Type: 10Q
Sequence: 1
Description: Form 10Q
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTER
ENDED SEPTEMBER 30, 1999.
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER: 1-15325
TRITON PCS HOLDINGS, INC.
1100 Cassett Road
Berwyn, PA 19312
(610) 651-5900
DELAWARE 23-2974475
(STATE OR OTHER JURISDICTION I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
Indicate by a check mark whether the registrant (1) has filed all
reports required to be filed by section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant
was required to file such reports) and (2) has been subject to
such filing requirements for the past 90 days.
Yes_________ No_____X_____
As of December 13, 1999, 53,700,442 shares of the Registrants
Class A common stock, par value $0.01 per share were outstanding.
TRITON PCS HOLDINGS, INC.
THIRD QUARTER REPORT
Table of Contents
PART I Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets at September 30, 1999
(unaudited) and December 31, 1998
Consolidated Statements of Operations for the three and nine
months ended September 30, 1999 and 1998 (unaudited)
Consolidated Statements of Cash Flows for the nine months
ended September 30, 1999 and 1998 (unaudited)
Notes to Consolidated Financial Statements (unaudited)
Item 2. Managements Discussion and Analysis of Financial
Condition and Results of Operations
PART II Other Information
Item 1. Legal Proceedings
Item 2. Changes in Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
TRITON PCS HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
($000s)
December September
31, 30,
1998 1999
(unaudited)
ASSETS:
Current assets:
Cash and cash equivalents $146,172 $50,931
Marketable securities 23,612 0
Due from related party 951 751
Accounts receivable, net of allowance for
doubtful accounts of $1,071 and
$451, respectively 3,102 16,032
Inventory 1,433 6,822
Prepaid expenses and other current assets 4,369 7,004
_________ ________
Total current assets 179,639 81,540
Property, plant, and equipment:
Land 313 313
Network infrastructure and equipment 34,147 201,226
Office furniture and equipment 17,642 26,953
Capital lease assets 2,263 4,567
Construction in progress 145,667 113,852
__________ _________
200,032 346,911
Less accumulated depreciation (1,079) (17,486)
__________ _________
Net property and equipment 198,953 329,425
Intangible assets, net 307,361 318,370
Deferred transaction costs 906 430
Other long-term assets - 2,944
__________ _________
Total assets $686,859 $732,709
========== =========
LIABILITIES AND SHAREHOLDERS EQUITY:
Current liabilities:
Accounts payable $25,256 28,071
Accrued payroll & related expenses 3,719 9,072
Accrued expenses 3,646 10,842
Accrued interest 545 638
Capital lease obligation 281 838
Deferred gain on sale of property
and equipment - 1,190
_________ _________
Total current liabilities 33,447 50,651
Long-term debt 463,648 500,975
Capital lease obligation 2,041 3,417
Deferred gain on sale of property
and equipment - 30,940
Deferred income taxes 11,744 11,744
Commitments and Contingencies
Series A redeemable preferred stock
1,000,000 shares authorized, $0.01
par value, 732,371 and 786,253 shares
issued and outstanding at December 31,
1998 and September 30, 1999, respectively,
plus accreted dividends 80,090 91,887
Shareholders equity:
Series B preferred stock, $0.01 par value
2,000,000 shares authorized, no shares
issued or outstanding - -
Series C preferred stock, $0.01 par value
3,000,000 shares authorized, 1,915,187
and 1,918,587 shares issued and
outstanding at December 31, 1998 and
September 30, 1999, respectively 19 19
Series D preferred stock, $0.01
par value, 1,000,000 shares authorized
500,944 and 543,683 shares issued and
outstanding at December 31, 1998 and
September 30, 1999, respectively 5 5
Class A common stock, $0.01 par value;
10,000,000 shares authorized,
6,174,557 and 6,283,779 shares
issued and outstanding at December 31,
1998 and September 30, 1999, respectively 62 63
Additional paid-in capital 231,904 248,842
Subscription receivable (95,000) (60,000)
Accumulated deficit (36,731) (127,998)
Deferred compensation (4,370) (17,836)
________ ________
Total shareholders equity 95,889 43,095
________ ________
Total liabilities & shareholders equity $686,859 $732,709
======== ========
See accompanying notes to consolidated financial statements.
TRITON PCS HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
($000s)
Three Months Nine Months
Ended Ended
September 30, September 30,
1998 1999 1998 1999
(unaudited) (unaudited) (unaudited) (unaudited)
Revenues:
Service revenues $ 5,656 $ 19,854 $ 5,656 $37,516
Roaming revenues 2,718 14,257 2,718 27,210
Equipment revenues 431 9,002 431 16,629
________ ________ ________ ________
Total revenue 8,805 43,113 8,805 81,355
Expenses:
Cost of service 3,167 19,677 3,167 38,202
Cost of equipment 770 14,678 770 27,494
Selling and marketing 793 16,461 793 38,376
General and administrative 4,232 11,961 9,385 28,558
Non-cash compensation 33 1,389 339 2,325
Depreciation and amortization 2,948 11,278 4,326 27,247
________ ________ ________ ________
Loss from operations 3,138 32,331 9,975 80,847
Interest and other expense, net
of capitalized interest 11,723 7,395 22,054 26,242
Interest and other income 4,147 1,488 7,345 4,140
Gain on sale of property
and equipment - 11,682 - 11,682
________ ________ ________ ________
Loss before taxes 10,714 26,556 24,684 91,267
Income tax benefit 4,059 - 10,862 -
________ ________ ________ ________
Net loss 6,655 26,556 13,822 91,267
Accretion on preferred stock 1,921 2,260 4,898 6,409
________ ________ ________ ________
Net loss available to
stockholders $8,576 $28,816 $18,720 $97,676
======== ======== ======== ========
Basic and diluted net
loss per common share $(1.59) $(4.44) $(4.03) $(15.53)
======== ======== ======== ========
Weighted average common shares
outstanding (basic
and diluted) 5,407,912 6,489,175 4,647,840 6,289,398
========= ========= ========= =========
See accompanying notes to consolidated financial statements.
TRITON PCS HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
($000s)
Nine Months
Ended
September 30,
1998 1999
(unaudited) (unaudited)
Cash flows from operating activities:
Net loss $(13,822) $(91,267)
Adjustments to reconcile net loss to cash
used in operating activities:
Depreciation and amortization 4,326 27,248
Deferred income taxes (10,861) -
Accretion of interest 14,603 27,808
Gain on sale of marketable securities - (1,004)
Gain on sale of property and equipment - (11,682)
Non-cash compensation 339 2,325
Change in operating assets and liabilities:
Accounts receivable (1,716) (12,930)
Inventory (54) (5,389)
Prepaid expenses and other current assets (531) (2,291)
Other long term assets - (3,158)
Accounts payable 2,659 (12,245)
Accrued payroll and liabilities 2,337 11,987
Accrued interest 2,543 93
________ ________
Net cash used in operating activities (177) (70,505)
Cash flows from investing activities:
Capital expenditures (33,245) (162,661)
Proceeds from sale of property and
equipment, net - 69,712
Proceeds from maturity of marketable securities - 47,855
Purchase of marketable securities - (23,239)
Myrtle Beach transaction, net of cash acquired (163,853) -
_________ _________
Net cash used in investing activities (197,098) (68,333)
Cash flows from financing activities:
Borrowings under credit facility 150,000 10,000
Borrowings on subordinated debt 291,000 -
Proceeds issuance of stock in connection
with private equity investment 33,256 35,000
Proceeds from issuance of stock in
connection with Myrtle Beach transaction 35,091 -
Proceeds from issuance of stock in
connection with Norfolk transaction - 2,169
Proceeds from issuance of Series C
preferred stock - 340
Redemption of Series C preferred stock (3,560) -
Re-issuance of Series C preferred stock 3,560 -
Payment of deferred transaction costs (11,822) (3,826)
Advances to related party, net (123) 200
Principal payments under capital lease
obligations (18) (286)
________ ________
Net cash provided by financing activities 497,384 43,597
________ ________
Net increase (decrease) in cash 300,109 (95,241)
Cash and cash equivalents, beginning of period 11,362 146,172
________ ________
Cash and cash equivalents, end of period $311,471 $50,931
======== ========
See accompanying notes to consolidated financial statements.
TRITON PCS HOLDINGS, INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1999
(unaudited)
(1) Basis of Presentation
The accompanying consolidated financial statements are
unaudited and have been prepared by management. In the
opinion of management, these consolidated financial
statements contain all of the adjustments, consisting of
normal recurring adjustments, necessary to present fairly,
in summarized form, the financial position and the results
of operations of Triton PCS Holdings, Inc. (Triton or the
Company). The results of operations for the three and nine
months ended September 30, 1999 are not indicative of the
results that may be expected for the year ending December
31, 1999. The financial information presented herein should
be read in conjunction with the combined financial
statements for the year ended December 31, 1998 which
include information and disclosures not included herein.
The consolidated accounts of the Company include Triton PCS
Holdings, Inc., Triton PCS, Inc. and its wholly-owned
subsidiaries. All significant intercompany accounts or
balances have been eliminated in consolidation.
(2) New Accounting Pronouncements
On July 8, 1999, the Financial Accounting Standards Board
(FASB) issued SFAS No. 137, Deferral of the Effective Date
of SFAS 133, which defers the effective date of SFAS No.
133, Accounting for Derivative Instruments and Hedging
Activities to all fiscal quarters of all fiscal years
beginning after June 15, 2000. The Company is currently
evaluating the financial impact of adoption of SFAS No. 133.
The adoption is not expected to have a material effect on
the Companys consolidated results of operations, financial
position, or cash flows.
(3) Capital Contributions
On February 4, 1998, pursuant to the Securities Purchase
Agreement, the Company issued $140.0 million of equity to
certain institutional investors and management stockholders
in exchange for irrevocable capital commitments and
contributions aggregating $140.0 million, $80.0 million of
which had been contributed as of September 30, 1999. $59.8
million of the $60.0 million of the unfunded commitments
were contributed in November 1999. The balance of $0.2
million of unfunded commitments is expected to be contributed
in December 1999.
The Securities Purchase Agreement provides that the initial
cash contributions and the unfunded commitments be made to
the Company. The Company has directed that all cash
contributions subsequent to the initial cash contributions
be made directly to Triton PCS, Inc.
(4) Stock Compensation
On August 9, 1999, the Company granted, through the common
stock trust for management employees and independent
directors, 356,500 shares of restricted common stock to
certain management employees. These shares are subject to
vesting provisions. Deferred compensation of approximately
$5.1 million was recorded based on the estimated fair value
at the date of issuance.
In September 1999, the Company sold to certain directors
and an officer, subject to stock purchase agreements, an
aggregate of 3,400 shares of Series C preferred stock for a
purchase price of $100.00 per share. Compensation expense
of $0.8 million was recorded based on the excess of the
estimated fair value at the date of issuance over amounts
paid.
(5) Credit Facility
On February 3, 1998, Triton PCS, Inc. entered into a bank
credit facility for an aggregate amount of $425.0 million of
borrowings. On September 22, 1999 Triton PCS, Inc. entered
into an amendment to the bank credit facility under which
the credit available was increased to $600.0 million. This
credit facility provides for (i) a $175 million Tranche A
term loan due August 4, 2006, (ii) a $150 million Tranche
B term loan due May 4, 2007, (iii) a $175 million Tranche C
term loan due August 4, 2006, and (iv) a $100 million
revolving credit facility due August 4, 2006. The
commitment to make revolving credit loans is reduced
automatically beginning on August 4, 2004 and the term loans
must be repaid beginning on February 4, 2002. In addition,
the credit facility requires Triton PCS, Inc. to make
mandatory prepayments of outstanding borrowings under the
credit facility commencing with the fiscal year ending
December 31, 2001 based on a percentage of excess cash flow,
and contains customary financial and other covenants. To
date, $150 million of the Tranche B term loans have been
drawn by Triton PCS, Inc., which are expected to fund the
Companys future operations. In addition, $10.0 million of
the revolving credit facility was drawn by Triton PCS, Inc.
in September to temporarily fund the Companys operations.
Borrowings under the facilities are secured by a first
priority pledge of substantially all assets of the Company,
including the capital stock of Triton PCS, Inc. and its
subsidiary that holds the personal communications services
and cellular licenses.
(6) Sale of Property and Equipment and Leaseback
On September 22, 1999, Triton PCS, Inc. sold and transferred
to American Tower Inc., a subsidiary of American Tower
Company (ATC), 187 of its towers, related assets and certain
liabilities. The purchase price was $71.1 million,
reflecting a price of $380,000 per site. At the closing of
this transaction, Triton PCS, Inc. contracted with ATC for
an additional 100 build-to-suit towers in addition to its
current contracted 125 build-to-suit towers, and the parties
extended their current agreement for turnkey services for co-
location sites through 2001. In addition, Triton PCS, Inc.
expects to receive an additional $1.52 million upon the
construction and sale to ATC of four additional tower
facilities. An affiliate of an investor has acted as Triton
PCS, Inc.s financial advisor in connection with the sale of
the personal communications towers.
Triton PCS, Inc. has also entered into a master lease
agreement with ATC, in which Triton PCS, Inc. has agreed to
pay ATC monthly rent for the continued use of the space that
Triton PCS, Inc. occupied on the towers prior to the sale.
The initial term of the lease is for 12 years and the
monthly rental amount is subject to certain escalation
clauses over the life of the lease and related options.
Annual payments under the operating lease are $2.7 million.
The carrying value of towers sold was $25.7 million. After
deducting $1.6 million of selling costs, the gain on the
sale of the towers was approximately $43.8 million, of which
$11.7 million was recognized immediately, and $32.1 million
was deferred and will be recognized over operating leases
term.
(7) Subsequent Event
On November 2, 1999, the Company completed an initial public
offering of shares of its Class A common stock and raised
approximately $192.5 million, net of $14.5 million of costs.
The Company expects to use the proceeds for general
corporate purposes, including capital expenditures in
connection with the expansion of its personal communications
services network, sales and marketing activities, and
working capital. Affiliates of First Union Capital
Partners, Inc. and J.P. Morgan Investment Corporation, each
of which beneficially owns more than 5% of the Companys
stock, served as underwriters and received underwriters fees
in connection with the initial public offering.
ITEM 2 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
FORWARD-LOOKING STATEMENTS
When used in this Form 10-Q and in future filings by the Company
with the SEC, in the Companys press releases and in oral
statements made with the approval of an authorized executive
officer of the Company, the words or phrases will likely result,
management expects or the Company expects, will continue, is
anticipated, is estimated or similar expressions (including
confirmations by an authorized executive officer of the Company
or any such expressions made by a third party with respect to the
Company) are intended to identify forward-looking statements
within the meaning of the Private Securities Litigation Reform
Act of 1995. Readers are cautioned not to place undue reliance on
any such forward-looking statements, each of which speaks only as
of the date made. Such statements are subject to certain risks
and uncertainties that could cause actual results to differ
materially from historical earnings and those presently
anticipated or projected. The Company has no obligation to
release publicly the result of any revisions which may be made to
any forward-looking statements to reflect anticipated or
unanticipated events or circumstances occurring after the date of
such statements.
GENERAL
As used herein, the terms Company, we, our and similar terms
refer collectively to Triton PCS Holdings, Inc., Triton PCS,
Inc., and their consolidated subsidiaries. The following
discussion and analysis is based upon the consolidated financial
statements of the Company for the periods presented herein, and
should be read in conjunction with the combined financial
statements and related notes of the Company as of December 31,
1998 and for the year then ended.
OVERVIEW
The Company was incorporated in October 1997. In February 1998,
the Company entered into a joint venture with AT&T. AT&T
contributed to us personal communications services licenses
covering 20 MHz of authorized frequencies in a contiguous
geographic area encompassing portions of Virginia, North
Carolina, South Carolina, Tennessee, Georgia and Kentucky. As
part of this agreement, AT&T became the Companys largest equity
holder, and the Company was granted the right to be the exclusive
provider of wireless mobility services using equal emphasis co-
branding with AT&T in the licensed markets.
On June 30, 1998, the Company acquired an existing cellular
system serving Myrtle Beach, South Carolina and the surrounding
area from Vanguard Cellular Systems of South Carolina, Inc. This
transaction was accounted for as a purchase. In connection with
this acquisition, the Company began commercial operations and
earning recurring revenue in July 1998. The Company integrated
the Myrtle Beach system into our personal communications services
network as part of the Phase I network deployment. Substantially
all of the Companys revenues prior to 1999 were generated by
cellular services provided in Myrtle Beach. The results of
operations do not include the Myrtle Beach system prior to our
acquisition of that system.
The Company began generating revenues from the sale of personal
communications services in the first quarter of 1999 as part of
Phase I of our personal communications services network build-
out. The personal communications services network build-out is
scheduled for three phases. The Company completed the first phase
of our build-out in the first half of 1999.
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO THE THREE
MONTHS ENDED SEPTEMBER 30, 1998
Customer Analysis
The Companys number of customers increased to 129,616 at
September 30, 1999. For the three months ended September 30,
1999, the Company added 51,252 customers, which was primarily due
to the 15 markets launched as part of Phase I network build-out.
Revenues
Service revenues were $19.9 million and $5.7 million for the
three months ended September 30, 1999 and 1998, respectively.
Equipment revenues were $9.0 million and $0.4 million, for the
three months ended September 30, 1999 and 1998, respectively.
The $14.2 million increase in service revenues and $8.6 million
in equipment revenues over the same period in 1998 were primarily
due to launching 15 markets as part of the Phase I network build-
out. Roaming revenues were $14.3 million and $2.7 million for
the three months ended September 30, 1999 and 1998, respectively.
The $11.6 million increase over the same period in 1998 was due
primarily to our launched markets.
Costs of Service and Equipment
Costs of service and equipment were $34.4 million and $3.9
million for the three months ended September 30, 1999 and 1998,
respectively. The increase of $30.5 over the same period in 1998
was primarily due to launching 15 markets as part of the Phase I
network build-out.
Selling and Marketing Expenses
Selling and marketing costs were $16.5 million and $0.8 for the
three months ended September 30, 1999 and 1998, respectively.
The increase of $15.7 million over the same period in 1998 was
due to higher salary and benefits expenses for new sales and
marketing staff and advertising and promotion associated with
launching 15 markets as part of completing our Phase I network
build-out.
General & Administrative Expenses
General and administrative expenses were $12.0 million and $4.2
for the three months ended September 30, 1999 and 1998,
respectively. The increase of $7.8 million over the same period
in 1998 was primarily due to the development and growth of
infrastructure and staffing related to information technology,
customer care and other administrative functions incurred in
conjunction with launching 15 markets.
Non-cash Compensation
Non-cash compensation was $1.4 million and $0.1 million for the
three months ended September 30, 1999 and 1998, respectively. The
increase of $1.3 million was attributable to an increase in the
vesting of restricted shares as compared to the same period in
1998.
Depreciation & Amortization Expenses
Depreciation and amortization expenses were $11.3 million and
$3.0 for the three months ended September 30, 1999 and 1998,
respectively. The increase of $8.3 million over the same period
in 1998 relates primarily to depreciation of our fixed assets as
well as the amortization on personal communications services
licenses and the AT&T agreements upon the commercial launch of
our Phase I markets.
Interest Expense & Income
Interest expense was $7.4 million, net of capitalized interest of
$5.7 million, for the three months ended September 30, 1999.
Interest expense was $11.7 million, net of capitalized interest
of $0.5 million, for the three months ended September 30, 1998.
The decrease of $4.3 million over the same period in 1998 is
attributable to an increase in capitalized interest of $5.2
million due to higher capital expenditures, offset by an increase
in interest expense of $0.9 million. The Company had borrowings
of $501.0 million as of September 30, 1999, with a weighted
average interest rate of 10.12%.
Interest income was $1.5 million and $4.1 million for the three
months ended September 30, 1999 and 1998 respectively. The
decrease of $2.6 million over the same period in 1998 was due
primarily to lower cash balances.
Net Loss
For the three months ended September 30, 1999, the net loss was
$26.6 million as compared to $6.7 million for the same period in
1998. The increase of $19.9 million over the same period in 1998
resulted primarily from the items discussed above.
NINE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO THE NINE MONTHS
ENDED SEPTEMBER 30, 1998
Customer Analysis
The Companys number of customers increased to 129,616 at
September 30, 1999. For the nine months ended September 30,
1999, the Company added 95,772 customers, primarily related to
the launch of 15 markets included in the completion of the
Companys initial build-out.
Revenues
For the nine months ended September 30, 1999 and 1998, service
revenues were $37.5 million and $5.7 million, respectively. For
the nine months ended September 30, 1999 and 1998, equipment
revenues were $16.6 million and $0.4 million, respectively. The
$31.8 million increase in service revenues and $16.2 million
increase for equipment revenues over the same period in 1998 were
primarily the result of launching 15 markets as part of
completing the Phase I network build-out. In addition, the
Company generated no revenue for the six months ended June 30,
1998. Roaming revenues were $27.2 million and $2.7 million for
the nine months ended September 30, 1999 and 1998, respectively.
The increase of $24.5 million over the same period in 1998 was
due primarily from our launched markets.
Costs of Service and Equipment
For the nine months ended September 30, 1999 and 1998, costs of
service and equipment were $65.7 million and $3.9 million,
respectively. The increase of $61.8 million over the same period
in 1998 was primarily due to launching 15 markets as part of the
Phase I network build-out. In addition, there were no costs of
service and equipment for the six months ended June 30, 1998.
Selling and Marketing Expenses
For the nine months ending September 30, 1999 and 1998, selling
and marketing costs were $38.4 million and $0.8 million,
respectively. The increase of $37.6 million over the same period
in 1998 was due to higher salary and benefits expenses for new
sales and marketing staff and advertising and promotion
associated with launching 15 markets as part of completing our
Phase I network build-out.
General & Administrative Expenses
General and administrative expenses were $28.6 million and $9.4
million for the nine months ended September 30, 1999 and 1998,
respectively. The increase of $19.2 million over the same
period in 1998 was due to the development and growth of
infrastructure and staffing related to information technology,
customer care and other administrative functions incurred in
conjunction with the commercial launch of our first 15 markets
during 1999.
Non-cash Compensation
Non-cash compensation was $2.3 million and $0.3 million for the
nine months ended September 30, 1999 and 1998, respectively. The
increase of $2.0 million was attributable to an increase in the
vesting of restricted shares as compared to the same period in
1998.
Depreciation & Amortization Expense
Depreciation and amortization expense was $27.2 million and $4.3
million for the nine months ended September 30, 1999 and 1998,
respectively. The increase of $22.9 million over the same period
in 1998 relates primarily to depreciation on equipment launched
in our 15 markets and the amortization of licenses put into
service related to the Companys initial build-out and
amortization attributable to certain agreements acquired in the
AT&T transaction.
Interest Expense & Income
For the nine months ended September 30, 1999, interest expense
was $26.2 million, net of capitalized interest of $12.9 million.
For the nine months ended September 30, 1998, interest expense
was $22.1 million, net of capitalized interest of $0.8 million.
The increase of $4.1 million over the same period in 1998 is
primarily due to increased borrowings for the network build-out.
The Company had borrowings of $501.0 million as of September 30,
1999, with a weighted average interest rate of 10.07%.
Interest income was $4.1 million and $7.3 million for the nine
months ended September 30, 1999 and 1998, respectively. The
decrease of $3.2 million over the same period in 1998 was the
result of the lower average available cash balance for the nine
months ended September 30, 1999, which was $78.5 million, as
compared to $136.4 million for the same period in 1998. The
reduction in available cash was due primarily to capital
expenditures related to the network build-out.
Net Loss
For the nine months ended September 30, 1999, the net loss was
$91.3 million as compared to $13.8 million for the same period in
1998. The increase of $77.5 million for net loss over the same
period in 1998 resulted primarily from the items discussed above.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 1999, the Company had $50.9 million in cash
and cash equivalents, as compared to $146.2 million in cash and
cash equivalents at December 31, 1998. Net working capital was
$30.1 million at September 30, 1999 and $146.2 million at
December 31, 1998.
Net Cash Used in Operating Activities
The $70.5 million in cash used by operating activities arose
primarily from an increase in sales, marketing and operating
activities related to launching 14 new markets and the ongoing
establishment of the regional organization structures.
Net Cash Used in Investing Activities
The $68.3 million in cash used by investing activities arose from
the purchase of marketable securities of $23.2 million and
capital expenditures related to the network build-out of $162.7
million offset by the proceeds from the sale of towers of $69.8
million and the proceeds from the sale of short-term investments
of $47.9 million.
Net Cash Provided by Financing Activities
The $43.6 million provided by financing activities arose from the
issuance of stock of $37.5 million and a draw down from the
revolving credit line of $10.0 million offset by deferred
transaction costs of $3.8 million.
LIQUIDITY
Since inception, the Companys activities have consisted
principally of hiring a management team, raising capital,
negotiating strategic business relationships, participating in
personal communications services auctions,
initiating research and development, conducting market research,
developing our wireless services network and offerings, and
launching our wireless services in our Phase I markets. The
Companys primary source of financing during this time has been
from borrowings under our credit facility and the net proceeds
from issuances of capital stock and senior subordinated discount
notes.
The construction of the network and the marketing and
distribution of wireless communications products and services has
required, and will continue to require, substantial capital.
These capital requirements include license
acquisition costs, capital expenditures for network construction,
operating cash flow losses and other working capital costs, debt
service and closing fees and expenses. The Company has incurred
significant amounts of debt to implement our business plan, and
therefore the Company is highly leveraged. The Company estimates
that our total capital requirements, assuming substantial
completion of our network build-out, which will allow us to
provide services to 100% of the potential customers in the
licensed area, from the Companys inception until December 31,
2001, will be approximately $1.3 billion.
Costs associated with the network build-out include switches,
base stations, towers and antennae, radio frequency engineering,
cell site acquisition and construction and microwave relocation,
and include $95.6 million of capital expenditures related to
purchase commitments as part of the agreement with Ericsson. The
actual funds required to build out our personal communications
services network may vary materially from these estimates, and
additional funds could be required in the event of significant
departures from the current business plan and in the event of
unforeseen delays, cost overruns, unanticipated expenses,
regulatory expenses, engineering design changes and other
technological risks.
The Company has funded, and expects to continue to fund, our
capital requirements with:
. the proceeds from equity investments by our shareholders;
. borrowings under our credit facility;
. the proceeds from an offering of senior subordinated
discount notes in 1998;
. the proceeds from the sale of towers; and
. the proceeds from the initial public offering.
The Company believes that with the available credit facility
borrowings, the proceeds from the private equity investments, the
proceeds from the initial public offering and the proceeds from
the tower sale will be sufficient to meet our projected capital
requirements through the end of 2001. Although the Company
estimates that these funds will be sufficient to build-out our
network and to enable us to provide services to 100% of the
potential customers in our licensed area, it is possible that
additional funding will be necessary.
Equity Contributions
As part of the joint venture agreement with AT&T, AT&T
transferred personal communications services licenses covering 20
MHz of authorized frequencies in exchange for 732,371 shares of
Series A preferred stock and 366,131 shares of Series D
preferred stock. The Series A preferred stock provides for
cumulative dividends at an annual 10% rate on the $100
liquidation value per share plus unpaid dividends. These
dividends accrue and are payable quarterly; however, the Company
may defer all cash payments due to the holders until June 30,
2008 and quarterly dividends are payable in cash thereafter. The
Series A preferred stock is redeemable at the option of its
holders beginning in 2018 and at our option, at its accreted
value, on or after February 4, 2008. The Company may not pay
dividends on, or, subject to specified exceptions, repurchase
shares of, common stock without the consent of the holders of the
Series A preferred stock. The Series D preferred stock provides
for dividends when, as and if declared by our board of directors
and contains limitations on the payment of dividends on the
common stock.
In connection with the consummation of the joint venture with
AT&T, the Company received unconditional and irrevocable equity
commitments from institutional equity investors, as well as
Michael Kalogris and Steven Skinner, in the aggregate amount of
$140.0 million in return for the issuance of 1.4 million shares
of Series C preferred stock. As of September 30, 1999, $80.0
million of these equity commitments had been funded. $59.8
million of the $60.0 million of unfunded commitments were
contributed in November 1999. The remaining $0.2 million balance
of unfunded commitments is expected to be contributed in December
1999. The Series C preferred stock provided for dividends when,
as and if declared by our board of directors and contains
limitation on the payment of dividends on common stock. The
Series C preferred stock automatically converted into Class A
common stock, on a 23 for 1 share basis, upon the consummation of
our initial public offering.
The Company also received equity contributions from our
stockholders in the aggregate amount of $35.0 million in return
for the issuance of 350,000 shares of Series C preferred stock in
order to fund a portion of our acquisition of an existing
cellular system in Myrtle Beach, South Carolina. In addition, the
Company received equity contributions from stockholders in the
aggregate amount of approximately $30.1 million in return for the
issuance of 165,187 shares of Series C preferred stock and
134,813 shares of Series D preferred stock in order to fund a
portion of our Norfolk license acquisition.
On June 8, 1999, the Company completed an exchange of licenses
with AT&T. We transferred licenses covering the Hagerstown and
Cumberland, Maryland areas and received licenses covering the
Savannah and Athens, Georgia areas. The Company issued to AT&T
53,882 shares of our Series A preferred stock and 42,739 shares
of Series D preferred stock in connection with this exchange.
Credit Facility
On February 3, 1998, the Company entered into a loan agreement
that provided for a senior secured bank facility with a group of
lenders for an aggregate amount of $425.0 million of borrowings.
On September 22, 1999, the Company entered into an amendment to
that loan agreement under which the amount of credit available to
us was increased to $600.0 million. The bank facility provides
for:
. a $175.0 million senior secured Tranche A term loan maturing
on August 4, 2006;
. a $150.0 million senior secured Tranche B term loan maturing
on May 4, 2007;
. a $175.0 million senior secured Tranche C term loan maturing
on August 4, 2006; and
. a $100.0 million senior secured revolving credit facility
maturing on August 4, 2006.
The terms of the bank facility will permit the Company, subject
to various terms and conditions, including compliance with
specified leverage ratios and satisfaction of build-out and
subscriber milestones, to draw up to $600.0 million to finance
working capital requirements, capital expenditures, permitted
acquisitions and other corporate purposes. Borrowings under these
facilities are subject to customary conditions, including the
absence of material adverse changes.
The Company must begin to repay the term loans in quarterly
installments beginning on February 4, 2002 and the commitments to
make loans under the revolving credit facility are automatically
and permanently reduced beginning on August 4, 2004. In addition,
the credit facility requires the Company to make mandatory
prepayments of outstanding borrowings under the credit facility,
commencing with the fiscal year ending December 31, 2001, based
on a percentage of excess cash flow and contains financial and
other covenants customary for facilities of this type, including
limitations on investments and on our ability to incur debt and
pay dividends. As of September 30, 1999, the Company had drawn
$150.0 million under the Tranche B term loan and $10.0 million
under the revolving credit facility.
After giving effect to the amendment, the Company had $440.0
million available under our credit facility as of September 30,
1999.
Tower Sale
On September 22, 1999, the Company sold 187 personal
communications towers to American Tower. The net proceeds from
the sale were $69.7 million at closing, and we expect to receive
an additional $1.5 million upon our construction and sale to
American Tower of four additional tower facilities.
At the closing of the transaction, the parties entered into
certain other agreements, including:
. a master license and sublease agreement providing for our
lease of the tower facilities from American Tower;
. an amendment to an existing build-to-suit agreement between
the Company and American Tower providing for American Towers
construction of 100 additional tower sites that we will then
lease from American Tower; and
. an amendment to an existing site acquisition agreement
expanding the agreement to provide for American Tower
to perform site acquisition services for 70% of the tower
sites we develop through December 31, 2000.
The Company estimates that capital expenditures will total
approximately $300.0 million for the year ended December 31,
1999, and we incurred $162.7 million of capital expenditures in
the nine months ended September 30, 1999.
YEAR 2000 DISCLOSURE
The year 2000 issue is the result of computer programs being
written using two digits rather than four digits to define the
applicable year. Computer programs that have time-sensitive
software may recognize a date using 00 as the year 1900 rather
than the year 2000. This could result in a system failure or
miscalculations causing disruptions of operations and a temporary
inability to process transactions, send invoices or engage in
normal business activities.
Currently, the Company is actively taking measures to eliminate
or mitigate the impact of any issues associated with the year
2000. To that end, the Company has established a project team
with senior management sponsorship to provide centralized
coordination for our year 2000 related activities. The Companys
program is divided into five major phases which we implemented
concurrently.
Awareness Phase. In the awareness phase the Company established
the guidelines for the year 2000 project and communicated this
information to the appropriate parties. The Company has completed
this phase.
Assessment Phase. In the assessment phase of the program the
Company defined the scope and level of effort for our project by
conducting an inventory of potentially date and time sensitive
applications. Upon completion of the inventory, the Company
determined the compliance status and the actions that will be
required to bring non-conforming items into a conforming status.
Through this assessment and surveying process, the Company
identified those remediation efforts necessary to ensure that our
systems and applications will continue to operate without
interruption prior to, during and after the year 2000. The
Company has completed the assessment phase, however the Company
cannot assure that the information provided to us by our vendors,
suppliers and third-party providers, upon whom we rely for our
services, is accurate. As such, the Company cannot guarantee that
inaccurate information provided to us could not have a material
adverse effect upon our business.
The Company procured the majority of the software, hardware and
firmware deployed as part of our start-up operation at the latest
revision levels and the Company believes them to be year 2000
capable, but our process requires a re-verification of the year
2000 readiness capabilities of our vendors, suppliers and third
party providers. To date, the Companys assessments have shown
that our main switching and transmission is capable of correctly
recognizing and processing date sensitive information. This
capability was further demonstrated through inter-operability
testing conducted by the Cellular Telecommunications Industry
Association.
Remediation Phase. The remediation phase of the program
encompasses the upgrade, modification or replacement of the non-
conforming systems and components. The remediation phase is
complete and the Company will continue to conduct necessary
remediation if it is identified. All systems that were found to
be non-compliant have been remediated.
Validation Phase. Validation is the process used to ensure that
the systems and components will properly function prior to,
during and after the year 2000. The focus of the validation
efforts is on testing and analysis of vendor supplied testing.
The Company has completed all mission critical testing and the
validation, however, the Company cannot guarantee that the
systems of other companies which we rely on will be converted on
a timely basis or that another companys failure to convert would
not have a material adverse effect on our business.
Implementation Phase. The implementation phase of the project
involves the development and implementation of contingency plans.
The Company has completed the process of developing a
comprehensive set of contingency plans to address situations that
may result if we experience any disruptions of our critical
operations due to year 2000 related issues. The goal of the
contingency plans is to minimize the impact of any year 2000
interruptions as well as to mitigate any resulting damages. The
Company has developed contingency plans and expects to complete
testing of these plans by December 15, 1999. The Company cannot
assure you that we will be able to develop contingency plans that
will adequately address issues that may arise due to year 2000
issues plans because we rely on our vendors, suppliers, and
third-party providers, in many of our contingency plans. The Companys
failure to resolve such issues successfully could result in a
disruption of our service and operations, which would have a material
adverse effect on our business.
The Company estimates the costs associated with year 2000 issues
to be approximately $375,000, excluding internal costs, of which
we have spent $350,000 to date. These costs are not material to
our business operations or financial position. The costs of our
contingency plans and the date on which the Company believes we
will complete year 2000 modifications are based on managements
best estimates, which were derived utilizing numerous assumptions
regarding future events, including the continued availability of
certain resources, third-party modification plans and other
factors. The Company cannot assure you that we will achieve these
estimates, and actual results could differ materially from those
we anticipate.
INFLATION
The Company does not believe that inflation has had a material
impact on operations.
NEW ACCOUNTING PRONOUNCEMENTS
On July 8, 1999, the Financial Accounting Standards Board (FASB)
issued SFAS No. 137, Deferral of the Effective Date of SFAS 133,
which defers the effective date of SFAS No. 133, Accounting for
Derivative Instruments and Hedging Activities to all fiscal
quarters of all fiscal years beginning after June 15, 2000. The
Company is currently evaluating the financial impact of adoption
of SFAS No. 133. The adoption of SFAS No. 133 is not expected to
have a material effect on the Companys consolidated results of
operations, financial position, or cash flows.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities and Use of Proceeds
Triton PCS Holdings, Inc. registered in the aggregate
11,500,000 shares of its Class A common stock through its
registration statement on Form S-1, file no. 333-85149,
which was declared effective on October 27, 1999, and its
registration statement on Form S-1, file no. 333-85149,
filed pursuant to Rule 462(b) under the Securities Act of
1933, as amended, on October 27, 1999. The shares of
Class A common stock began trading on the Nasdaq National
Market under the trading symbol TPCS starting on October
28, 1999, and the sale of the common stock was consummated
on November 2, 1999. All registered securities were sold
at the consummation of the offering. The managing
underwriters for the sales of Holdings common stock in the
United States and Canada were: Morgan Stanley & Co.
Incorporated, Lehman Brothers Inc., Salomon Smith Barney
Inc., First Union Securities, Inc. and J.P. Morgan
Securities Inc. The managing underwriters for the sale of
Holdings common stock outside the United States and Canada
were Morgan Stanley & Co. International Limited, Lehman
Brothers International (Europe), Salomon Brothers
International Limited, First Union Securities, Inc. and
J.P. Morgan Securities Inc.
The aggregate amount of shares of Class A common stock
registered includes an overallotment amount of 1,500,000
shares sold to the underwriters. All of the shares of
Class A common stock registered in the offering were sold
for an aggregate purchase price of $207 million. Holdings
incurred $14.5 million in expenses in connection with the
issuance and distribution of the securities registered for
underwriting discounts and commissions. Because
affiliates of First Union Securities, Inc. and J.P. Morgan
Securities Inc. beneficially own more than 10% of Holdings
preferred equity, expense payments to First Union
Securities, Inc. and J.P. Morgan Securities Inc. represent
payments to persons owning 10% or more of Holdings equity
securities.
The net proceeds to Holdings after deducting underwriting
discounts and commissions and other offering expenses were
approximately $192.5 million.
Holdings contributed all of the net proceeds of the
offering to its wholly owned subsidiary, Triton PCS, Inc.
Triton PCS expects to use the proceeds for general
corporate purposes, including capital expenditures in
connection with the expansion of our personal
communications services network, sales and marketing
activities and working capital.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
Pursuant to a written consent of the stockholders of
Triton dated as of September 17, 1999, the stockholders of
Triton approved the following matters in connection with
proposed consummation of the initial public offering by
Triton of its shares of Class A common stock (which was
consummated November 2, 1999): (i) restatement of the
Companys certificate of incorporation and bylaws, (ii)
election of the following members of the Companys Board of
directors: Class I (term expiring April 2000): Scott
Anderson and Arnold Chavkin, Class II (term expiring April
2001): John Beletic and Mary Hawkins-Key, and Class III
(term expiring April 2002): Michael Kalogris, Steven
Skinner and John Watkins, (iii) approval of an employee
stock and incentive plan and an employee stock purchase
plan, (iv) approval of a stock split in the form of a
stock dividend on each class of Tritons common stock in
order to facilitate the marketing of its Class A common
stock in the public markets, and (v) approval of an
indemnification agreement for directors and officers of
Triton.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
3.1 Restated Certificate of Incorporation of Triton PCS
Holdings, Inc. (incorporated by reference to exhibit
3.1 of the Form S-1 registration statement of Triton
PCS Holdings, Inc. and its subsidiaries, File No. 333-
85149 (the Form S-1)).
3.2 Amendment to the Restated Certificate of Incorporation
of Triton PCS Holdings, Inc. (incorporated by reference
to exhibit 3.2 of the Form S-1).
3.3 Amendment to the Restated Certificate of Incorporation
of Triton PCS Holdings, Inc. (incorporated by reference
to exhibit 3.3 of the Form S-1).
3.4 Second Restated Certificate of Incorporation of Triton
PCS Holdings, Inc.
3.5 Amended and Restated Bylaws of Triton PCS Holdings,
Inc.. (incorporated by reference to exhibit 3.5 of the
Form S-1).
3.6 Second Amended and Restated Bylaws of Triton PCS Holdings,
Inc.
4.1 Indenture, dated as of May 4, 1998, between Triton PCS,
Inc., the Guarantors party thereto and PNC Bank,
National Association (incorporated by reference to
exhibit 4.1 of the Form S-4).
4.2 First Supplemental Indenture, dated as of March 30,
1999, to the Indenture dated as of May 4, 1998
(incorporated by reference to exhibit 4.2 of the Form S-4).
10.22 Investors Stockholders Agreement, dated as of
February 4, 1998, among CB Capital Investors, L.P.,
J.P. Morgan Investment Corporation, Sixty Wall Street
SBIC Fund, L.P., Private Equity Investors III, L.P.,
Equity-Linked Investors-II, Toronto Dominion Capital
(U.S.A.), Inc., DAG-Triton PCS, L.P., First Union
Capital Partners, Inc., and the stockholders named
therein (incorporated by reference to Exhibit 10.10 to
the Form S-4 Registration Statement of Triton PCS, Inc.
and its subsidiaries, File No. 333-57715).
10.47 First Amended and Restated Stockholders Agreement,
dated as of October 27, 1999, among AT&T Wireless PCS LLC, Triton
PCS Holdings, Inc., CB Capital Investors, L.P., J.P. Morgan
Investment Corporation, Sixty Wall Street SBIC Fund, L.P.,
Private Equity Investors III, L.P., Equity-Linked Investors-II,
Toronto Dominion Capital (U.S.A.), Inc., First Union Capital
Partners, Inc., DAG-Triton PCS, L.P., Michael E. Kalogris, Steven
R. Skinner, David D. Clark, Clyde Smith, Michael Mears, Scott
Anderson, Cedar Grove Partners, John Beletic, Stephen McNulty,
William Robinson, Daniel Hopkins, Laura Porter, Kristine
Robinson, Andrew Davies, Mike James, Shekhar, Deshpandi,
Christine Davies, Daniel Graney, Gerald Dudzik, Mark Davis,
Nicholas Pepenelli, R.A. Robinson, Scott Basham, Patricia
Gallagher and David Standig.
10.48 Amendment No. 1 to Investor Stockholders Agreement,
dated as of October 27, 1999 among CB Capital Investors, L.P.,
J.P. Morgan Investment Corporation, Sixty Wall Street SBIC Fund,
L.P., Private Equity Investors III, L.P., Equity-Linked Investors-
II, Toronto Dominion Capital (U.S.A.), Inc., DAG-Triton PCS,
L.P., First Union Capital Partners, Inc., and the stockholders
named therein.
(b) Reports on Form 8-K
None.
27.1 Financial Data Schedule.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned hereto duly authorized, in the
City of Malvern, Commonwealth of Pennsylvania, on December 8,
1999.
TRITON PCS HOLDINGS, INC.
(Registrant)
By: /S/ Michael E. Kalogris
--------------------------------
Michael E. Kalogris
CEO
By: /S/ David D. Clark
--------------------------------
David D. Clark
Senior Vice President & CFO
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 50,931
<SECURITIES> 0
<RECEIVABLES> 16,483
<ALLOWANCES> 451
<INVENTORY> 6,822
<CURRENT-ASSETS> 81,540
<PP&E> 346,911
<DEPRECIATION> 17,486
<TOTAL-ASSETS> 732,709
<CURRENT-LIABILITIES> 50,651
<BONDS> 300,000
0
91,911
<COMMON> 63
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 732,709
<SALES> 16,629
<TOTAL-REVENUES> 81,355
<CGS> 27,494
<TOTAL-COSTS> 65,696
<OTHER-EXPENSES> 96,506
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 26,242
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> (91,267)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (97,676)
<EPS-BASIC> (15.53)
<EPS-DILUTED> (15.53)
</TABLE>
SECOND RESTATED CERTIFICATE OF INCORPORATION
OF
TRITON PCS HOLDINGS, INC.
Triton PCS Holdings, Inc., a corporation organized and
existing under the laws of the State of Delaware, hereby
certifies as follows:
FIRST: The name of the corporation is Triton PCS Holdings,
Inc. (the Corporation). The original Certificate of Incorporation
of the Corporation was filed with the Secretary of State of the
State of Delaware on October 1, 1997 under the name Triton PCS, Inc.
A Certificate of Amendment of Certificate of Incorporation of the
Corporation was filed with the Secretary of State of Delaware on
January 6, 1998 changing the name of the Corporation to Triton PCS
Holdings, Inc. A Restated Certificate of Incorporation of the
Corporation was filed with the Secretary of State of Delaware on
February 4, 1998, and Certificates of Amendment to the Restated
Certificate of Incorporation of the Corporation were filed with the
Secretary of State of Delaware on December 7, 1998 and June 7, 1999.
SECOND: This Second Restated Certificate of Incorporation
has been duly adopted in accordance with the provisions of
Sections 242 and 245 of the General Corporation Law of the State
of Delaware, as amended (the GCL).
THIRD: This Second Restated Certificate of Incorporation
further amends, integrates and restates the provisions of the
Corporations Restated Certificate of Incorporation, as amended,
as follows:
ARTICLE I
The name of the Corporation shall be Triton PCS Holdings, Inc.
ARTICLE II
The address of the Corporations registered office in the
State of Delaware is Corporation Trust Center, 1209 Orange
Street, Wilmington, New Castle County, Delaware 19801. The name
of its registered agent at such address is The Corporation Trust
Company.
ARTICLE III
The purpose of the Corporation is to engage in, carry on and
conduct any lawful act or activity for which corporations may be
organized under the GCL.
ARTICLE IV
1.1 Classes of Stock. The total number of shares of all
classes of stock which the Corporation shall have authority to
issue is 650,000,000, consisting of (a) 70,000,000 shares of
preferred stock, par value $0.01 per share (the Preferred Stock),
of which (i) 1,000,000 shares are designated Series A Convertible
Preferred Stock (the Series A Preferred Stock), (ii) 50,000,000
shares are designated Series B Preferred Stock (the Series B
Preferred Stock), (iii) 3,000,000 shares are designated Series C
Convertible Preferred Stock (the Series C Preferred Stock), and
(iv) 16,000,000 shares are designated Series D Convertible
Preferred Stock (the Series D Preferred Stock) and (b)
580,000,000 shares of common stock, par value $0.01 per share
(the Common Stock), of which (i) 520,000,000 shares are
designated Class A Common Stock (the Class A Common Stock), and
(ii) 60,000,000 shares are designated Class B Non-Voting Common
Stock (the Class B Non-Voting Common Stock). (Capitalized terms
used herein and not otherwise defined shall have the meanings set
forth in Section 4.10).
1.2 Additional Series of Preferred Stock.
(1) Subject to approval by the holders of shares of any
class or series of Preferred Stock to the extent such approval is
required by its terms, the Board of Directors of the Corporation
(the Board of Directors) is hereby expressly authorized, by
resolution or resolutions, to provide, out of the unissued shares
of Preferred Stock, for series of Preferred Stock in addition to
the Series A Preferred Stock, the Series B Preferred Stock, the
Series C Preferred Stock and the Series D Preferred Stock.
Before any shares of any such series are issued, the Board of
Directors shall fix, and hereby is expressly empowered to fix, by
resolutions, the following provisions of the shares thereof:
(1) the designation of such series, the number of shares to
constitute such series and the stated value thereof if different
from the par value thereof;
(2) whether the shares of such series shall have voting
rights, in addition to any voting rights provided by law, and, if
so, the terms of such voting rights, which may be general or
limited;
(3) the dividends, if any, payable on such series, whether
any such dividends shall be cumulative, and, if so, from what
dates, the conditions and dates upon which such dividends shall
be payable, the preference or relation which such dividends shall
bear to the dividends payable on any shares of stock of any other
class or any other series of this class;
(4) whether the shares of such series shall be subject to
redemption by the Corporation, and, if so, the times, prices and
other conditions of such redemption;
(5) the amount or amounts payable upon shares of such
series upon, and the rights of the holders of such series in, the
voluntary or involuntary liquidation, dissolution or winding up,
or upon any distribution of the assets, of the Corporation;
(6) whether the shares of such series shall be subject to
the operation of a retirement or sinking fund and, if so, the
extent to and manner in which any such retirement or sinking fund
shall be applied to the purchase or redemption of the shares of
such series for retirement or other corporate purposes and the
terms and provisions relative to the operation thereof;
(7) whether the shares of such series shall be convertible
into, or exchangeable for, shares of stock of any other class or
any other series of this class or any other securities and, if
so, the price or prices or the rate or rates of conversion or
exchange and the method, if any, of adjusting the same, and any
other terms and conditions of conversion or exchange;
(8) the limitations and restrictions, if any, to be
effective while any shares of such series are outstanding upon
the payment of dividends or the making of other distributions on,
and upon the purchase, redemption or other acquisition by the
Corporation of, the Common Stock or shares of stock of any other
class or any other series of this class;
(9) the conditions or restrictions, if any, upon the
creation of indebtedness of the Corporation or upon the issue of
any additional stock, including additional shares of such series
or of any other series of this class or of any other class; and
(10) any other powers, preferences and relative,
participating, optional and other special rights, and any
qualifications, limitations and restrictions thereof.
(2) The powers, preferences and relative, participating,
optional and other special rights of each series of Preferred
Stock, and the qualifications, limitations or restrictions
thereof, if any, may differ from those of any and all other
series at any time outstanding. All shares of any one series of
Preferred Stock shall be identical in all respects with all other
shares of such series, except that shares of any one series
issued at different times may differ as to the dates from which
dividends thereon shall be cumulative.
(3) Shares of Preferred Stock of any series that have been
redeemed (whether through the operation of a sinking fund or
otherwise) or that, if convertible or exchangeable, have been
converted into or exchanged for any other security shall have the
status of authorized and unissued shares of Preferred Stock of
the same series and may be reissued as a part of the series of
which they were originally a part or may be reclassified and
reissued as part of a new series of shares of Preferred Stock to
be created by resolution or resolutions of the Board of Directors
or as part of any other series of shares of Preferred Stock, all
subject to the conditions or restrictions on issuance set forth
in the resolution or resolutions adopted by the Board of
Directors providing for the issue of any series of shares of
Preferred Stock.
(4) Subject to the provisions of this Second Restated
Certificate of Incorporation and except as otherwise provided by
law, the stock of the Corporation, regardless of class, may be
issued for such consideration and for such corporate purposes as
the Board of Directors may from time to time determine.
1.3 Powers, Preferences and Rights of the Series A
Preferred Stock. The powers, preferences and rights of the
Series A Preferred Stock and the qualifications, limitations and
restrictions thereof are as follows:
(1) Ranking. The Series A Preferred Stock shall, with
respect to dividend rights and rights on liquidation, dissolution
or winding up, rank on a parity basis with the Series B Preferred
Stock, and rank senior to Junior Stock.
(2) Dividends and Distributions.
(1) Dividends. The holders of shares of Series A Preferred
Stock shall be entitled to receive, as and when declared by the
Board of Directors, out of funds legally available therefor,
dividends on each outstanding share of Series A Preferred Stock,
at an annual rate per share equal to 10% of the Accreted Value,
calculated on the basis of a 360-day year consisting of twelve 30-
day months. Dividends shall be paid quarterly in arrears on the
Dividend Payment Date commencing March 31, 1998 in the manner
provided in paragraph (iii) below.
(2) Accrued Dividends; Record Date. Dividends payable
pursuant to paragraph (i) above shall begin to accrue and be
cumulative from the date on which shares of Series A Preferred
Stock are issued and shall begin to accrue on a daily basis, in
each case whether or not earned or declared. The Board of
Directors may fix a record date for the determination of holders
of shares of Series A Preferred Stock entitled to receive payment
of the dividends payable pursuant to paragraph (i) above, which
record date shall not be more than sixty (60) days prior to the
Dividend Payment Date.
(3) Payment. All dividends shall be payable in cash.
Until June 30, 2008, the Corporation shall have the option to
defer payment of dividends on Series A Preferred Stock. Any
dividend payments so deferred shall be payable on and not earlier
than June 30, 2008.
(4) Dividends Pro Rata. All dividends paid with respect to
shares of Series A Preferred Stock pursuant to this Section
4.3(b) shall be paid pro rata to the holders entitled thereto.
In the event that the funds legally available therefor shall be
insufficient for the payment of the entire amount of cash
dividends payable at any Dividend Payment Date, subject to
Section 4.3(c), such funds shall be allocated for the payment of
dividends with respect to the shares of Series A Preferred Stock
and Series B Preferred Stock pro rata based upon the Liquidation
Preference of the outstanding shares.
(3) Certain Restrictions.
(1) Notwithstanding the provisions of Sections 4.3(b), (e)
and (f), cash dividends on the Series A Preferred Stock may not
be declared, paid or set apart for payment, nor may the
Corporation redeem, purchase or otherwise acquire any shares of
Series A Preferred Stock, if (A) the Corporation is not solvent
or would be rendered insolvent thereby or (B) at such time the
terms and provisions of any law or agreement of the Corporation,
including any agreement relating to its indebtedness,
specifically prohibit such declaration, payment or setting apart
for payment or such redemption, purchase or other acquisition, or
provide that such declaration, payment or setting apart for
payment or such redemption, purchase or other acquisition would
constitute a violation or breach thereof or a default thereunder.
(2) So long as shares of Series A Preferred Stock are
outstanding or dividends payable on shares of Series A Preferred
Stock have not been paid in full in cash, then the Corporation
shall not declare or pay cash dividends on, or redeem, purchase
or otherwise acquire for consideration, any shares of Common
Stock or other shares of Junior Stock, except with the prior
written consent of holders of a majority of the outstanding
shares of Series A Preferred Stock, except that the Corporation
may acquire, in accordance with the terms of any agreement
between the Corporation and its employees, shares of Common Stock
or Preferred Stock at a price not greater than the Market Price
as of such date.
(3) The Corporation shall not permit any Subsidiary of the
Corporation, or cause any other Person, to make any distribution
with respect to, or purchase or otherwise acquire for
consideration, any shares of capital stock of the Corporation,
unless the Corporation could, pursuant to paragraph (ii) above,
make such distribution or purchase or otherwise acquire such
shares at such time and in such manner.
(4) Voting Rights; Nomination of Director.
(1) The holders of shares of Series A Preferred Stock shall
not have any right to vote on any matters to be voted on by the
stockholders of the Corporation, except as otherwise provided in
paragraphs (ii) and (iii) below or as provided by law, and the
shares of Series A Preferred Stock shall not be included in
determining the number of shares voting or entitled to vote on
any such matters (other than the matters described in paragraphs
(ii) and (iii) below or as otherwise required by law).
(2) Unless the consent or approval of a greater number of
shares shall then be required by law, the affirmative vote of the
holders of a majority of the outstanding shares of Series A
Preferred Stock in person or by proxy, at each special and annual
meeting of stockholders called for the purpose, or by written
consent, shall be necessary to (A) authorize, increase the
authorized number of shares of or issue (including on conversion
or exchange of any convertible or exchangeable securities or by
reclassification) any shares of any class or classes of Senior
Stock or Parity Stock or any additional shares of Series A
Preferred Stock, (B) authorize, adopt or approve each amendment
to this Second Restated Certificate of Incorporation that would
increase or decrease the par value of the shares of Series A
Preferred Stock, alter or change the powers, preferences or
rights of the shares of Series A Preferred Stock or alter or
change the powers, preferences or rights of any other capital
stock of the Corporation if after such alteration or change such
capital stock would be Senior Stock or Parity Stock, (C) amend,
alter or repeal any provision of this Second Restated Certificate
of Incorporation so as to affect the shares of Series A Preferred
Stock adversely, or (D) authorize or issue any security
convertible into, exchangeable for or evidencing the right to
purchase or otherwise receive any shares of any class or classes
of Senior Stock or Parity Stock.
(3) So long as the Initial Holder owns at least two-thirds
(2/3) of the number of shares of Series A Preferred Stock owned
by it on February 4, 1998, holders of shares of Series A
Preferred Stock shall have the exclusive right, voting separately
as a single class, to nominate one of the Class II directors of
the Corporation. The foregoing right to nominate one of the
Class II directors may be exercised at any annual meeting of
stockholders or a special meeting of stockholders or holders of
Series A Preferred Stock held for such purpose or any adjournment
thereof, or by the written consent, delivered to the Secretary of
the Corporation, of the holders of a majority of the issued and
outstanding shares of Series A Preferred Stock. Notwithstanding
the foregoing, the Initial Holder shall have the right,
exercisable at any time by written notice delivered to the
Secretary of the Corporation, to surrender and cancel irrevocably
such right to nominate one of the Class II directors of the
Corporation.
(5) Redemption at Option of the Corporation. The
Corporation shall have the right to redeem shares of Series A
Preferred Stock pursuant to the following provisions:
(1) The Corporation shall not have any right to redeem
shares of the Series A Preferred Stock prior to February 4, 2008.
Thereafter, subject to the restrictions in Section 4.3(c)(i), the
Corporation shall have the right, at its sole option and
election, to redeem the shares of the Series A Preferred Stock,
in whole but not in part, at any time at a redemption price (the
Series A Redemption Price) per share equal to the Accreted Value
as of the redemption date;
(2) Notice of any redemption of the Series A Preferred
Stock shall be mailed at least ten (10), but not more than sixty
(60), days prior to the date fixed for redemption to each holder
of Series A Preferred Stock to be redeemed, at such holders
address as it appears on the books of the Corporation. In order
to facilitate the redemption of the Series A Preferred Stock, the
Board of Directors may fix a record date for the determination of
holders of Series A Preferred Stock to be redeemed, or may cause
the transfer books of the Corporation to be closed for the
transfer of the Series A Preferred Stock, not more than sixty
(60) days prior to the date fixed for such redemption;
(3) Within two (2) Business Days after the redemption date
specified in the notice given pursuant to paragraph (ii) above
and the surrender of the certificate(s) representing shares of
Series A Preferred Stock, the Corporation shall pay to the holder
of the shares being redeemed the Series A Redemption Price
therefor. Such payment shall be made by wire transfer of
immediately available funds to an account designated by such
holder or by overnight delivery (by a nationally recognized
courier) of a bank check to such holders address as it appears on
the books of the Corporation; and
(4) Effective upon the date of the notice given pursuant to
paragraph (ii) above, notwithstanding that any certificate for
such shares shall not have been surrendered for cancellation, the
shares represented thereby shall no longer be deemed outstanding,
the rights to receive dividends thereon shall cease to accrue
from and after the date of redemption designated in the notice of
redemption and all rights of the holders of the shares of the
Series A Preferred Stock called for redemption shall cease and
terminate, excepting only the right to receive the Series A
Redemption Price therefor in accordance with paragraph (iii)
above and the right to convert such shares into shares of Common
Stock until the close of business on the third Business Day
preceding the redemption date, as provided in Section 4.3(i).
(6) Redemption at Option of Holder.
(1) No holder of shares of Series A Preferred Stock shall
have any right to require the Corporation to redeem any shares of
Series A Preferred Stock prior to February 4, 2018. Thereafter,
subject to the restrictions set forth in Section 4.3(c)(i), each
holder of shares of Series A Preferred Stock shall have the
right, at the sole option and election of such holder, to require
the Corporation to redeem all (but not less than all) of the
shares of Series A Preferred Stock owned by such holder at a
price per share equal to the Series A Redemption Price;
(2) The holder of any shares of the Series A Preferred
Stock may exercise such holders right to require the Corporation
to redeem such shares by surrendering for such purpose to the
Corporation, at its principal office or at such other office or
agency maintained by the Corporation for that purpose,
certificates representing the shares of Series A Preferred Stock
to be redeemed, accompanied by a written notice stating that such
holder elects to require the Corporation to redeem all (but not
less than all) of such shares in accordance with the provisions
of this Section 4.3(f), which notice may specify an account for
delivery of the Series A Redemption Price;
(3) Within two (2) Business Days after the surrender of
such certificates, the Corporation shall pay to the holder of the
shares being redeemed the Series A Redemption Price therefor.
Such payment shall be made by wire transfer of immediately
available funds to an account designated by such holder or by
overnight delivery (by a nationally recognized courier) of a bank
check to such holders address as it appears on the books of the
Corporation; and
(4) Such redemptions shall be deemed to have been made at
the close of business on the date of the receipt of such notice
and of such surrender of the certificates representing the shares
of the Series A Preferred Stock to be redeemed and the rights of
the holder thereof, except for the right to receive the Series A
Redemption Price therefor in accordance herewith, shall cease on
such date of receipt and surrender.
(7) Reacquired Shares. Any shares of the Series A
Preferred Stock redeemed or purchased or otherwise acquired by
the Corporation in any manner whatsoever shall be retired and
canceled promptly after the acquisition thereof. All such shares
shall upon their cancellation become authorized but unissued
shares of Preferred Stock and may be reissued pursuant to Section
4.2(c) as part of a new series of Preferred Stock to be created
by resolution or resolutions of the Board of Directors, subject
to the conditions or restrictions on issuance set forth herein.
(8) Liquidation, Dissolution or Winding Up.
(1) In the event of any liquidation, dissolution or winding
up of the Corporation, either voluntary or involuntary, before
any distribution or payment to holders of Junior Stock, the
holders of shares of Series A Preferred Stock shall be entitled
to be paid an amount equal to the Accreted Value with respect to
each share of Series A Preferred Stock.
(2) If, upon any liquidation, dissolution or winding up of
the Corporation, the assets of the Corporation available for
distribution to the holders of Series A Preferred Stock shall be
insufficient to permit payment in full to such holders of the
sums which such holders are entitled to receive in such case,
then all of the assets available for distribution to holders of
the Series A Preferred Stock and Series B Preferred Stock shall
be distributed among and paid to such holders ratably in
proportion to the amounts that would be payable to such holders
if such assets were sufficient to permit payment in full.
(3) Neither the consolidation or merger of the Corporation
with or into any other Person nor the sale or other distribution
to another Person of all or substantially all the assets,
property or business of the Corporation, shall be deemed to be a
liquidation, dissolution or winding up of the Corporation for
purposes of this Section 4.3(h).
(9) Conversion.
(1) Stockholders Right To Convert. No holder of shares of
Series A Preferred Stock shall have any right to convert any
shares of Series A Preferred Stock into Class A Common Stock or
any other securities of the Corporation prior to February 4,
2006. Thereafter, each share of Series A Preferred Stock held by
the Initial Holder or a Qualified Transferee shall be
convertible, at the sole option and election of such Initial
Holder or Qualified Transferee, into fully paid and nonassessable
shares of Class A Common Stock.
(2) Number of Shares of Class A Common Stock Issuable upon
Conversion. The number of shares of Class A Common Stock issued
upon conversion of shares of Series A Preferred Stock pursuant to
paragraph (i) above shall be equal to the product of (A) the
Series A Conversion Rate as of the date of the applicable notice
pursuant to paragraph (vi) below, multiplied by (B) the number of
shares of Series A Preferred Stock to be converted.
(3) Fractional Shares. Notwithstanding any other provision
of this Second Restated Certificate of Incorporation, the
Corporation shall not be required to issue fractions of shares
upon conversion of any shares of Series A Preferred Stock or to
distribute certificates which evidence fractional shares. In
lieu of fractional shares, the Corporation may pay therefor, at
the time of any conversion of shares of Series A Preferred Stock
as herein provided, an amount in cash equal to such fraction
multiplied by the Market Price of a share of Class A Common Stock
on such date.
(4) Reorganization, Reclassification and Merger Adjustment.
If there occurs any capital reorganization or any
reclassification of the Common Stock of the Corporation, the
consolidation or merger of the Corporation with or into another
Person (other than a merger or consolidation of the Corporation
in which the Corporation is the continuing corporation and which
does not result in any reclassification or change of outstanding
shares of its Common Stock) or the sale or conveyance of all or
substantially all of the assets of the Corporation to another
Person, then each share of Series A Preferred Stock shall
thereafter be convertible into the same kind and amounts of
securities (including shares of stock) or other assets, or both,
which were issuable or distributable to the holders of
outstanding shares of Common Stock of the Corporation upon such
reorganization, reclassification, consolidation, merger, sale or
conveyance, in respect of that number of shares of Class A Common
Stock into which such share of Series A Preferred Stock might
have been converted immediately prior to such reorganization,
reclassification, consolidation, merger, sale or conveyance; and,
in any such case, appropriate adjustments (as determined in good
faith by the Board of Directors of the Corporation, whose
determination shall be conclusive) shall be made to assure that
the provisions set forth herein shall thereafter be applicable,
as nearly as reasonably may be practicable, in relation to any
securities or other assets thereafter deliverable upon the
conversion of the Series A Preferred Stock.
(5) Notice of Adjustment. Whenever the securities or other
property deliverable upon the conversion of the Series A
Preferred Stock shall be adjusted pursuant to the provisions
hereof, the Corporation shall promptly give written notice
thereof to each holder of shares of Series A Preferred Stock at
such holders address as it appears on the transfer books of the
Corporation and shall forthwith file, at its principal executive
office and with any transfer agent or agents for the Series A
Preferred Stock and the Common Stock, a certificate, signed by
the Chairman of the Board, President or one of the Vice
Presidents of the Corporation, and by its Chief Financial
Officer, Treasurer or one of its Assistant Treasurers, stating
the securities or other property deliverable per share of Series
A Preferred Stock calculated to the nearest cent or to the
nearest one-hundredth of a share and setting forth in reasonable
detail the method of calculation and the facts requiring such
adjustment and upon which such calculation is based. Each
adjustment shall remain in effect until a subsequent adjustment
hereunder is required.
(6) Mechanics of Conversion. The Initial Holder or
Qualified Transferee may exercise its option to convert by
surrendering for such purpose to the Corporation, at its
principal office or such other office or agency maintained by the
Corporation for that purpose, certificates representing the
shares of Series A Preferred Stock to be converted, accompanied
by a written notice stating that such holder elects to convert
such shares in accordance with this Section 4.3(i). The date of
receipt of such certificates and notice by the Corporation at
such office shall be the conversion date (the Series A Conversion
Date). If required by the Corporation, certificates surrendered
for conversion shall be endorsed or accompanied by a written
instrument or instruments of transfer, in form satisfactory to
the Corporation, duly executed by the registered holder or his or
its attorney duly authorized in writing. Within ten (10)
Business Days after the Series A Conversion Date (or, if at the
time of such surrender the shares of Class A Common Stock are not
listed or admitted for trading on any national securities
exchange and are not quoted on NASDAQ or any similar service,
within ten (10) Business Days of the determination of the Market
Price pursuant to Section 4.3(l)), the Corporation shall issue to
such holder a number of shares of Class A Common Stock into which
such shares of Series A Preferred Stock are convertible pursuant
to paragraph (ii) above. Certificates representing such shares
of Class A Common Stock shall be delivered to such holder at such
holders address as it appears on the books of the Corporation.
(7) Reservation of Common Stock. The Corporation shall at
all times reserve and keep available for issuance upon the
conversion of the shares of Series A Preferred Stock the maximum
number of its authorized but unissued shares of Class A Common
Stock as is reasonably anticipated to be sufficient to permit the
conversion of all outstanding shares of Series A Preferred Stock
and shall take all action required to increase the authorized
number of shares of Class A Common Stock if at any time there
shall be insufficient authorized but unissued shares of Class A
Common Stock to permit such reservation or to permit the
conversion of all outstanding shares of Series A Preferred Stock.
(8) Termination of Rights. All shares of Series A
Preferred Stock which shall have been surrendered for conversion
as herein provided shall no longer be deemed to be outstanding
and all rights with respect to such shares, including the rights,
if any, to receive notices and to vote, shall immediately cease
and terminate on the Series A Conversion Date, except only the
right of the holders thereof to receive shares of Class A Common
Stock in exchange therefor and payment of any declared and unpaid
dividends thereon.
(9) No Conversion Charge or Tax. The issuance and delivery
of certificates for shares of Class A Common Stock upon the
conversion of shares of Series A Preferred Stock shall be made
without charge to the holder of shares of Series A Preferred
Stock for any issue or transfer tax, or other incidental expense
in respect of the issuance or delivery of such certificates or
the securities represented thereby, all of which taxes and
expenses shall be paid by the Corporation.
(10) FCC Approval. Notwithstanding anything herein to the
contrary, if Federal Communications Commission or other
regulatory approval is required to be obtained prior to the
conversion of shares of Series A Preferred Stock, the holder
thereof may nevertheless elect to convert any or all of its
shares of Series A Preferred Stock by written notice given to the
Corporation in accordance with this paragraph (i), provided, that
such conversion shall not become effective until the close of
business on the date of the receipt of the last of any such
approvals and of the surrender of the certificates representing
the shares of the Series A Preferred Stock to be converted, and
the rights of the holder thereof shall continue in full force and
effect pending the receipt of all such approvals, except that no
dividends shall be payable in respect of the period following the
Series A Conversion Date, unless the required approvals are not
obtained and the conversion has not been effected within one (1)
year of the Series A Conversion Date and the applicable
conversion notice is withdrawn, in which event the obligation to
pay dividends from and after the Series A Conversion Date shall
be payable in accordance with the terms of Section 4.3(b).
(11) Qualified Transfer. If at any time an Initial Holder
or Qualified Transferee desires to sell, transfer or otherwise
dispose of shares of Series A Preferred Stock pursuant to a
Qualified Transfer, it shall, with respect to each such proposed
transfer, give written notice (a Qualified Transfer Notice) to
the Corporation at its principal executive office specifying up
to 10 prospective transferees. Upon receipt of such notice, the
Corporation shall have ten (10) days to give written notice to
such Initial Holder or Qualified Transferee specifying its
disapproval of (A) any or all of such prospective transferees if
it has good reason for such disapproval and specifying such
reason and (B) up to two (2) of such prospective transferees with
or without good reason.
(12) Election Upon Conversion. Notwithstanding any other
provision of this Section 4.3(i) to the contrary, any holder of
Series A Preferred Stock may elect, by written notice to the
Corporation, to receive shares of Class B Non-Voting Common Stock
for any or all of the shares of Class A Common Stock that such
holder would otherwise be entitled to receive upon conversion of
such shares of Series A Preferred Stock. If any such holder
elects to receive shares of Class B Non-Voting Common Stock,
then, as to such holder with respect to such shares, such
conversion shall be accomplished pursuant to the provisions of
this Section 4.3(i) hereof with all references to Class A Common
Stock in such section (except the parenthetical reference thereto
in the penultimate sentence of Section 4.3(i)(vi)) being deemed
to refer instead to Class B Non-Voting Common Stock.
(10) Notice of Certain Events. In case the Corporation
shall propose at any time or from time to time (i) to declare or
pay any dividend payable in stock of any class to the holders of
Common Stock or to make any other distribution to the holders of
Common Stock, (ii) to offer to the holders of Common Stock rights
or warrants to subscribe for or to purchase any additional shares
of Common Stock or shares of stock of any class or any other
securities, rights or options, (iii) to effect any
reclassification of its Common Stock, (iv) to effect any
consolidation, merger or sale, transfer or other disposition of
all or substantially all of the property, assets or business of
the Corporation which would, if consummated, adjust the Series A
Conversion Rate or the securities issuable upon conversion of
shares of Series A Preferred Stock, or (v) to effect the
liquidation, dissolution or winding up of the Corporation, then,
in each such case, the Corporation shall mail to each holder of
shares of Series A Preferred Stock, at such holders address as it
appears on the transfer books of the Corporation, a written
notice of such proposed action, which shall specify (A) the date
on which a record is to be taken for the purpose of such dividend
or distribution of rights or warrants or, if a record is not to
be taken, the date as of which the holders of shares of Common
Stock of record to be entitled to such dividend or distribution
of rights or warrants are to be determined, or (B) the date on
which such reclassification, consolidation, merger, sale,
conveyance, dissolution, liquidation or winding up is expected to
become effective, and such notice shall be so given as promptly
as possible but in any event at least ten (10) Business Days
prior to the applicable record, determination or effective date,
specified in such notice.
(11) Certain Remedies. Any registered holder of shares of
Series A Preferred Stock shall be entitled to an injunction or
injunctions to prevent breaches of the provisions of this Second
Restated Certificate of Incorporation and to enforce specifically
the terms and provisions of this Second Restated Certificate of
Incorporation in any court of the United States or any state
thereof having jurisdiction, this being in addition to any other
remedy to which such holder may be entitled at law or in equity.
(12) Appraisal Procedure. If, at the time the Market Price
must be determined for the purpose of calculating the Series A
Conversion Rate, the shares of Class A Common Stock are not
listed or admitted for trading on any national securities
exchange and are not quoted on NASDAQ or any similar service, the
Market Price shall be determined as follows:
(1) Two independent accounting or investment banking firms
of nationally recognized standing (each, an Appraiser), one
chosen by the Corporation and one by the holders of a majority of
the outstanding shares of Series A Preferred Stock, shall each
determine and attempt to mutually agree upon, the Market Price.
Each party shall deliver a notice to the other appointing its
Appraiser within fifteen (15) days after the applicable notice
and surrender pursuant to Section 4.3(i)(vi). If either the
Corporation or such holders fail to appoint an appraiser within
such 15-day period, the Market Price shall be determined by the
Appraiser that has been so appointed.
(2) If within thirty (30) days after appointment of the two
Appraisers they are unable to agree upon the Market Price, an
independent accounting or investment banking firm of nationally
recognized standing shall within ten (10) days thereafter be
chosen to serve as a third Appraiser by the mutual consent of
such first two Appraisers. The determination of the Market Price
by the third Appraiser so appointed and chosen shall be made
within thirty (30) days after the selection of such third
Appraiser.
(3) If three Appraisers shall be appointed and the
determination of one Appraiser is disparate from the middle
determination by more than twice the amount by which the other
determination is disparate from the middle determination, then
the determination of such Appraiser shall be excluded, the
remaining two determinations shall be averaged, and such average
shall be binding and conclusive on the Corporation and the
holders of the Series A Preferred Stock; otherwise the average of
all three determinations shall be binding and conclusive on the
Corporation and the holders of the Series A Preferred Stock.
(4) In connection with any appraisal conducted pursuant to
this paragraph (l), the Appraiser shall adhere to the guidelines
provided in the definition of Market Price set forth below,
including the proviso thereto.
(5) The fees and expenses of each Appraiser shall be borne
by the Corporation.
1.4 Powers, Preferences and Rights of the Series B
Preferred Stock. The Series B Preferred Stock shall rank on a
parity basis with the Series A Preferred Stock, and the powers,
preferences and rights of the Series B Preferred Stock, and the
qualifications, limitations, and restrictions thereof, shall be
identical to those of the Series A Preferred Stock, except that
(a) shares of Series B Preferred Stock shall not be, pursuant to
the terms of Section 4.3(i) or otherwise, convertible into shares
of Class A Common Stock or any other security issued by the
Corporation, (b) the Corporation may redeem shares of Series B
Preferred Stock in accordance with the terms of Section 4.3(e) at
any time without regard to whether the redemption date is before,
on or after the date referred to in Section 4.3(e)(i), (c) shares
of Series B Preferred Stock may be issued by the Corporation in
accordance with the terms of Section 4.8, (d) holders of Series B
Preferred Stock shall not, pursuant to Section 4.3(d) or
otherwise, have the right to nominate any directors of the
Corporation and (e) the words Series B Preferred Stock and Series
A Preferred Stock shall be substituted for all references in
Section 4.3 to Series A Preferred Stock and Series B Preferred
Stock, respectively.
1.5 Powers, Preferences and Rights of the Series C
Preferred Stock. The powers, preferences and rights of the
Series C Preferred Stock and the qualifications, limitations and
restrictions thereof are as follows:
(1) Ranking. The Series C Preferred Stock shall rank (i)
junior to the Series A Preferred Stock and the Series B Preferred
Stock with respect to dividend rights and rights on liquidation,
dissolution or winding up, (ii) junior to the Series D Preferred
Stock with respect to rights on a Statutory Liquidation, (iii) on
a parity basis with Series D Preferred Stock and Common Stock
with respect to dividend rights, and (iv) senior to the Common
Stock and any series or class of the Corporations common or
preferred stock, now or hereafter authorized (other than Series A
Preferred Stock, Series B Preferred Stock or Series D Preferred
Stock), with respect to rights on liquidation, dissolution and
winding up.
(2) Dividends. Holders of Series C Preferred Stock shall
be entitled to dividends in cash or property when, as and if,
declared by the Board of Directors of the Corporation. No cash
or property dividends or distributions shall be declared or paid
on any shares of Common Stock or on any other series of preferred
stock ranking junior to or on a parity basis with the Series C
Preferred Stock with respect to dividends or distributions,
unless the holders of the Series C Preferred Stock receive cash
or property dividends or distributions in an amount per share of
Series C Preferred Stock at least equal to the greater of (i) the
dividends or distributions payable on the number of shares of
Common Stock into which a share of Series C Preferred Stock is
then convertible and (ii) the dividends or distributions per
share payable to holders of any series of preferred stock
ranking, with respect to dividends or distributions, junior to or
on a parity basis with the Series C Preferred Stock multiplied by
a fraction, the numerator of which is the number of shares of
Common Stock into which a share of Series C Preferred Stock is
then convertible and the denominator of which is the number of
shares of Common Stock into which a share of such series of
preferred stock ranking, with respect to dividends or
distributions, junior to or on a parity basis with the Series C
Preferred Stock is then convertible; provided, that if such other
series of preferred stock is not convertible into Common Stock,
then the numerator of such fraction shall be the liquidation
preference of a share of Series C Preferred Stock and the
denominator of such fraction shall be the liquidation preference
of a share of such other series of preferred stock.
(3) Liquidation Preference.
(1) In the event of any liquidation, dissolution or winding
up of the Corporation, the holders of Series C Preferred Stock
shall be entitled to receive out of the assets of the
Corporation, whether such assets are capital or surplus of any
nature, after payment is made to holders of all series of
preferred stock ranking senior to the Series C Preferred Stock
with respect to rights on liquidation, dissolution or winding up
(including, in the case of a Statutory Liquidation, the Series D
Preferred Stock), but before any payment shall be made or any
assets distributed to the holders of Common Stock or any series
of preferred stock ranking junior to the Series C Preferred Stock
with respect to rights on liquidation, dissolution or winding up,
an amount equal to the Liquidation Preference and no more.
(2) If upon any liquidation, dissolution or winding up of
the Corporation the assets of the Corporation to be distributed
are insufficient to permit the payment to all holders of Series C
Preferred Stock and any other series of preferred stock ranking
on a parity basis with Series C Preferred Stock with respect to
rights on liquidation, dissolution or winding up (including, in
the case of a liquidation, dissolution or winding up other than a
Statutory Liquidation of the Series D Preferred Stock), to
receive their full preferential amounts, the entire assets of the
Corporation shall be distributed among the holders of Series C
Preferred Stock and all such other series ratably in accordance
with their respective liquidation preference.
(3) After payment to the holders of Series C Preferred
Stock of the amounts set forth in paragraph (i) above, the entire
remaining assets and funds of the Corporation legally available
for distribution, if any, shall be distributed among the holders
of Common Stock and the Series C Preferred Stock and the Series D
Preferred Stock in proportion to the shares of Common Stock then
held by them and the shares of Common Stock into which their
shares of Series C Preferred Stock and Series D Preferred Stock
are convertible (as adjusted from time to time in accordance with
the terms of Section 4.5(f)) as of the date of the liquidation,
dissolution or winding up of the Corporation.
(4) Neither the consolidation or merger of the Corporation
with or into any other Person nor the sale or other distribution
to another Person of all or substantially all the assets,
property or business of the Corporation, shall be deemed to be a
liquidation, dissolution or winding up of the Corporation for
purposes of this Section 4.5(c).
(4) Voting Rights.
(1) Except as set forth in paragraph (ii) below, on all
matters to be submitted to the stockholders (including, without
limitation, the election of directors), the holders of the Series
C Preferred Stock shall have the right and power to vote on any
question or in any proceeding and to be represented on any
question or in any proceeding and to be represented at, or to
receive notice of, any meeting of stockholders in the same manner
as holders of Class A Common Stock, and the Series C Preferred
Stock shall vote together with the Class A Common Stock as a
single class.
(2) The affirmative vote of holders of not less than a
majority of Series C Preferred Stock shall be required to
(A) authorize, increase the authorized number of shares of or
issue (including on conversion or exchange of any convertible or
exchangeable securities or by reclassification) any shares of any
class or classes of stock ranking senior to or pari passu with
the Series C Preferred Stock or any additional shares of Series C
Preferred Stock, (B) authorize, adopt or approve each amendment
to this Second Restated Certificate of Incorporation that would
increase or decrease the par value of the shares of Series C
Preferred Stock, alter or change the powers, preferences or
rights of the shares of Series C Preferred Stock or alter or
change the powers, preferences or rights of any other capital
stock of the Corporation if after such alteration or change such
capital stock would rank senior to or pari passu with the Series
C Preferred Stock, (C) amend, alter or repeal any provision of
this Second Restated Certificate of Incorporation so as to affect
the shares of Series C Preferred Stock adversely, or (D)
authorize or issue any security convertible into, exchangeable
for or evidencing the right to purchase or otherwise receive any
shares of any class or classes of stock senior to or pari passu
with the Series C Preferred Stock.
(3) On any matters on which the holders of the shares of
Series C Preferred Stock shall be entitled to vote together with
the holders of Class A Common Stock, each holder of Series C
Preferred Stock shall be entitled to the number of votes equal to
the number of whole shares of Class A Common Stock into which its
shares of Series C Preferred Stock are convertible (as adjusted
from time to time pursuant to Section 4.5(f) hereof) on the
record date for such vote.
(5) Conversion. The shares of Series C Preferred Stock
shall be convertible into shares of Class A Common Stock as
follows:
(1) Optional Conversion. Each share of Series C Preferred
Stock shall be convertible, at the option of the holder thereof,
at any time and from time to time, into the number of fully paid
and non-assessable shares of Class A Common Stock of the
Corporation as is determined by dividing the Initial Conversion
Price (as hereafter defined) by the Current Conversion Price (as
defined in Section 4.5(f) below) in effect at the time of
conversion. For purposes of this Section 4.5(e), the Initial
Conversion Price shall equal $100.00.
(2) Automatic Conversion. Upon the IPO Date, each share of
Series C Preferred Stock then outstanding shall automatically be
converted into such number of fully paid and nonassessable shares
of Class A Common Stock of the Corporation as is determined by
dividing the Initial Conversion Price by the Current Conversion
Price then in effect.
(3) Fractional Shares. No fractional shares of Class A
Common Stock shall be issued upon conversion of shares of Series
C Preferred Stock. In lieu of any fractional share to which the
holder would otherwise be entitled after determination of the
aggregate full number of shares of Class A Common Stock issuable
in respect of the Series C Preferred Stock then being converted,
the Corporation shall pay cash equal to such fraction multiplied
by the then Current Conversion Price.
(4) Mechanics of Optional Conversion. In order for a
holder of Series C Preferred Stock to convert such shares into
shares of Class A Common Stock, such holder shall surrender the
certificate or certificates for such shares of Series C Preferred
Stock at the office of the transfer agent for the Series C
Preferred Stock (or if the Corporation serves as its own transfer
agent, at the principal office of the Corporation), together with
written notice that such holder elects to convert all or any
number of the shares of the Series C Preferred Stock represented
by such certificate or certificates. If required by the
Corporation, certificates surrendered for conversion shall be
endorsed or accompanied by a written instrument or instruments of
transfer, in form satisfactory to the Corporation, duly executed
by the registered holder or his or its attorney duly authorized
in writing. The date of receipt of such certificates and notice
by the transfer agent (or by the Corporation if the Corporation
serves as its own transfer agent) shall be the conversion date
(the Optional Conversion Date). The Corporation shall, within
ten (10) Business Days after the Optional Conversion Date, issue
and deliver at such office to such holder of Series C Preferred
Stock, or to his or its nominees, a certificate or certificates
for the number of whole shares of Class A Common Stock (and any
shares of Series C Preferred Stock represented by the certificate
delivered to the Corporation by the holder thereof that are not
converted into Class A Common Stock) issuable upon such
conversion in accordance with the provisions hereof, together
with cash in lieu of fractional shares calculated in accordance
with paragraph (iii) of this Section 4.5(e).
(5) Mechanics of Automatic Conversion. All holders of
record of shares of Series C Preferred Stock will be given at
least thirty (30) but not more than sixty (60) days prior written
notice of the date fixed (the Automatic Conversion Date) and the
place designated for automatic conversion of all shares of Series
C Preferred Stock pursuant to this Section 4.5(e). Such notice
will be sent by first class or registered mail, postage prepaid,
to each record holder of Series C Preferred Stock at such holders
address last shown on the records of the transfer agent for the
Series C Preferred Stock (or the records of the Corporation if it
serves as its own transfer agent). On or before the Automatic
Conversion Date, each holder of shares of Series C Preferred
Stock shall surrender his or its certificate or certificates for
all such shares to the Corporation at the place designated in
such notice. If required by the Corporation, certificates
surrendered for conversion shall be endorsed or accompanied by a
written instrument or instruments of transfer, in form
satisfactory to the Corporation, duly executed by the registered
holder or his or its attorney duly authorized in writing. On and
after the Automatic Conversion Date, all rights with respect to
the Series C Preferred Stock so converted, including the rights,
if any, to receive notices and to vote, will terminate, except
only the rights of the holders thereof, upon surrender of their
certificate or certificates therefor, to receive certificates for
the number of shares of Class A Common Stock into which such
Series C Preferred Stock has been converted, and payment of any
declared but unpaid dividends thereon. As soon as practicable
after the Automatic Conversion Date and the surrender of the
certificate or certificates representing shares of Series C
Preferred Stock, the Corporation shall issue and deliver to such
holder, or on his or its written order to his or its nominees, a
certificate or certificates for the number of whole shares of
Class A Common Stock issuable upon such conversion in accordance
with the provisions hereof, together with cash in lieu of
fractional shares calculated in accordance with paragraph (iii)
of this Section 4.5(e).
(6) Reservation of Shares. The Corporation shall at all
times when the Series C Preferred Stock shall be outstanding,
reserve and keep available out of its authorized but unissued
stock, for the purpose of effecting the conversion of the Series
C Preferred Stock, such number of its duly authorized shares of
Class A Common Stock as shall from time to time be sufficient to
effect the conversion of all outstanding shares of Series C
Preferred Stock. Before taking any action which would cause
Class A Common Stock, upon the conversion of Series C Preferred
Stock, to be issued below the then par value of the shares of
Class A Common Stock, the Corporation will take any corporate
action that may, in the opinion of its counsel, be necessary in
order that the Corporation may validly and legally issue fully
paid and non-assessable shares of Class A Common Stock to the
holders of Series C Preferred Stock.
(7) Adjustments for Dividends. Upon any conversion of
Series C Preferred Stock, no adjustment to the Initial Conversion
Price or the Current Conversion Price shall be made for declared
and unpaid dividends on the Series C Preferred Stock surrendered
for conversion or on the Class A Common Stock delivered upon
conversion.
(8) Termination of Rights. All shares of Series C
Preferred Stock which shall have been surrendered for conversion
as herein provided or, as to shares of Series C Preferred Stock
which are subject to automatic conversion pursuant to paragraph
(vi) above, which have not been so surrendered prior to the
Automatic Conversion Date, shall no longer be deemed to be
outstanding and all rights with respect to such shares, including
the rights, if any, to receive notices and to vote, shall
immediately cease and terminate on the Optional Conversion Date
or the Automatic Conversion Date, as applicable, except only the
right of the holders thereof to receive shares of Class A Common
Stock in exchange therefor and payment of any declared and unpaid
dividends thereon. On and as of the Optional Conversion Date or
the Automatic Conversion Date, as applicable, the shares of Class
A Common Stock issuable upon such conversion shall be deemed to
be outstanding, and the holder thereof shall be entitled to
exercise and enjoy all rights with respect to such shares of
Class A Common Stock, including the rights, if any, to receive
notices and to vote. Shares of Series C Preferred Stock
converted into shares of Class A Common Stock will be restored to
the status of authorized but unissued shares of preferred stock
without designation as to series, and may thereafter be issued,
whether or not designated as shares of Series C Preferred Stock.
(9) No Conversion Charge or Tax. The issuance and delivery
of certificates for shares of Class A Common Stock upon the
conversion of shares of Series C Preferred Stock shall be made
without charge to the holder of shares of Series C Preferred
Stock for any issue or transfer tax, or other incidental expense
in respect of the issuance or delivery of such certificates or
the securities represented thereby, all of which taxes and
expenses shall be paid by the Corporation.
(10) Election Upon Conversion. Notwithstanding any other
provision of this Section 4.5(e), any holder of Series C
Preferred Stock may elect, by written notice to the Corporation,
to receive shares of Class B Non-Voting Common Stock for any or
all of the shares of Class A Common Stock that such holder would
otherwise be entitled to receive upon conversion of such shares
of Series C Preferred Stock. If any such holder elects to
receive shares of Class B Non-Voting Common Stock, then, as to
such holder with respect to such shares, such conversion shall be
accomplished pursuant to the provisions of Sections 4.5(e) and
4.5(f) hereof with all references to Class A Common Stock in such
sections being deemed to refer instead to Class B Non-Voting
Common Stock.
(6) Adjustments to Conversion Price.
(1) Current Conversion Price. The Initial Conversion Price
shall be subject to adjustment from time to time and such
conversion price as adjusted shall likewise be subject to further
adjustment, all as hereinafter set forth. The term Current
Conversion Price shall mean, as of any time, the Initial
Conversion Price in case no adjustment shall have been made
pursuant to this Section 4.5(f), or the Initial Conversion Price
as adjusted pursuant to this Section 4.5(f), as the case may be.
(2) Adjustment Formula. If at any time the Corporation
shall issue any shares of Common Stock (other than Excluded
Stock, as defined in paragraph (vii) below) or any shares of a
class or series convertible into Common Stock (other than
Excluded Stock) or any Rights or Related Rights (as defined
below) (collectively with the Common Stock, Securities) (other
than a dividend or other distribution payable in Common Stock or
Convertible Securities, to which paragraph (iv) below applies)
for no consideration or a consideration per share (the
consideration in each case to be determined in the manner
provided in clauses (E) and (F) of paragraph (iii) below) less
than the Market Price, as in effect immediately prior to the
issuance of such Securities, the Current Conversion Price in
effect immediately prior to each such issuance shall forthwith be
adjusted to a Current Conversion Price obtained by multiplying
such Current Conversion Price in effect immediately prior to such
issuance by a fraction having (i) a numerator equal to the sum of
(x) the total number of shares of Common Stock outstanding on a
Fully Diluted Basis immediately prior to such issuance multiplied
by the Market Price as in effect immediately prior to such
issuance, plus (y) the consideration received by the Corporation
upon such issuance, and (ii) a denominator equal to the total
number of shares of Common Stock outstanding on a Fully Diluted
Basis immediately after such issuance, multiplied by the Market
Price as in effect immediately prior to such issuance.
(3) Adjustment Considerations. For the purpose of any
adjustment of the Current Conversion Price pursuant to paragraph
(ii) above, the following provisions shall be applicable:
(1) In the case of the issuance of options or warrants to
purchase, or rights to subscribe for, Common Stock other than
Excluded Stock (collectively, the Rights), the aggregate maximum
number of shares of Common Stock deliverable upon exercise of the
Rights shall be deemed to have been issued at the time the Rights
were issued, for an aggregate consideration equal to (i) the
consideration (determined in the manner provided in clauses (E)
and (F) below), if any, received by the Corporation upon the
issuance of the Rights, plus (ii) the minimum purchase price
provided in the Rights for the Common Stock covered thereby;
provided, however, that such shares of Common Stock deliverable
upon the exercise of the Rights shall not be deemed to have been
issued unless such aggregate consideration per share would be
less than the Market Price as in effect on the date of and
immediately prior to such issuance.
(2) In the case of the issuance of securities by their
terms convertible into or exchangeable for Common Stock other
than Excluded Stock (collectively, the Convertible Securities),
or options or warrants to purchase, or rights to subscribe for,
securities by their terms convertible into or exchangeable for
Common Stock other than Excluded Stock (collectively, the Related
Rights), the aggregate maximum number of shares of Common Stock
deliverable upon conversion, exchange or exercise of any
Convertible Securities or Related Rights shall be deemed to have
been issued at the time the Convertible Securities or the Related
Rights were issued and for an aggregate consideration equal to
(i) the consideration received by the Corporation upon issuance
of the Convertible Securities or the Related Rights (excluding
any cash received on account of accrued interest or accrued
dividends), plus (ii) the additional consideration, if any, to be
received by the Corporation upon the conversion, exchange or
exercise of the Convertible Securities or Related Rights (the
consideration in each case to be determined in the manner
provided in clauses (E) and (F) below); provided, however, that
such shares of Common Stock deliverable upon such conversion,
exchange or exercise of the Convertible Securities or Related
Rights shall not be deemed to have been issued unless such
aggregate consideration per share would be less than the Market
Price as in effect on the date of and immediately prior to such
issuance.
(3) On any change in the number of shares of Common Stock
deliverable upon the exercise of the Rights or Related Rights or
upon the conversion, exchange or exercise of the Convertible
Securities or on any change in the minimum purchase price of the
Rights, Related Rights or Convertible Securities other than a
change resulting from the anti-dilution provisions of the Rights,
Related Rights or Convertible Securities, the Current Conversion
Price shall forthwith be readjusted to such Current Conversion
Price as would have been obtained had the adjustment made upon
the issuance of such Rights, Related Rights or Convertible
Securities not converted, exchanged or exercised prior to such
change, been made upon the basis of such change.
(4) On the expiration of any of the Rights, Related Rights
or Convertible Securities, the Current Conversion Price shall
forthwith be readjusted to such Current Conversion Price as would
have been obtained had the adjustment made upon the issuance of
such Rights or Related Rights or the issuance of any such
Convertible Securities been made upon the basis of the issuance
of only the number of shares of Common Stock actually issued upon
the exercise of such Rights or Related Rights or the conversion,
exchange or exercise of any such Convertible Securities.
(5) In the case of the issuance of Securities for cash, the
consideration shall be deemed to be the amount of cash paid
therefor.
(6) In the case of the issuance of Securities for a
consideration in whole or in part other than cash, the
consideration other than cash shall be deemed to be the fair
value thereof as determined in good faith by the Board of
Directors of the Corporation, whose determination shall be
conclusive.
(4) Effect of Dividends, Distributions, Subdivisions or
Combinations. If the Corporation declares a dividend or other
distribution payable in Common Stock or Convertible Securities or
subdivides its outstanding shares of Common Stock into a larger
number or combines its outstanding shares of Common Stock into a
smaller number, then the Current Conversion Price in effect
immediately prior to such dividend, other distribution,
subdivision or combination, as the case may be, shall forthwith
be adjusted to that price determined by multiplying the Current
Conversion Price by a fraction (x) the numerator of which shall
be the total number of shares of Common Stock outstanding on a
Fully Diluted Basis immediately prior to such dividend, other
distribution, subdivision or combination and (y) the denominator
of which shall be the total number of shares of Common Stock
outstanding on a Fully Diluted Basis immediately after such
dividend, other distribution, subdivision or combination.
(5) Effect of Distributions In Kind. In case the
Corporation shall distribute to the holders of its capital stock
any additional shares of its capital stock (other than
Securities), stock or other securities of other Persons,
evidences of indebtedness issued by the Corporation or other
Persons, assets (excluding cash dividends) or options, warrants
or rights (excluding Rights or Related Rights), then, in each
such case, immediately following the record date fixed for the
determination of the holders of Common Stock entitled to receive
such distribution, the Current Conversion Price in effect
thereafter shall be determined by multiplying the Current
Conversion Price in effect immediately prior to such record date
by a fraction (A) the numerator of which shall be an amount equal
to the remainder of (x) the Market Price of one share of Common
Stock less (y) the fair value (as determined in good faith by the
Corporations Board of Directors, whose determination shall be
conclusive) of the stock, securities, evidences of indebtedness,
assets, options, warrants or rights so distributed in respect of
one share of Common Stock, as of the record date applicable to
such distribution, as the case may be, and (B) the denominator of
which shall be the Market Price of one share of Common Stock, as
of the record date applicable to such distribution. Such
adjustment shall be made on the date such distribution is made,
and shall become effective at the opening of business on the
business day following the record date for the determination of
stockholders entitled to such distribution.
(6) Notice of Changes. Whenever the Current Conversion
Price shall be adjusted as provided in this Section 4.5(f), the
Corporation shall forthwith file, at the office of the transfer
agent for the Series C Preferred Stock, at the principal office
of the Corporation or at such other place as may be designated by
the Corporation, a statement, certified by the chief financial
officer of the Corporation, showing in detail the facts requiring
such adjustment and the Current Conversion Price that shall be in
effect after such adjustment. The Corporation shall also cause a
copy of such statement to be sent by first class mail, postage
prepaid, to each holder of record of Series C Preferred Stock at
such holders address as shown in the records of the Corporation.
(7) Excluded Stock. As used in this Section 4.5(f),
Excluded Stock shall mean (A) all shares of Common Stock or
options for the purchase thereof issued, sold or granted, in the
past or future, by the Corporation to its employees, directors or
consultants pursuant to bona fide stock purchase, option or
similar benefit plans or other arrangements approved by the Board
of Directors of the Corporation, (B) with the approval of holders
of a majority of the outstanding shares of Series C Preferred
Stock, a maximum of 5% of the outstanding shares of Common Stock
on a Fully Diluted Basis consisting of Common Stock or
Convertible Securities issued to creditors in connection with
incurrence of indebtedness, (C) any shares of Series C Preferred
Stock or Common Stock issued upon conversion of Preferred Stock
as provided herein, (D) all shares of Common Stock issued prior
to the date of the filing of this Second Restated Certificate of
Incorporation to the employees and directors of the Corporation
or any of its Subsidiaries or Affiliates.
(7) Certain Restrictions.
(1) Notwithstanding the provisions of Section 4.5(b), cash
dividends on the Series C Preferred Stock may not be declared,
paid or set apart for payment, nor may the Corporation redeem,
purchase or otherwise acquire any shares of Series C Preferred
Stock, if (A) the Corporation is not solvent or would be rendered
insolvent thereby or (B) at such time the terms and provisions of
any law or agreement of the Corporation, including any agreement
relating to its indebtedness, specifically prohibit such
declaration, payment or setting apart for payment or such
redemption, purchase or other acquisition, or provide that such
declaration, payment or setting apart for payment or such
redemption, purchase or other acquisition would constitute a
violation or breach thereof or a default thereunder.
(2) So long as shares of Series C Preferred Stock are
outstanding or dividends payable on shares of Series C Preferred
Stock have not been paid in full in cash, the Corporation shall
not declare or pay cash dividends on, or redeem, purchase or
otherwise acquire for consideration, any shares of Common Stock
or other shares of capital stock of the Corporation ranking
junior to or on a parity basis with the Series C Preferred Stock
(including the Series D Preferred Stock), except with the prior
written consent of holders of a majority of the outstanding
shares of Series C Preferred Stock, except that the Corporation
may acquire, in accordance with the terms of any agreement
between the Corporation and its employees, shares of Common Stock
from its employees at a price equal to such employees purchase
price therefor without such consent.
(3) The Corporation shall not permit any Subsidiary of the
Corporation, or cause any other Person, to make any distribution
with respect to, or purchase or otherwise acquire for
consideration, any shares of Common Stock or other shares of
capital stock of the Corporation ranking junior to or on a parity
basis with the Series C Preferred Stock (including the Series D
Preferred Stock) unless the Corporation could, pursuant to
paragraph (i) above, make such distribution or purchase or
otherwise acquire such shares at such time and in such manner.
(8) Redemption. At the option of the Corporation, the
Series C Preferred Stock is redeemable if the Corporation
receives the prior affirmative vote, or written consent, of (i)
all holders of the outstanding shares of Series C Preferred
Stock, (ii) all holders of the outstanding shares of Series D
Preferred Stock, and (iii) any other holders of the Corporations
capital stock that may be required pursuant to this Second
Restated Certificate of Incorporation (including, without
limitation, pursuant to the provisions contained in Section
4.3(c)(ii) hereof).
(9) Sinking Fund. There shall be no sinking fund for the
payment of dividends or liquidation preferences on the Series C
Preferred Stock.
1.6 Powers, Preferences and Rights of the Series D
Preferred Stock.
(1) Ranking. The Series D Preferred Stock shall rank (i)
junior to the Series A Preferred Stock and the Series B Preferred
Stock with respect to dividend rights and rights on liquidation,
dissolution or winding up, (ii) senior to the Series C Preferred
Stock with respect to rights on a Statutory Liquidation, (iii) on
a parity basis with Series C Preferred Stock and Common Stock
with respect to dividend rights, and (iv) senior to the Common
Stock and any series or class of the Corporations common or
preferred stock, now or hereafter authorized (other than Series A
Preferred Stock, Series B Preferred Stock or Series C Preferred
Stock), with respect to rights on liquidation, dissolution and
winding up.
(2) Other Powers, Preferences and Rights. Subject to
paragraph (a) above, the powers, preferences and rights of the
Series D Preferred Stock, and the qualifications, limitations,
and restrictions thereof, shall be identical to those of the
Series C Preferred Stock, except that (a) in addition to the
conversion rights set forth in Section 4.5(e) (subject to clause
(c) below), shares of Series D Preferred Stock shall be
convertible at the option of the holder thereof, at any time and
from time to time, into an equivalent number of fully paid and
non-assessable shares of Series C Preferred Stock, any such
conversion being made in accordance with the applicable
provisions of Section 4.5(e); (b) the holder(s) of the shares of
Series D Preferred Stock shall not have any right to vote on any
matters to be voted on by the stockholders of the Corporation,
and the shares of Series D Preferred Stock shall not be included
in determining the number of shares voting or entitled to vote on
any such matters, except that such holder(s) shall have the right
to vote on matters specified in Section 4.5(d)(ii) or as
otherwise provided by law; (c) shares of Series D Preferred Stock
shall not be subject to automatic conversion upon the IPO Date in
accordance with Section 4.5(c)(ii); provided, however, that on
and after the IPO Date, the Current Conversion Price shall be
deemed to be the Current Conversion Price as of the IPO Date; and
(d) the words Series D Preferred Stock and Series C Preferred
Stock shall be substituted for all references in Section 4.5 to
Series C Preferred Stock and Series D Preferred Stock,
respectively.
(3) Reservation of Shares. The Corporation shall at all
times when the Series D Preferred Stock shall be outstanding,
reserve and keep available out of its authorized but unissued
stock, for the purpose of effecting the conversion of the Series
D Preferred Stock, such number of its duly authorized shares of
Series C Preferred Stock and Common Stock as shall from time to
time be sufficient to effect the conversion of all outstanding
shares of Series D Preferred Stock.
(4) FCC Approval. Notwithstanding anything herein to the
contrary, if Federal Communications Commission or other
regulatory approval is required to be obtained prior to the
conversion of shares of Series D Preferred Stock, the holder
thereof may nevertheless elect to convert any or all of its
shares of Series D Preferred Stock by written notice given to the
Corporation in accordance with the provisions of Section 4.5(e),
provided, that such conversion shall not become effective until
the close of business on the date of the receipt of the last of
any such approvals and of the surrender of the certificates
representing the shares of the Series D Preferred Stock to be
converted and the rights of the holder thereof shall continue in
full force and effect pending the receipt of all such approvals.
1.7 Common Stock.
(1) Class A Common Stock. Each holder of Class A Common
Stock shall be entitled to one vote for each share of Class A
Common Stock held of record on all matters on which stockholders
generally are entitled to vote and to all other rights, powers
and privileges of stockholders under Delaware law. Upon the
dissolution, liquidation or winding up of the Corporation, after
any preferential amounts to be distributed to the holders of the
Preferred Stock and any other class or series of stock having a
preference over the Class A Common Stock then outstanding have
been paid or declared and funds sufficient for the payment
thereof in full set apart for payment, the entire remaining
assets and funds of the Corporation legally available for
distribution, if any, shall be distributed among the holders of
Class A Common Stock and Class B Non-Voting Common Stock in
proportion to the shares of Common Stock then held by them.
(2) Class B Non-Voting Common Stock. The powers,
preferences and rights of the Class B Non-Voting Common Stock,
and the qualifications, limitations, and restrictions thereof,
shall be identical to those of the Class A Common Stock, except
that the shares of Class B Non-Voting Common Stock shall not have
any right to vote on any matters to be voted on by the
stockholders of the Corporation, and the shares of Class B Non-
Voting Common Stock shall not be included in determining the
number of shares voting or entitled to vote on any such matters,
except as otherwise provided by law. At any time and from time
to time, any holder of shares of Class B Non-Voting Common Stock
may, at the option of any such holder, convert all or any portion
of such shares of Class B Non-Voting Common Stock into an
equivalent number of fully paid and non-assessable shares of
Class A Common Stock; provided, however, that if such holder is
an Initial Class B Holder, then such Initial Class B Holder may
convert all or any portion of such shares only if such Initial
Class B Holder delivers a written opinion of counsel acceptable
to the Corporations counsel opining to the effect that such
Initial Class B Holder should not be (and as a result of any such
conversion should not become) an Affiliate of the Corporation.
Furthermore, upon an otherwise permitted sale or transfer of any
shares of Class B Non-Voting Common Stock by an Initial Class B
Holder to any Person that is not (and as a result of any such
conversion would not become) an Affiliate of the Initial Class B
Holders, each such share of Class B Non-Voting Common Stock so
sold or transferred shall convert automatically into one share of
Class A Common Stock.
(3) Effect of Stock Splits, Stock Dividends, Etc. If the
Corporation declares a stock split or stock dividend or effects a
combination or similar recapitalization with respect to any class
of its Common Stock, then the Corporation shall also make an
equivalent change to all other classes of its Common Stock.
1.8 Exchange of Capital Stock. Notwithstanding any other
provision of this Second Restated Certificate of Incorporation to
the contrary, in the event that the Initial Holder terminates its
obligations under Section 8.6 of the Stockholders Agreement
pursuant to Section 8.8(c) thereof with respect to any Overlap
Territory (as defined therein) (any such termination being
referred to hereinafter as the Exchange Event), the following
provisions shall apply:
(1) Right to Exchange. The Corporation shall have the
right, exercisable in its sole discretion by written notice (the
Exchange Notice) given to the Initial Holder within sixty (60)
days after the Exchange Event, to:
(1) require the Initial Holder and each Section 4.8
Transferee to exchange for an equivalent number of shares of
Series B Preferred Stock either (A) all of the shares of Series A
Preferred Stock then owned by the Initial Holder and each Section
4.8 Transferee or (B) a number of shares of Series A Preferred
Stock then owned by each such holder equal to the product of (x)
the number of shares of Series A Preferred Stock then owned by
such holder multiplied by (y) a fraction, the numerator of which
is equal to the number of POPs (as defined in the Stockholders
Agreement) in the Overlap Territory and the denominator of which
is equal to the total number of POPs in the Territory (as defined
in the Stockholders Agreement); and
(2) require the Initial Holder and each Section 4.8
Transferee to exchange, for a number of shares of Series B
Preferred Stock determined in accordance with paragraph (b)
below, either (A) all of the shares of Series D Preferred Stock
owned by the Initial Holder on February 4, 1998 (or shares of
Series C Preferred Stock or Common Stock into which such shares
or any shares of Series D Preferred Stock shall have been
converted) and that the Initial Holder or such Section 4.8
Transferee, as the case may be, continues to own on the date of
delivery of the Exchange Notice (any such shares of Series D
Preferred Stock, Series C Preferred Stock or Common Stock being
referred to hereinafter collectively as Original Shares) or (B) a
number of Original Shares of Series D Preferred Stock, Series C
Preferred Stock and/or Common Stock, as the case may be, equal to
the product of (x) the number of Original Shares of Series D
Preferred Stock, Series C Preferred Stock and/or Common Stock, as
the case may be, then owned by each such holder, multiplied by
(y) a fraction, the numerator of which is equal to the number of
POPs in the Overlap Territory and the denominator of which is
equal to the total number of POPs in the Territory;
provided, that (x) if the Corporation exercises its right under
clause (i)(A) of this paragraph (a), it shall be required to
exercise its right under clause (ii)(A) of this paragraph (a),
and vice-versa; and if the Corporation exercises its right under
clause (i)(B) of this paragraph (a), it shall be required to exer
cise its right under clause (ii)(B) of this paragraph (a), and
vice-versa and (y) the provisions of this Section 4.8(a) shall
not apply to any Section 4.8 Transferee which is a Cash Equity
Investor (as such term is defined in the Stockholders Agreement).
(Shares of Series A Preferred Stock, and shares of Series D
Preferred Stock (and shares of Series C Preferred Stock or Common
Stock into which such shares shall have been converted) subject
to exchange pursuant to this Section 4.8 are hereinafter referred
to collectively as Exchange Shares.)
(2) Number of Shares of Series B Preferred Stock Issuable
in Exchange. The number of shares of Series B Preferred Stock
issuable in exchange for Original Shares pursuant to clause (ii)
of paragraph (a) above shall be equal to the quotient of the
aggregate purchase price paid by the Initial Holder for the
Original Shares being exchanged, divided by the Liquidation
Preference of the Series B Preferred Stock.
(3) Fractional Shares. Notwithstanding any other provision
of this Second Restated Certificate of Incorporation, the
Corporation shall not be required to issue fractions of shares
upon exchange of any Exchange Shares or to distribute
certificates which evidence fractional shares. In lieu of
fractional shares, the Corporation may pay therefor, at the time
of any exchange of Exchange Shares as herein provided, an amount
in cash equal to such fraction multiplied by the Market Price of
a share of Class A Common Stock on such date.
(4) Mechanics of Exchange. The Exchange Notice shall
specify the date fixed for the exchange (the Exchange Date),
which shall be at least ten (10) but no more than sixty (60) days
following delivery of the Exchange Notice, and the place
designated for exchange of the Exchange Shares pursuant to this
Section 4.8. Such notice will be sent by first class or
registered mail, postage prepaid, to the Initial Holder at such
holders address last shown on the records of the transfer agent
for the Series A Preferred Stock (or the records of the
Corporation if it serves as its own transfer agent). On or
before the Exchange Date, the Initial Holder shall surrender its
certificate or certificates for all of the Exchange Shares to the
Corporation at the place designated in such notice. If required
by the Corporation, certificates surrendered for exchange shall
be endorsed or accompanied by a written instrument or instruments
of transfer, in form satisfactory to the Corporation, duly
executed by the Initial Holder or its attorney duly authorized in
writing.
(5) Termination of Rights. On and after the Exchange Date
(whether or not the applicable certificates have theretofore been
surrendered), all rights with respect to the Exchange Shares,
including the rights, if any, to receive notices and to vote,
will terminate, except only the rights of the Initial Holder and
Section 4.8 Transferees to receive certificates for the number of
shares of Series B Preferred Stock into which such Exchange
Shares have been exchanged, upon surrender of its certificate or
certificates therefor, and payment of any declared but unpaid
dividends thereon (which shall accrue and be payable at the times
and on the other terms applicable to such dividends when
declared) and payment of any deferred dividends in respect of
shares of Series A Preferred Stock which shall be payable as set
forth in Section 4.3(b)(iii). Within ten (10) Business Days
after the Exchange Date, the Corporation shall issue and deliver
to the Initial Holder, or on its written order to its nominees, a
certificate or certificates for the number of whole shares of
Series B Preferred Stock issuable upon such exchange in
accordance with the provisions hereof, together with cash in lieu
of fractional shares calculated in accordance with paragraph (c)
of this Section 4.8.
(6) Reservation of Shares. The Corporation shall at all
times reserve and keep available for issuance upon the exchange
of Exchange Shares the maximum number of its authorized but
unissued shares of Series B Preferred Stock as is reasonably
anticipated to be sufficient to permit the exchange of all
outstanding Exchange Shares and shall take all action required to
increase the authorized number of shares of Series B Preferred
Stock if at any time there shall be insufficient authorized but
unissued shares of Series B Preferred Stock to permit such
reservation or to permit the exchange of all outstanding Exchange
Shares.
(7) Adjustments for Dividends. Upon any exchange of shares
of Series A Preferred Stock or Series D Preferred Stock, no
adjustment to the rate of conversion shall be made for accrued
and unpaid dividends (whether or not declared) on the shares of
Series A Preferred Stock or Series D Preferred Stock, as the case
may be, surrendered for exchange or on the shares of Series B
Preferred Stock delivered upon exchange.
(8) No Exchange Charge or Tax. The issuance and delivery
of certificates for shares of Series B Preferred Stock upon the
exchange of Exchange Shares shall be made without charge to the
Initial Holder for any issue or transfer tax, or other incidental
expense in respect of the issuance or delivery of such
certificates or the securities represented thereby, all of which
taxes and expenses shall be paid by the Corporation.
1.9 Redemption of Capital Stock. Notwithstanding any other
provision of this Second Restated Certificate of Incorporation to
the contrary, outstanding shares of capital stock of the
Corporation held by Disqualified Holders shall always be subject
to redemption by the Corporation, by action of the Board of
Directors, if, in the judgment of the Board of Directors, such
action should be taken, pursuant to Section 151(b) of the GCL or
any other applicable provision of law, to the extent necessary to
prevent the loss or secure the reinstatement of any license or
franchise from any governmental agency held by the Corporation or
any of its Subsidiaries to conduct any portion of the business of
the Corporation or any of its Subsidiaries, which license or
franchise is conditioned upon some or all of the holders of the
Corporations stock possessing prescribed qualifications. The
terms and conditions of such redemption shall be as follows:
(1) the redemption price of the shares to be redeemed
pursuant to this Section 4.9 shall be equal to the lesser of
(i) the Market Price or (ii) if such stock was purchased by such
Disqualified Holder within one year of the Section 4.9 Redemption
Date, such Disqualified Holders purchase price for such shares;
(2) the redemption price of such shares may be paid in
cash, Redemption Securities or any combination thereof;
(3) if less than all the shares held by Disqualified
Holders are to be redeemed, the shares to be redeemed shall be
selected in such manner as shall be determined by the Board of
Directors, which may include selection first of the most recently
purchased shares thereof, selection by lot or selection in any
other manner determined by the Board of Directors;
(4) at least thirty (30) days written notice of the Section
4.9 Redemption Date shall be given to the record holders of the
shares selected to be redeemed (unless waived in writing by any
such holder); provided, however, that only ten (10) days written
notice of the Redemption Date shall be given to record holders if
the cash or Redemption Securities necessary to effect the
redemption shall have been deposited in trust for the benefit of
such record holders and subject to immediate withdrawal by them
upon surrender of the stock certificates for their shares to be
redeemed; provided, further, that the record holders of the
shares selected to be redeemed may transfer such shares prior to
the Section 4.9 Redemption Date to any holder that is not a
Disqualified Holder and, thereafter, for so long as such shares
are not held by a Disqualified Holder, such shares shall not be
subject to redemption by the Corporation;
(5) from and after the Section 4.9 Redemption Date, any and
all rights of whatever nature (including without limitation any
rights to vote or participate in dividends declared on stock of
the same class or series as such shares) with respect to the
shares selected from redemption held by Disqualified Holders on
the Section 4.9 Redemption Date shall cease and terminate and
such Disqualified Holders thenceforth shall be entitled only to
receive the cash or Redemption Securities payable upon
redemption; and
(6) such other terms and conditions as the Board of
Directors shall determine.
1.10 Definitions. For the purposes of this Second Restated
Certificate of Incorporation, the following terms shall have the
meanings indicated:
Accreted Value shall mean, with respect to each share
of Series A Preferred Stock or Series B Preferred Stock, as of
any date, the sum of the Liquidation Preference, plus an amount
equal to all unpaid dividends thereon, including accrued
dividends whether or not declared, through such date.
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, the
term 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.
Appraiser has the meaning assigned to such term in
Section 4.3(l)(i).
Board of Directors has the meaning assigned to such
term in Section 4.2(a).
Business Day shall mean any day other than a Saturday,
Sunday or other day on which commercial banks in the City of New
York are authorized or required by law or executive order to
close.
Class A Common Stock has the meaning assigned to such
term in Section 4.1.
Class B Non-Voting Common Stock has the meaning
assigned to such term in Section 4.1.
Closing Price shall mean, with respect to each share of
any class or series of capital stock for any day, (i) the last
reported sale price regular way or, in case no such sale takes
place on such day, the average of the closing bid and asked
prices regular way, in either case as reported on the principal
national securities exchange on which such class or series of
capital stock is listed or admitted for trading or (ii) if such
class or series of capital stock is not listed or admitted for
trading on any national securities exchange, the last reported
sale price or, in case no such sale takes place on such day, the
average of the highest reported bid and the lowest reported asked
quotation for such class or series of capital stock, in either
case as reported on NASDAQ or a similar service if NASDAQ is no
longer reporting such information.
Common Stock has the meaning assigned to such term in
Section 4.1.
Disqualified Holder shall mean any holder of shares of
capital stock of the Corporation whose holding of such stock,
either individually or when taken together with the holding of
shares of capital stock of the Corporation by any other holders,
may result, in the judgment of the Board of Directors, in the
loss of, or the failure to secure the reinstatement of, any
license or franchise from any governmental agency held by the
Corporation or any of its Subsidiaries or Affiliates to conduct
any portion of the business of the Corporation or any of its
Subsidiaries or Affiliates.
Dividend Payment Date shall mean the last day of each
March, June, September and December, except that if any Dividend
Payment Date is not a Business Day, then the next succeeding
Business Day shall be the Dividend Payment Date.
Excluded Stock has the meaning assigned to such term in
Section 4.5(f)(vii).
Fully Diluted Basis shall mean, with respect to the
outstanding shares of Common Stock, the number of shares of
Common Stock outstanding assuming the conversion of all
outstanding convertible securities (other than the Series A
Preferred Stock) and the exercise of all outstanding warrants,
options or other rights to subscribe for or purchase any shares
of Common Stock.
Initial Class B Holder means J.P. Morgan Investment
Corporation or Sixty Wall Street SBIC Fund, L.P.
Initial Holder means AT&T Wireless PCS, LLC, a Delaware
limited liability company and successor to AT&T Wireless PCS
Inc., a Delaware corporation, and/or any of its Affiliates that
is a Subsidiary of AT&T Corp., a New York corporation.
IPO Date shall mean the first date on which (a) the
Class A Common Stock shall have been registered pursuant to an
effective Registration Statement under the Securities Act of
1933, as amended, (b) the aggregate gross proceeds received by
the Corporation in connection with such Registration Statement(s)
equals or exceeds $20 million, and (c) the Class A Common Stock
shall be listed for trading on the New York Stock Exchange or the
American Stock Exchange or authorized for trading on NASDAQ,
including, without limitation, its National Market System.
Junior Stock shall mean, with respect to shares of
Series A Preferred Stock or Series B Preferred Stock, any capital
stock of the Corporation, including, without limitation, the
Series C Preferred Stock, Series D Preferred Stock, Class A
Common Stock and Class B Non-Voting Common Stock, ranking junior
to the Series A Preferred Stock or Series B Preferred Stock, as
the case may be, with respect to dividends, distribution in
liquidation or any other preference, right or power.
Liquidation Preference shall mean, with respect to each
share of Preferred Stock, $100 and no more (subject to adjustment
for subdivisions or combinations affecting the number of shares
of the applicable class or series of Preferred Stock).
Market Price shall mean, with respect to each share of
any class or series of capital stock for any day, (i) the average
of the daily Closing Prices for the ten consecutive trading days
commencing fifteen (15) days before the day in question or
(ii) if on such date the shares of such class or series of
capital stock are not listed or admitted for trading on any
national securities exchange and are not quoted on NASDAQ or any
similar service, the cash amount that a willing buyer would pay a
willing seller (neither acting under compulsion) in an arms-
length transaction without time constraints per share of such
class or series of capital stock as of such date, viewing the
Corporation on a going concern basis, as determined (A) in the
case of a determination of Market Price for the purpose of
calculating the Series A Conversion Rate, pursuant to the terms
of Section 4.3(l) and (B) in the case of a determination of
Market Price for any other purpose, in good faith by the Board of
Directors, whose determination shall be conclusive; provided
that, in determining such cash amount, the following shall be
ignored: (i) any contract or legal limitation in respect of
shares of Common Stock or Preferred Stock, including transfer,
voting and other rights, (ii) the minority interest status of
shares of Class A Common Stock into which shares of Series A
Preferred Stock would be converted, and (iii) any illiquidity
arising by contract in respect of the shares of Common Stock and
any voting rights or control rights amongst the stockholders;
provided, further, however that the Market Price of a share of
Class B Non-Voting Common Stock shall at all times be deemed to
be equal to the Market Price of a share of Class A Common Stock.
NASDAQ shall mean the National Association of
Securities Dealers Automated Quotations System.
Parity Stock shall mean, with respect to shares of
Series A Preferred Stock or Series B Preferred Stock, any capital
stock of the Corporation ranking on a parity basis with the
Series A Preferred Stock or Series B Preferred Stock, as the case
may be, with respect to dividends, distribution in liquidation or
any other preference, right or power.
Person shall mean any individual, firm, corporation,
partnership, trust, incorporated or unincorporated association,
joint venture, joint stock company, governmental agency or
political subdivision thereof or other entity of any kind, and
shall include any successor (by merger or otherwise) of such
entity.
Preferred Stock has the meaning assigned to such term
in Section 4.1.
Qualified Transfer shall mean a sale, transfer or other
disposition of shares of Series A Preferred Stock to any
prospective transferee specified in a Qualified Transfer Notice,
other than a prospective transferee as to which the Corporation
disapproves in accordance with the terms of the second sentence
of Section 4.3(i)(xi), provided such sale, transfer or other
disposition is made pursuant to a binding agreement entered into
no later than one hundred eighty (180) days after the applicable
Qualified Transfer Notice is given.
Qualified Transferee shall mean, with respect to any
shares of Series A Preferred Stock, (i) any Cash Equity Investor
that acquired such shares pursuant to Section 4.2 of the
Stockholders Agreement or (ii) any other holder that acquired
such shares in a Qualified Transfer from an Initial Holder or
Qualified Transferee.
Qualified Transfer Notice has the meaning assigned to
such term in Section 4.3(i)(xi).
Redemption Securities shall mean any debt or equity
securities of the Corporation, any of its Subsidiaries or
Affiliates or any other corporation, or any combination thereof,
having such terms and conditions as shall be approved by the
Board of Directors and which, together with any cash to be paid
as part of the redemption price payable pursuant to Section 4.9,
in the opinion of any nationally recognized investment banking
firm selected by the Board of Directors (which may be a firm
which provides investment banking, brokerage or other services to
the Corporation), has a value at the time notice of redemption is
given pursuant to Section 4.9(d) at least equal to the price
required to be paid pursuant to Section 4.9(a) (assuming, in the
case of Redemption Securities to be publicly traded, that such
Redemption Securities were fully distributed and subject only to
normal trading activity).
Section 4.8 Transferee shall mean any transferee of
shares of Series A Preferred Stock or Series D Preferred Stock
issued to the Initial Holder on February 4, 1998 (or any shares
of Series C Preferred Stock or Class A Common Stock into which
any such shares are converted) that are acquired in a private
transaction.
Section 4.9 Redemption Date shall mean the date fixed
by the Board of Directors for the redemption of any shares of
stock of the Corporation pursuant to Section 4.9.
Senior Stock shall mean, with respect to shares of
Series A Preferred Stock or Series B Preferred Stock, as the case
may be, any capital stock of the Corporation ranking senior to
the Series A Preferred Stock or the Series B Preferred Stock, as
the case may be, with respect to dividends, distribution in
liquidation or any other preference, right or power.
Series A Conversion Date has the meaning assigned to
such term in Section 4.3(i)(vi).
Series A Conversion Rate shall mean, as of any date of
determination, a fraction in which the numerator is the Accreted
Value of one share of Series A Preferred Stock as of such date,
and the denominator is the Market Price of one share of Class A
Common Stock as of such date.
Series A Preferred Stock has the meaning assigned to
such term in Section 4.1.
Series A Redemption Price has the meaning assigned to
such term in Section 4.3(e)(i).
Series B Preferred Stock has the meaning assigned to
such term in Section 4.1.
Series C Preferred Stock has the meaning assigned to
such term in Section 4.1.
Series D Preferred Stock has the meaning assigned to
such term in Section 4.1.
Statutory Liquidation shall mean the liquidation of the
Corporation pursuant to Section 275 of the GCL.
Stockholders Agreement means the Stockholders
Agreement, dated as of February 4, 1998, by and among the Corpora
tion, the Initial Holder and the other stockholders of the
Corporation named therein, as the same may be amended, modified
or supplemented in accordance with the terms thereof, a copy of
which is available for inspection by any stockholder at the
principal executive offices of the Corporation.
Subsidiary shall mean, with respect to any Person, a
corporation or other entity of which 50% or more of the voting
power of the voting equity securities or equity interest is
owned, directly or indirectly, by such Person.
ARTICLE V
1.11 Number, Election and Terms of Directors. The number
of Directors of the Corporation will be fixed from time to time
in the manner provided in the Bylaws of the Corporation (the
Bylaws). The Directors will be classified with respect to the
time for which they severally hold office into three classes, as
nearly equal in number as possible, designated Class I, Class II
and Class III. The Directors first appointed to Class I will
hold office for a term expiring at the annual meeting of
stockholders to be held in 2000, the Directors first appointed to
Class II will hold office for a term expiring at the annual
meeting of stockholders to be held in 2001, and the Directors
first appointed to Class III will hold office for a term expiring
at the annual meeting of stockholders to be held in 2002, with
the members of each class to hold office until their successors
are elected and qualified. At each annual meeting of the
stockholders of the Corporation, the successors to the class of
Directors whose term expires at that meeting will be elected by
plurality vote of all votes cast at such meeting to hold office
for a term expiring at the annual meeting of stockholders held in
the third year following the year of their election. Election of
Directors of the Corporation need not be by written ballot.
1.12 Removal of Directors. Subject to the provisions of
Section 5.4, any Director may be removed at any time but only for
cause and only upon the affirmative vote of the holders of a
majority of the outstanding shares of stock of the Corporation
entitled to vote for the election of such Director, voting
together as a single class, cast at an annual meeting or at a
special meeting of stockholders called for that purpose, or by
written consent. Subject to the provisions of Section 5.4, any
vacancy in the Board of Directors caused by any such removal may
be filled at such meeting or by written consent, by the
stockholders entitled to vote for the election of the Director so
removed. Subject to the provisions of Section 5.4, if such
stockholders do not fill such vacancy at such meeting or by
written consent, such vacancy may be filled in the manner
provided in Section 5.3.
1.13 Vacancies and Newly Created Directorships. Subject
to the provisions of Section 5.4, if any vacancies shall occur in
the Board of Directors by reason of death, resignation, removal
or otherwise, or if the authorized number of Directors shall be
increased, the Directors then in office shall continue to act,
and such vacancies and newly created directorships may be filled
by a majority of the Directors then in office, although less than
a quorum, or by a sole remaining Director. Any Director elected
to fill a vacancy or a newly created directorship in accordance
with the preceding sentence shall hold office for the remainder
of the full term of the class of Directors in which the new
directorship was created or the vacancy occurred and until his or
her successor has been elected and qualified or until his or her
earlier death, resignation or removal. No decrease in the number
of Directors constituting the Board may shorten the term of any
incumbent Director.
1.14 Additional Rights of Certain Stockholders Regarding
Directors. Notwithstanding anything to the contrary contained in
this Article V, so long as the holders of the Series A Preferred
Stock shall have the right to nominate one of the Class II
directors of the Corporation pursuant to Section 4.3(d)(iii) of
this Second Restated Certificate of Incorporation, or the Cash
Equity Investors shall have the right to nominate one of the
Class I directors and one of the Class III directors of the
Corporation pursuant to Section 3.1(a) of the Stockholders
Agreement, the holders of the Series A Preferred Stock (solely in
the case of any such Class II director elected to the Board of
Directors) and the Cash Equity Investors (solely in the case of
such Class I director and Class III director elected to the Board
of Directors) shall have the right to cause the Corporation to
remove any such director, with or without cause, and to replace
any such director (whether or not such director resigns, is
removed from the Board of Directors with or without cause or
ceases to be a director by reason of death, disability or for any
other reason). In the event of any such replacement, the holders
of the Series A Preferred Stock (solely in the case of any such
Class II director being replaced) and the Cash Equity Investors
(solely in the case of any such Class I director or Class III
director being replaced) shall deliver a written notice to the
Corporation and the other members of the Board of Directors
setting forth the name of the director being replaced and the
name of the replacement director. Upon its receipt of such
notice, the Corporation shall cause to be elected for the
remainder of the term of any director so replaced the person
designated as the replacement director in such notice.
ARTICLE VI
Subject to the separate class vote requirements
relating to any class or series of Preferred Stock, the holders
of shares of Series C Preferred Stock and Class A Common Stock
representing at least two-thirds (2/3) of the votes entitled to
be cast for the election of directors of the Corporation, voting
together as a single class, in person or by proxy, at a special
or annual meeting of stockholders called for the purpose, or by
written consent, may amend, alter or repeal this Second Restated
Certificate of Incorporation or the Bylaws.
ARTICLE VII
1.15 Indemnification. Any individual who was or is a party
or is threatened to be made a party to any threatened, pending,
or completed action, suit, or proceeding (a Proceeding), whether
civil, criminal, administrative, or investigative (whether or not
by or in the right of the Corporation), by reason of the fact
that such individual, or an individual of whom such individual is
the legal representative, is or was a director, officer,
incorporator, employee, or agent of the Corporation, or is or was
serving at the request of the Corporation as a director, officer,
incorporator, employee, partner, trustee, or agent of another
corporation, partnership, joint venture, trust, employee benefit
plan or other enterprise (an Other Entity), shall be indemnified
by the Corporation to the full extent then permitted by law
against expenses (including counsel fees and disbursements),
judgments, fines (including excise taxes assessed on an
individual with respect to an employee benefit plan), and amounts
paid in settlement incurred by him or her in connection with such
Proceeding. Any other individual may be similarly indemnified in
respect of service to the Corporation or to an Other Entity at
the request of the Corporation to the extent the Board of
Directors at any time specifies that any such individual is
entitled to the benefits of this Article VII.
1.16 Advancement of Expenses. The Corporation shall, from
time to time, reimburse or advance to any Director or officer or
such other individual entitled to indemnification hereunder the
funds necessary for payment of expenses, including attorneys fees
and disbursements, incurred in connection with any Proceeding, in
advance of the final disposition of such Proceeding; provided,
however, that, if (and only if) required by the GCL, such
expenses incurred by or on behalf of any Director or officer or
other individual may be paid in advance of the final disposition
of a Proceeding only upon receipt by the Corporation of an
undertaking, by or on behalf of such Director or officer (or
other individual indemnified hereunder), to repay any such amount
so advanced if it shall ultimately be determined by final
judicial decision from which there is no further right of appeal
that such Director, officer or other individual is not entitled
to be indemnified for such expenses.
1.17 Rights Not Exclusive. The rights to indemnification
and reimbursement or advancement of expenses provided by, or
granted pursuant to, this Article VII shall not be deemed
exclusive of any other rights to which an individual seeking
indemnification or reimbursement or advancement of expenses may
have or hereafter be entitled under any statute, this Second
Restated Certificate of Incorporation, the Bylaws, any agreement,
any vote of stockholders or disinterested Directors or otherwise,
both as to action in his or her official capacity and as to
action in another capacity while holding such office.
1.18 Continuing Rights. The rights to indemnification and
reimbursement or advancement of expenses provided by, or granted
pursuant to, this Article VII shall continue as to an individual
who has ceased to be a Director or officer (or other individual
indemnified hereunder), shall inure to the benefit of the
executors, administrators, legatees and distributees of such
individual, and in either case, shall inure whether or not the
claim asserted is based on matters which antedate the adoption of
this Article VII.
1.19 Insurance. The Corporation shall have power to
purchase and maintain insurance on behalf of any individual who
is or was a Director, officer, employee or agent of the
Corporation, or is or was serving at the request of the
Corporation, as a director, officer, employee or agent of an
Other Entity, against any liability asserted against such
individual and incurred by such individual in any such capacity,
or arising out of such individuals status as such, whether or not
the Corporation would have the power to indemnify such individual
against such liability under the provisions of this Article VII,
the Bylaws or under Section 145 of the GCL or any other provision
of law.
1.20 Contract Rights; No Repeal. The provisions of this
Article VII shall be a contract between the Corporation, on the
one hand, and each Director and officer who serves in such
capacity at any time while this Article VII is in effect and any
other individual indemnified hereunder, on the other hand,
pursuant to which the Corporation and each such Director,
officer, or other individual intend to be legally bound. No
repeal or modification of this Article VII shall affect any
rights or obligations with respect to any state of facts then or,
heretofore or thereafter brought or threatened based in whole or
in part upon any such state of facts.
1.21 Enforceability; Burden of Proof. The rights to
indemnification and reimbursement or advancement of expenses
provided by, or granted pursuant to, this Article VII shall be
enforceable by any individual entitled to such indemnification or
reimbursement or advancement of expenses in any court of
competent jurisdiction. The burden of proving that such
indemnification or reimbursement or advancement of expenses is
inappropriate shall be on the Corporation. Neither the failure
of the Corporation (including its Board of Directors, its
independent legal counsel and its stockholders) to have made a
determination prior to the commencement of such action that such
indemnification or reimbursement or advancement of expenses is
proper in the circumstances nor an actual determination by the
Corporation (including its Board of Directors, its independent
legal counsel and its stockholders) that such individual is not
entitled to such indemnification or reimbursement or advancement
of expenses shall constitute a defense to the action or create a
presumption that such individual is not so entitled. Such an
individual shall also be indemnified for any expenses incurred in
connection with successfully establishing his or her right to
such indemnification or reimbursement or advancement of expenses,
in whole or in part, in any such Proceeding.
1.22 Service at the Request of the Corporation.
Any Director or officer of the Corporation serving in any
capacity in (a) another corporation of which a majority of the
shares entitled to vote in the election of its directors is held,
directly or indirectly, by the Corporation or (b) any employee
benefit plan of the Corporation or any corporation referred to in
clause (a) shall be deemed to be doing so at the request of the
Corporation.
1.23 Right to Be Covered by Applicable Law. Any individual
entitled to be indemnified or to reimbursement or advancement of
expenses as a matter of right pursuant to this Article VII may
elect to have the right to indemnification or reimbursement or
advancement of expenses interpreted on the basis of the
applicable law in effect at the time of the occurrence of the
event or events giving rise to the applicable Proceeding, to the
extent permitted by law, or on the basis of the applicable law in
effect at the time such indemnification or reimbursement or
advancement of expenses is sought. Such election shall be made,
by a notice in writing to the Corporation, at the time
indemnification or reimbursement or advancement of expenses is
sought; provided, however, that if no such notice is given, the
right to indemnification or reimbursement or advancement of
expenses shall be determined by the law in effect at the time
indemnification or reimbursement or advancement of expenses is
sought.
ARTICLE VIII
No Director of the Corporation shall be liable to the
Corporation or any of its stockholders for monetary damages for
breach of fiduciary duty as a Director, provided that this
provision does not eliminate the liability of the Director (i)
for any breach of the Directors duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the GCL or
(iv) for any transaction from which the Director derived an
improper personal benefit. For purposes of the prior sentence,
the term damages shall, to the extent permitted by law, include
without limitation, any judgment, fine, amount paid in
settlement, penalty, punitive damages, excise or other tax
assessed with respect to an employee benefit plan, or expense of
any nature (including, without limitation, counsel fees and
disbursements). Each individual who serves as a Director of the
Corporation while this Article VIII is in effect shall be deemed
to be doing so in reliance on the provisions of this Article
VIII, and neither the amendment or repeal of this Article VIII,
nor the adoption of any provision of this Second Restated
Certificate of Incorporation inconsistent with this Article VIII,
shall apply to or have any effect on the liability or alleged
liability of any Director of the Corporation for, arising out of,
based upon, or in connection with any acts or omissions of such
Director occurring prior to such amendment, repeal, or adoption
of an inconsistent provision. The provisions of this Article
VIII are cumulative and shall be in addition to and independent
of any and all other limitations on or eliminations of the
liabilities of Directors of the Corporation, as such, whether
such limitations or eliminations arise under or are created by
any law, rule, regulation, bylaw, agreement, vote of stockholders
or disinterested Directors, or otherwise.
[Signature page follows]
[Signature page to Second Restated Certificate of Incorporation]
IN WITNESS WHEREOF, the undersigned officer of the
Corporation has executed this Second Restated Certificate of
Incorporation this 27th day of October, 1999.
TRITON PCS HOLDINGS, INC.
_______________________________________
Name: David D. Clark
Title: Senior Vice President and CFO
=================================================================
FIRST AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
by and among
AT&T WIRELESS PCS LLC,
CASH EQUITY INVESTORS,
MANAGEMENT STOCKHOLDERS,
INDEPENDENT DIRECTORS
and
TRITON PCS HOLDINGS, INC.
dated as of October 27, 1999
=================================================================
TABLE OF CONTENTS
Page
1. Certain Definitions 2
2. Restated Certificate and Restated Bylaws 14
3. Management of Company 14
3.1 Board of Directors 14
3.2 [Intentionally Omitted] 15
3.3 [Intentionally Omitted] 15
3.4 [Intentionally Omitted] 15
3.5 [Intentionally Omitted] 15
3.6 [Intentionally Omitted] 15
3.7 Transactions between the Company and the
Stockholders or their Affiliates 16
3.8 Executive Committee 16
3.9 Voting Agreements and Voting Trusts 16
3.10 Additional Capital Contributions 16
3.11 Series A Preferred Director 16
4. Transfers of Shares 17
4.1 General 17
4.2 Right of First Offer 18
4.3 Rights of Inclusion 19
4.4 Right of First Negotiation 22
4.5 Additional Conditions to Permitted Transfers 23
4.6 Representations and Warranties 23
4.7 Stop Transfer 23
5. Registration Rights 24
6. Disqualifying Transactions 37
6.1 Company Conversion Rights 37
6.2 Joint Marketing Right 38
7. Additional Rights and Covenants 39
7.1 [Intentionally Omitted] 39
7.2 [Intentionally Omitted] 39
7.3 Access. 39
7.4 Merger, Sale or Liquidation of the Company. 40
7.5 Wholly-Owned Subsidiaries 41
7.6 [Intentionally Omitted] 41
7.7 Confidentiality 41
7.8 [Intentionally Omitted] 42
7.9 AT&T PCS Retained Licenses 42
7.10 Regulatory Cooperation 42
7.11 Permitted Transactions 42
8. Operating Arrangements 43
8.1 Construction of Company Systems 43
8.2 Service Features 44
8.3 Quality Standards 44
8.4 No Change of Business 44
8.5 Preferred Provider 45
8.6 Exclusivity 45
8.7 Other Business; Duties; Etc 47
8.8 Acknowledgments and Termination of Exclusivity 47
8.9 Equipment, Discounts and Roaming 48
8.10 ANS Agreement 48
8.11 Resale Agreements 49
8.12 Non-Solicitation 49
8.13 Co-Location 50
9. After-Acquired Shares; Recapitalization 50
9.1 After Acquired Shares; Recapitalization 50
9.2 Amendment of Restated Certificate 50
10. Share Certificates 51
10.1 Restrictive Endorsements; Replacement Certificates 51
10.2 Lost or Destroyed Certificates 51
11. Equitable Relief 52
12. Miscellaneous 52
12.1 Notices. 52
12.2 Entire Agreement; Amendment; Consents 54
12.3 Term 54
12.4 Survival 55
12.5 Waiver. 55
12.6 Obligations Several 56
12.7 Governing Law. 56
12.8 Dispute Resolution 56
12.9 Benefit and Binding Effect; Severability 59
12.10 Amendment of Bylaws 59
12.11 Authorized Agent of AT&T PCS 59
12.12 FCC Approval 59
12.13 Expenses 60
12.14 Attorneys Fees 60
12.15 Headings 60
12.16 Counterparts 60
LIST OF SCHEDULES AND EXHIBITS
Schedules
Schedule I Cash Equity Investors
Schedule II Management Stockholders and Independent Directors
Schedule III Stockholders
Schedule IV Core Service Features
Schedule V Minimum Build-Out Plan
Schedule VI PCS Territory
Schedule VII TDMA Quality Standards
Schedule VIII [Intentionally Omitted]
Schedule IX Capital Budgets
Exhibits
Exhibit A Restated Bylaws
Exhibit B Restated Certificate
Exhibit C Form of Advanced Network Services Agreement
Exhibit D Form of Resale Agreement
FIRST AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
FIRST AMENDED AND RESTATED STOCKHOLDERS AGREEMENT, dated as
of October 27, 1999 (this Agreement), by and among AT&T WIRELESS
PCS LLC, a Delaware limited liability company and successor to
AT&T Wireless PCS Inc., a Delaware corporation (together with its
Affiliated Successors, AT&T PCS), the investors listed on
Schedule I (individually, each a Cash Equity Investor and,
collectively, with any of its Affiliated Successors, the Cash
Equity Investors), the individuals listed on Schedule II
(individually, each a Management Stockholder and, collectively,
the Management Stockholders), the individuals listed on Schedule
II (individually, an Independent Director and collectively, the
Independent Directors), and Triton PCS Holdings, Inc., a Delaware
corporation (the Company). Each of the foregoing Persons,
together with all other Persons who, in connection with a
Transfer (as hereinafter defined) are required to become a party
to this Agreement (other than the Company) are sometimes referred
to herein, individually, as a Stockholder and, collectively, as
the Stockholders.
RECITALS
WHEREAS, the Company and the Stockholders are parties to
that certain Stockholders Agreement dated as of February 4, 1998,
as amended (as so amended, the Original Stockholders Agreement);
WHEREAS, the Company is anticipated to consummate in the
near future an initial public offering (IPO) of 10,000,000 (plus,
if the underwriters of the IPO exercise the over-allotment option
granted to them by the Company, up to an additional 1,500,000)
shares of its Class A Common Stock (as hereinafter defined);
WHEREAS, the total number of authorized shares of all
classes of stock (Company Stock) that the Company has the
authority to issue is 650,000,000, consisting of (a) 70,000,000
shares of preferred stock, par value $0.01 per share (the
Preferred Stock), of which (i) 1,000,000 shares are designated
Series A Convertible Preferred Stock (the Series A Preferred
Stock), (ii) 50,000,000 shares are designated Series B Preferred
Stock (the Series B Preferred Stock), (iii) 3,000,000 shares are
designated Series C Convertible Preferred Stock (the Series C
Preferred Stock), and (iv) 16,000,000 shares are designated
Series D Convertible Preferred Stock (the Series D Preferred
Stock) and (b) 580,000,000 shares of common stock, par value
$0.01 per share (the Common Stock), of which (i) 520,000,000
shares are designated Class A Common Stock (the Class A Common
Stock), and (ii) 60,000,000 shares are designated Class B Non-
Voting Common Stock (the Class B Non-Voting Common Stock);
WHEREAS, upon consummation of the IPO each Stockholder will
be the registered owner of the respective shares of Company Stock
set forth opposite its name on Schedule III;
WHEREAS, the parties desire to enter into this Agreement in
order to (a) amend and restate as hereinafter set forth the
Original Stockholders Agreement, (b) to enter into certain
agreements regarding the management of the Company and (c) to
impose certain restrictions with respect to the sale, transfer or
other disposition of Company Stock on the terms and conditions
hereinafter set forth; and
NOW, THEREFORE, in consideration of the premises and the
mutual representations, warranties, covenants, conditions and
agreements hereinafter set forth, the parties agree as follows:
1. Certain Definitions.
Act shall have the meaning set forth in Section 10.1(a).
Adopted Service Features shall mean the Core Service
Features and additional service features that are adopted by the
Companys PCS Systems in accordance with the terms of Section 8.2.
Advice shall have the meaning set forth in Section
5(d)(xvii).
Affiliate shall mean, with respect to any Person other than
a natural person, any other Person that, either directly or
indirectly through one or more intermediaries, controls, or is
controlled by or is under common control with such Person and,
with respect to any natural Person, any trust for the exclusive
benefit of such natural Person and/or any member of such natural
Persons Immediate Family in which such Person is the sole trustee
thereof; provided, however, for purposes of Section 8.6,
Affiliate shall not include (x) Persons who conduct business in
the Territory in whom a Cash Equity Investor or any of their
respective Affiliates had made an investment or held securities
on February 4, 1998 in the ordinary course of their business, or
any such Person who conducts business in the Territory in whom a
Cash Equity Investor or any of their respective Affiliates made
an investment after February 4, 1998 or makes an investment after
the date hereof if such Cash Equity Investor or Affiliate thereof
controls such Person on a temporary basis where reasonably
necessary to protect its investment, or any Person who serves as
an officer, director or is a partner of any such Person who is
affiliated with a Cash Equity Investor, or (y) The Chase
Manhattan Bank, The Toronto Dominion Bank, Morgan Guaranty Trust
Company of New York and First Union Corporation. As used in this
Agreement, control, controlled or controlling shall mean
possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract
or otherwise.
Affiliated Successor shall mean, with respect to any Person,
an Affiliate thereof that is a transferee or a successor in
interest to any or all of such Persons Company Stock and that is
required to become a party to this Agreement in accordance with
the terms hereof; provided, however, that, for purposes of
Section 4, with respect to any Cash Equity Investor, Affiliated
Successor shall also include partners, limited partners or
members of a Cash Equity Investor that are transferees of Company
Stock pursuant to distributions in accordance with the
partnership agreement or operating agreement of such Cash Equity
Investor.
Agreement shall have the meaning set forth in the preamble.
Arbitration Rules shall have the meaning set forth in
Section 12.8(d).
AT&T Licensee shall mean any Person that owns FCC licenses
to provide Commercial Mobile Radio Service, which Person is
authorized to provide any such services using the phrase Member,
AT&T Wireless Services Network or other service marks of AT&T
Corp.
AT&T PCS shall have the meaning set forth in the preamble.
AT&T PCS Contributed Licenses shall mean, collectively, (i)
the License(s) defined as the AT&T PCS Contributed Licenses in
the Securities Purchase Agreement (other than the License(s)
defined as the Cumberland/Hagerstown Exchanged License in the
License Exchange and Acquisition Agreement), (ii) the License(s)
defined as the AT&T PCS Contributed License in the Norfolk
Purchase Agreement, and (iii) the License(s) defined as the AT&T
PCS Transferred License in the License Exchange and Acquisition
Agreement.
AT&T PCS Retained Licenses shall mean, collectively, (i) the
License(s) defined as the AT&T PCS Retained Licenses in the
Securities Purchase Agreement, (ii) the License(s) defined as the
AT&T PCS Retained License in the Norfolk Purchase Agreement, and
(iii) the Licenses defined as the Cumberland/Hagerstown License
and the AT&T PCS Retained License in the License Exchange and
Acquisition Agreement.
AWS shall mean AT&T Wireless Services, Inc., a Delaware
corporation.
Beneficially Own shall have the meaning set forth in Rule
13d-3 of the Exchange Act.
Board of Directors shall mean the Board of Directors of the
Company.
BTA shall mean a geographic area established by the Rand
McNally 1992 Commercial Atlas & Marketing Guide, 123rd Edition,
pp. 3839, as modified by the FCC to form the initial geographic
area of license for the C, D, E and F blocks of broadband PCS
spectrum as defined in Section 24.202 of the FCCs rules.
Business shall mean the business of (a) owning,
constructing and operating systems to provide Company
Communications Services on frequencies licensed to the Company
for Commercial Mobile Radio Services pursuant to the Licenses as
described on Schedule XII; (b) providing to end-users and
resellers, solely within the Territory, Company Communications
Services available on such systems, (c) providing in connection
with such Company Communications Services, solely within the
Territory, the Adopted Service Features and (subject to the
immediately following sentence) telecommunications services
incidental or ancillary to such Company Communications Services
(including, by way of example, bundling additional
telecommunications services with Company Communications
Services), and (d) marketing and offering the services and
features described in clauses (b) and (c) within the Territory,
including advertising such services and features using broadcast
and other media, so long as such advertising extends beyond the
Territory only when and to the extent necessary to reach
customers and potential customers in the Territory. The
activities described in clauses (a) and (b) shall be the
indispensable requisite, and primary business, of the Company
and, to the extent the Company provides telecommunications
services incidental or ancillary thereto, the Company and its
Subsidiaries shall be only the agent or reseller for the provider
thereof and shall not own or lease the facilities used to provide
such services, except that (i) the Company may own or lease
facilities that, in the aggregate, do not have a purchase price
to the Company and its Subsidiaries in excess of $10 million, and
the Company may be a facilities based provider of services using
such facilities, and (ii) after completion of the Minimum Build
Out Plan and certification that Company Systems meet the TDMA
Quality Standards, the amount of $10 million set forth in clause
(i) hereof shall be increased to $100 million.
Cash Equity Investors shall have the meaning set forth in
the preamble.
Cellular System shall mean a cellular mobile radio telephone
system constructed and operated in a metropolitan statistical
area as defined by the FCC or a rural service area as defined by
the FCC (or any successor territorial designation or subdivision
thereof authorized by the FCC) exclusively using the 824 MHZ to
894 MHZ frequencies pursuant to a License therefor issued by the
FCC.
Cellular Territory shall mean the geographic area in respect
of which the Company acquires Permitted Cellular Licenses.
Class A Common Stock shall have the meaning set forth in the
third recital.
Class B Non-Voting Common Stock shall have the meaning set
forth in the third recital.
Closing Agreement shall have the meaning set forth in
Section 12.2(a).
Commission shall mean the Securities and Exchange Commission
or any other federal agency at the time administering the
Securities Act.
Common Stock shall have the meaning set forth in the third
recital.
Company shall have the meaning set forth in the preamble.
Company Asset Sale shall have the meaning set forth in
Section 7.4(a).
Company Communications Services shall mean mobile wireless
telecommunications services (including the transmission of voice,
data, image or other messages or content) provided solely within
the Territory, initiated or terminated using TDMA and frequencies
licensed by the FCC, to or from subscriber equipment that is
capable of usage during routine movement throughout the area
covered by a cell site and routine handing off between cell
sites, and is either intended for such usage or is temporarily
fixed to a specific location on a short term basis (e.g., a bank
of wireless telephones temporarily installed during a special
event of limited duration). Without limiting the foregoing,
Company Communications Services shall include wireless office
services if such services comply with this definition. Company
Communications Services shall also include the transmissions
between the Companys cell sites and the Companys switch or
switches in the Territory, handing off transmissions at the
Companys switch or switches for termination by other carriers,
and receiving transmissions to the Companys customers handed off
at the Companys switch or switches, in each case for the purpose
of facilitating Company Communications Services described in the
first sentence.
Company Merger shall have the meaning set forth in Section
7.4(a).
Company Sale Notice shall have the meaning set forth in
Section 6.2(a).
Company Stock shall have the meaning set forth in the third
recital.
Company Systems shall mean the systems owned and operated by
the Company to provide Company Communications Services in the
Territory.
Confidential Information shall have the meaning assigned to
such term in Section 7.7(a).
Core Service Features shall mean the service features set
forth on Schedule IV.
CPR shall have the meaning set forth in Section 12.8(c).
Demand Notice shall have the meaning set forth in Section
5(a)(i).
Demand Registration shall have the meaning set forth in
Section 5(a)(i).
Demanding Stockholder shall have the meaning set forth in
Section 5(a)(i).
Desai shall mean Private Equity Investors III, L.P. and
Equity-Linked Investors-II.
Dispute shall have the meaning set forth in Section 12.8(a).
Disqualifying Transaction shall mean a merger,
consolidation, asset acquisition or disposition, or other
business combination involving AT&T Corp. (or its Affiliates)
and another Person, which other Person (together with its
Affiliates) (a) derives from telecommunications businesses annual
revenues in excess of five billion dollars (based on its most
recently ended fiscal year), (b) derives less than one third of
its aggregate revenues from the provision of wireless
telecommunications (based on its most recently ended fiscal year
for which such information is available), (c) owns FCC Licenses
to offer (and does offer) mobile wireless telecommunications
services serving more than 25% of the POPs within the Territory,
and (d) with respect to which AT&T PCS has given written notice
to the Company and the other Stockholders specifying that such
merger, consolidation, asset acquisition or disposition or other
business combination shall be a Disqualifying Transaction for
purposes of this Agreement and the transactions contemplated
hereby.
Employment Agreements shall mean the Employment Agreements
dated as of February 4, 1998 between Triton Management Company,
Inc., a wholly-owned Subsidiary of the Company, and each of
Michael E. Kalogris and Steven R. Skinner, as the same may be
amended, modified or supplemented in accordance with the terms
thereof.
Equity Securities shall mean shares of any class or series
of common stock or preferred stock, or options, rights, warrants,
conversion rights or appreciation rights relating thereto, or any
other type of equity security of the Company.
Exchange Act shall mean the Securities Exchange Act of 1934,
as amended.
FAA shall have the meaning set forth in Section 12.8(e).
FCC shall mean the Federal Communications Commission or
similar regulatory authority established in replacement thereof.
Federal Arbitration Act shall have the meaning set forth in
Section 12.8(e).
Final Order shall mean an action or decision that has been
granted by the FCC as to which (i) no request for a stay or
similar request is pending, no stay is in effect, the action or
decision has not been vacated, reversed, set aside, annulled or
suspended and any deadline for filing such request that may be
designated by statute or regulation has passed, (ii) no petition
for rehearing or reconsideration or application for review is
pending and the time for the filing of any such petition or
application has passed, (iii) the FCC does not have the action or
decision under reconsideration on its own motion and the time
within which it may effect such reconsideration has passed, and
(iv) no appeal is pending including other administrative or
judicial review, or in effect and any deadline for filing any
such appeal that may be designated by statute or rule has passed.
First Offer shall have the meaning set forth in Section 4.2(a).
First Offer Period shall have the meaning set forth in Section 4.2(b).
First Offeree shall have the meaning set forth in Section 4.2(a).
Governmental Authority means a Federal, state or local
court, legislature, governmental agency (including, without
limitation, the United States Department of Justice), commission
or regulatory or administrative authority or instrumentality.
Immediate Family shall mean an individuals spouse, children
(including adopted children), grandchildren, parents,
grandparents, and siblings.
Inclusion Event shall have the meaning set forth in Section 4.3(a).
Inclusion Event Offeree shall have the meaning set forth in
Section 4.3(a).
Inclusion Event Purchaser shall have the meaning set forth
in Section 4.3(a).
Inclusion Notice shall have the meaning set forth in Section 4.3(a).
Inclusion Stock shall have the meaning set forth in Section 4.3(a).
Indemnified Party shall have the meaning set forth in Section 5(e)(v).
Indemnified Stockholder shall have the meaning set forth in
Section 5(e)(i).
Indemnifying Party shall have the meaning set forth in Section 5(e)(v).
Independent Director shall have the meaning set forth in thepreamble.
IPO shall have the meaning set forth in the second recital.
IPO Date shall mean, in connection with the IPO, the first
date on which (a) the Class A Common Stock shall have been
registered pursuant to an effective Registration Statement under
the Securities Act, (b) the aggregate gross proceeds received by
the Company in connection with such Registration Statement(s)
equals or exceeds $20 million, and (c) the Class A Common Stock
shall be listed for trading on the New York Stock Exchange or the
American Stock Exchange or authorized for trading on NASDAQ,
including without limitation its National Market System.
Joint Marketing Period shall have the meaning set forth in
Section 6.2(a).
JPMI shall have the meaning set forth in Section 3.1(d).
J.P. Morgan shall have the meaning set forth in Section 3.1(d).
Law shall mean applicable common law and any statute,
ordinance, code or other law, rule, permit, permit condition,
regulation, order, decree, technical or other standard,
requirement or procedure enacted, adopted, promulgated, applied
or followed by any Governmental Authority.
License shall mean a license, permit, certificate of
authority, waiver, approval, certificate of public convenience
and necessity, registration or other authorization, consent or
clearance to construct or operate a facility, including any
emissions, discharges or releases therefrom, or to transact an
activity or business, to construct a tower or to use an asset or
process, in each case issued or granted by a Governmental
Authority.
License Exchange and Acquisition Agreement shall mean the
License Exchange and Acquisition Agreement among the Company,
Triton PCS License Company L.L.C., and AT&T PCS, dated as of June
8, 1999, as the same may be amended, modified or supplemented in
accordance with the terms thereof.
Liens shall mean, with respect to any asset, any mortgage,
lien, pledge, charge, security interest, right of first refusal
or right of others therein or encumbrance of any nature
whatsoever in respect of such asset.
Management Stockholder shall have the meaning set forth in
the preamble.
Majority in Interest shall mean, with respect to the Cash
Equity Investors, Persons that Beneficially Own, in the aggregate
more than 50% of the aggregate number of shares of Common Stock
Beneficially Owned by all such Persons.
Majority of the Southeast Region shall mean PCS Systems and
Cellular Systems owned by AT&T PCS and its Affiliates covering a
majority of the POPs in all such PCS Systems and Cellular Systems
in the Southeast Region.
Majority of the United States shall mean PCS Systems and
Cellular Systems owned by AT&T PCS and its Affiliates covering a
majority of the POPs in all such PCS Systems and Cellular Systems
in the United States.
Minimum Build-Out Plan shall mean the build-out plan for the
Companys PCS Systems set forth on Schedule V hereto.
Model Procedures shall have the meaning set forth in Section 12.8(c).
MTA shall mean a geographic area established by the Rand
McNally 1992 Commercial Atlas & Marketing Guide, 123rd Edition,
pp. 3839, as modified by the FCC to form the initial geographic
area of license for the A and B blocks of broadband PCS spectrum
as defined in Section 24.202 of the FCCs rules.
NASD shall mean the National Association of Securities Dealers, Inc.
NASDAQ shall mean the National Association of Securities
Dealers Automated Quotation System.
Network Membership License Agreement shall mean the Network
Membership License Agreement between Triton Operating and AT&T
Corp., dated February 4, 1998, as the same may be amended,
modified or supplemented in accordance with the terms thereof.
Norfolk Purchase Agreement shall mean the Asset Purchase
Agreement between the Company and AT&T PCS dated as of August 20,
1998, as the same may be amended, modified or supplemented in
accordance with the terms thereof.
Offer Notice shall have the meaning set forth in Section 4.2(a).
Offered Shares shall have the meaning set forth in Section 4.2(a).
Original Management Stockholders shall mean, collectively,
Michael E. Kalogris and Steven R. Skinner.
Original Stockholders Agreement shall have the meaning set
forth in the first recital.
Overlap Territory shall mean that portion of the Territory
in which a Person or its Affiliates (other than AT&T PCS and its
Affiliates) that is party to a transaction meeting the
description of a transaction set forth in clauses (a), (b) and
(c) of the definition of a Disqualifying Transaction owns an FCC
License to offer Commercial Mobile Radio Services.
PCS System shall mean a mobile communication system
constructed and operated in a BTA or a MTA (or any successor
territorial designations or subdivision thereof authorized by the
FCC) exclusively using the 1850 MHZ to 1910 MHZ and 1930 MHZ to
1990 MHZ frequencies, or portions thereof, pursuant to a License
therefor issued by the FCC.
PCS Territory shall mean the territory described on
Schedule VI hereto.
Permitted Cellular License shall have the meaning assigned
to such term in Section 7.11(b).
Permitted Consolidation Transaction shall have the meaning
set forth in Section 7.11(a).
Permitted Merger Participant shall mean an AT&T Licensee
that (i) owns one or more FCC Licenses to provide Commercial
Mobile Radio Services that were acquired from AT&T PCS or its
Affiliates in all or any part of the Knoxville, TN, Memphis, TN,
Little Rock, AK, Detroit, MI, St. Louis, MO, Atlanta, GA,
Boston, MA, Louisville, KY, Nashville, TN and Columbus, OH MTAs
and (ii) on the date of acquisition from AT&T PCS of any such FCC
Licenses to provide Commercial Mobile Radio Service referred to
in clause (i) hereof, owned FCC Licenses covering at least 8
million POPs, and in which AT&T PCS or its Affiliates has not
disposed of more than one-half of its original equity interest
therein.
Person shall mean an individual, corporation, partnership,
limited liability company, association, joint stock company,
Governmental Authority, business trust or other legal entity.
Piggyback Notice shall have the meaning set forth in Section 5(b)(i).
Piggyback Registration shall have the meaning set forth in
Section 5(b)(i).
POPs shall mean, with respect to any Licensed area, the
residents of such area based on the most recent publication by
Equifax Marketing Decision Systems, Inc.
Preferred Stock shall have the meaning set forth in the
third recital.
Prohibited Transferee shall mean any Person that is one of
the three (excluding any Person excluded from this definition by
reason of the proviso hereto) largest carriers (other than AT&T
Corp.) of telecommunications services that as of the date hereof
constitute interexchange services (based on revenue derived from
the provision of such telecommunications services during the most
recent fiscal year for which such information is available) or an
Affiliate thereof; provided, however, that such Person shall not
constitute a Prohibited Transferee if (a) a material portion of
such Persons business is also the business of providing wireless
communications systems, and (b) TDMA is utilized in a substantial
majority of such Persons wireless communications systems.
Prospectus shall have the meaning set forth in Section 5(d)(i).
Purchase Notice shall have the meaning set forth in Section 4.2(b).
Qualified Holder shall mean (a) any Stockholder or group of
Stockholders that Beneficially Owns shares of Series C Preferred
Stock and Common Stock reasonably expected to, upon sale, result
in aggregate gross proceeds of at least $25 million, or (b) AT&T
PCS for so long as it Beneficially Owns, greater than two-thirds
of the initial issuance to AT&T PCS of shares of Series A
Preferred Stock (as appropriately adjusted for stock splits,
stock dividends and the like).
Registrable Securities shall mean (a) the Common Stock now
owned or hereafter acquired by any Stockholder or issuable upon
conversion or exchange of any Equity Security, and (b) all Common
Stock issued or issuable upon conversion, exchange or exercise of
any Equity Security which is issued pursuant to a stock split,
stock dividend or other similar distribution or event with
respect to Common Stock but with respect to any Common Stock,
only until such time as such Common Stock (i) has been
effectively registered under the Securities Act and disposed of
in accordance with the Registration Statement covering it, (ii)
has been sold to the public pursuant to Rule 144 (or any similar
provision then in force), (iii) shall otherwise have been
transferred, a new certificate evidencing such Common Stock
without a legend restricting further transfer shall have been
delivered by the Company, and subsequent public distribution of
such Common Stock shall neither require registration under the
Securities Act nor qualification (or any similar filing) under
any state securities or blue sky law then in effect, or (iv)
shall have ceased to be issued and outstanding.
Registration shall have the meaning set forth in Section 5(d).
Registration Expenses shall have the meaning set forth in
Section 5(g).
Registration Statement shall have the meaning set forth in
Section 5(d)(i).
Regulatory Problem shall mean, with respect to any SBIC
Holder, any set of facts or circumstances wherein it has been
asserted by any Governmental Authority (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 Company Stock.
Related Agreements shall mean each of the Network Membership
License Agreement, the Employment Agreements, the Resale
Agreement and the Roaming Agreement.
Representatives shall have the meaning set forth in Section 7.7.
Resale Agreement shall mean the form of Resale Agreement
between Triton Operating and AWS or an Affiliate thereof,
attached hereto as Exhibit D, as the same may be amended,
modified or supplemented in accordance with the terms thereof.
Restated Bylaws shall mean the Second Amended and Restated
Bylaws of the Company in the form of Exhibit A, as the same may
be amended, modified or supplemented in accordance with the terms
thereof.
Restated Certificate shall mean the Second Restated
Certificate of Incorporation of the Company, in the form of
Exhibit B, as the same may be amended, modified or supplemented
in accordance with the terms thereof.
Roaming Agreement shall mean the Intercarrier Roamer Service
Agreement between Triton Operating and AWS, dated February 4,
1998, as the same may be amended, modified or supplemented in
accordance with the terms thereof.
Rule 144 shall mean Rule 144 promulgated under the
Securities Act (or any similar rule as may be in effect from time
to time).
Sale Notice shall have the meaning set forth in Section 7.4(d).
Sale Offer shall have the meaning set forth in Section 7.4(d).
Sale Transaction shall have the meaning set forth in Section 7.4(c).
SBIC shall mean a small business investment company licensed
under the SBIC Act.
SBIC Act means the Small Business Investment Company Act of
1958, as amended.
SBIC Holder shall mean each Cash Equity Investor that is an
SBIC.
Section 6.2 Period shall have the meaning set forth in
Section 6.2.
Securities Act shall mean the Securities Act of 1933, as
amended.
Securities Purchase Agreement shall mean the Securities
Purchase Agreement, dated as of October 8, 1997, among the
Company and the Stockholders, as the same may be amended,
modified or supplemented in accordance with the terms thereof.
Seller shall have the meaning set forth in Section 4.2(a).
Selling Stockholders shall have the meaning set forth in
Section 4.3(a).
Series A Preferred Director shall mean the Class II director
of the Company that AT&T PCS has the right to nominate pursuant
to Section 4.3(d)(iii) of the Restated Certificate.
Series A Preferred Stock shall have the meaning set forth in
the third recital.
Series B Preferred Stock shall have the meaning set forth in
the third recital.
Series C Preferred Stock shall have the meaning set forth in
the third recital.
Series D Preferred Stock shall have the meaning set forth in
the third recital.
Sixty Wall Street shall have the meaning set forth in
Section 3.1(d).
Southeast Region shall mean the geographic area comprising
Washington, D.C., and the States of Alabama, Florida, Georgia,
Kentucky, Maryland, Mississippi, North Carolina, South Carolina,
Tennessee, Virginia, and West Virginia.
Stockholder shall have the meaning set forth in the
preamble.
Subject Market shall mean, with respect to any announcement
by AT&T PCS or its Affiliates of a transaction meeting the
description of a transaction set forth in clauses (a), (b) and
(c) of the definition of a Disqualifying Transaction, the PCS
System owned and operated by AT&T PCS and its Affiliates in any
of Charlotte, North Carolina, Atlanta, Georgia,
Baltimore/Washington, D.C. or Richmond, Virginia BTA.
Subsidiary shall mean, with respect to any Person, a
corporation or other entity of which 50% or more of the voting
power of the voting equity securities or equity interests is
owned, directly or indirectly, by such Person.
Substantial Company Breach shall mean a material breach by
the Company or its Subsidiaries of their respective obligations
under any of Sections 8.1(a), 8.2, 8.3, or 8.5(a) of this
Agreement, if and only if any such material breach is not cured
within 30 days of notice thereof from AT&T PCS to the Company or,
if such breach is not capable of being cured within such thirty
(30) day period, within one hundred eighty (180) days of such
notice, provided the Company is using best efforts to cure such
material breach as soon as reasonably practicable.
TDMA shall mean the North American Time Division Multiple
Access standard set by the Cellular Telecommunications Industry
Association, IS54/136, and any standard that is based upon, or is
an upgrade from, or is a successor to, such standard, if and only
if such new or upgraded standard is (i) adopted by AT&T PCS and
its Affiliates in a Majority of the Southeast Region, (ii)
technologically compatible in all material respects with the
standard then being used in a Majority of the United States
(including without limitation for the purpose of facilitating
roaming, handoff and automatic call delivery between systems),
and the User Interface in PCS Systems using such new or upgraded
standard will not differ from the User Interface in a Majority of
the United States in a manner that would be material to
customers, or (iii) is approved in writing by AT&T PCS.
TDMA Quality Standards shall mean the quality standards
applicable to TDMA PCS Systems and Cellular Systems owned and
operated by AT&T PCS and its Affiliates in the Southeast Region,
which, as currently in effect, are set forth on Schedule VII, as
the same may be amended from time to time, provided any such
amended standards shall become effective one hundred twenty (120)
days after notice thereof is given to the Company.
Territory shall mean the PCS Territory and the Cellular
Territory; provided, however, that in the event that, after
consummation of a Disqualifying Transaction, AT&T PCS terminates
its and its Affiliates obligations under Section 8.6 with respect
to any Overlap Territory, the Territory shall exclude the Overlap
Territory solely for the purpose of determining the rights and
obligations of AT&T PCS and the Company hereunder.
Transfer shall have the meaning set forth in Section 4.1(b).
Triton Operating shall mean Triton PCS Operating Company
L.L.C., a Delaware limited liability company which is a wholly-
owned Subsidiary of the Company.
Unfunded Commitment, with respect to any Cash Equity
Investor or Original Management Stockholder, the amount set forth
opposite such Persons name on Schedule XII.
User Interface shall mean the process, functional commands,
and look and feel by which a mobile wireless telecommunications
service subscriber operates and utilizes the mobile wireless
telecommunications services and service features provided by a
PCS System, including the sequence and detail of specific
commands or service codes, the detailed operation and response of
subscriber equipment to the sequence of keys pressed to effect
subscriber equipment function, the response of subscriber
equipment to the activation of these keys or signals or data from
the PCS System, the manner in which information is displayed on
the screen of subscriber equipment, and the use of announcement
tones and messages.
Each definition or pronoun herein shall be deemed to refer to the
singular, plural, masculine, feminine or neuter as the context
requires. Words such as herein, hereinafter, hereof, hereto and
hereunder refer to this Agreement as a whole, unless the context
otherwise requires.
2. Restated Certificate and Restated Bylaws. The Restated
Certificate in effect as of the date hereof is in the form of
Exhibit B hereto. The Restated Bylaws of the Company in effect
as of the date hereof are in the form of Exhibit A hereto.
3. Management of Company.
3.1 Board of Directors.
(1) The Board of Directors shall consist of seven (7) directors;
provided, however, that the number of directors constituting the
Board of Directors shall be reduced in the circumstances set
forth in this Section 3.1. Each of the Stockholders (other than
J.P. Morgan) hereby agrees that it will vote all of the shares of
its Common Stock owned or held of record by it (whether now owned
or hereafter acquired), in person or by proxy, to cause the
election of directors (and thereafter the continuation in office)
of two (2) individuals (one of which shall be one of the Companys
Class I directors and one of which shall be one of the Companys
Class III directors, as more particularly described in the
Restated Bylaws) selected by holders of a Majority in Interest of
the Common Stock Beneficially Owned by the Cash Equity Investors,
in their sole discretion. Any nomination or designation of
directors and the acceptance thereof pursuant to this Section
3.1(a) shall be evidenced in writing.
(2) So long as Desai Beneficially Owns at least 4.6 million
shares of Common Stock, it shall have the right to designate one
(1) one individual who shall be entitled to attend each meeting
of the Board of Directors as an observer, including meetings
during which the Companys annual budget is discussed and
presented (such observer shall have the right to receive all
Board of Directors materials and shall also have the right to
meet quarterly with management of the Company to consult on the
business affairs of the Company).
(3) So long as AT&T PCS has the right to nominate the Series A
Preferred Director, it shall have the right to designate up to
two (2) of AT&T PCSs Regional Directors (in regions overlapping
with or in geographic proximity to the Territory) who shall have
the right to attend each meeting of the Board of Directors as
observers.
(4) In the event that CB Capital Investors, L.P., or J.P. Morgan
Investment Corporation (JPMI) or Sixty Wall Street SBIC Fund,
L.P. (Sixty Wall Street; JPMI and Sixty Wall Street are
hereinafter referred to collectively as J.P. Morgan) shall fail
to satisfy any portion of their respective Unfunded Commitments
when due in accordance with Section 2.2 of the Securities
Purchase Agreement or Section 3.10 hereof, and such failure is
not cured by CB Capital Investors, L.P. or J.P. Morgan, as
applicable, or any other Cash Equity Investor within thirty-five
(35) days thereof, then, until such failure is cured, the right
of the Cash Equity Investors to designate two (2) directors
pursuant to Section 3.1(a) shall be reduced to a right to
designate one (1) director (subject to reinstatement upon cure of
such failure) and the director designated by CB Capital
Investors, L.P. or J.P. Morgan, as applicable, pursuant to such
right of the Cash Equity Investors, or, in the case of a default
by CB Capital Investors, L.P. and J.P. Morgan and two (2)
directors designated by the Cash Equity Investors pursuant to
Section 3.1(a), shall resign (or the other directors or
Stockholders shall remove them) from the Board of Directors and
the remaining directors shall take such action so that the number
of directors constituting the entire Board of Directors shall be
reduced accordingly.
3.2 [Intentionally Omitted]
3.3 [Intentionally Omitted]
3.4 [Intentionally Omitted]
3.5 [Intentionally Omitted]
3.6 [Intentionally Omitted]
3.7 Transactions between the Company and the Stockholders or
their Affiliates. Except for this Agreement, the Securities
Purchase Agreement and the Related Agreements and the
transactions contemplated hereby and thereby and any other arms-
length agreements or transactions entered into from time to time
between the Company and its Subsidiaries, on the one hand, and
AT&T PCS and its Affiliates, on the other hand, no Stockholder or
any Affiliate of any Stockholder shall enter into any transaction
with the Company or any Subsidiary of the Company unless such
transaction is approved by a majority of the disinterested
members of the Board of Directors. For purposes hereof, a
director shall be deemed to be disinterested with respect to any
such transaction if such director was not designated a director
by the Stockholder that (or an Affiliate of which) proposed to
engage in such transaction with the Company or any Subsidiary of
the Company and such member is not an officer, director, partner,
employee, stockholder of, or consultant to, such Stockholder or
any of its Affiliates.
3.8 Executive Committee. If an executive committee of the Board
of Directors (or a committee of the Board of Directors having
substantially the same mandate and powers of such a committee) is
established, the Series A Preferred Director, one of the
directors selected by the Cash Equity Investors pursuant to
Section 3.1 and Michael E. Kalogris (so long as he is an officer
of the Company) shall each serve as a member of such committee
(or such other committee having substantially the same mandate
and powers).
3.9 Voting Agreements and Voting Trusts. Except as disclosed on
Schedule X, each Stockholder agrees that it will not, directly
or indirectly, deposit any of his or its shares of Series C
Preferred Stock, Series D Preferred Stock and/or Common Stock in
a voting trust or other similar arrangement or, except as
expressly provided herein, subject such shares to a voting
agreement or other similar arrangements. AT&T PCS covenants and
agrees that it will not, directly or indirectly, enter into a
voting or similar agreement with any Transferee of shares of
Series A Preferred Stock.
3.10 Additional Capital Contributions. Each Cash Equity Investor
and Original Management Stockholder shall contribute to the
capital of the Company no later than November 30, 1999 an
aggregate additional amount equal to its Unfunded Commitment.
Pursuant to Section 7 of the Closing Agreement, such
contributions shall be made directly to Triton PCS, Inc., a
Delaware corporation that is a wholly-owned Subsidiary of the
Company.
3.11 Series A Preferred Director. For so long as AT&T PCS shall
have the right to nominate the Series A Preferred Director, each
of the Stockholders (other than J.P. Morgan) hereby agrees that
it will vote all of the shares of Series C Preferred Stock and
Common Stock owned or held of record by it (whether now owned or
hereafter acquired), in person or by proxy, to cause the election
of any such Series A Preferred Director so nominated by AT&T PCS
to serve on the Board of Directors and such obligation of the
Stockholders to cause the election of any such Series A Preferred
Director shall continue until the termination of this Agreement
in accordance with Section 12.3.
1.1
4. Transfers of Shares.
4.1 General.
(1) [Intentionally Omitted]
(2) Each Stockholder agrees that at all times on and after the
IPO Date it shall not, directly or indirectly, transfer, sell,
assign, pledge, tender or otherwise grant, create or suffer to
exist a Lien in or upon, give, place in trust, or otherwise
voluntarily or involuntarily (including transfers by testamentary
or intestate succession) dispose of by operation of law, offer or
otherwise (any such action being referred to herein as a
Transfer) any of the shares of Series D Preferred Stock or Common
Stock Beneficially Owned by such Stockholder as of the date
hereof or which may hereafter be acquired by such Stockholder,
except that a Cash Equity Investor may Transfer shares of Series
C Preferred Stock and Common Stock to another Cash Equity
Investor and a Stockholder may Transfer (i) shares of Series D
Preferred Stock and Common Stock to an Affiliated Successor, and
(ii) shares of Common Stock after complying first with Section
4.2 and next with Section 4.3, if applicable; provided, however,
a Stockholder shall not be required to comply with Section 4.2 if
such Stockholder first complies with the applicable provisions of
Section 4.4 in connection with Transfers of Common Stock (x)
pursuant to a Registration of Common Stock under Section 5 which
is an underwritten offering and constitutes a bona fide
distribution of such Common Stock pursuant to such Registration,
(y) pursuant to Rule 144, or (z) in any single transaction or
series of related transactions to one or more Persons which
results in the Transfer by such Stockholder (together with any
other Stockholder participating in such single transaction or
series of related transactions) of not more than ten percent
(10%) of the Common Stock on a fully diluted basis (excluding for
such purposes the Series A Preferred Stock).
(3) Notwithstanding anything to the contrary contained in
Section 4.1(b), prior to February 4, 2001, each Stockholder
agrees that it will not Transfer any shares of Series C Preferred
Stock or Common Stock Beneficially Owned by it as of the date
hereof or which may hereafter be acquired by it to any Person
other than an Affiliated Successor.
(4) AT&T PCS agrees that it will not (i) Transfer any shares
of Series D Preferred Stock held by it to any Person other than to
an Affiliated Successor; provided, however, that nothing
contained in this Section 4.1(d) shall limit AT&T PCS right to
Transfer in accordance with the terms of this Agreement any
shares of Series C Preferred Stock or Common Stock issued upon
conversion of any such shares of Series D Preferred Stock.
Moreover, AT&T PCS may Transfer its shares of Series A Preferred
Stock free from any restrictions on Transfer of such shares under
this Agreement.
(5) Notwithstanding anything to the contrary contained in
this Section 4, (i) Section 4.1 shall not apply to the pledge by the
Cash Equity Investors of the Series C Preferred Stock or Common
Stock as security for their Unfunded Commitments pursuant to a
pledge agreement in favor of the Company or to any Transfer of
shares of Series C Preferred Stock or Common Stock in connection
with the exercise by the Company of its remedies pursuant to any
such pledge agreement, and (ii) a Cash Equity Investor that is a
SBIC Holder that is required to dispose of its investment in the
Company by reason of a breach by the Company of Section 6.6(d) of
the Securities Purchase Agreement or a Regulatory Problem, may
Transfer its shares of Series C Preferred Stock or Common Stock
without complying with the terms of Section 4.3.
4.2 Right of First Offer.
(1) If a Stockholder (each a Seller) desires to Transfer any
or all of its shares of Company Stock (collectively, the Offered
Shares), such Seller shall give written notice (the Offer Notice)
to the Company and to each Stockholder entitled to become the
First Offeree of such Offered Shares, as determined below. Each
Offer Notice shall describe in reasonable detail the number of
shares of each class of Offered Shares, the cash purchase price
requested and all other material terms and conditions of the
proposed Transfer. The Offer Notice shall constitute an
irrevocable offer (a First Offer) to sell all (and not less than
all) of the Offered Shares to the First Offeree(s) at a cash
price equal to the price contained in such Offer Notice and upon
the same terms as the terms contained in such Offer Notice. The
First Offeree(s) shall have the irrevocable right and option,
exercisable as provided below, but not the obligation, to accept
the First Offer as to all (and not less than all) of the Offered
Shares. The First Offeree(s) shall be determined as follows:
(1) If the Seller is a Cash Equity Investor, AT&T PCS shall be
First Offeree;
(2) If the Seller is AT&T PCS, each Cash Equity Investor shall
be the First Offeree; and
(3) If the Seller is any Stockholder other than a Cash Equity
Investor, AT&T PCS shall be the First Offeree.
(2) The option provided for herein shall be exercisable by the
First Offeree(s) by giving written notice (a Purchase Notice),
that the First Offeree desires to purchase all (and not less than
all) of such Offered Shares from the Seller, the Stockholders
(other than the Seller) and the Company not later than ten (10)
business days (the First Offer Period) after the date of the
Offer Notice. If the Cash Equity Investors are First Offeree and
two or more Cash Equity Investors notify the Seller of their
desire to purchase all of the Offered Shares, then each Cash
Equity Investor shall acquire the proportion of such Offered
Shares as the number of shares of Company Stock owned by such
Cash Equity Investor bears to the total number of shares of
Company Stock owned by all Cash Equity Investors who elected to
purchase all of the Offered Shares. If Offered Shares are
purchased by more than one purchaser, the purchase price shall be
allocated among the parties purchasing the shares on the basis of
the number of shares being so purchased. The purchase of the
Offered Shares by the First Offeree(s) shall be closed at the
principal executive offices of the Company on a date specified by
the First Offeree(s) upon at least five (5) business days notice,
that is within thirty (30) days after the expiration of the First
Offer Period; provided, however, that if such purchase is subject
to the consent of the FCC or any public service or public
utilities commission, the purchase of the Offered Shares shall be
closed on the first business day after all such consents shall
have been obtained by Final Order.
(3) If the First Offeree(s) decline (which shall include the
failure to give timely notice of acceptance) to purchase all of
the Offered Shares subject to the First Offer within the First
Offer Period, the Seller shall have the right (for a period of
ninety (90) days following the expiration of the First Offer
Period) to consummate the sale of the Offered Shares to any
Person; provided, however, that the purchase price of such
Offered Shares payable by such Person must be at least equal to
the cash purchase price thereof set forth in the Offer Notice and
all other terms and conditions of any such sale shall not be more
beneficial to such third party than those contained in the Offer
Notice. If any Offered Shares are not sold pursuant to the
provisions of this Section 4.2 prior to the expiration of the
ninety (90) day period specified in the immediately preceding
sentence, such Offered Shares shall become subject once again to
the provisions and restrictions hereof.
(4) The purchase price of any Offered Shares Transferred
pursuant to this Section 4.2 shall be payable in cash by
certified bank check or by wire transfer of immediately available
funds.
4.3 Rights of Inclusion.
(1) No Stockholder shall, directly or indirectly, Transfer, in
any single transaction or series or related transactions to one
or more Persons who are not Affiliated Successors of such
Stockholder (each such Person an Inclusion Event Purchaser)
shares of Series C Preferred Stock or Common Stock (collectively,
Inclusion Stock) in circumstances in which, after giving effect
to such Transfer, whether acting alone or in concert with any
other Stockholder (such parties referred to herein as Selling
Stockholders) would result in such Selling Stockholder(s)
Transferring twenty-five percent (25%) or more of the outstanding
shares of Inclusion Stock outstanding on the date of such
proposed Transfer on a fully diluted basis (excluding for such
purposes the Series A Preferred Stock) (an Inclusion Event),
unless the terms and conditions of such sale to such Inclusion
Event Purchaser shall include an offer to AT&T PCS, the Cash
Equity Investors and the Management Stockholders other than the
Selling Stockholder (each, an Inclusion Event Offeree) to
Transfer to such Inclusion Event Purchasers up to that number of
shares of any class of Inclusion Stock then Beneficially Owned by
each Inclusion Event Offeree that bears the same proportion to
the total number of shares of Inclusion Stock at that time
Beneficially Owned (without duplication) by each such Inclusion
Event Offeree as the number of shares of Inclusion Stock being
Transferred by the Selling Stockholders (including shares of
Inclusion Stock theretofore Transferred if in any applicable
series of related transactions) bears to the total number of
shares of Inclusion Stock at the time Beneficially Owned (without
duplication) by the Selling Stockholders (including shares of
Inclusion Stock theretofore Transferred if in any applicable
series of related transactions). If the Selling Stockholders
receive a bona fide offer from an Inclusion Event Purchaser to
purchase shares of Inclusion Stock in circumstances in which,
after giving effect to such sale would result in an Inclusion
Event, and which offer such Selling Stockholders wish to accept,
the Selling Stockholders shall then cause the Inclusion Event
Purchasers offer to be reduced to writing (which writing shall
include an offer to purchase shares of Inclusion Stock from each
Inclusion Event Offeree according to the terms and conditions set
forth in this Section 4.3) and the Selling Stockholders shall
send written notice of the Inclusion Event Purchasers offer (the
Inclusion Notice) to each Inclusion Event Offeree, which
Inclusion Notice shall specify (i) the names of the Selling
Stockholders, (ii) the names and addresses of the proposed
acquiring Person, (iii) the amount of shares proposed to be
Transferred and the price, form of consideration and other terms
and conditions of such Transfer (including, if in a series of
related transactions, such information with respect to shares of
Inclusion Stock theretofore Transferred), (iv) that the acquiring
Person has been informed of the rights provided for in this
Section 4.3 and has agreed to purchase shares of Inclusion Stock
in accordance with the terms hereof, and (v) the date by which
each other Selling Stockholder may exercise its respective rights
contained in this Section 4.3, which date shall not be less than
thirty (30) days after the giving of the Inclusion Notice. The
Inclusion Notice shall be accompanied by a true and correct copy
of the Inclusion Event Purchasers offer. At any time within
thirty (30) days after receipt of the Inclusion Notice, each
Inclusion Event Offeree may accept the offer included in the
Inclusion Notice for up to such number of shares of Inclusion
Stock as is determined in accordance with this Section 4.3, by
furnishing written notice of such acceptance to each Selling
Stockholder, and delivering, to an escrow agent (which shall be a
bank or a law or accounting firm designated by the Company), on
behalf of the Selling Stockholders, the certificate or
certificates representing the shares of Inclusion Stock to be
sold pursuant to such offer by each Inclusion Event Offeree, duly
endorsed in blank, together with a limited power of attorney
authorizing the escrow agent, on behalf of the Inclusion Event
Offeree, to sell the shares to be sold pursuant to the terms of
such Inclusion Event Purchasers offer.
In the event that the Inclusion Event Purchaser does
not agree to purchase all of the shares of Inclusion Stock
proposed to be sold by the Selling Stockholders and the Inclusion
Event Offeree, then each Selling Stockholder and Inclusion Event
Offeree shall have the right to sell to the Inclusion Event
Purchaser that number of shares of Inclusion Stock as shall be
equal to (x) the number of shares of Inclusion Stock which the
Inclusion Event Purchaser has agreed to purchase times (y) a
fraction, the numerator of which is the number of shares of
Inclusion Stock Beneficially Owned (without duplication) by such
Selling Stockholder or Inclusion Event Offeree and the
denominator of which is the aggregate number of shares of
Inclusion Stock Beneficially Owned (without duplication) by all
Selling Stockholders and Inclusion Event Offeree. If any
Inclusion Event Offeree desires to sell less than its
proportionate amount of shares of Inclusion Stock that it is
entitled to sell pursuant to this Section 4.3, then the Selling
Stockholders and the remaining Inclusion Event Offeree shall have
the right to sell to the Inclusion Event Purchaser an additional
amount of shares of Inclusion Stock as shall be equal to (x) the
number of shares of Inclusion Stock not being sold by any such
Inclusion Event Purchasers times (y) a fraction, the numerator of
which is the number of shares of Inclusion Stock owned such
Selling Stockholder or remaining Inclusion Event Offeree and the
denominator of which is the aggregate number of shares of
Inclusion Stock Beneficially Owned (without duplication) by all
Selling Stockholders and remaining Inclusion Event Offeree. Such
process shall be repeated in series until all of the remaining
Inclusion Event Offeree agree to sell their remaining
proportionate number of shares of Inclusion Stock.
(2) The purchase from each Inclusion Event Offeree pursuant
to this Section 4.3 shall be on the same terms and conditions,
including the price per share received by the Selling
Stockholders and stated in the Inclusion Notice provided to each
Inclusion Event Offeree. In the event that the Inclusion Stock
is Common Stock, all Inclusion Event Offeree shall be required,
as a condition of participating in such transaction, to convert
its Preferred Stock into Common Stock and Transfer Common Stock
to the Inclusion Event Purchaser. In the event that the
Inclusion Stock is Series C Preferred Stock and after giving
effect to the rights of the Inclusion Event Offeree to sell their
pro rata share of Series C Preferred Stock or Common Stock
pursuant to this Section 4.3 the Inclusion Event Purchaser shall
be required to purchase both Series C Preferred Stock and Common
Stock, the purchase price allocable to holders of Series C
Preferred Stock, on the one hand, and to holders of Common Stock,
on the other hand, shall be determined by an independent
committee of the Board of Directors selected from among those
directors who were not designated by any Selling Stockholders or
Inclusion Event Offeree.
(3) Simultaneously with the consummation of the sale of
the shares of Inclusion Stock of the Selling Stockholders and each
Inclusion Event Offeree to the Inclusion Event Purchaser pursuant
to the Inclusion Event Purchasers offer, the Selling Stockholders
shall notify each Inclusion Event Offeree and shall cause the
purchaser to remit to each Inclusion Event Offeree the total
sales price of the shares of Inclusion Stock held by each
Inclusion Event Offeree sold pursuant thereto and shall furnish
such other evidence of the completion and time of completion of
such sale and the terms thereof as may be reasonably requested by
each Inclusion Event Offeree.
(4) If within thirty (30) days after receipt of the Inclusion
Notice, an Inclusion Event Offeree has not accepted the offer
contained in the Inclusion Notice, such Inclusion Event Offeree
shall be deemed to have waived any and all rights with respect to
the sale described in the Inclusion Notice (but not with respect
to any subsequent sale, to the extent this Section 4.3 is
applicable to such subsequent sale) and the Selling Stockholders
shall have sixty (60) days in which to sell not more than the
number of shares of Inclusion Stock described in the Inclusion
Notice, on terms not more favorable to the Selling Stockholders
than were set forth in the Inclusion Notice; provided, however,
that if such purchase is subject to the consent of the FCC or any
public service or public utilities commission, the purchase of
the Offered Shares shall be closed on the first business day
after all such consents shall have been obtained by Final Order.
4.4 Right of First Negotiation. In the event that a Stockholder
desires to Transfer any shares of Common Stock following the IPO
Date in a Transfer described in clauses (x), (y) or (z) of
Section 4.1(b), such Stockholder shall give written notice
thereof to AT&T PCS, such notice to specify, among other things,
the number of shares that such Stockholder desires to sell. For
the applicable first negotiation period hereinafter set forth,
AT&T PCS shall have the exclusive right to negotiate with such
Stockholder with respect to the purchase of such shares; it being
understood and agreed that such exclusive right shall not be
deemed to be a right of first offer or right of first refusal for
the benefit of AT&T PCS and such Stockholder shall have the right
to reject any offer made by AT&T PCS during such applicable first
negotiation period. Upon the expiration of such applicable first
negotiation period, such Stockholder shall have the right (for
the applicable offer period hereinafter set forth with respect to
each applicable first negotiation period), following the
expiration of such applicable first negotiation period, to offer
and sell such shares included in such written notice on such
terms and conditions as shall be acceptable to such Stockholder
in its sole discretion. If any of such shares included in such
written notice are not sold pursuant to the provisions of this
Section 4.4 prior to the expiration of the applicable offer
period, such shares shall become subject once again to the
provision and restrictions hereof.
If a Stockholder desires to Transfer shares of Common Stock
(a) pursuant to a Registration of Common Stock under Section 5 in
an underwritten offering that constitutes a bona fide
distribution of such Common Stock pursuant to such Registration,
the applicable first negotiation period shall be ten (10) days
and the applicable offer period upon the expiration of such first
negotiation period shall be one hundred twenty (120) days, (b)
pursuant to Rule 144, the applicable first negotiation period
shall be three (3) hours (it being understood and agreed that
such Stockholder shall, in addition to giving written notice of
such proposed Transfer by facsimile, use commercially reasonable
efforts to contact AT&T PCS by telephone in accordance with
Section 12.1) and the applicable offer period upon the expiration
of such first negotiation period shall be five (5) business days,
and (c) in any single transaction or series of related
transactions to one or more Persons which will result in the
Transfer by such Stockholder (together with any other Stockholder
participating in such single transaction or series of related
transactions) of not more than ten percent (10%) of the Common
Stock on a fully diluted basis (excluding for such purposes the
Series A Preferred Stock), the applicable first negotiation
period shall be one (1) business day, so long as notice of such
proposed Transfer is given to AT&T PCS prior to 9:00 A.M. on the
day prior to the date of such proposed Transfer (it being
understood and agreed that such Stockholder shall, in addition to
giving written notice of such proposed Transfer by facsimile, use
commercially reasonable efforts to contact AT&T PCS by telephone
in accordance with Section 12.1) and the applicable offer period
upon the expiration of such first negotiation period shall be ten
(10) business days.
4.5 Additional Conditions to Permitted Transfers.
(1) As a condition to any Transfer to an Affiliated Successor
permitted pursuant to Section 4.1, or any Transfer pursuant to
Section 4.2 or Section 4.3, each transferee that is not a party
hereto shall, prior to such Transfer, agree in writing to be
bound by all of the provisions of this Agreement applicable to
the Stockholders (and shall thereby become a Stockholder for all
purposes of this Agreement). Any Transfer without compliance
with such provisions of this Agreement shall be null and void and
such transferee shall have no rights as a Stockholder of the
Company.
(2) Notwithstanding anything to the contrary contained in
this Agreement, each Stockholder agrees that it will not effect a
Transfer of shares of Company Stock to a Prohibited Transferee;
provided, however, that nothing contained in this Section 4.5(b)
shall be construed to prohibit a Transfer of Common Stock by a
Stockholder after the IPO Date pursuant to an underwritten
Registration or in accordance with the provisions of Rule 144.
It shall be deemed a breach of this Section 4.5(b) by a
Stockholder Beneficially Owning more than 10% of the Common Stock
outstanding if any Prohibited Transferee shall acquire, directly
or indirectly, in a private sale Beneficial Ownership of more
than 331/3% of any class of equity securities or equity interest
in, such Stockholder.
(3) [Intentionally Omitted]
4.6 Representations and Warranties. A Stockholder purchasing
shares of Company Stock pursuant to Section 4.2 shall be entitled
to receive representations and warranties from the transferring
Stockholder that such Stockholder has the authority (corporate or
otherwise) to sell such shares, is the sole owner of such shares,
and has good and valid title to such shares, free and clear of
any and all Liens (other than pursuant to this Agreement, the
Restated Certificate or any Related Agreement), and that the sale
of such shares does not violate any agreement to which it is a
party or by which it is bound.
4.7 Stop Transfer.
(1) The Company agrees not to effect any Transfer of shares
of Company Stock by any Stockholder whose proposed Transfer is
subject to Sections 4.2, 4.3 or 4.4 until it has received
evidence reasonably satisfactory to it that the rights provided
to any other Stockholders pursuant to such Sections, if
applicable to such Transfer, have been complied with and
satisfied in all respects. If any portion of such Stockholders
Unfunded Commitment shall remain unpaid on the date of such
proposed Transfer, then, as a condition of such Transfer, such
Person purchasing such Company Stock shall, or another Cash
Equity Investor may, execute an instrument in form satisfactory
to the Company agreeing to pay in full such Stockholders Unfunded
Commitment outstanding on the date of such proposed Transfer,
provided, however, that such Stockholder shall not be released
from its obligation in respect of such Unfunded Commitment. No
Transfer of any shares of Preferred Stock and/or Common Stock
shall be made except in compliance with all applicable securities
laws. Any Transfer made in violation of this Agreement shall be
null and void.
(2) The Company agrees that it will not, without the prior
written consent of AT&T PCS, Transfer, issue or dispose of any
Equity Securities to a Prohibited Transferee except that
purchases of Common Stock by a Prohibited Transferee in
connection with a Registration of Common Stock shall not
constitute a violation of this Section 4.7(b).
5. Registration Rights.
(1) Demand Registration Rights.
(1) Right to Demand Registration. From and after February
4, 2001 and, subject to Section 4.1(d), each of (A) AT&T PCS, (B) a
Qualified Holder, and (C) Management Stockholders that in the
aggregate Beneficially Own at least 50.1% of the shares of Common
Stock then Beneficially Owned by the Management Stockholders
(each a Demanding Stockholder and, collectively, the Demanding
Stockholders) shall have the right to make a written request to
the Company for registration with the Commission, under and in
accordance with the provisions of the Securities Act, of all or
part of their Registrable Securities pursuant to an underwritten
offering (a Demand Registration), which request shall specify the
number of Registrable Securities proposed to be sold by each
Demanding Stockholder; provided, however, that (x) the Company
need not effect a Demand Registration unless the sale of the
Registrable Securities proposed to be sold by the Demanding
Stockholder shall reasonably be expected to result in aggregate
gross proceeds to such Demanding Stockholder of at least $10
million, and (y) if the Board of Directors determines that a
Demand Registration would interfere with any pending or
contemplated material acquisition, disposition, financing or
other material transaction, the Company may defer a Demand
Registration (including by withdrawing any Registration Statement
filed in connection with a Demand Registration); so long as that
the aggregate of all such deferrals shall not exceed one hundred
twenty (120) days in any 360 day period. Demand Registration
shall not be deemed a Demand Registration hereunder until such
Demand Registration has been declared effective by the Commission
(without interference by any stop order, injunction or other
order or requirement of the Commission or other governmental
agency, for any reason), and maintained continuously effective
for a period of at least three (3) months or such shorter period
when all Registrable Securities included therein have been sold
in accordance with such Demand Registration; provided, however,
that a Qualified Holder may, not more frequently than once in any
twelve (12) month period, request that the Demand Registration be
a shelf registration that is maintained continuously effective
for a period of at least six (6) months or such shorter period
when all Registrable Securities included therein have been sold
in accordance with such Demand Registration. A Demanding
Stockholder may make a written request for a Demand Registration
in accordance with the foregoing in respect of Equity Securities
that it intends to convert into shares of Common Stock upon the
effectiveness of the Registration Statement prepared in
connection with such demand, and the Company shall fulfill its
obligations under this Section 5 in a manner that permits such
Demanding Stockholder to exercise its conversion rights in
respect of such Equity Securities and substantially
contemporaneously sell the shares of Common Stock issuable upon
such conversion under such Registration Statement.
The Company will not be obligated to effect more than
two (2) separate Demand Registrations during any twelve (12)
month period; provided, however, that only one (1) request for a
Demand Registration may be exercised by AT&T PCS and/or
Management Stockholders that in the aggregate Beneficially Own at
least 50.1% of the shares of Common Stock then Beneficially Owned
by the Management Stockholders during any twelve (12) month
period.
Within ten (10) days after receipt of the request for a
Demand Registration, the Company will send written notice (the
Demand Notice) of such Registration request and its intention to
comply therewith to all Stockholders who are holders of
Registrable Securities and, subject to Section 5(a)(ii), the
Company will include in such Demand Registration all Registrable
Securities of such Stockholders with respect to which the Company
has received written requests for inclusion therein within twenty
(20) days after the last date such Demand Notice was deemed to
have been given pursuant to Section 12.1.
(2) Priority on Demand Registration. If the managing
underwriter or underwriters advise the Company and the holders of
the Registrable Securities to be registered in writing that in
its or their opinion that, the number of Registrable Securities
proposed to be sold in such Registration and any other securities
of the Company requested or proposed to be included in such
Registration exceeds the number that can be sold in such offering
without (A) creating a substantial risk that the proceeds or
price per share that will be derived from such Registration will
be reduced or that the number of Registrable Securities to be
registered is too large a number to be reasonably sold, or (B)
materially and adversely affecting such Registration in any other
respect, the Company will (x) include in such Registration the
aggregate number of Registrable Securities recommended by the
managing underwriter (the number of Registrable Securities to be
registered for each Stockholder to be reduced pro rata based on
the amount of Registrable Securities each of the Stockholders
requested to be included in such Registration), and (y) not allow
any securities s other than Registrable Securities to be included
in such Registration unless all Registrable Securities requested
to be included shall have been included therein, and then only to
the extent recommended by the managing underwriter or determined
by the Company after consultation with an investment banker of
nationally recognized standing (notification of which number
shall be given by the Company to the holders of Registrable
Securities).
(3) Selection of Underwriters. The offering of such Registrable
Securities pursuant to such Demand Registration shall be in the
form of an underwritten offering. The Demanding Stockholder that
initiated such Demand Registration will select a managing
underwriter or underwriters of recognized national standing to
administer the offering, which managing underwriter or
underwriters shall be reasonably acceptable to the Company.
(2) Piggyback Registration Rights.
(1) Right to Piggyback. If the Company proposes to register
any shares of Common Stock (or securities convertible into or
exchangeable for Common Stock) with the Commission under the
Securities Act (other than a Registration on Form S-4 or Form S-
8, or any successor forms), and the Registration form to be used
may be used for the Registration of the Registrable Securities (a
Piggyback Registration), the Company will give written notice (a
Piggyback Notice) to all Stockholders, at least thirty (30) days
prior to the anticipated filing date, of its intention to effect
such a Registration, which notice will specify the proposed
offering price (if determined at that time), the kind and number
of securities proposed to be registered, the distribution
arrangements and will, subject to Section 5(b)(ii), include in
such Piggyback Registration all Registrable Securities with
respect to which the Company has received written requests (which
requests have not been withdrawn) for inclusion therein within
twenty (20) days after the last date such Piggyback Notice was
deemed to have been given pursuant to Section 12.1. If at any
time after giving the Piggyback Notice and prior to the effective
date of the Registration Statement filed in connection with such
Registration, the Company determines for any reason not to
register or to delay Registration, the Company may, at its
election, give written notice of such determination to each
holder of Registrable Securities that has requested inclusion of
Registrable Securities in such Registration and (A) in the case
of a determination not to register, shall be relieved of its
obligation to register any Registrable Securities in connection
with such Registration, and (B) in the case of a determination to
delay registering, shall be permitted to delay registering any
Registrable Securities for the same period as the delay in
registering such other securities.
(2) Priority on Piggyback Registrations. If the managing
underwriter or underwriters, if any, advise the Company and the
holders of Registrable Securities in writing that in its or their
opinion, that the number or kind of securities proposed to be
sold in such Registration (including Registrable Securities to be
included pursuant to Section 5(b)(i)) exceeds the number that can
be sold in such offering without (A) creating a substantial risk
that the proceeds or price per share the Company will derive
from such Registration will be reduced, or that the number of
shares to be registered is too large a number to be reasonably
sold or (B) materially and adversely affecting such Registration
in any other respect, without any reduction in the amount of
securities the Company proposes to issue and sell for its own
account or in the amount of securities any other security holder
proposes to sell for its own account pursuant to a demand
Registration right, the number of Registrable Securities to be
registered for each Demanding Stockholder shall be reduced pro
rata based on the amount of Registrable Securities each of the
Demanding Stockholders requested to be included in such
Registration, to the extent necessary to reduce the number of
Registrable Securities to be registered to the number recommended
by the managing underwriter or determined by the Company after
consultation with an investment banker of nationally recognized
standing (notification of which number shall be given by the
Company to the holders of Registrable Securities of such
determination).
(3) Selection of Underwriters. Except as set forth in Section
5.1(a)(iii), the Company (by action of the Board of Directors)
will select a managing underwriter or underwriters to administer
the offering, which managing underwriter or underwriters will be
of nationally recognized standing.
(4) Registration Procedures. With respect to any Demand
Registration or Piggyback Registration (each, a Registration),
the Company shall, subject to Sections 5(a)(i) and (5)(a)(ii) and
Sections 5(b)(i) and 5(b)(ii), as expeditiously as practicable:
(1) prepare and file with the Commission, as promptly as
reasonably practicable (but in no event more than forty-five (45)
days) after the receipt of the Registration requests under
Sections 5(a) or 5(b), a registration statement or registration
statements (each, a Registration Statement) relating to the
applicable Registration on any appropriate form under the
Securities Act, which form shall be available for the sale of the
Registrable Securities in accordance with the intended method or
methods of distribution thereof; cooperate and assist in any
filings required to be made with the NASD; and use its reasonable
best efforts to cause such Registration Statement to become and
(to the extent provided herein) remain effective; provided,
however, that before filing a Registration Statement or
prospectus related thereto (a Prospectus) or any amendments or
supplements thereto, the Company shall furnish to the holders of
the Registrable Securities covered by such Registration Statement
and the underwriters, if any, copies of all such documents
proposed to be filed, which documents will be subject to the
reasonable review of such holders and underwriters and their
respective counsel, and the Company shall not file any
Registration Statement or amendment thereto or any Prospectus or
any supplement thereto to which the holders of a majority of the
Registrable Securities covered by such Registration Statement or
the underwriters, if any, shall reasonably object;
(2) prepare and file with the Commission such amendments
and supplements to the Registration Statement as may be necessary to
keep each Registration Statement effective for three (3) months
(six (6) months in the case of any shelf registration requested
by a Qualified Holder pursuant to this Section 5) or such shorter
period that will terminate when all Registrable Securities
covered by such Registration Statement have been sold; cause each
Prospectus to be supplemented by any required Prospectus
supplement, and as so supplemented to be filed pursuant to Rule
424 under the Securities Act; and comply with the provisions of
the Securities Act with respect to the disposition of all
securities covered by such Registration Statement during the
applicable period in accordance with the intended method or
methods of distribution by the sellers thereof set forth in such
Registration Statement or supplement to the Prospectus;
(3) promptly notify the selling holders of Registrable
Securities and the managing underwriters, if any (and, if
requested by any such person or entity, confirm such advice in
writing), (A) when the Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect to the
Registration Statement or any post-effective amendment, when the
same has become effective; (B) of any request by the Commission
for amendments or supplements to the Registration Statement or
the Prospectus or for additional information; (C) of the issuance
by the Commission of any stop order suspending the effectiveness
of the Registration Statement or the initiation of any
proceedings for that purpose; (D) if at any time the
representations and warranties of the Company contemplated by
subsection (xiv) of this subsection (d) below cease to be true
and correct; (E) of the receipt by the Company of any
notification with respect to the suspension of the qualification
of the Registrable Securities for sale under the securities or
blue sky laws of any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and (F) of the
happening of any event which makes any statement made in the
Registration Statement, the Prospectus or any document
incorporated therein by reference untrue or which requires the
making of any changes in the Registration Statement, the
Prospectus or any document incorporated therein by reference in
order to make the statements therein not misleading;
(4) use its reasonable best efforts to obtain the withdrawal
of any order suspending the effectiveness of (I) the Registration
Statement, or (II) the qualification of the Registrable
Securities for sale under the securities or blue sky laws of any
jurisdiction at the earliest possible time;
(5) if requested by the managing underwriter or underwriters
or a holder of Registrable Securities being sold in connection with
an underwritten offering, promptly incorporate in a Prospectus
supplement or post-effective amendment such information as the
managing underwriters and the holders of a majority of the
Registrable Securities being sold agree should be included
therein relating to the plan of distribution with respect to such
Registrable Securities, including, without limitation,
information with respect to the number of Registrable Securities
being sold to such underwriters, the purchase price being paid
therefor by such underwriters and any other terms of the
underwritten (or best efforts underwritten) offering of the
Registrable Securities to be sold in such offering; and make all
required filings of such Prospectus supplement or post-effective
amendment as soon as notified of the matters to be incorporated
in such Prospectus supplement or post-effective amendment;
(6) furnish to each selling holder of Registrable Securities
and each managing underwriter, without charge, at least one signed
copy of the Registration Statement and any amendment thereto,
including financial statements and schedules, all documents
incorporated therein by reference and all exhibits (including
those incorporated by reference);
(7) deliver to each selling holder of Registrable Securities
and the underwriters, if any, without charge, as many copies of the
Prospectus (including each preliminary prospectus) and any
amendment or supplement thereto as such selling holder of
Registrable Securities underwriters may reasonably request in
order to facilitate the public sale or other disposition of the
securities owned by such selling holder;
(8) prior to any public offering of Registrable Securities,
use its reasonable best efforts to register or qualify or cooperate
with the selling holders of Registrable Securities, the
underwriters, if any, and their respective counsel in connection
with the Registration or qualification of such Registrable
Securities for offer and sale under the securities or blue sky
laws of such jurisdictions in the United States as any seller or
underwriter reasonably requests in writing, use its reasonable
best efforts to obtain all appropriate registrations, permits and
consents required in connection therewith, and do any and all
other acts or things reasonably necessary or advisable to enable
the disposition in such jurisdictions of the Registrable
Securities covered by the Registration Statement; provided,
however, that the Company will not be required to qualify
generally to do business in any jurisdiction where it is not then
so qualified or to take any action that would subject it to
taxation or general service of process in any such jurisdiction
where it is not then so subject;
(9) cooperate with the selling holders of Registrable Securities
and the managing underwriters, if any, to facilitate the timely
preparation and delivery of certificates representing Registrable
Securities to be sold and not bearing any restrictive legends and
to be in such denominations and registered in such names as the
managing underwriters may request at least two (2) business days
prior to any sale of Registrable Securities to the underwriters;
(10) use its reasonable best efforts to cooperate with any
selling holder to cause the Registrable Securities covered by the
applicable Registration Statement to be registered with or
approved by such other governmental agencies or authorities in
the United States as may be necessary to enable the seller or
sellers thereof or the underwriters, if any, to consummate the
disposition of such Registrable Securities;
(11) upon the occurrence of any event contemplated by subsection
(iii)(F) above, promptly prepare a supplement or post-effective
amendment to the Registration Statement or the related Prospectus
or any document incorporated therein by reference or file any
other required document so that, as thereafter delivered to the
purchasers of the Registrable Securities, the Prospectus will not
contain an untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein not
misleading;
(12) cause all Registrable Securities covered by any Registration
Statement to be listed on each securities exchange on which
similar securities issued by the Company are then listed, or, if
not so listed, cause such Registrable Securities to be authorized
for trading on the NASDAQ National Market System if any similar
securities issued by the Company are then so authorized, if
requested by the holders of a majority of such Registrable
Securities or the managing underwriters, if any;
(13) not later than the effective date of the applicable
Registration, provide a CUSIP number for all Registrable Securities;
(14) enter into such customary agreements (including in the case
of a Demand Registration that is an underwritten offering, an
underwriting agreement in customary form) and take all such other
actions reasonably required in connection therewith in order to
expedite or facilitate the disposition of such Registrable
Securities and in such connection, whether or not an underwriting
agreement is entered into and whether or not the Registration is
an underwritten Registration, (A) make such representations and
warranties to the holders of such Registrable Securities and the
underwriters, if any, in form, substance and scope as are
customarily made by issuers to underwriters in primary
underwritten offerings; (B) use reasonable best efforts to obtain
opinions of counsel to the Company and updates thereof (which
opinions of counsel shall be in form, scope and substance
reasonably satisfactory to the managing underwriters, if any, and
to the holders of a majority of the Registrable Securities being
sold), addressed to each selling holder and the underwriters, if
any, covering the matters customarily covered in opinions
requested in underwritten offerings and such other matters as may
be reasonably requested by such holders and underwriters; (C) use
reasonable best efforts to obtain cold comfort letters and
updates thereof from the Companys independent certified public
accountants addressed to the selling holders of Registrable
Securities and the underwriters, if any, such letters to be in
customary form and covering matters of the type customarily
covered in cold comfort letters by underwriters in connection
with primary underwritten offerings; and (D) deliver such
documents and certificates as may be reasonably requested by the
holders of a majority of the Registrable Securities being sold
and the managing underwriters, if any, to evidence compliance
with subsection (xi) above and with any customary conditions
contained in the underwriting agreement or other agreement
entered into by the Company. All the above in this Section
5(d)(xiv) shall be done at each closing under each underwriting
or similar agreement or as and to the extent required thereunder;
(15) make available for inspection by a representative of each
Demanding Stockholder, any underwriter participating in any
disposition pursuant to such Registration, and any attorney or
accountant retained by the sellers or underwriter, copies or
extracts of all financial and other records, pertinent corporate
documents and properties of the Company as shall be reasonably
necessary, in the opinion of the holders or underwriters counsel,
to enable them to fulfill their due diligence responsibilities;
and cause the Companys officers, directors and employees to
supply all information reasonably requested by any such
representative, underwriter, attorney or accountant in connection
with such Registration Statement; provided, however, that the
Company shall not be required to comply with this paragraph (xv)
unless such person executes confidentiality agreements whereby
such person agrees that any records, information or documents
that are designated by the Company in writing as confidential
shall be kept confidential by such Persons and used only in
connection with the proposed Registration unless disclosure of
such records, information or documents is required by court or
administrative order or any regulatory body having jurisdiction;
and each seller of Registrable Securities agrees that it will,
upon learning that disclosure of such records, information or
documents is sought in a court of competent jurisdiction or by a
governmental agency, give notice to the Company and allow the
Company, at the Companys expense, to undertake appropriate action
to prevent disclosure of any records, information or documents
deemed confidential; provided further, however, notwithstanding
any designation of confidentiality by the Company, confidential
information shall not include information which (i) becomes
generally available to the public other than as a result of a
disclosure by or on behalf of any such Person, or (ii) becomes
available to any such Person on a non-confidential basis from a
source other than the Company or its advisors, provided that such
source is not to such Persons knowledge bound by a
confidentiality agreement with or other obligations of secrecy to
the Company or another party with respect to such information;
(16) otherwise use its reasonable best efforts to comply with
all applicable rules and regulations of the Commission, and make
generally available to its security holders, earnings statements
satisfying the provisions of Section 11(a) of the Securities Act,
no later than forty-five (45) days after the end of any twelve
(12)-month period (or ninety (90) days, if such period is a
fiscal year) (A) commencing at the end of any fiscal quarter in
which Registrable Securities are sold to underwriters in a firm
or best efforts underwritten offering, or (B) if not sold to
underwriters in such an offering, beginning with the first month
of the Companys first fiscal quarter commencing after the
effective date of the Registration Statement, which statements
shall cover said twelve (12)-month periods; and
(17) promptly prior to the filing of any document that is to
be incorporated by reference into any Registration Statement or
Prospectus (after initial filing of the Registration Statement),
provide copies of such document to counsel to the selling holders
of Registrable Securities and to the managing underwriters, if
any, make the Companys executive officers and other representatives
available for discussion of such document and make such changes in
such document prior to the filing thereof as counsel for such
selling holders or underwriters may reasonably request.
The Company may require each seller of Registrable
Securities as to which any Registration is being effected to
furnish to the Company such information regarding the proposed
distribution of such securities as the Company may from time to
time reasonably request in writing. Each holder of Registrable
Securities agrees by acquisition of such Registrable Securities
that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 5(d)(xi),
such holder shall forthwith discontinue disposition of
Registrable Securities until such holders receipt of the copies
of the supplemented or amended prospectus contemplated by Section
5(d)(xi), or until it is advised in writing (the Advice) by the
Company that the use of the Prospectus may be resumed, and has
received copies of any additional or supplemental filings that
are incorporated by reference in the Prospectus; and, if so
directed by the Company, such holder shall deliver to the Company
(at the Companys expense) all copies, other than permanent file
copies then in such sellers possession, of the Prospectus
covering such Registrable Securities current at the time of
receipt of such notice. In the event the Company gives any such
notice, the time periods regarding the maintenance of the
effectiveness of any Registration Statement in Sections 5(d)(ii)
shall be extended by the number of days during the period from
and including the date of the receipt of such notice pursuant to
Section 5(d)(iii)(F) hereof to and including the date when each
seller of Registrable Securities covered by such Registration
Statement shall have received the copies of the supplemented or
amended prospectuses contemplated by Section 5(d)(xi) or the
Advice.
(5) Indemnification.
(1) In the event of the Registration or qualification of
any Registrable Securities under the Securities Act or any other
applicable securities laws pursuant to the provisions of this
Section 5, the Company agrees to indemnify and hold harmless each
Stockholder thereby offering such Registrable Securities for sale
(an Indemnified Stockholder), underwriter, broker or dealer, if
any, of such Registrable Securities, and each other person, if
any, who controls any such Indemnified Stockholder, underwriter,
broker or dealer within the meaning of the Securities Act or any
other applicable securities laws, from and against any and all
losses, claims, damages, expenses or liabilities (or actions in
respect thereof), joint or several, to which such Indemnified
Stockholder, underwriter, broker or dealer or controlling person
may become subject under the Securities Act or any other
applicable federal or state securities laws or otherwise, insofar
as such losses, claims, damages, expenses or liabilities (or
actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact
contained in any Registration Statement under which such
Registrable Securities were registered or qualified under the
Securities Act or any other applicable securities laws, any
preliminary prospectus or final prospectus relating to such
Registrable Securities, or any amendment or supplement thereto,
or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not
misleading, or any violation by the Company of any rule or
regulation under the Securities Act or any other applicable
federal or state securities laws applicable to the Company or
relating to any action or inaction required by the Company in
connection with any such Registration or qualification, and will
reimburse each such Indemnified Stockholder, underwriter, broker
or dealer and each such controlling person for any legal or other
expenses reasonably incurred by such Indemnified Stockholder,
underwriter, broker or dealer or controlling person in connection
with investigating or defending any such loss, claim, damage,
expense, liability or action; provided, however, that the Company
will not be liable in any such case to the extent that any such
loss, claim, damage, expense or liability arises out of or is
based upon an untrue statement or omission contained in such
Registration Statement, such preliminary prospectus, such final
prospectus or such amendment or supplement thereto, made in
reliance upon and in conformity with written information
furnished to the Company by such Indemnified Stockholder,
underwriter, broker, dealer or controlling person specifically
and expressly for use in the preparation thereof or by the
failure of such Indemnified Stockholder, underwriter, broker or
dealer, or controlling person to deliver a copy of the
Registration Statement, such preliminary prospectus, such final
prospectus or such amendment or supplement thereto after the
Company has furnished such party with a sufficient number of
copies of the same and such party failed to deliver or otherwise
provide a copy of the final prospectus to the person asserting an
untrue statement or omission or alleged untrue statement or
omission at or prior to the written confirmation of the sale of
securities to such person, if such statement or omission was in
fact corrected in such final prospectus.
(2) In the case of an underwritten offering in which the
Registration Statement covers Registrable Securities, the Company
agrees to enter into an underwriting agreement in customary form
and substance with such underwriters and to indemnify the
underwriters, their officers and directors, if any, and each
person, if any, who controls such underwriters within the meaning
of Section 15 of the Securities Act and Section 20 of the
Exchange Act, to the same extent as provided in the preceding
paragraph with respect to the indemnification of the holders of
Registrable Securities; provided, however, the Company shall not
be required to indemnify any such underwriter, or any officer or
director of such underwriter or any person who controls such
underwriter within the meaning of Section 15 of the Securities
Act and Section 20 of the Exchange Act, to the extent that the
loss, claim, damage, expense or liability (or actions in respect
thereof) for which indemnification is sought results from such
underwriters failure to deliver or otherwise provide a copy of
the final prospectus to the person asserting an untrue statement
or omission or alleged untrue statement or omission at or prior
to the written confirmation of the sale of securities to such
person, if such statement or omission was in fact corrected in
such final prospectus.
(3) In the event of the Registration or qualification of any
Registrable Securities of the Stockholders under the Securities
Act or any other applicable federal or state securities laws for
sale pursuant to the provisions hereof, each Indemnified
Stockholder agrees severally, and not jointly, to indemnify and
hold harmless the Company, each person who controls the Company
within the meaning of the Securities Act, and each officer and
director of the Company from and against any losses, claims,
damages, expenses or liabilities (or actions in respect thereof),
joint or several, to which the Company, such controlling person
or any such officer or director may become subject under the
Securities Act or any other applicable securities laws or
otherwise, insofar as such losses, claims, damages, expenses or
liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement of any material fact contained in
any Registration Statement under which such Registrable
Securities were registered or qualified under the Securities Act
or any other applicable securities laws, any preliminary
prospectus or final prospectus relating to such Registrable
Securities, or any amendment or supplement thereto, or arise out
of or are based upon an untrue statement therein or the omission
to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, which
untrue statement or omission was made therein in reliance upon
and in conformity with written information furnished to the
Company by such Indemnified Stockholder specifically and
expressly for use in connection with the preparation thereof, and
will reimburse the Company, such controlling person and each such
officer or director for any legal or any other expenses
reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, expense, liability or
action; provided, however, an Indemnified Stockholders liability
under this Section 5(e)(iii) shall not exceed the net proceeds
received by such Indemnified Stockholder with respect to the sale
of any Registrable Securities.
(4) In the case of an underwritten offering of Registrable
Securities, each holder of a Registrable Security included in a
Registration Statement shall agree to enter into an underwriting
agreement in customary form and substance with such underwriters,
and to indemnify such underwriters, their officers and directors,
if any, and each person, if any, who controls such underwriters
within the meaning of Section 15 of the Securities Act and
Section 20 of the Exchange Act, to the same extent as provided in
the preceding paragraph with respect to indemnification by such
holder of the Company, but subject to the same limitation as
provided in Section 5(e)(ii) with respect to indemnification by
the Company of such underwriters, officers, directors and control
persons.
(5) Promptly after receipt by a person entitled to
indemnification under this Section 5(e) (an Indemnified Party) of
notice of the commencement of any action or claim relating to any
Registration Statement filed under this Section 5 as to which
indemnity may be sought hereunder, such Indemnified Party will,
if a claim for indemnification hereunder in respect thereof is to
be made against any other party hereto (an Indemnifying Party),
give written notice to each such Indemnifying Party of the
commencement of such action or claim, but the omission to so
notify each such Indemnifying Party will not relieve any such
Indemnifying Party from any liability which it may have to any
Indemnified Party otherwise than pursuant to the provisions of
this Section 5(e) and shall also not relieve any such
Indemnifying Party of its obligations under this Section 5(e)
except to the extent that any such Indemnifying Party is actually
prejudiced thereby. In case any such action is brought against
an Indemnified Party, and such Indemnified Party notifies an
Indemnifying Party of the commencement thereof, such Indemnifying
Party will be entitled (at its own expense) to participate in
and, to the extent that it may wish, jointly with any other
Indemnifying Party similarly notified, to assume the defense,
with counsel reasonably satisfactory to such Indemnified Party,
of such action and/or to settle such action and, after notice
from the Indemnifying Party to such Indemnified Party of its
election so to assume the defense thereof, the Indemnifying Party
will not be liable to such Indemnified Party for any legal or
other expenses subsequently incurred by such Indemnified Party in
connection with the defense thereof, other than the reasonable
cost of investigation; provided, however, that no Indemnifying
Party shall consent to the entry of any judgment or enter into
any settlement agreement without the prior written consent of the
Indemnified Party unless such Indemnified Party is fully released
and discharged from any such liability, and no Indemnified Party
shall consent to the entry of any judgment or enter into any
settlement of any such action the defense of which has been
assumed by an Indemnifying Party without the consent of each
Indemnifying Party. Notwithstanding the foregoing, the
Indemnified Party shall have the right to employ its own counsel
in any such case, but the fees and expenses of such counsel shall
be at the expense of such Indemnified Party unless (a) the
employment of such counsel shall have been authorized in writing
by the Indemnifying Party in connection with the defense of such
suit, action, claim or proceeding; (b) the Indemnifying Party
shall not have employed counsel (reasonably satisfactory to the
Indemnified Party) to take charge of the defense of such action,
suit, claim or proceeding; or (c) such Indemnified Party shall
have reasonably concluded, based upon the advice of counsel, that
there may be defenses available to it which are different from or
additional to those available to the Indemnifying Party which, if
the Indemnifying Party and the Indemnified Party were to be
represented by the same counsel, could result in a conflict of
interest for such counsel or materially prejudice the prosecution
of the defenses available to such Indemnified Party. If any of
the events specified in clauses (a), (b) or (c) of the preceding
sentence shall have occurred or shall otherwise be applicable,
then the fees and expenses of one counsel or firm of counsel
selected by a majority in interest of the indemnified parties
(and reasonably acceptable to the Indemnifying Party) shall be
borne by the Indemnifying Party. If, in any such case, the
Indemnified Party employs separate counsel, the Indemnifying
Party shall not have the right to direct the defense of such
action, suit, claim or proceeding on behalf of the Indemnified
Party and the Indemnified Party shall assume such defense and/or
settle such action; provided, however, that an Indemnifying Party
shall not be liable for the settlement of any action, suit,
claim or proceeding effected without its prior written consent,
which consent shall not be unreasonably withheld.
The provisions of this Section 5(e) shall be in addition to
any liability which any party may have to any other party and
shall survive any termination of this Agreement.
(6) Contribution. If for any reason the indemnification
provided for in Section 5(e)(i) or 5(e)(iii) is unavailable to
an Indemnified Party as contemplated therein, then the
Indemnifying Party, in lieu of indemnification shall contribute
to the amount paid or payable by the Indemnified Party as a
result of such loss, claim, damage, expense or liability (or
action in respect thereof) in such proportion as is appropriate
to reflect not only the relative benefits received by the
Indemnified Party and the Indemnifying Party, but also the
relative fault of the Indemnified Party and the Indemnifying
Party, as well as any other relevant equitable considerations,
provided that no Stockholder shall be required to contribute in
an amount greater than the difference between the net proceeds
received by such Stockholder with respect to the sale of any
Registrable Securities and all amounts already contributed by
such Stockholder with respect to such claims, including amounts
paid for any legal or other fees or expenses incurred by such
Stockholder. No person guilty of a fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall
be entitled to contribution from any person who was not guilty of
any such fraudulent misrepresentation. The relative fault of
such Indemnifying Party and Indemnified Party shall be determined
by reference to, among other things, whether any action in
question, including any untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material
fact, has been made by, or relates to information supplied by,
such Indemnifying Party or Indemnified Party, and the parties
relative intent, knowledge, access to information and opportunity
to correct or prevent such action.
(7) Registration Expenses. Except as hereinafter provided,
all expenses incident to the Companys performance of or compliance
with this Section 5 will be borne by the Company, including,
without limitation, all Registration and filing fees under the
Securities Act and the Exchange Act, the fees and expenses of the
counsel and accountants for the Company (including the expenses
of any cold comfort letters and special audits required by or
incident to the performance of such persons), all other costs and
expenses of the Company incident to the preparation, printing and
filing under the Securities Act of the Registration Statement
(and all amendments and supplements thereto), and furnishing
copies thereof and of the Prospectus included therein, all out-of-
pocket expenses of underwriters customarily paid for by issuers
to the extent provided for in any underwriting agreement, the
costs and expenses incurred by the Company in connection with the
qualification of the Registrable Securities under the state
securities or blue sky laws of various jurisdictions, the costs
and expenses associated with filings required to be made with the
NASD, the costs and expenses of listing the Registrable
Securities for trading on a national securities exchange or
authorizing them for trading on NASDAQ and all other costs and
expenses incurred by the Company in connection with any
Registration hereunder. In addition, the Company shall pay or
reimburse the sellers of Registrable Securities the reasonable
fees and expenses of one attorney to such sellers incurred in
connection with a registration (collectively, with the expenses
referred to in the immediately preceding sentence, the
Registration Expenses). Except as provided in the immediately
preceding sentence, each Stockholder shall bear the costs and
expenses of any underwriters discounts and commissions, brokerage
fees or transfer taxes relating to the Registrable Securities
sold by such Stockholder and the fees and expenses of any
attorneys, accountants or other representatives retained by the
Stockholder.
(8) Participation in Underwritten Registrations. No
Stockholder may participate in any underwritten Registration
hereunder unless such Stockholder (i) agrees to sell its Registrable
Securities on the basis provided in any customary and reasonable
underwriting arrangements approved by the persons entitled
hereunder to select the underwriter, and (ii) accurately
completes in a timely manner and executes all questionnaires,
powers of attorney, underwriting agreements, indemnities and
other documents customarily required under the terms of such
underwriting arrangements.
(9) Holdback Agreements.
(1) Each holder of Registrable Securities whose securities
are included in a Registration Statement agrees not to effect any
public sale or distribution of the issue being registered or a
similar security of the Company, or any securities convertible
into or exchangeable or exercisable for such securities,
including a sale pursuant to Rule 144 or Rule 144A under the
Securities Act, during the fifteen (15) days prior to, and during
the ninety (90)-day period (or such longer period as requested by
the managing underwriter or underwriters in the case of an
underwritten public offering) beginning on, the effective date of
such Registration Statement (except as part of such
Registration), if and to the extent requested by the managing
underwriter or underwriters in an underwritten public offering.
(2) The Company agrees not to effect any public sale or
distribution of the issue being registered or a similar security
of the Company, or any securities convertible into or
exchangeable or exercisable for such securities (other than any
such sale or distribution of such securities in connection with
any merger or consolidation by the Company or any Subsidiary or
the acquisition by the Company or any Subsidiary of the capital
stock or substantially all of the assets of any other Person),
during the fifteen (15) days prior to, and during the ninety (90)-
day period beginning on, the effective date of each Demand
Registration.
(10) Public Information Reporting. The Company hereby
covenants and agrees to and with the Stockholders that at all times
following the IPO Date it shall provide and file such financial
and other information concerning the Company as may from time to
time be required by the Commission and any other governmental
authority having jurisdiction, so as to comply with all reporting
requirements under the Exchange Act, and shall, upon request,
state in writing that it has complied with all such requirements,
and further agrees that, for so long as (following the IPO Date)
the Company is not subject to Section 13 or 15(d) of the Exchange
Act, the Company shall comply in all respects with paragraph
(c)(2) of Rule 144.
6. Disqualifying Transactions.
6.1 Company Conversion Rights. In the event AT&T PCS
terminates its obligations under Section 8.6 pursuant to Section
8.8(c) with respect to any Overlap Territory, the Company shall
have the following rights which may be exercised by the Company in
its sole discretion during the sixty (60) day period commencing on
the date of such termination:
(1) (i) The Company shall have the right in
accordance with the Restated Certificate to cause AT&T PCS and
such Section 4.8 Transferee (as defined in the Restated
Certificate) to exchange either (A) all, or (B) a proportionate
number of shares of Series A Preferred Stock then owned by AT&T
PCS and each Section 4.8 Transferee equal to a fraction, the
numerator of which is the number of POPS in the Overlap Territory
and the denominator of which is the total number of POPS in the
Territory, of the shares of Series A Preferred Stock then owned
by AT&T PCS and each Section 4.8 Transferee for an equivalent
number of shares of Series B Preferred Stock determined in
accordance with the Restated Certificate; and
(ii) The Company shall have the right in
accordance with the Restated Certificate to cause AT&T PCS and
each Section 4.8 Transferee to exchange either (A) all or (B) a
proportionate number equal to a fraction, the numerator of which
is the number of 38 POPs in the Overlap Territory, and the
denominator of which is the total number of POPs in the
Territory, of the shares of Series D Preferred Stock owned by
AT&T PCS on the date hereof (or Series C Preferred Stock or
Common Stock into which such shares shall have been converted)
and that AT&T PCS continues to own on the date such right is
exercised by the Company for that number of shares of Series B
Preferred Stock as shall be equal to the aggregate purchase price
paid by AT&T PCS for all of such shares of Series D Preferred
Stock, Series C Preferred Stock or Common Stock that AT&T PCS or
such Section 4.8 Transferee then owns (including any Series C
Preferred Stock or Common Stock into which such Series D
Preferred Stock shall have been converted) divided by the
liquidation preference of the Series B Preferred Stock determined
in accordance with the Restated Certificate; provided, however,
that (x) if the Company exercises its right under clause (i)(A)
of this Section 6.1(a) it shall be required to exercise its right
under clause (ii)(A) of this Section 6.1(a), and vice versa; and
if the Company exercises its right under clause (i)(B) of the
Section 6.1(a) it shall be required to exercise its right under
clause (ii)(B) of this Section 6.1(a) and vice versa, and (y)
the provisions of this Section 6.1(a) shall not apply to any
Section 4.8 Transferee which is a Cash Equity Investor.
(2) The Company may redeem the shares of Series B Preferred
Stock at any time as provided in the Restated Certificate.
6.2 Joint Marketing Right. During the period commencing on
the date of announcement by AT&T PCS of a transaction meeting the
description of a transaction set forth in clauses (a), (b) and
(c) of the definition of a Disqualifying Transaction (unless AT&T
PCS notifies the Company it has waived its right to declare such
transaction a Disqualifying Transaction in which event, this
Section 6.2 shall not be applicable to such transaction) and
terminating on the later of (x) six (6) months after the date of
consummation of such transaction, and (y) if applicable, the date
by which AT&T PCS is required under applicable law to dispose of
any PCS System or Cellular System serving a Subject Market (the
Section 6.2 Period), the following provisions shall apply:
(1) If AT&T PCS proposes to sell, transfer or assign to any
Person which is not an Affiliate of AT&T PCS any Subject Market,
AT&T PCS shall give written notice (the Company Sale Notice) to
the Company and the Company shall have the right, exercisable by
written notice given within ten (10) days of receipt of the
Company Sale Notice, to elect to cause AT&T PCS to offer for sale
jointly with the Company for a period of one hundred eighty (180)
days the Subject Markets covered by the Company Sale Notice
together with all of the Territory included in the MTA that
includes the Subject Markets (the Joint Marketing Period). In
the event that AT&T PCS has granted similar rights to the rights
set forth in this Section 6.2 to any Permitted Merger Participant
and any Subject Market is also a Subject Market under the terms
of any agreement between AT&T PCS and any such Permitted Merger
Participant, the Company agrees that any territory of the
Permitted Merger Participant that is required under the terms of
such agreement to be offered for sale jointly with any Subject
Markets shall be offered for sale jointly with such Subject
Markets and all of the Territory included in the MTA that
includes such Subject Markets. During the Joint Marketing
Period, AT&T PCS shall not sell the Subject Markets other than in
a transaction that includes the Subject Markets and the Territory
included in the MTA that includes the Subject Markets, provided,
however, that neither AT&T PCS nor the Company shall be obligated
to enter into a transaction for such Subject Markets and such
Territory other than on terms acceptable to each of them in their
sole discretion. This Section 6.2 shall cease to apply to any
Subject Market upon the earlier of (x) if the Company fails to
make the joint marketing election with respect to the applicable
Subject Market within the ten (10) day period referred to above,
the expiration of such ten (10) day period, or (y) if the Company
makes the joint marketing election with respect to the applicable
Subject Market, upon the expiration of the Joint Marketing
Period.
(2) Nothing contained in this Section 6.2 shall (x) be construed
to require AT&T PCS to deliver a Company Sale Notice with respect
to any Subject Market except during the Section 6.2 Period, (y)
extend the obligation of AT&T PCS set forth in this Section 6.2
beyond the expiration of the Section 6.2 Period or (z) apply to
any sale, transfer or assignment of any Subject Market pursuant
to an agreement executed on any date not within the Section 6.2
Period.
(3) Nothing in this Agreement shall be construed to require
AT&T PCS to deliver the notice described in clause (d) of the
definition of a Disqualifying Transaction, including, without
limitation, circumstances in which AT&T PCS or its Affiliates
enters into any transaction meeting the description of a
transaction set forth in clauses (a), (b) and (c) of the
definition of a Disqualifying Transaction.
7. Additional Rights and Covenants.
7.1 [Intentionally Omitted]
7.2 [Intentionally Omitted]
7.3 Access. The Company shall permit, and shall cause each of
its Subsidiaries to permit, upon reasonable notice, during
normal business hours, each Qualified Holder and Desai, for so
long as it has the right to an observer to the Board of Directors
pursuant to Section 3.1, and its directors, officers, employees,
attorneys, accountants, representatives, consultants and other
agents, at the sole expense of such Qualified Holder, to (a)
visit and inspect any of the properties and facilities of the
Company and its Subsidiaries, (b) examine and make copies of and
extracts from the corporate and financial records of the Company
and its Subsidiaries, (c) discuss the affairs, finances and
accounts of the Company or any such Subsidiary with any of its
officers, directors and key employees and its independent
accountants, and (d) otherwise investigate the properties,
businesses and operations of the Company and its Subsidiaries, in
each case as such Qualified Holder reasonably deems necessary;
provided, however, that (i) each Qualified Holder may exercise
its rights pursuant to this Section 7.3 no more than three times
in any 12-month period and (ii) J.P. Morgan shall not have any of
the rights afforded to any Qualified Holder in this Section 7.3.
The Company shall, and shall cause each of its Subsidiaries and
the officers, directors and employees of the Company and its
Subsidiaries to, cooperate fully in connection with such
inspection, examinations and discussions. The presentation of a
copy of this Agreement by any Qualified Holder to the independent
accountants of the Company or any of its Subsidiaries shall
constitute permission by the Company or such Subsidiary to its
independent accountants to participate in discussions with such
Qualified Holder.
7.4 Merger, Sale or Liquidation of the Company.
(1) Except for transactions permitted pursuant to Section 7.11
and to the extent permitted in this Section 7.4, the Company
shall not, and shall not permit any of its Subsidiaries to,
except with the prior written consent of AT&T PCS or in
accordance with Sections 7.4(b) and 7.4(c), effect (i) any
merger, combination or consolidation of the Company or such
Subsidiary with or into any other entity (regardless of whether
the Company or such Subsidiary is the surviving entity in any
such transaction) (any such merger, combination or consolidation
is referred to as a Company Merger), (ii) any sale or disposition
of a substantial portion of its assets (a Company Asset Sale), or
(iii) the liquidation, dissolution or winding up of the Company
or such Subsidiary.
(2) The Company and its Subsidiaries may effect a Company
Merger, without the prior written consent of AT&T PCS, (i) in
which the only constituent corporations are two or more of the
Companys wholly owned Subsidiaries, (ii) in which the only
constituent corporations are the Company and one or more of its
wholly owned Subsidiaries and the Company is the surviving
corporation, or (iii) between a Subsidiary of the Company and
another entity for the purpose of acquiring such other entity;
provided, that (x) such transaction does not affect the capital
structure of the Company, except to the extent the Company issues
common stock to the stockholders of the other entity pursuant to
the terms of such Company Merger, (y) the surviving corporation
is a direct or indirect wholly owned Subsidiary of the Company,
and (z) the consummation of such transaction does not violate
Section 8.1(a).
(3) The Company and its Subsidiaries may effect any of the
transactions described in clauses (i) or (ii) of Section 7.4(a)
(a Sale Transaction), without the prior written consent of AT&T
PCS, if (a) such transaction has no material effect on AT&T PCS
equity interest in the Company (and the seniority thereof) or its
rights under this Agreement, (b) the Companys direct or indirect
interest in its assets is unaffected by such transaction in any
material respect, and (c) such transaction is otherwise
equivalent in all material respects to AT&T PCS to the sale by
each of the other Stockholders of its equity interests in the
Company for cash or marketable securities; provided, that any
such Sale Transaction shall nevertheless be subject to a right
of first offer in accordance with the provisions of Section
7.4(d).
(4) Prior to entering into a Sale Transaction, the Company
shall give written notice (the Sale Notice) to AT&T PCS. Each Sale
Notice shall describe in reasonable detail all material terms of
the proposed Sale Transaction. The Sale Notice shall constitute
an irrevocable offer (a Sale Offer) to enter into the Sale
Transaction with AT&T PCS on the terms set forth in the Sale
Notice. AT&T PCS shall have the irrevocable right and option,
but not the obligation, to accept the Sale Offer in whole but not
in part by giving written notice of its acceptance of such offer
within thirty (30) days of the date of the Sale Notice is given.
The Sale Transaction shall be closed at the principal executive
offices of the Company within thirty (30) days after the
acceptance by AT&T PCS of the Sale Offer; provided, however,
that, if the Sale Transaction is subject to the consent of the
FCC or any public service or public utilities commission, the
Sale Transaction shall be closed on the fifth business day after
all such consents shall have been obtained by Final Order. If
AT&T PCS declines (which shall include the failure to give timely
notice of acceptance) to accept the Sale Offer, the Company shall
have the right (for a period of ninety (90) days following the
expiration of the thirty (30) day acceptance period referred to
above) to close a Sale Transaction on the terms described in the
Sale Offer (except that the price must be at least 95% of the
price set forth in the Sale Offer); provided, however, that, if
the consent of the FCC or any public service or public utilities
commission is required, the Sale Transaction may be closed not
later than the fifth business day after all such consents shall
have been obtained by Final Order. If, after giving a Sale
Offer, the Company does not close a Sale Transaction in
accordance with the terms of the immediately preceding sentence,
the Company shall not effect any Sale Transaction without giving
another Sale Notice in accordance with this Section 7.4(d).
7.5 Wholly-Owned Subsidiaries. All of the Companys
Subsidiaries shall be direct or indirect wholly owned Subsidiaries
of the Company, and the Company shall not, and shall not permit any
Subsidiary to, sell or issue, transfer, encumber or otherwise
dispose of any shares of capital stock of any of the Companys
Subsidiaries to any Person other than the Company and its direct
or indirect wholly owned Subsidiaries, except for a pledge of any
such shares in connection with the incurrence of indebtedness.
7.6 [Intentionally Omitted]
7.7 Confidentiality.
(1) Each party shall, and shall cause each of its Affiliates,
and its and their respective stockholders, members, managers,
directors, officers, employees and agents (collectively
Representatives) to, keep secret and retain in strictest
confidence any and all information relating to the Company or any
other party that is designated in writing by the party providing
such information or the Company as confidential (Confidential
Information) and shall not disclose such information, and shall
cause its Representatives not to disclose such information, to
anyone except such Affiliates, Representatives or any other
Person that agrees in writing to keep in confidence all such
information in accordance with the terms of this Section 7.7.
Each party agrees to use such information received from another
party or the Company only in connection with its ownership
interest in the Company but not for any other purpose. All such
information furnished pursuant to this Agreement shall be
returned promptly to the party to whom it belongs upon request by
such party.
(2) To the fullest extent permitted by law, if a party or any
of its Affiliates or Representatives breaches, or threatens to
commit a breach of, this Section 7.7, the party whose Confidential
Information shall be disclosed, or threatened to be disclosed, shall
have the right and remedy to have this Section 7.7 specifically
enforced by any court having jurisdiction, it being acknowledged and
agreed that money damages will not provide an adequate remedy to such
party. Nothing in this Section 7.7 shall be construed to limit the
right of any party to collect money damages in the event of breach
of this Section 7.7.
(3) 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 partys
Affiliates, in any filing with any regulatory agency, court or
other authority or any disclosure to a trustee of public debt of
a party to the extent that the disclosing party determines in
good faith that it is required by Law, regulation or the terms of
such debt to do so; provided, however, that any such disclosure
shall be as limited in scope as possible and shall be made only
after giving the other party as much notice as practicable of
such required disclosure and an opportunity to contest such
disclosure if possible.
7.8 [Intentionally Omitted]
7.9 AT&T PCS Retained Licenses. In the event that AT&T PCS
desires to Transfer all or any of the AT&T PCS Retained Licenses
in the Territory at any time prior to February 4, 2006, AT&T PCS
shall give written notice thereof to the Company at least thirty
(30) days prior to entering into a binding agreement to sell such
AT&T PCS Retained Licenses in the Territory such notice to
specify among other things, the AT&T PCS Retained Licenses in the
Territory that it desires to sell. For a period of thirty (30)
days after the date such notice is given, the Company shall have
the right to negotiate with AT&T PCS with respect to the purchase
of all, but not less than all, of such AT&T Retained Licenses in
the Territory; it being understood and agreed that such right
shall not be deemed to be a right of first offer or right of
first refusal for the benefit of the Company and AT&T PCS shall
have the right to reject any offer made by the Company during
such thirty (30) day period. In the event no binding agreement
to sell all or any of such AT&T PCS Retained Licenses in the
Territory is entered into prior to the expiration of the one
hundred and eighty (180) day period following the expiration of
such (30) day period, such Licenses shall become subject once
again to the provision and restrictions hereof.
7.10 Regulatory Cooperation. Each of the Stockholders severally
agrees to comply with the last sentence of Section 6.7 of the
Securities Purchase Agreement.
7.11 Permitted Transactions. Notwithstanding the terms of
Section 7.4(a) and 8.4(a):
(1) after completion of the Minimum Build-Out Plan and
certification that Company Systems meet the TDMA Quality
Standards, the Company and its Subsidiaries may effect a merger,
combination of consolidation with or into a Permitted Merger
Participant or acquire all or substantially all of the assets of
a Permitted Merger Participant or sell all or substantially all
of the assets of the Company and its Subsidiaries to a Permitted
Merger Participant (any such transaction being referred to as a
Permitted Consolidation Transaction), so long as such transaction
is approved by the Board of Directors and the holders of the
Companys capital stock to the extent such approval is required
pursuant to the Restated Certificate or applicable law; and
(2) the Company may acquire FCC Licenses (each such License
a Permitted Cellular License) authorizing the holder to provide in
a specified geographic area using specified frequencies in
respect of which the Board of Directors has determined that the
acquisition of such License (and any other assets being acquired
together therewith) is a demonstrably superior alternative to
constructing a PCS System in the applicable area within the PCS
Territory, provided that, (i) a majority of the POPs included in
the geographic area covered by such License are within the PCS
Territory, (ii) none of AT&T PCS, any Affiliate thereof or any
AT&T Licensee owns an interest in an FCC License to provide
Commercial Mobile Radio Service in such geographic area, and
(iii) the ownership of such License will not conflict with, or
cause AT&T PCS, any Affiliate thereof or any AT&T Licensee to be
in violation or breach of any agreement, instrument, Law or
License applicable to or binding upon such Person or its assets.
Notwithstanding the foregoing, the Company shall not acquire any
Permitted Cellular License if the acquisition of such License
would adversely affect the Companys ability to satisfy its
obligations under the first sentence of Section 8.1(b).
8. Operating Arrangements.
8.1 Construction of Company Systems.
(1) The Company hereby agrees to construct, or cause its
Subsidiaries to construct, Company Systems covering the Territory
on a schedule no less rapid than is set forth in the Minimum
Build-Out Plan. Company Systems shall be technologically
compatible in all material respects with systems being used in a
Majority of the Southeast Region (including without limitation
for the purpose of facilitating roaming and handoff between
systems), and will to the extent technologically feasible
implement the same User Interface as such systems, with the
intention that the User Interface in Company Systems will not
differ from the User Interface in a Majority of the Southeast
Region in a manner that would be material to customers.
(2) The Company and AT&T PCS hereby agree that the Company
shall assume and be obligated to satisfy the construction requirements
set forth in 47 CFR 24.203 with respect to the AT&T PCS Retained
Licenses in the Territory and the AT&T PCS Contributed Licenses.
The Company and AT&T PCS agree from time to time at the request
of the Company or AT&T PCS, as applicable, to provide the other
with information concerning the status of construction of its PCS
Systems to enable such party to determine the level of compliance
with such construction requirements with respect to the AT&T PCS
Retained Licenses and AT&T PCS Contributed Licenses, as
applicable.
(3) The Company will arrange for all necessary microwave
relocation in connection with the AT&T PCS Contributed Licenses
and pay, assume or (if applicable) reimburse AT&T PCS or its
Affiliates for any obligation to pay, any reasonable costs
incurred by it or AT&T PCS in connection with any such microwave
relocation, provided, that nothing contained herein shall require
the Company to pay any costs incurred in connection with
microwave relocation in connection with the AT&T PCS Retained
Licenses.
8.2 Service Features. Company Systems will offer the Core
Service Features. Company Systems will also offer, at the
written request of AT&T PCS, additional service features that
AT&T PCS has notified the Company it will provide in a Majority
of the Southeast Region, unless the Board of Directors reasonably
determines that the provision of such additional features would
be financially detrimental to the Company. Unless the Board of
Directors makes such a determination, any such additional
features shall be adopted within one hundred twenty (120) days
after the request by AT&T PCS. The Critical Network Elements are
set forth on Schedule XI.
8.3 Quality Standards. The Company shall use commercially
reasonable efforts to cause the Company Systems to comply with
the TDMA Quality Standards. Without limiting the foregoing, with
respect to each material portion of a Company System (such as a
city) that the Company places in commercial service, on or prior
to the first anniversary of the date such material portion is
placed in commercial service, the Company shall cause each such
material portion to achieve a level of compliance with the TDMA
Quality Standards equal to at least the average level of
compliance achieved by comparable PCS and Cellular Systems owned
and operated by AT&T PCS taking into account, among other things,
the relative stage of development thereof. In the event that the
Company fails to achieve such level of compliance, the Company
shall not be deemed to be in material breach of this provision if
such noncompliance is cured within thirty (30) days of notice
thereof from AT&T PCS to the Company, or, if such breach is not
capable of being cured within such thirty (30) day period using
commercially reasonable efforts, within one hundred eighty (180)
days of such notice, provided the Company is using commercially
reasonable efforts to cure such material breach as soon as
reasonably practicable.
8.4 No Change of Business.
(1) Subject to Section 7.11, the Company will not, and will
not permit any of its Subsidiaries to, without obtaining the prior
written consent of AT&T PCS, do any of the following: (i)
conduct, directly or indirectly, any business other than the
Business, (ii) make any material change to the Minimum Build Out
Plan in the Territory, or (iii) effect any transaction, agreement
or arrangement which has or could reasonably be expected to have
the effect of materially impairing or materially limiting the
ability of (x) subscribers to Cellular Systems and PCS Systems in
which AT&T PCS or its Affiliates have an ownership interest to
utilize the Company Systems for roaming, or (y) AT&T PCS or its
Affiliates to resell wireless service on the Company Systems; it
being understood that clause (i) shall not be deemed to restrict
the business of the Company in any Overlap Territory.
(2) [Intentionally Omitted]
(3) If at any time during the term of this Agreement AT&T
PCS and its Affiliates determine to discontinue use of TDMA in a
Majority of the United States: (i) the Company will have the
right to cease to use TDMA and may adopt the new technology
adopted by AT&T PCS and its Affiliates in a Majority of the
United States or implement any other alternative technology in
Company Systems, and, if it exercises such right, the definition
of Company Systems shall be automatically deemed to be modified
by substituting a reference to such new or alternative technology
in lieu of the reference in such definition to TDMA, and (ii) the
obligations of AT&T PCS and its Affiliates pursuant to Section
8.6 shall terminate and be of no further force or effect, unless
within sixty (60) days of notice by AT&T PCS to the Company
specifying that AT&T PCS and its Affiliates have determined to
discontinue use of TDMA in a Majority of the United States, the
Company agrees to implement in Company Systems on a reasonable
schedule the new technology adopted by AT&T PCS and its
Affiliates in a Majority of the United States. In the event AT&T
PCS desires to test any technology that is an alternative to TDMA
in any PCS System or Cellular System contiguous to the Territory,
AT&T PCS hereby agrees to notify the Company at least thirty (30)
days before conducting such test and will conduct such tests in a
manner that does not have a material adverse effect on the
Company.
8.5 Preferred Provider.
(1) The Company and its Subsidiaries shall not market, offer,
provide or resell interexchange services, except (i)
interexchange services that constitute Company Communication
Services and (ii) interexchange services procured from AT&T Corp.
or an Affiliate thereof designated by AT&T Corp. Such
interexchange services shall be provided by AT&T Corp. or such
Affiliate at a reasonable rate per minute, subject to mutual
agreement as to all the terms of the agreement to provide such
services, including, without limitation, the volume commitment
and duration.
(2) With respect to services other than interexchange services,
when the Company or a Subsidiary does not itself develop, or is
not permitted to develop, one or more telecommunications services
that are offered or provided in connection with the conduct of
its Business (including, by way of example, local telephone
services or voicemail), but instead procures such services, the
Company shall request in writing that AT&T PCS provide such
services (directly or through an Affiliate designated by it) and,
provided, that AT&T PCS (or a designated Affiliate) offers to
provide such telecommunication services to the Company on
reasonably competitive terms, the Company or such Subsidiary
shall procure such services from AT&T PCS (or such Affiliate
thereof).
8.6 Exclusivity.
(1) None of the Stockholders or their respective Affiliates
will provide or resell, or act as the agent for any Person offering,
within the Territory, Company Communications Services except
that, AT&T PCS and its Affiliates may (i) resell, or act as the
Companys agent for, Company Communications Services provided by
the Company in accordance with the Resale Agreement (or any other
agreement between AT&T PCS and its Affiliates, on the one hand,
and the Company, on the other hand), including bundling any such
Company Communications Services with other telecommunications
services marketed, offered and provided or resold by such Person,
(ii) provide or resell wireless telecommunications services to or
from specific locations (such as buildings or office complexes),
even if the subscriber equipment used in connection with such
service may be capable of routine movement within a limited area
(such as a building or office complex), and even if such
subscriber equipment may be capable of obtaining other
telecommunications services beyond such limited area (which other
services may include routine movement beyond such limited area)
and handoff between the service to such specific locations and
such other telecommunications services; provided, however, that
if AT&T PCS or any of its Affiliates sells such mobile wireless
subscriber equipment such equipment shall be capable of providing
(but not necessarily on an exclusive basis) Company
Communications Services and (iii) resell Company Communications
Services provided by a Person other than the Company in any
geographical area within the Territory in which the Company has
not placed a Company System into commercial service (it being
understood that in the event that AT&T PCS or any of its
Affiliates that is reselling Company Communication Services of a
Person other than the Company in a geographic area within the
Territory at the time the Company places a portion of a Company
System including such geographic area into commercial service,
AT&T PCS or its Affiliates, as applicable, shall terminate such
resale arrangement with respect to such geographic areas within
thirty (30) days of the date such portion of a Company System is
placed in commercial service). AT&T PCS agrees to provide the
Company with not less than sixty (60) days prior notice of AT&T
PCS intention to engage in any resale activities described in
clause (iii) hereof to provide the Company with the opportunity
to discuss such proposed resale activities with AT&T PCS, such
notice to include (x) a reasonable description of such resale
activities (including, without limitation, the identity, if known
by AT&T PCS at such time, of the Person AT&T PCS intends to
engage to provide such Company Communication Services) and (y)
AT&T PCS confirmation that only dual band/dual mode phones shall
be used in connection with such resale activities. AT&T PCS
further agrees that upon a Company System being placed into
commercial operation in any such geographic area within the
Territory it will transfer all of its subscribers in such
geographic area to the Company System either directly to the
Company or on the terms and subject to the conditions contained
in the Resale Agreement. In connection with any such transfer,
AT&T PCS will use its best efforts to facilitate such transfer,
including cooperating with the Company regarding the form(s) of
notice to be sent to such subscribers informing them of such
transfer. To the extent the other telecommunications services
referred to in clause (ii) of the first sentence of this Section
8.6(a) constitute Company Communications Services, neither AT&T
PCS nor any of its Affiliates may provide or resell, or act as
agent for any Person offering, such other telecommunications
services except in accordance with the terms of clause (i) of the
first sentence of this Section 8.6(a). Nothing herein shall be
construed to limit in any respect any advertising and promotional
and similar activities by AT&T PCS or its Affiliates or any Cash
Equity Investor or any of its Affiliates.
(2) With respect to the markets listed on Schedules 1 and 2 to
the Roaming Agreement, each of AT&T PCS and the Company shall,
and shall cause each of its Affiliates to, in its and such
Affiliates capacity as Home Carrier: (i) program and direct its
authorized dealers to program the subscriber equipment provided
by it or such authorized dealers to its customers, at the time it
is provided to such customers, (to the extent such programming is
technologically feasible) so that the Company or AT&T PCS, as the
case may be, and such Affiliates, in its and such Affiliates
capacity as Serving Carrier, is the preferred provider of service
in the markets listed on such Schedules 1 and 2, and (ii)
refrain, and direct its authorized dealers to refrain, from
inducing any of its customers to change or, except at such
customers request in the event the quality of the Companys
services do not meet industry standards, changing the programming
described in clause (i) above. For the purpose of this Section
8.6(b), the terms Affiliate, Home Carrier and Serving Carrier
shall have the meanings ascribed thereto in the Roaming
Agreement.
8.7 Other Business; Duties; Etc. Except to the extent expressly
set forth in Section 8.6, AT&T PCS and each Cash Equity Investor
and any Person affiliated with AT&T PCS or a Cash Equity Investor
may engage in or possess an interest in other business ventures,
and may engage in any other activities, of every kind and
description (whether or not competitive with the business of the
Company or otherwise affecting the Company), independently or
with others and shall owe no duty or liability to the Company,
the other Stockholders or their Affiliates in connection
therewith. None of the Company or the other Stockholders shall
have any rights in or to such independent ventures or the income
or profits therefrom by virtue of this Agreement or any of the
Related Agreements. Without limiting the generality of the
foregoing, in the event that AT&T PCS or a Cash Equity Investor
or a Person affiliated with AT&T PCS or a Cash Equity Investor
develops inventions which are patentable or are otherwise trade
secrets relevant to the Business, AT&T PCS or such Cash Equity
Investor or affiliated Person shall nevertheless retain ownership
of such invention and may license it to the Company if the
Company so desires and if mutually satisfactory terms are agreed
to. The Company shall also have the right to develop any
inventions related to the Business deemed desirable by it and to
retain title to such inventions. To the extent that, at law or
in equity, AT&T PCS or a Cash Equity Investor or any Person
affiliated with AT&T PCS or a Cash Equity Investor would have
duties (including fiduciary duties) and liabilities to the
Company, or to the Stockholders, different from or in addition to
those provided in this Section 8.7 and Section 8.6 with respect
to the subject matter of such Sections, all rights of the Company
and the Stockholders arising out of such duties and liabilities
are hereby waived and no such Person shall be liable to the
Company or to any Stockholder for its good faith reliance on the
provisions of this Section 8.7.
8.8 Acknowledgments and Termination of Exclusivity.
(1) The Stockholders hereby expressly acknowledge that none
of the Stockholders would have been willing to enter into this
Agreement or make contributions to the capital of the Company,
except for each other Stockholders and its Affiliates willingness
to enter into this Agreement (including without limitation the
provisions set forth in this Section 8) and the Related
Agreements.
(2) Without limiting the foregoing, and without limiting the
remedies that may be available to it at law or in equity, in the
event of a Substantial Company Breach, the obligations of AT&T
PCS and its Affiliates under Section 8.6 shall automatically
terminate and be of no further force or effect.
(3) Upon consummation of a Disqualifying Transaction, AT&T PCS
may, by notice to the Company, terminate its and its Affiliates
obligations under Section 8.6 with respect to any Overlap
Territory, provided that the obligations of AT&T PCS and its
Affiliates pursuant to Section 8.6(b)(ii) shall continue in
effect with respect to the then existing customers of the PCS
Systems and Cellular Systems owned and operated by AT&T PCS and
its Affiliates (and their respective successors pursuant to the
applicable Disqualifying Transaction) before giving effect to
such Disqualifying Transaction, so long as such customers remain
customers of such systems and such systems continue to be owned
or operated by AT&T PCS or its Affiliates. Notwithstanding the
foregoing, in the event that the Company exercises its right
pursuant to Section 6.1 to convert all of the shares of Company
Stock owned by AT&T PCS into Series B Preferred Stock, the
reference in this Section 8.8(c) to the Overlap Territory shall
be deemed to refer to the Territory.
8.9 Equipment, Discounts and Roaming. AT&T PCS acknowledges
and agrees that, subject to the terms of Sections 8.1 and 8.5, the
Company shall have the sole discretion to select (a) the
equipment vendor(s) for the infrastructure to be constructed by
the Company and (b) billing and other vendors providing goods and
services to the Company. If reasonably requested by the Company,
AT&T PCS agrees to use all commercially reasonable efforts to
assist representatives of the Company in obtaining discounts from
any AT&T PCS vendor with whom the Company is negotiating for the
purchase of any such subscriber or infrastructure equipment or
billing services. In addition, AT&T PCS agrees to use all
commercially reasonable efforts to enable the Company to become a
party to the roaming agreements between AT&T PCS and its
Affiliates and operators of other Cellular Systems and PCS
Systems or, subject to the Company agreeing to the obligations
thereunder, entitled to the rights and benefits of AT&T PCS under
such roaming agreements. The two immediately preceding sentences
shall not be construed to require AT&T PCS or its Affiliates to
take any action that AT&T PCS or such Affiliate determines in its
sole discretion to be adverse to its interests.
8.10 ANS Agreement. At the request of the Company, AT&T PCS
shall cause AWS to enter into an Advanced Network Services
Agreement with the Company, substantially in the form of Exhibit C.
8.11 Resale Agreements.
(1) From time to time, upon the request of AT&T PCS, the Company
shall enter into a Resale Agreement relating to the Territory,
with AT&T PCS and any of its Affiliates and, with respect to any
geographic area within the Territory, one other Person designated
by AT&T PCS, provided such other Person is licensed to provide
telecommunications services in such geographic area under the
service marks used by AT&T Corp. and such other Person qualifies
as a reseller under any generally applicable standards the
Company establishes for its resellers from time to time and upon
the request of AT&T PCS, the Company shall enter into an agency
agreement authorizing AT&T PCS and any of its Affiliates and,
with respect to any geographic area within the Territory, one
other Person designated by AT&T PCS, provided such other Person
is licensed to provide telecommunications services in such
geographic area under the service marks used by AT&T Corp. and
such other Person qualifies as an agent under any generally
applicable standards the Company establishes for its agents from
time to time. Any such agency agreements shall provide that the
Company shall pay the agent a commission at the rate then
generally offered to the Companys agents and shall otherwise be
on commercially reasonable terms. At no time shall there be more
than one Person (other than AT&T PCS and its Affiliates)
designated by AT&T PCS as a reseller or an agent with respect to
any geographic area within the Territory.
(2) It is the intention of the parties that, in light of AT&T
PCSs equity interest in the Company and the other arrangements
between AT&T PCS and its Affiliates and the Company (including
the roaming revenues anticipated to be earned by the Company from
subscribers of AT&T PCS and its Affiliates), the rates, terms and
conditions of Service (as defined in the Resale Agreement)
provided by the Company pursuant to the Resale Agreement or any
other agreement between AT&T PCS or such other reseller and the
Company shall be at least as favorable to AT&T PCS or such other
reseller, taken as a whole, as the rates, terms and conditions of
Service, taken as a whole, provided by the Company to any other
Customer (as defined in the Resale Agreement) and, to the extent
permitted by applicable law, such rates, terms and conditions
shall be superior to those provided to any other Customer.
Without limiting the foregoing, the rate plans offered by the
Company pursuant to any Resale Agreement shall be designed to
result in the average actual rate per minute paid by the Reseller
for Service being at least 25% below the weighted average actual
rate per minute billed by the Company to its subscribers for
access and air time, but excluding revenues for features, taxes,
toll or other non-rate items. The Company and Reseller shall
negotiate commercially reasonable reductions to such resale rate
based upon increased volume commitments (including roaming
charges incurred by subscribers of AT&T PCS and its Affiliates).
8.12 Non-Solicitation.
(1) AT&T PCS hereby covenants and agrees that from and after
the date hereof until six months after the date on which it shall
cease to own any Equity Securities that neither AT&T PCS nor its
Affiliates shall solicit for employment any employee of the
Company; provided, however, that, nothing contained in this
Section 8.12(a) shall prevent AT&T PCS or its Affiliates from
engaging in a general solicitation for employment that is not
directed at employees of the Company.
(2) The Company hereby covenants and agrees that from and
after the date hereof until six months after the date on which AT&T
PCS or its Affiliates shall cease to own any Equity Securities that
neither the Company nor its Affiliates shall solicit for employment
any employee of the AT&T PCS or its Affiliates; provided, however,
that nothing contained in this Section 8.12(b) shall prevent the
Company or its Affiliates from engaging in a general solicitation
for employment that is not directed at employees of AT&T PCS and
its Affiliates.
8.13 Co-Location. The Company agrees to permit on commercially
reasonable terms AT&T PCS and its Affiliates to install, operate
and maintain cell site equipment owned or used by AT&T PCS and
its Affiliates in their respective businesses on the towers,
buildings and other locations at which the Companys cell site
equipment is installed, operated and maintained. AT&T PCS and
its Affiliates agree to permit on commercially reasonable terms
the Company to install, operate and maintain cell site equipment
owned or used by the Company in its business on the towers,
buildings and other locations at which AT&T PCS and its
Affiliates cell site equipment is installed, operated and
maintained.
9. After-Acquired Shares; Recapitalization.
9.1 After Acquired Shares; Recapitalization.
(1) All of the provisions of this Agreement shall apply to all
of the shares of Equity Securities now owned or hereafter issued
or transferred to a Stockholder or to his, her or its Affiliated
Successors in consequence of any additional issuance, purchase,
exchange or reclassification of shares of Equity Securities,
corporate reorganization, or any other form of recapitalization,
or consolidation, or merger, or share split, or share dividend,
or which are acquired by a Stockholder or its Affiliated
Successors in any other manner.
(2) Whenever the number of outstanding shares of Equity
Securities is changed by reason of a stock dividend or a
subdivision or combination of shares effected by a
reclassification of shares, each specified number of shares
referred to in this Agreement shall be adjusted accordingly.
9.2 Amendment of Restated Certificate. Whenever the number
of shares of authorized Company Stock is not sufficient in order to
issue shares of Preferred Stock or Common Stock upon conversion
of Preferred Stock or Common Stock in accordance with the
Restated Certificate, (i) the Company shall promptly amend the
Restated Certificate in order to authorize a sufficient number of
shares of Company Stock, and (ii) each Stockholder agrees to vote
its shares of Preferred Stock and Common Stock in favor of any
such amendment.
10. Share Certificates.
10.1 Restrictive Endorsements; Replacement Certificates.
(1) Each certificate representing the shares of Equity
Securities now or hereafter held by a Stockholder (including any
such certificate delivered upon conversion of the Preferred
Stock) or delivered in substitution or exchange for any of the
foregoing certificates shall be stamped with legends in
substantially the following form:
The shares 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.
The shares represented by this Certificate are also
subject to a Stockholders Agreement dated as of
February 4, 1998, as the same may be amended, modified
or supplemented in accordance with the terms thereof, a
copy of which is on file at the offices of the Company
and will be furnished by the Company to the holder
hereof upon written request. Such Stockholders
Agreement provides, among other things, for the
granting of certain restrictions on the sale, transfer,
pledge hypothecation or other disposition of the shares
represented by this Certificate, and that under certain
circumstances, the holder hereof may be required to
sell the shares represented by this Certificate. By
acceptance of this Certificate, each holder hereof
agrees to be bound by the provisions of such
Stockholders Agreement. The Company reserves the
rights to refuse to transfer the shares represented by
this Certificate unless and until the conditions to
transfer set forth in such Stockholders Agreement have
been fulfilled.
Each Stockholder agrees that he, she or it will deliver all
certificates for shares of Equity Securities owned by him, her or
it to the Company for the purpose of affixing such legends
thereto.
10.2 Lost or Destroyed Certificates. Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of any certificate representing shares
of Equity Securities subject to this Agreement and of a bond or
other indemnity reasonably satisfactory to the Company, and upon
reimbursement to the Company of all reasonable expenses incident
thereto, and upon surrender of such certificate, if mutilated,
the Company will make and deliver a new certificate of like tenor
in lieu of such lost, stolen, destroyed or mutilated certificate.
11. Equitable Relief. The parties hereto agree and declare that
legal remedies may be inadequate to enforce the provisions of
this Agreement and that, in addition to being entitled to
exercise all of the rights provided herein or in the Restated
Certificate or granted by law, including recovery of damages,
equitable relief, including specific performance and injunctive
relief, may be used to enforce the provisions of this Agreement.
12. Miscellaneous.
12.1 Notices. All notices or other communications hereunder
shall be in writing and shall be given (and shall be deemed to
have been duly given upon receipt) by delivery in person, by
facsimile transmission, or by registered or certified mail
(return receipt requested), postage prepaid, with an
acknowledgment of receipt signed by the addressee or an
authorized representative thereof, addressed as follows (or to
such other address for a party as shall be specified by like
notice; provided, that notice of a change of address shall be
effective only upon receipt thereof:
If to AT&T PCS:
c/o AT&T Wireless Services, Inc.
7277 164th Avenue, NE
Redmond, Washington 98052
Attention: Mary Hawkins-Key
Telephone: (425) 580-8116
Facsimile: (425) 580-8075
With a copy to:
AT&T Corp.
295 North Maple Avenue
Basking Ridge, NJ 07920
Attention: Corporate Secretary
Facsimile: (908) 953-4657
and
Friedman Kaplan & Seiler LLP
875 Third Avenue, 8th Floor
New York, New York 10022
Attention: Gregg S. Lerner
Telephone: (212) 833-1110
Facsimile: (212) 355-6401
If to a Cash Equity Investor, to its address set forth on Schedule I.
With a copy to:
Mayer, Brown & Platt
1675 Broadway
New York, New York 10019
Attention: Mark S. Wojciechowski
Telephone: (212) 506-2525
Facsimile: (212) 262-1910
If to a Management Stockholder:
c/o Triton PCS, Inc.
375 Technology Drive
Malvern, Pennsylvania 19355
Attention: Michael E. Kalogris
Steven R. Skinner
Telephone: (610) 651-5900
Facsimile: (610) 993-2683
With a copy to:
Kleinbard, Bell & Brecker LLP
1900 Market Street, Suite 700
Philadelphia, Pennsylvania 19103
Attention: Howard J. Davis
Telephone: (215) 568-2000
Facsimile: (215) 568-0140
If to the Company, to it:
c/o Triton PCS, Inc.
375 Technology Drive
Malvern, PA 19355
Attention: Michael E. Kalogris
Steven R. Skinner
Telephone: (610) 651-5900
Facsimile: (610) 993-2683
With a copy to each other party sent to the addresses set
forth in this Section 12.1.
12.2 Entire Agreement; Amendment; Consents.
(1) This Agreement, together with the Closing Agreement, dated
as of February 4, 1998, among the Company, the Cash Equity
Investors and the Original Management Stockholders (the Closing
Agreement) constitutes the entire agreement among the parties
with respect to the subject matter hereof and supersedes all
other prior agreements and understandings, both written and oral,
among the parties or any of them with respect to the subject
matter hereof.
(2) No change or modification of this Agreement shall be valid,
binding or enforceable unless the same shall be in writing and
signed by the Company and the holders of a majority of the shares
of each class of capital stock held by the parties hereto,
including AT&T PCS, 66 2/3% of the Common Stock Beneficially
Owned by the Cash Equity Investors, and 60.1% of the Common Stock
Beneficially Owned by the Management Stockholders; provided,
however, that in the event any party hereto shall cease to own
any shares of Equity Securities such party hereto shall cease to
be a party to this Agreement and the rights and obligations of
such party hereunder shall terminate, except to the extent
otherwise provided in Section 4.7(a) with respect to any Unfunded
Commitment.
(3) Whenever in this Agreement the consent or approval of a
Stockholder is required, except as expressly provided herein,
such consent or approval may be given or withheld in the sole and
absolute discretion of each Stockholder.
12.3 Term.
(1) Subject to Sections 12.3(b), 12.3(c) and 12.4, this
Agreement shall terminate upon the earliest to occur of any of
the following events:
(1) The consent in writing of all of the parties hereto; or
(2) February 4, 2009; or
(3) One Stockholder shall Beneficially Own all of the Common Stock.
(2) Notwithstanding anything contained herein to the contrary,
(i) the provisions of Sections 3 and 4 shall terminate on the
earlier to occur of a termination pursuant to Section 12.3(a) and
February 4, 2008, and (ii) the provisions of Sections 4.7(b),
7.4, 7.6 and 8.4(a), shall terminate, and neither the Company nor
any Stockholder shall be required to obtain AT&T PCSs prior
written consent as required under such Sections, on the earlier
to occur of (i) a termination pursuant to Section 12.3(a) and
(ii) (x) with respect to the period prior to February 4, 2006,
the date on which AT&T PCS shall cease to Beneficially Own more
than two-thirds of the number of shares of Series A Preferred
Stock that AT&T PCS Beneficially Owned on February 4, 1998, and
(y) with respect to the period on or after February 4, 2006, the
date on which AT&T PCS shall cease to Beneficially Own more than
two-thirds of the number of shares of Common Stock that AT&T PCS
Beneficially Owned on February 4, 1998.
(3) Notwithstanding anything contained herein to the contrary,
in the event the Cash Equity Investors shall Beneficially Own
less than (i) one half but more than one quarter of the number of
shares of Common Stock Beneficially Owned by the Cash Equity
Investors on February 4, 1998, the number of directors the Cash
Equity Investors shall be permitted to designate under Section
3.1(a) shall be reduced to one, and (ii) one-quarter of the
number of shares of Common Stock Beneficially Owned by the Cash
Equity Investors on February 4, 1998, the provisions of Section
3.1(a) shall terminate. In the event the number of directors the
Cash Equity Investors are entitled to designate is reduced
pursuant to Section 12.3(c)(i), one of the directors designated
by the Cash Equity Investors under Section 3.1(a) shall resign
(or the other directors or Stockholders shall remove them from
the Board of Directors) and the remaining directors shall take
such action so that the number of directors constituting the
entire Board of Directors shall be reduced accordingly. In the
event the provisions of Section 3.1(a) are terminated pursuant to
Section 12.3(c)(ii), the directors designated by the Cash Equity
Investors pursuant to Section 3.1(a) shall resign (or the other
directors or Stockholders shall remove them from the Board of
Directors) and the remaining directors shall take such action so
that the number of directors constituting the entire Board of
Directors is reduced by two (2) individuals.
12.4 Survival. Nothing contained in Section 12.3 shall impair
any rights or obligations of any party hereto arising prior to
the time of the termination of this Agreement, or which may arise
by an event causing the termination of this Agreement. The
provisions of Section 5 shall survive any termination of this
Agreement pursuant to Section 12.3 and shall continue in full
force and effect until February 4, 2018. The provisions of
Section 7.7 and Article 12 shall survive the termination of this
Agreement.
12.5 Waiver. No failure or delay on the part of any Stockholder
in exercising any right, power or privilege hereunder, nor any
course of dealing between the Company and any Stockholder shall
operate as a waiver thereof nor shall any single or partial
exercise of any right, power or privilege hereunder preclude the
simultaneous or later exercise of any other right, power or
privilege. The rights and remedies herein expressly provided are
cumulative and not exclusive of any rights and remedies which any
Stockholder would otherwise have. No notice to or demand on the
Company in any case shall entitle the Company to any other or
further notice or demand in similar or other circumstances or
constitute a waiver of the rights of the Stockholders or any of
them to take any other or further action in any circumstances
without notice or demand.
12.6 Obligations Several. The obligations of each Stockholder
under this Agreement shall be several with respect to each such
Stockholder.
12.7 Governing Law. This Agreement shall be governed and
construed in accordance with the law of the State of Delaware.
12.8 Dispute Resolution.
(1) The parties shall use and strictly adhere to the following
dispute resolution processes, except as otherwise expressly
provided in this Section 12.8, to resolve any and all disputes,
controversies or claims, whether based on contract, tort,
statute, fraud, misrepresentation or any other legal or equitable
theory (hereinafter, Dispute(s)), arising out of or relating to
this Agreement (and any prior agreement this Agreement
supersedes), including without limitation, its making,
termination, non-renewal, its alleged breach and the subject
matter of this Agreement (e.g., products or services furnished
hereunder or those related to those furnished):
(2) The parties shall first attempt to settle each Dispute
through good faith negotiations. The aggrieved party shall
initiate such negotiations by giving the other party(ies) written
notice of the existence and nature of the Dispute. The other
party(ies) shall in a writing to the aggrieved party acknowledge
such notice of Dispute within ten (10) business days. Such
acknowledgment may also set forth any Dispute that the
acknowledging party desires to have resolved in accordance with
this Section.
(3) Thereafter, if any Dispute is not resolved by the parties
through negotiation within thirty (30) calendar days of the date
of the notice of acknowledgment, either party may terminate
informal negotiations with respect to that Dispute and request
that the Dispute be submitted to non-binding mediation. Any
mediation of a Dispute under this Section shall be conducted by
the CPR Institute for Dispute Resolution (CPR) in accordance with
the then current CPR Model Mediation Procedure for Business
Disputes (Model Procedures) and the procedures specified in this
Section to the extent that they conflict with, modify or add to
such Model Procedures. Any demand for initiation of mediation of
a Dispute must be given in writing to both the other party(is)
involved and to the CPR and must set forth the nature of the
Dispute. Each party to the mediation shall bear its own expenses
with respect to mediation and the parties shall share equally the
fees and expenses of the CPR and the mediator. The failure by a
party to timely pay its share of the mediation fees and expenses
of the CPR and the mediator shall be a bar to arbitration under
Section 12.8(d) of that partys Dispute(s). Any mediation under
this Section shall be conducted within the State of New York at a
site selected by the mediator that is reasonably convenient to
the parties. Each party shall be represented in the mediation by
representatives having final settlement authority with respect to
the Dispute(s). All information and documents disclosed in
mediation by any party shall remain private and confidential to
the disclosing party and may not be disclosed by any party
outside the mediation. No privilege or right with respect to any
information or document disclosed in mediation shall be waived or
lost by such disclosure.
(4) Any Dispute not finally resolved after negotiation and
mediation in accordance with Section 12.8(b) and 12.8(c) shall,
upon the written demand of any involved party delivered to the
other party(is) and the CPR, be finally resolved through binding
arbitration in accordance with the then current CPR Non-
Administered Arbitration Rules (Arbitration Rules) and the
procedures specified in this Section to the extent that they
conflict with, modify or add to such Arbitration Rules. Any
Dispute of any other party not finally resolved after negotiation
and mediation pursuant to this Section may be made a part of the
arbitration demanded by another party, provided that the written
notice of demand for arbitration of that Dispute is received by
the CPR before selection of an arbitrator by the CPR. Any demand
for arbitration of a Dispute received by the CPR after the
selection of the arbitrator must be resolved through a separate
arbitration proceeding in accordance with this Section. Each
party shall bear its own expenses with respect to arbitration and
the parties shall share equally the fees and expenses of the CPR
and the arbitrator. Unless otherwise mutually agreed by the
parties in writing, the arbitration shall be conducted by one (1)
neutral arbitrator. The arbitration shall be conducted in the
State of New York at a site selected by the arbitrator that is
reasonably convenient to the parties. The arbitrator shall be
bound by and strictly enforce the terms of the Agreement and may
not limit, expand, or otherwise modify the terms of this
Agreement. The arbitrator shall make a good faith effort to
apply applicable law, but an arbitration decision and award shall
not be subject to review because of errors of law. The
arbitrator shall have the sole authority to resolve issues of the
arbitrability of any Dispute, including the applicability or
running of any statute of limitation. The arbitrator shall not
have power to award damages in connection with any Dispute in
excess of actual compensatory damages or to award punitive
damages and each party irrevocably waives any claim thereto.
The arbitrator shall not have the power to order pre-hearing
discovery of documents or the taking of depositions. The
arbitrator may compel, to the extent provided by the FAA (as
hereinafter defined), attendance of witnesses and the production
of documents at the hearing. The arbitrators decision and award
shall be made and delivered to the parties within six (6) months
of selection of the arbitrator by the CPR and judgment on the
award by the arbitrator may be entered by any court having
jurisdiction thereof.
(5) This Section shall be interpreted, governed by and enforced
in accordance with the United States Arbitration Act, 9 U.S.C.
Sections 114 (the Federal Arbitration Act or FAA). The laws of
the State of New York, except those pertaining to choice of law,
arbitration of disputes and those pertaining to the time limits
for bringing an action that conflict with the terms of this
Dispute Resolution provision, shall govern all other substantive
matters pertaining to the interpretation and enforcement of the
other terms of this Agreement with respect to any Dispute. Any
party to a Dispute, which is the subject of a notice initiating
the Dispute resolution procedures under this Section, may seek a
temporary injunction in any state or federal court of competent
jurisdiction to the limited extent necessary to preserve the
status quo during the pendency of final resolution of a Dispute
in accordance with this Section. If court proceedings to stay
litigation of a Dispute or compel arbitration of a Dispute are
necessary, the party who unsuccessfully opposes such proceedings
shall pay all associated costs, expenses, and attorneys fees that
the other party reasonably incurs in connection with such court
proceedings. An order to pay such costs, expenses and attorney
fees shall become part of any decision and award of the
arbitrator of the Dispute. An arbitrator appointed pursuant to
Section 12.8(d) to resolve a Dispute may also issue such
injunctive orders and shall have the power to modify or dissolve
the injunctive order of any court to the extent it pertains to
the Dispute which the arbitrator has been selected to finally
resolve. The parties, their representatives, other participants,
and the mediator and arbitrator shall hold the existence,
content, and result of the mediation and arbitration of a Dispute
in confidence except to the limited extent necessary to enforce a
final settlement agreement or to obtain and secure enforcement of
or a judgment on an arbitration decision and award.
(6) The statute(s) of limitation applicable to any Dispute
shall be tolled upon initiation of the Dispute resolution procedures
under this Section and shall remain tolled until the Dispute is
resolved by mediation or arbitration under this Section. Tolling
shall cease if the aggrieved party with a Dispute does not
initiate mediation within sixty (60) calendar days after good
faith negotiations are terminated by any party and, after
mediation of a Dispute, if the aggrieved party with a Dispute
does not initiate a demand for arbitration within sixty (60)
calendar days after mediation is terminated. However, any
Dispute is forever barred that has not expressly been made the
subject of the written notice required under Section 12.8(b)
above within 365 days after the date the Party asserting the
Dispute first knows or should have known of the existence of the
acts or omissions that give rise to such Dispute.
(7) Unless the parties mutually agree in writing, Disputes
relating to trademarks (including service marks), patents and
copyrights shall not be resolved in accordance with the Dispute
resolution procedures set forth in this Section and shall be
resolved as otherwise provided in this Agreement.
(8) The Company and each of the Stockholders hereby irrevocably
consents to the exclusive jurisdiction of the state or federal
courts in the State of New York, and all state or federal courts
competent to hear appeals therefrom, over any actions which may
be commenced against any of them under or in connection with this
Agreement. The Company and each Stockholder hereby irrevocably
waive, to the fullest extent permitted by applicable law, any
objection which any of them may now or hereafter have to the
laying of venue of any such dispute brought in such court or any
defense of inconvenient forum for the maintenance of such dispute
in the Southern District of New York and New York County. The
Company and each Stockholder hereby agree that a judgment in any
such dispute may be enforced in other jurisdictions by suit on
the judgment or in any other manner provided by law. The Company
and each Stockholder hereby consent to process being served by
any party to this Agreement in any actions by the transmittal of
a copy thereof in accordance with the provisions of Section 12.1.
12.9 Benefit and Binding Effect; Severability. This Agreement
shall be binding upon and shall inure to the benefit of the
Company, its successors and assigns, and each of the Stockholders
and their respective executors, administrators and personal
representatives and heirs and permitted assigns. If any term or
other provision of this Agreement is invalid, illegal or
incapable of being enforced by any law or public policy or any
listing requirement applicable to the Common Stock, all other
terms and provisions of this Agreement shall nevertheless remain
in full force and effect. Upon such determination that any term
or other provision is invalid, illegal or incapable of being
enforced, the parties hereto affected by such determination in
any material respect shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner in order that the
provisions hereof are given effect as originally contemplated to
the greatest extent possible.
12.10 Amendment of Bylaws. The Stockholders agree that the
terms of this Agreement shall supersede any inconsistent
provision that is contained in the Restated Bylaws and, to the
extent required by Delaware law or the Restated Bylaws, this
Agreement shall be deemed to constitute a written action taken by
the Stockholders of the Company and shall be deemed an amendment
of the Restated Bylaws.
12.11 Authorized Agent of AT&T PCS. AT&T PCS hereby
authorizes Wireless PCS, Inc. as its agent, with full power to
execute, in the name of and on behalf of AT&T PCS, the Related
Agreements to which AT&T PCS is a party and any and all other
documents that AT&T PCS is required to execute and deliver, and
to give and receive all notices, requests, consents, amendments,
demands and other communications to or from AT&T PCS, hereunder
or thereunder. Each party hereto (other than AT&T PCS) shall be
entitled to rely on the full power and authority of Wireless PCS,
Inc. to act on behalf of AT&T PCS in accordance with this
Section 12.11. Nothing contained in this Section 12.11 shall
relieve AT&T PCS from complying with its obligations under this
Agreement or any of the Related Agreements to which it is a
party.
12.12 FCC Approval. Notwithstanding anything contained in
this Agreement to the contrary, no transaction or action
contemplated herein shall be consummated and no interests or
rights transferred, converted or exchanged prior to receiving FCC
approval with respect thereto to the extent such approval is
necessary.
12.13 Expenses. The Company shall pay the reasonable fees
and expenses of counsel to the Stockholders incurred in
connection with the preparation, negotiation and execution of
this Agreement and of any amendment or modification hereof.
Except as provided in Sections 5(g) and 12.14, all other
attorneys fees incurred by the Stockholders in connection with
this Agreement (including, without limitation, in the preparation
of notices (and responses thereto) and consents) shall be borne
by the Stockholder(s) incurring such fees.
12.14 Attorneys Fees. In any action or proceeding brought to
enforce any provision of this Agreement, or where any provision
hereof is validly asserted as a defense, the successful party
shall be entitled to recover reasonable attorneys fees in
addition to any other available remedy.
12.15 Headings. The captions in this Agreement are for
convenience only and shall not be considered a part of or affect
the construction or interpretation of any provision of this
Agreement.
12.16 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute one and the
same instrument.
[signature pages follow]
[signature pages to First Amended and Restated Stockholders Agreement]
IN WITNESS WHEREOF, each of the parties has executed or
caused this Agreement to be executed by its duly authorized
officers as of the date first written above.
AT&T WIRELESS PCS, LLC
By: /S/
------------------------------------
Name:
Title:
CB CAPITAL INVESTORS, L.P.
By: CB Capital Investors, Inc., its
general partner
By: /S/
-----------------------------------
Name:
Title:
J.P. MORGAN INVESTMENT CORPORATION
By: /S/
-----------------------------------
Name:
Title:
SIXTY WALL STREET SBIC FUND, L.P.
By:Sixty Wall Street SBIC Corporation,
its general partner
By: /S/
-----------------------------------
Name:
Title:
PRIVATE EQUITY INVESTORS III, L.P.
By:Rohit M. Desai Associates III,
L.L.C., its general partner
By: /S/
----------------------------------
Name:
Title:
EQUITY-LINKED INVESTORS-II
By:Rohit M. Desai Associates-II, its
general partner
By: /S/
----------------------------------
Name:
Title:
TORONTO DOMINION CAPITAL (U.S.A.),
INC.
By: /S/
-----------------------------------
Name:
Title:
FIRST UNION CAPITAL PARTNERS, INC.
By: /S/
-----------------------------------
Name:
Title:
DAG-TRITON PCS, L.P.
By:Duff Ackerman Goodrich, LLC, its
general partner
By: /S/
-----------------------------------
Name:
Title:
-----------------------------------
Michael E. Kalogris
-----------------------------------
Michael E. Kalogris, as Trustee
under Amended and Restated Common
Stock Trust Agreement for
Management Employees and
Independent Directors dated June
26, 1998
-----------------------------------
Steven R. Skinner
-----------------------------------
David D. Clark
-----------------------------------
Clyde Smith
-----------------------------------
Michael Mears
[signatures continued on next page]
[signatures continued from previous page]
-----------------------------------
Scott Anderson
CEDAR GROVE PARTNERS
By:/S/
----------------------------------
Name:
Title:
----------------------------------
John Beletic
----------------------------------
Stephen McNulty
----------------------------------
William Robinson
----------------------------------
Daniel Hopkins
----------------------------------
Laura Porter
----------------------------------
Kristine Robinson
----------------------------------
Andrew Davies
---------------------------------
Mike James
[signatures continued on next page]
[signatures continued from previous page]
---------------------------------
Shekhar Deshpande
---------------------------------
Christine Davies
---------------------------------
Daniel Graney
----------------------------------
Gerald Dudzik
----------------------------------
Mark Davis
----------------------------------
Nicholas Pepenelli
----------------------------------
R.A. Robinson
----------------------------------
Scott Basham
----------------------------------
Patricia Gallagher
----------------------------------
David Standig
SCHEDULE I
Cash Equity Investors:
CB Capital Investors, L.P. Toronto Dominion Capital (USA) Inc.
380 Madison Avenue, 12th Floor 31 West 52nd Street
New York, NY 10017 New York, NY 10019
Attn: Arnie Charkin Attn: Brian Rich
J.P. Morgan Investment Corporation Toronto Dominion Capital (USA) Inc.
101 California Street, 38th Floor 909 Fannin, Suite 1700
San Francisco, CA 94111 Houston, TX 77010
Attn: John Watkins Attn: Martha Gariepy
Sixty Wall Street SBIC Fund, L.P. First Union Capital Partners, Inc.
101 California Street, 38th Floor One First Union Center
San Francisco, CA 94111 301 South College Street, 5th Floor
Attn: John Watkins Charlotte, NC 28288-0732
Attn: Watts Hamrick
Private Equity Investors III, L.P. Dag-Triton PCS, L.P.
540 Madison Avenue, 36th Floor Two Embarcadero Center, Suite 2930
New York, NY 10022 San Francisco, CA 94111
Attn: Damon Ball Attn: John Duff
Equity-Linked Investors
540 Madison Avenue, 36th Floor
New York, NY 10022
Attn: Damon Ball
SCHEDULE II
Management Stockholders
Michael E. Kalogris
Steven R. Skinner
David D. Clark
Clyde Smith
Michael Mears
Stephen McNulty
William Robinson
Daniel Hopkins
Laura Porter
Kristine Robinson
Andrew Davies
Mike James
Shekhar Deshpande
Christine Davies
Daniel Graney
Gerald Dudzik
Mark Davis
Nicholas Pepenelli
R.A. Robinson
Scott Basham
Patricia Gallagher
David Standig
Independent Directors
Scott Anderson
John Beletic
SCHEDULE III
Stockholders
Series A Perferred Stock
AT&T Wireless PCS, Inc. 786,252.64
Total 786,252.64
Series D Perferred Stock
AT&T Wireless PCS, Inc. 543,683.47
Total 543,683.47
Class A Common Stock (previously Series C Preferred Stock)
CB Capital Investors, L.P. 12,270,744
J.P. Morgan Investment Corporation 2,456,109
Sixty Wall Street SBIC Fund, L.P. 122,663
Private Equity Investors III, L.P. 5,951,372
Equity-Linked Investors-II 5,951,372
Toronto Dominion Capital (USA) Inc. 2,975,698
First Union Capital Partners, Inc. 4,079,877
DAG-Triton PCS, L.P. 1,858,127
Michael E. Kalogris 115,000
Steven R. Skinner 57,500
John Beletic 23,000
John Beletic and Anne Beletic, as JT TEN 9,200
Cedar Grove Partners 23,000
Daniel Hopkins 23,000
Total 35,916,663
Class A Common Stock (previously Common Stock)
Michael Kalogris 2,513,875
Michael Kalogris, Trustee 423,828
Steven Skinner 1,885,406
David Clark 349,541
Clyde Smith 181,055
Michael Mears 120,347
Stephen McNulty 120,347
William Robinson 42,366
Daniel Hopkins 42,366
Laura Porter 42,366
Kristine Robinson 42,366
Andrew Davies 42,366
Mike James 42,366
Shekhar Deshpande 42,366
Christine Davies 42,366
Daniel Graney 42,366
Gerald Dudzik 42,366
Mark Davis 42,366
Nicholas Pepenelli 42,366
R.A. Robinson 42,366
Scott Basham 42,366
Scott Anderson 22,643
John Beletic 22,643
Patricia Gallagher 32,447
David Standig 18,524
Total 6,283,779
Total Class A Common Stock 42,200,442
Class B Non-Voting Common Stock (previously Series C Preferred Stock)
J.P. Morgan Investment Corporation 7,820,268
Sixty Wall Street SBIC Fund, L.P. 390,559
Total 8,210,827
SCHEDULE IV
Core Features
Below is a list and description of the Core Features that Licensee
agrees to implement in accordance with Section 8.2 of this Agreement.
These definitions are functional descriptions of the Core Features, and
the parties agree that such Core Features shall be implemented using
the Critical Network Elements identified in Schedule XI hereto. Licensee
further agrees to implement additional features in accordance with Section
8.2 of this agreement.
1. Call Delivery
This capability permits a PCS customer to receive incoming calls to
his or her phone while in his or her home market or while roaming in any
part of the Licensees Wireless Network or the AWS Wireless network
(together, the Mobile Wireless Network).
2. Roaming - Do Not Disturb
This capability permits a PCS customer, who would normally receive all
incoming calls while visiting a Mobile Switching Center that is part of the
Mobile Wireless Network, to temporarily inhibit the delivery of such calls.
Activating this capability has no impact on calls via the roamer access
ports.
3. Call Forwarding
A. Call Forwarding Immediate
This capability permits a PCS customer to send all incoming calls
destined for the PCS customers PCS phone to another phone number
specified by the PCS customer. Activating this capability has no
impact on the PCS customers ability to originate calls. When this
capability is activated, calls are forwarded regardless of whether
the PCS customer is located within his or her local market or
whether the customer is roaming outside of such local market.
B. Call Forwarding Busy
This capability permits a PCS customer to send all incoming calls
destined for his or her PCS phone to another phone number specified
by the PCS customer when the PCS customer is engaged in a call.
C. Call Forwarding No Answer
This capability permits a PCS customer to send all incoming calls
destined for his or her PCS phone to another phone number specified
by the PCS customer when the PCS customer does not answer or when
the PCS customers PCS phone does not respond to a page.
4. Call Waiting
This capability permits a PCS customer to receive incoming call
even though a call may already be in progress.
5. Voicemail
This capability forwards a PCS customers incoming calls which are
not answered by the PCS customer, and for which no other explicit
treatment has been activated (for example, those described in items above),
to a voice storage and retrieval system. This capability also permits a
PCS customer to subsequently retrieve messages from the PCS customers
voice mail box.
6. Three Way Calling
This capability permits a PCS customer to add a third party to an
active two party call.
7. Message Waiting Indicator
This capability is an enhancement to PCS voice mail, and provides
the PCS customer with the current status of the number of unheard voice
mail messages waiting in his or her PCS voice mail box.
8. Calling Number Identification
This capability identifies for the PCS customer either the telephone
number or the stored name (in the PCS phone) of the person who is calling.
It also permits a PCS customer to inhibit the ability of a person to whom
PCS customer is placing a call from identifying either the telephone
number or the name of such PCS customer who is placing the call.
9. Wireless Office Service (WOS)
A. PCS/PBX Interworking
This capability permits WOS customers to have just one published
number that delivers all incoming calls to both the PCS and PBX
phone.
B. Private Number Plan
This capability permits a defined group of customers to call defined
private network extensions by using an abbreviated unique dialing
pattern (four digit dialing).
C. Private Networks
This capability permits a WOS customer to have his or her own private
or semiprivate PCS system.
D. Location ID
This capability permits the PCS customer to identify the nature of
the system (private, public, or residential) that the PCS customer
is using, by displaying the systems name on the PCS phone.
10. Sleep Mode
This capability permits an IS 136 PCS phone to operate in a power
savings mode when camping on an IS 136 system, thereby allowing the
battery standby time to increase.
11. PCS Messaging
This capability will permit a caller to deliver both numeric and
alphanumeric messages of up to eighty characters to an IS 136 PCS phone.
If the PCS customer to whom the message has been delivered has his or
her phone off or is not in the IS 136 coverage area, then messages are
stored for future delivery.
MessageFlash software permits alphanumeric messages to be sent from
a computer via a standard modem to the customer.
E-Mail messaging teleservice allowing an IS-136 phone to have an
E-Mail address.
12. Authentication
This capability allows for the validation of the IS-136 phones
identity.
Text Dispatch Service permits people to call an operator (provided
by or on behalf of the Company) and dictate a message which can then be
converted to an alphanumeric message and delivered to the customer.
SCHEDULE V
A. Genreal Minimum Buildout Plan (1)
Phase I 4.4 Million pops (40% total pops) within 2 years of
closing of the Securities Purchase Agreement.
11 cities with 3.4 million pops.
Buildout core metro area and suburbs.
Greenville, South Carolina
Spartanburg, South Carolina
Richmond, Virginia
Petersburg, Virginia
Charlottesville, Virginia
Columbia, South Carolina
Florence, South Carolina
Charleston, South Carolina
Anderson, South Carolina
Augusta, Georgia
Roanoke, Virginia
Over 600 miles of interstate and other primary and key
secondary roads with an additional 1.0 million pops.
I-95 Charleston to Savannah
I-85 Atlanta to Charlotte borders
I-95 Richmond to Fredericksburg
I-64 Charlottesville to Williamsburg
I-26/385 Greenville - Spartanburg to Charleston
I-77 Columbia to Rockhill
I-20 Atlanta border (Augusta) to Florence
(1) This section A constitues the minimum buildout plan for the PCS
Territory; provided, that this Section A shall only cover the minimum
buildout for that portion of the PCS Territory for which a separate
minimum buildout plan is not specified in this Schedule V, as amended
from time to time. All percentages of pops for any portion of the PCS
Territory required to be covered under this Section A shall be measured
separately, in accordance with this Section A, and shall exclude any pops
required to be covered pursuant to any minimum buildout plan specified for
any other portion of the PCS Territory in this Schedule V, as amended from
time to time.
PHASE II Additional 2.2 million pops (20% total pops) within
3-1/2 years of closing of the Securities Purchase Agreement.
Key secondary cities and connecting highway corridors as
defined by marketing and competitive situation.
PHASE III Final 1.8 million pops (17% total pops) within 5 years of
closing of the Securities Purchase Agreement.
B. Minimum Buildout Plan for Norfolk, Virginia BTA (2)
1.4 million pops (80% of total pops) in the Norfolk, VA BTA within
5 years of closing of the Securities Purchase Agreement, With such
minimum build-out bench marks within such five year period as shall
be mutually agreed to by AT&T PCS and the company.
C. Minimum Buildout Plan for Athens, GA BTA and Each of Bryan County,
GA, Chatham County, GA, Effingham County, GA and Liberty County, GA
Within the Atlanta MTA, Collectively (3).
PHASE I 206,000 pops (40% total Pops) within 2 years of closing
of the Securities Purchase Agreement.
PHASE II Additional 103,000 pops (20% total pops) within 3-1/2
years of closing of Securities Purchase Agreement.
PHASE III Final 104,000 pops (20% total pops) within 5 years of
closing of Securities Purchase Agreement.
(2) All percentages of pops for the Norfolk, Virginia BTA required to
be covered under this Section B shall be measured only with respect to
the Norfolk, VA BTA, in accordance with Section B.
(3) All percentages of pops for the Athens, GA BTA and each Bryan County,
GA Chatham County, GA, Effingham County, GA and Liberty County, GA within
the Atlanta MTA required to be covered under this Section C shall be
measured only with respect to the Athens, GA BTA and such counties, in
accordance with this Section C.
SCHEDULE VI
I. From Washington MTA BTA Market Designator
Charlotesville, VA B075
Fredericksburg, VA B156
Harrisonburg, VA B183
Winchester, VA B479
II. From Richmond MTA
Danville, VA B104
Lynchburg, VA B266
Martinsville, VA B284
Norfolk-Virginia Beach, Neport News,
Hampton, VA B324
Richmond, VA B374
Roanoke, VA B376
Stauton-Waynesboro, VA B430
III. From Knoxville MTA
Kingsport, Johnson City, TN-Bristol VA B229
Middlesboro, TN B295
IV. From Atlanta MTA
Augusta, GA B026
Savannah, GA (Beaufort, Hampton, Jasper,
Bryan, Effingham, Chatham and Liberty
Counties) B410
Athens, GA B022
V. From Charlotte MTA
Anderson, SC B016
Ashville-Hendersonville, NC B020
Charleston, SC B072
Columbia, SC B091
Fayetteville-Lumberton, NC B141
Florence, SC B147
Goldsboro-Kinston, NC B165
Greenville-Spartanburg, SC B177
Greenville-Washington, NC B176
Greenwood, SC B178
Hickory-Lenoir-Morgantan, NC B189
Jacksonville, NC B214
Myrtle Beach, SC B312
New Bern, NC B316
Orangeburg, SC B335
Roanoke Rapids, NC B377
Rocky Mount-Wilson, NC B382
Sumter, SC B436
Wilmington, NC B478
SCHEDULE VII
Quality and Reporting Standards
General Overview
This Schedule VII sets out the Network and Reporting Standards with
which Licensee shall comply pursuant to Section 8.2 of this Agreement.
These Standards set out the network performance metrics and the process
by which such metrics will be established, measured and reported. All
metrics which represent a defined standard of quality for acceptable
network operations have, or will have, specific targets which the Licensee
must comply with in accordance with the following network standards.
I. Network Standards
There are three categories of Network Standards: network quality (the
Network Quality Category); system performance (the System Performance
Category); and audio quality (the Audio Quality Category) (each hereafter
referred to generally as a Category). For each Category of Network
Standards, specific metrics have been identified to measure performance
in each such Category. The detailed description of how to measure and
interpret the metrics for each Category is set our in the following AWS
documents (each referred to generally as a Network Standards Document).
Network Quality Category: Document ES-4034. Revision 1.1 dated
July 30, 1997 entitled Network Quality Scorecard User Guide (as
referred to as the Network Quality Standards Document). This
document is a collection of key network performance and traffic
indicators (metrics) that are measured and reported on a regular
basis. Included in this category, Licensee shall perform the ANS
Consistency Test, as attached to this Schedule VII.
System Performance Category: OSS draft document, Revision 0.7, dated
June 17, 1997 entitled Key Metrics for System Performance Document
(as referred to as the System Performance Standards Document). This
document identifies the network-wide key metrics for Ericsson and
Lucent switching systems, as well as cell sites, which will provide
a high level assessment of the system.
Audio Quality Category: Document PP-4027E, Revision 1.1, dated May
30, 1996 entitled, Audio Quality Measurement (AQM) (as referred to
as the Augio Quality Standards Document). This document provides the
basis for assessing the quality of RF transmission by describing the
standards for performing audio quality measurements and the reporting
of their results. AWS measures the metrics for the Audio Quality
Category using the Radio Quality Scorecard. The Radio Quality
Scorecard is comprised of performance statistics derived from
driving the PCS system using the Buzzard tool or a tool with
similar measurement and reporting capability.
These Network Standards Documents are collectively attached to this Schedule
VII which, subject to the terms and conditions of this Agreement including,
without limitation, this Schedule VII, is hereby incorporated into and
forms a part of this Agreement. In the event of any inconsistency between
any part of a Network Standards Document and the provisions of this Schedule
VII, the provisions of this Schedule VII shall govern.
Notwithstanding anything else in the Agreement including, without limitation,
this schedule VII, the parties acknowledge and confirm that the Network
Standards Documents represent the standards and metrics currently
identified by AWS as applicable to each Category. Target values for
key quality related metrics are contained herein and Licensee agrees to
comply with the specific metric target values as specified in Schedule VII.
In addition, the parties acknowledge and confirm that the Network Standards
Documents are subject to revision and the Licensee shall comply with
subsequent revisions to these Network Standards Documents, as well as with
Call Center Quality Standards which will constitute an additional
Category once they are formally implemented, in accordance with Section
8.2 of this Agreement.
Set out below is a brief description of each Category of Network Standard
and the currently established metrics for each such Category.
II. Targets for Network Standards
Licensee shall meet the following targets for Key metrics which
represent overall network and system quality. These targets are
subject ot revision and shall be implemented in accordance with Section
8.2 of this Agreement.
% Established Call: The percentage of call attempts to and from
a mobile phone that result in a successful voice channel assignment.
The target goal for this metric is 93%.
% Dropped Calls: The percentage of established calls, as defined
below, which terminate abnormally. The target, goal for this metric
is a drop call rate of 1.7% or less.
% Handoff Failures: The target goal for this metric is a handoff
failure rate of 1.5%.
Failure per Erang: The ratio of failed calls to carried traffic,
where failed calls are measured utilizing switch counters for
originating and terminating traffic and carried traffic is measure
in erlangs.
Switch Outage Time: The amount of time (in minutes) in a month when
subscribers are impacted by a cellular switch outage. Target for
this metric is 10 minutes per switch per year, with all ten minutes
occuring the maintenance window between 12:00 am and 5:00 am.
% Blocking - Cell Routes: Percentage of time all cellular traffic
channels (voice paths in a trunk group) are unavailable within a
given measurement interval. Target for this metric is 5%.
% Blocking - Network Routes: Percentage of time all network
traffic channels are unavailable within the measurement interval.
Target for this metric is 5%.
ANS Consistency Test: The percentage of successful ANS feature
deliveries, based on the following sequence: feature activation/
deactivation (when applicable), test call, correct response, and
call termination. The target goal for this metric is 96% for all
ANS features. This target metric includes feature delivery failures
due to call processing failures (i.e. call delivery, call origination,
handoff failures, or dropped calls. These failures are estimated
to be approximately 4%.).
III. Reporting Standards
Licensee agrees to comply with the reporting requirements as specified in
the Network Standards Documents and as specified below.
Except as specified Audio Quality Network Standards, Licensee will
submit the metric reports required pursuant to this Schedule VII
(the Results) to AWS no less than quarterly.
With respect to Audio Quality Network Standards, Licensee shall only
submit with less than 10,000 subscribers, Licensee shall only submit
Results on a semi-annual basis.
Licensee shall submit all Results by the fifteenth day of the month
following the end of the applicable reporting period.
Licensee will report the Results to AWS on an aggregated national
basis; the aggregated national Results will reflect the distribution
of the metric measured accross Licensees Territory. Licensee may
also be required to provide a breakdown, by market, of any metric.
SCHEDULE IX
Capital Budgets
(To be agreed upon prior to Closing)
TRITON PCS, INCORPORATED
1999 Capital Budget Estimate
Buildout Summary
POPS (Millions) CELL SITES
Build Additional Primary Metro Cities 1.2 165
Interstate Highway Buildout Minimal 120
Secondary Markets Buildout 1.0 150
---------- -----
TOTAL 2.2 435
Capital Summary
# Sites Capital
New Cell Site @ $300,000 150 $45,000,000
Co-Location @ $250,000 250 $62,500,000
Rooftop Sites @ $250,000 35 $8,750,000
--------- ------------
TOTAL CELL SITES 435 $116,250,000
Switch Software $2,567,000
Switch Maintenance Fees $170,000
MCS ENI $768,000
------------
TOTAL SWITCH $3,505,000
Spectrum Clearing $650,000
Cost Sharing $3,750,000
Engineering & Operations Capital $1,200,000
Office Capital $4,000,000
------------
TOTAL CAPITAL $129,355,000
========================================================================
TRITON PCS HOLDINGS, INC.
SECOND AMENDED AND RESTATED
BYLAWS
Adopted as of October 27, 1999
=======================================================================
TABLE OF CONTENTS
ARTICLE 1.
STOCKHOLDERS
PAGE
1.1 Annual Meetings 1
1.2 Special Meetings 1
1.3 Notice of Meetings; Waiver 1
1.4 Quorum 2
1.5 Voting 2
1.6 Voting by Ballot 2
1.7 Adjournment 2
1.8 Proxies 3
1.9 Organization; Procedure; Order of Business 3
1.10 Action by Written Consent of Stockholders 4
1.11 Inspectors 5
ARTICLE 2.
BOARD OF DIRECTORS
2.1 General Powers 5
2.2 Number, Election and Terms 5
2.3 Nominations of Directors 5
2.4 Annual and Regular Meetings 7
2.5 Special Meetings 7
2.6 Quorum; Voting 8
2.7 Adjournment 8
2.8 Action Without a Meeting 8
2.9 Regulations; Manner of Acting 8
2.10 Action by Telephonic Communications 8
2.11 Resignation 8
2.12 Removal of Directors 8
2.13 Vacancies and Newly Created Directorships 9
2.14 Additional Rights of Certain Stockholders
Regarding Directors 9
2.15 Compensation 9
2.16 Reliance on Accounts and Reports, etc. 10
ARTICLE 3.
EXECUTIVE COMMITTEE AND OTHER COMMITTEES
3.1 How Constituted 10
3.2 Powers 10
3.3 Quorum; Voting 11
3.4 Action Without a Meeting 11
3.5 Regulations; Manner of Acting 11
3.6 Action by Telephonic Communications 11
3.7 Resignation 11
3.8 Removal 11
3.9 Vacancies 11
ARTICLE 4.
OFFICERS
4.1 Titles 12
4.2 Election 12
4.3 Salaries 12
4.4 Removal and Resignation; Vacancies 12
4.5 Authority and Duties 12
4.6 The Chief Executive Officer 12
4.7 The President 13
4.8 The Vice Presidents 13
4.9 The Secretary 13
4.10 The Treasurer 14
4.11 Additional Officers 15
4.12 Security 15
ARTICLE 5.
CAPITAL STOCK
5.1 Certificates of Stock; Uncertificated Shares 15
5.2 Signatures; Facsimile 16
5.3 Lost, Stolen or Destroyed Certificates 16
5.4 Transfer of Stock 16
5.5 Record Date 16
5.6 Registered Stockholders 17
5.7 Transfer Agent and Registrar 17
ARTICLE 6.
INDEMNIFICATION
6.1 Indemnification 17
6.2 Advancement of Expenses 17
6.3 Rights Not Exclusive 18
6.4 Continuing Rights 18
6.5 Insurance 18
6.6 Contract Rights; No Repeal 18
6.7 Enforceability; Burden of Proof 19
6.8 Service at the Request of the Corporation 19
6.9 Right to Be Covered by Applicable Law 19
ARTICLE 7.
OFFICES
7.1 Registered Office 19
7.2 Other Offices 20
ARTICLE 8.
GENERAL PROVISIONS
8.1 Dividends 20
8.2 Reserves 20
8.3 Execution of Instruments 20
8.4 Corporate Indebtedness 20
8.5 Deposits 21
8.6 Checks 21
8.7 Sale, Transfer, ect. of Securities 21
8.8 Voting as Stockholder 21
8.9 Fiscal Year 21
8.10 Seal 21
8.11 Books and Records 22
ARTICLE 9.
AMENDMENT OF BYLAWS
9.1 Amendment 22
ARTICLE 10.
CONSTRUCTION
10.1 Construction 22
SECOND AMENDED AND RESTATED BYLAWS
OF
TRITON PCS HOLDINGS, INC.
ARTICLE 1.
STOCKHOLDERS MEETINGS
1.1 Annual Meeting. The annual meeting of the
stockholders of Triton PCS Holdings, Inc., a Delaware corporation
(the Corporation), for the election of directors and for the
transaction of such other business as may properly come before
such meeting shall be held at such place, either within or
without the State of Delaware, at 9:00 A.M. on the second
Wednesday of each April of each year (or, if such day is a legal
holiday, then on the next succeeding business day), or at such
other date and hour, as may be fixed from time to time by
resolution of the Board of Directors of the Corporation (as
hereinafter referred to collectively as the Board of Directors,
the Directors, or the Board, and any member thereof individually
as a Director) and set forth in the notice or waiver of notice of
the meeting. [Sections 211(a), (b).]
1.2 Special Meetings. Special meetings of the stockholders
may be called at any time by the Chairman of the Board, the Chief
Executive Officer (or, in the event of his absence or disability,
by the President), or by the Board of Directors. A special
meeting shall be called by the Chairman of the Board, the Chief
Executive Officer (or, in the event of his absence or disability,
by the President), or by the Secretary, immediately upon receipt
of a written request therefor by stockholders holding in the
aggregate in excess of 50% of the outstanding shares of the
Corporation at the time entitled to vote at any meeting of the
stockholders. Any such special meeting of the stockholders shall
be held at such place, within or without the State of Delaware,
as shall be specified in the notice or waiver of notice thereof.
[Section 211(d).]
1.3 Notice of Meetings; Waiver. The Secretary or any
Assistant Secretary shall cause written notice of the place, date
and hour of each meeting of the stockholders, and, in the case of
a special meeting, the purpose or purposes for which such meeting
is called, to be given personally or by mail, not less than ten
(10) nor more than sixty (60) days before the date of the
meeting, to each stockholder of record entitled to vote at such
meeting. If such notice is mailed, it shall be deemed to have
been given to a stockholder when deposited in the United States
mail, postage prepaid, directed to the stockholder at his address
as it appears on the record of stockholders of the Corporation,
or, if he shall have filed with the Secretary a written request
that notices to him be mailed to some other address, then
directed to him at such other address. Such further notice shall
be given as may be required by law.
Whenever notice is required to be given to stockholders
hereunder, a written waiver, signed by a stockholder, whether be
fore or after the time stated therein, shall be deemed equivalent
to notice. Neither the business to be transacted at, nor the pur
pose of, any regular or special meeting of the stockholders need
be specified in a written waiver of notice. The attendance of
any stockholder at a meeting of stockholders shall constitute a
waiver of notice of such meeting, except when the stockholder
attends a meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business on
the ground that the meeting is not lawfully called or convened.
[Sections 222, 229.]
1.4 Quorum. Except as otherwise required by law or by the
certificate of incorporation of the Corporation then in effect
(the Certificate of Incorporation), the presence in person or by
proxy of the holders of record of a majority of the shares
entitled to vote at a meeting of stockholders shall constitute a
quorum for the transaction of business at such meeting. [Section
216.]
1.5 Voting. If, pursuant to Section 5.5, a record date
has been fixed, every holder of record of shares entitled to vote
at a meeting of stockholders shall be entitled to one vote for each
share outstanding in his name on the books of the Corporation at
the close of business on such record date. If no record date has
been fixed, then every holder of record of shares entitled to
vote at a meeting of stockholders shall be entitled to one vote
for each share of stock standing in his name on the books of the
Corporation at the close of business on the day next preceding
the day on which notice of the meeting is given, or, if notice is
waived, at the close of business on the day next preceding the
day on which the meeting is held. Except as otherwise required
by law, by the Certificate of Incorporation or these Second
Amended and Restated Bylaws of the Corporation (the Bylaws), the
vote of a majority of the shares represented in person or by
proxy at any meeting at which a quorum is present shall be
sufficient for the transaction of any business at such meeting.
[Sections 212(a), 216]
1.6 Voting by Ballot. Except as otherwise provided by
law, by the Certificate of Incorporation or by these Bylaws, no
vote of the stockholders need be taken by written ballot or
conducted by inspectors of election. However, every vote taken
by written ballot shall be counted by the inspectors of election.
The Board of Directors, in its discretion, or the officer of the
Corporation presiding at a meeting of stockholders, in his
discretion, may require that any votes cast at such meeting shall
be cast by written ballot. Any vote which need not be taken by
ballot may be conducted in any manner approved by the meeting.
1.7 Adjournment. If a quorum is not present at any meeting
of the stockholders, the stockholders entitled to vote thereat
present in person or by proxy shall have the power to adjourn any
such meeting from time to time until a quorum is present. Notice
of any adjourned meeting of the stockholders of the Corporation
need not be given if the place, date and hour thereof are
announced at the meeting at which the adjournment is taken,
provided, however, that if the adjournment is for more than
thirty (30) days, or if after the adjournment a new record date
for the adjourned meeting is fixed pursuant to Section 5.5, a
notice of the adjourned meeting, conforming to the requirements
of Section 1.3, shall be given to each stockholder of record
entitled to vote at such meeting. At any adjourned meeting at
which a quorum is present, any business may be transacted that
might have been transacted on the original date of the meeting.
[Section 222(c).]
1.8 Proxies. Any stockholder entitled to vote at any
meeting of the stockholders or to express consent to or dissent
from corporate action without a meeting may, by a written instru
ment signed by such stockholder or his attorney-in-fact,
authorize another person or persons to vote at any such meeting
and express such consent or dissent for him by proxy. No such
proxy shall be voted or acted upon after the expiration of three
(3) years from the date of such proxy, unless such proxy provides
for a longer period. Every proxy shall be revocable at the
pleasure of the stockholder executing it, except in those cases
where applicable law provides that a proxy shall be irrevocable.
A stockholder may revoke any proxy which is not irrevocable by
attending the meeting and voting in person or by filing an
instrument in writing with the Secretary revoking the proxy or by
filing another duly executed proxy bearing a later date.
[Section 212(b), (c).]
1.9 Organization; Procedure; Order of Business.
(1) At every meeting of stockholders, the presiding officer
shall be the Chief Executive Officer or, in the event of his
absence or disability, the President or, in the event of his
absence or disability, a presiding officer chosen by a majority
of the stockholders present in person or by proxy. The
Secretary, or in the event of his absence or disability, the
Assistant Secretary, if any, or if there be no Assistant
Secretary, in the absence of the Secretary, an appointee of the
presiding officer, shall act as Secretary of the meeting. Unless
otherwise determined by the Board prior to the meeting, the
presiding officer at the meeting of the stockholders will also
determine the order of business and have the authority in his
sole discretion to regulate the conduct of any such meeting,
including, without limitation, by (i) imposing restrictions on
the persons (other than stockholders of the Corporation or their
duly appointed proxies) who may attend any such stockholders
meeting, (ii) ascertaining whether any stockholder or his proxy
may be excluded from any meeting of the stockholders based upon
any determination by the presiding officer, in his sole
discretion, that any such person has unduly disrupted or is
likely to disrupt the proceedings thereat, and (iii) determining
the circumstances in which any person may make a statement or ask
questions at any meeting of the stockholders.
(2) No business may be transacted at an annual meeting of
stockholders other than business that is either (i) specified in
the notice of meeting (or any supplement thereto) given by or at
the direction of the Board (or any duly authorized committee
thereof), (ii) otherwise properly brought before the annual
meeting by or at the direction of the Board (or any duly
authorized committee thereof), or (iii) otherwise properly
brought before the annual meeting by any stockholder of the
Corporation (A) who is a stockholder of record on the date of the
giving of the notice provided for in this Section 1.9 and on the
record date for the determination of stockholders entitled to
vote at such annual meeting and (B) who complies with the notice
procedures set forth in this Section 1.9.
(3) In addition to any other applicable requirements for
business to be properly brought before an annual meeting by a
stockholder, such stockholder must have given timely notice
thereof in proper written form to the Secretary of the
Corporation. To be timely, a stockholders notice to the
Secretary must be delivered to or mailed and received at the
principal executive offices of the Corporation not less than
sixty (60) nor more than ninety (90) calendar days prior to the
meeting; provided, however, that in the event that less than
seventy (70) calendar days notice or prior public disclosure of
the date of the meeting is given or made to stockholders, notice
by the stockholder in order to be timely must be so received not
later than the close of business on the tenth (10th) calendar day
following the day on which public disclosure of the date of the
annual meeting was made. In no event will the public disclosure
of an adjournment of an annual meeting commence a new time period
for the giving of a stockholders notice as described above.
(4) To be in proper written form, a stockholders notice to
the Secretary must set forth as to each matter such stockholder
proposes to bring before the annual meeting (i) a brief
description of the business desired to be brought before the
annual meeting and the reasons for conducting such business at
the annual meeting, (ii) the name and record address of such
stockholder, (iii) the class or series and number of shares of
capital stock of the Corporation which are owned beneficially or
of record by such stockholder, (iv) a description of all
arrangements or understandings between such stockholder and any
other person or persons (including their names) in connection
with the proposal of such business by such stockholder and any
material interest of such stockholder in such business, and (v) a
representation that such stockholder intends to appear in person
or by proxy at the annual meeting to bring such business before
the meeting.
(5) At a special meeting of stockholders, only such
business may be conducted or considered as is properly brought
before the meeting. To be properly brought before a special
meeting, business must be (i) specified in the notice of the
meeting (or any supplement thereto) given by or at the direction
of the Chairman or a majority of the Board of Directors in
accordance with Section 1.3 or (ii) otherwise properly brought
before the meeting by the presiding officer or by or at the
direction of a majority of the Board of Directors.
(6) The determination of whether any business sought to be
brought before any annual or special meeting of the stockholders
is properly brought before such meeting in accordance with this
Section 1.9 will be made by the presiding officer of such
meeting. If the presiding officer determines that any business
is not properly brought before such meeting, he will so declare
to the meeting and any such business will not be conducted or
considered.
1.10 Action by Written Consent of Stockholders. To the
fullest extent permitted by law, whenever the vote of the stock
holders at a meeting thereof is required or permitted to be taken
for or in connection with any corporate action, such action may
be taken without a meeting, without prior notice and without a
vote of stockholders, if the holders of outstanding stock having
not less than the minimum number of votes that would be necessary
to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted shall consent in
writing to such corporate action being taken. Prompt notice of
the taking of the corporate action without a meeting by less than
unanimous written consent shall be given to those stockholders
who have not so consented in writing.
1.11 Inspectors. The Board of Directors may appoint one or
more inspectors of election to act as judges of the voting and to
determine those entitled to vote at any meeting of the
stockholders, or any adjournment thereof, in advance of such
meeting. The Board of Directors may designate one or more
persons as alternate inspectors to replace any inspector who
fails to act. If no inspector or alternate is able to act at a
meeting of stockholders, the presiding officer of the meeting may
appoint one or more substitute inspectors.
ARTICLE 2.
BOARD OF DIRECTORS
1.12 General Powers. Except as may otherwise be provided by
law, by the Certificate of Incorporation or by these Bylaws, the
property, affairs and business of the Corporation shall be
managed by or under the direction of the Board of Directors, and
the Board of Directors may exercise all the powers of the
Corporation. [Section 141(a).]
1.13 Number, Election and Terms. The number of Directors of
the Corporation shall not be less than three (3) nor more than
eleven (11), the precise number to be fixed by resolution of a
majority of the entire Board of Directors from time to time. The
Directors will be classified with respect to the time for which
they severally hold office in accordance with the Certificate of
Incorporation.
1.14 Nominations of Directors.
(1) Subject to the provisions of Section 2.3(e), only
persons who are nominated in accordance with the following
procedures will be eligible for election as Directors of the
Corporation. Nominations of persons for election to the Board
may be made at any annual meeting of stockholders (i) by or at
the direction of the Board (or any duly authorized committee
thereof) or (ii) by any stockholder of the Corporation (A) who is
a stockholder of record on the date of the giving of the notice
provided for in this Section 2.3 and on the record date for the
determination of stockholders entitled to vote at such annual
meeting and (B) who complies with the notice procedures set forth
in this Section 2.3. In addition to any other applicable
requirements for a nomination to be made by a stockholder, such
stockholder must have given timely notice thereof in proper
written form to the Secretary of the Corporation. To be timely,
a stockholders notice to the Secretary must be delivered to or
mailed and received at the principal executive offices of the
Corporation not less than sixty (60) nor more than ninety (90)
calendar days prior to the date of the annual meeting; provided,
however, that in the event less than seventy (70) calendar days
notice or prior public disclosure of the date of the meeting is
given or made to stockholders, notice by the stockholder in order
to be timely must be so received not later than the close of
business on the tenth (10th) calendar day following the day on
which public disclosure of the date of the annual meeting was
made. In no event will the public disclosure of an adjournment
of an annual meeting commence a new time period for the giving of
a stockholders notice as described above.
(2) To be in proper written form, a stockholders notice to
the Secretary must set forth (i) as to each person whom the
stockholder proposes to nominate for election as a Director (A)
the name, age, business address and residence address of the
person, (B) the principal occupation or employment of the person,
(C) the class or series and number of shares of capital stock of
the Corporation which are owned beneficially or of record by the
person, and (D) any other information relating to the person that
would be required to be disclosed in a proxy statement or other
filings required to be made in connection with solicitations of
proxies for election of directors pursuant to Section 14 of the
Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder (the Exchange Act), and (ii)
as to the stockholder giving the notice (A) the name and record
address of such stockholder, (B) the class or series and number
of shares of capital stock of the Corporation which are owned
beneficially or of record by such stockholder, (C) a description
of all arrangements or understandings between or among such
stockholder and each proposed nominee and any other person or
persons (including their names) pursuant to which the
nomination(s) are to be made by such stockholder, (D) a
representation that such stockholder intends to appear in person
or by proxy at the meeting to nominate the persons named in its
notice, and (E) any other information relating to such
stockholder that would be required to be disclosed in a proxy
statement or other filings required to be made in connection with
solicitations of proxies for election of directors pursuant to
the Exchange Act. Such notice must be accompanied by a written
consent of each proposed nominee to being named as a nominee and
to serve as a Director if elected.
(3) If the presiding officer of the meeting determines that
a nomination was not made in accordance with the foregoing
procedures, the presiding officer will declare to the meeting
that the nomination was defective, and such defective nomination
will be disregarded.
(4) Notwithstanding anything in this Section 2.3 to the
contrary, in the event that the number of Directors to be elected
to the Board is increased and there is no public disclosure by
the Corporation naming all of the nominees for Director or
specifying the size of the increased Board at least seventy (70)
calendar days prior to the date on which the Corporation first
mailed its proxy materials for the preceding years annual meeting
of stockholders, a stockholders notice required by this Section
2.3 will also be considered timely, but only with respect to
nominees for any new positions created by such increase, if it is
delivered to the Secretary at the principal executive offices of
the Corporation not later than the close of business on the tenth
(10th) day following the day on which such public disclosure is
first made by the Corporation.
(5) Notwithstanding anything to the contrary contained in
this Section 2.3, so long as the holders of the Series A
Preferred Stock shall have the right to nominate one of the Class
II Directors of the Corporation pursuant to Section 4.3(d)(iii)
of the Certificate of Incorporation, or the Cash Equity Investors
shall have the right to nominate one of the Class I Directors and
one of the Class III Directors of the Corporation pursuant to
Section 3.1(a) of the Stockholders Agreement (as hereinafter
defined), the holders of the Series A Preferred Stock (solely in
the case of the nomination of any such Class II Director) and the
Cash Equity Investors (solely in the case of the nomination of
any such Class I or Class III Director), shall have the right to
nominate such Director by written notice to the Company which
notice shall set forth the name of the person being nominated.
The Company shall deliver written notice to the holders of the
Series A Preferred Stock and to the Cash Equity Investors of the
date the Company proposes to distribute any proxy solicitation
materials for its annual meeting at least thirty (30) days prior
to such earliest proposed distribution date to enable the holders
of the Series A Preferred Stock and the Cash Equity Investors, as
the case may be, to give notice to the Corporation of the persons
to be nominated thereby in accordance with the Certificate of
Incorporation or Stockholders Agreement, as applicable. The
Company shall include in any proxy solicitation materials related
to the election of members of the Board of Directors information
and recommendations of the Board to effect the nomination of any
Directors so designated by the holders of the Series A Preferred
Stock and the Cash Equity Investors, as the case may be. As used
herein, the term Stockholders Agreement means the First Amended
and Restated Stockholders Agreement, dated as of October __,
1999, by and among the Corporation and the other stockholders of
the Corporation named therein, as the same may be amended,
modified or supplemented in accordance with the terms thereof.
1.15 Annual and Regular Meetings. The annual meeting of the
Board of Directors for the purpose of electing officers and for
the transaction of such other business as may come before the
meeting shall be held as soon as possible following adjournment
of the annual meeting of the stockholders at the place of such
annual meeting of the stockholders. Notice of such annual
meeting of the Board of Directors need not be given. The Board
of Directors from time to time may by resolution provide for the
holding of regular meetings and fix the place (which may be
within or without the State of Delaware) and the date and hour of
such meetings. Notice of regular meetings need not be given;
provided, however, that if the Board of Directors shall fix or
change the time or place of any regular meeting, notice of such
action shall be mailed promptly, or sent by telegram, facsimile
or cable, to each Director who shall not have been present at the
meeting at which such action was taken, addressed to him at his
usual place of business, or shall be delivered to him personally.
Notice of such action need not be given to any Director who
attends the first regular meeting after such action is taken
without protesting the lack of notice to him prior to or at the
commencement of such meeting, or to any Director who submits a
signed waiver of notice, whether before or after such meeting.
[Section 141(g).]
1.16 Special Meetings. Special meetings of the Board of
Directors shall be held whenever called by the Chairman of the
Board or the Chief Executive Officer (or, in the event of his
absence or disability, by the President) at such place (within or
without the State of Delaware), date and hour as may be specified
in the respective notices or waivers of notice of such meetings.
Special meetings of the Board of Directors may be called on
twenty-four (24) hours notice, if notice is given to each
Director personally or by telephone or facsimile, or on five (5)
days notice, if notice is mailed to each Director, addressed to
him at his usual place of business. Notice of any special
meeting need not be given to any Director who attends such
meeting without protesting the lack of notice to him prior to or
at the commencement of such meeting, or to any Director who
submits a signed waiver of notice, whether before or after such
meeting, and any business may be transacted thereat. [Sections
141(g), 229.]
1.17 Quorum; Voting. At all meetings of the Board of
Directors, the presence of a majority of the total number of
Directors shall constitute a quorum for the transaction of
business. Except as otherwise required by law, by the
Certificate of Incorporation or these Bylaws, the vote of a
majority of the Directors present at any meeting at which a
quorum is present shall be the act of the Board of Directors.
[Section 141(b).]
1.18 Adjournment. A majority of the Directors present,
whether or not a quorum is present, may adjourn any meeting of
the Board of Directors to another time or place. No notice need
be given of any adjourned meeting unless the time and place of
the adjourned meeting are not announced at the time of
adjournment, in which case notice conforming to the requirements
of Section 2.5 shall be given to each Director.
1.19 Action Without a Meeting. Any action required or
permitted to be taken at any meeting of the Board of Directors
may be taken without a meeting if all members of the Board of
Directors consent thereto in writing, and such writing or
writings are filed with the minutes of proceedings of the Board
of Directors. [Section 141(f).]
1.20 Regulations; Manner of Acting. To the extent
consistent with applicable law, the Certificate of Incorporation
and these Bylaws, the Board of Directors may adopt such rules and
regulations for the conduct of meetings of the Board of Directors
and for the management of the property, affairs and business of
the Corporation as the Board of Directors may deem appropriate.
The Directors shall act only as a Board, and the individual
Directors shall have no power as such.
1.21 Action by Telephonic Communications. Members of the
Board of Directors may participate in a meeting of the Board of
Directors by means of conference telephone or similar communi
cations equipment by means of which all persons participating in
the meeting can hear each other, and participation in a meeting
pursuant to this provision shall constitute presence in person at
such meeting. [Section 141(i).]
1.22 Resignation. Any Director may resign at any time by
delivering a written notice of resignation, signed by such
Director, to the Chairman of the Board, the Chief Executive
Officer, the President or the Secretary. Unless otherwise spe
cified therein, such resignation shall take effect upon delivery.
[Section 141(b).]
1.23 Removal of Directors. Subject to the provisions of
Section 2.14, any Director may be removed at any time but only
for cause and only upon the affirmative vote of the holders of a
majority of the outstanding shares of stock of the Corporation
entitled to vote for the election of such Director, voting
together as a single class, cast at an annual meeting or at a
special meeting of stockholders called for that purpose or by
written consent. Subject to the provisions of Section 2.14, any
vacancy in the Board of Directors caused by any such removal may
be filled at such meeting or by written consent by the
stockholders entitled to vote for the election of the Director so
removed. Subject to the provisions of Section 2.14, if such
stockholders do not fill such vacancy at such meeting or by
written consent, such vacancy may be filled in the manner
provided in Section 2.13.
1.24 Vacancies and Newly Created Directorships. Subject to
the provisions of Section 2.14, if any vacancies shall occur in
the Board of Directors by reason of death, resignation, removal
or otherwise, or if the authorized number of Directors shall be
increased, the Directors then in office shall continue to act,
and such vacancies and newly created directorships may be filled
by a majority of the Directors then in office, although less than
a quorum, or by a sole remaining Director. Any Director elected
to fill a vacancy or a newly created directorship in accordance
with the preceding sentence shall hold office for the remainder
of the full term of the class of Directors in which the new
directorship was created or the vacancy occurred and until his
successor has been elected and qualified or until his earlier
death, resignation or removal. No decrease in the number of
Directors constituting the Board may shorten the term of any
incumbent Director.
1.25 Additional Rights of Certain Stockholders Regarding
Directors. Notwithstanding anything to the contrary contained
in this Article 2, so long as the holders of the Series A
Preferred Stock shall have the right to nominate one of the Class
II Directors of the Corporation pursuant to Section 4.3(d)(iii)
of the Certificate of Incorporation, or the Cash Equity Investors
shall have the right to nominate one of the Class I Directors and
one of the Class III Directors of the Corporation pursuant to
Section 3.1(a) of the Stockholders Agreement, the holders of the
Series A Preferred Stock (solely in the case of any such Class II
Director elected to the Board of Directors) and the Cash Equity
Investors (solely in the case of such Class I Director and Class
III Director elected to the Board of Directors) shall have the
right to cause the Corporation to remove any such Director, with
or without cause, and to replace any such Director (whether or
not such Director resigns, is removed from the Board of Directors
with or without cause or ceases to be a Director by reason of
death, disability or for any other reason). In the event of any
such replacement, the holders of the Series A Preferred Stock
(solely in the case of any such Class II Director being replaced)
and the Cash Equity Investors (solely in the case of any such
Class I Director or Class III Director being replaced) shall
deliver a written notice to the Corporation and the other
members of the Board of Directors setting forth the name of the
Director being replaced and the name of the replacement Director.
Upon its receipt of such notice, the Corporation shall cause to
be elected for the remainder of the term of any Director so
replaced the person designated as the replacement Director in
such notice.
1.26 Compensation. The amount, if any, which each Director
shall be entitled to receive as compensation for his services as
such shall be fixed from time to time by resolution of the Board
of Directors. [Section 141(h).]
1.27 Reliance on Accounts and Reports, etc. A member of
the Board of Directors, or a member of any committee of the Board
(a Committee) designated by the Board of Directors, shall, in the
performance of his duties, be fully protected in relying in good
faith upon the records of the Corporation and upon such
information, opinions, reports or statements presented to the
Corporation by any of the Corporations officers or employees, or
Committees of the Board of Directors, or by any other person as
to matters the member reasonably believes are within such other
persons professional or expert competence and who has been
selected with reasonable care by or on behalf of the Corporation,
including, without limitation, independent certified public
accountants and appraisers. [Section 141(e).]
ARTICLE 3.
EXECUTIVE COMMITTEE AND OTHER COMMITTEES
1.28 How Constituted. The Board of Directors may designate
one or more Committees, including an Executive Committee, each
such Committee to consist of such number of Directors as from
time to time may be fixed by the Board of Directors. The Board
of Directors may designate one or more Directors as alternate
members of any such Committee, who may replace any absent or
disqualified member or members at any meeting of such Committee.
In addition, unless the Board of Directors has so designated an
alternate member of such Committee, in the absence or
disqualification of a member of such Committee, the member or
members thereof present at any meeting and not disqualified from
voting, whether or not he or they constitute a quorum, may
unanimously appoint another member of the Board of Directors to
act at the meeting in the place of any such absent or
disqualified member. Thereafter, members (and alternate members,
if any) of each such Committee may be designated at the annual
meeting of the Board of Directors. Any such Committee may be
abolished or redesignated from time to time by the Board of
Directors. Each member (and each alternate member) of any such
Committee (whether designated at an annual meeting of the Board
of Directors or to fill a vacancy or otherwise) shall hold office
until his successor shall have been designated or until he shall
cease to be a Director, or until his earlier death, resignation
or removal. [Section 141(c).]
1.29 Powers. During the intervals between the meetings of
the Board of Directors, the Executive Committee, if created by
the Board of Directors, and except as otherwise provided in this
section, shall have and may exercise all the powers and authority
of the Board of Directors in the management of the property,
affairs and business of the Corporation, including the power to
declare dividends and to authorize the issuance of stock. Each
such other Committee shall have and may exercise such powers of
the Board of Directors as may be provided by resolution of the
Board, provided, that neither the Executive Committee nor any
such other Committee shall have the power or authority to (i)
approve or adopt, or recommend to the stockholders, any action or
matter expressly required by the General Corporation Law of the
State of Delaware, as amended (the GCL), to be submitted to
stockholders for approval or (ii) adopt, amend or repeal any of
these Bylaws. The Executive Committee shall have, and any such
other Committee may be granted by the Board of Directors, power
to authorize the seal of the Corporation to be affixed to any or
all papers which may require it. [Section 141(c).]
1.30 Quorum; Voting. Except as may be otherwise provided in
the resolution creating such Committee, at all meetings of any
Committee the presence of members (or alternate members)
constituting a majority of the total authorized membership of
such Committee shall constitute a quorum for the transaction of
business. Except as otherwise provided by law, by the
Certificate of Incorporation or these Bylaws, the act of a
majority of the members present at any meeting at which a quorum
is present shall be the act of such Committee. [Section 141(c).]
1.31 Action Without a Meeting. Any action required or
permitted to be taken at any meeting of any such Committee may be
taken without a meeting, if all members of such Committee shall
consent to such action in writing and such writing or writings
are filed with the minutes of the proceedings of the Committee.
1.32 Regulations; Manner of Acting. To the extent
consistent with applicable law, the Certificate of Incorporation
and these Bylaws, each such Committee may fix its own rules of
procedure and may meet at such place (within or without the State
of Delaware), at such time and upon such notice, if any, as it
shall determine from time to time. Each such Committee shall
keep minutes of its proceedings and shall report such proceedings
to the Board of Directors at the meeting of the Board of
Directors next following any such proceeding. The members of any
such Committee shall act only as a Committee, and the individual
members of such Committee shall have no power as such.
1.33 Action by Telephonic Communications. Members of any
Committee designated by the Board of Directors may participate in
a meeting of such Committee by means of conference telephone or
similar communications equipment by means of which all persons
participating in the meeting can hear each other, and
participation in a meeting pursuant to this provision shall
constitute presence in person at such meeting. [Section 141(i).]
1.34 Resignation. Any member (and any alternate member) of
any Committee may resign at any time by delivering a written
notice of resignation, signed by such member, to the Chairman of
the Board, the Chief Executive Officer, the President or the
Secretary. Unless otherwise specified therein, such resignation
shall take effect upon delivery.
1.35 Removal. Any member (any alternate member) of any
Committee may be removed at any time, with or without cause, by
resolution adopted by a majority of the whole Board of Directors.
1.36 Vacancies. If any vacancy shall occur in any Committee
by reason of death, resignation, removal or otherwise, the
remaining members (and any alternate members) shall continue to
act, and any such vacancy may be filled by the Board of Directors
or the remaining members of the Committee as provided in Section 3.1.
ARTICLE 4.
OFFICERS
1.37 Titles. The officers of the Corporation shall be
chosen by the Board of Directors and shall be a Chief Executive
Officer, the President, one or more Vice Presidents, a Secretary
and a Treasurer. The Board of Directors also may elect one or
more Assistant Secretaries and Assistant Treasurers in such
numbers as the Board of Directors may determine, and shall also
elect a Chairman of the Board. Any number of offices may be held
by the same person. Officers may be, but need not be, Directors
or stockholders of the Corporation. [Section 142(a), (b).]
1.38 Election. Unless otherwise determined by the Board of
Directors, the officers of the Corporation shall be elected by
the Board of Directors at the annual meeting of the Board of
Directors, and shall be elected to hold office until the next
succeeding annual meeting of the Board of Directors. In the
event of the failure to elect officers at such annual meeting,
officers may be elected at any regular or special meeting of the
Board of Directors. Each officer shall hold office until his
successor has been elected and qualified, or until his earlier
death, resignation or removal. [Section 142(b).]
1.39 Salaries. The salaries of all officers of the
Corporation shall be fixed by the Board of Directors or by a
Committee of the Board.
1.40 Removal and Resignation; Vacancies. Any officer may be
removed with or without cause at any time by the Board of
Directors. Any officer may resign at any time by delivering a
written notice of resignation, signed by such officer, to the
Board of Directors, the Chairman of the Board, the Chief
Executive Officer, the President or the Secretary. Unless
otherwise specified therein, such resignation shall take effect
upon delivery. Any vacancy occurring in any office of the
Corporation by death, resignation, removal or otherwise, shall be
filled by the Board of Directors. [Section 142(b), (e).]
1.41 Authority and Duties. The officers of the Corporation
shall have such authority and shall exercise such powers and
perform such duties as may be specified in these Bylaws, except
that in any event each officer shall exercise such powers and
perform such duties as may be required by law. [Section 142(a).]
1.42 The Chief Executive Officer. The Chief Executive
Officer shall preside at all meetings of the stockholders and
Directors, and, unless otherwise provided by resolution of the
Board, shall be the chief executive officer of the Corporation.
The Chief Executive Officer, together with the President and
subject to the directions of the Board of Directors, shall have
general control and supervision of the business and operations of
the Corporation and shall see that all orders and resolutions of
the Board of Directors are carried into effect. He shall manage
and administer the Corporations business and affairs and shall
also perform all duties and exercise all powers usually
pertaining to the office of a Chief Executive Officer of a
corporation. He shall have the authority to sign, in the name
and on behalf of the Corporation, checks, orders, contracts,
leases, notes, drafts and other documents and instruments in
connection with the business of the Corporation and, together
with the Secretary or an Assistant Secretary, conveyances of real
estate and other documents and instruments to which the seal of
the Corporation is affixed. He shall have the authority to cause
the employment or appointment of such employees and agents of the
Corporation as the conduct of the business of the Corporation may
require, to fix their compensation, and to remove or suspend any
employee or agent elected or appointed by the Chief Executive
Officer, the President or the Board of Directors. The Chief
Executive Officer shall perform such other duties and have such
other powers as the Board of Directors may from time to time
prescribe.
1.43 The President. The President shall be the chief
operating officer of the Corporation and, together with the Chief
Executive Officer and subject to the directions of the Board of
Directors, shall have general control and supervision of the
policies and operations of the Corporation and shall see that all
orders and resolutions of the Board of Directors are carried into
effect. In the absence of the Chief Executive Officer, the
President shall preside at all meetings of the stockholders and
in the absence of the Chairman of the Board and the Chief
Executive Officer, the President shall preside at all meetings of
the Directors. He shall manage and administer the Corporations
business and affairs and shall also perform all duties and
exercise all powers usually pertaining to the office of a chief
operating officer of a corporation. He shall have the authority
to sign, in the name and on behalf of the Corporation, checks,
orders, contracts, leases, notes, drafts and other documents and
instruments in connection with the business of the Corporation
and, together with the Secretary or an Assistant Secretary,
conveyances of real estate and other documents and instruments to
which the seal of the Corporation is affixed. He shall have the
authority to cause the employment or appointment of such
employees and agents of the Corporation as the conduct of the
business of the Corporation may require, to fix their
compensation, and to remove or suspend any employee or agent
elected or appointed by the Chief Executive Officer, the
President or the Board of Directors. The President shall perform
such other duties and have such other powers as the Chief
Executive Officer or the Board of Directors may from time to time
prescribe.
1.44 The Vice Presidents. Each Vice President shall perform
such duties and exercise such powers as may be assigned to him
from time to time by the President. In the absence of the Presi
dent, the duties of the President shall be performed and his
powers may be exercised by such Vice President as shall be
designated by the President, or failing such designation, such
duties shall be performed and such powers may be exercised by
each Vice President in the order of their election to that
office; subject in any case to review and superseding action by
the President.
1.45 The Secretary. The Secretary shall have the following
powers and duties:
(1) He shall keep or cause to be kept a record of all the
proceedings of the meetings of the stockholders and of the Board
of Directors in books provided for that purpose.
(2) He shall cause all notices to be duly given in accordance
with the provisions of these Bylaws and as required by law.
(3) Whenever any Committee shall be appointed pursuant to a
resolution of the Board of Directors, he shall furnish a copy of
such resolution to the members of such Committee.
(4) He shall be the custodian of the records and of the
seal of the Corporation and cause such seal (or a facsimile
thereof) to be affixed to all certificates representing shares of
the Corporation prior to the issuance thereof and to all
instruments the execution of which on behalf of the Corporation
under its seal shall have been duly authorized in accordance with
these Bylaws, and when so affixed he may attest to same.
(5) He shall properly maintain and file all books, reports,
statements, certificates and all other documents and records
required by law, the Certificate of Incorporation or these
Bylaws.
(6) He shall have charge of the stock books and ledgers of
the Corporation and shall cause the stock and transfer books to
be kept in such manner as to show at any time the number of
shares of stock of the Corporation of each class issued and
outstanding, the names (alphabetically arranged) and the
addresses of the holders of record of such shares, the number of
shares held by each holder and the date as of which each became
such holder of record.
(7) He shall sign (unless the Treasurer, an Assistant
Treasurer or Assistant Secretary shall have signed) certificates
representing shares of the Corporation the issuance of which
shall have been authorized by the Board of Directors.
(8) He shall perform, in general, all duties incident to
the office of secretary and such other duties as may be specified
in these Bylaws or as may be assigned to him from time to time by
the Board of Directors, the Chief Executive Officer or the
President.
1.46 The Treasurer. The Treasurer shall have the following
powers and duties:
(1) He shall have charge and supervision over and be
responsible for the moneys, securities, receipts and
disbursements of the Corporation, and shall keep or cause to be
kept full and accurate records of all receipts of the
Corporation.
(2) He shall cause the moneys and other valuable effects of
the Corporation to be deposited in the name and to the credit of
the Corporation in such banks or trust companies or with such
bankers or other depositaries as shall be selected in accordance
with Section 8.5.
(3) He shall cause moneys of the Corporation to be
disbursed by checks or drafts (signed as provided in Section 8.6)
upon the authorized depositories of the Corporation and cause to
be taken and preserved proper vouchers for all moneys disbursed.
(4) He shall render to the Board of Directors, the Chairman
of the Board, the Chief Executive Officer or the President,
whenever requested, a statement of the financial condition of the
Corporation and of all his transactions as Treasurer, and render
a full financial report at the annual meeting of the
stockholders, if called upon to do so.
(5) He shall be empowered from time to time to require from
all officers or agents of the Corporation reports or statements
giving such information as he may desire with respect to any and
all financial transactions of the Corporation.
(6) He may sign (unless an Assistant Treasurer or the
Secretary or an Assistant Secretary shall have signed)
certificates representing stock of the Corporation the issuance
of which shall have been authorized by the Board of Directors.
(7) He shall perform, in general, all duties incident to
the office of treasurer and such other duties as may be specified
in these Bylaws or as may be assigned to him from time to time by
the Board of Directors, the Chairman of the Board, the Chief
Executive Officer or the President.
1.47 Additional Officers. The Board of Directors may
appoint such other officers and agents as it my deem appropriate,
and such other officers and agents shall hold their offices for
such terms and shall exercise such powers and perform such duties
as may be determined from time to time by the Board of Directors.
The Board of Directors from time to time may delegate to any
officer or agent the power to appoint subordinate officers or
agents and to prescribe their respective rights, terms of office,
authorities and duties. Any such officer or agent may remove any
such subordinate officer or agent appointed by him, with or
without cause. [Section 142(a), (b).]
1.48 Security. The Board of Directors may direct that the
Corporation secure the fidelity of any or all of its officers or
agents by bond or otherwise. [Section 142(c).]
ARTICLE 5.
CAPITAL STOCK
1.49 Certificates of Stock, Uncertificated Shares. The
shares of capital stock of the Corporation shall be represented
by certificates, provided that the Board of Directors may provide
by resolution that some or all of any or all classes or series of
the stock of the Corporation shall be uncertificated shares. Any
such resolution shall not apply to shares represented by a
certificate until each certificate is surrendered to the
Corporation. Notwithstanding the adoption of such a resolution
by the Board of Directors, every holder of stock in the
Corporation represented by certificates and upon request every
holder of uncertificated shares shall be entitled to have a
certificate signed by, or in the name of, the Corporation by the
Chairman of the Board, the Chief Executive Officer, the President
or a Vice President, and by the Treasurer or an Assistant
Treasurer, or the Secretary or an Assistant Secretary,
representing the number of shares registered in certificate form.
Such certificate shall be in such form as the Board of Directors
may determine, to the extent consistent with applicable law, the
Certificate of Incorporation and these Bylaws. [Section 158.]
1.50 Signatures; Facsimile. All of such signatures on the
certificate may be a facsimile, engraved or printed, to the
extent permitted by law. In case any officer, transfer agent or
registrar who has signed, or whose facsimile signature has been
placed upon a certificate shall have ceased to be such officer,
transfer agent or registrar before such certificate is issued, it
may be issued by the Corporation with the same effect as if he
were such officer, transfer agent or registrar at the date of
issue. [Section 158.]
1.51 Lost, Stolen or Destroyed Certificates. The Secretary
of the Corporation may cause a new certificate of stock or
uncertificated shares in place of any certificate therefor issued
by the Corporation, alleged to have been lost, stolen or
destroyed, upon delivery to the Secretary of an affidavit of the
owner or owners of such certificate, or his or their legal repre
sentative setting forth such allegation. The Secretary may
require the owner or owners of such lost, stolen or destroyed
certificate, or his or their legal representative, to give the
Corporation a bond sufficient to indemnify it against any claim
that may be made against it on account of the alleged loss, theft
or destruction of any such certificate or the issuance of any
such new certificate or uncertificated shares. [Section 167.]
1.52 Transfer of Stock. Upon surrender to the Corporation
or the transfer agent of the Corporation of a certificate for
shares, duly endorsed or accompanied by appropriate evidence of
succession, assignment or authority to transfer, the Corporation
shall issue a new certificate to the person entitled thereto,
cancel the old certificate and record the transaction upon its
books. Within a reasonable time after the transfer of uncer
tificated stock, the Corporation shall send to the registered
owner thereof a written notice containing the information
required to be set forth or stated on certificates pursuant to
Sections 151, 156, 202(a) or 218(a) of the GCL. Subject to the
provisions of the Certificate of Incorporation and these Bylaws,
the Board of Directors may prescribe such additional rules and
regulations as it may deem appropriate relating to the issue,
transfer and registration of shares of capital stock of the
Corporation. [Sections 151(f), 156, 202(a), 218(a).]
1.53 Record Date. In order to determine the stockholders
entitled to notice of or to vote at any meeting of stockholders
or any adjournment thereof, or entitled to express consent to
corporate action in writing without a meeting, or entitled to
receive payment of any dividend or other distribution or
allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the
purpose of any other lawful action, the Board of Directors may
fix, in advance, a record date, which shall not be more than
sixty (60) nor less than ten (10) days before the date of such
meeting. A determination of stockholders of record entitled to
notice of or to vote at a meeting of stockholders shall apply to
any adjournment of the meeting, provided, however, that the Board
of Directors may fix a new record date for the adjourned meeting.
[Section 213(a)-(c).]
1.54 Registered Stockholders. Prior to due surrender of a
certificate for registration of transfer, the Corporation may
treat the registered owner as the person exclusively entitled to
receive dividends and other distributions, to vote, to receive
notice and otherwise to exercise all the rights and powers of the
owner of the shares represented by such certificate, and the
Corporation shall not be bound to recognize any equitable or
legal claim to or interest in such shares on the part of any
other person, whether or not the Corporation shall have notice of
such claim or interest. Whenever any transfer of shares shall be
made for collateral security, and not absolutely, it shall be so
expressed in the entry of the transfer if, when the certificates
are presented to the Corporation for transfer or uncertificated
shares are requested to be transferred, both the transferor and
transferee request the Corporation to do so. [Section 159.]
1.55 Transfer Agent and Registrar. The Board of Directors
may appoint one or more transfer agents and registrars, and may
require all certificates representing shares of capital stock of
the Corporation to bear the signature of any such transfer agents
or registrars.
ARTICLE 6.
INDEMNIFICATION
1.56 Indemnification. Any individual who was or is a party
or is threatened to be made a party to any threatened, pending,
or completed action, suit, or proceeding (a Proceeding), whether
civil, criminal, administrative, or investigative (whether or not
by or in the right of the Corporation), by reason of the fact
that such individual, or an individual of whom such individual is
the legal representative, is or was a director, officer,
incorporator, employee, or agent of the Corporation, or is or was
serving at the request of the Corporation as a director, officer,
incorporator, employee, partner, trustee, or agent of another
corporation, partnership, joint venture, trust, employee benefit
plan or other enterprise (an Other Entity), shall be indemnified
by the Corporation to the full extent then permitted by law
against expenses (including counsel fees and disbursements),
judgments, fines (including excise taxes assessed on an
individual with respect to an employee benefit plan), and amounts
paid in settlement incurred by him or her in connection with such
Proceeding. Any other individual may be similarly indemnified in
respect of service to the Corporation or to an Other Entity at
the request of the Corporation to the extent the Board of
Directors at any time specifies that any such individual is
entitled to the benefits of this Article VI.
1.57 Advancement of Expenses. The Corporation shall, from
time to time, reimburse or advance to any Director or officer or
such other individual entitled to indemnification hereunder the
funds necessary for payment of expenses, including attorneys fees
and disbursements, incurred in connection with any Proceeding, in
advance of the final disposition of such Proceeding; provided,
however, that, if (and only if) required by the GCL, such
expenses incurred by or on behalf of any Director or officer or
other individual may be paid in advance of the final disposition
of a Proceeding only upon receipt by the Corporation of an
undertaking, by or on behalf of such Director or officer (or
other individual indemnified hereunder), to repay any such amount
so advanced if it shall ultimately be determined by final
judicial decision from which there is no further right of appeal
that such Director, officer or other individual is not entitled
to be indemnified for such expenses.
1.58 Rights Not Exclusive. The rights to indemnification
and reimbursement or advancement of expenses provided by, or
granted pursuant to, this Article VI shall not be deemed
exclusive of any other rights to which an individual seeking
indemnification or reimbursement or advancement of expenses may
have or hereafter be entitled under any statute, this Second
Restated Certificate of Incorporation, the Bylaws, any agreement,
any vote of stockholders or disinterested Directors or otherwise,
both as to action in his or her official capacity and as to
action in another capacity while holding such office.
1.59 Continuing Rights. The rights to indemnification and
reimbursement or advancement of expenses provided by, or granted
pursuant to, this Article VI shall continue as to an individual
who has ceased to be a Director or officer (or other individual
indemnified hereunder), shall inure to the benefit of the
executors, administrators, legatees and distributees of such
individual, and in either case, shall inure whether or not the
claim asserted is based on matters which antedate the adoption of
this Article VI.
1.60 Insurance. The Corporation shall have power to
purchase and maintain insurance on behalf of any individual who
is or was a Director, officer, employee or agent of the
Corporation, or is or was serving at the request of the
Corporation, as a director, officer, employee or agent of an
Other Entity, against any liability asserted against such
individual and incurred by such individual in any such capacity,
or arising out of such individuals status as such, whether or not
the Corporation would have the power to indemnify such individual
against such liability under the provisions of this Article VI,
the Bylaws or under Section 145 of the GCL or any other provision
of law.
1.61 Contract Rights; No Repeal. The provisions of this
Article VI shall be a contract between the Corporation, on the
one hand, and each Director and officer who serves in such
capacity at any time while this Article VI is in effect and any
other individual indemnified hereunder, on the other hand,
pursuant to which the Corporation and each such Director,
officer, or other individual intend to be legally bound. No
repeal or modification of this Article VI shall affect any rights
or obligations with respect to any state of facts then or,
heretofore or thereafter brought or threatened based in whole or
in part upon any such state of facts.
1.62 Enforceability; Burden of Proof. The rights to
indemnification and reimbursement or advancement of expenses
provided by, or granted pursuant to, this Article VI shall be
enforceable by any individual entitled to such indemnification or
reimbursement or advancement of expenses in any court of
competent jurisdiction. The burden of proving that such
indemnification or reimbursement or advancement of expenses is
inappropriate shall be on the Corporation. Neither the failure
of the Corporation (including its Board of Directors, its
independent legal counsel and its stockholders) to have made a
determination prior to the commencement of such action that such
indemnification or reimbursement or advancement of expenses is
proper in the circumstances nor an actual determination by the
Corporation (including its Board of Directors, its independent
legal counsel and its stockholders) that such individual is not
entitled to such indemnification or reimbursement or advancement
of expenses shall constitute a defense to the action or create a
presumption that such individual is not so entitled. Such an
individual shall also be indemnified for any expenses incurred in
connection with successfully establishing his or her right to
such indemnification or reimbursement or advancement of expenses,
in whole or in part, in any such Proceeding.
1.63 Service at the Request of the Corporation. Any
Director or officer of the Corporation serving in any capacity in
(a) another corporation of which a majority of the shares
entitled to vote in the election of its Directors is held,
directly or indirectly, by the Corporation or (b) any employee
benefit plan of the Corporation or any corporation referred to in
clause (a) shall be deemed to be doing so at the request of the
Corporation.
1.64 Right to Be Covered by Applicable Law. Any individual
entitled to be indemnified or to reimbursement or advancement of
expenses as a matter of right pursuant to this Article VI may
elect to have the right to indemnification or reimbursement or
advancement of expenses interpreted on the basis of the
applicable law in effect at the time of the occurrence of the
event or events giving rise to the applicable Proceeding, to the
extent permitted by law, or on the basis of the applicable law in
effect at the time such indemnification or reimbursement or
advancement of expenses is sought. Such election shall be made,
by a notice in writing to the Corporation, at the time
indemnification or reimbursement or advancement of expenses is
sought; provided, however, that if no such notice is given, the
right to indemnification or reimbursement or advancement of
expenses shall be determined by the law in effect at the time
indemnification or reimbursement or advancement of expenses is
sought.
ARTICLE 7.
OFFICES
1.65 Registered Office. The registered office of the
Corporation in the State of Delaware shall be located at
Corporation Trust Center, 1209 Orange Street, Wilmington, New
Castle County, Delaware 19801, and the Corporations registered
agent shall be The Corporation Trust Company.
1.66 Other Offices. The Corporation may maintain offices or
places of business at such other locations within or without the
State of Delaware as the Board of Directors may from time to time
determine or as the business of the Corporation may require.
ARTICLE 8.
GENERAL PROVISIONS
1.67 Dividends. Subject to any applicable provisions of law
and the Certificate of Incorporation, dividends upon the shares
of the Corporation may be declared by the Board of Directors at
any regular or special meeting of the Board of Directors and any
such dividend may be paid in cash, property, or shares of capital
stock of the Corporation. [Section 173.]
1.68 Reserves. There may be set aside out of any funds of
the Corporation available for dividends such sum or sums as the
Board of Directors from time to time, in its absolute discretion,
thinks proper as a reserve or reserves to meet contingencies, or
for equalizing dividends, or for repairing or maintaining any
property of the Corporation or for such other purposes as the
Board of Directors shall think conducive to the interests of the
Corporation, and the Board of Directors may similarly modify or
abolish any such reserve. [Section 171.]
1.69 Execution of Instruments. The Chairman of the Board,
the Chief Executive Officer, the President, any Vice President,
the Secretary or the Treasurer may enter into any contract or
execute and deliver any instrument in the name and on behalf of
the Corporation. The Board of Directors, the Chairman of the
Board, the Chief Executive Officer, or the President may
authorize any other officer or agent to enter into any contract
or execute and deliver any instrument in the name and on behalf
of the Corporation. Any such authorization may be general or
limited to specific contracts or instruments.
1.70 Corporate Indebtedness. No loan shall be contracted on
behalf of the Corporation, and no evidence of indebtedness shall
be issued in its name, unless authorized by the Board of
Directors, the Chairman of the Board, the Chief Executive Officer
or the President. Such authorization may be general or confined
to specific instances. Loans so authorized may be effected at
any time for the Corporation from any bank, trust company or
other institution, or from any firm, corporation or individual.
All bonds, debentures, notes and other obligations or evidences
of indebtedness of the Corporation issued for such loans shall be
made, executed and delivered as the Board of Directors, the
Chairman of the Board, the Chief Executive Officer or the
President shall authorize. When so authorized by the Board of
Directors, the Chairman of the Board, the Chief Executive Officer
or the President any part of or all the properties, including
contract rights, assets, business or good will of the
Corporation, whether then owned or thereafter acquired, may be
mortgaged, pledged, hypothecated or conveyed or assigned in trust
as security for the payment of such bonds, debentures, notes and
other obligations or evidences of indebtedness of the
Corporation, and of any interest thereon, by instruments executed
and delivered in the name of the Corporation.
1.71 Deposits. Any funds of the Corporation may be
deposited from time to time in such banks, trust companies or
other depositaries as may be determined by the Board of Directors
or the President, or by such officers or agents as may be
authorized by the Board of Directors, the Chairman of the Board,
the Chief Executive Officer or the President to make such
determination.
1.72 Checks. All checks or demands for money and notes of
the Corporation shall be signed by such officer or officers or
such agent or agents of the Corporation, and in such manner, as
the Board of Directors, the Chairman of the Board, the Chief
Executive Officer, or the President from time to time may
determine.
1.73 Sale, Transfer, etc. of Securities. To the extent
authorized by the Board of Directors, the Chairman of the Board,
the Chief Executive Officer, or by the President, any Vice
President, the Secretary or the Treasurer, or any other officers
designated by the Board of Directors, the Chairman of the Board,
the Chief Executive Officer, or the President may sell, transfer,
endorse, and assign any shares of stock, bonds or other
securities owned by or held in the name of the Corporation, and
may make, execute and deliver in the name of the Corporation,
under its corporate seal, any instruments that may be appropriate
to effect any such sale, transfer, endorsement or assignment.
1.74 Voting as Stockholder. Unless otherwise determined by
resolution of the Board of Directors, the Chairman of the Board,
the Chief Executive Officer, the President or any Vice President
shall have full power and authority on behalf of the Corporation
to attend any meeting of stockholders of any corporation in which
the Corporation may hold stock, and to act, vote (or execute
proxies to vote) and exercise in person or by proxy all other
rights, powers and privileges incident to the ownership of such
stock. Such officers acting on behalf of the Corporation shall
have full power and authority to execute any instrument
expressing consent to or dissent from any action of any such
corporation without a meeting. The Board of Directors may by
resolution from time to time confer such power and authority upon
any other person or persons.
1.75 Fiscal Year. The fiscal year of the Corporation shall
commence on the first day of January of each year (except for the
Corporations first fiscal year which shall commence on the date
of incorporation) and shall end in each case on December 31 of
such year.
1.76 Seal. The seal of the Corporation shall be circular in
form and shall contain the name of the Corporation, the year of
its incorporation and the words Corporate Seal and Delaware. The
form of such seal shall be subject to alteration by the Board of
Directors. The seal may be used by causing it or a facsimile
thereof to be impressed, affixed or reproduced, or may be used in
any other lawful manner.
1.77 Books and Records. Except to the extent otherwise
required by law, the books and records of the Corporation shall
be kept at such place or places within or without the State of
Delaware as may be determined from time to time by the Board of
Directors.
ARTICLE 9.
AMENDMENT OF BYLAWS
1.78 Amendment. Subject to the separate class vote
requirements relating to any class or series of the Corporations
preferred stock, these Bylaws may be amended, altered or repealed
by (a) the holders of shares of Class A Common Stock representing
at least two-thirds (2/3) of the votes entitled to be cast for
the election of Directors of the Corporation, voting together as
a single class, in person or by proxy, at a special or annual
meeting of stockholders called for the purpose, or (b) resolution
adopted by a majority of the Board of Directors at any special or
regular meeting of the Board. Notwithstanding anything to the
contrary contained in this Section 9.1, neither Section 2.3(e)
nor Section 2.14 of these Bylaws shall be amended, altered or
repealed without the prior written approval of (i) the holders of
at least fifty percent (50%) of the shares of the Series A
Preferred Stock (solely with respect to any such action affecting
the rights of the holders of the Series A Preferred Stock set
forth in Section 2.3(e) or Section 2.14 so long as the holders of
the Series A Preferred Stock have the right to nominate one of
the Class I Directors of the Corporation pursuant to Section
4.3(d)(ii) of the Certificate of Incorporation) and (ii) the
holders of a Majority in Interest (as such term is defined in the
Stockholders Agreement) of the Common Stock beneficially owned by
the Cash Equity Investors (solely with respect any such action
affecting the rights of the Cash Equity Investors set forth in
section 2.3(e) or Section 2.14 so long as the Cash Equity
Investors have the right to nominate one of the Class I Directors
and one of the Class III Directors of the Corporation pursuant to
Section 3.1(a) of the Stockholders Agreement). [Section 109(a).]
ARTICLE 10.
CONSTRUCTION
1.79 Construction. In the event of any conflict between the
provisions of these Bylaws as in effect from time to time and the
provisions of the Certificate of Incorporation as in effect from
time to time, the provisions of the Certificate of Incorporation
shall be controlling.
AMENDMENT NO. 1 TO
INVESTORS STOCKHOLDERS AGREEMENT
AMENDMENT NO. 1 TO INVESTORS STOCKHOLDERS AGREEMENT, dated
as of October 27, 1999 (this Amendment) to that certain Investors
Stockholders Agreement dated as of February 4, 1998 (the
Investors Stockholders Agreement), by and among CB CAPITAL
INVESTORS, L.P., together with its Affiliated Successors (Chase),
J.P. MORGAN INVESTMENT CORPORATION and SIXTY WALL STREET SBIC
FUND, L.P. together with their Affiliated Successors (J.P.
Morgan), PRIVATE EQUITY INVESTORS III, L.P., EQUITY-LINKED
INVESTORS-II, TORONTO DOMINION CAPITAL (USA), INC., DAG-TRITON
PCS, L.P., FIRST UNION CAPITAL PARTNERS, INC. and the investors
listed on Schedule I to the Investors Stockholders Agreement
(collectively, the Cash Equity Investors), Michael E. Kalogris,
Steven R. Skinner and David D. Clark (the Management
Stockholders).
WHEREAS, in connection with the initial public offering of
the Class A Common Stock of Triton PCS Holdings, Inc. (Triton),
the Stockholders desire to amend the Investors Stockholders
Agreement as set forth herein.
NOW, THEREFORE, in consideration of the mutual promises,
covenants and agreements hereinafter set forth, and other good
and valuable consideration, the value and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
1. Defined Terms. Capitalized terms used herein, except
as otherwise defined herein, shall have the meanings given to
such terms in the Investors Stockholders Agreement.
2. Amendments. The following amendments are hereby made
to the Investors Stockholders Agreement:
(a) Section 2.1 is amended in its entirety to read as
follows:
2.1 Board of Directors. (a) Each of the Cash
Equity Investors hereby agrees, so long as such
Stockholder continues to hold any shares of Class C
Preferred Stock or Common Stock, in exercising its
rights under Section 3 of the Company Stockholder
Agreement, that it will vote or cause to be voted all
of the shares of its Class C Preferred Stock or Common
Stock owned or held of record by it (whether now owned
or hereafter acquired), in person or by proxy, to cause
the selection of directors, the election of directors
and thereafter the continuation in office of the
following persons as members of the Board of Directors
as follows:
(i) one (1) individual (the Chase Director)
selected by Chase, in its sole discretion, to be
nominated pursuant to Section 3.1(a) of the
Company Stockholder Agreement; and
(ii) one (1) individual (who shall not be an
Affiliate of Chase) (the Other Cash Equity
Director) selected by holders of at least 66_% of
the Common Stock Beneficially Owned by all of the
other Cash Equity Investors (the Other Cash Equity
Investors), to be nominated pursuant to Section
3.1(a) of the Company Stockholder Agreement.
(b) Any nomination or designation of directors
and the acceptance thereof pursuant to this Section 2.1
shall be evidenced in writing.
(c) The rights set forth in clauses (a)(i) above
with respect to Chase shall terminate if Chase owns
less than 25% of the shares of Common Stock
Beneficially Owned by Chase on February 4, 1998. Upon
any termination of the rights set forth in clause
(a)(i), such right(s) shall be exercisable in
accordance with the Company Stockholder Agreement by
the holders of a Majority in Interest of the Common
Stock held by the Cash Equity Investors.
(d) If the right of the Cash Equity Investors to
nominate directors under the Company Stockholder
Agreement is reduced to the right to nominate one
director pursuant to Section 12.3(c) therein, such
right shall be exercisable by either (i) Chase, or
(ii) by the Other Cash Equity Investors, whichever
Person (or group in the case of clause (ii)) holds a
greater percentage of shares of Common Stock
Beneficially Owned by the Cash Equity Investors at the
time of the nomination right of the director.
(b) Section 2.4 is amended in its entirety to read as
follows:
2.4 Board Committees. If the Cash Equity
Investors have the right to appoint a member of a
committee of the Board of Directors pursuant to the
Company Stockholder Agreement, and if the Cash Equity
Investors have the right to nominate two of the
Companys directors, such member shall be the director
mutually selected by the Chase director and the Other
Cash Equity Director.
(c) A new Section 2.5 is hereby added to the Investors
Stockholders Agreement and shall read in its entirety as
follows:
2.5 J.P. Morgan. All references to, and
calculations with respect to Common Stock Beneficially
Owned by, the Cash Equity Investors in Sections 2.1
through 2.5 shall refer to all Cash Equity Investors
other than J.P. Morgan.
(d) Section 3.4(a) is amended in its entirety to read as
follows:
3.4 Drag-Along Rights. If at any time a group of
Cash Equity Investors, which group shall include (i) in
the event of a Full Company Stock Sale, holders of 66
2/3% or more of the Common Stock Beneficially Owned by
the Cash Equity Investors (other than any Cash Equity
Investor that has failed to satisfy its Unfunded
Commitment which shall remain uncured at the time of
such proposed sale), or (ii) in the event of a Partial
Company Stock Sale, holders of 75% or more of the
Common Stock Beneficially Owned by the Cash Equity
Investors at the time of the proposed sale (other than
any Cash Equity Investor that has failed to satisfy its
Unfunded Commitment which shall remain uncured at the
time of such proposed sale) (each member of such group,
a Selling Investor), proposes in a single transaction
or series of transactions a Full Company Stock Sale or
a Partial Company Stock Sale involving a bona fide arms
length transaction in which the same price per share
shall be payable in respect of all shares of any class
of the Common Stock Beneficially Owned, then, upon the
written request of such Selling Investors, each other
Cash Equity Investor shall be obligated to, and shall,
if so requested by such third party (a) sell, transfer
and deliver or cause to be sold, transferred and
delivered to such third party, up to all shares of
Common Stock Beneficially Owned by them at the same
price per share (irrespective of class) and on the same
terms as are applicable to the Selling Investors, and
(b) if approval of the transaction is required of the
stockholders of the Company, vote his, her or its
shares of Common Stock in favor thereof and, in the
event such sale or transfer is in connection with a
merger or consolidation, each Cash Equity Investor
shall waive any dissenters rights, appraisal rights or
similar rights in connection with such merger or
consolidation. For the purpose of this Section 3.4, (i)
a Full Company Stock Sale shall mean the Transfer of
all of the then outstanding Company Stock (which
Transfer may exclude any Company Stock Beneficially
Owned by AT&T PCS), and (ii) a Partial Company Stock
Sale shall mean any Transfer of Company Stock other
than a Full Company Stock Sale.
(e) Section 4(b) is amended by adding the following proviso
to the end thereof:
provided that J.P. Morgan shall be required, as a
condition to its exercise of the option to pay any
Default Amount, to convert the shares of Class A Common
Stock that it Beneficially Owns into shares of Class B
Common Stock.
(f) Schedule II is amended in its entirety to read as set
forth on Attachment A hereto.
(g) Schedule III is deleted in its entirety.
3. No Implied Amendments. Except as herein amended, the
Investors Stockholders Agreement shall remain in full force and
effect and is ratified in all respects. On and after the
effectiveness of this Amendment, each reference in the Investors
Stockholders Agreement to this Agreement, hereunder, hereof,
herein or words of like import, and each reference to the
Investors Stockholders Agreement in any other agreements,
documents or instruments executed and delivered in connection
with the Investors Stockholders Agreement, shall mean and be a
reference to the Investors Stockholders Agreement, as amended by
this Amendment.
4. Counterparts. This Amendment may be executed by the
parties hereto in several counterparts, each of which shall be
deemed to be an original and all of which shall constitute
together but one and the same agreement.
[signature page to Amendment No.1 to Investors Stockholders Agreement]
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed as of the date first above written.
CB CAPITAL PARTNERS, L.P.
By: CB Capital Investors, Inc.,
its general partner
By: /S/ ________________________________
Name:
Title:
J.P. MORGAN INVESTMENT CORPORATION
By: /S/ ________________________________
Name:
Title:
SIXTY WALL STREET SBIC FUND, L.P.
By: Sixty Wall Street SBIC Corporation,
its general partner
By: /S/________________________________
Name:
Title:
[signatures continued on next page]
[signature page to Amendment No.1 to Investors Stockholders
Agreement - continued]
PRIVATE EQUITY INVESTORS III, L.P.
By: Rohit M. Desai Associates III,
L.L.C.,its general partner
By: /S/_______________________________
Name:
Title:
EQUITY-LINKED INVESTORS-II
By: Rohit M. Desai Associates-II,
its general partner
By: /S/______________________________
Name:
Title:
TORONTO DOMINION CAPITAL (USA), INC.
By: /S/______________________________
Name:
Title:
DAG-TRITON PCS, L.P.
By: Duff Ackerman Goodrich LLC,
its general partner
By: /S/______________________________
Name:
Title:
[signatures continued on next page]
[signature page to Amendment No.1 to Investors Stockholders
Agreement - continued]
FIRST UNION CAPITAL PARTNERS, INC.
By: /S/_______________________________
Name:
Title:
______________________________________
Michael E. Kalogris
______________________________________
Steven R. Skinner
______________________________________
David D. Clark
Attachment A
SCHEDULE II
Shares of
Class A
Stockholder Common Stock
- ---------------------------------------- ------------------
CB Capital Investors, L.P. 12,270,744
JP Morgan Investment Corporation 2,456,109
Sixty Wall Street SBIC Fund, L.P. 122,663
Private Equity Investors III, L.P. 5,951,372
Equity-Linked Investors-II 5,951,372
Toronto Dominion Capital (U.S.A.) Inc. 2,975,698
First Union Capital Partners, Inc. 4,079,877
DAG-Triton PCS, L.P. 1,858,127
Michael E. Kalogris 2,628,875
Steven R. Skinner 1,942,906
David D. Clark 349,541
J.P. Morgan Investment Corporation also owns 7,820,268 shares of
Tritons Class B Non-Voting Common Stock.
Sixty Wall Street SBIC Fund, L.P. also owns 390,559 shares of
Tritons Class B Non-Voting Common Stock.
