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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
------------------
FORM 8-K
CURRENT REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report:
October 22, 1999
East/West Communications, Inc.
------------------------------
(Exact Name of Registrant as
Specified in Charter)
0-23127
-------
(Commission File No.)
13-3964837
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(IRS Employer
Identification No.)
Delaware
--------
(State or Other Jurisdiction
of Incorporation)
350 Stuyvesant Avenue
Rye, New York 10580
(Address of Principal
Executive Offices)
(914) 921-6300
--------------
(Registrant's telephone
number, including area code)
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ITEM 5. OTHER EVENTS
MERGER
On October 22, 1999, East/West Communications, Inc., a Delaware
corporation ("East/West"), and Omnipoint Corporation, a Delaware corporation
("Omnipoint"), entered into an Agreement and Plan of Merger (the "Omnipoint
Merger Agreement"), pursuant to which, among other things, East/West will merge
with and into Omnipoint, which will be the surviving corporation in the merger
(the "Omnipoint Merger").
Omnipoint is also a party to an Agreement and Plan of Reorganization
(the "VoiceStream Merger Agreement"), dated as of June 23, 1999, by and among
Omnipoint, VoiceStream Wireless Corporation, a Washington corporation
("VoiceStream"), and VoiceStream Wireless Holding Corporation, a Delaware
corporation ("VoiceStream Holdings"), pursuant to which Omnipoint will be merged
with a newly formed, wholly-owned subsidiary of VoiceStream Holdings (the
"VoiceStream Merger"), and each share of common stock of Omnipoint will be
converted into the right to receive 0.825 shares of common stock of VoiceStream
Holdings and $8.00 in cash, subject to the right of the holders of outstanding
shares of Omnipoint common stock to elect to receive stock and cash
consideration in different proportions.
It is anticipated that the Omnipoint Merger will be consummated
immediately prior to the VoiceStream Merger. Under the terms and conditions of
the Omnipoint Merger Agreement, if the Omnipoint Merger is consummated prior to
the VoiceStream Merger, (i) in the Omnipoint Merger, each outstanding share of
Class A Common Stock and Class B Common Stock of the East/West (collectively,
the "East/West Common Stock") will be converted into one share of
newly-authorized Series E Preferred Stock of Omnipoint (the "Series E Preferred
Stock") and (ii) each share of Series E Preferred Stock received by the holders
of the East/West Common Stock in the Omnipoint Merger will be converted in the
VoiceStream Merger into (x) 0.825 shares of common stock of VoiceStream Holdings
and $8.00 in cash (the "Standard Election Consideration"), multiplied by (y) a
conversion ratio (the "Conversion Ratio") equal to 1,775,000, divided by the
number of shares of East/West Common Stock outstanding immediately prior to
consummation of the Omnipoint Merger. Currently, there are 4,739,374 shares of
East/West Common Stock issued and outstanding.
Under the terms of the Omnipoint Merger Agreement, if the
VoiceStream Merger occurs prior to the consummation of the Omnipoint Merger,
each share of East/West Common Stock will be converted into the right to receive
(x) the Standard Election Consideration, multiplied by (y) the Conversion Ratio.
If the VoiceStream Merger Agreement is terminated prior to the consummation of
the Omnipoint Merger each share of East/West Common Stock will be converted in
the Omnipoint Merger into (x) one share of Omnipoint Common Stock, multiplied by
(y) the Conversion Ratio. Under the terms and conditions of the Omnipoint Merger
Agreement, each outstanding share of preferred stock of East/West will be
converted into the right to receive in all events cash in the amount of $1,000
per share, plus accrued dividends.
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Consummation of the Omnipoint Merger and the VoiceStream Merger are
subject to satisfaction of numerous conditions, including, without limitation,
receipt of requisite governmental approvals.
SECURITIES PURCHASE
Concurrently with the execution of the Omnipoint Merger Agreement,
East/West and Omnipoint entered into a Securities Purchase Agreement (the
"Securities Purchase Agreement"), dated as of October 22, 1999, pursuant to
which Omnipoint bought from East/West, and East/West issued to Omnipoint,
300,000 shares of Class A Common Stock of East/West (the "Omnipoint Acquired
Shares") for the purchase price of $3,000,000. Pursuant to the terms and
conditions of the Securities Purchase Agreement, East/West granted to Omnipoint
a right of first refusal with respect to the sale, exchange or other disposition
of the PCS licenses held by East/West. Omnipoint's right of first refusal will
be in effect for a period of two years after any termination of the Omnipoint
Merger Agreement.
VOTING AGREEMENT
Concurrently with the execution of the Omnipoint Merger Agreement,
East/West, Omnipoint, and Aer Force Communications, Inc. (the "Class B Common
Shareholder"), the holder of all of the issued and outstanding shares of Class B
Common Stock of East/West, entered into a Voting Agreement (the "Voting
Agreement"), dated as of October 22, 1999, pursuant to which the Class B Common
Shareholder has agreed to (i) to vote all the shares beneficially owned by such
person in favor of adoption and approval of the Omnipoint Merger Agreement, the
Omnipoint Merger, and any other matters necessary to consummate the Omnipoint
Merger and (ii) for a time period between the execution of the Omnipoint Merger
Agreement and the termination of the Omnipoint Merger Agreement, not to sell,
transfer, pledge, encumber or dispose any shares beneficially owned by the Class
B Common Shareholder.
SIDE AGREEMENT
Concurrently with the execution of the Omnipoint Merger Agreement,
East/West, Omnipoint, VoiceStream, and VoiceStream Holdings entered into an
Agreement (the "Side Agreement"), dated as of October 22, 1999, pursuant to
which (i) VoiceStream consented to the Omnipoint Merger Agreement and the
transactions contemplated thereby, (ii) Omnipoint, VoiceStream, and VoiceStream
Holdings agreed to amend the VoiceStream Merger Agreement to effectuate the
Omnipoint Merger, and (iii) Omnipoint, VoiceStream, and VoiceStream agreed to
the recapitalization of the outstanding Omnipoint preferred stock.
The summary of the transactions described above are, in each case,
qualified in their entirety by reference to the Omnipoint Merger Agreement, the
VoiceStream Merger
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Agreement, the Securities Purchase Agreement, the Voting Agreement, and the Side
Agreement, copies of which are exhibits hereto or incorporated by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL
INFORMATION AND EXHIBITS
(a) - (b) Not applicable.
(c) Exhibits.
2.1 Agreement and Plan of Merger, dated as of October 22, 1999, by and among
Omnipoint Corporation and East/West Communications, Inc.
2.2 Securities Purchase Agreement, dated as of October 22, 1999, by and
among East/West Communications, Inc. and Omnipoint Corporation.
9.1 Voting Agreement, dated as of October 22, 1999, by and among East/West
Communications, Inc., Omnipoint Corporation, and certain stockholders
of East/West Communications, Inc.
10.1 Agreement, dated as of October 22, 1999, by and among East/West
Communications, Inc., Omnipoint Corporation, VoiceStream Wireless
Corporation, and VoiceStream Wireless Holding Corporation.
99.1 Press Release, dated October 22, 1999.
99.2 Agreement and Plan of Reorganization by and among Omnipoint Corporation,
VoiceStream Wireless Corporation and VoiceStream Wireless Holding
Corporation, dated as of June 23, 1999.
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SIGNATURE
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 hereunto duly authorized.
East/West Communications, Inc.
By: /s/ Victoria G. Kane
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Name: Victoria G. Kane
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Title: Chief Executive Officer
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Date: November 5, 1999
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EXHIBIT INDEX
* 2.1 Agreement and Plan of Merger, dated as of October 22, 1999, by
and among Omnipoint Corporation and East/West Communications, Inc.
* 2.2 Securities Purchase Agreement, dated as of October 22, 1999, by
and among East/West Communications, Inc. and Omnipoint Corporation.
* 9.1 Voting Agreement, dated as of October 22, 1999, by and among
East/West Communications, Inc., Omnipoint Corporation, and certain
stockholder of East/West Communications, Inc.
* 10.1 Agreement, dated as of October 22, 1999, by and among East/West
Communications, Inc., Omnipoint Corporation, VoiceStream Wireless
Corporation, and VoiceStream Wireless Holding Corporation.
* 99.1 Press Release, dated October 22, 1999.
99.2 Agreement and Plan of Reorganization by and among Omnipoint
Corporation, VoiceStream Wireless Corporation and VoiceStream
Wireless Holding Corporation, dated as of June 23, 1999,
incorporated by reference to Exhibit 2.1 to Omnipoint Corporation's
Form 8-K filed with the Commission on July 2, 1999.
* Filed herewith.
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EXHIBIT 2.1
EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
dated as of
October 22, 1999
by and between
OMNIPOINT CORPORATION
and
EAST/WEST COMMUNICATIONS, INC.
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TABLE OF CONTENTS
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ARTICLE 1 DEFINITIONS.....................................................................................1
SECTION 1.1 Definitions...................................................................................1
ARTICLE 2 THE MERGER; CLOSING............................................................................10
SECTION 2.1 The Mergers..................................................................................10
SECTION 2.2 Directors....................................................................................11
SECTION 2.3 Certificate of Incorporation and Bylaws......................................................11
SECTION 2.4 Officers.....................................................................................11
ARTICLE 3 EFFECT OF THE MERGER ON SECURITIES OF OMNIPOINT AND THE COMPANY...............................11
SECTION 3.1 Company Capital Stock........................................................................11
SECTION 3.2 Adjustments.................................................................................12
SECTION 3.3 Surrender and Payment........................................................................12
SECTION 3.4 Exchange Agent Instructions..................................................................14
SECTION 3.5 Dissenting Shares............................................................................14
SECTION 3.6 Withholding Rights...........................................................................15
SECTION 3.7 Lost Certificates............................................................................15
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE COMPANY..................................................15
SECTION 4.1 Corporate Existence and Power................................................................15
SECTION 4.2 Corporate Authorization......................................................................15
SECTION 4.3 Governmental Authorization...................................................................16
SECTION 4.4 FCC Matters..................................................................................17
SECTION 4.5 Non-contravention............................................................................17
SECTION 4.6 Capitalization...............................................................................18
SECTION 4.7 Subsidiaries; Investments....................................................................19
SECTION 4.8 SEC Filings..................................................................................19
SECTION 4.9 Financial Statements.........................................................................19
SECTION 4.10 Absence of Certain Changes...................................................................19
SECTION 4.11 No Undisclosed Material Liabilities..........................................................20
SECTION 4.12 Compliance with Laws and Court Orders........................................................20
SECTION 4.13 Litigation...................................................................................20
SECTION 4.14 Finders' Fees/Placement Fee..................................................................21
SECTION 4.15 Taxes........................................................................................21
SECTION 4.16 Tax Opinions.................................................................................23
SECTION 4.17 Employee Benefit Plans.......................................................................23
SECTION 4.18 Environmental Matters; Real Property.........................................................23
SECTION 4.19 Intellectual Property........................................................................24
SECTION 4.20 Contracts....................................................................................24
SECTION 4.21 Employment Matters...........................................................................25
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SECTION 4.22 Vote Required................................................................................25
SECTION 4.23 Antitakeover Statutes and Charter Provisions.................................................25
SECTION 4.24 Insurance....................................................................................25
SECTION 4.25 Bank Accounts; Power of Attorney.............................................................25
SECTION 4.26 Transactions with Affiliates.................................................................26
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF OMNIPOINT....................................................26
SECTION 5.1 Corporate Existence and Power...............................................................26
SECTION 5.2 Corporate Authorization.....................................................................26
SECTION 5.3 Governmental Authorization...................................................................27
SECTION 5.4 Non-contravention............................................................................27
SECTION 5.5 SEC Filings..................................................................................28
SECTION 5.6 Financial Statements.........................................................................28
SECTION 5.7 Absence of Certain Changes...................................................................28
SECTION 5.8 Compliance with Laws and Court Orders........................................................29
SECTION 5.9 Litigation...................................................................................29
SECTION 5.10 FCC Matters..................................................................................29
SECTION 5.11 No Undisclosed Material Liabilities..........................................................30
SECTION 5.12 Capitalization...............................................................................30
SECTION 5.13 Finders' Fees................................................................................31
SECTION 5.14 Taxes........................................................................................31
SECTION 5.15 Tax Opinions.................................................................................32
SECTION 5.16 Transactions with Affiliates.................................................................33
SECTION 5.17 Intellectual Property........................................................................33
SECTION 5.18 VoiceStream Merger Agreement.................................................................33
ARTICLE 6 COVENANTS OF THE COMPANY.......................................................................33
SECTION 6.1 Interim Operations...........................................................................33
SECTION 6.2 Equity Issuances by the Company..............................................................36
SECTION 6.3 No Solicitation..............................................................................38
SECTION 6.4 Access to Information........................................................................39
SECTION 6.5 Confidentiality..............................................................................39
SECTION 6.6 Payment of Company Fees......................................................................40
ARTICLE 7 COVENANTS OF OMNIPOINT.........................................................................40
SECTION 7.1 Director and Officer Liability...............................................................40
SECTION 7.2 Certificate of Designations for Series E Preferred Stock.....................................41
ARTICLE 8 COVENANTS OF THE PARTIES.......................................................................41
SECTION 8.1 Best Efforts.................................................................................41
SECTION 8.2 Registration Statement and Information Statement .................... .......................43
SECTION 8.3 Public Announcements.........................................................................44
SECTION 8.4 Further Assurances...........................................................................44
SECTION 8.5 Notices of Certain Events....................................................................44
SECTION 8.6 Tax-free Treatment...........................................................................45
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SECTION 8.7 Stockholders' Approval.......................................................................45
ARTICLE 9 CONDITIONS TO THE MERGER.......................................................................46
SECTION 9.1 Conditions to the Obligations of Each Party..................................................46
SECTION 9.2 Conditions to the Obligations of Omnipoint...................................................47
SECTION 9.3 Conditions to the Obligations of the Company.................................................48
ARTICLE 10 TERMINATION....................................................................................49
SECTION 10.1 Termination..................................................................................49
SECTION 10.2 Effect of Termination........................................................................51
SECTION 10.3 Fees and Expenses............................................................................51
ARTICLE 11 MATTERS RELATING TO THE VOICESTREAM MERGER.....................................................51
SECTION 11.1 Effect of the VoiceStream Merger on Securities of Omnipoint .................................51
SECTION 11.2 Other Matters ...............................................................................58
ARTICLE 12 MISCELLANEOUS..................................................................................58
SECTION 12.1 Notices......................................................................................58
SECTION 12.2 Reliance on Representations..................................................................59
SECTION 12.3 Intentionally Omitted........................................................................59
SECTION 12.4 Amendments; No Waivers.......................................................................59
SECTION 12.5 Successors and Assigns.......................................................................60
SECTION 12.6 Governing Law................................................................................60
SECTION 12.7 Jurisdiction.................................................................................60
SECTION 12.8 WAIVER OF JURY TRIAL.........................................................................60
SECTION 12.9 Counterparts; Effectiveness..................................................................60
SECTION 12.10 Entire Agreement; No Third Party Beneficiaries ..............................................61
SECTION 12.11 Captions ....................................................................................61
SECTION 12.12 Severability ................................................................................61
SECTION 12.13 Intentionally Omitted .......................................................................61
SECTION 12.14 Schedules ...................................................................................61
SECTION 12.15 VoiceStream Actions .........................................................................62
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EXHIBITS AND SCHEDULES
Exhibit A Form of Certificate of Designation
Omnipoint Disclosure Schedules
Company Disclosure Schedules
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of October 22,
1999, by and between Omnipoint Corporation, a Delaware corporation
("Omnipoint"), and East/West Communications, Inc., a Delaware corporation (the
"Company"). Omnipoint and the Company are referred to herein as the "Parties.
RECITALS
A. The respective Boards of Directors of Omnipoint and the Company each
have approved, and deem it advisable and in the best interests of their
respective companies and stockholders to consummate, the Merger provided for
herein, pursuant to which the Company will merge with and into Omnipoint.
Holders of the Company's Class A Common Stock, par value $0.0001 per share (the
"Class A Common Stock"), and the Company's Class B Common Stock, par value
$0.0001 per share (the "Class B Common Stock" and collectively with the Class A
Common Stock, the "Company Common Stock"), will receive shares of Series E
Preferred Stock in exchange for their shares, as provided herein, and holders of
the Company's Preferred Stock, par value $1,000 per share (the "Company
Preferred Stock"), will receive cash in exchange for their shares.
B. For federal income tax purposes, it is intended that the Merger
pursuant to Section 2.1 qualify as a reorganization described in Section 368(a)
of the United States Internal Revenue Code of 1986, as amended (the "Code").
C. Each of Omnipoint and the Company 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.
(a) The following terms, as used herein, have the following meanings:
"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 the Company;
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(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 the Company, 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 Company, in each case, 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 any of the events referred to in clauses (i) or (ii) of this definition,
provided, however, that the term "Acquisition Proposal" shall not include any
offer, proposal, or indication of interest related to any transaction permitted
by Section 6.2.
"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.
"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; and (iii) covers any employee or former employee of such Person or
any of its Subsidiaries employed in the United States.
"Business Day" means a day other than a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
close.
"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).
"Company Balance Sheet" means the Balance Sheet of the Company as of
December 31, 1998 and the footnotes thereto set forth in the Company 10-K.
"Company Balance Sheet Date" means December 31, 1998.
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"Company Disclosure Schedules" means the disclosure schedules of the
Company attached hereto.
"Company Material Adverse Effect" means a material adverse effect on the
business, financial condition, assets or results of operations of the Company,
excluding any such effect resulting from or arising in connection with: (i) the
entering into or performance of this Agreement, the Transactions, the Investment
Transaction or the announcement thereof; (ii) changes or conditions generally
affecting the industry in which the Company operates or intends to operate; or
(iii) changes in general economic, regulatory or political conditions. For the
purposes of Section 9.1(d), clause (i) of the previous sentence shall not be
excluded from the definition of Company Material Adverse Effect.
"Company 10-K" means the Company's annual report on Form 10-K for the
fiscal year ended December 31, 1998.
"Convertible Preferred Stock" means 7% Cumulative Convertible Preferred
Stock, par value $1,000 per share, of Omnipoint.
"Delaware Law" means the Delaware General Corporation Law.
"Disclosure Schedules" means collectively, the Company Disclosure
Schedules and the Omnipoint Disclosure Schedules.
"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; and (iii) covers any employee or former
employee of such Person.
"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.
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"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.
"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 FCC
Applications referred to in Section 8.1(b) of this Agreement required to permit
the consummation of the Transactions.
"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.
"Gabelli" means Gabelli & Company, Inc.
"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 a Governmental Body 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.
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"Indebtedness" of any Person at any date means: (a) all indebtedness of
such Person for borrowed money or for the deferred purchase price or costs 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
(other than any interest in any bank account, certificate of deposit, money
market account, treasury bill or similar security or investment); (iii) any
revenue or profit interests in any Person 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 clauses (i), (ii) or (iii) of this
definition.
"Investment Transaction" means the transactions contemplated by the
Securities Purchase Agreement by and between Omnipoint and the Company.
"IRS" means the Internal Revenue Service.
"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.
"Latham & Watkins" means Latham & Watkins.
"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 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.
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"Multiemployer Plan" means each Employee Plan, including for this purpose
any "employee pension benefit plan" (as defined in Section 3(2) of ERISA) 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, as set forth in the Omnipoint 10-K.
"Omnipoint Balance Sheet Date" means December 31, 1998.
"Omnipoint Common Stock" means the Common Stock, $0.01 par value per
share, of Omnipoint.
"Omnipoint Disclosure Schedules" means the disclosure schedules of
Omnipoint attached hereto.
"Omnipoint Group" means Omnipoint and its Subsidiaries.
"Omnipoint Investment" means an entity in which Omnipoint has an
Investment Interest.
"Omnipoint Material Adverse Effect" means a material adverse effect on
the business, financial condition, 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) the entering into or performance of this
Agreement, the Transactions, the Investment Transaction, 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 9.3(d), clause (i) of the
previous sentence shall not be excluded from the definition of Omnipoint
Material Adverse Effect.
"Omnipoint 10-K" means Omnipoint's annual report on Form 10-K for the
fiscal year ended December 31, 1998.
"Omnipoint Preferred Stock" means collectively, the Convertible Preferred
Stock and the Series A Preferred Stock.
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<PAGE> 12
"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.
"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.
"Securities Purchase Agreement" means that certain Securities Purchase
Agreement dated as of the date hereof by and between the Company and Omnipoint.
"SEC" means the Securities and Exchange Commission and any successor
agency or body.
"Series A Preferred Stock" means the Series A Non-Voting Convertible
Preferred Stock, par value $0.01 per share, of Omnipoint.
"Series E Preferred Stock" means the Series E Preferred Stock, par value
$0.01 per share, of Omnipoint.
"Side Agreement" means that certain Agreement dated as of the date hereof
by and among the Company, VoiceStream, Holdings and Hutchison Telecommunications
PCS (USA) Limited.
"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 Merger" means the mergers contemplated by the VoiceStream
Merger Agreement.
"VoiceStream Merger Agreement" means that certain Agreement and Plan of
Reorganization dated as of June 23, 1999 by and among VoiceStream Wireless
Corporation
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<PAGE> 13
("VoiceStream"), VoiceStream Wireless Holding Corporation ("Holdings"), and
Omnipoint, as in effect on the date hereof.
"Voting Agreement" means that certain Voting Agreement by and among the
Company and certain stockholders of the Company parties thereto.
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>
Additional Company Capital Stock ................................................................................................6.2
Agreement...................................................................................................................Preamble
Certificate of Merger.........................................................................................................2.1(c)
Certificates..................................................................................................................3.3(a)
Class A Common Stock........................................................................................................Preamble
Class B Common Stock........................................................................................................Preamble
Closing.......................................................................................................................2.1(b)
Closing Date..................................................................................................................2.1(b)
Code........................................................................................................................Preamble
Company.....................................................................................................................Preamble
Company Bank Account Information................................................................................................4.25
Company Common Stock........................................................................................................Preamble
Company Fees....................................................................................................................4.14
Company FCC Licenses..........................................................................................................4.4(a)
Company Intellectual Property...................................................................................................4.19
Company Preferred Stock.....................................................................................................Preamble
Company SEC Documents.........................................................................................................4.8(b)
Company Stockholders' Approval..................................................................................................4.22
Conversion Ratio.................................................................................................................3.1
Cure........................................................................................................................12.15(b)
Cure Period.................................................................................................................12.15(b)
Disclosing Party.................................................................................................................6.5
Dissenting Shares................................................................................................................3.5
Effective Time................................................................................................................2.1(c)
Environmental Reports........................................................................................................4.18(b)
Escrow Fund...................................................................................................................6.6(a)
Exchange Agent................................................................................................................3.3(a)
Exchange Amount..................................................................................................................3.1
Exchange Fund.................................................................................................................3.3(a)
FCC Applications..............................................................................................................8.1(b)
Fee Shares....................................................................................................................6.6(b)
Finders' Fees...................................................................................................................4.14
</TABLE>
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<PAGE> 14
<TABLE>
<S> <C>
Former Company Stockholders...................................................................................................3.2(a)
Form S-4.........................................................................................................................8.2
Fully-Diluted .............................................................................................................6.2(b)(1)
GAAP.............................................................................................................................4.9
Holders.......................................................................................................................3.3(a)
Indemnified Losses............................................................................................................7.2(a)
Indemnified Person............................................................................................................7.2(a)
Information Statement/Prospectus.................................................................................................8.2
Issuance......................................................................................................................6.2(a)
Liquidation Value................................................................................................................3.1
Material VoiceStream Action.................................................................................................12.15(a)
Merger........................................................................................................................2.1(a)
Merger Consideration.............................................................................................................3.1
Merger Share Market Value....................................................................................................11.1(a)
Merger Shares....................................................................................................................3.1
1999 Company SEC Documents....................................................................................................4.8(b)
1999 Omnipoint SEC Documents .................................................................................................5.5(b)
Offer Date.................................................................................................................6.2(b)(1)
Omnipoint...................................................................................................................Preamble
Omnipoint FCC Licenses.......................................................................................................5.10(a)
Omnipoint Intellectual Property.................................................................................................5.17
Omnipoint Pre-Issuance Percentage Interest.................................................................................6.2(b)(1)
Omnipoint Post-Issuance Percentage Interest................................................................................6.2(b)(1)
Omnipoint SEC Documents.......................................................................................................5.6(b)
Per Share Exchange Amount........................................................................................................3.1
Placement Fee...................................................................................................................4.14
Preemptive Right..............................................................................................................6.2(b)
Preemptive Right Notice....................................................................................................6.2(b)(1)
Principal Stockholder ......................................................................................................Preamble
Purchased Shares...........................................................................................................6.2(b)(2)
Recapitalization Event........................................................................................................3.2(b)
Related Agreements...........................................................................................................12.5(a)
Shares........................................................................................................................6.2(b)
Surviving Corporation.........................................................................................................2.1(a)
Tax Returns..................................................................................................................4.16(a)
Taxes.........................................................................................................................4.5(a)
Termination Date..........................................................................................................10.1(b)(1)
Transaction Costs............................................................................................................10.3(a)
VoiceStream Action..........................................................................................................12.15(a)
VoiceStream Extended End Date.............................................................................................10.1(b)(1)
VoiceStream Merger Closing Date...............................................................................................2.1(b)
</TABLE>
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<PAGE> 15
(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
THE MERGER; CLOSING
SECTION 2.1 The Merger. Upon the terms and subject to the conditions set
forth in this Agreement:
(a) The Company shall merge with and into Omnipoint (with such merger
referred to herein as the "Merger") at the Effective Time in accordance with the
applicable provisions of Delaware Law. Following the Effective Time, the
separate existence of the Company shall cease, and Omnipoint shall continue as
the surviving corporation of the Merger (the "Surviving Corporation"). The
effects and consequences of the Merger shall be as set forth in this Agreement,
the Certificate of Merger, and under the applicable provisions of Delaware law.
Without limiting the generality of the foregoing, and subject thereto, at the
Effective Time, all the property, rights, privileges, powers and franchises of
the Company and Omnipoint shall vest in the Surviving Corporation, and all
debts, liabilities and duties of the Company and Omnipoint shall become the
debts, liabilities and duties of the Surviving Corporation.
(b) Subject to the terms and conditions of this Agreement and the last
sentence of this paragraph, the closing of the Transactions (the "Closing")
shall take place at the offices of Piper & Marbury, 1200 Nineteenth Street,
N.W., Washington, DC 20036, commencing at 10:00 a.m., local time, on the Closing
Date. The "Closing Date" shall mean (i) in the event that the VoiceStream Merger
Agreement has been terminated prior to satisfaction or waiver of the conditions
set forth in Article 9 (excluding conditions, that by their terms, cannot be
satisfied until the Closing Date), the fifth (5th) Business Day following the
date on which the last of the conditions set forth in Article 9 is satisfied or
waived (excluding conditions that, by their terms, cannot be satisfied until the
Closing Date, but subject to the fulfillment or waiver of such conditions) and
(ii) in the event that the conditions in Article 9 have been satisfied or waived
prior to the termination of the VoiceStream Merger Agreement, the date that is
the earliest of: (A) the date of the closing of the VoiceStream Merger (the
"VoiceStream Merger Closing Date"), provided, that all of the conditions set
forth in Article 9 have been satisfied or waived (excluding conditions that, by
their terms, cannot be satisfied until the Closing Date, but subject to the
fulfillment or waiver of such conditions); (B) the first date after the
VoiceStream Merger Closing
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<PAGE> 16
Date on which all of the conditions set forth in Article 9 have been satisfied
or waived (excluding conditions that, by their terms, cannot be satisfied until
the Closing Date, but subject to the fulfillment or waiver of such conditions);
and (C) the fifth (5th) Business Day after the first date following the date
that the VoiceStream Merger Agreement has been terminated on which the
conditions set forth in Article 9 have been satisfied or waived (excluding
conditions that, by their terms, cannot be satisfied until the Closing Date, but
subject to the fulfillment or waiver of such conditions). The Closing shall take
place immediately prior to, and as part of the same plan as, the consummation of
the VoiceStream Merger, unless (i) the VoiceStream Merger Agreement has been
terminated or (ii) Section 11.1(b) applies.
(c) Subject to the terms and conditions of this Agreement, as soon as
practicable following the Closing, the Parties shall, as applicable: (1) file a
certificate of merger with respect to the Merger (the "Certificate of Merger")
in such form as is reasonably acceptable to each Party and otherwise required by
and executed in accordance with applicable Delaware Law and (2) make all other
filings or recordings required under applicable Delaware Law. The Merger shall
become effective at such time and date (the "Effective Time") which is the date
and time that the Certificate of Merger is duly filed with the Secretary of
State of the State of Delaware, or such other date and time as the Company and
Omnipoint shall agree should be specified in the Certificate of Merger and as
may be permitted by Delaware Law.
SECTION 2.2 Directors. The Board of Directors of Omnipoint immediately
prior to the Effective Time shall be the directors of the Surviving Corporation
as of the Effective Time and until their successors are duly appointed or
elected in accordance with applicable Delaware Law.
SECTION 2.3 Certificate of Incorporation and Bylaws. The certificate of
incorporation and bylaws of Omnipoint immediately prior to the Effective Time
shall be the certificate of incorporation and bylaws of the Surviving
Corporation as of the Effective Time.
SECTION 2.4 Officers. The officers of Omnipoint immediately prior to the
Effective Time shall be the officers of the Surviving Corporation as of the
Effective Time and until their successors are duly appointed or elected in
accordance with applicable Delaware Law.
ARTICLE 3
EFFECT OF THE MERGER ON SECURITIES OF OMNIPOINT
AND THE COMPANY
Subject to Article 11 hereof:
SECTION 3.1 Company Capital Stock. At the Effective Time, by virtue of
the Merger and without any action on the part of any holder of any shares of
Company Common Stock or Company Preferred Stock or any holder of shares of
capital stock of Omnipoint or the
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<PAGE> 17
Parties: (1) subject to Section 3.2, each share of Company Common Stock
(excluding any Dissenting Shares or shares of the Company Common Stock held by
Omnipoint) that is issued and outstanding immediately prior to the Effective
Time shall be converted into the right to receive one share of Series E
Preferred Stock (collectively, the "Merger Shares"); (2) each Dissenting Share
shall be converted into the right to receive payment from the Surviving
Corporation with respect thereto in accordance with Delaware Law; and (3) each
share of Company Preferred Stock that is issued and outstanding immediately
prior to the Effective Time (after giving effect to any redemption of Preferred
Stock contemplated by Section 6.2(b)(2) and Section 1.3 of the Securities
Purchase Agreement) shall be converted into the right to receive the Per Share
Exchange Amount (as defined). The term "Per Share Exchange Amount" shall mean
the Liquidation Value (as defined) of each share of Company Preferred Stock plus
all accrued and unpaid dividends thereon, and the term "Exchange Amount" shall
mean the total of all Per Share Exchange Amounts in the aggregate. The term
"Liquidation Value" shall mean $1,000 per share of Company Preferred Stock. The
Exchange Amount, together with the Merger Shares, is collectively referred to
herein as the "Merger Consideration." At the Effective Time, all such shares of
Company Common Stock and Company Preferred Stock shall be automatically canceled
and retired and cease to exist, and each holder of a Certificate or Certificates
representing any such shares shall cease to have any rights with respect
thereto, except the right to receive the Merger Consideration upon surrender of
such certificates in accordance with this Agreement. Upon such conversion, the
Company Common Stock issued to Omnipoint and outstanding immediately prior to
the Effective Time shall be automatically canceled and retired and cease to
exist. The term "Conversion Ratio" shall mean a fraction, the numerator of which
shall be 1,775,000 and the denominator of which shall be the number of shares of
Company Common Stock issued and outstanding, immediately prior to the Effective
Time.
SECTION 3.2 Adjustments.
If between the date of this Agreement and the Effective Time the
outstanding shares of Omnipoint Common Stock shall have been changed into a
different number of shares, by reason of any stock dividend, subdivision, split
or combination of shares (each, a "Recapitalization Event"), the numerator of
the Conversion Ratio will be correspondingly adjusted to reflect such
Recapitalization Event. Between the date of this Agreement and the Effective
Time, the Company covenants and agrees not to effect or take any action with
respect to a Recapitalization Event with respect to shares of Company Common
Stock or Company Preferred Stock.
SECTION 3.3 Surrender and Payment.
(a) Prior to the Effective Time, Omnipoint shall appoint an agent
reasonably acceptable to the Company (the "Exchange Agent") for the purpose of
exchanging in accordance with Section 3.3(b), a certificate or certificates (the
"Certificates") that, immediately prior to the Effective Time, represented
issued and outstanding shares of Company Common Stock and Company Preferred
Stock which were converted into the right to receive the applicable Merger
Consideration pursuant to Section 3.1. At the Effective Time, Omnipoint will
deposit (or cause
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<PAGE> 18
to be deposited) with the Exchange Agent the Merger Consideration to be
exchanged in respect of such shares (the "Exchange Fund"). Promptly after the
Effective Time, Omnipoint will send, or will cause the Exchange Agent to send to
each holder of record of shares of Company Common Stock and Company Preferred
Stock at the Effective Time (the "Holders"), 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.
(b) Subject to Section 3.5, upon surrender to the Exchange Agent of its
Certificate or Certificates for cancellation, together with a properly completed
letter of transmittal, duly executed, and such other documents as may be
reasonably required by the Exchange Agent, the Holder of such Certificate or
Certificates will be entitled to receive promptly after the Effective Time, the
Merger Consideration in accordance with this Agreement. Until so surrendered,
each such Certificate shall represent after the Effective Time, for all
purposes, only the right to receive the appropriate Merger Consideration in
accordance with this Agreement.
(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) At the Effective Time, there shall be no further registration of
transfers of shares of Company Common Stock or Company Preferred Stock. If,
after the Effective Time, Certificates are presented to the Surviving
Corporation, they shall be canceled and exchanged for the Merger Consideration
provided for, and in accordance with the procedures set forth, in this Article 3
and this Agreement.
(e) Any portion of the Exchange Fund made available to the Exchange Agent
pursuant to Section 3.3(a) that remains unclaimed by the Holders one year after
the Effective Time shall be returned to Omnipoint, upon demand, and any such
Holder who has not exchanged its shares for the Merger Consideration in
accordance with this Section 3.3 prior to that time shall thereafter look only
to Omnipoint for payment of such consideration, any dividends and distributions
in respect of such shares, in each case without any interest thereon.
Notwithstanding the foregoing, Omnipoint shall not be liable to any Holder for
any amounts paid to a public official pursuant to applicable abandoned property,
escheat or similar laws. Any amounts remaining unclaimed by the 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 Omnipoint free and clear of any claims or interest of any Person
previously entitled thereto.
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<PAGE> 19
(f) No dividends or other distributions with respect to any Merger Shares
shall be paid to the Holder of any unsurrendered Certificates until such
Certificates are surrendered as provided in Section 3.3. Following such
surrender, there shall be paid, without interest, to the Person in whose name
such Merger Shares have been registered, (1) at the time of such surrender, the
amount of all dividends or other distributions with a record date after the
Effective Time previously paid or payable on the date of such surrender, with
respect to such Merger Shares, and (2) 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 Merger Shares.
(g) Any portion of the Merger Consideration made available to the
Exchange Agent pursuant to Section 3.3(a) to pay for shares for which appraisal
rights have been perfected shall be returned to Omnipoint upon demand.
(h) All Merger Consideration issued upon the surrender for exchange of
shares of Company Common Stock or Company Preferred Stock, as the case may be,
in accordance with the terms hereof shall be deemed to have been issued in full
satisfaction of all rights pertaining to such shares of Company Common Stock or
Company Preferred Stock.
SECTION 3.4 Exchange Agent Instructions. At the Effective Time, Omnipoint
shall instruct the Exchange Agent to (i) issue the certificates representing the
Merger Shares to the Holders of Certificates that, immediately prior to the
Effective Time, represented issued and outstanding shares of Company Common
STOCK and (ii) pay the Exchange Amount to the Holders of Certificates that,
immediately prior to the Effective time, represented issued and outstanding
shares of Company Preferred Stock; in each case, in accordance with the terms
and conditions of this Article 3.
SECTION 3.5 Dissenting Shares. Notwithstanding Section 3.1, Company
Common Stock issued and outstanding immediately prior to the Effective Time and
held by a Holder who has not voted in favor of the Merger or consented thereto
in writing and who has demanded appraisal for such shares in accordance with
Section 262 of Delaware Law, if such Section 262 provides for appraisal rights
for such shares in the Merger ("Dissenting Shares") shall not be converted into
a right to receive the Merger Shares unless and until such holder fails to
perfect, withdraws or otherwise loses its right to appraisal and payment under
Delaware Law. If, after the Effective Time, any such Holder fails to perfect,
withdraws or loses its right to appraisal, such Dissenting Shares shall be
treated as if they had been converted as of the Effective Time into the right to
receive the Merger Shares, if any, to which such Holder is entitled, without
interest or dividends thereon. The Company shall give Omnipoint prompt notice of
any demands received by the Company for appraisal of shares of Company Common
Stock, and Omnipoint shall have the right to participate in all negotiations and
proceedings with respect to such demands. Except with the prior written consent
of Omnipoint, the Company shall not make any payment with respect to, or settle
or offer to settle, any such demands.
- 14 -
<PAGE> 20
SECTION 3.6 Withholding Rights. Omnipoint and the Company (to the extent
it uses its funds to redeem the Company Preferred Stock) 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 applicable provision of
federal, state, local or foreign tax law. If Omnipoint so withholds amounts,
such amounts shall be treated for all purposes of this Agreement as having been
paid to such Person, as the case may be, in respect of which Omnipoint made such
deduction and withholding.
SECTION 3.7 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 Omnipoint (and, if required by Omnipoint 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 Omnipoint may direct, as indemnity)
indemnifying Omnipoint against any claim that may be made against Omnipoint, the
Surviving Corporation or the Exchange Agent with respect to the Certificate
alleged to have been lost, stolen or destroyed, the Exchange Agent will issue,
in exchange for such lost, stolen or destroyed Certificate, the Merger
Consideration to be paid in respect of the shares represented by such
Certificate in accordance with this Agreement.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as otherwise disclosed in the Company SEC Documents filed with the
SEC prior to the date hereof, the Company represents and warrants to Omnipoint
as follows:
SECTION 4.1 Corporate Existence and Power. The 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. The 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 Company Material Adverse Effect. The Company has
heretofore delivered or made available to Omnipoint true and complete copies of
the certificate of incorporation and bylaws of the Company as currently in
effect.
SECTION 4.2 Corporate Authorization.
(a) The execution, delivery and performance by the Company of this
Agreement and the consummation by the Company of the Transactions are within the
Company's corporate powers and, except for the required approval of the
Company's stockholders of this
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<PAGE> 21
Agreement and the Transactions, have been duly authorized by all necessary
corporate action on the part of the Company. This Agreement has been duly and
validly executed and delivered by the Company and, assuming the due and valid
authorization, execution and delivery of this Agreement by Omnipoint constitutes
a valid and binding agreement of the 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, the Company's Board of Directors
has: (1) determined that this Agreement and the Transactions are advisable and
fair to and in the best interests of the Company's stockholders; (2) approved
and adopted this Agreement and the Transactions; and (3) resolved (subject to
Section 8.7(b)) to recommend approval and adoption of this Agreement by its
stockholders. No other corporate proceedings on the part of the Company 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
Company Common Stock to the extent required by the Company's certificate of
incorporation and by applicable Delaware Law).
SECTION 4.3 Governmental Authorization.
(a) The execution, delivery and performance by the Company of this
Agreement and the consummation by the Company of the Transactions require no
action by or in respect of, or filing with, any Governmental Body, other than:
(1) the filing of the Certificate of Merger in accordance with Delaware Law; (2)
compliance with any applicable requirements of the HSR Act; (3) compliance with
any applicable requirements of the 1934 Act; (4) compliance with any applicable
requirements of the Communications Act; (5) compliance with FAA regulations; (6)
compliance with any applicable requirements of state and local public utility
commissions or similar entities; and (7) 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 the Company from
performing its obligations under this Agreement in any material respect or would
not in the aggregate have a Company Material Adverse Effect.
(b) The Company has 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.
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<PAGE> 22
SECTION 4.4 FCC Matters.
(a) The Company holds, and is qualified and eligible to hold, all
licenses, permits and other authorizations issued by the FCC, that are listed in
Schedule 4.4A of the Company Disclosure Schedules (the "Company FCC Licenses"),
and the Company FCC Licenses comprise all licenses, permits and other
authorizations issued to the Company by the FCC. The Company has no applications
for a license, permit, or other authorization or for approval or consent pending
before the FCC.
(b) The Company FCC Licenses are valid and in full force and effect and
except as set forth in Schedule 4.4B of the Company Disclosure Schedules, the
Company is not and has not been delinquent in payment on or in default under any
installment obligation owed to the United States Treasury or the FCC in
connection with the Company FCC Licenses.
(c) All material reports and applications required by the Communications
Act or required to be filed with the FCC by the Company have been filed and are
accurate and complete in all material respects.
(d) The Company is, and has been, in compliance in all material respects
with the Company FCC Licenses and 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 Company which
questions the validity of or contests any Company FCC License or which, 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 Company FCC License or imposition of any substantial
fine or forfeiture against the Company.
SECTION 4.5 Non-contravention. The execution, delivery and performance by
the Company of this Agreement and the consummation by the Company 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 the Company;
(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) assuming Section 9.1(e) is satisfied, 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 the Company is entitled, except as set forth on Schedule 4.5, under (A)
any provision of any agreement or other instrument binding upon the Company 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, the Company; or
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<PAGE> 23
(iv) result in the creation or imposition of any Lien on any asset of the
Company other than such exceptions in the case of clauses (ii) through (iv) as
would not, individually or in the aggregate, be reasonably expected to have a
Company Material Adverse Effect or to materially impact or delay the ability of
the Company to consummate the Transactions.
SECTION 4.6 Capitalization.
(a) The authorized capital stock of the Company consists of 19,615,000
shares, comprised of: (1) 16,000,000 shares of Class A Common Stock; (2)
3,600,000 shares of Class B Common Stock; and (3) 15,000 shares of Company
Preferred Stock.
(b) As of the close of business on October 20, 1999, there were issued
and outstanding: (1) 2,215,248 shares of Class A Common Stock; (2) 2,224,126
shares of Class B Common Stock; and (3) 7,800 shares of Company Preferred Stock.
All outstanding shares of capital stock of the Company have been duly
authorized, validly issued, fully paid and nonassessable and were issued free of
preemptive rights. Except as set forth in Schedule 4.6B of the Company
Disclosure Schedules, as of the date hereof, there are no declared or accrued
but unpaid dividends with regard to any issued and outstanding shares of capital
stock of the Company. All of the issued and outstanding shares of the capital
stock of the Company were issued in compliance with applicable federal and state
securities laws.
(c) Except as set forth on Schedule 4.6C of the Company Disclosure
Schedules, there are no authorized or outstanding subscriptions, options,
warrants, rights or convertible or exchangeable securities issued or issuable by
the Company or other agreements or commitments to which the Company is a party
of any character relating to the issued or unissued capital stock or other
securities of the Company, including any agreement or commitment obligating the
Company to issue, deliver or sell, or cause to be issued, delivered or sold,
shares of capital stock or other securities of the Company, 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
the Company or obligating the Company to make any payments pursuant to any stock
based or stock related plan or award. Except as set forth on Schedule 4.6C of
the Company Disclosure Schedules, 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 the Company.
(d) Except as set forth on Schedule 4.6D of the Company Disclosure
Schedules, there are no agreements, voting trusts, proxies or understandings
with respect to the voting or registration of any shares of capital stock or
other securities of the Company either (1) between or among the Company and its
stockholders or (2) between or among any of the Company's stockholders.
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SECTION 4.7 Subsidiaries; Investments. The Company does not have any
direct or indirect Subsidiaries, and does not own or hold, directly or
indirectly, an Investment Interest in any Person.
SECTION 4.8 SEC Filings.
(a) The Company has filed all required reports, schedules, forms,
statements and other documents required to be filed by it with the SEC since
August 13, 1997.
(b) The Company has filed with the SEC: (1) the Company 10-K; (2) its
proxy or information statements relating to meetings of, or actions taken
without a meeting by, the stockholders of the Company held since December 31,
1998; and (3) 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 Company SEC Documents") (the
documents referred to in Sections 4.8(a) and (b), collectively, the "Company SEC
Documents").
(c) As of its filing date, each Company 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 Company 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 Company 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 financial statements and
unaudited interim financial statements of the Company included in the Company
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 or, in the case of unaudited
financial statements, as permitted by the SEC rules and regulations applicable
to unaudited financial statements), the financial position of the Company as of
the dates thereof and its 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. Between the Company Balance
Sheet Date and the date hereof, the business of the Company has been conducted
in the ordinary course
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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 Company Material Adverse Effect, and since June
30, 1999, the Company has not taken any of the actions described in Section 6.1.
SECTION 4.11 No Undisclosed Material Liabilities. There are no
liabilities or obligations of the Company of any kind whatsoever, whether
accrued, contingent, absolute, determined, determinable or otherwise, that would
be required to be reflected on a balance sheet of the Company prepared in
accordance with GAAP, 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:
(a) Taxes, if any, arising out of, or attributable to the Transactions;
(b) liabilities or obligations disclosed and provided for in the Company
Balance Sheet or in the notes thereto or in Company SEC Documents filed prior to
the date hereof or in the Company 10-K;
(c) liabilities or obligations that, individually or in the aggregate,
have not had and would not be reasonably expected to have a Company Material
Adverse Effect; or
(d) liabilities incurred in the ordinary course of business since the
Company Balance Sheet Date.
SECTION 4.12 Compliance with Laws and Court Orders. The Company holds all
licenses, franchises, certificates, consents, permits, qualifications and
authorizations from all Governmental Bodies necessary for the lawful conduct of
its business as presently conducted, 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 Company Material Adverse Effect. The Company is
and has been in compliance with, and to the knowledge of the Company, except as
set forth in Schedule 4.12 of the Company Disclosure Schedules, is not under
investigation or audit 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 Company
Material Adverse Effect.
SECTION 4.13 Litigation. Except as set forth in Schedule 4.13 of the
Company Disclosure Schedules, there is no action, suit, investigation or
proceeding pending against, or, to the knowledge of the Company, threatened
against or affecting, the Company or any of its 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 Company
Material Adverse Effect.
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SECTION 4.14 Finders' Fees/Placement Fee. Except for fees payable by the
Company described in Schedule 4.14 of the Company Disclosure Schedules (the
"Company Fees") which shall be paid in accordance with, and subject to, Section
6.6(b) hereof, there is no investment banker, broker, finder or other
intermediary that has been retained by or is authorized to act on behalf of the
Company who might be entitled to any fee or commission from Omnipoint, any of
Omnipoint's Subsidiaries or the Company in connection with the Transactions. The
Company represents and warrants that the payment of the Company Fees in
accordance with Section 6.4 hereof shall satisfy the Company's obligation in
full in respect of the Company Fees. Copies of any engagement agreements with
the Persons entitled to receive any part of the Company Fees have been provided
to Omnipoint, and except for the Company Fees, no other investment banker,
broker, finder or similar fees are payable.
SECTION 4.15 Taxes.
(a) Except as set forth in Schedule 4.15 of the Company Disclosure
Schedules and except as would not have a Company Material Adverse Effect: (1)
all Company Tax Returns required to be filed with any taxing authority by, or
with respect to, the Company have been timely filed in accordance with all
applicable laws or an appropriate extension of time to file such Company Tax
Returns has been obtained; (2) the Company has timely paid all Taxes (other than
Taxes which are being contested in good faith by appropriate proceeding and for
which adequate reserves are reflected on the Company Balance Sheet) shown as due
and payable on the Company Tax Returns that have been so filed, or otherwise due
and such Tax Returns are true, correct and complete; as of the time of filing,
the Company Tax Returns correctly reflected the facts regarding the income,
business, assets, operations, activities and the status of the Company; (3) the
Company has made provision for all Taxes payable by the Company for which no
Company Tax Return has yet been filed; (4) the charges, accruals and reserves
for Taxes with respect to the Company reflected on the Company Balance Sheet are
adequate to cover the Tax liabilities accruing through the date thereof; (5)
there is no action, suit, proceeding, audit or claim now pending or, to the
knowledge of the Company, proposed against or with respect to the Company in
respect of any Tax where an adverse determination is reasonably likely; (6) the
Company is not currently, and never has been the subject of a federal income tax
examination; (7) there are no Liens or encumbrances for Taxes on any of the
assets of the Company except Liens for current Taxes not yet due; and (8) the
Company is not a party to any Tax allocation or sharing agreements that could
give rise to a liability after the Closing. 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 governmental body and any interest, penalties, or additions to tax
attributable
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<PAGE> 27
thereto. 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) The Company is not nor has it been a United States real property
holding corporation within the meaning of Section 897(c)(2) of the Code during
the five year period immediately preceding the date of this Agreement.
(c) The Company has never: (i) been a member of an "affiliated group"
within the meaning of Section 1504 of the Code; (ii) filed a federal
consolidated return or any combined state or local tax return comparable to a
federal consolidated tax return; or (iii) had any liability for Tax under
Treasury Regulation Section 1.1502-6 or any other similar provision of state,
local, foreign or other law.
(d) The business currently carried on by the Company is its "historic
business" within the meaning of Treasury Regulation Section 1.368-1(d), and the
Company has not taken any action or failed to take any action which would
prevent Omnipoint from continuing the "historic business" of the Company or from
using a "significant portion" of the Company's "historic business" assets in a
business following the Merger.
(e) The Company has not sold or otherwise disposed of any of its assets
in contemplation of the Merger, except for dispositions of such assets in the
ordinary course of business.
(f) The Company has not taken any action or failed to take any action
which would result in Omnipoint acquiring less than 90 percent (90%) of the fair
market value of the Company's net assets and 70 percent (70%) of the fair market
value of the Company's gross assets held immediately prior to the Effective
Time. For purposes of determining the percentage of the Company's "net assets"
and "gross assets" to be acquired by Omnipoint, the following assets will be
treated as held by the Company immediately prior to, but not acquired by
Omnipoint pursuant to the Merger: (i) assets disposed of by the Company prior to
the Merger and in contemplation thereof (including, without limitation, any
assets disposed of by the Company, other than in the ordinary course of
business, pursuant to a plan or intention existing during the period ending on
the Closing Date and beginning with the commencement of negotiations (whether
formal or informal) with Omnipoint regarding the Merger); (ii) assets used by
the Company to pay the Company's stockholders, if any, who perfect dissenters'
rights; (iii) assets used by the Company to pay reorganization expenses or other
liabilities incurred in connection with the Merger; and (iv) assets used to make
distributions, redemptions or other payments (except for regular, normal
distributions) in respect of the capital stock of the Company (including
payments treated as such for tax purposes) that are made prior to the Merger and
are part of the plan of the Merger.
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<PAGE> 28
(g) Except for redemptions of the Company Preferred Stock in accordance
with Section 6.2(b)(2) of this Agreement or Section 1.3 of the Securities
Purchase Agreement, neither the Company nor any person related to the Company
within the meaning of Treasury Regulation Section 1.368-1(e)(3), determined
without regard to Treasury Regulation Section 1.368-1(e)(3)(i)(A) has, in
contemplation of the Merger or as a part of a plan of which the Merger is a
part, (i) made any extraordinary distributions (within the meaning of Treasury
Regulation Section 1.368-1T(e)(1)(ii)(A)), with respect to any stock of the
Company or (ii) redeemed or repurchased any stock of the Company.
(h) To the knowledge of the Company except for a transfer occurring
pursuant to the VoiceStream Merger, there is no plan or intention on the part of
any stockholder of the Company, directly or indirectly, to sell, exchange,
transfer, or otherwise dispose of any shares of Series E Preferred Stock
received in the Merger to Omnipoint or any person related to Omnipoint within
the meaning of Section 1.368-1(e)(3) of the Treasury Regulations.
SECTION 4.16 Tax Opinions. There are no facts or circumstances relating
to the Company that would prevent Latham & Watkins from delivering the opinion
referred to in Section 9.3(b) as of the date hereof (other than facts or
circumstances under which the condition in such Section would, by its terms, be
deemed to have been satisfied).
SECTION 4.17 Employee Benefit Plans. Except as set forth in Schedule 4.17
of the Company Disclosure Schedules, the Company neither has established nor
maintains nor is obligated to make contributions to or under or otherwise
participate in any Employee Plan or Benefit Arrangements. The Company has not
previously made, is not currently making and is not obligated in any way to make
any contributions to any Multiemployer Plan.
SECTION 4.18 Environmental Matters; Real Property.
(a) Except as have not had and would not be reasonably expected to have,
individually or in the aggregate, a Company Material Adverse Effect:
(1) no notice, notification, demand, request for information,
citation, summons or order has been received by the Company, 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 the Company, is threatened against the Company by any
Governmental Body or other Person relating to or arising out of any
Environmental Law;
(2) the Company is and has been in material compliance with all
Environmental Laws and all Environmental Permits; and
(3) there are no liabilities of or relating to the Company of any
kind whatsoever, whether accrued, contingent, absolute, determined,
determinable or otherwise
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<PAGE> 29
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 the Company has knowledge in relation to the
current or prior business of the Company or any property or facility now or
previously owned or leased by the Company that reveal matters that, individually
or in the aggregate, have had or would reasonably be expected to have a Company
Material Adverse Effect.
(c) The Company does not and has not owned, leased or subleased any real
property.
(d) For purposes of this Section 4.18, the term "the Company" shall
include any entity that is, in whole or in part, a predecessor of the Company.
SECTION 4.19 Intellectual Property. With such exceptions as, individually
or in the aggregate, have not had and would not be reasonably expected to have a
Company Material Adverse Effect, the Company 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 "Company Intellectual Property")
necessary to carry on its business substantially as currently conducted. The
Company has not received any notice of infringement of or conflict with, and to
the Company's knowledge, there are no infringements of or conflicts with, the
rights of any Person with respect to the use of any Company Intellectual
Property that, in either such case, individually or in the aggregate, have had
or would be reasonably expected to have, a Company Material Adverse Effect.
SECTION 4.20 Contracts. The Company is not 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
the Company 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 the Company 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 Company Material Adverse Effect, (x) each of the contracts, agreements and
commitments of the Company is valid and in full force and effect and (y) the
Company has not 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
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<PAGE> 30
contract, agreement or commitment. To the knowledge of the Company, 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 Company Material Adverse Effect. The Company
is neither a party to, nor otherwise a guarantor of or liable with respect to,
any interest rate, currency or other swap or derivative transaction. The Company
has provided or made available to Omnipoint a copy of each agreement described
in item (i), (ii) or (iii) above.
SECTION 4.21 Employment Matters. As of the date hereof, the Company
neither has or has had any employees and neither has paid nor is obligated to
pay any employee or executive compensation. To the best knowledge of the
Company, there is not threatened any labor dispute, grievance or litigation
relating to labor, safety or discrimination matters, including charges of unfair
labor practices or discrimination complaints, involving the Company. There has
been no engagement in any unfair labor practices by the Company within the
meaning of the National Labor Relations Act.
SECTION 4.22 Vote Required. The only vote of the holders of any class or
series of capital stock of the Company necessary to approve this Agreement and
the Transactions is the affirmative vote of the holders of a majority of the
votes entitled to be cast by all holders of the outstanding shares of Company
Common Stock (the "Company Stockholders' Approval").
SECTION 4.23 Antitakeover Statutes and Charter Provisions. The Company
has taken all action necessary to exempt the 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.
SECTION 4.24 Insurance. Schedule 4.24 of the Company Disclosure Schedules
sets forth a list and brief description as of the date hereof, of all policies
of fire, liability and other forms of insurance and material fidelity bonds held
by the Company. As of the date hereof, each such policy and fidelity bond is in
full force and effect, and there are no disputed claims arising under such
policies or fidelity bonds.
SECTION 4.25 Bank Accounts; Power of Attorney. As of the date hereof,
Schedule 4.25 of the Company Disclosure Schedules 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 Company showing
the depository bank or institution address, account number and names of
signatories (collectively, the "Company Bank Account Information"). There are
not outstanding powers of attorney executed on behalf of the Company.
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<PAGE> 31
SECTION 4.26 Transactions with Affiliates. Except as set forth in
Schedule 4.26 of the Company Disclosure Schedules, no Affiliate of the Company
nor any stockholder, officer, director, partner, member, consultant or employee
of the Company or any Affiliate thereof, is at the date hereof a party to any
transaction with the Company, 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 the Company or any Affiliate thereof.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF OMNIPOINT
Except as disclosed in the Omnipoint SEC Documents filed prior to the
date hereof, Omnipoint represents and warrants to the Company as follows:
SECTION 5.1 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 an Omnipoint Material Adverse Effect. Omnipoint has
heretofore delivered or made available to the Company true and complete copies
of the certificate of incorporation and bylaws of Omnipoint as currently in
effect.
SECTION 5.2 Corporate Authorization.
(a) The execution, delivery and performance by Omnipoint of this
Agreement and the consummation by Omnipoint of the Transactions are within its
corporate powers and have been duly authorized by all necessary corporate action
on the part of Omnipoint, and to the extent required, its stockholders. 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 the Company, 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 and (ii) approved and
adopted this Agreement and the Transactions. No other corporate proceedings on
the part of Omnipoint or its stockholders are necessary to authorize or approve
this Agreement or to consummate the Transactions.
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<PAGE> 32
(c) The Recapitalization (as defined in the Side Agreement) is valid
under Delaware Law.
SECTION 5.3 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:
(1) the filing of the Certificate of Merger in accordance with Delaware Law; (2)
compliance with any applicable requirements of the HSR Act; (3) compliance with
any applicable requirements of the 1934 Act; (4) compliance with any applicable
requirements of the Communications Act; (5) compliance with FAA regulations; (6)
compliance with any applicable requirements of state and local public utility
commissions or similar entities; and (7) 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 has not made any material misstatements of fact, or omitted
to disclose any fact, to any Governmental 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 5.4 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 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 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 to have a Omnipoint Material Adverse Effect or materially
impair or delay the ability of Omnipoint to consummate the Transactions.
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SECTION 5.5 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 the Company: (1) the
Omnipoint 10-K; (2) 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 (3) 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 5.5(a) and (b), collectively,
the "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 5.6 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 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 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 5.7 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.
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SECTION 5.8 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 or audit 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 5.9 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 or
any Omnipoint 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 an Omnipoint Material
Adverse Effect.
SECTION 5.10 FCC Matters.
(a) Each member of the Omnipoint Group holds, and is qualified and
eligible to hold, all material licenses (including, without limitation, C-Block
and F-Block broadband PCS 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 Schedule 5.10A of the Omnipoint Disclosure Schedules (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 is, and has been, in compliance in
all material respects with, and the wireless communication systems operated
pursuant to the Omnipoint FCC Licenses have been operated in compliance in all
material respects with, the Communications Act.
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(e) There is not pending as of the date hereof (and no facts are known to
any member of the Omnipoint Group, which if known by 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, would result
in), 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 which questions the validity of or contests any Omnipoint FCC License or
which, if accepted or granted, or concluded adversely, could result in the
revocation, cancellation, suspension 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 except as set forth in Schedule 5.10E
of the Omnipoint Disclosure Schedules.
SECTION 5.11 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, that would be required to be reflected on
a balance sheet of Omnipoint prepared in accordance with GAAP, 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:
(a) Taxes, if any, arising out of, or attributable to the Transactions;
(b) 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;
(c) 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; or
(d) liabilities incurred in the ordinary course of business since the
Omnipoint Balance Sheet Date.
SECTION 5.12 Capitalization.
(a) As of the date hereof, the authorized capital stock of Omnipoint
consists of 210,000,000 shares, comprised of: (1) 200,000,000 shares of
Omnipoint Common Stock and 10,000,000 shares of Omnipoint Preferred Stock.
(b) As of the close of business on October 19, 1999, there were issued
and outstanding (i) 53,857,909 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
7,741,060 shares of Omnipoint Common Stock ("Omnipoint Options"), (iii) no
phantom shares or stock units issues under any stock option compensation or
deferred compensation plan or arrangement, (iv) Omnipoint warrants to purchase
an aggregate of
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2,446,437 shares of Omnipoint Common Stock ("Omnipoint Warrants") and (v)
337,500 shares of Omnipoint Preferred Stock comprised of 325,000 shares of
Convertible Preferred Stock and 12,500 shares of Series A Preferred Stock. 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 were issued free of preemptive rights.
The Omnipoint Disclosure Schedules set forth the number of shares of Omnipoint
Common Stock into which such Omnipoint Options or Omnipoint Warrants are
exercisable. All of the issued and outstanding shares of the capital stock of
Omnipoint were issued in compliance with applicable federal and state securities
laws.
(c) Except as set forth in Section 5.12(a) or on Schedule 5.12C of the
Omnipoint Disclosure Schedules, 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 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 of sold, shares of capital stock or other securities of
Omnipoint, 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 Omnipoint of 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 respective to the securities or any assets of any
members of the Omnipoint Group.
SECTION 5.13 Finders' Fees. 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 the Company, Omnipoint or any of the Omnipoint Subsidiaries
in connection with the Transactions.
SECTION 5.14 Taxes.
(a) Except as set forth in Schedule 5.14 of 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 timely 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 (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) shown as due and payable
on the Omnipoint Tax Returns that have been so filed or otherwise due and such
Tax Returns are true, correct and complete; 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
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Omnipoint Subsidiaries; (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 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 currently, 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;
(b) Omnipoint and the Omnipoint Subsidiaries (i) have never been a member
of an "affiliated group" within the meaning of Section 1504 of the Code, or a
similar provision of state, local or foreign law, that does not have Omnipoint
as its common parent corporation, and (ii) do not have and have never had any
liability for Tax of any person (other than Omnipoint or the Omnipoint
Subsidiaries) under Treasury Regulation Section 1.1502-6 or any other similar
provision of state, local, foreign or other law;
(c) Except for transfers described in Section 368(a)(2)(C) of the Code,
Treasury Regulation Section 1.368-2(k)(1) or Treasury Regulation Section
1.368-1(d), including for purposes of this exception, transfers of assets to a
partnership in which Omnipoint owns at least a one third interest, Omnipoint has
no plan or intention to sell or otherwise dispose of the assets acquired from
the Company in the Merger;
(d) Omnipoint plans to continue at least one significant historic
business line of the Company, or use at least a significant portion of the
Company's historic business assets, in each case within the meaning of Treasury
Regulation Section 1.368-1(d);
(e) Except for the 300,000 shares of Company Common Stock acquired by
Omnipoint pursuant to the Securities Purchase Agreement and any shares of
Additional Company Common Stock acquired pursuant to Section 6.2(b) and the cash
to be paid for the Company Preferred Stock neither Omnipoint, nor any person
related to Omnipoint, as defined in Treasury Regulation Section 1.368-1(e)(3),
has redeemed or otherwise acquired any stock of the Company with consideration
other than stock of Omnipoint; and
(f) Except for the cash to be paid to the holders of Series E Preferred
Stock in connection with the VoiceStream Merger, neither Omnipoint, nor any
person related to Omnipoint, as defined in Treasury Regulation Section
1.368-1(e)(3) (including any person who becomes related to Omnipoint as a result
of the VoiceStream Merger) has a plan to acquire any Series E Preferred Stock
issued in the Merger with consideration other than stock of Holdings.
SECTION 5.15 Tax Opinions. There are no facts or circumstances relating
to
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Omnipoint that would prevent Piper Marbury from delivering the opinion referred
to in Section 9.2(b) as of the date hereof (other than facts or circumstances
under which the condition in such Section would, by its terms, be deemed to have
been satisfied).
SECTION 5.16 Transactions with Affiliates. Except with respect to
compensation and other benefits paid to employees in the ordinary course of
business, 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.
SECTION 5.17 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 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 5.18 VoiceStream Merger Agreement. Omnipoint has delivered to the
Company a correct and complete copy of the VoiceStream Merger Agreement in
effect as of the date hereof.
ARTICLE 6
COVENANTS OF THE COMPANY
The Company covenants and agrees that:
SECTION 6.1 Interim Operations. Except as expressly contemplated hereby,
without the prior written consent of Omnipoint, the Company shall 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 officers; (iii)
maintain in effect all material foreign, federal, state and local licenses,
approvals and
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authorizations, including, without limitation, the Company FCC Licenses, all
material licenses and permits that are required for the Company to carry on its
business as currently conducted or proposed to be conducted; and (iv) preserve
existing relationships with its material partners, lenders, suppliers and others
having material business relationships with it so that the business or prospects
of the Company shall not be adversely affected in any material respect as of the
Effective Time. Further, and without limiting the generality of the foregoing,
from the date hereof until the Effective Time, without the prior written consent
of Omnipoint, the Company shall not:
(a) subject to Section 6.2, amend its certificate of incorporation or
bylaws or other applicable governing instrument;
(b) subject to Section 6.2, amend any term of any of its outstanding
securities;
(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, other than the issuance of shares of Company Preferred Stock as
dividends on outstanding shares of Company Preferred Stock as of the date hereof
in accordance with the terms of the Company Preferred Stock;
(d) adopt a plan or agreement of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization or other
material reorganization;
(e) subject to Section 6.2, 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 the issuance of shares of Company Preferred Stock
as dividends on outstanding shares of Company Preferred Stock as of the date
hereof in accordance with the terms of the Company Preferred Stock;
(f) make any capital expenditures, except for capital expenditures not
exceeding $500,000 in the aggregate;
(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 of any
Person, other than in the ordinary course of business;
(h) sell, lease, license, encumber or otherwise transfer any assets
(including any licenses);
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(i) incur, assume or guarantee any Indebtedness other than pursuant to
agreements in effect on the date hereof and listed on the Company Disclosure
Schedules;
(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 for Taxes that are not yet due, statutory liens or to secure
Indebtedness or other obligations permitted by this Agreement;
(k) make any loan, advance or capital contributions to or investment in
any Person, or acquire any Investment Interest;
(l) enter into any contract or agreement, other than in the ordinary
course of business, or relinquish or amend in any material respect any material
contract (as defined in Item 601(b)(1) of Regulation S-K of the SEC) to which
the Company is a party, other than transactions and commitments contemplated by
this Agreement;
(n) enter into any agreement or arrangement that materially limits or
otherwise materially restricts the Company or any of its Affiliates or any
successor thereto or that could, after the Effective Time, limit or restrict any
of Omnipoint, the Surviving Corporation or any of its 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) enter into any employment, deferred compensation or other similar
agreement with any director or officer of the Company or with any other Person;
or establish or adopt 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 of the Company or any other Person; increase the compensation, bonus or
other benefits payable to any director, or officer of the Company; or amend the
terms of any outstanding option or right to purchase shares of Company Common
Stock or other capital stock of the Company;
(p) change (1) its methods of accounting or accounting practices in any
material respect, except as required by concurrent changes in GAAP or by law or
(2) its fiscal year;
(q) acquire any Investment Interest;
(r) 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;
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(t) take any action, other than as expressly permitted by this Agreement,
that would make any representation or warranty of the Company hereunder
inaccurate in any material respect at the Effective Time; or
(u) agree or commit to do any of the foregoing.
SECTION 6.2 Equity Issuances by the Company.
(a) Notwithstanding any provision of this Agreement to the contrary,
except as set forth in this Section 6.2, no provision hereof (including without
limitation, Section 6.1 hereof) shall limit the right or ability of the Company,
between the date hereof and the Closing (i) to issue any shares of capital stock
(including shares of Company Common Stock or any options, warrants or other
rights exercisable for shares of capital stock of the Company) ("Additional
Company Capital Stock") that provide by the terms of such Additional Company
Capital Stock for the automatic conversion of such shares of Additional Company
Capital Stock (other than Company Common Stock) into shares of Company Common
Stock immediately prior to the Effective Time; provided, that, the consideration
received by the Company in respect of the issuance of such Additional Company
Capital Stock, after giving effect to the automatic conversion of such shares of
capital stock into shares of Company Common Stock, is equal to a price per share
of at least $10.00 (each such issuance, an "Issuance"), and (ii) to amend its
certificate of incorporation to the extent necessary to permit the issuance of
Additional Company Capital Stock of the Company permitted by the foregoing
clause (i); provided, that, with respect to the foregoing clause (i) - (ii): (1)
the Additional Company Capital Stock to be issued pursuant to an Issuance shall
not have any designations, powers, preferences and relative and other special
rights that would permit such Additional Company Capital Stock of the Company to
control the Company or to cause the Company to take any actions set forth in
Section 6.1(a)-(u); (2) the Company shall not take any actions in issuing
Additional Company Capital Stock that would materially delay or impair the
consummation of the Transactions; (3) the total aggregate amount of the gross
proceeds of any such Issuances shall not exceed $20,000,000; (4) the Company
shall not consummate any Issuance that would result in (a) the Company's
ineligibility to hold the Company FCC Licenses or (b) in the Company having the
right to redeem (other than pursuant to the terms of the Additional Company
Capital Stock issued pursuant to such Issuance) any shares of Company Common
Stock or shares of Additional Company Common Stock held by Omnipoint as a result
of Omnipoint's exercise of the Preemptive Right in connection with such
Issuance; (5) the Company shall not take any actions that would result in
AerForce Communications, Inc., owning securities of the Company representing
less than 50.1% of the voting power of the Company's equity securities on a
Fully-Diluted Basis (as defined); and (6) each purchaser of such shares shall,
at the time, execute and deliver to Omnipoint the Voting Agreement; and (7) the
Company shall comply with paragraphs (b) and (c) below.
(b) Preemptive Right. Subject to the terms and conditions specified in
this paragraph (b), the Company hereby grants to Omnipoint a preemptive right to
purchase its pro
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rata portion of any shares of Additional Company Capital Stock
that the Company issues pursuant to any Issuance in accordance with the
following provision (the "Preemptive Right").
(1) The Company shall give to Omnipoint written notice by certified mail
(the "Preemptive Right Notice") of any proposed Issuance of Additional Company
Capital Stock no later than the time such offer is made to other offerees (the
"Offer Date"). Omnipoint shall have fifteen (15) days from the closing of any
such Issuance to agree to purchase up to its pro rata portion of such shares of
Additional Company Capital Stock issued pursuant to such Issuance for the price
and on the terms and conditions as any other purchaser of such shares by giving
written notice to the Company and stating therein the quantity of shares (up to
a maximum of its pro rata portion) to be purchased. The Company agrees to sell
and issue to Omnipoint such shares of Additional Company Capital Stock that
Omnipoint elects to purchase on the same terms and conditions as any other
purchaser of such shares. For purposes of the Preemptive Right, Omnipoint's pro
rata portion of shares of Additional Company Capital Stock issued pursuant to
any Issuance is equal to the number of shares of such Additional Company Capital
Stock that, when added to the number of shares of Company Common Stock issued or
issuable to Omnipoint on a Fully-Diluted Basis prior to such Issuance would
result in the Omnipoint Post-Issuance Percentage Interest being equal to the
Omnipoint Pre-Issuance Percentage Interest. "Omnipoint Pre-Issuance Percentage
Interest" means, with respect to any Issuance, the fraction equal to the number
of shares of Company Common Stock issued or issuable to Omnipoint on a
Fully-Diluted Basis immediately prior to such Issuance, divided by the total
number of shares of Company Common Stock on a Fully-Diluted Basis outstanding
immediately prior to such Issuance. "Omnipoint Post-Issuance Percentage
Interest" means with respect to any Issuance, the fraction equal to the number
of shares of Company Common Stock issued or issuable to Omnipoint on a
Fully-Diluted Basis immediately after such Issuance, divided by the total number
of shares of Company Common Stock on a Fully-Diluted Basis outstanding
immediately after such Issuance. "Fully-Diluted Basis" gives effect, without
duplication, to all shares of Company Common Stock outstanding at the time of
determination plus all shares of Company Common Stock issuable as if all
Additional Company Common Stock had been converted or exercised (in the case of
options, warrants or other rights exercisable for shares of Company Common
Stock), including the effect of any Recapitalization Event.
(2) In the event Omnipoint exercises the Preemptive Right and purchases
up to its pro rata portion of the shares of Additional Company Capital Stock
(such purchased shares, the "Purchased Shares"), the Company agrees to use
immediately prior to the Effective Time the aggregate gross proceeds of the sale
of such Purchased Shares (1) to redeem shares of Company Preferred Stock at the
Per Share Exchange Amount, or (2) to repay the principal and interest on loans
from the Federal Communications Commission relating to the Company FCC Licenses,
unless, in each case, the Company or Omnipoint should determine that such
payment would result in Omnipoint acquiring less than ninety percent (90%) of
the fair market value of the Company's "net assets" and less than seventy
percent (70%) of the fair market value of the Company's "gross assets", measured
for this purpose, immediately prior to the Effective Time. For purposes of
determining the percentage of the Company's "net assets"
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and "gross assets" to be acquired by Omnipoint, the following assets will be
treated as held by the Company immediately prior to, but not acquired by
Omnipoint pursuant to the Merger: (i) assets disposed of by the Company prior to
the Merger and in contemplation thereof (including, without limitation, any
assets disposed of by the Company, other than in the ordinary course of
business, pursuant to a plan or intention existing during the period ending on
the Closing Date and beginning with the commencement of negotiations (whether
formal or informal) with Omnipoint regarding the Merger); (ii) assets used by
the Company to pay the Company's stockholders, if any, who perfect dissenters'
rights; (iii) assets used by the Company to pay reorganization expenses or other
liabilities incurred in connection with the Merger; and (iv) assets used to make
distributions, redemptions or other payments (except for regular, normal
distributions) in respect of the capital stock of the Company (including
payments treated as such for tax purposes) that are made prior to the Merger and
are part of the plan of the Merger.
(c) The Company hereby agrees that with respect to any Issuance, (i) the
shares of Additional Company Capital Stock to be issued pursuant to and in
accordance with this Section 6.2 shall, when issued, sold and delivered, will be
duly and validly issued, fully-paid and nonassessable and shall be issued in
compliance with the registration requirements of all applicable federal and
state securities laws and (ii) the Company shall not provide any information, as
may be amended and supplemented ("Offering Information") to any offeree that
shall 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. The
Company shall provide Omnipoint with copies of all Offering Information to be
distributed in any Issuance on or prior to the Offer Date and shall pay all fees
and expenses related to such Issuance, including, without limitation,
preparation and distribution of the Offering Information.
SECTION 6.3 No Solicitation.
(a) From the date hereof until the termination hereof, the Company will
not, and will cause its Affiliates, and the officers, directors, employees,
investment bankers, attorneys, accountants, consultants or other agents or
advisors of the Company and their respective Affiliates not to, directly or
indirectly: (1) take any action to knowingly solicit, initiate, facilitate or
encourage the submission of any Acquisition Proposal; (2) engage in any
discussions or negotiations with, or disclose any non-public information
relating to the Company or afford access to the properties, books or records of
the Company to, any Person who is known by the Company to be considering making,
or has made, an Acquisition Proposal; (3) (A) approve any transaction under
Section 203 of the Delaware Law or (B) approve of any Person becoming an
"interested stockholder" under Section 203 of Delaware Law or (4) enter into any
agreement with respect to an Acquisition Proposal. Nothing contained in this
Agreement shall prevent the Board of Directors of the Company 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 the Company shall not
recommend that the stockholders of the Company tender their shares in connection
with a tender offer except to the extent the Board of Directors of the Company
by a majority vote
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determines in its good faith judgment that such a recommendation is required to
comply with the fiduciary duties of the Board of Directors of the Company to
shareholders under applicable Delaware Law, after receiving the advice of
outside legal counsel.
(b) The Company will notify Omnipoint promptly (but in no event later
than 24 hours) after receipt by the Company (or any of its representatives or
advisors) of any Acquisition Proposal, or of any request for non-public
information relating to the Company or for access to the properties, books or
records of the Company by any Person who is known to be considering making, or
has made, an Acquisition Proposal. The Company 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. The Company
shall keep Omnipoint 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. The Company shall, and shall cause the
directors, employees and other agents of the Company to, cease immediately and
cause to be terminated all activities, discussions or negotiations, if any, with
any Persons (other than Omnipoint and its Affiliates) conducted prior to the
date hereof with respect to any Acquisition Proposal.
SECTION 6.4 Access to Information. The Company 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 the Company; (ii) at Omnipoint's
request, furnish to Omnipoint and Omnipoint's counsel, financial advisors,
auditors and other authorized representatives all financial and operating data
and all information concerning all capital expenditures and other information to
which the Company's Board of Directors or the officers of the Company are
provided or have access to (all of the foregoing to be furnished to Omnipoint
simultaneously with the same being furnished to any member of the Company's
Board of Directors or officers of the Company); and (iii) instruct its counsel,
financial advisors, auditors and other authorized representatives to cooperate
with Omnipoint (and its representatives and agents) in its investigation. Any
investigation pursuant to this Section 6.4 shall be conducted in such manner as
not to interfere unreasonably with the conduct of the business of the Company.
SECTION 6.5 Confidentiality. Except as contemplated hereby, none of the
parties hereto shall (or permit its Representatives (as defined) to), directly
or indirectly, disclose any information received from the another Party or its
Representatives (as defined) in connection with the Transactions, including
without limitation, information received during a Party's due diligence
investigation (such party receiving such information, the "Receiving Party" and
such party disclosing such information, the "Disclosing Party"); except as
required by law or judicial or administrative processes. Information will not be
subject to the provisions of this Section 6.5 which (i) is or becomes publicly
available other than as a result of a breach by the Receiving Party; (ii) is or
becomes available on a non-confidential basis from a source which is not
prohibited by contract or law from disclosing such information to the Receiving
Party; or (iii) was known by the Receiving Party prior to the disclosure thereof
by the Disclosing Party other than by means that
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would be a violation of this Section 6.5 had it been in effect at the time of
disclosure. As used herein, the term "Representatives" refers a Party's
directors, officers, employees, affiliates, representatives or agents. The
Parties acknowledge and agree that any breach of this Section 6.5 by a Party
would cause irreparable harm to the other party hereto and that, in such event,
such other party shall have the right, among other things, to preliminary and
injunctive relief, in addition to any other relief to which such other party may
be entitled. In the event that the Transactions are not consummated, the
Receiving Party shall promptly return all such written information provided by
the Disclosing Party or its Representatives and destroy any copies or notes
derived therefrom.
SECTION 6.6 Payment of Company Fees.
(a) Prior to or simultaneously with the execution of this Agreement, the
Company shall place in escrow the Finders' Fees described in Section 4.14 hereof
(such amount together with all interest thereon, collectively the "Escrow
Fund"). In the event this Agreement is terminated in accordance with its terms,
the Escrow Fund shall be released to Gabelli. In the event that the Transactions
have been consummated, at the Closing, the Escrow Fund shall be released to
Omnipoint.
(b) At the Closing, Omnipoint shall issue to Gabelli on behalf of the
Company 25,000 shares of Series E Preferred Stock (the "Fee Shares") in
satisfaction of the Company's liability with respect to the Company Fees.
ARTICLE 7
COVENANTS OF OMNIPOINT
SECTION 7.1 Director and Officer Liability.
(a) Omnipoint shall indemnify and hold harmless and advance expenses to
the present and former officers and directors of the Company and each person who
prior to the Effective Time becomes an officer or director of the Company (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 the Company's certificate of incorporation and bylaws in effect on the
date hereof (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 7.1a). Omnipoint 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
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Omnipoint 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
Omnipoint in connection with such matter.
(b) The rights of each Indemnified Person and its heirs and legal
representatives under this Section 7.1 shall be in addition to any rights such
Person may have under the certificate of incorporation or bylaws of the Company,
or under Delaware Law or any other applicable laws. These rights shall survive
consummation of the Transactions and are intended to benefit, and shall be
enforceable by, each Indemnified Person.
SECTION 7.2 Certificate of Designations for Series E Preferred Stock. As
soon as practicable after the date hereof, Omnipoint shall adopt and file with
the Secretary of State of the State of Delaware the Certificate of Designation
establishing the designations, powers, preferences, limitations, restrictions
and relative rights of the Series E Preferred Stock, substantially in the form
attached hereto as Exhibit A (the "Certificate of Designation"). Between the
date hereof and the earliest of: (i) the Effective Time; (ii) the termination of
this Agreement; or the time when Section 11.1(b) applies, Omnipoint shall not
amend or modify the Certificate of Designation without the prior consent of the
Company.
ARTICLE 8
COVENANTS OF THE PARTIES
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 (1) 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 (2) 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; provided, however, that no member of the Omnipoint Group or its
Affiliates shall be required to divest or hold separate any assets or otherwise
take or commit to take any action that limits, in any material respect, its
freedom of action with respect to any member of the Omnipoint Group or any
Omnipoint Investment or any material portion of the assets of the Company or
assets of the Omnipoint Group. Subject to applicable laws relating to the
exchange of information, Omnipoint and the Company shall have the right to
review in advance, and to the extent practicable to consult with each other on,
all the information relating to the Company or
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any member of the Omnipoint Group or any Omnipoint 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, Omnipoint and the Company shall prepare all appropriate applications
for FCC approval, and such other documents as may be required, with respect to
the transfer of control of the Company to Omnipoint (collectively, the "FCC
Applications"). Not later than the third Business Day following execution and
delivery of this Agreement, Omnipoint and the Company will exchange with each
other their respective completed portions of the FCC Applications. Not later
than the fifth Business Day following the execution and delivery of this
Agreement, Omnipoint and the Company 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 the
Company shall have terminated this Agreement pursuant to Section 10.1, Omnipoint
and the Company 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 the Company. Each of the Company and Omnipoint shall bear
its own expenses in connection with the preparation and prosecution of the FCC
Applications. The Company and Omnipoint shall each use all reasonable efforts to
prosecute the FCC Applications in good faith and with due diligence before the
FCC 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, the Company 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. The Company 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: (1) 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
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prosecute diligently any such applications, including providing such information
as such Governmental Bodies may reasonably request) in order to consummate the
Transactions, (2) cooperate with each other as may reasonably be requested in
connection with the foregoing, and (3) otherwise use their best efforts to
obtain promptly the requested consent and approval of the applications by any
applicable Governmental Bodies. The Company 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 (other than SEC filing fees and fees payable under this HSR
Act).
SECTION 8.2 Registration Statement and Information Statement. The Company
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 the
1933 Act, with respect to the Merger Shares issuable in connection with the
Merger, a portion of which Registration Statement shall also serve as the
information statement with respect to the stockholders of the Company in
connection with the Transactions (the "Information Statement/Prospectus"). The
respective parties shall cause the Information 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.
Omnipoint shall use all reasonable efforts, and the Company shall cooperate with
Omnipoint, to have the Form S-4 declared effective by the SEC prior to the
Effective Time and to keep the Form S-4 effective as long as is necessary to
consummate the Transactions. Omnipoint shall, as promptly as practicable,
provide copies of any written comments received from the SEC with respect to the
Form S-4 to the Company and advise the Company of any verbal comments with
respect to the Form S-4 received from the SEC. Omnipoint 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. Omnipoint agrees
that the Information Statement/Prospectus and each amendment or supplement
thereto at the time of the mailing thereof; 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 Omnipoint in reliance upon and in conformity with
written information concerning the Company furnished to Omnipoint by the Company
specifically for use in the Information Statement/Prospectus. The Company agrees
that the written information concerning the Company specifically provided by it
for inclusion in the Information Statement/Prospectus and each amendment or
supplement thereto, at the time of mailing thereof, or, in the case of written
information concerning the Company provided by the Company specifically 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
Information Statement/Prospectus shall be made by the Company or Omnipoint
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without the approval of the other party. Omnipoint shall advise the Company,
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 Omnipoint 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 Information
Statement/Prospectus or the Form S-4 or comments thereon and responses thereto
or requests by the SEC for additional information. Omnipoint shall pay all fees
and expenses, other than attorneys' and accounting fees and expenses, incurred
in relation to the printing and filing of the Form S-4 and the Information
Statement/Prospectus.
SECTION 8.3 Public Announcements. So long as this Agreement is in effect,
Omnipoint and the Company 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.
SECTION 8.4 Further Assurances. At and after the Effective Time, the
officers and directors of the Company and Omnipoint will be authorized to
execute and deliver, in the name and on behalf of the Surviving Corporation any
deeds, bills of sale, assignments or assurances and to take and do, in the name
and on behalf of the Surviving Corporation, any other actions and things to
vest, perfect or confirm of record in the Surviving Corporation any and all
right, title and interest in, to and under any of the rights, properties or
assets of the Company acquired or to be acquired by the Surviving Corporation as
a result of, or in connection with, the Transactions.
SECTION 8.5 Notices of Certain Events. Each of Omnipoint and the Company
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,
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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 the Company, or Section 5.11, in the case of
Omnipoint, or which relate to the consummation of the Transactions; and
(f) any event, condition or state of facts which could reasonably be
expected to 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 the Merger to qualify as a reorganization
described in Section 368(a) of the Code that will not result in gain to
Omnipoint or the Company (except as set forth in Section 9.2(b)), to comply with
their respective obligations under the Side Agreement and to obtain the opinions
of counsel referred to in Sections 9.2(b) and 9.3(b), including the execution of
the letters of representation referred to therein, and will not take any action
reasonably likely to cause the Merger not to so qualify. After the Effective
Time, each Party covenants that it will not take, or fail to take, any action
that would cause the Merger not to qualify as a reorganization described in
Section 368(a) of the Code.
SECTION 8.7 Stockholders' Approval.
(a) The Company will, (1) subject to Section 8.7(b), use its reasonable
best efforts to obtain the approval and adoption of this Agreement and the
Merger from its stockholders and (2) otherwise comply with all legal
requirements applicable to such approval.
(b) Except as provided below, the Board of Directors of the Company shall
recommend approval and adoption of this Agreement and the Transactions by its
stockholders and the Company shall each take all lawful action to solicit such
approval, including timely mailing of the Information Statement/Prospectus. The
Company shall be permitted to withdraw, or modify in a manner adverse to
Omnipoint, its recommendation to its stockholders, but only if: (1) the Board of
Directors of the Company determines in good faith by majority vote, on the basis
of the advice of the Company'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; (2) the Company shall have delivered to Omnipoint three
business days' prior written notice advising the Company that it intends to take
such action and the Company's Board of Directors has
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considered any proposed changes to this Agreement (if any) proposed by
Omnipoint; and (3) the Company has fully and completely complied with Sections
6.3 and 8.5. Unless this Agreement is previously terminated in accordance with
Article 10, the Company shall submit this Agreement to its stockholders, even if
the Company'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.
ARTICLE 9
CONDITIONS TO THE MERGER
SECTION 9.1 Conditions to the Obligations of Each Party. Unless otherwise
waived by the Parties, the obligations of each Party to consummate the
Transactions are subject to the satisfaction of the following conditions:
(a) the Company 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) 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 an Omnipoint Material Adverse Effect;
(e) 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 Omnipoint or the Company, threatened, and
all necessary approvals under state securities laws relating to the issuance or
trading of Omnipoint Common Stock to be issued to the Company's stockholders in
connection with the Transactions shall have been received;
(f) the FCC Consent shall have been obtained and shall not contain any
conditions with respect to Omnipoint or the Company, which conditions would be
reasonably expected to have an Omnipoint Material Adverse Effect;
(g) each of the parties to the Side Agreement shall have performed its
respective obligations thereunder and Omnipoint and the Company shall have
received the opinion
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of Piper & Marbury to the effect that Omnipoint has the corporate power and
authority to consummate its obligations under the Side Agreement under Delaware
Law; and
(h) any one of the following events shall have occurred: (1) all of the
conditions set forth in Article 9 of the VoiceStream Merger Agreement shall have
been satisfied or waived and the parties thereto shall be capable of
consummating the VoiceStream Merger immediately after the Closing; (2) the
VoiceStream Merger Agreement shall have been terminated in accordance with the
terms thereof; or (3) Section 11.1(b) applies.
SECTION 9.2 Conditions to the Obligations of Omnipoint. Unless otherwise
waived by Omnipoint, the obligations of Omnipoint to consummate the Transactions
are subject to the satisfaction of the following further conditions:
(a) (1) The Company 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; (2) the representations and warranties of the Company contained
in this Agreement, disregarding all qualifications and exceptions contained
therein relating to materiality or a Company 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
Company Material Adverse Effect; and (3) Omnipoint shall have received a
certificate signed by an executive officer of the Company certifying as to the
matters set forth in (1) and (2);
(b) Omnipoint shall have received an opinion of Piper & Marbury, in form
and substance reasonably acceptable to Omnipoint, on the basis of certain facts,
representations and assumptions set forth in the opinion, dated the Closing
Date, to the effect that the Merger will be treated for federal income tax
purposes as a reorganization described in Section 368(a) of the Code and will
not result in recognition of gain by Omnipoint or the Company, except for (i)
gain, if any, resulting from the purchase by Omnipoint of shares of the
Additional Capital Stock of the Company pursuant to the Securities Purchase
Agreement and Section 6.2 and (ii) gain, if any, resulting from the payment of
Company fees under Section 6.6. In rendering such opinion, such counsel shall be
entitled to rely upon certain documentation including representations of
officers of Omnipoint, the Company, VoiceStream and Holdings in form and
substance reasonably acceptable to Piper & Marbury and Latham & Watkins;
Notwithstanding the foregoing, the condition set forth in this Section
9.2(b) shall be deemed to have been satisfied if such opinion could be delivered
but for the failure (or possible failure) of the Merger to satisfy the
continuity of interest requirement of Treas. Reg. Section 1. 368-1(e) as a
result of a change (or possible change) in the price of Series E Preferred
Stock, Omnipoint Common Stock, VoiceStream Common Stock (as defined in the
VoiceStream
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Merger Agreement) or Holding Company Common Stock (as defined in the VoiceStream
Merger Agreement) between the date hereof and the Effective Time.
(c) Omnipoint shall have received an opinion of regulatory counsel of the
Company, dated the Effective Time, in form and substance reasonably acceptable
to Omnipoint;
(d) Omnipoint shall have received an opinion of corporate counsel to the
Company in form and substance reasonably acceptable to Omnipoint;
(e) no more than 10% of the shares of Company Common Stock outstanding
immediately prior to the Effective Time shall be Dissenting Shares; provided
that shares of Company Common Stock held by Omnipoint or its Affiliates will in
no event constitute Dissenting Shares for the purpose of this Section 9.2(e);
(f) Omnipoint shall have received a certificate signed by an executive
officer of the Company setting forth the Company's Bank Account Information; and
(g) the FCC Consent shall have become a Final Order and shall not contain
any conditions with respect to Omnipoint or the Company, which conditions would
be reasonably expected to have an Omnipoint Material Adverse Effect.
SECTION 9.3 Conditions to the Obligations of the Company. Unless
otherwise waived by the Company, the obligations of the Company to consummate
the Transactions are subject to the satisfaction of the following further
conditions:
(a) (1) 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; (2) the representations and warranties of Omnipoint contained in
this Agreement and in any certificate or other writing delivered by Omnipoint
pursuant hereto and the representations and warranties set forth in the Side
Agreement, disregarding all qualifications and exceptions contained therein
relating to materiality or Omnipoint 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 an Omnipoint Material Adverse Effect;
and (3) the Company shall have received a certificate signed by an executive
officer of Omnipoint certifying as to the matters set forth in (1) and (2);
(b) The Company shall have received an opinion of Latham & Watkins, in
form and substance reasonably acceptable to the Company on the basis of certain
facts, representations and assumptions set forth in the opinion, dated the
Closing Date, to the effect that the Merger will be treated for federal income
tax purposes as a reorganization described in Section 368(a) of the Code. In
rendering such opinion, such counsel shall be entitled to rely upon
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certain documentation including representations of officers of Omnipoint, the
Company, VoiceStream and Holdings in form and substance reasonably acceptable to
Latham & Watkins and Piper & Marbury;
Notwithstanding the foregoing, the condition set forth in this Section
9.2(b) shall be deemed to have been satisfied if such opinion could be delivered
but for the failure (or possible failure) of the Merger to satisfy the
continuity of interest requirement of Treas. Reg. Section 1. 368-1(e) as a
result of a change (or possible change) in the price of Series E Preferred
Stock, Omnipoint Common Stock, VoiceStream Common Stock (as defined in the
VoiceStream Merger Agreement) or Holding Company Common Stock (as defined in the
VoiceStream Merger Agreement) between the date hereof and the Effective Time.
(c) The Company shall have received an opinion of corporate counsel to
Omnipoint in form and substance reasonably acceptable to the Company; and
(d) 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 any member of the
Omnipoint Group after the Effective Time that would be reasonably expected to
have a Omnipoint Material Adverse Effect (after giving effect to the
Transactions).
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 the
Company):
(a) by mutual written agreement of Omnipoint and the Company;
(b) by either Omnipoint or the Company, if:
(1) the Transactions have not been consummated on or before
July 31, 2000 (the "Termination Date"); provided, that, if the End Date
(as defined in the VoiceStream Merger Agreement) of the VoiceStream
Merger Agreement is extended (such extended End Date, the "VoiceStream
Extended End Date"), then, Omnipoint may, upon written notice to the
Company given on or before July 31, 2000, extend the Termination Date to
the Voice Stream Extended End Date, provided that such date shall not be
later than the first anniversary of the date hereof; provided further
that the right to terminate this Agreement pursuant to this Section
10.1(b)(1) shall not be available to any party whose willful breach of
any provision of this Agreement results in the failure of the
Transactions to be consummated by the Termination Date;
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(2) (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 the Company from consummating the
Transactions is entered and such judgment, injunction, order or decree shall
have become final and non-appealable; or
(3) any of the conditions to the terminating party's obligation to
consummate the Transactions becomes incapable of being fulfilled.
(c) by Omnipoint:
(1) if the Board of Directors of the Company shall have withdrawn, or
modified in a manner adverse to Omnipoint, its approval or recommendation of
this Agreement and the Transactions, (or the Board of Directors of the Company
resolves to do any of the foregoing);
(2) if the Company shall have willfully and materially breached any
representation, warranty, covenant or agreement on the part of the Company set
forth in this Agreement, including, without limitation, any of its obligations
under Sections 8.7(b) or 6.3;
(3) if the Company Stockholders' Approval shall not have been obtained on
or before July 31, 2000;
(4) a breach of any representation, warranty, covenant or agreement on
the part of the Company 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 Termination Date; or
(5) pursuant to Section 12.14 hereof.
(d) by the Company:
(1) if Omnipoint shall have willfully and materially breached any
representation, warranty, covenant or agreement on the part of Omnipoint set
forth in this Agreement;
(2) if 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 9.3(a) not to be satisfied, and such
condition shall be incapable of being satisfied by the Termination Date;
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(3) pursuant to Section 12.14; or
(4) pursuant to Section 12.15.
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 Section 10.3 shall survive the termination hereof.
SECTION 10.3 Fees and Expenses.
(a) Except as otherwise provided herein, all costs and expenses incurred
in connection with this Agreement, including, without limitation, attorneys' and
accounting fees and expenses and investment bankers' fees (collectively, the
"Transaction Costs") shall be paid by the party incurring such cost or expense
whether or not the Transactions are consummated.
(b) Notwithstanding anything to the contrary contained herein, no
termination of this Agreement shall relieve any Party of any liability or
damages resulting from any breach by such party of this Agreement.
ARTICLE 11
MATTERS RELATING TO THE VOICESTREAM MERGER
SECTION 11.1 Effect of the VoiceStream Merger on Securities of Omnipoint.
(a) In the event that the VoiceStream Merger is consummated immediately
after the Closing, the Parties agree that each Merger Share that is issued and
outstanding immediately after the Effective Time and immediately prior to the
effective time of the VoiceStream Merger shall, pursuant to the VoiceStream
Merger, be exchanged for the right to receive the Standard Election
Consideration (as defined in the VoiceStream Merger Agreement) multiplied by the
Conversion Ratio.
(b) In the event that the VoiceStream Merger is consummated prior to the
Closing, the Parties agree that the Agreement shall be deemed to be amended as
follows:
(1) Section 1.1 shall be deemed to be amended to add the following
definition:
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"'Merger Share Market Value' shall mean the Closing Date Market
Price (as such term is defined in the VoiceStream Merger Agreement) with respect
to one share of VoiceStream Common Stock (as defined in the VoiceStream Merger
Agreement)."
(2) Clause (1) of the first sentence of Section 3.1 shall be deemed to be
amended and restated in its entirety as follows:
"(1) subject to Section 3.2, each share of Company Common Stock
(excluding any Dissenting Shares or shares of the Company Common Stock held by
Omnipoint) that is issued and outstanding immediately prior to the Effective
Time shall be converted into the right to receive the Standard Election
Consideration (as such term is defined in the VoiceStream Merger Agreement)
multiplied by the Conversion Ratio (the "Standard Election Consideration
Amount");"
(3) The fourth sentence of Section 3.1 shall be deemed to be amended and
restated in its entirety as follows:
"The Exchange Amount, together with the Standard Election Consideration
Amount and the Fractional Consideration, are collectively referred to herein as
the 'Merger Consideration'."
(4) The following shall be deemed to be added immediately prior to the
last sentence of Section 3.1:
"For purposes of this Section 3.1, the term "Merger Shares" shall mean
the shares of Holding Company Common Stock received as part of the Standard
Election Consideration Amount."
(5) Section 3.2 shall be deemed to be amended and restated in its
entirety as follows:
"SECTION 3.2 Fractional Shares; Adjustments.
(a) No certificates or scrip representing fractional Merger Shares shall
be issued to former holders of shares of Company Common Stock (the "Former
Company Stockholders"), and such Former Company Stockholders shall not be
entitled to any voting rights, rights to receive any dividends or distributions
or other rights as a stockholder of Omnipoint with respect to any fractional
Merger Shares that would otherwise be issued to such Former Company
Stockholders. All fractional Merger Shares that a Former Company Stockholder
would otherwise be entitled to receive as a result of the Merger shall be
aggregated and if a fractional Merger 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 Merger Share Market Value by the
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fraction of a Merger Share to which such holder would otherwise have been
entitled (the "Fractional Consideration").
(b) If between the date of this Agreement and the Effective Time the
outstanding shares of Holding Company Common Stock shall have been changed into
a different number of shares, by reason of any stock dividend, subdivision,
split or combination of shares (each, a "Recapitalization Event"), the number of
Merger Shares will be correspondingly adjusted to reflect such Recapitalization
Event. Between the date of this Agreement and the Effective Time, the Company
covenants and agrees not to effect or take any action with respect to a
Recapitalization Event with respect to shares of Company Common Stock or Company
Preferred Stock."
(7) Section 3.3 shall be deemed to be amended as follows:
(i) the phrase "Omnipoint" shall be replaced by the phrase "Holdings"
throughout such Section 3.3;
(ii) the first sentence of Section 3.3(f) shall be deemed to be amended
and restated in its entirety as follows:
"No dividends or other distributions with respect to any Merger Shares
and no cash payment in lieu of fractional Merger Shares as provided in Section
3.2, shall be paid to the Holder of any unsurrendered Certificates until such
Certificates are surrendered as provided in Section 3.3.";
(iii) clause (1) of Section 3.3(f) shall be deemed to be amended and
restated in its entirety as follows:
"(1) at the time of such surrender, (A) in the case of Certificates, the
amount of any cash payable in lieu of fractional Merger Shares to which such
Person is entitled pursuant to Section 3.2, and (B) the amount of all dividends
or other distributions with a record date after the Effective Time previously
paid or payable on the date of such surrender, with respect to such Merger
Shares,"
(iv) Section 3.3(h) shall be deemed to be amended and restated in its
entirety as follows:
"(h) All Merger Consideration issued upon the surrender for exchange of
shares of Company Common Stock or Company Preferred Stock, as the case may be,
in accordance with the terms hereof (including any cash paid in lieu of
fractional Merger Shares) shall be deemed to have been issued in full
satisfaction of all rights pertaining to such shares of Company Common Stock or
Company Preferred Stock."
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<PAGE> 59
(8) Section 3.4 shall be deemed to be amended as follows: the phrase
"Omnipoint" shall be replaced by the phrase "Holdings" throughout such Section
3.4.
(9) Section 3.5 shall be deemed to be amended as follows: the phrase
"Omnipoint" shall be replaced by the phrase "Omnipoint and Holdings" throughout
such Section 3.5.
(10) Section 3.6 shall be deemed to be amended as follows: the phrase
"Omnipoint" shall be replaced by the phrase "Holdings" throughout such Section
3.6.
(11) Section 3.7 shall be deemed to be amended as follows: the phrase
"Omnipoint" shall be replaced by the phrase "Holdings" throughout such Section
3.7.
(12) Section 4.15(h) of the Agreement shall be deemed to be amended and
restated in its entirety as follows:
"(h) To the knowledge of the Company, there is no plan or intention on
the part of any stockholder of the Company, directly or indirectly, to sell,
exchange, transfer or otherwise dispose of any shares of Holding Company Common
Stock received in the Merger to Holdings or any person related to Holdings
within the meaning of Section 1.368-1(e)(3) of the Treasury Regulations."
(13) Sections 5.14(b), (e) and (f), respectively of the Agreement shall
be deemed to be amended and restated in their entirety as follows:
"(b) Omnipoint and the Omnipoint Subsidiaries (i) have never been a
member of an "affiliated group" within the meaning of Section 1504 of the Code,
or a similar provision of state, local or foreign law, that does not have either
Omnipoint or Holdings as its common parent, and (ii) do not have and have never
had any liability for Tax of any person (other than in the case of Omnipoint,
the Omnipoint Subsidiaries, and in the case of each of the Omnipoint
Subsidiaries, each other Omnipoint Subsidiary and Omnipoint, and other than
Holdings and its Subsidiaries) under Treasury Regulation Section 1.1502-6 or any
other similar provision of state, local, foreign or other law;
(e) Except for the 300,000 shares of Company Common Stock acquired by
Omnipoint pursuant to the Securities Purchase Agreement and any shares of
Additional Company Common Stock acquired pursuant to Section 6.2(b) and the cash
to be paid for the Company Preferred Stock, neither Omnipoint, nor any person
related to Omnipoint, as defined in Treasury Regulation Section 1.368-1(e)(3)
(including any person who is related as a result of the VoiceStream Merger), has
redeemed or otherwise acquired any stock of the Company; and
(f) Neither Omnipoint nor any person related to Omnipoint, as defined
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in Treasury Regulation Section 1.368-1(e)(3) (including any person who becomes
related to Omnipoint as a result of the VoiceStream Merger) has a plan to
acquire any stock of Holdings issued in the Merger with consideration other than
stock of Holdings."
(14) Section 9.1 shall be deemed to be amended to add the following
immediately at the end of paragraph (h) thereof:
"; and
(i) the Merger Shares shall have been approved for listing on the NASDAQ,
subject to official notice of issuance."
(c) In the event that the VoiceStream Merger Agreement is terminated
prior to the Closing, the Parties agree that the Agreement shall be deemed to be
amended as follows:
(1) Recital A shall be deemed to be amended as follows: the phrase
"Series E Preferred Stock" shall be replaced by the phrase "Omnipoint Common
Stock" throughout such Recital.
(2) Section 1.1 shall be deemed to be amended to add the following
definition: "Merger Share Market Value" shall mean the average closing price per
share on the Nasdaq National Market System for shares of Omnipoint Common Stock
for the twenty (20) trading days ending one (1) day immediately prior to the
Closing Date."
(3) Clause (1) of the first sentence of Section 3.1 shall be deemed to be
amended and restated in its entirety as follows:
"(1) subject to Section 3.2, each share of Company Common Stock
(excluding any Dissenting Shares or shares of the Company Common Stock held by
Omnipoint) that is issued and outstanding immediately prior to the Effective
Time shall be converted into the right to receive the number of shares of
Omnipoint Common Stock equal to the Conversion Ratio (as defined) (collectively,
the "Merger Shares");"
(4) The fourth sentence of Section 3.1 shall be deemed to be amended and
restated in its entirety as follows:
"The Exchange Amount, together with the Merger Shares and the Fractional
Consideration, are collectively referred to herein as the 'Merger
Consideration'."
(5) Section 3.2 shall be deemed to be amended and restated in its
entirety as follows:
"SECTION 3.2 Fractional Shares; Adjustments.
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(a) No certificates or scrip representing fractional Merger Shares shall
be issued to former holders of shares of Company Common Stock (the "Former
Company Stockholders"), and such Former Company Stockholders shall not be
entitled to any voting rights, rights to receive any dividends or distributions
or other rights as a stockholder of Omnipoint with respect to any fractional
Merger Shares that would otherwise be issued to such Former Company
Stockholders. All fractional Merger Shares that a Former Company Stockholder
would otherwise be entitled to receive as a result of the Merger shall be
aggregated and if a fractional Merger 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 Merger Share Market Value by the fraction
of a Merger Share to which such holder would otherwise have been entitled (the
"Fractional Consideration").
(b) If between the date of this Agreement and the Effective Time the
outstanding shares of Omnipoint Common Stock shall have been changed into a
different number of shares, by reason of any stock dividend, subdivision, split
or combination of shares (each, a "Recapitalization Event"), the number of
Merger Shares will be correspondingly adjusted to reflect such Recapitalization
Event. Between the date of this Agreement and the Effective Time, the Company
covenants and agrees not to effect or take any action with respect to a
Recapitalization Event with respect to shares of Company Common Stock or Company
Preferred Stock."
(6) Section 3.3 shall be deemed to be amended as follows:
(i) the first sentence of Section 3.3(f) shall be deemed to be amended
and restated in its entirety as follows:
"No dividends or other distributions with respect to any Merger Shares
and no cash payment in lieu of fractional Merger Shares as provided in Section
3.2, shall be paid to the Holder of any unsurrendered Certificates until such
Certificates are surrendered as provided in Section 3.3.";
(ii) clause (1) of Section 3.3(f) shall be deemed to be amended and
restated in its entirety as follows:
"(1) at the time of such surrender, (A) in the case of Certificates, the
amount of any cash payable in lieu of fractional Merger Shares to which such
Person is entitled pursuant to Section 3.2, and (B) the amount of all dividends
or other distributions with a record date after the Effective Time previously
paid or payable on the date of such surrender, with respect to such Merger
Shares,"
(iii) Section 3.3(h) shall be deemed to be amended and restated in its
entirety as follows:
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"(h) All Merger Consideration issued upon the surrender for exchange of
shares of Company Common Stock or Company Preferred Stock, as the case may be,
in accordance with the terms hereof (including any cash paid in lieu of
fractional Merger Shares) shall be deemed to have been issued in full
satisfaction of all rights pertaining to such shares of Company Common Stock or
Company Preferred Stock."
(7) Section 7.2 shall be deemed to be amended and restated in its
entirety as follows:
"SECTION 7.2 Listing of Stock. Omnipoint shall use its reasonable efforts
to cause the shares of Omnipoint Common Stock to be issued in connection with
the Transactions to be approved for listing on NASDAQ, subject to official
notice of issuance."
(8) Section 9.1 shall be deemed to be amended to add the following
immediately at the end of paragraph (h) thereof:
"; and
(i) the shares of Omnipoint Common Stock to be issued in the Transactions
shall have been approved for listing on the NASDAQ, subject to official notice
of issuance."
(9) Section 9.3 shall be deemed to be amended to add the following
immediately at the end of paragraph (d) thereof:
"; and
(e) Omnipoint and Gabelli shall have entered into a registration rights
agreement with respect to the Fee Shares, in a form reasonably acceptable to the
Company."
(10) Section 6.6 (b) shall be deemed to be amended and restated in its
entirety as follows:
"(b) At the Closing, Omnipoint shall issue to Gabelli on behalf of the
Company 25,000 shares of Omnipoint Common Stock (the "Fee Shares") in
satisfaction of the Company's liability with respect to the Company Fees.
Omnipoint shall grant to Gabelli registration rights with respect to the Fee
Shares substantially similar to the registration rights granted to Omnipoint
pursuant to the terms of the Securities Purchase Agreement."
(11) Section 4.15(h) shall deemed to be amended as follows: the phrase
"except for a transfer ocurring pursuant to the VoiceStream Merger" shall be
deleted and the phrase "Series E Preferred Stock" shall be replaced with the
phrase "Omnipoint Common Stock".
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(12) Section 5.14(c) shall be deemed to be amended as follows: the phrase
"including for purposes of this exception, transfers of assets to a partnership
in which Omnipoint owns at least a one third interest" shall be deleted.
(13) Section 5.14(f) of the Agreement shall be deemed to be amended and
restated in its entirety as follows:
"(f) Neither Omnipoint, nor any person related to Omnipoint, as defined
in Treasury Regulation Section 1.368-1(e)(3) has a plan to acquire any Omnipoint
Common Stock issued in the Merger with consideration other than stock of
Omnipoint."
SECTION 11.2 Other Matters. In the event that the VoiceStream Merger
Agreement is not terminated and the Closing occures prior to the closing of the
VoiceStream Merger, the Parties intend that the VoiceStream Merger shall close
and be effective immediately after the Closing on the date of the Closing, as
part of an integrated plan to cause the Company to merge with and into Omnipoint
in a transaction described in Section 368(a)(2)(D) of the Code.
ARTICLE 12
MISCELLANEOUS
SECTION 12.1 Notices. All notices, requests and other communications to
any party hereunder shall be in writing (including facsimile transmission) and
shall be given,
if to the Company, to:
East/West Communications, Inc.
350 Stuyvesant Avenue
Rye, New York 10580
Attention: Victoria G. Kane
Fax: (203) 629-3680
with a copy to:
Latham & Watkins
1001 Pennsylvania Avenue, NW
Suite 1300
Washington, DC 20004
Attention: James Barker, Esq.
Daniel T. Lennon, Esq.
Fax: (202) 637-5265
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<PAGE> 64
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 be deemed not to have been received until the next succeeding Business Day
in the place of receipt.
SECTION 12.2 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, the Company
Disclosure Schedules, the Omnipoint Disclosure Schedules 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 12.3 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 the
termination of this Agreement.
SECTION 12.4 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 the Company, no such amendment or waiver
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shall be made or given that requires the approval of the stockholders of the
Company 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 12.5 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 12.6 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 12.7 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 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 12.1 shall be deemed effective service of
process on such party.
SECTION 12.8 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 12.9 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.
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SECTION 12.10 Entire Agreement; No Third Party Beneficiaries. This
Agreement, together with the Securities Purchase Agreement, the Voting
Agreement, and the Side 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
Section 7.1, this Agreement is not intended to confer upon any Person other than
the parties hereto any rights or remedies.
SECTION 12.11 Captions. The captions herein are included for convenience
of reference only and shall be ignored in the construction or interpretation
hereof.
SECTION 12.12 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.
SECTION 12.13 Intentionally Omitted. .
SECTION 12.14 Schedules.
(a) Each of Omnipoint and the Company has set forth information in its
respective Disclosure Schedules 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 Schedules irrespective of its relevance to the latter section of
the Disclosure Schedules or section of the Agreement being apparent on the face
of the information disclosed in the Disclosure Schedules. 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.
(b) Notwithstanding anything herein to the contrary, each of Omnipoint
and the Company shall have the right to update the information contained in its
respective Disclosure Schedules on or before the Closing by delivering updated
schedules to Omnipoint (in the case of the Company) and the Company (in the case
of Omnipoint). Omnipoint and the Company hereby agree that any changes contained
in any such updated schedules shall not constitute a breach of
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their related representations and warranties; provided, however, that each of
Omnipoint and the Company shall have the right to terminate this Agreement in
the event that any such change(s) results in a Company Material Adverse Effect
or an Omnipoint Material Adverse Effect, respectively, as provided in Section
10.1(c)(5) and Section 10.1(d)(3) hereof.
SECTION 12.15 VoiceStream Actions.
(a) Notwithstanding anything to the contrary contained in this Agreement,
the Side Agreement or any other documents, agreements or other instruments
entered into in connection herewith (each, a "Related Agreement" and
collectively, the "Related Agreements"), the Parties hereby agree that (i) no
provision contained herein or in any Related Agreement shall be deemed to limit,
restrict or prohibit Omnipoint or VoiceStream or Holdings from taking (or
failing to take) any action, including but not limited to, any action permitted
by the VoiceStream Merger Agreement as amended from time to time at the sole
discretion of VoiceStream, Holdings and Omnipoint (except as provided in Section
2(c) of the Side Agreement) or any action which in its sole discretion it takes
(or fails to take) in order: (1) to consummate the transactions contemplated by
the VoiceStream Merger Agreement, as amended from time to time at the sole
discretion of VoiceStream and Omnipoint; (2) to fulfill or satisfy the
conditions set forth in Article 9 of the VoiceStream Merger Agreement; or (3) to
ensure that the receipt of VoiceStream Holdings Common Stock by Omnipoint
stockholders pursuant to the VoiceStream Merger will be tax-free to such
Omnipoint stockholders (any such action, a "VoiceStream Action") and (ii) a
VoiceStream Action shall not constitute a "breach" of this Agreement or any
Related Agreement or of any representation, warranty, covenant or agreement
contained herein or in any Related Agreement if as a result of such VoiceStream
Action there shall occur a breach of any representation, warranty, covenant or
agreement contained herein or in any other Related Agreement; provided, however,
that: (x) each Party shall use its reasonable efforts to consider taking any
action which would allow it to fulfill or satisfy the conditions set forth in
Article 9 hereof, it being understood that the decision to take (or not take)
any action will be made at the sole discretion of VoiceStream, Omnipoint and
Holdings; (y) nothing herein shall be construed so as to require the Company to
consummate the Transactions unless the conditions set forth in Article 9 hereof
have been satisfied or waived; and (z) the Company's failure to consummate the
Transactions due to any VoiceStream Action that would, but for this Section
12.15(a) or Section 10(h) of the Side Agreement constitute a breach by Omnipoint
or VoiceStream or Holdings of a representation, warranty, covenant or agreement
contained herein or in any Related Agreement, shall not, provided that the
Company has validly terminated this Agreement in accordance with Section
12.15(b), constitute a breach of this Agreement, any Related Agreement or of any
representation, warranty, covenant or agreement contained herein or therein.
(b) In the event that, but for the effect of paragraph (a) above or
Section 10(h) of the Side Agreement, a VoiceStream Action would cause a material
breach of this Agreement or any Related Agreement or of any representation,
warranty, covenant or agreement contained herein or in any Related Agreement by
Omnipoint, VoiceStream, Holdings or any other party to any Related Agreement
(such VoiceStream Action, a "Material VoiceStream Action"), Omnipoint,
VoiceStream or Holdings shall have the right to take any action ("Cure") that
would
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cause such VoiceStream Action not to continue to constitute a Material
VoiceStreamAction. Any such Cure must occur during the thirty (30) day period
immediately following the delivery of written notice (the "Material Voice Stream
Action Notice") to the Company of the occurrence of such Material VoiceStream
Action which the Person taking such Material VoiceStream shall deliver prior to
the taking of any such Material VoiceStream Action. In the event that Omnipoint,
VoiceStream, Holdings or other party to any Related Agreement, as the case may
be, shall fail to Cure during such 30-day period (the "Cure Period"), then
during the thirty (30) day period immediately following such Cure Period (the
"Termination Period"), the Company shall have the right to terminate this
Agreement pursuant to Section 10.1(d)(4) (and not pursuant to Section
10.1(d)(1)) (the "Termination Right"). In the event that (i) the Company
terminates this Agreement pursuant to the Termination Right during the
Termination Period and (ii) within the Termination Period and prior to the
termination of the Agreement, the Company requests in writing that Omnipoint
purchase 250,000 shares of Class A Common Stock (such request, the "Company
Request"), then within ten (10) Business Days immediately following the date of
such termination, Omnipoint shall purchase 250,000 shares of Class A Common
Stock at a per share purchase price of $20 per share, for an aggregate purchase
price of $5,000,000, on substantially similar terms and conditions as set forth
in the Securities Purchase Agreement (the "Additional Stock Purchase"). In the
event that the Company does not deliver the Company Request within the
Termination Period and terminates this Agreement during the Termination Period,
Omnipoint shall have no obligation or liability with respect to the Additional
Stock Purchase. In the event that the Company does not exercise the Termination
Right to terminate the Agreement within the Termination Period, then clause (ii)
of paragraph (a) above shall apply to such Material VoiceStream Action(s) that
gave rise to the Termination Right and the first clause of subclause (y) of
clause (ii) of paragraph (a) shall not apply with respect to such Material
VoiceStream Action(s).
(c) Notwithstanding paragraphs (a) and (b) of this Section 12.15 or
Section 10(h) of the Side Agreement, paragraph (a) and Section 10(h) of the Side
Agreement shall not apply solely for the purpose of determining whether the
conditions set forth in Article 9 hereof have been satisfied; provided, that if
the conditions set forth in Article 9 are not satisfied as the result of a
Material VoiceStream Action or VoiceStream Actions that constitute in the
aggregate a Material VoiceStream Action, and the Company does not terminate the
Agreement during the 60-day time period immediately following the delivery of
the Material VoiceStream Action Notice with respect to such Material VoiceStream
Action, the conditions set forth in Article 9 shall be deemed to be satisfied
with respect to the Company's obligation to consummate the Transactions.
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<PAGE> 69
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.
EAST/WEST COMMUNICATIONS, INC.
By: /s/ VICTORIA G. KANE
--------------------------------
Name: Victoria G. Kane
Title: Chairman
OMNIPOINT CORPORATION
By:
--------------------------------
Name:
Title:
<PAGE> 70
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.
EAST/WEST COMMUNICATIONS, INC.
By:
--------------------------------
Name:
Title:
OMNIPOINT CORPORATION
By: /s/ DOUGLAS G. SMITH
--------------------------------
Name: Douglas G. Smith
Title: President
<PAGE> 71
EXHIBIT A
OMNIPOINT CORPORATION
CERTIFICATE OF DESIGNATION
establishing the
Voting Powers, Designations, Preferences, Limitations,
Restrictions, and Relative Rights of
SERIES E 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 E Preferred
Stock was duly adopted by the Board of Directors, on October ___, 1999, and such
resolution remains in full force and effect. Certain capitalized terms used
herein are defined in Article 7.
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 1,800,000 shares of Series E 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 E Preferred Stock" (the "Series E Preferred Stock"), and will be a
series consisting of 1,800,000 shares of the authorized but unissued preferred
stock of the Issuer.
<PAGE> 72
2. Dividends. Each share of the Series E Preferred Stock will be deemed
to be, and treated for all purposes relating to the declaration and payment of
dividends as, equal to the number of shares of Common Stock multiplied by the
Conversion Ratio.
3. Ranking.
(a) Outstanding shares of the Series E Preferred Stock (as adjusted by
the Conversion Ratio) will, with respect to distributions upon the liquidation,
winding up or dissolution of the Issuer, rank on parity with the Common Stock.
(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 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. Voting Rights.
(a) Each share of Series E Preferred Stock shall have voting rights equal
to one share of Common Stock multiplied by the Conversion Ratio.
(b) The creation, authorization or issuance of any shares of Parity
Securities or any other Capital Stock, or an increase or decrease in the amount
of authorized Capital Stock of any class, including any Series E Preferred
Stock, does not and will not require the consent of the Holders of the Series E
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
Series E Preferred Stock.
5. Certain Definitions. Set forth below are certain defined terms used in
this Certificate of Designation.
"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.
"Conversion Ratio" has the meaning of such term set forth in the
Agreement and Plan of Merger dated as of October 20, 1999 by and between the
Issuer and East/West Communications, Inc.
"Holder" means a Person in whose name shares of Capital Stock is
registered.
"Issuer" means Omnipoint Corporation, a Delaware corporation.
"Parity Security" means any other class or series of Capital Stock of the
Issuer with a ranking for purposes of any liquidation or the payment of
dividends that is on par with that of the Series E Preferred Stock.
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<PAGE> 73
"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).
6. Transfer Agent and Registrar. The initial transfer agent and registrar
for the Series E Preferred Stock is Chase Manhattan Bank (the "Transfer Agent").
The Issuer may, in its sole and absolute discretion, remove the Transfer Agent
and appoint a successor transfer agent.
7. No Fractional Shares. The Series E Preferred Stock is issuable in
whole shares.
IN WITNESS WHEREOF, Omnipoint Corporation has caused this Certificate
of Designation to be executed and attested to by the undersigned as of October
___, 1999.
OMNIPOINT CORPORATION
By:
--------------------------------
Douglas G. Smith
President and Chief Executive Officer
Attest:
----------------------------
Edwin M. Martin, Jr.
Secretary
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<PAGE> 74
LIST OF SCHEDULES AND DESCRIPTION*
EAST/WEST COMMUNICATIONS, INC. DISCLOSURE SCHEDULES
4.4A FCC Licenses
4.4B Exceptions to FCC Matters
4.6B Unpaid Dividends
4.6C Capitalization Matters
4.6D Capital Stock Agreements
4.12 Compliance with Laws and Court Orders
4.13 Litigation
4.14 Company's Fees
4.15 Tax Matters
4.17 Employee Benefit Plans
4.24 Insurance Policies
4.25 Bank Accounts
4.26 Affiliated Transactions
6.1 Interim Operations
OMNIPOINT CORPORATION DISCLOSURE SCHEDULES
5.10A FCC Licenses
5.10E FCC Matters
5.12C Rights to Purchase Omnipoint Securities
5.14 Tax Issues
* The schedules have been omitted and East/West Communications, Inc. agrees
to furnish supplementally a copy of any omitted schedule to the Commission upon
request.
<PAGE> 1
Exhibit 2.2
SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT (the "Agreement") is
dated as of October 22, 1999 by and between East/West Communications, Inc.,
a Delaware corporation (the "Issuer"), and Omnipoint Corporation, a Delaware
corporation ("Omnipoint", or the "Purchaser").
RECITALS
WHEREAS, concurrently herewith, Issuer and Omnipoint are
entering into an Agreement and Plan of Merger (the "Merger Agreement"),
pursuant to which, among other things, the Issuer will merge with and into
Omnipoint; and
WHEREAS, upon the terms and conditions set forth in this
Agreement, Issuer has determined to issue and sell, and Purchaser have
determined to purchase, 300,000 shares of Issuer's Class A Common Stock, par
value $0.01 per share (the "Stock");
WHEREAS, the Issuer and the Purchaser desire to set
forth certain rights of the Purchaser with respect to the Stock; and
WHEREAS, it is a condition to the purchase and sale of
the Stock hereunder that the Merger Agreement continue to be in full force
and effect on the closing date of such purchase and sale of Stock.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual
covenants, conditions and promises hereinafter set forth, the parties hereby
agree as follows:
ARTICLE I
PURCHASE AND SALE OF STOCK
Section 1.1 Closing. Subject to the terms and conditions of this
Agreement, at the Closing, Issuer will issue, sell and deliver 300,000 shares of
Stock to Omnipoint for a purchase price of $10 per share payable to Issuer on
the Closing Date.
Section 1.2 Conversion Rights. In the event that between the Closing
Date and the earlier of (i) the Effective Time and (ii) the date on which the
Merger Agreement is terminated, the Issuer issues any shares of Additional
Company Capital Stock (as defined in the Merger Agreement) (other than Company
Common Stock), the Purchaser shall have the right, at its sole option, to
convert all or a portion of its Stock into shares of Additional Company Capital
Stock issued by the Issuer in any Issuance pursuant to and in accordance with
Section 6.2 of the Merger Agreement (the "Conversion Right"). The Purchaser
shall have the right to convert its Stock on the same terms and conditions as
any other purchaser of shares of such Additional Company Capital Stock pursuant
to such
<PAGE> 2
Issuance. In the event that the Purchaser exercises the Conversion Right
and converts a portion of its Stock into shares of Additional Company Capital
Stock in accordance herewith, notwithstanding anything to the contrary contained
herein, the Converted Shares shall be automatically converted into shares of
Issuer's Class A Common Stock on the Right of First Refusal End Date based on a
purchase price of $10 per share of Issuer's Class A Common Stock.
Section 1.3 Use of Proceeds. Issuer shall use the
proceeds from the sale of the Stock to (i) repay the principal and interest on
loans from the Federal Communications Commission relating to the Issuer's PCS
licenses, and (ii) pay certain legal and accounting expenses incurred in
connection with this Agreement and the transactions contemplated by this
Agreement and the Merger Agreement and general corporate purposes, subject to
the limitations set forth in Section 6.4. Issuer agrees to use any remaining
proceeds to redeem Company Preferred Stock for the Per Share Exchange Amount
immediately prior to the Effective Time, unless, in each case, the Issuer or
Omnipoint should determine that such payment would result in Omnipoint acquiring
less than ninety percent (90%) of the fair market value of the Issuer's "net
assets" and less than seventy percent (70%) of the fair market value of the
Issuer's "gross assets", measured for this purpose, immediately prior to the
Effective Time pursuant to the Merger Agreement. For purposes of determining the
percentage of the Issuer's "net assets" and "gross assets" to be acquired by
Omnipoint, the following assets will be treated as held by the Issuer
immediately prior to, but not acquired by Omnipoint pursuant to the Merger: (i)
assets disposed of by the Issuer prior to the Merger and in contemplation
thereof (including, without limitation, any assets disposed of by the Issuer,
other than in the ordinary course of business, pursuant to a plan or intention
existing during the period ending on the Closing Date (as defined in the Merger
Agreement) and beginning with the commencement of negotiations (whether formal
or informal) with Omnipoint regarding the Merger); (ii) assets used by the
Issuer to pay the Issuer's stockholders, if any, who perfect dissenters' rights
in connection with the Merger; (iii) assets used by the Issuer to pay
reorganization expenses or other liabilities incurred in connection with the
Merger; and (iv) assets used to make distributions, redemptions or other
payments (except for regular, normal distributions) in respect of the capital
stock of the Issuer (including payments treated as such for tax purposes) that
are made prior to the Merger and are part of the plan of the Merger.
ARTICLE II
CLOSING
Section 2.1 Time and Place of Closing. Subject to the conditions set
forth in Section 8.1, the closing of the transactions contemplated by Section
3.1 (the "Closing") shall take place at the offices of Piper & Marbury L.L.P.,
1200 Nineteenth Street, N.W., Washington, D.C. 20036, at 10:00 a.m. local time
on the date hereof (the "Closing Date"). At the Closing, Issuer shall deliver to
Purchaser duly executed and issued stock certificates evidencing the Shares
purchased thereby against payment of the purchase price therefor by wire
transfer of immediately available funds to the account specified therefor by
Issuer.
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<PAGE> 3
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF ISSUER
Section 3.1 Representations and Warranties of Issuer.
The Issuer hereby represents and warrants to the Purchaser:
(1) Incorporation of Representations and
Warranties in Merger Agreement. The representations and warranties of Issuer
set forth in Section 4 of the Merger Agreement (together with the Disclosure
Schedule) are hereby incorporated herein by reference, and are hereby made by
Issuer to Purchaser as of the date hereof and the Closing Date, in their
entirety with the same force and effect.
(2) Additional Representations and Warranties.
Issuer hereby represents and warrants to Purchaser the shares of Stock
being issued to Purchaser hereunder, when issued and paid for pursuant to the
terms of this Agreement, will be duly authorized, validly issued, fully paid and
nonassessable, and will be free 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.
(3) 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, other than such exceptions in the case of
subclauses (A), (B) and (C) which would not reasonably be expected to have a
material adverse effect on the transactions contemplated hereby or on the
Issuer; (ii) give rise to any right of first refusal or similar right with
respect to any interest, or any properties or assets, of Issuer; or (iii) give
rise to the Company's right to redeem any shares of Stock. 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 Stock.
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<PAGE> 4
(4) 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 the
Issuer 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.
(5) Investment Company Act. Issuer is not an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
(6) No Brokers. Except with respect to the
$150,000 placement fee to be paid by the Issuer to Gabelli & Company, Inc. upon
consummation of the transactions contemplated by this Agreement, 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 such transactions based in any way on any arrangements,
agreements or understandings made by or on behalf of Issuer or an affiliate
thereof, as defined in Rule 405 under the Securities Act of 1933, as amended (an
"Affiliate"), 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.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
The Purchaser hereby represents and warrants to Issuer:
Section 4.1 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 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.
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<PAGE> 5
Section 4.2 Investment Representations. It is an
Accredited Investor within the definition set forth in Rule 501(a) under the
Securities Act of 1933, as amended (the "Securities Act"). It is acquiring the
Shares 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, and that such
Shares may not be sold or otherwise disposed of unless registered under the
Securities Act and applicable state securities laws or exempted from
registration therefrom.
ARTICLE V
REGISTRATION RIGHTS
Section 5.1 Demand Registrations.
(1) Right to Demand Registration. In the event
that the Merger Agreement is terminated (other than pursuant to Section
10.1(d) of the Merger Agreement), the holders of not less than twenty (20%)
percent of the shares of Stock beneficially owned by the Purchaser (the
"Registrable Securities") (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 5.1(a) is referred to
herein as a "Demand Registration".
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 5.1(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.
(2) Number of Demand Registrations. The holders
of Registrable Securities will be entitled to request two (2) 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, 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.
(3) 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
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<PAGE> 6
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.
(4) 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.
(5) 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 5.2 Piggyback Registrations.
(1) Right to Piggyback Registrations. Whenever
Issuer proposes to register any of its Common Stock under the Securities Act
(other than any registration SEC Form S-4 or SEC Form S-8 or any successor
forms), 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. A request pursuant to this Section 5.2(a) shall state
the number of Registrable Securities requested to be registered. In connection
with any registration subject to this Section 5.2(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
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 5.2(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 5.2(a)
are referred to herein as "Piggyback Registrations". No registration effected
under this Section 5.2(a) shall relieve Issuer of its obligation to effect a
Demand Registration pursuant to Section 5.1.
(2) Priority on Primary Registrations. If a
Piggyback Registration is an underwritten primary registration on behalf of
Issuer, and the managing underwriters advise Issuer
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<PAGE> 7
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 sale, Issuer will include in such
registration (regardless of whether any holder initially requested such
registration) (i) first, the securities Issuer proposes to sell, (ii) second,
those Registrable Securities requested to be included by the holders thereof
which in the opinion of such managing underwriters can be sold, pro rata among
the respective holders thereof on the basis of the amount of such securities
owned, and (iii) third, 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.
(3) Priority on Secondary Registrations. If a
Piggyback Registration is an underwritten secondary registration on behalf
of holders of Issue'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.
(4) 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 5.3 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.
Section 5.4 Lockup Agreement.
(1) 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 any other Registrable Securities
(or other securities) of Issuer for a period not to exceed 30 days prior to or
up to 180 days following the effective date of a registration statement of
Issuer filed under the Securities Act, provided that all officers and directors
and stockholders owning ten percent (10%) 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
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<PAGE> 8
impose stop transfer instructions with respect to the shares (or securities)
subject to the foregoing restriction until the end of said 90-day period.
(2) Issuer agrees 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 (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.
Section 5.5 Termination of Certain Rights and
Obligations. Notwithstanding the foregoing provisions of this Agreement, the
rights to registration pursuant to Sections 5.1 and 5.2, the obligations of
Purchaser pursuant to Section 5.4(1), and the obligations of Issuer and the
holders of 25% or more of its equity securities pursuant to Section 5.4(2) 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, (c) sold or
distributed pursuant to Rule 144 or (d) eligible for sale under Rule 144 within
a 60-day period.
Section 5.6 Registration Procedures. Whenever the
Offerors have requested that any Registrable Securities be registered pursuant
to this Agreement, Issuer will use its best efforts to 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:
(1) 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;
(2) 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;
(3) 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
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<PAGE> 9
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;
(4) 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 (iii) consent to service of process
except as required by the securities or blue sky laws in any such jurisdiction);
(5) 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 Purchaser of such Registrable Securities, such prospectus will
not contain 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;
(6) 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, if any, on which similar securities issued by Issuer are then listed or
quoted.
(7) 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;
(8) 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;
(9) 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
(10) 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
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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 Rule 144 adopted by the SEC under the Securities Act, as such rule
may be amended from time to time, or any successor rule or regulation hereafter
adopted by 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 5.7 Registration Expenses.
(1) 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 5.6(8)) and other Persons retained by Issuer (all such
expenses being herein called "Registration Expenses"), will be borne by Issuer.
Discounts and commissions to underwriters shall not be considered Registration
Expenses for purposes of this Agreement and will be borne by the holders of
Registrable Securities. 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.
(2) 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, provided that the costs
and expenses of such counsel in connection with any such registration will not
exceed $25,000.
(3) 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
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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 5.8 Indemnification.
(1) 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:
(2) 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 any holder of
Registrable Securities expressly for use therein or by any holder of Registrable
Securities' failure to deliver a copy of the registration statement or
prospectus or any amendments or supplements thereto;
(3) 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 any holder of Registrable Securities expressly
for use therein or by any holder's failure to deliver a copy of the registration
statement or prospectus or any amendments or supplements thereto; and
(4) 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 any holder of Registrable Securities 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.
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<PAGE> 12
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.
(5) 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 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, an "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.
(6) 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.
(7) 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.
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<PAGE> 13
Section 5.9 Contribution. In order to provide for just
and equitable contribution in circumstances under which the indemnity
contemplated by Section 5.8 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 agreement incurred by any Purchaser Indemnitee, any Issuer
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 6.8 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 5.9, 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 5.10 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 5.11 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.
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ARTICLE VI
ADDITIONAL RIGHTS AND COVENANTS
Section 6.1 Cooperation and Full Access. Issuer shall
give to Purchaser and its counsel, accountants, advisers and other
representatives, reasonable 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. Issuer shall furnish, and shall direct its
independent accountants and legal counsel to furnish, to Purchaser all such
documents and information concerning the assets, properties, liabilities and
affairs of Issuer as Purchaser may from time to time reasonably request.
Section 6.2 Right of First Refusal. Subject to Paragraph
(9) of this Section 6.2, in the event that the Merger Agreement is terminated
for any reason (other than pursuant to Section 10.1(d) of the Merger Agreement),
Purchaser shall have a right of first refusal (the "Right of First Refusal")
with respect to the sale, exchange or other disposition of any or all of the PCS
licenses held by Issuer (each, a "PCS License" and collectively, the "PCS
Licenses") other than any sale, exchange or other disposition of any PCS License
to any Affiliate of Issuer who agrees to be bound by and comply with the
provisions of this Section 6.2. In the event that the Merger Agreement is
terminated for any reason (other than pursuant to Section 10.1(d) of the Merger
Agreement), Issuer shall not sell, exchange or otherwise dispose of any PCS
License (other than any sale, disposition or exchange of any PCS License to any
Affiliate of Issuer who agrees to be bound by and comply with the provisions of
this Section 6.2) unless it shall have first complied with this Section 6.2. The
Right of First Refusal shall operate as set forth below, and extend for two (2)
years from the date of termination of the Merger Agreement:
(1) Within three (3) business days of
commencement of the negotiation of a term sheet, letter of intent, or letter of
interest, in each case, with respect to any sale, exchange or other disposition
of any PCS License, whether binding or non-binding, or preparation of a
definitive agreement to sell, exchange or otherwise dispose of one or more of
its PCS Licenses (each, a "Negotiation"), Issuer shall deliver to Purchaser a
written notice of such Negotiation and shall use commercially reasonable efforts
to inform Purchaser of such Negotiation in a timely manner and to provide
Purchaser with all information as may be reasonably requested with respect to
such Negotiation including, without limitation, any documentation with respect
thereto. Upon agreement of the definitive terms of a proposed transaction,
Issuer shall provide to Purchaser a written notice of any bona fide proposed
sale, exchange or other disposition of one or more PCS Licenses which shall (w)
identify the PCS License or Licenses proposed to be sold, exchanged or otherwise
disposed of (the "Subject Licenses"), (x) describe the consideration and other
terms upon which the Subject Licenses are to be sold, exchanged or otherwise
disposed of, (y) identify the persons or entities to or with whom the Subject
Licenses are to be sold, exchanged or otherwise disposed of (the "Proposed
Buyer"), and (z) offer to sell, exchange or dispose of the Subject Licenses to
Purchaser on equivalent or better terms (the "First Refusal Offer").
(2) To accept a First Refusal Offer,
Purchaser must deliver a written notice to Issuer within 30 days of receipt of
the First Refusal Offer, setting forth Purchaser's irrevocable
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<PAGE> 15
election to accept the First Refusal Offer to purchase all but not less than all
the Subject Licenses on the terms set forth therein (the "Acceptance"). The
Acceptance will be accompanied by reasonable written evidence demonstrating that
Purchaser has sufficient cash on hand or commitments (the terms of which are
consistent with customary commercial lending practices for fully-underwritten
financing commitments) available to consummate the transactions contemplated by
the Acceptance. If Purchaser does not deliver such evidence together with the
Acceptance in form and substance reasonably acceptable to Issuer, Purchaser
shall be deemed to have failed to deliver the Acceptance within the 30-day time
period contemplated by the first sentence of this Section 6.2(2).
(3) In the event that a proposed
transaction with a Proposed Buyer envisions receipt by the Issuer of
consideration other than cash for the Subject Licenses, Purchaser's Acceptance
of a First Refusal Offer may include consideration in the form of cash, one or
more promissory notes, the capital stock the Purchaser (or its successor or
parent entity), or any combination thereof (the "Purchaser's Consideration").
If, within three days of receipt of the Acceptance, Issuer disputes that
Purchaser's Consideration is equal to or greater in value than the offer of the
Proposed Buyer (the "Proposed Buyer's Consideration"), Issuer shall so inform
Purchaser in writing and such dispute shall be resolved as follows:
(a) If Issuer informs
Purchaser that it deems Purchaser's Acceptance to be inferior to the proposed
transaction agreed to with the Proposed Buyer, then the parties shall engage
Allen & Co. (the "Bank") to determine whether Purchaser's Consideration is
inferior to Proposed Buyer's Consideration, and recommend what changes, if any,
would make Purchaser's Consideration equal in value to Proposed Buyer's
Consideration (the "Recommendation"). The determinations of the Bank shall be
binding, final and conclusive upon Issuer and Purchaser.
(b) In the event that
Purchaser's Consideration is appraised to be equal to or greater in value than
Proposed Buyer's Consideration, Issuer shall pay all costs of the Recommendation
hereunder. In the event that Purchaser's Consideration is appraised to be
inferior to Proposed Buyer's Consideration, Purchaser shall be pay all costs of
the Recommendation hereunder.
(c) In the event that the Bank
has determined that Purchaser's Consideration is inferior to Proposed Buyer's
Consideration, Purchaser shall have three (3) days to submit a revised
Acceptance containing the changes set forth in the Recommendation (the "Revised
Acceptance"). If Purchaser submits the Revised Acceptance within such three (3)
day period to Issuer, Issuer shall accept the Revised Acceptance and shall
proceed to consummate the transaction with Purchaser, as set forth in Section
6.2(b).
(4) If Issuer fails to notify Purchaser of
its challenge to Purchaser's Acceptance within three (3) days after its
receipt thereof, Issuer shall be deemed to have accepted the Acceptance and
shall proceed to consummate the transaction with Purchaser, as set forth in
Section 6.2(6).
(5) If Purchaser fails to deliver the
Acceptance within the 30-day time period referred to in Section 6.2(2), or the
Revised Acceptance within the 3-day period referred to in Section
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6.3(d), Issuer shall be free to proceed with the sale, exchange or other
disposition of the Subject Licenses to the Proposed Buyer.
(6) If Purchaser delivers to Issuer an
Acceptance within the 30-day time frame contemplated by Section 6.2(2) or the
Revised Acceptance within the 3-day time frame contemplated by Section
6.2(3)(d), as the case may be, and otherwise complies with the requirements of
Section 6.2(2), Issuer and Purchaser shall proceed to consummate the sale of the
Subject Licenses by Issuer to Purchaser contemplated by the Acceptance or the
Revised Acceptance, as the case may be, as soon as practicable and in any event
on or before the fifteenth (15th) day following the later of (i) expiration or
termination of the applicable waiting period under the HSR Act (as defined in
the Merger Agreement) and (ii) receipt of the written consent of the FCC to the
transfer of such Subject Licenses (the "Right of First Refusal FCC Consent").
Notwithstanding the foregoing, if the applicable waiting period under the HSR
Act has not expired or been terminated within 270 days, or the Right of First
Refusal FCC Consent has not been obtained within 360 days (the "Consent Period
End Date"), in each case, of the date of Acceptance or the Revised Acceptance,
as the case may be, Issuer shall be free to proceed with the sale, exchange or
other disposition of such Subject Licenses to any third party on any terms
acceptable to Issuer at any time without again complying with the terms of this
Section 6.2.
(7) Purchaser and Issuer shall cooperate
as necessary to prepare and file, within five (5) business days following
receipt by Issuer of the Acceptance or the Revised Acceptance, as the case may
be, from Purchaser, (i) the notification forms required pursuant the HSR Act,
and (ii) such applications to the FCC as required to obtain the Right of First
Refusal FCC Consent. Thereafter, Issuer and Purchaser shall cooperate as
reasonably necessary to obtain expiration or termination of the waiting period
required under the HSR Act, and to obtain the Right of First Refusal FCC
Consent.
(8) This Section 6.2 shall terminate and
be of no further force and effect on the second anniversary of the date on
which the Merger Agreement is terminated (the "Right of First Refusal End
Date").
(9) In the event that either (i) with
respect to any First Refusal Offer, the Right of First Refusal FCC Consent is
not obtained by the Consent Period End Date with respect to such First Refusal
Offer based on the FCC's rejection or denial of an application to assign the
Subject Licenses of such First Refusal Offer to the Purchaser for a reason that
would also apply to any application for Issuer to assign to Purchaser any of the
PCS Licenses that were not included in the Subject Licenses, or (ii) the Merger
Agreement is terminated as a result of failure to receive FCC Consent based on
the FCC's rejection or denial of an application to approve the Merger due to the
Purchaser's ineligibility to hold any of the PCS Licenses, the Purchaser shall
no longer have the Right of First Refusal or the rights provided by this Section
6.2; provided, that, notwithstanding anything to the contrary contained herein,
the Purchaser may assign the Right of First Refusal and its rights under this
Section 6.2 to another purchaser of its choosing that shall be eligible to hold
any of the PCS Licenses in accordance with the applicable FCC rules and
regulations.
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Section 6.3 Transactions, Agreements, etc. Except as
expressly provided in the Merger 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 6.4 Fees and Expenses.
(a) Issuer shall incur no more than
$500,000 in legal and accounting fees and expenses in connection with the
negotiation, documentation and consummation of the transactions contemplated by
this Agreement and the Merger Agreement.
(b) Simultaneously with the
execution of this Agreement, Issuer shall place in escrow $150,000 (such amount,
together with all interest thereon, collectively the "Escrow Fund"). In the
event the Merger Agreement is terminated in accordance with its terms, the
Escrow Fund shall be released to Gabelli & Company, Inc. in full satisfaction of
all of Issuer's obligations for payment of investment banker, broker, finder or
similar fees. In the event that the transactions contemplated by the Merger
Agreement have been consummated, at the Closing (as defined in the Merger
Agreement), the Escrow Fund shall be released to Purchaser.
Section 6.5 Restrictions on Transfer.
(a) Purchaser understands and agrees
that the Stock it will be acquiring has not been registered under the
Securities Act of 1933 (the "Securities Act"), and that, accordingly, the Stock
will not be transferable except as permitted under various exemptions contained
in the Securities Act, or upon satisfaction of the registration and prospectus
delivery requirements of the Securities Act. Purchaser acknowledges that it must
bear the economic risk of its investment in the Stock for an indefinite period
of time because the Stock has not been registered under the Securities Act and
therefore cannot be sold unless they are subsequently registered or an exemption
from registration is available.
(b) Purchaser agrees with Issuer as
follows:
(i) The certificates
evidencing the shares of Stock it has agreed to purchase, and each certificate
issued in transfer thereof, will bear the following legend:
"THE SECURITIES EVIDENCED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 AND MAY NOT BE
SOLD OR TRANSFERRED UNLESS THERE IS AN
EFFECTIVE REGISTRATION STATEMENT COVERING
SUCH SECURITIES OR THE COMPANY
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<PAGE> 18
RECEIVES AN OPINION OF COUNSEL (WHICH
COUNSEL AND OPINION ARE REASONABLY
SATISFACTORY TO THE COMPANY) STATING THAT
SUCH SALE OR TRANSFER IS EXEMPT FROM THE
REGISTRATION AND PROSPECTUS DELIVERY
REQUIREMENTS OF SUCH ACT."
(ii) The certificates representing the
Shares and each certificate issued in transfer thereof, will also bear
any legend required under any applicable state securities laws.
(iii) Absent an effective registration
statement under the Securities Act covering the disposition of the
Company's securities acquired by Purchaser, Purchaser will not sell, transfer,
assign, pledge, hypothecate or otherwise dispose of any or all of such
securities without first providing the Issuer with an opinion of counsel (which
counsel and opinion are reasonably satisfactory to the Issuer) that such
disposition is exempt from the registration and prospectus delivery requirements
of the Securities Act and has been registered or qualified under (or is exempt
from the registration and qualification requirement of) any applicable state
securities laws.
ARTICLE VII
CLOSING CONDITIONS
Section 7.1 Conditions to Purchaser's Obligations at the
Closing. The obligations of Purchaser under this Agreement are subject to the
fulfillment on or before the Closing of each of the following conditions:
(1) Performance. Issuer shall have executed and
delivered certificates representing the 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 Closing.
(2) Proceedings and Documents. All corporate
and other proceedings in connection with the transactions contemplated at the
Closing and all documents incident thereto shall be reasonably satisfactory in
form and substance to Purchaser and its counsel, and Purchaser shall have
received all such counterpart original, certified and other copies of such
documents as Purchaser may reasonably request.
(3) 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
Merger Agreement, or would require Issuer or
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Purchaser, in the reasonable opinion of Purchaser, 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 Purchaser pursuant to the Merger Agreement.
(4) Opinion of Company Counsel. Purchaser shall
have received from Latham & Watkins, counsel to Issuer, a legal opinion
addressed to Purchaser, dated as of the Closing Date, in the form and substance
reasonably satisfactory to Purchaser.
(5) 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.
(6) Secretary's Certificate. Purchaser 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 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 Closing, (iii) 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 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
Closing, the issuance, delivery and sale of the 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 Closing Date.
(7) Voting Agreement. Purchaser shall have
received a Voting Agreement, in the form circulated among the parties with this
Agreement, executed by Issuer stockholder Aer Force Communications, Inc.
(8) Additional Documents. Purchaser 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 Article VII.
Section 7.2 Conditions to Issuer's Obligations at the
Closing. The obligations of Issuer to Purchaser under this Agreement are subject
to the fulfillment on or before the Closing of each of the following conditions
by Purchaser:
(1) Payment of Purchase Price. Purchaser shall
have delivered the purchase price for its Shares in accordance with Section 1.1.
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<PAGE> 20
(2) Consents. All consents, approvals and
authorizations of, and filings, registrations and qualifications with, any
governmental authority or any other party on the part of Purchaser 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.
(3) Secretary's Certificate. Issuer shall have
received a Certificate of the Secretary of Purchaser (i) certifying that no
document has been filed relating to or affecting the Charter of Purchaser after
the date of the Certificate of the Secretary of State of the State of Delaware
delivered pursuant to clause (iii) of this subsection, (ii) certifying the names
and true signatures of each officer of Purchaser who has been authorized to
execute and deliver this Agreement and any other document delivered by Purchaser
pursuant to the Closing, (iii) 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 Purchaser, as in full force and effect at the 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
Purchaser pursuant to the Closing, the issuance, delivery and sale of the 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 Closing Date.
ARTICLE VIII
TERMINATION
8.1 Termination. This Agreement may be terminated:
(1) by mutual written agreement of the parties
hereto; or
(2) by either Issuer or Purchaser upon
consummation of the transactions contemplated by the Merger Agreement.
8.2 Effect of Termination. If this Agreement is terminated
pursuant to Section 8.1, this Agreement shall become void and of no effect
without liability 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 set forth in Article V (Registration Rights) shall
survive the termination of this Agreement and shall terminate in accordance with
the terms, if any, set for in that Article. No such termination shall relieve
any Party of any liability or damages resulting from any breach by such party of
this Agreement.
8.3 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.
ARTICLE IX
MISCELLANEOUS
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<PAGE> 21
Section 9.1 Notices. All notices, requests and
other communications to any party hereunder shall be in writing (including
facsimile transmission) and shall be given,
if to Purchaser, to:
Omnipoint Corporation
Three Bethesda Metro Center
Suite 400
Bethesda, MD 20814
Attention: Douglas G. Smith
Phone: (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.
Phone: (202) 861-3900
Fax: (202) 233-2085
If to Issuer, to:
East/West Communications, Inc.
350 Stuyvesant Avenue
Rye, New York 10580
Attention: Victoria G. Kane
Phone: (914) 921-6300
Fax: (203) 629-3680
With a copy to:
Latham & Watkins
1001 Pennsylvania Avenue, N.W.
Suite 1300
Washington, D.C. 20004
Attention: James Barker, Esq.
Daniel T. Lennon, Esq.
Phone: (202) 637-2200
Fax: (202) 637-2201
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
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<PAGE> 22
deemed received on the date of receipt by the recipient thereof if received
prior to 5:00 p.m. on a 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 9.2 Survival of Warranties. The warranties, representations,
certifications and covenants of Issuer and Purchaser contained in or made
pursuant to this Agreement shall survive each of (a) the execution and delivery
of this Agreement, and (b) the Closing, for a period of six months following the
Closing, and shall in no way be affected by any investigation of the subject
matter thereof made by or on behalf of Purchaser.
Section 9.3 Indemnification. Issuer agrees to indemnify the
Purchaser and its Affiliates, and the shareholders, members, managers, officers,
employees, agents and or legal representatives of any of them (each, a
"Purchaser Indemnified Party") and to hold each Purchaser 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 Purchaser 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 Purchaser 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 V, to the
provisions set forth in Section 5.8. Issuer shall reimburse each Purchaser
Indemnified Party promptly for all such Losses as they are incurred by such
Purchaser Indemnified Party.
Purchaser agrees to indemnify the Issuer and its
Affiliates, and the shareholders, members, managers, officers, employees, agents
and or legal representatives of any of them (each, an "Issuer Indemnified
Party") and to hold each Issuer 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 Issuer 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 Issuer Indemnified Party relating to, based upon, resulting
from or arising out of (a) the breach by Purchaser of any representation,
warranty, covenant or agreement of Purchaser contained herein, (b) this
Agreement or the transactions contemplated hereby, subject, in the case of the
registration rights described in Article V, to the provisions set forth in
Section 5.8. Purchaser shall reimburse each Issuer Indemnified Party promptly
for all such Losses as they are incurred by such Issuer Indemnified Party.
Notwithstanding any other provisions hereof, no
indemnified party shall be entitled to make a claim against an indemnitor (an
"Indemnitor") in respect of any breach of this Agreement except to the extent
that the aggregate amount of such damages exceeds the amount of FIFTY
22
<PAGE> 23
THOUSAND DOLLARS ($50,000) (the "Threshold Amount"); provided, however, that
once such aggregate has been exceeded, such Indemnitor shall only be liable for
the amount that such damages exceed the Threshold Amount. Notwithstanding any
other provision of the Agreement, neither the indemnity obligation of Issuer nor
the indemnity obligation of Purchaser will exceed the amount payable by
Purchaser for the Stock pursuant to Section 1.1.
Section 9.4 Amendments; No Waivers.
(1) 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.
(2) 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 9.5 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 9.6 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 9.7 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 9.8 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.
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<PAGE> 24
Section 9.9 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 9.10 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 9.11 Captions. The captions herein are included for
convenience of reference only and shall be ignored in the construction or
interpretation hereof.
Section 9.12 Definitions, Gender, Number, etc. Unless otherwise
defined herein, capitalized terms used herein shall have the meanings specified
in the Merger Agreement 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 or Article such reference shall
be to a Section or Article 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.
Section 9.13 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 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 9.14 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.
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<PAGE> 25
[Signatures on next page.]
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<PAGE> 26
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.
OMNIPOINT CORPORATION
By: /s/ DOUGLAS G. SMITH
----------------
Douglas G. Smith
President
EAST/WEST COMMUNICATIONS, INC.
By: /s/ VICTORIA G. KANE
----------------
Victoria G. Kane
Chairman
<PAGE> 1
EXHIBIT 9.1
VOTING AGREEMENT
THIS VOTING AGREEMENT (the "Agreement") is dated October
22, 1999, by and among East/West Communications, Inc., a Delaware corporation
("East West"), Omnipoint Corporation, a Delaware corporation ("Omnipoint"), and
the entity set forth on Schedule I hereto (the "East West Stockholder").
RECITALS
WHEREAS, concurrently herewith, East West and Omnipoint
are entering into an Agreement and Plan of Merger (the "Merger Agreement")
pursuant to which, among other things, East West will merge with and into
Omnipoint (such merger, together with the related transactions contemplated in
the Merger Agreement, being referred to herein as the "Merger");
WHEREAS, the East West Stockholder is the beneficial
owner of the number of shares of East West capital stock set forth opposite
the East West Stockholder's name in Schedule I hereto (the "East West Shares");
WHEREAS, approval of the Merger Agreement by the East
West Stockholder is a condition to the consummation of the Merger; and
WHEREAS, as a condition to its entering into the Merger
Agreement, Omnipoint has required that the East West Stockholder agree, and
the East West Stockholder has agreed, to enter into this Agreement;
AGREEMENT
NOW THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements set forth herein, the parties hereto agree
as follows:
1. Definitions. Capitalized terms used herein
and not otherwise defined have the meaning ascribed to such terms in the
Merger Agreement.
2. Agreement to Vote by East West Stockholder.
a. The East West Stockholder hereby
agrees, either (i) to attend the East West stockholders' meeting (if such
meeting is held), in person or by proxy or (ii) by written consent, to vote (or
cause to be voted) all East West Shares, and any other voting securities of East
West, beneficially owned by the East West Stockholder (whether issued heretofore
or hereafter) that the East West Stockholder owns or has the right to vote, in
favor of adoption and approval of the Merger Agreement, the Merger, and any
other matters necessary to consummate the transactions contemplated in the
Merger Agreement. Such agreement to vote shall apply also to any adjournment or
adjournments of the East West stockholders' meeting.
<PAGE> 2
b. From and after the date hereof
through the earlier of the Effective Time and the termination of the Merger
Agreement, the East West Stockholder hereby agrees not to sell, transfer,
pledge, encumber or otherwise dispose of (collectively, "Transfer") any East
West Shares beneficially owned by the East West Stockholder on the date hereof.
Any such Transfer of East West Shares shall be null and void, and such
transferee shall have no rights as a stockholder of East West.
c. To the extent inconsistent with
the foregoing provisions of this Section 2, the East West Stockholder hereby
revokes any and all previous proxies granted by the East West Stockholder with
respect to the East West Stockholder's East West Shares or any other voting
securities of East West.
3. Representations and Warranties of East West
and Omnipoint.
a. East West represents and
warrants to Omnipoint as follows: (i) each of this Agreement and the Merger
Agreement has been approved by the Board of Directors of East West and (ii) each
of this Agreement and the Merger Agreement has been duly executed and delivered
by East West and constitutes its valid and binding agreement, enforceable
against it in accordance with its terms, except as may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium and other similar laws of
general application which may affect the enforcement of creditors' rights
generally and by general equitable principles.
b. Omnipoint represents and
warrants to East West and the East West Stockholder as follows: (i) each of this
Agreement and the Merger Agreement has been approved by the Board of Directors
of Omnipoint and (ii) each of this Agreement and the Merger Agreement has been
duly executed and delivered by Omnipoint and constitutes its valid and binding
agreement, enforceable against it in accordance with its terms, except as may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium and
other similar laws of general application which may affect the enforcement of
creditors' rights generally and by general equitable principles.
4. Representations and Warranties of the East
West Stockholder. The East West Stockholder represents and warrants to
Omnipoint as follows: (i) this Agreement has been duly executed and delivered by
the East West Stockholder and constitutes its valid and binding agreement,
enforceable against it in accordance with its terms, except as may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium and other similar
laws of general application which may affect the enforcement of creditors'
rights generally and by general equitable principles; and (ii) the East West
Shares listed next to the name of the East West Stockholder on Schedule I hereto
are the only voting securities of East West owned (beneficially or of record) by
it.
5. Effectiveness and Termination. It is a
condition precedent to the effectiveness of this Agreement that the Merger
Agreement shall have been executed and delivered and be in full force and
effect. In the event the Merger Agreement is terminated in accordance with its
terms, this Agreement shall automatically terminate and be of no further force
or effect. Upon such termination, except for any rights any party may have in
respect of any breach by any other party of its or his
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<PAGE> 3
obligations hereunder, none of the parties hereto shall have any further
obligation or liability hereunder.
6. Miscellaneous.
a. Notice. All notices, requests
and other communications to any party hereunder shall be in writing
(including facsimile transmission) and shall be given,
if to East West, to it at:
East/West Communications, Inc.
350 Stuyvesant Avenue
Rye, New York 10580
Attention: Victoria G. Kane
Phone: (914) 921-6300
Fax: (203) 629-3680
With a copy to:
Latham & Watkins
1001 Pennsylvania Avenue, N.W.
Suite 1300
Washington, D.C. 20004
Attention: James Barker, Esq.
Daniel T. Lennon, Esq.
Phone: (202) 637-2200
Fax: (202) 637-5265
if to any East West Stockholder, to it at the address set forth on Schedule I
hereto;
if to Omnipoint, to it at:
Omnipoint Corporation
3 Bethesda Metro Center
Suite 400
Bethesda, Maryland 20814
Attention: Douglas G. Smith
Fax: 301-951-3591
with a copy to:
Piper & Marbury L.L.P.
1200 Nineteenth Street, N.W.
Washington, D.C. 20036
-3-
<PAGE> 4
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 be deemed not to have been received until the next succeeding Business Day
in the place of receipt.
b. Amendments; No Waivers.
(i) 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.
(ii) 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.
c. Successors and Assigns. This
Agreement shall be binding upon and shall inure to the benefit of and be
enforceable by the parties and their respective successors and assigns,
including, without limitation, in the case of any corporate party hereto any
corporate successor by merger or otherwise, and in the case of any individual
party hereto any trustee, executor, heir, legatee or personal representative
succeeding to the ownership of such party's shares of East West stock or other
securities subject to this Agreement. Notwithstanding any Transfer of shares of
East West stock, the transferor shall remain liable for the performance of all
obligations of such transferor under this Agreement.
d. 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.
e. 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
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<PAGE> 5
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 6.a shall be deemed effective service of
process on such party.
f. 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.
g. 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.
h. Entire Agreement. This
Agreement, together with the Merger 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 such subject matter.
i. Captions. The captions herein
are included for convenience of reference only and shall be ignored in the
construction or interpretation hereof.
j. 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
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.
k. 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.
l. Remedies Cumulative. All
rights, powers and remedies provided under this Agreement or otherwise available
in respect hereof at law or in equity shall be cumulative and
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<PAGE> 6
not alternative, and the exercise or beginning of the exercise of any thereof by
any party shall not preclude the simultaneous or later exercise of any other
such right, power or remedy by such party.
m. Limitation on Liability. No
party hereto shall have any liability hereunder for any actions or omissions
of any other party hereto.
n. Expenses. Each party hereto
shall bear its own expenses incurred in connection with this Agreement.
o. Further Assurances. Each party
hereto agrees that such party shall execute and deliver such additional
instruments and other documents and shall take such further actions as may be
necessary or appropriate to effectuate, carry out and comply with all of their
obligations under this Agreement. Without limiting the generality of the
foregoing, none of the parties hereto shall enter into any agreement or
arrangement (or alter, amend or terminate any existing agreement or arrangement)
if such action would impair the ability of any party to effectuate, carry out or
comply with all the terms of this Agreement.
[Signatures on following pages.]
-6-
<PAGE> 7
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
EAST/WEST COMMUNICATIONS, INC.
By: /s/ VICTORIA G. KANE
----------------
Victoria G. Kane
Chief Executive Officer
OMNIPOINT CORPORATION
By: /s/ DOUGLAS G. SMITH
----------------
Douglas G. Smith
Chief Executive Officer
EAST WEST STOCKHOLDER
---------------------
[Class A Common Stockholders]
AER FORCE COMMUNICATIONS, INC.
By: /s/ VICTORIA G. KANE
----------------
Victoria G. Kane
President
<PAGE> 8
SCHEDULE I
EAST WEST STOCKHOLDER
---------------------
<TABLE>
<CAPTION>
NUMBER AND CLASS
NAME AND ADDRESS OF STOCKHOLDER OF EAST WEST SHARES
<S> <C>
Aer Force Communications, Inc.
350 Stuyvesant Avenue 1,779,301 shares of
Rye, New York 10580 Class B Common Stock
</TABLE>
<PAGE> 1
EXHIBIT 10.1
AGREEMENT
THIS AGREEMENT (the "Agreement") is dated October 22, 1999, by and
among East/West Communications, Inc., a Delaware corporation ("East West"),
Omnipoint Corporation, a Delaware corporation ("Omnipoint"), VoiceStream
Wireless Corporation, a Washington corporation ("VoiceStream"), and VoiceStream
Wireless Holding Corporation, a Delaware corporation ("Holdings"). East West,
Omnipoint, VoiceStream, and Holdings shall be referred to herein as the
"Parties".
RECITALS
WHEREAS, concurrently herewith, East West and Omnipoint are
entering into an Agreement and Plan of Merger (the "Merger Agreement") pursuant
to which, among other things, East West will merge with and into Omnipoint (such
merger, together with the related transactions contemplated in the Merger
Agreement, being referred to herein as the "Merger");
WHEREAS, as a condition to its entering into the Merger Agreement,
East West has required that the Parties enter into this Agreement;
WHEREAS, it is desired that the Merger qualify as a tax-free
reorganization under Section 368(a) of the Internal Revenue Code of 1986, as
amended (the "Code");
AGREEMENT
NOW THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements set forth herein, the parties hereto agree as follows:
1. Definitions. Capitalized terms used herein and not
otherwise defined have the meaning ascribed to such terms in the Merger
Agreement.
2. Consent to the Merger Agreement; Amendment of VoiceStream
Merger Agreement.
(a) Pursuant to Section 6.1 of the VoiceStream Merger
Agreement, VoiceStream hereby consents to the Merger Agreement and the
Transactions, including, without limitation, Article 11 of the Merger Agreement.
In addition, to the extent that the Merger is consummated after the VoiceStream
Merger, Holdings hereby agrees to cause Omnipoint to perform its obligations
under the Merger Agreement and the Transactions, and agrees to perform its
obligations under the Merger Agreement and the Transactions as if it were a
party thereto.
(b) Each of Omnipoint, VoiceStream and Holdings hereby
agrees to amend the VoiceStream Merger Agreement (the "Initial Amendment") as
soon as practicable after the date hereof, but in no event later than the
Effective Time, as may be necessary to effectuate the exchange of each Merger
Share that is issued and outstanding immediately after the Effective Time and
immediately prior to the effective time of the VoiceStream Merger for
<PAGE> 2
the right to receive the Standard Election Consideration (as defined in the
VoiceStream Merger Agreement) multiplied by the Conversion Ratio. The terms and
substance of the Initial Amendment shall be reasonably acceptable to East West.
(c) Following the Initial Amendment, unless the Merger
Agreement is terminated, each of Omnipoint, VoiceStream and Holdings hereby
agrees not to amend the VoiceStream Merger Agreement in a manner that would,
upon the effective time of the VoiceStream Merger, result in the failure of
holders of Series E Preferred Stock to receive the right to receive the Standard
Election Consideration multiplied by the Conversion Ratio, unless as a result of
such amendment the holders of Series E Preferred shall have the right to receive
the same consideration that the holders of Omnipoint Common Stock receive in
lieu of the Standard Election multiplied by the Conversion Ratio, assuming for
this paragraph that prior to such amendment, such holders of Omnipoint Common
Stock elected to receive the Standard Election Consideration and did not modify
such election.
3. Recapitalization of Omnipoint Preferred Stock. Prior to or
simultaneously with the consummation of the VoiceStream Merger, each of
VoiceStream and Omnipoint hereby agree that the Omnipoint Preferred Stock shall
be recapitalized in accordance with the terms set forth below (the
"Recapitalization"):
(a) The Certificate of Designation establishing the
designations, powers, preferences, limitations, restrictions, and relative
rights of the 7% Cumulative Convertible Preferred Stock of Omnipoint (the
"Convertible Preferred") shall be amended to provide that the Convertible
Preferred shall be entitled to 10,445,123 votes which is the number of votes
equal in the aggregate to the number of votes to which the number of whole
shares of the common stock of Omnipoint (the "Common Stock") into which such
shares of Convertible Preferred are convertible would be entitled with respect
to any and all matters presented to the stockholders of Omnipoint for their
action or consideration assuming a conversion price of $31.115 per share, and
shall vote with the holders of shares of the Common Stock and any other class of
stock entitled to vote and not as a separate class.
(b) The Certificate of Designation establishing the
designations, powers, preferences, limitations, restrictions, and relative
rights of the Series A Non-Voting Convertible Preferred Stock of Omnipoint (the
"Series A Convertible Preferred") shall be amended to provide that the Series A
Convertible Preferred shall be entitled to 8,750,000 votes which is the number
of votes equal in the aggregate to seven-tenths (7/10ths) the number of votes to
which the number of whole shares of Common Stock into which such shares of
Series A Convertible Preferred are convertible would be entitled with respect to
any and all matters presented to the stockholders of Omnipoint for their action
or consideration, and shall vote with the holders of shares of Common Stock and
any other class of stock entitled to vote and not as a separate class.
4. Reserved.
5. Representations, Warranties and Covenants of Holdings.
Holdings hereby represents, warrants and covenants to each of the other Parties
as follows:
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(a) Effect of Recapitalization and Conversion of Series
A Convertible Preferred. Assuming the validity of the Recapitalization under
applicable state law, as a result of the Recapitalization and the Transfer and
the Holdings Conversion, if applicable, immediately after the VoiceStream
Merger, Holdings (1) will directly own shares of the capital stock of Omnipoint
representing at least 80% of the total combined voting power of all outstanding
shares of all classes of Omnipoint stock, (the "80% Voting Power") (2) will
"control" Omnipoint within the meaning of Code Section 368(c) as in effect on
the date hereof and (3) has no current plan or intention to take, any action
that would result in Holdings owning less than the 80% Voting Power or take any
other action that would prevent Holdings from controlling Omnipoint subsequent
to the VoiceStream Merger within the meaning of Section 368(c) of the Code as in
effect on the date hereof.
(b) Holdings has no current plan or intention to dispose
of any of the capital stock of Omnipoint, provided, however, that Holdings may
transfer stock of Omnipoint to a single member limited liability company which
is treated as a disregarded entity (under Treas. Reg. Section 301.7701-3) for
federal income tax purposes.
(c) Provided that, at the later of the Effective Time of
the Merger and the effective time of the VoiceStream Merger if it occurs after
the Merger, the Merger qualifies as a reorganization within the meaning of Code
Section 368(a) as in effect on the date hereof, Holdings will not take or cause
Omnipoint to take, any action after such later time that would cause the Merger
to fail so to qualify.
6. Representation and Warranties of Omnipoint. Omnipoint
hereby represents and warrants to each of the Parties that: (i) as of the close
of business on October 19, 1999, Omnipoint had outstanding 53,857,909 shares of
Common Stock; (ii) as of the date hereof, Omnipoint has outstanding 12,500
shares of Series A Convertible Preferred, 50 percent of which is owned by
Hutchison and 50 percent of which is owned by VoiceStream which is convertible
into 12,500,000 shares of Omnipoint Common Stock and 325,000 shares of
Convertible Preferred Stock, which is convertible into 10,445,123 shares of
Omnipoint Common Stock; and (iii) no action or consent on the part of Hutchinson
Telecommunications PCS (USA) Limited or any other party (other than VoiceStream
and Omnipoint) is required to effect the Recapitalization.
7. Representations, Warranties and Covenants of VoiceStream.
VoiceStream hereby represents and warrants to each of the other parties that
VoiceStream holds 6,250 shares of Series A Convertible Preferred and has no
current plan or intention to dispose of any such shares or convert such shares
to Omnipoint Common Stock.
8. Reserved.
9. Effectiveness and Termination. It is a condition precedent
to the effectiveness of this Agreement that the Merger Agreement shall have been
executed and delivered and be in full force and effect. In the event the Merger
Agreement is terminated in accordance with its terms, this Agreement shall
automatically terminate and be of no further
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force or effect. Upon such termination, except for any rights any party may have
in respect of any breach by any other party of its or his obligations hereunder,
none of the parties hereto shall have any further obligation or liability
hereunder.
10. Miscellaneous.
(a) Amendments; No Waivers.
(i) 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.
(ii) 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.
(b) Successors and Assigns. This Agreement shall be
binding upon and shall inure to the benefit of and be enforceable by the Parties
and their respective successors and assigns, including, without limitation, in
the case of any corporate party hereto any corporate successor by merger or
otherwise, and no Party shall assign its rights under this Agreement without the
written consent of the other Parties.
(c) 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.
(d) 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. Without limiting the foregoing, each party
agrees that service of process on such party as provided in Section 6.a shall be
deemed effective service of process on such party.
(e) 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.
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<PAGE> 5
(f) 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.
(g) Entire Agreement. This Agreement, together with the
Merger 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 such subject matter.
(h) VoiceStream Action. Notwithstanding anything to the
contrary contained in this Agreement, the Merger Agreement or any other
documents, agreements or other instruments entered into in connection herewith
(each, a "Related Agreement" and collectively, the "Related Agreements"), the
Parties hereby agree that (i) no provision contained herein or in any Related
Agreement shall be deemed to limit, restrict or prohibit Omnipoint, VoiceStream,
Holdings or any other party to any Related Agreement from taking (or failing to
take) any action, including but not limited to, any action permitted by the
VoiceStream Merger Agreement as amended from time to time at the sole discretion
of VoiceStream, Holdings and Omnipoint (except as provided in Section 2(c)
hereof) or any action which in its sole discretion it takes (or fails to take)
in order: (a) to consummate the transactions contemplated by the VoiceStream
Merger Agreement, as amended from time to time at the sole discretion of
VoiceStream and Omnipoint; (b) to fulfill or satisfy the conditions set forth in
Article 9 of the VoiceStream Merger Agreement; or (c) to ensure that the receipt
of VoiceStream Holdings Common Stock by Omnipoint stockholders pursuant to the
VoiceStream Merger will be tax-free to such Omnipoint stockholders (any such
action, a "VoiceStream Action"), and (ii) a VoiceStream Action shall not
constitute a breach of this Agreement or any Related Agreement or of any
representation, warranty, covenant or agreement contained herein or in any
Related Agreement if as a result of such VoiceStream Action there shall occur a
breach of any representation, warranty, covenant or agreement contained herein
or in any other Related Agreement, subject to Section 12.15(c) of the Merger
Agreement.
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<PAGE> 6
(i) Captions. The captions herein are included for
convenience of reference only and shall be ignored in the construction or
interpretation hereof.
(j) 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 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.
(k) 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.
(l) Remedies Cumulative. All rights, powers and remedies
provided under this Agreement or otherwise available in respect hereof at law or
in equity shall be cumulative and not alternative, and the exercise or beginning
of the exercise of any thereof by any party shall not preclude the simultaneous
or later exercise of any other such right, power or remedy by such party.
(m) Limitation on Liability. No party hereto shall have
any liability hereunder for any actions or omissions of any other party hereto.
(n) Expenses. Each party hereto shall bear its own
expenses incurred in connection with this Agreement.
(o) Further Assurances. Each party hereto agrees that
such party shall execute and deliver such additional instruments and other
documents and shall take such further actions as may be necessary or appropriate
to effectuate, carry out and comply with all of their obligations under this
Agreement and to ensure that Holdings is in "control" of Omnipoint within the
meaning of Section 368(c) of the Code as in effect on the date hereof. Without
limiting the generality of the foregoing, none of the parties hereto shall enter
into any agreement or arrangement (or alter, amend or terminate any existing
agreement or arrangement) if such action would impair the ability of any party
to effectuate, carry out or comply with all the terms of this Agreement.
[Signatures on following pages.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the day and year first above written.
EAST/WEST COMMUNICATIONS, INC.
By: /s/ VICTORIA G. KANE
------------------------------------
Victoria G. Kane
Chief Executive Officer
OMNIPOINT CORPORATION
By: /s/ DOUGLAS G. SMITH
------------------------------------
Douglas G. Smith
Chief Executive Officer
VOICESTREAM WIRELESS CORPORATION
By: /s/ CREGG BAMBAUGH
------------------------------------
Name: Cregg Bambaugh
Title: Executive Vice President
VOICESTREAM WIRELESS HOLDING CORPORATION
By: /s/ CREGG BAMBAUGH
------------------------------------
Name: Cregg Bambaugh
Title: Executive Vice President
<PAGE> 1
Exhibit 99.1
Omnipoint to Acquire EWCM, Gaining 22 Million Pops Including Los Angeles and
Washington, D.C.
BETHESDA, Md. - October 22, 1999-Omnipoint Corporation (OC) announced today
that it signed definitive agreements to acquire East/West Communications,
Inc. (NASDAQ: EWCM). EWCM holds five licenses covering approximately 22.2
million pops consisting primarily of Los Angeles and Washington, D.C. with
20.6 million pops combined, as well as Sarasota, Fla., Reno, Nev. and Santa
Barbara, Calif. which make up another 1.6 million pops.
Omnipoint invested $3 million into EWCM today for 300,000 shares and
simultaneously agreed to purchase all of the EWCM shares outstanding at closing
for a new Series E Omnipoint preferred stock, equivalent to a fixed 1.775
million Omnipoint shares. At yesterday's closing price of $71/OC share, the
acquisition values the approximately 4.4 million non-Omnipoint shares of EWCM at
$118 million or $5.32 per "pop" (population). Omnipoint will also assume
approximately $15 million in FCC debt and will redeem approximately $8 million
in EWCM preferred stock, for a total all-in cost of approximately $6.50 per pop.
"This transaction supplements our existing spectrum in the Washington, D.C. area
and adds the second largest market in the United States - i.e., Los Angeles - to
our portfolio of licenses," said Douglas G. Smith, Chairman, President and CEO
of Omnipoint. "The combined VoiceStream/Omnipoint/Aerial company, along with its
affiliates, will now have licenses for all of the top 10 markets and 23 of the
top 25 markets, with a total of over 220 million pops."
"We are very pleased to be part of the national GSM story," said Victoria Kane,
President of EWCM. "We expect that the transaction will close in the fourth
quarter." The closing of the transaction is subject to regulatory approvals and
other conditions.
GSM (Global System for Mobile) communications technology is the world's leading
wireless standard, used by more than 215 million subscribers in 142 countries,
including five million customers in North America.
About Omnipoint
Founded in 1987, Omnipoint Corporation (NASDAQ: OMPT) is a leader in
commercializing PCS. Its subsidiary, Omnipoint Communications, currently
provides advanced wireless communications services in New York, New Jersey,
Connecticut, Eastern Pennsylvania, Delaware, Massachusetts, New Hampshire, Rhode
Island, Southern Florida, Michigan, Ohio, Indiana and Maryland. It intends to
provide those services in additional areas.
Omnipoint is a founding member of the North American GSM Alliance, a group of
North America's leading digital wireless Personal Communication Services (PCS)
companies. Using GSM communications technology, Alliance companies
<PAGE> 2
provide superior voice clarity, unparalleled security and leading-edge wireless
voice, data and fax features for customers, whether at home, away or abroad.
Other GSM Alliance members include: Aerial Communications, Inc.; Airadigm
Communications, Inc.; BellSouth Mobility DCS; Conestoga Wireless Company; Cook
Inlet PCS; DIGIPH PCS; Iowa Wireless; Microcell Telecommunications Inc.; NPI
Wireless; Pacific Bell Wireless; Powertel, Inc.; STPCS Joint Venture, LLC;
VoiceStream Wireless Corp.; and Wireless 2000 PCS. The GSM Alliance works in
cooperation with North American GSM equipment manufacturers: Siemens, Motorola,
Lucent Technologies, Nortel Networks, Nokia and Ericsson.
In addition to Omnipoint Communications, Omnipoint Corporation also includes
Omnipoint Technologies, Inc., a developer and supplier of wireless communication
technologies, products and engineering services. As a pioneer in the industry,
Omnipoint Technologies is on the forefront of developing and integrating
advanced wireless technologies, such as GSM, GPRS packet data, EDGE, positioning
and Internet access. Omnipoint Technologies also supplies the Eagle(tm) One
wireless data communications module for integration into product applications
and designs.
On June 23, 1999 Omnipoint Corporation and VoiceStream Wireless Corporation
agreed to merge. On September 17, 1999, VoiceStream Wireless Corporation and
Aerial Communications, Inc. agreed to merge. When the two mergers are completed,
VoiceStream will have licenses to provide service to over 200 million people. As
of June 30, 1999 the three companies served more than 1.5 million customers
combined. Completion of the two mergers is subject to customary shareholder and
regulatory approval.
Except for historical information contained herein, the matters discussed and
the statements made in this release concerning Omnipoint's future prospects are
"forward-looking statements" under the Federal securities laws that involve
risks and uncertainties. There can be no assurance that future results will be
achieved, and actual results could differ materially from the forecast and
estimates. Important factors that could cause actual results to differ
materially include, but are not limited to, Omnipoint's limited operating
history, including a history of losses and the uncertainty of future operating
results, high leverage, dependence upon cash flow from its subsidiaries, debt
service requirements and restrictive covenants related to its existing debt
facilities, significant capital requirements, the continued buildout of
Omnipoint PCS markets, and its dependence upon key employees. Omnipoint's future
results may be impacted by other risk factors listed in its Registration
Statement filed on Form S-3 on June 30, 1998, and other factors listed from time
to time in its SEC reports, including, but not limited to, the report on Form
10-K for the year ended December 31, 1998.
More information is available on the company's Website (www.omnipoint.com)
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