EXHIBIT 10.3.1
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_________________________________________________________________
SECURITIES PURCHASE AGREEMENT
by and among
AT&T WIRELESS PCS INC.,
TWR CELLULAR, INC.,
CASH EQUITY INVESTORS,
TELECORP INVESTORS,
MANAGEMENT STOCKHOLDERS
and
TELECORP PCS, INC.
Dated as of January 23, 1998
__________________________________________________________________
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS............................................................................................ 2
ARTICLE II CONTRIBUTIONS; PURCHASE AND SALE OF SECURITIES; CERTAIN RESTRICTIONS ON TRANSFER....................... 8
2.1 AT&T PCS Contributions................................................................................. 8
2.2 Cash Equity Investor Contributions..................................................................... 9
2.3 TeleCorp Investor Contributions........................................................................ 9
2.4 Management Stockholder Contributions................................................................... 10
2.5 Purchase and Sale of Securities at Closing............................................................. 10
2.6 Additional Purchase by Cash Equity Investors........................................................... 10
2.7 Restrictive Legends.................................................................................... 10
2.8 Use of Proceeds........................................................................................ 11
ARTICLE III CLOSING................................................................................................ 11
3.1 Time and Place of Closing.............................................................................. 11
3.2 Closing Actions and Deliveries......................................................................... 11
3.3 Payment of Transfer Taxes.............................................................................. 13
3.4 Issuance of Additional Shares.......................................................................... 13
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASERS........................................................... 13
4.1 Organization; Power and Authority...................................................................... 13
4.2 Consents; No Conflicts................................................................................. 14
4.3 Litigation............................................................................................. 15
4.4 FCC Compliance......................................................................................... 15
4.5 Brokers................................................................................................ 15
4.6 AT&T PCS Licenses...................................................................................... 15
4.7 Capital Commitment..................................................................................... 16
4.8 No Distribution........................................................................................ 16
4.9 Investor Acknowledgments............................................................................... 16
4.10 Institutional Investors................................................................................ 17
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE COMPANY, THE TELECORP INVESTORS AND THE MANAGEMENT STOCKHOLDERS.. 17
5.1 Organization, Power and Authority...................................................................... 17
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TABLE OF CONTENTS
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5.2 Consents; No Conflicts................................................................................. 18
5.3 Litigation............................................................................................. 19
5.4 FCC Compliance......................................................................................... 19
5.5 Brokers................................................................................................ 19
5.6 Newly Formed Company................................................................................... 19
5.7 Capitalization......................................................................................... 19
5.8 Shares................................................................................................. 20
5.9 No Undisclosed Liabilities; Subsidiaries............................................................... 20
5.10 Offering of Securities................................................................................. 20
5.11 Loan Documents......................................................................................... 21
5.12 Minimum Build-Out Plan................................................................................. 21
5.13 Small Business Matters................................................................................. 21
5.14 No Distribution........................................................................................ 22
5.15 Investor Acknowledgments............................................................................... 22
5.16 Representations as to TeleCorp......................................................................... 23
ARTICLE VI COVENANTS.............................................................................................. 25
6.1 Consummation of Transactions........................................................................... 25
6.2 Confidentiality........................................................................................ 26
6.3 Retained Licenses...................................................................................... 27
6.4 No Further Commitment.................................................................................. 27
6.5 Use of Proceeds........................................................................................ 28
6.6 SBIC Regulatory Provisions............................................................................. 28
6.7 Regulatory Compliance Cooperation...................................................................... 28
6.8 Permitted Pre-Closing Expenditures..................................................................... 29
6.9 Certain Covenants...................................................................................... 30
6.10 Employment Agreements.................................................................................. 31
6.11 Restricted Stock Plan.................................................................................. 31
ARTICLE VII. CLOSING CONDITIONS..................................................................................... 32
7.1 Conditions to Obligations of All Parties............................................................... 32
7.2 Conditions to Obligations of Each Party................................................................ 32
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TABLE OF CONTENTS
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7.3 Conditions to the Obligations of the Purchasers........................................................ 34
ARTICLE VIII SURVIVAL AND INDEMNIFICATION........................................................................... 34
8.1 Survival............................................................................................... 34
8.2 Indemnification by the Purchasers...................................................................... 35
8.3 Indemnification by the Management Stockholders......................................................... 35
8.4 Indemnification by the Company......................................................................... 36
8.5 Indemnification by the TeleCorp Investors and the Management Stockholders.............................. 36
8.6 Procedures............................................................................................. 36
8.7 Registration Rights.................................................................................... 38
8.8 Limit on Indemnity..................................................................................... 38
ARTICLE IX TERMINATION............................................................................................ 38
9.1 Termination............................................................................................ 38
9.2 Effect of Termination.................................................................................. 39
ARTICLE X MISCELLANEOUS PROVISIONS............................................................................... 39
10.1 Amendment and Modification............................................................................. 39
10.2 Waiver of Compliance; Consents......................................................................... 39
10.3 Notice................................................................................................. 39
10.4 Expenses............................................................................................... 41
10.5 Parties in Interest; Assignment........................................................................ 41
10.6 Applicable Law......................................................................................... 41
10.7 Counterparts........................................................................................... 42
10.8 Interpretation......................................................................................... 42
10.9 Entire Agreement....................................................................................... 42
10.10 Publicity.............................................................................................. 42
10.11 Specific Performance................................................................................... 42
10.12 Remedies Cumulative.................................................................................... 42
10.13 Authorized Agent of AT&T PCS........................................................................... 43
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Schedules
Schedule I -- Cash Equity Investors and Commitments
Schedule II-A -- TeleCorp Investors
Schedule II-B -- Management Stockholders
Schedule III-A -- AT&T PCS Licenses and TWR Licenses
Schedule III-B -- TeleCorp Licenses
Schedule IV -- Company Territory
Schedule V -- Securities
Schedule 1.1 -- Pre-Closing Expenditures
Schedule 2.1 -- Description of AT&T PCS Contributed and Retained
Licenses
Schedule 4.2 -- Purchaser Consents
Schedule 5.2 -- Company and Management Stockholder Consents
Schedule 5.12 -- Minimum Build-Out Schedule
Schedule 5.16(d) -- TeleCorp Financial Statements
Schedule 5.16(g) -- TeleCorp FCC Proceedings
Schedule 6.11 -- Restricted Stock Plan
Exhibits
Exhibit A -- Form of Management Agreement
Exhibit B -- Form of Network Membership License Agreement
Exhibit C -- Form of Resale Agreement
Exhibit D -- Form of Restated Bylaws
Exhibit E -- Form of Restated Certificate
Exhibit F -- Form of Roaming Agreement
Exhibit G -- Form of Stockholders Agreement
Exhibit H- I -- Form of Opinion of Counsel to AT&T PCS
Exhibit H-2 -- Form of Opinion of FCC Counsel to AT&T PCS
Exhibit I -- Form of Opinion of Counsel to Cash Equity Investors
Exhibit J- I -- Form of Opinion of Counsel to TeleCorp Investors
Exhibit J-2 -- Form of Opinion of FCC Counsel to TeleCorp Investors
Exhibit K- I -- Form of Opinion of Counsel to Company and Management
Stockholders
Exhibit K-2 -- Form of Opinion of FCC Counsel to Company and Management
Stockholders
Exhibit L -- Form of Pledge Agreement
Exhibit M -- Form of Assignment
Exhibit N -- Form of TeleCorp Charter Amendment
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SECURITIES PURCHASE AGREEMENT
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SECURITIES PURCHASE AGREEMENT, dated as of January 23, 1998, by and
among AT&T Wireless PCS Inc., a Delaware corporation ("AT&T PCS"), TWR Cellular,
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Inc., a Maryland corporation ("TWR"), the investors referred to on Schedule I
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(individually, a "Cash Equity Investor" and, collectively, the "Cash Equity
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Investors"), the investors listed on Schedule II-A (individually, a "TeleCorp
- --------- --------
Investor" and, collectively, the "TeleCorp Investors"), the individuals listed
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on Schedule II-B (individually, a "Management Stockholder" and, collectively,
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the "Management Stockholders") and TeleCorp PCS, Inc., a Delaware corporation
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(the "Company"). AT&T PCS, TWR, the Cash Equity Investors, and the TeleCorp
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Investors are sometimes referred to herein, individually, as a "Purchaser" and,
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collectively, as the "Purchasers."
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WHEREAS, AT&T PCS has been granted the PCS licenses described on
Schedule III-A (the "AT&T PCS Licenses");
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WHEREAS, TWR holds the PCS licenses described on Schedule III-A (the
"TWR Licenses");
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WHEREAS, TeleCorp Holding Corp., Inc., a Delaware corporation
("TeleCorp"), has been granted the PCS licenses described on Schedule III-B (the
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"TeleCorp Licenses");
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WHEREAS, the Management Stockholders organized the Company by the
filing of a Certificate of Incorporation (the "Original Certificate"), and as of
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the date hereof the Management Stockholders are the record and beneficial owners
of all of the issued and outstanding capital stock of the Company;
WHEREAS, the Management Stockholders have extensive experience and
expertise in the wireless telecommunications industry and have organized the
Company in order to construct and operate a mobile wireless telecommunications
system in the territory (the "Company Territory") described on Schedule IV;
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WHEREAS, each of the Purchasers wishes to acquire securities of the
Company in consideration of contributions of cash and/or other property to the
capital of the Company, and the Company wishes to accept such contributions and
issue securities to each of the Purchasers, all on the terms and subject to the
conditions herein set forth; and
WHEREAS, the parties wish to amend and restate the Original
Certificate in its entirety in order to reflect, among other things, the
authorization of the securities being issued hereunder, and the parties wish to
enter into certain agreements relating to the parties' rights and obligations in
connection with the Company;
NOW, THEREFORE, in consideration of the promises and the mutual
representations, warranties, covenants, conditions and agreements hereinafter
set forth, the parties agree as follows:
ARTICLE I
DEFINITIONS
As used herein, the following terms have the following meanings
(unless indicated otherwise, all Section and Article references are to Sections
and Articles in this Agreement, and all Schedule and Exhibit references are to
Schedules and Exhibits to this Agreement):
"Affiliate" means, with respect to any Person, any other Person that
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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 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.
"Aggregate Commitment" means, with respect to each Cash Equity
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Investor, the amount set forth opposite its name on Schedule I under the heading
"Aggregate Commitment."
"AT&T Contributed Licenses" has the meaning set forth in Section 2.1.
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"AT&T License Transfer" has the meaning set forth in Section 3.2(a).
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"AT&T Party" means AT&T PCS, TWR and each Affiliate of AT&T PCS that
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is a party to any of the Related Agreements.
"AT&T PCS" has the meaning set forth in the preamble.
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"AT&T PCS Licenses" has the meaning set forth in the first recital.
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"AT&T PCS Purchased Licenses" mean the PCS licenses that the Company
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has agreed to purchase from AT&T PCS pursuant to the terms of the License
Purchase Agreement.
"AT&T Retained Licenses" has the meaning set forth in Section 2.1.
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"Bridge Notes" means promissory notes of TeleCorp issued to certain
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Cash Equity Investors.
"Cash Equity Investor" has the meaning set forth in the preamble.
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"Cash Equity Investor Contributions" means the Aggregate Commitments,
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The Initial Capital Contributions and the additional cash contributions in
respect of the Supplemental Commitments and the Unfunded Commitments, in each
case of the Cash Equity Investors.
"Class C Common Stock" means the Class C Common Stock, par value $.01
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per share, of the Company.
"Class D Common Stock" means the Class D Common Stock, par value $.01
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per share, of the Company.
"Claim" has the meaning set forth in Section 8.6(a).
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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, Voting Preference Stock, the
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Tracked Common Stock, the Voting Common Stock and the Non-Voting Common Stock.
"Company" has the meaning set forth in the preamble.
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"Company Territory" has the meaning set forth in the fifth recital.
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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
--------
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.
"Contributions" means, collectively, the AT&T Contributed Licenses,
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the TeleCorp Equity Interests, and the Cash Equity Investor Contributions.
"Credit Agreement" means the agreement among the Company, the lenders
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and the agents referred to therein, and any other parties who become lenders or
agents thereunder, to be dated as of the Closing Date, to provide a credit
facility having aggregate commitments of at least S435 million, as the same may
be amended, modified or supplemented in accordance with the terms thereof.
"Credit Documents" means the Credit Agreement and all agreements,
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instruments and documents executed and delivered pursuant thereto, as the same
may from time to time be amended, modified or supplemented in accordance with
the terms thereof.
"Employment Agreements" has the meaning set forth in Section 6.10.
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"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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"Financing" has the meaning set forth in the SBIC Regulations.
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"Governmental Authority" means a Federal, state or local court,
----------------------
legislature, governmental agency (including, without limitation, the United
States Department of Justice), commission or regulatory or administrative
authority or instrumentality.
"HSR Act" means the 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 8.6(a).
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"Indemnifying Party" has the meaning set forth in Section 8.6(a).
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"Initial Cash Contribution" means, with respect to each Cash Equity
-------------------------
Investor, the amount set forth opposite its name on Schedule I under the heading
"Initial Cash Contribution."
"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.
"License Purchase Agreement" means the License Purchase Agreement,
--------------------------
dated as of the date hereof, between AT&T PCS and the Company, as the same may
be amended, modified or supplemented in accordance with the terms thereof.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
----
charge, security interest, right of first refusal or right of others therein, or
encumbrance of any nature whatsoever in respect of such asset.
"Losses" has the meaning set forth in Section 8.2.
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"Management Agreement" means the Management Agreement between the
--------------------
Company and TeleCorp Management Corp. I, L.L.C., in substantially the form of
Exhibit A, to be dated as of the Closing Date, as the same may be amended,
modified or supplemented in accordance with the terms thereof.
"Management Stockholder" has the meaning set forth in the preamble.
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"Material Adverse Effect" means a material adverse effect on the
-----------------------
business, financial condition, assets, liabilities or results of operations or
prospects of the Person specified.
"Network Membership License Agreement" means the Network Membership
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License Agreement between the Company and AT&T Corp., in substantially the form
of Exhibit B, to be dated as of the Closing Date, as the same may be amended,
modified or supplemented in accordance with the terms thereof.
"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
-----------------------
Common Stock, par value $.01 per share.
"Old Common Stock" has the meaning set forth in Section 5.7.
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"Original Certificate" has the meaning set forth in the fourth
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recital.
"Permitted Liens" means (i) Liens arising in favor of sellers or
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lessors for indebtedness and obligations incurred to purchase or lease fixed or
capital assets, provided that such liens secure only the indebtedness and
obligations created thereunder and are limited to the assets purchased or leased
pursuant thereto and the proceeds thereof; (ii) mechanic's and workmen's liens,
liens for taxes, assessments or other governmental charges; (iii) pledges or
deposits to secure obligations under workmen's compensation, unemployment
insurance or social security laws or similar legislation; (iv) deposits to
secure performance or payment bonds, bids, tenders, contracts, leases,
franchises or public and statutory obligations required in the ordinary course
of business; (v) deposits to secure surety, appeal or custom bonds required in
the ordinary course of business; and (vi) statutory landlord liens, in each case
to the extent incurred in accordance with the terms of Section 6.8.
"Person" means an individual, corporation, partnership, limited
------
liability company, association, joint stock company, Governmental Authority,
business trust, unincorporated organization, or other legal entity.
"Pre-Closing Advances" has the meaning set forth in Section 6.8(b).
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"Pre-Closing Commitment" has the meaning set forth in Section 6.8(a).
----------------------
"Pre-Closing Expenditures" means expenditures of the nature and up to
-------------------------
the amount set forth on Schedule 1.1; provided, that such expenditures shall be
for general working capital or assets, properties or rights that are necessary
or advisable, in the good faith
determination of the Company, in order to facilitate the construction of PCS
systems in the geographical areas within the portion of the Company Territory
covered by the AT&T PCS Licenses and the TWR Licenses.
"Pre-Closing Notes" has the meaning set forth in Section 6.8(b).
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"Preferred Stock" means the shares of Series A Preferred Stock, Series
---------------
C Preferred Stock, Series D Preferred Stock, Series E Preferred Stock and Series
F Preferred Stock being issued hereunder.
"Purchaser" has the meaning set forth in the preamble.
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"Regulatory Problem" means, with respect to any SBIC Holder providing
------------------
Financing under this Agreement, any set of facts or circumstances wherein it has
been asserted by any governmental regulatory agency (or any SBIC Holder
reasonably believes in good faith that there is a substantial risk of such
assertion) that such SBIC Holder and its Affiliates are not entitled to hold, or
exercise any significant right with respect to, the Securities.
"Related Agreements" means the Management Agreement, Employment
------------------
Agreements, License Purchase Agreement, Network Membership License Agreement,
Resale Agreement, Roaming Agreement and Stockholders Agreement.
"Representatives" has the meaning set forth in Section 6.2(a).
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"Resale Agreement" means the Resale Agreement between the Company and
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AT&T Wireless Services, Inc., or an Affiliate thereof, in substantially the form
of Exhibit C, as the same may be amended, modified or supplemented in accordance
with the terms thereof.
"Restated Bylaws" means the Amended and Restated Bylaws of the
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Company, in the form of Exhibit D, to be adopted as of the 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 be filed with the
office of the Secretary of State of the State of Delaware on the Closing Date,
as the same may be amended, modified or supplemented in accordance with the
terms thereof.
"Roaming Agreement" means the Intercarrier Roamer Service Agreement
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between the Company and AT&T Wireless Services, Inc., in substantially the form
of Exhibit F to be dated as of the Closing Date, as the same may be amended,
modified or supplemented in accordance with the terms thereof.
"SBA" has the meaning set forth in Section 6.6(b).
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"SBA Compliance Documents" has the meaning set forth in 7.3(c).
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"SBIC" means a small business investment company licensed under the
----
SBIC Act.
"SBIC Act" means the Small Business Investment Company Act of 1958, as
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amended.
"SBIC Holder" means each Purchaser that is an SBIC.
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"SBIC Regulations" means the SBIC Act and the regulations issued
----------------
thereunder as set forth in 13 CFR 107 and 121, as amended.
"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.
"Section 8.4 Indemnified Party" has the meaning set forth in Section
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8.4.
"Section 8.5 Indemnified Party" has the meaning set forth in Section
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8.5.
"Securities" means the shares of Preferred Stock and Common Stock
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being issued hereunder, together with any shares of Preferred Stock or Common
Stock issued upon conversion of or delivered in substitution or exchange for any
of the foregoing.
"Securities Act" means the Securities Act of 1933, as amended.
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"Series A Preferred Stock" has the meaning set forth in Section 2.5.
------------------------
"Series C Preferred Stock" has the meaning set forth in Section 2.5.
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"Series D Preferred Stock" has the meaning set forth in Section 2.5.
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"Series E Preferred Stock" has the meaning set forth in Section 2.5.
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"Series F Preferred Stock" has the meaning set forth in Section 2.5.
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"Stockholders Agreement" means the Stockholders Agreement, by and
----------------------
among the Company, AT&T PCS, the Cash Equity Investors, the TeleCorp Investors
and the Management Stockholders, as stockholders, in substantially the form of
Exhibit G, to be dated as of the 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.
"Supplemental Closing" means the consummation by the Company or one of
--------------------
its wholly owned Subsidiaries of an acquisition of F-Block PCS Licenses in
respect of one million or more POPs (as defined in the Stockholders Agreement).
"Supplemental Commitment" means, with respect to each Cash Equity
-----------------------
Investor, the amount set forth opposite its name on Schedule I under the heading
"Supplemental Commitment."
"TeleCorp" has the meaning set forth in the third recital.
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"TeleCorp Charter Amendment" has the meaning set forth in Section
--------------------------
3.2(g).
"TeleCorp Equity Interest" means, with respect to each TeleCorp
------------------------
Investor and Management Stockholder, the equity interest(s) in TeleCorp
specified opposite his or its name on Schedule II-A and II-B, respectively.
"TeleCorp Financial Statements" has the meaning set forth in Section
-----------------------------
5.16(d).
"TeleCorp Investor" has the meaning set forth in the preamble.
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"TeleCorp Licenses" has the meaning set forth in the third recital.
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"Tracked Common Stock" means, collectively, the Class C Common Stock
--------------------
and the Class D Common Stock.
"Transactions" means the transactions contemplated by this Agreement
------------
and the Related Agreements.
"Transfer Taxes" has the meaning set forth in Section 3.3.
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"TWR" has the meaning set forth in the preamble.
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"TWR Licenses" has the meaning set forth in the second recital.
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"Unfunded Commitment" has the meaning set forth in Section 2.2.
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"Voting Common Stock" means the Class A Voting Common Stock, par value
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$.01 per share, of the Company.
"Voting Preference Stock" means the Voting Preference Stock, par value
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$.01 per share, of the Company.
ARTICLE II
CONTRIBUTIONS; PURCHASE AND SALE
OF SECURITIES; CERTAIN RESTRICTIONS ON TRANSFER
2.1 AT&T PCS Contributions. Upon the terms and subject to the conditions
hereof and in reliance upon the representations, warranties and agreements
herein contained: (a) AT&T PCS and TWR (as applicable) shall partition and
disaggregate each AT&T PCS License (excluding the AT&T PCS Purchased Licenses)
and each TWR License (other than the Little Rock, Arkansas PCS License which
shall be disaggregated only) to create, as more particularly described on
Schedule 2.1, (i) Licenses (the "AT&T Contributed Licenses") providing in the
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aggregate the right to use 20 MHz of authorized frequencies within the
geographic area covered by the AT&T Contributed Licenses, and (ii) Licenses (the
"AT&T Retained Licenses") providing in the aggregate the right to use the
----------------------
balance of the authorized frequencies within such geographic area and the right
to use the authorized frequencies outside of such geographic area (but within
the geographic area covered by the AT&T PCS Licenses and the TWR Licenses), and
(b) at the Closing, AT&T PCS and TWR (as applicable) shall contribute to the
capital of the Company (or one or more wholly owned Subsidiaries of the Company
designated by the Company) the AT&T Contributed Licenses.
2.2 Cash Equity Investor Contributions.
(a) Upon the terms and subject to the conditions hereof and in
reliance upon the representations, warranties and agreements herein contained:
(i) effective upon the Closing, each Cash Equity Investor hereby irrevocably
commits, severally and not jointly, to contribute to the capital of the Company
an amount equal to its Aggregate Commitment plus, if and only if the
Supplemental Closing occurs, an additional amount equal to its Supplemental
Commitment, and (ii) at the Closing, each Cash Equity Investor shall contribute
to the capital of the Company an amount equal to its Initial Cash Contribution
and the Company shall accept such capital contribution. Each Cash Equity
Investor shall contribute to the capital of the Company an additional amount
equal to the excess of its Aggregate Commitment over its Initial Cash
Contribution in the amounts and on the dates specified on Schedule I (or such
earlier dates as may be established in accordance with the terms of the
Stockholders Agreement); provided that, in all events, the aggregate amount of
the Initial Cash Contributions plus the additional capital contributions in 1998
shall be no less than the Company's "operating losses," determined in accordance
with generally accepted accounting principles, for the 1998 calendar year.
In addition, if and only if the Supplemental Closing occurs, each Cash
Equity Investor shall contribute to the capital of the Company supplemental
capital contributions in the amounts and on the dates specified in Schedule I
(or such other dates as may be established in accordance with the terms of the
Stockholders Agreement).
The obligation of each Cash Equity Investor to make such additional
cash contributions in respect of its Aggregate Commitment and Supplemental
Commitment in accordance with this Section 2.2 and Section 3.10 of the
Stockholders Agreement is sometimes referred to herein as the "Unfunded
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Commitment." Nothing herein shall be construed to require any Cash Equity
- ----------
Investor to make contributions in an aggregate amount in excess of its Aggregate
Commitment plus, if applicable, its Supplemental Commitment or later than the
third anniversary of the Closing Date.
(b) Each Cash Equity Investor acknowledges and agrees that, if the
Closing occurs, its obligation to make capital contributions to the Company
after the Closing Date in respect of its Unfunded Commitment constitutes an
irrevocable and unconditional obligation, and shall not be subject to
counterclaim, set-off, deduction or defense, or to abatement, suspension,
deferment, diminution or reduction for any reason whatsoever. By way of
amplification, and not in limitation of the foregoing, each Cash Equity Investor
further acknowledges and agrees to fulfill its obligations in respect of its
Unfunded Commitment regardless of any claims it may have against any other
Person (whether or not related to the Transactions) and regardless of the
existence or non-existence of any facts or circumstances (whether or not such
facts and circumstances existed on the date hereof or the Closing Date or were
then known by it).
2.3 TeleCorp Investor Contributions. Upon the terms and subject to the
conditions hereof and in reliance upon the representations, warranties and
agreements herein contained, at the Closing each TeleCorp Investor shall
contribute to the capital of the Company all of such TeleCorp Investor's right,
title and interest in and to its TeleCorp Equity Interest(s), which interests
are described on Schedule II-A.
2.4 Management Stockholder Contributions. Upon the terms and subject to
the conditions hereof and in reliance upon the representations, warranties and
agreements herein contained, at the Closing each Management Stockholder shall
contribute to the capital of the Company all of such Management Stockholder's
right, title and interest in and to all of his TeleCorp Equity Interest(s),
which interests are described on Schedule II-B.
2.5 Purchase and Sale of Securities at Closing. Upon the terms and subject
to the conditions hereof and in reliance upon the representations, warranties
and agreements herein contained, at the Closing, in consideration of the
Contributions, the Company shall issue, sell and deliver to the Purchasers and
the Management Stockholders the following securities:
(a) to each of AT&T PCS and TWR, the number of shares set forth
opposite its name on Schedule V of the following: (i) the Company's Series A
Convertible Preferred Stock par value $.01 per share (the "Series A Preferred
------------------
Stock"), the terms of which are set forth in the Restated Certificate, which,
- -----
subject to the terms thereof, are convertible on and after the eighth
anniversary of the Closing Date into shares of newly issued Non-Voting Common
Stock; (ii) the Company's Series D Preferred Stock, par value $.01 per share
(the "Series D Preferred Stock"), the terms of which are set forth in the
------------------------
Restated Certificate; (iii) the Company's Series F Preferred Stock, par value
$.01 per share (the "Series F Preferred Stock"), the terms of which are set
------------------------
forth in the Restated Certificate; and (iv) Tracked Common Stock; and
(b) to each Cash Equity Investor, TeleCorp Investor and Management
Stockholder, the number of shares set forth opposite his or its name on Schedule
V of the following: (i) the Company's Series C Preferred Stock, par value $.01
per share (the "Series C Preferred Stock"), the terms of which are set forth in
------------------------
the Restated Certificate, which, subject to the terms thereof, are convertible
into shares of newly issued Common Stock upon the Company's initial public
offering; (ii) the Company's Series E Preferred Stock, par value $.01 per share
(the "Series E Preferred Stock"), the terms of which are set forth in the
------------------------
Restated Certificate; and (iii) Common Stock.
2.6 Additional Purchase by Cash Equity Investors. On the date (if any) that
the Supplemental Closing occurs, the Company shall issue, sell and deliver to
each Cash Equity Investor, the number of shares of Series C Preferred Stock and
Common Stock set forth opposite its name on Schedule I under the heading "Number
of Supplemental Shares."
2.7 Restrictive Legends. Each certificate representing Securities
(including Securities originally issued hereunder or delivered upon conversion
of the Preferred Stock or Common 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."
2.8 Use of Proceeds. The Company shall use the net cash proceeds of its
sale of Securities hereunder solely (i) for capital and other expenditures
relating to the conduct of the Business (as defined in the Stockholders
Agreement) by the Company and its Subsidiaries, (ii) to pay the purchase price
payable under the License Purchase Agreement, (iii) to repay the Bridge Notes
and the indebtedness of TeleCorp to the United States Department of the Treasury
pursuant to the terms thereof, (iv) to consummate the Supplemental Closing (it
any), and (v) to pay fees and expenses incurred in connection with the
Transactions.
ARTICLE III
CLOSING
3.1 Time and Place of Closing. Upon the terms and subject to the
conditions hereof, the closing of the Transactions (the "Closing") shall take
-------
place at the offices of Mayer, Brown & Platt, 1675 Broadway, 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").
------------
3.2 Closing Actions and Deliveries. Upon the terms and subject to the
satisfaction or waiver by the appropriate parties, if applicable, of the
conditions set forth in Article VII, to effect the purchase and sale of the
Securities and consummate the other Transactions, the parties shall on the
Closing Date take the following actions:
(a) AT&T Party Contributions. Each of AT&T PCS and TWR shall execute
and deliver to the Company one or more instruments of assignment, substantially
in the form of Exhibit M, sufficient to assign to the Company (or one or more
wholly owned
Subsidiaries of the Company designated by the Company) the AT&T Contributed
Licenses (such assignments being herein collectively referred to as the "AT&T
License Transfer").
(b) Cash Equity Investor Contributions.
(i) Each Cash Equity Investor shall deliver to the Company by
wire transfer of immediately available funds to the account designated by the
Company on or prior to the Closing Date an amount equal to its Initial Cash
Contribution, as set forth on Schedule I. Each Cash Equity Investor shall
convert the principal amount of its Pre-Closing Notes, together with the
interest thereon, into a capital contribution to the Company, and the principal
amount of Pre-Closing Notes (but not any interest thereon) so converted shall be
credited against its Initial Cash Contribution.
(ii) Immediately prior to the Closing, the Bridge Notes shall
be converted into shares of Series A Preferred Stock of TeleCorp, and the
principal amount of Bridge Notes so converted, together with interest accrued
thereon through the date hereof only, shall be credited against the respective
Initial Cash Contributions of the holders thereof, and all Liens in respect of
the Bridge Notes shall be released and terminated by the holders thereof.
(c) TeleCorp Investor Contributions. Each TeleCorp Investor shall
execute and deliver to the Company one or more stock certificates, together with
stock powers duly executed in blank, representing all of the TeleCorp Equity
Interests owned by such TeleCorp Investor, as set forth on Schedule II-A.
(d) Management Stockholder Contribution. Each Management Stockholder
shall deliver to the Company one or more stock certificates, together with stock
Powers duly executed in blank, representing all of the TeleCorp Equity Interests
owned by such Management Stockholder, as set forth on Schedule II-B.
(e) Delivery of Securities. The Company shall deliver: (i) to each of
AT&T PCS and TWR certificates, duly executed by authorized signatories of the
Company, representing the shares of Series A Preferred Stock, Series D Preferred
Stock, Series F Preferred Stock and Tracked Common Stock to be issued to AT&T
PCS and TWR in accordance with Section 2.5; (ii) to each Cash Equity Investor
and TeleCorp Investor, certificates, duly executed by authorized signatories of
the Company, representing the shares of Series C Preferred Stock and Common
Stock to be issued to each of them in accordance with the terms of Section 2.5;
and (iii) to each Management Stockholder, certificates, duly executed by
authorized signatories of the Company, representing (x) the shares of Series E
Preferred Stock and Common Stock to be issued to each of them in accordance with
the terms of Section 2.5 and (y) five fully paid and non-assessable shares of
Voting Preference Stock to be issued to them in exchange for their five shares
of Old Common Stock, which shall be surrendered to the Company for cancellation.
(f) Restated Certificate. Duly authorized officers of the Company
shall execute the Restated Certificate and cause it to be filed with the office
of the Secretary of State of the State of Delaware.
(g) TeleCorp Matters. Duly authorized officers of TeleCorp shall
execute an amendment to the articles of incorporation of TeleCorp in the form of
Exhibit N (the "TeleCorp Charter Amendment") and cause it to be filed with the
office of the
Secretary of State of the State of Delaware. Each of the directors and officers
of TeleCorp shall tender his or her resignation as such effective as of the
Closing.
(h) Other Deliveries. The parties shall execute and deliver or
cause to be executed and delivered all other documents, instruments, opinions
and certificates contemplated by this Agreement or the Related Agreements 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 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 (collectively,
"Transfer Taxes"), payable in connection with the transfer of the Contributions.
--------------
3.4 Issuance of Additional Shares. In addition to the shares of Preferred
and Common Stock issued to the Cash Equity Investors at the Closing, on the date
of the Supplemental Closing (if any), the Company shall deliver to each such
Cash Equity Investor, certificates, duly executed by authorized signatories of
the Company, representing the shares of Series C Preferred Stock and Common
Stock to be issued to such Cash Equity Investor in accordance with the terms of
Section 2.6.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASERS
Each of AT&T PCS and TWR, as to itself and each other AT&T Party,
and each other Purchaser, as to itself, represents and warrants to the Company
and each of the other parties as follows:
4.1 Organization; Power and Authority.
(a) Each AT&T Party is a corporation, duly organized, validly
existing and in good standing under the laws of its jurisdiction of organization
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. Each of the
Cash Equity Investors and the TeleCorp Investors is a corporation, limited
liability company, general partnership or limited partnership, 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, each of the Related Agreements to which it is a
party 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 the Related Agreements.
(d) The execution and delivery of this Agreement by it and the
consummation of the Transactions by it, including without limitation the
execution and delivery of the Related Agreements to which it is a party, 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 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. Each of the Related Agreements to which it is a party
shall be duly executed and delivered by it 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 Date, after giving effect to the
Transactions, it is not in breach of any obligation under this Agreement or any
of the Related Agreements.
(g) TWR is an indirect wholly owned Subsidiary of AT&T Corp.
4.2 Consents; No Conflicts. Neither the execution, delivery and
performance by it of this Agreement or the Related Agreements to which it is a
party 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)
subject to obtaining the Consents set forth on Schedule 4.2, 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 board of directors, general partner, stockholders 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 the Related Agreements. 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 the
Related Agreements or disqualify the Company from obtaining the Consents
(including without limitation, FCC Consent) required in order to consummate the
AT&T License Transfer and the contribution of the TeleCorp Equity Interests, as
provided for in this Agreement.
4.3 Litigation. There is no 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 to which it is a party or to fulfill its obligations
under this Agreement or any of the Related Agreements to which it is a party, or
which seeks to prevent or challenge the Transactions.
4.4 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. The fact that it owns the interest
in the Company contemplated by this Agreement and the Related Agreements 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 banker
or incurred any liability for any brokerage fees, commissions or finder's fees
in connection with the Transactions.
4.6 AT&T PCS Licenses.
(a) AT&T PCS is the authorized legal holder, free and clear of
any Liens, of the AT&T PCS Licenses, true and correct copies of which are
attached to Schedule III-A hereto. The AT&T PCS Licenses are, and on the Closing
Date each of the AT&T PCS Licenses will be, valid and in full force and effect.
Except for proceedings affecting the PCS or wireless communications services
industry generally, including investigations by governmental agencies of bidding
practices of bidders in the FCC auctions of PCS spectrum, there is not pending,
nor to the knowledge of AT&T PCS, threatened against AT&T PCS or against the
AT&T PCS 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, non-renewal or suspension of, any of the
AT&T PCS Licenses, which seeks the imposition of any modification or amendment
with respect thereto, or which adversely affects the ability of the Company to
employ the AT&T Contributed Licenses or the AT&T PCS Purchased Licenses in its
business after the Closing Date. The AT&T PCS Licenses are not subject to any
conditions other than those appearing on the face of the Licenses themselves and
those imposed by FCC Law.
(b) TWR is the authorized legal holder, free and clear of any
Liens, of the TWR Licenses, true and correct copies of which are attached to
Schedule III-A hereto. The TWR Licenses are, and on the Closing Date each of the
TWR Licenses will be, valid and in full force and effect. Except for proceedings
affecting the PCS or wireless communications services industry generally,
including investigations by governmental agencies of bidding practices of
bidders in the FCC auctions of PCS spectrum, there is not pending, nor to the
knowledge of TWR, threatened against TWR or against the TWR 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, non-renewal or suspension of, any of the TWR Licenses, which seeks
the imposition of any modification or amendment with respect thereto, or which
adversely affects the ability of the Company to employ the TWR Licenses in its
business after the Closing Date. The TWR 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 Capital Commitment. Each Cash Equity Investor has, and will have on
the Closing Date and on any subsequent date on which it is obligated to make a
capital contribution, cash available to it in an amount sufficient to make its
respective Cash Equity Investor Contributions in accordance with the terms of
Section 2.2.
4.8 No Distribution. It is acquiring the Securities to be purchased 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).
4.9 Investor Acknowledgments.
(a) Each Purchaser is an "accredited investor" as defined in
Regulation D of the Securities Act. Its representatives have been provided an
opportunity to ask questions of, and have received answers thereto from, the
Company and its representatives regarding the terms and conditions of its
purchase 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
purchasing the Securities it is purchasing hereunder.
(c) It is not relying on and acknowledges that no representation
is being made by any other 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 Related Agreements, 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 Related Agreements.
(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 Related Agreements and the 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.
4.10 Institutional Investors. Each Purchaser of shares of Class C Common
Stock represents as to itself that it is an Institutional Investor, as such term
if used in 47 C.F.R. Section 24.720(h).
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY,
THE TELECORP INVESTORS AND THE MANAGEMENT STOCKHOLDERS
The Company and the Management Stockholders represent and
warrant, jointly and severally, as to the Company and its Subsidiaries, if any
(except that (x) the representations and warranties as to the Company set forth
in Sections 5.1(f), 5.7(b), 5.8, 5.11(b)(ii) and 5.13 are not being made by the
Management Stockholders and (y) the representations and warranties as to the
Company set forth, in Sections 5.2 and 5.4 are being made by the Management
Stockholders only as of the date hereof and not as of the Closing Date), to the
Purchasers, and each Management Stockholder represents and warrants, severally
and not jointly, as to itself, and each TeleCorp Investor and Management
Stockholder represents, jointly and severally, as to TeleCorp (except that the
representation and warranty set forth in Section 5.16(b)(iv) is being made
severally by each TeleCorp Investor and Management Stockholder as to itself
only), to the Company and each of the other parties, as follows:
5.1 Organization, Power and Authority.
(a) 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 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 the Purchasers 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 power, authority and/or legal capacity
to execute, deliver and perform this Agreement, each of the Related Agreements
to which it is a party 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) Each of 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 the Related Agreements.
(d) The execution and delivery of this Agreement by the Company
and the consummation of the Transactions by the Company, including without
limitation the execution and delivery of the Related Agreements to which it is a
party, have been duly and validly authorized by the Board of Directors of the
Company and, except for the filing of the Restated Certificate with the office
of the Secretary of State of Delaware, no other proceedings on the part of the
Company 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 each Management Stockholder and constitutes the valid and binding
obligation of the Company, and such Management Stockholder, 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. Each of the Related Agreements to which it is a party
shall be duly executed and delivered by it at (or prior to) the Closing and,
upon such execution and delivery, shall constitute the valid and binding
obligation of it, 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,
neither the Company nor any Management Stockholder is in breach of any
obligation under this Agreement, any Related Agreement or any of the Credit
Documents.
5.2 Consents; No Conflicts. Neither the execution, delivery and
performance by the Company and the Management Stockholders of this Agreement and
the Related Agreements to which it is a party nor the consummation of the
Transactions will (a) conflict with, or result in a breach or violation of, any
provision of the Company's organizational documents; (b) subject to obtaining
the Consents set forth on Schedule 5.2, 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 the Company or any of its assets; or (c)
require any Consent on the part of the Company or any Management Stockholder,
other than those set forth on Schedule 5.2 or the approval of the Company's
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
the Related Agreements or the operation of the Company's 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 the Related Agreements or
disqualify the Company from obtaining the Consents (including without
limitation, FCC Consent) required in order to consummate the AT&T License
Transfer and the contribution of the TeleCorp Equity Interests, as provided for
in this Agreement.
5.3 Litigation. There is no action, proceeding or investigation pending
or, to the knowledge of the Company or the Management Stockholders, threatened
against the Company or any of the Management Stockholders or any of their
respective properties or assets that would have an adverse effect on its ability
to consummate the Transactions to which it is a party or to fulfill its
obligations under this Agreement or any of the Related Agreements to which it is
a party, or, in the case of the Company, 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 the ability of the Company 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. The fact that it owns the interest
in the Company contemplated by this Agreement and the Related Agreements 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. The Management Stockholders, in aggregate, satisfy the
financial requirements established by the FCC in 47 CFR (S)24.720(b)(2) for a
"very small business."
5.5 Brokers. Neither the Company nor any of the Management Stockholders
has 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, except for Chase Securities Inc., whose fee of $1.0 million will
be paid by the Company at the Closing.
5.6 Newly Formed Company. The Company was organized on November 14, 1997,
and, except for assets and liabilities relating to Pre-Closing Expenditures and
Pre-Closing Advances and activities undertaken in connection therewith, since
its organization has at no time (i) had assets or liabilities in excess of
$1,000,000 in the aggregate or (ii) carried on any activities or incurred any
liabilities or obligations other than in connection with its organization and
with the consummation of the Transactions.
5.7 Capitalization.
(a) As of the date hereof and as of the 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 nonassessable. As of the date hereof
and as of the 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 Closing Date, before giving effect
to the 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 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 Closing Date, after giving
effect to the Transactions (but excluding the Securities issued pursuant to
Section 2.6), there will be issued and outstanding the shares of Preferred Stock
and Common Stock set forth on Schedule V. The record and beneficial owners of
such outstanding shares of Common Stock and Preferred Stock, as of the Closing
Date, after giving effect to the Transactions, are set forth on Schedule V. On
the Closing Date, after giving effect to the 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).
5.8 Shares. The shares of Preferred Stock and Common Stock being issued
to the Purchasers 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 or Preferred Stock, as the case may be, issued upon
conversion of the Preferred Stock and the Common Stock (other than the Voting
Preference Stock), when issued pursuant to the terms thereof, 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.
5.9 No Undisclosed Liabilities; Subsidiaries. As of the date hereof and as
of the Closing Date before giving effect to the Transactions, the Company has no
indebtedness or liability of any nature whatsoever, absolute or contingent,
liquidated or unliquidated, except for liabilities consisting of the Bridge
Notes, the Pre-Closing Advances and liabilities incurred in connection with Pre-
Closing Expenditures. The Company owns all of the outstanding shares of capital
stock of each of its Subsidiaries, free and clear of any Liens, except Liens
granted to the lenders pursuant to the Credit Documents. Prior to the Closing
Date, the Company shall furnish to each of the Purchasers a complete list of its
direct and indirect Subsidiaries indicating the jurisdictions in which each such
Subsidiary is organized or qualified to conduct business.
5.10 Offering of Securities.
(a) None of the Company, any Management Stockholder or 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) None of the Company, any Management Stockholder or 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
the Purchasers contained in Sections 4.9 and 4.10, each of the offering and sale
of Securities under this Agreement to the Purchasers complies with all
applicable requirements of Federal and state securities laws.
5.11 Loan Documents.
(a) Prior to the date hereof, the Company has delivered to each of
the Purchasers a true and correct copy of a commitment letter, dated January 22,
1998, from Chase Securities Inc., relating to a proposed $435 million senior
secured credit facility. Such commitment letter has been executed and delivered
by the financial institutions referred to above and the Company, and is in full
force and effect and, as of the date hereof, such commitment letter has not been
modified or withdrawn.
(b) (i) Prior to the Closing, the Company shall have delivered to
each of the Purchasers a true and correct copy of each of the Credit Documents,
together with all amendments and modifications thereto. Such documents
(including the exhibits and
schedules thereto) shall comprise a full and complete copy of all agreements
between the parties thereto with respect to the subject matter thereof and
transactions related thereto, and there shall be no agreements or
understandings, oral or written, or side agreements not contained therein that
relate to or modify the substance thereof.
(ii) As of the Closing Date, the Credit Documents shall have been duly
authorized by all necessary corporate action on the part of the Company, shall
have been validly executed and delivered by the Company and shall be the legal,
valid and binding obligation of the Company, enforceable 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.
As of the Closing Date, the Credit Documents shall be in full force and effect,
none of the provisions thereof shall have been waived by any party thereto, and
no "Default" or "Event of Default" (as such terms are defined in the Credit
Agreement) shall have occurred and be continuing.
5.12 Minimum Build-Out Plan. The Company's Minimum Build-Out Plan in
respect of the construction of a PCS system in the Company Territory is attached
as Schedule 5.12.
5.13 Small Business Matters. The Company, together with its "affiliates"
(as that term is defined in Title 13, Code of Federal Regulations, Section
121.103), is a "Small Business" within the meaning of the SBIC Act and the
regulations thereunder, including Title 13, Code of Federal Regulations,
Sections 107.50, 107.700 and 121.301(c). The information regarding the Company
and its Affiliates set forth in the Small Business Administration Form 480, Form
652 and Parts A and B of Form 1031 delivered at the Closing is accurate and
complete. Copies of such forms shall have been completed and executed by the
Company and delivered to each Purchaser which is an SBIC at the Closing together
with a written statement of the Company regarding its planned use of the
proceeds from the sale of the Securities. Neither the Company nor any
Subsidiary: (i) presently engages in, and none of them shall hereafter engage
in, any activities, or (ii) shall use directly or indirectly the proceeds from
the sale of the Securities for any purpose, which, in either case, a SBIC is
prohibited from engaging in or providing funds for by the SBIC Act and the
regulations thereunder (including Title 13, Code of Federal Regulations, Section
107.720).
5.14 No Distribution. Each Management Stockholder is acquiring the
Securities to be purchased by him 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).
5.15 Investor Acknowledgments.
(a) Each Management Stockholder is an "accredited investor" as
defined in Regulation D of the Securities Act. He has been provided an
opportunity to ask questions of, and has received answers thereto from, the
Company and its representatives regarding the terms and conditions of his
purchase of Securities, and the Company and its proposed business generally, and
has obtained all additional information requested by him to verify the accuracy
of all information furnished to him in connection with such purchase.
(b) Each Management Stockholder has such knowledge and experience in
financial and business affairs that he is capable of evaluating the merits and
risks of purchasing the Securities he is purchasing hereunder.
(c) Each Management Stockholder is not relying on and acknowledges
that no representation is being made by any other Purchaser, the Company or any
of its officers, employees, Affiliates, agents or representatives, or any other
Management Stockholder, except for representations and warranties expressly set
forth in this Agreement and the Related Agreements, and, in particular, he 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
him of future revenues, expenses or expenditures, or future results of
operations and (y) any other information or documents delivered or made
available to him, except for representations and warranties expressly set forth
in this Agreement and the Related Agreements.
(d) In deciding to invest in the Company, each Management Stockholder
has relied exclusively on the representations and warranties expressly set forth
in this Agreement and the Related Agreements and the investigations made by
himself and his representatives and his 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, he has
determined that the Securities he is acquiring are a suitable investment for
him.
5.16 Representations as to TeleCorp.
(a) TeleCorp 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. TeleCorp has furnished to the Company and the Purchasers a true
and correct copy of its Certificate of Incorporation and Bylaws as in effect on
the date hereof and as of the Closing Date. TeleCorp 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 TeleCorp or would
materially adversely affect the Transactions.
(b) (i) As of the date hereof and as of the Closing Date before
giving effect to the filing of the TeleCorp Charter Amendment, the authorized
capital stock of TeleCorp consists of 125,000 shares of Class A Common Stock of
which 4,833.751 shares are issued and outstanding, 175,000 shares of Class B
Common Stock of which 1,973.717 shares are issued and outstanding, 175,000
shares of Class C Common Stock of which 12,573.533 shares are issued and
outstanding, and 200,000 shares of Preferred Stock of which 6,000 shares are
designated as Series A Preferred Stock and 367.365 shares are issued and
outstanding, and all such shares have been validly issued and are fully paid and
non-assessable. The record and beneficial owners of the issued and outstanding
shares of each class of capital stock of TeleCorp as of the date hereof and as
of the Closing Date, before giving effect to the Transactions, are set forth on
Schedules II-A and II-B. There are not on the date hereof or as of the Closing
Date, before giving effect
to the Transactions, any existing options, warrants, calls, subscriptions, or
other rights, or other agreements or commitments, obligating TeleCorp to issue,
transfer or sell any shares of capital stock of TeleCorp.
(ii) As of the Closing Date, after giving effect to the filing of the
TeleCorp Charter Amendment, the authorized capital stock of TeleCorp will
consist of 1,000 shares of Common Stock, par value $.01 per share, of which 100
shares will be issued and outstanding, fully paid and non-assessable, and will
be owned beneficially and of record by the Company. On the Closing Date, after
giving effect to the Transactions, there will not be any existing options,
warrants, calls, subscriptions, or other rights, or other agreements or
commitments, obligating TeleCorp to issue, transfer or sell any shares of
capital stock of TeleCorp.
(iii) TeleCorp has no Subsidiaries.
(iv) Each TeleCorp Investor and Management Stockholder owns
beneficially and of record the shares of each class of capital stock of TeleCorp
set forth opposite his or its name on Schedule II-A or II-B, as the case may be,
free and clear of any Liens. On or prior to the Closing Date, each TeleCorp
Investor and Management Stockholder shall have terminated, and shall have caused
TeleCorp to terminate, all agreements between such TeleCorp Investor or
Management Stockholder, as the case may be, and TeleCorp.
(c) TeleCorp was organized on July 29, 1996, and, except for its
acquisition and ownership of the TeleCorp Licenses and activities undertaken in
connection therewith, since its organization has at no time (i) had assets
(excluding the TeleCorp Licenses) or liabilities in excess of $1,000,000 in the
aggregate or (ii) carried on any activities or incurred any liabilities or
obligations other than in connection with its organization and with the
consummation of the Transactions.
(d) Schedule 5.16(d) sets forth a list of unaudited financial
statements of TeleCorp for the periods indicated on such list (the "TeleCorp
--------
Financial Statements"), including an unaudited December 31, 1997 balance sheet.
- --------------------
True and complete copies of each item listed thereon have previously been
delivered to each of the Company, AT&T PCS and the Cash Equity Investors. The
TeleCorp Financial Statements have been prepared from the books and records of
TeleCorp and fairly present the financial position of TeleCorp as of the dates
of such statements and the results of its operations and changes in financial
position for the year or interim period then ended, in each case in conformity
with generally accepted accounting principals applied on a basis consistent with
past practices, subject in the case of interim statements to normal year end
audit adjustments and the absence of footnotes, which adjustments and footnotes
are immaterial in the aggregate.
(e) As of the date hereof and as of the Closing Date, before giving
effect to the Transactions, TeleCorp has no indebtedness or liability of any
nature whatsoever, absolute or contingent, liquidated or unliquidated, except
for liabilities set forth on TeleCorp's December 31, 1997 balance sheet, the
Bridge Notes, and other liabilities incurred in connection with Pre-Closing
Expenditures.
(f) There is no action, proceeding or investigation pending or, to
the knowledge of the TeleCorp Investors or the Management Stockholders,
threatened against TeleCorp or any of its properties or assets that would be
reasonably expected to have an
adverse effect on its ability to consummate the Transactions to which it is a
party or to fulfill its obligations under this Agreement or any of the Related
Agreements to which it is a party, 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 TeleCorp which
would limit in any material respect the ability of TeleCorp to operate its
business in the manner currently contemplated.
(g) TeleCorp is the authorized legal holder, free and clear of any
Liens (except for Liens securing the Bridge Notes and $7,727,322 in net
principal amount of TeleCorp's indebtedness to the United States Department of
the Treasury), of the TeleCorp Licenses, true and correct copies of which are
attached to Schedule III-B. The TeleCorp Licenses are, and on the Closing Date
each of the TeleCorp Licenses will be, valid and in full force and effect.
Except as set forth on Schedule 5.16(g) and for proceedings affecting the PCS or
wireless communications services industry generally, including investigations by
governmental agencies of bidding practices of bidders in the FCC auctions of PCS
spectrum, there is not pending, nor to the knowledge of any of the TeleCorp
Investors or the Management Stockholders, threatened against TeleCorp or against
the TeleCorp 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, non-renewal or suspension of, any of the
TeleCorp Licenses, which seeks the imposition of any modification or amendment
with respect thereto, or which adversely affects the ability of TeleCorp or the
Company to employ the TeleCorp Licenses in its business after the Closing Date.
The TeleCorp Licenses are not subject to any conditions other than those
appearing on the face of the Licenses themselves or the financing documents
appended thereto and those imposed by FCC Law.
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 Related Agreements and 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 any Consents necessary or advisable in the
reasonable judgment of AT&T PCS in connection with franchise laws applicable to
the execution, delivery and performance of this Agreement and the Related
Agreements or the consummation of the Transactions, and to 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.
(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 AT&T PCS 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
farther 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 Related
Agreements.
(d) Each party shall use all commercially reasonable efforts to
modify the structure of the Transactions in such a manner that no franchise laws
shall be applicable to the relationship between AT&T PCS (or its Affiliates) and
the Company; provided that, no party shall be obligated to agree to any
modification that adversely affects such party. The Company acknowledges that
(i) the Company and AT&T PCS and its Affiliates do not intend to create a
franchise or business opportunity relationship; (ii) the wireless telephones
("Telephones") if any, purchased by the Company from AT&T PCS and its Affiliates
and minutes for mobile wireless radiotelephonic service ("Minutes") purchased by
the Company under the terms of the Roaming are being sold at bona fide wholesale
prices; (iii) the Company is not required by this Agreement or the Related
Agreements or as a matter of practical necessity to purchase more than a
reasonable quantity of Telephones or Minutes; and (iv) neither AT&T PCS nor any
of its Affiliates has made any representation to the Company that (a) the
Company or its equity holders will earn, or are likely to earn, a gross or net
profit, (b) AT&T PCS or any of its Affiliates has knowledge of the market that
the Company will operate in or that the market demand will enable the Company to
earn a profit, (c) there is a guaranteed market for the Company, or (d) AT&T PCS
or any of its Affiliates will provide the Company with locations or assist the
Company in finding locations for use or operation of its business. The Company
has been informed at least seven days prior to the execution of this Agreement
that AT&T PCS's principal business address is, and AT&T's agent for service of
process is, c/o AT&T Corp., 32 Avenue of the Americas, New York, New York 10013.
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 Related Agreements 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
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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 7.7 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 Related Agreements
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 Retained Licenses. AT&T PCS and its Affiliates may use the AT&T
Retained Licenses, and may market and sell to their customers or others any
services that use such Licenses permitted under applicable Laws, in each case as
it may determine, and may otherwise deal with and permit others to deal with the
AT&T Retained Licenses, except from and after the Closing Date to the extent
otherwise expressly agreed by any AT&T Party in any of the Related Agreements.
6.4 No Further Commitment. The Cash Equity Investors and the Management
Stockholders have arranged for the Company to obtain financing under this
Agreement and will use all reasonable efforts to arrange for financing under the
Credit Agreement. It is anticipated that the Company, in consultation and
cooperation with the Cash Equity Investors, will have responsibility for
arranging for all of the additional debt and equity financing required by the
Company. Further, the Management Stockholders, in their capacity as officers and
employees of the Company, shall be responsible for conducting the day-to-day
operations of the Company, all under the control and supervision of the
Company's Board of Directors. In connection with the execution and delivery of
this Agreement, each of the Purchasers is agreeing to acquire Securities of the
Company and each of the Purchasers and certain of their respective Affiliates
are agreeing to enter into the Related Agreements to which each of them is a
party. The parties acknowledge and agree that, except to the extent expressly
set forth in this
Agreement and such Related Agreements, neither AT&T PCS nor any of its
Affiliates has any legal, contractual or other obligation to acquire debt or
equity securities of the Company, provide or arrange for debt or equity
financing required by the Company, provide services to or otherwise assist the
Company in connection with the conduct of its business or in any other manner,
refrain from exercising its rights under this Agreement and the Related
Agreements (including, without limitation, the right to terminate the Network
Membership License Agreement in accordance with its terms) or refrain from
competing, directly or indirectly, with businesses conducted by the Company.
Nothing herein shall be construed to relieve any Person of its express
contractual obligations under this Agreement and the Related Agreements or from
any common law obligation of good faith relating to its performance of such
contractual obligations.
6.5 Use of Proceeds. The Company shall use the proceeds of the sale of
Securities only for the purposes described in Section 2.8 and in the written
statement referred to in Section 5.13.
6.6 SBIC Regulatory Provisions.
(a) The Company shall notify each SBIC Holder as soon as practicable
(and, in any event, not later than 15 days) prior to taking any action after
which the number of record holders of the Company's voting stock would be
increased from fewer than 50 to 50 or more, and the Company shall notify each
SBIC Holder of any other action or occurrence after which the number of record
holders of the Company's voting stock was increased (or would increase) from
fewer than 50 to 50 or more, as soon as practicable after the Company becomes
aware that such other action or occurrence has occurred or is proposed to occur.
(b) Within 75 days after the Closing, the Company shall deliver to
each SBIC Holder a written statement certified by the Company's president or
chief financial officer describing in reasonable detail the use of the proceeds
of the sale of Securities hereunder by the Company and its Subsidiaries. In
addition to any other rights granted hereunder, the Company shall grant each
SBIC Holder and the United States Small Business Administration (the "SBA")
---
access to the Company's records for the purpose of verifying the use of such
proceeds to the extent required pursuant to SBIC Regulations.
(c) Promptly after the end of each fiscal year (but in any event
prior to February 28 of each year), the Company shall deliver to each SBIC
Holder a written assessment of the economic impact of each SBIC Holder's
investment in the Company, specifying the full-time equivalent jobs created or
retained in connection with the investment, the impact of the investment on the
revenues and profits of the business and on taxes paid by the business and its
employees.
(d) During the one-year period commencing on the Closing Date, the
Company shall not engage in any activity which constitutes an ineligible
business activity (within the meaning of the SBIC Regulations as in effect on
the date hereof).
6.7 Regulatory Compliance Cooperation. In the event that any SBIC Holder
reasonably determines that it has a Regulatory Problem, to the extent reasonably
necessary, such SBIC Holder shall have the right to transfer its Securities (and
any shares of Common Stock issued upon conversion thereof) to another Person
without regard to any restrictions on transfer set forth in this Agreement or in
Section 4.1 (c) of the Stockholders Agreement and without complying with the
provisions of Section 4.3 of the Stockholders Agreement, but subject to the
other provisions of the Stockholders Agreement and federal and state securities
law restrictions, and the Company shall take all such actions
as are reasonably requested by such SBIC Holder in order to (i) effectuate and
facilitate such transfer by such SBIC Holder of any Securities of the Company
then held by such SBIC Holder to such Person, (ii) permit such SBIC Holder (or
any of its Affiliates) to exchange all or any portion of voting Securities then
held by it on a share-for-share basis for shares of a class of non-voting
Securities of the Company, which non-voting Securities shall be identical in all
respects to such voting Securities, except that such non-voting Securities (or
Common Stock, as applicable) shall be non-voting and shall be convertible into
voting Securities (or Common Stock, as applicable) on such terms as are
requested by such SBIC Holder in light of regulatory considerations then
prevailing, (iii) continue and preserve the respective allocation of the voting
interests with respect to the Company arising out of the SBIC Holder's ownership
of voting Securities and/or provided for in the Stockholders Agreement before
the transfers and amendments referred to in this Section (including entering
into such additional agreements as are reasonably requested by such SBIC Holder
to permit any Person(s) designated by such SBIC Holder) to exercise any voting
power which is relinquished by such SBIC Holder and (iv) amend this Agreement,
the Restated Certificate, and any other related documents, agreements or
instruments to effectuate and reflect the foregoing. The parties to this
Agreement agree to vote their Securities in favor of such amendments and
actions.
6.8 Permitted Pre-Closing Expenditures.
(a) AT&T PCS hereby irrevocably and unconditionally commits (the
"Pre-Closing Commitment") to repay Pre-Closing Advances in the aggregate amount
----------------------
of up to $2.25 million in accordance with the terms of Section 6.8(f).
(b) The Cash Equity Investors hereby irrevocably and unconditionally
commit, from time to time upon ten business days' notice from the Company, to
make unsecured, noninterest bearing advances ("Pre-Closing Advances") to the
--------------------
Company evidenced by notes, such notes to be in form satisfactory to Cash Equity
Investors representing a majority of the Aggregate Commitments of all Cash
Equity Investors (the "Pre-Closing Notes"), pro rata based on their respective
-------------------
Aggregate Commitments, in an amount up to the aggregate amount of $2.0 million.
(c) Prior to the Closing, the Company shall request Pre-Closing
Advances and shall use the proceeds thereof only to make Pre-Closing
Expenditures for assets, properties or rights that are, prior to the Closing,
assignable to AT&T PCS or its designee(s), free and clear of Liens (other than
Permitted Liens) and without penalty or cost to effect such assignment other
than penalties or costs that individually or in the aggregate are not material
in amount. The Company shall not incur obligations (including any deferred or
contingent obligations) in excess of the amounts set forth on Schedule 1.1,
without regard to lease commitments.
(d) The Company shall furnish each of the Purchasers with written
monthly reports detailing any Pre-Closing Advances, Pre-Closing Expenditures and
related activities.
(e) Except to the extent Pre-Closing Notes are converted to capital
at the election of the Cash Equity Investors in accordance with the second
sentence of Section 3.2(b)(i), the Company shall repay the Pre-Closing Advances
(if any) on the Closing Date, concurrently with the Closing.
(f) If this Agreement is terminated in accordance with the terms
hereof prior to the Closing, AT&T PCS shall repay any Pre-Closing Advances then
outstanding and shall also repay up to $250,000 of interest on the Bridge Notes
(the aggregate amount of such repayments not to exceed the amount of the Pre-
Closing Commitment) within five business days after the date of termination,
such payment to be made against the transfer and assignment, if and to the
extent requested by AT&T PCS, by the Company to AT&T PCS or its designee(s),
free and clear of all Liens (other than Permitted Liens), of any asset, property
or right acquired by the Company with the proceeds of such Pre-Closing Advances.
6.9 Certain Covenants. From and after the execution and delivery of this
Agreement to and including the Closing Date, each of AT&T PCS, TWR, the TeleCorp
Investors and the Management Stockholders shall, and the TeleCorp Investors and
the Management Stockholders shall cause TeleCorp to:
(a) Comply in all material respects with all applicable Laws,
including all such Laws relating to the AT&T PCS Licenses, the TWR Licenses and
the TeleCorp Licenses, as the case may be, or their use;
(b) Use commercially reasonable efforts to maintain the AT&T PCS
Licenses, the TWR Licenses and the TeleCorp Licenses, as the case may be, 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 AT&T PCS Licenses, the TWR Licenses or the
TeleCorp Licenses, as the case may be, or any interest therein, or negotiate
therefor, or (ii) create, incur or suffer to exist any Lien (except for Liens
securing the Bridge Notes and $7,727,322 in net principal amount of TeleCorp's
indebtedness to the United States Department of the Treasury) of any nature
whatsoever relating to any of the AT&T PCS Licenses, the TWR Licenses or the
TeleCorp Licenses, as the case may be, or any interest therein. Without limiting
the foregoing, none of AT&T PCS, TWR, the TeleCorp Investors or the Management
Stockholders shall, and the TeleCorp Investors and the Management Stockholders
shall cause TeleCorp not to, incur any material obligation or liability,
absolute or contingent, relating to or affecting the AT&T PCS Licenses, the TWR
Licenses and the TeleCorp Licenses, as the case may be, 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 AT&T PCS Licenses, the TWR
Licenses or the TeleCorp Licenses, as the case may be, or their use, and which
could have a Material Adverse Effect on it or materially adversely affect the
Transactions, or (ii) the AT&T PCS Licenses, the TWR Licenses or the TeleCorp
Licenses, as the case may be, 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 AT&T
PCS Licenses, the TWR Licenses or the TeleCorp Licenses, as the case may be,
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.
6.10 Employment Agreements. On the Closing Date, each of the Management
Stockholders shall enter into an employment agreement with the Company
(collectively, the "Employment Agreements"), in form and substance satisfactory
---------------------
to Cash Equity Investors representing 66-2/3% of the Aggregate Commitment of all
Cash Equity Investors, AT&T PCS and the Management Stockholders, which will
provide, among other things, for the vesting and repurchase of Series E
Preferred Stock and Voting Common Stock on such terms and conditions and upon
the occurrence of such events or circumstances as are set forth in the
Management Agreement; it being understood that any cash compensation payable
under the Employment Agreements shall reduce the management fee payable by the
Company pursuant to the Management Agreement.
6.11 Restricted Stock Plan. Prior to the Closing, the Company shall
establish a restricted stock plan, in form and substance satisfactory to Cash
Equity Investors representing 66-2/3% of the Aggregate Commitment of all Cash
Equity Investors, AT&T PCS and the Management Stockholders, which will provide,
among other things, that (a) shares of Voting Common Stock issued thereunder
will be subject to the vesting provisions and repurchase rights set forth on
Schedule 6.11, (b) all of the shares issued under the plan shall be allocated to
Company employees on the Closing Date (other than those shares reserved under
the plan for issuance to a Chief Operating Officer), (c) any shares (other than
shares issued in respect of the Supplemental Closing) that are repurchased by
the Company under the terms of the plan shall be available for re-allocation to
Company employees pursuant to the Plan, and (d) any shares (other than shares
issued in respect of the Supplemental Closing) that are not re-allocated to
Company employees on the fifth anniversary of the Closing Date shall be re-
allocated to the Management Stockholders ratably in accordance with the number
of shares of Voting Common Stock being issued to each of them hereunder.
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 each of the AT&T License Transfer
and the contribution of the TeleCorp Equity Interests shall have been obtained
pursuant to a Final Order free of any conditions materially adverse to the
Company or any of the Purchasers. 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 any of
the Purchasers or to materially adversely affect the Transactions or its ability
to perform its obligations under the Related Agreements 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 closing under the License Purchase Agreement shall occur
concurrently with the Closing.
7.2 Conditions to Obligations of Each Party. The obligation of each party
(the "receiving party") 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 receiving party:
(a) The representations and warranties of each party other than
the receiving party contained herein and in the Related Agreements 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, the first sentence of each of Sections 5.3 and 5.16(f) and
the third sentence of each of Sections 4.6(a) and (b) and 5.16(g) (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 the Related Agreements
or to materially adversely affect the Transactions.
(b) Each party other than the receiving party shall have
performed in all material respects all agreements contained herein or in the
Related Agreements required to be performed by it at or before the Closing.
(c) An officer of each party other than the receiving party
shall have delivered to the receiving party 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 party delivering such certificate.
(d) Each party other than the receiving party shall have
furnished the receiving party with one or more opinions of counsel to the party
furnishing the opinion(s), each dated the Closing Date, in substantially the
forms of Exhibits H- I through K-2, as applicable.
(e) Each of the Related Agreements shall have been executed and
delivered by the parties thereto (other than the receiving party) and shall be
in full force and effect.
(f) Each Cash Equity Investor (other than the receiving party)
shall have executed and delivered to the Company a Pledge Agreement,
substantially in the form of Exhibit L.
(g) All corporate and other proceedings of each party other than
the receiving party in connection with the AT&T License Transfer, the
contribution of the TeleCorp Equity Interests and the other Transactions, and
all documents and instruments incident thereto, shall be reasonably satisfactory
in form and substance to the receiving party, and each party other than the
receiving party shall have delivered to the receiving party such receipts,
documents, instruments and certificates, in form and substance reasonably
satisfactory to the receiving party, which the receiving party shall have
reasonably requested.
7.3 Conditions to the Obligations of the Purchasers. The obligation of
each Purchaser 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 each such
Purchaser:
(a) The terms, conditions and provisions of the Credit Documents
shall be satisfactory to such Purchaser in all material respects, including
without limitation provisions relating to principal amounts, rates of interest,
terms of mandatory and permitted prepayments, prepayment charges (if any), fees
and expenses, representations and warranties, affirmative and negative
covenants, conditions to disbursements of loan funds, defaults and remedies
therefor and collateral, it being acknowledged that such terms, conditions and
provisions shall be deemed to be satisfactory to such Purchaser if they are in
the aggregate at least as favorable to the Company as the terms of the
commitment letter referred to in Section 5.11 (a). The disbursements of loan
funds contemplated by the Credit Agreement to occur on the Closing Date shall be
made in accordance with the terms thereof concurrently with the Closing and such
Purchaser shall have received such evidence thereof as it may request.
(b) On the Closing Date, counsel to each Purchaser shall have
received the legal fees and expenses required to be paid or reimbursed by the
Company as provided in Section 10.4 for statements rendered on or prior to the
Closing Date.
(c) For each SBIC Holder, the Company shall have prepared the
Size Status Declaration on Form 480, the Assurance of Compliance for
Nondiscrimination on Form 652 and the Portfolio Financing Report on Form 1031
(Parts A and B) (collectively, the "SBA Compliance Documents"), the Company
------------------------
shall have duly executed and delivered the Forms 480 and 652 to each SBIC
Holder, and all of the information set forth in the SBA Compliance Documents
shall be true and correct in all respects. The Company shall have delivered a
list, after giving effect to the transactions contemplated by this Agreement,
of: (a) the name of each of the Company's directors, (b) the name and title of
each of the Company's officers and (c) the name of each of the Company's
stockholders and the number and class of shares held by each stockholder.
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 the Purchasers. Each Purchaser shall indemnify and
hold harmless each other Purchaser, the Company, each Management Stockholder and
their respective 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 (except, in the case of the TeleCorp Investors, for the
representations contained in Section 5.16) or any Related Agreement being untrue
in any material respect as of the date on which it was made or (b) any material
default by such indemnifying party or any of its Affiliates in the performance
of their respective obligations under this Agreement and any Related 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 Management Stockholders. Each Management
Stockholder, severally and not jointly, shall indemnify and hold harmless each
Purchaser and the Company and their respective 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 such
Management Stockholder contained in this Agreement (except for the
representations contained in Section 5.16) or any Related Agreement being untrue
in any material respect as of the date on which it was made or (b) any material
default by such Management Stockholder in the performance of his obligations
under this Agreement and any Related 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;
provided that the aggregate liability of each Management Stockholder to
indemnify Section 8.3 Indemnified Parties against Losses arising out of or
resulting from (x) the untruth in any material respect of any representation or
warranty as to the Company made by such Management Stockholder in this Agreement
or any Related Agreement, (y) any material default by such Management
Stockholder in the performance of his obligations under this Agreement or any
Related Agreement, shall (except, in the case of clause (y), to the extent (but
only to the extent) any such Losses arise out of or result from the gross
negligence or willful misconduct of such Management Stockholder) be limited to
the shares of Common Stock and Preferred Stock of the Company then held by such
Management Stockholder, and Section 8.3 Indemnified Parties seeking
indemnification against any Management Stockholder for such Losses hereunder
shall not have recourse to any other assets of such Management Stockholder.
8.4 Indemnification by the Company. The Company shall indemnify and hold
harmless each of the Purchasers and their respective Affiliates, and the
shareholders, members, managers, officers, employees, agents and/or the legal
representatives of any of them (each, a "Section 8.4 Indemnified Party") against
-----------------------------
all Losses incurred by him or it in connection with the investigation, defense,
or disposition of any action, suit or other proceeding in which any Section 8.4
Indemnified Party may be involved or with which he or it may be threatened that
arises out of or results from (a) any representation or warranty of the Company
contained in this Agreement or any Related 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 and any Related
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
8.4 Indemnified Party or its Affiliates.
8.5 Indemnification by the TeleCorp Investors and the Management
Stockholders. The TeleCorp Investors and the Management Stockholders, jointly
and severally, shall indemnify and hold harmless AT&T PCS, TWR, the Cash Equity
Investors, and the Company and their respective Affiliates, and the
shareholders, members, managers, officers, employees, agents and/or the legal
representatives of any of them (each, a "Section 8.5 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 8.5 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 Section 5.16 being untrue in any
material respect as of the date on which it was made or (b) any liabilities of
TeleCorp attributable to events that occurred prior to the Closing, other than
liabilities set forth on the TeleCorp Financial Statements or arising out of
ownership of the Purchased Licenses, and 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 8.5 Indemnified Party or its Affiliates;
provided that the aggregate liability of each TeleCorp Investor and Management
Stockholder to indemnify Section 8.5 Indemnified Parties against Losses arising
out of or resulting from the untruth in any material respect of any
representation or warranty made by such TeleCorp Investor or Management
Stockholder in Section 5.16 shall be limited (i) to the shares of Common Stock
and Preferred Stock of the Company acquired by such TeleCorp Investor or
Management Stockholder in respect of its contribution of TeleCorp Equity
Interests (or the proceeds therefrom), and Section 8.5 Indemnified Parties
seeking indemnification against any TeleCorp Investor or Management Stockholder
for such Losses hereunder shall not have recourse to any other assets of such
TeleCorp Investor or Management Stockholder, and (ii) in the case of the
Management Stockholders only, to $375,000 in the aggregate; provided, further,
that the TeleCorp Investors and Management Stockholders shall not have any
obligation to indemnify Section 8.5 Indemnified Parties pursuant to this Section
8.5 in respect of any Claim arising under Section 5.16 unless and until Section
8.5 Indemnified Parties, individually or in the aggregate, shall have incurred
Losses in an aggregate amount in excess of $250,000, in which event each Section
8.5 Indemnified Party shall be entitled to be indemnified for all of its Losses
commencing at $1.
8.6 Procedures.
(a) The terms of this Section 8.6 shall apply to any claim (a
"Claim") for indemnification under the terms of Sections 8.2, 8.3, 8.4 or 8.5
-----
The Section 8.2 Indemnified Party, Section 8.3 Indemnified Party, Section 8.4
Indemnified Party or Section 8.5 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) AT&T PCS
and TWR, their respective Affiliates, and the shareholders, members, managers,
officers, employees, agents and/or the legal representatives of any of them;
(ii) the Cash Equity Investors, their respective Affiliates, and the
shareholders, members, managers, officers, employees, agents and/or the legal
representatives of any of them; (iii) the TeleCorp Investors, their respective
Affiliates, and the shareholders, members, managers, officers, employees, agents
and/or the legal representatives of any of them; and (iv) the Company and the
Management Stockholders, their respective Affiliates, and the shareholders,
members, managers, officers, employees, agents and/or the legal representatives
of any of them.
8.7 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.
8.8 Limit on Indemnity. So long as the Company does not conduct any
business or engage in any activities other than those described in the first
sentence of the definition of "Business" (as such term is defined in the
Stockholders Agreement), each party waives its right to indemnification under
this Article VIII or any other right to assert any claim arising from any
inaccuracy in the Company's representations and warranties set forth in the
first and last sentence of Section 5.13 or the violation by the Company of the
covenant set forth in Section 6.6(d) to the extent such Section relates to
ineligible or prohibited activities of SBICs.
ARTICLE IX
TERMINATION
9.1 Termination. This Agreement may be terminated, and the transactions
contemplated hereby abandoned, without further obligation of any party (except
as set forth herein), at any time prior to the Closing Date:
(a) by mutual written consent of the parties;
(b) by any party by written notice to the other parties, if the
Closing shall not have occurred on or before the date that is six months after
the date hereof, provided that the party electing to exercise such right is not
otherwise in breach of its obligations under this Agreement, provided further,
that so long as the average amount of advances during the period commencing
December 19, 1997 (whether in respect of Bridge Notes, Pre-Closing Advances or
otherwise) by Cash Equity Investors to the Company and TeleCorp equals or
exceeds $2.0 million per month, AT&T may not exercise such right prior to the
date that is ten months after the date hereof, 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.
Within ten business days after the request of AT&T PCS, the chief
financial officer of the Company shall certify the average amount of the
advances referred to in Section 9.1(b) per month during the period referred to
therein.
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 paragraphs (a) and (f) of Section 6.8 and Articles VIII and X.
(c) Whether or not the Closing occurs, except as otherwise
expressly provided in this Agreement, all costs and expenses incurred in
connection with this Agreement and the Transactions shall be paid by the party
incurring such expenses.
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 Notice. All notices or other communications hereunder shall be in
writing and shall be given (and shall be deemed to have been duly given upon
receipt) by delivery in person, by facsimile transmission, or by registered or
certified mail (return receipt requested), postage prepaid, with an
acknowledgment of receipt signed by the addressee or an authorized
representative thereof, addressed as follows (or to such other address for a
party as shall be specified by like notice; provided that notice of a change of
address shall be effective only upon receipt thereof):
If to AT&T PCS:
c/o AT&T Wireless Services, Inc.
5000 Carillon Point
Kirkland, Washington 98033
Attention: William W. Hague
Facsimile: (206) 828-8451
With a copy to:
AT&T Corp.
295 North Maple Avenue
Basking Ridge, New Jersey 07920
Attention: Corporate Secretary
Facsimile: (908) 953-4657
Friedman Kaplan & Seiler LLP
875 Third Avenue, 8th Floor
New York, New York 10022
Attention: Daniel M. Taitz
Facsimile: (212) 355-6401
Rubin Baum Levin Constant & Friedman
30 Rockefeller Plaza
New York, New York 10112
Attention: Gregg S. Lerner
Facsimile: (212) 698-7825
If to a Cash Equity Investor, to its address set forth on Schedule I.
With a copy to:
Mayer, Brown & Platt
1675 Broadway
New York, New York 10019
Attention: Mark S. Wojciechowski
Facsimile: (212) 262-1910
If to a TeleCorp Investor, to its address set forth on Schedule II-A.
With a copy to:
TeleCorp Holding Corp., Inc.
1110 N. Glebe Road, Suite 3 00
Arlington, Virginia 22201
Attn: General Counsel
Facsimile: (703) 522-4873
If to a Management Stockholder, to him in care of the Company.
With a copy to:
TeleCorp PCS, Inc.
1110 N. Glebe Road, Suite 300
Arlington, Virginia 22201
Attn: General Counsel
Facsimile: (703) 522-4873
If to the Company, to it:
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 sent to the addresses set forth in
this Section 10.3.
10.4 Expenses. The Company agrees, in the event the Transactions are
consummated, to pay, and save the Purchasers harmless against, the reasonable
fees and disbursements of counsel to each of the Purchasers in connection with
the preparation, negotiation, execution and delivery of this Agreement, the
Related Agreements, the Credit Documents, the instruments and documents executed
pursuant hereto or thereto or in connection herewith or therewith, and the
consummation of the Transactions.
10.5 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. None of AT&T PCS, TWR,
the Company, any Cash Equity Investor, any TeleCorp Investor, or any Management
Stockholder may assign its rights and obligations hereunder without the prior
written consent of each of the other parties; provided, that: (a) 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, it being understood that as a result of any such
assignment to the Lenders, after an event of default under the Credit Agreement
and the expiration of any applicable grace and cure periods thereunder, the
Lenders shall have the right, on behalf of the Company, to enforce the
obligation of each Cash Equity
Investor to make capital contributions to the Company in the amounts and on the
dates specified on Schedule I (or such earlier dates as may be established in
accordance with the terms of the Stockholders Agreement) and that, in connection
with any such assignment to the Lenders, the Lenders shall not assume any
obligations of the Company hereunder; (b) AT&T PCS and TWR shall have the right
to assign to AT&T Corp., or to one or more direct or indirect wholly owned
Subsidiaries of AT&T Corp., any and all rights and obligations of AT&T PCS or
TWR, as the case may be, under this Agreement, provided, that such assignee
shall have assumed in writing all the obligations of AT&T PCS or TWR as the case
may be, hereunder and no such assignment shall relieve AT&T PCS of its
obligations hereunder; and (c) any Cash Equity Investor may assign its rights
and obligations hereunder with the prior written consent of AT&T PCS, such
consent not to be unreasonably withheld, and any Cash Equity Investor may assign
its rights and obligations hereunder to any Affiliate, provided, that such
assignee shall have assumed in writing all the obligations of such Cash Equity
Investor hereunder and no such assignment shall relieve such Cash Equity
Investor of its obligations hereunder.
10.6 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.
10.7 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.
10.8 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.
10.9 Entire Agreement. This Agreement and the Related Agreements,
including the exhibits and schedules hereto and thereto and the certificates and
instruments delivered pursuant to the terms of this Agreement and the Related
Agreements, 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 the Related Agreements. This
Agreement and the Related Agreements supersede all prior agreements and
understandings between the parties with respect to such Transactions.
10.10 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 10.10 by a party shall not give
rise to any right to terminate this Agreement.
10.11 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.
10.12 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.
10.13 Authorized Agent of AT&T PCS. AT&T PCS hereby authorizes Wireless
PCS, Inc, as its agent, with full power to execute, in the name of and on behalf
of AT&T PCS, the Related Agreements to which AT&T PCS is a party and any and all
other documents that AT&T PCS is required to execute and deliver in connection
with the Closing, and to give and receive all notices, requests, consents,
amendments, demands and other communications to or from AT&T PCS hereunder or
thereunder. Each party hereto (other than AT&T PCS) shall be entitled to rely on
the full power and authority of Wireless PCS, Inc, to act on behalf of AT&T PCS
in accordance with this Section 10.13. Nothing contained in this Section 10.13
shall relieve AT&T PCS from complying with its obligations under this Agreement
or any of the Related Agreements to which it is a party.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.
TELECORP PCS, INC.
By: /s/ Gerald T. Verto
-------------------------
Name:
Title: CEO
AT&T WIRELESS PCS INC.
By: /s/ William W. Hague
-------------------------
Name:
Title:
TWR CELLULAR, INC.
By: /s/ William W. Hague
--------------------------
Name:
Title:
Cash Equity Investors:
CB CAPITAL INVESTORS, L.P.
By: CB Capital Investors, Inc.,
Its general partner
By: /s/ Michael R. Hannon
--------------------------
Name: Michael R. Hannon
Title: General Partner
NORTHWOOD VENTURES LLC
By: /s/ Peter G. Schiff
--------------------------
Name: Peter G. Schiff
Title: President
NORTHWOOD CAPITAL PARTNERS LLC
By: /s/ Peter G. Schiff
--------------------------
Name: Peter G. Schiff
Title: President
ONELIBERTY FUND III, L.P.
By: /s/ Joseph T. McCullen
------------------------------
Name: Joseph T. McCullen, Jr.
Title: General Partner
ONELIBERTY FUND IV, L.P.
By: /s/ Joseph T. McCullen
------------------------------
Name: Joseph T. McCullen, Jr.
Title: General Partner
MEDIA/COMMUNICATIONS INVESTORS LIMITED PARTNERSHIP
By: M/C Investors General Partner - J. Inc.,
a general partner
By: /s/ James F. Wade
------------------------------
Name: James F. Wade
Title: Manager
MEDIA/COMMUNICATIONS PARTNERS III
LIMITED PARTNERSHIP
By: M/CP III L.L.C.
Its general partner
By: /s/ James F. Wade
--------------------------
Name: James F. Wade
Title: Manager
EQUITY-LINKED INVESTORS-II
By: ROHIT M. DESAI ASSOCIATES-II
Its general partner
By: /s/ Rohit M. Desai
--------------------------
Name:
Title:
PRIVATE EQUITY INVESTORS III, L.P.
By: ROHIT M. DESAI ASSOCIATES III, LLC,
Its general partner
By: /s/ Frank J. Pados
--------------------------
Name: Frank J. Pados
Title: Executive Vice President
HOAK COMMUNICATIONS PARTNERS, L.P.
By: HCP Investments, L.P.,
Its general partner
By: Hoak Partners, LLC
Its general partner
By: /s/ James M. Hoak
--------------------------
Name: James M. Hoak
Title: Manager
HCP CAPITAL FUND, L.P.
By: James M. Hoak & Co.,
Its general partner
By: /s/ James M. Hoak
--------------------------
Name: James M. Hoak
Title: Chairman
ENTERGY TECHNOLOGY HOLDING COMPANY
By: /s/ John A. Brayman
--------------------------
Name: John A. Brayman
Title: President
TORONTO DOMINION INVESTMENTS INC.
By: /s/ Martha L. Gariepy
--------------------------
Name: Martha L. Gariepy
Title: Vice President
WHITNEY EQUITY PARTNERS, L.P.
By: J.H. Whitney & Co.,
Its general partner
By:/s/ William Laverack, Jr.
-------------------------
Name: William Laverack, Jr.
Title:
J.H. WHITNEY STRATEGIC III, L.P.
By: J.H. Whitney & Co.,
Its general partner
By:/s/ William Laverack, Jr.
-------------------------
Name: William Laverack, Jr.
Title:
WHITNEY STRATEGIC PARTNERS, III, L.P.
By: J.H. Whitney & Co.,
Its general partner
By:/s/ William Laverack, Jr.
-------------------------
Name: William Laverack, Jr.
Title:
TeleCorp Investors:
CB CAPITAL INVESTORS, L.P.
By: CB Capital Investors, Inc.,
Its general partner
By:/s/ Michael R. Hannon
-------------------------
Name: Michael R. Hannon
Title: General Partner
NORTHWOOD VENTURES LLC
By:/s/ Peter G. Schiff
-------------------------
Name: Peter G. Schiff
Title: President
NORTHWOOD CAPITAL PARTNERS LLC
By:/s/ Peter G. Schiff
-------------------------
Name: Peter G. Schiff
Title:President
ONELIBERTY FUND III, L.P.
By:/s/ Joseph T. McCullen, Jr.
---------------------------
Name: Joseph T. McCullen, Jr.
Title: General Partner
ONELIBERTY FUND IV, L.P.
By:/s/ Joseph T. McCullen, Jr.
---------------------------
Name: Joseph T. McCullen, Jr.
Title: General Partner
MEDIA/COMMUNICATIONS INVESTORS LIMITED PARTNERSHIP
By: M/C Investors General Partner - J. Inc.,
a general partner
By:/s/ James F. Wade
-------------------------
Name: James F. Wade
Title: Manager
MEDIA/COMMUNICATIONS PARTNERS III LIMITED PARTNERSHIP
By: M/CP III L.L.C.
Its general partner
By:/s/ James F. Wade
-------------------------------------
Name: James F. Wade
Title: Manager
EQUITY-LINKED INVESTORS-II
By: ROHIT M. DESAI ASSOCIATES-II
Its general partner
By:/s/ Frank J. Pados
-------------------------------------
Name: Frank J. Pados
Title: Executive Vice President
PRIVATE EQUITY INVESTORS III, L.P.
By: ROHIT M. DESAI ASSOCIATES III, LLC,
Its general partner
By:/s/ Frank J. Pados
-------------------------------------
Name: Frank J. Pados
Title: Executive Vice President
HOAK COMMUNICATIONS PARTNERS, L.P.
By: HCP Investments, L.P.,
Its general partner
By: Hoak Partners, LLC
Its general partner
By:/s/ James M. Hoak
------------------------------
Name: James M. Hoak
Title: Manager
HCP CAPITAL FUND, L.P.
By: James M. Hoak & Co.,
Its general partner
By:/s/ James M. Hoak
------------------------------
Name: James M. Hoak
Title: Chairman
ENTERGY TECHNOLOGY HOLDING COMPANY
By:/s/ John A. Brayman
------------------------------
Name: John A. Brayman
Title: President
TORONTO DOMINION INVESTMENTS INC.
By:/s/ Martha L. Gariepy
------------------------------
Name: Martha L. Gariepy
Title: Vice President
WHITNEY EQUITY PARTNERS, L.P.
By: J.H. Whitney & Co.,
Its general partner
By:/s/ William Laverack, Jr.
------------------------------
Name: William Laverack, Jr.
Title:
J.H. WHITNEY III, L.P.
By: J.H. Whitney & Co.,
Its general partner
By:/s/ William Laverack, Jr.
------------------------------
Name: William Laverack, Jr.
Title:
WHITNEY STRATEGIC PARTNERS, III, L.P.
By: J.H. Whitney & Co.,
Its general partner
By:/s/ William Laverack, Jr.
------------------------------
Name: William Laverack, Jr.
Title:
GILDE INTERNATIONAL B.V.
By:/s/ Joseph T. McCullen, Jr.
------------------------------
Name: Joseph T. McCullen, Jr.
Title: Attorney-in-Fact
TELECORP INVESTMENT CORP., LLC
By:/s/ Thomas H. Sullivan
------------------------------
Name: Thomas H. Sullivan
Title: Authorized Person
Management Stockholders:
GERALD T. VENTO
/s/ Gerald T. Vento
---------------------------------
THOMAS H. SULLIVAN
/s/ Thomas H. Sullivan
--------------------------
SCHEDULE 1
Cash Equity Funding - Supplemental Funding
Initial Cash 2nd 3rd 4th Supplemental
Equity Sources Contribution/(2)/ Equity Draw Equity Draw Equity Draw Commitment
------------ ----------- ----------- ----------- ----------
CB Capital Investors, Inc. 122,071 357,494 305,178 305,173 1,089,916
Desai Associates Equity Linked Investors II 61,036 178,747 152,589 152,587 544,959
Private Equity Investors III, L.P. 61,036 178,747 152,589 152,587 544,959
Hoak Capital Corporation
Hoak Communications Partners, L.P. 83,882 245,652 209,703 209,701 748,937
HCP Capital Fund, L.P. 7,672 22,468 19,180 19,180 68,501
JH Whitney & Co./(3)/ 76,295 223,434 190,736 190,734 681,199
Entergy Technology Holding Company 61,036 178,747 152,589 152,587 544,959
M/C Partners Media/Communications
Investors Ltd Partnership 43,946 128,698 109,864 109,863 392,371
Media/Communications Partners III
Ltd Partnership 1,831 5,362 4,578 4,578 16,349
OneLiberty Fund III, L.P. 15,259 44,687 38,148 38,147 136,241
Toronto Dominion Investments, Inc. 15,259 44,687 38,148 38,147 136,241
Northwood Capital Partners
Northwood Ventures LLC 8,546 25,025 21,362 21,362 76,295
Northwood Capital Partners LLC 2,136 6,256 5,341 5,341 19,074
Supplemental Commitment 560,004 1,640,004 1,400,005 1,399,987 5,000,000
Cumulative Equity Funding 500,004/(1)/ 2,200,008 3,600,013 5,000,000
Note:
/(1)/ If the supplemental closing is not completed with the closing under the
purchase agreement, then the Time 0 equity contribution herein will be
funded in the subsequent 3 fundings on a pro rata basis.
/(2)/ The 2nd equity draw will coincide with the 1998 fiscal year end
(12/31/98), subsequent equity fundings will coincide with the 24 and 36
month anniversary of the closing.
/(3)/ JH Whitney & Co. will allocate the commitment amongst the following
entities: Whitney Equity Partners, L.P., J.H. Whitney III, L.P. and
Whitney Strategic Partners III, L.P.
Schedule 1
Cash Equity Funding - w/o Supplemental Funding
Initial Cash 2nd 3rd 4th Aggregate
Equity Sources Contribution/(2)/ Equity Draw Equity Draw Equity Draw Commitment
------------ ----------- ----------- ----------- ----------
CB Capital Investors, Inc. 8,583,107 3,514,987 7,901,908 7,901,904 27,901,906
Desai Associates Equity Linked Investors II 4,291,654 1,757,494 3,950,954 3,950,952 13,951,953
Private Equity Investors III, L.P. 4,291,654 1,757,494 3,950,954 3,950,952 13,951,953
Hoak Capital Corporation
Hoak Communications Partners, L.P. 5,897,882 2,415,323 6,429,796 5,429,793 19,172,794
HCP Capital Fund, L.P. 539,448 220,917 496,635 496,635 1,753,635
JH Whitney & Co./(4)/ 5,354,442 2,190,887 4,938,693 4,938,690 17,438,692
Entergy Technology Holding Company 4,291,554 1,757,494 3,950,954 3,950,952 13,950,954
M/C Partners Media/Communications Investors
Ltd Partnership 3,089,918 1,265,395 2,844,687 2,844,685 10,044,686
Media/Communications Partners III
Ltd Partnership 128,747 52,725 118,529 118,529 418,529
OneLiberty Fund III, L.P. 1,072,889 439,374 987,739 987,738 3,487,740
Toronto Dominion Investments, Inc. 1,072,889 439,374 987,739 987,738 3,487,740
Northwood Capital Partners
Northwood Ventures LLC 600,818 246,050 553,134 553,134 1,953,134
Northwood Capital Partners LLC 150,204 61,512 138,283 138,283 488,284
Aggregate Commitment 39,375,005 16,125,005/(1)/ 36,250,005 36,249,985 128,000,000
Cumulative Equity Funding 39,375,005 65,500,010 91,750,015 128,000,000
Note:
/(1)/ If the non-supplemental funding is not simultaneous with the initial cash
equity funding, then the 2nd equity draw (12/31/98) may have to be
increased to offset any shortfall in the funding of 1998 Operating
Losses.
/(2)/ The 2/nd/ equity draw will coincide with the 1998 fiscal year end
(12/31/98). Subsequent equity fundings will coincide with the 24 and 36
month anniversary of the closing.
/(3)/ CB Capital Investors, Inc. equity funding commitment may be increased by
1.0M$ in the event management stockholders elect to purchase 1.0M$ of
Series C Preferred Stock and Class A Common Stock. In such event, the
funding requirement of each of the other equity investors will be
proportionately reduced by 1 M$.
/(4)/ JH Whitney & Co. will allocate the commitment amongst the following
entities: Whitney Equity Partners, L.P., J.H. Whitney III, L.P. and
Whitney Strategic Partners III, L.P.
Notice Addresses
- ----------------
CB Capital Investors. L.P.
380 Madison Avenue, 12th Floor
New York, NY 10017
Attn: Michael Hannon
Fax: (212) 622-3101
Private Equity Investors III, L.P.
540 Madison Avenue, 36th Floor
New York. NY 10022
Attn: Rohit M. Desai
Fax: (212) 752-7807
Hoak Communications Partners, L.P.
HCP Capital Fund, L.P.
One Galleria Tower
13355 Noel Road, Suite 1050
Dallas, Texas 75240
Attn: James Hoak
Fax: (972) 960-4899
Whitney Equity Partners, L.P.
J.H. Whitney III, L.P.
Whitney Strategic Partners III, L.P.
177 Broad Street, 15th Floor
Stamford, Connecticut 06901
Attn: William Laverack, Jr.
Fax: (203) 973-1422
Entergy Technology Holding Company
Three Financial Centre
900 South Shackleford Road
Suite 210
Little Rock, Arkansas 72211
Attn: John A. Brayman
Fax: (501) 954-5095
Northwood Ventures LLC
Northwood Capital Partners LLC
75 State Street, Suite 2500
Boston, MA 02109
Attn: James F. Wade
Fax: (617) 345-7201
One Liberty Fund III, L.P.
One Liberty Fund IV, L.P.
One Liberty Square
Boston. MA 02109
Attn: Joseph T. McCullen
Fax: (617) 423-1765
Toronto Dominion Investments, Inc.
31 West 52nd Street
New York, NY 10019-6101
Attn: Brian Rich
Fax: (212) 974-8429
(with a copy to)
Toronto Dominion Investments, Inc.
909 Fannin
Suite 1700
Houston, Texas 77010
Attn: Martha Gariepy
Fax: (713) 652-2647
Northwood Ventures LLC
Northwood Capital Partners LLC
485 Underhill Boulevard, Suite 205
Syosset, New York 11791-3419
Attn: Peter Schiff
Fax: (516) 364-0879
SCHEDULE II-A
TeleCorp Equity Interests
of TeleCorp Investors/1/
- -----------------------------------------------------------------------------------------------------------------------------------
TeleCorp Investors: Class A Shares Class B Shares Class C Shares Series A Preferred Shares
- -----------------------------------------------------------------------------------------------------------------------------------
One Liberty Fund III L.P. 837.449 2273.069 76.567
Gilde Investment Fund B.V. 8.457 22.962 .773
Northwood Ventures 289.832 1837.018 46.404
Northwood Capital Partners LLC 72.700 459.013 11.601
CB Capital Investors, L.P. 362.531 2296.031 58.005
TeleCorp Investment Corp., L.L.C. - 2658.563 58.005
Media/Communications Investors Limited
Partnership 14.501 91.841 2.320
Media/Communications Partners III Limited
Partnership 348.030 2204.190 55.685
Entergy Technology Holding Company - 1973.717 684.846 58.005
Total
1933.369 1973.717 12527.533 367.365
- -----------------------------------------------------------------------------------------------------------------------------------
/1/ TeleCorp Equity Interests also include the shares of Series A Preferred
Stock of TeleCorp to be issued upon conversion of Bridge Notes pursuant to
Section 3.2(b)(ii) of the Securities Purchase Agreement.
Notice Addresses
----------------
CB Capital Investors. L.P.
380 Madison Avenue, 12th Floor
New York, NY 10017
Attn: Michael Hannon
Fax: (212) 622-3101
Equity-Linked Investors-II
Private Equity Investors III, L.P.
540 Madison Avenue, 36/th/ Floor
New York, NY 10022
Attn: Rohit M. Desia
Fax: (212) 752-7807
Hoak Communications Partners, L.P.
HCP Capital Fund, L.P.
One Galleria Tower
13355 Noel Road, Suite 1050
Dallas, Texas 75240
Attn: James Hoak
Fax: (972) 960-4899
Whitney Equity Partners, L.P.
J.H. Whitney III, L.P.
Whitney Strategic Partners III, L.P.
177 Broad Street, 15th Floor
Stamford, Connecticut 06901
Attn: William Laverack, Jr.
Fax: (203) 973-1422
Entergy Technology Holding Company
Three Financial Centre
900 South Shackleford Road
Suite 210
Little Rock, Arkansas 72211
Attn: John A. Brayman
Fax: (501) 954-5095
Media/Communications Partners III Limited Partnership
Media/Communications Investors Limited Partnership
75 State Street, Suite 2500
Boston. MA 02109
Ann: James F. Wade
Fax: (617) 345-7201
Gilde International B.V.
One Liberty Fund III, L.P.
One Liberty Fund IV, L.P.
One Liberty Square
Boston, MA 02109
Attn: Joseph T. McCullen
Fax: (617)423-1765
Toronto Dominion Investments, Inc.
31 West 52nd Street
New York, NY 10019-6101
Attn: Brian Rich
Fax: (212) 974-8429
(with a copy to)
Toronto Dominion Investments, Inc.
909 Fannin
Suite 1700
Houston, Texas 77010
Attn: Martha Gariepy
Fax: (713) 652-2647
Northwood Ventures LLC
Northwood Capital Partners LLC
485 Underhill Boulevard, Suite 205
Syosset, New York 11791-3419
Attn: Peter Schiff
Fax: (516) 364-0879
TeleCorp Investments Corp., LLC
1110 N. Glebe Road, Suite 300
Arlington, Virginia 22201
Attn: General Counsel
Fax: (703) 522 4873
SCHEDULE II-B
TeleCorp Equity Interest
of Management Stockholders
--------------------------
Gerald T. Vento 1,788.488 Class A Shares
Thomas H. Sullivan 1,111.763 Class A Shares
SCHEDULE III-A
AT&T PCS Licenses
-----------------
- --------------------------------------------------------------------------------
Market Number Frequency Block License Description
- --------------------------------------------------------------------------------
M008 A Boston-Providence
- --------------------------------------------------------------------------------
M019 A St. Louis
- --------------------------------------------------------------------------------
M026 A Louisville-Lexington-Evansville
- --------------------------------------------------------------------------------
B032 D Baton Rouge
- --------------------------------------------------------------------------------
B236 D Lafayette-New Iberia
- --------------------------------------------------------------------------------
B320 D New Orleans
- --------------------------------------------------------------------------------
TWR Licenses
------------
- --------------------------------------------------------------------------------
Market Number Frequency Block License Description
- --------------------------------------------------------------------------------
M040 A Little Rock
- --------------------------------------------------------------------------------
M028 B Memphis-Jackson
- --------------------------------------------------------------------------------
United States of America
Federal Communications Commission
RADIO STATION AUTHORIZATION
Commercial Mobile Radio Services
Personal Communications Service - Broadband
AT&T WIRELESS PCS INC. Call Sign: KNLF216
1150 Connecticut Avenue, Market: M008 Boston-Providence
N.W., 4/th/ Floor Channel Block: A
Washington, DC 20036 File Number: 00013-CW-L-95
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.............................................June 23, 1995
Five-year Build Out Date.......................................June 23, 2000
Expiration Date................................................June 23, 2005
_____________________________________________________________
CONDITIONS:
Pursuant to Section 309(h) of the Communications Act of 1914, 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
licensee 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
________________________________________________________________________________
Issue Date: June 23, 1995 Page 1 of 2
FCC Form 463a
KNLF216 AT&T WIRELESS PCS INC. 00013-CW-L-95
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 subject to the condition that the remaining
balance of the winning bid amount will be paid in accordance with Part 1 of the
Commission's rules, 47 C.F.R. Part 1.
Issue Date: June 23, 1995 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
AT&T WIRELESS PCS INC. Call Sign: KNLF237
1150 Connecticut Avenue, Market: M019
N.W., 4/th/ Floor St. Louis
Washington, DC 20036 Channel Block: A
File Number: 0034-CW-L-95
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 .......................................... June 23, 1995
Five-year Build Out Date .................................... June 23, 2000
Expiration Date ............................................. June 23, 2005
_________________________________________________________
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.
________________________________________________________________________________
KNLF237 AT&T WIRELESS PCS INC. 00034-CW-L-95
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 subject to the condition that the licensee shall
comply with Section 24.204 of the Commission's rules, 47 C.F.R. 24.204.
This authorization is subject to the condition that the remaining
balance of the winning bid amount will be paid in accordance with Part 1 of the
Commission's rules, 47 C.F.R. Part 1.
Issue Date: June 23, 1995 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
AT&T WIRELESS PCS INC. Call Sign: KNLF251
1150 Connecticut Avenue, N.W., Market: M026
4/th/ Floor Louisville-Lexington-Evansville
Washington, DC 20036 Channel Block: A
File Number: 0048-CW-L-95
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 ......................................... June 23, 1995
Five-year Build Out Date ................................... June 23, 2000
Expiration Date............................................. June 23, 2005
________________________________________________________
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.
________________________________________________________________________________
Issue Date: June 23, 1995 Page 1 of 2
FCC Form 463a
KNLF251 AT&T WIRELESS PCS INC. 00048-CW-L-95
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 subject to the condition that the remaining
balance of the winning bid amount will be paid in accordance with Part 1 of the
Commission's rules, 47 C.F.R. Part 1.
Issue Date: June 23, 1995 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
AT&T WIRELESS PCS INC., N/A Call Sign: KNLG381
1150 Connecticut Avenue, N.W., Market: B032
4/th/ Floor Baton Rouge, LA
Washington, DC 20036 Channel Block: D
File Number: 01519-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 ......................................... April 28, 1997
Five-year Build Out Date ................................... April 28, 2002
Expiration Date ............................................ April 28, 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.
________________________________________________________________________________
Issue Date: April 28, 1997 Page 1 of 2
FCC Form 463B
KNLF381 AT&T WIRELESS PCS INC. 01519-CW-L-97
CONDITIONS:
Grant of this license is without prejudice to any future enforcement
action the Commission may determine is appropriate regarding the bidding
activities of AT&T Wireless PCS, Inc. in the D, E, and F block PCS auction.
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 subject to the condition that the remaining
balance of the winning bid amount will be paid in accordance with Part 1 of the
Commission's rules, 47 C.F.R. Part 1.
Issue Date: April 28, 1997
Page 2 of 2
United States of America
Federal Communications Commission
RADIO STATION AUTHORIZATION
Commercial Mobile Radio Services
Personal Communications Service - Broadband
AT&T WIRELESS PCS INC.,N/A Call Sign: KNLG462
1150 Connecticut Avenue, Market: B236
N.W., 4th Floor Lafayette-New Iberia,LA
Washington, DC 20036 Channel Block: D
File Number: 01700-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............................................ April 28, 1997
Five-year Build Out Date...................................... April 28, 2002
Expiration Date............................................... April 28, 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.
________________________________________________________________________________
Issue Date: April 28, 1997 Page 1 of 2
FCC Form 463B
KNLF462 AT&T WIRELESS PCS INC. 01700-CW-L-97
CONDITIONS:
Grant of this license is without prejudice to any future enforcement
action the Commission may determine is appropriate regarding the bidding
activities of AT&T Wireless PCS, Inc. in the D, E, and F block PCS auction.
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 subject to the condition that the remaining
balance of the winning bid amount will be paid in accordance with Part 1 of the
Commission's rules, 47 C.F.R. Part 1.
Issue Date: April 28, 1997
Page 2 of 2
United States of America
Federal Communications Commission
RADIO STATION AUTHORIZATION
Commercial Mobile Radio Services
Personal Communications Service - Broadband
AT&T WIRELESS PCS INC.,N/A Call Sign: KNLG500
1150 Connecticut Avenue, Market: B320
N.W.,4/th/ Floor New Orleans,LA
Washington, DC 20036 Channel Block: D
File Number: 01738-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........................................ April 28, 1997
Five-year Build Out Date.................................. April 28, 2002
Expiration Date.......................................... April 28, 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.
________________________________________________________________________________
Issue Date: April 28, 1997 Page 1 of 2
FCC Form 463B
KNLG500 AT&T WIRELESS PCS INC. 01738-CW-L-97
CONDITIONS:
Grant of this license is without prejudice to any future enforcement
action the Commission may determine is appropriate regarding the bidding
activities of AT&T Wireless PCS, Inc. in the D, E, and F block PCS auction.
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 subject to the condition that the remaining
balance of the winning bid amount will be paid in accordance with Part 1 of the
Commission's rules, 47 C.F.R. Part 1.
Issue Date: April 28, 1997 Page 2 of 2
FCC Form 463B
United States of America
Federal Communications Commission
RADIO STATION AUTHORIZATION
Commercial Mobile Radio Services
Personal Communications Service - Broadband
TWR CELLULAR,INC. Call Sign: KNLF256
1150 Connecticut Avenue, Market: M028
N.W. 4/th/ Floor MEMPHIS-JACKSON
Washington, DC 20036 Channel Block: B
File Number: 00053-CW-L-95
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......................................... June 23, 1995
Five-year Build Out Date................................... June 23, 2000
Expiration Date............................................ June 23, 2005
________________________________________________________________
CONDITIONS:
________________________________________________________________________________
Issue Date: January 9, 1997 Page 1 of 2
FCC Form 463a
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.
________________________________________________________________________________
Issue Date: January 9, 1997 Page 1 of 2
FCC Form 463a
KNLF256 TWR CELLULAR, INC. 00053-CW-L-95
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 subject to the condition that the remaining
balance of the winning bid amount will be paid in accordance with Part 1 of the
Commission's rules, 47 C.F.R. Part 1.
________________________________________________________________________________
Issue Date: January 9, 1997 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
TWR CELLULAR, INC. Call Sign: KNLF279
1150 Connecticut Avenue, Market: M040
N.W. 4/th/ Floor LITTLE ROCK
Washington, DC 20036 Channel Block: A
File Number: 00076-CW-L-95
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.......................................... June 23, 1995
Five-year Build Out Date.................................... June 23, 2000
Expiration Date............................................. June 23, 2005
________________________________________________________
CONDITIONS:
________________________________________________________________________________
Issue Date: January 9, 1997 Page 1 of 2
FCC Form 463a
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.
________________________________________________________________________________
Issue Date: January 9, 1997 Page 2 of 2
FCC Form 463a
KNLF279 TWR CELLULAR, INC. 00076-CW-L-95
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 subject to the condition that the remaining
balance of the winning bid amount will be paid in accordance with Part 1 of the
Commission's rules, 47 C.F.R. Part 1.
________________________________________________________________________________
Issue Date: January 9, 1997 Page 2 of 2
FCC Form 463a
SCHEDULE III-B
TeleCorp Licenses
- --------------------------------------------------------------------------------
Market Number Freq. Block License Description
- --------------------------------------------------------------------------------
B034 F Beaumont-Port Arthur, TX
- --------------------------------------------------------------------------------
B257 F Little Rock, AR
- --------------------------------------------------------------------------------
B290 F Memphis, TN
- --------------------------------------------------------------------------------
B320 F New Orleans, LA
- --------------------------------------------------------------------------------
United States of America
Federal Communications Commission
RADIO STATION AUTHORIZATION
Commercial Mobile Radio Services
Personal Communications Service - Broadband
TELECORP HOLDING CORP., INC. Call Sign: KNLG228
1110 NORTH GLEBE ROAD Market: B034
SUITE 850 BEAUMONT-PORT ARTHUR, TX
ARLINGTON, VA 22201 Channel Block: F
File Number: 00139-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......................................... April 28, 1997
Ten Year Build Out Date.................................... April 28, 2007
Expiration Date............................................ April 28, 2007
__________________________________________________________
CONDITIONS:
Pursuant to Section 309(h) of the Communications Act of 1934, as
amended, (47 U.S.C. 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
________________________________________________________________________________
Issue Date: 11/26/97 Page 1 of 2
FCC Form 4638
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. 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. 606).
(Conditions continued on Page 2)
______________________________________________________________________
WAIVERS:
No waivers associated with this authorization.
________________________________________________________________________________
Issue Date: 11/26/97 Page 2 of 2
KNLG228 TELECORP HOLDING CORP., INC. 001390-CW-L-97
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: 11/26/97 Page 2 of 2
United States of America
Federal Communications Commission
RADIO STATION AUTHORIZATION
Commercial Mobile Radio Services
Personal Communications Service - Broadband
TELECORP HOLDING CORP., INC. Call Sign: KNLH628
1110 NORTH GLEBE ROAD Market: B290
SUITE 850 MEMPHIS, TN
ARLINGTON, VA 22201 Channel Block: F
File Number: 00870-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.......................................... April 28, 1997
Ten Year Build Out Date..................................... April 28, 2007
Expiration Date............................................. April 28, 2007
__________________________________________________________
CONDITIONS:
Pursuant to Section 309(h) of the Communications Act of 1934, as
amended, (47 U.S.C. 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
________________________________________________________________________________
Issue Date: 11/26/97 Page 1 of 2
FCC Form 4638
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. 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. 606).
(Conditions continued on Page 2)
______________________________________________________________________
WAIVERS:
No waivers associated with this authorization.
________________________________________________________________________________
Issue Date: 11/26/97 Page 2 of 2
KNLH628TELECORP HOLDING CORP., INC. 00870-CW-L-97
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: 11/26/97 Page 2 of 2
United States of America
Federal Communications Commission
RADIO STATION AUTHORIZATION
Commercial Mobile Radio Services
Personal Communications Service - Broadband
TELECORP HOLDING CORP., INC. Call Sign: KNLH626
1110 NORTH GLEBE ROAD Market: B257
SUITE 850 LITTLE ROCK, AR
ARLINGTON, VA 22201 Channel Block: F
File Number: 00868-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.......................................... April 28, 1997
Ten Year Build Out Date..................................... April 28, 2007
Expiration Date............................................. April 28, 2007
_____________________________________________________________
CONDITIONS:
Pursuant to Section 309(h) of the Communications Act of 1934, as
amended, (47 U.S.C. 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.
________________________________________________________________________________
Issue Date: 11/26/97 Page 1 of 2
FCC Form 4638
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. 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. 606).
(Conditions continued on Page 2)
______________________________________________________________________
WAIVERS:
No waivers associated with this authorization.
________________________________________________________________________________
Issue Date: 11/26/97 Page 2 of 2
FCC Form 4638
KNLH626TELECORP HOLDING CORP., INC. 00868-CW-L-97
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: 11/26/97 Page 2 of 2
FCC Form 4638
United States of America
Federal Communications Commission
RADIO STATION AUTHORIZATION
Commercial Mobile Radio Services
Personal Communications Service - Broadband
TELECORP HOLDING CORP., INC. Call Sign: KNLH629
1110 NORTH GLEBE ROAD Market: B320
SUITE 850 NEW ORLEANS, LA
ARLINGTON, VA 22201 Channel Block: F
File Number: 00871-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......................................... April 28, 1997
Ten Year Build Out Date.................................... April 28, 2007
Expiration Date............................................ April 28, 2007
___________________________________________________________
CONDITIONS:
Pursuant to Section 309(h) of the Communications Act of 1934, as
amended, (47 U.S.C. 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. 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. 606).
(Conditions continued on Page 2)
______________________________________________________________________
WAIVERS:
No waivers associated with this authorization.
________________________________________________________________________________
KNLH629TELECORP HOLDING CORP., INC. 00871-CW-L-97
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 IV
-----------
Company Territory/1/
--------------------
I. From New Orleans MTA BTA Market Designator
-------------------- ---------------------
Baton Rouge, LA 32
Lafayette-New Iberia, LA 236
New Orleans, LA 320
II. From Houston, MTA 34
-----------------
Beaumont, TX
III. From St. Louis MTA
------------------
Cape Giradeau-Sikeston, MO 66
Carbondale-Marion, IL 67
Columbia, MO 90
Jefferson City, MO 217
Kirksville, MO 230
Mount Vernon-Centralia, IL 308
Poplar Bluff, MO 355
Quincy, IL-Hannibal, MO 367
Rolla, MO 383
Portions of Springfield, MO BTA: 428
Camden County, MO
Cedar County, MO
Dallas County, MO
Douglas County, MO
Hickory County, MO
Laclede County, MO
Polk County, MO
Stone County, MO
______________________
/1/ The Company Territory is more particularly described in the FCC
applications filed in connection with the transfer of FCC PCS Licenses to the
Licensee.
Taney County, MO
Texas County, MO
Webster County, MO
Wright County, MO
West Plains, MO 470
IV. From Little Rock MTA BTA Market Designator
-------------------- ---------------------
El Dorado-Magnolia-Camden, AR 125
Fayetteville-Springdale-Rogers, AR 140
Rogers, AR
Fort Smith, AR 153
Harrison, AR 182
Hot Springs, AR 193
Joesboro-Paragould, AR 219
Little Rock, AR 257
Pine Bluff, AR 348
Russellville, AR 387
V. From Memphis-Jackson MTA
------------------------
Blytheville, AR 49
Dyersburg-Union City, TN 120
Jackson, TN 211
Portions of Memphis, TN BTA: 290
Crittendon County, AR
Cross County, AR
Lee County, AR
Phillips County, AR
St. Francis County, AR
Benton County, MS
Coahoma County, MS
DeSoto County, MS
Grenada County, MS
Lafayette County, MA
Marshall County, MS
Panola County, MS
Quitman County, MS
Tallahatchie County, MS
Tate County, MS
Tunica County, MS
Yalobusha County, MS
Fayette County, TN
Hardeman County, TN
Haywood County, TN
Lauderdale County, TN
Shelby County, TN
Tipton County, TN
VI. Boston-Providence MTA BTA Market Designator
--------------------- ---------------------
Boston, MA 51
Rockingham County, NH
Strafford County, NH
Hyannis, MA 201
Manchester, NH 274
Portions of Worcester County, MA/2/ 480
VII. From Louisville-Lexington-Evansville MTA
----------------------------------------
Evansville, IN BTA 135
Paducah-Murray-Mayfield, KY BTA 339
____________________
/2/ The portions of Worcester County are those to the east of the
line described by Points A, B and C on the map included in Schedule 2.1 to this
Agreement.
SCHEDULE V
Equity Issued to Cash Equity Investors,
TeleCorp Investors and Management Stockholders
----------------------------------------------
See revised Schedule V (Share Allocation with Supplemental and Share
Allocation without Supplemental), in Agreement dated as of July 17, 1998, by and
among AT&T Wireless PCS Inc., TWR Cellular, Incl, the Cash Equity Investors, the
TeleCorp Investors, the Management Stockholders and TeleCorp PCS, Inc.
Schedule 1.1
Sources & Uses of Cash - Presigning & Pre/Post Closing
Total SOURCES OF CASH
Initial Equity Investor Funding 3,673,650
December 1997 pre-signing loan 2,808,500
January 1998 pre-signing loan 5,297,700
Mandatory repayments to TeleCorp
License Companies (1,524,900)
--------- -----------
TOTAL SOURCES of CASH - Pre-Signing 6,482,150 3,772,800
Cumulative 6,482,150 10,254,950
Total USES OF CASH
Interconnect 67,941 271,763 339,704
Site Operating Expenses 0 166,750 1,196,719 1,675,407 1,914,751 4,953,627
Engineering & Implementation 114,947 1,051,103 1,751,838 2,102,206 2,102,206 7,122,299
Billing 0 0 0 6,202 9,438 15,730
Customer Care 0 0 0 378,491 567,736 946,227
Sub Total Operational 114,947 1,217,853 2,948,557 4,230,336 4,865,893 13,377,586
Admin/Financial/Corp/Legal/Bad Debt 247,733 1,716,693 4,713,609 5,656,330 6,632,454 18,966,820
Marketing & Sales 104,647 474,657 1,186,642 1,423,970 1,661,298 4,851,214
Equipment Costs 0 0 0 0 315,352 315,352
------------ ---------- ---------- ----------- ----------- ------------
TOTAL Operating Expenses 467,327 3,400,203 8,848,807 11,310,636 13,474,998 37,510,972
Capital Expenditures 3,716,689 11,837,116 44,096,139 74,802,884 41,114,348 175,567,076
Cash Interest Payments 0 75,649 1,475,393 1,067,594 2,687,905 6,106,541
Financing Fees 0 0 2,250,000 5,893,750 46,875 8,190,625
AT&T Licenses 0 0 21,000,000 0 0 21,000,000
FCC License Deposits 2,298,234 0 0 0 0 2,298,234
Cash Interest Income 0 (766) (100,097) (521,433) (1,108,124) (1,730,410)
------------ ---------- ---------- ----------- ----------- ------------
TOTAL USES of CASH 6,482,150 15,321,702 77,570,251 93,353,431 56,216,003 248,943,038
Cumulative 6,482,150 21,803,352 99,373,603 192,727,035 248,943,038
Notes: (1) Company expects to enter into a 5-year supply contract in the month
of February with an infrastructure vendor in the approximate amount of
282M$, subject to obtaining the consent of management. AT&T and Cash
Equity Investors representing 66.696% of the Aggregate Commitment of
all cash Equity Investors (excluding any interested Investors). As
part of this supply contract, the company will receive 40M$ of non
recourse purchase money financing.
(2) Company expects to enter into a 20M$ microwave relocation and a 16M$
site acquisition and civil construction management contract with Entel
Technologies, Inc. in the month of February subject to obtaining the
consent of AT&T and Cash Equity Investors representing 66.666% of the
Aggregate Commitment of all Cash Equity Investors (excluding any
interested Investors).
SCHEDULE 2.1
Description of Licenses
-----------------------
Description of Partitioned Area and Disaggregated Spectrum
The St. Louis MTA has a population of 4,663,926./1/
AT&T proposes to assign the 20 MHz of A Block broadband PCS spectrum
at 1850-1860 MHz and 1930-1940 MHz to Telecorp PCS, L.L.C. in the following BTAs
and/or other areas within the St. Louis MTA:
- -------------------------------------------------------------------------------
Area Name Area Designator Area Population
- -------------------------------------------------------------------------------
Carbondale-Marion, B. BTA B067 209,497
- -------------------------------------------------------------------------------
Columbia MO BTA B090 190,536
- -------------------------------------------------------------------------------
Cape Girardeau-Sikeston, MO BTA B066 181,795
- -------------------------------------------------------------------------------
Quincy, IL-Hannibal MO BTA B367 177,213
- -------------------------------------------------------------------------------
Poplar Bluff, MO BTA B355 148,240
- -------------------------------------------------------------------------------
Jefferson City, MO BTA B217 141,404
- -------------------------------------------------------------------------------
Mount Vernon-Centralia, IL B308 199,236
- -------------------------------------------------------------------------------
Rolla, MO BTA B383 98,233
- -------------------------------------------------------------------------------
West Plains, MO BTA B470 67,165
- -------------------------------------------------------------------------------
Kirksville, MO BTA B230 55,563
- -------------------------------------------------------------------------------
Camden County, MO 27,495
- -------------------------------------------------------------------------------
Cedar County, MO 12,093
- -------------------------------------------------------------------------------
Dallas County, MO 12,646
- -------------------------------------------------------------------------------
Douglas County, MO 11,376
- -------------------------------------------------------------------------------
Hickory County, MO 7,335
- -------------------------------------------------------------------------------
Laclede County, MO 27,158
- -------------------------------------------------------------------------------
Polk County, MO 21,826
- -------------------------------------------------------------------------------
Stone County, MO 19,078
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Taney County, MO 25,561
- -------------------------------------------------------------------------------
Texas County, MO 21,476
- -------------------------------------------------------------------------------
Webster County, MO 23,753
- -------------------------------------------------------------------------------
Wright County, MO 16,758
- -------------------------------------------------------------------------------
Total Population 1,615,987
- -------------------------------------------------------------------------------
____________________
/1/ MTA and BTA population figures in this exhibit were taken from
April 1, 1990 U.S. Census, U.S. Department of Commerce, Bureau of Census, as
published in the Summary of Licenses to Be Auctioned from the August 2, 1995 C
Block Bidder Information Package. Population of non-MTA and BTA areas was taken
from April 1, 1990 U.S. Census.
AT&T proposes to retain the 10MHz of A Block broadband PCS spectrum at
1850-1865 MHz and 1940-1945 MHz in the following BTAs and areas within the St.
Louse MTA:
- --------------------------------------------------------------------------------
Area Name Area Designator Area Population
- --------------------------------------------------------------------------------
Carbendale-Marion, IL BTA B067 209,497
- --------------------------------------------------------------------------------
Columbia, MO BTA B090 190,536
- --------------------------------------------------------------------------------
Cape Girardeau-Sikeston, MO BTA B066 181,795
- --------------------------------------------------------------------------------
Quincy, IL-Hannibal, MO BTA B367 177,213
- --------------------------------------------------------------------------------
Poplar Bluff, MO BTA B355 148,240
- --------------------------------------------------------------------------------
Jefferson City, MO BTA B217 141,404
- --------------------------------------------------------------------------------
Mount Vernon-Centralia IL B308 119,286
- --------------------------------------------------------------------------------
Rolla, MO BTA B383 98,233
- --------------------------------------------------------------------------------
West Plains, MO BTA B470 67,165
- --------------------------------------------------------------------------------
Kirksville, MO BTA B230 55,563
- --------------------------------------------------------------------------------
Camden County, MO 27,495
- --------------------------------------------------------------------------------
Cedar County, MO 12,093
- --------------------------------------------------------------------------------
Dallas County, MO 12,646
- --------------------------------------------------------------------------------
Douglas County, MO 11,876
- --------------------------------------------------------------------------------
Hickory County, MO 7,335
- --------------------------------------------------------------------------------
Laclede County, MO 27,158
- --------------------------------------------------------------------------------
Polk County, MO 21,826
- --------------------------------------------------------------------------------
Stone County, MO 19,078
- --------------------------------------------------------------------------------
Taney County, MO 25,561
- --------------------------------------------------------------------------------
Texas County, MO 21,476
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Webster County, MO 23,753
- --------------------------------------------------------------------------------
Wright County, MO 16,758
- --------------------------------------------------------------------------------
Total Population 1,615,987
- --------------------------------------------------------------------------------
AT&T proposes to retain the full 30 MHz of A Block broadband PCS
spectrum in the following BTAs and areas within the St. Louis MTA:
- --------------------------------------------------------------------------------
Area Name Area Designator Area Population
- --------------------------------------------------------------------------------
St. Louis, MO BTA B394 2,742,114
- --------------------------------------------------------------------------------
Barry County, MO 27,547
- --------------------------------------------------------------------------------
Christian County, MO 32,644
- --------------------------------------------------------------------------------
Dade County, MO 7,449
- --------------------------------------------------------------------------------
Greene County, MO 207,949
- --------------------------------------------------------------------------------
Lawrence County, MO 30,236
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Total Population 3,047,939
- --------------------------------------------------------------------------------
Description of Partitioned Area and Disaggregated Spectrum
The Louisville-Lexington-Evansville MTA has a population of 3,556,648./1/
AT&T proposes to assign the 20 MHz of A Block broadband PCS spectrum
at 1850-1860 MHz and 1930-1940 MHz to Telecorp PCS, L.L.C. in the following BTAs
and/or other areas within the Louisville-Lexington-Evansville MTA:
- --------------------------------------------------------------------------------
Area Name Area Designator Area Population
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Evansville, IN BTA B135 504,859
- --------------------------------------------------------------------------------
Paducah-Murray-Mayfield, KY BTA B339 217,082
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Total Population 721,941
- --------------------------------------------------------------------------------
____________________
/1/ MTA and BTA population figures in this exhibit were taken from
April 1, 1990 U.S. Census, U.S. Department of Commerce, Bureau of Census, as
published in the Summary of Licenses to Be Auctioned from the August 2, 1995 C
Block Bidder Information Package. Population of non-MTA and BTA areas was taken
from April 1, 1990 U.S. Census.
AT&T proposes to retain the 10 MHz of A Block broadband PCS spectrum at
1860-1865 MHz and 1940-1945 MHz in the following BTAs and areas within the
Louisville-Lexington-Evansville MTA:
- -------------------------------------------------------------------------------------------
Area Name Area Designator Area Population
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
Evansville, IN BTA B135 504,859
- -------------------------------------------------------------------------------------------
Paducah-Murray-Mayfield KY BTA B339 217,082
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
Total Population 721,941
- -------------------------------------------------------------------------------------------
AT&T proposes to retain the full 30 MHz of A Block broadband PCS
spectrum in the following BTAs and areas within the Louisville-Lexington-
Evansville MTA:
- -------------------------------------------------------------------------------------------
Area Name Area Designator Area Population
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
Louisville, KY BTA B263 1,852,955
- -------------------------------------------------------------------------------------------
Lexington, KY BTA B252 316,101
- -------------------------------------------------------------------------------------------
Bowling Green-Giasgow, KY BTA B052 222,748
- -------------------------------------------------------------------------------------------
Owensboro, KY BTA B338 157,104
- -------------------------------------------------------------------------------------------
Cerbin, KY BTA B098 128,186
- -------------------------------------------------------------------------------------------
Somerset, KY BTA B423 111,487
- -------------------------------------------------------------------------------------------
Madisonville, KY BTA B273 46,126
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
Total Population 2,834,707
- -------------------------------------------------------------------------------------------
/2/Description of Partitioned Area and Disaggregated Spectrum
The Boston-Providence MTA has a population of 9,452,712./3/
AT&T proposes to assign the 20 MHz of A Block broadband PCs spectrum
at 1850-1860 MHz and 1930-1940 MHz to Telecorp PCS, L.L.C. in the following BTAs
and/or other areas within the Boston-Providence MTA:
- -------------------------------------------------------------------------------------------
Area Name Area Designator Area Population
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
Rockingham County, NH 245,845
- -------------------------------------------------------------------------------------------
Strafford County, NH 104,233
- -------------------------------------------------------------------------------------------
Hyannis, MA B201 204,256
- -------------------------------------------------------------------------------------------
Manchester-Nashua-Concord, NH BTA B274 540,704
- -------------------------------------------------------------------------------------------
Portions of Worcester County, MA/4/ 676,837
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
Total Population 1,771,875
- -------------------------------------------------------------------------------------------
______________________
/2/ 430 Form information for Telecorp PCS, Inc. is included in
the 430 Form or Telecorp PCS, L.L.C .
/3/ MTA and BTA population figures in this exhibit were taken
from April 1, 1990 U.S. Census, U.S. Department of Commerce, Bureau of Census,
as published in the Summary of Licenses to Be Auctioned from the August 2, 1995
C Block Bidder Information Package. Population of non-MTA and BTA areas was
taken from April 1, 1990 U.S. Census.
/4/ The portions of Worcester County are those to the west of the
line described by points A, B and C on the map of Worcester County attached
hereto.
AT&T proposes to retain the 10 MHz of A Block broadband PCS spectrum
at 1860-1865 MHz and 1940-1945 MHz in the following BTAs and areas within the
Boston-Providence MTA:
- -------------------------------------------------------------------------------------------
Area Name Area Designator Area Population
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
Rockingham County, NH 245,845
- -------------------------------------------------------------------------------------------
Strafford County, NH 104,233
- -------------------------------------------------------------------------------------------
Hyannis, MA B201 204,256
- -------------------------------------------------------------------------------------------
Manchester-Nashua-Concord, NH BTA B274 540,704
- -------------------------------------------------------------------------------------------
Portions of Worcester County, MA/4/ 676,837
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
Total Population 1,771,875
- -------------------------------------------------------------------------------------------
____________________
/4/ The portions of Worcester County are those to the west of the line
described by points A, B and C on the map of Worcester County attached hereto.
AT&T proposes to retain the full 30 MHz of A Block broadband PCS
spectrum in the following BTAs and areas within the Boston-Providence MTA:
- -------------------------------------------------------------------------------------------------
Area Name Area Designator Area Population
- -------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------
Essex County, MA 670,080
- -------------------------------------------------------------------------------------------------
Middlesex County, MA 1,398,468
- -------------------------------------------------------------------------------------------------
Norfolk County, MA 616,087
- -------------------------------------------------------------------------------------------------
Plymouth County, MA 435,276
- -------------------------------------------------------------------------------------------------
Suffolk County, MA 663,906
- -------------------------------------------------------------------------------------------------
Providence-Pawtucket RI-New B364 1,509,789
Bedford-Fall River MA
- -------------------------------------------------------------------------------------------------
Springfield-Holyoke, MA B274 672,970
- -------------------------------------------------------------------------------------------------
Portland-Brunswick, ME B357 471,614
- -------------------------------------------------------------------------------------------------
Bangor, ME B030 316,838
- -------------------------------------------------------------------------------------------------
Lewiston-Auburn, ME B251 221,697
- -------------------------------------------------------------------------------------------------
Lebanon-Claremont, NH B249 167,576
- -------------------------------------------------------------------------------------------------
Waterville-Augusta, ME B465 165,671
- -------------------------------------------------------------------------------------------------
Pittsfield, MA B351 139,352
- -------------------------------------------------------------------------------------------------
Keene, NH B227 111,709
- -------------------------------------------------------------------------------------------------
Presque Isle, ME B363 89,936
- -------------------------------------------------------------------------------------------------
Portions of Worcester County, MA/5/ 32,868
- -------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------
Total Population 7,683,837
- -------------------------------------------------------------------------------------------------
___________________
/5/ The portions of Worcester County are those to the east of the line
described by Points A, B and C on the map attached hereto.
[MAP APPEARS HERE]
Description of Disaggregated Spectrum
TWR proposes to assign the 20 MHz of A Block broadband PCS spectrum at
1850-1860 MHz and 1930-1940 MHz to Telecorp PCS, L.L.C. in the entire Little
Rock MTA.
TWR proposes to retain the 10 MHz of A Block broadband PCS spectrum at
1860-1865 MHz and 1940-1945 MHz in the entire Little Rock MTA.
25
Description of Partitioned Area and Disaggregated Spectrum
The Memphis-Jackson MTA has a population of 3,465,226./1/
TWR proposes to assign the 20 MHz of B Block broadband PCS spectrum at
1870-1880 MHz and 1950-1960 MHz to Telecorp PCS, L.L.C. in the following BTAs
and other areas within the Memphis-Jackson MTA.
- -----------------------------------------------------------------------------------------------
Area Name Area Designator Area Population
- -----------------------------------------------------------------------------------------------
Blytheville,AR BTA B049 79,446
- -----------------------------------------------------------------------------------------------
Dyersburg-Union city, TN BTA B120 113,943
- -----------------------------------------------------------------------------------------------
Jackson, TN BTA B211 255,379
- -----------------------------------------------------------------------------------------------
Crittendon County, AR/2/ 49,939
- -----------------------------------------------------------------------------------------------
Cross County, AR 19,225
- -----------------------------------------------------------------------------------------------
Lee County, AR 13,053
- -----------------------------------------------------------------------------------------------
Phillips County, AR 28,838
- -----------------------------------------------------------------------------------------------
St. Francis County, AR 28,497
- -----------------------------------------------------------------------------------------------
Benton County, MS 8,046
- -----------------------------------------------------------------------------------------------
Coahoma County, MS 31,665
- -----------------------------------------------------------------------------------------------
DeSoto County, MS 67,910
- -----------------------------------------------------------------------------------------------
Grenada County, MS 21,555
- -----------------------------------------------------------------------------------------------
Lafayette County, MS 31,826
- -----------------------------------------------------------------------------------------------
Marshall County, MS 30,361
- -----------------------------------------------------------------------------------------------
Panola County, MS 29,996
- -----------------------------------------------------------------------------------------------
Quitman County, MS 10,490
- -----------------------------------------------------------------------------------------------
Tallahatchie County, MS 15,210
- -----------------------------------------------------------------------------------------------
Tate County, MS 21,432
- -----------------------------------------------------------------------------------------------
Tunica County, MS 8,164
- -----------------------------------------------------------------------------------------------
Yalobusha County, MS 12,033
- -----------------------------------------------------------------------------------------------
Fayette County, TN 25,559
- -----------------------------------------------------------------------------------------------
Hardeman County, TN 23,377
- -----------------------------------------------------------------------------------------------
Haywood County, TN 19,437
- -----------------------------------------------------------------------------------------------
Lauderdale County, TN 23,491
- -----------------------------------------------------------------------------------------------
Shelby County, TN 826,330
- -----------------------------------------------------------------------------------------------
Tipton County, TN 37,568
- -----------------------------------------------------------------------------------------------
Total Population 1,832,770
- -----------------------------------------------------------------------------------------------
26
___________________________
/1/ MTA and BTA population figures in this exhibit were taken from
the April 1, 1990 U.S. Census, U.S. Department of Commerce, Bureau of Census, as
published in the Summary of Licenses To Be Auctioned - from the August 2, 1995 C
Block Bidder Information Package. Population for non-MTA and BTA areas was
taken from the April 1, 1990 U.S. Census.
/2/ The Arkansas, Mississippi and Tennessee counties listed are part
of the Memphis, TN BTA
27
TWR proposes to retain the 10 MHz of B Block broadband PCS spectrum at
1880-1885 MHz and 1960-1965 MHz in the following BTAs and areas within the
Memphis-Jackson MTA:
- ----------------------------------------------------------------------------------------------
Area Name Area Designator Area Population
- ----------------------------------------------------------------------------------------------
Blytheville,AR BTA B049 79,446
- ----------------------------------------------------------------------------------------------
Dyersburg-Union city, TN BTA B120 113,943
- ----------------------------------------------------------------------------------------------
Jackson, TN BTA B211 255,379
- ----------------------------------------------------------------------------------------------
Crittendon County, AR/3/ 49,939
- ----------------------------------------------------------------------------------------------
Cross County, AR 19,225
- ----------------------------------------------------------------------------------------------
Lee County, AR 13,053
- ----------------------------------------------------------------------------------------------
Phillips County, AR 28,838
- ----------------------------------------------------------------------------------------------
St. Francis County, AR 28,497
- ----------------------------------------------------------------------------------------------
Benton County, MS 8,046
- ----------------------------------------------------------------------------------------------
Coahoma County, MS 31,665
- ----------------------------------------------------------------------------------------------
DeSoto County, MS 67,910
- ----------------------------------------------------------------------------------------------
Grenada County, MS 21,555
- ----------------------------------------------------------------------------------------------
Lafayette County, MS 31,826
- ----------------------------------------------------------------------------------------------
Marshall County, MS 30,361
- ----------------------------------------------------------------------------------------------
Panola County, MS 29,996
- ----------------------------------------------------------------------------------------------
Quitman County, MS 10,490
- ----------------------------------------------------------------------------------------------
Tallahatchie County, MS 15,210
- ----------------------------------------------------------------------------------------------
Tate County, MS 21,432
- ----------------------------------------------------------------------------------------------
Tunica County, MS 8,164
- ----------------------------------------------------------------------------------------------
Yalobusha County, MS 12,033
- ----------------------------------------------------------------------------------------------
28
- ----------------------------------------------------------------------------------------------
Fayette County, TN 25,559
- ----------------------------------------------------------------------------------------------
Hardeman County, TN 23,377
- ----------------------------------------------------------------------------------------------
Haywood County, TN 19,437
- ----------------------------------------------------------------------------------------------
Lauderdale County, TN 23,491
- ----------------------------------------------------------------------------------------------
Shelby County, TN 826,330
- ----------------------------------------------------------------------------------------------
Tipton County, TN 37,568
- ----------------------------------------------------------------------------------------------
Total Populance 1,832,770
----------------------------------------------------------------------------------------------
/3/ The Arkansas, Mississippi and Tennessee counties listed are part
of the Memphis, TN BTA
29
TWR proposes to retain the full 30 MHz of B Block broadband PCS
spectrum in the following BTAs and areas within the Memphis-Jackson MTA:
- --------------------------------------------------------------------------------------------------
Area Name Area Designator Area Population
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
Montgomery County, MS/4/ 12,388
- --------------------------------------------------------------------------------------------------
Jackson, MS BTA B210 615,521
- --------------------------------------------------------------------------------------------------
Tupelo-Corinth, MS BTA B449 291,701
- --------------------------------------------------------------------------------------------------
Greenville-Greenwood, MS BTA B175 213,943
- --------------------------------------------------------------------------------------------------
Meridian, MS BTA B292 200,024
- --------------------------------------------------------------------------------------------------
Columbus-Starkville, MS BTA B094 166,415
- --------------------------------------------------------------------------------------------------
Natchez, MS BTA B315 73,214
- --------------------------------------------------------------------------------------------------
Vicksburg, MS B455 69,250
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
Total Population 1,632,456
- --------------------------------------------------------------------------------------------------
___________________
/4/ Montgomery County is a county within the Memphis, TN BTA.
30
SCHEDULE 4.2
Purchaser Consents
------------------
The execution, delivery and performance of the Agreement will or may
require the following consents, approvals and reviews:
1. The Federal Communications Commission.
2. The Federal Trade Commission/Department of Justice.
3. Various Governmental Authorities with respect to Franchise Laws.
31
SCHEDULE 5.2
Company and Management Stockholder Consents
-------------------------------------------
The execution, delivery and performance of the Agreement will or may
require the following consents, approvals and reviews:
1. The Federal Communications Commission.
2. The Federal Trade Commission/Department of Justice.
3. Various Governmental Authorities with respect to Franchise Laws.
32
SCHEDULE 5.12
Minimum Buildout Schedule
-------------------------
- --------------------------------------------------------------------------------
Year 1/5/ 2.2 million pops (20% of total pops) during the first year.
- --------------------------------------------------------------------------------
The initial deployment consists of launching the core urban
and suburban areas of Memphis and New Orleans.
Memphis
-------
Bartlett, TN
Frayser, TN
Memphis, TN
New Orleans
-----------
Baton Rouge, LA
Kenner, LA
Mandeville,LA
Metairie, LA
New Orleans, LA
Slidell, LA
- --------------------------------------------------------------------------------
Year 2 2.2 million pops (20% of total pops) for an aggregate pop
coverage of 40%.
Year 2 consists of launching New England, Little Rock and
Missouri and enhancing the coverage in all markets during the
remainder of the year. The coverage at the end of year 2 is detailed
below.
Little Rock
-----------
Benton, AR
Conway, AR
Hot Springs, AR
Jonesboro, AR
- --------------------------------------------------------------------------------
_____________________
/5/The years defined as the 12-month periods starting on the date the
FCC approves the transfer of the PCS licenses to TeleCorp PCS.
33
- --------------------------------------------------------------------------------
Little Rock, AR
North Little Rock, AR
Memphis
-------
Brownsville, TN
Jackson, TN
Millington, TN
Tunica, MS
Missouri
--------
Columbia, MO
Jefferson City, MO
New England
-----------
Cape Cod, MA
Concord, NH
Manchester, NH
Nashua, NH
Portsmouth, NH
Worcester, MA
New Orleans
-----------
Lafayette, LA
Covington, LA
Houma, LA
- --------------------------------------------------------------------------------
Year 3 1.65 million pops (15% of total pops) for an aggregate pop
coverage of 55%.
Year 3 consists of building the secondary cities and the
important associated connecting highways.
Little Rock
-----------
Bentonville, AR
Fayetteville, AR
Fort Smith, AR
Pine Bluff, AR
Springdale, AR
Memphis
-------
Covington, TN
Humboldt, TN
Milan, TN
- --------------------------------------------------------------------------------
34
- --------------------------------------------------------------------------------
Missouri
--------
Cape Giradeau, MO
Carbondale, MO
New England
-----------
Dover, NH
Fitchburg, MA
Leominster, MA
Martha's Vineyard, MA
Nantucket, MA
Rochester, NH
New Orleans
-----------
Beaumont, TX
Hammond, LA
- --------------------------------------------------------------------------------
Year 4 1.65 million pops (15% of total pops) for an aggregate pop
coverage of 70%.
Year 4 consists of continuing to expand the secondary cities
as well as enhancing the coverage and capacity of the core areas.
Little Rock
-----------
Malvern, AR
Morrilton, AR
Russellville, AR
Memphis
-------
Batesville MS
Dyersburg, TN
Oxford, MS
Union City, TN
Missouri
--------
Centralia, MO
Mount Vernon, MO
New England
-----------
Expansion of the suburban cores surrounding, Worcester,
Nashua, and Manchester.
New Orleans
-----------
- --------------------------------------------------------------------------------
35
- --------------------------------------------------------------------------------
Expansion of the suburban cores surrounding New Orleans,
Baton Rouge, and Lafayette.
- --------------------------------------------------------------------------------
Year 5 550,000 pops (5% of total pops) for an aggregate of coverage
of 75%.
- --------------------------------------------------------------------------------
For all the markets, year 5 consists of adding capacity
sites and filling in the remaining suburban areas bringing the
total pop coverage to 75%
- --------------------------------------------------------------------------------
36
SCHEDULE 5.16(D)
TeleCorp Financial Statements
37
TeleCorp Holding Corp., Inc.
Balance Sheet
As of January 2, 1998
ASSETS
- ------
Current Assets
Cash & cash equivalents $ 2,567,294
Other current assets 73,734
Total current assets 2,641,028
Property and equipment, net 329,360
Capitalized FCC licenses 9,886,840
Capitalized interest on FCC licenses 131,397
Network under development 3,269,793
Microwave relocation 91,667
Other assets 26,673
-----------
16,376,758
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current Liabilities
Accounts payable 3,179,036
Investor notes payable 2,808,500
Affiliate payable (TMC) 825,966
Affiliate payable net (License companies) 1,527,470
Accrued interest on investor notes payable 6,144
Accrued interest payable - US Government financing 382,935
-----------
Total current liabilities 8,730,051
US Government financing-gross 9,192,938
Unamortized debt discount (1,465,616)
-----------
US Government financing-net 7,727,322
Total Liabilities 16,457,373
-----------
Shareholder's Equity
Common Stock, no par value
--------------------------
19,335 shares issued and outstanding 0
Preferred Stock, $10,000 par value
Series A, 10%, 367.38 shares issued
and outstanding 4,158,308
-----------
Total Capital 4,158,308
Beginning Retained Earnings (203,006)
Current deficit accumulated during development stage (4,035,917)
-----------
16,376,758
===========
38
TeleCorp Holding Corp., Inc.
Income Statement
For the Year Ended January 2, 1998
Expenses
Year to Date
------------
Salary and other related expenses $1,290,010
Legal services 682,190
Professional services 419,594
Travel & entertainment 361,962
Occupancy expenses 180,664
Office postage & miscellaneous other 152,602
Office supplies & equipment 90,628
Marketing expenses 54,734
Repairs and maintenance 24,186
Depreciation 10,561
Franchise fee 1,112
Allocated operating expenses for fiscal January 1997 (100,990)
----------
Total operating expenses 3,167,253
Interest income (12,217)
Interest expense 396,362
----------
Total Net Loss 3,551,398
==========
39
Schedule 6.11
TELECORP PCS, INC.
1998 RESTRICTED STOCK PLAN
1. Purpose. The purpose of this Restricted Stock Plan (the
-------
"Plan") is to advance the interests of TeleCorp PCS, Inc. (the "Company") by
providing an opportunity to selected key employees of the Company and its
subsidiaries to acquire units of securities in the Company ("Units") under this
Plan. By encouraging such ownership, the Company seeks to attract, retain and
motivate employees of superior training, experience and ability.
2. Administration. Except to the extent otherwise provided
--------------
herein, this Plan shall be administered by the Compensation Committee of the
Board of Directors of the Company (the "Committee"). Subject to the provisions
of this Plan, the Committee shall have full power to construe and interpret the
Plan and to establish, amend and rescind rules and regulations for its
administration.
3. Units Subject to the Plan. The number of Units that may be
-------------------------
awarded to key employees under this Plan (the "Grant Shares") shall not exceed
5,505.03 Units consisting of one share of Series E Preferred Stock and
approximately one and eighty-two hundredths (1.82) shares of Class A Voting
Common Stock (collectively, the "Shares") of the Company outstanding from time
to time; provided that the number of Units shall be reduced by 228.13 Units if
the Supplemental Closing (as defined in Exhibit A to the form of Share Grant
Agreement) has not occurred prior to January 23, 2000. Grant Shares shall be
granted pursuant to the rules set forth in Section 5, and shall be subject to
the vesting provisions of Section 6 of the Plan. Any Grant Shares which for any
reason are forfeited pursuant to the vesting provisions of Section 6 may again
be awarded under the Plan to another Participant (as defined in section 4) in
this Plan. Grant Shares shall be Shares (a) issued by the Company out of its
authorized but unissued shares; or (b) acquired by the Company through a
forfeiture pursuant to the vesting provisions of Section 6 of the Plan.
40
4. Eligible Employees. Grant Shares may be awarded to such key employees
------------------
of the Company or of any of its subsidiaries performing the functions described
on Schedule A hereto, as are selected by the Committee (any such selected
----------
employee, a "Participant").
5. Award of Grant Shares. The Committee may, from time to time, make
---------------------
awards of Grant Shares to a Participant in the form of Restricted Shares (as
defined in the following paragraph), in its sole discretion. The Committee
shall, in its sole discretion, determine the number of Grant Shares to be
awarded to a Participant.
Restricted Shares shall consist of Units transferred to Participants
without other payment therefor as additional compensation for their services to
the Company and its affiliates. Restricted Shares shall be subject to such
terms and conditions as the Committee determines appropriate, including, without
limitation, restrictions on sale or other disposition.
6. Vesting.
-------
(a) Grant Shares shall vest in accordance with the vesting
schedule set forth on Schedule B hereto.
----------
(b) With respect to Restricted Shares, the Participant must
remain employed by the Company or one of its subsidiaries during each of
the vesting periods set forth on Schedule B hereto in order for such Grant
----------
Shares to become vested in him. If the Participant fails to satisfy such
requirements, the Participant shall forfeit and transfer to the Company or
one or more persons designated by the Committee all unvested Grant Shares
awarded to him on such date and the Participant shall have no further
rights with respect to such unvested Grant Shares.
(c) Any Grant Shares not granted on or prior to July 17, 2003
shall be awarded to Messrs. Gerald T. Vento and Thomas H. Sullivan, pro
rata in accordance with their stockholdings in the Company received
pursuant to the terms of the Management
41
Agreement by and between the Company and TeleCorp Management Corp., as of the
date of such Management Agreement.
(d) If the Participant's employment with the Company or one of
its subsidiaries terminates prior to full vesting in any Grant Shares
awarded hereunder by reason of his retirement under a retirement plan
maintained by the Company or one of its subsidiaries, the Committee may, in
its discretion, specify that any Grant Shares awarded to the Participant
become vested at that time, at a future date or upon the completion of such
other conditions as the Committee, in its sole discretion, may provide.
7. Terms and Conditions of Grant Shares. Grant Shares awarded under this
------------------------------------
Plan shall be awarded pursuant to written agreements ("Agreements") in the form
attached as Exhibit A for Restricted Shares as such form may be changed from
---------
time to time by the Committee, each of which Agreement shall evidence among its
terms and conditions the following:
(a) Price. Grant Shares shall be awarded for no consideration,
-----
except such minimum consideration as may be required by Delaware law.
(b) Number of Shares. Each Agreement shall specify the number
----------------
of Grant Shares to which it pertains.
(c) Forfeiture of Grant Shares. Each Agreement shall specify
--------------------------
that all or a portion of the Grant Shares shall be subject to forfeiture
provisions specified in Section 6.
8. Nontransferability. Any Grant Shares which are subject to forfeiture
------------------
under the Agreement shall be nontransferable by the Participant except as the
Agreement may otherwise provide.
9. Rights as Shareholder. Except as otherwise provided in this Plan or
---------------------
the Agreement, the Participant shall have all of the rights of a shareholder of
the Company with respect to the Grant Shares registered in his name, including
the right to vote such Grant Shares and receive the dividends and other
distributions paid or made with respect to such Grant Shares.
42
10. Share Dividends; Share Splits; Share Combinations;
--------------------------------------------------
Recapitalization. The Board of Directors of the Company shall make appropriate
- ----------------
adjustment in the maximum number of Shares subject to the Plan to give effect to
any share dividends, share splits, share combinations, recapitalizations and
other similar changes in the capital structure of the Company after the date of
award. The provisions contained in the Plan and in any Agreement shall apply
equally to any other capital shares of the Company, and any other securities,
which may be acquired by the Participant as a result of a share dividend, share
split, share combination, or exchange for other securities resulting from any
recapitalization, reorganization or any other transaction affecting the Grant
Shares.
43
11. Termination or Amendment of Plan. The Board of Directors may at any
--------------------------------
time terminate the Plan or make such changes in or additions to the Plan as
it deems advisable without further action on the part of the shareholders of the
Company, provided:
(a) that no such termination or amendment shall adversely affect
or impair any then issued and outstanding Grant Shares without the
consent of the Participant holding such Grant Shares; and
(b) Section 6 (c) may not be amended without the consent of
Messrs. Vento and Sullivan.
12. Construction of Pronouns. Masculine pronouns used herein shall refer
------------------------
to men or women or both and nouns and pronouns when stated in the singular shall
include the plural and when stated in the plural shall include the singular,
wherever appropriate.
44
Schedule A
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Executive Functions
-------------------
Director, Brand Management
General Manager
Memphis
New Orleans
Little Rock
New England
Vice President, Product Development
Chief Operating Officer
Chief Financial Officer
Vice President, Engineering/Operations
Vice President, Sales/Marketing
Vice President, Information Technology
Schedule B
----------
Vesting Schedule
----------------
TeleCorp Vesting Schedule
-------------------------
Executives Hired Before 1/1/98 Vesting
------------------------------ -------
Commencement Date/6/ 20.0%
Year 1& 2 Build Out Complete/7/ 10.0%
2/nd/ Anniversary of Commencement Date 15.0%
Year 3 Build Out + 60% Pops Coverage 10.0%
3/rd/ Anniversary of Commencement Date 15.0%
4/th/ Anniversary of Commencement Date 15.0%
5/th/ Anniversary of Commencement Date 15.0%
------
100.0%
Executives Hired After 1/1/98 Vesting
----------------------------- -------
1/st/ Anniversary of Employment Date 20.0%
3/rd/ Anniversary of Employment Date 15.0%
4/th/ Anniversary of Employment Date 15.0%
___________________
/6/ Commencement Date means the Closing Date as that term is defined
in that certain Securities Purchase Agreement, dated January 23, 1998, as
amended, by and among the Company, AT&T Wireless PCS, Inc., TWR Cellular, Inc.
and certain Cash Equity Investors, TeleCorp Investors and Management
Stockholders identified therein (the "Securities Purchase Agreement").
/7/ The Build Out Schedule is set forth in Schedule 5.12 of the
Securities Purchase Agreement, a copy of such Schedule 5.12 of which is attached
hereto.
5/th/ Anniversary of Employment Date 15.0%
6/th/ Anniversary of Employment Date 15.0%
Year 1 & 2 Build Out Complete 10.0%
Year 3 Build Out + 60% Pops Coverage 10.0%
-------
100.00%