STOCKHOLDER AND OPTION AGREEMENT
--------------------------------
THIS STOCKHOLDER AND OPTION AGREEMENT (this "Agreement") dated as of
April 12, 1999, is entered into between Sprint Corporation, a Kansas corporation
("Parent"), and Matthew Oristano, an individual resident of the State of
Connecticut, on his own behalf and as attorney-in-fact for the stockholders
identified on Schedule I hereto (collectively, "Stockholder"), with respect to
the shares of common stock, par value $.01 per share (the "Company Common
Stock"), of People's Choice TV Corp., a Delaware corporation (the "Company"),
owned by Stockholder.
W I T N E S S E T H:
-------------------
WHEREAS, as of the date hereof, the Stockholder beneficially owns and
has the power to vote 1,694,823 shares of Company Common Stock as identified on
Schedule I hereto (including any and all rights attached thereto to acquire
shares of stock of the Company if the Company adopts a stockholders' rights
plan, and any other rights associated therewith, the "Option Shares"); and
WHEREAS, Parent desires to enter into this Agreement in connection with
its efforts to consummate an acquisition of the Company and Parent requires that
Stockholder enter into this Agreement as a condition to its willingness to enter
into an acquisition agreement with the Company.
NOW, THEREFORE, in contemplation of the foregoing and in consideration
of the mutual agreements, covenants, representations and warranties contained
herein and intending to be legally bound hereby, the parties hereto agree as
follows:
1. Certain Covenants.
1.1. Lock-Up. Stockholder hereby covenants and agrees during
the term of this Agreement that (a) except as consented to in writing by Parent
in its sole discretion, Stockholder will not sell, transfer, assign, pledge,
hypothecate, tender or otherwise dispose of or limit its right to vote in any
manner any of the Option Shares, or agree to do any of the foregoing, and (b)
Stockholder will not take any action which would have the effect of preventing
or disabling Stockholder from performing its obligations under this Agreement.
1.2. Irrevocable Proxy. Stockholder has revoked or terminated
any proxies, voting agreements or similar arrangements previously given or
entered into with respect to the Option Shares and hereby irrevocably appoints
Parent, during the term of this Agreement, as proxy for Stockholder to vote (or
refrain from voting) in any manner as Parent, in its sole discretion, may see
fit, all of the Option Shares for Stockholder and in Stockholder's name, place
and stead, at any annual, special or other meeting or action of the stockholders
of the Company, as applicable, or at any adjournment thereof or pursuant to any
consent of the stockholders of the Company, in lieu of a meeting or otherwise,
with respect to any issue
brought before the stockholders of the Company, other than with respect to the
election of directors of the Company, for which the stockholders of the Company
are entitled to vote.
1.3. Public Announcement. Stockholder shall consult with
Parent before issuing any press releases or otherwise making any public
statements with respect to the transactions contemplated herein and shall not
issue any such press release or make any such public statement without the
approval of Parent, except as may be required by law.
1.4. Stop Transfer Instruction. Promptly following the date
hereof, Stockholder and Parent shall deliver joint written instructions to the
Company and to the Company's transfer agent stating that the Option Shares may
not be sold, transferred, pledged, assigned, hypothecated, tendered or otherwise
disposed of in any manner without the prior written consent of Parent or except
in accordance with the terms and conditions of this Agreement.
1.5. HSR Filing. Promptly following the date hereof, Parent
will make all filings with and give all notices to governmental or regulatory
authorities required of Parent pursuant to the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended ("HSR Act"), in connection with
consummating the transactions contemplated by this Agreement. Parent will use
all commercially reasonable efforts to obtain early termination of all
applicable waiting periods under the HSR Act.
2. Grant of Option.
2.1. Option. Upon the terms and subject to the conditions of
this Agreement, Stockholder hereby grants to Parent or Parent's designee an
irrevocable option (the "Option") to purchase the Option Shares. Upon exercise
of the Option and purchase of the Option Shares, Parent shall not assume any
liabilities or obligations (if any) of Stockholder related to or in connection
with such Option Shares and arising prior to the Option Closing Date (as defined
hereinafter).
2.2. Option Price. The purchase price payable by Parent or
its designee at the Option Closing (as hereinafter defined) for the Option
Shares shall be an amount equal to $8.00 per Option Share (the "Option Price");
provided, however, if prior to the Option Closing, Parent shall purchase any
shares of the Company Common Stock for an amount per share in excess of the
Option Price (the "Excess Amount"), then the amount per Option Share to be paid
by Parent shall equal the sum of the Option Price plus the Excess Amount. If
following the Option Closing, Parent shall purchase any shares of the Company
Common Stock for an amount per share in excess of the sum of the Option Price
plus, if applicable, the Excess Amount plus any other amount previously remitted
pursuant to this Section 2.2 (the "Subsequent Excess Amount"), then Parent shall
forthwith remit to Stockholder an amount equal to the Subsequent Excess Amount
for each Option Share purchased at the Option Closing.
2.3. Exercise.
-2-
(a) Parent or its designee shall be entitled to exercise
the Option by giving written notice to Stockholder. Such notice shall specify a
date (not earlier than one business day or later than three business days from
the date such notice is delivered to Stockholder) and place for closing of the
exercise of the Option (the "Option Closing"). Upon delivery of notice
exercising the Option, the Option shall be deemed to have been exercised by
Parent or its designee irrespective of the actual date of the Option Closing
(the actual date of the Option Closing is referred to hereinafter as the "Option
Closing Date"). At the Option Closing, Parent or its designee will deliver to
Stockholder the Option Price (as adjusted pursuant to Section 2.2, if necessary)
with respect to the Option Shares, by wire transfer of immediately available
funds to an account designated in writing by Stockholder prior to the Option
Closing Date.
(b) Upon payment of the Option Price as provided in
Section 2.3 hereof, the Stockholder shall deliver to Parent or its designee at
the Option Closing, (i) the certificates representing the Option Shares duly
endorsed in blank for transfer, or accompanied by duly executed stock powers in
blank, in each case with signatures guaranteed by a national bank or trust
company or a member firm of the New York Stock Exchange, Inc. and (ii) all such
other agreements, endorsements, assignments and other instruments as are
necessary or desirable, in Parent's sole and absolute discretion, to vest in
Parent or its designee good and marketable title to such Option Shares or to
evidence of record the sale and assignment of such Option Shares to Parent or
its designee.
2.4. Option Expiration/Put Right. Except as provided below, the
Option shall terminate and expire ten days after the transactions contemplated
by this Agreement receive approval required by the HSR Act ("HSR Approval") if
the Option has not been exercised by Parent or its designee on or before such
date (the "Expiration Date"). If the Option has not been exercised by Parent on
or before the Expiration Date, Stockholder shall have the right at such time,
and for a period of 30 days thereafter, to deliver a written notice to Parent
(the "Stockholder Notice") requiring that Parent or its designee purchase the
Option Shares at the Option Price, as adjusted (if necessary) in accordance with
Section 2.2 hereof (the "Put Right"). Upon the exercise by Stockholder of the
Put Right, the parties hereto shall consummate the purchase and sale of the
Option Shares in accordance with Section 2.3 hereof.
3. Representations and Warranties of Stockholder. Stockholder
hereby represents and warrants to Parent, as of the date hereof and as of the
Closing Date, as follows:
3.1. Ownership. Stockholder has good and marketable title to,
and is the sole legal and beneficial owner of the Option Shares, in each case
free and clear of all liabilities, claims, liens, options, proxies, charges,
participations and encumbrances of any kind or character whatsoever. At the
Option Closing, Stockholder will transfer and convey to Parent or its designee
good and marketable title to the Option Shares, free and clear of all
liabilities, claims, liens, options, proxies, charges, participations and
encumbrances of any kind or character whatsoever created by or arising through
Stockholder.
-3-
3.2. Authorization. Stockholder has all requisite power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby and has sole voting power and sole power of
disposition, with respect to all of the Option Shares owned by Stockholder with
no restrictions on its voting rights or rights of disposition pertaining
thereto. Stockholder has duly executed and delivered this Agreement and this
Agreement is a legal, valid and binding agreement of Stockholder, enforceable
against Stockholder in accordance with its terms.
3.3. Stockholder Has Adequate Information. Stockholder is a
sophisticated seller with respect to the Option Shares and has adequate
information concerning the business and financial condition of the Company to
make an informed decision regarding the sale of the Option Shares and has
independently and without reliance upon Parent and based on such information as
Stockholder has deemed appropriate, made its own analysis and decision to enter
into this Agreement. Stockholder acknowledges that Parent has not made and does
not make any representation or warranty, whether express or implied, of any kind
or character except as expressly set forth in this Agreement. Stockholder
acknowledges that the sale of the Option Shares by Stockholder to Parent is
irrevocable, and that Stockholder shall have no recourse to the Option Shares or
Parent, except with respect to breaches of representations, warranties,
covenants and agreements expressly set forth in this Agreement.
3.4. Parent's Excluded Information. Stockholder acknowledges
and confirms that (a) Parent may possess or hereafter come into possession of
certain non-public information concerning the Option Shares and the Company
which is not known to Stockholder and which may be material to Stockholder's
decision to sell the Option Shares ("Parent's Excluded Information"), (b)
Stockholder has requested not to receive Parent's Excluded Information and has
determined to sell the Option Shares notwithstanding its lack of knowledge of
Parent's Excluded Information, and (c) Parent shall have no liability or
obligation to Stockholder in connection with, and Stockholder hereby waives and
releases Parent from, any claims which Stockholder or its successors and assigns
may have against Parent (whether pursuant to applicable Option Shares, laws or
otherwise) with respect to the non-disclosure of Parent's Excluded Information;
provided, however, nothing contained in this Section 3.4 shall limit
Stockholder's right to rely upon the express representations and warranties made
by Parent in this Agreement, or Stockholder's remedies in respect of breaches of
any such representations and warranties.
4. Survival of Representations and Warranties. The respective
representations and warranties of Stockholder and Parent contained herein shall
not be deemed waived or otherwise affected by any investigation made by the
other party hereto, and each representation and warranty contained herein shall
survive the closing of the transactions contemplated hereby until the expiration
of the applicable statute of limitations, including extensions thereof.
5. Specific Performance. Stockholder acknowledges that Parent
will be irreparably harmed and that there will be no adequate remedy at law for
a violation of any of the covenants or agreements of Stockholder which are
contained in this Agreement. It is accordingly agreed that, in addition to any
other remedies which may be available to Parent upon the breach by
-4-
Stockholder of such covenants and agreements, Parent shall have the right to
obtain injunctive relief to restrain any breach or threatened breach of such
covenants or agreements or otherwise to obtain specific performance of any of
such covenants or agreements.
6. Miscellaneous.
6.1. Binding Effect. This Agreement shall be binding upon
and inure to the benefit of and be enforceable by the parties hereto and their
respective representatives and permitted successors and assigns.
6.2. Entire Agreement. This Agreement contains the entire
understanding of the parties and supersedes all prior agreements and
understandings between the parties with respect to its subject matter. This
Agreement may be amended only by a written instrument duly executed by the
parties hereto.
6.3. Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Time is of the essence with respect to all
provisions of this Agreement.
6.4. Assignment. This Agreement may not be transferred or
assigned by Stockholder but may be assigned by Parent to any of its affiliates
or to any successor to its business and will be binding upon and inure to the
benefit of any such affiliate or successor.
6.5. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be an original, but each of which
together shall constitute one and the same Agreement.
6.6. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given if so given) by delivery, telegram or telecopy,
or by mail (registered or certified mail, postage prepaid, return receipt
requested) or by any national courier service, provided that any notice
delivered as herein provided shall also be delivered by telecopy at the time of
such delivery. All communications hereunder shall be delivered to the respective
parties at the following addresses (or at such other address for a party as
shall be specified by like notice, provided that notices of a change of address
shall be effective only upon receipt thereof):
(a) If to Parent:
Sprint Corporation
Shawnee Mission Parkway
Westwood, Kansas 66205
Attention: Corporate Secretary
Telecopy: (913) 624-2256
-5-
with a copy to:
King & Spalding
191 Peachtree Street
Atlanta, Georgia 30303-1763
Attention: Bruce N. Hawthorne, Esq.
Telecopy: (404) 572-5146
(b) If to
Stockholder:
Matthew Oristano
Old Quarry Road
Woodbridge, CT 06525
Telecopy: (203) 393-3852
with a copy to:
Cummings & Lockwood
Stamford Plaza
Box 120
Stamford, CT 06904
Attention: John Flaherty
Telecopy: (203) 351-4140
6.7. Governing Law. This Agreement shall be governed
by and construed and enforced in accordance with the laws of the State of New
York, without regard to its principles of conflicts of laws.
6.8. Enforceability. The invalidity or unenforceability of any
provision or provisions of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which shall remain in
full force and effect.
6.9. Further Assurances. From time to time at or after the
Option Closing, at Parent's request and without further consideration,
Stockholder shall execute and deliver to Parent such documents and take such
action as Parent may reasonably request in order to consummate more effectively
the transactions contemplated hereby and to vest in Parent good, valid and
marketable title to the Option Shares, including, but not limited to, using its
best efforts to cause the appropriate transfer agent or registrar to transfer of
record the Option Shares.
-6-
IN WITNESS WHEREOF, Parent and Stockholder have caused this Agreement to
be duly executed as of the day and year first above written.
SPRINT CORPORATION
By: /s/ Theodore H. Schell
----------------------
Senior Vice President
MATTHEW ORISTANO
/s/ Matthew Oristano
--------------------
In his individual capacity and as
attorney-in-fact for the
stockholders identified on
Schedule I hereto
-7-
SCHEDULE I
----------
Name of Stockholder Shares of Company Common Stock
- ------------------- ------------------------------
Alda Multichannels Limited 936,327
Matthew Oristano 10,000
Jean Oristano 45,000
Matthew Oristano, as custodian for 110,000
Rachel Oristano
Mark Oristano 79,357
Michael Oristano 105,809
Trust FBO Stacey Oristano 13,226
Trust FBO Kelley Oristano 13,226
Victor Oristano 5,000
Joan and Victor Oristano Gifting Trust # 1 179,522
Joan and Victor Oristano Gifting Trust # 2 72,743
Joan Oristano Generation Skipping Trust 6,613
exempt marital trust
The Oristano Foundation 108,000
Alda LP 10,000
TOTAL: 1,694,823