EXHIBIT 10.28
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STOCKHOLDERS AGREEMENT
among
IPCS, INC.
AND CERTAIN
OF ITS
STOCKHOLDERS
Dated as of July 12, 2000
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TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS................................................... 4
1.1 Defined Terms................................................. 4
1.2 Other Definitional Provisions; Interpretation................. 5
SECTION 2. TRANSFERS AND ISSUANCES....................................... 5
2.1 Limitations on Transfer....................................... 5
2.2 Permitted Transfers........................................... 6
2.3 Effect of Void Transfers...................................... 7
2.4 Legend on Securities.......................................... 7
2.5 Tag-Along Rights.............................................. 8
2.6 Drag-Along Rights............................................. 9
SECTION 3. BOARD OF DIRECTORS............................................ 11
3.1 Board of Directors............................................ 11
SECTION 4. PREEMPTION RIGHTS............................................. 12
4.1 Preemptive Rights............................................. 12
SECTION 5. BLACKSTONE RIGHT.............................................. 13
5.1 Redemption Request............................................ 13
5.2 Sale of the Company........................................... 15
SECTION 6. BLACKSTONE INITIAL PUBLIC OFFERING............................ 15
6.1 Initial Public Offering....................................... 15
SECTION 7. BLACKSTONE INFORMATION RIGHTS................................. 15
7.1 Information Rights............................................ 15
SECTION 8. BLACKSTONE BUSINESS COMBINATION RIGHTS........................ 16
8.1 Approval Rights............................................... 16
8.2 Public Company Change of Control.............................. 18
8.3 Private Company Change of Control............................. 20
SECTION 9. REPRESENTATIONS AND WARRANTIES................................ 21
9.1 Representations of Each of the Parties........................ 21
SECTION 10. MISCELLANEOUS................................................. 23
10.1 Additional Securities Subject to Agreement.................... 23
10.2 Registration and Listing...................................... 23
10.3 Restrictions on Blackstone Investments........................ 23
10.4 Restrictions on Company Investments........................... 24
10.5 Geneseo and Cambridge Approval................................ 24
10.6 Injunctive Relief............................................. 24
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10.7 Other Stockholders' Agreements................................. 24
10.8 Amendments..................................................... 24
10.9 Successors, Assigns and Transferees............................ 24
10.10 Notices........................................................ 25
10.11 Integration.................................................... 26
10.12 Consent of Blackstone.......................................... 26
10.13 Severability................................................... 26
10.14 Counterparts................................................... 26
10.15 Governing Law.................................................. 27
10.16 Jurisdiction................................................... 27
10.17 Mutual Waiver of Jury Trial.................................... 27
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STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT (this "Agreement"), dated as of July 12, 2000,
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by and among Blackstone/iPCS L.L.C., a Delaware limited liability company,
Blackstone iPCS Capital Partners L.P., a Delaware limited partnership, and
Blackstone Communications Partners I L.P., a Delaware limited partnership
(collectively with any of their Affiliates which may purchase Series A-2
Convertible Participating Preferred Stock of the Company pursuant to the
Investment Agreement (as defined below), "Blackstone"), TCW/Crescent Mezzanine
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Partners II, L.P., TCW/Crescent Mezzanine Trust II, TCW Leveraged Income Trust,
L.P., TCW Leveraged Income Trust II, L.P., TCW Leveraged Income Trust IV, L.P.,
TCW Shared Opportunity Fund II, L.P., Shared Opportunity Fund IIB, L.L.C. and
TCW Shared Opportunity Fund III, L.P. (collectively with any of their Affiliates
which may purchase Series A-2 Convertible Participating Preferred Stock of the
Company pursuant to the Investment Agreement, "TCW" and, together with
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Blackstone, the "Purchasers"), Geneseo Communications, Inc., an Illinois
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corporation ("Geneseo"), Cambridge Telcom, Inc., an Illinois corporation
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("Cambridge") (Blackstone, TCW, Geneseo and Cambridge, collectively, the
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"Stockholders"), and iPCS, Inc., a Delaware corporation (the "Company").
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W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Company and the Purchasers are parties to an Investment
Agreement, dated as of July 12, 2000, pursuant to which the Purchasers are
purchasing newly issued shares of Series A-1 Convertible Participating Preferred
Stock of the Company and have agreed, subject to certain conditions, to purchase
newly issued shares of Series A-2 Convertible Participating Preferred Stock of
the Company, in each case convertible into shares of Common Stock (as defined
below);
WHEREAS, as a condition to such purchases, the parties hereto desire
to make certain arrangements among themselves with respect to matters set forth
herein; and
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, the parties hereto agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following
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capitalized terms shall have the meanings ascribed to them below:
"Affiliate" means, with respect to any Person, any other Person which
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directly or indirectly controls or is controlled by or is under common control
with such Person. As used in this definition, "control" (including its
correlative meanings, "controlled by" and "under common control with") shall
mean possession, directly or indirectly, of power to direct or cause the
direction
of management or policies (whether through ownership of securities or
partnership or other ownership interests, by contract or otherwise) of such
Person.
"Beneficial owner" or "beneficially own" has the meaning given such
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term in Rule 13d-3 under the Exchange Act and a Person's beneficial ownership of
either Common Stock or Preferred Stock or other voting securities of the Company
shall be calculated in accordance with the provisions of such Rule; provided,
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however, that for purposes of determining beneficial ownership, a Person shall
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be deemed to be the beneficial owner of any security which such Person has the
right to acquire, without the occurrence of any contingency other than the
payment of any conversion or exercise price within sixty (60) days of the date
of calculation, upon the conversion, exchange or exercise of any warrants,
options, rights or other securities, including the Preferred Stock.
"Business Combination Transaction" shall mean any merger,
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consolidation, reorganization, recapitalization, spin-off, liquidation, joint
venture, partnership, tender or exchange offer or asset or stock purchase, sale
or exchange or any similar transaction or any series or combination of related
transactions pursuant to any agreement between the Company or any of its
Subsidiaries, on the one hand, and any other Person, on the other.
"Business Day" shall mean any day except a Saturday, a Sunday, or
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other day on which commercial banks in the State of New York or Illinois are
authorized or required by law or executive order to close.
"Common Stock" means the common stock, par value $0.01 per share, of
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the Company and any securities issued in respect thereof, or in substitution
therefor, in connection with any stock split, dividend, spin-off or combination,
or any reclassification, recapitalization, merger, consolidation, exchange or
other similar reorganization or business combination.
"Common Stock Equivalents" means any stock (including the Preferred
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Stock), warrants, rights, calls, options, debt or other securities exchangeable
or exercisable for or convertible into Common Stock. Any reference herein to
the number of Common Stock Equivalents shall be deemed to refer to the number of
shares of Common Stock into which such Common Stock Equivalents are exchangeable
or exercisable or convertible into.
"Company Sale" shall mean a sale of all or substantially all of the
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assets or all or substantially all of the capital stock of the Company,
including by way of merger or consolidation, in a single transaction or series
of related transactions.
"Excluded Issuances" means (i) issuances of Securities with respect to
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acquisitions by the Company or any of its Subsidiaries of assets or interests in
a business or entity in arm's length bona fide transactions with an unaffiliated
third party, (ii) issuances of Securities (including stock options and similar
securities or rights) to current or former employees, directors or consultants
of the Company or any of its Subsidiaries as approved by the Board of Directors
of the Company (the
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"Company Board") or pursuant to plans or arrangements approved by the Company
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Board and (iii) issuances of Common Stock in a Public Offering.
"Governmental Entity" means any court, department, body, board,
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bureau, administrative agency or commission or other governmental authority or
instrumentality.
"Investment Agreement" means the Investment Agreement dated as of July
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12, 2000 among the Purchasers and the Company, as amended from time to time.
"Minimum Public Offering" means the first underwritten Public Offering
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in which (i) the Company receives aggregate gross proceeds (before deduction of
underwriting discounts and expenses of sale) of at least $30,000,000 and (ii)
the Common Stock has been accepted for listing on The New York Stock Exchange,
Inc. or admitted for quotation to the Nasdaq National Market, or such other
securities exchange or market as Blackstone may approve, subject to official
notice of issuance.
"Person" or "person" means an individual, corporation, limited
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liability company, association, partnership, group (as defined in Section
13(d)(3) of the Exchange Act), trust, joint venture, business trust or
unincorporated organization, or a government or any agency or political
subdivision thereof or other entity of any nature whatsoever.
"POPs" means, with respect to any Basic Trading Area for which a Basic
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Trading Area license is issued by the Federal Communications Commission or other
geographical area, the most recent projection of the population of such
geographical area as published in a demographic data source based upon the most
recent U.S. census bureau data.
"Preferred Stock" means the Series A-1 Convertible Participating
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Preferred Stock of the Company and the Series A-2 Convertible Participating
Preferred Stock of the Company.
"Private Company" shall mean any Person other than a Public Company.
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"Private Company Business Combination Transaction" means any Business
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Combination Transaction between the Company or any of its Subsidiaries and a
Private Company or any of its Subsidiaries.
"Public Company" shall mean a Person whose common stock or equivalent
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thereof is listed on The New York Stock Exchange, Inc. or quoted on the Nasdaq
National Market and of which (i) the aggregate market value of such common stock
or equivalent thereof exceeds $200,000,000, (ii) the aggregate market value of
such common stock or equivalent thereof held by Persons who are not Affiliates
or any officer, director, employee or stockholder holding of record or
beneficially more than 5% of any class of voting securities of such Person or
any Subsidiary of such Person or any individual related by blood, marriage or
adoption to such individual or any entity in which such Person or individual
owns a greater than 5% beneficial interest (collectively, "Related Parties") of
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such Person exceeds $50 million and (iii) it is reasonably anticipated that such
common
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stock or equivalent thereof will continue to be listed on The New York Stock
Exchange, Inc. or quoted on the Nasdaq National Market upon the consummation of
the applicable transaction, in each case on the date the applicable transaction
agreement with such Public Company is entered into by the Company or any of its
Subsidiaries.
"Public Company Business Combination Transaction" means any Business
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Combination Transaction between the Company or any of its Subsidiaries and a
Public Company or any of its Subsidiaries.
"Public Offering" means the closing of a public offering of shares of
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Common Stock by the Company (other than shares of Common Stock issuable upon
exercise of the Excluded Warrants (as defined in the Certificates of
Designations)) in a primary offering pursuant to an effective registration
statement (other than on Form S-4, Form S-8 or their equivalent) filed by the
Company under the Securities Act.
"Recognized Exchange" means The New York Stock Exchange, Inc. or the
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Nasdaq National Market.
"Registration Rights Agreement" means the Registration Rights
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Agreement, dated as of July 12, 2000 among the Purchasers and the Company, as
amended from time to time.
"Restricted Securities" means all Securities other than (i) Securities
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that have been registered under an effective registration statement pursuant to
the Securities Act and (ii) Securities with respect to which the holder thereof
shall have delivered to the Company either (A) an opinion, in form and substance
reasonably satisfactory to the Company, of counsel, who shall be reasonably
satisfactory to the Company, or (B) a "no action" letter from the staff of the
Securities and Exchange Commission, to the effect that subsequent Transfers of
such Securities may be effected without registration under the Securities Act or
compliance with such Rule 144.
"Securities" means shares of Common Stock or Common Stock Equivalents
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or other securities of the Company, other than debt securities that are not
Common Stock Equivalents, whether owned on the date hereof or hereafter
acquired.
"Subsidiary" means, with respect to any Person, any other corporation,
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limited liability company, association or other business entity of which more
than 50% of the shares of voting stock or other voting rights are owned or
controlled, directly or in directly, by such Person or a Subsidiary of such
Person.
"Securities Act" means the Securities Act of 1933, as amended, and the
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rules and regulations promulgated thereunder, as the same may be amended from
time to time.
"Transaction Agreements" shall mean the Investment Agreement, the
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Stockholders Agreement, the Series A-1 Preferred Stock Certificate of
Designations, the Series A-2 Preferred
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Stock Certificate of Designations, the Registration Rights Agreement and the
Transaction Fee Agreement.
"Transfer" means any direct or indirect transfer, sale, assignment,
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distribution, exchange, hypothecation or other disposition of any Securities or
any interest therein, including transfers by operation of law in connection with
a merger transaction or otherwise, but excluding any mortgage, pledge or
granting of a security interest therein.
"Unrestricted Marketable Securities" means equity securities which (i)
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are listed or quoted, as applicable, on a Recognized Exchange, (ii) may be
freely sold to the public on such Recognized Exchange without restriction
(including without compliance with the registration requirements of the
Securities Act) other than customary restrictions pursuant to the trading rules
of such Recognized Exchange and (iii) have an average daily trading volume in
terms of number of securities over the past six months on the applicable
Recognized Exchange ending the third trading day preceding the proposed date of
Transfer hereunder that is at least 10% of the number of securities to be
received by the Purchasers pursuant to Section 2.6.
1.2 Other Definitional Provisions; Interpretation. (i) The words
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"hereof", "herein" and "hereunder" and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement, and Section and Subsection references are to this
Agreement unless otherwise specified.
(ii) The headings in this Agreement are included for convenience of
reference only and shall not limit or otherwise affect the meaning or
interpretation of this Agreement.
(iii) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION 2. TRANSFERS AND ISSUANCES
2.1 Limitations on Transfer. (a) Each of the Stockholders hereby
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agrees that it will not, directly or indirectly, Transfer any Securities unless
such Transfer complies with the provisions hereof and (i) such Transfer is made
pursuant to an effective registration statement under the Securities Act and, if
required, has been registered under all applicable state securities or "blue
sky" laws or (ii) no such registration is required because of the availability
of an exemption from registration under the Securities Act and all applicable
state securities or "blue sky" laws.
(b) Except as provided in Section 2.2 hereof or pursuant to any
Business Combination Transaction, from and after the first Public Offering,
Geneseo and Cambridge each agrees that without the prior written consent of
Blackstone, it will not Transfer any Securities at any time until after the date
occurring six months after the expiration of the lockup period referred to in
Section 2.1(c) hereof with respect to such Public Offering.
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(c) Except as provided in Section 2.2 hereof or pursuant to a
Business Combination Transaction, each Stockholder agrees that it shall not, and
it shall cause any transferee of its Securities to agree not to (in form and
substance reasonably satisfactory to the non-transferring Stockholders),
Transfer any Securities during the 20 days prior to, and for up to a 180-day
period beginning upon, an underwritten Public Offering of Securities (whether
pursuant to the Registration Rights Agreement or otherwise, except as part of
such Public Offering) if and to the extent reasonably requested in writing (with
reasonable prior written notice) by the managing underwriter of such
underwritten Public Offering or by the Company on its behalf.
(d) Except as provided in Section 2.2 or pursuant to any Business
Combination Transaction or Public Offering, Geneseo and Cambridge each agrees
that without the prior written consent of Blackstone it will not Transfer any
Securities at any time until after July 12, 2002.
2.2 Permitted Transfers. (a) Notwithstanding anything contained
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herein to the contrary (including the limitations set forth in Sections 2.1(b),
(c) and (d) above), each of Geneseo and Cambridge shall be entitled, from time
to time, to Transfer any or all of the Securities owned by it to any of its
Affiliates who agree in a writing reasonably satisfactory in form and substance
to Blackstone to become a party to, and be bound to the same extent as its
transferor by the terms of, this Agreement, and any such transferee shall be
deemed to be a "Stockholder" hereunder (any such transferee, a "Permitted
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Transferee").
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(b) If, while any Permitted Transferee holds any Securities, such
Permitted Transferee ceases to qualify as Permitted Transferee in relation to
the transferor Stockholder from whom such Permitted Transferee received such
Securities (an "Unwinding Event"), then:
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(i) the relevant transferor Stockholder shall forthwith notify the
other Stockholders of the pending occurrence of such Unwinding Event; and
(ii) prior to such Unwinding Event, such transferor Stockholder shall
take all actions necessary to effect a Transfer of all the Securities held
by the relevant Permitted Transferee either back to such transferor
Stockholder or, pursuant to this Section 2.2, to another Person that
qualifies as a Permitted Transferee of such transferor Stockholder.
(c) Notwithstanding anything contained herein to the contrary,
during the restrictive period referred to in Section 2.1(d) hereof Geneseo and
Cambridge shall be entitled to Transfer in one or more bona fide private
placement transactions up to such aggregate number of shares of Common Stock
that result in aggregate gross proceeds (before deduction of underwriting
discounts, if any, and expenses of sale) of $40,000,000.
2.3 Effect of Void Transfers. In the event of any purported Transfer
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of any Securities in violation of the provisions of this Agreement, such
purported Transfer shall be void and of no effect and the Company shall not give
effect to such Transfer. The Company shall not be required to enter in its stock
or other records, or reflect, recognize or give effect to for any purpose, any
Transfer of Securities in violation of this Agreement.
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2.4 Legend on Securities. (a) Each certificate representing
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Securities issued to any Stockholder shall bear the following legend on the face
thereof:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY STATE SECURITIES
LAWS. SUCH SECURITIES MAY NOT BE SOLD OR OTHERWISE TRANSFERRED, EXCEPT
(1) ACCORDING TO AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO
iPCS, INC. (THE "COMPANY") IN A TRANSACTION THAT IS EXEMPT FROM, OR
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
OR (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES."
"THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO A STOCKHOLDERS
AGREEMENT AMONG THE HOLDER HEREOF, CERTAIN OTHER PARTIES AND THE
COMPANY, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.
NO TRANSFER, SALE, ASSIGNMENT, EXCHANGE, HYPOTHECATION OR OTHER
DISPOSITION OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE
MADE EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF SUCH AGREEMENT,
ALTHOUGH MORTGAGES AND PLEDGES OF SUCH SECURITIES ARE PERMITTED."
(b) In the event that any Securities shall cease to be Restricted
Securities, the Company shall, upon the written request of the holder thereof,
issue to such holder a new certificate evidencing such Securities without the
first paragraph of the legend required by Section 2.4(a) endorsed thereon. In
the event that any Securities shall cease to be subject to the restrictions on
transfer set forth in this Agreement, the Company shall, upon the written
request of the holder thereof, issue to such holder a new certificate evidencing
such Securities without the legend required by the second paragraph of Section
2.4(a).
2.5 Tag-Along Rights. (a) Except for any proposed Transfer or series
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of related Transfers by Geneseo and Cambridge (in such capacity, a "Transferring
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Stockholder") of 500,000 or fewer shares of Common Stock and/or Common Stock
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Equivalents individually or 2,000,000 shares of Common Stock and/or Common Stock
Equivalents in the aggregate as otherwise permitted hereunder, the Transferring
Stockholder shall have the obligation, and each Purchaser shall have the right,
to require the proposed transferee to purchase from such Purchaser a number of
shares of Common Stock or Common Stock Equivalents in the aggregate up to the
product (rounded up to the nearest whole number) of (i) the quotient determined
by dividing (A) the aggregate number of shares of Common Stock and Common Stock
Equivalents beneficially
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owned by such Purchaser by (B) the aggregate number of shares of Common Stock
and Common Stock Equivalents beneficially owned by the Transferring Stockholder
and (ii) the total number of shares of Common Stock and Common Stock Equivalents
proposed to be Transferred by the Transferring Stockholder to the transferee in
the contemplated Transfer, and at the same price (on a per share of Common Stock
basis) as to be paid and given to the Transferring Stockholder, with an
appropriate adjustment to take into account the exercise or conversion price
payable, if any, in connection with the exercise or conversion of any Common
Stock Equivalent to be sold by the Transferring Stockholder or such Purchaser
and on substantially the same terms (other than indemnities) applicable to the
Transferring Stockholder (to the extent such terms are customary and
reasonable). In the event any proposed Transfer by the Transferring Stockholder
to which this Section 2.5 applies would result in a Change of Control (other
than a Change of Control arising pursuant to a Private Company Business
Combination Transaction with respect to which Blackstone has exercised its
waiver rights pursuant to subsection 2(h)(ii) of the Certificates of
Designations for the Preferred Stock), such Purchaser shall be deemed
immediately prior to any such proposed Transfer to beneficially own the shares
of Preferred Stock acquired by operation of Section 2(h) of the applicable
Certificates of Designations for the Preferred Stock, and shall be permitted to
exercise its rights to require the proposed transferee to purchase any such
shares of Preferred Stock (or Common Stock into which such shares of Preferred
Stock may have been converted) in accordance with this Section 2.5.
(b) The Transferring Stockholder shall give notice to each Purchaser
of each proposed Transfer giving rise to the rights of the Purchasers set forth
in Section 2.5(a) at least 15 Business Days prior to the proposed consummation
of such Transfer, setting forth the number of shares of Common Stock or Common
Stock Equivalents proposed to be so transferred, the name and address of the
proposed transferee, the proposed amount and form of consideration and other
terms and conditions of payment offered by the proposed transferee, including,
if applicable, a copy of the offer of the proposed transferee and a copy of the
proposed Transfer agreement and a representation that the proposed transferee
has been informed of, and agrees to comply with, the tag-along rights provided
for in this Section 2.5. The tag-along rights provided by this Section 2.5 must
be exercised by any Purchaser within 10 Business Days following receipt of the
notice required by the preceding sentence, by delivery of a written notice to
the Transferring Stockholder indicating the desire of such Purchaser to exercise
its rights and specifying the number of shares of Common Stock or Common Stock
Equivalents it desires to sell. Promptly following any such exercise, such
Purchaser shall execute the applicable Transfer agreement or other documentation
to the extent provided to such Purchaser and otherwise in compliance with this
Section 2.5. Any exercise of tag-along rights by any Purchaser hereunder shall
only become binding upon execution by such Purchaser of the applicable Transfer
agreement or other documentation.
(c) The Transferring Stockholder shall be entitled under this Section
2.5 to Transfer to the proposed transferee the number of shares of Common Stock
or Common Stock Equivalents equal to the excess of (x) the number referred to in
clause (ii) of Section 2.5(a) over (y) the aggregate number of shares of Common
Stock or Common Stock Equivalents set forth in the written exercise notice or
notices, if any, delivered by any Purchaser, as to which such Purchaser was
entitled to exercise its tag-along rights.
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(d) If the proposed transferee fails to purchase shares of Common
Stock or Common Stock Equivalents from any Purchaser as to which such Purchaser
has exercised its rights under this Section 2.5, then the Transferring
Stockholder shall not be permitted to make the proposed Transfer, and any such
attempted Transfer shall be void and of no effect, as provided in Section 2.3
hereof.
(e) The rights granted to the Purchasers pursuant to this Section
2.5 shall not apply to any Transfer by Geneseo or Cambridge (i) to any of their
respective Affiliates in accordance with Section 2.2, (ii) in a Public Offering
or (iii) in a transaction in compliance with Rule 144 under the Securities Act.
(f) The rights granted to the Purchasers pursuant to this Section
2.5 shall terminate following a Public Offering at such time that Geneseo and
Cambridge shall cease to beneficially own, in the aggregate, at least 25% of the
outstanding shares of Common Stock and Common Stock Equivalents, determined on a
fully diluted basis.
2.6 Drag-Along Rights. (a) If Geneseo and Cambridge receive an
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offer (the "Drag-Along Offer") from a Person other than an Affiliate thereof (a
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"Third Party") to purchase in a bona fide arm's length transaction all, but not
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less than all, of the shares of Common Stock then beneficially owned by Geneseo
and Cambridge and such offer is accepted by Geneseo and Cambridge in their sole
discretion, then, at the joint election of Geneseo and Cambridge, each of the
Purchasers hereby agrees that it will Transfer all of the shares of Common Stock
and Preferred Stock owned by it (including any shares of Preferred Stock
acquired by operation of Section 2(h) of the Certificates of Designations for
the Preferred Stock as a result of the Transfers to which this Section 2.6
applies) to such Third Party on substantially the same terms (other than
indemnities) of the Drag-Along Offer so accepted by Geneseo and Cambridge (to
the extent such terms are customary and reasonable), including the same per
share of Common Stock consideration; provided that:
(i) the price per share of Common Stock is greater than (A) if the
Drag-Along Offer is consummated before July 12, 2002, three times $5.50
(subject to adjustment to such price pursuant to subsections 5(e), (f),
(g), (i) and (j) of the Certificate of Designations for the Series A-1
Preferred Stock) or (B) if the Drag-Along Offer is consummated on or after
July 12, 2002, four times $5.50 (subject to adjustment to such price
pursuant to subsections 5(e), (f), (g), (i) and (j) of the Certificate of
Designations for the Series A-1 Preferred Stock);
(ii) the per share price to be paid for the Preferred Stock owned by
the Purchasers shall be equal to the per share price to be paid for the
Common Stock multiplied by the number of shares of Common Stock into which
each share of the Preferred Stock is then convertible;
(iii) the consideration to be received by the Purchasers shall
consist solely of U.S. dollars cash or Unrestricted Marketable Securities
or any combination thereof; and
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(iv) this provision shall only apply to any shares of Preferred Stock
once such shares have been outstanding for over one year.
(b) If Geneseo and Cambridge elect to exercise their rights under
Section 2.6(a), they shall give notice (the "Drag-Along Notice") to each of the
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Purchasers of any proposed Transfer giving rise to, and exercising, such rights
as soon as practicable (but in no event later than three Business Days)
following the execution of an agreement setting forth the Drag-Along Offer. The
Drag-Along Notice shall set forth the name of the proposed transferee, the
proposed amount and form of consideration and the other terms and conditions of
the offer, including a copy of the agreement setting forth the Drag-Along Offer.
If the Transfer referred to in the Drag-Along Notice is not consummated within
90 days from the date of the Drag-Along Notice, the Transferring Stockholder
must deliver another Drag-Along Notice in order to exercise its rights under
this Section 2.6 with respect to such Transfer or any other Transfer. In the
event any proposed Transfer by the Transferring Stockholder to which this
Section 2.6 applies would result in a Change of Control (other than a Change of
Control arising pursuant to a Private Company Business Combination Transaction
with respect to which Blackstone has exercised its waiver rights pursuant to
subsection 2(h)(ii) of the Certificates of Designations for the Preferred
Stock), the Purchasers shall be deemed immediately prior to any such proposed
Transfer to beneficially own the shares of Preferred Stock acquired by operation
of Section 2(h) of the applicable Certificates of Designations for the Preferred
Stock, and shall be permitted to exercise their rights to require the proposed
transferee to purchase any such shares of Preferred Stock (or Common Stock into
which such shares of Preferred Stock may have been converted) in accordance with
this Section 2.6.
(c) If Geneseo and Cambridge elect to exercise their rights under
Section 2.6(a), the closing of the purchase of the shares of Common Stock and/or
Common Stock Equivalents of the Purchasers with respect to which such rights
have been exercised shall take place concurrently with the closing of the
purchase of the shares of Common Stock and/or Common Stock Equivalents of all
other Persons participating in the applicable Drag-Along Offer; provided that
such closing (including the purchase of the shares of Common Stock and/or Common
Stock Equivalents of all other Persons participating in the applicable Drag-
Along Offer) may be extended by such time as any Purchaser may reasonably
require in order to obtain any approval or authorization of any Governmental
Entity or to comply with any applicable law or regulation.
(d) The rights granted to Geneseo and Cambridge pursuant to this
Section 2.6 shall terminate upon the earlier of (i) a Public Offering, (ii) such
time as Geneseo and Cambridge shall cease to beneficially own, in the aggregate,
at least 25% of the outstanding shares of Common Stock and (iii) the
consummation of any Business Combination Transaction resulting in a Change of
Control that results in an Automatic Conversion. Geneseo and Cambridge shall
only be entitled to exercise their rights pursuant to this Section 2.6 if (i)
the shares of Common Stock and Common Stock Equivalents beneficially owned by
them plus (ii) all of the shares of Common Stock and Common Stock Equivalents
----
then beneficially owned by the Purchasers (including any shares of Preferred
Stock issuable by operation of Section 2(h) of the Certificates of Designations
for the Preferred Stock as a result of the Transfers to which this Section 2.6
applies) plus (iii) if any of Cass Communications Management, Inc., Technology
----
Group, LLC, Montrose Mutual PCS, Inc., Respond
10
Communications, Inc., Xxxxxxx Enterprises, Inc. or Xxxxxxx X. Xxxxx, or any of
their Affiliates then holding Common Stock or Common Stock Equivalents, has
agreed to Transfer pursuant to the applicable Drag-Along Offer all of the shares
of Common Stock and Common Stock Equivalents then beneficially owned by them,
all of such shares of Common Stock or Common Stock Equivalents, equal a majority
-----
of the then outstanding shares of Common Stock on a fully diluted basis.
SECTION 3. BOARD OF DIRECTORS
3.1 Board of Directors. (a) The parties hereto agree to cause the
------------------
Company Board to consist of nine directors (individually, a "Director" and,
--------
collectively, the "Directors"). The Company hereby acknowledges the rights of
---------
the holders of the Preferred Stock, including Blackstone, so long as it is the
majority holder of such Preferred Stock, to designate persons to the board of
directors of the Company in accordance with the Certificates of Designations.
(b) In the event but only in the event holders of the Preferred Stock
are not entitled to designate any Directors under the Certificates of
Designations, then (i) for so long as Blackstone beneficially owns on an as-
converted basis 8% or more of the outstanding Common Stock, Blackstone shall be
entitled to designate two Directors, (ii) for so long as Blackstone beneficially
owns on an as-converted basis less than 8% but more than 4% of the outstanding
Common Stock, then Blackstone shall be entitled to designate one Director and
(iii) if Blackstone beneficially owns on a fully diluted basis less than 4% of
the outstanding Common Stock, then Blackstone shall not be entitled to designate
any Directors.
(c) In the event holders of the Preferred Stock are entitled to
designate only one Director under the Certificates of Designations, then, in
addition to the Director the holders of the Preferred Stock shall have the right
to designate, (i) for so long as Blackstone beneficially owns on an as-converted
basis 8% or more of the outstanding Common Stock, Blackstone shall be entitled
to designate one additional Director and (ii) if Blackstone beneficially owns on
an as-converted basis less than 8% of the outstanding Common Stock, then
Blackstone shall not be entitled to designate any additional Directors.
(d) The Stockholders agree to vote their Common Stock (or any other
voting security) in favor of any designee Director proposed by Blackstone
pursuant to Section 3.1(b) and (c) hereof. The Company and the Stockholders each
agree to take such other actions as may be necessary to implement the provisions
of this Section 3.
(e) The removal from the Company Board of any Director nominated to
the Company Board by Blackstone pursuant to this Section 3 without cause shall
be only upon the written request of Blackstone. In the event that any person
designated as a Director by Blackstone hereunder for any reason ceases to serve
as a Director during such person's term of office, the resulting vacancy shall
be filled by a representative designated by Blackstone.
11
(f) The Company shall reimburse the Directors designated by
Blackstone for all reasonable out-of-pocket expenses borne by such Directors in
connection with the performance of their duties as Directors and such Directors
shall also be entitled to receive any other compensation or indemnity
arrangements which all other Directors of the Company are entitled to receive.
(g) If Blackstone is entitled to designate one Director pursuant to
this Section 3.1, such Director shall be designated to be a member of the class
of Directors having the longest remaining term at the time of such designation.
If Blackstone is entitled to designate two Directors pursuant to this Section
3.1, one Director shall be designated to be a member of the class of Directors
having the longest remaining term at the time of such designation and one
Director shall be designated to be a member of the class of Directors having the
second longest remaining term at the time of such designation. In the event that
Blackstone's beneficial ownership of Common Stock falls below the percentages
set forth in subsections (b) and (c) above, the Director or Directors, as
applicable, that Blackstone is no longer entitled to designate shall promptly
resign and be replaced in accordance with the Company's bylaws.
SECTION 4. PREEMPTION RIGHTS
4.1 Preemptive Rights. (a) Until the earlier of (i) a Minimum
-----------------
Public Offering and (ii) the consummation of a Public Company Business
Combination Transaction or a Private Company Business Combination Transaction
resulting in a Change of Control, the Company shall not, after the date of this
Agreement, issue (an "Issuance") any Securities (other than Excluded Issuances
--------
or the Excluded Warrants and shares of Common Stock issuable upon exercise of
the Excluded Warrants) unless, prior to such Issuance, the Company notifies each
of the Purchasers, in writing, of the proposed Issuance and grants to each of
the Purchasers the right (the "Right") to subscribe for and purchase a portion
-----
of such Securities proposed to be issued at the same price per share and upon
the same terms and conditions (including, in the event such Securities are
issued as a unit together with other securities, the purchase of such other
securities) as issued in the Issuance such that:
(A) immediately after giving effect to the Issuance and exercise of
the Right, the shares of Common Stock beneficially owned by each of the
Purchasers and the shares of Common Stock into which shares of Preferred
Stock owned by each of the Purchasers are then convertible (rounded to the
nearest whole share) on a fully diluted basis shall represent the same
percentage of the aggregate number of shares of Common Stock outstanding on
a fully diluted basis as was beneficially owned by such Purchaser and the
shares of Common Stock into which shares of Preferred Stock owned by such
Purchaser are then convertible on a fully diluted basis immediately prior
to the Issuance; and
(B) in the case of an Issuance in which shares of capital stock (or
options, warrants or other rights therefor) other than Common Stock or
Common Stock Equivalents ("Other Capital Stock") are to be issued, each of
-------------------
the Purchasers shall have the Right to acquire a percentage of the Other
Capital Stock to be issued in the Issuance equal to the percentage
12
of shares of Common Stock on a fully diluted basis that was beneficially
owned by such Purchaser (including shares of Common Stock into which the
Preferred Stock owned by such Purchaser is convertible) immediately prior
to the Issuance.
(b) If any Issuances are made in exchange for all or any non-cash
consideration, then, in the absence of an agreement between the Company and
Blackstone, (i) the fair market value of such non-cash consideration shall be
determined by an independent appraiser of recognized standing appointed by the
Company (subject to the approval of Blackstone (such approval not to be
unreasonably withheld)) and (ii) each of the Purchasers shall have the right, in
accordance with this Section 4.1, to subscribe for the applicable Securities by
paying cash in an amount equal to the value of any such non-cash consideration
as so determined.
(c) The Right may be exercised by each of the Purchasers at any time
by written notice to the Company received by the Company within 10 Business Days
after the date on which such Purchaser receives notice from the Company of the
proposed Issuance and, if the Right is exercised, the closing of the purchase
and sale pursuant to the exercise of the Right shall occur at least 15 Business
Days (but not later than 60 days) after the Company receives notice of the
exercise of the Right concurrently with the closing of the Issuance.
SECTION 5. BLACKSTONE RIGHT TO CAUSE A SALE
5.1 Redemption Request. (a) In the event that (i) the Company has
------------------
not issued Securities in Public Offerings (including one Minimum Public
Offering) resulting in gross proceeds to the Company (before deduction of
underwriting discounts and expenses of sale) of at least $50 million or (ii) a
Public Company Business Combination Transaction has not been consummated, then,
beginning on the fifth anniversary of the date hereof, Blackstone shall have the
right (which may be withdrawn at any time within five Business Days after the
determination of the Fair Market Value pursuant to Section 5.1(b) hereof) to
request that the Company repurchase for cash any or all of Blackstone's
outstanding shares of Preferred Stock and Common Stock received from the
conversion of the Preferred Stock and TCW shall have the right to participate in
any such Redemption Request with respect to a pro rata portion of the Preferred
Stock and Common Stock received from the conversion of the Preferred Stock held
by it (collectively, the "Redemption Securities") at the Fair Market Value
---------------------
(determined in accordance with Section 5.1(b) below) thereof by giving the
Company a written request therefor (the "Redemption Request").
------------------
(b) The fair market value of any Redemption Securities shall be
determined pursuant to this Section 5.1(b). For a period of 20 days following
the receipt of a Redemption Request by the Company, Blackstone and the Company
shall attempt in good faith to agree on the fair market value of the Redemption
Securities. Any agreement reached by Blackstone and the Company shall be final
and binding on all parties hereto. If Blackstone and the Company are unable to
reach agreement within 20 days after the receipt by the Company of the
Repurchase Request, Blackstone and the Company shall each, within 10 days
thereafter, choose one investment banker or other appraiser with experience in
valuing companies such as the Company, and the two investment
13
bankers or appraisers so selected shall together select a third investment
banker or appraiser similarly qualified. The three investment bankers or
appraisers shall appraise the fair market value of the Redemption Securities
that are not publicly traded, determined on the basis of an orderly, arm's
length sale (structured to produce the highest price for such securities) to a
willing, unaffiliated buyer, taking into account all relevant factors
determinative of value (but without any discount for lack of liquidity or
minority status). Within 30 days of their retention, the three investment
bankers or appraisers shall provide the written results of such appraisals to
Blackstone and, if applicable, TCW and the Company. The "Fair Market Value" of
-----------------
the Redemption Securities shall be the average of the three appraisals, and such
amount shall be final and binding on all parties hereto. The reasonable costs of
such appraisals shall be borne by the Company.
(c) In the event Blackstone has not withdrawn its redemption request
pursuant to Section 5.1(a) hereof, the Company shall purchase the Redemption
Securities at the Fair Market Value thereof on or prior to the twentieth
Business Day following the expiration of Blackstone's withdrawal right unless
the Company Board determines in its sole discretion that it is not in the best
interests of the Company to repurchase the Redemption Securities. In the event
the Company Board determines not to purchase the Redemption Securities on or
prior to such date or if Blackstone has withdrawn its redemption request
pursuant to Section 5.1(a) hereof, Blackstone shall have the right, subject to
the rights of Sprint Spectrum, LP and SprintCom, Inc. under the Sprint
Management Agreement (as defined in the Investment Agreement), to require a
Company Sale in accordance with Section 5.2 hereof.
5.2 Sale of the Company. If Blackstone exercises its rights pursuant
-------------------
to Section 5.1(c) to effect a Company Sale, the Company Board shall cause a
Company Sale as expeditiously as practicable (subject to the pursuit of a
favorable price), consistent with the fiduciary duties of the Company Board. If
Blackstone exercises such rights, each of Geneseo and Cambridge covenants that
it shall exercise all rights available to it as a stockholder of the Company to
effect a Company Sale as expeditiously as practicable (subject to the pursuit of
a favorable price) within six months of Blackstone's election pursuant to
Section 5.1(c) hereof, including directing their Director designees to pursue a
Company Sale or electing new Directors, if necessary, to pursue such a sale. The
parties agree that for a period of ninety days following the exercise of
Blackstone's right to cause a Company Sale, that the Company Board shall pursue
in good faith such a sale exclusively with Sprint or any of its Affiliates then
in good standing. If an agreement for a Company Sale is not reached within such
ninety day period with any of such Persons, the Company Board shall, and
Blackstone may, pursue a Company Sale with any other Persons, subject in all
cases to the rights of Sprint Spectrum, LP and SprintCom, Inc. under the Sprint
Management Agreement.
SECTION 6. BLACKSTONE INITIAL PUBLIC OFFERING RIGHTS
6.1 Initial Public Offering. If, within two years after the date
-----------------------
hereof, a Minimum Public Offering has not occurred, then upon Blackstone's
request the Company shall use its best efforts to consummate a Minimum Public
Offering as expeditiously as possible (but in any event within 180 days). The
Company shall comply with the terms of Section 5 of the Registration Rights
14
Agreement (to the extent applicable to a sale of securities by the Company) as
if such terms had been set forth herein.
SECTION 7. BLACKSTONE INFORMATION RIGHTS
7.1 Information Rights. The Company hereby agrees that for so long
------------------
as any Purchaser continues to hold any Securities, the Company shall, with
respect to each entity included within the definition of "Blackstone" or "TCW"
that is intended to qualify as a "venture capital operating company" within the
meaning of 29 C.F.R. (S) 2510.3-101(d) (each, a "VCOC Investor"):
-------------
(a) provide the VCOC Investor or its designated representative with
(A) the right to inspect and copy the books and records of the Company and
the Subsidiaries, (B) copies of all audited financial statements of the
Company and the Subsidiaries and (C) copies of all materials provided to
the Company Board;
(b) make appropriate officers and/or directors of the Company
available periodically for consultation with the VCOC Investor or its
designated representative with respect to matters relating to the business
and affairs of the Company, including significant changes in management
personnel and compensation of employees, introduction of new products or
new lines of business, important acquisitions or dispositions of plants and
equipment, significant research and development programs, the purchasing or
selling of important trademarks, licenses or concessions or the proposed
commencement or compromise of significant litigation;
(c) inform the VCOC Investor or its designated representative in
advance with respect to any significant corporate actions, including
extraordinary dividends, mergers, acquisitions or dispositions of assets,
issuances of significant amounts of debt or equity and material amendments
to the certificate of incorporation or by laws of the Company, and provide
the VCOC Investor or its designated representative with the right to
consult with the Company with respect to such actions; and
(d) provide the VCOC Investor or its designated representative with
such other rights of consultation as may reasonably be determined by the
VCOC Investor to be necessary to qualify its investment in the Company as a
"venture capital investment" for purposes of the United States Department
of Labor Regulation published at 29 C.F.R. Section 2510.3-101(d)(3)(i) (the
"Plan Asset Regulation").
The Company agrees to consider, in good faith, the recommendations of
each VCOC Investor or its designated representative in connection with the
matters on which it is consulted as described above, recognizing that the
ultimate discretion with respect to such matters shall be retained by the
Company in its sole discretion.
15
Notwithstanding the foregoing, Blackstone acknowledges and agrees that
it and its representatives shall not have access to any confidential promotional
and marketing information and confidential results of operations of Sprint PCS.
Blackstone has reviewed the confidentiality provisions in Section 12.2 of the
Sprint Management Agreement and agrees to assist the Company in complying with
such provisions.
SECTION 8. BLACKSTONE BUSINESS COMBINATION RIGHTS
8.1 Approval Rights.
---------------
(a) Change of Control Public Company Business Combination
-----------------------------------------------------
Transactions. The consummation of any Public Company Business Combination
------------
Transaction which would or would reasonably be expected to result in a Change of
Control shall be subject to the prior written approval of the Blackstone
designees, if any, on the Company Board or, if Blackstone ceases to have the
right to appoint any such designees, Blackstone, unless one or more of the
following is true, in which case Blackstone shall have no approval rights with
respect to any such Public Company Business Combination Transaction:
(i) the Series A-2 Closing (as defined in the Investment Agreement)
has not occurred;
(ii) all Preferred Stock previously issued has been converted into
Common Stock; or
(iii) the consideration to be received by Blackstone in such Public
Company Business Combination Transaction includes only cash and/or shares
of common stock of the Public Company and implies a valuation of
Blackstone's total investment in the Company determined at the time of the
consummation of such transaction of greater than the greater of (A) $11.00
per share of Common Stock (including shares of Common Stock issuable upon
conversion of the Preferred Stock), such price being subject to adjustment
pursuant to subsections 5(e), (f), (g), (i) and (j) of the Series A-1
Preferred Stock Certificate of Designations and (B) an internal rate of
return on Blackstone's investment in the Company, determined from the date
of its investment(s) therein, equal to an annual rate of 35%. For purposes
of determining the implied valuation of Blackstone's total investment in
the Company, (A) the value of any consideration in the form of common stock
shall be based on the closing public market price of such common stock on
the trading day immediately prior to the consummation of such transaction
and (B) internal rate of return shall mean an interest rate that, when used
to calculate the net present value of all cash inflows (the value of the
consideration to be received by Blackstone pursuant to the applicable
transaction) and cash outflows (Blackstone's investment in the Company) as
of the date of any such determination, causes such net amount to be zero,
it being understood that Blackstone's total investment in the Company shall
be determined without taking into account any dividends paid or accrued on
the Preferred Stock originally issued at the Series A-1 Closing (as defined
in the Investment Agreement) and the Series A-2 Closing or any shares of
Common Stock
16
or Preferred Stock previously sold by Blackstone (or the corresponding
investment made by Blackstone in the Company with respect to such shares),
but taking into account any consideration received by Blackstone in
connection with such Public Company Business Combination Transaction in
respect of Preferred Stock received by Blackstone as dividends and taking
into account any and all amounts receivable by Blackstone as a special
dividend pursuant to Section 2(h) of the Certificates of Designations for
the Preferred Stock.
(b) Change of Control Private Company Business Combination
------------------------------------------------------
Transactions. The consummation of any Private Company Business Combination
------------
Transaction which would or would reasonably be expected to result in a Change of
Control shall be subject to the prior written approval of the Blackstone
designees, if any, on the Company Board or, if Blackstone ceases to have the
right to appoint any such designees, Blackstone, unless one or more of the
following is true, in which case Blackstone shall have no approval rights with
respect to any such Private Company Business Combination Transaction:
(i) the Series A-2 Closing has not occurred;
(ii) all Preferred Stock previously issued has been converted into
Common Stock; or
(iii) the consideration to be received by Blackstone in such Private
Company Business Combination Transaction includes only cash and/or shares
of common stock of the Private Company and implies a valuation of
Blackstone's total investment in the Company determined at the time of the
consummation of such transaction of greater than the greater of (A) $11.00
per share of Common Stock (including shares of Common Stock issuable upon
conversion of the Preferred Stock), such price being subject to adjustment
pursuant to subsections 5(e), (f), (g), (i) and (j) of the Series A-1
Preferred Stock Certificate of Designations and (B) an internal rate of
return on Blackstone's investment in the Company, determined from the date
of its investment(s) therein, equal to an annual rate of 35%. For purposes
of determining the implied valuation of Blackstone's total investment in
the Company, (A) the value of any consideration in the form of common stock
shall be based on the Fair Market Value of such common stock on the day
immediately prior to the consummation of such transaction or, so long as
there has not been any material diminution in the value of such
consideration prior to the date of consummation, as close thereto as
reasonably practicable, determined in accordance with the procedures set
forth in Section 5.1(b) and (B) internal rate of return shall mean an
interest rate that, when used to calculate the net present value of all
cash inflows (the value of the consideration to be received by Blackstone
pursuant to the applicable transaction) and cash outflows (Blackstone's
investment in the Company) as of the date of any such determination, causes
such net amount to be zero and Blackstone's total investment in the Company
shall be determined without taking into account any dividends paid or
accrued on the Preferred Stock originally issued at the Series A-1 Closing
(as defined in the Investment Agreement) and the Series A-2 Closing or any
shares of Common Stock or Preferred Stock previously sold by Blackstone (or
the corresponding investment made by Blackstone in the Company with
17
respect to such shares), but taking into account any consideration received
by Blackstone in connection with such Private Company Business Combination
Transaction in respect of Preferred Stock received by Blackstone as
dividends, and taking into account any and all amounts receivable by
Blackstone as a special dividend pursuant to Section 2(h) of the
Certificates of Designations for the Preferred Stock.
(c) Non-Change of Control Business Combination Transactions. So long
-------------------------------------------------------
as Blackstone and its Affiliates shall hold in the aggregate at least 2% of the
outstanding shares of Common Stock, the consummation of any Business Combination
Transaction which would not result in a Change of Control shall be subject to
the prior written approval of the Blackstone designees, if any, on the Company
Board or, if Blackstone ceases to have the right to appoint any such designees,
Blackstone. The approval rights set forth in this clause (c) shall terminate
when all Preferred Stock previously issued has been converted into Common Stock.
8.2 Public Company Change of Control. Notwithstanding any other
--------------------------------
provision of the Transaction Agreements, upon a Change of Control pursuant to
any Public Company Business Combination Transaction, the following provisions
shall apply and compliance therewith in form and substance reasonably
satisfactory to Blackstone shall be a condition to the consummation of any such
transaction:
(i) subject to the terms and conditions of the Certificates of
Designations of the Preferred Stock, the holders of the Preferred Stock
shall be entitled to receive the special dividend set forth in Subsection
2(h)(i) of the Certificates of Designations and all shares of Preferred
Stock (including shares of Preferred Stock constituting the special
dividend) shall be automatically converted into Common Stock in accordance
with Section 5 of the Certificates of Designations; and the holders of
shares of Common Stock issuable upon such conversion shall be entitled to
receive the same per share consideration pursuant to any such transaction
as received by all other holders of Common Stock;
(ii) if not yet terminated, satisfied or expired, the obligation of
the Company to sell and of Blackstone and TCW to purchase the Series A-2
Preferred Stock pursuant to the Investment Agreement shall be terminated;
(iii) unless the Company becomes the ultimate parent entity of the
combined businesses (defined as the beneficial owner of 50% or more of the
voting securities of the combined businesses) as a result of any such
transaction, the parent entity resulting from such Public Company Business
Combination Transaction (the "Resulting Company") shall assume the
-----------------
obligations of the Company under the Registration Rights Agreement, Section
4.01, 4.02, 4.03 and 6.01 through 6.15 of the Investment Agreement and
Sections 2.1(c), 7.1, 10.4 and 10.6 through 10.16 of this Agreement, and
(except as provided in clauses (iv) and (v) below, the other provisions of
this Agreement shall terminate; and in order to give effect to the
foregoing, at Blackstone's election, the appropriate parties shall amend
and restate such provisions of this Agreement, the Investment Agreement and
the Registration
18
Rights Agreement as are appropriate, with references therein to the
"Company" referring to the Resulting Company;
(iv) (A) Cambridge and Geneseo shall use their best efforts to obtain
for Blackstone the right to designate at least one person to the board of
directors of the Resulting Company (the "New Board"); (B) if Cambridge and
---------
Geneseo obtain the right to designate two or more persons to the New Board,
Blackstone shall be entitled to designate one of such persons or, if
greater, 2/9ths of such number of persons; (C) if Cambridge and Geneseo
obtain the right to designate only one person to the New Board, Cambridge
and/or Geneseo shall be entitled to designate such person, and Blackstone
shall be entitled in any case to designate one person to attend and
participate as a non-voting observer at all meetings of the New Board (and
to receive all materials and information voting members of the New Board
receive); and (D) the provisions of Sections 3.1(d), (e), (f) and (g) of
this Agreement shall, with such appropriate and necessary modifications,
apply to Blackstone's right to designate any such person or persons to the
New Board; and
(v) if the Company is not the Resulting Company, the rights granted
to Blackstone pursuant to Section 2.5 of this Agreement shall nonetheless
continue to apply to Geneseo and Cambridge and any equity securities of the
Resulting Company received by them in any such transaction until such time
that they cease to beneficially own, in the aggregate, 25% of the
outstanding equity securities of the Resulting Company.
8.3 Private Company Change of Control. Notwithstanding any other
---------------------------------
provision of the Transaction Agreements, upon a Change of Control pursuant to
any Private Company Business Combination Transaction, the provisions of the
following paragraph (i) shall apply unless Blackstone makes the election
described in the following paragraph (ii). Blackstone agrees that it will either
make the election described in paragraph (ii) below, or irrevocably decline to
make such election with respect to such proposed Private Company Business
Combination Transaction, within fifteen Business Days of the Company's written
request for such decision. In either case, compliance with such provisions in
form and substance reasonably satisfactory to Blackstone shall be a condition to
the consummation of any such Private Company Business Combination Transaction.
(i) Subject to the terms and conditions of the Certificates of
Designations of the Preferred Stock, the holders of the Preferred Stock shall be
entitled to receive the special dividend set forth in Subsection 2(h)(i) of the
Certificates of Designations and all shares of Preferred Stock (including shares
of Preferred Stock constituting the special dividend) shall be automatically
converted into Common Stock in accordance with Section 5 of the Certificates of
Designations. The holders of shares of Common Stock issuable upon such
conversion shall be entitled to receive the same per share consideration
pursuant to any such transaction as received by all other holders of Common
Stock. In addition, the following provisions shall apply:
(A) subject to clause (C) below, the provisions of clauses (ii)
through (v) of Section 8.2,
19
(B) Blackstone shall have a right of first refusal (exercisable
within fifteen Business Days of its presentation) to provide up to 50% of
any private equity raised or proposed to be raised by the Company or the
Resulting Company or their respective Subsidiaries at the time of, or at
any time within eighteen months after, the entering into of any such
Private Company Business Combination Transaction; provided that (I) the
terms of Blackstone's right to make such investment shall be as negotiated
with the other party providing such private equity and (II) the Company or
the Resulting Company shall provide prior notice to Blackstone of its
intention to raise any private equity and shall consult with Blackstone
with respect thereto and shall provide Blackstone with the same information
as provided to any other potential investor;
(C) Blackstone's right to cause a Minimum Public Offering of the
Resulting Company pursuant to Section 6.1 of this Agreement shall continue
to apply but shall only become exercisable after three years from the date
of consummation of any such transaction and, if the Company is not the
Resulting Company, the Resulting Company shall assume the obligations of
the Company under such provision and such provision shall be deemed to
apply to the equity securities of the Resulting Company issued as
consideration in any such transaction; and
(D) if Geneseo and Cambridge obtain in any such transaction any
stockholder rights not generally available to all stockholders (including
any approval or veto rights but excluding any registration rights (subject
to the Registration Rights Agreement) or rights to designate persons to the
New Board which are provided for in Section 8.2(ii) and 8.2(iv) above),
Blackstone shall be entitled to the same rights on a unilateral basis.
(ii) As an alternative to clause (i) above, Blackstone may elect to
waive in accordance with Subsection 2(h)(ii) of the Certificates of Designations
of the Preferred Stock the application of Subsection 2(h)(i) of the such
Certificates of Designations with respect to the issuance of a special dividend
upon a Change of Control pursuant to any Private Company Business Combination
Transaction, and, in such case, such provision shall apply to any subsequent
Change of Control consummated prior to July 12, 2005 and the provisions of
clause (i) above shall not apply. In such case, all of the rights and
obligations of the Company and the Stockholders pursuant to the Investment
Agreement (including, if not yet terminated, satisfied or expired, the
obligation of the Company to sell and of Blackstone and TCW to purchase the
Series A-2 Preferred Stock), the Registration Rights Agreement and the
Stockholders Agreement shall continue in full force and effect in accordance
with their respective terms and, at Blackstone's election, if the Company is not
the Resulting Company, the Resulting Company shall assume the obligations of the
Company under all or any of such agreements with such appropriate and necessary
modifications as may be reasonably agreed to by the applicable parties.
20
SECTION 9. REPRESENTATIONS AND WARRANTIES
9.1 Representations of Each of the Parties. Each of the parties
--------------------------------------
hereto represents and warrants solely with respect to himself or itself to each
of the other parties hereto as follows:
(a) Due Organization and Good Standing. Each party, is duly
----------------------------------
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization.
(b) Authority Relative to This Agreement. Each party has all
------------------------------------
necessary power and authority to execute and deliver this Agreement and to
perform its obligations hereunder. The person executing and delivering this
Agreement on behalf of such party is duly authorized to execute and deliver
this Agreement on behalf of such party. The execution and delivery of this
Agreement by it has been duly and validly authorized by all requisite
action and no other proceedings on its part are necessary to authorize this
Agreement. This Agreement has been duly and validly executed and delivered
by it and, assuming the due authorization, execution and delivery by the
other parties hereto, constitutes a legal, valid and binding obligation of
it.
(c) No Conflict. The execution, delivery, and performance by it of
-----------
this Agreement do not and shall not violate any provision of any applicable
law or any order of any court or other Governmental Entity or conflict with
or constitute a default, breach, or violation of the terms, conditions, or
provisions of any contract, agreement or instrument to which such party is
subject which would prevent such party from performing any of its
obligations hereunder or thereunder.
(d) Required Filings and Consents. The execution and delivery by it
-----------------------------
of this Agreement do not, and the performance of this Agreement will not,
require any consent, approval, authorization or permit of, or filing by it
with or notification to, any Governmental Entity, except (i) any such
consents, approvals, authorizations, permits, filings or notifications as
have been already obtained or made, (ii) as disclosed in the Investment
Agreement and schedules thereto and (iii) where failure to obtain such
consents, approvals, authorizations or permits, or to make such filings or
notifications, would not prevent or materially delay it from performing any
of his or its obligations under this Agreement.
(e) Ownership of Stock. Geneseo represents and warrants that (i) it
------------------
is the sole record owner and a beneficial owner of 15,468,809 shares of
Common Stock, (ii) except for a bank pledge, it has good and marketable
title to such Common Stock, free and clear of all liens, claims, security
interests, encumbrances and charges of any nature whatsoever, (iii) Xxxx X.
Xxxxxxxx is the beneficial owner of 1,598 shares of Geneseo common stock
constituting approximately 9% of the voting power of Geneseo's
stockholders, (iv) Xxxx X. Xxxxxxxx'x Related Parties do not beneficially
own in the aggregate in excess of 908 shares of Geneseo common stock or
approximately 5% of the Geneseo voting rights and (v) no other Person is
the record or beneficial owner of a greater number of shares or percentage
of voting power of Geneseo than Xxxx X. Xxxxxxxx. Cambridge represents and
warrants that (i) it is the sole record
21
owner and a beneficial owner of 13,258,979 shares of Common Stock, (ii) it
has good and marketable title to such Common Stock, free and clear of all
liens, claims, security interests, encumbrances and charges of any nature
whatsoever, (iii) Xxxx X. Xxxxxxxx is the beneficial owner of 811 shares of
Cambridge common stock constituting approximately 8.5% of the voting power
of Cambridge's stockholders, (iv) Xxxx X. Xxxxxxxx'x Related Parties do not
beneficially own in the aggregate in excess of 760 shares of Cambridge
common stock or approximately 8% of the Cambridge voting rights and (v) no
other Person is the record or beneficial owner of a greater number of
shares or percentage of voting power of Cambridge than Xxxx X. Xxxxxxxx.
SECTION 10. MISCELLANEOUS
10.1 Additional Securities Subject to Agreement. Each Stockholder
------------------------------------------
agrees that any other Securities which it shall hereafter acquire by means of a
stock split, stock dividend, distribution, exercise of stock options, or
otherwise shall be subject to the terms hereof.
10.2 Registration and Listing. If any shares of Common Stock
------------------------
required to be reserved for purposes of conversion of the Preferred Stock as
provided in the Certificates of Designations for the Preferred Stock require
registration with or approval of any Governmental Entity under any applicable
law before such Common Stock may be issued or delivered upon conversion, the
Company will use its best efforts to cause such Common Stock to be duly
registered or approved as expeditiously as practicable, as the case may be. If
the Common Stock is quoted on or listed on any national quotation system or
securities exchange, the Company, if permitted by the rules of such system or
exchange, will quote or list and keep quoted or listed on such system or
exchange, upon official notice of issuance, from time to time upon request, all
Common Stock issuable or deliverable upon conversion of the Preferred Stock.
10.3 Restrictions on Blackstone Investments. Blackstone agrees that
--------------------------------------
neither it nor any private equity funds established in parallel or in lieu of
Blackstone or any of their respective successors (collectively, the "Blackstone
----------
Funds") shall acquire any equity securities, or any security convertible into
-----
equity securities, pursuant to a private equity investment made after the date
hereof in any Person whose primary business is the provision of mobile wireless
telecommunication services over cellular, PCS or ESMR technologies to POPS which
overlap with greater than 30% of the POPS of the Company as of the date hereof
(a "Competing Business"); provided that this provision shall not apply if:
------------------
(i) Blackstone ceases to designate any persons to the Company Board
and removes any then-serving person appointed by Blackstone thereon, and
sends a notice to the Company waiving its information rights under this
Agreement with respect to any competitively sensitive non-public
information about the Company for as long as it holds the otherwise
restricted investment; or
22
(ii) Blackstone and the Blackstone Funds beneficially own less than
10% of the outstanding shares or other equity securities or interests of
any Competing Business.
In addition, Blackstone agrees that prior to any Blackstone Fund purchasing any
equity securities of any other Sprint PCS Affiliate which is a Competing
Business, it shall notify the Company of the proposed investment and, subject to
any applicable confidentiality obligations, consult with the Company as to such
investment.
The parties agree that this Section 10.3 shall not restrict in any way or be
applicable to Blackstone Mezzanine Partners L.P. or any other vehicle that has
similar business or investment activities or any successor thereto.
10.4 Restrictions on Company Investments. The parties agree that any
-----------------------------------
merger, consolidation sale of assets or other business combination transaction
or issuance of securities or other similar transaction by the Company or any of
its Subsidiaries that includes non-cash consideration and, in the opinion of
counsel as selected by Blackstone, would not result in the non-recognition of
taxable gain with respect to the receipt of such non-cash consideration by the
holders of the Series A-1 Preferred Stock or Series A-2 Preferred Stock, if any,
in connection with (i) any such transaction or (ii) any conversion of the Series
A-1 Preferred Stock or Series A-2 Preferred Stock, if any, thereafter will be
subject to the prior approval of Blackstone.
10.5 Geneseo and Cambridge Approval. Geneseo and Cambridge, in their
------------------------------
capacity as stockholders of the Company, hereby approve the sale and issuance of
the Preferred Stock to the Purchasers.
10.6 Injunctive Relief. The Stockholders acknowledge and agree that a
-----------------
violation of any of the terms of this Agreement will cause the Stockholders
irreparable injury for which adequate remedy at law is not available.
Accordingly, it is agreed that each Stockholder shall be entitled to an
injunction, restraining order or other equitable relief to prevent breaches of
the provisions of this Agreement and to enforce specifically the terms and
provisions hereof in any court of competent jurisdiction in the United States or
any state thereof, in addition to any other remedy to which they may be entitled
at law or equity.
10.7 Other Stockholders' Agreements. None of the parties hereto shall
------------------------------
enter into any stockholder agreement or other arrangement of any kind with any
Person with respect to any Securities which is inconsistent with the provisions
of this Agreement.
10.8 Amendments. This Agreement may be amended only by a written
----------
instrument signed by all of the parties hereto.
10.9 Successors, Assigns and Transferees. The provisions of this
-----------------------------------
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto, their Permitted Transferees and their respective successors and assigns,
provided that (i) no Stockholder may assign to any Permitted Transferee any of
--------
its rights hereunder other than in connection with a Transfer to such Permitted
Transferee of Securities in accordance with the provisions of this Agreement and
(ii) Blackstone
23
may assign all or any portion of its rights and obligations hereunder to any
transferee of its Securities (other than its rights pursuant to Section 3) and
(iii) the Company may not assign its rights hereunder without the prior consent
of each of the Stockholders.
10.10 Notices. All notices, requests and demands to or upon the
-------
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered by hand, or when delivered by a
recognized courier or, in the case of telecopy notice, when received, addressed
as follows to the parties hereto, or to such other address as may be hereafter
notified by the respective parties hereto:
if to the Company:
000 Xxxx Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx
Facsimile: (000) 000-0000
with a copy to:
Xxxxx, Xxxxx & Xxxxx
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Attention: Xxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
if to Blackstone
c/o The Blackstone Group
000 Xxxx Xxxxxx
00/xx/ Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxx
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxx, Esq.
Facsimile: (000) 000-0000
24
if to TCW
TCW/Crescent Mezzanine, LLC
00000 Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxx
Facsimile: (000) 000-0000
with a copy to:
O'Melveny & Xxxxx LLP
000 Xxxxx Xxxx Xxxxxx
Xxx Xxxxxxx, XX 00000-0000
Attention: Xxxxxxx Xxxxxxx
Facsimile: (000) 000-0000
10.11 Integration. This Agreement, the Investment Agreement, the
-----------
Registration Rights Agreement, the Certificates of Designations of the Series A-
I Preferred and Series A-2 Preferred Stock of the Company and the Transaction
Fee Agreement, dated as July 12, 2000 by and between the Company and Blackstone
Management Partners III L.L.C. contain the entire understanding of the parties
with respect to the subject matter hereof and thereof. There are no agreements,
representations, warranties, covenants or undertakings with respect to the
subject matter hereof and thereof other than those expressly set forth herein
and therein. This Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter.
10.12 Consent of Blackstone. Except as expressly set forth otherwise
---------------------
herein, whenever the "consent of Blackstone" or words of similar import are
used, such consent may be obtained by means of the written consent of any
Blackstone designee to the Board of Directors, or by the written consent of any
authorized representative of any of the entities included in the definition of
"Blackstone" herein.
10.13 Severability. Should any part of this Agreement for any reason
------------
be declared invalid, such decision shall not affect the validity of any
remaining portion, which remaining portion shall remain in full force and effect
as if this Agreement had been executed with the invalid portion thereof
eliminated, and it is hereby declared the intention of the parties hereto that
they would have executed the remaining portion of this Agreement without
including therein any such part or parts which may, for any reason, be hereafter
declared invalid.
10.14 Counterparts. This Agreement may be executed in two or more
------------
counterparts, and by different parties on separate counterparts each of which
shall be deemed an original, but all of which shall constitute one and the same
instrument.
25
10.15 Governing Law. This Agreement shall be governed by and
-------------
construed and enforced in accordance with the laws of the State of New York.
10.16 Jurisdiction. The courts of the State of New York in New York
------------
County and the United States District Court for the Southern District of New
York shall have jurisdiction over the parties with respect to any dispute or
controversy between them arising under or in connection with this Agreement and,
by execution and delivery of this Agreement, (i) each of the parties to this
Agreement submits to the exclusive jurisdiction of those courts, including the
in personam and subject matter jurisdiction of those courts, waives any
-- --------
objections to such jurisdiction on the grounds of venue or forum non conveniens,
----- --- ----------
the absence of in personam or subject matter jurisdiction and any similar
-- --------
grounds, (ii) consents to service of process by mail (in accordance with Section
10.11) or any other manner permitted by law, and (iii) irrevocably agrees to be
bound by any judgment rendered thereby in connection with this Agreement.
10.17 Mutual Waiver of Jury Trial. THE PARTIES HERETO WAIVE ALL RIGHT
---------------------------
TO TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO ENFORCE OR DEFEND
ANY RIGHTS OR REMEDIES UNDER THIS AGREEMENT.
26
IN WITNESS WHEREOF, each of the undersigned has executed this
Agreement or caused this Agreement to be executed on its behalf as of the date
first written above.
iPCS, INC.
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President and Chief Executive Officer
GENESEO COMMUNICATIONS, INC.
By: /s/ Xxxx X. Xxxxxxxx
--------------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: President and Chief Executive Officer
CAMBRIDGE TELCOM, INC.
By: /s/ Xxxx X. Xxxxxxxx
--------------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: President and Chief Executive Officer
S-1
BLACKSTONE iPCS CAPITAL PARTNERS L.P.
By: Blackstone Media Management Associates III,
L.L.C., as general partner
By: /s/ Xxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Member
BLACKSTONE/iPCS L.L.C.
By: Member
By: /s/ Xxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Member
BLACKSTONE COMMUNICATIONS PARTNERS I L.P.
By: Blackstone Communications Management
Associates I L.L.C., as general partner
By: /s/ Xxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Member
X-0
XXX/XXXXXXXX XXXXXXXXX PARTNERS II, L.P.
TCW/CRESCENT MEZZANINE TRUST II
By: TCW/Crescent Mezzanine II, L.P.
its general partner or managing owner
By: TCW/Crescent Mezzanine, L.L.C.
its general partner
By: /s/ Xxxx X. Xxxxxxx
---------------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Managing Director
TCW SHARED OPPORTUNITY FUND II, L.P.
By: TCW Investment Management Company
Its Investment Manager
By: /s/ Xxxx X. Xxxxxxx
---------------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Managing Director
By: /s/ Xxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Managing Director
SHARED OPPORTUNITY IIB, L.L.C.
By: TCW Asset Management Company
as its Investment Adviser
By: /s/ Xxxx X. Xxxxxxx
---------------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Managing Director
By: /s/ Xxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Managing Director
S-3
TCW SHARED OPPORTUNITY FUND III, L.P.
By: TCW Asset Management Company
Its Investment Adviser
By: /s/ Xxxx X. Xxxxxxx
---------------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Managing Director
By: /s/ Xxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Managing Director
TCW LEVERAGED INCOME TRUST, L.P.
By: TCW Advisers (Bermuda), Ltd.
as its General Partner
By: /s/ Xxxx X. Xxxxxxxx
--------------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Managing Director
By: TCW Investment Management Company
as Investment Adviser
By: /s/ Xxxx X. Xxxxxxx
---------------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Managing Director
S-4
TCW LEVERAGED INCOME TRUST II, L.P.
By: TCW (XXXX XX), L.P.
as its General Partner
By: TCW Advisers (Bermuda), Ltd.
its General Partner
By: /s/ Xxxx X. Xxxxxxxx
----------------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Managing Director
By: TCW Investment Management Company
as Investment Adviser
By: /s/ Xxxx X. Xxxxxxx
----------------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Managing Director
S-5
TCW LEVERAGED INCOME TRUST IV, L.P.
By: TCW Asset Management Company
As its Investment Adviser
By: /s/ Xxxx X. Xxxxxxx
----------------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Managing Director
By: /s/ Xxxx X. Xxxxxxxx
----------------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Managing Director
By: TCW (XXXX XX), L.L.C.
As General Partner
By: TCW Asset Management Company
As its Managing Member
By: /s/ Xxxx X. Xxxxxxx
----------------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Managing Director
By: /s/ Xxxx X. Xxxxxxxx
----------------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Managing Director
S-6
