Exhibit 2.1
EXECUTION COPY
--------------------------------------------------------------------------------
AGREEMENT AND PLAN OF MERGER
Dated as of July 23, 2000
Between
DEUTSCHE TELEKOM AG
And
VOICESTREAM WIRELESS CORPORATION
--------------------------------------------------------------------------------
TABLE OF CONTENTS
PAGE
ARTICLE 1
THE MERGER
Section 1.01. Appointment of Escrow Agent and Formation of Merger Sub. ... 1
Section 1.02. The Merger ................................................. 2
Section 1.03. The Closing ................................................ 2
Section 1.04. The Merger Exchange ........................................ 3
Section 1.05. Conversion and Exchange of Shares .......................... 4
Section 1.06. Surrender and Payment ...................................... 10
Section 1.07. [Reserved] ................................................. 12
Section 1.08. Treatment of Voicestream Stock Plans ....................... 12
Section 1.09. Fractional DT Depositary Shares and Fractional DT Ordinary
Shares ..................................................... 13
Section 1.10. The Surviving Corporation .................................. 14
Section 1.11. Lost, Stolen or Destroyed Certificates ..................... 14
Section 1.12. Dissenting Shares .......................................... 14
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF VOICESTREAM
Section 2.01. Organization and Qualification; Subsidiaries ............... 15
Section 2.02. Certificate of Incorporation and Bylaws .................... 15
Section 2.03. Capitalization ............................................. 16
Section 2.04. Authority Relative to this Agreement, the Stockholders
Agreement and the DT Financing Agreements .................. 18
Section 2.05. No Conflict; Required Filings and Consents ................. 18
Section 2.06. SEC Filings; Financial Statements .......................... 19
Section 2.07. Absence of Certain Changes or Events ....................... 19
Section 2.08. Litigation ................................................. 20
Section 2.09. No Violation of Law; Permits ............................... 20
Section 2.10. Information Provided by Voicestream ........................ 20
Section 2.11. Employee Matters; ERISA .................................... 21
Section 2.12. Labor Matters .............................................. 23
i
TABLE OF CONTENTS
(CONTINUED)
PAGE
Section 2.13. Environmental Matters ...................................... 24
Section 2.14. Board Action; Vote Required; Applicability of Section 203 .. 24
Section 2.15. Opinion of Financial Advisor ............................... 25
Section 2.16. Brokers .................................................... 25
Section 2.17. Tax Matters ................................................ 25
Section 2.18. Intellectual Property ...................................... 26
Section 2.19. Ownership of Securities .................................... 26
Section 2.20. Certain Contracts .......................................... 26
Section 2.21. Licenses ................................................... 27
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF DT
Section 3.01. Organization and Qualification; Subsidiaries ............... 28
Section 3.02. Certificate of Incorporation and Bylaws .................... 28
Section 3.03. Capitalization ............................................. 28
Section 3.04. Authority Relative to this Agreement ....................... 29
Section 3.05. No Conflict; Required Filings and Consents ................. 29
Section 3.06. SEC Filings; Financial Statements .......................... 30
Section 3.07. Absence of Certain Changes or Events ....................... 31
Section 3.08. Litigation ................................................. 31
Section 3.09. No Violation of Law ........................................ 31
Section 3.10. Information Provided by DT ................................. 31
Section 3.11. Environmental Matters ...................................... 32
Section 3.12. Board Action; Vote Required ................................ 32
Section 3.13. Brokers .................................................... 33
Section 3.14. Tax Matters ................................................ 33
Section 3.15. Ownership of Securities .................................... 34
Section 3.16. Certain Contracts .......................................... 34
Section 3.17. Licenses ................................................... 34
ii
TABLE OF CONTENTS
(CONTINUED)
PAGE
ARTICLE 4
CONDUCT OF BUSINESS PENDING THE MERGER
Section 4.01. Conduct of Business in the Ordinary Course ................. 34
Section 4.02. Conduct of Business by DT .................................. 38
Section 4.03. No Solicitation ............................................ 39
Section 4.04. Subsequent Financial Statements ............................ 40
Section 4.05. Control of Operations ...................................... 40
ARTICLE 5
ADDITIONAL AGREEMENTS
Section 5.01. Voicestream Proxy Statement; the Registration Statement and
the German Listing Prospectus .............................. 40
Section 5.02. Voicestream Stockholders' Meeting and Consummation of the
Merger ..................................................... 41
Section 5.03. Xxxx Inlet ................................................. 42
Section 5.04. Notification of Certain Matters ............................ 42
Section 5.05. Access to Information ...................................... 43
Section 5.06. Public Announcements ....................................... 44
Section 5.07. Cooperation ................................................ 44
Section 5.08. Indemnification, Directors' and Officers' Insurance ........ 45
Section 5.09. Stock Exchange Listings/Establishment of DT Depositary
Shares ..................................................... 46
Section 5.10. No Shelf Registration ...................................... 46
Section 5.11. Affiliates ................................................. 46
Section 5.12. Blue Sky ................................................... 47
Section 5.13. Tax-Free Merger ............................................ 47
Section 5.14. Interim Dividend Policy .................................... 47
Section 5.15. Permitted Acquisitions ..................................... 47
Section 5.16. Reasonable Best Efforts .................................... 48
Section 5.17. Certain Matters ............................................ 48
Section 5.18. Takeover Laws .............................................. 48
iii
TABLE OF CONTENTS
(CONTINUED)
PAGE
Section 5.19. Employee Benefits .......................................... 49
Section 5.20. Certain Employment Matters ................................. 50
ARTICLE 6
CLOSING CONDITIONS
Section 6.01. Conditions to Each Party's Obligation to Effect the Merger . 50
Section 6.02. Conditions to the Obligations of Voicestream ............... 51
Section 6.03. Conditions to the Obligations of DT ........................ 52
ARTICLE 7
TERMINATION, AMENDMENT AND WAIVER
Section 7.01. Termination ................................................ 52
Section 7.02. Effect of Termination ...................................... 54
Section 7.03. Amendment .................................................. 54
Section 7.04. Waiver ..................................................... 55
ARTICLE 8
DEFINITIONS
Section 8.01. Certain Definitions ........................................ 55
ARTICLE 9
GENERAL PROVISIONS
Section 9.01. Non-Survival of Representations, Warranties and Agreements . 58
Section 9.02. Notices .................................................... 58
Section 9.03. Expenses ................................................... 59
Section 9.04. Headings ................................................... 60
Section 9.05. Severability ............................................... 60
Section 9.06. Entire Agreement; No Third-Party Beneficiaries ............. 60
Section 9.07. Assignment ................................................. 60
Section 9.08. Governing Law .............................................. 60
Section 9.09. Submission to Jurisdiction; Waivers ........................ 60
Section 9.10. Waiver of Immunity ......................................... 61
Section 9.11. Counterparts ............................................... 61
iv
Exhibit A Form of Affiliate Letter
Exhibit B [Reserved]
Exhibit C Form of DT Financing Agreements
Exhibit D Form of Voicestream Representation Letter
Exhibit E Form of DT Representation Letter
Exhibit F Form of Escrow Agency Agreement
Annex 1.05(n)(2) The 7% Convertible Preferred Shares Trust
Annex 1.05(o) The Warrants Trust
Annex 1.05(p) The Xxxx Inlet Partners Trust
Annex 1.08(a) The Options Trust
Annex 1.08(b) The Restricted Shares Trust
Annex 1.12 The Dissenting Stockholders Trust
v
INDEX OF DEFINED TERMS
2
2 1/2% Convertible Preferred Shares ................................... 9
7
7% Convertible Preferred Shares ....................................... 9
7% Convertible Preferred Shares Trust ................................. 9
A
Acquisitions .......................................................... 48
Adjusted Aggregate Cash Amount ........................................ 5
Adjustment Factor ..................................................... 6
Affiliate ............................................................. 56
Aggregate Cash Amount ................................................. 4
Agreement ............................................................. 56
Alternative Transaction ............................................... 40
Auction ............................................................... 49
Available Cash Amount ................................................. 5
B
Base Amount ........................................................... 6
Bid Schedule .......................................................... 49
Burdensome Conditions ................................................. 51
Business Day .......................................................... 56
C
Cash Adjustment ....................................................... 5
Cash Consideration .................................................... 4
Cash Election ......................................................... 4
Cash Election Amount .................................................. 5
Cash Election Base Amount ............................................. 6
Cash Election Difference .............................................. 6
Cash Fraction ......................................................... 5
Certificate ........................................................... 3
Certificate of Merger ................................................. 2
Closing ............................................................... 2
Closing Date .......................................................... 2
Code .................................................................. 56
Commercial Register ................................................... 3
Common Shares Trust ................................................... 14
Confidentiality Agreement ............................................. 40
Control ............................................................... 56
controlled by ......................................................... 56
Xxxx Inlet Exchange Rights ............................................ 10
Xxxx Inlet Joint Ventures ............................................. 56
Xxxx Inlet Partners ................................................... 57
D
D&O Insurance ......................................................... 46
Delaware Law .......................................................... 57
Deposit Agreement ..................................................... 8
Depositary ............................................................ 8
Determination Date .................................................... 6
Dissenting Shares ..................................................... 15
Dissenting Stockholders Trust ......................................... 15
DT .................................................................... 1
DT ADRs ............................................................... 8
DT Daily Price ........................................................ 7
DT Depositary Shares .................................................. 8
DT Equity Rights ...................................................... 29
DT Financial Statements ............................................... 31
DT Financing Agreements ............................................... 56
DT Licenses ........................................................... 35
DT Ordinary Shares .................................................... 4
DT Preferred Shares ................................................... 9
DT Required Approvals ................................................. 30
DT SEC Reports ........................................................ 31
DT Share Price ........................................................ 6
DT Subsidiary ......................................................... 58
DT Termination Date ................................................... 53
E
Effective Time ........................................................ 2
Election .............................................................. 7
Election Deadline ..................................................... 7
Election Difference ................................................... 6
Environmental Law ..................................................... 25
ERISA ................................................................. 21
Escrow Agency Agreement ............................................... 2
Escrow Agent .......................................................... 2
Excess ADSs ........................................................... 13
Excess Shares ......................................................... 13
Exchange Act .......................................................... 57
Excluded Voicestream Share ............................................ 4
Exon-Xxxxxx ........................................................... 57
Index 1
1
F
FCC ................................................................... 19
Form Election ......................................................... 4
Form F-4 .............................................................. 41
Fractional Interest ................................................... 13
FSE ................................................................... 6
G
GAAP .................................................................. 57
German Act ............................................................ 3
German Listing Prospectus ............................................. 57
Governmental or Regulatory Authority .................................. 57
H
Hazardous Substances .................................................. 25
HSR Act ............................................................... 57
I
Intellectual Property ................................................. 27
Investment Interest ................................................... 57
IRS ................................................................... 22
J
Xxxxx Day ............................................................. 52
K
Knowledge ............................................................. 57
L
Legal Requirements .................................................... 20
Letter of Transmittal ................................................. 10
M
Material Adverse Effect ............................................... 57
Merger ................................................................ 2
Merger Consideration .................................................. 4
Merger Consideration Recipients ....................................... 3
Merger Sub Common Stock ............................................... 2
Mixed Consideration ................................................... 4
Mixed Election ........................................................ 4
Mixed Election Base Amount ............................................ 6
Mixed Election Difference ............................................. 6
N
New Plans ............................................................. 50
No Election Shares .................................................... 7
NYSE .................................................................. 14
O
Old Plans ............................................................. 50
Ordinary Share Election ............................................... 8
Other Joint Ventures .................................................. 58
P
Parties ............................................................... 1
Party ................................................................. 1
Party Representatives ................................................. 44
Per Share Cash Amount ................................................. 4
Permits ............................................................... 20
Permitted Swaps ....................................................... 58
Person ................................................................ 58
Proposed Acquisition .................................................. 48
Proposed Acquisition Notice ........................................... 48
Proposed Bid Increase ................................................. 49
R
Record Date ........................................................... 18
Redemption ............................................................ 9
Registration Statement ................................................ 58
Required Regulatory Approvals ......................................... 30
Restricted Share Amount ............................................... 13
S
Section 2.21 Licenses ................................................. 28
Securities Act ........................................................ 58
significant subsidiary ................................................ 58
Significant Subsidiary ................................................ 58
Stock Consideration ................................................... 4
Stock Election Base Amount ............................................ 6
Stock Election Difference ............................................. 6
Stock Election Exchange Ratio ......................................... 4
Stockholders Agreements ............................................... 1
Subsequent Determination .............................................. 43
Subsidiary ............................................................ 58
Superior Proposal ..................................................... 43
Surviving Corporation ................................................. 2
Surviving Corporation Common Stock .................................... 8
T
Takeover Laws ......................................................... 25
Tax ................................................................... 58
Tax Returns ........................................................... 58
2
Tax Sharing Agreement ................................................. 59
Taxes ................................................................. 58
Telecom Act ........................................................... 59
Termination Fee ....................................................... 55
Third Party ........................................................... 40
T-Mobile .............................................................. 59
U
under common control with ............................................. 56
V
Voicestream ........................................................... 1
Voicestream Acquisition Agreement ..................................... 42
Voicestream Benefit Plans ............................................. 00
Xxxxxxxxxxx Xxxxxx Shares ............................................. 4
Voicestream Contracts ................................................. 27
Voicestream Employees ................................................. 50
Voicestream Equity Rights ............................................. 16
Voicestream Financial Statements ...................................... 19
Voicestream Intellectual Property ..................................... 26
Voicestream Option .................................................... 12
Voicestream Option Amount ............................................. 12
Voicestream Option Plans .............................................. 12
Voicestream Plans ..................................................... 16
Voicestream Proxy Statement ........................................... 41
Voicestream Required Approvals ........................................ 19
Voicestream Restricted Shares ......................................... 13
Voicestream Rollover Option ........................................... 12
Voicestream Rollover Restricted Share ................................. 13
Voicestream SEC Reports ............................................... 19
Voicestream Stockholder Approval ...................................... 18
Voicestream Stockholders' Meeting ..................................... 42
Voicestream Subsidiary ................................................ 58
Voicestream Termination Date .......................................... 53
W
Wachtell Lipton ....................................................... 52
Warrants .............................................................. 9
Warrants Trust ........................................................ 10
3
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER, dated as of July 23, 2000,
between Deutsche Telekom AG, an AKTIENGESELLSCHAFT organized and existing under
the laws of the Federal Republic of Germany ("DT"), and Voicestream Wireless
Corporation, a Delaware corporation ("VOICESTREAM") (each a "PARTY" and,
together, the "PARTIES").
WITNESSETH:
WHEREAS, the Management Board (VORSTAND) and the Supervisory
Board (AUFSICHTSRAT) of DT and the Board of Directors of Voicestream have
determined that it is advisable and in the best interests of their respective
companies and stockholders to consummate the strategic combination transaction
provided for in this Agreement, the stock subscription contemplated by the DT
Financing Agreements (as defined below) and the other transactions contemplated
hereby in accordance with the laws of their respective jurisdictions of
organization and have authorized the execution and delivery of this Agreement;
WHEREAS, simultaneously with the execution and delivery of
this Agreement, as part of a single overall transaction, and to induce DT to
enter into this Agreement, certain stockholders of Voicestream are each entering
into a Stockholders Agreement (collectively, the "STOCKHOLDERS AGREEMENTS") with
DT dated the date hereof with respect to this Agreement and the Merger (as
defined below);
WHEREAS, simultaneously with the execution and delivery of
this Agreement, as part of a single overall transaction, and to induce
Voicestream to enter into this Agreement, DT is entering into the DT Financing
Agreements as defined below with Voicestream in the form attached hereto as
Exhibit C;
WHEREAS, for United States federal income tax purposes the
parties intend that the Merger will qualify (i) as a reorganization within the
meaning of Section 368(a) of the Code (as defined below) and (ii) for an
exception to the general rule of Section 367(a)(1) of the Code; and
WHEREAS, DT and Voicestream desire to make certain
representations, warranties, covenants and agreements in connection with the
transactions contemplated by this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the
mutual representations, warranties, covenants and agreements herein contained,
and intending to be legally bound hereby, DT and Voicestream hereby agree as
follows:
ARTICLE 1
THE MERGER
Section 1.01. Appointment of Escrow Agent and Formation of
Merger Sub. (a) Within ten (10) Business Days following the execution of this
agreement, DT shall cause to
be incorporated pursuant to Delaware Law, a corporation which shall be a
constituent company in the Merger ("MERGER SUB"). DT shall own 100 percent of
the outstanding capital stock of Merger Sub.
(b) As promptly as possible following the date hereof, DT
shall appoint a United States bank or trust company or other independent
financial institution in the United States reasonably satisfactory to
Voicestream to act, inter alia, as escrow agent and exchange agent for the
Merger and the delivery of the Merger Consideration (as defined below) to former
stockholders of Voicestream and the other Merger Consideration Recipients (as
defined below) (the "ESCROW AGENT"). DT and Voicestream shall enter into an
Escrow Agency Agreement with the Escrow Agent based on the form attached hereto
as Exhibit F but with such changes as Voicestream and DT may agree (the "ESCROW
AGENCY AGREEMENT"), which agreement shall set forth the duties, responsibilities
and obligations of the Escrow Agent consistent with the terms of this Agreement.
Solely to accommodate the transactions described in this Article I and subject
to the terms and conditions of the Escrow Agency Agreement, one day prior to the
Effective Time DT shall cause the Escrow Agent to be registered, as DT's
fiduciary (for the period prior to the Effective Time) as the record holder of
all of the issued and outstanding shares of common stock, par value $.000001 per
share, of Merger Sub (the "MERGER SUB COMMON STOCK").
SECTION 1.02. The Merger. (a) Upon the terms and subject to
the conditions of this Agreement and in accordance with Delaware Law, on the
Closing Date (as defined below), Voicestream will cause a certificate of merger
(the "CERTIFICATE OF MERGER") to be executed and filed with the Secretary of
State of the State of Delaware and make all other filings or recordings required
by applicable law in connection with the Merger. The Merger shall become
effective at such time as the Certificate of Merger is duly filed with the
Secretary of State of the State of Delaware or at such later time as is
specified in the Certificate of Merger in accordance with Delaware Law (the
"EFFECTIVE TIME").
(b) Upon the terms and subject to the conditions set forth in
this Agreement, at the Effective Time, Merger Sub shall be merged with and into
Voicestream in accordance with Delaware Law (the "MERGER"), whereupon the
separate existence of Merger Sub shall cease, and Voicestream shall be the
surviving corporation in the Merger (the "SURVIVING CORPORATION") and shall
continue to be governed by the laws of the State of Delaware, and the separate
corporate existence of Voicestream, with all its rights, privileges, immunities,
powers and franchises, shall continue unaffected by the Merger except as set
forth in this Article I. The Merger shall have the effects specified in Delaware
Law.
SECTION 1.03. The Closing. On the fifth Business Day (or such
other date as Voicestream and DT may agree) after the last to be fulfilled or
waived of the conditions set forth in Article VI hereof (other than the
conditions contained in Sections 6.02(c), 6.02(d) and 6.03(c) so long as it is
reasonably apparent that such conditions and the condition contained in Section
6.01(b) will be able to be satisfied at the Closing) shall be fulfilled or
waived in accordance with this Agreement, the closing of the Merger (the
"CLOSING") shall be held (but only if all of the conditions set forth in Article
VI shall have been satisfied or waived prior to the Effective Time) at such time
as DT and Voicestream shall agree (the "CLOSING DATE") at the offices of Xxxxxx,
0
Xxxxxxxx, Xxxxx & Xxxxxxxx, Xxx Xxxx, Xxx Xxxx or at such other place or places
as DT and Voicestream may agree.
SECTION 1.04. The Merger Exchange.
(a) Upon the terms and subject to the conditions of this
Agreement and the Escrow Agency Agreement, as soon as possible after the
Effective Time, (x) on the Closing Date, the Escrow Agent shall contribute, for
the account of the former stockholders of Voicestream, all of the issued and
outstanding shares of the Surviving Corporation Common Stock (as defined below)
to DT as a transfer in kind, and (y) DT shall deliver the Merger Consideration
to the Escrow Agent for the account of (i) the former stockholders of
Voicestream, (ii) the Dissenting Stockholders Trustee (as defined in Annex
1.08(a) below), (iii) the Options Trustee (as defined in Annex 1.08(a) below),
(iv) the 7% Convertible Preferred Shares Trustee (as defined in Annex 1.05(n)(2)
below), (v) the Xxxx Inlet Partners Trustee (as defined in Annex 1.05(p) below),
(vi) the Restricted Shares Trustee (as defined in Annex 1.08(b) below) and (vii)
the Warrants Trustee (as defined in Annex 1.05(o)) (collectively, the "MERGER
CONSIDERATION RECIPIENTS"). DT and the Escrow Agent shall effect the foregoing
in accordance with Sections 183 et seq. and 203 et seq. of the German Stock
Corporation Act (AKTIENGESETZ) (the "GERMAN ACT") by registering the increase of
the DT stated share capital with the commercial register (HANDELSREGISTER) for
DT (the "COMMERCIAL REGISTER") as soon as possible after the Effective Time. In
the event that, in connection with the performance of DT's obligations in this
Section 1.04(a), on or prior to the Closing Date the Management Board of DT
passes a resolution to increase the issued capital of DT in accordance with
Article 5(2) of the Articles of Association of DT by such number of shares as is
equal to the number of shares to be delivered as part of the Merger
Consideration, and the Supervisory Board shall have consented thereto, then (i)
the Escrow Agent shall promptly subscribe for such new DT Ordinary Shares to be
issued as part of the Merger Consideration and shall promptly on the Closing
Date make the contribution to DT referred to in the first sentence of this
Section 1.04(a) and (ii) the Management Board and the chairman of the
Supervisory Board shall as soon as possible thereafter file the application for
registration of the implementation of the capital increase with the Commercial
Register, with the effect that on registration of the capital increase in the
Commercial Register, such new DT Ordinary Shares shall by operation of law be
held solely by the Escrow Agent, for delivery to and for the benefit of the
Merger Consideration Recipients. Prior to, and or immediately after or at the
Effective Time, DT shall deposit, or cause to be deposited, with the Escrow
Agent for the benefit of holders of Voicestream Common Shares in accordance with
this Article I, the Aggregate Cash Amount, or, if applicable, the Adjusted
Aggregate Cash Amount. At the Effective Time, the obligations of DT and the
Escrow Agent under this Section 1.04(a) shall be unconditional.
(b) Each share certificate (a "CERTIFICATE") formerly
representing any Voicestream Common Shares (other than Excluded Voicestream
Shares (as defined below) and Dissenting Shares (as defined below)) shall
thereafter represent only the right to receive the Merger Consideration and the
right, if any, to receive pursuant to Section 1.09 cash in lieu of fractional DT
Depositary Shares or fractional DT Ordinary Shares, as applicable, and any
dividend or distribution pursuant to Section 1.06(f), in each case, without
interest. The DT Ordinary Shares and the DT Depositary Shares issued as provided
in Section 1.05 shall be of the
3
same class and shall have the same rights as the currently outstanding DT
Ordinary Shares and the currently outstanding DT Depositary Shares,
respectively.
SECTION 1.05. Conversion and Exchange of Shares. At the
Effective Time:
(a) Each share of common stock, par value $0.001 per share, of
Voicestream ("VOICESTREAM COMMON SHARES") owned by DT or Voicestream immediately
prior to the Effective Time (each, an "EXCLUDED VOICESTREAM SHARE") shall, by
virtue of the Merger, and without any action on the part of the holder thereof,
no longer be outstanding, be canceled and retired without payment of any
consideration therefor and shall cease to exist.
(b) Subject to the further provisions of this Section 1.05,
each Voicestream Common Share, other than Excluded Voicestream Shares and
Dissenting Shares, issued and outstanding immediately prior to the Effective
Time shall by virtue of the Merger and without any action on the part of the
holder thereof, be converted into the right to receive: (i) for each Voicestream
Common Share in respect of which an effective Election shall have been made, one
of the following: (A) a combination of $30 in cash (the "PER SHARE CASH AMOUNT")
and 3.2 validly issued, fully paid and nonassessable ordinary shares of DT ("DT
ORDINARY SHARES"), subject to adjustment as provided in Section 1.05(g) (the
"MIXED CONSIDERATION"), (B) $200.00 in cash (the "CASH CONSIDERATION"), subject
to proration and/or adjustment as provided in Sections 1.05(e) and (g) or (C)
3.7647 DT Ordinary Shares (the "EXCHANGE RATIO"), subject to proration and/or
adjustment as provided in Sections 1.05(f) and (g) (the "STOCK CONSIDERATION")
and (ii) for each Voicestream Common Share in respect of which no effective
Election has been made for any reason, the Mixed Consideration. The
consideration payable pursuant to this paragraph (b) is referred to herein
collectively as the "MERGER CONSIDERATION".
(c) For purposes of this Section 1.05, "AGGREGATE CASH AMOUNT"
shall equal the product of (1) the Per Share Cash Amount and (2) the total
number of Voicestream Common Shares outstanding immediately prior to the
Effective Time.
(d) Mixed Election. Each record holder of Voicestream Common
Shares immediately prior to the Election Deadline who validly makes or is deemed
to have made below a mixed election (a "MIXED ELECTION") shall be entitled to
receive the Mixed Consideration for each of such holder's Voicestream Common
Shares as to which such Mixed Election is made. Mixed Elections shall be made on
a form, mutually acceptable to DT and Voicestream, designed for the purpose of
making Elections (a "FORM ELECTION") accompanied by Certificates for the
Voicestream Common Shares to which such Form of Election relates as provided in
Section 1.05(h) below.
(e) Cash Election. Each record holder of Voicestream Common
Shares immediately prior to the Election Deadline who validly makes a cash
election (a "CASH ELECTION") shall be entitled to receive cash or a combination
of cash and DT Ordinary Shares, solely as provided in clause (i) or (ii) below:
(i) If (A) the product of the number of Voicestream Common
Shares as to which a valid Cash Election is made and the Cash
Consideration (such product being the
4
"CASH ELECTION AMOUNT") exceeds (B) the Aggregate Cash Amount minus the
product of the Per Share Cash Amount and the number of Voicestream
Common Shares as to which a valid Mixed Election (including No Election
Shares) has been made (the amount determined pursuant to this clause
(B) being the "AVAILABLE CASH ELECTION AMOUNT"), then each Voicestream
Common Share as to which a valid Cash Election is made shall be
converted into the right to receive (x) an amount of cash (without
interest) equal to the Cash Consideration multiplied by a fraction, the
numerator of which shall be the Available Cash Election Amount and the
denominator of which shall be the Cash Election Amount (such fraction
being the "CASH FRACTION") and (y) a number of DT Ordinary Shares equal
to the product of (p) the Exchange Ratio and (q) a fraction equal to
one minus the Cash Fraction.
(ii) If the Available Cash Election Amount equals or exceeds
the Cash Election Amount, each Voicestream Common Share as to which a
valid Cash Election is made shall be converted into the right to
receive the Cash Consideration in cash (without interest).
Cash Elections shall be made on the Form of Election, accompanied by
Certificates for the Voicestream Common Shares to which such Form of Cash
Election relates as provided in Section 1.05(h) below.
(f) Stock Election. Each record holder of Voicestream Common
Shares immediately prior to the Election Deadline who validly makes a stock
election (a "STOCK ELECTION") shall be entitled to receive DT Ordinary Shares or
a combination of cash and DT Ordinary Shares, solely as provided in clause (i)
or (ii) below:
(i) If the Available Cash Election Amount exceeds the Cash
Election Amount, then each Voicestream Common Share as to which a valid
Stock Election is made shall be converted into the right to receive (A)
an amount of cash (without interest) equal to the amount of such excess
divided by the number of Voicestream Common Shares as to which a valid
Stock Election is made and (B) a number of DT Ordinary Shares equal to
the product of (x) the Exchange Ratio and (y) a fraction, the numerator
of which shall be $200 minus the amount calculated in clause (A) of
this paragraph and the denominator of which shall be $200.
(ii) If the Cash Election Amount equals or exceeds the
Available Cash Election Amount, each Voicestream Common Share as to
which a valid Stock Election is made shall be converted into the right
to receive the number of DT Ordinary Shares equal to the Exchange
Ratio.
(g) Further Adjustments. (i) If necessary to permit the
delivery of the tax opinion referred to in Section 6.02(d), in addition to the
adjustments set forth above, Voicestream shall, after consultation with DT,
prior to the delivery of the tax opinion referred to in Section 6.02(d), reduce
(a "CASH ADJUSTMENT") the Aggregate Cash Amount to such amount (the "ADJUSTED
AGGREGATE CASH AMOUNT") as Voicestream reasonably determines is necessary to
permit the delivery of the tax opinion referred to in Section 6.02(d) and, if
Voicestream makes a Cash
5
Adjustment, DT shall substitute in lieu of such cash DT Common Shares as set
forth in this Section 1.05(g). On the date that is the fifth Business Day (the
"DETERMINATION DATE") prior to the expected Closing Date first scheduled in
accordance with Section 1.03, Voicestream shall reasonably determine, in
consultation with DT, based on information available as of such date, whether a
Cash Adjustment should be made, and if so, shall estimate the Adjusted Aggregate
Cash Amount. Such estimated Adjusted Aggregate Cash Amount may, in Voicestream's
reasonable discretion, after consultation with DT, be conservatively estimated
so as to facilitate the delivery of the tax opinion referred to in Section
6.02(d) on the previously scheduled Closing Date based on such estimated
Adjusted Aggregate Cash Amount.
If a Cash Adjustment is made after the Determination Date, the
Effective Time and the Closing Date shall be postponed by the minimum number of
days, if any (but not to exceed five (5) Business Days with respect to any
single postponement), that Voicestream reasonably determines, in consultation
with DT, is necessary for such adjustments to be properly made, and the Adjusted
Aggregate Cash Amount may, in Voicestream's reasonable discretion, after
consultation with DT, be conservatively estimated so as to facilitate the
delivery of the tax opinion referred to in Section 6.02(d) on the postponed
Closing Date based on such Adjusted Aggregate Cash Amount. The Adjusted
Aggregate Cash Amount divided by the Aggregate Cash Amount shall be referred to
herein as the "ADJUSTMENT FACTOR".
(ii) In the event the Aggregate Cash Amount is
adjusted pursuant to the first sentence of Section 1.05(g)(i), then the amount
of cash that would otherwise be payable in respect of a Voicestream Common Share
subject to a Cash Election, a Stock Election or a Mixed Election (respectively,
a "CASH ELECTION BASE AMOUNT", "STOCK ELECTION BASE AMOUNT" or "MIXED ELECTION
BASE AMOUNT", and each, a "BASE AMOUNT"), shall be reduced by the difference
(respectively, the "CASH ELECTION DIFFERENCE", the "STOCK ELECTION DIFFERENCE"
and the "MIXED ELECTION DIFFERENCE", and each, an "ELECTION DIFFERENCE") between
such Base Amount and the product of such Base Amount and the Adjustment Factor.
In substitution for the reduction of the cash portion of the Merger
Consideration resulting from the Election Difference,
1) each share with respect to which a Cash Election shall have
been made shall also receive a number of DT Ordinary Shares equal to
the Cash Election Difference dividend by the DT Share Price;
2) each share with respect to which a Stock Election shall
have been made shall also receive a number of DT Ordinary Shares equal
to the Stock Election Difference divided by the DT Share Price;
3) each share with respect to which a Mixed Election shall
have been made shall also receive a number of DT Ordinary Shares equal
to the Mixed Election Difference divided by the DT Share Price.
(iii) The term "DT SHARE PRICE" means the average
(rounded to the nearest 1/10,000) of the DT Daily Prices for the seven (7)
Frankfurt Stock Exchange ("FSE") trading days randomly selected by lot by DT and
Voicestream together from the fifteen consecutive FSE trading days ending on the
day prior to the day on which the relevant Cash
6
Adjustment is made, and the term "DT DAILY PRICE" for any trading day means the
volume weighted average (rounded to the nearest 1/10,000) of the per share
trading prices of DT Ordinary Shares on the FSE (in Euros, as reported by the
Frankfurt Stock Exchange Xetra trading system (or such other source as
Voicestream and DT shall agree in writing) on such FSE trading day, converted
into U.S. Dollars at a fixed exchange rate of 0.9216 Euros to a U.S. Dollar;
provided, that if, prior to such conversion the DT Share Price would be less
than 33 Euros, then the DT Share Price shall be deemed to be 33 Euros.
(h) Form of Election. To be effective, an Election Form must
be properly completed and signed, and must be received by the Escrow Agent,
accompanied by the Certificates as to which the election is being made in
compliance with the requirements for surrender of Voicestream Common Shares
contained in Section 1.06(a) below by the Election Deadline. DT shall have the
discretion, which it may delegate in whole or in part to the Escrow Agent, to
determine whether Election Forms have been properly completed, signed, submitted
and revoked and to disregard immaterial defects in Election Forms. The decision
of DT (or the Escrow Agent) in such matters shall be conclusive and binding. DT
and the Escrow Agent shall make reasonable efforts to notify any Person of any
defect in an Election Form submitted to the Escrow Agent. The Escrow Agent shall
also make all computations contemplated by this Section 1.05(h), and, absent
manifest error, all such computations shall be conclusive and binding on the
holders of Voicestream Common Shares. If DT or the Escrow Agent shall determine
that any purported Cash Election, Stock Election or Mixed Election (any of such
elections, an "ELECTION") was not properly made, the Voicestream Common Shares
subject to such improperly made Election shall be treated as No Election Shares.
Each Voicestream Common Share as to which neither a valid Mixed Election, a
valid Cash Election nor a valid Stock Election is made, including, without
limitation, Voicestream Common Shares issued on exercise, conversion or exchange
of outstanding options, warrants, rights or convertible or exchangeable
securities after the Election Deadline (as defined below) ("NO ELECTION
SHARES"), shall be deemed to have made a valid Mixed Election. A record holder
need not make the same election with respect to all of the Voicestream Common
Shares held of record by such holder or represented by a single Certificate.
(i) Election Deadline. DT and Voicestream shall each use its
reasonable best efforts to cause copies of the Election Forms and the Letter of
Transmittal to be mailed to the record holders of Voicestream Common Shares not
less than forty five (45) days prior to the anticipated Effective Time and to
make the Election Forms available promptly to all Persons who become record
holders of Voicestream Common Shares subsequent to the date of such mailing and
no later than the close of business on the second Business Day prior to the
Election Deadline. An Election Form must be received by the Escrow Agent by 5:00
p.m., New York City time, on the date (the "ELECTION DEADLINE") that is the
fifth Business Day prior to the first Closing Date scheduled by the parties in
accordance with Section 1.03. All elections may be revoked until the Election
Deadline in writing by the record holders submitting the Election Forms. DT and
Voicestream shall use reasonable efforts to cause a public announcement of the
actual Election Deadline not fewer than five Business Days prior to the Election
Deadline.
(j) Form of Stock Consideration. Any DT Ordinary Shares
constituting a portion of the Merger Consideration shall be delivered to the
holders of Voicestream Common Shares in
7
the form of American depositary shares, each representing the right to receive
one DT Ordinary Share (the "DT DEPOSITARY SHARES"). The DT Depositary Shares may
be evidenced by one or more receipts ("DT ADRS") issued in accordance with the
Deposit Agreement, dated as of November 18, 1996, as amended, among DT, Citibank
N.A., as Depositary (the "DEPOSITARY"), and the holders and beneficial owners
from time to time of DT ADRs, as it may be further amended from time to time
(the "DEPOSIT AGREEMENT"). Notwithstanding the foregoing, each Person who is
entitled to receive DT Ordinary Shares as Merger Consideration shall be
entitled, with respect to all or any portion of his Voicestream Common Shares,
to make an unconditional and irrevocable election (the "ORDINARY SHARE
ELECTION") to receive DT Ordinary Shares in lieu of DT Depositary Shares. The
Election Forms and the Letter of Transmittal shall contain a form of Ordinary
Share Election and shall be used by each holder of Voicestream Common Shares who
wishes to make an Ordinary Share Election.
(k) Each share of Merger Sub Common Stock, issued and
outstanding immediately prior to the Effective Time shall, by virtue of the
Merger, and without any action on the part of the holder thereof, no longer be
outstanding, be cancelled and retired. Immediately following the Effective Time,
the Surviving Corporation shall issue to the Escrow Agent a number of shares of
Common Stock par value $0.000001 per share, of the Surviving Corporation
("SURVIVING CORPORATION COMMON STOCK") equal to the total number of Voicestream
Common Shares outstanding immediately prior to the Merger in consideration of
the payment by the Escrow Agent to the Surviving Corporation of an amount equal
to the product of the number of Surviving Corporation Common Shares and the par
value of such shares.
(l) In consideration of the contribution to DT by the Escrow
Agent of Surviving Corporation Common Stock pursuant to Section 1.04(a) hereof,
DT shall issue, in accordance with Section 1.04(a), and deliver to the Escrow
Agent, the maximum number of DT Ordinary Shares (including DT Ordinary Shares
underlying DT Depositary Shares that are to be delivered as part of the Merger
Consideration) that has become payable pursuant to Section 1.05 for delivery to
the Merger Consideration Recipients entitled thereto and shall pay to the Escrow
Agent the Aggregate Cash Amount (or, if applicable, the Adjusted Aggregate Cash
Amount) that has become payable to the Merger Consideration Recipients pursuant
to Section 1.05.
(m) If, between the date of this Agreement and the Effective
Time, all of the outstanding DT Ordinary Shares, or more than 80% of the
outstanding DT Ordinary Shares pursuant to an exchange offer for all outstanding
shares, shall have been changed into or exchanged for a different number of
shares or kind of shares of DT or another corporation or entity owning more than
80% of the DT Ordinary Shares, or the DT Ordinary Shares outstanding shall have
changed, by reason of any reclassification, split-up, stock-split, reverse
stock-split, stock dividend, stock combination, recapitalization or
redenomination of share capital, merger or similar statutory procedure or
pursuant to an exchange offer, or DT changes the number of DT Ordinary Shares
represented by a DT Depositary Share, then the Exchange Ratio and/or the amount
or form of any portion of the Merger Consideration that would otherwise be
payable in DT Common Shares and the issuer thereof and other definitions and
provisions of this Agreement dependent thereon or on the market price therefor,
shall be appropriately adjusted.
8
(n) Preferred Stock. (1) Not later than the third Business Day
preceding the record date for the Voicestream Stockholders' Meeting, each share
of 2 1/2% Convertible Junior Preferred Stock, par value $0.001 per share, of
Voicestream (the "2 1/2% CONVERTIBLE PREFERRED SHARES") shall be converted, in
accordance with paragraphs (i)(i) and (i)(vii) of Section 1 of the Certificate
of Designation of the 2 1/2% Convertible Preferred Shares and the provisions of
the relevant Stockholders Agreement, into Voicestream Common Shares at the
Conversion Rate (as such term is defined in the 2 1/2% Convertible Preferred
Shares Certificate of Designation) in effect on the Conversion Date (as such
term is defined in the 2 1/2% Convertible Preferred Shares Certificate of
Designation).
(2) (A) If the Effective Time does not occur
prior to May 1, 2001, at any time on or after May 1, 2001 until the Effective
Time, DT may, in its sole discretion by giving ten (10) Business Days prior
written notice to Voicestream, but only if permissible at such time under the
terms of any indebtedness of Voicestream or any of its Significant Subsidiaries
existing on the date hereof (including its credit agreement), require
Voicestream to (or to cause Omnipoint Corporation to) issue a notice of
redemption (the "REDEMPTION") with respect to all shares of Omnipoint
Corporation 7% Cumulative Convertible Preferred Stock, par value $0.001 per
share (the "7% CONVERTIBLE PREFERRED SHARES"), in accordance with Sections
5.1(b) and 5.3 of the Certificate of Designation of the 7% Convertible Preferred
Shares, at the Redemption Price (as such term is defined in the 7% Convertible
Preferred Shares Certificate of Designation) in effect on the Redemption Date
(as such term is defined in the 7% Convertible Preferred Shares Certificate of
Designation), which Redemption Price shall be equal to the appropriate
Redemption Price per share set forth in Section 5.1(b) of the Certificate of
Designation of the 7% Convertible Preferred Shares, plus in each case all
accrued and unpaid dividends on such 7% Convertible Preferred Shares (other than
previously declared dividends payable to the holder of record on a prior date)
through and including the Redemption Date, whether or not declared, which shall
be due and payable only in cash out of funds of Voicestream or Omnipoint
Corporation legally available for the payment of dividends, as more fully
provided in the 7% Convertible Preferred Shares Certificate of Designation.
(B) If all the 7% Convertible Preferred Shares
have not been redeemed pursuant to paragraph (A) of this Section 1.05(n)(2)
prior to the Effective Time and upon conversion of any outstanding shares of 7%
Convertible Preferred Shares after the Effective Time, the holders thereof
become entitled to DT Ordinary Shares, such DT Ordinary Shares to which such
holder of 7% Convertible Preferred Shares is entitled will be issued from the 7%
Convertible Preferred Shares Trust described in Annex 1.05(m)(2) (the "7%
CONVERTIBLE PREFERRED SHARES TRUST"), and to the extent holders of 7%
Convertible Preferred Shares become entitled to cash payment after the Effective
Time, such cash payment to which such holder of 7% Convertible Preferred Shares
is entitled will be paid by DT.
(3) Any shares of Convertible Voting Preferred Stock
held by DT ("DT PREFERRED SHARES") and any Voicestream 7% Convertible Preferred
Stock outstanding at the Effective Time shall remain outstanding and shall be
unaffected by the Merger.
(o) Warrants. If all the warrants granted pursuant to the
Omnipoint Corporation Remainder Warrant Certificate dated May 6, 1997 (the
"WARRANTS") shall not have been
9
exercised prior to the Effective Time and any holder of such Warrants becomes
entitled to DT Ordinary Shares after the Effective Time, such DT Ordinary Shares
to which such holder of Warrants is entitled will be issued from the Warrants
Trust described in Annex 1.05(o) (the "WARRANTS TRUST"), and to the extent any
holder of Warrants become entitled to cash payment after the Effective Time,
such cash payment to which such holder of Warrants is entitled will be paid by
DT.
(p) Xxxx Inlet and Xxxx Inlet Joint Venture Partners.
(i) To the extent that prior to the Effective Time any of the
Xxxx Inlet Partners receives Voicestream Common Shares in respect of
its rights to exchange its interest in any of the Xxxx Inlet Joint
Ventures or Affiliates of such joint ventures (the "XXXX INLET EXCHANGE
RIGHTS"), such Xxxx Inlet Partner shall have all the rights with
respect to such Voicestream Common Shares which a Voicestream
stockholder has.
(ii) To the extent that any of the Xxxx Inlet Partners does
not receive Voicestream Common Shares prior to the Effective Time in
respect of its Xxxx Inlet Exchange Rights, each Xxxx Inlet Partner
shall be entitled to receive the consideration that such Xxxx Inlet
Partner is entitled to receive pursuant to the Xxxx Inlet Exchange
Rights. To the extent that, on or after the Effective Time, a Xxxx
Inlet Partner is entitled to DT Ordinary Shares, such shares will be
delivered from the Xxxx Inlet Partners Trust described in Annex
1.05(p), which shall be in form and substance reasonably satisfactory
to DT and Voicestream and to the extent that such Xxxx Inlet Partner is
entitled to cash, such cash shall be paid by DT. The consideration
payable to a Xxxx Inlet Partner pursuant to this clause (ii) shall not
constitute Merger Consideration for the purpose of this Agreement.
(iii) After the date hereof, Voicestream shall use reasonable
efforts to obtain the agreement of SSPCS Corporation to enter into an
agreement relating to its Xxxx Inlet Exchange Rights in a form
substantially similar to the agreement relating to such matters entered
into by Xxxx Inlet on the date hereof.
SECTION 1.06. Surrender and Payment. (a) Promptly after the
Effective Time, the Surviving Corporation will send, or will cause the Escrow
Agent to send, to each holder of record as of the Effective Time of Voicestream
Common Shares (other than holders of Excluded Voicestream Shares and Dissenting
Shares and holders of Voicestream Common Shares who made a valid Election with
respect to all their shares), a letter of transmittal which shall specify that
the delivery of Certificates shall be effected, and risk of loss and title shall
pass, only upon proper delivery of a Certificate to the Escrow Agent, and
instructions for use in effecting the surrender to the Escrow Agent of
Certificates in exchange for the Merger Consideration (the "LETTER OF
TRANSMITTAL"). The Letter of Transmittal shall contain such other terms and
conditions as DT and Voicestream may reasonably specify.
(b) Each record holder of any Voicestream Common Shares that
have been converted into a right to receive the consideration set forth in
Section 1.05(b) shall, upon surrender to the Escrow Agent of a Certificate or
Certificates, together with a properly completed
10
Letter of Transmittal covering the Voicestream Common Shares represented by such
Certificate or Certificates, without further action, be entitled to receive, and
the Escrow Agent shall deliver (and DT shall cause the Escrow Agent to deliver)
to each such holder, subject to Section 1.06(e) below, (i) the number of whole
DT Depositary Shares or DT Ordinary Shares included in the Merger Consideration
in respect of such Voicestream Common Shares, subject to the provisions of
Section 1.05, and (ii) a check in the amount (after giving effect to any
required tax withholdings) of (A) the cash consideration that such holder has
the right to receive pursuant to Section 1.05, plus (B) any cash in lieu of
Fractional Interests to be paid pursuant to Section 1.09, plus (C) any cash
dividends or other distributions that such holder has the right to receive
pursuant to Section 1.06(f). Until so surrendered, each such Certificate shall,
after the Effective Time, represent for all purposes only the right to receive
the number of whole DT Depositary Shares or DT Ordinary Shares, as applicable,
to which it is entitled pursuant to Section 1.05 and the applicable amounts of
cash provided in the foregoing clause (ii) of the preceding sentence.
(c) If any DT Depositary Shares or DT Ordinary Shares are to
be delivered to a Person (as defined below) other than the registered holder of
the Voicestream Common Shares represented by a Certificate or Certificates
surrendered with respect thereto, it shall be a condition to such issuance that
the Certificate or Certificates so surrendered shall be properly endorsed or
otherwise be in proper form for transfer and that the Person requesting such
delivery shall pay to the Escrow Agent any transfer or other taxes required as a
result of such delivery to a Person other than the registered holder of such
Voicestream Common Shares or establish to the satisfaction of the Escrow Agent
that such tax has been paid or is not payable.
(d) The stock transfer books of Voicestream shall be closed
after the close of trading on the NASDAQ on the Trading Day immediately prior to
the Effective Time, and thereafter there shall be no further registration of
transfers of Voicestream Common Shares that were outstanding prior to the
Effective Time. After the Effective Time, Certificates presented to the
Surviving Corporation for transfer shall be canceled and exchanged for the
consideration provided for, and in accordance with the procedures set forth, in
this Article I.
(e) Any DT Ordinary Shares issued and delivered in respect of
Voicestream Common Shares pursuant to this Article I, any cash entitled to be
received therefor pursuant to Section 1.05, and any cash in lieu of Fractional
Interests to be paid pursuant to Section 1.09, plus any cash dividend or other
distribution that such holder has the right to receive pursuant to Section
1.06(f) that remains unclaimed by any holder of Voicestream Common Shares six
months after the Effective Time, shall be held by the Escrow Agent (or a
successor agent appointed by DT) or shall be delivered to the Depositary upon
the instruction of DT and held by the Depositary, in either case subject to the
instruction of DT, in an account or accounts designated for such purpose. DT
shall not be liable to any holder of Voicestream Common Shares for any
securities delivered or any amount paid by the Depositary, the Escrow Agent or
its nominee, as the case may be, to a public official which it is so required to
pay under applicable abandoned property laws. Any cash remaining unclaimed by
holders of Voicestream Common Shares five years after the Effective Time (or
such earlier date immediately prior to such time as such cash would otherwise
escheat to or become property of any governmental entity or as is otherwise
provided by applicable Legal Requirements (as defined below)) shall, to
11
the extent permitted by applicable Legal Requirements, become the property of
the Surviving Corporation or DT, as DT may determine.
(f) No dividends or other distributions nor any voting rights
with respect to securities of DT issuable to the Escrow Agent with respect to
Voicestream Common Shares shall be paid to or exercised by the holder of any
unsurrendered Certificates until such Certificates are surrendered as provided
in this Section. Subject to the effect of applicable Legal Requirements, upon
such surrender, there shall be issued and/or paid to the holder of DT Depositary
Shares or DT Ordinary Shares issued in exchange therefor, without interest and
after giving effect to any required tax withholding, (A) at the time of such
surrender, the dividends or other distributions payable with respect to such DT
Depositary Shares or DT Ordinary Shares with a record date after the Effective
Time and a payment date on or prior to the date of such surrender and not
previously paid and (B) at the appropriate payment date, the dividends or other
distributions payable with respect to such DT Depositary Shares or DT Ordinary
Shares with a record date after the Effective Time but with a payment date
subsequent to such surrender. For purposes of dividends or other distributions
in respect of DT Depositary Shares or DT Ordinary Shares, all DT Depositary
Shares and DT Ordinary Shares to be issued pursuant to the Merger shall be
deemed issued and outstanding as of the Effective Time. Notwithstanding the
foregoing, no dividends or other distributions nor any voting rights with
respect to securities of DT issuable to the Escrow Agent for the account of the
Dissenting Stockholders Trustee, the Optionholders Trustee, the 7% Convertible
Preferred Shares Trustee, the Restricted Shares Trustee and the Xxxx Inlet
Trustee (all as defined below) shall be paid to or exercised by any such
trustees.
SECTION 1.07. [Reserved]
SECTION 1.08. Treatment of Voicestream Stock Plans. (a)
Subject to the consummation of the Merger, immediately prior to the Effective
Time, each outstanding option to purchase Voicestream Common Shares (each, a
"VOICESTREAM OPTION") will be converted (and such Voicestream Option will be
extinguished) into a right to acquire (each, a "VOICESTREAM ROLLOVER OPTION")
from the Options Trust described in Annex 1.08(a) (which shall be in form and
substance reasonably satisfactory to DT and Voicestream) on the same terms and
conditions as were applicable under the Voicestream Option (but taking into
account any changes thereto, including any acceleration thereof, provided for in
the option award or in the Voicestream option plans listed on Schedule 1.08(ii)
(the "VOICESTREAM OPTION PLANS") and applicable to such Voicestream Options by
reason of this Agreement or the transactions contemplated hereby) that number of
DT Ordinary Shares (the "VOICESTREAM OPTION AMOUNT") determined by multiplying
the maximum number of Voicestream Common Shares subject to such Voicestream
Option by the Exchange Ratio, rounded if necessary to the nearest whole DT
Ordinary Share at an exercise price per DT Ordinary Share equal to the exercise
price per Voicestream Common Share in effect with respect to such Voicestream
Option immediately prior to the Effective Time divided by the Exchange Ratio. In
order to implement the conversion of the Voicestream Options described above,
the arrangements set forth in Annex 1.08(a) will be effected at the Effective
Time. In the case of a Voicestream Option which is intended to be an incentive
stock option under Section 422 of the Code, the adjustment in this Section 1.08
shall be modified if necessary to permit such Voicestream Option to continue to
comply with Section 422 of the Code. Prior to the Effective Time, Voicestream
and DT shall mutually agree to either
12
terminate Voicestream's Employee Stock Purchase Plan or to convert the options
under such plan to Voicestream Rollover Options under this Section 1.08(a).
(b) Subject to the consummation of the Merger, immediately
prior to the Effective Time, each outstanding award of Voicestream restricted
shares that remains subject to restrictions at the Effective Time (the
"VOICESTREAM RESTRICTED SHARES") will be converted (and such Voicestream
Restricted Shares will be extinguished) into a right to receive (each, a
"VOICESTREAM ROLLOVER RESTRICTED SHARE") from the Restricted Shares Trust
described in Annex 1.08(b), on the same terms and conditions and subject to the
same vesting provisions as were applicable to such award under the Voicestream
Plans listed on Schedule 1.08(ii) (but taking into account any changes thereto
provided for in the Voicestream Plans listed on Schedule 1.08(ii)) that number
of DT Ordinary Shares (the "RESTRICTED SHARE AMOUNT") determined by multiplying
the number of shares of Voicestream Common Stock subject to the award by the
Exchange Ratio, rounded if necessary, to the nearest whole DT Ordinary Share. In
order to implement the conversion of the Voicestream Restricted Shares described
above, the arrangements set forth in Annex 1.08(b) will be effected at the
Effective Time.
(c) To the extent that any Person would otherwise be entitled
to receive a fraction of a DT Ordinary Share pursuant to this Section 1.08, such
fraction shall be treated in accordance with Section 1.09.
(d) As soon as practicable after the Effective Time, DT shall
cause to be delivered to the holders of Voicestream Options and Voicestream
Restricted Shares appropriate notices setting forth such holders' rights
pursuant to the respective Voicestream Plans and agreements evidencing the
grants of such Voicestream Options and Voicestream Restricted Shares (including
that, in connection with the Merger and to the extent provided by the terms of
the Voicestream Plans and award agreements thereunder, the Voicestream Options
subject to change of control vesting have become fully vested).
(e) No later than the Effective Time, DT shall file or cause
to be filed with the SEC a registration statement on an appropriate form or a
post-effective amendment to a previously filed registration statement under the
Securities Act with respect to the DT Ordinary Shares and DT Depositary Shares
which are subject to the Voicestream Rollover Options as provided in Section
1.08(a), and shall use reasonable best efforts to maintain the current status of
the prospectus associated therewith, as well as to comply with any applicable
state securities or "blue sky" laws for so long as such options remain
outstanding.
SECTION 1.09. Fractional DT Depositary Shares and Fractional
DT Ordinary Shares. No fraction of a DT Depositary Share or a DT Ordinary Share
will be issued, but each holder of Voicestream Common Shares otherwise entitled
to receive a fraction of a DT Depositary Share or DT Ordinary Share will be
entitled to receive in accordance with the provisions of this Section 1.09 from
the Escrow Agent a cash payment in lieu of such fraction of a DT Depositary
Share or DT Ordinary Share, as applicable, (each a "FRACTIONAL INTEREST")
representing such holder's proportionate interest in the net proceeds from the
sale by the Escrow Agent on behalf of all such holders of the aggregate of the
fractions of DT Depositary Shares and DT Ordinary Shares which would otherwise
be issued ("EXCESS ADSS" and "EXCESS SHARES",
13
respectively). The sale of the Excess ADSs and the Excess Shares by the Escrow
Agent shall be executed on the New York Stock Exchange, Inc. (the "NYSE") and
the FSE, respectively, through one or more member firms of the NYSE or the FSE,
as the case may be, and shall be executed in round lots to the extent
practicable. Until the net proceeds of such sale or sales have been distributed
to the holders of Voicestream Common Shares otherwise entitled to receive
Fractional Interests, the Escrow Agent will hold such proceeds in trust for such
holders of Voicestream Common Shares (the "COMMON SHARES TRUST"). DT shall pay
all commissions, transfer taxes and other out-of-pocket transaction costs,
including the expenses and compensation, of the Escrow Agent incurred in
connection with such sale of the Excess ADSs and Excess Shares. The Escrow Agent
shall determine the portion of the Common Shares Trust to which each holder of
Voicestream Common Shares shall be entitled, if any, by multiplying the amount
of the aggregate net proceeds comprising the Common Shares Trust by a fraction,
the numerator of which is the amount of Fractional Interests to which such
holder of Voicestream Common Shares is entitled and the denominator of which is
the aggregate amount of Fractional Interests to which all holders of Voicestream
Common Shares are entitled. As soon as practicable after the determination of
the amount of cash, if any, to be paid to holders of Voicestream Common Shares
in lieu of any Fractional Interests, the Escrow Agent shall make available such
amounts to such holders of Voicestream Common Shares without interest.
SECTION 1.10. The Surviving Corporation. (a) The certificate
of incorporation of Voicestream in effect at the Effective Time as amended and
restated to be identical to the certificate of incorporation of Merger Sub shall
be the certificate of incorporation of the Surviving Corporation until amended
in accordance with applicable law, except that Article I thereof shall be
amended to read: "The name of the Corporation is Voicestream Wireless
Corporation".
(b) The bylaws of Merger Sub in effect at the Effective Time
shall be the bylaws of the Surviving Corporation until amended in accordance
with applicable law, provided that from and after the Effective Time the bylaws
of Merger Sub shall contain provisions identical to Article VII of the bylaws of
Voicestream as in effect as of the date of this Agreement.
(c) The directors of Merger Sub and the officers of
Voicestream immediately prior to the Effective Time shall be the directors and
officers of the Surviving Corporation, respectively, and such individuals shall
serve in such positions until their successors shall have been duly elected and
shall qualify.
SECTION 1.11. Lost, Stolen or Destroyed Certificates. In the
event any Certificate shall have been lost, stolen or destroyed, upon the
holder's compliance with the replacement requirements established by the Escrow
Agent, including, if necessary, the posting by such Person of a bond in
customary amount as indemnity against any claim that may be made against it with
respect to such Certificate, the Escrow Agent will issue in exchange for such
lost, stolen or destroyed Certificate, the Merger Consideration and any cash
payable in lieu of Fractional Interests and any unpaid dividends or other
distributions deliverable pursuant to Section 1.06(f) in respect of the
Voicestream Common Shares represented by such Certificate pursuant to this
Agreement.
14
SECTION 1.12. Dissenting Shares. Voicestream Common Shares
which are issued and outstanding immediately prior to the Effective Time and
which are held by a holder who has not voted such shares in favor of the Merger,
who shall have delivered a written demand for appraisal of such shares in the
manner provided by Delaware Law and who shall not have effectively withdrawn or
lost such right to appraisal as of the Effective Time ("DISSENTING SHARES"),
shall be entitled to such rights (but only such rights) as are granted by
Section 262 of the Delaware Law. Each holder of Dissenting Shares who becomes
entitled to payment for such Dissenting Shares pursuant to Section 262 of the
Delaware Law shall receive payment therefor from the Surviving Corporation in
accordance with Delaware Law; provided, however, that (i) if any such holder of
Dissenting Shares shall have failed to establish his entitlement to appraisal
rights as provided in Section 262 of the Delaware Law, (ii) if any holder of
Dissenting Shares shall have effectively withdrawn his demand for appraisal of
such Shares or lost his right to appraisal and payment for his Shares under
Section 262 of the Delaware Law or (iii) if neither any holder of Dissenting
Shares nor the Surviving Corporation shall have filed a petition demanding a
determination of the value of all Dissenting Shares within the time provided for
the filing of such petition in Section 262 of the Delaware Law, such holder
shall forfeit the right to appraisal of such Dissenting Shares and the holder of
each such Dissenting Share shall be deemed to have made a Mixed Election
pursuant to Section 1.05(d) and each such Share shall be converted into the
right to receive the Mixed Consideration pursuant to Section 1.05(d).
Voicestream shall give DT prompt notice of any demands received by Voicestream
for appraisal of Voicestream Common Shares and DT shall have the right to
conduct all negotiations and proceedings with respect to such demands. Except
with the prior written consent of DT, Voicestream shall not make any payment
with respect to, or settle or offer to settle, any such demands. To the extent
holders of Dissenting Shares become entitled to DT Ordinary Shares or cash after
the Effective Time, such DT Ordinary Shares and cash to which such holder of
Dissenting Shares is entitled will be issued from the Dissenting Stockholder
Trust described in Annex 1.12 (the "DISSENTING STOCKHOLDER TRUST").
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF VOICESTREAM
Except as disclosed in the Voicestream SEC Reports filed prior
to the date of this Agreement and except as set forth in the Voicestream
disclosure schedules to this Agreement (it being agreed that disclosure of any
item in such schedules shall be deemed disclosure with respect to any section of
this Agreement to which the relevance of such item is reasonably apparent),
Voicestream hereby represents and warrants as of the date hereof to DT as
follows:
SECTION 2.01. Organization and Qualification; Subsidiaries.
Voicestream and each of its Significant Subsidiaries is a corporation or limited
liability company duly organized, validly existing and in good standing under
the laws of its jurisdiction of incorporation or organization. Each of the
Voicestream Subsidiaries which is not a Significant Subsidiary and each of the
Xxxx Inlet Joint Ventures, as listed on Schedule 2.01 hereto, is duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation or organization, except for such failure which, when taken
together with all other such failures, would not reasonably be expected to have
a Material Adverse Effect on Voicestream. Each of
15
Voicestream, its Significant Subsidiaries and the Xxxx Inlet Joint Ventures has
the requisite power and authority and any necessary Permit (as defined below) to
own, operate or lease the properties that it purports to own, operate or lease
and to carry on its business as it is now being conducted, and is duly qualified
to do business, and is in good standing, in each jurisdiction where the
character of its properties owned, operated or leased or the nature of its
activities makes such qualification necessary, except for such failure which,
when taken together with all other such failures, would not reasonably be
expected to have a Material Adverse Effect on Voicestream. Schedule 2.01 sets
forth a list of all Voicestream Significant Subsidiaries and all entities in
which Voicestream has an Investment Interest and their respective jurisdictions
of incorporation or organization and identifies Voicestream's (direct or
indirect) percentage ownership interest therein.
SECTION 2.02. Certificate of Incorporation and Bylaws.
Voicestream has heretofore furnished, or otherwise made available, to DT a
complete and correct copy of the Certificate of Incorporation and the Bylaws,
each as amended to the date hereof, of Voicestream and each of its Significant
Subsidiaries. Such Certificates of Incorporation and Bylaws are in full force
and effect. Neither Voicestream, any of its Significant Subsidiaries nor any of
the Xxxx Inlet Joint Ventures is in violation of any of the provisions of its
respective Certificate of Incorporation or, in any material respect, its Bylaws
or similar constituent documents.
SECTION 2.03. Capitalization. (a) The authorized capital stock
of Voicestream consists solely of (i) 1,000,000,000 Voicestream Common Shares,
of which, as of June 30, 2000, (A) 214,117,711 shares were issued and
outstanding, including the restricted shares listed on Schedule 1.08(ii), (B) no
shares were held in the treasury of Voicestream, (C) 10,173,546 shares were
issuable upon the exercise of options outstanding under the Voicestream option
plans listed on Schedule 2.03(a) hereto (the "VOICESTREAM PLANS"), and (D)
274,844 shares were issuable upon the exercise of the Warrants, and (ii)
100,000,000 shares of preferred stock, $0.001 par value, of Voicestream, of
which, as of June 30, 2000, 7,606 2 1/2% Convertible Preferred Shares were
issued and outstanding and owned by Xxxxxxxxx Telecommunications PCS (USA)
Limited, which shares, as of the date hereof, are convertible into 26,227,586
Voicestream Common Shares. The authorized share capital of Omnipoint Corporation
consists solely of (i) 200,000,000 shares of common stock $0.01 par value, of
which, as of June 30, 2000 65,000,000 shares were issued and outstanding and
owned by Voicestream, and (ii) 10,000,000 shares of preferred stock, $0.01 par
value, of which, as of June 30, 2000 6,355,195 shares of 7% Convertible
Preferred Stock were issued and outstanding, which shares are convertible, as of
the date hereof, into 8,425,082 Voicestream Common Shares. Except as set forth
in Schedule 2.03 or permitted by Section 4.01 or as a result of transactions
permitted by Section 5.15 and as to the exchange rights relating to the Xxxx
Inlet Joint Ventures, (i) since June 30, 2000, no Voicestream Common Shares have
been issued, except upon the exercise of options or the Warrants described in
the immediately preceding sentence, and (ii) as of June 30, 2000, there are no
outstanding Voicestream Equity Rights. For purposes of this Agreement,
"VOICESTREAM EQUITY RIGHTS" means subscriptions, options, warrants, calls,
commitments, agreements, conversion rights, exchange rights or other rights of
any character (contingent or otherwise) to purchase or otherwise acquire from
Voicestream or any of Voicestream's Subsidiaries or any Xxxx Inlet Joint Venture
at any time any shares of the capital stock or other voting or non-voting
securities of Voicestream. Schedule 2.03 hereto sets forth a complete and
accurate list of all
16
outstanding Voicestream Equity Rights as of June 30, 2000 (provided that, with
respect to options, such list need only set forth the aggregate number of
options with weighted average exercise prices at which grants have been made and
need not specify grants by grantee). Since June 30, 2000, no Voicestream Equity
Rights have been issued except (1) after the date hereof, as permitted by
Section 4.01, (2) as a result of transactions permitted by Section 5.15 hereof
(or as would have been permitted had this Agreement been in effect from June 30,
2000), (3) the DT Preferred Shares and (4) or the restricted shares set forth on
Schedule 1.08(ii).
(b) Except as set forth on Schedule 2.03(b), there are no
outstanding obligations of Voicestream or any of Voicestream's Subsidiaries or
any Xxxx Inlet Joint Venture to repurchase, redeem or otherwise acquire any
shares of capital stock of Voicestream, except those arising after the date
hereof, as permitted by Section 4.01.
(c) All of the issued and outstanding Voicestream Common
Shares are validly issued, fully paid and nonassessable.
(d) All the outstanding capital stock of each of Voicestream's
Significant Subsidiaries and each of the Xxxx Inlet Joint Ventures which is
owned by Voicestream is duly authorized, validly issued, fully paid and
nonassessable and owned by Voicestream or one of its Subsidiaries free and clear
of any material liens, security interest, pledges, charges or encumbrances
except for any liens, security interest, pledges, charges or encumbrances which
are granted to secure indebtedness. Except as set forth on Schedules 1.08 and
2.03 and as to the exchange rights relating to the Xxxx Inlet Joint Ventures,
except as hereafter issued or entered into in accordance with Section 4.01 and
except for the DT Preferred Shares, there are no material existing
subscriptions, options, warrants, calls, commitments, agreements, conversion
rights, exchange rights or other rights of any character (contingent or
otherwise) to purchase or otherwise acquire from Voicestream or any of
Voicestream's Significant Subsidiaries or the Xxxx Inlet Joint Venture at any
time any shares of the capital stock or other voting or non-voting securities or
partnership interests or membership interests of any Voicestream Significant
Subsidiary or any Xxxx Inlet Joint Venture, whether or not presently issued or
outstanding (except for rights of first refusal to purchase interests in
Subsidiaries which are not wholly owned by Voicestream and the Xxxx Inlet Joint
Venture), and there are no outstanding obligations of Voicestream or any of
Voicestream's Significant Subsidiaries or the Xxxx Inlet Joint Ventures to
repurchase, redeem or otherwise acquire any shares of capital stock or other
voting or non-voting securities or partnership interests or membership interests
of Voicestream or any of Voicestream's Subsidiaries or any Xxxx Inlet Joint
Venture. Except for (i) its Subsidiaries, (ii) investments of Persons in which
Voicestream has less than a five percent (5%) interest, (iii) equity interests
disclosed on Schedules 2.01 and 2.03 hereto or hereafter acquired as permitted
under Section 4.01 or as a result of transactions permitted by Section 5.15 and
(iv) the Xxxx Inlet Joint Ventures and the Other Joint Ventures, Voicestream
does not directly or indirectly own any equity interest in any other Person
except as permitted by Section 4.01 or as a result of transactions permitted by
Section 5.15. Except as a result of transactions permitted by Section 4.01 or
Section 5.15, neither Voicestream nor any of its Subsidiaries is subject to any
material requirement to provide funds for or to make any investment (in the form
of a loan, capital contribution or otherwise) to or in any Xxxx Inlet Joint
Venture, any Other Joint Venture or any other non-Affiliated entity.
17
(e) No bonds, debentures, notes or other indebtedness of
Voicestream having the right to vote on any matters on which stockholders may
vote are issued or outstanding except for any securities issued after the date
hereof in accordance with Section 4.01.
(f) Neither Voicestream nor any of its Subsidiaries or
Affiliates nor any of the Xxxx Inlet Joint Ventures shall have any obligations
or liabilities arising out of the exercise of the exchange rights relating to
the Xxxx Inlet Joint Ventures Investment other than (i) the obligation to issue
to the Xxxx Inlet Partners with respect to each Xxxx Inlet Joint Venture the
number of Voicestream Common Shares set forth on Schedule 2.03(f) the payment by
each Xxxx Inlet Joint Venture of the amounts set forth opposite the names of
such Xxxx Inlet Joint Venture on Schedule 2.03(f) and obligations relating to
the registration, listing and similar matters with respect to the Voicestream
Common Shares and (iii) any obligations or liabilities relating to the
management or operation of or membership in the Xxxx Inlet Joint Ventures and
obligations to restructure or modify the organizational documents of the Xxxx
Inlet Joint Ventures.
SECTION 2.04. Authority Relative to this Agreement, the
Stockholders Agreement and the DT Financing Agreements. Voicestream has the
necessary corporate power and authority to enter into this Agreement and the DT
Financing Agreements and, subject to obtaining any necessary stockholder
approval of the Merger and this Agreement, to carry out its obligations
hereunder and thereunder. The execution and delivery of this Agreement and the
DT Financing Agreements by Voicestream and the consummation by Voicestream of
the transactions contemplated hereby and thereby have been duly authorized by
all necessary corporate action on the part of Voicestream, subject to the
approval and adoption of this Agreement by a majority of the votes entitled to
be cast by all holders of Voicestream Common Shares outstanding on the record
date (the "RECORD DATE") established for the Voicestream Stockholders Meeting
("VOICESTREAM STOCKHOLDER APPROVAL"). This Agreement and the DT Financing
Agreements have been duly executed and delivered by Voicestream and, assuming
the due authorization, execution and delivery thereof by the other Parties
hereto and thereto, constitute legal, valid and binding obligation of
Voicestream, enforceable against it in accordance with their respective terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other laws relating to or affecting the rights and remedies of creditors
generally and to general principles of equity (regardless of whether considered
in a proceeding in equity or at law).
SECTION 2.05. No Conflict; Required Filings and Consents. (a)
Except as described in subsection (b) below, the execution and delivery of this
Agreement and the DT Financing Agreements by Voicestream does not, and the
performance of this Agreement and the DT Financing Agreements by Voicestream
will not, (i) violate or conflict with the Certificate of Incorporation or
Bylaws of Voicestream, (ii) conflict with or violate any law, regulation, court
order, judgment or decree applicable to Voicestream or any of its Significant
Subsidiaries or by which any of their respective property is bound or affected,
(iii) violate or conflict with the Certificate of Incorporation or Bylaws of any
of Voicestream's Subsidiaries or any of the constituent documents of any of the
Xxxx Inlet Joint Ventures, or (iv) result in any breach of or constitute a
default (or an event which with notice or lapse of time or both would become a
default) under, or give to others any rights of termination or cancellation or
repurchase of, or result in the creation of a lien or encumbrance on any of the
properties or assets of Voicestream
18
or any of its Subsidiaries or any Xxxx Inlet Joint Venture pursuant to, or
result in the loss of any material benefit or right, or result in an
acceleration of any rights or amounts due resulting from a change of control or
otherwise, or require the consent of any other party to, any contract,
instrument, Permit, license or franchise to which Voicestream or any of its
Significant Subsidiaries or any Xxxx Inlet Joint Venture is a party or by which
Voicestream, any of such Subsidiaries or any Xxxx Inlet Joint Venture or any of
their respective property is bound or affected, except, in the case of clauses
(ii), (iii) and (iv) above, for conflicts, violations, breaches, defaults,
rights, results or consents which, individually or in the aggregate, would not
have a Material Adverse Effect on Voicestream, and except that the consummation
of the Merger is conditional upon receipt of the Voicestream Stockholder
Approval.
(b) Except for applicable requirements, if any, of the Federal
Communications Commission (the "FCC"), the Exchange Act, the premerger
notification requirements of the HSR Act, Council Regulation (EEC) No. 4064/89,
if required, filing of a notice pursuant to Sections 721 of Exon-Xxxxxx, filing
and recordation of appropriate merger or other documents as required by Delaware
Law and any filings required pursuant to the rules of any applicable stock
exchanges (collectively, the "VOICESTREAM REQUIRED APPROVALS"), neither
Voicestream nor any of its Subsidiaries nor any Xxxx Inlet Joint Venture is
required to submit any notice, report or other filing with any Governmental or
Regulatory Authority in connection with the execution, delivery or performance
of this Agreement or the DT Financing Agreements. Except as set forth in the
immediately preceding sentence, no waiver, consent, approval or authorization of
any Governmental or Regulatory Authority is required to be obtained by
Voicestream or any of its Subsidiaries or any Xxxx Inlet Joint Venture in
connection with its execution, delivery or performance of this Agreement or the
DT Financing Agreements.
SECTION 2.06. SEC Filings; Financial Statements. (a) Each of
Voicestream and its Significant Subsidiaries has filed all forms, reports and
documents required to be filed with the SEC since January 1, 1999, together with
any amendments and exhibits thereto, (i) its Annual Report on Form 10-K for the
fiscal year ended December 31, 1999, (ii) all proxy statements relating to
meetings of stockholders (whether annual or special) held since January 1, 1999,
(iii) its Quarterly Report on Form 10-Q for the fiscal quarter ended March 31,
2000 and (iv) all other reports or registration statements filed by each of
Voicestream and its Significant Subsidiaries with the SEC since January 1, 1999
(collectively, the "VOICESTREAM SEC REPORTS"). Taking into account any
amendments and supplements filed prior to the date of this Agreement, the
Voicestream SEC Reports (i) were prepared substantially in accordance with the
requirements of the Securities Act or the Exchange Act, as the case may be, and
the rules and regulations promulgated under each of such respective acts, and
(ii) did not at the time they were filed contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(b) The financial statements (the "VOICESTREAM FINANCIAL
STATEMENTS"), including all related notes and schedules, contained in the
Voicestream SEC Reports (or incorporated by reference therein) fairly present
the consolidated financial position of Voicestream and its Subsidiaries as at
the respective dates thereof and the consolidated results of operations and cash
flows of Voicestream and its Subsidiaries, or of Voicestream's Significant
19
Subsidiaries, as the case may be, for the periods indicated in accordance with
GAAP applied on a consistent basis throughout the periods involved (except as
disclosed in the notes thereto) and subject in the case of interim financial
statements to normal year-end adjustments.
SECTION 2.07. Absence of Certain Changes or Events. Except as
permitted by this Agreement or consented to by DT hereunder, (a) since December
31, 1999, there has not been any Material Adverse Effect on Voicestream and (b)
Voicestream, its Subsidiaries and the Xxxx Inlet Joint Ventures, taken as a
whole, have not incurred since December 31, 1999 any material liabilities or
obligations except (i) liabilities or obligations (1) which are accrued or
reserved against in the Voicestream Financial Statements included in
Voicestream's SEC Reports filed prior to the date hereof or reflected in the
notes thereto or (2) which were incurred after December 31, 1999 in the ordinary
course of business and consistent with past practices, (ii) liabilities or
obligations which have been discharged or paid in full prior to the date hereof
in the ordinary course of business, (iii) liabilities and obligations which are
of a nature not required to be reflected in the consolidated financial
statements of Voicestream and its Subsidiaries prepared in accordance with GAAP
and (iv) liabilities and obligations arising after December 31, 1999 which,
individually and in the aggregate, would not reasonably be expected to have a
Material Adverse Effect on Voicestream.
SECTION 2.08. Litigation. As of the date hereof, there are no
claims, actions, suits, proceedings or investigations pending or, to
Voicestream's Knowledge, threatened against Voicestream, any of its Subsidiaries
or any Xxxx Inlet Joint Venture, or any properties or rights of Voicestream, any
of its Subsidiaries or any Xxxx Inlet Joint Venture, before any Governmental or
Regulatory Authority that would reasonably be expected to result in an adverse
judgment or determination against Voicestream, any of its Subsidiaries or any
Xxxx Inlet Joint Venture, except for those that are not, individually or in the
aggregate, reasonably likely to have a Material Adverse Effect on Voicestream or
prevent Voicestream from consummating the transactions contemplated by this
Agreement.
SECTION 2.09. No Violation of Law; Permits. The business of
Voicestream, its Subsidiaries and the Xxxx Inlet Joint Ventures is not being
conducted in violation of any statute, law, ordinance, regulation, judgment,
order or decree of any Governmental or Regulatory Authority (including, without
limitation, any stock exchange or other self-regulatory body) ("LEGAL
REQUIREMENTS"), or in violation of any permits, franchises, licenses,
privileges, immunities, approvals, certificates, orders, authorizations or
consents that are granted by any Governmental or Regulatory Authority
(including, without limitation, any stock exchange or other self-regulatory
body) ("PERMITS"), except for violations which, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect on
Voicestream. Except as disclosed in the Voicestream SEC Reports filed prior to
the date hereof, as of the date hereof, no investigation, review or proceeding
by any Governmental or Regulatory Authority (including, without limitation, any
stock exchange or other self-regulatory body) with respect to Voicestream, its
Subsidiaries or any Xxxx Inlet Joint Venture in relation to any alleged
violation of law or regulation is pending or, to Voicestream's Knowledge,
threatened, nor has any Governmental or Regulatory Authority (including, without
limitation, any stock exchange or other self-regulatory body) indicated in
writing an intention to conduct the same, except for such investigations which
would not reasonably be expected to have, individually or in the aggregate,
20
a Material Adverse Effect on Voicestream. None of the representations and
warranties made in this Section 2.09 are being made with respect to
Environmental Laws (as defined below).
SECTION 2.10. Information Provided by Voicestream. None of the
information supplied or to be supplied by or on behalf of Voicestream for
inclusion or incorporation by reference in the Registration Statement (as
defined below) will, at the time the Registration Statement becomes effective
under the Securities Act, 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, in light of the circumstances under which they were
made, not misleading. None of the information supplied or to be supplied by or
on behalf of Voicestream for inclusion or incorporation by reference in the
Voicestream Proxy Statement (as defined below) will, at the dates mailed to
stockholders and at the times of the Voicestream Stockholders' Meeting, contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. None of the information supplied or to be supplied by or on behalf
of Voicestream for inclusion or incorporation by reference in the German Listing
Prospectus will, at the time the German Listing Prospectus is published, 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, in
light of the circumstances under which they were made, not misleading. None of
the information supplied or to be supplied by or on behalf of Voicestream for
inclusion or incorporation by reference in the auditor's report to be prepared
pursuant to Section 183(3) of the German Act will, at the time the report is
filed with the Commercial Register, 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, in light of the circumstances under
which they were made, not misleading. None of the information to be supplied by
or on behalf of Voicestream pursuant to Section 5.07(c) will contain any untrue
statement of material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The Registration
Statement and the Voicestream Proxy Statement (except for information relating
solely to DT) will comply as to form in all material respects with the
provisions of the Securities Act and the Exchange Act and the rules and
regulations promulgated thereunder.
SECTION 2.11. Employee Matters; ERISA. Except as set forth on
Schedule 2.11:
(a) Schedule 2.11 contains a true and complete list of all
material employee benefit plans sponsored or maintained by Voicestream or its
Subsidiaries and covering present or former employees or directors of
Voicestream and of each of its Subsidiaries or their beneficiaries, or providing
benefits to such persons in respect of services provided to any such entity, or
with respect to which Voicestream or any of its Subsidiaries has, or has had, an
obligation to contribute or any other liability, including, but not limited to,
any employee benefit plans within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), any deferred
compensation, bonus, stock option, restricted stock, incentive, profit sharing,
retirement, savings, medical, health, life insurance, disability, sick leave,
cafeteria or flexible spending, vacation, unemployment compensation, severance
or
21
change in control agreements, arrangements, programs, policies or plans and any
other benefit arrangements or payroll practice (collectively, the "VOICESTREAM
BENEFIT PLANS"), whether funded or unfunded, insured or uninsured, written or
unwritten, true and complete copies of which have been provided to DT.
(b) Except as would not reasonably be expected to result in a
Material Adverse Effect on Voicestream, all contributions and other payments
required to be made by Voicestream or any of its Subsidiaries to or under any
Voicestream Benefit Plan (or to any person pursuant to the terms thereof) have
been made or the amount of such payment or contribution obligation has been
reflected in the Voicestream Financial Statements.
(c) Each of the Voicestream Benefit Plans intended to be
"qualified" within the meaning of Section 401(a) of the Code has received a
favorable determination letter from the Internal Revenue Service (the "IRS") or
is a prototype plan which has received a favorable opinion letter, and, to
Voicestream's Knowledge, no circumstances exist that could reasonably be
expected by Voicestream to adversely affect such qualification, except as would
not reasonably be expected to have a Material Adverse Effect on Voicestream.
Except as would not reasonably be expected to have a Material Adverse Effect on
Voicestream, Voicestream is in compliance in all respects with, and each of the
Voicestream Benefit Plans complies in form with, and is and has been operated in
all respects in compliance with, all applicable Legal Requirements, including,
without limitation, ERISA and the Code. No assets of Voicestream or any of its
Subsidiaries are subject to liens arising under ERISA or the Code on account of
any Voicestream Benefit Plan, neither Voicestream nor any of its Subsidiaries
has been required to provide any security under Sections 401(a)(29) or 412(f) of
the Code, or under Section 307 of ERISA, and, to Voicestream's Knowledge, no
event has occurred that could give rise to any such lien or a requirement to
provide such security.
(d) Except as would not reasonably be expected to have a
Material Adverse Effect on Voicestream, to Voicestream's Knowledge, there does
not now exist any condition or set of circumstances, that could subject
Voicestream or any of its Subsidiaries to any material liability arising under
any indemnity agreement to which Voicestream or any of its Subsidiaries is a
party, excluding liability for benefit claims and funding obligations payable in
the ordinary course. No Voicestream Benefit Plan subject to Title IV of ERISA
has terminated, nor has a "reportable event" (within the meaning of Section 4043
of ERISA) occurred with respect to any such plan (other than such events with
respect to which the reporting requirement has been waived by regulation).
(e) None of the Voicestream Benefit Plans that are "welfare
plans" within the meaning of Section 3(1) of ERISA provide for any
post-employment or retiree benefits other than continuation coverage required to
be provided under Section 4980B of the Code, Part 6 of Title I of ERISA, or
applicable state law.
(f) Voicestream has made available to DT a true and correct
copy of each current or last, in the case where there is no current, expired
collective bargaining agreement to which Voicestream or any of its Subsidiaries
is a party or under which Voicestream or any of its Subsidiaries has obligations
and copies of the following documents with respect to each
22
Voicestream Benefit Plan, where applicable, (i) the plan documents governing
such plan and the most recent summary plan description furnished to employees,
(ii) the most recent annual reports filed with the IRS, (Form 5500-series),
including all schedules and attachments thereto, (iii) each related trust
agreement or other funding arrangement (including all amendments to each such
agreement), (iv) the most recent determination of the IRS with respect to the
qualified status of such Voicestream Benefit Plan, and any currently-pending
application for such a letter, and (v) the most recent actuarial report or
valuation.
(g) The consummation or announcement of any transaction
contemplated by this Agreement will not (either alone or upon the occurrence of
any additional or further acts or events) result in any (a) payment (whether of
severance pay or otherwise) becoming due from Voicestream or any of its
Subsidiaries to any officer, employee, former employee or director thereof or to
the trustee under any "rabbi trust" or similar arrangement, (b) obligation on
the part of Voicestream or DT to pay any excise tax or any similar tax imposed
on any employee or former employee of Voicestream or its subsidiaries under
Section 4999 of the Code or any other similar taxes except as provided in
Schedule 4.01(e), (c) benefit under any Voicestream Benefit Plan being
established or becoming accelerated, vested or payable or (d) "reportable event"
(as defined in Section 4043 of ERISA) with respect to a Voicestream Benefit Plan
subject to Title IV of ERISA.
(h) The consummation or announcement of any transaction
contemplated by this Agreement will not (either alone or upon the occurrence of
any additional or further acts or events) result in the disqualification of any
of the Voicestream Benefit Plans intended to be qualified under, result in a
prohibited transaction or breach of fiduciary duty under, or otherwise violate,
ERISA or the Code in a manner that would give rise to material liability.
(i) Except as would not reasonably be expected to have a
Material Adverse Effect on Voicestream, neither Voicestream nor any of its
Subsidiaries nor any of their directors, officers, employees or agents, nor any
"party in interest" or "disqualified person", as such terms are defined in
Section 3 of ERISA and Section 4975 of the Code, with respect to any Voicestream
Benefit Plan, has engaged in or been a party to any "prohibited transaction", as
such term is defined in Section 4975 of the Code or Section 406 of ERISA, which
is not otherwise exempt, which could result in the imposition of either a
penalty assessed pursuant to Section 502(i) of ERISA or a tax imposed by Section
4975 of the Code upon Voicestream or its Subsidiaries, or which could constitute
a breach of fiduciary duty which could result in liability on the part of
Voicestream or any of its Subsidiaries.
(j) No Voicestream Benefit Plan has incurred any "accumulated
funding deficiency" (as defined in Section 412 of the Code or Part 3 of Title I
of ERISA), whether or not waived. Neither Voicestream nor any of its
Subsidiaries has incurred, and none of such entities reasonably expects to
incur, any material liability to the PBGC with respect to any Voicestream
Benefit Plan. Neither Voicestream nor any of its Subsidiaries is a party to,
contributes to, or is required to contribute to, and neither has incurred or
reasonably expects to incur, any withdrawal liability with respect to, any
"multiemployer plan" (as defined in Section 3(37) of ERISA). No Voicestream
Benefit Plan is a "multiple employer plan", within the meaning of the Code or
ERISA.
23
(k) No employee is entitled to any "reload" options under any
of the Voicestream Benefit Plans.
SECTION 2.12. Labor Matters. As of the date hereof, neither
Voicestream nor any of its Subsidiaries is party to any collective bargaining
agreements. As of the date hereof, there are no labor unions or other
organizations representing or to Voicestream's Knowledge purporting to represent
or making significant or sustained efforts to represent, a significant number of
employees of Voicestream or its Subsidiaries. There is no pending, or, to the
knowledge of Voicestream, threatened labor dispute, strike, work stoppage or
other concerted labor activity against Voicestream or its Subsidiaries which
would be reasonably likely to have a Material Adverse Effect on Voicestream.
During the three (3) year period preceding the date hereof, to the Knowledge of
Voicestream, there have been no significant or sustained efforts to organize
activities conducted by any labor organization or work council or the like with
respect to any employees of Voicestream or its Subsidiaries. Except for any
violations, charges or complaints that would not, individually or in the
aggregate, be reasonably likely to have a Material Adverse Effect on
Voicestream, neither Voicestream nor any of its Subsidiaries has committed any
unfair labor practices or violated in any material respect any applicable
employment laws, regulations, ordinances, rules, orders or decrees in connection
with the operation of the respective businesses of Voicestream and its
Subsidiaries and there is no pending or, to the knowledge of Voicestream,
threatened charge, complaint, investigation or proceeding against Voicestream or
its Subsidiaries by or before the National Labor Relations Board, the Department
of Labor, the Equal Employment Opportunity Commission, the Occupational Health
and Safety Administration or any comparable state or municipal agency by or on
behalf of any employee or class of employees or by or before any governmental
agency relating to a purported violation of any applicable employment laws,
regulations, ordinances, rules, orders or decrees.
SECTION 2.13. Environmental Matters. Except for such matters
that, individually or in the aggregate, are not reasonably likely to have a
Material Adverse Effect on Voicestream, or would not otherwise require
disclosure pursuant to the Securities Act or Exchange Act, (i) each of
Voicestream, its Subsidiaries and the Xxxx Inlet Joint Ventures has complied and
is in compliance with all applicable Environmental Laws (as defined below); (ii)
the properties currently owned or operated by it, any of its Subsidiaries or any
Xxxx Inlet Joint Venture (including soils, groundwater, surface water, buildings
or other structures) are not contaminated with any Hazardous Substances (as
defined below); (iii) to Voicestream's Knowledge, no Hazardous Substances were
present, disposed, released or otherwise deposited on, under, at or from the
properties formerly owned or operated by it, any of its Subsidiaries or any Xxxx
Inlet Joint Venture during the period of ownership or operation by it, any of
its Subsidiaries or any Xxxx Inlet Joint Venture; (iv) to Voicestream's
Knowledge, neither it nor any of its Subsidiaries nor any Xxxx Inlet Joint
Venture is subject to liability for any Hazardous Substance disposal or
contamination on any third party property; (v) neither it nor any of its
Subsidiaries nor any Xxxx Inlet Joint Venture has received any notice, demand,
threat, letter, claim or request for information alleging that it or any of its
Subsidiaries may be in violation of or liable under any Environmental Law
(including any claims relating to electromagnetic fields or microwave
transmissions); and (vi) to Voicestream's Knowledge, neither it nor any of its
Subsidiaries nor any Xxxx Inlet Joint Venture is subject to any orders, decrees,
injunctions or
24
other arrangements (other than those of general applicability not specifically
related to Voicestream) with any Governmental or Regulatory Authority or is
subject to any indemnity or other agreement with any third party relating to
liability under any Environmental Law or relating to Hazardous Substances
(except for such agreements entered into by Voicestream in the ordinary course
of business).
"ENVIRONMENTAL LAW" means any federal, state, local, foreign
or other law (including common law), statutes, ordinances or codes relating to:
(a) the protection, investigation or restoration of the environment or natural
resources, (b) the handling, use, presence, disposal, release or threatened
release of any Hazardous Substance, or (c) noise, odor, wetlands, pollution,
contamination or any injury or threat of injury to person or property in
connection with any Hazardous Substance.
"HAZARDOUS SUBSTANCES" means any substance that is: listed,
classified or regulated pursuant to any Environmental Law, including any
petroleum product or by-product, asbestos-containing material, lead-containing
paint or plumbing, polychlorinated biphenyls, radioactive materials or radon.
SECTION 2.14. Board Action; Vote Required; Applicability of
Section 203. (a) The Board of Directors of Voicestream has determined that the
transactions contemplated by this Agreement are advisable and in the best
interests of Voicestream and its stockholders and has resolved to recommend to
such stockholders that they vote in favor thereof.
(b) The Voicestream Stockholder Approval is the only vote of
the holders of any class or series of the capital stock of Voicestream required
to approve this Agreement, the Merger and the other transactions contemplated
hereby.
(c) Prior to the execution of the Stockholders Agreement and
the DT Financing Agreements, the Board of Directors of Voicestream approved the
transactions contemplated hereby, by the DT Financing Agreements and the
Stockholders Agreement for purposes of Section 203 of the Delaware Law
including, without limitation, approving of DT becoming an "interested
stockholder" as defined in and for the purposes of such Section 203. To
Voicestream's Knowledge, no "moratorium", "control share", "fair price" or other
antitakeover laws and regulations of the State of Delaware or the State of
Washington (collectively, "VOICESTREAM TAKEOVER LAWS") are applicable to the
Merger or the other transactions contemplated by this Agreement, the
Stockholders' Agreement and the DT Financing Agreements.
SECTION 2.15. Opinion of Financial Advisor. Voicestream has
received the opinion of Xxxxxxx, Sachs & Co., dated the date hereof, to the
effect that, as of such date, the Merger Consideration is fair from a financial
point of view to the holders of Voicestream Common Shares.
SECTION 2.16. Brokers. Except for Xxxxxxx, Xxxxx & Co., the
arrangements with which have been disclosed to DT prior to the date hereof, no
broker, finder or investment banker is entitled to any brokerage, finder's or
investment banking fee in connection with the
25
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Voicestream or any of its Subsidiaries.
SECTION 2.17. Tax Matters. Except as set forth on Schedule
2.17 and except to the extent that the failure of the following representations
to be true whether considered individually or in the aggregate would not have a
Material Adverse Effect on Voicestream:
(a) All Tax Returns required to be filed by Voicestream or its
Subsidiaries on or prior to the Effective Time have been or will be timely filed
with the appropriate Governmental or Regulatory Authorities and are or will be
correct in all respects, and all Taxes due by Voicestream or its Subsidiaries on
or prior to the Effective Time have been, or will be, timely paid;
(b) There are no liens (except for statutory liens for current
Taxes not yet due and payable) against any domestic or foreign assets of
Voicestream or any of its Subsidiaries resulting from any unpaid Taxes;
(c) No audit or other proceeding with respect to Taxes due
from Voicestream or any of its Subsidiaries, or any Tax Return of Voicestream or
any of its Subsidiaries, is pending, threatened in writing, or being conducted
by any Governmental or Regulatory Authority;
(d) Except for complete and accurate copies of tax sharing
agreements and amendments thereto made available to DT prior to the execution of
this Agreement and listed in Schedule 2.17, no agreements relating to the
allocation or sharing of Taxes exist between Voicestream and/or any one of its
Subsidiaries, on the one hand, and a third party, on the other hand.
(e) No extension of the statute of limitations on the
assessment of any Taxes has been granted by Voicestream or any of its
Subsidiaries and is currently in effect; and
(f) Neither Voicestream nor any of its Subsidiaries has taken
any action or knows of any fact that is reasonably likely to (i) prevent or
impede the Merger from qualifying as a reorganization within the meaning of
Section 368(a) of the Code or (ii) cause the stockholders of Voicestream, other
than any such stockholder that would be a "five-percent transferee shareholder"
of DT (within the meaning of U.S. Treasury Regulations Section 1.367(a)-3(c)(5))
following the Merger, to recognize gain pursuant to Section 367(a) of the Code.
(g) The Tax Sharing Agreement has not been amended or modified
(after May 3, 1999). Voicestream will not amend, modify or terminate the Tax
Sharing Agreement in any material respect without the prior written consent of
DT.
SECTION 2.18. Intellectual Property. Voicestream, its
Subsidiaries and the Xxxx Inlet Joint Ventures have all right, title and
interest in, or a valid and binding license to use, all Intellectual Property
(as defined below) that is individually or in the aggregate material to the
conduct of the businesses of Voicestream, its Subsidiaries and the Xxxx Inlet
Joint Ventures taken as a whole ("VOICESTREAM INTELLECTUAL PROPERTY") except
where the failure to have such right, title and interest or have the right to
use such Intellectual Property would not reasonably be
26
expected to have a Material Adverse Effect on Voicestream. Voicestream, its
Subsidiaries and the Xxxx Inlet Joint Ventures (i) have not defaulted (except
defaults that have been waived) in any material respect under any license to use
Voicestream Intellectual Property, and (ii) are not as of the date hereof the
subject of any proceeding or litigation for infringement of any third party
Intellectual Property, other than a default proceeding or litigation, that is
not having or would not be reasonably expected to have, individually or in the
aggregate, a Material Adverse Effect on Voicestream. For purposes of this
Agreement, "INTELLECTUAL PROPERTY" means patents and patent rights, trademarks
and trademark rights, trade names and trade name rights, service marks and
service xxxx rights, copyrights and copyright rights, trade secret and trade
secret rights, and other intellectual property rights, and all pending
applications for and registrations of any of the foregoing.
SECTION 2.19. Ownership of Securities. As of the date hereof,
neither Voicestream nor to Voicestream's Knowledge any of its Subsidiaries,
beneficially owns, directly or indirectly, or is party to any agreement,
arrangement or understanding for the purpose of acquiring, holding, voting or
disposing of, in each case, shares of capital stock of DT.
SECTION 2.20. Certain Contracts. All material contracts
required to be filed prior to the date hereof by Voicestream or any Significant
Subsidiary pursuant to Item 601(b)(10) of Regulation S-K have been filed as
exhibits to, or incorporated by reference in, a Voicestream SEC Report filed
after December 31, 1999, or in Omnipoint Corporation 's Annual Report on Form
10-K for the year ended December 31, 1999, or in Aerial Communications, Inc.'s
Annual Report on Form 10-K for the year ended December 31, 1999. Except as
entered into after the date hereof in compliance with the terms of this
Agreement, Schedule 2.20 (i) lists all material joint venture or strategic
alliance agreements to which Voicestream or any of its Subsidiaries is a party,
Schedule 2.20 (ii) contains a list of all material agreements that exist between
Voicestream and any of its non-employee Affiliates, Schedule 2.20 (iii) contains
a list of all registration rights agreements that exist in respect of
Voicestream Common Shares and Schedule 2.20 (iv) contains a list of all
agreements that have a non-competition or similar operational restriction
applicable to, or could be reasonably anticipated to be applicable to, and
material to, the business of Voicestream and its Subsidiaries taken as a whole.
Taken as a whole, the contracts and agreements required to be filed by
Voicestream with the SEC and referred to in the first sentence of this Section
2.20, together with the contracts and agreements required to be set forth on
Schedules 2.20 (i) through 2.20 (iv), are collectively referred to as the
"VOICESTREAM CONTRACTS." The Voicestream Contracts are valid and in full force
and effect on the date hereof except to the extent they have previously expired
in accordance with their terms or, to the extent such invalidity or failure to
be in full force and effect would not have a Material Adverse Effect on
Voicestream, and, to Voicestream's Knowledge, neither Voicestream nor any of its
Subsidiaries nor any Xxxx Inlet Joint Venture has violated any provision of, or
committed or failed to perform any act which with or without notice, lapse of
time or both would constitute a default under the provisions of, any Voicestream
Contract, except for defaults which individually and in the aggregate would not
reasonably be expected to result in a Material Adverse Effect on Voicestream.
SECTION 2.21. Licenses. (a) Voicestream, each of its
Subsidiaries and each Xxxx Inlet Joint Venture are the authorized legal holders
or otherwise have rights to all Permits
27
and licenses and operating rights necessary for the operation of their
businesses as presently operated (collectively, the "SECTION 2.21 LICENSES") and
all Section 2.21 Licenses are in full force and effect, except for such failures
to hold or to have such rights or to be in full force and effect as would not
reasonably be expected to have a Material Adverse Effect on Voicestream.
Voicestream and its Subsidiaries and the Xxxx Inlet Joint Ventures are each in
compliance in all respects with the Communications Act of 1934, as amended, and
the rules, regulations and policies of the FCC and all applicable Governmental
or Regulatory Authorities, except for such failure to comply which would not
have a Material Adverse Effect on Voicestream. As of the date hereof, there is
not pending and, to Voicestream's Knowledge, there is not threatened, any action
by or before the FCC or any Governmental or Regulatory Authority to revoke,
suspend, cancel, rescind or modify any of the Section 2.21 Licenses, except for
such action or actions which individually and in the aggregate would not
reasonably be expected to have a Material Adverse Effect on Voicestream.
Schedule 2.21 sets forth a complete list of all material Section 2.21 Licenses
except for such Section 2.21 Licenses, sold, pledged, disposed of or encumbered
in accordance with Section 4.01(b).
(b) None of the Section 2.21 Licenses issued by the FCC are
held directly by Voicestream but instead are held through one or more
Subsidiaries of Voicestream or one or more Xxxx Inlet Joint Ventures.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF DT
Except as disclosed in the DT SEC Reports filed prior to the
date of this Agreement and except as set forth in the DT disclosure schedules to
this Agreement (it being agreed that disclosure of any item in such schedules
shall be deemed disclosure with respect to any section of this Agreement to
which the relevance of such item is reasonably apparent), DT hereby represents
and warrants as of the date hereof to Voicestream as follows:
SECTION 3.01. Organization and Qualification; Subsidiaries. DT
and each of its Significant Subsidiaries, as listed on Schedule 3.01 hereto is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation or organization. Each of DT and its
Subsidiaries has the requisite corporate power and authority and any necessary
Permit to own, operate or lease the properties that it purports to own, operate
or lease and to carry on its business as it is now being conducted, and is duly
qualified to do business, and is in good standing, in each jurisdiction where
the character of its properties owned, operated or leased or the nature of its
activities makes such qualification necessary, except for such failure which,
when taken together with all other such failures, would not reasonably be
expected to have a Material Adverse Effect on DT.
SECTION 3.02. Certificate of Incorporation and Bylaws. DT is
an Aktiengesellschaft organized and existing under the laws of the Federal
Republic of Germany. DT has heretofore furnished, or otherwise made available,
to Voicestream a complete and correct copy of the Memorandum and Articles of
Association (SATZUNG) and Management Board (VORSTAND) Rules of Procedure
(GESCHAFTSORDNUNG), each as amended to the date
28
hereof, of DT. Such Memoranda and Articles of Association (SATZUNG), Management
Board (VORSTAND) Rules of Procedure (GESCHAFTSORDNUNG), are in full force and
effect. DT is not in violation of any of the provisions of its Memorandum or
Articles of Association (SATZUNG) or, in any material respect, its Management
Board (VORSTAND) Rules of Procedure (GESCHAFTSORDNUNG).
SECTION 3.03. Capitalization. (a) As of the date hereof, DT's
stated share capital (XXXXX KAPITAL) amounts to (euro)7,755,786,327.04 divided
into 3,029,604,034 ordinary shares, all of which, as of the date hereof, are
issued and outstanding and not held in the Treasury of DT, and DT's authorized
capital (GENEHMIGTES KAPITAL) available for the issuance of new DT Shares
against contributions in kind amounts to up to (euro)3,865,093,163.52, as set
forth in Section 5 of the Articles of Association of DT. As of the date hereof,
4,969,388 shares were held in the treasury of DT (EIGENE AKTIEN). Except as set
forth on Schedule 3.03, there are no outstanding DT Equity Rights on the date
hereof. For purposes of this Agreement, "DT EQUITY RIGHTS" shall mean
subscriptions, options, warrants, calls, commitments, agreements, conversion
rights or other rights of any character (contingent or otherwise) to purchase or
otherwise acquire from DT or any of DT's Significant Subsidiaries at any time,
or upon the happening of any stated event, any shares of the capital stock or
other voting or non-voting securities of DT.
(b) All of the issued and outstanding capital stock of DT is
validly issued, fully paid and nonassessable. All DT Depositary Shares and DT
Ordinary Shares to be issued as Merger Consideration will be, when issued,
validly issued, fully paid and nonassessable.
(c) Except as disclosed on Schedule 3.03 hereto, all the
outstanding capital stock of each of DT's Significant Subsidiaries which is
owned by DT is duly authorized, validly issued, fully paid and nonassessable,
and is owned by DT free and clear of any liens, security interest, pledges,
agreements, claims, charges or encumbrances except for any liens, security
interest, pledges, agreements, claims, charges or encumbrances which would not,
individually or in the aggregate, have a Material Adverse Effect on DT. Except
as set forth on Schedule 3.03, there are no existing subscriptions, options,
warrants, calls, commitments, agreements, conversion rights or other rights of
any character (contingent or otherwise) to purchase or otherwise acquire from DT
or any of DT's Significant Subsidiaries at any time, or upon the happening of
any stated event, any shares of the capital stock or other voting or non-voting
securities of any DT Subsidiary, whether or not presently issued or outstanding
(except for rights of first refusal to purchase interests in Subsidiaries which
are not wholly-owned by DT), and there are no outstanding obligations of DT or
any of DT's Significant Subsidiaries to repurchase, redeem or otherwise acquire
any shares of capital stock or other voting or non-voting securities of any of
DT's Subsidiaries, other than such as would not, individually or in the
aggregate, have a Material Adverse Effect on DT.
SECTION 3.04. Authority Relative to this Agreement. DT has the
necessary corporate power and authority to enter into this Agreement, the
Stockholders Agreement and the DT Financing Agreements and to carry out its
obligations hereunder and thereunder. The execution and delivery of this
Agreement, the Stockholders Agreement and the DT Financing Agreements by DT and
the consummation by DT of the transactions contemplated hereby and thereby have
been duly authorized by all necessary corporate action on the part of DT,
including
29
by the Management Board (VORSTAND) of DT, and the Supervisory Board
(AUFSICHTSRAT) of DT of this Agreement and the Stockholders Agreement (except
for the determination by the Board of Management which will be made pursuant to
Section 205(2) of the German Act and except for the application to be filed with
the Commercial Register). This Agreement and the Stockholders Agreement have
been duly executed and delivered by DT and, assuming the due authorization,
execution and delivery thereof by the other Parties, constitutes a legal, valid
and binding obligation of DT, enforceable against it in accordance with their
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
or other laws relating to or affecting the rights and remedies of creditors
generally and to general principles of equity (regardless of whether considered
in a proceeding in equity or at law).
SECTION 3.05. No Conflict; Required Filings and Consents. (a)
Except as set forth on Schedule 3.05 or as described in subsection (b) below,
the execution and delivery of this Agreement, the Stockholders Agreement and the
DT Financing Agreements by DT do not, and the performance of this Agreement, the
Stockholders Agreement and the DT Financing Agreements by DT will not, (i)
violate or conflict with the Memorandum and Articles of Association (SATZUNG) or
the Management Board (VORSTAND) Rules of Procedure (GESCHAFTSORDNUNG) of DT,
(ii) conflict with or violate any law, regulation, court order, judgment or
decree applicable to DT or any of its Significant Subsidiaries or by which any
of their respective property is bound or affected, (iii) violate or conflict
with the Memorandum and Articles of Association (SATZUNG) or the Management
Board (VORSTAND) Rules of Procedure (GESCHAFTSORDNUNG) of any Subsidiaries of
DT, or (iv) result in any breach of or constitute a default (or an event which
with notice or lapse of time or both would become a default) under, or give to
others any rights of termination or cancellation of, or result in the creation
of a lien or encumbrance on any of the properties or assets of DT or any of its
Significant Subsidiaries pursuant to, or result in the loss of any material
benefit or right, including the benefit of any standstill agreement, or result
in an acceleration of any rights or amounts due resulting from a change of
control or otherwise, or require the consent of any other party to, any
contract, instrument, Permit, license or franchise to which DT or any of its
Significant Subsidiaries is a party or by which DT or any of such Subsidiaries,
or any of their respective property is bound or affected, except, in the case of
clauses (ii), (iii) and (iv) above, for conflicts, violations, breaches,
defaults, rights, results or consents which, individually or in the aggregate,
would not have a Material Adverse Effect on DT.
(b) Except for applicable requirements, if any, of state,
local, or foreign regulatory laws and commissions, the FCC, the Exchange Act,
the premerger notification requirements of the HSR Act, Council Regulation (EEC)
No. 4064/89, if required, filing of a notice pursuant to Section 721 of
Exon-Xxxxxx, filing and recordation of appropriate merger or other documents as
required by Delaware Law and any filings required pursuant to any state
securities or "blue sky" laws or the rules of any applicable stock exchanges
(the "DT REQUIRED APPROVALS" and together with the Voicestream Required
Approvals, the "REQUIRED REGULATORY APPROVALS"), neither DT nor any of its
Subsidiaries is required to submit any notice, report or other filing with any
Governmental or Regulatory Authority in connection with the execution, delivery
or performance of this Agreement, the Stockholders Agreement and the DT
Financing Agreements. Except as set forth in the immediately preceding sentence,
no waiver, consent, approval or authorization of any Governmental or Regulatory
Authority is required to be
30
obtained by DT or any of its Subsidiaries in connection with its execution,
delivery or performance of this Agreement, the Stockholders Agreement and the DT
Financing Agreements.
SECTION 3.06. SEC Filings; Financial Statements. (a) DT has
filed all forms, reports and documents required to be filed with the SEC since
January 1, 1999, and has heretofore made available to Voicestream, in the form
filed with the SEC, together with any amendments and exhibits thereto, (i) its
Annual Report on Form 20-F for the fiscal year ended December 31, 1999, and (ii)
all other reports or registration statements filed by DT with the SEC since
January 1, 1999 (collectively, the "DT SEC REPORTS"). The DT SEC Reports (i)
were prepared substantially in accordance with the requirements of the
Securities Act or the Exchange Act, as the case may be, and the rules and
regulations promulgated under each of such respective acts, and (ii) did not at
the time they were filed contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
(b) The financial statements (the "DT FINANCIAL STATEMENTS"),
including all related notes and schedules, contained in the DT SEC Reports (or
incorporated by reference therein) fairly present the consolidated financial
position of DT and its Subsidiaries as at the respective dates thereof and the
consolidated results of operations and cash flows of DT and its Subsidiaries for
the periods indicated in accordance with generally accepted accounting
principles in Germany (with a reconciliation to GAAP in accordance with SEC
rules) applied on a consistent basis throughout the periods involved (except for
changes as disclosed in the notes thereto) and subject in the case of interim
financial statements to normal year-end adjustments.
SECTION 3.07. Absence of Certain Changes or Events. Except as
permitted by this Agreement or consented to by Voicestream hereunder, (a) since
December 31, 1999, there has not been any Material Adverse Effect on DT, and (b)
DT and its Subsidiaries, taken as a whole, have not incurred since December 31,
1999 any material liabilities or obligations except (i) liabilities or
obligations (1) which are accrued or reserved against in the DT Financial
Statements or reflected in the notes thereto or (2) which were incurred after
December 31, 1999 in the ordinary course of business and consistent with past
practices, (ii) liabilities or obligations which have been discharged or paid in
full prior to the date hereof in the ordinary course of business, and (iii)
liabilities and obligations which are of a nature not required to be reflected
in the consolidated financial statements of DT and its Subsidiaries prepared in
accordance with GAAP.
SECTION 3.08. Litigation. As of the date hereof, there are no
claims, actions, suits, proceedings or investigations pending or, to DT's
Knowledge, threatened against DT or any of its Subsidiaries, or any properties
or rights of DT or any of its Subsidiaries, before any Governmental or
Regulatory Authority that would reasonably be expected to result in an adverse
judgment or determination against DT or any of its Subsidiaries, except for
those that are not, individually or in the aggregate, reasonably likely to have
a Material Adverse Effect on DT or prevent DT from consummating the transactions
contemplated by this Agreement except as set forth on Schedule 3.08 hereof.
31
SECTION 3.09. No Violation of Law. The business of DT and its
Subsidiaries is not being conducted in violation of any Legal Requirements or in
violation of any Permits, except for possible violations none of which,
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect on DT. Except as disclosed in DT SEC Reports filed prior
to the date hereof and as set forth on Schedule 3.09 hereto, as of the date
hereof, no investigation, review or proceeding by any Governmental or Regulatory
Authority (including, without limitation, any stock exchange or other
self-regulatory body) with respect to DT or its Subsidiaries in relation to any
alleged violation of law or regulation is pending or, to DT's Knowledge,
threatened, nor has any Governmental or Regulatory Authority (including, without
limitation, any stock exchange or other self-regulatory body) indicated in
writing an intention to conduct the same, except for such investigations which,
if they resulted in adverse findings, would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on DT. None of the
representations and warranties made in this Section 3.09 are being made with
respect to Environmental Laws.
SECTION 3.10. Information Provided by DT. None of the
information supplied or to be supplied by or on behalf of DT for inclusion or
incorporation by reference in the Registration Statement will, at the time the
Registration Statement becomes effective under the Securities Act, 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, in light of
the circumstances under which they were made, not misleading. None of the
information supplied or to be supplied by or on behalf of DT for inclusion or
incorporation by reference in the Voicestream Proxy Statement will, at the date
mailed to stockholders of Voicestream and at the times of the Voicestream
Stockholders' Meeting, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they
are made, not misleading. The Registration Statement (except for information
relating solely to Voicestream) will comply as to form in all material respects
with the provisions of the Securities Act and the rules and regulations
promulgated thereunder. None of the information supplied or to be supplied by or
on behalf of DT for inclusion or incorporation by reference in the German
Listing Prospectus will, at the time the German Listing Prospectus is published,
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,
in light of the circumstances under which they were made, not misleading. None
of the information supplied or to be supplied by or on behalf of DT for
inclusion or incorporation by reference in the auditor's report to be prepared
pursuant to Section 183(3) of the German Act will, at the time the report is
filed with the Commercial Register, 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 statement therein, in light of the circumstances under
which they were made, not misleading.
SECTION 3.11. Environmental Matters. Except for such matters
that, individually or in the aggregate, are not reasonably likely to have a
Material Adverse Effect on DT, or would not otherwise require disclosure
pursuant to the Securities Act, or are listed on Schedule 3.11 hereto, (i) each
of DT and its Subsidiaries has complied and is in compliance with all applicable
Environmental Laws (as defined below); (ii) the properties currently owned or
operated by it or any of its Subsidiaries (including soils, groundwater, surface
water, buildings or
32
other structures) are not contaminated with any Hazardous Substances (as defined
below); (iii) to DT's Knowledge, no Hazardous Substances were present, disposed,
released or otherwise deposited on, under, at or from the properties formerly
owned or operated by it or any of its Subsidiaries during the period of
ownership or operation by it or any of its Subsidiaries; (iv) to DT's Knowledge,
neither it nor any of its Subsidiaries is subject to liability for any Hazardous
Substance disposal or contamination on any third party property; (v) neither it
nor any of its Subsidiaries has received any notice, demand, threat, letter,
claim or request for information alleging that it or any of its Subsidiaries may
be in violation of or liable under any Environmental Law (including any claims
relating to electromagnetic fields or microwave transmissions); and (vi) to DT's
Knowledge, neither it nor any of its Subsidiaries is subject to any orders,
decrees, injunctions or other arrangements (other than those of general
applicability not specifically related to DT) with any Governmental or
Regulatory Authority or is subject to any indemnity or other agreement with any
third party relating to liability under any Environmental Law or relating to
Hazardous Substances, except for such agreements entered into by DT in the
ordinary course of business.
SECTION 3.12. Board Action; Vote Required. (a) The Management
Board (VORSTAND) and the Supervisory Board (AUFSICHTSRAT) of DT have determined
that the transactions contemplated by this Agreement, the Stockholders Agreement
and the DT Financing Agreements are advisable and in the best interests of DT
and its shareholders.
(b) No vote of holders of any class or series of DT capital
stock, including, without limitation, holders of DT Ordinary Shares or DT
Depositary Shares, is required for the approval or entering into of this
Agreement or the DT Financing Agreements or the consummation of the transactions
contemplated hereby and thereby, including the Merger.
SECTION 3.13. Brokers. Except for Xxxxxxxxx, Xxxxxx & Xxxxxxxx
and Dresdner Kleinwort Xxxxxx, no broker, finder or investment banker is
entitled to any brokerage, finder's or investment banking fee in connection with
the transactions contemplated by this Agreement based upon arrangements made by
or on behalf of DT or any of its Subsidiaries.
SECTION 3.14. Tax Matters. Except as set forth on Schedule
3.15 attached hereto and except to the extent that the failure of the following
representations to be true, whether considered individually or in the aggregate,
would not have a Material Adverse Effect on DT;
(a) All Tax Returns required to be filed by DT or its
Subsidiaries on or prior to the Effective Time have been or will be timely filed
with the appropriate Governmental or Regulatory Authorities and are or will be
correct in all respects, and all Taxes due by DT or its Subsidiaries on or prior
to the Effective Time have been, or will be, timely paid;
(b) The assets of DT do not consist wholly or principally of
immovable property situated within Germany within the meaning of Article
13(2)(b) of the Income Tax Treaty between Germany and the United States.
33
(c) There are no liens (except for statutory liens for current
Taxes not yet due and payable) against any domestic or foreign assets of DT or
any of its Subsidiaries resulting from any unpaid Taxes;
(d) No audit or other proceeding with respect to Taxes due
from DT or any of its Subsidiaries, or any Tax Return of DT or any of its
Subsidiaries, is pending, threatened in writing, or being conducted by any
Governmental or Regulatory Authority;
(e) No extension of the statute of limitations on the
assessment of any Taxes has been granted by DT or any of its Subsidiaries and is
currently in effect; and
(f) Neither DT nor any of its Subsidiaries has taken any
action or knows of any fact that is reasonably likely to (i) prevent or impede
the Merger from qualifying as a reorganization within the meaning of Section
368(a) of the Code, or (ii) cause the stockholders of Voicestream, other than
any such stockholder that would be a "five-percent transferee shareholder" of DT
(within the meaning of U.S. Treasury Regulations Section 1.367(a)-3(c)(5))
following the Merger, to recognize gain pursuant to Section 367(a) of the Code.
(g) DT is not aware of any German withholding taxes that would
be applicable to any Merger Consideration to be received in the Merger by
Voicestream stockholders other than in their capacity as employees of
Voicestream prior to the Effective Time. Except to the extent required under the
Code, or any provision of state, local or non-U.S. (other than German) tax law,
and in the case of withholding or deduction pursuant to German tax law, except
to the extent required solely as a result of a change in law, including, without
limitation, an administrative action by a German taxing authority or change,
amendment to, or clarification of an official position or an official
interpretation, occurring after the date of this Agreement, neither the Escrow
Agent nor DT will deduct or withhold any amount on account of Taxes (other than
stock transfer, stamp taxes, or any other similar Taxes) from the consideration
otherwise payable pursuant to this Agreement. To the extent that amounts are so
withheld by the Escrow Agent or DT, as the case may be, such withholdings shall
be treated for all purposes of this Agreement as having been paid to the
Shareholders in respect of which such deduction and withholding was made by the
Escrow Agent or DT, as the case may be.
SECTION 3.15. Ownership of Securities. Except pursuant to the
Shareholders Agreement, the DT Financing Agreements or as set forth on Schedule
3.16, as of the date hereof, neither DT nor, to DT's Knowledge, any of its
Subsidiaries, beneficially owns, directly or indirectly, or is party to any
agreement, arrangement or understanding for the purpose of acquiring, holding,
voting or disposing of, in each case, shares of capital stock of Voicestream
(other than shares held by DT Benefit Plans). Except as set forth on Schedule
3.16 hereto, DT owns no shares of Voicestream Common Stock which would
constitute Disqualified Shares.
SECTION 3.16. Certain Contracts. All material contracts
required to be filed by DT pursuant to Item 19(b) of Form 20-F and Instruction
B.2 thereto, have been filed as exhibits to, or incorporated by reference in, a
DT SEC Report filed after December 31, 1999.
34
SECTION 3.17. Licenses. DT and each of its Subsidiaries are
the authorized legal holders or otherwise have rights to all material Permits
and licenses and operating rights necessary for the operation of their business
as presently operated, except for such failures as would not reasonably be
expected to have a Material Adverse Effect on DT (collectively, the "DT
LICENSES"). As of the date hereof there is not pending and, to DT's Knowledge,
there is not threatened, any action by or before any Governmental or Regulatory
Authority to revoke, suspend, cancel, rescind or modify in any material respect
any of the DT Licenses which action would reasonably be expected to have a
Material Adverse Effect on DT.
ARTICLE 4
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 4.01. Conduct of Business in the Ordinary Course.
Voicestream covenants and agrees with DT that, between the date hereof and the
Effective Time, except as described on Schedule 4.01 or as otherwise expressly
contemplated hereby, the business of Voicestream and its Subsidiaries shall be
conducted only in, and such entities shall not take any action except in, the
ordinary course of business; and Voicestream for itself and on behalf of its
Subsidiaries agrees with DT to use its commercially reasonable efforts to
preserve substantially intact their business organizations, to keep available
the services of those of their present officers, employees and consultants who
are integral to the operation of their businesses as presently conducted and to
preserve their present relationships with significant customers and suppliers
and with other persons with whom they have significant business relations;
provided, however, that no action by Voicestream or its Subsidiaries with
respect to matters specifically addressed by any other provision of this Section
4.01 or Section 5.15 shall be deemed a breach of this sentence unless such
action would constitute a breach of such other provision. Except as set forth on
Schedule 4.01 or as otherwise expressly contemplated by this Agreement,
Voicestream agrees with DT, on behalf of itself and its Subsidiaries, that they
will not, between the date hereof and the Effective Time directly or indirectly,
do any of the following without the prior written consent of DT:
(a) (i) issue, sell, pledge, dispose of, encumber, authorize,
or propose the issuance, sale, pledge, disposition, encumbrance or authorization
of any shares of capital stock of any class, or any options, warrants,
convertible securities or other rights of any kind to acquire any shares of
capital stock of, or any other ownership interest in, Voicestream or any of its
Subsidiaries, except for (A) the issuance of Voicestream Common Shares upon
exercise of such rights existing on the date hereof in amounts not exceeding the
amounts set forth in Schedule 4.01(a)(i)(A), (B) grants of stock options with
respect to Voicestream Common Shares to employees or directors, provided such
grants shall not exceed 1,500,000 Voicestream Common Shares in the aggregate
and, provided further, that the consummation of the transactions contemplated by
this Agreement will not constitute a change in control with respect to any such
newly granted options, (C) issuances of equity securities in respect of options,
warrants, convertible securities or other rights of any kind to acquire equity
securities of any Person that is the subject of an Acquisition permitted by
Section 5.15, (D) the issuance of securities by a Subsidiary to any Person which
is directly or indirectly wholly owned by Voicestream, (E) liens granted to
secure indebtedness permitted by Section 4.01 or in connection with Acquisitions
35
permitted by Section 5.15, (F) issuances of Voicestream Common Shares upon (1)
conversion of the 2 1/2% Convertible Preferred Stock in accordance with the
terms of such stock as in effect on the date hereof, (2) conversion of the 7%
Convertible Preferred Shares in accordance with the terms of such stock as of
the date hereof, (3) exercise of the Warrants in accordance with the terms of
such Warrants as in effect on the date hereof and/or (4) exercise of the Xxxx
Inlet Partners' exchange rights as in effect on the date hereof; (G) the sale of
shares of capital stock pursuant to the exercise of Voicestream Options if
necessary to effectuate an optionee direction upon exercise or for withholding,
(H) issuance of shares of capital stock under Voicestream's Employee Stock
Purchase Plan which shares are acquired by Voicestream in accordance with clause
(iv)(B); (ii) amend or propose to amend the Certificate of Incorporation or
Bylaws (or other comparable organizational document) or any certificate of
designation of Voicestream, or adopt, amend or propose to amend any stockholder
rights plan or related rights agreement; (iii) split, combine or reclassify any
outstanding shares of Voicestream Common Shares, or declare, set aside or pay
any dividend or distribution payable in cash, stock, property or otherwise with
respect to shares of Voicestream Common Shares; or (iv) redeem, purchase or
otherwise acquire or offer to redeem, purchase or otherwise acquire any shares
of its capital stock, except that Voicestream shall be permitted to acquire
shares of Voicestream Common Shares, from time to time (A) as permitted by or in
accordance with Article IX of Voicestream's certificate of incorporation and (B)
in open market transactions, consistent with past practice and in compliance
with Legal Requirements and the provisions of any applicable employee benefit
plan, program or arrangement, for issuance upon the exercise of options and
other rights granted, and the lapsing of restrictions, under Voicestream's
employee benefit plans, programs and arrangements;
(b) (i) except in connection with Permitted Swaps or
Acquisitions pursuant to Section 5.15, acquire (by merger, consolidation, or
acquisition of stock or assets) any corporation, partnership or other business
organization or division thereof or make or increase any investment in another
entity (other than an entity which is a wholly-owned Subsidiary of Voicestream
as of the date hereof and other than incorporation of a wholly-owned Subsidiary)
other than investments permitted by Schedule 4.01(b); (ii) except in connection
with Permitted Swaps or as approved by the Acquisitions Committee (as defined
below), except in the ordinary course of business and in a manner consistent
with past practice or as may be required by, or in accordance with, law or any
Governmental or Regulatory Authority, including to comply with spectrum
limitations, in order to permit or facilitate the consummation of the
transactions contemplated hereby, sell, pledge, dispose of, or encumber or
authorize or propose the sale, pledge, disposition or encumbrance of any assets
of Voicestream or any of its Subsidiaries, except for Acquisitions pursuant to
Section 5.15; (iii) except in the ordinary course of business and in a manner
consistent with past practice and all Legal Requirements and Permits, authorize
or make capital expenditures in an aggregate amount not to exceed the aggregate
annual amounts set forth in Voicestream's 2000 business plan as provided to DT
during the week of June 26, 2000;
(c) incur indebtedness (incremental to that shown on its
balance sheet as of March 31, 2000) except (i) pursuant to binding commitments
to lend in existence on the date hereof as listed by Schedule 4.01(c), (ii)
pursuant to the DT Financing Agreements, (iii) refinancing of existing
indebtedness, (iv) in connection with Acquisitions (including
36
assumed indebtedness) permitted by Section 5.15, and (v) additional indebtedness
that would be prepayable at the election of Voicestream on or after the Closing
Date, the aggregate prepayment penalty of which does not exceed $25,000,000;
(d) enter into (i) leveraged derivative contracts (defined as contracts
that use a factor to multiply the underlying index exposure), or (ii) other
derivative contracts except for the purpose of hedging known interest rate and
foreign exchange exposures or otherwise reducing Voicestream's cost of
financing; provided, however, that employee stock ownership plans and other
pension and deferred compensation plans of Voicestream may enter into derivative
contracts as part of their ordinary course investment strategy;
(e) take any action with respect to the grant of any severance or
termination pay, or stay, bonus, or other incentive arrangements (otherwise than
pursuant to the Voicestream Benefit Plans and the policies of Voicestream in
effect on the date hereof in the ordinary course of Voicestream's business or as
otherwise expressly permitted under this Agreement or otherwise in the ordinary
course of business and consistent with Voicestream's past practice);
(f) make any payments (except in the ordinary course of business and in
amounts and in a manner consistent with past practice or as otherwise required
by Legal Requirements or the provisions of any Voicestream Benefit Plan) under
any Voicestream Benefit Plan to any director or officer of, or independent
contractor or consultant to, Voicestream or any of its Subsidiaries, adopt or
otherwise materially amend (except for amendments required by Legal
Requirements) any Voicestream Benefit Plan, or enter into or amend any
employment or consulting agreement of the type which would be required to be
disclosed hereunder pursuant to Section 2.11 or grant or establish any new
awards under any such existing Voicestream Benefit Plan (excluding any stock
options granted pursuant to Section 4.01(a)) or agreement (except in the
ordinary course of business and in amounts and in a manner consistent with past
practice and subject to the other provisions of this Section 4.01);
(g) file any amended Tax Returns or settle any Tax audits or other tax
proceedings of Voicestream if the result of such amendment or settlement would
result in an increase of Voicestream tax liability in excess of $15,000,000 or
change in any respect (i) its method of tax accounting or tax practice or (ii)
its accounting policies, methods or procedures, except as required by GAAP,
which in the case of (i) or (ii) would have a Material Adverse Effect on
Voicestream;
(h) take any action which would reasonably be expected to materially
adversely affect or materially delay the ability of any of the Parties to obtain
any Required Regulatory Approval or consummate the transactions contemplated
hereby;
(i) take any action that would be reasonably likely to (i) prevent or
impede the Merger from qualifying as a reorganization within the meaning of
Section 368(a) of the Code or (ii) cause the Stockholders of Voicestream to
recognize gain pursuant to Section 367(a) of the Code;
37
(j) other than pursuant to this Agreement, take any action to cause the
Voicestream Common Shares to cease to be quoted on NASDAQ;
(k) (i) grant new Stock Appreciation Rights, new performance shares,
restricted stock, or other equity based rights (other than stock options granted
pursuant to Section 4.01(a)); (ii) materially modify any actuarial cost method,
assumption or practice used in determining benefit obligations, annual expense
and funding for any Voicestream Benefit Plan, except to the extent required by
GAAP; (iii) materially modify the investment philosophy of the benefit plan
trusts or maintain an asset allocation which is not consistent with such
philosophy, subject to any ERISA fiduciary obligation; (iv) subject to any ERISA
fiduciary obligation, enter into any outsourcing agreement, or any other
material contract relating to the Voicestream Benefit Plans or management of the
benefit plan trusts; (v) offer any new or extend any existing retirement
incentive, "window" or similar benefit program; (vi) grant any ad hoc pension
increase; (vii) establish any new or fund any existing "rabbi" or similar trust
(except in accordance with the current terms of such trust), or enter into any
other arrangement for the purpose of securing non-qualified benefits or deferred
compensation; (viii) adopt or implement any corporate owned life insurance; (ix)
adopt, implement or maintain any "split dollar" life insurance program; or (x)
except as may be required by the terms of any award agreement, accelerate the
vesting or payment of any equity or equity-based award or (xi) materially
increase the compensation payable to any officer or director (other than for
normal compensation increases in the ordinary course of business consistent with
past practice);
(l) agree to enter into any merger, reorganization, share exchange,
business combination or similar transaction pursuant to which the stockholders
of Voicestream will receive any consideration (whether payable in cash,
securities, property or other consideration) in exchange for their Voicestream
Common Shares;
(m) authorize or enter into (i) any material joint venture (other than
Permitted Swaps and other than joint ventures complying with the "designated
entity" rules which are required for the completion of any Acquisition permitted
pursuant to Section 5.15) or (ii) any agreement (other than in the ordinary
course consistent with its past practice in respect of the Xxxx Inlet Joint
Ventures and that does not apply to the business of Voicestream or its
Subsidiaries outside the United States) that has a non-competition provision or
similar operational restriction applicable to, or could be reasonably
anticipated to be applicable to, the business of Voicestream or any of its
Subsidiaries and that is reasonably expected to be materially adverse to DT or
the mobile telecommunication business of DT after the Effective Time; or
(n) authorize or enter into any contract, agreement, commitment or
arrangement with respect to any of the matters prohibited by this Section 4.01.
(o) Notwithstanding anything in this Agreement to the contrary, during
the period of time beginning on the later of the Election Deadline and the fifth
Business Day prior to the Effective Time and extending until and including the
Effective Time, Voicestream shall not take or omit to take any action that could
increase the number of Voicestream Common Shares outstanding on a fully diluted
basis.
38
SECTION 4.02. Conduct of Business by DT. Except as set forth on
Schedule 4.02 hereto or as otherwise expressly contemplated by this Agreement,
DT agrees on behalf of itself and its Subsidiaries that they will not, between
the date hereof and the Effective Time, directly or indirectly, do any of the
following without the prior written consent of Voicestream:
(a) (i) except as may be necessary or required for the purpose of using
or increasing any or all of DT's authorized capital (GENEHMIGTES KAPITAL) or
necessary for the conduct of its business, amend or propose to amend the
Memorandum and Articles of Association (SATZUNG) or Management Board (VORSTAND)
Rules of Procedure (GESCHAFTSORDNUNG) (or other comparable organizational
document) of DT in any manner that would be adverse to Voicestream or its
stockholders; (ii) declare, set aside or pay any dividend or distribution
payable in cash, stock, property or otherwise with respect to shares of DT
capital stock (other than regular annual cash dividends in a manner consistent
with past practice); (iii) repurchase, redeem or otherwise acquire any shares of
its capital stock or any securities convertible, exchangeable or exercisable for
or into shares of its capital stock, except for repurchases, redemptions or
acquisitions not exceeding 10% of the total number of DT Ordinary Shares
outstanding as of the date hereof in the aggregate; or (iv) effect any
reclassification, recapitalization or restructuring or other similar transaction
(other than as permitted in clause (ii) of this Section 4.02(a)) that results in
the direct or indirect receipt by holders of DT Ordinary Shares of any assets,
property or cash in respect of such DT Ordinary Shares.
(b) take any action that would be reasonably likely to (i) prevent or
impede the Merger from qualifying as a reorganization within the meaning of
Section 368(a) of the Code; or (ii) cause the Stockholders of Voicestream to
recognize gain pursuant to Section 367(a) of the Code; or
(c) take any action that would reasonably be likely to (i) materially
adversely affect the ability of the Parties to obtain any Required Regulatory
Approval or to consummate the transactions contemplated hereby, or (ii)
materially delay the ability of any of the Parties to obtain any Required
Regulatory Approval or to consummate the transactions contemplated hereby,
provided, however, that this Section 4.02(c) shall not preclude any acquisitions
by DT or any of its Subsidiaries so long as such acquisitions, individually or
in the aggregate, are not reasonably likely to prevent the consummation of the
Merger.
SECTION 4.03. No Solicitation. (a) From and after the date hereof,
Voicestream shall not, nor shall it permit any of its Subsidiaries to, nor shall
they authorize or instruct any of their respective officers, directors or
employees to, and shall use their reasonable efforts to cause any investment
banker, financial advisor, attorney, accountants or other representatives
retained by them or any of their respective Subsidiaries not to, directly or
indirectly through another person, (i) solicit, initiate or knowingly encourage
(including by way of furnishing information), or knowingly take any other action
designed to facilitate, any Alternative Transaction (as defined below), or (ii)
participate in any substantive discussions or negotiations regarding any
Alternative Transaction; provided, however, that if, at any time prior to the
time the Voicestream Stockholders' Approval is obtained, the Board of Directors
of Voicestream receives an unsolicited bona fide proposal and determines in good
faith that
39
providing information to the Third Party (as defined below), making such
proposal or participating in negotiations or discussions with the Third Party
could be reasonably expected to result in a Voicestream Superior Proposal (as
defined below) and if Voicestream is not in breach of its obligations under this
Section 4.03, Voicestream may, subject to giving DT 48 hours advance written
notice of its intention to do so, (x) furnish information with respect to
Voicestream pursuant to a confidentiality agreement from the Third Party
substantially similar to the Mutual Nondisclosure Agreement between Voicestream
and DT dated as of June 21, 2000 (the "CONFIDENTIALITY AGREEMENT"), and (y)
engage in discussions and negotiations with the persons that made such proposal.
Voicestream shall promptly notify DT orally and in writing of any request for
information or of any proposal in connection with an Alternative Transaction,
the material terms and conditions of such request or proposal and the identity
of the person making such request or proposal. Voicestream will keep DT informed
of the status (including amendments) of such request or proposal on a current
basis. Voicestream shall immediately cease and terminate any existing
solicitations, discussions or negotiations with any persons conducted heretofore
by it or its representatives with respect to the foregoing.
(b) Nothing contained in this Section 4.03 or in Section 5.02 shall
prohibit Voicestream (x) from taking and disclosing to its stockholders a
position contemplated by Rule 14d-9 or Rule 14e-2(a) promulgated under the
Exchange Act, or (y) from making any disclosure to its stockholders if, in the
good faith judgment of the Board of Directors of Voicestream, after receipt of
advice from outside counsel, failure to disclose would result in a reasonable
likelihood that the Board of Directors of Voicestream would breach its duties to
Voicestream's stockholders under applicable law.
(c) For purposes of this Agreement, "ALTERNATIVE TRANSACTION" means a
proposal or intended proposal, regarding any of (i) a transaction or series of
transactions pursuant to which any Person (or group of Persons) other than a
Party and its Subsidiaries (a "THIRD PARTY") acquires or would acquire, directly
or indirectly, beneficial ownership (as defined in Rule 13d-3 under the Exchange
Act) of more than twenty percent (20%) of the outstanding shares of Voicestream,
(ii) any acquisition or proposed acquisition of, or business combination with
Voicestream or any of its Significant Subsidiaries, as applicable, by a merger
or other business combination (including any so-called "merger-of-equals" and
whether or not Voicestream or any of its Significant Subsidiaries, as the case
may be, is the entity surviving any such merger or business combination), other
than any transaction that would be permitted pursuant to Section 5.15 hereof, or
(iii) any other transaction pursuant to which any Third Party acquires or would
acquire, directly or indirectly, control of assets (including for this purpose
the outstanding equity securities of Subsidiaries of Voicestream and any entity
surviving the merger or business combination including any of them) of
Voicestream or any of its Subsidiaries, as the case may be, for consideration
equal to twenty percent (20%) or more of the fair market value of all of the
outstanding shares of Voicestream Common Stock on the date of this Agreement.
SECTION 4.04. Subsequent Financial Statements. Voicestream, prior to
the Effective Time, will timely file with the SEC each Annual Report on Form
10-K, Quarterly Report on Form 10-Q and Current Report on Form 8-K required to
be filed by it under the Exchange Act and the rules and regulations promulgated
thereunder and will promptly deliver to DT copies of each such report filed with
the SEC. DT will timely file with the SEC each Annual
40
Report on Form 20-F and Report on Form 6-K required to be filed by it under the
Exchange Act and the rules and regulations promulgated thereunder and will
promptly deliver to Voicestream copies of each such report filed with the SEC.
As of their respective dates, none of such reports shall contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The respective audited
financial statements and unaudited interim financial statements of each of
Voicestream and DT, as the case may be, included in such reports will fairly
present the financial position of such Party and its Subsidiaries as at the
dates thereof and the results of their operations and cash flows for the periods
then ended in accordance with GAAP (with a reconciliation to GAAP in accordance
with SEC rules in the case of Voicestream) or generally accepted accounting
principles in Germany (in the case of DT) applied on a consistent basis and,
subject, in the case of unaudited interim financial statements, to normal
year-end adjustments and any other adjustments described therein.
SECTION 4.05. Control of Operations. Nothing contained in this
Agreement shall give DT, directly or indirectly, the right to control or direct
Voicestream's operations prior to the Effective Time. Prior to the Effective
Time, Voicestream shall exercise, consistent with the terms and conditions of
this Agreement, complete control and supervision over its respective operations.
ARTICLE 5
ADDITIONAL AGREEMENTS
SECTION 5.01. Voicestream Proxy Statement; the Registration
Statement and the German Listing Prospectus. Each of DT and Voicestream shall
cooperate and promptly prepare and DT shall file with the SEC as soon as
practicable a Registration Statement on Form F-4 (or any successor form) (the
"FORM F-4") under the Securities Act with respect to the DT Ordinary Shares and
the DT Depositary Shares issuable and deliverable pursuant to this Agreement. A
portion of the Form F-4 shall serve as a prospectus with respect to the DT
Ordinary Shares and the DT Depositary Shares issuable and deliverable pursuant
to the terms of this Agreement and as Voicestream's proxy statement with respect
to Voicestream Stockholders' Meeting (the "VOICESTREAM PROXY STATEMENT"). DT
will cause the Form F-4 to comply as to form in all material respects with the
applicable provisions of the Securities Act and the rules and regulations
thereunder and Voicestream will cause the Voicestream Proxy Statement to comply
as to form in all material respects with the applicable provisions of the
Exchange Act and the rules and regulations thereunder. Voicestream and DT shall
use their reasonable best efforts to have the Voicestream Proxy Statement and
Registration Statement declared effective by the SEC under the Securities Act,
and promptly thereafter shall mail to the holders of record of Voicestream
Common Shares, the Voicestream Proxy Statement; provided, however, that
Voicestream shall not mail or otherwise furnish the Voicestream Proxy Statement
to its stockholders unless and until:
(i) it has received notice from the SEC that the
Registration Statement is effective under the Securities Act;
41
(ii) Voicestream shall have received a letter of its
independent accountants, dated a date within two (2) business days
prior to the date of the first mailing of the Voicestream Proxy
Statement, and addressed to Voicestream, in form reasonably
satisfactory to Voicestream and customary in scope for similar "cold
comfort" letters delivered by independent public accountants in
connection with registration statements on Form F-4 with respect to the
financial statements of DT included in the Voicestream Proxy Statement
and the Registration Statement;
(iii) DT shall have received a letter of its independent
accountants, dated a date within two (2) business days prior to the
date of the first mailing of the Voicestream Proxy Statement, and
addressed to DT, in form reasonably satisfactory to DT and customary in
scope for similar "cold comfort" letters delivered by independent
public accountants in connection with registration statements on Form
F-4 with respect to the financial statements of Voicestream included in
the Voicestream Proxy Statement and the Registration Statement.
DT shall use reasonable best efforts to obtain prior to the effective
date of the Form F-4, all necessary state securities law or "Blue Sky" permits
or approvals required to effect the transactions contemplated by this Agreement.
DT will advise Voicestream, promptly after it receives notice, of the time when
the Form F-4 has become effective or any supplement or amendment has been filed,
the issuance of any stop order or the suspension of the qualification of the DT
Depositary Shares or DT Ordinary Shares issuable and deliverable in connection
with the Merger for offering or sale in any jurisdiction.
(b) DT and Voicestream will cooperate in (i) the preparation
of the Voicestream Proxy Statement and the Registration Statement and in having
the Registration Statement declared effective as soon as practicable and (ii)
the preparation and filing of the German Listing Prospectus with the FSE and the
auditor's report with the Commercial Register.
SECTION 5.02. Voicestream Stockholders' Meeting and
Consummation of the Merger. (a) As promptly as practicable after the
Registration Statement is declared effective under the Securities Act,
Voicestream shall duly give notice of, convene and hold a meeting of its
stockholders (the "VOICESTREAM STOCKHOLDERS' MEETING") in accordance with
Delaware Law for the purposes of obtaining the Voicestream Stockholder Approval
and shall, subject to the provisions of Section 5.02(b) hereof, through its
Board of Directors, recommend to its stockholders the approval and adoption of
this Agreement and use its reasonable best efforts to obtain the Voicestream
Stockholder Approval.
(b) Neither the Board of Directors of Voicestream nor any
committee thereof shall (i) except as expressly permitted by this Section
5.02(b), withdraw, qualify or modify, or propose publicly to withdraw, qualify
or modify, in a manner adverse to DT, the approval or recommendation of such
Board of Directors or such committee of this Agreement, the Merger and the other
transactions contemplated hereby, (ii) approve or recommend, or propose publicly
to approve or recommend, any Alternative Transaction, or (iii) cause Voicestream
to enter into any letter of intent, agreement in principle, acquisition
agreement or other similar agreement for any Alternative Transaction (each, a
"VOICESTREAM ACQUISITION AGREEMENT"). Notwithstanding
42
the foregoing, in the event that prior to the time the Voicestream Stockholder
Approval is obtained, Voicestream receives a Superior Proposal (as defined
below), the Board of Directors of Voicestream may (subject to this and the
following sentences) (A) inform Voicestream stockholders that it no longer
recommends Voicestream Stockholder Approval (a "SUBSEQUENT DETERMINATION"), but
only at a time that is after the second Business Day following DT's receipt of
written notice advising DT that the Board of Directors of Voicestream has
received a Superior Proposal specifying the material terms and conditions of
such Superior Proposal (and including a copy or draft copy thereof with all
accompanying documentation or draft documentation, if in writing), identifying
the Person making such Superior Proposal and stating that it intends to make a
Subsequent Determination. After providing such notice, Voicestream shall provide
a reasonable opportunity to DT to make such adjustments in the terms and
conditions of this Agreement as would enable Voicestream to proceed with its
recommendation to its stockholders without a Subsequent Determination; provided,
however, that any such adjustment shall be at the discretion of Voicestream and
DT at the time. For purposes of this Agreement, a "SUPERIOR PROPOSAL" means any
proposal (on its most recently amended or modified terms, if amended or
modified) made by a Third Party to enter into an Alternative Transaction which
the Board of Directors of Voicestream determines in its good faith judgment to
be more favorable to Voicestream's stockholders than the transactions
contemplated by this Agreement. Voicestream shall submit this Agreement to its
stockholders at the Voicestream Stockholders' Meeting even if the Board of
Directors of Voicestream shall have made a Subsequent Determination.
SECTION 5.03. Xxxx Inlet. Voicestream shall not agree to any
modification of the existing exchange rights agreements relating to the Xxxx
Inlet Joint Ventures that would (i) prior to the Effective Date, increase the
number of Voicestream Common Shares issuable to the Xxxx Inlet Joint Ventures
upon exercise of their exchange rights in excess of the maximum number of shares
set forth on Schedule 2.03(f) on and after the Effective Date, increase the
number of DT Ordinary Shares or DT Depositary Shares issuable to the Xxxx Inlet
Joint Ventures upon exercise of their exchange rights.
SECTION 5.04. Notification of Certain Matters. Each of Voicestream and
DT shall give prompt notice to each other of the following:
(a) the occurrence or nonoccurrence of any event whose occurrence or
nonoccurrence would be likely to cause either (i) any representation or warranty
contained in this Agreement of such Party to be untrue, inaccurate or incomplete
in any material respect at any time from the date hereof to the Effective Time
if such failure to be true, accurate or complete would cause the condition set
forth in Section 6.02(a) or 6.03(a) not to be satisfied, in which case the Party
required to give prompt notice thereof shall promptly update and deliver to the
others any Schedules hereto which require an update to remain true, accurate and
correct or (ii) directly or indirectly, any Material Adverse Effect on such
Party;
(b) any material failure of such Party, or any officer, director,
employee or agent of any thereof, to comply with or satisfy any covenant or
agreement to be complied with or satisfied by it hereunder (if such failure
would cause the condition set forth in Section 6.02(b) or 6.03(b) not to be
satisfied);
43
(c) any facts relating to such Party which would make it necessary or
advisable to amend the Voicestream Proxy Statement or the Registration Statement
in order to make the statements therein not misleading or to comply with
applicable law; provided, however, that the delivery of any notice pursuant to
this Section 5.04 shall not limit or otherwise affect the remedies available
hereunder to the Parties receiving such notice; and
(d) Promptly upon receipt by Voicestream from any Voicestream
stockholder who is a party to the Stockholder Agreements of a proxy card sent to
the Voicestream stockholders with the Voicestream Proxy Statement and in
accordance with Section 5 of the Stockholders Agreements, but in no event later
than the second Business Day following such receipt or, if such receipt is on or
after the fifth Business Day prior to the Closing, then on the date of such
receipt, Voicestream shall notify DT orally of its receipt and provide DT with
copy of such proxy card.
(e) Voicestream will not settle any claim with respect to Section 1.19
and 1.20 the Tax Sharing Agreement (the "355 Provisions") or amend, modify or
terminate the 355 provisions without the prior written consent of DT.
Voicestream will promptly provide DT with any notice of indemnification claim or
other notice of communication with respect to or under the Tax Sharing Agreement
with respect to the 355 Provisions. Voicestream will use its reasonable best
efforts to permit DT to participate in the negotiation, resolution, settlement
and contest of any claim or tax refund related to any items for which
Voicestream has sole indemnification responsibility under the Section 355
Provisions.
SECTION 5.05. Access to Information. (a) Each of Voicestream and DT
shall, and shall cause its respective Subsidiaries, and its and their officers,
directors, employees, auditors, counsel and agents to afford the officers,
employees, auditors, counsel and agents of the other Parties reasonable access
during regular business hours to such Party's and its Subsidiaries' officers,
employees, auditors, counsel, agents, properties, offices and other facilities
and to all of their respective books and records, and shall furnish the other
with all financial, operating and other data and information as such other
Parties may reasonably request. Notwithstanding the foregoing, neither
Voicestream nor DT shall be required to provide any information which it
reasonably believes it may not provide to the other Party by reason of any Legal
Requirements or other applicable law, rules or regulations, which constitutes
information protected by attorney/client privilege, or which it or any of its
Subsidiaries is required to keep confidential by reason of contract, agreement
or understanding with third parties.
(b) Each of Voicestream and DT agrees that all non-public, confidential
information so received from any other Party shall be deemed received pursuant
to the Confidentiality Agreement and shall cause its Subsidiaries and each of
its and their respective officers, directors, employees, financial advisors,
attorneys, accountants, consultants and agents ("PARTY REPRESENTATIVES") to,
comply with the provisions of the Confidentiality Agreement with respect to such
information, and the provisions of the Confidentiality Agreement are hereby
incorporated herein by reference with the same effect as if fully set forth
herein.
SECTION 5.06. Public Announcements. Voicestream and DT shall develop a
joint communications plan and each Party shall, except as otherwise required by
any Legal
44
Requirement, use its reasonable best efforts to ensure that all press releases
and other public statements with respect to the transactions contemplated hereby
shall be consistent with such joint communications plan or, to the extent
inconsistent therewith, shall have received the prior written approval of the
other Parties.
SECTION 5.07. Cooperation. (a) Upon the terms and subject to the
conditions hereof, each of Voicestream and DT agrees, and agrees to cooperate
with each other, (w) to take or cause to be taken all actions and to do or cause
to be done all things necessary, proper or advisable to consummate the
transactions contemplated by this Agreement (including all actions expected to
be taken after the Effective Time in connection with the actions contemplated by
Section 1.04), (x) to obtain in a timely manner all necessary Permits or
waivers, from, approvals or consents of, or declarations, registrations or
filings with, and all expirations of waiting periods imposed by, any
Governmental or Regulatory Authority which are necessary for the consummation of
the transactions contemplated hereby, (y) to promptly (1) prepare and file a
Premerger Notification in accordance with the HSR Act, comply with any requests
for additional information, and obtain termination of the waiting period
thereunder as promptly as practicable, (2) prepare and file all required
notifications, if any, under Council Regulation (EEC) No. 4064/89, and obtain
the approval of the Council of the European Union to the transactions
contemplated by this Agreement, if required, and (3) file a notice pursuant to
Section 721 of Exon-Xxxxxx, and (z) to take all actions within its control
necessary to obtain any Required Regulatory Approvals necessary to consummate
the transactions contemplated hereby; provided, however, that nothing in this
sentence of Section 5.07(a) shall require DT or Voicestream to take any action
that would result in a Burdensome Condition;
(b) Each of Voicestream and DT agrees to cooperate with each other (1)
to respond to inquiries from, and to make presentations to, Governmental or
Regulatory Authorities; and (2) to promptly inform the others of any material
oral or written communication received by such Party from, or given by such
Party to, any Governmental or Regulatory Authority, and of any material
communication received or given in connection with any proceeding by a private
Party, in each case regarding the relevant transactions. Voicestream and DT
agree to consult with each other in advance of any meeting or conference with,
or of making any filing or other written submission to, any such Governmental or
Regulatory Authority, and to the extent permitted by the applicable Governmental
or Regulatory Authority, give the others the opportunity to attend and
participate in such meetings and conferences, or to review and approve any such
filing or other written submission, in each case regarding the relevant
transactions.
(c) Each of Voicestream and DT shall cooperate with each other to
eliminate or reduce to the extent possible any illegality, forfeiture or loss on
the part of DT, Voicestream or their respective Subsidiaries that may result
from the consummation of the transactions contemplated hereby.
(d) Each of Voicestream and DT hereby agrees to cooperate with the
other party, and to cause its officers, directors and independent accountants to
cooperate with the other party, to do or cause to be done all things reasonably
requested by the other party (including, without limitation, providing such
information as may reasonably be requested to permit pro forma financial
statements after giving effect to the Merger to be produced) in order to
facilitate any
45
financing, acquisition or capital markets transaction to be entered into by
either Party after the date hereof.
(e) Voicestream hereby agrees to use reasonable best efforts, in
consultation with DT, to obtain all waivers and consents that may be required
from any parties to any Voicestream Contract, including, without limitation,
from lenders and other financing sources of Voicestream and its Subsidiaries, in
connection with this Agreement, the Stockholders Agreements, the DT Financing
Agreements and the transactions contemplated hereby and thereby.
(f) Voicestream hereby agrees, from the date hereof until the Closing,
to take any and all actions that are required to be taken prior to the Effective
Time pursuant to any Voicestream Contract or other agreement, including, without
limitation, any debt instruments, including credit agreements and indentures, to
which Voicestream or any of its Significant Subsidiaries or any Xxxx Inlet Joint
Venture is a party and to make any offer to purchase any securities required to
be made, as a result of the execution and delivery of this Agreement, the
Stockholders Agreements and the DT Financing Agreements.
SECTION 5.08. Indemnification, Directors' and Officers' Insurance. (a)
For a period of six (6) years after the Effective Time, the Surviving
Corporation (i) shall maintain in effect the current provisions regarding
indemnification of officers and directors contained in the charter and bylaws of
Voicestream and each of its Subsidiaries and any directors, officers or
employees indemnification agreements of Voicestream and its Subsidiaries, (ii)
shall maintain in effect the current policies of directors' and officers'
liability insurance and fiduciary liability insurance maintained by Voicestream
("D&O INSURANCE") (provided that the Surviving Corporation may substitute
therefor policies of at least the same coverage and amounts containing terms and
conditions which are, in the aggregate, no less advantageous to the insured),
with respect to claims arising from facts or events which occurred on or before
the Effective Time, provided, however, if the existing D&O Insurance expires, is
terminated or cancelled, or if the annual premium therefor is increased to an
amount in excess of 250% of the last annual premium paid prior to the date
hereof, in each case during such six year period, the Surviving Corporation will
use its best efforts to obtain D&O Insurance in an amount and scope as great as
can be obtained for the remainder of such period for a premium not in excess (on
an annualized basis) of 250% of the Current Premium. and (iii) shall indemnify
the directors and officers of Voicestream to the fullest extent to which
Voicestream is permitted to indemnify such officers and directors under their
respective charters and bylaws and applicable law.
(b) Without limiting Section 5.08(a), after the Effective Time, each of
DT and the Surviving Corporation shall, to the fullest extent permitted under
applicable law, indemnify and hold harmless, each present and former director,
officer, employee and agent of Voicestream or any of its Subsidiaries (each,
together with such person's heirs, executors or administrators, an "INDEMNIFIED
PARTY" and collectively, the "INDEMNIFIED PARTIES") against any costs or
expenses (including attorneys' fees), judgments, fines, losses, claims, damages,
liabilities and amounts paid in settlement in connection with any actual or
threatened claim, action, suit, proceeding or investigation, whether civil,
criminal, administrative or investigative, arising out of, relating to or in
connection with any action or omission occurring or alleged to occur prior to
the Effective Time (including, without limitation, acts or omissions in
connection with such persons serving as
46
an officer, director or other fiduciary in any entity if such service was at the
request or for the benefit of Voicestream) or arising out of or pertaining to
this Agreement, the Merger and the other transactions contemplated by this
Agreement and the DT Financing Agreements. In the event of any such actual or
threatened claim, action, suit, proceeding or investigation (whether arising
before or after the Effective Time), (i) DT and the Surviving Corporation, as
the case may be, shall pay the reasonable fees and out of pocket expenses of
counsel selected by the Indemnified Parties, which counsel shall be reasonably
satisfactory to DT and the Surviving Corporation, promptly after statements
therefor are received and shall pay all other reasonable out of pocket expenses
in advance of the final disposition of such action, (ii) DT and the Surviving
Corporation will cooperate and use all reasonable efforts to assist in the
vigorous defense of any such matter, and (iii) to the extent any determination
is required to be made with respect to whether an Indemnified Party's conduct
complies with the standards set forth under Delaware Law and DT's or the
Surviving Corporation's respective articles of incorporation or bylaws, such
determination shall be made by independent legal counsel acceptable to DT or the
Surviving Corporation, as the case may be, and the Indemnified Party; provided,
however, that neither DT nor the Surviving Corporation shall be liable for any
settlement effected without its written consent (which consent shall not be
unreasonably withheld). The Indemnified Parties as a group may not retain more
than one law firm to represent them with respect to each matter unless there is,
under applicable standards of professional conduct, a conflict on any
significant issue between the positions of any two or more Indemnified Parties.
SECTION 5.09. Stock Exchange Listings/Establishment of DT Depositary
Shares. DT will take all steps necessary for the listing and authorization for
listing on the FSE and the NYSE (subject to official notice of issuance) of the
DT Ordinary Shares and the DT Depositary Shares, respectively, to be issued
pursuant to the Merger.
SECTION 5.10. No Shelf Registration. DT shall not be required to amend
or maintain the effectiveness of the Registration Statement for the purpose of
permitting resale of the shares of DT received pursuant hereto by the Persons
who may be deemed to be "affiliates" of Voicestream within the meaning of Rule
145 promulgated under the Securities Act. The DT Ordinary Shares issuable upon
exercise of options pursuant to Section 1.05 hereof shall be registered under
the Securities Act and such registration shall be effective at the time of
issuance.
SECTION 5.11. Affiliates. Voicestream (i) shall deliver to DT not later
than the 30th day after the date of this Agreement a list of all persons who
are, as of the date hereof its Affiliates for purposes of Rule 145 under the
Securities Act, and (ii) shall use its reasonable best efforts to cause each
person who is identified as its "affiliate" on Schedule 5.11 to deliver to DT as
promptly as practicable but in no event later than the Closing Date, a signed
agreement substantially in the form of Exhibit A. Voicestream shall notify DT
from time to time of any other persons who then are such an "affiliate" of
Voicestream and use its reasonable best efforts to cause each additional person
who is identified as such an "affiliate" to execute a signed agreement as set
forth in this Section 5.11.
SECTION 5.12. Blue Sky. DT will use its reasonable best efforts to
obtain prior to the Effective Time all necessary state securities or "blue sky"
Permits and approvals or similar foreign approvals required to permit the
distribution of the DT Depositary Shares and the DT
47
Ordinary Shares to be issued in accordance with the provisions of this
Agreement, and Voicestream will provide any reasonably requested cooperation in
connection therewith.
SECTION 5.13. Tax-Free Merger. Each of the Parties will use its
reasonable best efforts, and each agrees to cooperate with the other Parties and
provide one another with such documentation, information and materials, as may
be reasonably necessary, proper or advisable, to (i) cause the Merger to qualify
as a reorganization within the meaning of Section 368(a) of the Code and (ii)
avoid gain recognition to the Stockholders of Voicestream pursuant to Section
367(a) of the Code.
SECTION 5.14. Interim Dividend Policy. Voicestream shall not, without
the prior written consent of DT, declare, set aside or pay any dividend or
distribution payable in cash, stock, property or otherwise with respect to
shares of Voicestream Common Stock.
SECTION 5.15. Permitted Acquisitions. (a) Voicestream and its
Subsidiaries may only engage in an acquisition transaction taking the form of a
stock acquisition, asset acquisition, merger or similar type or form of
transaction, including, without limitation, any transaction pursuant to which
Voicestream would propose to acquire, directly or indirectly, any additional FCC
licenses, and may only make investments in other Persons (collectively,
"ACQUISITIONS") subject to the provisions of this Section 5.15 and subject to
the provisions of Sections 4.01(h), (i) and (m). Subject to Sections 4.01(h),
(i) and (m), Voicestream and its Subsidiaries may engage in (A) Acquisitions in
accordance with Section 5.15(b), (B) Acquisitions without DT's consent, provided
that the aggregate value of the consideration payable by Voicestream and any of
its Subsidiaries in respect of any Acquisition pursuant to this clause (B) shall
not exceed $500 million (including assumption of debt) and in respect of all
Acquisitions pursuant to this clause (B) shall not exceed in the aggregate $750
million (including assumptions of debt), and, provided further, that, without
consent of the Acquisitions Committee (as hereinafter defined), none of such
Acquisitions include shares of Voicestream or any of its Subsidiaries as
consideration for the transaction, and (C) Acquisitions permitted (or deemed
permitted) by the Acquisitions Committee. The Acquisitions Committee shall
consist of the individuals listed on Schedule 5.15(C). If Voicestream desires to
make or engage in an Acquisition requiring consent of the Acquisitions
Committee, it shall notify (a "PROPOSED ACQUISITION NOTICE") the Acquisitions
Committee in writing (care of the office of the Chairman of the Acquisitions
Committee) of such proposed Acquisition (a "PROPOSED ACQUISITION"). The Proposed
Acquisition Notice shall include or be preceded by a copy of the material
information upon which senior management of Voicestream relied in determining
that Voicestream should pursue the Proposed Acquisition. Unless the Acquisitions
Committee denies permission in writing (in care of the office of Voicestream's
Chief Executive Officer) which is received within five (5) Business Days of
receipt of the Proposed Acquisition Notice, the Proposed Acquisition shall be
deemed to have been consented to and permitted by this Section 5.15 and for all
purposes under this Agreement (and shall not count toward the individual or
aggregate dollar limitation set forth in clause (B) of this Section 5.15(a) nor
shall any securities issued in connection therewith be deemed to breach any
restriction contained in Section 4.01. DT agrees and acknowledges that if the
Acquisitions Committee denies Voicestream permission to proceed with any
Proposed Acquisition, thereafter any officer, director, stockholder or Affiliate
of Voicestream (other than any of Voicestream's Subsidiaries), or any group or
combination of
48
them, may pursue or engage in such Proposed Acquisition for his, its or their
own account. The Acquisitions Committee shall also, from time to time, consider
the capital structure of Voicestream.
(b) In the event that Voicestream determines to participate in any
auction of spectrum or airwave rights or licenses conducted during the period
from the date hereof until the Effective Time or the termination of this
Agreement (an "AUCTION"), then management of Voicestream shall work with the
Acquisitions Committee to develop, not later than the tenth Business Day prior
to the date the short form application related to such Auction is due, a
schedule (a "BID SCHEDULE") of maximum amounts that Voicestream shall be
permitted to bid in such Auction, which shall set forth both a maximum bid per
license or market (as applicable), and an aggregate maximum for the entire
Auction. In the event that, in the course of an Auction, Voicestream desires to
bid in excess of the maximum bid permitted in the Bid Schedule for any market or
license, as applicable, or the maximum aggregate of all bids, Voicestream may do
so only with the consent of any one of the members of the Acquisitions Committee
(which consent may be sought and/or granted by telephone). Unless any of the
members of the Acquisitions Committee denies such request to exceed such maximum
bid (a "PROPOSED BID INCREASE") within 24 hours of the time such request shall
have been made, DT shall be deemed to have consented to such request. DT hereby
agrees and acknowledges that in the event that Voicestream and the Acquisitions
Committee fail to agree upon a Bid Schedule prior to the tenth Business Day
prior to the schedule commencement of any Auction, thereafter any officer,
director, stockholder or Affiliate of Voicestream (other than any of
Voicestream's Subsidiaries), or any group or combination of them, may
participate in such Auction and acquire rights or licenses pursuant thereto for
his, its or their own account.
SECTION 5.16. Reasonable Best Efforts. Each of Voicestream and DT shall
use its reasonable best efforts to obtain the opinions referred to in Section
6.02(d) and the delivery of the executed Representation Letters in the forms set
forth in Exhibits D and E hereto.
SECTION 5.17. Certain Matters. After the Effective Time, DT will take
the actions set forth in Schedule 5.17.
SECTION 5.18. Takeover Laws. Subject to Section 5.02, no Party shall
take any action that would cause the transactions contemplated by this Agreement
or the Stockholders Agreement to be subject to requirements imposed by any
Takeover Laws (including any such laws or regulations applicable to DT under
German Legal Requirements or the Legal Requirements of the FSE) and each of them
shall take all necessary steps within its control to exempt (or ensure the
continued exemption of), or minimize the effect on, the transactions
contemplated by this Agreement and the Stockholders Agreement from, or if
necessary challenge the validity or applicability of, any applicable Takeover
Law, as now or hereafter in effect, including, without limitation, Section 203
of the Delaware Law or any other Takeover Laws that purport to apply to this
Agreement or the Stockholders Agreement or the transactions contemplated hereby
or thereby.
SECTION 5.19. Employee Benefits. (a) From and after the Effective Time,
DT shall cause the Surviving Corporation or its successor to honor all
Voicestream employee benefit
49
plans and compensation arrangements and agreements in accordance with their
terms as in effect immediately before the Effective Time, subject to any
amendment or termination thereof that may be permitted by such terms. For a
period of not less than two years following the Effective Time, DT shall cause
to be provided, to current and former employees of Voicestream and its
Subsidiaries (the "VOICESTREAM EMPLOYEES") compensation and employee benefits
(it being understood that discretionary equity and equity based awards will
remain discretionary) that are, in the aggregate, not less favorable than those
provided to Voicestream Employees immediately before the Effective Time.
(b) For purposes of vesting, eligibility to participate and level of
benefits (but not benefit accrual under pension or similar plans) under the
employee benefit plans of DT and its Affiliates providing benefits to any
Voicestream Employees after the Effective Time (the "NEW PLANS"), each
Voicestream Employee shall be credited with his or her years of service with
Voicestream and its Affiliates before the Effective Time, to the same extent as
such Voicestream Employee was entitled, before the Effective Time, to credit for
such service under any similar Voicestream Employee Benefit Plans in which such
Voicestream Employee participated or was eligible to participate immediately
prior to the Effective Time, provided, that the foregoing shall not apply to the
extent that its application would result in a duplication of benefits or for
newly established plans and programs for which prior service of DT employees is
not taken into account. In addition, and without limiting the generality of the
foregoing: (i) each Voicestream Employee shall be immediately eligible to
participate, without any waiting time, in any and all New Plans to the extent
coverage under such New Plan replaces coverage under a comparable Voicestream
employee benefit plan or compensation arrangement or agreements in which such
Voicestream Employee participated immediately before the consummation of the
Merger (such plans, collectively, the "OLD PLANS"); and (ii) for purposes of
each New Plan providing medical, dental, pharmaceutical and/or vision benefits
to any Voicestream Employee, DT shall cause all pre-existing condition
exclusions and actively-at-work requirements of such New Plan to be waived for
such employee and his or her covered dependents, unless such conditions would
not have been waived under the comparable plans of Voicestream or its
subsidiaries in which such employee participated immediately prior to the
Effective Time and DT shall cause any eligible expenses incurred by such
employee and his or her covered dependents during the portion of the plan year
of the Old Plan ending on the date such employee's participation in the
corresponding New Plan begins to be taken into account under such New Plan for
purposes of satisfying all deductible, coinsurance and maximum out-of-pocket
requirements applicable to such employee and his or her covered dependents for
the applicable plan year as if such amounts had been paid in accordance with
such New Plan.
(c) DT hereby acknowledges and agrees that the transactions
contemplated hereby will constitute a Change of Control for all purposes under
the applicable Voicestream Employee Benefit Plans listed on Schedule 2.11(g).
(d) Voicestream and DT shall, during the sixty-day period following the
date hereof, seek to develop a mutually acceptable retention plan for senior
management employees.
(e) For a period of at least two years following the Effective Time, DT
shall continue and cause to be honored Voicestream's severance policy described
in Schedule 4.01(e)
50
as in effect prior to the Effective Time without any amendments adverse to
Voicestream Employees.
SECTION 5.20. Certain Employment Matters. Prior to the Effective Time,
DT and Voicestream shall take all such steps as may be required to cause the
transactions contemplated by this Agreement, including any dispositions of
Voicestream Common Shares (including derivative securities with respect to the
Voicestream Common Shares) and acquisitions of DT Ordinary Shares (including
derivative securities with respect to DT Ordinary Shares) by each Person who is
or will be subject to the reporting requirements of Section 16(a) of the
Exchange Act with respect to the Voicestream or DT, as the case may be, to be
exempt under Rule 16b-3 promulgated under the Exchange Act.
ARTICLE 6
CLOSING CONDITIONS
SECTION 6.01. Conditions to Each Party's Obligation to Effect the
Merger. The respective obligations of Voicestream and DT to consummate the
Merger shall be subject to the fulfillment or (to the extent permitted by
applicable law) written waiver prior to the Effective Time of the following
conditions:
(a) Stockholder Approval. The Voicestream Stockholder Approval shall
have been obtained.
(b) Legality. No federal, state or foreign statute, rule, regulation,
executive order, decree or injunction shall have been enacted, entered,
promulgated or enforced by any Governmental or Regulatory Authority which is in
effect and has the effect of making the Merger illegal or otherwise prohibiting
the consummation of the Merger.
(c) Required Regulatory Approvals. Any waiting period applicable to the
consummation of the Merger under the HSR Act shall have expired or been
terminated; to the extent required, the Commission of the European Union shall
have approved the Merger under Regulation (EEC) No. 4064/89 of the Council of
the European Union, or such approval shall have been deemed to have been
granted; the review and investigation under Exon-Xxxxxx shall have been
terminated and the President shall have taken no action authorized thereunder;
and any Required Regulatory Approval of the FCC shall have been received and
shall be in full force and effect; provided that the conditions contained in
this paragraph (c) shall not be deemed satisfied as to DT or Voicestream, if any
such consents or authorizations shall contain any conditions (collectively,
"BURDENSOME CONDITIONS") that, individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect on DT or the mobile
telecommunications business of DT, in each case after giving effect to the
transactions contemplated hereby and any other acquisition in the mobile
telecommunication industry which is entered into or consummated by DT or any of
its Subsidiaries after the date hereof.
(d) Registration Statement Effective. The Registration Statement shall
have become effective prior to the mailing by Voicestream of the Voicestream
Proxy Statement to its
51
stockholders, no stop order suspending the effectiveness of the Registration
Statement shall then be in effect, and no proceedings for that purpose shall
then be threatened by the SEC or shall have been initiated by the SEC and not
concluded or withdrawn.
(e) Stock Exchange Listings. All steps necessary for the listing of the
DT Ordinary Shares to be issued pursuant to the Merger on the FSE shall have
been taken and the DT Depositary Shares to be issued pursuant to the Merger
shall have been authorized for listing on the NYSE, subject to official notice
of issuance.
SECTION 6.02. Conditions to the Obligations of Voicestream. The
obligations of Voicestream to consummate the Merger are also subject to the
fulfillment or written waiver by Voicestream, prior to the Effective Time, of
each of the following conditions:
(a) Representations and Warranties. The representation and warranty of
DT set forth in Section 3.07(a) of this Agreement shall have been true and
correct on the date hereof and on and as of the Closing Date as though made on
the Closing Date; and the other representations and warranties of DT set forth
in this Agreement shall have been true and correct on the date hereof and, on
and as of the Closing Date as though made on the Closing Date (except to the
extent that any representation or warranty expressly speaks as of an earlier
date, in which case it shall be true and correct as of such date) except (i) for
changes permitted under Section 4.02 or otherwise contemplated by this
Agreement, and (ii) for such failures to be true and correct which in the
aggregate would not reasonably be expected to result in a Material Adverse
Effect on DT.
(b) Agreements and Covenants. DT shall have performed or complied with
all agreements and covenants required by this Agreement to be performed or
complied with by it on or before the Effective Time; provided, however, that for
purposes of this Section 6.02(b) only, such agreements and covenants shall be
deemed to have been complied with unless the failure or failures of such
agreements and covenants to have been complied with, individually or in the
aggregate, results or would reasonably be expected to result in a Material
Adverse Effect on DT or on Voicestream shareholders.
(c) Certificates. Voicestream shall have received a certificate of an
executive officer of DT to the effect set forth in subparagraphs (a) and (b)
above.
(d) Tax Opinion. Voicestream shall have received an opinion of Xxxxx,
Day, Xxxxxx & Xxxxx ("XXXXX DAY") and/or Wachtell, Lipton, Xxxxx & Xxxx
("XXXXXXXX XXXXXX") dated as of the Closing Date substantially to the effect
that, on the basis of the facts, representations and assumptions set forth or
referred to in such opinion, for U.S. federal income tax purposes, the Merger
(i) will qualify as a reorganization within the meaning of Section 368(a) of the
Code and (ii) each transfer of property to DT by a stockholder of Voicestream
pursuant to the Merger will not be subject to Section 367(a)(1) of the Code. In
rendering such opinion, Xxxxx Day and/or Wachtell Lipton may require and shall
be entitled to rely upon customary representations of Voicestream and DT,
including representations substantially in the form of Exhibits D and E,
respectively. The opinion set forth in clause (ii) may assume that any
stockholder who is a "five-percent transferee shareholder" with respect to DT
within the meaning
52
of U.S. Treasury Regulations Section 1.367(a)-3(c)(5)(ii) will file the
agreement described in U.S. Treasury Regulations Section
1.3.67(a)-3(c)(1)(iii)(B).
SECTION 6.03. Conditions to the Obligations of DT. The obligations of
DT to consummate the Merger are also subject to the fulfillment or written
waiver by DT, prior to the Effective Time, of each of the following conditions:
(a) Representations and Warranties. The representation and warranty of
Voicestream set forth in Section 2.07(a) of this Agreement shall have been true
and correct on the date hereof and on and as of the Closing Date as though made
on the Closing Date; and the other representations and warranties of Voicestream
set forth in this Agreement shall have been true and correct on the date hereof
and on and as of the Closing Date as though made on the Closing Date (except to
the extent that any representation or warranty expressly speaks as of an earlier
date, in which case it shall be true and correct as of such date) except (i) for
changes permitted under Section 4.01 hereof or otherwise contemplated by this
Agreement, and (ii) for such failures to be true and correct which in the
aggregate would not reasonably be expected to result in a Material Adverse
Effect on Voicestream.
(b) Agreements and Covenants. Voicestream shall have performed or
complied with all agreements and covenants required by this Agreement to be
performed or complied with by it on or before the Effective Time; provided,
however, that for purposes of this Section 6.03(b) only, such agreements and
covenants shall be deemed to have been complied with unless the failure or
failures of such agreements and covenants to have been complied with
individually or in the aggregate, results or would reasonably be expected to
result in a Material Adverse Effect on DT or the mobile telecommunications
business of DT, in each case after giving effect to the transactions
contemplated hereby and any other acquisition in the mobile telecommunications
industry which is entered into or consummated by DT or any of its Subsidiaries
after the date hereof.
(c) Certificates. DT shall have received a certificate of an executive
officer of Voicestream to the effect set forth in subparagraphs (a) and (b)
above.
ARTICLE 7
TERMINATION, AMENDMENT AND WAIVER
SECTION 7.01. Termination. This Agreement may be terminated at any time
before the Effective Time, in each case as authorized by the Board of Directors
of Voicestream or the Management Board (VORSTAND) of DT:
(a) By mutual written consent of each of Voicestream and DT;
(b) By Voicestream, if the Merger shall not have been consummated on or
before September 30, 2001 (the "VOICESTREAM TERMINATION DATE") or by DT if the
Merger shall not have been consummated on or before December 31, 2001 (the "DT
TERMINATION DATE"); provided, however, that the right to terminate this
Agreement under this Section 7.01(b) shall not
53
be available to any Party whose failure to fulfill any obligation under this
Agreement has been the cause of, or resulted in, the failure of the Effective
Time to occur on or before the relevant Termination Date;
(c) By either Voicestream or DT, if (i) any Governmental or Regulatory
Authority shall have issued an order, decree or ruling or taken any other action
(which order, decree or ruling Voicestream and DT shall use its reasonable best
efforts to lift), in each case permanently restraining, enjoining or otherwise
prohibiting the Merger, or (ii) in connection with the grant of any Required
Regulatory Approval relating to the Merger, a Burdensome Condition shall have
been imposed, and in the case of either clause (i) or (ii), such order, decree,
ruling, Burdensome Condition or other action shall have become final and
nonappealable;
(d) By Voicestream, (A) if DT shall have breached or failed to perform
in any material respect any of its representations, warranties, covenants or
other agreements contained in this Agreement, which breach or failure to perform
(1) is incapable of being cured by DT prior to the Voicestream Termination Date,
or, if capable of being cured, is not cured by DT within 30 days after written
notice thereof shall have been received by DT from Voicestream, and (2) renders
any condition under Section 6.01 or 6.02 incapable of being satisfied prior to
the Voicestream Termination Date, or (B) if a condition under Section 6.01 or
6.02 to Voicestream's obligations hereunder is or becomes incapable of being
satisfied prior to the Voicestream Termination Date;
(e) By DT, (A) if Voicestream shall have breached or failed to perform
in any material respect any of its representations, warranties, covenants or
other agreements contained in this Agreement, which breach or failure to perform
(1) is incapable of being cured by Voicestream prior to the DT Termination Date,
or, if capable of being cured, is not cured by Voicestream within 30 days after
written notice thereof shall have been received by Voicestream from DT, and (2)
renders any condition under Section 6.01 or 6.03 incapable of being satisfied
prior to the DT Termination Date, or (B) if a condition under Section 6.01 or
6.03 to DT's obligations hereunder is or becomes incapable of being satisfied
prior to the DT Termination Date;
(f) By Voicestream or DT, respectively, at any time that is not less
than 15 days after any federal, state or foreign statute, rule, regulation,
executive order, decree or injunction shall have been enacted, entered,
promulgated or enforced by any Governmental or Regulatory Authority (other than,
for purposes of this paragraph only, any court of law or equity) and that has
the effect of making the condition set forth in Section 6.01(b) or the condition
set forth in Section 6.01(c) incapable of being satisfied by the Parties prior
to, in the case of termination by Voicestream, the Voicestream Termination Date
or, in the case of termination by DT, the DT Termination Date, respectively;
(g) By either Voicestream or DT, if the Voicestream Stockholder
Approval shall fail to have been obtained at a duly held stockholders meeting of
Voicestream, including any adjournments thereof;
54
(h) By Voicestream, if the DT Share Price that would be applied in the
Cash Adjustment (prior to conversion into U.S. Dollars and without giving effect
to the proviso to the definition of DT Share Price) is less than 33 Euros;
provided that Voicestream shall have given DT 48 hours prior notice of its
intention to terminate pursuant to this Section 7.01(h).
SECTION 7.02. Effect of Termination. (a) In the event of termination of
this Agreement as provided in Section 7.01 hereof, this Agreement shall
forthwith become void and there shall be no liability on the part of Voicestream
or DT, except (i) as set forth in this Section 7.02 and in Sections 2.16, 3.13,
5.05(b), 9.03, 9.09 and 9.10 hereof, and (ii) nothing herein shall relieve
Voicestream or DT from liability for any willful breach hereof.
(b) If this Agreement is terminated by Voicestream or DT pursuant to
Section 7.01(g) because of the failure to obtain the Voicestream Stockholder
Approval and (i) at any time after the date of this Agreement and prior to the
Voicestream Stockholders' Meeting an offer or proposal for a transaction that
would constitute an Alternative Transaction (as defined in Section 4.03(c)
hereof) (except that, for the purposes of this Section 7.02(b), the applicable
percentage in clauses (i) and (iii) of such definition shall be fifty percent
(50%) and only for any transaction referred to in clause (ii) of such definition
to be treated as an Alternative Transaction for purposes of this Section
7.02(b), stockholders of Voicestream would own less than 65% of the outstanding
stock of the entity surviving or resulting from such transaction) shall have
been announced or otherwise publicly disclosed, and not withdrawn, and (ii)
within six months after the termination of this Agreement, Voicestream enters
into a definitive agreement with any Third Party with respect to an Alternative
Transaction (provided that for any transaction referred to in clause (ii) of
such definition to be treated as an Alternative Transaction for purposes of this
Section 7.02(b), stockholders of Voicestream would own less than 65% of the
outstanding stock of the entity surviving or resulting from such transaction),
Voicestream shall pay to DT a termination fee of $1,000,000,000 (the
"TERMINATION FEE"). Except as otherwise provided in this paragraph, no
Termination Fee shall be or become payable upon termination of this Agreement.
(c) The termination fee payable under Section 7.02(b) above shall be
payable in cash no later than one business day following the day Voicestream
enters into the definitive agreement providing for the Alternative Transaction
giving rise to the payment of such fee.
(d) Voicestream and DT agree that the agreements contained in Section
7.02(b) above are an integral part of the transactions contemplated by this
Agreement and are an inducement to DT to enter into this Agreement and, to the
extent payable in connection with a breach of this Agreement, constitute
liquidated damages and not a penalty. If Voicestream fails to promptly pay to DT
any fee due under such Section 7.02(b), then Voicestream shall pay the costs and
expenses (including legal fees and expenses) in connection with any action,
including the filing of any lawsuit or other legal action, taken to collect
payment, together with interest on the amount of any unpaid fee at the publicly
announced prime rate of Citibank, N.A., from the date such fee was required to
be paid.
Section 7.03. Amendment. This Agreement may be amended by Voicestream
and DT pursuant to a writing adopted by action taken by each of them at any time
before the
55
Effective Time; provided, however, that, after approval of this Agreement by the
stockholders of Voicestream no amendment may be made which under applicable law
would require approval of such Party's stockholders without such approval.
SECTION 7.04. Waiver. At any time before the Effective Time Voicestream
and DT may (i) extend the time for the performance of any of the obligations or
other acts of the others, (ii) waive any inaccuracies in the representations and
warranties contained herein or in any document delivered pursuant hereto and
(iii) waive compliance with any of the agreements or conditions contained
herein. Any agreement on the part of a Party to any such extension or waiver
shall be valid only as against such Party and only if set forth in an instrument
in writing signed by such Party.
ARTICLE 8
DEFINITIONS
SECTION 8.01. Certain Definitions. For purposes of this Agreement, the
following terms shall have the following meanings:
"AFFILIATE" of a Person means a Person that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, the first mentioned Person; provided, however, that such
term shall not be deemed to include the Federal Republic of Germany and
Kreditanstalt fur Wiederaufbau ("KFW") in their capacities as shareholders of
DT.
"AGREEMENT" means this Agreement and Plan of Merger, together with all
of its schedules and exhibits.
"DT FINANCING AGREEMENTS" means the Stock Subscription Agreement, the
Investor Agreement and the First Amended and Restated Voting Agreement, each
dated as of the date hereof, between Voicestream, DT and certain other parties.
"BUSINESS DAY" means a day other than Saturday, Sunday, federal or New
York State holiday or other day on which commercial banks in New York City are
authorized or required by law to close.
"CODE" means the Internal Revenue Code of 1986, as amended.
"CONTROL" (including the terms "CONTROLLED BY" and "UNDER COMMON
CONTROL WITH") means the possession, direct or indirect, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of stock, as trustee or executor, by contract or
otherwise.
"XXXX INLET JOINT VENTURES" means Xxxx Inlet Western Wireless PV/SS
PCS, L.P., Xxxx Inlet Voicestream PCS, LLC, Xxxx Inlet/VS GSM II PCS, LLC and
Xxxx Inlet/VS GSM III PCS, LLC.
56
"XXXX INLET PARTNERS" means Xxxx Inlet Telecommunications, Inc., SSPCS
Corporation, Providence Media Partners L.P., Xxxx Inlet GSM Inc., Providence
Media Partners III L.P. and Providence Equity Operating Partners III.
"DELAWARE LAW" means the Delaware General Corporation Law, as amended.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as the same
may be amended from time to time.
"EXON-XXXXXX" means the Defense Production Act of 1956, as amended, or
any successor thereto.
"GAAP" means United States generally accepted accounting principles.
"GERMAN LISTING PROSPECTUS" means the prospectus
(BORSENZULASSUNGSPROSPEKT) required for the listing of the DT Ordinary Shares to
be issued pursuant to the Merger on the FSE.
"GOVERNMENTAL OR REGULATORY AUTHORITY" means any domestic or foreign,
national, federal, state, county, city, local or other administrative,
legislative, regulatory or other governmental authority, commission, agency,
court of competent jurisdiction or other judicial entity, tribunal, arbitrator,
office, principality, registry (including, but not limited to, with respect to
patents, trademarks, designs, or copyrights), legislative or regulatory body,
instrumentality, or quasi-governmental agency, commission or authority or any
arbitral tribunal exercising any regulatory or taxing authority; provided that
such term shall not be deemed to include the Federal Republic of Germany and
KFW, in their capacities as shareholders of DT.
"HSR ACT" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as the same may be amended from time to time.
"INVESTMENT INTEREST" means a direct or indirect ownership of capital
stock, partnership, membership interests or other ownership interests or similar
securities of any Person.
"KNOWLEDGE" of any Party means the actual knowledge of the executive
officers of such Party.
"MATERIAL ADVERSE EFFECT" means, with respect to Voicestream and its
Subsidiaries and the Xxxx Inlet Joint Ventures, taken as a whole, or DT and its
Subsidiaries, taken as a whole, any change in or effect on the business of
Voicestream and its Subsidiaries and the Xxxx Inlet Joint Ventures taken as a
whole or DT and its Subsidiaries taken as a whole, as the case may be, that is
or is reasonably likely to be materially adverse to the business, operations or
financial condition of Voicestream and its Subsidiaries and the Xxxx Inlet Joint
Ventures taken as a whole or DT and its Subsidiaries taken as a whole,
respectively, but shall not include the effects of changes or developments (A)
in (i) the telecommunications industry, including regulatory and political
conditions, and not uniquely relating to DT or Voicestream, (ii) the United
States or European economy, or (iii) the United States or European securities
57
markets, or (B) resulting from the announcement or the existence of this
Agreement and the transactions contemplated hereby.
"OTHER JOINT VENTURES" means Iowa Wireless Services, L.P., STPCS, LLC,
D&E/Omnipoint Corporation Wireless Joint Venture, LP, NPI-Omnipoint Corporation
Wireless, LLC, Wireless Alliance, LLC and Access Plus, LLC.
"PERMITTED SWAPS" means transactions in which Voicestream or any of its
Subsidiaries exchanges property, assets and/or any legal rights of substantially
equivalent value (including spectrum rights) with any third party relating to
not more than 5,000,000 POPs in any one transaction or more than 10,000,000 POPs
in all such transactions.
"PERSON" means an individual, corporation, partnership, limited
liability company, joint venture, association, joint stock company, trust,
unincorporated organization, entity or group (as defined in the Exchange Act) or
a Governmental or Regulatory Authority.
"REGISTRATION STATEMENT" means one or more registration statements to
be filed with the SEC by DT in connection with the issuance of DT Depositary
Shares and DT Ordinary Shares in the Merger.
"SECURITIES ACT" means the Securities Act of 1933, as the same may be
amended from time to time.
"SIGNIFICANT SUBSIDIARY" means any Subsidiary which on the date of
determination is a "SIGNIFICANT SUBSIDIARY" within the meaning of Rule 1-02(w)
of Regulation S-X promulgated under the Exchange Act, including, without
limitation, Omnipoint Corporation and Aerial Communications, Inc.
"SUBSIDIARY", "VOICESTREAM SUBSIDIARY," or "DT SUBSIDIARY" means any
Person on the date of determination of which Voicestream or DT, as the case may
be (either alone or through or together with any other Subsidiary or
Subsidiaries) owns, directly or indirectly, more than fifty percent (50%) of the
stock or other equity interests the holders of which are generally entitled to
vote for the election of the Board of Directors or other governing body of such
Person.
"TAX" or "TAXES" means any U.S. federal, state or local or foreign
taxes of any kind, including, without limitation, those on or measured by or
referred to as income, gross receipts, capital, sales, use, ad valorem,
franchise, profits, license, withholding, payroll, employment, excise,
severance, stamp, occupation, premium, value added, property or windfall profits
taxes, customs, duties, or similar fees, assessments, or charges of any kind
whatsoever, imposed by any taxing authority, together with any interest and any
penalties, additions to tax, or additional amounts thereon.
"TAX RETURNS" means any U.S. federal, state or local or foreign return,
report, or statement required to be filed with any Governmental or Regulatory
Authority with respect to Taxes.
58
"TAX SHARING AGREEMENT" means the Tax Sharing Agreement dated February
17, 1998, by and among Western Wireless Corporation, Western PCS Corporation and
Xxxxxxxxx Telecommunications PCS (USA) Limited, and the First Amendment to such
Tax Sharing Agreement dated May 3, 1999.
"TELECOM ACT" means the Communications Act of 1934, as amended.
"T-MOBILE" means T-Mobile International AG, an Aktiengesellschaft
organized and existing under the laws of the Federal Republic of Germany.
ARTICLE 9
GENERAL PROVISIONS
SECTION 9.01. Non-Survival of Representations, Warranties and
Agreements. The representations, warranties and agreements in this Agreement
shall terminate at the Effective Time or upon the termination of this Agreement
pursuant to Section 7.01 hereof, as the case may be, except that (i) the
agreements set forth in Article I, Sections 5.08, 5.10, 5.13, 5.17 and 5.19
hereof shall survive the Effective Time indefinitely, (ii) the agreements set
forth in Sections 5.05(b), 7.02, 9.03 and 9.10 hereof shall survive termination
indefinitely, and (iii) any covenant or agreement of Voicestream and DT which by
its terms contemplates performance after the Effective Time shall survive the
Effective Time in accordance with its terms.
SECTION 9.02. Notices. All notices and other communications given or
made pursuant hereto shall be in writing and shall be deemed to have been duly
given or made as of the date of receipt and shall be delivered personally or
mailed by registered or certified mail (postage prepaid, return receipt
requested), sent by overnight courier or sent by telecopy, to the Parties at the
following addresses or telecopy numbers (or at such other address or telecopy
number for a Party as shall be specified by like notice):
(a) if to Voicestream:
Voicestream Wireless Corporation
0000 000xx Xxxxxx X.X.
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxx
Facsimile: 000-000-0000
with a copy to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxx
Facsimile: 000-000-0000
59
and a copy to:
Xxxxxxxx Xxxxxx & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxx
Facsimile: 000-000-0000
(b) if to DT:
Deutsche Telekom AG
140 Xxxxxxxxx-Xxxxx Allee
53113 Bonn
Germany
Attention: Xxxxx Xxxx
Facsimile: 49-228-181-44177
with a copy to:
Cleary, Gottlieb, Xxxxx & Xxxxxxxx
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx
Facsimile: 212- 225-3999
and a copy to
Hengeler Xxxxxxx Xxxxxxx Xxxxx
Xxxxxxxxxxxxxxx 0
X-00000 Xxxxxxxxxx
Xxxxxxx
Attention: Xx. Xxxxxx Xxxxxx
Facsimile: x00-000-00-00-000
SECTION 9.03. Expenses. Except as otherwise provided herein, all costs
and expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the Party incurring such costs and
expenses, except that those expenses incurred in connection with the printing of
the Voicestream Proxy Statement and the Registration Statement, as well as the
filing fees related thereto and any filing fee required in connection with the
filing of Premerger Notifications under the HSR Act, shall be shared equally by
Voicestream and DT.
60
SECTION 9.04. Headings. The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 9.05. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, then all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any
manner adverse to any Party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the Parties shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the Parties as closely as possible in an acceptable manner to the end
that the transactions contemplated hereby are fulfilled to the maximum extent
possible.
SECTION 9.06. Entire Agreement; No Third-Party Beneficiaries. This
Agreement, the DT Financing Agreements and the Confidentiality Agreement
constitute the entire agreement and, except as expressly set forth herein,
supersedes any and all other prior agreements and undertakings, both written and
oral, among the Parties, or any of them, with respect to the subject matter
hereof and, except for Section 5.08, or 5.17, is not intended to confer upon any
person other than Voicestream, DT and, after the Effective Time their respective
stockholders, any rights or remedies hereunder.
SECTION 9.07. Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto, in whole or in part (whether by operation of law or otherwise), without
the prior written consent of the other party; provided, however, that this
Agreement may be assigned by DT to an entity treated as a corporation for U.S.
federal income tax purposes which owns more than 80% of the DT Ordinary Shares
and which succeeds to all of the rights and obligations of DT under the Escrow
Agency Agreement. Subject to the preceding sentence, this Agreement will be
binding upon, inure to the benefit of and be enforceable by the parties and
their respective successors and assigns. Anything in this Section 9.07 to the
contrary notwithstanding, no assignment shall be permitted hereunder unless
after such assignment Xxxxx Day and/or Wachtell Lipton is able to issue the
opinion required pursuant to Section 6.02(d) hereof.
SECTION 9.08. Governing Law. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of Delaware
applicable to contracts executed in and to be performed entirely within that
State, without regard to the conflicts of laws provisions thereof.
SECTION 9.09. Submission to Jurisdiction; Waivers. Each of the parties
hereto irrevocably agrees that any legal action or proceeding with respect to
this Agreement or for recognition and enforcement of any judgment in respect
hereof brought by the other party hereto or its successors or assigns shall be
brought and determined only in the United States District Court for the District
of Delaware, or in the event (but only in the event) that such court does not
have subject matter jurisdiction over such action or proceeding, in the courts
of the State of Delaware. Each of the parties hereto hereby irrevocably submits
with regard to any such action
61
or proceeding for itself and in respect of its property, generally and
unconditionally, to the personal jurisdiction of the aforesaid courts. Each of
the parties hereto hereby irrevocably waives, and agrees not to assert, by way
of motion, as a defense, counterclaim or otherwise, in any action or proceeding
with respect to this Agreement, (a) any claim that it is not personally subject
to the jurisdiction of the above-named courts for any reason other than the
failure to serve in accordance with this Section 9.09, (b) that it or its
property is exempt or immune from jurisdiction of any such court or from any
legal process commenced in such courts (whether through service of notice,
attachment prior to judgment, attachment in aid of execution of judgment,
execution of judgment or otherwise), and (c) to the fullest extent permitted by
the applicable law, that (i) the suit, action or proceeding in such court is
brought in an inconvenient forum, (ii) the venue of such suit, action or
proceeding is improper and (iii) this Agreement, or the subject mater hereof,
may not be enforced in or by such courts.
SECTION 9.10. Waiver of Immunity. DT agrees that, to the extent that it
or any of its Subsidiaries or any of its property or the property of its
Subsidiaries is or becomes entitled to any immunity on the grounds of
sovereignty or otherwise based upon its status as an agency or instrumentality
of the government from any legal action, suit or proceeding or from set-off or
counterclaim relating to this Agreement from the jurisdiction of any competent
court, from service of process, from attachment prior to judgment, from
attachment in aid of execution, from execution pursuant to a judgment or an
arbitral award or from any other legal process in any jurisdiction, it, for
itself and its property, and for each of its Subsidiaries and its property,
expressly, irrevocably and unconditionally waives, and agrees not to plead or
claim, any such immunity with respect to matters arising with respect to this
Agreement or the subject matter hereof (including any obligation for the payment
of money). DT agrees that the foregoing waiver is irrevocable and is not subject
to withdrawal in any jurisdiction or under any statute, including the Foreign
Sovereign Immunities Act, 28 U.S.C. Section 1602 et seq. The foregoing waiver
shall constitute a present waiver of immunity at any time any action is
initiated against DT or any of its Subsidiaries with respect to this Agreement
or the subject matter hereof (including any obligation for the payment of
money).
SECTION 9.11. Counterparts. This Agreement may be executed in one or
more counterparts, and by the different Parties in separate counterparts, each
of which when executed shall be deemed to be an original, but all of which shall
constitute one and the same agreement.
62
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date first written above by their respective officers
thereunto duly authorized.
VOICESTREAM WIRELESS CORPORATION
By: /s/ Xxxx X. Xxxxxxx
---------------------------------
Name: Xxxx X. Xxxxxxx
Title: Chief Executive Officer
DEUTSCHE TELEKOM AG
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Member of the Board of Management,
International
By: /s/ Dr. Xxxx-Xxxxxxx Xxxx
---------------------------------
Name: Dr. Xxxx-Xxxxxxx Xxxx
Title: Member of the Board of Management,
Finance
63
