EXHIBIT 10.9
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STOCKHOLDERS' AGREEMENT
by and among
AT&T WIRELESS PCS INC.,
CASH EQUITY INVESTORS,
MANAGEMENT STOCKHOLDERS,
and
TRITON PCS HOLDINGS, INC.
dated as of February 4, 1998
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TABLE OF CONTENTS
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Page
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1. Certain Definitions..................................................... 2
2. Restated Certificate and Restated By-Laws............................... 13
3. Management of Company................................................... 13
3.1 Board of Directors......................................... 13
3.2 Removal; Filling of Vacancies.............................. 14
3.3 Initial Directors.......................................... 15
3.4 Compensation and Reimbursement............................. 15
3.5 Business of the Company.................................... 15
3.6 Required Votes............................................. 15
3.7 Transactions between the Company and the
Stockholders or their Affiliates.......................... 15
3.8 Board Committees........................................... 16
3.9 Voting Agreements and Voting Trusts........................ 16
3.10 Additional Capital Contributions........................... 16
4. Transfers of Shares..................................................... 16
4.1 General.................................................... 16
4.2 Right of First Offer....................................... 18
4.3 Rights of Inclusion........................................ 19
4.4 Right of First Negotiation................................. 22
4.5 Additional Conditions to Permitted Transfers............... 22
4.6 Representations and Warranties............................. 23
4.7 Stop-Transfer.............................................. 23
5. Registration Rights..................................................... 24
6. Disqualifying Transactions.............................................. 37
6.1 Company Conversion Rights.................................. 37
6.2 Joint Marketing Right...................................... 38
7. Additional Rights and Covenants......................................... 39
7.1 Financial Statements....................................... 39
7.2 Purchase Right............................................. 39
7.3 Access..................................................... 40
7.4 Merger, Sale or Liquidation of the Company................. 41
7.5 Wholly-Owned Subsidiaries.................................. 42
7.6 Amendments of the Restated Certificate and By-Laws......... 42
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7.7 Confidentiality............................................ 42
7.8 IPO Date................................................... 43
7.9 AT&T PCS Retained Licenses................................. 43
7.10 Regulatory Cooperation..................................... 43
7.11 Permitted Transactions..................................... 44
8. Operating Arrangements.................................................. 44
8.1 Construction of Company Systems............................ 44
8.2 Service Features........................................... 45
8.3 Quality Standards.......................................... 45
8.4 No Change of Business...................................... 45
8.5 Preferred Provider......................................... 46
8.6 Exclusivity................................................ 47
8.7 Other Business; Duties; Etc................................ 48
8.8 Acknowledgments and Termination of Exclusivity............. 48
8.9 Equipment, Discounts and Roaming........................... 49
8.10 ANS Agreement.............................................. 49
8.11 Resale Agreements.......................................... 49
8.12 Non-Solicitation........................................... 50
8.13 Co-Location................................................ 51
9. After-Acquired Shares; Recapitalization................................. 51
9.1 After Acquired Shares; Recapitalization.................... 51
9.2 Amendment of Restated Certificate.......................... 51
10. Share Certificates..................................................... 51
10.1 Restrictive Endorsements; Replacement Certificates......... 51
11. Equitable Relief....................................................... 52
12. Miscellaneous.......................................................... 52
12.1 Notices.................................................... 53
12.2 Entire Agreement; Amendment; Consents...................... 55
12.3 Term....................................................... 55
12.4 Survival................................................... 56
12.5 Waiver..................................................... 56
12.6 Obligations Several........................................ 57
12.7 Governing Law.............................................. 57
12.8 Dispute Resolution......................................... 57
12.9 Benefit and Binding Effect; Severability................... 60
12.10 Amendment of By-Laws....................................... 60
12.11 Authorized Agent of AT&T PCS............................... 60
12.12 FCC Approval............................................... 60
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12.13 Expenses................................................... 60
12.14 Attorneys' Fees............................................ 61
12.15 Headings................................................... 61
12.16 Counterparts............................................... 61
Schedules
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Schedule I Cash Equity Investors
Schedule II Management Stockholders
Schedule III Stockholders
Schedule IV Core Service Features
Schedule V Minimum Build-Out Plan
Schedule VI PCS Territory
Schedule VII TDMA Quality Standards
Schedule VIII Initial Directors
Schedule IX Capital Budgets
Schedule X Voting Agreements
Schedule XI Critical Network Elements
Exhibits
Exhibit A Restated By-Laws
Exhibit B Restated Certificate
Exhibit C Form of Advanced Network Services Agreement
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STOCKHOLDERS' AGREEMENT
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STOCKHOLDERS' AGREEMENT, dated as of February 4, 1998 (this "Agreement"),
by and among AT&T WIRELESS PCS INC., a Delaware corporation (together with its
Affiliated Successors, "AT&T PCS"), the investors listed on Schedule I
(individually, each a "Cash Equity Investor" and, collectively, with any of its
Affiliated Successors, the "Cash Equity Investors"), the individuals listed on
Schedule II (individually, each a "Management Stockholder" and, collectively,
the "Management Stockholders") and Triton PCS Holdings, Inc., a Delaware
corporation (the "Company"). Each of the foregoing Persons, together with all
other Persons who, in connection with a Transfer (as hereinafter defined) are
required to become a party to this Agreement (other than the Company) are
sometimes referred to herein, indi vidually, as a "Stockholder" and,
collectively, as the "Stockholders."
RECITALS
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WHEREAS, the authorized capital stock of the Company consists of: (a)
10,000,000 shares of common stock, par value $0.01 per share ("Common Stock"),
of which 196,237 shares are issued and outstanding; and (b) 5,500,000 shares of
preferred stock, par value $0.01 per share ("Preferred Stock"), including (i)
1,000,000 shares designated Series A Convertible Preferred Stock, par value
$0.01 per share ("Series A Preferred Stock"), of which 732,371 shares are
issued and outstanding, (ii) 2,000,000 shares designated Series B Preferred
Stock, par value $0.01 per share ("Series B Preferred Stock"), of which no
shares are issued and outstanding, (iii) 2,000,000 shares designated Series C
Convertible Preferred Stock, par value $0.01 per share ("Series C Preferred
Stock"), of which 1,400,000 shares are issued and outstanding, and (iv) 500,000
shares designated Series D Convertible Preferred Stock, par value $0.01 per
share ("Series D Preferred Stock"), of which 366,131 shares are issued and
outstanding; and
WHEREAS, each share of Common Stock and each share of the Series C
Preferred Stock, voting as a single class, is entitled to one vote on all
matters on which the holders of Common Stock are entitled to vote; and
WHEREAS, each Stockholder is the registered owner of the respective shares
of Common Stock, Series A Preferred Stock, Series C Preferred Stock and Series D
Preferred Stock set forth opposite its name on Schedule III; and
WHEREAS, the parties desire to enter into this Agreement in order to
provide for the management of the Company and to impose certain restrictions
with respect to the sale, transfer or other disposition of Common Stock on the
terms and conditions hereinafter set forth; and
NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants, conditions and agreements hereinafter
set forth, the parties agree as follows:
1. Certain Definitions.
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"Adopted Service Features" shall mean the Core Service Features and
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additional service features that are adopted by the Company's PCS Systems in
accordance with the terms of Section 8.2.
"Advice" shall have the meaning set forth in Section 5(d)(xvii).
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"Affiliate" shall mean, with respect to any Person other than a natural
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person, any other Person that, either directly or indirectly through one or more
intermediaries, controls, or is controlled by or is under common control with
such Person and, with respect to any natural Person, any trust for the exclusive
benefit of such natural Person and/or any member of such natural Person's
Immediate Family in which such Person is the sole trustee thereof; provided,
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however, for purposes of Section 8.6, "Affiliate" shall not include (x) Persons
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who conduct business in the Territory in whom a Cash Equity Investor or any of
their respective Affiliates has made an investment or holds securities on the
date hereof in the ordinary course of their business, or any such Person who
conducts business in the Territory in whom a Cash Equity Investor or any of
their respective Affiliates makes an investment after the date hereof if such
Cash Equity Investor or Affiliate thereof controls such Person on a temporary
basis where reasonably necessary to protect its investment, or any person who
serves as an officer, director or is a partner of any such Person who is
affiliated with a Cash Equity Investor, or (y) The Chase Manhattan Bank, The
Toronto Dominion Bank, Xxxxxx Guaranty Trust Company of New York and First Union
Corporation. As used in this Agreement, "control", "controlled" or
"controlling" shall mean possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.
"Affiliated Successor" shall mean, with respect to any Person, an Affiliate
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thereof that is a transferee or a successor in interest to any or all of such
Person's Company Stock and that is required to become a party to this Agreement
in accordance with the terms hereof; provided, however, that, for purposes of
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Section 4, with respect to any Cash Equity Investor, "Affiliated Successor"
shall also include partners, limited partners or members of a Cash Equity
Investor that are transferees of Series C Preferred Stock or Common Stock
pursuant to distributions in accordance with the partnership agreement or
operating agreement of such Cash Equity Investor.
"Arbitration Rules" shall have the meaning set forth in Section 12.8(d).
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"AT&T Licensee" shall mean any Person that owns FCC licenses to provide
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Commercial Mobile Radio Service, which Person is authorized to provide any such
services using the phrase "Member, AT&T Wireless Services Network" or other
service marks of AT&T Corp.
"AT&T PCS" shall have the meaning set forth in the preamble.
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"AT&T PCS Contributed Licenses" shall have the meaning assigned to such
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term in the Securities Purchase Agreement.
"AT&T PCS Retained Licenses" shall have the meaning assigned to such term
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in the Securities Purchase Agreement.
"AWS" shall mean AT&T Wireless Services, Inc., a Delaware corporation.
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"Beneficially Own" shall have the meaning set forth in Rule 13d-3 of the
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Exchange Act.
"Board of Directors" shall mean the Board of Directors of the Company.
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"BTA" shall mean a geographic area established by the Rand XxXxxxx 1992
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Commercial Atlas & Marketing Guide, 123rd Edition, pp. 38-39, as modified by the
FCC to form the initial geographic area of license for the C, D, E and F blocks
of broadband PCS spectrum as defined in Section 24.202 of the FCC's rules.
"Business" shall mean the business of (a) owning, constructing and
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operating systems to provide Company Communications Services on frequencies
licensed to the Company for Commercial Mobile Radio Services pursuant to the
AT&T PCS Contributed Licenses and Permitted Cellular Licenses, (b) providing to
end-users and resellers, solely within the Territory, Company Communications
Services available on such systems, (c) providing in connection with such
Company Communications Services, solely within the Territory, the Adopted
Service Features and (subject to the immediately following sentence)
telecommunications services incidental or ancillary to such Company
Communications Services (including, by way of example, bundling additional
telecommunications services with Company Communications Services), and (d)
marketing and offering the services and features described in clauses (b) and
(c) within the Territory, including advertising such services and features using
broadcast and other media, so long as such advertising extends beyond the
Territory only when and to the extent necessary to reach customers and potential
customers in the Territory. The activities described in clauses (a) and (b)
shall be the indispensable requisite, and primary business, of the Company and,
to the extent the Company provides telecommunications services incidental or
ancillary thereto, the Company and its Subsidiaries shall be only the agent or
reseller for the provider thereof and shall not own or lease the facilities used
to provide such services, except that (i) the Company may own or lease
facilities that, in the aggregate, do not have a purchase price to the Company
and its Subsidiaries in excess of $10 million, and the Company may be a
facilities-based provider of services using such facilities, and (ii) after
completion of the Minimum Build-Out Plan and certification that Company Systems
meet the TDMA Quality Standards, the amount of $10 million set forth in clause
(i) hereof shall be increased to $100 million.
"Cash Equity Investors" shall have the meaning set forth in the preamble.
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"Cellular System" shall mean a cellular mobile radio telephone system
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constructed and operated in a "metropolitan statistical area" as defined by the
FCC or a "rural service area" as defined by the FCC (or any successor
territorial designation or subdivision thereof authorized by the FCC)
exclusively using the 824 MHZ to 894 MHZ frequencies pursuant to a License
therefor issued by the FCC.
"Cellular Territory" shall mean the geographic area in respect of which the
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Company acquires Permitted Cellular Licenses.
"Commission" shall mean the Securities and Exchange Commission or any other
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federal agency at the time administering the Securities Act.
"Common Stock" shall have the meaning set forth in the first recital.
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"Company" shall have the meaning set forth in the preamble.
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"Company Asset Sale" shall have the meaning set forth in Section 7.4(a).
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"Company Communications Services" shall mean mobile wireless
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telecommunications services (including the transmission of voice, data, image or
other messages or content) provided solely within the Territory, initiated or
terminated using TDMA and frequencies licensed by the FCC, to or from
subscriber equipment that is capable of usage during routine movement throughout
the area covered by a cell site and routine handing-off between cell sites, and
is either intended for such usage or is temporarily fixed to a specific location
on a short-term basis (e.g., a bank of wireless telephones temporarily installed
during a special event of limited duration). Without limiting the foregoing,
Company Communications Services shall include wireless office services if such
services comply with this definition. Company Communications Services shall
also include the transmissions between the Company's cell sites and the
Company's switch or switches in the Territory, handing-off transmissions at the
Company's switch or switches for termination by other carriers, and receiving
transmissions to the Company's customers handed-off at the Company's switch or
switches, in each case for the purpose of facilitating Company Communications
Services described in the first sentence.
"Company Merger" shall have the meaning set forth in Section 7.4(a).
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"Company Offer Period" shall have the meaning set forth in Section 6.2(b).
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"Company Purchase Notice" shall have the meaning set forth in Section
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6.2(b).
"Company Sale Notice" shall have the meaning set forth in Section 6.2(a).
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"Company Stock" shall mean the Series A Preferred Stock, the Series C
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Preferred Stock, the Series D Preferred Stock and the Common Stock.
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"Company Systems" shall mean the systems owned and operated by the Company
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to provide Company Communications Services in the Territory.
"Confidential Information" shall have the meaning assigned to such term in
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Section 7.7(a).
"Core Service Features" shall mean the service features set forth on
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Schedule IV.
"CPR" shall have the meaning set forth in Section 12.8(c).
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"Xxxxx" shall mean Private Equity Investors III, L.P. and Equity-Linked
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Investors-II.
"Dispute" shall have the meaning set forth in Section 12.8(a).
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"Disqualifying Transaction" shall mean a merger, consolidation, asset
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acquisition or disposition, or other business combination involving AT&T Corp.
(or its Affiliates) and another Person, which other Person (together with its
Affiliates) (a) derives from telecommunications businesses annual revenues in
excess of five billion dollars (based on its most recently ended fiscal year),
(b) derives less than one-third of its aggregate revenues from the provision of
wireless telecommunications (based on its most recently ended fiscal year for
which such information is available), (c) owns FCC Licenses to offer (and does
offer) mobile wireless telecommunications services serving more than 25% of the
POPs within the Territory, and (d) with respect to which AT&T PCS has given
written notice to the Company and the other Stockholders specifying that such
merger, consolidation, asset acquisition or disposition or other business
combination shall be a Disqualifying Transaction for purposes of this Agreement
and the transactions contemplated hereby.
"Employment Agreements" shall mean the Employment Agreements between Triton
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Management Company, Inc., a wholly-owned Subsidiary of the Company, and each of
Xxxxxxx X. Xxxxxxxx and Xxxxxx X. Xxxxxxx, as the same may be amended, modified
or supplemented in accordance with the terms thereof.
"Equity Securities" shall have the meaning set forth in Section 7.2(a).
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"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
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"FAA" shall have the meaning set forth in Section 12.8(e).
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"FCC" shall mean the Federal Communications Commission or similar
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regulatory authority established in replacement thereof.
"Federal Arbitration Act" shall have the meaning set forth in Section
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12.8(e).
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"Final Order" shall mean an action or decision that has been granted by the
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FCC as to which (i) no request for a stay or similar request is pending, no stay
is in effect, the action or decision has not been vacated, reversed, set aside,
annulled or suspended and any deadline for filing such request that may be
designated by statute or regulation has passed, (ii) no petition for rehearing
or reconsideration or application for review is pending and the time for the
filing of any such petition or application has passed, (iii) the FCC does not
have the action or decision under reconsideration on its own motion and the time
within which it may effect such reconsideration has passed, and (iv) no appeal
is pending including other administrative or judicial review, or in effect and
any deadline for filing any such appeal that may be designated by statute or
rule has passed.
"First Offer" shall have the meaning set forth in Section 4.2(a).
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"First Offer Period" shall have the meaning set forth in Section 4.2(b).
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"First Offeree" shall have the meaning set forth in Section 4.2(a).
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"Governmental Authority" means a Federal, state or local court,
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legislature, governmental agency (including, without limitation, the United
States Department of Justice), commission or regulatory or administrative
authority or instrumentality.
"Inclusion Event" shall have the meaning set forth in Section 4.3(a).
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"Inclusion Event Offeree" shall have the meaning set forth in Section
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4.3(a).
"Inclusion Event Purchaser" shall have the meaning set forth in Section
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4.3(a).
"Inclusion Notice" shall have the meaning set forth in Section 4.3(a).
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"Inclusion Shares" shall have the meaning set forth in Section 4.3(c).
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"Indemnified Party" shall have the meaning set forth in Section 5(e)(v).
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"Indemnified Stockholder" shall have the meaning set forth in Section
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5(e)(i).
"Indemnifying Party" shall have the meaning set forth in Section 5(e)(v).
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"Immediate Family" shall mean an individual's spouse, children (including
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adopted children), grandchildren, parents, grandparents, and siblings.
"IPO Date" shall mean the first date on which (a) the Common Stock shall
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have been registered pursuant to an effective Registration Statement under the
Securities Act, (b) the aggregate gross proceeds received by the Company in
connection with such Registration
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Statement(s) equals or exceeds $20 million, and (c) the Common Stock shall be
listed for trading on the New York Stock Exchange or the American Stock Exchange
or authorized for trading on NASDAQ, including without limitation its National
Market System.
"Issuance Notice" shall have the meaning set forth in Section 7.2(a).
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"Joint Marketing Period" shall have the meaning set forth in Section
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6.2(c).
"Law" shall mean applicable common law and any statute, ordinance, code or
---
other law, rule, permit, permit condition, regulation, order, decree, technical
or other standard, requirement or procedure enacted, adopted, promulgated,
applied or followed by any Governmental Authority.
"License" shall mean a license, permit, certificate of authority, waiver,
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approval, certificate of public convenience and necessity, registration or other
authorization, consent or clearance to construct or operate a facility,
including any emissions, discharges or releases therefrom, or to transact an
activity or business, to construct a tower or to use an asset or process, in
each case issued or granted by a Governmental Authority.
"Liens" shall mean, with respect to any asset, any mortgage, lien, pledge,
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charge, security interest, right of first refusal or right of others therein or
encumbrance of any nature whatsoever in respect of such asset.
"Management Stockholder" shall have the meaning set forth in the preamble.
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"Majority in Interest" shall mean, with respect to the Cash Equity
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Investors, Persons that Beneficially Own, in the aggregate more than 50% of the
aggregate number of shares of Common Stock Beneficially Owned by all such
Persons.
"Majority of the Southeast Region" shall mean PCS Systems and Cellular
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Systems owned by AT&T PCS and its Affiliates covering a majority of the POPs in
all such PCS Systems and Cellular Systems in the Southeast Region.
"Majority of the United States" shall mean PCS Systems and Cellular Systems
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owned by AT&T PCS and its Affiliates covering a majority of the POPs in all such
PCS Systems and Cellular Systems in the United States.
"Minimum Build-Out Plan" shall mean the build-out plan for the Company's
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PCS Systems set forth on Schedule V hereto.
"Model Procedures" shall have the meaning set forth in Section 12.8(c).
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"MTA" shall mean a geographic area established by the Rand XxXxxxx 1992
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Commercial Atlas & Marketing Guide, 123rd Edition, pp. 38-39, as modified by the
FCC to form the initial geographic area of license for the A and B blocks of
broadband PCS spectrum as defined in Section 24.202 of the FCC's rules.
"NASD" shall mean the National Association of Securities Dealers, Inc.
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"NASDAQ" shall mean the National Association of Securities Dealers'
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Automated Quotation System.
"Network Membership License Agreement" shall mean the Network Membership
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License Agreement between Triton Operating and AT&T Corp., dated of even date
herewith, as the same may be amended, modified or supplemented in accordance
with the terms thereof.
"Offer Notice" shall have the meaning set forth in Section 4.2(a).
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"Offered Shares" shall have the meaning set forth in Section 4.2(a).
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"Overlap Territory" shall mean that portion of the Territory in which a
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Person or its Affiliates (other than AT&T PCS and its Affiliates) that is party
to a transaction meeting the description of a transaction set forth in clauses
(a), (b) and (c) of the definition of a Disqualifying Transaction owns an FCC
License to offer Commercial Mobile Radio Services.
"PCS System" shall mean a mobile communication system constructed and
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operated in a BTA or a MTA (or any successor territorial designations or
subdivision thereof authorized by the FCC) exclusively using the 1850 MHZ to
1910 MHZ and 1930 MHZ to 1990 MHZ frequencies, or portions thereof, pursuant to
a License therefor issued by the FCC.
"PCS Territory" shall mean the territory described on Schedule VI hereto.
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"Permitted Cellular License" shall have the meaning assigned to such term
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in Section 7.11(b).
"Permitted Consolidation Transaction" shall have the meaning set forth in
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Section 7.11(a).
"Permitted Merger Participant" shall mean an AT&T Licensee that (i) owns
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one or more FCC Licenses to provide Commercial Mobile Radio Services that were
acquired from AT&T PCS or its Affiliates in all or any part of the Knoxville,
TN, Memphis, TN, Little Rock, AK, Detroit, MI, St. Louis, MO, Xxxxxxx, XX,
Xxxxxx, XX, Xxxxxxxxxx, XX, Nashville, TN and Columbus, OH MTAs and (ii) on the
date of acquisition from AT&T PCS of any such FCC Licenses to provide Commercial
Mobile Radio Service referred to in clause (i) hereof, owned
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FCC Licenses covering at least 8 million POPs, and in which AT&T PCS or its
Affiliates has not disposed of more than one-half of its original equity
interest therein.
"Person" shall mean an individual, corporation, partnership, limited
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liability company, association, joint stock company, Governmental Authority,
business trust or other legal entity.
"POPs" shall mean, with respect to any Licensed area, the residents of such
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area based on the most recent publication by Equifax Marketing Decision Systems,
Inc.
"Prohibited Transferee" shall mean any Person that is one of the three
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(excluding any Person excluded from this definition by reason of the proviso
hereto) largest carriers (other than AT&T Corp.) of telecommunications services
that as of the date hereof constitute interexchange services (based on revenue
derived from the provision of such telecommunications services during the most
recent fiscal year for which such information is available) or an Affiliate
thereof; provided, however, that such Person shall not constitute a Prohibited
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Transferee if (a) a material portion of such Person's business is also the
business of providing wireless communications systems, and (b) TDMA is utilized
in a substantial majority of such Person's wireless communications systems.
"Prospectus" shall have the meaning set forth in Section 5(d)(i).
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"Purchase Notice" shall have the meaning set forth in Section 4.2(a).
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"Purchase Right" shall have the meaning set forth in Section 7.2(a).
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"Qualified Holder" shall mean (a) any Stockholder or group of Stockholders
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that Beneficially Owns (x) for purposes of Section 7.8, greater than 33 %
percent of the outstanding shares of Series C Preferred Stock and Common Stock,
in the aggregate, (as appropriately adjusted for stock splits, stock dividends
and the like), (y) for purposes of Section 5, shares of Series C Preferred Stock
and Common Stock reasonably expected to, upon sale, result in aggregate gross
proceeds of at least $25 million, or (b) AT&T PCS for so long as it Beneficially
Owns, greater than two-thirds of the initial issuance to AT&T PCS of shares of
Series A Preferred Stock (as appropriately adjusted for stock splits, stock
dividends and the like).
"Registrable Securities" shall mean (a) the Common Stock now owned or
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hereafter acquired by any Stockholder or issuable upon conversion or exchange
of any Equity Security, and (b) all Common Stock issued or issuable upon
conversion, exchange or exercise of any Equity Security which is issued
pursuant to a stock split, stock dividend or other similar distribution or event
with respect to Common Stock but with respect to any Common Stock, only until
such time as such Common Stock (i) has been effectively registered under the
Securities Act and disposed of in accordance with the Registration Statement
covering it, (ii) has been sold to the public pursuant to Rule 144 (or any
similar provision then in force), (iii) shall otherwise have been transferred, a
new certificate evidencing such Common Stock without a
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legend restricting further transfer shall have been delivered by the Company,
and subsequent public distribution of such Common Stock shall neither require
registration under the Securities Act nor qualification (or any similar filing)
under any state securities or "blue sky" law then in effect, or (iv) shall have
ceased to be issued and outstanding.
"Registration" shall have the meaning set forth in Section 5(d).
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"Registration Expenses" shall have the meaning set forth in Section 5(g).
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"Registration Statement" shall have the meaning set forth in Section
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5(d)(i).
"Regulatory Problem" shall have the meaning assigned to such term in the
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Securities Purchase Agreement.
"Related Agreements" shall mean each of the Network Membership License
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Agreement, the Employment Agreements, the Resale Agreement and the Roaming
Agreement.
"Representative" shall have the meaning set forth in Section 7.7.
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"Resale Agreement" shall mean the Resale Agreement between Triton Operating
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and AWS or an Affiliate thereof, dated of even date herewith, as the same may be
amended, modified or supplemented in accordance with the terms thereof.
"Restated By-Laws" shall mean the Amended and Restated By-Laws of the
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Company in the form of Exhibit A, as the same may be amended, modified or
supplemented in accordance with the terms thereof.
"Restated Certificate" shall mean the Amended and Restated Certificate of
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Incorporation of the Company, in the form of Exhibit B, as the same may be
amended, modified or supplemented in accordance with the terms thereof.
"Roaming Agreement" shall mean the Intercarrier Roamer Service Agreement
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between Triton Operating and AWS, dated of even date herewith, as the same may
be amended, modified or supplemented in accordance with the terms thereof.
"Rule 144" shall mean Rule 144 promulgated under the Securities Act (or
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any similar rule as may be in effect from time to time).
"Sale Notice" shall have the meaning set forth in Section 7.4(d).
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"Sale Offer" shall have the meaning set forth in Section 7.4(d).
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"Sale Transaction" shall have the meaning set forth in Section 7.4(c).
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"SBIC" shall have the meaning assigned to such term in the Securities
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Purchase Agreement.
"SBIC Holder" shall have the meaning assigned to such term in the
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Securities Purchase Agreement.
"Section 6.2 Period" shall have the meaning set forth in Section 6.2.
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"Securities Act" shall mean the Securities Act of 1933, as amended.
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"Securities Purchase Agreement" shall mean the Securities Purchase
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Agreement, dated as of October 8, 1997, among the Company and the Stockholders.
"Seller" shall have the meaning set forth in Section 4.2(a).
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"Selling Stockholder" shall have the meaning set forth in Section 4.3(a).
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"Series A Preferred Director" shall have the meaning set forth in Section
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3.1.
"Series A Preferred Stock" shall have the meaning set forth in the first
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recital.
"Series B Preferred Stock" shall have the meaning set forth in the first
------------------------
recital.
"Series C Preferred Stock" shall have the meaning set forth in the first
------------------------
recital.
"Series D Preferred Stock" shall have the meaning set forth in the first
------------------------
recital.
"Southeast Region" shall mean the geographic area comprising Washington,
----------------
D.C., and the States of Alabama, Florida, Georgia, Kentucky, Maryland,
Mississippi, North Carolina, South Carolina, Tennessee, Virginia, and West
Virginia.
"Stockholder" shall have the meaning set forth in the preamble.
-----------
"Subject Market" shall mean, with respect to any announcement by AT&T PCS
--------------
or its Affiliates of a transaction meeting the description of a transaction set
forth in clauses (a), (b) and (c) of the definition of a Disqualifying
Transaction, the PCS System owned and operated by AT&T PCS and its Affiliates in
any of Charlotte, North Carolina, Atlanta, Georgia, Baltimore/Washington, D.C.
or Richmond, Virginia BTA.
"Subsidiary" shall mean, with respect to any Person, a corporation or other
----------
entity of which 50% or more of the voting power of the voting equity securities
or equity interests is owned, directly or indirectly, by such Person.
11
"Substantial Company Breach" shall mean a material breach by the Company or
--------------------------
its Subsidiaries of their respective obligations under any of Sections 8.1(a),
8.2, 8.3, or 8.5(a) of this Agreement, if and only if any such material breach
is not cured within 30 days of notice thereof from AT&T PCS to the Company or,
if such breach is not capable of being cured within such thirty (30) day period,
within one-hundred eighty (180) days of such notice, provided the Company is
--------
using best efforts to cure such material breach as soon as reasonably
practicable.
"TDMA" shall mean the North American Time Division Multiple Access
----
standard set by the Cellular Telecommunications Industry Association, IS-54/136,
and any standard that is based upon, or is an upgrade from, or is a successor
to, such standard, if and only if such new or upgraded standard is (i) adopted
by AT&T PCS and its Affiliates in a Majority of the Southeast Region, (ii)
technologically compatible in all material respects with the standard then being
used in a Majority of the United States (including without limitation for the
purpose of facilitating roaming, hand-off and automatic call delivery between
systems), and the User Interface in PCS Systems using such new or upgraded
standard will not differ from the User Interface in a Majority of the United
States in a manner that would be material to customers, or (iii) is approved in
writing by AT&T PCS.
"TDMA Quality Standards" shall mean the quality standards applicable to
----------------------
TDMA PCS Systems and Cellular Systems owned and operated by AT&T PCS and its
Affiliates in the Southeast Region, which, as currently in effect, are set forth
on Schedule VII, as the same may be amended from time to time, provided any such
amended standards shall become effective one hundred twenty (120) days after
notice thereof is given to the Company.
"Territory" shall mean the PCS Territory and the Cellular Territory;
---------
provided, however, that in the event that, after consummation of a Disqualifying
Transaction, AT&T PCS terminates its and its Affiliates' obligations under
Section 8.6 with respect to any Overlap Territory, the "Territory" shall exclude
the Overlap Territory solely for the purpose of determining the rights and
obligations of AT&T PCS and the Company hereunder.
"Transfer" shall have the meaning set forth in Section 4.1.
--------
"Triton Operating" shall mean Triton PCS Operating Company L.L.C., a
----------------
Delaware limited liability company, which is a wholly-owned Subsidiary of the
Company.
"Unfunded Commitment" shall have the meaning assigned to such term in the
-------------------
Securities Purchase Agreement.
"User Interface" shall mean the process, functional commands, and look and
--------------
feel by which a mobile wireless telecommunications service subscriber operates
and utilizes the mobile wireless telecommunications services and service
features provided by a PCS System, including the sequence and detail of specific
commands or service codes, the detailed operation and response of subscriber
equipment to the sequence of keys pressed to effect subscriber equipment
12
function, the response of subscriber equipment to the activation of these keys
or signals or data from the PCS System, the manner in which information is
displayed on the screen of subscriber equipment, and the use of announcement
tones and messages.
Each definition or pronoun herein shall be deemed to refer to the singular,
plural, masculine, feminine or neuter as the context requires. Words such as
"herein," "hereinafter," "hereof," "hereto" and "hereunder" refer to this
Agreement as a whole, unless the context otherwise requires.
2. Restated Certificate and Restated By-Laws. The Restated Certificate
-----------------------------------------
in effect as of the date hereof is in the form of Exhibit B hereto. The
Restated By-Laws of the Company in effect as of the date hereof are in the form
of Exhibit A hereto.
3. Management of Company.
---------------------
3.1 Board of Directors. The Board of Directors shall consist of
------------------
seven (7) directors; provided, however, that the number of directors
-------- -------
constituting the Board of Directors shall be reduced in the circumstances set
forth in this Section 3.1. Each of the Stockholders hereby agrees that it will
vote all of the shares of its Series C Preferred Stock or Common Stock owned or
held of record by it (whether now owned or hereafter acquired), in person or by
proxy, to cause the election of directors and thereafter the continuation in
office of such directors as follows:
(a) (i) two (2) individuals selected by holders of a Majority in
Interest of the Common Stock Beneficially Owned by the Cash Equity Investors, in
their sole discretion, and (ii) two (2) additional individuals selected by
holders of a Majority in Interest of the Common Stock held by the Cash Equity
Investors, which two (2) additional individuals shall be acceptable to Xxxxxxx
X. Xxxxxxxx and Xxxxxx X. Xxxxxxx (in each case so long as he is an officer of
the Company) and AT&T PCS, in the discretion of Xx. Xxxxxxxx and Xx. Xxxxxxx,
on the one hand, and AT&T PCS, on the other hand;
(b) Xxxxxxx X. Xxxxxxxx (so long as he is an officer of the
Company) who shall be Chairman of the Board of Directors;
(c) Xxxxxx X. Xxxxxxx (so long as he is an officer of the
Company); and
(d) one (1) individual (the "Series A Preferred Director")
elected by AT&T PCS in its capacity as holder of Series A Preferred Stock so
long as it has the right to elect one director in accordance with the Restated
Certificate.
In the event that Xx. Xxxxxxxx or Xx. Xxxxxxx shall cease to be an officer of
the Company, such individual shall resign (or the other directors or
Stockholders shall remove him) from the Board of Directors and the Board of
Directors shall select a replacement from the executives of the
13
Company who shall be acceptable to a Majority in Interest of the Cash Equity
Investors and AT&T PCS, in each case in its sole discretion. In the event that
AT&T PCS shall cease to be entitled to elect the Series A Preferred Director,
such director shall resign (or the other directors or Stockholders shall remove
him) from the Board of Directors and the remaining directors shall take such
action so that the number of directors constituting the entire Board of
Directors shall be reduced accordingly. In the event that CB Capital Investors,
L.P., or X.X. Xxxxxx Investment Corporation ("JPMI") or Sixty Wall Street SBIC
Fund, L.P. ("Sixty Wall Street"; JPMI and Sixty Wall Street are hereinafter
referred to collectively as "X.X. Xxxxxx") shall fail to satisfy any portion of
their respective Unfunded Commitments when due in accordance with Section 2.2 of
the Securities Purchase Agreement or Section 3.10 hereof, and such failure is
not cured by CB Capital Investors, L.P. or X.X. Xxxxxx, as applicable, or any
other Cash Equity Investor within thirty- five (35) days thereof, then, until
such failure is cured, the right of the Cash Equity Investors to designate two
(2) directors pursuant to Section 3.1(a)(i) shall be reduced to a right to
designate one (1) director (subject to reinstatement upon cure of such failure)
and the director designated by CB Capital Investors, L.P. or X.X. Xxxxxx, as
applicable, pursuant to such right of the Cash Equity Investors, or, in the case
of a default by CB Capital Investors, L.P. and X.X. Xxxxxx the two (2) directors
designated by the Cash Equity Investors pursuant to Section 3.1(a)(i), shall
resign (or the other directors or Stockholders shall remove them) from the Board
of Directors and the remaining directors shall take such action so that the
number of directors constituting the entire Board of Directors shall be reduced
accordingly.
Xxxxx shall have the right, so long as it Beneficially Owns at least
200,000 shares of Common Stock, to designate one (1) one person who shall be
entitled to attend each meeting of the Board of Directors as an observer,
including meetings during which the Company's annual budget is discussed and
presented. Such observer shall have the right to receive all Board of Directors
materials and shall also have the right to meet quarterly with management of the
Company to consult on the business affairs of the Company. In addition, so long
as AT&T PCS has the right to designate one director in accordance with the
Restated Certificate, up to two (2) Regional Directors (in regions overlapping
with or in geographic proximity to the Territory) shall have the right to attend
each meeting of the Board of Directors as an observer.
Any nomination or designation of directors and the acceptance thereof
pursuant to Section 3.1 shall be evidenced in writing.
3.2 Removal; Filling of Vacancies. Except as set forth in Section 3.1,
-----------------------------
each Stockholder agrees it will not vote any shares of Series C Preferred Stock
and/or Common Stock Beneficially Owned by such Stockholder, and shall not permit
any Affiliated Successor of such Stockholder holding any Series C Preferred
Stock and/or Common Stock, to vote for the removal without cause of any director
designated by any other Stockholder in accordance with Section 3.1. Any
Stockholder or group of Stockholders who has the right to designate any
member(s) of the Board of Directors shall have the right to replace any
member(s) so designated by it (whether or not such member is removed from the
Board of Directors with or without cause or ceases to be a member of the Board
of Directors by reason of death, disability or for any other reason) upon
14
written notice to the other Stockholders, the Company and the members of the
Board of Directors which notice shall set forth the name of the member(s) being
replaced and the name of the new
15
member(s); provided, however, that if a director designated pursuant to Section
-------- -------
3.1(a)(ii) is replaced, the individual replacing such director must be
acceptable to Messrs. Kalogris and Xxxxxxx and AT&T PCS in accordance with the
terms of Section 3.1(a)(ii). Each of the Stockholders agrees to vote, and to
cause its Affiliated Successors to vote, its shares of Series C Preferred Stock
and/or Common Stock, or shall otherwise take any action as is necessary to cause
the election of any successor director designated by any Stockholder pursuant to
this Sec tion 3.2.
3.3 Initial Directors. In accordance with Section 228 of the Delaware
-----------------
General Corporation Law and pursuant to the provisions of Section 3.1 of this
Agreement, the Stockholders hereby consent to the election of and do hereby
elect in accordance with Section 3.1 hereof the persons designated in Schedule
VIII hereto as directors of the Company. Such persons shall hold office until
their successors are duly elected and qualified, except as otherwise provided in
this Agreement or the Restated Certificate or the Restated By-Laws.
3.4 Compensation and Reimbursement. The members of the Board of Directors
------------------------------
(other than the directors selected pursuant to Section 3.1(a)(ii)) shall not be
compensated for their services as a director or as a member of any committee of
the Board of Directors. The Board of Directors shall determine the compensation
payable, if any, to the directors selected pursuant to Section 3.1(a)(ii) for
their services as a director. The Company shall reimburse each member of the
Board of Directors for all out-of-pocket expenses reasonably incurred by such
director in connection with the performance of his service as a director or as a
member of any committee of the Board of Directors.
3.5 Business of the Company. The business and affairs of the Company
-----------------------
shall be conducted by the officers of the Company under the supervision of the
Board of Directors, substantially in accordance with operating and capital
expenditure budgets approved by the Board of Directors from time to time. The
Stockholders and the directors hereby approve the five (5) year build-out plan
for the Business and the capital budget for the first two (2) years of the
Business in the forms attached hereto as Schedule IX.
3.6 Required Votes. All actions of the Board of Directors of the Company
--------------
shall require the vote of at least a majority of the entire Board of Directors,
unless otherwise required by Law, the Restated Certificate, the Restated By-
Laws or this Agreement.
3.7 Transactions between the Company and the Stockholders or their
--------------------------------------------------------------
Affiliates. Except for this Agreement, the Securities Purchase Agreement and the
----------
Related Agreements and the transactions contemplated hereby and thereby and any
other arms-length agreements or transactions entered into from time to time
between the Company and its Subsidiaries, on the one-hand, and AT&T PCS and its
Affiliates, on the other hand, no Stockholder or any Affiliate of any
Stockholder shall enter into any transaction with the Company or any Subsidiary
of the Company unless such transaction is approved by a majority of the
disinterested members of the Board of Directors. For purposes hereof, a
director shall be deemed to be disinterested with respect to any such
transaction if such director was not designated a director by the Stockholder
16
that (or an Affiliate of which) proposed to engage in such transaction with the
Company or any Subsidiary of the Company and such member is not an officer,
director, partner, employee, stockholder of, or consultant to, such Stockholder
or any of its Affiliates; provided, however, that for purposes of this Section
-------- -------
3.7 the directors designated pursuant to Section 3.1(a)(ii) shall not be deemed
to have been designated by the Cash Equity Investors, AT&T PCS or the Management
Stockholders.
3.8 Board Committees. If an executive committee of the Board of Directors
----------------
(or a committee of the Board of Directors having substantially the same mandate
and powers of such a committee) is established, the Series A Preferred Director,
one of the directors selected by the Cash Equity Investors pursuant to Section
3.1(a)(i) and Xxxxxxx X. Xxxxxxxx (so long as he is an officer of the Company)
shall each serve as a member of such committee (or such other committee having
substantially the same mandate and powers).
3.9 Voting Agreements and Voting Trusts. Except as disclosed on Schedule
-----------------------------------
X, each Stockholder agrees that it will not, directly or indirectly, deposit any
of his or its shares of Series C Preferred Stock, Series D Preferred Stock
and/or Common Stock in a voting trust or other similar arrangement or, except
as expressly provided herein, subject such shares to a voting agreement or other
similar arrangements. AT&T PCS covenants and agrees that it will not, directly
or indirectly, enter into a voting or similar agreement with any Transferee of
shares of Series A Preferred Stock.
3.10 Additional Capital Contributions. In accordance with the Securities
--------------------------------
Purchase Agreement, each Cash Equity Investor shall contribute to the capital
of the Company an aggregate additional amount equal to its Unfunded Commitment,
such contributions to be made by each of the Cash Equity Investors in the
amounts and on the dates specified on Schedule I thereto. In the event that the
Board of Directors determines in good faith that the Company requires all or
any portion of the Unfunded Commitment prior to the dates specified on such
Schedule, then upon notice given by the Company to the Cash Equity Investors,
the Cash Equity Investors shall contribute, pro rata in accordance with their
ownership of Series C Preferred Stock on the date hereof, the additional capital
set forth in such notice up to the amount, in the case of each Cash Equity
Investor, of its Unfunded Commitment. Any such additional capital required to
be contributed by the Cash Equity Investors shall be contributed by the Cash
Equity Investors within twenty (20) business days of receipt of written notice
from the Company.
4. Transfers of Shares.
-------------------
4.1 General.
-------
(a) Each Stockholder agrees that at all times prior to the IPO
Date it shall not, directly or indirectly, transfer, sell, assign, pledge,
tender or otherwise grant, create or suffer to exist a Lien in or upon, give,
place in trust, or otherwise voluntarily or involuntarily (including transfers
by testamentary or intestate succession) dispose of by operation of law, offer
17
or otherwise (any such action being referred to herein as a "Transfer") any of
the shares of Company Stock Beneficially Owned by such Stockholder as of the
date hereof or which may hereafter be acquired by such Stockholder, except that
(i) a Stockholder may Transfer shares of Series C Preferred Stock, Series D
Preferred Stock and Common Stock to an Affiliated Successor, (ii) a Stockholder
may Transfer shares of Series C Preferred Stock and Common Stock to any other
Person after complying first with Section 4.2 and next with Section 4.3, if
applicable, or (iii) a Cash Equity Investor may Transfer shares of Series C
Preferred Stock or Common Stock to another Cash Equity Investor.
(b) Each Stockholder agrees that at all times on and after the IPO
Date it shall not, directly or indirectly, Transfer any of the shares of Series
D Preferred Stock or Common Stock Beneficially Owned by such Stockholder as of
the date hereof or which may hereafter be acquired by such Stockholder except
that a Cash Equity Investor may Transfer shares of Series C Preferred Stock and
Common Stock to another Cash Equity Investor and a Stockholder may Transfer (i)
shares of Series D Preferred Stock and Common Stock to an Affiliated Successor,
and (ii) shares of Common Stock after complying first with Section 4.2 and next
with Section 4.3, if applicable, provided, however, a Stockholder shall not be
-------- -------
required to comply with Section 4.2 if such Stockholder first complies with the
applicable provisions of Section 4.4 in connection with Transfers of Common
Stock (x) pursuant to a Registration of Common Stock under Section 5 which is an
underwritten offering and constitutes a bona fide distribution of such Common
Stock pursuant to such Registration, (y) pursuant to Rule 144, or (z) in any
single transaction or series of related transactions to one or more Persons
which results in the Transfer by such Stockholder (together with any other
Stockholder participating in such single transaction or series of related
transactions) of not more than ten percent (10%) of the Common Stock on a fully
diluted basis (excluding for such purposes the Series A Preferred Stock).
(c) Notwithstanding anything to the contrary contained in Sections
4.1(a) or (b), prior to the third anniversary of the date hereof, each
Stockholder agrees that it will not Transfer any shares of Series C Preferred
Stock or Common Stock Beneficially Owned by it as of the date hereof or which
may hereafter be acquired by it to any Person other than an Affiliated
Successor.
(d) AT&T PCS agrees that it will not (i) Transfer any shares of
Series D Preferred Stock held by it to any Person other than to an Affiliated
Successor; provided, however, that nothing contained in this Section 4.1(d)
-------- -------
shall limit AT&T PCS' right to Transfer in accordance with the terms of this
Agreement any shares of Series C Preferred Stock or Common Stock issued upon
conversion of any such shares of Series D Preferred Stock. Prior to the IPO
Date, AT&T PCS agrees that it will not Transfer any shares of Series A Preferred
Stock held by it except that AT&T PCS may transfer Series A Preferred Stock (i)
to an Affiliated Successor, or (ii) to any other Person after complying with
Section 4.2; it being understood that on and after the IPO Date, AT&T PCS may
Transfer its shares of Series A Preferred Stock free from any restrictions on
Transfer of such shares under this Agreement.
18
(e) Notwithstanding anything to the contrary contained in this
Section 4, (i) Section 4.1 shall not apply to the pledge by the Cash Equity
Investors of the Series C Preferred Stock as security for their Unfunded
Commitments pursuant to a pledge agreement in favor of the Company or to any
Transfer of shares of Series C Preferred Stock in connection with the exercise
by the Company of its remedies pursuant to any such pledge agreement, and (ii) a
Cash Equity Investor that is a SBIC Holder that is required to dispose of its
investment in the Company by reason of a breach by the Company of Section 6.6(d)
of the Securities Purchase Agreement or a Regulatory Problem, may Transfer its
shares of Series C Preferred Stock or Common Stock without complying with the
terms of Section 4.3.
4.2 Right of First Offer.
--------------------
(a) If a Stockholder (each a "Seller") desires to Transfer any
or all of its shares of Company Stock (collectively, the "Offered Shares"), such
Seller shall give written notice (the "Offer Notice") to the Company and to each
Stockholder entitled to become the First Offeree of such Offered Shares, as
determined below. Each Offer Notice shall describe in reasonable detail the
number of shares of each class of Offered Shares, the cash purchase price
requested and all other material terms and conditions of the proposed Transfer.
The Offer Notice shall constitute an irrevocable offer (a "First Offer") to sell
all (and not less than all) of the Offered Shares to the First Offeree(s) at a
cash price equal to the price contained in such Offer Notice and upon the same
terms as the terms contained in such Offer Notice. The First Offeree(s) shall
have the irrevocable right and option, exercisable as provided below, but not
the obligation, to accept the First Offer as to all (and not less than all) of
the Offered Shares. The "First Offeree(s)" shall be determined as follows:
(i) If the Seller is a Cash Equity Investor, AT&T PCS
shall be First Offeree;
(ii) If the Seller is AT&T PCS, each Cash Equity Investor
shall be the First Offeree; and
(iii) If the Seller is any Stockholder other than a Cash
Equity Investor, AT&T PCS shall be the First Offeree.
(b) The option provided for herein shall be exercisable by the
First Offeree(s) by giving written notice (a "Purchase Notice"), that the First
Offeree desires to purchase all (and not less than all) of such Offered Shares
from the Seller, the Stockholders (other than the Seller) and the Company not
later than ten (10) business days (the "First Offer Period") after the date of
the Offer Notice. If the Cash Equity Investors are First Offerees and two or
more Cash Equity Investors notify the Seller of their desire to purchase all of
the Offered Shares, then each Cash Equity Investor shall acquire the proportion
of such Offered Shares as the number of shares of Company Stock owned by such
Cash Equity Investor bears to the total number of shares of Company Stock owned
by all Cash Equity Investors who elected to
19
purchase all of the Offered Shares. If Offered Shares are purchased by more than
one purchaser, the purchase price shall be allocated among the parties
purchasing the shares on the basis of the number of shares being so purchased.
The purchase of the Offered Shares by the First Offeree(s) shall be closed at
the principal executive offices of the Company on a date specified by the First
Offeree(s) upon at least five (5) business days' notice, that is within thirty
(30) days after the expiration of the First Offer Period; provided, however,
-------- -------
that if such purchase is subject to the consent of the FCC or any public service
or public utilities commission, the purchase of the Offered Shares shall be
closed on the first business day after all such consents shall have been
obtained by Final Order.
(c) If the First Offeree(s) decline (which shall include the failure
to give timely notice of acceptance) to purchase all of the Offered Shares
subject to the First Offer within the First Offer Period, the Seller shall have
the right (for a period of ninety (90) days following the expiration of the
First Offer Period) to consummate the sale of the Offered Shares to any Person;
provided, however, that the purchase price of such Offered Shares payable by
-------- -------
such Person must be at least equal to the cash purchase price thereof set forth
in the Offer Notice and all other terms and conditions of any such sale shall
not be more beneficial to such third party than those contained in the Offer
Notice. If any Offered Shares are not sold pursuant to the provisions of this
Section 4.2 prior to the expiration of the ninety (90) day period specified in
the immediately preceding sentence, such Offered Shares shall become subject
once again to the provisions and restrictions hereof.
(d) The purchase price of any Offered Shares Transferred pursuant to
this Section 4.2 shall be payable in cash by certified bank check or by wire
transfer of immediately available funds.
4.3 Rights of Inclusion.
-------------------
(a) No Stockholder shall, directly or indirectly, Transfer, in any
single transaction or series or related transactions to one or more Persons who
are not Affiliated Successors of such Stockholder (each such Person an
"Inclusion Event Purchaser") shares of Series C Preferred Stock or Common Stock
(collectively, "Inclusion Stock") in circumstances in which, after giving
effect to such Transfer, whether acting alone or in concert with any other
Stockholder (such parties referred to herein as "Selling Stockholders") would
result in such Selling Stockholder(s) Transferring twenty-five percent (25%) or
more of the outstanding shares of Inclusion Stock outstanding on the date of
such proposed Transfer on a fully diluted basis (excluding for such purposes the
Series A Preferred Stock) (an "Inclusion Event"), unless the terms and
conditions of such sale to such Inclusion Event Purchaser shall include an offer
to AT&T PCS, the Cash Equity Investors and the Management Stockholders other
than the Selling Stockholder (each, an "Inclusion Event Offeree") to Transfer to
such Inclusion Event Purchasers up to that number of shares of any class of
Inclusion Stock then Beneficially Owned by each Inclusion Event Offeree that
bears the same proportion to the total number of shares of Inclusion Stock at
that time Beneficially Owned (without duplication) by each such Inclusion Event
20
Offeree as the number of shares of Inclusion Stock being Transferred by the
Selling Stockholders (including shares of Inclusion Stock theretofore
Transferred if in any applicable series of related transactions) bears to the
total number of shares of Inclusion Stock at the time Beneficially Owned
(without duplication) by the Selling Stockholders (including shares of Inclusion
Stock theretofore Transferred if in any applicable series of related
transactions). If the Selling Stockholders receive a bona fide offer from an
Inclusion Event Purchaser to purchase shares of Inclusion Stock in circumstances
in which, after giving effect to such sale would result in an Inclusion Event,
and which offer such Selling Stockholders wish to accept, the Selling
Stockholders shall then cause the Inclusion Event Purchaser's offer to be
reduced to writing (which writing shall include an offer to purchase shares of
Inclusion Stock from each Inclusion Event Offeree according to the terms and
conditions set forth in this Section 4.3) and the Selling Stockholders shall
send written notice of the Inclusion Event Purchaser's offer (the "Inclusion
Notice") to each Inclusion Event Offeree, which Inclusion Notice shall specify
(i) the names of the Selling Stockholders, (ii) the names and addresses of the
proposed acquiring Person, (iii) the amount of shares proposed to be Transferred
and the price, form of consideration and other terms and conditions of such
Transfer (including, if in a series of related transactions, such information
with respect to shares of Inclusion Stock theretofore Transferred), (iv) that
the acquiring Person has been informed of the rights provided for in this
Section 4.3 and has agreed to purchase shares of Inclusion Stock in accordance
with the terms hereof, and (v) the date by which each other Selling Stockholder
may exercise its respective rights contained in this Section 4.3, which date
shall not be less than thirty (30) days after the giving of the Inclusion
Notice. The Inclusion Notice shall be accompanied by a true and correct copy of
the Inclusion Event Purchaser's offer. At any time within thirty (30) days after
receipt of the Inclusion Notice, each Inclusion Event Offeree may accept the
offer included in the Inclusion Notice for up to such number of shares of
Inclusion Stock as is determined in accordance with this Section 4.3, by
furnishing written notice of such acceptance to each Selling Stockholder, and
delivering, to an escrow agent (which shall be a bank or a law or accounting
firm designated by the Company), on behalf of the Selling Stockholders, the
certificate or certificates representing the shares of Inclusion Stock to be
sold pursuant to such offer by each Inclusion Event Offeree, duly endorsed in
blank, together with a limited power-of-attorney authorizing the escrow agent,
on behalf of the Inclusion Event Offeree, to sell the shares to be sold pursuant
to the terms of such Inclusion Event Purchaser's offer.
In the event that the Inclusion Event Purchaser does not agree to
purchase all of the shares of Inclusion Stock proposed to be sold by the Selling
Stockholders and the Inclusion Event Offerees, then each Selling Stockholder and
Inclusion Event Offeree shall have the right to sell to the Inclusion Event
Purchaser that number of shares of Inclusion Stock as shall be equal to (x) the
number of shares of Inclusion Stock which the Inclusion Event Purchaser has
agreed to purchase times (y) a fraction, the numerator of which is the number of
shares of Inclusion Stock Beneficially Owned (without duplication) by such
Selling Stockholder or Inclusion Event Offeree and the denominator of which is
the aggregate number of shares of Inclusion Stock Beneficially Owned (without
duplication) by all Selling Stockholders and Inclusion Event Offerees. If any
Inclusion Event Offeree desires to sell less than its proportionate amount of
shares of Inclusion Stock that it is entitled to sell pursuant to this Section
4.3, then the Selling
21
Stockholders and the remaining Inclusion Event Offerees shall have the right to
sell to the Inclusion Event Purchaser an additional amount of shares of
Inclusion Stock as shall be equal to (x) the number of shares of Inclusion Stock
not being sold by any such Inclusion Event Purchasers times (y) a fraction, the
numerator of which is the number of shares of Inclusion Stock owned such Selling
Stockholder or remaining Inclusion Event Offeree and the denominator of which is
the aggregate number of shares of Inclusion Stock Beneficially Owned (without
duplication) by all Selling Stockholders and remaining Inclusion Event Offerees.
Such process shall be repeated in series until all of the remaining Inclusion
Event Offerees agree to sell their remaining proportionate number of shares of
Inclusion Stock.
(b) The purchase from each Inclusion Event Offeree pursuant to this
Section 4.3 shall be on the same terms and conditions, including the price per
share received by the Selling Stockholders and stated in the Inclusion Notice
provided to each Inclusion Event Offeree. In the event that the Inclusion Stock
is Common Stock, all Inclusion Event Offerees shall be required, as a condition
of participating in such transaction, to convert its Preferred Stock into
Common Stock and Transfer Common Stock to the Inclusion Event Purchaser. In the
event that the Inclusion Stock is Series C Preferred Stock and after giving
effect to the rights of the Inclusion Event Offerees to sell their pro rata
share of Series C Preferred Stock or Common Stock pursuant to this Section 4.3
the Inclusion Event Purchaser shall be required to purchase both Series C
Preferred Stock and Common Stock, the purchase price allocable to holders of
Series C Preferred Stock, on the one hand, and to holders of Common Stock, on
the other hand, shall be determined by an independent committee of the Board of
Directors selected from among those directors who were not designated by any
Selling Stockholders or Inclusion Event Offerees, it being understood that the
directors selected pursuant to Section 3.1(a)(ii) shall be deemed independent
for such purposes.
(c) Simultaneously with the consummation of the sale of the shares of
Inclusion Stock of the Selling Stockholders and each Inclusion Event Offeree to
the Inclusion Event Purchaser pursuant to the Inclusion Event Purchaser's offer,
the Selling Stockholders shall notify each Inclusion Event Offeree and shall
cause the purchaser to remit to each Inclusion Event Offeree the total sales
price of the shares of Inclusion Stock held by each Inclusion Event Offeree sold
pursuant thereto and shall furnish such other evidence of the completion and
time of completion of such sale and the terms thereof as may be reasonably
requested by each Inclusion Event Offeree.
(d) If within thirty (30) days after receipt of the Inclusion Notice,
an Inclusion Event Offeree has not accepted the offer contained in the Inclusion
Notice, such Inclusion Event Offeree shall be deemed to have waived any and all
rights with respect to the sale described in the Inclusion Notice (but not with
respect to any subsequent sale, to the extent this Section 4.3 is applicable to
such subsequent sale) and the Selling Stockholders shall have sixty (60) days in
which to sell not more than the number of shares of Inclusion Stock described in
the Inclusion Notice, on terms not more favorable to the Selling Stockholders
than were set forth in the Inclusion Notice; provided, however, that if such
-------- -------
purchase is subject to the consent of
22
the FCC or any public service or public utilities commission, the purchase of
the Offered Shares shall be closed on the first business day after all such
consents shall have been obtained by Final Order.
4.4 Right of First Negotiation. In the event that a Stockholder
--------------------------
desires to Transfer any shares of Common Stock following the IPO Date in a
Transfer described in clauses (x), (y) or (z) of Section 4.1(b), such
Stockholder shall give written notice thereof to AT&T PCS, such notice to
specify, among other things, the number of shares that such Stockholder desires
to sell. For the applicable first negotiation period hereinafter set forth,
AT&T PCS shall have the exclusive right to negotiate with such Stockholder with
respect to the purchase of such shares; it being understood and agreed that such
exclusive right shall not be deemed to be a right of first offer or right of
first refusal for the benefit of AT&T PCS and such Stockholder shall have the
right to reject any offer made by AT&T PCS during such applicable first
negotiation period. Upon the expiration of such applicable first negotiation
period, such Stockholder shall have the right (for the applicable offer period
hereinafter set forth with respect to each applicable first negotiation period),
following the expiration of such applicable first negotiation period, to offer
and sell such shares included in such written notice on such terms and
conditions as shall be acceptable to such Stockholder in its sole discretion.
If any of such shares included in such written notice are not sold pursuant to
the provisions of this Section 4.4 prior to the expiration of the applicable
offer period, such shares shall become subject once again to the provision and
restrictions hereof.
If a Stockholder desires to Transfer shares of Common Stock (a) pursuant to
a Registration of Common Stock under Section 5 in an underwritten offering that
constitutes a bona fide distribution of such Common Stock pursuant to such
Registration, the applicable first negotiation period shall be ten (10) days and
the applicable offer period upon the expiration of such first negotiation period
shall be one hundred twenty (120) days, (b) pursuant to Rule 144, the applicable
first negotiation period shall be three (3) hours (it being understood and
agreed that such Stockholder shall, in addition to giving written notice of such
proposed Transfer by facsimile, use commercially reasonable efforts to contact
AT&T PCS by telephone in accordance with Section 12.1) and the applicable offer
period upon the expiration of such first negotiation period shall be five (5)
business days, and (c) in any single transaction or series of related
transactions to one or more Persons which will result in the Transfer by such
Stockholder (together with any other Stockholder participating in such single
transaction or series of related transactions) of not more than ten percent
(10%) of the Common Stock on a fully diluted basis (excluding for such purposes
the Series A Preferred Stock), the applicable first negotiation period shall be
one (1) business day, so long as notice of such proposed Transfer is given to
AT&T PCS prior to 9:00 A.M. on the day prior to the date of such proposed
Transfer (it being understood and agreed that such Stockholder shall, in
addition to giving written notice of such proposed Transfer by facsimile, use
commercially reasonable efforts to contact AT&T PCS by telephone in accordance
with Section 12.1) and the applicable offer period upon the expiration of such
first negotiation period shall be ten (10) business days.
23
4.5 Additional Conditions to Permitted Transfers.
--------------------------------------------
(a) As a condition to any Transfer to an Affiliated Successor
permitted pursuant to Section 4.1, or any Transfer pursuant to Section 4.2 or
Section 4.3, each transferee that is not a party hereto shall, prior to such
Transfer, agree in writing to be bound by all of the provisions of this
Agreement applicable to the Stockholders (and shall thereby become a Stockholder
for all purposes of this Agreement). Any Transfer without compliance with such
provisions of this Agreement shall be null and void and such transferee shall
have no rights as a Stockholder of the Company.
(b) Notwithstanding anything to the contrary contained in this
Agreement, each Stockholder agrees that it will not effect a Transfer of shares
of Company Stock to a Prohibited Transferee; provided, however, that nothing
contained in this Section 4.5(b) shall be construed to prohibit a Transfer of
Common Stock by a Stockholder after the IPO Date pursuant to an underwritten
Registration or in accordance with the provisions of Rule 144. It shall be
deemed a breach of this Section 4.5(b) by a Stockholder Beneficially Owning more
than 10% of the Common Stock outstanding if any Prohibited Transferee shall
acquire, directly or indirectly, in a private sale Beneficial Ownership of more
than 33-1/3% of any class of equity securities or equity interest in, such
Stockholder.
(c) Subject to Section 4.2, prior to the IPO Date, the Cash Equity
Investors and AT&T PCS may not Transfer shares of Series C Preferred Stock or
Common Stock to any Person that is not an Affiliated Successor of such
Stockholder or another Cash Equity Investor unless after giving effect to such
Transfer each of such Stockholder and such Person shall after giving effect to
such Transfer Beneficially Own more than the lesser of (x) five percent (5%) of
the Common Stock, and (y) one-half of the Common Stock Beneficially Owned by the
transferor on the date hereof, upon such Transfer unless the Transfer by such
Cash Equity Investor or AT&T PCS is a Transfer of all of the shares of Series C
Preferred Stock or Common Stock, as applicable, Beneficially Owned by it.
Subject to Section 4.2, prior to the IPO Date, no Management Stockholder may
effect more than one (1) Transfer of its shares of Common Stock to a Person that
is not an Affiliated Successor of such Management Stockholder during any twelve
(12) month period.
4.6 Representations and Warranties. A Stockholder purchasing shares
------------------------------
of Company Stock pursuant to Section 4.2 shall be entitled to receive
representations and warranties from the transferring Stockholder that such
Stockholder has the authority (corporate or otherwise) to sell such shares, is
the sole owner of such shares, and has good and valid title to such shares, free
and clear of any and all Liens (other than pursuant to this Agreement, the
Restated Certificate or any Related Agreement), and that the sale of such shares
does not violate any agreement to which it is a party or by which it is bound.
4.7 Stop-Transfer.
-------------
24
(a) The Company agrees not to effect any Transfer of shares of Company
Stock by any Stockholder whose proposed Transfer is subject to Sections 4.2, 4.3
or 4.4 until it has received evidence reasonably satisfactory to it that the
rights provided to any other Stockholders pursuant to such Sections, if
applicable to such Transfer, have been complied with and satisfied in all
respects. If any portion of such Stockholder's Unfunded Commitment shall remain
unpaid on the date of such proposed Transfer, then, as a condition of such
Transfer, such Person purchasing such Company Stock shall, or another Cash
Equity Investor may, execute an instrument in form satisfactory to the Company
agreeing to pay in full such Stockholder's Unfunded Commitment outstanding on
the date of such proposed Transfer, provided, however, that such Stockholder
-------- -------
shall not be released from its obligation in respect of such Unfunded
Commitment. No Transfer of any shares of Preferred Stock and/or Common Stock
shall be made except in compliance with all applicable securities laws. Any
Transfer made in violation of this Agreement shall be null and void.
(b) The Company agrees that it will not, without the prior written
consent of AT&T PCS, Transfer, issue or dispose of any Equity Securities to a
Prohibited Transferee except that purchases of Common Stock by a Prohibited
Transferee in connection with a Registration of Common Stock shall not
constitute a violation of this Section 4.7(b).
5. Registration Rights.
-------------------
(a) Demand Registration Rights.
--------------------------
(i) Right to Demand Registration. From and after the ninety-first
----------------------------
(91st) day following the IPO Date (or such longer period as may be required by
the managing underwriters of the Company's initial public offering) and, subject
to Section 4.1(d), each of (A) AT&T PCS, (B) a Qualified Holder, and (C)
Management Stockholders that in the aggregate Beneficially Own at least 50.1% of
the shares of Common Stock then Beneficially Owned by the Management
Stockholders (each a "Demanding Stockholder" and, collectively, the "Demanding
Stockholders") shall have the right to make a written request to the Company for
registration with the Commission, under and in accordance with the provisions of
the Securities Act, of all or part of their Registrable Securities pursuant to
an underwritten offering (a "Demand Registration"), which request shall specify
the number of Registrable Securities proposed to be s old by each Demanding
Stockholder; provided, however, that (x) the Company need not effect a Demand
--------- -------
Registration unless the sale of the Registrable Securities proposed to be sold
by the Demanding Stockholder shall reasonably be expected to result in aggregate
gross proceeds to such Demanding Stockholder of at least $10 million, and (y)
if the Board of Directors determines that a Demand Registration would interfere
with any pending or contemplated material acquisition, disposition, financing or
other material transaction, the Company may defer a Demand Registration
(including by withdrawing any Registration Statement filed in connection with a
Demand Registration); so long as that the aggregate of all such deferrals shall
not exceed one hundred twenty (120) days in any 360-day period. Demand
Registration shall not be deemed a Demand
25
Registration hereunder until such Demand Registration has been declared
effective by the Commission (without interference by any stop order, injunction
or other order or requirement of the Commission or other governmental agency,
for any reason), and maintained continuously effective for a period of at least
three (3) months or such shorter period when all Registrable Securities included
therein have been sold in accordance with such Demand Registration; provided,
--------
however, that a Qualified Holder may, not more frequently than once in any
-------
twelve (12) month period, request that the Demand Registration be a shelf
registration that is maintained continuously effective for a period of at least
six (6) months or such shorter period when all Registrable Securities included
therein have been sold in accordance with such Demand Registration. A Demanding
Stockholder may make a written request for a Demand Registration in accordance
with the foregoing in respect of Equity Securities that it intends to convert
into shares of Common Stock upon the effectiveness of the Registration Statement
prepared in connection with such demand, and the Company shall fulfill its
obligations under this Section 5 in a manner that permits such Demanding
Stockholder to exercise its conversion rights in respect of such Equity
Securities and substantially contemporaneously sell the shares of Common Stock
issuable upon such conversion under such Registration Statement.
The Company will not be obligated to effect more than two (2) separate
Demand Registrations during any twelve (12) month period; provided, however,
-------- -------
that only one (1) request for a Demand Registration may be exercised by AT&T PCS
and/or Management Stockholders that in the aggregate Beneficially Own at least
50.1% of the shares of Common Stock then Beneficially Owned by the Management
Stockholders during any twelve (12) month period.
Within ten (10) days after receipt of the request for a Demand
Registration, the Company will send written notice (the "Demand Notice") of such
Registration request and its intention to comply therewith to all Stockholders
who are holders of Registrable Securities and, subject to Section 5(a)(ii), the
Company will include in such Demand Registration all Registrable Securities of
such Stockholders with respect to which the Company has received written
requests for inclusion therein within twenty (20) days after the last date such
Demand Notice was deemed to have been given pursuant to Section 12.1.
(ii) Priority on Demand Registration. If the managing
-------------------------------
underwriter or underwriters advise the Company and the holders of the
Registrable Securities to be registered in writing that in its or their opinion
that, the number of Registrable Securities proposed to be sold in such
Registration and any other securities of the Company requested or proposed to be
included in such Registration exceeds the number that can be sold in such
offering without (A) creating a substantial risk that the proceeds or price per
share that will be derived from such Registration will be reduced or that the
number of Registrable Securities to be registered is too large a number to be
reasonably sold, or (B) materially and adversely affecting such Registration in
any other respect, the Company will (x) include in such Registration the
aggregate number of Registrable Securities recommended by the managing
underwriter (the number of Registrable Securities to be registered for each
Stockholder to be reduced pro rata based on the amount of Registrable Securities
--- ----
each of the Stockholders requested to be included
26
in such Registration), and (y) not allow any securities s other than Registrable
Securities to be included in such Registration unless all Registrable Securities
requested to be included shall have been included therein, and then only to the
extent recommended by the managing underwriter or determined by the Company
after consultation with an investment banker of nationally recognized standing
(notification of which number shall be given by the Company to the holders of
Registrable Securities).
(iii) Selection of Underwriters. The offering of such Registrable
-------------------------
Securities pursuant to such Demand Registration shall be in the form of an
underwritten offering. The Demanding Stockholder that initiated such Demand
Registration will select a managing underwriter or underwriters of recognized
national standing to administer the offering, which managing underwriter or
underwriters shall be reasonably acceptable to the Company.
(b) Piggyback Registration Rights.
-----------------------------
(i) Right to Piggyback. If the Company proposes to register
------------------
any shares of Common Stock (or securities convertible into or exchangeable for
Common Stock) with the Commission under the Securities Act (other than a
Registration on Form S-4 or Form S-8, or any successor forms), and the
Registration form to be used may be used for the Registration of the Registrable
Securities (a "Piggyback Registration"), the Company will give written notice (a
"Piggyback Notice") to all Stockholders, at least thirty (30) days prior to the
anticipated filing date, of its intention to effect such a Registration, which
notice will specify the proposed offering price (if determined at that time),
the kind and number of securities proposed to be registered, the distribution
arrangements and will, subject to Section 5(b)(ii), include in such Piggyback
Registration all Registrable Securities with respect to which the Company has
received written requests (which requests have not been withdrawn) for inclusion
therein within twenty (20) days after the last date such Piggyback Notice was
deemed to have been given pursuant to Section 12.1. If at any time after giving
the Piggyback Notice and prior to the effective date of the Registration
Statement filed in connection with such Registration, the Company determines for
any reason not to register or to delay Registration, the Company may, at its
election, give written notice of such determination to each holder of
Registrable Securities that has requested inclusion of Registrable Securities in
such Registration and (A) in the case of a determination not to register, shall
be relieved of its obligation to register any Registrable Securities in
connection with such Registration, and (B) in the case of a determination to
delay registering, shall be permitted to delay registering any Registrable
Securities for the same period as the delay in registering such other
securities.
(ii) Priority on Piggyback Registrations. If the managing
-----------------------------------
underwriter or underwriters, if any, advise the Company and the holders of
Registrable Securities in writing that in its or their opinion, that the number
or kind of securities proposed to be sold in such Registration (including
Registrable Securities to be included pursuant to Section 5(b)(i)) exceeds the
number that can be sold in such offering without (A) creating a substantial risk
that
27
the proceeds or price per share the Company will derive from such Registration
will be reduced, or that the number of shares to be registered is too large a
number to be reasonably sold or (B) materially and adversely affecting such
Registration in any other respect, without any reduction in the amount of
securities the Company proposes to issue and sell for its own account or in the
amount of securities any other security holder proposes to sell for its own
account pursuant to a demand Registration right, the number of Registrable
Securities to be registered for each Demanding Stockholder shall be reduced pro
---
rata based on the amount of Registrable Securities ea each of the Demanding
----
Stockholders requested to be included in such Registration, to the extent
necessary to reduce the number of Registrable Securities to be registered to the
number recommended by the managing underwriter or determined by the Company
after consultation with an investment banker of nationally recognized standing
(notification of which number shall be given by the Company to the holders of
Registrable Securities of such determination).
(c) Selection of Underwriters. Except as set forth in Section
-------------------------
5.1(a)(iii), the Company (by action of the Board of Directors) will select a
managing underwriter or underwriters to administer the offering, which managing
underwriter or underwriters will be of nationally recognized standing.
(d) Registration Procedures. With respect to any Demand Registration
-----------------------
or Piggyback Registration (each, a "Registration"), the Company shall, subject
to Sections 5(a)(i) and (5)(a)(ii) and Sections 5(b)(i) and 5(b)(ii), as
expeditiously as practicable:
(i) prepare and file with the Commission, as promptly as
reasonably practicable (but in no event more than forty-five (45) days) after
the receipt of the Registration requests under Sections 5(a) or 5(b), a
registration statement or registration statements (each, a "Registration
Statement") relating to the applicable Registration on any appropriate form
under the Securities Act, which form shall be available for the sale of the
Registrable Securities in accordance with the intended method or methods of
distribution thereof; cooperate and assist in any filings required to be made
with the NASD; and use its reasonable best efforts to cause such Registration
Statement to become and (to the extent provided herein) remain effective;
provided, however, that before filing a Registration Statement or prospectus
-------- -------
related thereto (a "Prospectus") or any amendments or supplements thereto, the
Company shall furnish to the holders of the Registrable Securities covered by
such Registration Statement and the underwriters, if any, copies of all such
documents proposed to be filed, which documents will be subject to the
reasonable review of such holders and underwriters and their respective counsel,
and the Company shall not file any Registration Statement or amendment thereto
or any Prospectus or any supplement thereto to which the holders of a majority
of the Registrable Securities covered by such Registration Statement or the
underwriters, if any, shall reasonably object;
(ii) prepare and file with the Commission such amendments and
supplements to the Registration Statement as may be necessary to keep each
Registration Statement effective for three (3) months (six (6) months in the
case of any shelf registration
28
requested by a Qualified Holder pursuant to this Section 5) or such shorter
period that will terminate when all Registrable Securities covered by such
Registration Statement have been sold; cause each Prospectus to be supplemented
by any required Prospectus supplement, and as so supplemented to be filed
pursuant to Rule 424 under the Securities Act; and comply with the provisions of
the Securities Act with respect to the disposition of all securities covered by
such Registration Statement during the applicable period in accordance with the
intended method or methods of distribution by the sellers thereof set forth in
such Registration Statement or supplement to the Prospectus;
(ii) promptly notify the selling holders of Registrable
Securities and the managing underwriters, if any (and, if requested by any such
person or entity, confirm such advice in writing), (A) when the Prospectus or
any Prospectus supplement or post-effective amendment has been filed, and, with
respect to the Registration Statement or any post-effective amendment, when the
same has become effective; (B) of any request by the Commission for amendments
or supplements to the Registration Statement or the Prospectus or for additional
information; (C) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or the initiation of any
proceedings for that purpose; (D) if at any time the representations and
warranties of the Company contemplated by subsection (xiv) of this subsection
(d) below cease to be true and correct; (E) of the receipt by the Company of any
notification with respect to the suspension of the qualification of the
Registrable Securities for sale under the securities or blue sky laws of any
jurisdiction or the initiation or threatening of any proceeding for such
purpose; and (F) of the happening of any event which makes any statement made in
the Registration Statement, the Prospectus or any document incorporated therein
by reference untrue or which requires the making of any changes in the
Registration Statement, the Prospectus or any document incorporated therein by
reference in order to make the statements therein not misleading;
(iv) use its reasonable best efforts to obtain the withdrawal of
any order suspending the effectiveness of (I) the Registration Statement, or
(II) the qualification of the Registrable Securities for sale under the
securities or blue sky laws of any jurisdiction at the earliest possible time;
(v) if requested by the managing underwriter or underwriters or
a holder of Registrable Securities being sold in connection with an underwritten
offering, promptly incorporate in a Prospectus supplement or post-effective
amendment such information as the managing underwriters and the holders of a
majority of the Registrable Securities being sold agree should be included
therein relating to the plan of distribution with respect to such Registrable
Securities, including, without limitation, information with respect to the
number of Registrable Securities being sold to such underwriters, the purchase
price being paid therefor by such underwriters and any other terms of the
underwritten (or best efforts underwritten) offering of the Registrable
Securities to be sold in such offering; and make all required filings of such
Prospectus supplement or post-effective amendment as soon as notified of the
matters to be incorporated in such Prospectus supplement or post-effective
amendment;
29
(vi) furnish to each selling holder of Registrable Securities
and each managing underwriter, without charge, at least one signed copy of the
Registration Statement and any amendment thereto, including financial statements
and schedules, all documents incorporated therein by reference and all exhibits
(including those incorporated by reference);
(vii) deliver to each selling holder of Registrable Securities
and the underwriters, if any, without charge, as many copies of the Prospectus
(including each preliminary prospectus) and any amendment or supplement thereto
as such selling holder of Registrable Securities underwriters may reasonably
request in order to facilitate the public sale or other disposition of the
securities owned by such selling holder;
(viii) prior to any public offering of Registrable Securities,
use its reasonable best efforts to register or qualify or cooperate with the
selling holders of Registrable Securities, the underwriters, if any, and their
respective counsel in connection with the Registration or qualification of such
Registrable Securities for offer and sale under the securities or "blue sky"
laws of such jurisdictions in the United States as any seller or underwriter
reasonably requests in writing, use its reasonable best efforts to obtain all
appropriate registrations, permits and consents required in connection
therewith, and do any and all other acts or things reasonably necessary or
advisable to enable the disposition in such jurisdictions of the Registrable
Securities covered by the Registration Statement; provided, however, that the
-------- -------
Company will not be required to qualify generally to do business in any
jurisdiction where it is not then so qualified or to take any action that would
subject it to taxation or general service of process in any such jurisdiction
where it is not then so subject;
(ix) cooperate with the selling holders of Registrable
Securities and the managing underwriters, if any, to facilitate the timely
preparation and delivery of certificates representing Registrable Securities to
be sold and not bearing any restrictive legends and to be in such denominations
and registered in such names as the managing underwriters may request at least
two (2) business days prior to any sale of Registrable Securities to the
underwriters;
(x) use its reasonable best efforts to cooperate with any
selling holder to cause the Registrable Securities covered by the applicable
Registration Statement to be registered with or approved by such other
governmental agencies or authorities in the United States as may be necessary to
enable the seller or sellers thereof or the underwriters, if any, to consummate
the disposition of such Registrable Securities;
(xi) upon the occurrence of any event contemplated by
subsection (iii)(F) above, promptly prepare a supplement or post-effective
amendment to the Registration Statement or the related Prospectus or any
document incorporated therein by reference or file any other required document
so that, as thereafter delivered to the purchasers of
30
the Registrable Securities, the 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;
(xii) cause all Registrable Securities covered by any
Registration Statement to be listed on each securities exchange on which similar
securities issued by the Company are then listed, or, if not so listed, cause
such Registrable Securities to be authorized for trading on the NASDAQ National
Market System if any similar securities issued by the Company are then so
authorized, if requested by the holders of a majority of such Registrable
Securities or the managing underwriters, if any;
(xiii) not later than the effective date of the applicable
Registration, provide a CUSIP number for all Registrable Securities;
(xiv) enter into such customary agreements (including in the
case of a Demand Registration that is an underwritten offering, an underwriting
agreement in customary form) and take all such other actions reasonably required
in connection therewith in order to expedite or facilitate the disposition of
such Registrable Securities and in such connection, whether or not an
underwriting agreement is entered into and whether or not the Registration is an
underwritten Registration, (A) make such representations and warranties to the
holders of such Registrable Securities and the underwriters, if any, in form,
substance and scope as are customarily made by issuers to underwriters in
primary underwritten offerings; (B) use reasonable best efforts to obtain
opinions of counsel to the Company and updates thereof (which opinions of
counsel shall be in form, scope and substance reasonably satisfactory to the
managing underwriters, if any, and to the holders of a majority of the
Registrable Securities being sold), addressed to each selling holder and the
underwriters, if any, covering the matters customarily covered in opinions
requested in underwritten offerings and such other matters as may be reasonably
requested by such holders and underwriters; (C) use reasonable best efforts to
obtain "cold comfort" letters and updates thereof from the Company's independent
certified public accountants addressed to the selling holders of Registrable
Securities and the underwriters, if any, such letters to be in customary form
and covering matters of the type customarily covered in "cold comfort" letters
by underwriters in connection with primary underwritten offerings; and (D)
deliver such documents and certificates as may be reasonably requested by the
holders of a majority of the Registrable Securities being sold and the managing
underwriters, if any, to evidence compliance with subsection (xi) above and with
any customary conditions contained in the underwriting agreement or other
agreement entered into by the Company. All the above in this Section 5(d)(xiv)
shall be done at each closing under each underwriting or similar agreement or as
and to the extent required thereunder;
(xv) make available for inspection by a representative of each
Demanding Stockholder, any underwriter participating in any disposition pursuant
to such Registration, and any attorney or accountant retained by the sellers or
underwriter, copies or extracts of all financial and other records, pertinent
corporate documents and properties of the Company as shall be reasonably
necessary, in the opinion of the holders' or underwriter's
31
counsel, to enable them to fulfill their due diligence responsibilities; and
cause the Company's officers, directors and employees to supply all information
reasonably requested by any such representative, underwriter, attorney or
accountant in connection with such Registration Statement; provided, however,
-------- -------
that the Company shall not be required to comply with this paragraph (xv) unless
such person executes confidentiality agreements whereby such person agrees that
any records, information or documents that are designated by the Company in
writing as confidential shall be kept confidential by such Persons and used only
in connection with the proposed Registration unless disclosure of such records,
information or documents is required by court or administrative order or any
regulatory body having jurisdiction; and each seller of Registrable Securities
agrees that it will, upon learning that disclosure of such records, information
or documents is sought in a court of competent jurisdiction or by a governmental
agency, give notice to the Company and allow the Company, at the Company's
expense, to undertake appropriate action to prevent disclosure of any records,
information or documents deemed confidential; provided further, however,
-------- ------- -------
notwithstanding any designation of confidentiality by the Company, confidential
information shall not include information which (i) becomes generally available
to the public other than as a result of a disclosure by or on behalf of any such
Person, or (ii) becomes available to any such Person on a non-confidential basis
from a source other than the Company or its advisors, provided that such source
is not to such Person's knowledge bound by a confidentiality agreement with or
other obligations of secrecy to the Company or another party with respect to
such information;
(xvi) otherwise use its reasonable best efforts to comply
with all applicable rules and regulations of the Commission, and make generally
available to its security holders, earnings statements satisfying the provisions
of Section 11(a) of the Securities Act, no later than forty-five (45) days after
the end of any twelve (12)-month period (or ninety (90) days, if such period is
a fiscal year) (A) commencing at the end of any fiscal quarter in which
Registrable Securities are sold to underwriters in a firm or best efforts
underwritten offering, or (B) if not sold to underwriters in such an offering,
beginning with the first month of the Company's first fiscal quarter commencing
after the effective date of the Registration Statement, which statements shall
cover said twelve (12)-month periods; and
(xvii) promptly prior to the filing of any document that is to
be incorporated by reference into any Registration Statement or Prospectus
(after initial filing of the Registration Statement), provide copies of such
document to counsel to the selling holders of Registrable Securities and to the
managing underwriters, if any, make the Company's executive officers and other
representatives available for discussion of such document and make such changes
in such document prior to the filing thereof as counsel for such selling holders
or underwriters may reasonably request.
The Company may require each seller of Registrable Securities as to which
any Registration is being effected to furnish to the Company such information
regarding the proposed distribution of such securities as the Company may from
time to time reasonably request in writing. Each holder of Registrable
Securities agrees by acquisition of such Registrable
32
Securities that, upon receipt of any notice from the Company of the happening of
any event of the kind described in Section 5(d)(xi), such holder shall forthwith
discontinue disposition of Registrable Securities until such holder's receipt of
the copies of the supplemented or amended prospectus contemplated by Section
5(d)(xi), or until it is advised in writing (the "Advice") by the Company that
the use of the Prospectus may be resumed, and has received copies of any
additional or supplemental filings that are incorporated by reference in the
Prospectus; and, if so directed by the Company, such holder shall deliver to the
Company (at the Company's expense) all copies, other than permanent file copies
then in such seller's possession, of the Prospectus covering such Registrable
Securities current at the time of receipt of such notice. In the event the
Company gives any such notice, the time periods regarding the maintenance of the
effectiveness of any Registration Statement in Sections 5(d)(ii) shall be
extended by the number of days during the period from and including the date of
the receipt of such notice pursuant to Section 5(d)(iii)(F) hereof to and
including the date when each seller of Registrable Securities covered by such
Registration Statement shall have received the copies of the supplemented or
amended prospectuses contemplated by Section 5(d)(xi) or the Advice.
(e) Indemnification.
---------------
(i) In the event of the Registration or qualification of any
Registrable Securities under the Securities Act or any other applicable
securities laws pursuant to the provisions of this Section 5, the Company agrees
to indemnify and hold harmless each Stockholder thereby offering such
Registrable Securities for sale (an "Indemnified Stockholder"), underwriter,
broker or dealer, if any, of such Registrable Securities, and each other person,
if any, who controls any such Indemnified Stockholder, underwriter, broker or
dealer within the meaning of the Securities Act or any other applicable
securities laws, from and against any and all losses, claims, damages, expenses
or liabilities (or actions in respect thereof), joint or several, to which such
Indemnified Stockholder, underwriter, broker or dealer or controlling person may
become subject under the Securities Act or any other applicable federal or state
securities laws or otherwise, insofar as such losses, claims, damages, expenses
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact contained
in any Registration Statement under which such Registrable Securities were
registered or qualified under the Securities Act or any other applicable
securities laws, any preliminary prospectus or final prospectus relating to such
Registrable Securities, or any amendment or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, or any violation by the Company of any rule or regulation under
the Securities Act or any other applicable federal or state securities laws
applicable to the Company or relating to any action or inaction required by the
Company in connection with any such Registration or qualification, and will
reimburse each such Indemnified Stockholder, underwriter, broker or dealer and
each such controlling person for any legal or other expenses reasonably incurred
by such Indemnified Stockholder, underwriter, broker or dealer or controlling
person in connection with investigating or defending any such loss, claim,
damage, expense, liability or action; provided, however, that the Company will
-------- ------
not be liable in any such
33
case to the extent that any such loss, claim, damage, expense or liability
arises out of or is based upon an untrue statement or omission contained in such
Registration Statement, such preliminary prospectus, such final prospectus or
such amendment or supplement thereto, made in reliance upon and in conformity
with written information furnished to the Company by such Indemnified
Stockholder, underwriter, broker, dealer or controlling person specifically and
expressly for use in the preparation thereof or by the failure of such
Indemnified Stockholder, underwriter, broker or dealer, or controlling person to
deliver a copy of the Registration Statement, such preliminary prospectus, such
final prospectus or such amendment or supplement thereto after the Company has
furnished such party with a sufficient number of copies of the same and such
party failed to deliver or otherwise provide a copy of the final prospectus to
the person asserting an untrue statement or omission or alleged untrue statement
or omission at or prior to the written confirmation of the sale of securities to
such person, if such statement or omission was in fact corrected in such final
prospectus.
(ii) In the case of an underwritten offering in which the
Registration Statement covers Registrable Securities, the Company agrees to
enter into an underwriting agreement in customary form and substance with such
underwriters and to indemnify the underwriters, their officers and directors, if
any, and each person, if any, who controls such underwriters within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act, to the
same extent as provided in the preceding paragraph with respect to the
indemnification of the holders of Registrable Securities; provided, however, the
-------- -------
Company shall not be required to indemnify any such underwriter, or any officer
or director of such underwriter or any person who controls such underwriter
within the meaning of Section 15 of the Securities Act and Section 20 of the
Exchange Act, to the extent that the loss, claim, damage, expense or liability
(or actions in respect thereof) for which indemnification is sought results from
such underwriter's failure to deliver or otherwise provide a copy of the final
prospectus to the person asserting an untrue statement or omission or alleged
untrue statement or omission at or prior to the written confirmation of the sale
of securities to such person, if such statement or omission was in fact
corrected in such final prospectus.
(iii) In the event of the Registration or qualification of any
Registrable Securities of the Stockholders under the Securities Act or any other
applicable federal or state securities laws for sale pursuant to the provisions
hereof, each Indemnified Stockholder agrees severally, and not jointly, to
indemnify and hold harmless the Company, each person who controls the Company
within the meaning of the Securities Act, and each officer and director of the
Company from and against any losses, claims, damages, expenses or liabilities
(or actions in respect thereof), joint or several, to which the Company, such
controlling person or any such officer or director may become subject under the
Securities Act or any other applicable securities laws or otherwise, insofar as
such losses, claims, damages, expenses or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement of any material
fact contained in any Registration Statement under which such Registrable
Securities were registered or qualified under the Securities Act or any other
applicable securities laws, any preliminary prospectus or final prospectus
relating to such Registrable Securities, or any amendment or
34
supplement thereto, or arise out of or are based upon an untrue statement
therein or the omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, which untrue
statement or omission was made therein in reliance upon and in conformity with
written information furnished to the Company by such Indemnified Stockholder
specifically and expressly for use in connection with the preparation thereof,
and will reimburse the Company, such controlling person and each such officer or
director for any legal or any other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
expense, liability or action; provided, however, an Indemnified Stockholder's
-------- ------
liability under this Section 5(e)(iii) shall not exceed the net proceeds
received by such Indemnified Stockholder with respect to the sale of any
Registrable Securities.
(iv) In the case of an underwritten offering of Registrable
Securities, each holder of a Registrable Security included in a Registration
Statement shall agree to enter into an underwriting agreement in customary form
and substance with such underwriters, and to indemnify such underwriters, their
officers and directors, if any, and each person, if any, who controls such
underwriters within the meaning of Section 15 of the Securities Act and Section
20 of the Exchange Act, to the same extent as provided in the preceding
paragraph with respect to indemnification by such holder of the Company, but
subject to the same limitation as provided in Section 5(e)(ii) with respect to
indemnification by the Company of such underwriters, officers, directors and
control persons.
(v) Promptly after receipt by a person entitled to
indemnification under this Section 5(e) (an "Indemnified Party") of notice of
the commencement of any action or claim relating to any Registration Statement
filed under this Section 5 as to which indemnity may be sought hereunder, such
Indemnified Party will, if a claim for indemnification hereunder in respect
thereof is to be made against any other party hereto (an "Indemnifying Party"),
give written notice to each such Indemnifying Party of the commencement of such
action or claim, but the omission to so notify each such Indemnifying Party will
not relieve any such Indemnifying Party from any liability which it may have to
any Indemnified Party otherwise than pursuant to the provisions of this Section
5(e) and shall also not relieve any such Indemnifying Party of its obligations
under this Section 5(e) except to the extent that any such Indemnifying Party is
actually prejudiced thereby. In case any such action is brought against an
Indemnified Party, and such Indemnified Party notifies an Indemnifying Party of
the commencement thereof, such Indemnifying Party will be entitled (at its own
expense) to participate in and, to the extent that it may wish, jointly with any
other Indemnifying Party similarly notified, to assume the defense, with counsel
reasonably satisfactory to such Indemnified Party, of such action and/or to
settle such action and, after notice from the Indemnifying Party to such
Indemnified Party of its election so to assume the defense thereof, the
Indemnifying Party will not be liable to such Indemnified Party for any legal or
other expenses subsequently incurred by such Indemnified Party in connection
with the defense thereof, other than the reasonable cost of investigation;
provided, however, that no Indemnifying Party shall consent to the entry of any
-------- ------
judgment or enter into any settlement agreement without the prior written
consent of the Indemnified Party unless such Indemnified Party is fully released
and
35
discharged from any such liability, and no Indemnified Party shall consent
to the entry of any judgment or enter into any settlement of any such action the
defense of which has been assumed by an Indemnifying Party without the consent
of each Indemnifying Party. Notwithstanding the foregoing, the Indemnified Party
shall have the right to employ its own counsel in any such case, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Party
unless (a) the employment of such counsel shall have been authorized in writing
by the Indemnifying Party in connection with the defense of such suit, action,
claim or proceeding; (b) the Indemnifying Party shall not have employed counsel
(reasonably satisfactory to the Indemnified Party) to take charge of the defense
of such action, suit, claim or proceeding; or (c) such Indemnified Party shall
have reasonably concluded, based upon the advice of counsel, that there may be
defenses available to it which are different from or additional to those
available to the Indemnifying Party which, if the Indemnifying Party and the
Indemnified Party were to be represented by the same counsel, could result in a
conflict of interest for such counsel or materially prejudice the prosecution of
the defenses available to such Indemnified Party. If any of the events specified
in clauses (a), (b) or (c) of the preceding sentence shall have occurred or
shall otherwise be applicable, then the fees and expenses of one counsel or firm
of counsel selected by a majority in interest of the indemnified parties (and
reasonably acceptable to the Indemnifying Party) shall be borne by the
Indemnifying Party. If, in any such case, the Indemnified Party employs separate
counsel, the Indemnifying Party shall not have the right to direct the defense
of such action, suit, claim or proceeding on behalf of the Indemnified Party and
the Indemnified Party shall assume such defense and/or settle such action;
provided, however, that an Indemnifying Party shall not be liable for the
-------- ------
settlement of any action, suit, claim or proceeding effected without its prior
written consent, which consent shall not be unreasonably withheld.
The provisions of this Section 5(e) shall be in addition to any
liability which any party may have to any other party and shall survive any
termination of this Agreement.
(f) Contribution. If for any reason the indemnification provided for
------------
in Section 5(e)(i) or 5(e)(iii) is unavailable to an Indemnified Party as
contemplated therein, then the Indemnifying Party, in lieu of indemnification
shall contribute to the amount paid or payable by the Indemnified Party as a
result of such loss, claim, damage, expense or liability (or action in respect
thereof) in such proportion as is appropriate to reflect not only the relative
benefits received by the Indemnified Party and the Indemnifying Party, but also
the relative fault of the Indemnified Party and the Indemnifying Party, as well
as any other relevant equitable considerations, provided that no Stockholder
shall be required to contribute in an amount greater than the difference between
the net proceeds received by such Stockholder with respect to the sale of any
Registrable Securities and all amounts already contributed by such Stockholder
with respect to such claims, including amounts paid for any legal or other fees
or expenses incurred by such Stockholder. No person guilty of a 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 any such
fraudulent misrepresentation. The relative fault of such Indemnifying Party and
Indemnified Party shall be determined by reference to, among other things,
whether any action in
36
question, including any untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact, has been made by, or
relates to information supplied by, such Indemnifying Party or Indemnified
Party, and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such action.
(g) Registration Expenses. Except as hereinafter provided, all
---------------------
expenses incident to the Company's performance of or compliance with this
Section 5 will be borne by the Company, including, without limitation, all
Registration and filing fees under the Securities Act and the Exchange Act, the
fees and expenses of the counsel and accountants for the Company (including the
expenses of any "cold comfort" letters and special audits required by or
incident to the performance of such persons), all other costs and expenses of
the Company incident to the preparation, printing and filing under the
Securities Act of the Registration Statement (and all amendments and supplements
thereto), and furnishing copies thereof and of the Prospectus included therein,
all out-of-pocket expenses of underwriters customarily paid for by issuers to
the extent provided for in any underwriting agreement, the costs and expenses
incurred by the Company in connection with the qualification of the Registrable
Securities under the state securities or "blue sky" laws of various
jurisdictions, the costs and expenses associated with filings required to be
made with the NASD, the costs and expenses of listing the Registrable Securities
for trading on a national securities exchange or authorizing them for trading on
NASDAQ and all other costs and expenses incurred by the Company in connection
with any Registration hereunder. In addition, the Company shall pay or
reimburse the sellers of Registrable Securities the reasonable fees and expenses
of one attorney to such sellers incurred in connection with a registration
(collectively, with the expenses referred to in the immediately preceding
sentence, the "Registration Expenses"). Except as provided in the immediately
preceding sentence, each Stockholder shall bear the costs and expenses of any
underwriters' discounts and commissions, brokerage fees or transfer taxes
relating to the Registrable Securities sold by such Stockholder and the fees and
expenses of any attorneys, accountants or other representatives retained by the
Stockholder.
(h) Participation in Underwritten Registrations. No Stockholder may
-------------------------------------------
participate in any underwritten Registration hereunder unless such Stockholder
(i) agrees to sell its Registrable Securities on the basis provided in any
customary and reasonable underwriting arrangements approved by the persons
entitled hereunder to select the underwriter, and (ii) accurately completes in a
timely manner and executes all questionnaires, powers of attorney, underwriting
agreements, indemnities and other documents customarily required under the terms
of such underwriting arrangements.
(i) Holdback Agreements.
-------------------
(i) Each holder of Registrable Securities whose securities are
included in a Registration Statement agrees not to effect any public sale or
distribution of the issue being registered or a similar security of the Company,
or any securities convertible into or exchangeable or exercisable for such
securities, including a sale pursuant to Rule 144 or Rule
37
144A under the Securities Act, during the fifteen (15) days prior to, and during
the ninety (90)-day period (or such longer period as requested by the managing
underwriter or underwriters in the case of an underwritten public offering)
beginning on, the effective date of such Registration Statement (except as part
of such Registration), if and to the extent requested by the managing
underwriter or underwriters in an underwritten public offering.
(ii) The Company agrees not to effect any public sale or
distribution of the issue being registered or a similar security of the Company,
or any securities convertible into or exchangeable or exercisable for such
securities (other than any such sale or distribution of such securities in
connection with any merger or consolidation by the Company or any Subsidiary or
the acquisition by the Company or any Subsidiary of the capital stock or
substantially all of the assets of any other Person), during the fifteen (15)
days prior to, and during the ninety (90)-day period beginning on, the effective
date of each Demand Registration.
(j) Public Information Reporting. The Company hereby covenants and
----------------------------
agrees to and with the Stockholders that at all times following the IPO Date it
shall provide and file such financial and other information concerning the
Company as may from time to time be required by the Commission and any other
governmental authority having jurisdiction, so as to comply with all reporting
requirements under the Exchange Act, and shall, upon request, state in writing
that it has complied with all such requirements, and further agrees that, for so
long as (following the IPO Date) the Company is not subject to Section 13 or
15(d) of the Exchange Act, the Company shall comply in all respects with
paragraph (c)(2) of Rule 144.
6. Disqualifying Transactions.
--------------------------
6.1 Company Conversion Rights. In the event AT&T PCS terminates its
-------------------------
obligations under Section 8.6 pursuant to Section 8.8(c) with respect to any
Overlap Territory, the Company shall have the following rights which may be
exercised by the Company in its sole discretion during the sixty (60) day period
commencing on the date of such termination:
(a) (i) The Company shall have the right in accordance with
the Restated Certificate to cause AT&T PCS and such Section 4.8 Transferee (as
defined in the Restated Certificate) to exchange either (A) all, or (B) a
proportionate number of shares of Series A Preferred Stock then owned by AT&T
PCS and each Section 4.8 Transferee equal to a fraction, the numerator of which
is the number of POPS in the Overlap Territory and the denominator of which is
the total number of POPS in the Territory, of the shares of Series A Preferred
Stock then owned by AT&T PCS and each Section 4.8 Transferee for an equivalent
number of shares of Series B Preferred Stock determined in accordance with the
Restated Certificate; and
(ii) The Company shall have the right in accordance with the
Restated Certificate to cause AT&T PCS and each Section 4.8 Transferee to
exchange either (A) all or (B) a proportionate number equal to a fraction, the
numerator of which is the number of
38
POPs in the Overlap Territory, and the denominator of which is the total number
of POPs in the Territory, of the shares of Series D Preferred Stock owned by
AT&T PCS on the date hereof (or Series C Preferred Stock or Common Stock into
which such shares shall have been converted) and that AT&T PCS continues to own
on the date such right is exercised by the Company for that number of shares of
Series B Preferred Stock as shall be equal to the aggregate purchase price paid
by AT&T PCS for all of such shares of Series D Preferred Stock, Series C
Preferred Stock or Common Stock that AT&T PCS or such Section 4.8 Transferee
then owns (including any Series C Preferred Stock or Common Stock into which
such Series D Preferred Stock shall have been converted) divided by the
liquidation preference of the Series B Preferred Stock determined in accordance
with the Restated Certificate;
provided, however, that (x) if the Company exercises its right under clause
-------- -------
(i)(A) of this Section 6.1(a) it shall be required to exercise its right under
clause (ii)(A) of this Section 6.1(a), and vice versa; and if the Company
exercises its right under clause (i)(B) of the Section 6.1(a) it shall be
required to exercise its right under clause (ii)(B) of this Section 6.1(a) and
vice versa, and (y) the provisions of this Section 6.1(a) shall not apply to any
Section 4.8 Transferee which is a Cash Equity Investor.
(b) The Company may redeem the shares of Series B Preferred Stock
at any time as provided in the Restated Certificate.
6.2 Joint Marketing Right. During the period commencing on the date
---------------------
of announcement by AT&T PCS of a transaction meeting the description of a
transaction set forth in clauses (a), (b) and (c) of the definition of a
Disqualifying Transaction (unless AT&T PCS notifies the Company it has waived
its right to declare such transaction a Disqualifying Transaction in which
event, this Section 6.2 shall not be applicable to such transaction) and
terminating on the later of (x) six (6) months after the date of consummation of
such transaction, and (y) if applicable, the date by which AT&T PCS is required
under applicable law to dispose of any PCS System or Cellular System serving a
Subject Market (the "Section 6.2 Period"), the following provisions shall apply:
(a) If AT&T PCS proposes to sell, transfer or assign to any
Person which is not an Affiliate of AT&T PCS any Subject Market, AT&T PCS shall
give written notice (the "Company Sale Notice") to the Company and the Company
shall have the right, exercisable by written notice given within ten (10) days
of receipt of the Company Sale Notice, to elect to cause AT&T PCS to offer for
sale jointly with the Company for a period of one hundred eighty (180) days the
Subject Markets covered by the Company Sale Notice together with all of the
Territory included in the MTA that includes the Subject Markets (the "Joint
Marketing Period"). In the event that AT&T PCS has granted similar rights to the
rights set forth in this Section 6.2 to any Permitted Merger Participant and any
Subject Market is also a "Subject Market" under the terms of any agreement
between AT&T PCS and any such Permitted Merger Participant, the Company agrees
that any territory of the Permitted Merger Participant that is required under
the terms of such agreement to be offered for sale jointly with any Subject
39
Markets shall be offered for sale jointly with such Subject Markets and all of
the Territory included in the MTA that includes such Subject Markets. During
the Joint Marketing Period, AT&T PCS shall not sell the Subject Markets other
than in a transaction that includes the Subject Markets and the Territory
included in the MTA that includes the Subject Markets, provided, however, that
-------- -------
neither AT&T PCS nor the Company shall be obligated to enter into a transaction
for such Subject Markets and such Territory other than on terms acceptable to
each of them in their sole discretion. This Section 6.2 shall cease to apply to
any Subject Market upon the earlier of (x) if the Company fails to make the
joint marketing election with respect to the applicable Subject Market within
the ten (10) day period referred to above, the expiration of such ten (10) day
period, or (y) if the Company makes the joint marketing election with respect to
the applicable Subject Market, upon the expiration of the Joint Marketing
Period.
(b) Nothing contained in this Section 6.2 shall (x) be construed
to require AT&T PCS to deliver a Company Sale Notice with respect to any Subject
Market except during the Section 6.2 Period, (y) extend the obligation of AT&T
PCS set forth in this Section 6.2 beyond the expiration of the Section 6.2
Period or (z) apply to any sale, transfer or assignment of any Subject Market
pursuant to an agreement executed on any date not within the Section 6.2 Period.
(c) Nothing in this Agreement shall be construed to require AT&T
PCS to deliver the notice described in clause (d) of the definition of a
Disqualifying Transaction, including, without limitation, circumstances in which
AT&T PCS or its Affiliates enters into any transaction meeting the description
of a transaction set forth in clauses (a), (b) and (c) of the definition of a
Disqualifying Transaction.
7. Additional Rights and Covenants.
-------------------------------
7.1 Financial Statements. The Company shall provide to each
--------------------
Stockholder (a) within seventy-five (75) days after the end of each fiscal
quarter (other than the fourth fiscal quarter) or such shorter periods as is
required pursuant to the terms of the Company's senior indebtedness, the
unaudited consolidated balance sheet of the Company and its Subsidiaries as at
the end of such period and the related unaudited consolidated statements of
income, surplus and cash flows for such period and year-to-date and (b) within
one hundred twenty (120) days after the end of each fiscal year, the audited
consolidated balance sheet of the Company and its Subsidiaries as at the end of
such year and the related unaudited consolidated statements of income, surplus
and cash flows for such year. All financial statements and information provided
pursuant to this Section 7.1 shall constitute Confidential Information under
Section 7.7.
7.2 Purchase Right.
--------------
(a) If on or prior to the IPO Date the Company proposes to
offer, issue, sell or otherwise dispose of shares of any class or series of
common stock or preferred stock, or options, rights, warrants, conversion rights
or appreciation rights relating thereto, or any other
40
type of equity security (collectively, "Equity Securities") of the Company for
cash to any Person, including pursuant to an initial public offering, (x) the
Company shall, prior to any such offer, issuance, sale or other disposition,
give written notice (an "Issuance Notice") to each of the Stockholders setting
forth the purchase price of such Equity Securities (or, in the case of an
initial public offering, the anticipated price range), the type and aggregate
number of Equity Securities or rights to acquire Equity Securities to be so
offered, issued, sold or otherwise disposed of, the terms and conditions of such
offer, issuance, sale or other disposition, and the rights, powers and duties
inhering in such additional Equity Securities or rights to acquire Equity
Securities, and (y) each Stockholder shall have the right (the "Purchase Right")
to acquire the percentage of Equity Securities proposed to be offered, issued,
sold or otherwise disposed of equal to the number of shares of Common Stock then
Beneficially Owned by such Stockholder divided by the aggregate number of shares
of Common Stock outstanding immediately prior to such offer, issuance, sale or
other disposition of Equity Securities (including any shares of Common Stock
Beneficially Owned by such Stockholder); provided, however, that the terms and
-------- -------
conditions of this Section 7.2 shall not apply to any offer, issuance, sale or
other disposition of Equity Securities or rights to acquire Equity Securities to
any Person pursuant to a stock option or stock appreciation rights plan
established by the Company for the benefit of its employees, officers,
directors, agents or consultants, or otherwise granted to an employee of the
Company in connection with such person's employment by the Company.
(b) Each Stockholder may exercise such Purchase Right, in whole or in
part, on the terms and conditions and for the purchase price set forth in the
Issuance Notice, by giving to the Company notice to such effect, within thirty
(30) days after the giving of the Issuance Notice. In the case of an initial
public offering, the following conditions shall apply to the Purchase Right set
forth herein: (i) In the event that a Stockholder exercises such Purchase
Right, such Stockholder shall be obligated to exercise such right if the public
offering price is not greater than the highest price in the anticipated range
specified in the applicable notice, and (ii) in the event that a Stockholder
exercises such Purchase Right and the public offering price is greater than the
highest price in the anticipated range specified in the applicable notice, such
Stockholder shall have the right but not the obligation, to exercise such right
at such public offering price. After the expiration of such thirty (30) day
period, the Company shall have the right to offer, issue, sell and otherwise
dispose of any or all of the Equity Securities referred to in the applicable
Issuance Notice as to which no Purchase Right has been exercised but only upon
the terms and conditions, and for a purchase price not lower than the purchase
price set forth in the Issuance Notice; provided, however, that in the case of
an initial public offering, such right of the Company shall be the right to
offer, issue, sell and otherwise dispose of such Equity Securities at any price.
In the event of an initial public offering of Equity Securities at a price more
than 20% below such lowest price, AT&T PCS shall have the right, exercisable at
the time of pricing of such initial public offering, to exercise such Purchase
Right. If the Company does not offer, issue, sell or otherwise dispose of the
Equity Securities referred to in the applicable Issuance Notice on the terms and
conditions set forth in such Issuance Notice within one hundred twenty (120)
days after the expiration of such thirty (30) day period, then any subsequent
41
proposal by the Company to offer, issue, sell or otherwise dispose of such
Equity Securities shall be subject to this Section 7.2.
7.3 Access. The Company shall permit, and shall cause each of its
------
Subsidiaries to permit, upon reasonable notice, during normal business hours,
each Qualified Holder and Xxxxx, for so long as it has the right to an observer
to the Board of Directors pursuant to Section 3.1, and its directors, officers,
employees, attorneys, accountants, representatives, consultants and other
agents, at the sole expense of such Qualified Holder, to (a) visit and inspect
any of the properties and facilities of the Company and its Subsidiaries, (b)
examine and make copies of and extracts from the corporate and financial records
of the Company and its Subsidiaries, (c) discuss the affairs, finances and
accounts of the Company or any such Subsidiary with any of its officers,
directors and key employees and its independent accountants, and (d) otherwise
investigate the properties, businesses and operations of the Company and its
Subsidiaries, in each case as such Qualified Holder reasonably deems necessary;
provided, however, that each Qualified Holder may exercise its rights pursuant
-------- -------
to this Section 7.3 no more than three times in any 12-month period. The
Company shall, and shall cause each of its Subsidiaries and the officers,
directors and employees of the Company and its Subsidiaries to, cooperate fully
in connection with such inspection, examinations and discussions. The
presentation of a copy of this Agreement by any Qualified Holder to the
independent accountants of the Company or any of its Subsidiaries shall
constitute permission by the Company or such Subsidiary to its independent
accountants to participate in discussions with such Qualified Holder.
7.4 Merger, Sale or Liquidation of the Company.
------------------------------------------
(a) Except for transactions permitted pursuant to Section 7.11
and to the extent permitted in this Section 7.4, the Company shall not, and
shall not permit any of its Subsidiaries to, except with the prior written
consent of AT&T PCS or in accordance with Sections 7.4(b) and 7.4(c), effect (i)
any merger, combination or consolidation of the Company or such Subsidiary with
or into any other entity (regardless of whether the Company or such Subsidiary
is the surviving entity in any such transaction) (any such merger, combination
or consolidation is referred to as a "Company Merger"), (ii) any sale or
disposition of a substantial portion of its assets (a "Company Asset Sale"), or
(iii) the liquidation, dissolution or winding up of the Company or such
Subsidiary.
(b) The Company and its Subsidiaries may effect a Company Merger,
without the prior written consent of AT&T PCS, (i) in which the only constituent
corporations are two or more of the Company's wholly owned Subsidiaries, (ii) in
which the only constituent corporations are the Company and one or more of its
wholly owned Subsidiaries and the Company is the surviving corporation, or (iii)
between a Subsidiary of the Company and another entity for the purpose of
acquiring such other entity; provided, that (x) such transaction does not affect
---------
the capital structure of the Company, except to the extent the Company issues
common stock to the stockholders of the other entity pursuant to the terms of
such Company Merger, (y)
42
the surviving corporation is a direct or indirect wholly owned Subsidiary of the
Company, and (z) the consummation of such transaction does not violate Section
8.1(a).
(c) The Company and its Subsidiaries may effect any of the
transactions described in clauses (i) or (ii) of Section 7.4(a) (a "Sale
Transaction"), without the prior written consent of AT&T PCS, if (a) such
transaction has no material effect on AT&T PCS' equity interest in the Company
(and the seniority thereof) or its rights under this Agreement, (b) the
Company's direct or indirect interest in its assets is unaffected by such
transaction in any material respect, and (c) such transaction is otherwise
equivalent in all material respects to AT&T PCS to the sale by each of the other
Stockholders of its equity interests in the Company for cash or marketable
securities; provided, that any such Sale Transaction shall nevertheless be
---------
subject to a right of first offer in accordance with the provisions of Section
7. 4(d).
(d) Prior to entering into a Sale Transaction, the Company shall
give written notice (the "Sale Notice") to AT&T PCS. Each Sale Notice shall
describe in reasonable detail all material terms of the proposed Sale
Transaction. The Sale Notice shall constitute an irrevocable offer (a "Sale
Offer") to enter into the Sale Transaction with AT&T PCS on the terms set forth
in the Sale Notice. AT&T PCS shall have the irrevocable right and option, but
not the obligation, to accept the Sale Offer in whole but not in part by giving
written notice of its acceptance of such offer within thirty (30) days of the
date of the Sale Notice is given. The Sale Transaction shall be closed at the
principal executive offices of the Company within thirty (30) days after the
acceptance by AT&T PCS of the Sale Offer; provided, however, that, if the Sale
-------- --------
Transaction is subject to the consent of the FCC or any public service or public
utilities commission, the Sale Transaction shall be closed on the fifth business
day after all such consents shall have been obtained by Final Order. If AT&T PCS
declines (which shall include the failure to give timely notice of acceptance)
to accept the Sale Offer, the Company shall have the right (for a period of
ninety (90) days following the expiration of the thirty (30) day acceptance
period referred to above) to close a Sale Transaction on the terms described in
the Sale Offer (except that the price must be at least 95% of the price set
forth in the Sale Offer); provided however that, if the consent of the FCC or
-------- -------
any public service or public utilities commission is required, the Sale
Transaction may be closed not later than the fifth business day after all such
consents shall have been obtained by Final Order. If, after giving a Sale Offer,
the Company does not close a Sale Transaction in accordance with the terms of
the immediately preceding sentence, the Company shall not effect any Sale
Transaction without giving another Sale Notice in accordance with this Section
7.4(d).
7.5 Wholly-Owned Subsidiaries. All of the Company's Subsidiaries
-------------------------
shall be direct or indirect wholly owned Subsidiaries of the Company, and the
Company shall not, and shall not permit any Subsidiary to, sell or issue,
transfer, encumber or otherwise dispose of any shares of capital stock of any
of the Company's Subsidiaries to any Person other than the Company and its
direct or indirect wholly owned Subsidiaries, except for a pledge of any such
shares in connection with the incurrence of indebtedness.
43
7.6 Amendments of the Restated Certificate and By-Laws. Prior to the
--------------------------------------------------
IPO Date, the Company shall not, without the prior written consent of AT&T PCS,
authorize or adopt any amendment, modification or repeal of any provision of the
Restated Certificate or the Restated By-Laws, unless such amendment is
consistent with the terms of this Agreement.
7.7 Confidentiality.
---------------
(a) Each party shall, and shall cause each of its Affiliates, and
its and their respective stockholders, members, managers, directors, officers,
employees and agents (collectively "Representatives") to, keep secret and retain
in strictest confidence any and all information relating to the Company or any
other party that is designated in writing by the party providing such
information or the Company as confidential ("Confidential Information") and
shall not disclose such information, and shall cause its Representatives not to
disclose such information, to anyone except such Affiliates, Representatives or
any other Person that agrees in writing to keep in confidence all such
information in accordance with the terms of this Section 7.7. Each party agrees
to use such information received from another party or the Company only in
connection with its ownership interest in the Company but not for any other
purpose. All such information furnished pursuant to this Agreement shall be
returned promptly to the party to whom it belongs upon request by such party.
(b) To the fullest extent permitted by law, if a party or any of
its Affiliates or Representatives breaches, or threatens to commit a breach of,
this Section 7.7, the party whose Confidential Information shall be disclosed,
or threatened to be disclosed, shall have the right and remedy to have this
Section 7.7 specifically enforced by any court having jurisdiction, it being
acknowledged and agreed that money damages will not provide an adequate remedy
to such party. Nothing in this Section 7.7 shall be construed to limit the right
of any party to collect money damages in the event of breach of this Section
7.7.
(c) Anything else in this Agreement notwithstanding, each party
shall have the right to disclose any information, including Confidential
Information of the other party or such other party's Affiliates, in any filing
with any regulatory agency, court or other authority or any disclosure to a
trustee of public debt of a party to the extent that the disclosing party
determines in good faith that it is required by Law, regulation or the terms of
such debt to do so; provided, however, that any such disclosure shall be as
-------- -------
limited in scope as possible and shall be made only after giving the other party
as much notice as practicable of such required disclosure and an opportunity to
contest such disclosure if possible.
7.8 IPO Date. In the event that the IPO Date shall not have occurred
--------
on or prior to the fifth (5th) anniversary of the date hereof, the Company
shall, at the request of any Qualified Holder, as promptly as is reasonably
practicable after the date of such request, undertake a registration of Common
Stock pursuant to an effective Registration Statement that results in the
occurrence of the IPO Date; provided, however, that if the Board of Directors
-------- -------
determines that such registration would interfere with any pending or
contemplated material
44
acquisition, disposition, financing or other material transaction, the Company
may defer such registration (including by withdrawing any Registration Statement
filed in connection with such registration); provided that the aggregate of all
--------
such deferrals shall not exceed one hundred twenty (120) days in any 360-day
period. Any such registration pursuant shall be pursuant to an underwritten
offering. Each Stockholder agrees to cooperate in such registration, including,
without limitation, entering into customary holdback agreements.
7.9 AT&T PCS Retained Licenses. In the event that AT&T PCS desires
--------------------------
to Transfer all or any of the AT&T PCS Retained Licenses in the Territory at any
time prior to the eighth anniversary of the date hereof, AT&T PCS shall give
written notice thereof to the Company at least thirty (30) days prior to
entering into a binding agreement to sell such AT&T PCS Retained Licenses in the
Territory such notice to specify among other things, the AT&T PCS Retained
Licenses in the Territory that it desires to sell. For a period of thirty (30)
days after the date such notice is given, the Company shall have the right to
negotiate with AT&T PCS with respect to the purchase of all, but not less than
all, of such AT&T Retained Licenses in the Territory; it being understood and
agreed that such right shall not be deemed to be a right of first offer or right
of first refusal for the benefit of the Company and AT&T PCS shall have the
right to reject any offer made by the Company during such thirty (30) day
period. In the event no binding agreement to sell all or any of such AT&T PCS
Retained Licenses in the Territory is entered into prior to the expiration of
the one hundred and eighty (180) day period following the expiration of such
(30) day period, such Licenses shall become subject once again to the provision
and restrictions hereof.
7.10 Regulatory Cooperation. Each of the Stockholders severally
----------------------
agrees to comply with the last sentence of Section 6.7 of the Securities
Purchase Agreement.
7.11 Permitted Transactions. Notwithstanding the terms of Section
----------------------
7.4(a) and 8.4(a):
(a) after completion of the Minimum Build-Out Plan and
certification that Company Systems meet the TDMA Quality Standards, the Company
and its Subsidiaries may effect a merger, combination of consolidation with or
into a Permitted Merger Participant or acquire all or substantially all of the
assets of a Permitted Merger Participant or sell all or substantially all of the
assets of the Company and its Subsidiaries to a Permitted Merger Participant
(any such transaction being referred to as a "Permitted Consolidating
Transaction"), so long as such transaction is approved by the Board of Directors
and the holders of the Company's capital stock to the extent such approval is
required pursuant to the Restated Certificate or applicable law; and
(b) the Company may acquire FCC Licenses (each such License a
"Permitted Cellular License") authorizing the holder to provide in a specified
geographic area using specified frequencies in respect of which the Board of
Directors has determined that the acquisition of such License (and any other
assets being acquired together therewith) is a
45
demonstrably superior alternative to constructing a PCS System in the applicable
area within the PCS Territory, provided that, (i) a majority of the POPs
--------
included in the geographic area covered by such License are within the PCS
Territory, (ii) none of AT&T PCS, any Affiliate thereof or any AT&T Licensee
owns an interest in an FCC License to provide Commercial Mobile Radio Service in
such geographic area, and (iii) the ownership of such License will not conflict
with, or cause AT&T PCS, any Affiliate thereof or any AT&T Licensee to be in
violation or breach of any agreement, instrument, Law or License applicable to
or binding upon such Person or its assets. Notwithstanding the foregoing, the
Company shall not acquire any Permitted Cellular License if the acquisition of
such License would adversely affect the Company's ability to satisfy its
obligations under the first sentence of Section 8.1(b).
8. Operating Arrangements.
----------------------
8.1 Construction of Company Systems.
-------------------------------
(a) The Company hereby agrees to construct, or cause its
Subsidiaries to construct, Company Systems covering the Territory on a schedule
no less rapid than is set forth in the Minimum Build-Out Plan. Company Systems
shall be technologically compatible in all material respects with systems being
used in a Majority of the Southeast Region (including without limitation for the
purpose of facilitating roaming and hand-off between systems), and will to the
extent technologically feasible implement the same User Interface as such
systems, with the intention that the User Interface in Company Systems will not
differ from the User Interface in a Majority of the Southeast Region in a manner
that would be material to customers.
(b) The Company and AT&T PCS hereby agree that the Company shall
assume and be obligated to satisfy the construction requirements set forth in 47
CFR 24.203 with respect to the AT&T PCS Retained Licenses in the Territory and
the AT&T PCS Contributed Licenses. The Company and AT&T PCS agree from time to
time at the request of the Company or AT&T PCS, as applicable, to provide the
other with information concerning the status of construction of its PCS Systems
to enable such party to determine the level of compliance with such construction
requirements with respect to the AT&T PCS Retained Licenses and AT&T PCS
Contributed Licenses, as applicable.
(c) The Company will arrange for all necessary microwave
relocation in connection with the AT&T PCS Contributed Licenses and pay, assume
or (if applicable) reimburse AT&T PCS or its Affiliates for any obligation to
pay, any reasonable costs incurred by it or AT&T PCS in connection with any such
microwave relocation, provided, that nothing contained herein shall require the
--------
Company to pay any costs incurred in connection with microwave relocation in
connection with the AT&T PCS Retained Licenses.
8.2 Service Features. Company Systems will offer the Core Service
----------------
Features. Company Systems will also offer, at the written request of AT&T PCS,
additional service features that AT&T PCS has notified the Company it will
provide in a Majority of the Southeast
46
Region, unless the Board of Directors reasonably determines that the provision
of such additional features would be financially detrimental to the Company.
Unless the Board of Directors makes such a determination, any such additional
features shall be adopted within one hundred twenty (120) days after the request
by AT&T PCS. The Critical Network Elements are set forth on Schedule XI.
8.3 Quality Standards. The Company shall use commercially reasonable
-----------------
efforts to cause the Company Systems to comply with the TDMA Quality Standards.
Without limiting the foregoing, with respect to each material portion of a
Company System (such as a city) that the Company places in commercial service,
on or prior to the first anniversary of the date such material portion is placed
in commercial service, the Company shall cause each such material portion to
achieve a level of compliance with the TDMA Quality Standards equal to at least
the average level of compliance achieved by comparable PCS and Cellular Systems
owned and operated by AT&T PCS taking into account, among other things, the
relative stage of development thereof. In the event that the Company fails to
achieve such level of compliance, the Company shall not be deemed to be in
material breach of this provision if such non-compliance is cured within thirty
(30) days of notice thereof from AT&T PCS to the Company, or, if such breach is
not capable of being cured within such thirty (30) day period using commercially
reasonable efforts, within one hundred eighty (180) days of such notice,
provided the Company is using commercially reasonable efforts to cure such
--------
material breach as soon as reasonably practicable.
8.4 No Change of Business.
---------------------
(a) Subject to Section 7.11, the Company will not, and will not
permit any of its Subsidiaries to, without obtaining the prior written consent
of AT&T PCS, do any of the following: (i) conduct, directly or indirectly, any
business other than the Business, (ii) make any material change to the Minimum
Build-Out Plan in the Territory, or (iii) effect any transaction, agreement or
arrangement which has or could reasonably be expected to have the effect of
materially impairing or materially limiting the ability of (x) subscribers to
Cellular Systems and PCS Systems in which AT&T PCS or its Affiliates have an
ownership interest to utilize the Company Systems for roaming, or (y) AT&T PCS
or its Affiliates to resell wireless service on the Company Systems; it being
understood that clause (i) shall not be deemed to restrict the business of the
Company in any Overlap Territory.
(b) During the period commencing on the date hereof through and
including the first anniversary of the date hereof, without obtaining the prior
written consent of each SBIC Holder, the Company will not, and will not permit
any of its Subsidiaries, to conduct, directly or indirectly, any business other
than the Business.
(c) If at any time during the term of this Agreement AT&T PCS and
its Affiliates determine to discontinue use of TDMA in a Majority of the United
States: (i) the Company will have the right to cease to use TDMA and may adopt
the new technology adopted
47
by AT&T PCS and its Affiliates in a Majority of the United States or implement
any other alternative technology in Company Systems, and, if it exercises such
right, the definition of Company Systems shall be automatically deemed to be
modified by substituting a reference to such new or alternative technology in
lieu of the reference in such definition to TDMA, and (ii) the obligations of
AT&T PCS and its Affiliates pursuant to Section 8.6 shall terminate and be of no
further force or effect, unless within sixty (60) days of notice by AT&T PCS to
the Company specifying that AT&T PCS and its Affiliates have determined to
discontinue use of TDMA in a Majority of the United States, the Company agrees
to implement in Company Systems on a reasonable schedule the new technology
adopted by AT&T PCS and its Affiliates in a Majority of the United States. In
the event AT&T PCS desires to test any technology that is an alternative to TDMA
in any PCS System or Cellular System contiguous to the Territory, AT&T PCS
hereby agrees to notify the Company at least thirty (30) days before conducting
such test and will conduct such tests in a manner that does not have a material
adverse effect on the Company.
8.5 Preferred Provider.
------------------
(a) The Company and its Subsidiaries shall not market, offer,
provide or resell interexchange services, except (i) interexchange services that
constitute Company Communication Services and (ii) interexchange services
procured from AT&T Corp. or an Affiliate thereof designated by AT&T Corp. Such
interexchange services shall be provided by AT&T Corp. or such Affiliate at a
reasonable rate per minute, subject to mutual agreement as to all the terms of
the agreement to provide such services, including, without limitation, the
volume commitment and duration.
(b) With respect to services other than interexchange services,
when the Company or a Subsidiary does not itself develop, or is not permitted to
develop, one or more telecommunications services that are offered or provided in
connection with the conduct of its Business (including, by way of example, local
telephone services or voicemail), but instead procures such services, the
Company shall request in writing that AT&T PCS provide such services (directly
or through an Affiliate designated by it) and , provided, that AT&T PCS (or a
--------
designated Affiliate) offers to provide such telecommunication services to the
Company on reasonably competitive terms, the Company or such Subsidiary shall
procure such services from AT&T PCS (or such Affiliate thereof).
8.6 Exclusivity.
-----------
(a) None of the Stockholders or their respective Affiliates will
provide or resell, or act as the agent for any Person offering, within the
Territory, Company Communications Services except that, AT&T PCS and its
Affiliates may (i) resell, or act as the Company's agent for, Company
Communications Services provided by the Company in accordance with the Resale
Agreement (or any other agreement between AT&T PCS and its Affiliates, on the
one hand, and the Company, on the other hand), including bundling any such
Company Communications Services with other telecommunications services marketed,
offered
48
and provided or resold by such Person, (ii) provide or resell wireless
telecommunications services to or from specific locations (such as buildings or
office complexes), even if the subscriber equipment used in connection with such
service may be capable of routine movement within a limited area (such as a
building or office complex), and even if such subscriber equipment may be
capable of obtaining other telecommunications services beyond such limited area
(which other services may include routine movement beyond such limited area) and
hand-off between the service to such specific locations and such other
telecommunications services; provided, however, that if AT&T PCS or any of its
Affiliates sells such mobile wireless subscriber equipment such equipment shall
be capable of providing (but not necessarily on an exclusive basis) Company
Communications Services and (iii) resell Company Communications Services
provided by a Person other than the Company in any geographical area within the
Territory in which the Company has not placed a Company System into commercial
service on or prior to four and one-half years from the date hereof (it being
understood that in the event that AT&T PCS or any of its Affiliates that is
reselling Company Communication Services of a Person other than the Company in a
geographic area within the Territory at the time the Company places a portion of
a Company System including such geographic area into commercial service, AT&T
PCS or its Affiliates, as applicable, shall terminate such resale arrangement
with respect to such geographic areas within thirty (30) days of the date such
portion of a Company System is placed in commercial service). To the extent the
"other telecommunications services" referred to in clause (ii) of the
immediately preceding sentence constitute Company Communications Services,
neither AT&T PCS nor any of its Affiliates may provide or resell, or act as
agent for any Person offering, such "other telecommunications services" except
in accordance with the terms of clause (i) of the immediately preceding
sentence. Nothing herein shall be construed to limit in any respect any
advertising and promotional and similar activities by AT&T PCS or its Affiliates
or any Cash Equity Investor or any of its Affiliates.
(b) With respect to the markets listed on Schedules 1 and 2 to
the Roaming Agreement, each of AT&T PCS and the Company shall, and shall cause
each of its Affiliates to, in its and such Affiliates' capacity as Home Carrier:
(i) program and direct its authorized dealers to program the subscriber
equipment provided by it or such authorized dealers to its customers, at the
time it is provided to such customers, (to the extent such programming is
technologically feasible) so that the Company or AT&T PCS, as the case may be,
and such Affiliates, in its and such Affiliates' capacity as Serving Carrier, is
the preferred provider of service in the markets listed on such Schedules 1 and
2, and (ii) refrain, and direct its authorized dealers to refrain, from inducing
any of its customers to change or, except at such customer's request in the
event the quality of the Company's services do not meet industry standards,
changing the programming described in clause (i) above. For the purpose of this
Section 8.6(b), the terms "Affiliate," "Home Carrier" and "Serving Carrier"
shall have the meanings ascribed thereto in the Roaming Agreement.
8.7 Other Business; Duties; Etc. Except to the extent expressly set
----------------------------
forth in Section 8.6, AT&T PCS and each Cash Equity Investor and any Person
affiliated with AT&T PCS or a Cash Equity Investor may engage in or possess an
interest in other business ventures,
49
and may engage in any other activities, of every kind and description (whether
or not competitive with the business of the Company or otherwise affecting the
Company), independently or with others and shall owe no duty or liability to the
Company, the other Stockholders or their Affiliates in connection therewith.
None of the Company or the other Stockholders shall have any rights in or to
such independent ventures or the income or profits therefrom by virtue of this
Agreement or any of the Related Agreements. Without limiting the generality of
the foregoing, in the event that AT&T PCS or a Cash Equity Investor or a Person
affiliated with AT&T PCS or a Cash Equity Investor develops inventions which are
patentable or are otherwise trade secrets relevant to the Business, AT&T PCS or
such Cash Equity Investor or affiliated Person shall nevertheless retain
ownership of such invention and may license it to the Company if the Company so
desires and if mutually satisfactory terms are agreed to. The Company shall also
have the right to develop any inventions related to the Business deemed
desirable by it and to retain title to such inventions. To the extent that, at
law or in equity, AT&T PCS or a Cash Equity Investor or any Person affiliated
with AT&T PCS or a Cash Equity Investor would have duties (including fiduciary
duties) and liabilities to the Company, or to the Stockholders, different from
or in addition to those provided in this Section 8.7 and Section 8.6 with
respect to the subject matter of such Sections, all rights of the Company and
the Stockholders arising out of such duties and liabilities are hereby waived
and no such Person shall be liable to the Company or to any Stockholder for its
good faith reliance on the provisions of this Section 8.7.
8.8 Acknowledgments and Termination of Exclusivity.
----------------------------------------------
(a) The Stockholders hereby expressly acknowledge that none of
the Stockholders would have been willing to enter into this Agreement or make
contributions to the capital of the Company, except for each other Stockholder's
and its Affiliates willingness to enter into this Agreement (including without
limitation the provisions set forth in this Section 8) and the Related
Agreements.
(b) Without limiting the foregoing, and without limiting the
remedies that may be available to it at law or in equity, in the event of a
Substantial Company Breach, the obligations of AT&T PCS and its Affiliates under
Section 8.6 shall automatically terminate and be of no further force or effect.
(c) Upon consummation of a Disqualifying Transaction, AT&T PCS
may, by notice to the Company, terminate its and its Affiliates' obligations
under Section 8.6 with respect to any Overlap Territory, provided that the
--------
obligations of AT&T PCS and its Affiliates pursuant to Section 8.6(b)(ii) shall
continue in effect with respect to the then existing customers of the PCS
Systems and Cellular Systems owned and operated by AT&T PCS and its Affiliates
(and their respective successors pursuant to the applicable Disqualifying
Transaction) before giving effect to such Disqualifying Transaction, so long as
such customers remain customers of such systems and such systems continue to be
owned or operated by AT&T PCS or its Affiliates. Notwithstanding the foregoing,
in the event that the Company exercises its right pursuant to Section 6.1 to
convert all of the shares of Company Stock owned by AT&T PCS into
50
Series B Preferred Stock, the reference in this Section 8.8(c) to the "Overlap
Territory" shall be deemed to refer to the Territory.
8.9 Equipment, Discounts and Roaming. AT&T PCS acknowledges and
--------------------------------
agrees that, subject to the terms of Sections 8.1 and 8.5, the Company shall
have the sole discretion to select (a) the equipment vendor(s) for the
infrastructure to be constructed by the Company and (b) billing and other
vendors providing goods and services to the Company. If reasonably requested by
the Company, AT&T PCS agrees to use all commercially reasonable efforts to
assist representatives of the Company in obtaining discounts from any AT&T PCS
vendor with whom the Company is negotiating for the purchase of any such
subscriber or infrastructure equipment or billing services. In addition, AT&T
PCS agrees to use all commercially reasonable efforts to enable the Company to
become a party to the roaming agreements between AT&T PCS and its Affiliates and
operators of other Cellular Systems and PCS Systems or, subject to the Company
agreeing to the obligations thereunder, entitled to the rights and benefits of
AT&T PCS under such roaming agreements. The two immediately preceding sentences
shall not be construed to require AT&T PCS or its Affiliates to take any action
that AT&T PCS or such Affiliate determines in its sole discretion to be adverse
to its interests.
8.10 ANS Agreement. At the request of the Company, AT&T PCS shall
-------------
cause AWS to enter into an Advanced Network Services Agreement with the Company,
substantially in the form of Exhibit C.
8.11 Resale Agreements.
-----------------
(a) From time to time, upon the request of AT&T PCS, the Company
shall enter into a Resale Agreement relating to the Territory, substantially in
the form of Exhibit C to the Securities Purchase Agreement, with AT&T PCS and
any of its Affiliates and, with respect to any geographic area within the
Territory, one other Person designated by AT&T PCS, provided such other Person
--------
is licensed to provide telecommunications services in such geographic area under
the service marks used by AT&T Corp. and such other Person qualifies as a
reseller under any generally applicable standards the Company establishes for
its resellers from time to time and upon the request of AT&T PCS, the Company
shall enter into an agency agreement authorizing AT&T PCS and any of its
Affiliates and, with respect to any geographic area within the Territory, one
other Person designated by AT&T PCS, provided such other Person is licensed to
--------
provide telecommunications services in such geographic area under the service
marks used by AT&T Corp. and such other Person qualifies as an agent under any
generally applicable standards the Company establishes for its agents from time
to time. Any such agency agreements shall provide that the Company shall pay the
agent a commission at the rate then generally offered to the Company's agents
and shall otherwise be on commercially reasonable terms. At no time shall there
be more than one Person (other than AT&T PCS and its Affiliates) designated by
AT&T PCS as a reseller or an agent with respect to any geographic area within
the Territory.
51
(b) It is the intention of the parties that, in light of AT&T
PCS's equity interest in the Company and the other arrangements between AT&T PCS
and its Affiliates and the Company (including the roaming revenues anticipated
to be earned by the Company from subscribers of AT&T PCS and its Affiliates),
the rates, terms and conditions of Service (as defined in the Resale Agreement)
provided by the Company pursuant to the Resale Agreement or any other agreement
between AT&T PCS or such other reseller and the Company shall be at least as
favorable to AT&T PCS or such other reseller, taken as a whole, as the rates,
terms and conditions of Service, taken as a whole, provided by the Company to
any other Customer (as defined in the Resale Agreement) and, to the extent
permitted by applicable law, such rates, terms and conditions shall be superior
to those provided to any other Customer. Without limiting the foregoing, the
rate plans offered by the Company pursuant to any Resale Agreement shall be
designed to result in the average actual rate per minute paid by the Reseller
for Service being at least 25% below the weighted average actual rate per minute
billed by the Company to its subscribers for access and air time, but excluding
revenues for features, taxes, toll or other non-rate items. The Company and
Reseller shall negotiate commercially reasonable reductions to such resale rate
based upon increased volume commitments (including roaming charges incurred by
subscribers of AT&T PCS and its Affiliates).
8.12 Non-Solicitation.
----------------
(a) AT&T PCS hereby covenants and agrees that from and after the
date hereof until six months after the date on which it shall cease to own any
Equity Securities that neither AT&T PCS nor its Affiliates shall solicit for
employment any employee of the Company; provided however that, nothing contained
-------- -------
in this Section 8.12(a) shall prevent AT&T PCS or its Affiliates from engaging
in a general solicitation for employment that is not directed at employees of
the Company.
(b) The Company hereby covenants and agrees that from and after
the date hereof until six months after the date on which AT&T PCS or its
Affiliates shall cease to own any Equity Securities that neither the Company nor
its Affiliates shall solicit for employment any employee of the AT&T PCS or its
Affiliates; provided, however that nothing contained in this Section 8.12(b)
shall prevent the Company or its Affiliates from engaging in a general
solicitation for employment that is not directed at employees of AT&T PCS and
its Affiliates.
8.13 Co-Location. The Company agrees to permit on commercially
-----------
reasonable terms AT&T PCS and its Affiliates to install, operate and maintain
cell site equipment owned or used by AT&T PCS and its Affiliates in their
respective businesses on the towers, buildings and other locations at which the
Company's cell site equipment is installed, operated and maintained. AT&T PCS
and its Affiliates agree to permit on commercially reasonable terms the Company
to install, operate and maintain cell site equipment owned or used by the
Company in its business on the towers, buildings and other locations at which
AT&T PCS and its Affiliates cell site equipment is installed, operated and
maintained.
52
9. After-Acquired Shares; Recapitalization.
---------------------------------------
9.1 After Acquired Shares; Recapitalization.
----------------------------------------
(a) All of the provisions of this Agreement shall apply to all of
the shares of Equity Securities now owned or hereafter issued or transferred to
a Stockholder or to his, her or its Affiliated Successors in consequence of any
additional issuance, purchase, exchange or reclassification of shares of Equity
Securities, corporate reorganization, or any other form of recapitalization, or
consolidation, or merger, or share split, or share dividend, or which are
acquired by a Stockholder or its Affiliated Successors in any other manner.
(b) Whenever the number of outstanding shares of Equity
Securities is changed by reason of a stock dividend or a subdivision or
combination of shares effected by a reclassification of shares, each specified
number of shares referred to in this Agreement shall be adjusted accordingly.
9.2 Amendment of Restated Certificate. Whenever the number of shares
---------------------------------
of authorized Common Stock is not sufficient in order to issue shares of Common
Stock upon conversion of Preferred Stock in accordance with the Restated
Certificate, (i) the Company shall promptly amend the Restated Certificate in
order to authorize a sufficient number of shares of Common Stock, and (ii) each
Stockholder agrees to vote its shares of Preferred Stock and Common Stock in
favor of such amendment.
10. Share Certificates.
------------------
10.1 Restrictive Endorsements; Replacement Certificates. (a) Each
--------------------------------------------------
certificate representing the shares of Equity Securities now or hereafter held
by a Stockholder (including any such certificate delivered upon conversion of
the Preferred Stock) or delivered in substitution or exchange for any of the
foregoing certificates shall be stamped with legends in substantially the
following form:
The shares represented by this Certificate have been acquired for
investment and have not been registered under the Securities Act of 1933,
as amended (the "Act"), or under any state securities or "Blue Sky" laws.
Said securities may not be sold, transferred, assigned, pledged,
hypothecated or otherwise disposed of, unless and until registered under
the Act and the rules and regulations thereunder and all applicable state
securities or "Blue Sky" laws or exempted therefrom under the Act and all
applicable state securities or "Blue Sky" laws.
The shares represented by this Certificate are also subject to a
Stockholders' Agreement dated as of February __, 1998, a copy of which is
on file at the offices of the Company and will be furnished by the Company
to the holder hereof upon
53
written request. Such Stockholders' Agreement provides, among other things,
for the granting of certain restrictions on the sale, transfer, pledge
hypothecation or other disposition of the shares represented by this
Certificate, and that under certain circumstances, the holder hereof may be
required to sell the shares represented by this Certificate. By acceptance
of this Certificate, each holder hereof agrees to be bound by the
provisions of such Stockholders' Agreement. The Company reserves the rights
to refuse to transfer the shares represented by this Certificate unless and
until the conditions to transfer set forth in such Stockholders' Agreement
have been fulfilled.
Each Stockholder agrees that he, she or it will deliver all certificates
for shares of Equity Securities owned by him, her or it to the Company for the
purpose of affixing such legends thereto.
(b) Upon receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of any certificate
representing shares of Equity Securities subject to this Agreement and of a bond
or other indemnity reasonably satisfactory to the Company, and upon
reimbursement to the Company of all reasonable expenses incident thereto, and
upon surrender of such certificate, if mutilated, the Company will make and
deliver a new certificate of like tenor in lieu of such lost, stolen, destroyed
or mutilated certificate.
11. Equitable Relief. The parties hereto agree and declare that legal
----------------
remedies may be inadequate to enforce the provisions of this Agreement and that,
in addition to being entitled to exercise all of the rights provided herein or
in the Restated Certificate or granted by law, including recovery of damages,
equitable relief, including specific performance and injunctive relief, may be
used to enforce the provisions of this Agreement.
12. Miscellaneous.
-------------
12. Notices. All notices or other communications hereunder shall be
-------
in writing and shall be given (and shall be deemed to have been duly given upon
receipt) by delivery in person, by facsimile transmission, or by registered or
certified mail (return receipt requested), postage prepaid, with an
acknowledgment of receipt signed by the addressee or an authorized
representative thereof, addressed as follows (or to such other address for a
party as shall be specified by like notice; provided that notice of a change of
address shall be effective only upon receipt thereof:
If to AT&T PCS:
c/o AT&T Wireless Services, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx
54
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to:
AT&T Corp.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx Xxxxx, XX 00000
Attention: Corporate Secretary
Telephone:
Facsimile: (908)
and
Xxxxxxxx Xxxxxx & Xxxxxx LLP
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
and
Xxxxx Xxxx Xxxxx Constant & Xxxxxxxx
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to a Cash Equity Investor, to its address set forth on Schedule I.
With a copy to:
Xxxxx, Xxxxx & Xxxxx
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
55
If to a Management Stockholder:
x/x Xxxxxx Xxxxxxxxxxxxxx, X.X.X.
000 Xxxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to:
Kleinbard Xxxx & Xxxxxxx LLP
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Company, to it:
x/x Xxxxxx Xxxxxxxxxxxxxx, X.X.X.
000 Xxxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
With a copy to each other party sent to the addresses set forth in
this Section 12.1.
12.2 Entire Agreement; Amendment; Consents.
-------------------------------------
(a) This Agreement, together with the Closing Agreement, dated
as of the date hereof, among the Company, the Cash Equity Investors, Xxxxxxx X.
Xxxxxxxx, and Xxxxxx X. Xxxxxxx constitutes the entire agreement among the
parties with respect to the subject matter hereof and supersedes all other prior
agreements and understandings, both written and oral, among the parties or any
of them with respect to the subject matter hereof.
(b) No change or modification of this Agreement shall be
valid, binding or enforceable unless the same shall be in writing and signed by
the Company and the holders of a majority of the shares of each class of capital
stock, including AT&T PCS, 66 2/3% of the Common Stock Beneficially Owned by the
Cash Equity Investors, and 60.1% of the
56
Common Stock Beneficially Owned by the Management Stockholders; provided,
--------
however, that in the event any party hereto shall cease to own any shares of
-------
Equity Securities such party hereto shall cease to be a party to this Agreement
and the rights and obligations of such party hereunder shall terminate, except
to the extent otherwise provided in Section 4.7(a) with respect to any Unfunded
Commitment.
(c) Whenever in this Agreement the consent or approval of a
Stockholder is required, except as expressly provided herein, such consent or
approval may be given or withheld in the sole and absolute discretion of each
Stockholder.
12.3 Term.
----
(a) Subject to Sections 12.3(b), 12.3(c) and 12.4, this
Agreement shall terminate upon the earliest to occur of any of the following
events:
(i) The consent in writing of all of the parties
hereto; or
(ii) The expiration of eleven (11) years from the date
of execution and delivery of this Agreement; or
(iii) One Stockholder shall Beneficially Own all of the
Common Stock.
(b) Notwithstanding anything contained herein to the contrary,
(i) the provisions of Sections 3.1(a)(ii), (b), (c) and (d), 3.2, 3.3, 3.4, 3.5,
3.6, 4.1(a), 4.5 (other than Section 4.5(b)), 7.1, 7.2 and 7.6 shall terminate
on the earlier to occur of a termination pursuant to Section 12.3(a) and the IPO
Date, (ii) the provisions of Sections 3 and 4 shall terminate on the earlier to
occur of a termination pursuant to Section 12.3(a) and the expiration of ten
(10) years from the date hereof, and (iii) the provisions of Sections 3.1(a)
(relating to AT&T PCS' right to approve the directors selected by the Cash
Equity Investors pursuant to Section 3.1(a)(ii) and any replacement for Messrs.
Kalogris or Xxxxxxx to the Board of Directors), 4.7(b), 7.4, 7.6 and 8.4(a),
shall terminate, and neither the Company nor any Stockholder shall be required
to obtain AT&T PCS's prior written consent as required under such Sections, on
the earlier to occur of (i) a termination pursuant to Section 12.3(a) and (ii)
(x) with respect to the period prior to the eighth anniversary of the date
hereof, the date on which AT&T PCS shall cease to Beneficially Own more than
two-thirds of the number of shares of Series A Preferred Stock that AT&T PCS
Beneficially Owns on the date hereof and (y) with respect to the period after
the eighth anniversary of the date hereof on which AT&T PCS shall cease to
Beneficially Own more than two-thirds of the number of shares of Common Stock
that AT&T PCS Beneficially Owns on such eighth anniversary date.
(c) Notwithstanding anything contained herein to the contrary,
in the event the Cash Equity Investors shall Beneficially Own less than (i) one-
half but more than one-
57
quarter of the number of shares of Common Stock Beneficially Owned by the Cash
Equity Investors on the date hereof, the number of directors the Cash Equity
Investors shall be permitted to designate under Section 3.1(a)(i) shall be
reduced to one, and (ii) one-quarter of the number of shares of Common Stock
Beneficially Owned by the Cash Equity Investors on the date hereof, the
provisions of Section 3.1(a) shall terminate. In the event the number of
directors the Cash Equity Investors are entitled to designate is reduced
pursuant to Section 12.3(c)(i), one of the directors designated by the Cash
Equity Investors under Section 3.1(a)(i) shall resign (or the other directors or
Stockholders shall remove them from the Board of Directors) and the remaining
directors shall take such action so that the number of directors constituting
the entire Board of Directors shall be reduced accordingly. In the event the
provisions of Section 3.1(a) are terminated pursuant to Section 12.3(c)(ii), the
directors designated by the Cash Equity Investors pursuant to Section 3.1(a)(i)
shall resign (or the other directors or Stockholders shall remove them from the
Board of Directors) and the remaining directors shall take such action so that
the number of directors constituting the entire Board of Directors is reduced by
two (2) individuals. Messrs. Xxxxxxx and Kalogris (in each case so long as he is
an officer of the Company) shall thereafter have the right to designate two (2)
individuals to the Board of Directors provided such individual is acceptable to
AT&T PCS (so long as AT&T PCS continues to Beneficially Own more than two-thirds
of the Common Stock Beneficially Owned by AT&T PCS on the date hereof). For all
purposes of this Agreement (other than Section 3.1(a)), all references in this
Agreement to directors designated pursuant to Section 3.1(a)(ii) shall
thereafter be deemed to refer to the two directors designated pursuant to the
immediately preceding sentence.
12.4 Survival. Nothing contained in Section 12.3 shall impair any
--------
rights or obligations of any party hereto arising prior to the time of the
termination of this Agreement, or which may arise by an event causing the
termination of this Agreement. The provisions of Section 5 shall survive any
termination of this Agreement pursuant to Section 12.3 and shall continue in
full force and effect until the twentieth anniversary of the date hereof. The
provisions of Section 7.7 and Article 12 shall survive the termination of this
Agreement.
12.5 Waiver. No failure or delay on the part of any Stockholder in
------
exercising any right, power or privilege hereunder, nor any course of dealing
between the Company and any Stockholder shall operate as a waiver thereof nor
shall any single or partial exercise of any right, power or privilege hereunder
preclude the simultaneous or later exercise of any other right, power or
privilege. The rights and remedies herein expressly provided are cumulative and
not exclusive of any rights and remedies which any Stockholder would otherwise
have. No notice to or demand on the Company in any case shall entitle the
Company to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Stockholders or any of
them to take any other or further action in any circumstances without notice or
demand.
12.6 Obligations Several. The obligations of each Stockholder under
-------------------
this Agreement shall be several with respect to each such Stockholder.
58
12.7 Governing Law. This Agreement shall be governed and construed
-------------
in accordance with the law of the State of Delaware.
12.8 Dispute Resolution.
------------------
(a) The parties shall use and strictly adhere to the following
dispute resolution processes, except as otherwise expressly provided in this
Section 12.8, to resolve any and all disputes, controversies or claims, whether
based on contract, tort, statute, fraud, misrepresentation or any other legal or
equitable theory (hereinafter, "Dispute(s)"), arising out of or relating to this
Agreement (and any prior agreement this Agreement supersedes), including without
limitation, its making, termination, non-renewal, its alleged breach and the
subject matter of this Agreement (e.g., products or services furnished hereunder
or those related to those furnished):
(b) The parties shall first attempt to settle each Dispute
through good faith negotiations. The aggrieved party shall initiate such
negotiations by giving the other party(ies) written notice of the existence and
nature of the Dispute. The other party(ies) shall in a writing to the aggrieved
party acknowledge such notice of Dispute within ten (10) business days. Such
acknowledgment may also set forth any Dispute that the acknowledging party
desires to have resolved in accordance with this Section.
(c) Thereafter, if any Dispute is not resolved by the parties
through negotiation within thirty (30) calendar days of the date of the notice
of acknowledgment, either party may terminate informal negotiations with respect
to that Dispute and request that the Dispute be submitted to non-binding
mediation. Any mediation of a Dispute under this Section shall be conducted by
the CPR Institute for Dispute Resolution ("CPR") in accordance with the then
current CPR "Model Mediation Procedure for Business Disputes" ("Model
Procedures") and the procedures specified in this Section to the extent that
they conflict with, modify or add to such Model Procedures. Any demand for
initiation of mediation of a Dispute must be given in writing to both the other
party(ies) involved and to the CPR and must set forth the nature of the Dispute.
Each party to the mediation shall bear its own expenses with respect to
mediation and the parties shall share equally the fees and expenses of the CPR
and the mediator. The failure by a party to timely pay its share of the
mediation fees and expenses of the CPR and the mediator shall be a bar to
arbitration under Section 12.8(d) of that party's Dispute(s). Any mediation
under this Section shall be conducted within the State of New York at a site
selected by the mediator that is reasonably convenient to the parties. Each
party shall be represented in the mediation by representatives having final
settlement authority with respect to the Dispute(s). All information and
documents disclosed in mediation by any party shall remain private and
confidential to the disclosing party and may not be disclosed by any party
outside the mediation. No privilege or right with respect to any information or
document disclosed in mediation shall be waived or lost by such disclosure.
59
(d) Any Dispute not finally resolved after negotiation and
mediation in accordance with Section 12.8(b) and 12.8(c) shall, upon the written
demand of any involved party delivered to the other party(ies) and the CPR, be
finally resolved through binding arbitration in accordance with the then current
CPR "Non-Administered Arbitration Rules" ("Arbitration Rules") and the
procedures specified in this Section to the extent that they conflict with,
modify or add to such Arbitration Rules. Any Dispute of any other party not
finally resolved after negotiation and mediation pursuant to this Section may be
made a part of the arbitration demanded by another party, provided that the
written notice of demand for arbitration of that Dispute is received by the CPR
before selection of an arbitrator by the CPR. Any demand for arbitration of a
Dispute received by the CPR after the selection of the arbitrator must be
resolved through a separate arbitration proceeding in accordance with this
Section. Each party shall bear its own expenses with respect to arbitration and
the parties shall share equally the fees and expenses of the CPR and the
arbitrator. Unless otherwise mutually agreed by the parties in writing, the
arbitration shall be conducted by one (1) neutral arbitrator. The arbitration
shall be conducted in the State of New York at a site selected by the arbitrator
that is reasonably convenient to the parties. The arbitrator shall be bound by
and strictly enforce the terms of the Agreement and may not limit, expand, or
otherwise modify the terms of this Agreement. The arbitrator shall make a good
faith effort to apply applicable law, but an arbitration decision and award
shall not be subject to review because of errors of law. The arbitrator shall
have the sole authority to resolve issues of the arbitrability of any Dispute,
including the applicability or running of any statute of limitation. The
arbitrator shall not have power to award damages in connection with any Dispute
in excess of actual compensatory damages or to award punitive damages and each
party irrevocably waives any claim thereto. The arbitrator shall not have the
power to order pre-hearing discovery of documents or the taking of depositions.
The arbitrator may compel, to the extent provided by the FAA, attendance of
witnesses and the production of documents at the hearing. The arbitrator's
decision and award shall be made and delivered to the parties within six (6)
months of selection of the arbitrator by the CPR and judgment on the award by
the arbitrator may be entered by any court having jurisdiction thereof.
(e) This Section shall be interpreted, governed by and
enforced in accordance with the United States Arbitration Act, 9 U.S.C. Sections
1-14 (the "Federal Arbitration Act" or "FAA"). The laws of the State of New
York, except those pertaining to choice of law, arbitration of disputes and
those pertaining to the time limits for bringing an action that conflict with
the terms of this Dispute Resolution provision, shall govern all other
substantive matters pertaining to the interpretation and enforcement of the
other terms of this Agreement with respect to any Dispute. Any party to a
Dispute, which is the subject of a notice initiating the Dispute resolution
procedures under this Section, may seek a temporary injunction in any state or
federal court of competent jurisdiction to the limited extent necessary to
preserve the status quo during the pendency of final resolution of a Dispute in
accordance with this Section. If court proceedings to stay litigation of a
Dispute or compel arbitration of a Dispute are necessary, the party who
unsuccessfully opposes such proceedings shall pay all associated costs,
expenses, and attorneys' fees that the other party reasonably incurs in
connection with such court proceedings. An order to pay such costs, expenses and
attorney fees shall become part of any
60
decision and award of the arbitrator of the Dispute. An arbitrator appointed
pursuant to Section 12.8(d) to resolve a Dispute may also issue such injunctive
orders and shall have the power to modify or dissolve the injunctive order of
any court to the extent it pertains to the Dispute which the arbitrator has been
selected to finally resolve. The parties, their representatives, other
participants, and the mediator and arbitrator shall hold the existence, content,
and result of the mediation and arbitration of a Dispute in confidence except to
the limited extent necessary to enforce a final settlement agreement or to
obtain and secure enforcement of or a judgment on an arbitration decision and
award.
(f) The statute(s) of limitation applicable to any Dispute
shall be tolled upon initiation of the Dispute resolution procedures under this
Section and shall remain tolled until the Dispute is resolved by mediation or
arbitration under this Section. Tolling shall cease if the aggrieved party with
a Dispute does not initiate mediation within sixty (60) calendar days after good
faith negotiations are terminated by any party and, after mediation of a
Dispute, if the aggrieved party with a Dispute does not initiate a demand for
arbitration within sixty (60) calendar days after mediation is terminated.
However, any Dispute is forever barred that has not expressly been made the
subject of the written notice required under Section 12.8(b) above within 365
days after the date the Party asserting the Dispute first knows or should have
known of the existence of the acts or omissions that give rise to such Dispute.
(g) Unless the parties mutually agree in writing, Disputes
relating to trademarks (including service marks), patents and copyrights shall
not be resolved in accordance with the Dispute resolution procedures set forth
in this Section and shall be resolved as otherwise provided in this Agreement.
(h) The Company and each of the Stockholders hereby
irrevocably consents to the exclusive jurisdiction of the state or federal
courts in the State of New York, and all state or federal courts competent to
hear appeals therefrom, over any actions which may be commenced against any of
them under or in connection with this Agreement. The Company and each
Stockholder hereby irrevocably waive, to the fullest extent permitted by
applicable law, any objection which any of them may now or hereafter have to the
laying of venue of any such dispute brought in such court or any defense of
inconvenient forum for the maintenance of such dispute in the Xxxxxxxx Xxxxxxxx
xx Xxx Xxxx xxx Xxx Xxxx Xxxxxx. The Company and each Stockholder hereby agree
that a judgment in any such dispute may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. The Company and
each Stockholder hereby consent to process being served by any party to this
Agreement in any actions by the transmittal of a copy thereof in accordance with
the provisions of Section 12.1.
12.9 Benefit and Binding Effect; Severability. This Agreement shall
----------------------------------------
be binding upon and shall inure to the benefit of the Company, its successors
and assigns, and each of the Stockholders and their respective executors,
administrators and personal representatives and heirs and permitted assigns. If
any term or other provision of this Agreement is invalid, illegal or incapable
of being enforced by any law or public policy or any listing requirement
applicable to
61
the Common Stock, all other terms and provisions of this Agreement shall
nevertheless remain in full force and effect. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
parties hereto affected by such determination in any material respect 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 in order
that the provisions hereof are given effect as originally contemplated to the
greatest extent possible.
12.10 Amendment of By-Laws. The Stockholders agree that the terms of
--------------------
this Agreement shall supersede any inconsistent provision that is contained in
the Restated By-Laws and, to the extent required by Delaware law or the Restated
By-Laws, this Agreement shall be deemed to constitute a written action taken by
the Stockholders of the Company and shall be deemed an amendment of the Restated
By-Laws.
12.11 Authorized Agent of AT&T PCS. AT&T PCS hereby authorizes
----------------------------
Wireless PCS, Inc. as its agent, with full power to execute, in the name of and
on behalf of AT&T PCS, the Related Agreements to which AT&T PCS is a party and
any and all other documents that AT&T PCS is required to execute and deliver,
and to give and receive all notices, requests, consents, amendments, demands and
other communications to or from AT&T PCS, hereunder or thereunder. Each party
hereto (other than AT&T PCS) shall be entitled to rely on the full power and
authority of Wireless PCS, Inc. to act on behalf of AT&T PCS in accordance with
this Section 12.11. Nothing contained in this Section 12.11 shall relieve AT&T
PCS from complying with its obligations under this Agreement or any of the
Related Agreements to which it is a party.
12.12 FCC Approval. Notwithstanding anything contained in this
------------
Agreement to the contrary, no transaction or action contemplated herein shall be
consummated and no interests or rights transferred, converted or exchanged prior
to receiving FCC approval with respect thereto to the extent such approval is
necessary.
12.13 Expenses. The Company shall pay the reasonable fees and
--------
expenses of counsel to the Stockholders incurred in connection with the
preparation, negotiation and execution of this Agreement and of any amendment or
modification hereof. Except as provided in Sections 5(g) and 12.14, all other
attorneys' fees incurred by the Stockholders in connection with this Agreement
(including, without limitation, in the preparation of notices (and responses
thereto) and consents) shall be borne by the Stockholder(s) incurring such fees.
12.14 Attorneys' Fees. In any action or proceeding brought to enforce
---------------
any provision of this Agreement, or where any provision hereof is validly
asserted as a defense, the successful party shall be entitled to recover
reasonable attorneys' fees in addition to any other available remedy.
62
12.15 Headings. The captions in this Agreement are for convenience
--------
only and shall not be considered a part of or affect the construction or
interpretation of any provision of this Agreement.
12.16 Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
63
IN WITNESS WHEREOF, each of the parties has executed or consent this
Agreement to be executed by its duly authorized officers as of the date first
written above.
AT&T WIRELESS PCS INC.
By: _____________________________________
Name:
Title:
TRITON PCS HOLDINGS, INC.
By: ____________________________________
Name:
Title:
CASH EQUITY INVESTORS: CB CAPITAL INVESTORS, L.P.
By: CB Capital Investors, Inc., its general
partner
By: ______________________________________
Name:
Title:
X.X. XXXXXX INVESTMENT CORPORATION
By: ______________________________________
Name:
Title:
SIXTY WALL STREET SBIC FUND, L.P.
By: Sixty Wall Street SBIC Corporation, its
general partner
By: ______________________________________
64
PRIVATE EQUITY INVESTORS III, L.P.
By: Xxxxx X. Xxxxx Associates, III, L.L.C.,
its general partner
By: __________________________________________
Name:
Title:
EQUITY-LINKED INVESTORS-II
By Xxxxx X. Xxxxx Associates-II, its general
partner
By: _________________________________________
Name:
Title:
TORONTO DOMINION CAPITAL (USA) INC.
By: __________________________________________
Name: Xxxxxx Xxxxxxx
Title: Vice President
FIRST UNION CAPITAL PARTNERS, INC.
By: __________________________________________
Name:
Title:
DAG-TRITON PCS, L.P.
By: Duff Xxxxxxxx Xxxxxxxx, L.L.C., its general
partner
By: __________________________________________
Name:
Title:
65
MANAGEMENT STOCKHOLDERS: XXXXXXX X. XXXXXXXX
____________________________________________
XXXXXX X. XXXXXXX
____________________________________________
XXXXX X. XXXXX
____________________________________________
XXXXX XXXXX
____________________________________________
XXXXXXXX XXXXXXXXX
____________________________________________
XXXXX XXXXXXX
____________________________________________
XXXXXXX XXXXX
____________________________________________
XXXXXXX X. XXXXXXXX, as trustee under the Common
Stock Trust Agreement For Management Employees
Dated February 4, 1998
By: ________________________________________
Name: Xxxxxxx X. Xxxxxxxx
Title: Trustee
Schedule I
Cash Equity Investors:
---------------------
CB Capital Investors, L.P. Toronto Dominion Capital (USA) Inc.
000 Xxxxxxx Xxxxxx, 00xx Floor 00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000 Xxx Xxxx, XX 00000
Attn: Xxxxx Xxxxxxx Attn: Xxxxx Xxxx
X.X. Xxxxxx Investment Corporation Toronto Dominion Capital (USA) Inc.
000 Xxxxxxxxxx Xxxxxx, 38th Floor 000 Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000 Xxxxxxx, XX 00000
Attn: Xxxx Xxxxxxx Attn: Xxxxxx Xxxxxxx
Sixty Wall Street SBIC Fund, L.P. First Union Capital Partners, Inc.
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx Xxx Xxxxx Xxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000 000 Xxxxx Xxxxxxx Xxxxxx, 0xx Xxxxx
Attn: Xxxx Xxxxxxx Xxxxxxxxx, XX 00000-0000
Attn: Xxxxx Xxxxxxx
Private Equity Investors III, L.P. Dag-Triton PCS, L.P.
000 Xxxxxxx Xxxxxx, 00xx Floor Xxx Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000 Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxx Xxxx Attn: Xxxx Xxxx
Equity-Linked Investors-II
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxx Xxxx
Schedule II
Management Stockholders
-----------------------
Xxxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxx
Xxxxx X. Xxxxx
Xxxxx Xxxxx
Xxxxxxxx Xxxxxxxxx
Xxxxx Xxxxxxx
Xxxxxxx Xxxxx
Xxxxxxx X. Xxxxxxxx, as trustee under the
Common Stock Trust Agreement For
Management Employees Dated February 4, 1998
Schedule III
Superceded
Stockholders
------------
Number of
Series A Preferred Stock Shares
------------------------ ---------
AT&T Wireless PCS Inc. 732,371
=========
Series C Preferred Stock
------------------------
CB Capital Investors, L.P. 404,714
X.X. Xxxxxx Investment Corporation 383,679
Sixty Wall Street SBIC Fund, L.P. 21,036
Private Equity Investors III, L.P. 194,357
Equity-Linked Investors - II 194,357
Toronto Dominion Capital (USA) Inc. 97,179
First Union Capital Partners, Inc. 48,589
DAG-Triton PCS, L.P. 48,589
Xxxxxxx X. Xxxxxxxx 5,000
Xxxxxx X. Xxxxxxx 2,500
---------
1,400,000
=========
Series D Preferred Stock
------------------------
AT&T Wireless PCS, Inc. 366,131
=========
Common Stock
------------
Xxxxxxx X. Xxxxxxxx 78,494.80
Xxxxxx X. Xxxxxxx 58,871.10
Xxxxx X. Xxxxx 5,887.11
Xxxxx Xxxxx 3,139.79
Xxxxxxxx Xxxxxxxxx 2,943.56
Xxxxx Xxxxxxx 2,943.56
Xxxxxxx Xxxxx 1,962.37
Xxxxxxx X. Xxxxxxxx, as trustee under the
Common Stock Trust Agreement For
Management Employees Dated February 4, 1998 41,994.71
---------
196,237.00
==========
SCHEDULE IV
I. From Washington MTA BTA Market Designator
Charlottesville, VA B075
Cumberland, MD B100
Xxxxxxxxxxxxxx, XX X000
Xxxxxxxxxxxx, XX X000
Xxxxxxxxxx, XX-Xxxxxxxxxxxx,
XX,-Xxxxxxxxxxx, WV
Winchester, VA B179
B479
II. From Richmond MTA
Danville, VA B104
Lynchburg, VA B266
Xxxxxxxxxxxx, XX X000
Xxxxxxxx, XX B374
Xxxxxxx.XX B376
Staunton-Waynesboro, VA B430
III. From Knoxville MTA
Kingsport, Johnson City, TN-Bristol VA
B229
