Exhibit 10.1.1
--------------------------------------------------------------------------------
STOCKHOLDERS' AGREEMENT
by and among
AT&T WIRELESS PCS INC.,
CASH EQUITY INVESTORS,
MANAGEMENT STOCKHOLDERS,
and
TRITEL, INC.
dated as of January 7, 1999
--------------------------------------------------------------------------------
TABLE OF CONTENTS
-----------------
Page
----
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......................................................15
3.3 Initial Directors..................................................................16
3.4 Compensation and Reimbursement.....................................................16
3.5 Business of the Company............................................................16
3.6 Required Votes.....................................................................16
3.7 Transactions between the Company and the Stockholders or their Affiliates..........18
3.8 Board Committees...................................................................18
3.9 Voting Agreements and Voting Trusts................................................18
3.10 Additional Capital Contributions...................................................18
3.11 Board Materials....................................................................19
4. Transfers of Shares........................................................................19
4.1 General............................................................................19
4.2 Right of First Offer...............................................................22
4.3 Rights of Inclusion................................................................23
4.4 Right of First Negotiation.........................................................25
4.5 Additional Conditions to Permitted Transfers.......................................26
4.6 Representations and Warranties.....................................................27
4.7 Stop-Transfer......................................................................27
5. Registration Rights........................................................................27
6. Disqualifying Transactions.................................................................40
6.1 Company Conversion Rights..........................................................40
6.2 Joint Marketing Right..............................................................41
7. Additional Rights and Covenants............................................................42
7.1 Financial Statements...............................................................42
7.2 Purchase Right.....................................................................42
7.3 Access.............................................................................43
7.4 Merger, Sale or Liquidation of the Company.........................................44
7.5 Wholly-Owned Subsidiaries..........................................................45
7.6 Amendments of the Restated Certificate and By-Laws.................................45
7.7 Confidentiality....................................................................45
7.8 IPO Date...........................................................................46
7.9 AT&T Retained Licenses.............................................................46
7.10 Regulatory Cooperation.............................................................46
7.11 Permitted Transactions.............................................................47
7.12 Covenant of Holders of Class C Common Stock........................................47
7.13 Additional Florida POPs............................................................48
8. Operating Arrangements.....................................................................48
8.1 Construction of Company Systems....................................................48
8.2 Service Features...................................................................49
8.3 Quality Standards..................................................................49
8.4 No Change of Business..............................................................49
8.5 Preferred Provider.................................................................50
8.6 Exclusivity........................................................................51
8.7 Other Business; Duties; Etc........................................................52
8.8 Acknowledgments and Termination of Exclusivity.....................................53
8.9 Equipment, Discounts and Roaming...................................................53
8.10 Intentionally Omitted..............................................................54
8.11 Resale Agreements..................................................................54
8.12 Non-Solicitation...................................................................55
8.13 Co-Location........................................................................55
8.14 Billing............................................................................55
9. After-Acquired Shares; Recapitalization....................................................55
9.1 After Acquired Shares; Recapitalization............................................55
9.2 Amendment of Restated Certificate..................................................56
10. Share Certificates.........................................................................56
10.1 Restrictive Endorsements; Replacement Certificates.................................56
11. Equitable Relief...........................................................................57
12. Miscellaneous..............................................................................57
12.1 Notices............................................................................57
12.2 Entire Agreement; Amendment; Consents..............................................58
12.3 Term...............................................................................59
12.4 Survival...........................................................................60
12.5 Waiver.............................................................................61
12.6 Obligations Several................................................................61
12.7 Governing Law......................................................................61
12.8 Dispute Resolution.61
12.9 Benefit and Binding Effect; Severability...........................................64
12.10 Amendment of By-Laws...............................................................64
12.11 Authorized Agent of AT&T PCS.......................................................64
12.12 FCC Approval.......................................................................64
12.13 Expenses...........................................................................64
12.14 Attorneys' Fees....................................................................64
12.15 Headings...........................................................................65
12.16 Counterparts.......................................................................65
Schedules
Schedule I Cash Equity Investors
Schedule II Management Stockholders
Schedule III Equity Capitalization
Schedule IV Core Features
Schedule V Minimum Build-Out Plan
Schedule VI PCS Territory
Schedule VII Quality and Reporting 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
--------------------------------------------------------------------------------
STOCKHOLDERS' AGREEMENT
-----------------------
STOCKHOLDERS' AGREEMENT, dated as of January 7, 1999 (this
"Agreement"), by and among AT&T WIRELESS PCS INC., a Delaware corporation
(together with its Affiliated Successors, "AT&T PCS"), TWR CELLULAR, INC., a
Maryland corporation (together with its Affiliated Successors, "TWR Cellular"),
the investors listed on Schedule I) (individually, each a "Cash Equity Investor"
and, collectively, with any of its Affiliated Successors, the "Cash Equity
Investors"), MERCURY PCS, LLC, a Mississippi limited liability company ("Mercury
I"), Mercury PCS II, LLC, a Mississippi limited liability ("Mercury II"), the
individuals listed on Schedule II (individually, each a "Management Stockholder"
and, collectively, the "Management Stockholders"), and TRITEL, 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), or with
the consent of the Board of Directors (as hereinafter defined) are issued shares
of Company Stock and are required as a condition of such issuance to become a
party to this Agreement, are sometimes referred to herein, individually, as a
"Stockholder" and, collectively, as the "Stockholders."
RECITALS
--------
WHEREAS, the authorized capital stock of the Company consists of: (a)
3,040,009 shares of common stock, par value $0.01 per share ("Common Stock"),
including (i) 1,500,000 shares of Class A Voting Common Stock, par value $0.01
per share ("Class A Voting Common Stock"), of which 35,518.76 shares are issued
and outstanding, (ii) 1,500,000 shares of Class B Non-Voting Common Stock, par
value $0.01 per share ("Class B Non-Voting Common Stock") of which no shares are
issued and outstanding (iii) 10,000 shares of Class C Common Stock, par value
$.01 per share ("Class C Common Stock"), of which 5,176.68 shares are issued and
outstanding, (iv) 30,000 shares of Class D Common Stock, par value $.01 per
share ("Class D Common Stock"), of which no shares are issued and outstanding,
and (v) nine shares designated as Voting Preference Stock, par value $0.01 per
share ("Voting Preference Stock"), all of which shares are issued and
outstanding; and (b) 1,500,000 shares of Preferred Stock, par value $0.01 per
share ("Preferred Stock"), including (i) 200,000 shares designated Series A
Convertible Preferred Stock, par value $0.01 per share ("Series A Preferred
Stock"), of which 90,668.33 shares are issued and outstanding, (ii) 300,000
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) 500,000
shares designated Series C Convertible Preferred Stock, par value $0.01 per
share ("Series C Preferred Stock"), of which 184,233.35 shares are issued and
outstanding, and (iv) 100,000 shares designated Series D Convertible Preferred
Stock, par value $0.01 per share ("Series D Preferred Stock"), of which
46,374.10 shares are issued and outstanding; and
WHEREAS, the shares of Class A Voting Common Stock and Series C
Preferred Stock (on an as converted basis) as a class represent 49.9% of the
voting power of the Company and the shares of Voting Preference Stock as a class
represent 50.1% of the voting power of the Company; and
WHEREAS, each Stockholder is the registered owner of the respective
shares of Class A Voting Common Stock, Class B Non-Voting Common Stock, Series A
Preferred Stock, Series C Preferred Stock, Series D Preferred Stock, Class C
Common Stock, Class D Common Stock and Voting Preference 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.
"Adopted Service Features" shall mean the Core Service Features and
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).
"Affiliate" shall mean, with respect to any Person other than a natural
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,
however, for purposes of Section 8.6, "Affiliate" shall not include (x) Persons
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 Toronto Dominion Bank. 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 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 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).
2
"AT&T Licensee" shall mean any Person that owns FCC licenses to provide
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.
"AT&T Contributed Licenses" shall have the meaning assigned to such
term in the Securities Purchase Agreement.
"AT&T Corp." shall mean AT&T Corp., a Delaware corporation.
"AT&T Retained Licenses" shall have the meaning assigned to such term
in the Securities Purchase Agreement.
"AWS" shall mean AT&T Wireless Services, Inc., a Delaware corporation.
"Beneficially Own" shall have the meaning set forth in Rule 13d-3 of
the Exchange Act.
"Board of Directors" shall mean the Board of Directors of the Company.
"BTA" shall mean a geographic area established by the Rand XxXxxxx 1992
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
operating systems to provide Company Communications Services on frequencies
licensed to the Company for Commercial Mobile Radio Services pursuant to the
AT&T Contributed Licenses, the Mercury Licenses, PCS Licenses acquired pursuant
to the Option Agreement, Permitted Florida MSAs 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
3
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.
"Cash Equity Loan" shall have the meaning assigned to such term in the
Securities Purchase Agreement.
"Cellular System" shall mean a cellular mobile radio telephone system
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 MH to 849 MH and the 869 MH3 to 894 MH3 frequencies
pursuant to a License therefor issued by the FCC.
"Cellular Territory" shall mean the geographic area in respect of which
the Company acquires Permitted Cellular Licenses or Permitted Florida RSAs.
"Class A Voting Common Stock" shall have the meaning set forth in the
first recital.
"Class B Non-Voting Common Stock" shall have the meaning set forth in
the first recital.
"Class C Common Stock" shall have the meaning set forth in the first
recital.
"Class D Common Stock" shall have the meaning set forth in the first
recital.
"Commission" shall mean the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.
"Common Stock" shall have the meaning set forth in the first recital.
"Company" shall have the meaning set forth in the preamble.
"Company Asset Sale" shall have the meaning set forth in Section
7.4(a).
"Company Communications Services" shall mean mobile wireless
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.
4
"Company Merger" shall have the meaning set forth in Section 7.4(a).
"Company Sale Notice" shall have the meaning set forth in Section
6.2(a).
"Company Stock" shall mean the Series A Preferred Stock, the Series C
Preferred Stock, the Series D Preferred Stock, the Voting Preference Stock, the
Class A Voting Common Stock, Class B Non-Voting Common Stock, the Class C Common
Stock and the Class D Common Stock.
"Company Systems" shall mean the systems owned and operated by the
Company and its Subsidiaries to provide Company Communications Services in the
Territory.
"Confidential Information" shall have the meaning assigned to such term
in Section 7.7(a).
"Core Service Features" shall mean the service features set forth on
Schedule IV.
"CPR" shall have the meaning set forth in Section 12.8(c).
"Demand Notice" shall have the meaning set forth in Section 5(a)(i).
"Demand Registration" shall have the meaning set forth in Section
5(a)(i).
"Demanding Stockholders" shall have the meaning set forth in Section
5(a)(i).
"Dispute" shall have the meaning set forth in Section 12.8(a).
"Disqualifying Transaction" shall mean a merger, consolidation, asset
acquisition or disposition, or other business combination involving AT&T Corp.
(or its Affiliates) and another Person, which other Person (together with its
Affiliates but before giving effect to such merger, consolidation, asset
acquisition or disposition or other business combination) (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 (excluding for purposes of this clause (c) FCC
Licenses to offer enhanced special mobile radio 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 have the meaning assigned to such term in
the Securities Purchase Agreement.
"Equity Securities" shall have the meaning set forth in Section 7.2(a).
5
"Escrowed Shares" shall have the meaning set forth in the Securities
Purchase Agreement.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"FAA" shall have the meaning set forth in Section 12.8(e).
"FCC" shall mean the Federal Communications Commission or similar
regulatory authority established in replacement thereof.
"FCC Determination Date" shall mean such date, or such reasonable
period of time as determined by the FCC in any regulation, rule, order or
policy, as of or after which the continued ownership of the Class C Common Stock
by a Stockholder which has suffered a Transfer Event will cause the Company to
compromise or forfeit any Material Benefits.
"Federal Arbitration Act" shall have the meaning set forth in Section
12.8(e).
"Final Order" shall mean an action or decision that has been granted by
the 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).
"First Offer Period" shall have the meaning set forth in Section
4.2(b).
"First Offeree" shall have the meaning set forth in Section 4.2(a).
"Governmental Authority" means a Federal, state or local court,
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).
"Inclusion Event Offeree" shall have the meaning set forth in Section
4.3(a).
"Inclusion Event Purchaser" shall have the meaning set forth in Section
4.3(a).
"Inclusion Notice" shall have the meaning set forth in Section 4.3(a).
"Inclusion Stock" shall have the meaning set forth in Section 4.3(a).
"Indemnified Party" shall have the meaning set forth in Section
5(e)(v).
6
"Indemnified Stockholder" shall have the meaning set forth in Section
5(e)(i).
"Indemnifying Party" shall have the meaning set forth in Section
5(e)(v).
"Immediate Family" shall mean an individual's spouse, children
(including adopted children), grandchildren, parents, grandparents, and
siblings.
"IPO Date" shall mean the first date on which (a) the Class A Voting
Common Stock shall 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 Statement(s) equals or exceeds
$20 million, and (c) the Class A Voting 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).
"Joint Marketing Period" shall have the meaning set forth in Section
6.2(a).
"Kentucky RSAs" shall mean the Kentucky-4, Kentucky-5, Kentucky-6 and
Kentucky-8 Rural Service Areas.
"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, 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, charge, security interest, right of first refusal or right of others
therein or encumbrance of any nature whatsoever in respect of such asset.
"Majority in Interest" shall mean, with respect to the Cash Equity
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
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 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.
7
"Management Agreement" shall mean the Management Agreement, dated of
even date herewith, between the Company and Tritel Management, LLC, as the same
may be amended, modified or supplemented in accordance with the terms thereof.
"Management Stockholder" shall have the meaning set forth in the
preamble.
"Xxxxxx" shall mean X.X. Xxxxxx, Xx.
"Material Benefits" shall have the meaning set forth in Section 7.12.
"Mercury Investor" shall have the meaning set forth in the preamble.
"Mercury I" shall have the meaning set forth in the preamble.
"Mercury II" shall have the meaning set forth in the preamble.
"Mercury Licenses" shall have the meaning assigned to such term in the
Securities Purchase Agreement.
"Minimum Build-Out Plan" shall mean the build-out plan for the
Company's PCS Systems set forth on Schedule V hereto.
"Model Procedures" shall have the meaning set forth in Section 12.8(c).
"Xxxxxxx" shall mean Xxxxxxx X. Xxxxxxx XX.
"MTA" shall mean a geographic area established by the Rand XxXxxxx 1992
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.
"NASDAQ" shall mean the National Association of Securities Dealers'
Automated Quotation System.
"Network Membership License Agreement" shall mean the Network
Membership License Agreement between the Company 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).
"Offered Shares" shall have the meaning set forth in Section 4.2(a).
"Overlap Territory" shall mean that portion of the Territory in which a
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, before
giving effect to such transaction, an FCC License to offer Commercial Mobile
Radio Services.
8
"Option Agreement" has the meaning assigned to such term in the
Securities Purchase Agreement.
"PCS System" shall mean a mobile communication system constructed and
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 hereto as such
territory may be expanded in accordance with Section 7.13(a).
"Permitted Cellular License" shall have the meaning assigned to such
term in Section 7.11(b).
"Permitted Consolidation Transaction" shall have the meaning set forth
in Section 7.11(a).
"Permitted Florida MSAs" shall have the meaning set forth in Section
7.13(b).
"Permitted Merger Participant" shall mean an AT&T Licensee (i) that
owns 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
Louisville, KY, Knoxville, TN, Memphis, TN, Little Rock, AK, Detroit, MI, St.
Louis, MO, Atlanta, GA, Boston, MA, Columbus, OH, Baltimore/Washington,
Richmond, VA, Charlotte, NC 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 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 AT&T PCS' original equity interest therein.
"Permitted Non-CMRS License" shall have the meaning set forth in
Section 7.11(c).
"Person" shall mean an individual, corporation, partnership, limited
liability company, association, joint stock company, Governmental Authority,
business trust or other legal entity.
"Piggyback Notice" shall have the meaning set forth in Section 5(b)(i).
"Piggyback Registration" shall have the meaning set forth in Section
5(b)(i).
"POPs" shall mean, with respect to any licensed area, the residents of
such 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
(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 within the entire
United States 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 Transferee if (a) a material portion of such
Person's business is also the business of
9
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).
"Purchase Notice" shall have the meaning set forth in Section 4.2(b).
"Purchase Right" shall have the meaning set forth in Section 7.2(a).
"Qualified Holder" shall mean (a) any Stockholder or group of
Stockholders that Beneficially Owns (x) for purposes of Sections 7.3 and 7.8,
greater than 33 (% percent of the outstanding shares of Common Stock on a fully
diluted basis (as appropriately adjusted for stock splits, stock dividends and
the like), (y) for purposes of Section 5, shares of Class A Voting Common Stock
reasonably expected to, upon sale, result in aggregate gross proceeds of at
least $25 million, or (b) AT&T PCS and TWR Cellular for so long as AT&T PCS and
TWR Cellular Beneficially Own in the aggregate, greater than two-thirds of the
initial issuance to AT&T PCS and TWR Cellular of shares of Series A Preferred
Stock (as appropriately adjusted for stock splits, stock dividends and the
like).
"Registrable Securities" shall mean (a) the Class A Voting Common Stock
now owned or hereafter acquired by any Stockholder or issuable upon conversion
or exchange of any Equity Security, and (b) all Class A Voting 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 Class A Voting Common Stock but with
respect to any Class A Voting Common Stock, only until such time as such Class A
Voting 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 Class A Voting Common Stock without a legend restricting further
transfer shall have been delivered by the Company, and subsequent public
distribution of such Class A Voting 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).
"Registration Expenses" shall have the meaning set forth in Section
5(g).
"Registration Statement" shall have the meaning set forth in Section
5(d)(i).
"Regulatory Problem" shall have the meaning assigned to such term in
the Securities Purchase Agreement.
"Related Agreements" shall mean each of the Network Membership License
Agreement, the Management Agreement, the Employment Agreements, the Resale
Agreement, the Option Agreement, the Old Mercury Note as defined in the
Securities Purchase Agreement (and the pledge agreement and other documents
referred to therein) and the Roaming Agreement.
10
"Representative" shall have the meaning set forth in Section 7.7(a).
"Resale Agreement" shall mean the Resale Agreement between the Company
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
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 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 between the Company 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
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).
"Sale Offer" shall have the meaning set forth in Section 7.4(d).
"Sale Transaction" shall have the meaning set forth in Section 7.4(c).
"SBIC" shall have the meaning assigned to such term in the Securities
Purchase Agreement.
"SBIC Holder" shall have the meaning assigned to such term in the
Securities Purchase Agreement.
"Section 6.2 Period" shall have the meaning set forth in Section 6.2.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Securities Purchase Agreement" shall mean the Securities Purchase
Agreement, dated as of May 20, 1998, among the Company, Mercury I, Mercury II,
and the other parties thereto.
"Seller" shall have the meaning set forth in Section 4.2(a).
"Selling Stockholder" shall have the meaning set forth in Section
4.3(a).
"Series A Preferred Directors" shall have the meaning set forth in
Section 3.1(c).
"Series A Preferred Stock" shall have the meaning set forth in the
first recital.
"Series B Preferred Stock" shall have the meaning set forth in the
first recital.
11
"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
the Atlanta, GA 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.
"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.
"Xxxxxxxx" shall mean Xxxxx X. Xxxxxxxx, Xx.
"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.
"TWR Cellular" shall have the meaning set forth in the preamble.
12
"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.
"Transfer Event" shall have the meaning set forth in Section 7.12.
"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 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.
"Voting Preference Stock" shall have the meaning set forth in the first
recital.
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
thirteen (13) 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 Class A Voting Common Stock and Voting Preference
Stock Beneficially 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). three (3) individuals elected by holders of a Majority in
Interest of the Class A Voting Common Stock Beneficially Owned by the Cash
Equity Investors, in their sole discretion;
13
(b) four (4) individuals elected by the holders of the Voting
Preference Stock so long as any such individual elected by such holders is an
officer of the Company, each of whom, in accordance with the Restated
Certificate, shall have that number of votes on all matters requiring the vote
or consent of the Board of Directors as shall be equal to a fraction, the
numerator of which is two (2) and the denominator of which is the number of such
individuals elected to the Board of Directors pursuant to this Section 3.1(b)
and then serving thereon;
(c) two (2) individuals (the "Series A Preferred Directors")
elected by AT&T PCS in its capacity as holder of Series A Preferred Stock so
long as it and TWR Cellular have the right to elect two (2) directors in
accordance with the Restated Certificate; and
(d) (i) until the date that holders of shares of Voting
Preference Stock shall vote as a class with holders of Class A Voting Common
Stock, (x) one (1) individual selected by the holders of the Voting Preference
Stock which individual shall be reasonably acceptable to holders of a Majority
in Interest of the Class A Voting Stock Beneficially Owned by the Cash Equity
Investors, and (y) three (3) individuals selected by the holders of the Voting
Preference Stock, which three (3) individuals shall be reasonably acceptable to
holders of a Majority in Interest of the Class A Voting Common Stock
Beneficially Owned by the Cash Equity Investors and AT&T PCS, in the reasonable
discretion of such Cash Equity Investors, on the one hand, and AT&T PCS, on the
other hand, each of whom, in accordance with the Restated Certificate, shall
have that number of votes on all matters requiring the vote or consent of the
Board of Directors as shall be equal to a fraction, the numerator of which is
three (3) and the denominator of which is the number of such individuals elected
to the Board of Directors pursuant to this Section 3.1(d)(i)(y) and then serving
thereon, and (ii) effective on the date that holders of shares of Voting
Preference Stock shall vote as a class with holders of Class A Voting Common
Stock, (x) one (1) individual selected by holders of a Majority in Interest of
the Common Stock held by the Cash Equity Investors, and (y) three (3)
individuals selected by holders of a Majority in Interest of the Common Stock
held by the Cash Equity Investors, which three (3) individuals shall be
acceptable to Xxxxxxx, Xxxxxx and Xxxxxxxx (in each case so long as he is an
officer of the Company), and AT&T PCS, in the discretion of Xxxxxxx, Xxxxxx and
Xxxxxxxx on the one hand, and AT&T PCS, on the other hand.
In the event that Xxxxxxx, Xxxxxx or Xxxxxxxx shall cease to be an officer of
the Company, or the Management Agreement shall cease to be in full force and
effect, such individuals shall resign (or the holders of the Voting Preference
Stock shall remove him) from the Board of Directors and the holders of the
Voting Preference Stock shall select a replacement or replacements 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 and TWR Cellular
shall cease to be entitled to elect the Series A Preferred Directors, such
directors 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 that any Cash Equity
Investor that has an Unfunded Commitment shall fail to satisfy any such portion
of its 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 such Cash Equity Investor or another Cash Equity Investor within
thirty-five (35) days thereof, then, until such failure is cured, the member of
the Board of Directors who is designated by, or Affiliated with, such Cash
Equity Investor (whether as an
14
employee, partner, member, stockholder or otherwise) shall resign from the Board
of Directors and the Person(s) who designated such member shall select an
individual acceptable to AT&T PCS in its sole discretion.
Any nomination or designation of directors and the acceptance
thereof pursuant to Section 3.1 shall be evidenced in writing.
Each Cash Equity Investor shall have the right, so long as it
Beneficially Owns shares of Series C Preferred Stock with an aggregate purchase
price of at least $10,000,000 to designate one (1) person who shall be entitled
to attend the Board of Directors Meeting 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 of the Board of Directors materials
and shall also have the right to meet quarterly with the management of the
Company to consult on the business affairs of the Company. In addition, so long
as AT&T PCS and TWR Cellular have the right to designate two directors in
accordance with the Restated Certificate, up to two (2) AT&T PCS 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.
3.2 Removal; Filling of Vacancies. Except as set forth in Section
3.1, each Stockholder agrees it will not vote any shares of Voting Preference
Stock and/or Class A Voting Common Stock Beneficially Owned by such Stockholder,
and shall not permit any Affiliated Successor of such Stockholder holding any
Voting Preference Stock and/or Class A Voting 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 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 member(s); provided, however,
that if a director designated pursuant to (A) Section 3.1(d)(i)(x) is replaced
by the holders of Voting Preference Stock, the individual designated by the
holders of the Voting Preference Stock to replace such director must be
acceptable to the Cash Equity Investors in accordance with the terms of Section
3.1(d)(i)(x), (B) Section 3.1(d)(i)(y) is replaced by the holders of Voting
Preference Stock, the individual designated by the holders of Voting Preference
Stock to replace such director must be acceptable to the Cash Equity Investors
and AT&T PCS in accordance with the terms of Section 3.1(d)(i)(y), (C) Section
3.1 (d)(ii)(y) is replaced by the holders of a Majority in Interest of Common
Stock held by the Cash Equity Investors, the individual designated by the
holders of a Majority in Interest of Common Stock held by the Cash Equity
Investors to replace such director must be acceptable to Xxxxxxx, Xxxxxx and
Xxxxxxxx and AT&T PCS in accordance with the terms of Section 3.1(d)(ii)(y), and
(D) Section 3.1(b) is replaced by the holders of the Voting Preference Stock,
the officer designated by the holders of the Voting Preference Stock to replace
such director must be acceptable to holders of a Majority in Interest of the
Class A Common Stock Beneficially Owned by the Cash Equity Investors and AT&T
PCS in the reasonable discretion of such Cash Equity Investors, on the one hand,
and AT&T PCS, on the other hand. Each of the Stockholders agrees to vote, and to
cause its Affiliated Successors to vote, its shares of Voting Preference Stock
and/or Class A Voting
15
Common Stock Beneficially Owned by such Stockholder or such Stockholder's
Affiliated Successor, or shall otherwise take any action as is necessary to
cause the election of any successor director designated by any Stockholder
pursuant to this Section 3.2. The holders of the Voting Preference Stock agree
that during the three (3) year period commencing on the date hereof they will
not (i) remove the individuals nominated by them pursuant to Sections
3.1(d)(i)(x) or 3.1(d)(i)(y), or (ii) nominate for election any individuals
other than the individuals initially selected by them and approved in accordance
with said Sections 3.1(d)(i)(x) or 3.1(d)(i)(y) (unless any such individual is
removed from the Board of Directors for cause), subject to the agreements of
such individuals to serve on the Board of Directors.
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(d)(i)(y) or
3.1(d)(ii)(y), as applicable) 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(d)(i)(y) or 3.1(d)(ii)(y) 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. (a) 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.
(b) None of the following transactions or actions shall be
entered into or taken by the Company, unless (i) voted for or consented to by
the vote of at least three (3) of the five (5) directors designated pursuant to
Sections 3.1(a) and (c) and four (4) of the six (6) votes cast by directors
designated pursuant to Sections 3.1(b) and (d).
(i) The sale, transfer, assignment or other disposition of any
material portion of the assets of the Company or any of its Subsidiaries
other than in the ordinary course of business;
16
(ii) The merger, combination or consolidation of the Company or
any of its Subsidiaries with or into any other entity, regardless of
whether the Company or any such Subsidiary is the surviving entity in any
such merger, combination or consolidation, the acquisition of any
businesses by the Corporation, the formation of any partnership or joint
venture involving the Company, or the liquidation, dissolution or winding
up of the Company or any of its Subsidiary;
(iii) Any offering or issuance of additional shares of Preferred
Stock, Voting Preference Stock or Common Stock of, or any other securities
or ownership interests in, the Company or any of its Subsidiaries,
including, without limitation, warrants, options or other rights
convertible or exchangeable into Preferred Stock, Voting Preference Stock
or Common Stock of, or other securities or ownership interests in, the
Company or any of its Subsidiaries except as contemplated by the Securities
Purchase Agreement or the declaration of any dividends thereon;
(iv) The repurchase by the Company of any Company Stock (other
than shares of Class A Voting Common Stock purchased from former employees
of the Company);
(v) The authorization or adoption of any amendment to the
Restated Certificate, Restated By-laws or any constituent document of the
Company or any of its Subsidiaries;
(vi) The hiring or termination of any executive officer of the
Company;
(vii) The approval of, or amendment to, any operating or capital
budget of the Company or any of its Subsidiaries;
(viii) The incurrence by the Company or any of its Subsidiaries,
whether directly or indirectly, of any indebtedness for borrowed money or
capital leases in any calendar quarter in excess of $1,000,000;
(ix) Any agreement or arrangement, written or oral, to pay any
director, officer, agent or employee of the Company or any of its
Subsidiaries $200,000 or more on an annual basis or any loan, lease,
contract or other transaction with any employee of the Company or any of
its Subsidiaries with an annual salary in excess of $200,000 or with any
director or officer of the Company or any member of any such Person's
Immediate Family;
(x) The making of, or commitment to make, any capital
expenditures involving a payment or liability in any one year of $1,000,000
or more in the aggregate by the Company or any of its Subsidiaries;
(xi) The initiation of any bankruptcy proceeding, dissolution or
liquidation of the Company or any of its Subsidiaries; and
(xii) The entering into any contract, agreement or understanding
to do any of the foregoing.
17
Notwithstanding the foregoing, any amendment, modification, waiver
or termination of the Management Agreement or the Employment Agreements shall
require the affirmative vote or consent of a majority of the Board of Directors
(excluding Messrs. Xxxxxxx, Xxxxxx and Xxxxxxxx).
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 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(d)(ii)(y) shall not be deemed to
have been designated by the Cash Equity Investors, AT&T PCS or the holders of
the Voting Preference Stock.
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, one of the Series A
Preferred Directors, one of the directors selected by the Cash Equity Investors
pursuant to Section 3.1(a), and Xxxxxxx (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) and such other directors as
shall be designated by the Board of Directors.
3.9 Voting Agreements and Voting Trusts. Except as disclosed on
Schedule X or referred to in this Section 3.9, 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, Voting Preference 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. Each of AT&T PCS and TWR Cellular 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. Each holder of Voting
Preference Stock shall vote all shares of Voting Preference Stock owned by him
in accordance with the vote of holders of a majority of the shares of Voting
Preference Stock.
3.10 Additional Capital Contributions. In accordance with the
Securities Purchase Agreement, the Cash Equity Investors shall contribute to the
capital of the Company an aggregate additional amount equal to their Unfunded
Commitments, such contributions to be made by 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
18
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 such 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.
3.11 Board Materials. Each Cash Equity Investor shall have the
right, so long as it continues to Beneficially Own the shares of Series C
Preferred Stock it Beneficially Owns on the date hereof, to request that the
Company send to it copies of all materials distributed to the Board of
Directors.
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
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, Class A Voting Common Stock and Class B Non Voting Common Stock
to an Affiliated Successor, (ii) a Stockholder may Transfer shares of Class A
Voting Common Stock and Class B Non Voting Common Stock to any other Person
after complying first with Section 4.2 and next with Section 4.3, if applicable,
(iii) a Cash Equity Investor may Transfer shares of Series C Preferred Stock,
Class A Voting Common Stock and Class B Non Voting Common Stock to another Cash
Equity Investor, (iv) one or more Cash Equity Investors may transfer up to 1,000
shares (in the aggregate for all Cash Equity Investors) of Series C Preferred
Stock to the Management Stockholders, (v) a Management Stockholder may Transfer
shares of Class A Voting Common Stock to the Company, or (vi) Mercury I and
Mercury II may Transfer shares of Company Stock to Mercury Investors who become
Mercury Investor Indemnitors (as defined in the Securities Purchase Agreement)
in accordance with Section 6.10(b) of the Securities Purchase Agreement.
(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, Class A Voting Common Stock or Class B Non Voting
Common Stock Beneficially Owned by such Stockholder as of the date hereof or
which may hereafter be acquired by such Stockholder except that (i) a Cash
Equity Investor may Transfer shares of Class A Voting Common Stock and Class B
Non Voting Common Stock to another Cash Equity Investor, (ii) Mercury I and
Mercury II may Transfer shares of Company Stock to Mercury Investors who become
Mercury Investor Indemnitors (as defined in the Securities Purchase Agreement)
in accordance with Section 6.10(b) of the Securities Purchase Agreement, and
(iii) a Stockholder may Transfer (x) shares of Series D Preferred Stock, Class A
Voting Common Stock and Class B Non Voting Common Stock to an Affiliated
Successor, and (y) shares of Class A Voting Common Stock and Class B Non Voting
Common Stock after complying first with Section 4.2 and next with Section
19
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 Class A Common Stock
(1) 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, (2) pursuant to Rule 144, or (3) 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).
Notwithstanding the foregoing, in the event that after the IPO Date any shares
of Series C Preferred Stock shall continue to be outstanding, such outstanding
shares of Series C Preferred Stock shall be subject to the restrictions on
Transfer contained in this Article 4 that are then applicable to shares of
Common Stock Beneficially Owned by any Cash Equity Investor, as such
restrictions may change from time to time in accordance with this Article 4.
(c) Notwithstanding anything to the contrary contained in
Sections 4.1(a) or (b), prior to the (i) third anniversary of the date hereof,
each Stockholder agrees that it will not Transfer any shares of Series C
Preferred Stock, Series D 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,
except that (v) Mercury I and Mercury II may Transfer shares of Company Stock to
Mercury Investors who become Mercury Investor Indemnitors (as defined in the
Securities Purchase Agreement) in accordance with Section 6.10(b) of the
Securities Purchase Agreement, (w) a Stockholder may Transfer shares of Series C
Preferred Stock, Series D Preferred Stock, Class A Voting Common Stock and Class
B Non Voting Common Stock to an Affiliated Successor, (x) a Cash Equity Investor
may Transfer shares of Series C Preferred Stock, Class A Voting Common Stock and
Class B Non Voting Common Stock to another Cash Equity Investor, (y) one or more
Cash Equity Investors may transfer up to 1,000 shares (in the aggregate for all
Cash Equity Investors) of Series C Preferred Stock to the Management
Stockholders, or (z) a Management Stockholder may Transfer shares of Class A
Voting Common Stock to the Company, and (ii) fifth anniversary of the date
hereof, each Management Stockholder agrees that it will not Transfer any shares
of Class A Voting Common Stock Beneficially Owned by it as of the date hereof or
which may hereafter be acquired by it to any Person; provided, however, that (x)
on or after the later to occur of (I) the third anniversary of the date hereof,
and (II) the IPO Date, a Management Stockholder may Transfer up to 25% of the
shares of Class A Voting Common Stock held by such Management Stockholder on the
date hereof, plus any shares of Series C Preferred Stock purchased from a Cash
Equity Investor which shares may be Transferred notwithstanding the foregoing,
and (y) in the event the Management Agreement is terminated on or after the
later to occur of (I) the date that the Management Stockholders shall have
performed all of their obligations pursuant to Section 5(e) of the Management
Agreement, and (II) the third anniversary of the date hereof, a Management
Stockholder may Transfer all shares of Class A Voting Common Stock held by such
Management Stockholder free of any restrictions imposed on any such Transfer by
this Section 4.1(c). In addition, notwithstanding anything to the contrary
contained herein, the Management Stockholders shall not Transfer any shares of
Class A Voting Common Stock that shall not have ceased to be subject to
repurchase in accordance with the terms of any Employment Agreement between the
Company and such Management Stockholder.
20
(d) Each of AT&T PCS and TWR Cellular 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' or TWR Cellular's 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, each of AT&T PCS and TWR Cellular agrees
that it will not Transfer any shares of Series A Preferred Stock held by it
except that AT&T PCS and TWR Cellular 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 and
TWR Cellular may Transfer its shares of Series A Preferred Stock free from any
restrictions on Transfer of such shares under this Agreement.
(e) (i) Each of the holders of Class C Common Stock and Voting
Preference Stock agrees that it shall not Transfer any of the shares of Class C
Common Stock or Voting Preference Stock Beneficially Owned by it other than
pursuant to Section 5(e) of the Management Agreement.
(ii) Prior to the IPO Date, each Stockholder agrees that it will
not Transfer any shares of Class D Common Stock held by it except (I) to an
Affiliated Successor, (II) that Cash Equity Investors may Transfer shares
of Class D Common Stock to another Cash Equity Investor, (III) that Mercury
I and Mercury II may Transfer Escrowed Shares in accordance with Section
6.10(b) of the Securities Purchase Agreement or (IV) to any other Person
after complying with Section 4.2; it being understood that on and after the
IPO Date, each Stockholder may Transfer its shares of Class D Common Stock
free from any restrictions under this Section 4.1(e) on Transfer of such
shares under this Agreement. Notwithstanding anything to the contrary
contained in this Agreement, each Stockholder agrees that it will not
effect a Transfer of shares of Class D Common Stock to any Person if after
giving effect to such Transfer, such Person, together with its Affiliates
would Beneficially Own 25% or more of all of the issued and outstanding
shares of Class D Common Stock.
(f) Notwithstanding anything to the contrary contained in this
Section 4, (i) Section 4.1 shall not apply (x) to the pledge by certain of the
Cash Equity Investors to the Company of shares of Series C Preferred Stock and
Common Stock as security for their Unfunded Commitments, or to the lender under
the Cash Equity Loan Documents as security for their obligations to such lender
pursuant to the Cash Equity Loan Documents, (y) any other Lien granted by a
Stockholder with respect to any shares of Series C Preferred Stock and Common
Stock as security for any obligation of such Stockholder to the Company or the
lender under the Cash Equity Loan Documents, or to any Transfer of shares of
Series C Preferred Stock or Common Stock in connection with the exercise by the
Company or the lender under the Cash Equity Loan Documents of their respective
remedies pursuant to any such pledge agreements, or (z) any pledge by Mercury II
to Mercury I of any shares of Series C Preferred Stock and Common Stock 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 Class C Preferred Stock or Common Stock without complying with the
terms of Section 4.3.
21
4.2 Right of First Offer.
(a) If a Stockholder (each a "Seller") desires to Transfer any or
all of its shares of Preferred Stock or Common Stock (other than Voting
Preference Stock and Class C Common Stock which may only be transferred in
accordance with Section 4.1(e)(i) (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 or TWR Cellular, 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, to 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 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
22
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; 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.
(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.
(e) The provisions of this Section 4.2 shall not be applicable to
the repurchase by the Company of any shares of Class A Voting Common Stock
repurchased by the Company from an employee of the Company in connection with
such individual's termination of employment.
4.3 Rights of Inclusion.
(a) No Stockholder shall, directly or indirectly, Transfer, in
any single transaction or series of related transactions to one or more Persons
who are not Affiliated Successors of such Stockholder (each such Person an
"Inclusion Event Purchaser") shares of any series or class of Company 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 any such class of Inclusion Stock (for purposes of this
Section 4.3, in the event that the Inclusion Stock is Series C Preferred Stock,
Series D Preferred Stock shall also be deemed to be Inclusion Stock and the
Series C Preferred Stock and Series D Preferred Stock shall be deemed to be one
class of Preferred Stock for purposes of this Section 4.3) 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 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
23
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 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.
24
(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, each Inclusion Event Offeree 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.
(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 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 or Series C Preferred Stock
following the IPO Date in a Transfer described in clause (y) of Section
4.1(b)(iii), 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.
25
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.
4.5 Additional Conditions to Permitted Transfers.
(a) As a condition to any Transfer to an Affiliated Successor or
any other Transfer 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. Any person to
which shares of Series C Preferred Stock are Transferred in connected with the
exercise of remedies by the lender under the Cash Equity Loan Documents, and any
direct or indirect transferee thereof, shall become a party to this Agreement,
be bound hereby and be subject to the rights and benefits of a Stockholder
provided herein.
(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 Sections 4.1 and 4.2, prior to the IPO Date, the
Cash Equity Investors, AT&T PCS and TWR Cellular may not Transfer shares of
Common Stock to
26
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, AT&T PCS or TWR Cellular is a Transfer of all of the shares of Common
Stock, as applicable, Beneficially Owned by it. Subject to Sections 4.1 and 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.
(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
27
4.1(d), each of (A) a Qualified Holder, and (B) Management Stockholders
that in the aggregate Beneficially Own at least 50.1% of the shares of
Class A Voting 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 sold by each Demanding Stockholder; provided,
however, that (x) the Company need not effect a Demand Registration unless
in the aggregate 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 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 Class A Voting 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 Class A Voting 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 (i) AT&T
PCS and/or (ii) Management Stockholders that in the aggregate Beneficially Own
at least 50.1% of the shares of Class A Voting 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,
28
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, 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 to 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 in such Registration), and (y) not allow any securities
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 Class A Voting Common Stock (or securities convertible into or
exchangeable for Class A Voting 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
29
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, 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 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 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
30
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 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;
(iii) 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
31
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;
(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
32
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 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
33
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 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
34
(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 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
35
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 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
36
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
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 discharged from any such liability, and no
37
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 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.
38
(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 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
39
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, TWR Cellular and any Section 4.9
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, TWR Cellular and each Section 4.9 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, TWR Cellular and each
Section 4.9 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, TWR Cellular and each Section 4.9
Transferee to exchange either (A) all or (B) a proportionate number 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 D Preferred Stock and Common Stock
Beneficially Owned by AT&T PCS and TWR Cellular on the date hereof (or
shares of Common Stock into which such shares of Series D Preferred Stock
shall have been converted) and that AT&T PCS, TWR Cellular or a Section 4.9
Transferee 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 and TWR Cellular for
all of such shares of Series D Preferred Stock and Common Stock that AT&T
PCS, TWR Cellular or such Section 4.9 Transferee then Beneficially Owns
(including any shares of 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;
40
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 4.9 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 the Subject
Market to any Person which is not an Affiliate of AT&T PCS, 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 ninety (90) days the Subject Market
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 the Subject Market is
also a "Subject Market" under the terms of any agreement between AT&T PCS and
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 the Subject Market shall be offered for sale
jointly with such Subject Market and all of the Territory included in the MTA
that includes such Subject Market. During the Joint Marketing Period, AT&T PCS
shall not sell the Subject Market other than in a transaction that includes the
Subject Market and the Territory included in the MTA that includes the Subject
Market, provided, however, that neither AT&T PCS nor the Company shall be
obligated to enter into a transaction for the Subject Market 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 the Subject Market upon the earlier of (x)
if the Company fails to make the joint marketing election with respect to the
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 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 the Subject
Market except during the Section 6.2 Period, (y) extend the obligation of AT&T
PCS set forth in this Section
41
6.2 beyond the expiration of the Section 6.2 Period or (z) apply to any sale,
transfer or assignment of the 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 (x) 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, and (y)
thirty (30) days after the end of each month 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. The Company
shall also provide to AT&T PCS and each Cash Equity Investor copies of the
Company's operating and capital expenditure budgets within five (5) days after
any such operating and capital expenditure budget is adopted by the Board of
Directors and shall promptly provide AT&T PCS or any Cash Equity Investor any
other additional financial information that AT&T PCS or any such Cash Equity
Investor reasonably requests.
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 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 Class A Voting Common
Stock then Beneficially Owned by such Stockholder divided by the aggregate
number of shares of Class A Voting Common Stock outstanding immediately prior to
such offer, issuance, sale or other disposition of Equity
42
Securities (including any shares of Class A Voting 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. In the case of an offer, issuance
sale or other disposition of Equity Securities issued as part of a unit with
other debt, equity or other securities of the Company, the right of a
Stockholder to acquire such Equity Security shall be conditioned upon such
Stockholder's acquisition of such debt, equity or other securities included in
such unit.
(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 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 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
43
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) 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
44
acceptance of such offer within thirty (30) days of the date 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.
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
45
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 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 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 Retained Licenses. In the event that AT&T PCS desires to
Transfer all or any of the AT&T 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 Retained Licenses in the Territory such
notice to specify among other things, the AT&T 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 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.
46
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 Consolidation
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;
(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 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); and
(c) The Company may acquire licenses issued by the FCC to provide
wireless services (other than FCC Licenses) (each such license a "Permitted
Non-CMRS 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 Permitted Non-CMRS License (and any
other assets being acquired together therewith) is necessary or desirable to
constructing a PCS System in the applicable area within the PCS Territory,
provided that, (i) the POPs included in the geographic area covered by such
License are within the PCS Territory, (ii) none of AT&T PCS or any Affiliate
thereof owns an interest in a similar Permitted Non-CMRS License in such
geographic area, (iii) the ownership of such License will not conflict with, or
cause AT&T PCS or any Affiliate thereof to be in violation or breach of any
agreement, instrument, Law or License applicable to or binding upon such Person
or its assets, and (iv) the service to be provided by the Company using such
Permitted Non-CMRS License complies with the definition of Business.
Notwithstanding the foregoing, the Company shall not acquire any Permitted
Non-CMRS 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).
7.12 Covenant of Holders of Class C Common Stock. (a) Each holder of
Class C Common Stock hereby covenants and agrees that, for so long as it is a
holder of any Class C
47
Common Stock and for so long as required by FCC rules, it will maintain its
status as an "Institutional Investor", as such term is used in 47 CFR Section
24.720(h), and that it will give written notice to the Company within five (5)
days after such Stockholder becomes aware that it no longer maintains such
status for any reason (the "Transfer Event"). Upon the occurrence of a Transfer
Event with respect to any Stockholder under circumstances such that (i) the
failure of the Stockholder to maintain its status as an Institutional Investor
would compromise any of the material benefits the Company derives as a "Very
Small Business", as defined in 47 CFR ss. 24.720(b)(2) or from the Company's
eligibility to bid on frequency block "C" or "F" licenses, as specified in 47
CFR Section 24.709 or to be eligible to receive any of the rights specified in
47 CFR Sections 24.711, 24.712, 24.716 and 24.717 (collectively, the "Material
Benefits") and (ii) the Stockholder is unable to obtain a waiver from the FCC
regarding, or to cure, such Transfer Event or loss of Material Benefits, the
other holders of Class C Common Stock at the time shall have the right to
purchase any or all of such Stockholder's Class C Common Stock pursuant to the
terms hereof, or, if not so purchased by the other holders of Series C Common
Stock, by one or more Persons designated by the Company.
(b) Within fifteen (15) days of becoming aware that a Transfer
Event has occurred with respect to a Stockholder, the Company shall give the
other holders of Class C Common Stock notice of their right to purchase the
Stockholder's Class C Common Stock for the purchase price paid by such holder of
Class C Common Stock.
(c) Notwithstanding the foregoing, any Stockholder which suffers
a Transfer Event may, if to do so would avoid the loss of Material Benefits,
elect to convert all or part of its Class C Common Stock to another class of
Common Stock which the Company has authorized, or to waive in writing such
rights pertaining to its ownership of such stock as may be necessary to avoid
the loss of Material Benefits, which election shall be made no later than five
(5) days before the FCC Determination Date.
7.13 Additional Florida POPs. In the event that the PCS Licenses
that are subject to the Option Agreement are acquired by the Company, the "PCS
Territory" shall include the territory covered by such PCS Licenses. The Company
shall have the right to acquire the Pensacola, FL and Fort Xxxxxx Beach, FL MSAs
(the "Permitted Florida MSAs") so long as at least one (1) of the Series A
Preferred Directors shall have consented or voted in favor thereof.
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.
48
(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 Retained Licenses in the Territory and the
AT&T 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 Retained Licenses and AT&T Contributed
Licenses, as applicable.
(c) The Company will arrange for all necessary microwave
relocation in connection with the AT&T 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 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 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
49
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 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 the
same rates as the rates charged by AT&T Corp. or such Affiliate to other
similarly situated carriers. It is anticipated that such services will be
provided by AT&T Corp. or such Affiliate pursuant to an agreement incorporating
such rates. Upon specific request of any customer, the Company may permit such
customer to utilize the interexchange services of another interexchange provider
(including the interexchange services of AT&T Corp. and its Affiliates),
provided, however, that neither the Company nor any Affiliate thereof will
accept any referral fee, commission, credit against its long distance xxxx, or
any other remuneration, directly or indirectly, from such other provider in
exchange for permitting its customers to utilize such other interexchange
provider. The Company covenants and agrees that neither it nor its Subsidiaries
will market, offer, promote or otherwise encourage its customers to utilize the
interexchange services of any Person other than the Company (such
50
services having been procured as set forth above by the Company from AT&T Corp.
or an Affiliate thereof) or AT&T Corp. or an Affiliate thereof.
(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 (when used in this Section 8.6,
solely with respect to the Management Stockholders and their Affiliates and the
Cash Equity and their respective Affiliates, the term "Company Communications
Services" shall include all mobile wireless telecommunications services,
initiated or terminated, using analog, CDMA, GSM, TDMA or any other technology)
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 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, (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 (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) and (iv) provide or resell, or act as the agent for any person
offering, Company Communications Services within the Kentucky RSAs pursuant to
the terms of the agreement in effect on the date hereof with PriCellular Inc.,
as such agreement may be amended, modified, supplemented or modified after the
date hereof or
51
pursuant to a successor agreement entered into with respect to the subject
matter thereof. AT&T PCS agrees to provide the Company with not less than sixty
(60) days' prior notice of any resale activities described in clause (iii)
hereof, such notice to include a reasonable description of such resale
activities and to use dual band/dual mode phones, to the extent commercially
reasonable in connection with such resale activities. To the extent the "other
telecommunications services" referred to in clause (ii) of the first sentence of
this Section 8.6(a) constitute Company Communications Services, neither AT&T PCS
nor any of its Affiliates or any AT&T Licensee may provide or resell, or act as
agent for any Person offering, such "other telecommunications services" except
Company Communications Services provided by the Company in accordance with the
terms of clause (i) of the first sentence of this Section 8.6(a). 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; provided, however, the
provisions of this Section 8.6(b) shall not apply to AT&T PCS and its Affiliates
in the Kentucky RSAs. 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 TWR Cellular and each Cash Equity Investor
and any Person affiliated with AT&T PCS, TWR Cellular or a Cash Equity Investor
may engage in or possess an interest in other business ventures, 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, TWR Cellular or a Cash Equity
Investor or a Person affiliated with AT&T PCS, TWR Cellular or a Cash Equity
Investor develops inventions which are patentable or are otherwise trade secrets
relevant to the Business, AT&T PCS, TWR Cellular 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, TWR Cellular
or a Cash Equity Investor or any Person affiliated with AT&T PCS, TWR Cellular
or a Cash Equity Investor would have duties (including fiduciary duties) and
liabilities to the Company, or to the
52
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
(including TWR Cellular) 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' (including TWR
Cellular) obligations under Section 8.6 with respect to any Overlap Territory,
provided that the obligations of AT&T PCS and its Affiliates (including TWR
Cellular) 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 (including TWR Cellular) (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 (including TWR Cellular).
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 and TWR Cellular into 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 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. 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. AT&T
PCS may develop
53
a roaming clearinghouse for AT&T Licensees, including the Company, pursuant to
which the Company's subscribers that are roaming on PCS or Cellular Systems with
which AT&T PCS or any of its Affiliates have entered into a roaming agreement
will be identified on such PCS or Cellular System as an AT&T PCS subscriber, and
settlement of roaming accounts for such Company subscribers would be effected
first between AT&T PCS and such PCS or Cellular System and then settled between
AT&T PCS and the Company. In the event AT&T PCS provides such roaming
clearinghouse to the Company, the per-subscriber handling charge to the Company
shall be commercially reasonable.
8.10 Intentionally Omitted.
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.
(b) It is the intention of the parties that, in light of AT&T's
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
54
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 (including TWR
Cellular) 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 (including TWR Cellular) 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 (including TWR Cellular) 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 (including TWR Cellular); 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 (including TWR
Cellular).
8.13 Co-Location. Except in any portion of the Territory as to which
the provisions of Section 8.6 shall have been terminated: (a) the Company agrees
to permit on commercially reasonable terms AT&T PCS and its Affiliates
(including TWR Cellular) to install, operate and maintain cell site equipment
owned or used by AT&T PCS and its Affiliates (including TWR Cellular) in their
respective businesses on the towers, buildings and other locations at which the
Company's cell site equipment is installed, operated and maintained, and (b)
AT&T PCS and its Affiliates (including TWR Cellular) 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' (including
TWR Cellular) cell site equipment is installed, operated and maintained.
8.14 Billing. The Company hereby covenants and agrees that the
Company's billing system and software will conform to the "XXXXX" format.
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
55
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. 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:
(a) "The shares represented by this Certificate are subject to a
Stockholders' Agreement dated as of January 7, 1999, 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 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"; and
(b) "The securities 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."
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.
(c) 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
56
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.
12.1 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 or TWR Cellular:
c/o AT&T Wireless Services, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx
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: (000) 000-0000
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
57
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, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to a Management Stockholder or to the Company:
Tritel, Inc. (or in the case of a Management
Stockholder, c/o Tritel, Inc.)
0000 Xxxxx Xxxx Xxxxx
Xxxxx X-000
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to:
Young Xxxxxxxx, Xxxxxxxxx & Xxxxxxxx, P.A.
0000 Xxxxxxx Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx XX, Esq.
Telephone: (000) 000-0000
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 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.
58
(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 Beneficial Owners of a majority of the shares of Class A Voting
Common Stock, including AT&T PCS, 66 K% of the Class A Voting Common Stock
Beneficially Owned by the Cash Equity Investors, and 66-2/3% of the Class A
Voting 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 Class A
Voting Common Stock.
(b) Notwithstanding anything contained herein to the contrary,
(i) the provisions of Sections 3.2, 3.3, 3.4, 3.5, 3.11, 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, (iii) the provisions of Section 3.1(d)(i)(y) (relating to AT&T PCS'
right to approve the directors selected by the holders of the Voting Preference
Stock pursuant to Section 3.1(d)(i)(y)) and the provision of Section 3.1(d)
relating to the right of AT&T PCS to approve any replacement for Messrs.
Xxxxxxx, Xxxxxx and Xxxxxxxx to the Board of Directors, Section 3.1(d)(ii)(y)
(relating to AT&T PCS' right to approve the directors selected by the holders of
the Majority in Interest of the Common Stock held by the Cash Equity Investors
and any replacement thereof 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 and TWR Cellular shall cease to
Beneficially Own, in the aggregate, more than two-thirds of the number of shares
of Series A Preferred Stock that AT&T PCS and TWR Cellular 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 and TWR Cellular shall cease to
Beneficially Own more than two-thirds of the number of shares of Class A Voting
Common
59
Stock that AT&T PCS and TWR Cellular Beneficially Owns on such eighth
anniversary date, (iv) the provisions of Section 3.1 shall terminate on the
later to occur of (x) the date that the holders of shares of Voting Preference
Stock shall vote as a class with holders of Class A Voting Common Stock, and (y)
the date after the IPO Date; and (v) the provisions of 3.6 shall terminate on
the date that the holders of shares of Voting Preference Stock shall vote as a
class with holders of Class A Voting Common Stock.
(c) (i) Notwithstanding anything contained herein to the
contrary, in the event the Cash Equity Investors shall Beneficially Own in the
aggregate less than (I) one-half but more than one-quarter of the number of
shares of Common Stock Beneficially Owned in the aggregate 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) shall be reduced to one, or
(II) one-quarter of the number of shares of Common Stock Beneficially Owned in
the aggregate by the Cash Equity Investors on the date hereof, the provisions of
Section 3.1(a) and the provisions of Section 3.1(d)(i) (relating to the Cash
Equity Investors' right to approve the directors selected by the holders of the
Voting Preference Stock), Section 3.1(d)(ii) (relating to the Cash Equity
Investors' right to designate four (4) directors upon the events stated in
Section 3.1(d)(ii)), the right to approve any director that replaces Messrs.
Xxxxxxx, Xxxxxx and Xxxxxxxx on the Board of Directors and the right to
designate any director to replace any director designated by the Cash Equity
Investors on the Board of Directors shall terminate, and neither the Company nor
any Stockholder shall be required to obtain the Cash Equity Investors' prior
written consent as required under such Sections. In the event the number of
directors the Cash Equity Investors are entitled to designate is reduced
pursuant to Section 12.3(c)(i)(I), two (2) of the directors designated by the
Cash Equity Investors under Section 3.1(a) 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) and 3.1(d) are terminated (as to the rights of the
Cash Equity Investors) pursuant to Section 12.3(c)(i)(II), the directors
designated by the Cash Equity Investors pursuant to Section 3.1(a) and the
director designated pursuant to Section 3.1(d)(i)(x) or Section 3.1(d)(ii)(x),
as applicable, 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 to eight (8) individuals. In the event such
provisions are so terminated the holders of the Voting Preference Stock, in the
event the Voting Preference Stock is outstanding, or Xxxxxxx, Xxxxxx and
Xxxxxxxx (for so long as each individual is an officer of the Company), in the
event Section 3.1(d)(ii) is in effect, shall thereafter have the right to
designate three (3) individuals to the Board of Directors provided each such
individual is acceptable to AT&T PCS (so long as AT&T PCS and TWR Cellular
continue to Beneficially Own, in the aggregate, more than two-thirds of the
Common Stock Beneficially Owned by AT&T PCS and TWR Cellular, in the aggregate,
on the date hereof). For all purposes of this Agreement, all references in this
Agreement to directors designated pursuant to Section 3.1(d)(i) and (ii), as
applicable, shall thereafter be deemed to refer to the three (3) 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
60
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.
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
61
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.
(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 Delaware,
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
62
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 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.
63
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 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.
64
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.
65
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:
TWR CELLULAR, INC.
By:
----------------------------------
Name:
Title:
TRITEL, INC.
By:
----------------------------------
Name:
Title:
66
CASH EQUITY INVESTORS:
TORONTO DOMINION INVESTMENTS, INC.
By:
----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
ENTERGY WIRELESS COMPANY
By:
----------------------------------
Name: Xxxx X. Xxxxx
Title: President and Chief Executive
Officer
GENERAL ELECTRIC CAPITAL CORPORATION
By:
----------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Managing Director
67
WASHINGTON NATIONAL INSURANCE COMPANY
By:
--------------------------------------
Name:
Title:
UNITED PRESIDENTIAL LIFE INSURANCE COMPANY
By:
--------------------------------------
Name:
Title:
68
DRESDNER KLEINWORT XXXXXX PRIVATE
EQUITY PARTNERS LP
BY: DRESDNER KLEINWORT XXXXXX PRIVATE
EQUITY MANAGERS LLC, AS ITS GENERAL
PARTNER
By:
-----------------------------------
Name: Xxxxxxxxx X. Xxxxxxx
Title: Authorized Signatory
69
TRIUNE PCS, LLC, A DELAWARE LIMITED
LIABILITY COMPANY
BY: OAK TREE, LLC, A DELAWARE LIMITED
LIABILITY COMPANY
TITLE: MANAGER
BY: TRIUNE INC., A DELAWARE CORPORATION
TITLE: MANAGER
By:
----------------------------------
Name: Xxxxx Xxxxxxxx
Title: President
70
FCA VENTURE PARTNERS II, L.P.
BY: CLAYTON-DC VENTURE CAPITAL GROUP, LLC,
ITS GENERAL PARTNER
By:
Name: D. Xxxxxx Xxxxxx, III
Title: Manager
XXXXXXX ASSOCIATES, LLC
BY:________________________________,
ITS MANAGING MEMBER
By:
-----------------------------------
Name:
Title:
71
AIRWAVE COMMUNICATIONS, LLC (F/K/A
MERCURY PCS, LLC)
By: MSM, Inc., its Manager
By:
----------------------------------
Name: X.X. Xxxxxx, Xx.
Title: Vice President
DIGITAL PCS, LLC (F/K/A MERCURY PCS
II, LLC)
By: MSM, Inc., its Manager
By:
----------------------------------
Name: X.X. Xxxxxx, Xx.
Title: Vice President
72
THE MANUFACTURERS' LIFE INSURANCE
COMPANY (U.S.A.)
By:
-------------------------------------
Name:
Title:
73
TRILLIUM PCS, LLC
By:
-----------------------------------
Name: Xxxxxxx X. Xxxxxxx, XX
Title: Manager
74
MANAGEMENT STOCKHOLDERS:
-----------------------------------
Xxxxxxx X. Xxxxxxx, XX
-----------------------------------
X.X. Xxxxxx, Xx.
-----------------------------------
Xxxxx X. Xxxxxxxx, Xx.
75
--------------------------------------------------------------------------------
SCHEDULE I
CASH EQUITY INVESTORS
---------------------
SECOND
AGGREGATE INITIAL CASH FUNDING
CASH EQUITY INVESTORS COMMITMENT CONTRIBUTION 9/30/99
--------------------- ---------- ------------ -------
Washington National Insurance Company $25,000,000 $16,666,667 $8,333,333
United Presidential Life Insurance Company 25,000,000 16,666,667 8,333,333
Trillium PCS, LLC 2,000,000 1,333,333 666,667
Dresdner Kleinwort Xxxxxx Private Equity Partners LP 30,000,000 20,000,000 10,000,000
Entergy Wireless Corporation 20,000,000 13,333,333 6,666,667
Triune, Inc. 24,139,040 16,092,694 8,046,346
Toronto Dominion Investments, Inc. 5,000,000 3,333,333 1,666,667
General Electric Capital Corporation 2,500,000 1,666,667 833,333
The Manufacturers' Life Insurance Company (U.S.A.) 10,000,000 6,666,667 3,333,333
FCA Venture Partners II, LP 5,500,000 3,666,667 1,833,333
Xxxxxxx Associates, LLC 100,000 66,667 33,333
Digital PCS, LLC 2,976,401 2,976,401 -0-
--------------------------------------------------------------------------------------------------
Airwave Communications, LLC 11,163,079 11,163,079 -0-
---------- ----------
TOTAL 163,369,520 113,623,175 49,746,345
SCHEDULE II
MANAGEMENT STOCKHOLDERS
-----------------------
Xxxxxxx X. Xxxxxxx XX
X.X. Xxxxxx, Xx.
Xxxxx X. Xxxxxxxx, Xx.
Xxxxxxx Xxxxxx
SCHEDULE III
EQUITY CAPITALIZATION
---------------------
(See Attached)
SCHEDULE IV
CORE FEATURES
Below is a list and description of the Core Features that Licensee agrees to
implement in accordance with Section 8.2 of this Agreement. These definitions
are functional descriptions of the Core Features, and the parties agree that
such Core Features shall be implemented using the Critical Network Elements
identified in Schedule XI hereto. Licensee further agrees to implement
additional features in accordance with Section 8.2 of this Agreement.
1. CALL DELIVERY
This capability permits a PCS customer to receive incoming calls to his or
her phone while in his or her home market or while roaming in any part of the
Licensee's Wireless Network or the AWS Wireless Network (together, the "Mobile
Wireless Network").
2. ROAMING - DO NOT DISTURB
This capability permits a PCS customer, who would normally receive all
incoming calls while visiting a Mobile Switching Center that is part of the
Mobile Wireless Network, to temporarily inhibit the delivery of such calls.
Activating this capability has no impact on the PCS customer's ability to
originate calls or on the PCS customer's ability to receive calls via the roamer
access ports.
3. CALL FORWARDING
A. CALL FORWARDING IMMEDIATE
This capability permits a PCS customer to send all incoming calls destined
for the PCS customer's PCS phone to another phone number specified by the
PCS customer. Activating this capability has no impact on the PCS customer's
ability to originate calls. When this capability is activated, calls are
forwarded regardless of whether the PCS customer is located within his or
her local market or whether the customer is roaming outside of such local
market.
B. CALL FORWARDING BUSY
This capability permits a PCS customer to send all incoming calls destined
for his or her PCS phone to another phone number specified by the PCS
customer when the PCS customer is engaged in a call.
C. CALL FORWARDING NO ANSWER
This capability permits a PCS customer to send all incoming calls destined
for his or her PCS phone to another phone number specified by the PCS
customer when the PCS
customer does not answer or when the PCS customer's PCS phone does not
respond to a page.
4. CALL WAITING
This capability permits a PCS customer to receive incoming calls even though
a call may already be in progress.
5. VOICEMAIL
This capability forwards those PCS customer's incoming calls which are not
answered by the PCS customer, and for which no other explicit treatment has been
activated (for example, those described in items above), to a voice storage and
retrieval system. This capability also permits a PCS customer to subsequently
retrieve messages from the PCS customer's voice mail box.
6. THREE WAY CALLING
This capability permits a PCS customer to add a third party to an active two
party call.
7. MESSAGE WAITING INDICATOR
This capability is an enhancement to PCS voice mail, and provides the PCS
customer with the current status of the number of unheard voice mail messages
waiting in his or her PCS voice mail box.
8. CALLING NUMBER IDENTIFICATION
This capability identifies for the PCS customer either the telephone number
or the stored name (in the PCS phone) of the person who is calling. It also
permits a PCS customer to inhibit the ability of a person to whom the PCS
customer is placing a call from identifying either the telephone number or the
name of such PCS customer who is placing the call.
9. WIRELESS OFFICE SERVICE (WOS)
A. PCS/PBX INTERWORKING
This capability permits WOS customers to have just one published number that
delivers all incoming calls to both the PCS and PBX phone.
B. PRIVATE NUMBER PLAN
This capability permits a defined group of customers to call defined private
network extensions by using an abbreviated unique dialing pattern (four
digit dialing).
C. PRIVATE NETWORKS
This capability permits a WOS customer to have his or her own private or
semiprivate PCS system.
2
D. LOCATION ID
This capability permits the PCS customer to identify the nature of the
system (private, public, or residential) that the PCS customer is using, by
displaying the system's name on the PCS phone.
10. SLEEP MODE
This capability permits an IS 136 PCS phone to operate in a power saving
mode when camping on an IS 136 system, thereby allowing the battery standby time
to increase.
11. PCS MESSAGING
This capability will permit a caller to deliver both numeric and
alphanumeric messages of up to eighty characters to an IS 136 PCS phone. If the
PCS customer to whom the message has been delivered has his or her phone off or
is not in the IS 136 coverage area, then messages are stored for future
delivery.
MessageFlash software permits alphanumeric messages to be sent from a
computer via a standard modem to the customer.
E-Mail messaging teleservice allowing an IS-136 phone to have an E-Mail
address.
12. AUTHENTICATION
This capability allows for the validation of the IS-136 phone's identity.
Text Dispatch Service permits people to call an operator (provided by or on
behalf of the Company) and dictate a message which can then be converted to an
alphanumeric message and delivered to the customer.
Cut Through Paging permits people to send a numeric message while listening
to the customer's voicemail greeting.
3
SCHEDULE V
MINIMUM BUILD-OUT PLAN
----------------------
BUILDOUT SCHEDULE-YEAR 1
------------------------
ATLANTA MTA
-----------
Cities: Chattanooga, Tennessee
Cleveland, Tennessee
Dalton, Georgia
Interstates/State Highways:
Portion of I-75 South from Chattanooga
Portion of I-75 North from Chattanooga
Portion of I-24 West from Chattanooga
Portion of I-59 South from Chattanooga
BIRMINGHAM MTA
--------------
Cities: Huntsville, Alabama
Decatur, Alabama
Interstates/State Highways:
Portion of I-65 South from Decatur
Portion of I-65 North from Decatur
MEMPHIS/JACKSON MTA
-------------------
Cities: Jackson, Mississippi
Vicksburg, Mississippi
Interstates/State Highways:
Portion of I-20 West from Jackson
Portion of I-20 East from Jackson
Portion of I-55 South from Jackson
Portion of I-55 North from Jackson
Portion of Highway 49 South from Jackson
KNOXVILLE MTA
-------------
Cities: Knoxville, Tennessee
Interstates/State Highways:
Portion of I-40 West from Knoxville
Portion of I-40 East from Knoxville
Portion of I-75 North from Knoxville
NASHVILLE MTA
-------------
Cities: Nashville, Tennessee
Interstates/State Highways:
Portion of I-40 East from Nashville,
Portion of I-40 West from Nashville
Portion of I-24 East from Nashville
Portion of I-24 West from Nashville
Portion of I-65 North from Nashville
Portion of I-65 South from Nashville
The buildout of the above referenced cities, interstates and state highways
represents the deployment of a wireless service network which will be
capable of providing a radio frequency signal level sufficient to adequately
service an estimated 2,954,700 pops within the license area. The estimated
pops recited hereinabove for the buildout during year 1 represents 21.7% of
the estimated total pops contained under the terms of this agreement.
BUILDOUT SCHEDULE - YEAR 2
--------------------------
BIRMINGHAM MTA
--------------
Cities: Birmingham, Alabama
Montgomery, Alabama
Tuscaloosa, Alabama
Anniston, Alabama
Interstates/State Highways:
Portion of I-20 East from Birmingham
Portion of I-20 West from Birmingham
Portion of Highway 280 East from Birmingham
Portion of I-59 North from Birmingham
Portion of I-65 South from Montgomery
Portion of I-65 North from Montgomery
Portion of Highway 231 South from Montgomery
Portion of Highway 80 West from Montgomery
Portion of I-20 East from Tuscaloosa
Portion of I-20 West from Tuscaloosa
Portion of I-20 East from Anniston
Portion of X-00 Xxxx xxxx Xxxxxxxx
0
XXXXXXXXXX XXX
--------------
Cities: Louisville, Kentucky
Lexington, Kentucky
Interstates/State Highways:
Portion of I-64 East from Louisville
Portion of I-64 West from Louisville
Portion of I-65 South from Louisville
Portion of I-65 North from Louisville
Portion of I-71 North from Louisville
Portion of I-75 North from Lexington
Portion of I-75 South from Lexington
Portion of I-64 East from Lexington
Portion of I-64 West from Lexington
MEMPHIS/JACKSON MTA
-------------------
Cities: Hattiesburg, Mississippi
Meridian, Mississippi
Tupelo, Mississippi
Interstates/State Highways:
Portion of Highway 49 North from Hattiesburg
Portion of Highway 49 South from Hattiesburg
Portion of Highway 98 East from Hattiesburg
Portion of I-59 South from Hattiesburg
Portion of I-59 North from Hattiesburg
Portion of I-20 East from Meridian
Portion of I-20 West from Meridian
Portion of I-59 South from Meridian
NASHVILLE MTA
-------------
Cities: Clarksville, Tennessee
Hopkinsville, Kentucky
Interstates/State Highways:
Portion of I-24 East from Clarksville
Portion of X-00 Xxxx xxxx Xxxxxxxxxxx
XXX XXXXXXX XXX
---------------
Cities: Mobile, Alabama
3
Interstates/State Highways:
Portion of I-65 North from Mobile
Portion of I-10 East from Mobile
Portion of I-10 West from Mobile
Portion of Highway 98 West from Mobile
The buildout of the above referenced cities, interstates and state highways
represents the deployment of a wireless service network which will be
capable of providing a radio frequency signal level sufficient to adequately
service an estimated 3,882,900 pops within the license area. The estimated
pops recited hereinabove for the buildout during year 2 represents 28.6% of
the estimated total pops contained under the terms of this agreement.
The estimated pops recited herein for the buildout for years 1 and 2 will
constitute an estimated aggregate total of 6,837,600 pops within the license
area at the completion of the year 2 buildout or 50.3% of the estimated
total pops contained under the terms of this agreement.
4
BUILDOUT SCHEDULE - YEAR 3
--------------------------
BIRMINGHAM MTA
--------------
Cities: Gadsden, Alabama
Dothan, Alabama
Florence, Alabama
Interstates/State Highways:
Portion of I-59 North from Gadsden
Portion of I-59 South from Gadsden
Portion of Highway 231 North from Dothan
LOUISVILLE MTA
--------------
Cities: Owensboro, Kentucky
Bowling Green, Kentucky
Glasgow, Kentucky
Madisonville, Kentucky
Corbin, Kentucky
Interstates/State Highways:
Portion of Audubon Parkway West from Owensboro
Portion of Western Kentucky Parkway East from
Madisonville
Portion of Pennyrile Parkway North from
Madisonville
Portion of Pennyrile Parkway South from
Madisonville
Portion of I-65 North from Elizabethtown
Portion of I-65 South from Elizabethtown
Portion of I-75 North from Corbin
Portion of I-75 South from Corbin
NASHVILLE MTA
-------------
Cities: Cookeville, Tennessee
Columbia, Tennessee
Interstates/State Highways:
Portion of I-40 East from Cookeville
Portion of I-40 West from Cookeville
Portion of I-65 North from Columbia
Portion of I-65 South from Columbia
5
MEMPHIS/JACKSON MTA
-------------------
Cities: Columbus, Mississippi
Starkville, Mississippi
Greenville, Mississippi
Greenwood, Mississippi
Interstates/State Highways:
Portion of Highway 82 East from Columbus
Portion of Highway 82 West from Columbus
Portion of Highway 82 East from Starkville
NEW ORLEANS MTA
---------------
Cities: Gulfport, Mississippi
Biloxi, Mississippi
Pascagoula, Mississippi
Brookhaven, Mississippi
McComb, Mississippi
Laurel, Mississippi
Interstates/State Highways:
Portion of Highway 49 North from Gulfport
Portion of I-10 West from Gulfport
Portion of I-10 East from Gulfport
Portion of I-10 West from Biloxi
Portion of I-10 East from Biloxi
Portion of I-10 West from Pascagoula
Portion of I-10 East from Pascagoula
Portion of I-55 North from Brookhaven
Portion of I-55 South from Brookhaven
Portion of I-55 North from McComb
Portion of I-55 South from McComb
Portion of I-59 North from Laurel
Portion of I-59 South from Laurel
The buildout of the above referenced cities, interstates and state highways
represents the deployment of a wireless service network which will be
capable of providing a radio frequency signal level sufficient to adequately
service an estimated 1,484,700 pops within the license area. The estimated
pops recited hereinabove for the buildout during year 3 represents 10.9% of
the estimated total pops contained under the terms of this agreement.
The estimated pops recited herein for the buildout for years 1, 2 and 3 will
constitute an estimated aggregate total of 8,322,300 pops within the license
area at the completion of
6
the year 3 buildout or 61.2% of the estimated total pops contained under the
terms of this agreement.
BUILDOUT SCHEDULE - YEAR 4
--------------------------
Cities: Corinth, Mississippi
Natchez, Mississippi
Rome, Georgia
Selma, Alabama
Demopilis, Alabama
Opelika, Alabama
Auburn, Alabama
LaGrange, Georgia
Interstates/State Highways:
Additional portions of all interstates and highways listed under years 1 and
2 buildout.
The buildout of the above referenced cities, interstates and state highways,
and expansion of existing cities listed in the buildout for years 1 through
3, represents the deployment of a wireless service network which will be
capable of providing a radio frequency signal level sufficient to adequately
service an estimated 1,196,670 pops within the license area. The estimated
pops recited hereinabove for the buildout during year 4 represents 8.8% of
the estimated total pops contained under the terms of this agreement.
The estimated pops recited herein for the buildout for years 1, 2, 3 and 4
will constitute an estimated aggregate total of 9,518,970 pops within the
license area at the completion of the year 4 buildout or 70.0% of the
estimated total pops contained under the terms of this agreement.
BUILDOUT SCHEDULE - YEAR 5
--------------------------
Cities: The buildout for year 5 will encompass expansion of all cities, where
applicable, launched in the buildout for years 1 through 4.
Interstates/State Highways:
Additional portions of all interstates and highways listed under year 3
buildout.
The buildout of the above referenced cities, interstates and state
highways, and expansion of existing cities listed in the buildout for
years 1 through 4, represents the deployment of a wireless service
network which will be capable of providing a radio frequency signal
level sufficient to adequately service an estimated 1,359,853 pops
within the license area. The estimated pops recited hereinabove for the
buildout during year 5 represents 10% of the estimated total pops
contained under the terms of this agreement.
7
The estimated pops recited herein for the buildout for years 1, 2, 3, 4
and 5 will constitute an estimated aggregate total of 10,878,823 pops within the
license area at the completion of the year 5 buildout or 80.0% of the estimated
total pops contained under the terms of this agreement.
8
SCHEDULE VI
PCS TERRITORY
-------------
I. From Atlanta MTA BTA Market Designator
---------------- ---------------------
Xxxxxxx County, GA (1)
Xxxxxxxx County, GA **
Opelika-Auburn, AL 000
Xxxxxxxxxxx, XX 000
Xxxxxxxxx, XX 000
Xxxxxx, XX 000
XxXxxxxx, XX 000
Xxxx, XX 384
II. From Knoxville MTA
--------------------------------
Knoxville, TN 232
III. From Louisville-Lexington-Evansville MTA
----------------------------------------
Xxxxxxxxxx, XX 000
Xxxxxxxxx, XX 000
Xxxxxxx Xxxxx-Xxxxxxx, XX 052
Xxxxxxxxx, XX 000
Xxxxxx, XX 000
Xxxxxxxx, XX 000
Xxxxxxxxxxxx, XX 273
IV. From Memphis-Jackson MTA
------------------------
Xxxxxxxxxx County, TN (2)
Xxxxxxx, XX 000
Xxxxxx-Xxxxxxx, XX 449
Greenville-Greenwood, MS 000
Xxxxxxxx, XX 000
Xxxxxxxx-Xxxxxxxxxx, XX 000
Xxxxxxx, XX 000
Xxxxxxxxx, XX 455
V. From Nashville MTA
------------------
Nashville, TN 000
Xxxxxxxxxxx, XX-Xxxxxxxxxxxx, XX 083
Cookeville, TN 096
--------
(1) Xxxxxx County and Xxxxxxxx County are both located within the Atlanta
BTA (B024).
(2) Montgomery County is located within the Memphis BTA (B290).
VI. From Birmingham MTA
-------------------
Anniston, AL 017
Birmingham, AL 044
Decatur, AL 000
Xxxxxx-Xxxxxxxxxx, XX 000
Xxxxxxxx, XX 146
Gladsden, AL 000
Xxxxxxxxxx, XX 000
Xxxxxxxxxx, XX 000
Xxxxx, XX 000
Xxxxxxxxxx, XX 000
XXX. Xxxx Xxx Xxxxxxx XXX
---------------------
Xxxxxx-Xxxxxxxx-Xxxxxxxxxx, XX 000
Xxxxxxxxxxx, XX 186
Laurel, MS 246
McComb-Brookhaven, MS
Mobile, AL 302
2
SCHEDULE VII
TDMA QUALITY STANDARDS
QUALITY AND REPORTING STANDARDS
GENERAL OVERVIEW
This Schedule VII sets out the Network and Reporting Standards with which the
Company ("Licensee") shall comply pursuant to Section 8.3 of this Agreement.
These Standards set out the network performance metrics and the process by which
such metrics will be established, measured and reported. All metrics which
represent a defined standard of quality for acceptable network operations have,
or will have, specific targets which the Licensee must comply with in accordance
with the following network standards
I. NETWORK STANDARDS
There are three categories of Network Standards: network quality (the "Network
Quality Category"); system performance (the "System Performance Category"); and
audio quality (the "Audio Quality Category") (each hereafter referred to
generally as a "Category"). For each Category of Network Standards, specific
metrics have been identified to measure performance in each such Category. The
detailed description of how to measure and interpret the metrics for each
Category is set out in the following AWS documents (each referred to generally
as a "Network Standards Document"):
o NETWORK QUALITY CATEGORY: Document ES-4034, Revision 1.1, dated July 30,
1997 entitled "Network Quality Scorecard User Guide" (as referred to as the
"Network Quality Standards Document"). This document is a collection of key
network performance and traffic indicators (metrics) that are measured and
reported on a regular basis. Included in this category, Licensee shall
perform the ANS Consistency Test, as attached to this Schedule VII.
o SYSTEM PERFORMANCE CATEGORY: OSS draft document, Revision 0.7, dated June
17, 1997 entitled "Key Metrics for System Performance Document" (as
referred to as the "System Performance Standards Document"). This document
identifies the network-wide key metrics for Ericsson and Lucent switching
systems, as well as cell sites, which will provide a high level assessment
of the system.
o AUDIO QUALITY CATEGORY: Document PP-4027E, Revision 1.1, dated May 30, 1996
entitled "Audio Quality Measurement (AQM)" (as referred to as the "Audio
Quality Standards Document"). This document provides the basis for
assessing the quality of RF transmission by describing the standards for
performing audio quality measurements and the reporting of their results.
AWS measures the metrics for the Audio Quality Category using the "Radio
Quality Scorecard". The Radio Quality Scorecard is comprised of performance
statistics derived from driving the PCS system using the Buzzard tool or a
tool with similar measurement and reporting capability.
These Network Standards Documents are collectively attached to this Schedule VII
which, subject to the terms and conditions of this Agreement including, without
limitation, this Schedule VII, is hereby incorporated into and forms a part of
this Agreement. In the event of any inconsistency between any part of a Network
Standards Document and the provisions of this Schedule VII, the provisions of
this Schedule VII shall govern.
Notwithstanding anything else in this Agreement including, without limitation,
this Schedule VII, the parties acknowledge and confirm that the Network
Standards Documents represent the standards and metrics currently identified by
AWS as applicable to each Category. Target values for key quality related
metrics are contained herein and Licensee agrees to comply with the specific
metric target values as specified in Schedule VII.
In addition, the parties acknowledge and confirm that the Network Standards
Documents are subject to revision and the Licensee shall comply with subsequent
revisions to these Network Standards Documents, as well as with Call Center
Quality Standards which will constitute an additional Category once they are
formally implemented, in accordance with Section 8.2 of this Agreement.
Set out below is a brief description of each Category of Network Standard and
the currently established metrics for each such Category.
II. TARGETS FOR NETWORK STANDARDS
Licensee shall meet the following targets for key metrics which represent
overall network and system quality. These targets are subject to revision and
shall be implemented in accordance with Section 8.2 of this Agreement.
o % Established Calls: The percentage of call attempts to and from a mobile
phone that result in a successful voice channel assignment. The target goal
for this metric is 93%.
o % Dropped Calls: The percentage of established calls, as defined below,
which terminate abnormally. The target, goal for this metric is a drop call
rate of 1.7% or less.
o % Handoff Failures: The target goal for this metric is a handoff failure
rate of 1.5%.
o Failures per Erlang: The ratio of failed calls to carried traffic, where
failed calls are measured utilizing switch counters for originating and
terminating traffic, and carried traffic is measured in erlangs. The target
goal for this metric is 1.68
o Switch Outage Time: The amount of time (in minutes) in a month when
subscribers are impacted by a cellular switch outage. Target for this
metric is 10 minutes per switch per year, with all ten minutes occurring
the maintenance window between 12:00 am and 5:00 am.
o % Blocking - Cell Routes: Percentage of time all cellular traffic channels
(voice paths in a trunk group) are unavailable within a given measurement
interval. Target for this metric is 5%.
2
o % Blocking - Network Routes: Percentage of time all network traffic
channels are unavailable within the measurement interval. Target for this
metric is 5%.
o ANS Consistency Test: The percentage of successful ANS feature deliveries,
based on the following sequence: feature activation/deactivation (when
applicable), test call, correct response, and call termination. The target
goal for this metric is 96% for all ANS features. This target metric
includes feature delivery failures due to call processing failures (i.e.
call delivery, call origination, handoff failures, or dropped calls. These
failures are estimated to be approximately 4%.)
III. REPORTING STANDARDS
Licensee agrees to comply with the reporting requirements as specified in the
Network Standards Documents and as specified below:
o Except as specified Audio Quality Network Standards, Licensee will submit
the metric reports required pursuant to this Schedule VII (the "Results")
to AWS no less than quarterly.
o With respect to Audio Quality Network Standards, Licensee shall only submit
quarterly Results for markets with 10,000 or more subscribers; for markets
with less than 10,000 subscribers, Licensee shall only submit Results on a
semi-annual basis.
o Licensee shall submit all Results by the fifteenth day of the month
following the end of the applicable reporting period.
o Licensee will report the Results to AWS on an aggregated national basis;
the aggregated national Results will reflect the distribution of the metric
measured across Licensee's Territory. Licensee may also be required to
provide a breakdown, by market, of any metric.
IV. CUSTOMER SERVICE STANDARDS
Promptly following the execution of this Agreement, Licensee and AWS shall
negotiate in good faith the applicable customer service standards, with a goal
of reaching agreement thereon by April 1, 1999.
3
SCHEDULE VIII
INITIAL DIRECTORS
-----------------
See Attached
SCHEDULE IX
CAPITAL BUDGETS
---------------
See Attached
SCHEDULE X
VOTING AGREEMENTS
-----------------
See Folder 4
SCHEDULE XI
CRITICAL NETWORK ELEMENTS
-------------------------
This Schedule sets out the Equipment which comprises the Critical Network
Elements.
The Critical Network Elements consist of the following: Mobile Switching Center,
Service Control Point, Message Center and Voice Mail System. Below is a basic
description of these Critical Network Elements. The Company shall have the right
to substitute for the equipment described below alternative equipment so long as
such alternative equipment provides substantially the same User Interface.
1. MOBILE SWITCHING CENTER (INCLUDING BASE STATIONS)
The Mobile Switching Centers consist of Ericsson's AXE1O and Lucent's
Autoplex platform. Each of these products are required to support: ISUP; IS41B+
(origination request message); Global Title routing; and EIA 553, IS54B and
IS136 air interface protocols. The current application software is AS1OO for
Ericsson's AXE1O and APXEC 8.0 for Lucent's Autoplex platform.
2. SERVICE CONTROL POINT (SCP)
The SCP is based on a Tandem Himalaya K1OOO/2000 series platform running the
Tandem realtime operating system known as "Non-Stop Kernel" and support the
software applications commonly known as: Home Location Register, Private Dialing
Service and Authentication Center. The current commercial software revision is
A20 bundle which consists of XXX X00, SCP 1.09.15, HLR 2.02, AC2.00 and PDS
1.001.
3. MESSAGE CENTER (MC)
Hewlett Packard 1/70 runs the Telepath Short Message Center (SMSC)
application software provided by Aldiscon Inc. Current revision of Telepath SMSC
is release 2.0.
4. VOICE MAIL SYSTEM (VMS)
The voice mail system is based on the Octel Communications Corporation's
Sierra platform. The current software release is Voice Information Services
(VIS) 1.01.
2
EXHIBIT A
RESTATED BY-LAWS
----------------
See Folder 48
EXHIBIT B
RESTATED CERTIFICATE
--------------------
See Folder 47