EXHIBIT 10.15.1
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LICENSE ACQUISITION AGREEMENT
between
MERCURY PCS II, LLC
and
TELECORP PCS, INC.
Dated as of May 15, 1998
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TABLE OF CONTENTS
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Page
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ARTICLE I -- DEFINITIONS....................................................................................... 1
ARTICLE II -- PURCHASE AND SALE OF LICENSES; PAYMENT
OF CONSIDERATION; CERTAIN RESTRICTIONS ON TRANSFER............................................................. 5
2.1 Purchase and Sale of Licenses.................................................................... 5
2.2 Payment of Consideration......................................................................... 5
2.3 Assumption of Indebtedness....................................................................... 5
2.4 Payment of Certain Expenses...................................................................... 5
2.5 Restrictive Legends.............................................................................. 5
ARTICLE III -- CLOSING......................................................................................... 6
3.1 Time and Place of Closing........................................................................ 6
3.2 Closing Actions and Deliveries................................................................... 6
3.3 Payment of Transfer Taxes........................................................................ 7
ARTICLE IV -- REPRESENTATIONS AND WARRANTIES OF MERCURY........................................................ 7
4.1 Organization, Power and Authority................................................................ 7
4.2 Consents; No Conflicts........................................................................... 8
4.3 Litigation....................................................................................... 8
4.4 FCC Compliance................................................................................... 8
4.5 Brokers.......................................................................................... 8
4.6 Mercury Licenses................................................................................. 9
4.7 No Distribution.................................................................................. 9
4.8 Investor Acknowledgments......................................................................... 9
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ARTICLE V -- REPRESENTATIONS AND WARRANTIES OF THE COMPANY..................................................... 10
5.1 Organization, Power and Authority................................................................ 10
5.2 Consents; No Conflicts........................................................................... 11
5.3 Litigation....................................................................................... 11
5.4 FCC Compliance................................................................................... 11
5.5 Brokers.......................................................................................... 11
5.6 Capitalization................................................................................... 12
5.7 Shares........................................................................................... 12
5.8 Offering of Securities........................................................................... 12
5.9 Securities Purchase Agreement.................................................................... 13
ARTICLE VI -- COVENANTS........................................................................................ 13
6.1 Consummation of Transactions..................................................................... 13
6.2 Confidentiality.................................................................................. 14
6.3 Certain Covenants................................................................................ 15
ARTICLE VII -- CLOSING CONDITIONS.............................................................................. 15
7.1 Conditions to Obligations of All Parties......................................................... 15
7.2 Conditions to Obligations of the Company......................................................... 16
7.3 Conditions to the Obligations of Mercury......................................................... 17
ARTICLE VIII -- SURVIVAL AND INDEMNIFICATION.................................................................. 18
8.1 Survival......................................................................................... 18
8.2 Indemnification by Mercury....................................................................... 18
8.3 Indemnification by the Company................................................................... 19
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TABLE OF CONTENTS
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(continued)
Page
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8.4 Procedures....................................................................................... 19
8.5 Registration Rights.............................................................................. 20
ARTICLE IX -- TERMINATION...................................................................................... 20
9.1 Termination...................................................................................... 20
9.2 Effect of Termination............................................................................ 21
ARTICLE X -- MISCELLANEOUS PROVISIONS.......................................................................... 21
10.1 Amendment and Modification...................................................................... 21
10.2 Waiver of Compliance; Consents.................................................................. 21
10.3 Notices......................................................................................... 21
10.4 Parties in Interest; Assignment................................................................. 22
10.5 Applicable Law.................................................................................. 22
10.6 Counterparts.................................................................................... 23
10.7 Interpretation.................................................................................. 23
10.8 Entire Agreement................................................................................ 23
10.9 Publicity....................................................................................... 23
10.10 Specific Performance........................................................................... 23
10.11 Remedies Cumulative............................................................................ 23
Schedules
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Schedule I -- Mercury Licenses
Schedule 4.2 -- Mercury Consents
Schedule 4.3 -- Mercury Litigation
Schedule 4.6 -- Mercury FCC Proceedings
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Schedule 5.2 -- Company Consents
Exhibits
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Exhibit A -- Form of Opinion of Counsel to Mercury
Exhibit B -- Form of Opinion of FCC Counsel to Mercury
Exhibit C -- Form of Opinion of Counsel to Company
Exhibit D -- Form of Assignment
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LICENSE ACQUISITION AGREEMENT
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LICENSE ACQUISITION AGREEMENT, dated as of May 15, 1998, between
MERCURY PCS II, LLC, a Mississippi limited liability company ("Mercury"), and
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TELECORP PCS, a Delaware corporation (the "Company").
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WHEREAS, Mercury has been granted the PCS licenses described on
Schedule I (the "Mercury Licenses"); and
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WHEREAS, Mercury wishes to sell to the Company, and the Company wishes
to acquire from Mercury, the Mercury Licenses, all on the terms and subject to
the conditions herein set forth;
NOW, THEREFORE, in consideration of the promises and the mutual
representations, warranties, covenants, conditions and agreements hereinafter
set forth, the parties agree as follows:
ARTICLE I
DEFINITIONS
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As used herein, the following terms have the following meanings
(unless indicated otherwise, all Section and Article references are to Sections
and Articles in this Agreement, and all Schedule and Exhibit references are to
Schedules and Exhibits to this Agreement):
"Affiliate" means, with respect to any Person, any other Person that
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directly, or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with that Person. For purposes of this
definition, "control" (including the terms "controlling" and "controlled") means
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the power to direct or cause the direction of the management and policies of a
Person, directly or indirectly, whether through the ownership of securities or
partnership or other ownership interests, by contract or otherwise.
"AT&T PCS" means AT&T Wireless PCS Inc., a Delaware corporation.
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"Cash Equity Investors" means the Persons identified as such in the
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Securities Purchase Agreement.
"Claim" has the meaning set forth in Section 8.5.
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"Closing" has the meaning set forth in Section 3.1.
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"Closing Date" has the meaning set forth in Section 3.1.
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"Common Stock" means, collectively, the Voting Common Stock and the
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Non-Voting Common Stock.
"Company" has the meaning set forth in the preamble.
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"Confidential Information" means any and all information regarding the
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business, finances, operations, products, services and customers of the Person
specified and its Affiliates, in written or oral form or in any other medium.
"Consents" means all consents and approvals of Governmental
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Authorities or other third parties necessary to authorize, approve or permit the
parties hereto to consummate the Transactions and for the Company to operate its
business after the Closing Date as currently contemplated.
"FCC" means the Federal Communications Commission or similar
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regulatory authority established in replacement thereof.
"FCC Law" means the Communications Act of 1934, as amended, including
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as amended by the Telecommunications Act of 1996, and the rules, regulations and
policies promulgated thereunder.
"Final Order" has the meaning set forth in Section 7.1(b).
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"Governmental Authority" means a Federal, state or local court,
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legislature, governmental agency (including, without limitation, the United
States Department of Justice), commission or regulatory or administrative
authority or instrumentality.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
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1976, as amended, and the rules and regulations promulgated thereunder.
"Indemnified Party" has the meaning set forth in Section 8.4.
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"Indemnifying Party" has the meaning set forth in Section 8.4.
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"Law" means applicable common law and any statute, ordinance, code or
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other law, rule, permit, permit condition, regulation, order, decree, technical
or other standard, requirement or procedure enacted, adopted, promulgated,
applied or followed by any Governmental Authority.
"License" means a license, permit, certificate of authority, waiver,
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approval, certificate of public convenience and necessity, registration or other
authorization, consent or clearance to construct or operate a facility,
including any emissions, discharges or releases therefrom, or to transact an
activity or business, to construct a tower or to use an asset or process, in
each case issued or granted by a Governmental Authority.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
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charge, security interest, right of first refusal or right of others therein, or
encumbrance of any nature whatsoever in respect of such asset.
"Losses" has the meaning set forth in Section 8.2.
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"Management Stockholders" means the Persons identified as such in the
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Securities Purchase Agreement.
"Material Adverse Effect" means a material adverse effect on the
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business, financial condition, assets, liabilities or results of operations or
prospects of the Person specified.
"Mercury" has the meaning set forth in the preamble.
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"Mercury License Transfer" has the meaning set forth in Section
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3.2(a).
"Mercury Licenses" has the meaning set forth in the first recital.
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"New York Courts" has the meaning set forth in Section 10.6.
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"Non-Voting Common Stock" means the Company's Class B Non-Voting
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Common Stock, par value $.01 per share.
"Original Certificate" has the meaning set forth in the second
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recital.
"Person" means an individual, corporation, partnership, limited
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liability company, association, joint stock company, Governmental Authority,
business trust, unincorporated organization, or other legal entity.
"Preferred Stock" means the shares of Series A Preferred Stock, Series
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C Preferred Stock, Series D Preferred Stock, Series E Preferred Stock and Series
F Preferred Stock of the Company.
"Purchaser" means any Person identified as such in the Securities
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Purchase Agreement.
"Representatives" has the meaning set forth in Section 6.2(a).
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"Restated Bylaws" means the Amended and Restated Bylaws of the
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Company, in the form of Exhibit D to the Securities Purchase Agreement, to be
adopted as of the TeleCorp Closing Date, as the same may be amended, modified or
supplemented in accordance with the terms thereof.
"Restated Certificate" means the Amended and Restated Certificate of
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Incorporation of the Company, in the form of Exhibit E to the Securities
Purchase Agreement, to be filed with the office of the Secretary of State of the
State of Delaware on the TeleCorp Closing Date, as the same may be amended,
modified or supplemented in accordance with the terms thereof.
"Section 8.2 Indemnified Party" has the meaning set forth in Section
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8.2.
"Section 8.3 Indemnified Party" has the meaning set forth in Section
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8.3.
"Securities" means the shares of Series C Preferred Stock and Common
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Stock being issued hereunder, together with any shares of Common Stock issued
upon conversion of shares of Series C Preferred Stock.
"Securities Act" means the Securities Act of 1933, as amended.
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"Securities Purchase Agreement" means the Securities Purchase
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Agreement, dated as of January 23, 1998, by and among the Company, AT&T PCS, the
Cash Equity Investors, the TeleCorp Investors and the Management Stockholders,
as the same may be amended, modified or supplemented in accordance with the
terms thereof.
"Series C Preferred Stock" has the meaning set forth in Section 2.2.
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"Stockholders Agreement" means the Stockholders Agreement, by and
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among the Company, AT&T PCS, the Cash Equity Investors, the TeleCorp Investors,
Mercury and the Management Stockholders, in substantially the form of Exhibit G
to the Securities Purchase Agreement, to be dated as of the TeleCorp Closing
Date, as the same may be amended, modified or supplemented in accordance with
the terms thereof.
"Subsidiary" shall mean, with respect to any Person, a corporation or
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other entity of which 50% or more of the voting power or the voting equity
securities or equity interest is owned, directly or indirectly, by such Person.
"TeleCorp Closing" means the closing under the Securities Purchase
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Agreement.
"TeleCorp Investors" means the Persons identified as such in the
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Securities Purchase Agreement.
"TeleCorp Transactions" means the transactions contemplated by the
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Securities Purchase Agreement and the agreements referred to therein.
"Transactions" means the transactions contemplated by this Agreement
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and the Stockholders Agreement.
"Voting Common Stock" has the meaning set forth in Section 2.2.
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"Voting Preference Stock" means the Company's Voting Preference Stock,
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par value $.01 per share.
ARTICLE II
PURCHASE AND SALE OF LICENSES; PAYMENT OF CONSIDERATION;
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CERTAIN RESTRICTIONS ON TRANSFER
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2.1 Purchase and Sale of Licenses. Upon the terms and subject to the
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conditions hereof and in reliance upon the representations, warranties and
agreements herein
contained, at the Closing, Mercury shall sell, transfer, assign, convey and
deliver to the Company (or one or more wholly owned Subsidiaries of the Company
designated by the Company), free and clear of all Liens (other than Liens
securing the indebtedness to be assumed by the Company pursuant to Section 2.3),
and the Company agrees to purchase, acquire and accept from Mercury, the Mercury
Licenses.
2.2 Payment of Consideration. Upon the terms and subject to the
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conditions hereof and in reliance upon the representations, warranties and
agreements herein contained, at the Closing, in consideration of the assignment
of the Mercury Licenses, the Company shall issue, sell and deliver to Mercury
(i) 2,332.55 shares of Series C Preferred Stock, par value $.01 per share
("Series C Preferred Stock"), of the Company and (ii) 2,269.23 shares of Class A
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Voting Common Stock, par value $.01 per share ("Voting Common Stock"), of the
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Company, subject in each case to appropriate adjustment in the event of any
stock dividend, stock split or combination, or similar recapitalization, prior
to the Closing affecting the Series C Preferred Stock or the Voting Common
Stock, as applicable.
2.3 Assumption of Indebtedness. On and as of the Closing Date, the
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Company shall (a) accept and assume the indebtedness of Mercury to the United
States Department of the Treasury incurred in connection with the acquisition of
the Mercury Licenses and (b) reimburse Mercury for interest actually paid by
Mercury on such indebtedness through the Closing Date.
2.4 Payment of Certain Expenses. At the Closing (if any) the Company
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shall reimburse Mercury, against delivery of customary invoices in reasonable
detail, for its legal fees and related expenses incurred in connection with the
preparation and filing of applications on Form 490 with the FCC necessary to
effect the Mercury License Transfer, provided, that the Company's reimbursement
obligation shall be limited to fees and expenses incurred through the date of
filing of the last of such applications.
2.5 Restrictive Legends. Each certificate representing Securities
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(including the Securities originally issued hereunder or delivered upon
conversion of the Series C Preferred Stock, or delivered in substitution or
exchange for any of the foregoing) will bear a legend reading substantially as
follows until such Securities have been sold pursuant to an effective
registration statement under the Securities Act, Rule 144 under the Securities
Act, or an opinion of counsel reasonably satisfactory in form and substance to
the Company and otherwise in full compliance with any other applicable
restrictions on transfer, including those contained in this Agreement and the
Stockholders Agreement:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE 'ACT'), OR UNDER ANY
STATE SECURITIES OR 'BLUE SKY'
LAWS. SAID SECURITIES MAY NOT BE SOLD, TRANSFERRED, ASSIGNED,
PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF, UNLESS AND UNTIL
REGISTERED UNDER THE ACT AND THE RULES AND REGULATIONS THEREUNDER
AND ALL APPLICABLE STATE SECURITIES OR 'BLUE SKY' LAWS OR
EXEMPTED THEREFROM UNDER THE ACT AND ALL APPLICABLE STATE
SECURITIES OR 'BLUE SKY' LAWS."
ARTICLE III
CLOSING
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3.1 Time and Place of Closing. Upon the terms and subject to the
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conditions hereof, the closing of the Transactions (the "Closing") shall take
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place at the offices of Friedman Kaplan & Seiler LLP, 875 Third Avenue, New
York, New York at 10:00 a.m. local time on the twelfth business day following
the date of receipt of the last Consent required by subsections (a) through (c)
of Section 7.1, or at such other place and/or time and/or on such other date as
the parties may agree or as may be necessary to permit the fulfillment or waiver
of the conditions set forth in Article VII (the "Closing Date").
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3.2 Closing Actions and Deliveries. Upon the terms and subject to
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the satisfaction or waiver by the appropriate party, if applicable, of the
conditions set forth in Article VII, to effect the purchase and sale of the
Mercury Licenses and the issuance of the Securities in consideration therefor,
the parties shall on the Closing Date take the following actions:
(a) Assignment of Licenses. Mercury shall execute and deliver to the
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Company one or more instruments of assignment, substantially in the form of
Exhibit D, sufficient to assign to the Company (or one or more wholly owned
Subsidiaries of the Company designated by the Company) the Mercury Licenses
(such assignment being herein referred to as the "Mercury License Transfer").
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(b) Delivery of Securities. The Company shall deliver to Mercury
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certificates, duly executed by authorized signatories of the Company,
representing the Securities to be issued to Mercury in accordance with the terms
of Section 2.2.
(c) Assumption of Indebtedness. The Company shall (i) execute and
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deliver to Mercury an instrument of assumption, in form and substance reasonably
satisfactory to Mercury, in respect of the indebtedness to be assumed by the
Company pursuant to Section 2.3 and (ii) pay Mercury an amount equal to interest
actually paid by Mercury on such indebtedness through the Closing Date as
evidenced by documentation reasonably satisfactory to the Company.
(d) Other Deliveries. The parties shall execute and deliver or cause
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to be
executed and delivered all other documents, instruments, opinions and
certificates contemplated by this Agreement or the Stockholders Agreement to be
delivered at the Closing or necessary and appropriate in order to consummate the
Transactions contemplated to be consummated on the Closing Date.
3.3 Payment of Transfer Taxes. The Company shall pay or cause to be
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paid at the Closing or, if due thereafter, promptly when due, all gross receipts
taxes, gains taxes (including, without limitation, real property gains tax or
other similar taxes), transfer taxes, sales taxes, stamp taxes, and any other
taxes, but excluding any Federal, State or local income taxes payable in
connection with the transfer of the Mercury Licenses.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF MERCURY
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Mercury represents and warrants to the Company as follows:
4.1 Organization, Power and Authority. (a) It is a limited
---------------------------------
liability company duly organized, validly existing and in good standing under
the laws of its jurisdiction of organization and has the requisite power and
authority to own, lease and operate its properties and to carry on its business
as now being conducted.
(b) It has the requisite power and authority to execute, deliver and
perform this Agreement, the Stockholders Agreement and each other instrument,
document, certificate and agreement required or contemplated to be executed,
delivered and performed by it hereunder and thereunder to which it is or will be
a party.
(c) It is duly qualified to do business in each jurisdiction where
the character of its properties owned or held under lease or the nature of its
activities makes such qualification necessary other than any such jurisdiction
in which the failure to be so qualified would not have a Material Adverse Effect
on it or materially adversely affect the Transactions or its ability to perform
its obligations under this Agreement and the Stockholders Agreement.
(d) The execution and delivery of this Agreement and the Stockholders
Agreement by it and the consummation of the Transactions by it have been duly
and validly authorized by its Board of Directors (or equivalent body) and no
other proceedings on its part which have not been taken (including, without
limitation, approval of its stockholders, partners or members) are necessary to
authorize this Agreement and the Stockholders Agreement or to consummate the
Transactions.
(e) This Agreement has been duly executed and delivered by it and
constitutes
its valid and binding obligation, enforceable against it in accordance with its
terms, except as such enforceability may be limited by bankruptcy, insolvency,
moratorium or other similar laws affecting or relating to enforcement of
creditors' rights generally and may be subject to general principles of equity.
The Stockholders Agreement shall be duly executed and delivered by it at the
Closing and, upon such execution and delivery, shall constitute its valid and
binding obligation, enforceable against it in accordance with its terms, except
as such enforceability may be limited by bankruptcy, insolvency, moratorium or
other similar laws affecting or relating to enforcement of creditors' rights
generally and may be subject to general principles of equity.
(f) As of the Closing Date, after giving effect to the Transactions,
it is not in breach of any obligation under this Agreement or the Stockholders
Agreement.
4.2 Consents; No Conflicts. Neither the execution, delivery and
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performance by it of this Agreement or the Stockholders Agreement nor the
consummation of the Transactions will (a) conflict with, or result in a breach
or violation of, any provision of its organizational documents; (b) constitute,
with or without the giving of notice or passage of time or both, a breach,
violation or default, create a Lien, or give rise to any right of termination,
modification, cancellation, prepayment or acceleration, under (i) any Law or
License or (ii) any note, bond, mortgage, indenture, lease, agreement or other
instrument, in each case which is applicable to or binding upon it or any of its
assets; or (c) require any Consent, other than those set forth on Schedule 4.2
or the approval of its members, managers or similar constituent bodies, as the
case may be (which approvals have been obtained), except in each case, where
such breach, violation, default, Lien, right, or the failure to obtain or give
such Consent would not have a Material Adverse Effect on it or materially
adversely affect the Transactions or its ability to perform its obligations
under this Agreement. To its knowledge, except as set forth on Schedule 4.2,
there is no fact relating to it or its Affiliates that would be reasonably
expected to prevent it from consummating the Transactions or performing its
obligations under the Stockholders Agreement or disqualify the Company from
obtaining the Consents (including without limitation, FCC Consent) required in
order to consummate the Mercury License Transfer as provided for in this
Agreement.
4.3 Litigation. Except as set forth on Schedule 4.3, there is no
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action, proceeding or investigation pending or, to its knowledge, threatened
against it or any of its properties or assets that would be reasonably expected
to have an adverse effect on its ability to consummate the Transactions or to
fulfill its obligations under this Agreement or the Stockholders Agreement, or
which seeks to prevent or challenge the Transactions.
4.4 FCC Compliance. It complies with all eligibility rules issued by
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the FCC to hold broadband PCS licenses, including without limitation, FCC rules
on foreign ownership and the CMRS spectrum cap. The fact that it owns the
interest in the Company contemplated by this Agreement and the Stockholders
Agreement will not cause the Company or its wholly owned Subsidiaries to be
ineligible under FCC rules to hold PCS licenses in general or the licenses to be
held by the Company's wholly owned Subsidiaries.
4.5 Brokers. It has not employed any broker, finder or investment
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banker or incurred any liability for any brokerage fees, commissions or finder's
fees in connection with the Transactions.
4.6 Mercury Licenses. It is the authorized legal holder, free and
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clear of any Liens (other than Liens securing the indebtedness to be assumed by
the Company pursuant to Section 2.3), of the Mercury Licenses, true and correct
copies of which are attached to Schedule I. The Mercury Licenses are, and on the
Closing Date each of the Mercury Licenses will be, valid and in full force and
effect. Except as set forth on Schedule 4.6 and for proceedings affecting the
PCS or wireless communications services industry generally, there is not
pending, nor to the knowledge of Mercury, threatened against Mercury or against
the Mercury Licenses, any application, action, petition, objection or other
pleading, or any proceeding with the FCC which questions or contests the
validity of, or seeks the revocation, nonrenewal or suspension of, any of the
Mercury Licenses, which seeks the imposition of any modification or amendment
with respect thereto, or which adversely effects the ability of the Company to
employ the Mercury Licenses in its business after the Closing Date or seeks the
payment of a fine, sanction, penalty, damages or contribution in connection with
the use of any Mercury License. The Mercury Licenses are not subject to any
conditions other than those appearing on the face of the Licenses themselves and
those imposed by FCC Law.
4.7 No Distribution. It is acquiring the Securities to be acquired
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by it hereunder for the purpose of investment and not with a view to or for sale
in connection with any distribution thereof (other than in compliance with the
Securities Act and all applicable state securities laws).
4.8 Investor Acknowledgments. (a) It is an "accredited investor" as
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defined in Regulation D of the Securities Act. Its representatives have been
provided an opportunity to ask questions of, and have received answers thereto
from, the Company and its representatives regarding the terms and conditions of
its acquisition of Securities, and the Company and its proposed business
generally, and have obtained all additional information requested by it to
verify the accuracy of all information furnished to it in connection with such
purchase.
(b) It has such knowledge and experience in financial and business
affairs that it is capable of evaluating the merits and risks of acquiring the
Securities it is acquiring hereunder.
(c) It is not relying on and acknowledges that no representation is
being made by any Purchaser, the Company or any of its officers, employees,
Affiliates, agents or representatives, or any Management Stockholder, except for
representations and warranties expressly set forth in this Agreement and the
Stockholders Agreement, and, in particular, it is not relying on, and
acknowledges that no representation is being made in respect of, (x) any
projections, estimates or budgets delivered to or made available to them of
future revenues, expenses or expenditures, or future results of operations and
(y) any other information or
documents delivered or made available to it or its representatives, except for
representations and warranties expressly set forth in this Agreement and the
Stockholders Agreement.
(d) In deciding to invest in the Company, it has relied exclusively
on the representations and warranties expressly set forth in this Agreement and
the Stockholders Agreement, investigations made by itself and its
representatives and its and such representatives' knowledge of the industry in
which the Company proposes to operate. Based solely on such representations and
warranties and such investigations and knowledge, it has determined that the
Securities it is acquiring are a suitable investment for it.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
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The Company represents and warrants to Mercury as follows:
5.1 Organization, Power and Authority. (a) The Company and each of
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its Subsidiaries is a corporation, duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and has the
requisite corporate power and authority to own, lease and operate its properties
and to carry on its business as now being conducted and proposed to be
conducted. The Company has furnished to Mercury a true and correct copy of its
and each of its Subsidiaries' Certificate of Incorporation and Bylaws as in
effect on the date hereof and as of the Closing Date. As of the Closing Date,
the Bylaws of the Company shall read in full as set forth in the Restated
Bylaws, which shall be in full force and effect.
(b) It has the requisite corporate power and authority to execute,
deliver and perform this Agreement and the Stockholders Agreement, and each
other instrument, document, certificate and agreement required or contemplated
to be executed, delivered and performed by it hereunder and thereunder to which
it is or will be a party.
(c) The Company and each of its Subsidiaries is duly qualified to do
business in each jurisdiction where the character of its properties owned or
held under lease or the nature of its activities makes such qualification
necessary other than any such jurisdiction in which the failure to be so
qualified would not have a Material Adverse Effect on the Company or such
Subsidiary or materially adversely affect the Transactions or its ability to
perform its obligations under this Agreement and the Stockholders Agreement.
(d) The execution and delivery of this Agreement by the Company and
the consummation of the Transactions by it have been duly and validly authorized
by its Board of Directors and, except for the filing of the Restated Certificate
with the office of the Secretary of State of Delaware, no other proceedings on
its part which have not been taken (including,
without limitation, approval of its shareholders) are necessary to authorize
this Agreement or to consummate the Transactions.
(e) This Agreement has been duly executed and delivered by the
Company and constitutes its valid and binding obligation, enforceable against it
in accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, moratorium or other similar laws affecting or relating
to enforcement of creditors' rights generally and may be subject to general
principles of equity. The Stockholders Agreement shall be duly executed and
delivered by the Company at (or prior to) the Closing and, upon such execution
and delivery, shall constitute its valid and binding obligation, enforceable
against it in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, moratorium or other similar laws affecting or
relating to enforcement of creditors' rights generally and may be subject to
general principles of equity.
(f) As of the Closing, after giving effect to the Transactions, the
Company is not in breach of any obligation under this Agreement or the
Stockholders Agreement.
5.2 Consents; No Conflicts. Neither the execution, delivery and
----------------------
performance by the Company of this Agreement and the Stockholders Agreement nor
the consummation of the Transactions will (a) conflict with, or result in a
breach or violation of, any provision of its organizational documents; (b)
constitute, with or without the giving of notice or passage of time or both, a
breach, violation or default, create a Lien, or give rise to any right of
termination, modification, cancellation, prepayment or acceleration, under (i)
any Law or License, or (ii) any note, bond, mortgage, indenture, lease,
agreement or other instrument, in each case which is applicable to or binding
upon it or any of its assets; or (c) require any Consent on its part, other than
those set forth on Schedule 5.2 or the approval of its Board of Directors (which
approval has been obtained), except in each case where such breach, violation,
default, Lien, right, or the failure to obtain or give such Consent would not
have a Material Adverse Effect on it or materially adversely affect the
Transactions, its ability to perform its obligations under this Agreement or the
Stockholders Agreement or the operation of its business after the Closing Date.
To its knowledge, there is no fact relating to it or its Affiliates that would
be reasonably expected to prevent it from consummating the Transactions or
performing its obligations under this Agreement or the Stockholders Agreement or
disqualify the Company from obtaining the Consents (including without
limitation, FCC Consent) required in order to consummate the Mercury License
Transfer as provided for in this Agreement.
5.3 Litigation. There is no action, proceeding or investigation
----------
pending or, to the Company's knowledge, threatened against it or any of its
properties or assets that would have an adverse effect on its ability to
consummate the Transactions or to fulfill its obligations under this Agreement
or the Stockholders Agreement, or to operate its business after the Closing
Date, or which seeks to prevent or challenge the Transactions. There is no
judgment, decree, injunction, rule or order outstanding against the Company
which would limit in any material respect its ability to operate its business in
the manner currently contemplated.
5.4 FCC Compliance. It complies with all eligibility rules issued by
--------------
the FCC to hold broadband PCS licenses, including without limitation, FCC rules
on foreign ownership and the CMRS spectrum cap.
5.5 Brokers. The Company has not employed any broker, finder or
-------
investment banker or incurred any liability for any brokerage fees, commissions
or finder's fees in connection with the Transactions.
5.6 Capitalization. (a) As of the date hereof and as of the
--------------
TeleCorp Closing Date before giving effect to the filing of the Restated
Certificate, the authorized capital stock of the Company consists of 20,000
shares of common stock, no par value per share ("Old Common Stock"), of which
----------------
ten shares are issued and outstanding, have been validly issued and are fully
paid and non-assessable. As of the date hereof and as of the TeleCorp Closing
Date before giving effect to the Transactions, each of Gerald T. Vento and
Thomas H. Sullivan owns beneficially and of record five shares of Old Common
Stock, free and clear of any Liens. There are not on the date hereof nor will
there be on or as of the TeleCorp Closing Date, before giving effect to the
TeleCorp Transactions, any existing options, warrants, calls, subscriptions, or
other rights, or other agreements or commitments, obligating the Company to
issue, transfer or sell any shares of capital stock of the Company.
(b) As of the TeleCorp Closing Date, after giving effect to the
filing of the Restated Certificate, the authorized capital stock of the Company
will consist of 700,000 shares of Voting Common Stock, 700,000 shares of Non-
Voting Common Stock, ten shares of Voting Preference Stock, 1,000 shares of
Class C Common Stock, 3,000 shares of Class D Common Stock, 70,000 shares of
Series A Preferred Stock, 140,000 shares of Series B Preferred Stock, 140,000
shares of Series C Preferred Stock, 35,000 shares of Series D Preferred Stock,
20,000 shares of Series E Preferred Stock, 35,000 shares of Series F Preferred
Stock and 70,000 shares of Senior Common Stock. As of the TeleCorp Closing Date,
after giving effect to the TeleCorp Transactions, there will be issued and
outstanding the shares of Preferred Stock and Common Stock set forth on Schedule
V to the Securities Purchase Agreement. The record and beneficial owners of such
outstanding shares of Common Stock and Preferred Stock, as of the TeleCorp
Closing Date, after giving effect to the TeleCorp Transactions, are set forth on
Schedule V to the Securities Purchase Agreement. On the TeleCorp Closing Date,
after giving effect to the TeleCorp Transactions, there will not be any existing
options, warrants, calls, subscriptions, or other rights, or other agreements or
commitments, obligating the Company to issue, transfer or sell any shares of
capital stock of the Company, except the Preferred Stock and the Common Stock
(other than the Voting Preference Stock).
(c) On the Closing Date, after giving effect to the Transactions, the
outstanding capital stock of the Company will be as set forth in the second
sentence of paragraph (b) above, except for such changes that do not have a
material adverse effect on the financial value of the Securities.
5.7 Shares. The Securities being issued to Mercury hereunder, when
------
issued and paid for pursuant to the terms of this Agreement, will be duly
authorized, validly issued, fully paid and nonassessable, and will be free of
any Liens caused or created by the Company, except as set forth in the
Stockholders Agreement and the Restated Certificate. The shares of Common Stock
issued upon conversion of the Series C Preferred Stock, when issued pursuant to
the terms of the Series C Preferred Stock, will be validly issued, fully paid
and nonassessable, and will be free of any Liens caused or created by the
Company, except as set forth in the Stockholders Agreement and the Restated
Certificate.
5.8 Offering of Securities. (a) Neither the Company nor any Person
----------------------
acting on its behalf has offered the Securities or any similar equity securities
of the Company for sale to, or solicited any offers to buy Securities or any
similar equity securities of the Company from, any Person, other than the
Purchasers and a limited number of other "accredited investors" (as defined in
Rule 501(a) under the Securities Act).
(b) Neither the Company nor any Person acting on its behalf will,
directly or indirectly, take any action which might subject the offering,
issuance or sale of the Securities to the registration and prospectus delivery
requirements of Section 5 of the Securities Act.
(c) Assuming the accuracy of the representations and warranties of
Mercury contained in Sections 4.7 and 4.8, each of the offering and sale of
Securities under this Agreement to Mercury complies with all applicable
requirements of federal and state securities laws.
5.9 Securities Purchase Agreement. The Company has furnished to
-----------------------------
Mercury a true and complete copy of each of the Securities Purchase Agreement
as in effect on the date hereof.
ARTICLE VI
COVENANTS
---------
6.1 Consummation of Transactions. Each party shall use all
----------------------------
commercially reasonable efforts to take, or cause to be taken, all actions, and
to do, or cause to be done, all things necessary, proper or advisable and
consistent with applicable law to carry out all of their respective obligations
under this Agreement and the Stockholders Agreement to consummate the
Transactions, which efforts shall include, without limitation, the following:
(a) The parties shall use all commercially reasonable efforts to
cause the Closing to occur and the Transactions to be consummated in accordance
with the terms hereof, and, without limiting the generality of the foregoing, to
obtain all necessary Consents including, without limitation, the approval of
this Agreement and the Transactions by all Governmental
Authorities and agencies, including the FCC, and make all filings with and to
give all notices to third parties which may be necessary or reasonably required
in order for the parties to consummate the Transactions; provided that Mercury
shall not make any filings with the FCC regarding the Mercury Licenses without
the prior review and approval of the Company.
(b) Each party shall furnish to the other parties all information
concerning such party and its Affiliates reasonably required for inclusion in
any application or filing to be made by Mercury or the Company or any other
party in connection with the Transactions or otherwise to determine compliance
with applicable FCC Rules.
(c) Upon the request of any other party, each party shall forthwith
execute and deliver, or cause to be executed and delivered, such further
instruments of assignment, transfer, conveyance, endorsement, direction or
authorization and other documents as may reasonably be requested by such party
in order to effectuate the purposes of this Agreement and the Stockholders
Agreement.
Nothing in this Agreement shall be construed to require the parties to
consummate the Closing if any regulatory approval would require that it (i)
divest or hold separate any of its assets existing as of the date hereof other
than as contemplated by this Agreement and the Stockholders Agreement or (ii)
otherwise take or commit to take any action that limits its freedom of action in
any material respect with respect to any of its businesses, product lines or
assets.
6.2 Confidentiality.
---------------
(a) Each party shall, and shall cause each of its Affiliates, and its
and their respective shareholders, members, managers, directors, officers,
employees and agents (collectively, "Representatives") to, keep secret and
---------------
retain in strictest confidence any and all Confidential Information relating to
any other party that it receives in connection with the negotiation or
performance of this Agreement, and shall not disclose such Confidential
Information, and shall cause its Representatives not to disclose such
Confidential Information, to anyone except the receiving party's Affiliates and
Representatives and any other Person that agrees in writing to keep in
confidence all Confidential Information in accordance with the terms of this
Section 6.2. Until the Closing, each party agrees to use Confidential
Information received from another party only (i) to evaluate its interest in
pursuing the Transactions and (ii) to pursue such Transactions, but not for any
other purpose. All Confidential Information furnished pursuant to this
Agreement shall be returned promptly to the party to whom it belongs upon
request by such party. Upon the Closing, the provisions of this Section 6.2
shall terminate and the obligations of the parties in respect of Confidential
Information shall be governed by Section 7.12 of the Stockholders Agreement.
(b) The obligations set forth in Section 6.2(a) shall be inoperative
with respect to Confidential Information that (i) is or becomes generally
available to the public other than as a
result of disclosure by the receiving party or its Representatives, (ii) was
available to the receiving party on a non-confidential basis prior to its
disclosure to the receiving party, or (iii) becomes available to the receiving
party on a non-confidential basis from a source other than the providing party
or its agents, provided that such source is not known by the receiving party to
be bound by a confidentiality agreement with the providing party or the
providing party's agents.
(c) To the fullest extent permitted by law, if a party or any of its
Affiliates or Representatives breaches, or threatens to commit a breach of, this
Section 6.2, the party whose Confidential Information shall be disclosed, or
threatened to be disclosed, shall have the right and remedy to have this Section
6.2 specifically enforced by any court having jurisdiction, it being
acknowledged and agreed that money damages will not provide an adequate remedy
to such party. Nothing in this Section 6.2 shall be construed to limit the
right of any party to collect money damages in the event of breach of this
Section 6.2.
(d) Anything else in this Agreement or the Stockholders Agreement
notwithstanding, each party shall have the right to disclose any information,
including Confidential Information of the other party or such other party's
Affiliates, in any filing with any regulatory agency, court or other authority
or any disclosure to a trustee of public debt of a party to the extent that the
disclosing party determines in good faith that it is required by Law, regulation
or the terms of such debt to do so, provided that any such disclosure shall be
as limited in scope as possible and shall be made only after giving the other
party as much notice as practicable of such required disclosure and an
opportunity to contest such disclosure if possible.
6.3 Certain Covenants. From and after the execution and delivery of
-----------------
this Agreement to and including the Closing Date, Mercury shall:
(a) Comply in all material respects with all applicable Laws,
including all such Laws relating to the Mercury Licenses or their use;
(b) Use commercially reasonable efforts to maintain the Mercury
Licenses in full force and effect;
(c) Not (i) sell, transfer, assign or dispose of, or offer to, or
enter into any agreement, arrangement or understanding to, sell, transfer,
assign or dispose of any of the Mercury Licenses or any interest therein, or
negotiate therefor, or (ii) create, incur or suffer to exist any Lien of any
nature whatsoever relating to any of the Mercury Licenses or any interest
therein (other than Liens securing the indebtedness to be assumed by the Company
pursuant to Section 2.3). Without limiting the foregoing, Mercury shall not
incur any material obligation or liability, absolute or contingent, relating to
or affecting the Mercury Licenses or their use;
(d) Give written notice to the other parties promptly upon the
commencement of, or upon obtaining knowledge of any facts that would give rise
to a threat of, any claim, action or proceeding commenced against or relating to
(i) it, its properties or assets, including the
Mercury Licenses or their use, and which could have a Material Adverse Effect on
it or materially adversely affect the Transactions, or (ii) the Mercury Licenses
or their use;
(e) Promptly after obtaining knowledge of the occurrence of, or the
impending or threatened occurrence of, any event which could cause or constitute
a material breach of any of its warranties, representations, covenants or
agreements contained in this Agreement, give notice in writing of such event, or
occurrence or impending or threatened event or occurrence, to the other parties
and use commercially reasonable efforts to prevent or to promptly remedy such
breach; and
(f) Cause the other parties to be advised promptly in writing of (i)
any event, condition or state of facts known to it, which has had or could have
a Material Adverse Effect on it, or materially adversely affect the Mercury
Licenses or their use or the Transactions (other than proceedings affecting the
PCS or wireless communications services industry generally), or (ii) any claim,
action or proceeding which seeks to enjoin the consummation of the Transactions.
ARTICLE VII
CLOSING CONDITIONS
------------------
7.1 Conditions to Obligations of All Parties. The obligation of each
----------------------------------------
of the parties to consummate the Transactions contemplated to occur at the
Closing shall be conditioned on the following, unless waived by each of the
parties:
(a) Any applicable waiting period under the HSR Act shall have
expired or been terminated.
(b) The Consent of the FCC to the Mercury License Transfer shall have
been obtained pursuant to a Final Order, free of any conditions materially
adverse to the Company or Mercury, other than those applicable to the PCS or
wireless communications services industry generally. For the purposes of this
paragraph, "Final Order" means an action or decision that has been granted by
-----------
the FCC as to which (i) no request for a stay or similar request is pending, no
stay is in effect, the action or decision has not been vacated, reversed, set
aside, annulled or suspended and any deadline for filing such request that may
be designated by statute or regulation has passed, (ii) no petition for
rehearing or reconsideration or application for review is pending and the time
for the filing of any such petition or application has passed, (iii) the FCC
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.
(c) All Consents by any Governmental Authority (other than the
Consents
referred to in paragraphs (a) and (b) above) required to permit the consummation
of the Transactions, the failure to obtain or make which would be reasonably
expected to have a Material Adverse Effect on the Company or Mercury or to
materially adversely affect the Transactions or its ability to perform its
obligations under this Agreement shall have been obtained or made.
(d) No preliminary or permanent injunction or other order, decree or
ruling issued by a Governmental Authority, nor any statute, rule, regulation or
executive order promulgated or enacted by any Governmental Authority, shall be
in effect that would (i) impose material limitations on the ability of any party
to consummate the Transactions or prohibit such consummation, or (ii) impair in
any material respect the operation of the Company.
(e) The TeleCorp Closing shall have occurred prior to or shall occur
concurrently with the Closing hereunder.
7.2 Conditions to Obligations of the Company. The obligation of the
----------------------------------------
Company to consummate the Transactions contemplated to occur at the Closing
shall be further conditioned upon the satisfaction or fulfillment, at or prior
to the Closing, of the following conditions by each of the other parties, unless
waived by the Company:
(a) The representations and warranties of Mercury contained herein
and in the Stockholders Agreement shall be true and correct in all material
respects (except for representations and warranties that are qualified as to
materiality, which shall be true and correct), in each case when made and at and
as of the Closing (except for representations and warranties made as of a
specified date, which shall be true and correct as of such date) with the same
force and effect as though made at and as of such time, except for inaccuracies
in respect of the representations and warranties set forth in Section 4.3 and
the third sentence of Section 4.6 (disregarding any qualifications as to
materiality contained therein) that in the aggregate would not be reasonably
expected to have a Material Adverse Effect on Mercury or its ability to perform
its obligations under this Agreement or the Stockholders Agreement or to
materially adversely affect the Transactions.
(b) Mercury shall have performed in all material respects all
agreements contained herein and in the Stockholders Agreement required to be
performed by it at or before the Closing.
(c) An officer of Mercury shall have delivered to the Company a
certificate, dated the Closing Date, certifying as to the fulfillment of the
conditions set forth in paragraphs (a) and (b) above as to Mercury.
(d) Mercury shall have furnished the Company with opinions of
counsel, each dated the Closing Date, in substantially the forms of Exhibits A
and B.
(e) All corporate and other proceedings of Mercury in connection with
the Mercury License Transfer and the other Transactions, and all documents and
instruments incident thereto, shall be reasonably satisfactory in form and
substance to the Company, and Mercury shall have delivered to the Company such
receipts, documents, instruments and certificates, in form and substance
reasonably satisfactory to the Company, which the Company shall have reasonably
requested.
(f) Mercury shall have executed and delivered to the Company a
counterpart signature page to the Stockholders Agreement.
(g) Mercury shall have executed and delivered to the other parties
thereto a counterpart signature page to the Investors Stockholders Agreement
among the Cash Equity Investors.
7.3 Conditions to the Obligations of Mercury. The obligation of
----------------------------------------
Mercury to consummate the Transactions contemplated to occur at the Closing
shall be further conditioned upon the satisfaction or fulfillment, at or prior
to the Closing, of the following conditions, unless waived by Mercury:
(a) The representations and warranties of the Company contained
herein shall be true and correct in all material respects (except for
representations and warranties that are qualified as to materiality, which shall
be true and correct), in each case when made and at and as of the Closing
(except for representations and warranties made as of a specified date, which
shall be true and correct as of such date) with the same force and effect as
though made at and as of such time, except for inaccuracies in respect of the
representations and warranties set forth in Section 5.3 (disregarding any
qualifications as to materiality contained therein) that in the aggregate would
not be reasonably expected to have a Material Adverse Effect on the Company or
its ability to perform its obligations under this Agreement or to materially
adversely affect the Transactions.
(b) The Company shall have performed in all material respects all
agreements contained herein required to be performed by it at or before the
Closing.
(c) An officer of the Company shall have delivered to Mercury a
certificate, dated the Closing Date, certifying as to the fulfillment of the
conditions set forth in paragraphs (a) and (b) above as to the Company.
(d) The Company shall have furnished Mercury with an opinion of
counsel, dated the Closing Date, in substantially the form of Exhibit C.
(e) All corporate and other proceedings of the Company in connection
with the Mercury License Transfer and the other Transactions, and all documents
and instruments incident thereto, shall be reasonably satisfactory in form and
substance to Mercury, and the
Company shall have delivered to Mercury such receipts, documents, instruments
and certificates, in form and substance reasonably satisfactory to Mercury,
which Mercury shall have reasonably requested.
(f) The Stockholders Agreement shall have been amended in accordance
with the terms thereof to provide that (i) Mercury shall, in addition to its
rights and obligations as a Stockholder thereunder, have the rights and
obligations of a Cash Equity Investor thereunder, (ii) William M. Mounger, II
and E.B. Martin, Jr. shall not be deemed to be in violation of Section 8.6 of
the Stockholders Agreement by reason of their respective interests in
Mississippi-34 Cellular Corporation on the date hereof or the activities of such
entity as being conducted on date hereof and (iii) and William M. Mounger, II,
Jerry M. Sullivan, Jr. and E.B. Martin, Jr. shall not be deemed to be in
violation of Section 8.6 of the Stockholders Agreement by reason of their
respective interests in Mercury Wireless Management Inc. (which owns certain
IVDS Licenses covering the Jackson, Mississippi MSA) on the date hereof or the
activities of such entity as being conducted on date hereof.
ARTICLE VIII
------------
SURVIVAL AND INDEMNIFICATION
----------------------------
8.1 Survival. The representations and warranties made in this
--------
Agreement shall survive the Closing until the second anniversary thereof and
shall thereupon expire together with any right to indemnification in respect
thereof (except to the extent a written notice asserting a claim for breach of
any such representation or warranty and describing such claim in reasonable
detail shall have been given prior to such date to the party which made such
representation or warranty). The covenants and agreements contained herein to
be performed or complied with prior to the Closing shall expire at the Closing.
The covenants and agreements contained in this Agreement to be performed or
complied with after the Closing shall survive the Closing; provided that the
right to indemnification pursuant to this Article VIII in respect of a breach of
a representation or warranty shall expire on the second anniversary of the
Closing (except to the extent written notice asserting a claim thereunder and
describing such claim in reasonable detail shall have been given prior to such
date to the party from whom such indemnification is sought). After the Closing,
the sole and exclusive remedy of the parties for any breach or inaccuracy of any
representation or warranty contained in this Agreement, or any other claim
(whether or not alleging a breach of this Agreement) that arises out of the
facts and circumstances constituting such breach or inaccuracy, shall be the
indemnity provided in this Article VIII.
8.2 Indemnification by Mercury. Mercury shall indemnify and hold
--------------------------
harmless the Company and its Affiliates, and the shareholders, members,
managers, officers, employees, agents and/or the legal representatives of any of
them (each, a "Section 8.2 Indemnified Party"),
-----------------------------
against all liabilities and expenses (including amounts paid in satisfaction of
judgments, in compromise, as fines and penalties, and as counsel fees)
(collectively, "Losses") incurred by him or it in connection with the
investigation, defense, or disposition of any action, suit or other proceeding
in which any Section 8.2 Indemnified Party may be involved or with which he or
it may be threatened that arises out of or results from (a) any representation
or warranty of such indemnifying party contained in this Agreement or in the
Stockholders Agreement being untrue in any material respect as of the date on
which it was made, (b) any of the matters referred to on Schedules 4.2, 4.3 or
4.6 or (c) any material default by such indemnifying party or any of its
Affiliates in the performance of their respective obligations under this
Agreement and the Stockholders Agreement, except to the extent (but only to the
extent) any such Losses arise out of or result from the gross negligence or
willful misconduct of such Section 8.2 Indemnified Party or its Affiliates.
8.3 Indemnification by the Company. The Company shall indemnify and
------------------------------
hold harmless Mercury and its Affiliates, and the shareholders, members,
managers, officers, employees, agents and/or the legal representatives of any of
them (each, a "Section 8.3 Indemnified Party"), against all Losses incurred by
-----------------------------
him or it in connection with the investigation, defense, or disposition of any
action, suit or other proceeding in which any Section 8.3 Indemnified Party may
be involved or with which he or it may be threatened that arises out of or
results from (a) any representation or warranty of the Company contained in this
Agreement and the Stockholders Agreement being untrue in any material respect as
of the date on which it was made or (b) any material default by the Company or
any of its Affiliates in the performance of their respective obligations under
this Agreement or in the Stockholders Agreement, except to the extent (but only
to the extent) any such Losses arise out of or result from the gross negligence
or willful misconduct of such Section 8.3 Indemnified Party or its Affiliates.
8.4 Procedures.
----------
(a) The terms of this Section 8.4 shall apply to any claim (a
"Claim") for indemnification under the terms of Sections 8.2 or 8.3. The Section
-----
8.2 Indemnified Party or Section 8.3 Indemnified Party Indemnified Party (each,
an "Indemnified Party"), as the case may be, shall give prompt written notice of
-----------------
such Claim to the indemnifying party (the "Indemnifying Party") under the
------------------
applicable Section, which party may assume the defense thereof, provided that
any delay or failure to so notify the Indemnifying Party shall relieve the
Indemnifying Party of its obligations hereunder only to the extent, if at all,
that it is materially prejudiced by reason of such delay or failure. The
Indemnified Party shall have the right to approve any counsel selected by the
Indemnifying Party and to approve the terms of any proposed settlement, such
approval not to be unreasonably delayed or withheld (unless such settlement
provides only, as to the Indemnified Party, the payment of money damages
actually paid by the Indemnifying Party and a complete release of the
Indemnified Party in respect of the claim in question). Notwithstanding any of
the foregoing to the contrary, the provisions of this Article VIII shall not be
construed so as to provide for the indemnification of any Indemnified Party for
any liability to the extent (but
only to the extent) that such indemnification would be in violation of
applicable law or that such liability may not be waived, modified or limited
under applicable law, but shall be construed so as to effectuate the provisions
of this Article VIII to the fullest extent permitted by law.
(b) In the event that the Indemnifying Party undertakes the defense
of any Claim, the Indemnifying Party will keep the Indemnified Party advised as
to all material developments in connection with such Claim, including, but not
limited to, promptly furnishing the Indemnified Party with copies of all
material documents filed or served in connection therewith.
(c) In the event that the Indemnifying Party fails to assume the
defense of any Claim within ten business days after receiving written notice
thereof, the Indemnified Party shall have the right, subject to the Indemnifying
Party's right to assume the defense pursuant to the provisions of this Article
VIII, to undertake the defense, compromise or settlement of such Claim for the
account of the Indemnifying Party. Unless and until the Indemnified Party
assumes the defense of any Claim, the Indemnifying Party shall advance to the
Indemnified Party any of its reasonable attorneys' fees and other costs and
expenses incurred in connection with the defense of any such action or
proceeding. Each Indemnified Party shall agree in writing prior to any such
advancement that, in the event he or it receives any such advance, such
Indemnified Party shall reimburse the Indemnifying Party for such fees, costs
and expenses to the extent that it shall be determined that he or it was not
entitled to indemnification under this Article VIII.
(d) In no event shall an Indemnifying Party be required to pay in
connection with any Claim for more than one firm of counsel (and local counsel)
for each of the following groups of Indemnified Parties: (i) Mercury, its
Affiliates, and the shareholders, members, managers, officers, employees, agents
and/or the legal representatives of any of them; and (ii) the Company and its
Affiliates, and the shareholders, members, managers, officers, employees, agents
and/or the legal representatives of any of them.
8.5 Registration Rights. Notwithstanding anything to the contrary in
-------------------
this Article VIII, the indemnification and contribution provisions set forth in
Sections 5(e) and 5(f) of the Stockholders Agreement shall govern any claim made
with respect to the registration statements filed pursuant to Section 5 of the
Stockholders Agreement or sales made thereunder.
ARTICLE IX
TERMINATION
-----------
9.1 Termination. This Agreement may be terminated, and the
-----------
Transactions abandoned, without further obligation of any party, except as set
forth herein, at any time prior to the Closing Date:
(a) by mutual written consent of the parties;
(b) by any party by written notice to the other parties, if the
Closing shall not have occurred on or before the date that is two years after
the date hereof, provided that the party electing to exercise such right is not
otherwise in breach of its obligations under this Agreement; or
(c) by any party by written notice to the other parties, if the
consummation of the Transactions shall be prohibited by a final, non-appealable
order, decree or injunction of a court of competent jurisdiction.
9.2 Effect of Termination. (a) In the event of a termination of
---------------------
this Agreement, no party hereto shall have any liability or further obligation
to any other party to this Agreement, except as set forth in paragraph (b)
below, and except that nothing herein will relieve any party from liability for
any breach by such party of this Agreement.
(b) In the event of a termination of this Agreement pursuant to
Section 9.1, all provisions of this Agreement shall terminate, except Section
6.2 and Articles VIII and X.
(c) Whether or not the Closing occurs, all costs and expenses
incurred in connection with this Agreement and the Transactions shall be paid by
the party incurring such expenses, except as otherwise provided in Section 2.4.
ARTICLE X
MISCELLANEOUS PROVISIONS
------------------------
10.1 Amendment and Modification. This Agreement may be amended,
--------------------------
modified or supplemented only by written agreement of each of the parties.
10.2 Waiver of Compliance; Consents. Any failure of any of the
------------------------------
parties to comply with any obligation, covenant, agreement or condition herein
may be waived by the party or parties entitled to the benefits thereof only by a
written instrument signed by the party granting such waiver, but such waiver or
failure to insist upon strict compliance with such obligation, covenant,
agreement or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure. Whenever this Agreement requires
or permits consent by or on behalf of any party hereto, such consent shall be
given in writing in a manner consistent with the requirement for a waiver of
compliance as set forth in this Section 10.2.
10.3 Notices. All notices or other communications hereunder shall be
-------
in writing and shall be given (and shall be deemed to have been duly given upon
receipt) by
delivery in person, 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 Mercury:
Mercury PCS II, LLC
1410 Livingston Lane
Jackson, MS 39213-8003
Attn: William M. Mounger, II
Fax: (601) 362-2664
With a copy to:
Young, Williams, Henderson & Fuselier, P.A.
2000 Deposit Guaranty Plaza
Jackson, MS 39201
P.O. Box 23059
Jackson, MS 39225-3059
Attn: James H. Neeld, IV, Esq.
Fax: (601) 355-6136
If to the Company:
TeleCorp PCS, Inc.
1110 N. Glebe Road, Suite 300
Arlington, Virginia 22201
Attn: General Counsel
Facsimile: (703) 522-4873
With a copy to each other party to the Securities Purchase Agreement sent to the
addresses set forth in Section 10.3 thereof.
10.4 Parties in Interest; Assignment. This Agreement is binding upon
-------------------------------
and is solely for the benefit of the parties hereto and their respective
permitted successors, legal representatives and permitted assigns. Neither
party may assign its rights and obligations hereunder without the prior written
consent of the other party, except that the Company shall have the right to
assign its rights under this Agreement to the lenders (the "Lenders") named in
-------
the Credit Agreement, as security pursuant to the terms of the Credit Documents
(as such terms
are defined in the Securities Purchase Agreement), it being understood that, in
connection with any such assignment to the Lenders, the Lenders shall not assume
any obligations of the Company hereunder.
10.5 Applicable Law. This Agreement shall be governed by and
--------------
construed in accordance with the laws of the State of New York without giving
effect to the conflicts of law principles thereof. The parties hereto hereby
irrevocably and unconditionally consent to submit to the non-exclusive
jurisdiction of the courts of the State of New York and of the United States of
America located in the County of New York, New York (the "New York Courts") for
---------------
any litigation arising out of or relating to this Agreement and the
Transactions, waive any objection to the laying of venue of any such litigation
in the New York Courts and agrees not to plead or claim in any New York Court
that such litigation brought therein has been brought in an inconvenient forum.
10.6 Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
10.7 Interpretation. The article and section headings contained in
--------------
this Agreement are for convenience of reference only, are not part of the
agreement of the parties and shall not affect in any way the meaning or
interpretation of this Agreement. All pronouns and any variations thereof shall
be deemed to refer to the masculine, feminine or neuter, singular or plural, as
the identity of the antecedent Person or Person may require.
10.8 Entire Agreement. This Agreement and the Stockholders
----------------
Agreement, including the exhibits and schedules hereto and the certificates and
instruments delivered pursuant to the terms of this Agreement and the
Stockholders Agreement, embody the entire agreement and understanding of the
parties hereto in respect of the Transactions. There are no restrictions,
promises, representations, warranties, covenants or undertakings, other than
those expressly set forth or referred to herein or in the Stockholders
Agreement. This Agreement and the Stockholders Agreement supersede all prior
agreements and understandings between the parties with respect to such
Transactions.
10.9 Publicity. So long as this Agreement is in effect, the parties
---------
agree to consult with each other in issuing any press release or otherwise
making any public statement with respect to the Transactions, and no party shall
issue any press release or make any such public statement prior to such
consultation, except as may be required by Law. No press release or other
public statement by the parties hereto shall disclose any of the financial terms
of the Transactions without the prior consent of the other parties, except as
may be required by Law. A breach of the provisions of this Section 10.9 by a
party shall not give rise to any right to terminate this Agreement.
10.10 Specific Performance. The parties hereto agree that
--------------------
irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof in any New York Courts.
10.11 Remedies Cumulative. All rights, powers and remedies provided
-------------------
under this Agreement or otherwise available in respect hereof at law or in
equity shall be cumulative and not alternative, and the exercise or beginning of
the exercise of any thereof by any party shall not preclude the simultaneous or
later exercise of any other such right, power or remedy by such party.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
TELECORP PCS, INC.
By: /s/ Thomas H. Sullivan
------------------------------
Name: Thomas H. Sullivan
Title: Executive Vice President
MERCURY PCS II, LLC
By: /s/ E. B. Martin, Jr.
------------------------------
Name: E. B. Martin, Jr.
Title: V. P. of MSM, Inc., Manager
SCHEDULE I
MERCURY LICENSES
----------------
- -----------------------------------------------------------------------
BTA BLOCK MARKET
- -----------------------------------------------------------------------
B032 F Baton Rouge
- -----------------------------------------------------------------------
B180 F Hammond
- -----------------------------------------------------------------------
B195 F Houma-Thibodeaux
- -----------------------------------------------------------------------
B236 F Lafayette-New Iberia
- -----------------------------------------------------------------------
United States of America
Federal Communications Commission
RADIO STATION AUTHORIZATION
Commercial Mobile Radio Services
[STAMP APPEARS Personal Communications Service - Broadband
HERE]
Call Sign: KNLG906
Market: B032
BATON ROUGE, LA
MERCURY PCS II, LLC
1410 LIVINGSTON LANE Channel Block: F
JACKSON, MS 39213
File Number:01284-CW-L-97
- --------------------------------------------------------------------------------
The licensee hereof is authorized, for the period indicated, to construct and
operate radio transmitting facilities in accordance with the terms and
conditions hereinafter described. This authorization is subject to the
provisions of the Communications Act of 1934, as amended, subsequent Acts of
Congress, international treaties and agreements to which the United States is a
signatory and all pertinent rules and regulations of the Federal Communications
Commission contained in the Title 47 of the U.S. Code of Federal Regulations.
- --------------------------------------------------------------------------------
Initial Grant Date......................... August 21, 1997
Five-year Build Out Date................... August 21, 2002
Expiration Date............................ August 21, 2007
- --------------------------------------------------------------------------------
CONDITIONS
- ----------
Pursuant to Section 309(h) of the Communications Act of 1934, as amended, (47
U.S.C. (S) 309(h)), this license is subject to the following conditions: This
license does not vest in the licensee any right to operate a station nor any
right in the use of frequencies beyond the term thereof nor in any other manner
than authorized herein. Neither this license nor the right granted thereunder
shall be assigned or otherwise transferred in violation of the Communications
Act of 1934, as amended (47 U.S.C. (S) 151, et seq.). This license is subject in
terms to the right of use or control conferred by Section 706 of the
Communications Act of 1934, as amended (47 U.S.C. (S) 606).
Conditions continued on Page 2.
- --------------------------------------------------------------------------------
WAIVERS :
- -------
No waivers associated with this authorization.
- --------------------------------------------------------------------------------
KNLG906 MERCURY PCS II, LLC 01284-CW-L-97
CONDITIONS:
This authorization is subject to the condition that, in the event that systems
using the same frequencies as granted herein are authorized in an adjacent
foreign territory (Canada/United States), future coordination of any base
station transmitters within 72 km (45 miles) of the United States/Canada border
shall be required to eliminate any harmful interference to operations in the
adjacent foreign territory and to ensure continuance of equal access to the
frequencies by both countries.
This authorization is conditioned upon the full and timely payment of all monies
due pursuant to Sections 1.2110 and 24.716 of the Commission's Rules and the
terms of the Commission's installment plan as set forth in the Note and Security
Agreement executed by the licensee. Failure to comply with this condition will
result in the automatic cancellation of this authorization.
- --------------------------------------------------------------------------------
United States of America
Federal Communications Commission
RADIO STATION AUTHORIZATION
Commercial Mobile Radio Services
[STAMP APPEARS Personal Communications Service - Broadband
HERE]
Call Sign: KNLG917
Market: B180
HAMMOND, LA
MERCURY PCS II, LLC
1410 LIVINGSTON LANE Channel Block: F
JACKSON, MS 39213
File Number:01295-CW-L-97
- --------------------------------------------------------------------------------
The licensee hereof is authorized, for the period indicated, to construct and
operate radio transmitting facilities in accordance with the terms and
conditions hereinafter described. This authorization is subject to the
provisions of the Communications Act of 1934, as amended, subsequent Acts of
Congress, international treaties and agreements to which the United States is a
signatory and all pertinent rules and regulations of the Federal Communications
Commission contained in the Title 47 of the U.S. Code of Federal Regulations.
- --------------------------------------------------------------------------------
Initial Grant Date......................... August 21, 1997
Five-year Build Out Date................... August 21, 2002
Expiration Date............................ August 21, 2007
- --------------------------------------------------------------------------------
CONDITIONS
- ----------
Pursuant to Section 309(h) of the Communications Act of 1934, as amended, (47
U.S.C. (S) 309(h)), this license is subject to the following conditions: This
license does not vest in the licensee any right to operate a station nor any
right in the use of frequencies beyond the term thereof nor in any other manner
than authorized herein. Neither this license nor the right granted thereunder
shall be assigned or otherwise transferred in violation of the Communications
Act of 1934, as amended (47 U.S.C. (S) 151, et seq.). This license is subject in
terms to the right of use or control conferred by Section 706 of the
Communications Act of 1934, as amended (47 U.S.C. (S) 606).
Conditions continued on Page 2.
- --------------------------------------------------------------------------------
WAIVERS :
- -------
No waivers associated with this authorization.
- --------------------------------------------------------------------------------
KNLG917 MERCURY II PCS II, LLC 01295-CW-L-97
CONDITIONS:
This authorization is subject to the condition that, in the event that systems
using the same frequencies as granted herein are authorized in an adjacent
foreign territory (Canada/United States), future coordination of any base
station transmitters within 72 km (45 miles) of the United States/Canada border
shall be required to eliminate any harmful interference to operations in the
adjacent foreign territory and to ensure continuance of equal access to the
frequencies by both countries.
This authorization is conditioned upon the full and timely payment of all monies
due pursuant to Sections 1.2110 and 24.716 of the Commission's Rules and the
terms of the Commission's installment plan as set forth in the Note and Security
Agreement executed by the licensee. Failure to comply with this condition will
result in the automatic cancellation of this authorization.
- --------------------------------------------------------------------------------
Issue Date: January 30, 1998 Page 2 of 2
FCC Form 463a
United States of America
Federal Communications Commission
RADIO STATION AUTHORIZATION
Commercial Mobile Radio Services
Personal Communications Service - Broadband
Call Sign: KNLG920
[STAMP APPEARS HERE] Market: B195
HOUMA-THIBODAUX, LA
MERCURY PCS II, LLC
1410 LIVINGSTON LANE Channel Block: F
JACKSON, MS 39213
File Number:01298-CW-L-97
- --------------------------------------------------------------------------------
The licensee hereof is authorized, for the period indicated, to construct and
operate radio transmitting facilities in accordance with the terms and
conditions hereinafter described. This authorization is subject to the
provisions of the Communications Act of 1934, as amended, subsequent Acts of
Congress, international treaties and agreements to which the United States is a
signatory and all pertinent rules and regulations of the Federal Communications
Commission contained in the Title 47 of the U.S. Code of Federal Regulations.
- --------------------------------------------------------------------------------
Initial Grant Date ......................... August 21, 1997
Five-year Build Out Date ................... August 21, 2002
Expiration Date ............................ August 21, 2007
- --------------------------------------------------------------------------------
CONDITIONS
- ----------
Pursuant to Section 309(h) of the Communications Act of 1934, as amended, (47
U.S.C. (S) 309(h)), this license is subject to the following conditions: This
license does not vest in the licensee any right to operate a station nor any
right in the use of frequencies beyond the term thereof nor in any other manner
than authorized herein. Neither this license nor the right granted thereunder
shall be assigned or otherwise transferred in violation of the Communications
Act of 1934, as amended (47 U.S.C. (S) 151, et seq.). This license is subject in
terms to the right of use or control conferred by Section 706 of the
Communications Act of 1934, as amended (47 U.S.C. (S) 606).
Conditions continued on Page 2.
- --------------------------------------------------------------------------------
WAIVERS :
- -------
No waivers associated with this authorization.
- --------------------------------------------------------------------------------
KNLG920 MERCURY PCS II, LLC 01298-CW-L-97
CONDITIONS:
This authorization is subject to the condition that, in the event that systems
using the same frequencies as granted herein are authorized in an adjacent
foreign territory (Canada/United States), future coordination of any base
station transmitters within 72 km (45 miles) of the United States/Canada border
shall be required to eliminate any harmful interference to operations in the
adjacent foreign territory and to ensure continuance of equal access to the
frequencies by both countries.
This authorization is conditioned upon the full and timely payment of all monies
due pursuant to Sections 1.2110 and 24.716 of the Commission's Rules and the
terms of the Commission's installment plan as set forth in the Note and Security
Agreement executed by the licensee. Failure to comply with this condition will
result in the automatic cancellation of this authorization.
- --------------------------------------------------------------------------------
United States of America
Federal Communications Commission
RADIO STATION AUTHORIZATION
Commercial Mobile Radio Services
Personal Communications Service - Broadband
[STAMP APPEARS HERE] Call Sign: KNLG921
Market: B236
LAFAYETTE-NEW IBERIA, LA
MERCURY PCS II, LLC
1410 LIVINGSTON LANE Channel Block: F
JACKSON, MS 39213
File Number:01299-CW-L-97
- --------------------------------------------------------------------------------
The licensee hereof is authorized, for the period indicated, to construct and
operate radio transmitting facilities in accordance with the terms and
conditions hereinafter described. This authorization is subject to the
provisions of the Communications Act of 1934, as amended, subsequent Acts of
Congress, international treaties and agreements to which the United States is a
signatory and all pertinent rules and regulations of the Federal Communications
Commission contained in the Title 47 of the U.S. Code of Federal Regulations.
- --------------------------------------------------------------------------------
Initial Grant Date ......................... August 21, 1997
Five-year Build Out Date ................... August 21, 2002
Expiration Date ............................ August 21, 2007
- --------------------------------------------------------------------------------
CONDITIONS
- ----------
Pursuant to Section 309(h) of the Communications Act of 1934, as amended, (47
U.S.C. (S) 309(h)), this license is subject to the following conditions: This
license does not vest in the licensee any right to operate a station nor any
right in the use of frequencies beyond the term thereof nor in any other manner
than authorized herein. Neither this license nor the right granted thereunder
shall be assigned or otherwise transferred in violation of the Communications
Act of 1934, as amended (47 U.S.C. (S) 151, et seq.). This license is subject in
terms to the right of use or control conferred by Section 706 of the
Communications Act of 1934, as amended (47 U.S.C. (S) 606).
Conditions continued on Page 2.
- --------------------------------------------------------------------------------
WAIVERS :
- -------
No waivers associated with this authorization.
- --------------------------------------------------------------------------------
KNLG921 MERCURY PCS II, LLC 01299-CW-L-97
CONDITIONS:
This authorization is subject to the condition that, in the event that systems
using the same frequencies as granted herein are authorized in an adjacent
foreign territory (Canada/United States), future coordination of any base
station transmitters within 72 km (45 miles) of the United States/Canada border
shall be required to eliminate any harmful interference to operations in the
adjacent foreign territory and to ensure continuance of equal access to the
frequencies by both countries.
This authorization is conditioned upon the full and timely payment of all monies
due pursuant to Sections 1.2110 and 24.716 of the Commission's Rules and the
terms of the Commission's installment plan as set forth in the Note and Security
Agreement executed by the licensee. Failure to comply with this condition will
result in the automatic cancellation of this authorization.
- --------------------------------------------------------------------------------
SCHEDULE 4.2
Mercury Consents
----------------
The execution, delivery and performance of the Agreement will or may
require the following consents, approvals and reviews:
1. The Federal Communications Commission.
Matters which could prevent Mercury from consummating the Transactions
include:
A. Amarillo Celltelco and High Plains Wireless L.P. v. William M.
Mounger, II, E.B. Martin, Jr., Jerry Sullivan, Jr., Mercury Southern,
LLC and Mercury PCS II, LLC; No. 83, 268-A in the 47th District Court
in and for Potter County, Texas.
B. Applications for Review filed by High Plains Wireless, L.P.: In re
Application of Mercury PCS II, LLC for Facilities in the Broadband
Personal Communications Services in the D, E and F Blocks, Federal
Communications Commission File Numbers 00114CWL97, et al.
C. United States Department of Justice, Antitrust Division, Washington,
D.C.; Mercury PCS II, LLC, Civil Investigative Demand No. 16337.
SCHEDULE 4.3
Mercury Litigation
------------------
See Items A-C on Schedule 4.2.
SCHEDULE 4.6
Mercury FCC Proceedings
-----------------------
See Items A-C on Schedule 4.2.
SCHEDULE 5.2
Company Consents
----------------
The execution, delivery and performance of the Agreement will or may
require the following consents, approvals and reviews:
1. The Federal Communications Commission.
EXHIBIT A
---------
_____________, 1998
TeleCorp PCS, Inc.
1110 N. Glebe Road, Suite 300
Arlington, VA 22201
Ladies and Gentlemen:
We have acted as counsel to Mercury PCS II, LLC, a Mississippi limited liability
company ("Mercury") in connection with the closing (the "Closing") under the
------- -------
License Acquisition Agreement dated as of February , 1998 (the "License
-------
Acquisition Agreement") by and between Mercury and TeleCorp PCS, Inc. a
- ---------------------
Delaware corporation (the "Company"). This opinion is furnished to you pursuant
-------
to Section 72 of the License Acquisition Agreement. Capitalized terms used in
this opinion which are defined in the License Acquisition Agreement shall have
the meanings ascribed to them in the License Acquisition Agreement, unless
otherwise defined in this opinion.
In connection with this opinion, we have examined the Certificate of Formation
and Limited Liability Company Agreement of Mercury and the limited liability
company proceedings taken by Mercury in connection with the Transaction
Documents (defined below). We have also examined executed copies or photocopies
of executed copies of the following documents:
1. the License Acquisition Agreement,
2. the Restated Certificate and Restated Bylaws,
3. the Stockholders Agreement;
4. the instruments of assignment referred to in Section 32 of
the License Acquisition Agreement (the "Instruments of
--------------
Assignment");
----------
5. the opinion of Brown & Wood LLP (the "New York Counsel Opinion"),
------------------------
a copy of which is attached as Exhibit A; and
---------
6. such other documents records and papers as we have deemed
necessary and relevant as a basis for this opinion.
The specific documents listed at I through 4 above are collectively referred to
herein as the "Transaction Documents".
---------------------
We have examined originals or copies of such certificates, documents, records,
agreements and instruments and have made such investigations of law and fact as
we have deemed necessary to
TeleCorp PCS, Inc.
______________,1998
Page 6
render this opinion. To the extent we deem proper, we have relied as to certain
factual matters on representations made in the Transaction Documents and oral or
written statements, letters or certificates of public officials or the manager
and/or members of Mercury. For the opinion of good standing of Mercury we have
relied solely upon the Certificate of Existence on Mercury issued by the
Mississippi Secretary of State on February _____,1998.
In each place where the phrase 'to our knowledge" or like references appear,
this shall mean to the best of our knowledge after due inquiry and
investigation. Due inquiry and investigation shall include only (i) discussions
inquiries and conferences occurring in connection with our representation of
Mercury, (ii) reviews of certain limited liability company records, documents
and proceedings of Mercury, and (iii) reviews of our files, relating to Mercury,
and shall not imply any independent verification of any factual matter of which
we became aware as a result of such discussions, inquiries, conferences and
reviews.
As used herein, the term "Applicable Laws" means the General Corporation Law of
---------------
the State of Delaware and the laws, rules and regulations of the State of
Mississippi, of the State of New York, and of the United States, and
"Governmental Authorities" means any Mississippi, New York, Delaware or federal
------------------------
executive, legislative, judicial, administrative or regulatory body.
All opinions expressed in this letter are subject in their entirety to the
following qualifications and assumptions and the qualifications and assumptions
set forth in the New York Counsel Opinion:
(i) We have assumed the authenticity of all documents submitted to
us as originals, the genuineness of all signatures, the legal capacity of
natural persons and the conformity to originals of all documents submitted to us
as copies
(ii) Although certain of our attorneys are qualified to practice in
states other than Mississippi we express no opinion regarding matters which may
be governed by any laws other than the Applicable Laws. In this regard, we note
that the License Acquisition Agreement and the Instruments of Assignment are to
be governed by the laws of the State of New York. With respect to the opinions
expressed in Paragraphs 4, 5 and 6 below which involve matters governed by or
concerning the laws of the State of New York, we have, with your permission
relied entirely and exclusively on the New York Counsel Opinion.
(iii) We express no opinion as to (i) matters arising under or
governed by the Communications Act of 1934, as amended, or the rules and
regulations of the Federal Communications Commission (the "FCC") promulgated
---
thereunder, (ii) the public service or public utilities laws, rules or
regulations of any jurisdiction, (iii) the antitrust or similar laws of the
United States or any other jurisdiction, (iv) the franchise or similar laws of
the United States or any other jurisdiction, or (v) the laws of any municipality
or other local agency within any state.
TeleCorp PCS, Inc.
______________,1998
Page 7
(iv) We have assumed that the transactions contemplated by the
Transaction Documents will be effected in the future in accordance with the
terms thereof.
(v) We have assumed that each of the parties (other than Mercury)
has the full power, authority and legal right to enter into and perform its
obligations under each of the Transaction Documents to which it is a party, and
has duly authorized, executed and delivered the same, and that each such
agreement or instrument is its valid and binding obligation, enforceable against
it in accordance with its terms. We express no opinion as to the effect on the
opinions expressed herein of (i) the compliance or non-compliance of any party
(other than Mercury) to the Transaction Documents with any state, federal or
other laws or regulations applicable to them, (ii) the regulatory status or the
name of the business of any party to the Transaction Documents (other than
Mercury) or (iii) the applicability or effect of any fraudulent transfer or
similar law on the Transaction Documents or any transactions contemplated
thereby.
(vi) We have assumed that all parties will in all respects act in
good faith in a commercially reasonable manner and in compliance with applicable
federal and state laws and authority.
Based solely upon and in reliance on the documents and statements referred to
above, and subject to the assumptions, qualifications and limitations set forth
or incorporated herein, we are of the opinion that:
1. Mercury is duly organized, validly existing and in good
standing under the laws of the State of Mississippi.
2. Mercury has all requisite limited liability company power
to own, lease and operate its properties and to carry on its business as
now being conducted, and to execute and deliver and perform its
obligations under the Transaction Documents to which it is a party,
including the assignment to the Company of the Mercury Licenses, and in
each case to engage in the respective Transactions.
3. The execution, delivery and performance by Mercury of each
of the Transaction Documents to which it is a party, and the consummation
of the Transactions, including the Mercury License Transfer, have been
duly authorized by all necessary limited liability company action on the
part of Mercury and its members and no other proceedings on its part or
the part of its members is necessary to authorize the Transaction
Documents or to consummate the Transactions.
4. Each Transaction Document to which Mercury is a party has
been duly executed and delivered by Mercury and constitutes the valid and
binding obligation of Mercury, enforceable against Mercury in accordance
with its terms, subject to the following qualifications:
TeleCorp PCS, Inc.
______________,1998
Page 8
a. the enforceability of the Transaction Documents may be
limited by bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or other similar laws affecting generally the
enforcement of creditors' rights.
b. our opinion is subject to limitations on the enforceability
of any rights to contribution or indemnification provided for in any
of the Transaction Documents which are violative of the public policy
underlying any law, rule or regulation (including any federal or state
securities law or regulation).
c. no opinion is expressed as to the enforceability of
provisions relating to restrictive covenants, waiver of remedies (or
the delay or omission of enforcement thereof), disclaimers, liability
limitations with respect to third parties, releases of legal or
equitable rights, or discharges of defenses.
d. the enforceability of the Transaction Documents is subject to
and may be affected by general principles of equity (regardless of
whether considered in a proceeding in equity or at law) including, but
not limited to, the availability of specific performance.
e. we have assumed there are no oral or written modifications of
or amendments to the Transaction Documents and there has been no
waiver of any of the provisions of these documents, by actions or
conduct of the parties or otherwise.
5. Except as set forth in the Transaction Documents (including by
reference to a schedule of exhibit), neither the execution, delivery and
performance by Mercury of the Transaction Documents to which it is a party,
nor the consummation by Mercury of the Transactions, including the Mercury
License Transfer will (a) conflict with any provision of the organizational
documents of Mercury; (b) contravene any provision of Applicable Law, or
(c) require any Consent on the part of any Governmental Authority, except,
in the case of clauses (b) and (c) hereof, where such conflict or
contravention, or the failure to obtain or give such Consent, would not
have a Material Adverse Effect on Mercury or materially adversely affect
the Transactions.
6. The License Acquisition Agreement and the Instruments of
Assignment are in form sufficient to effect the Mercury License Transfer.
We express no opinion, however, as to the nature or extent of Mercury's
rights in, or title to, the Mercury Licenses or any other property
purported to be transferred by the License Acquisition Agreement or the
Instruments of Transfer.
TeleCorp PCS, Inc.
______________,1998
Page 9
This opinion is for the benefit of and may be relied upon only by, you in
connection with the Transaction Documents and nay not be relied upon by any
third person, reproduced or used for any other purpose without our prior written
consent. You have not requested us to update our opinion, and we will not do so
unless you request us to do so on a periodic basis with the consent of Mercury
.
Yours sincerely,
Exhibit B
---------
Opinion Letter Of FCC Counsel To Mercury PCS Corporation
_______________, 1998
TeleCorp PCS, Inc.
1110 N. Glebe Road
Suite 300
Arlington, Virginia 22201
Dear Sir or Madame:
We have acted as special Federal Communications Commission ("FCC") counsel
for Mercury PCS II, L.L.C. ("Mercury") in connection with the License
Acquisition Agreement (the "Agreement") dated as of __________, 1998 between
Mercury and TeleCorp PCS, Inc. ("TeleCorp"). This opinion is being furnished
to you pursuant to Section 7.2(d) of the Agreement. Except as otherwise
specified, capitalized terms used in this opinion which are defined in the
Agreement are used herein with the same meaning.
This opinion is governed by, and shall be interpreted in accordance with,
the Legal Opinion Accord of the ABA Section of Business Law (1991) and the
Report of the Subcommittee on Legal Opinions of the Transactional Practice
Committee of the Federal Communications Bar Association (1996). As a
consequence, it is subject to a number of qualifications, exceptions,
definitions, limitations on coverage and other limitations, all as more
particularly described in the Accord, and this opinion should be read in
conjunction therewith.
As special FCC counsel to Mercury, we have represented Mercury before the
FCC. This opinion is limited strictly to matters arising under the
Communications Act of 1934, as amended (the "Act"), and the published rules,
regulations and policies of the FCC (collectively "Communications Laws) , all as
applicable to Mercury. We express no opinion with respect to any other law,
statute, rule, regulation, ordinance, decision, judgment, decree, legal
requirement, or legal authority. This opinion should not be construed to render
an opinion on any matter of state law with respect to Mercury or its operations,
or on the validity of the issuance of any securities, or on the lawful
procedures for perfection of security interests.
In connection with this opinion, we have examined such records, documents,
certificates, and other instruments of record in the publicly available files of
the FCC ("Public File") on ___________, 1998, and have made such investigations
of law as we deem necessary to render this opinion. (Collectively our
investigation described above undertaken to render this opinion is 'Our
Inquiry.") In making Our Inquiry, we have assumed: (i) the genuineness of all
signatures (other than those of representatives of Mercury) appearing on all
documents: (ii) the legal capacity of all persons executing documents to do so;
(iii) the authenticity and completeness of documents submitted to us for our
examination, whether or not they have been submitted to us as originals: (iv)
the conformity to authentic original documents of all documents
submitted to us as certified, conformed, facsimile, or photostatic copies; (v)
the accuracy and completeness of all records made available to us by Mercury and
by the FCC, except as otherwise expressly stated herein; (vi) the due
authorization of the execution, delivery, and performance of the Agreement; and
(vii) the validity and binding effect of the Agreement upon the parties thereto.
As to various matters of fact in connection with this opinion, we have
relied solely upon Our Inquiry as described herein. No inference as to our
knowledge of the existence or nonexistence of facts, other than facts of which
we have obtained actual knowledge as a result of Our Inquiry, should be drawn
from the fact of our representation of Mercury as special FCC counsel.
When used in this opinion, the term "our knowledge," or some similar
phrase, refers to the actual current knowledge of the attorneys currently in
this firm who have been actively involved in Mercury's representation. Whenever
our opinion with respect to the existence or nonexistence of facts is qualified
by the phrase "to our knowledge," or some similar phrase, it is intended to
indicate that no information has come to the attention of those attorneys in the
course of our representation that would give them actual knowledge that our
opinion with respect to the existence or nonexistence of any facts is
inaccurate.
Whenever our opinion is qualified by the phrase "after Our Inquiry" or some
similar phrase, it is intended to indicate that we undertook Our Inquiry as
described herein, but did not undertake any independent investigation or
evaluation to confirm the accuracy or completeness of the responses of Mercury
or FCC to Our Inquiry or any on-site field inspection of Mercury or its
facilities, and have relied fully on Mercury's descriptions of its facilities in
the Agreement. Moreover, a field inspection of Mercury's facilities is not
within the scope of our professional responsibility or expertise as attorneys
and we do not make such inspections, including but not limited to inspection of
the physical condition of Mercury's facilities or whether actual operation of
these facilities is in compliance with legal, regulatory or technical standards
which may be
applicable. The phrase "to our knowledge" or like language includes the
limitation expressed in this paragraph with respect to the fact that we have
conducted no field inspection of Mercury's facilities.
Based upon the foregoing, it is our opinion that:
1. Mercury is the legal holder of the Mercury Licenses attached
to Schedule I of the Agreement. Each of the PCS Licenses is valid and is in full
force and effect. With regard to the Mercury Licenses, Mercury has submitted to
the FCC all required material documents, applications and reports required
pursuant to FCC Rules and is in compliance with respect to the operation of the
Mercury Licenses in all material respects.
2. Except for those matters set forth in Schedule II, there is
not pending, nor to the best of our knowledge, threatened against Mercury or the
Mercury Licenses, any application, action, petition, objection or other
pleading, or any proceeding pending at the FCC which questions or contests the
validity of, or seeks the revocation, non-renewal or suspension of, or the
imposition of any fine or forfeiture on, any of the Mercury Licenses or which
seeks modification of any of the Mercury Licenses in any case which would have a
material adverse effect on the ability of Mercury to consummate the transactions
contemplated by the Agreement.
3. Except for those matters set forth in Schedule II, all FCC
consents required in order to consummate the transactions contemplated by the
Agreement have been obtained and all such consents are Final orders.
4. Except for those matters set forth in Schedule II, there in
not now pending at the FCC any action, petition or proceeding, nor to the best
of our knowledge is any such matter threatened, against Mercury which could
cause Mercury to be ineligible to hold the Mercury Licenses.
This opinion in being provided solely for your use and benefit in
connection with the Agreement. It may not be quoted, copied, delivered to, or
relied upon by anyone other than you and your senior lenders directly involved
in connection with the Agreement and for no other purpose without the express,
written consent of this firm. This opinion is effective only as of the date
hereof and is based on statutory laws and judicial decisions that are effective
on the date hereof; we do not opine with respect to any law, regulation, rule,
or governmental policy which may be enacted, adopted, or become effective after
the date hereof; nor do we undertake any professional responsibility to advise
you as to any subsequent event either in the nature of a change of fact or law,
as to which we may become aware.
This opinion should not be assumed to state general principles of law
applicable to transactions of this kind. Where opinions are expressed concerning
the financial effect or possible effect of any event upon Mercury or any aspect
of its operations, you should be advised that we have no particular expertise in
any such matter and you rely on such opinion at your own risk.
Very truly yours,
LUKAS, NACE, GUTIERREZ, & SACHS
CHARTERED
By:______________________________
Thomas Gutierrez
Principal
EXHIBIT C
[Letterhead of Counsel to the Company]
Mercury PCS II, LLC
Ladies and Gentlemen:
We have acted as counsel for TeleCorp PCS, Inc., a Delaware
corporation (the "Company"), in connection with the closing (the "Closing")
under the License Acquisition Agreement, dated as of May 15, 1998 (the "License
Acquisition Agreement"), by and between the Company and Mercury PCS II, LLC, a
Mississippi limited liability company ("Mercury"). Capitalized terms used herein
without definition shall have the respective meanings ascribed to them in the
License Acquisition Agreement. This opinion is being delivered pursuant to
Section 7.3 of the License Acquisition Agreement.
In connection herewith, we have examined executed copies or
photocopies of executed copies of the following documents (collectively, the
"Transaction Documents"):
1. the License Acquisition Agreement;
2. the Restated Certificate and Restated Bylaws; and
3. the Stockholders Agreement.
In giving this opinion, we have examined and relied on the
representations as to factual matters contained in or made pursuant to the
Transaction Documents, and have also examined and relied upon the originals, or
copies certified or otherwise identified to our satisfaction, of such corporate
records, documents, certificates and other instruments, and have made such other
investigations, as in our judgment are necessary or appropriate to enable us to
render the opinions expressed below with respect to our opinion as to whether
the Company and its Subsidiaries are in good standing in a particular
jurisdiction, we have relied on good standing or similar certificates issued on
or prior to the date hereof by the Office of the Secretary of State or similar
office of such jurisdictions.
In our examinations, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such copies. We have also assumed that each of
the parties (other than the Company) (i) has the full power, authority and legal
right to enter into and perform its obligations under each of the Transaction
Documents to which it is a party, (ii) has duly authorized, executed and
delivered the same, (iii) has complied with the terms of the Transaction
Documents, and (iv) that each such agreement or instrument is its valid and
binding obligation, enforceable against it in accordance with its terms. We
express no opinion as to the effect on the opinions expressed herein of (i) the
compliance or non-compliance of any party (other than the Company) to the
Transaction Documents with any state, federal or other laws or regulations
applicable to them, (ii) the regulatory status or the nature of the business of
any party to the Transaction Documents (other than the Company) or (iii) the
applicability or effect of any fraudulent transfer or similar law on the
Transaction Documents or any transactions contemplated thereby.
As used herein, the term "Applicable Laws" means the General
Corporation Law of the State of Delaware and the laws, rules and regulations of
the State of New York and of the United States; and "Governmental Authorities"
mean any New York, Delaware or federal executive, legislative, judicial,
administrative or regulatory body. Whenever our opinion herein is indicated to
be based upon our knowledge of any matter or issue, it is intended to signify
that, in the course of our preparation of this opinion and representation of the
Company in connection with its execution and delivery of the Transaction
Documents, without having made any special investigation, none of the attorneys
who were involved in the preparation of the opinion, or such representation of
the Company has acquired actual knowledge of the matter or issue.
Based upon the foregoing, subject to the assumptions, qualifications
and limitations stated herein, and relying as to factual matters solely upon
statements of fact contained in the documents that we have examined, we are of
the opinion that:
1. Each of the Company and each of its Subsidiaries is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation.
2. Each of the Company and each of its Subsidiaries has all
requisite corporate power to own, lease and operate its properties and to carry
on its business as now being conducted and as proposed to be conducted, and in
the case of the Company to execute, deliver and perform its obligations under
the Transaction Documents to
which it is a party, including the issuance of the Preferred Stock and the
Common Stock, and in each case to engage in the respective Transactions.
3. The execution, delivery and performance by the Company of each of
the Transaction Documents to which it is a party, and the consummation of the
Transactions, have been duly authorized by all necessary corporate action on the
part of the Company and its stockholders and no other proceedings on its part or
the part of its stockholders is necessary to authorize the Transaction Documents
or to consummate the Transactions.
4. Each Transaction Document to which the Company is a party has
been duly executed and delivered by the Company and constitutes the valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms, subject to the following qualifications:
a. enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, arrangement, moratorium or other similar laws affecting
creditors' rights generally and by general principles of equity (regardless
of whether enforcement is sought in equity or at law);
b. our opinion is subject to limitations on the enforceability of any
rights to contribution or indemnification provided for in any of the
Transaction Documents which are violative of the public policy underlying
any law, rule or regulation (including any federal or state securities law
or regulation); and
c. no opinion is expressed as to the enforceability of provisions
relating to restrictive covenants, waiver of remedies (or the delay or
omission of enforcement thereof), disclaimers, liability limitations with
respect to third parties, releases of legal or equitable rights, or
discharges of defenses.
5. Except as set forth in the Transaction Documents (including by
reference to a schedule or exhibit), neither the execution, delivery and
performance by the Company of the Transaction Documents, nor the consummation of
the Transactions, will (a) conflict with any provision of the Company's
organizational documents, (b) contravene any provision of Applicable Law; or (c)
require any Consent on the part of any Governmental Authority other than those
set forth on Schedule 5.2 to the License Acquisition Agreement, except, in the
case of clauses (b) and (c) hereof, where such contravention, or the failure to
obtain or give such Consent, would not have a Material Adverse Effect on the
Company or materially adversely affect the Transactions or the operation of the
Company's business after the Closing Date.
6. The shares of Preferred Stock and Common Stock being delivered
pursuant to the License Acquisition Agreement will be duly authorized, validly
issued, fully paid and nonassessable, and will be free of any Liens caused or
created by the Company, except as set forth in the Stockholders Agreement and
the Restated Certificate. The shares of Common Stock or Preferred Stock issued
upon conversion or exchange of the Preferred Stock, when issued pursuant to the
terms of the Preferred Stock, will be validly issued, fully paid and
nonassessable, and will be free of any Liens caused or created by the Company,
except as set forth in the Stockholders Agreement and the Restated Certificate.
The foregoing opinions are limited to the laws of the State of New
York, the General Corporation Law of the State of Delaware and the Federal laws
of the United States of America, except that we express no opinion as to (i)
matters arising under or governed by the Communications Act of 1934, as amended,
or the rules and regulations of the Federal Communications Commission (the
"FCC") promulgated thereunder, (ii) the public service or public utilities laws,
rules or regulations of any jurisdiction, (iii) the antitrust or similar laws of
the United States or any other jurisdiction, (iv) the franchise or similar laws
of the United States or any other jurisdiction, and (v) matters arising under or
governed by the Small Business Investment Company Act of 1958, as amended, or
the rules and regulations of the Small Business Administration promulgated
thereunder, or (vi) the laws of any municipality or other local agency within
any state. We are members of the bar of the State of New York, and, as such, do
not purport to be experts on laws other than the laws of the State of New York,
the General Corporation Law of the State of Delaware and certain Federal laws of
the United States.
This opinion is being furnished to you in connection with the Closing
occurring today. This opinion is solely for your benefit and is not to be used,
circulated, quoted or otherwise referred to for any other purpose without our
prior consent. We assume no obligation to update or supplement this opinion to
reflect any facts or circumstances that may hereafter come to our attention or
any changes in facts or law that may hereafter occur.
Very truly yours,
EXHIBIT D
[FORM OF ASSIGNMENT]
INSTRUMENT OF ASSIGNMENT
INSTRUMENT OF ASSIGNMENT from Mercury PCS II, LLC, a Mississippi
limited liability company ("Assignor"), to [NAME OF ASSIGNEE], a Delaware
corporation (the "Company").
Assignor and the Company have executed and delivered a License
Acquisition Agreement, dated as of May 15, 1998 (the "Acquisition Agreement").
Capitalized terms used herein without definition shall have the respective
meanings assigned to them in the Acquisition Agreement.
1. Pursuant to Section 2.1 of the Acquisition Agreement, for valuable
consideration, receipt of which is hereby acknowledged, Assignor does hereby
assign, transfer and convey to the Company, its successors and assigns forever,
the Mercury Licenses,
TO HAVE AND TO HOLD, all and singular, the assets and properties
hereby assigned, conveyed, transferred and delivered or intended so to be unto
the Company and its successors and assigns to and for its or their use forever.
2. Nothing contained in this Instrument of Assignment shall in any
way supersede, modify, replace, amend, change, rescind, waive, exceed, expend,
enlarge or in any way affect the provisions, including the warranties,
covenants, agreements, conditions, representations or, in general any of the
rights and remedies, and any of the obligations and indemnifications of Assignor
or the Company set forth in the Acquisition Agreement, including without
limitation any limits on indemnification specified therein. This Instrument of
Assignment is intended only to effect the transfer of a certain interest the
transfer of which is contemplated in the Acquisition Agreement and shall be
governed in accordance with the terms and conditions of the Acquisition
Agreement.
3. This Instrument of Assignment is (i) executed pursuant to the
Acquisition Agreement and may be executed in counterparts, each of which as so
executed shall be deemed to be an original, but all of which together shall
constitute one instrument and (ii) shall be governed by and in accordance with
the internal laws of the State of New York, without regard to the principles of
conflicts of law thereof.
IN WITNESS THEREOF, Assignor has caused this Instrument of Assignment
to be duly executed and delivered as of this ____ day of ________, 199_.
MERCURY PCS II, LLC
By:______________________
Name:
Title:
Accepted:
[NAME OF ASSIGNEE]
By:___________________________
Name:
Title: