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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report:
June 23, 1999
---------------------------
OMNIPOINT CORPORATION
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(Exact Name of Registrant as Specified in Charter)
Delaware 0-27442 04-2969720
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(State of Incorporation) (Commission File Number) (IRS Employer
Identification No.)
3 Bethesda Metro Center
Suite 400
Bethesda, MD 20814
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(Address of principal executive offices) (Zip Code)
(301) 951-2500
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(Registrant's telephone number)
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Item 5. Other Events.
------------
On June 23, 1999, Omnipoint Corporation (the "Company"), VoiceStream
Wireless Corporation, a Washington corporation ("VoiceStream") and VoiceStream
Wireless Holding Corporation, a Delaware corporation ("VHC"), entered into an
Agreement and Plan of Reorganization (the "Reorganization Agreement"), pursuant
to the which the Company will be merged with a newly formed, wholly-owned
subsidiary of VHC (the "Merger"). At the effective time of the Merger, each
share of Omnipoint common stock will be exchanged for the right to receive 0.825
shares of VHS common stock plus $8.00 in cash. There will be a cash or share
election option available to the Company's shareholders subject to proration.
The Merger is subject to shareholder approval as well as federal, state and
other regulatory approvals.
In connection with the execution of the Reorganization Agreement, the
Company entered into an agreement (the "Purchase Agreement") with VoiceStream
and Hutchison Telecommunications PCS (USA) Limited, a British Virgin Islands
company ("Hutchison") on June 23, 1999. Pursuant to the Purchase Agreement, the
Company sold 4,271 shares of its Series A Non-Voting Convertible Preferred Stock
(the "Non-Voting Preferred Stock") to each of VoiceStream and Hutchison for an
aggregate purchase price of approximately $205,000,000. The Purchase Agreement
also provides for the sale by the Company to these investors of additional
shares of Non-Voting Preferred Stock having an aggregate face value of
approximately $95,000,000 later this year. Terms of the Non-Voting Preferred
Stock are set forth in the Certificate of Designation, a copy of which has been
filed as an exhibit hereto.
The summaries of the transactions described above are, in each case,
qualified in their entirety by reference to the Reorganization Agreement and the
Purchase Agreement. A copy of each of the agreements have been filed as
exhibits hereto.
Item 7. Exhibits.
--------
Exhibit No.
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2.1 Agreement and Plan of Reorganization by and among Omnipoint
Corporation, VoiceStream Wireless Corporation and VoiceStream
Wireless Holding Corporation, dated as of June 23, 1999.
4.1 Certificate of Designation of the establishing the Designations,
Powers, Preferences, Limitations, Restrictions, and Relative
Rights of the Series A Non-Voting Convertible Preferred Stock of
Omnipoint Corporation.
10.1 Securities Purchase Agreement by and among Omnipoint Corporation,
VoiceStream Wireless Corporation and Hutchison Telecommunications
PCS (USA) Limited, dated June 23, 1999.
99.1 Press Release, dated June 23, 1999
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SIGNATURE
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: July 2, 1999
OMNIPOINT CORPORATION
By: /s/ Douglas G. Smith
------------------------------
Douglas G. Smith
President and Chief Executive Officer
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OMNIPOINT CORPORATION
FORM 8-K
EXHIBIT INDEX
Exhibit No. Exhibit
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2.1 Agreement and Plan of Reorganization by and among Omnipoint
Corporation, VoiceStream Wireless Corporation and VoiceStream
Wireless Holding Corporation, dated as of June 23, 1999.
4.1 Certificate of Designation of the establishing the Designations,
Powers, Preferences, Limitations, Restrictions, and Relative
Rights of the Series A Non-Voting Convertible Preferred Stock of
Omnipoint Corporation.
10.1 Securities Purchase Agreement by and among Omnipoint Corporation,
VoiceStream Wireless Corporation and Hutchison Telecommunications
PCS (USA) Limited, dated June 23, 1999.
99.1 Press Release, dated June 23, 1999
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EXHIBIT 2.1
AGREEMENT AND PLAN OF REORGANIZATION
dated as of
June 23, 1999
by and among
VOICESTREAM WIRELESS CORPORATION,
VOICESTREAM WIRELESS HOLDING CORPORATION
and
OMNIPOINT CORPORATION
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TABLE OF CONTENTS
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ARTICLE 1 -- DEFINITIONS........................................................................... 1
SECTION 1.1 Definitions............................................................ 1
ARTICLE 2 -- FORMATION OF HOLDING COMPANY AND SUBSIDIARIES......................................... 12
SECTION 2.1 Organization of Holding Company........................................ 12
SECTION 2.2 Directors and Officers of Holding Company.............................. 13
SECTION 2.3 Organization of Merger Subsidiaries.................................... 13
SECTION 2.4 Actions of Directors and Officers...................................... 13
SECTION 2.5 Actions of Holding Company............................................. 13
ARTICLE 2A -- THE MERGERS; CLOSING................................................................. 14
SECTION 2.1A The Mergers............................................................ 14
SECTION 2.2A Directors.............................................................. 15
SECTION 2.3A Certificate of Incorporation and Bylaws................................ 15
SECTION 2.4A Officers............................................................... 15
ARTICLE 3 -- EFFECT OF THE MERGERS ON SECURITIES OF VOICESTREAM,
OMNIPOINT AND THE MERGER SUBSIDIARIES................................................. 15
SECTION 3.1 Conversion of Merger Subsidiaries Stock................................ 15
SECTION 3.2 Cancellation of Holding Company Capital Stock.......................... 16
SECTION 3.3 Conversion of Common Stock............................................. 16
SECTION 3.4 Surrender and Payment.................................................. 19
SECTION 3.5 Dissenting Shares...................................................... 21
SECTION 3.6 Options, Warrants and Preferred Stock.................................. 21
SECTION 3.7 Fractional Shares...................................................... 23
SECTION 3.8 Withholding Rights..................................................... 24
SECTION 3.9 Lost Certificates...................................................... 24
ARTICLE 4 -- REPRESENTATIONS AND WARRANTIES OF OMNIPOINT........................................... 24
SECTION 4.1 Corporate Existence and Power.......................................... 24
SECTION 4.2 Corporate Authorization................................................ 24
SECTION 4.3 Governmental Authorization............................................. 25
SECTION 4.4 FCC Matters............................................................ 25
SECTION 4.5 Non-contravention...................................................... 26
SECTION 4.6 Capitalization......................................................... 27
SECTION 4.7 Subsidiaries; Investments.............................................. 28
SECTION 4.8 SEC Filings............................................................ 29
SECTION 4.9 Financial Statements................................................... 29
SECTION 4.10 Absence of Certain Changes............................................. 30
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SECTION 4.11 No Undisclosed Material Liabilities.................................... 30
SECTION 4.12 Compliance with Laws and Court Orders.................................. 30
SECTION 4.13 Litigation............................................................. 30
SECTION 4.14 Finders' Fees.......................................................... 31
SECTION 4.15 Opinion of Financial Advisor........................................... 31
SECTION 4.16 Taxes.................................................................. 31
SECTION 4.17 Tax Opinions........................................................... 32
SECTION 4.18 Employee Benefit Plans and Labor Matters............................... 32
SECTION 4.19 Environmental Matters.................................................. 34
SECTION 4.20 Intellectual Property.................................................. 34
SECTION 4.21 Contracts.............................................................. 35
SECTION 4.22 Significant Omnipoint Employees........................................ 35
SECTION 4.23 Employment Matters..................................................... 36
SECTION 4.24 Labor.................................................................. 36
SECTION 4.25 Vote Required.......................................................... 37
SECTION 4.26 Antitakeover Statutes and Charter Provisions........................... 37
SECTION 4.27 Insurance.............................................................. 37
SECTION 4.28 Bank Accounts.......................................................... 37
SECTION 4.29 Transactions with Affiliates........................................... 37
ARTICLE 5 -- REPRESENTATIONS AND WARRANTIES OF VOICESTREAM
AND HOLDING COMPANY................................................................... 38
SECTION 5.1 Corporate Existence and Power.......................................... 38
SECTION 5.2 Corporate Authorization................................................ 38
SECTION 5.3 Governmental Authorization............................................. 39
SECTION 5.4 FCC Matters............................................................ 39
SECTION 5.5 Non-contravention...................................................... 40
SECTION 5.6 Capitalization......................................................... 41
SECTION 5.7 Subsidiaries; Investments.............................................. 41
SECTION 5.8 SEC Filings............................................................ 42
SECTION 5.9 Financial Statements................................................... 43
SECTION 5.10 Absence of Certain Changes............................................. 43
SECTION 5.11 No Undisclosed Material Liabilities.................................... 43
SECTION 5.12 Compliance with Laws and Court Orders.................................. 44
SECTION 5.13 Litigation............................................................. 44
SECTION 5.14 Finders' Fees.......................................................... 44
SECTION 5.15 Opinion of Financial Advisor........................................... 44
SECTION 5.16 Taxes.................................................................. 45
SECTION 5.17 Tax Opinions........................................................... 45
SECTION 5.18 Employee Benefit Plans and Labor Matters............................... 46
SECTION 5.19 Environmental Matters.................................................. 47
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SECTION 5.20 Intellectual Property.................................................. 48
SECTION 5.21 Contracts.............................................................. 48
SECTION 5.22 VoiceStream Employees.................................................. 49
SECTION 5.23 Employment Matters..................................................... 50
SECTION 5.24 Labor.................................................................. 50
SECTION 5.26 Vote Required.......................................................... 50
SECTION 5.27 Insurance.............................................................. 50
SECTION 5.28 Bank Accounts.......................................................... 51
SECTION 5.29 Transactions with Affiliates........................................... 51
SECTION 5.30 Not an Interested Stockholder.......................................... 51
SECTION 5.31 Representations with Respect to Holding Company........................ 51
ARTICLE 6 -- COVENANTS OF OMNIPOINT................................................................ 52
SECTION 6.1 Omnipoint Interim Operations........................................... 52
SECTION 6.2 No Solicitation........................................................ 55
SECTION 6.3 Access to Information.................................................. 56
ARTICLE 7 -- COVENANTS OF VOICESTREAM AND HOLDING COMPANY.......................................... 57
SECTION 7.1 VoiceStream Interim Operations......................................... 57
SECTION 7.3 Listing of Stock....................................................... 59
SECTION 7.4 Holding Company Board of Directors..................................... 59
SECTION 7.5 Employee Matters....................................................... 59
SECTION 7.6 Access to Information.................................................. 60
SECTION 7.7 Covenants with Respect to Holding Company.............................. 60
SECTION 7.8 Registration Rights.................................................... 61
ARTICLE 8 -- COVENANTS OF VOICESTREAM AND OMNIPOINT................................................ 61
SECTION 8.1 Best Efforts........................................................... 61
SECTION 8.2 Registration Statement and Proxy Statement............................. 63
SECTION 8.3 Public Announcements................................................... 64
SECTION 8.4 Further Assurances..................................................... 65
SECTION 8.5 Notices of Certain Events.............................................. 65
SECTION 8.6 Tax-free Treatment..................................................... 65
SECTION 8.7 Affiliates............................................................. 66
SECTION 8.8 Stockholders' Meeting.................................................. 66
SECTION 8.9 Conduct of Business by Holding Company and the Merger Subsidiaries
Pending the Mergers.................................................... 67
ARTICLE 9 -- CONDITIONS TO THE MERGER.............................................................. 67
SECTION 9.1 Conditions to the Obligations of Each Party............................ 67
SECTION 9.2 Conditions to the Obligations of VoiceStream........................... 68
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SECTION 9.3 Conditions to the Obligations of Omnipoint............................. 69
ARTICLE 10 -- TERMINATION.......................................................................... 71
SECTION 10.1 Termination............................................................ 71
SECTION 10.2 Effect of Termination.................................................. 72
SECTION 10.3 Fees and Expenses...................................................... 72
ARTICLE 11 -- MISCELLANEOUS........................................................................ 74
SECTION 11.1 Notices................................................................ 74
SECTION 11.2 Reliance on Representations............................................ 75
SECTION 11.3 Survival of Representations and Warranties............................. 75
SECTION 11.4 Amendments; No Waivers................................................. 75
SECTION 11.5 Successors and Assigns................................................. 75
SECTION 11.6 Governing Law.......................................................... 75
SECTION 11.7 Jurisdiction........................................................... 75
SECTION 11.8 WAIVER OF JURY TRIAL................................................... 76
SECTION 11.9 Counterparts; Effectiveness............................................ 76
SECTION 11.10 Entire Agreement; No Third Party Beneficiaries......................... 76
SECTION 11.11 Captions............................................................... 76
SECTION 11.12 Severability........................................................... 76
SECTION 11.13 Specific Performance................................................... 77
SECTION 11.14 Schedules.............................................................. 77
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AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement"), dated as of
June 23, 1999, by and among VoiceStream Wireless Corporation, a Washington
corporation ("VoiceStream"), VoiceStream Wireless Holding Corporation, a
Delaware corporation ("Holding Company"), and Omnipoint Corporation, a Delaware
corporation ("Omnipoint").
RECITALS
A. The Boards of Directors of VoiceStream and Omnipoint have
approved, and deem it advisable and in the best interests of their respective
companies and stockholders to consummate the reorganization (the
"Reorganization") provided for herein, pursuant to which (i) Holding Company
will acquire all of the common stock of each of VoiceStream and Omnipoint
through mergers of Subsidiaries of Holding Company with and into each of
VoiceStream and Omnipoint and (ii) Hutchison shall contribute $807,000,000 and
Hutchison's Omnipoint Stock to Holding Company in exchange for shares of common
stock and shares of preferred stock of Holding Company.
B. For federal income tax purposes, it is intended that (i) the
VoiceStream Merger qualify as a reorganization described in Section 368(a) of
the United States Internal Revenue Code of 1986, as amended (the "Code"), and/or
as an exchange described in Section 351(a) of the Code and (ii) the Omnipoint
Merger, taken together with the VoiceStream Merger and the Hutchison
Transaction, qualify as an exchange described in Section 351 of the Code.
C. VoiceStream Holding Company and Omnipoint desire to make certain
representations, warranties, covenants and agreements in connection with the
Transactions.
NOW, THEREFORE, in consideration of the foregoing, and of the
representations, warranties, covenants and agreements contained herein, the
parties hereto hereby agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1 Definitions.
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(a) The following terms, as used herein, have the following meanings:
<PAGE>
"Acquisition Proposal" means any offer or proposal for, or any
indication of interest in (i) a merger, consolidation, share exchange, business
combination, reorganization, recapitalization, liquidation, dissolution or other
similar transaction involving any member of the Omnipoint Group, (ii) the
acquisition, directly or indirectly, in a single transaction or series of
related transactions, (A) an equity interest representing greater than 15% of
the voting securities of any member of the Omnipoint Group or (B) assets,
securities or ownership interests representing an amount equal to or greater
than 15% of the consolidated assets or earning power of the Omnipoint Group,
other than the Transactions or (iii) the consummation of any other transaction
or the entering into of any other agreement or arrangement with respect to any
other transactions, the effect of which would have the same result as the
occurrence of (i) or (ii).
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with
such Person provided that, for purposes of this definition, "control"
(including, with correlative meanings, the terms "controlled by" and "under
common control with"), as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities or by contract or otherwise.
"All Cash Amount" means the sum of (i) the Closing Date Market Price
multiplied by .825 and (ii) $8.00.
"All Stock Number" means the sum of (i) $8.00 divided by the Closing
Date Market Price and (ii) .825.
"Allen" means Allen & Company Inc.
"Benefit Arrangement" means, with respect to any Person, any
employment, severance or similar contract or arrangement, whether formal or
informal, proposed or final, funded or unfunded, whether or not written,
providing for compensation, bonus, profit-sharing, stock option, or other stock-
related rights or other forms of incentive or deferred compensation, vacation
benefits, insurance coverage (including any self-insured arrangements), health
or medical benefits, disability benefits, workers' compensation, supplemental
unemployment benefits, severance benefits and post-employment or retirement
benefits (including compensation, pension, health, medical or life insurance or
other benefits) that (i) is not an Employee Plan, (ii) is entered into,
maintained, administered or contributed to, as the case may be, by such Person
or any of its Affiliates (other than, in the case of VoiceStream, Western and
its Subsidiaries) and (iii) covers any employee or former employee of such
Person or any of its Subsidiaries employed in the United States. "Omnipoint
Benefit Arrangements" means the Benefit Arrangements of any member of the
Omnipoint Group. "VoiceStream Benefit Arrangements" means the Benefit
Arrangements of any member of the VoiceStream Group.
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"Business Day" means a day other than a Saturday, Sunday or other day
on which commercial banks in New York City or Seattle, Washington are authorized
or required by law to close.
"CIRI Agreements" means the Purchase Agreements, dated June 23, 1999
between Omnipoint and the Cook Entities, attached hereto as Exhibits A-1 and A-
2.
"CIRI Transaction" means the transactions contemplated by the CIRI
Agreements.
"Closing Date Market Price" means with respect to one share of
VoiceStream Common Stock, the average Closing Price (calculated on a weighted
average based upon the volume of shares traded on each day) for such share
during the period of the 15 most recent trading days ending on the Business Day
prior to the Effective Time.
"Closing Price" means, on any day in which shares are traded on
NASDAQ, the last reported price for which one share of VoiceStream Common Stock
traded on NASDAQ.
"Communications Act" means the Communications Act of 1934 and the
Telecommunications Act of 1996 (together with the rules, regulations and
published decisions of the FCC).
"Confidentiality Agreement" means the confidentiality letter
agreement, dated October 14, 1998, between Western and Omnipoint.
"Cook Entities" means Cook Inlet/VS GSM II PCS, LLC, a Delaware
limited liability company, and Cook Inlet/VS GSM III PCS, LLC, a Delaware
limited liability company.
"Default Event" means (i) the occurrence of a change in the U.S.
financial, political or economic conditions the result of which would, in the
reasonable judgment of VoiceStream, materially and adversely affect the ability
of VoiceStream and Omnipoint to restructure or refinance any Indebtedness of any
member of the Omnipoint Group on terms which would, at or after the Effective
Time, not have a material adverse effect on the business, financial conditions,
prospects, assets or results of operations of Holding Company, VoiceStream and
Omnipoint and their respective Subsidiaries, taken as a whole, and (ii) (A) any
default by any member of the Omnipoint Group in the observance or performance of
any agreement or condition relating to its respective Indebtedness or contained
in any instrument or agreement evidencing, securing or relating thereto, or the
occurrence of any other event or the existence of any condition, the effect of
which is to cause or permit the holder or holders of such Indebtedness (or
trustee or agent on behalf of
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such holder or holders) to cause, with or without the passage of time or the
giving of notice, such Indebtedness to become due or payable prior to its stated
maturity or (B) the occurrence of any event or the existence of any condition,
the effect of which is to cause or permit the holder or holders of such
Indebtedness (or trustee or agent on behalf of such holder or holders) to
require, with or without the passage of time or the giving of notice, any member
of the Omnipoint Group to redeem or repurchase such Indebtedness prior to its
stated maturity; provided, however, that no Default Event shall exist unless the
aggregate amount of Indebtedness in respect of which either (A) or (B) shall
have occurred is equal to at least $200,000,000.
"Delaware Law" means the Delaware General Corporation Law.
"Employee Plan" means, with respect to any Person, any "employee
benefit plan", as defined in Section 3(3) of ERISA, that (i) is subject to any
provision of ERISA, (ii) is maintained, administered or contributed to by such
Person or any of its ERISA Affiliates (other than, in the case of VoiceStream,
Western and Western's Subsidiaries) and (iii) covers any employee or former
employee of such Person (other than, in the case of VoiceStream, Western and
Western's Subsidiaries). "Omnipoint Employee Plan" means an Employee Plan of any
member of the Omnipoint Group and "VoiceStream Employee Plan" means an Employee
Plan of any member of the VoiceStream Group.
"Environmental Laws" means the Comprehensive Environmental Response,
Compensation, and Liability Act, the Resource Conservation and Recovery Act, the
Emergency Planning and Community Right to Know Act, the Clean Water Act, the
Safe Drinking Water Act, the Clean Air Act, any so-called "Superfund" or
"Superlien" law, or any other federal, state or local statute, law, ordinance,
code, rule , regulation, Order, decree or other requirement of any Governmental
Body regulating, relating to or imposing liability or standards of conduct
concerning, health, safety and any Hazardous Substance.
"Environmental Permits" means, with respect to any Person, all
permits, licenses, franchises, certificates, approvals and other similar
authorizations of any Governmental Body relating to or required by
Environmental Laws and affecting, or relating in any way to, the business of
such Person or any of its Subsidiaries as currently conducted.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"ERISA Affiliate" of any entity means any other entity that, together
with such entity, would be treated as a single employer under Section 414 of the
Code.
"FAA" means the Federal Aviation Administration and any successor
agency or body.
"FCC" means the Federal Communications Commission and any successor
agency or body.
"FCC Consent" means an order of the FCC, or by the staff of the FCC
acting pursuant to delegated authority, granting its consent to the applications
referred to in Section 8.1(b) of this Agreement required to permit the
consummation of the Transactions.
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"FCC Consent Date" means the date on which Public Notice is given of
the FCC Consent pursuant to the rules and regulations of the FCC.
"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.
"Goldman" means Goldman, Sachs & Co.
"Governmental Body" means any domestic or foreign national, state,
multi-state or municipal or other local government, any subdivision, agency,
commission or authority thereof, any court, or any quasi-governmental or private
body exercising any regulatory or taxing authority thereunder.
"Governmental Consents" means all authorizations, consents, approvals,
exceptions or other actions by Governmental Bodies required to consummate the
Transactions.
"Group" means "group," as such term is defined in Rule 13d-3 of the
1934 Act.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976.
"Hazardous Substance" means any hazardous substance, hazardous or
toxic waste, hazardous material, pollutant or contaminant, as those or similar
terms are used in the Environmental Laws, including, without limitation,
asbestos and asbestos-related products, chlorofluorocarbons, oils or petroleum-
derived compounds, polychlorinated biphenyls, pesticides and radon.
"Hutchison" means Hutchison Telecommunications PCS (USA) Limited, a
British Virgin Islands corporation.
"Hutchison Agreement" means the Subscription Agreement, dated June 23,
1999, between Holding Company, Hutchison and Hutchison Telecommunications
Limited, a Hong Kong corporation.
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"Hutchison's Omnipoint Stock" means the Omnipoint Non-Voting
Convertible Preferred or the Omnipoint Common Stock into which it is convertible
which is held by Hutchison.
"Hutchison Transaction" means the transactions contemplated by the
Hutchison Agreement.
"Indebtedness" of any Person at any date means (a) all indebtedness of
such Person for borrowed money or for the deferred purchase price of property or
services (other than current trade liabilities incurred in the ordinary course
of business and payable in accordance with customary practices), (b) any other
indebtedness of such Person which is evidenced by a note, bond, debenture or
similar instrument, (c) all obligations of such Person under financing leases,
(d) all obligations of such Person in respect of acceptances issued or created
for the account of such Person and with respect to unpaid reimbursement
obligations related to letters of credit issued for the account of such Person
and (e) all liabilities secured by any Lien on any property owned by such Person
even though such Person has not assumed or otherwise become liable for the
payment thereof.
"Investment Interest" means a direct or indirect ownership of (i)
capital stock, bonds, debentures, partnership, membership interests or other
ownership interests or other securities of any Person; (ii) any deposit with or
advance, loan or other extension of credit (including the purchase of property
from another Person subject to an understanding or agreement, contingent or
otherwise to resell such property to such other Person) to any other Person;
(iii) any revenue or profit interests pursuant to any agreement or license or
(iv) any agreement, commitment, right, understanding or arrangement with respect
to any of the items referred to in (i), (ii) or (iii) of this definition.
"IRS" means the Internal Revenue Service.
"Jones Day" means Jones, Day, Reavis & Pogue.
"knowledge" means, with respect to any fact, the conscious awareness
of such fact by an executive officer (as defined under the 1933 Act) of the
relevant Person.
"Lehman" means Lehman Brothers Inc.
"Lien" as to any Person, means any mortgage, lien, pledge, adverse
claim, charge, security interest or other encumbrance (including, without
limitation rights of first refusal, proxy rights and other similar rights) in or
on, or any interest or title of any vendor, lessor, lender or other secured
party to or of such Person under any conditional sale or other title retention
agreement or capital lease with respect to, any property or asset owned or held
by such Person, or the signing or filing of a financing statement which names
such Person as debtor, or the signing
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of any security agreement authorizing any other party as the secured party
thereunder to file any financing statement other than those filed for
informational purposes.
"Multiemployer Plan" means each Employee Plan ,including for this
purpose any "employee pension benefit plan" (as defined in Section 3(2) of
ERISA) of Western and its Subsidiaries, that is a multiemployer plan, as defined
in Section 3(37) of ERISA.
"NASDAQ" means The NASDAQ National Market.
"1933 Act" means the Securities Act of 1933.
"1934 Act" means the Securities Exchange Act of 1934.
"Omnipoint Balance Sheet" means the Consolidated Balance Sheet of
Omnipoint and its consolidated subsidiaries as of December 31, 1998 and the
footnotes thereto set forth in the Omnipoint 10-K.
"Omnipoint Balance Sheet Date" means December 31, 1998.
"Omnipoint Common Stock" means Common Stock, par value $0.01 per
share, of Omnipoint.
"Omnipoint Disclosure Schedule" means the disclosure schedule of
Omnipoint attached hereto.
"Omnipoint Employee" means an employee of any member of the Omnipoint
Group.
"Omnipoint Group" means Omnipoint and the Omnipoint Subsidiaries.
"Omnipoint Investment" means an entity in which any member of the
Omnipoint Group has an Investment Interest.
"Omnipoint Material Adverse Effect" means a material adverse effect on
the business, financial condition, prospects, assets or results of operations of
the Omnipoint Group taken as a whole, excluding any such effect resulting from
or arising in connection with (i) this Agreement, the Transactions or the
announcement thereof, (ii) changes or conditions generally affecting the
industries in which the Omnipoint Group operates or (iii) changes in general
economic, regulatory or political conditions. For the purposes of Section
9.1(f), item (i) of the
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previous sentence shall not be excluded from the definition of Omnipoint
Material Adverse Effect.
"Omnipoint Non-Voting Convertible Preferred Stock" means Omnipoint's
Series A Non-Voting Convertible Preferred Stock, par value $0.01 per share.
"Omnipoint Preferred Stock" means 7% Cumulative Convertible Preferred
Stock, par value $1,000 per share, of Omnipoint.
"Omnipoint Subsidiary" means a Subsidiary of Omnipoint.
"Omnipoint 10-K" means Omnipoint's annual report on Form 10-K for the
fiscal year ended December 31, 1998.
"Order" means and includes any order, writ, injunction, decree,
judgment, award, determination or written direction of any court, arbitrator or
Governmental Body.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Pension Plan" means, with respect to any Person, any plan (other than
a Multiemployer Plan) that is subject to Title IV of ERISA and is maintained,
administered or contributed to or required to be contributed to by such Person
or any of its ERISA Affiliates. "Omnipoint Pension Plan" means a Pension Plan of
Omnipoint or any of its ERISA Affiliates and "VoiceStream Pension Plan" means a
Pension Plan of VoiceStream or any of its ERISA Affiliates other than Employee
Plan.
"Person" means an individual, corporation, partnership, limited
liability company, association, trust or other entity or organization, including
a government or political subdivision or an agency or instrumentality thereof.
"Piper Marbury" means Piper & Marbury L.L.P.
"SEC" means the Securities and Exchange Commission and any successor
agency or body.
"Significant Employees" means any employee of a Person who (i) is an
officer of such Person, (ii) owns any options to purchase capital stock of such
Person which accelerate as a result of the Merger, (iii) has a written
employment contract with such Person which calls for annual compensation in
excess of $125,000 or (iv) is compensated by such Person at an annual rate
greater than $125,000.
"Significant Omnipoint Employees" means Significant Employees of any
member of the Omnipoint Group.
"Significant VoiceStream Employees" means Significant Employees of any
member of the VoiceStream Group.
8
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"Subsequent Transaction" means any transaction whereby (i) any member
of the VoiceStream Group or any VoiceStream Investment would acquire (by merger,
consolidation, acquisition of stock or assets or otherwise) any corporation,
limited liability company, partnership, other business organization or assets of
division thereof, which is in the business of providing wireless communication
services, (ii) any member of the VoiceStream Group or any VoiceStream Investment
would acquire an Investment Interest in any of the foregoing, (iii) any member
of the VoiceStream Group or VoiceStream Investment would issue any equity
interest or incur any Indebtedness whether in connection with any item described
in (i) or (ii) or otherwise, (iv) any member of the VoiceStream Group or any
VoiceStream Investment enters into or engages in a strategic alliance or other
commercial relationship or (v) any member of the VoiceStream Group or any
VoiceStream Investment is acting in the ordinary course consistent with past
practice; provided, however, in connection with a Subsequent Transaction
described in items (i), (ii), (iii) or (iv) of this definition, VoiceStream must
receive an opinion from a nationally recognized investment bank, acting as
financial advisor to VoiceStream, to the effect that, from a financial point of
view, such Subsequent Transaction is fair to the holders of VoiceStream Common
Stock or, if applicable, VoiceStream.
"Subsidiary" means, with respect to any Person, any entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
are at any time directly or indirectly owned by such Person.
"Transactions" means the transactions contemplated by this Agreement.
"VoiceStream Balance Sheet" means the Consolidated Balance Sheet of
VoiceStream and its consolidated subsidiaries as of December 31, 1998 and the
footnotes thereto, as set forth in the VoiceStream 10-K.
"VoiceStream Balance Sheet Date" means December 31, 1998.
"VoiceStream Common Stock" means the Common Stock, no par value per
share, of VoiceStream.
"VoiceStream Disclosure Schedule" means the disclosure schedule of
VoiceStream attached hereto.
9
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"VoiceStream Employee" means an employee of VoiceStream or a
VoiceStream Subsidiary.
"VoiceStream Group" means VoiceStream and the VoiceStream
Subsidiaries.
"VoiceStream Investment" means an entity in which VoiceStream has an
Investment Interest.
"VoiceStream Material Adverse Effect" means a material adverse effect
on the business, financial condition, prospects, assets or results of operations
of the VoiceStream Group taken as a whole, excluding any such effect resulting
from or arising in connection with (i) this Agreement, the Transactions or the
announcement thereof, (ii) changes or conditions generally affecting the
industries in which the VoiceStream Group operates or (iii) changes in general
economic, regulatory or political conditions. For the purposes of Section
9.1(f), item (i) of the previous sentence shall not be excluded from the
definition of VoiceStream Material Adverse Effect.
"VoiceStream Subsidiary" means a Subsidiary of VoiceStream.
"VoiceStream 10-K" means VoiceStream's annual report on Form 10-K for
the fiscal year ended December 31, 1998.
"Washington Law" means the Washington Business Corporation Act.
"Western" means Western Wireless Corporation, a Washington
corporation.
Any reference in this Agreement to a statute shall be to such statute,
as amended from time to time, and to the rules and regulations promulgated
thereunder.
(b) Each of the following terms is defined in the Section set forth
opposite such term:
<TABLE>
<S> <C>
Affiliate Registration Statement........ 7.8
Affiliate Shares........................ 7.8
Benefits Maintenance Period............. 7.5(a)(ii)
Cash Election........................... 3.3(c)(ii)
Cash Election Consideration............. 3.3(c)(ii)
Cash Election Proration Factor.......... 3.3(h)
Certificate of Merger................... 2.1A(d)
Certificates............................ 3.4(a)
Closing................................. 2.1A(c)
Closing Date............................ 2.1A(c)
Code.................................... Preamble
</TABLE>
10
<PAGE>
<TABLE>
<S> <C>
Dissenting Shares....................... 3.5
Effective Time.......................... 2.1A(d)
Election Deadline....................... 3.4(a)
Election Form........................... 3.4(a)
End Date................................ 10.1(b)(i)
Environmental Reports................... 4.19(b)
Exchange Agent.......................... 3.4(a)
Exchange Fund........................... 3.4(a)
FCC Applications........................ 8.1(b)
Form S-4................................ 8.2
GAAP.................................... 4.9
Holding Company......................... Preamble
Holding Company Common Stock............ 2.1
Holding Company Share Issuance Number... 3.3(f)
Indemnified Losses...................... 7.2(a)
Indemnified Person...................... 7.2(a)
Merger Agreements....................... 2.1A
Merger Consideration.................... 3.3(c)(iii)
Merger Sub A............................ 2.3(i)
Merger Sub B............................ 2.3(ii)
Merger Subsidiaries..................... 2.3(ii)
Mergers................................. 2.1A(b)
New Director(s)......................... 7.4
New Omnipoint Convertible Securities.... 3.6
New Omnipoint Options................... 3.6(a)
New Omnipoint Warrants.................. 3.6
New VoiceStream Convertible Securities.. 3.6(b)
New VoiceStream Options................. 3.6(b)
New VoiceStream Warrants................ 3.6(b)
1999 Omnipoint SEC Documents............ 4.8(b)
1999 VoiceStream SEC Documents.......... 5.8(b)
Omnipoint............................... Preamble
Omnipoint FCC Licenses.................. 4.4(a)
Omnipoint Holders....................... 3.4(b)
Omnipoint Intellectual Property......... 4.20
Omnipoint Merger........................ 2.1A(b)
Omnipoint Merger Agreement.............. 2.1A
Omnipoint Options....................... 4.6(a)
Omnipoint Pension Plan.................. 1.1(a)
Omnipoint Rule 145 Affiliate............ 8.7
Omnipoint SEC Documents................. 4.8(b)
Omnipoint Stockholders' Approval........ 4.25
Omnipoint Stockholders' Meeting......... 8.8(a)
</TABLE>
11
<PAGE>
<TABLE>
<S> <C>
Omnipoint Warrants...................... 4.6(a)
Proxy Statement/Prospectus.............. 8.2
Reorganization.......................... Preamble
Spinoff................................. 9.2(c)
Standard Election....................... 3.3(c)(i)
Standard Election Consideration......... 3.3(c)(iii)
Standard Election Exchange Rate......... 3.3(c)(iii)
Stock Election.......................... 3.3(c)(i)
Stock Election Consideration............ 3.3(c)(i)
Stock Election Exchange Rate............ 3.3(c)(i)
Stock Election Proration Factor......... 3.3(g)
Successor Plan.......................... 7.5(b)
Tax Returns............................. 4.16
Taxes................................... 4.16
Termination Fee......................... 10.3(b)
Transferred Employees................... 7.5(a)(ii)
VoiceStream............................. Preamble
VoiceStream FCC Licenses................ 5.4(a)
VoiceStream Intellectual Property....... 5.20
VoiceStream Merger...................... 2.1A(a)
VoiceStream Merger Agreement............ 2.1A
VoiceStream Pension Plan................ 1.1(a)
VoiceStream SEC Documents............... 5.8(b)
VoiceStream Stockholders' Approval...... 5.26
VoiceStream Stockholders' Meeting....... 8.8(a)
</TABLE>
(c) Unless the context otherwise requires, the terms defined in this
Article 1 or elsewhere in this Agreement shall have the meanings herein
specified for all purposes of this Agreement, applicable to both the singular
and plural forms of any of the terms defined herein. When a reference is made in
this Agreement to a Section, such reference shall be to a Section of this
Agreement unless otherwise indicated. Whenever the words "include," "includes"
or "including" are used in this Agreement, they shall be deemed to be followed
by the words "without limitation." The use of any gender herein shall be deemed
to include the neuter, masculine and feminine genders wherever necessary or
appropriate.
ARTICLE 2
FORMATION OF HOLDING COMPANY AND SUBSIDIARIES
SECTION 2.1 Organization of Holding Company. Prior to the execution of
-------------------------------
this Agreement, VoiceStream has organized Holding Company under Delaware Law.
The authorized capital stock of Holding Company shall consist of 400,000,000
shares of common stock, par
12
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value $0.001 per share (the "Holding Company Common Stock"), of which one share
shall be issued to VoiceStream at a price of $2.00, and 5,000,000 shares of
preferred stock, par value $0.001 per share.
SECTION 2.2 Directors and Officers of Holding Company. The directors and
-----------------------------------------
officers of Holding Company were and shall be designated by VoiceStream. Each
such officer and director shall remain in office until his or her successors are
elected.
SECTION 2.3 Organization of Merger Subsidiaries. As promptly as
-----------------------------------
practicable (but in any event no more than 30 days) following the execution of
this Agreement, VoiceStream shall cause the following companies to be organized
for the sole purpose of effectuating the VoiceStream Merger and the Omnipoint
Merger contemplated herein:
(i) VoiceStream Subsidiary I, a corporation organized under the
laws of the State of Washington ("Merger Sub A"). The certificate of
incorporation and bylaws of Merger Sub A shall be in such forms as shall be
determined by VoiceStream as soon as practicable following the execution of
this Agreement. The authorized capital stock of Merger Sub A shall
initially consist of 100 shares of common stock, no par value per share,
one share of which shall be issued to Holding Company at a price of $1.00
per share.
(ii) VoiceStream Subsidiary II, a corporation organized under the
laws of the State of Delaware ("Merger Sub B" and, together with Merger Sub
A, the "Merger Subsidiaries"). The certificate of incorporation and bylaws
of Merger Sub B shall be in such forms as shall be determined by
VoiceStream as soon as practicable following the execution of this
Agreement. The authorized capital stock of Merger Sub B shall initially
consist of 100 shares of common stock, par value $.01 per share, one share
of which shall be issued to Holding Company at a price of $1.00 per share.
SECTION 2.4 Actions of Directors and Officers. As promptly as practicable
---------------------------------
(but not later than 30 days) following the execution of this Agreement,
VoiceStream shall cause (i) Holding Company to elect the directors of the Merger
Subsidiaries, (ii) the directors of Merger Sub A and Merger Sub B to elect their
respective officers, (iii) the directors of Holding Company to ratify and
approve this Agreement and to approve the forms of the Merger Agreements, (iv)
the Merger Agreements to be executed on behalf of the parties thereto, and (v)
the directors and officers of the Merger Subsidiaries to take such steps as may
be necessary or appropriate to complete the organization of the Merger
Subsidiaries and to approve the Merger Agreements.
SECTION 2.5 Actions of Holding Company. As promptly as practicable (but
--------------------------
in no event later than 15 days) following the execution of this Agreement,
Holding Company shall cause the Merger Subsidiaries to adopt the Merger
Agreements.
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ARTICLE 2A
THE MERGERS; CLOSING
SECTION 2.1A The Mergers. Pursuant to the Merger Agreements, in forms to
-----------
be mutually agreed upon by VoiceStream and Omnipoint (sometimes hereinafter
referred to individually as the "VoiceStream Merger Agreement" and the
"Omnipoint Merger Agreement", respectively, and collectively as the "Merger
Agreements"), upon the terms and subject to the conditions set forth in this
Agreement and in the Merger Agreements:
(a) Merger Sub A shall be merged with and into VoiceStream (the
"VoiceStream Merger") in accordance with the applicable provisions of Washington
Law. VoiceStream shall be the surviving corporation in the VoiceStream Merger
and shall continue its corporate existence under Washington Law. As a result of
the VoiceStream Merger, VoiceStream shall become a wholly owned Subsidiary of
Holding Company. The effects and consequences of the VoiceStream Merger shall
be as set forth in the VoiceStream Merger Agreement.
(b) Merger Sub B will be merged with and into Omnipoint (the
"Omnipoint Merger"), in accordance with the applicable provisions of Delaware
Law. Omnipoint shall be the surviving corporation in the Omnipoint Merger and
shall continue its corporate existence under Delaware Law. As a result of the
Omnipoint Merger, Holding Company shall own, directly or indirectly, all of the
outstanding shares of Omnipoint Common Stock. The effects and consequences of
the Omnipoint Merger shall be as set forth in the Omnipoint Merger Agreement.
The term "Mergers" shall mean the VoiceStream Merger and the Omnipoint Merger.
(c) Subject to the terms and conditions of this Agreement, the
closing of the Transactions (the "Closing") shall take place (a) at the offices
of Friedman Kaplan & Seiler LLP, 875 Third Avenue, New York, NY, at 11:00 a.m.,
local time, on the fifth Business Day following the day on which the last to be
fulfilled or waived of the conditions set forth in Article 9 (excluding
conditions that, by their terms cannot be satisfied until the Closing Date, but
subject to the fulfillment or waiver of such conditions) shall be fulfilled or
waived in accordance herewith or (b) at such other time, date or place as
VoiceStream and Omnipoint may agree. The date on which the Closing occurs is
hereinafter referred to as the "Closing Date."
(d) As soon as practicable following the Closing, the parties shall
(i) file a certificate of merger with respect to each of the Mergers (the
"Certificate of Merger") in such forms as are required by and executed in
accordance with applicable Delaware Law (in the case of the Omnipoint Merger)
and Washington Law (in the case of the VoiceStream Merger) and (ii) make all
other filings or recordings required under applicable Delaware Law or Washington
Law. The Mergers shall become effective at such time and date (the "Effective
Time") which is the later of (i) the date and time of the filing of the
Certificate of Merger with respect to the VoiceStream Merger (or such other date
and time as may be specified in such certificate as may
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<PAGE>
be permitted by Washington Law) and (ii) the date and time of the filing of the
Certificate of Merger with respect to the Omnipoint Merger (or such other date
and time as may be specified in such certificate as may be permitted by Delaware
Law).
(e) The consummation of the Omnipoint Merger shall be conditioned on
the simultaneous consummation of the VoiceStream Merger, and the consummation of
VoiceStream Merger shall be conditioned on the simultaneous consummation of the
Omnipoint Merger.
SECTION 2.2A Directors. The directors of VoiceStream and Merger Sub B,
---------
immediately prior to the Effective Time shall be the directors of the surviving
corporation of the VoiceStream Merger and the Omnipoint Merger, respectively, as
of the Effective Time and until their successors are duly appointed or elected
in accordance with applicable Delaware Law (in the case of the Omnipoint Merger)
and Washington Law (in the case of VoiceStream Merger).
SECTION 2.3A Certificate of Incorporation and Bylaws. The certificate of
---------------------------------------
incorporation and bylaws of VoiceStream and Omnipoint immediately prior to the
Effective Time shall be the certificate of incorporation and bylaws of the
surviving corporation of the VoiceStream Merger and the Omnipoint Merger,
respectively, as of the Effective Time; provided, VoiceStream may change the
name of VoiceStream.
SECTION 2.4A Officers. The officers of VoiceStream and Omnipoint
--------
immediately prior to the Effective Time shall be the officers of the surviving
corporations of the VoiceStream Merger and the Omnipoint Merger, respectively,
as of the Effective Time and until their successors are duly appointed or
elected in accordance with applicable Delaware Law (in the case of the Omnipoint
Merger) and Washington Law (in the case of VoiceStream Merger).
ARTICLE 3
EFFECT OF THE MERGERS ON SECURITIES OF VOICESTREAM,
OMNIPOINT AND THE MERGER SUBSIDIARIES
SECTION 3.1 Conversion of Merger Subsidiaries Stock. At the Effective
---------------------------------------
Time, by virtue of the VoiceStream Merger and without any action on the part of
any of the parties, each share of the common stock of Merger Sub A outstanding
immediately prior to the Effective Time shall be converted into and shall become
one share of common stock of the surviving corporation of the VoiceStream
Merger. At the Effective Time, by virtue of the Omnipoint Merger and without
any action on the part of any of the parties, each share of the common stock of
Merger Sub B outstanding immediately prior to the Effective Time shall be
converted into and shall become one share of common stock of the surviving
corporation of the Omnipoint Merger.
15
<PAGE>
SECTION 3.2 Cancellation of Holding Company Capital Stock. At the
---------------------------------------------
Effective Time, the one share of the capital stock of Holding Company issued to
VoiceStream and outstanding immediately prior to the Effective Time shall be
canceled and cease to exist.
SECTION 3.3 Conversion of Common Stock.
--------------------------
(a) (i) Subject to the provisions of Sections 3.3 and 3.5, at the
Effective Time, each share of VoiceStream Common Stock that is issued and
outstanding immediately prior to the Effective Time shall be converted into one
share of Holding Company Common Stock. Upon such conversion, all such shares of
VoiceStream Common Stock shall be canceled and cease to exist, and each
certificate theretofore representing any such shares shall, without any action
on the part of the holder thereof, be deemed to represent an equivalent number
of shares of Holding Company Common Stock.
(ii) Subject to the provisions of Sections 3.3 and 3.5, at the
Effective Time, each share of Omnipoint Common Stock that is issued and
outstanding immediately prior to the Effective Time shall be converted into the
right to receive the Merger Consideration and cash for fractional shares of
Holding Company Common Stock. Upon such conversion, all such shares of
Omnipoint Common Stock shall be canceled and cease to exist, and each
certificate theretofore representing any such shares shall, without any action
on the part of the holder thereof, be deemed to represent the right to receive
the Merger Consideration.
(b) At the Effective Time, each share of VoiceStream Common Stock,
Omnipoint Common Stock or Holding Company Common Stock which is held in the
treasury of VoiceStream, Omnipoint or their respective Subsidiaries (provided,
however, any Omnipoint Common Stock held by VoiceStream or Holding Company shall
not be canceled pursuant to this Section 3.3(b)) immediately prior to the
Effective Time shall, by virtue of the Mergers, cease to be outstanding and
shall be canceled and retired without payment of any consideration therefor.
(c) Subject to the provisions of Sections 3.3(g) and (h) and of
Sections 3.5 and 3.7, each share of Omnipoint Common Stock that is issued and
outstanding immediately prior to the Effective Time (excluding any Dissenting
Shares or any share of Omnipoint Common Stock canceled pursuant to Section
3.3(b) or held by Holding Company or VoiceStream) shall be converted, at the
election of the holder thereof in accordance with the procedures set forth
herein, into one of the following:
(i) for each such share of Omnipoint Common Stock with respect
to which an election to receive only Holding Company Common Stock has been
effectively made and not revoked or lost pursuant to Section 3.3(e) (a
"Stock Election"), the right to receive the All Stock Number of shares (the
"Stock Election Exchange Rate") of Holding Company Common Stock (the "Stock
Election Consideration");
16
<PAGE>
(ii) for each such share of Omnipoint Common Stock with respect
to which an election to receive only cash has been effectively made and not
revoked or lost pursuant to Section 3.3(e) (a "Cash Election"), the right
to receive the All Cash Amount in cash, without interest (the "Cash
Election Consideration"); and
(iii) for each such share of Omnipoint Common Stock other than
shares as to which a Stock Election or a Cash Election has been made, the
right to receive (A) .825 shares (the "Standard Election Exchange Rate") of
Holding Company Common Stock and (B) $8.00 in cash, ((A) and (B) being
collectively referred to as the "Standard Election Consideration" and,
together with the Stock Election Consideration and the Cash Election
Consideration, the "Merger Consideration").
(d) If between the date of this Agreement and the Effective Time the
outstanding shares of VoiceStream Common Stock shall have been changed into a
different number of shares, by reason of any stock dividend, subdivision, split
or combination of shares, the Cash Election Consideration, the Stock Election
Consideration and the Standard Election Consideration, will be correspondingly
adjusted to reflect such stock dividend, subdivision, split or combination of
shares.
(e) Each person who, at the Effective Time, is a record holder of
shares of Omnipoint Common Stock (other than holders of shares of Omnipoint
Common Stock to be canceled as set forth in Section 3.3(b)), shall have the
right to submit an Election Form specifying the number of shares of Omnipoint
Common Stock that such person desires to have converted into the right to
receive Holding Company Common Stock pursuant to the Stock Election, the number
of shares of Omnipoint Common Stock that such person desires to have converted
into the right to receive cash pursuant to the Cash Election, or the number of
shares of Omnipoint Common Stock that such person desires to have converted into
the right to receive the Standard Election Consideration, pursuant to the
Standard Election. Any such record holder (including without limitation any such
record holder of Dissenting Shares) who fails properly to submit an Election
Form on or prior to the Election Deadline in accordance with the procedures set
forth in Section 3.4(a) shall be deemed to have made a Standard Election. Each
person who, at the Effective Time, is a record holder of Omnipoint Preferred
Stock, shall be deemed to have made a Standard Election.
(f) The aggregate number of shares of Holding Company Common Stock to
be issued to holders of Omnipoint Common Stock in connection with the Omnipoint
Merger or to become subject to issuance upon the conversion of the Omnipoint
Preferred Stock shall equal the product of (x) .825 and (y) the sum of (i) the
total number of shares of Omnipoint Common Stock issued and outstanding
immediately prior to the Effective Time, other than shares to be canceled
pursuant to Section 3.3(b) and shares held by Holding Company or VoiceStream and
(ii) the total number of shares of Omnipoint Common Stock issuable upon
conversion of Omnipoint Preferred Stock outstanding immediately prior to the
Effective Time (the product of (x) and (y) being referred to as the "Holding
Company Share Issuance Number"). If between the date of this
17
<PAGE>
Agreement and the Effective Time the outstanding shares of VoiceStream Common
Stock shall have been changed into a different number of shares, by reason of
any stock dividend, subdivision, split or combination of shares, the Holding
Company Share Issuance Number will be correspondingly adjusted to reflect such
stock dividend, subdivision, split or combination of shares.
(g) In the event that the number of shares of Holding Company Common
Stock to be issued to holders of Omnipoint Common Stock in connection with
Omnipoint Merger or to become subject to issuance upon conversion of Omnipoint
Preferred Stock would exceed the Holding Company Share Issuance Number based on
the elections of the holders of Omnipoint Common Stock (together with the
conversion adjustments applicable to the Omnipoint Preferred Stock), (i) all
shares of Omnipoint Common Stock subject to a Cash Election or a Standard
Election will, as elected, be converted into the right to receive the Cash
Election Consideration or the Standard Election Consideration, as the case may
be, and (ii) each share of Omnipoint Common Stock subject to a Stock Election
will be converted into the right to receive (A) a number of shares of Holding
Company Common Stock equal to the Stock Election Exchange Rate times the Stock
Election Proration Factor and (B) an amount of cash equal to (1) the All Cash
Amount multiplied by (2) one minus the Stock Election Proration Factor. The
"Stock Election Proration Factor" means a fraction (x) the numerator of which is
the Holding Company Share Issuance Number minus the aggregate number of shares
of Holding Company Common Stock to be issued in the Omnipoint Merger pursuant to
the Standard Elections or to become subject to issuance upon conversion of
Omnipoint Preferred Stock pursuant to elections corresponding to the Standard
Elections deemed to have been made by holders of Omnipoint Preferred Stock, and
(y) the denominator of which is the number of shares of Holding Company Common
Stock that, but for this paragraph (g), would have been issued to holders of
Omnipoint Common Stock in Transactions pursuant to the Stock Elections.
(h) In the event that the number of shares of Holding Company Common
Stock to be issued to holders of Omnipoint Common Stock in connection with the
Omnipoint Merger or to become subject to issuance upon conversion of Omnipoint
Preferred Stock would be less than the Holding Company Share Issuance Number
based on the elections of the holders of Omnipoint Common Stock (together with
the conversion adjustments applicable to the Omnipoint Preferred Stock), (i) all
shares of Omnipoint Common Stock subject to a Stock Election or a Standard
Election will, as elected, be converted into the right to receive the Stock
Election Consideration or the Standard Election Consideration, as the case may
be, and (ii) each share of Omnipoint Common Stock subject to a Cash Election
will be converted into the right to receive (A) a number of shares of Holding
Company Common Stock equal to the Cash Election Proration Factor and (B) an
amount of cash equal to (1) the All Cash Amount multiplied by (2) (x) one minus
(y) the Cash Election Proration Factor divided by the Stock Election Exchange
Rate. The "Cash Election Proration Factor" means a fraction (x) the numerator of
which is the Holding Company Share Issuance Number minus the aggregate number of
shares of Holding Company Common Stock to be issued in the Merger pursuant to
the Stock Elections and the Standard Elections or to become subject to issuance
upon conversion of Omnipoint Preferred
18
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Stock pursuant to elections corresponding to the Standard Elections deemed to
have been made by holders of Omnipoint Preferred Stock, and (y) the denominator
of which is the number of shares of Omnipoint Common Stock subject to the Cash
Elections.
SECTION 3.4 Surrender and Payment.
---------------------
(a) Prior to the Effective Time, Holding Company shall appoint an
agent to be designated by VoiceStream (the "Exchange Agent") for the purpose of
exchanging certificates representing shares of Omnipoint Common Stock (the
"Certificates") for the Merger Consideration. At the Effective Time, Holding
Company will deposit (or cause to be deposited) with the Exchange Agent the
Merger Consideration to be paid in respect of the shares (the "Exchange Fund").
Upon receipt, the Exchange Agent will invest the cash portion of the Exchange
Fund in United States government securities maturing at the Election Deadline or
such other investments as VoiceStream and Omnipoint may mutually agree. Promptly
after the Effective Time, VoiceStream will send, or will cause the Exchange
Agent to send, (A) to each holder of shares of Omnipoint Common Stock, at the
Effective Time, a letter of transmittal and instructions (which shall specify
that the delivery shall be effected, and risk of loss and title shall pass, only
upon proper delivery of the Certificates to the Exchange Agent) for use in such
exchange, and (B) to each holder of shares of Omnipoint Common Stock, an
election form (the "Election Form") providing for such holders to make the
Standard Election, the Cash Election or the Stock Election. Any Standard
Election (other than a deemed Standard Election), Cash Election or Stock
Election shall be validly made only if the Exchange Agent shall have received by
5:00 p.m., New York City time, on a date (the "Election Deadline") to be
mutually agreed upon by VoiceStream and Omnipoint (which date shall not be later
than the twentieth Business Day after the Effective Time), an Election Form
properly completed and executed (with the signature or signatures thereon
guaranteed to the extent required by the Election Form) by such holder
accompanied by such holder's Certificates, or by an appropriate guarantee of
delivery of such Certificates from a member of any registered national
securities exchange or of the National Association of Securities Dealers, Inc.
or a commercial bank or trust company in the United States as set forth in such
Election Form. Any holder of Omnipoint Common Stock who has made an election by
submitting an Election Form to the Exchange Agent may at any time prior to the
Election Deadline change such holder's election by submitting a revised Election
Form, properly completed and signed that is received by the Exchange Agent prior
to the Election Deadline. Any holder of Omnipoint Common Stock may at any time
prior to the Election Deadline revoke his election and withdraw his Certificates
deposited with the Exchange Agent by written notice to the Exchange Agent
received by the close of business on the day prior to the Election Deadline.
VoiceStream shall have the right to make rules (which will be described in the
Election Form), not inconsistent with the terms of this Agreement, governing the
validity of Election Forms and the manner and extent to which Standard
Elections, Cash Election or Stock Elections are to be taken into account in
making the determinations prescribed by Sections 3.3(g) and 3.3(h).
19
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(b) Upon surrender to the Exchange Agent of its Certificate, together
with a properly completed letter of transmittal, each holder of shares of
Omnipoint Common Stock (the "Omnipoint Holders") will be entitled to receive
promptly after the Election Deadline the Merger Consideration (elected or deemed
elected by it, subject to Sections 3.3(g) and (h)) in respect of the shares of
Omnipoint Common Stock represented by its Certificate. Until so surrendered,
each such Certificate shall represent after the Effective Time, for all
purposes, only the right to receive the Merger Consideration.
(c) If any portion of the Merger Consideration is to be paid to a
Person other than the Person in whose name the Certificate so surrendered is
registered, it shall be a condition to such payment that such Certificate shall
be properly endorsed or otherwise be in proper form for transfer and that the
Person requesting such payment shall pay to the Exchange Agent any transfer or
other taxes required as a result of such payment to a Person other than the
registered holder of such Certificate, or establish to the satisfaction of the
Exchange Agent that such tax has been paid or is not payable.
(d) After the Effective Time, there shall be no further registration
of transfers of shares of Omnipoint Common Stock. If, after the Effective Time,
Certificates are presented to the Surviving Corporation, they shall be canceled
and exchanged for the Stock Election Consideration provided for, and in
accordance with the procedures set forth, in this Article 3.
(e) Any portion of the Exchange Fund made available to the Exchange
Agent pursuant to Section 3.4(a) that remains unclaimed by the Omnipoint
Holders, one year after the Effective Time shall be returned to Holding Company,
upon demand, and any such holder who has not exchanged its shares for the Merger
Consideration in accordance with this Section 3.4 prior to that time shall
thereafter look only to Holding Company for payment of such consideration, any
dividends and distributions in respect of such shares, in each case without any
interest thereon. Notwithstanding the foregoing, Holding Company shall not be
liable to any Omnipoint Holder for any amounts paid to a public official
pursuant to applicable abandoned property, escheat or similar laws. Any amounts
remaining unclaimed by the Omnipoint Holders five years after the Effective Time
(or such earlier date, immediately prior to such time when the amounts would
otherwise escheat to or become property of any Governmental Body) shall become,
to the extent permitted by applicable law, the property of Holding Company free
and clear of any claims or interest of any Person previously entitled thereto.
(f) No dividends or other distributions with respect to any Holding
Company Common Stock and no cash payment in lieu of fractional shares as
provided in Section 3.7, shall be paid to the holder of any unsurrendered
Certificates until such Certificates are surrendered as provided in Section
3.4(b). Following such surrender, there shall be paid, without interest, to the
Person in whose name such Holding Company Common Stock has been registered, (i)
at the time of such surrender, (A) in the case of Certificates, the amount of
any cash payable in lieu of fractional shares to which such Person is entitled
pursuant to Section 3.7, and (B) the amount of all dividends or other
distributions with a record date after the Effective Time previously paid or
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payable on the date of such surrender, with respect to such Holding Company
Common Stock, and (ii) at the appropriate payment date, the amount of dividends
or other distributions with a record date after the Effective Time but prior to
surrender, and with a payment date subsequent to surrender, payable with respect
to such Holding Company Common Stock.
(g) Any portion of the Merger Consideration made available to the
Exchange Agent pursuant to Section 3.4(a) to pay for shares for which appraisal
rights have been perfected shall be returned to Holding Company upon demand.
SECTION 3.5 Dissenting Shares. Notwithstanding Section 3.3, Omnipoint
-----------------
Common Stock or VoiceStream Common Stock outstanding immediately prior to the
Effective Time and held by a holder who has not voted in favor of the
Transactions and has demanded appraisal for such shares in accordance with
Delaware Law (in the case of Omnipoint) or Washington Law (in the case of
VoiceStream) ("Dissenting Shares") shall not be converted into a right to
receive shares of Holding Company Common Stock (in the case of VoiceStream
Common Stock) or the Merger Consideration (in the case of Omnipoint Common
Stock) unless such holder fails to perfect, withdraws or otherwise loses its
right to appraisal. If, after the Effective Time, such holder fails to perfect,
withdraws or loses its right to appraisal, such shares shall be treated as if
they had been converted as of the Effective Time into a right to receive (i) in
the case of Omnipoint, the Standard Election Consideration and (ii) in the case
of VoiceStream, Holding Company Common Stock. Omnipoint shall give VoiceStream
prompt notice of any demands received by Omnipoint for appraisal of shares, and
VoiceStream shall have the right to participate in all negotiations and
proceedings with respect to such demands. Except with the prior written consent
of VoiceStream, Omnipoint shall not make any payment with respect to, or settle
or offer to settle, any such demands.
SECTION 3.6 Options, Warrants and Preferred Stock. At the Effective Time,
-------------------------------------
each option or warrant granted by Omnipoint to purchase shares of Omnipoint
Common Stock which is outstanding and unexercised immediately prior to the
Effective Time shall be assumed by Holding Company and converted into an option
("New Omnipoint Options") or warrant ("New Omnipoint Warrants" and, together
with New Omnipoint Options, "New Omnipoint Convertible Securities") to purchase
shares of Holding Company Common Stock in such amount and at such exercise price
as provided below and otherwise having the same terms and conditions as are in
effect immediately prior to the Effective Time (except to the extent that such
terms, conditions and restrictions may be altered in accordance with their terms
as a result of the Transactions):
(i) the number of shares of Holding Company Common Stock to be
subject to each New Omnipoint Convertible Security shall be equal to the
product of (x) the number of shares of Omnipoint Common Stock subject to
the original option or
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warrant and (y) the sum of (1) $8.00 divided by the Closing Price on the
last day in which shares are traded on NASDAQ immediately preceding the
Closing Date and (2) .825;
(ii) the exercise price per share of Holding Company Common
Stock under each New Omnipoint Convertible Security shall be equal to (x)
the exercise price per share of Omnipoint Common Stock under the original
option or warrant divided by (y) the sum of (1) $8.00 divided by the
Closing Price on the last day in which shares are traded on NASDAQ
immediately preceding the Closing Date and (2) .825; and
(iii) upon each exercise of New Omnipoint Convertible Securities
by a holder thereof, the aggregate number of shares of Holding Company
Common Stock subject to a New Option shall be rounded down, if necessary,
to the nearest whole share and the aggregate exercise price shall be
rounded up, if necessary, to the nearest cent.
The adjustments provided herein with respect to any options which are "incentive
stock options" (as defined in Section 422 of the Code) shall be effected in a
manner consistent with Section 424(a) of the Code.
(b) At the Effective Time, each option or warrant granted by
VoiceStream to purchase shares of VoiceStream Common Stock which is outstanding
and unexercised immediately prior to the Effective Time shall be assumed by
Holding Company and converted into an option ("New VoiceStream Options") or
warrant ("New VoiceStream Warrants" and, together with New VoiceStream Options,
"New VoiceStream Convertible Securities") as follows: (i) the number of shares
of Holding Company Common Stock to be subject to the New VoiceStream Convertible
Securities shall be equal to the the number of shares of VoiceStream Common
Stock subject to the original option or warrant and (ii) the exercise price per
share of VoiceStream Common Stock under the New VoiceStream Convertible
Securities shall be equal to the exercise price per share of VoiceStream Common
Stock under the original option or warrant. The adjustments provided herein with
respect to any options which are "incentive stock options" (as defined in
Section 422 of the Code) shall be effected in a manner consistent with Section
424(a) of the Code.
(c) The parties shall take such actions as are necessary for the
assumption of the Omnipoint and VoiceStream options and warrants pursuant to
this Section 3.6 and any obligations to issue Omnipoint Common Stock or
VoiceStream Common Stock under the existing terms of any other plans, agreements
or arrangements of Omnipoint or VoiceStream covering any current or former
employee or director of any member of the Omnipoint Group or any member of the
VoiceStream Group including the reservation, issuance and listing of Holding
Company Common Stock as is necessary to effectuate the transactions contemplated
by this Section 3.6. Similarly, the parties shall take all actions required to
be taken by it to effectuate such assumption. The parties shall cause Holding
Company to prepare and file with the SEC a registration statement on Form S-8
(or any other appropriate form) or a post-effective amendment to a registration
statement previously filed under the 1933 Act, with respect to the
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<PAGE>
shares of Holding Company Common Stock subject to New Omnipoint Options and New
VoiceStream Options and, where applicable, shall use its reasonable best efforts
to have such registration statement declared effective as soon as practicable
following the Effective Time and to maintain the effectiveness of such
registration statement covering such New Omnipoint Options and New VoiceStream
Options (and to maintain the current status of the prospectus contained therein)
for so long as such New Omnipoint Options and New VoiceStream Options remain
outstanding. With respect to those individuals, if any, who, subsequent to the
Effective Time, will be subject to the reporting requirements under Section
16(a) of the 1934 Act, where applicable, the parties shall cause Holding Company
to use all reasonable efforts to administer any New Omnipoint Options and New
VoiceStream Options issued pursuant to this Section 3.6 in a manner that
complies with Rule 16b-3 promulgated under the 1934 Act to the extent that the
Omnipoint or VoiceStream stock options and warrants in respect of which such New
Omnipoint Options and New VoiceStream Options have been issued and complied with
such rule prior to the Transactions.
(d) Omnipoint Preferred Stock.
-------------------------
From and after the Effective Time, each share of Omnipoint Preferred
Stock, which shall be outstanding as of the Effective Time, shall remain
outstanding and, subject to the terms of the Certificate of Designation of the
Omnipoint Preferred Stock, dated May 1, 1998, shall have the same privileges,
rights and preferences as the Omnipoint Preferred Stock immediately prior to the
Effective Time and, for purposes of Section 4.5(b) of the Certificate of
Designation thereof, all holders of Omnipoint Common Stock will be deemed to
have received pursuant to the Omnipoint Merger the Standard Election
Consideration.
(e) Omnipoint Non-Voting Convertible Preferred Stock.
------------------------------------------------
From and after the Effective Time, each share of the Omnipoint Non-
Voting Convertible Preferred Stock (or shares of Common Stock into which they
were converted) which shall be outstanding as of the Effective Time, shall
remain outstanding and, subject to the terms of the Certificate of Designation
of the Omnipoint Non-Voting Convertible Preferred Stock, dated June 23, 1999,
shall have the same privileges, rights and preferences as the Omnipoint Non-
Voting Convertible Preferred Stock.
SECTION 3.7 Fractional Shares. No fractional shares of Holding Company
-----------------
Common Stock shall be issued in the Mergers. All fractional shares of Holding
Company Common Stock that a holder of shares of Omnipoint Common Stock would
otherwise be entitled to receive as a result of the Mergers shall be aggregated
and if a fractional share results from such aggregation, such holder shall be
entitled to receive, in lieu thereof, an amount in cash without interest
determined by multiplying the Closing Date Market Price by the fraction of a
share of Holding Company Common Stock to which such holder would otherwise have
been entitled.
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SECTION 3.8 Withholding Rights. Holding Company shall be entitled to
------------------
deduct and withhold from the consideration otherwise payable to any Person
pursuant to this Article 3 such amounts as it is required to deduct and withhold
with respect to the making of such payment under any provision of federal,
state, local or foreign tax law. If Holding Company so withholds amounts, such
amounts shall be treated for all purposes of this Agreement as having been paid
to the Omnipoint Holder, as the case may be, in respect of which Holding Company
made such deduction and withholding.
SECTION 3.9 Lost Certificates. If any Certificate is lost, stolen or
-----------------
destroyed, upon the making of an affidavit of that fact by the Person claiming
such Certificate to be lost, stolen or destroyed and executing an indemnity
reasonably satisfactory to VoiceStream (and, if required by VoiceStream in the
case of a Certificate representing more than 1,000 shares, the posting by such
Person of a bond, in such reasonable amount as VoiceStream may direct, as
indemnity) indemnifying VoiceStream against any claim that may be made against
VoiceStream with respect to the Certificate, the Exchange Agent will issue, in
exchange for such lost, stolen or destroyed Certificate, (i) the Merger
Consideration to be paid in respect of the shares represented by such
Certificate. In addition, such Person will be entitled to receive any amounts
payable pursuant to Section 3.4(f).
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF OMNIPOINT
Except as set forth in the Omnipoint Disclosure Schedule or as
disclosed in the Omnipoint SEC Documents filed prior to the date hereof,
Omnipoint represents and warrants to VoiceStream as follows:
SECTION 4.1 Corporate Existence and Power. Omnipoint is a corporation
-----------------------------
duly incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all corporate powers and authority
required to carry on its business as now conducted and to own, operate and lease
its property. Omnipoint is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where such
qualification is necessary, except for those jurisdictions where failure to be
so qualified, individually or in the aggregate, has not had and would not be
reasonably expected to have a Omnipoint Material Adverse Effect. Omnipoint has
heretofore delivered or made available to VoiceStream true and complete copies
of the certificate of incorporation and bylaws of Omnipoint as currently in
effect.
SECTION 4.2 Corporate Authorization.
-----------------------
(a) The execution, delivery and performance by Omnipoint of this
Agreement and the consummation by Omnipoint of the Transactions are within
Omnipoint's corporate powers and, except for the required approval of
Omnipoint's stockholders of this Agreement and
24
<PAGE>
the Transactions, have been duly authorized by all necessary corporate action on
the part of Omnipoint. This Agreement has been duly and validly executed and
delivered by Omnipoint and, assuming the due and valid authorization, execution
and delivery of this Agreement by VoiceStream and receipt of all required
approvals by Omnipoint's stockholders in connection with the consummation of the
Transactions, constitutes a valid and binding agreement of Omnipoint,
enforceable against it in accordance with its terms except as may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar laws
affecting creditors' rights generally and by equitable principles of general
applicability.
(b) At a meeting duly called and held, Omnipoint's Board of Directors
has: (i) determined that this Agreement and the Transactions are advisable and
fair to and in the best interests of Omnipoint's stockholders; (ii) approved and
adopted this Agreement and the Transactions; and (iii) resolved (subject to
Section 8.8(b)) to recommend approval and adoption of this Agreement by its
stockholders. No other corporate proceedings on the part of Omnipoint are
necessary to authorize or approve this Agreement or to consummate the
Transactions (other than, with respect to the Transactions, the approval and
adoption of the Transactions and this Agreement by holders of the shares of
Omnipoint Common Stock to the extent required by Omnipoint's certificate of
incorporation and by applicable Delaware Law).
SECTION 4.3 Governmental Authorization.
--------------------------
(a) The execution, delivery and performance by Omnipoint of this
Agreement and the consummation by Omnipoint of the Transactions require no
action by or in respect of, or filing with, any Governmental Body, other than:
(i) the filing of a certificate of merger in accordance with Delaware Law; (ii)
compliance with any applicable requirements of the HSR Act; (iii) compliance
with any applicable requirements of the 1934 Act; (iv) compliance with any
applicable requirements of the Communications Act; (v) compliance with FAA
regulations; (vi) compliance with any applicable requirements of state and local
public utility commissions or similar entities; and (vii) any actions or filing,
the absence of which would not in the aggregate prevent or delay consummation of
the Transactions in any material respect, or otherwise prevent Omnipoint from
performing its obligations under this Agreement in any material respect or would
not in the aggregate have a Omnipoint Material Adverse Effect.
(b) Omnipoint and the Omnipoint Subsidiaries have not made any
material misstatements of fact, or omitted to disclose any fact, to any
Government Body or in any report, document or certificate filed therewith, which
misstatements or omissions, individually or in the aggregate, could subject any
material licenses or authorizations to revocation or failure to renew.
SECTION 4.4 FCC Matters.
-----------
(a) Each member of the Omnipoint Group and each Omnipoint Investment
holds, and is qualified and eligible to hold, all material licenses, permits and
other authorizations issued or to be issued by the FCC (including "Winning Bids
in Auction 22 Not yet Licenced by
25
<PAGE>
FCC," as referred to in the Omnipoint Disclosure Schedule) to such entity for
the operation of their respective businesses, all of which are set forth in the
Omnipoint Disclosure Schedule (the "Omnipoint FCC Licenses").
(b) The Omnipoint FCC Licenses are valid and in full force and effect
and none of Omnipoint, any of the Omnipoint Subsidiaries or any Omnipoint
Investment is or has been delinquent in payment on or in default under any
installment obligation owed to the United States Treasury in connection with the
Omnipoint FCC Licenses.
(c) All material reports and applications required by the
Communications Act or required to be filed with the FCC by any member of the
Omnipoint Group or any Omnipoint Investment have been filed and are accurate and
complete in all material respects.
(d) Each member of the Omnipoint Group and each Omnipoint Investment
is, and has been, in compliance in all material respects with, and the wireless
communications systems operated pursuant to the Omnipoint FCC Licenses have been
operated in compliance in all material respects with, the Communications Act.
(e) There is not pending as of the date hereof any application,
petition, objection, pleading or proceeding with the FCC or any public service
commission or similar body having jurisdiction or authority over the
communications operations of any member of the Omnipoint Group or any Omnipoint
Investment which questions the validity of or contests any Omnipoint FCC License
or which presents a substantial risk that, if accepted or granted, or concluded
adversely, could result in (as applicable) the revocation, cancellation,
suspension, dismissal, denial or any materially adverse modification of any
Omnipoint FCC License or imposition of any substantial fine or forfeiture
against any member of the Omnipoint Group or any Omnipoint Investment except as
set forth on the Omnipoint Disclosure Statement.
(f) No facts are known to any member of the Omnipoint Group which if
known by a Governmental Body of competent jurisdiction would present a
substantial risk that any Omnipoint FCC License could be revoked, canceled,
suspended or materially adversely modified or that any substantial fine or
forfeiture could be imposed against any member of the Omnipoint Group or any
Omnipoint Investment.
SECTION 4.5 Non-contravention. The execution, delivery and performance by
-----------------
Omnipoint of this Agreement and the consummation by Omnipoint of the
Transactions do not and will not (i) contravene, conflict with, or result in any
violation or breach of any provision of the certificate of incorporation,
bylaws, stockholders agreement or other governing instrument of any member of
the Omnipoint Group or any Omnipoint Investment; (ii) assuming compliance with
the matters referred to in Section 4.3, contravene, conflict with or result in a
violation or breach of any provision of any applicable law, statute, ordinance,
rule, regulation, judgment, injunction, order, or decree; (iii) require any
consent or other action by any Person under, constitute a default (or an event
that, with or without notice or lapse of time or both, would
26
<PAGE>
constitute a default) under, or cause or permit the termination, cancellation,
acceleration, triggering or other change of any right or obligation or the loss
of any benefit to which any member of the Omnipoint Group or any Omnipoint
Investment is entitled under (A) any provision of any agreement or other
instrument binding upon any member of the Omnipoint Group or any Omnipoint
Investment or (B) any license, franchise, permit, certificate, approval or other
similar authorization held by, or affecting, or relating in any way to, the
assets or business of, any member of the Omnipoint Group or any Omnipoint
Investment; or (iv) result in the creation or imposition of any Lien on any
asset of any member of the Omnipoint Group or any Omnipoint Investment, other
than such exceptions in the case of clauses (ii), (iii) and (iv) as would not
be, individually or in the aggregate, reasonably expected (A) to have a
Omnipoint Material Adverse Effect, (B) materially impair or delay the ability of
Omnipoint to consummate the Transactions or (C) to have a VoiceStream Material
Adverse Effect.
SECTION 4.6 Capitalization.
--------------
(a) The authorized capital stock of Omnipoint consists of 200,000,000
shares of Omnipoint Common Stock and 10,000,000 shares of Omnipoint Preferred
Stock. As of the close of business on June 18, 1999, there were outstanding (i)
53,235,393 shares of Omnipoint Common Stock (inclusive of all shares of
restricted stock granted under any compensatory plans or arrangements), (ii)
Omnipoint stock options to purchase an aggregate of 7,663,664 shares of
Omnipoint Common Stock ("Omnipoint Options"), (iii) no phantom shares or stock
units issued under any stock option, compensation or deferred compensation plan
or arrangement, (iv) Omnipoint warrants to purchase an aggregate of 2,446,437
shares of Omnipoint Common Stock ("Omnipoint Warrants"), (v) 325,000 shares of
Omnipoint Preferred Stock and (vi) $199,294,435 principal amount of
Indebtedness, which is redeemable at the option of Omnipoint by issuing shares
of Omnipoint Common Stock at a price equal to 90% of the fair market value of
such Omnipoint Common Stock, in accordance with the terms of such Indebtedness.
All outstanding shares of capital stock of Omnipoint have been, and all shares
that may be issued pursuant to any compensatory plan or arrangement will be,
when issued in accordance with the respective terms thereof, duly authorized,
validly issued, fully paid and nonassessable and not subject to preemptive
rights. The Omnipoint Disclosure Schedule sets forth for each category of
Omnipoint Options and Omnipoint Warrants the vesting schedule, the exercise
price and the number of shares of Omnipoint Common Stock into which such
Omnipoint Options or Omnipoint Warrants are exercisable .
(b) Except as set forth in Section 4.6(a) or on the Omnipoint
Disclosure Schedule, there are no outstanding subscriptions, options, warrants,
rights or convertible or exchangeable securities issued by Omnipoint or any
Omnipoint Subsidiary or other agreements or commitments to which any member of
the Omnipoint Group or any Omnipoint Investment is a party of any character
relating to the issued or unissued capital stock or other securities of
Omnipoint, including any agreement or commitment obligating any member of the
Omnipoint Group or any Omnipoint Investment to issue, deliver or sell, or cause
to be issued, delivered or sold, shares of capital stock or other securities of
Omnipoint, to grant, extend or enter into any
27
<PAGE>
subscription, option, warrant, right or convertible or exchangeable security or
other similar agreement or commitment with respect to Omnipoint or obligating
Omnipoint to make any payments pursuant to any stock based or stock related plan
or award. There are no preemptive rights, rights of first refusal, rights of
first offer or any similar rights granted with respect to the securities or any
assets of any members of the Omnipoint Group.
SECTION 4.7 Subsidiaries; Investments.
-------------------------
(a) Each Omnipoint Subsidiary and each Omnipoint Investment is a
corporation or other legal entity duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization and has all
corporate, partnership or other similar powers required to carry on its business
as now conducted, other than such exceptions as, individually or in the
aggregate, have not had and would not be reasonably expected to have a Omnipoint
Material Adverse Effect. Each Omnipoint Subsidiary and each Omnipoint Investment
is duly qualified to do business as a foreign corporation or other foreign legal
entity and is in good standing in each jurisdiction where such qualification is
necessary, with such exceptions, individually or in the aggregate, as have not
had and would not be reasonably expected to have a Omnipoint Material Adverse
Effect. The Omnipoint Disclosure Schedule sets forth a list of all Omnipoint
Subsidiaries and all Omnipoint Investments and their respective jurisdictions of
organization and identifies Omnipoint's (direct or indirect) percentage
ownership interest therein.
(b) All of the outstanding capital stock of, or other voting
securities or ownership interests in, each Omnipoint Subsidiary and each
Omnipoint Investment, is owned by Omnipoint or a Omnipoint Subsidiary, directly
or indirectly, free and clear of any Lien and free of any other limitation or
restriction (including any restriction on the right to vote, sell or otherwise
dispose of such capital stock or other voting securities or ownership
interests).
(c) There are no outstanding subscriptions, options, warrants, rights
or convertible or exchangeable securities issued by any member of the Omnipoint
Group or any Omnipoint Investment or other agreements or commitments of any
character relating to the issued or unissued capital stock or other securities
or partnership interests or membership interests of any Omnipoint Subsidiary or
any Omnipoint Investment, including, without limitation, any agreement or
commitment obligating any member of the Omnipoint Group or any Omnipoint
Investment to issue, deliver or sell, or cause to be issued, delivered or sold,
shares of capital stock, other securities, partnership interests or membership
interests of any Omnipoint Subsidiary or any Omnipoint Investment or obligating
any member of the Omnipoint Group or any Omnipoint Investment to grant, extend
or enter into any subscription, option, warrant, right or convertible or
exchangeable security or other similar agreement or commitment with respect to
any Omnipoint Subsidiary or any Omnipoint Investment, or obligating any
Omnipoint Subsidiary or any Omnipoint Investment to make any payments pursuant
to any stock based or stock related plan or award. No member of the Omnipoint
Group is subject to any obligation or requirement to provide funds for or to
make any investment (in the form of a loan, capital contribution or otherwise)
to or in any Person (other than obligations to individuals who are
28
<PAGE>
employees, which obligations (i) are set forth in Section 4.22 of the Omnipoint
Disclosure Schedule or (ii) are for de minimis amounts and are made in the
-- -------
ordinary course of business consistent with past practices), including, without
limitation, any Omnipoint Investment.
(d) Omnipoint has previously delivered or made available to
VoiceStream true and complete copies of the organizational documents or
comparable governing instruments (including all amendments to each of the
foregoing), of each Omnipoint Subsidiary and each Omnipoint Investment as in
effect on the date hereof.
SECTION 4.8 SEC Filings.
-----------
(a) Omnipoint has filed all required reports, schedules, forms,
statements and other documents required to be filed by it with the SEC since
January 1, 1997.
(b) Omnipoint has delivered or made available to VoiceStream: (i) the
Omnipoint 10-K; (ii) its proxy or information statements relating to meetings
of, or actions taken without a meeting by, the stockholders of Omnipoint held
since December 31, 1998; and (iii) all of its other reports, statements,
schedules, forms, exhibits and registration statements and all other documents
required to be filed with the SEC since December 31, 1998 (the "1999 Omnipoint
SEC Documents") (the documents referred to in Sections 4.8(a) and (b),
collectively, the "Omnipoint SEC Documents"). The Omnipoint Disclosure Schedule
sets forth a list of all the 1999 Omnipoint SEC Documents.
(c) As of its filing date, each Omnipoint SEC Document complied as to
form in all material respects with the applicable requirements of the 1933 Act
and the 1934 Act, as the case may be.
(d) As of its filing date, each Omnipoint SEC Document filed pursuant
to the 1934 Act did not contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading.
(e) Each Omnipoint SEC Document that is a registration statement, as
amended or supplemented, if applicable, filed pursuant to the 1933 Act, as of
the date such registration statement or amendment became effective, did not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading.
SECTION 4.9 Financial Statements. The audited consolidated financial
--------------------
statements and unaudited consolidated interim financial statements of Omnipoint
included in the Omnipoint SEC Documents fairly present, in all material
respects, in conformity with generally accepted accounting principles ("GAAP")
applied on a consistent basis (except as may be indicated in the notes thereto),
the consolidated financial position of Omnipoint and its consolidated
Subsidiaries
29
<PAGE>
as of the dates thereof and their consolidated results of operations and cash
flows for the periods then ended (subject to normal year-end adjustments in the
case of any unaudited interim financial statements).
SECTION 4.10 Absence of Certain Changes. Since the Omnipoint Balance Sheet
--------------------------
Date, the business of each member of the Omnipoint Group and each Omnipoint
Investment has been conducted in the ordinary course consistent with past
practices and there has not been any event, occurrence or development which,
individually or in the aggregate, has had or would be reasonably expected to
have a Omnipoint Material Adverse Effect.
SECTION 4.11 No Undisclosed Material Liabilities. There are no liabilities
-----------------------------------
or obligations of any member of the Omnipoint Group or any Omnipoint Investment
of any kind whatsoever, whether accrued, contingent, absolute, determined,
determinable or otherwise, and there is no existing condition, situation or set
of circumstances that would be reasonably expected to result in such a liability
or obligation, other than for Taxes, if any, arising out of, or attributable to
the Transactions (including the CIRI Transaction and the transactions described
in Recital A hereof):
(a) liabilities or obligations disclosed and provided for in the
Omnipoint Balance Sheet or in the notes thereto or in Omnipoint SEC Documents
filed prior to the date hereof or in the Omnipoint 10-K; and
(b) liabilities or obligations that, individually or in the aggregate
have not had and would not be reasonably expected to have a Omnipoint Material
Adverse Effect.
SECTION 4.12 Compliance with Laws and Court Orders. Each member of the
-------------------------------------
Omnipoint Group and each Omnipoint Investment holds all licenses, franchises,
certificates, consents, permits, qualifications and authorizations from all
Governmental Bodies necessary for the lawful conduct of their business, except
where the failure to hold any of the foregoing, individually or in the
aggregate, has not had and would not be reasonably expected to have a Omnipoint
Material Adverse Effect. Each member of the Omnipoint Group and each Omnipoint
Investment is and has been in compliance with, and to the knowledge of
Omnipoint, is not under investigation with respect to and has not been
threatened to be charged with or given notice of any violation of, any such
license, franchise, certificate, consent, permit, qualification or
authorization, applicable law, statute, ordinance, rule, regulation, judgment,
injunction, order or decree, except for failures to comply or violations that,
individually or in the aggregate, have not had and would not be reasonably
expected to have a Omnipoint Material Adverse Effect.
SECTION 4.13 Litigation. There is no action, suit, investigation or
----------
proceeding (or any basis therefor) pending against, or, to the knowledge of
Omnipoint, threatened against or affecting, any member of the Omnipoint Group,
any Omnipoint Investment or any of their respective properties before any court
or arbitrator or before or by any other Governmental Body,
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that, individually or in the aggregate, would be reasonably expected to have a
Omnipoint Material Adverse Effect.
SECTION 4.14 Finders' Fees. Except for fees payable to Allen and Lehman
-------------
there is no investment banker, broker, finder or other intermediary that has
been retained by or is authorized to act on behalf of Omnipoint or any Omnipoint
Subsidiary who might be entitled to any fee or commission from VoiceStream, any
of the VoiceStream Subsidiaries, Omnipoint or any of the Omnipoint Subsidiaries
in connection with the Transactions. Copies of the engagement agreements with
Allen and Lehman have been provided to VoiceStream; except as set forth on such
engagement agreements, no other fees are payable to Allen and Lehman.
SECTION 4.15 Opinion of Financial Advisor. Omnipoint has received an
----------------------------
opinion of Lehman, financial advisor to Omnipoint, to the effect that, as of
June 23, 1999, from a financial point of view, the Merger Consideration is fair
to the holders of Omnipoint Common Stock.
SECTION 4.16 Taxes. Except as set forth in the Omnipoint Disclosure
-----
Schedules and except as would not have a Omnipoint Material Adverse Effect, (i)
all Omnipoint Tax Returns required to be filed with any taxing authority by, or
with respect to, Omnipoint and the Omnipoint Subsidiaries have been filed in
accordance with all applicable laws or an appropriate extension of time to file
such Omnipoint Tax Returns has been obtained; (ii) Omnipoint and the Omnipoint
Subsidiaries have timely paid all Taxes shown as due and payable on the
Omnipoint Tax Returns that have been so filed, and, as of the time of filing,
the Omnipoint Tax Returns correctly reflected the facts regarding the income,
business, assets, operations, activities and the status of Omnipoint and the
Omnipoint Subsidiaries (other than Taxes which are being contested in good faith
by appropriate proceeding and for which adequate reserves are reflected on the
Omnipoint Balance Sheet); (iii) Omnipoint and the Omnipoint Subsidiaries have
made provision for all Taxes payable by Omnipoint and the Omnipoint Subsidiaries
for which no Omnipoint Tax Return has yet been filed; (iv) the charges, accruals
and reserves for Taxes with respect to Omnipoint and the Omnipoint Subsidiaries
reflected on the Omnipoint Balance Sheet are adequate under GAAP to cover the
Tax liabilities accruing through the date thereof; (v) there is no action, suit,
proceeding, audit or claim now pending or, to the knowledge of Omnipoint,
proposed against or with respect to Omnipoint or any Omnipoint Subsidiary in
respect of any Tax where an adverse determination is reasonably likely; (vi)
Omnipoint is not, and never has been the subject of a federal income tax
examination; and (vii) there are no Liens or encumbrances for Taxes on any of
the assets of Omnipoint or any Omnipoint Subsidiary except Liens for current
Taxes not yet due. For purposes of this Agreement, "Taxes" shall mean any and
all taxes, charges, fees, levies or other assessments, including, without
limitation, all net income, gross income, gross receipts, excise, stamp, real or
personal property, ad valorem, withholding, social security (or similar),
unemployment, occupation, use, service, service use, license, net worth,
payroll, franchise, severance, transfer, recording, employment, premium,
windfall profits, environmental (including taxes under Section 59A of the Code),
customs duties, capital stock, profits, disability, sales, registration, value
added, alternative or add-on minimum, estimated or other taxes, assessments or
charges imposed by any federal, state, local or foreign
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governmental body and any interest, penalties, or additions to tax attributable
thereto; provided, however, that Taxes shall not include Taxes, if any, arising
out of or attributable to the Transactions (including the CIRI Transaction and
the transactions described in Recital A hereof). For purposes of this Agreement,
"Tax Returns" shall mean any return, report, form or similar statement required
to be filed with respect to any Tax (including any attached schedules),
including, without limitation, any information return, claim for refund, amended
return or declaration of estimated Tax.
(b) To the knowledge of Omnipoint, there is no plan or intention on
the part of any Omnipoint shareholder to sell, exchange, transfer or otherwise
dispose of any stock of Holding Company received in the Transactions, except
that such Omnipoint shareholders as are partnerships for U.S. federal income tax
purposes may distribute such Holding Company stock to one or more of their
partners (other than to a partner which would, immediately after such
distribution, own 5 percent or more of Holding Company's stock, taking into
account such partner's pro rata share of any Holding Company stock held by the
partnership).
SECTION 4.17 Tax Opinions. There are no facts or circumstances relating to
------------
Omnipoint that would, to Omnipoint's knowledge, prevent Piper Marbury from
delivering the opinion referred to in Section 9.3(b) as of the date hereof.
SECTION 4.18 Employee Benefit Plans and Labor Matters.
----------------------------------------
(a) The Omnipoint Disclosure Schedule contains a true and complete
list, as of the date hereof, of all Omnipoint Employee Plans and all Omnipoint
Benefit Arrangements. Copies of each Omnipoint Employee Plan and each Omnipoint
Benefit Arrangement (and, if applicable, related trust agreements) and all
amendments thereto and written interpretations thereof have been made available
to VoiceStream as of the date hereof or will have been made available to
VoiceStream within thirty days after the date hereof, together with the three
most recent annual reports (Form 5500 including, if applicable, Schedule B
thereto) and the most recent actuarial valuation report prepared in connection
with any Omnipoint Employee Plan.
(b) No "accumulated funding deficiency," as defined in Section 412 of
the Code, has been incurred with respect to any Omnipoint Employee Plan subject
to such Section 412, whether or not waived. No "reportable event" within the
meaning of Section 4043 of ERISA for which the reporting requirements have not
been waived, and no event described in Section 4062 or 4063 of ERISA has
occurred in connection with any Omnipoint Employee Plan. Neither Omnipoint nor
to Omnipoint's knowledge any ERISA Affiliate of Omnipoint has (i) engaged in, or
is a successor or parent corporation to an entity that has engaged in, a
transaction described in Sections 4069 or 4212(c) of ERISA or (ii) incurred, or
reasonably expects to incur prior to the Effective Time (A) any liability under
Title IV of ERISA arising in connection with the termination of, or a complete
or partial withdrawal from, any plan covered or previously covered by Title IV
of ERISA or (B) any liability under Section 4971 of the Code that in either case
could become a liability of Omnipoint, any Omnipoint Subsidiary, VoiceStream or
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any of their ERISA Affiliates after the Effective Time. If a "complete
withdrawal" by Omnipoint and all of its ERISA Affiliates were to occur as of the
Effective Time with respect to all Multiemployer Plans, neither Omnipoint nor
any Omnipoint Subsidiary would incur any withdrawal liability under Title IV of
ERISA.
(c) As of December 31, 1998, the fair market value of the assets of
each Omnipoint Pension Plan (excluding for these purposes any accrued but unpaid
contributions) exceeded the present value of all benefits accrued under such
Omnipoint Pension Plan calculated pursuant to FAS No. 87, "Employers' Accounting
for Pensions."
(d) Each Omnipoint Employee Plan that is intended to be qualified
under Section 401(a) of the Code is the subject of a favorable qualification
determination letter issued by the IRS and to Omnipoint's knowledge each such
Omnipoint Employee Plan is so qualified.
(e) There is no contract, plan or arrangement (written or otherwise)
covering any employee or former employee of Omnipoint or any Omnipoint
Subsidiary that, individually or collectively, could give rise to the payment of
any amount that would not be deductible pursuant to the terms of Sections 162(m)
or 280G of the Code.
(f) As of December 31, 1998, there were no amounts accumulated for
post-retirement benefit obligations under Omnipoint Employee Plans and Omnipoint
Benefit Arrangements as determined in accordance with Statement of Financial
Accounting Standards No. 106.
(g) Each Omnipoint Employee Plan and each Omnipoint Benefit
Arrangement has been maintained in material compliance with its terms and with
the requirements prescribed by any and all applicable statutes, orders, rules
and regulations (including any special provisions relating to registration or
qualification where such Plan was intended so to be so registered or qualified)
and has been maintained in good standing with applicable regulatory authorities.
(h) No employee or former employee of Omnipoint or any Omnipoint
Subsidiary will become entitled to any bonus, retirement, severance, job
security or similar benefit or enhancement of such benefit (including
acceleration of vesting or exercise of an incentive award) as a result of the
Transactions (either alone or together with any other event).
(i) Neither Omnipoint nor any of the Omnipoint Subsidiaries is, or
has been, a party to any collective bargaining agreement or union contract.
Neither Omnipoint nor any of the Omnipoint Subsidiaries is involved in or
threatened with any labor dispute, work stoppage, labor strike, slowdown or
grievance. To the knowledge of Omnipoint, there is no organizing effort or
representation question at issue with respect to any employee of Omnipoint or
any of the Omnipoint Subsidiaries.
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SECTION 4.19 Environmental Matters.
---------------------
(a) Except as have not had and would not be reasonably expected to
have, individually or in the aggregate, a Omnipoint Material Adverse Effect:
(A) no notice, notification, demand, request for information,
citation, summons or order has been received, no complaint has been filed,
no penalty has been assessed, and no investigation, action, claim, suit,
proceeding or review (or any basis therefor) is pending or, to the
knowledge of Omnipoint, is threatened by any Governmental Body or other
Person relating to or arising out of any Environmental Law;
(B) each member of the Omnipoint Group and each Omnipoint
Investment is and has been in compliance with all Environmental Laws and
all Environmental Permits; and
(C) there are no liabilities of or relating to any member of the
Omnipoint Group or any Omnipoint Investment of any kind whatsoever, whether
accrued, contingent, absolute, determined, determinable or otherwise
arising under or relating to any Environmental Law and there are no facts,
conditions, situations or set of circumstances that could reasonably be
expected to result in or be the basis for any such liability.
(b) There have been no environmental assessments, investigations,
studies, audits, tests, reviews or other analyses conducted (collectively,
"Environmental Reports") of which Omnipoint has knowledge in relation to the
current or prior business of any member of the Omnipoint Group or any Omnipoint
Investment or any property or facility now or previously owned or leased by any
member of the Omnipoint Group or any Omnipoint Investment that reveal matters
that, individually or in the aggregate, have had or would reasonably be expected
to have a Omnipoint Material Adverse Effect.
(c) For purposes of this Section 4.19, the terms Omnipoint and
Omnipoint Subsidiary shall include any entity that is, in whole or in part, a
predecessor of any member of the Omnipoint Group or any Omnipoint Investment.
SECTION 4.20 Intellectual Property. With such exceptions as, individually
---------------------
or in the aggregate, have not had and would not be reasonably expected to have a
Omnipoint Material Adverse Effect, each member of the Omnipoint Group and each
Omnipoint Investment own or have a valid license to use each trademark, service
mark, trade name, invention, patent, trade secret, copyright, know-how
(including any registrations or applications for registration of any of the
foregoing) or any other similar type of proprietary intellectual property right
(collectively, the "Omnipoint Intellectual Property") necessary to carry on its
business substantially as currently conducted. No member of the Omnipoint Group
or any Omnipoint Investment has received any notice of infringement of or
conflict with, and to Omnipoint's knowledge, there are no
34
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infringements of or conflicts with, the rights of any Person with respect to the
use of any Omnipoint Intellectual Property that, in either such case,
individually or in the aggregate, have had or would be reasonably expected to
have, a Omnipoint Material Adverse Effect.
SECTION 4.21 Contracts. No member of the Omnipoint Group or any Omnipoint
---------
Investment is a party to or bound by (i) any "material contract" (as such term
is defined in Item 601(b)(10) of Regulation S-K of the SEC) or any agreement,
contract or commitment that would be such a "material contract" but for the
exception for contracts entered into in the ordinary course of business, (ii)
any non-competition agreement or any other agreement or obligation which
materially limits or will materially limit any member of the Omnipoint Group or
any Investment Interest from engaging in the business of providing wireless
communications services or from developing wireless communications technology
anywhere in the world or (iii) any management agreement, technical services
agreement or other agreement whereby any member of the Omnipoint Group or any
Investment Interest is provided or is required to provide management or
technical services to any other Person . With such exceptions as, individually
or in the aggregate, have not had, and would not be reasonably expected to have,
a Omnipoint Material Adverse Effect, (x) each of the contracts, agreements and
commitments of the Omnipoint Group and the Omnipoint Investments is valid and in
full force and effect and (y) neither any member of the Omnipoint Group nor any
Omnipoint Investment has violated any provision of, or committed or failed to
perform any act which, with or without notice, lapse of time, or both, would
constitute a default under the provisions of any such contract, agreement or
commitment. To the knowledge of Omnipoint, no counterparty to any such
contract, agreement or commitment has violated any provision of, or committed or
failed to perform any act which, with or without notice, lapse of time, or both
would constitute a default or other breach under the provisions of, such
contract, agreement or commitment, except for defaults or breaches which,
individually or in the aggregate, have not had, or would not reasonably be
expected to have, a Omnipoint Material Adverse Effect. Neither any member of the
Omnipoint Group nor any Omnipoint Investment is a party to, or otherwise a
guarantor of or liable with respect to, any interest rate, currency or other
swap or derivative transaction, other than any such transactions which are not
material to the business of the Omnipoint Group. Omnipoint has provided or made
available to VoiceStream a copy of each agreement described in item (i), (ii) or
(iii) above.
SECTION 4.22 Significant Omnipoint Employees. The Omnipoint Disclosure
-------------------------------
Schedule contains a list setting forth the name and current annual salary and
other compensation payable to each Significant Omnipoint Employee, and the
profit sharing, bonus or other form of additional compensation paid or payable
by Omnipoint to or for the benefit of each such person for the current fiscal
year. Except as set forth on the Omnipoint Disclosure Schedule or under the
employment, consulting or other agreements listed thereon, there are no oral or
written contracts, agreements or arrangements obligating Omnipoint to increase
the compensation or benefits presently being paid or hereafter payable to any
Significant Omnipoint Employees. The Omnipoint Disclosure Schedule annexed
hereto sets forth summaries of all oral employment or consulting or similar
arrangements regarding any Significant Omnipoint Employee which are not
terminable without liability on thirty (30) days' or less prior notice and lists
all written
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employment and consulting agreements with respect to any Significant Omnipoint
Employee, true and complete copies of which have been provided to VoiceStream.
Except for severance obligations to Significant Omnipoint Employees set forth on
the Omnipoint Disclosure Schedule, there is not due or owing and there will not
be due and owing at the Effective Time to any Significant Omnipoint Employees,
any sick pay, severance pay (whether arising out of the termination of an
Significant Omnipoint Employee prior to, on, or subsequent to the Effective
Time), compensable time or pay, including salary, commission and bonuses,
personal time or pay or vacation time or vacation pay attributable to service
rendered on or prior to the Effective Time. Except as disclosed in the Omnipoint
Disclosure Schedule and other than claims made in the ordinary course of
business consistent with past practice in an aggregate amount not to exceed
$100,000, neither Omnipoint nor the Omnipoint Subsidiaries have, any liability
arising out of claims made or suits brought (including workers' compensation
claims and claims or suits for contribution to, or indemnification of, third
parties, occupational health and safety, environmental, consumer protection or
equal employment matters) for injury, sickness, disease, discrimination, death
or termination of employment of any Significant Omnipoint Employee, or other
employment matter to the extent attributable to an event occurring or a state of
facts existing on or prior to the Effective Time.
SECTION 4.23 Employment Matters. Omnipoint and each Omnipoint Subsidiary
------------------
(A) is in compliance with all applicable Federal and state laws, rules and
regulations respecting employment, employment practices, terms and conditions of
employment and wages and hours, in each case, with respect to Omnipoint
Employees, except where the failure to be in compliance would not, singly or in
the aggregate, have a material adverse effect on Omnipoint, any Omnipoint
Subsidiary or their financial condition or business; (B) has withheld all
amounts required by law or by agreement to be withheld from the wages, salaries
and other payments to Omnipoint Employees; (C) is not liable for any arrears of
wages or any taxes or any penalty for failure to comply with any of the
foregoing, except as would reasonably be expected to not have a Omnipoint
Material Adverse Effect; and (D) (other than routine payments to be made in the
normal course of business and consistent with past practice) is not liable for
any payment to any trust or other fund or to any governmental or administrative
authority, with respect to unemployment compensation benefits, Social Security
or other benefits for Omnipoint Employees.
SECTION 4.24 Labor. No work stoppage or labor strike with respect to
-----
Omnipoint Employees is pending or, to the best knowledge of Omnipoint, is
threatened. Except as set forth on the Omnipoint Disclosure Schedules, there is
no involvement nor, to the best knowledge of Omnipoint, is there threatened, any
labor dispute, grievance or litigation relating to labor, safety or
discrimination matters involving any Omnipoint Employee including charges of
unfair labor practices or discrimination complaints, which, if adversely
determined, would reasonably be expected to have, individually or in the
aggregate, a material adverse effect on its financial condition or business.
There has been no engagement in any unfair labor practices within the meaning of
the National Labor Relations Act which would reasonably be expected to have,
individually or in the aggregate, a Omnipoint Material Adverse Effect.
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SECTION 4.25 Vote Required. The only vote of the holders of any class or
-------------
series of capital stock of Omnipoint necessary to approve this Agreement and the
Transactions is the affirmative vote of the holders of a majority of the
outstanding shares of Omnipoint Common Stock (the "Omnipoint Stockholders'
Approval").
SECTION 4.26 Antitakeover Statutes and Charter Provisions. Omnipoint has
--------------------------------------------
taken all action necessary to exempt the Omnipoint Merger and this Agreement and
the Transactions from the restrictions of Section 203 of Delaware Law, and,
accordingly, neither such Section nor any other antitakeover or similar statute
or regulation applies or purports to apply to any such transactions. No other
"control share acquisition," "fair price," "moratorium" or other antitakeover
laws or regulations enacted under U.S. state or federal laws apply to this
Agreement or any of the Transactions.
SECTION 4.27 Insurance. The Omnipoint Disclosure Schedules set forth a
---------
list and brief description of all policies of fire, liability and other forms of
insurance and material fidelity bonds held by the Omnipoint Group. The
Omnipoint Group's assets, business, equipment, property and operations are
adequately insured against loss or damage and all other hazards or risks of the
character usually insured against by companies in the same or similar business
and such insurance shall be continued in full force and effect through 11:59
p.m. on the Effective Time. Each such policy and fidelity bond is in full force
and effect, all premiums due and payable under such policies and fidelity bonds
have been and on the Effective Time will be paid in full, and there are no
disputed claims arising under such policies or fidelity bonds.
SECTION 4.28 Bank Accounts. The Disclosure Schedule sets forth a complete
-------------
list of all bank accounts, savings deposits, money-market accounts, certificates
of deposit, safety deposit boxes, and similar investment accounts with banks or
other financial institutions maintained by or on behalf of the Omnipoint or any
Omnipoint Subsidiary showing the depository bank or institution address,
appropriate bank contact personnel, account number and names of signatories.
SECTION 4.29 Transactions with Affiliates. No Affiliate of the Omnipoint
----------------------------
Group or Omnipoint Investment nor any stockholder, officer, director, partner,
member, consultant or employee of any thereof, is at the date hereof a party to
any transaction with any member of the Omnipoint Group or Omnipoint Investment,
including any contract or arrangement providing for the furnishing of services
to or by, providing for rental of real or personal property (including
intellectual property) to or from, or otherwise requiring payments to or from
any member of the Omnipoint Group or any Omnipoint Investment, or any Affiliate
thereof.
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ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF VOICESTREAM AND HOLDING COMPANY
Except as set forth in the VoiceStream Disclosure Schedule or as
disclosed in the VoiceStream SEC Documents filed prior to the date hereof, each
of VoiceStream and Holding Company, represent and warrant to Omnipoint as
follows:
SECTION 5.1 Corporate Existence and Power. Each of VoiceStream and
-----------------------------
Holding Company is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation and has all
corporate powers and authority required to carry on its business as now
conducted and to own, operate and lease its property. Each of VoiceStream and
Holding Company is duly qualified to do business as a foreign corporation and is
in good standing in each jurisdiction where such qualification is necessary,
except for those jurisdictions where failure to be so qualified, individually or
in the aggregate, has not had and would not be reasonably expected to have a
VoiceStream Material Adverse Effect. VoiceStream has heretofore delivered or
made available to Omnipoint true and complete copies of the certificate of
incorporation and bylaws of VoiceStream as currently in effect.
SECTION 5.2 Corporate Authorization.
-----------------------
(a) The execution, delivery and performance by each of VoiceStream
and Holding Company of this Agreement and the consummation by VoiceStream and
Holding Company of the Transactions are within VoiceStream's and Holding
Company's respective corporate powers and, except for the required approval of
VoiceStream's stockholders of this Agreement and the Transactions, have been
duly authorized by all necessary corporate action on the part of VoiceStream and
Holding Company. This Agreement has been duly and validly executed and delivered
by VoiceStream and Holding Company and, assuming the due and valid
authorization, execution and delivery of this Agreement by Omnipoint and receipt
of all required approvals by VoiceStream's stockholders in connection with the
consummation of the Transactions, constitutes a valid and binding agreement of
VoiceStream and Holding Company, enforceable against it in accordance with its
terms except as may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting creditors' rights generally and by
equitable principles of general applicability.
(b) At a meeting duly called and held, VoiceStream's Board of
Directors has: (i) determined that this Agreement and the Transactions are
advisable and fair to and in the best interests of VoiceStream's stockholders;
(ii) approved and adopted this Agreement and the Transactions; and (iii)
resolved (subject to Section 8.8(b)) to recommend approval and adoption of this
Agreement by its stockholders. No other corporate proceedings on the part of
VoiceStream are necessary to authorize or approve this Agreement or to
consummate the Transactions (other than, with respect to the Transactions, the
approval and adoption of the
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Transactions and this Agreement by holders of shares of VoiceStream to the
extent required by VoiceStream's certificate of incorporation and by applicable
Delaware Law and Washington Law.
SECTION 5.3 Governmental Authorization.
--------------------------
(a) The execution, delivery and performance by VoiceStream of this
Agreement and the consummation by VoiceStream of the Transactions require no
action by or in respect of, or filing with, any Governmental Body, other than:
(i) the filing of a certificate of merger in accordance with Delaware Law; (ii)
compliance with any applicable requirements of the HSR Act; (iii) compliance
with any applicable requirements of the 1934 Act; (iv) compliance with any
applicable requirements of the Communications Act; (v) compliance with FAA
regulations; (vi) compliance with any applicable requirements of state and local
public utility commissions or similar entities; and (vii) any actions or filing,
the absence of which would not in the aggregate prevent or delay consummation of
the Transactions in any material respect, or otherwise prevent VoiceStream from
performing its obligations under this Agreement in any material respect or would
not in the aggregate have a VoiceStream Material Adverse Effect.
(b) VoiceStream and the VoiceStream Subsidiaries have not made any
material misstatements of fact, or omitted to disclose any fact, to any
Governmental Body, which misstatements or omissions, individually or in the
aggregate, could subject any material licenses or authorizations to revocation
or failure to renew.
SECTION 5.4 FCC Matters.
-----------
(a) Each member of the VoiceStream Group and each VoiceStream
Investment holds, and is qualified and eligible to hold, all material licenses,
permits and other authorizations issued by the FCC to such entity for the
operation of their respective businesses, all of which are set forth in the
VoiceStream Disclosure Schedule (the "VoiceStream FCC Licenses").
(b) The VoiceStream FCC Licenses are valid and in full force and
effect and none of VoiceStream, any of the VoiceStream Subsidiaries or any
VoiceStream Investment is or has been delinquent in payment on or in default
under any installment obligation owed to the United States Treasury in
connection with the VoiceStream FCC Licenses.
(c) All material reports and applications required by the
Communications Act or required to be filed with the FCC by any member of the
VoiceStream Group or any VoiceStream Investment have been filed and are accurate
and complete in all material respects.
(d) Each member of the VoiceStream Group and each VoiceStream
Investment is, and has been, in compliance in all material respects with, and
the wireless
39
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communication systems operated pursuant to the VoiceStream FCC Licenses have
been operated in compliance in all material respects with, the Communications
Act.
(e) There is not pending as of the date hereof any application,
petition, objection, pleading or proceeding with the FCC or any public service
commission or similar body having jurisdiction or authority over the
communications operations of any member of the VoiceStream Group or any
VoiceStream Investment which questions the validity of or contests any
VoiceStream FCC License or which presents a substantial risk that, if accepted
or granted, or concluded adversely, could result in the revocation,
cancellation, suspension or any materially adverse modification of any
VoiceStream FCC License or imposition of any substantial fine or forfeiture
against any member of the VoiceStream Group or any VoiceStream Investment except
as set forth in the VoiceStream Disclosure Statement.
(f) No facts are known to any Member of the VoiceStream Group which
if known by a Governmental Body of competent jurisdiction would present a
substantial risk that any VoiceStream FCC License could be revoked, canceled,
suspended or materially adversely modified or that any substantial fine or
forfeiture could be imposed against any member of the VoiceStream Group or any
VoiceStream Investment.
SECTION 5.5 Non-contravention. The execution, delivery and performance by
-----------------
VoiceStream of this Agreement and the consummation by VoiceStream of the
Transactions do not and will not (i) contravene, conflict with, or result in any
violation or breach of any provision of the certificate of incorporation,
bylaws, stockholders agreement or other governing instrument of any member of
the VoiceStream Group or any VoiceStream Investment; (ii) assuming compliance
with the matters referred to in Section 5.3, contravene, conflict with or result
in a violation or breach of any provision of any applicable law, statute,
ordinance, rule, regulation, judgment, injunction, order, or decree; (iii)
require any consent or other action by any Person under, constitute a default
(or an event that, with or without notice or lapse of time or both, would
constitute a default) under, or cause or permit the termination, cancellation,
acceleration, triggering or other change of any right or obligation or the loss
of any benefit to which any member of the VoiceStream Group or any VoiceStream
Investment is entitled under (A) any provision of any agreement or other
instrument binding upon any member of the VoiceStream Group or any VoiceStream
Investment or (B) any license, franchise, permit, certificate, approval or other
similar authorization held by, or affecting, or relating in any way to, the
assets or business of, any member of the VoiceStream Group or any VoiceStream
Investment; or (iv) result in the creation or imposition of any Lien on any
asset of any member of the VoiceStream Group or any VoiceStream Investment,
other than such exceptions in the case of clauses (ii), (iii) and (iv) as would
not be, individually or in the aggregate, reasonably expected to have a
VoiceStream Material Adverse Effect or materially impair or delay the ability of
VoiceStream to consummate the Transactions.
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SECTION 5.6 Capitalization.
--------------
(a) The authorized capital stock of VoiceStream consists of
300,000,000 shares of VoiceStream Common Stock and 50,000,000 shares of
Preferred Stock. As of the close of business on May 31, 1999, there were
outstanding (i) 95,549,998 shares of VoiceStream Common Stock (inclusive of all
shares of restricted stock granted under any compensatory plans or
arrangements), (ii) VoiceStream stock options to purchase an aggregate of
4,067,090 shares of VoiceStream Common Stock (of which options to purchase an
aggregate of 2,417,170 shares of VoiceStream Common Stock were exercisable),
(iii) no phantom shares or stock units issued under any stock option,
compensation or deferred compensation plan or arrangement with respect to
VoiceStream Common Stock, (iv) no VoiceStream warrants to VoiceStream Common
Stock and (v) no shares of VoiceStream Preferred Stock. All outstanding shares
of capital stock of VoiceStream have been, and all shares that may be issued
pursuant to any compensatory plan or arrangement will be, when issued in
accordance with the respective terms thereof, duly authorized, validly issued,
fully paid and nonassessable and not subject to preemptive rights.
(b) Except as set forth in Section 5.6(a) or on the VoiceStream
Disclosure Schedules, there are no outstanding subscriptions, options, warrants,
rights or convertible or exchangeable securities issued by VoiceStream or any
VoiceStream Subsidiary or other agreements or commitments to which any member of
the VoiceStream Group or any VoiceStream Investment is a party of any character
relating to the issued or unissued capital stock or other securities of
VoiceStream or any VoiceStream Subsidiary, including any agreement or commitment
obligating any member of the VoiceStream Group or any VoiceStream Investment to
issue, deliver or sell, or cause to be issued, delivered or sold, shares of
capital stock or other securities of VoiceStream or any VoiceStream Subsidiary,
to grant, extend or enter into any subscription, option, warrant, right or
convertible or exchangeable security or other similar agreement or commitment
with respect to VoiceStream or any VoiceStream Subsidiary to make any payments
pursuant to any stock based or stock related plan or award. There are no
preemptive rights, rights of first refusal, rights of first offer or any similar
rights granted with respect to the securities or any assets of any member of the
VoiceStream Group.
SECTION 5.7 Subsidiaries; Investments.
-------------------------
(a) Each VoiceStream Subsidiary and each VoiceStream Investment is a
corporation or other legal entity duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization and has all
corporate, partnership or other similar powers required to carry on its business
as now conducted, other than such exceptions as, individually or in the
aggregate, have not had and would not be reasonably expected to have a
VoiceStream Material Adverse Effect. Each VoiceStream Subsidiary and each
VoiceStream Investment is duly qualified to do business as a foreign corporation
or other foreign legal entity and is in good standing in each jurisdiction where
such qualification is necessary, with such exceptions, individually or in the
aggregate, as have not had and would not be reasonably expected to have a
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VoiceStream Material Adverse Effect. The VoiceStream Disclosure Schedule sets
forth a list of all VoiceStream Subsidiaries and all VoiceStream Investments and
their respective jurisdictions of organization and identifies VoiceStream's
(direct or indirect) percentage ownership interest therein.
(b) All of the outstanding capital stock of, or other voting
securities or ownership interests in, each VoiceStream Subsidiary and each
VoiceStream Investment, is owned by VoiceStream or a VoiceStream Subsidiary,
directly or indirectly, free and clear of any Lien and free of any other
limitation or restriction (including any restriction on the right to vote, sell
or otherwise dispose of such capital stock or other voting securities or
ownership interests).
(c) There are no outstanding subscriptions, options, warrants, rights
or convertible or exchangeable securities issued by any member of the
VoiceStream Group or a VoiceStream Investment or other agreements or commitments
of any character relating to the issued or unissued capital stock or other
securities or partnership interests or membership interests of any VoiceStream
Subsidiary or any VoiceStream Investment, including any agreement or commitment
obligating any member of the VoiceStream Group or any VoiceStream Investment to
issue, deliver or sell, or cause to be issued, delivered or sold, shares of
capital stock, other securities, partnership interests or membership interests
of any VoiceStream Subsidiary or any VoiceStream Investment or obligating any
member of the VoiceStream Group or any VoiceStream Investment to grant, extend
or enter into any subscription, option, warrant, right or convertible or
exchangeable security or other similar agreement or commitment with respect to
any VoiceStream Subsidiary or any VoiceStream Investment, or obligating any
member of the VoiceStream Group or any VoiceStream Investment to make any
payments pursuant to any stock based or stock related plan or award. No member
of the VoiceStream Group is subject to any obligation or requirement to provide
funds for or to make any investment (in the form of a loan, capital contribution
or otherwise) to or in any Person, (other than obligations to individuals who
are employees, which obligations (i) are set forth in Section 5.22 of the
VoiceStream Disclosure Schedule or (ii) are for de minimis amounts and are made
-- -------
in the ordinary course of business consistent with past practices), including,
without limitation, any VoiceStream Investment.
(d) VoiceStream has previously delivered or made available to
Omnipoint true and complete copies of the organizational documents or comparable
governing instruments (including all amendments to each of the foregoing), of
each VoiceStream Subsidiary and each VoiceStream Investment as in effect on the
date hereof.
SECTION 5.8 SEC Filings.
-----------
(a) VoiceStream has filed all required reports, schedules, forms,
statements and other documents required to be filed by it with the SEC since
January 1, 1997.
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(b) VoiceStream has delivered or made available to Omnipoint: (i) the
VoiceStream 10-K; (ii) its proxy or information statements relating to meetings
of, or actions taken without a meeting by, the stockholders of VoiceStream held
since December 31, 1998; and (iii) all of its other reports, statements,
schedules, forms, exhibits and registration statements and all other documents
required to be filed with the SEC since December 31, 1998 (the "1999 VoiceStream
SEC Documents") (the documents referred to in Sections 5.8(a) and (b),
collectively, the "VoiceStream SEC Documents"). The VoiceStream Disclosure
Schedule sets forth a list of all the 1999 VoiceStream SEC Documents.
(c) As of its filing date, each VoiceStream SEC Document complied as
to form in all material respects with the applicable requirements of the 1933
Act and the 1934 Act, as the case may be.
(d) As of its filing date, each VoiceStream SEC Document filed
pursuant to the 1934 Act did not contain any untrue statement of a material fact
or omit to state any material fact necessary in order to make the statements
made therein, in the light of the circumstances under which they were made, not
misleading.
(e) Each VoiceStream SEC Document that is a registration statement,
as amended or supplemented, if applicable, filed pursuant to the 1933 Act, as of
the date such registration statement or amendment became effective, did not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading.
SECTION 5.9 Financial Statements. The audited consolidated financial
--------------------
statements and unaudited consolidated interim financial statements of
VoiceStream included in the VoiceStream SEC Documents fairly present, in all
material respects, in conformity with GAAP applied on a consistent basis (except
as may be indicated in the notes thereto), the consolidated financial position
of VoiceStream and its consolidated Subsidiaries as of the dates thereof and
their consolidated results of operations and cash flows for the periods then
ended (subject to normal year-end adjustments in the case of any unaudited
interim financial statements).
SECTION 5.10 Absence of Certain Changes. Since the VoiceStream Balance
--------------------------
Sheet Date, the business of each member of the VoiceStream Group and each
VoiceStream Investment has been conducted in the ordinary course consistent with
past practices and there has not been any event, occurrence or development
which, individually or in the aggregate, has had or would be reasonably expected
to have a VoiceStream Material Adverse Effect.
SECTION 5.11 No Undisclosed Material Liabilities. There are no
-----------------------------------
liabilities or obligations of any member of the VoiceStream Group or any
VoiceStream Investment of any kind whatsoever, whether accrued, contingent,
absolute, determined, determinable or otherwise, and there is no existing
condition, situation or set of circumstances that would be reasonably expected
to result in such a liability or obligation, other than for taxes, if any,
arising out of, or
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attributable to the Transactions (including the CIRI Transaction and the
transactions described in Recital A hereof), or:
(a) liabilities or obligations disclosed and provided for in the
VoiceStream Balance Sheet or in the notes thereto or in VoiceStream SEC
Documents filed prior to the date hereof or in the VoiceStream 10-K; and
(b) liabilities or obligations that, individually or in the aggregate
have not had and would not be reasonably expected to have a VoiceStream Material
Adverse Effect.
SECTION 5.12 Compliance with Laws and Court Orders. Each member of the
-------------------------------------
VoiceStream Group and each VoiceStream Investment holds all licenses,
franchises, certificates, consents, permits, qualifications and authorizations
from all Governmental Bodies necessary for the lawful conduct of their business,
except where the failure to hold any of the foregoing, individually or in the
aggregate, has not had and would not be reasonably expected to have a
VoiceStream Material Adverse Effect. Each member of the VoiceStream Group and
each VoiceStream Investment is and has been in compliance with, and to the
knowledge of VoiceStream, is not under investigation with respect to and has not
been threatened to be charged with or given notice of any violation of, any such
license, franchise, certificate, consent, permit, qualification or
authorization, applicable law, statute, ordinance, rule, regulation, judgment,
injunction, order or decree, except for failures to comply or violations that,
individually or in the aggregate, have not had and would not be reasonably
expected to have a VoiceStream Material Adverse Effect.
SECTION 5.13 Litigation. There is no action, suit, investigation or
----------
proceeding (or any basis therefor) pending against, or, to the knowledge of
VoiceStream, threatened against or affecting, any member of the VoiceStream
Group or any VoiceStream Investment or any of their respective properties before
any court or arbitrator or before or by any other Governmental Body, that,
individually or in the aggregate, would be reasonably expected to have a
VoiceStream Material Adverse Effect.
SECTION 5.14 Finders' Fees. Except for fees payable to Goldman, there is
-------------
no investment banker, broker, finder or other intermediary that has been
retained by or is authorized to act on behalf of VoiceStream or any VoiceStream
Subsidiary who might be entitled to any fee or commission from Omnipoint, any of
the Omnipoint Subsidiaries, VoiceStream or any of the VoiceStream Subsidiaries
in connection with the Transactions. A copy of the engagement agreement with
Goldman has been provided to Omnipoint; except as set forth on such engagement
agreement, no other fees are payable to Goldman.
SECTION 5.15 Opinion of Financial Advisor. VoiceStream has received an
----------------------------
opinion of Goldman, financial advisor to VoiceStream, to the effect that, as of
June 23, 1999, from a financial point of view, the Merger Consideration is fair
to the holders of VoiceStream Common Stock.
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SECTION 5.16 Taxes. (a) Except as set forth in the VoiceStream
-----
Disclosure Schedules and except as would not have a VoiceStream Material Adverse
Effect, (i) all VoiceStream Tax Returns required to be filed with any taxing
authority by, or with respect to, VoiceStream and the VoiceStream Subsidiaries
have been filed in accordance with all applicable laws or an appropriate
extension of time to file such VoiceStream Tax Return has been obtained; (ii)
VoiceStream and the VoiceStream Subsidiaries have timely paid all Taxes shown as
due and payable on the VoiceStream Tax Returns that have been so filed, and, as
of the time of filing, the VoiceStream Tax Returns correctly reflected the facts
regarding the income, business, assets, operations, activities and the status of
VoiceStream and the VoiceStream Subsidiaries (other than Taxes which are being
contested in good faith by appropriate proceeding and for which adequate
reserves are reflected on the VoiceStream Balance Sheet); (iii) VoiceStream and
the VoiceStream Subsidiaries have made provision for all Taxes payable by
VoiceStream and the VoiceStream Subsidiaries for which no VoiceStream Tax Return
has yet been filed; (iv) the charges, accruals and reserves for Taxes with
respect to VoiceStream and the VoiceStream Subsidiaries reflected on the
VoiceStream Balance Sheet are adequate under GAAP to cover the Tax liabilities
accruing through the date thereof; (v) there is no action, suit, proceeding,
audit or claim now pending or to the knowledge of VoiceStream, threatened
against or with respect to VoiceStream or any VoiceStream Subsidiary in respect
of any Tax where an adverse determination is reasonably likely; (vi) the federal
income Tax Returns of VoiceStream and the VoiceStream Subsidiaries have been
examined and settled with the IRS (or the applicable statutes of limitation for
the assessment of federal income Taxes for such periods have expired) for all
years through 1997; and (vii) there are no Liens or encumbrances for Taxes on
any of the assets of VoiceStream or any VoiceStream Subsidiary except liens for
current Taxes not yet due.
(b) To the knowledge of VoiceStream, there is no plan or intention on
the part of any VoiceStream shareholder to sell, exchange, transfer or otherwise
dispose of any stock of Holding Company received in the Transactions, except
that VoiceStream shareholders that are partnerships for U.S. federal income tax
purposes may distribute such Holding Company stock to one or more of their
partners (other than to a partner which would, immediately after such
distribution, own 5 percent or more of Holding Company's stock, taking into
account such partner's pro rata share of any Holding Company stock held by the
partnership).
(c) The maximum number of shares of Holding Company Common Stock
which may be issued pursuant to conversion rights held by the Cook Entities
(after consummation of the Transactions), including conversion rights under the
CIRI Agreements, is 9,000,000.
SECTION 5.17 Tax Opinions. There are no facts or circumstances relating
------------
to VoiceStream that would, to VoiceStream's knowledge, prevent Jones Day from
delivering the opinions referred to in Sections 9.2(b) and 9.2(c) as of the date
hereof.
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SECTION 5.18 Employee Benefit Plans and Labor Matters.
----------------------------------------
(a) The VoiceStream Disclosure Schedule contains a true and complete
list, as of the date hereof, of all VoiceStream Employee Plans and all
VoiceStream Benefit Arrangements. Copies of each VoiceStream Employee Plan and
each VoiceStream Benefit Arrangement (and, if applicable, related trust
agreements) and all amendments thereto and written interpretations thereof have
been made available to Omnipoint as of the date hereof or will have been made
available to Omnipoint within thirty days after the date hereof, together with
the three most recent annual reports (Form 5500 including, if applicable,
Schedule B thereto) and the most recent actuarial valuation report prepared in
connection with any VoiceStream Employee Plan.
(b) No "accumulated funding deficiency," as defined in Section 412 of
the Code, has been incurred with respect to any VoiceStream Employee Plan
subject to such Section 412, whether or not waived. No "reportable event"
within the meaning of Section 4043 of ERISA for which the reporting requirements
have not been waived, and no event described in Section 4062 or 4063 of ERISA
has occurred in connection with any VoiceStream Employee Plan. Neither
VoiceStream nor to VoiceStream's knowledge any ERISA Affiliate of VoiceStream
has (i) engaged in, or is a successor or parent corporation to an entity that
has engaged in, a transaction described in Sections 4069 or 4212(c) of ERISA or
(ii) incurred, or reasonably expects to incur prior to the Effective Time (A)
any liability under Title IV of ERISA arising in connection with the termination
of, or a complete or partial withdrawal from, any plan covered or previously
covered by Title IV of ERISA or (B) any liability under Section 4971 of the Code
that in either case could become a liability of VoiceStream, any VoiceStream
Subsidiary, Omnipoint or any of their ERISA Affiliates after the Effective Time.
If a "complete withdrawal" by VoiceStream and all of its ERISA Affiliates were
to occur as of the Effective Time with respect to all Multiemployer Plans,
neither of VoiceStream, nor any VoiceStream Subsidiary would incur any
withdrawal liability under Title IV of ERISA.
(c) As of December 31, 1998, the fair market value of the assets of
each VoiceStream Pension Plan (excluding for these purposes any accrued but
unpaid contributions) exceeded the present value of all benefits accrued under
such VoiceStream Pension Plan calculated pursuant to FAS No. 87, "Employers'
Accounting for Pensions."
(d) Each VoiceStream Employee Plan that is intended to be qualified
under Section 401(a) of the Code is the subject of a favorable qualification
determination letter issued by the IRS and to VoiceStream's knowledge each such
VoiceStream Employee Plan is so qualified.
(e) There is no contract, plan or arrangement (written or otherwise)
covering any employee or former employee of VoiceStream or any VoiceStream
Subsidiary that, individually or collectively, could give rise to the payment of
any amount that would not be deductible pursuant to the terms of Sections 162(m)
or 280G of the Code.
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(f) As of December 31, 1998, there are no accumulated post-retirement
benefit obligations under any of the VoiceStream Employee Plans and VoiceStream
Benefit Arrangements as determined in accordance with Statement of Financial
Accounting Standards No. 106.
(g) Each VoiceStream Employee Plan and each VoiceStream Benefit
Arrangement has been maintained in material compliance with its terms and with
the requirements prescribed by any and all applicable statutes, orders, rules
and regulations (including any special provisions relating to registration or
qualification where such Plan was intended so to be so registered or qualified)
and has been maintained in good standing with applicable regulatory authorities.
(h) No employee or former employee of VoiceStream or any VoiceStream
Subsidiary will become entitled to any bonus, retirement, severance, job
security or similar benefit or enhancement of such benefit (including
acceleration of vesting or exercise of an incentive award) as a result of the
Transactions (either alone or together with any other event).
(i) Neither VoiceStream nor any of the VoiceStream Subsidiaries is,
or has been, a party to any collective bargaining agreement or union contract.
Neither VoiceStream nor any of the VoiceStream Subsidiaries is involved in or
threatened with any labor dispute, work stoppage, labor strike, slowdown or
grievance. To the knowledge of VoiceStream, there is no organizing effort or
representation question at issue with respect to any employee of VoiceStream or
any of the VoiceStream Subsidiaries.
SECTION 5.19 Environmental Matters.
---------------------
(a) Except as have not had and would not be reasonably expected to
have, individually or in the aggregate, a VoiceStream Material Adverse Effect:
(A) no notice, notification, demand, request for information,
citation, summons or order has been received, no complaint has been filed,
no penalty has been assessed, and no investigation, action, claim, suit,
proceeding or review (or any basis therefor) is pending or, to the
knowledge of VoiceStream, is threatened by any Governmental Body or other
Person relating to or arising out of any Environmental Law;
(B) each member of the VoiceStream Group and each VoiceStream
Investment is and has been in compliance with all Environmental Laws and
all Environmental Permits; and
(C) there are no liabilities of or relating to any member of the
VoiceStream Group or any VoiceStream Investment of any kind whatsoever,
whether accrued, contingent, absolute, determined, determinable or
otherwise arising under or
47
<PAGE>
relating to any Environmental Law and there are no facts, conditions,
situations or set of circumstances that could reasonably be expected to
result in or be the basis for any such liability.
(b) There have been no Environmental Reports of which VoiceStream has
knowledge in relation to the current or prior business of any member of the
VoiceStream Group or any VoiceStream Investment or any property or facility now
or previously owned or leased by any member of the VoiceStream Group or any
VoiceStream Investment that reveal matters that, individually or in the
aggregate, have had or would reasonably be expected to have a VoiceStream
Material Adverse Effect; and
(c) For purposes of this Section 5.19, the terms VoiceStream and
VoiceStream Subsidiary shall include any entity that is, in whole or in part, a
predecessor of any member of the VoiceStream Group or any VoiceStream
Investment.
SECTION 5.20 Intellectual Property. With such exceptions as,
---------------------
individually or in the aggregate, have not had and would not be reasonably
expected to have a VoiceStream Material Adverse Effect, each member of the
VoiceStream Group and each VoiceStream Investment owns or has a valid license to
use each trademark, service mark, trade name, invention, patent, trade secret,
copyright, know-how (including any registrations or applications for
registration of any of the foregoing) or any other similar type of proprietary
intellectual property right (collectively, the "VoiceStream Intellectual
Property") necessary to carry on its business substantially as currently
conducted. No member of the VoiceStream Group or any VoiceStream Investment has
received any notice of infringement of or conflict with, and to VoiceStream's
knowledge, there are no infringements of or conflicts with, the rights of any
Person with respect to the use of any VoiceStream Intellectual Property that, in
either such case, individually or in the aggregate, have had or would be
reasonably expected to have, a VoiceStream Material Adverse Effect.
SECTION 5.21 Contracts. No member of the VoiceStream Group nor any
---------
VoiceStream Investment is a party to or bound by (i) any "material contract" (as
such term is defined in Item 601(b)(10) of Regulation S-K of the SEC) or any
agreement, contract or commitment that would be such a "material contract" but
for the exception for contracts entered into in the ordinary course of business,
(ii) any non-competition agreement or any other agreement or obligation which
materially limits or will materially limit any member of the VoiceStream Group
or any VoiceStream Investment Interest from engaging in the business of
providing wireless communications services or from developing wireless
communications technology anywhere in the world or (iii) any management
agreement, technical services agreement or other agreement whereby any member of
the VoiceStream Group or any of its Investment Interest is provided or is
required to provide management or technical services to any other Person. With
such exceptions as, individually or in the aggregate, have not had, and would
not be reasonably expected to have, a VoiceStream Material Adverse Effect, (x)
each of the contracts, agreements and commitments of the VoiceStream Group and
the VoiceStream Investments is valid and in full force and effect and (y)
neither any member of the VoiceStream
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Group nor any VoiceStream Investments has violated any provision of, or
committed or failed to perform any act which, with or without notice, lapse of
time, or both, would constitute a default under the provisions of any such
contract, agreement or commitment. To the knowledge of VoiceStream, no
counterparty to any such contract, agreement or commitment has violated any
provision of, or committed or failed to perform any act which, with or without
notice, lapse of time, or both would constitute a default or other breach under
the provisions of, such contract, agreement or commitment, except for defaults
or breaches which, individually or in the aggregate, have not had, or would not
reasonably be expected to have, a VoiceStream Material Adverse Effect. Neither
any member of the VoiceStream nor any VoiceStream Investment is a party to, or
otherwise a guarantor of or liable with respect to, any interest rate, currency
or other swap or derivative transaction, other than any such transactions which
are not material to the business of the VoiceStream Group. VoiceStream has
provided or made available to Omnipoint a copy of each agreement described in
item (i), (ii) or (iii) above.
SECTION 5.22 VoiceStream Employees. The VoiceStream Disclosure Schedule
---------------------
contains a list setting forth the name and current annual salary and other
compensation payable to each Significant VoiceStream Employee, and the profit
sharing, bonus or other form of additional compensation paid or payable by
VoiceStream to or for the benefit of each such person for the current fiscal
year. Except as set forth on the VoiceStream Disclosure Schedule or under the
employment, consulting or other agreements listed thereon, there are no oral or
written contracts, agreements or arrangements obligating VoiceStream to increase
the compensation or benefits presently being paid or hereafter payable to any
Significant VoiceStream Employees. The VoiceStream Disclosure Schedule annexed
hereto sets forth summaries of all oral employment or consulting or similar
arrangements regarding any Significant VoiceStream Employee which are not
terminable without liability on thirty (30) days' or less prior notice and lists
all written employment and consulting agreements with respect to any Significant
VoiceStream Employee, true and complete copies of which have been provided to
Omnipoint. Except for severance obligations to Significant VoiceStream Employees
set forth on the VoiceStream Disclosure Schedule, there is not due or owing and
there will not be due and owing at the Effective Time to any Significant
VoiceStream Employees, any sick pay, severance pay (whether arising out of the
termination of any Significant VoiceStream Employee prior to, on, or subsequent
to the Effective Time), compensable time or pay, including salary, commission
and bonuses, personal time or pay or vacation time or vacation pay attributable
to service rendered on or prior to the Effective Time. Except as disclosed in
the VoiceStream Disclosure Schedule, there is not now, and there will not be as
of the Effective Time, any liability arising out of claims made or suits brought
(including workers' compensation claims and claims or suits for contribution to,
or indemnification of, third parties, occupational health and safety,
environmental, consumer protection or equal employment matters) for injury,
sickness, disease, discrimination, death or termination of employment of any
Significant VoiceStream Employee, or other employment matter to the extent
attributable to an event occurring or a state of facts existing on or prior to
the Effective Time.
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SECTION 5.23 Employment Matters. VoiceStream and each VoiceStream
------------------
Subsidiary (A) are in compliance with all applicable Federal and state laws,
rules and regulations respecting employment, employment practices, terms and
conditions of employment and wages and hours, in each case, with respect to
VoiceStream Employees, except where the failure to be in compliance would not,
singly or in the aggregate, a material adverse effect on VoiceStream, any
VoiceStream Subsidiary or their financial condition or business; (B) have
withheld all amounts required by law or by agreement to be withheld from the
wages, salaries and other payments to VoiceStream Employees; (C) is not liable
for any arrears of wages or any taxes or any penalty for failure to comply with
any of the foregoing, except as would not have a VoiceStream Material Adverse
Effect; and (D) (other than routine payments to be made in the normal course of
business and consistent with past practice) are not liable for any payment to
any trust or other fund or to any governmental or administrative authority, with
respect to unemployment compensation benefits, Social Security or other benefits
for VoiceStream Employees.
SECTION 5.24 Labor. No work stoppage or labor strike with respect to
-----
VoiceStream Employees is pending or, to the best knowledge of VoiceStream, is
threatened. Except as set forth on the VoiceStream Disclosure Schedules, there
is no involvement nor, to the best knowledge of VoiceStream, is there
threatened, any labor dispute, grievance or litigation relating to labor, safety
or discrimination matters involving any VoiceStream Employee including charges
of unfair labor practices or discrimination complaints, which, if adversely
determined, would reasonably be expected to have individually or in the
aggregate, a material adverse effect on its financial condition or business.
There has been no engagement in any unfair labor practices within the meaning of
the National Labor Relations Act which would, individually or in the aggregate,
a VoiceStream Material Adverse Effect.
SECTION 5.25 There is not presently nor has there been in the past any
collective bargaining agreement or union contract with respect to VoiceStream
Employees and no collective bargaining agreement with respect to VoiceStream
Employees is at the date hereof being negotiated.
SECTION 5.26 Vote Required. The only vote of the holders of any class or
-------------
series of capital stock of VoiceStream necessary to approve this Agreement and
the Transactions is the affirmative vote of the holders of a majority of the
outstanding shares of VoiceStream Common Stock (the "VoiceStream Stockholders'
Approval").
SECTION 5.27 Insurance. The VoiceStream Disclosure Schedules set forth a
---------
list and brief description of all policies of fire, liability and other forms of
insurance and material fidelity bonds held by the VoiceStream Group. The
VoiceStream Group's assets, business, equipment, property and operations are
adequately insured against loss or damage and all other hazards or risks of the
character usually insured against by companies in the same or similar business
and such insurance shall be continued in full force and effect through 11:59
p.m. on the Effective Time. Each such policy and fidelity bond is in full force
and effect, all premiums due
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and payable under such policies and fidelity bonds have been and on the
Effective Time will be paid in full, and there are no disputed claims arising
under such policies or fidelity bonds.
SECTION 5.28 Bank Accounts. The Disclosure Schedule sets forth a
-------------
complete list of all bank accounts, savings deposits, money-market accounts,
certificates of deposit, safety deposit boxes, and similar investment accounts
with banks or other financial institutions maintained by or on behalf of the
VoiceStream or any VoiceStream Subsidiary showing the depository bank or
institution address, appropriate bank contact personnel, account number and
names of signatories.
SECTION 5.29 Transactions with Affiliates. No Affiliate of the
----------------------------
VoiceStream Group or VoiceStream Investment nor any stockholder, officer,
director, partner, member, consultant or employee of any thereof, is at the date
hereof a party to any transaction with any member of the VoiceStream Group, or
VoiceStream Investment including any contract or arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property (including intellectual property) to or from, or otherwise requiring
payments to or from any member of the VoiceStream Group, VoiceStream Investment,
or any Affiliate thereof.
SECTION 5.30 Not an Interested Stockholder. As of the date of this
-----------------------------
Agreement, neither VoiceStream nor any of its Affiliates is an "Interested
Stockholder" as such term is defined in Section 203 of the Delaware Law.
SECTION 5.3 1 Representations with Respect to Holding Company.
-----------------------------------------------
(a) There is currently no indebtedness between Omnipoint common
shareholders and Holding Company, and none will be created as a result of the
Transactions, other than Holding Company's obligation to pay cash to Omnipoint
shareholders pursuant to Section 3.3. of the Agreement.
(b) Immediately following the Transactions, Omnipoint shareholders
and VoiceStream shareholders will collectively own at least 80 percent of the
total combined voting power of all classes of Holding Company's stock entitled
to vote and at least 80 percent of the total number of shares of all other
classes of Holding Company's stock.
(c) Each Omnipoint shareholder and VoiceStream shareholder will
receive stock (and, in the case of Omnipoint shareholders, cash) of Holding
Company with an aggregate value approximately equal to the fair market value of
their stock transferred to Holding Company.
(d) Holding Company is not, nor will it be, an investment company
within the meaning of Section 351(e) of the Code immediately after the
Transactions.
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(e) Holding Company, Omnipoint and VoiceStream will each remain in
existence following the Transactions. Holding Company will retain the Omnipoint
Shares and VoiceStream Shares, and there is no plan or intention on the part of
Holding Company to liquidate Omnipoint or VoiceStream or otherwise dispose of
such shares.
(f) To the knowledge of Holding Company there is no plan or intention
on the part of any Omnipoint shareholder or VoiceStream Shareholders to sell,
exchange, transfer or otherwise dispose of any stock of Holding Company received
in the Transactions, except that such Omnipoint shareholders and VoiceStream
shareholders as are partnerships for U.S. federal income tax purposes may
distribute such Holding Company stock to one or more of their partners (other
than to a partner which would, immediately after such distribution, own 5
percent or more of Holding Company's stock, taking into account such partner's
pro rata share of any Holding Company stock held by the partnership).
ARTICLE 6
COVENANTS OF OMNIPOINT
Omnipoint agrees that:
SECTION 6.1 Omnipoint Interim Operations. Except as set forth in the
----------------------------
Omnipoint Disclosure Schedule or as otherwise expressly contemplated hereby,
without the prior written consent of VoiceStream, Omnipoint shall, and shall
cause each member of the Omnipoint Group to, conduct its business in all
material respects in the ordinary course consistent with past practice and use
all reasonable efforts to: (i) preserve intact its present business
organization; (ii) keep available the services of its key officers and key
employees; (iii) maintain in effect all material foreign, federal, state and
local licenses, approvals and authorizations, including, without limitation, the
Omnipoint FCC Licenses, all material licenses and permits that are required for
Omnipoint or any Omnipoint Subsidiary to carry on its business and (iv) preserve
existing relationships with its material partners, lenders, suppliers and others
having material business relationships with it so that the business of the
Omnipoint Group shall not be adversely affected in any material respect as of
the Effective Time. Further, and without limiting the generality of the
foregoing, except as set forth in Section 6.1 of the Omnipoint Disclosure
Schedule, from the date hereof until the Effective Time, without the prior
written consent of VoiceStream, Omnipoint shall not, nor shall it permit any
member of the Omnipoint Group or Omnipoint Investment to:
(a) amend its certificate of incorporation or bylaws or other
applicable governing instrument;
(b) amend any term of any of its outstanding securities;
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(c) split, combine, subdivide or reclassify any shares of its capital
stock or other equity interests or declare, set aside or pay any dividend or
other distribution (whether in cash, stock or property or any combination
thereof) in respect of its capital stock, or redeem, repurchase or otherwise
acquire or offer to redeem, repurchase, or otherwise acquire any of its
securities or any securities of any member of the Omnipoint Group or Omnipoint
Investment except for dividends paid by any Omnipoint Subsidiary that is,
directly or indirectly, wholly owned by Omnipoint;
(d) adopt a plan or agreement of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization or other
material reorganization (other than a merger or consolidation between wholly
owned Omnipoint Subsidiaries);
(e) issue, deliver or sell, or authorize the issuance, delivery or
sale of, any shares of its capital stock of any class or other equity interests
or any securities convertible into or exercisable for, or any rights, warrants
or options to acquire, any such capital stock or other equity interests, other
than (i) the issuance of shares of Omnipoint Common Stock upon the exercise of
currently outstanding stock options or warrants in accordance with their present
terms, (ii) issuances pursuant to the conversion of convertible securities
outstanding on the date hereof in accordance with their present terms and (iii)
the granting of options to acquire shares of Omnipoint Common Stock in
accordance with Section 6.1(e) of the Omnipoint Disclosure Schedule;
(f) incur any capital expenditures except as set forth in the
Omnipoint Disclosure Schedule;
(g) acquire (by merger, consolidation, acquisition of stock or assets
or otherwise) any corporation, limited liability company, partnership, other
business organization or division thereof, licenses or other assets except for
(i) capital expenditures, which shall be governed by clause (f), (ii) pursuant
to agreements in effect as of the date hereof and listed on the Omnipoint
Disclosure Schedule, or (iii) tangible assets used in the ordinary course of
business of Omnipoint and the Omnipoint Subsidiaries in a manner that is
consistent with past practice;
(h) other than pursuant to agreements in effect as of the date hereof
and listed on the Omnipoint Disclosure Schedule, sell, lease, license, encumber
or otherwise transfer any assets (including any licenses or Investment Interest)
having a fair market value exceeding $5,000,000 in any one transaction or series
of related transactions or $10,000,000 in the aggregate;
(i) incur, assume or guarantee any Indebtedness other than pursuant to
agreements in effect on the date hereof and listed on the Omnipoint Disclosure
Schedule;
(j) create, incur, assume or suffer to exist any Lien upon any of its
property, assets or revenues, whether now owned or hereafter acquired, other
than Liens incurred in the
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ordinary course of business to secure indebtedness or other obligations
permitted by this Agreement;
(k) create, incur, assume or suffer to exist any obligation whereby
Omnipoint or any Omnipoint Subsidiary guarantees any Indebtedness, leases,
dividends or other obligations of any third party;
(l) make any loan, advance or capital contributions to or investment
in any Person, or acquire any Investment Interest, other than loans, advances or
capital contributions to or investments in its wholly owned Subsidiaries;
(m) except for capital expenditures, which shall be governed by clause
(f), engage in or enter into any transaction or commitment, enter into any
contract or agreement, or relinquish or amend in any material respect any
contract or other right, in any case, material to the Omnipoint Group, taken as
a whole, other than transactions and commitments in the ordinary course of
business consistent with past practices and those contemplated by this
Agreement;
(n) enter into any agreement or arrangement that materially limits or
otherwise materially restricts Omnipoint, any Omnipoint Subsidiary or any of
their respective Affiliates or any successor thereto or that could, after the
Effective Time, limit or restrict VoiceStream, any VoiceStream Subsidiary, the
Surviving Corporation or any of their Affiliates, from engaging in the business
of providing wireless communications services or developing wireless
communications technology anywhere in the world or otherwise from engaging in
any other business;
(o) except as required pursuant to any written agreements listed on
the Omnipoint Disclosure Schedule and existing on the date hereof or as
otherwise mandated by law as of the date hereof (i) enter into any commitment to
provide any severance or termination pay to (or amend any existing arrangement
with) any director, officer or employee of Omnipoint or any Omnipoint Subsidiary
that calls for payments in excess of $200,000 in the aggregate for all such
directors, officers, or (ii) increase the benefits payable under any existing
severance or termination pay policy or employment agreement (other than as may
be increased by function of the existing terms of any such policy or agreement),
(iii) enter into any employment, deferred compensation or other similar
agreement (or amend any such existing agreement) with any director, officer or
employee of Omnipoint or any Omnipoint Subsidiary that calls for annual payments
in excess of $125,000, (iv) establish, adopt or amend (except as required by
applicable law) any collective bargaining, bonus, profit-sharing, thrift,
pension, retirement, deferred compensation, compensation, stock option,
restricted stock or other benefit plan or arrangement covering any director,
officer or employee of Omnipoint or any Omnipoint Subsidiary, except that
Omnipoint and the Omnipoint Subsidiaries may amend any such existing agreement
or plan or adopt a successor plan or arrangement to the extent mandated by
applicable law or to the extent that such amendment would not result in a more
than de minimis increase in the costs or liabilities under such agreement or
plan, (v) increase the compensation, bonus or other benefits
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payable to any director, officer or employee of Omnipoint or any Omnipoint
Subsidiary or (vi) amend the terms of any outstanding option or right to
purchase shares of Omnipoint Common Stock;
(p) change (i) its methods of accounting or accounting practices in
any material respect, except as required by concurrent changes in U.S. GAAP or
by Law or (ii) its fiscal year;
(q) make, or amend in any respect the terms of any Investment
Interest, which cannot be terminated within 30 days of the Effective Time
without any penalty;
(r) settle, or propose to settle, any material litigation,
investigation, arbitration, proceeding or other claim;
(s) make any material tax election or enter into any settlement or
compromise of any material tax liability;
(t) take any action, other than as expressly permitted by this
Agreement, that would make any representation or warranty of Omnipoint hereunder
inaccurate in any material respect at the Effective Time; or
(u) agree or commit to do any of the foregoing;
provided that the limitations set forth above shall not apply to any transaction
exclusively between (i) Omnipoint and any Omnipoint Subsidiary that is wholly
owned by Omnipoint or between any such wholly owned Omnipoint Subsidiaries and
(ii) any member or members of the Omnipoint Group and any member or members of
the VoiceStream Group.
SECTION 6.2 No Solicitation.
---------------
(a) From the date hereof until the termination hereof, Omnipoint will
not, and will cause the Omnipoint Subsidiaries, Omnipoint Affiliates, and the
officers, directors, employees, investment bankers, attorneys, accountants,
consultants or other agents or advisors of Omnipoint, the Omnipoint Subsidiaries
and the Omnipoint Affiliates not to, directly or indirectly: (i) take any action
to solicit, initiate, facilitate or encourage the submission of any Acquisition
Proposal; (ii) other than in the ordinary course of business and not related to
an Acquisition Proposal, engage in any discussions or negotiations with, or
disclose any non-public information relating to Omnipoint or any Omnipoint
Subsidiary or afford access to the properties, books or records of Omnipoint or
any Omnipoint Subsidiary to, any Person who is known by Omnipoint to be
considering making, or has made, an Acquisition Proposal; (iii) (A) approve any
transaction under Section 203 of the Delaware Law or (B) approve of any Person's
becoming an "interested stockholder" under Section 203 of Delaware Law or (iv)
enter into any agreement with respect to an Acquisition Proposal. Nothing
contained in this
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Agreement shall prevent the Board of Directors of Omnipoint from complying with
Rule 14e-2 and Rule 14d-9 under the 1934 Act with regard to an Acquisition
Proposal; provided that the Board of Directors of Omnipoint shall not recommend
that the stockholders of Omnipoint tender their shares in connection with a
tender offer except to the extent the Board of Directors of Omnipoint by a
majority vote determines in its good faith judgment that such a recommendation
is required to comply with the fiduciary duties of the Board of Directors of
Omnipoint to shareholders under applicable Delaware Law, after receiving the
advice of outside legal counsel.
(b) Omnipoint will notify VoiceStream promptly (but in no event later
than 24 hours) after receipt by Omnipoint (or any of its advisors) of any
Acquisition Proposal, or of any request (other than in the ordinary course of
business and not related to an Acquisition Proposal) for non-public information
relating to Omnipoint or any of the Omnipoint Subsidiaries or for access to the
properties, books or records of Omnipoint or any Omnipoint Subsidiary by any
Person who is known to be considering making, or has made, an Acquisition
Proposal. Omnipoint shall provide such notice orally and in writing and shall
identify the Person making, and the terms and conditions of, any such
Acquisition Proposal, indication or request. Omnipoint shall keep VoiceStream
fully informed, on a prompt basis (but in any event no later than 24 hours), of
the status and details of any such Acquisition Proposal, indication or request.
Omnipoint shall, and shall cause the Omnipoint Subsidiaries and the directors,
employees and other agents of Omnipoint and the Omnipoint Subsidiaries to, cease
immediately and cause to be terminated all activities, discussions or
negotiations, if any, with any Persons conducted prior to the date hereof with
respect to any Acquisition Proposal.
SECTION 6.3 Access to Information. Omnipoint shall (i) give to
---------------------
VoiceStream and VoiceStream's counsel, financial advisors, auditors and other
authorized representatives unlimited access during normal business hours to the
offices, properties, books and records of Omnipoint and the Omnipoint
Subsidiaries, (ii) at VoiceStream's request, furnish to VoiceStream and
VoiceStream's counsel, financial advisors, auditors and other authorized
representatives all financial and operating data (including without limitation,
all subscriber information (including a breakdown of all additions and
disconnections) and all information concerning all capital expenditures) and
other information to which the Omnipoint Board of Directors or the senior
executives of Omnipoint are provided or have access to (all of the foregoing to
be furnished to VoiceStream simultaneously with the same being furnished to any
member of Omnipoint's Board of Directors or the senior executives of Omnipoint),
and (iii) instruct its employees, counsel, financial advisors, auditors and
other authorized representatives to cooperate with the other party in
VoiceStream's investigation. Any investigation pursuant to this Section 6.3
shall be conducted in such manner as not to interfere unreasonably with the
conduct of the business of Omnipoint and the Omnipoint Subsidiaries. The
foregoing information shall be held in confidence to the extent required by, and
in accordance with, the provisions of the Confidentiality Agreement.
SECTION 6.4 Omnipoint shall use its reasonable best efforts to take, or
cause to be taken, all actions and do, or cause to be done, all things
necessary, proper or advisable under
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applicable law and regulations to consummate the closing under the CIRI
Agreements pursuant to the terms thereof. Prior to the Effective Time, upon the
satisfaction or waiver by VoiceStream or Omnipoint, as applicable of all the
conditions for the consummation of the Transactions, Omnipoint shall in
accordance with the CIRI Agreements sell, assign, transfer, convey and deliver
to each Purchaser (as defined in each of the CIRI Agreements) the FCC Licenses
and Schedule I, Schedule II and Schedule III Assets and Assumed Liability (as
defined in each of the CIRI Agreements).
ARTICLE 7
COVENANTS OF VOICESTREAM AND HOLDING COMPANY
VoiceStream and Holding Company agree that:
SECTION 7.1 VoiceStream Interim Operations. Except as set forth in the
------------------------------
VoiceStream Disclosure Schedule or as otherwise expressly contemplated hereby,
without the prior consent of Omnipoint, from the date hereof until the Effective
Time, VoiceStream shall not, nor shall it permit any members of the VoiceStream
Group or any VoiceStream Investment to:
(a) amend its certificate of incorporation, bylaws or other applicable
governing instrument;
(b) amend any material terms of the shares of VoiceStream Common
Stock;
(c) split, combine, subdivide or reclassify any shares of VoiceStream
Common Stock or declare, set aside or pay any dividend or other distribution
(whether in cash, stock or property or any combination thereof) in respect of
VoiceStream Common Stock, except for (i) regular quarterly cash dividends, (ii)
regular dividends on any future series of preferred stock pursuant to the terms
of such securities, or (iii) dividends paid by any VoiceStream Subsidiary to
VoiceStream or any VoiceStream Subsidiary that is, directly or indirectly,
wholly owned by VoiceStream;
(d) take any action that would or would reasonably be expected to
prevent, impair or materially delay the ability of Omnipoint or VoiceStream to
consummate the transactions contemplated by this Agreement;
(e) change (i) its methods of accounting or accounting practices in
any material respect except as required by concurrent changes in U.S. GAAP or by
law or (ii) its fiscal year;
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(f) enter into or acquire any new line of business that (i) is
material to the VoiceStream Group taken as a whole and (ii) is not strategically
related to the current business or operations of the VoiceStream Group; or
(g) agree or commit to do any of the foregoing.
SECTION 7.2 Director and Officer Liability.
------------------------------
(a) Holding Company shall indemnify and hold harmless and advance
expenses to the present and former officers and directors of each member of the
Omnipoint Group and the present and former officers and directors of each member
of the VoiceStream Group, and each person who prior to the Effective Time
becomes an officer or director of any member of the Omnipoint Group or any
member of the VoiceStream Group (each an "Indemnified Person"), in respect of
acts or omissions by them in their capacities as such occurring at or prior to
the Effective Time (including, without limitation, for acts or omissions
occurring in connection with this Agreement and the consummation of the
Transactions) to the same extent provided under Omnipoint's certificate of
incorporation and bylaws in effect on the date hereof (with respect to the
officers and directors of the Omnipoint Group) or VoiceStream's certificate of
incorporation and bylaws in effect on the date hereof (with respect to the
officers and directors of the VoiceStream Group) (collectively, the
("Indemnified Losses"); provided that such indemnification shall be subject to
any limitation imposed from time to time under applicable law. Without limiting
the generality of the foregoing, the Indemnified Losses shall include reasonable
costs of prosecuting a claim under this Section 7.2(a). Holding Company shall
periodically advance or reimburse each Indemnified Person for all reasonable
fees and expenses of counsel constituting Indemnified Losses as such fees and
expenses are incurred; provided that such Indemnified Person shall agree to
promptly repay to Holding Company the amount of any such reimbursement if it
shall be judicially determined by judgment or order not subject to further
appeal or discretionary review that such Indemnified Person is not entitled to
be indemnified by Holding Company in connection with such matter.
(b) For six years after the Effective Time, Holding Company shall
provide officers' and directors' liability insurance in respect of acts or
omissions occurring prior to the Effective Time (including, without limitation,
for acts or omissions occurring in connection with this Agreement and the
consummation of the Transactions) covering each such Indemnified Person
currently covered by Omnipoint's officers' and directors' liability insurance
policy (with respect to officers and directors of the Omnipoint Group) or by
VoiceStream's officers' and directors' liability insurance policy (with respect
to officers and directors of the VoiceStream Group) on terms with respect to
coverage and amount (including with respect to the payment of attorney's fees)
no less favorable than those of such policy in effect on the date hereof (which
policies have been made available by Omnipoint to VoiceStream and by VoiceStream
to Omnipoint); provided that if the aggregate annual premiums for such insurance
during such period shall exceed 200% of the per annum rate of premium paid by
Omnipoint (with respect to the liability insurance policies of the officers and
directors of Omnipoint) or VoiceStream (with respect to the liability insurance
policies of the officers and directors of VoiceStream) as of the date hereof for
such insurance, then Holding Company shall provide a policy with the best
coverage as shall then be available at 200% of such rate.
(c) The rights of each Indemnified Person and its heirs and legal
representatives under this Section 7.2 shall be in addition to any rights such
Person may have under the certificate of incorporation or bylaws of any member
of the Omnipoint Group (with respect to the Omnipoint officers and directors) or
the VoiceStream Group (with respect to the VoiceStream officers and directors)
or under Delaware Law or any other applicable laws. These rights shall survive
consummation of
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the Transactions and are intended to benefit, and shall be enforceable by, each
Indemnified Person.
SECTION 7.3 Listing of Stock. Holding Company shall use its reasonable
----------------
best efforts to cause (i) the shares of Holding Company Common Stock to be
issued in connection with the Transactions (and the shares of Holding Company
Common Stock underlying the securities to be issued pursuant to Section 3.6) to
be approved for listing on NASDAQ, subject to official notice of issuance, and
(ii) the securities of Omnipoint to be de-listed from NASDAQ following the
Transactions.
SECTION 7.4 Holding Company Board of Directors. Immediately prior to
----------------------------------
the Effective Time, the Board of Directors of Holding Company will take all
necessary action to expand the size of its Board of Directors of Holding Company
to 14 members and to appoint to the Holding Company Board, as of the Effective
Time, 4 current members of the Omnipoint Board selected by Omnipoint who
agrees to serve in that capacity (the "New Directors"). From the Effective
Time until and including the second annual meeting of the stockholders of
Holding Company taking place after the Effective Time, the Board of Directors of
Holding Company will nominate the New Directors for reelection to the Holding
Company Board of Directors at each subsequent annual or special meeting of the
stockholders of Holding Company at which the New Directors' term expires. The
provisions of this Section 7.4 shall survive the consummation of the
Transactions and are intended to benefit, and shall be enforceable by, the New
Directors.
SECTION 7.5 Employee Matters.
----------------
(a) Holding Company shall, or shall cause its Subsidiaries to:
(i) honor the terms of all Omnipoint Employee Plans and
Omnipoint Benefit Arrangements as in effect on the date hereof (or as
amended with the prior consent of VoiceStream) and to pay the benefits
required under such terms of such plans and arrangements, in each case
subject to Section 7.5(c); and
(ii) until December 31, 2001 (the "Benefits Maintenance Period"),
with respect to employees of Omnipoint or any of Omnipoint Subsidiaries at
the Effective Time ("Transferred Employees"), provide a level of employee
benefits and aggregate compensation which is substantially comparable in
the aggregate to the level of employee benefits and aggregate compensation
provided by Omnipoint and Omnipoint Subsidiaries as of the Effective Time
(other than the benefits provided under any severance or termination
benefit plans and arrangements of Omnipoint or any Omnipoint Subsidiary).
(b) If Transferred Employees are included in any VoiceStream Benefit
Arrangement or VoiceStream Employee Plan, including without limitation, any plan
or arrangement providing vacation benefits, the Transferred Employees shall
receive credit for service prior to the Effective Time with Omnipoint and the
Omnipoint Subsidiaries and their
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predecessors to the same extent such service was counted under similar Omnipoint
Employee Plans and Omnipoint Benefit Arrangements for purposes of determining
eligibility to participate, vesting [and the level of benefits provided]. If
Transferred Employees or their dependents are included in any medical, dental or
health plan other than the plan or plans they participated in at the Effective
Time (a "Successor Plan"), any such Successor Plan shall (i) waive all
limitations as to pre-existing conditions, exclusions and waiting periods,
except to the extent such limitations, exclusions or waiting periods were
applicable to such employees or dependents under any corresponding Omnipoint
Employee Plan at the Effective Time, and (ii) provide each such employee or
dependent with credit for any copayments and deductibles paid prior to the date
of inclusion in the Successor Plan in satisfying any applicable deductible or
out-of-pocket requirements under such Successor Plan.
(c) Notwithstanding any of the above, nothing contained herein shall
be construed as requiring VoiceStream or any VoiceStream Subsidiary to continue
any specific Employee Plan or Benefit Arrangement or to continue the employment
of any specific person, provided, however, that any changes that VoiceStream or
any VoiceStream Subsidiary may make to any such Employee Plan or Benefit
Arrangement are permitted by the terms of the applicable Employee Plan or
Benefit Arrangement under any applicable Law.
SECTION 7.6 Access to Information. VoiceStream, between the date hereof
---------------------
and the earlier of the effective time of the termination of this Agreement,
between the date hereof and the earlier of the Effective Time or the Termination
of this Agreement, shall (i) give to Omnipoint and Omnipoint's counsel,
financial advisors, auditors and other authorized representatives reasonable
access during normal business hours to the offices, properties, books and
records of VoiceStream and the VoiceStream Subsidiaries, (ii) furnish to
Omnipoint and Omnipoint's counsel, financial advisors, auditors and other
authorized representatives such financial and operating data and other
information as Omnipoint may reasonably request and (iii) instruct its
employees, counsel, financial advisors, auditors and other authorized
representatives to cooperate with Omnipoint's investigation. Any investigation
pursuant to this Section 7.6 shall be conducted in such manner as not to
interfere unreasonably with the conduct of the business of VoiceStream.
SECTION 7.7 Covenants with Respect to Holding Company.
-----------------------------------------
(a) Holding Company will not issue any stock as compensation for
services in connection with the Transactions or take any other action which may
cause such Transactions not to qualify as an exchange under Section 351 of the
Code.
(b) Holding Company will retain the VoiceStream and Omnipoint shares
following the Transactions and Holding Company will not liquidate Omnipoint or
VoiceStream or otherwise dispose of such shares unless it obtains an opinion of
counsel to the effect that such liquidation or disposition will not cause the
Transactions to fail to qualify as an exchange under Section 351 of the Code.
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(c) Holding Company will not take any action, or cause VoiceStream or
Omnipoint to take any action, which may cause the Transactions not to qualify as
an exchange under Section 351 of the Code.
SECTION 7.8 Registration Rights. Not later than 15 days after the
-------------------
Closing Date, Holding Company shall prepare and file with the SEC a registration
statement (the "Affiliate Registration Statement") on Form S-1, S-3, if the
Holding Company is eligible to use such form, or any other filing form which
Holding Company shall deem appropriate, with respect to the sale of the shares
of Holding Company Common Stock to be held by any "affiliate" (as such term is
defined under Rule 145 of the 1933 Act) (and their limited partners) of either
Omnipoint or VoiceStream immediately following the Effective Time (the
"Affiliate Shares"). Holding Company shall take all reasonable steps necessary
to ensure that the Affiliate Registration Statement does not, as of its
effective date, contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading. Holding Company shall use its best efforts
to have the Affiliate Registration Statement declared effective as soon as
practicable after the Closing Date and shall keep the Affiliate Registration
Statement effective subject to appropriate "blackout" periods and other
exceptions and limitations as the Board of Directors of Holding Company
determines in good faith to be customary and appropriate until the earlier of
(i) one year after its effective date, (ii) all Affiliate Shares have been sold
thereunder, or (iii) all Affiliate Shares may be sold without registration under
the 1933 Act.
ARTICLE 8
COVENANTS OF VOICESTREAM AND OMNIPOINT
Each of the parties hereto agree that:
SECTION 8.1 Best Efforts.
------------
(a) Subject to the terms and conditions of this Agreement, each of the
parties will use its reasonable best efforts to promptly (i) take, or cause to
be taken, all actions and to do, or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations to consummate the
Transactions as soon as practicable, including preparing and filing as promptly
as practicable all documentation to effect all necessary filings, notices,
petitions, statements, registrations, submissions of information, applications
and other documents, and (ii) obtain and maintain all approvals, consents,
registrations, permits, authorizations and other confirmations required to be
obtained from any third party (including consents of the FAA and other
Governmental Bodies) that are necessary, proper or advisable to consummate the
Transactions. In connection with the foregoing, Omnipoint will cooperate with
and assist VoiceStream, and, with respect to matters that are within Omnipoint's
power or control, will use its best efforts to promptly (i) take, or cause to be
taken, all actions and to do, or cause to be
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done, all things necessary, proper or advisable under applicable laws and
regulations to consummate the Transactions as soon as practicable, including
preparing and filing as promptly as practicable all documentation to effect all
necessary filings, notices, petitions, statements, registrations, submissions of
information, applications and other documents, (ii) obtain and maintain all
approvals, consents, registrations, permits, authorizations and other
confirmations required to be obtained from any third party that are necessary,
proper or advisable to consummate the Transactions; provided, however, no member
of the VoiceStream Group or any VoiceStream Subsidiary shall be required to
divest or hold separate or otherwise take or commit to take any action that
limits its freedom of action with respect to (or Holding Company's ability to
retain) any member of the Omnipoint Group or any Omnipoint Investment or any
material portion of the assets of the VoiceStream Group or any of the
VoiceStream Group's business, product lines, or assets of the Omnipoint Group,
(iii) consummate the CIRI Transactions, and (iv) consummate the Hutchison
Transaction. At VoiceStream's request, Omnipoint will commit to and implement
any divestiture, hold separate or similar transaction or action with respect to
any asset or business of the Omnipoint Group or any Omnipoint Investment, which
commitment and implementation may, at Omnipoint's option, be conditioned upon
and effective as of the Effective Time. Subject to applicable laws relating to
the exchange of information, VoiceStream and Omnipoint shall have the right to
review in advance, and to the extent practicable to consult with each other on,
all the information relating to any member of the Omnipoint Group or any
Omnipoint Investment or any member of the VoiceStream Group or VoiceStream
Investment, as applicable, that appears in any filing made with, or written
materials submitted to, any third party and/or any Governmental Bodies in
connection with the Transactions.
(b) As promptly as practicable after the execution and delivery of
this Agreement, VoiceStream and Omnipoint shall prepare all appropriate
applications for FCC approval, and such other documents as may be required, with
respect to the transfer of control of Omnipoint and VoiceStream to Holding
Company (collectively, the "FCC Applications"). Not later than the tenth
business day following execution and delivery of this Agreement, Omnipoint and
VoiceStream will exchange with each other their respective completed portions of
the FCC Applications. Not later than the fifteenth Business Day following the
execution and delivery of this Agreement, Omnipoint and VoiceStream shall file,
or cause to be filed, the FCC Applications. If the Effective Time shall not
have occurred for any reason within any applicable initial consummation period,
and neither Omnipoint nor VoiceStream shall have terminated this Agreement
pursuant to Section 10.1, VoiceStream and Omnipoint shall jointly request one or
more extensions of the consummation period of such grant. No party hereto shall
knowingly take, or fail to take, any action if the intent or reasonably
anticipated consequence of such action or failure to act is, or would be, to
cause the FCC not to grant approval of the FCC Applications or delay either such
approval or the consummation of the transfer of control of Omnipoint.
VoiceStream and Omnipoint shall each pay one-half ( 1/2) of any FCC fees, if
applicable, in connection with the filing or granting of approval of the FCC
Applications. Each of VoiceStream and Omnipoint shall bear its own expenses in
connection with the preparation and prosecution of the FCC Applications.
VoiceStream and Omnipoint shall each use all reasonable efforts to prosecute the
FCC Applications in good faith and with due diligence before the FCC
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and in connection therewith shall take such action or actions as may be
necessary or reasonably required in connection with the FCC Applications,
including furnishing to the FCC any documents, materials or other information
requested by the FCC in order to obtain such FCC approval as expeditiously as
practicable.
(c) Promptly after the date hereof, VoiceStream and Omnipoint (as may
be required pursuant to the HSR Act) will complete all documents required to be
filed with the Federal Trade Commission and the Department of Justice in order
to comply with the HSR Act and, not later than 10 Business Days after the date
hereof, together with the Persons who are required to join in such filings,
shall file the same with the appropriate Governmental Bodies. VoiceStream and
Omnipoint shall each pay one-half ( 1/2) of any fees that may be payable in
connection with the filing pursuant to the HSR Act. VoiceStream, and Omnipoint
shall promptly furnish all materials thereafter required by any of the
Governmental Bodies having jurisdiction over such filings, and shall take all
reasonable actions and shall file and use all reasonable efforts to have
declared effective or approved all documents and notifications with any such
Governmental Bodies, as may be required under the HSR Act or other federal
antitrust laws for the consummation of the Transactions and any other
transactions contemplated hereby.
(d) In addition to the filings required by the HSR Act and the
Communications Act, the Parties shall (i) as promptly as possible and in any
event within 15 days after the date hereof file with any other applicable
Governmental Bodies (including, but not limited to the FAA) the applications and
related documents required to be filed by such Governmental Bodies (and
prosecute diligently any such applications, including providing such information
as such Governmental Bodies may reasonably request) in order to consummate the
Transactions, (ii) cooperate with each other as may reasonably be requested in
connection with the foregoing, and (iii) otherwise use their best efforts to
obtain promptly the requested consent and approval of the applications by any
applicable Governmental Bodies. VoiceStream and Omnipoint shall each pay one
half ( 1/2) of all filing or other Governmental Body filing or grant fees in
connection with the applications requesting its consent to the consummation of
the Transactions.
SECTION 8.2 Registration Statement and Proxy Statement. VoiceStream and
------------------------------------------
Omnipoint shall cooperate and promptly prepare and file with the SEC as soon as
practicable a Registration Statement on Form S-4 (the "Form S-4") under the1933
Act, with respect to the Holding Company Common Stock issuable in the Mergers, a
portion of which Registration Statement shall also serve as the joint proxy
statement with respect to the meetings of stockholders of Omnipoint and of
VoiceStream in connection with the Transactions (the "Proxy
Statement/Prospectus"). The respective parties shall cause the Proxy
Statement/Prospectus and the Form S-4 to comply as to form in all material
respects with the applicable provisions of the 1933 Act, the 1934 Act and the
rules and regulations thereunder. VoiceStream shall use all reasonable efforts,
and Omnipoint shall cooperate with VoiceStream, to have the Form S-4 declared
effective by the SEC as promptly as practicable and to keep the Form S-4
effective as long as is necessary to consummate the Transactions. VoiceStream
shall, as promptly as
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practicable, provide copies of any written comments received from the SEC with
respect to the Form S-4 to Omnipoint and advise Omnipoint of any verbal comments
with respect to the Form S-4 received from the SEC. VoiceStream shall use its
best efforts to obtain, prior to the effective date of the Form S-4, all
necessary state securities laws or "Blue Sky" permits or approvals required to
carry out the Transactions and shall pay all expenses incident thereto.
VoiceStream agrees that the Proxy Statement/Prospectus and each amendment or
supplement thereto at the time of mailing thereof and at the time of the
respective meetings of stockholders of Omnipoint and VoiceStream, or, in the
case of the Form S-4 and each amendment or supplement thereto, at the time it is
filed or becomes effective, shall not include an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading; provided, however, that the foregoing shall not apply
to the extent that any such untrue statement of a material fact or omission to
state a material fact was made by VoiceStream in reliance upon and in conformity
with written information concerning Omnipoint furnished to VoiceStream by
Omnipoint specifically for use in the Proxy Statement/Prospectus. Omnipoint
agrees that the written information concerning Omnipoint provided by it for
inclusion in the Proxy Statement/Prospectus and each amendment or supplement
thereto, at the time of mailing thereof and at the time of the respective
meetings of stockholders of Omnipoint and VoiceStream, or, in the case of
written information concerning Omnipoint provided by Omnipoint for inclusion in
the Form S-4 or any amendment or supplement thereto, at the time it is filed or
becomes effective, shall not include an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading. No amendment or supplement to the Proxy
Statement/Prospectus shall be made by VoiceStream or Omnipoint without the
approval of the other party. VoiceStream shall advise Omnipoint, promptly after
it receives notice thereof, of the time when the Form S-4 has become effective
or any supplement or amendment has been filed, the issuance of any stop order,
the suspension of the qualification of VoiceStream Common Stock issuable in
connection with the Transactions for offering or sale in any jurisdiction, or
any request by the SEC for amendment of the Proxy Statement/Prospectus or the
Form S-4 or comments thereon and responses thereto or requests by the SEC for
additional information.
SECTION 8.3 Public Announcements. So long as this Agreement is in
--------------------
effect, Omnipoint and VoiceStream will consult with each other before issuing
any press release or making any public statement with respect to the
Transactions and except as may be required by applicable law or any listing
agreement with any national securities exchange, will not issue any such press
release or make any such public statement without the prior consent of the other
party, which consent shall not be unreasonably withheld or delayed.
Notwithstanding the foregoing, any such press release or public statement as may
be required by applicable law or any listing agreement with any national
securities exchange or NASDAQ may be issued without such consent, if the party
making such release or statement has used its reasonable efforts to consult with
the other party.
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SECTION 8.4 Further Assurances. At and after the Effective Time, the
------------------
officers and directors of Holding Company will be authorized to execute and
deliver, in the name and on behalf of Omnipoint or VoiceStream, any deeds, bills
of sale, assignments or assurances and to take and do, in the name and on behalf
of Omnipoint or VoiceStream, any other actions and things to vest, perfect or
confirm of record in Holding Company any and all right, title and interest in,
to and under any of the rights, properties or assets of Omnipoint or VoiceStream
acquired or to be acquired by Holding Company as a result of, or in
connection with, the Transactions.
SECTION 8.5 Notices of Certain Events. Each of Omnipoint and
-------------------------
VoiceStream shall promptly notify the other of:
(a) any notice or other communication from any Person alleging that
the consent of such Person is or may be required in connection with the
Transactions;
(b) any notice or other communication from any Governmental Body in
connection with the Transactions;
(c) the occurrence, or non-occurrence, of any event the occurrence, or
non-occurrence, of which would be reasonably expected to cause any
representation or warranty made by it and contained herein to be untrue or
inaccurate in any material respect at any time during the period commencing on
the date hereof and ending at the Effective Time; provided, however, that the
delivery of any notice pursuant to this Section 8.5 shall not limit or otherwise
affect the remedies available hereunder to the party receiving such notice;
(d) any failure of such party to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it hereunder;
provided, however, that the delivery of any notice pursuant to this Section 8.5
shall not limit or otherwise affect the remedies available hereunder to the
party receiving such notice;
(e) any actions, suits, claims, investigations or proceedings
commenced or, to its knowledge threatened against such party which, if pending
on the date of this Agreement, would have been required to have been disclosed
pursuant to Section 4.13, in the case of Omnipoint, or Section 5.13, in the case
of VoiceStream, or which relate to the consummation of the Transactions; and
(f) any event, condition or state of facts which could have a Material
Adverse Effect on such party.
SECTION 8.6 Tax-free Treatment. Prior to the Effective Time, each party
------------------
shall use its best efforts to cause (i) the VoiceStream Merger to qualify as a
reorganization described in Section 368(a) of the Code and/or as an exchange
described in Section 351 of the Code and (ii) the Omnipoint Merger, taken
together with the VoiceStream Merger and the Hutchison Transaction, to qualify
as an exchange described in Section 351 of the Code, to obtain the opinions of
counsel referred to in Sections 9.2(b), 9.2(c) and 9.3(b), including the
execution of
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the letters of representation referred to therein, and will not take any action
reasonably likely to cause the Mergers not to so qualify.
SECTION 8.7 Affiliates. Within 30 days following the date of this
----------
Agreement, Omnipoint shall deliver to VoiceStream a letter identifying all known
Persons who may be deemed "affiliates" of Omnipoint under Rule 145 of the 1933
Act (a "Omnipoint Rule 145 Affiliate"). Omnipoint shall use its best efforts to
obtain a written agreement from each Omnipoint Rule 145 Affiliate as soon as
practicable and, in any event, at least 30 days prior to the Effective Time,
substantially in the form of Exhibit B hereto. Holding Company shall be
entitled to place legends as specified in such Omnipoint Rule 145 Affiliate
letters on the certificates evidencing any Holding Company Common Stock to be
received by such Affiliates pursuant to the terms of this Agreement, and to
issue appropriate stop transfer instructions to the transfer agent for the
Holding Company Common Stock, consistent with the terms of such Affiliate
letters.
SECTION 8.8 Stockholders' Meeting.
---------------------
(a) Each of Omnipoint and VoiceStream shall cause a meeting of its
respective stockholders (the "Omnipoint Stockholders' Meeting" and the
"VoiceStream Stockholders' Meeting" respectively) to be duly called and held as
soon as reasonably practicable for the purpose of voting on the approval and
adoption of (i) in the case of VoiceStream, this Agreement, the VoiceStream
Merger Agreement and the VoiceStream Merger and (ii) in the case of Omnipoint,
this Agreement, the Omnipoint Merger Agreement and the Omnipoint Merger. In
connection with each party's respective meeting, each party will, (i) subject to
Section 8.8(b), use its reasonable best efforts to obtain such approvals from
its respective stockholders and (ii) otherwise comply with all legal
requirements applicable to such meeting.
(b) Except as provided below, the Board of Directors of each party
shall unanimously recommend approval and adoption of this Agreement and the
Transactions by its respective stockholders and VoiceStream and Omnipoint shall
each take all lawful action to solicit such approval, including timely mailing
of the Proxy Statement/Prospectus. Omnipoint shall be permitted to withdraw, or
modify in a manner adverse to VoiceStream, its recommendation to its
stockholders, but only if (i) the Board of Directors of Omnipoint determines in
good faith by majority vote, on the basis of the advice of Omnipoint's outside
counsel that it must take such action in order for the Board of Directors to
comply with its fiduciary duties under applicable Delaware Law, (ii) Omnipoint
shall have delivered to VoiceStream three business days' prior written notice
advising VoiceStream that it intends to take such action and Omnipoint's Board
of Directors has considered any proposed changes to this Agreement (if any)
proposed by VoiceStream and (iii) Omnipoint has fully and completely complied
with Sections 6.2 and 8.5. Unless this Agreement is previously terminated in
accordance with Article 10, each party shall submit this Agreement to its
stockholders at the meeting required to be called and held pursuant to Section
8.8(a), even if such party's Board of Directors determines at any time after the
date hereof that it is no longer advisable or recommends that its stockholders
reject it.
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SECTION 8.9 Conduct of Business by Holding Company and the Merger
-----------------------------------------------------
Subsidiaries Pending the Mergers. Prior to the Effective Time, the parties
- --------------------------------
shall cause Holding Company and the Merger Subsidiaries to (a) perform their
respective obligations under this Agreement and the Merger Agreements in
accordance with the terms hereof and thereof and take all other actions
necessary or appropriate for the consummation of the Transactions, (b) not incur
directly or indirectly any liabilities or obligations except those incurred in
connection with the consummation of this Agreement, the Merger Agreements and
the Transactions (c) not engage directly or indirectly in any business or
activities of any type or kind whatsoever and not enter into any agreements or
arrangements with any person or entity, or be subject to or be bound by any
obligation or undertaking which is not contemplated by this Agreement or the
Merger Agreements and (d) not create, grant or suffer to exist any Lien upon
their respective properties or assets which would attach to any properties or
assets of VoiceStream or Omnipoint after the Effective Time.
ARTICLE 9
CONDITIONS TO THE MERGER
SECTION 9.1 Conditions to the Obligations of Each Party. The
-------------------------------------------
obligations of Omnipoint, Holding Company and VoiceStream to consummate the
Transactions are subject to the satisfaction of the following conditions:
(a) the Omnipoint Stockholders' Approval shall have been obtained;
(b) any applicable waiting period under the HSR Act relating to the
Transactions shall have expired or been terminated;
(c) no provision of any applicable law or regulation and no judgment,
injunction, order or decree shall prohibit the consummation of the Transactions;
(d) the shares of Holding Company Common Stock to be issued in the
Transactions shall have been approved for listing on the NASDAQ, subject to
official notice of issuance;
(e) all Governmental Consents shall have been obtained and be in
effect, and be subject to no limitations, conditions, restrictions or
obligations, except for such consents the failure to obtain would not, and such
limitations, conditions, restrictions or obligation as would not, individually
or in the aggregate, be reasonably expected to have a Omnipoint Material Adverse
Effect or VoiceStream Material Adverse Effect;
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(f) no court, arbitrator or Governmental Body shall have issued any
order, and there shall not be any statute, rule or regulation restraining or
prohibiting the effective operation of the business of VoiceStream and the
VoiceStream Subsidiaries or Omnipoint and the Omnipoint Subsidiaries after the
Effective Time that would be reasonably expected to have a VoiceStream Material
Adverse Effect or Omnipoint Material Adverse Effect (after giving effect to the
Transactions);
(g) the CIRI Transactions shall have been consummated prior to the
Effective Time;
(h) the VoiceStream Stockholders' Approval shall have been obtained;
(i) the Form S-4 shall have become effective and shall be effective at
the Effective Time, and no stop order suspending effectiveness of the Form S-4
shall have been issued, no action, suit, proceeding or investigation by the SEC
to suspend the effectiveness thereof shall have been initiated and be
continuing, or, to the knowledge of VoiceStream or Omnipoint, threatened, and
all necessary approvals under state securities laws relating to the issuance or
trading of Holding Company Common Stock to be issued to Omnipoint stockholders
in connection with the Transactions shall have been received;
(j) the Hutchison Transaction shall be consummated on, or prior to,
the Effective Time; and
(k) the FCC Consent shall have become a Final Order and shall not
contain any conditions with respect to Omnipoint or VoiceStream, which
conditions would have a VoiceStream Material Adverse Effect or Omnipoint
Material Adverse Effect.
SECTION 9.2 Conditions to the Obligations of VoiceStream. The
--------------------------------------------
obligations of VoiceStream to consummate the Transactions are subject to the
satisfaction of the following further conditions:
(a) (i) Omnipoint shall have performed in all material respects all
of its obligations hereunder required to be performed by it at or prior to the
Effective Time, (ii) the representations and warranties of Omnipoint contained
in this Agreement and in any certificate or other writing delivered by Omnipoint
pursuant hereto, disregarding all qualifications and exceptions contained
therein relating to materiality or a Omnipoint Material Adverse Effect or any
similar standard or qualification, shall be true and correct at and as of the
Effective Time, as if made at and as of such time (other than representations or
warranties that address matters only as of a certain date which shall be true
and correct as of such date), with only such exceptions as, individually or in
the aggregate, have not had and would not be reasonably expected to have a
Omnipoint Material Adverse Effect, and (iii) VoiceStream shall have received a
certificate signed by an executive officer of Omnipoint to the foregoing effect;
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(b) VoiceStream shall have received an opinion of Jones Day, in form
and substance reasonably satisfactory to VoiceStream on the basis of certain
facts, representations and assumptions set forth in the opinion, dated the
Closing Date, to the effect that (i) the VoiceStream Merger will be treated for
federal income tax purposes as a reorganization described in Section 368(a) of
the Code, and (ii) each of VoiceStream, Holding Company and, in the case of a
reorganization described in Section 368(a)(2)(E) of the Code, Merger Sub A, will
be a party to the reorganization within the meaning of Section 368(b) of the
Code; or to the effect that the VoiceStream Merger will be treated as a transfer
of property by the VoiceStream stockholders, other than holders of Dissenting
Shares, to Holding Company described in Section 351(a) of the Code. In
rendering such opinion, such counsel shall be entitled to rely upon certain
documentation including representations of officers of VoiceStream and Holding
Company in substantially the same form as Exhibits C and D;
(c) VoiceStream shall have received an opinion of Jones Day, in form
and substance reasonably satisfactory to VoiceStream on the basis of certain
facts, representations and assumptions set forth in the opinion, dated the
Closing Date, to the effect that the Transactions should not cause the spinoff
of VoiceStream on May 3, 1999 (the "Spinoff") to fail to be a transaction
described in Section 355(a) of the Code with respect to the shareholders of
Western. In rendering such opinion, such counsel shall be entitled to rely
upon certain documentation, including representations of officers of
VoiceStream;
(d) no Default Event shall occur, or shall reasonably be expected to
occur, as a result of the consummation of the Transactions;
(e) VoiceStream shall have received an opinion of regulatory counsel
of Omnipoint, dated the Effective Time, containing the items listed on Exhibit
E;
(f) VoiceStream shall have received an opinion of corporate counsel to
Omnipoint in form and substance reasonably acceptable to VoiceStream;
(g) no more than 10% of the shares of Omnipoint Common Stock
outstanding immediately prior to the Effective Time shall be Dissenting Shares;
and
(h) no more than 10% of the shares of VoiceStream Common Stock
outstanding immediately prior to the Effective Time shall be Dissenting Shares.
SECTION 9.3 Conditions to the Obligations of Omnipoint. The obligations
------------------------------------------
of Omnipoint to consummate the Transactions are subject to the satisfaction of
the following further conditions:
(a) VoiceStream shall have performed in all material respects all of
its obligations hereunder required to be performed by it at or prior to the
Effective Time;
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(b) Omnipoint shall have received the opinion of Piper Marbury, based
upon reasonable requested representation letters and dated the Closing Date, to
the effect that (i) the Omnipoint Merger will be treated as a transfer of
property to Holding Company by the holders of Omnipoint Common Stock described
in Section 351(a) or Section 351(b) of the Code and (ii) no gain or loss will be
recognized for federal income tax purposes by Omnipoint in connection with the
Transactions. In rendering such opinion, such counsel shall be entitled to rely
upon certain documentation including representations of officers of Omnipoint,
VoiceStream and Holding Company and of 5% or greater shareholders of Omnipoint
and VoiceStream, in substantially the same form as Exhibits F-1 through F-5.
(c) the representations and warranties of VoiceStream contained in
this Agreement and in any certificate or other writing delivered by VoiceStream
pursuant hereto, disregarding all qualifications and exceptions contained
therein relating to materiality or VoiceStream Material Adverse Effect or any
similar standard or qualification shall be true at and as of the Effective Time
as if made at and as of such time (other than representations and warranties
that address matters only as of a certain date, which shall be true as of such
date), with only such exceptions as, individually or in the aggregate, have not
had and would not be reasonably expected to have a VoiceStream Material Adverse
Effect;
(d) Omnipoint shall have received an opinion of regulatory counsel to
VoiceStream, dated the Effective Time, containing the items listed on Exhibit G;
(e) Omnipoint shall have received a certificate signed by an executive
officer of VoiceStream certifying as to the matters set forth in (a) and (c);
(f) Omnipoint shall have received an opinion of corporate counsel to
VoiceStream in form and substance reasonably acceptable to Omnipoint; and
(g) VoiceStream shall not have agreed to any modification of the
exchange rights agreement with the Cook Entities which would increase the number
of shares of Holding Company Common Stock issuable to the Cook Entities upon
exercise of their exchange rights which they received in the CIRI Transactions.
Notwithstanding anything contained to the contrary in Section 9.3(c)
or anywhere else in this Agreement, VoiceStream may enter into any Subsequent
Transaction, and neither any changes of any representation or warranty of
VoiceStream contained in this Agreement as a result of any Subsequent
Transaction, nor any amendments or exceptions to the VoiceStream Disclosure
Schedule resulting from or related to any Subsequent Transaction, shall result
in a failure of the conditions set forth in Section 9.3(c); provided, in each
case, that any such Subsequent Transaction would not, or would reasonably not be
expected to prevent, impair or materially delay the ability of Omnipoint or
VoiceStream to consummate the Transactions.
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ARTICLE 10
TERMINATION
SECTION 10.1 Termination. This Agreement may be terminated and the
-----------
Transactions may be abandoned at any time prior to the Effective Time
(notwithstanding any approval of this Agreement by the stockholders of Omnipoint
or of VoiceStream):
(a) by mutual written agreement of Omnipoint and VoiceStream;
(b) by either Omnipoint or VoiceStream, if:
(i) the Transactions have not been consummated on or before
March 31, 2000 (the "End Date"); provided that if (A)(x) the Effective Time
has not occurred by March 31, 2000 by reason of the non-satisfaction of any
of the conditions set forth in Sections 9.1(a), 9.1(b), 9.1(c), 9.1(d),
9.1(e), 9.1(f), 9.1(g), 9.1(i), 9.1(j) and 9.1(k) and (y) all other
conditions in Article 9 have theretofore been satisfied or waived or are
then capable of being promptly satisfied then, either party may, upon
written notice to the other party given on or before March 31, 2000, extend
the End Date to June 30, 2000; provided further that the right to terminate
this Agreement pursuant to this Section 10.1(b)(i) shall not be available
to any party whose breach of any provision of this Agreement results in the
failure of the Transactions to be consummated by the End Date; or
(ii) (A) there shall be any law or regulation that makes
consummation of the Transactions illegal or otherwise prohibited or (B) any
judgment, injunction, order or decree of any court or other Governmental
Body having competent jurisdiction enjoining Omnipoint and VoiceStream from
consummating the Transactions is entered and such judgment, injunction,
order or decree shall have become final and non-appealable;
(c) by VoiceStream, if:
(i) the Board of Directors of Omnipoint shall have failed to
recommend or withdrawn, or modified in a manner adverse to VoiceStream, its
approval or recommendation of this Agreement and the Transactions, or shall
have failed to call the Omnipoint Stockholders' Meeting in accordance with
Section 8.8(a) (or the Board of Directors of Omnipoint resolves to do any
of the foregoing);
(ii) Omnipoint shall have willfully and materially breached any
of its obligations under Sections 8.8(b) or 6.2; or
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(iii) Omnipoint Stockholders' Approval shall not have been
obtained at the Omnipoint Stockholders' Meeting (or any adjournment or
postponement thereof);
(iv) a breach of any representation, warranty, covenant or
agreement on the part of Omnipoint set forth in this Agreement shall have
occurred that would cause the condition set forth in Section 9.2(a) not to
be satisfied, and such condition shall be incapable of being satisfied by
the End Date; or
(d) by Omnipoint, if:
(i) the Board of Directors of VoiceStream shall have failed to
recommend or withdrawn, or modified in a manner adverse to VoiceStream, its
approval or recommendation of this Agreement and the Transactions, or shall
have failed to call the VoiceStream Stockholders' Meeting in accordance
with Section 8.8(a) (or the Board of Directors of VoiceStream resolves to
do any of the foregoing);
(ii) VoiceStream shall have willfully and materially breached
any of its obligations under Sections 8.8(b);
(iii) VoiceStream Stockholders' Approval shall not have been
obtained at the VoiceStream Stockholders' Meeting (or any adjournment or
postponement thereof); or
(iv) a breach of any representation, warranty, covenant or
agreement on the part of VoiceStream set forth in this Agreement shall have
occurred that would cause the condition set forth in Section 9.3(a) and (c)
not to be satisfied, and such condition shall be incapable of being
satisfied by the End Date.
The party desiring to terminate this Agreement pursuant to this
Section 10.1 (other than pursuant to Section 10.1(a)) shall give notice of such
termination to the other party.
SECTION 10.2 Effect of Termination. If this Agreement is terminated
---------------------
pursuant to Section 10.1, this Agreement shall become void and of no effect
without liability, except as set forth in Section 10.3, of any party (or any
stockholder, director, officer, employee, agent, consultant or representative of
such party) to the other parties hereto, except that the agreements contained in
this Section 10.2 and in the Confidentiality Agreement shall survive the
termination hereof and (b) no such termination shall relieve any party of any
liability or damages resulting from any breach by such party of this Agreement.
SECTION 10.3 Fees and Expenses.
-----------------
(a) Except as otherwise provided in this Section 10.3 or Section
8.1(c), all costs and expenses incurred in connection with this Agreement shall
be paid by the party
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incurring such cost or expense whether or not the Transactions are consummated;
provided that Omnipoint and VoiceStream shall share equally all fees and
expenses, other than attorneys' and accounting fees and expenses, incurred in
relation to the printing and filing of the Proxy Statement/Prospectus and except
as set forth on Section 8.1(c).
(b) If this Agreement is terminated pursuant to Section 10.1(c)(i) or
Section 10.1(c)(ii), Omnipoint shall pay to VoiceStream a termination fee of
$70,000,000 in cash (the "Termination Fee").
(c) If (A) this Agreement is terminated pursuant to Section
10.1(c)(iii), (B) after the date hereof and prior to the Omnipoint Stockholders'
Meeting, an Acquisition Proposal is made or continued or renewed by any Person
and not withdrawn prior to such meeting and (C) within one year of the Omnipoint
Stockholders' Meeting, either (1) Omnipoint or any Omnipoint Subsidiary enters
into an agreement with such Person with respect to an Acquisition Proposal which
provides for (x) transfer or issuance of securities representing more than 50%
of the equity or voting interests in Omnipoint, (y) a merger, consolidation,
recapitalization or another transaction resulting in the issuance of cash or
securities of such Person (other than a reincorporation or a holding company
merger that results in the Omnipoint stockholders owning all of the equity
interests in the surviving corporation) to Omnipoint stockholders in exchange
for more than 50% of the equity or voting interests in Omnipoint, or (z)
transfer of assets, securities or ownership interests representing more than 50%
of the consolidated assets or earning power of the Omnipoint Group, or (2) any
Person or Group commences a tender offer that results in the acquisition by the
Person making the tender offer of a majority of the Omnipoint Common Stock, then
Omnipoint shall pay to VoiceStream the Termination Fee.
(d) Any payment of the Termination Fee pursuant to this Section 10.3
shall be made within one Business Day after termination of this Agreement except
that any payment of the Termination Fee pursuant to Section 10.3(c) shall be
paid within one Business Day after it becomes payable. Any payment of the
Termination Fee shall be made by wire transfer of immediately available funds.
If one party fails to pay to the other promptly any fee or expense due hereunder
(including the Termination Fee), the defaulting party shall pay the costs and
expenses (including legal fees and expenses) in connection with any action,
including the prosecution of any lawsuit or other legal action, taken to collect
payment, together with interest on the amount of any unpaid fee at the publicly
announced prime rate of The Bank of New York in New York City from the date such
fee was required to be paid to the date it is paid.
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ARTICLE 11
MISCELLANEOUS
SECTION 11.1 Notices. All notices, requests and other communications to
-------
any party hereunder shall be in writing (including facsimile transmission) and
shall be given,
if to VoiceStream or Holding Company, to:
3650 131 Avenue SE
Bellevue, Washington 98006
Attention: Alan R. Bender, Esq.
Fax: (425) 586-8080
with a copy to:
Friedman Kaplan & Seiler llp
875 Third Avenue
New York, New York 10022
Attention: Barry A. Adelman, Esq.
Fax: (212) 355-6401
if to Omnipoint, to:
Omnipoint Corporation
Three Bethesda Metro Center
Suite 400
Bethesda, Maryland 20814
Attention: Doug G. Smith
Fax: (301) 951-3591
with copies to:
Piper & Marbury L.L.P.
1200 Nineteenth Street, N.W.
Washington, D.C. 20036
Attention: Edwin M. Martin, Jr., Esq.
Fax: (202) 233-2085
or such other address or facsimile number as such party may hereafter specify
for the purpose by notice to the other parties hereto. All such notices,
requests and other communications shall be deemed received on the date of
receipt by the recipient thereof if received prior to 5 p.m. on a Business Day,
in the place of receipt. Otherwise, any such notice, request or communication
shall
74
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be deemed not to have been received until the next succeeding Business Day in
the place of receipt.
SECTION 11.2 Reliance on Representations. Notwithstanding any
---------------------------
investigation knowledge or review made at any time by or on behalf of any party
hereto, the parties acknowledge and agree that all representations and
warranties contained in this Agreement, or in the Exhibits or in any of the
documents, certification or agreements delivered in connection therewith are
being relied upon as a material inducement to enter into this Agreement and the
Transactions.
SECTION 11.3 Survival of Representations and Warranties. The
------------------------------------------
representations and warranties contained herein and in any certificate or other
writing delivered pursuant hereto shall not survive the Effective Time or,
except as provided under Section 10.2 of this Agreement, the termination of this
Agreement.
SECTION 11.4 Amendments; No Waivers.
----------------------
(a) Subject to applicable law, any provision of this Agreement may be
amended or waived prior to the Effective Time if, but only if, such amendment or
waiver is in writing and is signed, in the case of an amendment, by each party
to this Agreement or, in the case of a waiver, by each party against whom the
waiver is to be effective; provided that, after the adoption of this Agreement
by the stockholders of Omnipoint, no such amendment or waiver shall be made or
given that requires the approval of the stockholders of Omnipoint unless the
required approval is obtained.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 11.5 Successors and Assigns. The provisions of this Agreement
----------------------
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the consent of each other party hereto.
SECTION 11.6 Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of Delaware, without regard
to the conflicts of law rules of such state.
SECTION 11.7 Jurisdiction. Any suit, action or proceeding seeking to
------------
enforce any provision of, or based on any matter arising out of or in connection
with, this Agreement or the Transactions shall be brought in any federal court
located in the State of Delaware or any
75
<PAGE>
Delaware state court, and each of the parties hereby consents to the exclusive
jurisdiction of such courts (and of the appropriate appellate courts therefrom)
in any such suit, action or proceeding and irrevocably waives, to the fullest
extent permitted by law, any objection that it may now or hereafter have to the
laying of the venue of any such suit, action or proceeding in any such court or
that any such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum. Process in any such suit, action or proceeding
may be served on any party anywhere in the world, whether within or without the
jurisdiction of any such court. Without limiting the foregoing, each party
agrees that service of process on such party as provided in Section 11.1 shall
be deemed effective service of process on such party.
SECTION 11.8 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
--------------------
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS.
SECTION 11.9 Counterparts; Effectiveness. This Agreement may be signed
---------------------------
in any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective when each party hereto shall have received
counterparts hereof signed by all of the other parties hereto. No provision of
this Agreement is intended to confer any rights, benefits, remedies, obligations
or liabilities hereunder upon any Person other than the parties hereto and their
respective successors and assigns.
SECTION 11.10 Entire Agreement; No Third Party Beneficiaries. This
----------------------------------------------
Agreement, together with the Confidentiality Agreement, constitutes the entire
agreement between the parties with respect to the subject matter of this
Agreement and supersedes all prior agreements and understandings, both oral and
written, between the parties with respect to the subject matter of this
Agreement. Except as set forth in Sections 7.2 and 7.4 above, this Agreement is
not intended to confer upon any Person other than the parties hereto any rights
or remedies.
SECTION 11.11 Captions. The captions herein are included for convenience
--------
of reference only and shall be ignored in the construction or interpretation
hereof.
SECTION 11.12 Severability. If any term, provision, covenant or
------------
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated
so long as the economic or legal substance of the Transactions is not affected
in any manner materially adverse to any party. Upon such a determination, the
parties shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in an acceptable
manner so that the Transactions be consummated as originally contemplated to the
fullest extent possible.
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SECTION 11.13 Specific Performance. The parties hereto agree that
--------------------
irreparable damage would occur if any provision of this Agreement were not
performed in accordance with the terms hereof and that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
or to enforce specifically the performance of the terms and provisions hereof in
any federal court located in the State of Delaware or any Delaware state court,
in addition to any other remedy to which they are entitled at law or in equity.
SECTION 11.14 Schedules. Each of Omnipoint and VoiceStream has set forth
---------
information in its respective Disclosure Schedule in a section thereof that
corresponds to the section of this Agreement to which it relates. A matter set
forth in one section of the Disclosure Schedules must be set forth in any other
relevant section of the Disclosure Schedule irrespective of its relevance to the
latter section of the Disclosure Schedule or section of the Agreement being
apparent on the face of the information disclosed in the Disclosure Schedule.
The fact that any item of information is disclosed in a Disclosure Schedule to
this Agreement shall not be construed to mean that such information is required
to be disclosed by this Agreement. Such information and the dollar thresholds
set forth herein shall not be used as a basis for interpreting the terms
"material" or "Material Adverse Effect" or other similar terms in this Agreement
except as otherwise expressly set forth in such Disclosure Schedules.
77
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
VOICESTREAM WIRELESS CORPORATION
By: /s/ John W. Stanton
----------------------------------------
Name: John W. Stanton
Title: Chairman
OMNIPOINT CORPORATION
By: /s/ Douglas G. Smith
----------------------------------------
Name: Douglas G. Smith
Title: Chairman, President & CEO
VOICESTREAM WIRELESS HOLDING
CORPORATION
By: /s/ Donald Guthrie
----------------------------------------
Name: Donald Guthrie
Title: Vice Chairman
<PAGE>
Exhibit 4.1
OMNIPOINT CORPORATION
CERTIFICATE OF DESIGNATION
establishing the
Designations, Powers, Preferences, Limitations,
Restrictions, and Relative Rights of
SERIES A NON-VOTING CONVERTIBLE PREFERRED STOCK
___________________________________________
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
____________________________________________
OMNIPOINT CORPORATION, a Delaware corporation (the "Issuer"), does
hereby certify that pursuant to authority conferred upon the Board of Directors
of the Issuer by its Amended and Restated Certificate of Incorporation and
pursuant to the provisions of Section 151 of the General Corporation Law of the
State of Delaware, the following resolution establishing the Issuer's Series A
Non-Voting Convertible Preferred Stock was duly adopted by the Board of
Directors, on June 21, 1999, and such resolution remains in full force and
effect. Certain capitalized terms used herein are defined in Article 8.
RESOLVED, that pursuant to the authority expressly granted to and
vested in the Board of Directors of the Corporation by the provisions
of Section Fourth (B) of the Amended and Restated Certificate of
Incorporation, as amended from time to time (the "Certificate of
Incorporation"), and pursuant to Section 151(g) of the General
Corporation Laws of the State of Delaware, there be established from
the 10,000,000 shares of Preferred Stock, $0.01 par value, of the
Corporation, authorized to be issued pursuant to the Certificate of
Incorporation, a series of Preferred Stock, consisting of 12,500
shares of Series A Non-Voting Convertible Preferred Stock, having the
designations, powers, preferences and relative and other special
rights and the qualifications, limitations and restrictions as
follows:
1. Designation and Number of Shares. The series will be known as the
"Series A Non-Voting Convertible Preferred Stock" (the "Preferred Stock"), and
will be a series consisting of 12,500 shares of the authorized but unissued
preferred stock of the Issuer.
2. Dividends. Each share of the Preferred Stock will be deemed to be, and
treated for all purposes relating to the declaration and payment of dividends
as, the number of shares of Common Stock into which each share of the Preferred
Stock is then convertible at the then current Conversion Price.
<PAGE>
3. Ranking. (a) Outstanding shares of the Preferred Stock will, with
respect to distributions upon the liquidation, winding up or dissolution of the
Issuer, rank on parity with the outstanding shares of the Issuer's 7% Cumulative
Convertible Preferred Stock, $0.01 par value per share.
(b) Except as otherwise expressly provided herein, the Issuer may
amend the Certificate of Incorporation to authorize or establish one or more
additional classes or series of preferred stock or other Capital Stock,
authorize, approve and file certificates of designation relating thereto, and
issue without restriction from time to time, any classes or series thereof.
4. Conversion.
4.1 (a) All or any portion of the outstanding shares of the
Preferred Stock may be convertible at any time into Common Stock at the option
of the holder thereof into a number of shares of Common Stock equal to the
aggregate Liquidation Preference of the shares of Preferred Stock being
converted divided by the Conversion Price (subject to paragraph 4.1(b) hereof),
provided that at the time of such conversion any applicable waiting period under
the HSR Act applicable thereto shall have expired or been terminated.
(b) In the event of an Issuer Breach, the aggregate Liquidation
Preference of the Preferred Stock that may, in accordance with the regulations
and rulings, if any, of the Federal Communications Commission, be converted into
Common Stock at a price per share equal to the then current Reduced Conversion
Price will be so converted. The aggregate Liquidation Preference of the shares
of Preferred Stock that remain outstanding after such conversion at the Reduced
Conversion Price will be exchanged for one or more notes (with an aggregate
initial principal amount equal to the amount of such remaining balance)
representing unsecured debt of the Issuer (the "Conversion Notes"). The terms
and provisions of the Conversion Notes shall be set forth in the Securities
Purchase Agreement.
(c) The following provisions and procedures will apply to and govern
the conversion process set forth in Section 4.1(a) or Section 4.1(b):
(i) Immediately prior to the close of business on the
Conversion Date, each Holder of Preferred Stock will be deemed to be the Holder
of record of Common Stock issuable upon conversion of such Holder's Preferred
Stock notwithstanding that the share register of the Issuer may then be closed
or that certificates representing such Common Stock will not then be actually
delivered to or as directed by such Person;
(ii) As a pre-condition to delivery by the Transfer Agent of
certificates representing the shares of Common Stock and/or Conversion Notes, as
appropriate, properly issuable to each such Holder in connection therewith, each
Holder of Preferred Stock must promptly surrender to the Issuer or the Transfer
Agent certificates representing the shares of Preferred Stock so converted (if
not previously delivered), duly endorsed in blank or accompanied by proper
instruments of transfer;
-2-
<PAGE>
(iii) Issuance or delivery of certificates for Common Stock
and/or Conversion Notes, as appropriate, upon the conversion of shares of the
Preferred Stock will be made without charge to the Holders of shares of the
Preferred Stock for such certificates and/or Conversion Notes, or for any tax in
respect of the issuance or delivery of such certificates and/or Conversion Notes
or the securities represented thereby, and such certificates will be issued or
delivered in the respective names of, or in such names as may be directed in
writing by, the Holders of the shares of Preferred Stock. Notwithstanding
anything in the preceding sentence to the contrary, the Issuer will not be
required to pay any tax that may be payable in respect of any transfer involved
in the issuance and delivery of any such certificate or note in a name other
than that of the registered Holder of the shares of Preferred Stock, and the
Issuer will not be required to issue or deliver any such certificate and/or
Conversion Note unless or until the Person or Persons requesting the issuance or
delivery thereof have paid to the Issuer the amount of such tax or have
established to the reasonable satisfaction of the Issuer that such tax has been
paid; and
(iv) If the Conversion Date is not a Business Day, then such
conversion right will be deemed exercised on the next Business Day.
(v) On the Conversion Date, all rights with respect to the
outstanding shares of Preferred Stock, including the rights, if any, to receive
notices, will terminate, except the rights of Holders thereof (or their
respective designees or assignees) to:
(1) receive certificates for the number of shares of
Common Stock and/or Conversion Notes, as appropriate, into which such shares of
Preferred Stock have been converted following compliance by each Holder with the
provisions of Section 4.1(c)(ii); and
(2) exercise the rights to which they are entitled as
Holders of Common Stock and/or Conversion Notes, as appropriate.
4.2 The Conversion Price and the Reduced Conversion Price will be
subject to adjustment as follows:
(a) If the Issuer at any time subdivides or combines the
outstanding shares of Common Stock, or makes a dividend or other distribution on
the Common Stock in shares of Common Stock, the Conversion Price and the Reduced
Conversion Price will be proportionately decreased in the event of a share
subdivision, dividend or other distribution, or proportionately increased in the
event of a share combination.
(b) Whenever the Conversion Price and the Reduced Conversion
Price are adjusted as herein provided, the Issuer will cause a copy of a notice
to be sent by first-class mail, postage prepaid, to each registered Holder of
the Preferred Stock showing in reasonable detail the facts requiring such
adjustment and identifying the then current Conversion Price and Reduced
Conversion Price after giving effect to such adjustment.
(c) Irrespective of any adjustments to the Conversion Price
and the Reduced Conversion Price or the number or kind of shares purchasable
upon conversion of shares of the Preferred Stock, certificates representing
shares of the Preferred Stock theretofore
-3-
<PAGE>
or thereafter issued may continue to express the same Conversion Price or
Reduced Conversion Price and number and kind of shares previously stated in the
certificates for shares of the Preferred Stock.
(d) The Issuer may, at its election, retain a firm of
independent public accountants of recognized standing, which may be the firm
regularly retained by the Issuer, selected by the Board of Directors of the
Issuer or its officers, to make any computation required under this Section 4.2.
A certification by such firm will be conclusive evidence of the accuracy and
correctness of any computation made under this Section 4.2.
4.3 Notwithstanding anything to the contrary contained in this
Certificate of Designation, no Conversion Price or Reduced Conversion Price
adjustment will be made as a result of the issuance of Common Stock on
conversion of the Preferred Stock.
4.4 (a) Any event described in (i) or (ii), below, will be
hereinafter referred to as a "Transaction."
(i) any capital reorganization or reclassification or
other change of outstanding shares of Common Stock (other than a change in par
value, or from par value to no par value, or from no par value to par value), or
(ii) any sale, transfer or other conveyance to another
Person of all or substantially all of the assets of the Issuer computed on a
consolidated basis (other than the sale, transfer, assignment or distribution of
shares of Capital Stock or assets to a Subsidiary and other than pursuant to the
transactions contemplated by the Agreement), then the adjustment described in
Section 4.4 (b) will be made.
(b) Each share of Preferred Stock outstanding at the time of any
Transaction will automatically and without further action by an Person become
convertible only into the kind and amount of shares of stock or other securities
(of the Issuer or another issuer) or property or cash receivable upon such
Transaction by a Holder of the number of shares of Common Stock into which such
share of Preferred Stock could have been converted immediately prior to such
Transaction, after giving effect to any adjustment event.
(c) The provisions of this Section 4.4 contain the sole rights of
Holders of Preferred Stock in connection with any Transaction and such Holders
will have no separate vote thereon.
4.5 The Issuer will at all times reserve and keep available for
issuance upon the conversion of the Preferred Stock, such number of its
authorized but unissued shares of Common Stock as will from time to time be
sufficient to permit the conversion of all outstanding shares of Preferred
Stock, and will take all action required to increase the authorized number of
shares of Common Stock if at any time there are insufficient authorized,
unissued shares of Common Stock to permit such reservation or to permit the
conversion of all outstanding shares of Preferred Stock.
-4-
<PAGE>
5. Liquidation Preference.
5.1 Upon any voluntary or involuntary liquidation, dissolution or
winding up of the Issuer (each, a "Liquidation Event"), Holders of the Preferred
Stock will be entitled to be paid, out of assets of the Issuer available for
distribution the Liquidation Preference per share of the Preferred Stock plus an
amount in cash equal to all unpaid dividends thereon, if any, to the date fixed
for liquidation, dissolution or winding up, before any distribution is made on
the Common Stock or any other Capital Stock ranking below the Preferred Stock in
connection with any Liquidation Event.
5.2 If, upon any voluntary or involuntary liquidation, dissolution
or winding-up of the Issuer, the amounts payable with respect to the Preferred
Stock and all other Parity Securities are not paid in full, the Holders of the
Preferred Stock and the Parity Securities will share equally and ratably in any
distribution of assets of the Issuer in proportion to the full Liquidation
Preference and unpaid dividends, if any, to which each is entitled.
5.3 After payment of the full amount of the Liquidation Preference
and any unpaid dividends to which they are entitled, the Holders of shares of
the Preferred Stock will have no right or claim to any of the remaining assets
of the Issuer.
5.4 Neither the sale, conveyance, exchange or transfer (for cash,
shares of stock, securities or other consideration) of all or substantially all
of the property or business of the Issuer (other than in connection with the
winding up of its business), nor the merger or consolidation of the Issuer with
or into any other corporation, nor a Transaction will be deemed to be a
dissolution, liquidation, or winding up, voluntary or involuntary, of the
Issuer.
6. Voting Rights.
6.1 Holders of the Preferred Stock have no voting rights, except as
provided by law or as expressly set forth in Section 6.2.
6.2 The affirmative vote or consent of the Holders of at least 51% of
the outstanding Preferred Stock will be required for amendments to the
Certificate of Incorporation that would adversely affect the rights of Holders
of the Preferred Stock. In such cases, each share of Preferred Stock will be
entitled to one vote.
6.3 Except as set forth in this Certificate of Designation, the
creation, authorization or issuance of any shares of Parity Securities or any
other Capital Stock ranking below the Preferred Stock in connection with any
Liquidation Event, or an increase or decrease in the amount of authorized
Capital Stock of any class, including any preferred stock, does not and will not
require the consent of the Holders of the Preferred Stock and does not and will
not be deemed to affect adversely the rights, preferences, privileges or voting
rights of Holders of shares of the Preferred Stock.
7. Amendment, Supplement and Waiver. Without the consent of any Holder or
Holders of the Preferred Stock, the Issuer may amend or supplement this
Certificate of Designation to
-5-
<PAGE>
make any change that would provide any additional rights or benefits to the
Holders of the Preferred Stock or that does not adversely affect the legal
rights under this Certificate of Designation of any such Holder.
8. Certain Definitions. Set forth below are certain defined terms used in
this Certificate of Designation.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such person, whether through the
ownership of voting securities, by agreement of or otherwise.
"Agreement" means the Agreement and Plan of Reorganization, dated as
of June 23, 1999, by and among VoiceStream, VoiceStream Wireless Holding
Corporation, a Delaware corporation, and the Issuer, as such Agreement may from
time to time and at any time be amended by the parties thereto.
"Business Day" means any day other than a Legal Holiday.
"Capital Stock" means any and all shares, interests, participations,
rights or other equivalents (however designated) of corporate stock or
partnership or membership interests, whether common or preferred.
"Common Stock" means the Issuer's Common Stock, $0.01 par value per
share.
"Conversion Date" means the date in which a conversion of Preferred
Stock to Common Stock is triggered pursuant to Section 4.1.the Issuer or the
Transfer Agent.
"Conversion Notes" is defined in Section 4.1(a).
"Conversion Price" initially is $24.00 per share, subject to
adjustment from time to time and at any time in accordance with Article 4.
"Holder" means a Person in whose name shares of Capital Stock is
registered.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.
"Issuer" means Omnipoint Corporation, a Delaware corporation.
"Issuer Breach" means a material breach by the Issuer of its
covenants, agreements or obligations under the Agreement, including a breach by
the Issuer of the obligation set forth therein to use its best efforts to
consummate the Target Merger or any
-6-
<PAGE>
representation or warranty of Issuer under the Agreement being untrue in any
material respect when made. Notwithstanding the foregoing, it will not be deemed
a breach of the Issuer's best efforts obligation if the Issuer's Board of
Directors, acting in good faith, exercise its fiduciary duties and,
consequently, the Target Merger is not consummated.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place payment is to be received are
authorized by law, regulation or executive order to remain closed. If a payment
date is Legal Holiday at a place of payment, payment may be made at that place
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue for the intervening period.
"Liquidation Event" is defined in Section 5.1.
"Liquidation Preference" means $24,000 per share of Preferred Stock.
"Parity Security" means any other class or series of Capital Stock of
the Issuer with a ranking for purposes of any Liquidation Event or the payment
of dividends that is on par with that of the Preferred Stock.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock issuer, interest, trust or unincorporated
organization (including any subdivision or ongoing business of any such entity
or substantially all of the assets of any such entity, subdivision or business).
"Preferred Stock" is defined in Article 1.
"Reduced Conversion Price" initially is $18.50 per share, subject to
adjustment from time to time and at any time in accordance with Article 4.
"Securities Purchase Agreement" means the Securities Purchase
Agreement, dated as of June 23, 1999, by and among Issuer, VoiceStream and
Hutchison Communications PCS (USA) Limited, a British Virgin Islands
corporation, as such agreement may from time to time and at any time be amended
by the parties thereto.
"Subsidiary" means, with respect to any person, any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
person or one or more of the other Subsidiaries of such person or a combination
thereof.
"Target Merger" has the meaning set forth in the Agreement.
"Transaction" is defined in Section 4.5.
"Transfer Agent" means Marine Midland Bank or any successor thereto or
substitute therefor appointed pursuant to Article 11.
-7-
<PAGE>
"VoiceStream" means VoiceStream Wireless Corporation, a Washington
corporation.
10. Transfer Agent and Registrar. The initial Transfer Agent and
registrar for the Preferred Stock is Marine Midland Bank. The Issuer may, in its
sole and absolute discretion, remove the Transfer Agent and appoint a successor
transfer agent.
11. Other Provisions.
11.1 With respect to any notice to a Holder of shares of the
Preferred Stock required to be provided hereunder, neither failure to mail such
notice, nor any defect therein or in the mailing thereof, to any particular
Holder will affect the sufficiency of the notice or the validity of the
proceedings referred to in such notice with respect to the other Holders or
affect the legality or validity of any distribution, rights, warrant,
reclassification, consolidation, Target Merger, conveyance, transfer,
dissolution, liquidation or winding up, or the vote upon any such action. Any
notice that was mailed in the manner herein provided will be conclusively
presumed to have been duly given whether or not the Holder receives the notice.
11.2 Shares of Preferred Stock issued and reacquired or
extinguished as provided for herein will be retired and canceled promptly after
reacquisition or extinguishment hereof and, upon compliance with the applicable
requirements of Delaware law, have the status of authorized but unissued shares
of preferred stock of the Issuer undesignated as to series and may with any and
all other authorized but unissued shares of preferred stock of the Issuer be
designated or redesignated and issued or reissued, as the case maybe, as part of
any series of preferred stock of the Issuer except that any issuance or
reissuance of shares of the Preferred Stock must be in compliance with this
Certificate of Designation.
11.3 In the Issuer's discretion, no fractional shares of Common
Stock or securities representing fractional shares of Common Stock will be
issued upon conversion or as dividends payable in the Preferred Stock. Any
fractional interest in a share of Common Stock resulting from conversion or
dividend payment will be paid in cash based on the last reported sale price of
the Common Stock on the Nasdaq National Market (or any national securities
exchange or authorized quotation system on which the Common Stock is then
listed) at the close of business on the trading day next preceding the date of
conversion or such later time as the Issuer is legally and contractually able to
pay for such fractional shares.
11.4 The Preferred Stock is issuable in whole shares.
11.5 All notices periods referred to herein will commence on the
date of the mailing of the applicable notice.
* * * * *
-8-
<PAGE>
IN WITNESS WHEREOF, Omnipoint Corporation has caused this Certificate of
Designation to be executed by the undersigned as of June 23, 1999.
OMNIPOINT CORPORATION
By: /s/ Douglas G. Smith
-------------------------------
Name: Douglas G. Smith
Title: Chairman, President and CEO
-9-
<PAGE>
Exhibit 10.1
================================================================================
SECURITIES PURCHASE AGREEMENT
by and among
VOICESTREAM WIRELESS CORPORATION,
HUTCHISON TELECOMMUNICATIONS PCS (USA) LIMITED
and
OMNIPOINT CORPORATION
Dated as of June 23, 1999
================================================================================
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
<S> <C> <C>
I DEFINITIONS.............................................................................. 1
SECTION 1.1........................................................................... 1
II PURCHASE AND SALE OF PREFERRED STOCK..................................................... 3
SECTION 2.1 Initial Closing...................................................... 3
SECTION 2.2 Subsequent Closing................................................... 3
SECTION 2.3 Use of Proceeds...................................................... 3
SECTION 2.4 Terms of Preferred Stock............................................. 3
III CLOSINGS................................................................................. 4
SECTION 3.1 Time and Place of Initial Closing.................................... 4
SECTION 3.2 Time and Place of Subsequent Closing................................. 4
IV REPRESENTATIONS AND WARRANTIES OF ISSUER................................................. 4
SECTION 4.1 Representations and Warranties of Issuer............................. 4
V REPRESENTATIONS AND WARRANTIES OF PURCHASERS............................................. 6
SECTION 5.1 Authorization........................................................ 6
SECTION 5.2 Investment Representations........................................... 7
SECTION 5.3 Additional HPCS Representation and Agreement......................... 7
VI BOARD OF DIRECTORS....................................................................... 7
SECTION 6.1 Board of Directors................................................... 7
VII REGISTRATIONS RIGHTS..................................................................... 8
SECTION 7.1 Demand Registrations................................................. 8
SECTION 7.2 Piggyback Registrations.............................................. 9
SECTION 7.3 No Inconsistent Agreement............................................ 10
SECTION 7.4 Lockup Agreement..................................................... 10
SECTION 7.5 Termination of Certain Rights and Obligations........................ 11
SECTION 7.6 Registration Procedures.............................................. 11
SECTION 7.7 Registration Expenses................................................ 13
SECTION 7.8 Indemnification...................................................... 14
SECTION 7.9 Contribution......................................................... 16
SECTION 7.10 Participation in Underwritten Registrations.......................... 17
SECTION 7.11 Recapitalization of Nonvoting Stock.................................. 17
SECTION 7.12 Adjustments Affecting Registrable Securities......................... 17
</TABLE>
i
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<TABLE>
<CAPTION>
Page
<S> <C> <C>
VIII ADDITIONAL RIGHTS AND COVENANTS.......................................................... 17
SECTION 8.1 Cooperation and Full Access.......................................... 17
SECTION 8.2 Transactions, Agreements, etc........................................ 18
SECTION 8.3 Standstill........................................................... 18
IX CLOSING CONDITIONS....................................................................... 18
SECTION 9.1 Conditions to Purchasers' Obligations at the Initial Closing......... 18
SECTION 9.2 Conditions to Issuer's Obligations at the Initial Closing............ 20
SECTION 9.3 Conditions to Purchasers' Obligations at the Subsequent Closing...... 20
SECTION 9.4 Conditions to Issuer's Obligations at the Subsequent Closing......... 22
X TERMINATION.............................................................................. 22
SECTION 10.1 Termination.......................................................... 22
SECTION 10.2 Effect of Termination................................................ 22
SECTION 10.3 Fees and Expenses.................................................... 22
XI MISCELLANEOUS............................................................................ 23
SECTION 11.1 Notices.............................................................. 23
SECTION 11.2 Survival of Warranties............................................... 24
SECTION 11.3 Indemnification...................................................... 24
SECTION 11.4 Amendments; No Waivers............................................... 24
SECTION 11.5 Successors and Assigns............................................... 25
SECTION 11.6 Governing Law........................................................ 25
SECTION 11.7 Jurisdiction......................................................... 25
SECTION 11.8 WAIVER OF JURY TRIAL................................................. 25
SECTION 11.9 Counterparts; Effectiveness.......................................... 25
SECTION 11.10 Entire Agreement; No Third Party Beneficiaries....................... 25
SECTION 11.11 Captions............................................................. 26
SECTION 11.12 Severability......................................................... 26
SECTION 11.13 Specific Performance................................................. 26
</TABLE>
ii
<PAGE>
SECURITIES PURCHASE AGREEMENT
-----------------------------
SECURITIES PURCHASE AGREEMENT, dated as of June 23, 1999 (the
"Agreement"), by and among Omnipoint Corporation, a Delaware corporation
("Issuer"), VoiceStream Wireless Corporation, a Washington corporation
("VoiceStream") and Hutchison Telecommunications PCS (USA) Limited, a British
Virgin Islands corporation ("HPCS"). VoiceStream and HPCS are sometimes referred
to herein individually as a "Purchaser" and collectively as the "Purchasers".
W I T N E S S E T H :
-------------------
WHEREAS, upon the terms and conditions set forth in this Agreement,
Issuer has determined to issue and sell, and Purchasers have determined to
purchase, 12,500 shares of Issuer's Series A Non-Voting Convertible Preferred
Stock, par value $0.01 per share (the "Preferred Stock").
WHEREAS, concurrently herewith, Issuer and Purchasers are entering
into an Agreement and Plan of Reorganization (the "Reorganization Agreement"),
pursuant to which, among other things, wholly owned subsidiaries of VoiceStream
Wireless Holding Corporation, a Delaware corporation ("VWHC"), will be merged
with and into each of Issuer and VoiceStream; and
WHEREAS, it is a condition to the purchase and sale of the Preferred
Stock hereunder that the Reorganization Agreement continue to be in full force
and effect on the closing date of such purchase and sale of Preferred Stock.
NOW, THEREFORE, in consideration of the mutual covenants, conditions
and promises hereinafter set forth, the parties hereby agree as follows:
I DEFINITIONS
SECTION 1.1 (a) Capitalized terms used herein and not otherwise defined
shall have the meaning ascribed to such term in the Reorganization Agreement.
(b) The following terms as used herein have the following meanings:
"Anniversary" means each one-year period measured from the date of
this Agreement.
"Common Stock" means the Common Stock, par value $0.01 per share, of
Issuer.
"Registrable Securities" means (i) shares of Common Stock beneficially
owned by Purchasers and (ii) shares of Common Stock issued to Purchasers upon
the conversion of shares of
<PAGE>
Preferred Stock and, in each case, any shares into which such shares are
subdivided, combined or otherwise converted by Issuer.
"Securities Act" means the Securities Act of 1933, as amended.
(c) Each of the following terms is defined in the Section set forth
opposite such term:
Agreement....................................... Preamble
Company Indemnitee.............................. 7.8(b)
Demand Registration............................. 7.1(a)
HPCS............................................ Preamble
Indemnified Party............................... 11.3
Initial Closing................................. 3.1
Initial Closing Date............................ 3.1
Initial Shares.................................. 2.1
Issuer.......................................... Preamble
Losses.......................................... 11.3
Maturity........................................ 2.5
Offerors........................................ 7.1(a)
Other Registrable Securities.................... 7.1(a)
Preferred Stock................................. Preamble
Purchaser....................................... Preamble
Purchaser Indemnitee............................ 7.8(a)
Reduced Conversion Price........................ 2.4
Registration Expenses........................... 7.7(a)
Remaining Preferred Shares...................... 2.5
Reorganization Agreement........................ Preamble
Subsequent Closing.............................. 3.2
Subsequent Closing Date......................... 3.2
Subsequent Shares............................... 2.2
VWHC............................................ Preamble
VoiceStream..................................... Preamble
(d) Unless the context otherwise requires, the terms defined in this
Article I or elsewhere in this Agreement shall have the meanings herein
specified for all purposes of this Agreement, applicable to both the singular
and plural forms of any of the terms defined herein. When a reference is made in
this Agreement to a Section, Article, Exhibit or Schedule such reference shall
be to a Section, Article, Exhibit or Schedule, respectively, of this Agreement
unless otherwise indicated. Whenever the words "include," "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation." The use of any gender herein shall be deemed to
include the neuter, masculine and feminine genders wherever necessary or
appropriate.
<PAGE>
II PURCHASE AND SALE OF PREFERRED STOCK
SECTION 2.1 Initial Closing. Subject to the terms and conditions of
---------------
this Agreement, at the Initial Closing, Issuer will issue, sell and deliver
4,271 shares of Preferred Stock to VoiceStream and 4,271 shares of Preferred
Stock to HPCS (collectively, the "Initial Shares") for a purchase price of
$24,000 per share payable to Issuer on the Initial Closing Date.
SECTION 2.2 Subsequent Closing. Subject to the terms and conditions of
------------------
this Agreement, at the Subsequent Closing, Issuer will issue, sell and deliver
1,979 shares of Preferred Stock to VoiceStream and 1,979 shares of Preferred
Stock to HPCS (collectively, the "Subsequent Shares"), for a purchase price of
$24,000 per share payable to Issuer on the Subsequent Closing Date.
SECTION 2.3 Use of Proceeds. Issuer shall use the proceeds from the
---------------
sale of the (a) Initial Closing Shares, for the purposes set forth on Schedule
2.3(a) and (b) the Subsequent Closing Shares, for the purposes set forth on
Schedule 2.3(b).
SECTION 2.4 Terms of Preferred Stock. The Preferred Stock is
------------------------
convertible at any time or from time to time into Common Stock at the conversion
price of $24 per share of Common Stock; provided, however, that the conversion
price shall be reduced to $18.50 per share of Common Stock (the "Reduced
Conversion Price") if the mergers contemplated by the Reorganization Agreement
are not consummated and are terminated by reason of (i) a breach by Issuer of
its covenants, agreements or obligations under the Reorganization Agreement or
(ii) any representation or warranty of Issuer under the Reorganization Agreement
being untrue in any material respect; provided, however, that conversion may not
-------- -------
occur until any applicable waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, relating to the transactions contemplated
hereby shall have expired or been terminated. In the event that the conversion
of the Preferred Stock into Common Stock occurs at the Reduced Conversion Price,
the number of shares of Preferred Stock so converted shall not exceed that
number of shares which may be converted into Common Stock in accordance with the
regulations and rulings of the Federal Communications Commission and applicable
law. In the event that, after giving effect to such conversion at the Reduced
Conversion Price, there are shares of Preferred Stock remaining which could not
be so converted (such remaining amount, the "Remaining Preferred Shares"), the
Remaining Preferred Shares shall be redeemed by Issuer through the issuance of
indebtedness to the Purchasers. Such indebtedness shall be senior unsecured
debt of Issuer, shall bear interest at an annual rate of 7%, and shall mature on
September 30, 2006 (the "Maturity"). There shall be no payments of interest or
principal on such debt until the Maturity. Such debt shall not contain any
covenants (other than the obligation to repay in accordance with the terms
thereof) and shall only be accelerated upon a bankruptcy or insolvency event of
Issuer or upon acceleration of Issuer's high yield indebtedness.
3
<PAGE>
III CLOSINGS
SECTION 3.1 Time and Place of Initial Closing. Subject to the
---------------------------------
conditions set forth in Section 9.1, the closing of the transactions
contemplated by Section 2.1 (the "Initial Closing") shall take place at the
offices of Friedman Kaplan & Seiler LLP, 875 Third Avenue, New York, New York,
at 10:00 a.m. local time on the date hereof (the "Initial Closing Date"). At
the Initial Closing, Issuer shall deliver to Purchasers duly executed and issued
stock certificates evidencing the Initial Shares purchased thereby against
payment of the purchase price therefor by wire transfer of immediately available
funds to the account specified therefor by Issuer, one-half of which purchase
price shall be paid on the Initial Closing Date and one-half of which shall be
paid on the first Business Day following the Initial Closing Date.
SECTION 3.2 Time and Place of Subsequent Closing. The closing of the
------------------------------------
transactions contemplated by Section 2.2 (the "Subsequent Closing") shall take
place at the offices of Friedman Kaplan & Seiler LLP, 875 Third Avenue, New
York, New York, at 10:00 a.m. local time on October 1, 1999, provided that the
conditions set forth in Section 9.3 are satisfied, or such later date on which
the conditions set forth in Section 9.3 are satisfied (such earlier date, the
"Subsequent Closing Date") or waived by Purchasers or at such other place and/or
time and/or on such other date as the parties may agree; provided, however, that
-------- -------
if the Subsequent Closing Date has not occurred on or before December 31, 1999,
Purchasers' obligations hereunder may be terminated by Purchasers. In the event
the Reorganization Agreement has been terminated as a result of a breach of such
Reorganization Agreement by Issuer, Purchasers shall have the right but not the
obligation to acquire the Subsequent Shares. At the Subsequent Closing, Issuer
shall deliver to Purchasers duly executed and issued stock certificates
evidencing the Subsequent Shares purchased thereby against payment of the
purchase price therefor by wire transfer of immediately available funds to the
account specified therefor by Issuer.
IV REPRESENTATIONS AND WARRANTIES OF ISSUER
SECTION 4.1 Representations and Warranties of Issuer.
----------------------------------------
(a) Incorporation of Representations and Warranties in Reorganization
-----------------------------------------------------------------
Agreement. The representations and warranties of Issuer set forth in Section 4
- ---------
of the Reorganization Agreement (together with the Disclosure Schedule) are
hereby incorporated herein by reference, and are hereby made by Issuer to
Purchasers as of the date hereof and the Initial Closing Date, in their entirety
with the same force and effect.
(b) Additional Representations and Warranties. Issuer hereby
-----------------------------------------
represents and warrants to Purchasers as of the date hereof, the Initial Closing
Date and the Subsequent Closing Date that the shares of Preferred Stock being
issued to Purchasers hereunder, when issued and paid for pursuant to the terms
of this Agreement, will be duly authorized, validly issued, fully paid and
4
<PAGE>
nonassessable, and will be free and clear of any Liens, and shall not be subject
to any preemptive rights of the holders of any other class or series of the
capital stock of Issuer. The shares of Common Stock issued upon conversion of
the Preferred Stock, when issued pursuant to the terms thereof, will be validly
issued, fully paid and nonassessable, and will be free and clear of any Liens.
(c) Power and Authority; No Violation. The Issuer has full power and
---------------------------------
authority to execute, deliver and perform its obligations under this Agreement
and to consummate the transactions contemplated hereby. This Agreement and all
transactions contemplated hereby have been duly and validly authorized by all
necessary action on the part of Issuer and this Agreement constitutes a legal,
valid and binding obligation of Issuer 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. Neither the execution, delivery or performance of
this Agreement nor the consummation of the transactions contemplated hereby by
Issuer will, with or without the giving of notice or the passage of time, or
both, (i) conflict with, result in a default or loss of rights (or give rise to
any right of termination, cancellation or acceleration) under, or result in the
creation of any Lien, pursuant to (A) any provision of the certificate of
incorporation, by-laws, stockholders agreements or other constituent documents
of Issuer; (B) any material note, bond, indenture, mortgage, deed of trust,
contract, agreement, lease or other instrument or obligation to which Issuer is
a party or by which Issuer or its property may be bound or affected; or (C) any
law, order, judgment, ordinance, rule, regulation or decree to which Issuer is a
party or by which it or its property is bound or affected; or (ii) give rise to
any right of first refusal or similar right with respect to any interest, or any
properties or assets, of Issuer. No permit, consent, approval, authorization,
qualification or registration of, or declaration to or filing with any
governmental or regulatory authority or agency or third party is required to be
obtained or made by Issuer in connection with the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby or thereby
in order to (A) render this Agreement or the transactions contemplated hereby or
thereby valid and effective and (B) enable Issuer to sell the Purchased Shares
(including shares of Common Stock into which such shares may be converted).
(d) Legal Matters. There is no claim, legal action, counterclaim,
-------------
suit, arbitration, governmental investigation or other legal, administrative or
tax proceeding, nor any order, decree or judgment, in progress or pending, or to
the knowledge of Issuer threatened, against or relating to the right of Issuer
to perform its obligations under this Agreement, nor does Issuer know or have
reason to be aware of any basis for the same. There is outstanding no order,
writ, injunction, judgment or decree of any court, governmental agency or
arbitration tribunal applicable to Issuer or binding upon it or its property
which would individually or in the aggregate impair in any material respect the
performance of the obligations of Issuer hereunder or the consummation of the
transactions contemplated by this Agreement other than orders or decrees
involving the wireless telephone industry in general.
(e) Truth and Correctness. No representation or warranty by Issuer in
---------------------
this Agreement contains or will contain any untrue statement of a material fact
or omits or will omit to
5
<PAGE>
state a material fact necessary to make the statements contained herein or
therein, in light of the circumstances under which such statements are made, not
misleading.
(f) Investment Company Act. Issuer is not an "investment company"
----------------------
within the meaning of the Investment Company Act of 1940, as amended.
(g) No Brokers. Except as set forth on Schedule 4.1(g) hereto, no
----------
agent, broker, investment banker, person or firm is or will be entitled to any
broker's or finder's fee or any other commission or similar fee directly or
indirectly in connection with the transactions contemplated by this Agreement
based in any way on any arrangements, agreements or understandings made by or on
behalf of Issuer or an Affiliate thereof, and Issuer hereby agrees to indemnify
the Investor and agrees to hold harmless the Investor against and in respect of
any claims for brokerage and other commissions relating to such transactions
based in any way on any arrangements, agreements or understandings made by or on
behalf of Issuer or an Affiliate thereof.
(h) Reports and Financial Statements. The Issuer has filed all
--------------------------------
reports required to be filed with the SEC since January 1, 1998 (collectively,
including all exhibits thereto, the "SEC Reports"). None of such SEC Reports,
as of their respective dates (as amended through the date hereof), contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading. Each of the
financial statements (including the related notes) included in the SEC Reports
presents fairly, in all material respects, the consolidated financial position
and consolidated results of operations and cash flows of Issuer and its
subsidiaries as of the respective dates or for the respective periods set forth
therein, all in conformity with generally accepted accounting principles
consistently applied during the periods involved, subject, in the case of the
unaudited interim financial statements, to normal year-end adjustments and any
other adjustments described therein. All such SEC Reports, as of their
respective dates (as amended through the date hereof), complied in all material
respects with the requirements of the Exchange Act.
V REPRESENTATIONS AND WARRANTIES OF PURCHASERS
Each Purchaser, as to itself only, hereby represents and warrants to
Issuer (as of the date hereof, the Initial Closing Date and the Subsequent
Closing Date):
SECTION 5.1 Authorization. It has the full power and authority to enter
-------------
into this Agreement and to perform all of its obligations hereunder. The
execution, delivery and performance of this Agreement by it have been duly
authorized by all necessary corporate action, and this Agreement constitutes a
valid and binding obligation of it enforceable against it in accordance with its
terms except as may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting creditors' rights generally and by
equitable principles of general applicability. The execution, delivery and
performance of this Agreement by it do not (a) violate any provision
6
<PAGE>
of its certificate of incorporation, by-laws or other constituent documents, (b)
conflict with or constitute a default under any material agreement, indenture or
instrument to which it is a party or by which it or its property is bound or (c)
violate any statute or order of any court or Governmental Body applicable to it,
except in each case set forth in clauses (b) or (c) which would not reasonably
be expected to have a material adverse effect on its business taken as a whole
or the transactions contemplated hereby.
SECTION 5.2 Investment Representations. It is an Accredited Investor
--------------------------
within the definition set forth in Rule 501(a) of the Securities Act. It is
acquiring the shares of Preferred Stock it is purchasing hereunder for its own
account, for investment, and not with a view to, or for sale in connection with,
the distribution thereof or of any interest therein, in violation of state or
federal law. It understands that such shares have not been registered under the
Securities Act by reason of its issuance in a transaction exempt from the
registration requirements of the Securities Act pursuant to the exemption
provided in Section 4(2) thereof, that such shares of Preferred Stock have not
been registered under applicable state securities laws by reason of their
issuance in a transaction exempt from such registration requirements, and that
such shares of Preferred Stock may not be sold or otherwise disposed of unless
registered under the Securities Act and applicable state securities laws or
exempted from registration therefrom.
SECTION 5.3 Additional HPCS Representation and Agreement. HPCS
--------------------------------------------
represents, warrants and agrees to Issuer that either (a) immediately before the
closing of the transactions described in the Reorganization Agreement, HPCS will
directly own at least 3.5 million shares of VoiceStream Common Stock, no par
value, and all the shares of the Preferred Stock (or the Common Stock into which
it was converted) issued pursuant to this Agreement, or (b) at the closing of
such transactions, HPCS shall be the purchaser of the shares of capital stock of
VWHC issued pursuant to the Stock Subscription Agreement dated June 23, 1999,
and, immediately prior to the exchange of such shares as contemplated by the
Reorganization Agreement, the holder of all the Preferred Stock (or the Common
Stock into which it was converted) issued pursuant to this Agreement.
VI BOARD OF DIRECTORS
SECTION 6.1 Board of Directors. From and after the date when any
------------------
applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended, relating to the transactions contemplated hereby shall have
expired or been terminated, for so long as Purchasers beneficially own at least
seven and one-half percent (7 1/2%) of Issuer's outstanding equity securities,
and provided that the Preferred Stock has been converted into Common Stock,
Purchasers shall have the right to jointly designate one person to serve on the
Board of Directors. Issuer agrees, and Issuer confirms that, by the approval of
this Agreement by the Board of Directors, the Board of Directors has agreed to
take all actions necessary to promptly cause the election to the Board of
Directors of any Person so designated by Purchasers in accordance with this
Section 6.1, including expanding the number of members of the Board of Directors
to accommodate the addition of such
7
<PAGE>
Person who is elected to the Board of Directors and including, recommending for
election, any such Person so nominated by Purchasers in any slate of directors
set forth in any proxy materials sent to Issuer's stockholders in respect of any
future annual meeting.
VII REGISTRATIONS RIGHTS
SECTION 7.1 Demand Registrations.
--------------------
(a) Right to Demand Registration. At any time on and after the
----------------------------
earliest to occur of (i) the termination of the Reorganization Agreement, (ii)
any breach by Issuer of its obligations under this Agreement or the
Reorganization Agreement and (iii) June 30, 2000, the holders of not less than
twenty (20%) percent of the Registrable Securities, as the case may be
(collectively, the "Offerors"), may request registration under the Securities
Act of all or part of their Registrable Securities. Within seven days after
receipt of any such request, Issuer will give written notice of such request to
all other holders of securities of the Issuer entitled to notice of or the right
to participate in such registrations ("Other Registrable Securities") and will
include in such registration all Other Registrable Securities with respect to
which Issuer has received written requests for inclusion therein within 20 days
after the receipt of Issuer's notice. A registration requested pursuant to this
Section 7.1(a) is referred to herein as a "Demand Registration". A Demanding
Stockholder may make a written request for a Demand Registration in accordance
with the foregoing in respect of equity securities of Issuer that it intends to
convert into shares of Common Stock upon the effectiveness of the Registration
Statement prepared in connection with such demand, and Issuer shall fulfill its
obligations under this Section 7.1(a) in a manner that permits such Demanding
Stockholder to exercise its conversion rights in respect of such equity
securities and substantially contemporaneously sell the shares of Common Stock
issuable upon such conversion under such Registration Statement.
A request pursuant to this Section shall state the number of
Registrable Securities requested to be registered, the intended method of
disposition thereof and the jurisdictions in which registration is desired. In
connection with any registration subject to this Section 7.1(a), the holders of
Registrable Securities included in such registration shall enter into such
underwriting, lock-up and other agreements, and shall execute and complete such
questionnaires and other documents, as are customary in a primary offering.
(b) Number of Demand Registrations. The holders of Registrable
------------------------------
Securities will be entitled to request four (4) Demand Registrations, and Issuer
will pay all Registration Expenses in connection therewith. A registration will
not constitute a Demand Registration (i) until it has become effective, (ii if
the Offerors for such registration are not able to sell at least 80% of the
Registrable Securities requested to be included in such registration, or (ii if
after it has become effective, the offering of Registrable Securities pursuant
to such registration is interfered with by any stop order, injunction or other
order or requirement of the SEC or other governmental agency or court.
8
<PAGE>
(c) Priority on Demand Registrations. Issuer will not include in any
--------------------------------
Demand Registration any securities which are not Registrable Securities or Other
Registrable Securities without the written consent of the Offerors not to be
unreasonably withheld (and the Offerors may not withhold their written consent
if the Demand Registration is an underwritten offering and the managing
underwriters advise Issuer and the Offerors in writing that in their opinion the
number of Registrable Securities and other securities requested to be included
therein does not exceed the number of securities which can be sold in such
offering without materially adversely affecting such sale). If Other
Registrable Securities are permitted to be included in a Demand Registration
which is an underwritten offering and the managing underwriters advise Issuer in
writing that in their opinion the number of Registrable Securities and Other
Registrable Securities requested to be included exceeds the number of securities
which can be sold in such offering without materially adversely affecting such
sale, Issuer will include in such registration prior to the inclusion of any
securities which are not Registrable Securities the number of Registrable
Securities requested to be included which in the opinion of such managing
underwriters can be sold, pro rata among the respective holders of such
Registrable Securities on the basis of the amount of such securities owned.
(d) Restrictions on Demand Registrations. Issuer may postpone for up
------------------------------------
to three months in the aggregate during any twelve month period any filing or
the effectiveness of any registration statement for a Demand Registration if the
Board of Directors of Issuer determines (and Issuer so certifies by written
notice to the Offerors) that such Demand Registration might reasonably be
expected to have an adverse effect on any proposal or plan by Issuer or any of
its Subsidiaries to engage in any material corporate transaction; provided that
--------
in such event, the Offerors initiating the request for such Demand Registration
will be entitled to withdraw such request.
(e) Selection of Underwriters. In the case of a Demand Registration,
-------------------------
the Offerors will have the right to select the investment banker(s) and
manager(s) to administer the offering, subject to Issuer's approval which will
not be unreasonably withheld.
SECTION 7.2 Piggyback Registrations.
-----------------------
(a) Right to Piggyback Registrations. Whenever Issuer proposes to
--------------------------------
register any of its Capital Stock under the Securities Act, Issuer will give
prompt written notice (in any event within ten business days after its receipt
of notice of any exercise of other demand registration rights) to the holders of
Registrable Securities of its intention to effect such a registration and will
use its best efforts to include in such registration all Registrable Securities
with respect to which Issuer has received written requests for inclusion therein
within 20 days after the receipt of Issuer's notice by such holders (or at such
later time if Issuer and the process of such registration will not be materially
prejudiced thereby). A request pursuant to this Section 7.2(a) shall state the
number of Registrable Securities requested to be registered. In connection with
any registration subject to this Section 7.2(a), the holders of Registrable
Securities included in such registration shall enter into such underwriting,
lock-up and other agreements, and shall execute and complete such questionnaires
9
<PAGE>
and other documents, as are customary in a secondary offering. Issuer shall
have the right to terminate or withdraw any registration initiated by it under
this Section 7.2(a) prior to the effectiveness of such registration whether or
not any holders of Registrable Securities have elected to include any securities
in such registration. All registrations requested pursuant to this Section
7.2(a) are referred to herein as "Piggyback Registrations". No registration
effected under this Section 7.2 shall relieve Issuer of its obligation to effect
a Demand Registration pursuant to Section 7.1.
(b) Priority on Primary Registrations. If a Piggyback Registration is
---------------------------------
an underwritten primary registration on behalf of Issuer, and the managing
underwriters advise Issuer in writing that in their opinion the number of
securities requested to be included in such registration exceeds the number
which can be sold without materially adversely affecting such offering, Issuer
will include in such registration (regardless of whether any holder initially
requested such registration) (i) first, the securities Issuer proposes to sell
and (ii second, Registrable Securities and all Other Registrable Securities
requested to be included in such registration, pro rata among the holders
thereof on the basis of the number of shares owned by such holders.
(c) Priority on Secondary Registrations. If a Piggyback Registration
-----------------------------------
is an underwritten secondary registration on behalf of holders of Issuer's
securities (and in which Issuer is not issuing any securities under such
registration), and the managing underwriters advise Issuer in writing that in
their opinion the number of securities requested to be included in such
registration exceeds the number which can be sold without materially adversely
affecting such offering, Issuer will include in such registration (i) first, the
securities requested to be included in such registration by the holder or
holders who requested such registration (such holders being entitled to
participate in accordance with the relative priorities, if any, as may exist
among them) and (ii second, Registrable Securities and all Other Registrable
Securities requested to be included in such registration, pro rata among the
holders thereof on the basis of the number of shares owned by such holders.
(d) Selection of Underwriters. In the case of a Piggyback
-------------------------
Registration which is a primary registration on behalf of Issuer, Issuer will
have the right to select any investment banker(s) and manager(s) of nationally
recognized standing to administer the offering.
SECTION 7.3 No Inconsistent Agreement. Any right given by Issuer to any
-------------------------
holder or prospective holder of Issuer's securities in connection with the
registration of securities shall be conditioned such that it shall be consistent
with the rights of the holders of Registrable Securities provided in this
Agreement and shall not materially adversely affect the right of the holders of
Registrable Securities to participate in Piggyback Registrations in the manner
set forth in this Agreement. Notwithstanding anything to the contrary set forth
in this Article VII, the parties hereto agree to promptly incorporate the
provisions of this Article VII into the existing Amended and Restated
Registration Rights Agreement, dated June 29, 1995, to which Issuer is a party,
it being understood that such incorporation shall not in any material way impair
the registration rights set forth in this Article VII.
10
<PAGE>
SECTION 7.4 Lockup Agreement.
----------------
(a) Each Purchaser agrees, and prior to transferring Registrable
Securities will cause its proposed transferee to agree, if requested by Issuer
and the managing underwriters of Registrable Securities, not to sell or
otherwise transfer or dispose of (other than by private placement) any other
Registrable Securities (or other securities) of Issuer ten days prior to or
during the 90-day period following the effective date of a registration
statement of Issuer filed under the Securities Act, provided that all officers,
--------
directors and stockholders owning four percent (4%) or more (on a fully diluted
basis, treating all outstanding options, rights and warrants to acquire equity
securities of Issuer as fully exercised, and treating all securities convertible
into or exchangeable for equity securities of Issuer as fully converted or
exchanged) of Issuer's equity securities shall enter into similar agreements.
Such agreement shall be in writing in a form satisfactory to Issuer and such
underwriter. Issuer may impose stop transfer instructions with respect to the
shares (or securities) subject to the foregoing restriction until the end of
said 90-day period.
(b) Issuer agrees (i) not to effect any public sale or distribution of
its equity securities, or any securities convertible into or exchangeable or
exercisable for such securities, during the ten days prior to and during the 90-
day period beginning on the effective date of any underwritten Demand
Registration or any underwritten Piggyback Registration (except as part of such
underwritten registration or pursuant to registrations on Form S-4 or Form S-8
or any successor form or forms not available for registering capital stock for
sale to the public at large), unless all of the Registrable Securities included
in such Registration have been sold and (ii to cause each holder of at least 25%
of its equity securities acquired from Issuer (other than a holder that acquired
such securities in a registered public offering or in open market transactions,
unless such holder owned beneficially five percent or more of Issuer's equity
securities prior to such public offering) to agree not to effect any public sale
or distribution of any such securities during such period (except as part of
such underwritten registration, if otherwise permitted), unless all of the
Registrable Securities included in such Registration have been sold.
SECTION 7.5 Termination of Certain Rights and Obligations .
---------------------------------------------
Notwithstanding the foregoing provisions of this Agreement, the rights to
registration pursuant to Sections 7.1 and 7.2, the obligations of Purchasers
pursuant to Section 7.4(a), and the obligations of Issuer and the holders of 25%
or more of its equity securities pursuant to Section 7.4(b) shall terminate as
to any particular Registrable Securities that shall have been (a) sold in a
registered public offering, (b) sold through a broker, dealer or underwriter in
a public distribution or a public securities transaction in which the transferee
receives a certificate without a securities legend or (c) sold or distributed
pursuant to Rule 144.
SECTION 7.6 Registration Procedures. Whenever the Offerors have
-----------------------
requested that any Registrable Securities be registered pursuant to this
Agreement, Issuer will use its best efforts to
11
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effect the registration and the sale of such Registrable Securities in
accordance with the intended method of disposition thereof, and pursuant thereto
Issuer will expeditiously:
(a) prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its best efforts to cause such
registration statement to become and remain effective for a period of not less
than three months; provided that before filing a registration statement or
--------
prospectus or any amendments or supplements thereto, Issuer will furnish to the
counsel selected by the Offerors requesting such registration statement copies
of all such documents proposed to be filed, which documents will be subject to
the review of such counsel before such filing is made, and Issuer will comply
with any reasonable request made by such counsel to make changes to the extent
such documents do not comply in all material respects with the Securities Act;
(b) prepare and file with the SEC such amendments (including post-
effective amendments) and supplements to such registration statement and the
prospectus used in connection therewith as may be necessary to keep such
registration statement effective for a period of not less than three months and
to comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such registration statement during such
period in accordance with the intended methods of disposition by the sellers
thereof set forth in such registration statement;
(c) furnish to each seller of Registrable Securities such number of
conformed copies of such registration statement, each amendment and supplement
thereto (in each case including all exhibits), the prospectus included in such
registration statement (including each preliminary prospectus) and such other
customary documents as such seller may reasonably request in order to facilitate
the disposition of the Registrable Securities owned by such seller;
(d) use its best efforts to register or qualify such Registrable
Securities under such other securities or blue sky laws of such jurisdictions as
any seller reasonably requests and do any and all other acts and things which
may be reasonably necessary or advisable to enable such seller to consummate the
disposition in such jurisdictions of the Registrable Securities owned by such
seller (provided that Issuer will not be required to (i) qualify generally to do
business in any jurisdiction where it would not otherwise be required to qualify
but for this subparagraph, (ii subject itself to taxation in any such
jurisdiction, or (ii consent to service of process except as required by the
securities or blue sky laws in any such jurisdiction);
(e) notify each seller of such Registrable Securities at any time when
a prospectus relating thereto is required to be delivered under the Securities
Act of Issuer's becoming aware that the prospectus included in such registration
statement, as then in effect, contains an untrue statement of a material fact or
omits any material fact necessary to make the statements therein not misleading
in light of the circumstances under which they were made, and, at the written
request of any such seller, Issuer will prepare a supplement or amendment to
such prospectus so that, as thereafter delivered to the purchasers of such
Registrable Securities, such prospectus will not contain
12
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an untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading in light of the
circumstances under which they were made;
(f) use its best efforts to cause all such Registrable Securities
covered by such registration statement to be listed or quoted on the principal
securities exchange or national automated quotation system on which similar
securities issued by Issuer are then listed or quoted or, if not then listed or
quoted, use its best efforts to cause such Registrable Securities to be listed
on a national securities exchange or quoted on a national automated quotation
system;
(g) provide a transfer agent and registrar for all such Registrable
Securities covered by such registration statement not later than the effective
date of such registration statement;
(h) in the event the offering is an underwritten offering, use its
best efforts to obtain a "cold comfort" letter from the independent public
accountants for Issuer in customary form and covering such matters of the type
customarily covered by such letters;
(i) enter into such customary agreements (including underwriting
agreements in customary form) and take all such other actions as the holders of
a majority of the Registrable Securities being sold or the underwriters, if any,
reasonably request in order to expedite or facilitate the disposition of such
Registrable Securities; and
(j) upon execution and delivery of such customary confidentiality
agreements as Issuer shall reasonably request, make available for inspection by
any seller of Registrable Securities covered by such registration statement, any
underwriter participating in any disposition pursuant to such registration
statement, and any attorney, accountant or other agent retained by any such
seller or underwriter, all pertinent financial and other records, pertinent
corporate documents and properties of Issuer, and cause Issuer's officers,
directors, employees and independent accountants to supply all information
reasonably requested by any such seller, underwriter, attorney, accountant or
agent in connection with such registration statement.
Issuer will make generally available to the holders of Registrable
Securities an earnings statement (which need not be audited) for the twelve
months beginning after the effective date of a registration statement as soon as
reasonably practicable after the end of such period, which earnings statement
shall satisfy Section 11(a) of the Securities Act.
Issuer will, at all times after Issuer has filed a registration
statement with the SEC pursuant to the requirements of either the Securities Act
or the Exchange Act, file all reports required to be filed by it under the
Securities Act and the Exchange Act and the rules and regulations adopted by the
SEC thereunder, and take such further action as any holder or holders of
Registrable Securities may reasonably request, all to the extent required to
enable such holders to be eligible to sell Registrable Securities pursuant to
(i) Rule 144 adopted by the SEC under the Securities Act, as such rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the SEC or (ii a registration statement on Form S-2 or S-3 or any similar
registration form hereafter adopted by
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the SEC. Upon request, Issuer will deliver to holders of Registrable Securities
a written statement as to whether it has complied with such requirements.
SECTION 7.7 Registration Expenses.
---------------------
(a) All expenses incident to Issuer's performance of or compliance
with this Agreement, including, without limitation, all registration and filing
fees, fees and expenses of compliance with securities or blue sky laws, word
processing, duplicating and printing expenses, messenger and delivery expenses,
and fees and disbursements of counsel for Issuer and all independent certified
public accountants (including, but not limited to, fees and disbursements
relating to the "cold comfort" letter described in Section 7.6(h)) and other
Persons retained by Issuer (all such expenses being herein called "Registration
Expenses"), provided that discounts and commissions to underwriters shall not be
--------
considered Registration Expenses for purposes of this Agreement, will be borne
by Issuer as provided in this Agreement, except that Issuer will, in any event,
pay its internal expenses (including, without limitation, all salaries and
expenses of its officers and employees performing legal or accounting duties),
the expense of any annual audit or quarterly review, the expense of any
liability insurance and the expenses and fees for listing the securities to be
registered on each securities exchange on which similar securities issued by
Issuer are then listed or on a national automated quotation system.
(b) In connection with each Demand Registration and Piggyback
Registration, Issuer will reimburse the holders of Registrable Securities
covered by such registration for the reasonable fees and disbursements of one
counsel chosen by the holders of a majority of the Registrable Securities
included in such registration.
(c) To the extent expenses are not required to be paid by Issuer, each
holder of securities included in any registration hereunder will pay those
expenses allocable to the registration of such holder's securities so included,
and any expenses not so allocable will be borne by all sellers of securities
included in such registration in proportion to the aggregate selling price of
the securities to be so registered.
SECTION 7.8 Indemnification.
---------------
(a) In the event of any registration of any Registrable Securities
under the Securities Act pursuant to this Agreement, Issuer agrees to indemnify,
to the fullest extent permitted by law, each holder of Registrable Securities
covered by the applicable registration statement, its respective officers,
directors shareholders or general or limited partners or members and each Person
who controls such holder within the meaning of the Securities Act (each, a
"Purchaser Indemnitee"), as follows:
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(i) against all losses, claims, damages, liabilities and expenses
to which a Purchaser Indemnitee may become subject under the Securities
Act, common law or otherwise, insofar as such losses, claims, damages,
liabilities or expenses arise out of or are caused by any untrue or alleged
untrue statement of material fact contained in any registration statement,
prospectus or preliminary prospectus or any amendment thereof or supplement
thereto relating to such securities or any omission or alleged omission of
a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances under which
they were made, except insofar as the same are caused by or contained in
any information furnished in writing to Issuer by such holder expressly for
use therein or by such holder's failure to deliver a copy of the
registration statement or prospectus or any amendments or supplements
thereto after Issuer has furnished such holder with a sufficient number of
copies of the same;
(ii) against all losses, claims, damages, liabilities and
expenses to the extent of the aggregate amount paid in settlement of any
litigation, or investigation or proceeding by any governmental agency or
body, commenced or threatened, or of any claim whatsoever based upon any
such untrue statement of a material fact or omission of a material fact, or
any such alleged untrue statement of a material fact or omission of a
material fact, if such settlement is effected with the prior written
consent of Issuer, except insofar as the same are caused by or contained in
any information furnished in writing to Issuer by such holder expressly for
use therein or by such holder's failure to deliver a copy of the
registration statement or prospectus or any amendments or supplements
thereto after Issuer has furnished such holder with a sufficient number of
copies of the same; and
(iii) against all expenses reasonably incurred by such holder in
connection with investigating, preparing or defending against any
litigation, or investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue statement of a material fact or omission of a material fact, or any
such alleged untrue statement of a material fact or omission of a material
fact, to the extent that any such expense is not paid under clause (i) or
(ii) above, except insofar as the same are caused by or contained in any
information furnished in writing to Issuer by such holder expressly for use
therein or by such holder's failure to deliver a copy of the registration
statement or prospectus or any amendments or supplements thereto after
Issuer has furnished such holder with a sufficient number of copies of the
same.
In connection with an underwritten offering, Issuer will indemnify such
underwriters, their officers and directors and each Person who controls such
underwriters within the meaning of the Securities Act to the same extent as
provided above with respect to the indemnification of the Purchaser Indemnitees.
(b) In connection with any registration statement in which a holder of
Registrable Securities is participating, each such holder will furnish to Issuer
in writing such information and
15
<PAGE>
affidavits as Issuer reasonably requests for use in connection with any such
registration statement or prospectus and, to the extent permitted by law, will
indemnify Issuer, its directors and officers and each Person who controls Issuer
within the meaning of the Securities Act (each, a "Issuer Indemnitee") against
any losses, claims, damages, liabilities and expenses resulting from any untrue
statement of material fact contained in the registration statement, prospectus
or preliminary prospectus or any amendment thereof or supplement thereto or any
omission of a material fact required to be stated therein or necessary to make
the statements therein not misleading, but only to the extent that such untrue
statement or omission is contained in any information or affidavit so furnished
in writing by such holder expressly for use in the preparation of such
registration statement, prospectus or preliminary prospectus; provided that
--------
the obligation to indemnify will be several, not joint and several, among such
holders of Registrable Securities and the liability of each such holder of
Registrable Securities will be in proportion to and limited to the net amount
received by such holder from the sale of Registrable Securities pursuant to such
registration statement, prospectus or preliminary prospectus.
(c) Any Person entitled to indemnification hereunder will (i) give
prompt written notice to the indemnifying party of any claim with respect to
which it seeks indemnification and (ii unless in such indemnified party's
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist with respect to such claim, permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party. If such defense is assumed, the
indemnifying party will not be subject to any liability for any settlement made
by the indemnified party without its consent (but such consent will not be
unreasonably withheld). An indemnifying party who is not entitled to, or elects
not to, assume the defense of a claim will not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified hereunder by such
indemnifying party with respect to such claim, unless in the reasonable judgment
of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim in which case such indemnified party shall have the right to employ one
counsel. Failure to give prompt written notice shall not release the
indemnifying party from its obligations hereunder, except to the extent that the
indemnifying party is actually prejudiced by such failure to give notice.
(d) The indemnification provided for under this Agreement will remain
in full force and effect regardless of any investigation made by or on behalf of
the indemnified party or any officer, director or controlling Person of such
indemnified party and will survive the transfer of securities. Issuer also
agrees to make such provisions as are reasonably requested by any indemnified
party for contribution to such party in the event Issuer's indemnification is
unavailable for any reason.
SECTION 7.9 Contribution. In order to provide for just and equitable
------------
contribution in circumstances under which the indemnity contemplated by Section
7.8 is for any reason not available, the parties required to indemnify by the
terms thereof shall contribute to the aggregate losses, claims, damages,
liabilities and expenses of the nature contemplated by such indemnity
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<PAGE>
agreement incurred by any Purchaser Indemnitee, any Company Indemnitee and one
or more of the underwriters, except to the extent that contribution is not
permitted under Section 11(f) of the Securities Act. In determining the amounts
which the respective parties shall contribute, there shall be considered the
parties' relative fault concerning the matter with respect to which the claim
was asserted, knowledge and access to information concerning the matter with
respect to which the claim was asserted, the opportunity to correct and prevent
any statement or omission and any other equitable considerations appropriate
under the circumstances. Issuer and each Person selling securities agree with
each other that no seller of Registrable Securities shall be required to
contribute any amount in excess of the amount such seller would have been
required to pay to an indemnified party if the indemnity under Section 7.8 were
available. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. Issuer and
each such seller agree with each other, and the underwriters of the Registrable
Securities if requested by such underwriters, that it would not be equitable if
the amount of such contribution were determined by pro rata or per capita
allocation (even if the underwriters were treated as one entity for such
purpose) or for the underwriters' portion of such contribution to exceed the
percentage that the underwriting discount bears to the initial public offering
price of the Registrable Securities. For purposes of this Section 7.9, each
Person, if any, who controls an underwriter within the meaning of Section 15 of
the Securities Act shall have the same rights to contribution as such
underwriter, and each director and each officer of Issuer who signed the
registration statement, and each Person, if any, who controls Issuer or a seller
of Registrable Securities within the meaning of Section 15 of the Securities
Act, shall have the same rights to contribution as Issuer or a seller of
Registrable Securities, as the case may be.
SECTION 7.10 Participation in Underwritten Registrations. No Person may
-------------------------------------------
participate in any registration hereunder which is underwritten unless such
Person (a) agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Person or Persons entitled hereunder
to approve such arrangements and (b) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
required under the terms of such underwriting arrangements.
SECTION 7.11 Recapitalization of Nonvoting Stock. At any time any holder
-----------------------------------
of non-voting Registrable Securities wishes to sell such shares pursuant to a
public offering of shares of voting common stock, Issuer shall cause such shares
to be recapitalized into or exchanged for shares of voting common stock, such
recapitalization or exchange to become effective at such time as the
registration statement pertaining to such shares has been filed with and
declared effective by the SEC.
SECTION 7.12 Adjustments Affecting Registrable Securities. Issuer will
--------------------------------------------
not take any action, or permit any change to occur, with respect to its
securities which would materially adversely affect the ability of the Offerors
to include their Registrable Securities in a registration undertaken pursuant to
this Agreement or which would materially adversely affect the marketability of
such
17
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Registrable Securities in any such registration (including, without limitation,
effecting a stock split or a combination of shares), except as contemplated by
the Reorganization Agreement.
VII ADDITIONAL RIGHTS AND COVENANTS
SECTION 8.1 Cooperation and Full Access. Issuer shall give to
---------------------------
Purchasers and their respective counsel, accountants, advisers and other
representatives, full access at all times during reasonable business hours and
on reasonable notice, to all the offices, properties, contracts, books, records,
personnel and affairs of Issuer or in any way relating to or connecting with the
business or its assets, including, such access as may be requested to allow
Purchasers to satisfy themselves that the conditions to the Subsequent Closing
set forth herein have been or will be satisfied and complied with. Issuer shall
furnish, and shall direct its independent accountants and legal counsel to
furnish, to Purchasers all such documents and information concerning the assets,
properties, liabilities and affairs of Issuer as Purchasers may from time to
time reasonably request.
SECTION 8.2 Transactions, Agreements, etc. Except as expressly provided
-----------------------------
in the Reorganization Agreement, Issuer shall not enter into any transaction or
contract or take (or omit to take) any action which would, or is reasonably
likely to, (i) result in any of Issuer's representations or warranties contained
in this Agreement not being true and correct as of the Subsequent Closing Date
or (ii prevent Issuer from performing, satisfying and complying with all of its
covenants and agreements contained in this Agreement.
SECTION 8.3 Standstill. From and after the date hereof through the
----------
seventh (7th) Anniversary, Purchasers agree that they will not, without the
prior consent of Issuer, seek to acquire, offer to acquire or agree to acquire
any equity securities of Issuer that would result in Purchasers' aggregate
ownership of equity securities of Issuer exceeding fifteen (15%) of Issuer's
outstanding equity securities (except by way of stock dividends or other
distributions made on a pro rata basis to all holders of the equity securities
held by Purchasers) to the extent the acquisition of such equity securities
would result in Issuer violating the Communications Act as in effect on the date
of such acquisition.
IX CLOSING CONDITIONS
SECTION 9.1 Conditions to Purchasers' Obligations at the Initial
----------------------------------------------------
Closing. The obligations of Purchasers under Section 2.1 of this Agreement are
- -------
subject to the fulfillment on or before the Initial Closing of each of the
following conditions, any of which may be waived by Purchasers in writing:
18
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(a) Representations and Warranties. The representations and
------------------------------
warranties of Issuer contained in Section 4.1 hereof shall be true and correct
on and as of the Initial Closing with the same effect as though such
representations and warranties had been made on and as of the Initial Closing
Date.
(b) Performance. Issuer shall have executed and delivered
-----------
certificates representing the Initial Shares, and shall have performed and
complied with all agreements, covenants and conditions contained in this
Agreement that are required to be performed or complied with by it on or before
the Initial Closing.
(c) Proceedings and Documents. All corporate and other proceedings in
-------------------------
connection with the transactions contemplated at the Initial Closing and all
documents incident thereto shall be reasonably satisfactory in form and
substance to Purchasers and their counsel, and Purchasers shall have received
all such counterpart original, certified and other copies of such documents as
Purchasers may reasonably request.
(d) No Adverse Action. There shall not have been adopted or enacted
-----------------
any statute, rule or regulation prohibiting or imposing any material condition
on the transactions contemplated by this Agreement, nor shall there have been
instituted or pending any action or proceeding by or before any court or
governmental authority or other regulatory or administrative agency or
commission, domestic or foreign, by any government or governmental authority,
nor shall there be any determination by any government, governmental authority,
regulatory or administrative agency or commission which, in either case, seeks
to restrain, enjoin or impose any material condition on the transactions
contemplated by this Agreement or the Reorganization Agreement, or would require
Issuer or Purchasers, in the reasonable opinion of Purchasers, to take any
action or do anything in connection with the foregoing that may reasonably be
expected to have a material adverse effect to their respective businesses or
materially impair the ownership or operation of all or a material portion of the
business, assets or properties presently owned by Issuer or any of its
Subsidiaries or to be acquired by Purchasers pursuant to the Reorganization
Agreement.
(e) Opinion of Company Counsel. Purchasers shall have received from
--------------------------
Piper & Marbury L.L.P., counsel to Issuer, a legal opinion addressed to
Purchasers, dated as of the Initial Closing Date, in the form and substance
reasonably satisfactory to Purchasers.
(f) Consents. All consents, approvals and authorizations of, and
--------
filings, registrations and qualifications with, any governmental authority or
any other party on the part of Issuer required in connection with the
consummation of the transactions contemplated hereby shall have been obtained or
made and shall be in full force and effect.
(g) Secretary's Certificate. Purchasers shall have received a
-----------------------
Certificate of the Secretary of Issuer (i) certifying that no document has been
filed relating to or affecting the Charter of Issuer after the date of the
Certificate of the Secretary of State of the State of Delaware delivered
19
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pursuant to clause (iii) of this subsection, (ii) certifying the names and true
signatures of each officer of Issuer who has been authorized to execute and
deliver this Agreement and any other document delivered by Issuer pursuant to
the Initial Closing, (ii attaching thereto a copy of the Charter certified as of
a recent date by the Secretary of State of Delaware, and a true and complete
copy of Bylaws of Issuer, as in full force and effect at the Initial Closing
Date and (iv attaching copies of resolutions duly adopted by the Board of
Directors (and stockholders, if applicable) authorizing the execution and
delivery of this Agreement and each of the other documents delivered by Issuer
pursuant to the Initial Closing, the issuance, delivery and sale of the Initial
Shares and the performance of the transactions contemplated by this Agreement,
and certifying that such resolutions were duly adopted, are in full force and
effect and have not been rescinded or amended as of the Initial Closing Date.
(h) Additional Documents. Purchasers shall have received such
--------------------
certificates, documents and information as they may reasonably request in order
to establish satisfaction of the conditions set forth in this Section 9.1.
SECTION 9.2 Conditions to Issuer's Obligations at the Initial Closing.
---------------------------------------------------------
The obligations of Issuer to Purchasers under Section 2.1 of this Agreement are
subject to the fulfillment on or before the Initial Closing of each of the
following conditions by Purchasers, any of which may be waived in writing by
Issuer:
(a) Representations and Warranties. The representations and
------------------------------
warranties of each Purchaser contained in Article V hereof shall be true on and
as of the Initial Closing with the same effect as though such representations
and warranties had been made on and as of such Closing.
(b) Payment of Purchase Price. VoiceStream and HPCS shall have
-------------------------
delivered the purchase price for their respective Initial Shares in accordance
with Section 2.1.
(c) Consents. All consents, approvals and authorizations of, and
--------
filings, registrations and qualifications with, any governmental authority or
any other party on the part of Purchasers required in connection with the
consummation of the transactions contemplated hereby shall have been obtained or
made and shall be in full force and effect.
SECTION 9.3 Conditions to Purchasers' Obligations at the Subsequent
-------------------------------------------------------
Closing. The obligation of Purchasers to acquire Subsequent Shares at the
- -------
Subsequent Closing is subject to the fulfillment to the satisfaction of
Purchasers on or before the Subsequent Closing Date of the following conditions,
any of which may be waived by Purchasers in writing:
(a) No Defaults. Issuer shall not have taken any action or omitted to
-----------
take any action which action or omission shall have caused a default or breach
of its covenants hereunder.
20
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(b) Representations and Warranties. The representations and
------------------------------
warranties of Issuer contained in Section 4.1 hereof (other than Section 4.1(a)
hereof) shall be true and correct on and as of the Subsequent Closing Date with
the same effect as though such representations and warranties had been made on
and as of the Subsequent Closing Date.
(c) Performance. Issuer shall have executed and delivered
-----------
certificates representing the Subsequent Shares, and shall have performed and
complied with all agreements, covenants and conditions contained herein and in
any other related document or which are required to be performed or complied
with by Issuer on or before the Subsequent Closing Date.
(d) Proceedings and Documents. All corporate and other proceedings in
-------------------------
connection with the transactions contemplated at the Subsequent Closing and all
documents incident thereto shall be reasonably satisfactory in form and
substance to Purchasers and their counsel, and Purchasers shall have received
all such counterpart original, certified and other copies of such documents as
Purchasers may reasonably request.
(e) No Adverse Action. There shall not have been adopted or enacted
-----------------
any statute, rule or regulation prohibiting or imposing any material condition
on the transactions contemplated by this Agreement, nor shall there have been
instituted or pending any action or proceeding by or before any court or
governmental authority or other regulatory or administrative agency or
commission, domestic or foreign, by any government or governmental authority,
nor shall there be any determination by any government, governmental authority,
regulatory or administrative agency or commission which, in either case, seeks
to restrain, enjoin or impose any material condition on the transactions under
this Agreement or would require Issuer or Purchasers, in the opinion of
Purchasers, to take any action or do anything in connection with the foregoing
that may reasonably be expected to have a material adverse effect to their
respective businesses or materially impair the ownership or operation of all or
a material portion of the business, assets or properties presently owned by
Issuer or any of its Subsidiaries or to be acquired by Purchasers pursuant to
the Reorganization Agreement.
(f) Opinion of Company Counsel. Purchasers shall have received from
--------------------------
Piper & Marbury L.L.P., counsel to Issuer, a legal opinion addressed to
Purchasers, dated as of the Subsequent Closing Date, in the form and substance
reasonably satisfactory to Purchasers.
(g) Consents. All consents, approvals and authorizations of, and
--------
filings, registrations and qualifications with, any governmental authority or
any other party on the part of Issuer required in connection with the
consummation of the transactions contemplated hereby shall have been obtained or
made and shall be in full force and effect.
(h) Secretary's Certificate. Purchasers shall have received a
-----------------------
Certificate of the Secretary of Issuer (i) certifying that no document has been
filed relating to or affecting the Charter of Issuer after the date of the
Certificate of the Secretary of State of the State of Delaware delivered
21
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pursuant to clause (iii) of this subsection, (ii certifying the names and true
signatures of each officer of Issuer who has been authorized to execute and
deliver this Agreement and any other document delivered by Issuer pursuant to
the Subsequent Closing, (ii attaching thereto a copy of the Charter certified as
of a recent date by the Secretary of State of Delaware, and a true and complete
copy of Bylaws of Issuer, as in full force and effect at the Subsequent Closing
Date and (iv attaching copies of resolutions duly adopted by the Board of
Directors (and stockholders, if applicable) authorizing the execution and
delivery of this Agreement and each of the other documents delivered by Issuer
pursuant to the Subsequent Closing, the issuance, delivery and sale of the
Subsequent Shares and the performance of the transactions contemplated by this
Agreement, and certifying that such resolutions were duly adopted, are in full
force and effect and have not been rescinded or amended as of the Subsequent
Closing Date.
(i) Additional Documents. Purchasers shall have received such
--------------------
certificates, documents and information as they may reasonably request in order
to establish satisfaction of the conditions set forth in this Section 9.3.
SECTION 9.4 Conditions to Issuer's Obligations at the Subsequent
----------------------------------------------------
Closing.
(a) Representations and Warranties. The representations and
------------------------------
warranties of each Purchaser contained in Article V hereof shall be true and
correct on and as of the Subsequent Closing.
(b) Payment of Purchase Price. VoiceStream and HPCS shall have
-------------------------
delivered the purchase price for their respective Subsequent Shares in
accordance with Section 2.2.
(c) Consents. All consents, approvals and authorizations of, and
--------
filings, registrations and qualifications with, any governmental authority or
any other party on the part of Purchasers required in connection with the
consummation of the transactions contemplated hereby shall have been obtained or
made and shall be in full force and effect.
X TERMINATION
SECTION 10.1 Termination. This Agreement may be terminated:
-----------
(a) by mutual written agreement of the parties hereto; or
(b) by either Issuer or Purchasers upon consummation of the
transactions contemplated by the Reorganization Agreement.
SECTION 10.2 Effect of Termination. If this Agreement is terminated
---------------------
pursuant to Section 10.1, this Agreement shall become void and of no effect
without liability of any party (or
22
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any stockholder, director, officer, employee, agent, consultant or
representative of such party) to the other parties hereto, except that (a) the
agreements set forth in Article VI (Board of Directors), Article VII
(Registration Rights), and Section 8.3 (Standstill) shall survive the
termination of this Agreement and shall terminate in accordance with the terms,
if any, set for in such Section or Article. No such termination shall relieve
any Party of any liability or damages resulting from any breach by such party of
this Agreement.
SECTION 10.3 Fees and Expenses. All costs and expense incurred in
-----------------
connection with this Agreement shall be paid by the party incurring such cost or
expense whether or not the transactions contemplated hereby occur.
XI MISCELLANEOUS
SECTION 11.1 Notices. All notices, requests and other communications to
-------
any party hereunder shall be in writing (including facsimile transmission) and
shall be given,
if to VoiceStream, to:
3650 131 Avenue SE
Bellevue, Washington 98006
Attention: Alan R. Bender, Esq.
Fax: (425) 586-8080
with a copy to:
Friedman Kaplan & Seiler llp
875 Third Avenue
New York, New York 10022
Attention: Barry A. Adelman, Esq.
Fax: (212) 355-6401
it to HPCS, to:
Hutchison Telecommunications PCS (USA) Limited
c/o Offshore Incorporations Limited
P.O. Box 957
Offshore Incorporations Centre
Road Town, Tortola
British Virgin Islands
Telephone No.: 809-494-2233
Facsimile No.: 809-494-4885
23
<PAGE>
and:
Hutchison Telecommunications Limited
22nd Floor, Hutchison
10 Harcourt Road
Hong Kong
Attention: Ms. Edith Shih
Facsimile No.: 852-2128-1778
with a copy to:
Dewey Ballantine, LLP
Suite 3907
Asia Pacific Finance Tower
Citibank Plaza, 3 Garden Road
Central Hong Kong
Attention: John A. Otoshi, Esq.
Facsimile No.: 852-2509-7088
if to Issuer, to:
Omnipoint Corporation
Three Bethesda Metro Center
Suite 400
Bethesda, MD 20814
Attention: (301) 951-2500
Fax: (301) 951-2518
with copies to:
Piper & Marbury L.L.P.
1200 Nineteenth Street, N.W.
Washington, D.C. 20036
Attention: Edwin M. Martin, Jr., Esq.
Fax: (202) 233-2085
or such other address or facsimile number as such party may hereafter specify
for the purpose by notice to the other parties hereto. All such notices,
requests and other communications shall be deemed received on the date of
receipt by the recipient thereof if received prior to 5:00 p.m. on a
24
<PAGE>
Business Day, in the place of receipt. Otherwise, any such notice, request or
communication shall be deemed not to have been received until the next
succeeding Business Day in the place of receipt.
SECTION 11.2 Survival of Warranties. The warranties, representations,
----------------------
certifications and covenants of Issuer and Purchasers contained in or made
pursuant to this Agreement shall survive each of (a) the execution and delivery
of this Agreement, (b) the Initial Closing, and (c) the Subsequent Closing and
shall in no way be affected by any investigation of the subject matter thereof
made by or on behalf of Purchasers.
SECTION 11.3 Indemnification. Issuer agrees to indemnify each of the
---------------
Purchasers and their respective Affiliates, and the shareholders, members,
managers, officers, employees, agents and or legal representatives of any of
them (each, and "Indemnified Party") and to hold each Indemnified Party
harmless from and against any and all direct or indirect liabilities, claims,
losses, damages, costs and expenses of any kind (including, without limitation,
the reasonable fees and disbursements of such Indemnified Party's counsel in
connection with any investigative, administrative or adjudicative proceeding,
whether or not either Purchaser shall be designated a party thereto), together
with any and all costs and expenses associated with the investigation of the
same and/or the enforcement of the provisions hereof (collectively, "Losses"),
which may be incurred by such Indemnified Party relating to, based upon,
resulting from or arising out of (a) the breach by Issuer of any representation,
warranty, covenant or agreement of Issuer contained herein, (b) this Agreement
or the transactions contemplated hereby, subject, in the case of the
registration rights described in Article VII, to the provisions set forth in
Section 7.8, or (c) any actual or proposed use of the proceeds of the sale of
any of the Preferred Stock. Issuer shall reimburse each Indemnified Party
promptly for all such Losses as they are incurred by such Indemnified Party.
SECTION 11.4 Amendments; No Waivers.
----------------------
(a) Subject to applicable law, any provision of this Agreement may be
amended or waived, but only if, such amendment or waiver is in writing and is
signed, in the case of an amendment, by each party to this Agreement or, in the
case of a waiver, by each party against whom the waiver is to be effective.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 11.5 Successors and Assigns. The provisions of this Agreement
----------------------
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the consent of each other party hereto.
25
<PAGE>
SECTION 11.6 Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of Delaware, without regard
to the conflicts of law rules of such State.
SECTION 11.7 Jurisdiction. Any suit, action or proceeding seeking to
------------
enforce any provision of, or based on any matter arising out of or in connection
with, this Agreement or the transactions contemplated hereby shall be brought in
any federal court located in the State of Delaware or any Delaware state court,
and each of the parties hereby consents to the exclusive jurisdiction of such
courts (and of the appropriate appellate courts therefrom) in any such suit,
action or proceeding and irrevocably waives, to the fullest extent permitted by
law, any objection that it may now or hereafter have to the laying of the venue
of any such suit, action or proceeding in any such court or that any such suit,
action or proceeding brought in any such court has been brought in an
inconvenient forum. Process in any such suit, action or proceeding may be served
on any party anywhere in the world, whether within or without the jurisdiction
of any such court.
SECTION 11.8 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
--------------------
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
SECTION 11.9 Counterparts; Effectiveness. This Agreement may be signed
---------------------------
in any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective when each party hereto shall have received
counterparts hereof signed by all of the other parties hereto.
SECTION 11.10 Entire Agreement; No Third Party Beneficiaries. This
----------------------------------------------
Agreement constitutes the entire agreement between the parties with respect to
the subject matter of this Agreement and supersedes all prior agreements and
understandings, both oral and written, between the parties with respect to the
subject matter of this Agreement. Except as specifically set forth herein, this
Agreement is not intended to confer upon any Person other than the parties
hereto any rights or remedies.
SECTION 11.11 Captions. The captions herein are included for convenience
--------
of reference only and shall be ignored in the construction or interpretation
hereof.
SECTION 11.12 Severability. If any term, provision, covenant or
------------
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any party. Upon such
a determination, the parties shall negotiate in
26
<PAGE>
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner so that the transactions
contemplated hereby be consummated as originally contemplated to the fullest
extent possible.
SECTION 11.13 Specific Performance. The parties hereto agree that
--------------------
irreparable damage would occur if any provision of this Agreement were not
performed in accordance with the terms hereof and that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
or to enforce specifically the performance of the terms and provisions hereof in
any federal court located in the State of Delaware or any Delaware state court,
in addition to any other remedy to which they are entitled at law or in equity.
27
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
VOICESTREAM WIRELESS CORPORATION
By: /s/ John W. Stanton
-------------------------------------
Name: John W. Stanton
Title: Chairman
HUTCHISON TELECOMMUNICATIONS PCS (USA)
LIMITED
By: /s/ Frank Sixt
-------------------------------------
Name: Frank Sixt
Title: Director
OMNIPOINT CORPORATION
By: /s/ Douglas G. Smith
-------------------------------------
Name: Douglas G. Smith
Title: Chairman, President and CEO
<PAGE>
EXHIBIT 99.1
[LOGO OF OMNIPOINT APPEARS HERE]
- --------------------------------------------------------------------------------
NEWS! OMNIPOINT COMMUNICATIONS
16 Wing Drive, Cedar Knolls, New Jersey 07927
Telephone: 973 290-2400
Website: www.omnipoint.com
Omnipoint Contact: Laura Knight VoiceStream Contact: Ken Prussing
Omnipoint Investor Relations VoiceStream Investor Relations
(301) 951-2517 (425) 586-8072
[email protected] [email protected]
VoiceStream Wireless and Omnipoint Announce Merger
Agreement to Merge at 0.825 VoiceStream Shares Plus $8 in Cash for Each
Omnipoint Share Hutchison Telecommunications Limited Invests
Additional $957 Million
BELLEVUE, Wash./BETHESDA, Md--June 23, 1999--Voicestream Wireless Corporation
(Nasdaq:VSTR - news), and Omnipoint Corporation (Nasdaq:OMPT - news) announced
today that their respective Boards of Directors have unanimously approved a
definitive agreement to merge.
VoiceStream also announced today that Hutchison Telecommunications PCS (USA)
Limited (Hutchison USA), a subsidiary of Hutchison Telecommunications Limited
and a shareholder in VoiceStream, has committed to make an additional cash
investment of $957 million into the combined company. In addition, VoiceStream
announced today that Cook Inlet Region Inc. (CIRI) has agreed to make an
investment in a newly created joint venture owned 50.1% by CIRI and 49.9% by
VoiceStream, in order to acquire the designated entity licenses held by
Omnipoint Corporation.
The total value of these transactions is over $9 billion.
``The combination of VoiceStream Wireless and Omnipoint brings together two
major providers of GSM (Global System for Mobile Communications) in the United
States making the combined company one of the largest licensees in the world
employing GSM technology'' said John W. Stanton, chairman and chief executive
officer of VoiceStream Wireless.
``After the merger the combined company, together with CIRI, will have licenses
to provide service to over 175 million people with operating systems from New
York to Hawaii. With licenses in 17 of the top 25 markets, the combined company
together with CIRI will be one of the major providers of telecommunications
services in the country.''
``This merger brings together two great companies, Omnipoint and VoiceStream''
said Doug Smith, chairman and chief executive officer of Omnipoint. ``The
combined company provides service to over one million customers. As the second
largest PCS license holder and the fourth largest wireless company in the United
States in terms of people in licensed areas, the combined company will reap the
benefits of increased scale and scope. The combination of our two companies will
be beneficial for consumers and will create opportunities for both employees as
well as shareholders as the new business competes in the telecommunications
marketplace.''
<PAGE>
``Hutchison owns interests in wireless systems in twelve countries in five
continents. We made our initial investment in VoiceStream in 1997'' a Hutchison
Whampoa spokesman said. ``Through our association with VoiceStream Wireless we
are excited about this unique opportunity to participate in the current rapid
growth in wireless telecommunications in the United States. The U.S. mobile
market is one of the largest and most exciting growth opportunities in the world
today for digital mobile communications. Following the merger, VoiceStream will
be the largest GSM operator in the country. As VoiceStream's largest shareholder
both before and after the merger, the investment represents a significant step
in expanding Hutchison's global presence in the mobile communications
business.''
``We are excited to participate in this transaction with VoiceStream and
Omnipoint,'' said Carl H. Marrs, president and chief executive officer of CIRI.
``With this transaction, and the recent PCS auction results, CIRI becomes one of
the nation's most significant Designated Entity providers of PCS service. This
helps fulfill the FCC's and Congress' goals for this important program.''
VoiceStream and Omnipoint Merger
VoiceStream Wireless and Omnipoint Corporation will enter into a merger in which
VoiceStream will exchange 0.825 shares of VoiceStream common stock plus $8.00 in
cash for every share of Omnipoint common stock. There will be a cash or share
election option available to shareholders of Omnipoint subject to proration.
VoiceStream said that it expects the stock portion of the offer will be tax-free
to Omnipoint shareholders. This merger is subject to shareholder approval as
well as federal, state, and other regulatory approvals including those of the
Federal Communications Commission, and the Department of Justice. Major
shareholders have agreed irrevocably to vote for the merger. VoiceStream also
has committed to invest $150 million in Omnipoint prior to the close of the
merger, including approximately $100 million to be provided immediately. The
merger is expected to close in the fourth quarter of 1999.
Hutchison USA Investment
Hutchison USA will be making an investment of $957 million into the combined
company for common and convertible preferred securities. The preferred provides
for a 2.5% cumulative dividend payable at maturity (40 years) and if converted
all accrued dividends will be canceled. A component of this investment will be
used as interim financing to purchase $150 million of convertible preferred
stock of Omnipoint on the same terms as VoiceStream, of which approximately $100
million will be provided immediately, which upon closing will be converted into
equity of VoiceStream. The remaining $807 million will be invested into the
combined company upon the closing of the merger. Hutchison USA is currently the
largest shareholder of VoiceStream stock, owning 24% of the company. Pro forma
for the merger and its additional investment, Hutchison USA will own
approximately 30% of the combined company on the exercise of certain conversion
rights.
CIRI Investment
CIRI and VoiceStream will form new joint ventures to acquire certain designated
entity communications licenses from Omnipoint upon closing of the merger. CIRI
will own 50.1% interest and VoiceStream will own the remaining 49.9% of the
ventures. CIRI and VoiceStream have two existing joint ventures and have been
successfully working together since 1995.
Management
John W. Stanton will remain the chairman and chief executive officer of
VoiceStream. Doug Smith, the current chairman of Omnipoint, will become a vice
chairman of VoiceStream, will continue as chairman of Omnipoint Technologies,
and will also lead the development of a wireless data strategy for the combined
company.
<PAGE>
Based in Bellevue, Wash., VoiceStream Wireless Corp. is a leading provider of
wireless communications services in the western United States including Denver,
Phoenix, Seattle, Salt Lake City, and Portland. VoiceStream Wireless currently
provides personal communications service using the globally dominant GSM
technology in eleven U.S. markets. In conjunction with joint ventures,
VoiceStream currently provides PCS service in four additional markets. Goldman,
Sachs & Co. acted as advisor to VoiceStream Wireless.
Founded in 1987, Omnipoint is a leader in commercializing PCS. Omnipoint
currently provides advanced wireless communications services in the eastern
United States, including New York, Philadelphia, Boston, Miami, and Detroit.
Omnipoint Technologies, Inc. is a leading developer and supplier of wireless
communication technologies, products and engineering services. Allen & Company
and Lehman Brothers acted as advisors to Omnipoint Corporation.
Hutchison Whampoa Limited, a conglomerate headquartered in Hong Kong, is engaged
in five core businesses: telecommunications; ports and related services;
property development and holdings; retail, manufacturing and other services; and
energy and infrastructure. In the international telecom arena, Hutchison owns
approximately 44% of Orange plc, which operates the fastest growing PCS network
in the United Kingdom and telecom businesses in France, Germany, Switzerland,
Austria and Belgium. Hutchison also operates telecom businesses in Hong Kong,
Australia, Israel, India, Singapore, Thailand, Malaysia, Indonesia, Sri Lanka
and Ghana. Chase Securities Inc. acted as advisor to Hutchison USA.
CIRI, based in Anchorage, Alaska, is an Alaska Native regional corporation with
investments in nationwide communications, tourism, real estate, and construction
and equipment services. CIRI is owned by 6,900 Alaska Native shareholders of
Eskimo, Indian, and Aleut descent.
###
