<PAGE> 1
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 (Date of earliest event reported) February 28, 2000
------------------------------
VOICESTREAM WIRELESS CORPORATION
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
Delaware 99768865 91-1983600
- --------------------------------------------------------------------------------
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
3650 131st Avenue S.E. Bellevue, Washington 98006
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (425) 653-4600
-----------------------------
- --------------------------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
<PAGE> 2
Item 5. Other Events.
[VOICESTREAM WIRELESS LOGO] [MICROCELL TELECOM LOGO]
News Release
FOR IMMEDIATE RELEASE
MICROCELL ANNOUNCES EQUITY INVESTMENT BY VOICESTREAM
VOICESTREAM WILL INVEST CAN$400 MILLION TO PURCHASE 9,590,000 SHARES
MONTREAL, CANADA; BELLEVUE, WASH., FEBRUARY 14, 2000 -- Microcell
Telecommunications Inc. (TSE: MTI.B; Nasdaq: MICT) and VoiceStream Wireless
Corporation (Nasdaq: VSTR) jointly announced today that they signed a definitive
agreement in which VoiceStream, a leading provider of personal communications
services in the United States, agreed to invest CAN$400 million to purchase
9,590,000 newly issued Class A Shares of Microcell. The execution of this
definitive agreement follows an agreement in principle reached earlier in
January. The per share transaction price was equal to the closing market price
of Microcell's publicly traded Class B Non-Voting Shares on the Nasdaq National
Market System on January 6. It is anticipated that the investment will be
completed by the end of February.
Upon issuance, the Class A shares will constitute approximately 15% of the
issued and outstanding equity securities of Microcell. These are non-voting and
are convertible at any time into Common Shares, which are voting (subject to
Canadian foreign ownership restrictions). If fully converted, these Common
Shares would represent a 22.6% voting interest in Microcell. At the closing of
the transaction, VoiceStream will be entitled to designate two members to
Microcell's Board of Directors.
"We are very pleased to have VoiceStream join us as a strategic shareholder,"
said Andre Tremblay, Chairman, President and Chief Executive Officer of
Microcell Telecommunications Inc. "VoiceStream is both an attractive and highly
complementary strategic partner, which has been a leader in successfully
establishing and rapidly expanding the North American GSM network. This
partnership will enable us to enhance seamless North American GSM roaming, reap
the benefits of scale and scope, as well as maximize our investment in
innovation and service development by pooling our resources and market expertise
with them."
"VoiceStream is thrilled by the opportunity to invest in Microcell," said John
Stanton, Chairman and Chief Executive Officer of VoiceStream. "Microcell and
VoiceStream are both leaders in our countries in providing state-of-the-art GSM
wireless telecommunications services to our customers. This investment will
allow the companies to work even closer together in improving services provided
to their customers."
Microcell plans to use the funds to help finance subscriber acquisition, digital
network expansion, improving existing coverage and upgrading the network to
higher-speed data transmission technologies such as GPRS.
<PAGE> 3
Mr. Tremblay concluded, "VoiceStream's equity investment in
Microcell provides us with additional financing to continue growing our core
business, while further developing our wireless Internet and data services
strategy. We intend to fully leverage the power of GSM and our strategic
partnership with VoiceStream to position Microcell as a leader in the data
world."
VoiceStream Wireless Corp., based in Bellevue, Wash., is a leading provider of
wireless communications services in the western United States using the GSM
technology platform. The company is completing agreements to merge with two
other GSM service providers, Omnipoint Corp. and Aerial Communications. When
both transactions are completed, VoiceStream and its affiliates will own
licenses in 23 of the top 25 largest markets, making it one of the major
nationwide providers of communication services in the country and the largest
GSM operator worldwide. VoiceStream is a member of the North American GSM
Alliance LLC, a group of U.S. and Canadian digital wireless PCS carriers. The
GSM Alliance helps provide GSM wireless communications for their customers in
more than 4,000 U.S. and Canadian cities and towns as well as international
service. For more information, go to www.voicestream.com.
Microcell is a Canadian wireless communications company. Its PCS network serves
53% of the Canadian population. The Service is available under the Fido(R) brand
name in a number of centres including Quebec, Sherbrooke, Montreal, Ottawa-Hull,
Oshawa, St. Catharines-Niagara, Toronto, Hamilton, Kitchener-Waterloo, London,
Edmonton, Calgary, Vancouver and Victoria. Beyond its PCS footprint, Microcell
offers analog roaming service in an area representing 94% of the Canadian
population. As a member of the international GSM Association and the North
American GSM Alliance, Microcell also offers roaming services in over 60
countries and in more than 4,000 Canadian and U.S. cities. Microcell
Telecommunications has been a public company since October 15, 1997, and is a
member of the TSE 300, TSE 200 and S&P/TSE Canadian Mid Cap indices. Microcell's
head office is located in Montreal. The Company employs over 2,000 people across
Canada.
Fido is a trademark of Microcell Solutions Inc.
HTTP://WWW.MICROCELL.CA
HTTP://WWW.FIDO.CA
SOURCE:
Francois Perreault
Opsis Communications & Marketing
(514) 393-8998
<PAGE> 4
VoiceStream Wireless Corporation
3650-131 Avenue South East
Bellevue, Washington
USA 98006
FOR IMMEDIATE RELEASE
Bellevue, Washington, February 29, 2000 - VoiceStream Wireless Corporation
("VoiceStream") announces that it has completed the previously announced private
placement subscription of 9,590,000 Class A Non-Voting Shares ("Class A Shares")
of Microcell Telecommunications Inc. ("Microcell"). No other Class A Shares are
currently outstanding. Each Class A Share may be converted into one (voting)
Common Share or one Class B Non-Voting Share ("Class B Share") of Microcell.
Each Common Share is convertible into one Class B Share of Microcell. The
9,590,000 Class A Shares subscribed for by VoiceStream represent approximately
15% of the aggregate of 64,587,844 Class A Shares, Common Shares and Class B
Shares which are currently outstanding.
VoiceStream has entered into a shareholders agreement with Telesystem
Enterprises (T.E.L.) Ltd. ("Telesystem"), which holds, directly or indirectly,
19,924,849 (or 61%) of the outstanding Common Shares. Under the terms of the
shareholders agreement, Telesystem has agreed to use its best efforts to cause
two nominees of VoiceStream to be appointed to the Board of Directors of
Microcell and for one of such nominees to be appointed to the Corporate
Governance Committee of the Board of Directors of Microcell. The agreement also
provides for rights of first offer and rights of first refusal in favour of
VoiceStream in the event that Telesystem determines to dispose of any of its
shares of Microcell.
Pursuant to the terms of the private placement subscription agreement,
VoiceStream has agreed with Microcell that, provided that Telesystem's
percentage ownership of Microcell's outstanding Common Shares does not fall
below 50% (45% in the event that Telesystem's percentage ownership of Common
Shares is reduced as a result of the conversion by VoiceStream of Class A Shares
into Common Shares), VoiceStream shall not acquire additional shares of
Microcell if the effect of such acquisition would be to increase VoiceStream's
ownership of the outstanding shares of Microcell to more than 30%. This
restriction on VoiceStream will no longer apply if a person other than
Telesystem increases its ownership of the outstanding shares of Microcell to
over 30% or any such acquisition by VoiceStream is made in accordance with the
takeover bid provisions of applicable securities laws in Canada. The
subscription agreement also provides pre-emptive rights to VoiceStream in the
event of additional equity offerings by Microcell.
VoiceStream's private placement subscription is for investment purposes.
VoiceStream may continue to purchase shares of Microcell for investment
purposes, depending upon the market conditions for shares of Microcell and other
factors.
For further information, please contact:
Mr. John Snyder (206) 652-9704
Snyder Buscher Group
[email protected]
<PAGE> 5
FOR MORE INFORMATION:
Microcell Telecommunications Inc. VoiceStream Wireless Corporation
Investment community: Investment community:
Thane Fotopoulos: (514) 937-0102 (ext. 8317) Ken Prussing (877) 853-8682
[email protected] [email protected]
Media: Media:
Claire Fiset: (514) 937-0102 (ext. 7824) John Snyder (206) 652-9704
[email protected] Snyder Buscher Group
Victoria Ollers: (416) 822-2288 [email protected]
[email protected]
Item 7. Material to be Filed as Exhibits.
10.1 Stock Subscription Agreement, dated as of February 11, 2000,
by and among VoiceStream Wireless Corporation and Microcell Telecommunications
Inc.
10.2 Shareholders Agreement of Microcell Telecommunications Inc.,
dated as of February 11, 2000, by and between VoiceStream Wireless Corporation
and Telesystem Enterprises (T.E.L.) Ltd.
<PAGE> 6
SIGNATURES
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.
VOICESTREAM WIRELESS CORPORATION
(Registrant)
Date : March 2, 2000 By /s/ Alan R. Bender
----------------------------------------
(Signature)
Alan R. Bender, Executive Vice President
<PAGE> 7
Exhibit Index
10.1 Stock Subscription Agreement, dated as of February 11, 2000,
by and among VoiceStream Wireless Corporation and Microcell Telecommunications
Inc.
10.2 Shareholders Agreement of Microcell Telecommunications Inc.,
dated as of February 11, 2000, by and between VoiceStream Wireless Corporation
and Telesystem Enterprises (T.E.L.) Ltd.
<PAGE> 1
Exhibit 10.1
STOCK SUBSCRIPTION AGREEMENT
BY AND AMONG
VOICESTREAM WIRELESS CORPORATION,
AND
MICROCELL TELECOMMUNICATIONS INC.
DATED: FEBRUARY 11, 2000
<PAGE> 2
STOCK SUBSCRIPTION AGREEMENT
STOCK SUBSCRIPTION AGREEMENT, dated as of February 11, 2000, (the
"Agreement"), by and among VoiceStream Wireless Corporation, a Washington
corporation (the "Investor") and Microcell Telecommunications Inc., a Canadian
corporation (the "Company").
W I T N E S S E T H :
WHEREAS, the Company is engaged directly and through Affiliates in the
communications business in Canada;
WHEREAS, the Investor is engaged directly or through Affiliates in the
communications business in the United States;
WHEREAS, the Company and the Investor are among the leaders in their
respective countries in the provision of mobile telecommunications services and
supporting systems; and
WHEREAS, upon the terms and conditions set forth in this Agreement, the
Company has determined to issue and sell, and the Investor has determined to
purchase, 9,590,000 of the Company's Class A Non-Voting Shares (the "Class A
Shares")
NOW, THEREFORE, in consideration of the mutual covenants, conditions and
promises hereinafter set forth, the parties hereby agree as follows:
ARTICLE 1
DEFINITIONS
Unless the context otherwise requires, the terms defined hereunder shall
have the meanings therein specified for all purposes of this Agreement,
applicable to both the singular and plural forms of any of the terms defined
herein. For purposes of this Agreement:
"Adjusted Number of Designees" shall have the meaning set forth in
Section 5.01.
"Affiliate" shall mean, with respect to any party hereto, any
corporation or other business entity which directly or indirectly through stock
ownership or through any other arrangement either controls, is controlled by or
is under common control with, such party. The term "control" shall mean the
power to direct the affairs of such person by reason of ownership of more than
50% of the voting stock or other equity interests, by contract or otherwise.
-19-
<PAGE> 3
"Affiliated Director" shall mean any member of the board of directors of
the Company who has been designated by the Investor for election as a director
of the Company pursuant to this Agreement.
"Agreement" shall mean this Stock Subscription Agreement as the same may
be amended from time to time.
"Annual Information" shall mean the Financial Information and the
information concerning the Company in its management proxy circular, dated April
1, 1999, its Annual Information Form, dated April 15, 1999, and the management's
discussion and analysis relating to the financial year ended December 31, 1998
as set out in its 1998 Annual Report.
"Business Day" shall mean any day other than a Saturday, Sunday or a
legal holiday in New York, New York, Seattle, Washington or Montreal, Quebec,
Canada or any other day on which commercial banks in those locations are
authorized by law or governmental decree to close.
"Canadian Securities Laws" shall mean, collectively, the applicable
securities laws of each of the provinces of Canada and the respective
regulations made thereunder together with all applicable published policy
statements, blanket orders, rulings and published notices of the securities
regulating authorities in such provinces.
"Change of Control" means with respect to the entity in question (i) the
acquisition by any Person or 13D Group of direct or indirect beneficial
ownership of shares representing 50% or more of the outstanding voting power in
the entity, (ii) any merger, amalgamation, consolidation or business combination
involving the entity resulting in the acquisition by any Person or 13D Group of
direct or indirect beneficial ownership of shares representing 50% or more of
the outstanding voting power in the entity, (iii) a sale of all or substantially
all of the assets of the entity or (iv) a recapitalization, restructuring,
liquidation, dissolution or similar extraordinary transaction relating to the
entity resulting in the acquisition by any Person or 13D Group of direct or
indirect beneficial ownership of shares representing 50% or more of the
outstanding voting power in the entity.
"Class A Shares" shall have the meaning set forth in the preamble
hereof.
"Class B Shares " shall mean the Company's Class B Non-Voting Shares.
"Closing" shall have the meaning set forth in SECTION 2.02.
"Closing Date" shall have the meaning set forth in SECTION 2.02.
"Common Shares" shall mean the Company's Common Shares.
-20-
<PAGE> 4
"Communications Act" shall mean the Telecommunications Act (Canada), the
Canadian Radio-television and Telecommunications Commission Act (Canada) and the
Radiocommunication Act (Canada) (together with the rules, regulations, orders,
policies and decisions thereunder).
"Company" shall have the meaning set forth in the preamble hereof.
"Company Investment" shall mean an entity in which the Company or any
Company Subsidiary has a direct or indirect ownership of (i) capital stock,
bonds, debentures, partnership, membership interests or other ownership
interests or other securities of any Person; (ii) any deposit with or advance,
loan or other extension of credit (including the purchase of property from
another Person subject to an understanding or agreement, contingent or otherwise
to resell such property to such other Person) to any other Person; (iii) any
revenue or profit interests pursuant to any agreement or license; or (iv) any
agreement, commitment, right, understanding or arrangement with respect to any
of the items referred to in (i), (ii) or (iii) of this definition.
"Company Subsidiary" shall mean 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 the Company
"Corporate Governance Committee" shall mean the Corporate Governance
Committee of the Company, being a committee of the board of directors of the
Company composed of three (3) directors and created pursuant to the Related
Person Transactions Policy and Procedure adopted by a unanimous shareholder
resolution of the Company, dated December 15, 1993.
"CRTC " shall mean the Canadian Radio-television and Telecommunications
Commission.
"Disclosures" shall have the meaning set forth in SECTION 9.11.
"Disinterested Board Approval" means the affirmative vote or written
consent of a majority of the board of directors (excluding Affiliated Directors)
then in office.
"Dollar" or "Cdn$" shall mean the basic unit of the lawful currency of
Canada.
"Exchange Act" shall mean the Securities Exchange Act of 1934, and any
similar or successor Federal statute, and the rules and regulations promulgated
thereunder, all as amended, and as the same may be in effect from time to time.
"Financial Information" shall mean the information in the audited
consolidated financial statements of the Company for the year ended December 31,
1999, together with the auditors' report thereon annexed hereto as Exhibit 1.
"GAAP" shall have the meaning set forth in SECTION 4.01(n)(ii).
-21-
<PAGE> 5
"Investor" shall have the meaning set forth in the preamble hereof.
"License" shall mean any license, permit or other authorization issued
to the Company or any Company Subsidiary by Industry Canada or the CRTC.
"Lien" shall mean any hypothecation, lien, claim, security interest,
charge, encumbrance or title retention agreement of any nature.
"Material Adverse Effect on the Company" shall mean a material adverse
effect on the business, condition (financial or otherwise), prospects, assets or
results of operations of the Company or any Company Subsidiary, taken as a
whole.
"Material Change" shall mean a material change for purposes of any of
the Canadian Securities Laws.
"Material Fact" shall mean a material fact for purposes of any of the
Canadian Securities Laws.
"Misrepresentation" shall mean a misrepresentation for purposes of any
of the Canadian Securities Laws.
"Percentage Ownership" shall mean as to Telesystem, the percentage
determined by dividing the aggregate number of Common Shares owned by Telesystem
at the time of determination by the total number of outstanding Common Shares at
the time of determination.
"Person" shall mean any general or limited partnership, corporation,
joint venture, trust, business trust, governmental agency, cooperative,
association, individual or other entity, and heirs, executors, administrators,
legal representatives, successors and assigns of such person.
"Preferred Shares" shall mean the Company's preferred shares.
"Public Sale" shall mean a sale of Shares over the TSE or NASDAQ.
"Purchase Price" shall have the meaning set forth in SECTION 2.01.
"Purchased Shares" shall have the meaning set forth in SECTION 2.01.
"SEC" shall mean the Securities and Exchange Commission or its
successors.
"Securities Act" shall mean the Securities Act of 1933, and any
successor Federal statute, and the rules and regulations promulgated thereunder,
all as amended, and as the same may be in effect from time to time.
-22-
<PAGE> 6
"Securities Documents" shall have the meaning set forth in SECTION
4.01(n)(i).
"Shares" shall mean any equity interest in the Company, whether Class A
Shares, Common Shares, Class B Shares, Preferred Shares, or the shares into
which such shares are converted.
"Shareholders Agreement" shall mean that certain Shareholders Agreement,
dated December 9, 1993, among Sprint Canada, Inc., CUC Broadcasting Limited,
Firsttel Communications Corporation, Phonespot Inc., Telesystem Enterprises
(T.E.L.) Ltd., Le Groupe Videotron Ltee, Com 2i & Cie SCA, MacLean Hunter
Limited, Northern Cable Holdings Limited, Michael Kedar, and Canada Popfone
Corporation, k/n/a Microcell Telecommunications Inc., as amended.
"Standstill Period" has the meaning given in Section 8.02(a).
"Standstill Termination Event" means the date on which the first of the
following occurs: (i) a person other than Telesystem owns more than, or attempts
to increase its ownership of Shares beyond, 30% of the outstanding Shares; (ii)
the Investor makes a Take-Over Bid (other than an exempt Take-Over Bid) in
accordance with applicable provisions of Canadian securities laws; (iii) a
Change of Control of Telesystem; (iv) a sale of all or substantially all of the
Company; (v) a liquidation or dissolution of the Company; (vi) or the filing by
or against the Company of a petition for relief under any bankruptcy,
insolvency, or similar statute relating to the relief of debtors or creditors;
or (vii) the Investor owns less than five percent (5%) of the outstanding Shares
of the Company.
"Standstill Threshold" has the meaning given in Section 8.02(a).
"Supplementary Material" shall mean, collectively, the material change
reports and press releases comprised in the Securities Documents.
"Take-Over Bid" shall have the meaning in the Securities Act (Quebec)
and the Securities Act (Ontario), as applicable.
"Telesystem" shall mean Telesystem Enterprises (T.E.L.) Ltd., a Canadian
corporation, and includes its subsidiary Investissement T.E.L. Inc., a Canadian
corporation.
"Threshold Percentage" shall have the meaning given in Section 8.02(a).
"Triggering Person" shall have the meaning given in Section 8.03(a)(i).
"Third Party Offer" shall mean a 13D Group's offer to initiate or
effectuate a tender offer or exchange offer for any Shares.
"Third Party Change of Control" shall mean a 13D Group's transaction
with respect to the Company that results in a Change of Control of the Company.
-23-
<PAGE> 7
"13D Group" means, irrespective of the applicability of United States
securities laws, any group of persons formed for the purpose of acquiring,
holding, voting or disposing of Shares which would be required under Section
13(d) of the Exchange Act, and the rules and regulations promulgated thereunder,
to file a statement on Schedule 13D or a Schedule 13G with the SEC as a "person"
within the meaning of Section 13(d)(3) of the Exchange Act if such group
"beneficially owned" sufficient securities to require such a filing under the
Exchange Act. When references herein are to a group under Section 13(d) and not
to members of such group, such references shall be deemed to refer to actions of
the group acting as such group and not to the individual actions of any members
of such group.
"TSE" shall mean The Toronto Stock Exchange.
"US Dollar" shall mean the basic unit of the lawful currency of the
United States.
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 a
gender herein shall be deemed to include the neuter, masculine and feminine
genders whenever necessary or appropriate. Whenever the word "herein" or
"hereof" is used in this Agreement, it shall be deemed to refer to this
Agreement and not to a particular SECTION of this Agreement unless expressly
stated otherwise.
ARTICLE 2
PURCHASE OF SHARES; CLOSING
2.1 Purchase of Shares. The Investor hereby subscribes for and agrees to
purchase, or, at the sole discretion of Investor, cause an Affiliate of Investor
to purchase, from the Company, and the Company hereby accepts the Investor's
subscription for and agrees to sell to the Investor or such Affiliate, 9,590,000
Class A Shares (the "Purchased Shares") for a purchase price of Cdn$41.71 per
share (an aggregate purchase price of Cdn$399,998,900.00). The aggregate
purchase price for all Purchased Shares is hereinafter referred to as the
"Purchase Price."
2.2 Closing.
(a) Closing Date. Consummation of the transactions contemplated
hereby (the "Closing") shall take place on the fifth (5th) Business Day
following the satisfaction (or express written waiver) of all conditions to the
Closing under Article 7 hereof or on such other date as the parties hereto shall
agree. The date on which the Closing takes place shall be referred to herein as
the "Closing Date."
-24-
<PAGE> 8
(b) Location. The Closing shall take place at 10:00 A.M. Pacific
Standard Time on the Closing Date, at the offices of the Investor at 3650 131st
Avenue SE, Bellevue, Washington 98006, or at such other time or place as the
parties hereto shall agree. At the Closing the Company shall, upon receipt of
the Purchase Price by wire transfer of immediately available funds to the
account specified therefor by the Company, promptly deliver to the Investor duly
executed and issued stock certificates evidencing the Purchased Shares.
ARTICLE 3
COVENANTS AND AGREEMENTS
3.1 Covenants of the Company. From and after the execution and delivery
of this Agreement to and including the Closing Date, the Company shall use its
best efforts to cause the transactions contemplated by this Agreement to be
consummated in accordance with the terms hereof.
3.2 Covenants of the Investor. From and after the execution and delivery
of this Agreement to and including the Closing Date, the Investor shall use its
best efforts to cause the transactions contemplated by this Agreement to be
consummated in accordance with the terms hereof.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
4.1 Representations and Warranties of the Company. The Company
represents and warrants to the Investor, which representations and warranties
shall survive the execution and delivery of this Agreement and the consummation
of the transactions herein contemplated, as follows:
(a) Due Organization. The Company is a corporation duly
incorporated, validly existing and in good standing under the Canada Business
Corporations Act 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 licensed or qualified to do business 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 could not have a Material Adverse Effect.
(b) Capitalization.
(i) The authorized share capital of the Company consists
of an unlimited number of Common Shares, Class A Shares, Class B Shares and
Preferred Shares. As of the close
-25-
<PAGE> 9
of business on February 8, 2000 , there were outstanding (A) 32,623,959 Common
Shares; (B) no Class A Shares and options to purchase an aggregate of 256,123
Class A Shares (in respect of which options each holder has agreed that its
Class A Shares will when issued, upon exercise of such options, be converted
into Class B Shares); (C) 22,373,885 Class B Shares and options to purchase an
aggregate of 1,475,345 Class B Shares and a special right to purchase 137,500
Class B Shares and warrants to purchase an aggregate of 780,505 Class B Shares;
(D) no Preferred Shares and no options to purchase Preferred Shares; (D) no
phantom shares or stock units of the Company issued under any stock option,
compensation or deferred compensation plan or arrangement. All outstanding
shares of the share capital of the Company have been, and all shares that may be
issued pursuant to any compensatory plan or arrangement will be, when issued in
accordance with the respective terms thereof, duly authorized, validly issued,
fully paid and nonassessable and not subject to preemptive rights. As of the
Closing, except for the Purchased Shares, conversion of Common Shares to Class B
Shares and the exercise of any of the aforementioned options, special right or
warrants which were outstanding at February 8, 2000, there will be no change in
the above described capitalization.
(ii) Except as set forth on Exhibit 4.01(b)(ii) annexed
hereto, there are no outstanding subscriptions, options, warrants, rights or
convertible or exchangeable securities issued by the Company or by any Company
Subsidiary or other agreements or commitments to which the Company or any
Company Subsidiary is a party of any character relating to the issued or
unissued share capital or other securities of the Company, including any
agreement or commitment obligating the Company or any Company Subsidiary to
issue, deliver or sell, or cause to be issued, delivered or sold, shares 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 any Company
Subsidiary or obligating the Company or any Company Subsidiary to make any
payments pursuant to any stock based or stock related plan or award. Except as
set forth on Exhibit 4.01(b)(ii) annexed hereto, 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 or any Company
Subsidiary.
(c) Power and Authority; No Violation. The Company 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 the Company and this Agreement
constitutes a legal, valid and binding obligation of the Company enforceable in
accordance with its terms except as such enforceability may be limited by
bankruptcy, insolvency, moratorium or other similar laws affecting or relating
to enforcement of creditors' rights generally. Neither the execution, delivery
or performance of this Agreement nor the consummation of the transactions
contemplated hereby by the Company 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 articles of incorporation, by-laws, or other constituent documents or any
shareholders agreements of the Company or any Company Subsidiary; (B) any
material note, bond,
-26-
<PAGE> 10
indenture, mortgage, deed of trust, contract, agreement, lease or other
instrument or obligation to which the Company or any Company Subsidiary is a
party or by which the Company or the property of the Company may be bound or
affected; or (C) any law, order, judgment, ordinance, rule, regulation or decree
to which the Company or any Company Subsidiary is a party or by which the
Company or the property of the Company is bound or affected; or (ii) give rise
to any right of first refusal or similar right with respect to any interest, or
any properties or assets, of the Company or any Company Subsidiary.
(d) Governmental Authorization.
(i) The execution, delivery and performance by the Company
of this Agreement require no action by or in respect of, or filing with, any
governmental body, other than: (A) compliance with any applicable requirements
of the Exchange Act or any of the Canadian Securities Laws; and (B) any actions
or filing, the absence of which would not in the aggregate prevent or delay the
Company from performing its obligations under this Agreement in any material
respect or could not in the aggregate have a Material Adverse Effect.
(ii) Neither the Company nor any Company Subsidiary has
made any 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.
(e) Subsidiaries; Investments.
(i) Each Company Subsidiary is a corporation or other
legal entity duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization and has all corporate, partnership or
other similar powers required to carry on its business as now conducted, other
than such exceptions as, individually or in the aggregate, have not had and
could not have a Material Adverse Effect. Each Company Subsidiary is duly
licensed or qualified to do business and is in good standing in each
jurisdiction where such qualification is necessary, with such exceptions,
individually or in the aggregate, as have not had and could not have a Material
Adverse Effect. EXHIBIT 4.01 (e)(i) annexed hereto sets forth a list of all
Company subsidiaries and all Company Investments and their respective
jurisdictions of organization and identifies the Company's (direct or indirect)
percentage ownership interest therein.
(ii) Except as set forth on Exhibit 4.01(e)(ii) annexed
hereto, all of the outstanding share capital of, or other voting securities or
ownership interests in, each Company Subsidiary and each Company Investment, is
owned by the Company or by a Company Subsidiary, directly or indirectly, free
and clear of any Lien and free of any other limitation or restriction (including
any restriction on the right to vote, sell or otherwise dispose of such share
capital or other voting securities or ownership interests).
-27-
<PAGE> 11
(iii) There are no outstanding subscriptions, options,
warrants, rights or convertible or exchangeable securities issued by any Company
Subsidiary or other agreements or commitments of any character relating to the
issued or unissued share capital or other securities or partnership interests or
membership interests of any Company Subsidiary, including any agreement or
commitment obligating any Company Subsidiary to issue, deliver or sell, or cause
to be issued, delivered or sold, shares, other securities, partnership interests
or membership interests of any Company Subsidiary or obligating any Company
Subsidiary to grant, extend or enter into any subscription, option, warrant,
right or convertible or exchangeable security or other similar agreement or
commitment with respect to any Company Subsidiary, or obligating any Company
Subsidiary to make any payments pursuant to any stock based or stock related
plan or award. Except as set forth in the Financial Information, no Company
Subsidiary or Company Investment is subject to any obligation or requirement to
provide funds for or to make any investment (in the form of a loan, capital
contribution or otherwise) to or in any Person including any Company Investment.
(f) Communications Regulatory Matters. The Company and each
Company Subsidiary holds, and is qualified and eligible to hold, all material
licenses, permits and other authorizations issued or to be issued by the CRTC
and Industry Canada to such entity for the operation of their respective
businesses. Each of the Licenses is valid and in full force and effect and
neither the Company nor any Company Subsidiary is or has been delinquent in
payment on or in default under any obligation owed to any Canadian governmental
agency in connection with the Licenses. All material reports and applications
required to be filed with the CRTC or Industry Canada by the Company or any
Company Subsidiary have been timely filed and are accurate and complete in all
material respects. The Company and each Company Subsidiary is and has been in
compliance in all respects with, and the wireless communications systems
operated pursuant to the Licenses have been operated in compliance in all
respects with, the laws of Canada, the Licenses and all rules and regulations of
Industry Canada and the CRTC. There is not pending as of the date hereof any
application, petition, objection, pleading or proceeding with the CRTC or
Industry Canada or any public service commission or similar body having
jurisdiction or authority over the communications operations of the Company or
any Company Subsidiary which questions the validity of or contests any License
or which presents a substantial risk that, if accepted or granted, or concluded
adversely, could result in (as applicable) the revocation, cancellation,
suspension, dismissal, denial or any materially adverse modification of any
License or imposition of any substantial fine or forfeiture against the Company
or any Company Subsidiary. No facts are known to the Company which if known by a
governmental body of competent jurisdiction could present a substantial risk
that any License could be revoked, canceled, suspended or materially adversely
modified or that any substantial fine or forfeiture could be imposed against the
Company or a Company Subsidiary.
(g) No Undisclosed Material Liabilities. Except as set forth on
EXHIBIT 4.01(g) annexed hereto or in the Financial Information there are no
liabilities or obligations of the Company or any Company Subsidiary of any kind
whatsoever, whether accrued, contingent, absolute, determined, determinable or
otherwise, and there is no existing condition, situation or set of circumstances
that could be reasonably expected to result in such a liability or obligation,
other than
-28-
<PAGE> 12
for liabilities or obligations that, individually or in the aggregate have not
had and could not have a Material Adverse Effect.
(h) Compliance with Laws and Court Orders. The Company and each
Company Subsidiary hold all licenses, franchises, certificates, consents,
permits, qualifications and authorizations from all governmental bodies
necessary for the lawful conduct of their businesses, including the Licenses,
except where the failure to hold any of the foregoing, individually or in the
aggregate, has not had and could not have a Material Adverse Effect. The Company
and each Company Subsidiary is and has been in compliance with, and to the
knowledge of the Company, is not under investigation with respect to and has not
been threatened to be charged with or given notice of any violation of, any such
license, franchise, certificate, consent, permit, qualification or
authorization, applicable law, statute, ordinance, rule, regulation, judgment,
injunction, order or decree, except for failures to comply or violations that,
individually or in the aggregate, have not had and could not be reasonably
expected to have a Material Adverse Effect.
(i) Litigation. Except as set forth on EXHIBIT 4.01(g) annexed
hereto, there is no claim, legal action, counterclaim, suit, arbitration,
governmental investigation or other administrative or tax proceeding (or any
basis therefor) or any order, decree or judgment, in progress or pending
against, or, to the knowledge of the Company, threatened against or affecting,
the Company or any Company Subsidiary 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, could be reasonably expected to have a
Material Adverse Effect.
(j) Purchased Shares. The Purchased Shares (i) have been duly
authorized by all necessary corporate action on the part of the Company, (ii)
shall be (when issued in accordance with the terms of this Agreement) validly
issued and outstanding, fully paid and nonassessable, and (iii) shall not be
subject to any preemptive rights of the holders of any other class or series of
the share capital of the Company, and upon exercise of the conversion right
attaching to the Purchased Shares pursuant to the articles of incorporation, as
amended, of the Company, any Common Shares issued shall not be subject to any
preemptive rights pursuant to such articles. Upon the issuance of the Purchased
Shares to the Investor at the Closing, the Purchased Shares shall be free and
clear of all Liens, with the exception of any restrictions on transferability
under securities laws of any jurisdiction and under the Communications Act, the
articles of incorporation of the Company and the Shareholders Agreement if the
Purchased Shares are converted into Common Shares.
(k) Voting Rights. Neither Class A Shares nor Class B Shares has
voting rights, except for any which may be required by law or the articles of
incorporation of the Company. Common Shares are entitled to one vote per share.
Class A Shares are convertible at any time, or from time to time so long as the
conversion thereof would not violate any foreign ownership restrictions under
the Communications Act, at the option of the holder into either Common Shares or
Class B Shares. Common Shares are convertible at any time at the option of the
holder into Class B Shares. The Class B Shares are posted for trading on the
TSE. Upon conversion of Class A Shares into Class B Shares or of Common Shares
into Class B Shares such Class B Shares shall be
-29-
<PAGE> 13
listed upon the TSE and, subject only to the limitations on transfer mentioned
in Section 6.04 hereof, such Class B Shares shall be freely tradeable upon the
TSE without being subject to any prospectus requirement under the Canadian
Securities Laws.
(l) Investment Company Act. The Company is not an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.
(m) No Brokers. Except as set forth on Exhibit 4.01(m), no agent,
broker, investment banker, Person or firm is or will be entitled to any broker's
or finder's fee or any other commission or similar fee directly or indirectly in
connection with the transactions contemplated by this Agreement based in any way
on any arrangements, agreements or understandings made by or on behalf of the
Company or an Affiliate thereof. The Company 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 the Company or an Affiliate thereof.
(n) Reports and Financial Statements.
(i) The Company has timely filed all required reports,
schedules, forms, statements and other documents required to be filed by it with
the SEC, the securities regulatory authorities in each of the provinces of
Canada, the TSE, NASDAQ or otherwise pursuant to the Canadian Securities Laws
(the "Securities Documents"). As of its filing date, each Securities Document
complied as to form in all material respects with the applicable requirements of
the Securities Act, the Exchange Act, and the Canadian Securities Laws, as the
case may be. As of its filing date, each Securities Document filed pursuant to
the Exchange 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. Each Securities Document that is a registration statement or
prospectus, as amended or supplemented, if applicable, filed pursuant to the
Securities Act or the Canadian Securities Laws, as of the date such registration
statement or amendment became effective or the date of such prospectus or
prospectus amendment, as the case may be, 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.
(ii) The audited consolidated financial statements and
unaudited consolidated interim financial statements of the Company included in
the Securities Documents fairly present, in all material respects, in accordance
with Canadian generally accepted accounting principles ("GAAP") applied on a
consistent basis (except as may be indicated in the notes thereto), the
consolidated financial position of the Company 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).
-30-
<PAGE> 14
(o) No Material Adverse Effect on the Company. During the period
since December 31, 1999 there has not been any change or event which could have
a Material Adverse Effect on the Company or a Company Subsidiary.
(p) A Reporting Issuer. The Company is a reporting issuer in good
standing or has equivalent status under all the Canadian Securities Laws and
will maintain such status and not be in default of any requirement under the
Canadian Securities Laws for at least eighteen (18) months following the
Closing. The Company has registered the Class B Shares under Section 12 of the
Exchange Act, as amended, and will file on a timely basis all reports and other
documents required thereby, which reports and other documents will not contain,
when filed, an untrue statement of a material fact and will not omit to state
any material fact necessary to make the statements therein not misleading in
light of the circumstances under which they are made. The Company has qualified
its Class B Shares for trading on the NASDAQ stock market and will cause its
Class B Shares to continue to be so qualified.
(q) Annual Information. The Annual Information, as supplemented
or superseded by the Supplementary Material, (i) is true and correct in all
material respects, (ii) contains no Misrepresentation and (iii) discloses all
Material Facts and Material Changes (actual, anticipated, contemplated or
threatened, whether financial or otherwise) relating to the business, affairs,
operations, assets, liabilities (contingent or otherwise) or capital of the
Company and the Company Subsidiaries considered as a whole.
(r) No Omission. No Material fact or Material Change has been
omitted from the Annual Information or Supplementary Material that is required
under the Canadian Securities Laws to be stated therein or is necessary to make
the statements therein not misleading in the light of the circumstances in which
they were made.
(s) Compliance with Canadian Securities Laws. The Company has
complied in all material respect with all Canadian Securities Laws and no
confidential material change reports have been filed except for the one required
by the transactions contemplated hereby.
(t) No Material Change. Except as disclosed in the Supplementary
Material or Financial Information, there has been no Material Change (actual,
anticipated, contemplated or threatened, whether financial or otherwise) in the
business, affairs, operations, assets, liabilities (contingent or otherwise) or
capital of the Company since December 31, 1999, the date of the Company's last
fiscal year-end.
(u) Ownership and Control. Each Company Subsidiary which is a
Canadian carrier is a "Canadian-owned and controlled" corporation within the
meaning and for the purposes of the Communications Act and is eligible to
operate as a telecommunications common carrier and/or radiocommunication carrier
pursuant to the Communications Act. The Company is a "qualified corporation"
within the meaning and for the purposes of the Communications Act.
-31-
<PAGE> 15
(v) Contributions. All contribution payments due and payable by
each Company Subsidiary have been paid and there is no contribution amount for
which any Company Subsidiary has been unbilled or underbilled, to the knowledge
of the Company.
(w) Truth and Correctness. No representation or warranty by the
Company in this Agreement contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact necessary to make
the statements contained herein or therein, in light of the circumstances under
which such statements are made, not misleading.
4.2 Representations and Warranties of the Investor. The Investor
represents and warrants to the Company, which representations and warranties
shall survive the execution and delivery of this Agreement and the consummation
of the transactions herein contemplated, as follows:
(a) Due Organization. The Investor is a corporation duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation.
(b) Power and Authority; No Violation. The Investor 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 the Investor and this Agreement
constitutes a legal, valid and binding obligation of the Investor 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 the Investor 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 articles of incorporation, by-laws, stockholders agreements or
other constituent documents of the Investor; (B) any material note, bond,
indenture, mortgage, deed of trust, contract, agreement, lease or other
instrument or obligation to which the Investor is a party or by which it or its
property may be bound or affected; or (C) any law, order, judgment, ordinance,
rule, regulation or decree to which the Investor is a party or by which it or
its property is bound or affected; or (ii) give rise to any right of first
refusal or similar right with respect to any interest, or any properties or
assets, of the Investor. 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 the Investor in connection with the execution and delivery
of this Agreement or the consummation of the transactions contemplated hereby in
order to (A) render this Agreement or the transactions contemplated hereby valid
and effective and (B) enable the Investor to purchase the Purchased Shares.
(c) 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 the Investor threatened, against or relating
-32-
<PAGE> 16
to the Investor's right to perform its obligations under this Agreement, nor
does the Investor 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 which could individually or
in the aggregate impair in any material respect the performance of the
Investor's obligations hereunder or the consummation of the transactions
contemplated by this Agreement other than orders or decrees involving the
wireless telephone industry in general.
(d) Securities Representation. The Investor acknowledges that:
(i) it is an accredited investor (as defined in Rule 501 under the Securities
Act); (ii) it has such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks of investing in
the Company as contemplated hereby; (iii) the Purchased Shares to be delivered
by the Company to the Investor have not been registered under the Securities Act
or under the securities laws of any state in reliance upon Federal and state
exemptions for transactions not involving a public offering and are being
acquired for the Investor's own account and not with a view to the distribution
thereof except pursuant to a registration statement in compliance with Federal
and state securities laws; (iv) the Purchased Shares may not be transferred
except pursuant to and in compliance with an exemption from applicable Federal,
state and provincial securities laws; (v) it has received information concerning
the Company and has had the opportunity to obtain all additional information it
has required or desired in order to evaluate the merits and risks inherent in
holding the Purchased Shares; and (vi) the Investor, either directly or through
a Company Subsidiary, is purchasing the Purchased Shares as principal for its
own account.
(e) Investment Company Act. The Investor is not an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.
(f) No Brokers. No agent, broker, investment banker, Person or
firm is or will be entitled to any broker's or finder's fee or any other
commission or similar fee directly or indirectly in connection with the
transactions contemplated by this Agreement based in any way on any
arrangements, agreements or understandings made by or on behalf of the Investor
or an Affiliate thereof, and the Investor hereby agrees to indemnify the Company
and agrees to hold harmless the Company 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 the
Investor or an Affiliate of the Investor.
(g) Truth and Correctness. No representation or warranty by the
Investor in this Agreement contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact necessary to make
the statements contained herein or therein, in light of the circumstances under
which such statements are made, not misleading.
ARTICLE 5
BOARD OF DIRECTORS
-33-
<PAGE> 17
5.1 Board Representation. The Company covenants and agrees with the
Investor that at the Closing, the board of directors of the Company shall
appoint two (2) directors designated by the Investor who shall hold office until
the next annual meeting of shareholders of the Company. Thereafter, the Company
covenants and agrees with the Investor that:
(a) (i) there shall be nominated by the Company for election as
directors of the Company at each annual meeting of shareholders such number of
legally qualified individuals designated by the Investor as follows:
(x) at the next annual meeting of shareholders to be held on
May 10, 2000, two (2) directors; and
(y) at all further annual meetings of shareholders, a number
of directors which, in regard to the number of directors
to be in office, is proportionate to the percentage of the
issued and outstanding Common Shares and Class A shares
(taken as a single class for this purpose) held by the
Investor at the time of nomination for election rounded to
the nearest whole number (with 0.5 rounded upwards);
(ii) the Company shall solicit proxies from its
shareholders for such nominees to be voted in favor of the individuals
designated by the Investor.
5.2 Corporate Governance Committee Representation. The Company covenants
and agrees with the Investor that at the Closing, the board of directors of the
Company shall appoint one of the two directors designated by the Investor as a
member of the Corporate Governance Committee if there is a vacancy. If there is
no vacancy, the appointment will be made at the meeting of the board of
directors of the Company to be held immediately after the next annual meeting of
shareholders to be held on May 10, 2000. The Company covenants and agrees with
the Investor that the Related Party Transaction Policy and Procedure shall not
be modified or revoked without the consent of the Investor.
ARTICLE 6
ADDITIONAL RIGHTS AND COVENANTS
6.1 Cooperation and Full Access. From and after the execution and
delivery of this Agreement to and including the Closing Date, the Company shall
and shall cause each Company Subsidiary to give to the Investor and its legal
counsel, accountants, advisers and other representatives, full access at all
times during reasonable business hours and on reasonable notice, to all the
offices, properties, contracts, books, records, personnel and affairs of the
Company or in any way relating to its business or assets. The Company shall
furnish and shall cause each Company
-34-
<PAGE> 18
Subsidiary to furnish, and shall direct its independent accountants and legal
counsel to furnish, to the Investor all such documents and information
concerning the assets, properties, liabilities and affairs of the Company as the
Investor may from time to time reasonably request.
6.2 Transactions with Affiliates. The Company hereby agrees that
transactions involving the Company or a Company Subsidiary, on the one hand, and
any of its or their Affiliates, on the other hand, shall be on terms that are no
less favorable to the Company or such Company Subsidiary than those which would
be obtained in an arm's length transaction with an unrelated third party, and
shall, if involving greater than Cdn$2,000,000.00, require the approval of a
majority of the disinterested directors of the Company. In addition, such
transaction shall require the review and approval of the Corporate Governance
Committee. Any member of the Corporate Government Committee designated by or
affiliated with the interested party shall not be permitted to vote on a
transaction.
6.3 Investor Preemptive Rights. If the Company issues any additional
equity securities, the Investor shall have the right to purchase (on the same
terms and conditions), its proportionate share of such issuance (at the option
of Investor either in Class A Shares or Common Shares) based upon its percentage
ownership interest of Class A Shares and Common Shares taken as a single class
for this purpose if the issue is for Class A Shares or Common Shares and based
on its percentage ownership interest of all classes of shares if the issue is
for Class B Shares or other equity securities.
For purposes of this Section 6.03, the term "equity securities" shall
include any class of equity securities, including warrants, options or other
rights to acquire equity securities or debt securities convertible into equity
securities. This Section 6.03 shall not apply with respect to issuances of the
Company's equity securities in connection with (i) a Public Sale by the Company,
(ii) a conversion or exchange of any outstanding securities in accordance with
the terms of such securities as they exist at the date hereof, (iii) a stock
dividend, provided the holders of Class A Shares participate ratably with the
holders of Common Shares in such dividend, (iv) the grant or exercise of stock
options or other grants or purchases of equity securities of the Company
pursuant to any stock option, stock purchase or other employee benefit plan now
or hereafter adopted for employees, directors or consultants of the Company or
(v) the exercise of warrants pursuant to warrant agreements presently existing
- -- it being understood that if the Company issues warrants in the future, the
Investor shall be entitled to preemptive rights as described above, but if the
warrants are issued as part of a unit with other debt or equity securities, the
Investor will be entitled to preemptive rights on the units and will only be
entitled to its preemptive rights with respect to the warrants to the extent
that the Investor purchases the units.
6.4 Transfer Rights. The Investor shall have the unrestricted right to
sell, transfer or assign the Class A Shares (or the Class B Shares into which
they are converted), subject to compliance with applicable securities laws and
foreign ownership restrictions and, if the sale, transfer or assignment is for
Class A Shares, subject to the Shareholders Agreement as if such Class A Shares
were Common Shares. The Class A Shares, assuming their conversion into Class B
Shares, shall be freely transferable on the TSE after six months following
issuance under applicable law. The
-35-
<PAGE> 19
Company shall be required to take any actions necessary to cause the Class A
Shares, assuming their conversion into Class B Shares, to be freely transferable
on NASDAQ after six months following issuance under applicable law.
6.5 Notice of Material Events. The Company covenants and agrees that it
will promptly inform the Investor in writing of the full particulars of:
(a) any Material Change (actual, anticipated, contemplated or
threatened, whether financial or otherwise) in the business, affairs,
operations, assets, liabilities (contingent or otherwise) or capital of the
Company,
(b) any change in any Material Fact contained in the Annual
Information, Supplementary Material or Financial Information (including for
greater certainty, any information incorporated or deemed to be incorporated by
reference therein),
prior to the time of Closing.
6.6 Amendment of Articles of Incorporation. The Company covenants and
agrees with the Investor that prior to the Closing the Board of Directors shall
adopt a resolution to include in the notice of annual meeting of shareholders an
amendment to the Articles of Incorporation of the Company, and shall agree to
recommend that such amendment be approved and adopted by the shareholders of the
Company at the next annual meeting of shareholders to be held on May 10, 2000,
which amendment (i) shall only permit conversion of Class A Shares into Common
Shares if such conversion would not cause a violation of any foreign ownership
restriction under the Communications Act and (ii) shall permit a holder of
Common Shares, at any time or from time to time, to convert, or reconvert, any
Common Shares that it owns into Class A Shares so long as such conversion or
reconversion is made solely for the purpose of preventing the Company from
violating any foreign ownership restriction under the Communications Act. The
Company covenants and agrees with the Investor that it will use its best efforts
to cause such amendment to be adopted and approved.
ARTICLE 7
CONDITIONS TO OBLIGATIONS
7.1 Conditions to the Obligation of the Company. The obligation of the
Company to perform, fulfill or carry out its agreements, undertakings and
obligations herein made or expressed to be performed, fulfilled or carried out
on the Closing Date is and shall be subject to fulfillment of or compliance
with, on or prior to the Closing Date, the following conditions precedent, any
of which may be waived by the Company in its sole discretion, in whole or in
part:
-36-
<PAGE> 20
(a) Representations and Warranties True. Each of the Investor's
representations and warranties contained in this Agreement shall be deemed to
have been made again at and as of the time of the Closing Date and shall then be
true and correct in all material respects. The Investor shall have performed and
complied in all material respects with all agreements and covenants required by
this Agreement to be performed or complied with by it prior to or at the Closing
Date. The Company shall have been furnished with a certificate of the Investor
signed by one of its senior executive officers, dated the Closing Date,
certifying to the fulfillment of the foregoing conditions by it and to the truth
and correctness in all material respects, except for changes contemplated by
this Agreement, as of the Closing Date, of the representations and warranties
made by it contained herein and the satisfaction on the part of the Investor of
all conditions to the obligations of the Company under this SECTION 7.01.
(b) Purchase Price. The Investor shall have delivered the
Purchase Price to the Company as required hereunder.
(c) Resolutions. The Investor shall have delivered to the Company
a certified copy of the resolutions duly adopted by its board of directors
authorizing the execution, delivery and performance of this Agreement.
(d) No New Statutes. No statute, rule or regulation shall have
been enacted by any state or Federal government or governmental agency in the
United States or Canada which could render the consummation of this Agreement
unlawful.
(e) Shareholders Agreement. The Investor shall have entered into
Undertakings (i) whereby the Investor shall become a party to the Shareholders
Agreement and (ii) whereby the Investor agrees not to convert Class A Shares
into Common Shares to the extent any such conversion would cause there to be a
violation of any foreign ownership restrictions under the Communications Act;
provided, however, that to the extent permitted by the Communications Act, in
order for the Investor to obtain the benefit of its preemptive rights under
Section 6.03 hereof, the Investor shall be entitled to convert the Class A
Shares into Common Shares with the understanding that the vote on such Common
Shares would be suspended so long as immediately after such exercise the Common
Shares are reconverted into Class A Shares.
7.2 Conditions to the Obligation of the Investor. The obligation of the
Investor to perform, fulfill or carry out its agreements, undertakings and
obligations herein made or expressed to be performed, fulfilled or carried out
on the Closing Date is and shall be subject to fulfillment of or compliance
with, on or prior to the Closing Date, the following conditions precedent, any
of which may be waived by the Investor, in its sole discretion, in whole or in
part:
(a) Representations and Warranties True. The Company's
representations and warranties contained in this Agreement shall be deemed to
have been made again at and as of the time of the Closing Date and shall then be
true and correct in all material respects. The Company shall have performed and
complied in all material respects, with all agreements and covenants required by
-37-
<PAGE> 21
this Agreement to be performed or complied with by it prior to or at the Closing
Date. The Investor shall have been furnished with a certificate of the Company
signed by a senior executive officer of the Company, dated the Closing Date,
certifying to the fulfillment of the foregoing conditions by it and to the truth
and correctness in all material respects, except for changes contemplated by
this Agreement, as of the Closing Date, of the representations and warranties
made by it contained herein and the satisfaction on the part of the Company of
all conditions to the obligations of the Investor under this SECTION 7.02.
(b) Stock Certificates. The Company shall have delivered to the
Investor duly executed and issued stock certificates representing the Purchased
Shares.
(c) Resolutions. The Company shall have delivered to the Investor
a certified copy of the resolutions duly adopted by its board of directors
authorizing the execution, delivery and performance of this Agreement and the
issuance of the Purchased Shares.
(d) Approvals. All filings with or approvals from all regulatory
authorities to be made or obtained on the part of the Company prior to Closing
so as to validly issue the Purchased Shares shall have been made or obtained, as
the case may be.
(e) No New Statutes. No statute, rule or regulation shall have
been enacted by any state or Federal government or governmental agency in the
United States or Canada which could render the consummation of this Agreement
unlawful.
(f) Opinion of Company Counsel. The Investor shall have received
from counsel to the Company a legal opinion addressed to the Investor, dated as
of the Closing Date, as to the due authorization, execution and enforceability
of this Agreement, the ability of the Company to issue the Purchased Shares free
from the prospectus requirements of applicable securities laws and such other
matters as the parties mutually agree.
(g) Shareholders Agreement. The Investor shall have entered into
an Undertaking whereby the Investor shall become a party to the Shareholders
Agreement and shall be entitled to all of the rights as a shareholder
thereunder.
ARTICLE 8
INVESTOR'S STANDSTILL OBLIGATIONS
8.1 Prior to Closing. Prior to the Closing, the Investor shall not
purchase shares of the Company.
8.2 After Closing.
-38-
<PAGE> 22
(a) After the Closing, unless there shall have occurred a
Standstill Termination Event, and only so long as Telesystem's Percentage
Ownership of outstanding Common Shares does not fall below a Threshold
Percentage of 50% of the Company's outstanding Common Shares (the "Threshold
Percentage") (or a Threshold Percentage of 45% if Telesystem's Percentage
Ownership of the Company's outstanding Common Shares has fallen below 50% as a
result of the Investor's conversion of Class A Shares into Common Shares) (the
"Standstill Period"), the Investor shall not, directly or indirectly, acquire or
agree to acquire any Shares (except by way of (1) stock splits, stock dividends
or other distributions or offerings made available to shareholders of the
Company generally, or (2) stock options, warrants or other rights to purchase
Shares the acquisition of which by Investor have received Disinterested Board
Approval) if, in any such case, the effect of such acquisition would be to
increase the Investor's ownership of Shares to more than 30% of the Company's
total issued and outstanding Shares (the "Standstill Threshold").
(b) Nothing in this Section 8.02 shall have the effect of (i)
precluding the Investor from participating in a Third Party Offer or voting or
agreeing to vote its shares in favor of a Third Party Change of Control in which
the Investor would receive consideration on the same basis as is generally
available to other holders of Shares or (ii) prohibiting the Affiliated
Directors (acting in their capacity as such) from participating (A) in
discussions with other members of the Board or (B) in meetings of the Board.
(c) If the Investor makes such an acquisition that would increase
the Investor's ownership of Shares to more than the Standstill Threshold, such
excess shares shall (for so long as the Investor's ownership of Shares exceeds
the Standstill Threshold) be voted in a manner proportionate to shares voted by
the shareholders of the Company other than the Investor; provided, however, that
if the excess shares shall result from the bad faith actions of the Investor, it
shall promptly divest such excess; provided further, however, that the Investor
shall not be obligated to divest itself of such excess pursuant to this Section
8.02 until such time as such divestment would not subject the Investor to
liability under Section 16(b) of the Exchange Act or any other applicable
provision of Canadian or U.S. law.
8.3 Exception for Certain Third-Party Acquisitions.
(a) Notwithstanding Section 8.02, the Investor may:
(i) acquire Shares without regard to the limitations set
forth above but in accordance with Section 8.03(b) if at any time any Person or
13D Group of persons (such person or persons together with any of their
Affiliates, collectively, a "Triggering Person"), directly or indirectly, (x)
makes a bona fide offer to acquire, or (y) acquires, beneficial ownership of
Shares which, if added to the Shares (if any) already beneficially owned by such
Triggering Person, would represent ownership of Shares greater than 30% of the
Shares outstanding;
(ii) with Disinterested Board Approval, acquire Shares
without regard to the limitations set forth above.
-39-
<PAGE> 23
(b) If an event identified in Section 8.03(a)(i) occurs, the
Investor shall be permitted to take such action and make such offers as may be
considered to be of the same nature and type of action or offer and for the same
resulting number of Shares as that which is being taken by the Triggering
Person. In proceeding with any action or offer permitted under this Section
8.03(b), the Investor shall be permitted to offer more favorable terms such as
price, cash versus securities or other such terms as may be consistent with an
offer of the same nature and type of consideration as that which is being
proposed by the Triggering Person.
(c) If the Investor shall take any such action permitted by this
Section 8.03(c), the Company agrees to refrain (whether by active opposition,
announcement or otherwise) from contesting such action.
8.4 Recapitalizations, Etc. Notwithstanding anything to the contrary
contained in this Article 8, the Investor shall not be obligated to dispose of
any shares if its aggregate percentage ownership of Shares is increased as a
result of (x) a recapitalization of the Company, (y) a repurchase of Shares by
the Company, or (z) any other action taken by the Company or its Affiliates
other than the Investor.
ARTICLE 9
MISCELLANEOUS
9.1 Expenses. Each party shall bear its own expenses incident to the
negotiation, preparation, authorization and consummation of this Agreement and
the transactions contemplated hereby, including all fees and expenses of its
counsel and accountants, whether or not such transactions are consummated.
9.2 Equitable Remedies. The parties hereto agree that irreparable damage
could occur in the event that any of the provisions of this Agreement were not
performed in accordance with the specific terms of the provisions or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, this being in addition to any other
remedy to which they are entitled at law or in equity. Each party agrees that it
will not assert, as a defense against a claim for specific performance, that the
party seeking specific performance has an adequate remedy at law.
9.3 Notices. All notices, claims and other communications hereunder
shall be in writing and shall be made by hand delivery, registered or certified
mail (postage prepaid, return receipt requested), facsimile, or overnight air
courier guaranteeing next day delivery
-40-
<PAGE> 24
(a) if to the Company, to it at:
Microcell Telecommunications Inc.
1000, de la Gauchetiere Street West, 25th Floor
Montreal, Quebec, Canada H3B 4W5
Attention: Michel Cordeau, Esq.
Facsimile: 514-397-0089
(b) if to the Investor, to it at :
VoiceStream Wireless Corporation
3650 131st Avenue SE, Suite 400
Bellevue, Washington 98006
Attention: Alan R. Bender, Esq.
Facsimile No.: 425-653-4840
with a copy (which shall not constitute notice) to:
Friedman Kaplan & Seiler LLP
875 Third Avenue, Eighth Floor
New York, New York 10022
Attention: Barry A. Adelman, Esq.
Facsimile No.: 212-355-6401
or at such other address as any party may from time to time furnish to the other
parties by a notice given in accordance with the provisions of this SECTION
9.03. All such notices and communications shall be deemed to have been duly
given at the time delivered by hand, if personally delivered; five (5) Business
Days after being deposited in the mail, first class postage prepaid, return
receipt requested, if mailed; when receipt is confirmed, if sent by facsimile;
and the next Business Day after timely delivery to the courier, if sent by an
overnight air courier service guaranteeing next day delivery.
9.4 Entire Agreement. This Agreement, together with the Exhibits annexed
hereto, contains the entire understanding among the parties hereto concerning
the subject matter hereof and this Agreement may not be changed, modified,
altered or terminated except by an agreement in writing executed by the parties
hereto. Any waiver by any party of any of its rights under this Agreement or of
any breach of this Agreement shall not constitute a waiver of any other rights
or of any other or future breach.
9.5 Remedies Cumulative. Except as otherwise provided herein, each and
all of the rights and remedies in this Agreement provided, and each and all of
the rights and remedies allowed at law in like case, shall be cumulative, and
the exercise of one right or remedy shall not be exclusive of the right to
exercise or resort to any and all other rights or remedies provided in this
Agreement or at law.
-41-
<PAGE> 25
9.6 Governing Law. This Agreement shall be construed in accordance with
and subject to the laws and decisions of the Province of Quebec, Canada
applicable to contracts made and to be performed entirely therein.
9.7 Counterparts. This Agreement may be executed in several counterparts
hereof, and by the different parties hereto on separate counterparts hereof,
each of which shall be an original; but such counterparts shall together
constitute one and the same instrument.
9.8 Waivers. No provision in this Agreement shall be deemed waived
except by an instrument in writing signed by the party waiving such provision.
9.9 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and to their respective successors
and assigns; provided, however, that except as otherwise expressly set forth in
this Agreement neither the rights nor the obligations of either party may be
assigned or delegated without the prior written consent of the other parties.
9.10 Further Assurances. The Investor shall, at the request of the
Company, and the Company shall, at the request of the Investor, from time to
time, execute and deliver such other assignments, transfers, conveyances and
other instruments and documents and do and perform such other acts and things as
may be reasonably necessary or desirable for effecting complete consummation of
this Agreement and the transactions herein contemplated.
9.11 Disclosures.
(a) Confidentiality. Each of the Investor and the Company
acknowledges and confirms in connection with the negotiation of this Agreement
and the execution hereof, during the period from the date hereof through the
Closing Date, the parties hereto will have furnished to one another certain
materials, information, data and other documentation ("Disclosures") concerning
their business, financial condition and operations which are proprietary and
confidential. Each party acknowledges the party disclosing such Disclosures
considers them secret and confidential and asserts a proprietary interest
therein. Accordingly, each of the Investor, on the one hand, and the Company, on
the other hand, covenants and agrees that it shall maintain all Disclosures made
by the other party in strict confidence and shall not use such Disclosures for
its own benefit or disclose them to third parties, except to its agents,
representatives, bankers, investment bankers, counsel and employees involved in
evaluating the transactions contemplated by this Agreement, its partners (and
the partners or other security holders thereof) or as otherwise required by law
(including the requirement of the Company to disclose such terms under the
securities laws of the United States or Canada, as applicable, or under the
rules of the TSE or of any securities exchange on which the securities of the
Company are registered; and including the requirement of the Investor to
disclose such terms under the Securities Act, the Exchange Act or the securities
laws of the United States or under the rules of NASDAQ).
-42-
<PAGE> 26
(b) Public Announcements. No public announcement by any party
hereto with regard to the transactions contemplated hereby or the material terms
hereof shall be issued by any party without the mutual prior consent of the
other parties, except that in the event the parties are unable to agree on a
press release and legal counsel for one party is of the opinion that such press
release is required by law, then such party may issue the legally required press
release.
(c) Non-Confidential Information. This Agreement shall not
restrict any party hereto from using information already known to it, to which
it is entitled under existing agreements, or information generally in the public
domain or any information coming into its possession after it becomes public
knowledge unless it became public knowledge through a breach of this Agreement.
9.12 Termination.
(a) Events Triggering Termination. This Agreement may be
terminated and the transactions contemplated hereby may be abandoned, without
further obligation of the Company or the Investor, at any time prior to the
Closing Date as follows:
(i) by mutual written consent duly authorized by the
boards of directors of the Company and the Investor; or
(ii) by the Company or the Investor if the Closing Date
shall not have occurred on or before February 29, 2000, or such later date, if
any, as the Company and the Investor shall agree in writing; provided that the
party exercising such right is not in default of its obligations under this
Agreement in a manner which results in the failure to satisfy the conditions to
the transactions contemplated hereby of the other party; or
(iii) by the Company or the Investor if the consummation
of the transactions contemplated hereby shall be prohibited by a final,
non-appealable order, decree or injunction of a court of competent jurisdiction.
(b) No Further Obligation. In the event of a termination of this
Agreement, no party hereto shall have any liability or further obligation to any
other party to this Agreement except that nothing herein will relieve any party
from liability for any breach of this Agreement or for failure to complete the
transactions contemplated by this Agreement for no valid reason equivalent to
bad faith.
9.13 Jurisdiction; Consent to Service of Process. The Investor hereby
irrevocably appoints Goodman Phillips & Vineberg, 1501 McGill College Avenue,
26th Floor, Montreal, Quebec, Canada H3A 3N9, Attention: Leon Garfinkle, its
lawful agent and attorney to accept and acknowledge service of any and all
process against it in any action, suit or proceeding arising in connection with
this Agreement, and upon whom such process may be served, with the same effect
as if such party were a resident of the Province of Quebec and had been lawfully
served with such process in such jurisdiction, and waives all claim of error by
reason of such service, provided, however that in the
-43-
<PAGE> 27
case of any service upon such agent and attorney, the party effecting such
service shall also deliver a copy thereof to the other party at the address and
in the manner specified in SECTION 9.03. In the event that such agent and
attorney resigns or otherwise becomes incapable of acting as such, such party
will appoint a successor agent and attorney in the Province of Quebec reasonably
satisfactory to the other party, with like powers. Each party hereby irrevocably
submits to the exclusive jurisdiction of the Courts of the Province of Quebec in
any such action, suit or proceeding, and agrees that any such action, suit or
proceeding shall be brought only in such court (and waives any objection based
on forum non conveniens or any other objection to venue therein), provided,
however, that such consent to jurisdiction is solely for the purpose referred to
in this SECTION 9.13 and shall not be deemed to be a general submission to the
jurisdiction of said courts other than for such purpose.
9.14 Specific Performance. The parties hereto agree that irreparable
damage could 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
interim, provisional and final 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 Washington or any
Washington state court, in addition to any other remedy to which they are
entitled at law or in equity.
9.15 Language. Les parties ont expressement requis que ce contrat soit
redige en langue anglaise. The parties have expressly requested that this
Agreement be written in the English language.
-44-
<PAGE> 28
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
VOICESTREAM WIRELESS CORPORATION
By:
-------------------------------------
MICROCELL TELECOMMUNICATIONS INC.
By:
-------------------------------------
-45-
<PAGE> 1
Exhibit 10.2
- --------------------------------------------------------------------------------
SHAREHOLDERS AGREEMENT
OF
MICROCELL TELECOMMUNICATIONS INC.
BY AND BETWEEN
VOICESTREAM WIRELESS CORPORATION,
a Washington corporation,
AND
TELESYSTEM ENTERPRISES (T.E.L.) LTD.,
a Canadian corporation
- --------------------------------------------------------------------------------
<PAGE> 2
SHAREHOLDERS AGREEMENT
This SHAREHOLDERS AGREEMENT OF MICROCELL TELECOMMUNICATIONS INC. is made
as of February 11, 2000, by and between VoiceStream Wireless Corporation, a
Washington corporation ("VoiceStream") and Telesystem Enterprises (T.E.L.) Ltd.,
a Canadian corporation ("Telesystem"; Telesystem and the Investor being referred
to herein as the "Shareholders").
WHEREAS, VoiceStream and Microcell Telecommunications Inc., a Canadian
corporation (the "Company"), have entered into a Stock Subscription Agreement,
dated as of February 11, 2000 (the "Subscription Agreement"), pursuant to which
VoiceStream (or its designated Affiliate) has agreed to purchase from the
Company, and the Company has agreed to issue and sell to VoiceStream (or its
designated Affiliate), 9,590,000 of the Company's Class A Shares (the "Class A
Shares"), all on the terms and subject to the conditions set forth in the
Subscription Agreement. VoiceStream or its designated Affiliate that purchases
the Class A Shares being hereinafter referred to as the "Investor."
WHEREAS, Telesystem is directly or indirectly through Investissement
T.E.L. Inc. the owner of 19,924,849 of the Company's Common Shares, which
represent 60.7% of the outstanding Common Shares, and 30.8% of the outstanding
shares of all classes of capital stock of the Company after giving effect to the
issuance and sale of the foregoing Class A Shares to the Investor.
WHEREAS, Telesystem is a party to a shareholders agreement, dated
December 9, 1993, as amended, between all the holders of Common Shares of the
Company (the "Common Shareholders Agreement").
WHEREAS, prior to the Closing, pursuant to and as defined in the
Subscription Agreement, the Investor shall execute an Undertaking to become a
party to the Common Shareholders Agreement and to be bound by, and obtain the
benefits of, its terms and conditions.
WHEREAS, the Shareholders wish to set forth certain agreements
concerning the exercise of their voting rights as shareholders of the Company,
and certain other matters as provided herein.
NOW, THEREFORE, in consideration of the mutual and dependent promises
set forth herein, each Shareholder hereby agrees as follows:
1. EFFECTIVE DATE OF AGREEMENT.
This Agreement shall become effective upon the Closing, pursuant to and
as defined in the Subscription Agreement. If a designated Affiliate of
VoiceStream purchases the Class A Shares, such Affiliate shall at such Closing
execute an agreement to be bound by the terms of this
<PAGE> 3
Agreement and, upon execution of such agreement, shall be the Investor hereunder
for all purposes.
2. DEFINITIONS.
(a) Unless the context requires otherwise, capitalized terms used but
not defined in this Agreement have the meanings given in the Subscription
Agreement.
(b) As used in this Agreement, the following terms have the respective
meanings given below (applicable to both the singular and plural forms of such
terms):
"Acceptance" has the meaning given in Section 5(b)(ii).
"Affiliate" has the meaning given in Section 5.2 of the Common
Shareholders Agreement.
"Agreement" means this Shareholders Agreement of Microcell
Telecommunications Inc., as amended, modified, supplemented or restated from
time to time in accordance with the terms hereof.
"Arbitrators" has the meaning given in Section 12(j) hereof.
"Bid" has the meaning given in Section 5(c)(i).
"Bid Notice" has the meaning given in Section 5(c)(i).
"Board" means the board of directors of the Company.
"Business Day" means any day, other than a Saturday or Sunday, on which
commercial banks are not required or authorized to close in the Province of
Quebec and the State of Washington.
"Change of Control" means with respect to the entity in question (i) the
acquisition by any Person or 13D Group of direct or indirect beneficial
ownership of shares representing 50% or more of the outstanding voting power in
the entity, (ii) any merger, amalgamation, consolidation or business combination
involving the entity resulting in the acquisition by any Person or 13D group of
direct or indirect beneficial ownership of shares representing 50% or more of
the outstanding voting power in the entity, (iii) a sale of all or substantially
all of the assets of the entity or (iv) a recapitalization, restructuring,
liquidation, dissolution or similar extraordinary transaction relating to the
entity resulting in the acquisition by any Person or 13D group of direct or
indirect beneficial ownership of shares representing 50% or more of the
outstanding voting power in the entity.
"Class A Shares" has the meaning given in the preamble hereto.
"Common Shares" means the Company's Common Shares.
-2-
<PAGE> 4
"Common Shareholders Agreement" shall have the meaning set forth in the
preamble hereof.
"Communications Act" shall mean the Telecommunications Act (Canada), the
Canadian Radio-television and Telecommunications Commission Act (Canada) and the
Radiocommunications Act (Canada) (together with the rules, regulations, orders,
policies and decisions thereunder).
"Company" shall have the meaning set forth in the preamble hereof.
"Dispute" has the meaning given in Section 12(j).
"Investor" shall have the meaning set forth in the preamble hereof.
"Lien" means any pledge, mortgage, assignment by way of security, or
other lien or encumbrance of any nature.
"Offer" has the meaning given in Section 5(a)(i).
"Offer Period" has the meaning given in Section 5(b)(ii).
"Percentage Ownership" means as to Telesystem, the percentage determined
by dividing the aggregate number of Common Shares owned by Telesystem at the
time of determination by the total number of outstanding Common Shares at the
time of determination.
"Person" means an individual, partnership, joint-stock company,
corporation, trust or unincorporated organization, limited liability company, or
a government or agency or political subdivision thereof or any other entity.
"Public Sale" means a sale of Shares over The Toronto Stock Exchange or
NASDAQ.
"Regulatory Approvals" has the meaning given in Section 5(b)(iv).
"Sale" has the meaning given in Section 5(b)(i).
"Sale Closing Period" has the meaning given in Section 5(b)(iv).
"Sales Notice" has the meaning given in Section 5(b)(i).
"Sales Price" has the meaning given in Section 5(b)(i).
"Seller" has the meaning given in Section 5(a)(i).
"Shareholder" means, initially, the Investor and Telesystem, and shall
include any other shareholder of the Company who becomes entitled to the rights
and subject to the obligations of the Investor or Telesystem hereunder. Unless
otherwise specified herein or unless the context
-3-
<PAGE> 5
requires otherwise, references to any "Shareholder" shall be deemed to include
all Affiliates of such Shareholder holding any Shares.
"Shares" means any equity interest in the Company, whether Common
Shares, Class A Shares, Class B Shares, Preferred Shares, or the shares into
which such shares are converted.
"Subsidiary" means, as to any Person, another Person which is an entity
as to which such Person owns more than 50% of the outstanding voting power.
"Subscription Agreement" has the meaning given in the preamble hereto.
"Tag Along Rights" shall mean the rights described in Section 7.
"Telesystem" means Telesystem Enterprises (T.E.L.) Ltd., a Canadian
corporation, and, unless otherwise specified herein or unless the context
requires otherwise, includes its successors and all Affiliates of Telesystem
which hold Shares of the Company.
"third party" means a Person who is not a party to this Agreement or an
Affiliate of any party to this Agreement.
"13D Group" means, irrespective of the applicability of United States
securities laws, any group of persons formed for the purpose of acquiring,
holding, voting or disposing of Shares which would be required under Section
13(d) of the Securities Exchange Act of 1934 (the "Exchange Act"), and the rules
and regulations promulgated thereunder, to file a statement on Schedule 13D or a
Schedule 13G with the United States Securities and Exchange Commission as a
"person" within the meaning of Section 13(d)(3) of the Exchange Act if such
group "beneficially owned" sufficient securities to require such a filing under
the Exchange Act. When references herein are to a group under Section 13(d) and
not to members of such group, such references shall be deemed to refer to
actions of the group acting as such group and not to the individual actions of
any members of such group.
"Threshold Percentage" has the meaning given in Section 7(a).
"Transfer" means any sale, assignment, or other transfer or disposition
of any interest (and includes an exchange of shares in a merger, consolidation
or similar transaction), but does not include a transfer by way of pledge,
hypothecation, or grant of a security interest.
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 a
gender herein shall be deemed to include the neuter, masculine and feminine
genders whenever necessary or appropriate. Whenever the word "herein,"
"hereunder" or "hereof" is used in this Agreement, it shall be deemed to refer
to this Agreement and not to a particular Section of this Agreement unless
expressly stated otherwise.
3. ELECTION OF REPRESENTATIVES TO THE BOARD.
-4-
<PAGE> 6
(a) At the Closing, Telesystem shall, and shall cause each of its
Affiliates to, use its best efforts to cause its nominees to the Board to vote
for the appointment of two (2) directors designated by the Investor as provided
in Section 5.01 of the Subscription Agreement.
(b) Thereafter, Telesystem shall, and shall cause each of its Affiliates
to, use its best efforts to cause its nominees to the Board to vote for the
nomination of the number of directors that the Investor is entitled to appoint
as provided in Section 5.01(a) of the Subscription Agreement, as candidates for
the election to the Board.
(c) Telesystem shall, and shall cause each of its Affiliates to, vote
all of its Common Shares in favour of the election of the Investor's nominees to
the Board, provided such vote does not cause Telesystem to be in default of its
obligations under the Common Shareholders Agreement; provided, however, if such
vote would cause Telesystem to be in default under the Common Shareholders
Agreement, then Telesystem shall use its best efforts to obtain the approval of
the other parties to the Common Shareholders Agreement to waive the default and
if despite its best efforts it is not successful in obtaining such waiver shall
designate at least one of the designees of the Investor as a Telesystem designee
to the Board.
(d) No designee to the Board by Investor shall be removed from the Board
(except removal for cause under applicable law) without the written consent of
the Investor. Upon written request from the Investor, Telesystem shall use its
best efforts to cause its nominees to the Board to vote for the removal of any
director designated by the Investor and for the appointment of his replacement.
(e) The Investor shall vote all of its Common Shares in favour of the
election of Telesystem's nominees to the Board, provided such vote does not
cause the Investor to be in default of its obligations under the Common
Shareholders Agreement.
4. APPOINTMENT TO THE CORPORATE GOVERNANCE COMMITTEE.
Telesystem shall use its best efforts to cause its nominees to the Board
to vote for the appointment of one of the Investor's Board nominees as a member
of the Corporate Governance Committee of the Company (a) at the meeting of the
directors to be held immediately after the annual meeting of shareholders on May
10, 2000 as provided in Section 5.02 of the Subscription Agreement and (b) at
each annual meeting of the Board subsequent to the meeting on May 10, 2000.
5. RIGHTS OF FIRST OFFER AND FIRST REFUSAL
(a) (i) If Telesystem or Investissement T.E.L. Inc. or Telesystem Ltd.,
the parent company of Telesystem (collectively, the "Seller") desires to enter
into a transaction or series of transactions, related or unrelated, the effect
of which, directly or indirectly, results in a Change of Control of any Seller
(including the sale of a Subsidiary substantially all of the assets of which are
the Shares), then the Seller shall first offer (the "Offer") the opportunity to
Investor (or its
-5-
<PAGE> 7
designees) to complete the transaction on the same terms and conditions in
accordance with the procedures for rights of first offer set forth in Section
5(b) hereof.
(ii) In the event such proposed Transfer by Seller shall arise as
a result of a Bid to Seller which Seller intends to accept, the Seller shall
first offer the opportunity to the Investor (or its designee) to complete the
transaction on the same terms and conditions in accordance with the procedures
for rights of first refusal set forth in Section 5(c) hereof.
(b) (i) The Seller shall give written notice (a "Sales Notice") to the
Investor that the Seller desires to effect such a transaction (a "Sale") and
setting forth the terms and conditions it desires for such Sale (the "Sales
Price").
(ii) The receipt of the Sales Notice by the Investor shall
constitute an Offer by the Seller to make such Sale to the Investor (or its
designees) for cash at the Sales Price. The Investor shall have ten (10)
business days (the "Offer Period") in which to give a written notice (an
"Acceptance") to the Seller, which written notice shall state the Investor's (or
its designees') acceptance of the Offer.
(iii) If the Investor (or its designees) shall fail to deliver an
Acceptance to the Seller before the expiration of the Offer Period, it shall be
deemed to have elected not to accept the Offer.
(iv) An Acceptance shall be a binding obligation of the Investor
(or its designees) to complete the Sale and the Seller shall be under a binding
obligation to complete the Sale, pursuant to the Acceptance within ninety (90)
to one hundred fifty (150) calendar days from the date on which the Investor (or
its designees) transmits its Acceptance to the Seller (the "Sale Closing
Period"); provided, however, that if the Sale is subject to any prior regulatory
approval, consent, waiver, notice or like requirement ("Regulatory Approvals"),
and at the end of the Sale Closing Period the Regulatory Approvals have not
become final and non-appealable then, provided that the Investor (or its
designees) shall promptly make any necessary filings or applications for, and
diligently pursue, the satisfaction of such Regulatory Approvals, the parties
will negotiate in good faith a reasonable extension of the Sale Closing Period.
(v) At the closing of any Sale, the Seller shall deliver to the
Investor (or its designees), against receipt of the purchase price therefor by
cash or certified or bank cashier's check, the certificate or certificates
representing the shares subject to the Sale, properly endorsed for transfer,
with all necessary transfer and documentary stamps affixed, and in a form such
that upon presentation to the issuer of such shares, the shares represented
thereby may be registered in the name of the Investor (or its designees).
(vi) If the Sale is not completed in the Sale Closing Period, the
Seller will have the right to offer to complete the transaction with a third
party under terms and conditions that are not more favorable than those offered
to Investor in which case the Seller must again make an offer to the Investor
but pursuant to Section 5(c) hereof.
(c) Procedure for Rights of First Refusal.
-6-
<PAGE> 8
(i) If at any time Seller receives an offer from a third party to
consummate a Sale (a "Bid") which the Seller intends to accept, prior to making
any Sale, the Seller shall give written notice (the "Bid Notice") to the
Investor, accompanied by a copy of such Bid.
(ii) The receipt of the Bid Notice by the Investor shall
constitute an irrevocable offer of the Seller to make the Sale to the Investor
(or its designees) on the terms and conditions and at the price specified in the
Bid Notice (including the exact form and type of consideration offered in the
Bid). Upon receipt of the Bid Notice, the Investor (or its designees) shall have
an Offer Period of ten (10) business days in which to deliver an Acceptance to
the Seller, which written Acceptance shall state Investor's (or its designees')
intention to complete the Sale on the terms set forth in the Bid Notice.
(iii) If Investor (or its designees) shall fail to deliver an
Acceptance to the Seller before the expiration of the Offer Period, it shall be
deemed to have elected not to exercise its right of first refusal.
(iv) An Acceptance shall be a binding obligation of the Investor
(or its designees) to complete the Sale and the Seller shall be under a binding
obligation to complete the Sale, pursuant to the Acceptance, within a Sale
Closing Period of the later of (y) thirty (30) calendar days after delivery of
its Acceptance, or (z) the date set by the third party for consummation of the
purchase under the Bid; provided, however, that if the Sale is subject to any
prior Regulatory Approvals, and at the end of the Sale Closing Period the
Regulatory Approvals have not become final and non-appealable then, provided
that the Investor (or its designees) shall promptly make any necessary filings
or applications for, and diligently pursue, the satisfaction of such Regulatory
Approvals, the parties will negotiate in good faith a reasonable extension of
the Sale Closing Period.
(v) At the closing of any Sale the Seller shall deliver to the
Investor (or its designees) against receipt of the purchase price therefor by
cash or certified or bank cashier's check, in respect of the cash portion of
such purchase price and such other relevant instruments or securities as are
required to comprise the consideration offered in the Bid, the certificate or
certificates representing the shares which are the subject of the Sale, properly
endorsed for transfer, with all necessary transfer and documentary stamps
affixed, and in a form such that upon presentation to the issuer of such shares,
the shares represented thereby may be registered in the name of the Investor (or
its designees).
(vi) If the consideration specified in the Bid is all cash, the
Investor (or its designees) must pay all cash in any purchase pursuant to this
Section 5(c). In the event that the consideration specified in the Bid is other
than all-cash consideration, the following shall apply: (A) if the non-cash
consideration consists either of part cash and part obligations of the maker of
the Bid (either totally unsecured or secured either by the assets which are the
subject of the Sale or by other security which the Investor (or its designees)
could reasonably supply) or solely obligations of the maker of the Bid, the
Investor (or its designees) may consummate the Sale pursuant to this Section
5(c) by delivering the same combination of cash and its own obligations to the
Seller upon the same terms and conditions and with the same security as the
obligations specified in the Bid; or (B) if the non-cash consideration consists
of items which do not fall within
-7-
<PAGE> 9
the ambit of the immediately preceding clause (A), the Investor (or its
designees) may consummate the Sale pursuant to this Section 5(c) by electing
either (x) to pay all cash in an amount equal to the present value of the
consideration specified in the Bid, such value to be agreed upon by the Seller
and the Investor (or its designees), or (y) to complete the Sale on the same
terms and conditions as those contained in the Bid (substituting the obligations
of the Investor (or its designees) for the maker of the Bid as required and
making any other adjustments thereto required by the circumstances as the Seller
and the Investor (or its designees) shall agree to). In the event that the
Seller and the Investor (or its designees) cannot agree as to a matter specified
in clause (B) of the immediately preceding sentence within 15 days after the
Investor (or its designees) delivers the Acceptance to the Seller, each of the
Seller and the Investor (or its designees) shall designate as an arbitrator a
Person experienced in finance and business, and such two arbitrators shall
designate a third arbitrator (or if the first two arbitrators cannot agree upon
a third arbitrator within ten days, such third arbitrator shall be chosen by the
American Arbitration Association). The designation of arbitrators hereunder
shall automatically delay the due date for payment of the purchase price for the
Sale pursuant to Section 5(c) hereof until ten days after the conclusion of such
arbitration. Such arbitrators shall be directed to promptly conduct, at the
expense of the Seller and the Investor (or its designees) an arbitration to
determine by majority vote the matter in dispute. Such arbitrators shall be
directed to give notice of their determination within 30 days after the
appointment of the third arbitrator, and the decision reached in such notice of
determination as to the matter in dispute shall be final, binding and conclusive
upon the Seller and the Investor (or its designees) for all purposes hereof.
(d) Termination of Rights of First Offer and First Refusal. The
Investor's rights of first offer and first refusal given in this Section 5 shall
be terminated whenever in a transaction or series of transactions, related or
unrelated, the Investor Transfers (other than to an Affiliate) 50% or more of
the amount of Shares it owns as of the Closing.
6. ADDITIONAL NOTICE BY TELESYSTEM.
Prior to Telesystem's Transfer or offer to Transfer any Shares to which
the Common Shareholders Agreement provides any right of first offer, right of
first refusal or piggyback rights, Telesystem will give the Investor written
notice of such proposed transaction sufficiently in advance to enable the
Investor to convert any Class A Shares that it holds into Common Shares so as to
preserve the Investor's full pro rata rights to participate in or take advantage
of such proposed transaction as a holder of Common Shares under the Common
Shareholders Agreement.
7. TAG ALONG RIGHT.
(a) If at any time after the date of this Agreement Telesystem wishes to
Transfer, in one transaction or a series of transactions, related or unrelated,
directly or indirectly including the sale of a Subsidiary substantially all of
the assets of which are the Shares, other than by a sale of Shares on the
Toronto Stock Exchange or NASDAQ, an amount of Common Shares that would result
in Telesystem's Percentage Ownership being less than 50% of the Company's
outstanding Common Shares (the "Threshold Percentage") (or a Threshold
Percentage of 45% if Telesystem's Percentage Ownership of the Company's
outstanding Common Shares previously has fallen below
-8-
<PAGE> 10
50% as a result of the Investor's conversion of Class A Shares into Common
Shares), Telesystem shall notify the Investor, in writing, of such proposed
Transfer and its terms and conditions. Within fifteen (15) business days after
the date that such notice is delivered to the Investor, the Investor shall
notify Telesystem if it elects to participate in such Transfer (which notice
shall be irrevocable). The Investor, if it so notifies Telesystem, shall have
the right to sell up to the same percentage of its Shares as Telesystem wishes
to Transfer to the transferee. Telesystem shall cause the transferee to purchase
at the same time as the purchase from Telesystem all the Shares elected to be
Transferred by the Investor in accordance with the foregoing on the same terms
and conditions per share as are obtained by Telesystem and as were specified in
Telesystem's notice to the Investor pursuant to this Section 7(a), except for
the Common Shares of the Investor which are purchased by other holders of Common
Shares pursuant to the right of first refusal under the Common Shareholders
Agreement.
(b) Telesystem and the Investor each agree to make full disclosure to
the other concerning the details of any relationship and dealings it may have
with the proposed transferee in any transaction to which this Section 7 applies.
Telesystem shall keep the Investor advised in writing of, and consult on a
timely basis with the Investor concerning, any transfer it may propose to make
with respect to which the tag along rights under this Section 7 may apply.
8. ISSUANCE OF COMPANY SECURITIES.
(a) If at any time after the date hereof, the Company proposes to issue
equity securities of any kind for which the Company has agreed to give
preemptive rights to the Investor as provided in Section 6.03 of the
Subscription Agreement, then Telesystem shall, and shall cause each of its
Affiliates to, use its best efforts to cause its nominees to the Board to vote
in favor of a resolution enabling the Investor to exercise its preemptive rights
to acquire such securities.
(b) The election by the Investor not to exercise its purchase rights
under this Section 8 in any one instance shall not affect its rights as to any
subsequent proposed issuance.
(c) Telesystem will not take any action or fail to take any action the
effect of which would be to cause or permit any Subsidiary of the Company to
issue any equity securities (except for issuances of stock dividends or in
connection with a merger, amalgamation, reclassification or other reorganization
resulting in no reduction in the Company's direct or indirect equity interest in
such Subsidiary), unless in such issuance the Investor is given preemptive
rights comparable to those set forth in this Section 8.
9. ADDITIONAL COVENANTS.
(a) Amendment of Articles of Incorporation. Telesystem covenants and
agrees with the Investor that at the next annual meeting of shareholders of the
Company to be held on May 10, 2000, it will cause, and will cause each of its
Affiliates to, vote all of its Shares in favour of the approval and adoption of
an amendment to the Articles of Incorporation of the Company, which amendment
(i) shall only permit conversion of Class A Shares into Common Shares if such
conversion would not cause a violation of any foreign ownership restriction
under the Communications Act and (ii) shall permit a holder of Common Shares, at
any time or from time to
-9-
<PAGE> 11
time, to convert, or reconvert, any Common Shares that it owns into Class A
Shares so long as such conversion or reconversion is made solely for the purpose
of preventing the Company from violating any foreign ownership restrictions
under the Communications Act. Telesystem covenants and agrees with the Investor
that it will use its best efforts to cause such amendment to be adopted and
approved at such annual meeting.
(b) Amendment of Common Shareholders Agreement. Telesystem covenants and
agrees with the Investor that it will, and it will cause each of its Affiliates
to, use its best efforts to cause the Common Shareholders Agreement to be
amended so that the Investor will receive the full benefit of the Common
Shareholders Agreement, treating all Class A Shares owned by the Investor as
Common Shares for all purposes of the Common Shareholders Agreement, including
its proportionate right to designate directors, its preemptive rights, rights of
first offer and rights of first refusal. In this regard, Telesystem covenants
and agrees with the Investor that it will, and it will cause each of its
Affiliates to, use its best efforts to cause each of the other parties to the
Common Shareholders Agreement to execute such amendment. If such an amendment is
executed by all the parties to the Common Shareholders Agreement, the provisions
of Sections 3, 6, 8 and 12(e)(ii) hereof shall terminate and be of no further
force or effect.
10. REPRESENTATIONS AND WARRANTIES.
(a) Representations and Warranties of Telesystem. Telesystem represents
and warrants to the Investor, which representations and warranties shall survive
the execution and delivery of this Agreement and the consummation of the
transactions herein contemplated, as follows:
(i) Due Organization. Telesystem is a corporation duly
incorporated, validly existing and in good standing under the Canada Business
Corporation Act and has all corporate powers and authority required to carry on
its business as now conducted, and to own, operate and lease its property.
(ii) Power and Authority; No Violation. Telesystem 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 Telesystem and this Agreement constitutes
a legal, valid and binding obligation of Telesystem 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 Telesystem will, with or without the giving of notice or
the passage of time, or both, (A) 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 (x) any provision of
the articles of incorporation, by-laws, stockholders agreements or other
constituent documents of Telesystem or any Telesystem Subsidiary; (y) any
material note, bond, indenture, mortgage, deed of trust, contract, agreement,
lease or other instrument or obligation to which Telesystem or any Telesystem
Subsidiary is a party or by which Telesystem or the property of Telesystem may
be bound or affected; or (z) any
-10-
<PAGE> 12
law, order, judgment, ordinance, rule, regulation or decree to which Telesystem
or any Telesystem Subsidiary is a party or by which Telesystem or the property
of Telesystem is bound or affected; or (ii) give rise to any right of first
refusal or similar right with respect to any interest, or any properties or
assets, of Telesystem or any Telesystem Subsidiary.
(iii) Governmental Authorization. Except as set forth on Exhibit
11(a)(iii) hereto, the execution, delivery and performance by Telesystem of this
Agreement require no action by or in respect of, or filing with, any
governmental body.
(iv) Litigation. There is no claim, legal action, counterclaim,
suit, arbitration, governmental investigation or other administrative or tax
proceeding (or any basis therefor) or any order, decree or judgment, in progress
or pending against, or, to the knowledge of threatened against or affecting,
Telesystem or any Telesystem Subsidiary 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, could be reasonably expected to have a
material adverse effect on this Agreement or on the transactions contemplated
hereby.
(v) Truth and Correctness. No representation or warranty by
Telesystem in this Agreement contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact necessary to make
the statements contained herein or therein, in light of the circumstances under
which such statements are made, not misleading.
(b) Representations and Warranties of the Investor. The Investor
represents and warrants to the Investor, which representations and warranties
shall survive the execution and delivery of this Agreement and the consummation
of the transactions herein contemplated, as follows:
(i) Due Organization. The Investor is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Washington and has all corporate powers and authority required to carry on
its business as now conducted, and to own, operate and lease its property.
(ii) Power and Authority; No Violation. The Investor 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 the Investor and this Agreement
constitutes a legal, valid and binding obligation of the Investor 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 the Investor will, with or without the giving of notice
or the passage of time, or both, (A) 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 (x) any
provision of the articles of incorporation, by-laws, stockholders agreements or
other constituent documents of the Investor or any Investor Subsidiary; (y) any
material note, bond, indenture, mortgage, deed of trust, contract, agreement,
-11-
<PAGE> 13
lease or other instrument or obligation to which the Investor or any Investor
Subsidiary is a party or by which the Investor or the property of the Investor
may be bound or affected; or (z) any law, order, judgment, ordinance, rule,
regulation or decree to which or any Investor Subsidiary is a party or by which
the Investor or the property of the Investor is bound or affected; or (ii) give
rise to any right of first refusal or similar right with respect to any
interest, or any properties or assets, of the Investor or any Investor
Subsidiary.
(iii) Governmental Authorization. Except as set forth on Exhibit
11(a)(iii) hereto, the execution, delivery and performance by the Investor of
this Agreement require no action by or in respect of, or filing with, any
governmental body.
(iv) Litigation. There is no claim, legal action, counterclaim,
suit, arbitration, governmental investigation or other administrative or tax
proceeding (or any basis therefor) or any order, decree or judgment, in progress
or pending against, or, to the knowledge of threatened against or affecting, the
Investor or any Investor Subsidiary 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, could be reasonably expected to have a
material adverse effect on this Agreement or on the transactions contemplated
hereby.
(v) Truth and Correctness. No representation or warranty by the
Investor in this Agreement contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact necessary to make
the statements contained herein or therein, in light of the circumstances under
which such statements are made, not misleading.
11. FURTHER ASSURANCES OF TELESYSTEM.
Telesystem agrees that it will not take, or directly or indirectly cause
or permit any other person to take, any action that would impair or adversely
affect any of Investor's rights under the Subscription Agreement and this
Agreement, including the Investor's Preemptive Rights.
12. MISCELLANEOUS.
(a) Waiver; Amendments. Except as expressly provided otherwise herein,
neither this Agreement nor any provision hereof may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
each of the Investor and Telesystem.
(b) Recapitalization, Exchanges, Etc. The provisions of this Agreement
shall apply to the full extent set forth herein with respect to shares or other
securities of the Company that may be issued to any Shareholder in respect of,
in exchange for, or in substitution of the Shares.
(c) Specific Performance. Each of the parties hereto acknowledges and
agrees that, in the event of any breach of this Agreement, the non-breaching
parties would be irreparably harmed and could not be made whole by monetary
damages. Accordingly, each of the parties hereto agrees that the other parties,
in addition to any other remedy to which they may be entitled at law or in
equity, shall be entitled to compel specific performance of this Agreement
pursuant to Section 14(k)(x).
-12-
<PAGE> 14
(d) Notices. All notices, requests, demands and other communications
hereunder shall be in writing and, except to the extent otherwise expressly
provided in this Agreement, shall be deemed to have been duly given if delivered
by same day or next day courier (guaranteed delivery) or mailed, registered
mail, return receipt requested, or transmitted by facsimile to a Shareholder, at
such Shareholder's address appearing below or at any other address such
Shareholder may have provided in writing to the other Shareholder. If a notice
hereunder is transmitted by confirmed fax so as to arrive during normal business
hours during a Business Day at the place of receipt, then such notice shall be
deemed to have been given on such Business Day at the place of receipt or, if so
transmitted to arrive after normal business hours during a Business Day at the
place of receipt, then such notice shall be deemed to have been given on the
following Business Day at the place of receipt. If such notice is sent by
next-day courier it shall be deemed to have been given on the next Business Day
at the place of receipt following sending and, if by mail, on the fifth Business
Day at the place of receipt following sending.
The Investor:
VoiceStream Wireless Corporation
3650 131 Avenue SE
Bellevue, Washington 98006
U.S.A.
Attention: Alan R. Bender
Tel: (425) 586-8014
Fax: (425) 586-8080
With a copy (which shall not constitute notice) to:
Friedman Kaplan & Seiler LLP
875 Third Avenue
New York, New York 10022-6225
U.S.A.
Attention: Barry A. Adelman
Tel: (212) 833-1100
Fax: (212) 355-6401
Telesystem:
Telesystem Enterprises (T.E.L.) Ltd.
1000, de la Gauchetiere Street West
25th Floor
Montreal, Quebec H3B 4W5
Canada
Attention: Michel Cordeau, Esq.
-13-
<PAGE> 15
Tel: (514) 397-9797
Fax: (514) 397-0089
(e) Successors and Assigns.
(i) Except as otherwise provided herein, this Agreement shall
inure to the benefit of, and be binding upon, the successors and assigns of each
of the parties; provided, however, that this Agreement may not be assigned by
any party hereto other than in compliance with the terms hereof, including the
restrictions on transfers of Shares as set forth herein.
(ii) If at any time in a single transaction or series of
transactions, Telesystem Transfers, directly or indirectly including the sale of
control of a Subsidiary substantially all of the assets of which are
Telesystem's Shares, 50% or more of the Shares that its owns at the Closing, to
any Person or group of related Persons, Telesystem shall require such Person or
group of Related Persons to agree to be bound by all of the provisions of this
Agreement that are binding on Telesystem. This shall be required whether or not
the Investor has exercised any of its rights of first offer, rights of first
refusal, or tag along rights with regard to any such Transfer.
(f) Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original and all of which together shall be
considered one and the same agreement.
(g) Entire Agreement. This Agreement constitutes the entire
understanding of the parties hereto with respect to the subject matter hereof
and supersedes all prior understandings among such parties with respect to such
subject matter.
(h) Applicable Law. The validity of this Agreement, its construction,
interpretation and enforcement, and the rights of the parties hereunder, shall
be determined under, governed by and construed in accordance with the internal
laws of the Province of Quebec without regard to its conflicts of laws
principles. Each party hereto agrees that, subject to Section 14(k) hereof, any
suit, action or other proceeding arising out of this Agreement shall be brought
and litigated in the courts of the Province of Quebec and each party hereto
hereby irrevocably consents to personal jurisdiction and venue in any such court
and hereby waives any claim it may have that such court is an inconvenient forum
for the purposes of any such suit, action or other proceeding.
(i) Section Headings. The headings of the sections and subsections of
this Agreement are inserted for convenience only and shall not be deemed to
constitute a part thereof.
(j) Arbitration. Any and all disputes, controversies or claims (each a
"Dispute") between the Shareholders relating to the interpretation or
enforcement or performance of this Agreement (other than under Section 5(c)(vi)
hereof disputes under which shall be resolved as set forth therein) shall be
resolved by binding arbitration in accordance with the rules of the American
Arbitration Association, subject to the following provisions:
(i) There shall be three arbitrators (the "Arbitrators"). Each
party shall appoint one arbitrator within thirty (30) days after giving or
receiving notice of the submission of
-14-
<PAGE> 16
a Dispute to arbitration. The two arbitrators appointed by the parties shall
appoint the third arbitrator. If a party does not appoint an arbitrator within
such designated period, or if the two appointed arbitrators fail to appoint a
third arbitrator within thirty (30) days after their appointment, the relevant
appointment shall be made by the American Arbitration Association.
(ii) The expenses of the arbitration shall be borne equally by
the Investor, on the one hand, and Telesystem, on the other hand, and each party
shall bear its own legal fees and expenses; provided, however, that the
Arbitrators shall have discretion to require that one party pay all or a portion
of the expenses of arbitration or the other party's legal fees and expenses in
connection with any particular arbitration.
(iii) The Arbitrators shall determine whether and to what extent
any party shall be entitled to damages or equitable relief. No party shall be
entitled to punitive damages or consequential damages or shall be required to
post a bond in connection with equitable relief.
(iv) The Arbitrators shall not have the power to add to nor
modify any of the terms or conditions of this Agreement. The Arbitrators'
decision shall not go beyond what is necessary for the interpretation and
application of the provisions of this Agreement in respect of the issue before
the Arbitrators. The Arbitrators' decision and award or permitted remedy, if
any, shall be based upon the issue as drafted and submitted by the respective
parties and the relevant and competent evidence adduced at the hearing(s).
(v) The Arbitrators shall have the authority to award any remedy
or relief provided for in this Agreement, in addition to any other remedy or
relief (including provisional remedies and relief) that a court of competent
jurisdiction could order or grant (but subject to the remedial limitations
elsewhere set forth in this Agreement, including the aforesaid prohibition
against punitive and consequential damages), including specific performance of
the terms of this Agreement and/or injunctive relief against any violation
thereof. The Arbitrators' written decision shall be rendered within sixty (60)
days of the hearing. The decision reached by the Arbitrators shall be final and
binding upon the parties as to the matter in dispute. To the extent that the
relief or remedy granted by the Arbitrators is relief or remedy on which a court
could enter judgement, a judgement upon the award rendered by the Arbitrators
may be entered in any court of competent jurisdiction (unless in the case of an
award of damages, the full amount of the award is paid within ten (10) days of
its determination by the Arbitrators). Otherwise, the award shall be binding on
the parties in connection with their continuing performance of this Agreement
and in any subsequent arbitral or judicial proceeding between the parties.
(vi) The arbitration shall take place in Montreal, unless
otherwise agreed by the parties, and shall be conducted in the English language.
(vii) The arbitration proceeding and all filings, testimony,
documents and information relating to or presented during the arbitration
proceeding shall be disclosed exclusively for the purpose of facilitating the
arbitration process and for no other purpose.
(viii) The parties shall continue performing their respective
obligations under this Agreement notwithstanding the existence of a Dispute
while the Dispute is being resolved unless
-15-
<PAGE> 17
and until such obligations are terminated, expire or are suspended in accordance
with the provisions hereof.
(ix) The Arbitrators may, in their sole discretion, order a
pre-hearing exchange of information including production of documents, exchange
of summaries of testimony or exchange of statements of position, and shall
schedule promptly all discovery and other procedural steps and otherwise assume
case management initiative and control to effect an efficient and expeditious
resolution of the Dispute. At any oral hearing of evidence in connection with an
arbitration proceeding, each party and its counsel shall have the right to
examine its witnesses and to cross-examine the witnesses of the other party. No
testimony of any witness shall be presented in written form unless the opposing
party or parties shall have the opportunity to cross-examine such witness,
except as the parties otherwise agree in writing.
(x) Notwithstanding the dispute resolution procedures contained
in this Section 14(k), either party may apply to any court of competent
jurisdiction (a) to enforce this Agreement to arbitrate, (b) to seek provisional
injunctive relief so as to maintain the status quo until the arbitration award
is rendered or the Dispute is otherwise resolved, or (c) to challenge or vacate
any final judgment, award or decision of the Arbitrators that does not comport
with the express provisions of this Section 13(k). No party shall be required to
post a bond in connection with equitable relief sought from any court.
(k) Investor's Exercise of Rights to Comply with Communications Act. If
the Investor determines to exercise a right of first refusal, right of first
offer, or preemptive rights as provided by this Agreement, the Investor shall do
so in compliance with the Communications Act, and Telesystem shall fully
cooperate, and shall take all actions reasonably necessary (whether in the
capacity of a stockholder, director or member of a board committee of the
Company or otherwise, and including attendance at meetings in person or by proxy
for purposes of obtaining a quorum and execution of written consents in lieu of
meetings) to cause the Company to cooperate, to enable the Investor to exercise
such rights in compliance with the Communications Act.
(l) Failure to Pursue Remedies. The failure of any party to seek redress
for violation of, or to insist upon the strict performance of, any provision of
this Agreement shall not prevent a subsequent act, which would have originally
constituted a violation, from having the effect of an original violation.
(m) Cumulative Remedies. The rights and remedies provided by this
Agreement are cumulative and the use of any one right or remedy by any party
shall not preclude or waive its right to use any or all other remedies except as
otherwise expressly provided in this Agreement. Such rights and remedies are
given in addition to any other rights the parties may have by law, statute,
ordinance or otherwise.
(n) Severability. The invalidity or unenforceability of any particular
provision of this Agreement shall not affect the other provisions hereof, and
this Agreement shall be construed in all respects as if such invalid or
unenforceable provision were omitted.
-16-
<PAGE> 18
(o) Language. Les parties ont expressement requis que ce contrat soit
redige en langue anglaise. The parties have expressly requested that this
Agreement be written in the English language.
-17-
<PAGE> 19
IN WITNESS WHEREOF, the parties hereto have executed this Shareholders
Agreement of Microcell Telecommunications, Inc. as of the date first above
written.
VOICESTREAM WIRELESS CORPORATION
[OR AFFILIATE]
---------------------------------------
Name:
Title:
TELESYSTEM ENTERPRISES (T.E.L.) LTD.
---------------------------------------
Name:
Title:
-18-
