<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 1, 2000.
REGISTRATION NO. 333-35490
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 1
TO
FORM S-4
------------------------
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
VOICESTREAM WIRELESS CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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DELAWARE 4812 91-1983600
(STATE OR OTHER JURISDICTION (PRIMARY STANDARD INDUSTRIAL (IRS EMPLOYER
OF INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBERS) IDENTIFICATION NO.)
</TABLE>
3650 131ST AVENUE S.E.
BELLEVUE, WASHINGTON 98006
(425) 653-4600
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
ALAN R. BENDER, ESQ.
EXECUTIVE VICE PRESIDENT,
GENERAL COUNSEL AND SECRETARY
VOICESTREAM WIRELESS CORPORATION
3650 131ST AVENUE S.E.
BELLEVUE, WASHINGTON 98006
(425) 653-4600
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
WITH COPIES TO:
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G. SCOTT GREENBURG, ESQ. BARRY A. ADELMAN, ESQ.
MATTHEW S. TOPHAM, ESQ. D. ROGER GLENN, ESQ.
PRESTON GATES & ELLIS LLP FRIEDMAN KAPLAN & SEILER LLP
5000 COLUMBIA CENTER 875 THIRD AVENUE
701 5TH AVENUE NEW YORK, NEW YORK 10022
SEATTLE, WASHINGTON 98104 (212) 833-1100
(206) 623-7580
</TABLE>
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 426(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. [ ]
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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<PAGE> 2
PROSPECTUS
VOICESTREAM WIRELESS CORPORATION
[VOICESTREAM LOGO]
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OFFER TO EXCHANGE: Our registered 10 3/8% Senior Notes due 2009
for
Omnipoint Corporation's 14% Senior Notes due 2003
</TABLE>
------------------------
Holders of Omnipoint's notes who tender to exchange will receive our
registered senior notes with a principal amount equal to 104.8% of the principal
amount of the tendered notes.
Omnipoint became our subsidiary on February 25, 2000.
We may accept Omnipoint notes for exchange at any time after they are
tendered. The exchange offer will expire at 5:00 p.m., New York City time on
June 9, 2000. The new notes we will issue will not trade on any exchange.
See "Risk Factors" beginning on page 7 to read about risk factors you
should consider in connection with the matters discussed in this prospectus.
NEITHER THE SECURITIES EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THE SECURITIES TO BE ISSUED UNDER THIS
PROSPECTUS OR DETERMINED IF THIS PROSPECTUS IS ACCURATE OR ADEQUATE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
THE DATE OF THIS PROSPECTUS IS MAY 2, 2000.
<PAGE> 3
TABLE OF CONTENTS
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Where You Can Find More Information... 1
Incorporation of Certain Documents by
Reference........................... 1
Prospectus Summary.................... 2
Risk Factors.......................... 7
The Exchange Offer.................... 13
The Company........................... 18
Ratio of Earnings to Fixed Charges.... 19
Use of Proceeds....................... 19
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PAGE
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Description of The Notes.............. 20
Book-Entry; Delivery and Form......... 51
Certain United States Federal Income
Tax Considerations.................. 52
Plan of Distribution.................. 57
Legal Matters......................... 57
Experts............................... 58
Where to Find More Information........ 58
</TABLE>
We have not authorized any dealer, salesperson or other person to give any
information or to make any representations in connection with the offer
contained herein other than those contained in this prospectus, and, if given or
made, such information or representation must not be relied upon as having been
authorized by the us. This prospectus does not constitute an offer to sell or
the solicitation of an offer to buy to any person in any jurisdiction in which
such offer or solicitation is not authorized or in which the person making such
offer or solicitation is not qualified to do so or to any person to whom it is
unlawful to make such offer or solicitation. Neither the delivery of this
prospectus nor any sale made hereunder shall under any circumstances create an
implication that there has been no change in our business affairs or condition
since the date hereof or that the information contained herein is correct as of
any time subsequent to the date hereof.
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WHERE YOU CAN FIND MORE INFORMATION
We and our subsidiary Omnipoint Corporation are subject to the
informational requirements of the Securities Exchange Act of 1934 and,
therefore, must file periodic reports, proxy statements and other information
with the Securities and Exchange Commission. All such information is available
to the public over the Internet at the SEC's web site at http://www.sec.gov and
may be copied at any of the following public reference facilities:
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Public Reference Room New York Regional Office Chicago Regional Office
450 Fifth Street, N.W. 7 World Trade Center Citicorp Center
Judiciary Plaza Suite 1300 500 West Madison Street
Washington, D.C. 20549 New York, N.Y. 10048 Suite 1400
Chicago, IL 60661-2511
</TABLE>
Copies of these documents may also be obtained at prescribed rates by writing to
the SEC, Public Reference Section, 450 Fifth Street, N.W., Washington, D.C.
20549.
This prospectus constitutes a part of a registration statement on Form S-4
that we have filed with the SEC under the Securities Act. As permitted by the
rules and regulations of the SEC, this prospectus does not contain all of the
information contained in the registration statement and the exhibits and
schedules thereto. Reference is hereby made to the registration statement and
its exhibits and schedules for further information about us and the securities
offered through this exchange offer. Statements contained in this prospectus
concerning any documents filed as exhibits to the registration statement or
otherwise filed with the SEC are not necessarily complete, and in each statement
a reference is made to the filed document itself. Each statement about a filed
document is qualified in its entirety by this reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file
with them into this prospectus, which means that:
- incorporated documents are considered part of this prospectus; and
- we can disclose important business and financial information about us or
Omnipoint, which is not included in or delivered with this prospectus, to
you by referring you to those other documents.
We incorporate by reference into this prospectus the documents listed
below, as amended and supplemented, and all documents filed by us or Omnipoint
with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange
Act of 1934 after the date of this prospectus and prior to the date on which the
exchange offer made hereby is consummated:
- our Annual Report on Form 10-K for the fiscal year ended December 31,
1999;
- our Report on Form 8-K dated March 22, 2000; and
- Omnipoint Annual Report on Form 10-K for the fiscal year ended December
31, 1999.
You can obtain any of the filings incorporated by reference into this
document through us or from the SEC through the SEC's web site or at the
addresses listed above. Documents incorporated by reference into this
prospectus, except for any exhibits to those documents that are not expressly
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<PAGE> 5
incorporated by reference into those documents, are available from us without
charge by requesting them in writing or by telephone at the following address
and telephone number:
VoiceStream Wireless Corporation
3650 131st Avenue S.E.
Bellevue, Washington 98006
Attention: Investor Relations
(425) 653-4600
If you request any incorporated documents from us, we will mail them to you
by first-class mail, or by another equally prompt means, within one business day
after we receive your request. In order to obtain timely delivery of these
documents, however, you must make your request no later than five business days
before the expiration date of the exchange offer.
PROSPECTUS SUMMARY
This summary highlights information presented elsewhere in this prospectus
or incorporated by reference into this prospectus. This summary does not contain
all the information that is important to you. We encourage you to read carefully
this entire prospectus, including the "Risk Factors" section, and the documents
we incorporate by reference. All references to "Company," "we" or "our" in this
prospectus refer to VoiceStream Wireless Corporation and its subsidiaries
collectively, unless the context otherwise requires.
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<PAGE> 6
SUMMARY OF TERMS OF THE EXCHANGE OFFER
We will accept for exchange up to $142,800,000 aggregate principal amount
of Omnipoint's outstanding 14% Senior Notes due 2003 for up to $149,654,400
aggregate principal amount of our new registered 10 3/8% Senior Notes due 2009.
Background.................... Omnipoint has outstanding $142,800,000 in
aggregate principal amount of its 14% Senior
Notes due 2003, which it issued privately. On
February 25, 2000, Omnipoint became our wholly
owned subsidiary and we wish to replace its
senior notes with senior notes that we have
issued. Accordingly, we are offering to
exchange $1,048 in aggregate principal amount
of our 10 3/8 Senior Notes for each $1,000 in
principal amount of Omnipoint's 14% Senior
Notes.
Securities Offered............ We are offering up to $149,654,400 aggregate
principal amount of our 10 3/8% Senior Notes
due 2009, all of which will have been
registered under the Securities Act of 1933.
The Exchange Offers........... We are offering to accept Omnipoint's
unregistered, outstanding notes in exchange for
our new notes that will have been registered
under the Securities Act of 1933. Upon
accepting tenders of Omnipoint notes we will
issue our new notes to the tendering holders.
For procedures for tendering, see "The Exchange
Offer." Our notes that are issued in exchange
for the Omnipoint notes will be deemed to have
accrued interest since November 9, 1999 unless
they are issued after May 15, 2000, in which
case they will be deemed to have accrued
interest from that date. Tendering Omnipoint
note holders will be required to pay us the
amount of unpaid interest that is deemed to
have accrued on our notes at the time of their
issuance, and we will pay the tendering note
holders the amount of accrued and unpaid
interest on their Omnipoint notes to the same
date.
Expiration of the Exchange
Offers........................ 5:00 p.m., New York City time, on June 9, 2000,
unless we extend it.
Tenders; Withdrawal........... Omnipoint notes may be accepted for exchange at
any time after they are tendered. See "The
Exchange Offer." If for any reason any tendered
notes are not accepted for exchange, they will
be returned as soon as practicable after the
expiration or termination of our exchange
offer.
Conditions to the Exchange
Offer......................... Our exchange offer is subject to the condition
that it does not violate applicable law or any
applicable interpretation of the staff of the
commission. There is no guarantee that this
condition will be satisfied.
Federal Income Tax
Considerations................ The exchange of our new notes for Omnipoint's
outstanding notes pursuant to the exchange
offer will constitute a taxable exchange
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<PAGE> 7
for federal income tax purposes. See "Certain
United States Federal Income Tax
Considerations."
Exchange Agent................ Harris Trust Company of California is serving
as the exchange agent in connection with the
exchange offer.
Use of Proceeds............... We will not receive any cash proceeds from the
issuance of the new notes in connection with
the exchange offer.
Consequences If You Do Not
Exchange Outstanding
Notes....................... Omnipoint's outstanding notes that are not
tendered to us or are not accepted for exchange
will continue to accrue interest and will
continue to bear legends restricting their
transfer. They may not be offered for sale or
sold except:
- Pursuant to an exemption from the
registration requirements of the Securities
Act of 1933; or
- Pursuant to an effective registration
statement under the Securities Act of 1933.
Omnipoint does not anticipate that it will
register any of its outstanding notes under the
Securities Act of 1933.
SUMMARY DESCRIPTION OF OUR NEW NOTES
Notes Offered................. $149,654,400 in principal amount of our 10 3/8%
Senior Notes Due November 15, 2009. Upon
maturity, we will pay the principal of,
premium, if any, and interest on the senior
notes in immediately available funds.
Maturity Date................. November 15, 2009.
Yield and Interest............ Our notes will bear interest payable
semiannually in arrears, at a rate of 10 3/8%
per annum, on May 15 and November 15 of each
year. Interest on our notes will be deemed to
have begun accruing on November 9, 1999 (or May
15, 2000 if they are issued after that date).
Ranking....................... Our notes will be senior unsecured obligations
of ours. As such, they:
- will rank equal in right of payment with all
of our other senior unsecured indebtedness,
- will rank senior in right of payment to all
of our subordinated unsecured indebtedness;
- will rank junior to our secured obligations,
with respect to the assets which are pledged,
and will rank equal to such obligations to
the extent that the pledged assets do not
satisfy the secured obligations; and
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- will rank junior to all existing and future
indebtedness and other liabilities of our
subsidiaries. On February 29, 2000, the
aggregate indebtedness and liabilities of our
subsidiaries was approximately $3.3 billion.
The aggregate indebtedness and liabilities of
Aerial Communications, Inc., which we expect
to become a subsidiary of ours, was $411.8
million on December 31, 1999.
Optional Redemption........... We have the option to redeem our notes, in
whole or in part, at any time on or after
November 15, 2004, at the redemption prices set
forth in this prospectus under "Description of
the Notes -- Optional Redemption" plus accrued
and unpaid interest, if any, to the date of
redemption.
In addition, on or before November 15, 2002, we
have the option to apply proceeds from
qualifying equity sales to redeem up to 35% of
the originally issued principal amount of the
senior notes at a price of 110.375% of the
principal amount thereof plus accrued and
unpaid interest to the date of redemption
provided that after the redemption at least 65%
of the originally issued aggregate principal
amount of the senior notes remains outstanding.
Sinking Fund.................. The notes will not be entitled to any sinking
fund.
Change of Control............. Upon a change of control and a ratings decline
or upon asset dispositions described in the
indenture, we will be required to offer to
purchase the notes for a purchase price in cash
equal to 101% of the accreted value or
principal amount at maturity of the notes, as
applicable, plus accrued and unpaid interest.
However, we will not be able to repurchase
notes without obtaining written consents from
or repaying the lenders under our credit
facility.
Restrictive Covenants......... The indenture under which we will issue the
notes restrict our (and our subsidiaries')
ability to do the following:
- incur additional indebtedness;
- make payments in respect of securities that
are junior to our notes;
- allow restrictions on our subsidiaries'
ability to make payments to us;
- cause our subsidiaries to guarantee our debt;
- enter into transactions with affiliates;
- issue capital stock of our subsidiaries;
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- grant liens on our property;
- enter into sale and leaseback transactions;
- dispose of significant assets; and
- engage in consolidations, mergers and asset
transfers.
Settlement and Book-Entry
Form.......................... Our notes will be evidenced by a note in global
form which will be deposited with a custodian
for, and registered in the name of the nominee
of, The Depository Trust Company ("DTC") in New
York, New York.
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RISK FACTORS
Before agreeing to accept our new notes, you should carefully consider the
risks described below, in addition to the other information presented in this
prospectus or incorporated by reference into this prospectus. If any of the
following risks actually occur, they could seriously harm our business,
financial condition or results of operations. In such case, you may lose all or
part of your investment.
THE NOTES ARE THE OBLIGATIONS OF A HOLDING COMPANY WHICH HAS NO OPERATIONS AND
DEPENDS ON SUBSIDIARIES FOR CASH, AND ITS SUBSIDIARIES MAY BE LIMITED IN THEIR
ABILITY TO MAKE FUNDS AVAILABLE
Tendering Omnipoint note holders will be exchanging a note that is not
structurally subordinate to the general obligations of Omnipoint for one that
is. As a holding company, we will not hold substantial assets other than our
direct or indirect investments in and advances to our operating subsidiaries.
Consequently, our subsidiaries conduct all of our consolidated operations and
own substantially all of our consolidated assets. Our cash flow and our ability
to meet our debt service obligations on the notes will depend upon the cash flow
of our subsidiaries and the payment of funds by the subsidiaries to us in the
form of loans, equity distributions or otherwise. Our subsidiaries are not
obligated to make funds available to us for payment on the notes or otherwise.
In addition, our subsidiaries' ability to make any loans or distributions to us
will depend on their earnings, the terms of their indebtedness, business and tax
considerations and legal restrictions.
Because of the structure described above, the notes will be subordinate to
all borrowings and liabilities of our subsidiaries. Our lenders under credit
facility and all creditors of any of our subsidiaries will have the right to be
paid before you from any cash received or held by our subsidiaries. In the event
of bankruptcy, liquidation or dissolution of a subsidiary, following payment by
the subsidiary of its liabilities, it may not have sufficient assets remaining
to make any payments to us as a shareholder or otherwise. As of February 29,
2000, the total outstanding indebtedness and liabilities of our subsidiaries was
approximately $3.3 billion. The aggregate liabilities and indebtedness of Aeriel
Communications, Inc., which we expect to become our subsidiary, was $411.8
million on December 31, 1999.
A TENDERING OMNIPOINT NOTEHOLDER WILL RECOGNIZE GAIN OR LOSS U.S. FEDERAL INCOME
TAX PURPOSES
A tendering Omnipoint note holder will recognize gain or loss for U.S.
federal income for tax purposes generally equal to the difference between the
holder's basis in the outstanding Omnipoint notes and the issue price of our
notes. The issue price of our notes should be their fair market value on the
date of the exchange, assuming that the notes are "publicly traded" as defined
in applicable Treasury Regulations.
WE FACE INTENSE COMPETITION FROM OTHER WIRELESS SERVICE PROVIDERS, WHICH COULD
ADVERSELY AFFECT OUR ABILITY TO GROW OUR SUBSCRIBER BASE AND REVENUES
We compete with providers of PCS, cellular and other wireless
communications services. Under the current rules of the FCC, up to seven PCS
licensees and two cellular licensees may operate in each geographic area.
Proposed or future rules may increase the number of licenses available. With so
many companies targeting many of the same customers, competition is intense. We
compete against AT&T Wireless Services, Inc., Bell Atlantic Mobile Systems,
Nextel Communications, Inc., SBC Communications, Sprint Corp. (PCS Group), US
West Wireless LLC and Vodafone AirTouch Cellular Communications, Inc., among
others. Many of these competitors have substantially greater financial resources
than we do, and several operate in multiple segments of the industry. AT&T
Wireless, Nextel and Sprint PCS operate substantially nationwide networks and
Bell Atlantic Mobile
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'Systems and Vodafone AirTouch, among others, through joint ventures and
affiliation arrangements, operate or plan to operate substantially nationwide
wireless systems throughout the continental United States. As a result of such
competition, we cannot assure you that we will be able to successfully attract
and retain customers and increase our subscriber base and revenues.
WE HAVE A LIMITED OPERATING HISTORY WITH SUBSTANTIAL OPERATING LOSSES AND
NEGATIVE CASH FLOW, AND WE MAY NOT BECOME PROFITABLE
We were incorporated in June 1999 and have not conducted any activities
other than in connection with our organization and the transactions through
which we became the parent company of VS Washington, Inc. (formerly VoiceStream
Wireless Corporation, a Washington corporation) and Omnipoint on February 25,
2000. On a pro forma basis giving retroactive effect to the Omnipoint merger, we
sustained operating losses of approximately $1.0 billion in 1999, and also on a
pro forma basis as of December 31, 1999, we had an accumulated deficit of $1.1
billion and equity, net of accumulated deficit, of $3.2 billion. We expect
Aerial Communications, Inc. to become our subsidiary. Aerial sustained operating
losses of approximately $210.0 million in 1999. As of December 31, 1999, Aerial
had an accumulated deficit of $800.2 million and equity, net of accumulated
deficit, of $410.6 million. We expect to incur significant operating losses and
to generate negative cash flow from operating activities during the next several
years while we continue to develop and construct our systems and grow our
subscriber base. We cannot assure you that we will achieve or sustain
profitability or positive cash flow from operating activities in the future or
that we will generate sufficient cash flow to service current or future debt
requirements.
OUR SUBSTANTIAL DEBT LIMITS OUR ABILITY TO BORROW ADDITIONAL FUNDS TO FINANCE
OUR GROWTH, CREATES FINANCIAL AND OPERATING RISKS, AND MAKES US VULNERABLE TO
INCREASES IN INTEREST RATES
We are highly leveraged and subject to strict financial limitations because
we have incurred a significant amount of debt in building our systems and
subscriber bases. Our total debt on February 29, 2000 was approximately $4.8
billion. In addition, as of December 31, 1999, Aerial's total debt was
approximately $411.8 million. Our level of debt, and the incurrence of
additional debt in the future, could have important consequences to you. For
example, it could:
- make it more difficult for us to satisfy our obligations with respect to
our existing indebtedness;
- require us to dedicate a substantial portion of our cash flow from
operations to paying principal and interest on our debt, thereby reducing
the availability of our cash flow to fund working capital, capital
expenditures, acquisitions of additional systems and other general
corporate requirements;
- limit our flexibility in reacting to changes in our business and the
wireless industry generally;
- limit our ability to borrow additional funds due to applicable financial
and restrictive covenants in such indebtedness; and
- make us more vulnerable to increases in prevailing interest rates because
certain of our borrowings are and will continue to be at variable rates
of interest.
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IF WE CANNOT RAISE SUFFICIENT FUNDS TO MEET OUR SIGNIFICANT FUTURE CAPITAL
REQUIREMENTS, WE WILL NOT BE ABLE TO COMPETE EFFECTIVELY IN THE WIRELESS
COMMUNICATIONS INDUSTRY
Our systems and the systems of joint ventures in which we are an investor
are not completely built out and do not have nationwide coverage. The build-out
of these systems and the development of new systems will require significant
capital expenditures. We plan to meet our additional capital needs for the
build-out of our systems with the proceeds from credit facilities and other
borrowings, the proceeds from sales of additional debt securities, the sale or
issuance of equity securities, financing arrangements with vendors and through
joint ventures. We cannot guarantee that we will be able to raise sufficient
additional capital on commercially reasonable terms or at all. If we do not
raise sufficient funds, we may delay or abandon some or all of our planned
build-out or expenditures, which could materially limit our ability to compete
in the wireless communications industry.
THERE IS A RISK THAT OUR EXPANSION WILL BE CONSTRAINED BECAUSE OUR ABILITY TO
EXPAND AND PROVIDE SERVICE NATIONALLY IS LIMITED BY OUR ABILITY TO OBTAIN FCC
LICENSES
Even combined with Aerial, we will not have licenses covering the entire
United States. Our ability to expand is limited to those markets where we have
obtained or can obtain licenses with sufficient spectrum to provide PCS service,
or where we can economically become resellers of service. Because there are a
limited number of licenses available, and because resale agreements require
mutual consent of the incumbent PCS license holders, there is a risk that we may
not be able to obtain the licenses we need for expansion.
WE ARE AT RISK OF LOSING COVERAGE IN CERTAIN MARKETS BECAUSE WE HAVE ENTERED
INTO JOINT VENTURES THAT WE DO NOT CONTROL IN AN ATTEMPT TO EXPAND INTO THOSE
MARKETS
When implementing the PCS licensing scheme in the United States, the FCC
adopted rules that granted a narrow category of entities the right to bid for
and own C and F Block licenses. We do not qualify to obtain C and F Block
licenses. In order to continue to expand our system, we obtained 49.9% minority
ownership interests in four joint ventures controlled by Cook Inlet Region,
Inc., each of which qualified to hold licenses that we could not directly hold.
In all markets where the joint ventures operate, including the Philadelphia,
Chicago and Dallas markets, we are at risk because Cook Inlet is in control and
can choose to operate independently of us. If the joint venture entities
determine to operate independently our ability to compete on a national scale
may be adversely affected.
OUR CURRENT AND FUTURE INVESTMENT IN EACH CURRENT JOINT VENTURE IS AT RISK
BECAUSE WE HAVE LIMITED INVESTOR PROTECTIONS, AND WE MAY BE REQUIRED TO RELY ON
ADDITIONAL JOINT VENTURES FOR FURTHER EXPANSION
We do not control, and maintain only limited investor protection rights, in
the four joint venture entities controlled by Cook Inlet Region, Inc. We have
substantial financial commitments to these joint ventures, which must rely on
corresponding financial commitments from Cook Inlet. Also, many of the systems
owned by these joint venture entities have not been built out and the joint
ventures will have substantial capital needs in connection with such build-outs.
We cannot guarantee that these joint venture entities will be able to raise
sufficient capital, whether through bank borrowings or otherwise, to complete
the build-out of their systems. Similarly, due to the licensing restrictions
discussed above, and because of the scarcity of available PCS licenses covering
United States urban markets, we may be required to rely on similar joint
ventures that we do not control for expansion into new markets. We cannot assure
you that we will be able to find acceptable joint venture partners. In the event
that we do find acceptable joint venture partners, due to our lack of control
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over these joint ventures, we cannot assure you that they will operate in a
manner that increases the value of our business.
WE WILL BE SUBJECT TO EXTENSIVE GOVERNMENT REGULATION, ANY CHANGE IN WHICH COULD
AFFECT OUR BUILD-OUT PLAN OR FINANCIAL PERFORMANCE
The licensing, construction, operation, sale and interconnection
arrangements of wireless telecommunications systems are regulated to varying
degrees by the FCC and, depending on the jurisdiction, also may be regulated by
state and local governmental bodies. There can be no assurance that either the
FCC or such state and local agencies will not adopt regulations or take other
actions that would adversely affect our business. We cannot assure you that we
will be able to obtain and retain all necessary governmental authorizations and
permits. Failure to do so could negatively affect our existing operations and
delay or prevent proposed operations.
THE FCC AND OTHER REGULATORY AGENCIES MUST APPROVE THE REORGANIZATION WITH
AERIAL AND COULD DELAY OR REFUSE TO APPROVE THE REORGANIZATION OR IMPOSE
CONDITIONS THAT COULD ADVERSELY AFFECT OUR BUSINESS OR FINANCIAL CONDITION
The Communications Act and FCC rules require the FCC's prior approval of
the transfer of control of Aerial's PCS licenses to us. Completion of the
transactions through which we will become the parent company of Aerial are
conditioned, among other factors, upon grants of the requisite FCC consents
becoming final. A "final" FCC order is one that has not been stayed and is no
longer subject to review by the FCC or the courts because the statutory period
for seeking such review has expired without any request for review or stay
pending. Following the FCC's grant of consent, we cannot assure you that there
will not be any post-grant challenges by private parties or actions by the FCC
or the courts that would delay or prevent finality. Though our board of
directors and Aerial's board of directors, in the exercise of their business
judgment, without seeking stockholder approval, may waive finality as a
condition of closing, we cannot assure you that they will do so. We cannot
assure you that the FCC will grant the applications, that the FCC will grant the
applications without conditions, or that there will be no delay caused by the
filing of a challenge to the transfer and assignment applications. Conditions
imposed on any licenses granted or delays in granting of the licenses could
impair the value of the licenses and reduce the value of our stock, and could
lead to our inability to obtain financing necessary for our growth. If we are
denied a license in a market we will not be able to operate in that market
unless we maintain another license or acquire a new license for that market.
THERE IS A RISK THAT THE JOINT VENTURE ENTITIES IN WHICH WE HOLD INTERESTS COULD
LOSE LICENSES AS A RESULT OF COURT PROCEEDINGS
All C Block licenses held by Cook Inlet entities could be affected by U.S.
Airwaves, Inc. v FCC, which is pending in the U.S. Court of Appeals for the D.C.
Circuit. U.S. Airwaves is seeking judicial review of two orders in the FCC's
rulemaking proceeding on payment financing for PCS licenses. Since these orders
enabled initial C Block licensees to return licenses or modify the conditions of
payment, there is a remote threat that if the orders are reversed, affected
licenses could be returned to the Commission for reauction. Additionally, 25
licenses held by Cook Inlet joint ventures were issued subject to the outcome of
the bankruptcy proceeding of the original licensee, a subsidiary of Pocket
Communications Inc., which was conditionally granted 43 C Block licenses in
1996. Pursuant to an FCC order, the bankruptcy debtors elected to relinquish
certain licenses, which subsequently were reauctioned, and the bankruptcy court
issued an order making the election effective. A secured creditor of the debtors
appealed and, as a result, the bankruptcy court stayed its order. Because the
appeal is still pending there is uncertainty as to the referenced C Block
licenses of the Cook Inlet
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<PAGE> 14
entities. The district court could order the return of these licenses to the
jurisdiction of the bankruptcy court. In the event that these licenses are so
returned, it is unlikely that the Cook Inlet entities will be able to recoup any
or all of the costs incurred by them in connection with the construction and
development of systems related to such licenses. Loss of any license by any Cook
Inlet entity will reduce or eliminate our ability to own interests in markets
where the licenses are lost, thereby reducing our ability to compete with other
national competitors.
THERE IS A RISK THAT WE WILL LOSE LICENSES IF THEY ARE NOT RENEWED BY THE FCC
FCC licenses to provide PCS services are subject to renewal requirements
and to revocation at any time for cause. Our licenses begin to expire in 2004.
We cannot assure you that the FCC will renew our licenses. If we lose a license
for a market we will not be able to operate in that market unless we maintain
another license or acquire a new license for that market.
THERE IS A RISK THAT OUR SUBSIDIARY MAY HAVE TO MAKE SUBSTANTIAL TAX INDEMNITY
PAYMENTS TO WESTERN WIRELESS CORPORATION
In a spin-off transaction effected on May 3, 1999, Western Wireless
distributed its entire 80.1% interest in VS Washington's common stock to its
stockholders. Western Wireless will recognize gain as a result of the spin-off
if the spin-off is considered to be part of a "prohibited plan," which is a plan
or series of related transactions pursuant to which one or more persons acquire,
directly or indirectly, 50% or more of VS Washington's common stock. This is a
risk because VS Washington agreed to indemnify Western Wireless on an after-tax
basis for any taxes, penalties, and interest and various other expenses incurred
by Western Wireless if it is required to recognize such gain. Under the Internal
Revenue Code, the reorganization and the related transactions through which we
became the parent of VS Washington and Omnipoint, combined with Hutchison
Telecommunications (PCS) USA's acquisition of VS Washington stock within two
years prior to the spin-off, will give rise to a rebuttable presumption that the
spin-off was effected pursuant to a prohibited plan and, thus, that Western
Wireless recognized gain as a result of the spin-off.
The precise standard that must be met by VS Washington to rebut the
presumption is not presently clear. Thus, counsel is unable to opine on the
issue and there is a risk that VS Washington will be unable to rebut the
presumption. In addition, no matter what the standard is for rebutting the
presumption, there is a risk that the IRS would not agree that any facts that
would be presented by VS Washington would establish that the spin-off was not
effected pursuant to a prohibited plan, and there is a risk that a court would
concur with such an IRS position. As a result, Western Wireless would be
required to recognize gain upon the spin-off and VS Washington would be required
to indemnify Western Wireless on an after-tax basis for its resulting taxes,
penalties, if any, and interest, and various other expenses. We estimate that
the range of VS Washington's indemnity exposure, not including penalties and
interest, is from zero to $400 million. Thus, if it is required to make an
indemnity payment to Western Wireless, it could have a material adverse effect
on us.
CONCERNS OVER RADIO FREQUENCY EMISSIONS OR OTHER HEALTH AND SAFETY RISKS MAY
DISCOURAGE USE OF WIRELESS SERVICES AND ADVERSELY EFFECT OUR BUSINESS
Media reports have suggested that some radio frequency emissions from
wireless handsets may raise various health concerns, including cancer, and may
interfere with various electronic medical devices, including hearing aids and
pacemakers. Concerns over radio frequency emissions may discourage the use of
wireless handsets, which would adversely affect our business. Negative findings
of studies concerning health and safety risks of wireless handsets could have an
adverse effect on the wireless industry, our business, or the use of GSM
technology. Such findings could lead to
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<PAGE> 15
governmental regulations that may have an adverse effect on our business.
Several states have proposed or enacted legislation which would limit or
prohibit the use and/or possession of a mobile telephone while driving an
automobile. If states adopt and strictly enforce such legislation, it may have
an adverse effect on our business.
WE MAY BE UNABLE TO PURCHASE OUR NOTES UPON A CHANGE OF CONTROL
Upon the occurrence of a change of control, you, along with all other
holders of our notes, may require us to repurchase all or a portion of our notes
at 101% of the principal amount (or accreted value in the case of senior
discount notes) of the notes, together with accrued and unpaid interest to the
date of repurchase. If a change of control were to occur, we may not have the
financial resources to repay the notes, our credit facilities and any other
indebtedness that would become payable upon the occurrence of such change of
control. The covenant requiring us to repurchase the notes will, unless consents
of lenders under our credit agreement are obtained, require us to repay all
indebtedness then outstanding under our credit agreement in the event of a
change of control. There can be no assurance that we will have sufficient funds
available at the time of any change of control to make any debt payment
(including repurchase of our notes) required by this covenant. See "Description
of our new Notes -- Repurchase of Notes upon a Change of Control:
THIS PROSPECTUS INCLUDES FORWARD-LOOKING STATEMENTS AND WE CAUTION YOU NOT TO
PLACE UNDUE RELIANCE ON FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated by reference in this
prospectus contain statements that are not based on historical fact, including
the words "believes," "anticipates," "intends," "expects" and similar words.
These statements constitute "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors that
may cause the actual results, events or developments to be significantly
different from any future results, events or developments expressed or implied
by such forward-looking statements. Such factors include, without limitation:
- general economic and business conditions, both nationally and in the
regions in which we operate;
- technology changes;
- competition;
- changes in business strategy or development plans;
- our high level of debt;
- the ability to attract and retain qualified personnel;
- existing governmental regulations and changes in, or the failure to
comply with, governmental regulations;
- product liability and other claims asserted against us; and
- our ability and the ability of our third-party suppliers to take
corrective action in a timely manner with respect to the year 2000 issue.
Given these uncertainties, we caution you not to place undue reliance on
such forward-looking statements.
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<PAGE> 16
THE EXCHANGE OFFER
Subject to the terms and conditions in this prospectus and in the
accompanying Letter of Transmittal, we will issue $1048 in principal amount of
our 10 3/8% senior notes due 2009 in exchange for each $1000 in principal amount
of Omnipoint's outstanding 14% Senior Notes due 2003 that are properly tendered
on or before the expiration of the offer. The expiration of the offer is 5:00
p.m., New York City time, on June 9, 2000 unless we extend it.
We may, at any time or from time to time, extend the expiration date, by
giving oral or written notice of such extension in the manner described below.
Omnipoint notes may be accepted for exchange at any time after they are
tendered. Any outstanding notes that we do not accept for exchange for any
reason will be returned to you without cost as promptly as practicable after the
expiration or termination of the exchange offer.
This prospectus, together with the Letter of Transmittal, is first being
sent on or about the date of this prospectus to all holders known to us of
Omnipoint outstanding notes that are the subject of the offer described herein.
Our obligation to accept outstanding notes for exchange or purchase is subject
to certain conditions as set forth below under "-- Certain Conditions to the
Exchange Offer."
Outstanding notes tendered in the exchange offer must be in denominations
of principal amounts of $1,000 and any integral multiples thereof.
Our notes that are issued in exchange for the Omnipoint notes will be
deemed to have accrued interest since November 9, 1999 unless they are issued
after May 15, 2000, in which case they will be deemed to have accrued interest
from that date. Tendering Omnipoint note holders will be required to pay us the
amount of unpaid interest that is deemed to have accrued on our notes at the
time of their issuance, and we will pay the tendering note holders the amount of
accrued and unpaid interest on their Omnipoint notes to the same date.
Procedures for Tendering Outstanding Notes
In all cases, issuance of our new notes for outstanding Omnipoint notes
that are accepted for exchange or payment will be made only after timely receipt
by the exchange agent of:
(i) certificates for such outstanding notes or a timely book-entry
confirmation of such outstanding notes into the exchange agent's account at
the book-entry transfer facility;
(ii) a properly completed and duly executed Letter of Transmittal or
an agent's message in lieu thereof; and
(iii) all other required documents.
The term "agent's message" means a message, transmitted by the book-entry
transfer facility to and received by the exchange agent and depository. It forms
a part of a book-entry confirmation, which states that the book-entry transfer
facility has received an express acknowledgment from the tendering participant
stating that the participant has received and agrees to be bound by the Letter
of Transmittal and that we may enforce the Letter of Transmittal against that
participant. THE METHOD OF DELIVERY OF THE OUTSTANDING NOTES, THE LETTER OF
TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK OF THE
HOLDERS. IF DELIVERY MADE IS BY MAIL, IT IS RECOMMENDED THAT REGISTERED MAIL,
PROPERLY INSURED, WITH RETURN RECEIPT REQUESTED, BE USED. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY. DELIVERY OF
DOCUMENTS TO DTC IN ACCORDANCE WITH
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<PAGE> 17
ITS PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT. NO DOCUMENTS
SHOULD BE SENT TO US.
Signatures on a Letter of Transmittal or a notice of withdrawal, as the
case may be, must be guaranteed by one of the following eligible institutions:
- a member firm of a registered national securities exchange or of the
National Association of Securities Dealers, Inc.;
- a commercial bank; or
- a trust company having an office or correspondent in the United States;
unless the notes tendered are tendered:
(i) by a registered holder of the notes who has not completed the box
entitled "Special Issuance Instructions" or "Special Delivery Instructions"
on the Letter of Transmittal; or
(ii) for the account of an eligible institution.
If tendered notes are registered to a person who did not sign the Letter of
Transmittal, they must be endorsed by, or be accompanied by a written transfer
or exchange, duly executed by the registered holder with the signature
guaranteed by an eligible institution and appropriate powers of attorney, signed
exactly as the name of the registered holder appears on the outstanding notes.
All questions of satisfaction of the form of the writing will be determined by
us in our sole discretion.
If the Letter of Transmittal or any outstanding notes or powers of attorney
are signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and unless waived by us,
submit evidence satisfactory to us of their authority to so act with the letter
of transmittal.
We will determine all questions as to the validity, form, eligibility
(including time of receipt), acceptance and withdrawal of the tendered
outstanding notes. Our determination will be final and binding. We reserve the
absolute right to reject any and all tenders of any particular outstanding notes
not properly tendered or not to accept any particular outstanding notes if our
acceptance would, in our opinion or in the opinion of our counsel, be unlawful.
We also reserve the absolute right to waive any defects or irregularities or
conditions of the exchange offers as to any particular outstanding notes.
Our interpretation of the terms and conditions of the exchange offers
(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 a time period
we determine. Neither we, the exchange agent nor any other person is under any
duty to give notification of defects or irregularities with respect to tenders
of outstanding notes nor shall any of them incur any liability for failure to
give such notification. Any outstanding notes will not be considered to have
been properly tendered until such defects or irregularities have been cured or
waived. Any outstanding notes received by the exchange agent that have not been
properly tendered and as to which the defects or irregularities have not been
cured or waived will be returned without cost by the exchange agent and
depository to the tendering holder unless otherwise provided in the Letter of
Transmittal, as soon as practicable following the expiration date.
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<PAGE> 18
In addition, we reserve the right in our sole discretion to:
(i) purchase or make offers for any outstanding notes that remain
outstanding subsequent to the expiration date, or, to terminate the
exchange offers; and
(ii) to the extent permitted by applicable law, purchase outstanding
notes in the open market, in privately negotiated transactions or otherwise
on terms different from the terms of the exchange offers.
Acceptance of Outstanding Notes for Exchange; Delivery of New Notes
Upon satisfaction or waiver of the conditions to the exchange offers, we
may accept all outstanding notes properly tendered at any time after their
tender and will issue the new notes in exchange. See "-- Certain Conditions to
the Exchange Offer."
We will be deemed to have accepted properly tendered outstanding notes for
exchange if or when we give oral or written notice of acceptance to the exchange
agent, with written confirmation of any oral notice to follow promptly.
If any tendered notes are not accepted for any reason or if outstanding
notes are submitted for a greater principal amount than the holder desired to
exchange, the unaccepted or non-exchanged outstanding notes will be returned
without expense to the tendering holder (or, in the case of outstanding notes
tendered by book-entry transfer into the exchange agent's account at the
book-entry transfer facility pursuant to the book-entry procedures described
below, the non-exchanged outstanding notes will be credited to an account
maintained with such book-entry transfer facility) as promptly as practicable
after the expiration or termination of the exchange offer.
Book-Entry Transfer
The exchange agent and depository will make a request to establish an
account with respect to the outstanding notes at the book-entry transfer
facility for purposes of the exchange offer within two business days after the
date of this prospectus. Any financial institution that is a participant in the
book-entry transfer facility's systems may make book-entry delivery of
outstanding notes by causing the book-entry transfer facility to transfer the
outstanding notes into the Exchange Agent's account at the book-entry transfer
facility in accordance with the facility's procedures. However, while delivery
of outstanding notes may be effected through book-entry transfer at the
book-entry transfer facility, the Letter of Transmittal (or a facsimile thereof
or an agent's message in lieu thereof), with any required signature guarantees
and any other required documents, must still be transmitted to and received by
the exchange agent at one of the addresses set forth below, under "-- Exchange
Agent" on or before the expiration date or the guaranteed delivery procedures
described below must be complied with.
Guaranteed Delivery Procedures
A holder who wishes to tender outstanding notes; and
(i) the outstanding notes are not immediately available; or
(ii) the outstanding notes, the Letter of Transmittal, or any other
required documents cannot be delivered to the exchange agent and depository
on a timely basis; or
(iii) book-entry transfer of the outstanding note cannot be completed
on a timely basis;
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<PAGE> 19
may effect a tender if:
(a) the tender is made through an institution eligible to guarantee
signature on the Letter of Transmittal; and
(b) before the expiration date, the exchange agent receives from the
eligible institution:
- a properly completed and duly executed Notice of Guaranteed Delivery
(by facsimile transmission, mail or hand delivery) setting forth the
name and address of the holder of the outstanding notes;
- the certificate number or numbers of such outstanding notes and the
principal amount of outstanding notes tendered, stating that the
tender is being made thereby, and guaranteeing that the certificates
for all physically tendered outstanding notes, in proper form for
transfer, or a book-entry confirmation, as the case may be, together
with a properly completed and duly executed Letter of Transmittal (or
a facsimile thereof or an agent's message in lieu thereof) with any
required signature guarantees, and all other documents required by the
Letter of Transmittal are received by the exchange agent within three
New York Stock Exchange trading days after the date of execution of
the Notice of Guaranteed Delivery; and
- the certificates for all physically tendered outstanding notes, in
proper form for transfer, or a book-entry confirmation, as the case
may be, together with a properly completed and duly executed Letter of
transmittal (or a facsimile thereof or an agent's message in lieu
thereof), with any required signature guarantees and any other
documents required by the Letter of Transmittal, that will be
deposited by the eligible institution with the exchange agent within
three New York Stock Exchange trading days after the date of execution
of the Notice of Guaranteed Delivery.
Withdrawal Rights
Except as otherwise provided herein, tendered notes may be withdrawn at any
time prior to their acceptance for exchange.
To withdraw a tendered note, a written notice of withdrawal must be
received by the exchange agent at its address set forth herein before the note
has been accepted for exchange. Any such notice of withdrawal must:
(i) specify the name of the depositor having tendered the outstanding
note to be withdrawn;
(ii) include a statement that the depositor is withdrawing its
election to have outstanding note exchanged or purchased, and identify the
outstanding note to be withdrawn (including the certificate number or
numbers and principal amount of the outstanding note); and
(iii) where a certificate for the outstanding note has been
transmitted, specify the name in which such outstanding note is registered,
if different from that of the withdrawing holder.
If a certificate for the tendered note has been delivered or otherwise
identified to the exchange agent, then, prior to the release of such
certificates the withdrawing holder must also submit:
(i) the serial number of the particular certificate to be withdrawn;
and
(ii) signed notice of withdrawal with signatures guaranteed by an
eligible institution unless the holder is an eligible institution.
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<PAGE> 20
If outstanding notes have been tendered pursuant to the procedure for
book-entry transfer described above, any notice of withdrawal must specify the
name and number of the account at the book-entry transfer facility to be
credited with the withdrawn outstanding notes and otherwise comply with the
procedures of the facility.
We will determine all questions as to the validity, form and eligibility
(including time or receipt) for such withdrawal notices. Our determination shall
be final and binding on all parties.
Any outstanding notes so withdrawn will be considered not to have been
validly tendered for purposes of the exchange offer and no new notes will be
issued with respect thereto unless the outstanding notes so withdrawn are
validly retendered.
Certain Conditions to the Exchange Offers
The exchange offer is subject only to the condition that it does not
violate applicable law or any applicable interpretation of the staff of the
commission. We cannot assure you that this condition will be satisfied.
If we determine that we must terminate the exchange offer, as set forth
above, we may:
- refuse to accept any outstanding notes and return any outstanding notes
that have been tendered;
- extend the exchange and cash tender offers and retain all outstanding
notes tendered prior to the expiration date; or
- waive a termination event with respect to the exchange and cash tender
offer and accept all properly tendered outstanding notes that have not
been withdrawn.
If the waiver would constitute a material change in the exchange offer, we
will disclose that change through a supplement to this prospectus that will be
distributed to each registered holder of outstanding notes. In addition, we will
extend the exchange offer for a period of five to ten business days, depending
upon the significance of the waiver and the manner of disclosure to the
registered holders of the outstanding notes, if the exchange offer would
otherwise expire during such period.
Exchange Agent
Harris Trust Company of California, has been appointed as exchange agent
for the exchange offer. All executed Letters of Transmittal and written notices
of withdrawal should be directed to the exchange agent at one of the addresses
set forth below. Questions and requests for assistance and requests for
additional copies of this prospectus or of the Letter of Transmittal should be
directed to the exchange agent addressed as follows:
By Facsimile:
(212) 701-7636
(212) 701-7640
Attention: Reorganization Department
Confirm by telephone:
(212) 701-7624
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<PAGE> 21
By Registered or Certified Mail:
Harris Trust Company of California
c/o Harris Trust Company of New York
Wall Street Station
P.O. Box 1010
New York, NY 10268-1010
Attention: Reorganization Department
By Hand or Overnight Courier:
Harris Trust Company of California
c/o Harris Trust Company of New York
88 Pine Street, 19th Floor
New York, NY 10005
Attention: Reorganization Department
DELIVERY OF THE LETTER OF TRANSMITTAL OR OF WRITTEN NOTICES OF WITHDRAWAL
TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA
FACSIMILE OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY OF
SUCH LETTER OF TRANSMITTAL.
Fees and Expenses
We will not make any payments to brokers, dealers or other persons
soliciting acceptances of the exchange offer.
The estimated cash expenses to be incurred in connection with the exchange
offer will be paid by us and are estimated to be $500,000.
Transfer Taxes
Holders who tender their outstanding notes for exchange will not be
obligated to pay any transfer taxes in connection with the exchange. However
holders who instruct us to register new notes in the name of, or request that
outstanding notes not tendered or not accepted in the exchange offer be returned
to, a person other than the registered tendering holder will be responsible for
the payment of any applicable transfer tax thereon.
THE COMPANY
We are a leading provider of personal communications services through
technology based on the wireless communications standard known as Global System
for Mobile Communications, commonly known as GSM. Our licenses, together with
licenses held by joint ventures in which we are an investor, cover 17 of the 25
largest markets in the continental United States and over 193 million persons.
Our company was incorporated in June 1999 as a Delaware corporation to act as
the parent company for the business combination of VoiceStream Wireless
Corporation, a Washington corporation ("VoiceStream Washington," now known as VS
Washington, Inc.), Omnipoint and Aerial Communications, Inc., a Delaware
corporation. On February 25, we became the parent company of both VS Washington
and Omnipoint. We are now the successor registrant of VoiceStream Washington.
Our business currently consists of the combined businesses of VS Washington and
Omnipoint and their subsidiaries. The shareholders of Aerial have approved
transactions through which we will also become the parent of Aerial. There can
be no assurance that
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<PAGE> 22
the Aerial transactions will be completed. Upon completion of those
transactions, we will add the current business of Aerial to our business. The
combined businesses will have licenses that cover 23 of the 25 largest markets
in the continental United States and over 222 million persons.
We are organized as a Delaware corporation with our principal executive
offices located at 3650 131st Avenue S.E., Bellevue, WA 98006. Our telephone
number is (425) 653-4600. Our common stock is traded on the Nasdaq Stock Market
under the symbol "VSTR."
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the deficiency of our actual earnings to our
actual fixed charges for the year ended December 31, 1995, 1996, 1997, 1998 and
1999, and the deficiency of our pro forma earnings to our pro forma fixed
charges for the year ended December 31, 1999, adjusted to give effect to the
mergers with Omnipoint and Aerial as if they occurred on January 1, 1999.
<TABLE>
<CAPTION>
PRO FORMA ACTUAL
----------- ------------------------------------------------------
1999 1999 1998 1997 1996 1995
----------- --------- --------- --------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Earnings (Loss)........... $(1,467,555) $(340,569) $(213,049) $(200,258) $(80,179) $(3,525)
Fixed Charges............. 510,119 116,654 43,017 67,557 11,371 603
----------- --------- --------- --------- -------- -------
Deficiency................ $(1,977,674) $(457,223) $(256,066) $(267,815) $(91,550) $(4,128)
=========== ========= ========= ========= ======== =======
</TABLE>
USE OF PROCEEDS
We will not receive any cash proceeds from the issuance of our new notes in
the exchange offer.
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<PAGE> 23
DESCRIPTION OF OUR NEW NOTES
GENERAL
You can find the definitions of certain capitalized terms used in the
following summary under the subheading "-- Certain Definitions".
We will issue the 10 3/8% Senior Notes due 2009 under an indenture, between
us and Harris Trust Company of California, as trustee. The terms of the notes
include those stated in the indenture and those made part of the indenture by
reference to the Trust Indenture Act of 1939, as amended.
The following is a summary of the material provisions of the indenture. It
does not restate the indenture in its entirety. We urge you to read the
indenture, because it, and not this description, defines your rights as holders
of notes. Copies of the indenture are available upon request from the trustee.
Notwithstanding anything herein to the contrary, no provisions of the
indenture shall be violated as a result of the consummation of any of the
transactions contemplated by the Aerial reorganization, nor will the provisions
of the indenture with respect to change of control events or requiring certain
actions with respect to proceeds for Asset Dispositions be applicable to any
such transaction.
BRIEF DESCRIPTION OF THE NOTES
The notes will:
- be general obligations of ours;
- rank equal in right of payment with all of our other senior unsecured
Indebtedness, including the Senior Discount Notes;
- rank senior in right of payment to all of our subordinated unsecured
Indebtedness;
- rank junior to secured obligations of ours, with respect to the assets
which are secured, and will rank equal to such obligations to the extent
that the secured assets do not satisfy the secured obligations;
- rank junior to all existing and future Indebtedness and other liabilities
of our subsidiaries;
- be deemed to have accrued interest from November 9, 1999 (or May 15,
2000, if they are issued after that date);
- accrue interest at a rate of 10 3/8%, which is payable semi-annually on
May 15 and November 15 commencing May 15, 2000 (unless the notes are
issued after that date in which case the first interest payment date will
be November 15, 2000); and
- mature on November 15, 2009.
We will offer to repurchase notes under circumstances described in the
indenture upon:
- a Change of Control Triggering Event; or
- an Asset Disposition by us or any of our Restricted Subsidiaries.
We may repurchase all notes upon a Change of Control Triggering Event.
The indenture governing the notes also contain the following covenants:
- restrictions on incurrence of consolidated indebtedness;
- restrictions on Restricted Payments;
- restrictions on dividend and other payment restrictions affecting
Subsidiaries;
- limitation on issuances and sales of Capital Stock of Restricted
Subsidiaries;
- restrictions on transactions with Affiliates;
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<PAGE> 24
- restrictions on Liens;
- restrictions on sale and leaseback transactions;
- undertaking to deliver reports; and
- restrictions on merger, consolidation or sales of assets.
Our operations are conducted through Subsidiaries and, therefore, depend on
the cash flow of Subsidiaries to meet our obligations, including obligations
under the notes. Our Subsidiaries, including Omnipoint and its Subsidiaries will
not be guarantors of the notes and the notes will be structurally subordinated
to all indebtedness, including all borrowings, of those Subsidiaries. Our right
to receive assets of any Subsidiaries upon the liquidation or reorganization of
those Subsidiaries (and the consequent right of the holders of the notes to
participate in those assets) will be legally subordinated to the claims of that
Subsidiary's creditors, except to the extent that we are recognized as a
creditor of that Subsidiary. If we are recognized as a creditor of a Subsidiary,
our claims would still be subordinate in right of payment to any security in the
assets of that Subsidiary and any indebtedness of that Subsidiary senior to that
held by us. See "Risk Factors -- The notes are the obligations of a holding
company which has no operations and depends on subsidiaries for cash, and its
subsidiaries may be limited in their ability to make funds available".
As of the date of the indenture, all of our Subsidiaries will be Restricted
Subsidiaries and assuming completion of the Aerial reorganization, Aerial and
all of its Subsidiaries will be Restricted Subsidiaries. However, under certain
circumstances, we will each be able to designate current or future Subsidiaries
as Unrestricted Subsidiaries. Unrestricted Subsidiaries will not be subject to
many of the restrictive covenants set forth in the indenture.
PRINCIPAL, MATURITY AND INTEREST
On November 9, 1999, we issued notes with an aggregate principal amount of
up to $1.1 billion. The indenture governing those notes allows us to issue
additional notes in principal amount of up to $1.1 billion. The notes being
offered in exchange for the Omnipoint notes will be an additional issuance under
that indenture. The issuance of any of additional notes is subject to our
ability to incur Indebtedness under the covenant described under
"-- Covenants -- Limitation on Consolidated Indebtedness" and similar
restrictions in the instruments governing our other Indebtedness. Any such
additional notes will be treated as part of the same class and series as the
notes originally issued for purposes of voting under the indenture.
Interest on the notes will accrue at the rate of 10 3/8% per annum and will
be payable in U.S. dollars semiannually in arrears on May 15 and November 15. We
will make each interest payment to holders of record on the immediately
preceding May 1 and November 1.
Cash interest will accrue on the notes from the most recent date to which
interest has been paid or, if no interest has been paid, from November 9, 1999.
Interest will be computed on the basis of a 360-day year consisting of twelve
30-day months.
METHOD OF RECEIVING PAYMENTS ON THE NOTES
If a holder has given wire transfer instructions to us, we will make all
payments of principal, premium and interest, if any, on that holder's notes in
accordance with those instructions. All other payments on the notes will be made
at the office or agency of the paying agent and registrar for the notes within
the City and State of New York unless we elect to make interest payments by
check mailed to the holders at their principal address set forth in the register
of holders.
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<PAGE> 25
PAYING AGENT AND REGISTRAR FOR THE NOTES
The trustee under the indenture will initially act as the paying agent and
registrar for the notes. We may change the paying agent or registrar under the
indentures without prior notice to the holders of the notes, and we or any of
our Subsidiaries may act as paying agent or registrar under the indenture.
OPTIONAL REDEMPTION
Until November 15, 2002, we may on any one or more occasions redeem up to
35% of the aggregate principal amount of the notes at a redemption price of
110.375% of the principal amount thereof with the net cash proceeds of one or
more Public Equity Offerings and/or Strategic Equity Infusions; provided that:
(1) at least 65% of the aggregate principal amount of notes remains
outstanding immediately after such redemption (excluding notes held by us
or our Subsidiaries); and
(2) the redemption occurs within 60 days of the date of the Public
Equity Offering or Strategic Equity Investment.
Except pursuant to the preceding paragraph and the provisions of the
indenture governing the notes described under "-- Optional Redemption -- Change
of Control" below, the notes will not be redeemable at our option prior to
November 15, 2004. After November 15, 2004, we may redeem all or a part of the
notes upon not less than 30 nor more than 60 days' notice, at the redemption
prices (expressed as percentages of principal amount) set forth below plus
accrued interest, if any, on the notes redeemed to the applicable redemption
date (subject to the right of holders of record on the relevant record date to
receive interest due on the relevant interest payment date), if redeemed during
the 12-month period beginning on November 15 of the years indicated below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
---- ----------
<S> <C>
2004.............................................. 105.188%
2005.............................................. 103.458%
2006.............................................. 101.729%
2007 and thereafter............................... 100.0%
</TABLE>
SELECTION AND NOTICE
If less than all the notes are to be redeemed at any time, the trustee
under the applicable indenture will select notes for redemption as follows:
(1) if the notes are listed on any national securities exchange, in
compliance with the requirements of the principal national securities
exchange, if any, on which the notes are listed; or
(2) if the notes are not listed on any national securities exchange,
on a pro rata basis, by lot or by such method as the trustee shall deem
fair and appropriate.
No notes of $1,000 principal amount at maturity or less will be redeemed in
part. Notices of redemption will 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 such note shall state the portion of the principal amount of that
note to be redeemed. A new note in principal
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<PAGE> 26
amount equal to the unredeemed portion of the original note presented for
redemption will be issued in the name of the holder of such note 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 or accrete on notes or portions of them called for redemption.
MANDATORY REDEMPTION
We are not required to make mandatory redemption or sinking fund payments
with respect to the notes.
OPTIONAL REDEMPTION -- CHANGE OF CONTROL
If a Change of Control Triggering Event occurs, we will have the right to
repurchase in whole the notes at a redemption price equal to the greater of:
(1) 101% of the aggregate principal amount of the notes plus accrued
and unpaid interest (subject to the right of holders of record on the
relevant record date to receive interest due on the relevant interest
payment date), and
(2) the sum of the present values of the remaining scheduled payments
of principal and interest thereon (not including the portion of any such
payments of interest accrued as of the redemption date) discounted to the
redemption date on a semiannual basis at the Adjusted Treasury Rate, plus
accrued and unpaid interest.
A "Change of Control Triggering Event" will be deemed to have occurred if a
Change of Control and a Rating Decline occur. A"Rating Decline" will be deemed
to have occurred if at any time within the earlier of (1) 90 days after the date
of public notice of a Change of Control, or of our intention or the intention of
any Person to effect a Change of Control and (2) the occurrence of the Change of
Control (which period shall in either event be extended so long as the rating of
the notes is under publicly announced consideration for possible downgrade by a
Rating Agency), the rating of the notes is decreased by either Rating Agency by
one or more Gradations and the rating by both Rating Agencies on the notes
following such downgrade is below Investment Grade.
Within 30 days following any Change of Control Triggering Event, we will
mail a notice to each holder and each holder of our senior Indebtedness
containing similar provisions to those set forth in the indentures describing
the transaction or transactions that constitute the Change of Control Triggering
Event and indicating our intention to repurchase the notes and such other senior
Indebtedness (in which case the provisions of the indentures described under
"-- Repurchase at the Option of Holders -- Change of Control" will not be
applicable) on the Change of Control Payment Date specified in the notice. The
Change of Control Payment Date will be no earlier than 30 days and no later than
60 days from the date the notice is mailed, pursuant to the procedures required
by the indentures and described in such notice.
REPURCHASE AT THE OPTION OF HOLDERS
CHANGE OF CONTROL
If a Change of Control Triggering Event occurs, each holder of notes will
have the right to require us to repurchase all or any part (equal to $1,000 or
an integral multiple of $1,000) of such holder's notes. The offer price will be
payable in cash and will be 101% of the aggregate principal amount of the notes
plus accrued and unpaid interest on the notes (subject to the right of holders
of record on the relevant record date to receive interest due on the relevant
interest payment date), to the date of purchase. Within 30 days following any
Change of Control Triggering Event, we will mail
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<PAGE> 27
a notice to each holder, and each holder of our senior indebtedness containing
provisions similar to those set forth in the indenture, describing the
transaction or transactions that constitute the Change of Control Triggering
Event and offering to repurchase notes and such other senior Indebtedness on the
Change of Control Payment Date specified in the notice. The Change of Control
Payment Date will be no earlier than 30 days and no later than 60 days from the
date the notice is mailed, pursuant to the procedures required by the indenture
and described in such notice.
On the Change of Control Payment Date, we will, to the extent lawful:
(1) accept for payment all notes or portions of notes properly
tendered;
(2) deposit with the paying agent an amount equal to the Change of
Control Payment in respect of all notes or portions of notes properly
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 of notes or portions of the notes being purchased by us.
The paying agent will promptly mail to each holder of notes properly
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 unpurchased portion of the
notes surrendered, if any; provided that the new note will be in a principal
amount of $1,000 or an integral multiple of $1,000.
The Change of Control Triggering Event provisions described above will be
applicable whether or not any other provisions of the indentures are applicable.
We will comply with the requirements of Section 14(e) of the Exchange Act and
any other securities laws or regulations to the extent those laws and
regulations are applicable.
Subject to the limitations discussed below, we could, in the future, enter
into certain transactions, including acquisitions, refinancings or other
recapitalizations, that would not constitute a Change of Control under the
indenture, but that could increase the amount of Indebtedness outstanding at
such time or otherwise affect our capital structure. The Aerial merger will not
be a Change of Control. Certain restrictions on our ability to incur additional
Indebtedness are contained in the covenants described under
"-- Covenants -- Limitation on Consolidated Indebtedness,"
"-- Covenants -- Limitation on Liens" and "-- Certain Covenants -- Limitation on
Sale and Leaseback Transactions". Such restrictions can only be waived with the
consent of the holders of a majority in principal amount of the notes then
outstanding. Except for the limitations contained in the covenants, however, the
indenture will not contain any covenants or provisions that may afford holders
of the notes protection in the event of certain highly leveraged transactions.
Our credit facility limits our access to the cash flow of our Subsidiaries
and will, therefore, restrict our ability to purchase any notes. Our Credit
Facility also provides that the occurrence of certain change of control events
constitutes a default under the Credit Facility. In the event that a Change of
Control Triggering Event occurs at a time when our Subsidiaries are prohibited
from making distributions to us to purchase notes, and assuming the Aerial
reorganization is completed, Aerial Subsidiaries will be prohibited from making
distributions to Aerial, thus restricting our ability to purchase notes, we
could cause those Subsidiaries to seek the consent of the lenders under the
credit facility to allow the distributions or could attempt to refinance the
Credit Facility. If we do not obtain a consent or repay such borrowings, we will
remain prohibited from purchasing notes. In that case, our failure to purchase
tendered notes would constitute an Event of Default under the indentures which
would, in turn, constitute a default under the Credit Facility. Future
Indebtedness may also contain prohibitions on the occurrence of certain events
that would constitute a Change of
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<PAGE> 28
Control or require such future Indebtedness to be repurchased if a Change of
Control occurs. Moreover, the exercise by the holders of their right to require
us to repurchase the notes could cause a default under such Indebtedness, even
if the Change of Control itself does not, due to the financial effect of such
repurchase on us. Finally, our ability to pay cash to the holders of notes
following the occurrence of a Change of Control Triggering Event may be limited
by our then-existing financial resources, including our ability to access the
cash flow of our Subsidiaries, including any Subsidiaries of Aerial that become
Subsidiaries upon completion of the Aerial reorganization. See "Risk
Factors -- The notes are the obligations of a holding company which has no
operations and depends on subsidiaries for cash and its subsidiaries may be
limited in their ability to make funds available". There can be no assurance
that sufficient funds will be available when necessary to make any required
repurchases.
The provision under the indenture relating to our obligation to make an
offer to repurchase the notes as a result of a Change of Control Triggering
Event may be waived or modified with the written consent of the holders of a
majority in principal amount of our senior notes.
The definition of Change of Control includes a phrase relating to the sale,
transfer or other conveyance of "all or substantially all" of our assets on a
consolidated basis. Although there is a developing 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 us to repurchase the notes as a result of a sale, transfer or other
conveyance of less than all of our assets to another Person or group may be
uncertain.
ASSET DISPOSITION
We and our respective Restricted Subsidiaries will not consummate an Asset
Disposition unless:
(1) we (or the Restricted Subsidiary, as the case may be) receive
consideration at the time of such Asset Disposition at least equal to the
Fair Market Value of the assets issued or sold or otherwise disposed of;
and
(2) at least 75% of the consideration received in such Asset
Disposition by us or such Restricted Subsidiary is in the form of cash or
readily marketable cash equivalents, the assumption of Indebtedness of ours
or any Restricted Subsidiary or assets of a Telecommunications Business.
Within the applicable time period specified below, we or the Restricted
Subsidiary may apply Net Available Proceeds from an Asset Disposition to:
(1) invest in assets of a Telecommunications Business or in a Person
engaged in a Telecommunications Business; or
(2) permanently repay any of our Indebtedness or any Indebtedness of a
Restricted Subsidiary.
Any Net Available Proceeds from Asset Dispositions that are not applied or
invested in accordance with the preceding paragraph within 365 days from the
date of such Asset Disposition, or within 18 months of such Asset Disposition if
we or a Restricted Subsidiary has entered into a binding agreement to invest in
such assets or Person, will be deemed to constitute Excess Proceeds. When the
aggregate amount of Excess Proceeds exceeds $10 million (taking into account
income earned on such Excess Proceeds), we will be required to make an Offer to
Purchase to all holders of notes and all holders of our other senior
Indebtedness containing provisions similar to those set forth in the indenture,
on a pro rata basis according to principal amount, to purchase the maximum
25
<PAGE> 29
principal amount (or accreted value, as applicable) of notes and our other
senior Indebtedness that may be purchased out of the Excess Proceeds. The offer
price in any Offer to Purchase will be payable in cash and will be 100% of the
principal amount of the notes, plus accrued and unpaid interest to the date of
purchase. In the case of any other senior Indebtedness, the offer price will be
100% of the principal amount (or accreted value, as applicable) of the
Indebtedness plus accrued and unpaid interest thereon, if any, to the date of
purchase. If the aggregate principal amount of notes and our other senior
Indebtedness surrendered for purchase by holders exceeds the amount of Excess
Proceeds, then the notes and our other senior Indebtedness will be purchased pro
rata according to the outstanding principal amount of such notes and our other
senior Indebtedness with such adjustments as may be deemed appropriate by us so
that only notes in denominations of $1,000 or integral multiples thereof shall
be purchased. To the extent that any portion of the amount of Net Available
Proceeds remains after compliance with the preceding sentence and provided that
all holders of notes and other senior Indebtedness have been given the
opportunity to tender their notes or other senior Indebtedness for purchase
pursuant to the Offer to Purchase, we or the Restricted Subsidiary may use the
remaining amount at their own discretion.
COVENANTS
LIMITATION ON CONSOLIDATED INDEBTEDNESS
We and our respective Restricted Subsidiaries will not, incur any
Indebtedness unless our Indebtedness to EBITDA Ratio, after giving pro forma
effect thereto, is less than
<TABLE>
<CAPTION>
FOR THE PERIOD RATIO
-------------- -------------
<S> <C>
Prior to December 31, 2005.................................. 8.0 to 1; and
Thereafter.................................................. 7 to 1
</TABLE>
Furthermore, the first paragraph of this covenant will not prohibit the
incurrence of any of the following items of Indebtedness:
(1) Indebtedness of ours or any of our Restricted Subsidiaries, as the
case may be, that is outstanding or committed at the time of the issuance
of the notes;
(2) Indebtedness of ours or any of our Restricted Subsidiaries, as the
case may be, that is incurred under our Credit Facility;
(3) Telecommunications Indebtedness;
(4) the incurrence by us or any of our Restricted Subsidiaries of
Acquired Indebtedness in connection with the acquisition of assets or a new
Subsidiary and the incurrence by our Restricted Subsidiaries of
Indebtedness as a result of the designation of an Unrestricted Subsidiary
as a Restricted Subsidiary; provided that, in the case of any such
incurrence of Acquired Indebtedness, such Acquired Indebtedness was
incurred by the prior owner of such assets or such Restricted Subsidiary
prior to such acquisition by us or one of our Restricted Subsidiaries and
was not incurred in connection with, or in contemplation of, the
acquisition by us or one of our Restricted Subsidiaries; and provided
further that, in the case of any incurrence pursuant to this clause (4), as
a result of such acquisition by us or one of our Restricted Subsidiaries,
we and our respective Restricted Subsidiaries would be permitted to incur
an additional $1.00 of Indebtedness pursuant to the first paragraph of this
covenant, as applicable;
(5) the incurrence by us or any of our Restricted Subsidiaries of
Indebtedness represented by Capital Lease Obligations, mortgage financings
or purchase money obligations, in each case incurred for the purpose of
financing all or any part of the purchase price or cost of construction or
improvement of property, plant or equipment used in our business or the
business of such
26
<PAGE> 30
Restricted Subsidiary, in an aggregate principal amount, including all
Indebtedness incurred to refund, refinance or replace any other
Indebtedness incurred pursuant to this clause (5), not to exceed $25
million at any one time outstanding;
(6) Indebtedness of ours or any of our Restricted Subsidiaries owing
to us or any of our Restricted Subsidiaries;
(7) Indebtedness of ours or any of our Restricted Subsidiaries to
renew, extend, refinance or refund any Indebtedness of ours or any of our
Restricted Subsidiaries outstanding or committed on the date of renewal,
extension, refinancing or refunding other than Indebtedness incurred
pursuant to clause (2) or (6); provided, however, that such Indebtedness
does not exceed the principal amount of outstanding or committed
Indebtedness so renewed, extended, refinanced or refunded plus financing
fees and other expenses (including make-whole or other repurchase payments
or premiums) associated therewith; provided, further, that
(a) such renewing, extending, refinancing or refunding Indebtedness
has a final maturity date the same as or later than the final maturity
date of the Indebtedness being renewed, extended, refinanced or
refunded;
(b) in the case of any refinancing or refunding of Indebtedness
pari passu to the notes, the refinancing or refunding Indebtedness is
made pari passu or subordinated to the notes and, in the case of any
refinancing or refunding of Indebtedness subordinated to the notes, the
refinancing or refunding Indebtedness is made subordinate to the notes
to substantially the same extent as the Indebtedness refinanced or
refunded; and
(c) such renewing, extending, refinancing or refunding Indebtedness
shall have an average life equal to or longer than the life of the
Indebtedness being renewed, extended, refinanced or refunded;
(8) any Guarantee by any Restricted Subsidiary of any Indebtedness
incurred under the Credit Facility in compliance with this paragraph;
(9) Indebtedness of ours or any of our Restricted Subsidiaries under
(or constituting reimbursement obligations with respect to) letters of
credit, performance or surety bonds or similar instruments issued in the
ordinary course of a Telecommunications Business, including letters of
credit in respect of workers' compensation claims or self-insurance,
provided, however, that upon the drawing of any such letter of credit or
other instrument, such obligations are reimbursed within 90 days following
such drawing;
(10) Indebtedness arising from agreements providing for
indemnification, purchase price adjustments or similar obligations, or from
guarantees of letters of credit, surety bonds or performance bonds securing
any obligation of ours or any of our Restricted Subsidiaries pursuant to
such agreements, in any case incurred in connection with the disposition of
any business, assets or Restricted Subsidiary of ours (other than
guarantees of Indebtedness incurred by any Person acquiring all or any
portion of such business, assets or Restricted Subsidiary of ours for the
purpose of financing such acquisition), in an amount not to exceed the
gross proceeds actually received by us or any Restricted Subsidiary in
connection with such disposition;
(11) Indebtedness incurred by us or any of our Restricted Subsidiaries
under Interest Rate Agreements or Currency Protection Agreements to hedge
permitted Indebtedness;
(12) Indebtedness of Omnipoint, Aerial or any of their respective
Subsidiaries that was outstanding or committed at November 9, 1999;
27
<PAGE> 31
(13) Indebtedness under the notes;
(14) Indebtedness due and owing to governmental entities in connection
with telecommunications license fees or indebtedness incurred to finance
the payment of deposits with and licensing fees to the FCC in connection
with FCC license auctions;
(15) Indebtedness of ours or any of our Restricted Subsidiaries, other
than Indebtedness permitted pursuant to clauses (1) through (14) above,
which, together with any other outstanding Indebtedness incurred pursuant
to this clause (15), does not exceed $50 million at any time outstanding or
committed.
Notwithstanding the foregoing, the maximum amount of Indebtedness that we
or any of our Restricted Subsidiaries may incur shall not be deemed to be
exceeded due solely to the result of fluctuations in the exchange rates of
currencies.
For purposes of determining any particular amount of Indebtedness under the
foregoing clauses, (1) Guarantees, Liens or obligations with respect to letters
of credit supporting Indebtedness otherwise included in the determination of
such particular amount shall not be included and (2) any Liens granted pursuant
to the equal and ratable provisions described below shall not be treated as
Indebtedness. For purposes of determining compliance with the Indebtedness
incurrence restriction, in the event that an item of Indebtedness meets the
criteria of more than one of the types of Indebtedness described in the above
clauses, we may be, in its respective sole discretion shall classify such item
of Indebtedness and only be required to include the amount and type of such
Indebtedness in one of such clauses.
LIMITATION ON RESTRICTED PAYMENTS
We and our Restricted Subsidiaries will not make any Restricted Payment
unless after giving effect to that Restricted Payment:
(1) no Event of Default or event which with notice or lapse of time or
both would become an Event of Default has occurred or is continuing;
(2) we would be permitted to incur an additional $1.00 of Indebtedness
pursuant to the first paragraph of the covenant described under
"-- Limitation on Consolidated Indebtedness"; and
(3) the total of all Restricted Payments made on or after the date of
the indentures is less than or equal to the sum of:
(a) Cumulative EBITDA less 1.6 times Cumulative Interest Expense;
(b) 100% of the aggregate Net Cash Proceeds received by us since
the date of the indentures from the issue or sale of our Equity
Interests or of our debt securities that have been converted into such
Capital Stock (other than to a Restricted Subsidiary);
(c) an amount equal to the net reduction in Investments made by us
or our Restricted Subsidiary subsequent to the date of the indenture in
any Person resulting from:
(A) payments of interest on debt, dividends, repayment of loans
or advances, or other transfers or distributions of property, in each
case to an Issuer or any Restricted Subsidiary from any Person;
28
<PAGE> 32
(B) to the extent that any Investment is sold for cash or
otherwise liquidated or repaid for cash, the after-tax cash return of
capital with respect to such Investment (less the cost of
disposition, if any); and
(C) the redesignation of any Unrestricted Subsidiary as a
Restricted Subsidiary, in which case such aggregate amount of the net
reduction in Investments will not exceed the amount of such
Investments previously made by us and our respective Restricted
Subsidiaries in such Person or Unrestricted Subsidiary, as the case
may be, which were treated as Restricted Payments; and
(d) $50 million.
So long as no Event of Default or event which with notice or lapse of time
or both would become an Event of Default has occurred and is continuing (other
than in the case of clause (2) below), the preceding provisions will not
prohibit:
(1) the payment of any dividend within 60 days after declaration
thereof if at the declaration date such payment would have complied with
the foregoing provision;
(2) the redemption, repurchase or other acquisition or retirement for
value of any our Indebtedness subordinated to the notes in exchange for or
out of the proceeds of the substantially concurrent sale (other than to a
Restricted Subsidiary) of our Equity Interests, or from the incurrence of
Indebtedness pursuant to a refinancing permitted under the provision of the
indenture described under clause (7) of "-- Limitation on Consolidated
Indebtedness";
(3) the repurchase, redemption or other acquisition or retirement for
value of our Equity in exchange for or out of the proceeds of the
substantially concurrent sale (other than to a Restricted Subsidiary) of
our Equity Interests (other than Disqualified Stock);
(4) the repurchase, redemption or other acquisition of our Equity
Interests held by any of our or our subsidiaries' present or former
employees, officers or directors; provided that the aggregate price paid
for all such repurchased, redeemed or otherwise acquired Equity Interests
shall not exceed $2.0 million in any fiscal year;
(5) the repurchase, redemption or other acquisition or retirement for
value of our Equity Interests to the extent necessary in the good faith
judgment of the Board of Directors evidenced by a Board Resolution
delivered to the trustee to prevent the loss or secure the renewal or
reinstatement of any material license or franchise held by us or any
Restricted Subsidiary from any government agency;
(6) the repurchase of Indebtedness subordinated to the notes at a
purchase price not greater than 101% of the principal amount thereof (plus
accrued and unpaid interest) pursuant to a mandatory offer to repurchase
made after a Change of Control Triggering Event, provided that we first
make an Offer to Purchase the notes (and repurchase all tendered notes)
under the indenture pursuant to the provisions of the indentures described
under "-- Repurchases at the Option of Holders -- Change of Control";
(7) Permitted Investments; and
(8) payments or distributions to dissenting stockholders pursuant to
applicable law in connection with a consolidation, merger or transfer of
assets that complies with the provisions of the indenture applicable to
mergers, consolidations and transfers of all or substantially all of the
property and assets of an Issuer.
29
<PAGE> 33
LIMITATIONS CONCERNING DISTRIBUTIONS AND TRANSFERS BY RESTRICTED SUBSIDIARIES
We and our Restricted Subsidiaries will not create or otherwise cause or
suffer to exist or become effective any consensual restriction or prohibition on
the ability of any Restricted Subsidiary to:
(1) pay dividends on, or make other distributions in respect of, its
Capital Stock, or any other ownership interest or participation in, or
measured by, its profits, to us or any of our Restricted Subsidiaries or
pay any Indebtedness or other obligation owed to us or any Restricted
Subsidiary;
(2) make any loans or advances to us or any of our Restricted
Subsidiaries; or
(3) transfer any of its property or assets to us or any of our
Restricted Subsidiaries.
However, the preceding restrictions will not apply to encumbrances or
restrictions existing under or by reason of:
(1) any agreement in effect on the date of the indentures;
(2) an agreement relating to any Indebtedness of such Restricted
Subsidiary which was outstanding or committed prior to the date on which
such Restricted Subsidiary was acquired by us other than in anticipation of
becoming a Restricted Subsidiary;
(3) an agreement described in (1), (2) or (4) of this paragraph
effecting a renewal, extension, refinancing or refunding of any existing
agreement, provided, however, that the provisions contained in such
renewal, extension, refinancing or refunding agreement relating to such
encumbrance or restriction are no more restrictive in any material respect
than the provisions contained in the agreement the subject thereof;
(4) an agreement entered into after the date of the indenture relating
to any Indebtedness the incurrence of which is permitted under the
indenture, provided, however, that the provisions contained in such
agreement relating to such encumbrance or restriction are either no more
restrictive in any material respect than those contained in the indenture
or no more restrictive in any material respect than those contained in the
credit facility;
(5) an agreement by which we or any of our Restricted Subsidiaries
obtain financing, provided that (A) such restriction is not materially more
restrictive than customary provisions in comparable financing agreements
and (B) our management determines that at the time such agreement is
entered into such restriction will not materially impair our ability to
make payments on the notes, such determination to be confirmed by an
Officers' Certificate delivered to the trustee;
(6) applicable law;
(7) customary provisions restricting subletting or assignment of
property subject to any lease governing any leasehold interest of any of
our Restricted Subsidiary;
(8) purchase money obligations for property acquired in the ordinary
course of business that impose restrictions of the type referred to in
clause (3) of the preceding paragraph;
(9) restrictions of the type referred to in clause (3) of the
preceding paragraph contained in security agreements securing Indebtedness
of ours or a Restricted Subsidiary of ours to the extent that such Liens
were otherwise incurred in accordance with the covenant described under
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<PAGE> 34
"-- Limitation on Liens" and restrict the transfer of the collateral
subject to such agreements without restricting the transfer of other
property; or
(10) an agreement that has been entered into for the sale or
disposition of all or substantially all of the Capital Stock of, or
property and assets of, a Restricted Subsidiary of ours.
Nothing contained in the foregoing clauses shall prevent us or any of our
Restricted Subsidiaries from (1) creating, incurring, assuming or suffering to
exist any Liens otherwise permitted under the indenture or (2) restricting the
sale or other disposition of property or assets of ours or any of our Restricted
Subsidiaries that secure Indebtedness of ours or any of our Restricted
Subsidiaries.
LIMITATION ON ISSUANCES AND SALES OF CAPITAL STOCK OF RESTRICTED SUBSIDIARIES
We and our Restricted Subsidiaries will not, transfer, convey, sell, lease
or otherwise dispose of any Capital Stock of such Restricted Subsidiary or any
other Restricted Subsidiary to any Person other than us or a Restricted
Subsidiary; and will not permit any Restricted Subsidiary to issue shares of its
Capital Stock or securities convertible into, or warrants, rights or options, to
subscribe for or purchase shares of, its Capital Stock to any Person other than
us or a Restricted Subsidiary, unless, in each such case:
(1) immediately after giving effect to such issuance or sale, such
Restricted Subsidiary would no longer constitute a Restricted Subsidiary
and any Investment in such Person remaining after giving effect to such
issuance or sale would have been permitted to be made under the provision
of the indenture described under "-- Limitation on Restricted Payments"; or
(2) if such sale or disposition is effected in accordance with the
terms of the provision of the indenture described under "-- Repurchase at
the Option of Holders -- Asset Dispositions".
The foregoing shall not prohibit the issuance of Capital Stock of our
Restricted Subsidiary pursuant to an employee stock option plan approved by the
Boards of Directors of the Restricted Subsidiary and us.
LIMITATIONS ON TRANSACTIONS WITH AFFILIATES AND RELATED PERSONS
We and our respective Restricted Subsidiaries will not enter into any
transaction involving aggregate consideration in excess of $5 million,
including, without limitation, any purchase, sale, lease or exchange of property
or the rendering of any service, with or to any Affiliate or Related Person
(other than a Restricted Subsidiary) (each of the foregoing, an "Affiliate
Transaction"), unless our management determines (which determination will be
evidenced by an Officers' Certificate) that:
(1) such transaction is in the best interests of ours or such
Restricted Subsidiary; and
(2) such transaction is on terms that are no less favorable to ours or
a Restricted Subsidiary than those which might be obtained in arm's length
transactions with a third party at the time.
In the event that any transaction contemplated by the preceding paragraph
involves aggregate consideration in excess of $10 million, a determination by a
majority of the disinterested members of our Board of Directors (which
determination shall be evidenced by a Board Resolution) will be required with
respect to clause (1) and (2) above.
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Notwithstanding the foregoing, the following items will not be deemed to be
Affiliate Transactions:
(1) transactions between or among us and/or our Restricted
Subsidiaries (other than a Restricted Subsidiary in which an Affiliate or
Related Person of ours, other than a Wholly Owned Restricted Subsidiary,
owns any Capital Stock or any option, warrant or other right to purchase
Capital Stock);
(2) customary payment of compensation to employees, officers or
consultants in the ordinary course of business and payment of reasonable
directors' fees and customary indemnification and insurance arrangements in
favor of directors, regardless of affiliation with us;
(3) Restricted Payments that are permitted by the provision of the
indentures described above under the caption "-- Limitation on Restricted
Payments";
(4) payments and other transactions required under or contemplated by
any agreement in effect on the date of the indentures and disclosed in our
Form 10/A filed with the SEC on April 13, 1999, our Form 10-Q for the
quarter ended June 30, 1999, our current reports on Form 8-K filed prior to
October 15, 1999 (or not required to be disclosed therein pursuant to the
rules and regulations of the Commission) and, assuming completion of the
Aerial reorganization, Aerial's Form 10-K for the fiscal year ended
December 31, 1998 and Forms 10-Q and 8-K filed during calendar year 1999
prior to November 4, 1999 (or not required to be disclosed therein pursuant
to the rules and regulations of the Commission), or any agreement in effect
at the time that an entity becomes a Restricted Subsidiary or is merged
into us (and was not entered into in anticipation of such acquisition), or
any amendment thereto or replacement of such agreement so long as any such
amendment or replacement is not disadvantageous to the holders in any
material respect; and
(5) loans or advances to officers or employees of ours or our
Restricted Subsidiary to pay business related travel expenses or reasonable
relocation costs of such officers or employees in connection with their
employment by us or any of our Restricted Subsidiaries.
LIMITATION ON LIENS
We and our Restricted Subsidiaries will not incur or suffer to exist any
Lien on or with respect to any property or assets now owned or hereafter
acquired to secure any Indebtedness without making, or causing such Restricted
Subsidiary to make, effective provision for securing the notes:
(1) equally and ratably with such Indebtedness as to such property for
so long as such Indebtedness will be so secured; or
(2) in the event such Indebtedness is Indebtedness of over which is
subordinate in right of payment to the notes, prior to such Indebtedness as
to such property for so long as such Indebtedness will be so secured.
The foregoing restrictions will not apply to the following Permitted Liens:
(1) Liens existing in respect of any Indebtedness that exists on the
date of the indentures or is outstanding or permitted under our Credit
Facility;
(2) Liens in favor of us or a Wholly Owned Restricted Subsidiary of
ours on the assets or Capital Stock of another Wholly Owned Restricted
Subsidiary of ours;
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(3) Liens to secure Indebtedness outstanding or committed for the
purpose of financing all or any part of the purchase price or the cost of
construction or improvement of the equipment or other property subject to
such Liens; provided, however, that:
(a) the principal amount of any Indebtedness secured by such a Lien
does not exceed 100% of such purchase price or cost;
(b) such Lien does not extend to or cover any other property other
than such item of property or any improvements on such item; and
(c) the incurrence of such Indebtedness is otherwise permitted by
the indenture;
(4) Liens on property existing immediately prior to the time of
acquisition thereof (and not incurred in anticipation of the financing of
such acquisition);
(5) Liens to secure Indebtedness to extend, renew, refinance or refund
(or successive extensions, renewals, refinancings or refundings), in whole
or in part, Indebtedness secured by any Lien referred to in the foregoing
clauses (1), (3) and (4) so long as such Lien does not extend to any other
property and the principal amount of Indebtedness so secured is not
increased except as otherwise permitted under the provision of the
indentures described under clause (2) or (7) of "-- Limitation on
Consolidated Indebtedness";
(6) Liens securing any Indebtedness of any of the Restricted
Subsidiaries of ours that was permitted by the terms of the indentures to
be incurred;
(7) Liens on any Capital Stock of any Unrestricted Subsidiary of ours
securing Indebtedness of such Subsidiary that is Non-Recourse Indebtedness;
(8) Liens to secure the performance of statutory obligations, surety
or appeal bonds, performance bonds or other obligations of a like nature
incurred in the ordinary course of business (other than obligations for the
payment of money);
(9) Liens for taxes, assessments or governmental charges or claims
that are not yet delinquent or that are being contested in good faith by
appropriate proceedings promptly instituted and diligently conducted;
provided that any reserve or other appropriate provision as shall be
required in conformity with generally accepted accounting principles shall
have been made therefor;
(10) Carriers', warehousemen's, mechanics', landlords', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business
in respect of obligations that are not yet due, are bonded or are being
contested in good faith by appropriate proceedings if adequate reserves
with respect thereto are maintained on our books or our Restricted
Subsidiary, as the case may be, in conformity with generally accepted
accounting principles; and
(11) Liens securing Interest Rate Agreements entered into in the
ordinary course of business on any property also securing the permitted
Indebtedness to which such Interest Rate Agreements relate.
LIMITATION ON SALE AND LEASEBACK TRANSACTIONS
We and our Restricted Subsidiaries will not enter into any Sale and
Leaseback Transaction with respect to any property of ours or any of our
Restricted Subsidiaries (other than a Sale and Leaseback Transaction between us
or a Restricted Subsidiary or any of them).
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The preceding covenant will not prohibit us or any of our Restricted
Subsidiaries from entering into a Sale and Leaseback Transaction if:
(1) we and our respective Restricted Subsidiaries would be entitled to
create or incur a Lien to secure Indebtedness pursuant to the provision in
the indenture described under "-- Limitation on Liens" equal in amount to
the Attributable Value of the Sale and Leaseback Transaction without
equally and ratably securing the notes; and
(2) the Sale and Leaseback Transaction is treated as an Asset
Disposition and the provision in the indenture described under
"-- Repurchase at the Option of Holders -- Asset Disposition" is satisfied
with respect to such Sale and Leaseback Transaction.
PROVISION OF FINANCIAL INFORMATION
Whether or not required by the SEC, so long as any notes are outstanding,
we will file with the Commission the annual reports, quarterly reports and other
documents which we would have been required to file with the Commission pursuant
to such Section 13(a) or 15(d) or any successor provision thereto if we were so
required, such documents to be filed with the Commission on or prior to the
respective dates (the "Required Filing Dates") by which we would have been
required so to file such documents if we were so required.
In addition, whether or not required by the SEC, so long as any notes are
outstanding, we will furnish to the holders of notes and the trustee within 15
days of each Required Filing Date copies of the annual reports, quarterly
reports and other documents which we file with the Commission pursuant to such
Section 13(a) or 15(d) or any successor provision thereto or would have been
required to file with the Commission pursuant to such Section 13(a) or 15(d) or
any successor provisions thereto if we were required to be subject to such
Sections. If filing such documents by us, with the Commission is not permitted
under the Securities Exchange Act of 1934, we will promptly upon written request
supply copies of such documents to any prospective holder.
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
We will not consolidate with or merge into any Person or permit any other
Person to consolidate with or merge into us, or transfer, sell, convey or lease
or otherwise dispose of all or substantially all of our assets to, any Person
unless:
(1) (a) we are the surviving entity or (b) if such we are not the
surviving entity then the successor or transferee is a corporation
organized under the laws of the United States, any state thereof or the
District of Columbia and assumes all our obligations under the notes and
the indentures,
(2) after giving effect to such transaction, no Event of Default or
event which with notice or lapse of time would become an Event of Default
has occurred,
(3) (a) immediately after giving effect to such transaction, we would
be permitted to incur at least $1.00 of additional Indebtedness pursuant to
the provision of the indenture described in the first paragraph under
"-- Limitation on Consolidated Indebtedness" or (b) after giving effect to
such transaction the Indebtedness to EBITDA Ratio is not higher than the
Indebtedness to EBITDA Ratio prior to giving effect to such transaction;
and
(4) an Officers' Certificate and an Opinion of Counsel covering such
conditions shall be delivered to the trustee.
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EVENTS OF DEFAULT AND REMEDIES
Each of the following constitutes an Event of Default under the indentures:
(1) failure to pay the principal of the notes when due and payable;
(2) failure for 30 days to pay the interest, if any, on the notes when
due and payable;
(3) failure to perform or comply with the provisions of the indenture
described under "-- Consolidation, Merger, Conveyance, Transfer or Lease";
(4) failure to perform any other covenant or agreement of ours under
the indenture continued for 30 days after written notice to us by the
trustee or holders of at least 25% in aggregate principal amount of
outstanding notes;
(5) default by us or any of our respective Restricted Subsidiaries
under the terms of any instrument evidencing or securing Indebtedness
having an outstanding principal amount in excess of $25 million in the
aggregate, which default results in the acceleration of the payment of such
Indebtedness or constitutes the failure to pay the principal of such
Indebtedness at maturity;
(6) the rendering of a final judgment or judgments against us or any
of our Restricted Subsidiaries in an amount in excess of $25 million which
remains undischarged or unstayed for a period of 60 days after the date on
which the right of appeal has expired; and
(7) certain events of bankruptcy, insolvency or reorganization
described in the indentures affecting either us or a Restricted Subsidiary.
If an Event of Default, other than an event described under (7) above,
occurs and is continuing, either the trustee or the holders of at least 25% in
aggregate principal amount of the notes of either series by notice as provided
in the applicable indenture may declare the principal amount of the notes of
such series to be due and payable immediately; provided, however, that after
such acceleration, but before a judgment or decree based on acceleration, the
holders of a majority in aggregate principal amount of outstanding Notes of such
series may, under certain circumstances, rescind and annul such acceleration if
all Events of Default, other than the nonpayment of accelerated principal of the
Notes, have been cured or waived as provided in the applicable indenture. If an
Event of Default described under (7) above shall occur, the Notes will become
immediately due and payable without any declaration or other act on the part of
the trustee or any holder.
No holder of any Note will have any right to institute any proceeding with
respect to the applicable indenture or for any remedy thereunder, unless such
holder has previously given to the trustee written notice of an Event of Default
and unless the holders of at least 25% in aggregate principal amount of the
outstanding Notes of the applicable series have made written request to the
trustee and the trustee has not received from the holders of a majority in
aggregate principal amount of the outstanding Notes of such series a direction
inconsistent with such request and has failed to institute such proceeding
within 60 days. However, such limitations do not apply to a suit instituted by a
holder of a Note for enforcement of payment of the principal of and premium, if
any, or interest on such Note on or after the respective due dates expressed in
such note. The holders of a majority in aggregate principal amount of the notes
of the applicable series outstanding may waive any existing Default except a
Default in the payment of interest or principal (including premium) on the
notes.
FORM, DENOMINATION, TRANSFER, EXCHANGE AND BOOK-ENTRY PROCEDURES
The notes will be issued in fully registered form, without interest
coupons, in denominations of $1,000 and any integral multiple thereof. No
service charge will be made for any transfer or exchange
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of notes, but we may require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection therewith.
CERTAIN DEFINITIONS
"Acquired Indebtedness" 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, including, without limitation, Indebtedness 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.
"Adjusted Treasury Rate" will be determined on the third business day
preceding any applicable redemption date and is the sum of:
(1) the arithmetic mean of the yields under the heading "Week Ending"
published in the Statistical Release most recently published prior to the
date of determination under the caption "Treasury Constant Maturities" for
the maturity (rounded to the nearest month) corresponding to the remaining
life to maturity, as of the redemption date, of the principal being
redeemed; and
(2) 0.50%;
provided, however, that if no maturity set forth under such heading exactly
corresponds to the maturity of such principal, yields for the two published
maturities most closely corresponding to the maturity of such principal will be
calculated as provided immediately above, and the Adjusted Treasury Rate will be
interpolated or extrapolated from such yields on a straight-line basis, rounding
in each of the relevant periods to the nearest month.
"Affiliate" of any Person means any other Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such Person. For the purposes of this definition, "control" when used with
respect to any Person means the power to direct the management and policies of
such Person, directly or indirectly; whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Asset Disposition" by any Person means any transfer, conveyance, sale,
lease or other disposition by such Person or any of its Restricted Subsidiaries
(including a consolidation or merger or other sale of any such Restricted
Subsidiary with, into or to another Person in a transaction in which such
Restricted Subsidiary ceases to be a Restricted Subsidiary, but excluding a
disposition by a Subsidiary of such Person to such Person or a Wholly Owned
Restricted Subsidiary of such Person or by such Person to a Wholly Owned
Restricted Subsidiary of such Person) of:
(1) shares of Capital Stock (other than directors' qualifying shares)
or other ownership interests of a Subsidiary of such Person;
(2) substantially all of the assets of such Person or any of its
Subsidiaries representing a division or line of business; or
(3) other assets or rights of such Person or any of its Subsidiaries.
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Notwithstanding the preceding, the following items shall not be deemed to
be Asset Dispositions:
(1) any single transaction or series of related transactions that (a)
involves assets having a Fair Market Value of less than $15 million; or (b)
results in net proceeds to us or any of our respective Restricted
Subsidiaries of less than $15 million;
(2) a Restricted Payment that is permitted by the covenant described
above under the caption "-- Certain Covenants -- Limitation on Restricted
Payments";
(3) sales or other dispositions of inventory in the ordinary course of
business and of receivables;
(4) substantially simultaneous exchanges by us or any of our
Restricted Subsidiaries of Telecommunications Assets for other
Telecommunications Assets, provided that the Telecommunications Assets
received by us or our Restricted Subsidiary have at least substantially
equal or greater value to us or our Restricted Subsidiary (as determined by
the Board of Directors whose good faith determination shall be conclusive
and evidenced by a Board Resolution);
(5) any sale or other disposition of any or all the Capital Stock of
an Unrestricted Subsidiary; or
(6) any sale or other disposition of Temporary Cash Investments.
Additionally, the contribution of Telecommunications Assets to an Unrestricted
Subsidiary whereby an we or our Restricted Subsidiary receives Capital Stock of
an Unrestricted Subsidiary shall be deemed a Restricted Payment only and shall
not be deemed an Asset Disposition.
"Attributable Value" means, as to any particular lease under which any
Person is at the time liable other than a Capital Lease Obligation, and at any
date as of which the amount thereof is to be determined, the total net amount of
rent required to be paid by such Person under such lease during the initial term
thereof as determined in accordance with generally accepted account principles,
discounted from the last date of such initial term to the date of determination
at a rate per annum equal to the discount rate which would be applicable to a
Capital Lease Obligation with like term in accordance with generally accepted
accounting principles. The net amount of rent required to be paid under any such
lease for any such period shall be the aggregate amount of rent payable by the
lessee with respect to such period after excluding amounts required to be paid
on account of insurance, taxes, assessments, utility, operating and labor costs
and similar charges. In the case of any lease which is terminable by the lessee
upon the payment of penalty, such net amount shall also include the lesser of
the amount of such penalty (in which case no rent shall be considered as
required to be paid under such lease subsequent to the first date upon which it
may be so terminated) or the rent which would otherwise be required to be paid
if such lease is not so terminated. "Attributable Value" means, as to a Capital
Lease Obligation, the principal amount thereof.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of ours or one of our Subsidiaries, as the case may
be, to have been duly adopted by the Board of Directors, to be in full force and
effect on the date of such certification and delivered to the trustee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in New York City, the State of
Washington or the State of California are authorized or obligated by law or
executive order to close.
"Capital Lease Obligation" of any Person means the obligation to pay rent
or other payment amounts under a lease of (or other Indebtedness arrangements
conveying the right to use) real or
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personal property of such Person which is required to be classified and
accounted for as a capital lease or a liability on the face of a balance sheet
of such Person in accordance with generally accepted accounting principles (a
"Capital Lease"). The stated maturity of such obligation shall be the date of
the last payment of rent or any other amount due under such lease prior to the
first date upon which such lease may be terminated by the lessee without payment
of a penalty. The principal amount of such obligation shall be the capitalized
amount thereof that would appear on the face of a balance sheet of such Person
in accordance with generally accepted accounting principles.
"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.
"Change of Control" means
(1) directly or indirectly a sale, transfer or other conveyance of all
or substantially all our assets on a consolidated basis, to any "person" or
"group" (as such terms are used for purposes of Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
whether or not applicable), excluding transfers or conveyances to or among
us or our Wholly Owned Restricted Subsidiaries, as an entirety or
substantially as an entirety in one transaction or series of related
transactions, in each case with the effect that any Person or group of
Persons that, as of the date of the indentures, are not Initial Investors
or Affiliates of the Initial Investors own more than 50% of the total
Voting Power entitled to vote in the election of directors, managers or
trustees of the transferee entity immediately after such transaction;
(2) the adoption of a plan relating to our liquidation or dissolution;
(3) any "person" or "group" (as such terms are used for purposes of
Sections 13(d) and 14(d) of the Exchange Act, whether or not applicable),
other than the Initial Investors (or any Person or group of Persons that,
at the date of the indentures, are Affiliates of the Initial Investors), is
or becomes the "beneficial owner" (as that term is used in Rules 13d-3 and
13d-5 under the Exchange Act, whether or not applicable, except that a
Person shall be deemed to have "beneficial ownership" of all shares that
any such Person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of
more than 50% of our total Voting Power; or
(4) during any period of 24 consecutive months, individuals who at the
beginning of such period constituted our Board of Directors (together with
any new directors whose election by such Board or whose nomination for
election by the stockholders of the applicable Issuer was approved by a
vote of a majority of the directors then still in office who were either
directors at the beginning of such period or whose election or nomination
for election was previously so approved), cease for any reason to
constitute a majority of our Board of Directors then in office.
"Consolidated Income Tax Expense" of any Person means for any period the
provision for income taxes of such Person and its Consolidated Restricted
Subsidiaries for such period.
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"Consolidated Indebtedness" of any Person means at any date the
Indebtedness of such Person and its Consolidated Restricted Subsidiaries at such
date.
"Consolidated Interest Expense" of any Person means for any period the
interest expense included in an income statement (taking into account the effect
of any Interest Rate Agreements but without deduction of interest income) of
such Person and its Consolidated Restricted Subsidiaries for such period,
including without limitation or duplication (or, to the extent not so included,
with the addition of):
(1) the portion of any rental obligation in respect of any Capital
Lease Obligation allocable to interest expense in accordance with generally
accepted accounting principles;
(2) the amortization of Indebtedness discounts;
(3) any payments or fees with respect to letters of credit, bankers
acceptances or similar facilities;
(4) fees with respect to Interest Rate Agreements;
(5) the portion of any rental obligations in respect of any Sale and
Leaseback Transaction allocable to interest expense (determined as if such
were treated as a Capital Lease Obligation); and
(6) Preferred Stock dividends declared and payable in cash.
"Consolidated Net Income" of any Person means for any period the net income
(or loss) of such Person for such period determined on a consolidated basis in
accordance with generally accepted accounting principles; provided that there
shall be excluded therefrom (to the extent included and without duplication):
(1) the net income (or loss) of any Person acquired by such Person or
a Restricted Subsidiary of such Person after the date of the indenture in a
pooling-of interests transaction for any period prior to the date of such
transaction;
(2) the net income (or loss) of any Person that is not a Consolidated
Restricted Subsidiary of such Person except to the extent of the amount of
dividends or other distributions actually paid to such Person by such other
Person during such period;
(3) gains or losses from sales of assets other than sales of assets
acquired and held for resale in the ordinary course of business; and
(4) all extraordinary gains and extraordinary losses.
"Consolidated Restricted Subsidiary" of any Person means all other Persons
that would be accounted for as consolidated Persons in such Person's financial
statements in accordance with generally accepted accounting principles other
than Unrestricted Subsidiaries.
"Cumulative EBITDA" means our EBITDA and our Consolidated Restricted
Subsidiaries EBITDA for the period beginning on January 1, 2001 through and
including the end of the last fiscal quarter preceding the date of any proposed
Restricted Payment.
"Cumulative Interest Expense" means the total amount of Consolidated
Interest Expense of ours and our respective Consolidated Restricted Subsidiaries
for the period beginning on January 1, 2001 through and including the end of the
last fiscal quarter preceding the date of any proposed Restricted Payment.
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"Currency Protection Agreements" means any currency swap, cap, collar,
floor, caption or swaption agreements, or any similar arrangements designed to
hedge against a risk in the fluctuation of the exchange rate of a currency in
which a payment to be made or received by either Issuer or any of its Restricted
Subsidiaries is denominated, arising at any time between us or any of our
Restricted Subsidiaries, on the one hand, and any Person (other than an
Affiliate of ours or any of our Restricted Subsidiaries), on the other hand, as
such agreement or arrangement may be modified, supplemented and in effect from
time to time.
"Disqualified Stock" of any person means any Capital Stock of such Person
which, by its terms (or by the terms of any security into which it is
convertible of for which it is exchangeable), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the option of such Person, any
Restricted Subsidiary of such Person or the holder thereof, in whole or in part,
on or prior to the final Stated Maturity of the notes; provided, however, that
any Preferred Stock which would not constitute Disqualified Stock but for
provisions thereof giving holders thereof the right to require us to repurchase
or redeem such Preferred Stock upon the occurrence of a change of control
occurring prior to the final Stated Maturity of the notes shall not constitute
Disqualified Stock if the change of control provisions applicable to such
Preferred Stock specifically provide that we will not repurchase or redeem any
such stock pursuant to such provisions prior to our repurchase of such notes as
are required to be repurchased pursuant to the covenant described under
"-- Change of Control".
"EBITDA" of any Person means for any period the Consolidated Net Income for
such period increased by the sum of:
(1) Consolidated Interest Expense of such Person for such period, plus
(2) Consolidated Income Tax Expense of such Person for such period,
plus
(3) the consolidated depreciation and amortization expense included in
the income statement of such Person and its Consolidated Restricted
Subsidiaries, for such period, plus
(4) all other non-cash charges and expenses that were deducted in
determining Consolidated Net Income for such period,
minus all non-cash revenues and gains to the extent included in Consolidated Net
Income for such period.
"Eligible Institution" means a commercial banking institution that has
combined capital and surplus of not less than $500 million or its equivalent in
foreign currency, whose debt is rated "A-3" or higher, "A-" or higher or "A-" or
higher according to Moody's Investors Service, Inc., Standard & Poor's Ratings
Group or Duff & Phelps Credit Rating Co. (or such similar equivalent rating by
at least one "nationally recognized statistical rating organization" (as defined
in Rule 436 under the Securities Act) respectively, at the time as of which any
investment or rollover therein is made.
"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).
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"Fair Market Value" means, with respect to any assets or Person, the price
which could be negotiated in an arm's-length free market transaction, for cash,
between a willing seller and a willing buyer, neither of whom is under undue
pressure or compulsion to complete the transaction. Fair Market Value will be
determined:
(1) if such Person or assets has a Fair Market Value of less than $5
million, by our officer and evidenced by an Officers' Certificate, dated
within 30 days of the relevant transaction; or
(2) if such Person or assets has a Fair Market Value in excess of $5
million or more, by a majority of our Board of Directors and evidenced by a
Board Resolution, dated within 30 days of the relevant transaction.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which obligations
or guarantee the full faith and credit of the United States is pledged and which
have a remaining weighted average life to maturity of not more than one year
from the date of Investment therein.
"Gradation" means a gradation within a Rating Category or a change to
another Rating Category, which shall include:
(1) "+" and "-" in the case of S&P's current Rating Categories (e.g.,
a decline from BB+ to BB would constitute a decrease of one gradation);
(2) 1, 2 and 3 in the case of Moody's current Rating Categories (e.g.,
a decline from Ba1 to Ba2 would constitute a decrease of one gradation); or
(3) the equivalent in respect of successor Rating Categories of S&P or
Moody's or Rating Categories used by Rating Agencies other that S&P or
Moody's.
"Guarantee" by any Person mean any obligation, contingent or otherwise, of
such Person guaranteeing any Indebtedness of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, and including any
obligation of such Person (1) to purchase or pay (or advance or supply funds for
the purchase or payment of) such Indebtedness; (2) to purchase property,
securities or services for the purpose of assuring the holder of such
Indebtedness of the payment of such Indebtedness; or (3) to maintain working
capital, equity capital or other financial statement condition or liquidity of
the primary obligor so as to enable the primary obligor to pay such
Indebtedness; provided, however, that the Guarantee by any Person shall not
include endorsements by such Person for collection or deposit, in either case,
in the ordinary course of business.
"Holder" means a Person in whose name a note is registered in the Security
Register.
"Indebtedness" means (without duplication), with respect to any Person,
whether recourse is to all or a portion of the assets of such Person and whether
or not contingent:
(1) every obligation of such Person for money borrowed;
(2) every obligation of such Person evidenced by bonds, debentures,
notes or similar Instruments;
(3) every reimbursement obligation of such Person with respect to
letters of credit, bankers' acceptances or similar facilities issued for
the account of such Person;
(4) every obligation of such Person issued or assumed as the deferred
purchase price of property or services (but excluding trade accounts
payable or accrued liabilities arising in the ordinary course of business);
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(5) every Capital Lease Obligation of such Person;
(6) the maximum fixed redemption or repurchase price of Redeemable
Stock of such Person at the time of determination;
(7) every obligation to pay rent or other payment amounts of such
Person with respect to any Sale and Leaseback Transaction to which such
Person is a party; and
(8) every obligation of the type referred to in clauses (1) through
(7) of another Person and all dividends of another Person the payment of
which, in either case, such Person has guaranteed or is responsible or
liable, directly or indirectly, as obligor, guarantor or otherwise.
The amount of any Indebtedness outstanding as of any date shall be:
(1) the accreted value thereof, in the case of any Indebtedness that
does not require current payments of interest; 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.
"Indebtedness to EBITDA Ratio" of any Person means at any date the ratio of
Consolidated Indebtedness outstanding on such date to the product calculated by
multiplying the aggregate EBITDA for the first full fiscal quarter immediately
preceding such date by four; provided, however, that, in the event such person
or any of its Restricted Subsidiaries has acquired a Person during or after such
period in a pooling-of-interests transaction, such computation shall be made on
a pro forma basis as if the transaction had taken place on the first day of such
period.
"Investment Grade" means a rating of at least BBB-, in the case of S&P, or
Baa3, in the case of Moody's.
"Initial Investors" means the Hutchison Telecommunications PCS (USA)
Limited and our shareholders that are affiliated with it, John W. Stanton and
shareholders that are affiliated with him and Providence Media Partners.
"Interest Rate Agreements" means any interest rate swap, cap, collar,
floor, caption or swaption agreements, or any similar arrangements designed to
hedge the risk of variable interest rate volatility or to reduce interest costs,
arising at any time between us or any of our Restricted Subsidiaries, on the one
hand, and any Person (other than an Affiliate of ours or any of our Restricted
Subsidiaries), on the other hand, as such agreement or arrangement may be
modified, supplemented and in effect from time to time.
"Investment" by any Person means any direct or indirect loan, advance or
other extension of credit or 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) to, or purchase or acquisition of Capital Stock,
bonds, notes, debentures or other securities or evidence of Indebtedness issued
by, any other Person, including any payment on a guarantee of any obligation of
such other Person, but shall not include trade accounts receivable in the
ordinary course of business on credit terms made generally available to the
customers of such Person.
"Lien" means, with respect to any property or assets, any mortgage or deed
of trust, pledge, hypothecation, assignment, deposit arrangement, security
interest, lien, charge, easement (other than an easement not materially
impairing usefulness or marketability), encumbrance, preference, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever on or with respect to such property or assets (including, without
limitation, any conditional sale or other title retention agreement having
substantially the same economic effect as any of the foregoing).
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"Moody's" means Moody's Investors Service, Inc. or, if Moody's Investors
Service, Inc. shall cease rating debt securities having a maturity at original
issuance of at lest one year and such ratings business shall have been
transferred to a successor Person, such successor Person; provided, however,
that if Moody's Investors Service, Inc. ceases rating debt securities having a
maturity at original issuance of at least one year and its rating business with
respect thereto shall not have been transferred to any successor Person, then
"Moody's" shall mean any other national recognized rating agency (other than
S&P) that rates debt securities having a maturity at original issuance of at
least one year and that shall have been designated by us, by a written notice
given to the trustee.
"Net Available Proceeds" means the aggregate amount of cash (including any
other consideration that is converted into cash) received by us or any of our
Restricted Subsidiaries in respect of an Asset Disposition, less the sum of:
(1) all fees, commissions and other expenses incurred in connection
with such Asset Disposition, including the amount of income taxes required
to be paid by us or any of our Restricted Subsidiaries in connection
therewith; and
(2) the aggregate amount of cash so received which is used to retire
any existing Indebtedness of us or any of our Restricted Subsidiaries which
is required to be repaid in connection therewith.
"Net Cash Proceeds" from the sale of Equity Interests means the aggregate
amount of cash (including any other consideration that is converted into cash)
received by us or any of our Restricted Subsidiaries in respect of such sale of
Equity Interests, less the sum of:
(1) all fees, commissions and other expenses incurred in connection
with such sale of Equity Interests, including the amount of income taxes
required to be paid by us or any of our Restricted Subsidiaries in
connection therewith; and
(2) the aggregate amount of cash so received which is used to retire
any existing Indebtedness of ours or any of our Restricted Subsidiaries
which is required to be repaid in connection therewith.
"Non-Recourse Debt" means Indebtedness:
(1) as to which neither us nor any of our Restricted Subsidiaries;
(a) provides credit support of any kind (including any undertaking,
agreement or instrument that would constitute Indebtedness);
(b) is directly or indirectly liable (as a guarantor or otherwise);
or
(c) constitutes the lender;
(2) no default with respect to which (including any rights that the
holders thereof may have to take enforcement action against an Unrestricted
Subsidiary of ours) would permit (upon notice, lapse of time or both) any
holder of any other Indebtedness of ours or any of our Restricted
Subsidiaries to declare a default on such other Indebtedness or cause the
payment thereof to be accelerated or payable prior to its stated maturity;
and
(3) as to which the lenders have been notified in writing that they
will not have any recourse to the stock or assets of ours or any of our
Restricted Subsidiaries.
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"Offer to Purchase" means a written offer (the "Offer") sent by us to each
holder at his address appearing in the Security Register on the date of the
Offer offering to purchase up to the principal amount of notes specified in such
Offer at the purchase price specified in such Offer.
"Officers' Certificate" means a certificate signed by two officers at least
one of whom shall be our Principal Executive Officer, Principal Accounting
Officer or Principal Financial Officer and delivered to the trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be our
Counsel, and who shall be reasonably acceptable to the trustee and delivered to
the trustee.
"Permitted Investments" include:
(1) Investments in us or our Restricted Subsidiaries;
(2) Investments in a Person such that the Person will become a
Restricted Subsidiary after giving effect to the Investment or purchases of
additional Equity Interests of a Restricted Subsidiary or of a Person who
becomes a Restricted Subsidiary as a result of any such purchase;
(3) a Temporary Cash Investment;
(4) stock, obligations or other consideration received in satisfaction
of judgments;
(5) an Investment in any Person to the extent such Investment
represents the non-cash portion of the consideration received for an Asset
Disposition as permitted by the provision of the indentures described under
"-- Asset Dispositions";
(6) Investments (including acquisitions of other Telecommunications
Businesses) not to exceed two times the Net Cash Proceeds from the sale of
Equity Interests;
(7) Investments (including acquisitions of other Telecommunications
Businesses) made with Capital Stock;
(8) Restricted Equity Investments;
(9) Strategic Investments;
(10) customary loans or advances made in the ordinary course of
business to officers, directors or employees of ours or any of our
Restricted Subsidiaries for travel, entertainment and moving and other
relocation expenses; and
(11) any other Investments not to exceed $100 million in the
aggregate.
"Person" means any individual, corporation, partnership, joint venture,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Preferred Stock" means, with respect to any Person, Capital Stock of such
Person of any class or classes (however designated) that ranks prior, as to the
payment of dividends or as to the distribution of assets upon any voluntary or
involuntary liquidation, dissolution or winding up of such Person, to shares of
Capital Stock of any other class of such Person.
"Public Equity Offering" means an underwritten primary public offering of
Common Stock pursuant to an effective registration statement under the
Securities Act.
"Rating Agency" means (1) S&P and Moody's or (2) any other rating agencies
contemplated by the definitions of "S&P" and "Moody's".
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"Rating Category" means:
(1) with respect to S&P, any of the following categories (any of which
may include a "+" or "-"): AAA, AA, A, BBB, BB, B, CCC, CC, C and D (or
equivalent successor categories);
(2) with respect to Moody's, any of the following categories (any of
which may include a "1", "2" or "3"); Aaa, Aa, A, Baa, Ba, B, Caa, Ca, C
and D (or equivalent successor categories); and
(3) the equivalent of any such categories of S&P or Moody's used by
another Rating Agency, if applicable.
"Redeemable Stock" of any Person means any equity security of such Person
that by its terms or otherwise is required to be redeemed prior to the final
Stated Maturity of the notes or is redeemable at the option of the holder
thereof at any time prior to the final Stated Maturity of the notes.
"Related Person" of any Person means any other Person owning (a) 5% or more
of the outstanding Common Stock of such Person or (b) 5% or more of the Voting
Power of such Person.
"Restricted Entity" means, as applied to any Person, any corporation or
other entity:
(1) engaged in the acquisition, ownership, operation and management of
assets in the Telecommunications Business;
(2) over which such Person is responsible (either directly or through
a services agreement) for day-to-day operations or otherwise has a
technical services or comparable agreement that provides such Person with
such rights, duties and obligations as are substantially similar to those
rights, duties and obligations of ours under that certain Technical
Services Agreement dated July 30, 1996, as amended, with respect to Cook
Inlet Western Wireless PV/SS PCS, L.P.;
(3) of which more than 40% of the outstanding Capital Stock (other
than directors' qualifying shares) having ordinary voting power to elect
its board of directors, regardless of the existence at the time of a right
of the holders of any class or classes of securities of such corporation to
exercise such voting power by reason of the happening of any contingency,
in the case of a corporation, or more than 40% of the outstanding ownership
interests, in the case of an entity other than a corporation, is at the
time owned directly or indirectly by such Person, or by one or more
Subsidiaries of such Person, or by such Person and by one or more
Subsidiaries of such Person; and
(4) that is formed or the ownership in which is acquired pursuant to
an arms' length negotiation between such Person and the Restricted Entity
or the other investors in such Restricted Entity that satisfies the
requirements of the covenant described under "-- Limitation on Transactions
with Affiliates and Related Persons".
"Restricted Equity Investments" means:
(1) any payment on account of the purchase, redemption, retirement or
acquisition of (a) any shares of Capital Stock or other ownership interests
in a Restricted Entity or (b) any option, warrant or other right to acquire
shares of Capital Stock or ownership interests of a Restricted Entity; or
(2) any loan, advance, lease, capital contribution to, or Investment
in, or payment of a Guarantee of any obligation of a Restricted Entity.
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"Restricted Payment" means, with respect to any Person:
(1) any declaration or payment of a dividend or other distribution on
any shares of such Person's Capital Stock (other than (a) dividends payable
solely in shares of its Capital Stock or options, warrants or other rights
to acquire its Capital Stock, (b) any declaration or payment of a dividend
or other distribution by a Restricted Subsidiary to such Person or another
Restricted Subsidiary or (c) any declaration or payment of a dividend or
other distribution by a Restricted Subsidiary to any other shareholder of
such Restricted Subsidiary, so long as such Person or its Restricted
Subsidiaries receive their pro rata share of such dividends or
distributions);
(2) any payment on account of the purchase, redemption, retirement or
acquisition of (a) any shares of Capital Stock of such Person or any
Related Person (other than a Restricted Subsidiary) of such Person or (b)
any option, warrant or other right to acquire shares of Capital Stock of
such Person or any Related Person (other than a Restricted Subsidiary) of
such Person, in each case other than pursuant to the cashless exercise of
options;
(3) any Investment other than a Permitted Investment; and
(4) any redemption, defeasance, repurchase or other acquisition or
retirement for value prior to any scheduled maturity, repayment or sinking
fund payment, of any Indebtedness of such Person which is subordinate in
right of payment to the notes.
"Restricted Subsidiary" of any Person means any Subsidiary of such Person
other than an Unrestricted Subsidiary.
"Sale and Leaseback Transaction" of any Person means an arrangement with
any lender or investor or to which such lender or investor is a party providing
for the leasing by such Person of any property or asset of such Person which has
been or is being sold or transferred by such Person more than 270 days after the
acquisition thereof or the completion of construction or commencement of
operation thereof to such lender or investor or to any Person to whom funds have
been or are to be advanced by such lender or investor on the security of such
property or asset. The stated maturity of such arrangement shall be the date of
the last payment of rent or any other amount due under such arrangement prior to
the first date on which such arrangement may be terminated by the lessee without
payment of a penalty.
"S&P" means Standard & Poor's Rating Services or, if Standard & Poor's
Rating Services shall cease rating debt securities having a maturity at original
issuance of at least one year and such ratings business shall have been
transferred to a successor Person, such successor Person; provided, however,
that if S&P ceases rating debt securities having a maturity at original issuance
of at least one year and its rating business with respect thereto shall not have
been transferred to any successor Person, then "S&P" shall mean any other
national recognized rating agency (other than S&P) that rates debt securities
having a maturity at original issuance of at least one year and that shall have
been designated by us, by a written notice given to the Trustee.
"Stated Maturity," when used with respect to any note means the date
specified in such note as the date on which the principal of such note is due
and payable.
"Statistical Release" means the statistical release designated "H.15(519)"
or any successor publication which is published weekly by the Federal Reserve
System and which establishes yields on actively-traded United States government
securities adjusted to constant maturities, or, if such statistical release is
not published at the time of any determination under the terms of the Senior
Discount Notes, such other reasonably comparable index which will be designated
by us.
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"Strategic Equity Infusion" means an equity investment in us made by a
Strategic Investor in an aggregate amount of not less than $250 million.
"Strategic Investment" means an Investment in one or more Persons engaged
in a Telecommunications Business, provided that the aggregate amount of all such
Investments does not exceed (1) $100 million or (2), provided that after giving
effect to such Strategic Investment we would comply with the first paragraph of
the covenant described under "-- Certain Covenants -- Limitations on
Consolidated Indebtedness", $175 million.
"Strategic Investor" means a corporation, partnership or other entity
engaged in one or more Telecommunications Businesses that has, or 80% or more of
the voting stock of which is owned by a Person that has, an equity market
capitalization, at the time of its initial Investment in us, in excess of $1
billion.
"Subsidiary" means, as applied to any Person:
(1) any corporation of which more than fifty percent (50%) of the
outstanding Capital Stock (other than directors' qualifying shares) having
ordinary Voting Power to elect its board of directors, regardless of the
existence at the time of a right of the holders of any class or classes of
securities of such corporation to exercise such Voting Power by reason of
the happening of any contingency, or any entity other than a corporation of
which more than fifty percent (50%) of the outstanding ownership interests,
is at the time owned directly or indirectly by such Person, or by one or
more Subsidiaries of such Person, or by such Person and one or more
Subsidiaries of such Person; or
(2) any other entity which is directly or indirectly controlled or
capable of being controlled by such Person, or by one or more Subsidiaries
of such Person, or by such Person and one or more Subsidiaries of such
Person.
"Telecommunications Asset" means any asset of a Telecommunications
Business, including, without limitation, Equity Interests or joint venture,
partnership or membership interests of an entity engaged in the
Telecommunications Business.
"Telecommunications Business" means the business of:
(1) transmitting, or providing services relating to the transmission
of, voice, video or data through owned or leased wireline or wireless
transmission facilities;
(2) creating, developing, acquiring, constructing, installing,
repairing, maintaining or marketing communications-related systems, network
equipment and facilities, software and other products; or
(3) evaluating, owning, operating, participating in or pursuing any
other business that is primarily related to those identified in clause (1)
or (2) above (in the case of this clause (3), however, in a manner
consistent with ours and Aerial's manner of business on the date of the
indentures), and shall, in any event, include all businesses in which we or
Aerial or any of our Subsidiaries was engaged on the date of the indentures
or has entered into agreements to engage in or to acquire a company to
engage in or contemplate engaging in, as expressly set forth in our Form
10/A filed with the Commission on April 13, 1999 or our Form 10-Q for the
quarter ended June 30, 1999 or our current reports on Form 8-K filed prior
to October 15, 1999 (or not required to be disclosed therein pursuant to
the rules and regulations of the Commission) and Aerial's Form 10-K for the
fiscal year ended December 31, 1998 and Forms 10-Q and 8-K filed during
calendar year 1999 prior to November 4, 1999 (or not required to be
disclosed therein pursuant to the rules and regulations of the Commission);
provided that the determination of
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what constitutes a Telecommunications Business shall be made in good faith
by our board of directors.
"Telecommunications Indebtedness" means Indebtedness (including Acquired
Indebtedness) of ours or any of our Restricted Subsidiaries that is incurred for
the (1) development, construction, acquisition, operations or improvement by us
or any of our Restricted Subsidiaries of Telecommunications Assets (including
any Indebtedness assumed in connection with an acquisition of Telecommunications
Assets) or (2) acquisition of Equity Interests of a Person engaged in a
Telecommunications Business; provided that with respect to clause (1) the net
proceeds of such Telecommunications Indebtedness do not exceed 100% of the cost
of construction, development, acquisition, operations or improvement of the
applicable Telecommunications Assets.
"Temporary Cash Investment" means:
(1) Government Securities;
(2) any time deposit account, money market deposit and certificate of
deposit maturing not more than 270 days after the date of acquisition
issued by, or time deposit of, an Eligible Institution;
(3) commercial paper maturing not more than 270 days after the date of
acquisition issued by a corporation (other than an Affiliate of either
Issuer) with a rating, at the time as of which any investment therein is
made, of "P-1" or higher according to Moody's Investors Service, Inc.,
"A-1" or higher according to Standard & Poor's Ratings Group or "A-1" or
higher according to Duff & Phelps Credit Rating Co. (or such similar
equivalent rating by at least one "nationally recognized statistical rating
organization" (as defined in Rule 436 under the Securities Act));
(4) any banker's acceptances or money market deposit accounts issued
or offered by an Eligible Institution;
(5) repurchase obligations with a term of not more than 7 days for
Government Securities entered into with an Eligible Institution; and
(6) any fund investing exclusively in investments of the types
described in clauses (1) through (5) above.
"Unrestricted Subsidiary" of any Person means (1) any Subsidiary of such
Person that at the time of determination shall be designated an Unrestricted
Subsidiary by the Board of Directors of such Person in the manner provided
below, and (2) any Subsidiary of an Unrestricted Subsidiary. The Board of
Directors of any Person may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary unless such Subsidiary owns any Common Stock or
Preferred Stock of, or owns or holds any lien on any property of, such Person or
any Restricted Subsidiary; provided that either (a) the Subsidiary to be so
designated has total assets of $1,000 or less or (b) if such Subsidiary has
assets greater than $1,000, that the Fair Market Value of the Subsidiary at the
time of such designation would be permitted as an Investment under the provision
of the indenture described under "-- Limitation on Restricted Payments". The
Board of Directors of any Person may designate any Unrestricted Subsidiary to be
a Restricted Subsidiary of such Person; provided that immediately after giving
effect to such designation (x) such Person would be permitted to incur $1.00 of
additional Indebtedness pursuant to the provision of the indenture described in
the first paragraph under "Limitation on Consolidated Indebtedness" and (y) no
Event of Default or event which with notice or lapse of time or both would
become an Event of Default has occurred and is continuing. Any such designation
by the Board of Directors shall be evidenced by a Board Resolution submitted to
the trustee.
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"Voting Power" of any Person means the aggregate number of votes of all
classes of Capital Stock of such Person which ordinarily has voting power for
the election of directors of such Person.
"Wholly Owned Restricted Subsidiary" of any Person means a Restricted
Subsidiary of such Person all of the outstanding Capital Stock or other
ownership interests of which (other than directors' qualifying shares) shall at
the time be owned by such Person or by one or more Wholly Owned Restricted
Subsidiaries of such Person or by such Person and one or more Wholly Owned
Restricted Subsidiaries of such Person.
MODIFICATION AND WAIVER
Modifications and amendments of either indenture may be made by us and the
trustee with the consent of the holders of a majority in aggregate principal
amount of outstanding notes; provided, however, that no such modification or
amendment may, without the consent of the holder of each note affected thereby:
(1) change the Stated Maturity of the principal of, or any installment
of interest on, any note;
(2) reduce the principal amount of or premium, if any, or interest on
any note;
(3) change the place or currency of payment of principal of, or
premium or interest on any note;
(4) impair the right to institute suit for the enforcement of any
payment on or with respect to any note;
(5) reduce the percentage of aggregate principal amount of notes
outstanding necessary to amend the applicable indenture;
(6) reduce the percentage of aggregate principal amount of notes
outstanding necessary for waiver of compliance with certain provisions of
the indenture or for waiver of certain defaults;
(7) modify such provisions with respect to modification and waiver; or
(8) following the mailing of an Offer to Purchase, modify the
provisions of the applicable indenture with respect to such Offer to
Purchase in a manner adverse to such holder.
The holders of a majority in aggregate principal amount of the outstanding
notes of either series may waive compliance by the Issuers with certain
restrictive provisions of the applicable indenture. The holders of a majority in
aggregate principal amount of the outstanding notes of either series may waive
any past default under the applicable indenture, except a default in the payment
of principal, premium or interest and certain covenants and provisions of such
indenture which cannot be amended without the consent of the holder of each
outstanding note affected.
DEFEASANCE
At our option, (1) if applicable, we will be discharged from any and all
obligations in respect of the outstanding notes or (2) if applicable, we may
omit to comply with certain restrictive covenants, and that such omission will
not be deemed to be an Event of Default under the indentures and the notes. In
order to exercise either option, we must first irrevocably deposit with the
trustee, in trust, money and/or U.S. government obligations which will provide
money in an amount sufficient in the opinion of a nationally recognized firm of
independent certified public accountants to pay the principal and premium, if
any, and each installment of interest, if any, on the outstanding notes on
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the Stated Maturity. In addition, if we elect to have certain restrictive
covenants discharged under (2) above, the obligations under the indentures other
than with respect to such covenants and the Events of Default other than the
Events of Default relating to such covenants above shall remain in full force
and effect.
The trust referred to above only be established if, among other things:
(1) (a) in the event of a discharge under (1) of the immediately
preceding paragraph, we have received from, or there has been published by,
the Internal Revenue Service a ruling or there has been a change in law
after the Issue Date, which in the Opinion of Counsel provides that holders
of the notes will not recognize gain or loss for Federal income tax
purposes as a result of such deposit, defeasance and discharge has not
occurred; or (b) in the event of a discharge under (2) of the immediately
preceding paragraph, we have delivered to the trustee an Opinion of Counsel
to the effect that the holders of the notes will not recognize gain or loss
for Federal income tax purposes as a result of such deposit and 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 deposit
and defeasance had not occurred;
(2) no Default or Event of Default has occurred or is continuing;
(3) we have delivered to the trustee an Opinion of Counsel to the
effect that such deposit shall not cause the trustee or the trust so
created to be subject to the Investment Company Act of 1940, as amended;
and
(4) certain other customary conditions precedent are satisfied.
NOTICES
Notices to holders of notes will be given by mail to the addresses of such
holders as they may appear in the Security Register.
TITLE
We, the trustee and any agent of the trustee may treat the Person in whose
name a note is registered as the absolute owner thereof (whether or not such
note may be overdue) for the purpose of making payment and for all other
purposes.
GOVERNING LAW
The indenture and the notes will be governed by and construed in accordance
with the laws of the State of New York.
THE TRUSTEE
The indenture provides that, subject to the duty of the trustee during an
Event of Default to act with the required standard of care, the trustee will be
under no obligation to exercise any of its rights or powers under the indenture
at the request or direction of any of the note holders, unless such holders
shall have offered to the trustee reasonable security or indemnity. Subject to
certain provisions, including those requiring security or indemnification of the
trustee, the holders of a majority in principal amount of the notes will have
the right to direct the time, method and place of conducting any proceeding for
any remedy available to the trustee, or exercising any trust or power conferred
on the trustee, in each case with respect to such series.
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We will be required to furnish to the trustee annually a statement as to
the performance by us of our obligations under the indenture and as to any
default in such performance.
BOOK-ENTRY; DELIVERY AND FORM
Our new notes will be represented by one or more permanent global notes in
definitive, fully registered form without interest coupons (each a "Global
Note") and will be deposited with the Trustee as custodian for, and registered
in the name of a nominee of, DTC. Ownership of beneficial interests in a Global
Exchange Note will be limited to participants that have accounts with DTC or
persons who hold interests through participants. Ownership of beneficial
interests in a Global Note will be shown on, and the transfer of that ownership
will be effected only through, records maintained by DTC or its nominee (with
respect to interests of participants) and the records of participants (with
respect to interests of persons other than participants). Beneficial owners may
hold their interests in a Restricted Global Note directly through DTC if they
are participants in such system, or indirectly through organization which are
participants in such system.
So long as DTC, or its nominee, is the registered owner or holder of a
Global Note, DTC or such nominee, as the case may be, will be considered the
sole owner or holder of our new notes represented by such Global Note for all
purposes under our new notes and the Indenture related thereto. No beneficial
owner of an interest in a Global Note will be able to transfer that interest
except in accordance with DTC's applicable procedures, in addition to those
provided for under the indenture.
Payments of the principal of, and interest on, a Global Note will be made
to DTC or its nominee, as the case may be, as the registered owner thereof.
Neither we, the trustee nor any paying agent will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests in a Global Note or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
We expect that DTC or its nominee, upon receipt of any payment of principal
or interest in respect of a Global Note, will credit participant's accounts with
payments in amounts proportionate to their respective beneficial interests in
the principal amount of such Global Note as shown on the records of DTC or its
nominee. We also expect that payments by participants to owners of beneficial
interests in such Global Note held through such participants will be governed by
standing instructions and customary practices, as is now the case with
securities held for the accounts of customers registered in the names of
nominees for such customers. Such payments will be the responsibility of such
participants.
Transfers between participants in DTC will be effected in the ordinary way
in accordance with DTC rules and will be settled in same-day funds.
We expect that DTC will take any action permitted to be taken by a holder
of our notes (including the presentation of notes for exchange as described
below) only at the direction of one or more participants to whose account the
DTC interests in a Global Note is credited and only in respect of such portion
of the aggregate principal amount of notes as to which such participant or
participant's has or have given such direction. However, if there is an Event of
Default under the notes, DTC will exchange the applicable Global Note for
Certificated Notes, which it will distribute to its participants.
We understand that: DTC is a limited purpose trust company organized under
the laws of the State of New York, a "banking organization" within the meaning
of New York Banking Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the Uniform
51
<PAGE> 55
Commercial Code and a "Clearing Agency" registered pursuant to the provisions of
Section 17A of the Exchange Act. DTC was created to hold securities for its
participants and facilitate the clearance and settlement of securities
transactions between participants through electronic book-entry changes in
accounts of its participants, thereby eliminating the need for physical movement
of certificates and certain other organizations. Indirect access to the DTC
system is available to others such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a
participant, either directly or indirectly ("indirect participants").
Although DTC is expected to follow the foregoing procedures in order to
facilitate transfers of interests in a Global Note among participants of DTC, it
is under no obligation to perform or continue to perform such procedures, and
such procedures may be discontinued at any time. Neither the Company nor the
Trustee will have any responsibility for the performance by DTC or its
respective participants or indirect participants of its obligations under the
rules and procedures governing its operations.
If DTC at any time unwilling or unable to continue as a depositary for the
Global Notes and successor depositary is not appointed by the Company within 90
days, the Company will issue Certificated Notes.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following discussion summarizes certain United States federal income
tax consequences resulting from the exchange of our notes for Omnipoint's
outstanding notes. It is provided for general informational purposes only. It is
based on the Internal Revenue Code of 1986 (the "Code"), as amended, Treasury
Regulations promulgated thereunder, Internal Revenue Service rulings, and
judicial decisions, all as in effect on the date hereof, and all of which are
subject to change, possibly with retroactive effect. The discussion does not
address all of the U.S. federal income tax consequences that may be relevant to
an Omnipoint noteholder in light of the holder's particular tax situation, nor
does it address any aspect of state, local or foreign taxation. The tax
treatment of a holder may vary depending upon its particular circumstances, and
the discussion does not apply to certain holders (including insurance companies,
tax-exempt organizations, financial institutions, and broker-dealers) that are
members of a class of holders subject to special rules under the Code. The
discussion assumes that the outstanding Omnipoint notes are held as "capital
assets" within the meaning of section 1221 of the Code.
EACH HOLDER IS URGED TO CONSULT ITS OWN TAX ADVISOR REGARDING THE TAX
CONSEQUENCES TO IT OF TENDERING OR FAILING TO TENDER OMNIPOINT'S NOTES,
INCLUDING THE APPLICATION AND EFFECT OF ANY STATE, LOCAL, FOREIGN OR OTHER TAX
LAW.
U.S. FEDERAL INCOME TAXATION OF U.S. HOLDERS
The discussion under this heading, "U.S. Federal Income Taxation of U.S.
Holders," assumes that each holder of Omnipoint notes is a U.S. holder, meaning
a holder of notes that is, for U.S. federal income tax purposes, (i) a citizen
or resident of the United States, (ii) a corporation created or organized in or
under the laws of the United States or any political subdivision thereof, (iii)
an estate the income of which is subject to U.S. federal income taxation
regardless of its source, or (iv) a trust if a court within the United States is
able to exercise primary supervision over the administration of the trust and
one or more U.S. persons have the authority to control all substantial decisions
of the trust.
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<PAGE> 56
TAX CONSEQUENCES OF THE OFFER TO U.S. HOLDERS
Exchange of Outstanding Omnipoint Notes for our Notes. The exchange of an
outstanding Omnipoint note for our new note plus cash equal to the accrued and
unpaid interest on the Omnipoint note will constitute a taxable exchange. As a
result, the U.S. holder will recognize ordinary interest income in an amount
equal to the accrued but unpaid interest on the holder's outstanding Omnipoint
note that has not previously been recognized. In addition, the U.S. holder will
recognize gain or loss equal to the difference between (i) its tax basis in its
outstanding Omnipoint note (less any basis attributable to accrued but unpaid
interest), and (ii) the issue price of our note. The issue price of our notes
should equal their fair market value on the date of the exchange (assuming that
they are "publicly traded" as defined in the applicable Treasury Regulations).
Any gain or loss recognized generally would be capital gain or loss, and would
be long-term if the U.S. holder has held the outstanding Omnipoint note for more
than one year at the time of the exchange. However, a U.S. holder who purchased
its outstanding Omnipoint note for less than its principal amount may recognize
ordinary income rather than capital gain under the "market discount" rules
discussed under the heading "Market Discount" below.
The U.S. holder's tax basis in our note should equal the issue price of the
note, as set forth in the preceding paragraph, and the U.S. holder will have a
new holding period for such note beginning on the day after the exchange.
Market Discount. An Omnipoint noteholder that is subject to gain
recognition under any of the rules discussed above and that purchased the
Omnipoint notes for less than their principal amount may recognize ordinary
income rather than capital gain under the market discount rules. Under these
rules, unless the U.S. holder has made an election to include market discount in
income as it accrues, any gain recognized by the U.S. holder will be treated as
ordinary income to the extent of any market discount that has accrued for the
period the Omnipoint notes have been owned. Market discount generally equals the
excess, if any, of (i) the unpaid principal balance of the note at the time it
is acquired by the U.S. holder, over (ii) the U.S. holder's tax basis in the
note immediately after its acquisition (subject to a de minimis exception
pursuant to which market discount is considered to be zero if it is less than
0.25 percent of the unpaid principal balance of the note multiplied by the
number of complete years to maturity from the date of acquisition). In general,
market discount is treated as accruing over the term of the note on a
straight-line basis unless the U.S. holder elects to accrue on a constant-yield
basis. If the gain recognized by a U.S. holder is in excess of the accrued
market discount, such excess will generally be treated as capital gain.
TAX CONSEQUENCES FOR A U.S. HOLDER OF HOLDING OUR NOTES
Payment of Interest on Our Notes. Interest paid or payable on our notes
generally will be taxable to a U.S. holder as ordinary interest income, at the
time it is received or accrued, in accordance with the holder's regular method
of accounting for U.S. federal income tax purposes. A portion of the first
interest payment on the notes equal to the amount that the Omnipoint noteholder
pays us in respect of accrued but unpaid interest on our notes at the time of
their issuance should be excludable from the U.S. holder's income.
Possible Original Issue Discount on Our Notes. Our notes generally will be
treated as having been issued with original issue discount ("OID") if their
principal amount is greater than their issue price. Under a de minimis rule, if
OID as so calculated is less than .25% of the stated redemption price at
maturity multiplied by the number of complete years to maturity of the note, the
note will not be treated as issued with OID.
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<PAGE> 57
We intend to treat our notes issued in exchange for Omnipoint's notes as
part of the same issue as our identical notes that were issued on November 9,
1999 (the "Earlier Notes") if the trading price of the Earlier Notes on the day
of the exchange is equal to or in excess of their principal amount. See
Treatment of Our Notes as Part of the Same Issue with the Earlier Notes, below.
If our notes are treated as part of the same issue with the Earlier Notes, they
should not be treated as issued with OID. If our notes are not part of the same
issue with our Earlier Notes, the issue price of our Notes should be their fair
market value on the date of the exchange (assuming they are "publicly traded" as
defined in the applicable Treasury Regulations) and, as a result they may be
issued with OID. Any amount of OID on the notes must be accrued over the term of
the notes using a constant-yield method. As a result, a U.S. holder may have to
include OID in income before the cash attributable to such income is received.
Sale, Exchange or Retirement of Our Notes. Upon the sale, exchange,
redemption, retirement at maturity or other disposition of our note, a U.S.
holder generally will recognize taxable gain or loss equal to the difference
between the sum of the cash plus the fair market value of all other property
received (other than any amount that is attributable to accrued but unpaid
interest, which will be treated as ordinary interest income) and the U.S.
holder's tax basis in the note (less any basis attributable to accrued but
unpaid interest). A U.S. holder's tax basis in a note received pursuant for the
offer generally will be as described above, adjusted to include previous
inclusions of OID with respect to the note, if any.
Gain or loss recognized on the disposition of our new registered note
generally will be capital gain or loss and will be long-term capital gain or
loss if, at the time of such disposition, the U.S. holder has held the note for
more than one year. However, a U.S. holder who purchased our note for less than
its principal amount may recognize ordinary income rather than capital gain
under the "market discount" rules discussed above under the heading "Market
Discount."
Treatment of Our Notes as Part of the Same Issue with the Earlier
Notes. Our new notes have credit and payment terms that are identical to the
credit and payment terms of the Earlier Notes. As discussed further below, if
the trading price of the Earlier Notes on the day of the exchange is equal to or
in excess of their principal amount, we intend to treat our notes as part of the
same issue with the Earlier Notes.
Under current Treasury Regulations, two or more debt instruments are part
of the same issue if they have the same credit and payment terms and are sold
reasonably close in time and pursuant to a common plan. At the time the Earlier
Notes were issued, we stated that we intended to offer holders of Omnipoint's
notes the right to exchange their notes for additional Earlier Notes or other
debt securities. Thus, although the issue is not free from doubt, we believe
that our new notes should be viewed as sold pursuant to a common plan with the
Earlier Notes and sold reasonably close in time to the Earlier Notes.
The Treasury Department has proposed regulations that generally would
require that two or more debt instruments be issued within a 13-day period in
order to be considered part of the same issue. This will not be the case for our
new notes and the Earlier Notes. The proposed regulations are proposed to become
effective prospectively, following their issuance in final form.
The Treasury Department also has proposed regulations that would allow debt
instruments issued in a "qualified reopening" to be treated as part of the same
issue with earlier-issued debt instruments. Under these proposed regulations, in
order to be part of a qualified reopening, the later-issued debt instruments
must be publicly traded (as defined in relevant Treasury Regulations) and must
(1) have terms that are identical to the earlier-issued debt instruments, (2) be
issued not more than six months after the issue date of the earlier-issued debt
instruments, and (3) not be issued with more
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<PAGE> 58
than de minimis OID, or meet certain other yield tests. These proposed
regulations are also proposed to become effective prospectively, following their
issuance in final form.
Although the issue is not free from doubt, we intend to take the position
that our notes and the Earlier Notes are part of the same issue for federal
income tax purposes if the trading price of the Earlier Notes on the day of the
exchange is equal to or in excess of their principal amount. If the trading
price of the Earlier Notes on the day of the exchange is less than their
principal amount, our new notes may be treated as issued with OID, and we will
not treat our new notes as part of the same issue with the Earlier Notes. See
Possible Original Issue Discount on Our Notes, above. EACH HOLDER IS URGED TO
CONSULT ITS OWN TAX ADVISOR REGARDING WHETHER OUR NOTES AND THE EARLIER NOTES
WILL BE PART OF THE SAME ISSUE FOR FEDERAL INCOME TAX PURPOSES IN THE
CIRCUMSTANCES DESCRIBED ABOVE AND THE CONSEQUENCES OF THIS TREATMENT FOR OID AND
OTHER TAX PURPOSES.
U.S. FEDERAL INCOME TAXATION OF FOREIGN HOLDERS
The discussion under this heading, "U.S. Federal Income Taxation of Foreign
Holders," assumes that a holder of Omnipoint notes is a foreign holder, meaning
a holder of a note that is, for U.S. federal income tax purposes, (a) a
nonresident alien individual, (b) a corporation organized or created under
non-U.S. law, (c) an estate that is not taxable in the United States on its
worldwide income, or (d) a trust that either is not subject to primary
supervision over its administration by a U.S. court or not subject to the
control of a U.S. person with respect to all substantial decisions of the trust.
THIS DISCUSSION DOES NOT ADDRESS TAX CONSEQUENCES TO FOREIGN HOLDERS THAT
ARE SUBJECT TO U.S. FEDERAL INCOME TAXATION ON A NET BASIS ON INCOME OR GAIN
REALIZED WITH RESPECT TO A NOTE BECAUSE SUCH INCOME IS EFFECTIVELY CONNECTED
WITH THE CONDUCT OF A U.S. TRADE OR BUSINESS.
Sale or Exchange of Outstanding Omnipoint Notes Pursuant to the Exchange
Offer and Sale, Exchange or Retirement of our Notes. A foreign holder generally
will not be subject to U.S. federal income tax (and generally no tax will be
withheld) with respect to gain realized on the sale or exchange of the
outstanding Omnipoint notes pursuant to the offer, or on the sale, exchange,
redemption, retirement at maturity or other disposition of our note, unless (a)
the foreign holder is an individual who is present in the United States for a
period or periods aggregating 183 or more days in the taxable year of the
disposition and, generally, either has a "tax home" or an "office or other place
of business" in the United States, or (b) the foreign holder is subject to tax
pursuant to the provisions of U.S. federal income tax law applicable to certain
expatriates. In addition, generally no tax will be withheld from any amount
received by a foreign holder pursuant to the exchange offer that is attributable
to accrued but unpaid interest on the holder's outstanding Omnipoint notes if
the holder meets the conditions set forth below under the heading, "Payment of
Interest on Our Notes."
Payment of Interest on Our Notes. Subject to the discussion of backup
withholding below, if you are a foreign holder of our note, we and our paying
agents will not be required to deduct United States withholding tax from
payments of principal, premium, if any, and interest, including OID, on the
notes to you if, in the case of interest:
- you do not actually or constructively own 10% or more of the total
combined voting power of all classes of our stock entitled to vote,
- you are not a controlled foreign corporation that is related to us
through stock ownership, and
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<PAGE> 59
- you certify to us or a U.S. payor of interest on the notes, under
penalties of perjury, that you are not a beneficial owner of the notes
that is a U.S. holder and provide your name and address, or
- a non-U.S. securities clearing organization, bank or other financial
institution that holds customers' securities in the ordinary course of
its trade or business and holds the notes certifies to us or a U.S. payor
of interest on the notes under penalties of perjury that a similar
statement has been received from you by it or by a similar financial
institution between it and you and furnishes the payor with a copy
thereof.
Further, a note of ours held by an individual, who at death is not a
citizen or resident of the United States will not be includible in the
individual's gross estate for United States federal estate tax purposes if:
- the decedent did not actually or constructively own 10% or more of the
total combined voting power of all classes of our stock entitled to vote
at the time of death, and
- the income on the note would not have been effectively connected with a
United States trade or business of the decedent at the same time.
If you receive a payment after December 31, 2000, recently finalized
Treasury Regulations will apply. Under these regulations, after December 31,
2000, you may use an alternative method to satisfy the certification requirement
described above. Additionally, if you are a partner in a foreign partnership,
after December 31, 2000, you (in addition to the foreign partnership) must
provide the certification described above. The IRS will apply a look-through
rule in the case of tiered partnerships.
INFORMATION REPORTING AND BACKUP WITHHOLDING
U.S. HOLDERS
Information Reporting. Information statements will be provided to the IRS
and the U.S. holders whose Omnipoint notes are exchanged for our notes,
reporting the payment of the offer consideration (except with respect to holders
that are exempt from the information reporting rules, such as corporations and
tax-exempt organizations).
Backup Withholding and Substitute Form W-9. Under U.S. federal income tax
law, a backup withholding tax equal to 31% of the offer consideration will apply
if a U.S. holder who tenders notes is not exempt from backup withholding and (i)
fails to furnish such holder's taxpayer identification number ("TIN") (which,
for an individual, is his or her Social Security Number) to the Exchange Agent
in the manner required, (ii) furnishes an incorrect TIN and the payor is so
notified by the IRS, (iii) is notified by the IRS that such holder has failed to
report repayments of interest and dividends or (iv) in certain circumstances,
fails to certify, under penalties of perjury,that such holder has not been
notified by the IRS that such holder is subject to backup withholding. Backup
withholding is not an additional tax. Rather, any amounts withheld from a
payment to a holder under the backup withholding rules are allowed as a refund
or credit against such holder's U.S. federal income tax liability, provided that
the required information is furnished to the IRS.
FOREIGN HOLDERS
You are generally exempt from backup withholding and information reporting
with respect to any payments of principal, premium or interest, made by us and
our payors provided that you provide the certification described under the
heading, "U.S. Federal Income Taxation of Foreign Holders --
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<PAGE> 60
Payment of Interest on our Notes," and provided further that the payor does not
have actual knowledge that you are a U.S. holder. In this regard, you should
note the discussion above under the same heading with respect to the rules under
the final withholding regulations.
In general, payment of the proceeds from the sale or taxable exchange of
notes to or through a United States office of a broker is subject to both United
States backup withholding and information reporting, unless you are a foreign
holder and certify as to your non-U.S. status under penalties of perjury or
otherwise establish an exemption. Payments of the proceeds from the sale or
taxable exchange by a foreign holder of a note made to or through a foreign
office of a broker will not be subject to information reporting or backup
withholding. However, information reporting, but not backup withholding, may
apply to a payment made outside the United States of the proceeds of a sale or
taxable exchange of a note through an office outside the United States if the
broker is:
- a United States person,
- a controlled foreign corporation for United States tax purposes,
- a foreign person 50% or more of whose gross income is effectively
connected with a United States trade or business for a specified
three-year period, or
- with respect to payments made after December 31, 2000, a foreign
partnership, if at any time during its tax year:
- one or more of its partners are "U.S. persons" (as defined in U.S.
Treasury regulations) who in the aggregate own more than 50% of the
income or capital interest in the partnership, or
- such foreign partnership is engaged in a United States trade or
business,
unless the broker has documentary evidence in its records that you are a
non-U.S. person and does not have actual knowledge that you are a U.S. person,
or you otherwise establish an exemption.
PLAN OF DISTRIBUTION
Notes received by 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 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 broker-dealer and/or the
purchasers of any such notes. Any broker-dealer that resells notes that were
received by it for its own account pursuant to the exchange offer and any broker
or dealer that participates in a distribution of such notes may be deemed to be
an "underwriter" within the meaning of the Securities Act and any profit on any
such resale of notes and any commissions or concessions received by any such
persons may be deemed to be underwriting compensation under the Securities Act.
We have agreed to pay all expenses incident to the exchange offer other
than commissions or concessions of any brokers or dealers and will indemnify the
holders of the notes (including any broker-dealers) against certain liabilities,
including liabilities under the Securities Act.
LEGAL MATTERS
Certain legal matters in connection with the Offering are being passed upon
for the Company by Friedman Kaplan & Seiler LLP, New York, New York.
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EXPERTS
The consolidated financial statements incorporated by reference in this
prospectus and registration statement, as it relates to VoiceStream Wireless
Corporation and Aerial Communications, Inc., have been audited by Arthur
Andersen LLP, independent public accountants, as indicated in their reports with
respect thereto, and are included herein in reliance upon the authority of said
firm, as experts in giving said reports.
The consolidated financial statements of Omnipoint and its subsidiaries as
of December 31, 1999 and 1998 and for each of the three years in the period
ended December 31, 1999, which are incorporated by reference in this prospectus
have been so incorporated herein in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in giving said reports.
WHERE TO FIND MORE INFORMATION
The Company is subject to the informational requirements of the Exchange
Act and in accordance therewith files reports, proxy statements and other
information with the Commission. Such reports, proxy statements and other
information filed by the Company with the Commission can be inspected and copied
at the public reference facilities maintained by the Commission and Judiciary
Plaza, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and at the
Commission's regional offices at Northwestern Atrium Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661 and at 7 World Trade Center, Suite
1300, New York, New York 10048. The Commission maintains a World Wide Web site
on the Internet at http://www.sec.gov that contains reports, proxy and
information statements and other information regarding registrants, including
the Company, that file electronically with the Commission. Copies of such
material can also be obtained at prescribed rates upon request from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549.
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PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Information relating to indemnification of directors and officers is
incorporated by reference herein from Item 14 of the Company's Registration
Statement on Form S-1 (No. 33-59630).
ITEM 21. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
2.1(1) Agreement and Plan of Reorganization by and among
VoiceStream Wireless Holding Corporation, Omnipoint
Corporation and VoiceStream Wireless Corporation, dated June
23, 1999.
2.1.1(1) First Amendment to Agreement and Plan of Reorganization by
and among VoiceStream Wireless Holding Corporation,
Omnipoint Corporation and VoiceStream Wireless Corporation,
dated as of December 30, 1999.
2.2(1) Agreement and Plan of Reorganization dated September 17,
1999 among VoiceStream Wireless Corporation, VoiceStream
Wireless Holding Corporation, VoiceStream Subsidiary III
Corporation, Aerial Communications, Inc. and Telephone and
Data Systems, Inc.
3.1(1) Amended and Restated Certificate of Incorporation.
3.2(2) Bylaws of VoiceStream Wireless Corporation.
4.1(3) Indenture for the notes with Harris Trust.
5.1 Opinion of Friedman Kaplan & Seiler.
10.1(4) Agreement and Plan of Distribution between Western Wireless
Corporation and VoiceStream Wireless Corporation, dated
April 9, 1999.
10.2(5) Waiver Agreement by and among Western Wireless Corporation,
Western PCS Corporation and certain of Western Wireless
Corporation's shareholders, dated November 30, 1994.
10.3(5) Western PCS Corporation Series A Preferred Stock Purchase
Agreement among Western Wireless Corporation, Western PCS
Corporation and the Purchasers listed therein, dated April
10, 1995.
10.4(5) PCS 1900 Project and Supply Agreement between Western PCS
Corporation and Northern Telecom Inc., dated June 30, 1995.
10.5(6) Amendment No. 1 to PCS 1900 Supply Agreement between Western
PCS Corporation and Northern Telecom Inc., dated July 25,
1996.
10.6(6) Amendment No. 2 to PCS 1900 Supply Agreement between Western
PCS Corporation and Northern Telecom Inc., dated July 25,
1996.
10.7(7) Amendment No. 3 to PCS Supply Agreement between Western PCS
Corporation and Northern Telecom Inc., dated October 14,
1996.
10.8(8) Amendment Number 4 to PCS 1900 Project and Supply Agreement
by and between Western PCS Corporation and Northern Telecom
Inc., dated March 26, 1998.
10.9(9) Amendment Number 5 to PCS 1900 Project and Supply Agreement
between VoiceStream Wireless Corporation and Northern
Telecom Inc., dated September 17, 1998.
</TABLE>
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<PAGE> 63
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
10.10(10) Amendment No. 6 to PCS 1900 Project and Supply Agreement by
and between VoiceStream Wireless Corporation and Northern
Telecom Inc.
10.11(11) Amendment No. 7 to PCS 1900 -- Project and Supply Agreement
by and between VoiceStream Wireless Corporation and Northern
Telecom Inc., dated May 14, 1999.
10.12(5) PCS Block "C" Organization and Financing Agreement by and
among Western PCS BTA I Corporation, Western Wireless
Corporation, Cook Inlet PV/SS PCS Partners, L.P., Cook Inlet
Telecommunications, Inc., SSPCS Corporation and Providence
Media Partners L.P., dated as of November 5, 1995.
10.13(5) Limited Partnership Agreement by and between Cook Inlet
PV/SS PCS Partners, L.P. and Western PCS BTA I Corporation,
dated as of November 5, 1995.
10.14(5) First Amendment to Block "C" Organization and Financing
Agreement and Cook Inlet Western Wireless PV/SS PCS, L.P.
Limited Partnership Agreement by and among Western PCS BTA I
Corporation, Western Wireless Corporation, Cook Inlet PV/SS
PCS Partners, L.P., Cook Inlet Telecommunications, Inc.,
SSPCS Corporation and Providence Media Partners L.P., dated
as of April 8, 1996.
10.15(6) Second Amendment to Block "C" Organization and Financing
Agreement and Cook Inlet Western Wireless PV/SS PCS, L.P.
Limited Partnership Agreement by and among Western PCS BTA I
Corporation, Western Wireless Corporation, Cook Inlet PV/SS
PCS Partners, L.P., Cook Inlet Telecommunications, Inc.,
SSPCS Corporation and Providence Media Partners L.P., dated
as of June 27, 1996.
10.16(6) Third Amendment to Block "C" Organization and Financing
Agreement and Cook Inlet Western Wireless PV/SS PCS, L.P.
Limited Partnership Agreement and First Amendment to
Technical Services Agreement by and among Western PCS BTA I
Corporation, Western Wireless Corporation, Cook Inlet PV/SS
PCS Partners, L.P., Cook Inlet Telecommunications, Inc.,
SSPCS Corporation, Providence Media Partners L.P. and Cook
Inlet Western Wireless PV/SS PCS, L.P., dated July 30, 1996.
10.17(5) Asset Purchase Agreement between Western PCS III License
Corporation as Buyer and GTE Mobilnet Incorporated as
Seller, dated January 16, 1996.
10.18(5) Waiver Agreement by and among Western Wireless Corporation,
Western PCS Corporation and certain of Western Wireless
Corporation's shareholders, dated February 15, 1996.
10.19(12) Software License Maintenance and Subscriber Billing Services
Agreement, dated June 1997.
10.20(12) First Amendment to Software License, Maintenance and
Subscriber Billing Services Agreement dated December 1997,
between CSC Intelicom, Inc., and Western Wireless
Corporation.
10.21(13) Iowa Wireless Services, L.P. Limited Partnership Agreement,
dated as of September 30, 1997, by and between INS Wireless,
Inc., as General Partner, and Western PCS I Iowa
Corporation, as Limited Partnership.
10.22(13) Agreement to Form Limited Partnership dated September 30,
1997, by and among Western PCS Iowa Corporation, a Delaware
corporation, INS Wireless, Inc., an Iowa corporation,
Western PCS I Corporation, a Delaware corporation, and Iowa
Network Services, Inc., an Iowa corporation.
</TABLE>
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<PAGE> 64
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
10.23(13) Purchase Agreement by and among Western PCS Corporation,
Western Wireless Corporation, Hutchison Telecommunications
Limited and Hutchison Telecommunications PCS (USA) Limited
dated October 14, 1997.
10.24(12) Letter Agreement dated December 16, 1997, between Western
Wireless Corporation and Intelicom Services, Inc. to provide
products and services pursuant to the Software License
Maintenance and Subscriber Billing Services Agreements and
First Amendment thereto.
10.25(13) Services Agreement by and between Western Wireless
Corporation and Western PCS Corporation.
10.26(13) Shareholders Agreement by and among Western Wireless
Corporation, Hutchison Telecommunications PCS (USA) Limited
and Western PCS Corporation, dated February 17, 1998.
10.27(4) Tax Sharing Agreement by and between Western Wireless
Corporation and Western PCS Corporation, dated February 17,
1998. (Contained as an exhibit to the Agreement and Plan of
Distribution).
10.28(4) First Amendment to Tax Sharing Agreement by and between
Western Wireless Corporation and VoiceStream Wireless
Corporation, dated May 3, 1999.
10.29(8) Supply Contract by and between Western PCS Corporation and
Nokia Telecommunications Inc., dated March 9, 1998.
10.30(8) Purchase and Sale Agreement by and between Nokia Mobile
Phones, Inc. and Western PCS Corporation, dated March 9,
1998.
10.31(9) Exchange Rights and Grant Agreement by and among Western PCS
BTA I Corporation, Western Wireless Corporation, Cook Inlet
Telecommunications, Inc. and VoiceStream Wireless
Corporation, dated December 17, 1998.
10.32(9) Exchange Rights and Grant Agreement by and among Western PCS
BTA I Corporation, Western Wireless Corporation, SSPCS
Corporation and VoiceStream Wireless Corporation, dated
January 19, 1999.
10.33(4) Cook Inlet/VoiceStream PCS LLC Limited Liability Company
Agreement by and between Cook Inlet GSM Company and Western
PCS BTA I Corporation, dated February 11, 1999.
10.34(4) Registration Rights Agreement by and among VoiceStream
Wireless Corporation, Hellman & Friedman Capital Partners
II, L.P., H&F Orchard Partners, L.P., H&F International
Partners, L.P., John W. Stanton, Theresa E. Gillespie, PN
Cellular, Inc., Stanton Family Trust, Stanton Communications
Corporation, GS Capital Partners, L.P., The Goldman Sachs
Group, L.P., Bridge Street Fund 1992, L.P., Stone Street
Fund 1992, L.P., and Providence Media Partners L.P., dated
May 3, 1999.
10.35(4) Shareholders Agreement by and among VoiceStream Wireless
Corporation, Western Wireless Corporation, Hutchison
Telecommunications Holdings (USA) Limited and Hutchison
Telecommunications PCS (USA) Limited, dated May 3, 1999.
10.36(4) First Amendment to Shareholders Agreement by and among
VoiceStream Wireless Corporation, Western Wireless
Corporation, Hutchison Telecommunications Holdings (USA)
Limited and Hutchison Telecommunications PCS (USA) Limited
dated.
</TABLE>
61
<PAGE> 65
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
10.37(10) Indenture by and between VoiceStream Wireless Corporation
and Harris Trust Company, dated May 14, 1999, relating to
12% Series A Senior Debentures due 2011 and 12% Senior
Debentures due 2011.
10.38(14) Purchase Agreement, dated as of June 23, 1999, between
Omnipoint Corporation and Cook Inlet/VS GSM II PCS, LLC.
10.39(14) Purchase Agreement, dated as of June 23, 1999, between
Omnipoint Corporation and Cook Inlet/VS GSM III PCS, LLC.
10.40(14) Stock Subscription Agreement, dated as of June 23, 1999, by
and among VoiceStream Wireless Corporation, Hutchison
Telecommunications Limited and Hutchison Telecommunications
PCS (USA) Limited.
10.41(14) Securities Purchase Agreement, dated as of June 23, 1999, by
and among VoiceStream Wireless Corporation, Hutchison
Communications PCS (USA) Limited and Omnipoint Corporation.
10.42(5) Employment Agreement by and between Robert R. Stapleton and
Western Wireless Corporation, dated March 12, 1996.
10.43(5) Employment Agreement by and between Cregg B. Baumbaugh and
Western Wireless Corporation, dated March 12, 1996.
10.44(15) Employment Agreement by and between Timothy Wong and Western
Wireless Corporation, dated February 10, 1998.
10.45(15) Employment Agreement by and between Robert Dotson and
Western Wireless Corporation, dated February 10, 1998.
10.46(4) Assignment and Assumption Agreement by and between Western
Wireless Corporation and VoiceStream Wireless Corporation
with respect to the Employment Agreement of Robert R.
Stapleton, dated May 3, 1999.
10.47(4) Assignment and Assumption Agreement by and between Western
Wireless Corporation and VoiceStream Wireless Corporation
with respect to the Employment Agreement of Cregg B.
Baumbaugh, dated May 3, 1999.
10.48(4) Assignment and Assumption Agreement by and between Western
Wireless Corporation and VoiceStream Wireless Corporation
with respect to the Employment Agreement of Timothy Wong,
dated May 3, 1999.
10.49(4) Assignment and Assumption Agreement by and between Western
Wireless Corporation and VoiceStream Wireless Corporation
with respect to the Employment Agreement of Robert Dotson,
dated May 3, 1999.
10.50(16) Employment Agreement, dated as of January 1, 1999, by and
between Omnipoint and Douglas G. Smith.
10.51(17) Employment Agreement, effective October 1, 1995, by and
between Omnipoint, Omnipoint Communications Inc. and George
F. Schmitt.
10.52(17) Promissory Note, dated October 1, 1995, by George F.
Schmitt.
10.53(17) Stock Restriction Agreement, dated October 1, 1995, by and
between Omnipoint and George F. Schmitt.
10.54(18) First Amendment to Stock Restriction Agreement, dated as of
June 21, 1999, by and between Omnipoint Communications, Inc.
and George F. Schmitt.
10.55(19) Employment Agreement, dated November 3, 1996, by and between
Omnipoint and Kjell S. Andersson.
</TABLE>
62
<PAGE> 66
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
10.56(19) Amendment to Employment Agreement dated as of February 24,
1997, between Omnipoint and Kjell S. Andersson.
10.57(19) Promissory Note, dated February 24, 1997, by Kjell S.
Andersson.
10.58(19) Stock Restriction Agreement, dated February 24, 1997, by and
between Omnipoint and Kjell S. Andersson.
10.59(16) Employment Agreement, dated as of April 23, 1999, by and
between Omnipoint and Harry Plonskier.
10.60(17) Amended and Restated Registration Rights Agreement, dated
June 29, 1995, by and among Omnipoint and the parties named
therein.
10.61(17) OEM Supply Agreement for Omnipoint PCS (Personal
Communication Systems) Products, dated September 22, 1994,
by and between Omnipoint and Northern Telecom Inc.
10.62(17) Manufacturing License and Escrow Agreement for Personal
Communication Service Products, dated February 28, 1995, by
and between Omnipoint and Northern Telecom Inc.
10.63(17) Collaborative Development Agreement, dated March 1, 1995, by
and between Omnipoint and Northern Telecom Inc.
10.64(17) Supply Agreement, dated September 22, 1994, by and between
Omnipoint Communications Inc. and Northern Telecom Inc.
10.65(17) Amendment No. 1 to Supply Agreement dated July 21, 1995, by
and between Omnipoint Communications Inc. and Northern
Telecom Inc.
10.66(17) Letter Agreement, dated January 24, 1996, by and between
Omnipoint and Ericsson Inc.
10.67(20) Acquisition Agreement for Ericsson CMS 40 Personal
Communications Systems (PCS) Infrastructure Equipment, dated
as of April 16, 1996, by and between Ericsson Inc. and
Omnipoint Communications.
10.68(20) Acquisition Supply and License Agreement for Omnipoint
Personal Communications Systems (PCS) Infrastructure
Equipment, dated as of April 16, 1996, by and between
Ericsson Inc. and Omnipoint.
10.69(20) Agreement for Purchase and Sale of Ericsson Inc. Masko
Terminal Units, dated as of April 16, 1996, by and between
Ericsson, Inc. and Omnipoint Communications Inc.
10.70(21) Purchase Agreement by and among Omnipoint Corporation,
Donaldson, Lufkin & Jenrette Securities Corporation,
BancAmerica Robertson Stephens, Bear, Stearns & Co., Inc.
and Smith Barney Inc., dated May 1, 1998.
10.71(21) Deposit Agreement by and among Omnipoint Corporation, Marine
Midland Bank, and the Holders from time to time of the
Depositary Shares, dated May 6, 1998.
10.72(21) Deposit Account Agreement by and between Omnipoint
Corporation and The First National Bank of Maryland, dated
May 6, 1998.
10.73(24) Note Purchase Agreement by and among Omnipoint Corporation,
IBJ Schroder Bank & Trust Company, as paying agent, and
certain initial purchasers named therein, dated December 21,
1998.
</TABLE>
63
<PAGE> 67
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
10.74(3) Securities Purchase Agreement by and among VoiceStream
Wireless Corporation, Hutchison Telecommunications PCS (USA)
Limited and Omnipoint Corporation, dated as of June 23,
1999.
10.75(23) PCS Infrastructure Supply Contract, dated as of March 1,
1996, between Aerial and Nokia Telecommunications, Inc.
10.76(24) Tax Settlement Agreement dated March 12, 1999, by and
between Aerial, Aerial Operating Company, Inc. and Telephone
and Data Systems, Inc.
10.77(25) Stockholder Agreement dated as of September 17, 1999, by and
between Telephone and Data Systems, Inc. and stockholders of
Aerial Communications, Inc., and VoiceStream Wireless
Corporation, and VoiceStream Wireless Holding Corporation.
10.78(25) Indemnity Agreement, dated as of September 17, 1999, among
VoiceStream Wireless Corporation, VoiceStream Wireless
Holding Corporation, Aerial Communications, Inc., Aerial
Operating Company, Inc., and Telephone and Data Systems,
Inc.
10.79(25) Debt/Equity Replacement Agreement dated as of September 17,
1999, made by and among Telephone and Data Systems, Inc.,
Aerial Communications, Inc., Aerial Operating Company, Inc.,
VoiceStream Wireless Corporation, and VoiceStream Wireless
Holding Corporation.
10.80(25) Parent Stockholder Agreement dated as of September 17, 1999,
by and among Aerial Communications, Inc., Telephone and Data
Systems, Inc., VoiceStream Wireless Corporation, VoiceStream
Wireless Holding Corporation and the individuals and
entities set forth on Schedule I thereto.
10.81.1(16) Consent and Amendment dated as of November 12, 1999, by and
among Aerial Communications, Inc., Telephone and Data
Systems, Inc., VoiceStream Wireless Corporation, VoiceStream
Wireless Holding Corporation, and Hellman & Friedman Capital
Partners II, H&F Orchard Partners, L.P., H&F International
Partners, L.P., John W. Stanton, Theresa Gillespie, PN
Cellular, Inc., Stanton Family Trust, Stanton Communications
Corporation, GS Capital Partners, L.P., The Goldman Sachs
Group, Inc., Bridge Street Fund 1992, L.P., Stone Street
Fund 1992, L.P., Providence Media Partners, L.P., Hutchison
Telecommunications Holdings (USA) Limited, and Hutchison
Telecommunications PCS (USA) Limited.
10.82(25) Settlement Agreement and Release, entered into as of
September 17, 1999 by and among Sonera Ltd., Sonera
Corporation U.S., Telephone and Data Systems, Inc., Aerial
Communications, Inc., and Aerial Operating Company, Inc.
10.83(26) Stock Subscription Agreement, dated as of February 11, 2000,
by and among VoiceStream Wireless Corporation and Microcell
Telecommunications Inc.
10.84(27) Shareholders Agreement of Microcell Telecommunications,
dated as of February 11, 2000 by and between VoiceStream
Wireless Corporation and Telesystem Enterprises (T.E.L.)
Ltd.
10.85(27) Credit Agreement dated as of February 25, 2000, by and among
VoiceStream PCS Holdings L.L.C., Omnipoint Finance, L.L.C.,
Chase Securities Inc., Bank of America Securities L.L.C., TD
Securities (USA) Inc., Goldman Sachs Credit Partners L.P.,
Barclays Capital and SG Cowen, Toronto Dominion (Texas) Inc.
12.1(3) Statements re computation of ratios
23.1* Consent of Arthur Andersen LLP (VoiceStream)
</TABLE>
64
<PAGE> 68
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
23.2* Consent of PricewaterhouseCoopers, LLP (Omnipoint)
23.3* Consent of Arthur Andersen LLP (Aerial)
23.4* Consent of Friedman Kaplan & Seiler (included in Exhibit
5.1)
25.1(3) Statement of Eligibility under the Trust Indenture Act of
1939, as amended, of Harris Trust on Form T-1
99.1* Form of Letter of Transmittal
99.2* Form of Notice of Guaranteed Delivery
</TABLE>
- -------------------------
* previously filed
(1) Incorporated by reference to the exhibit filed with the VoiceStream
Wireless Holding Corporation to Registration Statement on Form S-4
(Commission File No. 333-89735), filed January 24, 2000.
(2) Incorporated by reference to the exhibit filed with the VoiceStream
Wireless Holding Corporation Registration Statement on Form S-4 (Commission
File No. 333-89735).
(3) Incorporated by reference to the exhibit filed with VoiceStream Wireless
Corporation Registration Statement on Form S-4 (Commission File No.
333-33168.
(4) Incorporated by reference to the exhibit filed with VoiceStream Wireless
Corporation Form 10/A, filed with the SEC on April 13, 1999.
(5) Incorporated by reference to the exhibit filed with the Western Wireless
Corporation Registration Statement on Form S-1 (Commission File No.
333-2432), filed with the SEC on March 15, 1996.
(6) Incorporated by reference to the exhibit filed with the Western Wireless
Corporation Registration Statement on Form S-4 (Commission File No.
333-14859), filed with the SEC on October 25, 1996.
(7) Incorporated by reference to the exhibit filed with the Western Wireless
Corporation Annual Report on Form 10-K for the year ended December 31, 1996
(Commission File No. 0-28160), filed with the SEC on March 31, 1997.
(8) Incorporated by reference to the exhibit filed with the Western Wireless
Corporation Form 10-Q/A for the quarter ended June 30, 1998 (Commission
File No. 0-28160), filed with the SEC on August 17, 1998.
(9) Incorporated by reference to the exhibit filed with the VoiceStream
Wireless Corporation Form 10 (Commission File No. 0-25441), filed with the
SEC on February 24, 1999.
(10) Incorporated by reference to the exhibit filed with the VoiceStream
Wireless Corporation Form 8-K, filed with the SEC on May 27, 1999.
(11) Incorporated by reference to the exhibit filed with the VoiceStream
Wireless Corporation Form 10-Q, filed with the SEC on August 9, 1999.
(12) Incorporated by reference to the exhibit filed with the Western Wireless
Corporation Annual Report on Form 10-K for the year ended December 31, 1997
(Commission File No. 0-28160), filed with the SEC on March 27, 1998.
(13) Incorporated by reference to the exhibit filed with the Western Wireless
Corporation Form 10-Q for the quarter ended September 30, 1997 (Commission
File No. 0-28160), filed with the SEC on November 6, 1997.
(14) Incorporated by reference to the exhibit filed with the VoiceStream
Wireless Corporation form 8-K, filed with the SEC on July 7, 1999.
65
<PAGE> 69
(15) Incorporated by reference to the Western Wireless Corporation Form 10-Q for
the quarter ended March 31, 1998 (Commission File No. 0-28160), filed with
the SEC on May, 11, 1998.
(16) Incorporated by reference to the exhibit filed with the VoiceStream
Wireless Holding Corporation Registration Statement on Form S-4 (Commission
File No. 333-89735), filed December 3, 1999.
(17) Incorporated herein by reference to Omnipoint's Registration Statement on
Form S-1 (Commission File No. 33-98360).
(18) Incorporated by reference to the exhibit filed with the VoiceStream
Wireless Holding Corporation Registration Statement on Form S-4 (Commission
File No. 333-89735), filed December 29, 1999.
(19) Incorporated herein by reference to Omnipoint's Annual Report on Form 10-K
for the year ended December 31, 1996.
(20) Incorporated herein by reference to Omnipoint's Current Report on form 8-K,
filed May 3, 1996. Portions of this Exhibit were omitted and filed
separately with the Secretary of the Commission pursuant to Omnipoint's
application requesting confidential treatment under Rule 24b-2 of the
Exchange Act of 1934, filed with the SEC on May 3, 1996.
(21) Incorporated herein by reference to Omnipoint's Quarterly Report on Form
10-Q, filed with the SEC on May 15, 1998.
(22) Incorporated herein by reference to Omnipoint's Current Report on Form 8-K,
filed with the SEC on December 29, 1998.
(23) Incorporated by reference to Exhibit 10.13 to Aerial's Amendment No. 1 to
Form S-1 (Commission File No. 333-1514), filed with the SEC on March 29,
1996.
(24) Incorporated by reference to Exhibit 10.22 to Aerial Annual Report on Form
10-K for the year ended December 31, 1998 (Commission File No. 0-28262),
filed with the SEC on March 31, 1996.
(25) Incorporated herein by reference to the Telephone and Data Systems, Inc.
Form 8-K, filed with the SEC on September 17, 1999.
(26) Incorporated herein by reference to VoiceStream's Form 8-K filed with the
SEC On March 3, 2000.
(27) Incorporated by reference to VocieStream Annual Report on Form 10-K for
1999.
66
<PAGE> 70
ITEM 22. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 2 of Regulation S-X are not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.
(b) Insofar as indemnification for liabilities arising under the Securities
Act 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 Commission such indemnification is
against public policy as expressed in the Securities Act 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 such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
(c) The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11 or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated document 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.
(e) 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
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 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.
67
<PAGE> 71
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this to the Registration Statement on Form S-4 to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of
Bellevue, State of Washington, on this 1st day of May 2000.
VOICESTREAM WIRELESS CORPORATION
By: /s/ ALAN R. BENDER
------------------------------------
Alan R. Bender
Executive Vice President
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed below by the following persons in
the capacities and on the date indicated.
<TABLE>
<CAPTION>
NAME TITLE DATE
---- ----- ----
<C> <S> <C>
/s/ JOHN W. STANTON* Chairman of the Board and Chief May 1, 2000
- --------------------------------------------------- Executive Officer (Principal
John W. Stanton Executive Officer)
/s/ ROBERT R. STAPLETON* President and Director May 1, 2000
- ---------------------------------------------------
Robert R. Stapleton
/s/ DOUGLAS G. SMITH* Vice Chairman and Director May 1, 2000
- ---------------------------------------------------
Douglas G. Smith
/s/ DONALD GUTHRIE* Vice Chairman and Director May 1, 2000
- ---------------------------------------------------
Donald Guthrie
</TABLE>
<PAGE> 72
<TABLE>
<CAPTION>
NAME TITLE DATE
---- ----- ----
<C> <S> <C>
/s/ CREGG B. BAUMBAUGH* Executive Vice President -- May 1, 2000
- --------------------------------------------------- Finance, Strategy and
Cregg B. Baumbaugh Development (Principal
Financial Officer)
/s/ PATRICIA L. MILLER* Vice President and Controller May 1, 2000
- --------------------------------------------------- (Principal Accounting
Patricia L. Miller Officer)
/s/ MITCHELL R. COHEN* Director May 1, 2000
- ---------------------------------------------------
Mitchell R. Cohen
/s/ DANIEL J. EVANS* Director May 1, 2000
- ---------------------------------------------------
Daniel J. Evans
/s/ RICHARD L. FIELDS* Director May 1, 2000
- ---------------------------------------------------
Richard L. Fields
/s/ CANNING K.N. FOK* Director May 1, 2000
- ---------------------------------------------------
Canning K.N. Fok
/s/ JONATHAN M. NELSON* Director May 1, 2000
- ---------------------------------------------------
Jonathan M. Nelson
/s/ TERENCE M. O'TOOLE* Director May 1, 2000
- ---------------------------------------------------
Terence M. O'Toole
/s/ JAMES N. PERRY, JR.* Director May 1, 2000
- ---------------------------------------------------
James N. Perry, Jr.
/s/ JAMES J. ROSS* Director May 1, 2000
- ---------------------------------------------------
James J. Ross
/s/ HANS SNOOK* Director May 1, 2000
- ---------------------------------------------------
Hans Snook
/s/ SUSAN M.F. WOO CHOW* Director May 1, 2000
- ---------------------------------------------------
Susan M.F. Woo Chow
</TABLE>
<PAGE> 73
<TABLE>
<CAPTION>
NAME TITLE DATE
---- ----- ----
<C> <S> <C>
/s/ FRANK J. SIXT* Director May 1, 2000
- ---------------------------------------------------
Frank J. Sixt
/s/ KAJ-ERIK RELANDER* Director May 1, 2000
- ---------------------------------------------------
Kaj-Erik Relander
/s/ * BY ALAN R. BENDER
- ---------------------------------------------------
Attorney in fact
</TABLE>
