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EXHIBIT 4.3
SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT (the "Agreement") is dated as
of October 22, 1999 by and between East/West Communications, Inc., a Delaware
corporation (the "Issuer"), and Omnipoint Corporation, a Delaware corporation
("Omnipoint", or the "Purchaser").
RECITALS
WHEREAS, concurrently herewith, Issuer and Omnipoint are entering
into an Agreement and Plan of Merger (the "Merger Agreement"), pursuant to
which, among other things, the Issuer will merge with and into Omnipoint; and
WHEREAS, upon the terms and conditions set forth in this
Agreement, Issuer has determined to issue and sell, and Purchaser have
determined to purchase, 300,000 shares of Issuer's Class A Common Stock, par
value $0.01 per share (the "Stock");
WHEREAS, the Issuer and the Purchaser desire to set forth certain
rights of the Purchaser with respect to the Stock; and
WHEREAS, it is a condition to the purchase and sale of the Stock
hereunder that the Merger Agreement continue to be in full force and effect on
the closing date of such purchase and sale of Stock.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants,
conditions and promises hereinafter set forth, the parties hereby agree as
follows:
ARTICLE I
PURCHASE AND SALE OF STOCK
Section 1.1 Closing. Subject to the terms and conditions of this
Agreement, at the Closing, Issuer will issue, sell and deliver 300,000 shares of
Stock to Omnipoint for a purchase price of $10 per share payable to Issuer on
the Closing Date.
Section 1.2 Conversion Rights. In the event that between the Closing
Date and the earlier of (i) the Effective Time and (ii) the date on which the
Merger Agreement is terminated, the Issuer issues any shares of Additional
Company Capital Stock (as defined in the Merger Agreement) (other than Company
Common Stock), the Purchaser shall have the right, at its sole option, to
convert all or a portion of its Stock into shares of Additional Company Capital
Stock issued by the Issuer in any Issuance pursuant to and in accordance with
Section 6.2 of the Merger Agreement (the "Conversion Right"). The Purchaser
shall have the right to convert its Stock on the same terms and conditions
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as any other purchaser of shares of such Additional Company Capital Stock
pursuant to such Issuance. In the event that the Purchaser exercises the
Conversion Right and converts a portion of its Stock into shares of Additional
Company Capital Stock in accordance herewith, notwithstanding anything to the
contrary contained herein, the Converted Shares shall be automatically converted
into shares of Issuer's Class A Common Stock on the Right of First Refusal End
Date based on a purchase price of $10 per share of Issuer's Class A Common
Stock.
Section 1.3 Use of Proceeds. Issuer shall use the proceeds from
the sale of the Stock to (i) repay the principal and interest on loans from the
Federal Communications Commission relating to the Issuer's PCS licenses, and
(ii) pay certain legal and accounting expenses incurred in connection with this
Agreement and the transactions contemplated by this Agreement and the Merger
Agreement and general corporate purposes, subject to the limitations set forth
in Section 6.4. Issuer agrees to use any remaining proceeds to redeem Company
Preferred Stock for the Per Share Exchange Amount immediately prior to the
Effective Time, unless, in each case, the Issuer or Omnipoint should determine
that such payment would result in Omnipoint acquiring less than ninety percent
(90%) of the fair market value of the Issuer's "net assets" and less than
seventy percent (70%) of the fair market value of the Issuer's "gross assets",
measured for this purpose, immediately prior to the Effective Time pursuant to
the Merger Agreement. For purposes of determining the percentage of the Issuer's
"net assets" and "gross assets" to be acquired by Omnipoint, the following
assets will be treated as held by the Issuer immediately prior to, but not
acquired by Omnipoint pursuant to the Merger: (i) assets disposed of by the
Issuer prior to the Merger and in contemplation thereof (including, without
limitation, any assets disposed of by the Issuer, other than in the ordinary
course of business, pursuant to a plan or intention existing during the period
ending on the Closing Date (as defined in the Merger Agreement) and beginning
with the commencement of negotiations (whether formal or informal) with
Omnipoint regarding the Merger); (ii) assets used by the Issuer to pay the
Issuer's stockholders, if any, who perfect dissenters' rights in connection with
the Merger; (iii) assets used by the Issuer to pay reorganization expenses or
other liabilities incurred in connection with the Merger; and (iv) assets used
to make distributions, redemptions or other payments (except for regular, normal
distributions) in respect of the capital stock of the Issuer (including payments
treated as such for tax purposes) that are made prior to the Merger and are part
of the plan of the Merger.
ARTICLE II
CLOSING
Section 2.1 Time and Place of Closing. Subject to the conditions set
forth in Section 8.1, the closing of the transactions contemplated by Section
3.1 (the "Closing") shall take place at the offices of Piper & Marbury L.L.P.,
0000 Xxxxxxxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000, at 10:00 a.m. local time
on the date hereof (the "Closing Date"). At the Closing, Issuer shall deliver to
Purchaser duly executed and issued stock certificates evidencing the Shares
purchased thereby
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against payment of the purchase price therefor by wire transfer of immediately
available funds to the account specified therefor by Issuer.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF ISSUER
Section 3.1 Representations and Warranties of Issuer. The Issuer hereby
represents and warrants to the Purchaser:
(1) Incorporation of Representations and Warranties in Merger
Agreement. The representations and warranties of Issuer set forth in Section 4
of the Merger Agreement (together with the Disclosure Schedule) are hereby
incorporated herein by reference, and are hereby made by Issuer to Purchaser as
of the date hereof and the Closing Date, in their entirety with the same force
and effect.
(2) Additional Representations and Warranties. Issuer hereby
represents and warrants to Purchaser the shares of Stock being issued to
Purchaser hereunder, when issued and paid for pursuant to the terms of this
Agreement, will be duly authorized, validly issued, fully paid and
nonassessable, and will be free and clear of any Liens, and shall not be subject
to any preemptive rights of the holders of any other class or series of the
capital stock of Issuer.
(3) Power and Authority; No Violation. The Issuer has full
power and authority to execute, deliver and perform its obligations under this
Agreement and to consummate the transactions contemplated hereby. This Agreement
and all transactions contemplated hereby have been duly and validly authorized
by all necessary action on the part of Issuer and this Agreement constitutes a
legal, valid and binding obligation of Issuer enforceable in accordance with its
terms except as such enforceability may be limited by bankruptcy, insolvency,
moratorium or other similar laws affecting or relating to enforcement of
creditors' rights generally. Neither the execution, delivery or performance of
this Agreement nor the consummation of the transactions contemplated hereby by
Issuer will, with or without the giving of notice or the passage of time, or
both, (i) conflict with, result in a default or loss of rights (or give rise to
any right of termination, cancellation or acceleration) under, or result in the
creation of any Lien, pursuant to (A) any provision of the certificate of
incorporation, by-laws, stockholders agreements or other constituent documents
of Issuer; (B) any material note, bond, indenture, mortgage, deed of trust,
contract, agreement, lease or other instrument or obligation to which Issuer is
a party or by which Issuer or its property may be bound or affected; or (C) any
law, order, judgment, ordinance, rule, regulation or decree to which Issuer is a
party or by which it or its property is bound or affected, other than such
exceptions in the case of subclauses (A), (B) and (C) which would not reasonably
be expected to have a material adverse effect on the transactions contemplated
hereby or on the Issuer; (ii) give rise to any right of first refusal or similar
right with respect to any interest, or any properties or assets, of Issuer; or
(iii) give rise to the Company's right to redeem any shares of Stock. No permit,
consent, approval, authorization, qualification or registration of, or
declaration to or filing with, any governmental or regulatory authority or
agency or third party is required to be obtained or made by Issuer in
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connection with the execution and delivery of this Agreement or the consummation
of the transactions contemplated hereby or thereby in order to (A) render this
Agreement or the transactions contemplated hereby or thereby valid and effective
and (B) enable Issuer to sell the Stock.
(4) Legal Matters. There is no claim, legal action,
counterclaim, suit, arbitration, governmental investigation or other legal,
administrative or tax proceeding, nor any order, decree or judgment, in progress
or pending, or to the knowledge of Issuer threatened, against the Issuer
relating to the right of Issuer to perform its obligations under this Agreement,
nor does Issuer know or have reason to be aware of any basis for the same. There
is outstanding no order, writ, injunction, judgment or decree of any court,
governmental agency or arbitration tribunal applicable to Issuer or binding upon
it or its property which would individually or in the aggregate impair in any
material respect the performance of the obligations of Issuer hereunder or the
consummation of the transactions contemplated by this Agreement other than
orders or decrees involving the wireless telephone industry in general.
(5) Investment Company Act. Issuer is not an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.
(6) No Brokers. Except with respect to the $150,000 placement
fee to be paid by the Issuer to Gabelli & Company, Inc. upon consummation of the
transactions contemplated by this Agreement, no agent, broker, investment
banker, person or firm is or will be entitled to any broker's or finder's fee or
any other commission or similar fee directly or indirectly in connection with
such transactions based in any way on any arrangements, agreements or
understandings made by or on behalf of Issuer or an affiliate thereof, as
defined in Rule 405 under the Securities Act of 1933, as amended (an
"Affiliate"), and Issuer hereby agrees to indemnify the Investor and agrees to
hold harmless the Investor against and in respect of any claims for brokerage
and other commissions relating to such transactions based in any way on any
arrangements, agreements or understandings made by or on behalf of Issuer or an
Affiliate thereof.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
The Purchaser hereby represents and warrants to Issuer:
Section 4.1 Authorization. It has the full power and authority to
enter into this Agreement and to perform all of its obligations hereunder. The
execution, delivery and performance of this Agreement by it have been duly
authorized by all necessary corporate action, and this Agreement constitutes a
valid and binding obligation of it enforceable against it in accordance with its
terms except as may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting creditors' rights generally and by
equitable principles of general applicability. The execution, delivery and
performance of this Agreement by it do not (a) violate any provision of its
certificate of incorporation, by-laws or other constituent documents, (b)
conflict with or constitute a default under any material agreement, indenture or
instrument to which it is a party or by which
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it or its property is bound or (c) violate any statute or order of any court or
Governmental Body applicable to it, except in each case set forth in clauses (b)
or (c) which would not reasonably be expected to have a material adverse effect
on its business taken as a whole or the transactions contemplated hereby.
Section 4.2 Investment Representations. It is an Accredited Investor
within the definition set forth in Rule 501(a) under the Securities Act of 1933,
as amended (the "Securities Act"). It is acquiring the Shares it is purchasing
hereunder for its own account, for investment, and not with a view to, or for
sale in connection with, the distribution thereof or of any interest therein, in
violation of state or federal law. It understands that such shares have not been
registered under the Securities Act, and that such Shares may not be sold or
otherwise disposed of unless registered under the Securities Act and applicable
state securities laws or exempted from registration therefrom.
ARTICLE V
REGISTRATION RIGHTS
Section 5.1 Demand Registrations.
(1) Right to Demand Registration. In the event that the Merger
Agreement is terminated (other than pursuant to Section 10.1(d) of the Merger
Agreement), the holders of not less than twenty (20%) percent of the shares of
Stock beneficially owned by the Purchaser (the "Registrable Securities")
(collectively, the "Offerors"), may request registration under the Securities
Act of all or part of their Registrable Securities. Within seven days after
receipt of any such request, Issuer will give written notice of such request to
all other holders of securities of the Issuer entitled to notice of or the right
to participate in such registrations ("Other Registrable Securities") and will
include in such registration all Other Registrable Securities with respect to
which Issuer has received written requests for inclusion therein within 20 days
after the receipt of Issuer's notice. A registration requested pursuant to this
Section 5.1(a) is referred to herein as a "Demand Registration".
A request pursuant to this Section shall state the number of
Registrable Securities requested to be registered, the intended method of
disposition thereof and the jurisdictions in which registration is desired. In
connection with any registration subject to this Section 5.1(a), the holders of
Registrable Securities included in such registration shall enter into such
underwriting, lock-up and other agreements, and shall execute and complete such
questionnaires and other documents, as are customary in a primary offering.
(2) Number of Demand Registrations. The holders of Registrable
Securities will be entitled to request two (2) Demand Registrations, and Issuer
will pay all Registration Expenses in connection therewith. A registration will
not constitute a Demand Registration (i) until it has become effective, or (ii)
if after it has become effective, the offering of Registrable Securities
pursuant to such registration is interfered with by any stop order, injunction
or other order or requirement of the SEC or other governmental agency or court.
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(3) Priority on Demand Registrations. Issuer will not include
in any Demand Registration any securities which are not Registrable Securities
or Other Registrable Securities without the written consent of the Offerors not
to be unreasonably withheld (and the Offerors may not withhold their written
consent if the Demand Registration is an underwritten offering and the managing
underwriters advise Issuer and the Offerors in writing that in their opinion the
number of Registrable Securities and other securities requested to be included
therein does not exceed the number of securities which can be sold in such
offering without materially adversely affecting such sale). If Other Registrable
Securities are permitted to be included in a Demand Registration which is an
underwritten offering and the managing underwriters advise Issuer in writing
that in their opinion the number of Registrable Securities and Other Registrable
Securities requested to be included exceeds the number of securities which can
be sold in such offering without materially adversely affecting such sale,
Issuer will include in such registration prior to the inclusion of any
securities which are not Registrable Securities the number of Registrable
Securities requested to be included which in the opinion of such managing
underwriters can be sold, pro rata among the respective holders of such
Registrable Securities on the basis of the amount of such securities owned.
(4) Restrictions on Demand Registrations. Issuer may postpone
for up to three months in the aggregate during any twelve month period any
filing or the effectiveness of any registration statement for a Demand
Registration if the Board of Directors of Issuer determines (and Issuer so
certifies by written notice to the Offerors) that such Demand Registration might
reasonably be expected to have an adverse effect on any proposal or plan by
Issuer or any of its Subsidiaries to engage in any material corporate
transaction; provided that in such event, the Offerors initiating the request
for such Demand Registration will be entitled to withdraw such request.
(5) Selection of Underwriters. In the case of a Demand
Registration, the Offerors will have the right to select the investment
banker(s) and manager(s) to administer the offering, subject to Issuer's
approval which will not be unreasonably withheld.
Section 5.2 Piggyback Registrations.
(1) Right to Piggyback Registrations. Whenever Issuer proposes
to register any of its Common Stock under the Securities Act (other than any
registration SEC Form S-4 or SEC Form S-8 or any successor forms), Issuer will
give prompt written notice (in any event within ten business days after its
receipt of notice of any exercise of other demand registration rights) to the
holders of Registrable Securities of its intention to effect such a registration
and will use its best efforts to include in such registration all Registrable
Securities with respect to which Issuer has received written requests for
inclusion therein within 20 days after the receipt of Issuer's notice by such
holders. A request pursuant to this Section 5.2(a) shall state the number of
Registrable Securities requested to be registered. In connection with any
registration subject to this Section 5.2(a), the holders of Registrable
Securities included in such registration shall enter into such underwriting,
lock-up and other agreements, and shall execute and complete such questionnaires
and other documents, as are customary in a secondary offering. Issuer shall have
the right to terminate
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or withdraw any registration initiated by it under this Section 5.2(a) prior to
the effectiveness of such registration whether or not any holders of Registrable
Securities have elected to include any securities in such registration. All
registrations requested pursuant to this Section 5.2(a) are referred to herein
as "Piggyback Registrations". No registration effected under this Section 5.2(a)
shall relieve Issuer of its obligation to effect a Demand Registration pursuant
to Section 5.1.
(2) Priority on Primary Registrations. If a Piggyback
Registration is an underwritten primary registration on behalf of Issuer, and
the managing underwriters advise Issuer in writing that in their opinion the
number of securities requested to be included in such registration exceeds the
number which can be sold without materially adversely affecting such sale,
Issuer will include in such registration (regardless of whether any holder
initially requested such registration) (i) first, the securities Issuer proposes
to sell, (ii) second, those Registrable Securities requested to be included by
the holders thereof which in the opinion of such managing underwriters can be
sold, pro rata among the respective holders thereof on the basis of the amount
of such securities owned, and (iii) third, all Other Registrable Securities
requested to be included in such registration, pro rata among the holders
thereof on the basis of the number of shares owned by such holders.
(3) Priority on Secondary Registrations. If a Piggyback
Registration is an underwritten secondary registration on behalf of holders of
Issue's securities (and in which Issuer is not issuing any securities under such
registration), and the managing underwriters advise Issuer in writing that in
their opinion the number of securities requested to be included in such
registration exceeds the number which can be sold without materially adversely
affecting such offering, Issuer will include in such registration (i) first, the
securities requested to be included in such registration by the holder or
holders who requested such registration (such holders being entitled to
participate in accordance with the relative priorities, if any, as may exist
among them) and (ii) second, Registrable Securities and all Other Registrable
Securities requested to be included in such registration, pro rata among the
holders thereof on the basis of the number of shares owned by such holders.
(4) Selection of Underwriters. In the case of a Piggyback
Registration which is a primary registration on behalf of Issuer, Issuer will
have the right to select any investment banker(s) and manager(s) of nationally
recognized standing to administer the offering.
Section 5.3 No Inconsistent Agreement. Any right given by Issuer to
any holder or prospective holder of Issuer's securities in connection with the
registration of securities shall be conditioned such that it shall be consistent
with the rights of the holders of Registrable Securities provided in this
Agreement and shall not materially adversely affect the right of the holders of
Registrable Securities to participate in Piggyback Registrations in the manner
set forth in this Agreement.
Section 5.4 Lockup Agreement.
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(1) Each Purchaser agrees, and prior to transferring
Registrable Securities will cause its proposed transferee to agree, if requested
by Issuer and the managing underwriters of Registrable Securities, not to sell
or otherwise transfer or dispose of any other Registrable Securities (or other
securities) of Issuer for a period not to exceed 30 days prior to or up to 180
days following the effective date of a registration statement of Issuer filed
under the Securities Act, provided that all officers and directors and
stockholders owning ten percent (10%) or more (on a fully diluted basis,
treating all outstanding options, rights and warrants to acquire equity
securities of Issuer as fully exercised, and treating all securities convertible
into or exchangeable for equity securities of Issuer as fully converted or
exchanged) of Issuer's equity securities shall enter into similar agreements.
Such agreement shall be in writing in a form satisfactory to Issuer and such
underwriter. Issuer may impose stop transfer instructions with respect to the
shares (or securities) subject to the foregoing restriction until the end of
said 90-day period.
(2) Issuer agrees not to effect any public sale or distribution
of its equity securities, or any securities convertible into or exchangeable or
exercisable for such securities, during the ten days prior to and during the
90-day period beginning on the effective date of any underwritten Demand
Registration (except as part of such underwritten registration or pursuant to
registrations on Form S-4 or Form S-8 or any successor form or forms not
available for registering capital stock for sale to the public at large), unless
all of the Registrable Securities included in such registration have been sold.
Section 5.5 Termination of Certain Rights and Obligations.
Notwithstanding the foregoing provisions of this Agreement, the rights to
registration pursuant to Sections 5.1 and 5.2, the obligations of Purchaser
pursuant to Section 5.4(1), and the obligations of Issuer and the holders of 25%
or more of its equity securities pursuant to Section 5.4(2) shall terminate as
to any particular Registrable Securities that shall have been (a) sold in a
registered public offering, (b) sold through a broker, dealer or underwriter in
a public distribution or a public securities transaction in which the transferee
receives a certificate without a securities legend, (c) sold or distributed
pursuant to Rule 144 or (d) eligible for sale under Rule 144 within a 60-day
period.
Section 5.6 Registration Procedures. Whenever the Offerors have
requested that any Registrable Securities be registered pursuant to this
Agreement, Issuer will use its best efforts to effect the registration and the
sale of such Registrable Securities in accordance with the intended method of
disposition thereof, and pursuant thereto Issuer will expeditiously:
(1) prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its best efforts to cause such
registration statement to become and remain effective for a period of not less
than three months; provided that before filing a registration statement or
prospectus or any amendments or supplements thereto, Issuer will furnish to the
counsel selected by the Offerors requesting such registration statement copies
of all such documents proposed to be filed, which documents will be subject to
the review of such counsel before such filing is made, and Issuer will comply
with any reasonable request made by such counsel to make changes to the extent
such documents do not comply in all material respects with the Securities Act;
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(2) prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to such registration statement and
the prospectus used in connection therewith as may be necessary to keep such
registration statement effective for a period of not less than three months and
to comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such registration statement during such
period in accordance with the intended methods of disposition by the sellers
thereof set forth in such registration statement;
(3) furnish to each seller of Registrable Securities such
number of conformed copies of such registration statement, each amendment and
supplement thereto (in each case including all exhibits), the prospectus
included in such registration statement (including each preliminary prospectus)
and such other customary documents as such seller may reasonably request in
order to facilitate the disposition of the Registrable Securities owned by such
seller;
(4) use its best efforts to register or qualify such
Registrable Securities under such other securities or blue sky laws of such
jurisdictions as any seller reasonably requests and do any and all other acts
and things which may be reasonably necessary or advisable to enable such seller
to consummate the disposition in such jurisdictions of the Registrable
Securities owned by such seller (provided that Issuer will not be required to
(i) qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this subparagraph, (ii) subject itself
to taxation in any such jurisdiction, or (iii) consent to service of process
except as required by the securities or blue sky laws in any such jurisdiction);
(5) notify each seller of such Registrable Securities at any
time when a prospectus relating thereto is required to be delivered under the
Securities Act of Issuer's becoming aware that the prospectus included in such
registration statement, as then in effect, contains an untrue statement of a
material fact or omits any material fact necessary to make the statements
therein not misleading in light of the circumstances under which they were made,
and, at the written request of any such seller, Issuer will prepare a supplement
or amendment to such prospectus so that, as thereafter delivered to the
Purchaser of such Registrable Securities, such prospectus will not contain an
untrue statement of a material fact or omit to state any material fact necessary
to make the statements therein not misleading in light of the circumstances
under which they were made;
(6) use its best efforts to cause all such Registrable
Securities covered by such registration statement to be listed or quoted on the
principal securities exchange or national automated quotation system, if any, on
which similar securities issued by Issuer are then listed or quoted.
(7) provide a transfer agent and registrar for all such
Registrable Securities covered by such registration statement not later than the
effective date of such registration statement;
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(8) in the event the offering is an underwritten offering, use
its best efforts to obtain a "cold comfort" letter from the independent public
accountants for Issuer in customary form and covering such matters of the type
customarily covered by such letters;
(9) enter into such customary agreements (including
underwriting agreements in customary form) and take all such other actions as
the holders of a majority of the Registrable Securities being sold or the
underwriters, if any, reasonably request in order to expedite or facilitate the
disposition of such Registrable Securities; and
(10) upon execution and delivery of such customary
confidentiality agreements as Issuer shall reasonably request, make available
for inspection by any seller of Registrable Securities covered by such
registration statement, any underwriter participating in any disposition
pursuant to such registration statement, and any attorney, accountant or other
agent retained by any such seller or underwriter, all pertinent financial and
other records, pertinent corporate documents and properties of Issuer, and cause
Issuer's officers, directors, employees and independent accountants to supply
all information reasonably requested by any such seller, underwriter, attorney,
accountant or agent in connection with such registration statement.
Issuer will make generally available to the holders of Registrable
Securities an earnings statement (which need not be audited) for the twelve
months beginning after the effective date of a registration statement as soon as
reasonably practicable after the end of such period, which earnings statement
shall satisfy Section 11(a) of the Securities Act.
Issuer will, at all times after Issuer has filed a registration
statement with the SEC pursuant to the requirements of either the Securities Act
or the Exchange Act, file all reports required to be filed by it under the
Securities Act and the Exchange Act and the rules and regulations adopted by the
SEC thereunder, and take such further action as any holder or holders of
Registrable Securities may reasonably request, all to the extent required to
enable such holders to be eligible to sell Registrable Securities pursuant to
Rule 144 adopted by the SEC under the Securities Act, as such rule may be
amended from time to time, or any successor rule or regulation hereafter adopted
by the SEC. Upon request, Issuer will deliver to holders of Registrable
Securities a written statement as to whether it has complied with such
requirements.
Section 5.7 Registration Expenses.
(1) All expenses incident to Issuer's performance of or
compliance with this Agreement, including, without limitation, all registration
and filing fees, fees and expenses of compliance with securities or blue sky
laws, word processing, duplicating and printing expenses, messenger and delivery
expenses, and fees and disbursements of counsel for Issuer and all independent
certified public accountants (including, but not limited to, fees and
disbursements relating to the "cold comfort" letter described in Section 5.6(8))
and other Persons retained by Issuer (all such expenses being herein called
"Registration Expenses"), will be borne by Issuer. Discounts and commissions to
underwriters shall not be considered Registration Expenses for purposes of this
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Agreement and will be borne by the holders of Registrable Securities. Issuer
will, in any event, pay its internal expenses (including, without limitation,
all salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit or quarterly review, the
expense of any liability insurance and the expenses and fees for listing the
securities to be registered on each securities exchange on which similar
securities issued by Issuer are then listed or on a national automated quotation
system.
(2) In connection with each Demand Registration and Piggyback
Registration, Issuer will reimburse the holders of Registrable Securities
covered by such registration for the reasonable fees and disbursements of one
counsel chosen by the holders of a majority of the Registrable Securities
included in such registration, provided that the costs and expenses of such
counsel in connection with any such registration will not exceed $25,000.
(3) To the extent expenses are not required to be paid by
Issuer, each holder of securities included in any registration hereunder will
pay those expenses allocable to the registration of such holder's securities so
included, and any expenses not so allocable will be borne by all sellers of
securities included in such registration in proportion to the aggregate selling
price of the securities to be so registered.
Section 5.8 Indemnification.
(1) In the event of any registration of any Registrable
Securities under the Securities Act pursuant to this Agreement, Issuer agrees to
indemnify, to the fullest extent permitted by law, each holder of Registrable
Securities covered by the applicable registration statement, its respective
officers, directors, shareholders or general or limited partners or members and
each Person who controls such holder within the meaning of the Securities Act
(each, a "Purchaser Indemnitee"), as follows:
(2) against all losses, claims, damages, liabilities and
expenses to which a Purchaser Indemnitee may become subject under the Securities
Act, common law or otherwise, insofar as such losses, claims, damages,
liabilities or expenses arise out of or are caused by any untrue or alleged
untrue statement of material fact contained in any registration statement,
prospectus or preliminary prospectus or any amendment thereof or supplement
thereto relating to such securities or any omission or alleged omission of a
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances under which they were made,
except insofar as the same are caused by or contained in any information
furnished in writing to Issuer by any holder of Registrable Securities expressly
for use therein or by any holder of Registrable Securities' failure to deliver a
copy of the registration statement or prospectus or any amendments or
supplements thereto;
(3) against all losses, claims, damages, liabilities and
expenses to the extent of the aggregate amount paid in settlement of any
litigation, or investigation or proceeding by any governmental agency or body,
commenced or threatened, or of any claim whatsoever based upon
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12
any such untrue statement of a material fact or omission of a material fact, or
any such alleged untrue statement of a material fact or omission of a material
fact, if such settlement is effected with the prior written consent of Issuer,
except insofar as the same are caused by or contained in any information
furnished in writing to Issuer by any holder of Registrable Securities expressly
for use therein or by any holder's failure to deliver a copy of the registration
statement or prospectus or any amendments or supplements thereto; and
(4) against all expenses reasonably incurred by such holder in
connection with investigating, preparing or defending against any litigation, or
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue statement of a
material fact or omission of a material fact, or any such alleged untrue
statement of a material fact or omission of a material fact, to the extent that
any such expense is not paid under clause (i) or (ii) above, except insofar as
the same are caused by or contained in any information furnished in writing to
Issuer by any holder of Registrable Securities expressly for use therein or by
such holder's failure to deliver a copy of the registration statement or
prospectus or any amendments or supplements thereto.
In connection with an underwritten offering, Issuer will indemnify such
underwriters, their officers and directors and each Person who controls such
underwriters within the meaning of the Securities Act to the same extent as
provided above with respect to the indemnification of the Purchaser Indemnitees.
(5) In connection with any registration statement in which a
holder of Registrable Securities is participating, each such holder will furnish
to Issuer in writing such information and affidavits as Issuer reasonably
requests for use in connection with any such registration statement or
prospectus and, to the extent permitted by law, will indemnify Issuer, its
directors and officers and each Person who controls Issuer within the meaning of
the Securities Act (each, an "Issuer Indemnitee") against any losses, claims,
damages, liabilities and expenses resulting from any untrue statement of
material fact contained in the registration statement, prospectus or preliminary
prospectus or any amendment thereof or supplement thereto or any omission of a
material fact required to be stated therein or necessary to make the statements
therein not misleading, but only to the extent that such untrue statement or
omission is contained in any information or affidavit so furnished in writing by
such holder expressly for use in the preparation of such registration statement,
prospectus or preliminary prospectus; provided that the obligation to indemnify
will be several, not joint and several, among such holders of Registrable
Securities and the liability of each such holder of Registrable Securities will
be in proportion to and limited to the net amount received by such holder from
the sale of Registrable Securities pursuant to such registration statement,
prospectus or preliminary prospectus.
(6) Any Person entitled to indemnification hereunder will (i)
give prompt written notice to the indemnifying party of any claim with respect
to which it seeks indemnification and (ii) unless in such indemnified party's
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist with respect to such claim, permit such
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indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party. If such defense is assumed, the
indemnifying party will not be subject to any liability for any settlement made
by the indemnified party without its consent (but such consent will not be
unreasonably withheld). An indemnifying party who is not entitled to, or elects
not to, assume the defense of a claim will not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified hereunder by such
indemnifying party with respect to such claim, unless in the reasonable judgment
of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim in which case such indemnified party shall have the right to employ one
counsel. Failure to give prompt written notice shall not release the
indemnifying party from its obligations hereunder, except to the extent that the
indemnifying party is actually prejudiced by such failure to give notice.
(7) The indemnification provided for under this Agreement will
remain in full force and effect regardless of any investigation made by or on
behalf of the indemnified party or any officer, director or controlling Person
of such indemnified party and will survive the transfer of securities. Issuer
also agrees to make such provisions as are reasonably requested by any
indemnified party for contribution to such party in the event Issuer's
indemnification is unavailable for any reason.
Section 5.9 Contribution. In order to provide for just and equitable
contribution in circumstances under which the indemnity contemplated by Section
5.8 is for any reason not available, the parties required to indemnify by the
terms thereof shall contribute to the aggregate losses, claims, damages,
liabilities and expenses of the nature contemplated by such indemnity agreement
incurred by any Purchaser Indemnitee, any Issuer Indemnitee and one or more of
the underwriters, except to the extent that contribution is not permitted under
Section 11(f) of the Securities Act. In determining the amounts which the
respective parties shall contribute, there shall be considered the parties'
relative fault concerning the matter with respect to which the claim was
asserted, knowledge and access to information concerning the matter with respect
to which the claim was asserted, the opportunity to correct and prevent any
statement or omission and any other equitable considerations appropriate under
the circumstances. Issuer and each Person selling securities agree with each
other that no seller of Registrable Securities shall be required to contribute
any amount in excess of the amount such seller would have been required to pay
to an indemnified party if the indemnity under Section 6.8 were available. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. Issuer and each such
seller agree with each other, and the underwriters of the Registrable Securities
if requested by such underwriters, that it would not be equitable if the amount
of such contribution were determined by pro rata or per capita allocation (even
if the underwriters were treated as one entity for such purpose) or for the
underwriters' portion of such contribution to exceed the percentage that the
underwriting discount bears to the initial public offering price of the
Registrable Securities. For purposes of this Section 5.9, each Person, if any,
who controls an underwriter within the meaning of Section 15 of the Securities
Act shall have the same rights to contribution as such underwriter, and each
director and each officer of Issuer who signed the registration statement, and
each Person,
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if any, who controls Issuer or a seller of Registrable Securities within the
meaning of Section 15 of the Securities Act, shall have the same rights to
contribution as Issuer or a seller of Registrable Securities, as the case may
be.
Section 5.10 Participation in Underwritten Registrations. No Person
may participate in any registration hereunder which is underwritten unless such
Person (a) agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Person or Persons entitled hereunder
to approve such arrangements and (b) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
required under the terms of such underwriting arrangements.
Section 5.11 Recapitalization of Nonvoting Stock. At any time any
holder of non-voting Registrable Securities wishes to sell such shares pursuant
to a public offering of shares of voting common stock, Issuer shall cause such
shares to be recapitalized into or exchanged for shares of voting common stock,
such recapitalization or exchange to become effective at such time as the
registration statement pertaining to such shares has been filed with and
declared effective by the SEC.
ARTICLE VI
ADDITIONAL RIGHTS AND COVENANTS
Section 6.1 Cooperation and Full Access. Issuer shall give to
Purchaser and its counsel, accountants, advisers and other representatives,
reasonable access at all times during reasonable business hours and on
reasonable notice, to all the offices, properties, contracts, books, records,
personnel and affairs of Issuer or in any way relating to or connecting with the
business or its assets. Issuer shall furnish, and shall direct its independent
accountants and legal counsel to furnish, to Purchaser all such documents and
information concerning the assets, properties, liabilities and affairs of Issuer
as Purchaser may from time to time reasonably request.
Section 6.2 Right of First Refusal. Subject to Paragraph (9) of this
Section 6.2, in the event that the Merger Agreement is terminated for any reason
(other than pursuant to Section 10.1(d) of the Merger Agreement), Purchaser
shall have a right of first refusal (the "Right of First Refusal") with respect
to the sale, exchange or other disposition of any or all of the PCS licenses
held by Issuer (each, a "PCS License" and collectively, the "PCS Licenses")
other than any sale, exchange or other disposition of any PCS License to any
Affiliate of Issuer who agrees to be bound by and comply with the provisions of
this Section 6.2. In the event that the Merger Agreement is terminated for any
reason (other than pursuant to Section 10.1(d) of the Merger Agreement), Issuer
shall not sell, exchange or otherwise dispose of any PCS License (other than any
sale, disposition or exchange of any PCS License to any Affiliate of Issuer who
agrees to be bound by and comply with the provisions of this Section 6.2) unless
it shall have first complied with this Section 6.2. The Right of First Refusal
shall operate as set forth below, and extend for two (2) years from the date of
termination of the Merger Agreement:
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(1) Within three (3) business days of commencement of the
negotiation of a term sheet, letter of intent, or letter of interest, in each
case, with respect to any sale, exchange or other disposition of any PCS
License, whether binding or non-binding, or preparation of a definitive
agreement to sell, exchange or otherwise dispose of one or more of its PCS
Licenses (each, a "Negotiation"), Issuer shall deliver to Purchaser a written
notice of such Negotiation and shall use commercially reasonable efforts to
inform Purchaser of such Negotiation in a timely manner and to provide Purchaser
with all information as may be reasonably requested with respect to such
Negotiation including, without limitation, any documentation with respect
thereto. Upon agreement of the definitive terms of a proposed transaction,
Issuer shall provide to Purchaser a written notice of any bona fide proposed
sale, exchange or other disposition of one or more PCS Licenses which shall (w)
identify the PCS License or Licenses proposed to be sold, exchanged or otherwise
disposed of (the "Subject Licenses"), (x) describe the consideration and other
terms upon which the Subject Licenses are to be sold, exchanged or otherwise
disposed of, (y) identify the persons or entities to or with whom the Subject
Licenses are to be sold, exchanged or otherwise disposed of (the "Proposed
Buyer"), and (z) offer to sell, exchange or dispose of the Subject Licenses to
Purchaser on equivalent or better terms (the "First Refusal Offer").
(2) To accept a First Refusal Offer, Purchaser must deliver a
written notice to Issuer within 30 days of receipt of the First Refusal Offer,
setting forth Purchaser's irrevocable election to accept the First Refusal Offer
to purchase all but not less than all the Subject Licenses on the terms set
forth therein (the "Acceptance"). The Acceptance will be accompanied by
reasonable written evidence demonstrating that Purchaser has sufficient cash on
hand or commitments (the terms of which are consistent with customary commercial
lending practices for fully-underwritten financing commitments) available to
consummate the transactions contemplated by the Acceptance. If Purchaser does
not deliver such evidence together with the Acceptance in form and substance
reasonably acceptable to Issuer, Purchaser shall be deemed to have failed to
deliver the Acceptance within the 30-day time period contemplated by the first
sentence of this Section 6.2(2).
(3) In the event that a proposed transaction with a Proposed
Buyer envisions receipt by the Issuer of consideration other than cash for the
Subject Licenses, Purchaser's Acceptance of a First Refusal Offer may include
consideration in the form of cash, one or more promissory notes, the capital
stock the Purchaser (or its successor or parent entity), or any combination
thereof (the "Purchaser's Consideration"). If, within three days of receipt of
the Acceptance, Issuer disputes that Purchaser's Consideration is equal to or
greater in value than the offer of the Proposed Buyer (the "Proposed Buyer's
Consideration"), Issuer shall so inform Purchaser in writing and such dispute
shall be resolved as follows:
(a) If Issuer informs Purchaser that it deems
Purchaser's Acceptance to be inferior to the proposed transaction agreed to with
the Proposed Buyer, then the parties shall engage Xxxxx & Co. (the "Bank") to
determine whether Purchaser's Consideration is inferior to Proposed Buyer's
Consideration, and recommend what changes, if any, would make Purchaser's
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Consideration equal in value to Proposed Buyer's Consideration (the
"Recommendation"). The determinations of the Bank shall be binding, final and
conclusive upon Issuer and Purchaser.
(b) In the event that Purchaser's Consideration is
appraised to be equal to or greater in value than Proposed Buyer's
Consideration, Issuer shall pay all costs of the Recommendation hereunder. In
the event that Purchaser's Consideration is appraised to be inferior to Proposed
Buyer's Consideration, Purchaser shall be pay all costs of the Recommendation
hereunder.
(c) In the event that the Bank has determined that
Purchaser's Consideration is inferior to Proposed Buyer's Consideration,
Purchaser shall have three (3) days to submit a revised Acceptance containing
the changes set forth in the Recommendation (the "Revised Acceptance"). If
Purchaser submits the Revised Acceptance within such three (3) day period to
Issuer, Issuer shall accept the Revised Acceptance and shall proceed to
consummate the transaction with Purchaser, as set forth in Section 6.2(b).
(4) If Issuer fails to notify Purchaser of its challenge to
Purchaser's Acceptance within three (3) days after its receipt thereof, Issuer
shall be deemed to have accepted the Acceptance and shall proceed to consummate
the transaction with Purchaser, as set forth in Section 6.2(6).
(5) If Purchaser fails to deliver the Acceptance within the
30-day time period referred to in Section 6.2(2), or the Revised Acceptance
within the 3-day period referred to in Section 6.3(d), Issuer shall be free to
proceed with the sale, exchange or other disposition of the Subject Licenses to
the Proposed Buyer.
(6) If Purchaser delivers to Issuer an Acceptance within the
30-day time frame contemplated by Section 6.2(2) or the Revised Acceptance
within the 3-day time frame contemplated by Section 6.2(3)(d), as the case may
be, and otherwise complies with the requirements of Section 6.2(2), Issuer and
Purchaser shall proceed to consummate the sale of the Subject Licenses by Issuer
to Purchaser contemplated by the Acceptance or the Revised Acceptance, as the
case may be, as soon as practicable and in any event on or before the fifteenth
(15th) day following the later of (i) expiration or termination of the
applicable waiting period under the HSR Act (as defined in the Merger Agreement)
and (ii) receipt of the written consent of the FCC to the transfer of such
Subject Licenses (the "Right of First Refusal FCC Consent"). Notwithstanding the
foregoing, if the applicable waiting period under the HSR Act has not expired or
been terminated within 270 days, or the Right of First Refusal FCC Consent has
not been obtained within 360 days (the "Consent Period End Date"), in each case,
of the date of Acceptance or the Revised Acceptance, as the case may be, Issuer
shall be free to proceed with the sale, exchange or other disposition of such
Subject Licenses to any third party on any terms acceptable to Issuer at any
time without again complying with the terms of this Section 6.2.
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(7) Purchaser and Issuer shall cooperate as necessary to
prepare and file, within five (5) business days following receipt by Issuer of
the Acceptance or the Revised Acceptance, as the case may be, from Purchaser,
(i) the notification forms required pursuant the HSR Act, and (ii) such
applications to the FCC as required to obtain the Right of First Refusal FCC
Consent. Thereafter, Issuer and Purchaser shall cooperate as reasonably
necessary to obtain expiration or termination of the waiting period required
under the HSR Act, and to obtain the Right of First Refusal FCC Consent.
(8) This Section 6.2 shall terminate and be of no further force
and effect on the second anniversary of the date on which the Merger Agreement
is terminated (the "Right of First Refusal End Date").
(9) In the event that either (i) with respect to any First
Refusal Offer, the Right of First Refusal FCC Consent is not obtained by the
Consent Period End Date with respect to such First Refusal Offer based on the
FCC's rejection or denial of an application to assign the Subject Licenses of
such First Refusal Offer to the Purchaser for a reason that would also apply to
any application for Issuer to assign to Purchaser any of the PCS Licenses that
were not included in the Subject Licenses, or (ii) the Merger Agreement is
terminated as a result of failure to receive FCC CONSENT based on the FCC's
rejection or denial of an application to approve the Merger due to the
Purchaser's ineligibility to hold any of the PCS Licenses, the Purchaser shall
no longer have the Right of First Refusal or the rights provided by this Section
6.2; provided, that, notwithstanding anything to the contrary contained herein,
the Purchaser may assign the Right of First Refusal and its rights under this
Section 6.2 to another purchaser of its choosing that shall be eligible to hold
any of the PCS Licenses in accordance with the applicable FCC rules and
regulations.
Section 6.3 Transactions, Agreements, etc. Except as expressly
provided in the Merger Agreement, Issuer shall not enter into any transaction or
contract, or take (or omit to take) any action which would, or is reasonably
likely to, (i) result in any of Issuer's representations or warranties contained
in this Agreement not being true and correct as of the Subsequent Closing Date
or (ii) prevent Issuer from performing, satisfying and complying with all of its
covenants and agreements contained in this Agreement.
Section 6.4 Fees and Expenses.
(a) Issuer shall incur no more than $500,000 in legal
and accounting fees and expenses in connection with the negotiation,
documentation and consummation of the transactions contemplated by this
Agreement and the Merger Agreement.
(b) Simultaneously with the execution of this Agreement,
Issuer shall place in escrow $150,000 (such amount, together with all interest
thereon, collectively the "Escrow Fund"). In the event the Merger Agreement is
terminated in accordance with its terms, the Escrow Fund shall be released to
Gabelli & Company, Inc. in full satisfaction of all of Issuer's obligations for
payment of investment banker, broker, finder or similar fees. In the event that
the transactions
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contemplated by the Merger Agreement have been consummated, at the Closing (as
defined in the Merger Agreement), the Escrow Fund shall be released to
Purchaser.
Section 6.5 Restrictions on Transfer.
(a) Purchaser understands and agrees that the Stock it
will be acquiring has not been registered under the Securities Act of 1933 (the
"Securities Act"), and that, accordingly, the Stock will not be transferable
except as permitted under various exemptions contained in the Securities Act, or
upon satisfaction of the registration and prospectus delivery requirements of
the Securities Act. Purchaser acknowledges that it must bear the economic risk
of its investment in the Stock for an indefinite period of time because the
Stock has not been registered under the Securities Act and therefore cannot be
sold unless they are subsequently registered or an exemption from registration
is available.
(b) Purchaser agrees with Issuer as follows:
(i) The certificates evidencing the shares of
Stock it has agreed to purchase, and each certificate issued in transfer
thereof, will bear the following legend:
"THE SECURITIES EVIDENCED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 AND MAY NOT BE
SOLD OR TRANSFERRED UNLESS THERE IS AN
EFFECTIVE REGISTRATION STATEMENT COVERING
SUCH SECURITIES OR THE COMPANY RECEIVES AN
OPINION OF COUNSEL (WHICH COUNSEL AND
OPINION ARE REASONABLY SATISFACTORY TO THE
COMPANY) STATING THAT SUCH SALE OR TRANSFER
IS EXEMPT FROM THE REGISTRATION AND
PROSPECTUS DELIVERY REQUIREMENTS OF SUCH
ACT."
(ii) The certificates representing the Shares and each
certificate issued in transfer thereof, will also bear any legend required under
any applicable state securities laws.
(iii) Absent an effective registration statement under the
Securities Act covering the disposition of the Company's securities acquired by
Purchaser, Purchaser will not sell, transfer, assign, pledge, hypothecate or
otherwise dispose of any or all of such securities without first providing the
Issuer with an opinion of counsel (which counsel and opinion are reasonably
satisfactory to the Issuer) that such disposition is exempt from the
registration and prospectus delivery requirements of the Securities Act and has
been registered or qualified under (or is exempt from the registration and
qualification requirement of) any applicable state securities laws.
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ARTICLE VII
CLOSING CONDITIONS
Section 7.1 Conditions to Purchaser's Obligations at the
Closing. The obligations of Purchaser under this Agreement are subject to the
fulfillment on or before the Closing of each of the following conditions:
(1) Performance. Issuer shall have executed and delivered
certificates representing the Shares, and shall have performed and complied with
all agreements, covenants and conditions contained in this Agreement that are
required to be performed or complied with by it on or before the Closing.
(2) Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated at the Closing and
all documents incident thereto shall be reasonably satisfactory in form and
substance to Purchaser and its counsel, and Purchaser shall have received all
such counterpart original, certified and other copies of such documents as
Purchaser may reasonably request.
(3) No Adverse Action. There shall not have been adopted or
enacted any statute, rule or regulation prohibiting or imposing any material
condition on the transactions contemplated by this Agreement, nor shall there
have been instituted or pending any action or proceeding by or before any court
or governmental authority or other regulatory or administrative agency or
commission, domestic or foreign, by any government or governmental authority,
nor shall there be any determination by any government, governmental authority,
regulatory or administrative agency or commission which, in either case, seeks
to restrain, enjoin or impose any material condition on the transactions
contemplated by this Agreement or the Merger Agreement, or would require Issuer
or Purchaser, in the reasonable opinion of Purchaser, to take any action or do
anything in connection with the foregoing that may reasonably be expected to
have a material adverse effect to their respective businesses or materially
impair the ownership or operation of all or a material portion of the business,
assets or properties presently owned by Issuer or any of its Subsidiaries or to
be acquired by Purchaser pursuant to the Merger Agreement.
(4) Opinion of Company Counsel. Purchaser shall have received
from Xxxxxx & Xxxxxxx, counsel to Issuer, a legal opinion addressed to
Purchaser, dated as of the Closing Date, in the form and substance reasonably
satisfactory to Purchaser.
(5) Consents. All consents, approvals and authorizations of,
and filings, registrations and qualifications with, any governmental authority
or any other party on the part of Issuer required in connection with the
consummation of the transactions contemplated hereby shall have been obtained or
made and shall be in full force and effect.
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(6) Secretary's Certificate. Purchaser shall have received a
Certificate of the Secretary of Issuer (i) certifying that no document has been
filed relating to or affecting the Charter of Issuer after the date of the
Certificate of the Secretary of State of the State of Delaware delivered
pursuant to clause (iii) of this subsection, (ii) certifying the names and true
signatures of each officer of Issuer who has been authorized to execute and
deliver this Agreement and any other document delivered by Issuer pursuant to
the Closing, (iii) attaching thereto a copy of the Charter certified as of a
recent date by the Secretary of State of Delaware, and a true and complete copy
of Bylaws of Issuer, as in full force and effect at the Closing Date and (iv)
attaching copies of resolutions duly adopted by the Board of Directors (and
stockholders, if applicable) authorizing the execution and delivery of this
Agreement and each of the other documents delivered by Issuer pursuant to the
Closing, the issuance, delivery and sale of the Shares and the performance of
the transactions contemplated by this Agreement, and certifying that such
resolutions were duly adopted, are in full force and effect and have not been
rescinded or amended as of the Closing Date.
(7) Voting Agreement. Purchaser shall have received a Voting
Agreement, in the form circulated among the parties with this Agreement,
executed by Issuer stockholder Aer Force Communications, Inc.
(8) Additional Documents. Purchaser shall have received such
certificates, documents and information as they may reasonably request in order
to establish satisfaction of the conditions set forth in this Article VII.
Section 7.2 Conditions to Issuer's Obligations at the Closing.
The obligations of Issuer to Purchaser under this Agreement are subject to the
fulfillment on or before the Closing of each of the following conditions by
Purchaser:
(1) Payment of Purchase Price. Purchaser shall have delivered
the purchase price for its Shares in accordance with Section 1.1.
(2) Consents. All consents, approvals and authorizations of,
and filings, registrations and qualifications with, any governmental authority
or any other party on the part of Purchaser required in connection with the
consummation of the transactions contemplated hereby shall have been obtained or
made and shall be in full force and effect.
(3) Secretary's Certificate. Issuer shall have received a
Certificate of the Secretary of Purchaser (i) certifying that no document has
been filed relating to or affecting the Charter of Purchaser after the date of
the Certificate of the Secretary of State of the State of Delaware delivered
pursuant to clause (iii) of this subsection, (ii) certifying the names and true
signatures of each officer of Purchaser who has been authorized to execute and
deliver this Agreement and any other document delivered by Purchaser pursuant to
the Closing, (iii) attaching thereto a copy of the Charter certified as of a
recent date by the Secretary of State of Delaware, and a true and complete copy
of Bylaws of Purchaser, as in full force and effect at the Closing Date and (iv)
attaching copies of resolutions duly adopted by the Board of Directors (and
stockholders, if
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applicable) authorizing the execution and delivery of this Agreement and each of
the other documents delivered by Purchaser pursuant to the Closing, the
issuance, delivery and sale of the Shares and the performance of the
transactions contemplated by this Agreement, and certifying that such
resolutions were duly adopted, are in full force and effect and have not been
rescinded or amended as of the Closing Date.
ARTICLE VIII
TERMINATION
8.1 Termination. This Agreement may be terminated:
(1) by mutual written agreement of the parties hereto; or
(2) by either Issuer or Purchaser upon consummation of the
transactions contemplated by the Merger Agreement.
8.2 Effect of Termination. If this Agreement is terminated pursuant
to Section 8.1, this Agreement shall become void and of no effect without
liability of any party (or any stockholder, director, officer, employee, agent,
consultant or representative of such party) to the other parties hereto, except
that the agreements set forth in Article V (Registration Rights) shall survive
the termination of this Agreement and shall terminate in accordance with the
terms, if any, set for in that Article. No such termination shall relieve any
Party of any liability or damages resulting from any breach by such party of
this Agreement.
8.3 Fees and Expenses. All costs and expense incurred in connection
with this Agreement shall be paid by the party incurring such cost or expense
whether or not the transactions contemplated hereby occur.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including facsimile
transmission) and shall be given,
if to Purchaser, to:
Omnipoint Corporation
Three Bethesda Metro Center
Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
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with copies to:
Piper & Marbury L.L.P.
0000 Xxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxx X. Xxxxxx, Xx., Esq.
Phone: (000) 000-0000
Fax: (000) 000-0000
If to Issuer, to:
East/West Communications, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxx, Xxx Xxxx 00000
Attention: Xxxxxxxx X. Xxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
With a copy to:
Xxxxxx & Xxxxxxx
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxx Xxxxxx, Esq.
Xxxxxx X. Xxxxxx, Esq.
Phone: (000) 000-0000
Fax: (000) 000-0000
or such other address or facsimile number as such party may hereafter specify
for the purpose by notice to the other parties hereto. All such notices,
requests and other communications shall be deemed received on the date of
receipt by the recipient thereof if received prior to 5:00 p.m. on a Business
Day, in the place of receipt. Otherwise, any such notice, request or
communication shall be deemed not to have been received until the next
succeeding Business Day in the place of receipt.
Section 9.2 Survival of Warranties. The warranties,
representations, certifications and covenants of Issuer and Purchaser contained
in or made pursuant to this Agreement shall survive each of (a) the execution
and delivery of this Agreement, and (b) the Closing, for a period of six months
following the Closing, and shall in no way be affected by any investigation of
the subject matter thereof made by or on behalf of Purchaser.
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Section 9.3 Indemnification. Issuer agrees to indemnify the
Purchaser and its Affiliates, and the shareholders, members, managers, officers,
employees, agents and or legal representatives of any of them (each, a
"Purchaser Indemnified Party") and to hold each Purchaser Indemnified Party
harmless from and against any and all direct or indirect liabilities, claims,
losses, damages, costs and expenses of any kind (including, without limitation,
the reasonable fees and disbursements of such Purchaser Indemnified Party's
counsel in connection with any investigative, administrative or adjudicative
proceeding, whether or not either Purchaser shall be designated a party
thereto), together with any and all costs and expenses associated with the
investigation of the same and/or the enforcement of the provisions hereof
(collectively, "Losses"), which may be incurred by such Purchaser Indemnified
Party relating to, based upon, resulting from or arising out of (a) the breach
by Issuer of any representation, warranty, covenant or agreement of Issuer
contained herein, (b) this Agreement or the transactions contemplated hereby,
subject, in the case of the registration rights described in Article V, to the
provisions set forth in Section 5.8. Issuer shall reimburse each Purchaser
Indemnified Party promptly for all such Losses as they are incurred by such
Purchaser Indemnified Party.
Purchaser agrees to indemnify the Issuer and its Affiliates, and
the shareholders, members, managers, officers, employees, agents and or legal
representatives of any of them (each, an "Issuer Indemnified Party") and to hold
each Issuer Indemnified Party harmless from and against any and all direct or
indirect liabilities, claims, losses, damages, costs and expenses of any kind
(including, without limitation, the reasonable fees and disbursements of such
Issuer Indemnified Party's counsel in connection with any investigative,
administrative or adjudicative proceeding, whether or not either Purchaser shall
be designated a party thereto), together with any and all costs and expenses
associated with the investigation of the same and/or the enforcement of the
provisions hereof (collectively, "Losses"), which may be incurred by such Issuer
Indemnified Party relating to, based upon, resulting from or arising out of (a)
the breach by Purchaser of any representation, warranty, covenant or agreement
of Purchaser contained herein, (b) this Agreement or the transactions
contemplated hereby, subject, in the case of the registration rights described
in Article V, to the provisions set forth in Section 5.8. Purchaser shall
reimburse each Issuer Indemnified Party promptly for all such Losses as they are
incurred by such Issuer Indemnified Party.
Notwithstanding any other provisions hereof, no indemnified party
shall be entitled to make a claim against an indemnitor (an "Indemnitor") in
respect of any breach of this Agreement except to the extent that the aggregate
amount of such damages exceeds the amount of FIFTY THOUSAND DOLLARS ($50,000)
(the "Threshold Amount"); provided, however, that once such aggregate has been
exceeded, such Indemnitor shall only be liable for the amount that such damages
exceed the Threshold Amount. Notwithstanding any other provision of the
Agreement, neither the indemnity obligation of Issuer nor the indemnity
obligation of Purchaser will exceed the amount payable by Purchaser for the
Stock pursuant to Section 1.1.
Section 9.4 Amendments; No Waivers.
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24
(1) Subject to applicable law, any provision of this Agreement
may be amended or waived, but only if, such amendment or waiver is in writing
and is signed, in the case of an amendment, by each party to this Agreement or,
in the case of a waiver, by each party against whom the waiver is to be
effective.
(2) No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
Section 9.5 Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns; provided that no party may assign,
delegate or otherwise transfer any of its rights or obligations under this
Agreement without the consent of each other party hereto.
Section 9.6 Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware, without
regard to the conflicts of law rules of such State.
Section 9.7 Jurisdiction. Any suit, action or proceeding seeking
to enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the transactions contemplated hereby shall be
brought in any federal court located in the State of Delaware or any Delaware
state court, and each of the parties hereby consents to the exclusive
jurisdiction of such courts (and of the appropriate appellate courts therefrom)
in any such suit, action or proceeding and irrevocably waives, to the fullest
extent permitted by law, any objection that it may now or hereafter have to the
laying of the venue of any such suit, action or proceeding in any such court or
that any such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum. Process in any such suit, action or proceeding
may be served on any party anywhere in the world, whether within or without the
jurisdiction of any such court.
Section 9.8 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
Section 9.9 Counterparts; Effectiveness. This Agreement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each party hereto shall
have received counterparts hereof signed by all of the other parties hereto.
Section 9.10 Entire Agreement; No Third Party Beneficiaries. This
Agreement constitutes the entire agreement between the parties with respect to
the subject matter of this
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25
Agreement and supersedes all prior agreements and understandings, both oral and
written, between the parties with respect to the subject matter of this
Agreement. Except as specifically set forth herein, this Agreement is not
intended to confer upon any Person other than the parties hereto any rights or
remedies.
Section 9.11 Captions. The captions herein are included for
convenience of reference only and shall be ignored in the construction or
interpretation hereof.
Section 9.12 Definitions, Gender, Number, etc. Unless otherwise
defined herein, capitalized terms used herein shall have the meanings specified
in the Merger Agreement for all purposes of this Agreement, applicable to both
the singular and plural forms of any of the terms defined herein. When a
reference is made in this Agreement to a Section or Article such reference shall
be to a Section or Article of this Agreement unless otherwise indicated.
Whenever the words "include," "includes" or "including" are used in this
Agreement, they shall be deemed to be followed by the words "without
limitation." The use of any gender herein shall be deemed to include the neuter,
masculine and feminine genders wherever necessary or appropriate.
Section 9.13 Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any party. Upon such
a determination, the parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner so that the transactions contemplated hereby be
consummated as originally contemplated to the fullest extent possible.
Section 9.14 Specific Performance. The parties hereto agree that
irreparable damage would occur if any provision of this Agreement were not
performed in accordance with the terms hereof and that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
or to enforce specifically the performance of the terms and provisions hereof in
any federal court located in the State of Delaware or any Delaware state court,
in addition to any other remedy to which they are entitled at law or in equity.
[Signatures on next page.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective authorized officers as of the day and
year first above written.
OMNIPOINT CORPORATION
By:
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Name:
Title:
EAST/WEST COMMUNICATIONS, INC.
By:
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Name:
Title:
