Joint Bidding Agreement
Exhibit 10.5
This Joint Bidding Agreement (this “Agreement”), dated June 29, 2007, by and between AT&T
Inc. (“AT&T”) and ▇▇▇▇▇▇ Communications Corporation (“▇▇▇▇▇▇”) sets forth the procedures by which
AT&T and ▇▇▇▇▇▇ shall bid jointly in the auction of the 700 MHz spectrum, which the Federal
Communications Commission (the “Commission” or the “FCC”) is statutorily required to commence no
later than January 28, 2008 (the “Auction”).
1. AT&T and ▇▇▇▇▇▇ shall participate in the Auction pursuant to this Agreement. ▇▇▇▇▇▇ shall
not otherwise participate in the Auction or enter into any other bidding agreement or understanding
for the Auction without the express written consent of AT&T. AT&T may add third parties to this
Agreement or enter into other bidding arrangements with other applicants in the Auction.
2. AT&T shall bid on behalf of both AT&T and ▇▇▇▇▇▇. No later than five (5) business days
immediately preceding the date on which the FCC Form 175 is required to be filed, ▇▇▇▇▇▇ shall
provide AT&T in writing the preliminary list of licenses that ▇▇▇▇▇▇ desires to win in the Auction
(the “▇▇▇▇▇▇ Licenses”) and the tentative maximum amount it is willing to pay for each ▇▇▇▇▇▇
License, provided, however, that the maximum bid amount for all the ▇▇▇▇▇▇ Licenses shall not
exceed [*].
3. AT&T shall disclose to ▇▇▇▇▇▇ in writing no later than five (5) business days immediately
preceding the date on which the FCC Form 175 is required to be filed the preliminary list of
licenses on which AT&T wishes to win in the Auction (“AT&T Licenses”). AT&T may bid without
restriction for such licenses or any other licenses as AT&T deems appropriate.
| * | Confidential information has been omitted and filed separately with the SEC. |
4. AT&T shall file a timely FCC Form 175 with the FCC for the Auction, which shall identify at
least the AT&T Licenses and the ▇▇▇▇▇▇ Licenses as the licenses on which AT&T will bid. ▇▇▇▇▇▇
shall provide AT&T with such information and assistance in a timely manner as AT&T may require to
complete and timely file the FCC Form 175.
5. AT&T shall pay such upfront fees and assessments, including any penalties, as may be
required by the FCC to enable it simultaneously to bid on and win both the ▇▇▇▇▇▇ Licenses and the
AT&T Licenses. ▇▇▇▇▇▇ shall reimburse AT&T by wire transfer no later than the day on which the
upfront payments are due for the amount of the upfront fees and assessments attributable to the
▇▇▇▇▇▇ Licenses, including any penalties that would be attributable to ▇▇▇▇▇▇ if it was the
applicant. If there is any defect in the FCC Form 175, AT&T shall use commercially reasonable
efforts to cure any such defect(s) in a timely fashion. ▇▇▇▇▇▇ shall, in a timely manner,
cooperate with and reasonably assist AT&T in connection with AT&T’ efforts to cure such defects.
6. The Parties intend to enter into a Bidding Protocol Agreement prior to the commencement of
the Auction, but if no such agreement is reached, the following principles shall apply: (a)
throughout the Auction, AT&T will keep ▇▇▇▇▇▇ fully informed concerning the bidding process,
including, but not limited to, the results of each bidding round and AT&T’ plans with respect to
the next bidding round; (b) AT&T will consult with ▇▇▇▇▇▇ concerning the bidding for the ▇▇▇▇▇▇
Licenses for each bidding round, and, consistent with Section 2 of this Agreement, AT&T shall bid
for such licenses as may be directed by ▇▇▇▇▇▇, including ▇▇▇▇▇▇ Licenses and licenses that are not
▇▇▇▇▇▇ Licenses on which ▇▇▇▇▇▇ desires to bid in order to satisfy minimum eligibility rations in
any given round; (c) ▇▇▇▇▇▇ shall provide AT&T with appropriate directions concerning the bidding
for such licenses in each bidding round in a prompt
and timely manner such that AT&T can implement those directions in an orderly fashion during
each bidding round; (d) ▇▇▇▇▇▇ shall designate prior to the commencement of the Auction one or
more individuals (“▇▇▇▇▇▇ Representatives”) who shall represent ▇▇▇▇▇▇’▇ interests during the
Auction, who are familiar with the Commission’s auction processes, and who are authorized to commit
▇▇▇▇▇▇ with respect to decisions made during the Auction; (e) the ▇▇▇▇▇▇ Representatives shall be
available throughout the Auction to consult with AT&T in a prompt and timely manner; and (f) up to
two ▇▇▇▇▇▇ Representatives may be in attendance on the premises employed by AT&T to participate in
the Auction.
7. ▇▇▇▇▇▇ shall contribute to the costs of the software that AT&T reasonably requires to
participate effectively in the Auction (which AT&T anticipates will equal approximately $300,000)
based on the ratio of ▇▇▇▇▇▇’▇ eligibility units to AT&T’ eligibility units as determined by the
Commission in accordance with its Public Notice establishing the bidding procedures for the Auction
(the “Eligibility Units”). For the avoidance of doubt, the Eligibility Units shall equal the
upfront payments associated with the ▇▇▇▇▇▇ Licenses and with the AT&T Licenses as specified in the
Commission’s Public Notice establishing the bidding procedure for the Auction, without regard to
penalties, if any, that either AT&T or ▇▇▇▇▇▇ shall be required to pay. AT&T shall bear the costs
of providing the physical facilities, telecommunications services and other reasonable internal
support functions.
8. ▇▇▇▇▇▇ may, at any time after the commencement of the Auction, upon written timely notice
to AT&T
a. modify the licenses which constitute the ▇▇▇▇▇▇ Licenses provided that ▇▇▇▇▇▇ has
the Eligibility Units to bid for the revised list of ▇▇▇▇▇▇ Licenses and
provided further that ▇▇▇▇▇▇ may not delete any license for which AT&T is the standing
high bidder at the time,
b. modify the maximum price it is willing to pay for any ▇▇▇▇▇▇ License or all ▇▇▇▇▇▇
Licenses, provided that (i) the modified maximum price for a ▇▇▇▇▇▇ License is not less than
the amount for which AT&T is the standing high bidder pursuant to a bid directed by ▇▇▇▇▇▇
for that ▇▇▇▇▇▇ License or the modified maximum price for all ▇▇▇▇▇▇ Licenses is not less
than the total amount for which AT&T is the standing high bidder by reason of bids directed
by ▇▇▇▇▇▇ for all the ▇▇▇▇▇▇ Licenses and (ii) the modified maximum price does not cause the
total price for all ▇▇▇▇▇▇ Licenses to exceed the cap set forth in Section 3 of this
Agreement.
9. In the event that both AT&T and ▇▇▇▇▇▇ are interested, either initially or at any time
during the Auction, in acquiring the same license(s) or license(s) that serve overlapping
geographic areas, the Parties shall discuss in good faith which license(s) to bid on and the
maximum amount to bid for such license(s) in order to satisfy both Parties’ requirements while
minimizing the number of licenses on which AT&T will bid.
10. If the Parties cannot agree on how to accommodate both Parties’ interests in the same
license (a “Joint License”), AT&T shall use commercially reasonable efforts, in consultation with
▇▇▇▇▇▇, to acquire sufficient spectrum to meet the needs of both AT&T and ▇▇▇▇▇▇, provided,
however, that, where the high-bid for a license in any bidding round exceeds the maximum amount a
Party is willing to bid for that license or would result in ▇▇▇▇▇▇ exceeding the cap in Section 3
of this Agreement, AT&T shall thereafter attempt to acquire the license solely for the Party whose
maximum has not been exceeded and that license shall no longer be treated as a Joint License but
rather as either an AT&T or a ▇▇▇▇▇▇ License.
11. If the Auction concludes before the merger is consummated, AT&T shall acquire and hold in
its name any license for which it was the high-bidder in the Auction, except that ▇▇▇▇▇▇ shall wire
AT&T no later than the dates on which AT&T is required to make the down payment and the final
payment(s) for the ▇▇▇▇▇▇ License(s) the amounts AT&T is required to pay to acquire the ▇▇▇▇▇▇
License(s), including any penalty payments (collectively the “Purchase Price”). Where the license
was a Joint License, AT&T shall pay the Purchase Price, except that where AT&T is the high-bidder
for more than one license to serve the same or overlapping areas as a result of its efforts
pursuant to Section 10, ▇▇▇▇▇▇ shall reimburse AT&T no later than the day on which a payment is due
the Purchase Price attributable to any license(s) acquired to meet ▇▇▇▇▇▇’▇ spectrum needs. Where
AT&T acquires a license that is neither an AT&T, a ▇▇▇▇▇▇ or a Joint License (an “Unwanted
License”), ▇▇▇▇▇▇ shall only be responsible for paying for such Unwanted Licenses as resulted from
a bid for such license at ▇▇▇▇▇▇’▇ direction.
12. In the event that the Merger Agreement terminates or is terminated after the Auction is
concluded, and
a. AT&T acquires on ▇▇▇▇▇▇’▇ behalf one or more ▇▇▇▇▇▇ Licenses, the Parties shall file
within thirty (30) days thereafter, and diligently prosecute, any applications that may be
necessary to assign the ▇▇▇▇▇▇ License(s) to ▇▇▇▇▇▇. Each Party will cooperate and
reasonably assist each other in preparing and prosecuting any such applications.
b. AT&T acquires one or more Joint Licenses, the Parties shall negotiate in good faith
to determine how best to allocate, partition or disaggregate the Joint Licenses. If the
Parties cannot reach agreement concerning the allocation, partition or disaggregation of a
Joint License, they shall allocate those licenses as follows:
i. Each Party will select in a weighted rotation, license by license, the Joint
Licenses they wish to acquire.
ii. The Party selecting first shall be selected at random, but the relative
number of opportunities for each Party to select shall be determined by the ratio of
their Eligibility Units. For example, if ▇▇▇▇▇▇ has x Eligibility Units and AT&T
has 3x Eligibility Units, AT&T will get to select 3 licenses for each license ▇▇▇▇▇▇
selects.
c. Where any Joint License is partitioned or disaggregated or both partition and
disaggregated, the Parties shall file within thirty (30) days of the date on which the
Parties agree to the partitioning and/or disaggregation such application(s) with the FCC as
may be necessary to partition and/or disaggregate the license. Each Party will cooperate
and reasonably assist each other in preparing and diligently prosecuting any such
applications.
d. Where the Joint License is not partitioned or disaggregated and ▇▇▇▇▇▇ has the right
to acquire the license, the Parties shall file within thirty (30) days after the Parties
resolve which Party will acquire the license, and diligently prosecute, any applications
that may be necessary to assign the license to ▇▇▇▇▇▇. Each Party will cooperate and
reasonably assist each other in preparing and prosecuting any such applications.
e. Each Party shall be responsible for the Purchase Price of any Joint or any
partitioned and/or disaggregated Joint License acquired by that Party. Where a Joint
License is partitioned and/or disaggregated, the Purchase Price shall be apportioned based
on the MHz-POPs in the area served by the licenses acquired by ▇▇▇▇▇▇ and by AT&T.
▇▇▇▇▇▇ shall reimburse AT&T for ▇▇▇▇▇▇’▇ portion of the Purchase Price plus interest at
simple 8.0% annual rate for any Joint,, partitioned and/or disaggregated Joint License it
acquires at the closing after FCC grant of the application(s) to assign the license or
portion thereof to ▇▇▇▇▇▇. Such closing shall take place no later than ten (10) business
days after the FCC grant of the assignment application is final, unless both Parties agree
to an earlier closing date.
13. In the event that the Merger Agreement terminates or is terminated:
a. before the Form 175 is filed with the Commission, this Agreement shall terminate
simultaneously with the termination of the Merger Agreement;
b. after the Form 175 is filed with the Commission but before the Auction concludes,
this Agreement shall remain in effect and AT&T shall continue to bid on behalf of ▇▇▇▇▇▇ on
any license available in the auction as ▇▇▇▇▇▇ may direct that would not cause ▇▇▇▇▇▇ to
exceed its allocated Eligibility Units, but the Parties will only coordinate as required for
▇▇▇▇▇▇ to direct AT&T’ bidding on ▇▇▇▇▇▇’▇ behalf.
14. Except as required by the FCC rules and policies, as otherwise required by law, as
necessary to add a third party to this Agreement or for AT&T to enter into a business arrangement
with others, or as otherwise mutually agreed, neither Party shall disclose to a third party or
publicize any of the terms of this Agreement, or any aspect of any bidding or transaction
contemplated by the Parties. If the Parties are required to file the Exhibits to this Agreement
with the FCC, they will use commercially reasonable efforts to assure that they are treated as
proprietary and confidential by the FCC under its rules and not disclosed publicly or to any third
party.
15. Each Party shall follow procedures designed to ensure compliance with all applicable laws,
including, but not limited to (a) Commission rules relating to the conduct of the Auction and (b)
the Commission’s anti-collusion rule, as interpreted by the Commission. Each Party shall promptly
notify the other in the event that it becomes aware that there has been or may have been a breach
of the Commission’s anti-collusion rule.
16. The Parties understand that the Commission has not adopted final rules for the conduct of
the Auction and that the adoption of those rules could affect the terms of this Agreement. If that
should occur, the Parties agree to negotiate in good faith to modify this Agreement so that the
intent of the Parties, as reflected in this Agreement, is preserved under the new Commission rules.
However, if the Parties cannot reach an agreement on any modifications to this Agreement, this
Agreement shall remain binding and control their participation in the Auction.
17. Except as otherwise provided in the next sentence, every provision of this Agreement is
intended to be severable, and, if any part of any provision hereof is unenforceable or invalid in
any respect, such part shall be ineffective to the extent of such unenforceability of invalidity
only, without in any way affecting the remaining parts of such provision or the remaining
provisions hereof. The preceding sentence shall be of no force or effect if the consequence of
enforcing the remainder of the provisions of this Agreement without such unenforceable or invalid
provision would be to cause either Party to lose a material benefit derived from this Agreement, in
which case this entire Agreement shall be of no force or effect.
18. Each signatory to this Agreement is duly authorized to execute this Agreement and to bind
the Party represented. Each Party represents and warrants that it is authorized to enter into this
Agreement and that the execution, delivery and performance of this Agreement
will not violate any judgment, decree, order, or agreement to which it is a party nor
contravene any other agreement or understanding to which it is legally bound, or any law, rule, or
regulation applicable to it.
19. Except for Merger Agreement by and between AT&T, Alpine Merger Sub, Inc., and ▇▇▇▇▇▇, this
Agreement constitutes the entire agreement between or among the Parties with respect to the subject
matter of this Agreement and supersedes all prior agreements and understandings, both oral and
written, between or among the Parties with respect to the subject matter of this Agreement. No
Party has entered into this Agreement in reliance upon any representation, warranty, covenant or
undertaking of any other Party that is not set out or referred to in this Agreement.
20. This Agreement shall be governed by and construed and enforced in accordance with the laws
of the State of New York applicable to agreements made and to be entirely performed within such
state, without giving effect to conflict of laws principles.
21. The Parties shall perform all such acts, enter all such agreements, file all such reports,
and do all such things as are necessary to carry out fully the Parties’ intent hereunder.
22. This Agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original and all of which shall together constitute the same agreement.
| AT&T INC. |
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| /s/ ▇▇▇▇ ▇▇▇▇▇ | ||||
| By: ▇▇▇▇ ▇▇▇▇▇ | ||||
| Title: | Senior Vice President — Corporate Development |
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| ▇▇▇▇▇▇ COMMUNICATIONS CORPORATION |
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| /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | ||||
| By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | ||||
| Title: | Chief Executive Officer and President | |||