its knowledge, and
the date to which the rent and other charges are paid in advance, if any, and
(ii) acknowledging that there is not, to the best of Carrier's knowledge, any
uncured default on the part of Tower Company hereunder, or specifying such
default if any claim, provided however, that Tower Company shall reimburse
Carrier for the cost and expense, including without limitation legal expense,
for the review, alteration, revisions, completion and execution of such
document(s).
(ii) Tower Company shall, upon the request of any lender of
Carrier, but no more than five (5) times in any single year, upon not
less than ten (10) days' prior written notice from Carrier, execute,
acknowledge and deliver to Carrier's lender a statement in writing on a
form prescribed by Carrier's lender reasonably acceptable to Tower
Company (i) certifying that this Master Lease is unmodified and in full
force and effect (or, if modified, stating the nature of such
modification and certifying that this Master Lease as so modified is in
full force and effect), or if not in full force and effect stating that
the Master Lease is not in full force and effect and the reasons
therefore, to the best of its knowledge, and the date to which the rent
and other charges are paid in advance, if any, and (ii) acknowledging
that there is not, to the best of Tower Company's knowledge, any
uncured default on the part of Carrier hereunder, or specifying such
default if any is claimed, provided however, that Carrier shall
reimburse Tower Company for the
32
<PAGE>
cost and expense, including without limitation legal expense, for the
review, alteration, revision, completion and execution of such
document(s).
(g) ATTORNMENT. (i) Upon request of the mortgagee, Carrier will
attorn, as lessee under this Master Lease, to the purchaser at any foreclosure
sale thereunder, or if any ground or underlying Ground Lease is terminated for
any reason, Carrier will attorn, as Carrier under this Master Lease, to the
ground lessor under the Ground Lease, provided that such Ground Lessor or
mortgagee does not disturb Carrier's possession of the Premises and honors the
terms and conditions of this Master Lease, and Carrier and such Ground Lessor or
mortgagee will execute such instruments as may be necessary or appropriate to
evidence such attornment.
(ii) Upon request of the mortgagee, Tower Company will attorn, as
lessor under this Master Lease, to the purchaser at any foreclosure
sale thereunder.
(h) CERTAIN RULES OF CONSTRUCTION. (i) Notwithstanding the fact
that certain references elsewhere in this Master Lease to acts required to be
performed by Carrier hereunder, or to breaches or defaults of this Master Lease
by Carrier, omit to state that such breaches or defaults by Carrier are
material, unless the context implies to the contrary, all breaches or defaults
by Carrier hereunder shall be deemed material. Carrier shall be fully
responsible and liable for the observance and compliance by concessionaires of
and with all the terms and conditions of this Master Lease, which terms and
conditions shall be applicable to concessionaires as if they were Carrier
hereunder and failure by a concessionaire fully to observe and comply with the
terms and conditions of this Master Lease shall constitute a default hereunder
by Carrier.
(ii) Notwithstanding the fact that certain references elsewhere in
this Master Lease to acts required to be performed by Tower Company
hereunder, or to breaches or defaults of this Master Lease by Tower
Company, omit to state that such breaches or defaults by Tower Company
are material, unless the context implies to the contrary, all breaches
or defaults by Tower Company hereunder shall be deemed material. Tower
Company shall be fully responsible and liable for the observance and
compliance by concessionaires of and with all the terms and conditions
of this Master Lease, which terms and conditions shall be applicable to
concessionaires as if they were Tower Company hereunder and failure by
a concessionaire fully to observe and comply with the terms and
conditions of this Master Lease shall constitute a default hereunder by
Tower Company.
(i) WARRANTIES AND REPRESENTATIONS. The warranties and
representations made in this Agreement shall be deemed to be made, reaffirmed,
ratified, rewarranted and rerepresented upon the execution of each Assignment
and each SLA.
(j) COUNTERPARTS. This Master Lease may be executed in
counterparts with the same effect as if both parties hereto had signed the same
document. Both counterparts shall be construed together and shall constitute one
(1) Master Lease.
(k) INTERPRETATION. The parties hereby acknowledge that the
draftsmanship of this Agreement was a cooperative effort by both parties who
were represented by counsel and that this Master Lease shall not be construed
either for or against Tower Company or Carrier, but this Master Lease shall be
interpreted in accordance with the general tenor of the language in an effort to
reach an equitable result.
33
<PAGE>
(l) GOVERNING LAW. This Master Lease is to be governed by and
construed in accordance with the laws of the state in which the Premises is
situated.
(m) NO PARTNERSHIP. Carrier and Tower Company agree that their
relationship under this Master Lease shall be that of landlord and tenant and
that no partnership is intended or shall be created by this Master Lease.
(n) CONSENT. Tower Company and Carrier covenant that whenever
their consent or approval is required under this Master Lease said consent shall
not be conditioned or unreasonably withheld, delayed, or conditioned.
(o) ATTORNEY FEES. In the event of a breach of this Agreement, the
substantially prevailing party in any litigation arising as a result of such
breach shall be entitled to its reasonable attorney's fees and court costs
including appeals, if any.
IN WITNESS WHEREOF, Tower Company and Carrier have executed this
Master Lease and the "Effective Date" of this Master Lease shall be the last
date that this Master Lease is signed by Tower Company and Carrier.
TOWER COMPANY:
SBA TOWERS, INC.
BY:
--------------------------------------
TITLE:
-----------------------------------
DATE:
------------------------------------
TRITEL COMMUNICATIONS, INC.:
BY:
--------------------------------------
WILLIAM S. ARNETT
PRESIDENT
DATE:
------------------------------------
34
<PAGE>
LIST OF ATTACHMENTS
ATTACHMENT DESCRIPTION
- ---------- -----------
I ASSIGNMENT
II MEMORANDUM OF ASSIGNMENT
III ESTOPPEL CERTIFICATE
IV SITE LEASE AGREEMENT
V MEMORANDUM OF SITE LEASE AGREEMENT
VI SCHEDULES WITH MARKET SPECIFIC TERMS, INCLUDING WITHOUT LIMITATION
REIMBURSEMENT OF PRE-DEVELOPMENT COSTS, RENT, SCHEDULES FOR
COMPLETION OF TOWER FACILITIES AND DELIVERIES
VII NOTICE OF COMPLETION
VIII LETTER CONFIRMING COMMENCEMENT DATE
IX NON-CARRIER PERSONNEL
<PAGE>
ATTACHMENT "I"
ASSIGNMENT OF GROUND LEASE
THIS ASSIGNMENT OF GROUND LEASE AGREEMENT ("Assignment ") is made and
entered into as of the ____ day of ______________, _______, by and between
_______________ ___________________, a ___________ corporation ("Tower
Company"), and Tritel Communications, Inc., a Delaware Corporation, ("Carrier").
WHEREAS, Carrier has entered into a ground lease agreement, lease
agreement or other similar agreement (the "Ground Lease") for the lease of the
real property more particularly described in Exhibit "A" attached hereto (the
"Property") upon which Carrier has constructed or intends to construct a tower
and related facilities and for an easement for ingress, egress and utilities
over the real property more particularly described in Exhibit "B" attached
hereto, (the "Easement");
WHEREAS, Carrier desires to assign the Ground Lease for said Property,
a copy of which is attached hereto as Exhibit "C", to Tower Company; and
WHEREAS, Tower Company desires to develop the tower and certain
facilities on the Property and sublease a portion of the space upon the Tower
Facilities to Carrier.
NOW THEREFORE, for and in consideration of the mutual promises outlined
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Carrier and Tower Company do hereby agree as
follows:
1. Assignment. Carrier does hereby assign to Tower Company without
warranty or representation and Tower Company shall and hereby assumes and agrees
to be bound by the Ground Lease, or such other contract through which Carrier
has acquired an interest in the real property which is the subject of the Ground
Lease together with the Easements.
2. Covenants of Carrier. Carrier covenants that it:
(a) unconditionally and absolutely assigns, transfers, sets over and
conveys to Tower Company, without warranty or representation all of Carrier's
right, title and interest in, to and under the Ground Lease and the Easements
except as such rights may be limited or modified by any (if any) addenda
attached to the Ground Lease. Carrier represents and wan-ants to Tower Company
that all addenda to the Ground Lease are attached to this Agreement as part of
Exhibit "C". The Easements, if any, in addition to the Ground Lease are attached
hereto as Exhibit "D".
(b) to the best of its knowledge, without independent inquiry or
investigation, has no knowledge or notice of any default, defense, offset,
claim, demand, counterclaim or cause of action which may presently exist under
the Ground Lease; and
(c) to the extent Carrier may assign, Carrier irrevocably assigns,
transfers, conveys and sets over to Tower Company without warranty or
representation and Tower Company accepts from Carrier all of the right, title
and interest of Carrier under each and all of the following items (without
warranty that any of the following may be assigned):
(i) the Federal Aviation Administration application, responses,
approvals and registration numbers submitted or received by
Carrier with respect to the tower proposed to be
constructed on the Property;
<PAGE>
(ii) the zoning permits and approvals, variances, building
permits and such other federal, state or local governmental
approvals which have been gained or for which Carrier has
made application;
(iii) the construction, engineering and architectural drawings
and related site plan and surveys pertaining to the
construction of the Tower Facilities on the Property;
(iv) the geotechnical report for the Property which has been
commissioned by Carrier;
(v) the title reports, commitments for title insurance,
ownership and encumbrance reports, title opinion letters,
copies of instruments in the chain of title or any other
information which may have been produced regarding title to
the Property and the Easements;
(vi) the environmental assessments including phase I reports and
any reports relating contemporaneous or subsequent
intrusive testing, the "FCC Checklist" performed pursuant
to National Environmental Protection Act requirements and
any other information which may have been produced
regarding the environmental condition of the Property,
Easements or neighboring real property; and
(vii) any other documents, instruments, agreements, plans or
items which Carrier may have obtained in connection with
the Ground Lease, the Property, the Easements, or for
construction of a tower upon the Property.
The items described in paragraphs 2(c) may hereinafter be collectively referred
to as "Site Acquisition Items"; and
(d) shall use diligent reasonable efforts to assist Tower Company in
obtaining an estoppel certificate from the Lessor in the Ground Lease in
substantially the same form as is attached to the Master Lease as Attachment 3
("Estoppel Certificate"); and
(e) agrees to indemnify and to forever defend and hold harmless Tower
Company from and against any and all loss, cost, damage and expense ever
suffered or incurred by Tower Company by reason of any act or omission of
Carrier under the Ground Lease before the date of this Assignment, including,
without limitation any default by Carrier under the Ground Lease.
3. Covenants of Tower Company. Tower Company covenants that:
(a) Tower Company hereby assumes the Ground Lease and all of Carrier's
duties and obligations under the Ground Lease arising subsequent to the date
hereof and Tower Company hereby agrees to promptly and faithfully perform all of
the obligations of Carrier under the Ground Lease.
(b) Tower Company agrees to indemnify and to forever defend and hold
harmless Carrier from and against any and all loss, cost, damage and expense
ever suffered or incurred by Carrier by reason of any act or omission of Tower
Company under the Ground Lease from and after the date of this Assignment,
including, without limitation any default by Tower Company under the Ground
Lease.
4. Master Lease. This Assignment is being executed pursuant to the
terms of a Master Build To Suit and Lease Agreement (the "Master Lease") and in
the event that there is a conflict between the terms and conditions of the
Master Lease, this Assignment, the terms and conditions of this Assignment
4
<PAGE>
shall control. This Assignment shall remain subject to the remaining terms and
conditions of the Master Lease.
IN WITNESS WHEREOF, Tower Company and Carrier have signed this
Agreement as of the date and year first above written.
CARRIER: TOWER COMPANY:
TRITEL COMMUNICATIONS, INC. SBA TOWERS, INC.
By: By:
---------------------------------- ----------------------------------
Name: Kenneth Harris Name:
-------------------------------- --------------------------------
Title: Director, Site Acquisition and Title:
Property Administration
------------------------------- -------------------------------
5
<PAGE>
EXHIBIT "A"
LEGAL DESCRIPTION OF THE PROPERTY
6
<PAGE>
EXHIBIT "B"
LEGAL DESCRIPTION OF EASEMENTS
7
<PAGE>
EXHIBIT "C"
COPY OF GROUND LEASE
8
<PAGE>
EXHIBIT "D"
COPY OF EASEMENTS, IF ANY
9
<PAGE>
ATTACHMENT "II"
THIS INSTRUMENT SITE NAME: INDEXING INSTRUCTIONS
PREPARED BY: SITE ID:
- ------------------------------ ------------------------------
- ------------------------------ ------------------------------
- ------------------------------ ------------------------------
- ------------------------------ ------------------------------
Memorandum of Assignment of Prime Lease
This memorandum evidences that an assignment was made and entered into by
written Assignment of Prime Lease (the "Assignment") dated ___________________,
1999, between - ___________________, a ________________ corporation ("Tower
Company") and TRITEL COMMUNICATIONS, INC., a Delaware corporation ("Carrier")..
Such Agreement provides in part that Carrier assigns to, and Carrier does hereby
assign to Tower Company that certain Option and Lease Agreement or similar lease
agreement (the "Lease") dated ________ ________, for the lease of real property
(the "Property") located in _________ County, in the state of ___________, which
Property is more particularly described on Exhibit "A" attached hereto and made
a part hereof, a memorandum (the "Memorandum") of which lease is of record in
__________________ in the ____________________________office for recording real
property records in the __________________ County of the state of
________________________. Carrier hereby assigns the Lease and Memorandum of
Lease to the Tower company pursuant to the terms of the Assignment.
IN WITNESS WHEREOF, the parties have executed this Memorandum as of the day and
year first above written.
TOWER COMPANY
SBA TOWERS, INC.
By:
-----------------------------------
Its:
----------------------------------
Address:
------------------------------
- --------------------------------------
CARRIER
TRITEL COMMUNICATIONS, INC.
By: Kenneth Harris
-----------------------------------
Its: Director, Site Acquisition and
Property Administration
----------------------------------
Address:
------------------------------
- --------------------------------------
10
<PAGE>
[ACKNOWLEDGEMENTS]
11
<PAGE>
EXHIBIT "A"
REAL PROPERTY DESCRIPTION
OF PROPERTY LEASED
12
<PAGE>
ATTACHMENT III
ESTOPPEL CERTIFICATE
THIS INSTRUMENT is given as of this ______ day of ____________________,
_____, by ___________________________ ("Lessor") to
________________________________, a _________________________ corporation
("Assignee" or "Tower Company").
RECITALS
A. Lessor entered into a Lease Agreement or similar agreement with
___________ (_____) numbers of addenda attached thereto, (collectively, the
"Prime Lease") dated as of the ________day of ___________, _____with Tritel
Communications, Inc., a Delaware corporation ("Lessee").
B. Lessee desires to assign its interest in the Prime Lease to
Assignee.
C. Assignee seeks Lessor's acknowledgment, as of the date of execution
of this Instrument, of certain matters affecting the Prime Lease.
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, intending to be legally bound:
1. Lessor's Estoppel Certificate. Lessor hereby certifies, with the
understanding that Assignee is relying upon the statements made herein, the
following:
a. The Prime Lease with _____ number of addenda constitutes the entire
agreement between the parties with respect to the Premises. The Prime Lease has
not been amended and there are no other agreements between Lessor and Lessee
with respect to the property or the easements which are described in the Prime
Lease.
b. The Prime Lease is in full force and effect in accordance with its
terms. To the best of Lessor's knowledge, neither Lessee nor Lessor is in
default under any of the terms of the Prime Lease, and Lessor has not received
actual or constructive notice of the existence of any event which, with the
passage of time or the giving of notice or both, would constitute a default
under the Prime Lease.
c. All applicable Prime Lease fees and rent (if any) and other charges
and payments due Lessor from Lessee under the Prime Lease have been paid in full
through the date hereof (except reimbursements for real estate taxes, insurance,
utilities or other reimbursements, if any, due for fiscal periods to the extent
not yet payable).
2. Consent. Lessor hereby acknowledges the right of Lessee to assign
the Prime Lease to Assignee and agrees that all terms of the Prime Lease shall
be in full force and effect between Lessor and Assignee as if Lessor and
Assignee were the original parties to the Prime Lease and that such assignment
shall not violate the terms of the Prime Lease, will not create or cause the
Assignee to be liable for any rent in excess of $__________ per month during the
Initial Term or be considered a sublease under the terms of the Prime Lease or
any addenda thereto.
3. Release. (a) Lessor, with the intention of binding itself and its
successors and assignees, expressly forever releases and discharges Lessee and
its successors and assigns from all claims, demands, actions, grievances,
controversies, contracts, promises, agreements, causes of action, in both law
and
13
<PAGE>
equity, judgments and executions, damages of whatever nature, past or
present, known and unknown, that it ever had, or now has, known or unknown, or
that anyone claiming through or under Lessor may now have or claim to have,
against Lessee which arise from the Prime Lease or any instruments, documents or
actions or omissions related thereto, but no further or otherwise.
(b) Lessor, with the intention of binding itself and its successors
and assignees, expressly forever releases and discharges Assignee and its
successors and assigns from all claims, demands, actions, grievances,
controversies, contracts, promises, agreements, causes of action, in both law
and equity, judgments and executions, damages of whatever nature, past or
present, known and unknown, that it ever had, or now has, known or unknown, or
that anyone claiming through or under Lessor may now have or claim to have,
against Assignee which arise from the Prime Lease or any instruments, documents
or actions or omissions related thereto which occurred or accrued prior to the
date of this Estoppel Certificate, but no further or otherwise.
4. Reliance. Lessor understands that Assignee and Lessee are relying on
the information contained in this Instrument, and agrees that Assignee and
Lessee may rely on this information, for purposes of determining whether to
consummate their transaction. Further, Assignee's and Lessee's subsidiaries,
affiliates, legal representatives and successors and assigns may rely on the
contents of this Instrument. A facsimile of this instrument delivered to
Assignee by telecopier shall be deemed an original for all purposes.
5. Notice: Non-Disturbance. Assignee intends to grant a sub-leasehold
interest to Lessee pursuant to a sublease dated the _____ day of _____________,
_______ (the "Sublease") Lessor shall give notice to Lessee at the same time
that Lessor gives notice to Assignee of any default under the Prime Lease, and
Lessor shall accept a cure of any such default from Lessee on Assignee's behalf.
In such case, Lessee shall be entitled to reimbursement from Assignee of any
amount paid or obligation incurred in respect thereof. So long as the Lessee is
not in default under the Sublease beyond any applicable grace or cure period
(during the term or any renewal term and not at or beyond the final renewal term
of the Sublease if all renewal terms are exercised under the Sublease including
any agreed upon extensions), Lessee shall be permitted quiet enjoyment of the
Premises under the Sublease notwithstanding any termination or expiration of the
Prime Lease and notwithstanding any termination or expiration of the Prime
Lease, Lessor agrees at the request of the Lessee, to honor the terms and
conditions of the Sublease for the remainder of the term thereof and any renewal
terms, but not beyond the final renewal term of the Prime Lease if all renewal
terms are exercised under the Prime Lease, including any agreed upon extensions.
Lessee agrees, at the request of Lessor to attorn to the Lessor upon the terms
and conditions of the Sublease for the remainder of the term thereof (whether
original or renewal) and any renewal terms, and that the Sublease shall continue
in full force and effect as if the Lessor were the sublandlord under the
Sublease notwithstanding the expiration or termination of the Prime Lease.
6. Sublease. Lessor agrees that Assignee may sublease all or any
portion of the Property to any person or business entity to engage in wireless
communications, transmission or reception. Lessor further consents to: (a) the
sublease of all or any portion of the Property by Assignee, (b) subleases of all
or any portion of the Property by Assignee to any other person or business
entity to engage in wireless communications transmissions or reception (or
both), and (c) the assignment of the Prime Lease to a parent, subsidiary or
affiliate of Assignee.
7. Assignment. (A) Assignee may from time to time grant to certain
lenders (the "Lenders") a lien on and security interest in all assets and
personal property of Assignee located on the Property, including, but not
limited to, all accounts receivable, inventory, goods, machinery and equipment
owned by Assignee (the "Personal Property") as collateral security for the
repayment of any indebtedness to the Lenders, (B) (i) the Lenders may, in
connection with any foreclosure or other similar action relating to the
14
<PAGE>
Personal Property, enter upon the Property (or permit their representatives to
do so on their behalf) in order to implement a foreclosure or other action
without liability to Lessor; provided, however, that (ii) rent is paid to
Assignee during occupancy by or on behalf of the Lenders for any purpose, (iii)
the Lenders pay for any damages caused by the Lenders or their representatives
in removing the Personal Property from the Property, and (iv) the Lenders
otherwise comply with the terms of the Prime Lease, (C) Lessor hereby agrees to
subordinate any security interest, lien, claim or other similar right,
including, without limitation, rights of levy or distraint for rent, Lessor may
have in or on the Personal Property, whether arising by agreement or by law, to
the liens and/or security interests in favor of the Lenders, whether currently
existing or arising in the future, (D) nothing contained herein shall be
construed to grant a lien upon or security interest in any of Lessor's assets,
(E) to the extent required by the terms of the Prime Lease, Lessor consents to
any grant by Assignee to any Lenders of a lien on Assignee's leasehold interest
in the Prime lease, (F) in the event Lessor gives Assignee any notice of default
or termination of the Prime Lease (or commence any legal process relating
thereto), Lessor will endeavor to simultaneously give a duplicate copy thereof
to the Lenders but shall incur no liability due to Lessor's failure to give such
notice and the failure to give such notice shall not limit Lessor's ability to
exercise any remedies available to Lessor under the Prime Lease, (G) Lessor
agrees to accept performance on the part of any of the Lenders or their agents
or representatives as though performed by Assignee to cure any default or
condition for termination, (H) the terms of this Paragraph may not be modified,
amended or terminated except in writing signed by the Lenders and (I) by this
Estoppel Certificate Lessor has been made aware that Assignee has entered into
that certain Amended and Restated Credit Agreement dated as of February 5, 1999
with Lehman Commercial Paper, Inc. ("Lehman") as agent for a group of lenders,
all of whom shall be considered Lenders for purposes of this Paragraph and are,
together with their successors and assigns, intended third party beneficiaries
hereof and any notices to any Lenders required or desired to be given hereunder
shall be directed to Lehman or to such other Lender as Lehman or Tower Company
designate in writing or at such other address as such party shall specify.
8. Recording. The recording of this Estoppel Certificate by either the
Lessee or Assignee for recording in the real property records of the county in
which the property which is the subject of the Prime Lease is located shall
serve as notice to the public of the existence of the Prime Lease and further
confirm that the assignment described herein has been consummated and is
effective. In connection with such recording, the copy of the Prime Lease shall
be omitted from the recorded counterpart hereof solely for recording purposes.
9. Notices. Any Notices to be received by Assignee, Lessee or Lessor
under the Prime Lease, the Sublease, or this Estoppel Certificate shall be
deemed properly given if marked to Assignee, Lessor or Lessee with proper
postage or sent via a reputable overnight carrier to the following address:
TO TOWER
COMPANY: Tower Company:
SBA Towers, Inc.
One Town Center Road, Third Floor
Boca Raton, Florida 33486
Attention: General Counsel
Fax: 561-997-0343
TO LESSEE: Tritel Communications, Inc.
112 E. State Street
Suite B
Ridgeland, MS 39157
Attention: Kenneth F. Harris
Fax: 601-898-6216
15
<PAGE>
TO LEHMAN: Lehman Commercial Paper, Inc.
Three World Trade Center
New York, New York
Attention: Mr. Michael O'Brien 10285
TO LESSOR:
---------------------------------------
---------------------------------------
---------------------------------------
IN WITNESS WHEREOF, Lessor and Assignee have executed this Instrument
as of the date set forth above.
SBA TOWERS, INC.
By:
----------------------------------------
Its:
---------------------------------------
Address:
-----------------------------------
LESSOR:
- -------------------------------------------
By:
----------------------------------------
Its:
---------------------------------------
Address:
-----------------------------------
16
<PAGE>
APPROPRIATE ACKNOWLEDGMENTS FOR
STATE WHERE PROPERTY IS LOCATED
17
<PAGE>
ATTACHMENT IV
SITE LEASE AGREEMENT
THIS SITE LEASE AGREEMENT ("SLA") is executed this ______ day of
__________________, ________, by and between ______________________________, a
_________________ corporation ("Tower Company") and TRITEL COMMUNICATIONS, INC.
("Carrier").
WHEREAS, on the ___ day of ___________________, ____, Tower Company and
Carrier entered into that certain Master Build To Suit and Lease Agreement
("Master Lease") which provides for the execution of individual SLAs for each
Site owned by Tower Company upon which Carrier desires to mount certain antenna,
structures and other equipment.
NOW THEREFORE, for $10.00 and other good and valuable consideration,
the legal receipt and sufficiency of which is hereby mutually acknowledged and
agreed upon, the Tower Company and the Carrier hereby agree as follows:
1. DEFINED TERMS. Any terms not defined herein shall have the meaning
set forth in the Master Lease.
2. SITE. Subject to the terms of the Master Lease, Tower Company hereby
leases and grants to Carrier and Carrier hereby leases from and accepts from
Tower Company space to install, maintain, operate, upgrade and remove Carrier's
wireless communications equipment and appurtenances on the tower owned by Tower
Company ("Tower Facilities"), the location of which Tower Facilities are shown
on Exhibit "B", including antennas and microwave dishes between the heights of
_____________________ and ________________ above ground level on the Tower
Facilities and which Tower Facilities are located on certain real property
leased by Tower Company more particularly described in Exhibit "A" attached
hereto ("Property"); and to install, maintain, operate and remove Carrier's
compound and related devices (including, but not limited to emergency
generators, equipment shelters, equipment cabinets, all necessary test equipment
and any temporary construction materials) owned by Carrier on a hundred
(_____)square foot portion of the Property at a location to be agreed upon in
writing between Tower Company and Carrier, which is shown as the cross hatched
area shown on Exhibit "B". Tower Company has granted and hereby grants unto
Carrier for the Initial Term and any Renewal Term an easement for ingress,
egress and utilities during the term of the Master Lease over the property
described in Exhibit "C" attached hereto ("Easement") (the space occupied by
Carrier on the Property and the Tower, all cabling, wiring, conduit, etc. to and
from the Tower and to and from Carrier's Equipment, and the Easement hereinafter
shall be referred to collectively as the "Premises") (The Tower Facilities,
Property and Easement shall constitute and hereinafter be referred to and known
as the "Site"). The Site is more commonly known to Tower Company as the
________________ Site. The Site is more commonly known to Carrier as the
________________ Site.
3 COMMENCEMENT DATE. The Commencement Date of this SLA shall be the
later of (i) the date that Tower Company completes installation of Carrier
Equipment on the Premises in the event that the Tower Company is installing
Carrier's Equipment on the Premises or (ii) fifteen (15) days after Carrier has
accepted the Tower Facilities pursuant to Paragraph 3.8, of the Master Lease; or
(iii) in the event that Carrier has not accepted the Tower Facilities pursuant
to Paragraph 3.8, fifteen (15) days after the date that the Tower Facilities are
substantially complete and Carrier is able to operate the Carrier Equipment upon
the Tower Facilities in compliance with all laws, rules and regulations. In the
event that Carrier reasonably disputes Tower Company's assertion that all items
on a Punch List have been completed and the uncompleted item precludes Carrier's
installation or operation of its equipment, the Commencement Date shall be the
date on which such item has been completed to the reasonable
18
<PAGE>
satisfaction of Carrier. Carrier and Tower Company shall execute a letter
agreement which shall be attached to this SLA confirming the calendar date which
the parties understand to be the Commencement Date for each SLA.
4 EQUIPMENT. A description of the equipment, antennae, mounting height
of the antenna and other personal property of Carrier which Carrier intends to
locate on the Site ("Carrier's Equipment") is described in Exhibit "D" attached
hereto. Carrier will not install any equipment on the Site which is not
described in Exhibit "D" without Tower Company's prior, written consent, which
consent shall not be unreasonably withheld, delayed or conditioned. Tower
Company and Carrier acknowledge and agree that Carrier may substitute, add,
alter, modify and replace Carrier's Equipment described in Exhibit "D" upon the
Tower Facilities pursuant to the provisions of Section 3.9 of the Master Lease.
5. GROUND LEASE AND TITLE COMMITMENT. A copy of the Ground Lease for
this Site is attached hereto as Exhibit "E". A copy of the Title Insurance
Commitment regarding the title to the Site is attached hereto as Exhibit "F".
6. EFFECT OF AGREEMENT. Tower Company and Carrier acknowledge that the
Master Lease is the controlling agreement between the parties with regard to
Carrier's lease of the Site. This SLA is intended to supplement the Master Lease
and fulfill the requirements of Section 2 of the Master Lease. In the event of
any conflict between the terms of the Master Lease and this SLA, the terms and
provisions of this SLA shall control.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first set forth above.
TOWER COMPANY
SBA TOWERS, INC.
By:
-------------------------------------
Name:
-----------------------------------
CARRIER:
TRITEL COMMUNICATIONS, INC.
By:
-------------------------------------
Name: Kenneth Harris
Title: Director, Site Acquisition and
Property Administration
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EXHIBIT "A"
LEGAL DESCRIPTION OF THE PROPERTY
20
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EXHIBIT "B"
SURVEY OR MAP OF THE SITE WITH LOCATION OF TOWER AND
GROUND SPACE SHOWN AND GROUND SPACE CROSS-HATCHED
21
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EXHIBIT "C"
LEGAL DESCRIPTION OF EASEMENTS
22
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EXHIBIT "D"
EQUIPMENT LIST
23
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EXHIBIT "E"
GROUND LEASE
24
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EXHIBIT "F"
A COPY OF TITLE INSURANCE COMMITMENT FOR THE APPLICABLE
TOWER SITE AND ANY EASEMENTS
25
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ATTACHMENT V
This instrument Prepared By: Site Name:___ Site ID:____ Indexing Instructions
- ---------------------------- ----------------------------
- ---------------------------- ----------------------------
- ---------------------------- ----------------------------
MEMORANDUM OF SITE LEASE AGREEMENT
This memorandum evidences that a lease was and hereby is made and entered into
by written Site Lease Agreement dated _______________________, 19_____, between
____________________________, a __________________ corporation ("Tower Company")
and TRITEL COMMUNICATIONS, INC., a Delaware corporation ("Carrier").
Such Agreement provides in part that Tower Company leases to Carrier and Tower
Company does hereby lease to Carrier space upon a tower (which tower is located
as shown on Exhibit "B") (the "Tower") between the heights of ________ and
________ above ground level, which Tower is located upon the real property
located at ______, City of _______, County of _______, State of ______, which
real property is described in EXHIBIT A attached hereto (the "Site" or the
"Property") and certain space ("Ground Space") upon the Property which is
described on Exhibit "B" or which is shown as the cross-hatched area on a plat
or survey attached hereto as Exhibit "B" with runs for cable, wiring, conduit,
etc. to the Tower and the Ground Space and with a grant of and Tower Company
hereby grants a non-exclusive easement for unrestricted rights of access thereto
and to electric and telephone facilities which are described on Exhibit "A"
and/or shown on Exhibit "B" such lease and easement to be for a term of five (5)
years commencing on ________, 19__, which term is subject to four (4) additional
five (5) year extension periods by Carrier.
IN WITNESS WHEREOF, the parties have executed this Memorandum as of the day and
year first above written.
TOWER COMPANY:
SBA TOWERS, INC.
BY:
--------------------------------
TITLE:
--------------------------------
DATE:
--------------------------------
TRITEL COMMUNICATIONS, INC.:
BY:
--------------------------------
TITLE:
--------------------------------
DATE:
--------------------------------
26
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EXHIBIT "A"
Property
Attached hereto Metes and Bound Description of the Real Property
27
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EXHIBIT "B"
GROUND SPACE:
ATTACH HERETO THE SITE PLAN FOR THE SITE WITH THE GROUND SPACE CROSS
HATCHED AND THE TOWER IDENTIFIED.
28
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ATTACHMENT VI
SCHEDULES WITH MARKET SPECIFIC, INCLUDING WITHOUT LIMITATION REIMBURSEMENT OF
PRE-DEVELOPMENT COSTS, RENT, SCHEDULES FOR COMPLETION OF TOWER FACILITIES AND
DELIVERIES
See Schedules Attached
29
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SCHEDULE 1 TO ATTACHMENT "VI"
OF MASTER LEASE BETWEEN
TOWER COMPANY AND CARRIER
MARKET SPECIFIC TERMS
1. CARRIER MARKET: Nashville Market - This Schedule shall apply to the Nashville
Market only.
2. NUMBER OF SITES: --
(a) Carrier shall and hereby grants to Tower Company the right to
develop, construct and lease a minimum of twenty-seven (27) Tower Facilities in
the Nashville Market more particularly described in Exhibit A attached hereto.
In the event that Carrier does not require the construction of 27 new Tower
Facilities in the Nashville Market during the 1999 calendar year, all of the new
Tower Facilities which Carrier must construct and install in the Nashville
Market in the 1999 calendar year, which Carrier intends to assign to a third
(3rd) party, shall be constructed, developed and owned by Tower Company. In the
event that the Tower Company elects not to accept an Applicable Tower Site or
otherwise terminates its obligations in regards to an Applicable Tower Site or
does not complete an Applicable Tower Site the total number of Tower Facilities
to be constructed in the Nashville Market by Tower Company will be reduced by
the number of Applicable Tower Sites rejected, terminated or not otherwise
completed.
(b) Subject to Tower Company's right to terminate its obligations with
respect to an Applicable Tower Site prior to commencement of construction of the
Tower Facilities pursuant to Section 2.1(b)(ii)(B) of the Master Lease, Tower
Company acknowledges and agrees that the Tower Company has agreed to accept
build, develop and lease all of the Tower Sites in the Nashville Market,
provided that such Tower Sites meet the following criteria:
(i) That the Tower Site can be operated as a multi-tenant tower
site; and
(ii) That the Tower Site is not adjacent in close proximity (within
one-half mile) to any other towers or tower sites which tower
has space upon it that is available for lease and which space is
actually available for lease to third parties upon a freely
commercial basis; and
(iii) That the Ground Lease does not contain any provisions which
require the Tower Company to pay additional rent in the event
that it subleases or licenses space to another party upon the
Tower Facility; and
(iv) That the Ground Lease and/or Government Approvals do not require
the Tower Company to place a stealth, camouflaged, disguised or
similar type tower facility upon the Tower Site.
Such Tower Facilities shall hereinafter be referred to as the
"Acceptable Tower Site Candidates."
Subject to the Tower Company's right to terminate its obligations with
respect to an Applicable Tower Site prior to commencement of construction of the
Tower Facilities pursuant to Section 2.1(b)(ii)(B) of the Master Lease, in the
event that the Tower Company rejects, does not accept or terminates its
obligations or otherwise fails to complete or does not otherwise complete the
construction and installation of Tower Facilities and the Carrier Equipment upon
twenty percent (20%) or more of the Acceptable Tower Site Candidates in the
Nashville Market, subject to the Force Majeure provisions set forth in Section
5.5(e) of the Master Lease, such actions shall constitute an Event of Default
under the Master Lease after fifteen (15) days written notice from Carrier, in
the event that such actions and failures are not cured within such fifteen (15)
day period. Upon the occurrence of such event of default, without further notice
or demand, the Carrier shall have the right to withhold and not provide or
assign any additional Tower Sites to the Tower Company for development or
construction and Tower Company shall
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have no right to and hereby waives the right to require Carrier to assign or
otherwise provide it with any Tower Sites, Ground Leases, Pre-Development
Information or other information or documentation relating to any Tower Facility
or Tower Site not assigned to the Tower Company previous to the date of the
notice of the occurrence of event of default. In addition thereto, for any Tower
Sites which the Tower Company has not applied for a building permit, Carrier
shall have the right to require the Tower Company to assign or reassign any or
all Ground Leases under the Applicable Tower Sites in the Nashville Market to
Carrier or its assignee, to assign or reassign any or all Pre-Development
Information to Carrier or its assignee and to assign or reassign any other
easements, leases, licenses, subleases, contracts, suppliers contracts or
agreements regarding or related to any or all of the Applicable Tower Sites in
the Nashville Market to the Carrier or its assignee. In such event, Carrier
shall reimburse Tower Company for the Pre-Development Costs which Tower Company
actually incurred for Pre-Development Information which is reassigned to the
Carrier and which Pre-Development Information is reasonably acceptable to
Carrier up to the amounts listed for each milestone listed in Section 3 of this
Schedule.
3. PRE-DEVELOPMENT COSTS:
(a) For each Tower Site for which Carrier has obtained Pre-Development
Information, which Pre-Development Information is reasonably
acceptable to Tower Company or Carrier as may be applicable,
according to industry standards, Tower Company shall reimburse
Carrier for the Pre-Development Information for the Applicable
Tower Site within ten (10) days of the execution of the Assignment
based upon the following milestones (or in the event that the
Tower Company reassigns or assigns the Ground Lease and
Pre-Development Information to the Carrier pursuant to the
provisions of this Schedule or the Agreement, the Carrier shall
reimburse the Tower Company for such Pre-Development Information):
i) In the event that a Candidate Site Report, including the
identification of 3 leasable, zonable and constructable
candidates (or if Carrier has already approved a Tower Site
for the search ring based upon a radio-frequency analysis,
one (1) Tower Site), coordination of the site visit and
submission of reports regarding the zoning summary, permit
summary and a site sketch, for the Applicable Tower Site has
been obtained, the reimbursement shall be up to [CONFIDENTIAL
TREATMENT REQUESTED] per site for the Pre-Development Costs
which have been incurred in connection with obtaining the
Candidate Site Report.
ii) In the event that a fully executed Ground Lease for the
Applicable Tower Site has been obtained, the reimbursement
shall be up to [CONFIDENTIAL TREATMENT REQUESTED] per site
for the Pre-Development Costs, which have been incurred in
connection with obtaining the Ground Lease;
iii) In the event that a Ground Lease for the Applicable
Tower Site has been obtained and all the necessary zoning
approvals or administrative body or commission approval or a
confirmation that no further zoning approvals are required
for the Site, the reimbursement shall be up to [CONFIDENTIAL
TREATMENT REQUESTED] per Tower Site for the Pre-Development
Costs which have been incurred in connection with obtaining
the Ground Lease and zoning approvals for the Applicable
Tower Site. Zoning approvals do not include or mean building
permits;
iv) In the event that a geotechnical analysis for the
Applicable Tower Site has been obtained, the reimbursement
shall be up to [CONFIDENTIAL TREATMENT
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<PAGE>
REQUESTED] per Tower Site for the Pre-Development Costs which
have been incurred in connection with obtaining the
geotechnical analysis for the Applicable Tower Site;
v) In the event a complete environmental study for the
Applicable Tower Site has been obtained, the reimbursement
shall be up to [CONFIDENTIAL TREATMENT REQUESTED] per Tower
Site for the Pre-Development Costs which have been incurred
in connection with obtaining the environmental study for the
Applicable Tower Site;
vi) In the event a title insurance commitment or title report
for the Applicable Tower Site has been obtained, the
reimbursement shall be up to [CONFIDENTIAL TREATMENT
REQUESTED] per Tower Site for the Pre-Development Costs which
have been incurred in connection with obtaining the title
insurance commitment or title report for the Applicable Tower
Site; in the event that the actual cost of the title
insurance commitment or report is more than [CONFIDENTIAL
TREATMENT REQUESTED], the reimbursing party shall pay for the
actual cost of the title upon the submission of a copy of the
actual invoice up [CONFIDENTIAL TREATMENT REQUESTED];
vii) In the event a survey for the Applicable Tower Site has
been obtained, the reimbursement shall be up to [CONFIDENTIAL
TREATMENT REQUESTED] per Tower Site for the Pre-Development
Costs which have been incurred in connection with obtaining
the survey for the Applicable Tower Site;
viii) In the event Federal Aviation Administration Approval
for the Applicable Tower Site has been obtained,
reimbursement shall be up to [CONFIDENTIAL TREATMENT
REQUESTED] per Tower Site for the Pre-Development Costs which
have been incurred in connection with obtaining Federal
Aviation Administration Approval;
ix) In the event that a Ground Lease, Zoning Approvals and
the complete survey and architectural and engineering
designs, plans and specifications for the Applicable Tower
Site have been obtained, the reimbursement shall be up to
[CONFIDENTIAL TREATMENT REQUESTED] per Tower Site for the
Pre-Development costs which have been obtained in connection
with obtaining the Ground Lease, zoning approval and survey
and architectural and engineering designs, plans and
specifications for the Applicable Tower Site. The items in
Paragraph 3(a)(i) through 3(a)(viii) are included in the
amount to be reimbursed under 3(a)(ix) and neither party
shall be entitled to recover the amounts provided in
Paragraphs 3(a)(i) through 3(a)(viii) in addition to the
amount to be paid under Paragraph 3(a)(ix); and
x) In the event that the Ground Lease, all Pre-Development
Information, and all building permits for the Applicable
Tower Site have been obtained, the reimbursement shall be up
to [CONFIDENTIAL TREATMENT REQUESTED] per Tower Site for the
Pre-Development Costs which have been obtained in connection
with obtaining the Ground Lease and building permits for the
Applicable Tower Site. The items in Paragraph 3(a)(i) through
3(a)(ix) are included in the amount to be reimbursed under
3(a)(x) and neither party shall be entitled to recover the
amounts provided
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<PAGE>
in Paragraphs 3(a)(i) through (3)(a)(ix) in addition to the
amounts to be paid under Paragraph 3(a)(x).
The payment for reimbursement of Pre-Development Information shall be
made within thirty (30) days of the date that the Assignment is executed by both
parties.
4. SCHEDULE OF COMPLETION:
a) Tower Company and Carrier will agree on or before June 4, 1999 upon
a schedule for the delivery of building permits for each Applicable Tower Site
and such schedule and the terms thereof shall be attached to this Schedule 1 as
Exhibit "A" and incorporated herein as if recited, upon the execution of such
exhibit by the duly authorized officers of Carrier and Tower Company. Tower
Company shall deliver to Carrier all Pre-Development Information, a building
permit and any other permits necessary for the commencement of construction upon
an Applicable Tower Site by the dates listed beside each Tower Site on Exhibit
"A" which shall be attached to this Schedule 1. In the event that the Tower
Company has not delivered all Pre-Development Information to the Carrier which
Carrier deems reasonably necessary for the completion of construction of the
Tower Facilities upon the Applicable Tower Site, including without limitation a
building permit, on or before the date listed next to each Applicable Tower Site
or Search Ring listed in Exhibit "A", subject to delays from substantial labor
disputes, fire, unusual delay in deliveries not caused by or contributed to by
Tower Company or its contractors, abnormal adverse weather conditions not
reasonably anticipated, or government actions or inactions not caused or
contributed to by Tower Company, or other unavoidable casualties or similar
causes beyond reasonable control of Tower Company or Tower Company's contractor,
Carrier shall have the right to terminate the Notice of Acceptance and its
obligations with respect to the Applicable Tower Site by providing the Tower
Company notice of such termination. In the event that the applicable SLA has
been signed and executed, it shall be deemed terminated and void without further
notice or agreement. Additionally upon such termination, Tower Company shall
assign or reassign and deliver to Carrier any Ground Lease, Pre-Development
Information and any other contracts, agreements, leases, subleases, contracts,
suppliers contracts or documents related to the Applicable Tower Site which
Tower Company may have regarding the Applicable Tower Site and Carrier shall
assume any reasonable obligations thereunder, the cost of which are provided for
under this Agreement or the SLA and Carrier shall be obligated to the Tower
Company for the Pre-Development Costs which have been agreed upon pursuant to
the terms of this Agreement, including without limitation any Pre-Development
Costs previously reimbursed by the Tower Company to the Carrier. In the event
that the Tower Company fails to deliver the building permit by the deadlines
imposed upon Schedule I and Exhibit A for any specific Tower Site (but not more
than twenty percent (20%) of the Tower Sites), such single failure shall not
give Carrier the right to terminate the Master Lease.
b) Subject to Tower Company's right to terminate its obligations with
respect to an Applicable Tower Site prior to commencement of construction of the
Tower Facilities pursuant to Section 2.1(b)(ii) (B) of the Master Lease, and, in
the event that Tower Company fails to deliver all Pre-Development Information
and the building permits for twenty percent (20%) or more Tower Sites for which
Tower Company has given Carrier a Notice of Acceptance on or before the dates
listed on Exhibit "A" as may be extended from time to time by mutual agreement
or pursuant to the force majeure provision of Paragraph 5.5 (e) of this
Agreement, such event shall constitute an Event of Default under the terms of
this Agreement, and in addition to the remedy provided above, Carrier shall be
entitled to all other remedies available under this Agreement and at equity or
law.
c) Tower Company shall deliver, construct, complete, install and
deliver each Tower Facility and all of the Carrier Equipment upon the Applicable
Tower Site within sixty (60) days of the issuance of a building permit for the
Applicable Tower Site excepting those Applicable Tower Sites
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delayed by Carrier's actions or inactions or those Tower Sites delayed beyond
Tower Company's control, including, but not limited to, governmental approvals,
moratoria, FAA or force majeure.
d) The timely completion and installation of the Tower Facilities and
Carrier Equipment is of the essence in this Agreement and each SLA, and by
execution of this Schedule, Tower Company confirms that the completion dates
provided in this Schedule and exhibit provide a reasonable period for the
completion and installation of the Tower Facilities and the Carrier Equipment.
Tower Company acknowledges that if Tower Company does not complete the Tower
Facilities and the installation of the Carrier Equipment within sixty (60) days
of the issuance of a building permit, Carrier will incur substantial damages
from, among other things, the delayed operation of the Carrier Equipment. If the
Tower Facilities and Carrier Equipment are not completed and installed within
sixty (60) days of the issuance of a building permit, and provided that Tower
Company has not reassigned or assigned the Ground Lease and all Pre-Development
Information to the Carrier, Tower Company must pay to Carrier the sum of
[CONFIDENTIAL TREATMENT REQUESTED] per week (or any portion thereof) per Tower
Facility beyond the completion date until the Tower Facilities have been
completed.
5. RENT:
(a) Initial Term. As consideration for the use and occupancy of the
Premises under any SLA during the Initial Term, Carrier shall pay Tower Company
or such entity as Tower Company may designate from time to time, on the first
day of each calendar month during the Initial Term, the sum of [CONFIDENTIAL
TREATMENT REQUESTED] per month, except as may otherwise be provided in an SLA
for an Applicable Tower Site (the "Rent"). Rent shall be payable on the first
day of each month in advance to Tower Company at Tower Company's address as
specified in Paragraph 4.5(t) of the Master Lease. In the event that the
Commencement Date is other than the first day of a calendar month, Rent shall be
prorated over the number of days remaining in the month in which the SLA
commenced and shall thereafter be paid on the first day of each calendar month.
Tower Company and Carrier shall execute a letter agreement to attach to each SLA
to confirm the amount of the Rent.
(b) Renewal Terms. In the event that Carrier elects to renew an SLA as
provided in paragraph 3.5 of the Master Lease, Rent shall be increased by
[CONFIDENTIAL TREATMENT REQUESTED] over the Rent accruing under the immediately
prior term of the SLA.
(c) Lowest Rent. Tower Company further agrees that Carrier will be
deemed to be Tower Company's most important and favored customer at any
Applicable Tower Site and will always receive priority in terms of rent payable
for the use of any portion of any Applicable Tower Site. Upon entering into an
agreement which allows an entity which has similar operations to Carrier (i.e.)
(i) the provision of analog or digital telecommunications services to the
public, and such tenant intends to lease a similar amount of space upon the
Tower Facilities and the Site or (ii) intends to place transmitting equipment of
the same magnitude and nature upon the Tower Facility to attach equipment to the
Tower Facilities on a Site (a "Subsequent User"), Tower Company must deliver to
Carrier a copy of the fully executed agreement with a Subsequent User. If the
rent or other compensation paid by a Subsequent User is less than the Rent paid
by Carrier for the use of the Premises on the Site, the Rent for that Site will
be reduced to an amount equal to the rent or other compensation payable by the
Subsequent User. Any reduction in Rent for the use of a Site will commence on
the date that the Subsequent User commences rent payments, and the Rent
reduction will continue throughout the remainder of the term of the Subsequent
User's lease for so long as the compensation paid by the Subsequent User is less
than that paid by Carrier (including any Renewal Terms). The parties will enter
into an amendment to the SLA for that Site specifying the new Rent payable by
Carrier and the commencement date of the reduced Rent. Notwithstanding the
foregoing, in the event that the Subsequent User's rent is reduced because of
other compensation paid to the Tower Company (which may or may not be related to
the rent), Tower Company and Carrier will
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compute and agree upon the "true value" of the Subsequent user's rental amount
based upon all factors, elements and components which were consideration for the
setting of the Subsequent Use s rent (by the Tower Company) and reach a mutual
agreement as to the amount (if any) that Carrier's Rent should be reduced.
6. Installation of Carrier Equipment. Carrier and Tower Company acknowledge and
agree that Tower Company shall be obligated to perform the services described in
Paragraph 6 and to provide the materials set forth in Exhibit B attached hereto
with respect to the Carrier Equipment in accordance with the Plans provided to
Tower Company by Carrier pursuant to this Agreement (collectively, the "Carrier
Equipment Work"), and Carrier shall perform all other obligations with respect
to the installation of the Carrier Equipment, including (i) purchasing,
delivering and setting Carrier's cabinet upon the Premises, and (ii) purchasing
and delivering Carrier's coaxial cable, connectors, jumpers and antennae.
a. Materials - Tower Company shall provide the materials set forth in
Exhibit B attached hereto.
b. Project and Construction Management - Tower Company shall perform civil
construction activities, including project management (scheduling, cost
tracking and reporting, expediting, resource allocation) and
construction management (subcontractor qualification, bidding/bid
walk/bid review and award, on-site construction supervision and punch
list resolution). Tower Company will assign both a project manager and
a construction manager to work with Carrier throughout the construction
and installation of the Carrier Equipment upon the Tower Facilities and
the Applicable Tower Site. Said managers will be responsible for the
coordination, scheduling, tracking and reporting of all development
tasks Tower Company is performing for Carrier at all Sites, and will
work closely with appropriate Carrier personnel to ensure the timely
quality implementation of Carrier's equipment at the Sites.
c. Equipment Pad Installation - Tower Company will install, per Carrier's
specifications, up to a 10' x 15' monolithic concrete equipment pad
inside the Applicable Tower Site compound area.
d. Power and Telephone Utilities Installation - Tower Company will bring
dedicated 200 Amp electrical service to the Carrier Equipment by
providing a 200 Amp meter base separated for (a) 100 Amp disconnect for
Carrier's initial equipment, and (b) 100 Amp disconnect for Carrier's
future equipment. Tower Company will install two (2) 2" Schedule 40 PVC
underground conduits with pull strings from the Applicable Tower Site's
common telephone utility points of demarcation to Carrier's Equipment
location on the ground. Carrier will separately meter its electric
utility service. Carrier will be responsible for placing service orders
with the electric and telephone service providers at the Site. Tower
Company will coordinate the utility site walk with the utility
companies. Tower Company will obtain all easements and/or right-of-ways
needed for the provision of utility service to Carrier.
e. Antenna System Installation - Carrier will provide their antennae,
coaxial cable, jumpers and connectors at Carrier's sole cost and
expense and shall delivery the antennae, coaxial cable, jumpers and
connectors to the Tower Site for installation by Tower Company upon
five (5) days prior written notice by Tower Company to the Carrier.
Tower Company shall provide and deliver to Carrier a detailed receipt
of all such deliveries. The Tower Company shall perform
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<PAGE>
mobilization and install nine (9) lines, nine (9) antennae and mounts
at the height agreed to by Carrier and Tower Company in the SLA.
Additionally, if required by Carrier, Tower Company will install one
(1) microwave dish. The Tower Company shall supply and install a
waveguide ladder, sector mounts, any microwave mounts and a 10'
waveguide bridge from the Tower to Carrier's Equipment. The Tower
Company shall install the antennae system by the date described in
Section 4 of this Schedule. Carrier will retain responsibility for the
storage, delivery, offloading and installation of their electronics
cabinets or frames. Tower Company shall perform the sweep tests upon
completion of the installation, provided that Carrier provides Tower
Company with Carrier's sweep test requirements simultaneously with the
delivery of the Plans, and the sweep tests will be subject to Carrier's
approval, which approval shall not be unreasonably withheld, delayed or
conditioned.
f. Grounding System - Tower Company will install a buried ring ground
around Carrier's equipment pad or foundation, connect this ring to the
main site ground ring and provide a stub to connect to Carrier's main
grounding bus bar (or similar connection) using 5/8" x 10'-0" stainless
steel or galvanized ground rods at 10' on centers. Tower Company will
also connect the tower-mounted coax grounding kits to a grounding bus
connected to the primary site grounding system. Tower Company will make
the final connection of the ground ring stub and the final coax
grounding kit connections to their main equipment ground bus at the
time of the electronics equipment installation. Ground ring connections
will be cadwelded while coax grounding kit connections will be
mechanical. Single point grounding must be maintained to ensure the
integrity of the overall site ground. Carrier may perform grounding
tests upon completion of the grounding system and Carrier's approval of
such grounding tests shall not be unreasonably withheld, delayed or
conditioned.
g. As Built Drawings - Tower Company will provide as-built drawings to
Carrier of each Applicable Tower Site which detail all pertinent
information relating to Carrier's equipment and antenna system at the
Applicable Tower Site and shall substantially conform to the
specifications supplied by Carrier.
h. Punch List & Acceptance - Upon final completion of the Carrier's
Equipment Installation at each Applicable Tower Site by Tower Company
in accordance with the provisions of this Agreement, Tower Company
shall request, in writing, final inspection of the Applicable Tower
Site, which inspection shall include review of the sweep tests. Carrier
will inspect the Carrier's Equipment Installation within three (3)
business days of the receipt of Tower Company's notice that the Carrier
Equipment installation is complete. Within three (3) business days of
inspection, Carrier will either provide a signed writing evidencing
final acceptance of the Carrier Equipment Installation or, through the
use of a punch list form, advise Tower Company of the portions of the
Carrier Equipment Installation that are defective or incomplete or of
obligations that have not been fulfilled but are required for final
acceptance. Any failure of Carrier to complete such inspection or punch
list within such three (3) day periods shall not constitute an Event of
Default under the terms of this Schedule, the Agreement or any SLA, but
in such event the completion dates for installation of the Carrier
Equipment in this Schedule shall be extended automatically an
additional day for each day beyond the three (3) day period that
Carrier delays such inspection and/or punch list. Tower Company shall
complete any unfinished or defective portion of the Carrier Equipment
Installation which are necessary to install and operate Carrier's
equipment within ten (10) business days following issuance of the punch
list, subject to an extension as needed for completion if Tower Company
has made diligent efforts to cure the Punch List items within the ten
(10) day period, and was unable to complete the Punch List items for
reasons beyond the reasonable control of Tower Company. Carrier shall
not be deemed to have accepted the Carrier Equipment Installation as
complete until completion of all items on the Punch List.
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i. Change Order - If materials, equipment or labor are required in
response to a request of Carrier to alter the Applicable Tower Site or
expand the Carrier Equipment Installation (i.e. a "Change Order"), and
such Change Order is not within the Carrier Equipment Installation
covered by the scope of work identified in this Schedule, Tower Company
may, at its discretion, supply such materials, equipment or labor
itself or obtain them from independent contractors, provided that the
delegation of such services do not substantially delegate all of Tower
Company's obligations under this Agreement. If Tower Company supplies
any materials, equipment or labor in addition to the scope of work
provided herein, it shall be at a reasonable rate mutually agreed upon
by Carrier and Tower Company, which shall be no more than the
prevailing rate in the industry.
j. Permits - Tower Company shall obtain, at its expense, all necessary
local and municipal permits, licenses, inspections, certificates and
approvals necessary to complete the Carrier Equipment Installation, and
shall ensure compliance with all state environmental laws. Tower
Company shall pay all fees for such permits, licenses, inspections,
certificates or approvals to the appropriate government body or other
entity.k. Tower Company shall not cause or allow (which shall mean any
occurrence or item which is within the Tower Company's Control) any
involuntary liens or encumbrances to be recorded against the Tower
Facilities or the Carrier Equipment, including without limitation,
liens and encumbrances (a) arising out of or related to the performance
of the construction, all liens and encumbrances of any contractors,
subcontractor, laborer, mechanic or materialman for labor performed or
material furnished in connection with the performance of the
construction; (b) liens or encumbrances arising from taxes or
assessments, except for liens and encumbrances for taxes or assessments
which are not yet due and payable; or (c) liens or encumbrances which
may materially adversely impair Carrier's interest. In the event any
such lien or encumbrance is recorded against all or any part of the
Tower Facilities or the Carrier Equipment, Tower Company shall, within
thirty (30) days after its receipt of notice that such a lien or
encumbrance has been recorded, either (a) have such lien or encumbrance
released of record, or (b) deliver to Carrier a bond, in form, content
and amount, an issued by a surety, reasonably satisfactory to carrier,
indemnifying Carrier against all costs and liabilities resulting from
such lien or encumbrance. Upon the delivery to Carrier of the bond
specified in alternative (b) above, Tower Company may contest the
validity of such lien or encumbrance. Once such a lien or encumbrance
is released of record, for any reason, any bond provided to Carrier
hereunder shall be released and returned to Tower Company.
1. Payment for Carrier Installation Work -- Carrier shall pay the Tower
Company [CONFIDENTIAL TREATMENT REQUESTED] for the installation of the
Carrier Equipment as contemplated in Section 6 of this Schedule, within
thirty (30) days after Tower Company has completed the installation of
the Carrier Equipment and receipt of an invoice from Tower Company, and
has been accepted by Carrier pursuant to Punch List in paragraph 6(g)
of this Schedule. The parties agree, however, that the cost for any
services or equipment that Carrier requires Tower Company to provide in
addition to those specified in or contemplated by this paragraph 6,
shall be charged as an additional cost in an amount to be mutually
agreed upon by the parties.
7. REPRESENTATIONS - Notwithstanding any other provision contained in
this Schedule or any other terms of this Agreement, the following terms and
conditions shall apply with respect to the materials, equipment and services
provided hereunder:
a) Tower Company, its agents, subcontractors, and employees shall
perform the Carrier Equipment Installation as independent
contractors, and not as agents, partners, joint
37
<PAGE>
venturers or employees of Carrier. Tower Company shall supervise
and direct the Carrier Equipment Installation, using the care and
skill ordinarily used by members of Tower Company's profession
practicing under similar conditions at the same time and in the
same geographic area, and Tower Company shall be solely
responsible for all construction means, methods, techniques,
sequences and procedures and for coordinating all portions of the
Carrier Equipment Installation.
b) Unless otherwise specifically provided in the Carrier Equipment
Installation, Tower Company shall provide and pay for all labor,
supervision, materials, construction surveys and layout,
equipment, tools, construction equipment and machinery, water,
heat, utilities, transportation, and other facilities and services
necessary for the proper execution and completion of the
Applicable Tower Site consistent with the terms of this Schedule
and the Agreement.
c) Tower Company shall at all times enforce strict discipline and
good order among its employees.
d) Tower Company hereby represents and warrants to Carrier that all
materials and equipment incorporated in the Applicable Tower Site
by Tower Company will be new unless otherwise requested in writing
by Tower Company and agreed to in writing by Carrier prior to
their use and all such materials and equipment shall be of good
quality. Tower Company further represents and warrants that the
Carrier's Equipment Installation to be performed under this
Agreement, and all workmanship, materials and equipment provided,
furnished, used or installed in construction of the same by Tower
Company, shall be safe, substantial, good quality and durable
construction in all respects, and that all of the Carrier's
Equipment installation will be free from faults and defects which
impact the operation of the Carrier Equipment, and in conformance
with the terms of this Agreement. The warranty for the services
provided by Tower Company at each Applicable Tower Site shall be
for a period of twelve (12) months from the date of full
acceptance of the Site by Carrier (the "Warranty Period"). Tower
Company represents, warrants and agrees that the Carrier Equipment
shall be constructed and installed in a good and workmanlike
manner and in accordance with the plans and specifications for the
installation of the Carrier Equipment and all applicable federal,
state and local laws, ordinances, rules and regulations and shall
be of good quality, free from faults and patent defects.
e) Tower Company agrees to correct any defective portion of the
Applicable Tower Site or the Carrier Premises that was constructed
or installed by Tower Company which occurs or accrues during the
Warranty Period and which Carrier provides Tower Company notice of
within nine (9) months of the expiration of the warranty period.
Upon Tower Company's receipt of written notice of a defect in the
Applicable Tower Site or the Carrier Premises that arises from
construction or installation performed by Tower Company, Tower
Company will examine the defect within ten (10) days notice of the
defect. If there is a defect, Tower Company will pay all expenses
of such examination. If, however, there is no defect, Carrier will
pay all expenses of such examination. If Tower Company fails,
after ten (10) days following written notice from Carrier: (i) to
commence and continue correction of such defective Carrier
Equipment Installation with diligence and promptness; (ii) to
perform the Carrier Equipment Installation; or (iii) to comply
with any other provision of this Agreement, Carrier may correct
and remedy any such deficiency in addition to any other remedies
it may have. Tower Company shall not be responsible for reasonable
delays caused by inclement weather that would delay a
38
<PAGE>
reasonable contractor's performance of the installation of a
wireless antennae system substantially similar to the Carrier
Equipment Installation set forth herein.
f) Tower Company shall supervise and direct the Carrier Equipment
Work using Tower Company's professional skill and attention. Tower
Company shall be solely responsible for and have control over
construction means, methods, techniques, sequences and procedures
and for coordinating all portions of the Carrier Equipment Work on
the Tower Facilities under this Agreement excluding the placement
and setting of any cabinet or shelter and equipment contained
therein; and.
g) Tower Company shall enforce strict discipline and good order among
the employees and other persons carrying out this Agreement. Tower
Company shall not permit continued employment of unfit persons or
persons not skilled in tasks assigned to them who are performing
work in connection with this Agreement; and
h) Tower Company shall provide Carrier (and its employees, agents and
contractors) access to the Carrier Equipment Work in preparation
and progress wherever located, provided that such access shall not
interfere with the Carrier Equipment Work; and
i) Tower Company shall pay all royalties and license fees; shall
defend suits or claims for infringement of patent rights and shall
hold Carrier harmless from loss on account thereof, but shall not
be responsible for such defense or loss when a particular design,
process or product of a particular manufacturer or manufacturers
is required by or supplied by Carrier unless Tower Company has
reason to believe that there is an infringement of patent.
j) Tower Company shall be responsible for initiating, maintaining and
supervising all safety precautions and programs in connection with
the performance of the Agreement. Tower Company shall take
reasonable precautions for safety of, and shall provide reasonable
protection to prevent damage, injury or loss to:
(1) employees on the Carrier Equipment Work, the Tower
Facilities or the Applicable Tower Site and other persons who
may be affected thereby;
(2) the Carrier Equipment Work, the Tower Facilities, the
Applicable Tower Site and materials and equipment to be
incorporated therein; and
(3) other property at the Applicable Tower Site or adjacent
thereto.
8. DEFINITION OF CARRIER EQUIPMENT. "Carrier's Equipment" or "Carrier Equipment"
shall mean the equipment that may be installed at the Tower Site by the Carrier
which would not exceed (a) nine panel antennae and line or its equivalent and
not more than fifteen (15) feet of vertical space upon the Tower Facilities
including any vertical separation and (b) ground space sufficient to encompass a
ten (10) foot by fifteen (15) foot pad.
9. SCHEDULE IS MODIFICATION. This Schedule shall be added to and modify the
terms and conditions of the Master Lease and hereby is incorporated into the
terms of the Master Lease. In the event that there is a conflict or
contradiction between the terms and conditions of the Master Lease and this
Schedule, the terms and conditions of this Schedule shall control.
39
<PAGE>
IN WITNESS WHEREOF, Tower Company and Carrier have signed this Schedule as of
the date and year first above written.
CARRIER: TOWER COMPANY:
TRITEL COMMUNICATIONS, INC. SBA TOWERS, INC.
By: By:
----------------------------------- -----------------------------------
William S. Arnett Jeffrey S. Langdon
President Vice President of Sales & Marketing
40
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT B CSSI MATERIAL TAKE-OFF FORM
CLIENT: #REF! SITE NAME: #REF! BID #: 1597
------------ ---------------------- -----
TOWER TYPE: #REF! SITE NO.: ANT. HT. 190'
====================================================================================================================================
QTY. DESCRIPTION
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
ANTENNASCOMSAT PCSS065-13
10' Waveguide Bridge
4 GROUND BAR 24"
GROUND BAR 30"
GROUND BAR 48" ANGLE
7/8" COMSCOPE COAX
7/8" COMSCOPE CONNECTORS
7/8" GND.KIT-FIELD ATTACK-2 HOLE LUG, 36" (Comscope) SNAP IN
HANGER KIT (10) 7/8" (Comscope) HANGER KIT - STANDARD (10) 7/8"
(Comscope) 7/8" HOISTING GRIP (Comscope) 1-5/8 COMSCOPE COAX
1-5/8" COMSCOPE CONNECTORS
27 1-5/8" GRD.KIT-FIELD ATTACH. - 2 HOLE LUG, 36" (Comscope)
50 SNAP IN HANGER KIT (10) 1 5/8" (Comscope)
2 HANGER KIT-STANDARD (10) 15/8" (Comscope)
9 1 5/8" CABLE HOISTING GRIP (Comscope)
8 WEATHERPROOFING / SPLICE PROTECTION KIT
5 ANGLE MEMBER ADAPTER KIT (10) UNIVERSAL
5 ROUND MEMBER ADAPTER KIT (10) 2"-3"
6' JUMPER - PDMNM-6- /12" FLC PREMIUM (Comscope)
ORIGINAL MATERIAL TOTAL [CONFIDENTIAL
TREATMENT
REQUESTED]
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
41
<PAGE>
ATTACHMENT VII
NOTICE OF COMPLETION OF TOWER FACILITIES
Carrier
Re: Notice of Completion of Tower Facilities ("Notice") for
Site #__________ ("____________ Site")
Dear ____________:
On the _____ day of ______________, ____ the Tower Facilities at the
__________ Site were completed in accordance with the terms and conditions of
the Master Lease between Tower Company and Carrier. Pursuant to Paragraph 3.8 of
the Master Lease, Carrier has a period of three (3) days after the date of this
Notice of Completion to provide a Punch List of items to be completed by Tower
Company in order to render the Tower Facilities completed in accordance with the
Plans and Specifications in the opinion of Carrier.
Sincerely,
-------------------------------
42
<PAGE>
ATTACHMENT VIII
_____________, 19__
- -----------------------------------
- -----------------------------------
- -----------------------------------
Re: Site Lease Agreement
Site:
Dear ________________________:
Tritel Communications, Inc. ("Carrier") and _________________________(the
"Tower Company") entered into a Site Lease Agreement for the above-captioned
site. The Site Lease Agreement provides that Carrier and Tower Company shall
execute a letter agreement which shall be attached to the SLA confirming the
calendar date which the parties understand to be the Commencement Date for each
SLA.
Carrier and Tower Company agree that the Commencement Date for the
above-referenced site is _________________________.
By countersigning this letter, Tower Company acknowledges and agrees to the
Commencement Date listed above for the Site. This letter shall constitute an
amendment to the Site Lease Agreement.
TRITEL COMMUNICATIONS, INC.
By:
-----------------------------------------
Kenneth Harris
Its: Director, Site Acquisition and Property
Administration
Acknowledged and Agreed to this ____ day of _______________, ____.
SBA Towers, Inc.
By:
------------------------------
Its:
-----------------------------
43
<PAGE>
ATTACHMENT IX
LIST OF NON-CARRIER PERSONNEL
APPROVED TO HAVE ACCESS TO TOWER SITES
EMPLOYEES, OFFICERS AND DIRECTORS OF ERICSSON, INC.
EMPLOYEES, OFFICERS AND DIRECTORS OF BECHTEL TELECOMMUNICATIONS
EMPLOYEES, OFFICERS AND DIRECTORS OF GALAXY ENGINEERING
SERVICES (A SUBSIDIARY OF WORLD ACCESS, INC.)
44
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT B CSSI MATERIAL TAKE-OFF FORM
- ------------------------------------------------------------------------------------------------------------------------------------
CLIENT: #REF! SITE NAME: #REF! BID #: 1597
------------ ---------------------- -----
TOWER TYPE: #REF! SITE NO.: ANT. HT. 190'
- ------------------------------------------------------------------------------------------------------------------------------------
QTY. DESCRIPTION
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
ANTENNASCOMSAT PCSS065-13
10' Waveguide Bridge
4 GROUND BAR 24"
GROUND BAR 30"
GROUND BAR 48" ANGLE
7/8" COMSCOPE COAX
7/8" COMSCOPE CONNECTORS
7/8" GND.KIT-FIELD ATTACK-2 HOLE LUG, 36" (Comscope) SNAP IN
HANGER KIT (10) 7/8" (Comscope) HANGER KIT - STANDARD (10) 7/8"
(Comscope) 7/8" HOISTING GRIP (Comscope) 1-5/8 COMSCOPE COAX
1-5/8" COMSCOPE CONNECTORS
27 1 5/8" GRD.KIT-FIELD ATTACH. - 2 HOLE LUG, 36" (Comscope)
50 SNAP IN HANGER KIT (10) 1 5/8" (Comscope)
2 HANGER KIT-STANDARD (10) 15/8" (Comscope)
9 1 5/8" CABLE HOISTING GRIP (Comscope)
8 WEATHERPROOFING / SPLICE PROTECTION KIT
5 ANGLE MEMBER ADAPTER KIT (10) UNIVERSAL
5 ROUND MEMBER ADAPTER KIT (10) 2"-3"
6' JUMPER - PDMNM-6- /12"FLC PREMIUM (Comscope)
ORIGINAL MATERIAL TOTAL [CONFIDENTIAL
TREATMENT
REQUESTED]
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
45
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT A TO SCHEDULE 1
Client / Project Location: TriTel Comm. Inc./Nashville, TN
Prepared by: Russell Black
- ------------------------------------------------------------------------------------------------------------------------------------
SITE REGION CLIENT SBA SEARCH AREA LATITUDE LONGITUDE TOWER TOWER FORECAST FORECAST
TYPE SITE I.D. SITE I.D. NAME TYPE HEIGHT ZONING BP
(BTS OR NUMBER NUMBER RECEIVED RECEIVED
SITE DEV)
FORECAST FORECAST
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 B MA 083-193 TNTT10080-001 Smith Brothers 36 24 33 87 12 7.5 Guyed 300' 7/27/99 8/3/99
2 B MA 314-006 TNTT10080-002 Brown Street 36 08 28.4 86 46 04.7 MP 150' 7/9/99 7/9/99
3 B MA 341-020 TNTT10080-003 Whites Creek 36 14 51.9 86 47 9.5 MP 190' 7/23/99 7/23/99
4 B MA 314-037 TNTT10080-004 Brush Hill 36 13 10.4 86 43 42.5 MP 150' 7/9/99 7/9/99
5 B MA 314-039 TNTT10080-005 Donelson West 36 10 31.5 86 40 58 Flag Pole 100' 8/4/99 8/4/99
6 B MA 314-043 TNTT10080-006 Mclevain 36 14 36.8 86 30 .01 MP 190' 5/21/99 6/19/99
7 B MA 314-054 TNTT10080-007 Laguardo 36 17 35 86 26 12.5 MP 185' 5/21/99 6/19/99
8 B MA 314-117 TNTT10080-008 Huddleston Oil Co 35 52 37 86 25 42 MP 150' 8/9/99 8/13/99
9 B MA 314-119 TNTT10080-009 East Clark Blvd 35 52 01 86 23 15 MP 130' 8/30/99 9/6/99
10 B MA 314-121 TNTT10080-010 Old Harding Pike 36 06 1.7 86 52 18.9 MP 180' 7/23/99 7/23/99
11 B MA 314-127 TNTT10080-011 Sockit 36 01 29.1 86 53 10.4 MP 160' 8/30/99 9/6/99
12 B MA 314-149 TNTT10080-0012 Thompson Station 35 47 21.6 86 54 27.8 MP 150' 7/27/99 8/3/99
13 B MA 314-150 TNTT10080-013 Levergne 36 00 01.3 86 32 37.9 MP 150' 6/28/99 7/5/99
14 B MA 314-157 TNTT10080-014 Old Hwy 50A 35 32 53 86 59 39.1 Guyed 250' 6/9/99 6/18/99
15 B MA 314-175 TNTT10080-015 Kings Ridge 36 11 90.4 86 33 40.0 Guyed 250' 5/21/99 6/19/99
16 B MA 314-183 TNTT10080-016 Zion Rd 35 34 43.6 87 08 03.7 Guyed 250' 6/9/99 6/18/99
17 B MA 314-184 TNTT10080-017 Hwy 99 West 35 37 6.9 87 8 14.1 Guyed 250' 6/9/99 6/18/99
18 B MA 314-185 TNTT10080-018 Newt Hood Rd. 35 37 59.9 86 57 24.7 Guyed 250' 6/7/99 6/11/99
19 B MA 314-182 TNTT10080-019 Columbia South 35 34 52.1 87 02 54.4 Guyed 250' 6/9/99 6/18/99
20 B MA 083-196 TNTT10080-020 Memorial McMilliam 36 33 55 87 24 02 250' 7/27/99 8/3/99
21 B MA 314-017 TNTT10080-021 Hyedes Ferry Pike 36 12 17.7 86 51 15.5 MP 150' 7/23/99 7/23/99
22 B MA 314-055 TNTT10080-022 Lakeside 36 17 58.2 86 29 26.6 Guyed 250' 7/16/99 7/23/99
23 B MA 314-107 TNTT10080-023 Buckeye Bottom 35 58 25.3 86 26 54.6 MP 190' 7/14/99 7/21/99
24 B MA 314-144 TNTT10080-024 Franklin West 35 55 37.3 86 54 09 MP 150' 7/26/99 8/2/99
25 B MA 314-173 TNTT10080-025 Rembrandt 36 13 28.1 86 33 23.3 190' 8/20/99 8/25/99
26 B MA 314-192 TNTT10080-026 Stroudsville Road 36 27 14.7 86 07 22.2 Lattice 300' 7/30/99 8/6/99
====================================================================================================================================
TOTAL SITES COMPLETE MONTH TO DATE 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL SITES 26 26
- ------------------------------------------------------------------------------------------------------------------------------------
SBA Towers, Inc. Tritel Communications, Inc.
By: By:
----------------------------------------- -----------------------------------------
Title: Title:
-------------------------------------- --------------------------------------
Name: Name:
--------------------------------------- ---------------------------------------
Date: Date:
--------------------------------------- ---------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
46
<PAGE>
Exhibit 23.2
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Tritel, Inc.:
We consent to the use of our report dated February 16, 1999 related to the
consolidated financial statements of Tritel, Inc. and Predecessor Companies as
of December 31, 1997 and 1998 and for each of the years in the three-year period
ended December 31, 1998 and for the period from July 27, 1995 (inception) to
December 31, 1998 included herein and to the reference to our firm under the
headings "Selected Consolidated Financial Data" and "Experts" in the prospectus.
/s/ KPMG Peat Marwick LLP
Jackson, Mississippi
October 4, 1999
