Exhibit 10.2
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INVESTORS STOCKHOLDERS' AGREEMENT
by and among
TRITEL, INC.,
WASHINGTON NATIONAL INSURANCE COMPANY,
UNITED PRESIDENTIAL LIFE INSURANCE COMPANY,
DRESDNER KLEINWORT ▇▇▇▇▇▇ PRIVATE EQUITY PARTNERS LP,
TORONTO DOMINION INVESTMENTS, INC.,
ENTERGY WIRELESS CORPORATION,
GENERAL ELECTRIC CAPITAL CORPORATION,
TRIUNE PCS, LLC,
FCA VENTURE PARTNERS II, L.P.,
▇▇▇▇▇▇▇ ASSOCIATES LLC,
TRILLIUM PCS, LLC
AIRWAVE COMMUNICATIONS, LLC
DIGITAL PCS, LLC
and
THE STOCKHOLDERS NAMED HEREIN
dated as of January 7, 1999
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TABLE OF CONTENTS
Page
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1. Certain Definitions..............................................2
2. Management of Company; Certain Voting Requirements...............2
2.1. Board of Directors......................................2
2.2. Removal; Filling of Vacancies...........................3
2.3. Election of Initial Board of Directors..................3
2.4. Board Committees........................................3
2.5. Reduction of Unfunded Commitment........................3
3. Transfers of Shares..............................................4
3.1. General.................................................4
3.2. Right of First Offer....................................4
3.3. Tag Along Rights........................................5
3.4. Drag-Along Rights.......................................7
4. Unfunded Commitment; Additional Capital Contributions............8
5. Purchase Rights.................................................10
5.1. Right to Exercise Purchase Rights......................10
6. After-Acquired Shares; Recapitalization.........................10
6.1. After-Acquired Shares; Recapitalization................10
7. Equitable Relief................................................10
7.1. Equitable Relief.......................................10
8. Miscellaneous.........................................................11
8.1. Notices................................................11
8.2. Entire Agreement; Amendment; Consents..................11
8.3. Term...................................................11
8.4. Obligations Several....................................11
8.5. Governing Law..........................................11
8.6. Jurisdiction...........................................11
8.7. Benefit and Binding Effect; Severability...............12
8.8. Headings...............................................12
8.9. Counterparts...........................................12
i
Schedules
Schedule I Cash Equity Investors
Schedule II Stock Ownership
Schedule III Initial Director Nominees
ii
INVESTORS STOCKHOLDERS' AGREEMENT
STOCKHOLDERS' AGREEMENT, dated as of January 7, 1999 (this
"Agreement"), by and among, MERCURY PCS CORPORATION, a Delaware corporation (the
"Company"), WASHINGTON NATIONAL INSURANCE COMPANY, an Illinois corporation
("WNIC"), UNITED PRESIDENTIAL LIFE INSURANCE COMPANY, an Indiana corporation
("Presidential"; WNIC and Presidential are hereinafter referred to collectively
as "Conseco"), DRESDNER KLEINWORT ▇▇▇▇▇▇ PRIVATE EQUITY PARTNERS LP, a Delaware
limited partnership ("Dresdner"), TORONTO DOMINION INVESTMENTS, INC., a Delaware
corporation ("TD"), ENTERGY WIRELESS CORPORATION, a Delaware corporation
("Entergy"), GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation ("GE
Capital"), TRIUNE PCS, LLC, a Delaware limited liability company ("Triune"), FCA
VENTURE PARTNERS II, L.P., a Delaware limited partnership ("FCA"), ▇▇▇▇▇▇▇
ASSOCIATES LLC, a Tennessee limited liability company ("▇▇▇▇▇▇▇"), TRILLIUM PCS,
LLC., a Mississippi limited liability company ("Trillium"), AIRWAVE
COMMUNICATIONS, LLC, a Mississippi limited liability company ("Airwave"),
DIGITAL PCS, LLC, a Mississippi limited liability company ("Digital"), THE
MANUFACTURERS LIFE INSURANCE COMPANY (U.S.A.), a Michigan corporation ("MF"),
(individually, each a "Cash Equity Investor" and, collectively with Conseco,
Dresdner, TD, Entergy, GE Capital, Triune, FCA and ▇▇▇▇▇▇▇, Trillium, Airwave,
Digital, MF and any of their respective Affiliated Successors who become a
Stockholder and a party to this Agreement in accordance with the terms hereof,
the "Cash Equity Investors"). Each of the foregoing Cash Equity Investors are
sometimes referred to herein, individually, as a "Stockholder" and,
collectively, as the "Stockholders."
RECITALS
WHEREAS, the Cash Equity Investors, the Company and the other
Stockholders named therein are party to that certain Stockholders Agreement,
dated the date hereof (as amended from time to time, in accordance with its
terms, the "Company Stockholder Agreement") pursuant to which the Cash Equity
Investors and the other parties thereto have agreed to provide for the
management of the Company and to impose certain restrictions with respect to the
sale, transfer or other disposition of Company Stock on the terms set forth
therein; and
WHEREAS, each Stockholder is the registered owner of the respective
shares of Common Stock of the Company (the "Common Stock") and Series C
Preferred Stock set forth opposite its name on Schedule II; and
WHEREAS, the parties hereto desire to enter into this Agreement in
order to impose certain further restrictions with respect to the sale, transfer
or other disposition of Company Stock and to provide for certain rights with
respect to the management of the Company on the terms and conditions hereinafter
set forth;
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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.
Capitalized terms not otherwise defined herein shall have the meanings
set forth in the Company Stockholder Agreement.
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. Management of Company; Certain Voting Requirements.
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 Series 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 Series 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 to be designated by Conseco (or its
Affiliated Successors) (the "Conseco Designee") who shall initially be
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇;
(ii) one (1) individual to be designated by Dresdner (or its
Affiliated Successors) (the "Dresdner Designee") who shall initially be
▇▇▇▇ ▇. ▇▇▇▇▇▇▇;
(iii) one (1) individual to be designated by Entergy (or its
Affiliated Successors) (the "Entergy Designee") who shall initially be
▇▇▇▇ ▇. ▇▇▇▇▇; and
(iv) with respect to any individual selected pursuant to Section
3.1(d) of the Company Stockholder Agreement, such individual shall be
deemed acceptable to holders of a "Majority in Interest of the Class A
Voting Stock Beneficially Owned by the Cash Equity Investors" in
accordance with such Section 3.1(d) only in the event such individual
has been approved by "Two-Thirds in Interest of the Cash Equity
Investors" (as defined below).
(b) Any nomination or designation of directors and the acceptance
thereof pursuant to this Section 2.1 shall be evidenced in writing.
(c) 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
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12.3(c) therein, such right shall be exercisable by Two-Thirds In Interest of
the Cash Equity Investors.
(d) For purposes of this Agreement, "Two-Thirds in Interest of the Cash
Equity Investors" shall mean the Cash Equity Investors owning two-thirds of the
outstanding shares of Common Stock and/or Series C Preferred Stock (on an
as-converted basis) held by all Cash Equity Investors.
2.2. Removal; Filling of Vacancies. Except as set forth in Section 2.1,
each Cash Equity Investor agrees it will not vote any shares of Series C
Preferred Stock and/or Common Stock owned or controlled by such Cash Equity
Investor for the removal without cause of any director designated by any other
Cash Equity Investor in accordance with Section 2.1, except at the request of
such other Cash Equity Investor. Any successor director to the director
designated by Conseco, Dresdner or Entergy (a "Designating CEI") shall be
designated by the applicable Designating CEI, provided, however, in the event
(i) that the aggregate number of shares of Series C Preferred Stock and/or
Common Stock (on an as-converted basis) owned or controlled by such Designating
CEI or its Affiliated Successors is less than fifty percent of the Series C
Preferred Stock and/or Common Stock (on an as-converted basis) owned or
controlled by such Designating CEI on the date hereof (after adjustment for
stock dividends, splits, combinations and the like) or (ii) on any date of
determination, such Designating CEI has sold, transferred or otherwise disposed
of one-third or more of the shares of Series C Preferred Stock and/or Common
Stock owned or controlled by such Designating CEI on the date hereof and as a
result of such sale, transfer or other dispositions the CEI Ownership Percentage
(as defined below) of such Designating CEI is not one of the three highest CEI
Ownership Percentages, the successor director shall be selected by Two-Thirds in
Interest of the Cash Equity Investors. For purposes of this Agreement, "CEI
Ownership Percentage" shall mean the percentage obtained by dividing the number
of shares of Common Stock and/or Series C Preferred Stock (on an as-converted
basis) held by the applicable Cash Equity Investor and its Affiliated Successors
by the total number of shares of Common Stock and/or Series C Preferred Stock
held by all Cash Equity Investors. Notwithstanding the foregoing, if a
Designating CEI defaults on its Unfunded Commitment, the Cash Equity Investor
who has the largest CEI Ownership Percentage of the Cash Equity Investors other
than the Designating CEI's after giving effect to such defaults shall become a
Designating CEI for purposes of Section 2.1(a) and this Section 2.2.
2.3. Election of Initial Board of Directors. The Cash Equity Investors
hereby consent to the nomination of the persons designated on Schedule III
hereto to be directors of the Company pursuant to the Company Stockholder
Agreement.
2.4. Board Committees. The initial member of the executive committee of
the Board of Directors appointed in accordance with Section 3.1(a) of the
Company Stockholder Agreement shall be an individual nominated by Conseco
provided, however, in the event Two-Thirds in Interest of the Cash Equity
Investors elect to replace such member, such member shall be an individual
nominated by Two-Thirds in Interest of the Cash Equity Investors. If the Cash
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Equity Investors have the right to appoint a member of any other committee of
the Board of Directors, such member shall be selected by Two-Thirds in Interest
of the Cash Equity Investors.
2.5. Reduction of Unfunded Commitment. In connection with a proposed
initial public offering of the Company's Common Stock, the Cash Equity Investors
may request that the Company reduce the Unfunded Commitment of the Cash Equity
Investors upon the divestiture to the Company of a number of shares of Company
Stock having a value (based upon the initial public offering price of the Common
Stock) equal to the amount by which the Unfunded Commitment is to be reduced;
provided, that such proposal has been approved by Two-Thirds in Interest of the
Cash Equity Investors and AT&T Wireless PCS Inc.
3. Transfers of Shares.
3.1. General. Each Stockholder agrees that it shall not, directly or
indirectly, Transfer Company Stock held by such Stockholder as of the date
hereof or which may hereafter be acquired by such Stockholder except in
accordance with the Company Stockholder Agreement and as set forth in this
Article 3. Each Stockholder further agrees that it shall not, directly or
indirectly, Transfer Company Stock held by such Stockholder as of the date
hereof or which may hereafter be acquired by such Stockholder to a Disallowed
Transferee (as such term is defined in that certain Network Membership License
Agreement, dated the date hereof, between AT&T Corp. and the Company) except in
connection with a sale of capital stock of the Company held by the parties
hereto holding 66% of the shares of the Common Stock of the Company on a
fully-diluted basis (assuming conversion of all Company Stock which is
convertible into Common Stock, such fully diluted Common Stock referred to
herein as "Common Stock Owned") owned by such parties at the time of the
proposed sale. Each Stockholder agrees to cause each of its Affiliated
Successors to become a party to and become bound by this Agreement (and shall
thereby become a Stockholder for all purposes of this Agreement) prior to any
transfer of Company Stock.
3.2. Right of First Offer. (a) If a Cash Equity Investor (each a "CEI
Seller") desires to Transfer any or all of its shares of Company Stock
(collectively, the "Offered Shares"), other than a Transfer to an Affiliate or
an Affiliated Successor, such CEI Seller shall give written notice (the "CEI
Offer Notice") to each Cash Equity Investor. Each CEI 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 CEI Offer Notice shall constitute an
irrevocable offer (a "First Offer") to sell all (but not less than all) of the
Offered Shares to the Cash Equity Investors (in the aggregate) at a cash price
equal to the price contained in such CEI Offer Notice and upon the same terms as
the terms contained in such Offer Notice. The Cash Equity Investors shall have
the irrevocable right and option exercisable as provided below, but not the
obligations, to accept the First Offer as to the Offered Shares.
(b) If the Cash Equity Investors have a right of First Offer pursuant
to clause (a) Cash Equity Investors shall exercise their right of First Offer by
giving a Purchase Notice to the CEI
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Seller, the other Cash Equity Investors and the Company not later than
twenty-five (25) days (the "Cash Equity First Offer Period") after the date of
the Offer Notice. If the Cash Equity Investors notify the Seller of their desire
to purchase less than all of the Offered Shares, the Company shall deliver
notice to all Cash Equity Investors who have notified the CEI Seller and the
Company of their desire to purchase Offered Shares (the "Purchasing Cash Equity
Investors") within twenty-nine (29) days after the Offer Notice, and the
Purchasing Cash Equity Investors shall have the right to purchase any excess
Offered Shares which other Cash Equity Investors do not desire to purchase by
written notice to the Seller and the Company so that each Purchasing Cash Equity
Investor shall have the right to acquire the proportion of such excess Offered
Shares as the number of shares of Company Stock owned by such Purchasing Cash
Equity Investor bears to the total number of shares of Company Stock owned by
all Purchasing Cash Equity Investors; provided that the CEI Seller will not be
obligated to sell any Offered Shares to the Purchasing Cash Equity Investors
unless the Purchasing Cash Equity Investors in the aggregate, agree to purchase
all (but not less than all) of the Offered Shares.
(c) The purchase of the Offered Shares by the Purchasing Cash Equity
Investors shall be closed at the principal executive offices of the Company on a
date specified by the Purchasing Cash Equity Investors at least five (5)
business days' notice, that is within thirty (30) days after the expiration of
the Cash Equity 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.
The purchase price of any Offered Shares Transferred pursuant to this Section
3.2 shall be payable in cash by certified bank check or by wire transfer of
immediately available funds.
3.3. Tag Along Rights.
(a) No Stockholder shall, directly or indirectly, Transfer, in any
single transaction or series or related transactions to one or more Persons who
are not Affiliates or Affiliated Successors of such Stockholder (a "CEI
Inclusion Event Purchaser") shares of any class of 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, (x) ten percent (10%) or more of the outstanding shares of
Inclusion Stock Beneficially Owned by such Selling Stockholder to a Person who
is a party, or an Affiliated Successor of a party, to the Company Stockholder
Agreement or (y) ten percent (10%) or more of the outstanding shares of
Inclusion Stock outstanding on the date of such proposed Transfer on a fully
diluted basis to a Person who is not a party, or an Affiliated Successor to a
party, to the Company Stockholder Agreement, but, in either case, not more than
twenty-five percent (25%) of the outstanding shares of Inclusion Stock
outstanding on the date of such proposed Transfer on a fully diluted basis (a
"Tag Along Event"), unless the terms and conditions of such sale to such CEI
Inclusion Event Purchaser shall include an offer to the Cash Equity Investors
other than the Selling Stockholder (each, a "Tag Along Offeree") to Transfer to
such CEI Inclusion Event Purchasers up to that number of shares of any class of
Inclusion Stock then Beneficially Owned by each Tag Along Offeree that bears
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the same proportion to the total number of shares of Inclusion Stock at that
time Beneficially Owned (without duplication) by each such Tag Along 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 a Tag Along Event, and which offer such
Selling Stockholders wish to accept, the Selling Stockholders shall then cause
the Inclusion Event Purchaser's offer to be reduced to writing (which writing
shall include an offer to purchase shares of Inclusion Stock from each Tag Along
Offeree according to the terms and conditions set forth in this Section 3.3) and
the Selling Stockholders shall send written notice of the CEI Inclusion Event
Purchaser's offer (the "Tag Along Notice") to each Tag Along Offeree, which Tag
Along 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 3.3 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 3.3, which date shall not be less than thirty (30) days after the
giving of the Tag Along Notice. The Tag Along Notice shall be accompanied by a
true and correct copy of the CEI Inclusion Event Purchaser's offer. At any time
within thirty (30) days after receipt of the Tag Along Notice, each Tag Along
Offeree may accept the offer included in the Tag Along Notice for up to such
number of shares of Inclusion Stock as is determined in accordance with this
Section 3.3, 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 Tag Along Offeree,
duly endorsed in blank, together with a limited power-of-attorney authorizing
the escrow agent, on behalf of the Tag Along Offeree, to sell the shares to be
sold pursuant to the terms of such CEI Inclusion Event Purchaser's offer.
In the event that the CEI 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 Tag Along Offerees, then each Selling Stockholder and Tag
Along Offeree shall have the right to sell to the CEI 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 Tag Along Offeree and the denominator of which is the aggregate
number of shares of Inclusion Stock Beneficially Owned (without duplication) by
all Selling Stockholders and Tag Along Offerees. If any Tag Along Offeree
desires to sell less than its proportionate amount of shares of Inclusion Stock
that
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it is entitled to sell pursuant to this Section 3.3, then the Selling
Stockholders and the remaining Tag Along Offerees shall have the right to sell
to the CEI 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 Tag Along 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 Tag Along Offerees. Such
process shall be repeated in series until all of the remaining Tag Along
Offerees agree to sell their remaining proportionate number of shares of
Inclusion Stock.
(b) The purchase from each Tag Along Offeree pursuant to this Section
3.3 shall be on the same terms and conditions, including the price per share
received by the Selling Stockholders and stated in the Tag Along Notice provided
to each Tag Along Offeree. In the event that the Inclusion Stock is Common
Stock, all Tag Along Offerees shall be required, as a condition of participating
in such transaction, to Transfer Common Stock to the CEI Inclusion Event
Purchaser. In the event that the Tag Along Offerees elect to sell their pro rata
share of Series C Preferred Stock or Common Stock pursuant to this Section 3.3
the CEI 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 Tag Along Offerees, it being understood that the
directors selected pursuant to Section 2.1(c) shall be deemed independent for
such purposes.
(c) Simultaneously with the consummation of the sale of the shares of
Inclusion Stock of the Selling Stockholders and each Tag Along Offeree to the
CEI Inclusion Event Purchaser pursuant to the Inclusion Event Purchaser's offer,
the Selling Stockholders shall notify each Tag Along Offeree and shall cause the
Inclusion Event Purchaser to remit to each Tag Along Offeree the total sales
price of the shares of Inclusion Stock by each Tag Along 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 Tag Along Offeree.
(d) If within thirty (30) days after receipt of the Tag Along Notice,
Tag Along Offeree has not accepted the offer contained in the Tag Along Notice,
such Tag Along Offeree shall be deemed to have waived any and all rights with
respect to the sale described in the Tag Along Notice (but not with respect to
any subsequent sale, to the extent this Section 3.3 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 Tag Along Notice, on terms not more favorable to the Selling Stockholders
than were set forth in the Tag Along 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.
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3.4. Drag-Along Rights. (a) If at any time, (i) any two Cash Equity
Investors, each holding Series C Preferred Stock and Common Stock with a
purchase price of no less than $20 million (a "Twenty Million Investor") at the
time of the proposed sale or (ii) holders of 50% or more of the Common Stock
Owned by the Cash Equity Investors at the time of the proposed sale, provided
that so long as any Twenty Million Investor exists, at least one Twenty Million
Investor is included in such group of Cash Equity Investors, proposes in a
single transaction or series of transactions to Transfer Company Stock, (each
member of the group, a "Selling Investor"), in a bona fide arm's-length
transaction to a third party in which the same price per share shall be payable
in respect of all shares of any class of the Common Stock 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 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 Series C Preferred
Stock and 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.
(b) The obligation of each Cash Equity Investor to sell shares of
capital stock pursuant to clause (a) shall be conditioned upon the following:
(i) the maximum liability with respect to indemnification granted by each
selling Cash Equity Investor to the purchaser in such sale shall not exceed the
proceeds of the sale to such Cash Equity Investor, (ii) any such liability with
respect to indemnification shall be a several (and not joint and several)
obligation of each selling Cash Equity Investor and (iii) the value of the
consideration received by each Cash Equity Investor pursuant to such sale shall
be equal to or greater than the purchase price of such Cash Equity Investor's
Company Stock included in the transaction plus a return of twenty percent,
compounded annually.
4. Unfunded Commitment; Additional Capital Contributions. (a) In the
event any Cash Equity Investor (a "Defaulting Cash Equity Investor") fails to
satisfy any portion of its Unfunded Commitment pursuant to Section 2.2 of the
Securities Purchase Agreement (a "Payment Default"), the Company shall give
prompt written notice, but no later than one (1) business day following such
default (a "Default Notice"), to each Cash Equity Investor other than the
Defaulting Cash Equity Investor (each a "Non-Defaulting Cash Equity Investor")
of the amount of such Payment Default (the "Default Amount"). In the event the
Defaulting Cash Equity Investor has failed to cure such Payment Default, within
five (5) days of the Payment Default, each Non-Defaulting Cash Equity Investor
may, acting on its own or in conjunction with one or more of the other
Non-Defaulting Cash Equity Investors (each a "Participating Cash Equity
Investor"), agree to fund all or any portion of such Payment Default by
providing written notice to the Company (a "Payment Notice") no later than 12:00
Noon (New York time) twenty (20) days following the date on which the Default
Notice is delivered (the "Notice Period") and the Company shall thereafter
provide each Participating Cash Equity Investor with copies of such Payment
Notice or Payment Notices; provided, however, that if the aggregate amount
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agreed to be funded by the Participating Cash Equity Investors shall exceed the
Payment Default, then the amount to be funded by each such Participating Cash
Equity Investor shall be divided amongst the Participating Cash Equity Investors
pro rata in accordance with the shares of Common Stock Owned by the
Participating Cash Equity Investors; provided, further, however, that if the
aggregate amount agreed to be funded by the Participating Cash Equity Investors
shall be less than the Payment Default (a "Payment Default Shortfall"), the
Company shall give prompt written notice, but no later than one (1) business day
following the end of the Payment Notice Period, of such Payment Default
Shortfall (a "Payment Default Shortfall Notice") to all Non-Defaulting Cash
Equity Investors and all such Non-Defaulting Cash Equity Investors may agree to
fund the Payment Default Shortfall by providing written notice to the Company
within five (5) days of delivery of the Payment Notice and payment shall be made
in accordance with the preceding two provisos.
(b) In the event any Cash Equity Investor (a "Defaulting Ericsson
Investor") fails to pay any amount due and payable pursuant to the Ericsson
Documents (as defined in the Securities Purchase Agreement) (a "Ericsson Payment
Default"), the Company shall give prompt written notice, but no later than one
(1) business day following such default (a "Ericsson Default Notice"), to each
Cash Equity Investor other than the Defaulting Ericsson Investor (each a
"Non-Defaulting Party") of the amount of such Ericsson Payment Default (the
"Ericsson Default Amount"). In the event the Defaulting Ericsson Investor has
failed to cure such Ericsson Payment Default, within two (2) days of the
Ericsson Payment Default, each Non-Defaulting Party may, acting on its own or in
conjunction with one or more of the other Non-Defaulting Parties (each a
"Participating Party"), agree to fund all or any portion of such Ericsson
Payment Default by providing written notice to the Company (a "Ericsson Payment
Notice") and funding such Ericsson Default Amount to Ericsson ("Ericsson") no
later than 12:00 Noon (New York time) four (4) days following the date on which
the Ericsson Default Notice is delivered (the "Ericsson Payment Notice Period")
and the Company shall thereafter provide each Participating Party with copies of
such Ericsson Payment Notice or Ericsson Payment Notices; provided, however,
that if the aggregate amount agreed to be funded by the Participating Parties
shall exceed the Ericsson Payment Default, then the amount to be funded by each
such Participating Party shall be divided amongst the Participating Parties pro
rata in accordance with the shares of Common Stock Owned by the Participating
Parties; provided, further, however, that if the aggregate amount agreed to be
funded by the Participating Parties shall be less than the Ericsson Payment
Default (a "Ericsson Default Shortfall"), the Company shall give prompt written
notice, but no later than one (1) business day following the end of the Ericsson
Payment Notice Period, of such Ericsson Payment Default Shortfall (a "Ericsson
Payment Default Shortfall Notice") to AT&T Wireless PCS, Inc. ("AT&T") and AT&T
may fund the Ericsson Payment Default Shortfall by providing written notice to
the Company and funding such Ericsson Default Shortfall to Ericsson within two
(2) days of delivery of the Ericsson Payment Default Shortfall Notice.
(c) Upon payment of the Default Amount (or any portion thereof), each
Participating Cash Equity Investor (i) shall be deemed to be the record and
beneficial owner of that number of shares of Common Stock Owned by the
Defaulting Cash Equity Investor equal to the total
9
number of shares of Common Stock acquired in respect of such Defaulting Cash
Equity Investor's Commitment pursuant to the Securities Purchase Agreement
multiplied by a fraction the numerator of which is the amount equal to the
amount paid by such Participating Cash Equity Investor pursuant to this Section
4 and the denominator of which is the Default Amount, and (ii) shall become
obligated to the Company pursuant to Section 2.2 of the Securities Purchase
Agreement with respect to the remaining Unfunded Commitment, if any, of the
Defaulting Cash Equity Investor in an amount equal to the product of the amount
of such remaining Unfunded Commitment multiplied by the percentage of the
Unfunded Commitment the Defaulting Cash Equity Investor failed to satisfy which
such Participating Cash Equity Investor funded pursuant to this Section 4.
(d) Upon payment of the Ericsson Default Amount (or any portion
thereof), each Participating Party and/or AT&T (if applicable) shall be deemed
to be the record and beneficial owner of that number of shares of Common Stock
Owned by the Defaulting Ericsson Investor equal to the aggregate number of
shares of Common Stock Owned by the Defaulting Ericsson Investor and subject to
a pledge to Ericsson pursuant to the Ericsson Documents multiplied by a
fraction, the numerator of which is the amount paid by such Participating Party,
or AT&T, as applicable, pursuant to this Section 4, and the denominator of which
is the Ericsson Default Amount.
5. Purchase Rights.
5.1. Right to Exercise Purchase Rights. If Equity Securities are issued
by the Company pursuant to Section 7.2 of the Company Stockholder Agreement,
then, notwithstanding the notice provisions in Section 7.2 of the Company
Stockholder Agreement, each Cash Equity Investor may exercise such Purchase
Right, in whole or in part, on the terms and conditions and for the purchase
price set forth in the Issuance Notice, by giving to the Company notice to such
effect, within twenty-five (25) days after the giving of the Issuance Notice
pursuant to the Company Stockholder Agreement. If Cash Equity Investors give
notice to exercise Purchase Rights (each, a "Purchase Right Cash Equity
Investor") with respect to less than the entire percentage of Equity Securities
proposed to be offered, issued, sold or otherwise disposed of equal to the
number of shares of Common Stock then Beneficially Owned by all Cash Equity
Investors divided by the aggregate number of shares of Common Stock outstanding
immediately prior to such offer, issuance, sale or disposition of Equity
Securities (the "Purchase Right Shares"), then the Purchase Right Cash Equity
Investors shall have the right by written notice to the Company within
twenty-nine (29) days after the giving of the Issuance Notice to acquire the
excess Purchase Right Shares in such proportion as such excess Purchase Right
Shares bears to the number of shares of Common Stock Owned by such Purchase
Right Cash Equity Investor immediately prior to such offer of Equity Securities
by the Company.
6. After-Acquired Shares; Recapitalization.
6.1. After-Acquired Shares; Recapitalization. (a) All of the provisions
of this Agreement shall apply to all of the shares of Equity Securities now
owned or hereafter issued or
10
transferred to a Stockholder or to his, her or its Affiliates 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 Affiliate in any other
manner.
(b) 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.
7. Equitable Relief.
7.1. 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.
8. Miscellaneous.
8.1. Notices. All notices or other communications hereunder shall be in
writing and shall be given in the manner prescribed in the Company Stockholder
Agreement.
8.2. Entire Agreement; Amendment; Consents. (a) This Agreement and the
Company Stockholder Agreement constitute 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. The Stockholders agree that
the terms of this Agreement shall supersede any inconsistent provision contained
in the Company Stockholder Agreement.
(b) No change or modification of this Agreement shall be valid, binding
or enforceable unless the same shall be in writing and signed by Stockholders
holding 66% of all shares of Common Stock Owned by all Cash Equity Investors;
provided, however, that no change or modification to this Agreement which
adversely affects the rights of any Stockholder (as compared with its effect on
any similarly-situated Stockholder) or the Company shall be valid, binding and
enforceable unless the same shall be in writing and signed by such Stockholder
or the Company. 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.
(c) 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.
11
(d) Whenever the Company Stockholder Agreement is amended in accordance
with its terms, the Stockholders hereto agree to enter into such amendments to
this Agreement necessary to effectuate the intent of this Agreement. The
Stockholder shall not enter into any such amendment the effect of which
adversely effects the rights of any Stockholder hereto without the consent of
such Stockholder.
8.3. Term. This Agreement shall terminate upon the termination of the
Company Stockholder Agreement.
8.4. Obligations Several. The obligations of each Stockholder under
this Agreement shall be several with respect to each such Stockholder.
8.5. Governing Law. This Agreement shall be governed and construed in
accordance with the law of the State of Delaware.
8.6. Jurisdiction. (a) 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 ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇. 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 8.1.
8.7. Benefit and Binding Effect; Severability. This Agreement shall be
binding upon and shall inure to the benefit of the Company (solely with respect
to Sections 3.2, 3.3 and 4), its successors and assigns, and each of the
Stockholders and their respective executors, administrators and personal
representatives and heirs and permitted assigns. Any person to which shares of
Series C Preferred Stock are Transferred in connection with the exercise of
remedies by the lender under the Cash Equity Loan Documents, and any direct or
indirect transferee thereof, shall become a party to this Agreement, be bound
hereby and be subject to the rights and benefits of a Stockholder provided
herein. 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
8.8. 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.
8.9. 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.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
13
IN WITNESS WHEREOF, each of the parties has executed or consent this
Agreement to be executed by its duly authorized officers as of the date first
written above.
TRITEL, INC.
By:
Name:
Title:
S-1
CASH EQUITY INVESTORS:
TORONTO DOMINION INVESTMENTS,
INC.
By:
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
ENTERGY WIRELESS CORPORATION
By:
Name: ▇▇▇▇ ▇▇▇▇▇
Title: President and Chief Executive
Officer
GENERAL ELECTRIC CAPITAL CORPORATION
By:
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Managing Director
S-2
WASHINGTON NATIONAL INSURANCE
COMPANY
By:
Name:
Title:
UNITED PRESIDENTIAL LIFE INSURANCE COMPANY
By:
Name:
Title:
DRESDNER KLEINWORT ▇▇▇▇▇▇ PRIVATE EQUITY
PARTNERS LP
BY: DRESDNER KLEINWORT ▇▇▇▇▇▇ PRIVATE
EQUITY MANAGERS LLC, AS ITS
GENERAL PARTNER
By:
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Authorized Signatory
TRIUNE PCS, LLC, A DELAWARE LIMITED
LIABILITY COMPANY
BY: OAK TREE, LLC, A DELAWARE LIMITED
LIABILITY COMPANY
TITLE: MANAGER
BY: TRIUNE INC., A DELAWARE CORPORATION
TITLE: MANAGER
By:
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
S-3
FCA VENTURE PARTNERS II, L.P.
BY: CLAYTON-DC VENTURE CAPITAL GROUP, LLC,
ITS GENERAL PARTNER
By:
Name: D. ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Manager
▇▇▇▇▇▇▇ ASSOCIATES LLC
By:
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: President
THE MANUFACTURERS' LIFE INSURANCE
COMPANY (U.S.A.)
By:
Name:
Title:
S-4
TRILLIUM PCS, LLC
By:
Name:
Title:
AIRWAVE COMMUNICATIONS, LLC (F/K/A
MERCURY PCS, LLC)
By: MSM, Inc., its Manager
By:
Name: ▇.▇. ▇▇▇▇▇▇, ▇▇.
Title: Vice President
DIGITAL PCS, LLC (F/K/A MERCURY
PCS II, LLC)
By: MSM, Inc., its Manager
By:
Name: ▇.▇. ▇▇▇▇▇▇, ▇▇.
Title: Vice President
S-5
With respect to Section 4 only:
AT&T WIRELESS PCS, INC.
By:
Name:
Title:
S-6
SCHEDULE I
CASH EQUITY INVESTORS
WASHINGTON NATIONAL INSURANCE COMPANY
UNITED PRESIDENTIAL LIFE INSURANCE COMPANY
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
TRILLIUM PCS, LLC
AIRWAVE COMMUNICATIONS, LLC
DIGITAL PCS, LLC
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
DRESDNER KLEINWORT ▇▇▇▇▇▇ PRIVATE EQUITY
MANAGERS LLC
▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Facsimile: 212-429-3139
ENTERGY WIRELESS CORPORATION
Three Financial Centre
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
TRIUNE PCS, LLC
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
S-7
TORONTO DOMINION INVESTMENTS, INC.
▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
With copy to:
TORONTO DOMINION INVESTMENTS, INC.
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
GE CAPITAL SERVICES STRUCTURED FINANCE GROUP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ De Cruccio
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
FCA VENTURE PARTNERS II, ▇▇
▇▇▇▇▇▇▇ ASSOCIATES, LLC
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
THE MANUFACTURERS' LIFE INSURANCE COMPANY (U.S.A.)
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
S-8
SCHEDULE II
STOCK OWNERSHIP
[SEE ATTACHED CAP TABLE]
S-9
SCHEDULE III
INITIAL DIRECTOR NOMINEES
[SEE ATTACHED]
S-10
