EXHIBIT 10.9.1
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STOCK PURCHASE AGREEMENT
by and among
TELECORP PCS, INC.,
AT&T WIRELESS PCS, INC.
and
CASH EQUITY INVESTORS
named herein
Dated as of March 22, 1999
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STOCK PURCHASE AGREEMENT
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STOCK PURCHASE AGREEMENT, dated as of March 22, 1999, by and among TeleCorp
PCS. Inc., a Delaware corporation (the "Company") AT&T Wireless PCS, Inc., a
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Delaware corporation ("AT&T PCS") and the investors referred to on Schedule I
(individually, a "Cash Equity Investor" and, collectively, the "Cash Equity
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Investors" and together with AT&T PCS, the "Investors").
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W I T N E S S E T H:
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WHEREAS, the Cash Equity Investors are stockholders of the Company;
WHEREAS the Company is seeking to raise up to $25,000,000 from
investors to fund its participation in the Reauction conducted by the Federal
Communications Commission ("FCC") for the sale of broadband Personal
Communications Services ("PCS") licenses (the "PCS Licenses") in the "C" Block
(the "PCS "C" Block Auction"), as set forth in Parts 1 and 24 of Title 47 of the
Code of Federal Regulations (the "CFR"), scheduled to commence on March 23,
1999;
WHEREAS, the Cash Equity Investors are committing to invest up to
$25,000,000 in the Company at a Closing (hereinafter defined) in consideration
of the issuance by the Company of certain additional securities of the Company,
and the Company wishes to issue and sell the securities to each of the Cash
Equity Investors all on the terms and subject to the conditions herein set
forth;
WHEREAS, AT&T PCS desires to purchase certain securities of the
Company in an amount set forth herein, in exchange for the cancellation of
certain Series D Promissory Notes of the Company held by AT&T PCS, and on the
same terms and conditions as the Cash Equity Investors;
WHEREAS, the Investors' subscription for and purchase of such
additional securities hereunder shall satisfy in full each Investor's preemptive
rights to purchase securities of the Company under the Stockholders' Agreement,
as hereinafter defined;
WHEREAS, the additional securities to be acquired by the Investors
hereunder will be subject to the provisions of the Stockholders' Agreement as
after acquired Equity Securities, as such term is defined in the Stockholders'
Agreement;
NOW, THEREFORE, in consideration of the promises and the mutual
representations, warranties, covenants, conditions and agreements hereinafter
set forth, the parties agree as follows:
ARTICLE I
DEFINITIONS
For purposes of this Agreement:
"Affiliate" means, with respect to any Person, any other Person that
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directly, or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with that Person. For purposes of this
definition, "control" (including the terms "controlling" and "controlled") means
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the power to direct or cause the direction of the management and policies of a
Person, directly or indirectly, whether through the ownership of securities or
partnership or other ownership interests, by contract or otherwise.
"Aggregate Commitment" means, with respect to each Cash Equity
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Investor and AT&T PCS, the amount set forth opposite its name on Schedule I
under the heading "Aggregate Commitment."
"Agreement" means this Stock Purchase Agreement, as the same may be
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amended, modified or supplemented in accordance with the terms hereof.
"AT&T PCS" has the meaning set forth in the preamble.
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"AT&T Securities" means shares of the Company's Series D Preferred
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Stock and Series F Preferred Stock to be purchased by AT&T PCS under this
Agreement.
"Bidding Subsidiary" has the meaning set forth in Section 2.5.
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"Business Day" means any day other than a Saturday, Sunday or a legal
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holiday in New York, New York or any other day on which commercial banks in New
York, New York are authorized by law or governmental decree to close.
"Capital Stock" means any and all shares, interests, participations or
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other equivalents (however designated) of capital stock of a corporation, and
any and all equivalent ownership interests in a Person (other than a
corporation) and any and all warrants, rights or options to purchase or
subscribe for any of the foregoing or any warrants, rights or options to
purchase or subscribe for any such warrants, rights or options.
"Cash Equity Investor" has the meaning set forth in the preamble.
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"Cash Equity Investors' Securities" means shares of the Company's
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Voting Common Stock and Series C Preferred Stock to be purchased by each of the
Cash Equity Investors under this Agreement.
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"Claim" has the meaning set forth in Section 8.5(a).
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"Class C Common Stock" means the Class C Common Stock, par value $.01
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per share, of the Company.
"Class D Common Stock" means the Class D Common Stock, par value $.01
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per share, of the Company.
"Closing" has the meaning set forth in Section 3.1.
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"Closing Date" has the meaning set forth in Section 3.1.
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"Common Stock" means, collectively, Voting Preference Stock, the
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Tracked Common Stock, the Voting Common Stock and the Non-Voting Common Stock.
"Company" has the meaning set forth in the preamble.
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"Confidential Information" means any and all information regarding the
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business, finances, operations, products, services and customers of the Person
specified and its Affiliates, in written or oral form or in any other medium.
"Consents" means all consents and approvals of Governmental
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Authorities or other third parties necessary to authorize, approve or permit the
parties hereto to consummate the Transactions and for the Company to operate its
business after the Closing Date as currently contemplated.
"Credit Agreement" means the agreement among the Company, the lenders
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and the agents referred to therein, as of July 17, 1998, providing a credit
facility having aggregate commitments of $525 million, as amended to date and as
the same may be further amended, modified or supplemented in accordance with the
terms thereof.
"Credit Documents" means the Credit Agreement and all agreements,
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instruments and documents executed and delivered pursuant thereto, as the same
may from time to time be amended, modified or supplemented in accordance with
the terms thereof.
"Expended Amount" means the Company's net investment in the Bidding
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Subsidiary, i.e., the excess of (i) the aggregate amount invested by the Company
and its Subsidiaries in the Bidding Subsidiary over (ii) the aggregate amount of
such investment returned to TeleCorp Holding Corp, Inc. by the Bidding
Subsidiary before the Closing Date.
"FCC" means the Federal Communications Commission or similar
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regulatory authority established in replacement thereof.
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"FCC Law" means the Communications Act of 1934, as amended, including
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as amended by the Telecommunications Act of 1996, and the rules, regulations and
policies promulgated thereunder.
"Financing" has the meaning set forth in the SBIC Regulations.
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"Governmental Authority" means a Federal, state or local court,
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legislature, governmental agency (including, without limitation, the United
States Department of Justice), commission or regulatory or administrative
authority or instrumentality.
"Indemnified Party" has the meaning set forth in Section 8.4(a).
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"Indemnifying Party" has the meaning set forth in Section 8.4(a).
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"Investors" has the meaning set forth in the preamble.
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"Law" means applicable common law and any statute, ordinance, code or
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other law, rule, permit, permit condition, regulation, order, decree, technical
or other standard, requirement or procedure enacted, adopted, promulgated,
applied or followed by any Governmental Authority.
"Lenders" has the meaning set forth in Section 10.5.
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"License" means a license, permit, certificate of authority, waiver,
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approval, certificate of public convenience and necessity, registration or other
authorization, consent or clearance to construct or operate a facility,
including any emissions, discharges or releases therefrom, or to transact an
activity or business, to construct a tower or to use an asset or process, in
each case issued or granted by a Governmental Authority.
"License Transfer" means the assignment of any License requiring the
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Consent of the FCC or any equivalent state Governmental Authority.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
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charge, security interest, right of first refusal or right of others therein, or
encumbrance of any nature whatsoever in respect of such asset.
"Losses" has the meaning set forth in Section 8.2.
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"Management Shareholders" shall mean ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇.
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▇▇▇▇▇▇▇▇.
"Material Adverse Effect" means a material adverse effect on the
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business, financial condition, assets, liabilities or results of operations or
prospects of the Person specified.
"New York Courts" has the meaning set forth in Section 10.6.
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"Non-Voting Common Stock" means the Company's Class B Non-Voting
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Common Stock, par value $.01 per share.
"PCS" has the meaning set forth in the preamble.
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"PCS License" has the meaning set forth in the recitals.
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"PCS "C" Block Auction" has the meaning set forth in the recitals.
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"Person" means an individual, corporation, partnership, limited
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liability company, association, joint stock company, Governmental Authority,
business trust, unincorporated organization, or other legal entity.
"Preferred Stock" means the shares of Series A Preferred Stock, Series
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B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock, Series E
Preferred Stock, Series F Preferred Stock and Senior Common Stock.
"Purchase Commitment" means, with respect to each Cash Equity Investor
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and AT&T PCS, its ratable portion of the Expended Amount (but not more than the
amount of its Aggregate Commitment).
"Regulatory Problem" means, with respect to any SBIC Holder providing
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Financing under this Agreement, any set of facts or circumstances wherein it has
been asserted by any governmental regulatory agency (or any SBIC Holder
reasonably believes in good faith that there is a substantial risk of such
assertion) that such SBIC Holder and its Affiliates are not entitled to hold, or
exercise any significant right with respect to, the Securities.
"Restated Certificate" means the Third Amended and Restated
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Certificate of Incorporation of the Company, dated as of the Closing Date.
"SBA" has the meaning set forth in Section 6.5(b).
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"SBIC" means a small business investment company licensed under the
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SBIC Act.
"SBIC Act" means the Small Business Investment Company Act of 1958, as
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amended.
"SBIC Holder" means each Cash Equity Investor that is an SBIC.
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"SBIC Regulations" means the SBIC Act and the regulations issued
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thereunder as set forth in 13 CFR 107 and 121, as amended.
"Section 8.2 Indemnified Party" has the meaning set forth in Section
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8.2.
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"Section 8.3 Indemnified Party" has the meaning set forth in Section
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8.3.
"Securities" means the Cash Equity Investors' Securities and AT&T
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Securities being issued hereunder, together with any shares of Preferred Stock
or Common Stock issued upon conversion of or delivered in substitution or
exchange for any of the foregoing.
"Securities Act" means the Securities Act of 1933, as amended.
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"Senior Common Stock" means the Senior Common Stock, par value $.01
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per share, of the Company.
"Series A Preferred Stock" means the Series A Preferred Stock, par
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value $.01 per share, of the Company.
"Series B Preferred Stock" means the Series B Preferred Stock, par
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value $.01 per share, of the Company.
"Series C Preferred Stock" means the Series C Preferred Stock, par
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value $.01 per share, of the Company.
"Series D Notes" means the Series D Senior Subordinated convertible
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notes of the Company to be issued to AT&T PCS pursuant to that certain Asset
Purchase Agreement to be entered into by and between the Company and AT&T PCS
pursuant to which the Company and/or one or more of its direct or indirect
wholly-owned Subsidiaries will acquire from AT&T PCS a portion of a certain PCS
License for the San ▇▇▇▇, Puerto Rico market.
"Series D Preferred Stock" means the Series D Preferred Stock, par
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value $.01 per share, of the Company.
"Series E Preferred Stock" means the Series E Preferred Stock, par
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value $.01 per share, of the Company.
"Series F Preferred Stock" means the Series F Preferred Stock, par
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value $.01 per share, of the Company.
"Stock Exchange" has the meaning set forth in Section 2.3.
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"Stockholders' Agreement" means the Stockholders' Agreement, by and
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among the Company, AT&T PCS, the Cash Equity Investors, and the other parties
named therein, as stockholders, as the same may be amended, modified or
supplemented in accordance with the terms thereof.
"Subsidiary" shall mean, with respect to any Person, a corporation or
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other entity of which 50% or more of the voting power or the voting equity
securities or equity interest is owned, directly or indirectly, by such Person.
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"Tracked Common Stock" means, collectively, the Class C Common Stock
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and the Class D Common Stock.
"Transactions" means the transactions contemplated by this Agreement.
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"Voting Common Stock" means the Class A Voting Common Stock, par value
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$.01 per share, of the Company.
"Voting Preference Stock" means the Voting Preference Stock, par value
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$.01 per share, of the Company.
When a reference is made in this Agreement to an Article or a Section,
such reference shall be to an Article or a Section of this Agreement unless
otherwise indicated. Unless the context otherwise requires, the terms defined
hereunder shall have the meanings therein specified for all purposes of this
Agreement, applicable to both the singular and plural forms of any of the terms
defined herein. Whenever the words "include," "includes" or "including" are used
in this Agreement, they shall be deemed to be followed by the words "without
limitation." The use of a gender herein shall be deemed to include the neuter,
masculine and feminine genders whenever necessary or appropriate. Whenever the
word "herein" or "hereof" is used in this Agreement, it shall be deemed to refer
to this Agreement and not to a particular Section of this Agreement unless
expressly stated otherwise.
ARTICLE II
PURCHASE AND SALE
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OF SECURITIES; CERTAIN RESTRICTIONS ON TRANSFER
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2.1. Purchase Commitments. (a) Upon the terms and subject to the conditions
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hereof and in reliance upon the representations, warranties and agreements
herein contained: (i) effective upon the execution and delivery hereof, each
Cash Equity Investor hereby irrevocably commits, severally and not jointly, to
purchase from the Company Cash Equity Investors' Securities in an amount equal
to its Aggregate Commitment, and (ii) at the Closing, each Cash Equity Investor
shall purchase from the Company Cash Equity Investors' Securities, in an amount
equal to its Purchase Commitment, the amount of which will be determined in
accordance herewith. In the event that the combined Aggregate Commitments of all
of the Cash Equity Investors exceeds the total amount of proceeds required by
the Company for the purposes set forth in Section 2.5 hereof, at the Closing
each Cash Equity Investors' Aggregate Commitment shall be reduced
proportionately.
(b) Each Cash Equity Investor acknowledges and agrees that, if the
Closing occurs, its obligation to purchase Cash Equity Investors' Securities in
an amount up to its Aggregate Commitment constitutes an irrevocable and
unconditional obligation (subject, however, to the rights of the Cash Equity
Investors set forth in that certain bidding letter dated as of March 22, 1999 by
and among the Company and the Cash Equity Investors) and shall not be subject to
counterclaim, set-off, deduction or defense, or to abatement, suspension,
deferment, diminution or reduction for any reason
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whatsoever. By way of amplification, and not in limitation of the foregoing,
each Cash Equity Investor further acknowledges and agrees to fulfill its
obligations in respect of its Aggregate Commitment regardless of any claims it
may have against any other Person (whether or not related to the Transactions)
and regardless of the existence or non-existence of any facts or circumstances
(whether or not such facts and circumstances existed on the date hereof or the
Closing Date or were then known by it).
(c) Based on the representations and warranties of AT&T PCS contained
herein, the Company hereby agrees to issue and sell to AT&T PCS, and, subject to
all of the terms and conditions hereof and in reliance on the representations
and warranties of the Company set forth or referred to herein, (i) effective
upon the execution and delivery hereof, AT&T PCS hereby irrevocably commits to
purchase from the Company, the AT&T Securities in an amount equal to its
Aggregate Commitment and (ii) at the Closing, AT&T PCS shall purchase from the
Company the AT&T Securities in an amount equal to its Purchase Commitment. The
consideration for the AT&T Securities purchased by AT&T PCS shall be at the
option of AT&T PCS, either the cancellation by AT&T PCS of certain Series D
Notes, at the option of AT&T PCS, in an amount equal to its Purchase Commitment
or cash.
2.2. Purchase and Sale of Securities at Closing. Upon the terms and subject
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to the conditions hereof and in reliance upon the representations, warranties
and agreements herein contained, at the Closing, in consideration of the
Transactions, the Company shall issue, sell and deliver to AT&T PCS the number
of shares of AT&T Securities, and to each Cash Equity Investor, the number of
shares of Cash Equity Investors' Securities, determined by dividing its Purchase
Commitment by $1,000.
2.3. Management Benefit Plan, Management Shareholders.
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(a) If and when the Bidding Subsidiary is merged into TeleCorp
Holdings Corp., Inc., a direct wholly-owned subsidiary of the Company, the
Management Stockholders shall be entitled, as a consequence of such merger, to
exchange all of the capital stock of the Bidding Subsidiary owned by such
Management Stockholders for the shares of the Company's Voting Common Stock and
Series E Preferred Stock set forth on Schedule II (the "Stock Exchange"). At
such time, additional shares of Voting Common Stock and Series E Preferred Stock
shall be added to the Company's 1998 Restricted Stock Plan as set forth on
Schedule II. The Company's Compensation Committee shall grant such restricted
shares pursuant to such Plan to the Company's employees, other than the
Management Stockholders.
(b) At the Closing, the parties hereby agree that the Company
shall establish a stock option plan to be funded with shares of the Company's
Voting Common Stock determined by subtracting the shares of Voting Common Stock
issued pursuant to Section 2.3(a) from 7,500, such shares to be issued to the
Company's directors, senior management and employees as determined by the
Company's Compensation Committee, upon terms and conditions determined by the
Compensation Committee.
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2.4. Restrictive Legends. Each certificate representing Securities
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(including Securities originally issued hereunder or delivered upon conversion
of Preferred Stock or Common Stock, or delivered in substitution or exchange for
any of the foregoing) will bear a legend, in addition to any legends required by
the Stockholders' Agreement or otherwise required by Law, reading substantially
as follows until such Securities have been sold pursuant to an effective
registration statement under the Securities Act, Rule 144 under the Securities
Act, or an opinion of counsel reasonably satisfactory in form and substance to
the Company and otherwise in full compliance with any other applicable
restrictions on transfer, including those contained in this Agreement and the
Stockholders' Agreement:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE `ACT'), OR UNDER ANY
STATE SECURITIES OR `BLUE SKY' LAWS. SAID SECURITIES MAY NOT BE
SOLD, TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE
DISPOSED OF, UNLESS AND UNTIL REGISTERED UNDER THE ACT AND THE
RULES AND REGULATIONS THEREUNDER AND ALL APPLICABLE STATE
SECURITIES OR `BLUE SKY' LAWS OR EXEMPTED THEREFROM UNDER THE ACT
AND ALL APPLICABLE STATE SECURITIES OR `BLUE SKY' LAWS."
2.5. Use of Proceeds. The Company shall use the net cash proceeds of its
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sale of Securities to the Investors hereunder to fund the Company's capital
contribution to a subsidiary (the "Bidding Subsidiary") for the purchase of PCS
Licenses at the PCS `C' Block Auction, to pay fees and expenses incurred in
connection with the Transactions, and for general and working capital purposes.
ARTICLE III
CLOSING
3.1. Time and Place of Closing. Upon the terms and subject to the
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conditions hereof, the closing of the Transactions (the "Closing") shall take
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place at the offices of ▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, at 10:00 a.m. local time on the earlier of (a) the
tenth Business Day following the date the Company is awarded any PCS Licenses at
the PCS "C" Block Auction or (b) August 12, 1999, or at such other place and/or
time and/or on such other date as the parties may agree or as may be necessary
to permit the fulfillment or waiver of the conditions set forth in Article VII
(the "Closing Date"). The Closing shall be deemed to have occurred as of 12:01
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a.m. on the Closing Date.
3.2. Closing Actions and Deliveries. Upon the terms and subject to the
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satisfaction or waiver by the appropriate parties, if applicable, of the
conditions set forth in Article VII, to effect
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the purchase and sale of the Securities and consummate the other Transactions,
the parties shall on the Closing Date take the following actions:
(a) Cash Equity Investor Purchases. Each Cash Equity Investor shall
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deliver to the Company by wire transfer of immediately available funds to the
account designated by the Company on or prior to the Closing Date an amount
equal to its Purchase Commitment.
(b) AT&T PCS Purchases. AT&T PCS shall either deliver to the Company
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by wire transfer of immediately available funds to the account designated by the
Company an amount equal to its Purchase Commitment or deliver to the Company for
cancellation Series D Notes in an amount equal to its Purchase Commitment.
(c) Delivery of Securities. The Company shall deliver to each
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Investor, certificates, duly executed by authorized signatories of the Company,
representing the shares of the Securities to be issued to each of them in
accordance with the terms of Sections 2.2(a) and 2.2(b).
(d) Other Deliveries. The parties shall execute and deliver or cause
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to be executed and delivered all other documents, instruments, opinions and
certificates contemplated by this Agreement to be delivered at the Closing or
necessary and appropriate in order to consummate the Transactions contemplated
to be consummated on the Closing Date.
3.3. Closing Costs; Taxes and Fees. The Company shall pay or cause to be
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paid at the Closing or, if due prior to the Closing or thereafter, promptly when
due, all transfer taxes (including sales taxes, gross receipts taxes, stamp
taxes, and other taxes) payable solely as a result of a transfer of the
Contributions pursuant to this Agreement, but excluding any federal, state,
local or other jurisdictional income taxes (or franchise, excise, gross receipts
or other taxes that are generally imposed on a party on a periodic basis as a
result of a party's status, presence, conduct of business, holding of assets,
income, revenues, activities or other items).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF INVESTORS
Each of the Investors (as to itself) represents and warrants to the
Company and each of the other parties as follows:
4.1. Organization, Power and Authority.
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(a) Each Investor is a corporation, general partnership or
limited partnership, duly organized, validly existing and in good standing under
the Laws of its jurisdiction of organization and has the requisite power and
authority to own, lease and operate its properties and to carry on its business
as now being conducted.
(b) It has the requisite power and authority to execute, deliver
and perform this Agreement and each other instrument, document, certificate and
agreement required or contemplated
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to be executed, delivered and performed by it hereunder and thereunder to which
it is or will be a party.
(c) It is duly qualified to do business in each jurisdiction
where the character of its properties owned or held under lease or the nature of
its activities makes such qualification necessary other than any such
jurisdiction in which the failure to be so qualified would not have a Material
Adverse Effect on it or materially adversely affect the Transactions.
(d) The execution and delivery of this Agreement by it and the
consummation of the Transactions by it have been duly and validly authorized by
its Board of Directors (or equivalent body) and no other proceedings on its part
which have not been taken (including, without limitation, approval of its
stockholders, partners or members) are necessary to authorize this Agreement or
to consummate the Transactions.
(e) This Agreement has been duly executed and delivered by it
and constitutes its valid and binding obligation, enforceable against it in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, moratorium or other similar Laws affecting or relating
to enforcement of creditors' rights generally and may be subject to general
principles of equity.
(f) As of the Closing Date, after giving effect to the
Transactions, it is not in breach of any obligation under this Agreement.
4.2. Consents; No Conflicts. Neither the execution, delivery and
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performance by it of this Agreement nor the consummation of the Transactions
will (a) conflict with, or result in a breach or violation of, any provision of
its organizational documents; (b) subject to obtaining the Consents set forth on
Schedule 4.2, constitute, with or without the giving of notice or passage of
time or both, a breach, violation or default, create a Lien, or give rise to any
right of termination, modification, cancellation, prepayment or acceleration,
under (i) any Law or License or (ii) any note, bond, mortgage, indenture, lease,
agreement or other instrument, in each case which is applicable to or binding
upon it or any of its assets; or (c) require any Consent, other than those set
forth on Schedule 4.2 or the approval of its board of directors, general
partner, stockholders or similar constituent bodies, as the case may be (which
approvals have been obtained), except in each case, where such breach,
violation, default, Lien, right, or the failure to obtain or give such Consent
would not have a Material Adverse Effect on it or materially adversely affect
the Transactions. To its knowledge, there is no fact relating to it or its
Affiliates that would be reasonably expected to prevent it from consummating the
Transactions.
4.3. Litigation. There is no action, proceeding or investigation pending
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or, to its knowledge, threatened against it or any of its properties or assets
that would be reasonably expected to have an adverse effect on its ability to
consummate the Transactions to which it is a party or to fulfill its obligations
under this Agreement or which seeks to prevent or challenge the Transactions.
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4.4. FCC Compliance. It complies with all eligibility rules issued by the
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FCC to hold broadband PCS Licenses, including without limitation, FCC rules on
foreign ownership and the CMRS spectrum cap. Set forth opposite its name on
Schedule 4.4 are all "attributable" interests (within the meaning of Section
20.6 of the FCC's Rules) that it holds in CMRS licenses that overlap the
territory covered by the PCS Licenses to be bid on at the PCS "C" Block Auction.
4.5. Brokers. It has not employed any broker, finder or investment banker
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or incurred any liability for any brokerage fees, commissions or finder's fees
in connection with the Transactions.
4.6. Capital Commitment. Each Investor has, and will have on the Closing
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Date, cash available to it in an amount sufficient to make its respective
Purchase Commitment in accordance with the terms of Section 2.1.
4.7. No Distribution. It is acquiring the Securities to be acquired by it
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hereunder for the purpose of investment and not with a view to or for sale in
connection with any distribution thereof (other than in compliance with the
Stockholders' Agreement and the Securities Act and all applicable state
securities laws).
4.8. Investor Acknowledgments.
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(a) It is an "accredited investor" as defined in Regulation D of
the Securities Act. Its representatives have been provided an opportunity to ask
questions of, and have received answers thereto from, the Company and its
representatives regarding the terms and conditions of its purchase of
Securities, and the Company and its proposed business generally, and have
obtained all additional information requested by it to verify the accuracy of
all information furnished to it in connection with such purchase.
(b) It has such knowledge and experience in financial and
business affairs that it is capable of evaluating the merits and risks of
purchasing the Securities it is purchasing hereunder.
(c) It is not relying on and acknowledges that no representation
is being made by any other Cash Equity Investor, the Company or any of its
officers, employees, Affiliates, agents or representatives, except for
representations and warranties expressly set forth in this Agreement, and, in
particular, it is not relying on, and acknowledges that no representation is
being made in respect of, (x) any projections, estimates or budgets delivered to
or made available to them of future revenues, expenses or expenditures, or
future results of operations and (y) any other information or documents
delivered or made available to it or its representatives, except for
representations and warranties expressly set forth in this Agreement and such
information and documents obtained by it as a stockholder of the Company and
through its representatives who serve as members of the Company's board of
directors, as the case may be.
(d) In deciding to invest in the Company, it has relied
exclusively on the representations and warranties expressly set forth in this
Agreement, and the investigations made by itself and its representatives and its
and such representatives' knowledge of the industry in which the Company
proposes to operate. Based solely on such representations and warranties and
such
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investigations and knowledge and such information obtained by him or it by
virtue of his or its status as a stockholder of the Company, and through its
representatives who serve as members of the Company's board of directors, as the
case may be, it has determined that the Securities it is acquiring are a
suitable investment for it.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants severally as to the Company
and its Subsidiaries to the Investors as follows:
5.1. Organization, Power and Authority.
---------------------------------
(a) The Company and each of its Subsidiaries that is a
corporation is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and has the
requisite corporate power and authority to own, lease and operate its properties
and to carry on its business as now being conducted and as proposed to be
conducted. Each of the Company's Subsidiaries that is a limited liability
company or a limited partnership is a limited liability company or a limited
partnership, as the case may be, duly formed, validly existing and in good
standing under the laws of the jurisdiction of formation and has the requisite
limited liability company or a limited partnership, as the case may be, power
and authority to own, lease and operate its properties and to carry on its
business as now being conducted and as proposed to be conducted.
(b) It has the requisite power, authority and/or legal capacity
to execute, deliver and perform this Agreement and each other instrument,
document, certificate and agreement required or contemplated to be executed,
delivered and performed by it hereunder and thereunder to which it is or will be
a party.
(c) The Company and each of its Subsidiaries is duly qualified
to do business in each jurisdiction where the character of its properties owned
or held under lease or the nature of its activities makes such qualification
necessary other than any such jurisdiction in which the failure to be so
qualified would not have a Material Adverse Effect on it or materially adversely
affect the Transactions.
(d) The execution and delivery of this Agreement and the
consummation of the Transactions by it have been duly and validly authorized by
its Board of Directors and shareholders and, except for the filing the Company's
Restated Certificate with the office of the Secretary of State of Delaware, no
other proceedings which have not been taken are necessary to authorize this
Agreement or to consummate the Transactions.
(e) This Agreement has been duly executed and delivered by it
and constitutes the valid and binding obligation of it, enforceable against it
in accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, moratorium or other similar Laws affecting
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or relating to enforcement of creditors' rights generally and may be subject to
general principles of equity.
(f) As of the Closing, after giving effect to the Transactions,
it is not in breach of any obligation under this Agreement or any of the Credit
Documents.
5.2. Consents; No Conflicts. Neither the execution, delivery and
----------------------
performance of this Agreement nor the consummation of the Transactions will (a)
conflict with, or result in a breach or violation of, any provision of its
organizational documents; (b) subject to obtaining the Consents set forth on
Schedule 5.2, constitute, with or without the giving of notice or passage of
time or both, a breach, violation or default, create a Lien, or give rise to any
right of termination, modification, cancellation, prepayment or acceleration,
under (i) any Law or License, or (ii) any note, bond, mortgage, indenture,
lease, agreement or other instrument, in each case which is applicable to or
binding upon it or any of its assets; or (c) require any Consent, other than
those set forth on Schedule 5.2 or the approval of its Board of Directors or its
stockholders (which approval has been obtained), except in each case where such
breach, violation, default, Lien, right, or the failure to obtain or give such
Consent would not have a Material Adverse Effect on it or materially adversely
affect the Transactions or the operation of its business after the Closing Date.
To its knowledge, there is no fact relating to it or its Affiliates that would
be reasonably expected to prevent it from consummating the Transactions or
performing its obligations under this Agreement or disqualify it from obtaining
the Consents required in order to consummate the transactions contemplated
hereunder.
5.3. Litigation. There is no action, proceeding or investigation pending
----------
or, to its knowledge, threatened against it or any of its properties or assets
that would have an adverse effect on its ability to consummate the Transactions
to which it is a party or to fulfill its obligations under this Agreement, or to
operate its business after the Closing Date, or which seeks to prevent or
challenge the Transactions. There is no judgment, decree, injunction, rule or
order outstanding against it which would limit in any material respect its
ability to operate its business in the manner currently contemplated.
5.4. FCC Compliance. The Company complies, and after giving effect to the
--------------
Transactions will comply, with all eligibility rules issued by the FCC to hold
broadband PCS Licenses, including FCC rules on foreign ownership and the CMRS
spectrum cap.
5.5. Brokers. It has not employed any broker, finder or investment banker
-------
or incurred any liability for any brokerage fees, commissions or finder's fees
in connection with the Transactions.
5.6. Capitalization.
--------------
(a) As of the date hereof, the authorized capital stock of the
Company consists of 700,000 shares of Voting Common Stock, 700,000 shares of
Non-Voting Common Stock, ten shares of Voting Preference Stock, 1,000 shares of
Class C Common Stock, 3,000 shares of Class D Common Stock, 70,000 shares of
Series A Preferred Stock, 140,000 shares of Series B Preferred
-14-
Stock, 140,000 shares of Series C Preferred Stock, 35,000 shares of Series D
Preferred Stock, 20,000 shares of Series E Preferred Stock, 35,000 shares of
Series F Preferred Stock and 70,000 shares of Senior Common Stock. As of the
Closing Date, after giving effect to the filing of the Restated Certificate and
the Transactions there will be issued and outstanding the shares of Preferred
Stock and Common Stock set forth on Schedule III. The record and beneficial
owners of such outstanding shares of Common Stock and Preferred Stock, as of the
Closing Date, after giving effect to the Transactions, are set forth on Schedule
III.
(b) Except as set forth on Schedule 5.6, on the Closing Date,
after giving effect to the Transactions, there will not be any existing options,
warrants, calls, subscriptions, or other rights, or other agreements or
commitments, obligating the Company to issue, transfer or sell any shares of
capital stock of the Company.
5.7. Shares. The shares of Securities being issued to the Investors
------
hereunder, when issued and paid for pursuant to the terms of this Agreement and
after giving effect to the filing of the Restated Certificate, will be duly
authorized, validly issued, fully paid and non-assessable, and will be free of
any Liens caused or created by the Company, except as set forth in the
Stockholders' Agreement and the Restated Certificate. The shares of Common Stock
or Preferred Stock, as the case may be, issued upon conversion of the Securities
issued on the Closing Date, or upon conversion thereof after the Closing Date,
when issued pursuant to the terms thereof, will be validly issued, fully paid
and non-assessable, and will be free of any Liens caused or created by the
Company, except as set forth in the Stockholders' Agreement and the Restated
Certificate.
-15-
5.8. Offering of Securities.
----------------------
(a) None of the Company or any Person acting on its behalf has
offered the Securities or any similar equity securities of the Company for sale
to, or solicited any offers to buy Securities or any similar equity securities
of the Company from, any Person, other than the Investors and a limited number
of other "accredited investors" (as defined in Rule 501(a) under the Securities
Act).
(b) None of the Company or any Person acting on its behalf will,
directly or indirectly, take any action which might subject the offering,
issuance or sale of the Securities to the registration and prospectus delivery
requirements of Section 5 of the Securities Act.
(c) Assuming the accuracy of the representations and warranties
of the Investors contained in Section 4.8, each of the offering and sale of
Securities under this Agreement to the Investors complies with all applicable
requirements of Federal and state securities laws.
5.9. Subsidiaries. Except as set forth in Schedule 5.9 hereto, the Company
------------
owns directly or indirectly all of the outstanding shares of Capital Stock of
each of its Subsidiaries, free and clear of any Liens, except Liens granted to
the lenders pursuant to the Credit Documents. Set forth on Schedule 5.9 is a
complete list of its direct and indirect Subsidiaries indicating the
jurisdictions in which each such Subsidiary is organized or qualified to conduct
business.
5.10. Small Business Matters. Neither the Company nor any Subsidiary: (i)
----------------------
presently engages in, and none of them shall hereafter engage in, any
activities, or (ii) shall use directly or indirectly the proceeds from the sale
of the Securities for any purpose, which, in either case, a SBIC is prohibited
from engaging in or providing funds for by the SBIC Act and the regulations
thereunder (including Title 13, Code of Federal Regulations, Section 107.720).
ARTICLE VI
COVENANTS
6.1. Consummation of Transactions. Each party shall use all commercially
----------------------------
reasonable efforts to take, or cause to be taken, all actions, and to do, or
cause to be done, all things necessary, proper or advisable and consistent with
applicable law to carry out all of their respective obligations under this
Agreement and to consummate the Transactions, which efforts shall include,
without limitation, the following:
(a) The parties shall use all commercially reasonable efforts to
cause the Closing to occur and the Transactions to be consummated in accordance
with the terms hereof, and, without limiting the generality of the foregoing, to
make all filings with and to give all notices to third parties which may be
necessary or reasonably required in order for the parties to consummate the
Transactions.
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(b) Each party shall furnish to the other parties all
information concerning such party and its Affiliates reasonably required for
inclusion in any application or filing to be made by the Company or any other
party in connection with the Transactions or otherwise to determine compliance
with applicable FCC Law.
(c) Upon the request of any other party, each party shall
forthwith execute and deliver, or cause to be executed and delivered, such
further instruments of assignment, transfer, conveyance, endorsement, direction
or authorization and other documents as may reasonably be requested by such
party in order to effectuate the purposes of this Agreement.
6.2. Use of Proceeds. The Company shall use the proceeds of the sale to
---------------
Investors only for the purposes described in Section 2.5.
6.3. SBIC Regulatory Provisions.
--------------------------
(a) The Company shall notify each SBIC Holder as soon as
practicable (and, in any event, not later than 15 days) prior to taking any
action after which the number of record holders of the Company's voting stock
would be increased from fewer than 50 to 50 or more, and the Company shall
notify each SBIC Holder of any other action or occurrence after which the number
of record holders of the Company's voting stock was increased (or would
increase) from fewer than 50 to 50 or more, as soon as practicable after the
Company becomes aware that such other action or occurrence has occurred or is
proposed to occur.
(b) Within 75 days after the Closing, the Company shall deliver
to each SBIC Holder a written statement certified by the Company's president or
chief financial officer describing in reasonable detail the use of the proceeds
of the sale of Securities hereunder by the Company and its Subsidiaries. In
addition to any other rights granted hereunder, the Company shall grant each
SBIC Holder and the United States Small Business Administration (the "SBA")
----
access to the Company's records for the purpose of verifying the use of such
proceeds to the extent required pursuant to SBIC Regulations.
(c) Promptly after the end of each fiscal year (but in any event
prior to February 28 of each year), the Company shall deliver to each SBIC
Holder a written assessment of the economic impact of each SBIC Holder's
investment in the Company, specifying the full-time equivalent jobs created or
retained in connection with the investment, the impact of the investment on the
revenues and profits of the business and on taxes paid by the business and its
employees.
6.4. Regulatory Compliance Cooperation. In the event that any SBIC Holder
---------------------------------
reasonably determines that it has a Regulatory Problem, to the extent reasonably
necessary, such SBIC Holder shall have the right to transfer its Securities (and
any shares of Common Stock issued upon conversion thereof) to another Person
without regard to any restrictions on transfer set forth in this Agreement or in
Section 4.1(c) of the Stockholders' Agreement and without complying with the
provisions of Section 4.3 of the Stockholders' Agreement, but subject to the
other provisions of the Stockholders' Agreement and federal and state securities
law restrictions, and the Company shall
-17-
take all such actions as are reasonably requested by such SBIC Holder in order
to (i) effectuate and facilitate such transfer by such SBIC Holder of any
Securities of the Company then held by such SBIC Holder to such Person, (ii)
permit such SBIC Holder (or any of its Affiliates) to exchange all or any
portion of voting Securities then held by it on a share-for-share basis for
shares of a class of non-voting Securities of the Company, which non-voting
Securities shall be identical in all respects to such voting Securities, except
that such non-voting Securities (or Common Stock, as applicable) shall be non-
voting and shall be convertible into voting Securities (or Common Stock, as
applicable) on such terms as are requested by such SBIC Holder in light of
regulatory considerations then prevailing, (iii) continue and preserve the
respective allocation of the voting interests with respect to the Company
arising out of the SBIC Holder's ownership of voting Securities and/or provided
for in the Stockholders' Agreement before the transfers and amendments referred
to in this Section (including entering into such additional agreements as are
reasonably requested by such SBIC Holder to permit any Person(s) designated by
such SBIC Holder) to exercise any voting power which is relinquished by such
SBIC Holder and (iv) amend this Agreement, the Restated Certificate, and any
other related documents, agreements or instruments to effectuate and reflect the
foregoing. The parties to this Agreement agree to vote their Securities in favor
of such amendments and actions.
6.5. Offering of Securities. None of the Company or any Person acting on
----------------------
its behalf will, directly or indirectly, take any action which might subject the
offering, license or sale of the Securities to the registration and prospectus
delivery requirements of Section 5 of the Securities Act.
6.6. Waiver of Preemptive Rights. With respect to the Transactions and the
---------------------------
issuance of the shares of Securities hereunder, each of the Investors hereby
waives (a) the notice requirements set forth in Section 7.2(b) of the
Stockholders' Agreement and (b) its preemptive rights that are afforded such
party in Section 7.2 of the Stockholders' Agreement.
6.7. Bidding Requirements. The Company shall comply and shall ensure that
--------------------
the Bidding Subsidiary complies with (a) all FCC Laws regarding bidding for PCS
Licenses and (b) any and all written agreements among the parties regarding the
bidding by the Bidding Subsidiary for the PCS Licenses.
ARTICLE VII
CLOSING CONDITIONS
7.1. Conditions to Obligations of All Parties. The obligation of each of
----------------------------------------
the parties to consummate the Transactions contemplated to occur at the Closing
shall be conditioned on the Company being awarded one or more PCS Licenses at
the PCS "C" Block Auction; provided, that, the Closing shall occur on August 12,
1999 even if the Company has not been awarded any PCS Licenses, unless the
Expended Amount shall be zero.
7.2. Conditions to Obligations of the Company. The obligation of the
----------------------------------------
Company to
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consummate the Transactions contemplated to occur at the Closing shall be
further conditioned upon the Company receiving any consent of the lenders that
may be required pursuant to the terms of the Credit Agreement.
ARTICLE VIII
SURVIVAL AND INDEMNIFICATION
8.1. Survival. Except for the representations and warranties contained in
--------
Sections 4.1(a), (b), (d) and (e), and 5.1(a), (b), (d) and (e) (which shall
survive the Closing, without regard to any investigation made by any of the
parties hereto, until the expiration of the applicable statute of limitations
relating thereto), the representations and warranties made in this Agreement
shall survive the Closing without regard to any investigation made by any of the
parties hereto until the second anniversary thereof and shall thereupon expire
together with any right to indemnification in respect thereof (except to the
extent a written notice asserting a claim for breach of any such representation
or warranty and describing such claim in reasonable detail shall have been given
prior to the expiration of the applicable survival period to the party which
made such representation or warranty). The covenants and agreements contained
herein to be performed or complied with prior to the Closing shall expire at the
Closing. The covenants and agreements contained in this Agreement to be
performed or complied with after the Closing shall survive the Closing; provided
that the right to indemnification pursuant to this Article VIII in respect of a
breach of a representation or warranty shall expire upon the application of the
applicable survival period of the Closing (except to the extent written notice
asserting a claim thereunder and describing such claim in reasonable detail
shall have been given prior to such expiration to the party from whom such
indemnification is sought). After the Closing, the sole and exclusive remedy of
the parties for any breach or inaccuracy of any representation or warranty
contained in this Agreement, or any other claim (whether or not alleging a
breach of this Agreement) that arises out of the facts and circumstances
constituting such breach or inaccuracy, shall be the indemnity provided in this
Article VIII.
8.2. Indemnification by the Investors. Each Investor shall indemnify and
--------------------------------
hold harmless each other Investor and the Company and their respective
Affiliates, and the shareholders, members, managers, officers, employees, agents
and/or the legal representatives of any of them (each, a "Section 8.2
-----------
Indemnified Party"), against all liabilities and expenses (including amounts
-----------------
paid in satisfaction of judgments, in compromise, as fines and penalties, and as
counsel fees) (collectively, "Losses") incurred by him or it in connection with
------
the investigation, defense, or disposition of any action, suit or other
proceeding in which any Section 8.2 Indemnified Party may be involved or with
which he or it may be threatened (whether arising out of or relating to matters
asserted by third parties against a Section 8.2 Indemnified Party or incurred or
sustained by such party in the absence of a third-party claim), that arises out
of or results from (a) any representation or warranty of such indemnifying party
contained in this Agreement being untrue in any material respect as of the date
on which it was made or (b) any material default by such indemnifying party or
any of its Affiliates in the performance of their respective obligations under
this Agreement, except to the extent (but
-19-
only to the extent) any such Losses arise out of or result from the gross
negligence or willful misconduct of such Section 8.2 Indemnified Party or its
Affiliates.
8.3. Indemnification by the Company. The Company shall indemnify and hold
------------------------------
harmless each of the Investors and their respective Affiliates, and the
shareholders, members, managers, officers, employees, agents and/or the legal
representatives of any of them (each, a "Section 8.3 Indemnified Party"),
-----------------------------
against all Losses incurred by him or it in connection with the investigation,
defense, or disposition of any action, suit or other proceeding in which any
Section 8.3 Indemnified Party may be involved or with which he or it may be
threatened (whether arising out of or relating to matters asserted by third
parties against a Section 8.3 Indemnified Party or incurred or sustained by such
party in the absence of a third-party claim), that arises out of or results from
(a) any representation or warranty of the Company contained in this Agreement
being untrue in any material respect as of the date on which it was made or (b)
any material default by the Company or any of its Affiliates in the performance
of their respective obligations under this Agreement, except to the extent (but
only to the extent) any such Losses arise out of or result from the gross
negligence or willful misconduct of such Section 8.3 Indemnified Party or its
Affiliates.
8.4. Procedures.
----------
(a) The terms of this Section 8.4 shall apply to any claim (a
"Claim") for indemnification under the terms of Sections 8.2 or 8.3. The Section
8.2 Indemnified Party or Section 8.3 Indemnified Party (each, an "Indemnified
Party"), as the case may be, shall give prompt written notice of such Claim to
the indemnifying party (the "Indemnifying Party") under the applicable Section,
which party may assume the defense thereof, provided that any delay or failure
to so notify the Indemnifying Party shall relieve the Indemnifying Party of its
obligations hereunder only to the extent, if at all, that it is materially
prejudiced by reason of such delay or failure. The Indemnified Party shall have
the right to approve any counsel selected by the Indemnifying Party and to
approve the terms of any proposed settlement, such approval not to be
unreasonably delayed or withheld (unless, in the case of approval of a proposed
settlement, such settlement provides only, as to the Indemnified Party, the
payment of money damages actually paid by the Indemnifying Party and a complete
release of the Indemnified Party in respect of the claim in question).
Notwithstanding any of the foregoing to the contrary, the provisions of this
Article VIII shall not be construed so as to provide for the indemnification of
any Indemnified Party for any liability to the extent (but only to the extent)
that such indemnification would be in violation of applicable law or that such
liability may not be waived, modified or limited under applicable law, but shall
be construed so as to effectuate the provisions of this Article VIII to the
fullest extent permitted by law.
(b) In the event that the Indemnifying Party undertakes the
defense of any Claim, the Indemnifying Party will keep the Indemnified Party
advised as to all material developments in connection with such Claim,
including, but not limited to, promptly furnishing the Indemnified Party with
copies of all material documents filed or served in connection therewith.
(c) In the event that the Indemnifying Party fails to assume the
defense of any Claim within ten business days after receiving written notice
thereof, the Indemnified Party shall have the
-20-
right, subject to the Indemnifying Party's right to assume the defense pursuant
to the provisions of this Article VIII, to undertake the defense, compromise or
settlement of such Claim for the account of the Indemnifying Party. Unless and
until the Indemnified Party assumes the defense of any Claim, the Indemnifying
Party shall advance to the Indemnified Party any of its reasonable attorneys'
fees and other costs and expenses incurred in connection with the defense of any
such action or proceeding. Each Indemnified Party shall agree in writing prior
to any such advancement that, in the event he or it receives any such advance,
such Indemnified Party shall reimburse the Indemnifying Party for such fees,
costs and expenses to the extent that it shall be determined that he or it was
not entitled to indemnification under this Article VIII.
(d) In no event shall an Indemnifying Party be required to pay in
connection with any Claim for more than one firm of counsel (and local counsel)
for each of the following groups of Indemnified Parties: (i) the Investors,
their respective Affiliates, and the shareholders, members, managers, officers,
employees, agents and/or the legal representatives of any of them; and (ii) the
Company and its respective Affiliates, and the shareholders, members, managers,
officers, employees, agents and/or the legal representatives of any of them.
8.5. Registration Rights. Notwithstanding anything to the contrary in this
-------------------
Article VIII, the indemnification and contribution provisions set forth in
Sections 5(e) and 5(f) of the Stockholders' Agreement shall govern any claim
made with respect to the registration statements filed pursuant to Section 5 of
the Stockholders' Agreement or sales made thereunder.
8.6. Limit on Indemnity. So long as the Company does not conduct any
------------------
business or engage in any activities other than those described in the first
sentence of the definition of "Business" (as such term is defined in the
Stockholders' Agreement), each party waives its right to indemnification under
this Article VIII or any other right to assert any claim arising from any
inaccuracy in the Company's representations and warranties set forth in Section
5.10.
ARTICLE IX
TERMINATION
9.1. Termination. In addition to any other rights of termination set forth
-----------
herein, this Agreement may be terminated, and the Transactions abandoned,
without further obligation of any party (except as set forth herein), at any
time prior to the Closing Date:
(a) by mutual written consent of the parties;
(b) by any party by written notice to the other parties, if the
consummation of the Transactions shall be prohibited by a final, non-appealable
order, decree or injunction of a court of competent jurisdiction.
Notwithstanding the foregoing, subject to the conditions set forth
in Article VII, this Agreement may not be terminated by any party under any
circumstance until after the completion of the PCS `C' Block Auction or until
after the Bidding Subsidiary ceases to bid in
-21-
the PCS `C' Block Auction, in which event this Agreement may be terminated only
as to the amount by which the total Purchase Commitments exceed the Expended
Amount.
9.2. Effect of Termination. (a) In the event of a termination of this
---------------------
Agreement, no party hereto shall have any liability or further obligation to any
other party to this Agreement, except as set forth in paragraph (b) below, and
except that nothing herein will relieve any party from liability for any breach
by such party of this Agreement.
(a) In the event of a termination of this Agreement pursuant to
Section 9.1, all provisions of this Agreement shall terminate, except Articles
VIII and X.
(b) Whether or not the Closing occurs, except as otherwise
expressly provided in this Agreement, all costs and expenses incurred in
connection with this Agreement and the Transactions shall be paid by the party
incurring such expenses.
ARTICLE X
MISCELLANEOUS PROVISIONS
10.1. Amendment and Modification. This Agreement may be amended, modified
--------------------------
or supplemented only by written agreement of each of the parties.
10.2. Waiver of Compliance; Consents. Any failure of any of the parties to
------------------------------
comply with any obligation, covenant, agreement or condition herein may be
waived by the party or parties entitled to the benefits thereof only by a
written instrument signed by the party granting such waiver, but such waiver or
failure to insist upon strict compliance with such obligation, covenant,
agreement or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure. Whenever this Agreement requires
or permits consent by or on behalf of any party hereto, such consent shall be
given in writing in a manner consistent with the requirement for a waiver of
compliance as set forth in this Section 10.2.
10.3. Notices. All notices or other communications hereunder shall be in
-------
writing and shall be given (and shall be deemed to have been duly given upon
receipt) by delivery in person against receipt, by facsimile transmission with
confirmation of receipt, or by registered or certified mail (return receipt
requested), postage prepaid, with an acknowledgment of receipt signed by the
addressee or an authorized representative thereof, addressed as follows (or to
such other address for a party as shall be specified by like notice; provided
that notice of a change of address shall be effective only upon receipt
thereof):
If to an Investor, to its address set forth on Schedule I.
If to the Company, to it:
▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
-22-
Attn: General Counsel
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
10.4. Expenses. The Company agrees, in the event the Transactions are
--------
consummated, to pay, and save the Cash Equity Investors harmless against, the
reasonable fees and disbursements of one corporate counsel and one FCC counsel
of the Investors in the aggregate in connection with the preparation,
negotiation, execution and delivery of this Agreement, the instruments and
documents executed pursuant hereto or thereto or in connection herewith or
therewith, and the consummation of the Transactions.
10.5. Parties in Interest; Assignment. This Agreement is binding upon and
-------------------------------
is solely for the benefit of the parties hereto and their respective permitted
successors, legal representatives and permitted assigns. Neither the Company nor
any Investor may assign its rights and obligations hereunder without the prior
written consent of each of the other parties; provided, that: (a) the Company
shall have the right to assign its rights under this Agreement to the lenders
(the "Lenders") named in the Credit Agreement, as security pursuant to the terms
-------
of the Credit Documents, it being understood that as a result of any such
assignment to the Lenders, after an event of default under the Credit Agreement
and the expiration of any applicable grace and cure periods thereunder, the
Lenders shall have the right, on behalf of the Company, to enforce the
obligation of each Investor to make capital contributions to the Company in the
amounts and on the dates specified on Schedule I (or such earlier dates as may
be established in accordance with the terms of the Stockholders' Agreement) and
that, in connection with any such assignment to the Lenders, the Lenders shall
not assume any obligations of the Company hereunder.
10.6. Applicable Law. This Agreement shall be governed by and construed in
--------------
accordance with the laws of the State of New York without giving effect to the
conflicts of law principles thereof. The parties hereto hereby irrevocably and
unconditionally consent to submit to the non-exclusive jurisdiction of the
courts of the State of New York and of the United States of America located in
the County of New York, New York (the "New York Courts") for any litigation
---------------
arising out of or relating to this Agreement and the Transactions, waive any
objection to the laying of venue of any such litigation in the New York Courts
and agrees not to plead or claim in any New York Court that such litigation
brought therein has been brought in an inconvenient forum.
10.7. Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
10.8. Interpretation. The article and section headings contained in this
--------------
Agreement are for convenience of reference only, are not part of the agreement
of the parties and shall not affect in any way the meaning or interpretation of
this Agreement.
10.9. Entire Agreement. This Agreement, including the exhibits and
schedules hereto and thereto and the certificates and instruments delivered
pursuant to the terms of this Agreement, embody the entire agreement and
understanding of the parties hereto in respect of the Transactions.
-23-
There are no restrictions, promises, representations, warranties, covenants or
undertakings, other than those expressly set forth or referred to herein. This
Agreement supersedes all prior agreements and understandings between the parties
with respect to such Transactions.
10.10. Publicity. So long as this Agreement is in effect, the parties
---------
agree to consult with each other in issuing any press release or otherwise
making any public statement with respect to the Transactions, and no party shall
issue any press release or make any such public statement prior to such
consultation, except as may be required by Law. No press release or other public
statement by the parties hereto shall disclose any of the financial terms of the
Transactions without the prior consent of the other parties, except as may be
required by Law. A breach of the provisions of this Section 10.10 by a party
shall not give rise to any right to terminate this Agreement.
10.11. Specific Performance. The parties hereto agree that irreparable
--------------------
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof in any New York Courts.
10.12. Remedies Cumulative. All rights, powers and remedies provided under
-------------------
this Agreement or otherwise available in respect hereof at law or in equity
shall be cumulative and not alternative, and the exercise or beginning of the
exercise of any thereof by any party shall not preclude the simultaneous or
later exercise of any other such right, power or remedy by such party.
10.13. Severability. Any provision of this Agreement that is prohibited or
------------
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. If any court determines that any covenant or any part of
any covenant is invalid or unenforceable, such covenant shall be enforced to the
extent permitted by such court, and all other covenants shall not thereby be
affected and shall be given full effect, without regard to the invalid portions.
10.14. Beneficiaries of Agreement. The representations, warranties,
--------------------------
covenants and agreements expressed in this Agreement are for the sole benefit of
the other parties hereto and the Section 8.2 Indemnified Parties and Section 8.3
Indemnified Parties and are not intended to benefit, and may not be relied upon
or enforced by, any other party as a third party beneficiary or otherwise,
except that the Management Shareholders are intended to benefit by, and may rely
upon or enforce, the provisions of Section 2.3 of this Agreement.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
-24-
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
TELECORP PCS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
AT&T WIRELESS PCS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Cash Equity Investors:
CB CAPITAL INVESTORS, L.P.
By: CB Capital Investors, Inc.,
its general partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: General Partner
NORTHWOOD VENTURES LLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
NORTHWOOD CAPITAL PARTNERS LLC
-25-
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
MEDIA\COMMUNICATIONS INVESTORS
LIMITED PARTNERSHIP
By: M/C Investor General Partner - J, Inc.,
its general partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title:
MEDIA\COMMUNICATIONS PARTNERS III
LIMITED PARTNERSHIP
By: M/C III L.L.C.,
its general partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Manager
EQUITY-LINKED INVESTORS-II
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇ ASSOCIATES-II,
its general partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: Attorney-in-Fact
PRIVATE EQUITY INVESTORS III, L.P.
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇ ASSOCIATES III, LLC,
-26-
its general partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: Attorney-in-Fact
▇▇▇▇ COMMUNICATIONS PARTNERS, L.P.
By: HCP Investments, L.P.,
its general partner
By: ▇▇▇▇ Partners, LLC,
its general partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Manager
HCP CAPITAL FUND, L.P.
By: ▇▇▇▇▇ ▇. ▇▇▇▇ & Co.,
its general partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Chairman
WHITNEY EQUITY PARTNERS, L.P.
By: ▇.▇. ▇▇▇▇▇▇▇ & Co.,
its general partner
-27-
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇.
--------------------------------------
Name:
Title: General Partner
▇.▇. ▇▇▇▇▇▇▇ III, L.P.
By: ▇.▇. ▇▇▇▇▇▇▇ & Co.,
its general partner
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇.
--------------------------------------
Name:
Title: General Partner
WHITNEY STRATEGIC PARTNERS III, L.P.
By: ▇.▇. ▇▇▇▇▇▇▇ & Co.,
its general partner
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇.
--------------------------------------
Name:
Title: General Partner
TORONTO DOMINION INVESTMENTS INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
ONE LIBERTY FUND IV, L.P.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
--------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
Title: General Partner
-28-
SCHEDULE I
Aggregate Commitment
--------------------
--------------------------------------------------------------------------
Name and Notice Address Aggregate Commitment
--------------------------------------------------------------------------
AT&T Wireless PCS, Inc. $4,640,000
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------------------------------------------
CB Capital Investors, L.P. $3,758,000
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
--------------------------------------------------------------------------
▇▇▇▇▇ Associates $3,758,000
Equity-Linked Investors-II $1,879,000
Private Equity Investors III, L.P. $1,879,000
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
--------------------------------------------------------------------------
▇▇▇▇ Capital Corporation $2,818,000
▇▇▇▇ Communications Partners, L.P. $2,581,850
HCP Capital Fund, L.P. $ 236,150
One Galleria Tower
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
--------------------------------------------------------------------------
▇.▇. ▇▇▇▇▇▇▇ & Co. $2,348,000
Whitney Equity Partners, L.P. $ 704,400
▇.▇. ▇▇▇▇▇▇▇ III, L.P. $1,604,927
Whitney Strategic Partners III, L.P. $ 38,673
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
--------------------------------------------------------------------------
Aggregate Commitment (Continued)
--------------------------------
--------------------------------------------------------------------------
M/C Partners $ 1,410,000
Media/Communications Investors Limited
Partnership
Media/Communications Partners III Limited $ 56,400
Partnership
$ 1,353,600
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
--------------------------------------------------------------------------
OneLiberty Fund IV, L.P. $ 470,000
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
--------------------------------------------------------------------------
Toronto Dominion Investments Inc. $ 470,000
▇▇ ▇▇▇▇ ▇▇/▇▇/ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(with a copy to)
Toronto Dominion Investments, Inc.
▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
--------------------------------------------------------------------------
Northwood Capital Partners $ 328,000
Northwood Ventures LLC $ 278,800
Northwood Capital Partners LLC $ 49,200
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
--------------------------------------------------------------------------
TOTAL: $20,000,000
--------------------------------------------------------------------------
SCHEDULE II
Stock Exchange
--------------
Voting Common Stock:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ = total Voting Common Stock and Series F Preferred
Stock issued hereunder to Cash Equity Investors
and AT&T PCS divided by .86 and multiplied by
.0555 up to an aggregate amount equal to 645.35
shares.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ = total Voting Common Stock and Series F Preferred
Stock issued hereunder to Cash Equity Investors
and AT&T PCS divided by .86 and multiplied by
.0345 up to an aggregate amount equal to 401.16
shares.
1998 Restricted Stock Plan = total Voting Common Stock and Series F Preferred
Stock issued hereunder to Cash Equity Investors
and AT&T PCS divided by .86, multiplied by .14 and
minus Voting Common Stock issued hereunder to
Vento and ▇▇▇▇▇▇▇▇.
Series E Preferred Stock:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ = total Series C Preferred Stock and Series D
Preferred Stock issued hereunder to Cash Equity
Investors and AT&T PCS divided by .90 and
multiplied by .0444 up to an aggregate of 493.33
shares.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ = total Series C Preferred Stock and Series D
Preferred Stock issued hereunder to Cash Equity
Investors and AT&T PCS divided by .90 and
multiplied by .0276 up to an aggregate of 306.67
shares.
1998 Restricted Stock Plan = total Series C Preferred Stock and Series D
Preferred Stock issued hereunder to Cash Equity
Investors and AT&T PCS divided by .90, multiplied
by .10 minus the Series E Preferred Stock issued
hereunder to Vento and ▇▇▇▇▇▇▇▇.
SCHEDULE 4.2
Cash Equity Investor Consents
-----------------------------
The execution, delivery and performance of the Agreement will or may
require the following consents, approvals and reviews:
None.
SCHEDULE 4.4
Attributable Interests
----------------------
None.
SCHEDULE 5.2
Company Consents
----------------
The execution, delivery and performance of the Agreement will or may
require the following consents, approvals and reviews:
None.
SCHEDULE 5.6
Outstanding Options, Warrants, etc.
-----------------------------------
1. Upon the closing of the transaction contemplated by the License Acquisition
Agreement by and between Wireless 2000, Inc. ("Wireless") and the Company,
dated as of December 2, 1998 (the "Wireless Acquisition Agreement"), the
Company shall issue to Wireless: (i) five hundred forty-five and 20/100
(545.20) shares of Series C Preferred Stock, par value $.01 per share, and
(ii) five hundred thirty and 40/100 (530.40) shares of Class A Voting
Common Stock, par value $.01 per share, of the Company.
2. Upon the closing of the transaction contemplated by the License Acquisition
Agreement by and between Mercury PCS II, LLC ("Mercury") and the Company,
dated as of May 15, 1998 (the "Mercury Acquisition Agreement"), the Company
shall issue to Mercury: (i) two thousand three hundred thirty-two and
55/100 (2,332.50) shares of Series C Preferred Stock, par value $.01 per
share, and (ii) two thousand two hundred sixty-nine and 23/100 (2,269.23)
shares of Class A Voting Common Stock, par value $.01 per share, of the
Company and shall issue additional shares of Series C Preferred Stock and
Class A Voting Common Stock to the Cash Equity Investors as set forth on
Schedule V of the Securities Purchase Agreement, setting forth Share
Allocation With Supplemental Allocation.
3. The Company is in negotiations with respect to a transaction which would
involve the issuance of instruments convertible into Capital Stock of the
Company to certain existing shareholders of the Company in connection with
the purchase by the Company of non-management equity interests in each of
THC of Houston, Inc., THC of Melbourne, Inc., THC of Tampa, Inc. and THC of
Orlando, Inc.
4. The Company is in negotiations to enter into: (A) an Asset Purchase
Agreement with AT&T PCS to purchase from AT&T PCS a certain disaggregated
20 MHz of the 30MHz A Block license for the San ▇▇▇▇, Puerto Rico MTA in
exchange for: (v) $19,000,000 in cash, (w) Series A Convertible Preferred
Stock, Series D Preferred Stock and Series F Preferred Stock of the Company
in an aggregate amount of $40,000,000, (x) Series D Senior Subordinated
Notes (or Series D Senior Subordinated Notes combined with Series E Senior
Subordinated Notes), issued under a certain Indenture by and between the
Company and a designated Trustee, in an aggregate amount of $36,000,000,
(y) assumption of certain liabilities, and (z) reimbursement to AT&T PCS of
$3,200,000 of Microwave clearing costs, and (B) a Stock Purchase Agreement
between the Company and certain Cash Equity Investors identified therein
pursuant to which the Company will sell to such Cash Equity Investors an
aggregate of $39,996,000 of its Series C Preferred Stock and Class A Common
Stock.
SCHEDULE 5.9
Subsidiaries
------------
=========================================================================================
Subsidiary Name State of Qualified in:
Incorporation
-----------------------------------------------------------------------------------------
1. TeleCorp Communications, Inc. DE AR, DC, IL, IN, LA, MA,
MO, MS, NH, TN, TX, VA
-----------------------------------------------------------------------------------------
2. TeleCorp Holding Corp., Inc. DE LA, MA, NH, TN, TX, VA/1/
-----------------------------------------------------------------------------------------
3. TeleCorp Limited Holdings, Inc. DE AR, DC, IL, MA, MS
-----------------------------------------------------------------------------------------
4. TeleCorp Realty Holdings, Inc. DE None
-----------------------------------------------------------------------------------------
5. TeleCorp PCS, L.L.C.
(Sole Member is: TeleCorp PCS, Inc.) DE None
-----------------------------------------------------------------------------------------
6. TeleCorp Realty, L.L.C. DE AR, DC, IL, LA, MA, MO,
(Managing Member is: TeleCorp MS, NH, TN, TX
Communications, Inc.)
-----------------------------------------------------------------------------------------
7. TeleCorp Equipment Leasing, L.P. DE AR, DC, IL, IN, LA, MA,
(General Partner is: TeleCorp Limited MO, MS, NH, TN, TX
Holdings, Inc.)
=========================================================================================
_____________________
/1/ TeleCorp Holding Corp will be withdrawn from each of the states in which it
is qualified (except Delaware) upon the filing of the company's tax returns for
the year ended December 31, 1998.