Exhibit 10.36
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LICENSE PURCHASE AGREEMENT
between
DIGITAL PCS, LLC
and
TRITEL, INC.
Dated as of May 20, 1999
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ARTICLE I
DEFINITIONS
ARTICLE II
PURCHASE AND SALE OF LICENSES; PAYMENT OF CONSIDERATION;
CERTAIN RESTRICTIONS ON TRANSFER
2.1 Purchase and Sale of Mercury Licenses and Other Mercury Assets ........5
2.2 Consideration for Mercury Licenses.....................................5
2.3 Consideration for Other Mercury Assets.................................5
2.4 Payment of Certain Expenses............................................6
2.5 Restrictive Legends....................................................6
ARTICLE III
CLOSING
3.1 Time and Place of Closing..............................................6
3.2 Closing Actions and Deliveries.........................................6
3.3 Payment of Transfer Taxes..............................................7
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1 Organization and Standing..............................................7
4.2 Power and Authority....................................................8
4.3 Due Authorization......................................................8
4.4 Enforceability.........................................................8
4.5 No Breach..............................................................8
4.6 Consents; No Conflicts.................................................8
4.7 Litigation.............................................................9
4.8 FCC Compliance.........................................................9
4.9 Brokers................................................................9
4.10 ................................................................9
ARTICLE V
COVENANTS
5.1 Consummation of Transactions..........................................11
5.2 Confidentiality.......................................................12
5.3 Certain Covenants.....................................................13
5.4 Certain Mercury Transactions..........................................13
ARTICLE VI
CLOSING CONDITIONS
6.1 Conditions to Obligations of All Parties..............................14
6.2 Conditions to Obligations of the Company..............................15
6.3 Conditions to the Obligations of Mercury..............................16
ARTICLE VII
SURVIVAL AND INDEMNIFICATION
7.1 Survival..............................................................17
7.2 Indemnification by Mercury and Mercury Investor Indemnitors...........17
7.3 Indemnification by the Managers.......................................18
7.4 Indemnification by the Company........................................18
7.5 Procedures............................................................19
7.6 Escrow and Reconciliation.............................................20
ARTICLE VIII
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TERMINATION
8.1 Termination...........................................................22
8.2 Effect of Termination.................................................22
ARTICLE IX
MISCELLANEOUS PROVISIONS
9.1 Amendment and Modification............................................23
9.2 Waiver of Compliance; Consents........................................23
9.3 Notices...............................................................23
9.4 Parties in Interest; Assignment.......................................24
9.5 Applicable Law........................................................24
9.6 Counterparts..........................................................24
9.7 Interpretation........................................................24
9.8 Entire Agreement......................................................24
9.9 Publicity.............................................................25
9.10 Specific Performance..................................................25
9.11 Remedies Cumulative...................................................25
SCHEDULES
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Schedule I -- Mercury Licenses
Schedule II -- Mercury Investors
Schedule 1.1 -- Permitted Expenditures
Schedule 2.1 -- Mercury Assets
Schedule 2.3 -- Other Mercury Debt
Schedule 4.6 -- Mercury Consents; Company Consents
Schedule 4.7 -- Mercury Litigation
Schedule 4.10 (a) -- Mercury FCC Proceedings
Schedule 4.10 (c) -- Cash Flow Statements
Schedule 4.10 (e) -- Litigation Affecting Other Mercury Assets
EXHIBITS
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Exhibit A -- Form of Opinion of Counsel to Mercury
Exhibit B -- Form of Opinion of FCC Counsel to Mercury
Exhibit C -- Form of Opinion of Counsel to Company
Exhibit D -- Form of Assignment
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LICENSE PURCHASE AGREEMENT
LICENSE PURCHASE AGREEMENT, dated as of May 20, 1999, between DIGITAL
PCS, LLC (f/k/a Mercury PCS II, LLC), a Mississippi limited liability company
("Mercury"), ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇, ▇.▇. ▇▇▇▇▇▇, ▇▇. and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
(individually a "Manager" and collectively the "Managers"), and TRITEL, INC., a
Delaware corporation (the "Company").
WHEREAS, Mercury has been granted the PCS licenses described on
Schedule I (the "Mercury Licenses"); and
WHEREAS, Mercury and the Company have entered into an Agreement dated
as of January 7, 1999 (the "Option Agreement"), pursuant to which Mercury has
granted to the Company an Option (as such term is defined in the Option
Agreement) to purchase the Mercury Licenses; and
WHEREAS, pursuant to the Option Agreement, the Company has exercised
its Option to purchase the Mercury Licenses on the terms and subject to the
conditions herein set forth;
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
As used herein, the following terms have the following meanings (unless
indicated otherwise, all Section and Article references are to Sections and
Articles in this Agreement, and all Schedule and Exhibit references are to
Schedules and Exhibits to this Agreement):
"Affiliate" means, with respect to any Person, any other Person that
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
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.
"Claim" has the meaning set forth in Section 7.5.
"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.
"Common Stock" has the meaning set forth in the Securities Purchase
Agreement.
"Company" has the meaning set forth in the preamble.
"Confidential Information" means any and all information regarding the
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 Authorities
or other third parties necessary to authorize, approve or permit the parties
hereto to consummate the transactions contemplated hereby and for the Company to
operate its business after the Closing Date as currently contemplated.
"Escrowed Shares" has the meaning set forth in Section 7.6.
"FCC" means the Federal Communications Commission or similar regulatory
authority established in replacement thereof.
"FCC Debt" means the indebtedness of Mercury to the United States
Department of the Treasury, in the aggregate principal amount of $12,189,890.40,
incurred in connection with its acquisition of Mercury Licenses.
"FCC Law" means the Communications Act of 1934, as amended, including
as amended by the Telecommunications Act of 1996, and the rules, regulations and
policies promulgated thereunder.
"Final Order" has the meaning set forth in Section 6.1(b).
"Governmental Authority" means a Federal, state or local court,
legislature, governmental agency (including, without limitation, the United
States Department of Justice), commission or regulatory or administrative
authority or instrumentality.
"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder.
"Indemnified Party" has the meaning set forth in Section 7.5.
"Indemnifying Party" has the meaning set forth in Section 7.5.
"Law" means applicable common law and any statute, ordinance, code or
other law, rule, permit, permit condition, regulation, order, decree, technical
or other standard,
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requirement or procedure enacted, adopted, promulgated, applied or followed by
any Governmental Authority.
"License" means a license, permit, certificate of authority, waiver,
approval, certificate of public convenience and necessity, registration or other
authorization, consent or clearance to construct or operate a facility,
including any emissions, discharges or releases therefrom, or to transact an
activity or business, to construct a tower or to use an asset or process, in
each case issued or granted by a Governmental Authority.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest, right of first refusal or right of others therein, or
encumbrance of any nature whatsoever in respect of such asset.
"Losses" means losses, damages, costs, expenses or liabilities,
including any amounts paid in satisfaction of judgments, in compromise, as fines
and penalties, and as counsel fees incurred by a Person in connection with the
investigation, defense, or disposition of any action, suit or other proceeding
in which any such Person may be involved or with which such Person may be
threatened.
"Managers" has the meaning set forth in the preamble.
"Material Adverse Effect" means a material adverse effect on the
business, financial condition, assets, liabilities or results of operations or
prospects of the Person specified.
"Mercury" has the meaning set forth in the preamble.
"Mercury Investors" means the Persons that beneficially own, directly
or indirectly, equity interests in Mercury on the date hereof and that are set
forth on Schedule II.
"Mercury License Transfer" has the meaning set forth in Section 3.2(a).
"Mercury Licenses" has the meaning set forth in the first recital.
"New York Courts" has the meaning set forth in Section 9.5.
"Old Mercury Stockholders" has the meaning set forth in the Securities
Purchase Agreement.
"Option Agreement" has the meaning set forth in the second recital.
"Other Mercury Assets" has the meaning set forth in Section 2.1.
"Other Mercury Debt" has the meaning set forth in Section 2.3.
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"Percentage Share" means a fraction the numerator of which is the
number of shares of Series C Preferred Stock distributed to any Person pursuant
to Section 5.4 hereunder and the denominator of which is the total number of
shares of Series C Preferred Stock issued hereunder.
"Permitted Expenditures" means expenditures relating to the Mercury
Licenses in an amount to be agreed by the Company, in its sole discretion.
"Person" means an individual, corporation, partnership, limited
liability company, association, joint stock company, Governmental Authority,
business trust, unincorporated organization, or other legal entity.
"Purchase Price" has the meaning set forth in Section 2.2.
"Reconciliation Date" has the meaning set forth in the Securities
Purchase Agreement.
"Representatives" has the meaning set forth in Section 5.2(a).
"Section 7.2 Indemnified Party" has the meaning set forth in Section
7.2.
"Section 7.2 Indemnifying Party" has the meaning set forth in Section
7.2.
"Section 7.2 Losses" has the meaning set forth in Section 7.2.
"Section 7.3 Indemnified Party" has the meaning set forth in Section
7.3.
"Section 7.3 Indemnifying Party" has the meaning set forth in Section
7.3.
"Section 7.4 Indemnified Party" has the meaning set forth in Section
7.4.
"Section 7.4 Indemnifying Party" has the meaning set forth in Section
7.4.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Purchase Agreement" means the Securities Purchase
Agreement, dated as of May 20, 1998, by and among the Company, AT&T Wireless PCS
Inc., TWR Cellular Inc., Mercury, Mercury PCS LLC, the Cash Equity Investors
identified therein, and the Managers identified therein, as the same may be
amended, modified or supplemented in accordance with the terms thereof.
"Series C Preferred Stock" has the meaning set forth in Section 2.2.
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"Solvent" means, when used with respect to any Person, that at the time
of determination: (a) the fair market value of its assets is in excess of the
total amount of its liabilities (including, without limitation, contingent
liabilities), (b) the present fair saleable value of its assets is greater than
its probable liability for its existing debts as such debts become absolute and
mature, (c) it is then able and expects to be able to pay its indebtedness
(including without limitation, contingent indebtedness and other commitments) as
they mature, and (d) it has capital sufficient to carry on its business as
conducted and as proposed to be conducted.
"Subsidiary" shall mean, with respect to any Person, a corporation or
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.
ARTICLE II
PURCHASE AND SALE OF LICENSES; PAYMENT OF CONSIDERATION;
CERTAIN RESTRICTIONS ON TRANSFER
2.1 Purchase and Sale of Mercury Licenses and Other Mercury Assets.
Upon the terms and subject to the conditions hereof and in reliance upon the
representations, warranties and agreements herein contained, at the Closing,
Mercury shall sell, transfer, assign, convey and deliver to the Company (or one
or more wholly owned Subsidiaries of the Company designated by the Company),
free and clear of all Liens (other than Liens of the United States Department of
the Treasury securing FCC Debt), and the Company agrees to purchase, acquire and
accept from Mercury, the Mercury Licenses and the assets described on Schedule
2.1 (the "Other Mercury Assets").
2.2 Consideration for Mercury Licenses. Upon the terms and subject to
the conditions hereof and in reliance upon the representations, warranties and
agreements herein contained, at the Closing, the Company agrees (I) to pay to
Mercury in consideration for the Mercury Licenses, that number of shares of
Series C Preferred Stock, par value $.01 per share (the "Series C Preferred
Stock") as shall be equal to (x) the aggregate amount paid by Mercury to the FCC
in respect of the Mercury Licenses (including any interest paid by Mercury on
FCC Debt through the Closing Date but excluding the principal amount of, and
accrued interest on, the FCC Debt outstanding on the Closing Date), divided by
(y) One Thousand ($1,000) Dollars (the "Purchase Price"), and (II) to assume the
FCC Debt.
2.3 Consideration for Other Mercury Assets. Upon the terms and subject
to the conditions hereof and in reliance upon the representations, warranties
and agreements herein contained, on and as of the Closing Date, the Company
shall pay to Mercury, in consideration for the Other Mercury Assets, an amount
equal to the principal amount of indebtedness incurred by Mercury to fund the
cost of Permitted Expenditures together with all interest paid or accrued
thereon (collectively, the "Other Mercury Debt"). The outstanding principal
amount of each item of Other Mercury Debt, as of the date hereof is set forth on
Schedule 2.3.
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2.4 Payment of Certain Expenses. At the Closing (if any) the Company
shall reimburse Mercury, against delivery of customary invoices in reasonable
detail, for its legal fees and related expenses incurred in connection with the
preparation and filing of applications on Form 490 with the FCC necessary to
effect the Mercury License Transfer, provided, that the Company's reimbursement
obligation shall be limited to fees and expenses incurred through the date of
filing of the last of such applications.
2.5 Restrictive Legends. Each certificate representing shares of the
Series C Preferred Stock (including the shares originally delivered hereunder or
delivered upon conversion of the Series C Preferred Stock, or delivered in
substitution or exchange for any of the foregoing) will bear a legend 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 (as defined in the Securities Purchase
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."
ARTICLE III
CLOSING
3.1 Time and Place of Closing. Upon the terms and subject to the
conditions hereof, the closing of the transactions contemplated hereby (the
"Closing") shall take place at the offices of ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ Constant &
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ at 10:00 a.m. on the
twelfth business day following the date of receipt of the last Consent required
by subsections (a) through (c) of Section 6.1, 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 VI
(the "Closing Date").
3.2 Closing Actions and Deliveries. Upon the terms and subject to the
satisfaction or waiver by the appropriate party, if applicable, of the
conditions set forth in Article
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VI, to effect the purchase and sale of the Mercury Licenses and the Other
Mercury Assets, the parties shall on the Closing Date take the following
actions:
(a) Assignment of Licenses and Assets. Mercury shall, and each Manager
shall cause Mercury to, execute and deliver to the Company (or the
applicable Subsidiary), (i) one or more instruments of assignment,
substantially in the form of Exhibit D, sufficient to assign the Mercury
Licenses to the Company (or one or more wholly owned Subsidiaries of the
Company designated by the Company) (such assignments being herein
collectively referred to as the "Mercury License Transfer"), and (ii) an
Assignment and ▇▇▇▇ of Sale, in form reasonably acceptable to the Company,
and such other good and sufficient instruments of conveyance, transfer and
assignment as shall be necessary or appropriate to transfer to and vest in
the Company (or the applicable Subsidiary) the Other Mercury Assets with
warranties of title consistent with this Agreement.
(b) Payment of Purchase Price. The Company shall pay the Purchase Price
of the Mercury Licenses to Mercury in accordance with Section 2.2.
(c) Assumption and Reimbursement of Indebtedness. The Company shall
execute and deliver to Mercury an instrument of assumption, in form and
substance reasonably satisfactory to Mercury, in respect of the FCC Debt and
shall pay, or reimburse Mercury in respect of, the Other Mercury Debt.
(d) Other Deliveries. The parties shall execute and deliver or cause 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 hereby on the Closing Date.
3.3 Payment of Transfer Taxes. The Company shall pay or cause to be
paid at the Closing or, if due thereafter, promptly when due, all gross receipts
taxes, gains taxes (including, without limitation, real property gains tax or
other similar taxes), transfer taxes, sales taxes, stamp taxes, and any other
taxes, but excluding any Federal, State or local income taxes payable in
connection with the transfer of the Mercury Licenses.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
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Mercury (as to itself), each Manager (severally as to itself and
jointly and severally as to Mercury), and the Company (as to itself and each of
its Subsidiaries), represents and warrants to each of the other parties that:
4.1 Organization and Standing. It is a corporation, limited liability
company, general partnership or limited partnership, as applicable, 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. 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 contemplated hereby or its
ability to perform its obligations under this Agreement.
4.2 Power and Authority. It has the requisite power and authority (or,
in the case of the Managers, 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.
4.3 Due Authorization. The execution and delivery of this Agreement by
it and the consummation of the transactions contemplated hereby have been duly
and validly authorized by its Board of Directors (or equivalent body, as
applicable) 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 contemplated hereby.
4.4 Enforceability. 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.
4.5 No Breach. After giving effect to the transactions contemplated
hereby, it is not in breach of any obligation under this Agreement.
4.6 Consents; No Conflicts. Neither the execution, delivery and
performance by it of this Agreement nor the consummation of the transactions
contemplated hereby 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 4.6, 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 4.6) or the approval of its
board of
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directors, members, general partner, stockholders or similar constituent bodies,
as applicable (other than approvals that 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 contemplated hereby. To its
knowledge, except as set forth on Schedule 4.6, there is no fact relating to it
or its Affiliates that would be reasonably expected to prevent it from
consummating the transactions contemplated hereby or disqualify the Company from
obtaining the Consents (including without limitation, FCC Consent) required in
order to consummate the Mercury License Transfer.
4.7 Litigation. Except as set forth on Schedule 4.7, there is no action
(including court action), proceeding or investigation pending 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 contemplated hereby or to fulfill its obligations under this
Agreement, which seeks to prevent or challenge the transactions contemplated
hereby, or which seeks to have an adverse effect on the Company or its wholly
owned Subsidiaries.
4.8 FCC Compliance. It complies with all eligibility rules issued by
the FCC to hold broadband PCS licenses, including without limitation, FCC rules
on foreign ownership and the CMRS spectrum cap.
4.9 Brokers. The Company 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 contemplated hereby.
4.10 Mercury and each Manager, jointly and severally, represent and
warrant that:
(a) Mercury Licenses. Mercury is the authorized legal holder, free and
clear of any Liens (other than Liens securing the FCC Debt, Liens securing
indebtedness to the Company and Liens securing indebtedness of Mercury to
Airwave Communications, LLC that will be released on the Closing Date), of the
Mercury Licenses set forth on Schedule I, true and correct copies of which are
attached thereto. The Mercury Licenses are, and on the Closing Date will be,
valid and in full force and effect. Except as set forth on Schedule 4.10(a) and
for proceedings affecting the PCS or wireless communications services industry
generally, including investigations by governmental agencies of bidding
practices of bidders in the FCC auctions of PCS spectrum, there is not pending,
nor to its knowledge, threatened against Mercury or the Mercury Licenses, any
application, action (including court action), petition, objection or other
pleading, or any proceeding with the FCC which questions or contests the
validity of, or seeks the revocation, non-renewal or suspension of, any of the
Mercury Licenses, which seeks the imposition of any modification or amendment
with respect thereto, or which adversely affects the ability of the Company to
employ the Mercury Licenses in its business after the Closing Date or seeks the
payment of a fine, sanction, penalty, damages or contribution in connection with
the
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use of any Mercury License. The Mercury Licenses are not subject to any
conditions other than those appearing on the face of the Licenses themselves and
those imposed by FCC Law.
(b) Mercury Debt; Solvency. The FCC Debt and each item of Other Mercury
Debt being paid or assumed by the Company is, and on the Closing Date will be, a
bona fide obligation of Mercury and the amount set forth opposite each item on
Schedule 2.3 is the outstanding amount of principal thereon as of ________,
1999. Mercury is Solvent after giving effect to the consummation of the
transactions contemplated hereby, including the Mercury License Transfer.
(c) Proceeds of Debt. The cash flow statements of Mercury set forth on
Schedule 4.10(c) accurately reflect the sources and uses of cash relating to the
Mercury Licenses and Other Mercury Assets. The proceeds of all Other Mercury
Debt have been applied to Permitted Expenditures. The Other Mercury Assets
constitute all assets or rights purchased with the proceeds of Permitted
Expenditures.
(d) Title and Transferability. Mercury has, and upon the delivery of
the transfer documents pursuant to Section 3.2(a)(ii) the Company (or the
applicable Subsidiary) will have, good and marketable title to, each of the
Other Mercury Assets free and clear of any Liens (other than Liens securing
indebtedness to the Company and Liens securing indebtedness of Mercury to
Airwave Communications, LLC that will be released on the Closing Date). Neither
the execution, delivery and performance by Mercury of this Agreement nor the
purchase of the Other Mercury Assets or the assumption by the Company (or the
applicable Subsidiary) of the Other Mercury Debt will (a) 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 any note, bond, mortgage,
indenture, lease, agreement or other instrument, in each case which is
applicable to or binding upon it or any of the Other Mercury Assets or Other
Mercury Debt; or (b) require any Consent (other than those set forth on Schedule
4.6) or the approval of its board of directors, general partner, members,
stockholders or similar constituent bodies, as the case may be (other than
approvals that have been obtained).
(e) Litigation. Except as set forth on Schedule 4.10(e), there is no
action (including court action), proceeding or investigation pending 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 transfer of the Other Mercury Assets, which seeks to prevent or challenge
such transfer, or which seeks to have an adverse effect on the Other Mercury
Assets.
(f) No Distribution. Mercury is acquiring the shares of Series C
Preferred Stock to be acquired by it 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 Securities Act and all applicable state
securities laws).
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(g) Investor Acknowledgments. (a) Mercury 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 acquisition of shares of Series C Preferred Stock, 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.
(h) Mercury has such knowledge and experience in financial and business
affairs that it is capable of evaluating the merits and risks of acquiring the
shares of Series C Preferred Stock it is acquiring hereunder.
(i) Mercury is not relying on and acknowledges that no representation
is being made by 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.
(j) In deciding to invest in the Company, Mercury has relied
exclusively on the representations and warranties expressly set forth in this
Agreement, 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
investigations and knowledge, it has determined that shares of Series C
Preferred Stock it is acquiring are a suitable investment for it.
ARTICLE V
COVENANTS
5.1 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 to consummate the transactions contemplated hereby, 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 contemplated hereby to be
consummated in accordance with the terms hereof, and, without limiting the
generality of the foregoing, to obtain all necessary Consents including, without
limitation, the approval of this Agreement and the transactions contemplated
hereby by all Governmental Authorities and agencies, including the
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FCC, and 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 contemplated hereby; provided that Mercury shall not make any
filings with the FCC regarding the Mercury Licenses without the prior review and
approval of the Company.
(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 Mercury or the Company or any other
party in connection with the transactions contemplated hereby or otherwise to
determine compliance with applicable FCC Rules.
5.2 Confidentiality.
(a) Each party shall, and shall cause each of its Affiliates, and
its and their respective shareholders, members, managers, directors, officers,
employees and agents (collectively, "Representatives") to, keep secret and
retain in strictest confidence any and all Confidential Information relating to
any other party that it receives in connection with the negotiation or
performance of this Agreement, and shall not disclose such Confidential
Information, and shall cause its Representatives not to disclose such
Confidential Information, to anyone except the receiving party's Affiliates and
Representatives and any other Person that agrees in writing to keep in
confidence all Confidential Information in accordance with the terms of this
Section 5.2. Until the Closing, each party agrees to use Confidential
Information received from another party only (i) to evaluate its interest in
pursuing the transactions contemplated hereby and (ii) to pursue such
transactions contemplated hereby, but not for any other purpose. All
Confidential Information furnished pursuant to this Agreement shall be returned
promptly to the party to whom it belongs upon request by such party.
(b) The obligations set forth in Section 5.2(a) shall be
inoperative with respect to Confidential Information that (i) is or becomes
generally available to the public other than as a result of disclosure by the
receiving party or its Representatives, (ii) was available to the receiving
party on a non-confidential basis prior to its disclosure to the receiving
party, or (iii) becomes available to the receiving party on a non-confidential
basis from a source other than the providing party or its agents, provided that
such source is not known by the receiving party to be bound by a confidentiality
agreement with the providing party or the providing party's agents.
(c) To the fullest extent permitted by law, if a party or any of
its Affiliates or Representatives breaches, or threatens to commit a breach of,
this Section 5.2, the party whose Confidential Information shall be disclosed,
or threatened to be disclosed, shall have the right and remedy to have this
Section 5.2 specifically enforced by any court having jurisdiction, it being
acknowledged and agreed that money damages will not provide an adequate remedy
to such party. Nothing in this Section 5.2 shall be construed to limit the right
of any party to collect money damages in the event of breach of this Section
5.2.
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(d) Anything else in this Agreement notwithstanding, each party
shall have the right to disclose any information, including Confidential
Information of the other party or such other party's Affiliates, in any filing
with any regulatory agency, court or other authority or any disclosure to a
trustee of public debt of a party to the extent that the disclosing party
determines in good faith that it is required by Law, regulation or the terms of
such debt to do so, provided that any such disclosure shall be as limited in
scope as possible and shall be made only after giving the other party as much
notice as practicable of such required disclosure and an opportunity to contest
such disclosure if possible.
5.3 Certain Covenants. From and after the execution and delivery of
this Agreement to and including the Closing Date, Mercury shall and each of the
Managers shall cause Mercury to:
(a) Comply in all material respects with all applicable Laws,
including all such Laws relating to the Mercury Licenses or Other Mercury Assets
or their use;
(b) Use commercially reasonable efforts to maintain the Mercury
Licenses in full force and effect;
(c) Not (i) sell, transfer, assign or dispose of, or offer to, or
enter into any agreement, arrangement or understanding to, sell, transfer,
assign or dispose of any of the Mercury Licenses or Other Mercury Assets or any
interest therein, or negotiate therefor, or (ii) create, incur or suffer to
exist any Lien of any nature whatsoever relating to any of the Mercury Licenses
or Other Mercury Assets or any interest therein (other than Liens securing the
FCC Debt to be assumed by the Company pursuant to Section 2.3). Without limiting
the foregoing, Mercury shall not incur any material obligation or liability,
absolute or contingent, relating to or affecting the Mercury Licenses or Other
Mercury Assets or their use;
(d) Give written notice to the Company promptly upon the
commencement of, or upon obtaining knowledge of any facts that would give rise
to a threat of, any claim, action or proceeding commenced against or relating to
(i) it, its properties or assets, including the Mercury Licenses or Other
Mercury Assets or their use, and which could have a Material Adverse Effect on
it or materially adversely affect the transactions contemplated hereby, or (ii)
the Mercury Licenses or Other Mercury Assets or their use;
(e) Promptly after obtaining knowledge of the occurrence of, or
the impending or threatened occurrence of, any event which could cause or
constitute a material breach of any of its warranties, representations,
covenants or agreements contained in this Agreement, give notice in writing of
such event, or occurrence or impending or threatened event or occurrence, to the
other parties and use commercially reasonable efforts to prevent or to promptly
remedy such breach; and
(f) Cause the other parties to be advised promptly in writing of
(i) any event, condition or state of facts known to it, which has had or could
have a Material Adverse
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Effect on it, or materially adversely affect the Mercury Licenses or Other
Mercury Assets or their use or the transactions contemplated hereby (other than
proceedings affecting the PCS or wireless communications services industry
generally), or (ii) any claim, action or proceeding which seeks to enjoin the
con summation of the transactions contemplated hereby.
5.4 Certain Mercury Transactions. Prior to the Reconciliation
Date, (as defined in the Securities Purchase Agreement) Mercury shall not
distribute or otherwise Transfer (as defined in the Stockholders Agreement)
any"Escrowed Shares" issued to it hereunder (or shares of Common Stock issued
upon conversion of the Series C Preferred Stock) except: (I) a Transfer from
Mercury to Airwave Communications, LLC, (II) in accordance with Section 7.6(f),
or (III) to a Mercury Investor that (x) elects by written notice to Mercury, as
the case may be, copies of which notice shall be furnished to the other parties,
to receive its Escrowed Shares and/or other shares and (y) executes and delivers
to the other parties thereto a counterpart to each of the Stockholders Agreement
and the agreement among the Cash Equity Investors (as defined in the Securities
Purchase Agreement) attached as Schedule X to the Stockholders Agreement. By
delivering such notice and accepting any such Escrowed Shares or other shares,
each Mercury Investor: (i) shall become a "Mercury Investor Indemnitor"
hereunder, (ii) agrees and acknowledges that such Escrowed Shares continue to be
subject to the provisions of this Agreement, (iii) makes (as to itself as of the
date of such distribution or transfer) the representations set forth in Section
5.1 of the Securities Purchase Agreement, and (iv) agrees and acknowledges that
it shall succeed to the rights of Mercury, as applicable, hereunder, in respect
of the shares distributed to it.
ARTICLE VI
CLOSING CONDITIONS
6.1 Conditions to Obligations of All Parties. The obligation of each of
the parties to consummate the transactions contemplated hereby to occur at the
Closing shall be conditioned on the following, unless waived by each of the
parties:
(a) Any applicable waiting period under the HSR Act shall have
expired or been terminated.
(b) The Consent of the FCC to the Mercury License Transfer shall
have been obtained pursuant to a Final Order, free of any conditions materially
adverse to the Company or Mercury, other than those applicable to the PCS or
wireless communications services industry generally. For the purposes of this
paragraph, "Final Order" means an action or decision that has been granted by
the FCC as to which (i) no request for a stay or similar request is pending, no
stay is in effect, the action or decision has not been vacated, reversed, set
aside, annulled or suspended and any deadline for filing such request that may
be designated by statute or regulation has passed, (ii) no petition for
rehearing or reconsideration or application for review is pending and the time
for the filing of any such petition or application has passed, (iii) the FCC
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does not have the action or decision under reconsideration on its own motion and
the time within which it may effect such reconsideration has passed and (iv) no
appeal is pending including other administrative or judicial review, or in
effect and any deadline for filing any such appeal that may be designated by
statute or rule has passed; provided, however, that the Consent of the FCC to
the transactions contemplated hereby shall be deemed to be a Final Order
notwithstanding the pendency of any of the proceedings set forth in Schedule 4.7
or 4.10(a), or any appeals therefrom, so long as such proceedings or appeals
would not be reasonably expected, individually or in the aggregate, to result in
the revocation, non-renewal or suspension of, or an adverse affect on the
ability of the Company to employ, the Mercury Licenses.
(c) All Consents by any Governmental Authority (other than the
Consents referred to in paragraphs (a) and (b) above) required to permit the
consummation of the transactions contemplated hereby, the failure to obtain or
make which would be reasonably expected to have a Material Adverse Effect on the
Company or Mercury or to materially adversely affect the transactions
contemplated hereby or its ability to perform its obligations under this
Agreement shall have been obtained or made.
(d) No preliminary or permanent injunction or other order, decree
or ruling issued by a Governmental Authority, nor any statute, rule, regulation
or executive order promulgated or enacted by any Governmental Authority, shall
be in effect that would (i) impose material limitations on the ability of any
party to consummate the transactions contemplated hereby or prohibit such
consummation, or (ii) impair in any material respect the operation of the
Company.
6.2 Conditions to Obligations of the Company. The obligation of the
Company to consummate the transactions contemplated to occur at the Closing
shall be further conditioned upon the satisfaction or fulfillment, at or prior
to the Closing, of the following conditions by each of the other parties, unless
waived by the Company:
(a) The representations and warranties of Mercury contained herein
shall be true and correct in all material respects (except for representations
and warranties that are qualified as to materiality, which shall be true and
correct), in each case when made and at and as of the Closing (except for
representations and warranties made as of a specified date, which shall be true
and correct as of such date) with the same force and effect as though made at
and as of such time, except for inaccuracies in respect of the representations
and warranties set forth in Section 4.7 and the third sentence of Section
4.10(a) (disregarding any qualifications as to materiality contained therein)
that in the aggregate would not be reasonably expected to have a Material
Adverse Effect on Mercury or its ability to perform its obligations under this
Agreement or to materially adversely affect the transactions contemplated
hereby.
(b) Mercury shall have performed in all material respects all
agreements contained herein required to be performed by it at or before the
Closing.
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(c) Each Manager and an officer of Mercury shall have delivered to
the Company a certificate, dated the Closing Date, certifying as to the
fulfillment of the conditions set forth in paragraphs (a) and (b) above as to
Mercury.
(d) Mercury shall have furnished the Company with opinions of
counsel, each dated the Closing Date, in substantially the forms of Exhibits A
and B.
(e) All member and other proceedings of Mercury in connection with
the Mercury License Transfer and the other transactions contemplated hereby, and
all documents and instruments incident thereto, shall be reasonably satisfactory
in form and substance to the Company, and Mercury shall have delivered to the
Company such receipts, documents, instruments and certificates, in form and
substance reasonably satisfactory to the Company, which the Company shall have
reasonably requested.
6.3 Conditions to the Obligations of Mercury. The obligation of Mercury
to consummate the transactions contemplated to occur at the Closing shall be
further conditioned upon the satisfaction or fulfillment, at or prior to the
Closing, of the following conditions, unless waived by Mercury:
(a) The representations and warranties of the Company contained
herein shall be true and correct in all material respects (except for
representations and warranties that are qualified as to materiality, which shall
be true and correct), in each case when made and at and as of the Closing
(except for representations and warranties made as of a specified date, which
shall be true and correct as of such date) with the same force and effect as
though made at and as of such time, except for inaccuracies in respect of the
representations and warranties set forth in Section 4.7 (disregarding any
qualifications as to materiality contained therein) that in the aggregate would
not be reasonably expected to have a Material Adverse Effect on the Company or
its ability to perform its obligations under this Agreement or to materially
adversely affect the transactions contemplated hereby.
(b) The Company shall have performed in all material respects all
agreements contained herein required to be performed by it at or before the
Closing.
(c) An officer of the Company shall have delivered to Mercury a
certificate, dated the Closing Date, certifying as to the fulfillment of the
conditions set forth in paragraphs (a) and (b) above as to the Company.
(d) The Company shall have furnished Mercury with an opinion of
counsel, dated the Closing Date, in substantially the form of Exhibit C.
(e) All corporate and other proceedings of the Company in
connection with the Mercury License Transfer and the other transactions
contemplated hereby, and all documents and instruments incident thereto, shall
be reasonably satisfactory in form and substance to Mercury, and the Company
shall have delivered to Mercury such receipts,
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documents, instruments and certificates, in form and substance reasonably
satisfactory to Mercury, which Mercury shall have reasonably requested.
ARTICLE VII
SURVIVAL AND INDEMNIFICATION
7.1 Survival. The representations and warranties made in this Agreement
shall survive the Closing 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 such date 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 VII in respect of a breach of a
representation or warranty shall expire on the second anniversary 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 date 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 VII.
7.2 Indemnification by Mercury and Mercury Investor Indemnitors.
Mercury, and the Managers, jointly and severally, and each Mercury Investor
Indemnitor, solely to the extent of its Percentage Share of any Section 7.2
Losses, shall indemnify and hold harmless the Company and its Affiliates, and
the shareholders, members, managers, officers, employees, agents and/or the
legal representatives of any of them (each, a "Section 7.2 Indemnified Party"),
against any and all losses, damages, costs, expenses or liabilities, including
any amounts paid in satisfaction of judgments, in compromise, as fines and
penalties, any counsel fees incurred by him or it in connection with the
investigation, defense, or disposition of any action, suit or other proceeding
in which any Section 7.2 Indemnified Party may be involved or with which he or
it may be threatened (collectively, "Section 7.2 Losses"), in each case that
arises out of or results from (i) any representation or warranty of Mercury
contained in Article IV being untrue in any material respect as of the date on
which it was made or (ii) any of the matters referred to on Schedules 4.7 or
4.10(a), except to the extent (but only to the extent) any such Section 7.2
Losses arise out of or result from the gross negligence or willful misconduct of
such Section 7.2 Indemnified Party or its Affiliates; provided that (x) the
aggregate liability of each Manager to indemnify Section 7.2 Indemnified Parties
against Section 7.2 Losses shall be limited to the shares of Common Stock of the
Company then held by such Manager and Section 7.2 Indemnified Parties seeking
indemnification against any Manager for such Section 7.2 Losses
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hereunder shall not have recourse to any other assets of such Manager and (y)
the aggregate liability of each Mercury Investor Indemnitor to indemnify Section
7.2 Indemnified Parties against Section 7.2 Losses shall be limited to his or
its Escrowed Shares, and Section 7.2 Indemnified Parties seeking indemnification
against any Mercury Investor Indemnitor for Section 7.2 Losses hereunder shall
not have recourse to any other assets of such Mercury Investor Indemnitor.
Notwithstanding anything herein to the contrary, no Section 7.2 Indemnified
Party shall require any Mercury Investor Indemnitor to satisfy any Section 7.2
Losses earlier than the Reconciliation Date; provided that any Mercury Investor
Indemnitor may satisfy its obligation in respect of any Section 7.2 Losses by
making a cash payment to the applicable Section 7.2 Indemnified Party equal to
its Percentage Share of such Section 7.2 Indemnified Loss, plus an amount equal
to interest thereon at the rate of 10% per annum, compounded annually, from the
date a notice (the "Section 7.2 Notice") specifying the amount of such Section
7.2 Loss is given by the applicable Section 7.2 Indemnified Party to the Old
Mercury Stockholders.
7.3 Indemnification by the Managers. Each Manager, severally and not
jointly, shall indemnify and hold harmless Mercury and the Company and its
Subsidiaries and their respective Affiliates, and the shareholders, members,
managers, officers, employees, agents and/or the legal representatives of any of
them (each, a "Section 7.3 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 7.3 Indemnified Party may
be involved or with which he or it may be threatened that arises out of or
results from (a) any representation or warranty of such Manager 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 Manager in the performance of his
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 7.3 Indemnified Party or its Affiliates; provided
that the aggregate liability of each Manager to indemnify Section 7.3
Indemnified Parties against Losses arising out of or resulting from (x) the
untruth in any material respect of any representation or warranty as to the
Company made by such Manager in this Agreement, (y) any material default by such
Manager in the performance of his obligations under this Agreement, shall
(except, in the case of clause (y), 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 Manager) be limited to the shares of Series C Preferred Stock
and Common Stock of the Company then held by such Manager, and Section 7.3
Indemnified Parties seeking indemnification against any Manager for such Losses
hereunder shall not have recourse to any other assets of such Manager.
7.4 Indemnification by the Company. The Company shall indemnify and
hold harmless each of the Managers, Mercury and their respective Affiliates, and
the shareholders, members, managers, officers, employees, agents and/or the
legal representatives of any of them (each, a "Section 7.4 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 7.4 Indemnified Party may be involved or with which he or it may be
threatened that arises out of or results from (a) any representation or warranty
of the Company contained in this
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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 7.4 Indemnified Party or
its Affiliates.
7.5 Procedures.
(a) The terms of this Section 7.5 shall apply to any claim (a
"Claim") for indemnification under the terms of Sections 7.2, 7.3 or 7.4. The
Section 7.2 Indemnified Party, Section 7.3 Indemnified Party or Section 7.4
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
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 VII 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 VII 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 right, subject to the Indemnifying
Party's right to assume the defense pursuant to the provisions of this Article
VII, to undertake the defense, compromise or settlement of such Claim for the
account of the Indemnifying Party. Unless and until the Indemnifying 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
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the extent that it shall be determined that he or it was not entitled to
indemnification under this Article VII.
(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) Mercury and its
Affiliates, and the shareholders, members, managers, officers, employees, agents
and/or the legal representatives of any of them; (ii) the Managers and their
respective Affiliates, and the shareholders, members, managers, officers,
employees, agents and/or the legal representatives of any of them and (iii) the
Company and its Affiliates, and the shareholders, members, managers, officers,
employees, agents and/or the legal representatives of any of them.
7.6 Escrow and Reconciliation.
(a) The certificates for the shares of Series C Preferred Stock
representing the Purchase Price (collectively, the "Escrowed Shares") shall be
held in escrow by the Secretary of the Company as escrow holder (the "Escrow
Holder"), together with related stock powers executed in blank by the record
owners thereof. The Escrow Holder shall also hold in escrow the cash proceeds
("Escrowed Cash") from sales of Escrowed Shares permitted by paragraph (f)
below. The Escrow Holder shall not permit the transfer of such shares on the
books of the Company except in accordance with this Agreement and the
Stockholders Agreement, provided that the Escrow Holder shall be entitled to
rely upon written directions of the Board of Directors of the Company. The
Escrow Holder shall have no personal liability for any act or omission hereunder
while acting in good faith in the exercise of his own judgment. The Company
agrees to indemnify and hold Escrow Holder free and harmless from and against
any and all losses, costs, damages, liabilities or expenses, including counsel
fees to which Escrow Holder may be put or which he may incur by reason of or in
connection with the escrow arrangement hereunder.
(b) On or promptly following the Reconciliation Date, the Escrow
Holder shall distribute the Escrowed Shares to the Old Mercury Stockholders as
follows (subject to the terms of paragraph (g) below):
(i) first, to the Company and each other Section 7.2
Indemnified Party (pro rata in proportion to their respective Losses), an amount
of Escrowed Cash of such Old Mercury Stockholder equal to such Old Mercury
Stockholder's Percentage Share of the Losses, plus an amount equal to interest
thereon at the rate of 10% per annum, compounded annually, from the date of the
applicable Section 7.2 Notice through the Reconciliation Date, and, if
necessary, a number of Escrowed Shares of such Old Mercury Stockholder having an
aggregate Market Price (as defined in the Securities Purchase Agreement) equal
to the balance of such Old Mercury Investor's Percentage Share of the Losses,
plus an amount equal to interest thereon at the rate of 10% per annum,
compounded annually, from the date of the applicable Section 7.2 Notice through
the Reconciliation Date; provided that no Escrowed Shares or Escrowed Cash of
any Old Mercury Stockholder shall be distributed
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pursuant to this clause (i) of Section 7.6(b) with respect to any Loss, if such
Old Mercury Stockholder shall have theretofore satisfied its obligation in
respect of such Loss in accordance with the proviso to the last sentence of
Section 7.2; and
(ii) second, to such Old Mercury Stockholder, the balance of his or its
Escrowed Shares and Escrowed Cash.
The distribution of the Escrowed Shares contemplated in this Section
7.6(b) shall be deferred to the extent necessary to determine the Market Price
of the Escrowed Shares.
(c) Promptly following the Reconciliation Date, the Escrow Holder
shall (i) if no Escrowed Shares are distributable pursuant to paragraph (i) of
Section 7.6(b), deliver the certificates representing the Escrowed Shares to the
Old Mercury Stockholders, and (ii) if any Escrowed Shares are distributable
pursuant to paragraphs (i) of Section 7.6(b), (x) cancel the certificates held
by the Escrow Holder representing Escrowed Shares, (y) cause new certificates to
be issued representing the number of Escrowed Shares distributable to the
Company or any other Section 7.2 Indemnified Party pursuant to paragraphs (i)
and (ii) of Section 7.6(b), which certificates the Escrow Holder shall deliver
to the Company or such other Section 7.2 Indemnified Party (as applicable), and
(y) cause new certificates to be issued representing the balance of the Escrowed
Shares, which certificates shall be distributed to such Old Mercury Stockholder.
(d) Subject to the terms hereof, each Old Mercury Stockholder
shall have all the rights of a stockholder with respect to the Escrowed Shares
while they are held in escrow, including, without limitation, the right to vote
the Escrowed Shares and receive any cash dividends declared thereon. If, from
time to time, there is (i) any stock dividend, stock split or other change in
the Escrowed Shares or (ii) any merger or sale of all or substantially all of
the assets or other acquisition of the Company, all new, substituted or
additional securities to which such Old Mercury Stockholder is entitled by
reason of his ownership of the Escrowed Shares shall be immediately subject to
this escrow, deposited with the Escrow Holder and included thereafter as
"Escrowed Shares" for purposes of this Agreement.
(e) Legends. The share certificates evidencing the Escrowed Shares
shall be endorsed with the following legend (in addition to any legend required
to be placed thereon by the Securities Purchase Agreement, applicable federal or
state securities laws or the Stockholders Agreement).
"THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN
ACCORDANCE WITH THE TERMS OF THE LICENSE PURCHASE AGREEMENT DATED AS OF MAY
20, 1999, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY,
WHICH PROVIDES, AMONG OTHER THINGS, FOR RESTRICTIONS ON TRANSFER OF THE
SHARES REPRESENTED BY THIS CERTIFICATE."
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(f) Until the Reconciliation Date, no Mercury Investor Indemnitor
shall Transfer (as such term is defined in the Stockholders Agreement) any of
his or its Escrowed Shares; provided that, subject to the restrictions on
transfer contained in the Stockholders Agreement, after the IPO Date (as defined
in the Stockholders Agreement) and notwithstanding the provisions of Section
5.4, any Old Mercury Stockholder may sell any or all of his Escrowed Shares for
cash at the Market Price so long as the gross cash proceeds thereof are
deposited with the Escrow Holder, who shall at the request of such Old Mercury
Stockholder invest such funds in Treasury obligations or other cash equivalents
that mature not later than the fifth anniversary of the date hereof, to be held
in escrow by the Escrow Holder, and not to be released, except in accordance
with the foregoing provisions.
(g) Notwithstanding anything herein to the contrary, 100% of the
obligations of all Old Mercury Stockholders to be satisfied by distributions of
Escrowed Cash and/or Escrowed Shares pursuant to Section 7.6(b)(i) shall be
satisfied, on the Reconciliation Date (as defined in clauses (i) through (iv) of
the definition thereof, without regard to the proviso to such definition),
first, out of any Escrowed Cash, and second, out of any Escrowed Shares held by
Mercury, until all of such Escrowed Cash and Escrowed Shares shall have been
distributed.
ARTICLE VIII
TERMINATION
8.1 Termination. This Agreement may be terminated, and the transactions
contemplated hereby 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
Closing shall not have occurred on or before the date that is two years after
the date hereof, provided that the party electing to exercise such right is not
otherwise in breach of its obligations under this Agreement;
(c) by any party by written notice to the other parties, if the
consummation of the transactions contemplated hereby shall be prohibited by a
final, non-appealable order, decree or injunction of a court of competent
jurisdiction; or
(d) by the Company in the event of the Company has terminated the
Securities Purchase Agreement pursuant to Section 6.15 thereof.
8.2 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,
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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 8.1, all provisions of this Agreement shall terminate, except Section
5.2 and Articles VII and IX.
(b) Whether or not the Closing occurs, all costs and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby shall be paid by the party incurring such expenses; provided, however,
that in the event of a termination of this Agreement pursuant to Section 8.1(d),
the Company shall pay to Mercury an amount equal to the interest that shall have
accrued on indebtedness to the United States Department of the Treasury
attributable to the Mercury Licenses during the period commencing on the date of
execution of the Securities Purchase Agreement through the date of termination
by the Company. The Company shall reimburse Mercury promptly after the
termination of this Agreement in respect of all or any portion of such interest
actually paid by Mercury to the United States Department of the Treasury. In the
event that all or any portion of such interest shall not have been so paid as of
such date of termination, the Company shall pay such interest to Mercury on the
date that such interest shall be due and payable to the United States Department
of the Treasury.
ARTICLE IX
MISCELLANEOUS PROVISIONS
9.1 Amendment and Modification. This Agreement may be amended, modified
or supplemented only by written agreement of each of the parties.
9.2 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 9.2.
9.3 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, by facsimile transmission, or by registered or
certified mail (return receipt requested), postage prepaid, with an
acknowledgment of receipt signed by the addressee or an authorized
representative thereof, addressed as follows (or to such other address for a
party as shall be specified by like notice; provide that notice of a change of
address shall be effective only upon receipt thereof):
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If to Mercury: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇-▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax #▇▇▇-▇▇▇-▇▇▇▇
With a copy to: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Esquire
Young, Williams, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, P.A.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Fax #▇▇▇-▇▇▇-▇▇▇▇
If to the Company: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇-▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax #▇▇▇-▇▇▇-▇▇▇▇
With a copy to: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Esquire
Young, Williams, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, P.A.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Fax #▇▇▇-▇▇▇-▇▇▇▇
With a copy to each other party to the Securities Purchase Agreement sent to the
addresses set forth in Section 10.3 thereof.
9.4 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.
9.5 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 contemplated
hereby, 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.
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9.6 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.
9.7 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. All pronouns and any variations thereof shall be deemed to refer
to the masculine, feminine or neuter, singular or plural, as the identity of the
antecedent Person or Person may require.
9.8 Entire Agreement. This Agreement, including the exhibits and
schedules hereto 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 contemplated hereby. 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 contemplated hereby.
9.9 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 contemplated
hereby, 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 contemplated hereby without the prior
consent of the other parties, except as may be required by Law. A breach of the
provisions of this Section 9.9 by a party shall not give rise to any right to
terminate this Agreement.
9.10 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.
9.11 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.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
TRITEL, INC.
By:
--------------------------------------
Name:
Title:
DIGITAL PCS, LLC (f/k/a Mercury PCS II,
LLC)
By:
--------------------------------------
Name:
Title:
-----------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇
-----------------------------------------
▇.▇. ▇▇▇▇▇▇, ▇▇.
-----------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
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SCHEDULE I
MERCURY LICENSES
--------------------------------------------------------------------------------
Market Number Frequency Block License Description
--------------------------------------------------------------------------------
▇▇▇ ▇ ▇▇. ▇▇▇▇▇▇, ▇▇
--------------------------------------------------------------------------------
▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇
--------------------------------------------------------------------------------
▇▇▇ ▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇
--------------------------------------------------------------------------------
▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇, ▇▇
--------------------------------------------------------------------------------
▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇
--------------------------------------------------------------------------------
▇▇ ▇ ▇▇▇▇▇▇▇▇▇, ▇▇
--------------------------------------------------------------------------------
▇▇▇ ▇ ▇▇▇▇▇▇▇▇, ▇▇
--------------------------------------------------------------------------------
▇▇▇ ▇ ▇▇▇▇▇▇▇▇, ▇▇
--------------------------------------------------------------------------------
SCHEDULE II
MERCURY INVESTORS
Southern Farm Bureau Life Insurance Company
M3, LLC
▇▇▇▇▇▇▇ Communications, LLC
DC Investment Partners Exchange Fund, L.P.
FCA Venture Partners I, ▇.▇.
▇▇▇▇▇▇▇ Associates, LLC
Mercury PCS Investors, LLC
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
▇.▇. ▇▇▇▇▇▇, ▇▇.
SCHEDULE 1.1
PERMITTED EXPENDITURES
SCHEDULE 2.1
MERCURY ASSETS
SCHEDULE 2.3
OTHER MERCURY DEBT
SCHEDULE 4.6
MERCURY CONSENTS
The execution, delivery and performance of the Agreement will or may
require the following consents, approvals and reviews:
1. The Federal Communications Commission.
Matters which could prevent Mercury from consummating the transactions
contemplated by this Agreement include:
A. Applications for Review filed by High Plains Wireless, L.P.: In re
Application of Mercury PCS II, LLC for Facilities in the Broadband
Personal Communications Services in the D, E and F Blocks, Federal
Communications Commission File Numbers 00114CWL97, et al.
B. ▇▇▇▇▇ ▇▇▇▇▇ v. Mercury PCS, LLC, Mercury PCS II, LLC, MSM, Inc.,
Mercury Wireless Management, Inc., ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇, and ▇.▇. ▇▇▇▇▇▇, Chancery Court of the First Judicial
District of ▇▇▇▇▇ County, Mississippi, Cause No. G97-56103.
COMPANY CONSENTS
The execution, delivery and performance of the Agreement will or may
require the following consents, approvals and reviews:
1. The Federal Communications Commission.
SCHEDULE 4.7
MERCURY LITIGATION
See Items 1(A-B) under "Mercury Consents" on Schedule 4.6.
SCHEDULE 4.10(a)
MERCURY FCC PROCEEDINGS
See Items 1(A-B) under "Mercury Consents" on Schedule 4.6.
SCHEDULE 4.10(c)
CASH FLOW STATEMENTS
SCHEDULE 4.10(e)
LITIGATION AFFECTING OTHER MERCURY ASSETS