<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 27, 1998
Registration No. 333-14859
================================================================================
SECURITIES AND EXCHANGE COMMISSION
FORM S-3
(POST-EFFECTIVE AMENDMENT NO. 4)
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
WESTERN WIRELESS CORPORATION
(Exact Name of Registrant as Specified in its Charter)
WASHINGTON 91-1638901
(State or Other Jurisdiction of (I.R.S.Employer
Incorporation or Organization) Identification
Number)
2001 NW SAMMAMISH ROAD
ISSAQUAH, WASHINGTON 98027
(425) 313-5200
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)
ALAN R. BENDER, ESQ.
SENIOR VICE PRESIDENT, GENERAL COUNSEL
WESTERN WIRELESS CORPORATION
2001 NW SAMMAMISH ROAD
ISSAQUAH, WASHINGTON 98027
(425) 313-5200
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
Copies to:
G. SCOTT GREENBURG, ESQ.
GARY J. KOCHER, ESQ.
PRESTON GATES & ELLIS LLP
5000 COLUMBIA CENTER
701 FIFTH AVENUE
SEATTLE, WASHINGTON 98104
(206) 623-7580
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement. If the only
securities being registered on this Form are being offered pursuant to dividend
or interest reinvestment plans, please check the following box: [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box: [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act of 1933, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) 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 delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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.
This registration statement contains a combined prospectus in accordance with
Rule 429 under the Securities Act of 1933 which relates to this registration
statement and the registrant's registration statement on Form S-1 (Commission
File No. 333-2432), registration statement on Form S-1 (Commission File No.
333-3688) and registration statement on Form S-1 (Commission File No. 333-4229).
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EXPLANATORY NOTE
This registration statement was originally filed on Form S-4 for
purposes of conducting an exchange offer, as more fully described in the form of
Prospectus filed by Western Wireless Corporation (the "Company") with the
Securities and Exchange Commission on November 4, 1996. The Company amended this
registration statement, pursuant to Post-Effective Amendment No. 1 on Form S-1
thereto, declared effective on April 30, 1997, as amended by Post-Effective
Amendment No. 2 thereto, declared effective on May 14, 1997, in connection with
the market-making transactions described below. The Company hereby further
amends this registration statement, pursuant to this Post-Effective Amendment
No. 3 on Form S-3, in connection with such market-making transactions.
This registration statement includes a prospectus relating to an
indeterminate number of shares of Class A Common Stock of the Company, an
indeterminate principal amount of the Company's 10-1/2% Senior Subordinated
Notes Due 2006 and an indeterminate principal amount of the Company's 10-1/2%
Senior Subordinated Notes Due 2007, which may be sold by Goldman, Sachs & Co. in
connection with market-making transactions. See "Plan of Distribution."
<PAGE> 3
[LOGO]
WESTERN WIRELESS CORPORATION
CLASS A COMMON STOCK
(NO PAR VALUE PER SHARE)
10-1/2% SENIOR SUBORDINATED NOTES DUE 2006
10-1/2% SENIOR SUBORDINATED NOTES DUE 2007
SEE "RISK FACTORS" BEGINNING ON PAGE 9 FOR A DISCUSSION OF CERTAIN
CONSIDERATIONS RELEVANT TO AN INVESTMENT IN THE CLASS A COMMON STOCK, 10-1/2%
SENIOR SUBORDINATED NOTES DUE 2006 OR 10-1/2% SENIOR SUBORDINATED NOTES DUE
2007.
The Class A Common Stock is quoted on the Nasdaq National Market under
the symbol "WWCA."
EACH OF THE 10-1/2% SENIOR SUBORDINATED NOTES DUE 2006 (THE "2006
NOTES") AND THE 10-1/2% SENIOR SUBORDINATED NOTES DUE 2007 (THE "2007 NOTES,"
AND, TOGETHER WITH THE 2006 NOTES, THE "SENIOR SUBORDINATED NOTES") ARE SENIOR
UNSECURED OBLIGATIONS OF THE COMPANY AND ARE SUBORDINATED IN RIGHT OF PAYMENT TO
THE PRIOR PAYMENT IN FULL OF ALL SENIOR INDEBTEDNESS AND SENIOR IN RIGHT OF
PAYMENT TO ANY CURRENT OR FUTURE SUBORDINATED INDEBTEDNESS OF THE COMPANY. IN
ADDITION, ALL EXISTING AND FUTURE INDEBTEDNESS AND OTHER LIABILITIES OF THE
COMPANY'S SUBSIDIARIES WILL BE EFFECTIVELY SENIOR IN RIGHT OF PAYMENT TO THE
SENIOR SUBORDINATED NOTES. THE 2006 NOTES AND THE 2007 NOTES RANK PARI PASSU
WITH ONE ANOTHER. THE COMPANY HAS NOT ISSUED, AND DOES NOT HAVE ANY FIRM
ARRANGEMENT TO ISSUE, ANY SIGNIFICANT INDEBTEDNESS TO WHICH THE SENIOR
SUBORDINATED NOTES WOULD BE SENIOR. AT DECEMBER 31, 1997, SENIOR INDEBTEDNESS
AGGREGATED APPROXIMATELY $995.0 MILLION.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
This Prospectus has been prepared for and is to be used by Goldman,
Sachs & Co. in connection with offers and sales of the shares of Class A Common
Stock, the 10-1/2% Senior Subordinated Notes Due 2006 and the 10-1/2% Senior
Subordinated Notes Due 2007 related to market-making transactions, at prevailing
market prices, related prices or negotiated prices. The Company will not receive
any of the proceeds of such sales. Goldman, Sachs & Co. ("Goldman Sachs") may
act as principal or agent in such transactions. See "Plan of Distribution."
GOLDMAN, SACHS & CO.
--------------------
The date of this Prospectus is March 27, 1998.
<PAGE> 4
AVAILABLE INFORMATION
Western Wireless Corporation (the "Company" or "Western Wireless") is
subject to the reporting requirements of the Securities Exchange Act of 1934
(the "Exchange Act") and files reports and other information with the Securities
and Exchange Commission (the "Commission") in accordance therewith. Such
reports, proxy statements, and other information filed by Western Wireless are
available for inspection and copying at the public reference facilities of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
Commission's Regional Offices located at 7 World Trade Center, Suite 1300, New
York, New York 10048, and at Citicorp Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661-2511. Copies of such material may be obtained by
mail from the Public Reference Section of the Commission at 450 Fifth St., N.W.,
Washington, D.C. 20549, at prescribed rates. 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 Western Wireless, that file electronically with the Commission. The
Class A Common Stock is traded as "National Market Securities" on the Nasdaq
National Market. Material filed by Western Wireless can be inspected at the
offices of the National Association of Securities Dealers, Inc., Reports
Section, 1735 K Street, N.W., Washington, D.C. 20006.
This Prospectus constitutes a part of a Registration Statement on Form
S-3 (together with all amendments and exhibits thereto, the "Registration
Statement") that Western Wireless has filed with the Commission under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to the
Class A Common Stock, 2006 Notes and 2007 Notes. This Prospectus does not
contain all of the information set forth in such Registration Statement, certain
parts of which are omitted in accordance with the rules and regulations of the
Commission. Reference is made to the Registration Statement and related exhibits
thereto for further information with respect to Western Wireless and the
securities offered hereby. Any statements contained herein concerning the
provisions of any documents filed as exhibits to the Registration Statement or
otherwise filed with the Commission or incorporated by reference herein are not
necessarily complete, and, in each instance, reference is made to the copy of
such document so filed for more complete description of the matter involved.
Each such statement is qualified in its entirety by such reference.
The Company is required by the terms of the indenture dated as of May
22, 1996, as amended and supplemented from time to time, by and between the
Company and Harris Trust Company of California, as trustee (the "Trustee"),
under which the 2006 Notes were issued (as so amended and supplemented, the
"2006 Notes Indenture"), and the indenture dated as of October 24, 1996, as
amended and supplemented from time to time, by and between the Company and
Trustee, under which the 2007 Notes were issued (as so amended and supplemented,
the "2007 Notes Indenture"), to furnish the Trustee with annual reports
containing consolidated financial statements audited by the Company's
independent certified public accountants and with quarterly reports containing
unaudited condensed consolidated financial statements for each of the first
three quarters of each fiscal year.
Western Wireless(R) and VoiceStream(R) are registered service marks and
"Telewaves" is a trademark of the Company. CELLULAR ONE(R) is a registered
service mark of Cellular One Group.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed with the Commission by Western Wireless
(Commission File No. 0-28160) are incorporated by reference in this Prospectus:
1. The Company's Annual Report on Form 10-K for the year ended December
31, 1997.
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2. The Company's Proxy Statement dated April 25, 1997.
3. The description of the Class A Common Stock and the Class B Common
Stock of Western Wireless contained in the registration statement of Western
Wireless filed on Form S-1, Commission File No. 333-2432, which is incorporated
by reference in Form 8-A dated April 8, 1996, filed pursuant to the Exchange
Act.
All documents filed by Western Wireless pursuant to Sections 13(a),
13(c), 14, or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering of the securities
offered hereby shall be deemed to be incorporated by reference into this
Prospectus and to be a part hereof from the date of filing of such document. Any
statement contained herein or in a document all or a portion of which is
incorporated or deemed incorporated by reference herein shall be deemed to be
modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modified or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
Western Wireless hereby undertakes to provide without charge to each
person to whom this Prospectus has been delivered, upon the written or oral
request of any such person, a copy of any and all of the foregoing documents
incorporated herein by reference (other than exhibits to such documents which
are not specifically incorporated by reference into the information that this
Prospectus incorporates). Written or telephone requests should be directed to
Investor Relations Department, Western Wireless Corporation, 2001 NW Sammamish
Road, Issaquah, Washington, 98027; telephone number (425) 313-5200.
4
<PAGE> 6
PROSPECTUS SUMMARY
Unless the context otherwise requires, the term "Company" or "Western
Wireless" when used in this Prospectus refers to Western Wireless Corporation, a
Washington corporation which is the successor to a Delaware corporation pursuant
to a reincorporation merger that was effected in May 1996, and its subsidiaries
and predecessors.
THE COMPANY
Western Wireless provides wireless communications services in the
western United States. The Company owns cellular and PCS licenses for a
geographic area covering approximately 59% of the continental United States. In
its cellular and PCS markets, the Company serves a combined 648,600 subscribers
at December 31, 1997.
The Company holds 87 cellular licenses and owns and operates cellular
communications systems in 16 Metropolitan Statistical Areas ("MSAs") and 71
Rural Service Areas ("RSAs") covering an aggregate population of approximately
7.3 million persons. The RSAs include 12 markets acquired through the Company's
October 1997 acquisition of certain assets of Triad Cellular Corporation and
affiliates (the "Triad Acquisition"). In its cellular markets, the Company uses
the CELLULAR ONE(R) brand name.
The Company holds 115 broadband personal communications services ("PCS")
licenses and operates PCS communications systems in seven Major Trading Areas
("MTAs") covering an aggregate population of approximately 20.2 million persons.
In 1997, the Company obtained 100 of its broadband PCS licenses for Basic
Trading Areas ("BTAs") in the Federal Communication Commission's ("FCC") D and E
Block auctions and acquired an additional 8 PCS Licenses for BTAs through the
Triad Acquisition. The Company has not yet commenced operations in any of such
BTA markets. Through a joint venture, PCS service is available under the
Company's proprietary VoiceStream(R) brand name in the Wichita, Kansas BTA
market. Cook Inlet Western Wireless PV/SS PCS, LP ("Cook Inlet PCS"), a
partnership in which the Company holds a 49.9% limited partnership interest,
owns broadband PCS licenses in 21 Basic Trading Areas ("BTAs") including 7 that
were acquired in the FCC F Block auction during the first quarter of 1997. Cook
Inlet PCS initiated service in the Tulsa, Oklahoma BTA in June 1997 utilizing
the VoiceStream(R) brand name. In its PCS markets, the Company uses the
internationally-proven Global System for Mobile Communications ("GSM")
technology as the network standard and operates under its VoiceStream(R) brand
name.
Western Wireless is a Washington corporation and its principal executive
offices are located at 2001 NW Sammamish Road, Issaquah, Washington, 98027;
telephone number (425) 313-5200.
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<PAGE> 7
10 1/2% SENIOR SUBORDINATED NOTES DUE 2006 OUTSTANDING
2006 Notes ................ $200 million principal amount of 10-1/2% Senior
Subordinated Notes Due 2006 (the "2006 Notes").
Principal of, premium, if any, and interest on
the 2006 Notes will be payable in immediately
available funds.
Maturity Date.............. The 2006 Notes will mature on June 1, 2006.
Interest Payment Dates..... June 1 and December 1 of each year, commencing
December 1, 1996.
Ranking.................... The 2006 Notes are senior unsecured obligations
of the Company and are subordinated in right of
payment to the prior payment in full of all
Senior Indebtedness and senior in right of
payment to any current or future subordinated
Indebtedness of the Company. In addition, all
existing and future Indebtedness and other
liabilities of the Company's Subsidiaries will be
effectively senior in right of payment to the
2006 Notes. At December 31, 1997, Senior
Indebtedness aggregated approximately $995.0
million. At December 31, 1997, the total
outstanding Indebtedness of the Company's
Subsidiaries not eliminated in the Company's
consolidated financial statements was
approximately $300.0 million. The 2006 Notes rank
pari passu with $200.0 million principal amount
of outstanding 2007 Notes. See "Description of
Senior Subordinated Notes Due
2006--Subordination."
Optional Redemption........ Prior to June 1, 2001, the 2006 Notes may be
redeemed at the option of the Company in whole
or, from time to time, in part at a redemption
price equal to the sum of (i) the principal
amount of the 2006 Notes to be redeemed plus
accrued interest to but excluding the redemption
date and (ii) the Make-Whole Amount. After June
1, 2001, the 2006 Notes may be redeemed as a
whole or, from time to time, in part at the
option of the Company at the following redemption
prices (expressed as percentages of principal
amount), in each case together with accrued
interest to but excluding the date fixed for
redemption, if redeemed during the 12-month
period beginning June 1 of each of the years
indicated: 2001 at 105.25%, 2002 at 103.50%, 2003
at 101.75% and 2004 and thereafter at 100%. In
addition, on or before June 1, 1998, the Company
may, at its option, apply Qualified Capital Stock
Proceeds and Affiliate and Related Person
Proceeds to redeem up to $66.0 million in
aggregate principal amount of 2006 Notes at
110.5% of principal amount together with accrued
Interest. See "Description of Senior Subordinated
Notes Due 2006--Optional Redemption." In
addition, the Company may be required to offer to
repurchase the 2006 Notes upon the occurrence of
a Change of Control or upon certain Asset
Dispositions. See "Description of Senior
Subordinated Notes Due 2006--Change of Control"
and "--Covenants--Limitation on Certain Asset
Dispositions." The Company's credit facility (the
"Credit Facility") with a consortium of leaders,
which provides for $750 million of revolving
credit and a $200 million term loan, prohibits
the repayment of all or any portion of the
principal amount of the 2006 Notes prior to the
repayment of all indebtedness under the Credit
Facility.
Sinking Fund............... The 2006 Notes are not entitled to any sinking
fund.
6
<PAGE> 8
Change of Control.......... Upon a Change of Control, each Holder of 2006
Notes will have the right to have the Company
repurchase all or a portion of such Holder's 2006
Notes at a purchase price in cash equal to 101%
of the aggregate principal amount of the 2006
Notes plus accrued interest to but excluding the
Purchase Date. The Company will not be able to so
repurchase 2006 Notes without obtaining written
consents from or repaying the lenders under the
Credit Facility.
Certain Covenants.......... The 2006 Notes Indenture contains limitations on,
among other things, (a) the Incurrence of
additional Indebtedness, (b) the issuance of
Preferred Stock by Restricted Subsidiaries, (c)
the making of Restricted Payments, (d) the
Incurrence of certain Liens, (e) certain Asset
Dispositions, (f) dividend and other payment
restrictions affecting Restricted Subsidiaries,
(g) the sale or issuance of a Wholly Owned
Restricted Subsidiary's Capital Stock, (h)
transactions with Affiliates and (i) certain
consolidations, mergers and transfers of assets.
See "Description of Senior Subordinated Notes Due
2006--Covenants." ........
For additional information regarding the 2006 Notes and for definitions
of certain capitalized terms used herein, see "Description of Senior
Subordinated Notes Due 2006."
10 1/2% SERIES SUBORDINATED NOTES DUE 2007 OUTSTANDING
On October 24, 1996, the Company issued $200,000,000 aggregate principal
amount of 2007 Notes in a transaction exempt from registration under the
Securities Act (the "Original Notes"). The Company subsequently filed a
registration statement on Form S-4 in connection with its offer to exchange (the
"Exchange Offer") up to $200,000,000 aggregate principal amount of its
registered 2007 Notes for up to $200,000,000 aggregate principal amount of the
Original Notes. The Exchange Offer expired on December 4, 1996 and, as a result
of such Exchange Offer, $199.0 million in principal amount of Original Notes was
exchanged for $199.0 million principal amount of exchange notes (the "Exchange
Notes").
2007 Notes ................ $200.0 million principal amount of 10-1/2% Senior
Subordinated Notes Due 2007, $199.0 million
aggregate principal amount of which was exchanged
pursuant to the Exchange Offer for Exchange Notes
and $1.0 million aggregate principal amount of
which was not so exchanged. Although information
contained herein with respect to the 2007 Notes
is presented with respect to the full $200.0
million aggregate principal amount of 2007 Notes,
this Prospectus relates only to the $199.0
million aggregate principal amount of 2007 notes
exchanged in the Exchange Offer (i.e., the
Exchange Notes). Principal of, premium, if any,
and interest on the 2007 Notes will be payable in
immediately available funds.
Interest and Maturity Date. The 2007 Notes bear interest from and including
their date of issuance. The 2007 Notes will
mature on February 1, 2007.
Interest Payment Dates .... February 1 and August I of each year, commencing
February 1, 1997.
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Ranking ................... The 2007 Notes are senior unsecured obligations
of the Company and are subordinated in right of
payment to the prior payment in full of all
Senior Indebtedness and senior in right of
payment to any future subordinated Indebtedness
of the Company. In addition, all existing and
future Indebtedness and other liabilities of the
Company's subsidiaries will be effectively senior
in right of payment to the 2007 Notes. At
December 31, 1997, Senior Indebtedness aggregated
approximately $995.0 million. At December 31,
1997, the total outstanding Indebtedness of the
Company's subsidiaries not eliminated in the
Company's consolidated financial statements was
approximately $300.0 million. The 2007 Notes rank
pari passu with $200.0 million principal amount
of outstanding 2006 Notes. See "Description of
Senior Subordinated Notes Due
2007--Subordination."
Optional Redemption ....... Prior to February 1, 2002, the outstanding 2007
Notes may be redeemed at the option of the
Company in whole or, from time to time, in part
at a redemption price equal to the sum of (i) the
principal amount of the 2007 Notes to be redeemed
plus accrued interest to but excluding the
redemption date and (ii) the Make-Whole Amount.
On or after February 1, 2002 the outstanding 2007
Notes may be redeemed as a whole or, from time to
time, in part at the option of the Company at the
following redemption prices (expressed as
percentages of principal amount), in each case
together with accrued interest to but excluding
the date fixed for redemption, if redeemed during
the 12-month period beginning February 1 of each
of the years indicated: 2002 at 105.25%, 2003 at
103.50%, 2004 at 101.75% and 2005 and thereafter
at 100%. In addition, on or before February 1,
1999, the Company may, at its option, apply
Qualified Capital Stock Proceeds and Affiliate
and Related Person Proceeds to redeem up to $66.0
million in aggregate principal amount of 2007
Notes at 110.5% of the stated principal amount
thereof, together with accrued interest. See
"Description of Senior Subordinated Notes Due
2007--Optional Redemption." In addition, the
Company may be required to offer to repurchase
the 2007 Notes upon the occurrence of a Change of
Control or upon certain Asset Dispositions. See
"Description of Senior Subordinated Notes Due
2007--Change of Control" and " --
Covenants--Limitation on Certain Asset
Dispositions." The Credit Facility prohibits the
repayment of all or any portion of the principal
amount of the 2007 Notes prior to the repayment
of all indebtedness under the Credit Facility.
Sinking Fund .............. The 2007 Notes are not entitled to any sinking
fund.
Change of Control ......... Upon a Change of Control, each Holder of 2007
Notes will have the right to have the Company
repurchase all or a portion of such Holder's 2007
Notes at a purchase price in cash equal to 101%
of the aggregate principal amount of the 2007
Notes plus accrued interest to but excluding the
Purchase Date. The Company will not be able to so
repurchase 2007 Notes without obtaining written
consents from or repaying the lenders under the
Credit Facility.
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Certain Covenants ......... The 2007 Notes Indenture contains limitations on,
among other things, (a) the Incurrence of
additional Indebtedness, (b) the issuance of
Preferred Stock by Restricted Subsidiaries, (c)
the making of Restricted Payments, (d) the
Incurrence of certain Liens, (e) certain Asset
Dispositions, (f) dividend and other payment
restrictions affecting Restricted Subsidiaries,
(g) the sale or issuance of a Wholly Owned
Restricted Subsidiary's Capital Stock, (h)
transactions with Affiliates and (i) certain
consolidations, mergers and transfers of assets.
See "Description of Senior Subordinated Notes Due
2007--Covenants."
For additional information regarding the 2007 Notes and for definitions
of certain capitalized terms used herein, see "Description of Senior
Subordinated Notes Due 2007."
RATIO OF EARNINGS TO FIXED CHARGES
Western Wireless Corporation was formed in July 1994 as the result of a
business combination (the "Business Combination") among various companies,
including Markets Cellular Limited Partnership d/b/a Pacific Northwest Cellular,
a Delaware limited partnership ("MCLP"), and General Cellular Corporation, a
Delaware corporation ("GCC"). GCC commenced operations in 1989 and MCLP was
formed in 1992. As a result of the Business Combination and a series of related
transactions, Western Wireless Corporation became the owner of all of the assets
of MCLP. Accordingly, all financial data relating to the Company herein with
respect to periods after the date of the Business Combination reflect the
combined operations of GCC and MCLP and all such data with respect to prior
periods reflect only the operations of GCC, which, for accounting purposes, is
considered Western Wireless Corporation's predecessor. Accordingly, the
financial data of the Company for the periods subsequent to the Business
Combination are not comparable to financial data for prior periods. See Note 12
to the Company's consolidated financial statements incorporated herein for pro
forma information presenting the results of operations of the Company as if the
Business Combination occurred on January 1, 1994.
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------------------------------
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Ratio of earnings
to fixed charges (1) * * * * 2.22
</TABLE>
- --------
* Not meaningful
(1) The ratio of earnings to fixed charges is determined by dividing the sum
of earnings (loss) before extraordinary items, interest and financing
expense, amortization of deferred financing costs and the portion of
rents representative of the interest factor by fixed charges. Fixed
charges consist of the sum of interest and financing expense,
amortization of deferred financing costs, capitalized interest and the
portion of rents representative of the interest factor. The ratio of
earnings to fixed charges is not meaningful for periods that result in a
deficit. For the periods indicated above, earnings were inadequate to
cover fixed charges and the deficiencies of earnings to fixed charges
were $269.5 million, $135.3 million, $49.7 million and $26.0 million for
the years ended December 31, 1997, 1996, 1995 and 1994, respectively.
9
<PAGE> 11
RISK FACTORS
In addition to the other information contained in this Prospectus, the
following should be considered carefully in evaluating the Company and an
investment in the Class A Common Stock, the 2006 Notes or the 2007 Notes.
HIGH LEVERAGE; DEBT SERVICE; RESTRICTIVE COVENANTS
The Company is, and will continue to be, highly leveraged and subject to
significant financial restrictions and limitations. As of December 31, 1997, the
Company's total indebtedness was $1,395 million or approximately 87.8% of its
total capitalization. Indebtedness under the Credit Facility and the $300
million credit facility (the "PCS Vendor Facility" and, together with the Credit
Facility, the "Senior Secured Facilities") of a subsidiary of the Company with a
consortium of lenders matures on March 31, 2006 and December 31, 2003,
respectively, and bears interest at variable rates. Substantially all the assets
of the Company are pledged as security for such indebtedness. The $200 million
principal amount of each of the 2006 Notes and the 2007 Notes bear interest at
10-1/2% and mature on June 1, 2006, and February 1, 2007, respectively.
For the year ended December 31, 1997, the Company had negative ratios of
earnings to fixed charges and earnings coverage deficiencies of approximately
$269.5 million. There can be no assurance that the Company will generate
sufficient cash flow from operating activities to meet its debt service and
working capital requirements. In such event, the Company may need to seek
additional financing. There can be no assurance that any such financing or
refinancing could be obtained on terms that are acceptable to the Company. In
the absence of such financing or refinancing, the Company could be materially
limited in its ability to build out its existing cellular and PCS systems or be
forced to dispose of assets in order to make up for any shortfall in the
payments due on its indebtedness under circumstances that might not be favorable
to the realization of the highest price for such assets. Given that a
substantial portion of the Company's assets consists of intangible assets,
principally licenses granted by the FCC, the value of which will depend upon a
variety of factors (including the success of the Company's PCS and cellular
businesses and the wireless communications industry in general), there can be no
assurance that the Company's assets could be sold quickly enough, or for
sufficient amounts, to enable the Company to meet its obligations.
Over the next year, the Company currently anticipates spending
approximately $260 to expand the initial build-out of its PCS MTA systems and
to complete construction of the initial build-out of the Seattle and
Phoenix/Tucson BTA systems. In addition, further funds will be required to
finance the continued growth of its cellular and PCS operations (which may be
significant), provide for working capital, and service debt. The Company will
utilize cash on hand and amounts available for borrowing under the Credit
Facility for such purposes. At December 31, 1997, the amount available for
borrowings under the Credit Facility was $239 million and the total unused
portion of the Credit Facility was $255 million. To the extent that the
build-out of the PCS systems is faster than expected, the costs are greater than
anticipated or the Company takes advantage of acquisition opportunities,
including those that may arise through the reauction of MTAs or BTAs by the FCC,
the Company may require additional funding to implement its business strategy.
The Company continues to consider additional sources of funding to meet those
potential needs which may include the issuance of additional indebtedness or the
sale of additional equity. There can be no assurance that the Company will be
able to obtain such financing on acceptable or favorable terms and in adequate
amounts to accomplish its objectives.
The Senior Secured Facilities, the 2006 Notes Indenture and the 2007
Notes Indenture contain, and any additional financing agreements may contain,
certain restrictive covenants. The Senior Secured Facilities, the 2006 Notes
Indenture and the 2007 Notes Indenture require the Company to comply with
certain financial and operational performance covenants, and, while the Company
expects to remain in compliance with such covenants, there can be no assurance
to that effect. The restrictions contained in the Senior Secured Facilities, the
2006 Notes Indenture and the 2007 Notes Indenture affect, and in some cases will
significantly limit or prohibit, among other things, the ability of the Company
to incur indebtedness, make prepayments of certain indebtedness, pay dividends,
make investments, create
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liens, sell assets and engage in mergers and consolidations. In addition to such
covenants, the Credit Facility requires the Company to maintain certain
financial ratios. The financial ratio covenants in the Credit Facility include,
among others, a limitation on the incurrence of indebtedness based on the ratio
of the Company's indebtedness to operating cash flow (as defined in the Credit
Facility) and a requirement that the Company's ratio of operating cash flow to
cash interest expense be not less than specified levels. The PCS Vendor Facility
contains, among others, covenants of Western PCS II Corporation, a subsidiary of
the Company and the borrower thereunder, relating to minimum gross revenues and
the ratio of cash coverage (as defined in the PCS Vendor Facility) to operating
cash flow (as defined in the PCS Vendor Facility). Each of the 2006 Notes
Indenture and the 2007 Notes Indenture contains a limitation, among others, on
the incurrence of indebtedness based on the ratio of the Company's indebtedness
to EBITDA (as defined herein). See "Description of Senior Subordinated Notes Due
2006" and "Description of Senior Subordinated Notes Due 2007" for a more
detailed description of the restrictive covenants and other terms of the 2006
Notes Indenture and the 2007 Notes Indenture. An event of default under the
Senior Secured Facilities, the 2006 Notes Indenture, or the 2007 Notes Indenture
would allow the acceleration of the maturities of the indebtedness thereunder.
In such event, it is likely that all of the Company's indebtedness would become
immediately due and payable. See "Description of Senior Subordinated Notes Due
2006" and "Description of Senior Subordinated Notes Due 2007."
PAST AND FUTURE OPERATING LOSSES AND NEGATIVE CASH FLOW
The Company sustained operating losses of approximately $159.7 million
(including $196.9 million of losses attributable to the Company's PCS
operations), $86.9 million (including $81.8 million of losses attributable to
the Company's PCS operations) and $23.9 million (including $3.7 million of
losses attributable to the Company's PCS operations) for the years ended
December 31, 1997, 1996 and 1995, respectively. At December 31, 1997, the
Company had an accumulated deficit of $479.8 million. The Company expects to
incur significant operating losses and to generate negative cash flow from
operating activities during the next several years, while it develops and
constructs its PCS systems and builds a PCS subscriber base. There can be no
assurance that the Company will achieve or sustain profitability or positive
cash flow from operating in the future or that it will generate sufficient cash
flow to service its debt requirements. See " -- High Leverage; Debt Service;
Restrictive Covenants."
COMPETITION
Competition for subscribers among wireless licensees is based
principally upon the services and enhancements offered, the technical quality of
the system, customer service, system coverage, capacity and price. In the
future, the Company expects to face increased competition from entities
providing similar services using other communications technologies and services.
While some of these technologies and services are currently operational, others
are being developed or may be developed in the future. The Company's PCS
business in markets in which it operates faces competition from providers of
cellular service and from other providers of PCS services as they enter such
markets. Under current FCC rules, there may be up to six PCS licenses granted in
each geographic area in addition to the two existing cellular licenses. Also,
the FCC has licensed Specialized Mobile Radio ("SMR") dispatch system operators
to construct digital mobile communications systems on existing SMR frequencies,
referred to as Enhanced Specialized Mobile Radio ("ESMR"), in many cities
throughout the United States, including some of the markets in which the Company
operates. ESMR systems, including those operated by Nextel Communications, Inc.,
are competitive with the Company's cellular and PCS systems. The Company has one
cellular competitor in each of its cellular markets, including AirTouch Cellular
Communications, Inc. ("AirTouch"), Aliant Communications, Inc. ("Aliant"),
CommNet Cellular, Inc. ("CommNet"), Kansas Cellular, Southwestern Bell Mobile
Systems ("Southwestern Bell") and United States Cellular Corporation ("US
Cellular"), and there will be up to six PCS licensees in each of its markets.
The Company's principal competitors in its PCS business are PCS PrimeCo L.P.
("PrimeCo"), Sprint Spectrum L.P. ("Sprint Spectrum") and AT&T Wireless
Services, Inc. ("AT&T Wireless"), as well as the two existing cellular providers
in its PCS markets. These cellular competitors include AT&T Wireless, US
Cellular and AirTouch. The Company also competes with paging, dispatch and
conventional mobile telephone companies, resellers and landline telephone
service providers. Competition in the markets in which the Company competes is
intense. Given the rapid advances in the wireless communications
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industry, there can be no assurance that new technologies will not evolve that
will compete with the Company's products and services. In addition, a number of
the Company's competitors have substantially greater financial, technical,
marketing, sales, manufacturing and distribution resources than those of the
Company and have significantly greater experience than the Company in testing
new or improved communications products and services and obtaining regulatory
approvals. Some competitors are expected to market other services, such as
landline telephone and cable services, with their wireless communications
service offerings. Several of the Company's competitors are operating, or
planning to operate, through joint ventures and affiliation arrangements,
wireless communications systems that encompass most of the continental United
States. See " -- Absence of PCS Operating History in the United States; Handset
Availability" and " -- Risks Relating to GSM Technical Standard."
RISKS RELATING TO GSM TECHNICAL STANDARD
When the FCC first licensed cellular systems in the United States, it
specified the technical standards of analog cellular system operation to ensure
nationwide compatibility between all analog cellular carriers. In contrast, the
FCC has not mandated the technology standard for digital cellular or PCS
operations, leaving each licensee free to select among several competing
technologies that have sufficient technological differences to preclude their
interoperability. The Company has deployed the GSM technical standard in its PCS
markets and believes that GSM offers the Company significant advantages over the
other competing technologies. There are, however, certain risks with respect to
the deployment of GSM.
The Company, together with the other MTA and BTA PCS licensees who have
announced their intent to deploy GSM-based systems, collectively will cover
markets containing approximately 260 million persons, representing approximately
98% of the U.S. population. PCS licensees in several markets adjacent to the
Company's PCS markets have initiated PCS service utilizing the GSM standard. In
order for the Company's PCS subscribers to roam in other markets, and vice
versa, at least one PCS licensee in the other market must utilize the GSM
standard, or the subscribers must use dual-mode handsets that would permit the
subscriber to use the cellular system in the other market. Dual-mode handsets
which would permit such usage while currently commercially available may not be
available in adequate supply until the first half of 1998 and will be more
expensive than single-mode handsets. The lack of interoperability, or the
comparatively higher cost or the potential lack of consumer acceptance of such
handsets may impede the Company's ability to retain current cellular subscribers
or attract potential new wireless communications subscribers. There can be no
assurance that PCS licensees who have announced their intent to deploy GSM-based
systems will build out their respective markets, and, accordingly, GSM-based
systems may cover less than 98% of the U.S. population. See " -- Absence of PCS
Operating History in the United States."
The Company's principal PCS competitors have committed to standards
other than GSM and, as a result, without PCS handsets that can access both GSM
and competing systems, there is a risk that customers of the Company's PCS
services may not be able to conveniently use PCS services while roaming in
certain geographic areas outside the Company's PCS markets. PrimeCo and Sprint
Spectrum have deployed PCS systems based on a Code Division Multiple Access
("CDMA") standard. AT&T Wireless and Southwestern Bell have deployed systems
based on the Time Division Multiple Access ("TDMA") standard. It is estimated
that together, CDMA-based PCS providers, including competitors in several of the
Company's markets, own licenses covering approximately 100% of the U.S.
population (based on 1990 U.S. Census Bureau figures used by the FCC for auction
purposes) and AT&T Wireless and Southwestern Bell, with their TDMA standard, own
PCS licenses which contain approximately 94% of the U.S. population (based on
1990 U.S. Census Bureau figures used by the FCC for auction purposes). Licensees
in the FCC's completed C, D, E & F Block auctions of PCS licenses may or may not
select GSM technology; certain purchasers of licenses in such auctions have
announced their intention not to utilize the GSM standard in such markets.
Accordingly, certain major metropolitan areas will not be served by GSM-based
PCS systems. The Company's ability to establish a PCS subscriber base and to
compete successfully in the PCS business with those operators offering greater
roaming capabilities may be adversely affected by the fact that the Company's
PCS subscribers will only be able
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to roam into regions served by GSM-based PCS systems until dual-mode handsets
permitting them to use the existing cellular system become widely-available.
ABSENCE OF PCS OPERATING HISTORY IN THE UNITED STATES
PCS systems have limited operating history in the United States and
there can be no assurance that these businesses will become profitable. In
addition, the extent of potential demand for PCS in the Company's markets cannot
be estimated with any degree of certainty. The inability of the Company to
establish PCS services or to obtain appropriate equipment for the PCS business
could have a material adverse effect on the Company.
INTELLECTUAL PROPERTY AND BRANDING
The Company currently uses the registered service mark CELLULAR ONE to
market its cellular services. The Company's use of this service mark is governed
by five-year contracts between the Company and Cellular One Group, the owner of
the service mark. Each of these agreements may be renewed at the Company's
option for three additional five-year terms. Under these agreements, the Company
has agreed to meet operating and service quality standards for its cellular
service areas. If these agreements were not renewed upon expiration or if the
Company were to fail to meet the applicable operating or service quality
standards, and, therefore, were no longer permitted to use the CELLULAR ONE
service mark, the Company's ability to attract new subscribers and retain
existing subscribers could be materially impaired. AT&T Wireless, which had been
the single largest user of the CELLULAR ONE brand name, has reduced its use of
the brand as a primary service mark. In addition, if for some reason beyond the
Company's control the name CELLULAR ONE were to suffer diminished marketing
appeal, the Company's ability both to attract new subscribers and retain
existing subscribers could be materially impaired. In such circumstances or
otherwise, the Company may explore development or acquisition of a new service
mark.
The Company currently uses its VoiceStream registered service mark to
market its PCS services in all of its PCS markets. There can be no assurance
that such registration will provide any meaningful benefit to the Company.
Competitors of the Company possess, and others may develop over time, branding
with significantly greater name recognition than that of the Company. A failure
by the Company to maintain existing rights to its current cellular branding, to
successfully develop value in its VoiceStream mark or to develop suitable
alternatives thereto would have a material adverse effect on the Company's
ability to market its products and services and could require the Company to
invest significant additional funds to develop such alternatives.
HOLDING COMPANY STRUCTURE; SUBORDINATION
Substantially all of the Company's assets and operations are held by or
conducted through subsidiaries and, to that extent, the Company is effectively a
holding company. The Company relies on dividends, loan repayments and other
intercompany cash flows from its subsidiaries to generate the funds necessary to
meet its debt service obligations, including the payment of principal, premium,
if any, and interest on the Senior Subordinated Notes. The payment of dividends
and the making and repayment of loans and advances by the Company to its
subsidiaries are subject to statutory, contractual and other restrictions, are
dependent upon the earnings of such subsidiaries and are subject to various
business considerations. In addition, the Senior Subordinated Notes are
effectively subordinated to all existing and future indebtedness and other
liabilities of the Company's subsidiaries. As of December 31, 1997, the total
outstanding indebtedness of the Company's subsidiaries not eliminated in the
Company's consolidated financial statements was approximately $300.0 million.
Moreover, claims of creditors of the Company's subsidiaries, including tax
authorities and trade creditors, will generally have a priority claim to the
assets of such subsidiaries over the claims of the Company and the holders of
indebtedness of the Company, including holders of the Senior Subordinated Notes.
See "Description of Senior Subordinated Notes Due 2006" and "Description of
Senior Subordinated Notes Due 2007."
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PCS BUILD-OUT AND CAPITAL EXPENDITURES
The Company currently operates PCS systems in the Honolulu, Salt Lake
City, El Paso/Albuquerque, Portland, Oklahoma City, Des Moines/Quad Cities and
Denver MTAs. The Company's 30 MHz PCS licenses are subject to a requirement that
the Company construct network facilities that offer coverage to at least
one-third of the population in the relevant MTA by June 2000, five years from
the grant of the license (the "Five-Year Build-out Requirement"), and to at
least two-thirds of the population by June 2005, 10 years from the grant of the
license (the "10-Year Build-out Requirement"). In each of the Honolulu, Salt
Lake City, El Paso/Albuquerque, Portland, Oklahoma City, Des Moines/Quad Cities
and Denver MTAs, the Company currently has sufficient coverage to satisfy the
Five-Year Build-out Requirement. The Company anticipates that its build-out in
all of its MTA markets, if completed as currently planned by the end of 1998,
will satisfy the 10-Year Build-out Requirement. The Company's 10 MHz PCS
licenses are subject to a requirement that the Company construct network
facilities that offer coverage to at least one-quarter of the population in
their relevant BTA within five years of being licensed, or make a showing of
substantial service in their relevant BTA within five years of being licensed.
Should the Company fail to meet these coverage requirements, it may be subject
to forfeiture or nonrenewal of the license or the imposition of fines by the
FCC. The PCS build-out in each MTA is subject to successful completion of the
network design, site and facility acquisitions, the purchase and installation of
the network equipment, network testing and satisfactory accommodation of
microwave users currently using the spectrum. Delays in any of these areas could
have a material adverse effect on the Company's ability to complete the
build-out in a timely manner.
The successful build-out of additional PCS systems by the Company will
depend to a significant degree upon the Company's ability to lease or acquire
appropriate sites for the location of its base station equipment. The Company
has begun the site selection and acquisition process for certain additional PCS
systems. The site selection process will require the continued successful
negotiation of use agreements for or acquisitions of numerous additional sites,
and may require the Company to obtain zoning variances or other governmental or
local regulatory approvals, which are beyond the Company's control. Delays in
the site selection process, as well as construction delays and other factors,
could adversely affect the timing of the commencement of commercial service in
such additional PCS systems. See " -- Relocation of Fixed Microwave Licensees."
Over the next year, the Company currently anticipates spending
approximately $260 million to expand the initial build-out of its PCS MTA
systems and to complete the initial build-out of the Seattle and Phoenix/Tucson
BTA systems. In addition, further funds will be required to finance the
continued growth of its cellular and PCS operations (which may be significant),
provide for working capital, and service debt. The Company will utilize cash on
hand and amounts available for borrowing under the Credit Facility for such
purposes. The build-out of additional PCS systems by the Company will require
substantial additional funds and the capital cost of completing the project in
any particular MTA or BTA and overall could vary materially from such estimates.
If adequate funds are not available from its existing capital resources, the
Company may be required to curtail its service operations or to obtain
additional funds on terms less favorable than those contained in the Company's
current arrangements.
In addition, the implementation of the PCS build-out plan is subject to
the availability from suppliers of the infrastructure equipment and subscriber
equipment the Company plans to use. Accordingly, there are risks associated with
the completion of development, timely manufacture and successful implementation
of newly developed wireless equipment in the build-out of the Company's PCS
systems. The Company has entered into agreements for the supply of
infrastructure equipment with Northern Telecom Inc. ("NORTEL"), Nokia
Telecommunications Inc. (together with its affiliate, Nokia Mobile Phones, Inc.,
"Nokia") and Lucent Technologies Inc. ("Lucent Technologies").
RELOCATION OF FIXED MICROWAVE LICENSEES
For a period of up to ten years after the grant of a PCS license
(subject to extension), a PCS licensee will be required to share spectrum with
existing licensees that operate certain fixed microwave systems, which exist
within each of the Company's MTAs and BTAs. To secure a sufficient amount of
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unencumbered spectrum to operate its PCS systems efficiently, the Company may
need to negotiate agreements to relocate many of these existing licensees. In
such places where relocation is necessary to permit operation of the Company's
PCS systems, any delay in the relocation of such licensees may adversely affect
the Company's ability to commence timely commercial operation of its PCS
systems. In an effort to balance the competing interests of existing microwave
users and newly authorized PCS licensees, the FCC has adopted (i) a transition
plan to relocate such microwave operators to other spectrum blocks and (ii) a
cost sharing plan so that if the relocation of an incumbent benefits more than
one PCS licensee, the benefitting PCS licensees will share the costs of the
relocation. In the case of A and B Block PCS license holders, this transition
plan allows most microwave users to operate in the PCS spectrum for a two-year
voluntary negotiation period and an additional one-year mandatory negotiation
period. For public safety entities dedicating a majority of their system
communications for police, fire or emergency medical services operations, the
voluntary negotiation period is three years, with a two-year mandatory
negotiation period. Parties unable to reach agreement within these time periods
may refer the matter to the FCC for resolution, but the existing microwave user
is permitted to continue its operations until final FCC resolution of the
matter. The transition and cost sharing plans expire on April 4, 2005 for A and
B Block licenses, at which time remaining incumbents in the PCS spectrum will be
responsible for their costs to relocate to alternate spectrum locations. The FCC
has shortened the voluntary negotiation period to one year (for non-public
safety entities) for all Blocks other than A and B. There can be no assurance
that the Company will be successful in reaching timely agreements with the
existing microwave licensees or that any such agreements will be on terms
favorable to the Company. Further, depending on the terms of such agreements,
the Company's ability to operate its PCS systems profitably may be adversely
affected.
GOVERNMENTAL REGULATION
The licensing, construction, operation, acquisition and sale of cellular
and PCS systems, as well as the number of cellular and other wireless licensees
permitted in each market, are regulated by the FCC. Changes in the regulation of
such activities, such as a decision by the FCC to issue new licenses or permit
more than two licenses in each market for cellular communications services,
could have a material adverse effect on the Company's operations. The FCC is
currently conducting an auction of spectrum in other frequency bands which could
potentially be used for wireless communications. In addition, all cellular
licenses in the United States, including the Company's licenses, were granted
for an initial 10-year term and are subject to renewal. Licenses may be revoked
by the FCC at any time for cause. The Company has approximately 35 cellular
licenses which will be subject to renewal in the next three years. While the
Company believes that each of its cellular licenses will be renewed based upon
FCC rules establishing a presumption in favor of licensees that have provided
"substantial" service during their past license term and have substantially
complied with their regulatory obligations during the initial license period,
there can be no assurance that all of the Company's cellular licenses will be
renewed.
All PCS licenses are granted for a 10-year period, at the end of which
period the licensee must apply for renewal. Licenses may be revoked by the FCC
at any time for cause. All 30 MHz broadband PCS licenses, including those of the
Company, are subject to the Five-Year Build-out Requirement and the 10-Year
Build-out Requirement. While the Company believes that each of its PCS licenses
will be renewed based upon FCC rules establishing a presumption in favor of
licensees that have provided "substantial" service during the past license term
and have substantially complied with their regulatory obligations during the
initial license period, there can be no assurance that all of the Company's PCS
licenses will be so renewed. See " -- PCS Build-out and Capital Expenditures."
The Company also must obtain a number of approvals, licenses and permits
in the operation of its business, including authorizations from the Federal
Aviation Administration (the "FAA") in connection with cellular and PCS towers.
Additionally, the wireless communications industry is subject to certain state
and local governmental regulation. Operating costs are also affected by other
governmental actions that are beyond the Company's control. There is no
assurance that the various federal, state and local agencies responsible for
granting such licenses, approvals and permits will do so or that, once granted,
will not revoke or fail to renew them. The absence of such licenses, approvals
and permits would
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adversely affect existing operations and could delay commencement of or prohibit
certain business operations proposed by the Company.
Because the Company has controlling interests in cellular markets that
overlap the Denver MTA and the Oklahoma City MTA, the Company must comply with
FCC rules that limit the aggregate amount of cellular and PCS spectrum that a
single entity may own or control in a given territory. Current rules would
require divestiture of certain cellular or PCS holdings. However, pending
administrative challenges may result in additional compliance options.
The wireless communications industry also is subject to continually
evolving regulation. There are a number of issues on which modification to
existing regulation or new regulation has been or in the future may be
suggested, including the effect of wireless communications equipment on medical
equipment and devices, electromagnetic interference and cancer, as well as
interference between types of wireless systems. As new regulations are
promulgated on these subjects or other subjects, the Company may be required to
modify its business plans or operations in order to comply with any such
regulations. There can be no assurance that the Company will be able to do so in
a cost effective manner, if at all. See " -- Radio Frequency Emission Concerns;
Medical Device Interference."
RADIO FREQUENCY EMISSION CONCERNS; MEDICAL DEVICE INTERFERENCE
Media reports have suggested that certain radio frequency ("RF")
emissions from wireless handsets may be linked to various health concerns,
including cancer, and may interfere with various electronic medical devices,
including hearing aids and pacemakers. Concerns over RF emissions may have the
effect of discouraging the use of wireless handsets, which could have an adverse
effect upon the Company's business. On August 1, 1996, the FCC updated the
guidelines and methods it uses for evaluating RF emissions from radio equipment,
including wireless handsets. While the update imposes more restrictive standards
on RF emissions from lower power devices such as wireless handsets, it is
believed that all wireless handsets currently marketed by the Company and in use
by the Company's subscribers already comply with the new proposed standards.
Petitions for reconsideration of rules and requests to stay the effective date
of the rules are pending.
Certain interest groups have requested that the FCC investigate claims
that the GSM technology poses health concerns and causes interference with
hearing aids and other medical devices. The Center for the Study of
Electromagnetic Compatibility at the University of Oklahoma, which was founded
in 1994 with funds from the wireless industry, is studying this issue and
recently released its findings with respect to the first phase of its study.
Such phase of the study, which was designed to examine extreme conditions, found
that digital technologies cause interference with hearing aids in certain
instances. In addition, the Personal Communications Industry Association
("PCIA") announced in July 1995 that it was undertaking an industry-wide study
to gather information on possible PCS interference with medical devices for all
PCS standards. There can be no assurance that the findings of such studies will
not have an adverse effect on the Company's business (including its use of GSM
technology) or that such findings will not lead to governmental regulations that
will have an adverse effect on the Company's business.
FINALITY OF PCS AUCTIONS
All of the MTA PCS licenses, including those of the Company, and most of
the BTA PCS licenses auctioned under the C Block, have been awarded by the FCC
and the holders of the licenses are permitted to construct their PCS systems and
commence operations. The Orders granting the Company the A and B Block licenses
and Cook Inlet PCS the C Block licenses are final and non-appealable.
Nevertheless, there are certain unresolved actions before the FCC following
remand by a federal court challenging the validity of certain spectrum
aggregation limits which affected eligibility for the auction. As a result of
the challenges, although it currently appears unlikely, the Company could lose
its PCS licenses or have adverse conditions imposed on them, and in such event
the loss resulting from any adverse conditions or, in the case of license
revocation, from its costs and expenses in bidding for and obtaining the
licenses and in beginning the site acquisition and build-out for its PCS systems
could have a material adverse effect on the Company.
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CONTROL BY MANAGEMENT AND EXISTING SHAREHOLDERS; ANTI-TAKEOVER EFFECT OF DUAL
CLASSES OF COMMON STOCK; CERTAIN CHARTER PROVISIONS AND WASHINGTON LAW
Holders of Class A Common Stock are entitled to one vote per share and
holders of Class B Common Stock are entitled to ten votes per share. Each share
of Class B Common Stock is convertible at any time into one share of Class A
Common Stock. As of December 31, 1997, John W. Stanton and Theresa E.
Gillespie, the Company's Chairman and Chief Executive Officer, and Senior Vice
President, respectively, and certain other holders of shares of Class B Common
Stock who are parties to an agreement (the "Shareholders Agreement"),
beneficially own 330,243 shares of outstanding Class A Common Stock and
47,357,416 shares of outstanding Class B Common Stock, which represent
approximately 62.9% of the outstanding shares of Common Stock and 85.8% of the
combined voting power of the Common Stock. These shareholders have agreed to
vote their shares for each other's designees, subject to certain ownership
requirements, and are able to control the election of the entire Board of
Directors. Such voting control by such holders of Common Stock, and certain
provisions of Washington law affecting acquisitions and business combinations,
which have been incorporated by the Company into its Articles of Incorporation,
may discourage certain transactions involving an actual or potential change of
control of the Company, including transactions in which the holders of Class A
Common Stock might receive a premium for their shares over the then-prevailing
market price, and may have a depressive effect on the market price for Class A
Common Stock.
DEPENDENCE UPON KEY PERSONNEL
The Company will be dependent to a large degree on the services of Mr.
Stanton, as Chairman of the Board and Chief Executive Officer, and other current
members of management. The Company and Mr. Stanton have entered into an
employment agreement which provides that Mr. Stanton's employment may be
terminated at any time by the Company, specifies base compensation of $190,000
per year with a targeted annual bonus of 100% of the base compensation, as
determined by the Board of Directors. The Board of Directors may, in its
discretion, increase Mr. Stanton's compensation, either permanently or for a
limited period, if the Board of Directors shall deem it advisable in order to
fairly compensate Mr. Stanton for the value of his services. Severance is
payable under the agreement in the event Mr. Stanton's employment with the
Company is involuntarily terminated for other than Cause (as defined in the
agreement) in an amount equal to any accrued targeted bonus through the date of
termination, 12 months base salary and 12 months annual targeted bonus. The
Company will also make specified insurance benefit payments on behalf of Mr.
Stanton and his dependents for 12 months following involuntary termination. In
addition, in such event unvested stock options become vested in accordance with
a schedule provided in the agreement; however, Mr. Stanton currently holds no
stock options. In the event of a voluntary termination or a termination for
Cause, no severance is payable by the Company. In addition, the agreement
provides that during the term of the agreement and for one year following the
termination of Mr. Stanton's employment for any reason, Mr. Stanton may not
engage in a business which is substantially the same as or similar to the
business of the Company; provided, that such prohibition shall not preclude Mr.
Stanton's investment in other companies engaged in the wireless communications
business or his ability to serve as a director of other companies in the
wireless communications business, in each case subject to his fiduciary
obligations as a director of the Company.
Loss of the services of Mr. Stanton or other members of management could
have a material adverse effect on the business of the Company and qualified
replacements may be difficult or impossible to find or retain. An event of
default under the Credit Facility would occur if Mr. Stanton (or a suitable
replacement) ceases, for any reason, to be the Chairman of the Company's Board
of Directors.
SEASONALITY
The Company, and the wireless communications industry in general, have
historically experienced significant subscriber growth during the fourth
calendar quarter. Accordingly, during such quarter the Company experiences
greater losses on equipment sales and increases in sales and
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marketing expenses. The Company has historically experienced highest usage and
revenue per subscriber during the summer months. The Company expects these
trends to continue.
POSSIBLE VOLATILITY OF PRICE OF CLASS A COMMON STOCK
The market price of the Class A Common Stock may be extremely volatile.
Factors such as fluctuations in the valuation of wireless licenses, results of
future FCC auctions, acquisitions by the Company, significant announcements by
the Company and its competitors, quarterly fluctuations in the Company's
operating results and general conditions in the communications market may have a
significant impact on the market price of the Class A Common Stock. In addition,
in recent years the stock market has experienced extreme price and volume
fluctuations. These fluctuations have had a substantial effect on the market
prices for many high technology and communications companies, often unrelated to
the operating performance of the specific companies. The underwriters of the
Company's initial public offering of Class A Common Stock have informed the
Company that, subject to applicable laws and regulations, they intend to
continue to make a market in the Class A Common Stock. They are not obligated to
do so, however, any such market-making may be discontinued at any time without
notice. Moreover, because of the affiliation of Goldman, Sachs & Co. with the
Company, Goldman, Sachs & Co. is required to deliver a current prospectus and
otherwise comply with the requirements of the Securities Act in connection with
any secondary market sale of the Class A Common Stock, which may affect their
ability to continue market-making activities. See "Plan of Distribution."
NO ASSURANCE OF PUBLIC MARKET FOR THE SENIOR SUBORDINATED NOTES; POSSIBLE
VOLATILITY OF PRICE OF SENIOR SUBORDINATED NOTES
The Company has not applied, and does not intend to apply, for listing
of the 2006 Notes or the 2007 Notes on any securities exchange or for the
inclusion of the 2006 Notes or the 2007 Notes in any automated quotation system.
Although the underwriters and the purchasers in the initial offerings of the
2006 Notes and the 2007 Notes, respectively, have informed the Company that,
subject to applicable laws and regulations, they intend to make a market in the
2006 Notes and the Exchange Notes, respectively, they are not obligated to do so
and any such market-making activities may be discontinued at any time without
notice. Moreover, because of the affiliation of Goldman, Sachs & Co. with the
Company, Goldman, Sachs & Co. is required to deliver a current prospectus and
otherwise comply with the requirements of the Securities Act in connection with
any secondary market sale of the 2006 Notes or the Exchange Notes, which may
affect their ability to continue market-making activities. See "Plan of
Distribution." Accordingly, there can be no assurance as to the liquidity of any
trading market for the 2006 Notes or the Exchange Notes or the ability of
holders to sell their 2006 Notes or Exchange Notes or the price at which such
holders may be able to sell their 2006 Notes or their Exchange Notes. The 2006
Notes and the Exchange Notes could trade at prices that may be higher or lower
than their initial offering price depending upon many factors, including
prevailing interest rates, the Company's operating results and the markets for
similar securities. Historically, the market for non-investment grade debt has
been subject to disruptions that have caused substantial volatility in the
prices of securities similar to the 2006 Notes and the Exchange Notes. There can
be no assurance that the trading markets for the 2006 Notes and the Exchange
Notes will not be subject to similar disruptions.
SHARES ELIGIBLE FOR FUTURE SALE
Sales of substantial amounts of Class A Common Stock in the public
market could adversely affect prevailing market prices. Shares sold in the
public offerings of Class A Common Stock are freely tradable in the public
market. Shares of Class B Common Stock are convertible at any time into shares
of Class A Common Stock on a one-for-one basis and such shares generally convert
automatically into Class A Common Stock upon a transfer. In addition to the
shares of Class A Common Stock sold by the Company and the Selling Shareholders
in the public offerings of Class A Common Stock and by certain shareholders
pursuant to Rule 144 or Rule 701, as of December 31, 1997, 53,431,163 additional
outstanding shares of Class A Common Stock (assuming the conversion of Class B
Common Stock into Class A Common Stock on a one-for-one basis) were eligible for
sale in the public market. Also, up to an aggregate of 5,849,297 shares of Class
A Common Stock, including an aggregate 4,703,275 shares issuable upon exercise
of outstanding stock options ("Option Shares"), and up to an aggregate of
1,000,000 shares of Class A Common Stock purchased under the Company's Employee
Stock Purchase Plan have been registered by the Company and are eligible for
resale in the public market at various times, depending upon when such shares
are actually issued, if at all. The Company is party to additional agreements
and management incentive plans which obligate it to issue additional shares of
Class A Common Stock which may become eligible for resale in the public market
at various times, depending upon when related vesting requirements are
satisfied, if at all, and whether such shares are registered for resale under
the Securities Act or whether and when such shares are subject to the resale
provisions of Rule 144 or Rule 701 under the Securities Act.
ABSENCE OF DIVIDENDS
The Company has never paid dividends on any of its Common Stock,
including its Class A Common Stock, and does not anticipate paying any such
dividends in the foreseeable future. In addition, the Senior Secured Facilities,
the 2006 Notes Indenture and the 2007 Notes Indenture contain restrictions on
the Company's ability to declare and pay dividends on any of its Common Stock,
including its Class A Common Stock. See "Description of Senior Subordinated
Notes Due 2006" and "Description of Senior Subordinated Notes Due 2007."
FORWARD-LOOKING STATEMENTS
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<PAGE> 20
Statements contained in this Prospectus that are not based on historical
fact, including without limitation statements containing the words "believes,"
"may," "will," "estimate," "continue," "anticipates," "intends," "expects" and
words of similar import, 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
materially different from any future results, events or developments expressed
or implied by such forward-looking statements. Such factors include, among
others, the following: general economic and business conditions, both nationally
and in the regions in which the Company operates; technology changes;
competition; changes in business strategy or development plans; the high
leverage of the Company; the ability to attract and retain qualified personnel;
existing governmental regulations and changes in, or the failure to comply with,
governmental regulations; liability and other claims asserted against the
Company; and other factors referenced in this Prospectus, including without
limitation under the captions "Prospectus Summary" and "Risk Factors." GIVEN
THESE UNCERTAINTIES, PROSPECTIVE INVESTORS ARE CAUTIONED NOT TO PLACE UNDUE
RELIANCE ON SUCH FORWARD-LOOKING STATEMENTS. The Company disclaims any
obligation to update any such factors or to publicly announce the result of any
revisions to any of the forward-looking statements contained herein to reflect
future results, events or developments.
USE OF PROCEEDS
The Company will not receive any of the proceeds from market-making
transactions.
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<PAGE> 21
DESCRIPTION OF SENIOR SUBORDINATED NOTES DUE 2006
The 2006 Notes have been issued under the 2006 Notes Indenture, dated as
of May 22, 1996, as amended and supplemented from time to time, by and between
the Company and Harris Trust Company of California, as Trustee (the "Trustee").
The following summary of the material terms and provisions of the 2006 Notes
reflects the terms of the 2006 Notes Indenture which the Company intends to
amend and supplement by a Supplemental Indenture to be entered into with the
Trustee on or prior to March 31, 1998 and does not purport to be complete and is
subject to and qualified in its entirety by reference to the 2006 Notes
Indenture, a copy of which is filed as an exhibit to the Registration Statement
of which this Prospectus is a part. Definitions relating to certain capitalized
terms in this "Description of Senior Subordinated Notes Due 2006" are set forth
under " -- Certain Definitions" and throughout this description. Capitalized
terms that are used but not otherwise defined herein have the meanings assigned
to them in the 2006 Notes Indenture and such definitions are incorporated herein
by reference. As used in this section, the "Company" refers to Western Wireless
Corporation, unless the context otherwise requires.
GENERAL
The 2006 Notes are unsecured obligations of the Company and are limited
in aggregate principal amount to $200,000,000. The 2006 Notes are senior
subordinated obligations of the Company, subordinated in right of payment to
Senior Indebtedness of the Company, including amounts outstanding under the
Credit Facility, and senior in right of payment to any current or future
subordinated indebtedness of the Company. The 2006 Notes rank pari passu with
$200.0 million aggregate principal amount of the 2007 Notes.
MATURITY, INTEREST AND PRINCIPAL
The 2006 Notes will mature on June 1, 2006. Interest on the 2006 Notes
accrues at a rate of 10-1/2% per annum and is payable semiannually on each June
I and December 1, commencing on December 1,1996, to the Holders of record on the
immediately preceding May 15 and November 15. Interest is computed on the basis
of a 360-day year of twelve 30-day months. The 2006 Notes are payable both as to
principal and interest at the office or agency of the Company maintained for
such purpose within the City and State of New York. Until otherwise designated
by the Company, the Company's office or agency in New York will be the office of
the Trustee maintained for such purpose.
All moneys paid by the Company to a paying agent for the payment of
principal of (and premium, if any) and any interest on any 2006 Notes which
remain unclaimed for two years after such principal (or premium, if any) or
interest has become due and payable may be repaid to the Company and thereafter
the Holder of such Senior Subordinated Notes may look only to the Company for
payment thereof.
FORM, EXCHANGE AND TRANSFER
The 2006 Notes have been and will be issued only in fully registered
form, without coupons, in denominations of $1,000 and any integral multiples
thereof.
At the option of the Holder, subject to the terms of the 2006 Notes
Indenture and the limitations applicable to Global Securities, 2006 Notes will
be exchangeable for other 2006 Notes of any authorized denomination and of a
like tenor and aggregate principal amount. See " -- Global Securities."
Subject to the terms of the 2006 Notes Indenture and the limitations
applicable to Global Securities, 2006 Notes may be presented for exchange as
provided above or for registration of transfer (duly endorsed or with the form
of transfer endorsed thereon duly executed) at the office of the Security
Registrar or at the office of any transfer agent designated by the Company for
such purpose. No service charge will be made for any registration of transfer or
exchange of 2006 Notes, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge imposed in connection therewith.
Such transfer or exchange will be effected upon the Security Registrar or such
transfer agent,
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<PAGE> 22
as the case may be, being satisfied with the documents of title and identity of
the person making the request. The Company has appointed the Trustee as Security
Registrar. The Company may at any time designate additional transfer agents or
rescind the designation of any transfer agent or approve a change in the office
through which any transfer agent acts, except that the Company will be required
to maintain a transfer agent in each place of payment for the 2006 Notes.
If the 2006 Notes are to be redeemed in part, the Company will not be
required to (i) issue, register the transfer of or exchange any 2006 Note during
a period beginning at the opening of business 15 days before the day of mailing
of notice of redemption of any such 2006 Note that may be selected for
redemption and ending at the close of business on the day of such mailing or
(ii) register the transfer of or exchange any 2006 Note so selected for
redemption, in whole or in part, except the unredeemed portion of any such 2006
Note being redeemed in part.
SUBORDINATION
The payment of the principal of and premium, if any, and interest on the
2006 Notes are, to the extent set forth in the 2006 Notes Indenture,
subordinated in right of payment to the prior payment in full of all Senior
Indebtedness. Upon any payment or distribution of assets to creditors upon any
liquidation, dissolution, winding up, reorganization, assignment for the benefit
or creditors, marshalling of assets or any bankruptcy, insolvency or similar
proceedings of the Company, the holders of all Senior Indebtedness will be
entitled to receive payment in full of all amounts due or to become due thereon
before the Holders of the 2006 Notes will be entitled to receive any Senior
Subordinated Notes Payment.
In the event that any Senior Payment Default shall have occurred and be
continuing, then no Senior Subordinated Notes Payment shall be made unless and
until such Senior Payment Default shall have been cured or waived.
In the event that any Senior Nonmonetary Default shall have occurred and
be continuing, then, upon the receipt by the Company and the Trustee of written
notice of such Senior Nonmonetary Default from a Person designated as an
administrative agent for the Designated Senior Indebtedness or, if there is no
outstanding Designated Senior Indebtedness, any holder of Senior Indebtedness,
no Senior Subordinated Notes Payment shall be made during the period (the
"Payment Blockage Period") commencing on the date of such receipt of such
written notice and ending on the earlier of (i) the date on which such Senior
Nonmonetary Default shall have been cured or waived or shall have ceased to
exist and any acceleration of Senior Indebtedness shall have been rescinded or
annulled or the Senior Indebtedness to which such Senior Nonmonetary Default
relates shall have been discharged or (ii) the 179th day after the date of such
receipt of such written notice. No more than one Payment Blockage Period may be
commenced with respect to the Senior Subordinated Notes during any 360-day
period and there shall be a period of at least 181 consecutive days in each
360-day period in which no Payment Blockage Period is in effect. For all
purposes of this paragraph, no Senior Nonmonetary Default that was known to the
holders of Senior Indebtedness to exist or be continuing on the date of
commencement of any Payment Blockage Period shall be, or be made, the basis for
the commencement of a subsequent Payment Blockage Period by an administrative
agent for the Designated Senior Indebtedness unless such Senior Nonmonetary
Default shall have been cured for a period of not less than 90 consecutive days.
By reason of such subordination, in the event of insolvency, creditors
of the Company who are not holders of Senior Indebtedness or of the Senior
Subordinated Notes may recover less, ratably, than holders of Senior
Indebtedness and may recover more, ratably, than the Holders of the Senior
Subordinated Notes.
At December 31, 1997, Senior Indebtedness aggregated approximately
$995.0 million. The Company expects from time to time to Incur additional
Indebtedness constituting Senior Indebtedness. The 2006 Notes Indenture does not
prohibit or limit the incurrence of additional Senior Indebtedness. In addition,
all existing and future indebtedness and other liabilities of the Company's
Subsidiaries are effectively senior in right of payment to the 2006 Notes. At
December 31, 1997, the total outstanding
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Indebtedness of the Company's Subsidiaries not eliminated in the Company's
consolidated financial statements was approximately $300.0 million.
OPTIONAL REDEMPTION
Prior to June 1, 2001, the 2006 Notes may be redeemed at any time at the
option of the Company, in whole or from time to time in part, at a redemption
price equal to the sum of (i) the principal amount of the 2006 Notes to be
redeemed together with accrued interest thereon to but excluding the date fixed
for redemption and (ii) the Make-Whole Amount, if any, with respect to the 2006
Notes or portion thereof being redeemed.
After June 1,2001, the 2006 Notes may be redeemed at any time at the
option of the Company, in whole or from time to time in part, at the following
redemption prices (expressed as percentages of principal amount), in each case
together with accrued interest to but excluding the date fixed for redemption,
if redeemed during the 12-month period beginning June 1 of each of the years
indicated below:
<TABLE>
<CAPTION>
YEAR REDEMPTION PRICE
---- ----------------
<S> <C>
2001...................... 105.25%
2002...................... 103.50%
2003...................... 101.75%
2004 and thereafter....... 100.00%
</TABLE>
Notwithstanding the previous two paragraphs, on or before June 1, 1998,
the Company may at its option, apply Qualified Capital Stock Proceeds and
Affiliate and Related Person Proceeds to redeem up to $66 million in aggregate
principal amount of Senior Subordinated Notes at 110.5% (expressed as a
percentage of principal amount) together with accrued interest to but excluding
the date fixed for redemption.
Notice of any optional redemption of any 2006 Notes (or portion thereof)
will be given to Holders at their addresses appearing in the Security Register,
not less than 30 nor more than 60 days prior to the date fixed for redemption.
The notice of redemption shall state the redemption date, the redemption price,
if less than all the outstanding 2006 Notes are to be redeemed, principal
amounts of the particular 2006 Notes to be redeemed, that on the redemption date
the redemption price will become due and payable upon each 2006 Note to be
redeemed and the place or places where such 2006 Notes are to be surrendered for
payment of the redemption price.
No sinking fund is provided for the 2006 Notes.
CHANGE OF CONTROL
Upon the occurrence of a Change of Control, each Holder of a 2006 Note
shall have the right to have such 2006 Note repurchased by the Company on the
terms and conditions set forth in the 2006 Notes Indenture. The Company shall,
within 30 days following the date of the consummation of a transaction resulting
in a Change of Control, mail an Offer to Purchase all outstanding 2006 Notes at
a purchase price equal to 101% of their aggregate principal amount plus accrued
interest to but excluding the Purchase Date. The Credit Facility precludes the
Company from making such an Offer to Purchase, and the Company will be required
to obtain written consents or waivers from the lenders under the Credit Facility
or repay Indebtedness under the Credit Facility in order to be able to make the
Offer to Purchase.
"Change of Control" means (i) directly or indirectly a sale, transfer or
other conveyance of all or substantially all the assets of the Company, 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 Exchange Act, whether or not
applicable), excluding transfers or conveyances to or among the Company's Wholly
Owned Restricted Subsidiaries, as an entirety or substantially as an entirety in
one transaction or series of related
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<PAGE> 24
transactions, in each case with the effect that any Person or group of Persons
that, as of the date of the 2006 Notes Indenture, 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, (ii) 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 2006 Notes Indenture,
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 the total Voting Power of the
Company or (iii) during any period of 24 consecutive months, individuals who at
the beginning of such period constituted the Board of Directors of the Company
(together with any new directors whose election by such Board or whose
nomination for election by the shareholders of the Company 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 the Board of Directors of the Company then in office.
The Company will comply with any tender offer rules under the Exchange
Act which may then be applicable, including Rule 14e-I thereunder, in connection
with any Offer to Purchase.
COVENANTS
LIMITATION ON CONSOLIDATED INDEBTEDNESS
The 2006 Notes Indenture prohibits the Company and any of its Restricted
Subsidiaries from Incurring any Indebtedness unless the Company's Indebtedness
to EBITDA Ratio at the end of the fiscal quarter immediately preceding the
Incurrence of such Indebtedness, after giving pro forma effect thereto, is less
than:
<TABLE>
<CAPTION>
FOR THE PERIOD RATIO
-------------- -----
<S> <C>
Prior to December 31, 1999................... 9 to 1; and
Thereafter................................... 7 to 1
</TABLE>
Notwithstanding the foregoing, the Company and its Restricted
Subsidiaries may Incur the following Indebtedness without regard to the
foregoing limitations:
(i) Indebtedness evidenced by the 2006 Notes or otherwise arising under
the 2006 Notes Indenture;
(ii) (A) Indebtedness of the Company or any Restricted Subsidiary (other
than Western PCS Corporation or any Restricted Subsidiary of Western PCS
Corporation), as the case may be, that is outstanding or committed at the date
of the 2006 Notes Indenture under the Credit Facility (including any letters of
credit issued thereunder), (B) Indebtedness of the Company or any Restricted
Subsidiary (including Western PCS Corporation or any Restricted Subsidiary of
Western PCS Corporation) under the PCS Vendor Facility, and (C) Indebtedness of
Western PCS Corporation or any Restricted Subsidiary of Western PCS Corporation
pursuant to one or more credit or financing facilities, the proceeds of which
are used for the general corporate purposes of Western PCS Corporation or any of
its Restricted Subsidiaries, and any renewal, extension, refinancing or
refunding of any thereof; provided, that (y) the aggregate principal amount of
the Indebtedness permitted under this clause (ii) does not exceed $950 million
at any time outstanding and (z) this clause (ii) shall not prohibit the Company
from Incurring additional Indebtedness under the Credit Facility or the PCS
Vendor Facility, or Western PCS Corporation or any of its Restricted
Subsidiaries from Incurring Indebtedness under any other credit or financing
facility of Western PCS Corporation, otherwise permitted pursuant to this
covenant;
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<PAGE> 25
(iii) Indebtedness of the Company or any Restricted Subsidiary that is
outstanding or committed prior to June 1, 1999 for the acquisition, construction
or improvement by the Company or any Restricted Subsidiary of assets in the
Wireless Communications Business; provided that the amount of such Indebtedness
at any time outstanding does not exceed 100% of the Fair Market Value of such
assets;
(iv) Indebtedness of the Company or any Wholly Owned Restricted
Subsidiary of the Company owing to the Company or any Wholly Owned Restricted
Subsidiary of the Company;
(v) Indebtedness of the Company or any Restricted Subsidiary to renew,
extend, refinance or refund any Indebtedness of the Company or any Restricted
Subsidiary outstanding or committed on the date of renewal, extension,
refinancing or refunding other than Indebtedness Incurred pursuant to clause
(ii) or (iv); 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 associated
therewith; provided, further, that (a) such renewing, extending, refinancing or
refunding Indebtedness shall have no mandatory repayments or redemptions prior
to the Indebtedness being renewed, extended, refinanced or refunded and (b) in
the case of any refinancing or refunding of Indebtedness pari passu to the 2006
Notes, the refinancing or refunding Indebtedness is made pari passu or
subordinated to the 2006 Notes and, in the case of any refinancing or refunding
of Indebtedness subordinated to the 2006 Notes, the refinancing or refunding
Indebtedness is made subordinate to the 2006 Notes to substantially the same
extent as the Indebtedness refinanced or refunded;
(vi) Indebtedness Incurred by the Company or any Restricted Subsidiary
under Interest Hedge Agreements to hedge permitted Indebtedness; and
(vii) Indebtedness of the Company or any Restricted Subsidiary that is
outstanding or committed prior to June 1, 1999, other than Indebtedness
permitted pursuant to clauses (i) through (vi) above, that does not exceed $50
million at any time outstanding or committed.
LIMITATION ON PREFERRED STOCK OF RESTRICTED SUBSIDIARIES
The 2006 Notes Indenture prohibits the Company from allowing any
Restricted Subsidiary of the Company to create or issue any Preferred Stock
except:
(i) Preferred Stock outstanding on the date of the 2006 Notes Indenture;
(ii) Preferred Stock issued to and held by the Company or any Wholly
Owned Restricted Subsidiary of the Company;
(iii) Preferred Stock issued by any Person prior to that Person's having
become a direct or indirect Restricted Subsidiary of the Company;
(iv) Preferred Stock issued by a Restricted Subsidiary the proceeds of
which are used to refinance outstanding Preferred Stock of a Restricted
Subsidiary, provided that (a) the liquidation value of the refinancing Preferred
Stock does not exceed the liquidation value so refinanced plus financing fees
and other expenses associated with such refinancing and (b) such refinancing
Preferred Stock has no mandatory redemptions prior to the Preferred Stock being
refinanced; and
(v) Preferred Stock issued by a Restricted Subsidiary with a
cumulative liquidation preference in an amount which could have been Incurred at
the time of such issuance as Indebtedness under the provision of the 2006 Notes
Indenture described under " -- Limitation on Consolidated Indebtedness."
LIMITATION ON CERTAIN ASSET DISPOSITIONS
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<PAGE> 26
The 2006 Notes Indenture prohibits the Company or any Restricted
Subsidiary from making any Asset Disposition in one or more related transactions
that result in aggregate net proceeds in excess of $10 million unless (i) the
consideration received at the time of such Asset Disposition is at least equal
to the Fair Market Value of the assets as determined by the Board of Directors
of the Company (which determination will be evidenced by a Board Resolution),
(ii) (A) at least 85% of the consideration received consists of cash or readily
marketable cash equivalents or the assumption of Indebtedness of the Company or
any Restricted Subsidiary or (B) so long as no Event of Default or event which
with notice or lapse of time would become an Event of Default has occurred and
is continuing, the consideration paid to the Company or such Restricted
Subsidiary is substantially comparable in type to the assets being sold as
determined by the Board of Directors of the Company (which determination will be
evidenced by a Board Resolution) and (iii) all the Net Available Proceeds shall
be applied (a) first, to the payment of Senior Indebtedness (or Indebtedness of
such Restricted Subsidiary, as the case may be) then outstanding; (b) second, to
make an Offer to Purchase any outstanding 2006 Notes at par value plus accrued
interest; and (c) third, to the repayment of other Indebtedness of the Company
or a Restricted Subsidiary. The Company will not be able to make an Offer
pursuant to clause (ii)(b) without obtaining written consents from or repaying
the lenders under the Credit Facility.
Notwithstanding clause (iii) of the preceding paragraph, the 2006 Notes
Indenture will not require the Company to repay Senior Indebtedness (or
Indebtedness of such Restricted Subsidiary) then outstanding, to make an Offer
to Purchase any outstanding 2006 Notes at par value or to repay any other
Indebtedness with the proceeds of any Asset Disposition to the extent that the
Net Available Proceeds from any Asset Disposition are invested within 365 days
of such Asset Disposition in assets or an entity in the Wireless Communications
Business or the Company or a Restricted Subsidiary shall have entered into a
binding agreement to invest in such assets or entity and such investment shall
have been consummated within eighteen months of such Asset Disposition.
For purposes of the foregoing, "Net Available Proceeds" means the
aggregate amount of cash (including any other consideration that is converted
into cash) received by the Company or a Restricted Subsidiary in respect of such
an Asset Disposition, less the sum of (i) all fees, commissions and other
expenses Incurred in connection with such Asset Disposition, including the
amount of income taxes required to be paid by the Company or a Restricted
Subsidiary in connection therewith and (ii) the aggregate amount of cash so
received which is used to retire any existing Indebtedness of the Company or a
Restricted Subsidiary which is required to be repaid in connection therewith.
LIMITATION ON RESTRICTED PAYMENTS
The 2006 Notes Indenture prohibits the Company or any Restricted
Subsidiary from making any Restricted Payment unless after giving effect thereto
(a) 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; (b) the Company
would be permitted to Incur an additional $1.00 of Indebtedness pursuant to the
provision of the 2006 Notes Indenture described in the first paragraph under "
- -- Limitation on Consolidated Indebtedness"; and (c) the total of all Restricted
Payments made on or after the date of the 2006 Notes Indenture does not exceed
the sum of (i) Cumulative EBITDA less 1.6 times Cumulative Interest Expense and
(ii) 100% of the aggregate Affiliate and Related Person Proceeds and Qualified
Capital Stock Proceeds of the Company after the date of the 2006 Notes
Indenture.
The foregoing provision shall not be violated by reason of (i) 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,
(ii) any refinancing of any Indebtedness otherwise permitted under the provision
of the 2006 Notes Indenture described under clause (ii) or (v) of " --
Limitation on Consolidated Indebtedness," (iii) Permitted Joint Venture
Investments, (iv) the payment of scheduled dividends on, or the redemption of,
Preferred Stock permitted to be created or issued pursuant to the provision of
the 2006 Notes Indenture described under " -- Limitation on Preferred Stock of
Restricted Subsidiaries" or (v) Restricted Payments, in addition to Restricted
Payments permitted pursuant to clauses (i) through (iv) above, not in excess of
$25 million in the aggregate after the date of the 2006 Notes Indenture.
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<PAGE> 27
LIMITATIONS CONCERNING DISTRIBUTIONS AND TRANSFERS BY RESTRICTED
SUBSIDIARIES
The 2006 Notes Indenture provides that the Company shall not, and shall
not permit any Restricted Subsidiary to, create or otherwise cause or suffer to
exist or become effective any consensual restriction or prohibition on the
ability of any Restricted Subsidiary to (i) 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 the Company or any
Restricted Subsidiary or pay any Indebtedness or other obligation owed to the
Company or any Restricted Subsidiary, (ii) make any loans or advances to the
Company or any Restricted Subsidiary or (iii) transfer any of its property or
assets to the Company or any Restricted Subsidiary. Notwithstanding the
foregoing, the Company may, and may permit any Restricted Subsidiary to, suffer
to exist any such restriction or prohibition (i) pursuant to any agreement in
effect on the date of the 2006 Notes Indenture, (ii) pursuant to an agreement
entered into after the date of the 2006 Notes Indenture relating to any
Indebtedness the Incurrence of which is permitted under the 2006 Notes
Indenture, provided, however, that the provisions contained in such agreement
relating to such encumbrance or restriction are no more restrictive in any
material respect than those contained in the PCS Vendor Facility, (iii) pursuant
to 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 the Company other than in anticipation of becoming a
Restricted Subsidiary or (iv) pursuant to an agreement effecting a renewal,
extension, refinancing or refunding of any agreement described in clauses (i)
through (iii) above, 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.
LIMITATION ON ISSUANCES AND SALES OF CAPITAL STOCK OF WHOLLY OWNED
RESTRICTED SUBSIDIARIES
Subject to the requirements of the provision of the 2006 Notes Indenture
described under " -- Consolidation, Merger, Conveyance, Transfer or Lease," the
2006 Notes Indenture provides that the Company will not, and will not permit any
Wholly Owned Restricted Subsidiary to, transfer, convey, sell, lease or
otherwise dispose of any Capital Stock of such Wholly Owned Restricted
Subsidiary or any other Wholly Owned Restricted Subsidiary to any Person other
than the Company or a Wholly Owned Restricted Subsidiary; and shall not permit
any Wholly Owned 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 the Company or a
Wholly Owned Restricted Subsidiary. Notwithstanding the foregoing, the Company
may, and may allow any Wholly Owned Restricted Subsidiary to, transfer, convey,
sell, lease or dispose of the Capital Stock of such Wholly Owned Restricted
Subsidiary or of any other Wholly Owned Restricted Subsidiary or allow any
Wholly Owned Restricted Subsidiary to issue Capital Stock or securities
convertible into, or warrants, rights or options, to subscribe for or purchase
shares of, its Capital Stock to any Person provided that all the Capital Stock
of such Wholly Owned Restricted Subsidiary is sold or otherwise disposed of and
provided that such sale or disposition is effected in accordance with the terms
of the provision of the 2006 Notes Indenture described under " -- Limitation on
Certain Asset Dispositions."
LIMITATIONS ON TRANSACTIONS WITH AFFILIATES AND RELATED PERSONS
The 2006 Notes Indenture provides that the Company will not, and will
not permit any Restricted Subsidiary of the Company to, enter into any
transaction involving aggregate consideration in excess of $1 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), unless a majority of the disinterested
members of the Board of Directors of the Company determines (which determination
will be evidenced by a Board Resolution) that (i) such transaction is in the
best interests of the Company or such Restricted Subsidiary and (ii) such
transactions is on terms that are no less favorable to the Company or a
Restricted Subsidiary than those which might be obtained in arm's length
transactions with a third party at the time.
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LIMITATION ON LIENS
The 2006 Notes Indenture provides that the Company may not, and may not
permit any Restricted Subsidiary of the Company to, 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 that is pari passu or subordinated to the
2006 Notes without making, or causing such Restricted Subsidiary to make,
effective provision for securing the 2006 Notes (i) equally and ratably with
such Indebtedness as to such property for so long as such Indebtedness will be
so secured or (ii) in the event such Indebtedness is Indebtedness of the Company
which is subordinate in right of payment to the 2006 Notes, prior to such
Indebtedness as to such property for so long as such Indebtedness will be so
secured.
The foregoing restrictions shall not apply to: (i) Liens existing in
respect of any Indebtedness that exists on the date of the 2006 Notes Indenture;
(ii) Liens in favor of the Company or Liens in favor of a Wholly Owned
Restricted Subsidiary of the Company on the assets or Capital Stock of another
Wholly Owned Restricted Subsidiary of the Company; (iii) 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
2006 Notes Indenture; (iv) Liens on property existing immediately prior to the
time of acquisition thereof (and not Incurred in anticipation of the financing
of such acquisition); or (v) 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 (i), (iii) and (iv) 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 2006
Notes Indenture described under clause (ii) or (v) of " -- Limitation on
Consolidated Indebtedness."
LIMITATION ON CERTAIN DEBT
The 2006 Notes Indenture provides that the Company will not Incur any
Indebtedness that is subordinate in right of payment to any other Indebtedness
of the Company unless the Indebtedness so Incurred is either pari passu or
subordinate in right of payment to the 2006 Notes.
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
The 2006 Notes Indenture provides that the Company will not consolidate
with or merge into any Person or permit any other Person to consolidate with or
merge into the Company, or transfer, sell, convey or lease or otherwise dispose
of all or substantially all of its assets to, any Person unless (i) (a) the
Company is the surviving entity or (b) if the Company is not the surviving
entity then the successor or transferee assumes all the obligations of the
Company under the 2006 Notes and the 2006 Notes Indenture, (ii) the Consolidated
Net Worth of the successor or transferee immediately after the transaction is
not less than 100% of the Company's Consolidated Net Worth immediately prior to
the transaction, (iii) immediately after giving effect to such transaction, the
Company would be permitted to Incur at least $1.00 of additional Indebtedness
pursuant to the provision of the 2006 Notes Indenture described in the first
paragraph under " -- Limitation on Consolidated Indebtedness," (iv) 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 and (v) 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
The following are Events of Default under the 2006 Notes Indenture: (i)
failure to pay the principal of or premium, if any, on the 2006 Notes at
Maturity; (ii) failure to pay any interest on the 2006 Notes when it becomes due
and payable continued for 30 days; (iii) failure, on the applicable Purchase
Date, to purchase 2006 Notes required to be purchased by the Company pursuant to
an Offer to Purchase as to which an Offer has been mailed to Holders; (iv)
failure to perform or comply with the provisions of the 2006 Notes Indenture
described under " -- Mergers, Consolidations and Certain Sales of Assets"; (v)
failure to perform any other covenant or agreement of the Company under the 2006
Notes Indenture continued for 30 days after written notice to the Company by the
Trustee or Holders of at least 25% in aggregate principal amount of outstanding
2006 Notes; (vi) default by the Company or any Restricted Subsidiary under the
terms of any instrument evidencing or securing Indebtedness having an
outstanding principal amount in excess of $5 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;
(vii) the rendering of a final judgment or judgments against the Company or a
Restricted Subsidiary in an amount in excess of $5 million which remains
undischarged or unstayed for a period of 60 days after the date on which the
right of appeal has expired; and (viii) certain events of bankruptcy, insolvency
or reorganization affecting the Company or a Restricted Subsidiary.
If an Event of Default, other than an event described under (viii)
above, shall occur and be continuing, either the Trustee or the Holders of at
least 25% in aggregate principal amount of the 2006 Notes by notice as provided
in the 2006 Notes Indenture, may declare the principal amount of the 2006 Notes
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 2006 Notes may, under
certain circumstances, rescind and annul such acceleration if all Events of
Default, other than the non-payment of accelerated principal of the 2006 Notes,
have been cured or waived as provided in the 2006 Notes Indenture. If an Event
of Default described under (viii) above shall occur, the 2006 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 2006 Note will have any right to institute any
proceeding with respect to the 2006 Notes Indenture or for any remedy
thereunder, unless such Holder shall have 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 2006 Notes shall have made written
request to the Trustee and the Trustee shall not have received from the Holders
of a majority in aggregate principal amount of the outstanding 2006 Notes a
direction inconsistent with such request and shall have failed to institute such
proceeding within 60 days. However, such limitations do not apply to a suit
instituted by a Holder of a 2006 Note for enforcement of payment of the
principal of and premium, if any, or interest on such 2006 Note on or after the
respective due dates expressed in such 2006 Note. The Holders of a majority in
aggregate principal amount of the 2006 Notes outstanding may waive any existing
Default except a Default in the payment of interest or principal (including
premium) on the 2006 Notes.
CERTAIN DEFINITIONS
"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.
"Affiliate and Related Person Proceeds" means any cash payment received
by the Company or any Restricted Subsidiary from any Affiliate or Related Person
from any transaction permitted under the provisions of the 2006 Notes Indenture
described under " -- Limitations on Transactions with Affiliates and Related
Persons."
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"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
Subsidiaries 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 (i) shares of Capital Stock (other than
directors' qualifying shares) or other ownership interests of a Restricted
Subsidiary of such Person, (ii) all or substantially all of the assets of such
Person or any of its Restricted Subsidiaries representing a division or line of
business or (iii) other assets or rights of such Person or any of its Restricted
Subsidiaries having a Fair Market Value greater than $100,000.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company 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" means that portion of any obligation of a
Person as lessee under a lease which is required to be capitalized on the
balance sheet of such lessee in accordance with generally accepted accounting
principles.
"Capital Stock" of any Person means any and all shares, interests,
participations or other equivalents (however designated) of corporate stock of
such Person.
"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.
"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 Hedge 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), (i) the portion of any rental obligation in respect of
any Capital Lease Obligation allocable to interest expense in accordance with
generally accepted accounting principles; (ii) the amortization of Indebtedness
discounts; (iii) any payments or fees with respect to letters of credit, bankers
acceptances or similar facilities; (iv) fees with respect to Interest Hedge
Agreements; (v) 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 (vi) 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) (i) the net income (or loss) of any Person acquired by such Person
or a Restricted Subsidiary of such Person after the date of the 2006 Notes
Indenture in a pooling-of-interests transaction for any period prior to the date
of such transaction, (ii) 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, (iii) gains or losses from sales of assets
other than sales of assets acquired and held for resale in the ordinary course
of business and (iv) all extraordinary gains and extraordinary losses.
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"Consolidated Net Worth" of any Person means the consolidated
shareholders' equity of such Person, determined on a consolidated basis in
accordance with generally accepted accounting principles; provided that, with
respect to the Company, adjustments following the date of the 2006 Notes
Indenture to the accounting books and records of the Company in accordance with
Accounting Principles Board Opinions Nos. 16 and 17 (or successor opinions
thereto) or otherwise resulting from the acquisition of control of the Company
by another Person and its Subsidiaries shall not be given effect to.
"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.
"Credit Facility" means the Loan Agreement, dated as of May 6, 1996,
among the Company, The Toronto-Dominion Bank, Barclays Bank, PLC, and Morgan
Guaranty Trust Company of New York, as Managing Agents, and the other financial
institutions named therein, as such agreement may be amended, supplemented,
restated or otherwise modified from time to time.
"Cumulative EBITDA" means EBITDA of the Company and its Consolidated
Restricted Subsidiaries for the period beginning on the first day of the fiscal
quarter immediately following the date of the 2006 Notes Indenture, 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 the Company and its Consolidated Restricted Subsidiaries for
the period beginning on the first day of the fiscal quarter immediately
following the date of the 2006 Notes Indenture, through and including the end of
the last fiscal quarter preceding the date of any proposed Restricted Payment.
"Depositary" means a clearing agency registered under the Exchange Act
that is designated to act as Depositary for the 2006 Notes until a successor
Depositary shall have become such pursuant to the applicable provisions of the
2006 Notes Indenture, and thereafter "Depositary" shall mean such successor
Depositary. The Depositary initially is The Depository Trust Company.
"Designated Senior Indebtedness" means the Indebtedness under the Credit
Facility.
"EBITDA" of any Person means for any period the Consolidated Net Income
for such period increased by the sum of (i) Consolidated Interest Expense of
such Person for such period, plus (ii) Consolidated Income Tax Expense of such
Person for such period, plus (iii) the consolidated depreciation and
amortization expense included in the income statement of such Person and its
Consolidated Restricted Subsidiaries for such period, plus (iv) all other
non-cash charges and expenses that were deducted in determining Consolidated Net
Income for such period, minus (v) all non-cash revenues and gains to the extent
included in Consolidated Net Income for such period.
"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 (i) if such Person or assets has a Fair Market Value of less than
$5 million, by any officer of the Company and evidenced by an Officers'
Certificate, dated within 30 days of the relevant transaction, or (ii) if such
Person or assets has a Fair Market Value in excess of $5 million or more, by a
majority of the Board of Directors of the Company and evidenced by a Board
Resolution, dated within 30 days of the relevant transaction.
"Holder" means a Person in whose name a 2006 Note is registered in the
Security Register.
"Incur" means, with respect to any Indebtedness or other obligation of
any Person, to create, issue, incur (by conversion, exchange or otherwise),
assume, guarantee or otherwise become liable in respect of such Indebtedness or
other obligation or the recording, as required pursuant to generally accepted
accounting principles or otherwise, of any such Indebtedness or other obligation
on the balance
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sheet of such Person (and "incurrence", "incurred", "incurrable" and "incurring"
shall have meanings correlative to the foregoing); provided, however, that a
change in generally accepted accounting principles that results in an obligation
of such Person that exists at such time becoming Indebtedness shall not be
deemed an incurrence of such Indebtedness.
"Indebtedness" means (without duplication), with respect to any Person,
whether recourse is to all or a portion of the assets of such Person and whether
or not contingent, (i) every obligation of such Person for money borrowed, (ii)
every obligation of such Person evidenced by bonds, debentures, notes or similar
instruments, including obligations Incurred in connection with the acquisition
of property, assets or businesses, (iii) every reimbursement obligation of such
Person with respect to letters of credit, bankers' acceptances or similar
facilities issued for the account of such Person, (iv) every obligation of such
Person issued or assumed as the deferred purchase price of property or services
(but excluding trade accounts payable or accrued liabilities arising in the
ordinary course of business), (v) every Capital Lease Obligation of such Person,
(vi) the maximum fixed redemption or repurchase price of Redeemable Stock of
such Person at the time of determination, (vii) 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, (viii) every obligation of the type
referred to in clauses (i) through (vii) 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 and (ix) the liquidation value of Preferred Stock issued pursuant to
the provision of the 2006 Notes Indenture described in clause (v) of " --
Limitation on Preferred Stock of Restricted Subsidiaries."
"Indebtedness to EBITDA Ratio" of any Person means at any date the ratio
of Consolidated Indebtedness outstanding on such date to EBITDA for the four
full fiscal quarters immediately preceding such date; 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.
"Initial Investors" means the Stanton Entities, the Hellman & Friedman
Entities, the Goldman Sachs Entities and Providence.
"Interest Hedge 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 the Company or any Restricted Subsidiary, on the one
hand, and any Person (other than an Affiliate of the Company or any Restricted
Subsidiary), on the other hand, as such agreement or arrangement may be
modified, supplemented and in effect from time to time.
"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).
"Make-Whole Amount" on any date in respect of any 2006 Note means the
excess, if any, of (i) the aggregate present value as of such date of each
dollar of principal being redeemed or paid and the amount of interest (exclusive
of interest accrued to such date) that would have been payable in respect of
each such dollar if such redemption or payment had not been made, determined by
discounting, on a semi-annual basis, such principal and interest at the
Reinvestment Rate (determined on the third Business Day preceding the date on
which notice of redemption or payment is made) from the respective dates on
which principal and interest would have been payable if such redemption or
payment had not been made, over (ii) the aggregate principal amount of such 2006
Note being redeemed or paid.
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"Maturity" means, when used with respect to any 2006 Note, the date on
which the principal of such 2006 Note becomes due and payable, whether at the
Stated Maturity or by declaration of acceleration, call for redemption or
otherwise.
"Offer to Purchase" means a written offer (the "Offer") sent by the
Company 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 2006 Notes
specified in such Offer at the purchase price specified in such Offer. Unless
otherwise required by applicable law, the Offer shall specify an expiration date
(the "Expiration Date") of the Offer to Purchase which, subject to any contrary
requirements of applicable law, shall be not less than 30 days nor more than 60
days after the date of such Offer to Purchase and a settlement date (the
"Purchase Date") for purchase of 2006 Notes within five Business Days after the
Expiration Date. The Offer shall also state the section of the 2006 Notes
Indenture pursuant to which the Offer to Purchase is being made, the Expiration
Date and the Purchase Date, the aggregate principal amount of the outstanding
2006 Notes offered to be purchased by the Company, the purchase price to be paid
by the Company and the place or places where 2006 Notes are to be surrendered
for tender pursuant to the Offer to Purchase.
"Officers' Certificate" means a certificate signed by two officers at
least one of whom shall be the principal executive officer, principal accounting
officer or principal financial officer of the Company and delivered to the
Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, and who shall be reasonably acceptable to the Trustee
and delivered to the Trustee.
"PCS Vendor Facility" means the Loan Agreement, dated June 30, 1995,
between Western PCS II Corporation and Northern Telecom Inc., as such agreement
may be amended, supplemented, restated or otherwise modified from time to time.
"Permitted Joint Venture" means, as applied to any Person, (i) any
corporation or other entity (a) engaged in the acquisition, ownership, operation
and management of assets in the Wireless Communications Business, (b) over which
such Person is responsible (either directly or through a services agreement) for
day-to-day operations or otherwise has operational and managerial control, (c)
of which more than forty percent (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 forty percent (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 (d) with respect to which such Person has the right or option to acquire all
of the outstanding Capital Stock or ownership interests not owned by such
Person; or (ii) any corporation or other entity which conducts no business other
than the Wireless Communications Business exclusively outside the United States.
"Permitted Joint Venture Investment" means (i) any payment on account of
the purchase, redemption, retirement or acquisition of (A) any shares of Capital
Stock or other ownership interests of a Permitted Joint Venture or (B) any
option, warrant or other right to acquire shares of Capital Stock or ownership
interests of a Permitted Joint Venture or (ii) any loan, advance, lease, capital
contribution to, or investment in, or payment of a Guaranty of any obligation of
a Permitted Joint Venture; provided that such loan, advance, lease, capital
contribution, investment or payment provides for a return that is senior in
right of payment to any return on the Capital Stock or ownership interests of
such Permitted Joint Venture; and provided, further, that not less than 75% of
the aggregate Permitted Joint Venture Investments in any Permitted Joint Venture
referred to in clause (i) of the definition of Permitted Joint Venture shall be
Permitted Joint Venture Investments described in clause (ii); and provided,
further, however, that the amount of Permitted Joint Venture Investments by the
Company and its Restricted Subsidiaries in Permitted Joint Ventures described in
clause (ii) of the definition of Permitted Joint
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Venture, shall not exceed $20 million for any single such Permitted Joint
Venture or $75 million in the aggregate for all such Permitted Joint Ventures.
"Person" means any individual, corporation, partnership, joint venture,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Qualified Capital Stock" means, with respect to any Person, any and all
shares of Capital Stock other than Redeemable Stock issued by such Person after
the date of the 2006 Notes Indenture.
"Qualified Capital Stock Proceeds" means, with respect to any Person,
(a) in the case of any sale of Qualified Capital Stock, the aggregate net cash
proceeds received by such Person, after payment of expenses, commissions and the
like Incurred by such Person in connection therewith, and net of Indebtedness
that such Person Incurred, guaranteed or otherwise became liable for in
connection with the issuance or acquisition of such Capital Stock; and (b) in
the case of any exchange, exercise, conversion or surrender of any Preferred
Stock or Indebtedness of such Person or any Subsidiary issued for cash after the
date of the 2006 Notes Indenture for or into shares of Qualified Capital Stock
of such Person, the liquidation value of the Preferred Stock or the net book
value of such Indebtedness as adjusted on the books of such Person to the date
of such exchange, exercise, conversion or surrender, plus any additional amount
paid by the securityholders to such Person upon such exchange, exercise,
conversion or surrender and less any and all payments made to the
securityholders, and all other expenses, commissions and the like Incurred by
such Person or any Subsidiary in connection therewith.
"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 2006 Notes or is redeemable at the option of the
holder thereof at any time prior to the final Stated Maturity of the 2006 Notes.
"Reinvestment Rate" means the arithmetic mean of the yields under the
respective heading "Week Ending" published in the most recent Statistical
Release under the caption "Treasury Constant Maturities" for the maturity
(rounded to the nearest month) corresponding to the remaining life to maturity,
as of the payment date of the principal being redeemed or paid. If no maturity
exactly corresponds to such maturity, yields for the two published maturities
most closely corresponding to such maturity shall be calculated pursuant to the
immediately preceding sentence and the Reinvestment Rate shall be interpolated
or extrapolated from such yields on a straight-line basis, rounding in each of
the relevant periods to the nearest month. For the purpose of calculating the
Reinvestment Rate, the most recent Statistical Release published prior to the
date of determination of the Make-Whole Amount shall be used.
"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 Payment" means, with respect to the Company or any
Restricted Subsidiary of the Company (i) any declaration or payment of a
dividend or other distribution on any shares of Capital Stock (other than
dividends payable solely in shares of its or such Restriction Subsidiary's
Qualified Capital Stock or options, warrants or other rights to acquire its or
such Restricted Subsidiary's Qualified Capital Stock and other than any
declaration or payment of a dividend or other distributions by a Restricted
Subsidiary to the Company or another Restricted Subsidiary), (ii) any payment on
account of the purchase, redemption, retirement or acquisition of (A) any shares
of Capital Stock of the Company or any Related Person (other than a Restricted
Subsidiary) of the Company or (B) any option, warrant or other right to purchase
or acquire shares of Capital Stock of the Company or such Restricted Subsidiary
or any Related Person (other than a Restricted Subsidiary) of the Company or
such Restricted Subsidiary, in each case other than pursuant to the cashless
exercise of options, (iii) any loan, advance, capital contribution to, or
investment in, or payment of a Guaranty of any obligation of, or purchase,
redemption or other acquisition of any shares of Capital Stock or any
Indebtedness of, any Affiliate or Related Person (other than a Restricted
Subsidiary or other than any loan, advance, capital contribution to, or
investment in, the Company or another Restricted Subsidiary by a Restricted
Subsidiary, any purchase, redemption or other acquisition of shares of Capital
Stock of any Subsidiary of the Company where the purchase price for such Capital
Stock is payable entirely in Qualified Capital Stock of the Company, or any
payment by any Restricted Subsidiary of any loan, advance or other indebtedness
or other amount owed by a Restricted Subsidiary to the Company or another
Restricted Subsidiary) and (iv) any redemption, defeasance, repurchase or
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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 2006 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.
"Security Register" has the meaning set forth in the 2006 Notes
Indenture.
"Senior Indebtedness" means the principal of (and premium, if any) and
interest (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company whether or not a claim
for post-petition interest is allowed in such proceeding) on (i) Indebtedness of
the Company created pursuant to the Credit Facility and all other obligations
thereunder or under the notes, security documents, pledge agreements, Interest
Hedge Agreements or other agreements or instruments executed in connection
therewith, (ii) Indebtedness of the Company created pursuant to any vendor
financing Incurred for the acquisition, construction or improvement by the
Company or any Restricted Subsidiary of assets in the Wireless Communications
Business, (iii) all other Indebtedness of the Company referred to in the
definition of Indebtedness other than clauses (iv), (vi) and (ix) thereof (and
clause (viii) thereof to the extent applicable to Indebtedness Incurred under
clauses (iv) and (vi) thereof), whether Incurred on or prior to the date of the
2006 Notes Indenture or thereafter Incurred, other than the 2006 Notes, and (iv)
amendments, renewals, extensions, modifications, refinancings and refundings of
any such Indebtedness; provided, however, the following shall not constitute
Senior Indebtedness: (A) any Indebtedness owed to a Person when such Person is a
Restricted Subsidiary of the Company, (B) any Indebtedness which by the terms of
the instrument creating or evidencing the same is not superior in right of
payment to the 2006 Notes, (C) any Indebtedness Incurred in violation of the
2006 Notes Indenture (but, as to any such Indebtedness, no such violation shall
be deemed to exist for purposes of this clause (c) if the holder (s) of such
Indebtedness or their representative and the Trustee shall have received an
Officers' Certificate of the Company to the effect that the incurrence of such
Indebtedness does not (or in the case of revolving credit Indebtedness, that the
incurrence of the entire committed amount thereof at the date on which the
initial borrowing thereunder is made would not) violate the 2006 Notes
Indenture) or (D) any Indebtedness which is subordinated in right or payment in
respect to any other Indebtedness of the Company.
"Senior Nonmonetary Default" means the occurrence or existence and
continuance of any event of default, or of any event which, after notice or
lapse of time (or both), would become an event of default, under the terms of
any instrument pursuant to which any Senior Indebtedness is outstanding,
permitting (after notice or lapse of time or both) one or more holders of such
Senior Indebtedness (or a trustee or agent on behalf of the holders thereof) to
declare such Senior Indebtedness due and payable prior to the date on which it
would otherwise become due and payable, other than a Senior Payment Default.
"Senior Payment Default" means any default in the payment of principal
of (or premium, if any) or interest on any Senior Indebtedness when due, whether
at the stated maturity of any such payment or by declaration of acceleration,
call for redemption or otherwise.
"Senior Subordinated Notes Payment" means any payment or distribution of
any kind or character, whether in cash, property or securities, on account of
principal of (or premium, if any) or
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interest on or other obligations in respect of the 2006 Notes or on account of
any purchase or other acquisition of 2006 Notes by the Company or any Subsidiary
of the Company.
"Stated Maturity," when used with respect to any 2006 Note or any
installment of interest thereon, means the date specified in such 2006 Note as
the date on which the principal of such 2006 Note or such installment of
interest 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
2006 Notes Indenture, then such other reasonably comparable index which shall be
designated by the Company.
"Subsidiary" means, as applied to any Person, (a) 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 (b) 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, including Permitted Joint Ventures.
"Unrestricted Subsidiary" of any Person means (i) 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 (ii) 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 (other than pursuant to clause
(iii) under the last paragraph of Section 1011 of the 2006 Notes Indenture)
under the provision of the 2006 Notes 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 2006 Notes 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.
"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.
"Wireless Communications Business" means the provision of wireless
communications services and other related services.
MODIFICATION AND WAIVER
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Modifications and amendments of the 2006 Notes Indenture may be made by
the Company and the Trustee with the consent of the Holders of a majority in
aggregate principal amount of the outstanding 2006 Notes; provided, however,
that no such modification or amendment may, without the consent of the Holder of
each 2006 Note affected thereby, (i) change the Stated Maturity of the principal
of, or any installment of interest on, any 2006 Note, (ii) reduce the principal
amount of or premium, if any, or interest on any 2006 Note, (iii) change the
place or currency of payment of principal of, or premium or interest on any 2006
Note, (iv) impair the right to institute suit for the enforcement of any payment
on or with respect to any 2006 Note, (v) reduce the percentage of aggregate
principal amount of 2006 Notes outstanding necessary to amend the 2006 Notes
Indenture, (vi) reduce the percentage of aggregate principal amount of 2006
Notes outstanding necessary for waiver of compliance with certain provisions of
the 2006 Notes Indenture or for waiver of certain defaults, (vii) modify such
provisions with respect to modification and waiver, (viii) modify the
subordination provisions in a manner adverse to the Holders of the 2006 Notes or
(ix) following the mailing of an Offer to Purchase, modify the provisions of the
2006 Notes 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 2006 Notes may waive compliance by the Company with certain
restrictive provisions of the 2006 Notes Indenture. The Holders of a majority in
aggregate principal amount of the outstanding 2006 Notes may waive any past
default under the 2006 Notes Indenture, except a default in the payment of
principal, premium or interest and certain covenants and provisions of the 2006
Notes Indenture which cannot be amended without the consent of the Holder of
each outstanding 2006 Note affected.
DEFEASANCE
The 2006 Notes Indenture provides that the Company, at its option, (i)
will be discharged from any and all obligations in respect of outstanding 2006
Notes (except for certain obligations to register the transfer or exchange of
2006 Notes, to replace mutilated, lost, destroyed or stolen 2006 Notes and to
maintain paying agents and hold moneys for payment in trust), and the provisions
of the 2006 Notes Indenture described under " -- Subordination" shall cease to
be effective, or (ii) need not comply with certain restrictive covenants and
that such omission shall not be deemed to be an Event of Default under the 2006
Notes Indenture and the 2006 Notes, and the provisions of the 2006 Notes
Indenture described under " -- Subordination" shall cease to be effective, in
either case (i) or (ii) upon irrevocable deposit with the Trustee, in trust, of
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 public
accountants to pay the principal of, and premium, if any, and each installment
of interest, if any, on the outstanding 2006 Notes in accordance with the terms
of the 2006 Notes Indenture and the 2006 Notes. Such trust may only be
established if, among other things, (1) with respect to clause (i), the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect that the
Company has received from, or there has been published by, the Internal Revenue
Service a ruling or there has been a change in law, which provides that Holders
of 2006 Notes will not recognize gain or loss for federal income tax purposes as
a result of such deposit, defeasance and discharge and will be subject to
federal income tax on the same amount, in the same manner and at the same times
as would have been the case if such deposit, defeasance and discharge had not
occurred; or, with respect to clause (ii), the Company shall have delivered to
the Trustee an Opinion of Counsel to the effect that the Holders of the 2006
Notes will not recognize gain or loss for federal income tax purposes as a
result or such deposit and defeasance and will be subject to federal income tax
on the same amount, in the same manner and at the same times as would have been
the case if such deposit, defeasance and discharge had not occurred; (2) no
Event of Default or event that, with the passing of time or the giving of
notice, or both, shall constitute an Event of Default shall have occurred and be
continuing on the date of such deposit; (3) no Event of Default described under
clause (viii) under "Events of Default" above or event that, with the passing of
time or the giving of notice, or both, shall constitute an Event of Default
under such clause (viii) shall have occurred and be continuing at any time
during the period ending on the 121st day following such date of deposit; (4)
such deposit shall not cause the trust so created to be subject to the
Investment Company Act or 1940 or shall be qualified under such act or exempt
from regulation thereunder; and (5) certain other customary conditions
precedent.
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GLOBAL SECURITIES
The 2006 Notes are represented by two global securities (the "Global
Security"). The Global Security representing the 2006 Notes has been deposited
with, or on behalf of, the Depositary and registered in the name of a nominee of
the Depositary. 2006 Notes will not be exchangeable for certificated notes;
provided that if the Depositary is at any time unwilling or unable to continue
as Depositary and a successor depositary is not appointed by the Company within
90 days, the Company will issue certificated notes in exchange for the Global
Security representing the 2006 Notes. In addition, the Company may at any time
and in its sole discretion determine not to have the 2006 Notes represented by
the Global Security and, in such event, will issue certificated notes in
exchange therefor.
Upon the issuance of the Global Security, the Depositary credited, on
its book-entry registration and transfer system, the respective principal
amounts of the 2006 Notes represented by the Global Security to the accounts of
institutions that have accounts with the Depositary ("Participants"). The
accounts to be credited were designated by the underwriters of the 2006 Notes.
Ownership of beneficial interests in the Global Security is limited to
Participants or Persons that may hold interests through Participants. Ownership
of beneficial interests in the Global Security are shown on, and the transfer of
that ownership will be effected only through, records maintained by the
Depositary with respect to Participants' interests or by the Participants or by
Persons that hold through Participants with respect to beneficial owners'
interests. The laws of some states require that certain purchasers of securities
take physical delivery of such securities in definitive form. Such ownership
limits and such laws may impair the ability to transfer beneficial interests in
the Global Security.
Principal and interest payments on 2006 Notes registered in the name of
the Depositary or its nominee will be made to the Depositary or its nominee, as
the case may be, as the registered owner of the Global Security representing the
2006 Notes, The Company expects that the Depositary, upon receipt of any payment
of principal or interest in respect of the Global Security, will immediately
credit Participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of the Global Security
as shown on the records of the Depositary. The Company also expects that
payments by Participants to owners of beneficial interests in the Global
Security 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 in bearer form or registered in "street name," and
will be the responsibility of such Participants. None of the Company, the
Trustee, any paying agent or any registrar for the 2006 Notes will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in the Global
Security or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
The Depository Trust Company, New York, New York, ("DTC") is the initial
Depositary with respect to the 2006 Notes. DTC has advised the Company that it
is a limited-purpose trust company organized under the laws of the State of New
York, a member of the Federal Reserve System, a "clearing corporation" within
the meaning of the Uniform Commercial Code and a "clearing agency" registered
pursuant to the provisions of Section 17A of the Securities Exchange Act of
1934. DTC was created to hold securities of its Participants and to facilitate
the clearance and settlement of securities transactions among its Participants
in such securities through electronic book-entry changes in accounts of the
Participants, thereby eliminating the need for physical movement of securities
certificates. DTC's Participants include securities brokers and dealers, banks,
trust companies, clearing corporations and certain other organizations, some of
whom (and/or their representatives) own DTC. Access to DTC's book entry system
is also 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. Persons who are not Participants may beneficially
own securities held by DTC only through Participants.
LIMITATIONS ON RIGHTS OF BENEFICIAL OWNERS
As long as the Depositary, or its nominee, is the holder of the Global
Security, the Depositary or its nominee, as the case may be, will be considered
the sole owner or Holder of the 2006 Notes represented by the Global Security
for all purposes under the 2006 Notes Indenture or the Global
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Security. Except as set forth above, owners of beneficial interests in the
Global Security will not be entitled to have 2006 Notes represented by the
Global Security registered in their names, will not receive or be entitled to
receive physical delivery of 2006 Notes in definitive form and will not be
considered the owners or Holders thereof under the 2006 Notes Indenture
governing the 2006 Notes or under the Global Security. Accordingly, each person
owning a beneficial interest in such Global Security must rely on the procedures
of the Depositary and, if such person is not a Participant, on the procedures of
the Participant through which such person directly or indirectly owns its
interest, to exercise any rights of a Holder under the Indenture or the Global
Security.
DTC has informed the Company that under existing DTC policies and
industry practices, if the Company requests any action of Holders, or if any
owner of a beneficial interest in such Global Security desires to give any
notice or take any action that a Holder is entitled to give or take under the
2006 Notes Indenture or the Global Security, DTC would authorize and cooperate
with each Participant to whose account any portion of the 2006 Notes represented
by such Global Security is credited on DTC's books and records to give such
notice or take such action. Any person owning a beneficial interest in such
Global Security that is not a Participant must rely on any contractual
arrangements it has directly, or indirectly through its immediate financial
intermediary, with a Participant to give such notice or take such action.
NOTICES
Notices to Holders of 2006 Notes will be given by mail to the addresses
of such Holders as they may appear in the Security Register.
TITLE
The Company, the Trustee and any agent of the Trustee may treat the
Person in whose name a 2006 Note is registered as the absolute owner thereof
(whether or not such 2006 Note may be overdue) for the purpose of making payment
and for all other purposes.
GOVERNING LAW
The 2006 Notes Indenture and the 2006 Notes will be governed by and
construed in accordance with the laws of the State of New York.
THE TRUSTEE
The 2006 Notes 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 2006 Notes Indenture at the request or direction of any of the
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 2006 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.
The Company is required to furnish to the Trustee annually a statement
as to the performance by the Company of its obligations under the 2006 Notes
Indenture and as to any default in such performance. The Trustee also serves as
the Trustee under the 2007 Notes Indenture.
DESCRIPTION OF SENIOR SUBORDINATED NOTES DUE 2007
The 2007 Notes were issued under the 2007 Notes Indenture, dated as of
October 24, 1996, as amended and supplemented from time to time, by and between
the Company and Harris Trust Company of California, as Trustee (the "Trustee").
The following summary of the material terms and provisions of the 2007 Notes
reflects the terms of the 2007 Notes Indenture which the Company intends to
amend
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and supplement by a Supplemental Indenture to be entered into with the Trustee
on or prior to March 31, 1998 and does not purport to be complete and is subject
to and qualified in its entirety by reference to the 2007 Notes Indenture, a
copy of which is filed as an exhibit to the Registration Statement of which this
Prospectus is a part. Definitions relating to certain capitalized terms in this
"Description of Senior Subordinated Notes Due 2007" are set forth under " --
Certain Definitions" and throughout this description. Capitalized terms that are
used but not otherwise defined herein have the meanings assigned to them in the
2007 Notes Indenture and such definitions are incorporated herein by reference.
As used in this section, the "Company" refers to Western Wireless Corporation,
unless the context otherwise requires.
GENERAL
The 2007 Notes are unsecured obligations of the Company, limited in
aggregate principal amount to $200,000,000. The 2007 Notes are senior
subordinated obligations of the Company, subordinated in right of payment to
Senior Indebtedness of the Company, including amounts outstanding under the
Credit Facility and senior in right of payment to any future subordinated
indebtedness of the Company. The 2007 Notes rank pari passu with $200.0 million
aggregate principal amount of the 2006 Notes.
MATURITY, INTEREST AND PRINCIPAL
The 2007 Notes will mature on February 1, 2007. Interest on the 2007
Notes accrues at a rate of 10-1/2% per annum and will be payable semiannually on
each February 1 and August 1, commencing on February 1, 1997, to the Holders of
record on the immediately preceding January 15 and July 15. Interest is computed
on the basis of a 360-day year of twelve 30-day months. The 2007 Notes will be
payable both as to principal and interest at the office or agency of the Company
maintained for such purpose within the City and State of New York. Until
otherwise designated by the Company, the Company's office or agency in New York
will be the office of the Trustee maintained for such purpose.
All moneys paid by the Company to a paying agent for the payment of
principal of (and premium, if any) and any interest on any 2007 Notes which
remain unclaimed for two years after such principal (or premium, if any) or
interest has become due and payable may be repaid to the Company and thereafter
the Holder of such Notes may look only to the Company for payment thereof.
FORM, DENOMINATION, BOOK-ENTRY PROCEDURE AND TRANSFER
The 2007 Notes have been and will be issued only in fully registered
form, without interest coupons, in denomination of $1,000 and integral multiples
thereof. The 2007 Notes were initially issued in the form of a global
certificate in fully registered form (the "Original Global Note") and deposited
with the Trustee as custodian for DTC. Upon consummation of the Exchange
Offer, the Exchange Notes were issued in the form of a global certificate in
registered form (together with the Original Global Note, the "Global Note") and
deposited with the Trustee as custodian for DTC, in New York, New York, and
registered in the name of DTC or its nominee, for credit to an account of a
direct or indirect participant in DTC as described below.
So long as DTC, or its nominee, is the registered owner or holder of the
Global Note, DTC or such nominee, as the case may be, will be considered the
sole owner or Holder of the 2007 Notes represented by such Global Note for all
purposes under the 2007 Notes Indenture and the 2007 Notes. No beneficial owner
of an interest in the 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 2007 Notes Indenture.
Except as set forth below, the Global Note may be transferred, in whole
and not in part, only to another nominee of DTC or to a successor of DTC or its
nominee. Beneficial interests in the Global Note may not be exchanged for 2007
Notes in certificated from except in the limited circumstances described below.
See " -- Exchange of Book-Entry Notes for Certificated Notes."
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Depository Procedures. DTC has advised the Company that DTC is a
limited-purpose trust company created to hold securities for its participating
organizations (collectively, the "Participants") and to facilitate the clearance
and settlement of transactions in those securities between Participants through
electronic book-entry changes in accounts of its Participants. The Participants
include securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations. Access to DTC's system is also
available to other entities such as banks, brokers, dealers and trust companies
that clear through or maintain a custodial relationship with a Participant,
either directly or indirectly (collectively, the "Indirect Participants").
Persons who are not Participants may beneficially own securities held by or on
behalf of DTC only through the Participants or the Indirect Participants. The
ownership interest and transfer of ownership interest of each actual purchaser
of each security held by or on behalf of DTC are recorded on the records of the
Participants and Indirect Participants.
The Company expects that, pursuant to procedures established by DTC, (i)
DTC will credit the respective principal amount of 2007 Notes of the individual
beneficial interests represented by such Global Note to the accounts of
Participants and (ii) ownership of such interests in the Global Note will be
shown on, and the transfer of ownership thereof will be effected only through,
records maintained by DTC (with respect to the Participants) or by the
Participants and the Indirect Participants (with respect to other owners of
beneficial interests in the Global Note).
The laws of some states require that certain persons take physical
delivery in definitive form of securities that they own. Consequently the
ability to transfer beneficial interests in a Global Note to such persons may be
limited to that extent. Because DTC can act only on behalf of Participants,
which in turn act on behalf of Indirect Participants and certain banks, the
ability of a person having beneficial interests in a Global Note to pledge such
interests to persons or entities that do not participate in the DTC system, or
otherwise take actions in respect of such interests, may be affected by the lack
of a physical certificate evidencing such interests. For certain other
restrictions on the transferability of the Notes, see " -- Exchange of
Book-Entry Notes for Certificated Notes."
EXCEPT AS DESCRIBED BELOW, OWNERS OF INTERESTS IN THE GLOBAL NOTE WILL
NOT HAVE 2007 NOTES REGISTERED IN THEIR NAMES, WILL NOT RECEIVE PHYSICAL
DELIVERY OF 2007 NOTES IN CERTIFICATED FORM AND WILL NOT BE CONSIDERED THE
REGISTERED OWNERS OR HOLDERS THEREOF UNDER THE 2007 NOTES INDENTURE FOR ANY
PURPOSE.
Payments in respect of the principal of (and premium, if any) and
interest on a Global Note registered in the name of DTC or its nominee will be
payable by the Trustee to DTC or its nominee in its capacity as the registered
holder under the 2007 Notes Indenture. Under the terms of the 2007 Notes
Indenture, the Company and the Trustee will treat the persons in whose names the
2007 Notes, including the Global Note, are registered as the owners thereof for
the purpose of receiving such payments and for any and all other purposes
whatsoever. Consequently, none of the Company, the Trustee nor any agent or the
Company or the Trustee has or will have any responsibility or liability for (i)
any aspect of DTC's records or any Participant's or Indirect Participant's
records relating to or payments made on account of beneficial ownership
interests in the Global Note, or for maintaining, supervising or reviewing any
of DTC's records or any Participant's or Indirect Participant's records relating
to the beneficial ownership interests in the Global Note, or (ii) any other
matter relating to the actions and practices of DTC or any of its Participants
or Indirect Participants.
DTC has advised the Company that its current practice, upon receipt of
any payment in respect of securities such as the 2007 Notes (including principal
and interest), is to credit the accounts of the relevant Participants with the
payment on the payment date, in amounts proportionate to their respective
holdings in principal amount of beneficial interests in the relevant security
such as the Global Note as shown on the records of DTC unless DTC has reason to
believe it will not receive payment on such payment date. Payments by the
Participants and the Indirect Participants to the beneficial owners of 2007
Notes will be governed by standing instructions and customary practices and will
be the responsibility of the Participants or the Indirect Participants and will
not be the responsibility of DTC, the Trustee or the Company. Neither the
Company nor the Trustee will be liable for any delay by DTC or any of its
Participants in identifying the beneficial owners of the 2007 Notes, and the
Company and the
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Trustee may conclusively rely on and will be protected in relying on
instructions from DTC or its nominee as the registered owner of the 2007 Notes
for all purposes.
Interests in the Global Note will trade in DTC's Same-Day Funds
Settlement System and secondary market trading activity in such interests will
therefore settle in immediately available funds, subject to all cases to the
rules and procedures of DTC and is participants.
Transfers between Participants in DTC will be effected in accordance
with DTC's procedures, and will be settled in same-day funds. If a Holder
requires physical delivery of a Certificated Note for any reason, including to
sell 2007 Notes to Persons in states which require physical delivery of such
2007 Notes or to pledge such 2007 Notes, such holder must transfer its interest
in the Global Note in accordance with the normal procedures of DTC and the
procedures set forth in the 2007 Notes Indenture.
DTC has advised the Company that it will take any action permitted to be
taken by a Holder of 2007 Notes only at the direction of one or more
Participants to whose account with DTC interests in the Global Notes are
credited and only in respect of such portion of the aggregate principal amount
of the 2007 Notes as to which such Participant or Participants has or have given
such direction. However, if there is an Event of Default (as defined below)
under the 2007 Notes, DTC reserves the right to exchange the Global Note for
2007 Notes in certificated form, and to distribute such 2007 Notes to its
Participants.
The information in this section concerning DTC and its book-entry
systems has been obtained from sources that the Company believes to be reliable,
but the Company takes no responsibility for the accuracy thereof.
Although DTC has agreed to the foregoing procedures to facilitate
transfers of interests in the 2007 Notes among participants in DTC, it is under
no obligation to perform or to 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 participants or
indirect participants of its obligations under the rules and procedures
governing their operations.
Exchange of Book-Entry Notes for Certificated Notes. A Global Note is
exchangeable for definitive 2007 Notes in registered certificated form if (i)
DTC (x) notifies the Company that it is unwilling or unable to continue as
Depository for the Global Note and the Company thereupon fails to appoint a
successor depository or (y) has ceased to be a clearing agency registered under
the Exchange Act, (ii) the Company at its option, notifies the Trustee in
writing that it elects to cause the issuance of the 2007 Notes in certificated
form of (iii) there shall have occurred and be continuing a Default or an Event
of Default with respect to the 2007 Notes. In addition, beneficial interests in
a Global Note may be exchanged for certificated 2007 Notes upon request but only
upon at least 20 days prior written notice given to the Trustee by or on behalf
of DTC in accordance with its customary procedures. In all cases, certificated
2007 Notes delivered in exchange for any Global Note or beneficial interests
therein will be registered in the names, and issued in any approved
denominations, requested by or on behalf of the Depositary (in accordance with
its customary procedures).
SUBORDINATION
The payment of the principal of and premium, if any, and interest on the
2007 Notes are, to the extent set forth in the 2007 Notes Indenture,
subordinated in right of payment to the prior payment in full of all Senior
Indebtedness. Upon any payment or distribution of assets to creditors upon any
liquidation, dissolution, winding up, reorganization, assignment for the benefit
or creditors, marshalling of assets or any bankruptcy, insolvency or similar
proceedings of the Company, the holders of all Senior Indebtedness will be
entitled to receive payment in full of all amounts due or to become due thereon
before the Holders of the 2007 Notes will be entitled to receive any Notes
Payment.
In the event that any Senior Payment Default shall have occurred and be
continuing, then no Notes Payment shall be made unless and until such Senior
Payment Default shall have been cured or waived.
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<PAGE> 43
In the event that any Senior Nonmonetary Default shall have occurred and
be continuing, then, upon the receipt by the Company and the Trustee of written
notice of such Senior Nonmonetary Default from a Person designated as an
administrative agent for the Designated Senior Indebtedness or, if there is no
outstanding Designated Senior Indebtedness, any holder of Senior Indebtedness,
no Notes Payment shall be made during the period (the "Payment Blockage Period")
commencing on the date of such receipt of such written notice and ending on the
earlier of (i) the date on which such Senior Nonmonetary Default shall have been
cured or waived or shall have ceased to exist and any acceleration of Senior
Indebtedness shall have been rescinded or annulled or the Senior Indebtedness to
which such Senior Nonmonetary Default relates shall have been discharged or (ii)
the 179th day after the date of such receipt of such written notice. No more
than one Payment Blockage Period may be commenced with respect to the 2007 Notes
during any 360-day period and there shall be a period of at least 181
consecutive days in each 360-day period in which no Payment Blockage Period is
in effect. No Payment Blockage Period shall be in effect if there is no payment
blockage period in effect with respect to any outstanding 2006 Notes. For all
purposes of this paragraph, no Senior Nonmonetary Default that was known to the
holders of Senior Indebtedness to exist or be continuing on the date of
commencement of any Payment Blockage Period shall be, or be made, the basis for
the commencement of a subsequent Payment Blockage Period by an administrative
agent for the Designated Senior Indebtedness unless such Senior Nonmonetary
Default shall have been cured for a period of not less than 90 consecutive days.
By reason of such subordination, in the event of insolvency, creditors
of the Company who are not holders of Senior Indebtedness or the Senior
Subordinated Notes may recover less, ratably, than holders of Senior
Indebtedness and may recover more, ratably, than the Holders of the Senior
Subordinated Notes.
At December 31, 1997, Senior Indebtedness aggregated approximately
$995.0 million. The Company expects from time to time to Incur additional
Indebtedness constituting Senior Indebtedness. See "Capitalization." The 2007
Notes Indenture will not prohibit or limit the incurrence of additional Senior
Indebtedness. In addition, all existing and future indebtedness and other
liabilities of the Company's Subsidiaries are effectively senior in right of
payment to the 2007 Notes. At December 31, 1997, the total outstanding
Indebtedness of the Company's Subsidiaries not eliminated in the Company's
consolidated financial statements was approximately $300.0 million.
OPTIONAL REDEMPTION
Prior to February 1, 2002, the 2007 Notes may be redeemed at any time at
the option of the Company, in whole or from time to time in part, at a
redemption price equal to the sum of (i) the principal amount of the 2007 Notes
to be redeemed together with accrued interest thereon to but excluding the date
fixed for redemption and (ii) the Make-Whole Amount, if any, with respect to the
2007 Notes or portion thereof being redeemed.
On or after February 1,2002, the 2007 Notes may be redeemed at any time
at the option of the Company, in whole or from time to time in part, at the
following redemption prices (expressed as percentages of principal amount), in
each case together with accrued interest to but excluding the date fixed for
redemption, if redeemed during the 12-month period beginning February 1 of each
of the years indicated below:
<TABLE>
<CAPTION>
YEAR REDEMPTION PRICE
---- ----------------
<S> <C>
2002...................... 105.25%
2003...................... 103.50%
2004...................... 101.75%
2005 and thereafter....... 100.00%
</TABLE>
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<PAGE> 44
Notwithstanding the previous two paragraphs, on or before February 1,
1999, the Company may at its option, apply Qualified Capital Stock Proceeds and
Affiliate and Related Person Proceeds to redeem up to $66 million in aggregate
principal amount of 2007 Notes at 110.50% (expressed as a percentage of the
stated principal amount thereof), together with accrued interest to but
excluding the date fixed for redemption.
Notice of any optional redemption of any 2007 Notes (or portion thereof)
will be given to Holders at their addresses appearing in the Security Register,
not less than 30 nor more than 60 days prior to the date fixed for redemption.
The notice of redemption shall state the redemption date, the redemption price,
if less than all the outstanding 2007 Notes are to be redeemed, principal
amounts of the particular 2007 Notes to be redeemed, that on the redemption date
the redemption price will become due and payable upon each 2007 Note to be
redeemed and the place or places where such 2007 Notes are to be surrendered for
payment of the redemption price.
No sinking fund is provided for the 2007 Notes.
CHANGE OF CONTROL
Upon the occurrence of a Change of Control, each Holder of a 2007 Note
shall have the right to have such 2007 Note repurchased by the Company on the
terms and conditions set forth in the 2007 Notes Indenture. The Company shall,
within 30 days following the date of the consummation of a
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<PAGE> 45
transaction resulting in a Change of Control, mail an Offer to Purchase all
outstanding 2007 Notes at a purchase price equal to 101% of their aggregate
principal amount plus accrued interest to but excluding the Purchase Date. The
Credit Facility precludes the Company from making such an Offer to Purchase, and
the Company will be required to obtain written consents or waivers from the
lenders under the Credit Facility or repay Indebtedness under the Credit
Facility in order to be able to make the Offer to Purchase.
"Change of Control" means (i) directly or indirectly a sale, transfer or
other conveyance of all or substantially all the assets of the Company, 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 Exchange Act, whether or not
applicable), excluding transfers or conveyances to or among the Company's 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 2007 Notes
Indenture, 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, (ii) 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 2007 Notes Indenture, 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 the total
Voting Power of the Company or (iii) during any period of 24 consecutive months,
individuals who at the beginning of such period constituted the Board of
Directors of the Company (together with any new directors whose election by such
Board or whose nomination for election by the shareholders of the Company 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 the Board of Directors of the Company then in office.
The Company will comply with any tender offer rules under the Exchange
Act which may then be applicable, including Rule 14e-I thereunder, in connection
with any Offer to Purchase.
COVENANTS
LIMITATION ON CONSOLIDATED INDEBTEDNESS
The 2007 Notes Indenture prohibits the Company and any of its Restricted
Subsidiaries from Incurring any Indebtedness unless the Company's Indebtedness
to EBITDA Ratio at the end of the fiscal quarter immediately preceding the
incurrence of such Indebtedness, after giving pro forma effect thereto, is less
than:
<TABLE>
<CAPTION>
FOR THE PERIOD RATIO
-------------- -----
<S> <C>
Prior to June 30, 2000...................... 9 to 1; and
Thereafter.................................. 7 to 1
</TABLE>
Notwithstanding the foregoing, the Company and its Restricted
Subsidiaries may Incur the following Indebtedness without regard to the
foregoing limitations:
(i) Indebtedness evidenced by the 2007 Notes or otherwise arising under
the 2007 Notes Indenture;
(ii) (A) Indebtedness of the Company or any Restricted Subsidiary (other
than Western PCS Corporation or any Restricted Subsidiary of Western PCS
Corporation), as the case may be, that is outstanding or committed at the date
of the 2007 Notes Indenture under the Credit Facility (including any letters of
credit issued thereunder), (B) Indebtedness of the Company or any Restricted
Subsidiary (including Western PCS Corporation or any Restricted Subsidiary of
Western PCS Corporation) under the PCS Vendor Facility, and (C) Indebtedness of
Western PCS Corporation or any Restricted Subsidiary of
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<PAGE> 46
Western PCS Corporation pursuant to one or more credit or financing facilities,
the proceeds of which are used for the general corporate purposes of Western PCS
Corporation or any of its Restricted Subsidiaries, and any renewal, extension,
refinancing or refunding of any thereof; provided, that (y) the aggregate
principal amount of the Indebtedness permitted under this clause (ii) does not
exceed $950 million at any time outstanding and (z) this clause (ii) shall not
prohibit the Company from Incurring additional Indebtedness under the Credit
Facility or the PCS Vendor Facility, or Western PCS Corporation or any of its
Restricted Subsidiaries from Incurring Indebtedness under any other credit or
financing facility of Western PCS Corporation, otherwise permitted pursuant to
this covenant;
(iii) Indebtedness of the Company or any Restricted Subsidiary that is
outstanding or committed prior to February 1, 2000 for the acquisition,
construction or improvement by the Company or any Restricted Subsidiary of
assets in the Wireless Communications Business; provided that the amount of such
Indebtedness at any time outstanding does not exceed 100% of the Fair Market
Value of such assets;
(iv) Indebtedness of the Company or any Wholly Owned Restricted
Subsidiary of the Company owing to the Company or any Wholly Owned Restricted
Subsidiary of the Company;
(v) Indebtedness of the Company or any Restricted Subsidiary to renew,
extend, refinance or refund any Indebtedness of the Company or any Restricted
Subsidiary outstanding or committed on the date of renewal, extension,
refinancing or refunding other than Indebtedness Incurred pursuant to clause
(ii) or (iv); 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 associated
therewith; provided, further, that (a) such renewing, extending, refinancing or
refunding Indebtedness shall have no mandatory repayments or redemptions prior
to the Indebtedness being renewed, extended, refinanced or refunded and (b) in
the case of any refinancing or refunding of Indebtedness pari passu to the 2007
Notes, the refinancing or refunding Indebtedness is made pari passu or
subordinated to the 2007 Notes and, in the case of any refinancing or refunding
of Indebtedness subordinated to the 2007 Notes, the refinancing or refunding
Indebtedness is made subordinate to the 2007 Notes to substantially the same
extent as the Indebtedness refinanced or refunded;
(vi) Indebtedness Incurred by the Company or any Restricted Subsidiary
under Interest Hedge Agreements to hedge permitted Indebtedness; and
(vii) Indebtedness of the Company or any Restricted Subsidiary that is
outstanding or committed prior to February 1, 2000, other than Indebtedness
permitted pursuant to clauses (i) through (vi) above, which, together with any
other outstanding indebtedness incurred pursuant to this clause (vii), does not
exceed $50 million at any time outstanding or committed.
LIMITATION ON PREFERRED STOCK OF RESTRICTED SUBSIDIARIES
The 2007 Notes Indenture prohibits the Company from allowing any
Restricted Subsidiary of the Company to create or issue any Preferred Stock
except:
(i) Preferred Stock outstanding on the date of the 2007 Notes Indenture;
(ii) Preferred Stock issued to and held by the Company or any Wholly
Owned Restricted Subsidiary of the Company;
(iii) Preferred Stock issued by any Person prior to that Person's having
become a direct or indirect Restricted Subsidiary of the Company;
(iv) Preferred Stock issued by a Restricted Subsidiary the proceeds of
which are used to refinance outstanding Preferred Stock of a Restricted
Subsidiary, provided that (a) the liquidation value of the refinancing Preferred
Stock does not exceed the liquidation value so refinanced plus financing fees
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<PAGE> 47
and other expenses associated with such refinancing and (b) such refinancing
Preferred Stock has no mandatory redemptions prior to the Preferred Stock being
refinanced; and
(v) Preferred Stock issued by a Restricted Subsidiary with a cumulative
liquidation preference in an amount which could have been Incurred at the time
of such issuance as Indebtedness under the provision of the 2007 Notes Indenture
described under " -- Limitation on Consolidated Indebtedness."
LIMITATION ON CERTAIN ASSET DISPOSITIONS
The 2007 Notes Indenture prohibits the Company or any Restricted
Subsidiary from making any Asset Disposition in one or more related transactions
that result in aggregate net proceeds in excess of $10 million unless (i) the
consideration received at the time of such Asset Disposition is at least equal
to the Fair Market Value of the assets as determined by the Board of Directors
of the Company (which determination will be evidenced by a Board Resolution),
(ii) (A) at least 85% of the consideration received consists of cash or readily
marketable cash equivalents or the assumption of Indebtedness of the Company or
any Restricted Subsidiary or (B) so long as no Event of Default or event which
with notice or lapse of time would become an Event of Default has occurred and
is continuing, the consideration paid to the Company or such Restricted
Subsidiary is substantially comparable in type to the assets being sold as
determined by the Board of Directors of the Company (which determination will be
evidenced by a Board Resolution) and (iii) all the Net Available Proceeds shall
be applied (a) first, to the payment of Senior Indebtedness (or Indebtedness of
such Restricted Subsidiary, as the case may be) then outstanding; (b) second, to
make any offer to purchase required under the 2006 Notes Indenture; (c) third,
to make an Offer to Purchase any outstanding 2007 Notes at par value plus
accrued interest and any other offer to purchase required under the terms of
Indebtedness that is pari passu to the 2007 Notes, on a pro rata basis; and (d)
fourth, to the repayment of other Indebtedness of the Company or a Restricted
Subsidiary. The Company will not be able to make an offer to purchase pursuant
to clause (ii)(b) or (c) without obtaining written consents from or repaying the
lenders under the Credit Facility.
Notwithstanding clause (iii) of the preceding paragraph, the 2007 Notes
Indenture will not require the Company to repay Senior Indebtedness (or
Indebtedness of such Restricted Subsidiary) then outstanding, to make an Offer
to Purchase any outstanding 2007 Notes at par value or to repay any other
Indebtedness with the proceeds of any Asset Disposition to the extent that the
Net Available Proceeds from any Asset Disposition are invested within 365 days
of such Asset Disposition in assets or an entity in the Wireless Communications
Business or the Company or a Restricted Subsidiary shall have entered into a
binding agreement to invest in such assets or entity and such investment shall
have been consummated within eighteen months of such Asset Disposition.
For purposes of the foregoing, "Net Available Proceeds" means the
aggregate amount of cash (including any other consideration that is converted
into cash) received by the Company or a Restricted Subsidiary in respect of such
an Asset Disposition, less the sum of (i) all fees, commissions and other
expenses Incurred in connection with such Asset Disposition, including the
amount of income taxes required to be paid by the Company or a Restricted
Subsidiary in connection therewith and (ii) the aggregate amount of cash so
received which is used to retire any existing Indebtedness of the Company or a
Restricted Subsidiary which is required to be repaid in connection therewith.
LIMITATION ON RESTRICTED PAYMENTS
The 2007 Notes Indenture prohibits the Company or any Restricted
Subsidiary from making any Restricted Payment unless after giving effect thereto
(a) 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; (b) the Company
would be permitted to Incur an additional $1.00 of Indebtedness pursuant to the
provision of the 2007 Notes Indenture described in the first paragraph under "
- -- Limitation on Consolidated Indebtedness"; and (c) the total of all Restricted
Payments made on or after the date of the 2007 Notes Indenture does not exceed
the sum of (i) Cumulative EBITDA less 1.6 times Cumulative Interest Expense and
(ii) 100% of
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<PAGE> 48
the aggregate Affiliate and Related Person Proceeds and Qualified Capital Stock
Proceeds of the Company after the date of the 2007 Notes Indenture.
The foregoing provision shall not be violated, 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 (ii)), by reason of (i) 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, (ii) any refinancing of any Indebtedness otherwise
permitted under the provision of the 2007 Notes Indenture described under clause
(ii) or (v) of " -- Limitation on Consolidated Indebtedness," (iii) Permitted
Joint Venture Investments, (iv) the payment of scheduled dividends on, or the
redemption of, Preferred Stock permitted to be created or issued pursuant to the
provision of the 2007 Notes Indenture described under " -- Limitation on
Preferred Stock of Restricted Subsidiaries" or (v) Restricted Payments, in
addition to Restricted Payments permitted pursuant to clauses (i) through (iv)
above, not in excess of $25 million in the aggregate after the date of the 2007
Notes Indenture.
LIMITATIONS CONCERNING DISTRIBUTIONS AND TRANSFERS BY RESTRICTED
SUBSIDIARIES
The 2007 Notes Indenture provides that the Company shall not, and shall
not permit any Restricted Subsidiary to, create or otherwise cause or suffer to
exist or become effective any consensual restriction or prohibition on the
ability of any Restricted Subsidiary to (i) 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 the Company or any
Restricted Subsidiary or pay any Indebtedness or other obligation owed to the
Company or any Restricted Subsidiary, (ii) make any loans or advances to the
Company or any Restricted Subsidiary or (iii) transfer any of its property or
assets to the Company or any Restricted Subsidiary. Notwithstanding the
foregoing, the Company may, and may permit any Restricted Subsidiary to, suffer
to exist any such restriction or prohibition (i) pursuant to any agreement in
effect on the date of the 2007 Notes Indenture, (ii) pursuant to an agreement
entered into after the date of the 2007 Notes Indenture relating to any
Indebtedness the Incurrence of which is permitted under the 2007 Notes
Indenture, provided, however, that the provisions contained in such agreement
relating to such encumbrance or restriction are no more restrictive in any
material respect than those contained in the PCS Vendor Facility or are no more
restrictive in any material respect than those contained in the 2007 Notes
Indenture, (iii) pursuant to 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 the Company other than in
anticipation of becoming a Restricted Subsidiary or (iv) pursuant to an
agreement effecting a renewal, extension, refinancing or refunding of any
agreement described in clauses (i) through (iii) above, 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.
LIMITATION ON ISSUANCES AND SALES OF CAPITAL STOCK OF WHOLLY OWNED
RESTRICTED SUBSIDIARIES
Subject to the requirements of the provision of the 2007 Notes Indenture
described under " -- Consolidation, Merger, Conveyance, Transfer or Lease," the
2007 Notes Indenture provides that the Company will not, and will not permit any
Wholly Owned Restricted Subsidiary to, transfer, convey, sell, lease or
otherwise dispose of any Capital Stock of such Wholly Owned Restricted
Subsidiary or any other Wholly Owned Restricted Subsidiary to any Person other
than the Company or a Wholly Owned Restricted Subsidiary; and shall not permit
any Wholly Owned 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 the Company or a
Wholly Owned Restricted Subsidiary. Notwithstanding the foregoing, the Company
may, and may allow any Wholly Owned Restricted Subsidiary to, transfer, convey,
sell, lease or dispose of the Capital Stock of such Wholly Owned Restricted
Subsidiary or of any other Wholly Owned Restricted Subsidiary or allow any
Wholly Owned Restricted Subsidiary to issue Capital Stock or securities
convertible into, or warrants, rights or options, to subscribe for or purchase
shares of, its Capital Stock to any Person provided that all the Capital Stock
of such Wholly Owned Restricted Subsidiary is sold or otherwise disposed of and
provided
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<PAGE> 49
that such sale or disposition is effected in accordance with the terms of the
provision of the 2007 Notes Indenture described under " -- Limitation on Certain
Asset Dispositions."
LIMITATIONS ON TRANSACTIONS WITH AFFILIATES AND RELATED PERSONS
The 2007 Notes Indenture provides that the Company will not, and will
not permit any Restricted Subsidiary of the Company to, enter into any
transaction involving aggregate consideration in excess of $1 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), unless a majority of the disinterested
members of the Board of Directors of the Company determines (which determination
will be evidenced by a Board Resolution) that (i) such transaction is in the
best interests of the Company or such Restricted Subsidiary and (ii) such
transaction is on terms that are no less favorable to the Company or a
Restricted Subsidiary than those which might be obtained in arm's length
transactions with a third party at the time.
LIMITATION ON LIENS
The 2007 Notes Indenture provides that the Company may not, and may not
permit any Restricted Subsidiary of the Company to, 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 that is pari passu or subordinated to the
2007 Notes without making, or causing such Restricted Subsidiary to make,
effective provision for securing the 2007 Notes (i) equally and ratably with
such Indebtedness as to such property for so long as such Indebtedness will be
so secured or (ii) in the event such Indebtedness is Indebtedness of the Company
which is subordinate in right of payment to the 2007 Notes, prior to such
Indebtedness as to such property for so long as such Indebtedness will be so
secured.
The foregoing restrictions shall not apply to: (i) Liens existing in
respect of any Indebtedness that exists on the date of the 2007 Notes Indenture;
(ii) Liens in favor of the Company or Liens in favor of a Wholly Owned
Restricted Subsidiary of the Company on the assets or Capital Stock of another
Wholly Owned Restricted Subsidiary of the Company; (iii) 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
2007 Notes Indenture; (iv) Liens on property existing immediately prior to the
time of acquisition thereof (and not Incurred in anticipation of the financing
of such acquisition); or (v) 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 (i), (iii) and (iv) 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 2007
Notes Indenture described under clause (ii) or (v) of " -- Limitation on
Consolidated Indebtedness."
LIMITATION ON CERTAIN DEBT
The 2007 Notes Indenture provides that the Company will not Incur any
Indebtedness that is subordinate in right of payment to any other Indebtedness
of the Company unless the Indebtedness so Incurred is either pari passu or
subordinate in right of payment to the 2007 Notes.
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
The 2007 Notes Indenture provides that the Company will not consolidate
with or merge into any Person or permit any other Person to consolidate with or
merge into the Company, or transfer, sell, convey or lease or otherwise dispose
of all or substantially all of its assets to, any Person unless (i) (a) the
Company is the surviving entity or (b) if the Company is not the surviving
entity then the
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<PAGE> 50
successor or transferee assumes all the obligations of the Company under the
2007 Notes and the 2007 Notes Indenture, (ii) the Consolidated Net Worth of the
successor or transferee immediately after the transaction is not less than 100%
of the Company's Consolidated Net Worth immediately prior to the transaction,
(iii) immediately after giving effect to such transaction, the Company would be
permitted to Incur at least $1.00 of additional Indebtedness pursuant to the
provision of the 2007 Notes Indenture described in the first paragraph under "
- -- Limitation on Consolidated Indebtedness," (iv) 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 and (v) an Officers' Certificate
and an Opinion of Counsel covering such conditions shall be delivered to the
Trustee.
EVENTS OF DEFAULT AND REMEDIES
The following are Events of Default under the 2007 Notes Indenture: (i)
failure to pay the principal of or premium, if any, on the 2007 Notes at
Maturity; (ii) failure to pay any interest on the 2007 Notes when it becomes due
and payable continued for 30 days; (iii) failure, on the applicable Purchase
Date, to purchase 2007 Notes required to be purchased by the Company pursuant to
an Offer to Purchase as to which an Offer has been mailed to Holders; (iv)
failure to perform or comply with the provisions of the 2007 Notes Indenture
described under " -- Mergers, Consolidations and Certain Sales of Assets"; (v)
failure to perform any other covenant or agreement of the Company under the 2007
Notes Indenture continued for 30 days after written notice to the Company by the
Trustee or Holders of at least 25% in aggregate principal amount of outstanding
2007 Notes; (vi) default by the Company or any Restricted Subsidiary under the
terms of any instrument evidencing or securing Indebtedness having an
outstanding principal amount in excess of $5 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;
(vii) the rendering of a final judgment or judgments against the Company or a
Restricted Subsidiary in an amount in excess of $5 million which remains
undischarged or unstayed for a period of 60 days after the date on which the
right of appeal has expired; and (viii) certain events of bankruptcy, insolvency
or reorganization affecting the Company or a Restricted Subsidiary.
If an Event of Default, other than an event described under (viii)
above, shall occur and be continuing, either the Trustee or the Holders of at
least 25% in aggregate principal amount of the 2007 Notes by notice as provided
in the 2007 Notes Indenture, may declare the principal amount of the 2007 Notes
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 2007 Notes may, under
certain circumstances, rescind and annul such acceleration if all Events of
Default, other than the non-payment of accelerated principal of the 2007 Notes,
have been cured or waived as provided in the 2007 Notes Indenture. If an Event
of Default described under (viii) above shall occur, the 2007 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 2007 Note will have any right to institute any
proceeding with respect to the 2007 Notes Indenture or for any remedy
thereunder, unless such Holder shall have 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 2007 Notes shall have made written
request to the Trustee and the Trustee shall not have received from the Holders
of a majority in aggregate principal amount of the outstanding 2007 Notes a
direction inconsistent with such request and shall have failed to institute such
proceeding within 60 days. However, such limitations do not apply to a suit
instituted by a Holder of a 2007 Note for enforcement of payment of the
principal of and premium, if any, or interest on such 2007 Note on or after the
respective due dates expressed in such Note. The Holders of a majority in
aggregate principal amount of the 2007 Notes outstanding may waive any existing
Default except a Default in the payment of interest or principal (including
premium) on the 2007 Notes.
CERTAIN DEFINITIONS
"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"
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<PAGE> 51
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.
"Affiliate and Related Person Proceeds" means any cash payment received
by the Company or any Restricted Subsidiary from any Affiliate or Related Person
from any transaction permitted under the provisions of the 2007 Notes Indenture
described under " -- Limitations on Transactions with Affiliates and Related
Persons."
"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
Subsidiaries 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 (i) shares of Capital Stock (other than
directors' qualifying shares) or other ownership interests of a Restricted
Subsidiary of such Person, (ii) all or substantially all of the assets of such
Person or any of its Restricted Subsidiaries representing a division or line of
business or (iii) other assets or rights of such Person or any of its Restricted
Subsidiaries having a Fair Market Value greater than $100,000.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company 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" means that portion of any obligation of a
Person as lessee under a lease which is required to be capitalized on the
balance sheet of such lessee in accordance with generally accepted accounting
principles.
"Capital Stock" of any Person means any and all shares, interests,
participations or other equivalents (however designated) of corporate stock of
such Person.
"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.
"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 Hedge 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), (i) the portion of any rental obligation in respect of
any Capital Lease Obligation allocable to interest expense in accordance with
generally accepted accounting principles; (ii) the amortization of Indebtedness
discounts; (iii) any payments or fees with respect to letters of credit, bankers
acceptances or similar facilities; (iv) fees with respect to Interest Hedge
Agreements; (v) 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 (vi) 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
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duplication) (i) the net income (or loss) of any Person acquired by such Person
or a Restricted Subsidiary of such Person after the date of the 2007 Notes
Indenture in a pooling-of-interests transaction for any period prior to the date
of such transaction, (ii) 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, (iii) gains or losses from sales of assets
other than sales of assets acquired and held for resale in the ordinary course
of business and (iv) all extraordinary gains and extraordinary losses.
"Consolidated Net Worth" of any Person means the consolidated
shareholders' equity of such Person, determined on a consolidated basis in
accordance with generally accepted accounting principles; provided that, with
respect to the Company, adjustments following the date of the 2007 Notes
Indenture to the accounting books and records of the Company in accordance with
Accounting Principles Board Opinions Nos. 16 and 17 (or successor opinions
thereto) or otherwise resulting from the acquisition of control of the Company
by another Person and its Subsidiaries shall not be given effect to.
"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.
"Credit Facility" means the Loan Agreement, dated as of May 6, 1996,
among the Company, The Toronto-Dominion Bank, Barclays Bank, PLC, and Morgan
Guaranty Trust Company of New York, as Managing Agents, and the other financial
institutions named therein, as such agreement may be amended, supplemented,
restated or otherwise modified from time to time.
"Cumulative EBITDA" means EBITDA of the Company and its Consolidated
Restricted Subsidiaries for the period beginning on the first day of the fiscal
quarter immediately following the date of the 2007 Notes Indenture, 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 the Company and its Consolidated Restricted Subsidiaries for
the period beginning on the first day of the fiscal quarter immediately
following the date of the 2007 Notes Indenture, through and including the end of
the last fiscal quarter preceding the date of any proposed Restricted Payment.
"Depositary" means a clearing agency registered under the Exchange Act
that is designated to act as Depositary for the 2007 Notes until a successor
Depositary shall have become such pursuant to the applicable provisions of the
2007 Notes Indenture, and thereafter "Depositary" shall mean such successor
Depositary. The Depositary initially is DTC.
"Designated Senior Indebtedness" means the Indebtedness under the Credit
Facility.
"EBITDA" of any Person means for any period the Consolidated Net Income
for such period increased by the sum of (i) Consolidated Interest Expense of
such Person for such period, plus (ii) Consolidated Income Tax Expense of such
Person for such period, plus (iii) the consolidated depreciation and
amortization expense included in the income statement of such Person and its
Consolidated Restricted Subsidiaries for such period, plus (iv) all other
non-cash charges and expenses that were deducted in determining Consolidated Net
Income for such period, minus (v) all non-cash revenues and gains to the extent
included in Consolidated Net Income for such period.
"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 (i) if such Person or assets has a Fair Market Value of less than
$5 million, by any officer of the Company and evidenced by an Officers'
Certificate, dated within 30 days of the relevant transaction, or (ii) if such
Person or assets has a Fair Market Value in excess of $5 million or more, by a
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majority of the Board of Directors of the Company and evidenced by a Board
Resolution, dated within 30 days of the relevant transaction.
"Holder" means a Person in whose name a 2007 Note is registered in the
Security Register.
"Incur" means, with respect to any Indebtedness or other obligation of
any Person, to create, issue, incur (by conversion, exchange or otherwise),
assume, guarantee or otherwise become liable in respect of such Indebtedness or
other obligation or the recording, as required pursuant to generally accepted
accounting principles or otherwise, of any such Indebtedness or other obligation
on the balance sheet of such Person (and "incurrence", "incurred", "incurrable"
and "incurring" shall have meanings correlative to the foregoing); provided,
however, that a change in generally accepted accounting principles that results
in an obligation of such Person that exists at such time becoming Indebtedness
shall not be deemed an Incurrence of such Indebtedness.
"Indebtedness" means (without duplication), with respect to any Person,
whether recourse is to all or a portion of the assets of such Person and whether
or not contingent, (i) every obligation of such Person for money borrowed, (ii)
every obligation of such Person evidenced by bonds, debentures, notes or similar
instruments, including obligations Incurred in connection with the acquisition
of property, assets or businesses, (iii) every reimbursement obligation of such
Person with respect to letters of credit, bankers' acceptances or similar
facilities issued for the account of such Person, (iv) every obligation of such
Person issued or assumed as the deferred purchase price of property or services
(but excluding trade accounts payable or accrued liabilities arising in the
ordinary course of business), (v) every Capital Lease Obligation of such Person,
(vi) the maximum fixed redemption or repurchase price of Redeemable Stock of
such Person at the time of determination, (vii) 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, (viii) every obligation of the type
referred to in clauses (i) through (vii) 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 and (ix) the liquidation value of Preferred Stock issued pursuant to
the provision of the 2007 Notes Indenture described in clause (v) of " --
Limitation on Preferred Stock of Restricted Subsidiaries."
"Indebtedness to EBITDA Ratio" of any Person means at any date the ratio
of Consolidated Indebtedness outstanding on such date to EBITDA for the four
full fiscal quarters immediately preceding such date; 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.
"Initial Investors" means the Stanton Entities, the Hellman & Friedman
Entities, the Goldman Sachs Entities and Providence.
"Interest Hedge 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 the Company or any Restricted Subsidiary, on the one
hand, and any Person (other than an Affiliate of the Company or any Restricted
Subsidiary), on the other hand, as such agreement or arrangement may be
modified, supplemented and in effect from time to time.
"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).
"Make-Whole Amount" on any date in respect of any 2007 Note means the
excess, if any, of (i) the aggregate present value as of such date of each
dollar of principal being redeemed or paid and the
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amount of interest (exclusive of interest accrued to such date) that would have
been payable in respect of each such dollar if such redemption or payment had
not been made, determined by discounting, on a semi-annual basis, such principal
and interest at the Reinvestment Rate (determined on the third Business Day
preceding the date on which notice of redemption or payment is made) from the
respective dates on which principal and interest would have been payable if such
redemption or payment had not been made, over (ii) the aggregate principal
amount of such 2007 Note being redeemed or paid.
"Maturity" means, when used with respect to any 2007 Note, the date on
which the principal of such 2007 Note becomes due and payable, whether at the
Stated Maturity or by declaration of acceleration, call for redemption or
otherwise.
"Notes Payment" means any payment or distribution of any kind or
character, whether in cash, property or securities, or account of principal of
(or premium, if any) or interest on or other obligations in respect of the 2007
Notes or other Indebtedness of the Company that is pari passu or subordinate in
right of payment to the 2007 Notes or on account of any purchase or other
acquisition of 2007 Notes or such other Indebtedness by the Company or any
subsidiary of the Company.
"Offer to Purchase" means a written offer (the "Offer") sent by the
Company 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 2007 Notes
specified in such Offer at the purchase price specified in such Offer. Unless
otherwise required by applicable law, the Offer shall specify an expiration date
(the "Expiration Date") of the Offer to Purchase which, subject to any contrary
requirements of applicable law, shall be not less than 30 days nor more than 60
days after the date of such Offer to Purchase and a settlement date (the
"Purchase Date") for purchase of 2007 Notes within five Business Days after the
Expiration Date. The Offer shall also state the section of the 2007 Notes
Indenture pursuant to which the Offer to Purchase is being made, the Expiration
Date and the Purchase Date, the aggregate principal amount of the outstanding
2007 Notes offered to be purchased by the Company, the purchase price to be paid
by the Company and the place or places where 2007 Notes are to be surrendered
for tender pursuant to the Offer to Purchase.
"Officers' Certificate" means a certificate signed by two officers at
least one of whom shall be the principal executive officer, principal accounting
officer or principal financial officer of the Company and delivered to the
Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, and who shall be reasonably acceptable to the Trustee
and delivered to the Trustee.
"PCS Vendor Facility" means the Loan Agreement, dated June 30, 1995,
between Western PCS II Corporation and Northern Telecom Inc., as such agreement
may be amended, supplemented, restated or otherwise modified from time to time.
"Permitted Joint Venture" means, as applied to any Person, (i) any
corporation or other entity (a) engaged in the acquisition, ownership, operation
and management of assets in the Wireless Communications Business, (b) over which
such Person is responsible (either directly or through a services agreement) for
day-to-day operations or otherwise has operational and managerial control, (c)
of which more than forty percent (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 forty percent (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 (d) with respect to which such Person has the right or option to acquire all
of the outstanding Capital Stock or ownership interests not owned by such
Person; or (ii) any corporation or other entity which conducts no business other
than the Wireless Communications Business exclusively outside the United States.
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"Permitted Joint Venture Investment" means (i) any payment on account of
the purchase, redemption, retirement or acquisition of (A) any shares of Capital
Stock or other ownership interests of a Permitted Joint Venture or (B) any
option, warrant or other right to acquire shares of Capital Stock or ownership
interests of a Permitted Joint Venture or (ii) any loan, advance, lease, capital
contribution to, or investment in, or payment of a Guaranty of any obligation of
a Permitted Joint Venture; provided that such loan, advance, lease, capital
contribution, investment or payment provides for a return that is senior in
right of payment to any return on the Capital Stock or ownership interests of
such Permitted Joint Venture; and provided, further, that not less than 75% of
the aggregate Permitted Joint Venture Investments in any Permitted Joint Venture
referred to in clause (i) of the definition of Permitted Joint Venture shall be
Permitted Joint Venture Investments described in clause (ii); and provided,
further, however, that the amount of Permitted Joint Venture Investments by the
Company and its Restricted Subsidiaries in Permitted Joint Ventures described in
clause (ii) of the definition of Permitted Joint Venture shall not exceed $20
million for any single such Permitted Joint Venture or $75 million in the
aggregate for all such Permitted Joint Ventures.
"Person" means any individual, corporation, partnership, joint venture,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Qualified Capital Stock" means, with respect to any Person, any and all
shares of Capital Stock other than Redeemable Stock issued by such Person after
the date of the 2007 Notes Indenture.
"Qualified Capital Stock Proceeds" means, with respect to any Person,
(a) in the case of any sale of Qualified Capital Stock, the aggregate net cash
proceeds received by such Person, after payment of expenses, commissions and the
like Incurred by such Person in connection therewith, and net of Indebtedness
that such Person Incurred, guaranteed or otherwise became liable for in
connection with the issuance or acquisition of such Capital Stock; and (b) in
the case of any exchange, exercise, conversion or surrender of any Preferred
Stock or Indebtedness of such Person or any Subsidiary issued for cash after the
date of the 2007 Notes Indenture for or into shares of Qualified Capital Stock
of such Person, the liquidation value of the Preferred Stock or the net book
value of such Indebtedness as adjusted on the books of such Person to the date
of such exchange, exercise, conversion or surrender, plus any additional amount
paid by the securityholders to such Person upon such exchange, exercise,
conversion or surrender and less any and all payments made to the
securityholders, and all other expenses, commissions and the like Incurred by
such Person or any Subsidiary in connection therewith.
"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 2007 Notes or is redeemable at the option of the
holder thereof at any time prior to the final Stated Maturity of the 2007 Notes.
"Reinvestment Rate" means the arithmetic mean of the yields under the
respective heading "Week Ending" published in the most recent Statistical
Release under the caption "Treasury Constant Maturities" for the maturity
(rounded to the nearest month) corresponding to the remaining life to maturity,
as of the payment date of the principal being redeemed or paid. If no maturity
exactly corresponds to such maturity, yields for the two published maturities
most closely corresponding to such maturity shall be calculated pursuant to the
immediately preceding sentence and the Reinvestment Rate shall be interpolated
or extrapolated from such yields on a straight-line basis, rounding in each of
the relevant periods to the nearest month. For the purpose of calculating the
Reinvestment Rate, the most recent Statistical Release published prior to the
date of determination of the Make-Whole Amount shall be used.
"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 Payment" means, with respect to the Company or any
Restricted Subsidiary of the Company, (i) any declaration or payment of a
dividend or other distribution on any shares of its or such Restricted
Subsidiary's Capital Stock (other than dividends payable solely in shares of its
or such Restricted Subsidiary's Qualified Capital Stock or options, warrants or
other rights to acquire its or such Restricted Subsidiary's Qualified Capital
Stock and other than any declaration or payment of a dividend or other
distribution by a Restricted Subsidiary to the Company or another Restricted
Subsidiary), (ii) any payment on account of the
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purchase, redemption, retirement or acquisition of (A) any shares of Capital
Stock of the Company or any Related Person (other than a Restricted Subsidiary)
of the Company or (B) any option, warrant or other right to purchase or acquire
shares of Capital Stock of the Company or such Restricted Subsidiary or any
Related Person (other than a Restricted Subsidiary) of the Company or its
Restricted Subsidiary, in each case other than pursuant to the cashless
exercise of options, (iii) any loan, advance, capital contribution to, or
investment in, or payment of a Guaranty of any obligation of, or purchase,
redemption or other acquisition of any shares of Capital Stock or any
Indebtedness of, any Affiliate or Related Person (other than a Restricted
Subsidiary or other than any loan, advance, capital contribution to, or
investment in, the Company or another Restricted Subsidiary by a Restricted
Subsidiary, any purchase, redemption or other acquisition of shares of Capital
Stock of any Subsidiary of the Company where the purchase price for such
Capital Stock is payable entirely in Qualified Capital Stock of the Company, or
any payment by any Restricted Subsidiary of any loan, advance or other
Indebtedness or other amount owed by a Restricted Subsidiary to the Company or
another Restricted Subsidiary) and (iv) 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 2007 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.
"Security Register" has the meaning set forth in the 2007 Notes
Indenture.
"Senior Indebtedness" means the principal of (and premium, if any) and
interest (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company whether or not a claim
for post-petition interest is allowed in such proceeding) on (i) Indebtedness of
the Company created pursuant to the Credit Facility and all other obligations
thereunder or under the notes, security documents, pledge agreements, Interest
Hedge Agreements or other agreements or instruments executed in connection
therewith, (ii) Indebtedness of the Company created pursuant to any vendor
financing Incurred for the acquisition, construction or improvement by the
Company or any Restricted Subsidiary of assets in the Wireless Communications
Business, (iii) all other Indebtedness of the Company referred to in the
definition of Indebtedness other than clauses (iv), (vi) and (ix) thereof (and
clause (viii) thereof to the extent applicable to Indebtedness Incurred under
clauses (iv) and (vi) thereof), whether Incurred on or prior to the date of the
2007 Notes Indenture or thereafter Incurred, other than the 2007 Notes, and (iv)
amendments, renewals, extensions, modifications, refinancings and refundings of
any such Indebtedness; provided, however, the following shall not constitute
Senior Indebtedness: (A) any Indebtedness owed to a Person when such Person is a
Restricted Subsidiary of the Company, (B) any Indebtedness which by the terms of
the instrument creating or evidencing the same is not superior in right of
payment to the 2007 Notes, (c) any Indebtedness Incurred in violation of the
2007 Notes Indenture (but, as to any such Indebtedness, no such violation shall
be deemed to exist for purposes of this clause (C) if the holder(s) of such
Indebtedness or their representative and the Trustee shall have received an
Officers' Certificate of the Company to the effect that the Incurrence of such
Indebtedness does not (or in the case of revolving credit Indebtedness, that the
Incurrence of the entire committed amount thereof at the date on which the
initial borrowing thereunder is made would not) violate the 2007 Notes
Indenture) or (D) any Indebtedness which is subordinated in right or payment in
respect to any other Indebtedness of the Company.
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"Senior Nonmonetary Default" means the occurrence or existence and
continuance of any event of default, or of any event which, after notice or
lapse of time (or both), would become an event of default, under the terms of
any instrument pursuant to which any Senior Indebtedness is outstanding,
permitting (after notice or lapse of time or both) one or more holders of such
Senior Indebtedness (or a trustee or agent on behalf of the holders thereof) to
declare such Senior Indebtedness due and payable prior to the date on which it
would otherwise become due and payable, other than a Senior Payment Default.
"Senior Payment Default" means any default in the payment of principal
of (or premium, if any) or interest on any Senior Indebtedness when due, whether
at the stated maturity of any such payment or by declaration of acceleration,
call for redemption or otherwise.
"Stated Maturity," when used with respect to any 2007 Note or any
installment of interest thereon, means the date specified in such 2007 Note as
the date on which the principal of such 2007 Note or such installment of
interest 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
Indenture, then such other reasonably comparable index which shall be designated
by the Company.
"Subsidiary" means, as applied to any Person, (a) 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 (b) 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, including Permitted Joint Ventures.
"Unrestricted Subsidiary" of any Person means (i) 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 (ii) 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 (other than pursuant to clause
(iii) under the last paragraph of Section 1011 of the 2007 Notes Indenture)
under the provision of the 2007 Notes 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 2007 Notes 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.
"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
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Subsidiaries of such Person or by such Person and one or more Wholly Owned
Restricted Subsidiaries of such Person.
"Wireless Communications Business" means the provision of wireless
communications services and other related services.
MODIFICATION AND WAIVER
Modifications and amendments of the 2007 Notes Indenture may be made by
the Company and the Trustee with the consent of the Holders of a majority in
aggregate principal amount of the outstanding 2007 Notes; provided, however,
that no such modification or amendment may, without the consent of the Holder of
each 2007 Note affected thereby, (i) change the Stated Maturity of the principal
of, or any installment of interest on, any 2007 Note, (ii) reduce the principal
amount of or premium, if any, or interest on any 2007 Note, (iii) change the
place or currency of payment of principal of, or premium or interest on any 2007
Note, (iv) impair the right to institute suit for the enforcement of any payment
on or with respect to any 2007 Note, (v) reduce the percentage of aggregate
principal amount of 2007 Notes outstanding necessary to amend the 2007 Notes
Indenture, (vi) reduce the percentage of aggregate principal amount of 2007
Notes outstanding necessary for waiver of compliance with certain provisions of
the 2007 Notes Indenture or for waiver of certain defaults, (vii) modify such
provisions with respect to modification and waiver, (viii) modify the
subordination provisions in a manner adverse to the Holders of the 2007 Notes,
(ix) following the mailing of an Offer to Purchase, modify the provisions of the
2007 Notes Indenture with respect to such Offer to Purchase in a manner adverse
to such Holder or (x) modify the provision of the 2007 Notes Indenture described
under " -- Limitation on Certain Debt."
The Holders of a majority in aggregate principal amount of the
outstanding 2007 Notes may waive compliance by the Company with certain
restrictive provisions of the 2007 Notes Indenture. The Holders of a majority in
aggregate principal amount of the outstanding 2007 Notes may waive any past
default under the 2007 Notes Indenture, except a default in the payment of
principal, premium or interest and certain covenants and provisions of the 2007
Notes Indenture which cannot be amended without the consent of the Holder of
each outstanding 2007 Note affected.
DEFEASANCE
The 2007 Notes Indenture provides that the Company, at its option, (i)
will be discharged from any and all obligations in respect of outstanding 2007
Notes (except for certain obligations to register the transfer or exchange of
2007 Notes, to replace mutilated, lost, destroyed or stolen 2007 Notes and to
maintain paying agents and hold moneys for payment in trust), and the provisions
of the 2007 Notes Indenture described under " -- Subordination" shall cease to
be effective, or (ii) need not comply with certain restrictive covenants and
that such omission shall not be deemed to be an Event of Default under the 2007
Notes Indenture and the 2007 Notes, and the provisions of the 2007 Notes
Indenture described under " -- Subordination" shall cease to be effective, in
either case (i) or (ii) upon irrevocable deposit with the Trustee, in trust, of
money, and/or U.S. government obligations which will provide money without the
need for reinvestment, in an amount sufficient in the opinion of a nationally
recognized firm of independent public accountants to pay the principal of, and
premium, if any, and each installment of interest, if any, on the outstanding
2007 Notes in accordance with the terms of the 2007 Notes Indenture and the 2007
Notes. Such trust may only be established if, among other things, (1) with
respect to clause (i), the Company shall have delivered to the Trustee an
Opinion of Counsel to the effect that the Company has received from, or there
has been published by, the Internal Revenue Service a ruling or there has been a
change in law, which provides that Holders of 2007 Notes will not recognize gain
or loss for federal income tax purposes as a result of such deposit, defeasance
and discharge and will be subject to federal income tax on the same amount, in
the same manner and at the same times as would have been the case if such
deposit, defeasance and discharge had not occurred; or, with respect to clause
(ii), the Company shall have delivered to the Trustee an Opinion of Counsel to
the effect that the Holders of the 2007 Notes will not recognize gain or loss
for federal income tax purposes as a result or such deposit and defeasance and
will be subject to federal income tax on the same amount, in the same manner and
at the same times as would have been the case if such deposit, defeasance and
discharge had not
57
<PAGE> 59
occurred; (2) no Event of Default or event that, with the passing of time or the
giving of notice, or both, shall constitute an Event of Default shall have
occurred and be continuing on the date of such deposit; (3) no Event of Default
described under clause (viii) under "Events of Default" above or event that,
with the passing of time or the giving of notice, or both, shall constitute an
Event of Default under such clause (viii) shall have occurred and be continuing
at any time during the period ending on the 121st day following such date of
deposit; (4) such deposit shall not cause the trust so created to be subject to
the Investment Company Act or 1940 or shall be qualified under such act or
exempt from regulation thereunder; and (5) certain other customary conditions
precedent.
NOTICES
Notices to Holders of Exchange Notes will be given by mail to the
addresses of such Holders as they may appear in the Security Register.
TITLE
The Company, the Trustee and any agent of the Trustee may treat the
Person in whose name a 2007 Note as the absolute owner thereof (whether or not
such 2007 Note may be overdue) for the purpose of making payment and for all
other purposes.
GOVERNING LAW
The 2007 Notes Indenture and the 2007 Notes will be governed by and
construed in accordance with the laws of the State of New York.
THE TRUSTEE
The 2007 Notes 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 2007 Notes Indenture at the request or direction of any of the
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 2007 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.
The Company will be required to furnish to the Trustee annually a
statement as to the performance by the Company of its obligations under the 2007
Notes Indenture and as to any default in such performance. The Trustee also
serves as the Trustee under the 2006 Notes Indenture.
DESCRIPTION OF CAPITAL STOCK
For a description of the Class A Common Stock and Class B Common Stock
of the Company see the Company's registration statement on Form S-1 (Commission
File No. 333-2432), which description is incorporated herein by reference. See
"Incorporation of Certain Information by Reference."
58
<PAGE> 60
PLAN OF DISTRIBUTION
This prospectus may be used by Goldman Sachs in connection with offers
and sales related to market-making transactions in the shares of Class A Common
Stock, the 2006 Notes and the Exchange Notes effected from time to time.
Goldman Sachs may act as principal or agent in such transactions, including as
agent for the counterparty when acting as principal or agent for both
counterparties, and may receive compensation in the form of discounts and
commissions, including from both counterparties when they act as agent for both
such parties. Such sales will be made at prevailing market prices at the time of
sale, at prices related thereto or at negotiated prices.
The Goldman Sachs Group, L.P. may be deemed to be the owner of
12,099,029 shares of the Company's Class B Common Stock, which such shares
consist of (i) 11,096,078 shares held of record by GS Capital Partners, L.P.
("GS Capital"), (ii) 580,813 shares held of record by Stone Street Fund 1992,
L.P. ("Stone Street"), (iii) 337,163 shares held of record by Bridge Street Fund
1992, L.P. ("Bridge Street") and (iv) 84,975 shares held of record by The
Goldman Sachs Group, L.P. ("GS Group," and, with GS Capital, Stone Street and
Bridge Street, the "Goldman Sachs Entities"). Each of GS Capital, Stone Street
and Bridge Street is an investment limited partnership, the general partner, the
managing general partner or the managing partner of which is an affiliate of GS
Group. GS Group disclaims beneficial ownership of shares held by such investment
partnerships to the extent partnership interests in such partnerships are held
by persons other than GS Group or its affiliates. Each of such investment
partnerships shares voting and investment power with certain of its respective
affiliates. The shares above do not include (i) shares of Class A Common Stock
owned by Goldman Sachs which were acquired in the ordinary course of
market-making transactions, or (ii) shares of Class A Common Stock held in
client accounts for which Goldman Sachs exercises voting or investment
authority, or both. GS Group disclaims beneficial ownership of the shares held
in such client accounts.
Terence M. O'Toole, a Managing Director of Goldman Sachs, has been a
director of the Company since its formation in July 1994. Mr. O'Toole was
elected a director of the Company pursuant to a shareholders agreement among the
Goldman Sachs Entities, Hellman & Friedman and certain of its affiliates (the
"Hellman & Friedman Entities"), John W. Stanton, Chairman and Chief Executive
Officer of the Company, and Theresa E. Gillespie, Senior Vice President of the
Company, and certain of their affiliates (collectively, the "Stanton Entities"),
and Providence Media Partners L.P. ("Providence"). Such agreement provides that
the parties thereto will vote their shares of common stock of the Company in
favor of the election as directors of the Company the Chief Executive Officer of
the Company, one person designated by John W. Stanton and Providence, one person
designated by Goldman Sachs, two persons designated by the Hellman & Friedman
Entities and one person selected by a majority of such designated persons,
subject to the ownership requirements set forth in such agreement. Mr.
O'Toole was designated by Goldman Sachs pursuant thereto.
Goldman Sachs served as a managing underwriter in the Company's May 1996
equity and debt initial public offerings, as a purchaser in its October 1997
private debt offering, and as a financial advisor with respect to the investment
in the Company and one of its subsidiaries by Hutchinson Telecommunications
Limited and one of its affiliates, receiving customary fees therefor.
The Company has been advised by Goldman Sachs that, subject to
applicable laws and regulations, Goldman Sachs currently intend to make a market
in the shares of Class A Common Stock, the 2006 Notes and the Exchange Notes.
However, they are not obligated to do so and any market-making may be
interrupted or discontinued at any time without notice. In addition, such
market-making activity will be subject to the limits imposed by the Securities
Act and the Exchange Act. There can be no assurance that an active trading
market will be developed or sustained.
Goldman Sachs may not confirm sales to any accounts over which they
exercise discretionary authority without the prior specific written approval by
the customer.
59
<PAGE> 61
The Class A Common Stock is quoted on the Nasdaq National Market under
the symbol "WWCA."
Settlement of the Class A Common Stock, the 2006 Notes and the Exchange
Notes will be made in immediately available funds, and all secondary trading
will settle in immediately available funds.
The Company has agreed to indemnify Goldman Sachs against certain
liabilities, including liabilities under the Securities Act.
VALIDITY OF SECURITIES
The validity of the shares of Class A Common Stock, the 2006 Notes and
the 2007 Notes, each as offered hereby, have been passed upon for the Company by
Preston Gates & Ellis LLP, Seattle, Washington. As of the date hereof, attorneys
in Preston Gates & Ellis LLP who have worked on substantive matters for Western
Wireless own less than 50,000 shares of Class A Common Stock. The validity of
the shares of Class A Common Stock and the 2006 Notes, each as offered hereby,
have been passed upon for the underwriters of the Company's public offerings of
the Class A Common Stock and 2006 Notes by Sullivan & Cromwell, Los Angeles,
California. Sullivan & Cromwell has represented and continues to represent
Goldman Sachs in connection with its investment in the Company.
EXPERTS
The financial statements and schedules incorporated by reference in this
prospectus and elsewhere in the registration statement 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 accounting and auditing in giving said
reports.
60
<PAGE> 62
================================================================================
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO
WHICH IT RELATES OR ANY OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY
SUCH SECURITIES IN ANY CIRCUMSTANCES WHICH SUCH OFFER OR SOLICITATION IS
UNLAWFUL. 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 THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information............. 3
Incorporation Of Certain
Information By Reference........ 3
Prospectus Summary................ 5
Risk Factors...................... 10
Use Of Proceeds................... 19
Description Of Senior Subordinated
Notes Due 2006.................. 20
Description Of Senior Subordinated
Notes Due 2007.................. 38
Description of Capital Stock......
Plan Of Distribution.............. 59
Validity Of Securities............ 60
Experts........................... 60
</TABLE>
WESTERN WIRELESS CORPORATION
CLASS A COMMON STOCK(NO PAR VALUE PER SHARE)
10-1/2% SENIOR SUBORDINATED NOTES DUE 2006
10-1/2% SENIOR SUBORDINATED NOTES DUE 2007
GOLDMAN, SACHS & CO.
<PAGE> 63
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the costs and expenses, other than
underwriting discounts and commissions, incurred by the Company in connection
with the initial sale and distribution of Class A Common Stock and Senior
Subordinated Notes registered by the Company:
<TABLE>
<S> <C>
SEC Registration Fee............................. $ 280,164
Nasdaq Listing Fee............................... 107,458
NASD Filing Fee.................................. 46,000
Blue Sky Qualification Fees and Expenses
(including Legal Fees)......................... 275,000
Transfer Agent and Registrar Fees................ 10,000
Legal Fees and Expenses.......................... 1,018,470
Printing Expenses................................ 770,640
Auditor's Fees and Expenses...................... 292,175
Miscellaneous Expenses........................... 803,093
----------
Total........................................ $3,603,000
==========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 23B.08.510 of the Revised Code of Washington authorizes
Washington corporations to indemnify their officers and directors under certain
circumstances against expenses and liabilities incurred in legal proceedings
involving such persons because of their being or having been an officer or
director. The Company's Articles of Incorporation and Bylaws require
indemnification of the Company's officers and directors to the fullest extent
permitted by Washington law. The Company also maintains directors' and officers'
liability insurance.
The Company's Bylaws and Articles of Incorporation provide that the
Company shall, to the full extent permitted by the Washington Business
Corporation Act of the State of Washington, as amended from time to time,
indemnify all directors and officers of the Company. In addition, the Company's
Articles of Incorporation contains a provision eliminating the personal
liability of directors to the Company or its shareholders for monetary damages
arising out of a breach of fiduciary duty. Under Washington law, this provision
eliminates the liability of a director for breach of fiduciary duty but does not
eliminate the personal liability of any director for (i) acts or omissions of a
director that involve intentional misconduct or a knowing violation of law, (ii)
conduct in violation of Section 23B.08.310 of the Revised Code of Washington
(which section relates to unlawful distributions) or (iii) any transaction from
which a director personally received a benefit in money, property or services to
which the director was not legally entitled.
The Company has entered into separate indemnification agreements with
each of its directors and executive officers.
II-1
<PAGE> 64
ITEM 16. LIST OF EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION FOOTNOTE
- ------- ----------- --------
<S> <C> <C> <C>
1.1 -- U.S. Underwriting Agreement........................................... (1)
1.2 -- International Underwriting Agreement.................................. (1)
1.3 -- Underwriting Agreement................................................ (2)
1.4 -- Purchase Agreement.................................................... (3)
3.1 -- Amended and Restated Articles of Incorporation of the Registrant...... (1)
3.2 -- Bylaws of the Registrant.............................................. (1)
4.1 -- Indenture between Western Wireless Corporation and Harris Trust
Company of California, dated October 24, 1996, relating to the
10-1/2% Senior Subordinated Notes Due 2007............................ (3)
4.2 -- Indenture between Western Wireless Corporation and Harris Trust
Company of California, dated May 22, 1996, relating to the 10-1/2%
Senior Subordinated Notes Due 2006.................................... (2)
4.3 -- Form of Supplemental Indenture to be entered into between
Western Wireless Corporation and Harris Trust Company of
California, relating to the 10-1/2% Senior Subordinated Notes Due
2007.................................................................. (3)
4.4 -- Form of Supplemental Indenture to be entered into between
Western Wireless Corporation and Harris Trust Company of
California, relating to the 10-1/2% Senior Subordinated Notes Due
2006.................................................................. (3)
5.1 -- Opinion of Preston Gates & Ellis LLP with respect to Class A Common (1)
Stock.................................................................
5.2 -- Opinion of Preston Gates & Ellis LLP with respect to 10-1/2% Senior
Subordinated Notes Due 2006........................................... (2)
5.3 -- Opinion of Preston Gates & Ellis LLP with respect to 10-1/2% Senior
Subordinated Notes Due 2007........................................... (3)
12.1 -- Computation of Ratio of Earnings to Fixed Charges (3)
23.1 -- Consent of Arthur Andersen LLP
23.2 -- Consents of Preston Gates & Ellis LLP (See Exhibits 5.1, 5.2 and 5.3)
24.1 -- Power of Attorney (3)
25.1 -- Statement of Eligibility of Trustee................................... (2)
25.2 -- Statement of Eligibility of Trustee................................... (3)
</TABLE>
(1) Incorporated herein by reference to the exhibit filed with the Company's
Registration Statement on Form S-1 (Commission File No. 333-2432).
(2) Incorporated herein by reference to the exhibit filed with the Company's
Registration Statement on Form S-1 (Commission File No. 333-2688).
(3) Incorporated herein by reference to the exhibit filed with the Company's
Registration Statement on Form S-1 (Commission File No. 333-14859).
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events after the
effective date of this registration statement (or the most recent
post-effective amendment thereof) which, individually
II-2
<PAGE> 65
or in the aggregate, represent a fundamental change in the information
set forth in this registration statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this registration
statement or any material change to such information in this
registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(4) 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 section 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.
(5) 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 3 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.
(6) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the 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 Act and will
be governed by the final adjudication of such issue.
ITEM 18. FINANCIAL STATEMENTS AND SCHEDULES.
None
II-3
<PAGE> 66
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the city of Issaquah, State of Washington, on this 27th day of
March, 1998.
WESTERN WIRELESS CORPORATION
By /s/ ALAN R. BENDER
--------------------------------------
Alan R. Bender
Senior Vice President, General Counsel
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below on March 27, 1998 by the following
persons in the capacities indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE
---------- -----
<S> <C>
/s/ JOHN W. STANTON Chairman, Chief Executive Officer and
-------------------------------
John W. Stanton Director (Principal Executive Officer)
/s/ DONALD GUTHRIE Vice Chairman and Chief Financial
-------------------------------
Donald Guthrie Officer (Principal Financial Officer)
/s/ PATRICIA MILLER Principal Accounting Officer
-------------------------------
Patricia Miller
* Director
-------------------------------
John L Bunce, Jr.
* Director
-------------------------------
Mitchell R. Cohen
* Director
-------------------------------
Daniel J. Evans
* Director
-------------------------------
Jonathan M. Nelson
* Director
-------------------------------
Terence M. O'Toole
</TABLE>
* By /s/ Alan R. Bender
-------------------------------
Alan R. Bender
Attorney-in-Fact
II-4
<PAGE> 67
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION FOOTNOTE
- ------- ----------- --------
<S> <C> <C> <C>
1.1 -- U.S. Underwriting Agreement........................................... (1)
1.2 -- International Underwriting Agreement.................................. (1)
1.3 -- Underwriting Agreement................................................ (2)
1.4 -- Purchase Agreement.................................................... (3)
3.1 -- Amended and Restated Articles of Incorporation of the Registrant...... (1)
3.2 -- Bylaws of the Registrant.............................................. (1)
4.1 -- Indenture between Western Wireless Corporation and Harris Trust
Company of California, dated October 24, 1996, relating to the
10-1/2% Senior Subordinated Notes Due 2007............................ (3)
4.2 -- Indenture between Western Wireless Corporation and Harris Trust
Company of California, dated May 22, 1996, relating to the 10-1/2%
Senior Subordinated Notes Due 2006.................................... (2)
4.3 -- Form of Supplemental Indenture to be entered into between
Western Wireless Corporation and Harris Trust Company of
California, relating to the 10-1/2% Senior Subordinated Notes Due
2007.................................................................. (3)
4.4 -- Form of Supplemental Indenture to be entered into between
Western Wireless Corporation and Harris Trust Company of
California, relating to the 10-1/2% Senior Subordinated Notes Due
2006.................................................................. (3)
5.1 -- Opinion of Preston Gates & Ellis LLP with respect to Class A Common (1)
Stock.................................................................
5.2 -- Opinion of Preston Gates & Ellis LLP with respect to 10-1/2% Senior
Subordinated Notes Due 2006........................................... (2)
5.3 -- Opinion of Preston Gates & Ellis LLP with respect to 10-1/2% Senior
Subordinated Notes Due 2007........................................... (3)
12.1 -- Computation of Ratio of Earnings to Fixed Charges (3)
23.1 -- Consent of Arthur Andersen LLP
23.2 -- Consents of Preston Gates & Ellis LLP (See Exhibits 5.1, 5.2and 5.3)
24.1 -- Power of Attorney (3)
25.1 -- Statement of Eligibility of Trustee................................... (2)
25.2 -- Statement of Eligibility of Trustee................................... (3)
</TABLE>
(1) Incorporated herein by reference to the exhibit filed with the Company's
Registration Statement on Form S-1 (Commission File No. 333-2432).
(2) Incorporated herein by reference to the exhibit filed with the Company's
Registration Statement on Form S-1 (Commission File No. 333-2688).
(3) Incorporated herein by reference to the exhibit filed with the Company's
Registration Statement on Form S-1 (Commission File No. 333-14859).
II-5
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement of our report dated
February 17, 1998 incorporated by reference in Western Wireless Corporation's
Form 10-K for the year ended December 31, 1997 and to all references to our
firm included in this registration statement.
/s/ Arthur Andersen LLP
Seattle, Washington
March 27, 1998
