EXHIBIT 10.15
PREFERRED STOCK PURCHASE AGREEMENT
PREFERRED STOCK PURCHASE AGREEMENT, dated as of February 16, 2000 (this
"AGREEMENT"), by and between UBIQUITEL HOLDINGS, INC., a Delaware corporation
(the "COMPANY"), and DLJ MERCHANT BANKING PARTNERS II, L.P., a Delaware limited
partnership (the "INVESTOR").
SECTION 1. ISSUANCE AND SALE OF SENIOR PREFERRED STOCK.
(a) INITIAL PURCHASE AND SALE. Subject to the terms and conditions
set forth in this Agreement, the Investor hereby agrees to purchase from the
Company, and the Company hereby agrees to issue and sell to the Investor,
2,110,347 shares (the "INITIAL SHARES") of the Company's 7% Senior Pay-in-Kind
Non-Voting Convertible Preferred Stock (the "SENIOR PREFERRED STOCK"), at a
price of $11.85 per share, for an aggregate purchase price (the "INITIAL
PURCHASE PRICE") of $25,000,000 (the "INITIAL PURCHASE").
(b) ADDITIONAL PURCHASE AND SALE. In addition to the Initial
Purchase, subject to the terms and conditions set forth in this Agreement, the
Investor hereby agrees to purchase from the Company, if requested by the Company
by delivery of the notice referred to in paragraph (c) of this Section 1,
11,837,024 additional shares (the "ADDITIONAL SHARES" and, together with the
Initial Shares, the "SHARES") of Senior Preferred Stock, at a price of $8.45 per
share, for an aggregate purchase price (the "ADDITIONAL PURCHASE PRICE") of
$100,000,000 (the "ADDITIONAL PURCHASE").
(c) THE CLOSINGS. Subject to the terms and conditions set forth in
this Agreement, the closing of the Initial Purchase (the "INITIAL CLOSING")
shall take place on the date of this Agreement, or on such other date as may be
agreed to in writing by the Company and the Investor (in either case, the
"INITIAL CLOSING DATE"), at the offices of Xxxxxx & Xxxxxxx, 000 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000. In addition, subject to the terms and conditions set
forth in this Agreement, the closing of the Additional Purchase (the "ADDITIONAL
CLOSING") shall take place on June 30, 2000, or on such other date as may be
agreed to in writing by the Company and the Investor (in either case, the
"ADDITIONAL CLOSING DATE"), at the above offices of Xxxxxx & Xxxxxxx.
(d) ISSUANCE OF THE SHARES. The Shares will be issued pursuant to a
certificate of designations, preferences and relative participating, optional
and other rights in the form of Exhibit A (the "CERTIFICATE OF DESIGNATIONS"),
which has been or, on the Initial Closing Date will be, filed with the Secretary
of State of the State of Delaware. As of the Initial Closing Date, each Share
will be convertible into one share (each, a "VOTING PREFERRED SHARE") of the
Company's 7% Senior Pay-in-Kind Convertible Preferred Stock (the "VOTING
PREFERRED STOCK"), which in turn will be convertible into one share (each, a
"CONVERSION SHARE") of voting common stock, par value $.001 per share (the
"COMMON STOCK"), of the Company. The Voting Preferred Shares will be issued
pursuant to a certificate of designations, preferences and relative
participating, optional and other rights in the form of Exhibit B (the "VOTING
CERTIFICATE OF DESIGNATIONS" and, together with the Certificate of Designations,
the "CERTIFICATES OF
DESIGNATIONS"), which has been or, on the Initial Closing Date will be, filed
with the Secretary of State of the State of Delaware.
(e) DELIVERIES AT CLOSING. At each of the Initial Closing and the
Additional Closing, the Company shall deliver to the Investor a certificate or
certificates representing the Initial Shares or the Additional Shares, as the
case may be, registered in such name or names as requested in writing by the
Investor at least one business day prior to such closing (or, if no such request
has been made, in the name of the Investor), against payment of the Initial
Purchase Price or the Additional Purchase Price, as the case may be, by wire
transfer in same day funds to an account designated in writing by the Company at
least two business days prior to such closing (or, if no such designation has
been made, by check payable to the Company); PROVIDED, HOWEVER, that the
Investor may retain from such payments any amounts then due and payable by the
Company pursuant to Section 11 hereof.
(f) DISTRIBUTIONS PAYABLE AT ADDITIONAL CLOSING. If, prior to the
Additional Closing Date, the Company declares any dividend or other distribution
(a "DISTRIBUTION") in respect of any of its capital stock (the "SUBJECT STOCK")
such that, pursuant to the terms of the Certificate of Designations, holders of
the Additional Shares would have been entitled to receive such Distribution had
such Additional Shares been outstanding on the record date for such Distribution
(the "RECORD DATE"), then (i) if such Distribution has already been made to
holders of the Subject Stock, the Company shall distribute to the Investor on
the Additional Closing Date the Distribution that the Investor would have
received had the Investor owned the Additional Shares on the Record Date, and
(ii) if such Distribution has not yet been made to holders of the Subject Stock,
the Company shall make such Distribution to the Investor on the same date that
it is made to holders of the Subject Stock.
(g) SHAREHOLDERS' AGREEMENTS. At each of the Initial Closing and the
Additional Closing, the Company and the Investor shall execute a shareholders'
agreement in the form of Exhibit C, in the case of the Initial Closing (the
"INITIAL SHAREHOLDERS' AGREEMENT"), and in the form of Exhibit D, in the case of
the Additional Closing (the "ADDITIONAL SHAREHOLDERS' AGREEMENT" and, together
with the Initial Shareholders' Agreement, the "SHAREHOLDERS' AGREEMENTS").
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company hereby represents and warrants to the Investor as of the date hereof, as
of the Initial Closing Date, and as of the Additional Closing Date (as though
made as of each such date) as follows:
(a) ORGANIZATION AND GOOD STANDING; POWER AND AUTHORITY;
QUALIFICATIONS. The Company:
(i) is a corporation duly incorporated, validly existing and
in good standing under the laws of the State of Delaware;
(ii) has all requisite corporate power and authority to own,
lease and operate its properties and to carry on its business as
presently and as proposed to be conducted;
(iii) has all requisite corporate power and authority to enter
into and carry out the transactions contemplated by this Agreement, the
Certificates of Designations and the Shareholders' Agreements;
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(iv) is qualified to do business as a foreign corporation and
is in good standing in the States of Nevada and California; and
(v) is not qualified, and is not required to qualify, to do
business as a foreign corporation in any jurisdiction other than the
States of Nevada and California.
(b) SUBSIDIARIES. The Company has no subsidiaries other than
UbiquiTel, LLC, a Delaware limited liability company (the "SUBSIDIARY"). The
Subsidiary:
(i) is a limited liability company duly formed, validly
existing and in good standing under the laws of the State of Delaware;
(ii) has all requisite corporate power and authority to own,
lease and operate its properties and to carry on its business as
presently and as proposed to be conducted;
(iii) is qualified to do business as a foreign corporation and
is in good standing in the States of Nevada and California hereto; and
(iv) is not qualified, and is not required to qualify, to do
business as a foreign corporation in any jurisdiction other than the
States of Nevada and California.
The Company is the sole member of the Subsidiary, and no other person owns any
equity or other similar interests in the Subsidiary. For purposes of this
Agreement, a "subsidiary" of the Company includes any company, limited liability
company, general or limited partnership or other entity:
(v) of which at least a majority of the shares of capital
stock or other ownership interests having ordinary voting power to elect
a majority of the board of directors or other similar managing body of
such company, partnership or other entity are at the time owned or
controlled, directly or indirectly, by the Company; or
(vi) the management of which is otherwise controlled, directly
or indirectly, through one or more intermediaries by the Company.
(c) AUTHORIZATION OF TRANSACTIONS. The execution and delivery by the
Company of this Agreement, the Certificates of Designations and the
Shareholders' Agreements, and the performance by the Company of its obligations
hereunder and thereunder, have been duly authorized by all requisite corporate
action on the part of the Company and its shareholders. This Agreement, the
Certificates of Designations, and the Initial Shareholders' Agreement have been
duly executed and delivered and constitute, and the Additional Shareholders'
Agreement, if and when executed and delivered in accordance with this Agreement,
will constitute, the legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms.
(d) CAPITALIZATION OF THE COMPANY. Immediately prior to the Initial
Closing, the capitalization of the Company consists of:
(i) Common Stock, of which 150,000,000 shares are authorized
and (A) 3,417,000 shares are issued and outstanding and owned, of record
and beneficially, by, and in the amounts set forth opposite the names of,
the persons listed on SCHEDULE 2(d)
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hereto, (B) 2,040,000 shares are reserved for issuance pursuant to the
Company's 2000 Equity Incentive Plan, (C) 17,008,500 shares are reserved
for issuance upon the conversion of the Company's Series A Preferred
Stock, par value $.001 per share (the "SERIES A PREFERRED STOCK"), and
(D) 2,489,075 shares are reserved for issuance upon the exercise of a
warrant (the "BET WARRANT") issued to BET Associates, L.P. ("BET");
(ii) non-voting common stock, par value $.001 per share (the
"NON-VOTING COMMON STOCK"), of which 17,000,000 shares are authorized and
(A) 16,000,000 shares are issued and outstanding and (B) 574,402 shares
are reserved for issuance upon the exercise of a warrant (the "PARIBAS
WARRANT") issued to Paribas North America, Inc. ("PARIBAS"); and
(iii) preferred stock, of which 125,000,000 shares are
authorized and (A) 17,008,500 shares have been designated as the Series A
Preferred Stock and are issued and outstanding, (B) 35,000,000 shares
have been or will be designated as the Senior Preferred Stock to be
issued pursuant to this Agreement, and (C) 35,000,000 shares have been or
will be designated as the Voting Preferred Stock to be issued upon
conversion of the Senior Preferred Stock.
All of the issued and outstanding shares of Common Stock, Non-Voting Common
Stock and Series A Preferred Stock are validly issued, fully paid and
nonassessable. No series of preferred stock have been designated by the
Company other than the Series A Preferred Stock, the Senior Preferred Stock
and the Voting Preferred Stock. Except as set forth in the first sentence of
this paragraph (d), there are no outstanding (A) shares of capital stock or
voting securities of the Company, (B) securities of the Company convertible
into or exchangeable for shares of capital stock or voting securities of the
Company, (C) options or other rights to acquire, or other obligations of the
Company to issue, any capital stock, voting securities or securities
convertible into or exchangeable for capital stock or voting securities of
the Company, or (D) obligations of the Company to repurchase, redeem, or
otherwise acquire or retire any securities of the type described in clause
(A), (B) or (C) of this sentence. Other than those agreements set forth on
SCHEDULE 2(d) hereto, the Company is not a party to any, and to the best of
the Company's knowledge there are no, agreements, restrictions or
encumbrances with respect to the purchase, sale or voting of the Company's
securities, including, without limitation, preemptive rights, rights of first
refusal, rights of first offer, proxies, voting agreements, voting trusts,
registration rights agreements or shareholders' agreements.
(e) AUTHORIZATION AND ISSUANCE OF SHARES. The Shares have been duly
and validly authorized and, when issued, sold and delivered against payment
therefor in accordance with the terms of this Agreement, will be validly issued,
fully paid and nonassessable.
(f) AUTHORIZATION AND ISSUANCE OF VOTING PREFERRED SHARES AND
CONVERSION SHARES. The Voting Preferred Shares initially issuable upon
conversion of the Shares have been duly and validly authorized and reserved for
issuance by the Company and, if and when issued in accordance with the
Certificate of Designations, will be validly issued, fully paid and
nonassessable. The Conversion Shares initially issuable upon conversion of the
Shares and the Voting Preferred Shares have been duly and validly authorized and
reserved for issuance by the Company and, if and when issued in accordance with
the Voting Certificate of Designations, will be validly issued, fully paid and
nonassessable.
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(g) FINANCIAL STATEMENTS. The Company has made available to the
Investor the audited consolidated financial statements of the Company as of and
for the year ended December 31, 1999. Such historical financial statements:
(i) are in accordance with the books and records of the
Company and the Subsidiary;
(ii) have been prepared in accordance with generally accepted
accounting principles in the United States consistently applied ("GAAP");
and
(iii) fairly present the consolidated financial position and
results of operations of the Company as of the dates and for the periods
presented.
The Company has made available to the Investor consolidated financial statement
forecasts as of December 31 of and for each of the years in the ten-year period
ending December 31, 2010. Such financial statement forecasts were prepared in
good faith based on the assumptions set forth therein, which assumptions:
(A) the Company believes to be reasonable as of the date
hereof; and
(B) include all assumptions that the Company believes are
significant in forecasting the Company's financial position and results
of operations as of such dates and for such periods, although actual
results may differ materially from the results projected in such
forecasts.
(h) ABSENCE OF UNDISCLOSED LIABILITIES. Neither the Company nor the
Subsidiary has any liabilities or obligations (whether known or unknown,
accrued, absolute, contingent, unliquidated or otherwise, whether due or to
become due) other than:
(i) liabilities or obligations reserved against or otherwise
disclosed in the Company's consolidated balance sheet (the "BALANCE
SHEET") as of December 31, 1999 (the "BALANCE SHEET DATE"), or the
footnotes thereto;
(ii) other liabilities or obligations which were incurred
after the Balance Sheet Date in the ordinary course of business
consistent (in amount and kind) with past practice (none of which is a
liability resulting from breach of contract, breach of warranty, tort,
infringement, claim or lawsuit) and which, individually or in the
aggregate, do not exceed $250,000;
(iii) obligations and liabilities arising under the agreements
listed on SCHEDULE 2(K) hereto; and
(iv) liabilities set forth on SCHEDULE 2(h) hereto.
(i) ABSENCE OF CHANGES. Other than such changes set forth on SCHEDULE
2(i) hereto, since the Balance Sheet Date, each of the Company and the
Subsidiary has conducted its business in the ordinary course, consistent with
past practice and there has not been any:
(i) material adverse change in the condition (financial or
otherwise), operations, properties, prospects, results of operations,
business, assets, or liabilities of
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the Company, the Subsidiary, or the industry in which the
Company and the Subsidiary conduct or propose to conduct their
business (a "MATERIAL ADVERSE CHANGE"), or any events or conditions
that could reasonably be expected, individually or in the aggregate,
to result in a Material Adverse Change;
(ii) waiver or cancellation of any material right of the
Company or the Subsidiary, or the cancellation of any material debt or
claim held by the Company or the Subsidiary;
(iii) payment, discharge or satisfaction of any claim,
liability or obligation of the Company or the Subsidiary other than in
the ordinary course of business;
(iv) mortgages, judgements, claims, liens, security interests,
pledges, escrows, charges or other encumbrances of any kind or character
whatsoever (collectively "ENCUMBRANCES") upon any assets of the Company
or the Subsidiary, other than Encumbrances arising in the ordinary course
of business that do not materially impair the ownership or use of such
assets or the ability to obtain financing by using such assets as
collateral (PROVIDED that all of the assets of the Company and the
Subsidiary are subject to Encumbrances under the Company's Credit
Agreement, dated December 29, 1999, among the Company, the Subsidiary,
the banks named therein, and Paribas, as agent (the "CREDIT AGREEMENT"));
(v) declaration or payment of dividends on, or other
distribution with respect to, or any direct or indirect redemption or
acquisition of, any securities of the Company or the Subsidiary, other
than the conversion of Non-Voting Common Stock to Voting Common Stock as
a result of the transactions contemplated hereby pursuant to the Founders
Stock Agreement, dated as of November 1, 1999 (the "FOUNDERS STOCK
AGREEMENT"), among the Company, Xxxxx Xxxxxxx, Xxxxxx X. Xxxxxx, Xxxx X.
Judge, The Xxxxxx Group, Inc., and U.S. Bancorp (collectively, the
"FOUNDERS"), as amended;
(vi) issuance of any shares, bonds or other securities of the
Company or the Subsidiary;
(vii) sale, assignment or transfer of any tangible or
intangible assets of the Company or the Subsidiary, other than in the
ordinary course of business;
(viii) loan by the Company or the Subsidiary to any officer,
director, employee, consultant or shareholder of the Company or the
Subsidiary, other than advances to such persons in the ordinary course of
business in connection with travel and travel related expenses;
(ix) damage, destruction or loss (whether or not covered by
insurance) affecting the assets, property, financial condition or results
of operations of the Company or the Subsidiary;
(x) increase, direct or indirect, in the compensation
(including bonuses and other benefits) paid or payable to any officer or
director of the Company or the Subsidiary or, other than in the ordinary
course of business, to any other employee, consultant or agent of the
Company or the Subsidiary;
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(xi) change in the accounting or tax methods, practices or
policies, or any tax election, of the Company or the Subsidiary;
(xii) indebtedness incurred for borrowed money by the Company
or the Subsidiary, other than in the ordinary course of business
including pursuant to the Credit Agreement;
(xiii) amendment to or termination of any material contract or
agreement to which the Company or the Subsidiary is a party, including,
without limitation, any operating agreement to which the Company is a
party;
(xiv) material change or pending or proposed material change to
the regulation of the Company or the Subsidiary or their activities by
any administrative agency or governmental body;
(xv) material change in the manner of business or operations
of the Company or the Subsidiary (including, without limitation, any
accelerations or deferral of the payment of accounts payable or other
current liabilities or deferral of the collection of accounts or notes
receivable);
(xvi) capital expenditures with respect to tangible assets or
commitments therefor by the Company or the Subsidiary, other than capital
expenditure amounts disclosed in the Company's business plan previously
provided to the Investor (the "BUSINESS PLAN");
(xvii) amendment of the certificate of incorporation, by-laws or
other organizational documents of the Company or the Subsidiary, other
than as contemplated by this Agreement;
(xviii) transaction entered into by the Company or the Subsidiary
other than in the ordinary course of business, or any other transaction
entered into by the Company or the Subsidiary material to the Company and
the Subsidiary, taken as a whole, whether or not in the ordinary course
of business;
(xix) amendment to or termination of the Company's affiliation
management agreement with Sprint PCS (the "SPRINT AGREEMENT"); or
(xx) agreement or commitment (contingent or otherwise) by the
Company or the Subsidiary to do any of the foregoing other than the Bank
Financing commitment and the High Yield Bridge Financing commitment.
(j) NO CONFLICT. The execution, delivery and performance by the
Company of this Agreement, the Certificates of Designations and the
Shareholders' Agreements, the consummation of the transactions contemplated
hereby and thereby, and the compliance by the Company with the provisions hereof
and thereof, will not:
(i) violate any provision of law, statute, rule or
regulation, or any ruling, writ, injunction, order, judgement or decree
of any court, administrative agency or other governmental body,
applicable to the Company or the Subsidiary, or any of their respective
properties or assets;
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(ii) conflict with or result in any breach of any of the
terms, conditions or provisions of, or constitute (with due notice or
lapse of time, or both) a default, or give rise to any right of
termination, cancellation or acceleration, under, any contract,
agreement, license or permit to which the Company or the Subsidiary is a
party, or result in the creation of any Encumbrance upon any of their
respective properties or assets; or
(iii) violate the certificate of incorporation, by-laws or
other organization document of the Company or the Subsidiary.
(k) AGREEMENTS. Except as set forth on SCHEDULE 2(k) hereto, neither
the Company nor the Subsidiary is a party to any indenture, mortgage, guaranty,
lease, license, or other contract, agreement or understanding, written or oral
(each, a "CONTRACT"), other than any Contract that:
(i) pursuant to its terms, has expired or has been terminated
or fully performed by the parties and, in each case, under which neither
the Company nor the Subsidiary has any liability, contingent or
otherwise; or
(ii) involves payments to or from the Company or the
Subsidiary that aggregate less than $50,000 and is not material to the
condition (financial or otherwise), operations, properties, prospects,
results of operations, business, assets, or liabilities of the Company
and the Subsidiary taken as a whole.
Each such Contract is a legal, valid and binding obligation, enforceable and in
full force and effect against the Company, and, to the best of the Company's
knowledge, all other parties thereto. There is no breach, violation or default
by the Company or the Subsidiary, and no event (including, without limitation,
the consummation of the transactions contemplated hereby or any pending or
threatened termination, cancellation or material modification) that, with notice
or lapse of time or both, would (i) constitute a breach, violation or default by
the Company or the Subsidiary under any such Contract or (ii) give rise to any
Encumbrance on any property or asset of, or right of, or result in any
termination, modification, cancellation, prepayment, suspension, limitation,
revocation or acceleration against, the Company or the Subsidiary under any such
Contract. To the best knowledge of the Company, no other party to any of such
Contracts is in arrears in respect of the performance or satisfaction of the
terms and conditions on its part to be performed or satisfied under any of such
Contracts, no waiver or indulgence has been granted by any of the parties
thereto, and no party to any of such Contracts has repudiated any provision
thereof.
(l) INTELLECTUAL PROPERTY RIGHTS. Each of the Company and the
Subsidiary owns or has the right to use pursuant to license, sublicense,
agreement or permission all Intellectual Property (as defined below) that is
material, individually or in the aggregate, to the operation of its business as
currently conducted. Each item of Intellectual Property owned or used by the
Company or the Subsidiary immediately prior to the Initial Closing will be owned
or available for use by the Company or the Subsidiary on identical terms and
conditions immediately subsequent to the Initial Closing or the Additional
Closing, as the case may be. Each of the Company and the Subsidiary has taken
all necessary action to maintain and protect its interest in each item of
Intellectual Property that is material to the conduct of its business.
(ii) To the best knowledge of the Company, neither the Company
nor the Subsidiary has interfered with, infringed upon, or misappropriated any
Intellectual Property
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rights of third parties, and neither the Company nor the Subsidiary has
received any charge, complaint, claim, demand or notice alleging any such
interference, infringement, or misappropriation, including any claim that it
must license or refrain from using any Intellectual Property rights of any
third party. To the best knowledge of the Company, no third party has
interfered with, infringed upon, or misappropriated any Intellectual Property
rights of the Company or the Subsidiary.
(iii) Neither the Company nor the Subsidiary owns any patent or
has any pending patent application.
(iv) SCHEDULE 2(l) identifies each item of Intellectual
Property that is material to the conduct of the business of the Company and the
Subsidiary as presently conducted. Neither the Company nor the Subsidiary has
granted any sublicense or similar right with respect to any such Intellectual
Property, and, to best the knowledge of the Company, (A) each such item of
Intellectual Property is not subject to any outstanding injunction, judgement,
order, decree, ruling or change, and (B) no action, suit, proceeding, hearing,
investigation, charge, complaint, claim or demand is pending or threatened that
challenges the legality, validity, or enforceability of any such item of
Intellectual Property.
(v) For purposes of this Agreement, "INTELLECTUAL PROPERTY"
means all worldwide:
(A) inventions and discoveries (whether patentable or
unpatentable and whether or not reduced to practice), all improvements
thereto, and all patents, patent applications and patent disclosures,
together with all reissuances, continuations, continuations-in-part,
revisions, extensions and reexaminations thereof;
(B) trademarks, service marks, trade dress, logos, trade
names and corporate names, together with all translations, adaptations,
derivations and combinations thereof and including all goodwill
associated therewith, and all applications, registrations and renewals in
connection therewith;
(C) copyrightable works, copyrights and applications,
registrations and renewals in connection therewith;
(D) mask works and applications, registrations and
renewals in connection therewith;
(E) know-how, trade secrets and confidential business
information, whether patentable or unpatentable and whether or not
reduced to practice (including ideas, research and development, know-how,
formulae, compositions, manufacturing and production process and
techniques, technical data, designs, drawings, specifications, customer
and supplier lists, pricing and cost information and business and
marketing plans and proposals);
(F) computer software (including data and related
documentation);
(G) other proprietary rights;
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(H) copies and tangible embodiments thereof (in whatever
form or medium); and
(I) licenses and agreements in connection therewith.
(m) SUITABILITY. To the best knowledge of the Company, none of the
events described in Item 401(f) of Regulation S-K promulgated under the United
States Securities Act of 1933, as amended (including the rules and regulations
promulgated thereunder, the "SECURITIES ACT"), has occurred during the last five
years with respect to any director or officer of the Company or the Subsidiary.
(n) ASSETS.
(i) Each of the Company and the Subsidiary has good and
marketable title to, or a valid leasehold interest in or contractual
right to use, all of its assets and properties, free and clear of any
Encumbrances, other than (A) Encumbrances set forth in SCHEDULE 2(n)
hereto, and (B) Encumbrances for taxes not yet due and payable.
(ii) All buildings, facilities, machinery, equipment,
furniture, leasehold and other improvements, fixtures, vehicles,
structures, related capitalized items and other tangible property owned
by, or leased to, the Company or the Subsidiary are:
(A) in good operating condition and repair (normal wear
and tear excepted), free of any material structural or engineering
defects;
(B) subject to continued repair and replacement in
accordance with past practice and all material applicable regulations;
and
(C) suitable for their current and proposed use in all
material respects.
(iii) Neither the Company nor the Subsidiary has received written
notice of, or has knowledge of, any pending, threatened or contemplated
condemnation proceeding or similar taking affecting the assets of the Company or
the Subsidiary.
(o) EMPLOYEE MATTERS.
(i) The Company has no Benefit Plans (as defined below).
(ii) With respect to each Employee Agreement (as defined
below):
(A) each of the Company and the Subsidiary has complied
with all of its obligations thereunder, and each such Employee Agreement
is presently, and has at all times in the past been, in compliance with
all statutes, orders, rules and regulations applicable to it;
(B) to the best knowledge of the Company, each such
Employee Agreement that is a confidentiality or other similar agreement
is fully enforceable in accordance with its terms, and no person is
presently, or has at any time in the past been, in violation of any of
the terms of any such Employee Agreement;
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(C) there are no actions, proceedings, arbitrations,
suits, claims or other similar proceedings pending or threatened against
the Company or the Subsidiary with respect to any Employee Agreement,
except for a threatened claim by the Company's former Vice
President--Finance, Xxx Xxxxxxxx.
(iii) Neither the Company, nor the Subsidiary, nor any ERISA
Affiliate (as defined below) currently sponsors, maintains, contributes to, or
is required to contribute to, and neither the Company nor the Subsidiary has any
liability, contingent or otherwise, with respect to any "defined benefit plan"
(as defined in Section 3(35) of the Employee Retirement Income Security Act of
1974 ("ERISA")), "multiemployer plan" (as defined in Section 3(37) of ERISA), or
Retired Welfare Plan (as defined below).
(iv) To the best knowledge of the Company, no Employee has been
hired in violation of any restrictive covenant or non-compete agreement with any
other person.
(v) The execution of, and performance of the transactions
contemplated by, this Agreement, the Certificates of Designations and the
Shareholders' Agreements will not (either alone or upon the occurrence of any
additional or subsequent events):
(A) constitute an event under any Employee Agreement
that will or may result in any payment (whether of severance pay or
otherwise), acceleration, forgiveness of indebtedness, vesting,
distribution, increase in benefits or obligations to fund benefits with
respect to any Employee (as defined below); or
(B) result in any payment made or to be made by the
Company or the Subsidiary constituting an "excess parachute payment"
within the meaning of Section 280G of the Internal Revenue Code of 1986
(the "CODE").
(vi) For purposes of this Agreement:
(A) "BENEFIT PLAN" means each plan, program, policy,
payroll practice, contract, agreement or other arrangement, or commitment
therefor, providing for compensation, severance, termination pay,
pension, retirement or any other post-termination benefit, performance
awards, share or share-related awards, fringe benefits or other employee
benefits of any kind, whether formal or informal, funded or unfunded,
written or oral, which is now or previously has been sponsored,
maintained, contributed to or required to be contributed to by the
Company or the Subsidiary or pursuant to which the Company or the
Subsidiary has any liability, contingent or otherwise;
(B) "EMPLOYEE AGREEMENT" means each management,
employment, bonus, option, equity (or equity related), severance,
consulting, noncompete, confidentiality or similar agreement or contract
between the Company or the Subsidiary and any current, former or retired
employee, officer, consultant, independent contractor, agent or director
of the Company or the Subsidiary (an "EMPLOYEE");
(C) "ERISA AFFILIATE" means any entity that is (1) a
member of a "controlled group of corporations," under "common control" or
a member of an "affiliated service group," within the meaning of Section
414(b), (c) or (m) of the Code, (2) required to be aggregated under
Section 414(o) of the Code, or (3) under "common
11
control," within the meaning of Section 4001(a)(14) of ERISA, or any
regulations promulgated or proposed under any of the foregoing, in
each case with the Company or the Subsidiary; and
(D) "RETIRED WELFARE PLAN" means any Benefit Plan that
provides, or has any liability to provide, life insurance or medical,
severance or other employee welfare benefits to any Employee beyond his
or her retirement or termination of employment, except as required by
Section 4980B of the Code.
(p) LABOR RELATIONS; EMPLOYEES. Neither the Company nor the
Subsidiary is bound by a change of control provision or change of control
agreement in respect of any of its Employees. Neither the Company nor the
Subsidiary is delinquent in payments to any of its Employees for any wages,
salaries, commissions, bonuses or other compensation for any services performed
or amounts required to be reimbursed. Each of the Company and the Subsidiary is
in compliance with all applicable laws, rules and regulations respecting
employment, employment practices, occupational health and safety, workers'
compensation, pay equity, labor, terms and conditions of employment and wages
and hours. Neither the Company nor the Subsidiary is bound by or subject to
(and none of its assets or properties is bound by or subject to) any written or
oral, express or implied, commitment or arrangement with any labor union, and no
labor union has requested or, to the best knowledge of the Company, has sought
to represent any of the employees, representatives or agents of the Company or
the Subsidiary, or has bargaining rights in respect of any of the employees,
representatives or agents of the Company or the Subsidiary. There is no labor
strike, dispute, slowdown or stoppage pending or threatened against or involving
the Company or the Subsidiary. To the best knowledge of the Company, other than
the Company's former Vice President--Finance, Xxx Xxxxxxxx, who has resigned, no
salaried employee has any plans to terminate his or her employment with the
Company or the Subsidiary.
(q) LITIGATION; ORDERS. Other than as set forth on SCHEDULE 2(q)
hereto, there is no civil, criminal or administrative action, suit, claim,
notice, hearing, inquiry, proceeding or investigation at law or in equity by or
before any court, arbitrator or similar panel, governmental instrumentality or
other agency (including, without limitation, proceedings, inquiries or
investigations of the Federal Communication Commission (the "FCC")) pending or
threatened against the Company or the Subsidiary or the assets or business of
the Company or the Subsidiary. Neither the Company nor the Subsidiary is
subject to any order, writ, injunction or decree of any court or other
governmental department, commission, board, bureau, agency or instrumentality.
(r) COMPLIANCE WITH LAWS; LICENSES. (i) Each of the Company and the
Subsidiary has complied in all material respects with all federal, state, local
and foreign laws, rules, ordinances, codes, consents, authorizations,
registrations, regulations, decrees, directives, judgements and orders
applicable to it and its business, Neither the Company nor any subsidiary is in
material violation of any judgement, decree, writ, law, statute, rule, or
regulation rendered or enacted respecting telecommunications applicable to it,
or any published interpretation or policy relating thereto.
(ii) Each of the Company and the Subsidiary either has or
intends to procure in a timely manner such permits, licenses, consents,
exemptions, franchises, authorizations and other approvals (each, an
"AUTHORIZATION") of, and has made all filings with and notices to, all necessary
federal, state, local and foreign governmental or regulatory authorities
(including,
12
without limitation, as appropriate, the state public utilities commissions of
Nevada, California, Idaho, Washington, Montana, Utah, Indiana, Kentucky,
Wyoming, and Illinois) and self-regulatory organizations and all courts and
other tribunals, including without limitation, under any applicable
environmental laws, as are necessary to own, lease, license and operate its
respective properties and to conduct its business, including the planned
buildout of the PCS telecommunications network, as described in the Sprint
Agreement. Each such authorization is or will be valid and in full force and
effect, and each of the Company and the Subsidiary is in compliance with all
of the terms and conditions thereof and with the rules and regulations of the
authorities and governing bodies having jurisdiction with respect thereto.
There is no reason to believe that any governmental body or agency is
considering limiting, suspending or revoking any such authorization; and no
event has occurred (including, without limitation, the receipt of any notice
from any authority or governing body) which allows or, after notice or lapse
of time or both, would allow, revocation, suspension or termination of any
such authorization or results or, after notice or lapse of time or both,
would result in any other impairment of the rights of the holder of any such
authorization; and such authorizations contain no restrictions that are
burdensome to the Company or the Subsidiary.
(iii) There are no judgements, decrees or orders issued by the
FCC that could have a material adverse effect upon, or cause material disruption
to, the Company's or the Subsidiary's operations. There is no complaint,
investigation, action or proceeding pending or threatened relating to the
Company's or the Subsidiary's operations, including, without limitation, any
notice of violation, notice of apparent liability or order to show cause, other
than proceedings that affect the PCS industry generally, that could have a
material adverse effect upon, or cause material disruption to, the Company's or
the Subsidiary's operations.
(iv) Neither the Company nor the Subsidiary is in violation of
any judgement, decree, order, writ, law, statute, rule or regulation rendered or
enacted respecting telecommunications applicable to it, or any published
interpretation or policy relating thereto.
(v) No notices, reports or other filings are required to be
made by the Company or the Subsidiary, either prior to or following the
consummation of the transactions contemplated hereby, with, nor are any
consents, registrations, applications or permits required to be obtained by the
Company or the Subsidiary from, any court or governmental agency or other
regulatory body or tribunal or similar entity pursuant to telecommunications
regulatory law in connection with the consummation of the transactions
contemplated hereby.
(s) OFFERING EXEMPTION. Assuming the accuracy of the representations
and warranties contained in Section 3 of this Agreement, each of the offer,
sale, issuance and delivery of the Shares and the Conversion Shares is exempt
from the prospectus and registration requirements of the Securities Act.
(t) RELATED TRANSACTIONS. Other than as set forth on SCHEDULE 2(t)
hereto, neither the Company nor the Subsidiary has been a party to any
transactions, agreements, arrangements or understandings that would be required
to be disclosed under Item 404 of Regulation S-K promulgated under the
Securities Act.
(u) TAXES.
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(i) Each of the Company and the Subsidiary has duly and
timely filed its Tax Returns (as defined below) with the appropriate
Governmental Authority (as defined below) and has duly, completely and
correctly reported all income and all other amounts and information
required to be reported thereon. Each of the Company and the Subsidiary
has duly and timely paid all Taxes (as defined below), including all
installments on account of Taxes for the year, that are due and payable
by it, whether or not assessed by the appropriate Governmental
Authority. Each of the Company and the Subsidiary has established
reserves that are reflected on the Balance Sheet that are at least equal
to the amount of all Taxes that are not yet due and payable.
(ii) Neither the Company nor the Subsidiary has requested, or
entered into any agreement or other arrangement or executed any waiver
providing for, any extension of time within which:
(A) to file any Tax Return covering any Taxes for which
the Company or the Subsidiary is or may be liable;
(B) the Company or the Subsidiary is required to pay or
remit any Taxes or amounts on account of Taxes; or
(C) any Governmental Authority may assess or collect
Taxes for which the Company or the Subsidiary is or may be liable.
(iii) (A) There are no actions, suits, proceedings,
investigations, audits or claims pending or threatened against the Company or
the Subsidiary in respect of any Taxes, (B) there are no matters under
discussion, audit or appeal with any Governmental Authority relating to Taxes,
(C) there are no rulings, requests for rulings or closing agreements relating to
the Company or the Subsidiary that could affect its liability for Taxes for any
period, (D) neither the Company nor the Subsidiary is a party to or is bound by
any Tax allocation or Tax sharing agreement or arrangement, and neither the
Company nor the Subsidiary has any current contractual obligation to indemnify
any other person with respect to Taxes, (E) no taxing authority in a
jurisdiction where the Company or the Subsidiary does not file Tax Returns has
made any claim, assertion or threat that the Company or the Subsidiary is or may
be subject to taxation by such jurisdiction, (F) neither the Company nor the
Subsidiary has agreed in writing to, nor is it required to include in income,
any adjustment by reason of a change in accounting method or otherwise, nor do
the Company or the Subsidiary have any knowledge that any taxing authority has
proposed, or is considering, any such change in accounting method, and (G)
neither the Company nor the Subsidiary is a personal holding corporation within
the meaning of Section 542 of the Code.
(iv) For purposes of this Agreement:
(A) "GOVERNMENTAL AUTHORITY" means any government,
regulatory authority, governmental department, agency, commission, board,
tribunal, or court or other law, rule or regulating-making entity having
or purporting to have jurisdiction on behalf of any nation, state or
other subdivision thereof or any, municipality, district or other
subdivision thereof;
14
(B) "TAXES" includes all taxes, duties, fees,
assessments, imposts, levies and other charges of any kind whatsoever
imposed by any Governmental Authority, together with all interest,
penalties, fines, additions to tax or other additional amounts imposed in
respect thereof, including those levied on, or measured by, or referred
to as income, gross receipts, profits, capital, transfer, land transfer,
sales, goods and services, use value-added, excise, stamp, withholding,
business, franchising, property, payroll, employment, health, social
services, education and social security taxes, and all surtaxes, customs
duties, import and export taxes, and license, franchise and registration
fees; and
(C) "TAX RETURN" includes all returns, reports,
declarations, elections, notices, filings, information returns and
statements filed or required to be filed with any Governmental Authority
in respect of Taxes.
(v) ENVIRONMENTAL PROTECTION. Each of the Company and the Subsidiary
has conducted and is conducting its business in compliance with all applicable
Environmental Laws (as defined below). Neither the Company nor the Subsidiary
has caused, arranged or allowed, or contracted with any party for, the
transportation, treatment, storage or disposal of any Hazardous Substance (as
defined below) in connection with the operation of its business or otherwise.
To the best knowledge of the Company, no Hazardous Substance has been Released
(as defined below) into the environment on or from any real property currently
or formerly owned, leased or controlled by the Company or the Subsidiary, which
Release is required or may be required under applicable Environmental Laws to be
abated or remediated by the Company or the Subsidiary. To the best of the
Company's knowledge, there are no past or present Releases, conditions, events,
circumstances, facts, activities, practices, incidents, actions, or omissions
that could reasonably be expected to form the basis of any claim, action, suit,
proceeding, order, or administrative sanction against or involving the Company
or the Subsidiary based on any violation of any Environmental Law or that is
reasonably likely to require the Company or the Subsidiary to incur any material
expense in connection therewith. For purposes of this Agreement:
(i) "ENVIRONMENTAL LAWS" means all laws, rules,
regulations, orders, ordinances, codes and judgements of any
Governmental Authority relating in full or in part to the
protection of the environment, and employee and public health and
safety, and includes those relating to the storage, generation,
use, handling, manufacture, processing, labeling, transportation,
treatment and Release of Hazardous Substances in effect and as
amended as of the date of this Agreement;
(ii) "HAZARDOUS SUBSTANCES" means any pollutant,
contaminant, waste of any nature, hazardous substance, hazardous
material or toxic substance as defined, judicially interpreted or
identified in any Environmental Law, including any asbestos,
asbestos containing materials, petroleum and/or other hydrocarbons
or petroleum by-products; and
(iii) "RELEASE" shall have the meaning prescribed in any
Environmental Law and includes any release, spill, leak, pumping,
pouring, emission, emptying, discharge, injection, escape, leaching,
disposal, dumping, deposit, spraying, burial, abandonment, incineration,
seepage, or placement.
15
(w) CONSENTS. Other than those consents that have been obtained and
are set forth on SCHEDULE 2(w) hereto, no permit, authorization, consent or
approval of or by, or any notification of or filing with, any person
(governmental or private) is required in connection with the:
(i) execution, delivery and performance by the Company of
this Agreement, the Certificates of Designations or the Shareholders'
Agreements;
(ii) the consummation by the Company of the transactions
contemplated hereby or thereby; or
(iii) the issuance, sale or delivery of the Shares, the Voting
Preferred Shares or the Conversion Shares.
(x) INSURANCE. All material assets of the Company and the
Subsidiary that are of an insurable character are covered by insurance with
reputable insurers against risks of liability, casualty and fire and other
losses and liabilities customarily obtained to cover comparable businesses
and assets in amounts, scope and coverage which are consistent with prudent
industry practice. Neither the Company nor the Subsidiary is in default of
any insurance policy maintained by it. All such policies are in full force
and effect and all premiums due with respect thereto have been paid. Neither
the Company nor the Subsidiary has failed to give any notice or present any
material claim under any such insurance policy in due and timely fashion or
as required by any such insurance policy, and has not otherwise, through any
act, omission or non-disclosure, jeopardized or impaired full recovery of any
claim under such policies, and there are no material claims by the Company or
the Subsidiary under any such policy to which any insurer is denying
liability or defending under a reservation of rights or similar clause.
Neither the Company nor the Subsidiary has received notice of any pending or
threatened termination of any insurance policy or premium increase for the
current policy period, and the consummation of the transactions contemplated
by this Agreement will not result in any such termination or premium increase.
(y) BROKERS. Neither the Company, nor the Subsidiary, nor any officer,
director, employee or shareholder of the Company or the Subsidiary, has employed
any broker, finder or placement agent in connection with the transactions
contemplated by this Agreement.
(z) REAL PROPERTY. Neither the Company nor the Subsidiary owns any
real property; except as set forth on SCHEDULE 2(z) hereto, neither the Company
nor the Subsidiary leases any real property. Each of the Company and the
Subsidiary has unencumbered leasehold title to its leased real properties, free
and clear of all imperfections of title and all Encumbrances, other than:
(i) those consisting of zoning or planning restrictions,
easements, permits and other restrictions or limitations on the use of
such property or irregularities in title thereto that, individually and
in the aggregate, do not materially impair the use of such property;
(ii) warehousemen's, mechanics', carriers', landlords',
repairmen's or other similar Encumbrances arising in the ordinary course
of business and securing obligations not yet due and payable;
16
(iii) Encumbrances for the benefit of the lenders under the
Credit Agreement; and
(iv) other Encumbrances that, individually and in the
aggregate, do not materially impair the use of such property or the
ability to obtain financing by using such property as collateral. There
are no options, rights of first refusal, rights of first offer or other
similar rights with respect to any such real property.
With respect to each lease of real property to which the Company or the
Subsidiary is a party, so long as the Company or the Subsidiary duly performs
its obligations under such lease within applicable notice and grace periods:
(v) the rights of the Company or the Subsidiary under such
lease may not be terminated; and
(vi) possession of such real property and the use and
enjoyment thereof by the Company or the Subsidiary may not be disturbed
by any landlord, overlandlord, mortgagee or other superior party.
Neither the Company nor the Subsidiary is obligated to purchase any real
property currently leased by it, and no lease for real property is required to
be accounted for under GAAP as a capitalized lease. Neither the Company nor the
Subsidiary is a real property holding company as defined in Section 897 of the
Code.
(aa) INVESTMENT BANKING SERVICES. Neither the Company nor the
Subsidiary is a party to any Contract that grants rights to any third party with
respect to the performance of investment banking services for it, including,
without limitation, with respect to its sale or a public offering, including an
initial public offering, of its securities, other than:
(i) any such agreement with Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation ("DLJ"); and
(ii) the agreement dated as of January 12, 2000 with Verocom
Group, Inc.
(bb) PREVIOUS ISSUANCES EXEMPT. All securities issued by the Company
or the Subsidiary prior to the date hereof have been issued in transactions
exempt from the prospectus and registration requirements of the Securities Act
and all applicable state securities or "blue sky" laws (collectively,
"Securities Laws"), or have been distributed or registered, as the case may be,
in compliance with all Securities Laws. Neither the Company nor the Subsidiary
has violated any Securities Laws in connection with the issuance of any
securities prior to the date hereof.
(cc) PUBLIC UTILITY HOLDING COMPANY ACT; INVESTMENT COMPANY ACT.
Neither the Company nor the Subsidiary is a "holding company," a "subsidiary
company" of a "holding company," or an "affiliate" of a "holding company," as
such terms are defined in the Public Utility Holding Company Act of 1935, as
amended. Neither the Company nor the Subsidiary is an "investment company," or
an "affiliated person" or a "principal underwriter" of an "investment company,"
as such terms are defined in the Investment Company Act of 1940, as amended.
17
(dd) DISCLOSURE. The documents and information disclosed and delivered
to the Investor in connection with the transactions contemplated hereby, taken
as a whole, do not contain an untrue statement of a material fact and do not
fail to state any material fact necessary to make the statements therein not
misleading, which untrue statements or omissions could reasonably be expected to
be material to the Investor's evaluation of the transactions contemplated
hereby.
(ee) FINANCING COMMITMENTS. The Company has received commitments with
respect to:
(i) a senior credit facility providing the Company with a
$120 million Term Loan A, a $75 million Term Loan B, and no less than $55
million of revolving credit borrowings (the "BANK FINANCING"), a copy of
which is attached as SCHEDULE 2(ee)(i) to this Agreement; and
(ii) a high yield bridge financing providing the Company with
no less than $125 million of gross proceeds (the "HIGH YIELD BRIDGE
FINANCING"), a copy of which is attached as SCHEDULE 2(ee)(ii) to this
Agreement.
Each of the Bank Financing commitment and the High Yield Bridge Financing
commitment has been duly authorized, executed and delivered by the parties
thereto, and constitutes the valid and binding obligation of such parties,
enforceable in accordance with its terms. The Company has no reason to believe
that the conditions to funding contained in the Bank Financing commitment and
the High Yield Bridge Financing commitment will not be satisfied on or prior to
the Additional Closing Date.
(ff) SUFFICIENT FINANCING. SCHEDULE 2(ff)(i) hereto sets forth the use
of proceeds of the sale of the Initial Shares to the Investor, and SCHEDULE
2(ff)(ii) hereto sets forth the sources and uses of funds with respect to the
sale of the Additional Shares to the Investor, and the consummation of the Bank
Financing and the High Yield Bridge Financing. The proceeds of the sale of the
Shares to the Investor, together with:
(i) the proceeds of the Bank Financing;
(ii) the proceeds of the High Yield Bridge Financing; and
(iii) reasonably anticipated cash flows from operations,
are sufficient, without any additional financing, to finance the Company's
business plan through the end of the fiscal year ending December 31, 2010.
(gg) SPRINT AGREEMENT. The Sprint Agreement has been duly authorized,
executed and delivered by the parties thereto, and constitutes the valid and
binding obligation of such parties, enforceable in accordance with its terms.
In accordance with the terms of the Sprint Agreement, (i) the Company and the
Subsidiary presently have the right to operate in the Reno/Tahoe territory, and
(ii) upon execution and delivery of this Agreement, the Bank Financing
commitment and the High Yield Bridge Financing commitment, and affirmation by
Sprint PCS that the conditions to financing have been met, the Company and the
Subsidiary will have the right to operate in the jurisdictions listed on
SCHEDULE 2(gg) hereto.
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(hh) ANTI-DILUTION; CHANGE OF CONTROL. Other than as set forth on
SCHEDULE 2(hh) hereto, neither the execution of this Agreement, the Certificates
of Designations or the Shareholders' Agreements, nor the consummation of the
transactions contemplated hereby and thereby, will:
(i) afford any holder of the Series A Preferred Stock, the
BET Warrant, the Paribas Warrant or any other security of the Company
that is exercisable or exchangeable for Common Stock with an
anti-dilution adjustment or other similar right or protection; or
(ii) afford any holder of the Series A Preferred Stock, the
BET Warrant, the Paribas Warrant or any other security of the Company
with any rights or protections, including, without limitation, rights to
require the Company to redeem or repurchase any such securities, as a
result of a "change of control" or other similar provision applicable
thereto.
(ii) FOUNDERS STOCK AGREEMENT. Pursuant to the terms of the
Founders Stock Agreement, (i) no shares of Non-Voting Common Stock will vest
or convert into shares of Common Stock in connection with the transactions
contemplated hereby, other than (A) the vesting and conversion of 331,027
shares of Non-Voting Common Stock held by the Founders into shares of Common
Stock upon consummation of the Initial Closing, and (B) the vesting and
conversion of 258,567 shares of Non-Voting Common Stock held by the Founders
into shares of Common Stock upon consummation of the Additional Closing; and
(ii) no additional shares of Non-Voting Common Stock will vest or convert
into shares of Common Stock following the Additional Closing.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE INVESTOR. The
Investor hereby represents and warrants to the Company as of the date hereof, as
of the Initial Closing Date, and as of the Additional Closing Date (as though
made as of each such date) as follows:
(a) INVESTMENT INTENT. The Investor is acquiring the Shares for
investment only and not with a view to resale or distribution in a manner that
would violate applicable securities laws.
(b) ACCREDITED INVESTOR. The Investor is, and each person in whose
name the Shares will be registered pursuant to Section 1(e) will be, an
"Accredited Investor," as such term is defined in Rule 501(a)(1), (2), (3) (7)
or (8) under the Securities Act.
(c) NO REGISTRATION. The Investor understands that the Shares have
not been and will not be registered under the Securities Act or the securities
laws of any state of the United States, and that the sale contemplated hereby is
being made in reliance on an exemption from such registration requirements. The
Investor understands and agrees that the Shares may not be reoffered or resold
in the United States or by or on behalf of a U.S. Person (as defined in
Regulation S promulgated under the Securities Act) or a person in the United
States unless the Shares have been registered under the Securities Act and any
applicable state securities laws or an exemption from such registration
requirements is available. The Investor understands that the certificates
representing the Shares will bear a legend to such effect.
19
SECTION 4. COVENANTS OF THE COMPANY.
(a) INITIAL PUBLIC OFFERING. The Company shall use its best effort to
consummate, not later than April 15, 2000 (unless the Sprint Agreement is
amended to permit a later date, but in any event not later than June 30, 2000),
a registered public offering of equity securities that generates at least $100
million in gross proceeds to the Company. Without limiting the foregoing, the
Company shall use its best efforts to:
(i) prepare and file with the Securities and Exchange
Commission (the "COMMISSION") a registration statement relating to such
offering on the appropriate form; and
(ii) file such amendments to such registration statement and
take such other actions as may be necessary to cause such registration
statement to be declared effective by the Commission.
(b) CONDUCT OF BUSINESS. (i) Except as the Investor may otherwise
consent to in writing, from the date hereof and through the Termination Date (as
defined below), the Company shall not, and shall cause the Subsidiary not to, do
any thing or take any action or omit to do anything or to take any action that:
(ii) would cause any representation or warranty of the Company
in this Agreement to be untrue as of the Additional Closing Date, other
than any such action or omission in the ordinary course of business and
expressly contemplated by the Business Plan that would cause Schedules
2(k) and 2(i) (as such schedule relates to repayment of the debt owed to
BET and potential qualification in additional states) to be incomplete;
or
(iii) would be a Major Transaction under the Additional
Shareholders' Agreement if the Additional Shareholders' Agreement were in
effect.
For purposes of this Agreement, "TERMINATION DATE" means the first to occur of
(i) the Additional Closing Date, and (iii) the date on which this Agreement is
terminated in accordance with Section 7 hereof.
(c) PROVISION OF FINANCIAL INFORMATION. From the date hereof and
through the Termination Date, the Company agrees to furnish to the Investor the
following:
(i) within 15 days after the end of each fiscal month,
internal monthly financial and operating statements for such month
prepared by the Company under the direction of a senior executive officer
of the Company, together with a statement certified by the Chief
Financial Officer, Vice President--Finance or Chief Executive Officer of
the Company certifying that such financial statements:
(A) are in accordance with the books and records of the
Company and the Subsidiary; and
(B) fairly present the consolidated financial position
and results of operations of the Company as of the dates and for the
periods presented.
20
(ii) within 30 days after the end of each quarterly fiscal
period, unaudited balance sheets and an income statement as of the end of
such period, together with statements of retained earnings and cash flow
for such period ("QUARTERLY FINANCIALS") and a letter or memorandum
discussing the summary financial information for such period and setting
forth a comparison by reasonable categories of such financial information
to the comparable figures for the prior year and a reasonable explanation
of any differences (a "MANAGEMENT LETTER") (with the Management's
Discussion and Analysis of Financial Condition and Results of Operation
section of any Form 10-Q or Form 10-K or similar document filed with the
Commission for such quarter being sufficient to satisfy this
requirement), together with a statement certified by the Chief Financial
Officer, Vice President--Finance or Chief Executive Officer of the
Company certifying that such financial statements:
(A) are in accordance with the books and records of the
Company and the Subsidiary;
(B) have been prepared in accordance with GAAP; and
(C) fairly present the consolidated financial position
and results of operations of the Company as of the dates and for the
periods presented.
(iii) within 90 days (or such lesser period as is either (A)
required under applicable laws for similar disclosure to any
securityholders of the Company or (B) in which similar disclosure is
provided to other financing sources of the Company, including, without
limitation, any banks) after the end of each fiscal year, (1) audited
balance sheets and an income statement as of the end of such fiscal year,
together with statements of retained earnings and cash flow for such
fiscal year, all in reasonable detail and certified by a recognized
national firm of independent accountants selected by the Company as
presenting fairly the financial position and results of operations of the
Company and as having been prepared in accordance with GAAP, including
their opinion thereon, (2) the accounting firm's management letter, and
(3) a Management Letter (with the Management's Discussion and Analysis of
Financial Condition and Results of Operation section of any Form 10-Q or
Form 10-K or similar document filed with the Commission for such quarter
being sufficient to satisfy this requirement); and
(iv) promptly upon becoming available, (A) copies of all
financial statements, reports, press releases, notices, proxy statements
and other documents sent by the Company to its shareholders or released
to the public and copies of all regular and periodic reports, if any,
filed by the Company with any securities regulatory agency or any
securities exchange, and (2) any other financial or other information
available to management of the Company as the Investor shall have
reasonably requested.
The financial statements and information delivered pursuant to
this paragraph (c) shall be the consolidated and consolidating financial
statements of the Company and the Subsidiary.
(d) REQUIRED NOTICES. At all times from the date hereof and through
the Termination Date, the Company shall promptly give written notice to the
Investor of:
21
(i) any facts or circumstances or the occurrence of any event
or the failure of any event to occur, which has or is reasonably likely
to have, (A) a material adverse effect on the condition (financial or
otherwise), operations, properties, prospects, results of operations,
business, assets, or liabilities of the Company or the Subsidiary or (B)
a material adverse effect on the ability of the Company to consummate the
transactions contemplated hereby or to satisfy its obligations hereunder;
(ii) any complaints, investigations or hearings (or
communications indicating that the same may be contemplated) of any
authority with respect to the Company or the Subsidiary or the
transactions contemplated hereby;
(iii) the institution or the threat of institution of any
litigation or similar action with respect to the Company or the
Subsidiary or the consummation of the transactions contemplated hereby;
and
(iv) the occurrence of any event, or the discovery of any
facts or circumstances which will or is reasonably likely to result in
the failure (A) of any representation or warranty set forth herein to
continue to be true or (B) to satisfy any condition set forth in Section
5 or 6.
The Company shall keep the Investor apprised of material changes with respect to
such events promptly upon the occurrence of such events.
(e) NO SHOP. Other than in connection with the sale of the Company as
an entirety, at all times from the date hereof through the earliest of the
consummation of a Qualifying Public Offering (as defined below), the Additional
Closing Date and December 31, 2001, the Company shall not, and shall not
authorize any of its officers or directors or any other person on its behalf to,
solicit, encourage, negotiate or accept any offer from any party concerning:
(i) the issuance or sale any equity securities of the
Company, other than in a registered, public offering of equity securities
in the United States; or
(ii) any other agreement or arrangement that would be
inconsistent with the consummation of the transactions contemplated
hereby,
(in the case of either clause (i) or (ii), a "PROHIBITED TRANSACTION"), nor
shall the Company participate in any discussions or negotiations regarding, or
furnish any information with respect to, or facilitate in any other manner, any
Prohibited Transaction; PROVIDED, HOWEVER, that, beginning July 1, 2000, the
Company may participate in discussions or negotiations regarding, furnish
information with respect to, facilitate and consummate a Prohibited Transaction
if and only if, prior to consummating any Prohibited Transaction, the Company
shall offer the Investor the opportunity to consummate the Additional Purchase
on the terms set forth in this Agreement, which offer shall be in writing and
shall set forth in reasonable detail the terms of the proposed Prohibited
Transaction (the "NO SHOP OFFER"). The Investor shall have 20 days to review
the No Shop Offer, during which time the Company shall provide the Investor with
such information concerning the Company (including, without limitation, the
financial and other information of the type reviewed by the Investor prior to
the date of this Agreement) that the Investor reasonably requests. Prior to the
expiration of such 20-day period, the Investor may notify the Company in writing
(the "ACCEPTANCE NOTICE") that either:
22
(A) it is accepting the No Shop Offer, in which case the
Company and the Investor shall, on the date set forth in the Acceptance
Notice, which date shall be no less than five days and no more than 30
days from the giving of the Acceptance Notice, consummate the Additional
Purchase in accordance with the terms of this Agreement, and the Company
shall not consummate the Prohibited Transaction (except that the Company
may consummate the Prohibited Transaction following the Additional
Closing if done so in accordance with the terms hereof and of the
Shareholders' Agreement and the Certificates of Designations);
(B) it is rejecting the No Shop Offer, but it is electing to
participate in the Prohibited Transaction, in which case the Investor
shall have the right to participate in the Prohibited Transaction at the
level, not to exceed one-third of the total Prohibited Transaction, set
forth in the Acceptance Notice; PROVIDED, HOWEVER, that the Investor's
participation in the Prohibited Transaction shall be on identical terms
to the participation by the other investors in the Prohibited
Transaction; or
(C) it is rejecting the No Shop Offer and is electing not to
participate in the Prohibited Transaction.
In the event that the Investor fails to deliver an Acceptance Letter prior to
the expiration of such 20-day period, the Investor shall be deemed to have
rejected the No Shop Offer and to have elected not to participate in the
Prohibited Transaction. On or prior to the date hereof, the Company shall
terminate any existing discussions regarding a possible Prohibited Transaction.
The Company shall promptly notify the Investor in writing of any inquiries or
proposals from any third party regarding a possible Prohibited Transaction.
(f) USE OF FUNDS. The Company shall use the proceeds of the sale of
the Initial Shares in accordance with SCHEDULE 2(ff)(i) hereto, and shall use
the proceeds of the sale of the Additional Shares, the Bank Financing and the
High Yield Bridge Financing (or any high yield financing consummated in lieu
thereof) in accordance with SCHEDULE 2(ff)(ii) hereto.
SECTION 5. CONDITIONS TO OBLIGATIONS OF THE INVESTOR. The
obligations of the Investor to purchase the Initial Shares at the Initial
Closing and to purchase the Additional Shares at the Additional Closing are
subject to the satisfaction, on or prior to the Initial Closing Date or the
Additional Closing Date, as the case may be, of the following conditions:
(a) REPRESENTATIONS TRUE. Each representation and warranty made by
the Company herein shall be true and correct, on and as of the Initial Closing
Date or the Additional Closing Date, as the case may be; PROVIDED, HOWEVER, that
on the Additional Closing Date, Schedules 2(k) and 2(i) (as such schedule
relates to repayment of the debt owed to BET and potential qualification in
additional states) hereto may be amended to include any matters that have arisen
by virtue of actions taken by the Company since the Initial Closing Date,
provided that such actions were not taken in violation of Section 4(b) hereof.
(b) COMPLIANCE WITH COVENANTS. The Company shall have complied with
all agreements and covenants contained herein or in the Shareholders' Agreements
required to be performed by it on or prior to the Initial Closing Date or the
Additional Closing Date, as the case may be.
23
(c) OFFICER'S CERTIFICATE. The Company shall have delivered to the
Investor a certificate of a senior executive officer of the Company, in form and
substance satisfactory to the Investor, certifying that the conditions set forth
in paragraphs (a), (b), (g), (h) and (j) have been satisfied.
(d) SECRETARY'S CERTIFICATE. The Company shall have delivered to the
Investor a certificate of its Secretary, in form and substance satisfactory to
the Investor, certifying:
(i) a true and correct copy of the Certificate of
Incorporation of the Company, including all amendments thereto, certified
as of a recent date by the Secretary of State of the State of Delaware;
(ii) a true and correct copy of the by-laws of the Company;
(iii) a certificate of good standing of the Company issued as
of a recent date by the Secretary of State of the State of Delaware;
(iv) resolutions of the board of directors of the Company
authorizing the execution and delivery by the Company of this Agreement,
the Certificates of Designations and the Shareholders' Agreements, and
the performance of the Company's obligations hereunder and thereunder;
(v) true and correct forms of stock certificates for the
Senior Preferred Stock, the Voting Preferred Stock and the Common Stock;
(vi) true and correct copies of all governmental and
third-party consents, approvals and filings required to be obtained or
made in order to consummate the transactions contemplated hereby; and
(vii) the incumbency of the officers of the Company.
(e) CERTIFICATES OF DESIGNATIONS. Each of the Certificates of
Designations shall have been filed with the Secretary of State of the State of
Delaware, and evidence thereof satisfactory to the Investor shall have been
provided to the Investor.
(f) SHAREHOLDERS' AGREEMENTS. The Initial Shareholders' Agreement or
the Additional Shareholders' Agreement, as the case may be, shall have been duly
executed and delivered by the Company.
(g) FINANCING COMMITMENTS. The Company shall have received:
(i) commitments, in form and substance satisfactory to the
Investor, with respect to the Bank Financing and the High Yield Bridge
Financing; and
(ii) a letter from DLJ, dated as of the Initial Closing Date,
in form and substance satisfactory to the Investor, addressed to the
Company and entitling the Investor to rely thereon, indicating that DLJ
is highly confident of the ability to consummate a Qualifying Public
Offering on or prior to June 30, 2000.
The Company shall have performed all of its obligations under the Bank Financing
commitment and the High Yield Bridge Financing commitment, including the payment
of all fees thereunder,
24
required to be performed through the Initial Closing Date or the Additional
Closing Date, as the case may be.
(h) SPRINT AGREEMENT. None of the Initial Closing, the Additional
Closing, the Bank Financing or the High Yield Bridge Financing shall violate or
conflict with the terms of the Sprint Agreement.
(i) OPINION OF COUNSEL. The Investor shall have received from
Xxxxxxxxx Xxxxxxx P.A., counsel to the Company, an opinion addressed to the
Investor, dated as of the Initial Closing Date or the Additional Closing Date,
as the case may be, in form and substance satisfactory to the Investor.
(j) REGISTRATION RIGHTS AGREEMENT. The Amended and Restated
Registration Rights Agreement, dated as of the date hereof, by and among the
Company, the Founders, the holders of Series A Preferred Stock listed on the
signature pages thereto, Paribas, BET and the Investor, shall have been duly
executed and delivered by the Company and the other parties thereto.
(k) AMENDMENT TO FOUNDERS STOCK AGREEMENT. The Second Amendment to
the Founders Stock Agreement, dated as of February 22, 2000, by and among the
Company and the Founders, shall have been duly executed and delivered by the
Company and the Founders.
(l) NO PROHIBITION. No governmental or regulatory body or court of
competent jurisdiction shall have enacted, issued, promulgated or enforced any
statute, rule, regulation, executive order, decree, judgement, preliminary or
permanent injunction or other order which is in effect and which prohibits,
enjoins or otherwise restrains the consummation of the transactions contemplated
hereby.
(m) CONSENTS. Each governmental or third party consent, approval or
filing required to be obtained or made and any waiting period required to have
expired in order to consummate the transactions contemplated by this Agreement
shall have been obtained, or made, as the case may be, and any such waiting
period shall have expired.
SECTION 6. ADDITIONAL CONDITIONS TO OBLIGATIONS OF THE INVESTOR. In
addition to the conditions set forth in Section 5 hereof, the obligation of the
Investor to purchase the Additional Shares at the Additional Closing is subject
to the satisfaction, on or prior to the Additional Closing Date, of the
following additional conditions:
(a) INITIAL PURCHASE CONSUMMATED. The Initial Purchase shall
previously have been consummated in accordance with the terms of this Agreement.
(b) NOTICE BY THE COMPANY. The Company shall have notified the
Investor in writing, no later than 5:00 p.m. New York City time on June 16,
2000, that it is requesting that the Investor purchase the Additional Shares.
(c) OTHER FINANCINGS CONSUMMATED. Prior to or simultaneously with the
Additional Closing:
(i) the Company shall have executed, or shall execute
simultaneously with the Additional Closing, a definitive credit agreement
with respect to the Bank Financing,
25
and the Term Loan B facility thereunder shall have been funded or shall
be funded simultaneously with the Additional Closing; and
(ii) the Company shall have consummated, or shall consummate
simultaneously with the Additional Closing, the High Yield Bridge
Financing or other high yield financing providing the Company with no
less than $125 million of gross proceeds (in either case, the "HIGH YIELD
FINANCING").
On the Additional Closing Date, the Company shall deliver to the Investor:
(iii) a letter, addressed to the Investor and executed on
behalf of the Company by a senior executive officer of the Company, in
form and substance satisfactory to the Investor, entitling the Investor
to rely on the representations and warranties of the Company contained in
the documentation relating to the Bank Financing and in the documentation
relating to the High Yield Financing; and
(iv) a letter, addressed to the Investor, from Xxxxxxxxx
Traurig P.A., counsel to the Company, in form and substance satisfactory
to the Investor, entitling the Investor to rely on the opinions of such
counsel provided to the lender(s) of the Bank Financing and to the
underwriter(s) or initial purchaser(s) of the High Yield Financing.
(d) NO QUALIFYING PUBLIC OFFERING. The Company shall not have entered
into any underwriting, purchase or other similar agreement relating to a
registered public offering of equity securities generating at least $50 million
in gross proceeds to the Company (a "QUALIFYING PUBLIC OFFERING"), unless such
agreement has expired, has been terminated or otherwise is no longer in full
force and effect. The condition contained in this paragraph (d) shall in no way
relieve the Company from its obligations set forth in Section 4(a) hereof.
(e) CONDITION TO SPRINT AGREEMENT SATISFIED. The condition set forth
in Section 11.3.6 of the Sprint Agreement, as amended by Section 7 of Addendum I
to the Sprint Agreement and Section 2 of Addendum II to the Sprint Agreement,
shall have been satisfied, or shall be satisfied simultaneously with the
Additional Closing.
SECTION 7. TERMINATION. The obligation of the parties hereunder may
be terminated by the mutual written consent of the Company and the Investor. In
addition, the obligations of the parties hereunder will terminate automatically
without further action on the part of the Company or the Investor and without
liability on the part of the Company or the Investor (provided that neither
party is otherwise in breach or default of its obligations under this Agreement)
if (i) on or prior to the Additional Closing Date, the Company consummates a
Qualifying Public Offering, or (ii) the Additional Closing shall not have
occurred on or before June 30, 2000. Notwithstanding any termination of this
Agreement, the provisions of this Section 7 and of Section 4(e) and Sections 9
through 23 shall continue to be in full force and effect.
SECTION 8. REPURCHASE OF INITIAL SHARES. In the event that (a) the
Company does not consummate a Qualifying Public Offering on or prior to June
30, 2000 and (b) the Additional Closing has not occurred on or prior to June
30, 2000, then the Company is obligated to repurchase the Initial Shares no
later than June 30, 2001 for an aggregate repurchase price in cash of
$25,000,000, together with interest on such amount commencing on June 30,
2000 through the
26
repurchase date. The interest rate applicable to such repurchase shall
initially be 7% and shall increase by 2.5% each 90 days following June 30,
2000 until such repurchase is consummated.
SECTION 9. TRANSFER TAXES. The Company agrees that it will pay, and
will hold the Investor harmless from any and all liability with respect to, any
transfer, documentary or stamp taxes ("TRANSFER TAXES") that may be determined
to be payable in connection with the execution and delivery of this Agreement or
any modification, amendment or alteration of the terms or provisions of this
Agreement, and that it will similarly pay and hold the Investor harmless from
all such Transfer Taxes in respect of the issuance of any of the Shares to the
Investor.
SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties contained herein shall survive the Initial
Closing and the Additional Closing and shall in no way be affected by any
investigation of the subject matter thereof made by or on behalf of the
Investor. All statements contained in any certificate or other instrument
delivered by or on behalf of the Company pursuant to this Agreement shall
constitute additional representations and warranties by the Company under this
Agreement.
SECTION 11. EXPENSES. The Company hereby agrees to pay its own
expenses, and to pay or promptly to reimburse the Investor for all out-of-pocket
expenses incurred by the Investor in connection with the transactions
contemplated by this Agreement, including, without limitation, fees and expenses
of counsel to the Investor.
SECTION 12. INDEMNIFICATION.
(a) GENERAL INDEMNIFICATION. The Company hereby agrees to indemnify,
defend and hold the Investor and its affiliates, and each of their respective
officers, directors, partners, managing directors, affiliates, employees,
agents, consultants, representatives, successors and assigns (each, an "INVESTOR
ENTITY") harmless from and against all Losses (as defined below) incurred or
suffered by an Investor Entity (whether incurred or suffered directly or
indirectly through ownership of Shares, Voting Preferred Shares or Conversion
Shares) arising out of, relating to, or resulting from any breach of any of the
representations, warranties, covenants or agreements made by it in this
Agreement or in any agreement, certificate or other instrument delivered
pursuant hereto including, without limitation, the Certificates of Designations
and the Shareholders' Agreements. For purposes of this Agreement, "LOSSES"
means all claims, losses (including, without limitation, losses of earnings),
liabilities, obligations, payments, damages (actual, punitive or consequential),
charges, judgements, fines, penalties, amounts paid in settlement, costs and
expenses (including, without limitation, interest which may be imposed in
connection therewith), costs and expenses of investigation, actions, suits,
proceedings, demands, assessments and fees, expenses and disbursements of
counsel, consultants and other experts.
(b) INDEMNIFICATION PRINCIPLES. Any indemnification payment by the
Company to the Investor pursuant to this Section 12 shall include an additional
amount so that the Investor does not, directly or indirectly, bear any portion
of such payment made by the Company on account of the Investor's direct or
indirect investment in the Company as contemplated by this Agreement. Any
payment by the Company to the Investor pursuant to this Section 12 shall be
treated for federal income tax purposes as a purchase price adjustment.
(c) CLAIM PROCEDURE. (i) Any Investor Entity seeking indemnification
under this Section 12 shall, promptly upon becoming aware of the facts
indicating that a claim for indemnification
27
may be warranted, give a claim notice relating to such Loss (a "CLAIM
NOTICE") to the Company, which Claim Notice shall specify the nature of the
claim with reasonable specificity; PROVIDED, HOWEVER, that a failure or delay
in giving a Claim Notice shall not affect the obligation of the Company to
provide indemnification hereunder unless, and only to the extent that, the
Company is materially prejudiced thereby.
(ii) If an Investor Entity determines to seek indemnification
under this Section 12 with respect to Losses resulting from the assertion
of liability by a third party, the Company shall be entitled, if it so
elects by written notice delivered to such Investor Entity within 10 days
after receiving the applicable Claim Notice, to assume the defense
thereof with counsel satisfactory to such Investor Entity.
Notwithstanding the foregoing, such Investor Entity shall have the right
to employ its own counsel to participate in its defense in any such case,
but the fees and expenses of such counsel shall be at its own expense
unless (A) the Company shall not have employed counsel satisfactory to
the Investor Entity to represent the Investor Entity within a reasonable
time after delivery of the notice referred to in the preceding sentence
or (B) such Investor Entity shall reasonably determine that there is a
conflict of interest between such Investor Entity and the Company with
respect to such claim, in each of which case the fees and expenses of
such counsel shall be borne by the Company. The Company shall not,
without such Investor Entity's written consent, settle or compromise any
of such claims, or consent to entry of any judgement in respect thereof,
unless such settlement, compromise or consent includes as an
unconditional term thereof the giving by the claimant or the plaintiff to
such Investor Entity a release from all liability in respect of such
claims.
(iii) In the event that an Investor Entity asserts the
existence of a claim with respect to Losses other than claims resulting
from the assertion of liability by third parties, the prevailing party
shall be entitled to reimbursement of costs and expenses incurred in
connection with such claim, including, without limitation, attorney fees.
SECTION 13. REMEDIES. In case any one or more of the covenants or
agreements set forth in this Agreement shall have been breached by the Company,
the Investor may proceed to protect and enforce its rights either by suit in
equity and/or by action at law, including, but not limited to, an action for
damages as a result of any such breach and/or an action for specific performance
of any such covenant or agreement contained in this Agreement, and to exercise
all other rights existing in its favor. The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of
the provisions of this Agreement and that each party may in its sole discretion
apply to any court of law or equity of competent jurisdiction for specific
performance and/or injunctive relief (without posting a bond or other security)
in order to enforce or prevent any violation of the provisions of this
Agreement.
SECTION 14. SUCCESSORS AND ASSIGNS. This Agreement shall bind and
inure to the benefit of the Company and the Investor and their respective
successors and assigns (to the extent permitted below). In addition, and
whether or not any express assignment has been made, except as otherwise
expressly stated in this Agreement, the provisions of this Agreement which are
for the benefit of the Investor as a purchaser or holder of Shares are also for
the benefit of, and enforceable by, any permitted subsequent holder of such
Shares. The parties acknowledge that, subject to compliance with applicable
securities laws, the Investor may transfer and assign all or a part of its
rights and obligations under this Agreement to one or more other parties with
the
28
consent of the Company, which consent shall not be unreasonably withheld.
This Agreement shall not be assigned by the Company.
SECTION 15. ENTIRE AGREEMENT. This Agreement and the other writings
referred to herein or delivered pursuant hereto which form a part hereof contain
the entire agreement among the parties with respect to the subject matter hereof
and supersede all prior and contemporaneous arrangements or understandings with
respect thereto.
SECTION 16. NOTICES. All notices, requests, consents and other
communications hereunder to any party shall be deemed to be sufficient if
contained in a written instrument delivered in person or sent by fax, nationally
recognized overnight courier or first class registered or certified mail, return
receipt requested, postage prepaid, addressed to such party at the address set
forth below or such other address as may hereafter be designated in writing by
such party to the other parties:
(a) if to the Company, to:
UbiquiTel Holdings, Inc.
0 Xxxx Xxxxx
Xxxx Xxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx
Fax: (000) 000-0000
with a copy to:
Xxxxxxxxx Traurig P.A.
0000 Xxxxxx Xxxxxxxxx
Xxxxxx Xxxxxx, Xxxxxxxx 00000
Attn: Xxx X. Xxxxx
Fax: (000) 000-0000
(b) if to the Investor, to:
DLJ Merchant Banking Partners II, L.P.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn.: Xxxxxx Xxxx and Xxx Xxxxx
Fax: (000) 000-0000
with a copy to:
Xxxxxx & Xxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn.: Xxx X. Xxxxxxxxxxx
Fax: (000) 000-0000
All such notices, requests, consents and other communications shall be deemed to
have been given when received.
29
SECTION 17. AMENDMENTS. The terms and provisions of this Agreement
may be modified or amended, or any of the provisions hereof waived, temporarily
or permanently, pursuant to the written consent of the Company and the Investor.
SECTION 18. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, and each such counterpart hereof shall be deemed to be
an original instrument, but all such counterparts together shall constitute but
one agreement.
SECTION 19. HEADINGS. The headings of the sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed to
be a part of this Agreement.
SECTION 20. DEFINITION OF PERSON. For purposes of this Agreement,
"PERSON" means any individual, corporation, partnership, limited liability
company, association, trust or other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
SECTION 21. GOVERNING LAW; WAIVER OF JURY TRIAL. This Agreement
shall be governed by and construed in accordance with the laws of the State of
New York without giving effect to the principles of conflicts of law. Each of
the parties hereto hereby irrevocably and unconditionally consents to submit to
the exclusive jurisdiction of the courts of the State of New York and of the
United States of America, in each case located in the County of New York, for
any action, proceeding or investigation in any court or before any governmental
authority ("LITIGATION") arising out of or relating to this Agreement and the
transactions contemplated hereby (and agrees not to commence any Litigation
relating thereto except in such courts), and further agrees that service of any
process, summons, notice or document by registered mail to its respective
address set forth in this Agreement shall be effective service of process for
any Litigation brought against it in any such court. Each of the parties hereto
hereby irrevocably and unconditionally waives any objection to the laying of
venue of any Litigation arising out of this Agreement or the transactions
contemplated hereby in the courts of the State of New York or the United States
of America, in each case located in the County of New York, and hereby further
irrevocably and unconditionally waives and agrees not to plead or claim in any
such court that any such Litigation brought in any such court has been brought
in an inconvenient forum. EACH OF THE PARTIES IRREVOCABLY AND UNCONDITIONALLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHTS TO
TRIAL BY JURY IN CONNECTION WITH ANY LITIGATION ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 22. SEVERABILITY. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid, but
if any provision of this Agreement is held to be invalid or unenforceable in any
respect, such invalidity or unenforceability, shall not render invalid or
unenforceable any other provision of this Agreement.
SECTION 23. NO PARTNERSHIP. The obligations of each of the parties
to this Agreement are several and not joint. Nothing in this Agreement shall
imply or be deemed to imply a partnership, joint venture or other relationship
between the parties.
30
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the date first above written.
UBIQUITEL HOLDINGS, INC.
By: _______________________________
Name:
Title:
DLJ MERCHANT BANKING PARTNERS II, L.P.
By: DLJ MERCHANT BANKING II, INC.,
its Managing General Partner
By: _______________________________
Name:
Title:
31
