UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549 FORM 10-Q
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-4721
SPRINT CORPORATION
(Exact name of registrant as specified in its charter)
KANSAS 48-0457967
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
P.O. Box 11315, Kansas City, Missouri 64112
(Address of principal executive offices)
(913) 624-3000
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if changed
since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Yes X No
SHARES OF COMMON STOCK OUTSTANDING AT June 30, 1995 - 348,639,522
SPRINT CORPORATION
FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 1995
INDEX
Part I - Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Cash Flows
Consolidated Statements of Common Stock and Other
Shareholders' Equity
Condensed Notes to Consolidated Financial
Statements
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Part II - Other Information
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of
Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
Signatures
Exhibits
PART 1.
Item 1.
SPRINT CORPORATION
CONSOLIDATED BALANCE SHEETS
(In Millions)
As of As of
June 30, December 31,
1994 1995
(Unaudited)
Assets
Current assets
Cash and equivalents $ 286.9 $ 123.3
Accounts receivable, net of allowance
for doubtful accounts of $178.2
million ($128.9 million in 1994) 1,517.1 1,469.8
Inventories 191.2 215.8
Deferred income taxes 62.3 54.2
Prepaid expenses 166.4 144.5
Other 181.1 180.9
Total current assets 2,405.0 2,188.5
Investments in equity securities 218.9 177.6
Property, plant and equipment
Long distance communications services 6,383.1 6,056.3
Local communications services 12,212.8 11,827.4
Cellular and wireless communications
services 993.0 818.5
Other 500.5 498.6
20,089.4 19,200.8
Less accumulated depreciation 8,927.0 8,322.2
11,162.4 10,878.6
Investments in affiliates 1,379.9 500.3
Excess of cost over net assets acquired 694.7 706.7
Other assets 463.7 492.0
$ 16,324.6 $ 14,943.7
See accompanying condensed Notes to Consolidated Financial
Statements.
PART 1.
Item 1.
SPRINT CORPORATION
CONSOLIDATED BALANCE SHEETS (continued)
(In Millions)
As of As of
June 30, December 31,
1994 1995
(Unaudited)
Liabilities and shareholders' equity
Current liabilities
Current maturities of long-term debt $ 273.6 $ 332.4
Accounts payable 915.1 1,072.2
Accrued interconnection costs 548.6 527.6
Accrued taxes 270.2 268.5
Advance billings 168.9 167.6
Other 668.4 686.3
Total current liabilities 2,844.8 3,054.6
Long-term debt 5,791.8 4,604.8
Deferred credits and other liabilities
Deferred income taxes and investment tax
credits 1,256.7 1,266.4
Postretirement and other benefit
obligations 877.9 850.3
Other 672.3 605.7
2,806.9 2,722.4
Redeemable preferred stock 34.7 37.1
Common stock and other shareholders'
equity
Common stock, par value $2.50 per share,
authorized 500.0 million shares, issued
348.6 million (348.6 million in 1994)
and outstanding 348.6 million (348.3
million in 1994) 871.6 871.4
Capital in excess of par or stated value 943.5 942.9
Retained earnings 3,017.5 2,730.9
Other 13.8 (20.4)
4,846.4 4,524.8
$ 16,324.6 $ 14,943.7
See accompanying condensed Notes to Consolidated Financial
Statements.
PART I.
Item 1.
SPRINT CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In Millions, Except Per Share Data)
Three Months Ended Six Months Ended
June 30, June 30,
1995 1994 1995 1994
Net operating revenues $ 3,365.6 $ 3,150.4 $ 6,637.1 $ 6,183.6
Operating expenses
Costs of services and
products 1,673.4 1,574.4 3,313.3 3,102.8
Selling, general and
administrative 799.7 752.8 1,568.4 1,477.0
Depreciation and
amortization 387.0 366.4 773.8 718.7
Total operating expenses 2,860.1 2,693.6 5,655.5 5,298.5
Operating income 505.5 456.8 981.6 885.1
Interest expense (100.0) (100.0) (199.2) (201.1)
Other income (expense),
net (14.5) (9.3) (35.0) 19.9
Income before income
taxes 391.0 347.5 747.4 703.9
Income tax provision (145.3) (127.9) (277.4) (256.9)
Net income 245.7 219.6 470.0 447.0
Preferred stock
dividends (0.6) (0.7) (1.3) (1.4)
Earnings applicable to
common stock $ 245.1 $ 218.9 $ 468.7 $ 445.6
Earnings per common
share $ 0.70 $ 0.63 $ 1.34 $ 1.28
Weighted average number
of common shares 350.2 347.6 349.6 347.1
Dividends per common
share $ 0.25 $ 0.25 $ 0.50 $ 0.50
See accompanying condensed Notes to Consolidated Financial
Statements.
PART I.
Item 1.
SPRINT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In Millions)
Six Months Ended
June 30,
1995 1994
Operating activities
Net income $ 470.0 $ 447.0
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation and amortization 773.8 718.7
Deferred income taxes and investment tax
credits (8.9) 44.8
Gain on sale of investment -- (34.7)
Changes in operating assets and liabilities
Accounts receivable, net (47.3) (140.0)
Inventories and other current assets 2.5 (18.6)
Accounts payable, accrued expenses and other
current liabilities (146.8) (8.5)
Noncurrent assets and liabilities, net 106.6 69.6
Other, net 1.5 41.6
Net cash provided by operating activities 1,151.4 1,119.9
Investing activities
Capital expenditures (1,068.5) (848.0)
Proceeds from sale of investment in equity
securities -- 117.7
Investments in affiliates (890.1) (14.3)
Distributions from affiliates 30.4 15.0
Other, net (0.8) (16.6)
Net cash used by investing activities (1,929.0) (746.2)
Financing activities
Proceeds from long-term debt 209.8 100.2
Retirements of long-term debt (226.2) (380.3)
Net increase in notes payable and commercial
paper 1,144.6 73.5
Proceeds from common stock issued 3.2 28.7
Proceeds from employees stock purchase
installments -- 10.5
Dividends paid (175.6) (172.0)
Other, net (14.6) 10.3
Net cash provided (used) by financing
activities 941.2 (329.1)
Increase in cash and equivalents 163.6 44.6
Cash and equivalents at beginning of period 123.3 76.8
Cash and equivalents at end of period $ 286.9 $ 121.4
Supplemental cash flows information
Cash paid for interest $ 201.1 $ 218.1
Cash paid for income taxes $ 284.6 $ 224.9
Noncash financing activities
Common stock contributed to employee $ -- $ 26.3
savings plans, at market
See accompanying condensed Notes to Consolidated Financial
Statements.
PART I.
Item 1.
SPRINT CORPORATION
CONSOLIDATED STATEMENTS OF COMMON STOCK AND
OTHER SHAREHOLDERS' EQUITY (UNAUDITED)
(In Millions)
Six Months Ended June 30, 1995
Capital in
Excess of
Par or
Common Stated Retained
Stock Value Earnings Other Total
Balance as of January
1, 1995 (348.6
million shares issued $871.4 $942.9 $ 2,730.9 $(20.4) $4,524.8
and 348.3 million
shares outstanding)
Net income -- -- 470.0 -- 470.0
Common stock
dividends -- -- (174.3) -- (174.3)
Preferred stock
dividends -- -- (1.3) -- (1.3)
Common stock issued 0.2 2.0 -- -- 2.2
Change in unrealized
holding gains on
investments in equity
securities, net -- -- -- 26.5 26.5
Other, net -- (1.4) (7.8) 7.7 (1.5)
Balance as of June 30,
1995 (348.6 million
shares issued and
348.6 million shares
outstanding) $871.6 $943.5 $ 3,017.5 $ 13.8 $4,846.4
See accompanying condensed Notes to Consolidated Financial
Statements.
PART I.
Item 1.
SPRINT CORPORATION
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
June 30, 1995 and 1994
The information contained in this Form 10-Q for the three and six
month interim periods ended June 30, 1995 and 1994 has been
prepared in accordance with instructions to Form 10-Q and Rule 1001
of Regulation S-X. In the opinion of management, all adjustments
considered necessary, consisting only of normal recurring accruals,
to present fairly the consolidated financial position, results of
operations, and cash flows for such interim periods have been made.
Certain information and footnote disclosures normally included in
consolidated financial statements prepared in accordance with
generally accepted accounting principles have been condensed or
omitted. The results of operations for the six months ended June
30, 1995 are not necessarily indicative of the operating results
that may be expected for the year ended December 31, 1995.
1. Accounting Policies
Basis of Consolidation
The accompanying consolidated financial statements include the
accounts of Sprint Corporation and its wholly-owned and majority
owned subsidiaries (Sprint). Investments in affiliates which
represent 50 percent or less ownership are accounted for using the
equity method.
In accordance with industry practice, revenues and related net
income of non-regulated operations attributable to transactions
with Sprint's regulated local exchange telephone companies have not
been eliminated in the accompanying consolidated financial
statements. Intercompany revenues of such entities amounted to $74
million and $85 million for the three months ended June 30, 1995
and 1994, respectively, and $145 million and $150 million for the
six months ended June 30, 1995 and 1994, respectively.
All other significant intercompany transactions have been
eliminated.
Classification of Operations
The long distance communications services division provides
domestic voice, video, and data communications services across
certain specified geographical boundaries, as well as international
long distance communications services. The terms under which the
division offers its services to the public are subject to different
levels of state and federal regulation, but rates are generally not
subject to rate-base regulation.
The local communications services division consists principally of
the operations of Sprint's regulated telephone companies which
provide local exchange services, access by telephone customers and
other carriers to local exchange facilities and long distance
services within specified geographical areas.
The cellular and wireless communications services division consists
of wholly-owned and majority-owned interests in partnerships and
corporations operating cellular and wireless communications
properties in various metropolitan and rural service area markets.
The product distribution and directory publishing businesses
include the wholesale distribution of telecommunications products
and the publishing and marketing of white and yellow page telephone
directories.
Reclassifications
Certain amounts previously reported for prior periods have been
reclassified to conform to the current period presentation in the
accompanying consolidated financial statements. Such
reclassifications had no effect on the results of operations or
shareholders' equity as previously reported.
2. Investments in Equity Securities
Investments in equity securities are classified as available for
sale and reported at fair value (estimated based on quoted market
prices). As of June 30, 1995 and December 31, 1994, the cost of
such investments was $109 million, with gross unrealized holding
gains of $110 million and $69 million, respectively, reflected as
additions to other shareholders' equity, net of related income
taxes.
During the six months ended June 30, 1994, Sprint sold an
investment in equity securities, realizing a gain of $35 million,
which increased net income by $22 million ($0.06 per share).
3. Long-Term Debt
Long-term debt increased $1.19 billion as of June 30, 1995 compared
to December 31, 1994 primarily reflecting borrowings to support
commitments associated with the Sprint Telecommunications Venture.
This increase in borrowings was primarily comprised of notes
payable and commercial paper which are classified as longterm debt
due to Sprint's intent and ability to refinance such borrowings on
a long-term basis.
4. Income Taxes
The differences which cause the effective income tax rate to vary
from the statutory federal income tax rate of 35 percent for the
six months ended June 30, 1995 and 1994, respectively, are as
follows (in millions):
Six Months Ended June 30,
1995 1994
Income tax provision at the statutory rate $ 261.6 $ 246.4
Effect of:
Investment tax credits included in income (7.6) (11.2)
State income taxes, net of federal income
tax effect 27.0 27.4
Other, net (3.6) (5.7)
Income tax provision $ 277.4 $ 256.9
Effective income tax rate 37.1% 36.5%
5. Contingencies
Litigation, Claims and Assessments
Following announcement in 1992 of Sprint's merger agreement with
Centel Corporation (Centel), class action suits were filed against
Centel and certain of its officers and directors in federal and
state courts. The state suits have been dismissed, while the
federal suits have been consolidated into a single action which
seeks damages for alleged violations of securities laws. In
January 1995, a purported class action suit was filed against
Centel's financial advisors in state court in New York in
connection with the Sprint/Centel merger. Sprint may have
indemnification obligations to the financial advisors in connection
with this suit. Various other suits arising in the ordinary course
of business are pending against Sprint. Management cannot predict
the ultimate outcome of these actions
but believes they will not result in a material effect on Sprint's
consolidated financial statements.
Accounts Receivable Sold with Recourse
Under an agreement available through December 1995, Sprint may sell
on a continuous basis, with recourse, up to $600 million of
undivided interests in a designated pool of its accounts
receivable. Subsequent collections of receivables sold to
investors are typically reinvested in the pool. Sprint is required
to repurchase the designated pool of accounts receivable only upon
the occurrence of specified events involving noncollectibility of
accounts. As of June 30, 1995, Sprint had not been required to
repurchase receivables under this recourse provision. Because
Sprint retains credit losses associated with its accounts
receivable, any exposure related to this retention is estimated in
conjunction with Sprint's calculation of its reserve for
uncollectible accounts. On an annual basis, subject to the
approval of the investors, Sprint may extend the agreement for an
additional year. Receivables sold that remained uncollected as of
June 30, 1995 aggregated $600 million.
6. Subsequent Event
In August 1995, Sprint's board of directors declared a common stock
dividend of $0.25 per share payable on September 29, 1995.
PART I.
Item 2.
SPRINT CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
General
Sprint Corporation (Sprint), incorporated in 1938 under the laws of
Kansas, is a holding company. Sprint's principal subsidiaries
provide domestic and international long distance, local exchange
and cellular and wireless telecommunications services. Other
subsidiaries are engaged in the wholesale distribution of
telecommunications products and the publishing and marketing of
white and yellow page telephone directories.
Long Distance Communications Services. The long distance division
is the nation's third largest long distance telephone company,
operating a nationwide all-digital long distance communications
network utilizing state-of-the-art fiber-optic and electronic
technology. The division provides domestic and international
voice, video and data communications services. The terms under
which the division offers its services to the public are subject to
different levels of state and federal regulation, but rates are
generally not subject to rate-base regulation.
Local Communications Services. The local division is comprised of
regulated local exchange carriers (LECs) which serve approximately
6.5 million access lines in 19 states. The companies in this division
operate in geographical areas called Local Access Transport Areas
(LATAs) in which they provide basic local exchange and intra-LATA
toll service. The division also is a reseller of interexchange long
distance services and provides other carriers access to Sprint's
local exchange facilities.
Cellular and Wireless Communications Services. The cellular and
wireless division, which serves over 1.2 million cellular
customers, primarily consists of Sprint Cellular Company and its
subsidiaries. The division has operating control of 88 markets
in 14 states and minority interests in 52 markets.
Product Distribution and Directory Publishing. North Supply
Company (North Supply), a wholesale distributor of
telecommunications, security and alarm, and electrical products,
distributes products of more than 1,200 manufacturers to
approximately 9,500 customers. Products range from basics, such as
wire and cable, telephones and repair parts, to complete private
branch exchange (PBX) systems, transmission systems and security
and alarm equipment.
Sprint Publishing & Advertising along with Centel Directory Company
publish and market white and yellow page telephone directories in
certain of Sprint's local exchange territories, as well as in the
greater metropolitan areas of Milwaukee, Wisconsin and Chicago,
Illinois. The companies publish approximately 330 directories in
23 states with a circulation of 16.1 million copies.
Strategic Developments
On June 22, 1995, Sprint, along with Deutsche Telekom and France
Telecom, signed a definitive joint venture agreement for their
strategic alliance that will provide seamless global
telecommunications services to business, consumer and carrier
markets worldwide. A Global Venture Board will determine strategic
direction and global policies of the venture. The three parties
will have equal votes on the Global Venture Board. The operating
group serving Europe (excluding France and Germany) will be owned
one-third by Sprint and two-thirds by Deutsche Telekom and France
Telecom. The interests of Deutsche Telekom and France Telecom in
the venture are expected to be held by their own joint venture,
referred to as Atlas. The operating group for the worldwide
activities outside the United States and Europe will be owned 50
percent by Sprint and 50 percent by Deutsche Telekom and France
Telecom through Atlas. Home country markets will be served by
France Telecom in France, Deutsche Telekom in Germany and Sprint in
the United States.
Sprint, Deutsche Telekom and France Telecom also reached agreement
on June 22, 1995 with respect to the terms by which Deutsche
Telekom and France Telecom will invest up to an estimated $4.2
billion in shares of a new Sprint voting stock (the "Class A
Stock"), which may either be a separate class of preference stock
or a separate class of common stock. The parties signed definitive
agreements dated as of July 31, 1995 with respect to the terms of
the investment.
The Class A Stock will represent up to approximately 20 percent of
Sprint's voting equity. The amount of the purchase price, the
timing of the investment and whether the shares to be purchased
will be a separate class of preference stock or a new class of
common stock are dependent on the average trading price of Sprint
Common Stock and whether the proposed spin-off of Sprint's cellular
and wireless division (discussed below) is consummated.
Deutsche Telekom and France Telecom, as the holders of the Class A
Stock, will have the right in most circumstances to proportionate
representation on Sprint's board of directors and to purchase
additional shares of Class A Stock from Sprint to enable them to
maintain their ownership level at 20 percent. In addition, the
holders of Class A Stock will have disapproval rights with respect
to Sprint's undertaking certain types of transactions. Deutsche
Telekom and France Telecom have also entered into a standstill
agreement with Sprint that contains restrictions on their ability
to acquire voting securities of
Sprint other than as contemplated by the investment agreement and
related agreements, as well as customary provisions restricting
Deutsche Telekom and France Telecom from initiating or
participating in any proposal with respect to the control of
Sprint.
The strategic alliance has already been cleared by the Committee on
Foreign Investment in the United States and the Department of
Justice. In connection with the Department of Justice approval,
Sprint agreed to a Consent Decree which is subject to the approval
of the U.S. District Court for the District of Columbia. The
decree, which covers both the global venture and the proposed
investment in Sprint, imposes certain reporting obligations on the
global venture and Sprint and prevents preferential treatment for
the global venture and Sprint in France and Germany until the
liberalization of the French and German telecommunications markets.
Review of the strategic alliance and the investment is also
underway by the Federal Communications Commission (FCC). Completion
of the transactions is contingent on receiving these and other
government approvals, including approval by the European Commission
and applicable French and German approvals. In addition to the
above approvals, the final agreements are subject to approval by
the governing board of France Telecom, and Sprint shareholders must
approve the terms of the investment.
On July 26, 1995, Sprint announced that its board of directors had
decided to pursue a tax-free spin-off of Sprint's cellular and
wireless division to Sprint shareholders. In the recent FCC
auction of wireless Personal Communications Services (PCS)
licenses, the Sprint Telecommunications Venture won rights to
several markets which overlap service territories operated by
Sprint's cellular and wireless division. Under FCC rules, Sprint
is required to divest or reduce its cellular operations in certain
markets to clear conflicts with the PCS licenses awarded to the
Sprint Telecommunications Venture. The resolution of these
licensing conflicts can be accomplished through a spin-off of
cellular properties to create a stand-alone company.
The proposed spin-off is expected to be completed during the second
quarter of 1996 and is subject to a favorable ruling by the
Internal Revenue Service on the tax-free nature of the spinoff,
regulatory and other government approvals and final approval by the
Sprint board of directors.
Results Of Operations
Consolidated
Each of Sprint's primary divisions -- long distance, local
exchange, and cellular and wireless -- generated improved net
operating revenues and operating income in the second quarter of
1995 as compared to the second quarter of 1994. The long distance
division generated a 5.7 percent growth in traffic volumes over the
second quarter of 1994, the number of access lines served by the
local division grew 4.8 percent during the past 12 months, and the
cellular and wireless division benefited from a 53.0 percent growth
in cellular subscribers over the past 12 months.
Consolidated net operating revenues for the quarter ended June 30,
1995 were $3.37 billion, a 6.8 percent increase over net operating
revenues of $3.15 billion for the second quarter of 1994. For the
quarter ended June 30, 1995, net income was $246 million, or $0.70
per share, compared with $220 million, or $0.63 per share, for the
second quarter of 1994. For the six months June 30, 1995,
consolidated net operating revenues were $6.64 billion, a 7.3 percent
increase over net operating revenues of $6.18 billion for the
comparable period in 1994. Net income for the six months ended
June 30, 1995 was $470 million, or $1.34 per share, compared with
$447 million, or $1.28 per share, for the six months ended June 30,
1994. Net income for the six months ended June 30, 1994 included
a $22 million gain ($0.06 per share) related to the sale of an
investment in equity securities.
Long Distance Communications Services
Selected Operating Results
(In Millions)
Three Months Ended
June 30, Variance
1995 1994 Dollar Percent
Net operating revenues $ 1,771.8 $ 1,695.5 $ 76.3 4.5%
Operating expenses
Interconnection 756.2 747.2 9.0 1.2%
Operations 250.2 220.0 30.2 13.7%
Selling, general and
administrative 454.9 433.1 21.8 5.0%
Depreciation and
amortization 139.8 137.0 2.8 2.0%
Total operating
expenses 1,601.1 1,537.3 63.8 4.2%
Operating income $ 170.7 $ 158.2 $ 12.5 7.9%
Operating margin 9.6% 9.3%
Selected Operating Results
(In Millions)
Six Months Ended
June 30, Variance
1995 1994 Dollar Percent
Net operating revenues $ 3,524.3 $ 3,355.9 $ 168.4 5.0%
Operating expenses
Interconnection 1,518.4 1,495.7 22.7 1.5%
Operations 494.9 434.8 60.1 13.8%
Selling, general and
administrative 904.1 853.4 50.7 5.9%
Depreciation and
amortization 280.8 270.7 10.1 3.7%
Total operating
expenses 3,198.2 3,054.6 143.6 4.7%
Operating income $ 326.1 $ 301.3 $ 24.8 8.2%
Operating margin 9.3% 9.0%
Net operating revenues for the three and six months ended June 30,
1995 increased 4.5 percent and 5.0 percent, respectively, over the
comparable 1994 periods and traffic volume increased 5.7 percent
and 6.0 percent over the same periods. Revenue growth for the
three and six months ended June 30, 1995 was primarily
driven by strong performance in the data services market, which
includes sales to consumer on-line services. Also contributing to
this revenue growth were the business market, which continued to
experience growth in "800" services, and the international market,
which reflects the division's continuing efforts to target new
geographic markets. Intense competition in the residential market
and small business markets contributed to declines in these markets
as compared to the prior year. Volume growth reflected strong
minute growth in the business and international markets.
While revenue levels for the quarter ended June 30, 1995 were the
highest ever for the long distance division, year over year rates
of growth have slowed since the third quarter of 1994. This slowing
of growth rates occurred primarily in the international, "800"
services and business markets. Partially offsetting this trend
was the data services market, which has continued to experience
increasing rates of growth since the third quarter of 1994.
Additionally, declines experienced since the third quarter of 1994
in the residential market have slowed, primarily due to the success
of the Sprint Sense(sm) calling plan. In an effort to achieve its
goal of growing revenues at a rate in excess of the industry, the
division continues to develop various marketing initiatives, such
as providing new channels of distribution for Sprint Sense(sm)
through joint marketing efforts with Sprint's cable partners.
Additionally, the Sprint Sense(sm) product was introduced into the
small business and international consumer markets during the second
quarter.
Interconnection costs consist of amounts paid to local exchange
carriers, other domestic service providers, and foreign telephone
companies for the completion of calls made by the division's
customers. Interconnection costs increased during the three and
six months ended June 30, 1995 relative to the comparable 1994
periods due to an increase in access costs associated with the
growth in data products and increased traffic volumes. These
increases were partially offset by reductions in rates paid to
foreign telephone companies to complete international calls made by
the division's domestic customers and reduced costs of connecting
to networks domestically as a result of lower intrastate access
rates in California and decreased interstate access rates. As a
percentage of net operating revenues, interconnection costs
decreased from 44.1 percent and 44.6 percent in the three and six
months ended June 30, 1994, respectively, to 42.7 percent and 43.1
percent in the three and six months ended June 30, 1995,
respectively.
Operations expense consists of costs related to operating and
maintaining the long distance network; costs of providing various
services such as operator services, public payphones,
telecommunications services for the hearing impaired, and video
teleconferencing; and costs of data system sales. Operations
expense for the three and six months ended June 30, 1995 increased
$30 million and $60 million, respectively, from the comparable 1994
periods, primarily due to increased costs associated with growth
within the data products market and increased international network
operations costs reflecting growth in overseas products and foreign
operations. The year-todate increase in operations expense also
included approximately $3 million of expenses associated with a
reduction in the division's work force which was substantially
completed during the first quarter of 1995.
Selling, general and administrative (SG&A) expense for the three
and six months ended June 30, 1995 increased $22 million and $51
million, respectively, over the comparable 1994 periods generally
reflecting the overall growth in the division's operating
activities. As a percentage of net operating revenues, these
expenses have remained at relatively stable levels. The increase
in SG&A expense was generally due to increased sales and marketing
efforts, which are important in the intensely competitive long
distance marketplace, as well as increased advertising. The year-
to-date increase also included approximately $6 million of expenses
associated with a reduction in the division's work force which was
substantially completed during the first quarter of 1995. The
division has continued to focus on cost containment of SG&A
expenses in an effort to further enhance the division's
profitability.
Depreciation and amortization in the three and six months ended
June 30, 1995 increased $3 million and $10 million, respectively,
compared to 1994, generally due to an increase in the asset base.
Local Communications Services
Selected Operating Results
(In Millions)
Three Months Ended
June 30, Variance
1995 1994 Dollar Percent
Net operating revenues
Local service $ 464.7 $ 434.9 $ 29.8 6.9%
Network access 418.2 391.1 27.1 6.9%
Toll service 121.5 132.5 (11.0) (8.3)%
Other 163.4 124.9 38.5 30.8%
Total net operating
revenues 1,167.8 1,083.4 84.4 7.8%
Operating expenses
Plant operations 342.1 311.1 31.0 10.0%
Depreciation and
amortization 207.3 197.6 9.7 4.9%
Customer operations 146.8 132.3 14.5 11.0%
Other 199.7 187.9 11.8 6.3%
Total operating
expenses 895.9 828.9 67.0 8.1%
Operating income $ 271.9 $ 254.5 $ 17.4 6.8%
Operating margin 23.3% 23.5%
Selected Operating Results
(In Millions)
Six Months Ended
June 30, Variance
1995 1994 Dollar Percent
Net operating revenues
Local service $ 918.3 $ 860.5 $ 57.8 6.7%
Network access 829.5 782.1 47.4 6.1%
Toll service 244.1 266.7 (22.6) (8.5)%
Other 316.8 242.6 74.2 30.6%
Total net operating
revenues 2,308.7 2,151.9 156.8 7.3%
Operating expenses
Plant operations 675.8 628.8 47.0 7.5%
Depreciation and
amortization 414.5 384.9 29.6 7.7%
Customer operations 288.0 263.4 24.6 9.3%
Other 387.0 363.9 23.1 6.3%
Total operating
expenses 1,765.3 1,641.0 124.3 7.6%
Operating income $ 543.4 $ 510.9 $ 32.5 6.4%
Operating margin 23.5% 23.7%
The division's local net operating revenues for the three and six
months ended June 30, 1995 increased 6.9 percent and 6.7 percent,
respectively, over the comparable 1994 periods. Growth in local
service revenues reflects continued increases in the number of
access lines served and growth in add-on services, such as custom
calling features. The number of access lines served grew 4.8
percent during the past twelve months.
Network access revenues, derived from interexchange long distance
carriers' use of the local network to complete calls, increased as
a result of increased traffic volumes, a portion of which is due to
increased competition related to toll service revenues as described
below. The increase related to traffic volumes was partially
offset by periodic reductions in network access rates charged.
During the first quarter of 1995, the FCC announced a new interim
interstate price caps plan which became effective August 1, 1995.
Under the new plan, the local division has adopted a rate formula
based on the maximum productivity factors that will effectively
remove the earnings cap on the division's interstate access
revenues. Interstate access revenues currently comprise
approximately 60 percent of the division's network access revenues.
Toll service revenues, related to the provision of long distance
services within specified geographical areas and the reselling of
interexchange long distance services, decreased 8.3 percent and 8.5
percent for the three and six months ended June 30, 1995,
respectively. The decreases primarily reflect increased
competition in the intrastate long distance market as interexchange
long distance carriers are now offering intralata long distance
service in certain states. While toll service revenues have
declined as a result of this increased competition, this reduction
is partially recovered through the resulting increased use of the
local network by interexchange long distance carriers.
Other revenues, including revenues from directory publishing fees,
billing and collection services and sales of telecommunications
equipment, increased 30.8 percent and 30.6 percent for the three
and six months ended June 30, 1995, respectively, over the
comparable 1994 periods. The increases were generally due to
growth in equipment sales, an increase in billing and collection
services and an increase in miscellaneous non-regulated revenues.
Plant operations expense includes network operations, repair and
maintenance costs of property, plant and equipment, and other costs
associated with the provision of local exchange services. Plant
operations expense increased $31 million and $47 million in the
three and six months ended June 30, 1995 over the comparable 1994
periods. These increases were primarily due to increases in the
costs of providing services resulting from access line growth and
to increases in repair and maintenance costs in the division's
Florida and Mid-Atlantic companies.
The increases in depreciation and amortization expense for the
three and six months ended June 30, 1995 relative to the comparable
1994 periods were generally due to system-wide plant additions and
the implementation of depreciation rate changes within the
division's Florida operations. These depreciation rate changes
resulted in increases in depreciation expense for the three and six
months ended June 30, 1995 of $8 million and $16 million,
respectively.
Customer operations expense includes costs associated with business
office operations and billing services, marketing costs, and
expenses related to providing operator and directory assistance and
other customer services. Customer operations expense increased $15
million and $25 million in the three and six months ended June 30,
1995, respectively, over the comparable 1994 periods primarily due
to increased marketing costs to promote new products and services
and increased business office operations costs.
Other operating expenses increased $12 million and $23 million in
the three and six months ended June 30, 1995 over the comparable
1994 periods primarily due to the growth in equipment sales.
The division accounts for the economic effects of regulation
pursuant to Statement of Financial Accounting Standards (SFAS) No.
71, "Accounting for the Effects of Certain Types of Regulation."
The application of SFAS No. 71 requires the accounting recognition
of the rate actions of regulators where appropriate, including the
recognition of depreciation and amortization based on estimated
useful lives prescribed by regulatory commissions rather than those
that might be utilized by non-regulated enterprises. Sprint would
be required to discontinue accounting under SFAS No. 71 if the
existing and anticipated levels of competition no longer allow for
service and product pricing that provides for the recovery of
specific costs. SFAS No. 71 would also be required to be
discontinued if the existing regulatory framework continues to
evolve from rate-base regulation to price regulation as the latter
does not provide for the recovery of specific costs.
Sprint currently believes the division's rate-regulated operations
meet the criteria for the continued application of the provisions
of SFAS No. 71. However, the division operates in an evolving
environment in which the regulatory framework is transitioning to
price regulation in certain states in which the division operates
and the level and types of competition are increasing.
Accordingly, Sprint constantly monitors and evaluates the ongoing
applicability of SFAS No. 71 by assessing the likelihood that
prices which provide for the recovery of specific costs can
continue to be charged to customers. If the current regulatory and
competitive trends continue, it is increasingly likely that Sprint
will discontinue accounting under SFAS No. 71 due to the effect of
one or both of these conditions. In the event Sprint determines
that the division's rate-regulated operations no longer qualify for
the application of the provisions of SFAS No. 71, Sprint would
eliminate from its financial statements the effects of any actions
of regulators that had been recognized as assets and liabilities.
The resulting material noncash charge would be recorded as an
extraordinary item.
Cellular and Wireless Communications Services
Selected Operating Results
(In Millions)
Three Months Ended
June 30, Variance
1995 1994 Dollar Percent
Net operating revenues $ 232.8 $ 171.6 $ 61.2 35.7%
Operating expenses
Costs of services and
products 76.0 55.4 20.6 37.2%
Selling, general and
administrative 89.1 69.0 20.1 29.1%
Depreciation and
amortization 27.5 22.6 4.9 21.7%
Total operating
expenses 192.6 147.0 45.6 31.0%
Operating income $ 40.2 $ 24.6 $ 15.6 63.4%
Operating margin 17.3% 14.3%
Selected Operating Results
(In Millions)
Six Months Ended
June 30, Variance
1995 1994 Dollar Percent
Net operating revenues $ 436.1 $ 314.9 $ 121.2 38.5%
Operating expenses
Costs of services and
products 145.2 101.6 43.6 42.9%
Selling, general and
administrative 166.1 131.0 35.1 26.8%
Depreciation and
amortization 54.3 45.3 9.0 19.9%
Total operating
expenses 365.6 277.9 87.7 31.6%
Operating income $ 70.5 $ 37.0 $ 33.5 90.5%
Operating margin 16.2% 11.7%
In addition to activities comprising the above operating results,
Sprint's cellular and wireless division also owns minority
interests in certain markets. Equity in the earnings and losses of
these minority investments is included in "Other income (expense),
net" in the Consolidated Statements of Income.
Net operating revenues for the three and six months ended June 30,
1995 increased 35.7 percent and 38.5 percent, respectively, over
the comparable 1994 periods, primarily due to growth in customer
lines served of 53.0 percent over the past twelve months. The
effects of growth in the number of cellular subscribers was
partially offset by a decline in average monthly service revenue
per cellular subscriber from $68 for the quarter ended June 30,
1994, to $62 for the quarter ended June 30, 1995, and from $66 for
the six months ended June 30, 1994, to $61 for the comparable
period in 1995, reflecting an industry-wide trend that has occurred
as a result of increased general consumer market penetration.
Market penetration for the cellular and wireless division was at
6.25 percent as of June 30, 1995. Future growth rates for net
operating revenues and the number of cellular subscribers will
be dependent on price levels and the quality of service in the
competitive cellular marketplace as well as the impact of emerging
competition such as Personal Communications Services (PCS).
Excluding the costs and revenues related to equipment sales,
costs of services and products decreased to 23.4 percent and 24.1
percent of net operating revenues in the three and six months ended
June 30, 1995, respectively, from 24.4 percent and 24.6 percent for
the same periods in 1994. These decreases are primarily
attributable to economies of scale gained from serving additional
customers. This decrease was achieved despite an increase in costs
resulting from fraudulent usage, particularly in the first quarter
of 1995.
The increase in selling, general and administrative expense for the
three and six months ended June 30, 1995 resulted principally from
increased commissions and customer service expenses, as well as
increased advertising costs related to the growth in the number of
cellular subscribers. Despite the increases in the amount of SG&A
expense, such costs as a percentage of net operating revenues
(excluding revenues from equipment sales) declined to 38.3 percent
and 38.1 percent in the three and six months ended June 30, 1995
from 40.2 percent and 41.6 percent in the comparable periods in 1994.
The improvements resulted primarily from additional economies
realized from providing service and support to a larger customer base.
However, the division's total per unit cost to acquire customers,
including equipment sales discounts, increased 9 percent for the six
months ended June 30, 1995 as compared to the same period in 1994,
reflecting the intensely competitive marketplace for acquiring new
customers as well as increased costs associated with the retention
of a larger existing customer base.
Depreciation and amortization increased primarily due to the
additional investment in property, plant and equipment required to
accommodate the growth in customer lines.
Product Distribution and Directory Publishing Businesses
Selected Operating Results
(In Millions)
Three Months Ended
June 30, Variance
1995 1994 Dollar Percent
Net operating revenues $ 298.0 $ 289.2 $ 8.8 3.0%
Operating expenses
Costs of services and
products 251.7 246.4 5.3 2.2%
Selling, general and
administrative 21.8 21.5 0.3 1.4%
Depreciation and
amortization 1.8 1.8 -- --%
Total operating
expenses 275.3 269.7 5.6 2.1%
Operating income $ 22.7 $ 19.5 $ 3.2 16.4%
Operating margin 7.6% 6.7%
Selected Operating Results
(In Millions)
Six Months Ended
June 30, Variance
1995 1994 Dollar Percent
Net operating revenues $ 575.3 $ 540.0 $ 35.3 6.5%
Operating expenses
Costs of services and
products 486.7 458.7 28.0 6.1%
Selling, general and
administrative 43.4 42.0 1.4 3.3%
Depreciation and
amortization 3.6 3.4 0.2 5.9%
Total operating
expenses 533.7 504.1 29.6 5.9%
Operating income $ 41.6 $ 35.9 $ 5.7 15.9%
Operating margin 7.2% 6.6%
North Supply, Sprint's product distribution subsidiary, had net
operating revenues of $226 million and $432 million for the three
and six months ended June 30, 1995, respectively, increasing $5
million and $29 million from the comparable 1994 periods due to
growth in sales to non-affiliates. North Supply's costs of
services and products increased from $191 million for the three
months ended June 30, 1994 to $194 million for the three months
ended June 30, 1995, and from $349 million for the six months ended
June 30, 1994 to $371 million for the comparable period in 1995.
These increases are due to the growth in sales.
Sprint Publishing & Advertising, Sprint's directory publishing
subsidiary, had net operating revenues of $72 million and $143
million for the three and six months ended June 30, 1995,
respectively, compared to $68 million and $136 million for the same
periods in 1994. Sprint Publishing & Advertising experienced an
increase in costs of services and products from $55 million and
$109 million for the three and six months ended June 30, 1994,
respectively, to $58 million and $116 million in the comparable
periods in 1995.
Non-Operating Items
Interest Expense
Interest expense for the three months ended June 30, 1995 was
consistent with the comparable period in 1994. For the six months
ended June 30, 1995, interest expense decreased $2 million from the
comparable 1994 period. Sprint's average debt outstanding for the
three and six months ended June 30, 1995 increased $842 million and
$402 million, respectively, from the comparable 1994 periods.
These increases in average debt outstanding were primarily from
short-term borrowings incurred to fund investments in the Sprint
Telecommunications Venture (see "Liquidity and Capital Resources --
Capital Requirements Associated with Sprint Telecommunications
Venture"). Because the interest costs on the borrowings associated
with Sprint's investment in this venture are being capitalized in
accordance with SFAS No. 58, "Capitalization of Interest Cost in
Financial Statements That Include Investments Accounted for by the
Equity Method", interest expense did not increase proportionately
to the increase in average debt outstanding. Sprint's effective interest
rate decreased by 122 and 66 basis points, respectively, over the
same periods primarily due to the increase in short-term borrowings
as a percent of total borrowings.
Other Income (Expense), Net
The components of other income (expense), net are as follows (in
millions):
Three Months Ended Six Months Ended
June 30, June 30,
1994 1995 1994 1995
Gain on sale of
investment in equity
securities $ -- $ -- $ -- $ 34.7
Equity in earnings
(loss) of affiliates (1.1) 7.6 1.5 12.9
Loss on sales of
accounts receivable (9.8) (6.8) (19.6) (12.5)
Minority interests (8.9) (6.0) (16.9) (9.5)
Other 5.3 (4.1) -- (5.7)
Total other income
(expense), net $ (14.5) $ (9.3) $ (35.0) $ 19.9
Income Tax Provision
See Note 3 of condensed Notes to Consolidated Financial Statements
for information regarding the differences which cause the effective
income tax rate to vary from the statutory federal income tax rate.
Financial Condition
Sprint's consolidated assets totaled $16.32 billion at June 30,
1995 compared to $14.94 billion at December 31, 1994. Cash and
equivalents increased $164 million as of June 30, 1995 as a result
of funds deposited in escrow to support future commitments
associated with the Sprint Telecommunications Venture. Property,
plant and equipment, net of accumulated depreciation, increased
$284 million over the same period. This increase was primarily a
result of increased capital expenditures to upgrade Sprint's
networks, to expand service capabilities and increase productivity.
Accounts payable decreased $157 million as of June 30, 1995
compared to December 31, 1994 primarily because the December 31,
1994 balance reflects increased construction expenditures which
generally occur in the fourth quarter and are subsequently paid.
Current maturities of long-term debt as of June 30, 1995 decreased
$59 million compared to December 31, 1994 due to scheduled debt
payments. Long-term debt increased $1.19 billion as of June 30,
1995 compared to December 31, 1994 primarily reflecting borrowings
to support commitments associated with the Sprint
Telecommunications Venture. As of June 30, 1995, Sprint's total
capitalization aggregated $10.95 billion, consisting of long-term
debt (including current maturities), redeemable preferred stock,
and common stock and other shareholders' equity. Long-term debt
(including current maturities) comprised 55.4 percent and 52.0
percent of total capitalization as of June 30, 1995 and December
31, 1994, respectively.
Liquidity and Capital Resources
Cash Flows - Operating Activities
Cash flows from operating activities, which are Sprint's primary
source of liquidity, were $1.15 billion during the first six months
of 1995, compared to $1.12 billion during the first six months of
1994. The increase in operating cash flows generally reflects
improved operating results in all divisions and reduced working
capital requirements.
Cash Flows - Investing Activities
Sprint's investing activities used cash of $1.93 billion and $746
million during the first six months of 1995 and 1994, respectively.
Capital expenditures were $1.07 billion and $848 million during the
first six months of 1995 and 1994, respectively. Long distance
capital expenditures totaled $366 million for the first six months
of 1995 compared to $241 million for the same period in 1994. The
1995 expenditures were incurred primarily to enhance network
reliability, to upgrade capabilities for providing new products and
services and to meet increased demand for data related services.
Capital expenditures for the local division totaled $508 million
for the first six months of 1995 compared to $488 million for the
same period in 1994. The 1995 expenditures were made to
accommodate access line growth, to continue the conversion to
digital technologies, and to expand the division's capabilities for
providing enhanced telecommunications services. Capital
expenditures for the cellular and wireless division totaled $179
million for the first six months of 1995 compared to $100 million
for the same period in 1994. The 1995 expenditures were made to
support the increase in the number of cellular subscribers served
as the division constructed 144 cell sites during the first six
months of 1995.
During the first half of 1995, Sprint contributed $880 million to
the Sprint Telecommunications Venture, of which $840 million was
used to fund Sprint's portion of payments to the FCC for licenses
acquired in the PCS auction. The remaining amount of this
contribution was primarily used to fund Sprint's portion of the
venture's acquisition of a limited partnership interest in American
Personal Communications (APC), as well as related capital
requirements. APC has the pioneer preference license for the
Washington D.C. MTA and anticipates being operational in that
market during the fourth quarter of this year.
Investing activities in the first six months of 1994 included $118
million received in connection with the sale of an investment in
equity securities.
Cash Flows - Financing Activities
Cash provided by financing activities of $941 million in the first
six months of 1995 compared to cash used by financing activities of
$329 million in the comparable 1994 period. During January 1995,
$70 million of long-term debt securities were issued under a shelf
registration statement in order to reduce commercial paper
outstanding. During March 1995, Sprint issued $138 million of 8
1/4% Exchangeable Notes due March 31, 2000 in the form of 4.3
million DECS(sm) (Debt Exchangeable for Common Stock) exchangeable
into shares of Common Stock of Southern New England
Telecommunications Corporation. The remaining increase in cash
provided by financing activities consisted of proceeds from short-
term borrowings. The proceeds received from the DECS(sm) issuance
along with the short-term borrowings were primarily used to fund
commitments associated with the Sprint Telecommunications Venture
and to repay scheduled long-term debt
maturities. Long-term debt retirements during the first half of
1994 included the redemption of $102 million of debt called, prior
to scheduled maturity, in 1993.
Capital Requirements - Exclusive of Sprint Telecommunications
Venture
Although capital expenditures and dividends for the first six
months of 1995 exceeded cash flows from operating activities,
Sprint continues to anticipate that cash flows from operating
activities will be sufficient to fund capital expenditures and
dividends for the year ended December 31, 1995. Sprint currently
expects annual capital expenditures for 1995 to be approximately
$2.2 billion. This represents a $100 million increase in
anticipated capital expenditures primarily due to increased
expenditures in the long distance division as a result of the
growth in data services. Sprint expects its external cash
requirements for the remainder of 1995 to be approximately $250
million to $350 million, which is generally required to repay
scheduled long-term debt maturities and to refinance notes payable
and commercial paper. Long-term debt outstanding as of June 30,
1995 includes notes payable and commercial paper which are
classified as long-term debt due to Sprint's intent and ability to
refinance such borrowings on a long-term basis. Amounts which are
not refinanced through the issuance of longterm debt will continue
to be financed under existing credit facilities or may be reduced
through free cash flows. External cash requirements will be
financed primarily with debt, the source of which will depend upon
prevailing market conditions during the year.
Capital Requirements - Associated with Sprint Telecommunications
Venture
Sprint has entered into a joint venture with certain cable
companies to provide both wireless and wireline communications
services to consumers and businesses on a broad geographic basis
within the United States. The Sprint Telecommunications Venture
and its affiliates were successful in bidding on PCS licenses in 30
MTAs at a cost of $2.2 billion. Sprint's cash commitment
associated with the PCS licenses was approximately $890 million, of
which approximately $50 million was paid in 1994 and the remainder
was paid in the first half of 1995. Sprint estimates that its
total cash contributions to the venture will be approximately $2
billion over the first three years of operation. Sprint has
negotiated an interim credit facility of $1.3 billion to support
anticipated cash commitments associated with its investment in the
Sprint Telecommunications Venture, and had borrowed $1.1 billion
under this facility as of June 30, 1995. A portion of the cash
proceeds from the anticipated investment in Sprint by Deutsche
Telekom and France Telecom would be used to ultimately fund
commitments associated with the venture's activities.
Liquidity
As of June 30, 1995, Sprint had the ability to borrow $592 million
under revolving credit agreements with syndicates of domestic and
international banks and other bank commitments. Other available
financing sources include a Medium-Term Note program, under which
Sprint may offer for sale up to $175 million of unsecured senior
debt securities. In addition, Sprint may offer for sale
approximately $1.0 billion of debt securities pursuant to shelf
registration statements filed with the Securities and Exchange
Commission.
The aggregate amount of additional borrowings which can be incurred
is ultimately limited by certain covenants contained in existing
debt agreements. As of June 30, 1995, Sprint had borrowing
capacity of approximately $3.6 billion under the most restrictive
of its debt covenants.
The most restrictive covenant applicable to dividends results from
Sprint's revolving credit agreements. Among other restrictions,
the agreements require Sprint to maintain specified levels of
consolidated net worth, as defined. As a result of these
requirements, $1.8 billion of Sprint's $3.02 billion consolidated
retained earnings were effectively restricted from the payment of
dividends as of June 30, 1995.
General Hedging Policies
Sprint utilizes certain derivative instruments in an effort to
manage exposure to interest rate risk and foreign exchange risk.
Sprint's utilization of such derivative instruments related to
hedging activities is limited to interest rate swap agreements,
interest rate caps and forward contracts and options in foreign
currencies. As is customary for these types of derivative
instruments, Sprint does not require collateral or other security
from the counterparties to such agreements. However, because
Sprint controls its exposure to credit risk through credit
approvals, credit limits, and internal monitoring procedures,
Sprint believes that its credit risk exposure is limited.
Sprint will in no circumstance take speculative positions and
create an exposure to benefit from market fluctuations. All
hedging activity is in accordance with board-approved policies. Any
exposure related to Sprint's use of derivative instruments is
immaterial to its overall operations, financial condition and
liquidity.
PART II.
Other Information
Item 1. Legal Proceedings
There were no reportable events during the quarter ended
June 30, 1995.
Item 2. Changes in Securities
There were no reportable events during the quarter ended
June 30, 1995.
Item 3. Defaults Upon Senior Securities
There were no reportable events during the quarter ended
June 30, 1995.
Item 4. Submission of Matters to a Vote of Security Holders
On April 18, 1995, Sprint held its Annual Meeting of
Shareholders. In addition to the election of four Class III
Directors to serve for a term of three years, the shareholders
approved the appointment of Ernst & Young LLP as independent
auditors for Sprint, approved the Management Incentive Stock
Option Plan and did not approve two shareholder proposals.
The following votes were cast for each of the following
nominees for Director or were withheld with respect to such
nominees:
For Withheld
William T. Esrey 281,273,406 5,010,909
Linda Koch Lorimer 282,703,107 3,581,208
Charles H. Price II 282,787,845 3,496,470
Stewart Turley 282,962,234 3,322,081
The following votes were cast with respect to the proposal to
approve the appointment of Ernst & Young LLP as independent
auditors of Sprint for 1995:
For 282,892,944
Against 2,212,050
Abstain 1,179,321
The following votes were cast with respect to the proposal to
approve the Management Incentive Stock Option Plan:
For 240,156,409
Against 18,439,203
Abstain 2,381,515
Broker non-votes 25,307,188
The following votes were cast with respect to a shareholder
proposal requesting that the Board of Directors of Sprint
refrain from providing retirement benefits to non-employee
directors unless such benefits are submitted to the
shareholders for approval:
For 71,443,702
Against 178,147,082
Abstain 8,640,716
Broker non-votes 28,052,815
The following votes were cast with respect to a shareholder
proposal regarding the adoption of a bylaw establishing a
Stockholder Advisory Committee to review the management of the
business and affairs of the corporation by the Board of
Directors:
For 26,170,174
Against 220,533,595
Abstain 11,527,731
Broker non-votes 28,052,815
Item 5. Other Information
Sprint's ratios of earnings to fixed charges were 3.74 and
3.66 for the three months ended June 30, 1995 and 1994,
respectively, and 3.68 and 3.69 for the six months ended
June 30, 1995 and 1994, respectively. These ratios have been
computed by dividing fixed charges into the sum of (a) net
income less capitalized interest included in income, (b)
income taxes, and (c) fixed charges. Fixed charges consist of
interest on all indebtedness (including amortization of debt
issuance expenses), the interest component of operating rents
and the pre-tax cost of preferred stock dividends of
subsidiaries. In the absence of the gain on the sale of an
investment in equity securities of $22 million for the six
months ended June 30, 1994, the ratio of earnings to fixed
charges would have been 3.56 for that period.
Item 6. Exhibits and Reports on Form 8-K
(a) The following exhibits are filed as part of this
report:
(10) Material Agreements - Joint Venture:
(a) Joint Venture Agreement dated as of June 22, 1995
among Sprint Corporation, Sprint Global Venture, Inc.,
France Telecom and Deutsche Telekom AG.
(b) Investment Agreement dated as of July 31, 1995
among Sprint Corporation, France Telecom and Deutsche
Telekom AG (including as an exhibit the Stockholders'
Agreement among France Telecom, Deutsche Telekom AG
and Sprint Corporation).
(c) Standstill Agreement dated as of July 31, 1995 by
and among Sprint Corporation, France Telecom and
Deutsche Telekom AG.
(11) Computation of Earnings Per Common Share.
(12) Computation of Ratio of Earnings to Fixed Charges.
(27) Financial Data Schedule
(99) Additional Exhibits:
(a) Proposed Certificate of Amendment of Articles of
Incorporation of Sprint Corporation (in connection
with the proposed investment of France Telecom and
Deutsche Telekom AG in the equity securities of Sprint
Corporation).
(b) Proposed Amendments to the Bylaws of Sprint
Corporation (in connection with the proposed
investment of France Telecom and Deutsche Telekom AG
in the equity securities of Sprint Corporation).
(b) Reports on Form 8-K.
Sprint filed a Current Report on Form 8-K dated June 22, 1995
in which it reported that Sprint, Deutsche Telekom and France
Telecom had signed a definitive joint venture agreement for a
strategic alliance that will provide global telecommunications
services to business, consumer and carrier markets worldwide.
It also reported that the parties had reached agreement on
terms by which Deutsche Telekom and France Telecom will purchase
a 20 percent equity investment in Sprint. See "Part I -- Item 2
-- Management's Discussion and Analysis of Financial Condition
and results of Operations -- Strategic Developments" for further
discussion of this strategic alliance and related investment.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
SPRINT CORPORATION
(Registrant)
By /s/ John P. Meyer
John P. Meyer
Senior Vice President --
Controller
Principal Accounting
Officer
Dated: August 9, 1995
EXHIBIT INDEX
EXHIBIT
NUMBER
(10) Material Agreements - Joint Venture:
(a) Joint Venture Agreement dated as of June 22, 1995
among Sprint Corporation, Sprint Global Venture, Inc.,
France Telecom and Deutsche Telekom AG.
(b) Investment Agreement dated as of July 31, 1995
among Sprint Corporation, France Telecom and Deutsche
Telekom AG (including as an exhibit the Stockholders'
Agreement among France Telecom, Deutsche Telekom AG
and Sprint Corporation).
(c) Standstill Agreement dated as of July 31, 1995 by
and among Sprint Corporation, France Telecom and
Deutsche Telekom AG.
(11) Computation of Earnings Per Common Share.
(12) Computation of Ratio of Earnings to Fixed Charges.
(27) Financial Data Schedule
(99) Additional Exhibits:
(a) Proposed Certificate of Amendment of Articles of
Incorporation of Sprint Corporation (in connection
with the proposed investment of France Telecom and
Deutsche Telekom AG in the equity securities of Sprint
Corporation).
(b) Proposed Amendments to the Bylaws of Sprint
Corporation (in connection with the proposed
investment of France Telecom and Deutsche Telekom AG
in the equity securities of Sprint Corporation).
[DESCRIPTION] JOINT VENTURE AGREEMENT
<PAGE>
Exhibit 10(a)
JOINT VENTURE AGREEMENT
dated as of June 22, 1995
among
SPRINT CORPORATION,
SPRINT GLOBAL VENTURE, INC.,
FRANCE TELECOM
and
DEUTSCHE TELEKOM AG
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TABLE OF CONTENTS
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ARTICLE 1. DEFINITIONS AND CONSTRUCTION 2
Section 1.1. Certain Definitions 2
Section 1.2. Additional Definitions 28
Section 1.3. Interpretation and Construction of this
Agreement 30
ARTICLE 2. THE JOINT VENTURE 31
Section 2.1. Purpose and Scope 31
Section 2.2. Structure of the Joint Venture 32
ARTICLE 3. THE GLOBAL VENTURE BOARD, THE GLOBAL VENTURE
COMMITTEE AND THE GLOBAL VENTURE OFFICE 33
Section 3.1. Composition and Responsibilities of the
Global Venture Board 33
Section 3.2. Responsibility for Global and Regional
Functions 36
Section 3.3. Global Staff 36
Section 3.4. Delegation of Authority by the Global
Venture Board 36
Section 3.5. Formation of Regional Networks 36
Section 3.6. Composition and Responsibilities of the
Global Venture Committee 37
Section 3.7. Composition and Responsibilities of the
Global Venture Office 38
Section 3.8. Senior Strategic Planning Officer 38
Section 3.9. Expenses of Global Venture Board, Global
Venture Committee and Global Venture
Office, Etc. 38
Section 3.10 General Governance Provisions 38
ARTICLE 4. THE ROW GROUP 39
Section 4.1. Purpose and Scope of the ROW Group 39
Section 4.2. Formation of the ROW Parent Entity 40
Section 4.3. Composition of the ROW Board 41
Section 4.4. Actions Requiring Unanimous Vote 41
Section 4.5. ROW Officers 43
Section 4.6. Other ROW Entities 43
ARTICLE 5. THE ROE GROUP 44
Section 5.1. Purpose and Scope of the ROE Group 44
Section 5.2. Formation of the ROE Parent Entity 45
Section 5.3. Composition of the ROE Board 45
Section 5.4. Actions Requiring Unanimous Vote 46
Section 5.5. ROE Officers 47
Section 5.6. Other ROE Entities 48
ARTICLE 6. THE GLOBAL BACKBONE NETWORK 48
Section 6.1. Purpose and Scope of the GBN Group 48
Section 6.2. Formation of the GBN Parent Entity 49
Section 6.3. Composition of the GBN Board 50<PAGE>
Section 6.4. Actions Requiring Unanimous Vote 50
Section 6.5. GBN Officers 52
Section 6.6. Other GBN Entities 52
ARTICLE 7. GOVERNANCE PROVISIONS 53
Section 7.1. Meetings; Quorum; Notice 53
Section 7.2. Removal; Resignation; Vacancies 55
Section 7.3. No Remuneration 55
ARTICLE 8. SPECIAL MATTERS, PLAN ACTIONS AND DEADLOCKS 56
Section 8.1. GBN Special Matters 56
Section 8.2. NAFTA Plan Actions 57
Section 8.3. ROE Plan Actions 60
Section 8.4. Closing of Purchase of Project 63
Section 8.5. Deadlocks 65
Section 8.6. No Impasse Period 70
ARTICLE 9. HOME COUNTRY ACTIVITIES 71
Section 9.1. General 71
Section 9.2. Conformity to Venture Policies 71
ARTICLE 10. OTHER ACTIVITIES BY THE PARTIES AND THE JOINT
VENTURE 71
Section 10.1. In General 71
Section 10.2. Non-Competition Obligations 71
Section 10.3. National Operations; Public
Telephone Operators 73
Section 10.4 Non-Competition Exceptions 75
Section 10.5 Review of Excluded Businesses 80
Section 10.6 Passive Sales; Customer Preferences, Etc. 81
Section 10.7 Home Country Activities 82
ARTICLE 11. CONTRIBUTIONS TO JV ENTITIES; ASSUMED
LIABILITIES 82
Section 11.1. Initial Capital Contributions; Assumed
Liabilities 82
Section 11.2. Contributions of Venture Interests to
Sprint Sub and Atlas 83
Section 11.3. Additional Capital of the Venture 83
Section 11.4 Failure to Make Additional Capital
Contributions 84
ARTICLE 12. CLOSING 86
Section 12.1. Closing 86
Section 12.2. Termination Prior to Closing 87
ARTICLE 13. CONDITIONS TO CLOSING 88
Section 13.1. Conditions to Each Party's Obligations 88
Section 13.2. Conditions to the Obligations of Sprint
and Sprint Sub 92
Section 13.3. Conditions to the Obligations of FT and
DT 93
ARTICLE 14. REPRESENTATIONS AND WARRANTIES 94
Section 14.1. Representations and Warranties of Sprint
and Sprint Sub 94
Section 14.2. Representations and Warranties of FT 96
Section 14.3. Representations and Warranties of DT 100
Section 14.4. Representations and Warranties of FT and
DT With Respect To Atlas 103
Section 14.5. Affiliates 105
ARTICLE 15. COVENANTS 105
Section 15.1. Conduct of Business 105
Section 15.2. Cooperation; Compliance with Laws 106
Section 15.3. Access 106
Section 15.4. Financial Information 107
Section 15.5. Books and Records 107
Section 15.6. No Solicitation 107
Section 15.7. Further Assurances 108
Section 15.8. JV Entity Default 108
Section 15.9. Indemnification 108
Section 15.10. Claims on Behalf of JV Entities 112
Section 15.11. Sales by FT or DT to a Major
Competitor of Sprint 112
Section 15.12. Covenants of FT and DT Regarding
Atlas 113
Section 15.13. Covenants of Sprint, FT and DT
Regarding Ownership of Venture
Interests 116
Section 15.14. Commitment of Sprint, FT and DT to
the Joint Venture 117
Section 15.15. Effect of Applicable Law 118
Section 15.16. Ownership of Equity Interests in
Sprint, FT and DT 118
Section 15.17. Employee Matters Agreement 118
Section 15.18. Transfer Agreements 118
Section 15.19. Intellectual Property Agreements 118
Section 15.20. Miscellaneous Services Agreement 119
Section 15.21. Equipment Housing and Facilities
Management Agreement 119
Section 15.22. Facilities and Equipment Lease Agreement 119
Section 15.23. Global Backbone Network Services
Agreement 119
Section 15.24. Operating Entities Services Agreement 119
Section 15.25. Route Management Agreement 119
Section 15.26. X.75 Interconnect Management Agreement 120
Section 15.27. GBN Shareholders Agreement 120
Section 15.28. ROW Shareholders Agreement 120
Section 15.29. ROE Shareholders Agreement 120
Section 15.30. Constituent Documents 120
Section 15.31. Joint Venture Confidentiality Agreement 120
Section 15.32. Atlas/ROE Services Agreement 120
Section 15.33. Tax Matters Agreement 120
Section 15.34. Plan Action/Special Matter
Accounting Principles 121
Section 15.35. Governmental Approval for
Pre-Closing Activities 121
Section 15.36. Delayed Delivery of Schedules
and Review Period 121
Section 15.37. Funding Principles 122
Section 15.38. Approval of Sprint Continuing Directors 122
ARTICLE 16. CERTAIN OPERATIONAL MATTERS 123
Section 16.1. Strategic and Business Plans 123
Section 16.2. Accounting Matters 125
Section 16.3. Export Control Laws 126
Section 16.4. Notification of Certain Matters 126
Section 16.5. Currency 126
Section 16.6. Compliance with Laws 127
Section 16.7. Employees of the Joint Venture 127
Section 16.8. Affiliation Procedures 127
ARTICLE 17. CHANGE OF CONTROL; MAJOR COMPETITOR 129
Section 17.1. Sprint Change of Control 129
Section 17.2. Sprint Offer Right 129
Section 17.3. Sprint Put Right 130
Section 17.4. Sprint Transaction With Major Competitor
of FT/DT 130
Section 17.5. Atlas Transaction With Major Competitor
of Sprint 131
Section 17.6. Effect of Failure to Obtain Governmental
Approvals 131
Section 17.7. Closing of Purchase of Venture Interests 131
Section 17.8. Determination of Appraised Value 132
ARTICLE 18. TIE-BREAKING VOTE 133
Section 18.1. Tie-Breaking Vote 133
Section 18.2. GBN Special Matters, NAFTA Plan Actions
and ROE Plan Actions 136
ARTICLE 19. TRANSFERS OF VENTURE INTERESTS 136
Section 19.1. Transfer Prohibitions 136
Section 19.2. Permitted Transfers 136
Section 19.3. Transfers Subject to Right of First
Refusal 137
ARTICLE 20. TERM AND TERMINATION; DEFAULT 140
Section 20.1. Term of JV Entities 140
Section 20.2. Tie-Breaking Vote Upon Certain Defaults,
Etc. 140
Section 20.3. Termination of Joint Venture 143
Section 20.4. Termination Notice 144
Section 20.5. Termination Upon Default, Etc. 144
Section 20.6. Termination Upon Regulatory Action,
Impasse or Mutual Consent 147
Section 20.7. Buy/Sell Arrangements 147
Section 20.8. Closing 149
Section 20.9. Waiver of Right to Terminate 149
Section 20.10. Assignment of Rights 149
Section 20.11. Special Put Rights 150
ARTICLE 21. ARBITRATION 152
Section 21.1. Agreement to Arbitrate 152
Section 21.2. Joinder; Intervention; Cross Claims 154
Section 21.3. Effect of Joinder and Intervention 155
Section 21.4. Selection of Arbitrators 155
Section 21.5. Arbitration Proceedings 156
Section 21.6. Decision of the Arbitrators 157
Section 21.7. Injunctive Relief 158
Section 21.8. Other Section 21.1 Agreements 158
ARTICLE 22. POST-TERMINATION PROVISIONS 159
Section 22.1. Consequences of Termination 159
Section 22.2. Transition Plan 159
ARTICLE 23. MISCELLANEOUS 159
Section 23.1. Notices 159
Section 23.2. Applicable Law 161
Section 23.3. Severability 161
Section 23.4. Amendments 162
Section 23.5. Waiver 162
Section 23.6. Counterparts 162
Section 23.7. Entire Agreement 162
Section 23.8. No Assignment 162
Section 23.9. Expenses 162
Section 23.10. No Third-Party Beneficiaries 163
Section 23.11. Publicity 163
Section 23.12. Construction 163
Section 23.13. Disclaimer of Agency 163
Section 23.14. Waiver of Immunity 163
Section 23.15. Language 164
Section 23.16. Effect of Force Majeure Event 164
Section 23.17. Relationship of the Parties 164
Section 23.18. Interest 165
Section 23.19. Fiduciary Duties 165
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SCHEDULES
Schedule 1.1(a) -- Calculation of Applicable LIBOR Rate
Schedule 1.1(b) -- Initially Excluded Businesses
Schedule 1.1(c) -- JV Services
Schedule 1.1(d) -- Major Competitors of Sprint For Purposes
of Sections 13.2(g) and 15.11
Schedule 1.1(e) -- ROE Territory
Schedule 2.1(c) -- Non-Exclusive Services
Schedule 3.2 -- Allocation of Global Functions
Schedule 10.4(o) -- Eunetcom Customer Contracts
Schedule 11.1(a) -- Contributed Assets
Schedule 13.1(a)(viii) -- Governmental Approvals Relating to Atlas
Schedule 13.2(f)(i) -- FT Joint Venture Opinions
Schedule 13.2(f)(ii) -- DT Joint Venture Opinions
Schedule 13.2(f)(iii) -- Atlas Joint Venture Opinions
Schedule 13.3(f)(i) -- Sprint Joint Venture Opinions
Schedule 13.3(f)(ii) -- Sprint Sub Joint Venture Opinions
Schedule 14.1(c) -- Sprint Governmental Approvals
Schedule 14.1(e) -- Litigation Involving Sprint and Sprint
Sub
Schedule 14.2(a)(iii) -- FT Governmental Approvals
Schedule 14.2(a)(v) -- Litigation Involving FT
Schedule 14.2(b)(ii) -- FT Governmental Approvals Relating to
Atlas
Schedule 14.3(a)(iii) -- DT Governmental Approvals
Schedule 14.3(a)(v) -- Litigation Involving DT
Schedule 14.3(b)(ii) -- DT Governmental Approvals Relating to
Atlas
Schedule 14.4(c) -- Atlas Governmental Approvals
Schedule 14.4(e) -- Litigation Involving Atlas
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EXHIBITS
Exhibit 15.18 -- Term Sheet for Master Transfer Agreement
Exhibit 15.19 -- Term Sheets for Intellectual Property
Agreements
Exhibit 15.20 -- Term Sheet for Miscellaneous Services
Agreement
Exhibit 15.21 -- Term Sheet for Equipment Housing and
Facilities Management Agreement
Exhibit 15.22 -- Term Sheet for Facilities and Equipment
Lease Agreement
Exhibit 15.23 -- Term Sheet for Global Backbone Network
Services Agreement
Exhibit 15.24 -- Term Sheet for Operating Entities
Services Agreement
Exhibit 15.25 -- Term Sheet for Route Management Agreement
Exhibit 15.26 -- Term Sheet for X.75 Interconnect
Management Agreement
Exhibit 15.32 -- Term Sheet for Atlas/ROE Services
Agreement
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JOINT VENTURE AGREEMENT
THIS JOINT VENTURE AGREEMENT (this "Agreement"), dated as of
June 22, 1995, by and among SPRINT CORPORATION, a Kansas
corporation ("Sprint"), SPRINT GLOBAL VENTURE, INC., a Kansas
corporation and a wholly owned subsidiary of Sprint ("Sprint
Sub"), FRANCE TELECOM, an exploitant public formed under the laws
of France ("FT"), and DEUTSCHE TELEKOM AG, an Aktiengesellschaft
formed under the laws of Germany ("DT");
W I T N E S S E T H:
WHEREAS, there have been dramatic changes in the
telecommunications industry;
WHEREAS, it is anticipated that there will be further changes
in the telecommunications industry in view of ongoing
liberalization and deregulation;
WHEREAS, alliances of telecommunications operators have been
announced and are in the process of formation or implementation;
WHEREAS, Sprint, FT and DT have entered into a Memorandum of
Understanding dated June 14, 1994 (the "MOU"), have engaged in
significant planning activities and have developed a common vision
regarding the establishment of a telecommunications joint venture
which is intended to be preeminent in certain market segments;
WHEREAS, Sprint, FT and DT desire to satisfy the needs of
existing and future customers throughout the world, including
multinational corporations, other large users, corporate and
business customers and international travelers, by providing
seamless global telecommunications services;
WHEREAS, meeting the global needs of such customers requires
capabilities which are beyond the geographic coverage, know-how
and resources of Sprint, FT or DT alone;
WHEREAS, Sprint, FT and DT share a common vision of the
future and of the opportunities which can be realized for their
customers and themselves by their undertaking joint activity, and
have prepared the Phoenix Telecom Strategic Plan, which reflects
such vision;
WHEREAS, FT and DT have agreed to form a joint venture
("Atlas") which will provide advanced telecommunications services
to corporate customers and other large users;
WHEREAS, Sprint, Sprint Sub, FT and DT wish to form the Joint
Venture, to which Atlas, when formed, will also be a party, to
provide telecommunications services and to pursue various
telecommunications opportunities around the globe;
WHEREAS, Sprint, FT and DT intend that the Joint Venture be
preeminent in global communications, the standard against which
others are measured, and that the Joint Venture provide highly
competitive, functionally differentiated, global
telecommunications services more cost effectively, more
efficiently and more rapidly than they each could provide alone;
WHEREAS, Sprint, FT and DT intend that the Joint Venture
permit the introduction of new, sophisticated global
telecommunications services effectively, efficiently and rapidly;
provide a range of more comprehensive and technically advanced
services; avoid unnecessary duplication of efforts; lead to
improved technical solutions; create greater choices for
customers; and meet customer needs more effectively;
WHEREAS, Sprint, FT and DT intend that the Joint Venture
adopt and pursue policies and strategies for the branding of JV
Services that further the objectives of the Joint Venture as well
as those of Sprint, FT and DT outside of the Joint Venture; and
WHEREAS, in furtherance of the objectives set forth above,
the Parties desire to enter into this Agreement and the other
Operative Agreements.
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements contained
herein and in the other Operative Agreements, and for other good
and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Parties, intending to be legally
bound, hereby agree as follows:
ARTICLE 1.
DEFINITIONS AND CONSTRUCTION
Section 1.1. Certain Definitions. As used in this
Agreement, the following terms shall have the meanings specified
below:
"Affiliate" shall mean, with respect to any Person, any other
Person that directly, or indirectly through one or more
intermediaries, Controls or is Controlled by, or is under common
Control with, such Person. For purposes of this Agreement, (i)
none of Sprint, FT, DT or Atlas or their respective Subsidiaries
shall be deemed Affiliates of any JV Entity, (ii) Sprint and its
Subsidiaries, FT and its Subsidiaries and DT and its Subsidiaries
shall not be deemed Affiliates of each other, (iii) Atlas shall be
deemed an Affiliate of each of FT and DT, (iv) the term
"Affiliate" shall not include any Governmental Authority of France
or Germany or any Person Controlled by any such Governmental
Authority, except for FT and DT and any Person that directly, or
indirectly through one or more intermediaries, is Controlled by FT
or DT, and (v) any agreement herein that Atlas or any other
Qualified Venture Subsidiary of FT and DT (as a Party hereunder)
shall cause any of its Affiliates to take or refrain from taking
any action shall not be construed as obligating Atlas (or such
other Qualified Venture Subsidiary) to cause any such Affiliate
which is not a Controlled Affiliate of Atlas or such Qualified
Venture Subsidiary to take or refrain from taking such action.
"Affiliated National Operation" shall mean a National
Operation (i) in which a JV Entity has Invested or Participated
pursuant to Section 10.3(f), (ii) which is subject to an
Affiliation Agreement with the Joint Venture pursuant to Section
10.3(e), or (iii) which is otherwise affiliated by Contract with
the Joint Venture on such terms and conditions as the Global
Venture Board determines causes such National Operation to be an
Affiliated National Operation for purposes of this Agreement.
"Affiliated Public Telephone Operator" shall mean a Public
Telephone Operator (i) in which a JV Entity has Invested or
Participated pursuant to Section 10.3(f), (ii) which is subject to
an Affiliation Agreement with the Joint Venture pursuant to
Section 10.3(e), or (iii) which is otherwise affiliated by
Contract with the Joint Venture on such terms and conditions as
the Global Venture Board determines causes such Public Telephone
Operator to be an Affiliated Public Telephone Operator for
purposes of this Agreement.
"Affiliation Agreement" shall mean, with respect to a GBN
Special Matter Project, a National Operation, a Public Telephone
Operator, a NAFTA Plan Action Project or an ROE Plan Action
Project, an agreement entered into in accordance with Section
16.8.
"Americas" shall mean North America, South America and
Central America and the countries, territories and possessions
located in the Caribbean region (other than the territories and
possessions of France).
"Answer" shall have the meaning set forth in the ICC Rules.
"Applicable Law" shall mean all applicable provisions of all
(i) constitutions, treaties, statutes, laws (including common
law), rules, regulations, ordinances or codes of any Governmental
Authority, and (ii) orders, decisions, injunctions, judgments,
awards and decrees of any Governmental Authority.
"Applicable LIBOR Rate" shall mean, during any period during
which interest based on the Applicable LIBOR Rate is due and
payable, the annual rate of interest determined in accordance with
Schedule 1.1(a).
"Approval" shall mean any consent, approval, license, permit
or authorization.
"Assumed Liabilities" shall mean the FT International
Liabilities, the DT International Liabilities and the Sprint
International Liabilities.
"Atlas Joint Venture Agreement" shall mean the Joint Venture
Agreement between FT and DT dated as of December 15, 1994 relating
to the Atlas joint venture between FT and DT (without regard to
any amendment thereto after such date unless any such amendment is
permitted by Section 15.12).
"Atlas Joint Venture Documents" shall mean the Atlas Joint
Venture Agreement and the DBPT Collateral Agreements, the FT
Collateral Agreements, the Statuts and the Shareholders Agreement
(as such terms are defined in the Atlas Joint Venture Agreement).
"Atlas/ROE Services Agreement" shall mean the Atlas/ROE
Services Agreement to be mutually agreed to by the Parties and
entered into by Atlas and the ROE Group pursuant to Section 15.32.
"Atlas Signing Date" shall mean the date on which Atlas
becomes a party to this Agreement pursuant to Section 15.12(b).
"Atlas Transactions" shall mean the transactions contemplated
by the Atlas Joint Venture Documents.
"Bankruptcy" shall mean, with respect to any Person, (i) the
commencement, under any bankruptcy, reorganization, arrangement,
adjustment of debt, relief of debtors, dissolution, insolvency or
liquidation or similar Applicable Law of any jurisdiction, whether
now or hereafter in effect, by such Person of a case or proceeding
seeking (A) the entry as to such Person of an order of relief, (B)
such Person's own bankruptcy, liquidation, reorganization,
rehabilitation or composition or adjustment of debts, or (C) a
suspension or moratorium of payments; (ii) the commencement
against such Person of any case or proceeding of the type
described in clause (i) of this definition which remains
undismissed for a period of sixty (60) days; (iii) the appointment
of a custodian, trustee, administrator or similar official under
any Applicable Law described in clause (i) of this definition with
respect to such Person, or the taking charge by such custodian,
trustee, administrator or similar official, of all or any
substantial part of the property of such Person; (iv) any
adjudication that such Person is insolvent or bankrupt; (v) the
entering of any order of relief in, or other order approving, any
case or proceeding of the type described in clause (i) of this
definition; (vi) the making by such Person of a general assignment
for the benefit of its creditors; (vii) the failure by such Person
to pay, or the statement by such Person that it is unable to pay,
or shall be unable to pay, its debts generally as they become due;
(viii) the calling by such Person of a meeting of its creditors
with a view to arranging a composition or adjustment of its debts;
(ix) any indication by such Person, either by an act or failure to
act, of its consent to, approval of or acquiescence in, any of the
actions, orders or events described in the foregoing clauses of
this definition; or (x) the taking of any corporate or similar
action by such Person for the purpose of effecting any of the
actions, orders or events described in the foregoing clauses of
this definition.
"Burdensome Condition" shall mean any requirement or
condition that: (a)(i) imposes any material limitation on the
ability or right of FT, DT or Sprint or any of its Subsidiaries to
hold, or requires FT, DT or Sprint or any of its Subsidiaries to
dispose of, any material interest in any material portion of the
assets of FT, DT or Sprint and its Subsidiaries taken as a whole,
(ii) imposes any material limitation on the ability or right of
FT, DT or any of its Subsidiaries to contribute to Atlas any
material portion of the assets to be contributed to Atlas and its
Subsidiaries taken as a whole pursuant to the Atlas Joint Venture
Documents, or (iii) imposes any material limitation on the ability
or right of Atlas or any of its Subsidiaries to hold, or requires
Atlas or any of its Subsidiaries to dispose of, any material
interest in any material portion of the assets of Atlas and its
Subsidiaries taken as a whole (including the assets to be
contributed to Atlas and its Subsidiaries pursuant to the Atlas
Joint Venture Documents); (b)(i) imposes any material limitation
on the ability or right of FT, DT or Sprint or any of its
Subsidiaries to conduct any business (other than the investment
contemplated by the Investment Agreement, the Transactions or the
Atlas Transactions) which it or any of its Subsidiaries has
publicly announced as of the date hereof an intention to conduct
and which business is material in relation to FT, DT or Sprint and
its Subsidiaries taken as a whole or (ii) imposes any material
limitation on the ability or right of Atlas or any of its
Subsidiaries to conduct any business (other than the Transactions
or the Atlas Transactions) which Atlas or any of its Subsidiaries
has publicly announced as of the date hereof an intention to
conduct and which business is material in relation to Atlas and
its Subsidiaries taken as a whole; (c) materially limits the
ability or right of FT, DT, Atlas, Sprint or Sprint Sub to acquire
or hold, or requires FT, DT, Atlas, Sprint or Sprint Sub to
dispose of, any material interest in the GBN Group or a Regional
Operating Group; (d) materially limits the ability or right of FT,
DT, Atlas, Sprint or Sprint Sub to exercise its governance rights
with respect to the Joint Venture or any of the JV Entities; (e)
otherwise would have a Material Adverse Effect on the Joint
Venture or is materially adverse to the ability of FT, DT, Atlas,
Sprint or Sprint Sub to receive the economic benefits of the Joint
Venture; (f) materially and adversely affects the ability of FT,
DT, Atlas, Sprint or Sprint Sub to perform its obligations under,
or puts in doubt in any material respect the validity of, this
Agreement, the Intellectual Property Agreements, the Global
Backbone Network Services Agreement, the Operating Entities
Services Agreement, the Route Management Agreement, the
Shareholders Agreements, the Tax Matters Agreement or the Master
Transfer Agreement; or (g)(i) otherwise would have a Material
Adverse Effect on FT, DT or Sprint and its Subsidiaries taken as a
whole or (ii) otherwise would have a Material Adverse Effect on
Atlas and its Subsidiaries taken as a whole (any of the foregoing,
"Burdensome Condition"); provided that, subject to Section
15.2(d), if each foregoing Party so affected, directly or
indirectly, by any condition or requirement (or, in the case of a
Subsidiary so affected, the Parent or Parents thereof that are a
Party or Parties) provides a notice to each other Party stating
that such condition or requirement shall no longer be deemed a
Burdensome Condition, such condition or requirement shall no
longer be deemed a Burdensome Condition for any purpose under this
Agreement; provided, further, that, following the Closing Date, no
requirement or condition of a type described in clause (a)(ii),
(a)(iii), (b)(ii) or (g)(ii) shall constitute a Burdensome
Condition; and provided, further, that no Party may declare a
Burdensome Condition under clause (b) if the material limitation
described therein is imposed pursuant to Section 310(b) of the
Communications Act due to the investment contemplated by the
Investment Agreement and such material limitation would not be
imposed but for the investment contemplated by the Investment
Agreement.
"Business Day" shall mean any day other than a day on which
commercial banks in The City of New York, Paris, France or
Frankfurt am Main, Germany are required or authorized by
Applicable Law to be closed.
"Business Plan," with respect to a Regional Operating Group,
shall mean the Closing Business Plan of such group, and with
respect to a Regional Operating Group and the GBN Group, each
rolling three-year plan prepared annually for such group pursuant
to Section 16.1(c) and approved or otherwise implemented as
provided herein.
"Certified Public Accountants" shall mean the independent
public accountants selected by the Global Venture Board for the
Joint Venture and the JV Entities.
"Class A Holder Eligible Note" shall have the meaning set
forth in Article I of the Stockholders' Agreement.
"Closing" shall mean the making of certain transfers of
Transferred Assets and liabilities by the Sprint Parties and their
Affiliates and the FT/DT Parties and their Affiliates to the
relevant JV Entities pursuant to Section 11.1 and the consummation
of those Transactions contemplated by Section 12.1(b) to be
consummated simultaneously therewith on the Closing Date.
"Closing Business Plan," with respect to a Regional Operating
Group, shall mean the Business Plan of such group prepared
pursuant to Section 16.1(a) and approved or otherwise implemented
as provided herein.
"Closing Date" shall mean the date on which the Closing shall
occur.
"Communications Act" shall mean the United States
Communications Act of 1934.
"Company Eligible Note" shall have the meaning set forth in
Article I of the Stockholders' Agreement.
"Competing Person" shall mean any Person which substantially
competes (directly or indirectly through its Affiliates) with the
JV Services (such as American Telephone & Telegraph Co., British
Telecommunications plc or MCI Communications Corporation).
"Competing Services" shall mean (a) the JV Services, (b) any
services within the scope of the International Telecommunications
Services Business Offered pursuant to a NAFTA Plan Action in the
NAFTA Countries or an ROE Plan Action in the ROE Territory, and
(c) any services substantially similar to, or substitutable for or
competing with, the foregoing services, including the Restricted
Services.
"Constituent Documents" shall mean the GBN Constituent
Documents, the ROW Constituent Documents and the ROE Constituent
Documents.
"Contract" shall mean any loan or credit agreement, note,
bond, indenture, mortgage, deed of trust, lease, franchise,
contract, or other agreement, obligation, instrument or binding
commitment of any nature.
"Contributing Affiliate" shall mean any Party's Affiliate
which transfers Transferred Assets to any of the JV Entities
pursuant to the Operative Agreements on the Closing Date.
"Control" (including, with its correlative meanings,
"Controlled by" and "under common Control with") shall mean, with
respect to any Person, any of the following: (i) ownership,
directly or indirectly, by such Person of equity securities
entitling it to exercise in the aggregate more than 50% (20% for
purposes of the definition of "Exempt Related Party Transaction")
of the voting power of the entity in question, or (ii) the
possession by such Person of the power, directly or indirectly,
(A) to elect a majority of the board of directors (or equivalent
governing body) of the entity in question; or (B) to direct or
cause the direction of the management and policies of or with
respect to the entity in question, whether through ownership of
securities, by Contract or otherwise.
"Controlled Affiliate" shall mean, when used with respect to
a specified Person, any Affiliate which is Controlled by the
Person specified.
"Deadlock" shall mean a failure of the Global Venture Board,
the Global Venture Committee, the Global Venture Office or any
Governing Board to reach a decision with respect to any agenda
item, after a vote has been taken, by the requisite vote of the
voting representatives on the Global Venture Board, the Global
Venture Committee, the Global Venture Office or such Governing
Board, as the case may be.
"Defaulting European Party" shall mean (i) FT and any Wholly
Owned Subsidiary of FT holding Venture Interests as permitted by
this Agreement in the case of a Funding Default or Material Non-
Funding Default by, or Bankruptcy of, FT or any such Wholly Owned
Subsidiary of FT or (ii) DT and any Wholly Owned Subsidiary of DT
holding Venture Interests as permitted by this Agreement in the
case of a Funding Default or Material Non-Funding Default by, or
Bankruptcy of, DT or any such Wholly Owned Subsidiary of DT.
"Disputant" shall mean any Party to this Agreement or any
party to one or more of the other Section 21.1 Agreements that has
filed a Request for Arbitration, has been named a defendant, has
been joined, or has intervened in an arbitration proceeding
initiated pursuant to Article 21 hereunder.
"Dispute" shall mean (i) any dispute, controversy or claim
arising out of or relating to this Agreement, any other Operative
Agreement or any other agreement entered into by the Parties,
their Affiliates or the JV Entities relating to the Joint Venture
or any transactions contemplated hereby or thereby which expressly
provides that disputes shall be resolved as provided in Article 21
of this Agreement (each of the foregoing agreements, a "Section
21.1 Agreement"), based upon an alleged failure of a Party or any
of its Affiliates or any JV Entity to perform any of its
obligations under a Section 21.1 Agreement, or (ii) a disagreement
described in Section 16.8(d); provided that a "Dispute" shall not
include a Deadlock. For purposes of this Agreement, a
disagreement as to whether any dispute, controversy or claim is a
Dispute or Deadlock shall be deemed to be a "Dispute."
"DT GBN Assets" shall mean those assets, if any, of DT and
its Affiliates which the Parties identify as DT GBN Assets on or
prior to the Closing Date.
"DT GBN Liabilities" shall mean those obligations,
responsibilities and liabilities, if any, of DT and its Affiliates
which the Parties identify as DT GBN Liabilities on or prior to
the Closing Date.
"DT Intellectual Property Agreements" shall mean the
Intellectual Property Agreements to be mutually agreed to by the
Parties and entered into by DT and its Contributing Affiliates and
the GBN Group, the ROW Group and the ROE Group, respectively,
pursuant to Section 15.19.
"DT International Assets" shall mean the DT GBN Assets, the
DT ROW Assets and the DT ROE Assets.
"DT International Liabilities" shall mean the DT GBN
Liabilities, the DT ROW Liabilities and the DT ROE Liabilities.
"DT ROE Assets" shall mean those assets of DT and its
Affiliates which the Parties identify as DT ROE Assets on or prior
to the Closing Date.
"DT ROE Liabilities" shall mean those obligations,
responsibilities and liabilities of DT and its Affiliates which
the Parties identify as DT ROE Liabilities on or prior to the
Closing Date.
"DT ROW Assets" shall mean those assets of DT and its
Affiliates which the Parties identify as DT ROW Assets on or prior
to the Closing Date.
"DT ROW Liabilities" shall mean those obligations,
responsibilities and liabilities of DT and its Affiliates which
the Parties identify as DT ROW Liabilities on or prior to the
Closing Date.
"DT Transfer Agreements" shall mean the Transfer Agreements
to be mutually agreed to by the Parties and entered into by DT and
its Contributing Affiliates and the GBN Group, the ROW Group and
the ROE Group, respectively, pursuant to Section 15.18.
"Employee Matters Agreement" shall mean one or more
agreements to be mutually agreed to by the Parties and entered
into pursuant to Section 15.17.
"Equipment Housing and Facilities Management Agreement" shall
mean the Equipment Housing and Facilities Management Agreement to
be mutually agreed to by the Parties and entered into pursuant to
Section 15.21.
"ESMR" means any commercial mobile radio service, and the
resale of such service, of the type authorized under the rules for
Specialized Mobile Radio Services designated under Subpart S of
Part 90 of the FCC's rules or similar Applicable Laws of any other
country in effect on the date hereof, including the networking,
marketing, distribution, sales, customer interface and operations
functions relating thereto.
"Eunetcom" shall mean eunetcom B.V., a Dutch company jointly
held by DT and FT, and the Affiliates of eunetcom B.V.
"Event of Force Majeure" shall mean (i) an act of God or
public enemy, fire, explosion, perils of the sea, lightning,
earthquake, storm, flood, declared or undeclared war, revolution,
insurrection, riot, act of piracy, act of terrorism, sabotage,
blockade, embargo, accident, epidemic or quarantine, (ii) action
by a Governmental Authority which prevents or delays performance
of such Party's obligations under the relevant Operative
Agreement, or (iii) a strike, lockout or other labor unrest
resulting from any cause and whether or not the demands of the
employees involved are reasonable or within any Party's power to
concede.
"Excluded Business" shall mean any of the businesses and
investments which are listed on Schedule 1.1(b).
"Exempt Related Party Transaction" shall mean any transaction
in which a Party or any of its Affiliates provides products or
services to or obtains products or services from a JV Entity,
including any transaction pursuant to an Exempt Service Contract,
provided that the aggregate dollar amount involved in all such
transactions between a Regional Operating Group or the GBN Group,
on the one hand, and the Sprint Parties and their Affiliates or
the FT/DT Parties and their Affiliates, on the other hand, during
any rolling twelve-month period shall not exceed U.S. $5,000,000,
and provided, further, that neither entering into an Operative
Agreement nor effecting a transaction pursuant to an Operative
Agreement shall be considered an Exempt Related Party Transaction.
"Exempt Service Contract" shall mean a Contract between a JV
Entity and a Party or any of its Affiliates under which such Party
or any of its Affiliates provides products or services to or
obtains products or services from a JV Entity and (i) relates to
products or services of a type which are similar to the types of
products or services covered by a Services Agreement and (ii) is
consistent in all material respects with the principles set forth
in such Services Agreement.
"Existing Confidentiality Agreement" shall mean the
Confidentiality Agreement dated as of February 2, 1994 among FT,
DT and Sprint.
"Exon-Florio" shall mean Section 721 of the Defense
Production Act of 1950 and the rules promulgated thereunder.
"Facilities and Equipment Lease Agreement" shall mean the
Facilities and Equipment Lease Agreement to be mutually agreed to
by the Parties and entered into pursuant to Section 15.22.
"Fair Price Provisions" shall mean the Fair Price Provisions
as defined in the Stockholders' Agreement.
"FCC" shall mean the United States Federal Communications
Commission.
"Fiscal Year" shall mean the period commencing January 1 in
any year and ending on December 31 in such year, except that the
first Fiscal Year with respect to each GBN Entity, ROW Entity and
ROE Entity shall commence on the Closing Date and end on
December 31 of the year in which the Closing Date occurs.
"France" shall mean the Republic of France and its
territories and possessions.
"FT/DT Parties" shall mean (i) FT and DT, (ii) Atlas, upon
execution by Atlas of a counterpart to this Agreement as required
pursuant to Section 15.12(b), (iii) any other Qualified Venture
Subsidiary of the FT/DT Parties, and (iv) any Permitted Transferee
of FT, DT, Atlas or any other Qualified Venture Subsidiary of the
FT/DT Parties, upon execution by such Person of a counterpart to
this Agreement to the extent required pursuant to Section 19.2.
"FT/DT Venture Interests" shall mean the Venture Interests of
the FT/DT Parties.
"FT GBN Assets" shall mean those assets, if any, of FT and
its Affiliates which the Parties identify as FT GBN Assets on or
prior to the Closing Date.
"FT GBN Liabilities" shall mean those obligations,
responsibilities and liabilities, if any, of FT and its Affiliates
which the Parties identify as FT GBN Liabilities on or prior to
the Closing Date.
"FT Intellectual Property Agreements" shall mean the
Intellectual Property Agreements to be mutually agreed to by the
Parties and entered into by FT and its Contributing Affiliates and
the GBN Group, the ROW Group and the ROE Group, respectively,
pursuant to Section 15.19.
"FT International Assets" shall mean the FT GBN Assets, the
FT ROW Assets and the FT ROE Assets.
"FT International Liabilities" shall mean the FT GBN
Liabilities, the FT ROW Liabilities and the FT ROE Liabilities.
"FT Law and Decrees" shall mean (i) Loi n 90-568 du 2
juillet 1990 relative a l'organisation du service public de la
poste et des telecommunications (as amended by Loi n 91-1406 du
31 decembre 1991 portant diverses dispositions d'ordre social),
(ii) Decret n 90-1112 du 12 decembre 1990 portant statut de
France Telecom (as amended by Decret n 95-460 du 25 avril 1995
modifiant le decret n 90-1112 du 12 decembre 1990 portant statut
de France Telecom), (iii) Decret n 90-1213 du 29 decembre 1990
relatif au cahier des charges de France Telecom et au code des
postes et telecommunications, and (iv) Decret n 94-185 du 24
fevrier 1994 approuvant une modification du cahier des charges de
France Telecom.
"FT ROE Assets" shall mean those assets of FT and its
Affiliates which the Parties identify as FT ROE Assets on or prior
to the Closing Date.
"FT ROE Liabilities" shall mean those obligations,
responsibilities and liabilities of FT and its Affiliates which
the Parties identify as FT ROE Liabilities on or prior to the
Closing Date.
"FT ROW Assets" shall mean those assets of FT and its
Affiliates which the Parties identify as FT ROW Assets on or prior
to the Closing Date.
"FT ROW Liabilities" shall mean those obligations,
responsibilities and liabilities of FT and its Affiliates which
the Parties identify as FT ROW Liabilities on or prior to the
Closing Date.
"FT Transfer Agreements" shall mean the Transfer Agreements
to be mutually agreed to by the Parties and entered into by FT and
its Contributing Affiliates and the GBN Group, the ROW Group and
the ROE Group, respectively, pursuant to Section 15.18.
"GAAP" shall mean generally accepted accounting principles
applicable in the relevant country.
"GBN Board" shall mean the Governing Board of the GBN Parent
Entity.
"GBN Business" shall mean the ownership of the assets, if
any, and operation of, the Global Backbone Network.
"GBN Constituent Documents" shall mean the charter, bylaws or
such other similar documents as may be required or otherwise
entered into in connection with the formation of the GBN Parent
Entity and mutually agreed to by the Parties pursuant to Section
15.30.
"GBN Entities" shall mean the GBN Parent Entity and all other
JV Entities formed for the purpose of conducting the GBN Business.
"GBN Group" shall mean the GBN Parent Entity and all other
GBN Entities.
"GBN Parent Entity" shall mean the JV Entity to be formed in
accordance with Section 6.2.
"GBN Shareholders" shall mean the holders of shares or other
equity interests in the GBN Parent Entity.
"GBN Shareholders Agreement" shall mean each shareholders
agreement, operating agreement, partnership agreement or other
similar agreement which shall set forth the rights and obligations
of the GBN Shareholders to be mutually agreed to by the Parties
and entered into by the GBN Shareholders pursuant to Section
15.27.
"GBN Special Matter" shall mean any action relating to the
expansion of the capacity of the Global Backbone Network which
requires an additional investment or capital expenditure by any
GBN Entity which is not provided for in the most recently approved
Business Plan of the GBN Group and which is declared to be a GBN
Special Matter pursuant to Section 8.5(g)(3); provided, however,
that, notwithstanding the foregoing, the term "GBN Special Matter"
shall not include (1) any matter requiring unanimous approval
described in clause (b), (d), (g), (h), (i), (j) or (k) of
Section 6.4, (2) any matter described in clause (c) or (e) of
Section 6.4 except to the extent strictly necessary to implement a
GBN Special Matter, (3) any matter described in clause (f) of
Section 6.4 except to the extent the purpose of the GBN Special
Matter is to enhance or maintain the seamless nature of the
telecommunications services provided by the GBN Group, or (4) any
matter described in any other Operative Agreement or any other
agreement relating to the Joint Venture to which any JV Entity
within the GBN Group is a party which expressly provides that a
"GBN Special Matter" shall not include such matter; and provided,
further, that no such action shall constitute a GBN Special Matter
unless the Certified Public Accountants advise the Governing Board
of the GBN Parent Entity in writing on or prior to the date on
which such action is declared to be a GBN Special Matter pursuant
to Section 8.5(g)(3) that such action can be accounted for
separately in accordance with the Plan Action/Special Matter
Accounting Principles.
"GBN Special Matter Period" shall mean the two-year period
beginning on the date on which a proposed action is declared to be
a GBN Special Matter pursuant to Section 8.5(g)(3).
"Germany" shall mean the Federal Republic of Germany.
"Global Backbone Network" shall mean the network to be agreed
to by the Parties prior to the Closing. The term "Global Backbone
Network" shall not include the Pan-European Network.
"Global Backbone Network Services Agreement" shall mean the
Global Backbone Network Services Agreement to be mutually agreed
to by the Parties and entered into pursuant to Section 15.23.
"Global Policies" shall mean those policies, principles and
standards adopted by the Global Venture Board pursuant to Section
3.1(c)(vii).
"Global Venture Board" shall mean the supervisory board
established in accordance with Section 3.1.
"Global Venture Committee" shall mean the committee
established in accordance with Section 3.6.
"Global Venture Office" shall mean the body established in
accordance with Section 3.7.
"Global Venture Strategic Plan" shall mean the Phoenix
Telecom Strategic Plan and each subsequent rolling three-year
strategic plan prepared annually for the Joint Venture in
accordance with Section 16.1(b) and approved as provided herein.
"Governing Board," with respect to any JV Entity, shall mean
the governing board of such JV Entity.
"Governmental Approval" shall mean any consent, approval,
authorization, waiver, grant, concession, license, exemption or
order of, registration, certificate, declaration or filing with,
or report or notice to, any Governmental Authority.
"Governmental Authority" shall mean any federation, nation,
state, sovereign or government, any federal, supranational,
regional, state or local political subdivision, any governmental
or administrative body, instrumentality, department or agency or
any court, administrative hearing body, commission or other
similar dispute resolving panel or body, and any other entity
exercising executive, legislative, judicial, regulatory or
administrative functions of a government; provided that the term
"Governmental Authority" shall not include FT, DT, Atlas or any of
their respective Subsidiaries; and provided, further, that the
term "Governmental Authority" shall not include any arbitration
panel formed pursuant to Article 21.
"Home Country" shall mean the United States in the case of
Sprint and its Subsidiaries, France in the case of FT and its
Subsidiaries (other than Atlas and its Subsidiaries), Germany in
the case of DT and its Subsidiaries (other than Atlas and its
Subsidiaries), and France and Germany in the case of Atlas and its
Subsidiaries.
"Home Country Opportunity" shall mean a transaction proposed
to be entered into by Sprint, FT, DT, Atlas or their respective
Subsidiaries pursuant to which such Person would invest in a
Person primarily engaged in telecommunications services or
activities in its Home Country.
"HSR Act" shall mean the Hart-Scott-Rodino Antitrust
Improvements Act of 1976.
"Intellectual Property Agreements" shall mean the FT
Intellectual Property Agreements, the DT Intellectual Property
Agreements and the Sprint Intellectual Property Agreements.
"International Telecommunications Services Business" shall
mean the Offer of telecommunications services to or from the Home
Countries or into or out of countries other than the Home
Countries. The term "International Telecommunications Services
Business" shall not include Local Exchange Services, Wireless
Services, Non-Telecom IT Services, National Operations or Public
Telephone Operators or the Offer of telecommunications equipment.
"Injunction" shall mean any preliminary, temporary, interim
or final injunction, temporary restraining order or other court
ordered legal prohibition or equitable remedy requiring or
prohibiting action.
"Invest or Participate" (including, with its correlative
meanings, "Investment or Participation," "Invested or
Participated" and "Investing or Participating"), as it relates to
a Party or any of its Affiliates, shall mean, with respect to any
other Person that Offers Competing Services or Competing LD
Services, directly or indirectly through an Affiliate, (a) to
acquire, as a principal, partner, shareholder, beneficial owner or
in any similar capacity, any ownership interest in such Person or
(b) by Contract or otherwise to manage, operate or finance such
Person, or to participate in the management, operation or
financing of such Person, or to act as agent, representative,
consultant or in any similar capacity for such Person, or to use
the name of such Person, or permit the use of the name of such
Party or its Affiliate by such Person, to the extent that any of
such activities described in this clause (b) are related to such
Competing Services or Competing LD Services.
"Investment Agreement" shall mean the Investment Agreement to
be entered into prior to the Closing Date among Sprint, FT and DT
pursuant to which FT and DT will agree to purchase shares of Class
A Common Stock of Sprint representing approximately 20% of the
common equity of Sprint.
"Joint Venture" shall mean the JV Entities and the rights and
obligations of the Parties and their Affiliates under the
Operative Agreements.
"Joint Venture Confidentiality Agreement" shall mean the
Confidentiality Agreement to be mutually agreed to by the Parties
and entered into pursuant to Section 15.31.
"Judgment" shall mean any judgment, order, judicial decree or
arbitral award.
"JV Entity" shall mean the GBN Parent Entity, the ROW Parent
Entity and the ROE Parent Entity, and each other Person formed
pursuant to the terms hereof to conduct the Venture Business, it
being understood that to the extent holding company structures are
utilized, the holding company and each other Person it Controls
shall each be deemed a JV Entity. Sprint, FT, DT and Atlas and
their respective Subsidiaries shall not be deemed to be JV
Entities. No GBN Special Matter Subsidiary, Sprint Plan Action
Subsidiary or Atlas Plan Action Subsidiary shall be deemed to be a
JV Entity, unless the outstanding equity interests in such GBN
Special Matter Subsidiary, Sprint Plan Action Subsidiary or Atlas
Plan Action Subsidiary are purchased pursuant to Section 8.1(b),
8.2(d) or 8.3(d), as the case may be.
"JV Entity Shareholders" shall mean the holders of shares or
other equity interests in a JV Entity.
"JV Services" shall mean, as of any date, the services
Offered within the scope of the International Telecommunications
Services Business listed on Schedule 1.1(c) hereto, and any new
services Offered within the scope of the International
Telecommunications Services Business which may be added from time
to time by the Global Venture Board in a resolution specifically
adopted for such purpose.
"Lien" shall mean any mortgage, pledge, security interest,
adverse claim, encumbrance, lien (statutory or otherwise) or
charge of any kind (including any agreement to give any of the
foregoing, any conditional sale or other title retention
agreement, any lease in the nature thereof, and the filing of or
agreement to give any financing statement under the Uniform
Commercial Code or similar Applicable Law of any jurisdiction) or
any other type of preferential arrangement for the purpose, or
having the effect, of protecting a creditor against loss or
securing the payment or performance of an obligation.
"Local Exchange Services" shall mean the provision of
subscriber connections, irrespective of the technology used in
providing such subscriber connections, to a local exchange or
switch providing access to the public switched telephone network;
provided, however, that direct subscriber connections to switches
used for long-distance communications shall not be Local Exchange
Services.
"Losses" shall mean any and all claims, losses, liabilities,
damages (including fines, penalties, and criminal or civil
judgments and settlements), costs (including court costs) and
expenses (including reasonable attorneys' and accountants' fees).
"Major Competitor of FT/DT" shall mean a Person which
materially competes with a major portion of the telecommunications
services business of FT, DT or Atlas in their respective Home
Countries or in the ROE Territory or of the Joint Venture, or any
Affiliate of any such Person, or a Person which has taken
substantial steps to become such a competitor and which FT, DT or
Atlas has reasonably concluded in its good faith judgment will be
such a competitor in the near future in the respective Home
Countries of FT, DT or Atlas, or any Affiliate of such Person;
provided that FT, DT or Atlas furnish in writing to Sprint
reasonable evidence of the occurrence of such steps. For purposes
of this Agreement, neither Sprint nor any of its Affiliates shall
be deemed to be a Major Competitor of FT/DT.
"Major Competitor of Sprint" shall mean a Person which
materially competes with a major portion of the telecommunications
services business of Sprint in North America or of the Joint
Venture, or any Affiliate of any such Person, or a Person which
has taken substantial steps to become such a competitor and which
Sprint has reasonably concluded in its good faith judgment will be
such a competitor in the near future in its Home Country, or any
Affiliate of such Person; provided that Sprint furnishes in
writing to FT, DT and Atlas reasonable evidence of the occurrence
of such steps; and provided, further, that for purposes of
Sections 13.2(g) and 15.11, only the Persons listed on Schedule
1.1(d) and their Controlled Affiliates shall be deemed to be Major
Competitors of Sprint. For purposes of this Agreement, neither FT
or DT nor any of its Affiliates shall be deemed to be a Major
Competitor of Sprint.
"Major Competitor of the Joint Venture" shall mean any Person
which substantially competes with the Joint Venture by Offering
telecommunications services on a global basis similar in scope to
the JV Services, such as WorldPartners and Concert.
"Master Transfer Agreement" shall mean the Master Transfer
Agreement to be mutually agreed to by the Parties and entered into
pursuant to Section 15.18.
"Master Transfer Agreement Term Sheet" shall mean the term
sheet attached as Exhibit 15.18 to this Agreement.
"Material Adverse Effect" shall mean, with respect to any
Person, the effect of any event, occurrence, fact, condition or
change that is materially adverse to the business, operations,
results of operations, financial condition, assets or liabilities
of such Person.
"Material Participant" shall mean, when used with reference
to the Investment or Participation of a Competing Person in
another Person, a Competing Person which owns directly or
indirectly through an Affiliate, or proposes to acquire directly
or indirectly through an Affiliate, (i) more than 10% of the
economic or voting interests in such Person, if such Person is not
a Publicly Held Person, or (ii) more than 20% of the economic or
voting interest in such Person, if such Person is a Publicly Held
Person; provided, however, that if a Competing Person owns
directly or indirectly through an Affiliate, or proposes to
acquire directly or indirectly through an Affiliate, more than 10%
but no more than 20% of the economic or voting interests in such
Person, if such Person is a Publicly Held Person, and there exists
a voting trust, voting agreement or other similar arrangement
between such Competing Person and the Party or its Affiliate
proposing to Invest or Participate in such Person as to the
economic or voting interests of such Party or its Affiliate and
such Competing Person in such Person, then such Competing Person
shall be deemed to be a "Material Participant" for purposes of
this Agreement.
"Minority Rights" shall mean the rights of the holders of
Class A Common Stock of Sprint contained in (i) Articles III, IV,
V and VI and Section 7.8 of the Stockholders' Agreement, and (ii)
ARTICLE FIFTH and the Section of ARTICLE SIXTH of the Articles of
Incorporation of Sprint entitled "GENERAL PROVISIONS RELATING TO
CLASS A COMMON STOCK," as to be amended or inserted pursuant to
the Amendment (as defined in the Investment Agreement) on or prior
to the Closing Date, or any similar rights of the holders of any
series of preferred stock of Sprint issued pursuant to the
Investment Agreement.
"Miscellaneous Services Agreement" shall mean the
Miscellaneous Services Agreement to be mutually agreed to by the
Parties and entered into pursuant to Section 15.20.
"NAFTA Countries" shall mean Canada and Mexico and any other
country in the Americas which either (i) accedes to the North
American Free Trade Agreement, or (ii) enters into agreements with
the United States and each other country which is a NAFTA Country
as of the date such country becomes a NAFTA Country, that in each
case contains provisions establishing a free trade relationship
which is substantially similar in scope and terms to the North
American Free Trade Agreement. Such other country shall become a
NAFTA Country as of (x) the date the North American Free Trade
Agreement becomes effective with respect to such country, or (y)
the date the last of the agreements referred to in clause (ii) of
the preceding sentence becomes effective with respect to such
country, as the case may be. The United States shall not be a
NAFTA Country.
"NAFTA Plan Action" shall mean any Plan Action of any ROW
Entity to the extent relating to any of the NAFTA Countries and
which is declared to be a NAFTA Plan Action pursuant to Section
8.5(g)(3); provided, however, that, notwithstanding the foregoing,
the term "NAFTA Plan Action" shall not include (1) any matter
requiring unanimous approval described in clause (b), (d), (g),
(h), (i), (j), (k), (l) or (m) of Section 4.4, (2) any matter
described in clause (c) or (e) of Section 4.4 except to the extent
strictly necessary to implement a NAFTA Plan Action, (3) any
matter described in clause (f) of Section 4.4 except to the extent
the purpose of the NAFTA Plan Action is to enhance or maintain the
seamless nature of the telecommunications services provided by the
ROW Group in the NAFTA Countries, or (4) any matter described in
any other Operative Agreement or any other agreement relating to
the Joint Venture to which any JV Entity within the ROW Group is a
party which expressly provides that a "NAFTA Plan Action" shall
not include such matter; and provided, further, that on or prior
to the date on which such Plan Action is declared to be a NAFTA
Plan Action pursuant to Section 8.5(g)(3), the Certified Public
Accountants shall advise the ROW Board whether or not such NAFTA
Plan Action can be separately accounted for in accordance with the
Plan Action/Special Matter Accounting Principles.
"NAFTA Plan Period" shall mean the two-year period beginning
on the date on which a Plan Action relating to the NAFTA Countries
is declared to be a NAFTA Plan Action pursuant to Section
8.5(g)(3).
"National Operation" shall mean any Person or group of
Persons primarily engaged in providing national long distance
telecommunications services, irrespective of the technology used
in providing such services (including provision of such services
through the use of a nationwide trunk overlay network connecting
facilities, whether owned or leased, for communications
principally interconnecting Wireless Services, other than the
principal national public switched voice telephony or public data
networks). The term "National Operation" shall not include any
Public Telephone Operator.
"Non-Defaulting European Party" shall mean (i) FT in the case
of a Funding Default or Material Non-Funding Default by, or
Bankruptcy of, DT or any Wholly Owned Subsidiary of DT holding
Venture Interests as permitted by this Agreement, provided that
none of FT or any Wholly Owned Subsidiary of FT holding Venture
Interests as permitted by this Agreement shall have suffered a
Bankruptcy or committed a Funding Default or Material Non-Funding
Default which as of the date on which Sprint may exercise any
rights hereunder in respect of the Defaulting European Party has
not been cured in accordance with the terms hereof, and (ii) DT in
the case of a Funding Default or Material Non-Funding Default by,
or Bankruptcy of, FT or any Wholly Owned Subsidiary of FT holding
Venture Interests as permitted by this Agreement, provided that
none of DT or any Wholly Owned Subsidiary of DT holding Venture
Interests as permitted by this Agreement shall have suffered a
Bankruptcy or committed a Funding Default or a Material Non-
Funding Default which as of the date on which Sprint may exercise
any rights hereunder in respect of the Defaulting European Party
has not been cured in accordance with the terms hereof.
"Non-Exclusive Business" shall mean (i) the Offer of any
telecommunications equipment, (ii) the provision of any product or
service which is provided by a Party or any of its Affiliates to
the Joint Venture on a non-exclusive basis pursuant to any
Operative Agreement, and (iii) the provision of any product or
service by a Party or any of its Affiliates which is necessary to
create, support or provide a service of the Joint Venture,
including any "Service Component" as described in the Operating
Entities Services Agreement, but which does not constitute a
principal service of the Joint Venture.
"Non-Telecom IT Services" shall mean services provided in
connection with or related to (i) information processing, storage,
retrieval and distribution systems; (ii) the full range of
services provided in connection with and related to systems
analysis, applications development, network operations and data
center management; (iii) software development and application;
(iv) systems, hardware or application re-engineering, redesign or
reorganization projects; and (v) other services designed to
create, develop, refine or enhance the efficiency and functioning
of information related activities. The term "Non-Telecom IT
Services" shall not include any telecommunications activities such
as data, voice and video transmission and reception to the extent
provided in connection with any of the services described in the
preceding sentence.
"Non-Tie Breaking Party" shall mean the Sprint Parties when
the FT/DT Parties have the Tie-Breaking Vote, and the FT/DT
Parties when the Sprint Parties have the Tie-Breaking Vote.
"North America" shall mean the current geographic area
covered by the following countries: Canada, the United States of
Mexico and the United States of America.
"Offer" (including, with its correlative meanings, "Offering"
or "Offered") shall mean, with respect to any telecommunications
product or service, directly or indirectly, offering, producing,
providing, selling, promoting, distributing or marketing such
product or service.
"Operating Entities Services Agreement" shall mean the
Operating Entities Services Agreement to be mutually agreed to by
the Parties and entered into pursuant to Section 15.24.
"Operative Agreements" shall mean this Agreement, the
Employee Matters Agreement, the Transfer Agreements, the
Intellectual Property Agreements, the Services Agreements, the
Shareholders Agreements, the Constituent Documents, the Joint
Venture Confidentiality Agreement, the Atlas/ROE Services
Agreement and the Tax Matters Agreement.
"Pan-European Network" shall mean the transmission and
switching assets which are used or held for use for the purpose of
interconnecting by means of gateways regional and national hubs of
the ROE Group located exclusively in the ROE Territory.
"Parties" shall mean the Sprint Parties and the FT/DT
Parties.
"Passive Financial Institution" shall mean a bank (or
comparable financial institution), insurance company, pension or
retirement fund that acquires equity interests in Atlas, Sprint
Sub or another Qualified Venture Subsidiary without the purpose or
effect of changing or influencing the Control of such Party or
such other Qualified Venture Subsidiary or any of the JV Entities,
nor in connection with or as a participant in any transaction
having such purpose or effect; provided, however, that (i) in the
case of an acquisition of equity interests in Sprint Sub or
another Qualified Venture Subsidiary formed by the Sprint Parties,
the term "Passive Financial Institution" shall not include any
Major Competitor of FT/DT, and (ii) in the case of an acquisition
of equity interests in Atlas or another Qualified Venture
Subsidiary formed by the FT/DT Parties, the term "Passive
Financial Institution" shall not include any Major Competitor of
Sprint.
"PCS" means a radio communications system of the type
authorized under the rules for broadband personal communications
services designated as Subpart E of Part 24 of the FCC's rules or
similar Applicable Laws of any other country, including the
network, marketing, distribution, sales, customer interface and
operations functions relating thereto.
"Percentage Interest," with respect to any Person's
investment in another Person, shall mean such Person's equity
interest therein (whether voting or nonvoting) expressed as a
percentage of the total outstanding equity interests of such other
Person (voting and nonvoting).
"Permitted Designee" shall mean any Person other than (i) in
the case of a designee of any of the Sprint Parties, a Major
Competitor of FT/DT (other than a Person that would be a Major
Competitor of FT/DT solely because such Person or any Affiliate of
such Person materially competes with a major portion of the
telecommunications services business of the Joint Venture) and
(ii) in the case of a designee of any of the FT/DT Parties, a
Major Competitor of Sprint (other than a Person that would be a
Major Competitor of Sprint solely because such Person or any
Affiliate of such Person materially competes with a major portion
of the telecommunications services business of the Joint Venture).
A determination of whether a Permitted Designee is a Major
Competitor of FT/DT or a Major Competitor of Sprint shall be made
after giving effect to the contemplated transfer.
"Per Share JV Entity Value" shall mean, as of any date, the
value per share of the outstanding Venture Interests in a JV
Entity on such date.
"Person" shall mean an individual or a partnership, an
association, a joint venture, a corporation, a business or a trust
or other entity organized under any Applicable Law, an
unincorporated organization or any Governmental Authority.
"Plan Action" shall mean the proposal by any voting
representative on the Governing Board of a Regional Operating
Group or the GBN Group that such Regional Operating Group or the
GBN Group, as the case may be, adopt or implement any Business
Plan or any other strategic, capital, operating, marketing or
technology plan (or any portion of such plan), or substantial
deviations from any such plan (or any portion thereof), including
changes in the introduction and timing of services within the
scope of the International Telecommunications Services Business;
provided that neither a Regional Operating Group nor the GBN Group
may adopt or implement a Plan Action which is inconsistent with
the Global Policies; and provided, further, that no Plan Action
may amend the terms of any Operative Agreement.
"Plan Action/Special Matter Accounting Principles" shall mean
those principles regarding separate accounting treatment for any
GBN Special Matter, NAFTA Plan Action or ROE Plan Action to be
agreed upon by the Parties pursuant to Section 15.34.
"Proceeding" shall mean any action, litigation, suit,
proceeding or formal investigation or review of any nature, civil,
criminal, regulatory or otherwise, before any Governmental
Authority.
"Public Telephone Operator" shall mean a Person or group of
Persons providing national telecommunications services which
Person or group of Persons is or has been at any time in the past
at least 90% owned by any Governmental Authority.
"Publicly Held Person" shall mean any Person that has voting
securities which are held by at least 500 holders.
"Put Notice Date" shall mean an FT/DT Major Competitor Put
Notice Date, a Default Put Notice Date or a Sprint Major
Competitor Put Notice Date, as applicable.
"Qualified Venture Purchaser" shall mean, for purposes of
Article 19 of this Agreement, any Person which (i) has total
consolidated assets having a fair market value equal to or greater
than three times the purchase price to be paid by such Person in
connection with its proposed purchase of Venture Interests, (ii)
after giving effect to any indebtedness to be incurred in
connection with its purchase of Venture Interests, has a
consolidated net worth equal to or greater than the higher of (A)
U.S. $500 million, and (B) the purchase price to be paid by such
Person in connection with its proposed purchase of Venture
Interests, and (iii) after giving effect to any indebtedness to be
incurred in connection with its purchase of Venture Interests, has
outstanding senior unsecured indebtedness which is either (A)
rated Baa3 or better (or a comparable rating if the rating system
is changed) by Moody's Investor's Service, Inc. or BBB- or better
(or a comparable rating if the rating system is changed) by
Standard & Poor's Corporation, or (B) rated equal to or better
than the rating on the outstanding senior unsecured indebtedness
of the Person (or if such Person has a parent company, its parent
company) from which the Venture Interests are to be purchased.
"Qualified Venture Subsidiary" shall mean (i) in the case of
FT and DT, Atlas or any other Person in which (x) each of FT and
DT in the aggregate owns directly or indirectly through Wholly
Owned Subsidiaries at least 40% of the outstanding economic
interests and voting power of such Person, and (y) FT, DT and
Passive Financial Institutions in the aggregate own directly or
indirectly through Wholly Owned Subsidiaries 100% of the
outstanding economic interests and voting power of such Person,
and (ii) in the case of Sprint, Sprint Sub or any other Person in
which (x) Sprint in the aggregate owns directly or indirectly
through Wholly Owned Subsidiaries at least 80% of the outstanding
economic interests and voting power of such Person, and (y) Sprint
and Passive Financial Institutions in the aggregate own directly
or indirectly through Wholly Owned Subsidiaries 100% of the
outstanding economic interests and voting power of such Person.
"Regional Operating Group" shall mean the ROW Group, the ROE
Group and any other operating group established by the Global
Venture Board to conduct the Venture Business in a particular
territory. The term "Regional Operating Group" shall not include
Sprint, Sprint Sub, FT, DT, Atlas, the GBN Group or the Global
Backbone Network.
"Related Party Group" shall mean the FT/DT Parties or the
Sprint Parties, and a Related Party Group shall be deemed to
possess a particular attribute if any Party included in such
Related Party Group possesses such attribute.
"Request for Arbitration" shall have the meaning set forth in
the ICC Rules.
"Restricted Services" shall mean the services which are
substantially similar to, or substitutable for or competing with
the JV Services which the Parties identify as Restricted Services
on or prior to the Closing Date.
"ROE Board" shall mean the Governing Board of the ROE Parent
Entity.
"ROE Constituent Documents" shall mean the charter, bylaws or
such other similar documents as may be required or otherwise
entered into in connection with the formation of the ROE Parent
Entity and mutually agreed to by the Parties pursuant to Section
15.30.
"ROE Entities" shall mean the ROE Parent Entity and all other
JV Entities formed for the purpose of conducting the Venture
Business in the ROE Territory, any of which may be formed as,
among other things, a partnership or a limited liability company.
"ROE Group" shall mean the ROE Parent Entity and all other
ROE Entities.
"ROE Parent Entity" shall mean the JV Entity to be formed in
accordance with Section 5.2.
"ROE Plan Action" shall mean any Plan Action of any ROE
Entity to the extent relating to the ROE Territory and which is
declared to be an ROE Plan Action pursuant to Section 8.5(g)(3);
provided, however, that, notwithstanding the foregoing, the term
"ROE Plan Action" shall not include (1) any matter requiring
unanimous approval described in clause (b), (d), (g), (h), (i),
(j), (k) or (l) of Section 5.4, (2) any matter described in clause
(c) or (e) of Section 5.4 except to the extent strictly necessary
to implement an ROE Plan Action, (3) any matter described in
clause (f) of Section 5.4 except to the extent the purpose of the
ROE Plan Action is to enhance or maintain the seamless nature of
the telecommunications services provided by the ROE Group, or (4)
any matter described in any other Operative Agreement or any other
agreement relating to the Joint Venture to which any JV Entity
within the ROE Group is a party which expressly provides that an
"ROE Plan Action" shall not include such matter; and provided,
further, that on or prior to the date on which such Plan Action is
declared to be an ROE Plan Action pursuant to Section 8.5(g)(3),
the Certified Public Accountants shall advise the ROE Board
whether or not such ROE Plan Action can be separately accounted
for in accordance with the Plan Action/Special Matter Accounting
Principles.
"ROE Plan Period" shall mean the two-year period beginning on
the date on which a Plan Action relating to the ROE Territory is
declared to be an ROE Plan Action pursuant to Section 8.5(g)(3).
"ROE Shareholders" shall mean the holders of shares or other
equity interests in the ROE Parent Entity.
"ROE Shareholders Agreement" shall mean each shareholders
agreement, operating agreement, partnership agreement or other
similar agreement which shall set forth the rights and obligations
of the ROE Shareholders to be mutually agreed to by the Parties
and entered into by the ROE Shareholders pursuant to Section
15.29.
"ROE Territory" shall mean the current geographic area
covered by the countries and territories located on the European
continent, other than the Home Countries, which are set forth on
Schedule 1.1(e), excluding the territories and possessions of such
countries and territories located outside the European continent.
"Route Management Agreement" shall mean the Route Management
Agreement to be mutually agreed to by the Parties and entered into
pursuant to Section 15.25.
"ROW Board" shall mean the Governing Board of the ROW Parent
Entity.
"ROW Constituent Documents" shall mean the charter, bylaws or
such other similar documents as may be required or otherwise
entered into in connection with the formation of the ROW Parent
Entity and mutually agreed to by the Parties pursuant to Section
15.30.
"ROW Entities" shall mean the ROW Parent Entity and all other
JV Entities formed for the purpose of conducting the Venture
Business in the ROW Territory, any of which may be formed as,
among other things, a partnership or a limited liability company.
"ROW Group" shall mean the ROW Parent Entity and all other
ROW Entities.
"ROW Parent Entity" shall mean the JV Entity to be formed in
accordance with Section 4.2.
"ROW Shareholders" shall mean the holders of shares or other
equity interests in the ROW Parent Entity.
"ROW Shareholders Agreement" shall mean each shareholders
agreement, operating agreement, partnership agreement or other
similar agreement which shall set forth the rights and obligations
of the ROW Shareholders to be mutually agreed to by the Parties
and entered into by the ROW Shareholders pursuant to Section
15.28.
"ROW Territory" shall mean all countries and territories
throughout the world, except for the Home Countries and the
countries and territories which are part of the ROE Territory.
"Satellite Communications Services" shall mean
telecommunications services provided through communications
satellite systems (whether low, medium or high orbit systems).
"Services Agreements" shall mean the Miscellaneous Services
Agreement, the Route Management Agreement, the Equipment Housing
and Facilities Management Agreement, the Facilities and Equipment
Lease Agreement, the Global Backbone Network Services Agreement,
the Operating Entities Services Agreement and the X.75
Interconnect Management Agreement.
"Shareholder Obligations" shall mean the obligations of the
relevant Party as a direct shareholder of a JV Entity and any
other obligation of a Party under an Operative Agreement
specifically identified as a "Shareholder Obligation" in such
Operative Agreement.
"Shareholders Agreements" shall mean the GBN Shareholders
Agreement, the ROW Shareholders Agreement and the ROE Shareholders
Agreement.
"Special Deadlock Matter" shall mean a Deadlock with respect
to any of the following items: (i) approval by the Global Venture
Board of the Global Venture Strategic Plan during the process
conducted annually pursuant to Section 16.1(b); (ii) approval by
the ROW Board of the ROW Business Plan during the process
conducted annually pursuant to Section 16.1(c); (iii) approval by
the ROE Board of the ROE Business Plan during the process
conducted annually pursuant to Section 16.1(c); or (iv) following
the third anniversary of the Closing Date, appointment or removal
of the Chief Executive Officer of the ROW Parent Entity upon, in
the cases referred to in clauses (ii), (iii) and (iv), the giving
of the notice referred to in Section 8.5(b), subject to Sections
8.5(c) and 8.5(j).
"Sprint Change of Control" shall mean a "Change of Control"
as defined in Article I of the Investment Agreement.
"Sprint Continuing Director" shall mean any Sprint Director
who is unaffiliated with FT, DT and their "affiliates" and
"associates" (as each such term is defined in Rule 12b-2 under the
Securities Exchange Act of 1934, as in effect on October 1, 1982)
and was a Sprint Director prior to the time that FT, DT or any of
their Affiliates became an Interested Stockholder (as such term is
defined in the Fair Price Provisions), and any successor of a
Sprint Continuing Director if any such successor is not affiliated
with any such Interested Stockholder, and is recommended or
elected to succeed a Sprint Continuing Director by a majority of
Sprint Continuing Directors, provided that such recommendation or
election shall only be effective if made at a meeting of Sprint
Directors at which at least seven Sprint Continuing Directors are
present.
"Sprint Director" shall mean a member of the board of
directors of Sprint.
"Sprint GBN Assets" shall mean those assets, if any, of
Sprint and its Affiliates which the Parties identify as Sprint GBN
Assets on or prior to the Closing Date.
"Sprint GBN Liabilities" shall mean those obligations,
responsibilities and liabilities, if any, of Sprint and its
Affiliates which the Parties identify as Sprint GBN Liabilities on
or prior to the Closing Date.
"Sprint Intellectual Property Agreements" shall mean the
Intellectual Property Agreements to be mutually agreed to by the
Parties and entered into by Sprint and its Contributing Affiliates
and the GBN Group, the ROW Group and the ROE Group, respectively,
pursuant to Section 15.19.
"Sprint International Assets" shall mean the Sprint GBN
Assets, the Sprint ROW Assets and the Sprint ROE Assets.
"Sprint International Liabilities" shall mean the Sprint GBN
Liabilities, the Sprint ROW Liabilities and the Sprint ROE
Liabilities.
"Sprint Parties" shall mean (i) Sprint and Sprint Sub, (ii)
any other Qualified Venture Subsidiary of the Sprint Parties, and
(iii) any Permitted Transferee of Sprint or Sprint Sub or any
other Qualified Venture Subsidiary of the Sprint Parties, upon
execution by such Person of a counterpart to this Agreement to the
extent required pursuant to Section 19.2.
"Sprint ROE Assets" shall mean those assets of Sprint and its
Affiliates which the Parties identify as Sprint ROE Assets on or
prior to the Closing Date.
"Sprint ROE Liabilities" shall mean those obligations,
responsibilities and liabilities of Sprint and its Affiliates
which the Parties identify as Sprint ROE Liabilities on or prior
to the Closing Date.
"Sprint ROW Assets" shall mean those assets of Sprint and its
Affiliates which the Parties identify as Sprint ROW Assets on or
prior to the Closing Date.
"Sprint ROW Liabilities" shall mean those obligations,
responsibilities and liabilities of Sprint and its Affiliates
which the Parties identify as Sprint ROW Liabilities on or prior
to the Closing Date.
"Sprint Transfer Agreements" shall mean the Transfer
Agreements to be mutually agreed to by the Parties and entered
into by Sprint and its Contributing Affiliates and the GBN Group,
the ROW Group and the ROE Group, respectively, pursuant to Section
15.18.
"Sprint Venture Interests" shall mean the Venture Interests
of the Sprint Parties.
"Spun-Off Entity" shall mean any entity resulting from a spin
off or other pro rata distribution of equity interests by Sprint,
including any Permitted Spun-Off Entity (as defined in the
Investment Agreement).
"Stockholders' Agreement" shall mean the Stockholders'
Agreement among Sprint, FT and DT, dated as of the Closing Date,
substantially in the form of Exhibit D to the Investment Agreement
(and all exhibits thereto).
"Strategic Merger" shall have the meaning set forth in
Article I of the Investment Agreement.
"Subsidiary" shall mean, with respect to any Person (the
"Parent"), any other Person in which the Parent, one or more
direct or indirect Subsidiaries of the Parent, or the Parent and
one or more of its direct or indirect Subsidiaries (i) have the
ability, through ownership of securities individually or as a
group, ordinarily, in the absence of contingencies, to elect a
majority of the directors (or individuals performing similar
functions) of such other Person, and (ii) own more than 50% of the
equity interests, provided that, notwithstanding the foregoing,
Atlas shall be deemed to be a Subsidiary of each of FT and DT for
purposes of this Agreement. The JV Entities and their
Subsidiaries will not be deemed Subsidiaries of Sprint, FT, DT,
Atlas or their Affiliates for purposes of this Agreement.
"Tax Matters Agreement" shall mean the Tax Matters Agreement
to be mutually agreed to by the Parties and entered into pursuant
to Section 15.33.
"Third Party Approval" shall mean the Approval of any Person
other than a Governmental Authority, a Party or its Affiliates or
a JV Entity.
"Tie-Breaking Party" shall mean the FT/DT Parties when the
FT/DT Parties have the Tie-Breaking Vote, and the Sprint Parties
when the Sprint Parties have the Tie-Breaking Vote.
"Tie-Breaking Vote" shall mean the rights of a Tie-Breaking
Party pursuant to Section 18.1.
"Transactions" shall mean the transactions contemplated by
the Operative Agreements.
"Transfer Agreements" shall mean the Master Transfer
Agreement, the FT Transfer Agreements, the DT Transfer Agreements
and the Sprint Transfer Agreements.
"Transferred Assets" shall mean the FT International Assets,
the DT International Assets and the Sprint International Assets.
"United States" shall mean the United States of America and
its territories and possessions.
"Venture Interests" shall mean the equity interests in any JV
Entity.
"Wholly Owned" shall mean, when used to designate the
ownership interest of any Person in an entity, that such Person
owns directly or indirectly all of the outstanding economic
interests and voting power of such entity, other than any de
minimis ownership in such entity as required by Applicable Law.
"Wireless Services" shall mean the provision of cellular,
PCS, ESMR or paging services, mobile telecommunications services
or any other voice, data or voice/data wireless services, whether
fixed or mobile. The term "Wireless Services" shall not include
Satellite Communications Services.
"X.75 Interconnect Management Agreement" shall mean the X.75
Interconnect Management Agreement to be mutually agreed to by the
Parties and entered into pursuant to Section 15.26.
Section 1.2. Additional Definitions.
Defined Term Defined in
"Acquiring Party" Section 10.4(b)
"Additional Capital Contributions" Section 11.3(a)
"Affected Party" Section 10.5(b)
"Affected Venture Interests" Section 19.3(a)
"Affiliating Entity" Section 16.8(b)
"Affiliating Subsidiary" Section 16.8(a)
"Agreement" Introductory Paragraph
"Alternative Transaction" Section 15.6
"Appraised Value" Section 17.8(a)
"Approved Scope" Section 10.5(a)
"Atlas" Recitals
"Atlas Affiliate" Section 14.4(a)
"Atlas Plan Action Subsidiary" Section 8.3(b)(i)
"Breaching Party" Section 21.6(b)
"Boards" Section 7.1(a)
"Bundesanstalt" Section 13.2(g)
"Capital Call" Section 11.3(a)
"Capital Call Notice" Section 11.3(b)
"Capital Call Period" Section 11.3(b)
"Competing Business" Section 10.2(c)
"Competing LD Services" Section 10.3(a)(i)
"Default Put Notice Date" Section 20.11(a)
"Defaulting Party" Section 20.11(a)
"Defaulting Shareholder" Section 11.4(a)
"DT" Introductory Paragraph
"Employee-Appointed Member" Section 10.2(b)(ii)
"EU" Section 13.1(a)(vi)(A)
"Excess Activity" Section 10.5(b)
"Final Award" Section 21.6(c)
"First Bidder" Section 20.7(d)
"First Cure Period" Section 11.4(a)
"First Offer" Section 19.3(a)
"First Offer Procedures" Section 10.3(d)
"FT" Introductory Paragraph
"FT/DT Major Competitor
Put Notice Date" Section 20.11(c)
"FT/DT Protected Parties" Section 15.9(a)
"Funding Breach" Section 11.4(a)
"Funding Deadlock" Section 16.1(g)
"Funding Default" Section 11.4(b)
"Funding Extension Commitment" Section 16.1(g)
"Funding Extension Deadline" Section 16.1(g)
"Funding Principles" Section 8.2(c)
"GBN Non-Proposing Party" Section 8.1(b)
"GBN Proposing Party" Section 8.1(a)
"GBN Special Matter Project" Section 8.1(a)
"GBN Special Matter Subsidiary" Section 8.1(a)(i)
"Governing Body" Section 10.2(b)(i)
"Government-Appointed Member" Section 10.2(b)(ii)
"ICC Court" Section 21.1(c)
"ICC Rules" Section 21.1(c)
"Impasse" Section 8.5(f)
"Indemnifying Parties" Section 15.9(g)
"Initial Offer" Section 20.7(a)
"Initial Venture Business" Section 2.1(b)
"Material Non-Funding Breach" Section 21.6(b)
"Material Non-Funding Breach
Finding" Section 21.6(b)
"Material Non-Funding Default" Section 20.2(b)
"MOU" Recitals
"NAFTA Plan Action Project" Section 8.2(a)
"Non-Defaulting Party" Section 20.3(b)
"Non-Defaulting Shareholder" Section 11.4(b)
"Non-Transferring Party" Section 17.7
"Notice Parties" Section 21.1(e)
"Offeree Party" Section 19.3(a)
"Offering Date" Section 19.3(a)
"Parent" Definition of "Subsidiary"
in Section 1.1
"Partial Award" Section 21.6(a)
"Permitted Transferee" Section 19.2
"Proposed Business Plan" Section 16.1(c)
"Proposed Strategic Plan" Section 16.1(b)
"Protected Parties" Section 15.9(b)
"Review Period" Section 15.36
"ROE Plan Action Project" Section 8.3(a)
"Second Cure Period" Section 11.4(c)
"Section 10 Affiliate" Section 10.2(c)
"Section 21.1 Agreement" Definition of "Dispute" in
Section 1.1
"Selling Party" Section 19.3(a)
"Sprint" Introductory Paragraph
"Sprint Major Competitor
Put Notice Date" Section 20.11(b)
"Sprint Offer Date" Section 17.2(a)
"Sprint Offer Rejection Date" Section 17.2(b)
"Sprint Plan Action Subsidiary" Section 8.2(b)(i)
"Sprint Protected Parties" Section 15.9(b)
"Sprint Put Notice Date" Section 17.3(a)
"Sprint Sub" Introductory Paragraph
"Telmex" Section 10.4(q)
"Telmex Alliance" Section 10.4(q)
"Termination Condition" Section 20.3
"Termination Notice" Section 20.3(a)
"Transferee Party" Section 19.3(a)
"Transferring Party" Section 17.7
"Transition Plan" Section 22.2
"Unlisted Governmental Approval" Section 15.12(d)
"Unrelated Representatives" Section 10.2(c)
"Value Opinion" Section 17.8(b)
"Venture Business" Section 2.1(d)
Section 1.3. Interpretation and Construction of this
Agreement. The definitions in Sections 1.1 and 1.2 shall apply
equally to both the singular and plural forms of the terms
defined. Whenever the context may require, any pronoun shall
include the corresponding masculine, feminine and neuter forms.
The words "include," "includes" and "including" shall be deemed to
be followed by the phrase "without limitation." All references
herein to Articles, Sections, Exhibits and Schedules shall be
deemed to be references to Articles and Sections of, and Exhibits
and Schedules to, this Agreement unless the context shall
otherwise require. The table of contents and the headings of the
Articles and Sections are inserted for convenience of reference
only and are not intended to be a part of or to affect the meaning
or interpretation of this Agreement. Unless the context shall
otherwise require, any reference to any agreement or other
instrument or statute or regulation is to such agreement,
instrument, statute or regulation as amended and supplemented from
time to time (and, in the case of a statute or regulation, to any
successor provision). Any reference in this Agreement to a "day"
or a number of "days" (without the explicit qualification of
"Business") shall be interpreted as a reference to a calendar day
or number of calendar days. If any action or notice is to be
taken or given on or by a particular calendar day, and such
calendar day is not a Business Day, then such action or notice
shall be deferred until, or may be taken or given, on the next
Business Day. In the event of a conflict between any provision of
a Constituent Document and any provision of any Operative
Agreement, the Parties agree to cause the provision of the
Constituent Document to be amended to conform to the relevant
provision of such Operative Agreement to the fullest extent
permitted by Applicable Law.
ARTICLE 2.
THE JOINT VENTURE
Section 2.1. Purpose and Scope.
(a) The Parties agree to establish the Joint Venture
and the JV Entities in accordance with the Operative Agreements.
The Parties intend that the Joint Venture will be the principal
embodiment and global reference point of the International
Telecommunications Services Business of the Parties.
(b) To the extent not prohibited by Applicable Law, the
Parties agree that the initial telecommunications services to be
provided by the Joint Venture (such services, together with any
Investments or Participations in National Operations or Public
Telephone Operators described in the second paragraph of this
Section 2.1(b) and the activities described in Section 2.1(c), are
referred to herein as the "Initial Venture Business") shall
consist of the services to be Offered by the Joint Venture
pursuant to Services Agreements. The Initial Venture Business
consists of telecommunications services within the following
categories:
(i) the provision of global international data, voice and
video business services for multinational companies and
business customers;
(ii) the provision of international services for consumers,
initially based on card services for travelers; and
(iii) the provision of carrier's carrier services.
The Initial Venture Business shall also include Investments
or Participations in National Operations and Public Telephone
Operators to the extent agreed to by the Parties prior to the
Closing.
The Initial Venture Business may be further defined by the
Global Venture Board.
(c) To the extent provided in the Services Agreements,
the Joint Venture will also be a nonexclusive sales representative
with respect to the products and services of FT, DT and Sprint set
forth on Schedule 2.1(c).
(d) Although the Joint Venture and the JV Entities
initially will conduct only the Initial Venture Business, the
Parties' long term objective is for the Joint Venture and the JV
Entities to provide a range of services on a global basis within
the International Telecommunications Services Business as may be
decided by the Global Venture Board or as otherwise provided in
this Agreement. The Joint Venture may also Offer
telecommunications equipment and may make investments in National
Operations or Public Telephone Operators pursuant to and in
compliance with Article 10 (the Initial Venture Business, as
modified pursuant to this Section 2.1(d), is referred to herein as
the "Venture Business").
Section 2.2. Structure of the Joint Venture.
(a) The Parties agree that, except as prohibited by
Applicable Law or as otherwise provided in the Operative
Agreements, the Venture Business will be conducted as described
below:
(i) in the case of the Venture Business in the ROW
Territory, exclusively through the ROW Group consisting of one or
more JV Entities formed to engage in the Venture Business in one
or more countries within the ROW Territory or through one or more
distributors or agents as provided in the Operative Agreements;
(ii) in the case of the Venture Business in the ROE
Territory, exclusively through the ROE Group consisting of one or
more JV Entities formed to engage in the Venture Business in one
or more countries within the ROE Territory or through one or more
distributors or agents as provided in the Operative Agreements;
and
(iii) in the case of the GBN Business, through the GBN
Group.
(b) The Parties also agree that, except as prohibited
by Applicable Law or as otherwise provided in the Operative
Agreements: (1) FT, DT and their respective Subsidiaries (other
than Atlas and its Subsidiaries) will each be non-exclusive
distributors of the JV Services in France and Germany; (2) Sprint
will be the exclusive distributor of the JV Services in its Home
Country; and (3) each Party will supply certain products and
services to the Joint Venture pursuant to and in accordance with
the other Operative Agreements to which it is a party. Each of FT
and DT further agrees that if (i) Atlas shall provide any product
or service to the Joint Venture under a Services Agreement and
(ii) such Services Agreement further expressly contemplates that
such product or service shall be made available by it to Atlas in
order to permit Atlas to perform such obligation, it shall cause
such product or service to be so made available to Atlas. Sprint
further agrees that if (x) Sprint Sub shall provide any product or
service to the Joint Venture under a Services Agreement and (y)
such Services Agreement further expressly contemplates that such
product or service shall be made available by it to Sprint Sub in
order to permit Sprint Sub to perform such obligation, it shall
cause such product or service to be so made available to Sprint
Sub.
ARTICLE 3.
THE GLOBAL VENTURE BOARD, THE GLOBAL VENTURE
COMMITTEE AND THE GLOBAL VENTURE OFFICE
Section 3.1. Composition and Responsibilities of the Global
Venture Board.
(a) The Parties agree to constitute, effective on the
date hereof or as soon thereafter as reasonably practicable, a
Global Venture Board consisting of, except as provided in Section
18.1, one voting representative designated by each of Sprint, FT
and DT. It is contemplated that the Global Venture Board will be
composed of the highest ranking senior officer of each of Sprint,
FT and DT.
(b) On the Closing Date and annually thereafter, the
Global Venture Board shall elect a Chairman in accordance with
procedures to be agreed to by the Parties on or prior to the
Closing Date.
(c) The Global Venture Board will establish policy for
and exercise oversight over each Regional Operating Group and the
GBN Group. Without limiting the generality of the foregoing, the
Global Venture Board will have authority and responsibility for
the following matters:
(i) until the Closing Date, planning and preparing for the
formation of the Joint Venture;
(ii) final approval of each Global Venture Strategic Plan;
(iii) monitoring (A) the conformity of the operations of the
Regional Operating Groups and the GBN Group with (1)
their respective Business Plans, (2) the Global Venture
Strategic Plan, and (3) the Global Policies, and (B)
subject to Section 9.2, the conformity of the operations
related to the Venture Business of FT, DT, Atlas, Sprint
and Sprint Sub with (1) the Global Venture Strategic
Plan and (2) the Global Policies;
(iv) inclusion of new participants in the Joint Venture;
(v) formation of any JV Entity other than a GBN Entity, an
ROW Entity or an ROE Entity;
(vi) subject to the right of a Party to implement a NAFTA
Plan Action or an ROE Plan Action, determining the
timing of and manner in which services within the scope
of the International Telecommunications Services
Business will be provided by the Joint Venture;
(vii) adopting for the Joint Venture and the JV Entities the
following policies, principles and standards regarding:
(A) uniform standards for product development and
management;
(B) coherent marketing and sales force organization
standards and common brands;
(C) principles of global account management to
motivate the Parties, the JV Entities and their
respective employees as appropriate;
(D) transfer pricing standards;
(E) principles to ensure that the acquisitions,
investments and other operations of the Regional
Operating Groups and the GBN Group (and the
operations of FT and DT (through Atlas) and Sprint
and Sprint Sub in the relevant Home Countries
relating to the Joint Venture) are consistent with
the Global Policies;
(F) principles to ensure coherent business development;
(G) principles to ensure coherent intellectual property
management and development within the Joint
Venture;
(H) programs to develop, and specifications of, global
platforms, including principles designed to
establish coherent billing, services,
administration and maintenance procedures;
(I) uniform service levels and standards for each
service within the scope of the Joint Venture;
(J) network planning standards to ensure adequate
capacity and seamless services worldwide;
(K) the principles of the design, planning,
administration and maintenance of the Global
Backbone Network, which principles shall be
developed in coordination with the GBN Group;
(L) overall personnel and compensation policies: (A)
to create incentives for employees to seek the
success of the Joint Venture, rather than of any
one of the JV Entities; and (B) to facilitate the
transfer of employees among the various regions;
(M) accounting and tax principles;
(N) policies regarding the coordination of ethical and
legal compliance policies of the Regional Operating
Groups and the GBN Group;
(O) principles designed to ensure that a balanced
representation of the Sprint Parties and the FT/DT
Parties exists among the key officers of the
Regional Operating Groups and the GBN Group; and
(P) policies supporting the marketing and product
development needs of the Global Backbone Network,
the ROW Group and the ROE Group (and of FT, DT and
Atlas and Sprint and Sprint Sub in the relevant
Home Countries relating to the Venture Business);
(viii) resolving Deadlocks;
(ix) approval of any investment by a JV Entity in a National
Operation or Public Telephone Operator;
(x) approval of any Affiliation Agreement between a JV
Entity and a National Operation or a Public Telephone
Operator;
(xi) the selection of Certified Public Accountants for the JV
Entities; and
(xii) any other matter which has been assigned to the Global
Venture Board pursuant to the terms of this Agreement or
any other Operative Agreement.
(d) Consistent with Section 3.1(c), the Parties agree,
and shall give instructions to their respective representatives on
the Global Venture Board, that the purpose of the Global Venture
Board is to establish and resolve matters of policy and not engage
in the management of the JV Entities, which management shall be
effected in accordance with the Global Policies and the Business
Plans by the Governing Boards and the management of each JV Entity
without referring, unless required pursuant to this Agreement or
the other Operative Agreements, such matters to the Global Venture
Board.
(e) No Global Policy shall change the rights or
obligations of the Parties under any Operative Agreement.
Section 3.2. Responsibility for Global and Regional
Functions. The Parties have allocated to the ROW Group and the
ROE Group certain global functions as listed in Schedule 3.2
hereto. For each global function, a corresponding regional
function (i) in the ROE Territory will be allocated to the ROE
Parent Entity and (ii) in the ROW Territory will be allocated to
the ROW Parent Entity. Atlas will perform the global functions
and regional functions allocated to the ROE Group, as a legal
entity, pursuant to the Atlas/ROE Services Agreement, a contract
between Atlas and the ROE Group which will set out, among other
things, the scope of services to be provided by Atlas, the
compensation to be paid for such services, and transition
arrangements consistent with the Transition Plan pursuant to which
Atlas will continue to provide services for a transitional period
(of up to a maximum of five years) to the Joint Venture in the
event of a termination of the Joint Venture. Subject to Sections
18.1(a)(v) and (vi), the Global Venture Board may from time to
time create new global functions, delete existing global functions
or change the allocation of any global functions.
Section 3.3. Global Staff. The Global Venture Board shall
have the authority to appoint such staff as it may determine is
desirable in order to support the performance of the functions of
the Global Venture Board and the Global Venture Committee. The
responsibilities of such staff shall be determined by the Global
Venture Board.
Section 3.4. Delegation of Authority by the Global Venture
Board. The Global Venture Board is expressly empowered to
delegate from time to time such of its authorities and
responsibilities under this Agreement and the other Operative
Agreements as it may determine to the Global Venture Committee or
the Global Venture Office, upon such terms and conditions as the
Global Venture Board may determine; provided that the Global
Venture Board shall not delegate to the Global Venture Committee
or the Global Venture Office its authority or responsibility with
respect to the matters described in Section 3.1(c)(ii) or (iv) and
shall not delegate to the Global Venture Office its authority or
responsibility with respect to the matters described in
Section 3.1(c)(vi), (vii) or (x).
Section 3.5. Formation of Regional Networks. The Parties
have agreed that the relevant ROE Entity or ROE Entities will
establish and own a Pan-European Network as provided in Section
5.1(b) and that the relevant ROW Entity or ROW Entities may
establish one or more regional networks in the ROW Territory as
provided in Section 4.1(b). The Parties agree that, except as set
forth in Sections 3.1(c) and (d) and as to technical standards for
interconnection and as necessary in the judgment of the Global
Venture Board to ensure uniform and seamless delivery of services
of the Joint Venture, the relevant Regional Operating Group shall
be responsible for planning, operating and managing the Pan-
European Network and any ROW regional network.
Section 3.6. Composition and Responsibilities of the Global
Venture Committee.
(a) The Parties agree to constitute, effective on the
date hereof or as soon thereafter as reasonably practicable, a
Global Venture Committee consisting of, except as provided in
Section 18.1, or as otherwise determined by action of the Global
Venture Board, (i) two representatives designated by each of the
representatives on the Global Venture Board, which Persons shall
be voting representatives on the Global Venture Committee, and
(ii) the Chief Executive Officer of the ROW Parent Entity and the
two Chief Executive Officers of Atlas, which Persons shall be
nonvoting members of the Global Venture Committee. The Global
Venture Board may increase or decrease the number of voting
members of the Global Venture Committee at any time, provided that
each representative on the Global Venture Board shall be entitled
to designate an equal number of voting representatives.
(b) On the Closing Date and annually thereafter, the
Global Venture Committee shall elect a Chairman in accordance with
procedures to be agreed to by the Parties on or prior to the
Closing Date. Unless otherwise agreed by the Parties, the
Chairman of the Global Venture Committee shall be one of the
representatives on the Global Venture Committee of the Party which
the Chairman of the Global Venture Board represents.
(c) The Global Venture Committee shall have such
authorities and responsibilities as may be delegated to it
pursuant to Section 3.4 by the Global Venture Board or as may be
granted to it pursuant to this Agreement.
(d) The Global Venture Committee is expressly empowered
to delegate from time to time such of its authorities and
responsibilities under this Agreement and the other Operative
Agreements as it may determine to the Global Venture Office, upon
such terms and conditions as the Global Venture Committee may
determine; provided that the Global Venture Committee shall not
delegate to the Global Venture Office any authority or
responsibility with respect to the matters described in Section
3.1(c)(vi), (vii) or (x) which may be delegated to the Global
Venture Committee by the Global Venture Board.
Section 3.7. Composition and Responsibilities of the Global
Venture Office.
(a) The Parties agree to constitute, effective on the
Closing Date or as soon as reasonably practicable thereafter, the
Global Venture Office consisting of, except as provided in Section
18.1 or as may otherwise be determined by action of the Global
Venture Board, the Chief Executive Officer of the ROW Parent
Entity and the two Chief Executive Officers of Atlas.
(b) On the Closing Date and annually thereafter, the
Global Venture Office shall elect a Chairman who shall be one of
the members of the Global Venture Office. Unless otherwise agreed
by the Parties, the position of Chairman shall be filled in
accordance with procedures to be agreed to by the Parties on or
prior to the Closing Date.
(c) The Global Venture Office shall have such
authorities and responsibilities as may be delegated to it by the
Global Venture Board pursuant to Section 3.4 or the Global Venture
Committee pursuant to Section 3.6(d) or as may be granted to it
pursuant to this Agreement.
Section 3.8. Senior Strategic Planning Officer. The Senior
Strategic Planning Officer shall have such authorities and
responsibilities as may be delegated to such officer by the Global
Venture Board through the Global Venture Office or as may be
granted to such officer pursuant to this Agreement, provided that
the Global Venture Board shall not delegate to the Senior
Strategic Planning Officer any authority or responsibility which
it would not have the right to delegate to the Global Venture
Committee or the Global Venture Office pursuant to Section 3.4.
The Senior Strategic Planning Officer shall report to the Global
Venture Office. The Global Venture Office shall establish a
Strategic Planning Committee to assist the Senior Strategic
Planning Officer. The Senior Strategic Planning Officer shall be
the Chairman of such committee, the members of which shall include
such officers and employees of the ROW Group and the ROE Group as
shall be appointed by the Global Venture Office.
Section 3.9. Expenses of Global Venture Board, Global
Venture Committee and Global Venture Office, Etc. Unless
otherwise determined by the Parties, Sprint, FT and DT shall each
pay one-third of the expenses of each of the Global Venture Board,
the Global Venture Committee, the Global Venture Office and the
Strategic Planning Committee in accordance with such procedures as
may be established by the Global Venture Board.
Section 3.10. General Governance Provisions.
(a) The Global Venture Board, the Global Venture
Committee and the Global Venture Office shall operate in
accordance with the general governance provisions contained in
Article 7.
(b) Subject to Sections 18.1(a)(v) and (vi), the Global
Venture Board is expressly empowered to, from time to time: (i)
change or rescind any of the provisions applicable to the Global
Venture Committee, the Global Venture Office, the Senior Strategic
Planning Officer or the Strategic Planning Committee contained in
Article 7; (ii) abolish the Global Venture Committee, the Global
Venture Office, the position of Senior Strategic Planning Officer
or the Strategic Planning Committee; (iii) modify the composition
of the Global Venture Committee, the Global Venture Office or the
Strategic Planning Committee; or (iv) to the extent permitted by
Sections 3.4 and 3.8, change or rescind the authorities and
responsibilities granted, directly or indirectly, to the Global
Venture Committee, the Global Venture Office, the Strategic
Planning Committee or the Senior Strategic Planning Officer
pursuant to this Agreement; provided that while a Party has the
Tie-Breaking Vote, no action shall be taken by the Global Venture
Board with respect to the matters described in clause (i), (ii),
(iii) or (iv) to the extent they relate to the Global Venture
Committee, unless such action is taken by a unanimous vote of all
members of the Global Venture Board at a meeting at which all
members are present in person or by proxy.
ARTICLE 4.
THE ROW GROUP
Section 4.1. Purpose and Scope of the ROW Group.
(a) Subject to Sections 3.1(c) and (d), the relevant
ROW Entities shall conduct the Venture Business in the ROW
Territory in accordance with the Business Plan of the ROW Group
(subject to Section 8.2) and the Global Policies, including:
(i) providing services within the scope of the Venture
Business, either directly or through distributors or
agents, to its customers, the other JV Entities and the
Parties within the ROW Territory;
(ii) business development within the scope of the Venture
Business within the ROW Territory;
(iii) marketing and delivering in the ROW Territory the
products and services provided by the Global Backbone
Network, either directly or through distributors or
agents;
(iv) investments in, and the operation and management of,
National Operations and Public Telephone Operators
within the ROW Territory as provided in Section 10.3(f);
(v) performing the agreements and arrangements to be
performed by them according to the relevant Operative
Agreements; and
(vi) administration of the ROW Group, subject to the
allocation of global functions as provided in Section
3.2.
(b) The ROW Group may establish one or more regional
networks in accordance with such policies, strategies and
standards as shall be agreed upon by the Parties.
(c) The ROW Group may enter into an agreement with
Sprint or any of its Affiliates pursuant to which one or more ROW
Entities will agree to manage any International Telecommunications
Services Business of Sprint or any of its Affiliates not
transferred to a JV Entity pursuant to the Master Transfer
Agreement.
Section 4.2. Formation of the ROW Parent Entity.
(a) As promptly as practicable following the date of
this Agreement, the Sprint Parties and the FT/DT Parties shall
take all steps necessary to form the ROW Parent Entity in such
form of organization and under the laws of such jurisdiction as
agreed to by the Parties.
(b) Prior to the Closing Date, the ROW Parent Entity
shall not (i) conduct any business operations whatsoever, or (ii)
enter into any Contract of any kind, acquire any assets or incur
any liabilities, in each case except as may be approved in writing
by the Parties and except for organizational expenses as may be
approved in writing by the Parties. If this Agreement is
terminated prior to the Closing Date, the ROW Parent Entity shall
be dissolved.
(c) The name and the initial principal place of
business of the ROW Parent Entity shall be specified in its
Constituent Documents or in the ROW Shareholders Agreement. The
ROW Parent Entity's offices shall be separate from the offices of
the Parties, except as otherwise agreed by the Parties. The
principal place of business of the ROW Parent Entity may be
transferred to such other place as may be designated by the
Parties.
(d) Except as otherwise provided herein or in the ROW
Shareholders Agreement, the ROW Constituent Documents or the Tax
Matters Agreement, Sprint Sub shall in the aggregate own directly
or indirectly 50% of the voting equity interests of the ROW Parent
Entity, and Atlas shall in the aggregate own directly or
indirectly 50% of the voting equity interests of the ROW Parent
Entity. The Parties acknowledge that the Tax Matters Agreement or
the ROW Shareholders Agreement may provide that Sprint, FT and DT
may hold, directly or indirectly, the equity interests in the ROW
Parent Entity.
Section 4.3. Composition of the ROW Board.
(a) The ROW Parent Entity shall be managed by the ROW
Board, which shall consist of four voting representatives and two
nonvoting representatives. Except as provided herein or in the
ROW Shareholders Agreement or the ROW Constituent Documents,
Sprint Sub shall be entitled to designate two voting
representatives to the ROW Board, and Atlas shall be entitled to
designate two voting and two nonvoting representatives to the ROW
Board; provided that to the extent Applicable Law does not permit
nonvoting representatives to serve on the ROW Board, Atlas may
designate a number of persons equal to the number of nonvoting
representatives which it would otherwise be entitled to designate
pursuant to this Section 4.3(a), which persons shall be entitled
to attend all meetings of the ROW Board but shall not be entitled
to vote on any issue considered by the ROW Board. Except as
otherwise determined by the Global Venture Board, the Sprint
Parties agree to cause at least one of the voting representatives
designated by Sprint Sub to serve on the ROW Board to also serve
as a voting representative on the GBN Board and the ROE Board, and
the FT/DT Parties agree to cause at least one of the voting
representatives designated by Atlas to serve on the ROW Board to
also serve as a voting representative on the GBN Board and the ROE
Board. In each election of voting representatives, Atlas and
Sprint Sub shall vote their equity interests in the ROW Parent
Entity to effect the election of the ROW Board nominees so
designated. Each of the Parties agrees to cause its designated
representatives on the ROW Board to act in accordance with the
Business Plan of the ROW Group (except as contemplated by Section
8.2) and the Global Policies.
(b) Promptly after the formation of the ROW Parent
Entity, the ROW Board shall elect a Chairman who shall serve in
such capacity until the Closing Date. On the Closing Date and
annually thereafter, the ROW Board shall elect a Chairman in
accordance with procedures to be agreed to by the Parties on or
prior to the Closing Date.
(c) Subject to Applicable Law, the ROW Board shall
operate in accordance with the general governance provisions
contained in Article 7.
Section 4.4. Actions Requiring Unanimous Vote.
Notwithstanding anything in Section 7.1(c) to the contrary and
subject to Sections 8.2 and 18.1, the following matters shall
require the affirmative vote of all voting representatives on the
ROW Board:
(a) final approval of a Business Plan or any other Plan
Action with respect to the ROW Group;
(b) approval of any transactions or series of related
transactions (excluding the execution and performance of any
Operative Agreement and any amendment to any Operative Agreement)
between any ROW Entity and any of the Parties or their respective
Affiliates or any material amendments to such approved
transactions, except for Exempt Related Party Transactions;
(c) changes in share capitalization of any ROW Entity;
(d) admission to any ROW Entity of any Person other
than the Parties or, except as specifically provided herein or in
the ROW Shareholders Agreement or the ROW Constituent Documents,
the issuance of any equity interest in any ROW Entity to any
Person;
(e) any amendment to the ROW Constituent Documents;
(f) material decisions regarding the ROW Group
technology or network architecture which would have a material
effect on the ability of the JV Entities to provide seamless
global telecommunication services in accordance with the terms of
and as contemplated by this Agreement and the other Operative
Agreements;
(g) formation of any ROW Entity, unless permitted
without the affirmative vote of all voting representatives on the
ROW Board pursuant to the ROW Shareholders Agreement or the ROW
Constituent Documents;
(h) voluntary dissolution or winding-up of any ROW
Entity or voluntary initiation by and with respect to any ROW
Entity of bankruptcy or similar proceedings, unless permitted
without the affirmative vote of all voting representatives on the
ROW Board pursuant to the ROW Shareholders Agreement or the ROW
Constituent Documents;
(i) the declaration or payment of any dividend or other
distribution by any ROW Entity (whether in cash or property or by
issuance of equity interests in any ROW Entity) or the direct or
indirect redemption, retirement, purchase or other acquisition of
any equity interests in any ROW Entity by such ROW Entity, except
to the extent such dividend, distribution, redemption, retirement,
purchase or other acquisition (x) is required pursuant to the
terms of such equity interests or (y) is permitted without the
affirmative vote of all the voting representatives on the ROW
Board pursuant to the ROW Shareholders Agreement or the ROW
Constituent Documents;
(j) an investment by any ROW Entity in a National
Operation or a Public Telephone Operator pursuant to Section
10.3(f);
(k) any amendment to an Operative Agreement to which
any ROW Entity is a party;
(l) subject to Section 16.8(d), approval of the terms
and conditions of any Affiliation Agreement to which any ROW
Entity is a party and any material amendment of such terms and
conditions;
(m) approval of the terms and conditions of any
management agreement pursuant to Section 4.1(c); and
(n) any action described in any other Operative
Agreement or other agreement relating to the Joint Venture to
which a JV Entity within the ROW Group is a party which expressly
requires such action to be approved by unanimous action of the ROW
Board.
Section 4.5. ROW Officers. The principal officers of the
ROW Parent Entity shall consist of a Chief Executive Officer and
such other officers as may be appointed by the ROW Board in
accordance with this Section 4.5. Until the third anniversary of
the Closing Date, the Chief Executive Officer of the ROW Parent
Entity shall be appointed and removed exclusively by the ROW Board
representatives designated by the Sprint Parties after
consultation with the FT/DT Parties, provided that the ROW Board
representatives designated by the FT/DT Parties may appoint and
remove the Chief Executive Officer of the ROW Parent Entity during
such time as the FT/DT Parties have the Tie-Breaking Vote.
Following the third anniversary of the Closing Date, subject to
Section 18.1, the Chief Executive Officer of the ROW Parent Entity
shall be appointed and removed by unanimous action of the ROW
Board. Subject to Section 18.1, all other principal officers of
the ROW Parent Entity shall be appointed by unanimous action of
the ROW Board. The Chief Executive Officer of the ROW Parent
Entity will propose persons, with the concurrence of the Global
Venture Office, to be considered by the ROW Board for such
positions. The principal officers of the ROW Parent Entity will
report to the Chief Executive Officer of the ROW Parent Entity.
Section 4.6. Other ROW Entities. One or more ROW Parent
Entities may be established pursuant to the Tax Matters Agreement.
If the Tax Matters Agreement provides for more than one ROW Parent
Entity, the Parties shall designate one ROW Entity as the ROW
Parent Entity for purposes of approving the matters described in
Section 4.4. The ROW Board may also establish from time to time
one or more additional ROW Entities in order to conduct the
business of the ROW Group in one or more countries within the ROW
Territory. Each such ROW Entity shall be a Wholly Owned
Subsidiary of the ROW Parent Entity, unless after taking into
account tax, regulatory, business and other considerations which
they deem relevant, the Parties determine that such ROW Entity
should be owned directly or indirectly by Sprint, FT and DT.
Except as provided herein or in the ROW Shareholders Agreement,
the ROW Constituent Documents or the Tax Matters Agreement, if
such ROW Entity is owned directly or indirectly by Sprint, FT and
DT, (i) Sprint shall in the aggregate own directly or indirectly
50% of the voting equity interests in such ROW Entity and FT and
DT shall in the aggregate own directly or indirectly 50% of the
voting equity interests in such ROW Entity, and (ii) the
governance structure for such ROW Entity shall be identical to the
governance structure for the ROW Parent Entity as provided in the
ROW Shareholders Agreement. The Parties will take all necessary
or appropriate actions to maintain the governance rights of the
Parties with respect to the ROW Parent Entity and each other ROW
Entity as set forth in this Agreement, the ROW Shareholders
Agreement and the ROW Constituent Documents.
ARTICLE 5.
THE ROE GROUP
Section 5.1. Purpose and Scope of the ROE Group.
(a) Subject to Sections 3.1(c) and (d), the relevant
ROE Entities shall conduct the Venture Business in the ROE
Territory in accordance with the Business Plan of the ROE Group
(subject to Section 8.3) and the Global Policies, including:
(i) providing services within the scope of the Venture
Business, either directly or through distributors or
agents, to its customers, the other JV Entities and the
Parties within the ROE Territory;
(ii) business development within the scope of the Venture
Business within the ROE Territory;
(iii) marketing and delivering in the ROE Territory the
products and services provided by the Global Backbone
Network, either directly or through distributors or
agents;
(iv) investments in, and the operation and management of,
National Operations and Public Telephone Operators
within the ROE Territory as provided in Section 10.3(f);
(v) performing the agreements and arrangements to be
performed by them according to the relevant Operative
Agreements; and
(vi) administration of the ROE Group, subject to the
allocation of global functions as provided in Section
3.2.
(b) The ROE Group will establish the Pan-European
Network in accordance with such policies, strategies and standards
as shall be agreed upon by the Parties.
Section 5.2. Formation of the ROE Parent Entity.
(a) As promptly as practicable following the date of
this Agreement, the Sprint Parties and the FT/DT Parties shall
take all steps necessary to form the ROE Parent Entity in such
form of organization and under the laws of such jurisdiction as
agreed to by the Parties.
(b) Prior to the Closing Date, the ROE Parent Entity
shall not (i) conduct any business operations whatsoever, or (ii)
enter into any Contract of any kind, acquire any assets or incur
any liabilities, in each case except as may be approved in writing
by the Parties and except for organizational expenses as may be
approved in writing by the Parties. If this Agreement is
terminated prior to the Closing Date, the ROE Parent Entity shall
be dissolved.
(c) The name and the initial principal place of
business of the ROE Parent Entity shall be specified in its
Constituent Documents or in the ROE Shareholders Agreement. The
ROE Parent Entity's offices shall be separate from the offices of
the Parties, except as otherwise agreed by the Parties. The
principal place of business of the ROE Parent Entity may be
transferred to such other place as may be designated by the
Parties.
(d) Except as otherwise provided herein or in the ROE
Shareholders Agreement, the ROE Constituent Documents or the Tax
Matters Agreement, Sprint Sub shall in the aggregate own directly
or indirectly 33 1/3% of the voting equity interests of the ROE
Parent Entity, and Atlas shall in the aggregate own directly or
indirectly 66 2/3% of the voting equity interests of the ROE
Parent Entity.
Section 5.3. Composition of the ROE Board.
(a) The ROE Parent Entity shall be managed by the ROE
Board, which shall consist of six voting representatives. Except
as provided herein or in the ROE Shareholders Agreement or the ROE
Constituent Documents, Sprint Sub shall be entitled to designate
two voting representatives to the ROE Board, and Atlas shall be
entitled to designate four voting representatives to the ROE
Board. Except as otherwise determined by the Global Venture
Board, the Sprint Parties agree to cause at least one of the
voting representatives designated by Sprint Sub to serve on the
ROE Board to also serve as a voting representative on the GBN
Board and the ROW Board, and the FT/DT Parties agree to cause at
least one of the voting representatives designated by Atlas to
serve as a voting representative on the ROE Board to also serve as
a voting representative on the GBN Board and the ROW Board. In
each election of voting representatives, Atlas and Sprint Sub
shall vote their equity interests in the ROE Parent Entity to
effect the election of the ROE Board nominees so designated. Each
of the Parties agrees to cause its designated representatives on
the ROE Board to act in accordance with the Business Plan of the
ROE Group (except as contemplated by Section 8.3) and the Global
Policies.
(b) Promptly after the formation of the ROE Parent
Entity, the ROE Board shall elect a Chairman who shall serve in
such capacity until the Closing Date. On the Closing Date and
annually thereafter, the ROE Board shall elect a Chairman in
accordance with procedures to be agreed to by the Parties on or
prior to the Closing Date.
(c) Subject to Applicable Law, the ROE Board shall
operate in accordance with the general governance provisions
contained in Article 7.
Section 5.4. Actions Requiring Unanimous Vote.
Notwithstanding anything in Section 7.1(c) to the contrary and
subject to Sections 8.3 and 18.1, the following matters shall
require the affirmative vote of all voting representatives on the
ROE Board:
(a) final approval of a Business Plan or any other Plan
Action with respect to the ROE Group;
(b) approval of any transactions or series of related
transactions (excluding the execution and performance of any
Operative Agreement and any amendment to any Operative Agreement)
between any ROE Entity and any of the Parties or their respective
Affiliates or any material amendments to such approved
transactions, except for Exempt Related Party Transactions;
(c) changes in share capitalization of any ROE Entity;
(d) admission to any ROE Entity of any Person other
than the Parties or, except as specifically provided herein or in
the ROE Shareholders Agreement or the ROE Constituent Documents,
the issuance of any equity interest in any ROE Entity to any
Person;
(e) any amendment to the ROE Constituent Documents;
(f) material decisions regarding the ROE Group
technology or network architecture which would have a material
effect on the ability of the JV Entities to provide seamless
global telecommunication services in accordance with the terms of
and as contemplated by this Agreement and the other Operative
Agreements;
(g) formation of any ROE Entity, unless permitted
without the affirmative vote of all voting representatives on the
ROE Board pursuant to the ROE Shareholders Agreement or the ROE
Constituent Documents;
(h) voluntary dissolution or winding-up of any ROE
Entity or voluntary initiation by and with respect to any ROE
Entity of bankruptcy or similar proceedings, unless permitted
without the affirmative vote of all voting representatives on the
ROE Board pursuant to the ROE Shareholders Agreement or the ROE
Constituent Documents;
(i) the declaration or payment of any dividend or other
distribution by any ROE Entity (whether in cash or property or by
issuance of equity interests in any ROE Entity) or the direct or
indirect redemption, retirement, purchase or other acquisition of
any equity interests in any ROE Entity by such ROE Entity, except
to the extent such dividend, distribution, redemption, retirement,
purchase or other acquisition (x) is required pursuant to the
terms of such equity interests or (y) is permitted without the
affirmative vote of all the voting representatives on the ROE
Board pursuant to the ROE Shareholders Agreement or the ROE
Constituent Documents;
(j) an investment by any ROE Entity in a National
Operation or a Public Telephone Operator pursuant to Section
10.3(f);
(k) any amendment to an Operative Agreement to which
any ROE Entity is a party;
(l) subject to Section 16.8(d), approval of the terms
and conditions of any Affiliation Agreement to which any ROE
Entity is a party and any material amendment of such terms and
conditions; and
(m) any action described in any other Operative
Agreement or other agreement relating to the Joint Venture to
which a JV Entity within the ROE Group is a party which expressly
requires such action to be approved by unanimous action of the ROE
Board.
Section 5.5. ROE Officers. The principal officers of the
ROE Parent Entity shall consist of a Chief Executive Officer and
such other officers as may be appointed by the ROE Board in
accordance with this Section 5.5. The Chief Executive Officer of
the ROE Parent Entity shall be appointed and removed exclusively
by the ROE Board representatives designated by the FT/DT Parties
after consultation with the Sprint Parties; provided that the ROE
Board representatives designated by the Sprint Parties may appoint
and remove the Chief Executive Officer of the ROE Parent Entity
during such time as the Sprint Parties have the Tie-Breaking Vote.
Subject to Section 18.1, all other principal officers of the ROE
Parent Entity shall be appointed by unanimous action of the ROE
Board. The Chief Executive Officer of the ROE Parent Entity will
propose persons, with the concurrence of the Global Venture
Office, to be considered by the ROE Board for such positions. The
principal officers of the ROE Parent Entity will report to the
Chief Executive Officer of the ROE Parent Entity.
Section 5.6. Other ROE Entities. One or more ROE Parent
Entities may be established pursuant to the Tax Matters Agreement.
If the Tax Matters Agreement provides for more than one ROE Parent
Entity, the Parties shall designate one ROE Entity as the ROE
Parent Entity for purposes of approving the matters described in
Section 5.4. The ROE Board may also establish from time to time
one or more additional ROE Entities in order to conduct the
business of the ROE Group in one or more countries within the ROE
Territory. Each such ROE Entity shall be a Wholly Owned
Subsidiary of the ROE Parent Entity, unless after taking into
account tax, regulatory, business and other considerations which
they deem relevant, the Parties determine that such ROE Entity
should be owned directly or indirectly by Sprint, FT and DT.
Except as provided herein or in the ROE Shareholders Agreement,
the ROE Constituent Documents or the Tax Matters Agreement, if
such ROE Entity is owned directly or indirectly by Sprint, FT and
DT, (i) Sprint shall in the aggregate own directly or indirectly
33-1/3% of the voting equity interests in such ROE Entity and FT
and DT shall in the aggregate own directly or indirectly 66-2/3%
of the voting equity interests in such ROE Entity, and (ii) the
governance structure for such ROE Entity shall be identical to the
governance structure for the ROE Parent Entity as provided in the
ROE Shareholders Agreement. The Parties will take all necessary
or appropriate actions to maintain the governance rights of the
Parties with respect to the ROE Parent Entity and each other ROE
Entity as set forth in this Agreement, the ROE Shareholders
Agreement and the ROE Constituent Documents.
ARTICLE 6.
THE GLOBAL BACKBONE NETWORK
Section 6.1. Purpose and Scope of the GBN Group.
(a) Subject to Sections 3.1(c) and (d) and Sections
6.1(b) and (c), the relevant GBN Entities shall conduct the GBN
Business in accordance with the Business Plan of the GBN Group
(subject to Section 8.1) and the Global Policies, including:
(i) planning and operating the Global Backbone Network;
(ii) strategic planning for the Global Backbone Network
and consultation with the Regional Operating Groups, FT, DT,
Atlas, Sprint and Sprint Sub and any Affiliated National
Operations and Affiliated Public Telephone Operators
regarding strategic plans insofar as they relate to networks
or facilities interconnected with the Global Backbone
Network; and
(iii) administration of the GBN Group.
(b) The Parties agree that the JV Services and other
traffic will be progressively routed over the Global Backbone
Network to the extent appropriate and as agreed by the Parties in
light of the regulatory environment and existing commercial
arrangements to which any of the Parties are party.
(c) The Parties agree that, until such time as the
Parties agree that such activities are to be conducted by the GBN
Group, certain or all operational aspects of the GBN Business
shall be conducted by the ROW Group and the ROE Group. During
such time as any such aspects of the GBN Business are to be
conducted by the ROW Group and the ROE Group, the Business Plan
for the GBN Group shall set forth the allocation between the ROW
Group and the ROE Group of responsibility and authority with
respect to such aspects of the GBN Business.
Section 6.2. Formation of the GBN Parent Entity.
(a) As promptly as practicable following the date of
this Agreement, the Sprint Parties and the FT/DT Parties shall
take all steps necessary to form the GBN Parent Entity in such
form of organization and under the laws of such jurisdiction as
agreed to by the Parties.
(b) Prior to the Closing Date, the GBN Parent Entity
shall not (i) conduct any business operations whatsoever, or (ii)
enter into any Contract of any kind, acquire any assets or incur
any liabilities, in each case except as may be approved in writing
by the Parties and except for organizational expenses as may be
approved in writing by the Parties. If this Agreement is
terminated prior to the Closing Date, the GBN Parent Entity shall
be dissolved.
(c) The name and the initial principal place of
business of the GBN Parent Entity shall be specified in its
Constituent Documents or in the GBN Shareholders Agreement.
Except as provided in the GBN Shareholders Agreement, the GBN
Parent Entity's offices shall be separate from the offices of the
Parties, except as otherwise agreed by the Parties. The principal
place of business of the GBN Parent Entity may be transferred to
such other place as may be designated by the Parties.
(d) Except as otherwise provided herein or in the GBN
Shareholders Agreement, the GBN Constituent Documents or the Tax
Matters Agreement, Sprint Sub shall in the aggregate own directly
or indirectly 50% of the voting equity interests of the GBN Parent
Entity, and Atlas shall in the aggregate own directly or
indirectly 50% of the voting equity interests of the GBN Parent
Entity. On the second anniversary of the Closing Date and
annually thereafter, the Parties will review the ownership of the
GBN Parent Entity and the other GBN Entities to determine whether
the ownership interests of Sprint Sub and Atlas should be
adjusted. Notwithstanding the preceding sentence, no such
adjustment shall be made unless in their sole discretion the
Parties determine that such adjustment is appropriate.
Section 6.3. Composition of the GBN Board.
(a) The GBN Parent Entity shall be managed by the GBN
Board, which shall consist of four voting representatives and two
nonvoting representatives. Except as provided herein or in the
GBN Shareholders Agreement, Sprint Sub shall be entitled to
designate two voting representatives to the GBN Board, and Atlas
shall be entitled to designate two voting and two nonvoting
representatives to the GBN Board; provided that to the extent
Applicable Law does not permit nonvoting representatives to serve
on the GBN Board, Atlas may designate a number of persons equal to
the number of nonvoting representatives which it would otherwise
be entitled to designate pursuant to this Section 6.3(a), which
persons shall be entitled to attend all meetings of the GBN Board
but shall not be entitled to vote on any issue considered by the
GBN Board. Except as otherwise determined by the Global Venture
Board, the Sprint Parties agree to cause at least one of the
voting representatives designated by Sprint Sub to serve on the
GBN Board to also serve as a voting representative on the ROW
Board and the ROE Board, and the FT/DT Parties agree to cause at
least one of the voting representatives designated by Atlas to
serve on the GBN Board to also serve as a voting representative on
the ROW Board and the ROE Board. In each election of voting
representatives, Atlas and Sprint Sub shall vote their equity
interests in the GBN Parent Entity to effect the election of the
GBN Board nominees so designated. Each of the Parties agrees to
cause its designated representatives on the GBN Board to act in
accordance with the Business Plan of the GBN Group (except as
contemplated by Section 8.1) and the Global Policies.
(b) Promptly after the formation of the GBN Parent
Entity, the GBN Board shall elect a Chairman who shall serve in
such capacity until the Closing Date. On the Closing Date and
annually thereafter, the GBN Board shall elect a Chairman in
accordance with procedures to be agreed to by the Parties on or
prior to the Closing Date.
(c) Subject to Applicable Law, the GBN Board shall
operate in accordance with the general governance provisions
contained in Article 7.
Section 6.4. Actions Requiring Unanimous Vote.
Notwithstanding anything in Section 7.1(c) to the contrary and
subject to Sections 8.1 and 18.1, the following matters shall
require the affirmative vote of all voting representatives on the
GBN Board:
(a) final approval of a Business Plan or any other Plan
Action with respect to the GBN Group;
(b) approval of any transactions or series of related
transactions (excluding the execution and performance of any
Operative Agreement and any amendment to any Operative Agreement)
between any GBN Entity and any of the Parties or their respective
Affiliates or any material amendments to such approved
transactions, except for Exempt Related Party Transactions;
(c) changes in share capitalization of any GBN Entity;
(d) admission to any GBN Entity of any Person other
than the Parties or, except as specifically provided herein or in
the GBN Shareholders Agreement or the GBN Constituent Documents,
the issuance of any equity interest in any GBN Entity to any
Person;
(e) any amendment to the GBN Constituent Documents;
(f) material decisions regarding the GBN Group
technology or network architecture which would have a material
effect on the ability of the JV Entities to provide seamless
global telecommunication services in accordance with the terms of
and as contemplated by this Agreement and the other Operative
Agreements;
(g) formation of any GBN Entity, unless permitted
without the affirmative vote of all voting representatives on the
GBN Board pursuant to the GBN Shareholders Agreement or in the GBN
Constituent Documents;
(h) voluntary dissolution or winding-up of any GBN
Entity or voluntary initiation by and with respect to any GBN
Entity of bankruptcy or similar proceedings, unless permitted
without the affirmative vote of all voting representatives on the
GBN Board pursuant to the GBN Shareholders Agreement or the GBN
Constituent Documents;
(i) the declaration or payment of any dividend or other
distribution by any GBN Entity (whether in cash or property or by
issuance of equity interests in any GBN Entity) or the direct or
indirect redemption, retirement, purchase or other acquisition of
any equity interests in any GBN Entity by such GBN Entity, except
to the extent such dividend, distribution, redemption, retirement,
purchase or other acquisition (x) is required pursuant to the
terms of such equity interests or (y) is permitted without the
affirmative vote of all the voting representatives on the GBN
Board pursuant to the GBN Shareholders Agreement or the GBN
Constituent Documents;
(j) any amendment to an Operative Agreement to which
any GBN Entity is a party;
(k) subject to Section 16.8(d), approval of the terms
and conditions of any Affiliation Agreement to which any GBN
Entity is a party and any material amendment of such terms and
conditions; and
(l) any action described in any other Operative
Agreement or other agreement relating to the Joint Venture to
which a JV Entity within the GBN Group is a party which expressly
requires such action to be approved by unanimous action of the GBN
Board.
Section 6.5. GBN Officers. Subject to Section 18.1, the
principal officers of the GBN Parent Entity shall consist of a
Chief Executive Officer and such other officers as may be
appointed by unanimous action of the GBN Board. Such officers may
also be officers or employees of ROW Entities or ROE Entities.
The Chief Executive Officer of the GBN Parent Entity will propose
persons, with the concurrence of the Global Venture Office, to be
considered by the GBN Board for such positions. The principal
officers of the GBN Parent Entity will report to the Chief
Executive Officer of the GBN Parent Entity.
Section 6.6. Other GBN Entities. One or more GBN Parent
Entities may be established pursuant to the Tax Matters Agreement.
If the Tax Matters Agreement provides for more than one GBN Parent
Entity, the Parties shall designate one GBN Entity as the GBN
Parent Entity for purposes of approving the matters described in
Section 6.4. The GBN Board may also establish from time to time
one or more additional GBN Entities in order to conduct the GBN
Business. Each such GBN Entity shall be a Wholly Owned Subsidiary
of the GBN Parent Entity, unless after taking into account tax,
regulatory, business and other considerations which they deem
relevant, the Parties determine that such GBN Entity should be
owned directly or indirectly by Sprint, FT and DT. Except as
provided herein or in the GBN Shareholders Agreement, the GBN
Constituent Documents or the Tax Matters Agreement, if such GBN
Entity is owned directly or indirectly by Sprint, FT and DT,
(i) Sprint shall in the aggregate own directly or indirectly 50%
of the voting equity interests in such GBN Entity and FT and DT
shall in the aggregate own directly or indirectly 50% of the
voting equity interests in such GBN Entity, and (ii) the
governance structure for such GBN Entity shall be identical to the
governance structure for the GBN Parent Entity as provided in the
GBN Shareholders Agreement. The Parties will take all necessary
or appropriate actions to maintain the governance rights of the
Parties with respect to the GBN Parent Entity and each other GBN
Entity as set forth in this Agreement, the GBN Shareholders
Agreement and the GBN Constituent Documents.
ARTICLE 7.
GOVERNANCE PROVISIONS
Section 7.1. Meetings; Quorum; Notice.
(a) The Chairman of each of the Global Venture Board,
the Global Venture Committee, the Global Venture Office, the GBN
Board, the ROW Board and the ROE Board (collectively, the
"Boards") shall prepare or direct the preparation of the agenda
for, and preside over, meetings of the Board on which he serves as
Chairman. The Chairman shall deliver such agenda to each
representative on the Board on which he serves as Chairman at
least two Business Days prior to the giving of notice of a regular
or special meeting, and any representative on such Board may add
items to such agenda.
(b) The Parties anticipate that (i) the Global Venture
Board shall meet at least once every six months, (ii) the Global
Venture Committee shall meet at least once every two months until
the second anniversary of the Closing and thereafter once every
six months (unless the representatives on the Global Venture
Committee unanimously determine to meet more frequently) and (iii)
regular meetings of all other Boards shall be held once every two
months at such places and at such times as each such Board may
from time to time determine, and to the extent applicable and
possible shall be held at the same place and on the same date as
the meetings of the other Boards and any other Governing Boards.
Special meetings of any Board may be called by any representative
on such Board and shall be held at such place as may be determined
by such Board, and to the extent applicable and possible shall be
held at the same place and on the same date as the special
meetings, if any, of the other Boards and any other Governing
Boards. Written notice of the time and place of each regular and
special meeting of any Board shall be given by or at the direction
of the Chairman of such Board to each representative on such
Board, in the case of a regular meeting, at least ten Business
Days, and in the case of a special meeting, at least two Business
Days, before such meeting. Whenever notice is required to be
given to any representative on any Board, such notice shall
specify the agenda for such meeting and, to the extent
appropriate, shall be accompanied by supporting documentation.
The required notice to any representative may be waived by such
representative in writing. Attendance by a representative at a
meeting shall constitute a waiver of any required notice of such
meeting by such representative, except when such representative
attends such meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business
because the meeting is not properly called or convened.
(c) Except as expressly provided in this Agreement, the
presence of each representative (each voting representative in the
case of the Global Venture Committee) shall be required to
constitute a quorum for the transaction of any business by the
Global Venture Board, the Global Venture Committee or the Global
Venture Office and the presence of at least one of the voting
representatives of each of Sprint Sub and Atlas shall be required
to constitute a quorum for the transaction of any business by the
GBN Board, the ROW Board or the ROE Board. Each Party shall use
its reasonable efforts to ensure the existence of a quorum at any
duly convened meeting of any Board. Except as expressly provided
in this Agreement, no action shall be taken by the Global Venture
Board, the Global Venture Committee or the Global Venture Office
with respect to any matter without the affirmative vote of all of
the representatives (all the voting representatives in the case of
the Global Venture Committee) on such Board present at a duly
constituted meeting and no action shall be taken by the GBN Board,
the ROW Board or the ROE Board with respect to any matter without
the affirmative vote of a majority of the voting representatives
of such Board present at a duly constituted meeting. With respect
to the GBN Board, the ROW Board and the ROE Board, if fewer than
all of the voting representatives designated to such Board by a
given Party are present at a meeting, to the extent permitted by
Applicable Law, each representative or representatives of a Party
present at such meeting shall be entitled to vote the entire
voting power held by all voting representatives designated by such
Party. If more than one voting representative appointed by a
given Party is present at a meeting, to the extent permitted by
Applicable Law, such representatives shall vote such Party's
entire voting power in the same manner.
(d) While the Parties intend that the representatives
on each of the Boards shall attend meetings of such Boards in
person, the Parties acknowledge that representatives may from time
to time be prevented from doing so due to various circumstances.
Representatives on each Board may, therefore, to the extent
permitted by Applicable Law, participate in a meeting of such
Board by means of conference telephone or similar communications
equipment by means of which all persons participating in the
meeting can hear each other, and participation in a meeting
pursuant to this Section 7.1(d) shall constitute presence in
person at such meeting, except where a representative participates
in the meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business on
the ground that the meeting is not properly called or convened.
(e) To the extent permitted by Applicable Law, any
action required or permitted to be taken at a meeting of any Board
may be taken without a meeting if a written consent, setting forth
the action so taken, is signed by all the representatives on such
Board and filed with the minutes of the proceedings of such Board.
Such consent shall have the same force and effect as a unanimous
affirmative vote of the representatives on such Board.
(f) Each Party may designate by written notice to the
other Parties an alternate representative to act in the absence of
the representative on the Global Venture Board designated by such
Party. Each representative on the Global Venture Board may
designate by written notice to the other representatives on the
Global Venture Board an alternate voting representative to act in
the absence of the voting representative on the Global Venture
Committee designated by such representative on the Global Venture
Board. Each member of the Global Venture Office may designate by
written notice to the other Parties and the Global Venture Office
an alternate member to act in the absence of such member on the
Global Venture Office. To the extent permitted by Applicable Law,
each of Sprint Sub and Atlas may designate by written notice to
the other an alternate voting representative to act in the absence
of any of its voting representatives on the GBN Board, the ROW
Board and the ROE Board. The participation and acts (including
the execution of any document) by any alternate representative
shall be deemed to be the act of the representative for whom the
alternate representative is acting (and any alternate
representative of the Chairman of any Board shall have all the
powers of the Chairman of such Board in each case) without any
evidence of the absence or unavailability of such representative
(or the Chairman of such Board). The Parties shall designate to
each other their initial nominees to serve on the Global Venture
Committee, the Global Venture Office, the GBN Board, the ROW Board
and the ROE Board on or prior to the Closing Date.
Section 7.2. Removal; Resignation; Vacancies. The
representatives on each Board shall hold office at the pleasure of
the Party or other person which designated them. Any such Party
or person may at any time, by written notice to each other Party
and to the applicable Board, remove (with or without cause) its
representative or an alternate representative on such Board and
designate a new representative or alternate representative.
Subject to Applicable Law, no representative or alternate
representative may be removed except by the Party or person
designating the same. Any representative on any Board may resign
at any time by giving written notice to the Party or other person
which appointed such representative and to such Board. Such
resignation shall take effect on the date shown on or specified in
such notice or, if such notice is not dated and the date of
resignation is not specified in such notice, on the date of the
receipt of such notice by the applicable Board. No acceptance of
such resignation shall be necessary to make it effective. Any
vacancy on any Board shall be filled only by the Party or person
whose representative has caused the vacancy by giving written
notice to such Board and to each other Party, and each of the
Parties agrees, as necessary, to vote, or to cause its designated
representatives on such Board to vote, for any person so nominated
by the Party or other person whose representative has caused such
vacancy.
Section 7.3. No Remuneration. Unless the Parties otherwise
agree, no person shall be entitled to any fee, remuneration or
compensation in connection with his service as a representative or
alternate representative on or as a member of any Board.
ARTICLE 8.
SPECIAL MATTERS, PLAN ACTIONS AND DEADLOCKS
Section 8.1. GBN Special Matters.
(a) If a GBN Special Matter is implemented pursuant to
Section 8.5(g)(3), the assets, business and any related
liabilities contemplated by such GBN Special Matter (the "GBN
Special Matter Project") shall be owned by the Party which has
declared such GBN Special Matter (the "GBN Proposing Party") in a
separate entity outside of the Joint Venture. The GBN Proposing
Party agrees that during the GBN Special Matter Period (or, if the
GBN Non-Proposing Party elects to cause the GBN Board to direct
the GBN Parent Entity to purchase the GBN Special Matter Project
pursuant to Section 8.1(b), until the date the closing of such
purchase is consummated or abandoned in accordance with
Section 8.4):
(i) such entity will be a Wholly Owned Subsidiary of the GBN
Proposing Party (the "GBN Special Matter Subsidiary");
(ii) the GBN Special Matter Subsidiary will not engage in any
business other than the ownership, operation and
management of such GBN Special Matter Project;
(iii) the GBN Special Matter Subsidiary and the GBN Parent
Entity shall enter into an Affiliation Agreement in
accordance with Section 16.8;
(iv) all costs of such GBN Special Matter will be funded by
the GBN Special Matter Subsidiary; and
(v) the GBN Proposing Party shall keep separate books and
records that account for and record the contributions
made to, the results of the operations and activities
of, and the distributions made and dividends paid by the
GBN Special Matter Subsidiary that owns such GBN Special
Matter Project.
(b) During the GBN Special Matter Period, the voting
representatives on the GBN Board of the Party whose voting
representatives on the GBN Board did not approve the GBN Special
Matter (the "GBN Non-Proposing Party") shall have the right
(subject, in the event that a Sprint Party is the GBN
Non-Proposing Party, to approval of the exercise of such right in
accordance with Section 15.38) to cause the GBN Board to direct
the GBN Parent Entity to purchase from the GBN Proposing Party
(and in such case the Parties, as necessary, shall vote their
Venture Interests, and cause their representatives on the GBN
Board to vote, in favor of such action), and the GBN Proposing
Party shall agree to sell, such GBN Special Matter Project. The
purchase price to be paid shall be equal to the Appraised Value of
such GBN Special Matter Project at the time that the voting
representatives of the GBN Non-Proposing Party on the GBN Board
cause the GBN Parent Entity to exercise its right to purchase the
GBN Special Matter Project as determined in accordance with
Section 17.8. The Parties shall negotiate in good faith, for a
period not to exceed sixty (60) days, to structure the GBN Parent
Entity's purchase of the GBN Special Matter Project so as to
minimize the tax consequences of such purchase to the parties
thereto, including purchasing all of the outstanding equity
interests of the GBN Special Matter Subsidiary. However, if at
the end of such sixty (60) day period the Parties are unable to
reach agreement with respect to an alternative structure, the GBN
Parent Entity shall have the right to purchase the assets
comprising the GBN Special Matter Project (subject to assuming the
related liabilities) for an amount of cash equal to the Appraised
Value thereof. The closing of any such transaction pursuant to
this Section 8.1(b) shall be effected in accordance with Section
8.4. If at the end of the GBN Special Matter Period, the GBN
Parent Entity has not been directed to purchase the GBN Special
Matter Project, or if such transaction has been abandoned, any
Affiliation Agreement entered into between the GBN Special Matter
Subsidiary and the GBN Parent Entity pursuant to Section
8.1(a)(iii) shall remain in effect in accordance with its terms.
(c) No GBN Special Matter shall be deemed an amendment
of this Agreement or any other Operative Agreement. No Party
shall Offer, or cause any JV Entity to Offer, any Restricted
Services pursuant to a GBN Special Matter. To the extent that any
provision of a GBN Special Matter deals with the same matter as
any Operative Agreement, the provisions of such Operative
Agreement shall control.
Section 8.2. NAFTA Plan Actions.
(a) If a NAFTA Plan Action is implemented pursuant to
Section 8.5(g)(3) and such NAFTA Plan Action relates to a project
(the "NAFTA Plan Action Project") that cannot be accounted for
separately by application of the Plan Action/Special Matter
Accounting Principles, the assets, business and any related
liabilities contemplated by such NAFTA Plan Action Project shall
be owned by the relevant ROW Entity, and such ROW Entity shall
conduct its activities with respect to such NAFTA Plan Action in
accordance with the terms of such Plan Action. The Parties agree
that:
(i) all direct ascertainable costs of the NAFTA Plan Action
Project shall be funded in accordance with Section
8.2(c); and
(ii) such NAFTA Plan Action Project shall give rise to the
rights provided in Section 8.2(d).
(b) If a NAFTA Plan Action is implemented pursuant to
Section 8.5(g)(3) and such NAFTA Plan Action relates to a NAFTA
Plan Action Project that can be accounted for separately by
application of the Plan Action/Special Matter Accounting
Principles, such NAFTA Plan Action Project shall be owned by
Sprint Sub in a separate entity outside of the Joint Venture.
Sprint Sub agrees that during the NAFTA Plan Period (or, if a
representative of the FT/DT Parties on the ROW Board elects to
cause the ROW Board to direct the ROW Parent Entity to purchase
the NAFTA Plan Action Project pursuant to Section 8.2(d)(i), until
the date the closing of such purchase is consummated or abandoned
in accordance with Section 8.4):
(i) such entity will be a Wholly Owned Subsidiary of Sprint
Sub (the "Sprint Plan Action Subsidiary");
(ii) the Sprint Plan Action Subsidiary will not engage in any
business other than the ownership, operation and
management of such NAFTA Plan Action Project;
(iii) the Sprint Plan Action Subsidiary and the ROW Parent
Entity shall enter into an Affiliation Agreement in
accordance with Section 16.8;
(iv) the NAFTA Plan Action Project shall give rise to the
rights provided in Section 8.2(d);
(v) all costs of the NAFTA Plan Action Project shall be
funded by the Sprint Plan Action Subsidiary; and
(vi) the Sprint Parties shall keep separate books and records
that account for and record the contributions made to,
the results of the operations and activities of, and the
distributions made and dividends paid by the Sprint Plan
Action Subsidiary that owns such NAFTA Plan Action
Project.
If, at the end of the NAFTA Plan Period, the ROW Parent Entity has
not been directed to purchase the NAFTA Plan Action Project
pursuant to Section 8.2(d), or if such a purchase has been
abandoned, any Affiliation Agreement entered into between the
Sprint Plan Action Subsidiary and the ROW Parent Entity pursuant
to Section 8.2(b)(iii) shall remain in effect in accordance with
its terms.
(c) If a NAFTA Plan Action Project cannot be accounted
for separately by application of the Plan Action/Special Matter
Accounting Principles, all direct ascertainable costs of the NAFTA
Plan Action Project (including costs incurred in connection with a
determination of Appraised Value undertaken in connection with the
issuance of nonvoting equity securities pursuant to this Section
8.2(c)) shall be funded by capital contributions by Sprint Sub to
the ROW Parent Entity unless Atlas chooses to fund any or all of
its respective share of such costs by capital contributions to the
ROW Parent Entity simultaneously with each contribution of funds
by Sprint Sub in respect of such project. In consideration for
such contributions, the ROW Parent Entity shall issue to Sprint
Sub and Atlas nonvoting equity interests in the ROW Parent Entity
in accordance with principles to be agreed upon by the Parties
prior to the Closing Date pursuant to Section 15.37 (the "Funding
Principles"). To the extent that the issuance of such equity
interests results in any adjustment of the Percentage Interests of
Sprint Sub and Atlas in the ROW Parent Entity, no such adjustment
shall affect the governance rights of Sprint Sub or Atlas under
this Agreement or the related Shareholders Agreement.
(d) During the NAFTA Plan Period, (i) in the case of
any NAFTA Plan Action Project which can be accounted for
separately by application of the Plan Action/Special Matter
Accounting Principles and which is therefore owned by a Sprint
Plan Action Subsidiary, the Atlas voting representatives on the
ROW Board shall have the right to cause the ROW Board to direct
the ROW Parent Entity to purchase from the Sprint Plan Action
Subsidiary (and in such case the Parties, as necessary, shall vote
their Venture Interests, and cause their representatives on such
Governing Board to vote, in favor of such action), and Sprint Sub
shall cause the Sprint Plan Action Subsidiary to agree to sell,
such NAFTA Plan Action Project, and (ii) in the case of a NAFTA
Plan Action Project which cannot be accounted for separately by
application of the Plan Action/Special Matter Accounting
Principles and which is therefore owned by the relevant ROW
Entity, Atlas shall have the right to purchase from Sprint Sub
that number of equity interests in the ROW Parent Entity as shall
be sufficient to return the Percentage Interest of Atlas in the
ROW Parent Entity to the same Percentage Interest in the ROW
Parent Entity as Atlas owned prior to any adjustment in the
Percentage Interests of Sprint Sub and Atlas in the ROW Parent
Entity as a result of the contributions by Sprint Sub and Atlas in
respect of such NAFTA Plan Action Project (subject to any
adjustments as may be provided in the Funding Principles to give
effect to Section 11.4). The Funding Principles may include other
procedures to implement the purpose of the foregoing sentence.
The purchase price payable by Atlas in connection with the
transactions described in clauses (i) and (ii) above shall be
determined as follows:
(A) If Section 8.2(d)(i) applies, the purchase price shall
be equal to the Appraised Value of such project at the
time that the Atlas voting representatives on the ROW
Board elected to cause the ROW Parent Entity to purchase
the NAFTA Plan Action Project as determined in
accordance with Section 17.8. The Parties shall
negotiate in good faith, for a period not to exceed
sixty (60) days, to structure the ROW Parent Entity's
purchase of such NAFTA Plan Action Project so as to
minimize the tax consequences of such purchase to the
parties thereto, including purchasing all of the
outstanding equity interests of the Sprint Plan Action
Subsidiary. However, if at the end of such sixty (60)
day period the Parties are unable to reach agreement
with respect to an alternative structure, the ROW Parent
Entity shall have the right to purchase the assets
comprising the NAFTA Plan Action Project (subject to
assuming the related liabilities) for an amount of cash
equal to the Appraised Value thereof. The closing of
any such transaction pursuant to this Section 8.2(d)(A)
shall be effected in accordance with Section 8.4.
(B) If Section 8.2(d)(ii) applies, the purchase price shall
be equal to Atlas' proportionate share (such
proportionate share to be determined by reference to the
Percentage Interest of Atlas in the ROW Parent Entity
prior to any adjustment in the Percentage Interests of
Sprint Sub and Atlas in the ROW Parent Entity as a
result of contributions by Sprint Sub and Atlas to the
ROW Parent Entity in respect of the NAFTA Plan Action
Project, subject to any adjustments as may be provided
in the Funding Principles to give effect to Section
11.4) of the direct ascertainable costs paid by Sprint
Sub to establish and operate the NAFTA Plan Action
Project (including costs incurred in connection with a
determination of Appraised Value undertaken in
connection with the issuance of nonvoting equity
securities pursuant to Section 8.2(c)), adjusted to
reflect any such direct ascertainable costs paid by
Atlas, together with interest thereon from the date of
each such investment by Sprint Sub to the date of
payment calculated at the Applicable LIBOR Rate plus 10
percentage points per annum. The closing of any such
transaction pursuant to this Section 8.2(d)(B) shall be
effected in accordance with Section 8.4.
(e) No NAFTA Plan Action shall be deemed an amendment
of this Agreement or any other Operative Agreement. No Party
shall Offer, or cause any JV Entity to Offer, any Restricted
Services pursuant to a NAFTA Plan Action. To the extent that any
provision of a NAFTA Plan Action deals with the same matter as any
Operative Agreement, the provisions of such Operative Agreement
shall control.
Section 8.3. ROE Plan Actions.
(a) If an ROE Plan Action is implemented pursuant to
Section 8.5(g)(3) and such ROE Plan Action relates to a project
(the "ROE Plan Action Project") that cannot be accounted for
separately by application of the Plan Action/Special Matter
Accounting Principles, the assets, business and any related
liabilities contemplated by such ROE Plan Action Project shall be
owned by the relevant ROE Entity, and such ROE Entity shall
conduct its activities with respect to such ROE Plan Action in
accordance with the terms of such Plan Action. The Parties agree
that:
(i) all direct ascertainable costs of the ROE Plan Action
Project shall be funded in accordance with Section
8.3(c); and
(ii) such ROE Plan Action Project shall give rise to the
rights provided in Section 8.3(d).
(b) If an ROE Plan Action is implemented pursuant to
Section 8.5(g)(3) and such ROE Plan Action relates to an ROE Plan
Action Project that can be accounted for separately by application
of the Plan Action/Special Matter Accounting Principles, such ROE
Plan Action Project shall be owned by Atlas in a separate entity
outside of the Joint Venture. Atlas agrees that during the ROE
Plan Period (or, if a representative of the Sprint Parties on the
ROE Board elects to cause the ROE Board to direct the ROE Parent
Entity to purchase the ROE Plan Action Project pursuant to
Section 8.3(d)(i), until the date the closing of such purchase is
consummated or abandoned in accordance with Section 8.4):
(i) such entity will be a Wholly Owned Subsidiary of Atlas
(the "Atlas Plan Action Subsidiary");
(ii) the Atlas Plan Action Subsidiary will not engage in any
business other than the ownership, operation and
management of such ROE Plan Action Project;
(iii) the Atlas Plan Action Subsidiary and the ROE Parent
Entity shall enter into an Affiliation Agreement in
accordance with Section 16.8;
(iv) the ROE Plan Action Project shall give rise to the
rights provided in Section 8.3(d);
(v) all costs of the ROE Plan Action Project shall be funded
by the Atlas Plan Action Subsidiary; and
(vi) the FT/DT Parties shall keep separate books and records
that account for and record the contributions made to,
the results of the operations and activities of, and the
distributions made and dividends paid by the Atlas Plan
Action Subsidiary that owns such ROE Plan Action
Project.
If, at the end of the ROE Plan Period, the ROE Parent Entity has
not been directed to purchase the ROE Plan Action Project pursuant
to Section 8.3(d), or if such a purchase has been abandoned, any
Affiliation Agreement entered into between the Atlas Plan Action
Subsidiary and the ROE Parent Entity pursuant to Section
8.3(b)(iii) shall remain in effect in accordance with its terms.
(c) If an ROE Plan Action Project cannot be accounted
for separately by application of the Plan Action/Special Matter
Accounting Principles, all direct ascertainable costs of the ROE
Plan Action Project (including costs incurred in connection with a
determination of Appraised Value undertaken in connection with the
issuance of nonvoting equity securities pursuant to this Section
8.3(c)) shall be funded by capital contributions by Atlas to the
ROE Parent Entity unless Sprint Sub chooses (subject to approval
of such choice in accordance with Section 15.38) to fund any or
all of its respective share of such costs by capital contributions
to the ROE Parent Entity simultaneously with each contribution of
funds by Atlas in respect of such project. In consideration for
such contributions, the ROE Parent Entity shall issue to Sprint
Sub and Atlas nonvoting equity interests in the ROE Parent Entity
in accordance with the Funding Principles. To the extent that the
issuance of such equity interests results in any adjustment of the
Percentage Interests of Sprint Sub and Atlas in the ROE Parent
Entity, no such adjustment shall affect the governance rights of
Sprint Sub or Atlas under this Agreement or the related
Shareholders Agreement.
(d) During the ROE Plan Period, (i) in the case of any
ROE Plan Action Project which can be accounted for separately by
application of the Plan Action/Special Matter Accounting
Principles and which is therefore owned by an Atlas Plan Action
Subsidiary, the Sprint Sub voting representatives on the ROE Board
shall have the right (subject to approval of the exercise of such
right in accordance with Section 15.38) to cause the ROE Board to
direct the ROE Parent Entity to purchase from the Atlas Plan
Action Subsidiary (and in such case the Parties, as necessary,
shall vote their Venture Interests, and cause their
representatives on such Governing Board to vote, in favor of such
action), and Atlas shall cause the Atlas Plan Action Subsidiary to
agree to sell, such ROE Plan Action Project, and (ii) in the case
of an ROE Plan Action Project which cannot be accounted for
separately by application of the Plan Action/Special Matter
Accounting Principles and which is therefore owned by the relevant
ROE Entity, Sprint Sub shall have the right to purchase (subject
to approval of the exercise of such right in accordance with
Section 15.38) from Atlas that number of equity interests in the
ROE Parent Entity as shall be sufficient to return the Percentage
Interest of Sprint Sub in the ROE Parent Entity to the same
Percentage Interest in the ROE Parent Entity as Sprint Sub owned
prior to any adjustment in the Percentage Interests of Sprint Sub
and Atlas in the ROE Parent Entity as a result of the
contributions by Sprint Sub and Atlas in respect of such ROE Plan
Action Project (subject to any adjustments as may be provided in
the Funding Principles to give effect to Section 11.4). The
Funding Principles may include other procedures to implement the
purpose of the foregoing sentence. The purchase price payable by
Sprint Sub in connection with the transactions described in
clauses (i) and (ii) above shall be determined as follows:
(A) If Section 8.3(d)(i) applies, the purchase price shall
be equal to the Appraised Value of such project at the
time that the Sprint Sub voting representatives on the
ROE Board elected to cause the ROE Parent Entity to
purchase the ROE Plan Action Project as determined in
accordance with Section 17.8. The Parties shall
negotiate in good faith, for a period not to exceed
sixty (60) days, to structure the ROE Parent Entity's
purchase of such ROE Plan Action Project so as to
minimize the tax consequences of such purchase to the
parties thereto, including purchasing all of the
outstanding equity interests of the Atlas Plan Action
Subsidiary. However, if at the end of such sixty (60)
day period the Parties are unable to reach agreement
with respect to an alternative structure, the ROE Parent
Entity shall have the right to purchase the assets
comprising the ROE Plan Action Project (subject to
assuming the related liabilities) for an amount of cash
equal to the Appraised Value thereof. The closing of
any such transaction pursuant to this Section 8.3(d)(A)
shall be effected in accordance with Section 8.4.
(B) If Section 8.3(d)(ii) applies, the purchase price shall
be equal to Sprint Sub's proportionate share (such
proportionate share to be determined by reference to the
Percentage Interest of Sprint Sub in the ROE Parent
Entity prior to any adjustment in the Percentage
Interests of Sprint Sub and Atlas in the ROE Parent
Entity as a result of contributions by Sprint Sub and
Atlas to the ROE Parent Entity in respect of the ROE
Plan Action Project, subject to any adjustments as may
be provided in the Funding Principles to give effect to
Section 11.4) of the direct ascertainable costs paid by
Atlas to establish and operate the ROE Plan Action
Project (including costs incurred in connection with a
determination of Appraised Value undertaken in
connection with the issuance of nonvoting equity
securities pursuant to Section 8.3(c)), adjusted to
reflect any such direct ascertainable costs paid by
Sprint Sub, together with interest thereon from the date
of each such investment by Atlas to the date of payment
calculated at the Applicable LIBOR Rate plus 10
percentage points per annum. The closing of any such
transaction pursuant to this Section 8.3(d)(B) shall be
effected in accordance with Section 8.4.
(e) No ROE Plan Action shall be deemed an amendment of
this Agreement or any other Operative Agreement. No Party shall
Offer, or cause any JV Entity to Offer, any Restricted Services
pursuant to an ROE Plan Action. To the extent that any provision
of an ROE Plan Action deals with the same matter as any Operative
Agreement, the provisions of such Operative Agreement shall
control.
Section 8.4. Closing of Purchase of Project.
(a) The Parties shall use commercially reasonable
efforts to obtain all Governmental Approvals relating to the
closing of any purchase and sale of assets or equity interests
pursuant to Section 8.2(d)(A) or 8.3(d)(A) or equity interests
pursuant to Section 8.2(d)(B) or 8.3(d)(B). Unless the Parties
have failed to receive all required Governmental Approvals or any
of the Governmental Approvals provided with respect to the
transaction have imposed a Burdensome Condition, the closing of
any such purchase and sale of assets or equity interests pursuant
to Section 8.2(d)(A) or 8.3(d)(A) or equity interests pursuant to
Section 8.2(d)(B) or 8.3(d)(B) shall be consummated in the
principal office of the relevant JV Entity on or before the one
hundred and fiftieth (150th) day following the exercise of such
right to purchase. If the required Governmental Approvals have
not been received at the time the closing is scheduled to occur
hereunder or any of the Governmental Approvals provided with
respect to such purchase and sale have imposed a Burdensome
Condition, the closing shall be postponed until no later than the
second anniversary of the end of the NAFTA Plan Period or ROE Plan
Period, as applicable. If by such time all Governmental Approvals
required to consummate such purchase and sale have not been
obtained or any of the Governmental Approvals provided with
respect to such purchase and sale have imposed a Burdensome
Condition, such purchase and sale shall be abandoned.
(b) At the closing of any purchase and sale pursuant to
Section 8.4(a), (i) the selling Person shall transfer, assign and
deliver to the non-selling Person such transfer documents and
other documents or instruments reasonably required by counsel for
the non-selling Person to convey the title of the selling Person,
and (ii) the non-selling Person shall pay the purchase price in
cash in U.S. Dollars and, if the purchase and sale is of the
assets comprising a GBN Special Matter Project, a NAFTA Plan
Action Project or an ROE Plan Action Project, the non-selling
Person shall deliver to the selling Person such documents or
instruments reasonably required by counsel for the selling Person
to effect the assumption by the non-selling Person of the
liabilities related to such assets. In addition, at the closing
of such purchase and sale, (x) if the purchase and sale is of
equity interests, the selling Person shall transfer such equity
interests free and clear of all Liens and (y) if the purchase and
sale is of the assets comprising a GBN Special Matter Project, a
NAFTA Plan Action Project or an ROE Plan Action Project, the
selling Person shall transfer such assets free and clear of all
Liens other than those which are disclosed or those which do not
materially adversely affect the use of such assets by the non-
selling Person. In the case of a transfer of equity interests,
the non-selling Person shall deliver to the selling Person such
investment representations as may be reasonably requested for
securities law purposes.
Section 8.5. Deadlocks.
(a) The Parties agree that all Deadlocks on the
Governing Board of each JV Entity, the Global Venture Office, the
Global Venture Committee and the Global Venture Board shall be
resolved in accordance with this Section 8.5.
(b) If a Deadlock occurs on the Governing Board of a JV
Entity, any voting representative on such Governing Board may,
within twenty (20) days of the vote which gave rise to such
Deadlock, by written notice to the other voting representatives on
such Governing Board and to the Global Venture Committee, refer
such Deadlock to the Global Venture Committee for resolution
pursuant to this Section 8.5. Such voting representative shall
indicate in such notice his intention that such Deadlock be
resolved: (i) as a Special Deadlock Matter, if relating to the
failure to approve a Business Plan as provided in Section 16.1;
(ii) as a potential GBN Special Matter, if and to the extent
(A) such Deadlock arose from the failure of the Governing Board of
a GBN Entity to adopt a proposed action with respect to an
expenditure relating to the expansion of the capacity of the
Global Backbone Network which requires an additional investment or
capital expenditure, and (B) such voting representative is a
voting representative of the GBN Proposing Party; (iii) as a
potential NAFTA Plan Action, if and to the extent (A) such
Deadlock arose from the failure of the Governing Board of an ROW
Entity to adopt a Plan Action relating to a NAFTA Country, and
(B) such voting representative proposed such Plan Action and is a
representative of the Sprint Parties; (iv) as a potential ROE Plan
Action, if (A) such Deadlock arose from the failure of a Governing
Board of an ROE Entity to adopt a Plan Action, and (B) such voting
representative proposed such Plan Action and is a representative
of the FT/DT Parties; and (v) as a Deadlock not described in
clauses (i) through (iv). If no such voting representative refers
such Deadlock to the Global Venture Committee for resolution
within such 20-day period, no further action shall be taken at or
pursuant to such meeting with respect to the proposal which gave
rise to such Deadlock, but such proposal may be presented at a
subsequent meeting of the relevant Governing Board and any
resulting Deadlock shall be resolved in accordance with this
Section 8.5.
(c) If a Deadlock occurs on the Governing Board of a JV
Entity and such Deadlock is referred to the Global Venture
Committee for resolution as a Special Deadlock Matter pursuant to
Section 8.5(b)(i) or a Deadlock described in Section 8.5(b)(v),
and such Deadlock arose from the failure of the Governing Board
of: (i) an ROW Entity to adopt a Plan Action relating to a NAFTA
Country; or (ii) an ROE Entity to adopt a Plan Action, a
representative of the Sprint Parties (in the case of clause (i))
or of the FT/DT Parties (in the case of clause (ii)) on such
Governing Board may, within ten (10) days of such referral by
delivery of written notice to the other voting representatives on
such Governing Board and to the Global Venture Committee, request
that such Deadlock be treated as a potential NAFTA Plan Action or
ROE Plan Action as the case may be (including for the purpose of
preventing resolution of such Deadlock as a Special Deadlock
Matter). Upon delivery of such notice, then such Deadlock shall
not be resolved as a Special Deadlock Matter and shall be resolved
as a potential NAFTA Plan Action or ROE Plan Action, as
applicable, subject to Section 8.5(g)(3).
(d) If a Deadlock occurs at the Global Venture Office
with respect to any agenda item which is originally considered by
the Global Venture Office, any voting member of the Global Venture
Office may, within twenty (20) days of the vote which gave rise to
such Deadlock, by written notice to the other voting members of
the Global Venture Office and to the Global Venture Committee,
refer such Deadlock to the Global Venture Committee for resolution
pursuant to this Section 8.5. If no such voting member refers
such Deadlock to the Global Venture Committee for resolution
within such 20-day period, no further action shall be taken at or
pursuant to such meeting with respect to the proposal which gave
rise to such Deadlock, but such proposal may be presented at a
subsequent meeting of the Global Venture Office and any resulting
Deadlock shall be resolved in accordance with this Section 8.5.
(e) If a Deadlock occurs at the Global Venture
Committee with respect to (i) any agenda item which was originally
considered by the Global Venture Committee, (ii) any Deadlock
referred to the Global Venture Committee by the Governing Board of
a JV Entity pursuant to Section 8.5(b) or (iii) any Deadlock
referred to the Global Venture Committee by the Global Venture
Office pursuant to Section 8.5(d), such Deadlock shall be
reconsidered at one or more subsequent meetings of the Global
Venture Committee. If such Deadlock cannot be resolved at one or
more subsequent Global Venture Committee meetings:
(x) in the case of a potential GBN Special Matter,
NAFTA Plan Action or ROE Plan Action, within forty-five (45)
days of the date on which such Deadlock was originally
referred to the Global Venture Committee;
(y) in the case of a Special Deadlock Matter, within
the period ending on the Funding Extension Deadline, unless
the Funding Extension Commitment with respect thereto shall
have occurred or such Special Deadlock Matter does not relate
to a Funding Deadlock, in which case clause (z) shall apply;
or
(z) in the case of any other Deadlock, within two
hundred seventy (270) days of the date on which such Deadlock
was originally considered by or referred to the Global
Venture Committee;
such Deadlock shall be automatically and immediately referred to
the Global Venture Board for resolution. The Global Venture Board
shall have:
(1) in the case of a potential GBN Special Matter,
NAFTA Plan Action or ROE Plan Action, forty-five (45) days
(or such extended period as the Global Venture Board members
agree in writing is appropriate in such case);
(2) in the case of a Special Deadlock Matter, the
period ending fifteen (15) days following the Funding
Extension Deadline (or such extended period as the Global
Venture Board members agree in writing is appropriate in such
case), unless the Funding Extension Commitment with respect
thereto shall have occurred or such Special Deadlock Matter
does not relate to a Funding Deadlock, in which case clause
(3) shall apply; and
(3) in the case of any other Deadlock, ninety (90) days
(or such extended period as the Global Venture Board members
agree in writing is appropriate in such case);
to consider and resolve such Deadlock.
(f) If a Deadlock considered by the Global Venture
Board pursuant to Section 8.5(e) cannot be resolved by the Global
Venture Board within the period referred to in Section 8.5(e)(2)
and such Deadlock relates to a Special Deadlock Matter, subject to
Section 8.6, any Party within one hundred eighty (180) days of the
end of such period may, by written notice to the other Parties and
the Global Venture Board, declare an impasse (an "Impasse") unless
(x) the Global Venture Board members shall have agreed in writing
that an Impasse may not be declared with respect to such matter or
(y) prior to such declaration the Parties shall have reached
agreement with respect to such matter. Following the declaration
of an Impasse pursuant to this Section 8.5(f), any Related Party
Group within twenty (20) days may dissolve such Impasse by
accepting the position of the other Related Party Group with
respect to such matter.
(g) If a Deadlock considered by the Global Venture
Board pursuant to Section 8.5(e) cannot be resolved by the Global
Venture Board within the period referred to in Section 8.5(e)(1)
or (3) and such Deadlock does not relate to a Special Deadlock
Matter, then such Deadlock shall be referred back (i) to the
Global Venture Committee if such Deadlock relates to an agenda
item originally considered by the Global Venture Committee, (ii)
to the Global Venture Office if such Deadlock relates to an agenda
item originally considered by the Global Venture Office, or (iii)
to the relevant Governing Board of the JV Entity if such Deadlock
relates to an agenda item originally considered by such Governing
Board.
(1) If, in the case of a Deadlock referred to in clause
(i) or (ii) above, the Global Venture Committee or Global
Venture Office, as applicable, is still unable to resolve
such Deadlock, no further action shall be taken at or
pursuant to such meeting with respect to the proposal giving
rise to such Deadlock, but such proposal may be presented at
a subsequent meeting of the Global Venture Committee or the
Global Venture Office and any resulting Deadlock shall be
resolved in accordance with this Section 8.5.
(2) If, in the case of a Deadlock described in clause
(iii) above, the Governing Board of the JV Entity is still
unable to resolve such Deadlock and such Deadlock does not
relate to a potential GBN Special Matter, NAFTA Plan Action
or ROE Plan Action, no further action shall be taken at or
pursuant to such meeting with respect to the proposal giving
rise to such Deadlock, but such proposal may be presented at
a subsequent meeting of the relevant Governing Board and any
resulting Deadlock shall be resolved in accordance with this
Section 8.5.
(3) If, in the case of a Deadlock described in clause
(iii) above, the Governing Board of the JV Entity is still
unable to resolve such Deadlock and such Deadlock relates to
a potential GBN Special Matter, NAFTA Plan Action or ROE Plan
Action, the GBN Proposing Party or the Related Party Group
whose voting representative requested that such Deadlock be
so resolved, as the case may be, may, subject to Section
8.5(k) and, in the event that the Sprint Parties have the
right to so declare, to approval in accordance with Section
15.38, within fifteen (15) days of the date on which such
Deadlock was referred back to the relevant Governing Board,
declare such potential GBN Special Matter, NAFTA Plan Action
or ROE Plan Action to be a GBN Special Matter, a NAFTA Plan
Action or an ROE Plan Action, as the case may be, and such
GBN Special Matter, NAFTA Plan Action or ROE Plan Action
shall be implemented pursuant to Section 8.1, 8.2 or 8.3,
respectively. If such voting representative does not make
such declaration within such period, such Deadlock shall be
resolved in accordance with clause (2) above; provided that
if such voting representative does not make such declaration,
and another voting representative on such Governing Board had
previously requested that such Deadlock be resolved as a
Special Deadlock Matter pursuant to Section 8.5(b)(i), such
Deadlock shall immediately and automatically be referred to
the Global Venture Board and considered by it as contemplated
in Sections 8.5(e) and (f), except that the first date after
which an Impasse may be declared shall be the Funding
Extension Deadline, unless the Funding Extension Commitment
with respect thereto shall have occurred or such Special
Deadlock Matter does not relate to a Funding Deadlock, in
which case, subject to Section 8.6, such date shall be three
hundred sixty (360) days after the date such Deadlock was
first referred to the Global Venture Committee.
(h) If, at the end of the applicable NAFTA Plan Period
or ROE Plan Period, Atlas (in the case of a NAFTA Plan Action) or
Sprint Sub (in the case of an ROE Plan Action) has not exercised
its (or caused the applicable JV Entity to exercise its) rights
pursuant to Section 8.2(d) (in the case of a NAFTA Plan Action) or
8.3(d) (in the case of an ROE Plan Action), the Governing Board of
the relevant ROW Entity or ROE Entity shall again consider the
NAFTA Plan Action or ROE Plan Action. If the Governing Board of
such ROW Entity or ROE Entity cannot resolve the Deadlock with
respect to such NAFTA Plan Action or ROE Plan Action within thirty
(30) days of the end of such NAFTA Plan Period or ROE Plan Period,
such Deadlock shall be automatically and immediately referred to
the Global Venture Committee. If such Deadlock cannot be resolved
by the Global Venture Committee within thirty (30) days of the
date of such referral to the Global Venture Committee, such
Deadlock shall be automatically and immediately referred to the
Global Venture Board for resolution. The Global Venture Board
shall have thirty (30) days (or such extended period as the Global
Venture Board members agree in writing is appropriate in any such
case) to consider and resolve such Deadlock. If such Deadlock
cannot be resolved by the Global Venture Board within thirty (30)
days (as extended) of the date of such referral to the Global
Venture Board, then either the Sprint Parties or the FT/DT Parties
within one hundred eighty (180) days of the end of such period may
declare an Impasse by written notice to the other Parties and the
Global Venture Board unless (x) the Global Venture Board members
shall have agreed in writing that an Impasse may not be declared
with respect to such matter or (y) prior to such declaration the
Parties shall have reached agreement with respect to such matter.
Following the declaration of an Impasse pursuant to this Section
8.5(h), if the Related Party Group which declared such Impasse
also implemented the NAFTA Plan Action or ROE Plan Action which
led to such Impasse, the other Related Party Group may, within
twenty (20) days, dissolve such Impasse by accepting the position
of the declaring Related Party Group with respect to such matter.
(i) If a Deadlock occurs at the Global Venture Board
with respect to any agenda item originally considered by the
Global Venture Board, such Deadlock will be reconsidered at one or
more subsequent meetings of the Global Venture Board. If the
Global Venture Board is unable to resolve such Deadlock within
three hundred sixty (360) days and such Deadlock does not relate
to a Special Deadlock Matter, no further action shall be taken at
or pursuant to such meeting with respect to the proposal giving
rise to such Deadlock, but such proposal may be presented at a
subsequent meeting of the Global Venture Board and any resulting
Deadlock shall be resolved in accordance with this Section 8.5.
If the Global Venture Board is unable to resolve such Deadlock
within such period and such Deadlock relates to a Special Deadlock
Matter, subject to Sections 8.5(j) and 8.6, either Related Party
Group, within one hundred eighty (180) days of the end of such
period, may, by written notice to the other Parties and the Global
Venture Board, declare an Impasse unless (x) the Global Venture
Board members shall have agreed in writing that an Impasse may not
be declared with respect to such matter or (y) prior to such
declaration the Parties shall have reached agreement with respect
to such matter. Following the declaration of an Impasse pursuant
to this Section 8.5(i), any Related Party Group within twenty (20)
days may dissolve such Impasse by accepting the position of the
other Related Party Group with respect to such matter.
(j) Notwithstanding Section 8.5(i), if a Deadlock
occurs at the Global Venture Board and such Deadlock relates to a
Special Deadlock Matter and:
(1) such Deadlock arose solely from the failure to
adopt the Global Venture Strategic Plan because of
a disagreement relating to a matter concerning a
NAFTA Country; or
(2) such Deadlock arose solely from the failure to
adopt the Global Venture Strategic Plan because of
a disagreement relating to a matter concerning the
ROE Territory,
then, as applicable, any representative of the Sprint Parties on
the ROW Board or any representative of the FT/DT Parties on the
ROE Board may within thirty (30) days of the date such Deadlock
first arose request that such Deadlock be resolved as a potential
NAFTA Plan Action or ROE Plan Action, in which event, such
Deadlock shall be referred to the Global Venture Committee and
resolved as provided in Sections 8.5(e), (f), (g) and (h) (with
such Deadlock being treated as though it originated at the
Governing Board of the relevant JV Entity).
(k) Notwithstanding anything to the contrary in this
Section 8.5, none of the Sprint Parties or the FT/DT Parties shall
have the right, or be required, to declare any Deadlock to be a
Special Deadlock Matter, GBN Special Matter, NAFTA Plan Action or
ROE Plan Action, as the case may be, while any Related Party Group
has the Tie Breaking Vote. If the representative of any Party on
any Governing Board fails to exercise its right under this Section
8.5 to declare a NAFTA Plan Action or an ROE Plan Action
(including in order to prevent resolution of a Deadlock as a
Special Deadlock Matter), no Party shall thereafter have the right
to declare any NAFTA Plan Action or ROE Plan Action until such
Special Deadlock Matter has been resolved.
Section 8.6. No Impasse Period. Notwithstanding anything
to the contrary in this Article 8, for a period of three years
commencing on the Closing Date, no failure of the Global Venture
Board to resolve any Deadlock relating to a Special Deadlock
Matter shall result in the right of any Party to declare an
Impasse unless such Special Deadlock Matter relates to a Funding
Deadlock. Nothing in this Section 8.6 shall prohibit any Party
from initiating any arbitration of a Dispute pursuant to Article
21 during such three-year period.
ARTICLE 9.
HOME COUNTRY ACTIVITIES
Section 9.1. General. Subject to the provisions of the
other Operative Agreements and Applicable Law, the JV Services
shall be provided to customers in the United States by Sprint and
its Subsidiaries and in France and Germany by FT, DT and their
respective Subsidiaries (other than Atlas and its Subsidiaries) as
described in Section 2.2(b).
Section 9.2. Conformity to Venture Policies. To the extent
not prohibited by Applicable Law, the Parties will conduct their
businesses related to the Joint Venture in their respective Home
Countries so as to conform with the Global Policies; provided that
no Related Party Group shall be required to conduct its business
to conform to any Global Policies which are initially established
by the Global Venture Board while the other Related Party Group
has the Tie-Breaking Vote, unless the Non-Tie Breaking Party
agreed to such Global Policies.
ARTICLE 10.
OTHER ACTIVITIES BY THE PARTIES
AND THE JOINT VENTURE
Section 10.1. In General. The Parties acknowledge that
to support their intention to make the Joint Venture the principal
embodiment and global reference point of the International
Telecommunications Services Business of the Parties and to protect
adequately their interests in the JV Entities, it is necessary and
essential that the Parties enter into and adhere to the covenants
contained in this Article 10.
Section 10.2. Non-Competition Obligations.
(a) Except as provided in Sections 8.2, 8.3, 10.3, 10.4,
10.6 and 10.7, from and after the Closing Date no Party or any of
its Affiliates shall:
(i) Offer Competing Services; or
(ii) Invest or Participate in any Person that Offers
Competing Services.
(b) (i) Except as required by Applicable Law, no senior
officer or member of the board of directors of a Sprint Party
shall serve as a senior officer or member of a board of directors,
managing board or similar governing body ("Governing Body") of a
Major Competitor of FT/DT; provided that no participation by a
member of the Governing Body of Sprint appointed by FT or DT in
the senior management or on the Governing Body of a Major
Competitor of FT/DT shall constitute a breach of this Section
10.2(b)(i) by the Sprint Parties; and
(ii) Except that a member of the Conseil
d'Administration of FT appointed as a member of such board (A) by
the Government of France (a "Government-Appointed Member") or
(B) by any union or employee group of FT (an "Employee-Appointed
Member") may participate in the senior management or on the
Governing Body of a Major Competitor of Sprint, no senior officer
or member of the Conseil d'Administration of FT or the Vorstand of
DT or any similar body (excluding, in the case of DT, its
Aufsichtsrat) of an FT/DT Party shall serve as a senior officer or
member of a Governing Body of a Major Competitor of Sprint. To
the extent permitted by Applicable Law, FT will adopt reasonable
procedures to ensure that no Government-Appointed Member or
Employee-Appointed Member who participates in the senior
management or on the Governing Body of a Major Competitor of
Sprint has access to sensitive information regarding the
activities of Sprint or the Joint Venture or otherwise is involved
in matters in which such Government-Appointed Member or Employee-
Appointed Member has a conflict of interest with respect to Sprint
or the Joint Venture. The implementation of such procedures, if
any, shall be accurately reflected in the minutes of the
deliberations of the Conseil d'Administration of FT.
(c) For the purposes of this Article 10, a "Section 10
Affiliate" of a Party shall mean any Person in which such Party
directly or indirectly has or acquires an equity interest
representing 20% or more (but not more than 50%) of the aggregate
voting power of such Person. Each Party shall cause each of its
Affiliates, other than its Section 10 Affiliates, to comply with
the obligations of such Affiliate under this Article 10. Except
as provided in Sections 8.2, 8.3, 10.3, 10.4 (other than Sections
10.4(b) and (c) and except that, for purposes of Section 10.4(f),
if the 1% threshold referred to in such Section is exceeded, the
relevant Party shall comply with the requirements of this Section
10.2(c) rather than the requirements of Section 10.4(c)(i) or
(ii)) and 10.6, if a Section 10 Affiliate of a Party (a) Offers
Competing Services or Competing LD Services or (b) Invests or
Participates in any Person that Offers Competing Services or
Competing LD Services, subject to the second to last sentence of
this Section 10.2(c), such Party shall, at the request of the
representatives of the other Parties on the Global Venture Board
(the "Unrelated Representatives") (subject, in the event that a
representative of the Sprint Parties is one of such Unrelated
Representatives, to approval of such request in accordance with
Section 15.38), use commercially reasonable efforts to (A) cause
such Section 10 Affiliate to transfer to the Joint Venture the
assets (and related liabilities) used to Offer the Competing
Services and the Competing LD Services (the "Competing Business")
or (B) if such Party is not permitted or does not have the ability
to cause the transfer of the Competing Business to the Joint
Venture, sell to the Joint Venture such Party's equity interest in
such Section 10 Affiliate, in each case at the Appraised Value.
If the Unrelated Representatives determine that the Joint Venture
should not acquire the Competing Business or such Party's equity
interest in such Section 10 Affiliate, such Party shall use
commercially reasonable efforts to (x) cause such Section 10
Affiliate to divest such Competing Business or (y) divest its
equity interest in such Section 10 Affiliate within a commercially
reasonable time; provided that if a Section 10 Affiliate of a
Party begins to Offer (1) Competing Services as a result of the
introduction of a new JV Service by a decision of the Global
Venture Board or a new service by a Regional Operating Group
through a NAFTA Plan Action or an ROE Plan Action or (2) Competing
LD Services as a result of a National Operation or a Public
Telephone Operator becoming an Affiliated National Operation or an
Affiliated Public Telephone Operator, and the Unrelated
Representatives elect not to cause such Section 10 Affiliate to
transfer to the Joint Venture the assets (and related liabilities)
used to Offer the Competing Services or Competing LD Services, or
such Section 10 Affiliate is not permitted or does not have the
ability to cause the transfer of such Competing Business to the
Joint Venture, then notwithstanding the foregoing, such Competing
Business shall be treated as an Excluded Business in accordance
with Section 10.4(d). For purposes of this Section 10.2(c), the
term "Affiliate," when used in the sections referred to in the
introductory clause of the third sentence of this Section 10.2(c),
shall mean an "Affiliate" as defined in Section 1.1 and a "Section
10 Affiliate."
Section 10.3. National Operations; Public Telephone
Operators.
(a) From and after the Closing Date no Party or any of
its Affiliates shall:
(i) Offer any national long distance services in
competition with an Affiliated National Operation
or an Affiliated Public Telephone Operator
("Competing LD Services"), provided that, subject
to Section 10.3(c), a Party or its Affiliates may
Invest or Participate in a Public Telephone
Operator Offering Competing LD Services;
(ii) Invest or Participate in any Person if such Person
Offers Competing LD Services, provided that,
subject to Section 10.3(c), a Party or its
Affiliates may Invest or Participate in a Public
Telephone Operator Offering Competing LD Services;
(iii) Invest or Participate in any National Operation if
such National Operation is allied with a Major
Competitor of the Joint Venture as determined in
accordance with criteria established by the Global
Venture Board; or
(iv) Except as provided in Section 10.3(b), Invest or
Participate in any National Operation or Public
Telephone Operator if a Competing Person is a
Material Participant in such National Operation or
Public Telephone Operator at the time of such
Investment or Participation.
Subject to the foregoing and Sections 10.3(c) and (d), from and
after the Closing Date, a Party and its Affiliates may Invest or
Participate in a National Operation or Public Telephone Operator
that at any time Offers Competing Services.
(b) Notwithstanding Section 10.3(a)(iv), if, after the
Closing Date, a Party or any of its Affiliates proposes to Invest
or Participate in a Public Telephone Operator and a Governmental
Authority having authority over the privatization or disposition
of securities of such Public Telephone Operator requires that a
Competing Person also participate in such Investment or
Participation, such Party or its Affiliates may Invest or
Participate in such Public Telephone Operator with the prior
written consent of each other Party, which consent each other
Party agrees will not be unreasonably withheld. If any such other
Party withholds its consent to such Investment or Participation,
such Party shall specify the basis for withholding consent in
reasonable detail so as to avoid similar issues or disputes with
respect to any subsequent proposed Investment or Participation.
(c) Except as prohibited by Section 10.3(a), if, after
the Closing Date, a Party or any of its Affiliates proposes to
Invest or Participate in any Public Telephone Operator by the
purchase from a Governmental Authority of any original ownership
interest therein, such Party may (subject, in the event that
Sprint or its Affiliate proposes to make such Investment or
Participation, to approval in accordance with Section 15.38), in
its sole and absolute discretion, allow the Joint Venture or any
one or more of the other Parties to participate in such Party's
Investment or Participation on terms and conditions satisfactory
to such Party. If such Party determines, in its sole and absolute
discretion, that neither the Joint Venture nor any other Party or
Parties will participate in such Party's Investment or
Participation in such Public Telephone Operator, subject to
Section 10.3(a), such Party or its Affiliates may Invest or
Participate in such Public Telephone Operator without any Invest-
ment or Participation by the Joint Venture or any other Party,
provided that, subject to Section 10.3(a), the Joint Venture and
each other Party or their respective Affiliates may also
separately Invest or Participate in such Public Telephone
Operator.
(d) Except as prohibited by Section 10.3(a), if, after
the Closing Date, a Party or any of its Affiliates proposes to
Invest or Participate in any National Operation, such Party shall
first offer the Joint Venture the opportunity to Invest or
Participate in such National Operation in accordance with such
procedures as may be established from time to time by the Global
Venture Board (the "First Offer Procedures"). If the Global
Venture Board rejects the first offer or fails to respond to the
first offer in accordance with the First Offer Procedures, subject
to Section 10.3(a), such Party or its Affiliates may (subject, in
the event that Sprint or its Affiliate proposes to make such
Investment or Participation, to approval in accordance with
Section 15.38) Invest or Participate in such National Operation,
so long as, in the case the Global Venture Board has rejected such
first offer, such Party's representative on the Global Venture
Board voted in favor of the Joint Venture Investing or
Participating in such National Operation.
(e) If, after the Closing Date, a Party or any of its
Affiliates Invests or Participates in a National Operation or a
Public Telephone Operator pursuant to this Section 10.3, such
Party or Affiliate, as the case may be, shall use commercially
reasonable efforts to cause such National Operation or Public
Telephone Operator to enter into an Affiliation Agreement with the
appropriate JV Entity, and such JV Entity shall negotiate in good
faith to enter into an Affiliation Agreement with such National
Operation or Public Telephone Operator in accordance with Section
16.8, unless the Global Venture Board, in its sole and absolute
discretion pursuant to Section 3.1(c)(x), shall have not approved
the entering into of such Affiliation Agreement with such Person.
(f) Subject to Section 3.1(c)(ix), a Regional Operating
Group may, pursuant to its own initiative or pursuant to a
proposal of a Party in accordance with Section 10.3(c) or (d),
Invest or Participate in a National Operation or Public Telephone
Operator within the territory of operation of such Regional
Operating Group. Any Person formed by a Regional Operating Group
to Invest or Participate in any such National Operation or Public
Telephone Operator shall be (i) formed, owned and managed as a
Wholly Owned Subsidiary of the Regional Operating Group having
responsibility for the territory in which such National Operation
or Public Telephone Operator exists, and (ii) subject to the
Operative Agreements. If the Global Venture Board approves such
an Investment or Participation in a National Operation or a Public
Telephone Operator pursuant to Section 3.1(c)(ix), the Parties
shall, as necessary, vote their Venture Interests, and cause their
representatives on the relevant Governing Board to vote, in favor
of such Investment or Participation.
Section 10.4. Non-Competition Exceptions. Except as
expressly set forth in this Section 10.4, nothing in this Article
10 shall be construed to prohibit any of the following activities
by a Party or any of its Affiliates after the Closing Date:
(a) Applicable Law. The compliance by a Party and its
Affiliates with Applicable Law, including any such Applicable Law
requiring that a Party or any of its Affiliates provide products,
services or facilities to or with any Person.
(b) New Investments. (i) The acquisition by a Party
(directly or indirectly through an Affiliate) of a Person (other
than a National Operation or Public Telephone Operator) or an
equity interest in such a Person through merger, consolidation,
purchase of stock or assets or otherwise, if the annual
consolidated gross revenues attributable to Competing Services and
Competing LD Services of such Person do not exceed 50% of the
annual consolidated gross revenues of such Person as set forth in
the most recently available audited financial statements of such
Person as of the date of execution of the definitive agreement
providing for such acquisition; provided that such Party (the
"Acquiring Party") shall, at the request of the Unrelated
Representatives (subject, in the event that a representative of
the Sprint Parties is one of such Unrelated Representatives, to
approval of such request in accordance with Section 15.38): (A)
use commercially reasonable efforts to cause such Person to
transfer to the Joint Venture the Competing Business, or (B) if
the Acquiring Party is not permitted or does not have the ability
to cause the transfer of the Competing Business to the Joint
Venture, sell to the Joint Venture the Acquiring Party's equity
interest in such Person, in each case at the Appraised Value. If
the Unrelated Representatives determine that the Joint Venture
should not acquire the Competing Business or the Acquiring Party's
equity interest in such Person, the Acquiring Party shall use
commercially reasonable efforts to (A) cause such Person to divest
such Competing Business or (B) divest its equity interest in such
Person within a commercially reasonable time.
(ii) Each Party and its Affiliates will use commercially
reasonable efforts when Investing or Participating in any Person
that it can reasonably foresee will Offer Competing Services or
Competing LD Services not to enter into any arrangements that
would prohibit such Party or its Affiliates from either causing
such Person to sell the Competing Business or divesting its equity
interest in any such Person.
(c) New Competitive Activity. The continued holding by
a Party (directly or indirectly through an Affiliate) of an equity
interest:
(i) in a Person which begins to Offer Competing Services
or Competing LD Services as a result of an expansion of the
activities of such Person; provided that such Party shall, at the
request of the Unrelated Representatives (subject, in the event
that a representative of the Sprint Parties is one of such
Unrelated Representatives, to approval of such request in
accordance with Section 15.38), use commercially reasonable
efforts to (A) cause such Person to transfer to the Joint Venture
the Competing Business, or (B) if such Party is not permitted or
does not have the ability to cause the transfer of the Competing
Business to the Joint Venture, sell to the Joint Venture such
Party's equity interest in such Person, in each case at the
Appraised Value. If the Unrelated Representatives determine that
the Joint Venture should not acquire the Competing Business or
such Party's equity interest in such Person, such Party shall use
commercially reasonable efforts to (A) cause such Person to divest
such Competing Business or (B) divest its equity interest in such
Person (subject to existing contractual restrictions on such
transfer) within a commercially reasonable time; or
(ii) in a Person which begins to Offer (x) Competing
Services as a result of the introduction of a new JV Service by a
decision of the Global Venture Board or a new service by a
Regional Operating Group through a NAFTA Plan Action or an ROE
Plan Action or (y) Competing LD Services as a result of a National
Operation or a Public Telephone Operator becoming an Affiliated
National Operation or an Affiliated Public Telephone Operator, as
the case may be; provided that the Unrelated Representatives
(subject, in the event that a representative of the Sprint Parties
is one of the Unrelated Representatives, to approval of such
decision in accordance with Section 15.38) may require such Party
to (A) cause such Person to transfer to the Joint Venture the
Competing Business, or (B) if such Party is not permitted or does
not have the ability to cause the transfer of the Competing
Business to the Joint Venture, transfer to the Joint Venture such
Party's equity interest in such Person, in each case at the
Appraised Value. If the Unrelated Representatives determine that
the Joint Venture should not acquire the Competing Business or
such Party's equity interest in such Person, such Competing
Business shall be treated as an Excluded Business in accordance
with Section 10.4(d).
(iii) Notwithstanding Sections 10.4(c)(i) and (ii), the
equity interest of a Party or its Affiliate in a Public Telephone
Operator that begins to Offer Competing Services or Competing LD
Services or a National Operation that begins to Offer Competing
Services shall not be subject to the restrictions contained in
Section 10.4(c)(i) or (ii); provided that the equity interest of a
Party or its Affiliate in a National Operation that begins to
Offer Competing LD Services shall be subject to such restrictions.
(iv) If a Party or its Affiliate is not legally
permitted to (A) cause such Person to transfer the Competing
Business or (B) divest its equity interest in such Person to the
Joint Venture or a third party, as applicable, pursuant to this
Section 10.4(c), such transfer will be postponed until such
transfer is possible.
(d) Excluded Businesses. Subject to Section 10.5, the
continued ownership by a Party (directly or indirectly through an
Affiliate) of its current ownership interest in any Excluded
Business and the conduct by such Party or its Affiliate of such
Excluded Business with any Person.
(e) Non-Exclusive Businesses. Subject to any
restrictions contained in any other Operative Agreement, the
conduct by a Party (directly or indirectly through an Affiliate)
of any Non-Exclusive Businesses.
(f) De Minimis Competing Services. Subject to
Sections 10.3(c) and (d), the Offer by any Affiliate of any Party
(other than a direct Subsidiary of such Party) of Competing
Services or Competing LD Services; provided that (i) such
Affiliate does not principally Offer Competing Services or
Competing LD Services, and (ii) the annual aggregate gross
revenues of such Affiliate attributable to such services do not
exceed 1% of the annual consolidated gross revenues of the
Regional Operating Group in the territory in which such services
are Offered. If the foregoing 1% threshold is exceeded, the
relevant Party will comply with the requirements of Section
10.4(c)(i) or (ii), as applicable.
(g) Bilateral Arrangements and Facilities. Any and all
activities of a Party or any Affiliate of a Party relating to
bilateral correspondent relationships and bilateral facilities, to
the extent not inconsistent with the Route Management Agreement.
(h) Five Percent Investments. The acquisition or
ownership by a Party (directly or indirectly through an Affiliate)
of any securities of a Publicly Held Person (other than a National
Operation or a Public Telephone Operator), if such securities (i)
were not acquired directly from such Person in a private placement
or similar transaction, (ii) do not represent more than 5% of the
aggregate voting power of the outstanding equity securities of
such Person (assuming the conversion, exercise or exchange of all
such securities held by such Party or its Affiliate that are
convertible, exercisable or exchangeable into or for voting
securities), and (iii) in the case of debt securities, entitle the
holder thereof to receive only interest or other returns that are
not based on the value or results of operations of such Person;
provided that a Competing Person shall not be a Material
Participant in such Publicly Held Person at the time such
investment was made.
(i) Investment Funds. The acquisition or ownership
(directly or indirectly through an Affiliate) by a Party of an
ownership interest in an investment fund or plan (including
pension and retirement plans) investing on behalf of the employees
or retirees of such Party or its Affiliates or the continued
sponsorship by such Party (or Affiliate) thereof; provided that no
investment by any such fund or plan has the purpose or effect of
changing or influencing the Control of any Person that Offers
Competing Services or Competing LD Services.
(j) Businesses to be Transferred to the Joint Venture.
The continued ownership by a Party (directly or indirectly through
an Affiliate) of its current ownership interest in any Transferred
Assets to be transferred to the Joint Venture pursuant to the
Transfer Agreements after the Closing Date and the conduct by such
Party or its Affiliate of the business related to such Transferred
Assets.
(k) Franco-German Traffic. Any and all activities of
FT, DT or any of their Subsidiaries related to the provision of
services within the scope of International Telecommunication
Services Business to the extent such traffic is between France and
Germany.
(l) Distribution of JV Services. The Offer by any
Party of the JV Services in its Home Country pursuant to the
Operative Agreements.
(m) Principal Products. Subject to any restrictions
contained in any other Operative Agreement, the Offer by any Party
(directly or indirectly through an Affiliate) of "Principal
Products" as described in the Operating Entities Services
Agreement.
(n) Spun-Off Entity. The continued ownership by a
Party, directly or indirectly, of its ownership interest in any
Spun-Off Entity, unless such Spun-Off Entity is a Controlled
Affiliate of such Party.
(o) Eunetcom. Any and all activities of Eunetcom to
the extent related to the performance by Eunetcom of its customer
Contracts in existence on the Closing Date. The FT/DT Parties
have identified on Schedule 10.4(o) hereto all customer Contracts
of Eunetcom in existence on the date hereof. The FT/DT Parties
shall deliver to the Sprint Parties on the Closing Date a list of
all customer Contracts of Eunetcom in existence on the Closing
Date.
(p) Sprint's Businesses in France and Germany. The
Master Transfer Agreement Term Sheet provides, among other things,
that the Parties have not determined whether the businesses of
Sprint International, Inc. and its Affiliates located in France
and Germany will be contributed to the Joint Venture. The Parties
agree that, if such businesses are not contributed to the Joint
Venture on the Closing Date, nothing in Article 10 of this
Agreement shall be construed to prohibit for a period of twelve
(12) months following the Closing Date (i) the continued ownership
by Sprint and its Affiliates of such businesses, (ii) any
activities of Sprint and its Affiliates in connection with the
performance of the contracts of such businesses existing on the
Closing Date, or (iii) any activities of Sprint and its Affiliates
in connection with the orderly sale, divestiture or wind down of
such businesses. Sprint agrees that if such businesses are not
contributed to the Joint Venture on the Closing Date (1) such
businesses will conduct only the activities specified in the
preceding sentence during the twelve (12) month period following
the Closing Date, and (2) Sprint will sell, divest or wind down
such businesses within such period (subject, in the event that any
such sale or divestiture is made to FT, DT, Atlas or any of their
respective Affiliates, to approval of such sale or divestiture in
accordance with Section 15.38).
(q) Alliance Between Sprint and Telmex. Between the
date hereof and the date that is six (6) months after the Closing
Date, the Parties will enter into negotiations with Telefonos de
Mexico ("Telmex") with the intention that the Joint Venture and
Telmex enter into an Affiliation Agreement with respect to the
Venture Business in Mexico. If the Joint Venture and Telmex enter
into such an Affiliation Agreement, those aspects of the strategic
alliance between Sprint and Telmex as described in the letter,
dated April 18, 1995, between Sprint and Telmex (the "Telmex
Alliance"), as appropriate, will be transferred (subject to
approval of such transfer in accordance with Section 15.38) to the
Joint Venture. If the Joint Venture and Telmex do not enter into
such an Affiliation Agreement on or before the Closing Date, any
activities of Sprint and its Affiliates in connection with the
Telmex Alliance will be treated as an Excluded Business until the
date on which such an Affiliation Agreement is entered into;
provided, however, that if the Joint Venture and Telmex do not
enter into such an Affiliation Agreement within six (6) months
after the Closing Date, within twelve (12) months after the end of
such six (6) month period, Sprint will terminate any of the
activities of Sprint or its Affiliates in connection with the
Telmex Alliance that compete with the Joint Venture or terminate
its involvement in the Telmex Alliance, unless prior to the end of
such twelve (12) month period the Joint Venture and Telmex enter
into such an Affiliation Agreement.
Section 10.5. Review of Excluded Businesses.
(a) As soon as practicable after the date hereof, but
no later than the Closing Date, the Parties shall negotiate in
good faith to agree upon the scope of the Excluded Businesses (the
"Approved Scope"). After the Closing Date, the Global Venture
Board shall review each year the Excluded Businesses to determine
whether any further action should be taken with respect thereto.
(b) If any Party reasonably believes that the Excluded
Business of another Party (the "Affected Party") Offers Competing
Services or Competing LD Services after the Closing Date in a
manner that materially exceeds the Approved Scope of such Excluded
Business (such activity and related liabilities, the "Excess Ac-
tivity"), such Party may bring the matter to the Global Venture
Board during such annual review. If the Unrelated Representatives
reasonably determine that any Excess Activity has occurred during
the prior year, and that such Excess Activity should be sold to
the Joint Venture, the Affected Party shall use commercially
reasonable efforts (A) to transfer to the Joint Venture the Excess
Activity, or (B) if such Party is not permitted or does not have
the ability to cause the transfer of such Excess Activity, to sell
to the Joint Venture the Affected Party's equity interest in the
Excluded Business, in each case at the Appraised Value. If the
Unrelated Representatives are unable to agree within a reasonable
time as to whether any Excess Activity has occurred or upon any
measures relating to the Excess Activity, the Affected Party
owning the Excluded Business may continue to conduct the Excess
Activity. If the Unrelated Representatives determine that
measures other than those described in clauses (A) and (B) above
are appropriate and if the Affected Party disagrees with such
measures, the Affected Party shall use commercially reasonable
efforts to divest such Excess Activity within a commercially
reasonable time. If the Affected Party is not legally permitted
to transfer the assets and liabilities relating to such Excess
Activity or its equity interest in such Excluded Business to the
Joint Venture or a third party, as applicable, such transfer will
be postponed until such transfer is possible.
Section 10.6. Passive Sales; Customer Preferences, Etc.
(a) Nothing in this Article 10 or any provision of any
other Operative Agreement shall be deemed to prohibit "passive
sales," in which any Party or JV Entity or any Affiliate of such
Party or JV Entity, pursuant to an unsolicited request from a
customer, contracts directly with such customer, regardless of
such customer's location, for the provision to such customer
through the Joint Venture of services included within the scope of
the Venture Business to the extent required by Applicable Law.
(b) If a Party or any of its Affiliates receives an
unsolicited request from a customer of a Party or any of its
Affiliates or of the Joint Venture to enter into a Contract to
provide to such customer in conjunction with other Persons a
service that is then currently Offered by the Joint Venture, such
Party or its Affiliates will use commercially reasonable efforts
to persuade such customer to purchase such service from the Joint
Venture. If despite such Party's efforts, the customer prefers
not to purchase such service from the Joint Venture, such Party
will refer such matter to the Global Venture Office which, within
ten (10) Business Days, will present its observations regarding
such matter to one of the representatives of such Party on the
Global Venture Committee for final resolution by such
representative. Notwithstanding the foregoing, the Parties agree
that the customer's preference will be honored in all cases.
(c) If a Party or any of its Affiliates receives an
unsolicited request from a customer of a Party or any of its
Affiliates or of the Joint Venture to enter into a Contract to
provide to such customer a service within the scope of the Venture
Business that is not then currently being provided by the Joint
Venture, such Party or its Affiliate shall first offer to the
Joint Venture the opportunity to enter into such Contract in
accordance with the First Offer Procedures. If the Global Venture
Board rejects the first offer or fails to respond to the first
offer in accordance with the First Offer Procedures, such Party or
its Affiliate may enter into such Contract, so long as, in the
case the Global Venture Board rejected such first offer, such
Party's representative on the Global Venture Board voted in favor
of the Joint Venture entering into such Contract. Notwithstanding
the foregoing, the Parties agree that the customer's preference
will be honored in all cases.
Section 10.7. Home Country Activities. Each Party will
(subject, in the case of a Home Country Opportunity of Sprint or
its Subsidiaries, to approval in accordance with Section 15.38)
seek to provide opportunities to the other Parties to Invest or
Participate with such Party or any of its Affiliates (excluding
Section 10 Affiliates) in Home Country Opportunities in which such
Party or Affiliate proposes to Invest or Participate after the
Closing Date; provided, however, that no Party or any of its
Affiliates shall have any obligation to provide or to seek to
provide a Home Country Opportunity to the other Parties if such
Party concludes, in its sole and absolute discretion, that
providing, or seeking to provide, such Home Country Opportunity to
the other Parties (i) would not be permitted by Applicable Law,
(ii) would materially delay, interfere with or jeopardize the
consummation of such transaction, or (iii) would not be in the
best interests of such Party or its Affiliate. No Party or any of
its Affiliates shall have any liability under this Agreement or
any other Operative Agreement as a result of a failure to provide
or to seek to provide a Home Country Opportunity to the other
Parties.
ARTICLE 11.
CONTRIBUTIONS TO JV ENTITIES; ASSUMED LIABILITIES
Section 11.1. Initial Capital Contributions; Assumed
Liabilities.
(a) The Parties have identified on Schedule 11.1(a)
certain businesses and other assets to be contributed by the
Sprint Parties, on the one hand, and the FT/DT Parties, on the
other, to the Joint Venture on the Closing Date. The Master
Transfer Agreement shall specify in reasonable detail the assets
(tangible and intangible), contract rights and personnel
comprising such businesses and other assets and shall identify
such businesses and assets as (i) Sprint GBN Assets, Sprint ROW
Assets and Sprint ROE Assets, (ii) FT GBN Assets, FT ROW Assets
and FT ROE Assets, and (iii) DT GBN Assets, DT ROW Assets and DT
ROE Assets.
(b) At Closing, upon the terms and subject to the
conditions set forth herein, in the Master Transfer Agreement and
the other Operative Agreements,
(i) Sprint and Sprint Sub shall, and shall cause their
Affiliates to, transfer (A) the Sprint GBN Assets to the
relevant JV Entities within the GBN Group, (B) the
Sprint ROW Assets to the relevant JV Entities within the
ROW Group and (C) the Sprint ROE Assets to the relevant
JV Entities within the ROE Group; and Sprint and Sprint
Sub shall, and shall cause their Affiliates to, enter
into the other Operative Agreements to which they are
parties;
(ii) FT shall, and shall cause its Affiliates to, transfer
(A) the FT GBN Assets to the relevant JV Entities within
the GBN Group, (B) the FT ROW Assets to the relevant JV
Entities within the ROW Group and (C) the FT ROE Assets
to the relevant JV Entities within the ROE Group; and FT
shall, and shall cause its Affiliates to, enter into the
other Operative Agreements to which they are parties;
and
(iii) DT shall, and shall cause its Affiliates to, transfer
(A) the DT GBN Assets to the relevant JV Entities within
the GBN Group, (B) the DT ROW Assets to the relevant JV
Entities within the ROW Group and (C) the DT ROE Assets
to the relevant JV Entities within the ROE Group; and DT
shall, and shall cause its Affiliates to, enter into the
other Operative Agreements to which they are parties.
(c) At Closing, upon the terms and subject to the
conditions set forth herein, in the Master Transfer Agreement and
the other Operative Agreements, FT, DT and Sprint and their
respective Affiliates shall transfer to the relevant JV Entities,
and such JV Entities shall assume, the FT International
Liabilities, the DT International Liabilities and the Sprint
International Liabilities.
(d) The Parties agree that, upon the terms and subject
to the conditions set forth herein, in the Master Transfer
Agreement and the other Operative Agreements, either (i) all
ownership rights in the applicable businesses and other assets
referred to in Section 11.1(a) shall be transferred to the
relevant JV Entity on the Closing Date, or (ii) the benefit of use
of the applicable businesses and other assets will be made
available to the relevant JV Entity through license, lease or
otherwise for the entire term of the Joint Venture.
Section 11.2. Contributions of Venture Interests to Sprint
Sub and Atlas.
(a) Unless otherwise agreed by the Parties, Sprint
covenants that at Closing, it will, and it will cause its
Affiliates to, transfer any and all Venture Interests received by
it or its Affiliates pursuant to the Transfer Agreements to Sprint
Sub.
(b) Unless otherwise agreed by the Parties, each of FT
and DT covenants that at Closing, it will, and it will cause its
Affiliates to, transfer any and all Venture Interests received by
it or its Affiliates pursuant to the Transfer Agreements to Atlas.
Section 11.3. Additional Capital of the Venture.
(a) Except as provided in Section 8.1 with respect to
GBN Special Matters, Section 8.2 with respect to NAFTA Plan
Actions and Section 8.3 with respect to ROE Plan Actions, the
Governing Board of any JV Entity may require each of its JV Entity
Shareholders (and each JV Entity Shareholder agrees) to make
additional capital contributions ("Additional Capital
Contributions") to such JV Entity in such amounts and at such
times as shall be set forth in the relevant Business Plan (each
such requirement, a "Capital Call").
(b) If the Governing Board of a JV Entity determines to
make a Capital Call, the Governing Board shall send to each JV
Entity Shareholder and each Party a Capital Call notice ("Capital
Call Notice"), which shall set forth, among other things, the
amount of Additional Capital Contributions to be made by each of
the JV Entity Shareholders and the period (the "Capital Call
Period") within which such Additional Capital Contributions shall
be made which shall not end less than ten (10) days from the date
on which such Capital Call Notice is given. Upon receipt of
Additional Capital Contributions from all JV Entity Shareholders
in accordance with the Capital Call Notice pursuant to this
Section 11.3(b), the JV Entity shall issue to each JV Entity
Shareholder such number of nonvoting equity interests as shall be
determined in accordance with the Funding Principles.
Section 11.4. Failure to Make Additional Capital
Contributions.
(a) Following the expiration of a Capital Call Period,
the JV Entity shall promptly notify each of its JV Entity
Shareholders of the failure by any JV Entity Shareholder (a
"Defaulting Shareholder") to make its respective Additional
Capital Contribution pursuant to the Capital Call Notice (such
failure to make an Additional Capital Contribution is referred to
herein as a "Funding Breach"). The Defaulting Shareholder shall
have thirty (30) days (the "First Cure Period") from the date of
notice of the Funding Breach to cure such Funding Breach by
delivering to the JV Entity the Additional Capital Contribution
required under the Capital Call Notice together with interest
thereon calculated at the Applicable LIBOR Rate plus 10 percentage
points per annum from the date of the Funding Breach to the date
of payment.
(b) If a Defaulting Shareholder shall fail to deliver
its Additional Capital Contribution together with interest thereon
as provided in Section 11.4(a) within the First Cure Period, then
a funding default (a "Funding Default") shall have occurred and
all rights of the Defaulting Shareholder to receive additional
equity interests in the JV Entity pursuant to such Capital Call
shall cease and, for a period of ninety (90) days after the
occurrence of the Funding Default, the non-defaulting shareholder
(the "Non-Defaulting Shareholder") shall have the option to
provide (subject, in the event that Sprint or its Affiliate is the
Non-Defaulting Shareholder, to approval of the exercise of such
right in accordance with Section 15.38) all or any part of the
Defaulting Shareholder's Additional Capital Contribution to the JV
Entity without payment of any penalty interest. If a Sprint Party
commits a Funding Breach and such Funding Breach becomes a Funding
Default as a result of a failure by the Defaulting Shareholder to
cure such Funding Breach within the First Cure Period, the FT/DT
Parties shall have the Tie-Breaking Vote as described in Section
18.1. If an FT/DT Party commits a Funding Breach and such Funding
Breach becomes a Funding Default as a result of a failure by the
Defaulting Shareholder to cure such Funding Breach within the
First Cure Period, the Sprint Parties shall have the Tie-Breaking
Vote as described in Section 18.1.
(c) At any time after the expiration of the First Cure
Period and within one year (the "Second Cure Period") from the
expiration of the Capital Call Period, the Defaulting Shareholder
whose failure to cure a Funding Breach within the First Cure
Period has caused a Funding Default shall have the right to cure
the Funding Default in accordance with this Section 11.4(c). If
the Defaulting Shareholder provides notice of its intent to cure
the Funding Default, then promptly following the receipt of such
notice by the JV Entity, the Per Share JV Entity Value of the
outstanding Venture Interests in such JV Entity shall be
determined in accordance with the Funding Principles. The
Defaulting Shareholder may cure the Funding Default at any time on
or prior to the expiration of the Second Cure Period by paying, in
accordance with the Funding Principles, an amount equal to the
greater of (A) the Defaulting Shareholder's Additional Capital
Contribution that was not made by the Defaulting Shareholder
(together with interest thereon from the date of the Funding
Breach to the date of payment calculated at the Applicable LIBOR
Rate plus 10 percentage points per annum) and (B) the Per Share JV
Entity Value of the equity interests of such JV Entity which would
be issued by such JV Entity in respect of the Defaulting
Shareholder's Additional Capital Contribution that was not made by
the Defaulting Shareholder. Such amount shall be paid to the JV
Entity or the Non-Defaulting Shareholder as provided in the
Funding Principles. If the Defaulting Shareholder cures the
Funding Default within the Second Cure Period, the right of the
Non-Defaulting Shareholder to the Tie-Breaking Vote shall be
terminated and the Tie-Breaking Vote will be dissolved. If the
Defaulting Shareholder fails to cure the Funding Default within
the Second Cure Period, then the Non-Defaulting Shareholder shall
continue to hold, subject to Section 20.11(a), the Tie-Breaking
Vote and shall have the right to deliver a Termination Notice
pursuant to Section 20.4.
(d) The JV Entity shall issue to the JV Entity
Shareholders such number of nonvoting equity interests in the JV
Entity in respect of Additional Capital Contributions as shall be
determined in accordance with the Funding Principles. To the
extent that the issuance of such equity interests results in any
adjustment of the Percentage Interests of the JV Entity
Shareholders in the JV Entity, no such adjustment of the
Percentage Interests shall affect the governance rights of the JV
Entity Shareholders under this Agreement or the related
Shareholders Agreement.
(e) The provisions of this Section 11.4 shall not apply
to the funding of GBN Special Matter Projects, NAFTA Plan Action
Projects and ROE Plan Action Projects described in Sections 8.1,
8.2 and 8.3, respectively.
(f) No JV Entity Shareholder shall be obligated to make
additional capital contributions to the JV Entity of which it is a
shareholder other than in such amounts and at such times as shall
be set forth in the relevant Business Plan, provided that to the
extent all of the JV Entity Shareholders of a JV Entity agree to
make any such contributions, such contributions shall be treated
as Additional Capital Contributions and governed by the provisions
therefor contained in Sections 11.3 and 11.4.
(g) Notwithstanding the foregoing, if FT or DT or any
Wholly Owned Subsidiary of FT or DT commits a Funding Breach or
Funding Default, FT (in the case of a Funding Breach or Funding
Default by DT or any Wholly Owned Subsidiary of DT) and DT (in the
case of a Funding Breach or Funding Default by FT or any Wholly
Owned Subsidiary of FT) shall have the right to cure such Funding
Breach or Funding Default at any time prior to the end of the
Second Cure Period by delivering to the relevant JV Entity the
Additional Capital Contribution required under the Capital Call
Notice together with interest thereon calculated at the Applicable
LIBOR Rate plus 10 percentage points per annum from the date of
the Funding Breach or Funding Default to the date of payment. Any
such cure of such a Funding Breach or Funding Default by FT or DT
pursuant to this Section 11.4(g) shall have the same effect for
all purposes of this Agreement as a cure of such Funding Breach or
Funding Default by the Defaulting Shareholder prior to the end of
the Second Cure Period.
ARTICLE 12.
CLOSING
Section 12.1. Closing.
(a) The Closing shall take place at the offices of
Debevoise & Plimpton, 875 Third Avenue, New York, New York on the
twentieth (20th) Business Day after the date all of the conditions
set forth in Article 13 have been fulfilled or waived (except for
such conditions to be fulfilled concurrently with the Closing,
which shall be either fulfilled concurrently with the Closing or
waived), or at such other date and time as the Parties shall agree
in writing. At the Closing, upon the terms and subject to the
conditions set forth herein, each Party will and will cause its
Affiliates to take the actions described in Article 13 and this
Section 12.1 and execute and deliver such other instruments and
take all such other reasonable actions as are necessary to
consummate the Transactions contemplated by Section 12.1(b) to be
consummated by it and its Affiliates at the Closing.
(b) At the Closing, upon the terms and subject to the
conditions set forth herein, each of the Parties shall, and shall
cause its Affiliates and, insofar as within its power, each of the
JV Entities to, enter into each of the Operative Agreements which
has not been entered into prior to the Closing Date to which such
Party, its Affiliates or such JV Entity, as the case may be, are
parties, including the following Operative Agreements:
(i) Atlas/ROE Services Agreement;
(ii) Intellectual Property Agreements;
(iii) Joint Venture Confidentiality Agreement;
(iv) Services Agreements;
(v) Shareholders Agreements;
(vi) Tax Matters Agreement; and
(vii) Transfer Agreements.
Section 12.2. Termination Prior to Closing. This Agreement
may be terminated at any time prior to Closing:
(a) by any Party if it has become impossible to satisfy
any condition precedent to such Party's obligations under this
Agreement or any other Operative Agreement, provided that if such
condition precedent has become impossible to satisfy as a result
of the failure of such Party or any of its Affiliates to perform
its obligations under this Agreement or any other Operative
Agreement, then such Party may not exercise such right;
(b) by consent in writing of all of the Parties;
(c) by any Party if Closing would violate any final
order, decree or judgment of any Governmental Authority having
competent jurisdiction;
(d) by FT or DT if any Sprint Party shall have failed
to perform or comply in any material respect with any agreement or
covenant contained herein which is required to be performed or
complied with on or before Closing after having been provided
written notice of, and a reasonable opportunity to cure, such
failure;
(e) by Sprint or Sprint Sub if any FT/DT Party shall
have failed to perform or comply in any material respect with any
agreement or covenant contained herein which is required to be
performed or complied with on or before Closing after having been
provided written notice of, and a reasonable opportunity to cure,
such failure;
(f) by the Sprint Parties upon written notice to the
FT/DT Parties that it is exercising its right to terminate this
Agreement pursuant to Section 15.36 hereof;
(g) by any Party if the Investment Agreement shall not
have been executed on or prior to July 31, 1995; and
(h) by any Party if the Investment Agreement shall have
been terminated in accordance with the terms thereof.
If this Agreement is terminated pursuant to this Section 12.2,
this Agreement shall forthwith cease to have effect between and
among the Parties and all further obligations of the Parties shall
terminate without further liability, except that (i) such
termination shall not constitute a waiver of any rights any Party
may have by reason of a breach of this Agreement, (ii) all
representations and warranties contained in this Agreement shall
survive for a period of one year following such termination, the
covenants and agreements contained in Sections 15.1, 15.2, 15.3,
15.4, 15.5, 15.6 and 15.12 shall survive for a period of one year
following such termination, and the other covenants and agreements
contained herein shall survive such termination without limitation
as to time, except as may be otherwise specified herein and
subject to Applicable Law (including any applicable statute of
limitations), and (iii) Sections 1.3 and 15.9 and Articles 21 and
23 shall continue in full force and effect. The survival of the
representations, warranties, covenants and agreements for a
specified period as provided above shall mean that no Party may
bring a claim for breach of any such representation, warranty,
covenant or agreement after such period. It is understood that,
except as expressly provided in this Section 12.2, all
representations, warranties, covenants and agreements contained
herein shall be of no further force and effect after the
termination of this Agreement pursuant to this Section 12.2.
ARTICLE 13.
CONDITIONS TO CLOSING
Section 13.1. Conditions to Each Party's Obligations. The
obligations of each of the Parties and their respective Affiliates
to make their respective initial contributions described in
Section 11.1 and the obligations of the Parties and their
Affiliates to enter into the other Operative Agreements to which
they are Parties and otherwise to consummate the Transactions to
be consummated by them at Closing are subject to the fulfillment
to the satisfaction of each of the Parties, as of the Closing
Date, of the following conditions:
(a) Governmental Approvals.
(i) All notifications required pursuant to the HSR Act to
carry out the Transactions shall have been made, and the
applicable waiting period and any extensions thereof
shall have expired or been terminated without the
imposition of any Burdensome Condition;
(ii) (A) The Commission of the European Communities, pursuant
to Article 85(3) of the Treaty of Rome, shall have
granted an exemption which exempts this Agreement and
each other Operative Agreement and the Transactions from
the operation of Article 85(1) of the Treaty of Rome,
without the imposition of any Burdensome Condition, or
(B) each Party shall have determined, in its individual
and sole discretion, that it is satisfied that such
exemption will be granted in a reasonable time and
without the imposition of a Burdensome Condition.
(iii) FT shall have received the approvals of the French
minister in charge of economic affairs and finance
(ministre charge de l'economie et des finances) and the
French minister in charge of posts and
telecommunications (ministre charge des postes et des
telecommunications) to carry out the Transactions,
without the imposition of a Burdensome Condition.
(iv) Either (A) DT shall have received the approval of the
Bundeskartellamt to carry out the Transactions, without
the imposition of a Burdensome Condition, or (B) the
exemption referred to in clause (ii)(A) of this Section
13.1(a) shall have been obtained.
(v) (A) An effective written order or other final action
from the FCC (either in the first instance or upon
review or reconsideration) affirming that (x) the
Transactions do not result in a transfer of control
within the meaning of Section 310(d) of the
Communications Act; (y) a level of foreign
ownership in Sprint of up to 28% is not
inconsistent with the public interest; and (z) the
Transactions are not otherwise inconsistent with
the public interest, or an effective written order
or other final action by the FCC (either in the
first instance or upon review or reconsideration)
to the effect that no such approval is required; or
(B) an effective written order from, or other final
action taken by, the FCC pursuant to delegated
authority (either in the first instance or upon
review or reconsideration) affirming that (x) the
Transactions do not result in a transfer of control
within the meaning of Section 310(d) of the
Communications Act; (y) a level of foreign
ownership in Sprint of up to 28% is not
inconsistent with the public interest; and (z) the
Transactions are not otherwise inconsistent with
the public interest, or an effective written order
from, or other final action taken by, the FCC
pursuant to delegated authority (either in the
first instance or upon review or reconsideration)
to the effect that no such approval is required,
which order or final action shall no longer be
subject to further administrative review;
shall have been obtained, and shall not have been
revoked or stayed as of the Closing Date, and such order
or final action shall not impose any Burdensome
Condition, provided that any Party may waive the
requirement that any such order or final action contain
the provision described in clause (y) of subsection (A)
or (B) above and such waiver shall be binding upon all
Parties. For purposes of this Section 13.1(a)(v), an
order from, or other final action taken by, the FCC
pursuant to delegated authority shall be deemed no
longer subject to further administrative review:
(x) if no petition for reconsideration or application
for review by the FCC of such order or final action
has been filed within thirty (30) days after the
date of public notice of such order or final
action, as such 30-day period is computed and as
such date is defined in Sections 1.104 and 1.4 (or
any successor provisions), as applicable, of the
FCC's rules, and the FCC has not initiated review
of such order or final action on its own motion
within forty (40) days after the date of public
notice of the order or final action, as such 40-day
period is computed and as such date is defined in
Sections 1.117 and 1.4 (or any successor
provisions) of the FCC's rules; or
(y) if any such petition for reconsideration or
application for review has been filed, or if the
FCC has initiated review of such order or final
action on its own motion, the FCC has issued an
effective written order or taken final action to
the effect set forth in subsection (A) above.
(vi) (A) The Commission of the European Communities (the
"EU"), pursuant to Article 85(3) of the Treaty of Rome,
shall have granted an exemption which exempts the Atlas
Joint Venture Documents and the Atlas Transactions from
the operation of Article 85(1) of the Treaty of Rome
without the imposition of any Burdensome Condition, or
(B) each Party shall have determined, in its individual
and sole discretion, that it is satisfied that such
exemption will be granted in a reasonable time without
the imposition of a Burdensome Condition.
(vii) All other Governmental Approvals required to be obtained
to consummate the Transactions shall have been obtained,
and all applicable pre-consummation waiting periods
shall have expired, except for Governmental Approvals
and waiting periods the failure of which to obtain or
satisfy would not, individually or in the aggregate, be
reasonably likely to impose a Burdensome Condition on
any Party or materially and adversely affect the ability
of any Party to perform its obligations hereunder or
under the other Operative Agreements.
(viii) The other Governmental Approvals set forth on Schedule
13.1(a)(viii) which are necessary to the formation of
Atlas shall have been received, without the imposition
of a Burdensome Condition.
(ix) No order of any Governmental Authority or Injunction
restraining or preventing the consummation of the Atlas
Transactions or putting in doubt the validity of any of
the Atlas Joint Venture Documents in any material
respect shall be in effect.
(x) No action shall have been taken by any Governmental
Authority to rescind or withdraw any of the Governmental
Approvals described or referred to in this Section 13.1,
or to rescind the termination of the review and
investigation of the Transactions under Exon-Florio, and
no action shall have been taken to modify any such
Governmental Approvals or any determination with respect
to the investigation under Exon-Florio in a manner that
would impose a Burdensome Condition.
(b) No Injunctions. No order of any Governmental
Authority (including a court order) shall have been entered that
enjoins, restrains or prohibits the consummation of the
Transactions or puts in doubt the validity of this Agreement, any
Intellectual Property Agreement, the Global Backbone Network
Services Agreement, the Operating Entities Services Agreement, the
Route Management Agreement, any Shareholders Agreement, the Tax
Matters Agreement or the Master Transfer Agreement in any material
respect.
(c) Investment Agreement Closing. The conditions to
the "First Closing" as such term is defined in the Investment
Agreement shall have been fulfilled or validly waived and the
First Closing shall have occurred simultaneously with the Closing.
(d) Operative Documents. The Operative Agreements
listed in Section 12.1(b) shall be in form and substance
satisfactory to each Party and shall have been executed and
delivered and the Constituent Documents shall be in form and
substance satisfactory to each Party and shall have become
effective.
(e) Business Plans. The Closing Business Plans for the
Regional Operating Groups shall be in form and substance
satisfactory to each Party.
Section 13.2. Conditions to the Obligations of Sprint and
Sprint Sub. The obligations of each of Sprint, Sprint Sub and
their Affiliates to make their initial contributions to the JV
Entities pursuant to Section 11.1 and the obligations of each of
Sprint, Sprint Sub and their Affiliates to enter into the other
Operative Agreements to which it is a party and to otherwise
consummate the Transactions that are to be consummated by them at
Closing are subject to the fulfillment to the satisfaction of
Sprint and Sprint Sub, as of the Closing Date, of the following
additional conditions:
(a) Accuracy of Representations and Warranties. The
representations and warranties made by FT, DT and Atlas and their
respective Affiliates in each Operative Agreement to which they
are a party or made in writing pursuant thereto shall be true and
correct in all material respects as of the date they were made and
as of the Closing Date, as if made on and as of the Closing Date,
except for representations and warranties that relate solely to a
date prior to the Closing Date.
(b) Performance of Obligations. FT, DT, Atlas and
their Affiliates shall have performed or complied in all material
respects with their respective covenants and agreements contained
in the Operative Agreements required to be performed or complied
with by FT, DT, Atlas and their Affiliates on or prior to the
Closing Date.
(c) Delivery of Certificates of FT, DT and Atlas. Each
of FT, DT and Atlas shall have delivered to each of Sprint and
Sprint Sub customary closing certificates and documents, in each
case signed by an officer or officers with the authority to bind
such Party (in each case dated as of the Closing Date), and such
other certificates or documents as Sprint, Sprint Sub or their
counsel may reasonably request evidencing the satisfaction in all
material respects of the conditions to Closing.
(d) No Proceeding. No Proceeding shall be pending or
threatened that (i) restrains, prohibits, prevents or materially
changes, or presents a substantial possibility of restraining,
prohibiting, preventing or materially changing, the terms of the
Transactions or the Atlas Transactions, or (ii) presents a
substantial possibility of resulting in material damages to, or
imposing a Burdensome Condition upon, Sprint or its Subsidiaries
in connection with the Transactions or the Atlas Transactions.
For purposes of this Section 13.2(d), the term "material damages"
shall mean damages material to Sprint and its Subsidiaries taken
as a whole.
(e) No Material Adverse Change. Since the date of this
Agreement, there shall have been no material adverse change in the
business or financial condition of the International
Telecommunications Services Business of FT or DT, in each case
taken as a whole.
(f) Opinions of Counsel. Each of Sprint and Sprint Sub
shall have received opinions, dated as of the Closing Date, from
counsel to FT, DT and Atlas reasonably satisfactory to Sprint and
Sprint Sub which address favorably the matters set forth in
Schedule 13.2(f)(i), Schedule 13.2(f)(ii) and Schedule
13.2(f)(iii), respectively, and which are in form and substance
reasonably satisfactory to Sprint and Sprint Sub.
(g) No Major Competitor. No Major Competitor of Sprint
shall have acquired voting securities of FT or DT, if (i) such
voting securities were acquired as a result of a transaction with
FT or DT or its parent government (and the Bundesanstalt fur Post
und Telekommunikation (the "Bundesanstalt") in the case of DT),
and following such transaction such Major Competitor owns directly
or indirectly a greater than 10% interest in FT or DT, or (ii) FT
or DT otherwise has taken steps for the purpose of encouraging or
facilitating an acquisition by such a Major Competitor of direct
or indirect ownership in it greater than 10%.
(h) Atlas Transactions. The absence of a declaration
by the Sprint Parties of the existence of a Burdensome Condition
with respect to the Atlas Transactions pursuant to and in
accordance with Section 15.12(d).
Section 13.3. Conditions to the Obligations of FT and DT.
The obligations of each of FT, DT, Atlas and their respective
Affiliates to make their initial contributions to the JV Entities
pursuant to Section 11.1 and the obligations of each of FT, DT,
Atlas and their respective Affiliates to enter into the other
Operative Agreements to which it is a party and to otherwise
consummate the Transactions that are to be consummated by them at
Closing are subject to the fulfillment to the satisfaction of FT
and DT, as of the Closing Date, of the following additional
conditions:
(a) Accuracy of Representations and Warranties. The
representations and warranties made by Sprint, Sprint Sub and
their respective Affiliates in each Operative Agreement to which
they are a party or made in writing pursuant thereto shall be true
and correct in all material respects as of the date they were made
and as of the Closing Date, as if made on and as of the Closing
Date, except for representations and warranties that relate solely
to a date prior to the Closing Date.
(b) Performance of Obligations. Sprint and Sprint Sub
shall have performed or complied in all material respects with
their respective covenants and agreements contained in the
Operative Agreements required to be performed or complied with by
Sprint or Sprint Sub on or prior to the Closing Date.
(c) Delivery of Certificates of Sprint and Sprint Sub.
Each of Sprint and Sprint Sub shall have delivered to each of FT,
DT and Atlas customary closing certificates and documents, in each
case signed by an officer or officers with the authority to bind
such Party (in each case dated as of the Closing Date), and such
other certificates or documents as FT, DT, Atlas or their counsel
may reasonably request evidencing the satisfaction in all material
respects of the conditions to Closing.
(d) No Proceeding. No Proceeding shall be pending or
threatened that (i) restrains, prohibits, prevents or materially
changes, or presents a substantial possibility of restraining,
prohibiting, preventing or materially changing, the terms of the
Transactions or the Atlas Transactions, or (ii) presents a
substantial possibility of resulting in material damages to, or
imposing a Burdensome Condition upon, FT or DT in connection with
the Transactions or the Atlas Transactions. For purposes of this
Section 13.3(d), the term "material damages" shall mean damages
material to FT and its Subsidiaries or DT and its Subsidiaries, in
each case taken as a whole, as the case may be.
(e) No Material Adverse Change. Since the date of this
Agreement, there shall have been no material adverse change in the
business or financial condition of the International
Telecommunications Services Business of Sprint and Sprint Sub
taken as a whole.
(f) Opinion of Counsel. Each of FT, DT and Atlas shall
have received opinions, dated as of the Closing Date, from counsel
to Sprint and Sprint Sub reasonably satisfactory to FT, DT and
Atlas which address favorably the matters set forth in Schedule
13.3(f)(i) and Schedule 13.3(f)(ii), respectively, and which are
in form and substance reasonably satisfactory to FT, DT and Atlas.
ARTICLE 14.
REPRESENTATIONS AND WARRANTIES
Section 14.1. Representations and Warranties of Sprint and
Sprint Sub. Sprint and Sprint Sub jointly and severally represent
and warrant to FT, DT and Atlas as follows:
(a) Organization and Standing. Each of Sprint, Sprint
Sub and their Affiliates is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction
of its incorporation, and has all requisite corporate power and
corporate authority necessary to enable it to own, lease or
otherwise hold its properties and assets and to carry on its
business as presently conducted.
(b) Authorization; Validity. Each of Sprint and Sprint
Sub has all requisite corporate power and corporate authority to
enter into and perform its obligations under this Agreement and to
consummate the Transactions to be consummated by it. Each of
Sprint, Sprint Sub and its Affiliates has or will have at Closing
all requisite corporate power and corporate authority to enter
into and perform its obligations under the other Operative
Agreements to which it is a party and to consummate the
Transactions to be consummated by it. The execution, delivery and
performance by each of Sprint and Sprint Sub of this Agreement
have been, and the execution, delivery and performance by each of
Sprint, Sprint Sub and its Affiliates of the other Operative
Agreements to which it is a party and the consummation by each of
Sprint, Sprint Sub and its Affiliates of the Transactions
contemplated by Section 12.1(b) to be consummated by it at Closing
have been or at Closing will have been, duly authorized by all
necessary corporate action on the part of Sprint, Sprint Sub and
their Affiliates (assuming that, with respect solely to those
provisions of this Agreement and the other Operative Agreements
that require explicitly the receipt of Sprint Continuing Director
approval for the performance of obligations or consummation of
transactions on the part of Sprint or any of its Affiliates
hereunder or thereunder, Sprint Continuing Director approval is
obtained in the manner provided in Section 15.38). This Agreement
has been, and the other Operative Agreements to which Sprint,
Sprint Sub or any of their Affiliates is a party have been or at
Closing will have been, duly executed and delivered by Sprint,
Sprint Sub or such Affiliate, as applicable. This Agreement
constitutes, and the other Operative Agreements to which any of
Sprint, Sprint Sub or its Affiliates is a party at Closing will
constitute, legal, valid and binding obligations of Sprint, Sprint
Sub or such Affiliates, as applicable, enforceable against it or
them in accordance with their respective terms.
(c) No Conflicts. The execution, delivery and
performance by each of Sprint and Sprint Sub of this Agreement do
not, and the execution, delivery and performance by each of
Sprint, Sprint Sub and their Affiliates of the other Operative
Agreements to which it is a party, the consummation of the
Transactions contemplated by Section 12.1(b) to be consummated by
it at Closing and the compliance with the terms of the Operative
Agreements to which it is a party at Closing will not, conflict
with, result in any violation of or default (with or without
notice or lapse of time or both) under, give rise to a right of
termination, cancellation or acceleration of any obligation (in
each case by any third party) or to the loss of any benefit under,
or result in or require the creation, imposition or extension of
any Lien upon any of its properties or assets under (i) any
provision of the Articles of Incorporation or bylaws of Sprint or
any provision of the constituent documents of any such Affiliate
(assuming that, with respect solely to those provisions of this
Agreement and the other Operative Agreements that require
explicitly the receipt of Sprint Continuing Director approval for
the performance of obligations or consummation of transactions on
the part of Sprint or any of its Affiliates hereunder or
thereunder, Sprint Continuing Director approval is obtained in the
manner provided in Section 15.38) or (ii) any Judgment,
Injunction, Applicable Law or Contract to which it is a party or
by which it or any of its properties is bound (except, with
respect to clause (ii), for such conflicts, violations, defaults,
rights or losses that, individually or in the aggregate, would not
have a material adverse effect on the ability of Sprint, Sprint
Sub or any of its Affiliates (as applicable) to perform in all
material respects their obligations under this Agreement and the
other Operative Agreements to which it is a party in accordance
with their respective terms). To the knowledge of Sprint and
Sprint Sub, no Third Party Approval and, except as provided in
Schedule 14.1(c), no Governmental Approval is required to be
obtained or made by Sprint, Sprint Sub or any of its Affiliates in
connection with the execution, delivery and performance of this
Agreement and the Transactions contemplated by this Agreement
(other than Transactions contemplated by or to be implemented
pursuant to the other Operative Agreements), except for Third
Party Approvals or Governmental Approvals the absence of which,
individually or in the aggregate, would not have a material
adverse effect on the ability of Sprint, Sprint Sub or its
Affiliates (as applicable) to perform in all material respects its
obligations under this Agreement and the other Operative Agreement
to which it is a party in accordance with its terms.
(d) Brokers or Finders. Other than Dillon, Read & Co.
Inc., no Person is or will be entitled to any broker's or finder's
fee or any other commission or similar fee as a result of any
actions by Sprint or Sprint Sub in connection with any of the
Transactions.
(e) Litigation. To the knowledge of Sprint and Sprint
Sub, except as set forth in Schedule 14.1(e), there is no
Proceeding pending or threatened against Sprint, Sprint Sub or any
of their Affiliates reasonably likely to restrain, enjoin or
otherwise prevent the consummation of the Transactions.
(f) Absence of Liens. On the Closing Date, none of the
Venture Interests held by any of the Sprint Parties shall be
subject to any Lien.
(g) Operative Agreement Representations. The
representations and warranties made by Sprint, Sprint Sub and
their Affiliates as set forth in each of the other Operative
Agreements to which any of them is a party are or will be true and
correct in all material respects as of the date they are or will
be made (unless expressly stated to be made as of some other
date).
Section 14.2. Representations and Warranties of FT.
(a) FT represents and warrants to Sprint and Sprint Sub
as follows:
(i) Organization and Standing. FT is an exploitant
public and each of its Affiliates (other than Atlas and its
Subsidiaries) is a Person duly formed and validly existing under
the laws of the jurisdiction of its formation, and each of FT and
such Affiliates has all requisite corporate power and corporate
authority necessary to enable it to own, lease or otherwise hold
its properties and assets and to carry on its business as
presently conducted.
(ii) Authorization; Validity. FT has all requisite
corporate power and corporate authority to enter into and perform
its obligations under this Agreement and to consummate the
Transactions to be consummated by it. Each of FT and its
Affiliates (other than Atlas and its Subsidiaries) has or will
have at Closing all requisite corporate power and corporate
authority to enter into and perform its obligations under the
other Operative Agreements to which it is a party and to
consummate the Transactions to be consummated by it. The
execution, delivery and performance by FT of this Agreement have
been, and the execution, delivery and performance by each of FT
and its Affiliates (other than Atlas and its Subsidiaries) of the
other Operative Agreements to which it is a party and the
consummation by each of FT and its Affiliates (other than Atlas
and its Subsidiaries) of the Transactions contemplated by Section
12.1(b) to be consummated by it at Closing have been or at Closing
will have been, duly authorized by all necessary corporate action
on the part of FT and such Affiliates (other than Atlas and its
Subsidiaries). This Agreement has been, and the other Operative
Agreements to which FT or any of its Affiliates (other than Atlas
and its Subsidiaries) is a party have been or at Closing will have
been, duly executed and delivered by FT or such Affiliate (other
than Atlas and its Subsidiaries), as applicable. This Agreement
constitutes, and the other Operative Agreements to which any of FT
or its Affiliates (other than Atlas and its Subsidiaries) is a
party at Closing will constitute, legal, valid and binding
obligations of FT or such Affiliates (other than Atlas and its
Subsidiaries), as applicable, enforceable against it or them in
accordance with their respective terms.
(iii) No Conflicts. The execution, delivery and
performance by FT of this Agreement do not, and the execution,
delivery and performance by each of FT and its Affiliates (other
than Atlas and its Subsidiaries) of the other Operative Agreements
to which it is a party, the consummation of the Transactions
contemplated by Section 12.1(b) to be consummated by it at Closing
and the compliance with the terms of the Operative Agreements to
which it is a party at Closing will not, conflict with, result in
any violation of or default (with or without notice or lapse of
time or both) under, give rise to a right of termination,
cancellation or acceleration of any obligation (in each case by
any third party) or to the loss of any benefit under, or result in
or require the creation, imposition or extension of any Lien upon
any of its properties or assets under (A) any provision of the FT
Law and Decrees or any provision of the constituent documents of
any such Affiliate or (B) any Judgment, Injunction, Applicable Law
or Contract to which it is a party or by which it or any of its
properties is bound (except, with respect to clause (B), for such
conflicts, violations, defaults, rights or losses that,
individually or in the aggregate, would not have a material
adverse effect on the ability of FT or any of its Affiliates
(other than Atlas and its Subsidiaries) (as applicable) to perform
in all material respects its obligations under this Agreement and
the other Operative Agreements to which it is a party in
accordance with their respective terms). To the knowledge of FT,
no Third Party Approval and, except as provided in Schedule
14.2(a)(iii), no Governmental Approval is required to be obtained
or made by FT or any of its Affiliates (other than Atlas and its
Subsidiaries) in connection with the execution, delivery and
performance of this Agreement and the Transactions contemplated by
this Agreement (other than Transactions contemplated by or to be
implemented pursuant to the other Operative Agreements), except
for Third Party Approvals or Governmental Approvals the absence of
which, individually or in the aggregate, would not have a material
adverse effect on the ability of FT or its Affiliates (other than
Atlas and its Subsidiaries) (as applicable) to perform in all
material respects its obligations under this Agreement or any
other Operative Agreement to which it is a party in accordance
with its terms.
(iv) Brokers or Finders. Other than Goldman, Sachs &
Co., no Person is or will be entitled to any broker's or finder's
fee or any other commission or similar fee as a result of any
actions by FT in connection with any of the Transactions.
(v) Litigation. To the knowledge of FT, except as set
forth in Schedule 14.2(a)(v), there is no Proceeding pending or
threatened against FT or any of its Affiliates (other than Atlas
and its Subsidiaries) reasonably likely to restrain, enjoin or
otherwise prevent the consummation of the Transactions.
(vi) Absence of Liens. On the Closing Date, none of the
Venture Interests held by FT shall be subject to any Liens.
(vii) Operative Agreement Representations. The
representations and warranties made by FT and its Affiliates
(other than Atlas and its Subsidiaries) as set forth in each of
the other Operative Agreements to which any of them is a party are
or will be true and correct in all material respects as of the
date they are or will be made (unless expressly stated to be made
as of some other date).
(b) On the Atlas Signing Date, FT will represent and
warrant to Sprint and Sprint Sub as follows (for purposes of this
Section 14.2(b), "FT and (or) its Affiliates" shall mean "FT and
(or) its Affiliates other than Atlas and its Subsidiaries"):
(i) Authorization; Validity. FT has all requisite
corporate power and corporate authority to enter into and perform
its obligations under the Atlas Joint Venture Agreement and to
consummate the Atlas Transactions to be consummated by it. Each
of FT and its Affiliates has or will have at Closing all requisite
corporate power and corporate authority to enter into and perform
its obligations under the other Atlas Joint Venture Documents to
which it is a party and to consummate the Atlas Transactions to be
consummated by it. The execution, delivery and performance by FT
of the Atlas Joint Venture Agreement have been, and the execution,
delivery and performance by each of FT and its Affiliates of the
other Atlas Joint Venture Documents to which it is a party and the
consummation by each of FT and its Affiliates of the Atlas
Transactions to be consummated by it have been or at Closing will
have been, duly authorized by all necessary corporate action on
the part of FT and its Affiliates. The Atlas Joint Venture
Agreement has been, and the other Atlas Joint Venture Documents to
which FT or any of its Affiliates is a party have been or at
Closing will have been, duly executed and delivered by FT or such
Affiliate, as applicable. The Atlas Joint Venture Agreement
constitutes, and the other Atlas Joint Venture Documents to which
FT or any of its Affiliates is a party at Closing will constitute,
legal, valid and binding obligations of FT or such Affiliate, as
applicable, enforceable against it or them in accordance with
their respective terms.
(ii) No Conflicts. The execution, delivery and
performance by each of FT and its Affiliates of the Atlas Joint
Venture Documents to which it is a party, the consummation of the
Atlas Transactions to be consummated by it on or prior to the
Closing Date and the compliance with the terms of the Atlas Joint
Venture Documents to which it is a party at Closing will not
conflict with, result in any violation of or default (with or
without notice or lapse of time or both) under, give rise to a
right of termination, cancellation, or acceleration of any
obligation (in each case by any third party) or to the loss of any
benefit under, or result in or require the creation, imposition or
extension of any Lien upon any of its properties or assets under
(A) any provision of the FT Law and Decrees or any provision of
the constituent documents of any such Affiliate or (B) any
Judgment, Injunction, Applicable Law or Contract to which it is a
party or by which it or any of its properties is bound (except,
with respect to clause (B), for such conflicts, violations,
defaults, rights or losses that, individually or in the aggregate,
would not have a material adverse effect on the ability of FT or
any of its Affiliates to perform in all material respects its
obligations under the Atlas Joint Venture Documents to which it is
a party in accordance with their respective terms). To the
knowledge of FT, no Third Party Approval and, except as provided
in Schedule 14.2(b)(ii), no Governmental Approval is required to
be obtained or made by FT or any of its Affiliates in connection
with the execution, delivery and performance of the Atlas Joint
Venture Documents to which it is a party or the consummation of
the Atlas Transactions (other than Atlas Transactions contemplated
by or to be implemented pursuant to the Atlas Joint Venture
Documents other than the Atlas Joint Venture Agreement), except
for Third Party Approvals or Governmental Approvals the absence of
which, individually or in the aggregate, would not have a material
adverse effect on the ability of FT or any of its Affiliates to
perform in all material respects its obligations under this
Agreement or any other Operative Agreement or any Atlas Joint
Venture Document to which it is a party in accordance with its
terms.
Section 14.3. Representations and Warranties of DT.
(a) DT represents and warrants to Sprint and Sprint Sub
as follows:
(i) Organization and Standing. DT is an
Aktiengesellschaft and each of its Affiliates (other than Atlas
and its Subsidiaries) is a Person duly formed and validly existing
under the laws of the jurisdiction of its formation, and each of
DT and such Affiliates has all requisite corporate power and
corporate authority necessary to enable it to own, lease or
otherwise hold its properties and assets and to carry on its
business as presently conducted.
(ii) Authorization; Validity. DT has all requisite
corporate power and corporate authority to enter into and perform
its obligations under this Agreement and to consummate the
Transactions to be consummated by it. Each of DT and its
Affiliates (other than Atlas and its Subsidiaries) has or will
have at Closing all requisite corporate power and corporate
authority to enter into and perform its obligations under the
other Operative Agreements to which it is a party and to
consummate the Transactions to be consummated by it. The
execution, delivery and performance by DT of this Agreement have
been, and the execution, delivery and performance by each of DT
and its Affiliates (other than Atlas and its Subsidiaries) of the
other Operative Agreements to which it is a party and the
consummation by each of DT and its Affiliates (other than Atlas
and its Subsidiaries) of the Transactions contemplated by Section
12.1(b) to be consummated by it at Closing have been or at Closing
will have been, duly authorized by all necessary corporate action
on the part of DT and such Affiliates (other than Atlas and its
Subsidiaries). This Agreement has been, and the other Operative
Agreements to which DT or any of its Affiliates (other than Atlas
and its Subsidiaries) is a party have been or at Closing will have
been, duly executed and delivered by DT or such Affiliate (other
than Atlas and its Subsidiaries), as applicable. This Agreement
constitutes, and the other Operative Agreements to which any of DT
or its Affiliates (other than Atlas and its Subsidiaries) is a
party at Closing will constitute, legal, valid and binding
obligations of DT or such Affiliates (other than Atlas and its
Subsidiaries), as applicable, enforceable against it or them in
accordance with their respective terms.
(iii) No Conflicts. The execution, delivery and
performance by DT of this Agreement do not, and the execution,
delivery and performance by each of DT and its Affiliates (other
than Atlas and its Subsidiaries) of the other Operative Agreements
to which it is a party, the consummation of the Transactions
contemplated by Section 12.1(b) to be consummated by it at Closing
and the compliance with the terms of the Operative Agreements to
which it is a party at Closing will not, conflict with, result in
any violation of or default (with or without notice or lapse of
time or both) under, give rise to a right of termination,
cancellation or acceleration of any obligation (in each case by
any third party) or to the loss of any benefit under, or result in
or require the creation, imposition or extension of any Lien upon
any of its properties or assets under (A) any provision of the
Satzung of DT or any provision of the constituent documents of any
such Affiliate or (B) any Judgment, Injunction, Applicable Law or
Contract to which it is a party or by which it or any of its
properties is bound (except, with respect to clause (B), for such
conflicts, violations, defaults, rights or losses that,
individually or in the aggregate, would not have a material
adverse effect on the ability of DT or any of its Affiliates
(other than Atlas and its Subsidiaries) (as applicable) to perform
in all material respects its obligations under this Agreement and
the other Operative Agreements to which it is a party in
accordance with their respective terms). To the knowledge of DT,
no Third Party Approval and, except as provided in Schedule
14.3(a)(iii), no Governmental Approval is required to be obtained
or made by DT or any of its Affiliates (other than Atlas and its
Subsidiaries) in connection with the execution, delivery and
performance of this Agreement and the Transactions contemplated by
this Agreement (other than Transactions contemplated by or to be
implemented pursuant to the other Operative Agreements), except
for Third Party Approvals or Governmental Approvals the absence of
which, individually or in the aggregate, would not have a material
adverse effect on the ability of DT or its Affiliates (other than
Atlas and its Subsidiaries) (as applicable) to perform in all
material respects its obligations under this Agreement or any
other Operative Agreement to which it is a party in accordance
with its terms.
(iv) Brokers or Finders. Other than Goldman, Sachs &
Co., no Person is or will be entitled to any broker's or finder's
fee or any other commission or similar fee as a result of any
actions by DT in connection with any of the Transactions.
(v) Litigation. To the knowledge of DT, except as set
forth in Schedule 14.3(a)(v), there is no Proceeding pending or
threatened against DT or any of its Affiliates (other than Atlas
and its Subsidiaries) reasonably likely to restrain, enjoin or
otherwise prevent the consummation of the Transactions.
(vi) Absence of Liens. On the Closing Date, none of the
Venture Interests held by DT shall be subject to any Liens.
(vii) Operative Agreement Representations. The
representations and warranties made by DT and its Affiliates
(other than Atlas and its Subsidiaries) as set forth in each of
the other Operative Agreements to which any of them is a party are
or will be true and correct in all material respects as of the
date they are or will be made (unless expressly stated to be made
as of some other date).
(b) On the Atlas Signing Date, DT will represent and
warrant to Sprint and Sprint Sub as follows (for purposes of this
Section 14.3(b), "DT and (or) its Affiliates" shall mean "DT and
(or) its Affiliates other than Atlas and its Subsidiaries"):
(i) Authorization; Validity. DT has all requisite
corporate power and corporate authority to enter into and perform
its obligations under the Atlas Joint Venture Agreement and to
consummate the Atlas Transactions to be consummated by it. Each
of DT and its Affiliates has or will have at Closing all requisite
corporate power and corporate authority to enter into and perform
its obligations under the other Atlas Joint Venture Documents to
which it is a party and to consummate the Atlas Transactions to be
consummated by it. The execution, delivery and performance by DT
of the Atlas Joint Venture Agreement have been, and the execution,
delivery and performance by each of DT and its Affiliates of the
other Atlas Joint Venture Documents to which it is a party and the
consummation by each of DT and its Affiliates of the Atlas
Transactions to be consummated by it have been or at Closing will
have been, duly authorized by all necessary corporate action on
the part of DT and its Affiliates. The Atlas Joint Venture
Agreement has been, and the other Atlas Joint Venture Documents to
which DT or any of its Affiliates is a party have been or at
Closing will have been, duly executed and delivered by DT or such
Affiliate, as applicable. The Atlas Joint Venture Agreement
constitutes, and the other Atlas Joint Venture Documents to which
DT or any of its Affiliates is a party at Closing will constitute,
legal, valid and binding obligations of DT or such Affiliate, as
applicable, enforceable against it or them in accordance with
their respective terms.
(ii) No Conflicts. The execution, delivery and
performance by each of DT and its Affiliates of the Atlas Joint
Venture Documents to which it is a party, the consummation of the
Atlas Transactions to be consummated by it on or prior to the
Closing Date and the compliance with the terms of the Atlas Joint
Venture Documents to which it is a party at Closing will not
conflict with, result in any violation of or default (with or
without notice or lapse of time or both) under, give rise to a
right of termination, cancellation, or acceleration of any
obligation (in each case by any third party) or to the loss of any
benefit under, or result in or require the creation, imposition or
extension of any Lien upon any of its properties or assets under
(A) any provision of the Satzung of DT or any provision of the
constituent documents of any such Affiliate or (B) any Judgment,
Injunction, Applicable Law or Contract to which it is a party or
by which it or any of its properties is bound (except, with
respect to clause (B), for such conflicts, violations, defaults,
rights or losses that, individually or in the aggregate, would not
have a material adverse effect on the ability of DT or any of its
Affiliates to perform in all material respects its obligations
under the Atlas Joint Venture Documents to which it is a party in
accordance with their respective terms). To the knowledge of DT,
no Third Party Approval and, except as provided in Schedule
14.3(b)(ii), no Governmental Approval is required to be obtained
or made by DT or any of its Affiliates in connection with the
execution, delivery and performance of the Atlas Joint Venture
Documents to which it is a party or the consummation of the Atlas
Transactions (other than Atlas Transactions contemplated by or to
be implemented pursuant to the Atlas Joint Venture Documents other
than the Atlas Joint Venture Agreement), except for Third Party
Approvals or Governmental Approvals the absence of which,
individually or in the aggregate, would not have a material
adverse effect on the ability of DT or any of its Affiliates to
perform in all material respects its obligations under this
Agreement or any other Operative Agreement or any Atlas Joint
Venture Document to which it is a party in accordance with its
terms.
Section 14.4. Representations and Warranties of FT and DT
With Respect To Atlas. On the Atlas Signing Date, each of FT and
DT individually, and not jointly and severally, will represent and
warrant to Sprint and Sprint Sub as follows:
(a) Organization and Standing; Ownership. Atlas is and
each Affiliate of Atlas that is a Controlled Affiliate of Atlas
(for purposes of this Section 14.4, an "Atlas Affiliate") is or
will be at Closing a Person duly formed and validly existing under
the laws of the jurisdiction of its formation, and each of Atlas
and such Affiliate has all requisite corporate power and corporate
authority necessary to enable it to own, lease or otherwise hold
its properties and assets and to carry on its business as
presently conducted.
(b) Authorization; Validity. Atlas has all requisite
corporate power and corporate authority to enter into and perform
its obligations under this Agreement and to consummate the
Transactions to be consummated by it. Each of Atlas and the Atlas
Affiliates has or will have at Closing all requisite corporate
power and corporate authority to enter into and perform its
obligations under the other Operative Agreements to which it is a
party and to consummate the Transactions to be consummated by it.
The execution, delivery and performance by each of Atlas and the
Atlas Affiliates of this Agreement and the other Operative
Agreements to which it is a party and the consummation by it of
the Transactions contemplated herein to be consummated by it at
Closing have been or will have been at Closing duly authorized by
all necessary corporate action on the part of Atlas and each Atlas
Affiliate. This Agreement has been, and the other Operative
Agreements to which Atlas or any Atlas Affiliate is a party have
been or at Closing will have been, duly executed and delivered by
Atlas or any such Atlas Affiliate, as applicable. This Agreement
constitutes, and the other Operative Agreements to which any of
Atlas or any Atlas Affiliate is a party at Closing will
constitute, legal, valid and binding obligations of Atlas or such
Atlas Affiliates, as applicable, enforceable against it or them in
accordance with their respective terms.
(c) No Conflicts. The execution, delivery and
performance by Atlas of this Agreement do not, and the execution,
delivery and performance by each of Atlas and the Atlas Affiliates
of the other Operative Agreements to which it is a party, the
consummation of the Transactions contemplated by Section 12.1(b)
to be consummated by it at Closing, and the compliance with the
terms of the Operative Agreements to which it is a party at
Closing will not, conflict with, result in any violation of or
default (with or without notice or lapse of time or both) under,
give rise to a right of termination, cancellation or acceleration
of any obligation (in each case by any third party) or to the loss
of any benefit under, or result in or require the creation,
imposition or extension of any Lien upon any of its properties or
assets under (i) any provision of its constituent documents or
(ii) any Judgment, Injunction, Applicable Law or Contract to which
it is a party or by which it or any of its properties is bound
(except, with respect to clause (ii), for such conflicts,
violations, defaults, rights or losses that, individually or in
the aggregate, would not have a material adverse effect on the
ability of Atlas or any such Atlas Affiliate (as applicable) to
perform in all material respects its obligations under this
Agreement and the other Operative Agreements to which it is a
party in accordance with their respective terms). To the
knowledge of Atlas, no Third Party Approval and, except as
provided in Schedule 14.4(c), no Governmental Approval is required
to be obtained or made by Atlas or any of its Affiliates in
connection with the execution, delivery and performance of this
Agreement and the Transactions contemplated by this Agreement
(other than Transactions contemplated by or to be implemented
pursuant to the other Operative Agreements), except for Third
Party Approvals or Governmental Approvals the absence of which,
individually or in the aggregate, would not have a material
adverse effect on the ability of Atlas or any of the Atlas
Affiliates (as applicable) to perform in all material respects its
obligations under this Agreement and any other Operative Agreement
to which it is a party in accordance with its terms.
(d) Brokers or Finders. Other than Goldman Sachs &
Co., no Person will be entitled to any broker's or finder's fee or
any other commission or similar fee as a result of any action by
Atlas in connection with any of the Transactions to be consummated
by it at Closing.
(e) Litigation. To the knowledge of FT, DT and Atlas,
except as set forth in Schedule 14.4(e), there is no Proceeding
pending or threatened against Atlas or any Atlas Affiliate
reasonably likely to restrain, enjoin or otherwise prevent the
consummation of the Transactions.
(f) Absence of Liens. On the Closing Date, none of the
Venture Interests held by Atlas shall be subject to any Liens.
(g) Operative Agreement Representations. The
representations and warranties made by Atlas and the Atlas
Affiliates as set forth in each of the other Operative Agreements
to which any of them is a party will be true and correct in all
material respects as of the date they were made (unless expressly
stated to be made as of some other date).
Section 14.5. Affiliates. For purposes of this Article 14
(other than Sections 14.2(b) and 14.3(b)), all references to an
"Affiliate" shall mean an Affiliate that is or will become a party
to an Operative Agreement on or prior to the Closing Date. For
purposes of Sections 14.2(b) and 14.3(b), all references to an
"Affiliate" shall mean an Affiliate that is or will become a party
to an Atlas Joint Venture Document on or prior to the Closing
Date.
ARTICLE 15.
COVENANTS
Section 15.1. Conduct of Business. Unless otherwise
expressly contemplated by this Agreement or the other Operative
Agreements or as agreed to by the other Parties in writing and
except for (i) transfers of assets or liabilities to Atlas and its
Subsidiaries from FT, DT or their Affiliates in connection with
the formation of Atlas and its Subsidiaries, (ii) the
reorganization of the International Telecommunications Services
Businesses of FT and DT in connection with the formation of Atlas
and its Subsidiaries or the privatization of FT or DT, but only to
the extent such reorganizations do not prevent the consummation of
any of the Transactions, (iii) sales of equity interests in FT or
DT in connection with the privatization of FT or DT, and (iv) any
reorganization of the businesses of FT, DT or Atlas resulting from
governmental action, each of Sprint, Sprint Sub and their
Affiliates, on the one hand, and FT, DT, Atlas and their
Affiliates, on the other hand, taking into account the dynamic
nature of the International Telecommunications Services Business,
from the date of this Agreement to the Closing Date, will (x)
operate their respective International Telecommunications Services
Businesses in the ordinary course, (y) consistent with such
operation and taking into account the dynamic nature of the
International Telecommunications Services Business use its
reasonable efforts to preserve intact the present business
organizations and business relationships of its International
Telecommunications Services Business, and (z) not create any Lien
on its International Telecommunications Services Business to be
transferred to the Joint Venture which will materially and
adversely affect the ability of the Joint Venture or the JV
Entities to conduct the Initial Venture Business.
Section 15.2. Cooperation; Compliance with Laws.
(a) From and after the date of this Agreement through
the Closing Date, each Party shall use its reasonable efforts to
ensure that the conditions to Closing set forth herein to be
satisfied by such Party are satisfied on or prior to the Closing
Date and to obtain (and cooperate with the other Parties in
obtaining) any Governmental Approvals or Third Party Approvals
required to be obtained or made by it in connection with any of
the Transactions to be consummated by it at the Closing.
(b) Each of the Parties agrees to make all filings with
Governmental Authorities in connection with the Transactions,
including filings necessary to obtain the Governmental Approvals
described or referred to in Article 13, as promptly as practicable
after the date of this Agreement and to use its reasonable efforts
to furnish or cause to be furnished, as promptly as practicable,
all information and documents reasonably required by the relevant
Governmental Authorities to obtain such approvals and shall
otherwise cooperate in all reasonable respects with the applicable
Governmental Authorities to obtain any required Governmental
Approvals in as expeditious a manner as possible.
(c) Each of the Parties shall use reasonable efforts to
resolve such objections, if any, as any Governmental Authority may
assert with respect to this Agreement and the other Operative
Agreements and the Transactions under Applicable Laws, including
requesting reconsideration (which may be initiated by the Party
affected thereby or requested by any other Party) of any adverse
ruling of any Governmental Authority and taking administrative
appeals, if available and reasonably likely to result in a
reversal of such adverse ruling. If any Proceeding is instituted
by any Person challenging this Agreement, the other Operative
Agreements or the Transactions, the Parties shall promptly consult
with each other to determine the most appropriate response to such
Proceeding and shall cooperate in all reasonable respects with any
Party subject to any such Proceeding, provided that the decision
whether to initiate, and the control of, any Proceeding involving
any Party shall remain within the sole discretion of such Party.
(d) The Parties acknowledge that nothing in this
Section 15.2 shall be construed to require any Party to agree to
or comply with any Burdensome Condition.
Section 15.3. Access. Except as otherwise provided in
Section 8 of the Master Transfer Agreement Term Sheet as to due
diligence with respect to the "Financial Information" described in
the Master Transfer Agreement Term Sheet (which due diligence will
be conducted in accordance with such Section 8), from and after
the date of this Agreement through the Closing Date, each Party
shall give to the other Parties and their respective
representatives reasonable access during normal business hours to
the properties, books and records of such Party and its Affiliates
to the extent relating to the Transferred Assets and the Assumed
Liabilities and furnish each other with all such information
concerning its International Telecommunications Services Business
to be transferred to the Joint Venture as such other Parties may
reasonably request, subject to appropriate confidentiality
restrictions and restrictions on sharing of information imposed by
Applicable Law.
Section 15.4. Financial Information. From and after the
date of this Agreement through the Closing Date, each Party shall
and shall cause its respective Affiliates to give to each other
Party and its representatives the balance sheets, profit and loss
statements and other financial statements as are prepared in the
normal course of business of such Party and its Affiliates to the
extent relating to its International Telecommunications Services
Business to be transferred to the Joint Venture and, except as
otherwise provided in Section 8 of the Master Transfer Agreement
Term Sheet as to due diligence with respect to the "Financial
Information" described in the Master Transfer Agreement Term Sheet
(which due diligence will be conducted in accordance with such
Section 8), such other information concerning the financial
condition of its International Telecommunications Services
Business to be transferred to the Joint Venture, as the case may
be, as such other Party may reasonably request.
Section 15.5. Books and Records. From and after the date of
this Agreement through the Closing Date, each Party shall, and
shall cause its Affiliates to, continue to maintain the books,
accounts and records of such Party and its Affiliates relating to
its International Telecommunications Services Business to be
transferred to the Joint Venture in the usual, regular and
ordinary manner on a basis consistent with prior years and
periods, except as required by Applicable Law or applicable GAAP,
as the case may be.
Section 15.6. No Solicitation.
(a) Until the Closing Date, none of the Parties nor any
of their Affiliates or Subsidiaries nor any of their respective
officers, directors, employees, agents or representatives
(including, without limitation, investment bankers, attorneys and
accountants) shall, directly or indirectly, (i) solicit any
proposal involving any commercial or other arrangements or
relationships which are similar in nature and scope to the
arrangements and relationships contemplated by this Agreement or
the other Operative Agreements if inconsistent with the purposes
and scope of this Agreement (an "Alternative Transaction"), (ii)
disclose directly or indirectly any information not customarily
disclosed publicly concerning its business and properties to, or
afford any access to its properties, books and records to, any
Person in connection with any possible Alternative Transaction or
(iii) enter into substantive negotiations with any third party
relating to an Alternative Transaction.
(b) Until the Closing Date, each Party shall notify the
other Parties if any discussions or negotiations are sought to be
initiated, any inquiry or proposal is made, or any such
information is requested, with respect to a potential Alternative
Transaction.
Section 15.7. Further Assurances. Each of the Parties shall
use its reasonable efforts to do or cause to be done, and to cause
its Affiliates to do or cause to be done, such further acts and
things and deliver or cause to be delivered to each other Party or
its designees such additional assignments, agreements, powers and
instruments as such Party or its designees may reasonably require
or deem advisable to carry into effect the purpose of the
Operative Agreements or to better assure and confirm unto such
Party or its designees its rights, powers and remedies hereunder
and thereunder, except that none of the Parties shall be required
to agree to or comply with any Burdensome Condition.
Section 15.8. JV Entity Default. Each of the Parties agrees
that it will not, and it will not permit any of its Affiliates to,
petition any Governmental Authority for the Bankruptcy of any JV
Entity in the event that any such JV Entity defaults on any of its
obligations to such Party or Affiliate.
Section 15.9. Indemnification.
(a) The Sprint Parties shall pay, indemnify and
reimburse each of the FT/DT Parties and their respective
Affiliates, officers, directors, employees and agents and the JV
Entities (the "FT/DT Protected Parties") for any and all Losses
suffered or incurred by any of them as a result of, or with
respect to, any breach or inaccuracy of any representation,
warranty, covenant or agreement by any of the Sprint Parties
contained herein or in any other Operative Agreement (subject, in
the case of any Operative Agreement other than this Agreement, to
(i) any express provision in any such other Operative Agreement
that this Section 15.9 (or any part thereof) shall not apply to
such other Operative Agreement and (ii) any limitation on the
indemnification rights or obligations of the Parties contained in
any such other Operative Agreement), whether or not resulting from
third party claims.
(b) Each FT/DT Party, individually and not jointly and
severally but subject to Section 15.9(c), shall pay, indemnify and
reimburse the Sprint Parties and their respective Affiliates,
officers, directors, employees and agents and the JV Entities (the
"Sprint Protected Parties"; the FT/DT Protected Parties or the
Sprint Protected Parties are referred to as the "Protected
Parties") for any and all Losses suffered or incurred by any of
them as a result of, or with respect to, any breach or inaccuracy
of any representation, warranty, covenant or agreement by such FT/
DT Party contained herein or in any other Operative Agreement
(subject, in the case of any Operative Agreement other than this
Agreement, to (i) any express provision in any such other
Operative Agreement that this Section 15.9 (or any part thereof)
shall not apply to such other Operative Agreement and (ii) any
limitation on the indemnification rights or obligations of the
Parties contained in any such other Operative Agreement), whether
or not resulting from third party claims.
(c) The Parties expressly agree that (i) with respect
to any breach by FT or DT of any of the representations and
warranties contained in Section 14.4, each of FT and DT shall be
responsible for 50% of any Losses resulting from such breach, (ii)
with respect to any breach by FT of its covenants set forth in
Section 15.14(b), and to the extent FT shall not perform its
indemnity obligation pursuant to Section 15.9(b) with respect
thereto, DT shall be responsible for 50% of any Losses to be
indemnified thereunder, and (iii) with respect to any breach by DT
of its covenants set forth in Section 15.14(c), and to the extent
DT shall not perform its indemnity obligation pursuant to Section
15.9(b) with respect thereto, FT shall be responsible for 50% of
any Losses to be indemnified thereunder.
(d) Each Party agrees that, except as among the FT/DT
Parties or as between the Sprint Parties, the remedies provided in
this Section 15.9, and the enforcement thereof pursuant to Article
21, shall constitute the sole and exclusive remedies for recovery
against another Party for breaches of any of the representations,
warranties, covenants and agreements in this Agreement and any
other Operative Agreement, except for other remedies as are
expressly provided for in this Agreement or in any other Operative
Agreement (subject, in the case of any Operative Agreement other
than this Agreement, to (i) any express provision in any such
other Operative Agreement that this Section 15.9 (or any part
thereof) shall not apply to such other Operative Agreement and
(ii) any limitation on the indemnification rights or obligations
of the Parties contained in any such other Operative Agreement),
provided that a Party shall not be entitled to make a claim for
indemnification hereunder with respect to a Funding Default of
another Party prior to the end of the Second Cure Period with
respect to such Funding Default. None of the Parties shall in any
event be liable for any consequential, special, exemplary,
punitive, incidental or indirect damages, including loss of profit
or goodwill; provided, however, that this Section 15.9(d) shall
not affect the calculation of the amount of any Loss (and the
corresponding indemnification rights with respect thereto) in
connection with any claims made by Persons other than the
Protected Parties. No Protected Party shall be compensated more
than once for the same Loss.
(e) The representations and warranties contained herein
and in the other Operative Agreements shall not be extinguished by
the Closing, but shall survive for a period of one year following
the Closing (subject, in the case of any Operative Agreement other
than this Agreement, to (x) any express provision in any such
other Operative Agreement that this Section 15.9 (or any part
thereof) shall not apply to such other Operative Agreement and (y)
any limitation on the indemnification rights or obligations of the
Parties contained in any such other Operative Agreement), the
covenants and agreements contained in Sections 15.1, 15.3, 15.4,
15.5, 15.6 and 15.12 shall survive for a period of one year
following the Closing, and the other covenants and agreements
contained herein and in the other Operative Agreements shall not
be extinguished by the Closing, but shall survive the Closing
without limitation as to time (subject (1) in the case of any
Operative Agreement other than this Agreement, to (i) any express
provision in any such other Operative Agreement that this Section
15.9 (or any part thereof) shall not apply to such other Operative
Agreement and (ii) any limitation on the indemnification rights or
obligations of the Parties contained in any such other Operative
Agreement), and (2) to Applicable Law (including any applicable
statute of limitations). No investigation or other examination by
the Parties or their respective representatives shall affect the
term of survival of the representations, warranties, covenants and
agreements set forth above. The survival of the representations,
warranties, covenants and agreements for a specified period as
provided above shall mean that no Party may bring a claim for
breach of any such representation, warranty, covenant or agreement
after such period. It is understood that, except as expressly
provided in Sections 12.2 and 22.1, all representations,
warranties, covenants and agreements contained herein shall be of
no further force or effect after the termination hereof.
(f) No Party shall make any claim for indemnification
under this Section 15.9 in respect of a breach of (x) a
representation or warranty contained in Article 14 of this
Agreement or in any other Operative Agreement (subject, in the
case of any Operative Agreement other than this Agreement, to (i)
any express provision in any such other Operative Agreement that
this Section 15.9 (or any part thereof) shall not apply to such
other Operative Agreement and (ii) any limitation on the
indemnification rights or obligations of the Parties contained in
any such other Operative Agreement), unless and until the
aggregate Loss or Losses arising out of or resulting from such
breaches exceed U.S. $20 million, in which event such Party may
claim indemnification for the entire amount of such Losses, or (y)
a covenant or agreement contained in this Agreement or in any
other Operative Agreement (subject, in the case of any Operative
Agreement other than this Agreement, to (i) any express provision
in any such other Operative Agreement that this Section 15.9 (or
any part thereof) shall not apply to such other Operative
Agreement and (ii) any limitation on the indemnification rights or
obligations of the Parties contained in any such other Operative
Agreement), unless and until the aggregate Loss or Losses arising
out of or resulting from such breach exceeds U.S. $350,000, in
which event such Party may claim indemnification for the entire
amount of such Losses.
(g) The Protected Parties shall promptly notify the
other Party or Parties that may be required to provide
indemnification pursuant to Section 15.9(a) or (b) or to satisfy a
claim pursuant to Section 15.9(c) (the "Indemnifying Parties"), in
writing, of any claim thereunder, specifying in reasonable detail
the nature of the Loss suffered by the Protected Parties, and, if
known, the amount, or an estimate of the amount, of the Loss
arising therefrom, provided that failure of the Protected Parties
to give the Indemnifying Parties prompt notice as provided herein
shall not relieve the Indemnifying Parties of any of their
obligations hereunder, except to the extent any of the
Indemnifying Parties are materially prejudiced by such failure.
The Protected Parties shall provide to the Indemnifying Parties as
promptly as practicable thereafter information and documentation
reasonably requested by the Indemnifying Parties to support and
verify the claim asserted, unless the Protected Parties have been
advised by counsel that it is reasonably likely that a loss of
privilege will occur with respect to such information and
documentation.
(h) If a Party has made a claim against another Party
under this Section 15.9 with respect to a Loss suffered by a
Protected Party which arises out of the claim of any third party,
or if there is any claim against a third party available by virtue
of the circumstances of such a Loss, the Indemnifying Parties may
assume the defense or the prosecution thereof by written notice to
the Protected Parties, including the employment of counsel or
accountants, at the Indemnifying Parties' cost and expense. The
Protected Parties shall have the right to employ counsel separate
from counsel employed by the Indemnifying Parties in any such
action and to participate therein, but the fees and expenses of
such counsel employed by the Protected Parties shall be at their
expense unless counsel for the Protected Parties shall have
advised that it is reasonably likely that any Protected Party may
raise a defense or claim that is inconsistent with any defense or
claim available to an Indemnifying Party, in which case such fees
and expenses shall be borne by the Indemnifying Party. The
Indemnifying Parties shall not be liable for any settlement of any
such claim effected without their prior written consent, which
shall not be unreasonably withheld; provided that if the
Indemnifying Parties do not assume the defense or prosecution of a
claim within thirty (30) days of notice thereof, the Protected
Parties may settle such claim without the consent of the
Indemnifying Parties. The Indemnifying Parties shall not agree to
a settlement of or settle any claim which provides for any relief
other than the payment of monetary damages or which could have a
Material Adverse Effect on any Protected Party and its
Subsidiaries taken as a whole (if applicable) without the prior
written consent of such Protected Party. Whether or not the
Indemnifying Parties choose to so defend or prosecute such claim,
all the Parties shall cooperate in the defense or prosecution
thereof and shall furnish such records, information and testimony,
and attend such conferences, discovery proceedings, hearings,
trials and appeals, as may be reasonably requested in connection
therewith except to the extent that any such Parties have been
advised by counsel that it is reasonably likely that a loss of
privilege will occur with respect to such information,
documentation and testimony. The Indemnifying Parties shall be
subrogated to all rights and remedies of the Protected Parties in
respect of a Loss suffered by the Protected Parties, but only to
the extent the Indemnifying Parties have discharged in full any
obligations they may have with respect to such Loss pursuant to
this Section 15.9.
Section 15.10. Claims on Behalf of JV Entities. The FT/DT
Parties shall have the sole and exclusive right to act on behalf
of a JV Entity with respect to any claim by a JV Entity against
any of the Sprint Parties or any of their Affiliates arising from
a breach by it of any representation, warranty, covenant or
agreement included in any Operative Agreement. The Sprint Parties
shall have the sole and exclusive right to act on behalf of a JV
Entity with respect to any claim by a JV Entity against any of the
FT/DT Parties or any of their Affiliates arising from a breach by
it of any representation, warranty, covenant or agreement included
in any Operative Agreement. Such power shall include, in each
case, the sole right, at the expense of the JV Entity, to
initiate, prosecute and settle any such claim, and such actions
will not require approval of the Governing Board of any JV Entity
or the Global Venture Board. Each of the Parties agrees to vote
their Venture Interests in any JV Entity and take such other
actions as may be necessary to give effect to this Section 15.10.
All such claims will be brought in accordance with Section 15.9
and Article 21.
Section 15.11. Sales by FT or DT to a Major Competitor of
Sprint.
(a) If and when FT is not subject to French Government
direction as to the issuance and sale of its voting stock, FT
shall not, for a period of ten years after the Closing Date,
knowingly issue or sell or cause to be issued or sold an amount of
voting securities to a Major Competitor of Sprint that would
result in such party owning 10% or more of FT's voting securities.
It is understood and agreed that the French Government may sell
shares of FT voting stock held by it to purchasers of its choosing
including to Major Competitors of Sprint. FT shall undertake a
reasonable inquiry in connection with any proposed sale of its
voting securities to ascertain whether or not a Major Competitor
of Sprint would, after giving effect to such purchase, own 10% or
more of FT's voting stock as described above. In addition, in
connection with any underwritten sale of voting stock by FT, FT
shall cause its underwriters to adopt reasonable procedures
designed to avoid sales to Major Competitors of Sprint in excess
of the amount permitted. For the purposes of this Section
15.11(a), written certification obtained by FT from the managing
or coordinating underwriter acting for FT in any offering by FT of
its voting securities that such underwriter has adopted, and
complied with, the reasonable procedures to be established
pursuant to the preceding sentence shall constitute conclusive
proof that FT shall not have knowingly issued or sold voting
securities in violation of this Section 15.11(a) in connection
with such underwritten sale, unless it is shown that FT had actual
knowledge to the contrary.
(b) DT shall not for a period of ten years after the
Closing Date, unless requested to do so by the German Government
or its trustee Bundesanstalt at a time when the German Government
Controls DT, knowingly issue or sell or cause to be sold (directly
or through underwriters acting for it) any of its voting
securities to a Major Competitor of Sprint that owns or that would
as a result of such issuance or sale own 10% or more of the voting
securities of DT. It is understood and agreed that the German
Government and its trustee Bundesanstalt may sell shares of DT
voting stock held by them to purchasers of their choosing
including to Major Competitors of Sprint. In connection with any
underwritten sale of its voting stock by DT, DT shall cause its
underwriters to adopt reasonable procedures designed to avoid
sales to Major Competitors of Sprint in excess of the amount
permitted. For the purposes of this Section 15.11(b), written
certification obtained by DT from the managing or coordinating
underwriter acting for DT in any offering by DT of its voting
securities that such underwriter has adopted, and complied with,
the reasonable procedures to be established pursuant to the
preceding sentence shall constitute conclusive proof that DT shall
not have knowingly issued or sold voting securities in violation
of this Section 15.11(b) in connection with such underwritten
sale, unless it is shown that DT had actual knowledge to the
contrary.
Section 15.12. Covenants of FT and DT Regarding Atlas.
(a) From and after the date of this Agreement through
the Closing Date, each of FT and DT shall (i) use its reasonable
efforts to obtain any Governmental Approvals or Third Party
Approvals required to be obtained in connection with the formation
of Atlas; (ii) make all filings with Governmental Authorities in
connection with the formation of Atlas, including filings
necessary to obtain the Governmental Approvals described or
referred to in Sections 13.1(a)(vi) and (viii) of this Agreement,
as promptly as practicable after the date of this Agreement and to
use its reasonable efforts to furnish or cause to be furnished, as
promptly as practicable, all information and documents reasonably
required by the relevant Governmental Authorities to obtain such
approvals and shall otherwise cooperate in all reasonable respects
with the applicable Governmental Authorities to obtain any
required Governmental Approvals in as expeditious a manner as
possible; and (iii) use its reasonable efforts to resolve such
objections, if any, as any Governmental Authority may assert with
respect to the formation of Atlas under Applicable Laws, including
requesting reconsideration (which may be initiated by the Party
affected thereby or requested by any other Party) of any adverse
ruling of any Governmental Authority and taking administrative
appeals, if available and reasonably likely to result in a
reversal of such adverse ruling. Sprint shall use reasonable
efforts to cooperate with FT and DT in connection with the
foregoing actions. If any Proceeding is instituted by any Person
challenging the formation of Atlas as violative of Applicable
Laws, each of FT and DT shall promptly consult with each other and
Sprint to determine the most appropriate response to such
Proceeding and shall cooperate in all reasonable respects with any
Party subject to any such Proceeding; provided that the decision
whether to initiate, and the control of, any Proceeding involving
any Party shall remain within the sole discretion of such Party.
The Parties acknowledge that nothing in this Section 15.12(a)
shall be construed to require any Party to agree to or comply with
any Burdensome Condition.
(b) Subject to the receipt of all necessary
Governmental Approvals, each of FT and DT will as soon as
reasonably practicable after the date hereof but in any event
prior to the Closing Date, (i) take all necessary reasonable
action to form Atlas, and (ii) cause Atlas to execute a
counterpart to this Agreement which counterpart shall acknowledge
the agreement of Atlas to be bound by the terms of this Agreement
as a "Party" and as an "FT/DT Party" and to comply with the
obligations imposed by this Agreement on Atlas.
(c) Except as provided in Sections 15.12(d), (e) and
(g), each of FT and DT agrees that it will implement the Atlas
Joint Venture Documents and contribute to Atlas the businesses and
assets which it is committed to contribute to Atlas in accordance
with the Atlas Joint Venture Documents (as reflected in the filing
made by Atlas with the EU on December 16, 1994).
(d) Notwithstanding Section 15.12(c), FT and DT shall
not be obligated to implement the Atlas Joint Venture Documents or
to contribute to Atlas the businesses and assets which either of
them is or they are committed to contribute to Atlas as required
by Section 15.12(c) to the extent that FT or DT is or FT and DT
are prevented from implementing the Atlas Joint Venture Documents
(or any portion thereof) or contributing to Atlas any of such
businesses or assets required by Section 15.12(c) (x) as a
condition or requirement to the granting by the EU of the
exemption described in Section 13.1(a)(vi), (y) as a condition or
requirement to obtaining any Governmental Approval described in
Section 13.1(a)(viii), or (z) as a condition or requirement to
obtaining any other Governmental Approval required for the
implementation of the Atlas Joint Venture Documents or the
contribution to Atlas of the businesses and assets required by
Section 15.12(c) (an "Unlisted Governmental Approval"); provided
that if the inability of FT or DT or FT and DT to implement the
Atlas Joint Venture Documents (or any portion thereof) or to
contribute to Atlas any of such businesses or assets required by
Section 15.12(c) constitutes a Burdensome Condition as described
in clause (a)(ii), (a)(iii) or (g)(ii) of the definition of
"Burdensome Condition" contained in Section 1.1 or would
constitute a Burdensome Condition if the Unlisted Governmental
Approval to which such Burdensome Condition relates was described
in Section 13.1(a)(viii), then notwithstanding the delivery by FT,
DT or Atlas of a notice pursuant to the first proviso in the
definition of "Burdensome Condition" contained in Section 1.1
stating that such condition or requirement shall not be deemed to
be a Burdensome Condition, the Sprint Parties shall have the right
to declare (i) in the case of any condition or requirement imposed
by the EU, that the EU has imposed a Burdensome Condition as a
condition or requirement to granting the exemption for the Atlas
Transactions described in Section 13.1(a)(vi), (ii) in the case of
any condition or requirement to obtaining any Governmental
Approval described in Section 13.1(a)(viii), that such
Governmental Authority has imposed a Burdensome Condition as a
condition or requirement to obtaining any such Governmental
Approval, and (iii) in the case of any condition or requirement to
obtaining any Unlisted Governmental Approval, that such
Governmental Authority has imposed a condition or requirement
which would constitute a Burdensome Condition if the Unlisted
Governmental Approval to which such condition or requirement
relates was described in Section 13.1(a)(viii) (and the Parties
agree that for purposes of the rights of the Sprint Parties under
this Section 15.12(d) any such condition or requirement described
in this clause (iii) to obtaining an Unlisted Governmental
Approval may constitute a Burdensome Condition to the same extent
as if such Unlisted Governmental Approval was described in Section
13.1(a)(viii)). In any such case, the Sprint Parties shall have
the right to advise the FT/DT Parties that the condition to the
obligation of the Sprint Parties to consummate the Transactions to
be consummated by the Sprint Parties at the Closing set forth in
Section 13.1(a)(vi) (in the case of a condition or requirement
described in clause (i) of the preceding sentence) or Section
13.1(a)(viii) (in the case of a condition or requirement described
in clause (ii) or (iii) of the preceding sentence) has not been
fulfilled to the satisfaction of the Sprint Parties.
(e) Notwithstanding Section 15.12(c), FT or DT may
voluntarily elect to refrain from implementing the Atlas Joint
Venture Documents (or any portion thereof) or contributing to
Atlas any of the businesses or assets which FT or DT is or FT and
DT are committed to contribute to Atlas as required by
Section 15.12(c) (notwithstanding that such implementation or
contribution is approved by all Governmental Authorities without
the imposition of a Burdensome Condition), if the failure to
implement the Atlas Joint Venture Documents (or such portion
thereof) or to contribute to Atlas any of such businesses or
assets, when considered together with the effect of the inability
of FT or DT or FT and DT to implement the Atlas Joint Venture
Documents (or any portion thereof) or to contribute to Atlas (or
of Atlas to hold) any of such businesses or assets as a condition
or requirement to the granting by the EU of the exemption
described in Section 13.1(a)(vi), as a condition or requirement to
obtaining any Governmental Approval described in Section
13.1(a)(viii), or as a condition or requirement to obtaining any
Unlisted Governmental Approval (and the Parties agree that for
purposes of the rights of the FT/DT Parties under this Section
15.12(e) any such condition or requirement to obtaining an
Unlisted Governmental Approval may constitute a Burdensome
Condition to the same extent as if such Unlisted Governmental
Approval was described in Section 13.1(a)(viii)), would not have
constituted a Burdensome Condition as described in clause (a)(ii),
(a)(iii) or (g)(ii) of the definition of "Burdensome Condition"
contained in Section 1.1 had FT and DT been prevented from
implementing the Atlas Joint Venture Documents (or such portion
thereof) or contributing to Atlas any such businesses or assets as
a condition or requirement to the granting by the EU of the
exemption described in Section 13.1(a)(vi), as a condition or
requirement to obtaining any Governmental Approval described in
Section 13.1(a)(viii), or as a condition or requirement to
obtaining any Unlisted Governmental Approval.
(f) For a period of five years from the Closing Date,
each of FT and DT shall not withdraw, remove or distribute, or
permit Atlas to withdraw, remove or distribute, in each case
whether through dividends, distributions, loans or otherwise, any
of the businesses or assets contributed to Atlas by FT and DT
(other than cash dividends paid out of current or retained
earnings accruing after the contribution date) unless, after
giving effect to such withdrawal, removal or distribution, Atlas
would have an adjusted net worth (determined on the basis that
assets contributed to Atlas have a book value equal to their fair
market value on the date of contribution) at least equal to the
lesser of (i) the adjusted net worth of Atlas (as so determined)
established upon completion of the implementation of the Atlas
Joint Venture Documents (or portion thereof) and the contribution
to Atlas of the businesses and assets as provided for in
Sections 15.12(c), (d) and (e) above (but not later than the
Closing Date) and (ii) ECU 1 billion.
(g) Notwithstanding the provisions of
Sections 15.12(c), (d), (e) and (f), FT and DT may take any action
which would otherwise be prohibited by any such Section if prior
to taking any such action FT and DT shall have provided to the
Sprint Parties a "keepwell" for Atlas which is substantially to
the effect of the "keepwell" provided by Sprint for Sprint Sub
pursuant to Section 15.14(a).
Section 15.13. Covenants of Sprint, FT and DT Regarding
Ownership of Venture Interests.
(a) Sprint agrees that for a period of ninety-nine (99)
years from the Closing Date (i) it shall at all times in the
aggregate own directly or indirectly through Wholly Owned
Subsidiaries or JV Entities Wholly Owned by the Parties in a
manner anticipated by the Tax Matters Agreement 100% of the
Venture Interests of each Regional Operating Group and the GBN
Group which are owned by the Sprint Parties or (ii) Sprint Sub or
any one or more other Qualified Venture Subsidiaries of Sprint
shall at all times in the aggregate own directly or indirectly
through Wholly Owned Subsidiaries or JV Entities Wholly Owned by
the Parties in a manner anticipated by the Tax Matters Agreement
100% of the Venture Interests of each Regional Operating Group and
the GBN Group which are owned by the Sprint Parties. Sprint also
agrees that for a period of ninety-nine (99) years from the
Closing Date it shall at all times in the aggregate own directly
or indirectly through Wholly Owned Subsidiaries at least 80% of
the economic interests in and voting power of Sprint Sub and each
other Qualified Venture Subsidiary of Sprint which owns Venture
Interests of a Regional Operating Group or the GBN Group, and
together with Passive Financial Institutions it shall at all times
in the aggregate own directly or indirectly through Wholly Owned
Subsidiaries 100% of the economic interests in and voting power of
Sprint Sub and each other Qualified Venture Subsidiary of Sprint
which holds Venture Interests of a Regional Operating Group or the
GBN Group.
(b) Each of FT and DT agrees that for a period of
ninety-nine (99) years from the Closing Date (i) it shall at all
times in the aggregate own directly or indirectly through its
Wholly Owned Subsidiaries or JV Entities Wholly Owned by the
Parties in a manner anticipated by the Tax Matters Agreement 50%
of the Venture Interests of each Regional Operating Group and the
GBN Group which are owned by the FT/DT Parties unless a closing
under Section 20.5(c) has occurred, or (ii) Atlas or any one or
more other Qualified Venture Subsidiaries of FT and DT shall at
all times in the aggregate own directly or indirectly through
Wholly Owned Subsidiaries or JV Entities Wholly Owned by the
Parties in a manner anticipated by the Tax Matters Agreement 100%
of the Venture Interests of each Regional Operating Group and the
GBN Group which are owned by the FT/DT Parties. Each of FT and DT
also agrees that for a period of ninety-nine (99) years from the
Closing Date it shall at all times in the aggregate own directly
or indirectly through its Wholly Owned Subsidiaries at least 40%
of the economic interests and voting power of Atlas and each other
Qualified Venture Subsidiary of FT and DT, as the case may be,
which holds Venture Interests of a Regional Operating Group or the
GBN Group, and (assuming compliance herewith by the other Party)
together with Passive Financial Institutions, FT and DT shall at
all times in the aggregate own directly or indirectly through
their respective Wholly Owned Subsidiaries 100% of the economic
interests in and voting power of Atlas and each other Qualified
Venture Subsidiary of FT and DT, as the case may be, which holds
Venture Interests of a Regional Operating Group or the GBN Group.
Section 15.14. Commitment of Sprint, FT and DT to the Joint
Venture.
(a) Sprint agrees that it will (i) ensure that Sprint
Sub and its personnel are as fully committed to the success of the
Joint Venture as is Sprint, (ii) devote sufficient resources to
Sprint Sub and each other Qualified Venture Subsidiary of Sprint
so that they can comply fully with their respective obligations
under this Agreement and under any other Operative Agreement, and
(iii) cause Sprint Sub and each such Qualified Venture Subsidiary
to fulfill their respective obligations under this Agreement and
any other Operative Agreement.
(b) FT agrees with Sprint that it will (i) ensure that
Atlas and its personnel are as fully committed to the success of
the Joint Venture as is FT, (ii) devote sufficient resources to
Atlas and each other Qualified Venture Subsidiary of FT so that
they can comply fully with their respective obligations under this
Agreement and their Shareholder Obligations under any other
Operative Agreement, and (iii) cause Atlas and each such Qualified
Venture Subsidiary to fulfill its obligations under this Agreement
and their Shareholder Obligations under any other Operative
Agreement.
(c) DT agrees with Sprint that it will (i) ensure that
Atlas and its personnel are as fully committed to the success of
the Joint Venture as is DT, (ii) devote sufficient resources to
Atlas and each other Qualified Venture Subsidiary of DT so that
they can comply fully with their respective obligations under this
Agreement and their Shareholder Obligations under any other
Operative Agreement, and (iii) cause Atlas and each such Qualified
Venture Subsidiary to fulfill its obligations under this Agreement
and their Shareholder Obligations under any other Operative
Agreement.
Section 15.15. Effect of Applicable Law. If any provision
contained in any Operative Agreement relating to a JV Entity is
inconsistent with, or prohibited by, the Applicable Laws of the
jurisdiction in which such JV Entity is formed, each of the
Parties agrees to take all reasonable steps necessary to modify
such provision in a manner which is as similar as possible in
terms and effect as the original provision and which preserves
substantially the intended purpose of the original provision, but
which is not inconsistent with, or prohibited by, the Applicable
Laws of the jurisdiction in which such JV Entity is formed.
Section 15.16. Ownership of Equity Interests in Sprint, FT
or DT. No JV Entity shall acquire or hold, directly or
indirectly, any equity interest in Sprint, FT or DT.
Section 15.17. Employee Matters Agreement. As soon as
reasonably practicable after the date hereof, the Parties shall
negotiate in good faith regarding the terms of the Employee
Matters Agreement which will provide for certain employee and
personnel matters in connection with the formation of the JV
Entities.
Section 15.18. Transfer Agreements. As soon as reasonably
practicable after the date hereof but prior to the Closing Date,
the Parties shall negotiate in good faith to reach mutual
agreement regarding definitive terms and conditions of the
Transfer Agreements, which in the case of the Master Transfer
Agreement shall contain, among other things, substantially the
terms set forth in the Master Transfer Agreement Term Sheet
attached as Exhibit 15.18 to this Agreement.
Section 15.19. Intellectual Property Agreements. As soon as
reasonably practicable after the date hereof but prior to the
Closing Date, the Parties shall negotiate in good faith to reach
mutual agreement regarding definitive terms and conditions of the
Intellectual Property Agreements, which shall contain
substantially the terms set forth in the term sheets attached as
Exhibit 15.19 to this Agreement.
Section 15.20. Miscellaneous Services Agreement. As
promptly as reasonably practicable after the date hereof but prior
to the Closing Date, the Parties shall negotiate in good faith to
reach mutual agreement regarding definitive terms and conditions
of the Miscellaneous Services Agreement, which shall contain
substantially the terms set forth in the term sheet attached as
Exhibit 15.20 to this Agreement.
Section 15.21. Equipment Housing and Facilities Management
Agreement. As promptly as reasonably practicable after the date
hereof but prior to the Closing Date, the Parties shall negotiate
in good faith to reach mutual agreement regarding definitive terms
and conditions of the Equipment Housing and Facilities Management
Agreement, which shall contain substantially the terms set forth
in the term sheet attached as Exhibit 15.21 to this Agreement.
Section 15.22. Facilities and Equipment Lease Agreement. As
promptly as reasonably practicable after the date hereof but prior
to the Closing Date, the Parties shall negotiate in good faith to
reach mutual agreement regarding definitive terms and conditions
of the Facilities and Equipment Lease Agreement, which shall
contain substantially the terms set forth in the term sheet
attached as Exhibit 15.22 to this Agreement.
Section 15.23. Global Backbone Network Services Agreement.
As promptly as reasonably practicable after the date hereof but
prior to the Closing Date, the Parties shall negotiate in good
faith to reach mutual agreement regarding definitive terms and
conditions of the Global Backbone Network Services Agreement,
which shall contain substantially the terms set forth in the term
sheet attached as Exhibit 15.23 to this Agreement.
Section 15.24. Operating Entities Services Agreement. As
promptly as reasonably practicable after the date hereof but prior
to the Closing Date, the Parties shall negotiate in good faith to
reach mutual agreement regarding definitive terms and conditions
of the Operating Entities Services Agreement, which shall contain
substantially the terms set forth in the term sheet attached as
Exhibit 15.24 to this Agreement.
Section 15.25. Route Management Agreement. As promptly as
reasonably practicable after the date hereof but prior to the
Closing Date, the Parties shall negotiate in good faith to reach
mutual agreement regarding definitive terms and conditions of the
Route Management Agreement, which shall contain substantially the
terms set forth in the term sheet attached as Exhibit 15.25 to
this Agreement.
Section 15.26. X.75 Interconnect Management Agreement. As
promptly as reasonably practicable after the date hereof but prior
to the Closing Date, the Parties shall negotiate in good faith to
reach mutual agreement regarding definitive terms and conditions
of the X.75 Interconnect Management Agreement, which shall contain
substantially the terms set forth in the term sheet attached as
Exhibit 15.26 to this Agreement.
Section 15.27. GBN Shareholders Agreement. As soon as
reasonably practicable after the date hereof but prior to the
Closing Date, the Parties shall negotiate in good faith to reach
mutual agreement regarding the definitive terms and conditions of
the GBN Shareholders Agreement.
Section 15.28. ROW Shareholders Agreement. As soon as
reasonably practicable after the date hereof but prior to the
Closing Date, the Parties shall negotiate in good faith to reach
mutual agreement regarding the definitive terms and conditions of
the ROW Shareholders Agreement.
Section 15.29. ROE Shareholders Agreement. As soon as
reasonably practicable after the date hereof but prior to the
Closing Date, the Parties shall negotiate in good faith to reach
mutual agreement regarding the definitive terms and conditions of
the ROE Shareholders Agreement.
Section 15.30. Constituent Documents. As soon as reasonably
practicable after the date hereof but prior to the Closing Date,
the Parties shall negotiate in good faith to reach mutual
agreement regarding the definitive terms and conditions of the
Constituent Documents.
Section 15.31. Joint Venture Confidentiality Agreement. As
soon as reasonably practicable after the date hereof but prior to
the Closing Date, the Parties shall negotiate in good faith to
reach mutual agreement regarding the definitive terms and
conditions of the Joint Venture Confidentiality Agreement which
shall govern the rights of the Parties and the Joint Venture with
respect to confidential information of the Parties.
Section 15.32. Atlas/ROE Services Agreement. As soon as
reasonably practicable after the date hereof but prior to the
Closing Date, the Parties shall negotiate in good faith to reach
mutual agreement regarding the definitive terms and conditions of
the Atlas/ROE Services Agreement, which shall contain
substantially the terms set forth in the term sheet attached as
Exhibit 15.32 to this Agreement.
Section 15.33. Tax Matters Agreement. As soon as reasonably
practicable after the date hereof but prior to the Closing Date,
the Parties shall negotiate in good faith to reach mutual
agreement regarding the definitive terms and conditions of the Tax
Matters Agreement.
Section 15.34. Plan Action/Special Matter Accounting
Principles. As soon as reasonably practicable after the date
hereof but prior to the Closing Date, the Parties shall negotiate
in good faith to reach mutual agreement regarding the Plan Action/
Special Matter Accounting Principles.
Section 15.35. Governmental Approval for Pre-Closing
Activities. Notwithstanding anything to the contrary contained
herein, the Parties acknowledge and agree that none of the
following actions shall be taken until such time as the approval
of the Bundeskartellamt required by Section 13.1(a)(iv) and any
other approval of a German Governmental Authority set forth in
Schedule 14.3(a)(iii) shall have been obtained as required
therein: (a) constituting the Global Venture Board, the Global
Venture Committee or the Global Venture Office; (b) forming any JV
Entity or electing the members or Chairman of the Governing Board
thereof; or (c) entering into any other Operative Agreement.
Section 15.36. Delayed Delivery of Schedules and Review
Period. Notwithstanding any other provision in this Agreement, it
is understood that this Agreement has been executed without
Schedule 14.2(b)(ii), Schedule 14.3(b)(ii), Schedule 14.4(c) and
Schedule 14.4(e) hereto and that the FT/DT Parties shall have
until five (5) Business Days after the Atlas Signing Date, unless
otherwise extended by the Sprint Parties, to deliver such
Schedules to the Sprint Parties under a certificate of the
appropriate officers of FT and DT stating that the attachments
constitute Schedule 14.2(b)(ii), Schedule 14.3(b)(ii), Schedule
14.4(c) and Schedule 14.4(e). Upon receipt of such certificate
and Schedules, the Sprint Parties shall have a period of ten (10)
Business Days in which to review and satisfy itself with respect
to the contents of such Schedules (the "Review Period"), and the
FT/DT Parties will cooperate fully with the Sprint Parties in
connection with their review of such Schedules during the Review
Period. If, prior to the expiration of the Review Period, the
Sprint Parties find any matter or item disclosed on such
Schedules, or which should have been disclosed and was not so
disclosed on such Schedules, in each case which was not disclosed
by the FT/DT Parties on any other disclosure schedule delivered by
the FT/DT Parties contemporaneously with the execution and
delivery of this Agreement, and the Sprint Parties reasonably
determine in good faith that any such item or items, individually
or in the aggregate, will materially and adversely affect the
ability of Atlas or any of its Affiliates to perform in any
material respect its obligations under this Agreement or any other
Operative Agreement, the Sprint Parties may terminate this
Agreement by giving to the FT/DT Parties the notice described in
Section 12.2(f) hereof. If the Sprint Parties do not deliver such
a notice prior to the expiration of the Review Period, then this
Section 15.36 and Section 12.2(f) shall be of no further force and
effect.
Section 15.37. Funding Principles. As soon as reasonably
practicable after the date hereof but prior to the Closing Date,
the Parties shall negotiate in good faith to reach mutual
agreement regarding the Funding Principles. The Parties agree
that the Funding Principles shall provide for the issuance of
equity interests in the JV Entities in respect of contributions of
capital of the JV Entity Shareholders based, when applicable, upon
the Per Share JV Entity Value of such JV Entity determined on the
basis of the Appraised Value of such JV Entity. The Parties
further agree that the Funding Principles will address matters
relating to (i) the timing of the determination of the Appraised
Value and Per Share JV Entity Value of the JV Entity and the
issuance of such equity interests in relation to the date of the
capital contributions made by the JV Entity Shareholders, (ii) the
effect of the issuance of such equity interests on the Percentage
Interests of the JV Entity Shareholders in such JV Entity,
(iii) adjustments for dividends, distributions or other capital
contributions made in respect of such JV Entity as a result of any
changes in the Percentage Interests in the JV Entity, and
(iv) such other matters as the Parties determine to be
appropriate. The Parties further agree that the Funding
Principles will reflect the Parties' desire for an appropriate
agreement regarding the issuance of equity interests by a JV
Entity to reflect capital contributions made by the JV Entity
Shareholders which is fair to the JV Entity Shareholders and which
does not impose any unnecessary expense or administrative burden
on the JV Entity.
Section 15.38. Approval of Sprint Continuing Directors.
Unless (i) the Fair Price Provisions have been deleted in their
entirety, (ii) the Fair Price Provisions have been modified so as
explicitly not to apply to any Class A Holder (as defined in the
Stockholders' Agreement) or they have been modified in a manner
reasonably satisfactory to the FT/DT Parties so as explicitly not
to apply to any transactions with any of FT, DT or any of their
"affiliates" or "associates" (as defined in the Fair Price
Provisions) contemplated by this Agreement and the other Operative
Agreements, (iii) the transaction in question is not a "Business
Combination" within the meaning of the Fair Price Provisions, or
(iv) the Class A Holder (as defined in the Stockholders'
Agreement) that is a party to the transaction, along with its
"affiliates" and "associates" (as so defined), is no longer an
"Interested Stockholder" or "affiliate" of an "Interested
Stockholder" within the meaning of the Fair Price Provisions,
neither Sprint nor any Affiliate of Sprint shall be permitted to
undertake any transaction or make any determination which pursuant
to this Agreement or any other Operative Agreement is expressly
subject to approval in accordance with this Section 15.38 unless a
majority of the Sprint Continuing Directors shall have first
approved such transaction or such determination and the relevant
obligation of Sprint or such Affiliate of Sprint in connection
therewith at a meeting of the Sprint Directors at which at least
seven Sprint Continuing Directors are present.
ARTICLE 16.
CERTAIN OPERATIONAL MATTERS
Section 16.1. Strategic and Business Plans.
(a) The Parties shall prepare the Closing Business
Plans for the Regional Operating Groups as soon as practicable
following the date of this Agreement but prior to the Closing
Date.
(b) The Global Venture Board shall be responsible for
the development on an annual basis of the Global Venture Strategic
Plan, which shall address the matters contained in Section 3.1(c)
and such other matters as the Global Venture Board shall
determine. The Global Venture Board is expressly empowered to
delegate to the Global Venture Committee and the Global Venture
Office the responsibility for the initial preparation of each
Global Venture Strategic Plan, subject to the final approval of
each such plan by the Global Venture Board. The funding
commitments of the Parties with respect to the Joint Venture shall
be contained in the Business Plans for the Regional Operating
Groups and the GBN Group. The Global Venture Office and the
Global Venture Committee shall cause to be submitted to the Global
Venture Board not later than September 1 in each year or such date
as may be otherwise agreed by the Global Venture Board, for
review, a proposed Global Venture Strategic Plan for the following
Fiscal Year (the "Proposed Strategic Plan"). After initial review
of the Proposed Strategic Plan by the Global Venture Board, the
Global Venture Office and the Global Venture Committee shall
prepare a revised Global Venture Strategic Plan which shall be
submitted to the Global Venture Board for review and approval by
November 1 of each year (or such other time as directed by the
Global Venture Board).
(c) Each Regional Operating Group and the GBN Group
shall be responsible for the development of a Business Plan on an
annual basis, which shall incorporate by reference the Global
Policies and the Global Venture Strategic Plan and demonstrate
conformity to the Global Policies and the Global Venture Strategic
Plan, and which shall contain: (i) projections and budgets with
respect to revenues, operating expenses, operating cash flows,
capital expenditures, financing, market priorities and the funding
commitments of the JV Entity Shareholders (provided that funding
commitments of Sprint or any Affiliate of Sprint as a JV Entity
Shareholder shall have been approved in accordance with Section
15.38 prior to the adoption of such Business Plan) in each case
for the following year (or such longer period with respect to
certain matters as may be agreed by the relevant Governing Board);
and (ii) a strategic plan covering strategic business issues to be
addressed during the three year period commencing with the
following year (or such longer period with respect to certain
matters as may be agreed by the relevant Governing Board). All
funding commitments of the relevant JV Entity Shareholders
included in a Business Plan adopted with respect to a particular
year shall only cover such year, unless expressly provided
otherwise in such Business Plan. The appropriate principal
officers of each Regional Operating Group and the GBN Group shall
cause to be submitted to their respective Governing Boards not
later than October 1 in each year or such date as may be otherwise
agreed by the respective Governing Board, for review, a proposed
Business Plan for the following Fiscal Year (the "Proposed
Business Plan"). After initial review of the Proposed Business
Plan by the relevant Governing Board, the appropriate principal
officers of each Regional Operating Group and the GBN Group shall
prepare a revised business plan which shall be submitted to the
relevant Governing Board for review and approval by December 1 of
each year (or such other time as directed by the relevant
Governing Board).
(d) No Business Plan shall be deemed an amendment of
any Operative Agreement. To the extent that any provision of the
Business Plan deals with the same matter as any Operative
Agreement, the provisions of such Operative Agreement shall
control. The principal officers of each JV Entity shall furnish
to each representative on its Governing Board any other budget or
plan that such JV Entity may prepare and any revisions of
previously furnished budgets or plans (including any Business
Plan) promptly upon preparation or revision of such budgets, plans
or revisions thereto.
(e) When a Proposed Business Plan for a Fiscal Year has
been approved as the Business Plan by the relevant Governing
Board, the Parties will use commercially reasonable efforts to
cause the officers and employees of such JV Entity to conduct the
operations of such JV Entity in accordance with such Business
Plan. Following such approval, proposals with respect to
alterations, modifications or other changes to any such Business
Plan may be made during such Fiscal Year, provided that the
failure to reach an agreement as to any such proposal shall not
constitute a Special Deadlock Matter. Following the end of each
Fiscal Year, the principal officers of each JV Entity will analyze
any variance between the actual and planned performance under the
Business Plan and report to its Governing Board the results of
such analysis.
(f) If a Deadlock at the Global Venture Board results
in the failure to adopt a Proposed Strategic Plan before the
beginning of the Fiscal Year to which such Proposed Strategic Plan
relates, subject to Section 8.5(j), the portion of the most recent
Global Venture Strategic Plan approved by the Global Venture Board
that relates to the same subject matter as to which such Deadlock
relates shall apply and otherwise the provisions of the Proposed
Strategic Plan as to which there is no Deadlock shall apply.
(g) If a Deadlock at a Governing Board results in the
failure to adopt a Proposed Business Plan for a Regional Operating
Group or the GBN Group before the beginning of the Fiscal Year to
which such Proposed Business Plan relates, subject to the
provisions of this Section 16.1(g) and Section 8.5(g)(3), the
portion of the then most recent Business Plan for such Regional
Operating Group or GBN Group approved by such Governing Board that
relates to the same subject matter as to which such Deadlock
relates shall apply and otherwise the provisions of the Proposed
Business Plan as to which there is no Deadlock shall apply. If no
funding commitment has been made with respect to such Fiscal Year
as to which a Proposed Business Plan has not been agreed upon, and
the Deadlock arises because a representative of any one or more JV
Entity Shareholders on the Governing Board did not approve a
proposed funding commitment (a "Funding Deadlock"), then the
funding commitments contained in the Business Plan for such
Regional Operating Group or the GBN Group for the prior Fiscal
Year shall apply to such Fiscal Year. In addition, if such
Deadlock is a Special Deadlock Matter being resolved pursuant to
Section 8.5, and by April 30 of such Fiscal Year (the "Funding
Extension Deadline"), all of the relevant JV Entity Shareholders
shall have given written notification to the Governing Board of
the relevant JV Entity of their binding commitment (if given by
all, and not less than all, of such JV Entity Shareholders, the
"Funding Extension Commitment") to extend such funding commitment
for the prior Fiscal Year until the end of the next succeeding
Fiscal Year, such funding commitment shall be so extended.
Section 16.2. Accounting Matters.
(a) The fiscal year of the Joint Venture and each of
the JV Entities shall be the Fiscal Year.
(b) Each of the JV Entities shall keep at its
respective principal place of business books and records typically
maintained by Persons engaged in similar businesses and which set
forth a true, accurate and complete account of the business and
affairs of such JV Entity, including a fair presentation of all
income, expenditures, assets and liabilities thereof. Such books
and records shall include all information reasonably necessary to
permit the preparation of financial statements required by
Applicable Law in accordance with United States GAAP, French GAAP,
German GAAP and GAAP of any jurisdiction where any JV Entity is
formed. Each JV Entity shall bear the cost of providing financial
and accounting information reasonably required by each of Sprint,
FT, DT and Atlas in the preparation of such Person's own financial
statements. Each of Sprint, FT, DT and Atlas and its authorized
representatives shall have the right at all reasonable times to
have access to, inspect, audit and copy the original books,
records, files, securities, vouchers, cancelled checks, employment
records, bank statements, bank deposit slips, bank
reconciliations, cash receipts and disbursement records, and other
documents of the JV Entities, which shall at all times be kept at
the respective principal offices of the JV Entities.
(c) The JV Entities shall engage the Certified Public
Accountants selected by the Global Venture Board pursuant to
Section 3.1(c), which shall be a single independent accounting
firm of international repute which is capable of auditing the
annual financial statements of the JV Entities for compliance with
required GAAP.
(d) Within thirty (30) days after the close of each
Fiscal Quarter, each JV Entity shall deliver to each Party (i) its
balance sheet as of the end of such period and (ii) statements of
its operating results and accumulated earnings and changes in its
cash flows for such Fiscal Quarter. Within sixty (60) days after
the close of each Fiscal Year of the Joint Venture and each JV
Entity, each JV Entity will deliver to the Parties (1) its balance
sheet as of the end of such Fiscal Year and (2) statements of its
income and accumulated earnings and changes in its cash flows for
such Fiscal Year, in each case certified by the Certified Public
Accountants. Reports will be provided in such form as shall be
necessary for each Party to prepare financial statements which it
is required to prepare under Applicable Law. Each Party shall
have the right to request audited financial statements in addition
to those provided for in this Section 16.2 or other special
audits; provided, however, that the Party making such request
shall bear the cost and expense of such audits.
Section 16.3. Export Control Laws. The Parties acknowledge
that the services to be sold by a JV Entity may be subject to
export controls on resales or transfers to other countries and
Persons, and such export controls may require Governmental
Approvals. No Party shall authorize any JV Entity to act in
violation of any export control or similar Applicable Law. Each
Party shall, and shall cause its respective Affiliates to, assist
the relevant JV Entity, as requested and where practicable, in
seeking Governmental Approvals for transactions subject to such
export control laws.
Section 16.4. Notification of Certain Matters. Each Party
shall use its reasonable efforts to cause each JV Entity, subject
to Applicable Law and to the extent practicable under the
circumstances, to give not less than seven days prior written
notice to the Parties of any filing with, or public comment to,
any Governmental Authority in the United States, France or Germany
by such JV Entity or any representative of such JV Entity in his
capacity as such on matters relating to the Joint Venture or the
Venture Business. Such notice shall set forth in reasonable
detail the subject matter and proposed content of such filing or
comment.
Section 16.5. Currency.
(a) All capital contributions to be made to, and
dividends to be paid by, a JV Entity pursuant to this Agreement or
any Shareholders Agreement shall be made in the currency or
currencies specified in the applicable Business Plan. The
Governing Board of a JV Entity may, by majority vote, determine
that a particular capital contribution made to, or dividend
payable by, such JV Entity shall be in a currency or currencies
other than the currency specified in such Business Plan, provided
that (i) such JV Entity shall inform its JV Entity Shareholders in
writing of such other currency or currencies at least thirty (30)
days prior to the date such capital contribution or dividend is to
be paid; and (ii) subject to Applicable Law, such other currency
or currencies shall be U.S. Dollars, Deutsche Marks, French Francs
or European Currency Units.
(b) Except as provided in Section 16.5(a), all payments
to be made under the other Operative Agreements will be payable in
the currencies provided for therein consistent with the Global
Policies.
(c) Except as provided in Section 16.5(a), whenever
this Agreement provides that an amount to be paid by one Party to
another Party will be payable in U.S. Dollars, the paying Party
may pay such amount in Deutsche Marks, French Francs or European
Currency Units by giving written notice to the payee Party at
least ten (10) days before the payment is to be made. Such notice
shall specify the other currency in which the payment shall be
made. On the date such payment is due, the paying Party shall pay
an amount of such other currency which would purchase the amount
of U.S. Dollars payable on such payment date if such other
currency was to be converted into U.S. Dollars at the closing rate
of exchange on the second Business Day immediately prior to the
date of payment as published in The Wall Street Journal (European
Edition) on such Business Day.
Section 16.6. Compliance with Laws. Each Party shall not
willfully and knowingly take, and shall use its reasonable efforts
to prevent the Joint Venture, the JV Entities, their Affiliates,
their officers or directors or anyone for whose acts or defaults
they may be vicariously liable or anyone acting on behalf of any
of them, from taking any action in connection with the Venture
Business which does not comply with the applicable ethical and
legal compliance policies of the Regional Operating Groups and the
GBN Group adopted by the Governing Boards in furtherance of
Section 3.1(c)(vii)(N).
Section 16.7. Employees of the Joint Venture. In order to
take appropriate advantage of the talents of the existing
employees of the Parties, the Joint Venture (as it expands
worldwide) shall afford a balanced opportunity for employment in
new job positions to current employees of the Parties, taking into
account the abilities of individuals, economics of hiring, and the
needs of the Venture Business.
Section 16.8. Affiliation Procedures.
(a) Upon implementation of a GBN Special Matter
pursuant to Section 8.1, a NAFTA Plan Action pursuant to Section
8.2 or an ROE Plan Action pursuant to Section 8.3, the GBN Special
Matter Subsidiary, the Sprint Plan Action Subsidiary or the Atlas
Plan Action Subsidiary, as the case may be (the "Affiliating
Subsidiary"), shall negotiate in good faith with the relevant JV
Entity to reach mutual agreement (subject, in the event that the
Affiliating Subsidiary is a Sprint Plan Action Subsidiary, to
approval of such agreement in accordance with Section 15.38)
regarding definitive terms and conditions of an Affiliation
Agreement meeting the requirements set forth in Section 16.8(c).
If the Affiliating Subsidiary and such JV Entity are not able to
reach an agreement as to the terms and conditions of the
Affiliation Agreement, the provisions of Section 16.8(d) shall
apply.
(b) Upon an Investment or Participation in a National
Operation or a Public Telephone Operator by a Party pursuant to
Section 10.3 (the "Affiliating Entity"), such Party shall use
commercially reasonable efforts to cause the Affiliating Entity to
negotiate in good faith with the relevant JV Entity to reach
mutual agreement regarding definitive terms and conditions of an
Affiliation Agreement meeting the requirements set forth in
Section 16.8(c), unless the Global Venture Board, in its sole and
absolute discretion pursuant to Section 3.1(c)(x), shall have not
approved the entering into of such Affiliation Agreement with such
Person. If Sprint or its Affiliate is making such Investment or
Participation, such Affiliation Agreement is subject to approval
in accordance with Section 15.38.
(c) Each Affiliation Agreement entered into pursuant to
this Section 16.8 shall, to the extent applicable, be consistent
with the principles contained in the Services Agreements, and
shall, as applicable, provide (i) that the Affiliating Subsidiary
or Affiliating Entity will become a distributor of the services of
the Joint Venture, (ii) that the Affiliating Subsidiary or
Affiliating Entity will employ network and information technology
systems compatible with those employed by the Global Backbone
Network and the Regional Operating Groups and (iii) that such
Affiliating Subsidiary or Affiliating Entity will route its
international traffic over the Global Backbone Network and the
networks of the Regional Operating Groups. In addition, each
Affiliation Agreement entered into by an Affiliating Subsidiary
shall also provide (x) that services Offered by the Affiliating
Subsidiary pursuant to any GBN Special Matter, NAFTA Plan Action
or ROE Plan Action shall be marketed and sold as services of the
Joint Venture and (y) that the Affiliating Subsidiary shall
conform to the Global Policies. Each Affiliation Agreement shall
contain such additional terms and conditions as are commercially
reasonable to the parties thereto.
(d) If an Affiliating Subsidiary is unable to reach
complete agreement with the relevant JV Entity with respect to the
terms and conditions of any such Affiliation Agreement, each of
the Affiliating Subsidiary and the relevant JV Entity shall
prepare a proposed Affiliation Agreement which it believes meets
the requirements contained in Section 16.8(c) (which, in the case
of an Affiliating Subsidiary of Sprint, shall have been approved
in accordance with Section 15.38 prior to the proposal of such
agreement) and incorporates all matters as to which such parties
have agreed. The Affiliating Subsidiary and the relevant JV
Entity shall enter into the Affiliation Agreement proposed by such
Affiliating Subsidiary and such Affiliating Subsidiary shall have
the right to begin operating immediately in compliance with the
terms of such Affiliation Agreement. Both proposed Affiliation
Agreements shall be submitted within a reasonable period of time
to an arbitration tribunal in accordance with the procedures set
forth in Article 21 by the relevant JV Entity. Such tribunal
shall be directed to select one of the two proposed Affiliation
Agreements, which selected Affiliation Agreement shall be entered
into by the Affiliating Subsidiary and the relevant JV Entity.
The arbitration tribunal shall be provided with the criteria set
forth in Section 16.8(c) and shall be directed to base its
selection on which of the proposed Affiliation Agreements conforms
most closely to the principles set forth in Section 16.8(c). This
Section 16.8(d) shall not apply to the Affiliation Agreements
referred to in Section 16.8(b).
ARTICLE 17.
CHANGE OF CONTROL; MAJOR COMPETITOR
Section 17.1. Sprint Change of Control.
(a) Upon the occurrence of a Sprint Change of Control and
until the Sprint Offer Rejection Date, the FT/DT Parties shall
immediately have the Tie-Breaking Vote as described in Section
18.1, subject to the termination of such Tie-Breaking Vote as
provided in Section 17.1(b).
(b) If a Sprint Change of Control occurs as a result of a
decision by the Board of Directors of Sprint to sell Control (as
defined in the Investment Agreement) of Sprint or not to oppose a
third party tender offer for Voting Securities (as defined in the
Investment Agreement) of Sprint representing more than 35% of the
Voting Power (as defined in the Investment Agreement) of Sprint,
and the transaction giving rise to the occurrence of such Change
of Control is abandoned, upon written notice from Sprint to FT, DT
and Atlas stating that such transaction has been abandoned, the
right of the FT/DT Parties to the Tie-Breaking Vote will be
terminated and the Tie-Breaking Vote will be dissolved.
Section 17.2. Sprint Offer Right.
(a) Upon the consummation of a transaction involving a
Sprint Change of Control, the Sprint Parties shall have the right
at any time, by written notice to the FT/DT Parties, to offer
(subject to approval of the exercise of such right in accordance
with Section 15.38) to sell to the FT/DT Parties all, but not less
than all, of the Sprint Venture Interests for cash at the
Appraised Value determined in accordance with Section 17.8. The
date of such offer shall be referred to herein as the "Sprint
Offer Date." Promptly following the Sprint Offer Date, the
Parties shall commence the appraisal process set forth in Section
17.8. Such offer shall be irrevocable for a period of ninety (90)
days following the receipt of the Value Opinion.
(b) The FT/DT Parties shall have ninety (90) days
following the receipt of the Value Opinion in which to notify the
Sprint Parties in writing of their agreement to purchase all of
the Sprint Venture Interests. A copy of such acceptance also
shall be given by the FT/DT Parties to the Global Venture Board.
If the FT/DT Parties fail to indicate their agreement within said
90-day period, they will be deemed to have elected not to purchase
the Sprint Venture Interests, and the day following the date of
expiration of such period without an election by the FT/DT Parties
to purchase the Sprint Venture Interests shall be the "Sprint
Offer Rejection Date."
(c) The closing (or abandonment) of the purchase and
sale of the Sprint Venture Interests shall occur in accordance
with Sections 17.6 and 17.7.
Section 17.3. Sprint Put Right.
(a) During the two-year period commencing on the fifth
anniversary of the consummation of a transaction involving a
Sprint Change of Control, the Sprint Parties shall have the right
to require the FT/DT Parties to purchase (subject to approval of
the exercise of such right in accordance with Section 15.38) all,
but not less than all, of the Sprint Venture Interests for cash at
the Appraised Value determined in accordance with Section 17.8.
Such right shall be exercised by delivery of a written notice by
the Sprint Parties to the FT/DT Parties electing to exercise their
right under this Section 17.3(a). The date of such notice is
referred to herein as the "Sprint Put Notice Date." Promptly
following the Sprint Put Notice Date, the Parties shall commence
the appraisal process set forth in Section 17.8.
(b) The closing (or abandonment) of the purchase and
sale of the Sprint Venture Interests shall occur in accordance
with Sections 17.6 and 17.7.
Section 17.4. Sprint Transaction With Major Competitor of
FT/DT. For ten (10) years after the Closing Date, if Sprint
undertakes a Strategic Merger which results in a Major Competitor
of FT/DT holding upon consummation of such transaction 20% or more
of the Voting Power (as defined in the Investment Agreement) of
Sprint and such Major Competitor has been granted rights by Sprint
equivalent or superior to FT and DT's Minority Rights, then in
such circumstances, for a period of five years following the date
of the closing of such transaction, the FT/DT Parties shall
immediately have the Tie-Breaking Vote as described in Section
18.1. Following the fifth anniversary of the date of the closing
of such transaction, the FT/DT Parties may, by delivering written
notice to the Sprint Parties within sixty (60) days after such
anniversary, elect to transfer all, but not less than all, of
their Venture Interests free of the restrictions set forth in
clauses (i) and (iii) of Section 19.1, but subject to the other
provisions of Section 19.1 and the provisions of Sections 19.3 and
20.11.
Section 17.5. Atlas Transaction With Major Competitor of
Sprint. If within five years after the Closing Date, Atlas shall
sell all or a substantial part of its telecommunications assets
used to provide services to the Joint Venture to a Person which is
a Major Competitor of Sprint or to an Affiliate of any such Major
Competitor, then for a period of five years following the date of
closing of such transaction, the Sprint Parties shall immediately
have the Tie-Breaking Vote as described in Section 18.1.
Following the fifth anniversary of the date of the closing of such
transaction, the Sprint Parties may, by delivering written notice
to the FT/DT Parties within sixty (60) days after such
anniversary, elect to transfer (subject to approval of such
election in accordance with Section 15.38) all, but not less than
all, of their Venture Interests free of the restrictions set forth
in clauses (i) and (iii) of Section 19.1, but subject to the other
provisions of Section 19.1 and the provisions of Sections 19.3 and
20.11.
Section 17.6. Effect of Failure to Obtain Governmental
Approvals. Each of the Parties shall use its reasonable efforts
to obtain all Governmental Approvals required to effect any
purchase of Venture Interests pursuant to Section 17.2 or 17.3.
If the required Governmental Approvals have not been received at
the time the closing is scheduled to occur pursuant to Section
17.2 or 17.3, or any such Governmental Approvals with respect to
the transaction have imposed any Burdensome Condition, the closing
shall be postponed until no later than the second anniversary of
the Sprint Offer Date or the Sprint Put Notice Date, as the case
may be. During such period, the FT/DT Parties may assign their
rights to purchase the applicable Venture Interests to a Permitted
Designee which shall agree to purchase such interests. If by the
end of such period, all Governmental Approvals required to
consummate such transaction with the FT/DT Parties or a Permitted
Designee thereof have not been obtained or any such Governmental
Approvals continue to impose any Burdensome Condition, the
transfer contemplated by Section 17.2 or 17.3, as the case may be,
shall be abandoned and the Sprint Parties may declare (subject to
approval of such declaration in accordance with Section 15.38) an
Impasse unless the FT/DT Parties relinquish the Tie-Breaking Vote.
Section 17.7. Closing of Purchase of Venture Interests. At
the closing of any purchase and sale of Venture Interests pursuant
to Section 17.2, 17.3, 17.4, 17.5, 19.3, 20.5, 20.7 or 20.11, (i)
the Related Party Group transferring such Venture Interests (the
"Transferring Party") shall transfer, assign and deliver to the
Person purchasing such Venture Interests (the "Non-Transferring
Party") the certificates or other documents evidencing the Venture
Interests being purchased, duly endorsed for transfer, together
with such assignments separate from any such certificate and other
documents or instruments reasonably required by counsel for the
Non-Transferring Party to consummate such purchase, and (ii) the
Non-Transferring Party shall pay the purchase price in cash. In
addition, at the closing of such purchase and sale, (x) the
Transferring Party shall deliver to the Non-Transferring Party an
executed, written representation, in form and substance reasonably
satisfactory to legal counsel for the Non-Transferring Party, that
the Transferring Party owns the Venture Interests free and clear
of all Liens and that upon the delivery of the Venture Interests,
the Transferring Party shall have transferred all of its right,
title and interest in the Venture Interests, and (y) the Non-
Transferring Party shall deliver to the Transferring Party such
investment representations as may be reasonably requested for
securities law purposes.
Section 17.8. Determination of Appraised Value.
(a) For purposes of this Agreement, the "Appraised
Value" of a business or the interest of a Person in a business
shall mean the total amount in U.S. Dollars, determined, unless
otherwise specified herein, as of the end of the month immediately
preceding the date on which the appraisal is made by an investment
banking firm selected in accordance with Section 17.8(b), which a
willing buyer would pay to a willing seller for such business or
interest, taking into account assumed liabilities, determined as a
whole (and, in the case of a business, as a going concern) in an
arms' length negotiated transaction without undue time
constraints. In determining the Appraised Value, no discounts for
lack of control or lack of marketability shall be applied.
(b) The Appraised Value shall be determined by an
investment banking firm of international standing jointly selected
by the selling party and the purchasing party. If the selling
party and the purchasing party are unable to mutually agree on an
investment banking firm, each shall choose an investment banking
firm and the two firms so chosen shall, in good faith, select a
third investment banking firm of international standing. The
three firms so appointed shall jointly determine the Appraised
Value, provided that if such firms are unable to agree upon the
Appraised Value, each firm shall individually propose an Appraised
Value, and the Appraised Value shall be deemed to be the average
of the two proposed values which are closest together. If either
the selling party or the purchasing party fails to select an
investment banking firm within ten (10) Business Days of receipt
of a notice specifying such failure from such other party, such
other party may select an investment banking firm in its sole
discretion to determine the Appraised Value, which determination
shall be final and binding on the parties. The parties shall
instruct each investment banking firm so retained to deliver a
written opinion (the "Value Opinion") as to the Appraised Value to
such parties within sixty (60) days following the selection of
such firm. For purposes of this Section 17.8(b), (i) in the case
of the issuance of nonvoting equity interests pursuant to Section
8.2(c), Sprint Sub shall be considered the "purchasing party" and
Atlas shall be considered the "selling party," and (ii) in the
case of the issuance of nonvoting equity interests pursuant to
Section 8.3(c), Atlas shall be considered the "purchasing party"
and Sprint Sub shall be considered the "selling party." The cost
of determining the Appraised Value, including the fees and
expenses of such investment banking firms, shall, unless otherwise
agreed by the Parties, be borne equally by the selling party and
the purchasing party, except that in the case of the transfer of
Venture Interests such costs shall be borne by the selling party
and the purchasing party in proportion to the Appraised Value of
their respective Venture Interests; provided that if the Appraised
Value of the Joint Venture or a JV Entity is being determined
because of a Funding Default or a Material Non-Funding Default,
then the Party which committed such Funding Default or Material
Non-Funding Default shall be responsible for all of the costs of
determining such Appraised Value, including the fees and expenses
of such investment banking firms; and provided, further, that if
the Appraised Value of the JV Entity is being determined in
connection with the issuance of nonvoting equity interests
pursuant to Section 8.2(c) or 8.3(c), then the purchasing party
shall be responsible for all of the costs of determining such
Appraised Value, including the fees and expenses of such
investment banking firms (subject to Section 8.2(d)(B) or
8.3(d)(B), respectively).
ARTICLE 18.
TIE-BREAKING VOTE
Section 18.1. Tie-Breaking Vote.
(a) Notwithstanding anything in this Agreement or any
Shareholders Agreement to the contrary, but subject to Section
18.2, when a Tie-Breaking Party has the "Tie-Breaking Vote"
hereunder, the following provisions shall apply during the
applicable period:
(i) With respect to the Global Venture Board, the Global
Venture Committee, the Global Venture Office, the GBN
Board, the ROW Board and the ROE Board: (A) each Board
shall consist of six voting members; (B) the Tie-
Breaking Party shall be entitled to designate four
voting members and the Non-Tie Breaking Party shall be
entitled to designate two voting members to each such
Board; (C) the quorum for a meeting of each such Board
will be the presence only of at least one voting member
designated by the Tie-Breaking Party; and (D) except as
provided in clauses (ii), (iii), (iv), (v) and (vi)
below, all matters brought before each such Board shall
be decided by the majority vote of the voting members
present at a duly convened meeting of each such Board.
(ii) Notwithstanding clause (i) above, a unanimous vote of
the Global Venture Board shall be required with respect
to the matters set forth in clauses (iv), (ix) and (x)
of Section 3.1(c) and any other matter which is
designated in any other Operative Agreement as a matter
which must be approved by a unanimous vote of the
representatives on the Global Venture Board (without
regard to the Tie-Breaking Vote).
(iii) Notwithstanding clause (i) above, a unanimous vote of
the GBN Board shall be required with respect to the
matters set forth in clauses (b), (c), (d), (e), (f),
(g), (h), (i), (j) and (k) of Section 6.4 (except in the
case of clauses (c) and (e) to the extent such matters
are strictly necessary to implement a Plan Action and
except in the case of clause (f) to the extent the
purpose of such decision is to enhance or maintain the
seamless nature of the telecommunications services
provided by the Joint Venture) and any other matter
which is designated in any other Operative Agreement as
a matter which must be approved by a unanimous vote of
the representatives on the GBN Board (without regard to
the Tie-Breaking Vote).
(iv) Notwithstanding clause (i) above, a unanimous vote of
the ROW Board and the ROE Board shall be required with
respect to the matters set forth in clauses (b), (c),
(d), (e), (f), (g), (h), (i), (j), (k) and (l) of
Section 4.4 and Section 5.4 respectively and clause (m)
of Section 4.4 (except in the case of clauses (c) and
(e) to the extent such matters are strictly necessary to
implement a Plan Action, and except in the case of
clause (f) to the extent the purpose of such decision is
to enhance or maintain the seamless nature of the
telecommunications services provided by the Joint
Venture) and any other matter which is designated in any
other Operative Agreement as a matter which must be
approved by a unanimous vote of the representatives on
the ROW Board or the ROE Board (without regard to the
Tie-Breaking Vote).
(v) Notwithstanding clause (i) above, if the Tie-Breaking
Vote results from a Funding Default by a Party, until
the end of the Second Cure Period no action shall be
taken by the Global Venture Board to modify any of the
Global Policies, to create new global functions, to
delete existing global functions or change the
allocation of global functions pursuant to Section 3.2,
to change the delegation of any authority or
responsibility of the Global Venture Office, the
Strategic Planning Committee or the Senior Strategic
Planning Officer, or to make any change in the
governance structure of the Joint Venture permitted by
Section 3.10(b), unless such action is taken by a
unanimous vote of all members of the Global Venture
Board at a meeting at which all members are present in
person or by proxy.
(vi) Notwithstanding clause (i) above, if the Tie-Breaking
Vote results from the occurrence of a Sprint Change of
Control described in Section 17.1(b), until the earlier
of (A) the first anniversary of the date on which such
Tie-Breaking Vote is initiated or (B) the date such
Change of Control transaction is consummated, no action
shall be taken by the Global Venture Board to modify any
of the Global Policies, to create new global functions,
to delete existing global functions or change the
allocation of global functions pursuant to Section 3.2,
or to make any change in the governance structure of the
Joint Venture permitted by Section 3.10(b), unless such
action is taken by a unanimous vote of all members of
the Global Venture Board at a meeting at which all
members are present in person or by proxy.
(b) Each Party shall take all actions necessary to
implement immediately the provisions of this Section 18.1 upon the
occurrence of an event which gives rise to a Tie-Breaking Vote,
including: (i) voting its Venture Interests in each JV Entity in
accordance with the resolutions adopted by the Governing Board of
each JV Entity and as appropriate to give effect to the provisions
of this Section 18.1; and (ii) causing the resignation of such
Party's representatives on the Boards as appropriate. Likewise,
following the termination of a Tie-Breaking Vote, each Party shall
take all actions necessary to implement immediately such
termination, including causing the resignation of such Party's
representatives on the Boards as appropriate and voting its equity
interests in the JV Entities as appropriate to give effect to such
termination. Following the termination of a Tie-Breaking Vote
initiated pursuant to Section 17.1(b), 17.4 or 17.5, (1) any and
all changes in the delegations of authority and responsibility of
the Global Venture Office, the Strategic Planning Committee and
the Senior Strategic Planning Officer, (2) any and all changes in
the allocation of global and regional functions pursuant to
Section 3.2 by the Global Venture Board, and (3) any and all
changes in the governance structure of the Joint Venture pursuant
to Section 3.10(b) effected during such time as such Tie-Breaking
Vote was in effect shall revert to their status immediately prior
to such Tie-Breaking Vote going into effect (except for any such
change which was approved by the unanimous vote of all members of
the Global Venture Board at a meeting at which all members were
present in person or by proxy) (x) in the case of a Tie-Breaking
Vote initiated pursuant to Section 17.4 or 17.5, as promptly as
practicable after the termination of such Tie-Breaking Vote
consistent with the orderly conduct of the business of the Joint
Venture, but in any event not later than one year after the
termination of such Tie-Breaking Vote, or (y) in the case of a
Tie-Breaking Vote initiated pursuant to Section 17.1(b), as
promptly as practicable after the termination of such Tie-Breaking
Vote, but in any event not later than sixty (60) days after the
termination of such Tie-Breaking Vote.
Section 18.2. GBN Special Matters, NAFTA Plan Actions and
ROE Plan Actions. Upon the occurrence of an event which gives
rise to the Tie-Breaking Vote, the Tie-Breaking Party shall not
have the right to modify, amend or rescind any previously declared
GBN Special Matter, NAFTA Plan Action or ROE Plan Action, and the
rights and obligations of the Parties shall continue in full force
and effect with respect to such GBN Special Matter, NAFTA Plan
Action and ROE Plan Action, as the case may be, while such
Tie-Breaking Vote is in effect.
ARTICLE 19.
TRANSFERS OF VENTURE INTERESTS
Section 19.1. Transfer Prohibitions. No Party shall make
any sale, contribution, exchange, assignment, transfer, pledge,
hypothecation or other disposition of any Venture Interest
(i) during the first ten (10) years after the Closing Date without
the prior written consent of the other Parties, except for
transfers permitted by Sections 8.1, 8.2, 8.3, 17.2, 17.3, 17.4,
17.5, 19.2, 20.5, 20.7 and 20.11, (ii) if such Party has committed
and during the continuance of a Funding Default or a Material
Non-Funding Default unless such transfer is pursuant to Section
20.5 or 20.11, or (iii) to a Major Competitor of FT/DT, in the
case of the Sprint Parties, or to a Major Competitor of Sprint, in
the case of the FT/DT Parties unless such transfer is made
pursuant to and in accordance with Section 17.4 or 17.5. In
addition, no sale, contribution, exchange, assignment, transfer,
pledge, hypothecation or other disposition other than a sale or
other disposition of all of a Party's right, title and interest in
and to its Venture Interests in a Regional Operating Group or the
GBN Group shall be permitted under this Agreement. Any attempted
or actual sale, contribution, exchange, assignment, transfer,
pledge, hypothecation or other disposition by a Party of Venture
Interests in violation of this Agreement shall be of no effect and
null and void.
Section 19.2. Permitted Transfers. Without the consent of
each other Party, upon thirty (30) days prior notice to the other
Parties, subject to Section 15.13, the FT/DT Parties or the Sprint
Parties may from time to time transfer all, but not less than all,
of their Venture Interests relating to one or more Regional
Operating Groups or the GBN Group (1) to a Qualified Venture
Subsidiary of such Parties or to one or more Wholly Owned
Subsidiaries of such a Qualified Venture Subsidiary or (2)(a) in
the case of the FT/DT Parties, (A) to FT or one or more of its
Wholly Owned Subsidiaries; and (B) to DT or one or more of its
Wholly Owned Subsidiaries, or (b) in the case of the Sprint
Parties, to Sprint or one or more of its Wholly Owned
Subsidiaries. Any transferee which receives Venture Interests
from a Party in accordance with this Section 19.2 is referred to
herein as a "Permitted Transferee." Notwithstanding the
foregoing, a Party may transfer Venture Interests to a Permitted
Transferee only if (i) to evidence more fully that such Venture
Interests remain subject to this Agreement, a Permitted Transferee
that has not previously executed this Agreement shall acknowledge
its agreement to be bound by the terms of this Agreement and the
other Operative Agreements to the same extent as the Party that is
transferring such Venture Interests is bound by executing copies
of such agreements, and (ii) the Permitted Transferee agrees in
writing to reassign its Venture Interests to such Party (x) in the
case of a transfer to a Qualified Venture Subsidiary, in the event
that such Permitted Transferee no longer qualifies as a Qualified
Venture Subsidiary, (y) in the case of a transfer to a Wholly
Owned Subsidiary of FT or DT, in the event that such Permitted
Transferee no longer qualifies as a Wholly Owned Subsidiary of FT
or DT, as the case may be, or (z) in the case of a transfer to a
Wholly Owned Subsidiary of a Qualified Venture Subsidiary, in the
event that such Permitted Transferee no longer qualifies as a
Wholly Owned Subsidiary of such Qualified Venture Subsidiary or
such Qualified Venture Subsidiary no longer qualifies as a
Qualified Venture Subsidiary. Until such conditions have been
satisfied, no JV Entity shall have any authority or obligation to
register any Venture Interests in the name of the Permitted
Transferee or to recognize the Permitted Transferee as having any
rights to such Venture Interests. Upon satisfaction of such
conditions, the Permitted Transferee shall succeed to all of the
rights of the Party transferring such Venture Interests under this
Agreement and the other Operative Agreements, provided that such
Party shall remain liable for all of its obligations under this
Agreement and the other Operative Agreements.
Section 19.3. Transfers Subject to Right of First Refusal.
Except for transfers permitted by Sections 8.1, 8.2, 8.3, 17.2,
17.3, 19.2, 20.5, 20.7 and 20.11 and transfers to which the other
Parties have consented in writing, all transfers of Venture
Interests permitted by Section 19.1 shall be subject to a right of
first refusal as follows:
(a) No Related Party Group (the "Selling Party") shall
make a transfer of any Venture Interest pursuant to this
Section 19.3 without first giving notice (the date of such notice
being hereinafter referred to as the "Offering Date") to the other
Related Party Group (the "Offeree Party") and to the Global
Venture Board; provided that neither Sprint nor any of its
Affiliates shall be permitted to give such notice (or make such
transfer) unless it shall have obtained approval in accordance
with Section 15.38 to sell to the Offeree Party all but not less
than all of the Affected Venture Interests at the time and upon
the terms set forth in such notice. Said notice shall contain a
full description of the proposed transfer, including information
of the type of transfer, the Venture Interests which it proposes
to transfer (which shall in all cases be all of the Venture
Interests owned by the Selling Party) (the "Affected Venture
Interests"), the terms of the proposed transfer (which shall in
all cases contemplate that the purchase price be paid entirely in
cash), and the identity of the proposed transferee (which shall be
a Qualified Venture Purchaser) (the "Transferee Party"). Any
notice given pursuant to this Section 19.3(a) shall constitute an
offer (the "First Offer") by the Selling Party to sell to the
Offeree Party all, but not less than all, of the Affected Venture
Interests at the time and upon the terms set forth in the notice
delivered pursuant to this Section 19.3(a). The First Offer shall
be irrevocable for a period of ninety (90) days following the
Offering Date.
(b) The Offeree Party shall have ninety (90) days after
the Offering Date in which to indicate (subject, in the event that
Sprint or its Affiliate is the Offeree Party, to approval of such
indication in accordance with Section 15.38) to the Selling Party
its agreement to purchase all of the Affected Venture Interests.
A copy of such acceptance shall also be given by the Offeree Party
to the Global Venture Board. If the Offeree Party fails to
indicate its agreement within said 90-day period, it will be
deemed to have elected not to purchase any of the Affected Venture
Interests.
(c) If the Offeree Party accepts the First Offer within
the ninety (90) days provided therefor, each of the Parties shall
use its reasonable efforts to obtain all Governmental Approvals
required to effect the purchase of the Affected Venture Interests
by the Offeree Party pursuant to Section 19.3(b). Unless the
Parties have failed to receive all required Governmental Approvals
or any of the Governmental Approvals provided with respect to the
transaction have imposed a Burdensome Condition, the purchase of
Affected Venture Interests agreed to by the Offeree Party pursuant
to Section 19.3(b) shall be closed and consummated in the
principal office of the Offeree Party on or before the one hundred
fiftieth (150th) day following the Offering Date. At the closing,
the Selling Party and the Offeree Party shall make the deliveries
specified in Section 17.7. If the required Governmental Approvals
have not been received at the time the closing is scheduled to
occur hereunder or any of the Governmental Approvals provided with
respect to the transaction have imposed a Burdensome Condition,
the closing shall be postponed until no later than one hundred
eighty (180) days following the date of such originally scheduled
closing. If by such time all Governmental Approvals required to
consummate such transaction have not been obtained or any of the
Governmental Approvals provided with respect to the transaction
have imposed a Burdensome Condition or if such transaction is not
consummated for any other reason, such transaction shall be
abandoned and the Affected Venture Interests shall again be
subject to the provisions of this Agreement as though the First
Offer as to such Affected Venture Interests had not been
previously given, provided that if the Selling Party is exercising
its right to transfer its Venture Interests pursuant to
Section 17.4 or Section 17.5, such Party shall be permitted to
either transfer such Venture Interests to the original Transferee
Party pursuant to Section 19.3(d) or declare an Impasse.
(d) If the First Offer is not accepted by the Offeree
Party pursuant to Section 19.3(b), the Selling Party shall be free
to make the transfer; provided, however, that (i) such transfer
shall be in strict accordance with the terms of the proposed
transfer described in the offer delivered to the Offeree Party
pursuant to Section 19.3(a), and (ii) except as otherwise provided
in this Section 19.3(d), such transfer shall be consummated within
one hundred fifty (150) days after the Offering Date. Each of the
Selling Party and the Transferee Party shall use its reasonable
efforts to obtain all Governmental Approvals required to effect
the purchase and sale of Venture Interests pursuant to this
Section 19.3(d). Unless such Persons have failed to receive all
required Governmental Approvals or any of the Governmental
Approvals provided with respect to the transaction have imposed a
Burdensome Condition, such purchase of Affected Venture Interests
agreed to by the Transferee Party shall be closed and consummated
on or before the one hundred fiftieth (150th) day following the
Offering Date. At the closing, the Selling Party and the
Transferee Party shall make the deliveries specified in Section
17.7. If the required Governmental Approvals have not been
received at the time the closing is scheduled to occur hereunder
or any of the Governmental Approvals provided with respect to the
transaction have imposed a Burdensome Condition, the closing shall
be postponed until no later than one hundred eighty (180) days
following the date of such originally scheduled closing. If by
such time all Governmental Approvals required to consummate such
transaction have not been obtained or any of the Governmental
Approvals provided with respect to the transaction have imposed a
Burdensome Condition or if such transaction has not been
consummated for any other reason, the transaction shall not be
consummated and the Affected Venture Interests shall again be
subject to the provisions of this Agreement as though the First
Offer as to such Affected Venture Interests had not previously
been given, provided that if the Selling Party is exercising its
rights to transfer its Venture Interests pursuant to Section 17.4
or 17.5, such Party shall be permitted to declare an Impasse.
(e) Any Venture Interests transferred pursuant to
Section 19.3(d) shall remain subject to the terms of this
Agreement, and the Transferee Party shall be deemed to be a
"Party" for all purposes of this Agreement and the other Operative
Agreements to the same extent to which the Selling Party would be
subject if not for such sale. To evidence more fully that such
Venture Interests remain subject to this Agreement, any such
Transferee Party shall acknowledge its agreement to be bound by
the terms of this Agreement and the other applicable Operative
Agreements to the same extent as the Selling Party is bound by
executing copies of such agreements. Until such conditions have
been satisfied, no JV Entity shall have any authority or
obligation to register any Venture Interests in the name of the
Transferee Party or to recognize the Transferee Party as having
any rights to such Venture Interests. Upon satisfaction of such
conditions, the Transferee Party shall succeed to all of the
rights of the Selling Party under this Agreement and the other
Operative Agreements.
(f) Upon the closing of any purchase and sale of
Venture Interests pursuant to Section 19.3(d), the provisions of
Article 22 shall govern the rights and obligations of the Parties
and the Transferee Party.
(g) The Offeree Party may (subject, in the event that
Sprint or its Affiliate is the Offeree Party, to approval in
accordance with Section 15.38) assign all or any part of its
rights to acquire the Selling Party's Venture Interests to one or
more Permitted Designees.
ARTICLE 20.
TERM AND TERMINATION; DEFAULT
Section 20.1. Term of JV Entities. Each JV Entity shall
continue without interruption until it is dissolved and terminated
pursuant to the terms of the Operative Agreements or Constituent
Documents or pursuant to Applicable Law.
Section 20.2. Tie-Breaking Vote Upon Certain Defaults, Etc.
(a) Upon the occurrence of a Funding Default by any of
the Sprint Parties, the FT/DT Parties shall have the Tie-Breaking
Vote as described in Section 18.1, subject to Section 11.4(c).
Upon the occurrence of a Funding Default by any of the FT/DT
Parties, the Sprint Parties shall have the Tie-Breaking Vote as
described in Section 18.1, subject to Sections 11.4(c) and
11.4(g).
(b) If a duly constituted arbitral tribunal issues a
Partial Award pursuant to Section 21.6 in which such tribunal
decides that a Material Non-Funding Breach has occurred, the
Breaching Party shall immediately (i) cease the violative conduct
which gave rise to such tribunal's determination that a Material
Non-Funding Breach had occurred and (ii) comply in all material
respects with the terms and conditions specified in the Partial
Award (including complying with Section 15.9 in respect of a
Material Non-Funding Breach). If a duly constituted arbitral
tribunal makes a Material Non-Funding Breach Finding that a
Breaching Party has failed to comply with clause (i) or (ii) of
the preceding sentence, a material non-funding default ("Material
Non-Funding Default") shall occur; provided that if the Material
Non-Funding Breach is the result of a breach of Section 15.11, a
Material Non-Funding Default will occur on the date on which such
tribunal issues the Partial Award to such effect.
(c) In addition to the circumstances described in
Section 20.2(b) in which a Material Non-Funding Default will
occur, a Material Non-Funding Default also will occur if:
(i) FT or DT or any of their respective Qualified
Subsidiaries (as defined in the Investment Agreement) breaches its
obligation under the Investment Agreement to consummate the
purchase of any shares of capital stock of Sprint contemplated by
the Investment Agreement to be purchased (other than in connection
with the Optional Shares Closing (as so defined)); or
(ii) unless cured within any applicable cure periods
specified in Section 7(b) of the Class A Provisions (as defined in
the Standstill Agreement), FT, DT or any of their respective
Affiliates (as so defined), except unintentionally or through
inadvertence, and except as otherwise not prohibited by the
Standstill Agreement:
(x) except as permitted by Section 2.3 of the
Standstill Agreement, during the Initial Standstill Period
(as so defined) acquires Beneficial Ownership (as so
defined), directly or indirectly, by purchase or otherwise,
of any Sprint Voting Securities (as so defined), if as a
result the Votes (as so defined) represented by the Sprint
Voting Securities Beneficially Owned in the aggregate by FT,
DT and their respective Affiliates and Associates (each as so
defined) would represent in the aggregate more than 20% (or
such higher percentage as then permitted by the Standstill
Agreement) of the Voting Power (as so defined) represented by
the Outstanding Sprint Voting Securities (as so defined);
(y) except as permitted by Section 2.3 of the
Standstill Agreement, following the Initial Standstill Period
(as so defined), acquires Beneficial Ownership (as so
defined), directly or indirectly, by purchase or otherwise,
of any Sprint Voting Securities (as so defined) if as a
result the Votes (as so defined) represented by the Sprint
Voting Securities Beneficially Owned in the aggregate by FT,
DT and their respective Affiliates and Associates (each as so
defined) would represent in the aggregate more than 30% (or
such higher percentage as then permitted by the Standstill
Agreement) of the Voting Power (as so defined) represented by
the Outstanding Sprint Voting Securities (as so defined); or
(z) unless in each case specifically requested in
writing by the Chairman of the Board of Sprint or by a
resolution of a majority of the directors of Sprint:
(A) proposes any matter for submission to a vote
of the stockholders of Sprint or any of its Affiliates
(as so defined);
(B) forms or joins or participates in a Group (as
so defined) with respect to Sprint Voting Securities;
(C) effects, seeks, proposes, offers or
participates in any:
(1) tender or exchange offer, merger,
consolidation, share exchange or business
combination involving Sprint or any material
portion of its business or any purchase of all or
any substantial part of the assets of Sprint or any
material portion of its business;
(2) recapitalization, restructuring,
liquidation, dissolution or other extraordinary
transaction with respect to Sprint or any material
portion of its business; or
(3) "solicitation" of "proxies" (as such
terms are used in the proxy rules of the U.S.
Securities and Exchange Commission, but without
regard to the exclusion set forth in Section 14a-
1(1)(2)(iv) of such rules from the definition of
"solicitation") with respect to Sprint or any of
its Affiliates (as so defined) or any action
resulting in such person becoming a "participant"
in any "election contest" (as such terms are used
in the proxy rules of the U.S. Securities and
Exchange Commission) with respect to Sprint or any
of its Affiliates (as so defined); or
(D) takes any other action to seek to affect the
control of the management or Board of Directors of
Sprint or any of its Affiliates (as so defined).
The sole and exclusive remedy under this Agreement for a Material
Non-Funding Default described in this Section 20.2(c) shall be as
set forth in Sections 20.2(d) (subject to Section 20.11(a)), 20.4
and 20.5(d) (subject to Section 20.5(c)); provided that nothing in
this Section 20.2(c) shall affect any rights which any Party may
have pursuant to the Investment Agreement.
(d) Upon the occurrence of a Material Non-Funding
Default by any of the Sprint Parties, the FT/DT Parties shall have
the Tie-Breaking Vote as described in Section 18.1. Upon the
occurrence of a Material Non-Funding Default by any of the FT/DT
Parties, the Sprint Parties shall have the Tie-Breaking Vote as
described in Section 18.1.
(e) Upon the occurrence of a Bankruptcy of any of the
Sprint Parties, the FT/DT Parties shall have the Tie-Breaking Vote
as described in Section 18.1. Upon the occurrence of a Bankruptcy
of any of the FT/DT Parties, the Sprint Parties shall have the
Tie-Breaking Vote as described in Section 18.1.
Section 20.3. Termination of Joint Venture. The following
shall be "Termination Conditions" with respect to the Joint
Venture:
(a) a Funding Default shall have occurred and such
default shall not have been cured within the Second Cure Period
(in which case the Non-Defaulting Shareholder may (subject, in the
event that Sprint or its Affiliate is the Non-Defaulting
Shareholder, to approval in accordance with Section 15.38) deliver
a written notice (a "Termination Notice") in accordance with
Section 20.4);
(b) a Material Non-Funding Default has occurred (in
which case the Related Party Group which has not committed such
Material Non-Funding Default (the "Non-Defaulting Party") may
(subject, in the event that Sprint or its Affiliate is the Non-
Defaulting Party, to approval in accordance with Section 15.38)
deliver a Termination Notice in accordance with Section 20.4);
(c) the Bankruptcy of a Party (in which case the
non-bankrupt Related Party Group may (subject, in the event that
any Sprint Party is a member of the non-bankrupt Related Party
Group, to approval in accordance with Section 15.38) deliver a
Termination Notice in accordance with Section 20.4);
(d) there shall be taken any action by a Governmental
Authority relating to the Joint Venture after the Closing Date
which imposes a Burdensome Condition, provided that the Related
Party Group seeking to deliver a Termination Notice shall have
used its reasonable efforts to reverse or modify such action,
including taking all action required by Section 15.2(c) (in which
case the Party so affected by such Burdensome Condition may
(subject, in the event that Sprint or its Affiliate is the
affected Party, to approval in accordance with Section 15.38)
deliver a Termination Notice in accordance with Section 20.4);
(e) either the Sprint Parties or the FT/DT Parties
shall give a notice of Impasse to the other Related Party Group in
accordance with this Agreement, which Impasse is not dissolved in
accordance with this Agreement (in which case either the Sprint
Parties may (subject to approval in accordance with Section
15.38), or the FT/DT Parties may, then deliver a Termination
Notice in accordance with Section 20.4); and
(f) written mutual consent of all of the Parties (in
which case any Party may (subject, in the case of the Sprint
Parties, to approval in accordance with Section 15.38) deliver a
Termination Notice in accordance with Section 20.4).
Section 20.4. Termination Notice.
(a) If a Termination Condition occurs, a Related Party
Group which is entitled to deliver a Termination Notice pursuant
to Section 20.3 may give such Termination Notice to the other
Related Party Group and to the Global Venture Board within one
hundred eighty (180) days following the date upon which such
Related Party Group becomes aware of the occurrence of the
Termination Condition or, in the case of Section 20.3(e), at any
time after the period during which such Impasse may be dissolved
has expired. If one Related Party Group delivers a Termination
Notice, the other Related Party Group shall be precluded from
delivering a subsequent Termination Notice.
(b) Each of the Parties acknowledges and agrees that
(i) it shall not challenge the validity of any provision of this
Article 20 in any Proceeding and (ii) each Party shall have a
right to seek specific performance of each provision of this
Article 20 in accordance with Article 21.
Section 20.5. Termination Upon Default, Etc.
(a) In the case of a Termination Condition under
Section 20.3(a) resulting from a Funding Default by any of the
Sprint Parties, under Section 20.3(b) resulting from a Material
Non-Funding Default by any of the Sprint Parties, or under Section
20.3(c) resulting from a Bankruptcy of any of the Sprint Parties
holding Venture Interests as permitted by this Agreement, the FT/
DT Parties shall have the option to purchase all, but not less
than all, of the Venture Interests of the Sprint Parties. In
order to determine the option price, the Parties shall cause the
Appraised Value of the Venture Interests of the Sprint Parties to
be determined pursuant to Section 17.8. If the FT/DT Parties
elect to exercise their option to purchase the Venture Interests
of the Sprint Parties, the FT/DT Parties shall deliver written
notice of such exercise to the Sprint Parties within ninety (90)
days following receipt of the Value Opinion. Such written notice
shall constitute an offer by the FT/DT Parties to purchase the
Venture Interests of the Sprint Parties at the price set forth in
this Section 20.5(a), and the Sprint Parties hereby accept any
such offer by the FT/DT Parties. If the FT/DT Parties fail to
deliver such written notice of such exercise within said 90-day
period, they will be deemed to have elected not to purchase the
Venture Interests of the Sprint Parties. In the event that the
FT/DT Parties purchase the Venture Interests of the Sprint Parties
pursuant to this Section 20.5(a), the purchase price for the
Venture Interests shall be an amount payable in cash in U.S.
Dollars equal to (i) 75% of the Appraised Value of such Venture
Interests in case of a Termination Condition described in Section
20.3(a) or (b) and (ii) 100% of the Appraised Value of such
Venture Interests in case of a Termination Condition described in
Section 20.3(c); provided that if the FT/DT Parties hold any
Company Eligible Notes at the time such payment is made, such
Company Eligible Notes may constitute all or a portion of the
purchase price.
(b) In the case of a Termination Condition under
Section 20.3(a) resulting from a Funding Default by Atlas or any
other Qualified Venture Subsidiary of the FT/DT Parties (or Wholly
Owned Subsidiary of Atlas or of any such Qualified Venture
Subsidiary), under Section 20.3(b) resulting from a Material Non-
Funding Default by Atlas or any other Qualified Venture Subsidiary
of the FT/DT Parties (or Wholly Owned Subsidiary of Atlas or of
any such Qualified Venture Subsidiary), or under Section 20.3(c)
resulting from the Bankruptcy of Atlas or any other Qualified
Venture Subsidiary of the FT/DT Parties (or Wholly Owned
Subsidiary of Atlas or of any such Qualified Venture Subsidiary)
holding Venture Interests as permitted by this Agreement, the
Sprint Parties shall have the option (subject to approval in
accordance with Section 15.38) to purchase all, but not less than
all, of the Venture Interests of the FT/DT Parties. In order to
determine the option price, the Parties shall cause the Appraised
Value of the Venture Interests of the FT/DT Parties to be
determined pursuant to Section 17.8. If the Sprint Parties elect
to exercise their option to purchase the Venture Interests of the
FT/DT Parties, Sprint shall deliver written notice of such
exercise to the FT/DT Parties within ninety (90) days following
receipt of the Value Opinion. Such written notice shall
constitute an offer by the Sprint Parties to purchase the Venture
Interests of the FT/DT Parties at the price set forth in this
Section 20.5(b), and the FT/DT Parties hereby accept any such
offer by the Sprint Parties. If Sprint fails to deliver such
written notice of such exercise within said 90-day period, the
Sprint Parties will be deemed to have elected not to purchase the
Venture Interests of the FT/DT Parties. In the event that the
Sprint Parties purchase the Venture Interests of the FT/DT Parties
pursuant to this Section 20.5(b), the purchase price for the
Venture Interests shall be an amount payable in cash in U.S.
Dollars equal to (i) 75% of the Appraised Value of such Venture
Interests in case of a Termination Condition described in Section
20.3(a) or (b) and (ii) 100% of the Appraised Value of such
Venture Interests in case of a Termination Condition described in
Section 20.3(c); provided that if the Sprint Parties hold any
Class A Holder Eligible Notes at the time such payment is made,
such Class A Holder Eligible Notes may constitute all or a portion
of the purchase price.
(c) Upon the occurrence of a Termination Condition
under Section 20.3(a) resulting from a Funding Default by either
FT (or Wholly Owned Subsidiary of FT holding Venture Interests as
permitted by this Agreement) or DT (or Wholly Owned Subsidiary of
DT holding Venture Interests as permitted by this Agreement),
under Section 20.3(b) resulting from a Material Non-Funding
Default by either FT (or Wholly Owned Subsidiary of FT holding
Venture Interests as permitted by this Agreement) or DT (or Wholly
Owned Subsidiary of DT holding Venture Interests as permitted by
this Agreement), or under Section 20.3(c) resulting from the
Bankruptcy of either FT (or Wholly Owned Subsidiary of FT holding
Venture Interests as permitted by this Agreement) or DT (or Wholly
Owned Subsidiary of DT holding Venture Interests as permitted by
this Agreement), the Non-Defaulting European Party shall have the
option, which it may exercise whether or not the Sprint Parties
deliver a Termination Notice, to purchase all, but not less than
all, of the Venture Interests of the Defaulting European Party.
In order to determine the option price, the Parties shall cause
the Appraised Value of the Venture Interests of each of the
Defaulting European Party and the Non-Defaulting European Party to
be determined pursuant to Section 17.8. If the Non-Defaulting
European Party elects to exercise its option to purchase the
Venture Interests of the Defaulting European Party, the Non-
Defaulting European Party shall deliver written notice of such
exercise to the Defaulting European Party and the Sprint Parties
within forty-five (45) days following receipt of the Value
Opinion. Such written notice shall constitute an offer by the
Non-Defaulting European Party to purchase the Venture Interests of
the Defaulting European Party at the price set forth in this
Section 20.5(c), and the Defaulting European Party hereby accepts
any such offer by the Non-Defaulting European Party. If the Non-
Defaulting European Party fails to deliver such written notice of
such exercise within said 45-day period, it will be deemed to have
elected not to purchase the Venture Interests of the Defaulting
European Party. In the event that the Non-Defaulting European
Party purchases the Venture Interests of the Defaulting European
Party pursuant to this Section 20.5(c), the purchase price for the
Venture Interests shall be an amount payable in cash in U.S.
Dollars equal to (i) 75% of the Appraised Value of such Venture
Interests in case of a Termination Condition described in Section
20.3(a) or (b) and (ii) 100% of the Appraised Value of such
Venture Interests in case of a Termination Condition described in
Section 20.3(c). Following such a purchase, the Sprint Parties
shall cease to have the Tie-Breaking Vote. For purposes of this
Agreement, the Venture Interests of a Defaulting European Party
shall include the Venture Interests of all FT/DT Parties other
than the Non-Defaulting European Party (including the Venture
Interests held by such Non-Defaulting European Party through Atlas
or any other Qualified Venture Subsidiary of the FT/DT Parties).
(d) If the Non-Defaulting European Party elects not to
purchase the Venture Interests of the Defaulting European Party
pursuant to Section 20.5(c), the Sprint Parties shall have the
option (subject to approval in accordance with Section 15.38) to
purchase all, but not less than all, of the Venture Interests of
the FT/DT Parties by delivering written notice of such election to
purchase within forty-five (45) days of the election of the Non-
Defaulting European Party to not purchase the Venture Interests of
the Defaulting European Party. Such written notice shall
constitute an offer by the Sprint Parties to purchase the Venture
Interests of the FT/DT Parties at the price set forth in this
Section 20.5(d), and the FT/DT Parties hereby accept any such
offer by the Sprint Parties. If Sprint fails to deliver such
written notice of such exercise within said 45-day period, it will
be deemed to have elected not to purchase the Venture Interests of
the FT/DT Parties. In the event that the Sprint Parties purchase
the Venture Interests of the FT/DT Parties pursuant to
Section 20.5(d), the purchase price for the Venture Interests
shall be an amount payable in cash in U.S. Dollars equal to (i)
75% of the Appraised Value of the Venture Interests of the
Defaulting European Party (including the Venture Interests held by
such Defaulting European Party through Atlas or any other
Qualified Venture Subsidiary of the FT/DT Parties) in case of a
Termination Condition described in Section 20.3(a) or (b), (ii)
100% of the Appraised Value of the Venture Interests of the FT/DT
Parties in case of a Termination Condition described in Section
20.3(c), and (iii) 100% of the Appraised Value of the Venture
Interests of the Non-Defaulting European Party (including the
Venture Interests held by such Non-Defaulting European Party
through Atlas or any other Qualified Venture Subsidiary of the FT/
DT Parties) in the case of a Termination Condition described in
Section 20.3(a) or (b); provided that if the Sprint Parties hold
any Class A Holder Eligible Notes at the time such payment is
made, such Class A Holder Eligible Notes may constitute all or a
portion of the purchase price.
(e) In any case in which a Related Party Group has the
option to purchase the Venture Interests of any other Related
Party Group under this Section 20.5, the purchasing Related Party
Group shall have the option (subject, in the event that any Sprint
Party is a member of such Related Party Group, to approval in
accordance with Section 15.38), before consummating the purchase
of the Venture Interests of such other Related Party Group, to
exercise any unexpired right under this Agreement that the
purchasing Related Party Group may have to cause any JV Entity to
purchase from such other Related Party Group any GBN Special
Matter Project, ROW Plan Action Project or ROE Plan Action Project
that has been accounted for separately and which such other
Related Party Group owns.
(f) In any case in which a Related Party Group having
the option to purchase the Venture Interests of the other Related
Party Group under this Section 20.5 chooses not to exercise such
right, the Joint Venture shall continue.
Section 20.6. Termination Upon Regulatory Action, Impasse or
Mutual Consent. In the case of a Termination Condition under
Section 20.3(d), 20.3(e) or 20.3(f), upon delivery of a
Termination Notice, the Parties shall proceed to terminate the
Joint Venture pursuant to the buy/sell arrangements set forth in
Section 20.7.
Section 20.7. Buy/Sell Arrangements.
(a) In case of a Termination Condition under
Section 20.3(d), 20.3(e) or 20.3(f), the Parties shall immediately
provide for the Appraised Value of the Joint Venture to be
determined in accordance with Section 17.8. Within ninety (90)
days following the date on which the Sprint Parties and the FT/DT
Parties receive the Value Opinion, each shall submit
simultaneously to the other sealed statements (the content of
which, in the case of the sealed statement of the Sprint Parties,
shall have been approved in accordance with Section 15.38) (each,
an "Initial Offer") notifying the other in writing either (i) that
it offers to sell all of its Venture Interests to the other
Related Party Group, or (ii) that it offers to buy all of the
other Related Party Group's Venture Interests at the Appraised
Value in each case for cash.
(b) If the Initial Offers indicate that one Related
Party Group wishes to buy and the other Related Party Group wishes
to sell, they shall continue negotiations in an effort to reach a
final agreement (which final agreement shall be subject, in the
case of the Sprint Parties, to approval in accordance with Section
15.38) on price. If the Parties have been unable to reach an
agreement as to price within sixty (60) days of the Initial
Offers, the Venture Interests will be sold at a price equal to
their Appraised Value determined in accordance with Section 17.8.
(c) If the Initial Offers indicate that both Related
Party Groups wish to sell their Venture Interests, they shall
select an investment banking firm to determine how to realize the
maximum value for their Venture Interests. If they are unable to
reach an agreement as to how to proceed within one hundred eighty
(180) days of the date of the Termination Notice, then the Parties
shall proceed with the bidding process set forth in Section
20.7(d).
(d) If the Initial Offers indicate that each Related
Party Group wishes to purchase the other's Venture Interests, then
the Related Party Groups shall begin a bidding process and the
highest bidder (based upon the amount bid by each Related Party
Group as a percentage of the Appraised Value of the Venture
Interests of the other Related Party Group) shall buy the other's
Venture Interests for cash. The terms and conditions of each such
bid made by the Sprint Parties shall be subject to approval in
accordance with Section 15.38. Either Related Party Group (the
"First Bidder") can make an initial offer to purchase the Venture
Interests of the other Related Party Group, which cannot be less
than 95% of the Appraised Value of the Venture Interests to be
purchased. The other Related Party Group must respond either by
accepting such initial offer or delivering a counteroffer to
purchase the Venture Interests of the First Bidder. The
counteroffer and each subsequent offer for particular Venture
Interests must be at least 1% higher than the immediate prior
offer for such Venture Interests. The bidding process shall
continue until one Related Party Group has either responded by
accepting the immediate prior offer or failed to make a timely
response, in which case the immediate prior offer shall be deemed
accepted. For purposes of this Section 20.7, all offers,
acceptances and counteroffers must be for cash in writing and in a
form which is firm and binding; all offers must be answered within
twenty (20) days of receipt of notice of a prior offer. If no
response to an offer or counteroffer is received within such
20-day period, the immediate prior offer or counteroffer shall be
deemed to be accepted.
Section 20.8. Closing. Each of the Parties shall use its
reasonable efforts to obtain all Governmental Approvals required
to effect the purchase and sale of Sprint Venture Interests or FT/
DT Venture Interests, as the case may be, pursuant to Sections
20.5 and 20.7. Unless the Parties have failed to receive all
required Governmental Approvals, or any of the Governmental
Approvals provided with respect to the transaction have imposed
any Burdensome Condition, the closing of the purchase of Venture
Interests pursuant to this Article 20 shall be held at the
principal office of the purchasing Related Party Group within
ninety (90) days after the final determination of the purchase
price to be paid to the selling Related Party Group. If in spite
of the Parties' efforts in this regard, the required Governmental
Approvals have not been received at the time the closing is
scheduled to occur or any such Governmental Approvals with respect
to the transaction have imposed any Burdensome Condition, the
closing shall be postponed until such date as the Parties shall
have obtained the required Governmental Approvals which do not
impose any Burdensome Condition; provided that, if such
Governmental Approvals are not obtained without the imposition of
a Burdensome Condition prior to the fifth anniversary of the date
on which such closing is postponed, at the request of any Party,
the Parties shall negotiate in good faith to provide for the
termination of the Joint Venture pursuant to such mutually
agreeable terms and conditions as will permit the Parties to
obtain all Governmental Approvals required for the termination of
the Joint Venture Agreement, without the imposition of any
Burdensome Condition, and as will have substantially the same
economic consequences to the Parties as the transaction
contemplated by Section 20.5 or 20.7, as applicable. At the
closing, the purchasing Related Party Group and the selling
Related Party Group shall make the deliveries specified in Section
17.7.
Section 20.9. Waiver of Right to Terminate. Notwithstanding
the foregoing, in the event that a Related Party Group fails to
give a Termination Notice within the time period set forth in
Section 20.4, such Related Party Group shall be deemed to have
waived its right to terminate with respect to the event or events
which gave rise to such right to terminate.
Section 20.10. Assignment of Rights. In the event either the
Sprint Parties or the FT/DT Parties obtain the right to purchase
the other Related Party Group's Venture Interests pursuant to this
Article 20, the purchasing Related Party Group may assign all or
any part of its rights to acquire the selling Related Party
Group's Venture Interests to one or more Permitted Designees of
such purchasing Parties.
Section 20.11. Special Put Rights.
(a) If a Non-Defaulting Shareholder or Non-Defaulting
Party waives its right to deliver a Termination Notice following
the occurrence of a Funding Default or a Material Non-Funding
Default pursuant to Section 20.9, then unless the Non-Defaulting
Shareholder or Non-Defaulting Party relinquishes the Tie-Breaking
Vote, the Party which has committed the Funding Default or
Material Non-Funding Default, as the case may be (the "Defaulting
Party"), shall have the right (subject, in the event that Sprint
or its Affiliate is the Party which has committed the Funding
Default or the Material Non-Funding Default, to approval of the
exercise of such right in accordance with Section 15.38) to
require the Non-Defaulting Shareholder or Non-Defaulting Party, on
or after the fifth anniversary of the date on which the
Non-Defaulting Shareholder or Non-Defaulting Party received the
Tie-Breaking Vote, to purchase all, but not less than all, of the
Defaulting Party's Venture Interests at 75% of the Appraised Value
determined in accordance with Section 17.8. Such right shall be
exercised by delivery of a written notice by the Defaulting Party
to the Non-Defaulting Shareholder or Non-Defaulting Party electing
to exercise their right under this Section 20.11(a). The date of
such notice is referred to herein as the "Default Put Notice
Date." Promptly following the Default Put Notice Date, the
Parties shall commence the appraisal process set forth in Section
17.8.
(b) If the FT/DT Parties propose to transfer their
Venture Interests to a Major Competitor of Sprint pursuant to
Section 17.4, the Sprint Parties shall have the right (subject to
approval of the exercise of such right in accordance with Section
15.38) to require the FT/DT Parties to purchase all, but not less
than all, of the Venture Interests of the Sprint Parties, which
purchase and sale shall occur concurrently with or, at the
election of the FT/DT Parties, prior to the transfer by the FT/DT
Parties of their Venture Interests to such Major Competitor of
Sprint. Unless otherwise agreed by the Parties, the purchase
price to be paid by the FT/DT Parties for the Venture Interests of
the Sprint Parties shall be equal to the sum of (A) the Percentage
Interest of the Sprint Parties in each of the GBN Group and the
Regional Operating Groups multiplied by (B) the "Per Venture
Interest Price" for the GBN Group and each such Regional Operating
Group. For this purpose, the "Per Venture Interest Price" for the
GBN Group or a Regional Operating Group shall be equal to: (1) the
aggregate purchase price to be paid by the Transferee Party to the
FT/DT Parties (reduced by any control premium) multiplied by the
applicable "Allocation Ratio" divided by (2) the Percentage
Interest of the FT/DT Parties in the GBN Group or such Regional
Operating Group, as the case may be. The "Allocation Ratio" for
the GBN Group or a Regional Operating Group shall be equal to: (i)
the Appraised Value of the GBN Group or such Regional Operating
Group, as the case may be, divided by (ii) the Appraised Value of
all the Venture Interests of the GBN Group and each Regional
Operating Group, in both cases determined as of the Sprint Major
Competitor Put Notice Date in accordance with Section 17.8.
Promptly following the date on which the Sprint Parties elect to
exercise their right to require the FT/DT Parties to purchase
their Venture Interests pursuant to this Section 20.11(b), the
Parties shall commence the appraisal process set forth in Section
17.8. Such right shall be exercised by delivery of a written
notice by the Sprint Parties electing to exercise their right
under this Section 20.11(b) no later than ninety (90) days after
the date the FT/DT Parties have given notice of their election to
transfer their Venture Interests pursuant to Section 17.4. The
date of such notice is referred to herein as the "Sprint Major
Competitor Put Notice Date."
(c) If the Sprint Parties propose to transfer their
Venture Interests to a Major Competitor of FT/DT pursuant to
Section 17.5, the FT/DT Parties shall have the right to require
the Sprint Parties to purchase all, but not less than all, of the
Venture Interests of the FT/DT Parties, which purchase and sale
shall occur concurrently with or, at the election of the Sprint
Parties, prior to the transfer by the Sprint Parties of their
Venture Interests to such Major Competitor of FT/DT. Unless
otherwise agreed by the Parties, the purchase price to be paid by
the Sprint Parties for the Venture Interests of the FT/DT Parties
shall be equal to the sum of (A) the Percentage Interest of the
FT/DT Parties in each of the GBN Group and the Regional Operating
Groups multiplied by (B) the "Per Venture Interest Price" for the
GBN Group and each such Regional Operating Group. For this
purpose, the "Per Venture Interest Price" for the GBN Group or a
Regional Operating Group shall be equal to: (1) the aggregate
purchase price to be paid by the Transferee Party to the Sprint
Parties (reduced by any control premium) multiplied by the
applicable "Allocation Ratio" divided by (2) the Percentage
Interest of the Sprint Parties in the GBN Group or such Regional
Operating Group, as the case may be. The "Allocation Ratio" for
the GBN Group or a Regional Operating Group shall be equal to: (i)
the Appraised Value of the GBN Group or such Regional Operating
Group, as the case may be, divided by (ii) the Appraised Value of
all the Venture Interests of the GBN Group and each Regional
Operating Group, in both cases determined as of the FT/DT Major
Competitor Put Notice Date in accordance with Section 17.8.
Promptly following the date on which the FT/DT Parties elect to
exercise their right to require the Sprint Parties to purchase
their Venture Interests pursuant to this Section 20.11(c), the
Parties shall commence the appraisal process set forth in Section
17.8. Such right shall be exercised by delivery of a written
notice by the FT/DT Parties electing to exercise their right under
this Section 20.11(c) no later than ninety (90) days after the
date the Sprint Parties have given notice of their election to
transfer their Venture Interests pursuant to Section 17.5. The
date of such notice is referred to herein as the "FT/DT Major
Competitor Put Notice Date."
(d) Each of the Parties shall use its reasonable
efforts to obtain all Governmental Approvals required to effect
the purchase and sale of Venture Interests pursuant to Section
20.11(a), 20.11(b) or 20.11(c). Unless the Parties have failed to
receive all required Governmental Approvals or any of the
Governmental Approvals provided with respect to the transaction
have imposed any Burdensome Condition, the purchase of Venture
Interests by the selling Related Party Group pursuant to
Section 20.11(a), 20.11(b) or 20.11(c) shall be closed and
consummated in the principal office of the other Related Party
Group or at such other place as such Related Party Group may
reasonably designate on or before the one hundred fiftieth (150th)
day following the relevant Put Notice Date. At the closing, the
selling Related Party Group and the purchasing Related Party Group
shall make the deliveries specified in Section 17.7.
(e) If the required Governmental Approvals have not
been received at the time the closing is scheduled to occur
pursuant to Section 20.11(d), or any such Governmental Approvals
with respect to the transaction have imposed any Burdensome
Condition, the closing shall be postponed until no later than the
second anniversary of the relevant Put Notice Date. During such
two-year period, the purchasing Related Party Group may assign its
rights to purchase the applicable Venture Interests to a Permitted
Designee which shall agree to purchase such interests. If by the
end of such two-year period, all Governmental Approvals required
to consummate such transaction with the selling Related Party
Group or a Permitted Designee have not been obtained, or any such
Governmental Approvals continue to impose any Burdensome
Condition, the Related Party Group which has exercised its rights
pursuant to Section 20.11(a), 20.11(b) or 20.11(c) may declare an
Impasse unless, in the case of a transfer pursuant to Section
20.11(a), the purchasing Related Party Group relinquishes the Tie-
Breaking Vote.
ARTICLE 21.
ARBITRATION
Section 21.1. Agreement to Arbitrate.
(a) For purposes of this Article 21, the term "Party"
shall mean any party to a Section 21.1 Agreement.
(b) Upon the occurrence of a Dispute, any Party
alleging that a party to a Section 21.1 Agreement has breached a
provision of such agreement shall immediately refer such Dispute
to the Global Venture Committee for resolution by giving notice to
the Global Venture Committee and the Parties to such Section 21.1
Agreement specifying in reasonable detail the circumstances of
such breach. Upon the occurrence of a Dispute pursuant to Section
16.8(d), the relevant JV Entity shall immediately refer such
Dispute to the Global Venture Committee for resolution by giving
notice to the Global Venture Committee and the other party to the
relevant Affiliation Agreement. If the Global Venture Committee
fails to resolve such Dispute within thirty (30) days of the date
on which such Dispute was referred to the Global Venture
Committee, such Dispute shall be immediately and automatically
referred to the Global Venture Board. If the Global Venture Board
fails to resolve such Dispute within thirty (30) days of the date
on which such Dispute was referred to the Global Venture Board,
any Party may initiate arbitration pursuant to this Article 21.
(c) Any and all Disputes that are not resolved by the
Parties pursuant to Section 21.1(b) or otherwise shall be solely
and finally settled by a board of three arbitrators in accordance
with the Rules of Conciliation and Arbitration of the
International Chamber of Commerce (the "ICC Rules"), as such ICC
Rules shall be modified herein or by subsequent agreement of the
affected Parties. Any Party, either separately or together with
one or more other Parties, may initiate arbitration proceedings
against any other Party. The Party so initiating arbitration
proceedings shall so notify the Secretariat of the International
Court of Arbitration (the "ICC Court") by filing with the ICC
Court a Request for Arbitration. The information filed with and
as part of such Request for Arbitration shall comply in all
material respects with the requirements of the ICC Rules except
that the Party filing such Request for Arbitration shall not
nominate an arbitrator and shall include in the Request for
Arbitration a notice to the ICC Court that the Parties have agreed
to not nominate any arbitrators until the expiration of all the
periods set forth herein for the joinder or intervention of other
Parties.
(d) Because the expeditious resolution of Disputes will
depend in part on the prompt joinder or intervention of
appropriate Parties, and because the procedures agreed by the
Parties relating to joinder and intervention are integrally
related to the time periods within which Answers and counterclaims
must be filed, the Parties hereby direct the ICC Court to refrain
from granting extensions of the time periods contained in Article
4 of the ICC Rules unless such extensions are absolutely essential
in order to permit a Disputant to submit a responsive Answer or
counterclaim. When granted, such extensions should be limited to
the minimum period necessary to permit the Disputant to complete
its Answer or counterclaim in a responsive manner. Further,
because the Disputants will have previously discussed the issues
relating to the Dispute during the internal dispute resolution
process conducted pursuant to Section 21.1(b), the Parties
contemplate that it would be unlikely that any Disputant would
require an extension exceeding sixty (60) days in order to prepare
a responsive Answer or counterclaim.
(e) Whenever any filing is required or otherwise made
in connection with any arbitration proceeding commenced under this
Article 21, the Disputant making such filing shall send a copy of
the filing, together with all attachments and exhibits thereto,
(i) to each other Disputant, (ii) to each other Party to the
Section 21.1 Agreement to which the Dispute relates or arises
under, and (iii) to the Global Venture Board (such Disputants,
other Parties and the Global Venture Board are hereinafter
referred to collectively as the "Notice Parties").
(f) This agreement to arbitrate, as set forth in this
Article 21, shall be specifically enforceable. Pursuant to
Article 192 of Chapter 12 of the Swiss Federal Statute on Private
International Law (December 18, 1987), the Parties expressly waive
and exclude any right they may have to bring any action of appeal,
annulment or recourse, including any setting aside proceeding, in
reference to any award made in connection with arbitration
proceedings initiated pursuant to this Article 21, insofar as such
waiver may be validly made.
Section 21.2. Joinder; Intervention; Cross Claims
(a) Upon receipt of a Request for Arbitration, notice
of counterclaim or notice of joinder, any Disputant may join any
other Party to any arbitral proceedings commenced hereunder,
provided that such joinder is based upon a Dispute which has
common issues of law or fact as the Dispute arising under the
relevant Request for Arbitration or a defendant's counterclaim, if
any. Such joinder shall be made through written notice to the ICC
Court and the Notice Parties within thirty (30) days after the
receipt of the Request for Arbitration, notice of counterclaim or
notice of joinder, as the case may be, which first describes facts
or issues upon which such joinder would be based. The notice of
joinder shall contain the following information: (i) name and
address of the joined Party; and (ii) a statement of the
Disputant's case with relation to the Party that the Disputant is
joining. The joined Party may within thirty (30) days after the
receipt of the notice of joinder set out its defense and (provided
that it is based upon a Dispute which has common issues of law or
fact as the Dispute arising under the relevant notice of joinder)
counterclaim, if any, and supply relevant documents. If the
joined Party sets out a defense or counterclaim, it shall send
copies to the ICC Court and the Notice Parties.
(b) At any time prior to the expiration of the later of
the period within which a defendant must file its Answer and the
period within which a joined Party must file its Answer (and
counterclaims, if any), any Party may intervene in any arbitral
proceedings hereunder provided that such intervention is based
upon a Dispute which has issues of law or fact common to the
Dispute arising under the relevant Request for Arbitration or a
Disputant's Answer or counterclaim, if any. The notice of
intervention shall contain the following information: (i) name
and address of the intervening Party; and (ii) a statement of the
intervening Party's case with relation to the claimant, the
defendant and any other Disputant.
(c) Any Disputant may, at the same time as it serves
its Answer or its defense to a notice of intervention, notice of
joinder or a counterclaim, as the case may be, make a cross-claim
against any other Disputant, provided that such cross-claim is
based upon a Dispute which has common issues of law or fact as the
Dispute arising under the relevant Request for Arbitration, notice
of joinder, notice of intervention or counterclaim, as the case
may be.
(d) For purposes of any arbitration proceedings
initiated under this Article 21, the words "or cross-claims" shall
be deemed to be included after the words "the parties may make new
claims or counterclaims" in Article 16 of the ICC Rules.
(e) If a Disputant knowingly fails to join, or
otherwise fails to make clear in its Answer that there may be a
Party that is not a Disputant against whom a claimant may
reasonably be expected to have a claim, such Disputant shall
thereafter be barred from asserting as a defense that the claimant
is seeking recovery against the incorrect Disputant, provided that
such Disputant's failure to join another Party shall not otherwise
affect its rights against such Party.
Section 21.3. Effect of Joinder and Intervention. Any
joined or intervening Party shall become a Disputant, and shall be
bound by any award rendered by the arbitral tribunal, even if it
chooses not to participate in the arbitral proceedings.
Section 21.4. Selection of Arbitrators.
(a) No arbitrators shall be nominated until the
expiration of all periods within which Parties may intervene or be
joined.
(b) When a Dispute involves a disagreement between two
Disputants, within thirty (30) days after the date beyond which no
further intervention or joinder is permitted, each Disputant shall
nominate one arbitrator for confirmation by the ICC Court, in
accordance with the ICC Rules. If one of the Disputants fails to
nominate an arbitrator within this period, the ICC Court shall
appoint an arbitrator for that Disputant in accordance with
Article 2.6 of the ICC Rules. The two arbitrators nominated by
the Disputants (and confirmed by the ICC Court) or appointed on
behalf of the Disputants (as the case may be) shall jointly
nominate a third arbitrator, who shall be confirmed by the ICC
Court in accordance with Article 2.4 of the ICC Rules and who
shall chair the arbitration panel. If the arbitrators nominated
by the Disputants (and confirmed by the ICC Court) or appointed on
behalf of the Disputants (as the case may be) do not succeed in
nominating a third arbitrator for confirmation by the ICC Court
within thirty (30) days after the latter of the two arbitrators
nominated by the Disputants (and confirmed by the ICC Court) or
appointed on behalf of the Disputants (as the case may be) has
been confirmed or appointed, the third arbitrator shall, at the
request of either Disputant, be appointed by the ICC Court. The
third arbitrator confirmed or appointed shall be a recognized
legal expert in New York law with extensive experience in relation
to the issues involved in the Dispute and shall have full command
of the English language. Any claim that the third arbitrator (i)
is not a recognized legal expert in New York law with extensive
experience in relation to the issues involved in the Dispute or
(ii) does not have full command of the English language must be
submitted to the ICC Court within sixty (60) days of the
appointment of such third arbitrator or any such claim shall be
permanently waived.
(c) When a Dispute exists such that there are more than
two Disputants, and within thirty (30) days after the date beyond
which no further intervention or joinder is permitted no agreement
can be reached among the Disputants regarding the method of
nomination of arbitrators such that only two arbitrators shall be
nominated by the Disputants, the Disputants shall so notify the
ICC Court. In that event, the Disputants expressly waive and
renounce any right, under the ICC Rules or otherwise, to the
appointment of an arbitrator of their choice. Upon such notice,
the ICC Court shall appoint all three arbitrators and shall
designate one of such arbitrators as the chair of the arbitration
panel. The arbitrators so appointed shall be recognized legal
experts in New York law with extensive experience in relation to
the issues involved in the dispute and shall have full command of
the English language. Any claim that any of the arbitrators so
appointed (i) is not a recognized legal expert in New York law
with extensive experience in relation to the issues involved in
the Dispute or (ii) does not have full command of the English
language must be submitted to the ICC Court within sixty (60) days
of the appointment of such arbitrators or any such claim shall be
permanently waived.
Section 21.5. Arbitration Proceedings. All arbitration
proceedings shall be conducted in the English language pursuant to
the ICC Rules, as such ICC Rules shall be modified herein or by
subsequent agreement of the affected Parties. Any Disputant, in
its sole discretion, may at its expense request that an
interpreter be retained to assist such Disputant in any
arbitration proceeding. The arbitration shall take place in
Geneva, Switzerland at a location, date and time reasonably
acceptable to the Parties. The Disputants shall use all
reasonable efforts to facilitate the arbitration by making
available to each other and to the arbitrators for inspection and
extraction all documents, books, records and, at any hearing,
personnel under their control as the arbitrators shall determine
to be relevant to the Dispute and by conducting arbitration
hearings to the greatest extent possible on successive, contiguous
days. Nothing herein shall waive or preclude any objection based
upon any privilege to production or testimony recognized by the
law of the State of New York. The advance to cover the costs of
conducting the arbitration proceeding shall be borne in accordance
with Article 9.2 of the ICC Rules. However, notwithstanding the
preceding sentence, in the event there are more than two Parties
to the proceeding, the advance to cover the costs of conducting
the proceeding shall be allocated in such manner as the ICC Court
may deem just and equitable in the circumstances.
Section 21.6. Decision of the Arbitrators.
(a) The arbitral tribunal shall decide on all issues
concerning the merits, including quantum and interest, of any
claim, counterclaim or cross-claim brought before it in any
arbitration proceeding commenced pursuant to this Article 21,
except for those concerning the costs of the proceedings, in one
or more partial awards (each, a "Partial Award"), which shall
state the reasons for the award. Each Partial Award shall be
final and binding as to the subject matters dealt with therein.
(b) If an arbitral tribunal determines in any Partial
Award that a Party (the "Breaching Party") has breached Section
9.1, 9.2, 15.11,, 15.12(b), 15.12(f), 15.13, 15.14, 17.2, 17.3 or
18.1(b) or Article 10 or 19 of this Agreement or any provision of
any Section 21.1 Agreement which expressly provides that a breach
of such provision will constitute a Material Non-Funding Breach
(any such breach a "Material Non-Funding Breach"), the Partial
Award shall include a statement describing in reasonable detail
the conduct that caused the Material Non-Funding Breach and the
steps that the Breaching Party must take to cure such breach. If
the Breaching Party does not immediately (i) cease the violative
conduct which gave rise to the arbitral tribunal's determination
in the Partial Award that a Material Non-Funding Breach has
occurred and (ii) comply in all material respects with the terms
and conditions specified in the Partial Award (including complying
with Section 15.9 in respect of a Material Non-Funding Breach),
any Party may, during the 45-day period beginning on the forty-
fifth (45th) day following the notification to the Parties of the
Partial Award determining that a Material Non-Funding Breach has
occurred, notify both the Breaching Party and the arbitral
tribunal of its belief that the Breaching Party has not complied
with such clause (i) or (ii). Within ninety (90) days of receipt
of such notice, the arbitral tribunal shall issue a Partial Award
in which it shall determine if the Breaching Party (1) has ceased
or continued the violative conduct which gave rise to the
determination of the Material Non-Funding Breach and (2) has or
has not complied in all material respects with the terms and
conditions of the Partial Award, such finding to be a "Material
Non-Funding Breach Finding."
(c) Following the issuance by the arbitral tribunal of
the Partial Award that either alone or with any preceding award
resolves all the issues that had been set forth for resolution in
the Terms of Reference (except for costs), the arbitral tribunal
shall render its final award (the "Final Award"), in which it
shall fix the costs of the arbitration and decide which of the
Parties shall bear the costs (excluding legal fees and expenses
except as permitted by Section 15.9) in connection with such
proceedings or in what proportions such costs shall be borne by
the Parties, in accordance with Section 15.9 hereof and Article 20
of the ICC Rules. The arbitral tribunal shall also make any
Material Non-Funding Breach Finding within the time limits
indicated in Section 21.6(b) with respect to the last Partial
Award, before rendering the Final Award.
(d) Judgment on any award, whether a Partial Award or
Final Award, may be entered in and enforced by any court of
competent jurisdiction.
(e) The arbitral tribunal shall have the authority to
award temporary, interim or permanent injunctive relief or relief
providing for the specific performance of any Section 21.1
Agreement or a portion thereof, but it shall have no power or
authority to award punitive damages.
(f) Any monetary award of the arbitrators shall be
expressed in U.S. Dollars. Any such monetary award shall include
interest from the date of any breach or any violation of this
Agreement or any other Section 21.1 Agreement. The arbitrators
shall fix an appropriate rate of interest from the date of the
breach or other violation to the date when the award is paid in
full. In no event shall the interest rate during such period be
lower than a rate equal to the Applicable LIBOR Rate plus
5 percentage points per annum.
(g) In reaching its decisions on the claims,
counterclaims and cross-claims brought before it, the arbitral
tribunal shall apply the relevant provisions of this Agreement
(including Section 15.9) and any other Section 21.1 Agreement at
issue and the Applicable Law.
(h) Notwithstanding anything to the contrary contained
in this Section 21.6, a Dispute submitted to arbitration pursuant
to Section 16.8(d) shall be decided solely in the manner
contemplated therein.
Section 21.7. Injunctive Relief. Except for a Dispute
pursuant to Section 16.8(d), each Party shall have the right to
seek from any court of competent jurisdiction pending the
establishment of the arbitral tribunal interim relief in aid of
arbitration or to protect the rights of such Party in respect of
any provision contained in the Section 21.1 Agreement to which the
Dispute relates. Any request for such interim relief by a Party
shall not be deemed incompatible with, or a waiver of, this
agreement to arbitrate. The Parties acknowledge and agree that
irreparable damage would occur in the event that any Party fails
to perform its obligations under Section 15.11 or 18.1(b) or
Article 10 or 19.
Section 21.8. Other Section 21.1 Agreements. The provisions
of this Article 21 shall apply to this Agreement, each other
Operative Agreement (except to the extent expressly provided
otherwise therein) and all other Section 21.1 Agreements which
expressly provide that any dispute thereunder will be resolved as
provided in Article 21 of this Agreement.
ARTICLE 22.
POST-TERMINATION PROVISIONS
Section 22.1. Consequences of Termination. Upon the
transfer by at least one Party of its Venture Interests in
accordance with this Agreement (other than a transfer pursuant to
Section 19.2), this Agreement and the other Operative Agreements
shall forthwith cease to have effect as between such Party and the
other Parties, and all further obligations of such Party (and its
Affiliates) to such other Parties (and their Affiliates) and of
such other Parties (and their Affiliates) to such Party (and its
Affiliates) shall terminate under this Agreement and the other
Operative Agreements without further liability, except that:
(a) such transfer shall not constitute a waiver of any
rights that any Party (or any of its Affiliates) may have by
reason of a breach of this Agreement or any other Operative
Agreement, subject to any limitations thereon in this Agreement or
the other Operative Agreements;
(b) the provisions of this Article 22, Sections 1.3 and
15.9, and Articles 21 and 23 of this Agreement shall continue in
full force and effect; and
(c) the rights and obligations of the Parties (and
their Affiliates) under the Operative Agreements shall continue in
full force and effect to the extent provided in the Transition
Plan.
Section 22.2. Transition Plan. The Parties agree to
negotiate in good faith to develop a plan (the "Transition Plan")
to be included in the Master Transfer Agreement or another
Operative Agreement which will govern the rights and obligations
of the parties under the Operative Agreements following an event
described in Section 22.1 and which will ensure that the successor
to the Venture Business shall continue to supply services to its
customers without disruption. Each of the Parties agrees to cause
its Affiliates and, insofar as within its control, the JV
Entities, to comply with the provisions of the Transition Plan.
ARTICLE 23.
MISCELLANEOUS
Section 23.1. Notices. Except as expressly provided herein,
notices and other communications provided for herein shall be in
writing in the English language and shall be delivered by hand or
courier service, mailed or sent by telex, graphic scanning or
other telegraphic communications equipment of the sending Party,
as follows:
FT: 6 place d'Alleray
75505 Paris Cedex 15
France
Attn: Executive Vice President,
International
Tel: (33-1) 44-44-19-94
Fax: (33-1) 46-54-53-69
with a copy to:
Debevoise & Plimpton
875 Third Avenue
New York, New York 10022
U.S.A.
Attn: Louis Begley, Esq.
Tel: (212) 909-6273
Fax: (212) 909-6836
DT: Godesberger Allee 107B
D-53175 Bonn
Germany
Attn: Chief Executive Officer
Tel: 49-228-181-4000
Fax: 49-228-181-8602
with a copy to:
Mayer, Brown & Platt
2000 Pennsylvania Avenue, N.W.
Suite 6500
Washington, D.C. 20006
U.S.A.
Attn: Werner Hein, Esq.
Tel: (202) 778-8726
Fax: (202) 861-0473
Sprint: 2330 Shawnee Mission
Parkway, East Wing
Westwood, Kansas 66205
U.S.A.
Attn: J. Richard Devlin, Esq.
Tel: (913) 624-8440
Fax: (913) 624-8426
with a copy to:
King & Spalding
191 Peachtree Street
Atlanta, Georgia 30303
U.S.A.
Attn: Bruce N. Hawthorne, Esq.
Tel: (404) 572-4903
Fax: (404) 572-5146
Sprint Sub: 2330 Shawnee Mission
Parkway, East Wing
Westwood, Kansas 66205
U.S.A.
Attn: J. Richard Devlin, Esq.
Tel: (913) 624-8440
Fax: (913) 624-8426
with a copy to:
King & Spalding
191 Peachtree Street
Atlanta, Georgia 30303
U.S.A.
Attn: Bruce N. Hawthorne, Esq.
Tel: (404) 572-4903
Fax: (404) 572-5146
or to such other address or attention of such other Person as such
Party shall advise the other Parties in writing. Notice to both
FT and DT (and to Atlas, upon execution by Atlas of a counterpart
to this Agreement as required pursuant to Section 15.12(b)) shall
constitute notice to all of the FT/DT Parties. Notice to both
Sprint and Sprint Sub shall constitute notice to all of the Sprint
Parties. All notices and other communications given to the
Parties hereto in accordance with the provisions of this Agreement
shall be deemed to have been given on the date of receipt.
Communications sent by telex, graphic scanning or other
telegraphic communications equipment shall be deemed to have been
received when confirmation of their delivery is received by the
sender.
Section 23.2. Applicable Law. The validity, construction
and performance of this Agreement shall be governed by and
construed in accordance with the laws of the State of New York,
U.S.A., regardless of the laws that might otherwise govern under
applicable principles of conflicts of law.
Section 23.3. Severability. If any provision of this
Agreement shall be held to be illegal, invalid or unenforceable,
the Parties agree that such provision will be enforced to the
maximum extent permissible so as to effect the intent of the
Parties, and the validity, legality and enforceability of the
remaining provisions of this Agreement shall not in any way be
affected or impaired thereby. If necessary to effect the intent
of the Parties, the Parties will negotiate in good faith to amend
this Agreement to replace the unenforceable language with
enforceable language which as closely as possible reflects such
intent.
Section 23.4. Amendments. This Agreement may be modified
only by a written amendment signed by all of the Parties.
Section 23.5. Waiver. The waiver by a Party of any instance
of any other Party's noncompliance with any obligation or
responsibility herein shall be in writing and signed by the
waiving Party and shall not be deemed a waiver of other instances
of such other Party's noncompliance.
Section 23.6. Counterparts. This Agreement may be executed
in one or more counterparts, all of which shall be considered one
and the same agreement, and shall become effective when one or
more counterparts shall have been signed by each Party and
delivered to the other Parties.
Section 23.7. Entire Agreement. The provisions of this
Agreement set forth the entire agreement and understanding among
the Parties as to the subject matter hereof and supersede the MOU
and all prior agreements, oral or written, and all other prior
communications between the Parties relating to the subject matter
hereof, other than (i) the Existing Confidentiality Agreement and
(ii) those written agreements executed and delivered
contemporaneously herewith.
Section 23.8. No Assignment.
(a) Except as specifically provided herein, no Party
shall, directly or indirectly, assign this Agreement or any of its
rights or obligations hereunder without the prior written consent
of the other Parties.
(b) Any attempted assignment of this Agreement in
violation of this Section 23.8 shall be void and of no effect.
(c) This Agreement shall be binding upon, inure to the
benefit of and be enforceable by the Parties and their respective
successors and permitted assigns.
Section 23.9. Expenses. Except as otherwise provided in
this Agreement, the other Operative Agreements and that certain
letter agreement dated as of the date hereof among Sprint, FT and
DT regarding fees and expenses incurred in the translation of
portions of this Agreement and certain related documents, and
whether or not any of the Transactions contemplated hereby or
thereby are consummated, all costs and expenses (including the
fees and expenses of any attorneys, accountants, investment
bankers, brokers, finders or other intermediaries) incurred in
connection with this Agreement and the other Operative Agreements
and the Closing of the Transactions contemplated by Section
12.1(b) to be consummated at the Closing shall be paid by the
Party incurring such cost or expense.
Section 23.10. No Third-Party Beneficiaries. Except for the
provisions of Article 21 hereof with respect to any other
Operative Agreement or other Section 21.1 Agreement, this
Agreement is for the sole benefit of the Parties and their
permitted assigns, and nothing herein express or implied shall
give or be construed to give to any Person, other than the Parties
and such assigns, any legal or equitable rights hereunder.
Section 23.11. Publicity. In addition to any obligations
under the Standstill Agreement (as defined in the Investment
Agreement), the Parties shall use reasonable efforts to consult in
good faith with each other with a view to agreeing upon any press
release or public announcement relating to the Transactions
contemplated hereby or by the other Operative Agreements prior to
the consummation thereof.
Section 23.12. Construction. This Agreement has been
negotiated by the Parties and their respective counsel and shall
be fairly interpreted in accordance with its terms and without any
strict construction in favor of or against any of the Parties.
Section 23.13. Disclaimer of Agency. Except for provisions
herein expressly authorizing one Party to act for another, this
Agreement shall not constitute any Party as a legal representative
or agent of any other Party, nor shall a Party have the right or
authority to assume, create or incur any liability or any
obligation of any kind, expressed or implied, against or in the
name or on behalf of any other Party or any of its Affiliates or
the Joint Venture or any of the JV Entities unless otherwise
expressly permitted by such Party.
Section 23.14. Waiver of Immunity. Each of FT and DT agrees
that, to the extent that it or any of its Subsidiaries or any of
its property or the property of any of its Subsidiaries is or
becomes entitled at any time 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 setoff or counterclaim relating to this
Agreement or any of the other Operative Agreements or any of the
other Section 21.1 Agreements 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 such matters
arising with respect to this Agreement or the other Operative
Agreements or the other Section 21.1 Agreements or the subject
matter hereof or thereof (including any obligation for the payment
of money). Each of FT and 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. 1602, et seq. The foregoing waiver shall
constitute a present waiver of immunity at any time any action is
initiated against FT or DT or any of their Subsidiaries with
respect to this Agreement or any of the other Operative Agreements
or any of the other Section 21.1 Agreements.
Section 23.15. Language. The Parties have negotiated both
this Agreement and the MOU in the English language and have
prepared successive drafts and the definitive texts of the MOU and
this Agreement in the English language. For purposes of complying
with loi n 94-665 du 4 aout 1994 relative a l'emploi de la langue
francaise, the Parties have prepared a French version of this
Agreement, which French version was executed and delivered
simultaneously with the execution and delivery of the English
version hereof, such English version having likewise been executed
and delivered. The French and English versions of this Agreement
shall be equally authoritative.
Section 23.16. Effect of Force Majeure Event. If any Party
or any Affiliate of any Party shall be prevented, hindered or
delayed in the performance of any obligation under this Agreement
or any other Operative Agreement (other than an obligation to make
money payments) by an Event of Force Majeure beyond its reasonable
control and such prevention, hindrance or delay could not have
been prevented by reasonable precautions and cannot reasonably be
circumvented by the Party or its Affiliate through the use of
alternate sources, work-around plans or other means, such Party
will give to each other Party prompt written notice of such Event
of Force Majeure specifying the nature, date of inception and
expected duration of such Event of Force Majeure and, insofar as
known, the extent to which it or its Affiliate will be unable to
perform or be delayed in performing such obligation, whereupon
such obligation will be suspended to the extent it or its
Affiliate is affected by such Event of Force Majeure during, but
no longer than, the continuance thereof. The Party giving such
notice will use its reasonable efforts or cause its Affiliate to
use its reasonable efforts, including the use of alternate
sources, work-around plans or other means, to overcome such Event
of Force Majeure as quickly as possible, and will keep the other
Parties informed of the results of such efforts on a regular
basis. No event will relieve any Party or any of its Affiliates
from any obligation hereunder or under any other Operative
Agreement which is not suspended as provided above. Such Party
will promptly notify each other Party of the termination of the
Event of Force Majeure, and performance by such Party or its
Affiliate of the obligation excused by such Event of Force Majeure
will recommence.
Section 23.17. Relationship of the Parties. Except to the
extent the Parties agree to form a JV Entity as a partnership, the
relationship among the Parties shall not be that of partners and
nothing herein contained shall be deemed to constitute a
partnership among them.
Section 23.18. Interest. If at any time any amount of
interest to be charged pursuant to any provision of this Agreement
exceeds the maximum permitted by New York law for such charge,
such charge shall be reduced to such legal maximum amount.
Section 23.19. Fiduciary Duties. Subject to Applicable Law,
no Party or any of its Affiliates nor any officer, director,
employee or former employee of any Party or its Affiliate shall
have any obligation, or be liable, to any Party, the Joint Venture
or any JV Entity for exercising any of the rights of such Party or
such Affiliate under this Agreement or any other Operative
Agreement to which it is or will be a party, for exercising or
failing to exercise its rights as a shareholder of any JV Entity
or for breach of any fiduciary or other similar duty to any Party,
the Joint Venture or any JV Entity by reason of such conduct,
other than a breach of any Operative Agreement.
IN WITNESS WHEREOF, Sprint, Sprint Sub, FT and DT have caused
their respective duly authorized officers to execute this
Agreement as of the day and year first above written.
SPRINT CORPORATION
By: /s/ W.T. Esrey
Name: William T. Esrey
Title: Chairman and Chief Executive
Officer
SPRINT GLOBAL VENTURE, INC.
By: /s/ W. T. Esrey
Name: William T. Esrey
Title: President
FRANCE TELECOM
By: /s/ Marcel Roulet
Name: Marcel Roulet
Title: President de France Telecom
DEUTSCHE TELEKOM AG
By: /s/ Ron Sommer
Name: Dr. Ron Sommer
Title: Vorsitzender des Vorstandes
IN WITNESS WHEREOF, Atlas hereby acknowledges its agreement
to be bound by the terms of this Agreement as a "Party" and as an
"FT/DT Party" and to comply with the obligations imposed by this
Agreement on Atlas and has caused its respective duly authorized
officers to execute this Agreement as of the ___ day of _____,
19___, which date shall be the "Atlas Signing Date" for purposes
of this Agreement.
ATLAS S.A.
By:________________________________
Name:______________________________
Title:_____________________________
<PAGE>
SCHEDULE 1.1(a)
Calculation of Applicable LIBOR Rate
"Applicable LIBOR Rate" shall mean the one-month London
Interbank Offered Rate (the "Quoted Rate") listed in the "Money
Rates Box" of The Wall Street Journal (New York Edition) (or any
successor publication) on the day on which such interest is to
begin to accrue, provided that if such day is a day on which the
Quoted Rate is not listed in The Wall Street Journal (New York
Edition) (or such successor publication) or The Wall Street
Journal (New York Edition) (or such successor publication) is not
published, the Applicable LIBOR Rate shall be the Quoted Rate on
the most recent day prior to such date on which a Quoted Rate is
listed in The Wall Street Journal (New York Edition) (or such
successor publication).
<PAGE>
SCHEDULE 1.1(b)
Initially Excluded Businesses
A. Deutsche Telekom
1. FNA
2. MATAV
3. Utel
4. UCOM
5. Eucom Holding
6. Eutelsat
7. Inmarsat
8. Intelsat
9. Intersputnik
10. SES
11. DeteCon & its non-German subsidiaries
12. CIS Romantis
13. InfoTel A.G. - Moscow
14. Maritime
15. Infonet
- Infonet GmbH
16. "50-50"
17. Local and Long Distance Network in Kazakstan (Dekatel)
18. Satelindo
B. France Telecom
1. Keystone (US)
2. Maxat (UK)
3. Globalstar
4. FNA
5. Telecom Argentina via FCR
6. Telmex
7. ITJ Japan
8. Telecom Plus Senegal
9. Telecom Vanuatu
10. Getesa (Guinee)
11. Socatel (Central African Republic)
12. CC Team
13. Gie Expertel
14. Cnitcom
15. Eucom Holding
16. Systemia
17. Telinvest - Cofratel & Sogestel
18. Eutelsat
19. Immarsat
20. Intelsat
21. FT Mobile Data
22. Polycom (France)
23. Cruisephone (Florida)
24. Boatphone (French Antilles)
25. Jetphone
26. Intelmatique
27. Five companies:
- Minitel Services Company
- FT West
- ITP (jv)
- Minitel Communications LTD
- Videotex Nederland
28. Sofrecom
29. ViaFax
30. Westbalt
31. Maritime
32. Infonet
- Interpac France
- Interpac Italy
- Interpac Luxembourg
33. INFO AG
34. "50-50"
35. Cordiale
C. Sprint
1. Iridium
2. Maritime
3. Alcatel Data Networks
4. SRPT Poland
5. CallNet Enterprises
6. Business of Sprint International Caribe conducted in
Puerto Rico and the U.S. Virgin Islands
7. Sprint Guam
<PAGE>
SCHEDULE 1.1(c)
JV Services
The Joint Venture will provide, directly or indirectly, the
following services:
A. Consumer Services
1. Travel Card Services (Joint Venture postpaid,
prepaid or affinity cards)
2. Offshore specialized voice services (At Home/Office
switched voice, simple resale, equal access,
authorization code based)
3. Selected Data and Enhanced Platform Services
B. Carrier Services
1. Carrier Hubbing Services (for facilities-based
carriers)
2. Reseller Services (for service providers without
international facilities)
3. Service Bureau Services
4. X.75 Services [FN]Contribution of FT and DT's X.75
business is subject to Sprint's right to confirm the
performance and nature of such business as
provided in the Master Transfer Agreement Term
Sheet.
C. Corporate Services
1. Corporate Voice Services (global virtual private
network, international toll free, selected card and
simple resale services, switched digital)
2. Data Services (X.25, SNA, Frame Relay, IP, ATM)
3. Dedicated Services (Managed bandwith, VSAT)
4. Custom Network Solutions (systems/equipment
procurement, tailored and managed services,
outsourcing)
5. Platform Based Enhanced Services (messaging,
including access to telex, LAN interconnection,
enhanced facsimile, EDI, videoconferencing,
audioconferencing, etc.)
<PAGE>
SCHEDULE 1.1(d)
Major Competitors of Sprint
For Purposes of Sections 13.2(g) and 15.11
Each of the following Persons (as well as any Controlled
Affiliate of any such entity) shall be considered a Major
Competitor of Sprint for purposes of Sections 13.2(g) and 15.11 of
the Joint Venture Agreement:
American Telephone & Telegraph Co./WorldPartners (Kokusai
Denshin Denwa Company Limited, Singapore Telecom)/Unisource &
Parents (PTT Netherlands (UK) Ltd., PTT Switzerland, Telia
AB, Telfonica de Espana, S.A.)
British Telecommunications plc/MCI Communications
Corporation/BCE Inc./Concert Communications Company
Ameritech Corporation/Nynex Corporation/Bell Atlantic
Corporation/Bellsouth Corp./SBC Communications Inc./US West
Inc./Pacific Telesis Group and GTE Corporation
International Business Machines Corporation
Nippon Telegraph and Telephone Corporation
Kokusai Denshin Denwa Company Limited
Cable and Wireless Public Limited Co.
<PAGE>
SCHEDULE 1.1(e)
ROE Territory
Belgium Albania
Denmark Bulgaria
Greece Czech Republic
Ireland Hungary
Italy Poland
Luxembourg Romania
Netherlands Slovakia
Portugal
Spain Bosnia-Hercegovina
United Kingdom Croatia
San Marino Macedonia
Montenegro
Andorra Serbia
Gibraltar Slovenia
Monaco Estonia
Vatican City Latvia
Lithuania
Austria
Finland Ukraine
Iceland
Liechtenstein Turkey
Norway Malta
Sweden Cyprus
Switzerland
<PAGE>
SCHEDULE 2.1(c)
Non-Exclusive Services
A. Consumer Services
1. Principal Card and Collect Calling Services
B. Carrier Services
1. Switched and Dedicated Transit
C. Corporate Services
1. Corporate Voice Services (global virtual network,
international toll free, switched digital)
2. International Private Line
<PAGE>
SCHEDULE 3.2
Allocation of Global Functions
I. Functions Allocated to the ROE Group
Product Management and Marketing (Business Customers)
Product Management and Marketing (Carrier Customers)
Network Planning (including Switching Platforms)
Finance
Global Account Management
II. Functions Allocated to the ROW Group
Product Management and Marketing (Consumer Customers)
Strategic Planning
Information Technology and Platforms
Network Operations and Service Centers
Human Resources
Legal and Regulatory
Communications/Public Relations
<PAGE>
SCHEDULE 10.4(o)
Eunetcom Customer Contracts
IBM March 16, 1994
Dun & Bradstreet August 29, 1994
Bull October 17, 1994
Reynolds December 5, 1994
Wiltel January 6, 1995
<PAGE>
SCHEDULE 11.1(a)
Contributed Assets
A. Deutsche Telekom
1. DT home office international selected activities, if any
2. Selected assets owned by DT, if any, used to conduct the
following lines of business outside DT's Home Country:
Systems, Data Services, Messaging Services, Business
Voice Services, Managed Bandwidth Services, Very Small
Aperture Terminal Services, Carrier Voice Services, Card
Services and At Home Services
3. Deutsche TELEKOM Ltd sales & support staff in UK: London
4. Deutsche TELEKOM S.A. sales & support staff in Belgium:
Brussels
5. Deutsche TELEKOM AGoT sales & support staff in Russia:
Moscow
6. Deutsche TELEKOM K.K. sales & support staff in Japan:
Tokyo
7. Deutsche TELEKOM Asia Pte Ltd. sales & support staff in
Singapore
8. Deutsche TELEKOM Asia Pte Ltd. sales & support staff in
Hong Kong
9. Deutsche TELEKOM (representative office) sales & support
staff in China: Beijing
10. Deutsche TELEKOM (representative office) sales and
support staff in Ukraine: Kiev
11. Deutsche TELEKOM Inc. selected sales & support staff in
US: Atlanta, Chicago, New York, San Francisco,
Washington DC
12. Deutsche TELEKOM Inc. selected sales & support staff in
Canada: Toronto
B. France Telecom
1. FCR-SI and Transpac International selected activities;
(product management marketing, sales, proposal support)
2. Selected assets owned by FT and used to conduct the
following lines of business outside FT's Home Country:
Systems, Data Services, Messaging Services, Business
Voice Services, Managed Bandwidth Services, Very Small
Aperture Terminal Services, Carrier Voice Services, Card
Services and At Home Services.
3. FT sales & support staff in U.K.: London
4. FT sales & support staff in Belgium: Brussels
5. FT sales & support staff in Spain: Madrid
6. FT sales & support staff in Italy: Rome
7. FT sales & support staff in Japan: Tokyo
8. FT sales & support staff in Hong Kong
9. FT sales & support staff in Singapore
10. FT selected sales & support staff in US: New York,
Chicago, Boston, Atlanta, Dallas, San Francisco, Los
Angeles
11. FT Network Services (UK: 100%)
12. FT Redes y Servides (Spain: 100%)
13. Transpac Servizi di Rete (Italy: 100%; previously
Ollnet)
14. Transpac Norden & FT Network Services Nordic AB
(Sweden: 100%)
15. Romania Telecoms Network Services SA (51%)
16. France Telecoms Network Services Suisse SA (97%)
17. France Telecoms Network Services Belgium (100%)
18. France Telecoms Network Services Nederland BV (100%)
C. Sprint
1. Sprint International home office international
activities -- Product Management, Network Planning,
Market Management, Proposal Support, Technical
Operations & Management Services in Reston and Kansas
City
2. Selected assets owned by Sprint and used to conduct the
following lines of business outside Sprint's Home
Country: Systems, Data Services, Messaging Services,
Business Voice Services, Managed Bandwidth Services,
Very Small Aperture Terminal Services, Carrier Voice
Services, Card Services and At Home Services.
3. Sprint Russia Group: Sprint Networks (marketing and
operations companies) and Sprint Telecom
4. Sprint Bulgaria (50%)
5. Sprint RPG (India)(50%)
6. SITOMS
7. Sprint staff in Australia: Melbourne, Sydney
8. Sprint staff in Bahrain: Manama
9. Sprint staff in Belgium: Brussels
10. Sprint staff in Brazil: Sao Paulo
11. Sprint staff in Bulgaria: Sofia
12. Sprint staff in Chile: Santiago
13. Sprint staff in China: Beijing
14. Sprint staff in Columbia: Bogota
15. Sprint staff in Czech Republic: Prague
16. Sprint staff in Denmark: Copenhagen
17. Sprint staff in England: Basingstoke, London, Sheffield
18. Sprint staff in Finland: Helsinki
19. Sprint staff in Honduras: Tegucigalpa
20. Sprint staff in Hong Kong: Hong Kong
21. Sprint staff in Hungary: Budapest
22. Sprint staff in India: Ahmedabad, Bangalore, Bombay,
Calcutta, Madras, New Delhi, Pune, Secundarabad
23. Sprint staff in Ireland: Dublin
24. Sprint staff in Israel: Tel Aviv
25. Sprint staff in Italy: Milan
26. Sprint staff in Japan: Tokyo
27. Sprint staff in Korea: Seoul
28. Sprint staff in Luxembourg: Luxembourg
29. Sprint staff in Netherlands: Noordwijk
30. Sprint staff in New Zealand: Auckland
31. Sprint staff in Norway: Oslo
32. Sprint staff in Philippines: Manila
33. Sprint staff in Poland: Warsaw
34. Sprint staff in Portugal: Lisbon
35. Sprint staff in Russia: Moscow
36. Sprint staff in Singapore: Singapore
37. Sprint staff in Spain: Madrid
38. Sprint staff in Sweden: Stockholm
39. Sprint staff in Switzerland: Zurich
40. Sprint staff in Taiwan: Taipei
41. Sprint staff in Vietnam: Ho Chi Minh City
42. Sprint International Canada staff in Canada: Toronto,
Vancouver, Quebec
43. Sprint Staff in Mexico
44. The following intellectual property will be assigned,
subject to the provision that Sprint and its Affiliates
may reserve rights or obtain licenses to this
intellectual property:
a. Trademarks
Custom Link Series
Facsimile Logo
Fast-Start
FONdirect
FONselect
GFRS
Global Data Connection
Goi Di My
Le Responde Mejor
Micro-Fone
Nexeon
Speedfax
TAMS
Telemail
Telemail & Design
Telemail in Katakana
Telemail in Korean
Telemail Plus
Telenet
Telenet & Design
Telenet & Logo
Telenet Communications
Telenet in Cyrillic
Telenet in Katakana
Telenet in Korean
Telenet Telemail
Telenotes
Telnet
The Standard
USACOLLECT
World Select
b. Software which is specific to equipment and is
owned by third parties
i. Alcatel Data Networks (operating software
and network management software specific
to X.25 packet switching equipment)
ii. Alcatel Data Networks (operating software
and network management software specific
to software Frame Relay equipment)
iii. Alcatel Data Networks (operating software
specific to X.75 equipment[FN]Contribution of
FT and DT's X.75 business is subject to
Sprint's right to confirm the performance and
nature of such business as provided in the
Master Transfer Agreement Term Sheet.)
iv. Bay Networks (operating software and
network management software specific to
routers)
v. Cisco (operating software and network
management software specific to routers)
vi. Controlware (operating software and
network management software specific to
ISDN equipment)
vii. Data General (operating system specific
to Aviion computers)
viii. Digilog (network management software
specific to line test equipment)
ix. GDC (operating software and network
management software specific to ATM
equipment)
x. Hughes (ISDN product suite software
specific to VSAT - Hub and terminals)
xi. Network Equipment Technologies (operating
software and network management software
specific to T-1 multiplexers)
xii. OAZ (operating software specific to fax
servers)
xiii. Prime (operating system specific to
computers)
xiv. StrataCom (operating software and network
management software specific to T-1
multiplexers)
xv. Sun Microsystems (operating system
specific to computers)
xvi. Tandem (operating software specific to
non-stop computers)
xvii. Telebit (operating software and network
management software specific to modems)
xviii. Timeplex (operating software and network
management software specific to T-1
multiplexers)
c. Software which is not specific to equipment and is
owned by third parties
i. Intec (facsimile software)
ii. Hewlett Packard (OpenView)
iii. Remedy (Remedy Health Profiler)
d. Software which is owned by Sprint International
i. WorldTraveler FONCARD order management
and bill processing software[FN]This software
application is based on, and requires in order
to run, one or more of the third party software
applications listed below, the licenses to which
will be assigned to the Joint Venture:
Microsoft (Visual Basic, Visual C)
Apex Software Corp. (True Grid)
Computer Associates (Clipper)
Oracle (Oracle RDBMS)
Concentric Data Systems (R&R Report
Writer (both SQL and DBase Versions)
Blink Inc. (Blinker)
Sterling Software (NDM)
Attachmate (Extra)
Extrasensory Software (Telepathy)
ii. ITFS (International Toll Free Service)
order management software[FN]
Pinnacle Publishing (Comm Tools)
Santa Cruz Operations (SCO Unix)
American Cybernetics (Multi-Edit)
PKWare (PKZip & PKUnzip)
iii. PrePaid Card order management and
distributor invoicing software[FN]
Pinnacle Publishing (Comm Tools)
Santa Cruz Operations (SCO Unix)
American Cybernetics (Multi-Edit)
PKWare (PKZip & PKUnzip)
iv. MOVER (Software for pre-order entry
tracking of orders for IVAN services and
products)[FN]
Pinnacle Publishing (Comm Tools)
Santa Cruz Operations (SCO Unix)
American Cybernetics (Multi-Edit)
PKWare (PKZip & PKUnzip)
v. SprintMail (messaging service software)
vii. PC SprintMail (messaging service
software)
viii. Mac SprintMail (messaging service
software)
ix. PC SprintMail for Windows (messaging
service software)
x. Global SprintFAX facsimile service
software enhancements (the underlying
software is not owned by Sprint
International but by Intec)
xi. SWAN Accounting Software (relies on
Oracle RDBMS and Oracle financial
software)
xii. IIBS Billing Software
xiii. Sprint International INMS network
management software (under
development)
xiv. Sprint International TRACS customer
service software (under development)
xv. Sprint International CDR call detail
record software (under development)
<PAGE>
SCHEDULE 13.1(a)(viii)
Governmental Approvals Relating to Atlas
(Capitalized terms not defined herein shall have the meanings
ascribed to such terms in the Atlas Joint Venture Agreement)
1. All approvals under applicable national antitrust and/or
merger control law or regulations necessary for the
consummation of the Atlas Transactions (a) from France and
Germany and (b) from the following eight countries: Austria,
Belgium, Italy, Netherlands, Spain, Sweden, Switzerland and
the United Kingdom, provided that unless FT and DT are
prevented from implementing the Atlas Joint Venture Documents
or contributing to Atlas the businesses and assets
contemplated by the Atlas Joint Venture Documents in four or
more of the countries listed in this clause (b), this clause
(b) shall be deemed to be satisfied in full.
2. Approval of the transfer of the shares of Atlas France to
Atlas by the French minister in charge of economic affairs
and finance (ministre charge de l'economie et des finances)
and the French minister in charge of posts and
telecommunications (ministre charge des postes et des
telecommunications) following the opinion of the Commission
Superieure du Service Public des Postes et
Telecommunications, or implied approval one month following
notification of the proposed transfer of such shares,
whichever is earlier, pursuant to Article 32 of the Cahier
des Charges of FT, as approved by Decret no 90-1213 of
December 29, 1990.
3. Publication in the Journal Officiel of the French Republic,
following the opinion of the Commission de la Privatization,
of a decret having the effect of authorizing the transfer of
the shares of Atlas France to Atlas under the French
privatisation laws (Law no 86-793 of July 2, 1986 and Article
20 of Law no 86-912 of August 6, 1986, as amended by Law no
93-923 of July 19, 1993).
4. Issuance or reissuance of French authorizations to the extent
required (or enactment of any necessary amendments to
existing regulations relating to the shareholding in
companies rendering public services in the field of
telecommunications) to permit certain network, transmission
and other services to be performed by Atlas and Atlas France,
including the authorizations required under Articles L34-2
and L34-5 of the French Posts and Telecommunications Code, as
modified by Law no 90-1170 of December 29, 1990.
5. Publication in the Journal Officiel of the French Republic of
a decret amending the Cahier des Charges of FT, as approved
by decret no 90-1213 of December 29, 1990, to modify the
requirement that FT provide, directly or through
subsidiaries, packet or circuit switched data transmission
services, and to provide that certain of FT's public interest
services may be performed by Atlas France.
6. Prior approval of the proposed investment of Atlas in Atlas
France by the French minister in charge of economic affairs
(ministre charge de l'economie) for the purpose of Article 12
of decret no 89-938 of December 29, 1989, or expiration of
the one-month period referred to in such Article 12,
whichever is earlier.
7. Approval of the provisions of the statuts of Atlas France
under Article 14 of decret no 85-984 of September 16, 1985 by
the French minister in charge of the budget (ministre charge
du budget), the French minister in charge of the civil
service (ministre charge de la fonction publique) and the
French minister in charge of posts and telecommunications
(ministre charge des postes et telecommunications).
8. Decision (arrete) of the French Prime minister and/or the
French minister in charge of the budget (ministre charge du
budget), the French minister in charge of posts and
telecommunications (ministre charge des postes et
telecommunications) and the other relevant French ministers
approving the secondment of civil servants to Atlas France in
accordance with Articles 15 and 16 of decret no 85-984 of
September 16, 1985.
9. Receipt by FT of rulings (agrements) from the Direction
Generale des impots, in form and substance reasonably
satisfactory to FT, granting the favorable tax treatment
provided by Article 210A of the French General Tax Code with
respect to the formation of Atlas, including (i) the
contribution of certain assets to Societe A as part of the
Societe A restructuring, (ii) the contribution of the FCRSI
Assets to Atlas France, (iii) the contribution by Cogecom of
its shares of Atlas France to Atlas, and (iv) other
transactions reasonably related thereto.
<PAGE>
SCHEDULE 13.2(f)(i)
FT Joint Venture Opinions
Counsel to FT reasonably satisfactory to Sprint shall deliver an
opinion or opinions which address favorably the matters described
below and which are in form and substance reasonably satisfactory
to Sprint. Such opinion or opinions may contain such appropriate
assumptions and such qualifications and limitations as are
reasonably satisfactory to Sprint.
1. Organization, existence, power and authority of FT
2. Authority of FT to execute, deliver and perform each of
the Joint Venture Documents and the transactions
contemplated thereby; due execution and delivery by FT
of the Joint Venture Documents
3. Binding effect and enforceability against FT of the
Joint Venture Documents under New York law
4. Absence of conflicts as a result of the execution,
delivery and performance by FT of the Joint Venture
Documents with (i) the FT Law and Decrees and (ii)
Applicable Laws of the European Union, the Republic of
France, New York and the federal laws of the United
States of America
5. Receipt of all Governmental Approvals needed by FT under
the Applicable Laws of the European Union, France, New
York and the federal laws of the United States of
America
6. Validity and enforceability under French law of the
provisions of the Joint Venture Documents which provide
that such documents are governed by New York law
7. Validity and enforceability under French law of the
waiver by FT in Section 23.14 of the Joint Venture
Agreement and the corresponding sections of the other
Joint Venture Documents
8. Validity and enforceability under French law of the
agreement of FT to arbitrate all disputes arising under
any of the Section 21.1 Agreements pursuant to Article
21 of the Joint Venture Agreement and the corresponding
sections of the other Joint Venture Documents
9. Enforceability against FT by the courts of France of a
final arbitration award rendered against FT by an
arbitration panel in accordance with Article 21 of the
Joint Venture Agreement with respect to a Dispute
arising under any of the Section 21.1 Agreements
10. Compliance by the Joint Venture Documents with the
requirements of Loi Toubon
<PAGE>
SCHEDULE 13.2(f)(ii)
DT Joint Venture Opinions
Counsel to DT reasonably satisfactory to Sprint shall deliver an
opinion or opinions which address favorably the matters described
below and which are in form and substance reasonably satisfactory
to Sprint. Such opinion or opinions may contain such appropriate
assumptions and such qualifications and limitations as are
reasonably satisfactory to Sprint.
1. Organization, existence, power and authority of DT
2. Authority of DT to execute, deliver and perform each of
the Joint Venture Documents and the transactions
contemplated thereby; due execution and delivery by DT
of the Joint Venture Documents
3. Binding effect and enforceability against DT of the
Joint Venture Documents under New York law
4. Absence of conflicts as a result of the execution,
delivery and performance by DT of the Joint Venture
Documents with (i) the Satzung or other governing
documents of DT and (ii) Applicable Laws of the European
Union, the Republic of Germany, the State of New York
and the federal laws of the United States of America
5. Receipt of all Governmental Approvals needed by DT under
the Applicable Laws of the European Union, the Republic
of Germany, the State of New York and the federal laws
of the United States of America in connection with the
transactions contemplated by the Joint Venture Documents
to be consummated by DT
6. Validity and enforceability under German law of the
provisions of the Joint Venture Documents which provide
that such documents are governed by New York law
7. Validity and enforceability under German law of the
waiver by DT in Section 23.14 of the Joint Venture
Agreement and in the corresponding sections of the other
Joint Venture Documents
8. Validity and enforceability under German law of the
agreement of DT to arbitrate all disputes arising under
any of the Section 21.1 Agreements pursuant to Article
21 of the Joint Venture Agreement and the corresponding
sections of the other Joint Venture Documents
9. Enforceability against DT by the courts of Germany of a
final arbitration award rendered against DT by an
arbitration panel in accordance with Article 21 of the
Joint Venture Agreement with respect to a Dispute
arising under any of the Section 21.1 Agreements
<PAGE>
SCHEDULE 13.2(f)(iii)
Atlas Joint Venture Opinions
Counsel to Atlas reasonably satisfactory to Sprint shall deliver
an opinion or opinions which address favorably the matters
described below and which are in form and substance reasonably
satisfactory to Sprint. Such opinion or opinions may contain such
appropriate assumptions and such qualifications and limitations as
are reasonably satisfactory to Sprint.
1. Organization, existence, power and authority of Atlas
2. Authority of Atlas to execute, deliver and perform each
of the Joint Venture Documents and the transactions
contemplated thereby; due execution and delivery by
Atlas of the Joint Venture Documents
3. Binding effect and enforceability against Atlas of the
Joint Venture Documents under New York law
4. Absence of conflicts as a result of the execution,
delivery and performance by Atlas of the Joint Venture
Documents with (i) the Atlas Joint Venture Documents or
other governing documents of Atlas and (ii) Applicable
Laws of the European Union, Belgium, the State of New
York and the federal laws of the United States of
America
5. Receipt of all Governmental Approvals needed by Atlas
under the Applicable Laws of the European Union,
Belgium, the State of New York and the federal laws of
the United States of America in connection with the
transactions contemplated by the Joint Venture Documents
to be consummated by Atlas
6. Validity and enforceability under Belgian law of the
provisions of the Joint Venture Documents which provide
that such documents are governed by New York law
7. Validity and enforceability under Belgian law of the
waiver by Atlas in Section 23.14 of the Joint Venture
Agreement and in the corresponding sections of the other
Joint Venture Documents
8. Validity and enforceability under Belgian law of the
agreement of Atlas to arbitrate all disputes arising
under any of the Section 21.1 Agreements pursuant to
Article 21 of the Joint Venture Agreement and the
corresponding sections of the other Joint Venture
Documents
9. Enforceability against Atlas by the courts of Belgium of
a final arbitration award rendered against Atlas by an
arbitration panel in accordance with Article 21 of the
Joint Venture Agreement with respect to a Dispute
arising under any of the Section 21.1 Agreements
<PAGE>
SCHEDULE 13.3(f)(i)
Sprint Joint Venture Opinions
Counsel to Sprint reasonably satisfactory to FT and DT shall
deliver an opinion or opinions which address favorably the matters
described below and which are in form and substance reasonably
satisfactory to FT and DT. Such opinion or opinions may contain
such appropriate assumptions and such qualifications and
limitations as are reasonably satisfactory to FT and DT.
1. Organization, existence, power and authority of Sprint
2. Authority of Sprint to execute, deliver and perform each
of the Joint Venture Documents and the transactions
contemplated thereby; due execution and delivery by
Sprint of the Joint Venture Documents
3. Binding effect and enforceability against Sprint of the
Joint Venture Documents under New York law and Kansas
law (assuming, with respect to Kansas Law, that Kansas
law is the governing law)
4. Absence of conflicts as a result of the execution,
delivery and performance by Sprint of the Joint Venture
Documents with (i) any provision of the Articles of
Incorporation or bylaws of Sprint and (ii) Applicable
Laws of the States of Kansas and New York and the
federal laws of the United States of America
5. Receipt of all Governmental Approvals needed by Sprint
under the Applicable Laws of the European Union, the
States of New York and Kansas and the federal laws of
the United States of America in connection with the
transactions contemplated by the Joint Venture Documents
to be consummated by Sprint
6. Validity and enforceability under Kansas and New York
laws of the agreement of Sprint to arbitrate all
disputes arising under any of the Section 21.1
Agreements pursuant to Article 21 of the Joint Venture
Agreement and the corresponding sections of the other
Joint Venture Documents
7. Enforceability against Sprint by the courts of Kansas
and Federal courts sitting in Kansas of a final
arbitration award rendered against Sprint by an
arbitration panel in accordance with Article 21 of the
Joint Venture Agreement with respect to a Dispute
arising under any of the Section 21.1 Agreements
<PAGE>
SCHEDULE 13.3(f)(ii)
Sprint Sub Joint Venture Opinions
Counsel to Sprint Sub reasonably satisfactory to FT and DT shall
deliver an opinion or opinions which address favorably the matters
described below and which are in form and substance reasonably
satisfactory to FT and DT. Such opinion or opinions may contain
such appropriate assumptions and such qualifications and
limitations as are reasonably satisfactory to FT and DT.
1. Organization, existence, power and authority of Sprint
Sub
2. Authority of Sprint Sub to execute, deliver and perform
each of the Joint Venture Documents and the transactions
contemplated thereby; due execution and delivery by
Sprint Sub of the Joint Venture Documents
3. Binding effect and enforceability against Sprint Sub of
the Joint Venture Documents under New York law and
Kansas law (assuming, with respect to Kansas Law, that
Kansas law is the governing law)
4. Absence of conflicts as a result of the execution,
delivery and performance by Sprint Sub of the Joint
Venture Documents with (i) any provision of the Articles
of Incorporation or bylaws of Sprint Sub and (ii)
Applicable Laws of the States of Kansas and New York and
the federal laws of the United States of America
5. Receipt of all Governmental Approvals needed by Sprint
Sub under the Applicable Laws of the European Union, the
States of New York and Kansas and the federal laws of
the United States of America in connection with the
transactions contemplated by the Joint Venture Documents
to be consummated by Sprint Sub
6. Validity and enforceability under Kansas and New York
laws of the agreement of Sprint Sub to arbitrate all
disputes arising under any of the Section 21.1
Agreements pursuant to Article 21 of the Joint Venture
Agreement and the corresponding sections of the other
Joint Venture Documents
7. Enforceability against Sprint Sub by the courts of
Kansas and Federal courts sitting in Kansas of a final
arbitration award rendered against Sprint Sub by an
arbitration panel in accordance with Article 21 of the
Joint Venture Agreement with respect to a Dispute
arising under any of the Section 21.1 Agreements
<PAGE>
SCHEDULE 14.1(c)
Sprint Governmental Approvals
1. Notification pursuant to the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the expiration or
termination of all applicable waiting periods thereunder and
any extensions thereof.
2. Exemption by the Commission of the European Communities,
pursuant to Article 85(3) of the Treaty of Rome, of the Joint
Venture Agreement and each other Operative Agreement and the
Transactions from the operation of Article 85(1) of the
Treaty of Rome.
3. The approvals of the French minister in charge of economic
affairs and finance (ministre charge de l'economie et des
finances) and the French minister in charge of posts and
telecommunications (ministre charge des postes et des
telecommunications) to carry out the Transactions.
4. If applicable, the approval of the Bundeskartellamt to carry
out the Transactions.
5. The issuance by the FCC of an order as described in Section
13.1(a)(v).
6. Satisfaction of all applicable requirements under any United
States state telecommunications laws or imposed by any United
States state public service commissions.
7. Satisfaction of all applicable requirements under the rules
and regulations promulgated by or in respect of the United
States Department of Defense.
<PAGE>
SCHEDULE 14.1(e)
Litigation Involving Sprint and Sprint Sub
1. Any Proceeding relating to the Governmental Approvals
described in Schedule 14.1(c).
<PAGE>
SCHEDULE 14.2(a)(iii)
FT Governmental Approvals
1. Notification pursuant to the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the expiration or
termination of all applicable waiting periods thereunder and
any extensions thereof.
2. An exemption from the Commission of the European Communities
pursuant to Article 85(3) of the Treaty of Rome exempting
this Agreement, each other Operative Agreement and the
Transactions from the operation of Article 85(1) of the
Treaty of Rome.
3. The approvals of the French minister in charge of economic
affairs and finance (ministre charge de l'economie et des
finances) and the French minister in charge of posts
and telecommunications (ministre charge des postes et des
telecommunications) to carry out the Transactions.
4. If applicable, the approval of the Bundeskartellamt to carry
out the Transactions.
5. The issuance by the FCC of an order as described in
Section 13.1(a)(v).
<PAGE>
SCHEDULE 14.2(a)(v)
Litigation Involving FT
1. Proceedings in connection with the Governmental Approvals
described in Schedule 14.2(a)(iii).
<PAGE>
SCHEDULE 14.2(b)(ii)
FT Governmental
Approvals Relating to Atlas
Unless otherwise agreed by the Sprint Parties, to be delivered
within five (5) days after the Atlas Signing Date in accordance
with Section 15.36.
<PAGE>
SCHEDULE 14.3(a)(iii)
DT Governmental Approvals
1. Notification pursuant to the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the expiration or
termination of all applicable waiting periods thereunder and
any extensions thereof.
2. An exemption from the Commission of the European Communities
pursuant to Article 85(3) of the Treaty of Rome exempting
this Agreement, each other Operative Agreement and the
Transactions from the operation of Article 85(1) of the
Treaty of Rome.
3. If applicable, the approvals of the French minister in charge
of economic affairs and finance (ministre charge de
l'economie et des finances) and the French minister in charge
of posts and telecommunications (ministre charge des postes
et des telecommunications) to carry out the Transactions.
4. If applicable, the approval of the Bundeskartellamt to carry
out the Transactions.
5. The issuance by the FCC of an order as described in Section
13.1(a)(v).
<PAGE>
SCHEDULE 14.3(a)(v)
Litigation Involving DT
1. Proceedings in connection with the Governmental Approvals
described in Schedule 14.3(a)(iii).
2. Datex-P investigation before the German government for
alleged cross-subsidization.
<PAGE>
SCHEDULE 14.3(b)(ii)
DT Governmental
Approvals Relating to Atlas
Unless otherwise agreed by the Sprint Parties, to be delivered
within five (5) days after the Atlas Signing Date in accordance
with Section 15.36.
<PAGE>
SCHEDULE 14.4(c)
Atlas Governmental Approvals
Unless otherwise agreed by the Sprint Parties, to be delivered
within five (5) days after the Atlas Signing Date in accordance
with Section 15.36.
<PAGE>
SCHEDULE 14.4(e)
Litigation Involving Atlas
Unless otherwise agreed by the Sprint Parties, to be delivered
within five (5) days after the Atlas Signing Date in accordance
with Section 15.36.
<PAGE>
Exhibit 10(b)
INVESTMENT AGREEMENT
Among
SPRINT CORPORATION,
FRANCE TELECOM
and
DEUTSCHE TELEKOM AG
Dated as of July 31, 1995
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
<S> <C>
ARTICLE I
DEFINITIONS
ARTICLE II
PURCHASE AND SALE OF SHARES
Section 2.1. First Closing 36
Section 2.2. Additional Preference Stock Closing 43
Section 2.3. Supplemental Preference Stock Closing 46
Section 2.4. Deferred Common Stock Closing 48
Section 2.5. Purchases of Optional Shares 49
Section 2.6. Antidilution 53
Section 2.7. Reduction of Purchased Shares 53
Section 2.8. Effect of Conversion 53
ARTICLE III
CONDITIONS TO THE FIRST CLOSING
Section 3.1. Conditions to Each Party's Obligations 54
Section 3.2. Conditions to the Buyers' Obligations 57
Section 3.3. Conditions to the Company's Obligations 60
ARTICLE IV
CONDITIONS TO AN ADDITIONAL
PREFERENCE STOCK CLOSING,
SUPPLEMENTAL PREFERENCE STOCK CLOSING
AND DEFERRED COMMON STOCK CLOSING
Section 4.1. Condition to Each Party's Obligations 61
Section 4.2. Conditions to the Buyers' Obligations 62
Section 4.3. Conditions to the Company's Obligations 64
Section 4.4. Effect of Certain Breaches 66
ARTICLE V
CONDITIONS TO THE OPTIONAL SHARES CLOSING
Section 5.1. Condition to Each Party's Obligations 67
Section 5.2. Conditions to the Buyers' Obligations 67
Section 5.3. Conditions to the Company's Obligations 70
Section 5.4. Effect of Certain Breaches 72
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 6.1. Organization, Qualification, Etc. 73
Section 6.2. Capital Stock and Other Matters 73
Section 6.3. Validity of Shares 74
Section 6.4. Corporate Authority; No Violation 74
Section 6.5. Company Reports and Financial Statements 76
Section 6.6. Absence of Certain Changes or Events 77
Section 6.7. Investigations; Litigation 77
Section 6.8. Proxy Statement; Other Information 77
Section 6.9. Certain Tax Matters 78
Section 6.10. Amendments of the Rights Agreement 78
Section 6.11. Other Registration Rights 79
Section 6.12. Takeover Statutes 79
Section 6.13. Vote Required; Board Recommendation 80
Section 6.14. Long Distance Business 81
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF THE BUYERS
Section 7.1. Representations and Warranties of FT 81
Section 7.2. Representations and Warranties of DT 84
ARTICLE VIII
COVENANTS OF THE COMPANY
Section 8.1. Conduct of Business by the Company 86
Section 8.2. Access and Information 88
Section 8.3. No Solicitation, Etc. 88
Section 8.4. Stockholders Approval 90
Section 8.5. Proxy Statement Filings 90
Section 8.6. Use of Proceeds 91
Section 8.7. Advice of Changes 91
Section 8.8. No Action Relating to Takeover Statutes;
Applicability of Future Statutes and
Regulations 91
Section 8.9. Spin-offs 91
Section 8.10. Conduct of Business of Cellular 92
ARTICLE IX
OTHER AGREEMENTS
Section 9.1. Information for Inclusion
in the Proxy Statement 95
Section 9.2. Further Assurances 95
Section 9.3. Public Announcements 97
Section 9.4. Notification 97
Section 9.5. Brokers or Finders 98
Section 9.6. Notice of Proposals Regarding Acquisition
Transactions 99
Section 9.7. Execution of Standstill Agreement 99
Section 9.8. Confidentiality Agreements 99
Section 9.9. Actions by FT and DT in Connection
with the Cellular Spin-off 99
Section 9.10. Adjustment Certificates 99
ARTICLE X
TERM AND TERMINATION
Section 10.1. Termination 100
Section 10.2. Reimbursement of Expenses 103
ARTICLE XI
MISCELLANEOUS
Section 11.1. Survival of Representations and
Warranties 104
Section 11.2. Assignment 106
Section 11.3. Entire Agreement 107
Section 11.4. Expenses 107
Section 11.5. Waiver, Amendment, Etc. 107
Section 11.6. Binding Agreement; No Third Party
Beneficiaries 108
Section 11.7. Notices 108
SECTION 11.8. GOVERNING LAW; DISPUTE RESOLUTION;
EQUITABLE RELIEF 109
Section 11.9. Severability 111
Section 11.10. Translation 111
Section 11.11. Table of Contents; Headings;
Counterparts 112
Section 11.12. Waiver of Immunity 112
Section 11.13. Continuing Director Approval 112
Section 11.14. Currency 114
</TABLE>
EXHIBIT A - Form of Qualified Subsidiary Standstill Agreement
EXHIBIT B - Form of Registration Rights Agreement
EXHIBIT C - Form of Standstill Agreement
EXHIBIT D - Form of Stockholders' Agreement
EXHIBIT E - Form of Strategic Investor Standstill Agreement
EXHIBIT F - Matters to be addressed by Company Counsel Opinions
(First Closing)
EXHIBIT G - Matters to be addressed by FT Counsel Opinions
(First Closing)
EXHIBIT H - Matters to be addressed by DT Counsel Opinions
(First Closing)
EXHIBIT I - Matters to be addressed by Company General Counsel
Opinion (Article IV Closing)
EXHIBIT J - Matters to be addressed by Company General Counsel
Opinion (Optional Shares Closing)
EXHIBIT K - Form of Assumption Agreement
Schedule A - Associate Positions of FT
Schedule B - Associate Positions of DT
Schedule C - Permitted Cellular Actions
<PAGE>
INVESTMENT AGREEMENT
INVESTMENT AGREEMENT, dated as of July 31, 1995
(the "Agreement"), among Sprint Corporation, a corporation
organized under the laws of Kansas (the "Company"); France
Telecom, an exploitant public formed under the laws of
France ("FT"); and Deutsche Telekom AG, an
Aktiengesellschaft formed under the laws of Germany ("DT").
RECITALS
WHEREAS, the Company, Sprint Global Venture, Inc.,
a wholly-owned subsidiary of the Company ("Sprint Sub"), FT
and DT have agreed to form a joint venture (the "Joint
Venture") to provide telecommunications services as provided
in the Joint Venture Agreement, dated as of June 22, 1995,
among FT, DT, the Company and Sprint Sub (the "Joint Venture
Agreement") and to pursue various telecommunications oppor-
tunities around the world as further provided therein; and
WHEREAS, FT and DT (each a "Buyer") desire to pur-
chase certain shares of capital stock from the Company and
the Company desires to sell such shares to FT and DT, all in
accordance with the terms and conditions hereof.
NOW, THEREFORE, in consideration of the mutual
covenants and obligations set forth herein, each of FT, DT
and the Company (each a "Party") agrees as follows:
ARTICLE I
DEFINITIONS
The following capitalized terms used in this
Agreement shall have the following meanings:
"Acquiring Person Statement" has the meaning set
forth in Section 6.8(a) hereof.
"Acquisition" means the acquisition by Cellular of
assets (which may include the acquisition of the common
equity interests in a Person) that constitute a business
that, prior to such acquisition, has been operated as a
company or a division or has otherwise been operated as a
separate business.
"Acquisition Proposal" has the meaning specified
in Section 8.3(a) hereof.
"Additional Preference Stock Closing" has the
meaning specified in Section 2.2(b) hereof.
"Additional Preference Stock Closing Date" has the
meaning set forth in Section 2.2(b) hereof.
"Additional Preference Stock Closing Notice" has
the meaning set forth in Section 2.2(c) hereof.
"Adjusted Cellular Price" means the Average
Cellular Price multiplied by the Capitalization Ratio.
"Affiliate" means, with respect to any Person, any other
Person that directly, or indirectly through one or more
intermediaries, Controls or is Controlled by, or is under
common Control with, such Person, provided that (a) no JV
Entity shall be deemed an Affiliate of any Party unless (i) FT,
DT and Atlas own a majority of the Voting Power of such JV
Entity and the Company does not have the Tie-Breaking Vote
(as defined in Section 18.1 of the Joint Venture Agreement), or
(ii) FT, DT or Atlas has the Tie-Breaking Vote; (b) FT, DT
and the Company shall not be deemed Affiliates of each other;
(c) Atlas shall be deemed an Affiliate of FT and DT; and
(d) the term "Affiliate" shall not include any Governmental
Authority of France or Germany or any other Person
Controlled, directly or indirectly, by any such Governmental
Authority, except in each case for FT, DT, Atlas
and any other Person directly, or indirectly through one or more
intermediaries, Controlled by FT, DT or Atlas.
"Amendment" means a Certificate of Amendment to the
Articles, satisfactory in form and substance to each Party.
"Applicable Law" means all applicable provisions of all (a)
constitutions, treaties, statutes, laws (including common law),
rules, regulations, ordinances or codes of any Governmental
Authority, and (b) orders, decisions, injunctions, judgments,
awards and decrees of any Governmental Authority.
"Articles" means the Articles of Incorporation of
the Company, as amended or supplemented from time to time.
"Article IV Closing" has the meaning specified in
Section 4.1 hereof.
"Associate" has the meaning ascribed to such term
in Rule 12b-2 under the Exchange Act, provided that when
used to indicate a relationship with FT or DT or their
respective Subsidiaries or Affiliates, the term "Associate"
shall mean (a) in the case of FT, any Person occupying any
of the positions listed on Schedule A hereto, and (b) in the
case of DT, any Person occupying any of the positions listed
on Schedule B hereto, provided, further, that, in each case,
no Person occupying any such position described in clause
(a) or (b) hereof shall be deemed an "Associate" of FT or
DT, as the case may be, unless the Persons occupying all
such positions described in clauses (a) and (b) hereof
Beneficially Own, in the aggregate, more than 0.2% of the
Voting Power of the Company.
"Atlas" means the company to be formed as a
societe anonyme under the laws of Belgium pursuant to the
Joint Venture Agreement, dated as of December 15, 1994,
between FT and DT, as amended.
"Average Cellular Price" means, subject to
adjustment as provided in the Class A Provisions, the
average of the Closing Prices of a share of Cellular Common
Stock for the 20 consecutive Trading Days on which such
shares are traded "regular way" starting on the first such
Trading Day after the Cellular Spin-off Date.
"Average Price" means, as to a security, the
average of the Closing Prices of a security for the 20
consecutive Trading Days ending on the fifteenth Trading Day
prior to the date of determination or ending on such other
date specified herein.
"Average Sprint Price" means, subject to
adjustment as provided in the Class A Provisions, the
Average Price of a share of Common Stock at the date of
determination specified herein. For purposes of this
definition, if any portion of the relevant determination
period occurs prior to the Cellular Spin-off and the Closing
Price of Common Stock on any Trading Day during the
determination period is quoted "ex" the distribution of
Cellular Common Stock, the Closing Price of the Common Stock
for such Trading Day will be adjusted by adding the product
of the Closing Price of the Cellular Common Stock for such
Trading Day multiplied by the Capitalization Ratio.
"Beneficial Owner" (including, with its correl-
ative meanings, "Beneficially Own" and "Beneficial Owner-
ship"), with respect to any securities, means any Person
which:
(a) has, or any of whose Affiliates or Associates
has, directly or indirectly, the right to acquire
(whether such right is exercisable immediately or only
after the passage of time) such securities pursuant to
any agreement, arrangement or understanding (whether or
not in writing), including, without limitation, pur-
suant to this Agreement and the Stockholders' Agree-
ment, or upon the exercise of conversion rights, ex-
change rights, warrants or options, or otherwise;
(b) has, or any of whose Affiliates or Associates
has, directly or indirectly, the right to vote or dis-
pose of (whether such right is exercisable immediately
or only after the passage of time) or "beneficial
ownership" of (as determined pursuant to Rule 13d-3
under the Exchange Act but including all such secu-
rities which a Person has the right to acquire bene-
ficial ownership of whether or not such right is ex-
ercisable within the 60-day period specified therein)
such securities, including pursuant to any agreement,
arrangement or understanding (whether or not in writ-
ing); or
(c) has, or any of whose Affiliates or Associates
has, any agreement, arrangement or understanding
(whether or not in writing) for the purpose of acquir-
ing, holding, voting or disposing of any securities
which are Beneficially Owned, directly or indirectly,
by any other Person (or any Affiliate thereof),
provided that Class A Stock and Common Stock held by one of
FT or DT or its Affiliates or Associates shall not also be
deemed to be Beneficially Owned by the other of FT or DT or
its Affiliates or Associates.
"Board of Directors" means the board of directors
of the Company.
"Burdensome Condition" means any requirement or
condition that: (a) imposes any material limitation on the
ability or right of any Party or any of their respective
Subsidiaries to hold, or requires any Party or any of their
respective Subsidiaries to dispose of, any material interest
in any material portion of the assets of such Party, as the
case may be, and its respective Subsidiaries taken as a
whole; (b) imposes any material limitation on the ability or
right of any Party or any of their respective Subsidiaries
to conduct any business (other than the investment contem-
plated by this Agreement, the Transactions or the Atlas
Transactions (each as defined in the Joint Venture Agree-
ment)) which such Party or any of their respective Subsid-
iaries has publicly announced as of the date hereof an
intention to conduct and which business is material in
relation to such Party, as the case may be, and its respec-
tive Subsidiaries, taken as a whole; (c) materially limits
the ability or right of any Party, Sprint Sub or Atlas to
acquire or hold, or requires any Party, Sprint Sub or Atlas
to dispose of, any material interest in the GBN Group or a
Regional Operating Group (each as defined in the Joint
Venture Agreement); (d) materially limits the ability or
right of any Party, Sprint Sub or Atlas to exercise its
governance rights with respect to the Joint Venture or any
of the JV Entities; (e) otherwise would have a Material
Adverse Effect on the Joint Venture or would be materially
adverse to the ability of any Party, Sprint Sub or Atlas to
receive the economic benefits of the Joint Venture; (f) ma-
terially limits the ability or right of either FT or DT to
acquire or hold or dispose of any shares of Class A Stock;
(g) materially limits the ability or right of FT or DT to
exercise its rights relating to, or receive the economic
benefits of, the investment pursuant to this Agreement, the
Other Agreements, the Bylaws as amended by the Bylaws
Amendment or the Articles as amended by the Amendment; (h)
materially and adversely affects the ability of any Party to
perform its obligations under, or puts in doubt in any
material respect the validity of, this Agreement, the Other
Agreements, the Bylaws as amended by the Bylaws Amendment or
the Articles as amended by the Amendment; (i) otherwise
would have a Material Adverse Effect on such Party and its
Subsidiaries taken as a whole; or (j) in the case of a
Buyer, would affect materially and adversely the intrinsic
value of an investment in the Company's equity securities
(provided that a change in the Market Price of the Company's
equity securities arising from any such requirement or
condition shall not, in and of itself, be deemed to affect
materially and adversely the intrinsic value of an
investment in the Company's equity securities) (any of the
foregoing, a "Burdensome Condition"), provided that if each
Party affected, directly or indirectly, by any condition or
requirement (or, in the case of a Subsidiary so affected,
the Parent or Parents thereof that are a Party or Parties)
provides a notice to each other Party stating that such
condition or requirement shall no longer be deemed a Burden-
some Condition, such condition or requirement shall no
longer be deemed a Burdensome Condition for any purpose
under this Agreement and provided, further, that no Party
may declare a Burdensome Condition under clause (b) if such
material limitation is imposed pursuant to Section 310(b) of
the Communications Act due to the investment contemplated by
this Agreement and such material limitation would not be
imposed but for the investment contemplated by this Agree-
ment. For purposes of this definition, no Qualified Subsid-
iary or Qualified Stock Purchaser shall be deemed to be a
"Party."
"Business Combination Statute" shall have the
meaning set forth in Section 3.2(e) hereof.
"Business Day" means any day other than a day on
which commercial banks in The City of New York, Paris,
France, or Frankfurt am Main, Germany, are required or
authorized by law to be closed.
"Buyer" has the meaning set forth in the second
WHEREAS clause.
"Bylaws" means the Bylaws of the Company, as
amended or supplemented from time to time.
"Bylaws Amendment" means an amendment to the
Bylaws, satisfactory in form and substance to each Party.
"Capitalization Ratio" means the quotient of the
number of shares of Cellular Common Stock outstanding
immediately following the Cellular Spin-off, divided by the
number of shares of Common Stock outstanding immediately
following the Cellular Spin-off.
"Cellular" means (a) until immediately prior to
the Cellular Spin-off Date, the Cellular and Wireless
Division, (b) immediately prior to the Cellular Spin-off
Date, the direct or indirect wholly owned subsidiary of the
Company owning the assets of the Cellular and Wireless
Division, the shares of which subsidiary are to be
distributed to the Company's stockholders in connection with
the Cellular Spin-off, and (c) on and after the Cellular
Spin-off Date, such company, provided that the term
"Cellular" shall not include any assets retained by the
Company after the Cellular Spin-off Date.
"Cellular and Wireless Division" means the
Cellular and Wireless Communications Services Division of
the Company.
"Cellular Common Stock" means the shares of common
stock of Cellular.
"Cellular Guarantee" means any liability,
contingent or otherwise, of the Company or any of its
Affiliates (other than Cellular, the Subsidiaries of
Cellular and any Affiliates Controlled by Cellular) to make
any payment with respect to, or cause performance of, any
indebtedness or lease, purchase or other obligation of
Cellular that is to be paid, discharged or otherwise
performed after the Cellular Spin-off Date, including
without limitation, liabilities and obligations such as
keepwell agreements and arrangements to make payments for
services irrespective of the non-delivery of such services.
"Cellular Liabilities" means all liabilities and
obligations of any nature of Cellular and, as to periods
when Cellular is operated as a division of the Company, all
liabilities and obligations of the Company whether known or
unknown, absolute, accrued, contingent or otherwise, and
whether due or to become due, arising out of or directly
relating to the operation of Cellular's business.
"Cellular Spin-off" means the distribution by the
Company on a pro rata basis to the holders of the Common
Stock of shares of Cellular Common Stock representing all of
the common equity of Cellular.
"Cellular Spin-off Date" means the date on which
shares of Cellular Common Stock are distributed to the
holders of Common Stock.
"Cellular Spin-off Reduction Factor" means,
subject to adjustment as provided in the Class A Provisions,
(a) $5.25, if the Adjusted Cellular Price is not less than
$3.25 or more than $7.25, or (b) if the Adjusted Cellular
Price is more than $7.25 but not more than $8.25, $5.25 plus
50% of the difference between the Adjusted Cellular Price
and $7.25, or (c) if the Adjusted Cellular Price is more
than $8.25, $5.75 plus the difference between the Adjusted
Cellular Price and $8.25, or (d) if the Adjusted Cellular
Price is less than $3.25 but not less than $2.25, $5.25
minus 50% of the difference between $3.25 and the Adjusted
Cellular Price or (e) if the Adjusted Cellular Price is
below $2.25, $4.75 minus the difference between $2.25 and
the Adjusted Cellular Price. Notwithstanding the foregoing,
(i) if the Net Cellular Indebtedness immediately after the
Cellular Spin-off exceeds $2.955, each dollar amount set
forth in the first sentence of this definition (other than
the Adjusted Cellular Price) shall be reduced dollar-for-dollar
by such excess; (ii) if $2.955 exceeds the Net
Cellular Indebtedness, each such dollar amount shall be
increased dollar-for-dollar by such excess; and (iii) if
Cellular has effected any Acquisition and/or Disposition
after June 22, 1995 and prior to the Cellular Spin-off Date,
such dollar amounts shall be increased by the Net Cellular
Acquisition Amount, if positive, and decreased by the
absolute value of the Net Cellular Acquisition Amount, if
negative.
"Cellular System" means a domestic public cellular
radio telecommunications service system licensed under Part
22 of the rules of the FCC, as amended from time to time.
"Change of Control" means a:
(a) decision by the Board of Directors to sell
Control of the Company or not to oppose a third party
tender offer for Voting Securities of the Company rep-
resenting more than 35% of the Voting Power of the
Company; or
(b) change in the identity of a majority of the
Directors due to (i) a proxy contest (or the threat to
engage in a proxy contest) or the election of Directors
by the holders of Preferred Stock; or (ii) any unsolic-
ited tender, exchange or other purchase offer which has
not been approved by a majority of the Independent
Directors,
provided that a Strategic Merger shall not be deemed to be a
Change of Control and, provided, further, that any trans-
action between the Company and FT and DT or otherwise
involving FT and DT and any of their direct or indirect
Subsidiaries which are party to a Contract therefor shall
not be deemed to be a Change of Control.
"Class A Common Issuance Date" means the date the
Company first issues shares of Class A Common Stock.
"Class A Common Stock" means the Class A Common
Stock of the Company.
"Class A Conversion Shares" means the shares of
Class A Common Stock or Common Stock into which the then
outstanding shares of Class A Preference Stock (or, as the
case may be, a specified number of shares of Class A
Preference Stock) would, at the time of determination, be
convertible at the then applicable Conversion Price if the
conditions to establishment of the Conversion Date had been
met.
"Class A Holders" means the holders of the Class A
Stock.
"Class A Preference Stock" means the Class A
Preference Stock of the Company.
"Class A Provisions" means that portion of Para-
graph 7 of the Amendment entitled "GENERAL PROVISIONS RELAT-
ING TO CLASS A STOCK."
"Class A Stock" means the Class A Common Stock or,
if shares of the Class A Preference Stock are outstanding,
the Class A Preference Stock.
"Closing Price" means, with respect to a security
on any day, the last sale price, regular way, or in case no
such sale takes place on such day, the average of the clos-
ing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if such security
is not listed or admitted to trading on such exchange, as
reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal
national securities exchange on which the security is listed
or admitted to trading or, if the security is not listed or
admitted to trading on any national securities exchange, the
last quoted sale price or, if not so quoted, the average of
the high bid and low asked prices in the over-the-counter
market, as reported by NASDAQ or such other system then in
use, or, if on any such date such security is not quoted by
any such organization, the average of the closing bid and
asked prices as furnished by a professional market maker
making a market in the security selected in good faith by
the Board of Directors. If the security is not publicly
held or so listed or publicly traded, "Closing Price" means
the Fair Market Value of such security.
"Code" means the Internal Revenue Code of 1986, as
amended.
"Common Stock" means the Common Stock of the
Company.
"Communications Act" means the Communications Act
of 1934, as amended, and the rules and regulations from time
to time promulgated thereunder. Any reference to a par-
ticular section of the Communications Act shall refer to
such section as the same may be hereafter renumbered or
otherwise amended.
"Company" has the meaning set forth in the pream-
ble.
"Company Disclosure Schedule" means the disclosure
schedule of the Company delivered to FT and DT on the date
hereof.
"Continuing Director" means any Director who is
unaffiliated with the Buyers and their "affiliates" and
"associates" (as each such term is defined in Rule 12b-2
under the Securities Exchange Act of 1934, as in effect on
October 1, 1982) and was a Director prior to the time that
any Buyer or any such affiliate or associate became an
Interested Stockholder (as such term is defined in the Fair
Price Provisions) and any successor of a Continuing Director
if such successor is not affiliated with any such Interested
Stockholder and is recommended or elected to succeed a
Continuing Director by a majority of Continuing Directors,
provided that such recommendation or election shall only be
effective if made at a meeting of Directors at which at
least seven Continuing Directors are present.
"Contract" means any loan or credit agreement,
note, bond, indenture, mortgage, deed of trust, lease, fran-
chise, contract, or other agreement, obligation, instrument
or binding commitment of any nature.
"Control" means, with respect to a Person or
Group, any of the following:
(a) ownership by such Person or Group of Votes
entitling it to exercise in the aggregate more than 35
percent of the Voting Power of the entity in question;
or
(b) possession by such Person or Group of the
power, directly or indirectly, (i) to elect a majority
of the board of directors (or equivalent governing
body) of the entity in question; or (ii) to direct or
cause the direction of the management and policies of
or with respect to the entity in question, whether
through ownership of securities, by contract or other-
wise.
"Control Share Acquisitions Plan" means the plan
of FT and DT and, if applicable, certain of their Qualified
Subsidiaries identified and described in the Acquiring
Person Statement to make a control share acquisition, within
the meaning of the Kansas Control Share Acquisitions
Statute, for one-fifth or more, but less than one-third, of
all the voting power of the Company, evidenced by this
Agreement and the Stockholders' Agreement.
"Conversion Date" has the meaning specified in
Section 3(a)(i) of the Class A Provisions.
"Conversion Price" means the applicable conversion
price for shares of Class A Preference Stock provided for in
Section 3(b) of the Class A Provisions.
"Core Business" means all businesses in the fields
of telecommunications and information technology and
applications, and equipment, software applications and
consumer and business services related thereto or making use
of the technology thereof, including value-added consumer
and business services generated through or as a result of
underlying telecommunications services using all technology
(voice, data and image) and physical transport, network
intelligence, and software applications, and cable tele-
vision (but not including any programming or content-related
activities with respect thereto).
"Damages" has the meaning specified in Sec-
tion 11.1 hereof.
"Deferred Common Stock Closing" has the meaning
specified in Section 2.4(b) hereof.
"Deferred Common Stock Closing Date" has the
meaning specified in Section 2.4(b) hereof.
"Director" means a member of the Board of Direc-
tors.
"Disclosure Schedules" means the Company Disclo-
sure Schedule, the FT Disclosure Schedule and the DT
Disclosure Schedule.
"Disposition" means the disposition by Cellular of
assets (which may include the disposition of the common
equity interests in a Person) that constitute a business
that, prior to such disposition, has been operated as a
company or a division or has otherwise been operated as a
separate business.
"DT" has the meaning set forth in the preamble.
"DT Disclosure Schedule" means the disclosure
schedule of DT delivered to the Company on the date hereof.
"DT Investor Confidentiality Agreement" means the
confidentiality agreement between the Company and DT,
reasonably satisfactory in form and substance to each Party.
"ESMR" means any commercial mobile radio service
and the resale of such service, of the type authorized under
the rules for Specialized Mobile Radio Services designated
under Subpart S of Part 90 of the FCC's rules or similar
Applicable Laws of any other country in effect on the date
hereof, including the networking, marketing, distribution,
sales, customer interface and operations functions relating
thereto.
"Europe" means the current geographic area covered
by the following countries and territories located on the
European continent, plus, in the case of France, its terri-
tories and possessions located outside the European con-
tinent: Albania, Andorra, Austria, Belgium,
Bosnia-Hercegovina, Bulgaria, Croatia, Cyprus, Czech Republic,
Denmark, Estonia, Finland, France, Germany, Gibraltar,
Greece, Hungary, Iceland, Ireland, Italy, Latvia,
Liechtenstein, Lithuania, Luxembourg, Macedonia, Malta,
Monaco, Montenegro, Netherlands, Norway, Poland, Portugal,
Romania, San Marino, Serbia, Slovakia, Slovenia, Spain,
Sweden, Switzerland, Turkey, Ukraine, United Kingdom, and
Vatican City.
"Excess Shares" has the meaning set forth in
Section 2.5(a)(i) hereof.
"Exchange Act" means the Securities Exchange Act
of 1934, as amended, and the rules and regulations of the
SEC promulgated from time to time thereunder.
"Exempt Asset Divestitures" mean, with respect to
the Company and its Subsidiaries:
(a) Transfers of assets, shares or other equity
interests (other than Long Distance Assets) to joint
ventures approved by FT and DT prior to the Initial
Issuance Date;
(b) Transfers of assets, shares or other equity
interests (other than Long Distance Assets) to (i) any
entity in exchange for equity interests in such entity
if, after such transaction, the Company owns at least
51 percent of both the Voting Power and equity inter-
ests in such entity or (ii) any joint venture that is
an operating joint venture not controlled by any of its
principals and in which (x) the Company has the right,
acting alone, to disapprove (and thereby prohibit)
decisions relating to acquisitions and divestitures
involving more than 20 percent of the Fair Market Value
of such entity's assets, mergers, consolidations and
dissolution or liquidation of such entity and the
adoption of such entity's business plan and (y) Major
Competitors of the Joint Venture do not in the aggre-
gate own more than 20% of the equity interests or
Voting Power;
(c) transactions in which the Company exchanges
one or more (i) local exchange telephone businesses for
one or more such businesses or (ii) public cellular or
wireless radio telecommunications service systems for
one or more such systems, provided that the Company
shall not, directly or indirectly, receive cash in any
such transaction in an amount greater than 20 percent
of the Fair Market Value of the property or properties
Transferred by it;
(d) Transfers of assets, shares or other equity
interests (other than Long Distance Assets) by the
Company to any of its Subsidiaries, or by any of its
Subsidiaries to the Company or any other Subsidiary of
the Company;
(e) (i) any Spin-off of equity interests of a
wholly-owned Subsidiary that is not a Subsidiary which,
directly or indirectly, owns Long Distance Assets (for
purposes of this definition, the "Spun-off Entity"),
provided that, in the case of a Spin-off that is
consummated following the Initial Issuance Date, the
Class A Holders receive securities in the Spun-off
Entity of a separate class with rights no less favor-
able to the Class A Holders than those applicable to
the Class A Stock set forth in the Articles and the
Bylaws, or (ii) the Cellular Spin-off, unless a Notice
of Abandonment has been delivered;
(f) Transfers of assets (other than Long Distance
Assets) of the Company or any of its Subsidiaries that
are primarily or exclusively used in connection with
providing information technology or data processing
functions or services (collectively, for purposes of
this definition, the "IT Assets"), to any Person that
regularly provides information technology or data
processing functions or services on a commercial basis,
in connection with a contractual arrangement (for pur-
poses of this definition, an "IT Service Contract")
pursuant to which such Person undertakes to provide
information technology or data processing functions or
services to the Company or any of its Subsidiaries of
substantially the same nature as the services associa-
ted with the use of such assets prior to such Transfer
and upon commercially reasonable terms to the Company
as determined in good faith by the Company, provided
that (i) the term of such IT Service Contract shall be
for a period at least as long as the weighted average
useful life of such assets, or the Company or such
Subsidiary shall have the right to cause such IT Ser-
vice Contract to be renewed or extended for a period at
least as long as such weighted average useful life upon
commercially reasonable terms to the Company as deter-
mined in good faith by the Company, and (ii) the Trans-
fer of such assets will not materially and adversely
affect the operation of the Company; or
(g) Transfers of assets (other than Long Distance
Assets or IT Assets) of the Company or any of its Sub-
sidiaries to any Person in connection with any contrac-
tual arrangement (for purposes of this definition, a
"Non-IT Service Contract") pursuant to which such
Person undertakes to provide services to the Company or
any of its Subsidiaries of substantially the same
nature as the services associated with the use of such
assets prior to such Transfer and upon commercially
reasonable terms to the Company as determined in good
faith by the Company, provided, that (i) the Fair
Market Value of such assets, together with the Fair
Market Value of assets of the Company Transferred to
such Person or other Persons in related transactions,
do not represent more than five percent of the Fair
Market Value of the assets of the Company, (ii) the
Transfer of such assets will not materially and
adversely affect the operation of the Company, and
(iii) the term of such Non-IT Service Contract shall be
for a period at least as long as the weighted average
useful life of the assets so Transferred or the Company
or such Subsidiary has the right to cause such Non-IT
Service Contract to be renewed or extended for a period
at least as long as such weighted average useful life
upon commercially reasonable terms to the Company as
determined in good faith by the Company.
"Exempt Long Distance Asset Divestitures" mean,
with respect to the Company and its Subsidiaries:
(a) Transfers of Long Distance Assets to a Quali-
fied Joint Venture;
(b) Transfers of Long Distance Assets to any
entity if the Company and its Subsidiaries after such
transaction own at least 70 percent of both the Voting
Power and equity interests of such entity, provided
that if a Major Competitor of FT or DT or of the Joint
Venture holds equity interests in such entity, such
Major Competitor's equity interest and Votes in such
entity as a percentage of the Voting Power of such
entity shall not, directly or indirectly, exceed 20
percent;
(c) Transfers of Long Distance Assets pursuant to
an underwritten, widely-distributed public offering at
the conclusion of which the Company and its Subsidiar-
ies shall own at least 51 percent of both the Voting
Power and equity interests in the entity that owns such
Long Distance Assets;
(d) Transfers in the ordinary course of business
of Long Distance Assets determined by the Company to be
unnecessary for the orderly operation of the Company's
business, and sale-leasebacks of Long Distance Assets
and similar financing transactions after which the
Company and its Subsidiaries continue in possession and
control of the Long Distance Assets involved in such
transaction;
(e) Transfers of Long Distance Assets by the
Company to any of its Subsidiaries, or by any of its
Subsidiaries to the Company or any other Subsidiary of
the Company;
(f) Transfers of Long Distance Assets to FT or DT
or any assignee thereof pursuant to the Stockholders'
Agreement;
(g) any Spin-off of equity interests of a wholly-owned
Subsidiary which, directly or indirectly, owns
Long Distance Assets (for purposes of this definition,
the "Spun-off Entity"), provided that the Class A Hold-
ers receive securities in the Spun-off Entity of a
separate class with rights no less favorable to the
Class A Holders than those applicable to the Class A
Stock set forth in the Articles and the Bylaws;
(h) Transfers of Long Distance Assets of the
Company or any of its Subsidiaries that are primarily
or exclusively used in connection with providing infor-
mation technology or data processing functions or
services (collectively, for purposes of this definition
the "IT Assets"), to any Person that regularly provides
information technology or data processing functions or
services on a commercial basis, in connection with a
contractual arrangement (for purposes of this defini-
tion, an "IT Service Contract") pursuant to which such
Person undertakes to provide information technology or
data processing functions or services to the Company or
any of its Subsidiaries of substantially the same
nature as the services associated with the use of such
Long Distance Assets prior to such Transfer and upon
commercially reasonable terms to the Company as deter-
mined in good faith by the Company, provided that
(i) the term of such IT Service Contract shall be for a
period at least as long as the weighted average useful
life of such Long Distance Assets, or the Company or
such Subsidiary shall have the right to cause such IT
Service Contract to be renewed or extended for a period
at least as long as such weighted average useful life
upon commercially reasonable terms to the Company as
determined in good faith by the Company, and (ii) the
Transfer of such Long Distance Assets will not materi-
ally and adversely affect the operation of the Long
Distance Business. Any such IT Service Contract in-
volving Transfers of Long Distance Assets, including
any renewal or extension thereof, shall be deemed to be
a Long Distance Asset; or
(i) Transfers of Long Distance Assets (other than
IT Assets) of the Company or any of its Subsidiaries to
any Person in connection with any contractual arrange-
ment (for purposes of this definition, a "Non-IT Ser-
vice Contract") pursuant to which such Person under-
takes to provide services to the Company or any of its
Subsidiaries of substantially the same nature as the
services associated with the use of such Long Distance
Assets prior to such Transfer and upon commercially
reasonable terms to the Company as determined in good
faith by the Company, provided that (i) the Fair Market
Value of such Long Distance Assets, together with the
Fair Market Value of Long Distance Assets Transferred
to such Person or other Persons in related
transactions, do not represent more than three percent
of the Fair Market Value of the Long Distance Assets of
the Company, (ii) the Transfer of such Long Distance
Assets will not materially and adversely affect the
operation of the Long Distance Business, and (iii) the
term of such Non-IT Service Contract shall be for a
period at least as long as the weighted average useful
life of the Long Distance Assets so Transferred or the
Company or such Subsidiary has the right to cause such
Service Contract to be renewed or extended for a period
at least as long as such weighted average useful life
upon commercially reasonable terms to the Company as
determined in good faith by the Company. Any such
Non-IT Service Contract involving Transfers of Long Dis-
tance Assets, including any renewal or extension there-
of, shall be deemed to be a Long Distance Asset.
"Existing Confidentiality Agreement" means the
Confidentiality Agreement, among the Company, FT and DT,
dated as of February 2, 1994.
"Exon-Florio" means Section 721 of the Defense
Production Act of 1950, as amended, and the rules promulgat-
ed thereunder.
"Extraordinary Dividend" means, with respect to
capital stock of the Company, a cash dividend or other cash
distribution thereon, other than (a) a regular periodic
dividend payable in cash; or (b) a dividend payable in
accordance with the terms of the Preferred Stock or the
Class A Preference Stock.
"Fair Market Value" means, with respect to any
asset, shares or other property, the cash price at which a
willing seller would sell and a willing buyer would buy such
asset, shares or other property in an arm's-length nego-
tiated transaction without undue time restraints, as deter-
mined in good faith by a majority of the Independent Direc-
tors as certified in a resolution delivered to all of the
Class A Holders.
"Fair Price Provisions" means ARTICLE SEVENTH of
the Articles, and any successor provision thereto.
"FCC" means the Federal Communications Commission.
"First Closing" has the meaning specified in Sec-
tion 2.1(a) hereof.
"First Closing Company Notice" has the meaning
specified in Section 2.1(a) hereof.
"First Closing FT/DT Notice" has the meaning
specified in Section 2.1(a) hereof.
"First Closing Notice" means either a First
Closing Company Notice or a First Closing FT/DT Notice.
"Fix" or "Fixed" means in relation to the
Conversion Price, the initial establishment of the
Conversion Price in accordance with Section 3(b) of the
Class A Provisions.
"Fixed Closing Date" means the date of the first
closing to occur hereunder after the date on which the
Conversion Price is Fixed.
"France" means the Republic of France, including
French Guiana, Guadeloupe, Martinique and Reunion, and its
territories and possessions.
"French Translation Law" means the loi no 94-665
du 4 aout 1994 relative a l'emploi de la langue francaise.
"FT" has the meaning set forth in the preamble.
"FT Disclosure Schedule" means the disclosure
schedule of FT delivered to the Company on the date hereof.
"FT Investor Confidentiality Agreement" means the
confidentiality agreement between the Company and FT,
reasonably satisfactory in form and substance to each party.
"FT Law and Decrees" means (a) Loi no 90-568 du 2
juillet 1990 relative a l'organisation du service public de
la poste et des telecommunications (as amended by
Loi no 91-1406 du 31 decembre 1991 portant diverses dispositions
d'ordre social), (b) Decret no 90-1112 du 12 decembre 1990
portant statut de France Telecom (as amended by Decret no
95-460 du 25 avril 1995 modifiant le decret no 90-1112 du 12
decembre 1990 portant statut de France Telecom), (c) Decret
no 90-1213 du 29 decembre 1990 relatif au cahier des charges
de France Telecom et au code des postes et telecommunica-
tions, and (d) Decret no 94-185 du 24 fevrier 1994
approuvant une modification du cahier des charges de France
Telecom.
"GAAP" means United States generally accepted
accounting principles as in effect from time to time.
"Germany" means the Federal Republic of Germany.
"German Fee Regulations" has the meaning specified
in Section 10.2 hereof.
"Governmental Approval" means any consent, waiver,
grant, concession or License of, registration or filing
with, or declaration, report or notice to, any Governmental
Authority.
"Governmental Authority" means any federation,
nation, state, sovereign, or government, any federal, supra-
national, regional, state or local political subdivision,
any governmental or administrative body, instrumentality,
department or agency or any court, tribunal, administrative
hearing body, arbitration panel, commission or other similar
dispute resolving panel or body, and any other entity exer-
cising executive, legislative, judicial, regulatory or
administrative functions of a government, provided that the
term "Governmental Authority" shall not include FT, DT,
Atlas or any of their respective Subsidiaries.
"Group" means any group within the meaning of
Section 13(d)(3) of the Exchange Act.
"HSR Act" has the meaning specified in Sec-
tion 3.1(a) hereof.
"Independent Director" means any member of the
Board of Directors who (a) is not an officer or employee of
the Company, or any Class A Holder, or any of their respec-
tive Subsidiaries, (b) is not a former officer of the Compa-
ny, or any Class A Holder, or any of their respective Sub-
sidiaries, (c) does not, in addition to such person's role
as a Director, act on a regular basis, either individually
or as a member or representative of an organization, serving
as a professional adviser, legal counsel or consultant to
the Company, or any Class A Holder, or their respective Sub-
sidiaries, if, in the opinion of the Nominating Committee of
the Board of Directors of the Company (the "Nominating
Committee") or the Board of Directors if a Nominating Com-
mittee is not in existence, such relationship is material to
the Company, any Class A Holder, or the organization so
represented or such person, and (d) does not represent, and
is not a member of the immediate family of, a person who
would not satisfy the requirements of the preceding claus-
es (a), (b) and (c) of this sentence. A person who has been
or is a partner, officer or director of an organization that
has customary commercial, industrial, banking or underwrit-
ing relationships with the Company, any Class A Holder, or
any of their respective Subsidiaries, that are carried on in
the ordinary course of business on an arms-length basis and
who otherwise satisfies the requirements set forth in claus-
es (a), (b), (c) and (d) of the first sentence of this
definition, may qualify as an Independent Director, unless,
in the opinion of the Nominating Committee or the Board of
Directors if a Nominating Committee is not in existence,
such person is not independent of the management of the
Company, or any Class A Holder, or any of their respective
Subsidiaries, or the relationship would interfere with the
exercise of independent judgment as a member of the Board of
Directors. A person who otherwise satisfies the require-
ments set forth in clauses (a), (b), (c) and (d) of the
first sentence of this definition and who, in addition to
fulfilling the customary director's role, also provides
additional services directly for the Board of Directors and
is separately compensated therefor, would nonetheless quali-
fy as an Independent Director. Notwithstanding anything to
the contrary contained in this definition, each Director as
of the date hereof who is not an executive officer of the
Company shall be deemed to be an Independent Director here-
under.
"Initial Conversion Price" means the Conversion
Price first Fixed.
"Initial Issuance Date" means the first date that
any shares of Class A Stock are issued.
"Investment Completion Date" means the date of the
Supplemental Preference Stock Closing or the Class A Common
Issuance Date, whichever shall first occur.
"Joint Venture" has the meaning specified in the
first WHEREAS clause.
"Joint Venture Agreement" has the meaning speci-
fied in the first WHEREAS clause.
"Joint Venture Documents" mean the Joint Venture
Agreement and the other Operative Agreements (as defined in
the Joint Venture Agreement).
"JV Entity" has the meaning set forth in the Joint
Venture Agreement.
"Kansas Control Share Acquisitions Statute" means
Kan. Stat. Ann. Section 17-1286 et seq. (1988).
"License" means any license, ordinance, authoriza-
tion, permit, certificate, variance, exemption, order, fran-
chise or approval, domestic or foreign.
"Lien" means any mortgage, pledge, security inter-
est, adverse claim, encumbrance, lien (statutory or other-
wise) or charge of any kind (including any agreement to give
any of the foregoing, any conditional sale or other title
retention agreement, any lease in the nature thereof, and
the filing of or agreement to give any financing statement
under the Uniform Commercial Code or similar Applicable Law
of any jurisdiction) or any other type of preferential
arrangement for the purpose, or having the effect, of pro-
tecting a creditor against loss or securing the payment or
performance of an obligation.
"Lien Transfer" shall mean the granting of any
Lien on any Long Distance Asset, other than:
(a) a Lien securing purchase money indebtedness
that does not have a term longer than the estimated
useful life of the Long Distance Asset subject to such
Lien;
(b) Liens or other comparable arrangements relat-
ing to the financing of accounts receivable; and
(c) Liens securing any other indebtedness for
borrowed money, provided that (i) the amount of such
indebtedness, when added to the aggregate amount of
purchase money indebtedness referred to in clause (a)
above, does not exceed 30% of the total book value of
the Long Distance Assets as at the date of the most
recently published balance sheet of the Company,
(ii) the indebtedness secured by such Liens is secured
only by Liens on Long Distance Assets, (iii) the face
amount of such indebtedness does not exceed the book
value of the Long Distance Assets subject to such
Liens, and (iv) such indebtedness is for a term no
longer than the estimated useful life of the Long
Distance Assets subject to such Liens.
"Liquidation Preference" has the meaning set forth
in the Class A Provisions.
"Local Exchange Division" means the Local Com-
munications Services Division of the Company.
"Long Distance Assets" means:
(a) the assets reflected in the Company's balance
sheet for the year ended December 31, 1994 as included
in the Long Distance Division;
(b) any assets acquired by the Company or any of
its Subsidiaries following December 31, 1994 that are
reflected in the Company's balance sheet as included in
the Long Distance Division;
(c) any assets of the Company or any of its Sub-
sidiaries that are not reflected in the Company's bal-
ance sheet for the year ended December 31, 1994 as in-
cluded in the Long Distance Division, which after
December 31, 1994 are transferred by the Company or any
of its Subsidiaries to, or reclassified by the Company
or any of its Subsidiaries as part of, the Long Dis-
tance Division;
(d) any assets acquired by the Company after De-
cember 31, 1994 that are used or held for use primarily
for the benefit of the Long Distance Business; and
(e) any assets referred to in clauses (a) through
(c) above that are used or held for use primarily for
the benefit of the Long Distance Business which are
transferred or reclassified by the Company or any of
its Subsidiaries outside of the Long Distance Division,
but which continue to be owned by the Company or any of
its Subsidiaries;
provided that the term "Long Distance Assets" shall not
include (i) any assets that are used or held for use pri-
marily for the benefit of any Non-Long Distance Business, or
(ii) any other assets reflected in the Company's balance
sheet for the year ended December 31, 1994 as included in
the Cellular and Wireless Division or the Local Exchange
Division (other than as such assets in the Cellular and
Wireless Division or the Local Exchange Division may be
transferred or reclassified in accordance with paragraph (c)
of this definition).
"Long Distance Business" means all long distance
telecommunications activities and services of the Company
and its Subsidiaries at the relevant time, including (but
not limited to) all long distance transport services,
switching and value-added services for voice, data, video
and multimedia transmission, migration paths and intelligent
overlapping architectures, provided that the term "Long
Distance Business" shall not include any activities or ser-
vices primarily related to any Non-Long Distance Business.
"Long Distance Division" means the Long Distance
Communications Services Division of the Company.
"Lower Threshold Sprint Price" means $34.982
(subject to adjustment as provided in the Class A
Provisions).
"Major Competitor" means (a) with respect to FT or
DT, a Person that materially competes with a major portion
of the telecommunications services business of FT or DT in
Europe, or a Person that has taken substantial steps to
become such a Major Competitor and which FT or DT has
reasonably concluded, in its good faith judgment, will be
such a competitor in the near future in France or Germany,
provided that FT and/or DT furnish in writing to the Company
reasonable evidence of the occurrence of such steps;
(b) with respect to the Company, a Person that materially
competes with a major portion of the telecommunications
services business of the Company in North America, or a
Person that has taken substantial steps to become such a
Major Competitor and which the Company has reasonably con-
cluded, in its good faith judgment, will be such a competi-
tor in the near future in the United States of America, pro-
vided that the Company furnish in writing to each Class A
Holder reasonable evidence of the occurrence of such steps;
and (c) with respect to the Joint Venture, a Person that
materially competes with a major portion of the telecommuni-
cations services business of the Joint Venture, or a Person
that has taken substantial steps to become such a Major
Competitor and which FT, DT or the Company has reasonably
concluded, in its good faith judgment, will be such a
competitor in the near future, provided that FT, DT or the
Company furnish in writing to each other Party reasonable
evidence of the occurrence of such steps.
"Market Price" means, with respect to a security
on any date, the Closing Price of such security on the
Trading Day immediately prior to such date. The Market
Price shall be deemed to be equal to (a) in the case of a
share of Class A Common Stock, the Market Price of a Share
of Common Stock; and (b) in the case of a Share of Class A
Preference Stock, the Liquidation Preference. The Market
Price of any options, warrants, rights or other securities
convertible into or exercisable for Class A Common Stock
(except for the Class A Preference Shares) shall be equal to
the Market Price of options, warrants, rights or other
securities convertible into or exercisable for Common Stock
upon the same terms and otherwise containing the same terms
as such options, warrants, rights or other securities
convertible into or exercisable for Class A Common Stock.
"Material Adverse Effect" means, with respect to
any Person, the effect of any event, occurrence, fact, con-
dition or change that is materially adverse to the business,
operations, results of operations, financial condition,
assets or liabilities of such Person.
"Maximum Price" means, subject to adjustment as
provided in the Class A Provisions, the lesser of (a) 125%
of the Average Sprint Price for the relevant period provided
for herein and (b) $48.704.
"Minimum Price" means, subject to adjustment as
provided in the Class A Provisions, 135% of the Average
Sprint Price for the relevant period provided for herein.
"MSA" means a "Metropolitan Statistical Area," as
such term is defined and modified from time to time by the
FCC for purposes of Cellular System licensing.
"NASDAQ" means the National Association of
Securities Dealers, Inc. Automated Quotations System.
"Net Cellular Acquisition Amount" means, subject
to adjustment as provided in the Class A Provisions, the
difference, which may be a negative number, of the aggregate
Purchase Prices paid by Cellular for Acquisitions after
June 22, 1995, minus the aggregate value of the Sales Prices
received by Cellular in connection with Dispositions after
June 22, 1995, such difference to be calculated on a per
share basis using the number of outstanding shares of Common
Stock immediately after the Cellular Spin-off Date.
"Net Cellular Indebtedness" means, subject to
adjustment as provided in the Class A Provisions, the amount
of indebtedness for borrowed money of Cellular outstanding
immediately after the Cellular Spin-off Date, minus the
amount of Cellular's cash at such time, such amount to be
calculated on a per share basis using the number of
outstanding shares of Common Stock immediately after the
Cellular Spin-off Date.
"New Lower Threshold Sprint Price" means, subject
to adjustment as provided in the Class A Provisions, the
Lower Threshold Sprint Price minus 96.30% of the Cellular
Spin-off Reduction Factor.
"New Maximum Price" means, subject to adjustment
as provided in the Class A Provisions, (a) if the Cellular
Spin-off Date occurs prior to the First Closing, the lesser
of (i) 125% of the Average Sprint Price for the relevant
period specified herein and (ii) $48.704 minus 125% of the
Cellular Spin-off Reduction Factor, and (b) if the Cellular
Spin-off Date occurs after the First Closing, the Maximum
Price minus the product of (i) the lesser of (x) 1.25 and
(y) the quotient of $48.704 divided by such Average Sprint
Price used in calculating such Maximum Price, multiplied by
(ii) the Cellular Spin-off Reduction Factor.
"New Minimum Price" means, subject to adjustment
as provided in the Class A Provisions, the Minimum Price
minus 135% of the Cellular Spin-off Reduction Factor.
"New Sprint Price Range" means, subject to
adjustment as provided in the Class A Provisions, from and
including the New Lower Threshold Sprint Price to and
including the New Upper Threshold Sprint Price.
"New Target Price" means, subject to adjustment as
provided in the Class A Provisions, the Target Price minus
130% of the Cellular Spin-off Reduction Factor, provided
that, if the Cellular Spin-off Date does not occur prior to
the First Closing and the Average Sprint Price determined at
the date of the First Closing is within the Sprint Price
Range, the New Target Price shall be the Target Price minus
the product of (a) the quotient of $47.225 divided by such
Average Sprint Price, multiplied by (b) the Cellular Spin-off
Reduction Factor.
"New Upper Threshold Sprint Price" means, subject
to adjustment as provided in the Class A Provisions, $37.780
minus 104% of the Cellular Spin-off Reduction Factor.
"New York Stock Exchange" means The New York Stock
Exchange, Inc.
"Non-Long Distance Business" means (a) the owner-
ship of any equity or other interests in the Joint Venture
or any of the JV Entities; the enforcement or performance of
any of the rights or obligations of the Company or any Sub-
sidiary of the Company pursuant to the Joint Venture Agree-
ment; or any activities or services of the Joint Venture or
any of the JV Entities; (b) the Triple Play Activities;
(c) any activities or services primarily related to the
provision of subscriber connections to a local exchange or
switch providing access to the public switched telephone
network; (d) any activities or services primarily related to
the provision of exchange access services for the purpose of
originating or terminating long distance telecommunications
services; (e) any activities or services primarily related
to the resale by the Local Exchange Division of long dis-
tance telecommunications services of the Company or other
carriers; (f) any activities or services primarily related
to the provision of inter-LATA long distance telecommunica-
tions services that are incidental to the local exchange
services business of the Local Exchange Division; (g) any
activities or services primarily related to the provision of
intra-LATA long distance telecommunications services;
(h) any activities or services (whether local, intra-LATA or
inter-LATA) primarily related to the provision of cellular,
PCS, ESMR or paging services, mobile telecommunications
services or any other voice, data or voice/data wireless
services, whether fixed or mobile, or related to telecom-
munications services provided through communications satel-
lite systems (whether low, medium or high orbit systems);
and (i) the use of the "Sprint" brand name or any other
brand names, trade names or trademarks owned or licensed by
the Company or any of its Subsidiaries.
"North America" shall mean the current geographic
area covered by the following countries: Canada, the United
States of Mexico and the United States of America.
"Notice of Abandonment" has the meaning specified
in Section 2.1(b)(i) hereof, provided that if the Cellular
Spin-off Date does not occur on or prior to the fifth
anniversary of the Initial Issuance Date, the Company shall
be conclusively deemed to have delivered a Notice of
Abandonment on such fifth anniversary.
"Optional Shares" has the meaning specified in
Section 2.5(a) hereof.
"Optional Shares Closing" has the meaning speci-
fied in Section 2.5(c) hereof.
"Other Agreements" mean the Registration Rights
Agreement, the Standstill Agreement, the Stockholders'
Agreement, the FT Investor Confidentiality Agreement and the
DT Investor Confidentiality Agreement.
"Parent" has the meaning specified in the defini-
tion of "Subsidiary".
"Party" has the meaning set forth in the paragraph
following the second WHEREAS clause.
"Passive Financial Institution" means a bank (or
comparable financial institution), insurance company, pen-
sion or retirement fund that acquires Voting Securities or
other equity interests in a Qualified Subsidiary without the
purpose or effect of changing or influencing the control of
the Qualified Subsidiary or the Company, nor in connection
with or as a participant in any transaction having such
purpose or effect, provided that the term "Passive Financial
Institution" shall not include any Major Competitor of the
Company or of the Joint Venture.
"PCS" means a radio communications system of the
type authorized under the rules for broadband personal
communications services designated as Subpart E of Part 24
of the FCC's rules or similar Applicable Laws of any other
country, including the network, marketing, distribution,
sales, customer interface and operations functions relating
thereto.
"Percentage Ownership Interest" means, with re-
spect to any Person, that percentage of the Voting Power of
the Company represented by Votes associated with the Voting
Securities of the Company owned of record by such Person or
by its nominees.
"Person" means an individual, a partnership, an
association, a joint venture, a corporation, a business, a
trust, any entity organized or existing under Applicable
Law, an unincorporated organization or any Governmental
Authority.
"POPs" means, with respect to Cellular, the sum of
the products of (a) the percentage ownership interest held
by Cellular in each entity licensed or designated to receive
a license by the FCC to construct or operate a Cellular
System for a particular MSA or MSAs and/or RSA or RSAs, and
(b) the number of residents of such MSAs and/or RSAs, as the
case may be (as reflected in the figures obtained in the
census conducted by the U.S. Census Bureau in 1990).
"Preferred Stock" means any series of Preferred
Stock of the Company, but shall not include the Class A
Preference Stock.
"Proceeding" means any action, litigation, suit,
proceeding or formal investigation or review of any nature,
civil, criminal, regulatory or otherwise, before any Govern-
mental Authority.
"Proposals" mean (a) the proposal for the stock-
holders of the Company to approve this Agreement and the
performance by the Company of all transactions and acts on
the part of the Company contemplated under this Agreement
and the Other Agreements, including the authorization and
issuance of shares of the Company's capital stock pursuant
to this Agreement, the Stockholders' Agreement and the
Articles as amended by the Amendment, (b) the proposal for
the stockholders of the Company to approve and adopt the
Amendment and the Bylaws Amendment, and (c) the proposal for
the stockholders of the Company to (i) approve for purposes
of the Kansas Control Share Acquisitions Statute the Control
Share Acquisitions Plan, and (ii) accord such shares
acquired pursuant to the Control Share Acquisitions Plan
voting rights in accordance with Section 17-1294 of the
Kansas Control Share Acquisitions Statute.
"Proxy Statement" means the notices of meeting,
proxy statement, forms of proxy and any accompanying letters
to stockholders to be distributed by the Company in connec-
tion with the Proposals or any schedules or exhibits re-
quired to be filed with the SEC in connection therewith.
"Purchase Price" means, as to Acquisitions by
Cellular, the amount paid in cash plus the Fair Market Value
of non-cash consideration paid to effect such Acquisition,
provided that any indebtedness assumed by Cellular shall not
be included in the Purchase Price paid in respect of any
Acquisition to the extent that it is included in Net
Cellular Indebtedness.
"Qualified Joint Venture" has the meaning set
forth in Article I of the Stockholders' Agreement.
"Qualified Subsidiary" means any Person which
(a) is a Subsidiary of either FT or DT or an
entity that would be such a Subsidiary if FT's and DT's
aggregate ownership in such entity were held
individually by one of FT or DT, provided that until
the second anniversary of the Initial Issuance Date, no
Voting Securities of such entity may be Beneficially
Owned by a Major Competitor of the Company or of the
Joint Venture, and thereafter no such Major Competitor
or Major Competitors may, individually or in the aggre-
gate, Beneficially Own Voting Securities representing
ten percent or more of the Voting Power of such entity,
and provided, further, that if the Voting Securities of
such entity owned directly by FT and DT or indirectly
through Wholly-Owned Subsidiaries of either of them are
entitled to a number of Votes representing in the
aggregate less than 80 percent of the Voting Power of
such entity, then:
(i) the Voting Securities owned directly by
FT and DT and Wholly-Owned Subsidiaries, plus
Voting Securities, if any, owned by Passive Finan-
cial Institutions, must in the aggregate be en-
titled to a number of Votes representing at least
80 percent of the Voting Power of such entity; and
(ii) FT and DT and Wholly-Owned Subsidiaries
must in the aggregate directly own Voting Securi-
ties entitled to a number of Votes representing
more than 50 percent of the Voting Power of, and
more than 50 percent of the outstanding equity
interests in, such entity; and
(b) has (i) entered into a Qualified Subsidiary
Standstill Agreement and a confidentiality agreement
satisfactory in form and substance to each Party, and
(ii) (x) caused all holders of any of its equity in-
terests (other than FT, DT and Passive Financial
Institutions) (each a "Strategic Investor") to enter
into a Strategic Investor Standstill Agreement and
(y) caused all holders of any of its equity interests
(other than FT and DT) to enter into a confidentiality
agreement satisfactory in form and substance to each
Party.
"Qualified Subsidiary Standstill Agreement" means
a Qualified Subsidiary Standstill Agreement between the
Company and a Qualified Subsidiary, substantially in the
form of Exhibit A attached hereto.
"Registration Rights Agreement" means the Regis-
tration Rights Agreement, among the Company, FT and DT,
dated the Initial Issuance Date, substantially in the form
of Exhibit B attached hereto, as it may be amended or sup-
plemented from time to time.
"Rights" has the meaning set forth in Sec-
tion 2.5(a)(i) hereof.
"Rights Agreement" means the Rights Agreement,
dated as of August 8, 1989, between the Company and UMB
Bank, n.a., as amended on June 4, 1992 and as of July 31,
1995, and as it may be amended or supplemented from time to
time.
"RSA" means a "Rural Service Area," as such term
is defined and modified from time to time by the FCC for
purposes of Cellular System licensing.
"Sales Prices" means, as to any Disposition by
Cellular, the amount received in cash plus the Fair Market
Value of non-cash consideration received to effect such
Disposition, provided that any indebtedness assumed or
retained by Cellular shall not be deducted from the Sales
Price to the extent that it is included in Net Cellular
Indebtedness.
"Schedule of Permitted Cellular Actions" has the
meaning specified in Section 8.10 hereof.
"SEC" means the United States Securities and
Exchange Commission.
"SEC Documents" has the meaning specified in Sec-
tion 6.5(a) hereof.
"Securities Act" means the Securities Act of 1933,
as amended, and the rules and regulations of the SEC promul-
gated from time to time thereunder.
"Shares" means (a) shares of Class A Stock, Common
Stock or any other Voting Securities of the Company,
(b) securities of the Company convertible into Voting Secu-
rities of the Company and (c) options, warrants or other
rights to acquire such Voting Securities, but in the case of
this clause (c), excluding any rights of the Class A Holders
or FT and DT to acquire Voting Securities of the Company
pursuant to the Stockholders' Agreement and this Agreement
(but not excluding any Voting Securities received upon the
exercise of such rights).
"Spin-off" means any spin-off or other pro rata
distribution of equity interests of a wholly-owned direct or
indirect Subsidiary of the Company to the stockholders of
the Company, provided that the term "Spin-off" shall not
include the Cellular Spin-off unless a Notice of Abandonment
has been delivered.
"Spin-off Investment Agreement" shall have the
meaning set forth in Section 7.10(a) of the Stockholders'
Agreement.
"Sprint Price Range" means from and including the
Lower Threshold Sprint Price to and including the Upper
Threshold Sprint Price.
"Sprint Sub" has the meaning set forth in the
first WHEREAS clause.
"Standstill Agreement" means the Standstill Agree-
ment, among the Company, FT and DT, dated as of the date
hereof, substantially in the form of Exhibit C attached
hereto, as it may be amended or supplemented from time to
time.
"Stockholders' Agreement" means the Stockholders'
Agreement, among the Company, FT and DT, dated as of the
Initial Issuance Date, substantially in the form of Exhib-
it D hereto (and all exhibits thereto), as it may be amended
or supplemented from time to time.
"Stockholders' Meeting" has the meaning specified
in Section 8.4 hereof.
"Strategic Investor" has the meaning specified in
the definition of "Qualified Subsidiary".
"Strategic Investor Standstill Agreement" means
the Strategic Investor Standstill Agreement, between the
Company and a Strategic Investor, substantially in the form
of Exhibit E attached hereto.
"Strategic Merger" means a merger or other busi-
ness combination involving the Company (a) in which the
Class A Holders are entitled to retain or receive, as the
case may be, voting equity securities of the surviving
parent entity in exchange for or in respect of (by conver-
sion or otherwise) such Class A Stock, with an aggregate
Fair Market Value equal to at least 75% of the sum of (i)
the Fair Market Value of all consideration which such Class
A Holders have a right to receive with respect to such
merger or other business combination, and (ii) if the
Company is the surviving parent entity, the Fair Market
Value of the equity securities of the surviving parent
entity which the Class A Holders are entitled to retain,
(b) immediately after which the surviving parent entity is
an entity whose voting equity securities are registered
pursuant to Section 12(b) or Section 12(g) of the Exchange
Act or which otherwise has any class or series of its voting
equity securities held by at least 500 holders and (c) imme-
diately after which no Person or Group (other than the Class
A Holders) owns Voting Securities of such surviving parent
entity with Votes equal to more than 35 percent of the
Voting Power of such surviving parent entity.
"Subsidiary" means, with respect to any Person
(the "Parent"), any other Person in which the Parent, one or
more direct or indirect Subsidiaries of the Parent, or the
Parent and one or more of its direct or indirect Subsid-
iaries (a) have the ability, through ownership of securities
individually or as a group, ordinarily, in the absence of
contingencies, to elect a majority of the directors (or
individuals performing similar functions) of such other
Person, and (b) own more than 50% of the equity interests,
provided that Atlas shall be deemed to be a Subsidiary of
each of FT and DT.
"Supplemental Preference Stock Closing" has the
meaning set forth in Section 2.3 hereof.
"Supplemental Preference Stock Closing Date" has
the meaning set forth in Section 2.3(b) hereof.
"Surviving Representations" has the meaning set
forth in Section 11.1 hereof.
"Target Price" means $47.225 (subject to
adjustment as provided in the Class A Provisions).
"Taxes" means all federal, state, local and
foreign income, profits, franchise, sales, use, occupancy,
property, transfer, withholding, payroll, receipts, excise
and other taxes, fees, duties and governmental charges
(including interest, additions thereto and penalties
thereon) whether or not based in whole or in part on income.
"Third Party Approval" means any consent, waiver,
grant, concession, license, authorization, permit, franchise
or approval of, or notice to, any Person other than a Gov-
ernmental Authority.
"Trading Day" means, with respect to any security,
any day on which the principal national securities exchange
on which such security is listed or admitted to trading, or
NASDAQ, if such security is listed or admitted to trading
thereon, is open for the transaction of business (unless
such trading shall have been suspended for the entire day)
or, if such security shall have been not listed or admitted
to trading on any national securities exchange or NASDAQ,
any day other than a Saturday, Sunday, or a day on which
banking institutions in the State of New York are authorized
or obligated by law or executive order to close.
"Transfer" means any act pursuant to which, di-
rectly or indirectly, the ownership of the assets or securi-
ties in question is sold, transferred, conveyed, delivered
or otherwise disposed, but shall not include (a) any grant
of Liens, (b) any conversion or exchange of any security of
the Company pursuant to a merger or other business combina-
tion involving the Company, (c) any transfer of ownership of
assets to the surviving entity in a Strategic Merger or
pursuant to any other merger or other business combination
not prohibited by the Class A Provisions, or (d) any fore-
closure or other execution upon any of the assets of the
Company or any of its Subsidiaries other than foreclosures
resulting from Lien Transfers.
"Triple Play Activities" means (a) the ownership
of any equity or other interests in MajorCo, L.P. or any of
its successors or Affiliates; the enforcement or performance
of any of the rights or obligations of the Company or any
Subsidiary of the Company pursuant to the Agreement of Lim-
ited Partnership of MajorCo, L.P. or any other agreement or
arrangement contemplated thereby, except to the extent re-
lating to the provision of services by the Company as the
long distance telecommunications provider to MajorCo, L.P.;
or any activities or services of MajorCo, L.P. or any of its
successors or Affiliates; (b) the ownership of any equity or
other interests in any Teleport Entity (as that term is
defined in the Contribution Agreement (the "Contribution
Agreement"), dated as of March 28, 1995, by and among TCI
Network Services, Comcast Telephony Services, Cox Telephony
Partnership, MajorCo, L.P. and NewTelco, L.P.); or any ac-
tivities or services of any Teleport Entity or any of their
respective successors or Affiliates; and (c) the ownership
of any equity or other interests in PhillieCo, L.P., or any
of its successors or Affiliates; the enforcement or per-
formance of any of the rights or obligations of the Company
or any Subsidiary of the Company pursuant to the Amended and
Restated Agreement of Limited Partnership of PhillieCo,
L.P., dated as of February 17, 1995, or any other agreement
or arrangement contemplated thereby, except to the extent
relating to the provision of services by the Company as the
long distance telecommunications provider to PhillieCo,
L.P.; or any activities or services of PhillieCo, L.P. or
any of its successors or Affiliates.
"Upper Threshold Sprint Price" means, subject to
adjustment as provided in the Class A Provisions, $37.780.
"Vote" means, with respect to any entity, the
ability to cast a vote at a stockholders', members' or
comparable meeting of such entity with respect to the elec-
tion of directors, managers or other members of such enti-
ty's governing body, or the ability to cast a general part-
nership or comparable vote, provided that with respect to
the Company only, the term "Vote" means the ability to
exercise general voting power (as opposed to the exercise of
special voting or disapproval rights such as those set forth
in the Class A Provisions) with respect to matters other
than the election of directors at a meeting of the stock-
holders of the Company.
"Voting Power" means, with respect to any entity
as at any date, the aggregate number of Votes outstanding as
at such date in respect of such entity.
"Voting Securities" means, with respect to an
entity, any capital stock or debt securities of such entity
if the holders thereof are ordinarily, in the absence of
contingencies, entitled to a Vote, even though the right to
such Vote has been suspended by the happening of such a
contingency, and in the case of the Company, shall include,
without limitation, the Common Stock and the Class A Stock,
but shall not include any shares issued pursuant to the
Rights Agreement to the extent such issuance is caused by
action of a Class A Holder.
"Weighted Average Price" means the weighted aver-
age per unit price paid by the purchasers of any capital
stock, debt instrument or security of the Company. In
determining the price of shares of Common Stock or Class A
Common Stock issued upon the conversion or exchange of secu-
rities or issued upon the exercise of options, warrants or
other rights, the consideration for such shares shall be
deemed to include the price paid to purchase the convertible
security or the warrant, option or other right, plus any
additional consideration paid upon conversion or exercise.
If any portion of the price paid is not cash, the
Independent Directors (acting by majority vote) shall
determine in good faith the Fair Market Value of such
non-cash consideration. If any new shares of Common Stock
are issued together with other shares or securities or
distributions of other assets of the Company for
consideration which covers both the new shares and such
other shares, securities or other assets, the portion of
such consideration allocable to such new shares shall be
determined in good faith by the Independent Directors (act-
ing by majority vote), in each case as certified in a reso-
lution sent to all Class A Holders.
"Wholly-Owned Subsidiaries" means companies or
other business organizations all of the outstanding Voting
Securities of which are owned, directly or indirectly, by
either or both of FT and DT, other than any de minimis
ownership required by Applicable Law.
ARTICLE II
PURCHASE AND SALE OF SHARES
Section 2.1. First Closing. (a) (i) The
Parties shall schedule the first closing of the purchase and
sale of shares of Class A Stock hereunder (the "First
Closing") for the tenth Business Day after all the
conditions set forth in Article III are reasonably expected
to be satisfied, except for conditions to be satisfied
concurrently with the First Closing. Prior to scheduling
the date of the First Closing, the Parties shall consult
with regard to the status of such conditions with a view to
determining when they will be satisfied. The First Closing
shall take place ten Business Days after the date on which
all conditions set forth in Article III are satisfied
(except for those conditions to be satisfied concurrently
with the First Closing), provided that the Company shall
retain discretion over the timing of the Cellular Spin-off,
and if the Cellular Spin-off Date shall occur less than 35
Trading Days before the date on which the First Closing is
otherwise scheduled to occur, the First Closing shall
instead occur on the 35th Trading Day after the Cellular
Spin-off Date, and provided, further, that the First Closing
may take place at such other date and time as the Parties
shall agree in writing.
(ii) When pursuant to paragraph (b) of this
Section 2.1 or Section 3(b) of the Class A Provisions, the
Company, on the one hand, or FT and DT, on the other hand,
may make an election with respect to the purchase price of
the shares of Class A Common Stock to be purchased at the
First Closing or the Initial Conversion Price of shares of
Class A Preference Stock to be purchased at the First
Closing, such election shall be made by notice delivered by
the Company to FT and DT, or by FT and DT to the Company, as
the case may be, at least five Business Days (or in the case
of a First Closing FT/DT Notice delivered pursuant to
Section 2.1(b)(ii)(I)(B) hereof, at least seven Business
Days) prior to the date of the First Closing (such notice
being referred to herein as a "First Closing Company Notice"
or "First Closing FT/DT Notice", as the case may be),
provided that the Company may only deliver such a First
Closing Company Notice if a majority of the Continuing
Directors shall have first approved (unless such approval is
not required pursuant to Section 11.13), at a meeting of
Directors at which at least seven Continuing Directors are
present, the setting of the purchase price of the shares of
Class A Common Stock to be purchased at the First Closing or
the Fixing of the Initial Conversion Price of the shares of
Class A Preference Stock to be purchased at the First
Closing, as the case may be, by the Company as provided in
Section 3(b) of the Class A Provisions. If both the Company,
on the one hand, and FT and DT, on the other, deliver First
Closing Notices, the First Closing Notice first delivered in
accordance with Section 11.7 hereof shall be operative and
the second shall be of no force or effect.
(b) Upon the terms and subject to the conditions
of this Agreement, the Company shall issue, sell and deliver
to each of FT and DT, and each of FT and DT, severally and
not jointly, shall purchase and accept, shares of Class A
Common Stock or Class A Preference Stock, as the case may
be, at the First Closing as set forth below in this Sec-
tion 2.1:
(i) FT and DT shall purchase 86,236,036 shares of
Class A Common Stock (subject to adjustment as provided
in Sections 2.6 and 2.7 hereof) at the applicable price
specified below in this Section 2.1(b)(i) and
determined at the date of the First Closing, if at
least 35 Trading Days prior to the date of the First
Closing, the Cellular Spin-off Date shall have occurred
or the Company shall have notified FT and DT that the
Company has abandoned the Cellular Spin-off (a "Notice
of Abandonment") at least ten Business Days before the
First Closing, as follows:
(x) if the Company shall have timely
delivered a Notice of Abandonment to FT and DT,
the purchase price of such shares of Class A
Common Stock shall be:
(I) the Target Price, if (A) the Aver-
age Sprint Price determined at the date of
the First Closing is within the Sprint Price
Range, or (B) such Average Sprint Price is
below the Lower Threshold Sprint Price and FT
and DT have timely delivered to the Company a
First Closing FT/DT Notice specifying their
election to purchase such shares of Class A
Common Stock at the Target Price;
(II) the Maximum Price (determined with
reference to such Average Sprint Price), if
such Average Sprint Price is above the Upper
Threshold Sprint Price; or
(III) the Minimum Price (determined
with reference to such Average Sprint Price),
if such Average Sprint Price is below the
Lower Threshold Sprint Price and the Company
shall have timely delivered to FT and DT a
First Closing Company Notice specifying its
election to issue and sell such shares of
Class A Common Stock at such Minimum Price;
or
(y) if the Cellular Spin-off Date has
occurred, the purchase price of such shares of
Class A Common Stock shall be:
(I) the New Target Price, if (A) such
Average Sprint Price is within the New Sprint
Price Range, or (B) such Average Sprint Price
is below the New Lower Threshold Sprint Price
and FT and DT have timely delivered to the
Company a First Closing FT/DT Notice
specifying their election to purchase such
shares of Class A Common Stock at the New
Target Price;
(II) the New Maximum Price (determined
with reference to such Average Sprint Price),
if such Average Sprint Price is above the New
Upper Threshold Sprint Price; or
(III) the Minimum Price (determined
with reference to such Average Sprint Price),
if such Average Sprint Price is below the New
Lower Threshold Sprint Price and the Company
has timely delivered to FT and DT a First
Closing Company Notice specifying its
election to issue and sell such shares of
Class A Common Stock at such Minimum Price.
(ii) FT and DT shall purchase shares of Class A
Preference Stock if (x) the Cellular Spin-off Date has
occurred or a Notice of Abandonment has been delivered,
but the Average Sprint Price determined at the date of
the First Closing is below the New Lower Threshold
Sprint Price or the Lower Threshold Sprint Price, as
the case may be, and neither FT and DT, on the one
hand, nor the Company, on the other hand, have timely
delivered a First Closing Notice, or (y) the Cellular
Spin-off Date has not occurred and the Company has not
timely delivered a Notice of Abandonment, as follows,
all such shares of Class A Preference Stock to be
purchased for a price equal to their liquidation value:
(I) if the Cellular Spin-off Date has
not occurred and the Company has not timely
delivered a Notice of Abandonment and if (A)
such Average Sprint Price is within the
Sprint Price Range or (B) such Average Sprint
Price is below the Lower Threshold Sprint
Price and FT and DT shall have timely
delivered to the Company a First Closing
FT/DT Notice specifying their election to
purchase shares of Class A Preference Stock
with an Initial Conversion Price equal to the
Target Price in accordance with this clause
(I), such shares of Class A Preference Stock
shall be purchased at a per share price, and
have a per share liquidation value, equal to
the Target Price and shall have an aggregate
liquidation value (and purchase price) of
$3.0 billion (or such lesser amount not less
than $2.0 billion, as determined by the Comp-
any upon notice to FT and DT not later than
five Business Days prior to the First
Closing), such shares to have an Initial
Conversion Price equal to the Target Price;
(II) if the Cellular Spin-off Date has
not occurred and the Company has not timely
delivered a Notice of Abandonment and if such
Average Sprint Price is above the Upper
Threshold Sprint Price, such shares of Class
A Preference Stock will be purchased at a per
share price, and have a per share liquidation
value, equal to the Target Price and shall
have an aggregate liquidation value (and
purchase price) of $3.0 billion (or such
lesser amount not less than $2.0 billion as
determined by the Company upon notice to FT
and DT not later than five Business Days
prior to the First Closing), such shares to
have an Initial Conversion Price equal to the
Maximum Price (determined with reference to
such Average Sprint Price);
(III) if the Cellular Spin-off Date has
not occurred, the Company has not timely
delivered a Notice of Abandonment, such
Average Sprint Price is below the Lower
Threshold Sprint Price and the Company has
timely delivered to FT and DT a First Closing
Company Notice specifying its election to
issue and sell such shares of Class A
Preference Stock with an Initial Conversion
Price equal to the Minimum Price (determined
with reference to such Average Sprint Price)
in accordance with this clause (III), such
shares of Class A Preference Stock shall be
purchased at a per share price, and have a
per share liquidation value, equal to the
Target Price and shall have an aggregate
liquidation value (and purchase price) of
$3.0 billion (or such lesser amount not less
than $2.0 billion as determined by the
Company upon notice to FT and DT not later
than five Business Days prior to the First
Closing), such shares to have an Initial
Conversion Price equal to such Minimum Price;
or
(IV) if (A) the Cellular Spin-off Date
has not occurred and the Company has not
timely delivered a Notice of Abandonment,
such Average Sprint Price is below the Lower
Threshold Sprint Price, and neither the
Company, on the one hand, nor FT and DT on
the other hand, have timely delivered a First
Closing Notice, or (B) the conditions
described in Section 2.1(b)(ii)(x) are
satisfied, such shares of Class A Preference
Stock shall be purchased at a per share
price, and have a per share liquidation value
equal to the Target Price, and shall have an
aggregate liquidation value (and purchase
price) of $1.5 billion, such shares to be
convertible as provided in Section 3 of the
Class A Provisions,
the purchase price in each case payable as provided in this
Section 2.1. The Company may only deliver the notice
referenced in clause (I), (II) or (III) of this Section
2.1(b)(ii) decreasing the aggregate liquidation value of the
shares of Class A Preference Stock to be purchased if a
majority of the Continuing Directors shall have first
approved (unless such approval is not required pursuant to
Section 11.13 hereof), at a meeting of Directors at which at
least seven Continuing Directors are present, so decreasing
the aggregate liquidation value of the shares of Class A
Preference Stock to be purchased at the First Closing in
accordance with such notice.
(c) The First Closing shall take place at the
offices of Debevoise & Plimpton, 875 Third Avenue, New York,
New York, at 10:00 a.m., New York City time, on the date
determined in accordance with Section 2.1(a)(i) hereof.
(i) At the First Closing, the Company shall
deliver, or cause to be delivered, the following to
each of FT and DT:
(x) certificates representing one-half of
the shares of Class A Common Stock or Class A
Preference Stock, as the case may be, to be pur-
chased at the First Closing, in the name of FT or
DT, as the case may be, against payment of the
purchase price therefor, as provided below; and
(y) the opinions, certificates, agreements
and other documents required to be delivered by
the Company pursuant to Article III.
(ii) At the First Closing, each of FT and DT
shall deliver the following to the Company:
(x) cash in the amount of one-half of the
purchase price provided for in Section 2.1(b)
hereof, in each case by wire transfer of im-
mediately available funds to an account designated
by the Company at least five Business Days prior
to the Initial Issuance Date; and
(y) the opinions, certificates, agreements
and other documents required to be delivered by FT
or DT, as the case may be, pursuant to Article
III.
(iii) The purchase of shares of capital stock by
FT and DT pursuant to this Section 2.1 shall be
consummated concurrently, and no purchase of shares by
FT or DT pursuant to this Section 2.1 shall be made
unless and until the concurrent purchase by the other
Party is so effected.
Section 2.2. Additional Preference Stock Closing.
(a) If (i) FT and DT shall have purchased shares of Class A
Preference Stock at the First Closing pursuant to Section
2.1(b)(ii)(IV)(A) hereof, (ii) the Conversion Price of such
shares thereafter becomes Fixed, and (iii) the Cellular
Spin-off Date has not occurred and the Company has not
delivered a Notice of Abandonment, then, upon the terms and
subject to the conditions of this Agreement, the Company
shall issue, sell and deliver to each of FT and DT, and each
of FT and DT, severally and not jointly, shall purchase and
accept, the number of additional shares of Class A
Preference Stock determined in accordance with the following
sentence. Such shares shall have a per share liquidation
value equal to the Target Price and an aggregate liquidation
value of $1.5 billion (or such amount not less than $0.5
billion, as determined by the Company and set forth in the
Additional Preference Stock Closing Notice) and shall be
purchased at one Additional Preference Stock Closing (or
such greater number of Additional Preference Stock Closings,
not to exceed three, as determined by the Company and set
forth in the Additional Preference Stock Closing Notice).
Such shares of Class A Preference Stock shall be purchased
for a purchase price equal to their liquidation value, the
purchase price in each case payable as provided in this
Section 2.2. No Party shall have any obligations under this
Section 2.2 following the occurrence of the Cellular Spin-off
Date or the delivery of a Notice of Abandonment.
(b) Each closing (each, an "Additional Preference
Stock Closing") of the purchase of such shares of Class A
Preference Stock shall take place at the offices of
Debevoise & Plimpton, 875 Third Avenue, New York, New York,
at 10:00 a.m., New York City time, on the date (the
"Additional Preference Stock Closing Date") which (i) in the
case of the first Additional Preference Stock Closing, shall
be the tenth Business Day after the later of (x) the date
the Conversion Price of the Class A Preference Stock becomes
Fixed and (y) the date all of the conditions in respect of
the Additional Preference Stock Closing set forth in
Article IV have been fulfilled or waived (except for such
conditions to be fulfilled concurrently with the Additional
Preference Stock Closing), and (ii) in the case of any
subsequent Additional Preference Stock Closing, the date
therefor set forth in the Additional Preference Stock
Closing Notice, provided that no Additional Preference Stock
Closing shall take place (w) more than one year after the
first Additional Preference Stock Closing, (x) more than
five years and 60 days after the Initial Issuance Date (as
such period may be extended pursuant to the provisos to
Sections 4.2(a), 4.2(b), 4.3(a) and 4.3(b) hereof),(y) after
the occurrence of the Cellular Spin-off Date or (z) after
delivery by the Company of a Notice of Abandonment, and
provided, further, that any Additional Preference Stock
Closing may take place at such other date and time as the
Parties shall agree in writing.
(i) At each Additional Preference Stock Closing,
the Company shall deliver, or cause to be delivered,
the following to each of FT and DT:
(x) certificates representing one-half of
the shares of Class A Preference Stock to be
purchased at such Additional Preference Stock
Closing in the name of FT or DT, respectively,
against payment of the purchase price therefor, as
provided below; and
(y) the certificates and other documents
required to be delivered by the Company pursuant
to Article IV.
(ii) At each Additional Preference Stock Closing,
each of FT and DT shall deliver the following to the
Company:
(x) cash in the amount of one-half of the
purchase price for the shares of Class A
Preference Stock being purchased at such
Additional Preference Stock Closing, such cash to
be delivered by wire transfer of immediately
available funds to an account designated by the
Company at least five Business Days prior to the
date of such Additional Preference Stock Closing;
and
(y) the certificates and other documents
required to be delivered by FT or DT, as the case
may be, pursuant to Article IV.
(iii) The purchase of shares of Class A
Preference Stock by FT and DT pursuant to this Section
2.2 shall be consummated concurrently, and no purchase
of shares by FT or DT pursuant to this Section 2.2
shall be deemed to be effected unless and until the
concurrent purchase by the other Party is so effected.
(c) If FT and DT have purchased shares of Class A
Preference Stock at the First Closing pursuant to Section
2.1(b)(ii)(IV)(A) hereof, the Company may, not later than
five Business Days after the date on which the Conversion
Price of such shares first becomes Fixed, deliver to FT and
DT a notice (the "Additional Preference Stock Closing
Notice") specifying
(i) the number of Additional Preference Stock
Closings scheduled to occur, provided that
(x) no more than one Additional Preference
Stock Closing shall be scheduled to occur unless
the aggregate liquidation value of the Shares to
be issued and delivered at all Additional
Preference Stock Closings exceeds $500 million,
and
(y) there shall not be more than three
Additional Preference Stock Closings,
(ii) if more than one Additional Preference Stock
Closing is scheduled, the date of each subsequent
Additional Preference Stock Closing, provided that no
Additional Preference Stock Closing may occur more than
one year after the date of the first Additional
Preference Stock Closing, and
(iii) if more than one Additional Preference Stock
Closing is scheduled, the liquidation value of the
Shares to be issued and delivered at each Additional
Preference Stock Closing, provided, further, that
(x) the aggregate liquidation value of the
Shares purchased at the first Additional
Preference Stock Closing shall be at least $500
million,
(y) the aggregate liquidation value of the
Shares to be purchased at any subsequent
Additional Preference Stock Closing shall be at
least $100 million, and
(z) if there are three Additional Preference
Stock Closings, the Shares to be purchased at the
second and third Additional Preference Stock
Closings must have identical aggregate liquidation
values, provided that the Company may only deliver
such Additional Preference Stock Closing Notice
with respect to a decrease in the aggregate
liquidation value of the shares of Class A
Preference Stock to be purchased at the Additional
Preference Stock Closing or Closings if a majority
of the Continuing Directors shall have first
approved (unless such approval is not required
pursuant to Section 11.13), at a meeting of
Directors at which at least seven Continuing
Directors are present, such decrease in the
aggregate liquidation value of the shares of Class
A Preference Stock to be purchased at the
Additional Preference Stock Closing or Closings.
Section 2.3. Supplemental Preference Stock
Closing. (a) If the Class A Holders make an election to
defer conversion of the Class A Preference Stock in
accordance with Section 3(a)(iii) of the Class A Provisions,
the Company shall issue, sell and deliver to each of FT and
DT, and each of FT and DT, severally and not jointly, shall
purchase and accept, additional shares of Class A Preference
Stock with an aggregate liquidation value equal to the
excess of (i) the product of 86,236,036 (subject to
adjustment as provided in Sections 2.6 and 2.7 hereof) and
the per share Conversion Price over the (ii) aggregate
liquidation value of the shares of Class A Preference Stock
previously purchased (whether or not such Shares have been
Transferred or redeemed). The purchase price of each such
additional share shall be equal to its liquidation value.
(b) A closing (the "Supplemental Preference Stock
Closing") of the purchase of such shares of Class A
Preference Stock shall take place at the offices of
Debevoise & Plimpton, 875 Third Avenue, New York, New York,
at 10:00 a.m., New York City time, on the date (the
"Supplemental Preference Stock Closing Date") which is the
tenth Business Day after the later of (i) the date of the
election specified in Section 3(a)(iii) of the Class A
Provisions and (ii) the date all of the conditions in
respect of the Supplemental Preference Stock Closing set
forth in Article IV have been fulfilled or waived (except
for such conditions to be fulfilled concurrently with the
Supplemental Preference Stock Closing), provided that the
Supplemental Preference Stock Closing shall not take place
more than five years and 60 days after the date of the First
Closing (as such period may be extended pursuant to the
provisos to Sections 4.2(a), 4.2(b), 4.3(a) and 4.3(b)
hereof) and that the Supplemental Preference Stock Closing
may take place at such other date and time as the Parties
shall agree in writing.
(i) At the Supplemental Preference Stock Closing,
the Company shall deliver, or cause to be delivered,
the following to each of FT and DT:
(x) certificates representing one-half of
the shares of Class A Preference Stock to be pur-
chased at the Supplemental Preference Stock
Closing in the name of FT or DT, respectively,
against payment of the purchase price therefor, as
provided below; and
(y) the certificates and other documents
required to be delivered by the Company pursuant
to Article IV.
(ii) At the Supplemental Preference Stock
Closing, each of FT and DT shall deliver the following
to the Company:
(x) cash in the amount of one-half of the
purchase price for such shares of Class A
Preference Stock being purchased, such cash to be
delivered by wire transfer of immediately
available funds to an account designated by the
Company at least five Business Days prior to the
Supplemental Preference Stock Closing Date; and
(y) the certificates and other documents
required to be delivered by FT or DT, as the case
may be, pursuant to Article IV.
(iii) The purchase of shares of Class A
Preference Stock by FT and DT pursuant to this Section
2.3 shall be consummated concurrently, and no purchase
of shares by FT or DT pursuant to this Section 2.3
shall be deemed to be effected unless and until the
concurrent purchase by the other Party is so effected.
Section 2.4. Deferred Common Stock Closing.
(a) If (i) FT and DT shall have purchased shares of Class A
Preference Stock at the First Closing, (ii) the Cellular
Spin-off Date shall have occurred or the Company shall have
delivered a Notice of Abandonment, (iii) the conditions to
the establishment of the Conversion Date (as defined in the
Articles) have been satisfied, (iv) the shares of Class A
Preference Stock are to be converted on the Conversion Date
pursuant to the Class A Provisions, and (v) such conversion
has not been deferred as contemplated by Section 2.3 hereof,
then, upon the terms and subject to the conditions of this
Agreement, the Company shall issue, sell (if applicable) and
deliver to each of FT and DT, and each of FT and DT,
severally and not jointly, shall purchase and accept a
number of shares of Class A Common Stock equal to the excess
of (i) 86,236,036 shares (subject to adjustment as provided
in Section 2.6 or 2.7) over (ii) the sum of (x) the number
of such shares issued upon conversion of the outstanding
shares of Class A Preference Stock, and (y) the number of
shares that would have been issued in respect of shares of
Class A Preference Stock previously purchased but which have
been Transferred to Persons other than Class A Holders or
redeemed, for a per share purchase price equal to the
Conversion Price at which such shares of Class A Preference
Stock were so converted into shares of Class A Common Stock,
the purchase price payable as provided in this Section 2.4.
(b) A closing (the "Deferred Common Stock Clos-
ing") of the purchase of shares of Class A Common Stock
pursuant to this Section 2.4 shall take place at the offices
of Debevoise & Plimpton, 875 Third Avenue, New York, New
York, at 10:00 a.m., New York City time, on the date (the
"Deferred Common Stock Closing Date") which is the later of
(i) the Conversion Date, and (ii) the date all of the condi-
tions set forth in Article IV have been fulfilled or waived,
provided that the Deferred Common Stock Closing shall not
take place more than five years and 60 days after the date
of the First Closing (as such period may be extended
pursuant to the provisos to Sections 4.2(a), 4.2(b), 4.3(a)
and 4.3(b) hereof) or fewer than 30 Business Days after the
date of the Cellular Spin-off, if any, by the Company, and
provided, further, that the Deferred Common Stock Closing
may take place at such other date and time as the Parties
shall agree in writing.
(i) At the Deferred Common Stock Closing, the
Company shall deliver, or cause to be delivered, the
following to each of FT and DT:
(x) certificates representing one-half of
the shares of Class A Common Stock to be purchased
at the Deferred Common Stock Closing, in the name
of FT or DT, respectively, against payment of the
purchase price therefor, as provided below;
(y) certificates representing the shares of
Class A Common Stock to be delivered by the
Company to FT and DT upon the conversion of the
Class A Preference Stock if the Deferred Common
Stock Closing shall take place on the Conversion
Date; and
(z) the certificates and other documents
required to be delivered by the Company pursuant
to Article IV.
(ii) At the Deferred Common Stock Closing, each
of FT and DT shall deliver the following to the
Company:
(x) certificates representing the outstand-
ing shares of Class A Preference Stock for conver-
sion if the Deferred Common Stock Closing shall
take place on the Conversion Date and cash in the
amount of one-half of the purchase price for the
shares being purchased, such cash to be delivered
by wire transfer of immediately available funds to
an account designated by the Company at least five
Business Days prior to the Deferred Common Stock
Closing Date; and
(y) the certificates and other documents
required to be delivered by FT or DT, as the case
may be, pursuant to Article IV.
(iii) The purchase of shares of Class A Common
Stock by FT and DT pursuant to this Section 2.4 shall
be consummated concurrently, and no purchase of shares
by FT or DT pursuant to this Section 2.4 shall be
deemed to be effected unless and until the concurrent
purchase by the other Party is so effected.
Section 2.5. Purchases of Optional Shares.
(a) Upon the terms and subject to the conditions of this
Agreement, each of FT and DT shall have the right (but not
the obligation) to purchase from the Company, and the
Company shall issue, sell and deliver to each of FT and DT,
as the case may be, shares ("Optional Shares") of either
Class A Common Stock, if the Class A Common Issuance Date
has occurred, or Class A Preference Stock, if the
Supplemental Preference Stock Closing has occurred, in a
number equal to up to one-half of:
(i) that number of additional shares of Class A
Common Stock equal to, or Class A Preference Stock with
a related number of Class A Conversion Shares equal to,
25% of the number of (x) shares of Common Stock issued
by the Company after June 14, 1994 and on or prior to
the Investment Completion Date but excluding shares of
Common Stock issued in respect of the exercise of stock
options, warrants or other rights (except rights issued
pursuant to the Rights Agreement) in existence on or
before the Initial Issuance Date (including any issued
pursuant to employee benefit plans) or upon the con-
version of any securities outstanding on or before the
Initial Issuance Date, for a per share purchase price
equal to (A) in the case of Class A Common Stock, the
Weighted Average Price for such Common Stock, and (B)
in the case of Class A Preference Stock, the product of
the Weighted Average Price for such Common Stock
multiplied by the number of Class A Conversion Shares
related to one share of Class A Preference Stock
outstanding immediately prior to such purchase and
(y) shares of Common Stock issued by the Company after
June 14, 1994 and on or prior to the Initial Issuance
Date in respect of the exercise of stock options,
warrants or other rights (except rights issued pursuant
to the Rights Agreement) in existence at any time on or
before the Initial Issuance Date (including any issued
pursuant to employee benefit plans) or upon the conver-
sion of any securities outstanding on or before the
Initial Issuance Date, for a per share purchase price
equal to, (A) in the case of Class A Common Stock, the
higher of the price at which Class A Common Stock was
issued and sold to FT and DT at the Class A Common
Issuance Date and the Weighted Average Price for such
Common Stock, and (B) in the case of Class A Preference
Stock, the higher of (I) the price at which Class A
Preference Stock was sold to FT and DT at the
Supplemental Preference Stock Closing, and (II) the
product of the Weighted Average Price for such Common
Stock multiplied by the number of Class A Conversion
Shares related to one share of Class A Preference Stock
outstanding immediately prior to such purchase,
provided that, notwithstanding clause (y) above, shares
of Class A Stock purchased hereunder with respect to
the issuance of Excess Shares shall be purchased for a
per share purchase price equal to (A) in the case of
Class A Common Stock, the Weighted Average Price for
such Excess Shares, and (B) in the case of Class A
Preference Stock, the product of the Weighted Average
Price for such Excess Shares multiplied by the number
of Class A Conversion Shares related to one share of
Class A Preference Stock outstanding immediately prior
to such purchase. As used in this clause (i), "Excess
Shares" means those shares of Common Stock issued by
the Company after the date hereof and on or prior to
the Initial Issuance Date (other than pursuant to
employee benefit plans) in respect of the exercise of
rights ("Rights") to purchase Common Stock or similar
instruments (except rights issued pursuant to the
Rights Agreement) issued after the date hereof and on
or prior to the Initial Issuance Date that, when aggre-
gated with all other shares of Common Stock which have
been issued by the Company after the date hereof in
respect of the exercise of Rights issued after the date
hereof and on or prior to the Initial Issuance Date,
exceed five percent of the number of shares of Common
Stock outstanding on the date hereof (adjusted to
reflect any stock split, subdivision, stock dividend or
other reclassification, consolidation or combination of
the Company's Voting Securities after the date hereof);
and
(ii) if after June 14, 1994 and on or prior to
the Investment Completion Date the Company shall have
issued or shall issue Voting Securities other than
Common Stock or Class A Stock, a number of additional
shares of Class A Stock sufficient for such additional
shares of Class A Stock to represent 25% of the Votes
represented by such Voting Securities, such Class A
Stock to be purchased for a per share purchase price
equal to (A) in the case of Class A Common Stock, the
Market Price of a share of Common Stock on the date or
dates such Voting Securities are issued, and (B) in the
case of Class A Preference Stock, the product of the
Market Price of a share of Common Stock on the date or
dates such Voting Securities are issued, multiplied by
the number of Class A Conversion Shares related to one
share of Class A Preference Stock outstanding
immediately prior to such purchase, provided that
shares of Class A Preference Stock purchased at the
Optional Shares Closing shall have a per share
liquidation value equal to their per share purchase
price.
(b) Within ten Business Days following the
Investment Completion Date, the Company shall deliver to
each of FT and DT written notice of the number of Optional
Shares they are entitled to purchase, setting forth in
reasonable detail a description of the issuances of Voting
Securities that gave rise to FT and DT's right to purchase
the Optional Shares and the basis for its computation of the
price per share of Common Stock associated with each
Optional Share. Each of FT and DT may exercise its right to
purchase any or all of the Optional Shares by written notice
delivered to the Company prior to the tenth Business Day
after the Company's delivery of such notice (the "Notice of
Exercise") setting forth the number of Optional Shares that
it wishes to purchase and the related per share price or
prices for such Optional Shares. The Notice of Exercise
shall constitute a binding commitment on the part of the
Buyer in question to purchase such Optional Shares upon the
terms set forth in this Agreement.
(c) The closing (the "Optional Shares Closing")
of the purchase and sale of the Optional Shares, if any,
shall take place at the offices of Debevoise & Plimpton, 875
Third Avenue, New York, New York at 10:00 a.m., New York
City time, on the thirtieth Business Day after the Company's
receipt of the notice described in clause (b), or at such
other date and time as the Parties shall agree in writing,
provided that, if the Optional Shares Closing shall not have
occurred prior to the 60th day following the Investment
Completion Date, the Class A Holders may, upon written
notice delivered to the Company, be released from all
obligations to purchase Shares pursuant to this Section 2.5,
notwithstanding any delivery of the Notice of Exercise.
(i) At the Optional Shares Closing, the Company
shall deliver, or cause to be delivered, the following
to each of FT and DT:
(x) certificates representing the number of
Optional Shares to be purchased by FT or DT,
respectively, in the name of FT or DT, as the case
may be, against payment of the purchase price
therefor; and
(y) the certificates and other documents
required to be delivered by the Company pursuant
to Article V.
(ii) At the Optional Shares Closing, each of FT
and DT shall deliver the following to the Company:
(x) cash in the amount of the aggregate
purchase price for the Optional Shares to be pur-
chased by it, by wire transfer of immediately
available funds to an account designated by the
Company at least five Business Days prior to the
date of the Optional Shares Closing; and
(y) the certificates and other documents
required to be delivered by FT or DT, as the case
may be, pursuant to Article V.
Section 2.6. Antidilution. The number of shares
of Class A Stock to be purchased by the Buyers hereunder,
and, in accordance with the Class A Provisions, the purchase
price therefor and the dollar amounts used in calculating
the foregoing, shall be adjusted to reflect any stock split,
subdivision, stock dividend, or other reclassification,
consolidation or a combination of the Voting Securities of
the Company or similar action or transaction in each case
occurring during the period beginning June 14, 1994 and
ending on the Investment Completion Date, provided that no
adjustment shall be made under this Section 2.6 in respect
of the Cellular Spin-off.
Section 2.7. Reduction of Purchased Shares. The
number of shares of Class A Stock to be purchased by FT and
DT hereunder shall be reduced by the minimum number of
shares, if any, necessary so that, following the Investment
Completion Date, FT and DT and their respective Affiliates
shall Beneficially Own in the aggregate 20% of the sum of
(a) the aggregate number of Votes of the Company outstanding
at that time and (b) the aggregate number of Votes
represented by the Voting Securities which FT and DT and
their respective Affiliates have committed to purchase from
the Company. Any reduction in shares pursuant to this
Section 2.7 shall be borne one-half by each of FT and DT.
Section 2.8. Effect of Conversion. If after the
Initial Issuance Date, the Fundamental Rights (as such term
is defined in the Stockholders' Agreement) shall have
terminated as to all outstanding shares of Class A
Preference Stock, or all outstanding shares of Class A
Common Stock shall have converted into Common Stock, in each
case pursuant to Section 7 of the Class A Provisions, each
share of Class A Stock to have been issued by the Company
pursuant to this Agreement shall (i) in the case of shares
of Class A Common Stock, instead be issued as one duly
issued, fully paid and nonassessable share of Common Stock,
and (ii) in the case of shares of Class A Preference Stock,
instead be issued as that number of duly issued, fully paid
and nonassessable shares of Common Stock equal to the number
of related Class A Conversion Shares immediately prior to
such issuance.
ARTICLE III
CONDITIONS TO THE FIRST CLOSING
Section 3.1. Conditions to Each Party's Obliga-
tions. The obligation of each Party to consummate the
transactions contemplated hereby at the First Closing is
subject to the fulfillment of each of the following condi-
tions on or prior to the Initial Issuance Date:
(a) All notifications required pursuant to the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), to carry out the transactions con-
templated by this Agreement or by the Other Agreements shall
have been made, and the applicable waiting period and any
extensions thereof shall have expired or been terminated,
without the imposition of any Burdensome Condition.
(b) (i) The Commission of the European Communi-
ties, pursuant to Article 85(3) of the Treaty of Rome, shall
have granted an exemption which exempts the Joint Venture
Documents and the transactions contemplated thereby (and, if
necessary, this Agreement and each Other Agreement, and the
transactions contemplated hereby and thereby) from the
operation of Article 85(1) of the Treaty of Rome, without
the imposition of any Burdensome Condition, or (ii) each
Party shall have determined, in its individual and sole
discretion, that it is satisfied that such exemption will be
granted in a reasonable time and without the imposition of a
Burdensome Condition.
(c) FT shall have received the approval of the
French minister in charge of economic affairs and finance
(ministre charge de l'economie et des finances) and the
French minister in charge of posts and telecommunications
(ministre charge des postes et des telecommunications) to
carry out the transactions contemplated hereby, and by the
Other Agreements and the Joint Venture Documents, without
the imposition of a Burdensome Condition.
(d) Either (i) DT shall have received the
approval of the Bundeskartellamt to carry out the trans-
actions contemplated hereby, and by the Other Agreements and
the Joint Venture Documents, without the imposition of a
Burdensome Condition, or (ii) the exemption referred to in
clause (b)(i) of this Section 3.1 shall have been obtained.
(e) All other Governmental Approvals required to
be obtained to consummate the transactions contemplated by
this Agreement, the Other Agreements and the Joint Venture
Documents shall have been obtained, and all other applicable
pre-consummation waiting periods shall have expired, except
for Governmental Approvals and waiting periods the failure
of which to obtain or satisfy would not, individually or in
the aggregate, be reasonably likely to impose a Burdensome
Condition or materially and adversely affect the ability of
any Party to perform its obligations hereunder or under the
Other Agreements.
(f) No order of any Governmental Authority (in-
cluding a court order) shall have been entered that enjoins,
restrains or prohibits consummation of the transactions
contemplated by this Agreement or the Other Agreements, or
puts in doubt the validity of this Agreement or the Other
Agreements in any material respect.
(g) No action shall have been taken by any Gov-
ernmental Authority to rescind or withdraw any of the Gov-
ernmental Approvals described or referred to in this Section
3.1 or to rescind the termination of the review and
investigation of the transactions contemplated by this
Agreement and the Other Agreements under Exon-Florio, and no
action shall have been taken to modify any such Governmental
Approvals or any determination with respect to the
investigation under Exon-Florio in a manner that would
impose a Burdensome Condition.
(h) The stockholders of the Company shall have
duly approved the Proposals by the requisite vote at the
Stockholders' Meeting.
(i) The Company shall have been advised by the
New York Stock Exchange that the Common Stock will continue
to be listed on the New York Stock Exchange after (i) the
issuance and sale of the Class A Common Stock and/or the
Class A Preference Stock and (ii) the effectiveness of the
provisions of this Agreement, the Other Agreements and the
Amendment.
(j) The conditions to closing set forth in Arti-
cle 13 of the Joint Venture Agreement shall have been ful-
filled or validly waived and the "Closing" as such term is
defined in the Joint Venture Agreement shall have occurred
simultaneously with the First Closing.
(k) (i) An effective written order or other
final action from the FCC (either in the first instance or
upon review or reconsideration) affirming that (x) the
transactions contemplated by this Agreement and the Other
Agreements do not result in a transfer of control within the
meaning of Section 310(d) of the Communications Act; (y) a
level of foreign ownership in the Company of up to 28 per-
cent is not inconsistent with the public interest; and
(z) the transactions contemplated by this Agreement and the
Other Agreements are not otherwise inconsistent with the
public interest, or an effective written order or other
final action by the FCC (either in the first instance or
upon review or reconsideration) to the effect that no such
approval is required; or
(ii) an effective written order from, or other
final action taken by, the FCC pursuant to delegated author-
ity (either in the first instance or upon review or re-
consideration) affirming that (x) the transactions con-
templated by this Agreement and the Other Agreements do not
result in a transfer of control within the meaning of Sec-
tion 310(d) of the Communications Act; (y) a level of for-
eign ownership in the Company of up to 28 percent is not
inconsistent with the public interest; and (z) the trans-
actions contemplated by this Agreement and the Other Agree-
ments are not otherwise inconsistent with the public in-
terest, or an effective written order from, or other final
action taken by, the FCC pursuant to delegated authority
(either in the first instance or upon review or re-
consideration) to the effect that no such approval is re-
quired, which order or final action shall no longer be
subject to further administrative review;
shall have been obtained, and shall not have been revoked or
stayed as of the Initial Issuance Date, and such order or
final action shall not impose any Burdensome Condition,
provided that any Party may waive the requirement that any
such order or final action contain the provision described
in clause (y) of subsection (k)(i) or (k)(ii) of this Sec-
tion 3.1 and such waiver shall be binding upon all Parties.
For purposes of Section 3.1(k)(ii), an order from, or other
final action taken by, the FCC pursuant to delegated au-
thority shall be deemed no longer subject to further ad-
ministrative review:
(x) if no petition for reconsideration or application
for review by the FCC of such order or final ac-
tion has been filed within thirty days after the
date of public notice of such order or final ac-
tion, as such 30-day period is computed and as
such date is defined in Sections 1.104 and 1.4 (or
any successor provisions), as applicable, of the
FCC's rules, and the FCC has not initiated review
of such order or final action on its own motion
within forty days after the date of public notice
of the order or final action, as such 40-day
period is computed and such date is defined in
Sections 1.117 and 1.4 (or any successor
provisions) of the FCC's rules; or
(y) if any such petition for reconsideration or appli-
cation for review has been filed, or, if the FCC
has initiated review of such order or final action
on its own motion, the FCC has issued an effective
written order or taken final action to the effect
set forth in clause (i) above.
Section 3.2. Conditions to the Buyers' Obliga-
tions. The obligation of each Buyer to consummate the
transactions contemplated hereby at the First Closing is
subject to the fulfillment of each of the following condi-
tions on or prior to the Initial Issuance Date:
(a) The representations and warranties of the
Company made pursuant to this Agreement and the Other Agree-
ments shall be true and correct in all material respects at
and as of the date hereof and at and as of the Initial
Issuance Date as if such representations and warranties were
made at and as of the Initial Issuance Date except for
representations and warranties that relate solely to a date
prior to the Initial Issuance Date and except to the extent
contemplated or permitted by this Agreement, the Other
Agreements, the Articles as amended by the Amendment or the
Joint Venture Documents.
(b) The Company shall have duly performed and
complied in all material respects with each agreement,
covenant and condition herein and in each Other Agreement
required to be performed or complied with by it on or prior
to the Initial Issuance Date.
(c) No Proceeding shall be pending or threatened
that (i) restrains, prohibits, prevents or materially chang-
es, or presents a substantial possibility of restraining,
prohibiting, preventing or materially changing, the terms of
the transactions contemplated by this Agreement or the Other
Agreements or (ii) presents a substantial possibility of
resulting in material Damages to FT or DT or their
Subsidiaries, or imposing a Burdensome Condition as to FT or
DT or Atlas, in each case arising from such transactions.
For purposes of this Section 3.2(c), the term "material
Damages" shall mean Damages material to any Buyer and its
Subsidiaries taken as a whole or material in relation to the
amount to be invested by such Buyer in the Company pursuant
to this Agreement.
(d) The Company shall have delivered to each of
the Buyers a certificate, dated the Initial Issuance Date,
signed by a duly authorized senior officer certifying that
the conditions specified in Sections 3.2(a), (b) and (c) (as
to Proceedings involving the Company) have been fulfilled.
(e) The Board of Directors shall have taken
appropriate action so that the provisions of Kan. Stat. Ann.
Section 17-12,101 (1994) (the "Business Combination Statute")
restricting "business combinations" with "interested
stockholders" (each as defined in Kan. Stat. Ann.
Section 17-12,100 (1994)) will not apply to FT, DT or any Person
who as of the date hereof is an Affiliate of FT or DT with respect
to the purchase and sale of shares of capital stock of the
Company pursuant to this Agreement.
(f) Each of the Buyers shall have received opin-
ions, dated as of the Initial Issuance Date, from counsel to
the Company reasonably satisfactory to the Buyers which
address favorably the matters set forth in Exhibit F and
which are in form and substance reasonably satisfactory to
the Buyers.
(g) The Common Stock issuable upon conversion of
the Class A Stock shall have been duly authorized and
reserved for issuance by the Company, and listed on the New
York Stock Exchange, subject to official notice of issuance.
(h) The Company shall have duly executed and
delivered the following:
(i) the Stockholders' Agreement;
(ii) the Registration Rights Agreement;
(iii) the FT Investor Confidentiality Agreement;
and
(iv) the DT Investor Confidentiality Agreement.
(i) The Amendment shall have been duly adopted
pursuant to the applicable provisions of the General Corpo-
ration Code of the State of Kansas and filed with the appro-
priate Kansas Governmental Authorities, and shall be in full
force and effect.
(j) The Company shall have duly adopted the
Bylaws Amendment and such amended terms shall be in full
force and effect.
(k) No Major Competitor of FT or DT or of the
Joint Venture shall have acquired Voting Securities of the
Company, if (i) such Voting Securities were acquired as a
result of a transaction with the Company, and following such
transaction such Major Competitor possesses a Percentage
Ownership Interest in the Company greater than ten percent,
or (ii) the Company otherwise has taken steps for the pur-
pose of encouraging or facilitating an acquisition by such a
Major Competitor of a Percentage Ownership Interest in the
Company greater than ten percent (including, without lim-
itation, by any waiver, amendment or termination of the
Rights Agreement). No Change of Control shall have oc-
curred.
Section 3.3. Conditions to the Company's Obliga-
tions. The obligation of the Company to consummate the
transactions contemplated hereby at the First Closing is
subject to the fulfillment of each of the following condi-
tions on or prior to the Initial Issuance Date:
(a) The representations and warranties of each of
the Buyers made pursuant to this Agreement and the Other
Agreements shall be true and correct in all material re-
spects at and as of the date hereof, and at and as of the
Initial Issuance Date as if such representations and war-
ranties were made at and as of the Initial Issuance Date
except for representations and warranties that relate solely
to a date prior to the Initial Issuance Date and except to
the extent contemplated or permitted by this Agreement, the
Other Agreements, the Articles as amended by the Amendment
or the Joint Venture Documents.
(b) FT and DT and each of their respective
Affiliates shall have duly performed and complied in all
material respects with each agreement, covenant and condi-
tion herein and in each Other Agreement required to be per-
formed or complied with by it on or prior to the Initial
Issuance Date.
(c) No Proceeding shall be pending or threatened
that (i) restrains, prohibits, prevents or materially chang-
es, or presents a substantial possibility of restraining,
prohibiting, preventing or materially changing, the terms of
the transactions contemplated by this Agreement or the Other
Agreements, or (ii) presents a substantial possibility of
resulting in material Damages to the Company or its Sub-
sidiaries, or imposing a Burdensome Condition as to the
Company or Sprint Sub, in each case arising from such trans-
actions. For purposes of this Section 3.3(c), the term
"material Damages" shall mean Damages material to the
Company and its Subsidiaries taken as a whole or material in
relation to the amount to be invested in the Company pur-
suant to this Agreement.
(d) Each Buyer shall have delivered to the Com-
pany a certificate, dated the Initial Issuance Date, signed
by a duly authorized senior officer, certifying that the
conditions specified in Sections 3.3(a), (b) and (c) (as to
Proceedings involving such Buyer) have been fulfilled.
(e) The Company shall have received opinions,
dated as of the Initial Issuance Date, from: (i) counsel to
FT reasonably satisfactory to the Company which address
favorably the matters set forth in Exhibit G and which are
in form and substance reasonably satisfactory to the
Company, and (ii) counsel to DT reasonably satisfactory to
the Company which address favorably the matters set forth in
Exhibit H and which are in form and substance reasonably
satisfactory to the Company.
(f) Each Buyer shall have duly executed and
delivered the following:
(i) the Stockholders' Agreement; and
(ii) the Registration Rights Agreement.
(g) FT shall have duly executed and delivered the
FT Investor Confidentiality Agreement.
(h) DT shall have duly executed and delivered the
DT Investor Confidentiality Agreement.
ARTICLE IV
CONDITIONS TO AN ADDITIONAL PREFERENCE
STOCK CLOSING, SUPPLEMENTAL
PREFERENCE STOCK CLOSING AND
DEFERRED COMMON STOCK CLOSING
Section 4.1. Condition to Each Party's Obliga-
tions. The obligation of each Party to consummate the
transactions contemplated hereby at an Additional Preference
Stock Closing, Supplemental Preference Stock Closing, or
Deferred Common Stock Closing (each an "Article IV Closing")
is subject to the fulfillment of the condition that, on or
prior to the date of the Article IV Closing in question, no
order of any Governmental Authority (including a court
order) shall have been entered that enjoins, restrains or
prohibits consummation of the transactions contemplated by
this Agreement or the Other Agreements or puts in doubt the
validity of this Agreement or the Other Agreements in any
material respect, provided that, if such an order is
entered, the date of the Article IV Closing in question
shall be delayed for a period of not more than one year from
the date on which such Article IV Closing would have
occurred but for such order (but not beyond the end of such
one-year period), if during such time any Party shall be
appealing, challenging or otherwise attempting to resolve
such order in a diligent manner, provided, further, that the
purchase price for shares sold at such Article IV Closing
shall be that which would have obtained if no such order had
been entered and such Article IV Closing had taken place on
the date on which it would have taken place but for such
order.
Section 4.2. Conditions to the Buyers' Obliga-
tions. The obligation of each Buyer to consummate the
transactions contemplated hereby at an Article IV Closing is
subject to the fulfillment of each of the following condi-
tions on or prior to the date of such Article IV Closing:
(a) The representations and warranties of the
Company set forth in:
(i) Sections 6.1, 6.2(a), 6.3 and 6.4 shall be
true and correct in all material respects at and as of
the date hereof and at and as of the date of such
Article IV Closing as if such representations and
warranties were made at and as of such date except
(x) with respect to representations and warranties that
relate solely to a date prior to such date, and were
true and correct in all material respects on such prior
date, and (y) to the extent contemplated or permitted
by this Agreement, the Other Agreements, the Articles
as amended by the Amendment or the Joint Venture
Documents; and
(ii) the first two sentences of Section 6.5(a)
(as to SEC Documents filed prior to the Initial Issu-
ance Date) and Section 6.6 (but in the case of Sec-
tion 6.6 only as to changes prior to the Initial Issu-
ance Date, but after the later of (x) the end of the
quarter covered by the last Quarterly Report on Form
10-Q of the Company filed prior to the Initial Issuance
Date, and (y) the end of the year covered by the last
Annual Report on Form 10-K of the Company filed prior
to the Initial Issuance Date) shall be true and correct
in all material respects at and as of the date hereof,
except to the extent such failure to be true and cor-
rect does not relate to, and is not reasonably likely
to relate to, a material adverse change in the busi-
ness, operations, results of operations, financial
condition, assets or liabilities of the Company com-
pared to the last to be filed prior to the Initial
Issuance Date of the Annual Report on Form 10-K of the
Company or the Quarterly Report on Form 10-Q of the
Company;
provided that if this condition fails to be satisfied, and
such failure is capable of being cured without adversely
affecting in any material respect the Buyers or their rights
hereunder (other than as to the timing of such Article IV
Closing) or under the Other Agreements, the Articles as
amended by the Amendment or the Bylaws as amended by the
Bylaws Amendment, or there is a dispute as to whether such
condition has been satisfied, the date of the Article IV
Closing in question may be delayed by the Company (i) for a
period of not more than 180 days from the date such Article
IV Closing would have occurred but for the failure of such
condition to be satisfied, if during such time the Company
is attempting in a diligent manner to cause such condition
to be satisfied, or (ii) in the case of such a dispute until
the later to occur of (x) 90 days following the rendering of
an order of a court of competent jurisdiction to the effect
that such condition involved in such dispute was not
satisfied, if during such 90-day period the Company is
attempting in a diligent manner to cause such condition to
be satisfied, and (y) 90 days following the rendering of a
final and non-appealable judgment of a court of competent
jurisdiction following an appeal or related action with
respect to such order (if such judgment is to the effect
that such condition involved in such dispute was satisfied
at or prior to the end of the 90-day period provided in the
immediately preceding clause (x)), if the Company shall be
prosecuting such appeal in a diligent manner, provided,
further, that the purchase price for shares sold at such
Article IV Closing shall be that which would have obtained
but for the delay pursuant to the proviso to this Section
4.2(a).
(b) The Company shall have performed and complied
in all material respects with its obligations under Sec-
tion 8.8 of this Agreement; Article FIFTH of the Articles as
amended by the Amendment (to the extent such Article relates
to the rights of the holders of Class A Stock); the Class A
Provisions; and Articles III, IV, V and VI, and Sections
7.1, 7.4, 7.8, 7.10 and 7.11 of the Stockholders' Agreement,
provided, that, if this condition fails to be satisfied, and
such failure is capable of being cured without adversely
affecting in any material respect the Buyers or their rights
hereunder (other than as to the timing of such Article IV
Closing) or under the Other Agreements, the Articles as
amended by the Amendment or the Bylaws as amended by the
Bylaws Amendment, or there is a dispute as to whether such
condition has been satisfied, the date of such Article IV
Closing may be delayed by the Company (i) for a period of
not more than 180 days from the date such Article IV Closing
would have occurred but for the failure of such condition to
be satisfied, if during such time the Company is attempting
in a diligent manner to cause such condition to be
satisfied, or (ii) in the case of such a dispute until the
later to occur of (x) 90 days following the rendering of an
order of a court of competent jurisdiction to the effect
that such condition involved in such dispute was not
satisfied, if during such 90-day period the Company is
attempting in a diligent manner to cause such condition to
be satisfied, and (y) 90 days following the rendering of a
final and non-appealable judgment of a court of competent
jurisdiction following an appeal or related action with
respect to such order (if such judgment is to the effect
that such condition involved in such dispute was satisfied
at or prior to the end of the 90-day period provided in the
immediately preceding clause (x)), if the Company shall be
prosecuting such appeal in a diligent manner, provided,
further, that the purchase price for shares sold at such
Article IV Closing shall be that which would have obtained
but for the delay pursuant to the proviso to this
Section 4.2(b).
(c) There shall not have occurred a Change of
Control.
(d) The Company shall have delivered to the Buy-
ers a certificate, dated the date of such Article IV
Closing, signed by a duly authorized senior officer of the
Company, certifying that the conditions specified in
Section 4.2(a), (b) and (c) have been fulfilled.
(e) Each of the Buyers shall have received an
opinion, dated the date of such Article IV Closing, from the
General Counsel of the Company which addresses favorably the
matters set forth in Exhibit I and which is in form and
substance reasonably satisfactory to the Buyers.
Section 4.3. Conditions to the Company's Obli-
gations. The obligation of the Company to consummate the
transactions contemplated hereby at an Article IV Closing is
subject to the fulfillment of each of the following condi-
tions on or prior to the date of such Article IV Closing:
(a) The respective representations and warranties
of each of the Buyers set forth in Sections 7.1(a), 7.1(b),
7.1(e), 7.1(g), 7.2(a), 7.2(b) and 7.2(e) shall be true and
correct in all material respects at and as of the date
hereof, and at and as of the date of the Article IV Closing
in question as if such representations and warranties were
made at and as of such date except (i) with respect to
representations and warranties that relate solely to a date
prior to such date and were true and correct in all material
respects on such prior date, and (ii) to the extent
contemplated or permitted by this Agreement, the Other
Agreements or the Articles as amended by the Amendment,
provided that, if this condition fails to be satisfied, and
such failure is capable of being cured without adversely
affecting in any material respect the Company or its rights
hereunder (other than as to the timing of such Article IV
Closing) or under the Other Agreements, the Articles as
amended by the Amendment or the Bylaws as amended by the
Bylaws Amendment, or there is a dispute as to whether such
condition has been satisfied, the date of such Article IV
Closing may be delayed by the relevant Buyer (i) for a
period of not more than 180 days from the date such
Article IV Closing would have occurred but for the failure
of such condition to be satisfied, if during such time the
relevant Buyer is attempting in a diligent manner to cause
such condition to be satisfied, or (ii) in the case of such
a dispute until the later to occur of (x) 90 days following
the rendering of an order of a court of competent juris-
diction to the effect that such condition involved in such
dispute was not satisfied, if during such 90-day period the
relevant Buyer is attempting in a diligent manner to cause
such condition to be satisfied, and (y) 90 days following
the rendering of a final and non-appealable judgment of a
court of competent jurisdiction following an appeal or
related action with respect to such order (if such judgment
is to the effect that such condition involved in such
dispute was satisfied at or prior to the end of the 90-day
period provided in the immediately preceding clause (x)), if
the relevant Buyer shall be prosecuting such appeal in a
diligent manner, provided, further, that the purchase price
for shares sold at such Article IV Closing shall be that
which would have obtained but for the delay pursuant to the
proviso to this Section 4.3(a).
(b) Each Buyer shall have performed and complied
in all material respects with its obligations under Arti-
cle II of this Agreement; Article II and Section 7.5 of the
Stockholders' Agreement; Sections 2.1, 3.1 and 3.2(b) of the
Standstill Agreement; and the FT Investor Confidentiality
Agreement (in the case of FT) or the DT Investor
Confidentiality Agreement (in the case of DT), provided
that, if this condition fails to be satisfied, and such
failure is capable of being cured without adversely affect-
ing in any material respect the Company or its rights here-
under (other than as to the timing of such Article IV Clos-
ing) or under the Other Agreements, the Articles as amended
by the Amendment or the Bylaws as amended by the Bylaws
Amendment, or there is a dispute as to whether such con-
dition has been satisfied, the date of such Article IV
Closing may be delayed by the relevant Buyer (i) for a
period of not more than 180 days from the date such
Article IV Closing would have occurred but for the failure
of such condition to be satisfied, if during such time the
relevant Buyer is attempting in a diligent manner to cause
such condition to be satisfied, or (ii) in the case of such
a dispute until the later to occur of (x) 90 days following
the rendering of an order of a court of competent
jurisdiction to the effect that such condition involved in
such dispute was not satisfied, if during such 90-day period
the relevant Buyer is attempting in a diligent manner to
cause such condition to be satisfied, and (y) 90 days fol-
lowing the rendering of a final and non-appealable judgment
of a court of competent jurisdiction following an appeal or
related action with respect to such order (if such judgment
is to the effect that such condition involved in such dis-
pute was satisfied at or prior to the end of the 90-day
period provided in the immediately preceding clause (x)), if
the relevant Buyer shall be prosecuting such appeal in a
diligent manner, provided, further, that the purchase price
for shares sold at such Article IV Closing shall be that
which would have obtained but for the delay pursuant to the
proviso to this Section 4.3(b).
(c) Each Buyer shall have delivered to the Com-
pany a certificate, signed by a duly authorized senior
officer, dated the date of such Article IV Closing,
certifying that the conditions specified in Section 4.3(a)
and (b) have been fulfilled.
Section 4.4. Effect of Certain Breaches. Except
as set forth in Sections 4.2, 4.3 and 10.1, no breach of the
representations, warranties, covenants or agreements
contained in this Agreement or any of the Other Agreements
shall affect the obligations of the Parties to consummate
the purchase and sale of capital stock of the Company at any
Article IV Closing, provided that this sentence shall not
affect any other rights, liabilities, duties or obligations
of the Parties arising under this Agreement, any of the
Other Agreements or any of the Joint Venture Documents as a
result of such breach.
ARTICLE V
CONDITIONS TO THE OPTIONAL SHARES CLOSING
Section 5.1. Condition to Each Party's Obliga-
tions. The obligation of each Party to consummate the
transactions contemplated hereby at the Optional Shares
Closing is subject to the fulfillment of the condition that,
on or prior to the date of the Optional Shares Closing, no
order of any Governmental Authority (including a court
order) shall have been entered that enjoins, restrains or
prohibits consummation of the transactions contemplated by
this Agreement or the Other Agreements or puts in doubt the
validity of this Agreement or the Other Agreements in any
material respect, provided that, if such an order is en-
tered, the date of the Optional Shares Closing shall be
delayed for a period of not more than one year from the date
on which the Optional Shares Closing would have occurred but
for such order (but not beyond the end of such one-year
period), if during such time any Party shall be appealing,
challenging or otherwise attempting to resolve such order in
a diligent manner.
Section 5.2. Conditions to the Buyers' Obliga-
tions. The obligation of each Buyer to consummate the
transactions contemplated hereby at the Optional Shares
Closing is subject to the fulfillment of each of the follow-
ing conditions on or prior to the date of the Optional
Shares Closing:
(a) The representations and warranties of the
Company set forth in:
(i) Sections 6.1, 6.2(a), 6.3 and 6.4 shall be
true and correct in all material respects at and as of
the date hereof and at and as of the date of the Op-
tional Shares Closing as if such representations and
warranties were made at and as of the date of the
Optional Shares Closing except (x) with respect to
representations and warranties that relate solely to a
date prior to the date of the Optional Shares Closing,
and were true and correct in all material respects on
such prior date, and (y) to the extent contemplated or
permitted by this Agreement, the Other Agreements or
the Articles as amended by the Amendment or the Joint
Venture Documents; and
(ii) the first two sentences of Section 6.5(a)
(as to SEC Documents filed prior to the Initial Issu-
ance Date) and Section 6.6 (but in the case of Sec-
tion 6.6 only as to changes prior to the Initial Issu-
ance Date, but after the later of (x) the end of the
quarter covered by the last Quarterly Report on Form
10-Q of the Company filed prior to the Initial Issuance
Date, and (y) the end of the year covered by the last
Annual Report on Form 10-K of the Company filed prior
to the Initial Issuance Date) shall be true and correct
in all material respects at and as of the date hereof,
except to the extent such failure to be true and cor-
rect does not relate to, and is not reasonably likely
to relate to, a material adverse change in the busi-
ness, operations, results of operations, financial
condition, assets or liabilities of the Company com-
pared to the last to be filed prior to the Initial
Issuance Date of the Annual Report on Form 10-K of the
Company or the Quarterly Report on Form 10-Q of the
Company;
provided that if this condition fails to be satisfied, and
such failure is capable of being cured without adversely
affecting in any material respect the Buyers or their rights
hereunder (other than as to the timing of the Optional
Shares Closing) or under the Other Agreements, the Articles
as amended by the Amendment or the Bylaws as amended by the
Bylaws Amendment, or there is a dispute as to whether this
condition has been satisfied, the date of the Optional
Shares Closing may be delayed by the Company (i) for a
period of not more than 180 days from the date the Optional
Shares Closing would have occurred but for the failure of
such condition to be satisfied, if during such time the
Company is attempting in a diligent manner to cause all such
conditions to be satisfied, or (ii) in the case of such a
dispute, until the later to occur of (x) 90 days following
the rendering of an order of a court of competent jurisdic-
tion to the effect that such condition involved in such
dispute was not satisfied, if during such 90-day period the
Company is attempting in a diligent manner to cause such
condition to be satisfied, and (y) 90 days following the
rendering of a final and non-appealable judgment of a court
of competent jurisdiction following an appeal or related
action with respect to such order (if such judgment is to
the effect that such condition involved in such dispute was
satisfied at or prior to the end of the 90-day period in the
immediately preceding clause (x)), if the Company shall be
prosecuting such appeal in a diligent manner, provided,
further, that the purchase price for Shares sold at the
Optional Shares Closing shall be that which would have been
obtained but for the delay pursuant to the proviso to this
Section 5.2(a).
(b) The Company shall have performed and complied
in all material respects with its obligations under Sec-
tion 8.8 of this Agreement; Article FIFTH of the Articles as
amended by the Amendment (to the extent such Article relates
to the rights of the holders of Class A Stock); that portion
of Article SIXTH of the Articles as amended by the Amendment
entitled "General Provisions Relating to Class A Stock"; and
Articles III, IV, V and VI, and Sections 7.1, 7.4, 7.8, 7.10
and 7.11 of the Stockholders' Agreement, provided that, if
this condition fails to be satisfied, and such failure is
capable of being cured without adversely affecting in any
material respect the Buyers or their rights hereunder (other
than as to the timing of the Optional Shares Closing) or
under the Other Agreements, the Articles as amended by the
Amendment or the Bylaws as amended by the Bylaws Amendment,
or there is a dispute as to whether such condition has been
satisfied, the date of the Optional Shares Closing may be
delayed by the Company (i) for a period of not more than 180
days from the date the Optional Shares Closing would have
occurred but for the failure of such condition to be satis-
fied, if during such time the Company is attempting in a
diligent manner to cause such condition to be satisfied, or
(ii) in the case of such a dispute until the later to occur
of (x) 90 days following the rendering of an order of a
court of competent jurisdiction to the effect that such
condition involved in such dispute was not satisfied, if
during such 90-day period the Company is attempting in a
diligent manner to cause such condition to be satisfied, and
(y) 90 days following the rendering of a final and
non-appealable judgment of a court of competent jurisdiction
following an appeal or related action with respect to such
order (if such judgment is to the effect that such condition
involved in such dispute was satisfied at or prior to the
end of the 90-day period provided in the immediately
preceding clause (x)), if the Company shall be prosecuting
such appeal in a diligent manner, provided, further, that
the purchase price for Shares sold at the Optional Shares
Closing shall be that which would have been obtained but for
the delay pursuant to the proviso to this Section 5.2(b).
(c) There shall not have occurred a Change of
Control.
(d) The Company shall have delivered to each of
the Buyers a certificate, dated the date of the Optional
Shares Closing, signed by a duly authorized senior officer
of the Company, certifying that the conditions specified in
Section 5.2(a), (b) and (c) have been fulfilled.
(e) Each of the Buyers shall have received an
opinion, dated as of the date of the Optional Shares Clos-
ing, from the General Counsel of the Company which addresses
favorably the matters set forth in Exhibit J and which is in
form and substance reasonably satisfactory to the Buyers.
Section 5.3. Conditions to the Company's Obli-
gations. The obligation of the Company to consummate the
transactions contemplated hereby at the Optional Shares
Closing is subject to the fulfillment of each of the follow-
ing conditions on or prior to the date of the Optional
Shares Closing:
(a) The respective representations and warranties
of each of the Buyers set forth in Sections 7.1(a), 7.1(b),
7.1(e), 7.1(g), 7.2(a), 7.2(b) and 7.2(e) shall be true and
correct in all material respects at and as of the date
hereof, and on and as of the date of the Optional Shares
Closing as if such representations and warranties were made
at and as of the date of the Optional Shares Closing except
(i) with respect to representations and warranties that
relate solely to a date prior to the date of the Optional
Shares Closing and were true and correct in all material
respects on such prior date, and (ii) to the extent contem-
plated or permitted by this Agreement, the Other Agreements
or the Articles as amended by the Amendment, provided that,
if this condition fails to be satisfied, and such failure is
capable of being cured without adversely affecting in any
material respect the Company or its rights hereunder (other
than as to the timing of the Optional Shares Closing) or
under the Other Agreements, the Articles as amended by the
Amendment or the Bylaws as amended by the Bylaws Amendment,
or there is a dispute as to whether such condition has been
satisfied, the date of the Optional Shares Closing may be
delayed by the relevant Buyer (i) for a period of not more
than 180 days from the date the Optional Shares Closing
would have occurred but for the failure of such condition to
be satisfied, if during such time the relevant Buyer is
attempting in a diligent manner to cause such condition to
be satisfied, or (ii) in the case of such dispute as to
whether such condition has been satisfied, until the later
to occur of (x) 90 days following the rendering of an order
of a court of competent jurisdiction to the effect that such
condition involved in such dispute was not satisfied, if
during such 90-day period the relevant Buyer is attempting
in a diligent manner to cause such condition to be satis-
fied, and (y) the rendering of a final and non-appealable
judgment of a court of competent jurisdiction following an
appeal or related action with respect to such order (if such
judgment is to the effect that such condition involved in
such dispute was satisfied at or prior to the end of the
90-day period provided in the immediately preceding clause
(x)), if the relevant Buyer shall be prosecuting such appeal
in a diligent manner, provided, further, that the purchase
price for Shares sold at the Optional Shares Closing shall
be that which would have been obtained but for the delay
pursuant to the proviso to this Section 5.3(a).
(b) Each Buyer shall have performed and complied
in all material respects with its obligations under Article
II of this Agreement; Article II and Section 7.5 of the
Stockholders' Agreement; Sections 2.1, 3.1 and 3.2(b) of the
Standstill Agreement; and the FT Investor Confidentiality
Agreement (in the case of FT) or the DT Investor
Confidentiality Agreement (in the case of DT), provided
that, if this condition fails to be satisfied, and such
failure is capable of being cured without adversely affect-
ing in any material respect the Company or its rights here-
under (other than as to the timing of the Optional Shares
Closing) or under the Other Agreements, the Articles as
amended by the Amendment or the Bylaws as amended by the
Bylaws Amendment, or there is a dispute as to whether such
condition has been satisfied, the date of the Optional
Shares Closing may be delayed by the relevant Buyer (i) for
a period of not more than 180 days from the date the Option-
al Shares Closing would have occurred but for the failure of
such condition to be satisfied, if during such time the
relevant Buyer is attempting in a diligent manner to cause
such condition to be satisfied, or (ii) in the case of such
a dispute until the later to occur of (x) 90 days following
the rendering of an order of a court of competent jurisdic-
tion to the effect that such condition involved in such
dispute was not satisfied, if during such 90-day period the
relevant Buyer is attempting in a diligent manner to cause
such condition to be satisfied, and (y) 90 days following
the rendering of a final and non-appealable judgment of a
court of competent jurisdiction following an appeal or
related action with respect to such order (if such judgment
is to the effect that such condition involved in such dis-
pute was satisfied at or prior to the end of the 90-day
period provided in the immediately preceding clause (x)), if
the relevant Buyer shall be prosecuting such appeal in a
diligent manner, provided, further, that the purchase price
for Shares sold at the Optional Shares Closing shall be that
which would have been obtained but for the delay pursuant to
the proviso to this Section 5.3(b).
(c) Each Buyer shall have delivered to the Com-
pany a certificate, signed by a duly authorized senior
officer, dated the date of the Optional Shares Closing,
certifying that the conditions specified in Section 5.3(a)
and (b) have been fulfilled.
Section 5.4. Effect of Certain Breaches. Except
as set forth in Sections 5.2, 5.3 and 10.1, no breach of the
representations, warranties, covenants or agreements
contained in this Agreement or any of the Other Agreements
shall affect the obligations of the Parties to consummate
the purchase and sale of the Optional Shares at the Optional
Shares Closing, provided, that this sentence shall not
affect any other rights, liabilities, duties or obligations
of the Parties arising under this Agreement, any of the
Other Agreements or any of the Joint Venture Documents as a
result of such breach.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to each of FT
and DT as follows:
Section 6.1. Organization, Qualification, Etc.
The Company is a corporation duly organized, validly exist-
ing and in good standing under the laws of the State of
Kansas. The Company has all requisite corporate power and
authority to: (a) enter into this Agreement and each Other
Agreement, (b) subject to approval by the stockholders of
the Company and to the filing of the Amendment, issue and
sell (or deliver upon conversion, as the case may be) shares
of Class A Common Stock, Class A Preference Stock and Common
Stock to the Buyers pursuant to this Agreement, the
Stockholders' Agreement and the Articles as amended by the
Amendment and comply with its obligations under this
Agreement and each Other Agreement, and (c) own, lease and
operate its properties and assets and to carry on in all
material respects its business as now being conducted and
proposed to be conducted as shall be described in the Proxy
Statement. The copies of the Articles and the Bylaws, which
have been delivered previously to each Buyer, are complete
and correct and in full force and effect, in each case on
the date hereof.
Section 6.2. Capital Stock and Other Matters.
(a) Section 6.2 of the Company Disclosure Schedule sets
forth the authorized capital stock of the Company, the num-
ber of each class of shares issued and outstanding, the
number of each class of shares reserved for issuance pur-
suant to convertible securities, options and other agree-
ments, and the number of each class of shares held by the
Company in its treasury or held by its Subsidiaries, at
June 14, 1994 and as at a date which is no more than ten
Business Days prior to the date hereof (the "Capitalization
Date"). The Company has issued no more than 150,000 shares
of Common Stock and no shares of Preferred Stock between the
Capitalization Date and the date hereof. No bonds, de-
bentures, notes or other indebtedness of the Company or any
of its Subsidiaries having the right to vote (or convertible
into securities having the right to vote) on any matters on
which holders of shares of capital stock of the Company may
vote were issued or outstanding on June 14, 1994 or are
issued and outstanding on the date hereof. All of the
issued and outstanding shares of the Company's capital stock
are validly issued, fully paid and nonassessable. No holder
of the outstanding shares of the Company's capital stock is
entitled to preemptive rights with respect to any issuance
of shares of Class A Common Stock.
(b) No class of capital stock is entitled to
preemptive rights. Except as set forth in Section 6.2 of
the Company Disclosure Schedule, there are no stockholder
agreements, voting trusts or other Contracts to which the
Company is a party or by which it is bound relating to the
voting or transfer of any shares or units of any Voting
Securities of the Company.
Section 6.3. Validity of Shares. Subject to
obtaining the approval of the stockholders of the Company
specified in Section 8.4 hereof and to the filing of the
Amendment with the appropriate Kansas Governmental
Authorities, when the shares of Class A Common Stock and
Class A Preference Stock, as the case may be, are issued and
delivered, or any shares of Common Stock are sold and
delivered, in each case against payment therefor (or upon
conversion, as the case may be) at the relevant closing as
provided hereby, each such share shall be validly issued,
free of any Lien (other than any Lien arising due to action
or inaction of any of the Buyers), fully paid and a non-
assessable share of capital stock of the Company.
Section 6.4. Corporate Authority; No Violation.
(a) The execution, delivery and performance of this Agree-
ment and each Other Agreement, and the consummation of the
transactions contemplated hereby and thereby (including,
without limitation, the issuance and sale of the Company's
capital stock) have been duly authorized by all requisite
corporate action on the part of the Company, subject to
obtaining the approval of the stockholders of the Company
specified in Section 8.4 hereof and to the filing of the
Amendment with the appropriate Kansas Governmental
Authorities and, assuming that, with respect solely to those
provisions of this Agreement, the Stockholders' Agreement
and the Amendment that require explicitly the receipt of
Continuing Director approval for the performance of
obligations or consummation of transactions on the part of
the Company hereunder or thereunder, Continuing Director
approval is obtained in the manner provided herein or
therein. Upon the execution and delivery of this Agreement
and each Other Agreement by the Company, each such agreement
will constitute a legal, valid and binding agreement of the
Company, enforceable against the Company in accordance with
its terms.
(b) Neither the execution, delivery and perfor-
mance by the Company of this Agreement and each Other Agree-
ment, the adoption of the Bylaws Amendment and the adoption
and filing of the Amendment nor the consummation by the
Company of the transactions contemplated hereby or thereby
will: (i) subject to the approval of the Proposals by the
stockholders of the Company and the filing of the Amendment
with the appropriate Kansas Governmental Authorities, vio-
late or conflict with any provision of the Articles or
Bylaws, assuming that, with respect solely to those pro-
visions of this Agreement, the Stockholders' Agreement and
the Amendment that require explicitly the receipt of
Continuing Director approval for the performance of
obligations or consummation of transactions on the part of
the Company hereunder or thereunder, Continuing Director
approval is obtained in the manner provided herein or
therein; (ii) require any Governmental Approvals or Third
Party Approvals, except (x) as set forth in Section 6.4 of
the Company Disclosure Schedule or (y) where the failure to
so obtain, make or file such Governmental Approvals or Third
Party Approvals, individually or in the aggregate, is not
reasonably likely to have a Material Adverse Effect on the
Company and its Subsidiaries taken as a whole or adversely
affect in any material respect the Company's ability to
perform its obligations hereunder or under the Other Agree-
ments; (iii) except as set forth in Section 6.4 of the
Company Disclosure Schedule, result in a default (or an
event that, with notice or lapse of time or both, would
become a default) or give rise to any right of termination
by any third party, cancellation, amendment or acceleration
of any obligation or the loss of any benefit under, or re-
sult in the creation of any Lien on any of the assets or
properties of the Company or any of its Subsidiaries pur-
suant to, any Contract to which the Company or any of its
Subsidiaries is a party or by which the Company or any of
its Subsidiaries or any of their respective assets or prop-
erties is bound, except for any such defaults, terminations,
cancellations, amendments, accelerations, losses, or Liens
that, individually or in the aggregate, are not reasonably
likely to have a Material Adverse Effect on the Company and
its Subsidiaries taken as a whole or adversely affect in any
material respect the Company's ability to perform its ob-
ligations hereunder or under the Other Agreements; or
(iv) except as set forth in Section 6.4 of the Company
Disclosure Schedule, violate or conflict with any Applicable
Law applicable to the Company or any of its Subsidiaries, or
any of the properties, businesses, or assets of any of the
Company or any of its Subsidiaries, except violations and
conflicts that, individually or in the aggregate, are not
reasonably likely to have a Material Adverse Effect on the
Company and its Subsidiaries taken as a whole or adversely
affect in any material respect the Company's ability to
perform its obligations hereunder or under the Other Agree-
ments.
Section 6.5. Company Reports and Financial State-
ments. (a) The Company has previously made available to FT
and DT complete and correct copies of each: (i) annual
report on Form 10-K for the Company; (ii) quarterly report
on Form 10-Q for the Company; (iii) definitive proxy
statement for the Company; (iv) current report on Form 8-K
for the Company; and (v) other form, report, schedule and
statement, in the case of each of clauses (i), (ii), (iii),
(iv) and (v) filed by the Company with the SEC under the
Exchange Act since January 1, 1993 (collectively, the "SEC
Documents"). As of their respective dates, each of the SEC
Documents complied (or will comply) in all material respects
with the requirements of the Exchange Act to the extent
applicable to such SEC Document, and none of such SEC Docu-
ments (as of their respective dates) contained (or will
contain) an untrue statement of a material fact or omitted
(or will omit) to state a material fact required to be
stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were
made, not misleading, except as the same was corrected or
superseded in a subsequent document duly filed with the SEC,
that has been delivered to the Buyers. Since January 1,
1993, the Company has timely filed all reports and
registration statements and made all filings required to be
filed under the Exchange Act with the SEC under the rules
and regulations of the SEC.
(b) The audited consolidated financial statements
and unaudited consolidated interim financial statements
included in the SEC Documents (including any related notes)
fairly present the financial position of the Company and its
consolidated Subsidiaries as of the dates thereof and the
results of operations and changes in cash flows for the
periods specified, subject, where appropriate, to normal
year-end audit adjustments, in each case in accordance with
past practice and GAAP applied on a consistent basis during
the periods involved (except as otherwise stated therein).
Except as and to the extent set forth in the SEC Documents
or Section 6.5 of the Company Disclosure Schedule, since
March 31, 1995, the Company and its Subsidiaries have
incurred no liability or obligation of any nature (whether
accrued, absolute, contingent or otherwise) other than
liabilities and obligations that, individually and in the
aggregate, are not reasonably likely to have a Material
Adverse Effect on the Company and its Subsidiaries taken as
a whole or materially and adversely affect the Company's
ability to perform its obligations hereunder or under the
Other Agreements.
Section 6.6. Absence of Certain Changes or
Events. Except as set forth in Section 6.6 of the Company
Disclosure Schedule, since March 31, 1995 there has not
been, occurred or arisen any change in the business, finan-
cial condition or results of operations of the Company and
its Subsidiaries taken as a whole, other than as a result of
changes in general business conditions or legal or regula-
tory changes affecting the U.S. telecommunications industry
generally (including the effect on competition resulting
therefrom) or actions by competitors, having a Material
Adverse Effect on the Company and its Subsidiaries taken as
a whole or any change that adversely affects in any material
respect the Company's ability to perform its obligations
hereunder or under the Other Agreements.
Section 6.7. Investigations; Litigation. Except
as set forth in Section 6.7 of the Company Disclosure Sched-
ule, or as the Company has previously advised the Buyers in
writing on or prior to the date hereof, there is no Proceed-
ing pending, or to the best of the Company's knowledge,
threatened against or relating to the Company or any of its
Subsidiaries at law or in equity that, individually or in
the aggregate, is reasonably likely to have a Material
Adverse Effect on the Company and its Subsidiaries taken as
a whole or adversely affect in any material respect the Com-
pany's ability to perform its obligations hereunder or under
the Other Agreements. There is no judgment, decree, injunc-
tion, rule or order of any Governmental Authority outstand-
ing against the Company or any of its Subsidiaries that,
individually or in the aggregate, is reasonably likely to
have a Material Adverse Effect on the Company and its Sub-
sidiaries taken as a whole or adversely affect in any mat-
erial respect the Company's ability to perform its obli-
gations hereunder or under the Other Agreements.
Section 6.8. Proxy Statement; Other Information.
(a) None of the information included, or incorporated by
reference, in the Proxy Statement or any amendment or sup-
plement thereto, will at the time of the mailing of the
definitive Proxy Statement, and at the time of the Stock-
holders' 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 the light of the circumstances under which they
are made, not misleading, provided that the foregoing shall
not apply to any investment bank's fairness opinion included
therein and that no representation is made by the Company
with respect to (i) information provided by FT or DT or
their Affiliates in writing specifically for inclusion, or
incorporation by reference, in the Proxy Statement, (ii) any
information set forth in the acquiring person statement
delivered by FT, DT and any of their Affiliates pursuant to
Section 17-1291 of the Kansas Control Share Acquisitions
Statute (the "Acquiring Person Statement"), or (iii) any
representations or warranties made by FT or DT in any agree-
ment that is included as a schedule or exhibit to the Proxy
Statement. The Proxy Statement, at the time of mailing and
at the time of the Stockholders' Meeting, will comply in all
material respects with the provisions of the Exchange Act.
(b) All documents that the Company is responsible
for filing with any Governmental Authority in connection
with the transactions contemplated hereby other than those
described in Section 6.8(a) have complied and will comply in
all material respects with Applicable Law. All information
supplied or to be supplied by the Company in any document
filed with any Governmental Authority in connection with the
transactions contemplated hereby or by the Other Agreements
will be, at the time of filing, true and correct in all
material respects, except where the failure to be true and
correct, individually or in the aggregate, would not be
reasonably likely to have a Material Adverse Effect on the
Company and its Subsidiaries taken as a whole and would not
adversely affect in any material respect the consummation of
the transactions contemplated by this Agreement or any Other
Agreement.
Section 6.9. Certain Tax Matters. To the best of
the Company's knowledge and belief, it is reasonable to
assert that the Company is not a United States Real Property
Holding Corporation, as that term is defined under Section
897 of the Code and the regulations promulgated thereunder.
Section 6.10. Amendments of the Rights Agreement.
The Board of Directors has taken all necessary action to
amend the Rights Agreement to provide that the ownership by
FT, DT and their respective Affiliates and Associates of all
of the Voting Securities permitted to be owned by them under
Sections 2.1(a)(i), 2.1(a)(ii) and 2.3 of the Standstill
Agreement (but not Sections 2.1(a)(iii) or 2.2 thereof or
Section 2.3 thereof to the extent based upon an applicable
Percentage Limitation (as defined in the Standstill
Agreement) as determined by Section 2.1(a)(iii) or 2.2
thereof) will not result in FT, DT or any of their
respective Affiliates or Associates (as such terms are
defined in the Rights Agreement) being deemed an Acquiring
Person (as such term is defined in the Rights Agreement) or
result in the occurrence of a Stock Acquisition Date, Dis-
tribution Date, Section 11(a)(ii) Event or Section 13 Event
(as such terms are defined in the Rights Agreement).
Section 6.11. Other Registration Rights. The
Company has not granted, and has not agreed to grant, any
demand or incidental registration rights to any Person other
than (a) rights to be granted pursuant to the Registration
Rights Agreement, and (b) rights that will not adversely
affect the registration rights to be granted to the Buyers
in the Registration Rights Agreement.
Section 6.12. Takeover Statutes. The Board of
Directors has taken appropriate action so that the provi-
sions of the Business Combination Statute will not, prior to
the termination of this Agreement, apply to FT, DT or any
Person who as of the date hereof is an Affiliate of FT or
DT. Subject to the approval of the stockholders of the
Company specified in Section 8.4 hereof, the ownership by FT
and DT and any Qualified Subsidiary identified in the
Acquiring Person Statement of shares of the Company's
capital stock representing in the aggregate less than
one-third of the voting power of the Company (assuming for
purposes of the Kansas Control Share Acquisitions Statute
that none of FT, DT, any Qualified Subsidiary identified in
the Acquiring Person Statement, or their respective affili-
ates and associates (as each such term is defined in the
Kansas Control Share Acquisitions Statute), acquires any
Voting Securities other than as contemplated or permitted by
this Agreement, any Other Agreement, or the Amendment, or
owned, directly or indirectly, or had or exercised the power
to vote or direct the vote of, in each case alone or as part
of a group, any Voting Securities as of the date of this
Agreement or at the time of the vote contemplated by
Section 6.13 hereof) will not result in a loss of voting
rights with respect to such shares due to the Kansas Control
Share Acquisitions Statute. No other "fair price," "morato-
rium," "control share acquisition," "business combination,"
"shareholder protection" or similar anti-takeover statute or
regulation enacted under the Applicable Laws of any state of
the United States of America will apply to this Agreement or
any Other Agreement, or the transactions contemplated hereby
or thereby (assuming that none of FT, DT and their respec-
tive Affiliates Beneficially Own any Voting Securities as of
the date hereof and that none of such Persons acquires any
Voting Securities other than as contemplated or permitted by
this Agreement, any Other Agreement or the Amendment) except
for statutes or regulations the failure of the Company with
which to comply would not have a material adverse effect on
(a) the transactions contemplated in this Agreement or any
Other Agreement, (b) the ability of the Buyers to exercise
fully their rights under this Agreement or any Other
Agreement or the Amendment, or (c) the intrinsic value of an
investment in the Company's equity securities (provided that
a change in the Market Price of the Company's equity securi-
ties shall not, in and of itself, be deemed to have a
material adverse effect on the intrinsic value of an invest-
ment in the Company's equity securities).
Section 6.13. Vote Required; Board Recommenda-
tion. The only votes of the stockholders of the Company
required under Kansas law and the Articles and Bylaws to
approve the transactions contemplated by this Agreement and
by the Other Agreements are (a) the affirmative vote of the
holders of a majority of the outstanding shares of the
Common Stock, the Preferred Stock-First Series, the Pre-
ferred Stock-Second Series and the Preferred Stock-Fifth
Series of the Company, voting together as a single class,
(b) the affirmative vote of the holders of a majority of the
outstanding shares of the Common Stock, voting as a single
class, and (c) in the case of clause (c) of the definition
of "Proposals," the affirmative vote of the holders of a
majority of such outstanding shares, but excluding all
"interested shares" within the meaning of Section 17-1288 of
the Kansas Control Share Acquisitions Statute (assuming for
the purposes of the Kansas Control Share Acquisitions
Statute that none of FT, DT and their respective affiliates
and associates (as each such term is defined in the Kansas
Control Share Acquisitions Statute) owned, directly or
indirectly, or had or exercised the power to vote or direct
the vote of, in each case alone or as part of a group, any
Voting Securities as of the date hereof or at the time of
the vote contemplated by this Section 6.13 and that none of
such Persons acquires any Voting Securities other than as
contemplated or permitted by this Agreement, any Other
Agreement or the Amendment). The Board of Directors has
unanimously determined that the Proposals are advisable and
in the best interests of the stockholders of the Company.
Section 6.14. Long Distance Business. There are
no assets in the Local Exchange Division, the Cellular and
Wireless Division or any other division of the Company other
than the Long Distance Division which are primarily used, or
held primarily for use, in or for the benefit of the Long
Distance Business, except for assets that in the aggregate
are not material to the operation of the Long Distance
Business.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF THE BUYERS
Section 7.1. Representations and Warranties of
FT. FT represents and warrants to, and covenants with, the
Company as follows:
(a) FT is an exploitant public validly existing
under the laws of the Republic of France, and has all requi-
site power and authority to: (i) enter into this Agreement
and each Other Agreement, (ii) purchase the shares of the
Company's capital stock as provided herein, and in the
Stockholders' Agreement and the Articles as amended by the
Amendment, and (iii) comply with its obligations under this
Agreement and each Other Agreement.
(b) (i) The execution, delivery and performance
of this Agreement and each Other Agreement, and the consum-
mation of the transactions contemplated hereby and thereby,
have been duly authorized by all requisite action on the
part of FT. Upon the execution and delivery of this
Agreement and each Other Agreement by FT, each such agree-
ment will constitute a legal, valid and binding agreement of
FT, enforceable against FT in accordance with its terms.
(ii) Neither the execution, delivery and perfor-
mance by FT of this Agreement and each Other Agreement, nor
the consummation by FT of the transactions contemplated
hereby or thereby will: (w) violate or conflict with any
provision of the FT Law and Decrees; (x) require any
Governmental Approvals or Third Party Approvals, except (A)
as set forth in Section 7.1(b) of the FT Disclosure Schedule
or (B) where the failure to so obtain, make or file such
Governmental Approvals or Third Party Approvals is not
reasonably likely to affect adversely in any material re-
spect FT's ability to perform its obligations hereunder or
under the Other Agreements; (y) result in a default (or an
event that, with notice or lapse of time or both, would
become a default) under any Contract to which FT or any of
its Subsidiaries is a party, or by which FT or any of its
Subsidiaries or any of their respective assets or properties
is bound, except for any such defaults that, individually or
in the aggregate, are not reasonably likely to affect ad-
versely in any material respect FT's ability to perform its
obligations hereunder or under the Other Agreements; or
(z) violate or conflict with Applicable Law applicable to FT
or any of its Subsidiaries, or any of the properties,
businesses, or assets of FT or any of its Subsidiaries,
except violations and conflicts that, individually or in the
aggregate, are not reasonably likely to affect adversely in
any material respect FT's ability to perform its obligations
hereunder or under the Other Agreements.
(c) Except as set forth in Section 7.1(c) of the
FT Disclosure Schedule, there is no Proceeding pending or,
to the best of FT's knowledge, threatened against or
relating to FT or any of its Subsidiaries at law or in
equity that, individually or in the aggregate, is reasonably
likely to affect adversely in any material respect FT's
ability to perform its obligations hereunder or under the
Other Agreements. There is no judgment, decree, injunction,
rule or order of any Governmental Authority outstanding
against FT or any of its Subsidiaries that, individually or
in the aggregate, is reasonably likely to adversely affect
in any material respect FT's ability to perform its
obligations hereunder or under the Other Agreements.
(d) All documents that FT is responsible for
filing with any Governmental Authority in connection with
the transactions contemplated hereby or by each Other Agree-
ment have complied and will comply in all material respects
with Applicable Law. All information supplied or to be
supplied by FT in any document filed with any Governmental
Authority in connection with the transactions contemplated
hereby or by the Other Agreements will be, at the time of
filing, true and correct in all material respects, except
where the failure to be true and correct, individually or in
the aggregate, would not adversely affect in any material
respect the consummation of the transactions contemplated by
this Agreement or any Other Agreement.
(e) FT is purchasing the shares of the Company's
capital stock to be purchased by it pursuant to this Agree-
ment and the Stockholders' Agreement for its own account for
investment, and not with a view to the distribution of such
shares or any part thereof. FT is a party to no Contract
with any Person for resale of such shares in connection with
such a distribution. FT acknowledges that the offering of
the shares pursuant to this Agreement and the Stockholders'
Agreement will not be registered under the Securities Act or
under any state securities or blue sky law or the securities
laws of any other country, on the grounds (with respect to
the Securities Act and such state securities or blue sky
laws) that the offering and sale of shares of capital stock
contemplated by this Agreement and the Stockholders'
Agreement are exempt from registration pursuant to
exceptions available under such laws, and that the Company's
reliance upon such exemptions is predicated upon FT's
representations set forth in this Agreement and the
Stockholders' Agreement. FT understands that the shares of
the Company's capital stock purchased by it pursuant to this
Agreement and the Stockholders' Agreement may not be sold or
transferred unless such shares are subsequently registered
under the Securities Act and/or applicable state securities
or blue sky laws or any applicable securities laws of any
other country or an exemption from such registration is
available.
(f) Except for such rights as may be conferred on
FT as contemplated by this Agreement and the Other Agree-
ments, as of the date hereof, neither FT nor any of its Af-
filiates Beneficially Owns, directly or indirectly, any
shares of capital stock of the Company.
(g) No Subsidiary of FT is entitled to any
immunity on the grounds of sovereignty or otherwise (includ-
ing, without limitation, pursuant to the Foreign Sovereign
Immunities Act, 28 U.S.C. Section 1602 et seq.), based upon its
status as an agency or instrumentality of government, from
any legal action, suit or proceeding or from set off or
counterclaim, from the jurisdiction of any competent court
described in Section 11.8, from service of process, from
attachment prior to judgment, from attachment in aid of
execution of a judgment, from execution pursuant to a judg-
ment or arbitral award, or from any other legal process in
any jurisdiction, in each case relating to this Agreement or
any Other Agreement.
(h) FT has delivered to the Company a copy of its
annual report for the year ended December 31, 1994.
Section 7.2. Representations and Warranties of
DT. DT represents and warrants to, and covenants with, the
Company as follows:
(a) DT is an Aktiengesellschaft duly formed and
validly existing under the laws of Germany, and has all re-
quisite corporate power and authority to: (i) enter into
this Agreement and each of the Other Agreements, (ii) pur-
chase the shares of the Company's capital stock as provided
herein, and in the Stockholders' Agreement and the Articles
as amended by the Amendment and (iii) comply with its
obligations under this Agreement and each Other Agreement.
(b) (i) The execution, delivery and performance
of this Agreement and each Other Agreement, and the con-
summation of the transactions contemplated hereby and there-
by, have been duly authorized by all requisite corporate
action on the part of DT. Upon the execution and delivery
of this Agreement and each Other Agreement by DT, each such
agreement will constitute a legal, valid and binding agree-
ment of DT, enforceable against DT in accordance with its
terms.
(ii) Neither the execution, delivery and per-
formance by DT of this Agreement and each of the Other
Agreements, nor the consummation by DT of the transactions
contemplated hereby or thereby, will (w) violate or conflict
with any provision of the Satzung or other governing docu-
ments of DT or any of its Subsidiaries; (x) require any
Governmental Approvals or Third Party Approvals, except
(A) as set forth in Section 7.2(b) of the DT Disclosure
Schedule or (B) where the failure to so obtain, make or file
such Governmental Approvals or Third Party Approvals,
individually or in the aggregate, is not reasonably likely
to affect adversely in any material respect DT's ability to
perform its obligations hereunder or under the Other Agree-
ments; (y) result in a default (or an event that, with
notice or lapse of time or both, would become a default)
under any Contract to which DT or any of its Subsidiaries is
a party, or by which DT or any of its Subsidiaries or any of
their respective assets or properties is bound, except for
any such defaults that, individually or in the aggregate,
are not reasonably likely to affect adversely in any materi-
al respect DT's ability to perform its obligations hereunder
or under the Other Agreements; or (z) violate or conflict
with any Applicable Law applicable to DT or any of its Sub-
sidiaries, or any of the properties, businesses, or assets
of DT or any of its Subsidiaries, except violations and
conflicts that, individually or in the aggregate, are not
reasonably likely to affect adversely in any material
respect DT's ability to perform its obligations hereunder or
under the Other Agreements.
(c) Except as set forth in Section 7.2(c) of the
DT Disclosure Schedule, there is no Proceeding pending or,
to the best of DT's knowledge, threatened against or
relating to DT or any of its Subsidiaries at law or in
equity that, individually or in the aggregate, is reasonably
likely to affect adversely in any material respect DT's
ability to perform its obligations hereunder or under the
Other Agreements. There is no judgment, decree, injunction,
rule or order of any Governmental Authority outstanding
against DT or any of its Subsidiaries that, individually or
in the aggregate, is reasonably likely to adversely affect
in any material respect DT's ability to perform its obliga-
tions hereunder or under the Other Agreements.
(d) All documents that DT is responsible for
filing with any Governmental Authority in connection with
the transactions contemplated hereby have complied and will
comply in all material respects with Applicable Law. All
information supplied or to be supplied by DT in any document
filed with any Governmental Authority in connection with the
transactions contemplated hereby or by the Other Agreements
will be, at the time of filing, true and correct in all
material respects, except where the failure to be true and
correct, individually or in the aggregate, would not
adversely affect in any material respect the consummation of
the transactions contemplated by this Agreement or any Other
Agreement.
(e) DT is purchasing the shares of the Company's
capital stock to be purchased by it pursuant to this Agree-
ment and the Stockholders' Agreement for its own account for
investment, and not with a view to the distribution of such
shares or any part thereof. DT is a party to no Contract
with any Person for resale of such shares in connection with
such a distribution. DT acknowledges that the offering of
the shares pursuant to this Agreement and the Stockholders'
Agreement will not be registered under the Securities Act or
under any state securities or blue sky law or the securities
laws of any other country, on the grounds (with respect to
the Securities Act and such state securities or blue sky
laws) that the offering and sale of shares of capital stock
contemplated by this Agreement and the Stockholders'
Agreement are exempt from registration pursuant to
exceptions available under such laws, and that the Company's
reliance upon such exemptions is predicated upon DT's
representations set forth in this Agreement and the
Stockholders' Agreement. DT understands that the shares of
the Company's capital stock purchased by it pursuant to this
Agreement and the Stockholders' Agreement may not be sold or
transferred unless such shares are subsequently registered
under the Securities Act and/or applicable state securities
or blue sky laws or any applicable securities laws of any
other country or an exemption from such registration is
available.
(f) Except for such rights as may be conferred on
DT as contemplated by this Agreement and the Other Agree-
ments, as of the date hereof neither DT nor any of its Af-
filiates Beneficially Owns, directly or indirectly, any
shares of capital stock of the Company.
(g) DT has delivered to the Company a copy of its
annual report for the year ended December 31, 1994.
ARTICLE VIII
COVENANTS OF THE COMPANY
Section 8.1. Conduct of Business by the Company.
Except to the extent that each of the Buyers otherwise con-
sents in writing, or as otherwise contemplated by this
Agreement, the Other Agreements or the Joint Venture Docu-
ments, until the First Closing:
(a) The Company shall, and shall cause each of
its Subsidiaries to, conduct its operations so that the
conduct of business of the Company and its Subsidiaries,
taken as a whole, is not materially inconsistent with the
scope and nature of such business on the date hereof and as
shall be described in the Proxy Statement; provided that
this Section 8.1(a) shall not prohibit the Company or any of
its Subsidiaries from (i) engaging in any activity relating
to a Core Business (whether or not the Company as of the
date of this Agreement is engaged in such activity or such
Core Business), (ii) effecting any Exempt Asset Divestiture
or any Exempt Long Distance Asset Divestiture (except for a
transaction described in clause (g) of the definition of
Exempt Long Distance Asset Divestiture) or (iii) effecting
the Cellular Spin-off or any transaction permitted by
Section 8.10 hereof. The Company shall consult with each of
the Buyers in good faith prior to undertaking any material
action that would reasonably be viewed as outside the
ordinary course of the Company's and its Subsidiaries'
business.
(b) The Company shall not redeem, repurchase or
otherwise acquire, or permit any Subsidiary to redeem, re-
purchase or otherwise acquire, Voting Securities of the
Company (including any securities convertible or exchange-
able into such Voting Securities) in excess of Voting Secu-
rities representing 50% of the aggregate Votes of the Voting
Securities of the Company as of the date hereof, except as
required by the terms of the securities of the Company
outstanding on the date hereof or as contemplated by any
employee benefit plans.
(c) The Company shall not amend or propose to
amend the Articles or Bylaws in any manner that would ad-
versely affect the consummation of the transactions con-
templated by, or otherwise adversely affect the rights of
the Buyers under, this Agreement, each Other Agreement, the
Articles as proposed to be amended by the Amendment and the
Bylaws as proposed to be amended by the Bylaws Amendment,
nor shall it permit any of its Subsidiaries to amend or
propose to amend the articles of incorporation or bylaws of
any such Subsidiary, in any manner that would adversely
affect the consummation of the transactions contemplated by,
or otherwise adversely affect the rights of the Buyers
under, this Agreement and each Other Agreement.
(d) The Company shall not authorize, recommend,
propose or announce an intention to adopt a plan of complete
or partial liquidation or dissolution of the Company;
provided that this Section 8.1(d) shall not prohibit the
Company or any of its Subsidiaries from effecting any Exempt
Asset Divestiture or any Exempt Long Distance Asset
Divestiture (except for a transaction described in clause
(g) of the definition of Exempt Long Distance Asset
Divestiture).
(e) Without limiting the foregoing, the Company
shall not undertake any action or transaction described in
Sections 4, 5 and 6(a) of the Class A Provisions.
Section 8.2. Access and Information. Until the
First Closing, the Company shall provide to the Buyers and
their representatives upon reasonable notice, during
mutually agreeable hours, full and complete access during
normal business hours to its properties, personnel, books,
records and Contracts and those of its Subsidiaries and
shall furnish or make available all such information and
documents relating to its properties and business and those
of its Subsidiaries as the Buyers may reasonably request,
unless and to the extent that, in connection with a Contract
between the Company or any Subsidiary of the Company and any
Governmental Authority, such Governmental Authority requires
the Company or any of its Subsidiaries to restrict access to
any properties or information reasonably related to such
Contract on the basis of Applicable Law with respect to
national security matters, and unless and to the extent that
Applicable Law otherwise requires the Company to restrict
FT's and DT's access to any properties or information,
provided that any such investigation by the Buyers shall be
conducted in such a manner as not to interfere unreasonably
with the business or operations of the Company or any of its
Subsidiaries; and the Company shall use its reasonable
efforts to cause Ernst & Young or its successor to give to
any independent public accountants engaged by the Buyers
full access to its books, records and work papers relating
to the Company and its Affiliates, subject to the execution
by FT and DT of such agreement as the Company and Ernst &
Young may reasonably request as a condition to such access.
All confidential information provided to the Buyers pursuant
to this Section will be subject to the Existing
Confidentiality Agreement. Notwithstanding the foregoing,
FT and DT may not have access to (a) information or
documents subject to existing confidentiality restrictions
with any third party without the approval of the third
party, or (b) information or documents subject to attor-
ney/client privilege.
Section 8.3. No Solicitation, Etc. (a) Until
the First Closing, neither the Company nor any of its Sub-
sidiaries or Affiliates nor any of their respective offi-
cers, directors, employees, agents or representatives (in-
cluding, without limitation, investment bankers, attorneys
and accountants) shall, directly or indirectly, (i) solicit
any proposal involving a transaction of the kind described
in Section 8 of the Class A Provisions (an "Acquisition Pro-
posal") or (ii) enter into substantive negotiations with any
third party in response to an Acquisition Proposal unless
the Board of Directors determines in good faith that it is
in the best interests of the Company's stockholders to
engage in such substantive negotiations (after considering
the benefits to the Company of the transactions contemplated
by this Agreement and the Joint Venture Agreement and the
potential impact of such negotiations on such transactions).
(b) Until the First Closing, neither the Company
nor any of its Subsidiaries or Affiliates nor any of their
respective officers, directors, employees, agents or repre-
sentatives (including, without limitation, investment bank-
ers, attorneys and accountants) shall, directly or indirect-
ly (i) solicit any proposal involving any commercial or
other arrangements or relationships in nature and scope
similar to the arrangements and relationships contemplated
by this Agreement or the Joint Venture Agreement if incon-
sistent with the purposes and scope of this Agreement and
the Joint Venture (an "Alternative Transaction"), (ii) dis-
close directly or indirectly any information not customarily
disclosed publicly concerning its business and properties
to, or afford any access to its properties, books and re-
cords to, any Person in connection with any possible Alter-
native Transaction or (iii) enter into substantive negotia-
tions with any third party relating to an Alternative Trans-
action.
(c) Until the approval by the stockholders of the
Company of the Proposals shall have been obtained as con-
templated by Section 8.4 hereof, if the Board of Directors
or any committee thereof is notified during any meeting of
the Board of Directors or such committee of substantive
negotiations with respect to any transaction or action whose
consummation would be prohibited by Section 8.1(e) hereof,
the Company shall discontinue such negotiations, unless
prior to such time the Company shall have notified each of
FT and DT of its desire that such negotiations continue (and
shall have provided each of FT and DT with a description in
reasonable detail of the transaction or action that is the
subject of such negotiations) and both FT and DT shall have
failed to notify the Company of their disapproval of such
negotiations within five Business Days after receipt by each
of FT and DT of the Company's notice.
(d) Until the First Closing, the Company shall
notify each of FT and DT promptly if any discussions or
negotiations are sought to be initiated, any inquiry or
proposal is made, or any such information is requested, with
respect to a potential Acquisition Proposal or an Alterna-
tive Transaction.
Section 8.4. Stockholders Approval. Unless the
Board of Directors determines in good faith, after receipt
of written advice from the Company's outside counsel as to
the nature and scope of the Directors' fiduciary duties,
that it would be inconsistent with the Directors' fiduciary
duties to the Company and to the Company's stockholders
under Applicable Law not to withdraw or change such recom-
mendation, the Board of Directors shall (a) as soon as
practicable after the date hereof, in accordance with Appli-
cable Law, take all steps necessary to call, give notice of,
convene and hold a special meeting of its stockholders for
the purpose of voting upon the Proposals (the "Stockholders'
Meeting"), (b) recommend to the stockholders of the Company
the adoption and approval of the Proposals and (c) use its
reasonable efforts to obtain the necessary approvals by the
Company's stockholders of the Proposals.
Section 8.5. Proxy Statement Filings. (a) As
promptly as practicable after the date hereof, the Company
shall prepare and, after consultation with each of FT and
DT, file the Proxy Statement with the SEC pursuant to the
Exchange Act, and, after consultation with each of FT and
DT, shall respond promptly to any comments made by the SEC
with respect to the Proxy Statement and any preliminary
version thereof, and at the earliest practical time shall
mail such Proxy Statement to the stockholders entitled to
vote at the Stockholders' Meeting.
(b) If at any time after the mailing of the
definitive Proxy Statement and prior to the Stockholders'
Meeting any event should occur that results in the Proxy
Statement containing an untrue statement of a material fact
or omitting to state any material fact required to be stated
therein or necessary to make the statements therein, in the
light of the circumstances under which they are made, not
misleading, or that otherwise should be described in an
amendment or supplement to the Proxy Statement, the Company
shall promptly notify the Buyers of the occurrence of such
event and then promptly prepare, file and clear with the SEC
and mail to the Company's stockholders each such amendment
or supplement.
Section 8.6. Use of Proceeds. The proceeds of
the transactions contemplated herein may be used for the
repayment of indebtedness, funding the Company's investment
in the JV Entities and other corporate purposes as deter-
mined by the Board of Directors.
Section 8.7. Advice of Changes. Until the First
Closing, the Company shall promptly advise the Buyers orally
and in writing of any change or event known to the Chief
Executive Officer or any Executive Vice President of the
Company which such Person in his reasonable good faith
judgment believes has had or is likely to have, either
individually or together with other changes or events, a
Material Adverse Effect on the Company and its Subsidiaries
taken as a whole.
Section 8.8. No Action Relating to Takeover
Statutes; Applicability of Future Statutes and Regulations.
The Company shall (a) take no action, by resolution of its
Board of Directors or otherwise, to cause the Business
Combination Statute or the provisions of the Kansas Control
Share Acquisitions Statute to apply to FT, DT or their
respective Affiliates by virtue of the transactions con-
templated by this Agreement, any Other Agreement or the
Amendment; and (b) use reasonable efforts to avoid (to the
extent possible) the application of any "fair price,"
"moratorium," "control share acquisition," "business combi-
nation," "shareholder protection" or similar anti-takeover
statute or regulation promulgated under Kansas law after the
date hereof to FT, DT or their respective Affiliates by
virtue of the transactions contemplated by this Agreement,
any Other Agreement or the Amendment.
Section 8.9. Spin-offs. (a) Prior to the
Investment Completion Date, the Company shall not undertake
any Spin-off, split-off or other distribution to any of its
stockholders of equity interests of a Subsidiary of the
Company other than the Cellular Spin-off prior to delivery
of a Notice of Abandonment, provided that if the Company
proposes to undertake a transaction described in the
preceding sentence prior to the Investment Completion Date,
the Parties shall negotiate in good faith a Spin-off
Investment Agreement and any necessary or advisable
modifications to this Agreement, the Stockholders' Agreement
and the Amendment (or the Articles as amended by the
Amendment; as the case may be) in connection with such
transaction, and the Company shall be permitted, subject to
the rights of the Class A Holders set forth in Section 7.10
of the Stockholders' Agreement, to undertake such
transaction, only if the Parties are able to reach agreement
regarding such modifications.
(b) Between the Investment Completion Date and
the earlier of the date of the Optional Shares Closing and
60 days after the Investment Completion Date, the Company
shall not effect any Spin-off, split-off or other
distribution to any of its stockholders of any equity inter-
ests of any Subsidiary of the Company.
(c) Nothing in this Agreement, any Other
Agreement or the Amendment shall prohibit the Company from
effecting the Cellular Spin-off prior to delivery of the
Notice of Abandonment.
Section 8.10. Conduct of Business of Cellular.
(a) Except (v) for the Cellular Spin-off, (w) for any
financings or refinancings in contemplation of the Cellular
Spin-off, (x) as set forth in the Schedule of Permitted
Cellular Actions attached as Schedule C hereto, (y) as
otherwise may be necessary to comply with an order, rule or
other requirement of the FCC, or (z) as otherwise may be
consented to in writing by the Buyers, until the earlier of
(A) the occurrence of the Cellular Spin-off Date, and (B)
the delivery of a Notice of Abandonment:
(i) The Company shall cause the business of
Cellular to be conducted only in the ordinary course of
business consistent with past practices (except for any
internal reorganization of Cellular that the Company
believes in good faith is appropriate in connection with the
Cellular Spin-off), provided that nothing in this Agreement,
the Other Agreements or the Amendment shall prohibit the
Company from effecting any Acquisitions or Dispositions with
respect to Cellular so long as the number of POPs of
Cellular at the Cellular Spin-off Date do not vary by more
than 10% from the number of POPs of Cellular at June 22,
1995.
(ii) Neither the Company nor any of its
Affiliates (other than Cellular and the Subsidiaries and
Affiliates Controlled by Cellular) shall engage in any
transaction (including, without limitation, the purchase,
sale, transfer or exchange of assets or the rendering of any
service) with Cellular that is to be performed, in whole or
in part, after the Cellular Spin-off Date, except upon terms
that following the Cellular Spin-off Date are no less
favorable to the Company or such an Affiliate of the Company
than those that might, in the good faith judgment of the
Company, be obtained in an arms' length transaction at the
time from Persons which are not the Company or such an
Affiliate of the Company, other than transactions that
individually and in the aggregate are immaterial to the
value of Cellular, provided that the transactions between
the Company and Cellular that are to be performed, in whole
or in part, after the Cellular Spin-off Date (other than any
transactions that individually and in the aggregate are
immaterial to the value of Cellular) shall be approved by
the Board of Directors.
(iii) The Company shall not enter into any
Cellular Guarantee in respect of any Cellular Liabilities
other than guarantees of purchase money indebtedness or
other non-financial indebtedness that, individually and in
the aggregate, do not exceed $5 million. Cellular shall
assume or retain all Cellular Liabilities incurred by the
Company or its Subsidiaries in connection with the conduct
of the business of Cellular prior to the Cellular Spin-off
Date, other than (i) liabilities that are in the aggregate
immaterial to the Company and to Cellular, and (ii)
indebtedness for borrowed money, it being understood that
the Company may establish the amount of indebtedness for
borrowed money, if any, to be borne by Cellular in
connection with the Cellular Spin-off.
(iv) In connection with the Cellular Spin-off,
the Company and Cellular shall enter into a Tax Sharing and
Indemnification Agreement which will include, among other
things, the following provisions: (i) in the event that the
Cellular Spin-off fails to constitute a tax-free distribu-
tion under section 355 of the Code, Taxes resulting from
such failure (including the liability of the Company or
Cellular arising from Taxes imposed on shareholders of the
Company to the extent any shareholders successfully seek
recourse against the Company or Cellular on account of such
failure) will be allocated between the Company and Cellular
in such a manner as will take into account the extent to
which each contributed to such failure, and the Company and
Cellular will indemnify and hold harmless the other from and
against the Taxes so allocated to the indemnifying party;
(ii)(x) the Company will agree to be responsible for, and to
indemnify and hold Cellular and the Cellular Affiliates
harmless from and against, Taxes in an amount up to $25
million arising from the recognition of gain upon a dis-
tribution of Cellular Common Stock to non-U.S. persons
pursuant to section 367(e) of the Code in connection with
the Cellular Spin-off and from the transfer of assets and
liabilities by the Company and the Sprint Affiliates to
Cellular and the Cellular Affiliates in connection with the
Cellular Spin-off, and (y) Cellular will agree to be
responsible for, and to indemnify and hold the Company and
the Sprint Affiliates harmless from and against, Taxes in
excess of $25 million arising from such recognition of gain
and such transfer of assets and liabilities as described in
subclause (x) of this clause (ii); (iii) with respect to
Taxes other than those to which clauses (i) and (ii) above
apply, Cellular will agree to be responsible for, and to
indemnify and hold the Company and the Sprint Affiliates
harmless from and against, any liability for Taxes of or
relating to Cellular or the Cellular Affiliates or their
assets or the operation of their businesses for periods up
to and including the Cellular Spin-off Date (including Taxes
attributable to any deferred intercompany transactions or
excess loss accounts that are recognized as a result of the
Cellular Spin-off or any transfer of any asset or liability
in connection therewith); and, (iv) with respect to Taxes
other than those to which clauses (i), (ii) and (iii) above
apply, the Company will agree to be responsible for, and to
indemnify and hold Cellular and the Cellular Affiliates
harmless from and against, any liability for Taxes of or
relating to the Company or the Sprint Affiliates or their
assets or the operation of their businesses (A) for periods
up to and including the Cellular Spin-off Date, and (B) for
periods after the Cellular Spin-off Date and imposed on
Cellular or the Cellular Affiliates under section 1.1502-6
of the Treasury regulations or any comparable provision of
any applicable state, local or foreign tax law. For
purposes of this Section 8.10(a)(iv), the term "Cellular
Affiliates" shall mean all direct and indirect parents and
Subsidiaries, if any, of Cellular immediately after the
Cellular Spin-off, and the term "Sprint Affiliates" shall
mean all direct and indirect parents and Subsidiaries, if
any, of the Company immediately after the Cellular Spin-off.
(b) The Company shall not have any liability for
any breach of any of the covenants or agreements set forth
in this Section 8.10 if the Company shall have delivered a
Notice of Abandonment.
ARTICLE IX
OTHER AGREEMENTS
Section 9.1. Information for Inclusion in the
Proxy Statement. Each of FT and DT shall provide such
information regarding itself and its Affiliates (including,
without limitation, such information necessary to describe
in sufficient detail the Control Share Acquisitions Plan) as
may reasonably be requested by the Company for inclusion in
the Proxy Statement, and each of FT and DT will deliver as
promptly as practicable after the date hereof to the Company
an Acquiring Person Statement in compliance with
Section 17-1291 of the Kansas Control Share Acquisitions
Statute. The information provided by FT and DT for
inclusion in the Proxy Statement and the information con-
tained in the Acquiring Person Statement will not contain
any material misstatement of fact or omit to state any
material fact necessary to make the statements, in the light
of the circumstances under which they are made, not mis-
leading. All statements included in the Proxy Statement
relating to FT or DT shall be subject to the approval of FT
and DT, such approval not to be unreasonably withheld. If,
at any time after the mailing of the definitive Proxy
Statement and prior to the Stockholders' Meeting, any event
should occur that results in the information supplied by FT,
DT or their respective Affiliates for inclusion in the Proxy
Statement or the information contained in the Acquiring
Person Statement containing an untrue statement of a mater-
ial fact or omitting to state any material fact required to
be stated therein or necessary to make the statements there-
in, in the light of the circumstances under which they are
made, not misleading, FT and DT shall promptly notify the
Company of the occurrence of such event.
Section 9.2. Further Assurances. (a) Each Party
shall (i) execute and deliver such additional instruments
and other documents, and (ii) use its reasonable efforts to
take, or cause to be taken, all actions and to do, or cause
to be done, all things necessary under Applicable Law to
consummate the transactions contemplated hereby and by the
Other Agreements and to satisfy the applicable conditions to
closing hereunder.
(b) Each of the Parties agrees to make all fil-
ings with Governmental Authorities required in connection
with the transactions contemplated by this Agreement and the
Other Agreements, including all filings necessary to obtain
the Governmental Approvals described in Sections 3.1(a),
(b), (c), (d), (e) and (k) of this Agreement as promptly as
practicable after the date of this Agreement and to use its
reasonable efforts to furnish or cause to be furnished, as
promptly as practicable, all information and documents
reasonably required to obtain such approvals and shall
otherwise cooperate in all reasonable respects with the
applicable Governmental Authorities to obtain any required
Governmental Approvals in as expeditious a manner as possi-
ble.
(c) Each of the Parties shall use its reasonable
efforts to resolve such objections, if any, as any Govern-
mental Authority may assert with respect to this Agreement
and the Other Agreements and the transactions contemplated
hereby and thereby under Applicable Laws, including request-
ing reconsideration (which may be initiated by the Party
affected thereby or requested by any other Party) of any
adverse ruling of any Governmental Authority and taking
administrative appeals, if available and reasonably likely
to result in a reversal of such adverse ruling. If any
Proceeding is instituted by any Person challenging this
Agreement, the Other Agreements or the transactions contem-
plated hereby or thereby, the Parties shall promptly consult
with each other to determine the most appropriate response
to such Proceeding and shall cooperate in all reasonable
respects with any Party subject to any such Proceeding,
provided that the decision whether to initiate, and the
control of, any Proceeding involving any Party shall remain
within the sole discretion of such Party.
(d) FT shall comply, to the extent permitted by
Applicable Law of France, with final and nonappealable
discovery orders rendered by a court of competent jurisdic-
tion as provided in Section 11.8 hereof or in any corre-
sponding section of any Other Agreement, and shall take such
reasonable action as appropriate in order to permit FT to so
comply with such orders.
(e) DT shall comply, to the extent permitted by
Applicable Law of Germany, with final and nonappealable
discovery orders rendered by a court of competent juris-
diction as provided in Section 11.8 hereof or in any corre-
sponding section of any Other Agreement, and shall take such
reasonable action as appropriate in order to permit DT to so
comply with such orders.
Section 9.3. Public Announcements. In addition
to any obligations under the Standstill Agreement, the
Parties shall use reasonable efforts to consult in good
faith with each other with a view to agreeing upon any press
release or public announcement relating to the transactions
contemplated hereby or by the Other Agreements prior to the
consummation thereof.
Section 9.4. Notification. Each Party shall
notify each other Party of the occurrence or nonoccurrence
of any event known to a senior officer of such Party which
in such Person's reasonable good faith judgment has caused
or is likely to cause:
(a) any covenant or agreement of such Party
contained herein not to be performed or complied with in any
material respect, or any condition set forth in Article III
to become incapable of being fulfilled, in each case until
the First Closing (except as provided in clauses (b), (c)
and (d) below);
(b) any covenant or agreement of such Party set
forth in Section 2.2, 2.3 or 2.4 of this Agreement not to be
performed or complied with in any material respect, or any
condition set forth in Article IV to become incapable of
being fulfilled, in each case until the relevant Article IV
Closing;
(c) any covenant or agreement of such Party set
forth in Section 2.5 of this Agreement not to be performed
or complied with in any material respect, or any condition
set forth in Article V to become incapable of being ful-
filled, in each case until the Optional Shares Closing; or
(d) any covenant or agreement of such Party set
forth in Sections 8.8, 9.2, 9.3, 11.2 or 11.12 of this
Agreement not to be performed or complied with in any mate-
rial respect, in each case for so long as shares of Class A
Stock are outstanding;
provided that the delivery of any notice pursuant to this
Section 9.4 will not cure such breach or noncompliance or
limit or otherwise affect the remedies available hereunder
to any Party, and provided, further, that, with respect to
any representation or warranty, no Party shall have any
liability for a breach of this Section 9.4, if the claim
with respect to such breach is made at a time when the
representation or warranty to which it relates does not
continue to survive as provided in Section 11.1 hereof.
Section 9.5. Brokers or Finders. (a) Other than
Dillon, Read & Co. Inc., no Person is or will be entitled to
any broker's or finder's fee or any other commission or
similar fee as a result of any action by the Company or any
of its Affiliates in connection with the transactions con-
templated by this Agreement and the Other Agreements. The
Company agrees to indemnify and hold harmless each of FT and
DT from and against any and all claims, liabilities and
obligations (including attorneys' fees (but not including
the portion of any such fees determined pursuant to the
German Fee Regulations) and disbursements of counsel) with
respect to any such fees asserted by any Person as a result
of any action by the Company or any of its Affiliates in
connection with the transactions contemplated by this
Agreement and the Other Agreements.
(b) Other than Goldman, Sachs & Co., no Person is
or will be entitled to any broker's or finder's fee or any
other commission or similar fee as a result of any action by
FT or any of its Affiliates in connection with the trans-
actions contemplated by this Agreement and the Other Agree-
ments. FT agrees to indemnify and hold the Company harmless
from and against any and all claims, liabilities and
obligations (including attorneys' fees and disbursements of
counsel) with respect to any such fees asserted by any
Person as a result of any actions by FT or its Affiliates in
connection with the transactions contemplated by this
Agreement and the Other Agreements.
(c) Other than Goldman, Sachs & Co., no Person is
or will be entitled to any broker's or finder's fee or any
other commission or similar fee as a result of any action by
DT or any of its Affiliates in connection with the trans-
actions contemplated by this Agreement and the Other Agree-
ments. DT agrees to indemnify and hold the Company harmless
from and against any and all claims, liabilities and
obligations (including attorneys' fees and disbursements of
counsel) with respect to any such fees asserted by any
Person as a result of any actions by DT or its Affiliates in
connection with the transactions contemplated by this
Agreement and the Other Agreements.
Section 9.6. Notice of Proposals Regarding Acqui-
sition Transactions. Until the First Closing, each of FT
and DT shall promptly notify the Company if any inquiries or
proposals are received by, any information is requested
from, or any negotiations or discussions are sought to be
initiated or continued with, FT or DT or any of their
respective Affiliates regarding any Acquisition Proposal
involving the Company or any purchase of any of the shares
of capital stock of the Company Beneficially Owned by FT, DT
or any of their respective Affiliates (whether by way of a
tender offer or exchange offer or otherwise).
Section 9.7. Execution of Standstill Agreement.
Concurrently with the execution of this Agreement, each
Party shall execute the Standstill Agreement.
Section 9.8. Confidentiality Agreements. As soon
as reasonably practicable after the date hereof but prior to
the Initial Issuance Date, the Parties shall negotiate in
good faith to reach mutual agreement regarding the
definitive terms and conditions of the FT Investor Confi-
dentiality Agreement and the DT Investor Confidentiality
Agreement.
Section 9.9. Actions by FT and DT in Connection
with the Cellular Spin-off. Upon the request of the
Company, by notice given not fewer than ten Business Days
prior to the planned date of the Cellular Spin-off, each of
FT and DT shall represent and warrant to the Company that,
to the best of their knowledge, on or prior to the Cellular
Spin-off Date they do not have a plan to purchase Common
Stock from any officer or director of the Company or from
any shareholder of the Company owning more than one percent
of the outstanding capital stock of the Company. The above
representation and warranty shall survive until the
applicable statute of limitations pursuant to the Code
(including any extension thereof) for the taxable year of
the Company including the Cellular Spin-off expires.
Section 9.10. Adjustment Certificates. From time
to time, at the request of FT or DT, the Company shall,
within 20 Business Days of the date of the request therefor,
deliver to each Class A Holder a certificate signed by a
duly authorized officer of the Company setting forth any
adjustment pursuant to the Class A Provisions or the
Stockholders' Agreement, as the case may be, to the Adjusted
Cellular Price, the Net Cellular Acquisition Amount, the Net
Cellular Indebtedness, the Average Sprint Price, the Average
Cellular Price, the Lower Threshold Sprint Price, the New
Lower Threshold Sprint Price, the Upper Threshold Sprint
Price, the New Upper Threshold Sprint Price, the Second
Anniversary Threshold Sprint Price (as such term is defined
in the Class A Provisions), the Target Price, the New Target
Price, the Minimum Price, the New Minimum Price, the Maxi-
mum Price, the New Maximum Price, the Cellular Spin-off
Reduction Factor, the Dividend Factor (as such term is
defined in the Class A Provisions), the conversion ratio
expressed in Section 3(c)(ii) of that portion of ARTICLE
SIXTH entitled GENERAL PROVISIONS RELATING TO
COMMON STOCK AND CLASS A STOCK, the Modified
Lower Threshold (as such term is defined in the Class A
Provisions), and the Modified New Lower Threshold
(as such term is defined in the Articles), as the case
may be, and showing in reasonable detail the facts
upon which such adjustment or adjustments are based.
ARTICLE X
TERM AND TERMINATION
Section 10.1. Termination. (a) This Agreement
may be terminated and the transactions contemplated hereby
may be abandoned at any time prior to the Initial Issuance
Date (whether before or after the Stockholders' Meeting):
(i) by FT, DT or the Company, if the First
Closing has not been consummated on or before Decem-
ber 31, 1995 other than as a result of the failure of
the Party seeking to terminate this Agreement to per-
form its obligations under this Agreement or the Other
Agreements;
(ii) by FT or DT:
(1) upon the occurrence of a Change of Con-
trol,
(2) if the Company or any of its Subsidi-
aries or Affiliates, or any of their respective
officers, directors, employees, agents or repre-
sentatives (including, without limitation, invest-
ment bankers, attorneys and accountants), under-
takes any action prohibited by clause (b) of Sec-
tion 8.3, unless prior to such time the Company
shall have notified each of FT and DT of its
desire that such Person or Persons undertake such
action (and shall have provided each of FT and DT
with a description in reasonable detail of the
action proposed, the Person or Persons involved,
and the transaction or proposal to which it re-
lates) and both FT and DT shall have failed to
notify the Company of their disapproval of such
action within five Business Days after receipt by
both FT and DT of the Company's notice,
(3) until the approval of the Proposals by
the stockholders of the Company shall have been
obtained as contemplated by Section 8.4 hereof, if
the Board of Directors or any committee thereof is
notified during any meeting of the Board of Direc-
tors or any committee thereof of substantive nego-
tiations with respect to any transaction or action
whose consummation would be prohibited by Sec-
tion 8.1(e) hereof, and the Board of Directors or
such committee has not instructed that the Company
discontinue such negotiations, unless prior to
such time the Company shall have notified each of
FT and DT of its desire that such negotiations
continue (and shall have provided each of FT and
DT with a description in reasonable detail of the
transaction or action that is the subject of such
negotiations) and both FT and DT shall have failed
to notify the Company of their disapproval of such
negotiations within five Business Days after
receipt by both FT and DT of the Company's notice,
(4) if the Board of Directors or any commit-
tee thereof is notified during any meeting of the
Board of Directors or such committee of negotia-
tions involving the Company and any Person
relating to an Acquisition Proposal and the Board
of Directors or such committee has not instructed
that the Company discontinue such negotiations,
unless prior to such time the Company shall have
notified each of FT and DT of its desire that such
negotiations continue (and shall have provided
each of FT and DT with a description in reasonable
detail of the scope and substance of the negotia-
tions and the Acquisition Proposal to which they
relate) and both FT and DT shall have failed to
notify the Company of their disapproval of such
negotiations within five Business Days after re-
ceipt by both FT and DT of the Company's notice,
(5) if the Board of Directors shall have
withdrawn or qualified or resolved to withdraw or
qualify in any manner that is adverse to FT or DT,
its recommendation or approval of the Proposals,
provided, that for purposes of this clause (5) and
clause (3) of Section 10.1(a)(iii), if the Board
of Directors continues its recommendation and
approval of the Proposals, but reflects in its
recommendation additional information, inclusion
of such additional information, in and of itself,
shall not be deemed to be a qualification that is
adverse to FT or DT,
(6) if it has become impossible for any
condition precedent to its obligations under this
Agreement or the Other Agreements to be satisfied,
provided that such condition precedent has become
impossible to satisfy other than as a result of
the failure of FT or DT to perform its obligations
under this Agreement or the Other Agreements,
(7) if there is a material breach by the
Company of its representations and warranties
contained in this Agreement and the Other Agree-
ments, which breach is not cured within 30 days
after written notice by FT or DT of such breach,
or
(8) if the stockholders of the Company fail
to approve the Proposals by the requisite vote at
the Stockholders' Meeting;
(iii) by the Company:
(1) if it has become impossible for any
condition precedent to its obligations under this
Agreement or the Other Agreements to be satisfied,
provided that such condition precedent has become
impossible to satisfy other than as a result of
the failure of the Company to perform its obliga-
tions under this Agreement or the Other Agree-
ments,
(2) if there is a material breach by FT or
DT of its representations and warranties contained
in this Agreement and the Other Agreements, which
breach is not cured within 30 days after written
notice by the Company of such breach,
(3) if, in accordance with Section 8.4
hereof, the Board of Directors of the Company
fails to recommend or withdraws or qualifies its
recommendation to the stockholders of the Pro-
posals, or
(4) if the stockholders of the Company fail
to approve the Proposals by the requisite vote at
the Stockholders' Meeting;
(iv) by the Company, FT or DT, if the Joint
Venture Agreement shall have been terminated in accor-
dance with the terms thereof; or
(v) by consent in writing of all of the Parties.
(b) If this Agreement is terminated pursuant to
Section 10.1(a), written notice thereof shall forthwith be
given by the terminating Party to the other Parties hereto,
and this Agreement shall terminate without further action by
any of the Parties hereto. Any termination of this Agree-
ment as provided herein shall be without prejudice to the
rights of any Party hereto arising out of breach by any
other Party of any representation, warranty, covenant or
agreement contained in this Agreement. Notwithstanding any
such termination, the provisions of Sections 10.1(b), 10.2,
11.8, 11.10 and 11.12 of this Agreement, the Existing Con-
fidentiality Agreement and the Standstill Agreement shall
survive such termination in accordance with their terms.
Section 10.2. Reimbursement of Expenses. If this
Agreement is terminated (a) pursuant to clauses (1), (2) or
(4) of Section 10.1(a)(ii) or (b) pursuant to clause (5) of
Section 10.1(a)(ii) if the Board of Directors shall have
withdrawn or qualified or resolved to withdraw or qualify
its recommendation or approval of the Proposals after re-
ceiving an Acquisition Proposal, in addition to any other
remedies the Buyers may have hereunder, at law, in equity or
otherwise, the Company shall promptly reimburse each of FT
and DT for their actual reasonable out-of-pocket expenses
(including attorneys' fees, but notwithstanding the fore-
going, not including the portion of any fees determined
pursuant to the Bundesgebuhrenordnung fur Rechtsanwalte vom
26. Juli 1957 (BGBl) I S. 907 (as it or any successor provi-
sion is from time to time in effect) (the "German Fee Regu-
lations")) incurred by it relating to the transactions con-
templated by this Agreement, the Other Agreements and the
Joint Venture Documents up to a maximum aggregate amount of
$15 million for each of FT and DT, as set forth on a
certificate or certificates executed by an officer of each
of FT and DT describing such expenses in reasonable detail.
ARTICLE XI
MISCELLANEOUS
Section 11.1. Survival of Representations and
Warranties. (a) The representations and warranties made by
(i) the Company in Sections 6.1 through 6.4, the first two
sentences of Section 6.5(a) and Section 6.6 (but, in the
case of Section 6.6, only to the extent that a change
described in such Section relates to a Material Adverse
Effect on the Company and its Subsidiaries taken as a whole
that existed on the Initial Issuance Date, but arose after
the later of (x) the date of the end of the quarter covered
by the last Quarterly Report on Form 10-Q of the Company
filed prior to the Initial Issuance Date and (y) the date of
the end of the year covered by the last Annual Report on
Form 10-K of the Company filed prior to the Initial Issuance
Date) of this Agreement, and (ii) the Buyers in Sections 7.1
and 7.2 of this Agreement (the "Surviving Representations")
will survive until the earlier to occur of (x) 15 months
after the date of the First Closing and (y) 90 days after
the publication of the results of the first full audit of
the consolidated financial statements of the Company and its
Subsidiaries by the Company's independent auditors following
the First Closing, such financial statements to include a
balance sheet and statements of income and cash flows as of
a date following the Initial Issuance Date and to be pre-
pared in accordance with GAAP applied on a consistent basis
with the financial statements included in the SEC Documents.
The Company shall have the right to cause its independent
auditors to conduct such an audit at any time after the
Initial Issuance Date. No action may be brought with re-
spect to a breach of any Surviving Representation after such
time unless, prior to such time, the Party seeking to bring
such an action has notified the other Parties of such claim,
specifying in reasonable detail the nature of the loss
suffered. The representations and warranties provided in
Sections 6.9 (as of the date hereof and as of the Initial
Issuance Date) and 7.1(g) shall survive without limitation
as to time, and the representation and warranty provided in
Section 9.9 hereof shall survive for the time period
provided therein. None of the other representations and
warranties made by any Party in this Agreement or any Other
Agreement or in any certificate or document delivered pursu-
ant hereto or thereto prior to or on the Initial Issuance
Date shall survive the First Closing. None of the repre-
sentations and warranties made by any Party in this Agree-
ment or any Other Agreement or in any certificate or docu-
ment delivered pursuant hereto or thereto at the Optional
Shares Closing or Article IV Closing shall survive such
Optional Shares Closing or Article IV Closing, as the case
may be, provided that if any certificate or document
delivered pursuant hereto, or any portion thereof, pertains
to a Surviving Representation, such certificate or document,
or such portion thereof, shall survive until the Surviving
Representation to which it pertains shall no longer survive
as provided herein.
(b) The Buyers shall be entitled to recovery with
respect to breaches of the Surviving Representations and to
the representation and warranty provided in Section 6.9 made
by the Company pursuant to this Agreement (and in any
certificate pertaining to any such representation) only if
the aggregate amount of loss, liability or damage (including
reasonable attorneys' fees (but not including the portion of
any fees determined pursuant to the German Fee Regulations)
and other costs and expenses) (collectively, "Damages")
incurred or sustained by the Buyers arising from or relating
to such breaches, in the aggregate, exceeds $100,000,000.
The Company shall be entitled to recovery with respect to
breach of the Surviving Representations and the
representation and warranty provided in Section 9.9 made by
the Buyers pursuant to this Agreement (and in any
certificate pertaining to any such representation) only if
the aggregate amount of Damages sustained by the Company
arising from or relating to such breaches exceeds
$100,000,000. The Company shall not incur any liability
under the representation and warranty provided in Section
6.9 or under any certificate pertaining to such
representation (even if the Company turns out in fact to be
a U.S. real property holding corporation), provided that
such representation and warranty is made to the best of the
Company's knowledge and belief.
Section 11.2. Assignment. No Party will assign
this Agreement or any rights, interests or obligations here-
under, or delegate performance of any of its obligations
hereunder, without the prior written consent of each other
Party, provided that each of the Buyers may assign this
Agreement, or part or all of its rights, interests or obli-
gations hereunder, or delegate performance hereunder, to one
or more Qualified Subsidiaries, in which case (i) such Buyer
and such Qualified Subsidiary or Subsidiaries shall be
jointly and severally liable for all of such Buyer's obliga-
tions hereunder, (ii) such Buyer shall act as agent for such
Qualified Subsidiary in connection with the receipt or
giving of any and all notices or approvals under this
Agreement or the Other Agreements and the Articles as
amended by the Amendment, and (iii) such Buyer shall not
cause or permit any such Subsidiary to lose its status as a
Qualified Subsidiary at any time when such Subsidiary owns
Shares, and provided, further, that an assignment of the
right to purchase Shares under this Agreement shall be
permitted to be made to a Qualified Subsidiary or Qualified
Subsidiaries only if each such Subsidiary is identified in
the Acquiring Person Statement contemplated by Section 6.8
hereof and all information required by the Kansas Control
Share Acquisitions Statute with respect to each such
Subsidiary is included in such Acquiring Person Statement.
Any assignment of this Agreement or any rights, interests or
obligations hereunder to a Qualified Subsidiary made
pursuant to this Section 11.2 shall be effective only if
(a) the Buyers disclose to the Company the identity of the
shareholders of such Qualified Subsidiary and (b) such
Qualified Subsidiary agrees to be bound by the terms and
conditions of (i) this Agreement and a Qualified Subsidiary
Standstill Agreement, and (ii) if such assignment is made
after the Initial Issuance Date, the Stockholders' Agree-
ment, a Qualified Subsidiary Confidentiality Agreement and
the Registration Rights Agreement upon the purchase by such
Qualified Subsidiary of Class A Stock hereunder, in each
case pursuant to an instrument of assumption substantially
in the form of Exhibit K hereto, and such Qualified
Subsidiary shall become a party to each such agreement
assumed thereby.
Section 11.3. Entire Agreement. This Agreement,
including the Disclosure Schedules, the Exhibits attached
hereto, and the Other Agreements embody the entire agreement
and understanding of the Parties in respect of the subject
matter contained herein, provided that this provision shall
not abrogate (a) any other written agreement between the
Parties executed simultaneously with this Agreement, (b) the
letter agreement referred to in Section 11.4 hereof, or (c)
the understanding set forth in Item 1 of Schedule 2 to that
certain memorandum dated June 22, 1995 among the Company, FT
and DT. This Agreement supersedes all prior agreements and
understandings between the Parties with respect to such
subject matter, except as so provided in the preceding
sentence.
Section 11.4. Expenses. Except as expressly
otherwise provided in Section 10.2 of this Agreement and
that certain letter agreement dated as of June 22, 1995
among the Company, FT and DT regarding expenses incurred in
the translation of this Agreement and certain related docu-
ments to comply with the French Translation Law, each Party
and each of its Affiliates will bear its own expenses
(including the fees and expenses of any attorneys, accoun-
tants, investment bankers, brokers, or other Persons engaged
by it) incurred in connection with the preparation, negotia-
tion, authorization, execution and delivery hereof and each
Other Agreement to which it or any of its Affiliates is a
party, and the transactions contemplated hereby and thereby.
Section 11.5. Waiver, Amendment, Etc. This
Agreement may not be amended or supplemented, and, except to
the extent permitted by Section 3.1(k) and with respect to
any Burdensome Condition affecting a particular Party, no
waivers of or consents to departures from the provisions
hereof shall be effective, unless set forth in a writing
signed by, and delivered to, all the Parties. No failure or
delay of any Party in exercising any power or right under
this Agreement will operate as a waiver thereof, nor will
any single or partial exercise of any right or power, or any
abandonment or discontinuance of steps to enforce such right
or power, preclude any other or further exercise thereof or
the exercise of any other right or power.
Section 11.6. Binding Agreement; No Third Party
Beneficiaries. This Agreement will be binding upon and
inure to the benefit of the Parties and their successors
(including, without limitation, any successor of FT in a
privatization) and permitted assigns. Nothing expressed or
implied herein is intended or will be construed to confer
upon or to give to any third party any rights or remedies by
virtue hereof. In the event of a reorganization of FT
pursuant to, as a result of or in connection with, a
privatization, the corporation or other entity formed to
continue the business activities of FT shall assume the
rights and obligations of FT under this Agreement and the
Other Agreements.
Section 11.7. Notices. All notices and other
communications required or permitted by this Agreement shall
be made in writing in the English language and any such
notice or communication shall be deemed delivered when
delivered in person, transmitted by telex or telecopier, or
seven days after it has been sent by air mail, as follows:
FT: 6 place d'Alleray
75505 Paris Cedex 15
France
Attn: Executive Vice President,
International
Tel: (33-1) 44-44-19-94
Fax: (33-1) 46-54-53-69
with a copy to:
Debevoise & Plimpton
875 Third Avenue
New York, New York 10022
U.S.A.
Attn: Louis Begley, Esq.
Tel: (212) 909-6273
Fax: (212) 909-6836
DT: Friedrich-Ebert-Allee 140
D-53113 Bonn
Germany
Tel: 49-228-181-9000
Fax: 49-228-181-8970
Attn: Chief Executive Officer
with a copy to:
Mayer, Brown & Platt
2000 Pennsylvania Avenue, N.W.
Suite 6500
Washington, D.C. 20006
U.S.A.
Attn: Werner Hein, Esq.
Tel: (202) 778-8726
Fax: (202) 861-0473
Sprint: 2330 Shawnee Mission
Parkway, East Wing
Westwood, Kansas 66205
U.S.A.
Attn: General Counsel
Tel: (913) 624-8440
Fax: (913) 624-8426
with a copy to:
King & Spalding
191 Peachtree Street
Atlanta, Georgia 30303
U.S.A.
Attn: Bruce N. Hawthorne, Esq.
Tel: (404) 572-4903
Fax: (404) 572-5146
The Parties shall promptly notify each other in the manner
provided in this Section 11.7 of any change in their respec-
tive addresses. A notice of change of address shall not be
deemed to have been given until received by the addressee.
Communications by telex or telecopier also shall be sent
concurrently by mail, but shall in any event be effective as
stated above.
SECTION 11.8. GOVERNING LAW; DISPUTE RESOLUTION;
EQUITABLE RELIEF. (a) THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK (REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN
UNDER APPLICABLE PRINCIPLES OF CONFLICTS OF LAW).
(b) EACH PARTY IRREVOCABLY CONSENTS AND AGREES
THAT ANY LEGAL ACTION, SUIT OR PROCEEDING AGAINST IT WITH
RESPECT TO ITS OBLIGATIONS OR LIABILITIES UNDER OR ARISING
OUT OF OR IN CONNECTION WITH THIS AGREEMENT SHALL BE BROUGHT
BY SUCH PARTY ONLY IN THE UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF NEW YORK OR, IN THE EVENT (BUT ONLY
IN THE EVENT) SUCH COURT DOES NOT HAVE SUBJECT MATTER JURIS-
DICTION OVER SUCH ACTION, SUIT OR PROCEEDING, IN THE COURTS
OF THE STATE OF NEW YORK SITTING IN THE CITY OF NEW YORK,
AND EACH PARTY HEREBY IRREVOCABLY ACCEPTS AND SUBMITS TO THE
JURISDICTION OF EACH OF THE AFORESAID COURTS IN PERSONAM,
WITH RESPECT TO ANY SUCH ACTION, SUIT OR PROCEEDING (INCLUD-
ING, WITHOUT LIMITATION, CLAIMS FOR INTERIM RELIEF, COUNTER-
CLAIMS, ACTIONS WITH MULTIPLE DEFENDANTS AND ACTIONS IN
WHICH SUCH PARTY IS IMPLED). EACH PARTY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT THAT IT MAY HAVE TO A JURY
TRIAL IN ANY LEGAL ACTION, SUIT OR PROCEEDING WITH RESPECT
TO, OR ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT.
(c) EACH OF FT AND DT HEREBY IRREVOCABLY DESIG-
NATES CT CORPORATION SYSTEM (IN SUCH CAPACITY, THE "PROCESS
AGENT"), WITH AN OFFICE AT 1633 BROADWAY, NEW YORK, NEW
YORK, 10019 AS ITS DESIGNEE, APPOINTEE AND AGENT TO RECEIVE,
FOR AND ON ITS BEHALF SERVICE OF PROCESS IN SUCH
JURISDICTION IN ANY LEGAL ACTION OR PROCEEDINGS WITH RESPECT
TO THIS AGREEMENT AND THE OTHER AGREEMENTS, AND SUCH SERVICE
SHALL BE DEEMED COMPLETE UPON DELIVERY THEREOF TO THE PRO-
CESS AGENT, PROVIDED THAT IN THE CASE OF ANY SUCH SERVICE
UPON THE PROCESS AGENT, THE PARTY EFFECTING SUCH SERVICE
SHALL ALSO DELIVER A COPY THEREOF TO FT AND DT IN THE MANNER
PROVIDED IN SECTION 11.7. FT AND DT SHALL TAKE ALL SUCH
ACTION AS MAY BE NECESSARY TO CONTINUE SAID APPOINTMENT IN
FULL FORCE AND EFFECT OR TO APPOINT ANOTHER AGENT SO THAT FT
AND DT WILL AT ALL TIMES HAVE AN AGENT FOR SERVICE OF
PROCESS FOR THE ABOVE PURPOSES IN NEW YORK, NEW YORK. IN
THE EVENT OF THE TRANSFER OF ALL OR SUBSTANTIALLY ALL OF THE
ASSETS AND BUSINESS OF THE PROCESS AGENT TO ANY OTHER
CORPORATION BY CONSOLIDATION, MERGER, SALE OF ASSETS OR
OTHERWISE, SUCH OTHER CORPORATION SHALL BE SUBSTITUTED
HEREUNDER FOR THE PROCESS AGENT WITH THE SAME EFFECT AS IF
NAMED HEREIN IN PLACE OF CT CORPORATION SYSTEM. EACH OF FT
AND DT FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH
ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED AIRMAIL, POSTAGE PREPAID, TO SUCH PARTY AT ITS
ADDRESS SET FORTH IN THIS AGREEMENT, SUCH SERVICE OF PROCESS
TO BE EFFECTIVE UPON ACKNOWLEDGMENT OF RECEIPT OF SUCH
REGISTERED MAIL. NOTHING HEREIN SHALL AFFECT THE RIGHT OF
ANY PARTY TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
APPLICABLE LAW. EACH OF FT AND DT EXPRESSLY ACKNOWLEDGES
THAT THE FOREGOING WAIVER IS INTENDED TO BE IRREVOCABLE
UNDER THE LAWS OF THE STATE OF NEW YORK AND OF THE UNITED
STATES OF AMERICA.
(d) EACH PARTY AGREES THAT MONEY DAMAGES WOULD
NOT BE A SUFFICIENT REMEDY FOR THE OTHER PARTIES FOR ANY
BREACH OF THIS AGREEMENT BY IT, AND THAT IN ADDITION TO ALL
OTHER REMEDIES THE OTHER PARTIES MAY HAVE, THEY SHALL BE
ENTITLED TO SPECIFIC PERFORMANCE AND TO INJUNCTIVE OR OTHER
EQUITABLE RELIEF AS A REMEDY FOR ANY SUCH BREACH. EACH
PARTY AGREES NOT TO OPPOSE THE GRANTING OF SUCH RELIEF IN
THE EVENT A COURT DETERMINES THAT SUCH A BREACH HAS OC-
CURRED, AND TO WAIVE ANY REQUIREMENT FOR THE SECURING OR
POSTING OF ANY BOND IN CONNECTION WITH SUCH REMEDY.
Section 11.9. Severability. The invalidity or
unenforceability of any provision hereof in any jurisdiction
will not affect the validity or enforceability of the re-
mainder hereof in that jurisdiction or the validity or
enforceability of this Agreement, including that provision,
in any other jurisdiction. To the extent permitted by
Applicable Law, each Party waives any provision of law that
renders any provision hereof prohibited or unenforceable in
any respect. If any provision of this Agreement is held to
be unenforceable for any reason, it shall be adjusted rather
than voided, if possible, in order to achieve the intent of
the Parties to the extent possible.
Section 11.10. Translation. (a) The Parties
have negotiated both this Agreement and the Memorandum of
Understanding, dated June 14, 1994 (the "MOU"), among each
of the Parties, in the English language, and have prepared
successive drafts and the definitive texts of the MOU and
this Agreement in the English language. For purposes of
complying with the French Translation Law, the Parties have
prepared a French version of this Agreement, which French
version was executed and delivered simultaneously with the
execution and delivery of the English version hereof, such
English version having likewise been executed and delivered.
The Parties deem the French and English versions of this
Agreement to be equally authoritative.
(b) The Parties acknowledge that the Amendment,
the Bylaws Amendment, the Qualified Stock Purchaser
Standstill Agreement (as such term is defined in the
Stockholders' Agreement), the Company Stock Payment Notes
(as such term is defined in the Stockholders' Agreement) and
the Company Eligible Notes (as such term is defined in the
Stockholders' Agreement), and any draft forms thereof, are
not required to be translated into the French language to
comply with the French Translation Law.
Section 11.11. Table of Contents; Headings; Coun-
terparts. The table of contents and the headings in this
Agreement are for convenience of reference only and will not
affect the construction of any provisions hereof. This
Agreement may be executed in one or more counterparts, each
of which when so executed and delivered will be deemed an
original but all of which will constitute one and the same
Agreement.
Section 11.12. Waiver of Immunity. Each of FT
and DT agrees that, to the extent that it or any of its
property is or becomes entitled at any time to any immunity
on the grounds of sovereignty or otherwise based upon its
status as an agency or instrumentality of government from
any legal action, suit or proceeding or from set off or
counterclaim relating to this Agreement from the jurisdic-
tion of any competent court described in Section 11.8, from
service of process, from attachment prior to judgment, from
attachment in aid of execution of a judgment, from execution
pursuant to a judgment or arbitral award, or from any other
legal process in any jurisdiction, it, for itself and its
property expressly, irrevocably and unconditionally waives,
and agrees not to plead or claim, any such immunity with
respect to such matters arising with respect to this Agree-
ment or the subject matter hereof (including any obligation
for the payment of money). Each of FT and DT agrees that
the waiver in this provision 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 FT or DT with respect to this Agreement.
Section 11.13. Continuing Director Approval.
Where Continuing Director approval is otherwise explicitly
required under this Agreement with respect to a transaction
or determination on the part of the Company, such approval
shall not be required if (a) the Fair Price Provisions have
been deleted in their entirety, (b) the Fair Price Pro-
visions have been modified so as explicitly not to apply to
any Class A Holder, or they have been modified in a manner
reasonably satisfactory to FT and DT so as explicitly not to
apply to any transactions with any Class A Holder
contemplated by this Agreement, the Stockholders' Agreement
or the Other Investment Documents (as such term is defined
in the Stockholders' Agreement) or the Articles as amended
by the Amendment, (c) the transaction in question is not a
"Business Combination" within the meaning of the Fair Price
Provisions, or (d) the Class A Holder that is a party to the
transaction, along with its Affiliates (as such term is
defined in Rule 12b-2 under the Securities Exchange Act of
1934, as in effect on October 1, 1982) and Associates (as
such term is defined in Rule 12b-2 under the Securities
Exchange Act of 1934, as in effect on October 1, 1982), is
not an "Interested Stockholder" or an "Affiliate" of an
"Interested Stockholder" within the meaning of the Fair
Price Provisions. Where this Agreement provides that
Continuing Director approval is explicitly required to
undertake a transaction or make a determination on the part
of the Company, the Company shall not undertake such
transaction or make such determination unless it first
delivers a certificate, signed by a duly authorized officer
of the Company, to each of FT and DT certifying that such
approval either has been obtained or is not required as set
forth in the preceding sentence, and FT and DT shall be
entitled to rely on such certificate.
Section 11.14. Currency. All amounts payable
under this Agreement and the Other Agreements shall be pay-
able in U.S. dollars.
IN WITNESS WHEREOF, the Parties have caused this
Agreement to be duly executed as of the date first above
written.
SPRINT CORPORATION
By: /s/ W. T. Esrey
Name: William T. Esrey
Title: Chairman and Chief
Executive Officer
FRANCE TELECOM
By: /s/ Charles Rozmaryn
Name: Charles Rozmaryn
Title: Directeur General
DEUTSCHE TELEKOM AG
By: /s/ Ron Sommer
Name: Dr. Ron Sommer
Title: Vorsitzender des Vorstandes
<PAGE>
Exhibit D
to the
Investment Agreement
STOCKHOLDERS' AGREEMENT
Among
FRANCE TELECOM,
DEUTSCHE TELEKOM AG
and
SPRINT CORPORATION
Dated as of ____________ __, 1995
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
<S> <C>
ARTICLE I DEFINITIONS 2
ARTICLE II RESTRICTIONS ON TRANSFER OF SHARES 37
Section 2.1. General Transfer Restrictions 37
Section 2.2. Transfers to Qualified Subsidiaries 37
Section 2.3. Other Transfers Prior to the Fifth
Anniversary 38
Section 2.4. Other Transfers 38
Section 2.5. Company Rights to Purchase 40
Section 2.6. Termination of Transfer Restrictions;
Mandatory Redemption of Class A
Preference Stock 48
Section 2.7. Notice of Certain Actions 51
Section 2.8. Restrictive Legends 51
Section 2.9. Reorganization, Reclassification,
Merger, Consolidation or Disposition
of Shares 53
Section 2.10. Strategic Mergers; Business
Combinations; Company Tender
for Shares 53
Section 2.11. Effect of Proposed Redemption 54
ARTICLE III PROVISIONS CONCERNING DISPOSITION
OF LONG DISTANCE ASSETS 54
Section 3.1. Offers to FT and DT 54
Section 3.2. Assignment of Rights 58
Section 3.3. Timing of Disposition 59
Section 3.4. Method of Purchase 59
Section 3.5. Termination of Rights 60
ARTICLE IV PROVISIONS CONCERNING
CHANGE OF CONTROL 61
Section 4.1. Sale of Assets or Control 61
Section 4.2. Required Share Purchases 61
ARTICLE V EQUITY PURCHASE RIGHTS 62
Section 5.1. Right to Purchase 62
Section 5.2. Notice 64
Section 5.3. Manner of Exercise; Manner of Payment 65
Section 5.4. Adjustments 66
Section 5.5. Closing of Purchases 66
Section 5.6. Terms of Payment 66
Section 5.7. Suspension of Equity Purchase Rights 67
ARTICLE VI HOLDINGS BY MAJOR COMPETITORS 68
ARTICLE VII COVENANTS 69
Section 7.1. Reservation and Availability of
Capital Stock 69
Section 7.2. Assignee Purchasers 69
Section 7.3. Automatic Exercise of Rights; Method of
Purchase 70
Section 7.4. Procedures for Redemption 72
Section 7.5. Joint Action by FT and DT 75
Section 7.6. Compliance with Tax Laws 75
Section 7.7. Compliance with Security Requirements 75
Section 7.8. Major Issuances 76
Section 7.9. Participation by Class A Directors
in Certain Circumstances 76
Section 7.10. Spin-offs 77
Section 7.11. FCC Licenses 78
Section 7.12. Issuance of Class A Stock 78
Section 7.13. Defeasance of Fifth Series 79
Section 7.14. Continuing Directors 79
Section 7.15. Long Distance Business 79
Section 7.16. Intellectual Property 79
Section 7.17. Rights Plan Events 79
ARTICLE VIII TERMINATION OF CERTAIN RIGHTS 80
ARTICLE IX TAX INDEMNIFICATION 81
Section 9.1. Indemnification for Company Purchase 81
Section 9.2. Indemnification for Supplementary
Payments 82
Section 9.3. Rebate of Indemnity 83
Section 9.4. Exclusions from Indemnity 84
Section 9.5. Consequences of Assignment 86
Section 9.6. Verification 86
Section 9.7. Contest Rights 87
ARTICLE X U.S. REAL PROPERTY TAX MATTERS 88
Section 10.1. Notification 88
Section 10.2. Control of FIRPTA Determination 88
Section 10.3. Issuance of Certification;
Related Matters 89
Section 10.4. Advisory Costs 90
Section 10.5. Indemnity 90
Section 10.6. Contest Rights 90
ARTICLE XI MISCELLANEOUS 92
Section 11.1. Notices 92
Section 11.2. Waiver, Amendment, etc. 93
Section 11.3. No Partnership 93
Section 11.4. Binding Agreement; Assignment;
No Third Party Beneficiaries 94
SECTION 11.5. GOVERNING LAW; DISPUTE RESOLUTION;
EQUITABLE RELIEF 94
Section 11.6. Severability 95
Section 11.7. Translation 96
Section 11.8. Table of Contents; Headings;
Counterparts 96
Section 11.9. Entire Agreement 96
Section 11.10. Waiver of Immunity 96
Section 11.11. Board Membership 97
Section 11.12. Effect of Conversion 97
Section 11.13. Continuing Director Approval 98
</TABLE>
Exhibit A -- Form of Class A Holder Eligible Note
Exhibit B -- Form of Qualified Subsidiary Assumption
Agreement
Exhibit C -- Form of Qualified Stock Purchaser
Assumption Agreement
Exhibit D -- Non-Real Property Assets
Schedule A -- List of FT Associate Positions
Schedule B -- List of DT Associate Positions
<PAGE>
STOCKHOLDERS' AGREEMENT
STOCKHOLDERS' AGREEMENT, dated as of ________,
1995 (the "Agreement"), among France Telecom, an exploitant
public organized under the laws of France ("FT"); Deutsche
Telekom AG, an Aktiengesellschaft organized under the laws
of Germany ("DT"); and Sprint Corporation, a corporation
organized under the laws of Kansas (the "Company").
RECITALS
WHEREAS, each of the Company, Sprint Global Ven-
ture, Inc., a wholly-owned Subsidiary of the Company
("Sprint Sub"), FT and DT have agreed to form a joint ven-
ture to provide telecommunications services as provided in
the Joint Venture Agreement dated as of June 22, 1995, among
Sprint Sub, FT, DT and the Company (the "Joint Venture
Agreement"), and to pursue various telecommunications oppor-
tunities around the world as further provided therein;
WHEREAS, pursuant to the Investment Agreement,
dated as of July 31, 1995, among FT, DT and the Company
(including all schedules thereto, and as may be amended from
time to time, the "Investment Agreement"), FT and DT collec-
tively are purchasing from the Company shares of its capital
stock as provided in the Investment Agreement; and
WHEREAS, the parties hereto have determined that
it is in their best interests that they enter into this
Agreement providing for certain rights and restrictions with
respect to the shares of Class A Stock owned by FT and DT
and their permitted transferees and certain related rights
and obligations of the Company, FT and DT.
NOW, THEREFORE, in consideration of the mutual
covenants and obligations set forth herein, each of FT, DT
and the Company agrees as follows:
ARTICLE I
DEFINITIONS
The following capitalized terms used in this
Agreement will have the following meanings:
"Affiliate" means, with respect to any Person, any
other Person that directly, or indirectly through one or
more intermediaries, Controls or is Controlled by, or is
under common Control with, such Person, provided that (a) no
JV Entity shall be deemed an Affiliate of any party hereto
unless (i) FT, DT and Atlas own a majority of the Voting
Power of such JV Entity and the Company does not have the
Tie-Breaking Vote, or (ii) FT, DT or Atlas has the Tie-Breaking
Vote; (b) FT, DT and the Company shall not be
deemed Affiliates of each other; (c) Atlas shall be deemed
an Affiliate of FT and DT; and (d) the term "Affiliate"
shall not include any Governmental Authority of France or
Germany or any other Person Controlled, directly or indi-
rectly, by any such Governmental Authority, in each case
except for FT, DT, Atlas and any other Person directly, or
indirectly through one or more intermediaries, Controlled by
FT, DT or Atlas.
"Alien" means "aliens", "their representatives",
"a foreign government or representatives thereof" or "any
corporation organized under the laws of a foreign country"
as such terms are used in Section 310(b)(4) of the Communi-
cations Act of 1934, as amended, or as hereafter may be
amended, or any successor provision of law.
"Amendment" means the Certificate of Amendment to
the Articles of Incorporation adopted and filed pursuant to
Section 3.2(i) of the Investment Agreement.
"Applicable Law" means all applicable provisions
of all (a) constitutions, treaties, statutes, laws (includ-
ing common law), rules, regulations, ordinances or codes of
any Governmental Authority, and (b) orders, decisions, in-
junctions, judgments, awards and decrees of any Governmental
Authority.
"Applicable Ratio" shall have the meaning set
forth in Section 7.5(a) hereof.
"Articles" means the Articles of Incorporation of
the Company, as amended or supplemented from time to time.
"Assignment Notice" shall have the meaning set
forth in Section 3.2 hereof.
"Associate" has the meaning ascribed to such term
in Rule 12b-2 under the Exchange Act, provided that when
used to indicate a relationship with FT or DT or their
respective Subsidiaries or Affiliates, the term "Associate"
shall mean (a) in the case of FT, any Person occupying any
of the positions listed on Schedule A hereto, and (b) in the
case of DT, any Person occupying any of the positions listed
on Schedule B hereto, provided, further, that, in each case,
no Person occupying any such position described in clause
(a) or (b) hereof shall be deemed an "Associate" of FT or
DT, as the case may be, unless the Persons occupying all
such positions described in clauses (a) and (b) hereof
Beneficially Own, in the aggregate, more than 0.2% of the
Voting Power of the Company.
"Atlas" means the company [formed] [to be formed]
as a societe anonyme under the laws of Belgium pursuant to
the Joint Venture Agreement, dated as of December 15, 1994,
between FT and DT, as amended.
"Basis Windfall" shall have the meaning set forth
in Section 9.3 hereof.
"Beneficial Owner" (including, with its correl-
ative meanings, "Beneficially Own" and "Beneficial Owner-
ship"), with respect to any securities, means any Person
which:
(a) has, or any of whose Affiliates or Associates
has, directly or indirectly, the right to acquire (whe-
ther such right is exercisable immediately or only
after the passage of time) such securities pursuant to
any agreement, arrangement or understanding (whether or
not in writing) including, without limitation, pursuant
to the Investment Agreement and this Agreement, or upon
the exercise of conversion rights, exchange rights,
warrants or options, or otherwise;
(b) has, or any of whose Affiliates or Associates
has, directly or indirectly, the right to vote or dis-
pose of (whether such right is exercisable immediately
or only after the passage of time) or has "beneficial
ownership" of (as determined pursuant to Rule 13d-3
under the Exchange Act but including all such securi-
ties which a Person has the right to acquire beneficial
ownership of whether or not such right is exercisable
within the 60-day period specified therein) such
securities, including pursuant to any agreement, ar-
rangement or understanding (whether or not in writing);
or
(c) has, or any of whose Affiliates or Associates
has, any agreement, arrangement or understanding (whe-
ther or not in writing) for the purpose of acquiring,
holding, voting or disposing of any securities which
are Beneficially Owned, directly or indirectly, by any
other Person (or any Affiliate thereof),
provided that Class A Stock and Common Stock held by one of
FT or DT or its Affiliates shall not also be deemed to be
Beneficially Owned by the other of FT or DT or its Affil-
iates.
"Board of Directors" means the board of directors
of the Company.
"Brokers' Transactions" means brokers' transac-
tions within the meaning of Rule 144 of the Securities Act,
or any successor rule.
"Business Day" means any day other than a day on
which commercial banks in The City of New York, Paris,
France, or Frankfurt am Main, Germany, are required or
authorized by law to be closed.
"Buyers" shall have the meaning set forth in the
Investment Agreement.
"Buy Notice" shall have the meaning set forth in
Section 2.5(b) hereof.
"Bylaws" means the Bylaws of the Company, as
amended or supplemented from time to time.
"Cellular" means (a) until immediately prior to
the Cellular Spin-off Date, the Cellular and Wireless
Division, (b) immediately prior to the Cellular Spin-off
Date, the direct or indirect wholly owned subsidiary of the
Company owning the assets of the Cellular and Wireless
Division, the shares of which subsidiary are to be
distributed to the Company's stockholders in connection with
the Cellular Spin-off, and (c) on and after the Cellular
Spin-off Date, such company, provided that the term
"Cellular" shall not include any assets retained by the
Company after the Cellular Spin-off Date.
"Cellular and Wireless Division" means the
Cellular and Wireless Communications Services Division of
the Company.
"Cellular Spin-off" shall have the meaning set
forth in Article I of the Investment Agreement.
"Change in Law" shall have the meaning set forth
in Section 10.2(b) hereof.
"Change of Control" means a:
(a) decision by the Board of Directors to sell
Control of the Company or not to oppose a third party
tender offer for Voting Securities of the Company
representing more than 35% of the Voting Power of the
Company; or
(b) change in the identity of a majority of the
Directors due to (i) a proxy contest (or the threat to
engage in a proxy contest) or the election of Directors
by the holders of Preferred Stock; or (ii) any unsolicited
tender, exchange or other purchase offer which has not
been approved by a majority of the Independent Directors,
provided that a Strategic Merger shall not be deemed to be a
Change of Control and, provided, further, that any transac-
tion between the Company and FT and DT or otherwise in-
volving FT and DT and any of their direct or indirect Sub-
sidiaries which are parties to a Contract therefor shall not
be deemed to be a Change of Control.
"Class A Action" means action by the holders of a
majority of the shares of Class A Stock taken by a vote at
either a regular or special meeting of the stockholders of
the Company or of the Class A Holders or by written consent
delivered to the Secretary of the Company.
"Class A Common Issuance Date" means the date the
Company first issues shares of Class A Common Stock.
"Class A Common Stock" means the Class A Common
Stock of the Company.
"Class A Conversion Shares" means the shares of
Class A Common Stock or Common Stock into which the then
outstanding shares of Class A Preference Stock (or, as the
case may be, a specified number of shares of Class A
Preference Stock) would, at the time of determination, be
convertible at the then applicable Conversion Price if the
conditions to establishment of the Conversion Date had been
met.
"Class A Director" means any Director elected by
the Class A Holders pursuant to Section 2(a) of ARTICLE
FIFTH of the Articles, appointed by Class A Directors
pursuant to Section 4(b) of ARTICLE FIFTH of the Articles,
or elected by the Class A Holders pursuant to Section 3(d)
of the Class A Provisions.
"Class A Holder Eligible Notes" means notes of a
Class A Holder issued pursuant to Section 5.6, substantially
in the form of Exhibit A attached hereto, made payable to
the Company which, in the written opinion of an investment
banking firm of recognized international standing addressed
to the Company and reasonably satisfactory to the Company,
would sell, at the date of their issuance, at a price equal
to their principal amount (taking into account the likely
manner and timing of resale by the Company), provided that
no note of any Class A Holder shall be deemed to be a
Class A Holder Eligible Note (a) if such Class A Holder's
debt instruments are at that time rated by Moody's Investors
Service, Inc., Standard and Poor's Corporation or Duff &
Phelps Credit Rating Co., and if it is to be issued at a
time when such Class A Holder's debt instruments comparable
to the note proposed to be a Class A Holder Eligible Note
(or, if rated, such note itself) do not possess at least two
of the three following ratings: Baa3 or better (or a com-
parable rating if the rating system is changed) by Moody's
Investors Service, Inc.; BBB- or better (or a comparable
rating if the rating system is changed) by Standard and
Poor's Corporation; and BBB- or better (or a comparable
rating if the rating system is changed) by Duff & Phelps
Credit Rating Co., and (b) unless nationally-recognized
counsel shall have delivered an opinion in form and sub-
stance reasonably satisfactory to each payee that such notes
are enforceable obligations of such Class A Holder in accor-
dance with the terms thereof, and provided, further, that no
note issued by any Qualified Subsidiary shall be deemed to
be a Class A Holder Eligible Note unless FT or DT, as the
case may be, shall have executed a guarantee with respect to
the obligations of such Qualified Subsidiary thereunder,
satisfactory in form and substance to the Company.
"Class A Holders" means FT, DT and any Qualified
Subsidiary to which shares of Class A Stock or Common Stock
have been transferred in accordance with Section 2.2 hereof
or which purchases such shares pursuant to the Investment
Agreement, and any Qualified Stock Purchaser that acquires
shares of Class A Stock pursuant to Article VI or Sec-
tion 5.1 of this Agreement or pursuant to Section 2.2(b) of
the Standstill Agreement (and shall include such Persons
even after all of the shares of Class A Stock have been
converted into Common Stock of the Company or the Fun-
damental Rights have terminated as to all outstanding shares
of Class A Preference Stock).
"Class A Preference Stock" means the Class A
Preference Stock of the Company.
"Class A Provisions" means that portion of ARTICLE
SIXTH of the Articles entitled "GENERAL PROVISIONS RELATING
TO CLASS A STOCK".
"Class A Stock" means the Class A Common Stock or,
if shares of Class A Preference Stock are outstanding, the
Class A Preference Stock.
"Closing Price" means, with respect to a security
on any day, the last sale price, regular way, or in case no
such sale takes place on such day, the average of the clos-
ing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to
trading on The New York Stock Exchange, Inc. or, if such
security is not listed or admitted to trading on such
exchange as reported in the principal consolidated transac-
tion reporting system with respect to securities listed on
the principal national securities exchange on which the
security is listed or admitted to trading or, if the securi-
ty is not listed or admitted to trading on any national
securities exchange, the last quoted sale price or, if not
so quoted, the average of the high bid and low asked prices
in the over-the-counter market, as reported by NASDAQ or
such other system then in use, or, if on any such date such
security is not quoted by any such organization, the average
of the closing bid and asked prices as furnished by a pro-
fessional market maker making a market in the security
selected in good faith by the Board of Directors. If the
security is not publicly held or so listed or publicly
traded, "Closing Price" means the Fair Market Value of such
security.
"Code" means the U.S. Internal Revenue Code of
1986, as amended.
"Committed Percentage" means, as to any Class A
Holder, the percentage obtained by dividing the aggregate
number of Votes represented or to be represented by the
Voting Securities of the Company (a) owned of record by such
Class A Holder or by its nominees, and (b) which such
Class A Holder has committed to the Company to purchase
pursuant to Sections 7.3 and 7.8 or Articles V and VI hereof
and pursuant to Article II of the Investment Agreement, by
the sum of (i) the Voting Power of the Company and (ii) the
Votes to be represented by any Voting Securities of the
Company such Class A Holder has committed to the Company to
purchase from the Company pursuant to Article V or VI or
Section 7.3 hereof and Article II of the Investment Agree-
ment.
"Common Stock" means the Common Stock of the Com-
pany.
"Company" shall have the meaning set forth in the
preamble.
"Company Eligible Notes" means notes of the Com-
pany (or its permitted assignee pursuant to Section 2.5),
satisfactory in form and substance to the Company, FT and
DT, made payable to the Transferring Stockholder, or Class A
Holder as provided in Section 2.6(b)(ii) hereof, which, in
the written opinion of an investment banking firm of recog-
nized international standing addressed to the Transferring
Stockholder, or Class A Holder as provided in Section
2.6(b)(ii) hereof, and reasonably satisfactory to such
Transferring Stockholder or Class A Holder, as the case may
be, would sell, at the date of their issuance, at a price
equal to their principal amount (taking into account the
likely manner and timing of resale by such Transferring
Stockholder or Class A Holder, as the case may be), provided
that no note of the Company (or its permitted assignee
pursuant to Section 2.5) shall be deemed to be a Company
Eligible Note (a) if it is to be issued at a time when the
Company's (or such assignee's) debt instruments comparable
to the notes proposed to be a Company Eligible Note (or such
note itself) do not possess at least two of the three
following ratings: Baa3 or better (or a comparable rating
if the rating system is changed) by Moody's Investors
Service, Inc.; BBB- or better (or a comparable rating if the
rating system is changed) by Standard and Poor's
Corporation; and BBB- or better (or a comparable rating if
the rating system is changed) by Duff & Phelps Credit Rating
Co., and (b) unless nationally-recognized counsel shall have
delivered an opinion in form and substance reasonably
satisfactory to each payee that such notes are enforceable
obligations of the Company (or such assignee) in accordance
with the terms thereof.
"Company Purchase" shall have the meaning set
forth in Section 9.1 hereof.
"Company Stock Payment Notes" shall have the mean-
ing set forth in Section 7.3 hereof.
"Company Tax Payment" shall have the meaning set
forth in Section 9.3 hereof.
"Continuing Director" means any Director who is
unaffiliated with the Buyers and their "affiliates" and
"associates" (as each such term is defined in Rule 12b-2
under the Securities Exchange Act of 1934, as in effect on
October 1, 1982) and was a Director prior to the time that
any Buyer or any such affiliate or associate became an
Interested Stockholder (as such term is defined in the Fair
Price Provisions), and any successor of a Continuing Direc-
tor if such successor is not affiliated with any such In-
terested Stockholder and is recommended or elected to suc-
ceed a Continuing Director by a majority of Continuing
Directors, provided that such recommendation or election
shall only be effective if made at a meeting of Directors at
which at least seven Continuing Directors are present.
"Contract" means any loan or credit agreement,
note, bond, indenture, mortgage, deed of trust, lease, fran-
chise, contract, or other agreement, obligation, instrument
or binding commitment of any nature.
"Control" means, with respect to a Person or
Group, any of the following:
(a) ownership by such Person or Group of Votes
entitling it to exercise in the aggregate more than 35
percent of the Voting Power of the entity in question;
or
(b) possession by such Person or Group of the
power, directly or indirectly, (i) to elect a majority
of the board of directors (or equivalent governing
body) of the entity in question; or (ii) to direct or
cause the direction of the management and policies of
or with respect to the entity in question, whether
through ownership of securities, by contract or other-
wise.
"Conversion Date" has the meaning specified in the
Class A Provisions.
"Conversion Price" means the applicable conversion
price for shares of Class A Preference Stock provided for in
Section 3(b) of the Class A Provisions.
"Corporation Joint Venture Termination" means any
of the following:
(a) the sale of Venture Interests by a Sprint
Party pursuant to Section 20.5(a) of the Joint Venture
Agreement; or
(b) the receipt by the FT/DT Parties of the Tie-Breaking Vote
due to a Funding Default, Material Non-Funding Default or
Bankruptcy (as such terms are defined in the Joint Venture
Agreement) on the part of any of the Sprint Parties.
"Director" means a member of the Board of
Directors.
"DT" shall have the meaning specified in the
preamble.
"DT Investor Confidentiality Agreement" shall have
the meaning set forth in the Investment Agreement.
"Eligible Purchaser" shall have the meaning set
forth in Section 2.5(c)(i) hereof.
"Equity Purchase Price" shall have the meaning set
forth in Section 5.5(b) hereof.
"Equity Purchase Right" shall have the meaning set
forth in Section 5.1 hereof.
"ESMR" means any commercial mobile radio service,
and the resale of such service, of the type authorized under
the rules for Specialized Mobile Radio Services designated
under Subpart S of Part 90 of the FCC's rules or similar
Applicable Laws of any other country in effect on the date
hereof, including the networking, marketing, distribution,
sales, customer interface and operations functions relating
thereto.
"Europe" means the current geographic area covered
by the following countries and territories located on the
European continent, plus in the case of France, its terri-
tories and possessions located outside the European con-
tinent: Albania, Andorra, Austria, Belgium, Bosnia-Hercegovina,
Bulgaria, Croatia, Cyprus, Czech Republic,
Denmark, Estonia, Finland, France, Germany, Gibraltar,
Greece, Hungary, Iceland, Ireland, Italy, Latvia, Liechten-
stein, Lithuania, Luxembourg, Macedonia, Malta, Monaco,
Montenegro, Netherlands, Norway, Poland, Portugal, Romania,
San Marino, Serbia, Slovakia, Slovenia, Spain, Sweden,
Switzerland, Turkey, Ukraine, United Kingdom, and Vatican
City.
"Excess Shares" shall have the meaning set forth
in Section 5.1 hereof.
"Excess Taxes" shall have the meaning set forth in
Section 9.1 hereof.
"Exchange Act" means the Securities Exchange Act
of 1934, as amended, and the rules and regulations of the
SEC from time to time promulgated thereunder.
"Exempt Asset Divestitures" mean, with respect to
the Company and its Subsidiaries:
(a) Transfers of assets, shares or other equity
interests (other than Long Distance Assets) to joint
ventures approved by FT and DT prior to the Initial
Issuance Date;
(b) Transfers of assets, shares or other equity
interests (other than Long Distance Assets) to (i) any
entity in exchange for equity interests in such entity
if, after such transaction, the Company owns at least
51 percent of both the Voting Power and equity inter-
ests in such entity or (ii) any joint venture that is
an operating joint venture not controlled by any of its
principals and in which (x) the Company has the right,
acting alone, to disapprove (and thereby prohibit)
decisions relating to acquisitions and divestitures
involving more than 20 percent of the Fair Market Value
of such entity's assets, mergers, consolidations and
dissolution or liquidation of such entity and the adop-
tion of such entity's business plan and (y) Major Com-
petitors of the Joint Venture do not in the aggregate
own more than 20% of the equity interests or Voting
Power;
(c) transactions in which the Company exchanges
one or more (i) local exchange telephone businesses for
one or more such businesses or (ii) public cellular or
wireless radio telecommunications service systems for
one or more such systems, provided that the Company
shall not, directly or indirectly, receive cash in any
such transaction in an amount greater than 20 percent
of the Fair Market Value of the property or properties
Transferred by it;
(d) Transfers of assets, shares or other equity
interests (other than Long Distance Assets) by the
Company to any of its Subsidiaries, or by any of its
Subsidiaries to the Company or any other Subsidiary of
the Company;
(e) (i) any Spin-off of equity interests of a
wholly-owned Subsidiary that is not a Subsidiary which,
directly or indirectly, owns Long Distance Assets (for
purposes of this definition, the "Spun-off Entity"),
provided that the Class A Holders receive securities in
the Spun-off Entity of a separate class with rights no
less favorable to the Class A Holders than those
applicable to the Class A Stock set forth in the Arti-
cles and the Bylaws, or (ii) the Cellular Spin-off,
unless a Notice of Abandonment (as defined in the
Investment Agreement) has been delivered;
(f) Transfers of assets (other than Long Distance
Assets) of the Company or any of its Subsidiaries that
are primarily or exclusively used in connection with
providing information technology or data processing
functions or services (collectively, for purposes of
this definition, the "IT Assets"), to any Person that
regularly provides information technology or data
processing functions or services on a commercial basis,
in connection with a contractual arrangement (for
purposes of this definition, an "IT Service Contract")
pursuant to which such Person undertakes to provide
information technology or data processing functions or
services to the Company or any of its Subsidiaries of
substantially the same nature as the services asso-
ciated with the use of such assets prior to such Trans-
fer and upon commercially reasonable terms to the
Company as determined in good faith by the Company,
provided that (i) the term of such IT Service Contract
shall be for a period at least as long as the weighted
average useful life of such assets, or the Company or
such Subsidiary shall have the right to cause such IT
Service Contract to be renewed or extended for a period
at least as long as such weighted average useful life
upon commercially reasonable terms to the Company as
determined in good faith by the Company, and (ii) the
Transfer of such assets will not materially and ad-
versely affect the operation of the Company; or
(g) Transfers of assets (other than Long Distance
Assets or IT Assets) of the Company or any of its Sub-
sidiaries to any Person in connection with any con-
tractual arrangement (for purposes of this definition,
a "Non-IT Service Contract") pursuant to which such
Person undertakes to provide services to the Company or
any of its Subsidiaries of substantially the same
nature as the services associated with the use of such
assets prior to such Transfer and upon commercially
reasonable terms to the Company as determined in good
faith by the Company, provided, that (i) the Fair
Market Value of such assets, together with the Fair
Market Value of assets of the Company Transferred to
such Person or other Persons in related transactions,
do not represent more than five percent of the Fair
Market Value of the assets of the Company, (ii) the
Transfer of such assets will not materially and
adversely affect the operation of the Company, and
(iii) the term of such Non-IT Service Contract shall be
for a period at least as long as the weighted average
useful life of the assets so Transferred or the Company
or such Subsidiary has the right to cause such Non-IT
Service Contract to be renewed or extended for a period
at least as long as such weighted average useful life
upon commercially reasonable terms to the Company as
determined in good faith by the Company.
"Exempt Long Distance Asset Divestitures" mean,
with respect to the Company and its Subsidiaries:
(a) Transfers of Long Distance Assets to a Quali-
fied Joint Venture;
(b) Transfers of Long Distance Assets to any
entity if the Company and its Subsidiaries after such
transaction own at least 70 percent of both the Voting
Power and equity interests of such entity, provided
that if a Major Competitor of FT or DT or the Joint
Venture holds equity interests in such entity, such
Major Competitor's equity interests and Votes in such
entity as a percentage of the Voting Power of such
entity shall not, directly or indirectly, exceed 20
percent;
(c) Transfers of Long Distance Assets pursuant to
an underwritten, widely-distributed public offering at
the conclusion of which the Company and its Subsidiar-
ies shall own at least 51 percent of both the Voting
Power and equity interests in the entity that owns such
Long Distance Assets;
(d) Transfers in the ordinary course of business
of Long Distance Assets determined by the Company to be
unnecessary for the orderly operation of the Company's
business, and sale-leasebacks of Long Distance Assets
and similar financing transactions after which the
Company and its Subsidiaries continue in possession and
control of the Long Distance Assets involved in such
transaction;
(e) Transfers of Long Distance Assets by the
Company to any of its Subsidiaries, or by any of its
Subsidiaries to the Company or any other Subsidiary of
the Company;
(f) Transfers of Long Distance Assets to FT or DT
or any assignee thereof pursuant to this Agreement;
(g) any Spin-off of equity interests of a wholly-owned
Subsidiary which, directly or indirectly, owns
Long Distance Assets (for purposes of this definition,
the "Spun-off Entity"), provided that the Class A Hold-
ers receive securities in the Spun-off Entity of a
separate class with rights no less favorable to the
Class A Holders than those applicable to the Class A
Stock set forth in the Articles and the Bylaws;
(h) Transfers of Long Distance Assets of the
Company or any of its Subsidiaries that are primarily
or exclusively used in connection with providing in-
formation technology or data processing functions or
services (collectively, for purposes of this defini-
tion, the "IT Assets"), to any Person that regularly
provides information technology or data processing
functions or services on a commercial basis, in con-
nection with a contractual arrangement (for purposes of
this definition, an "IT Service Contract") pursuant to
which such Person undertakes to provide information
technology or data processing functions or services to
the Company or any of its Subsidiaries of substantially
the same nature as the services associated with the use
of such Long Distance Assets prior to such Transfer and
upon commercially reasonable terms to the Company as
determined in good faith by the Company, provided that
(i) the term of such IT Service Contract shall be for a
period at least as long as the weighted average useful
life of such Long Distance Assets, or the Company or
such Subsidiary shall have the right to cause such IT
Service Contract to be renewed or extended for a period
at least as long as such weighted average useful life
upon commercially reasonable terms to the Company as
determined in good faith by the Company, and (ii) the
Transfer of such Long Distance Assets will not mate-
rially and adversely affect the operation of the Long
Distance Business. Any such IT Service Contract in-
volving Transfers of Long Distance Assets, including
any renewal or extension thereof, shall be deemed to be
a Long Distance Asset; or
(i) Transfers of Long Distance Assets (other than
IT Assets) of the Company or any of its Subsidiaries to
any Person in connection with any contractual arrange-
ment (for purposes of this definition "Non-IT Service
Contract") pursuant to which such Person undertakes to
provide services to the Company or any of its Sub-
sidiaries of substantially the same nature as the
services associated with the use of such Long Distance
Assets prior to such Transfer and upon commercially
reasonable terms to the Company as determined in good
faith by the Company, provided, that (i) the Fair
Market Value of such Long Distance Assets, together
with the Fair Market Value of Long Distance Assets
Transferred to such Person or other Persons in related
transactions, do not represent more than three percent
of the Fair Market Value of the Long Distance Assets of
the Company, (ii) the Transfer of such Long Distance
Assets will not materially and adversely affect the
operation of the Long Distance Business, and (iii) the
term of such Non-IT Service Contract shall be for a
period at least as long as the weighted average useful
life of the Long Distance Assets so Transferred or the
Company or such Subsidiary has the right to cause such
Service Contract to be renewed or extended for a period
at least as long as such weighted average useful life
upon commercially reasonable terms to the Company as
determined in good faith by the Company. Any such
Non-IT Service Contract involving Transfers of Long
Distance Assets, including any renewal or extension
thereof, shall be deemed to be a Long Distance Asset.
"Exercise Amount" shall have the meaning set forth
in Section 7.3 hereof.
"Fair Market Value" means, with respect to any
asset, shares or other property, the cash price at which a
willing seller would sell and a willing buyer would buy such
asset, shares or other property in an arms-length negotiated
transaction without undue time restraints, as determined in
good faith by a majority of the Independent Directors as
certified in a resolution delivered to all of the Class A
Holders.
"Fair Price Provisions" means ARTICLE SEVENTH of
the Articles, and any successor provision thereto.
"FCC" means the Federal Communications Commission.
"FCC Order" means, with respect to any proposed
Transfer of Long Distance Assets by the Company, either:
(a) an effective written order or other final
action from the FCC (either in the first instance or
upon review or reconsideration) either declaring that
FT and DT are not prohibited by Section 310 from owning
such Long Distance Assets or stating that no such
declaration is required, and as to which no Proceeding
shall be pending or threatened that presents a sub-
stantial possibility of resulting in a reversal there-
of; or
(b) an effective written order from, or other
final action taken by, the FCC pursuant to delegated
authority (either in the first instance or upon review
or reconsideration) either declaring that FT and DT are
not prohibited by Section 310 from owning such Long
Distance Assets, or stating that no such declaration is
required, which order or final action shall no longer
be subject to further administrative review, and as to
which no Proceeding shall be pending or threatened that
presents a substantial possibility of resulting in a
reversal thereof;
For purposes of clause (b) of this definition, an order
from, or other final action taken by, the FCC pursuant to
delegated authority shall be deemed no longer subject to
further administrative review:
(x) if no petition for reconsideration or application
for review by the FCC of such order or final
action has been filed within thirty days after the
date of public notice of such order or final
action, as such 30-day period is computed and as
such date is defined in Sections 1.104 and 1.4 (or
any successor provisions), as applicable, of the
FCC's rules, and the FCC has not initiated review
of such order or final action on its own motion
within forty days after the date of public notice
of the order or final action, as such 40-day
period is computed and such date is defined in
Sections 1.117 and 1.4 (or any successor provi-
sions) of the FCC's rules; or
(y) if any such petition for reconsideration or appli-
cation for review has been filed, or, if the FCC
has initiated review of such order or final action
on its own motion, the FCC has issued an effective
written order or taken final action to the effect
set forth in clause (a) above.
"FIRPTA Determination" means with respect to any
sale, exchange (including a deemed exchange) or other dis-
position by a Class A Holder of Shares, a determination as
to whether the Company is a "United States Real Property
Holding Corporation" within the meaning of Section 897 of
the Code and the regulations thereunder (or any successor
provision).
"FIRPTA Tax" shall have the meaning set forth in
Section 10.5 hereof.
"First Notice Period" shall have the meaning set
forth in Section 2.5(a) hereof.
"First Offer Price" shall have the meaning set
forth in Section 2.5(a) hereof.
"Fix" or "Fixed" means, in relation to the
Conversion Price, the initial establishment of the
Conversion Price in accordance with Section 3(b) of the
Class A Provisions.
"Fixed Closing Date" means the date of the first
closing to occur under the Investment Agreement after the
date on which the Conversion Price is Fixed.
"Formula Price" means, as to a share of Class A
Common Stock, a per share price equal to the greater of
(a) the Market Price of a share of Common Stock on the date
of sale of such share, and (b) an amount equal to the
Weighted Average Price paid by the Class A Holders for the
Class A Common Stock together with a stock appreciation
factor thereon (calculated on the basis of a 365-day year)
at the rate of 3.88% through and including the date of such
redemption, such stock appreciation factor to be calculated,
on an annual compounding basis, from the date of purchase of
such Class A Common Stock until the date of redemption.
"France" means the Republic of France, including
French Guiana, Guadeloupe, Martinique and Reunion, and its
territories and possessions.
"FT" shall have the meaning specified in the
preamble.
"FT Investor Confidentiality Agreement" shall have
the meaning specified in the Investment Agreement.
"FT/DT Joint Venture Termination" means any of the
following:
(a) the sale of Venture Interests by an FT/DT
Party pursuant to Section 20.5(b), 20.5(c) or 20.5(d)
of the Joint Venture Agreement; or
(b) the receipt by the Sprint Parties of the Tie-Breaking
Vote due to a Funding Default, Material Non-Funding Default
or Bankruptcy (as such terms are defined in the Joint Venture
Agreement) on the part of any of the FT/DT Parties.
"FT/DT Party" shall have the meaning set forth in
the Joint Venture Agreement.
"FT/DT Weighted Purchase Price" means (a) prior to
the Class A Common Issuance Date, the conversion price of
the Class A Preference Stock in effect from time to time,
adjusted in accordance with the Class A Provisions solely
with respect to shares of Class A Preference Stock purchased
from the Company pursuant to this Agreement and the
Investment Agreement, and (b) on and after the Class A
Common Issuance Date, the Weighted Average Price paid by FT,
DT, their respective Qualified Subsidiaries and any
Qualified Stock Purchasers for shares of Class A Common
Stock, calculated solely with respect to shares of Class A
Common Stock (or shares of Class A Preference Stock which
have been converted into shares of Class A Common Stock)
purchased from the Company pursuant to this Agreement and
the Investment Agreement.
"Fundamental Rights" means the rights of the
holders of Class A Preference Stock to elect Directors pur-
suant to ARTICLE FIFTH of the Articles, and the rights of
the holders of Class A Preference Stock provided in Sec-
tions 4, 5, 6 and 8 of the Class A Provisions.
"Germany" means the Federal Republic of Germany.
"Governmental Approval" means any consent, waiver,
grant, concession or License of, registration or filing
with, or declaration, report or notice to, any Governmental
Authority.
"Governmental Authority" means any federation,
nation, state, sovereign, or government, any federal, supra-
national, regional, state or local political subdivision,
any governmental or administrative body, instrumentality,
department or agency or any court, tribunal, administrative
hearing body, arbitration panel, commission or other similar
dispute resolving panel or body, and any other entity exer-
cising executive, legislative, judicial, regulatory or ad-
ministrative functions of a government, provided that the
term "Governmental Authority" shall not include FT, DT,
Atlas or any of their respective Subsidiaries.
"Group" means any group within the meaning of
Section 13(d)(3) of the Exchange Act.
"Indemnitee" shall have the meaning set forth in
Section 9.1 hereof.
"Independent Director" means any member of the
Board of Directors who (a) is not an officer or employee of
the Company, or any Class A Holder, or any of their respec-
tive Subsidiaries, (b) is not a former officer of the Com-
pany, or any Class A Holder, or any of their respective
Subsidiaries, (c) does not, in addition to such person's
role as a Director, act on a regular basis, either individu-
ally or as a member or representative of an organization,
serving as a professional adviser, legal counsel or consul-
tant to the Company, or any Class A Holder, or their respec-
tive Subsidiaries, if, in the opinion of the Nominating
Committee of the Board of Directors of the Company (the
"Nominating Committee") or the Board of Directors if a Nomi-
nating Committee is not in existence, such relationship is
material to the Company, any Class A Holder, or the organi-
zation so represented or such person, and (d) does not re-
present, and is not a member of the immediate family of, a
person who would not satisfy the requirements of the preced-
ing clauses (a), (b) and (c) of this sentence. A person who
has been or is a partner, officer or director of an organi-
zation that has customary commercial, industrial, banking or
underwriting relationships with the Company, any Class A
Holder, or any of their respective Subsidiaries, that are
carried on in the ordinary course of business on an arms-
length basis and who otherwise satisfies the requirements
set forth in clauses (a), (b), (c) and (d) of the first
sentence of this definition, may qualify as an Independent
Director, unless, in the opinion of the Nominating Committee
or the Board of Directors if a Nominating Committee is not
in existence, such person is not independent of the manage-
ment of the Company, or any Class A Holder, or any of their
respective Subsidiaries, or the relationship would interfere
with the exercise of independent judgment as a member of the
Board of Directors. A person who otherwise satisfies the
requirements set forth in clauses (a), (b), (c) and (d) of
the first sentence of this definition and who, in addition
to fulfilling the customary director's role, also provides
additional services directly for the Board of Directors and
is separately compensated therefor, would nonetheless quali-
fy as an Independent Director. Notwithstanding anything to
the contrary contained in this definition, each Director as
of the date of the execution of the Investment Agreement who
is not an executive officer of the Company shall be deemed
to be an Independent Director hereunder.
"Initial Issuance Date" means the first date that
any shares of Class A Stock are issued.
"Investment Agreement" shall have the meaning set
forth in the second WHEREAS clause.
"Investment Completion Date" means the date of the
Supplemental Preference Stock Closing (as defined in the
Investment Agreement) or the Class A Common Issuance Date,
whichever shall first occur.
"Joint Venture" means the joint venture formed by
FT, DT, Sprint Sub and the Company as provided in the Joint
Venture Agreement.
"Joint Venture Agreement" shall have the meaning
set forth in the first WHEREAS clause.
"JV Entity" shall have the meaning set forth in
the Joint Venture Agreement.
"LD Disapproval Notice" shall have the meaning set
forth in Section 3.1(d) hereof.
"LD Option Period" shall have the meaning set
forth in Section 3.1(d) hereof.
"LD Sale Notice" shall have the meaning set forth
in Section 3.1(c) hereof.
"License" means any license, ordinance, authoriza-
tion, permit, certificate, variance, exemption, order, fran-
chise or approval, domestic or foreign.
"Lien" means any mortgage, pledge, security inter-
est, adverse claim, encumbrance, lien (statutory or other-
wise) or charge of any kind (including any agreement to give
any of the foregoing, any conditional sale or other title
retention agreement, any lease in the nature thereof, and
the filing of or agreement to give any financing statement
under the Uniform Commercial Code or similar Applicable Law
of any jurisdiction) or any other type of preferential
arrangement for the purpose, or having the effect, of pro-
tecting a creditor against loss or securing the payment or
performance of an obligation.
"Lien Transfer" shall mean the granting of any
Lien on any Long Distance Asset, other than:
(a) a Lien securing purchase money indebtedness
that does not have a term longer than the estimated
useful life of the Long Distance Asset subject to such
Lien;
(b) Liens or other comparable arrangements relat-
ing to the financing of accounts receivable; and
(c) Liens securing any other indebtedness for
borrowed money, provided that (i) the amount of such
indebtedness, when added to the aggregate amount of
purchase money indebtedness referred to in clause (a)
above, does not exceed 30% of the total book value of
the Long Distance Assets as at the date of the most
recently published balance sheet of the Company,
(ii) the indebtedness secured by such Liens is secured
only by Liens on Long Distance Assets, (iii) the face
amount of such indebtedness does not exceed the book
value of the Long Distance Assets subject to such
Liens, and (iv) such indebtedness is for a term no
longer than the estimated useful life of the Long Dis-
tance Assets subject to such Liens.
"Liquidation Preference" shall have the meaning
set forth in the Class A Provisions.
"Local Exchange Division" means the Local Communi-
cations Services Division of the Company.
"Long Distance Assets" means:
(a) the assets reflected in the Company's balance
sheet for the year ended December 31, 1994 as included
in the Long Distance Division;
(b) any assets acquired by the Company or any of
its Subsidiaries following December 31, 1994 that are
reflected in the Company's balance sheet as included in
the Long Distance Division;
(c) any assets of the Company or any of its Sub-
sidiaries that are not reflected in the Company's bal-
ance sheet for the year ended December 31, 1994 as in-
cluded in the Long Distance Division, which after
December 31, 1994 are transferred by the Company or any
of its Subsidiaries to, or reclassified by the Company
or any of its Subsidiaries as part of, the Long Dis-
tance Division;
(d) any assets acquired by the Company after De-
cember 31, 1994 that are used or held for use primarily
for the benefit of the Long Distance Business; and
(e) any assets referred to in clauses (a) through
(c) above that are used or held for use primarily for
the benefit of the Long Distance Business which are
transferred or reclassified by the Company or any of
its Subsidiaries outside of the Long Distance Division,
but which continue to be owned by the Company or any of
its Subsidiaries;
provided that the term "Long Distance Assets" shall not
include (i) any assets that are used or held for use pri-
marily for the benefit of any Non-Long Distance Business, or
(ii) any other assets reflected in the Company's balance
sheet for the year ended December 31, 1994 as included in
the Cellular and Wireless Division or the Local Exchange
Division (other than as such assets in the Cellular and
Wireless Division or the Local Exchange Division may be
transferred or reclassified in accordance with paragraph (c)
of this definition).
"Long Distance Business" means all long distance
telecommunications activities and services of the Company
and its Subsidiaries at the relevant time, including (but
not limited to) all long distance transport services,
switching and value-added services for voice, data, video
and multimedia transmission, migration paths and intelligent
overlapping architectures, provided that the term "Long
Distance Business" shall not include any activities or ser-
vices primarily related to any Non-Long Distance Business.
"Long Distance Division" means the Long Distance
Communications Services Division of the Company.
"Major Competitor" means (a) with respect to FT or
DT, a Person that materially competes with a major portion
of the telecommunications services business of FT or DT in
Europe, or a Person that has taken substantial steps to
become such a Major Competitor and which FT or DT has rea-
sonably concluded, in its good faith judgment, will be such
a competitor in the near future in France or Germany, pro-
vided that FT and/or DT furnish in writing to the Company
reasonable evidence of the occurrence of such steps;
(b) with respect to the Company, a Person that materially
competes with a major portion of the telecommunications
services business of the Company in North America, or a
Person that has taken substantial steps to become such a
Major Competitor and which the Company has reasonably con-
cluded, in its good faith judgment, will be such a competi-
tor in the near future in the United States of America,
provided that the Company furnish in writing to each Class A
Holder reasonable evidence of the occurrence of such steps;
and (c) with respect to the Joint Venture, a Person that
materially competes with a major portion of the telecommuni-
cations services business of the Joint Venture, or a Person
that has taken substantial steps to become such a Major
Competitor and which FT, DT or the Company has reasonably
concluded, in its good faith judgment, will be such a com-
petitor in the near future, provided that FT, DT or the
Company furnish in writing to each other party hereto rea-
sonable evidence of the occurrence of such steps.
"Major Issuance" means any transaction, including,
but not limited to, a merger or business combination, re-
sulting, directly or indirectly, in the issuance (or sale
from treasury) in connection with such transaction of Voting
Securities of the Company with a number of Votes equal to or
greater than 30 percent of the Voting Power of the Company
immediately prior to such issuance.
"Mandatory Payment Amount" shall have the meaning
set forth in Section 7.3(c)(ii) hereof.
"Market Price" means, with respect to a security
on any date, the Closing Price of such security on the Trad-
ing Day immediately prior to such date. The Market Price
shall be deemed to be equal to (a) in the case of a share of
Class A Common Stock, the Market Price of a share of Common
Stock; and (b) in the case of a share of Class A Preference
Stock, the Liquidation Preference. The Market Price of any
options, warrants, rights or other securities convertible
into or exercisable for Class A Common Stock (except for the
Class A Preference Stock) shall be equal to the Market Price
of options, warrants, rights or other securities convertible
into or exercisable for Common Stock upon the same terms and
otherwise containing the same terms as such options,
warrants, rights or other securities convertible into or
exercisable for Class A Common Stock.
"Material Adverse Effect" means, with respect to
any Person, the effect of any event, occurrence, fact, con-
dition or change that is materially adverse to the business,
operations, results of operations, financial condition,
assets or liabilities of such Person.
"NASDAQ" means the National Association of
Securities Dealers, Inc. Automated Quotations System.
"Non-Long Distance Business" means (a) the owner-
ship of any equity or other interests in the Joint Venture
or any of the JV Entities; the enforcement or performance of
any of the rights or obligations of the Company or any Sub-
sidiary of the Company pursuant to the Joint Venture Agree-
ment; or any activities or services of the Joint Venture or
any of the JV Entities; (b) the Triple Play Activities;
(c) any activities or services primarily related to the
provision of subscriber connections to a local exchange or
switch providing access to the public switched telephone
network; (d) any activities or services primarily related to
the provision of exchange access services for the purpose of
originating or terminating long distance telecommunications
services; (e) any activities or services primarily related
to the resale by the Local Exchange Division of long dis-
tance telecommunications services of the Company or other
carriers; (f) any activities or services primarily related
to the provision of inter-LATA long distance telecommunica-
tions services that are incidental to the local exchange
services business of the Local Exchange Division; (g) any
activities or services primarily related to the provision of
intra-LATA long distance telecommunications services;
(h) any activities or services (whether local, intra-LATA or
inter-LATA) primarily related to the provision of cellular,
PCS, ESMR or paging services, mobile telecommunications
services or any other voice, data or voice/data wireless
services, whether fixed or mobile, or related to telecom-
munications services provided through communications satel-
lite systems (whether low, medium or high orbit systems);
and (i) the use of the "Sprint" brand name or any other
brand names, trade names or trademarks owned or licensed by
the Company or any of its Subsidiaries.
"North America" means the current geographic area
covered by the following countries: Canada, the United
States of Mexico and the United States of America.
"Notifying Class A Holder" shall have the meaning
set forth in Section 10.2 hereof.
"Offered Shares" shall have the meaning set forth
in Section 2.5(a) hereof.
"Option Shares" shall have the meaning set forth
in Section 5.2 hereof.
"Optional Shares" shall have the meaning set forth
in Section 2.5(a) of the Investment Agreement.
"Optional Shares Closing" shall have the meaning
set forth in Section 2.5(c) of the Investment Agreement.
"Other Investment Documents" means the Investment
Agreement, the Standstill Agreement, the FT Investor Con-
fidentiality Agreement, the DT Investor Confidentiality
Agreement, any Qualified Subsidiary Standstill Agreement,
the Registration Rights Agreement, any Qualified Subsidiary
Confidentiality Agreement, any standstill agreement entered
into by a holder of equity interests of a Qualified Subsid-
iary pursuant to the Standstill Agreement or any confidenti-
ality agreement entered into by a holder of equity interests
of a Qualified Subsidiary pursuant to the FT Investor Con-
fidentiality Agreement or the DT Investor Confidentiality
Agreement.
"Other Purchaser" shall have the meaning set forth
in Section 2.5(c)(ii) hereof.
"Passive Financial Institution" means a bank (or
comparable financial institution), insurance company, pen-
sion or retirement fund that acquires Voting Securities or
other equity interests in a Qualified Subsidiary without the
purpose or effect of changing or influencing the control of
the Qualified Subsidiary or the Company, nor in connection
with or as a participant in any transaction having such
purpose or effect, provided that the term "Passive Financial
Institution" shall not include any Major Competitor of the
Company or the Joint Venture.
"PCS" means a radio communications system of the
type authorized under the rules for broadband personal
communications services designated as Subpart E of Part 24
of the FCC's rules or similar Applicable Laws of any other
country, including the network, marketing, distribution,
sales, customer interface and operations functions relating
thereto.
"Percentage Ownership Interest" means, with re-
spect to any Person, that percentage of the Voting Power of
the Company represented by Votes associated with the Voting
Securities of the Company owned of record by such Person or
by its nominees.
"Person" means an individual, a partnership, an
association, a joint venture, a corporation, a business, a
trust, any entity organized or existing under Applicable
Law, an unincorporated organization or any Governmental
Authority.
"Planned Date" means the planned date for the
initial filing of a registration statement with the SEC
relating to a proposed Public Offering or the first date on
which it is proposed that a Class A Holder consummate
Brokers' Transactions as to any securities.
"Preferred Stock" means any series of Preferred
Stock of the Company, but shall not include the Class A
Preference Stock.
"Principal Investment Documents" shall have the
meaning set forth in Section 7.10 hereof.
"Private Offer Notice Period" shall have the mean-
ing set forth in Section 2.5(c)(i) hereof.
"Private Sale Notice" shall have the meaning set
forth in Section 2.5(c)(i) hereof.
"Proceeding" means any action, litigation, suit,
proceeding or formal investigation or review of any nature,
civil, criminal, regulatory or otherwise, before any Govern-
mental Authority.
"Proposed Price" shall have the meaning set forth
in Section 2.5(c)(i) hereof.
"Proposed Terms" shall have the meaning set forth
in Section 2.5(c)(i) hereof.
"Public Offering" means an underwritten public
offering of securities of the Company pursuant to an effec-
tive registration statement under the Securities Act.
"Public Sale Notice" shall have the meaning set
forth in Section 2.5(a) hereof.
"Qualified Joint Venture" means any operating
joint venture of which not more than 20% in the aggregate of
the Voting Power or outstanding equity interests thereof are
owned by Major Competitors of FT or DT or of the Joint
Venture, and that
(a) has received contributions of assets by the
other participants therein which are predominately of a
nature similar or complementary to the Long Distance
Assets contributed by the Company;
(b) owns assets that are available for use by the
Company on a basis which is no less favorable than that
which is afforded to other participants in such joint
venture;
(c) would treat the Joint Venture, as a customer
of the joint venture, no less favorably than other
similarly situated customers;
(d) is operated in a manner not inconsistent with
the policies of the Joint Venture; and
(e) as to which the Company undertakes to use
commercially reasonable efforts to align the activities
of such joint venture with those of the Joint Venture,
including, without limitation, to use commercially rea-
sonable efforts to cause such joint venture to become a
distributor of the services falling within the scope of
the Joint Venture (if so selected by the Joint Ven-
ture), to align the joint venture's network technology
with the network technology of the Joint Venture, and
to use the Joint Venture's services to the maximum
extent practicable,
provided that, in addition to the requirements set forth
above, a joint venture shall not be deemed to be a Qualified
Joint Venture if the predominant contribution of the Company
to such joint venture is Long Distance Assets comprising the
transport media, associated switching, electronic transmis-
sions equipment, systems and operating software comprising
the Company's long distance telecommunications network
("Critical Long Distance Assets"), unless the Company owns a
majority of the equity interests and the Voting Power of
such joint venture; and provided, further, that with respect
to a joint venture in which the predominant contribution of
the Company is Long Distance Assets that are not Critical
Long Distance Assets, such joint venture shall not be deemed
to be a Qualified Joint Venture unless such joint venture is
either (i) Controlled by the Company or (ii) not Controlled
by any of its participants, but in which the Company has the
contractual or other legal right, acting alone, to disap-
prove (and thereby prohibit) decisions relating to acquisi-
tions and divestitures involving more than 20 percent of the
Fair Market Value of such joint venture's assets, mergers,
consolidations and dissolution or liquidation of such joint
venture, and the adoption of such joint venture's business
plan.
"Qualified LD Purchaser" means, for any Transfer
of Long Distance Assets, a purchaser that (a) has the legal
and financial ability to buy such Long Distance Assets pro-
posed to be sold and (b) would not be a Major Competitor of
the Company based on the businesses to be retained by the
Company following the Transfer of such Long Distance Assets.
"Qualified Stock Purchaser" means a Person that
(a) FT and DT reasonably believe has the legal and financial
ability to purchase shares of Class A Stock from the Company
in accordance with Article VI of this Agreement or to pur-
chase shares in accordance with Section 2.2 of the Stand-
still Agreement and (b) would not be a Major Competitor of
the Company or of the Joint Venture immediately following
such purchase.
"Qualified Stock Purchaser Standstill Agreement"
shall mean a standstill agreement between the Company, the
Qualified Stock Purchaser and the Person or Persons, if any,
which, directly or indirectly, ultimately Control a Quali-
fied Stock Purchaser, satisfactory in form and substance to
each party hereto.
"Qualified Subsidiary" means any Person which
(a) is a Subsidiary of either FT or DT or an
entity that would be such a Subsidiary if FT's and DT's
aggregate ownership in such entity were held individ-
ually by one of FT or DT, provided that until the
second anniversary of the Initial Issuance Date, no
Voting Securities of such entity may be Beneficially
Owned by a Major Competitor of the Company or of the
Joint Venture, and thereafter no such Major Competitor
or Major Competitors may, individually or in the aggre-
gate, Beneficially Own Voting Securities representing
ten percent or more of the Voting Power of such entity,
and provided, further, that if the Voting Securities of
such entity owned directly by FT and DT or indirectly
through Wholly-Owned Subsidiaries of either of them are
entitled to a number of Votes representing in the ag-
gregate less than 80 percent of the Voting Power of
such entity, then:
(i) the Voting Securities owned by FT and DT
and Wholly-Owned Subsidiaries, plus Voting Secu-
rities, if any, owned by Passive Financial Insti-
tutions must in the aggregate be entitled to a
number of Votes representing at least 80 percent
of the Voting Power of such entity; and
(ii) FT and DT and Wholly-Owned Subsidiaries
must in the aggregate own Voting Securities
entitled to a number of Votes representing more
than 50 percent of the Voting Power of, and more
than 50 percent of the outstanding equity inter-
ests in, such entity; and
(b) has (i) entered into a Qualified Subsidiary
Standstill Agreement and a confidentiality agreement
satisfactory in form and substance to each party hereto
and (ii) (x) caused all holders of any of its equity
interests (other than FT, DT and Passive Financial
Institutions) (each such other holder being a "Strate-
gic Investor") to enter into a Strategic Investor
Standstill Agreement and (y) caused all holders of any
of its equity interests (other than FT and DT) to enter
into a confidentiality agreement satisfactory in form
and substance to each party hereto.
"Qualified Subsidiary Standstill Agreement" shall
have the meaning set forth in the Investment Agreement.
"Redemption Securities" means any debt or equity
securities of the Company, any of its Subsidiaries, or any
combination thereof having such terms and conditions as
shall be approved by the Board of Directors and which, to-
gether with any cash to be paid as part of the redemption
price pursuant to subsection (b) of Section 2 of the provi-
sions of ARTICLE SIXTH of the Articles entitled GENERAL
PROVISIONS RELATING TO ALL STOCK or Section 3(a)(i) of the
Class A Provisions, in the opinion of an investment banking
firm of recognized national standing selected by the Board
of Directors (which may be a firm which provides other
investment banking, brokerage or other services to the
Company), have a Market Price, at the time notice of
redemption is given pursuant to subsection (d) of Section 2
of the provisions of ARTICLE SIXTH of the Articles entitled
GENERAL PROVISIONS RELATING TO ALL STOCK or Section 3(a)(i)
of the Class A Provisions, at least equal to the redemption
price required to be paid by such Section 2 or Section
3(a)(i) of the Class A Provisions.
"Refusal Notice" shall have the meaning set forth
in Section 2.5(c)(ii) hereof.
"Refusal Price" shall have the meaning set forth
in Section 2.5(c)(ii) hereof.
"Refusal Shares" shall have the meaning set forth
in Section 2.5(c)(ii) hereof.
"Refusal Terms" shall have the meaning set forth
in Section 2.5(c)(ii) hereof.
"Registration Rights Agreement" means the Regis-
tration Rights Agreement, dated the date hereof, among the
Company, FT and DT, as it may be amended or supplemented
from time to time.
"Requested Sale Supplementary Payment" shall have
the meaning set forth in Section 3(a)(i) of the Class A
Provisions.
"Required Sale Notice" shall have the meaning set
forth in Section 7.4(d)(i) hereof.
"Restricted Period" shall have the meaning set
forth in Section 3.1(a) hereof.
"Rights" shall have the meaning set forth in Sec-
tion 5.1(c) hereof.
"Rights Agreement" means the Rights Agreement,
dated as of August 8, 1989, between the Company and UMB
Bank, n.a., as amended on June 4, 1992 and as of July 31,
1995, as it may be amended or supplemented from time to
time.
"SEC" means the United States Securities and Ex-
change Commission.
"Second Notice Period" shall have the meaning set
forth in Section 2.5(b) hereof.
"Second Offer" shall have the meaning set forth in
Section 2.5(b) hereof.
"Second Offer Price" shall have the meaning set
forth in Section 2.5(b) hereof.
"Section 310" means Section 310(b) of the Communi-
cations Act of 1934, as amended (or any successor provision
of law).
"Section 9.2 Excess Taxes" shall have the meaning
set forth in Section 9.2 hereof.
"Securities Act" means the Securities Act of 1933,
as amended, and the rules and regulations of the SEC promul-
gated thereunder.
"Shares" means (a) shares of Class A Stock, Common
Stock or any other Voting Securities of the Company,
(b) securities of the Company convertible into Voting Secu-
rities of the Company and (c) options, warrants or other
rights to acquire such Voting Securities, but in the case of
this clause (c) excluding any rights of the Class A Holders
or FT and DT to acquire Voting Securities of the Company
pursuant to the Investment Agreement and this Agreement (but
not excluding any Voting Securities received upon the
exercise of such rights).
"Specified Long Distance Assets" shall have the
meaning set forth in Section 3.1(c) hereof.
"Spin-off" means any spin-off or other pro rata
distribution of equity interests of a wholly-owned direct or
indirect Subsidiary of the Company to the stockholders of
the Company, provided that the term "Spin-off" shall not
include the Cellular Spin-off unless a Notice of Abandonment
has been delivered.
"Spin-Off Investment Agreement" shall have the
meaning set forth in Section 7.10(a)(i) hereof.
"Sprint Party" shall have the meaning set forth in
the Joint Venture Agreement.
"Sprint Sub" shall have the meaning set forth in
the first WHEREAS clause.
"Standstill Agreement" means the Standstill
Agreement, dated as of July 31, 1995, among the Company, FT
and DT, as it may be amended or supplemented from time to
time.
"Strategic Investor Standstill Agreement" shall
have the meaning set forth in the Investment Agreement.
"Strategic Merger" means a merger or other busi-
ness combination involving the Company (a) in which the
Class A Holders are entitled to retain or receive, as the
case may be, voting equity securities of the surviving
parent entity in exchange for or in respect of (by conver-
sion or otherwise) such Class A Stock, with an aggregate
Fair Market Value equal to at least 75% of the sum of
(i) the Fair Market Value of all consideration which such
Class A Holders have a right to receive with respect to such
merger or other business combination, and (ii) if the Com-
pany is the surviving parent entity, the Fair Market Value
of the equity securities of the surviving parent entity
which the Class A Holders are entitled to retain, (b) imme-
diately after which the surviving parent entity is an entity
whose voting equity securities are registered pursuant to
Section 12(b) or Section 12(g) of the Exchange Act or which
otherwise has any class or series of its voting equity secu-
rities held by at least 500 holders and (c) immediately
after which no Person or Group (other than the Class A Hold-
ers) owns Voting Securities of such surviving parent entity
with Votes equal to more than 35 percent of the Voting Power
of such surviving parent entity.
"Subject Shares" shall have the meaning set forth
in Section 2.5(c)(i) hereof.
"Subsidiary" means, with respect to any Person
(the "Parent"), any other Person in which the Parent, one or
more direct or indirect Subsidiaries of the Parent, or the
Parent and one or more of its direct or indirect Subsidi-
aries (a) have the ability, through ownership of securities
individually or as a group, ordinarily, in the absence of
contingencies, to elect a majority of the directors (or
individuals performing similar functions) of such other
Person, and (b) own more than 50% of the equity interests,
provided that Atlas shall be deemed to be a Subsidiary of
each of FT and DT.
"Supervisory Board" means, as the case may be, the
board of directors of FT, the Aufsichtsrat of DT, or an
analogous body in the case of a Qualified Stock Purchaser or
Qualified LD Purchaser.
"Supplementary Payment" shall have the meaning set
forth in Section 7.4(d)(iii) hereof.
"Surplus Shares" shall have the meaning set forth
in Section 7.4(d)(i) hereof.
"Surplus Shares Sale" shall have the meaning set
forth in Section 7.4(d)(i) hereof.
"Third Party Approval" means any consent, waiver,
grant, concession, license, authorization, permit, certifi-
cate, exemption, franchise or approval of, registration or
filing with, or declaration, report or notice to any Person
other than a Governmental Authority.
"Tie-Breaking Vote" shall have the meaning set
forth in Section 18.1(a) of the Joint Venture Agreement and
shall include any successor provision thereto.
"Total Realized Amount" shall have the meaning set
forth in Section 7.4(d)(iii) hereof.
"Trading Day" means, with respect to any security,
a day on which the principal national securities exchange on
which such security is listed or admitted to trading, or
NASDAQ, if such security is listed or admitted to trading
thereon, is open for the transaction of business (unless
such trading shall have been suspended for the entire day)
or, if such security is not listed or admitted to trading on
any national securities exchange or NASDAQ, any day other
than a Saturday, Sunday, or a day on which banking
institutions in the State of New York are authorized or
obligated by law or executive order to close.
"Transfer" means any act pursuant to which, di-
rectly or indirectly, the ownership of the assets or securi-
ties in question is sold, transferred, conveyed, delivered
or otherwise disposed, but shall not include (a) any grant
of Liens, (b) any conversion or exchange of any security of
the Company pursuant to a merger or other business combi-
nation involving the Company, (c) any transfer of ownership
of assets to the surviving entity in a Strategic Merger, or
pursuant to any other merger or other business combination
not prohibited by the Class A Provisions, or (d) any fore-
closure or other execution upon any of the assets of the
Company or any of its Subsidiaries other than foreclosures
resulting from Lien Transfers.
"Transfer Restrictions" means those restrictions
on Transfer of Shares set forth in Sections 2.2, 2.3 and 2.5
hereof.
"Transferring Stockholder" shall have the meaning
set forth in Section 2.4 hereof.
"Treaty Benefit" means:
(a) the 5% rate of dividend withholding (or any
successor rate applicable to non-portfolio in-
vestments);
(b) the exemption from income tax with respect to
dividends paid or profits distributed by the Company;
(c) the exemption from income tax with respect to
gains or profits derived from the sale, exchange, or
disposal of stock in the Company; or
(d) the exemption from taxes on capital with
respect to stock in the Company;
under, in the case of (a), (b), (c) and (d) above,
either (i) the relevant income tax treaty between the
United States and France, in the case of FT, and the
United States and Germany, in the case of DT, or (ii)
any provisions of French statutory law, in the case of
FT, or German statutory law, in the case of DT, which
refers to, or is based on or derived from, any pro-
vision of such treaty, or
(e) any other favorable treaty benefit or statu-
tory benefit, that specifically requires the ownership
of a certain amount of voting power or voting interest
in the Company, under a provision of the relevant
income tax treaty between the United States and France
or the statutory laws of France, in the case of FT, or
the relevant income tax treaty between the United
States and Germany or the statutory laws of Germany, in
the case of DT, provided that the chief tax officer of
FT or DT certifies that such benefit is reasonably
expected to provide to FT or DT, as the case may be,
combined tax savings in the year such certification is
made and in future years of at least U.S. $15 million.
"Triple Play Activities" means (a) the ownership
of any equity or other interests in MajorCo, L.P. or any of
its successors or Affiliates; the enforcement or performance
of any of the rights or obligations of the Company or any
Subsidiary of the Company pursuant to the Agreement of Lim-
ited Partnership of MajorCo, L.P. or any other agreement or
arrangement contemplated thereby, except to the extent re-
lating to the provision of services by the Company as the
long distance telecommunications provider to MajorCo, L.P.;
or any activities or services of MajorCo, L.P. or any of its
successors or Affiliates; (b) the ownership of any equity or
other interests in any Teleport Entity (as that term is
defined in the Contribution Agreement (the "Contribution
Agreement"), dated as of March 28, 1995, by and among TCI
Network Services, Comcast Telephony Services, Cox Telephony
Partnership, MajorCo, L.P. and NewTelco, L.P.); or any ac-
tivities or services of any Teleport Entity or any of their
respective successors or Affiliates; and (c) the ownership
of any equity or other interests in PhillieCo, L.P., or any
of its successors or Affiliates; the enforcement or per-
formance of any of the rights or obligations of the Company
or any Subsidiary of the Company pursuant to the Amended and
Restated Agreement of Limited Partnership of PhillieCo,
L.P., dated as of February 17, 1995, or any other agreement
or arrangement contemplated thereby, except to the extent
relating to the provision of services by the Company as the
long distance telecommunications provider to PhillieCo,
L.P.; or any activities or services of PhillieCo, L.P. or
any of its successors or Affiliates.
"Unrelated Party Sale" shall have the meaning set
forth in Section 9.1 hereof.
"Venture Interests" shall have the meaning set
forth in the Joint Venture Agreement.
"Vote" means, with respect to any entity, the
ability to cast a vote at a stockholders', members' or com-
parable meeting of such entity with respect to the election
of directors, managers or other members of such entity's
governing body, or the ability to cast a general partnership
or comparable vote, provided that with respect to the Compa-
ny only, the term "Vote" means the ability to exercise
general voting power (as opposed to the exercise of special
voting or disapproval rights such as those set forth in the
Class A Provisions) with respect to matters other than the
election of directors at a meeting of the stockholders of
the Company.
"Voting Power" means, with respect to any entity
as at any date, the aggregate number of Votes outstanding as
at such date in respect of such entity.
"Voting Securities" means, with respect to an
entity, any capital stock or debt securities of such entity
if the holders thereof are ordinarily, in the absence of
contingencies, entitled to a Vote, even though the right to
such Vote has been suspended by the happening of such a
contingency, and in the case of the Company, shall include,
without limitation, the Common Stock and the Class A Stock,
but shall not include any shares issued pursuant to the
Rights Agreement to the extent such issuance is caused by
action of a Class A Holder.
"Weighted Average Price" means the weighted aver-
age per unit price paid by the purchasers of any capital
stock, debt instrument or security of the Company. In de-
termining the price of shares of Common Stock or Class A
Common Stock issued upon the conversion or exchange of
securities or issued upon the exercise of options, warrants
or other rights, the consideration for such shares shall be
deemed to include the price paid to purchase the convertible
security or the warrant, option or other right, plus any
additional consideration paid upon conversion or exercise.
If any portion of the price paid is not cash, the Indepen-
dent Directors (acting by majority vote) shall determine in
good faith the Fair Market Value of such non-cash consider-
ation. If any new shares of Common Stock are issued to-
gether with other shares or securities or distributions of
other assets of the Company for consideration which covers
both the new shares and such other shares, securities or
other assets, the portion of such consideration allocable to
such new shares shall be determined in good faith by the
Independent Directors (acting by majority vote), in each
case as certified in a resolution sent to all Class A Holders.
"Wholly-Owned Subsidiaries" means companies or
other business organizations all of the outstanding Voting
Securities of which are owned, directly or indirectly, by
either or both of FT and DT, other than any de minimis
ownership required by Applicable Law.
"Windfall Benefit" shall have the meaning set
forth in Section 9.2 hereof.
ARTICLE II
RESTRICTIONS ON TRANSFER OF SHARES
Section 2.1. General Transfer Restrictions. The
right of Class A Holders to Transfer any Shares is restrict-
ed as provided in Article II of this Agreement, and no
Transfer of Shares by any Class A Holder may be effected
except in compliance with this Article II. Any attempted or
actual Transfer by a Class A Holder of Shares in violation
of this Agreement shall be of no effect and null and void
and shall not be recorded on the stock transfer books of the
Company.
Section 2.2. Transfers to Qualified Subsidiaries.
Subject in each case to compliance with Applicable Law and
the receipt of any necessary material Governmental Approv-
als, a Class A Holder may without restriction Transfer
Shares to Qualified Subsidiaries or FT or DT (each, for the
purposes of this Section 2.2, a "Transferee") in accordance
with this Section 2.2, provided that, in the case of each
Transfer to a Qualified Subsidiary, each Class A Holder
having an equity interest in such Qualified Subsidiary shall
(a) be liable for the performance by such Qualified
Subsidiary of its obligations under this Agreement and any
Other Investment Documents to which such Qualified
Subsidiary is or becomes a party, (b) act as agent for such
Qualified Subsidiary in connection with the receipt or
giving of any and all notices or approvals under this
Agreement and any such Other Investment Documents and
(c) not cause or permit any such Subsidiary to lose its
status as a Qualified Subsidiary at any time when such Sub-
sidiary owns Shares. At least ten days prior to any pro-
posed Transfer to a Transferee, the transferring Class A
Holder shall notify the Company of its intent to make such
Transfer, such notice to state the name and address of the
Transferee (and the identity of the shareholders of such
Transferee and the relationship of the Transferee to the
transferring Class A Holder), the proposed date of such
Transfer, the number and class of Shares to be Transferred
and the proposed terms of such Transfer. Any Transfer made
pursuant to this Section 2.2 shall be effective only if the
Transferee shall agree in writing to be bound by the terms
and conditions of this Agreement pursuant to an instrument
of assumption substantially in the form of Exhibit B hereto
and such Transferee thereby shall become a party to this
Agreement.
Section 2.3. Other Transfers Prior to the Fifth
Anniversary. Until the fifth anniversary of the Initial
Issuance Date, Shares shall not be Transferred by a Class A
Holder except as provided in Section 2.2.
Section 2.4. Other Transfers. After Section 2.3
hereof shall no longer apply or shall be terminated pursuant
to Section 2.6, but subject to the Company's rights under
Section 2.5, each Class A Holder may Transfer Shares (each
such Class A Holder being a "Transferring Stockholder")
without restriction, provided that, with respect to any such
Transfer:
(a) a Transfer in a single transaction or a
series of related transactions of Shares may be made to
a Person or Group (other than a Qualified Subsidiary or
Subsidiaries or FT or DT) that Beneficially Owns Voting
Securities with a number of Votes representing greater
than five percent of the Voting Power of the Company
immediately following such Transfer or Transfers only
in connection with a Public Offering in which:
(i) the Transferring Stockholder does not,
to the best of its knowledge, Transfer a number of
Shares representing more than two percent of the
Voting Power of the Company to a Person or Group
that, prior to such Transfer, Beneficially Owned
Voting Securities entitled to a number of Votes
representing three percent or more of the Voting
Power of the Company;
(ii) the Transferring Stockholder does not,
to the best of its knowledge, Transfer in a single
transaction or a series of related transactions to
a Person or Group a number of Shares representing
more than five percent of the Voting Power of the
Company; and
(iii) the Transferring Stockholder does not,
to the best of its knowledge, Transfer in a single
transaction or series of related transactions
Shares to a Person or Group that is required under
Section 13(d) of the Exchange Act to file a Sched-
ule 13D with respect to the Company (a "Sched-
ule 13D Filer") or, as a result of such Transfer,
will become a Schedule 13D Filer,
provided that such Transferring Stockholder shall have
notified the managing or coordinating underwriter or
underwriters participating in such Public Offering of
the restrictions set forth in clauses (i), (ii) and
(iii) and provided, further, that, in determining the
best knowledge of a Transferring Stockholder, such
holder may rely on written certification received from
such managing or coordinating underwriters or from pur-
chasers of shares in such Public Offering, unless such
holder has actual knowledge to the contrary; and
(b) the restrictions contained in Section 2.4(a)
shall continue until such time as the sum of (A) the
aggregate Committed Percentage of the Class A Holders,
and (B) the percentage of Voting Power of the Company
represented by Voting Securities which the Class A
Holders have the right to commit to purchase pursuant
to Sections 7.3 and 7.8 and Articles V and VI of this
Agreement and Article II of the Investment Agreement,
falls below three and one-half percent for more than
150 consecutive days after the rights to commit to
purchase provided in Article V have expired.
(c) For so long as the sum of (i) the aggregate
Committed Percentage of the Class A Holders, and
(ii) the percentage of Voting Power of the Company
which the Class A Holders have the right to commit to
purchase pursuant to Sections 7.3 and 7.8 and Arti-
cles V and VI of this Agreement and Article II of the
Investment Agreement is greater than five percent, but
less than nine percent (if the events described in
clause (ii) of Section 2.6(e) shall have occurred) or
ten percent (if the events described in clause (i) of
Section 2.6(e) shall have occurred), no Class A Holder
or Holders may Transfer Shares representing in excess
of one percent of the outstanding Voting Power of the
Company to any one Person or Group in any transaction
or series of related transactions, except in connection
with a Public Offering as provided in Section 2.4(a),
or Transfer Shares other than in a Public Offering to
any Major Competitor of the Company.
Section 2.5. Company Rights to Purchase. (a) If
a Transferring Stockholder proposes to Transfer Shares in a
Public Offering or in Brokers Transactions, such Transfer-
ring Stockholder shall first deliver written notice (the
"Public Sale Notice") to the Company of such Transferring
Stockholder's desire to effect such Transfer setting forth
in reasonable detail (i) the number and class of Shares to
be sold (the "Offered Shares"), (ii) the Market Price per
share (or, if Class A Preference Stock is proposed to be
Transferred, per number of Class A Conversion Shares related
to the shares of Class A Preference Stock in question) on
the date of the Public Sale Notice (the "First Offer
Price"), (iii) the Planned Date of such Transfer, and
(iv) any other material proposed terms of the Transfer.
Upon receipt of the Public Sale Notice, the Company shall
have the right to purchase all, but not less than all, of
the Offered Shares at the First Offer Price, as adjusted to
comply with the requirements of Article IX, such right to be
exercised within ten Business Days following delivery of the
Public Sale Notice to the Company (the "First Notice Pe-
riod"). The Public Sale Notice shall constitute an offer to
the Company (or its assignee, as provided below), which
shall be irrevocable during the First Notice Period, to sell
to the Company or its assignee the Offered Shares upon the
terms provided in this Section 2.5(a) and the Public Sale
Notice. The Company shall exercise such right to purchase
by delivering written notice to such Transferring Stockhold-
er at any time during the First Notice Period setting forth
its irrevocable commitment to purchase such Offered Shares
subject to receipt of any required material Third Party
Approvals or Governmental Approvals (the same to be speci-
fied in reasonable detail in such notice), compliance with
Applicable Law and the absence of any injunction or similar
legal order preventing such transaction, provided that the
Company shall not be permitted to deliver such notice (and
accordingly may not purchase the Offered Shares) unless a
majority of the Continuing Directors shall have first
approved (unless such approval is not required under Sec-
tion 11.13), at a meeting of Directors at which at least
seven Continuing Directors are present, such purchase of the
Offered Shares. The Company may assign its rights to pur-
chase the Offered Shares under this Section 2.5(a) to any
Person who is not a Major Competitor of FT or DT or of the
Joint Venture. If the Company does not exercise such right,
or the Company or its assignee does not close the purchase
of the Offered Shares within the time periods provided in
Section 2.5(d), such Transferring Stockholder may, to the
extent not otherwise prohibited under this Article II, sell
the Offered Shares, subject to compliance with Applicable
Law and receipt of any required material Third Party Approv-
als or Governmental Approvals (x) in the case of a Public
Offering, subject to subsection (b) of this Section 2.5, or
(y) in the case of Brokers' Transactions within 45 days
after the end of the First Notice Period or 45 days after
the applicable date provided in Section 2.5(d) if the Com-
pany has exercised its rights under this Section 2.5(a) and
the Company or its assignee has failed to close the purchase
of the Offered Shares within the time periods provided in
Section 2.5(d). Any Offered Shares to have been sold in
Brokers' Transactions that continue to be held by the Trans-
ferring Stockholder following the expiration of such period
shall again be subject to the provisions of this Article II.
(b) If a Transferring Stockholder proposes to
Transfer Shares in a Public Offering, on the seventh Busi-
ness Day prior to the Planned Date, such Transferring
Stockholder shall deliver to the Company a written offer
(the "Second Offer") to sell to the Company the Offered
Shares at the Market Price per share (or per number of Class
A Conversion Shares related to each Class A Preference
Share, as the case may be), as adjusted to comply with the
requirements of Article IX, of the Common Stock on the
Business Day immediately preceding such seventh Business Day
(such Market Price, the "Second Offer Price"), provided that
no Second Offer need be made if the Second Offer Price would
be more than 90 percent of the First Offer Price and provid-
ed, further, that, prior to making a Second Offer, any
Transferring Stockholder may, in its complete discretion,
change the Planned Date to a date not later than 120 days
after the original Planned Date. The Company shall have
24 hours (the "Second Notice Period") in which to deliver to
such Transferring Stockholder written notice of its decision
to accept the Second Offer (a "Buy Notice"), provided that
the Company shall not be permitted to deliver such Buy
Notice (and accordingly may not purchase the Offered Shares)
unless a majority of the Continuing Directors shall have
first approved (unless such approval is not required under
Section 11.13), at a meeting of Directors at which at least
seven Continuing Directors are present, such purchase of the
Offered Shares. The Second Offer shall constitute an offer
to the Company or its assignee, as provided below, which
shall be irrevocable during such Second Notice Period, to
sell to the Company or its assignee such Offered Shares upon
the terms set forth in this Section 2.5(b) and the Second
Offer. Delivery of a Buy Notice to such Transferring Stock-
holder shall constitute an irrevocable commitment on the
part of the Company to purchase such Offered Shares upon the
terms set forth in this Section 2.5(b) (subject to the
receipt of any required material Third Party Approvals or
Governmental Approvals (the same to be specified in rea-
sonable detail in such Buy Notice), compliance with Appli-
cable Law and the absence of any injunction or similar legal
order preventing such transaction), and to reimburse such
Transferring Stockholder for all of its reasonable out-of-pocket
expenses incurred in connection with such Transfer,
including the reasonable fees and expenses of its advisors
and legal counsel, upon receipt of a certificate of such
Transferring Stockholder setting forth in reasonable detail
such out-of-pocket expenses. The Company may assign its
rights to purchase the Offered Shares under this Sec-
tion 2.5(b) to any Person who is not a Major Competitor of
FT or DT or the Joint Venture. If a Buy Notice is not
timely delivered to such Transferring Stockholder, or the
Company or its assignee does not close the purchase of the
Offered Shares within the applicable time period provided in
Section 2.5(d), such Transferring Stockholder shall have no
obligation to sell the Offered Shares to the Company, and
subject to compliance with Applicable Law and the receipt of
any required material Third Party Approvals or Governmental
Approvals, may, to the extent not otherwise prohibited under
this Article II, Transfer the Offered Shares at any time
prior to 45 days after the Planned Date or the applicable
date provided in Section 2.5(d) if the Company has accepted
the Second Offer and the Company or its assignee has failed
to close the purchase of the Offered Shares within the time
period provided in Section 2.5(d), provided that the Trans-
ferring Stockholder may delay for a reasonable period its
offering beyond such 45th date if it determines in good
faith that such a delay is advisable because of marketing
considerations or because the registration statement pur-
suant to which such Offered Shares are registered has not
yet been declared effective, provided, further, that, if
such offering is delayed for longer than ten Business Days
after such 45th date, the Offered Shares shall again be
subject to the Company's purchase rights under this para-
graph (b) and the obligations of the Class A Holders to make
a Second Offer. Any Offered Shares which continue to be
held by the Transferring Stockholder following the appli-
cable period shall again be subject to the provisions of
this Article II.
(c) If a Transferring Stockholder proposes to
Transfer Shares in a transaction not covered by Section 2.2,
2.5(a) or 2.5(b) and otherwise permitted by this Article II,
(i) such Transferring Stockholder shall first
deliver written notice (a "Private Sale Notice") to the
Company stating that such Transferring Stockholder
proposes to effect such Transfer, such notice to
describe in reasonable detail (x) the number and class
of Shares to be Transferred (the "Subject Shares"),
(y) a price per share (the "Proposed Price") and
(z) other material terms of such Transfer determined by
such Transferring Stockholder in its sole discretion
(the "Proposed Terms"). Upon receipt of the Private
Sale Notice, the Company shall have the right to pur-
chase all, but not less than all, of the Subject Shares
at the Proposed Price, as adjusted to comply with the
requirements of Article IX, and in accordance with the
Proposed Terms for a period of ten Business Days (the
"Private Offer Notice Period"). The Private Sale No-
tice shall constitute an offer to the Company or its
assignee, as provided below, which is irrevocable dur-
ing such Private Offer Notice Period, to sell to the
Company or its assignee such Subject Shares upon the
terms set forth in this Section 2.5(c)(i) and the Pri-
vate Sale Notice. The Company may exercise such right
by delivering written notice to such Transferring
Stockholder at any time during the Private Offer Notice
Period setting forth its irrevocable commitment to
purchase such Subject Shares at the Proposed Price, as
adjusted to comply with the requirements of Article IX,
in accordance with the Proposed Terms subject to re-
ceipt of any required material Third Party Approvals or
Governmental Approvals (the same to be specified in
reasonable detail in such notice), compliance with
Applicable Law and the absence of any injunction or
similar order preventing such transaction, provided
that the Company shall not be permitted to deliver such
notice (and accordingly may not purchase the Subject
Shares) unless a majority of the Continuing Directors
shall have first approved (unless such approval is not
required under Section 11.13), at a meeting of Direc-
tors at which at least seven Continuing Directors are
present, such purchase of the Subject Shares. The
Company may assign its rights to purchase the Subject
Shares under this Section 2.5(c)(i) to any Person who
is not a Major Competitor of FT or DT or of the Joint
Venture. If the Company fails to exercise such right,
or the Company or its assignee does not close the
purchase of the Subject Shares within the applicable
time period provided in Section 2.5(d), then such
Transferring Stockholder, subject to compliance with
Applicable Law and receipt of any required material
Third Party Approvals or Governmental Approvals, may,
to the extent not otherwise prohibited under this
Article II, sell all of the Subject Shares to any one
or more Eligible Purchasers at the Proposed Price
(taking into account any adjustments thereto which may
have been made to comply with the requirements of
Article IX) and in accordance with the Proposed Terms
(or at a better price and on terms more favorable to
such Transferring Stockholder) within 180 days after
delivery of the Private Sale Notice to the Company or
180 days after the applicable date provided in Sec-
tion 2.5(d) if the Company has exercised its rights
under this Section 2.5(c)(i) and the Company or its
assignee has failed to close the purchase of the Sub-
ject Shares within the time period provided in Sec-
tion 2.5(d). Any Subject Shares which continue to be
held by the Transferring Stockholder following such
periods shall again be subject to the provisions of
this Article II. For purposes of this Section 2.5, the
term "Eligible Purchaser" shall mean a Person or Group
that would be eligible pursuant to Rule 13d-1(b) under
the Exchange Act to file a Schedule 13G with respect to
the Company if such Person or Group Beneficially Owned
Voting Securities representing five percent or more of
the Voting Power of the Company; and
(ii) if a Transferring Stockholder proposes to
Transfer Shares pursuant to a bona fide offer to pur-
chase Shares from a purchaser that is not an Eligible
Purchaser (an "Other Purchaser"), prior to such Trans-
ferring Stockholder's accepting such offer, such Trans-
ferring Stockholder shall first deliver notice thereof
(a "Refusal Notice") to the Company and to each other
Class A Holder, setting forth in reasonable detail,
(w) the number and class of Shares to be Transferred
(the "Refusal Shares"), (x) the price per share of such
bona fide offer (the "Refusal Price"), (y) the other
material terms of such bona fide offer (the "Refusal
Terms"), and (z) the identity of the offeror. Upon
receipt of such notice, the Company shall have the
right to purchase all, but not less than all, of the
Refusal Shares upon the Refusal Terms, subject to re-
ceipt of any required material Third Party Approvals or
Governmental Approvals (the same to be specified in
reasonable detail in the Company's notice described in
this paragraph), compliance with Applicable Law and the
absence of any injunction or similar legal order pre-
venting such transaction, at the Refusal Price, as
adjusted to comply with the requirements of Article IX.
The Refusal Notice shall constitute an offer to the
Company or its assignee, as provided below, which is
irrevocable during the period described in the next
sentence, to sell to the Company or its assignee the
Refusal Shares upon the terms set forth in this Sec-
tion 2.5(c)(ii) and the Refusal Notice. The Company
shall have ten Business Days after receipt of such
notice in which to exercise such right by delivering
written notice stating its irrevocable commitment to so
exercise to the Transferring Stockholder, provided that
the Company shall not be permitted to deliver such
notice (and accordingly may not purchase the Refusal
Shares) unless a majority of the Continuing Directors
shall have first approved (unless such approval is not
required under Section 11.13), at a meeting of Direc-
tors at which at least seven Continuing Directors are
present, such purchase of the Refusal Shares. The
Company may assign its rights to purchase the Refusal
Shares under this Section 2.5(c)(ii) to any Person who
is not a Major Competitor of FT or DT or of the Joint
Venture. If the Company fails to exercise such right,
or the Company or its assignee does not close the pur-
chase of the Refusal Shares within the applicable time
period provided in Section 2.5(d), then such Trans-
ferring Stockholder, subject to compliance with Appli-
cable Law and receipt of any required material Third
Party Approvals or Governmental Approvals, may, to the
extent not otherwise prohibited under this Article II,
sell all of the Refusal Shares to the Other Purchaser
at the Refusal Price (taking into account any adjust-
ments thereto which may have been made to comply with
the requirements of Article IX) and in accordance with
the Refusal Terms (or at a better price and upon terms
more favorable to such Transferring Stockholder) within
180 days following delivery of such notice to the Com-
pany or 180 days after the date provided in Sec-
tion 2.5(d) if the Company has exercised its rights
under this Section 2.5(c)(ii) and the Company or its
assignee has failed to close the purchase of the Re-
fusal Shares within the applicable time period provided
in Section 2.5(d). Any Refusal Shares which continue
to be held by the Transferring Stockholder following
such period shall again be subject to the provisions of
this Article II.
(d) The closing of purchases of Shares pursuant
to this Section 2.5 shall take place within (i) 45 days in
the case of purchases by the Company or an assignee, or
(ii) 180 days in the case of purchases by an assignee if all
required Governmental Approvals necessary to permit such
closing by such assignee have not been obtained within such
45-day period, after the exercise of the Company's right to
purchase at the offices of Debevoise & Plimpton, 875 Third
Avenue, New York, New York, at 10:00 a.m., New York time, or
at such other date, time or place as the Company and the
Transferring Stockholder may otherwise agree.
(i) At such closing,
(x) the Transferring Stockholder shall
(A) sell, transfer and deliver to the Company or
its assignee all of its right, title and interest
in and to the Shares to be purchased by the Com-
pany or its assignee free and clear of Liens,
(B) deliver to the Company or its assignee a cer-
tificate or certificates representing such Shares
duly endorsed in blank or accompanied by stock
transfer powers duly endorsed in blank together
with evidence of payment of any applicable stock
transfer taxes and (C) deliver to the Company or
its assignee an executed written representation of
such Transferring Stockholder, in form and sub-
stance reasonably satisfactory to the Company or
its assignee, representing that (1) such Trans-
ferring Stockholder is validly existing and has
validly authorized such Transfer, (2) such Trans-
fer does not violate or otherwise conflict with
the organizational documents of such Transferring
Stockholder or require any material Third Party
Approval or Governmental Approval on the part of
such Transferring Stockholder which has not yet
been obtained and (3) the Transferring Stockholder
shall Transfer the Shares to be purchased free and
clear of all Liens arising due to the action or
inaction of such Transferring Stockholder; and
(y) the Company or its assignee shall deliv-
er to such Transferring Stockholder an amount (the
"Purchase Price") in cash or in cash and securi-
ties of the Company, as hereinafter provided,
equal to the product of (A) the First Offer Price,
the Second Offer Price, the Proposed Price or the
Refusal Price, as the case may be, in each case as
adjusted to comply with the requirements of
Article IX; and (B) the number of Shares to be
acquired by the Company or its assignee.
(ii) Payment of the Purchase Price shall be made
as follows:
(x) If the Purchase Price is less than
$200 million, payment of the entire Purchase Price
shall be made by wire transfer of immediately
available funds to such bank and account as such
Transferring Stockholder shall designate.
(y) If the Purchase Price is $200 million or
greater, but less than or equal to $500 million,
payment of $200 million of the Purchase Price
shall be made by wire transfer of immediately
available funds to such bank and account as such
Transferring Stockholder shall designate, an
amount equal to one-half of the difference between
the Purchase Price and $200 million (for purposes
of this Section 2.5, the "One-Half Quantity")
shall be paid in Company Eligible Notes maturing
one year from the date of such closing; and an
amount equal to the One-Half Quantity shall be
paid in Company Eligible Notes maturing two years
from the date of such closing. The principal of
any such Company Eligible Notes shall be adjusted
to comply with the requirements of Article IX such
that the Transferring Stockholder receives princi-
pal in an amount equal to the One-Half Quantity on
each of the first and second anniversaries of such
closing.
(z) If the Purchase Price exceeds $500 mil-
lion, payment of $200 million of the Purchase
Price shall be made by wire transfer of immedi-
ately available funds to such bank and account as
such Transferring Stockholder shall designate, an
amount equal to one-third of the difference be-
tween the Purchase Price and $200 million (for
purposes of this Section 2.5, the "One-Third Quan-
tity") shall be paid in Company Eligible Notes
maturing one year from the date of such closing;
an amount equal to the One-Third Quantity shall be
paid in Company Eligible Notes maturing two years
from the date of such closing; and an amount equal
to the One-Third Quantity shall be paid in Company
Eligible Notes maturing three years from the date
of such closing. The principal of any such Com-
pany Eligible Notes shall be adjusted to comply
with the requirements of Article IX such that the
Transferring Stockholder receives principal in an
amount equal to the One-Third Quantity on each of
the first, second and third anniversaries of such
closing.
Section 2.6. Termination of Transfer Restric-
tions; Mandatory Redemption of Class A Preference Stock.
(a) At any time after the earlier of the Class A Common
Issuance Date and the date when the Conversion Price shall
have been Fixed, the Transfer Restrictions shall terminate
and cease to be of further force and effect hereunder (but
the provisions of Section 2.4 shall continue):
(i) if there is a Corporation Joint Venture
Termination;
(ii) upon the first anniversary of a sale of all
of the Venture Interests of the Sprint Parties or the
FT/DT Parties pursuant to Section 17.2, 17.3, 17.4,
19.3, 20.6 or 20.11 of the Joint Venture Agreement or
upon the first anniversary of the date on which the
Joint Venture is otherwise terminated, in each case,
other than pursuant to (x) an FT/DT Joint Venture Ter-
mination or (y) a Corporation Joint Venture Termina-
tion;
(iii) if the Company has breached in any material
respect its obligations under Article III, IV, V, and
VI; Section 7.1, 7.4, 7.8, 7.10 or 7.11 of this
Agreement; Section 8.8 of the Investment Agreement;
Article FIFTH of the Articles (to the extent such
Article relates to the rights of the holders of Class A
Stock); or the Class A Provisions, provided, that, if
the Company so breaches any of these obligations, and
such breach is capable of being cured without adversely
affecting in any material respect the Class A Holders
or their rights hereunder or under the Other Investment
Documents (other than as to the timing of the Optional
Shares Closing or an Article IV Closing, as the case
may be), the Articles or the Bylaws, (x) the date of
termination of the Transfer Restrictions shall be de-
layed for a period of not more than 180 days from the
date of such breach, or, in the case of a dispute as to
whether such a breach has occurred, for 90 days follow-
ing the rendering of an order of a court of competent
jurisdiction in connection therewith, in either case if
during such time the Company is attempting in a dili-
gent manner to cause such breach to be cured and
(y) the Transfer Restrictions shall not terminate if
such breach is cured within the applicable period;
(iv) if the Company shall have determined to pro-
ceed with a transaction described in Section 4.1 here-
of;
(v) at any time after the Investment Completion
Date, if the sum of (x) the aggregate Committed
Percentage of the Class A Holders, and (y) the per-
centage of Voting Power of the Company represented by
Voting Securities which the Class A Holders have the
right to commit to purchase pursuant to Sections 7.3
and 7.8 and Articles V and VI of this Agreement and
Section 2.5 of the Investment Agreement, falls below
(1) ten percent for more than 150 consecutive days,
immediately after the issuance of additional Voting
Securities of the Company other than pursuant to a
Major Issuance; or (2) nine percent, immediately after
a Transfer of Shares by Class A Holders, provided that
the rights of the Company contained in Sections 2.5(a)
and 2.5(b) hereof shall, in either case, continue until
the sum of (I) the aggregate Committed Percentage of
the Class A Holders, and (II) the percentage of Voting
Power of the Company represented by Voting Securities
which the Class A Holders have the right to commit to
purchase pursuant to Sections 7.3 and 7.8 and Arti-
cles V and VI of this Agreement and Article II of the
Investment Agreement, falls below five percent;
(vi) at any time after the Investment Completion
Date, if the sum of (x) the aggregate Committed
Percentage of the Class A Holders, and (y) the per-
centage of Voting Power of the Company represented by
Voting Securities which the Class A Holders have the
right to commit to purchase pursuant to Sections 7.3
and 7.8 and Articles V and VI of this Agreement and
Section 2.5 of the Investment Agreement, falls below
ten percent as a result of a Major Issuance and the
Class A Holders (1) furnish in writing to the Company a
written binding election not to exercise their rights
to purchase Class A Common Stock from the Company
pursuant to Section 7.8 with respect to such
transaction and, for 180 days following the date of
such Major Issuance, not to make open market purchases
pursuant to Section 7.8 that would result in the Class
A Holders having an aggregate Committed Percentage of
ten percent or more, or (2) fail to exercise their
rights to purchase Class A Common Stock from the Com-
pany pursuant to Section 7.8 with respect to such
transaction and to exercise their rights to commit to
make open market purchases pursuant to Section 7.8,
within the prescribed time periods;
(vii) if a Person other than a Class A Holder shall
acquire a Percentage Ownership Interest greater than
20 percent or there is a Change of Control within the
meaning of clause (b) of such definition;
(viii) unless all of the outstanding shares of
Class A Common Stock have been converted into shares of
Common Stock, the Fundamental Rights as to all out-
standing shares of Class A Preference Stock have
terminated, or the rights of the Class A Holders under
Section 4 of the Class A Provisions are suspended pur-
suant to clauses (ii) or (iii) of Section 7(b) of the
Class A Provisions, if, between the second and fifth
anniversaries of the Initial Issuance Date, the Company
or any of its Subsidiaries, as the case may be, shall
take or engage in, directly or indirectly, any of the
actions described in Section 4(a)(i), 4(a)(ii),
4(a)(iii) or 4(a)(iv) of the Class A Provisions, not-
withstanding a written notice signed by FT and DT
expressing disapproval thereof delivered to the Company
within 30 days of delivery of the notice from the Com-
pany relating thereto as provided in Section 2.7; or
(ix) if the Class A Holders elect to be released
from the Transfer Restrictions pursuant to Sec-
tion 7.8(a) hereof.
(b) While shares of Class A Preference Stock are
outstanding, but prior to the time the Conversion Price
shall have been Fixed,
(i) if the event described in Section 2.6(a)(iii)
shall occur, the Class A Holders may make the election
provided in Section 7(n)(i) of the Class A Provisions.
(ii) if the event described in Section 2.6(a)(iv)
shall occur, the Class A Holders may make the election
provided in Section 7(f)(ii)(y)(B) of the Class A
Provisions.
(iii) if any of the events described in Section
2.6(a) (other than clauses (iii) or (iv) thereof) shall
occur, the Class A Holders may make the election
provided in Section 7(n)(ii) of the Class A Provisions.
(c) If the Company fails to redeem all of the
outstanding shares of Class A Preference Stock when required
pursuant to Section 3(c), 7(f) or 7(n) of the Class A
Provisions, in addition to whatever other rights and
remedies the Class A Holders may have, hereunder or
otherwise, such Shares may be transferred without any
restriction provided for in this Article II other than the
restrictions set forth in Section 2.4 hereof, and in
accordance with Section 7(o) of the Class A Provisions.
(d) The Transfer Restrictions shall cease to be
of further force and effect as provided in Section 7(f) and
7(n) of the Class A Provisions.
Section 2.7. Notice of Certain Actions. Unless
all of the outstanding shares of Class A Common Stock have
been converted into shares of Common Stock, the Fundamental
Rights have terminated as to all outstanding shares of Class
A Preference Stock, or the rights of the Class A Holders
under Section 4 of the Class A Provisions are suspended
pursuant to clause (ii) or (iii) of Section 7(b) of the
Class A Provisions, for a period of three years following
the date which is two years after the Initial Issuance Date,
at least 40 days prior to (a) the Company or any of its Sub-
sidiaries taking or engaging in, directly or indirectly, any
of the actions described in Sections 4(a)(i) and 4(a)(ii) of
the Class A Provisions, or (b) the Company taking or engag-
ing in, directly or indirectly, any of the transactions de-
scribed in Sections 4(a)(iii) and 4(a)(iv) of the Class A
Provisions, the Company shall provide each Class A Holder
with notice of such proposed transaction.
Section 2.8. Restrictive Legends. (a) A copy of
this Agreement shall be filed with the Secretary of the
Company and kept with the records of the Company. Upon
original issuance thereof and until such time as the same is
no longer required hereunder or under Applicable Law, any
certificate issued representing any of the shares of Class A
Stock or any other Shares held by the Class A Holders (in-
cluding, without limitation, all certificates issued upon
Transfer or in exchange thereof or substitution therefor)
shall bear the following restrictive legend:
THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE BEEN
ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), AND MAY NOT BE OFFERED, SOLD, ASSIGNED,
PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF ("TRANS-
FERRED") UNLESS AND UNTIL REGISTERED UNDER THE ACT OR
UNLESS SUCH TRANSFER IS EXEMPT FROM REGISTRATION OR IS
OTHERWISE IN COMPLIANCE WITH THE ACT.
THE TRANSFER OF THE SHARES EVIDENCED BY THIS CERTIFI-
CATE IS SUBJECT TO THE RESTRICTIONS ON TRANSFER PRO-
VIDED FOR IN THE STOCKHOLDERS' AGREEMENT, DATED ______,
1995, AMONG SPRINT CORPORATION, FRANCE TELECOM AND
DEUTSCHE TELEKOM AG, AS FROM TIME TO TIME IN EFFECT, A
COPY OF WHICH IS ON FILE AT THE EXECUTIVE OFFICES OF
SPRINT CORPORATION AND WILL BE FURNISHED WITHOUT CHARGE
TO THE HOLDER OF SUCH SHARES UPON WRITTEN REQUEST TO
SPRINT CORPORATION. NO SUCH TRANSFER WILL BE EFFECTIVE
UNLESS AND UNTIL THE TERMS AND CONDITIONS OF SUCH
STOCKHOLDERS' AGREEMENT HAVE BEEN COMPLIED WITH IN FULL
AND NO PERSON MAY REQUEST SPRINT CORPORATION TO RECORD
THE TRANSFER OF ANY SHARES IF SUCH TRANSFER IS IN VIO-
LATION OF SUCH STOCKHOLDERS' AGREEMENT.
THE SHARES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO
RESTRICTIONS ON VOTING PROVIDED FOR IN THE STOCK-
HOLDERS' AGREEMENT AND NO VOTE OF SUCH SHARES THAT
CONTRAVENES SUCH AGREEMENT SHALL BE EFFECTIVE.
(b) The certificates representing Shares owned by
the Class A Holders (including, without limitation, all
certificates issued upon Transfer or in exchange thereof or
substitution therefor) shall also bear any legend required
under any other Applicable Laws, including state securities
or blue sky laws.
(c) The Company may make a notation on its
records or give instructions to any transfer agents or
registrars for the Shares owned by the Class A Holders in
order to implement the restrictions on Transfer set forth in
this Article II.
(d) FT and DT shall submit all certificates
representing Shares held by FT, DT or any of their re-
spective Affiliates, and shall use commercially reasonable
efforts to cause all other Class A Holders to submit all
such certificates, to the Company so that the legend or
legends required by this Section 2.8 may be placed thereon.
(e) The Company shall not incur any liability for
any delay in recognizing any Transfer of Shares if the Com-
pany in good faith reasonably believes that such Transfer
may have been or would be in violation of the provisions of
Applicable Law or this Agreement.
(f) After such time any of the legends described
in this Section 2.8 are no longer required on any certifi-
cate or certificates representing Shares owned by the Class
A Holders, upon the request of FT or DT or such other Class
A Holder the Company will cause such certificate or cer-
tificates to be exchanged for a certificate or certificates
that do not bear such legend.
(g) No Class A Holder may pledge Shares except to
a Person that is a bona fide financial institution. Prior
to the consummation of a pledge of Shares by a Class A Hold-
er, such Class A Holder shall deliver, or shall cause such
prospective pledgee to deliver, an acknowledgment that such
pledgee has examined the legend set forth in Section 2.8(a)
and understands and agrees that any rights it has with re-
spect to the Shares are subject to those of the Company set
forth in this Agreement, including agreeing that (i) no
foreclosure on such Shares shall be effected except as per-
mitted by, and in accordance with, the terms of this Agree-
ment, and (ii) under no circumstances shall such pledgee be
entitled to exercise voting rights, consent rights or disap-
proval rights with respect to such Shares, except for the
right to vote as a holder of shares of Common Stock if such
pledgee owns such Shares after a foreclosure conducted in
accordance with the terms hereof.
Section 2.9. Reorganization, Reclassification,
Merger, Consolidation or Disposition of Shares. The pro-
visions of this Article II shall apply, to the fullest ex-
tent set forth herein, with respect to the Shares and to any
and all equity securities of the Company or any successor or
assign of the Company (whether by merger, consolidation,
sale of assets or otherwise), or any other securities of
such entity which have, or which may be converted or exer-
cised to acquire securities which will have, a Vote, that in
each case may be issued in respect of, in exchange for, or
in substitution of such Shares, including, without limita-
tion, in connection with any stock dividends, splits, re-
verse splits, combinations, reclassifications, recapitali-
zations, mergers, consolidations and the like occurring
after the date hereof.
Section 2.10. Strategic Mergers; Business Combi-
nations; Company Tender for Shares. Notwithstanding any-
thing in this Article II to the contrary, the restrictions
on Transfer set forth in this Article II (not including
Section 2.9) shall not apply to any conversion or exchange
of Shares in connection with a Strategic Merger or any other
merger or other business combination not prohibited by the
Class A Provisions or a Transfer into a tender offer made by
the Company for Shares.
Section 2.11. Effect of Proposed Redemption.
Following the third anniversary of the Investment Completion
Date, the Company shall, prior to redeeming any Shares
pursuant to Section 2 of that portion of ARTICLE SIXTH of
the Articles entitled "GENERAL PROVISIONS RELATING TO ALL
STOCK," provide the Class A Holders with notice of its
intention to so redeem such Shares, which notice shall set
forth the number of such Shares held by the Class A Holders
which are proposed to be redeemed. For a period of 120 days
thereafter (as extended day for day for each day that such
sales are actually delayed during such time period because
(i) the Shares proposed to be redeemed cannot be sold due to
the anti-fraud rules of the U.S. securities laws, or
(ii) the Company has delayed a proposed registration of such
Shares in accordance with Section 1.4 of the Registration
Rights Agreement), the Class A Holders shall be entitled, on
a pro rata basis in accordance with their respective Com-
mitted Percentages, to sell free of the restrictions on
Transfer set forth in Section 2.3 hereof (but subject to the
provisions of Sections 2.4 and 2.5 hereof) that number of
Shares in the aggregate which the Company has proposed to
redeem from the Class A Holders. Notwithstanding the fore-
going, the Company may elect to redeem Shares held by the
Class A Holders during such 120-day period (as so extended)
by paying to the Class A Holders the Market Price (as de-
fined in Section 2 of that portion of ARTICLE SIXTH of the
Articles entitled "GENERAL PROVISIONS RELATING TO ALL
STOCK") (which if the Company has so elected to redeem
during such 120-day period (as so extended) shall be modi-
fied in accordance with Article IX).
ARTICLE III
PROVISIONS CONCERNING DISPOSITION OF LONG
DISTANCE ASSETS
Section 3.1. Offers to FT and DT. (a) Subject
to Section 3.5 of this Agreement, (i) after the first to
occur of (x) the fifth anniversary of the date of this
Agreement and (y) such time as (I) legislation shall have
been enacted repealing Section 310, (II) an FCC Order shall
have been issued or (III) outside counsel to the Company
with a nationally-recognized expertise in telecommunications
regulatory matters delivers to each of FT and DT a legal
opinion in form and substance reasonably satisfactory to
each of FT and DT to the effect that Section 310 does not
prohibit FT or DT from owning the Long Distance Assets
proposed to be Transferred by the Company, and prior to the
earliest to occur of (x) the tenth anniversary of the date
of this Agreement, (y) the delivery by FT, DT or any of
their Affiliates (or a Permitted Designee (as such term is
defined in the Joint Venture Agreement)) of a notice pur-
suant to Section 17.2(b) of the Joint Venture Agreement
indicating the agreement to purchase all of the Sprint Ven-
ture Interests (as such term is defined in the Joint Venture
Agreement) following an offer by the Company or Sprint Sub
pursuant to Section 17.2(a) of the Joint Venture Agreement,
and (z) the delivery by the Company and/or Sprint Sub of a
notice pursuant to Section 17.3(a) of the Joint Venture
Agreement exercising the put right to sell all of their
Sprint Venture Interests (as such term is defined in the
Joint Venture Agreement) to FT, DT and Atlas (or a Permitted
Designee (as such term is defined in the Joint Venture
Agreement)), or (ii) during any time in which the rights
provided to the Class A Holders under Section 4(b) of the
Class A Provisions would be in effect but for the fact that
they have been suspended pursuant to Sections 7(b)(ii) or
(iii) of the Class A Provisions (each such period described
in clause (i) and clause (ii) being a "Restricted Period"),
and subject to the right of first offer in favor of FT and
DT set forth in Section 3.1(c) hereof, if the Company or any
of its Subsidiaries proposes to Transfer (except in a Lien
Transfer, an Exempt Long Distance Asset Divestiture or in a
sale of all or substantially all of the Company's assets),
in a transaction or a series of related transactions, Long
Distance Assets with the effect that the Company and its
Subsidiaries would no longer own 51 percent or more of the
Fair Market Value of the Long Distance Assets owned by them
prior thereto (calculated as at the date the Company or such
Subsidiary enters into a definitive agreement to effect such
Transfer), then the Company must deliver an LD Sale Notice
in which it offers to sell at least 51 percent of the Fair
Market Value of the Long Distance Assets (calculated as of
such date) (and any liabilities to be assumed by the trans-
feree in connection therewith) to FT and DT, in the manner
provided in Section 3.1(c), provided that the Company shall
not be permitted to deliver such LD Sale Notice (and accord-
ingly may not proceed with such Transfer) unless a majority
of the Continuing Directors shall have first approved (un-
less such approval is not required pursuant to Section
11.13), at a meeting of Directors at which at least seven
Continuing Directors are present, a Transfer to FT and DT of
the Specified Long Distance Assets at the price and upon the
terms and conditions set forth in the LD Sale Notice.
(b) Subject to Section 3.5 of this Agreement,
during a Restricted Period, the Company and its Subsidiaries
shall not undertake a Lien Transfer unless each creditor or
other party which is the beneficiary of any Lien relating to
such Lien Transfer (a "Lien Creditor") and the Company
execute a legally binding instrument in favor of each of FT
and DT in form and substance reasonably satisfactory to each
of FT and DT providing that at least 45 days prior to any
foreclosure or other execution upon the Long Distance Assets
subject to such Lien, such Lien Creditor and the Company
shall provide each of FT and DT with notice of such fore-
closure or other execution, such notice to constitute an
exclusive and, subject to Section 3.2, irrevocable offer
(i) for the Company to sell to FT and DT all of such Long
Distance Assets at a price equal to the Fair Market Value of
such assets, free and clear of any Lien relating to such
Lien Transfer, and upon other customary terms and condi-
tions, or (ii) at FT's and DT's option, to permit FT and/or
DT to pay to such Lien Creditor all amounts due to it which
are secured by such Lien, in which case (x) such Lien Cred-
itor shall release such Lien, (y) FT and DT shall be subro-
gated to the claims of the Lien Creditor against the Company
and shall have all rights of such Lien Creditor against the
Company and in respect of such Lien, and (z) the Company
shall grant, and take all action necessary to perfect, a
Lien in favor of FT and DT in the Long Distance Assets
subject to such Lien Transfer, securing the Company's obli-
gations subrogated to FT and DT, provided that the Company
shall not be permitted to undertake any such Lien Transfer
unless a majority of the Continuing Directors shall have
first approved (unless such approval is not required under
Section 11.13), at a meeting of Directors at which at least
seven Continuing Directors are present, each of the docu-
ments and transactions contemplated by this sentence. FT
and DT may exercise their rights hereunder by delivering a
notice to the Company at any time prior to any such fore-
closure or execution, setting forth which right it wishes to
exercise. If FT and DT exercise their rights under clause
(i) of the preceding sentence, the provisions of Sec-
tions 3.2 and 3.4 of this Agreement shall apply mutatis
mutandis. For purposes of this Section 3.1(b), the Fair
Market Value of any Long Distance Assets shall be the value
of such assets, without regard to the effect of the Liens
constituting the Lien Transfer in question, but considering
all other Liens on such assets and any other relevant fac-
tors, as determined by an investment banking or appraisal
firm of internationally recognized standing reasonably
satisfactory to the Company and FT and DT, the cost of which
shall be borne by the Company.
(c) Subject to Section 3.5 of this Agreement,
during a Restricted Period, if the Company or any of its
Subsidiaries shall propose to Transfer (other than in a Lien
Transfer, an Exempt Long Distance Asset Divestiture or in a
sale of all or substantially all of the Company's assets),
in a transaction or a series of related transactions, Long
Distance Assets with a Fair Market Value (calculated as at
the date the Company or such Subsidiary enters into a de-
finitive agreement to effect such Transfer) that, when
aggregated with the Fair Market Value of all Long Distance
Assets previously so Transferred after the date of the
Investment Agreement (calculated in each case as of the date
the Company or such Subsidiary entered into a definitive
agreement to Transfer such Long Distance Assets), equals or
exceeds 30 percent of the Fair Market Value of the Long
Distance Assets of the Company and its Subsidiaries taken as
a whole (calculated as at the date the Company or such
Subsidiary enters into a definitive agreement to effect such
Transfer), the Company shall first deliver written notice
(the "LD Sale Notice") to each of FT and DT stating that the
Company proposes to effect such a Transfer and setting forth
in reasonable detail (i) the Long Distance Assets proposed
to be Transferred (the "Specified Long Distance Assets"),
(ii) the price which the Company expects to receive for such
assets and (iii) the other material terms and conditions of
Transfer (including the assumption of liabilities, if any,
by the transferee in connection therewith), provided that
the Company shall not be permitted to deliver such LD Sale
Notice (and accordingly may not proceed with such Transfer)
unless a majority of the Continuing Directors shall have
first approved (unless such approval is not required pur-
suant to Section 11.13), at a meeting of Directors at which
at least seven Continuing Directors are present, a Transfer
to FT and DT of the Specified Long Distance Assets at the
price and upon the terms and conditions set forth in the LD
Sale Notice. The Company shall be entitled to effect such
proposed Transfer on terms no less favorable to the Company
than as set forth in the LD Sale Notice unless within 30
days of the delivery of the LD Sale Notice to FT and DT,
both FT and DT notify the Company in writing of their dis-
approval of such Transfer.
(d) Upon receipt of notice to the Company that
both FT and DT have disapproved of such Transfer (an "LD
Disapproval Notice"), unless the Company abandons the pro-
posed Transfer and notifies each of FT and DT of such aban-
donment within thirty Business Days of delivery of an LD
Disapproval Notice (in which case the provisions of this Ar-
ticle III shall apply to any subsequent Transfer of the
Specified Long Distance Assets), FT and DT, or a Qualified
LD Purchaser (in the case of an assignment pursuant to
Section 3.2) shall have the exclusive and, subject to Sec-
tion 3.2, irrevocable right to purchase all, but not less
than all, of the Specified Long Distance Assets at the price
and upon the terms and conditions (including the assumption
of liabilities, if any, by the transferee in connection
therewith) set forth in the LD Sale Notice. FT and DT, or a
Qualified LD Purchaser (in case of an assignment pursuant to
Section 3.2), may exercise the right described in this
Section 3.1(d) by delivering notice to the Company setting
forth their irrevocable binding commitment to purchase the
Specified Long Distance Assets at the price and on the terms
and conditions set forth in the LD Sale Notice, subject to
compliance with Applicable Laws and the receipt of all
required material Third Party Approvals and Governmental
Approvals. Such notice must be delivered within 90 days
after the date of receipt of the LD Sale Notice, such period
to be extended to the earlier to occur of (i) five Business
Days following the latest to occur of the next regularly
scheduled meetings of the Supervisory Boards of FT, DT and
any Qualified LD Purchaser (in case of such an assignment),
and (ii) 150 days following the date of receipt of the LD
Sale Notice described above (such period, the "LD Option
Period").
Section 3.2. Assignment of Rights. At any time
during the LD Option Period, upon 45 days' notice (an
"Assignment Notice") to the Company, FT and DT may assign
the rights described in Section 3.1(c) to one or more Qual-
ified LD Purchasers, provided that FT and DT shall disclose
to the Company the identity of each Qualified LD Purchaser
and such other relevant information regarding each such
Qualified LD Purchaser as the Company may reasonably request
prior to assignment of such right. The Company, in its sole
discretion, may abandon any Transfer described in its LD
Sale Notice delivered pursuant to Section 3.1(c) upon notice
to each of FT and DT within 15 days after delivery of an
Assignment Notice, in which case the rights described in
Sections 3.1(c) and (d) shall automatically be rescinded and
of no effect notwithstanding FT's and DT's acceptance there-
of, but in such event the Company may not thereafter sell
the Specified Long Distance Assets to such Qualified
LD Purchaser and may not offer to engage in a transaction
involving Long Distance Assets substantially identical to
the Specified Long Distance Assets for a period of one year
following such abandonment. Any such subsequent transaction
within a Restricted Period shall be subject to this Arti-
cle III.
Section 3.3. Timing of Disposition. If FT and DT
fail to exercise the rights described in Sections 3.1(c) and
(d), the Company may proceed to Transfer the Specified Long
Distance Assets, provided that it enters into a legally
binding agreement, subject to standard terms and conditions
for a purchase contract for assets of the type to be Trans-
ferred, to Transfer the Specified Long Distance Assets upon
terms no less favorable to the Company than those described
in the LD Sale Notice delivered pursuant to Section 3.1
within 150 days after the end of the LD Option Period. If
the Company does not obtain such a binding agreement within
such time (or if it abandons such Transfer pursuant to Sec-
tion 3.2), the Company may not engage in a transaction in-
volving substantially identical Long Distance Assets for one
year from the date of the LD Sale Notice. Any such subse-
quent transaction within a Restricted Period shall be sub-
ject to this Article III.
Section 3.4. Method of Purchase. If FT and DT,
or a Qualified LD Purchaser, as the case may be, exercise
the right provided in Section 3.1, the closing of the pur-
chase of the Specified Long Distance Assets shall take place
within 90 days after the date of exercise of such option, at
the offices of Debevoise & Plimpton, 875 Third Avenue, New
York, New York, at 10:00 a.m., New York time, or at such
other date, time or place as the Company and FT and DT, or
the Qualified LD Purchaser, as the case may be, may agree,
subject to the receipt of all necessary material Govern-
mental Approvals, material Third Party Approvals and, if
required by Applicable Law, approval of the stockholders of
the Company. At such closing, the Company shall deliver to
FT and DT, or the Qualified LD Purchaser, as the case may
be, bills of sale, assignments, endorsements, releases and
such other documents and instruments as may be necessary,
or, as determined by counsel to FT and DT, or the Qualified
LD Purchaser, as the case may be, appropriate, to convey and
vest in the buyer, title to each of the Specified Long
Distance Assets to the extent, and in conformity with the
terms of such sale, each as specified in the LD Sale Notice.
Simultaneously therewith, FT and DT, or the Qualified LD
Purchaser, as the case may be, shall deliver to the Company,
by wire transfer of immediately available funds to such bank
and account as the Company may designate, a cash amount
equal to the purchase price of the Specified Long Distance
Assets, as set forth in the Company's LD Sale Notice de-
livered pursuant to Section 3.1(b). In addition to any
other obligations which FT and DT may have at such closing,
if a Qualified LD Purchaser is to purchase Specified Long
Distance Assets at such closing, FT and DT shall certify to
the Company that such Qualified LD Purchaser meets the
qualifications set forth in this Agreement for being a
Qualified LD Purchaser as of the date of such closing. If,
notwithstanding the relevant parties' reasonable efforts,
the required approvals described in this Section 3.4 have
not been received or the parties have not waived the re-
quirement for any such approvals at the time the closing is
scheduled to occur hereunder, the closing shall be postponed
up to 180 days following the date of such originally sched-
uled closing or such other time as the parties to such
transaction may agree. If by such time all such approvals
have not been obtained or the requirement for any such
approvals waived by the parties to such transaction, the
rights of FT, DT and any Qualified LD Purchaser to purchase
such Specified Long Distance Assets shall terminate and the
Company shall be entitled to proceed with the proposed
Transfer of such assets on the terms set forth in the LD
Sale Notice.
Section 3.5. Termination of Rights. Unless
earlier terminated pursuant to Article VIII(b) hereof, the
rights provided in this Article III and Section 7.15 hereof
shall terminate, and cease to be of any further force or
effect, (a) upon the termination of the Fundamental Rights
as to all outstanding shares of Class A Preference Stock or
upon the conversion of all of the outstanding shares of
Class A Common Stock into Common Stock, in either case
pursuant to Section 7(a) (or if all of such Fundamental
Rights would have been so terminated or such shares would
have been so converted except for the proviso thereto),
7(b), 7(c) or 7(g) of the Class A Provisions, (b) after the
Investment Completion Date, if the aggregate Committed Per-
centage of the Class A Holders shall be below ten percent
for more than 180 consecutive days following a Major Issu-
ance, (c) upon a sale of all of the Venture Interests of the
Sprint Parties or the FT/DT Parties pursuant to Sec-
tion 17.2, 17.3, 17.4, 19.3, 20.6 or 20.11 of the Joint
Venture Agreement or on the date the Joint Venture is other-
wise terminated, in each case other than due to an FT/DT
Joint Venture Termination or a Corporation Joint Venture
Termination , or (d) prior to the Investment Completion
Date, if the outstanding Class A Preference Stock has an
aggregate liquidation value of less than $1.5 billion as a
result of a Transfer of shares of Class A Preference Stock
by a Class A Holder (other than a Transfer contemplated by
Section 7.4(b)(i)(y) hereof). In addition, any rights
provided in this Article III and Section 7.15 hereof shall
be suspended and may not be exercised during any period of
time in which the rights provided to the Class A Holders
under Section 4(b) of the Class A Provisions are suspended
pursuant to clause (iv) of Section 7(b) of the Class A
Provisions.
ARTICLE IV
PROVISIONS CONCERNING CHANGE OF CONTROL
Section 4.1. Sale of Assets or Control. So long
as shares of Class A Stock are outstanding, but subject to
Article VIII of this Agreement, if the Company determines to
sell all or substantially all of the assets of the Company
or not to oppose a tender offer by a Person other than any
Class A Holder or Holders for Voting Securities of the
Company representing more than 35 percent of the Voting
Power of the Company or to sell Control of the Company or to
effect a merger or other business combination, which would
result in a Person (other than FT or DT or any of their
Qualified Subsidiaries) holding Voting Securities of the
resulting entity representing 35 percent or more of the
Voting Power of such entity, the Company shall conduct such
transaction in accordance with reasonable procedures to be
determined by the Board of Directors, and permit FT and DT
to participate in that process on a basis no less favorable
than that granted any other participant.
Section 4.2. Required Share Purchases. If a
Person other than FT, DT or any of their respective Affili-
ates makes a tender offer for Voting Securities of the
Company representing not less than 35 percent of the Voting
Power of the Company and the terms of such tender offer do
not permit the Class A Holders to sell an equal or greater
percentage of their Shares as the other holders of Voting
Securities of the Company are permitted to sell taking into
account any proration, then upon the purchase by such Person
of securities representing not less than 35 percent of the
Voting Power of the Company in such tender offer, FT, DT and
their Qualified Subsidiaries, as a group, shall have the
option, exercisable upon delivery of written notice to the
Company (or its successor) at any time within 30 days after
the termination of the period during which tenders may be
made into such tender offer, to sell to the Company, at a
price per share (or, if the tender offer period terminates,
shares of Class A Preference Stock are outstanding and the
Investment Completion Date has not occurred, at a price per
number of shares of Class A Preference Stock equal to the
price per share that would apply to shares of Common Stock
that would be issuable in respect of the related Class A
Conversion Shares (assuming that, if the Conversion Price
shall not have been Fixed, the Conversion Price is equal to
the Target Price)) equal to the price per share of Common
Stock offered pursuant to the tender offer, all but not less
than all, of the Shares that they were unable to tender on
the same basis as the other shareholders, provided, that the
Class A Holders shall have no rights pursuant to this Sec-
tion 4.2 if, at the date of termination of the period during
which tenders may be made into such tender offer, the
Class A Holders have a right to receive in exchange for all
the shares of Class A Stock publicly traded securities with
an aggregate Fair Market Value, and/or cash in an amount,
not less than the aggregate price per share of Common Stock
(or per that number of related Class A Conversion Shares, as
the case may be) paid pursuant to the tender offer in a
back-end transaction required to be effected within 90 days
after the close of the tender offer.
ARTICLE V
EQUITY PURCHASE RIGHTS
Section 5.1. Right to Purchase. Following the
Investment Completion Date, and except as provided in Sec-
tion 5.7 hereof, each Class A Holder shall have the right
(an "Equity Purchase Right") to purchase from the Company
(on a pro rata basis reflecting the respective ownership of
shares of Class A Stock):
(a) except under the circumstances described in
clauses (b) and (c) below, if after the Investment
Completion Date, the Company shall issue (or sell from
treasury) shares of Common Stock (including, without
limitation, any shares issued upon (i) the exercise of
stock options, warrants or other rights not issued
pursuant to the Rights Agreement or in respect of
options or other contractually binding rights under
employee benefit plans, arrangements or contracts or
(ii) the conversion or exchange of any securities)
other than upon the conversion or exchange of the Class
A Preference Stock or the Class A Common Stock, that
number of additional shares of Class A Preference Stock
(if Class A Preference Stock shall then be outstanding)
or Class A Common Stock (if no Class A Preference Stock
shall then be outstanding) sufficient for the Class A
Holders to maintain their aggregate Committed Percent-
age as in effect immediately prior to the issuance of
such shares, such Shares to be purchased at a per share
purchase price equal to (x) in the case of Class A
Common Stock, the Weighted Average Price paid for such
shares of Common Stock whose issuance gave rise to such
Equity Purchase Right, and (y) in the case of the Class
A Preference Stock, the product of the Weighted Average
Price paid for such shares of Common Stock multiplied
by the number of Class A Conversion Shares related to
one share of Class A Preference Stock outstanding
immediately prior to such purchase;
(b) if after the Investment Completion Date the
Company shall issue (or sell from treasury) Voting
Securities other than Common Stock, or issue shares of
Common Stock pursuant to employee benefit plans,
arrangements or contracts (other than in respect of the
exercise of stock options, warrants or other rights
(except rights issued pursuant to the Rights Agreement)
in existence at any time on or before the Investment
Completion Date (including pursuant to employee benefit
plans)) or upon the conversion of any securities
outstanding on or before the Investment Completion Date
other than upon the conversion or exchange of the Class
A Preference Stock or the Class A Common Stock, that
number of additional shares of Class A Preference Stock
(if the Class A Preference Stock shall then be
outstanding) or Class A Common Stock (if no Class A
Preference Stock shall then be outstanding) sufficient
for the Class A Holders to maintain their aggregate
Committed Percentage as in effect immediately prior to
the issuance of such Voting Securities, such Shares to
be purchased at a per share purchase price equal to
(i) in the case of the Class A Common Stock, the Market
Price of a share of Common Stock on the date of the
issuance which gave rise to such Equity Purchase Right
and (ii) in the case of the Class A Preference Stock,
the product of the Market Price of a share of Common
Stock on such date of issuance, multiplied by the
number of Class A Conversion Shares related to one
share of Class A Preference Stock outstanding
immediately prior to such purchase; and
(c) if after the Investment Completion Date, the
Company shall issue (or sell from treasury) shares of
Common Stock in respect of the exercise of stock
options, warrants or other rights (except rights issued
pursuant to the Rights Agreement) in existence at any
time on or before the Investment Completion Date
(including pursuant to employee benefit plans) or upon
the conversion of any securities outstanding on or
before the Investment Completion Date other than upon
the conversion or exchange of the Class A Preference
Stock or the Class A Common Stock, that number of
additional shares of Class A Preference Stock (if the
Class A Preference Stock shall then be outstanding) or
Class A Common Stock (if no Class A Preference Stock
shall then be outstanding) sufficient for the Class A
Holders to maintain their aggregate Committed Per-
centage as in effect immediately prior to the issuance
of such Voting Securities, such Shares to be purchased
at a per share purchase price equal to (i) in the case
of Class A Common Stock, the FT/DT Weighted Purchase
Price; and (ii) in the case of Class A Preference
Stock, the product of the FT/DT Weighted Purchase Price
multiplied by the number of Class A Conversion Shares
related to such share of Class A Preference Stock
outstanding immediately prior to such purchase, pro-
vided that Shares purchased hereunder with respect to
the issuance of Excess Shares shall be purchased for a
per share purchase price equal to (x) in the case of
Class A Common Stock, the Weighted Average Price for
such Excess Shares and (y) in the case of Class A Pref-
erence Stock, the product of the Weighted Average Price
for such Excess Shares multiplied by the number of
Class A Conversion Shares related to one share of Class
A Preference Stock outstanding immediately prior to
such purchase. As used herein, "Excess Shares" means
those shares of Common Stock issued by the Company
after the date of the Investment Agreement (other than
pursuant to employee benefit plans) in respect of the
exercise of rights ("Rights") to purchase Common Stock
or similar instruments (except rights issued pursuant
to the Rights Agreement) issued after the date of the
Investment Agreement and on or prior to the Investment
Completion Date that, when aggregated with all other
shares of Common Stock which have been issued by the
Company after the date of the Investment Agreement in
respect of the exercise of Rights issued after the date
of the Investment Agreement and on or prior to the
Investment Completion Date, exceed five percent of the
number of shares of Common Stock outstanding on the
date of the Investment Agreement (adjusted to reflect
any stock split, subdivision, stock dividend or other
reclassification, consolidation or combination of the
Company's Voting Securities after the date of the
Investment Agreement).
Section 5.2. Notice. The Company shall deliver
to each Class A Holder (a) written notice of the proposed
issuance of any Voting Securities after the Investment
Completion Date not less than 15 days prior to such issu-
ance, such notice to describe in reasonable detail the
expected Weighted Average Price for such Voting Securities
and contain the calculation thereof and (b) written notice
of the issuance of such Voting Securities within five days
after such issuance, such notice to describe in reasonable
detail the Weighted Average Price, Market Price or FT/DT
Weighted Purchase Price for such Voting Securities and con-
tain the calculation thereof, provided that no such notices
need be given in respect of the issuance of shares of Common
Stock to the holders of securities of the Company in accor-
dance with the terms thereof or grants or exercises pursuant
to qualified or non-qualified employee benefit plans, ar-
rangements or contracts, in each case as outstanding on the
Initial Issuance Date or dividend reinvestment plans or
dividend reinvestment and stock purchase plans or, in the
case of securities issued after, and qualified or non-qualified
employee benefit plans, arrangements and contracts
adopted after, such date, if and only if the Class A Holders
have been given written notice of the issuance of such secu-
rities or the adoption of such plans, arrangements and con-
tracts thirty days prior to the date of such issuance or
adoption (such shares of Common Stock collectively herein-
after referred to as the "Option Shares"). The Company
shall deliver to each Class A Holder, on the tenth Business
Day of each calendar quarter following the Investment Com-
pletion Date, written notice of the issuance during the
preceding calendar quarter of (i) Option Shares, such notice
to describe in reasonable detail the Weighted Average Price,
Market Price or FT/DT Weighted Purchase Price for such
Option Shares and contain the calculation thereof and the
securities or plans, arrangements or contracts to which they
relate and (ii) shares of Class A Stock to each Class A
Holder pursuant to Section 7.3(c) hereof, such notice to set
forth the purchase price for such shares of Class A Stock
and the calculation thereof.
Section 5.3. Manner of Exercise; Manner of Pay-
ment. The Class A Holders may exercise their Equity Pur-
chase Rights by written notice to the Company delivered
prior to the thirtieth day after the date of the related
post-issuance notice provided for in Section 5.2 hereof, or
as provided in Section 7.3, as the case may be. Payment for
the additional Shares purchased or subscribed for by Class A
Holders which exercise their Equity Purchase Rights shall be
made as provided in Section 5.6 hereof or as otherwise may
be agreed by the Company and the exercising Class A Holder
or Holders. The total number of Shares issuable upon such
exercise shall be issued and delivered to the appropriate
Class A Holder against delivery to the Company of the cash
and any notes therefor as provided in Section 5.6 hereof or
as otherwise may be agreed by the Company and the exercising
Class A Holder or Holders.
Section 5.4. Adjustments. If the Class A
Holders, upon exercise of their Equity Purchase Rights, are
issued Shares on a date after the date the related Voting
Securities are issued (a) the per share purchase price paid
by the Class A Holders shall be reduced to reflect the Fair
Market Value of any dividend or distribution made in respect
of each such Voting Security prior to such issuance and
(b) such purchase price and the number of Shares purchased
shall be appropriately adjusted to reflect any stock split,
stock dividend or other combination or reclassification of
the Common Stock, Class A Preference Stock or Class A Common
Stock, as the case may be, during such time.
Section 5.5. Closing of Purchases. The closing
of purchases of Shares pursuant to the exercise of Equity
Purchase Rights by the exercising Class A Holder shall take
place on a date specified by the exercising Class A Holder,
which date shall be within 30 days after the exercise of
such Equity Purchase Rights, at the offices of Debevoise &
Plimpton, 875 Third Avenue, New York, New York, at
10:00 a.m., New York City time, or at such other date, time
or place as the Company and such exercising Class A Holder
may otherwise agree. At such closing:
(a) the Company shall deliver, or cause to be
delivered, to such exercising Class A Holder, certifi-
cates representing the shares of Class A Stock to be
purchased by such exercising Class A Holder, in the
name of such holder, against payment of the purchase
price therefor, as provided below;
(b) such exercising Class A Holder shall deliver
to the Company an amount (the "Equity Purchase Price")
equal to the product of (i) the applicable price per
share determined pursuant to Section 5.1 of this Agree-
ment and (ii) the number of Shares to be acquired by
such exercising Class A Holder.
Section 5.6. Terms of Payment. Payment for
Shares purchased from the Company pursuant to Section 5.1
hereof or Article VI hereof shall be made as follows:
(a) if the aggregate amount to be paid to the
Company is less than $200 million, payment shall be
made by the Class A Holder, or Qualified Stock Purchas-
er or Purchasers, as the case may be, in cash by wire
transfer to such account as the Company may reasonably
designate;
(b) if the amount to be paid to the Company is
equal to or greater than $200 million and less than
$500 million, not less than $200 million shall be paid
in cash by the Class A Holders, or Qualified Stock
Purchaser or Purchasers, as the case may be, by wire
transfer to such account as the Company may reasonably
designate and the remainder, if any, shall be paid in
two equal annual installments beginning on the first
anniversary of the date of such purchase, the respec-
tive obligations of the Class A Holders, or Qualified
Stock Purchaser or Purchasers, as the case may be, to
pay such installments to be evidenced by Class A Holder
Eligible Notes; or
(c) if the amount to be paid to the Company is
equal to or greater than $500 million, not less than
$200 million shall be paid in cash by the Class A
Holders, or Qualified Stock Purchaser or Purchasers, as
the case may be, by wire transfer to such account as
the Company may reasonably designate within 30 days
after such date of notice, and the remainder shall be
paid in Class A Holder Eligible Notes of the Class A
Holders, or Qualified Stock Purchaser or Purchasers, as
the case may be, one-third of such amount in Class A
Holder Eligible Notes maturing within one year after
the date of such purchase, one-third of such amount in
Class A Holder Eligible Notes maturing within two years
of such date, and one-third of such amount in Class A
Holder Eligible Notes maturing within three years of
such date.
Section 5.7. Suspension of Equity Purchase
Rights. If at any time (a) the number of Voting Securities
of the Company Beneficially Owned in the aggregate by FT, DT
and their Affiliates and Associates exceeds the applicable
Percentage Limitation as set forth in the Standstill Agree-
ment (without regard to Section 2.3 of such agreement), or
(b) the number of Voting Securities of the Company Bene-
ficially Owned in the aggregate by any Qualified Stock
Purchaser and its Affiliates and Associates exceeds the
applicable Percentage Limitation as set forth in the Qual-
ified Stock Purchaser Standstill Agreement applicable to
such Qualified Stock Purchaser (without regard to Section
2.2 of such agreement), the Company may by giving notice to
the Class A Holders whose aggregate Beneficial Ownership
exceeds such applicable Percentage Limitation specified in
clauses (a) and (b) of this Section 5.7 suspend the right of
such Class A Holders to purchase additional shares of Class
A Stock pursuant to this Agreement or otherwise until such
time as any such purchase (including any purchase pursuant
to Section 7.3 hereof) would not result in the aggregate
Beneficial Ownership of the affected Class A Holders exceed-
ing such Percentage Limitation applicable to such Class A
Holders.
ARTICLE VI
HOLDINGS BY MAJOR COMPETITORS
Until the tenth anniversary of the Initial Issu-
ance Date, if a Major Competitor of FT or DT or of the Joint
Venture obtains a Percentage Ownership Interest of 20 per-
cent or more as a result of a Strategic Merger, the Class A
Holders shall have the right to commit within the later of
(a) 30 days following the consummation of such Strategic
Merger, and (b) 30 days following the Fixed Closing Date to
purchase from the Company (or its successor in such Stra-
tegic Merger) and, upon such commitment, the Company or such
successor shall be obligated to sell to the Class A Holders
after the Investment Completion Date, subject to Applicable
Law and the receipt of any required material Governmental
Approvals, a number of shares of Class A Preference Stock
(if the Class A Preference Stock shall then be outstanding)
or Class A Common Stock (if no Class A Preference Stock
shall then be outstanding) such that the aggregate Committed
Percentage of the Class A Holders shall be equal to the Per-
centage Ownership Interest of such Major Competitor of FT or
DT following consummation of such Strategic Merger, such
Shares to be purchased at a per share price equal to (i) in
the case of Class A Common Stock, the Weighted Average Price
paid by such Major Competitor; and (ii), in the case of
Class A Preference Stock, the product of such Weighted
Average Price and the number of Class A Conversion Shares
related to one share of Class A Preference Stock outstanding
immediately prior to the date of such purchase, provided
that to the extent the purchase of Shares pursuant to this
Article VI would violate the provisions of Section 310, the
Class A Holders shall have the right to assign to one or
more non-Alien Qualified Stock Purchasers the right to pur-
chase such Shares from the Company if such Class A Holders
assigning such rights to a non-Alien Qualified Stock Pur-
chaser cause such Qualified Stock Purchaser to execute an
undertaking in accordance with Section 7.2 of this
Agreement. Shares purchased from the Company pursuant to
this Article VI shall be purchased and paid in accordance
with Sections 5.4, 5.5 and 5.6 of this Agreement, mutatis
mutandis, provided that if the Class A Holders exercise
their rights to purchase Shares from the Company hereunder
on or before the date on which they are required to notify
the Company of the exercise of their right to purchase
Optional Shares pursuant to Section 2.5 of the Investment
Agreement, such Shares shall be purchased at a closing to
occur concurrently with the Optional Shares Closing.
ARTICLE VII
COVENANTS
Section 7.1. Reservation and Availability of
Capital Stock. The Company covenants and agrees that it
will cause to be reserved and kept available, out of the
aggregate of its authorized but unissued shares of Class A
Common Stock, Class A Preference Stock and Common Stock and
its issued shares of Common Stock held in its treasury, for
the purpose of effecting the conversion of shares of Common
Stock, Class A Preference Stock and Class A Common Stock
contemplated under the Articles, the full number of shares
of (a) Common Stock then deliverable upon the conversion of
all outstanding shares of Class A Common Stock and Class A
Preference Stock, (b) Class A Common Stock then deliverable
upon the conversion of all outstanding shares of Class A
Preference Stock, and (c) Class A Common Stock and Class A
Preference Stock then deliverable upon conversion of all of
the shares of Common Stock, in the case of each of clauses
(a), (b) and (c) that the Class A Holders are permitted to
acquire hereunder and under the Investment Agreement, the
Articles and the Standstill Agreement.
Section 7.2. Assignee Purchasers. As a condition
to the assignment of rights to purchase shares of Class A
Preference Stock or Class A Common Stock to a Qualified
Stock Purchaser pursuant to Article VI hereof or pursuant to
the Standstill Agreement, FT and DT shall cause such
Qualified Stock Purchaser to agree in writing to be bound by
the terms and conditions of this Agreement and a Qualified
Stock Purchaser Standstill Agreement pursuant to an
instrument of assumption substantially in the form of
Exhibit C hereto and such Qualified Stock Purchaser thereby
shall become a party to this Agreement.
Section 7.3. Automatic Exercise of Rights; Method
of Purchase. (a) From and after the Investment Completion
Date, the Class A Holders, at their option, may lend to the
Company, and the Company shall borrow, in the aggregate up
to an amount specified in writing from time to time to the
Company by the Class A Holders, which amount has been de-
termined in good faith by the Class A Holders to be rea-
sonably necessary to cover the purchase price payable by
them in connection with their exercise of equity purchase
rights pursuant to Section 5.1 with respect to Option Shares
to be issued during the succeeding three-month period (the
"Exercise Amount"), and from time to time at the option of
the Class A Holders, the Class A Holders may lend to the
Company, and the Company shall borrow from the Class A
Holders in the aggregate (pro rata from each Class A Holder
in accordance with its relative Committed Percentage at the
time of such borrowing), an amount equal to the difference
between the Exercise Amount and the amount then outstanding
on such loans from the Class A Holders. All loans hereunder
shall be evidenced by notes ("Company Stock Payment Notes")
satisfactory in form and substance to each party hereto.
(b) For so long as the Class A Holders are enti-
tled to purchase Shares pursuant to Section 5.1, subject to
subsections (c), (e) and (f) of this Section 7.3, each
Class A Holder holding a Company Stock Payment Note hereby
agrees to exercise its rights to purchase from the Company,
and shall so purchase and the Company shall sell, shares of
Class A Preference Stock (or, if no shares of Class A
Preference Stock shall then be outstanding, Class A Common
Stock) pursuant to Section 5.1 hereof upon, and simul-
taneously with, any issuance of Option Shares.
(c) For so long as the Class A Holders are enti-
tled to purchase Shares pursuant to Section 5.1, subject to
subsections (e) and (f) of this Section 7.3, contemporane-
ously with each issuance of Option Shares,
(i) the Company shall either (A) deliver, or
cause to be delivered, to each Class A Holder a stock
certificate bearing the legends set forth in Sec-
tion 2.8 of this Agreement, registered in the name of
such Class A Holder on the stock ledger of the Company
and representing the number of Shares which such Class
A Holder is entitled to purchase pursuant to Sec-
tion 5.1 hereof as a result of such issuance of Option
Shares, or (B) cause the Company's transfer agent to
reflect on its books and records the ownership by such
Class A Holder of an additional number of Shares rep-
resenting the number of Shares which such Class A
Holder is entitled to purchase pursuant to Section 5.1
hereof as a result of such issuance of Option Shares;
and
(ii) pursuant to the terms of the Company Stock
Payment Notes, (x) the Company shall repay (in accord-
ance with the procedures set forth in clause (y), be-
low) a portion of the principal of such Company Stock
Payment Notes equal to the amount of the purchase price
for such Shares (as determined in accordance with
Section 5.1 hereof) (a "Mandatory Payment Amount"),
provided that the Company shall hold such Mandatory
Payment Amount in trust for the benefit of such ex-
ercising Class A Holder, subject to clause (y) below,
and (y) simultaneously with such payment, the Company
shall apply such Mandatory Payment Amount to the pay-
ment of such purchase price,
provided that no such purchase of Shares shall occur if the
unpaid principal amount of Company Stock Payment Notes held
by the exercising Class A Holder represents insufficient
funds to pay such purchase price in its entirety, in which
case no reduction in the unpaid principal amount of the
Company Stock Payment Notes held by such exercising Class A
Holder shall occur.
(d) Subject to subsections (c), (e) and (f), the
provisions of this Section 7.3 shall be deemed to comply
with all the requirements of Article V hereof with respect
to the exercise of such rights relating to the issuance by
the Company of Option Shares and no further notices must be
delivered or action be taken pursuant to this Agreement on
the part of any of the Class A Holders or the Company in
order to effectuate the exercise of such rights.
(e) This Section 7.3 shall become immediately
inoperative and of no force and effect with respect to any
Class A Holder (i) upon delivery by such Class A Holder to
the Company of a notice to that effect, or (ii) if, with
respect to such Class A Holder, ownership of at least 10% of
the Voting Securities of the Company by such Class A Holder
is not a necessary condition or sufficient condition to
obtaining a Treaty Benefit, as determined in a manner iden-
tical to that set forth in Sections 2(a)(iii)(2), (3), (4)
and (5) of ARTICLE FIFTH of the Articles with respect to the
termination of the provisions of Section 2(a)(iii)(1) of
such ARTICLE FIFTH provided that this Section 7.3 thereafter
shall become operative and of full force and effect with
respect to such Class A Holder (i) if this Section 7.3 is
not at that time of no force and effect pursuant to
clause (ii) of this Section 7.3(e), upon delivery by such
Class A Holder to the Company of a notice to that effect or
(ii) if, with respect to such Class A Holder, ownership of
at least 10% of the Voting Securities of the Company by such
Class A Holder is a necessary condition or sufficient con-
dition to obtaining a Treaty Benefit, as determined in a
manner identical to that set forth in Sections 2(a)(iii)(2),
(3), (4) and (5) of ARTICLE FIFTH of the Articles with
respect to the termination of the provisions of Sec-
tion 2(a)(iii)(1) of such ARTICLE FIFTH.
(f) The rights and obligations of the Class A
Holders and the Company under this Section 7.3 shall termi-
nate upon the conversion of all outstanding shares of
Class A Common Stock or the termination of the Fundamental
Rights as to all outstanding shares of Class A Preference
Stock, as the case may be, as provided in Section 7 of the
Class A Provisions, provided that such termination shall not
affect any rights of the Class A Holders to payment under
any Company Stock Payment Notes then outstanding.
Section 7.4. Procedures for Redemption. (a) If
the aggregate percentage of Shares Beneficially Owned by the
Class A Holders is less than the percentage permitted under
Section 310 to be Beneficially Owned by Aliens, the Company
will not redeem any Shares Beneficially Owned by the Class A
Holders pursuant to ARTICLE SIXTH, GENERAL PROVISIONS RELAT-
ING TO ALL STOCK, Section 2 of the Articles, provided that
notwithstanding the foregoing, the Company may, after con-
sultation in good faith with each of the Class A Holders to
consider alternatives to such redemption, redeem Shares
Beneficially Owned by the Class A Holders if and to the
extent that the outstanding shares of such Class A
Preference Stock, or Class A Common Stock, as the case may
be, represent Votes constituting greater than 20% of the
aggregate Voting Power of the Company at such time, and if,
after considering all reasonable alternatives, the failure
to redeem such Shares would have a material adverse effect
on the Company as reflected in a resolution certified to the
Class A Holders by a determination made in good faith by the
Independent Directors.
(b) (i) If at any time the Company should invoke
its right to redeem its capital stock, the Company shall
unless prohibited by Applicable Law first designate for
redemption capital stock other than shares of Class A Stock,
before designating for redemption any shares of Class A
Stock, provided that prior to the Fixed Closing Date (x) the
Company shall have no right to redeem shares of Class A
Preference Stock pursuant to the Articles to the extent that
such redemption would reduce the aggregate liquidation value
represented by the outstanding Class A Preference Stock to
below $1.5 billion, but (y) in such circumstance, if the
Votes represented by the outstanding Class A Preference
Stock exceed 20% of the aggregate Voting Power of the
Company, the Company shall have the right to purchase from
the Class A Holders for a per share price equal to the
Liquidation Preference thereof (as adjusted to comply with
the requirements of Article IX hereof) such number of shares
of Class A Preference Stock as in the reasonable good faith
judgment of the Board of Directors is necessary to comply
with the requirements of Section 310, provided that (a) the
Company may purchase Shares only to the extent the outstand-
ing Class A Preference Stock represents in excess of 20% of
the aggregate Voting Power of the Company, (b) this
Agreement, the Investment Agreement and the Articles as
amended by the Amendment shall be modified so as to maintain
the rights of the Parties hereunder and thereunder
(including, without limitation, appropriate modifications
for durations of disapproval rights) and (c) the Company
shall not purchase any Shares from the Class A Holders
pursuant to this clause (y) unless a majority of the
Continuing Directors shall have first approved (unless such
approval is not required pursuant to Section 11.13), at a
meeting of Directors at which at least seven Continuing
Directors are present, such purchase of Class A Preference
Stock from the Class A Holders.
(ii) If the Company issues Redemption Securities
in full or partial payment of the redemption price for shares
of Class A Stock in a circumstance in which Section 7.4(b)(i)
hereof or Section 2(f) of ARTICLE SIXTH of the Articles
entitled "GENERAL PROVISIONS RELATING TO ALL STOCK"
requires adjustment under Article IX of this Agreement, then
principal payments under such Redemption Securities shall be
adjusted to comply with the requirements of Article IX such
that the Class A Holders shall receive an amount equal to
the principal amount of such Redemption Securities.
(c) The Company shall take all reasonable mea-
sures to permit the Class A Holders to obtain or maintain
their Percentage Ownership Interest in accordance with
Applicable Laws of the United States, including applying for
a waiver of the restrictions on Alien ownership set forth in
Section 310 if there is a reasonable possibility of obtain-
ing such a waiver.
(d) (i) On or prior to the third anniversary of
the Investment Completion Date, the Company shall have the
right, at any time during which the Company has the right
pursuant to Section 7.4(a) hereof to redeem shares of Class
A Preference Stock or Class A Common Stock, as the case may
be, in accordance with Section 2 of that portion of ARTICLE
SIXTH of the Articles entitled "GENERAL PROVISIONS RELATING
TO ALL STOCK" and following a determination by the Board of
Directors that such redemption is necessary or advisable to
comply with the requirements of Section 310, to deliver a
notice (a "Required Sale Notice") to the Class A Holders
requiring them to sell (a "Surplus Shares Sale") that number
of shares of Class A Stock (the "Surplus Shares") necessary
so that, immediately following such Surplus Shares Sale, the
aggregate Percentage Ownership Interest of the Class A
Holders shall be 20% or such greater percentage specified in
such notice as being necessary or advisable for the Class A
Holders to attain in order to comply with the requirements
of Section 310.
(ii) Upon receipt of the Required Sale Notice,
the Class A Holders shall sell the Surplus Shares in third
party or open market sales. The Surplus Shares Sale shall
be conducted as promptly as practicable following receipt of
the Required Sale Notice, but in no event later than 120
days following the date of receipt thereof, as extended day
for day for each day that such sales are actually delayed
during such time period because (i) the Surplus Shares
cannot be sold due to the anti-fraud rules of the U.S.
securities laws, or (ii) the Company has delayed a proposed
registration of the Surplus Shares in accordance with Sec-
tion 1.4 of the Registration Rights Agreement.
(iii) Each Class A Holder selling Surplus Shares
shall, promptly upon the conclusion of the Surplus Shares
Sale, deliver to the Company a notice stating that such
Surplus Shares Sale has been concluded and indicating the
total amount of consideration received therefrom (the "Total
Realized Amount") for the Surplus Shares sold in such sale.
Following receipt of such notice, the Company shall pay (a
"Supplementary Payment") to each Class A Holder selling
Surplus Shares the excess, if any, of the aggregate Formula
Price applicable to such Surplus Shares over the Total
Realized Amount (in each case as modified to comply with the
requirements of Section 9.2).
Section 7.5. Joint Action by FT and DT. (a) The
ratio of the aggregate Percentage Ownership Interest of one
of FT or DT (and its Qualified Subsidiaries) to the aggre-
gate Percentage Ownership Interest of the other of FT or DT
(and its Qualified Subsidiaries) (i) until the Investment
Completion Date shall be 1 to 1, and (ii) thereafter shall
not be greater than 3 to 2 (in each case, the "Applicable
Ratio").
(b) FT and DT shall vote, and shall cause each of
their respective Qualified Subsidiaries to vote, all shares
of Class A Stock held by them as a single block on all
matters.
Section 7.6. Compliance with Tax Laws. FT and DT
shall furnish the Company or its paying agent any cer-
tification, information return, documentation or other form
that they are entitled to furnish and that is required under
Applicable Law to establish the applicability of, or relief
or exemption from, United States withholding taxes.
Section 7.7. Compliance with Security Require-
ments. To the extent that, in connection with a United
States government contract, an agency of the United States
government or a contractor requires the Company to restrict
access to any properties or information reasonably related
to such contract on the basis of Applicable Law with respect
to United States national security matters and to the extent
that other Applicable Law requires the Company to restrict
access to any properties or information and, in accordance
with such restrictions, access to certain properties or
information may not be given to any Director elected by the
Class A Holders without appropriate security clearance, such
Director will not be given access to such properties or
information and may not participate in deliberations of the
Board of Directors or the board of directors of any of the
Company's Subsidiaries in which such information with re-
spect to such properties is disclosed. Any such exclusion
shall be reflected accurately in the minutes of such delib-
erations. Without limiting the generality of the foregoing,
no Class A Director shall (i) have access to classified
information or controlled unclassified information entrusted
to the Company except as permissible under the United States
Department of Defense Industrial Security Program (the
"DISP") and applicable United States laws and regulations,
(ii) either seek or accept classified information or con-
trolled unclassified information entrusted to the Company,
except as permissible under the DISP or applicable United
States laws and regulations, or (iii) fail to advise any
committee established by the Company to monitor compliance
with national security matters promptly if such Class A
Director reasonably believes any violations or attempted
violations of, or actions inconsistent with, Applicable Laws
or contractual provisions relating to national security
matters have occurred.
Section 7.8. Major Issuances. (a) At least 90
days before the consummation, directly or indirectly, by the
Company of any Major Issuance to be effected on or after the
second anniversary of the Initial Issuance Date and prior to
the fifth anniversary of the Initial Issuance Date, the
Company shall deliver to each Class A Holder a notice of
such proposed Major Issuance. If there is a written notice
signed by FT and DT disapproving such proposed Major Is-
suance within 75 days of the delivery of such notice and the
Company nevertheless effects such Major Issuance, the Class
A Holders may elect to be released from the Transfer
Restrictions or elect after the earlier of the Fixed Closing
Date and the Investment Completion Date, to maintain an
aggregate Committed Percentage of at least ten percent as
provided in subsection (b) of this Section 7.8.
(b) If the aggregate Committed Percentage of the
Class A Holders falls below ten percent because of a Major
Issuance, in addition to Equity Purchase Rights (if applica-
ble) and the rights under Section 2.5 of the Investment
Agreement (if applicable), within the later of (i) 180 days
after such Major Issuance, and (ii) 180 days after the Fixed
Closing Date, the Class A Holders may deliver to the Company
a written notice in which each Class A Holder commits to the
Company to purchase from third parties, within three years
after the later of such notice or the Investment Completion
Date, a number of shares of Common Stock sufficient to
increase the aggregate Committed Percentage of all Class A
Holders to at least ten percent based on the Voting Power of
the Company as at the date of such notice.
(c) Upon delivery of notice to the Company by
each of the Class A Holders following a Major Issuance com-
mitting each such Class A Holder not to exercise its Equity
Purchase Rights in respect of a Major Issuance or its
related rights provided in subsection (b) of this Sec-
tion 7.8, the Class A Holders shall automatically and with-
out any further action on their part be released from the
Transfer Restrictions.
Section 7.9. Participation by Class A Directors
in Certain Circumstances. If the Joint Venture Agreement is
terminated, the Company may exclude the Class A Directors
from deliberations of the Board of Directors that a majority
of the Independent Directors, in their good faith judgment,
believe involve (a) sensitive information relating to the
Company and its relationship to FT or DT or the Company's
activities that are competitive with the activities of FT or
DT, or (b) matters in which such Class A Directors or the
Class A Holders otherwise have conflicts of interest with
the Company. Any such exclusion shall be reflected accur-
ately in the minutes of such deliberations.
Section 7.10. Spin-offs. Prior to consummating
any Exempt Long Distance Asset Divestiture (before the end
of the Restricted Period described in Section 3.1(a)(i)
hereof) or Exempt Asset Divestiture (before the second
anniversary of the Initial Issuance Date) in each case
involving a Spin-off,
(a) the Company shall cause the entity whose
equity interests are to be distributed in such Spin-off
to
(i) if such Spin-off occurs after the Initial
Issuance Date and before the later to occur of the
date of the Optional Shares Closing and the
Investment Completion Date, execute an investment
agreement (or its equivalent) with respect to the
spun-off entity (the "Spin-Off Investment
Agreement") with FT, DT and any of its Qualified
Subsidiaries that are party to the Investment
Agreement at the time of such Spin-off containing
terms which are no less favorable to FT and DT
than those set forth in the Investment Agreement;
(ii) execute agreements with each of FT, DT
and their respective Qualified Subsidiaries at the
time of such Spin-off no less favorable to FT and
DT than this Agreement, the Registration Rights
Agreement, the Standstill Agreement, the FT In-
vestor Confidentiality Agreement and the DT In-
vestor Confidentiality Agreement (the "Principal
Investment Documents"); and
(iii) adopt bylaws no less favorable to FT and
DT than the Bylaws.
(b) each of FT, DT and their respective Qualified
Subsidiaries that are Class A Holders shall have been
afforded a reasonable opportunity (and in no event less
than 90 days) to review and approve such Principal In-
vestment Documents, following delivery of such
documents prepared in substantial conformity with the
requirements of this Section 7.10, provided that,
unless FT, DT and their respective Qualified
Subsidiaries shall have delivered a notice to the
Company, prior to the end of the forty-fifth day
following delivery of such documents, stating that such
documents were not prepared in substantial conformity
with the requirements of this Section 7.10, such
documents shall be deemed to have been prepared in
substantial conformity with this Section 7.10.
Following the expiration of the period provided in clause
(b) of this Section 7.10, each of FT, DT and their re-
spective Qualified Subsidiaries shall execute and deliver
the Spin-Off Investment Agreement (if applicable) and such
Principal Investment Documents, provided that if each such
party does not so execute and deliver such Principal
Investment Documents, the Company shall nonetheless have the
right to proceed with such Spin-off and the Company shall
have no obligation to provide to such Class A Holders secu-
rities of such Spin-off Entity with rights no less favorable
to the Class A Holders than those applicable to the Class A
Stock set forth in the Articles and the Bylaws. The rights
and obligations of the parties hereto under this Section
7.10 shall be suspended or terminate, and cease to be of any
further force or effect, (a) with respect to any proposed
Spin-off of a Subsidiary of the Company which, directly or
indirectly, owns Long Distance Assets, upon the suspension
or termination, as the case may be, of the rights of the
Class A Holders under Article III hereof; and (b) with
respect to any proposed Spin-off of a Subsidiary of the
Company other than a Subsidiary which, directly or in-
directly, owns Long Distance Assets, upon the suspension or
termination, as the case may be, of the rights of the Class
A Holders pursuant to Article VIII hereof.
Section 7.11. FCC Licenses. The Company shall
not hold directly any Licenses from the FCC, if the holding
of such Licenses by the Company would result in a Material
Adverse Effect on the Company and its Subsidiaries taken as
a whole.
Section 7.12. Issuance of Class A Stock. So long
as the Class A Holders own any shares of Class A Stock, the
Company shall not issue any shares of Class A Stock to any
Person other than FT, DT, their respective Qualified Sub-
sidiaries and Qualified Stock Purchasers.
Section 7.13. Defeasance of Fifth Series. If at
any time following the Initial Issuance Date, the consoli-
dated net worth of the Company and its Subsidiaries taken as
a whole, determined in accordance with Generally Accepted
Accounting Principles as applied in the Company's most re-
cent financial statements included in a filing with the SEC,
shall be less than $1 billion, the Company shall defease the
Fifth Series of the Preferred Stock, by any means reasonably
acceptable to FT and DT.
Section 7.14. Continuing Directors. The Company
shall maintain at least seven Continuing Directors on the
Board of Directors at all times.
Section 7.15. Long Distance Business. Except as
otherwise required or permitted by this Agreement, the Other
Investment Documents, the Articles as amended by the Amend-
ment or the Joint Venture Documents, the Company shall not
hold in the Local Exchange Division, the Cellular and Wire-
less Division or any other division of the Company other
than the Long Distance Division assets which are primarily
used, or held primarily for use, in or for the benefit of
the Long Distance Business, except for assets that in the
aggregate are not material to the operation of the Long
Distance Business.
Section 7.16. Intellectual Property. In any sale
of 51% of the Fair Market Value of the Long Distance Assets
required by the last sentence of Section 3.1(a) hereof, the
Company shall use its reasonable efforts to grant to such
Person a non-exclusive, perpetual and worldwide license upon
commercially reasonable terms to use all intellectual prop-
erty not included in the definition of Long Distance Assets
owned or licensed by the Company which is reasonably neces-
sary to utilize fully the Long Distance Assets so purchased;
provided, however, that the Company shall have no obligation
to license the "Sprint" brand name or any other brand names,
tradenames or trademarks owned or licensed by the Company or
any of its Subsidiaries.
Section 7.17. Rights Plan Events. The notice
described in Section 7(p) of the Class A Provisions, upon
the Distribution Date (as defined in the Rights Agreement),
shall constitute an irrevocable and continuing waiver of any
right that FT, DT or the Class A Holders may have to
disapprove the Cellular Spin-off under this Agreement, the
Articles, the Other Investment Documents or any document or
agreement relating thereto. If such notice is delivered,
then within 90 days following the Distribution Date the
Company and the Class A Holders shall execute a Spin-off
Investment Agreement and Principal Investment Documents with
respect to the Cellular Spin-off in accordance with Section
7.10 hereof, mutatis mutandis.
ARTICLE VIII
TERMINATION OF CERTAIN RIGHTS
(a) The rights of the Class A Holders under Arti-
cles IV, V and VI and Sections 7.3, 7.4, 7.8, 7.11 and 7.13
hereof shall terminate:
(i) if at any time after the Investment
Completion Date, the aggregate Committed Percentage of
the Class A Holders is below ten percent (x) for more
than 180 consecutive days or (y) immediately following
a Transfer of Class A Stock by a Class A Holder;
(ii) upon the conversion of all of the outstanding
shares of Class A Common Stock into shares of Common
Stock or a termination of the Fundamental Rights as to
all outstanding shares of Class A Preference Stock, in
either case pursuant to Sections 7(b), 7(c), 7(d) or
7(g) of the Class A Provisions;
(iii) upon a sale of all of the Venture Interests
of the Sprint Parties or the FT/DT Parties pursuant to
Section 17.2, 17.3, 17.4, 19.3, 20.6 or 20.11 of the
Joint Venture Agreement or on the date on which the
Joint Venture is otherwise terminated, in each case
other than due to an FT/DT Joint Venture Termination or
a Corporation Joint Venture Termination, provided that
the rights of the Class A Holders under Sections 7.3,
7.8(b) and 7.13 hereof and Article V hereof shall
terminate on the third anniversary of the date of such
sale or termination;
(iv) upon the consummation of a transaction in-
volving a Change of Control within the meaning of
clause (a) of the definition of Change of Control; or
(v) if at any time prior to the Investment Com-
pletion Date, the aggregate liquidation value of the
Class A Preference Stock is less than $1.5 billion as a
result of a Transfer of shares of Class A Preference
Stock by a Class A Holder (other than a Transfer
contemplated by Section 7.4(b)(i)(y) hereof).
(b) The rights of the Class A Holders under Arti-
cles III, IV, V and VI hereof, and Sections 7.3, 7.8, 7.13
and 7.15 hereof, shall terminate upon (i) the conversion of
all of the outstanding shares of Class A Common Stock into
shares of Common Stock or (ii) the termination of the Fun-
damental Rights as to all outstanding shares of Class A
Preference Stock, in either case pursuant to Section 7(h) of
the Class A Provisions.
(c) The rights of the Class A Holders under Arti-
cles IV and VI hereof and Sections 7.4, 7.8, 7.11 and 7.13
hereof shall be suspended and may not be exercised during
any period of time in which the rights provided to the
Class A Holders under Sections 4 (except Sections 4(a)(iii)
and 4(c)), 5, 6, 7 and 8 of the Class A Provisions are
suspended pursuant to Section 7(b) of the Class A Pro-
visions.
(d) The rights of a Qualified Stock Purchaser
under Articles IV, V and VI hereof and Sections 7.3, 7.4,
7.8, 7.11 and 7.13 hereof shall terminate upon (i) the con-
version of the outstanding shares of Class A Common Stock
owned by such Qualified Stock Purchaser into Common Stock
or, (ii) the termination of the Fundamental Rights as to the
shares of Class A Preference Stock owned by such Qualified
Stock Purchaser, in either case pursuant to Section 7(k) of
the Class A Provisions, and the rights of a Qualified Stock
Purchaser under Articles IV and VI hereof and Sections 7.4,
7.8, 7.11 and 7.13 hereof shall be suspended and may not be
exercised during any period of time in which the rights
provided to such Qualified Stock Purchaser under Sections 4
(except Sections 4(a)(iii) and 4(c)), 5, 6, 7 and 8 of the
Class A Provisions are suspended pursuant to Section 7(k) of
the Class A Provisions.
ARTICLE IX
TAX INDEMNIFICATION
Section 9.1. Indemnification for Company Pur-
chase. If the Company purchases Shares held by a Class A
Holder under Section 2.5 or 7.4 of this Agreement or Sec-
tion 2(f) of that portion of ARTICLE SIXTH of the Articles
entitled "GENERAL PROVISIONS RELATING TO ALL STOCK" or Sec-
tion 3(a) of the Class A Provisions (a "Company Purchase")
in the context where such Sections provide that such pur-
chase price or redemption price be modified in accordance
with this Article IX and as a result thereof such Class A
Holder (together with any Class A Holder described in Sec-
tion 9.2, an "Indemnitee") incurs U.S. federal income taxes
in excess of the U.S. federal income taxes it would have
incurred had it sold such Shares to a third party unrelated
to the Company or its Affiliates at the applicable price set
forth in such Section or Article (such sale to an unrelated
third party, an "Unrelated Party Sale" and such excess U.S.
federal income taxes, "Excess Taxes"), the Company shall in-
demnify and hold harmless such Indemnitee on an after-tax
basis from and against such Excess Taxes. For purposes of
the preceding sentence, the taxes that would have been
incurred in an Unrelated Party Sale shall be net of any
refund of Taxes that would have been obtained had with-
holding under Section 1445 of the Code (or any successor
provision) applied to such Unrelated Party Sale. If Excess
Taxes are imposed through withholding at the source, the
Company shall pay, in connection with the applicable Company
Purchase, such additional amounts as may be necessary such
that after deduction or withholding of all such Excess Taxes
(including taxes imposed on such additional amounts), the
Indemnitee receives the amount it would have received had no
such Excess Taxes been imposed. The Company shall promptly
furnish to the applicable Indemnitee an appropriate receipt
for the payment of any taxes imposed through withholding.
Section 9.2. Indemnification for Supplementary
Payments. If the Company makes a Supplementary Payment to a
Class A Holder in respect of Shares disposed of pursuant to
Section 7.4(d) of this Agreement or a Requested Sale Sup-
plementary Payment pursuant to Section 3(a) of the Class A
Provisions and as a result thereof such Class A Holder
incurs taxes in connection with the transaction contemplated
in such Section 7.4(d) or such Section 3(a), as the case may
be, in excess of the taxes it would have incurred had such
Class A Holder sold such Shares in an Unrelated Party Sale
for the Formula Price in the case of a transaction contem-
plated by Section 7.4 or for the aggregate Liquidation
Preference of such Shares in the case of a transaction
contemplated by such Section 3(a) (such excess taxes, "Sec-
tion 9.2 Excess Taxes"), the Company shall indemnify and
hold harmless such Class A Holder on an after-tax basis from
and against such Section 9.2 Excess Taxes. For purposes of
the preceding sentence, the taxes that would have been
incurred in an Unrelated Party Sale at the Formula Price or
at the aggregate Liquidation Preference, as the case may be,
shall be net of any refund of taxes that would have been
obtained had withholding under Section 1445 of the Code (or
any successor provision) applied to such Unrelated Party
Sale.
Section 9.3. Rebate of Indemnity. Within nine
months after the end of each of the five consecutive taxable
years of an Indemnitee starting with the taxable year in
which the Company has paid any amounts pursuant to Sections
9.1 or 9.2 in respect of such Indemnitee (a "Company Tax
Payment"), such Indemnitee shall determine whether it is in
a better after-tax economic position as a result of such
Company Tax Payment than it would have been in had such
Indemnitee (a) in the case of a Company Tax Payment pursuant
to Section 9.1, sold the Shares purchased by the Company in
an Unrelated Party Sale or (b) in the case of a Company Tax
Payment pursuant to Section 9.2, sold the Shares disposed of
pursuant to Section 7.4(d) of this Agreement or Section 3(a)
of the Class A Provisions, as the case may be, in an Unre-
lated Party Sale at the Formula Price in the case of a
disposition pursuant to Section 7.4(d) or at the aggregate
Liquidation Preference of such Shares in the case of a
disposition pursuant to such Section 3(a) (the amount of
such difference in after-tax economic positions under the
preceding clauses (a) or (b), a "Windfall Benefit"). The
applicable Indemnitee shall promptly thereafter pay to the
Company all or a portion of such Windfall Benefit so that,
after taking into account all prior such payments and the
tax consequences of making all such payments, such Indem-
nitee is in the same after-tax economic position that it
would have been in had it (a) in the case of a Company Tax
Payment pursuant to Section 9.1, sold the Shares purchased
by the Company in an Unrelated Party Sale or (b) in the case
of a Company Tax Payment pursuant to Section 9.2, sold the
Shares disposed of pursuant to Section 7.4(d) of this Agree-
ment in an Unrelated Party Sale at the Formula Price, or at
the aggregate Liquidation Preference of such Shares in the
case of a disposition pursuant to Section 3(a) of the Class
A Provisions. In the case of a Windfall Benefit relating to
an increase in the tax basis in shares of Class A Stock of
an Indemnitee attributable to a Company Tax Payment (such
Windfall Benefit, a "Basis Windfall"), the preceding
sentence shall be applied without regard to the five year
time limitation contained in the first sentence of this
paragraph, provided, however, that no Indemnitee shall be
required after the five year limit contained in the first
sentence of this paragraph to pay any amount to the Company
on account of such Basis Windfall unless the Company noti-
fies such Indemnitee in writing of the existence of such
Basis Windfall within three months after the date such
Indemnitee disposes of Shares in a transaction in which such
Basis Windfall results in a savings of U.S. taxes. In no
event shall the amount payable by any Indemnitee to the
Company under this paragraph exceed the amount of the Com-
pany Tax Payment. If any applicable Indemnitee subsequently
determines (within five years after the end of the taxable
year of the Company in which the Indemnitee has paid a
Windfall Benefit to the Company) that the amount of such
Windfall Benefit has been reduced because of an audit
adjustment, disallowance of tax credits, a carryback or
carryforward of losses or credits or for any other reason,
the Company shall promptly after notification thereof make a
reconciling payment to such Indemnitee in an amount nec-
essary so that such Indemnitee is in the same after-tax
economic position, after taking into account the tax con-
sequences of such reconciling payment, that such Indemnitee
would have been in had it (a) in the case of a Company Tax
Payment pursuant to Section 9.1, sold the Shares purchased
by the Company in an Unrelated Party Sale or (b) in the case
of a Company Tax Payment pursuant to Section 9.2, sold the
Shares disposed of pursuant to Section 7.4(d) of this Agree-
ment or Section 3(a) of the Class A Provisions in an Unre-
lated Party Sale at the Formula Price in the case of a
disposition pursuant to such Section 7.4(d) or the aggregate
Liquidation Preference of such Shares in the case of a
disposition pursuant to such Section 3(a).
Section 9.4. Exclusions from Indemnity. Not-
withstanding Sections 9.1 and 9.2, the Company shall not be
required to indemnify an Indemnitee under this Agreement for
any portion of Excess Taxes or Section 9.2 Excess Taxes to
the extent that such portion would not be imposed on such
Indemnitee but for one or more of the following events:
(a) the failure of such Indemnitee to qualify for
the benefits of the applicable income tax
treaty between the United States and the
country of the Indemnitee's residence;
(b) the failure of such Indemnitee to supply the
Company with any form or other similar docu-
ment that it is entitled to supply and that
is required to obtain or claim available
benefits of an applicable income tax treaty
or relief that may be provided under the Code
with respect to Excess Taxes or Section 9.2
Excess Taxes, provided, that this Section
9.4(b) shall not apply unless the Company
requests from such Indemnitee such form or
similar document in writing within a
reasonable period of time before the relevant
Company Purchase, Supplementary Payment or
Requested Sale Supplementary Payment takes
place;
(c) the imposition of Excess Taxes or Section 9.2
Excess Taxes on a transferee or assignee of
an original Class A Holder's Shares, but only
to the extent the amount of Excess Taxes or
Section 9.2 Excess Taxes required to be paid
by the Company exceeds the amount of Excess
Taxes or Section 9.2 Excess Taxes that would
have been required to be paid by the Company
absent any transfer of such original Class A
Holder's Shares, provided, that this Section
9.4(c) shall not apply if the transferee or
assignee is a Qualified Subsidiary and has
held such Shares for at least six months
prior to the date such Qualified Subsidiary
first undertook those discussions or negotia-
tions that resulted in the Company's right to
purchase such Shares pursuant to Section 2.5,
has held such Shares prior to the date that
the FCC has requested that the Company reduce
its foreign ownership pursuant to Section 310
in the case of a transaction under Section
7.4, or in the case of a transaction under
Section 3(a) of the Class A Provisions has
held such shares prior to the earlier of (x)
the date on which all conditions necessary to
establish the Conversion Date as a date
certain pursuant to Section 3(a) of the Class
A Provisions have been satisfied, and (y) the
date on which the Company notifies each of FT
and DT in good faith that it is reasonably
likely that upon conversion, the shares of
Class A Preference Stock will convert into
Class A Common Stock or Common Stock
representing in excess of 20% of the Voting
Power of the Company (for purposes of this
Section 9.4(c), a Share received upon a con-
version shall be considered held by a Qual-
ified Subsidiary during the period such Qual-
ified Subsidiary held the Share that was
surrendered in connection with such con-
version);
(d) penalties arising solely from actions taken
by such Indemnitee in connection with unre-
lated transactions; and
(e) the Excess Taxes or Section 9.2 Excess Taxes
are imposed on the Company Purchase, Sup-
plementary Payment or Requested Sale
Supplementary Payment solely because such In-
demnitee conducts unrelated activities in the
United States sufficient to cause such In-
demnitee to be treated as engaged in a trade
or business in the United States for U.S.
federal income tax purposes and such Indem-
nitee's income or gain from the Company Pur-
chase, Supplementary Payment or Requested
Sale Supplementary Payment to be treated as
effectively connected with that U.S. trade or
business.
Section 9.5. Consequences of Assignment. If the
Company assigns to a third party its rights hereunder to
effect a Company Purchase, the Company shall remain liable
(and such third party shall not be liable) under the pro-
visions of this Article with respect to the purchase, Sup-
plementary Payment or Requested Sale Supplementary Payment
by the third party (taking into account the actual tax
effect to the Indemnitee of such third party purchase or
Supplementary Payment or Requested Sale Supplementary Pay-
ment in determining the taxes incurred in excess of the
taxes the Indemnitee would have incurred had the shares been
sold in an Unrelated Party Sale), and the "Excess Taxes" and
Section 9.2 Excess Taxes in such determination shall be
computed by taking into account not only U.S. taxes but also
any taxes imposed by any other jurisdiction to the extent
such taxes would not have been imposed absent such an
assignment.
Section 9.6. Verification. The chief tax officer
of any party hereto making or seeking a payment pursuant to
this Article IX shall furnish to the other applicable party
hereto a written statement describing in reasonable detail
the taxes which are the subject of such payment and the
computation of the amount so payable. In case of any dis-
pute among the applicable parties hereto regarding the
amount of any payment under this Article IX, the applicable
parties shall negotiate in good faith to resolve such dis-
pute. Notwithstanding Section 11.5(b) of this Agreement, if
such dispute cannot be resolved by the parties hereto, then
such dispute shall be referred to an independent accounting
firm of international standing reasonably acceptable to the
parties hereto in question. The decision of such accounting
firm shall be conclusive absent manifest error. The cost of
employing such accounting firm shall be borne in equal parts
by the parties to such dispute.
Section 9.7. Contest Rights. (a) Each Indem-
nitee shall exert its best efforts to inform the Company,
either orally or in writing, of any requests received by
such Indemnitee for information from, or potential claims
by, the U.S. Internal Revenue Service regarding the U.S.
taxation of a Company Purchase, Supplementary Payment or
Requested Sale Supplementary Payment.
(b) If the Company provides an Indemnitee with a
written statement regarding the manner in which the Company
shall characterize a Company Purchase, Supplementary Payment
or Requested Sale Supplementary Payment for U.S. Federal
income tax purposes, such Indemnitee shall thereafter treat
such Company Purchase, Supplementary Payment or Requested
Sale Supplementary Payment for U.S. Federal income tax
purposes in a manner consistent with such characterization
by the Company, provided that such Indemnitee shall have no
such obligation of consistent characterization if such
Indemnitee receives an opinion from U.S. tax counsel of
national standing to the effect that such characterization
by the Indemnitee lacks substantial authority.
(c) If an Indemnitee receives written notice from
the U.S. Internal Revenue Service (including, without limit-
ation, in a preliminary or "30-day" letter) that such In-
demnitee is liable for Excess Taxes or Section 9.2 Excess
Taxes, such Indemnitee shall promptly notify the Company in
writing of such fact and shall permit the Company to assume
control over the handling, disposition and settlement of the
Excess Taxes issue or Section 9.2 Excess Taxes issue at the
examination, administrative and judicial levels in the U.S.
Such Indemnitee shall be entitled to participate in all
meetings with the U.S. Internal Revenue Service relating to
the Excess Taxes issue or Section 9.2 Excess Taxes issue and
to review and consult on all submissions to the U.S. In-
ternal Revenue Service or any court with respect to the
Excess Taxes issue or Section 9.2 Excess Taxes issue. Such
Indemnitee shall cooperate with the Company, as reasonably
requested, in connection with any such examination or ad-
ministrative or judicial proceedings, including, without
limitation, by way of signing and filing protests, peti-
tions, notices of appeal and court pleadings and executing
powers of attorney to enable the Company to represent the
interests of the Indemnitee in, and to assume control over,
relevant examinations or proceedings insofar as they relate
to Excess Taxes or Section 9.2 Excess Taxes; provided,
however, that expenses incurred by such Indemnitee in con-
nection with actions taken at the request of the Company
shall be reimbursed to such Indemnitee by the Company on an
after-tax basis. The Company shall be entitled to employ
counsel of its choice in connection with any of the matters
described in this Article and shall bear all expenses as-
sociated with the employment of such counsel. The pro-
visions of this paragraph shall also apply to a claim for
refund of Excess Taxes or Section 9.2 Excess Taxes paid or
withheld. Notwithstanding the foregoing provisions of this
Section 9.7(c), if the Company assumes control over an
Excess Taxes issue or Section 9.2 Excess Taxes issue at the
examination, administrative or judicial levels, the Company
shall not be entitled to settle or compromise any such claim
except upon the written consent of the applicable Indem-
nitee. If an applicable Indemnitee fails to grant such
consent, the Company shall not be required to pay any
amounts in excess of the amount it would have paid had such
Indemnitee consented to such settlement or compromise, and
such Indemnitee shall bear any further cost or expense of
contesting such Excess Taxes issue or Section 9.2 Excess
Taxes issue.
ARTICLE X
U.S. REAL PROPERTY TAX MATTERS
Section 10.1. Notification. The Company shall
notify each Class A Holder whenever a FIRPTA Determination
shall be required under the applicable rules of the Code and
regulations thereunder. Such notification shall, to the
extent practical, be made sufficiently far in advance of any
date on which the actions described in Section 10.3 will be
necessary so as to allow for reasonable time for the per-
formance of the legal, accounting and valuation analyses
described in this Article X.
Section 10.2. Control of FIRPTA Determination. If
one or more Class A Holders notify the Company that they
desire to control a FIRPTA Determination (each a "Notifying
Class A Holder"):
(a) the Company shall cooperate fully with such
Notifying Class A Holders and their legal, accounting
and valuation advisors with respect to such FIRPTA
Determination. Such cooperation shall include making
available information and knowledgeable personnel as
reasonably requested as well as making reasonable
representations necessary for such advisors to render
their opinions and judgments described in this Arti-
cle X, to the extent that the Company may make such
representations in its good faith judgment. The Com-
pany shall not, however, be obligated to make any
representations as to the fair market value of assets;
and
(b) the Company shall for purposes of such FIRPTA
Determination classify as non-real property each of the
assets identified as non-real property on Exhibit D,
provided that there has been no change in law, official
interpretation or guidance (a "Change in Law") with
respect to such classification occurring after the date
hereof. The Company and the Notifying Class A Holders
shall endeavor to agree as to the classification of any
assets not described as non-real property on Exhibit D
(and as to any assets so described but as to which
there has been a Change in Law) but, in the absence of
such agreement, the Company shall accept the reasonable
opinion (containing analysis, if appropriate) of
nationally recognized accountants or tax counsel chosen
by such Notifying Class A Holders as to whether it is
reasonable to assert that a given asset should or
should not be considered to constitute real property
for purposes of such FIRPTA Determination.
Section 10.3. Issuance of Certification; Related
Matters. In connection with any FIRPTA Determination re-
ferred to in Section 10.2, the Company shall, upon the
presentation by the Notifying Class A Holders of a reason-
able opinion (containing analysis, if appropriate) of
nationally recognized accountants or tax counsel to the
effect that it is reasonable to assert that the Company is
not, and has not at any time during the preceding five years
(or shorter period during which any such Notifying Class A
Holders held Shares) been, a U.S. real property holding
corporation as defined under the Code and the regulations
thereunder and as tested on the determination dates
described in U.S. Treasury Regulation Section 1.897-2(c)
(or any successor provision):
(a) in the case of a disposition by a Notifying
Class A Holder of Shares to a third party (related or
unrelated), issue the statement described in U.S.
Treasury Regulation 1.897-2 (or any successor pro-
vision) indicating that the Shares do not constitute a
U.S. real property interest (as defined in the Code and
the regulations thereunder) and timely provide appro-
priate notice to the U.S. Internal Revenue Service; and
(b) in the case of any redemption or exchange
(including a deemed exchange) by the Company of Shares
held by any such Notifying Class A Holders, comply with
all requirements described in this Article X and re-
frain from withholding any U.S. tax from the proceeds
of such redemption or exchange pursuant to Section 1445
of the Code (or any successor provision).
In rendering any opinion described in this Section
10.3, the accountants or tax counsel for the Notifying Class
A Holders shall be entitled to rely in their discretion upon
advice of nationally recognized valuation experts as they
deem appropriate and upon information and representations
provided by the Company pursuant to this Article X.
Section 10.4. Advisory Costs. The Company shall
pay 50% of all reasonable costs of legal, accounting and
valuation services incurred by any Notifying Class A Holder
in connection with any FIRPTA Determination.
Section 10.5. Indemnity. Each Notifying Class A
Holder with respect to any FIRPTA Determination shall sev-
erally, but not jointly, reimburse the Company on an after-tax
basis for (a) any tax under Section 897 of the Code or
any successor provision (a "FIRPTA Tax") of such Notifying
Class A Holder that the U.S. Internal Revenue Service col-
lects from the Company, including any applicable interest
and penalties imposed with respect to such FIRPTA Tax, and
(b) any FIRPTA Tax (including applicable interest and pen-
alties) of the third party described in Section 10.3(a)
collected from or imposed on the Company, or any penalties
or interest imposed directly on the Company, with respect to
such Notifying Class A Holder, but in the case of clause (b)
of this Section 10.5, such reimbursement obligation shall
apply only to taxes, interest and penalties arising as a
result of the Company's taking any action under Section
10.2(b) or Section 10.3 hereof with respect to such Noti-
fying Class A Holder based upon the opinion provided by such
Notifying Class A Holder pursuant to Section 10.2 or 10.3.
Section 10.6. Contest Rights. (a) The Company
shall exert its best efforts to inform each Class A Holder,
either orally or in writing, of any requests received by the
Company for information from, or potential claims by, the
U.S. Internal Revenue Service regarding any matter that
could result in liability to any Class A Holder under Sec-
tion 10.5 hereof.
(b) If the Company receives written notice from
the U.S. Internal Revenue Service (including, without lim-
itation, in a preliminary or "30-day" letter) regarding any
item for which any Class A Holder may be liable under Sec-
tion 10.5 hereof, the Company shall promptly notify such
Class A Holder in writing of such fact and shall permit the
Class A Holders so notified to assume control over the
handling, disposition and settlement of any such matter at
the examination, administrative and judicial levels. The
Company shall be entitled to participate in all meetings
with the U.S. Internal Revenue Service relating to such
issue and to review and consult on all submissions to the
U.S. Internal Revenue Service or any court with respect to
any such issue. The Company shall cooperate with such Class
A Holders, as reasonably requested, in connection with any
such examination or administrative or judicial proceedings,
including, without limitation, by way of signing and filing
protests, petitions, notices of appeal and court pleadings
and executing powers of attorney to enable such Class A
Holders to represent the interests of the Company in, and to
assume control over, relevant examinations or proceedings
insofar as they relate to the issues described in this
Article; provided, however, that expenses incurred by the
Company in connection with actions taken at the request of
the Class A Holders shall be reimbursed to the Company by
such Class A Holders on an after-tax basis. The Class A
Holders shall be entitled to employ counsel of their choice
in connection with any of the matters described in this
Article X and shall bear all expenses associated with the
employment of such counsel. The provisions of this para-
graph shall also apply to any claim for a refund of taxes
paid or withheld in connection with the matters described in
this Article X. Notwithstanding the foregoing provisions of
this Section 10.6(b), if any Class A Holders assume control
over any issue concerning the liability of the Company
described in this Article at the examination, administrative
or judicial levels, such Class A Holders shall not be
entitled to settle or compromise any such claim except upon
the written consent of the Company. If the Company fails to
grant such consent, such Class A Holders shall not be re-
quired to pay any amounts pursuant to Section 10.5 in excess
of the amounts they would have paid had the Company con-
sented to such settlement or compromise, and the Company
shall bear any further cost or expense of contesting any
such issue.
ARTICLE XI
MISCELLANEOUS
Section 11.1. Notices. All notices and other
communications required or permitted by this Agreement shall
be made in writing in the English language and any such
notice or communication shall be deemed delivered when
delivered in person, transmitted by telex or telecopier, or
seven days after it has been sent by air mail, as follows:
FT: 6 place d'Alleray
75505 Paris Cedex 15
France
Attn: Executive Vice President,
International
Tel: (33-1) 44-44-19-94
Fax: (33-1) 46-54-53-69
with a copy to:
Debevoise & Plimpton
875 Third Avenue
New York, New York 10022
U.S.A.
Attn: Louis Begley, Esq.
Tel: (212) 909-6273
Fax: (212) 909-6836
DT: Friedrich-Ebert-Allee 140
D-53113 Bonn
Germany
Attn: Chief Executive Officer
Tel: 49-228-181-9000
Fax: 49-228-181-8970
with a copy to:
Mayer, Brown & Platt
2000 Pennsylvania Avenue, N.W.
Suite 6500
Washington, D.C. 20006
Attn: Werner Hein, Esq.
Tel: (202) 778-8726
Fax: (202) 861-0473
Sprint: 2330 Shawnee Mission
Parkway, East Wing
Westwood, Kansas 66205
U.S.A.
Attn: General Counsel
Tel: (913) 624-8440
Fax: (913) 624-8426
with a copy to:
King & Spalding
191 Peachtree Street
Atlanta, Georgia 30303
U.S.A.
Attn: Bruce N. Hawthorne, Esq.
Tel: (404) 572-4903
Fax: (404) 572-5146
The parties to this Agreement shall promptly notify each
other in the manner provided in this Section 11.1 of any
change in their respective addresses. A notice of change of
address shall not be deemed to have been given until re-
ceived by the addressee. Communications by telex or tele-
copier also shall be sent concurrently by mail, but shall in
any event be effective as stated above.
Section 11.2. Waiver, Amendment, etc. This
Agreement may not be amended or supplemented, and no waivers
of or consents to departures from the provisions hereof
shall be effective, unless set forth in a writing signed by,
and delivered to, all the parties hereto. No failure or
delay of any party in exercising any power or right under
this Agreement will operate as a waiver thereof, nor will
any single or partial exercise of any right or power, or any
abandonment or discontinuance of steps to enforce such right
or power, preclude any other or further exercise thereof or
the exercise of any other right or power.
Section 11.3. No Partnership. This Agreement is
not intended, nor should anything herein be construed, to
create the relationship of partners, joint venturers, prin-
cipal and agent, or other fiduciary relationship among the
Class A Holders and the Company. Except as expressly set
forth herein, none of the Class A Holders will have any
authority to represent or to bind the other Class A Holder
or Holders or the Company in any manner whatsoever, and each
Class A Holder will be solely responsible and liable for its
own acts.
Section 11.4. Binding Agreement; Assignment; No
Third Party Beneficiaries. This Agreement will be binding
upon and inure to the benefit of the parties hereto and
their successors (including, without limitation, any
successor of FT in a privatization) and permitted assigns.
Except as set forth herein and by operation of law, no party
to this Agreement may assign or delegate all or any portion
of its rights, obligations or liabilities under this
Agreement without the prior written consent of each other
party to this Agreement. Nothing expressed or implied
herein is intended or will be construed to confer upon or to
give to any third party any rights or remedies by virtue
hereof. In the event of a reorganization of FT pursuant to,
as a result of or in connection with, a privatization, the
corporation or other entity formed to continue the business
activities of FT shall assume the rights and obligations of
FT under this Agreement.
SECTION 11.5. GOVERNING LAW; DISPUTE RESOLUTION;
EQUITABLE RELIEF. (a) THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK (REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN
UNDER APPLICABLE PRINCIPLES OF CONFLICTS OF LAW).
(b) EXCEPT AS PROVIDED IN ARTICLE IX HEREOF, EACH
PARTY TO THIS AGREEMENT IRREVOCABLY CONSENTS AND AGREES THAT
ANY LEGAL ACTION, SUIT OR PROCEEDING BY IT AGAINST ANY OF
THE OTHER PARTIES WITH RESPECT TO ITS RIGHTS, OBLIGATIONS OR
LIABILITIES UNDER OR ARISING OUT OF OR IN CONNECTION WITH
THIS AGREEMENT SHALL BE BROUGHT BY SUCH PARTY ONLY IN THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK OR, IN THE EVENT (BUT ONLY IN THE EVENT) SUCH COURT
DOES NOT HAVE SUBJECT MATTER JURISDICTION OVER SUCH ACTION,
SUIT OR PROCEEDING, IN THE COURTS OF THE STATE OF NEW YORK
SITTING IN NEW YORK CITY, AND EACH PARTY TO THIS AGREEMENT
HEREBY IRREVOCABLY ACCEPTS AND SUBMITS TO THE JURISDICTION
OF EACH OF THE AFORESAID COURTS IN PERSONAM, WITH RESPECT TO
ANY SUCH ACTION, SUIT OR PROCEEDING (INCLUDING, WITHOUT
LIMITATION, CLAIMS FOR INTERIM RELIEF, COUNTERCLAIMS,
ACTIONS WITH MULTIPLE DEFENDANTS AND ACTIONS IN WHICH SUCH
PARTY IS IMPLED). EACH PARTY HERETO IRREVOCABLY AND UNCON-
DITIONALLY WAIVES ANY RIGHT THAT IT MAY HAVE TO A JURY TRIAL
IN ANY LEGAL ACTION, SUIT OR PROCEEDING WITH RESPECT TO, OR
ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT. EACH
OF FT AND DT HEREBY IRREVOCABLY DESIGNATES CT CORPORATION
SYSTEM (IN SUCH CAPACITY, THE "PROCESS AGENT"), WITH AN
OFFICE AT 1633 BROADWAY, NEW YORK, NEW YORK 10019, AS ITS
DESIGNEE, APPOINTEE AND AGENT TO RECEIVE, FOR AND ON ITS
BEHALF SERVICE OF PROCESS IN SUCH JURISDICTION IN ANY LEGAL
ACTION OR PROCEEDINGS WITH RESPECT TO THIS AGREEMENT, AND
SUCH SERVICE SHALL BE DEEMED COMPLETE UPON DELIVERY THEREOF
TO THE PROCESS AGENT, PROVIDED THAT IN THE CASE OF ANY SUCH
SERVICE UPON THE PROCESS AGENT, THE PARTY EFFECTING SUCH
SERVICE SHALL ALSO DELIVER A COPY THEREOF TO FT AND DT IN
THE MANNER PROVIDED IN SECTION 11.1. FT AND DT SHALL TAKE
ALL SUCH ACTION AS MAY BE NECESSARY TO CONTINUE SAID AP-
POINTMENT IN FULL FORCE AND EFFECT OR TO APPOINT ANOTHER
AGENT SO THAT FT AND DT WILL AT ALL TIMES HAVE AN AGENT FOR
SERVICE OF PROCESS FOR THE ABOVE PURPOSES IN NEW YORK, NEW
YORK. IN THE EVENT OF THE TRANSFER OF ALL OR SUBSTANTIALLY
ALL OF THE ASSETS AND BUSINESS OF THE PROCESS AGENT TO ANY
OTHER CORPORATION BY CONSOLIDATION, MERGER, SALE OF ASSETS
OR OTHERWISE, SUCH OTHER CORPORATION SHALL BE SUBSTITUTED
HEREUNDER FOR THE PROCESS AGENT WITH THE SAME EFFECT AS IF
NAMED HEREIN IN PLACE OF CT CORPORATION SYSTEM. EACH OF FT
AND DT FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PRO-
CESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH
ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED AIRMAIL, POSTAGE PREPAID, TO SUCH PARTY AT ITS
ADDRESS SET FORTH IN THIS AGREEMENT, SUCH SERVICE OF PROCESS
TO BE EFFECTIVE UPON ACKNOWLEDGMENT OF RECEIPT OF SUCH
REGISTERED MAIL. NOTHING HEREIN SHALL AFFECT THE RIGHT OF
ANY PARTY TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
APPLICABLE LAW. EACH OF FT AND DT EXPRESSLY ACKNOWLEDGES
THAT THE FOREGOING WAIVER IS INTENDED TO BE IRREVOCABLE
UNDER THE LAWS OF THE STATE OF NEW YORK AND OF THE UNITED
STATES OF AMERICA.
(c) EACH PARTY HERETO AGREES THAT MONEY DAMAGES
WOULD NOT BE A SUFFICIENT REMEDY FOR THE OTHER PARTIES HERE-
TO FOR ANY BREACH OF THIS AGREEMENT BY IT, AND THAT IN ADDI-
TION TO ALL OTHER REMEDIES THE OTHER PARTIES HERETO MAY
HAVE, THEY SHALL BE ENTITLED TO SPECIFIC PERFORMANCE AND TO
INJUNCTIVE OR OTHER EQUITABLE RELIEF AS A REMEDY FOR ANY
SUCH BREACH. EACH PARTY HERETO AGREES NOT TO OPPOSE THE
GRANTING OF SUCH RELIEF IN THE EVENT A COURT DETERMINES THAT
SUCH A BREACH HAS OCCURRED, AND TO WAIVE ANY REQUIREMENT FOR
THE SECURING OR POSTING OF ANY BOND IN CONNECTION WITH SUCH
REMEDY.
Section 11.6. Severability. The invalidity or
unenforceability of any provision hereof in any jurisdiction
will not affect the validity or enforceability of the re-
mainder hereof in that jurisdiction or the validity or en-
forceability of this Agreement, including that provision, in
any other jurisdiction. To the extent permitted by Applic-
able Law, each party hereto waives any provision of Applic-
able Law that renders any provision hereof prohibited or
unenforceable in any respect. If any provision of this
Agreement is held to be unenforceable for any reason, it
shall be adjusted rather than voided, if possible, in order
to achieve the intent of the parties to this Agreement to
the extent possible.
Section 11.7. Translation. The parties hereto
have negotiated both this Agreement and the Memorandum of
Understanding, dated June 14, 1994 (the "MOU"), among each
of the parties hereto, in the English language, and have
prepared successive drafts and the definitive texts of the
MOU and this Agreement in the English language. For pur-
poses of complying with the loi n 94-665 du 4 aout 1994
relative a l'emploi de la langue francaise, the parties
hereto have prepared a French version of this Agreement,
which French version was executed and delivered simulta-
neously with the execution and delivery of the English ver-
sion hereof, such English version having likewise been exe-
cuted and delivered. The parties deem the French and
English versions of this Agreement to be equally authorita-
tive.
Section 11.8. Table of Contents; Headings; Coun-
terparts. The table of contents and the headings in this
Agreement are for convenience of reference only and will not
affect the construction of any provisions hereof. This
Agreement may be executed in one or more counterparts, each
of which when so executed and delivered will be deemed an
original but all of which will constitute one and the same
Agreement.
Section 11.9. Entire Agreement. This Agreement
and the Other Investment Documents embody the entire agree-
ment and understanding of the parties hereto in respect of
the subject matter contained herein, provided that this
provision shall not abrogate (a) any other written agreement
between the parties hereto, executed simultaneously with
this Agreement, or (b) the understanding set forth in Item 1
of Schedule 2 to that certain memorandum dated June 22, 1995
among the Company, FT and DT. This Agreement supersedes all
prior agreements and understandings between the parties with
respect to such subject matter, except as so provided in the
preceding sentence.
Section 11.10. Waiver of Immunity. Each of FT
and DT agrees that, to the extent that it or any of its
property is or becomes entitled at any time to any immunity
on the grounds of sovereignty or otherwise based upon its
status as an agency or instrumentality of government from
any legal action, suit or proceeding or from set off or
counterclaim relating to this Agreement from the jurisdic-
tion of any competent court described in Section 11.5, from
service of process, from attachment prior to judgment, from
attachment in aid of execution of a judgment, 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 expressly, irrevocably and unconditionally
waives, and agrees not to plead or claim, any such immunity
with respect to such matters arising with respect to this
Agreement or the subject matter hereof or thereof (including
any obligation for the payment of money). Each of FT and DT
agrees that the waiver in this provision 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 con-
stitute a present waiver of immunity at any time any action
is initiated against FT or DT with respect to this Agree-
ment.
Section 11.11. Board Membership. (a) FT con-
firms that its present intention is to nominate its Chairman
of the Board to be a Class A Director.
(b) DT confirms that its present intention is to
nominate its Vorstandsvorsitzender to be a Class A Director.
Section 11.12. Effect of Conversion. (a) If all
of the shares of Class A Common Stock shall have been con-
verted into Common Stock or if there is a termination of
Fundamental Rights as to all outstanding shares of Class A
Preference Stock, in either case pursuant to Section 7 of
the Class A Provisions, each share of Class A Stock to have
been issued by the Company thereafter pursuant to this
Agreement shall (i) in the case of Class A Common Stock,
instead be issued as one duly issued, fully paid and non-
assessable share of Common Stock, and (ii) in the case of
Class A Preference Stock, instead be issued as that number
of duly issued, fully paid and nonassessable shares of
Common Stock equal to the number of Class A Conversion
Shares related to one share of Class A Preference Stock
outstanding immediately prior to the date of issuance.
(b) If all of the shares of Class A Common Stock
held by a Qualified Stock Purchaser shall have been convert-
ed into Common Stock or if there is a termination of Fun-
damental Rights as to shares of Class A Preference Stock
owned by such Qualified Stock Purchaser, in either case
pursuant to Section 7 of the Class A provisions, each share
of Class A Stock to have been issued by the Company to such
Qualified Stock Purchaser pursuant to this Agreement shall
(i) in the case of Class A Common Stock, instead be issued
as one duly issued, fully paid and nonassessable share of
Common Stock, and (ii) in the case of Class A Preference
Stock, instead be issued as that number of duly issued,
fully paid and nonassessable shares of Common Stock equal to
the number of Class A Conversion Shares related to one share
of Class A Preference Stock outstanding immediately prior to
the date of issuance.
Section 11.13. Continuing Director Approval.
Where Continuing Director approval is otherwise explicitly
required under this Agreement with respect to a transaction
or determination on the part of the Company, such approval
shall not be required if (a) the Fair Price Provisions have
been deleted in their entirety, (b) the Fair Price Pro-
visions have been modified so as explicitly not to apply to
any Class A Holder, or they have been modified in a manner
reasonably satisfactory to FT and DT so as explicitly not to
apply to any transactions with any Class A Holder
contemplated by this Agreement or by the Other Investment
Documents or the Articles as amended by the Amendment, (c)
the transaction in question is not a "Business Combination"
within the meaning of the Fair Price Provisions, or (d) the
Class A Holder that is a party to the transaction, along
with its Affiliates (as such term is defined in Rule 12b-2
under the Securities Exchange Act of 1934, as in effect on
October 1, 1982) and Associates (as such term is defined in
Rule 12b-2 under the Securities Exchange Act of 1934, as in
effect on October 1, 1982), is not an "Interested
Stockholder" or an "Affiliate" of an "Interested
Stockholder" within the meaning of the Fair Price
Provisions. Where this Agreement provides that Continuing
Director approval is explicitly required to undertake a
transaction or make a determination on the part of the
Company, the Company shall not undertake such transaction or
make such determination unless it first delivers a
certificate, signed by a duly authorized officer of the
Company, to each of FT and DT, certifying that such approval
either has been obtained or is not required as set forth in
the preceding sentence, and FT shall be entitled to rely on
such certificate.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed as of the date first
above written.
SPRINT CORPORATION
By:________________________
Name:
Title:
FRANCE TELECOM
By:________________________
Name:
Title:
DEUTSCHE TELEKOM AG
By:________________________
Name:
Title:
<PAGE>
Exhibit 10(c)
STANDSTILL AGREEMENT
THIS STANDSTILL AGREEMENT (this "Agreement") dated as of July
31, 1995 by and among SPRINT CORPORATION, a corporation formed
under the laws of Kansas ("Sprint"), FRANCE TELECOM, an exploitant
public formed under the laws of France ("FT"), and DEUTSCHE
TELEKOM AG, an Aktiengesellschaft formed under the laws of Germany
("DT");
W I T N E S S E T H:
WHEREAS, Sprint, FT and DT have entered into that certain
Investment Agreement dated as of the date hereof (the "Investment
Agreement") pursuant to which FT and DT have agreed to purchase
shares of capital stock of Sprint; and
WHEREAS, as a condition to its entering into the Investment
Agreement, Sprint has required that FT and DT enter into this
Agreement, which contains certain restrictions on purchases of
Sprint capital stock by FT and DT and their respective Affiliates
and Associates and certain other limitations on FT and DT and
their respective Affiliates and Associates.
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements contained
herein and in the Other Agreements, and for other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, each of FT, DT and Sprint (each a "Party"),
intending to be legally bound, hereby agrees as follows:
ARTICLE 1.
DEFINITIONS AND CONSTRUCTION
Section 1.1. Certain Definitions. As used in this
Agreement, the following terms shall have the meanings specified
below:
"Acquisition Proposal" shall have the meaning set forth in
Section 8.3(a) of the Investment Agreement.
"Affiliate" shall mean, with respect to any Person, any other
Person that directly, or indirectly through one or more
intermediaries, Controls or is Controlled by, or is under common
Control with, such Person, provided that (a) no JV Entity shall be
deemed an Affiliate of any Party unless (i) FT, DT and Atlas own a
majority of the Voting Power of such JV Entity and Sprint does not
have the Tie-Breaking Vote (as defined in Section 18.1 of the
Joint Venture Agreement), (ii) FT, DT or Atlas has the Tie-
Breaking Vote or (iii) FT, DT or any of their Affiliates cause
such JV Entity to acquire Beneficial Ownership of any Sprint
equity securities; (b) FT, DT and Sprint shall not be deemed
Affiliates of each other; (c) Atlas shall be deemed an Affiliate
of FT and DT; and (d) the term "Affiliate" shall not include any
Government Affiliate.
"Aggregate Foreign Ownership Limitation" shall mean the
maximum aggregate percentage of equity interests of Sprint that
may be Owned of Record or Voted by Aliens under Section 310(b)(4)
of the Communications Act, without such ownership or voting
resulting in the possible loss, or possible failure to secure the
renewal or reinstatement, of any license or franchise of any
Governmental Authority held by Sprint or any of its Affiliates to
conduct any portion of the business of Sprint or such Affiliate,
as such maximum aggregate percentage may be increased from time to
time by amendments to such section or by waivers granted to Sprint
by the FCC or by other determinations of the FCC, provided that if
Section 310(b)(4) is repealed or otherwise made inapplicable to
the ownership of Sprint capital stock by FT and DT, there shall be
no Aggregate Foreign Ownership Limitation.
"Aliens" shall mean "aliens," "their representatives," "a
foreign government or representatives thereof" or "any corporation
organized under the laws of a foreign country" as such terms are
used in Section 310(b)(4) of the Communications Act.
"Applicable Law" shall mean all applicable provisions of all
(a) constitutions, treaties, statutes, laws (including common
law), rules, regulations, ordinances or codes of any Governmental
Authority, and (b) orders, decisions, injunctions, judgments,
awards and decrees of any Governmental Authority.
"Articles" shall mean the Articles of Incorporation of
Sprint, as amended or supplemented from time to time.
"Associate" shall have the meaning ascribed to such term in
Rule 12b-2 under the Exchange Act, provided that when used to
indicate a relationship with FT or DT or their respective
Subsidiaries or Affiliates, the term "Associate" shall mean (a) in
the case of FT, any Person occupying the positions listed on
Schedule A hereto, and (b) in the case of DT, any Person occupying
the positions listed on Schedule B hereto, provided, further,
that, in each case, no Persons occupying any such positions
described in clause (a) or (b) hereof shall be deemed an
"Associate" of FT or DT, as the case may be, unless the Persons
occupying all such positions described in clauses (a) and (b)
hereof Beneficially Own, in the aggregate, securities representing
more than 0.2% of the Voting Power of the Company.
"Atlas" shall mean the company to be formed as a societe
anonyme under the laws of Belgium pursuant to the Joint Venture
Agreement, dated as of December 15, 1994, as amended, between FT
and DT.
"Beneficial Owner" (including, with its correlative meanings,
"Beneficially Own" and "Beneficial Ownership"), with respect to
any securities, shall mean any Person which:
(a) has, or any of whose Affiliates or Associates has,
directly or indirectly, the right to acquire (whether such right
is exercisable immediately or only after the passage of time) such
securities pursuant to any agreement, arrangement or understanding
(whether or not in writing), including pursuant to the Investment
Agreement and the Stockholders' Agreement, or upon the exercise of
conversion rights, exchange rights, warrants or options, or
otherwise;
(b) has, or any of whose Affiliates or Associates has,
directly or indirectly, the right to vote or dispose of (whether
such right is exercisable immediately or only after the passage of
time) or "beneficial ownership" of (as determined pursuant to
Rule 13d-3 under the Exchange Act as in effect on the date hereof
but including all such securities which a Person has the right to
acquire beneficial ownership of, whether or not such right is
exercisable within the 60-day period specified therein) such
securities, including pursuant to any agreement, arrangement or
understanding (whether or not in writing); or
(c) has, or any of whose Affiliates or Associates has,
any agreement, arrangement or understanding (whether or not in
writing) for the purpose of acquiring, holding, voting or
disposing of any securities which are Beneficially Owned, directly
or indirectly, by any other Person (or any Affiliate or Associate
thereof),
provided that Class A Stock and Common Stock held by one of FT or
DT or its Affiliates or Associates shall not also be deemed to be
Beneficially Owned by the other of FT or DT or its Affiliates or
Associates.
"Business Day" shall have the meaning set forth in Article I
of the Investment Agreement.
"Change of Control" shall have the meaning set forth in
Article I of the Investment Agreement.
"Class A Common Stock" shall mean the Class A Common Stock of
Sprint.
"Class A Preference Stock" shall mean the Class A Preference
Stock of Sprint.
"Class A Stock" shall mean the Class A Common Stock or, if
shares of the Class A Preference Stock are outstanding, the Class
A Preference Stock.
"Class A Provisions" shall mean that portion of ARTICLE SIXTH
of the Articles entitled "GENERAL PROVISIONS RELATING TO CLASS A
STOCK," which will be included in an amendment to the Articles to
be filed on or before the First Closing.
"Common Stock" shall mean the Common Stock, par value U.S.
$2.50 per share, of Sprint.
"Communications Act" shall mean the United States
Communications Act of 1934 and the rules and regulations
thereunder.
"Control" (including, with its correlative meanings,
"Controlled by" and "under common Control with") shall mean, with
respect to a Person or Group:
(a) ownership by such Person or Group of Votes
entitling it to exercise in the aggregate more than 50 percent of
the Voting Power of the entity in question; or
(b) possession by such Person or Group of the power,
directly or indirectly, (i) to elect a majority of the board of
directors (or equivalent governing body) of the entity in
question; or (ii) to direct or cause the direction of the
management and policies of or with respect to the entity in
question, whether through ownership of securities, by contract or
otherwise.
"DT" shall have the meaning set forth in the introductory
paragraph of this Agreement.
"DT Investor Confidentiality Agreement" shall have the
meaning set forth in Article I of the Investment Agreement.
"Exchange Act" shall mean the United States Securities
Exchange Act of 1934 and the rules and regulations thereunder.
"FCC" shall mean the United States Federal Communications
Commission.
"First Closing" shall have the meaning set forth in Section
2.1(a) of the Investment Agreement.
"France" shall mean the Republic of France, including French
Guiana, Guadeloupe, Martinique and Reunion, and its territories
and possessions.
"FT" shall have the meaning set forth in the introductory
paragraph of this Agreement.
"FT Investor Confidentiality Agreement" shall have the
meaning set forth in Article I of the Investment Agreement.
"Germany" shall mean the Federal Republic of Germany.
"Government Affiliate" shall mean any Governmental Authority
of France or Germany or any other Person Controlled, directly or
indirectly (other than by virtue of a government's inherent
regulatory or statutory powers to control persons or entities
within its jurisdiction), by any such Governmental Authority,
provided that FT, DT, Atlas and any other Person directly, or
indirectly through one or more intermediaries, Controlled by FT,
DT or Atlas shall not be Government Affiliates.
"Governmental Authority" shall mean any federation, nation,
state, sovereign, or government, any federal, supranational,
regional, state, local or political subdivision, any governmental
or administrative body, instrumentality, department or agency or
any court, administrative hearing body, arbitration tribunal,
commission or other similar dispute resolving panel or body, and
any other entity exercising executive, legislative, judicial,
regulatory or administrative functions of a government, provided
that the term "Governmental Authority" shall not include FT, DT or
Atlas or any of their respective Subsidiaries.
"Group" shall mean any group within the meaning of Section
13(d)(3) of the Exchange Act as in effect on the date hereof.
"Initial Percentage Limitation" shall have the meaning set
forth in Section 2.1(a)(ii), as adjusted pursuant to Section
2.2(a).
"Initial Standstill Period" shall have the meaning set forth
in Section 2.1(a)(ii).
"Investment Agreement" shall have the meaning set forth in
the Recitals.
"Investment Completion Date" shall have the meaning set forth
in Article I of the Investment Agreement.
"Joint Venture" shall have the meaning set forth in Article I
of the Investment Agreement.
"Joint Venture Agreement" shall mean that certain Joint
Venture Agreement, dated as of June 22, 1995, among FT, DT, Sprint
and Sprint Global Venture, Inc.
"Joint Venture Documents" shall have the meaning set forth in
Article I of the Investment Agreement.
"JV Entity" shall have the meaning set forth in Article I of
the Investment Agreement.
"Largest Other Holder" shall mean the Other Holder, if any,
who Beneficially Owns a larger percentage of the Outstanding
Sprint Voting Securities than any other Person, provided that, for
purposes of this definition, FT, DT, their Affiliates and
Associates and Qualified Stock Purchasers shall be considered a
single Person.
"Major Competitor" shall have the meaning set forth in
Article I of the Investment Agreement.
"Other Agreements" shall mean the Investment Agreement, the
Stockholders' Agreement, the Registration Rights Agreement, the FT
Investor Confidentiality Agreement and the DT Investor
Confidentiality Agreement.
"Other Holder" shall mean any Person other than (i) FT, DT,
any of their respective Affiliates or Associates or any Qualified
Stock Purchaser, (ii) Sprint, (iii) any Subsidiary of Sprint, (iv)
any employee benefit plan of Sprint or of any Subsidiary of
Sprint, or (v) any Person organized, appointed or established by
Sprint or any Subsidiary of Sprint for or pursuant to the terms of
any such plan.
"Outstanding Sprint Voting Securities" shall mean the Sprint
Voting Securities outstanding as of any particular date, plus all
Sprint Voting Securities which as of such date any of FT or DT or
any of their respective Affiliates is committed to acquire from
Sprint or has the right to acquire (or to commit to acquire) from
Sprint pursuant to the Investment Agreement and the Stockholders'
Agreement.
"Owned of Record or Voted by" shall have the meaning
specified in Section 310(b)(4) of the Communications Act and
published interpretations thereof by the FCC and the U.S. federal
courts.
"Passive Financial Institution" shall mean a bank (or
comparable financial institution), insurance company, pension or
retirement fund which acquires Voting Securities or other equity
interests in a Qualified Subsidiary not with the purpose or effect
of changing or influencing the control of the Qualified Subsidiary
or Sprint, nor in connection with or as a participant in any
transaction having such purpose or effect; provided that the term
"Passive Financial Institution" shall not include any Major
Competitor of Sprint or of the Joint Venture.
"Percentage Limitation" shall have the meaning set forth in
Section 2.1(a)(iii), as adjusted pursuant to Section 2.2(a).
"Percentage Limitation Adjustment Event" shall mean the
acquisition by an Other Holder of Beneficial Ownership of
Outstanding Sprint Voting Securities in excess of the applicable
Percentage Limitation, unless any of FT, DT or any Qualified
Subsidiary shall have breached any of the provisions of
Section 3.1 or 3.2 of this Agreement or any corresponding
provision of any Qualified Subsidiary Standstill Agreement and
such breach resulted in, or was intended to facilitate, such Other
Holder's acquisition of Beneficial Ownership of Outstanding Sprint
Voting Securities in excess of the applicable Percentage
Limitation.
"Percentage Ownership Interest" shall mean, with respect to
any Person, that percentage of the Voting Power of Sprint
represented by Votes associated with the Sprint Voting Securities
owned of record by such Person or by its nominees.
"Person" shall mean an individual, a partnership, an
association, a joint venture, a corporation, a business, a trust,
any entity organized under Applicable Law, an unincorporated
organization or any Governmental Authority.
"Qualified Stock Purchaser" shall have the meaning set forth
in Article I of the Stockholders' Agreement.
"Qualified Stock Purchaser Standstill Agreement" shall mean a
Standstill Agreement in form and substance satisfactory to Sprint,
FT and DT.
"Qualified Subsidiary" shall have the meaning set forth in
Article I of the Investment Agreement.
"Qualified Subsidiary Standstill Agreement" shall mean a
Standstill Agreement in the form of Exhibit A.
"Registration Rights Agreement" shall have the meaning set
forth in Article I of the Investment Agreement.
"Related Company" shall mean any Person not Controlled by FT
or DT, but in which FT, DT and their respective Affiliates and
Associates, individually or in the aggregate, directly or
indirectly through one or more intermediaries, own securities
entitling them to exercise in the aggregate more than 35 percent
of the Voting Power of such Person.
"SEC" shall mean the United States Securities and Exchange
Commission.
"Section 3(b)(v) Conversion" shall mean the conversion of all
of the outstanding shares of Class A Preference Stock into Class A
Common Stock or Common Stock pursuant to Section 3(b)(v) of the
Class A Provisions.
"Section 3(b)(v) Conversion Date" shall mean the date of the
Section 3(b)(v) Conversion.
"Sprint" shall have the meaning set forth in the introductory
paragraph of this Agreement.
"Sprint Rights Plan" shall mean the Rights Agreement dated as
of August 8, 1989, as amended, between Sprint and UMB Bank, n.a.,
as rights agent.
"Sprint Voting Securities" shall mean the Common Stock, the
Class A Stock and any other securities of Sprint having the right
to Vote.
"Stockholders' Agreement" shall have the meaning set forth in
Article I of the Investment Agreement.
"Strategic Investor" shall mean any Person which owns
directly any equity interests in a Qualified Subsidiary, other
than FT, DT, any wholly owned Subsidiary of FT or DT or a Passive
Financial Institution.
"Strategic Investor Standstill Agreement" shall mean a
Standstill Agreement in the form of Exhibit B.
"Strategic Merger" shall have the meaning set forth in
Article I of the Investment Agreement.
"Subsequent Percentage Limitation" shall have the meaning set
forth in Section 2.1(a)(iii), as adjusted pursuant to Section
2.2(a).
"Subsidiary" shall mean, with respect to any Person (the
"Parent"), any other Person in which the Parent, one or more
Subsidiaries of the Parent, or the Parent and one or more of its
Subsidiaries (a) have the ability, through ownership of securities
individually or as a group, ordinarily, in the absence of
contingencies, to elect a majority of the directors (or
individuals performing similar functions) of such other Person,
and (b) own more than 50% of the equity interests, provided that
Atlas shall be deemed to be a Subsidiary of each of FT and DT.
"Vote" shall mean, as to any entity, the ability to cast a
vote at a stockholders' or comparable meeting of such entity with
respect to the election of directors or other members of such
entity's governing body, provided that with respect to Sprint
only, the term "Vote" shall mean the ability to exercise general
voting power (as opposed to the exercise of special voting or
disapproval rights such as those set forth in the Class A
Provisions) with respect to matters other than the election of
directors at a meeting of the stockholders of Sprint and shall
include the aggregate number of Votes represented by all Sprint
Voting Securities which as of such date any of FT or DT or any of
their respective Affiliates is committed to acquire from Sprint or
has the right to acquire (or to commit to acquire) from Sprint
pursuant to the Investment Agreement and the Stockholders'
Agreement.
"Voting Power" shall mean, as to any entity as at any date,
the aggregate number of Votes outstanding as at such date in
respect of such entity plus, in the case of Sprint, the aggregate
number of Votes represented by all Sprint Voting Securities which
as of such date any of FT or DT or any of their respective
Affiliates is committed to acquire from Sprint or has the right to
acquire (or to commit to acquire) from Sprint pursuant to the
Investment Agreement and the Stockholders' Agreement.
Section 1.2. Interpretation and Construction of this
Agreement. The definitions in Section 1.1 shall apply equally to
both the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words
"include," "includes" and "including" shall be deemed to be
followed by the phrase "without limitation." All references
herein to Articles, Sections and Exhibits shall be deemed to be
references to Articles and Sections of, and Exhibits to, this
Agreement unless the context shall otherwise require. The
headings of the Articles and Sections are inserted for convenience
of reference only and are not intended to be a part of or to
affect the meaning or interpretation of this Agreement. Unless
the context shall otherwise require or provide, any reference to
any agreement or other instrument or statute or regulation is to
such agreement, instrument, statute or regulation as amended and
supplemented from time to time (and, in the case of a statute or
regulation, to any successor provision).
ARTICLE 2.
RESTRICTIONS ON ACQUISITION OF VOTING SECURITIES BY
FT, DT AND THEIR AFFILIATES AND ASSOCIATES
Section 2.1. Acquisition Restrictions.
(a) Subject to Sections 2.2, 2.3 and 2.4, each of FT
and DT agrees that it will not, and will cause each of its
respective Affiliates and Associates not to, directly or
indirectly, acquire, offer to acquire, or agree to acquire, by
purchase or otherwise, Beneficial Ownership of:
(i) any Sprint Voting Securities at any time prior to the
earlier of (A) the Investment Completion Date, and (B)
the Section 3(b)(v) Conversion Date, in each case other
than as a result of purchases from Sprint pursuant to
the Investment Agreement;
(ii) if a Section 3(b)(v) Conversion has not occurred, any
Sprint Voting Securities on or following the Investment
Completion Date and prior to the fifteenth anniversary
of the date hereof (the "Initial Standstill Period"), if
as a result the Votes represented by the Sprint Voting
Securities Beneficially Owned in the aggregate by FT, DT
and their respective Affiliates and Associates would
represent in the aggregate more than 20% of the Voting
Power represented by the Outstanding Sprint Voting
Securities (the "Initial Percentage Limitation");
(iii) if a Section 3(b)(v) Conversion has not occurred, any
Sprint Voting Securities following the Initial
Standstill Period, if as a result the Votes represented
by the Sprint Voting Securities Beneficially Owned in
the aggregate by FT, DT and their respective Affiliates
and Associates would represent in the aggregate more
than 30% of the Voting Power represented by the
Outstanding Sprint Voting Securities (the "Subsequent
Percentage Limitation"; the Initial Percentage
Limitation and the Subsequent Percentage Limitation, as
the case may be, also being referred to as the
"Percentage Limitations"), provided that the Sprint
Voting Securities Beneficially Owned in the aggregate by
FT and DT and their respective Affiliates and Associates
may not at any time exceed 80% of the Aggregate Foreign
Ownership Limitation;
(iv) if a Section 3(b)(v) Conversion has occurred, any Sprint
Voting Securities on or following the Section 3(b)(v)
Conversion Date; or
(v) any Sprint nonvoting equity securities following the
date hereof.
(b) In addition to any other restrictions contained
herein or in the Joint Venture Documents, the Parties agree that
none of the Parties will cause any JV Entity to, directly or
indirectly, acquire, offer to acquire, or agree to acquire, by
purchase or otherwise, Beneficial Ownership of any equity
securities of Sprint.
Section 2.2. Exception to Purchase Restrictions.
(a) Subject to Section 2.4, if a Percentage Limitation
Adjustment Event shall occur, then the applicable Percentage
Limitation shall be increased to the extent necessary so that
Sections 2.1(a)(ii) and 2.1(a)(iii) do not prohibit FT, DT and
their respective Affiliates from acquiring Beneficial Ownership of
additional Sprint Voting Securities such that the Votes
represented by the Sprint Voting Securities Beneficially Owned in
the aggregate by FT, DT and their respective Affiliates and
Associates and any Qualified Stock Purchasers would be equal to
(but no greater than) the Votes represented by the Sprint Voting
Securities Beneficially Owned by the Largest Other Holder, after
giving effect to any dilution to such holder resulting from the
operation of the Sprint Rights Plan, provided that the Sprint
Voting Securities Beneficially Owned in the aggregate by FT and DT
and their respective Affiliates may not at any time exceed 80% of
the Aggregate Foreign Ownership Limitation.
(b) Subject to Section 2.4, if an acquisition by FT, DT
or any of their respective Affiliates or Associates of Beneficial
Ownership of additional Sprint Voting Securities otherwise
permitted by Section 2.1(a)(iii) or 2.2(a) is prohibited
thereunder due to the proviso at the end of such Section, then FT
or DT may assign to one or more non-Alien Qualified Stock
Purchasers in accordance with Section 7.2 of the Stockholders'
Agreement their rights under Section 2.1(a)(iii) or 2.2(a) to
purchase in the aggregate the number of shares of Sprint Voting
Securities which equals the number of shares of Sprint Voting
Securities the purchase of which is prohibited by the proviso at
the end of Section 2.1(a)(iii) or Section 2.2(a), as the case may
be.
Section 2.3. Effect of Action by Sprint.
(a) Subject to Section 2.3(b), neither FT nor DT shall
be deemed in violation of this Article 2 if the Beneficial
Ownership of Sprint Voting Securities by FT, DT and their
respective Affiliates and Associates exceeds the applicable
Percentage Limitation (i) solely as a result of an acquisition of
Sprint Voting Securities by Sprint that, by reducing the number of
Outstanding Sprint Voting Securities, increases the proportionate
number of Sprint Voting Securities Beneficially Owned by FT, DT
and their respective Affiliates and Associates, or (ii) because
FT, DT or their respective Affiliates or Associates purchase
shares in excess of the applicable Percentage Limitation in
reliance on information regarding the number of outstanding shares
of Sprint provided directly to any of FT, DT and their respective
Affiliates and Associates by Sprint in response to a request for
such information by any of FT, DT and their respective Affiliates
and Associates immediately prior to such purchase.
(b) Notwithstanding Section 2.3(a), the applicable
Percentage Limitation shall be deemed exceeded if (i) in the case
of Section 2.3(a)(i), FT, DT or any of their respective Affiliates
or Associates acquires Beneficial Ownership of any additional
Sprint Voting Securities after it has been notified of an
acquisition of Sprint Voting Securities by Sprint, or (ii) in the
case of Section 2.3(a)(ii), FT, DT or any of their respective
Affiliates or Associates acquires Beneficial Ownership of
additional Sprint Voting Securities after it has been notified
that the information regarding the number of outstanding shares
previously provided to it was incorrect and it has been provided
by Sprint with correct information, unless in the case of clause
(i) or (ii):
(x) upon the acquisition of Beneficial Ownership of such
additional Sprint Voting Securities, FT, DT and their
respective Affiliates and Associates do not Beneficially Own
in the aggregate more than the applicable Percentage
Limitation, or
(y) subject to the rights of Sprint in Section 5.7 of
the Stockholders' Agreement, such acquisition is effected
pursuant to (A) the exercise of equity purchase rights by FT
or DT pursuant to the Stockholders' Agreement, or (B) market
purchases which are made solely in lieu of the exercise of
equity purchase rights by FT or DT pursuant to the
Stockholders' Agreement following the issuance of securities
by Sprint, so long as (1) either (I) FT or DT, as the case
may be, has irrevocably waived its rights to exercise the
equity purchase rights in respect of which such market
purchases are made in lieu thereof, or (II) the time period
for the exercise of such equity purchase rights has expired
without the exercise of such rights, and (2) following such
market purchases, the Percentage Ownership Interest of FT, DT
and their respective Affiliates and Associates does not
exceed the Percentage Ownership Interest of FT, DT and their
respective Affiliates and Associates which would have been in
effect had FT, DT and their respective Affiliates exercised
such equity purchase rights.
Section 2.4. Sprint Rights Plan.
(a) Notwithstanding the provisions of Sections 2.1 and
2.2, each of FT and DT agrees that it will not, and will cause
each of its respective Affiliates not to, directly or indirectly,
acquire, offer to acquire, or agree to acquire, by purchase or
otherwise, Beneficial Ownership of any Sprint Voting Securities if
such acquisition would result in FT or DT or any of their
respective Affiliates being deemed an Acquiring Person (as such
term is defined in the Sprint Rights Plan) or result in the
occurrence of a Stock Acquisition Date, Distribution Date, Section
11(a)(ii) Event or Section 13 Event (as such terms are defined in
the Sprint Rights Plan).
(b) If the Sprint Board of Directors amends or waives
the provisions of the Sprint Rights Plan in such a manner to
permit an Other Holder to acquire Beneficial Ownership of Sprint
Voting Securities having Votes in excess of the applicable
Percentage Limitation without such acquisition resulting in the
Other Holder being deemed an Acquiring Person or resulting in the
occurrence of a Stock Acquisition Date, Distribution Date, Section
11(a)(ii) Event or Section 13 Event or makes any other changes to
the Sprint Rights Plan which would permit any Other Holder to own
Sprint Voting Securities having Votes in excess of the applicable
Percentage Limitation without triggering adverse consequences
under the Sprint Rights Plan to such Other Holder, then Sprint
will amend or waive the provisions of the Sprint Rights Plan so
that the Sprint Rights Plan does not impose any prohibition
(including any prohibition on the ownership of Voting Securities),
on FT, DT and their respective Affiliates and Associates which is
more restrictive than the restrictions imposed on any Other
Holder.
ARTICLE 3.
OTHER STANDSTILL PROVISIONS; QUORUM
Section 3.1. Standstill Covenants. Each of FT and DT
agrees that it will not, and it will cause each of its respective
Affiliates and Associates not to, directly or indirectly, alone or
in concert with others (including with any Government Affiliate,
Related Company or Qualified Stock Purchaser), unless specifically
requested in writing by the Chairman of Sprint or by a resolution
of a majority of the directors of Sprint, take any of the actions
set forth below, except to the extent expressly permitted or
provided for by the Other Agreements and the Joint Venture
Documents:
(a) effect, seek, offer, propose (whether publicly or
otherwise) or cause or participate in, or assist any other Person
to effect, seek, offer or propose (whether publicly or otherwise)
or participate in:
(i) any acquisition of Beneficial Ownership of Sprint Voting
Securities or other equity interests in Sprint which
would result in a breach of Article 2 of this Agreement;
(ii) any tender or exchange offer, merger, consolidation,
share exchange or business combination involving Sprint
or any material portion of its business or any purchase
of all or any substantial part of the assets of Sprint
or any material portion of its business, provided that
nothing in this clause (ii) shall prohibit discussions
by the Parties in connection with the conduct of the
business of the JV Entities in the manner contemplated
by the Joint Venture Documents or in connection with
offers by FT or DT to purchase equity interests owned by
Sprint in the JV Entities;
(iii) any recapitalization, restructuring, liquidation,
dissolution or other extraordinary transaction with
respect to Sprint or any material portion of its
business, provided that nothing in this clause (iii)
shall prohibit discussions by the Parties in connection
with the conduct of the business of the JV Entities or
in connection with offers by FT or DT to purchase equity
interests owned by Sprint in the JV Entities; or
(iv) any "solicitation" of "proxies" (as such terms are used
in the proxy rules of the SEC but without regard to the
exclusion set forth in Section 14a-1(l)(2)(iv) from the
definition of "solicitation") with respect to Sprint or
any of its Affiliates or any action resulting in such
Person becoming a "participant" in any "election
contest" (as such terms are used in the proxy rules of
the SEC) with respect to Sprint or any of its
Affiliates;
(b) propose any matter for submission to a vote of
stockholders of Sprint or any of its Affiliates; provided that
nothing in this Section 3.1(b) shall restrict the manner in which
the members of the Board of Directors of Sprint elected by the
holders of Class A Stock may (i) vote on any matter submitted to
such Board, or (ii) participate in deliberations or discussions of
such Board (including making suggestions and raising issues to the
Board, so long as such actions do not otherwise violate any other
provision of this Section 3.1 or Section 3.2) in their capacity as
members of such Board and in no other capacity, including any
capacity such persons serving as directors otherwise may have as a
director, officer, employee, agent or representative of any other
Person, including any holder of Class A Stock;
(c) form, join or participate in a Group with respect
to any Sprint Voting Securities (other than any Group whose
members consist solely of FT, DT, any of their respective
Affiliates and Associates and any Qualified Subsidiaries);
(d) grant any proxy with respect to any Sprint Voting
Securities to any Person not designated by Sprint, except for
proxies granted to FT or DT or Qualified Subsidiaries or to
individuals who are officers, employees or regular agents or
advisors of FT or DT or Qualified Subsidiaries who have received
specific instructions from FT, DT or Qualified Subsidiaries, as
the case may be, as to the voting of such Sprint Voting Securities
with respect to the matter or matters for which the proxy is
granted;
(e) deposit any Sprint Voting Securities in a voting
trust or subject any Sprint Voting Securities to any arrangement
or agreement with respect to the voting of such Sprint Voting
Securities or other agreement having similar effect, except for
agreements solely among FT, DT and any Qualified Subsidiary;
(f) execute any written stockholder consent with
respect to Sprint, except for written consents executed by such
Persons as holders of the Class A Stock in connection with (i) the
election of Class A Directors (as defined in the Articles),
(ii) the approval or disapproval of a Subject Event, Major
Issuance or Major Competitor Transaction (each as defined in the
Articles) during the period in which the holders of the Class A
Stock are entitled to exercise disapproval rights with respect to
such matter, or (iii) any vote by the holders of the Class A Stock
with respect to which such holders are entitled to vote as a
class;
(g) take any other action to seek to affect the control
of the management or Board of Directors of Sprint or any of its
Affiliates; provided that nothing in this Section 3.1(g) shall
restrict the manner in which the members of the Board of Directors
of Sprint elected by the holders of Class A Stock may (i) vote on
any matter submitted to such Board, or (ii) participate in
deliberations or discussions of such Board (including making
suggestions and raising issues to the Board, so long as such
actions do not otherwise violate any other provision of this
Section 3.1 or Section 3.2) in their capacity as members of such
Board and in no other capacity, including any capacity such
persons serving as directors otherwise may have as a director,
officer, employee, agent or representative of any other Person,
including any holder of Class A Stock;
(h) enter into any discussions, negotiations,
arrangements or understandings with any Person (including any
Government Affiliate, Related Company or Qualified Stock
Purchaser) other than FT, DT, their Affiliates, Associates and
their respective directors, officers, employees, agents or
advisors with respect to any of the foregoing, or advise, assist,
encourage or seek to persuade others to take any action with
respect to any of the foregoing;
(i) disclose to any Person (including any Government
Affiliate, Related Company or Qualified Stock Purchaser) other
than FT, DT, their Affiliates, Associates and their respective
directors, officers, employees, agents or advisors any intention,
plan or arrangement inconsistent with the foregoing or with the
restrictions on transfer set forth in Article II of the
Stockholders' Agreement or form any such intention which would
result in FT, DT or any of their respective Affiliates or
Associates being required to make any such disclosure in any
filing with a Governmental Authority or being required by
Applicable Law to make a public announcement with respect thereto;
or
(j) request Sprint or any of its Affiliates, directors,
officers, employees, representatives, advisors or agents, directly
or indirectly, to amend or waive in any material respect this
Agreement (including this Section 3.1(j)) or the articles of
incorporation or the bylaws of Sprint or any of its Affiliates.
Section 3.2. Press Releases, Etc. by FT and DT.
(a) Subject to Section 3.2(b), each of FT and DT may
issue such press releases and make such other public
communications to the financial community and to its stockholders
and such other public statements made in the ordinary course
relating to its investment in Sprint, in each case as it
reasonably deems appropriate and customary. Prior to making any
such press release or other communication, FT and DT will use
reasonable efforts to consult with Sprint in good faith regarding
the form and content of any such communication, and FT and DT will
use reasonable efforts to coordinate any such communication with
any decisions reached by Sprint with respect to disclosures
relating to such matters.
(b) Notwithstanding the provisions of Section 3.2(a),
unless required by Applicable Law, neither FT nor DT, nor any of
their respective Affiliates or Associates, may make any press
release, public announcement or other communication with respect
to any of the matters described in Sections 3.1(a), 3.1(b),
3.1(c), 3.1(g), 3.1(h) or 3.1(j) without the prior written consent
of the Chairman of Sprint or by a resolution of a majority of the
directors of Sprint. Nothing in this Section 3.2 shall permit FT
or DT to take any action which would otherwise violate any
provision contained in Section 3.1.
Section 3.3. Voting of Sprint Voting Securities. Except as
set forth in Sections 3.1(d), 3.1(e) and 3.1(f), nothing in
Section 3.1 shall restrict the manner in which FT, DT and their
respective Affiliates may vote their Sprint Voting Securities.
Section 3.4. Quorum. Each of FT and DT shall use reasonable
efforts to ensure that they shall be present, and shall use
reasonable efforts to cause their respective Affiliates and
Associates owning Sprint Voting Securities to be present, in each
case, in person or by proxy, at all meetings of stockholders of
Sprint so that all Sprint Voting Securities Beneficially Owned by
FT and DT and their respective Affiliates and Associates shall be
counted for purposes of determining the presence of a quorum at
such meeting.
Section 3.5. Notice of Proposals Regarding Acquisition
Transactions. Each of FT and DT agrees that it will notify Sprint
promptly if any inquiries or proposals which FT or DT reasonably
believes are of substance are received by, any information is
exchanged with respect to, or any negotiations or substantive
discussions are initiated or continued with, FT or DT or any of
their respective Affiliates regarding any Acquisition Proposal
involving Sprint or any purchase of any of the shares of capital
stock of Sprint Beneficially Owned by FT, DT or any of their
respective Affiliates pursuant to a tender offer or exchange
offer.
ARTICLE 4.
OBLIGATIONS OF OTHER ENTITIES
Section 4.1. Qualified Subsidiaries. FT and DT shall cause
each Person which, as a result of the acquisition of Beneficial
Ownership of any Sprint Voting Securities, would become a
Qualified Subsidiary to execute a Qualified Subsidiary Standstill
Agreement prior to and as a condition to the effectiveness of such
acquisition.
Section 4.2. Strategic Investors. FT and DT shall cause
each Person which, as a result of an acquisition of Beneficial
Ownership of any equity interest in a Qualified Subsidiary, would
become a Strategic Investor (and any Person who Beneficially Owns
more than 35% of the Voting Power, or otherwise Controls, such
acquiring Person) to execute a Strategic Investor Standstill
Agreement prior to and as a condition to the effectiveness of such
acquisition.
ARTICLE 5.
MISCELLANEOUS
Section 5.1. Termination. The provisions of this Agreement
shall terminate (a) on the second anniversary of the date of the
termination of the Investment Agreement but only if such agreement
is terminated prior to the First Closing, or (b) if the Company
proceeds with a transaction involving a Change of Control
following the process described in Section 4.1 of the
Stockholders' Agreement. Any termination of the Agreement as
provided herein shall be without prejudice to the rights of any
Party arising out of the breach by any other Party of any
provision of this Agreement.
Section 5.2. Notices. All notices and other communications
required or permitted by this Agreement shall be made in writing
in the English language and any such notice or communication shall
be deemed delivered when delivered in person, transmitted by telex
or telecopier, or seven days after it has been sent by air mail,
as follows:
FT: 6 place d'Alleray
75505 Paris Cedex 15
France
Attention: Executive Vice President,
International
Tel: (33-1) 44-44-19-94
Fax: (33-1) 46-54-53-69
with a copy to:
Debevoise & Plimpton
875 Third Avenue
New York, New York 10022
U.S.A.
Attention: Louis Begley, Esq.
Tel: (212) 909-6273
Fax: (212) 909-6836
DT: Friedrich-Ebert-Allee 140
D-53113 Bonn
Germany
Attention: Chief Executive Officer
Tel: 49-228-181-9000
Fax: 49-228-181-8970
with a copy to:
Mayer, Brown & Platt
2000 Pennsylvania Avenue, N.W.
Suite 6500
Washington, D.C. 20006
U.S.A.
Attention: Werner Hein, Esq.
Tel: (202) 778-8726
Fax: (202) 861-0473
Sprint: 2330 Shawnee Mission Parkway
East Wing
Westwood, Kansas 66205
U.S.A.
Attention: General Counsel
Tel: (913) 624-8440
Fax: (913) 624-8426
with a copy to:
King & Spalding
191 Peachtree Street
Atlanta, Georgia 30303
U.S.A.
Attention: Bruce N. Hawthorne, Esq.
Tel: (404) 572-4903
Fax: (404) 572-5146
The Parties shall promptly notify each other in the manner
provided in this Section 5.2 of any change in their respective
addresses. A notice of change of address shall not be deemed to
have been given until received by the addressee. Communications
by telex or telecopier also shall be sent concurrently by mail,
but shall in any event be effective as stated above.
Section 5.3. Assignment. No Party will assign this
Agreement or any rights, interests or obligations hereunder, or
delegate performance of any of its obligations hereunder, without
the prior written consent of each other Party.
Section 5.4. Entire Agreement. This Agreement, including
the Exhibits attached hereto, embodies the entire agreement and
understanding of the Parties in respect of the subject matter
contained herein, provided that this provision shall not abrogate
any other written agreement between the Parties executed
simultaneously with this Agreement. This Agreement supersedes all
prior agreements and understandings between the Parties with
respect to such subject matter.
Section 5.5. Waiver, Amendment, etc. This Agreement may
not be amended or supplemented, and no waivers of or consents to
departures from the provisions hereof shall be effective, unless
set forth in a writing signed by, and delivered to, all the
Parties. No failure or delay of any Party in exercising any power
or right under this Agreement will operate as a waiver thereof,
nor will any single or partial exercise of any right or power, or
any abandonment or discontinuance of steps to enforce such right
or power, preclude any other or further exercise thereof or the
exercise of any other right or power.
Section 5.6. Binding Agreement; No Third Party
Beneficiaries. This Agreement will be binding upon and inure to
the benefit of the Parties and their successors (including any
successor of FT in a privatization) and permitted assigns.
Nothing expressed or implied herein is intended or will be
construed to confer upon or to give to any third party any rights
or remedies by virtue hereof. In the event of a reorganization of
FT pursuant to, as a result of or in connection with, a
privatization, the corporation or other entity formed to continue
the business activities of FT shall assume the rights and
obligations of FT under this Agreement.
Section 5.7. Governing Law; Dispute Resolution; Equitable
Relief.
(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (REGARDLESS
OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW).
(b) EACH PARTY IRREVOCABLY CONSENTS AND AGREES THAT ANY
LEGAL ACTION, SUIT OR PROCEEDING AGAINST IT WITH RESPECT TO ITS
OBLIGATIONS OR LIABILITIES UNDER OR ARISING OUT OF OR IN
CONNECTION WITH THIS AGREEMENT SHALL BE BROUGHT ONLY IN THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK OR, IN
THE EVENT (BUT ONLY IN THE EVENT) SUCH COURT DOES NOT HAVE SUBJECT
MATTER JURISDICTION OVER SUCH ACTION, SUIT OR PROCEEDING, IN THE
COURTS OF THE STATE OF NEW YORK SITTING IN THE CITY OF NEW YORK,
AND EACH PARTY HEREBY IRREVOCABLY ACCEPTS AND SUBMITS TO THE
JURISDICTION OF EACH OF THE AFORESAID COURTS IN PERSONAM, WITH
RESPECT TO ANY SUCH ACTION, SUIT OR PROCEEDING (INCLUDING CLAIMS
FOR INTERIM RELIEF, COUNTERCLAIMS, ACTIONS WITH MULTIPLE
DEFENDANTS AND ACTIONS IN WHICH SUCH PARTY IS IMPLED). EACH PARTY
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT THAT IT MAY HAVE
TO A JURY TRIAL IN ANY LEGAL ACTION, SUIT OR PROCEEDING WITH
RESPECT TO, OR ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT.
(c) EACH OF FT AND DT HEREBY IRREVOCABLY DESIGNATES
CT CORPORATION SYSTEM (IN SUCH CAPACITY, THE "PROCESS AGENT"),
WITH AN OFFICE AT 1633 BROADWAY, NEW YORK, NEW YORK 10019, AS ITS
DESIGNEE, APPOINTEE AND AGENT TO RECEIVE, FOR AND ON ITS BEHALF
SERVICE OF PROCESS IN SUCH JURISDICTION IN ANY LEGAL ACTION OR
PROCEEDINGS WITH RESPECT TO THIS AGREEMENT, AND SUCH SERVICE SHALL
BE DEEMED COMPLETE UPON DELIVERY THEREOF TO THE PROCESS AGENT,
PROVIDED THAT IN THE CASE OF ANY SUCH SERVICE UPON THE PROCESS
AGENT, THE PARTY EFFECTING SUCH SERVICE SHALL ALSO DELIVER A COPY
THEREOF TO FT AND DT IN THE MANNER PROVIDED IN SECTION 5.2. FT
AND DT SHALL TAKE ALL SUCH ACTION AS MAY BE NECESSARY TO CONTINUE
SAID APPOINTMENT IN FULL FORCE AND EFFECT OR TO APPOINT ANOTHER
AGENT SO THAT FT AND DT WILL AT ALL TIMES HAVE AN AGENT FOR
SERVICE OF PROCESS FOR THE ABOVE PURPOSES IN NEW YORK, NEW YORK.
IN THE EVENT OF THE TRANSFER OF ALL OR SUBSTANTIALLY ALL OF THE
ASSETS AND BUSINESS OF THE PROCESS AGENT TO ANY OTHER CORPORATION
BY CONSOLIDATION, MERGER, SALE OF ASSETS OR OTHERWISE, SUCH OTHER
CORPORATION SHALL BE SUBSTITUTED HEREUNDER FOR THE PROCESS AGENT
WITH THE SAME EFFECT AS IF NAMED HEREIN IN PLACE OF CT CORPORATION
SYSTEM. EACH OF FT AND DT FURTHER IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY
SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED AIRMAIL, POSTAGE PREPAID, TO SUCH PARTY AT ITS ADDRESS
SET FORTH IN THIS AGREEMENT, SUCH SERVICE OF PROCESS TO BE
EFFECTIVE UPON ACKNOWLEDGMENT OF RECEIPT OF SUCH REGISTERED MAIL.
NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY PARTY TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW. EACH OF
FT AND DT EXPRESSLY ACKNOWLEDGES THAT THE FOREGOING WAIVER IS
INTENDED TO BE IRREVOCABLE UNDER THE LAWS OF THE STATE OF NEW YORK
AND OF THE UNITED STATES OF AMERICA.
(d) EACH PARTY AGREES THAT MONEY DAMAGES WOULD NOT BE A
SUFFICIENT REMEDY FOR THE OTHER PARTIES FOR ANY BREACH OF THIS
AGREEMENT BY IT, AND THAT IN ADDITION TO ALL OTHER REMEDIES THE
OTHER PARTIES MAY HAVE, THEY SHALL BE ENTITLED TO SPECIFIC
PERFORMANCE AND TO INJUNCTIVE OR OTHER EQUITABLE RELIEF AS A
REMEDY FOR ANY SUCH BREACH. EACH PARTY AGREES NOT TO OPPOSE THE
GRANTING OF SUCH RELIEF IN THE EVENT A COURT DETERMINES THAT SUCH
BREACH HAS OCCURRED, AND AGREES TO WAIVE ANY REQUIREMENT FOR THE
SECURING OR POSTING OF ANY BOND IN CONNECTION WITH SUCH REMEDY.
Section 5.8. Severability. The invalidity or
unenforceability of any provision hereof in any jurisdiction will
not affect the validity or enforceability of the remainder hereof
in that jurisdiction or the validity or enforceability of this
Agreement, including that provision, in any other jurisdiction.
To the extent permitted by Applicable Law, each Party waives any
provision of Applicable Law that renders any provision hereof
prohibited or unenforceable in any respect. If any provision of
this Agreement is held to be unenforceable for any reason, it
shall be adjusted rather than voided, if possible, in order to
achieve the intent of the Parties to the extent possible.
Section 5.9. Translation. The parties hereto have
negotiated both this Agreement and the Memorandum of
Understanding, dated June 14, 1994 (the "MOU"), among each of the
parties hereto, in the English language, and have prepared
successive drafts and the definitive texts of the MOU and this
Agreement in the English language. For purposes of complying with
loi no 94-665 du 4 aout 1994 relative a l'emploi de la langue
francaise, the parties hereto have prepared a French version of
this Agreement, which French version was executed and delivered
simultaneously with the execution and delivery of the English
version hereof. The parties deem the French and English versions
of this Agreement to be equally authoritative.
Section 5.10. Counterparts. This Agreement may be executed
in one or more counterparts each of which when so executed and
delivered will be deemed an original but all of which will
constitute one and the same Agreement.
Section 5.11. Waiver of Immunity. Each of FT and DT agrees
that, to the extent that it or any of its property is or becomes
entitled at any time to any immunity on the grounds of sovereignty
or otherwise based upon its status as an agency or instrumentality
of government from any legal action, suit or proceeding or from
setoff 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
of a judgment, from execution pursuant to a judgment or arbitral
award or from any other legal process in any jurisdiction, it, for
itself and its property expressly, irrevocably and unconditionally
waives, and agrees not to plead or claim, any such immunity with
respect to such matters arising with respect to this Agreement or
the subject matter hereof (including any obligation for the pay-
ment of money). Each of FT and DT agrees that the waiver in this
provision 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. 1602, et seq. The foregoing waiver
shall constitute a present waiver of immunity at any time any
action is initiated against FT or DT with respect to this
Agreement.
Section 5.12. Remedies. In addition to any other remedies
which may be available to Sprint (including any remedies which
Sprint may have at law or in equity):
(a) Each of FT and DT agrees that Sprint shall have no
obligation to honor transfers of Sprint Voting Securities or other
equity interests in Sprint to FT, DT or any of their respective
Affiliates or Associates which would cause any of FT, DT and their
respective Affiliates or Associates to Beneficially Own Sprint
Voting Securities or other equity interests in Sprint in violation
of this Agreement, any such transfers shall be void and of no
effect, and Sprint shall be entitled to instruct any transfer
agent or agents for the equity interests in Sprint to refuse to
honor such transfers; and
(b) FT and DT acknowledge the provisions set forth in
Section 5 of that portion of ARTICLE SIXTH of the Articles
entitled "GENERAL PROVISIONS RELATING TO ALL STOCK," Section 7(b)
of the Class A Provisions, and Section 3.5 and Article VIII of the
Stockholders' Agreement relating to the consequences of a breach
of certain provisions of this Agreement or any Qualified
Subsidiary Standstill Agreement or to the consequences of certain
actions taken by a Government Affiliate, Qualified Stock
Purchaser, Strategic Investor or Related Company.
IN WITNESS WHEREOF, Sprint, FT and DT have caused their
respective duly authorized officers to execute this Agreement as
of the day and year first above written.
SPRINT CORPORATION
By: /s/ W. T. Esrey
Name: William T. Esrey
Title: Chairman and Chief
Executive Officer
FRANCE TELECOM
By: /s/ Charles Rozmaryn
Name: Charles Rozmaryn
Title: Directeur General
DEUTSCHE TELEKOM AG
By: /s/ Ron Sommer
Name: Dr. Ron Sommer
Title: Vorsitzender des
Vorstandes
EXHIBIT (11)
SPRINT CORPORATION
COMPUTATION OF EARNINGS PER COMMON SHARE (UNAUDITED)
(In Millions, Except Per Share Data)
Three Months Six Months Ended
Ended
June 30, June 30,
1995 1994 1995 1994
Primary earnings per
share
Net income $ 245.7 $ 219.6 $ 470.0 $ 447.0
Preferred stock
dividends (0.6) (0.7) (1.3) (1.4)
Earnings applicable to
common stock $ 245.1 $ 218.9 $ 468.7 $ 445.6
Weighted average number
of common shares (1) 350.2 347.6 349.6 347.1
Primary earnings per
share $ 0.70 $ 0.63 $ 1.34 $ 1.28
Fully diluted earnings
per share
Earnings applicable to
common stock $ 245.1 $ 218.9 $ 468.7 $ 445.6
Convertible preferred
stock dividends 0.2 0.2 0.3 0.3
Earnings as adjusted for
purposes of computing
fully diluted earnings
per share $ 245.3 $ 219.1 $ 469.0 $ 445.9
Weighted average number
of common shares 350.2 347.6 349.6 347.1
Additional dilution for
common stock
equivalents and
dilutive securities 1.4 1.2 1.9 1.3
Total 351.6 348.8 351.5 348.4
Fully diluted earnings
per share $ 0.70 $ 0.63 $ 1.33 $ 1.28
(1) Weighted average number of common shares have been
adjusted for dilutive common stock equivalents using the
treasury stock method.
EXHIBIT (12)
SPRINT CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (UNAUDITED)
(In Millions)
Three Months Ended Six Months Ended
June 30, June 30,
1995 1994 1995 1994
Earnings
Net income $ 245.7 $ 219.6 $ 470.0 $ 447.0
Capitalized interest (8.3) (1.8) (12.8) (2.8)
Income tax provision 145.3 127.9 277.4 256.9
Subtotal 382.7 345.7 734.6 701.1
Fixed charges
Interest charges 108.3 101.8 212.0 203.9
Interest factor of
operating rents 31.1 27.9 61.3 56.0
Pre-tax cost of
preferred stock
dividends of
subsidiaries 0.2 0.2 0.4 0.5
Total fixed charges 139.6 129.9 273.7 260.4
Earnings, as adjusted $ 522.3 $ 475.6 $1,008.3 $ 961.5
Ratio of earnings to 3.74 3.66 3.68 3.69
fixed charges
(1) Earnings as computed for the ratio of earnings to fixed
charges includes a gain related to the sale of an investment in
equity securities of $22 million for the six months ended March
31, 1994. In the absence of this gain, the ratio of earnings to
fixed charges would have been 3.56 for the first six months of
1994.
Note: The above ratios have been computed by dividing fixed
charges into the sum of (a) net income less capitalized
interest included in income, (b) income taxes, and (c) fixed
charges. Fixed charges consist of interest on all
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<PAGE>
Exhibit 99(a)
CERTIFICATE OF AMENDMENT
OF
ARTICLES OF INCORPORATION
OF
SPRINT CORPORATION
Pursuant to K.S A. 17-6602
We, ____________________________, [President] [Vice
President], and ____________________________, [Secretary]
[Assistant Secretary], of the above named corporation, a
corporation organized and existing under the laws of the
State of Kansas (this "Corporation"), do hereby certify that
at a meeting of the Board of Directors of this Corporation
the Board of Directors adopted a resolution setting forth
the following amendments to the Articles of Incorporation
and declaring their advisability:
1. ARTICLE SECOND of the Articles of Incorporation
of this Corporation is hereby amended to read in its enti-
rety as follows:
That this Corporation is organized for profit, and
that the purposes for which it is formed are:
The construction and maintenance of a telephone
line; the construction and maintenance of a telegraph
line; and the powers (but not by way of limitation) to
enter into joint ventures (whether incorporated or
unincorporated), partnerships and other forms of busi-
ness relationships with public operators, governmental
agencies, governmental instrumentalities, corporations,
partnerships and other organizations, entities or
persons (whether domestic or foreign) for the construc-
tion, leasing, ownership, operation and maintenance of
telecommunications and other information transmission
networks and all businesses related thereto, both
domestically and abroad, and to provide voice, data and
other communications and information services to any
person or entity; to lend and borrow money that may be
necessary and proper in connection with the conduct of
its business; to hold, purchase, mortgage or otherwise
convey such real and personal estate as the purposes of
this Corporation shall require; and also take, hold and
convey such other property, real, personal or mixed, as
shall be requisite for this Corporation to acquire in
order to obtain or secure the payment of any indebt-
edness or liability due to or belonging to this
Corporation; to sell real, mixed or personal property
which may be proper for the conduct of its business; to
carry on its business outside of, as well as within,
the state, and to purchase, hold, sell, transfer,
mortgage, pledge or otherwise dispose of the shares of
capital stock of, or any bonds, securities or evidences
of indebtedness created by any other corporation or
corporations of any state, or the United States, or any
other country, nation or government, which corporation
shall be incorporated for the accomplishment of the
same or similar purposes as this Corporation or shall
be incorporated for purposes, the accomplishment of
which would be incidental to or would aid or facilitate
the accomplishment of the purposes for which this
Corporation shall have been formed, and to exercise all
rights, powers and privileges of ownership of such
stock or securities; to do any and all other acts or
things necessary, proper and incidental to the conduct
of its business and incidental to the accomplishment of
the purposes for which this Corporation may be formed;
and to engage in any other lawful act or activity for
which corporations may be organized under the Kansas
General Corporation Code (the "General Corporation
Code").
2. ARTICLE FIFTH of the Articles of Incorporation of
this Corporation is hereby amended to read in its entire-
ty as follows:
1. Number of Directors; Increases in Number of
Directors.
(a) The number of Directors shall not be
less than ten nor more than 20 (unless increased
to more than 20 pursuant to subsection (b) of this
Section 1 or Section 6(e) of this ARTICLE FIFTH)
as may be determined from time to time by the
affirmative vote of the majority of the Board of
Directors or as provided in subsection (b) of this
Section 1 or in Section 6(e) of this ARTICLE
FIFTH.
(b) If at any time following the Initial
Issuance Date, the Class A Holders are entitled to
elect a number of Directors pursuant to Sec-
tion 2(a) of this ARTICLE FIFTH or Section 3(d) of
the Class A Provisions that exceeds the sum of the
number of Directors elected by the Class A Holders
then serving on the Board of Directors and the
number of vacancies on the Board of Directors
which the Directors elected by the Class A Holders
or the Class A Holders are entitled to fill, the
total number of Directors shall automatically and
without further action be increased by the
smallest number necessary to enable the Class A
Holders (and the Directors elected by the Class A
Holders in the case of vacancies) to elect the
number of Directors that the Class A Holders are
entitled to elect pursuant to such Section 2(a) or
Section 3(d) of the Class A Provisions.
2. Election of Directors.
(a) Election of Directors by Class A Hold-
ers. (i) Except as otherwise provided in Sec-
tions 7(b), 7(f) and 7(k) of the Class A Pro-
visions, after the Initial Issuance Date, the
Class A Holders shall have the right, voting
separately as a class, to elect a number of
Directors equal to the greater of (x) two and
(y) the product (rounded to the nearest whole
number if such product is not a whole number) of
(I) the aggregate Percentage Ownership Interests
of the Class A Holders and (II) the total number
of Directors, provided that so long as Section 310
of the Communications Act of 1934, as amended (or
any successor provision of law) ("Section 310"),
remains in effect, under no circumstances shall
(A) the Class A Holders have the right to elect
Aliens as Directors such that the total number of
Aliens so elected by them would exceed the maximum
percentage of the total number of Directors of
this Corporation permitted under Section 310 to be
Aliens or (B) the total number of Directors
elected by the Class A Holders and serving on the
Board of Directors exceed the maximum percentage
of the total Directors of this Corporation per-
mitted under Section 310 to be elected by share-
holders that are Aliens. Such Directors elected
by the Class A Holders shall not be divided into
classes.
(ii) Upon the first to occur of (A) the
conversion of all outstanding shares of Class A
Common Stock into Common Stock pursuant to Sec-
tion 7 of the Class A Provisions, (B) the redemp-
tion of all of the outstanding shares of Class A
Preference Stock, and (C) the termination of the
Fundamental Rights as to all outstanding shares of
Class A Preference Stock pursuant to Section 7 of
the Class A Provisions, the term of office of all
Class A Directors then in office shall thereupon
terminate, the vacancy or vacancies resulting from
such termination shall be filled by the remaining
Directors then in office, acting by majority vote
of such remaining Directors, and the Director or
Directors so elected to fill such vacancy or
vacancies shall not be treated hereunder or under
the Bylaws of this Corporation as Class A Direc-
tors. If at any time the number of Directors that
the Class A Holders have the right to elect pur-
suant to this Section 2(a) shall decrease other
than as set forth in the preceding sentence, and
the Class A Holders shall not have removed or
caused to resign, in either case effective not
later than the fifteenth day following the event
that resulted in such decrease, a number of Class
A Directors so that the total number of Directors
elected by the Class A Holders then in office does
not exceed the number provided in the first
sentence of Section 2(a)(i), then the terms of
office of all Class A Directors shall terminate on
such fifteenth date. The vacancy or vacancies
resulting from such termination of the terms of
the Class A Directors shall be filled as follows:
(A) the vacancy or vacancies equal to the number
of Directors that the Class A Holders then have
the right to elect pursuant to this Section 2(a)
(after giving effect to the decrease referred to
in the preceding sentence) shall be filled as
provided in Section 4(b) of this ARTICLE FIFTH,
and (B) the remaining vacancy or vacancies shall
be filled by the remaining Directors other than
Class A Directors then in office, acting by ma-
jority vote of such remaining Directors, and the
Director or Directors so elected to fill such
vacancy or vacancies shall not be treated hereun-
der or under the Bylaws as Class A Directors.
(iii) (1) Notwithstanding anything to the
contrary in this Section 2, but subject to para-
graphs (2), (3), (4) and (5) of this Section
2(a)(iii) and the proviso set forth at the end of
the first sentence of Section 2(a)(i) of this
ARTICLE FIFTH (the "Section 2(a) Proviso"), if the
aggregate Percentage Ownership Interest of the
Class A Holders is 20% or greater, the Class A
Holders at all times shall have the right to elect
not less than 20% of the total number of
Directors, provided that, if the Section 2(a)
Proviso prevents the Class A Holders from electing
at least 20% of the total number of Directors
under such circumstances, this Corporation shall
increase the total number of Directors to a number
not greater than 20 if such increase would enable
the Class A Holders to elect at least 20% of the
total number of Directors as increased.
(2) The provisions of Section 2(a)(iii)(1) of this
ARTICLE FIFTH (the "Section 2(a)(iii)(1) Pro-
visions") shall terminate and be of no force and
effect (a "Nullification") unless reinstated in
accordance with Section 2(a)(iii)(5), if either:
(A) this Corporation delivers an opinion of
nationally-recognized U.S. tax counsel to the
effect that the Section 2(a)(iii)(1) Provi-
sions are, with respect to both FT and DT,
either not a Necessary Condition or not a
Sufficient Condition to secure any Treaty
Benefit and within 90 days of the delivery of
such opinion by this Corporation there is not
delivered to this Corporation by FT or DT an
opinion of nationally-recognized U.S. tax
counsel concluding that such provisions are a
Necessary Condition and a Sufficient Con-
dition for either FT or DT to secure a Treaty
Benefit, or
(B) this Corporation provides written notice to
FT and DT in which it agrees to accord FT and
DT those Treaty Benefits to which FT and DT
would be entitled if the Section 2(a)(iii)(1)
Provisions were in effect (the "Continuing
Treaty Benefits") and to indemnify FT and DT
on an after-tax basis against (a) any
liability arising out of according FT and DT
Continuing Treaty Benefits to the extent such
liability would not arise if the Section
2(a)(iii)(1) Provisions were in effect and
(b) the loss of those Continuing Treaty Bene-
fits that this Corporation cannot directly
accord; provided that this Corporation by
written notice to FT and DT may revoke and
withdraw such agreement to accord such Treaty
Benefits and to provide such indemnification
following the date of such notice and upon
delivery of such notice the Sec-
tion 2(a)(iii)(1) Provisions shall again
become effective. Notwithstanding any
revocation or withdrawal pursuant to the
proviso contained in the immediately preced-
ing sentence, this Corporation shall continue
to indemnify FT and DT on an after-tax basis
against any loss of Treaty Benefits to which
FT or DT, as the case may be, would have been
entitled had the Nullification described in
this Section 2(a)(iii)(2)(B) not taken place.
If a Nullification occurs under the provisions of
paragraph (A) of this Section 2(a)(iii)(2), then
after the date of any such Nullification, and
until such time as a change in facts or Applicable
Law requires a different result, this Corporation
shall accord FT and DT Treaty Benefits under the
relevant treaties between the United States and
France and the United States and Germany, but only
to the extent FT or DT, as the case may be, would
have been entitled to claim such benefits had such
Nullification not occurred.
(3) In addition to its rights under Sec-
tion 2(a)(iii)(2), this Corporation shall have the
right, from time to time after the Investment
Completion Date, to deliver to each of FT and DT a
written notice requesting that the chief tax
officer of each of FT and DT certify that FT, in
the case of the request furnished to FT, and DT,
in the case of the request furnished to DT, is
eligible to claim at least one Treaty Benefit, and
that such chief tax officer provide this Cor-
poration with other facts and information rea-
sonably requested by this Corporation that are
reasonably necessary for this Corporation to
determine whether the Section 2(a)(iii)(1) Pro-
visions are a Sufficient Condition or a Necessary
Condition to secure at least one Treaty Benefit.
Unless within 60 days of delivery of any such
request, either FT or DT delivers such requested
certificate to this Corporation, and provides such
requested facts or information, the Sec-
tion 2(a)(iii)(1) Provisions shall terminate and
be of no force or effect, unless reinstated in
accordance with Section 2(a)(iii)(5).
(4) If FT and DT determine, after the Investment Com-
pletion Date, that the Section 2(a)(iii)(1) Pro-
visions are, with respect to both FT and DT,
either not a Necessary Condition or not a
Sufficient Condition to secure at least one Treaty
Benefit, FT and DT shall deliver to this Cor-
poration a certification to such effect, and the
Section 2(a)(iii)(1) Provisions shall terminate
and be of no force or effect, unless reinstated in
accordance with Section 2(a)(iii)(5).
(5) Each of FT and DT shall have the right, at any
time after the date the Section 2(a)(iii)(1) Pro-
visions are nullified pursuant to paragraph (A)
(but not paragraph (B)) of clause (2) or clause
(3) or (4) of this Section 2(a)(iii), to deliver
to this Corporation a certificate signed by the
chief tax officer of either FT or DT to the effect
that FT or DT, as the case may be, is eligible to
claim a Treaty Benefit and an opinion of
nationally-recognized U.S. tax counsel to the
effect that the Section 2(a)(iii)(1) Provisions
are again a Necessary Condition and a Sufficient
Condition for any of FT or DT to secure a Treaty
Benefit. Upon the delivery of any such cer-
tificate and opinion, the Section 2(a)(iii)(1)
Provisions shall again become effective unless and
until they become ineffective pursuant to the
other provisions of this Section 2(a)(iii).
(6) For purposes of this Section 2(a)(iii), the term
"FT" shall include any Qualified Subsidiary of FT
organized under the laws of France and the term
"DT" shall include any Qualified Subsidiary of DT
organized under the laws of Germany.
(7) The Section 2(a)(iii)(1) Provisions shall be a
"Necessary Condition" with respect to any Treaty
Benefit if FT or DT would not be entitled to claim
such Treaty Benefit unless such Section
2(a)(iii)(1) Provisions are in effect.
(8) The Section 2(a)(iii)(1) Provisions shall be a
"Sufficient Condition" with respect to any Treaty
Benefit if FT and DT will otherwise fulfill all
other relevant conditions to claiming such Treaty
Benefit if the Section 2(a)(iii)(1) Provisions are
in effect.
(b) Election of Directors by Other
Holders.
(i) Subject to clause (ii) below, the
holders of Common Stock shall have the right
to elect that number of Directors equal to
the excess of (x) the total number of Direc-
tors over (y) the sum of the number of Di-
rectors the Class A Holders are entitled to
elect and the number of Directors, if any,
that the holders of Preferred Stock, voting
separately by class or series, are entitled
to elect in accordance with the provisions of
ARTICLE SIXTH of these Articles of Incor-
poration. The Class A Holders shall have no
right to vote for Directors under this Sec-
tion 2(b)(i).
(ii) So long as Section 310 remains in
effect, under no circumstances shall an Alien
Director elected by the holders of Common
Stock be qualified to serve as a Director if
the number of Aliens who would then be serv-
ing as members of the Board of Directors,
including such elected Alien, would con-
stitute more than the maximum number of
Aliens permitted by Section 310 on the Board
of Directors.
(iii) The Directors (other than the
Directors elected by the Class A Holders and
any Directors elected by the holders of any
one or more classes or series of Preferred
Stock having the right, voting separately by
class or series, to elect Directors) shall be
divided into three classes, designated Class
I, Class II and Class III, with the term of
office of one class expiring each year. The
number of Class I, Class II and Class III
Directors shall consist, as nearly as prac-
ticable, of one third of the total number of
Directors (other than the Directors elected
by the Class A Holders and any Directors
elected by the holders of any one or more
classes or series of Preferred Stock having
the right, voting separately by class or
series, to elect Directors). At each annual
meeting of stockholders of this Corporation
after the Initial Issuance Date, successors
to the class of Directors whose term expires
at that annual meeting shall be elected for a
three-year term.
(iv) Whenever the holders of any one or
more classes or series of Preferred Stock
shall have the right, voting separately by
class or series, to elect Directors at an
annual or special meeting of stockholders,
the election, term of office, filling of
vacancies and other features of such direc-
torships shall be governed by the terms of
these Articles of Incorporation applicable
thereto, and such Directors so elected shall
not be divided into classes pursuant to this
ARTICLE FIFTH unless expressly provided by
such terms.
3. Change in Number of Directors. If the number
of Directors (other than Directors elected by Class A
Holders and any Directors elected by the holders of any
one or more classes or series of Preferred Stock having
the right, voting separately by class or series, to
elect Directors) is changed, any increase or decrease
shall be apportioned among the classes so as to main-
tain the number of Directors in each class as nearly
equal as possible.
4. Term of Office.
(a) Each Director shall be elected for a
three year term. A Director shall hold office
until the annual meeting for the year in which his
term expires and until his successor shall be
elected and shall qualify to serve, subject to
prior death, resignation, retirement, disqualifi-
cation or removal from office.
(b) Any vacancy on the Board of Directors
(whether resulting from an increase in the total
number of Directors, the departure of one of the
Directors or otherwise) may be filled by the
affirmative vote of a majority of the Directors
elected by the same class or classes of stock-
holders which would be entitled to elect the
Director who would fill such vacancy if the annual
meeting of stockholders of this Corporation were
held on the date on which such vacancy occurred,
provided that at any time when there is only one
such Director so elected and then serving, such
Director may fill such vacancy and, provided,
further, that at any time when there are no such
Directors then serving, the stockholders of the
class or classes entitled to elect the Director
who will fill such vacancy shall have the right to
fill such vacancy and, provided, further, that, so
long as any Class A Stock is outstanding, any
vacancy to be filled by the Director or Directors
elected by the holders of Common Stock may not be
filled with a Person who, upon his election, would
not be an Independent Director or would be an
Alien, as the case may be, if the effect of such
election would be that less than a majority of the
Board of Directors following such election would
be Independent Directors, or that the number of
Aliens who would then be serving on the Board of
Directors would constitute more than the maximum
number of Aliens permitted on the Board of Direc-
tors under Section 310.
(c) Any additional Director of any class
elected to fill a vacancy resulting from an in-
crease in the number of Directors of such class
shall hold office for a term that shall coincide
with the remaining term of the Directors of
that class, but, except as provided in Sec-
tion 2(a)(ii) of this ARTICLE FIFTH, in no case
will a decrease in the number of Directors shorten
the term of any incumbent Director. Any Director
elected to fill a vacancy not resulting from an
increase in the number of Directors shall have the
same remaining term as that of his predecessor.
5. Rights, Powers, Duties, Rules and Procedures;
Amendment of Bylaws. (a) Except to the extent
prohibited by law or as set forth in these Articles of
Incorporation or the Bylaws, the Board of Directors
shall have the right (which, to the extent exercised,
shall be exclusive) to establish the rights, powers,
duties, rules and procedures that from time to time
shall govern the Board of Directors and each of its
members, including, without limitation, the vote
required for any action by the Board of Directors, and
that from time to time shall affect the Directors'
power to manage the business and affairs of this Corpo-
ration. No Bylaw shall be adopted by stockholders
which shall impair or impede the implementation of the
foregoing.
(b) The Board of Directors is expressly autho-
rized and empowered, in the manner provided in the
Bylaws of this Corporation, to adopt, amend and repeal
the Bylaws of this Corporation in any respect to the
full extent permitted by the General Corporation Code
not inconsistent with the laws of the General Corpora-
tion Code or with these Articles of Incorporation,
provided that the following provisions of the Bylaws
may not be amended, altered, repealed or made inopera-
tive or ineffective by adoption of other provisions to
the Bylaws without the affirmative vote of the holders
of record of a majority of the shares of Class A Stock
then outstanding, voting separately as a class, at any
annual or special meeting of stockholders, the notice
of which shall have specified or summarized the
proposed amendment, alteration or repeal of the Bylaws:
ARTICLE III, SECTIONS 2, 4, 5, 8 AND 9; ARTICLE IV,
SECTIONS 5, 6, 10, 11 AND 12; ARTICLE VI, SECTION 1;
AND ARTICLE VII, SECTIONS 1 AND 2.
6. Removal; Changes in Status; Preferred Stock
Directors.
(a) Except as provided in paragraphs (c) or
(d) of this Section 6, a Director (other than a
Director elected by the Class A Holders or by the
holders of any class or series of Preferred Stock
having the right, voting separately by class or
series, to elect Directors) may be removed only
for cause. No Director so removed may be rein-
stated for so long as the cause for removal con-
tinues to exist. Such removal for cause may be
effected only by the affirmative vote of the
holders of a majority of shares of the class or
classes of stockholders which were entitled to
elect such Director.
(b) A Director elected by the holders of the
Class A Stock may be removed with or without
cause. If removed for cause, no Director so
removed may be reinstated for so long as the cause
for removal continues to exist. Removal may be
effected with or without cause by the affirmative
vote of the holders of a majority of shares of
Class A Stock or with cause by the affirmative
vote of the holders of two-thirds of the shares of
the Common Stock, the Class A Stock and other
capital stock of this Corporation entitled to
general voting power, voting together as a single
class.
(c) If a Director elected by the holders of
Common Stock who was not, at the time of his elec-
tion to the Board of Directors, an Alien, subse-
quently becomes an Alien, the effect of which
would be that the number of Aliens who would then
be serving as members of the Board of Directors,
including the Director who changed status, would
constitute more than the maximum number of Aliens
permitted on the Board of Directors under Sec-
tion 310, such Director shall upon his change in
status automatically and without further action be
removed from the Board of Directors.
(d) So long as any Class A Stock is out-
standing, if an Independent Director elected by
the holders of Common Stock subsequently ceases to
be an Independent Director, the effect of which
would be that the Independent Directors who would
then be serving as members of the Board of Direc-
tors would not constitute a majority of the Board
of Directors, such Director shall automatically
and without further action upon his change in
status be removed from the Board of Directors.
(e) (i) So long as any Class A Stock is
outstanding, if a Director elected by the holders
of any class or series of Preferred Stock having
the right, voting separately by class or series,
to elect Directors (a "Preferred Stock Director")
is an Alien, or after election becomes an Alien,
the effect of which would be that the number of
Aliens who would then be serving as members of the
Board of Directors (including such Preferred Stock
Director) would constitute more than the maximum
number of Aliens permitted on the Board of Direc-
tors under Section 310, the total number of Direc-
tors shall automatically and without further
action be increased by the smallest number neces-
sary to enable the Class A Holders (and the Direc-
tors elected by the Class A Holders in the case of
vacancies) to elect Aliens as Directors to the
fullest extent that the Class A Holders are enti-
tled to elect Directors pursuant to Section 2(a)
of this ARTICLE FIFTH without violating the re-
quirements of Section 310.
(ii) So long as any Class A Stock is out-
standing, if a Preferred Stock Director is not an
Independent Director, or after election ceases to
be an Independent Director, the effect of which
would be that the Independent Directors who would
then be serving as members of the Board of Direc-
tors would not constitute a majority of the Board
of Directors, the total number of Directors shall
automatically and without further action be in-
creased by the smallest number necessary so that
the number of Directors then serving who are not
Independent Directors (including such Preferred
Stock Director and any vacancies which the holders
of Class A Stock have a right to fill) constitute
less than a majority of the Board of Directors.
7. Definitions. Certain capitalized terms used
in this ARTICLE FIFTH without definition shall have the
meanings set forth in Section 12 of the Class A Pro-
visions.
3. The introductory paragraph to ARTICLE SIXTH of the
Articles of Incorporation of this Corporation is hereby
amended to read in its entirety as follows:
The total number of shares of capital stock which may
be issued by this Corporation is 2,020,000,000, of
which 500,000,000 shares shall be Class A Common Stock
with a par value of $2.50 per share (hereinafter, the
"Class A Common Stock"); 1,000,000,000 shares shall be
Common Stock with a par value of $2.50 per share
(hereinafter, the "Common Stock"); 500,000,000 shares
shall be Class A Preference Stock with a par value of
$1.00 per share (hereinafter, the "Class A Preference
Stock"); and 20,000,000 shares shall be Preferred Stock
(herein referred to as the "Preferred Stock," such term
not to include the Class A Preference Stock) without
par value.
4. The portion of such ARTICLE SIXTH entitled GENERAL
PROVISIONS RELATING TO ALL STOCK is hereby amended to
read in its entirety as follows:
GENERAL PROVISIONS RELATING TO ALL STOCK
1. Preemptive Rights; Cumulative Voting. No
holder of shares of capital stock of any class of this
Corporation or holder of any security or obligation
convertible into shares of capital stock of any class
of this Corporation shall have any preemptive right
whatsoever to subscribe for, purchase or otherwise
acquire shares of capital stock of any class of this
Corporation, whether now or hereafter authorized;
provided that this provision shall not prohibit this
Corporation from granting, contractually or otherwise,
to any such holder, the right to purchase additional
securities of this Corporation. Stockholders of this
Corporation shall not be entitled to cumulative voting
of their shares in elections of Directors.
2. Redemption of Shares Held by Aliens. Not-
withstanding any other provision of these Articles of
Incorporation to the contrary, outstanding shares of
Common Stock and Class A Stock Beneficially Owned by
Aliens may be redeemed by this Corporation, by action
duly taken by the Board of Directors (with the approval
of a majority of the Continuing Directors (as defined
in ARTICLE SEVENTH) at a meeting at which at least
seven Continuing Directors are present, except that no
such approval of the Continuing Directors shall be
required if (i) the Fair Price Provisions have been
deleted in their entirety, (ii) the Fair Price Pro-
visions have been modified so as explicitly not to
apply to any Class A Holder, or they have been modified
in a manner reasonably satisfactory to FT and DT so as
explicitly not to apply to any transactions with any
Class A Holder contemplated under these Articles of
Incorporation, (iii) the transaction in question is not
a "Business Combination" within the meaning of the Fair
Price Provisions, or (iv) the Class A Holder that is a
party to the transaction, along with its Affiliates (as
such term is defined in Rule 12b-2 under the Securities
Exchange Act of 1934, as in effect on October 1, 1982)
and Associates (as such term is defined in Rule 12b-2
under the Securities Exchange Act of 1934, as in effect
on October 1, 1982), is no longer an "Interested Stock-
holder" or "Affiliate" of an "Interested Stockholder"
within the meaning of the Fair Price Provisions), to
the extent necessary or advisable, in the judgment of
the Board of Directors, for this Corporation or any of
its Subsidiaries to comply with the requirements of
Section 310 (each of (i) through (iv), a "Fair Price
Condition"), provided that shares of Class A Stock only
may be redeemed if, and only to the extent that, the
outstanding shares of Class A Stock represent Votes
constituting greater than 20% of the aggregate Voting
Power of this Corporation immediately prior to the time
of such redemption. The terms and conditions of such
redemption shall be as follows, subject in any case to
any other rights of a particular Alien or of this
Corporation pursuant to any contract or agreement
between such Alien and this Corporation:
(a) except as provided in Section 2(f), the
redemption price of the shares to be redeemed
pursuant to this Section 2 of these GENERAL PRO-
VISIONS RELATING TO ALL STOCK of ARTICLE
SIXTH shall be equal to the Market Price of such shares
on the third Business Day prior to the date notice
of such redemption is given pursuant to subsec-
tion (d) of this Section 2, provided that, except
as provided in clause (f), below, such redemption
price as to any Alien who purchased such shares of
Common Stock after ____, 1995 [FN]Date of Proxy
Statement to be inserted. and within one
year prior to the Redemption Date shall not (un-
less otherwise determined by the Board of Direc-
tors) exceed the purchase price paid by such Alien
for such shares;
(b) the redemption price of such shares may be
paid in cash, Redemption Securities or any
combination thereof;
(c) if less than all of the shares Beneficially
Owned by Aliens are to be redeemed, the shares
to be redeemed shall be selected in such manner
as shall be determined by the Board of Directors,
which may include selection first of the most
recently purchased shares thereof, selection by
lot or selection in any other manner determined by
the Board of Directors to be equitable, provided
that this Corporation shall in all cases be entitled to
redeem shares of Common Stock Beneficially
Owned by Aliens prior to redeeming any shares of
Class A Common Stock Beneficially Owned by Aliens;
(d) this Corporation shall give notice of
the Redemption Date at least 30 days prior to the
Redemption Date to the record holders of the
shares selected to be redeemed (unless waived in
writing by any such holder) by delivering a writ-
ten notice by first class mail, postage pre-paid,
to the holders of record of the shares selected to
be redeemed, addressed to such holders at their
last address as shown upon the stock transfer
books of this Corporation (each such notice of
redemption specifying the date fixed for redemp-
tion, the redemption price, the place or places of
payment and that payment will be made upon presen-
tation and surrender of the certificates repre-
senting such shares), provided that the Redemption
Date may be the date on which written notice shall
be given to record holders if the cash or Redemp-
tion Securities necessary to effect the redemption
shall have been deposited in trust for the benefit
of such record holders and subject to immediate
withdrawal by them upon surrender of the stock
certificates for their shares to be redeemed;
(e) on the Redemption Date, unless this
Corporation shall have defaulted in paying or
setting aside for payment the cash or Redemption
Securities payable upon such redemption, any and
all rights of Aliens in respect of shares so
redeemed (including without limitation any rights
to vote or participate in dividends), shall cease
and terminate, and from and after such Redemption
Date such Aliens shall be entitled only to receive
the cash or Redemption Securities payable upon
redemption of the shares to be redeemed; and
(f) such other terms and conditions as the
Board of Directors shall determine to be equita-
ble, provided that, if any shares of Class A Stock
are redeemed pursuant to this Section 2 of these
GENERAL PROVISIONS RELATING TO ALL STOCK of
ARTICLE SIXTH, the redemption price of any such
shares redeemed shall be a per share price equal
to (i) in the case of Class A Common Stock the
greater of (A) the Market Price of a share of
Common Stock on the Redemption Date and (B) the
Weighted Average Price paid by the Class A Holders
for the Class A Common Stock together with a stock
appreciation factor thereon (calculated on the
basis of a 365-day year) at the rate of 3.88%
through and including the Redemption Date, such
stock appreciation factor to be calculated, on an
annual compounding basis, from the date of
purchase of such Class A Common Stock until the
Redemption Date (the "Alternative Price"), and
(ii) in the case of Class A Preference Stock, its
Liquidation Preference, provided, that if this
Corporation redeems any shares of Class A Common
Stock after the third anniversary of the Invest-
ment Completion Date, the redemption price of any
such shares redeemed shall be the Market Price of
a share of Common Stock on the Redemption Date.
The redemption price to be paid to the Class A
Holders shall be modified in accordance with
Article IX of the Stockholders' Agreement if
either (i) such redemption is effected on or prior
to the third anniversary of the Investment Com-
pletion Date, or (ii) such redemption is effected
within the 120-day period described in the last
sentence of Section 2.11 of the Stockholders'
Agreement (as such period may be extended pursuant
thereto) following an election by this Corporation
to redeem shares in accordance with such Section.
Any notice that is mailed as herein provided shall be
conclusively presumed to have been duly given, whether
or not the holder of shares to be redeemed received
such notice, provided that all notices to be given to
the Class A Holders shall be made and deemed delivered
in accordance with Section 13 of the Class A
Provisions; and failure to give such notice by mail, or
any defect in such notice, to holders of shares
designated for redemption shall not affect the validity
of the proceedings for the redemption of any other
shares.
3. Beneficial Ownership Inquiry.
(a) This Corporation may by written notice
require a Person that is a holder of record of
Common Stock or Class A Stock or that this Corpo-
ration knows to have, or has reasonable cause to
believe has, Beneficial Ownership of Common Stock
or Class A Stock to certify that, to the knowledge
of such Person:
(i) no Common Stock or Class A Stock as
to which such Person has record ownership or
Beneficial Ownership is Beneficially Owned by
Aliens; or
(ii) the number and class or series of
shares of Common Stock or Class A Stock owned
of record or Beneficially Owned by such
Person that are owned of record or Bene-
ficially Owned by Persons that are Aliens are
as set forth in such certificate.
(b) With respect to any Common Stock or
Class A Stock identified by such Person in re-
sponse to Section 3(a)(ii) above, this Corporation
may require such Person to provide such further
information as this Corporation may reasonably
require in order to implement the provisions of
Section 2 of these GENERAL PROVISIONS RELATING
TO ALL STOCK of ARTICLE SIXTH.
(c) For purposes of applying Section 2 of
these GENERAL PROVISIONS RELATING TO ALL
STOCK of ARTICLE SIXTH with respect to any
Common Stock or Class A Stock, in the event of the
failure of any Person to provide the certificate or other
information to which this Corporation is entitled pur-
suant to this Section, this Corporation in its
sole discretion may presume that the Common Stock
or Class A Stock in question is, or is not, Bene-
ficially Owned by Aliens.
4. Factual Determinations. The Board of Direc-
tors shall have the power and duty to construe and
apply the provisions of Sections 2 and 3 of these
GENERAL PROVISIONS RELATING TO ALL STOCK of
ARTICLE SIXTH and, with respect to shares of Common
Stock, to make all determinations necessary or desirable to
implement such provisions, including but not limited
to: (a) the number of shares of Common Stock that are
Beneficially Owned by any Person; (b) whether a Person
is an Alien; (c) the application of any other defini-
tion of these Articles of Incorporation to the given
facts; and (d) any other matter relating to the appli-
cability or effect of Section 2 of these GENERAL PROVI-
SIONS RELATING TO ALL STOCK of ARTICLE SIXTH.
5. Loss of Voting Rights. If (a) there is a
breach by FT, DT, any Qualified Subsidiary, any
Strategic Investor or any Qualified Stock Purchaser of
any of the provisions of Sections 3.1(a) or 3.2(b) (as
it relates to matters described in Section 3.1(a)) of
the Standstill Agreement or any corresponding provision
of any Qualified Subsidiary Standstill Agreement, Stra-
tegic Investor Standstill Agreement or Qualified Stock
Purchaser Standstill Agreement, (b) there is a willful
breach in any material respect by FT, DT, any Qualified
Subsidiary, any Strategic Investor or any Qualified
Stock Purchaser of any provision of Section 3.1 (other
than Section 3.1(a)) of the Standstill Agreement or any
corresponding provision of any Qualified Subsidiary
Standstill Agreement, Strategic Investor Standstill
Agreement or Qualified Stock Purchaser Standstill
Agreement, or (c) a Government Affiliate or Related
Company (each as defined in the Standstill Agreement)
takes an action which if taken by FT or DT would
violate Sections 3.1 or 3.2(b) (as it relates to
matters other than those described in Section 3.1(a))
of the Standstill Agreement, then FT and its Qualified
Subsidiaries (except in the case of a breach arising
from the action of a Government Affiliate of Germany, a
Related Company of DT or a Strategic Investor in a
Qualified Subsidiary of DT in which FT is not an
investor), DT and its Qualified Subsidiaries (except in
the case of a breach arising from the action of a
Government Affiliate of France, a Related Company of FT
or a Strategic Investor in a Qualified Subsidiary of FT
in which DT is not an investor) and each Qualified
Stock Purchaser shall not be entitled to vote any of
their shares of capital stock of this Corporation with
respect to any matter or proposal arising from, relat-
ing to or involving, such breach or action, and no such
purported vote by such Class A Holders on such matter
shall be effective or shall be counted.
6. Definitions. Certain capitalized terms used
in these GENERAL PROVISIONS RELATING TO ALL STOCK
without definition shall have the meanings set forth in
Section 12 of the provisions of ARTICLE SIXTH entitled
GENERAL PROVISIONS RELATING TO CLASS A STOCK.
5. The following shall be inserted immediately before
the portion of such ARTICLE SIXTH entitled GENERAL PROVI-
SIONS RELATING TO COMMON STOCK:
GENERAL PROVISIONS RELATING TO COMMON STOCK
AND CLASS A STOCK
1. Except as expressly set forth in ARTI-
CLE FIFTH of these Articles of Incorporation or in the
provisions of ARTICLE SIXTH entitled GENERAL PROVISIONS
RELATING TO ALL STOCK and GENERAL PROVISIONS RELATING
TO CLASS A STOCK, each share of Common Stock and each
share of Class A Common Stock shall be entitled to one
Vote, and the shares of Class A Preference Stock shall
be entitled to the number of Votes equal to the number
of Class A Conversion Shares or, if the Conversion
Price has not yet been Fixed, the number of Class A
Conversion Shares determined as if the Conversion Price
had been Fixed on the Initial Issuance Date at the
Minimum Price, on all matters in respect of which the
holders of Common Stock are entitled to vote, and the
Class A Holders and the holders of Common Stock shall
vote together with the holders of all other classes or
series of capital stock which have general voting power
on all such matters as a single class.
2. Dividends shall be declared and paid only out
of net income or earned surplus of this Corporation.
3. (a) In the event of any voluntary or invol-
untary liquidation, dissolution or winding up of this
Corporation, after payment or provision for payment of
the debts and other liabilities of this Corporation,
including the liquidation preferences of any series of
Preferred Stock and of the Class A Preference Stock,
the holders of Class A Common Stock and the holders of
Common Stock shall be entitled to share ratably in the
remaining net assets of this Corporation.
(b) The Class A Preference Stock shall rank
junior to any series of Preferred Stock in the payment
of dividends and the distribution of assets upon the
liquidation, dissolution or winding-up of this
Corporation, unless any such series of Preferred Stock
is specifically made junior to or to rank on a parity
with the Class A Preference Stock in the payment of
dividends or the distribution of assets upon liquida-
tion, dissolution or winding-up of this Corporation.
In the event of any voluntary or involuntary liquida-
tion, dissolution or winding up of this Corporation, no
holder of shares of Class A Preference Stock shall
receive any distributions or payments with respect to
such shares unless prior thereto holders of all series
of Preferred Stock, which have not been specifically
made junior to or to rank on a parity with the Class A
Preference Stock in the distribution of assets upon
liquidation, dissolution or winding-up of this
Corporation, shall have received with respect to each
share of such Preferred Stock the amounts to be paid
with respect to such share upon the liquidation,
dissolution or winding-up of this Corporation as
provided in ARTICLE SIXTH of these Articles of
Incorporation.
(c) In the event of any voluntary or invol-
untary liquidation, dissolution or winding-up of this
Corporation, (i) no distribution shall be made to the
holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding-up)
to the Class A Preference Stock, unless prior
thereto the holders of shares of Class A Preference
Stock shall have received with respect to all
outstanding shares of Class A Preference Stock (other
than Section 7(i) Preference Shares), the Adjusted
Aggregate Liquidation Preference, and (ii) the Section
7(i) Preference Shares shall, immediately prior to such
liquidation, dissolution or winding-up, automatically
convert (without the payment of any consideration) into
that number of duly issued, fully paid and
nonassessable shares of Common Stock equal to the
number of shares of Common Stock purchased by the Class
A Holders and converted into shares of Class A
Preference Stock pursuant to Section 7(i) of the Class
A Provisions, for an aggregate conversion price equal
to the Section 7(i) Aggregate Purchase Price.
(d) Neither the merger nor consolidation of
this Corporation, nor the Transfer of all or part of
its assets, shall be deemed to be a voluntary or
involuntary liquidation, dissolution or winding up of
this Corporation within the meaning of this clause 3.
6. The portion of such ARTICLE SIXTH entitled GENERAL
PROVISIONS RELATING TO COMMON STOCK is hereby amended to
read in its entirety as follows:
GENERAL PROVISIONS RELATING TO COMMON STOCK
1. Dividends. The holders of the Common Stock
shall be entitled to receive, when and if declared by
the Board of Directors out of funds legally available
therefor, dividends in respect of the Common Stock
equivalent on a per share basis to those payable on the
Class A Common Stock. Dividends on the Common Stock
shall be payable on the same date fixed for the payment
of the corresponding dividend on shares of Class A
Common Stock and shall be in an amount per share equal
to the full per share amount of any cash dividend paid
on shares of Class A Common Stock, plus the full per
share amount (payable in kind) of any non-cash dividend
paid on shares of Class A Common Stock, provided that
if this Corporation shall declare and pay any dividends
on shares of Class A Common Stock payable in shares of
Class A Common Stock, or in options, warrants or rights
to acquire shares of Class A Common Stock, or in secu-
rities convertible into or exchangeable for shares of
Class A Common Stock, then in each case, this Corpo-
ration shall declare and pay, at the same time that it
declares and pays any such dividend, an equivalent
dividend per share on the Common Stock payable in
shares of Common Stock, or options, warrants or rights
to acquire shares of Common Stock, or securities
convertible into or exchangeable for shares of Common
Stock.
2. No Dilution or Impairment. No reclassifica-
tion, subdivision or combination of the outstanding
shares of Class A Stock shall be effected directly or
indirectly (including, without limitation, any reclas-
sification, subdivision or combination effected pur-
suant to a consolidation, merger or liquidation) unless
at the same time the Common Stock is reclassified,
subdivided or combined so that the holders of the
Common Stock are entitled, in the aggregate, to Voting
Power representing the same percentage of the Voting
Power of this Corporation relative to the Class A Stock
as was represented by the shares of Common Stock out-
standing immediately prior to such reclassification,
subdivision or combination, subject to the limitations,
restrictions and conditions on such rights contained
herein.
7. The following shall be inserted immediately after
the portion of such ARTICLE SIXTH entitled GENERAL PRO-
VISIONS RELATING TO COMMON STOCK:
GENERAL PROVISIONS RELATING TO
CLASS A STOCK
1. Rights and Privileges. (a) Except as
otherwise set forth in ARTICLE FIFTH of these Articles
of Incorporation, that portion of ARTICLE SIXTH
entitled GENERAL PROVISIONS RELATING TO ALL STOCK, or
the Class A Provisions, the holders of Class A Common
Stock shall be entitled to all of the rights and
privileges pertaining to the ownership of Common Stock
without any limitations, prohibitions, restrictions or
qualifications whatsoever, and shall be entitled to
such other rights and privileges as are expressly set
forth in ARTICLE FIFTH of these Articles of
Incorporation, that portion of ARTICLE SIXTH entitled
GENERAL PROVISIONS RELATING TO ALL STOCK or in the
Class A Provisions.
(b) Except as otherwise set forth in ARTICLE
FIFTH of these Articles of Incorporation, that portion
of ARTICLE SIXTH entitled GENERAL PROVISIONS RELATING
TO ALL STOCK, or in the Class A Provisions, the holders
of Class A Preference Stock shall be entitled to all of
the rights and privileges to which Kansas law accords a
separate class of preferred stock, without any
limitations, prohibitions, restrictions or
qualifications whatsoever, and shall be entitled to
such other rights and privileges as are expressly set
forth in ARTICLE FIFTH of these Articles of
Incorporation, that portion of ARTICLE SIXTH entitled
GENERAL PROVISIONS RELATING TO ALL STOCK or in the
Class A Provisions.
2. Dividends. (a) (i) The holders of shares
of Class A Common Stock shall be entitled to receive,
when and if declared by the Board of Directors out of
funds legally available therefor, dividends in respect
of the Class A Common Stock equivalent on a per share
basis to those payable on the Common Stock. Dividends
on the Class A Common Stock shall be payable on the
same date fixed for the payment of the corresponding
dividend on shares of Common Stock and shall be in an
amount per share equal to the full per share amount of
any cash dividend paid on shares of Common Stock, plus
the full per share amount (payable in kind) of any non-cash
dividend paid on shares of Common Stock.
(ii) The holders of shares of Class A Preference
Stock, in preference to the holders of Common Stock and
of any other outstanding junior capital stock (includ-
ing any series of Preferred Stock which is specifically
made junior to the Class A Preference Stock in the
payment of dividends), but after payment of dividends
to holders of shares of all series of Preferred Stock
that are not specifically made junior to or made to
rank on a parity with the Class A Preference Stock in
the payment of dividends, shall be entitled to receive,
when and if declared by the Board of Directors out of
funds legally available therefor, quarterly dividends
payable in cash on the first day of January, April,
July and October in each year (each such date being
referred to herein as a "Quarterly Dividend Payment
Date" and each such quarter a "Dividend Payment
Period"), commencing on the first Quarterly Dividend
Payment Date after the Initial Issuance Date, in an
amount per share (rounded to the nearest cent) equal to
(x) if the Conversion Price has not yet been Fixed, (1)
during the first two years following the Initial
Issuance Date, the greater of (A) the Minimum Dividend
Amount per share of Class A Preference Stock multiplied
by 43,118,018 and divided by the number of shares of
Class A Preference Stock then outstanding, and (B) the
Per Share Common Dividend (as defined below) multiplied
by the Dividend Factor divided by the number of shares
of Class A Preference Stock then outstanding, and (2)
following the second anniversary of the Initial
Issuance Date, an identical amount per Dividend Payment
Period resulting in an annual dividend rate equal to
12.5 basis points over the Applicable LIBOR Rate, (y)
if the Conversion Price has been Fixed but the
Investment Completion Date has not occurred, the
aggregate per share amount of all dividends and
distributions (other than Extraordinary Dividends and
other dividends or distributions that result in an
adjustment pursuant to the Class A Provisions and other
than a dividend payable in shares of Cellular Common
Stock in connection with the Cellular Spin-off if it
occurs prior to the delivery of a Notice of Abandon-
ment)(the "Per Share Common Dividend"), declared on the
Common Stock since the immediately preceding Quarterly
Dividend Payment Date, or, with respect to the first
Quarterly Dividend Payment Date, since the Initial
Issuance Date, in each case multiplied by a fraction,
the numerator of which shall be $47.225 and the denomi-
nator of which shall be the Conversion Price at the
time in effect, or (z) if the Investment Completion
Date has occurred, the aggregate per share amount of
all dividends (including, without limitation, all non-cash
dividends except for dividends described in clause
(iii), below) declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date,
or, with respect to the first Quarterly Dividend
Payment Date, since the Investment Completion Date, in
each case multiplied by a fraction, the numerator of
which shall be the Liquidation Preference of a share of
Class A Preference Stock and the denominator of which
shall be the Conversion Price at the time in effect.
With respect to shares of Class A Preference Stock
outstanding for less than a full Dividend Payment
Period, the dividend paid with respect to such shares
shall be equal to the dividend paid with respect to
such entire Dividend Payment Period times a fraction
the numerator of which shall be the number of days
during such Dividend Payment Period that such shares
were outstanding and the denominator shall be the
number of days during such Dividend Payment Period.
(iii) If this Corporation shall declare and pay
any dividend on shares of Common Stock payable in
shares of Common Stock, or in options, warrants or
rights to acquire shares of Common Stock, or in secu-
rities convertible into or exchangeable for shares of
Common Stock, then in each case, this Corporation shall
declare and pay, at the same time that it declares and
pays any such dividend, an equivalent dividend per
share on the Class A Common Stock.
(b) Dividends under Section 2(a)(ii) of the Class
A Provisions shall begin to accrue and be cumulative on
outstanding shares of Class A Preference Stock from the
Initial Issuance Date. Accrued but unpaid dividends
shall accumulate but shall not bear interest.
Dividends paid on the shares of Class A Preference
Stock in an amount less than the total amount of such
dividends at the time accrued and payable on such
shares shall be allocated pro rata on a share-by-share
basis among all such shares at the time outstanding.
The Board of Directors may fix a record date for the
determination of holders of shares of Class A Pre-
ference Stock entitled to receive payment of a dividend
or distribution declared thereon, which record date
shall be not more than 30 days prior to the date fixed
for the payment thereof.
(c) Notwithstanding any other provision of this
Section 2, the holders of shares of Class A Preference
Stock shall not be entitled to receive shares, other
equity interests of any direct or indirect Subsidiary
of this Corporation or cash or other property
distributed to the holders of Common Stock in
connection with the Cellular Spin-off.
3. Other Class A Preference Stock Terms.
(a) (i) Except as otherwise provided in clause
(iii) below, all of the outstanding shares of Class A
Preference Stock shall automatically convert, without
the requirement of any payment by the Class A Holders,
upon the date (the "Conversion Date") that is the later
of (A) the earliest of (I) 35 Trading Days after the
Cellular Spin-off Date, (II) 30 days after the date on
which this Corporation has delivered a notice to each
Class A Holder that the Cellular Spin-off has been
abandoned (a "Notice of Abandonment"), and (III) the
60th day after the fifth anniversary of the Initial
Issuance Date, and (B) five Business Days after the
date on which the Conversion Price becomes Fixed, into
that number of validly issued, fully paid and non-
assessable shares of Class A Common Stock or, if the
Fundamental Rights shall have terminated as to all
outstanding shares of Class A Preference Stock, Common
Stock, equal to the quotient of the aggregate of the
Liquidation Preference of the outstanding shares of
Class A Preference Stock divided by the applicable
Conversion Price specified in Section 3(b); provided
that, if the Conversion Price has not been Fixed by the
fifth anniversary of the Initial Issuance Date, the
Class A Preference Stock shall only be convertible
pursuant to Section 3(b)(v) of the Class A Provisions.
In addition, shares of Class A Preference Stock shall
convert, without the requirement of any payment by the
Class A Holders, as otherwise provided in these Class A
Provisions. To the extent any such conversion would
result in the Class A Holders that are Aliens owning
securities with Votes constituting in the aggregate
more than 20% of the Voting Power of this Corporation
outstanding at that time, such number of shares of
Class A Preference Stock as may be required so that the
20% level is not exceeded shall, at the election of
this Corporation, effected by delivery of a notice to
each Class A Holder at least five Business Days prior
to the Conversion Date, be either (a) redeemed by this
Corporation within ten Business Days of the delivery of
such notice in cash and/or Redemption Securities in an
amount equal to the Liquidation Preference of such
shares as modified to comply with the requirements of
Article IX of the Stockholders' Agreement, or (b) sold
by such Class A Holders in third party or open market
sales (a "Requested Sale"), provided that this
Corporation shall not be permitted to so redeem shares
of Class A Preference Stock unless a majority of the
Continuing Directors shall have first approved, at a
meeting at which at least seven Continuing Directors
are present, such redemption, unless a Fair Price
Condition has been satisfied. In the case of any
Requested Sale, the Class A Holders shall sell such
Shares, as promptly as practicable following receipt of
the notice referred to in the immediately preceding
sentence, but in no event later than 120 days following
the receipt thereof, as extended day-for-day for each
day that such sales are actually delayed during such
time period because (A) the Requested Sale cannot be
effected due to the anti-fraud rules of the U.S.
securities laws, or (B) this Corporation has delayed a
proposed registration of such shares in accordance with
Section 1.4 of the Registration Rights Agreement. Each
Class A Holder shall, promptly upon the conclusion of
such Requested Sale, deliver to this Corporation a
notice stating that such Requested Sale has been
concluded and indicating the total amount of
consideration received therefrom (the "Total Requested
Sale Proceeds"). Following receipt of such notice,
this Corporation shall promptly pay (a "Requested Sale
Supplementary Payment") to each Class A Holder the
excess, if any, of the aggregate Liquidation Preference
of such shares sold by such Class A Holder over the
Total Requested Sale Proceeds (in each case as modified
to comply with the requirements of Section 9.2 of the
Stockholders' Agreement).
(ii) At any time on or after the Conversion Date,
any holder of a certificate or certificates repre-
senting shares of Class A Preference Stock may
surrender such certificates at the principal office of
this Corporation (or at any other location designated
by both this Corporation and the Class A Holders),
which certificate or certificates, if this Corporation
shall so require, shall be duly endorsed to this Cor-
poration or in blank, or accompanied by proper instru-
ments of transfer to this Corporation. This Cor-
poration shall, as soon as practicable after such
deposit of a certificate or certificates evidencing
shares of Class A Preference Stock and compliance with
any other conditions herein contained, deliver at such
office (or such other location) to the person for whose
account such certificate or certificates were so
surrendered, or to the nominee or nominees of such
person, a certificate or certificates evidencing the
number of shares of Class A Common Stock or Common
Stock, as the case may be, to which such person shall
be entitled as aforesaid. The conversion of the shares
of Class A Preference Stock shall be deemed to have
been made, for all purposes, as of the Conversion Date
without regard to the date of the surrender of the
certificates for shares of Class A Preference Stock,
and the person or persons entitled to receive the Class
A Common Stock or Common Stock, as the case may be,
deliverable upon conversion of such Class A Preference
Stock shall be treated for all purposes as the record
holder or holders of such Class A Common Stock or
Common Stock, as the case may be, on the Conversion
Date.
(iii) Notwithstanding anything to the contrary in
this Section 3(a), if after the Cellular Spin-off Date
shares of Class A Preference Stock that previously were
not convertible because the Cellular Spin-off Date had
not occurred otherwise would be converted pursuant to
this Section 3(a) into Class A Common Stock or Common
Stock at a Conversion Price greater than 135% of the
Average Sprint Price for the 20 Trading Days ended on
the tenth Business Day prior to the Conversion Date,
the Class A Holders may elect, by delivery of a notice
to this Corporation executed by or on behalf of all
Class A Holders, at least two Business Days prior to
the Conversion Date, to defer such conversion until the
first Business Day following the thirtieth day after
the occurrence of a period of 20 Trading Days in which
the Conversion Price is less than or equal to 135% of
the Average Sprint Price over such period or until the
Class A Holders shall otherwise elect, by delivery of a
notice to this Corporation executed by or on behalf of
each Class A Holder, to convert ten Business Days after
delivery of such notice the shares of Class A
Preference Stock at the Conversion Price set forth in
Section 3(b) without regard to this clause (iii). If
the Class A Holders elect to defer conversion in
accordance with this Section 3(a)(iii), the shares of
Class A Preference Stock shall not be subject to con-
version pursuant to Section 3(b)(v) or redemption
pursuant to Section 3(c).
(b) The Conversion Price of the Class A
Preference Stock shall initially be established at the
time and at the price set forth below in this Section
3(b) (such Conversion Price to be subject in each case
to adjustment as provided in the Class A Provisions):
(i) If the Average Sprint Price determined at the
Initial Issuance Date is within the Sprint Price Range,
the Conversion Price shall be Fixed on the Initial
Issuance Date at the Target Price.
(ii) If the Average Sprint Price determined at
the Initial Issuance Date is above the Upper Threshold
Sprint Price, the Conversion Price shall be Fixed on
the Initial Issuance Date at the Maximum Price
(determined by reference to such Average Sprint Price).
(iii) If the Average Sprint Price determined at
the Initial Issuance Date is below the Lower Threshold
Sprint Price,
(x) the Conversion Price shall be Fixed on
the Initial Issuance Date at the Minimum Price if
this Corporation has elected, by delivery of a
notice to each of FT and DT at least five Business
Days before the Initial Issuance Date, to estab-
lish the Conversion Price at the Minimum Price
(determined by reference to such Average Sprint
Price), and the Conversion Price shall be Fixed on
the Initial Issuance Date at the Target Price if
FT and DT have elected, by delivery at least five
Business Days before the Initial Issuance Date, of
a notice to this Corporation executed by each of
FT and DT, to establish the Conversion Price at
the Target Price, the first such notice delivered
to be effective, provided that this Corporation
may only deliver such a notice if a majority of
the Continuing Directors shall have first
approved, at a meeting at which at least seven
Continuing Directors are present, Fixing the
Conversion Price on the Initial Issuance Date at
the Minimum Price, unless a Fair Price Condition
has been satisfied;
(y) if no timely election has been made by
this Corporation or by FT and DT as contemplated
by clause (x) above, and
(1) if, prior to the second anniversary
of the Initial Issuance Date, the Cellular
Spin-off Date has occurred and the Average
Sprint Price for any period of 20 consecutive
Trading Days following the Cellular Spin-off
Date has been at or above the New Lower
Threshold Sprint Price, the Conversion Price
shall, effective on the first day following
the end of such 20-day period, be Fixed at
the New Target Price, provided that if the
Cellular Spin-off Date shall have occurred
prior to the second anniversary of the
Initial Issuance Date and the Average Sprint
Price during any Spin-off Trading Period is
at or above the Modified Lower Threshold, the
Conversion Price shall be Fixed, effective on
the first day following such Spin-off Trading
Period, at the New Target Price;
(2) if, prior to the second anniversary
of the Initial Issuance Date, the Cellular
Spin-off Date has not occurred and the
Average Sprint Price for any period of 20
consecutive Trading Days has been at or above
the Lower Threshold Sprint Price, the
Conversion Price shall be Fixed on the day
following the end of such 20-day period at
the Target Price;
(3) at any time prior to the second
anniversary of the Initial Issuance Date,
(i) if the Cellular Spin-off Date has
occurred, this Corporation or the Class A
Holders, by notice delivered, in the case of
this Corporation to each Class A Holder, and
in the case of the Class A Holders, to this
Corporation by or on behalf of each Class A
Holder, the first such notice delivered to be
effective, may elect to Fix the Conversion
Price, effective on the date of such notice,
at (A) if the Class A Holders make such
election, the New Target Price or (B) if this
Corporation makes such election, the Minimum
Price (determined by reference to such
Average Sprint Price for the 20 consecutive
Trading Day period ended five days before the
date of such election, provided that, if the
Cellular Spin-off Date has occurred fewer
than 25 Trading Days prior to the delivery of
such notice, the Conversion Price shall be
determined by reference to such Average
Sprint Price for the 20 consecutive Trading
Day period beginning on the Trading Day
following the Cellular Spin-off Date and the
Conversion Date shall be Fixed five days
after the end of such 20-day period),
provided that this Corporation may only
deliver such a notice if a majority of the
Continuing Directors shall have first
approved, at a meeting at which at least
seven Continuing Directors are present,
Fixing the Conversion Price on the date of
such notice at the Minimum Price, unless a
Fair Price Condition has been satisfied; and
(ii) if the Cellular Spin-off Date has not
occurred, either this Corporation or the
Class A Holders, by notice delivered, in the
case of this Corporation, to each Class A
Holder, and in the case of the Class A
Holders, to this Corporation by or on behalf
of each Class A Holder, the first such notice
delivered to be effective, may elect to Fix
the Conversion Price, effective on the date
of such notice, at (A) if the Class A Holders
make such election, the Target Price, or (B)
if this Corporation makes such election, the
Minimum Price (determined by reference to the
Average Sprint Price for the 20 consecutive
Trading Day period ended five days before the
date of such election), provided that this
Corporation may only deliver such a notice if
a majority of the Continuing Directors shall
have first approved, at a meeting at which at
least seven Continuing Directors are present,
Fixing the Conversion Price on the date of
such notice at the Minimum Price, unless a
Fair Price Condition has been satisfied;
(4) (A) if neither the Cellular Spin-off Date nor
the conversion of all of the outstanding Class A
Preference Stock into Class A Common Stock or
Common Stock has occurred prior to the second
anniversary of the Initial Issuance Date and the
Conversion Price has not previously been Fixed, the
Conversion Price will, automatically on such
second anniversary, become Fixed at the Mini-
mum Price, determined by reference to the
Average Sprint Price for the 20 consecutive
Trading Days ended five Business Days before
such second anniversary; provided that, if
such Average Sprint Price is then below the
Second Anniversary Lower Threshold Sprint
Price, this Corporation may elect to defer
the Fixing of the Conversion Price, by notice
delivered to each Class A Holder within such
five Business Day period, so that if, at any
time during the following three years, the
Average Sprint Price shall be at least the
Second Anniversary Lower Threshold Sprint
Price (if the Cellular Spin-off Date shall
not have occurred) or 93.308% of the New
Lower Threshold Sprint Price (if the Cellular
Spin-off Date shall have so occurred), the
Conversion Price shall be Fixed at 93.308% of
the Target Price (if the Cellular Spin-off
Date shall not have so occurred) and 93.308%
of the New Target Price (if the Cellular
Spin-off Date shall have so occurred),
provided that if the Cellular Spin-off Date
shall have occurred prior to the fifth
anniversary of the Initial Issuance Date and
the Average Sprint Price during any Spin-off
Trading Period is at or above the Modified
New Lower Threshold, the Conversion Price
shall be Fixed, effective on the day
following such Spin-off Trading Period, at
93.308% of the New Target Price. At any time
during such three year period, this
Corporation may elect, by notice delivered to
each Class A Holder, to cause the Conversion
Price to be Fixed, effective on the date of
such notice, at the Minimum Price (determined
by reference to the Average Sprint Price for
the 20 Trading Days ended five Business Days
before the date of such election, provided
that, if the Cellular Spin-off Date shall
occur during the last 20 Trading Day period
before the second anniversary of the Initial
Issuance Date, all calculations to have been
based upon such period under this clause (A)
shall be deferred until the first 20 con-
secutive Trading Day Period after the
Cellular Spin-off Date, on which such
calculations shall be then based), provided
that this Corporation may only deliver such a
notice if a majority of the Continuing
Directors shall have first approved, at a
meeting at which at least seven Continuing
Directors are present, Fixing the Conversion
Price on the date of such notice at the
Minimum Price, unless a Fair Price Condition
has been satisfied, and FT and DT may elect
by notice delivered to this Corporation by or
on behalf of each Class A Holder to cause the
Conversion Price to be Fixed, effective on
the date of such notice, at a price equal to
93.308% of the Target Price, the first such
notice to be effective;
(B) if, prior to such second
anniversary, the Cellular Spin-off Date has
occurred, but the conversion of all of the
outstanding shares of Class A Preference
Stock has not taken place and the Conversion
Price has not previously been Fixed, the
Conversion Price will, automatically on such
second anniversary, become Fixed at the
Minimum Price, determined by reference to the
Average Sprint Price for the 20 consecutive
Trading Days ended five Business Days before
the second anniversary of the Initial
Issuance Date, provided that if such Average
Sprint Price is then below 93.308% of the New
Lower Threshold Sprint Price, this
Corporation may elect to defer the Fixing of
the Conversion Price by notice delivered to
each Class A Holder within such five Business
Day period so that if, at any time during the
following three years, the Average Sprint
Price shall be at least equal to 93.308% of
the New Lower Threshold Sprint Price, the
Conversion Price will be Fixed at 93.308% of
the New Target Price. At any time during
such three year period, this Corporation may
elect by notice delivered to each Class A
Holder at any time after the fifth Business
Day following the end of the 20 Trading Day
period starting on the first Trading Day
following the Cellular Spin-off Date, to
cause the Conversion Price to be Fixed,
effective on the date of such notice, at the
Minimum Price (determined by reference to the
Average Sprint Price for the 20 Trading Days
ended five Business Days before the date of
such election), provided that this
Corporation may only deliver such a notice if
a majority of the Continuing Directors shall
have first approved, at a meeting at which at
least seven Continuing Directors are present,
Fixing the Conversion Price on the date of
such notice at the Minimum Price, unless a
Fair Price Condition has been satisfied, and
the Class A Holders may elect, by notice to
that effect delivered to this Corporation by
or on behalf of each Class A Holder, at any
time to cause the Conversion Price to be
Fixed effective on the date of such notice,
at a price equal to 93.308% of the New Target
Price, the first such notice delivered to be
effective.
(iv) If the Conversion Price has been Fixed
before the Cellular Spin-off Date, effective at the
Cellular Spin-off Date, the Conversion Price fixed with
reference to the Maximum Price, Minimum Price or Target
Price, as the case may be, automatically and without
notice, will be re-fixed with reference to the New
Maximum Price, New Minimum Price or New Target Price,
respectively, the calculation of such New Minimum Price
or such New Maximum Price to be based on the Average
Sprint Price used to calculate the related Maximum
Price or Minimum Price, as the case may be.
(v) If the Conversion Price has not been Fixed by
a date which is five years after the Initial Issuance
Date and this Corporation shall not have redeemed all
of the outstanding shares of Class A Preference Stock
as required under Section 3(c), the Class A Preference
Stock shall be convertible only at the election of the
Class A Holders made at any time after the end of ten
Business Days after the 60th day after such fifth
anniversary, by notice to that effect delivered to this
Corporation by or on behalf of each Class A Holder,
such conversion to occur five Business Days after
delivery of such notice, at a Conversion Price equal to
135% of the Average Sprint Price for the 20 Trading
Days ended on the Trading Day five Trading Days prior
to such conversion.
(vi) Upon the issuance of shares of Class A
Preference Stock at the Optional Shares Closing (as
defined in the Investment Agreement) or as provided in
Section 7(i) of the Class A Provisions or Article V or
VI of the Stockholders' Agreement, the Conversion Price
shall be adjusted further to be the quotient of (x) the
sum of (I) the number of outstanding shares of Class A
Preference Stock prior to such issuance times the
Conversion Price of such shares prior to this
adjustment and (II) the number of such shares received
upon such issuance times the purchase price thereof,
divided by (y) the total number of shares of Class A
Preference Stock outstanding after such issuance.
(vii) In addition to any other adjustments pro-
vided for in the Class A Provisions,
(x) the Conversion Price and, as appropriate, the
per share dollar amounts reflected in or used in
calculating the Adjusted Cellular Price, the Net
Cellular Acquisition Amount, the Net Cellular
Indebtedness, the Average Sprint Price, the Average
Cellular Price, the Lower Threshold Sprint Price, the
New Lower Threshold Sprint Price, the Upper Threshold
Sprint Price, the New Upper Threshold Sprint Price, the
Second Anniversary Lower Threshold Sprint Price, the
Target Price, the New Target Price, the Minimum Price,
the New Minimum Price, the Maximum Price, the New
Maximum Price, the Modified Lower Threshold, the
Modified New Lower Threshold, and the Cellular Spin-off
Reduction Factor shall be adjusted to reflect any stock
split, subdivision, stock dividend payable in shares of
Common Stock or other reclassification, consolidation
or combination of this Corporation's Voting Securities
or similar action or transaction undertaken after June
14, 1994, provided that no such adjustment shall be
made to the Average Sprint Price, the Average Cellular
Price, the Minimum Price or the New Minimum Price with
respect to events described in this clause (x) which
occur prior to the beginning of the measurement period
with respect to such price, and provided, further, that
no adjustment shall be made under this subsection
(vii)(x) in respect of the Cellular Spin-off or any
Spin-off.
(y) the Conversion Price and, as appropriate, the
per share dollar amounts reflected in or used in
calculating the Lower Threshold Sprint Price, the New
Lower Threshold Sprint Price, the Upper Threshold
Sprint Price, the New Upper Threshold Sprint Price, the
Second Anniversary Lower Threshold Sprint Price, the
Target Price, the New Target Price, the Minimum Price,
the New Minimum Price, the Modified Lower Threshold,
the Modified New Lower Threshold, the Maximum Price and
the New Maximum Price shall be adjusted to reflect any
Extraordinary Dividend or Dividends and any non-cash
dividend or distribution (except as described in clause
(x) and except for dividends or distributions of equity
securities of any Subsidiary of this Corporation pur-
suant to a Spin-off or the Cellular Spin-off) paid on
or with respect to shares of Common Stock, or any
reorganization or reclassification pursuant to which
holders of Common Stock receive cash, property or
(except as described in clause (x), above) securities
of this Corporation, in each case occurring after June
22, 1995, as follows, provided that no such adjustment
shall be made to the Minimum Price or the New Minimum
Price with respect to events described in this clause
(y) which occur prior to the determination of such
price:
(A) if such dividend, distribution or event
occurs on or prior to the date the Conversion
Price is Fixed,
(1) the Target Price, the Maximum
Price, the New Target Price, the Minimum
Price, the New Minimum Price and the New
Maximum Price shall be decreased dollar for
dollar by the amount of cash and the Fair
Market Value of all non-cash property or
securities distributed with respect to a
share of Common Stock (the "Per Share
Distributed Value");
(2) the Lower Threshold Sprint Price
and the New Lower Threshold Sprint Price
shall be decreased by the Per Share
Distributed Value divided by 1.35; and
(3) the Upper Threshold Sprint Price
and the New Upper Threshold Sprint Price
shall be decreased by the Per Share
Distributed Value divided by 1.25; and
(B) if such dividend, distribution or event
occurs after the date the Conversion Price is
Fixed, the Conversion Price shall be decreased by
subtracting an amount equal to the Per Share
Distributed Value.
(c) Unless the Class A Holders have exercised
their option to defer conversion of the Class A
Preference Stock pursuant to Section 3(a)(iii), each
outstanding share of Class A Preference Stock shall be
redeemed by this Corporation within five Business Days
after the 60th day following the fifth anniversary of
the Initial Issuance Date for cash at a redemption
price per share equal to its Liquidation Preference
(such price, the "Class A Preference Redemption
Price"), such payment to be delivered to each Class A
Holder no later than five Business Days after such
redemption, provided that the failure to so redeem at
such time shall not preclude this Corporation from so
redeeming at any time thereafter.
(d) If any time after the termination of Funda-
mental Rights as to all outstanding Shares of Class A
Preference Stock, this Corporation shall not have
declared and paid all accrued and unpaid dividends on
the Class A Preference Stock as provided in Section 2
of the Class A Provisions for four consecutive
Quarterly Dividend Payment Dates, then, in addition to
any other voting rights provided in these Articles of
Incorporation, the holders of the Class A Preference
Stock shall have the exclusive right, voting separately
as a class, to elect two Directors. The right of the
holders of the Class A Preference Stock to elect the
Class A Directors pursuant to this Section 3(d) shall
continue until all such accrued and unpaid dividends
shall have been paid. At such time, the terms of the
Class A Directors shall terminate. At any time when
the holders of the Class A Preference Stock shall have
thus become entitled to elect Class A Directors, a
special meeting of the Class A Holders shall be called
for the purpose of electing such Class A Directors, to
be held within 30 days after the right of the holders
of the Class A Preference Stock to elect such Class A
Directors shall arise, upon notice given in the manner
provided by law or the Bylaws of this Corporation for
giving notice of a special meeting of the Class A
Holders (provided, however, that such a special meeting
shall not be called if the annual meeting of stock-
holders is to convene within said 30 days). At any
such special meeting or at any annual meeting at which
the Class A Holders shall be entitled to elect Class A
Directors, the holders of a majority of the then out-
standing Class A Preference Stock present in person or
by proxy shall be sufficient to constitute a quorum for
the election of such directors. The persons elected by
the holders of the Class A Preference Stock at any
meeting in accordance with the terms of the preceding
sentence shall become Class A Directors on the date of
such election.
(e) Whenever quarterly dividends or other divi-
dends or distributions payable on the Class A
Preference Stock as provided in Section 2 of the Class
A Provisions are in arrears, thereafter and until all
accrued and unpaid dividends and distributions, whether
or not declared, on shares of Class A Preference Stock
outstanding shall have been paid in full, this Corpo-
ration shall not:
(i) declare or pay dividends or make any
other distributions on any shares or stock ranking
junior (either as to dividends or upon liquida-
tion, dissolution or winding-up) to the Class A
Preference Stock;
(ii) declare or pay dividends, or make any
other distributions, on any shares of stock rank-
ing on a parity (either as to dividends or upon
liquidation, dissolution or winding-up) with the
Class A Preference Stock except dividends paid
ratably on the Class A Preference Stock and all
such parity stock on which dividends are payable
or in arrears in proportion to the total amounts
to which the holders of all such shares are then
entitled; or
(iii) redeem or purchase or otherwise
acquire for consideration shares of any stock
junior (either as to dividends or upon liquida-
tion, dissolution or winding-up) to the Class A
Preference Stock, provided that, notwithstanding
the foregoing, this Corporation may at any time
redeem, purchase or otherwise acquire shares of
stock of any such class junior as to either or
both dividends or upon liquidation, dissolution or
winding-up, in exchange for, or out of the net
cash proceeds from the substantially simultaneous
sale of, other shares of stock of any class which
is also junior as to either or both dividends or
upon liquidation, dissolution or winding-up, as
the case may be.
(f) This Corporation shall not permit any Sub-
sidiary of this Corporation to purchase or otherwise
acquire for consideration any shares of stock of this
Corporation unless this Corporation could, under Sec-
tion 3(e), above, purchase or otherwise acquire such
shares at such time and in such manner.
4. Special Rights to Disapprove Certain Actions.
At least 40 days prior to the occurrence of a Subject
Event (as defined below), this Corporation shall
deliver to each Class A Holder a notice (a "Notice") of
such proposed Subject Event, setting forth in reason-
able detail the nature of such proposed Subject Event.
This Corporation shall thereafter be entitled to effect
such proposed Subject Event unless within 30 days of
delivery of such Notice there shall have been a Class A
Action exercising the special rights of the Class A
Holders to disapprove such Subject Event, provided that
the Class A Holders shall have no special right to
disapprove any action (x) which this Corporation is
required to take to comply with its obligations or
exercise its rights under the Investment Agreement, the
Stockholders' Agreement, the Standstill Agreement, the
Registration Rights Agreement or the Joint Venture
Agreement or any document executed pursuant to any such
agreement or the Class A Provisions, or (y) taken to
comply with Applicable Law or the rules of any exchange
or market system on which securities of this Cor-
poration may be traded, and provided, further, that any
action to be taken by this Corporation in reliance on
clause (y) of the foregoing proviso is the only action
commercially reasonably available to this Corporation
to effect such compliance, as certified to the Class A
Holders by resolution of the Independent Directors.
For purposes of these Articles, the term "Subject
Event" means only the following transactions and only
if such transactions are consummated within the respec-
tive time periods indicated below:
(a) Until the second anniversary of the
Initial Issuance Date or, in the case of clause
(iv) below, the later of (x) the second
anniversary of the Initial Issuance Date and
(y) the Investment Completion Date:
(i) any transaction or series of re-
lated transactions (other than Exempt Asset
Divestitures or Exempt Long Distance Asset
Divestitures) that results, directly or indi-
rectly, in Transfers of assets of this Corpo-
ration or its Subsidiaries with an aggregate
Fair Market Value (calculated in the case of
each Transfer as at the date this Corporation
or any such Subsidiary enters into a defini-
tive agreement to effect such Transfer) of
more than 20 percent of Market Capitalization
(calculated (x) in the case of a single
transaction as at the date this Corporation
or any such Subsidiary enters into a defini-
tive agreement to effect such Transfer and
(y) in the case of a series of related trans-
actions, as at the date this Corporation or
any such Subsidiary enters into a definitive
agreement to effect the last of such Trans-
fers);
(ii) any transaction or series of re-
lated transactions (including, without limi-
tation, mergers, purchases of stock or as-
sets, joint ventures or other acquisitions),
but excluding any transaction constituting an
Exempt Asset Divestiture or Exempt Long Dis-
tance Asset Divestiture, resulting, directly
or indirectly, in the acquisition by this
Corporation or its Subsidiaries for cash or
debt securities maturing in less than one
year from the date of issuance of (x) assets
constituting or predominantly used in Core
Businesses ("Core Business Assets") for a
purchase price or, in the case of a series of
related transactions, an aggregate purchase
price that exceeds 20 percent of Market Capi-
talization (calculated as at the date this
Corporation or any such Subsidiary enters
into a definitive agreement to effect such
transaction or, in the case of a series of
related transactions, as at the date this
Corporation or any such Subsidiary enters
into a definitive agreement to effect the
last of such related transactions) or
(y) other assets for a purchase price or, in
the case of a series of related transactions,
for an aggregate purchase price that exceeds
five percent of Market Capitalization (calcu-
lated as at the date this Corporation or any
such Subsidiary enters into a definitive
agreement to effect such transaction or, in
the case of a series of related transactions,
as at the date this Corporation or any such
Subsidiary enters into a definitive agreement
to effect the last of such related transac-
tions), provided that, if any such other
assets are proposed to be obtained in the
course of a proposed transaction in which
both Core Business Assets and other assets
are to be acquired and the ratio of the fair
market value of the Core Business Assets to
be acquired to the fair market value of the
other assets to be acquired exceeds 1.75 to
1, then the holders of the Class A Stock
shall not be entitled to disapproval rights
with respect to such transaction except as
provided in clause (x) of this Section
4(a)(ii);
(iii) issuance by this Corporation of any
capital stock or debt (including, without
limitation, direct or indirect issuances such
as pursuant to mergers and other business
combinations) with both (x) a class vote to
elect one or more Directors and (y) rights
with respect to dispositions of Long Distance
Assets or other assets, or share issuances,
which rights are in scope and duration as
extensive as or more extensive than the com-
parable related rights granted to the Class A
Holders in these Articles of Incorporation or
in the Stockholders' Agreement, provided that
this Section 4(a)(iii) shall not apply to the
extent that (a) such rights are required by
Applicable Law, (b) the holders of any series
of Preferred Stock have the right, voting
separately as a class, to elect a number of
Directors of this Corporation upon the oc-
currence of a default in payment of dividends
or redemption price, or (c) such rights
described in clause (y) are granted in con-
nection with borrowings and are reflected in
a loan agreement, credit agreement, trust
indenture or similar agreement or instrument;
(iv) declaration of any Extraordinary
Dividends during any one year that, individ-
ually or in the aggregate, exceed five per-
cent of Market Capitalization as at the Busi-
ness Day immediately preceding the declara-
tion of the last such dividend or distri-
bution (other than in connection with
transactions within the meaning of clause (e)
of the definition of Exempt Asset Dives-
titures or clause (g) of the definition of
Exempt Long Distance Asset Divestitures); or
(v) any merger or other business com-
bination in which this Corporation is not the
surviving parent corporation.
(b) Until the earliest of (i) the fifth
anniversary of the Initial Issuance Date,
(ii) such time as (A) legislation has been enacted
repealing Section 310, (B) an FCC Order shall have
been issued, or (C) outside counsel to this Corpo-
ration with a nationally recognized expertise in
telecommunications regulatory matters delivers to
each of FT and DT a legal opinion, addressed to
each of them, in form and substance reasonably
satisfactory to FT and DT, to the effect that
Section 310 does not prohibit FT and DT from
owning the Long Distance Assets proposed to be
Transferred by this Corporation, (iii) the
delivery by FT, DT, Atlas or any of their
Affiliates (or a Permitted Designee (as such term
is defined in the Joint Venture Agreement)) of a
notice pursuant to Section 17.2(b) of the Joint
Venture Agreement indicating the agreement to
purchase all of the Sprint Venture Interests (as
such term is defined in the Joint Venture Agree-
ment) following an offer by this Corporation or
Sprint Sub pursuant to Section 17.2(a) of the
Joint Venture Agreement, and (iv) the delivery by
this Corporation and/or Sprint Sub of a notice
pursuant to Section 17.3(a) of the Joint Venture
Agreement exercising the put right to sell all of
their Sprint Venture Interests (as such term is
defined in the Joint Venture Agreement) to FT, DT
and Atlas (or a Permitted Designee (as such term
is defined in the Joint Venture Agreement)), a di-
rect or indirect Transfer (other than in connec-
tion with an Exempt Long Distance Asset Divesti-
ture) after the Initial Issuance Date by this
Corporation or its Subsidiaries of Long Distance
Assets with a Fair Market Value (calculated as at
the date this Corporation or any such Subsidiary
enters into a definitive agreement to effect such
Transfer) that, when aggregated with the Fair
Market Value of all other Long Distance Assets
Transferred by this Corporation or its Subsidiar-
ies since the Initial Issuance Date (other than in
Exempt Long Distance Asset Divestitures) (cal-
culated in each case as at the date this Corpora-
tion or any such Subsidiary enters into a defini-
tive agreement to effect each such respective
Transfer) exceeds five percent of the Fair Market
Value of the Long Distance Assets of this Corpo-
ration and its Subsidiaries, on a consolidated
basis (calculated as at the date this Corporation
or any such Subsidiary enters into a definitive
agreement to effect the last such Transfer).
(c) Except as otherwise provided in Sec-
tion 7 of the Class A Provisions, for so long as
any shares of Class A Stock are outstanding:
(i) any amendment to these Articles of
Incorporation, the Bylaws or the Rights
Agreement that would adversely affect the
rights of the Class A Holders under these
Articles of Incorporation or the Bylaws;
(ii) issuance by this Corporation (in-
cluding, without limitation, pursuant to
mergers or other business combinations) of
any series or class of capital stock or debt
security with Supervoting Powers;
(iii) any merger or other business com-
bination involving this Corporation that
results directly or indirectly in a Change of
Control, unless the surviving corporation
expressly (x) assumes all of this Corpora-
tion's obligations in respect of the rights
of the Class A Holders under Section 4(b) of
the Class A Provisions and the provisions of
Article III of the Stockholders' Agreement
(except, in each case, as they may be other-
wise terminated pursuant to the Class A
Provisions or the Stockholders' Agreement)
and all of the provisions of the Registration
Rights Agreement and (y) agrees to be bound
by any applicable Tie-Breaking Vote in accor-
dance with Articles 17 and 18 of the Joint
Venture Agreement;
(iv) any merger or other business com-
bination involving this Corporation that does
not result directly or indirectly in a Change
of Control unless:
(x) this Corporation survives as
the parent entity; or
(y) the surviving corporation
expressly assumes all of this Corpora-
tion's obligations in respect of the
rights of the Class A Holders granted
pursuant to these Articles of Incorpo-
ration and the Class A Provisions and
under the Bylaws, the Stockholders'
Agreement and the Registration Rights
Agreement; or
(v) if any shares of Class A Preference
Stock are outstanding, issuance by this
Corporation of shares of Preferred Stock
which have rights to the payment of dividends
or the distribution of assets upon the
liquidation, dissolution or winding up of
this Corporation senior to such rights of the
Class A Preference Stock.
5. Special Rights Regarding Major Issuances. At
least 90 days before the consummation, directly or
indirectly, by this Corporation of any Major Issuance
prior to the second anniversary of the Initial Issuance
Date, this Corporation shall deliver to each Class A
Holder a notice of such proposed Major Issuance. This
Corporation shall be entitled to effect such proposed
Major Issuance (upon receipt of the requisite approval
of the Board of Directors described below) unless
within 75 days of the delivery of such notice there
shall have been a Class A Action exercising the special
rights of the Class A Holders to disapprove such Major
Issuance. In addition, so long as any Class A Stock is
outstanding, prior to effecting any Major Issuance:
(a) occurring on or prior to the fifth anni-
versary of the Initial Issuance Date, this Corpo-
ration shall obtain the prior approval of two-thirds
of the Independent Directors by resolution,
certified to the Class A Holders; and
(b) occurring after the fifth anniversary of
the Initial Issuance Date, this Corporation shall
obtain the prior approval of a majority of the
Independent Directors.
6. Special Rights Regarding Holdings by Major
Competitors of FT or DT.
(a) Until the tenth anniversary of the Initial
Issuance Date, at least 90 days prior to consummating
any transaction or taking any other action that,
directly or indirectly, would result in, or is taken
for the purpose of encouraging or facilitating, a Major
Competitor of FT or DT or of the Joint Venture having,
or being granted by this Corporation any right, per-
mission or approval to acquire (other than pursuant to
a Strategic Merger), a Percentage Ownership Interest of
ten percent or more (a "Major Competitor Transaction"),
this Corporation shall provide each Class A Holder with
notice of such Major Competitor Transaction in the
manner set forth in Subsection (c) below and, if there
is a Class A Action exercising the special rights of
the Class A Holders to disapprove such Major Competitor
Transaction within 75 days of the delivery of such
notice, this Corporation shall not consummate such
Major Competitor Transaction.
(b) Until the tenth anniversary of the Initial
Issuance Date, if a Major Competitor of FT or DT or of
the Joint Venture obtains a Percentage Ownership
Interest of 20 percent or more as a result, directly or
indirectly, of a Strategic Merger:
(i) if the Class A Holders have not made the
commitment described in Article VI of the Stock-
holders' Agreement, this Corporation (or its suc-
cessor in such Strategic Merger) shall, subject to
the provisos of Sections 2.1(a)(iii) and 2.2(a) of
the Standstill Agreement, nonetheless take all
action necessary or advisable to lift all restric-
tions, contractual or otherwise, imposed by this
Corporation or such successor on the ability of
the Class A Holders, at any time after the Class A
Common Issuance Date, to purchase shares of Common
Stock or other Voting Securities from third par-
ties sufficient to permit the Class A Holders to
have a Percentage Ownership Interest equal to that
of the Major Competitor of FT or DT or of the
Joint Venture; and
(ii) this Corporation shall ensure that the
Class A Holders have rights with regard to (w) a
class vote to elect Directors, (x) class approval
and disapproval rights, (y) any other special
rights in respect of the business or operations of
this Corporation and (z) any rights to receive
special dividends, distributions or other rights
from this Corporation, which are in scope and
duration at least as extensive as any rights
granted by this Corporation to such Major Compet-
itor of FT or DT or of the Joint Venture (other
than rights deriving solely from the number of
Voting Securities owned), regardless of whether or
not the Class A Holders purchase any additional
Voting Securities.
(c) Until the tenth anniversary of the Initial
Issuance Date, this Corporation shall deliver to each
Class A Holder notice of its intent to issue Voting
Securities in a Major Competitor Transaction to any
Major Competitor of FT or DT or of the Joint Venture at
least 30 days prior to such issuance, such notice to
contain a complete and correct description in rea-
sonable detail of the transaction in question,
including, without limitation, the purchase price for
such securities, the nature of such securities, the
identity of the Major Competitor of FT or DT or of the
Joint Venture and the rights (contractual and other)
this Corporation would grant such Major Competitor.
This Corporation shall also deliver to each Class A
Holder notice of any such issuance within five days
after it occurs, such notice to contain a description
of the transaction in question and be accompanied by
complete and correct copies of all agreements,
instruments and written understandings of this Corpo-
ration, its Subsidiaries and Affiliates and such Major
Competitor of FT or DT or of the Joint Venture and the
Subsidiaries and Affiliates of such Major Competitor
executed in respect of such transaction.
7. Conversion of Shares; Termination of Funda-
mental Rights.
(a) Failure to Maintain Ownership. If, after the
Investment Completion Date, the aggregate Committed
Percentage of the Class A Holders shall be below ten
percent (i) for more than 180 consecutive days or
(ii) immediately following a Transfer of Class A Stock
by a Class A Holder, each outstanding share of Class A
Common Stock shall automatically convert (without the
payment of any consideration) into one duly issued,
fully paid and nonassessable share of Common Stock, or
if any shares of Class A Preference Stock are out-
standing, the Fundamental Rights shall terminate as to
all outstanding shares of Class A Preference Stock,
such conversion or termination to take place on the
next Business Day following the end of such 180-day
period in the case of clause (i) or on the date of such
Transfer in the case of clause (ii), provided that, if
the aggregate Committed Percentage of the Class A
Holders shall fall below ten percent for more than 180
consecutive days following the later of the Fixed
Closing Date and the date of a Major Issuance as a
result of the consummation of such Major Issuance, then
unless all of the outstanding shares of Class A Common
Stock shall have been converted earlier, or the Funda-
mental Rights shall have previously terminated as to
all outstanding shares of Class A Preference Stock, in
each case pursuant to this Section 7 of the Class A
Provisions, (x) the Class A Common Stock shall not
convert into Common Stock, or the Fundamental Rights
shall not terminate, as the case may be, until the last
to occur of (i) the third anniversary of the date of
such Major Issuance, (ii) the third anniversary of the
Fixed Closing Date and (iii) the Investment Completion
Date, and (y) the Class A Holders shall continue to be
entitled to elect Directors pursuant to ARTICLE FIFTH
of these Articles of Incorporation until the last to
occur of (i) the third anniversary of the date of such
Major Issuance, (ii) the third anniversary of the Fixed
Closing Date, and (iii) the Investment Completion Date,
but (z) after the last to occur of the expiration of
180 days following the Fixed Closing Date, 180 days
following the date of such Major Issuance, and the
Investment Completion Date, the Class A Holders shall
no longer have their rights under Sections 4, 5, 6, 7
and 8 of the Class A Provisions, and provided, further,
that such conversion shall not be considered to be an
acquisition of Common Stock for purposes of Sec-
tion 7(i) of the Class A Provisions.
(b) FT/DT Joint Venture Termination; Material
Breach of Investment Documents. (i) Each outstanding
share of Class A Common Stock shall automatically
convert (without the payment of any consideration) into
one duly issued, fully paid and nonassessable share of
Common Stock and, if any shares of Class A Preference
Stock are outstanding, the Fundamental Rights shall
terminate as to all outstanding shares of Class A
Preference Stock, if:
(t) the Sprint Parties receive the Tie-Breaking Vote
pursuant to Section 17.5 of the Joint Venture Agreement;
(u) there is an FT/DT Joint Venture Termination;
(v) FT or DT or any Qualified Subsidiary
breaches in any material respect its obligations
under Section 2.4 of the Stockholders' Agreement;
(w) FT or DT or any Qualified Subsidiary
breaches in any material respect its obligations
under Article II (other than Section 2.4) of the
Stockholders' Agreement;
(x) FT, DT or any Qualified Subsidiary
breaches any of the provisions of Article 2 (other
than Section 2.1(b)) of the Standstill Agreement
or any corresponding provision of any Qualified
Subsidiary Standstill Agreement;
(y) FT, DT or any Qualified Subsidiary
breaches any of the provisions of Sections 3.1 or
3.2 of the Standstill Agreement or any
corresponding provisions of any Qualified Subsid-
iary Standstill Agreement, in each case in a Con-
trol Context, or otherwise breaches Sections
3.1(a)(ii), (iii) or (iv) or Section 3.1(g) of the
Standstill Agreement or any corresponding provi-
sion of any Qualified Subsidiary Standstill Agree-
ment; or
(z) FT, DT or any Qualified Subsidiary
breaches any of the provisions of Sections 3.1
(except Section 3.1(a)(ii), (iii) or (iv), or
Section 3.1(g)) or 3.2 of the Standstill Agreement
or any corresponding provisions of any Qualified
Subsidiary Standstill Agreement, in each case
other than in a Control Context;
provided that, with respect to an alleged breach of the
type described in clauses (v), (w), (x), (y) or (z)
above, the Class A Holders alleged to have committed
such breach (the "Breaching Holders") shall deliver a
notice
(I) except with respect to a breach of
the type described in clause (y) above, in
accordance with clauses (ii)(x) or (iii)(x)
below, in which case no conversion of the
Class A Common Stock or termination of the
Fundamental Rights as to all outstanding
shares of Class A Preference Stock, as the
case may be, shall take place unless such
breach fails to be cured within the time
provided for cure in such clause (ii) or
(iii), as the case may be;
(II) in accordance with clauses
(ii)(y), (iii)(y) or (iv) below, in which
case no conversion of the Class A Common
Stock or termination of the Fundamental
Rights, as the case may be, shall take place
until there is issued a final nonappealable
decision or order of a court of competent
jurisdiction finding that such breach has oc-
curred and, if applicable, was not cured
within the time provided for cure in clauses
(ii) or (iii) below, as the case may be; or
(III) admitting that such a breach has
occurred, and (if applicable) cannot be cured
within the time periods provided for cure in
clauses (ii) or (iii) below, in which case
each outstanding share of Class A Common
Stock shall automatically convert (without
the payment of any consideration) into one
duly issued, fully paid and nonassessable
share of Common Stock or the Fundamental
Rights shall terminate as to all outstanding
shares of Class A Preference Stock, as the
case may be, in each case upon delivery of
such notice; and
provided, further, that if the Breaching Holders fail
to perform the actions described in clauses (I) or (II)
above within the time periods provided for performing
such actions in clauses (ii), (iii) or (iv) below, they
shall be deemed to have taken the action described in
clause (III) above.
(ii) For any alleged breach of the type described
in clauses (w), (x) or (z) of clause (i) above, the
Breaching Holders shall have the right, within five
Business Days after the date (for purposes of this
clause (ii), the "Breach Notice Date") that notice of
such breach is delivered to each Breaching Holder by
this Corporation, to deliver to this Corporation a
notice either:
(x) committing to effect a cure as soon as
practical, in which case the Breaching Holders
shall effect such cure as soon as practical, but
in no event later than the 20th Business Day from
the Breach Notice Date (or, with respect to an
alleged breach of clauses (w) or (x), if such cure
cannot be effected within such time period due to
the anti-fraud rules of the U.S. securities laws,
such longer period as is reasonably necessary to
cure such breach in a manner consistent with such
rules), provided that
(I) the Breaching Holders shall have no
right to cure unless such breach is suscep-
tible to cure;
(II) such cure period shall continue
only for so long as each Breaching Holder
shall be undertaking to effect such a cure in
a diligent manner;
(III) with respect to an alleged breach
of clause (i)(x) above, this Corporation
shall have the right at any time after the
end of such 20-day period to purchase such
number of shares of Common Stock or Class A
Stock, as the case may be, as is necessary to
return the Class A Holders to the ownership
level permitted by the Standstill Agreement
or a Qualified Subsidiary Standstill Agree-
ment, as the case may be, at a price equal to
the lower of (A) the Market Price for such
shares at the time of such redemption and (B)
the price paid by the Breaching Holders for
such shares, provided that this Corporation
may only exercise such right if a majority of
the Continuing Directors shall have first
approved, at a meeting at which at least
seven Continuing Directors are present, such
a purchase of Shares, unless a Fair Price
Condition has been satisfied; and
(IV) withdrawal of the action alleged to
have caused such breach shall not, in and of
itself, give rise to a presumption that such
breach has been cured; or
(y) disputing that such a breach has
occurred, provided that during such time as the
most recent decision or order of a court of compe-
tent jurisdiction is to the effect that such
breach has occurred and was not cured within the
time provided for cure in clause (x) of this
clause (ii), the rights provided to the Class A
Holders under Sections 4 (except 4(a)(iii) and
4(c)), 5, 6, 7 and 8 of the Class A Provisions and
the right to elect members of the Board of Direc-
tors of the holders of the Class A Stock under
ARTICLE FIFTH of these Articles of Incorporation
shall be suspended and may not be exercised by the
Class A Holders.
(iii) For any alleged breach of the type
described in clause (i)(v) above, the Breaching Holders
shall have the right, within five Business Days after
the date (for purposes of this clause (iii), the
"Breach Notice Date") that notice of such breach is
delivered to each Breaching Holder by this Corporation,
to deliver to this Corporation a notice either:
(x) committing to effect a cure as soon as
practical, in which case the Breaching Holders
shall effect such cure as soon as practical, but
in no event later than the 20th Business Day from
the Breach Notice Date (or, if such cure cannot be
effected within such time period due to the anti-fraud
rules of the U.S. securities laws, such
longer period as is reasonably necessary to cure
such breach in a manner consistent with such
rules), provided that
(I) the Breaching Holders shall have no
right to cure unless such breach is suscep-
tible to cure;
(II) such cure period shall continue
only for so long as each Breaching Holder
shall be undertaking to effect such a cure in
a diligent manner; and
(III) withdrawal of the action alleged to
have caused such breach shall not, in and of
itself, give rise to a presumption that such
breach has been cured; or
(y) disputing that such a breach has
occurred;
provided that, in each case, from the Breach Notice
Date until the earlier to occur of the cure of such
breach and the issuance of a decision or order of a
court of competent jurisdiction finding that such
breach has not occurred or was cured within the time
provided for cure in clause (x) of this clause (iii),
the rights provided to the Class A Holders under Sec-
tions 4 (except 4(a)(iii) and 4(c)), 5, 6, 7 and 8 of
the Class A Provisions and the right to elect members
of the Board of Directors of the holders of the Class A
Stock under ARTICLE FIFTH of these Articles of Incor-
poration shall be suspended and may not be exercised by
the Class A Holders; and provided, further, that
following such decision or order, such rights shall be
suspended during such time as the most recent decision
or order of a court of competent jurisdiction is to the
effect that such breach has occurred and was not cured
within the time provided for cure in clause (x) of this
clause (iii).
(iv) For any alleged breach of the type described
in clause (i)(y) above, the Breaching Holders shall
have the right, within five Business Days after the
date (for purposes of this clause (iv), the "Breach
Notice Date") that notice of such breach is delivered
to each Breaching Holder by this Corporation, to
deliver to this Corporation a notice disputing that
such a breach has occurred, provided that from the
Breach Notice Date until the issuance of a decision or
order of a court of competent jurisdiction finding that
such breach has not occurred, the rights provided to
the Class A Holders under Sections 4 (except 4(a)(iii)
and 4(c)), 5, 6, 7 and 8 of the Class A Provisions and
the right to elect members of the Board of Directors of
the holders of the Class A Stock under ARTICLE FIFTH of
these Articles of Incorporation shall be suspended and
may not be exercised by the Class A Holders; and pro-
vided, further, that following such decision or order,
such rights shall be suspended during such time as the
most recent decision or order of a court of competent
jurisdiction is to the effect that such breach has oc-
curred.
(v) For purposes of this Section 7(b), an alleged
breach shall be deemed to have occurred in a Control
Context if the action or actions alleged to have given
rise to such breach were taken in the context of
efforts by any Class A Holder or any other Person
having the purpose or effect of changing or influencing
the control of this Corporation.
(vi) No conversion pursuant to this Section 7(b)
shall be considered an acquisition for purposes of
Section 7(i) of the Class A Provisions.
(c) Failure to Purchase at Closings; Class A
Preference Stock Ownership. The Fundamental Rights
shall terminate as to all outstanding shares of Class A
Preference Stock if (i) FT or DT or any Qualified
Subsidiary which is a party to the Investment Agreement
breaches its obligation to purchase shares of Common
Stock or Class A Stock, as the case may be, under the
Investment Agreement at an Additional Preference Stock
Closing, a Supplemental Preference Stock Closing or a
Deferred Common Stock Closing, as such terms are
defined in the Investment Agreement, or (ii) if, prior
to the Investment Completion Date, the outstanding
shares of Class A Preference Stock have an aggregate
liquidation value of less than $1.5 billion as a result
of a Transfer of shares of Class A Preference Stock by
a Class A Holder (other than a Transfer contemplated by
Section 7.4(b)(i)(y) of the Stockholders' Agreement);
(d) Corporation Joint Venture Termination.
Unless the Class A Common Stock shall have been con-
verted earlier or the Fundamental Rights shall have
been terminated earlier as to all outstanding shares of
Class A Preference Stock, in each case pursuant to this
Section 7 of the Class A Provisions, if there is a
Corporation Joint Venture Termination, each outstanding
share of Class A Common Stock shall automatically
convert (without the payment of any consideration) into
one duly issued, fully paid and nonassessable share of
Common Stock or the Fundamental Rights shall terminate
as to all outstanding shares of Class A Preference
Stock, as the case may be, in each case on the third
anniversary of the date of such Corporation Joint
Venture Termination, provided that any such conversion
shall not be considered to be an acquisition of Common
Stock for purposes of Section 7(i) of the Class A
Provisions.
(e) Other Joint Venture Termination. If
(i) there is a sale of all the Venture Interests of the
Sprint Parties or the FT/DT Parties pursuant to Section
17.2, 17.3, 17.4, 19.3, 20.6 or 20.11 of the Joint
Venture Agreement or (ii) the Joint Venture is other-
wise terminated, in each case other than due to (i) an
FT/DT Joint Venture Termination or (ii) a Corporation
Joint Venture Termination:
(x) on the date of such termination, the
rights provided to the Class A Holders in Sec-
tions 4 (except Sections 4(c)(i) and 4(c)(iii)), 5
and 6 of the Class A Provisions shall terminate;
and
(y) unless the Class A Common Stock shall
have been converted, or the Fundamental Rights
shall have been terminated earlier as to all out-
standing shares of Class A Preference Stock, as
the case may be, in each case pursuant to this
Section 7 of the Class A Provisions, each out-
standing share of Class A Common Stock shall auto-
matically convert (without the payment of any
consideration) into one duly issued, fully paid
and nonassessable share of Common Stock or those
Fundamental Rights which have not been terminated
earlier as to all outstanding shares of Class A
Preference Stock pursuant to clause (x) shall
terminate, as the case may be, in each case on the
third anniversary of the date of such termination,
provided that any such conversion shall not be
considered to be an acquisition of Common Stock
for purposes of Section 7(i) of the Class A Pro-
visions.
(f) Change of Control. If there is a Change of
Control within the meaning of clause (a) of the defi-
nition of Change of Control, (i) the rights provided to
the Class A Holders in ARTICLE FIFTH of these Arti-
cles of Incorporation, and Sections 4 (except Sec-
tions 4(b), 4(c)(iii) (as to rights provided under
Section 4(b)) and 4(c)(iv) (as to rights provided under
Section 4(b)), 5 and 6 of the Class A Provisions shall
terminate upon the consummation of the transactions
contemplated thereby, provided that, prior to such con-
summation, this Corporation shall engage in good faith
negotiations with any potential acquiror of Control to
provide the Class A Holders with rights equivalent to
those provided in ARTICLE FIFTH of these Articles of
Incorporation and (ii) all, but not less than all, of
the Class A Holders shall have the right (but not the
obligation) to deliver to this Corporation a written
notice upon which delivery (x) if Class A Common Stock
is then outstanding, each outstanding share of Class A
Common Stock shall automatically convert (without the
payment of any consideration) into one duly issued,
fully paid and nonassessable share of Common Stock or
(y) if Class A Preference Stock is then outstanding,
(A) if at the time of delivery of such notice the
Conversion Price has been Fixed, the Transfer Restric-
tions shall cease to be of further force and effect,
and each share of Class A Preference Stock Transferred
thereafter (other than to a Qualified Subsidiary or
Class A Holder) shall convert at the applicable Conver-
sion Price (without the payment of any consideration)
into that number of duly issued, fully paid and non-
assessable shares of Common Stock equal to the number
of related Class A Conversion Shares, or (B) if at the
time of delivery of such notice the Conversion Price
has not been Fixed, the Class A Holders may deliver a
notice to this Corporation electing either that
(x) upon delivery of such notice, the Transfer Restric-
tions shall cease to be of further force and effect,
and each share of Class A Preference Stock Transferred
thereafter (other than to a Qualified Subsidiary or
Class A Holder) shall convert upon such Transfer at the
Target Price (without the payment of consideration)
into that number of duly issued, fully paid and non-
assessable shares of Common Stock equal to the number
of related Class A Conversion Shares, or (y) on the
31st day following delivery of such notice, the Trans-
fer Restrictions cease to be of further force and
effect, and each share of Class A Preference Stock
Transferred thereafter (other than to a Qualified
Subsidiary or Class A Holder) shall convert upon such
Transfer at the Minimum Price at the date of such
Transfer (without the payment of consideration) into
that number of duly issued, fully paid and nonassess-
able shares of Common Stock equal to the number of
related Class A Conversion Shares, provided that this
Corporation may elect within 30 days after the delivery
of notice by the Class A Holders hereunder to the
effect specified in this clause (y), in lieu of
releasing the Transfer Restrictions and having such
Shares convert at the Minimum Price, to have this
Corporation redeem each share of Class A Preference
Stock for cash at a per share price equal to its
Liquidation Preference on the 90th day following the
delivery of such notice, provided, further, that (i) if
this Corporation's notes at the date of delivery of
such notice fulfill the requirements set forth in the
proviso to the definition of "Corporation Eligible
Notes," this Corporation may, upon delivery of a notice
to each Class A Holder no fewer than ten Business Days
prior to such 90th day, in lieu of redeeming the Class
A Preference Stock for cash, issue to each Class A
Holder a Corporation Eligible Note in an amount equal
to the aggregate Liquidation Preference attributable to
the shares of Class A Preference Stock held by such
Class A Holder maturing at the earlier of (A) three
years from the date of issuance, and (B) five years
from the Initial Issuance Date, and (ii) this
Corporation shall not be permitted to elect the option
to redeem set forth in the first proviso unless a
majority of the Continuing Directors shall have first
approved, at a meeting at which at least seven
Continuing Directors are present, such redemption,
unless a Fair Price Condition has been satisfied. Any
such conversion of Class A Stock pursuant to this
clause (f) shall not be considered to be an acquisition
of Common Stock for purposes of Section 7(i) of the
Class A Provisions.
(g) Unequal Ownership. (i) If the ratio (the
"Ownership Ratio") of the Percentage Ownership Interest
of either FT or DT to the Percentage Ownership Interest
of the other exceeds the Applicable Ratio for 60 con-
secutive days following a notice of such event
delivered by this Corporation to each of FT and DT,
each share of Class A Common Stock, if any, shall
automatically convert (without the payment of any
consideration) into one duly issued, fully paid and
nonassessable share of Common Stock or the Fundamental
Rights shall terminate as to all outstanding shares of
Class A Preference Stock, as the case may be, provided
that any such conversion shall not be considered to be
an acquisition of Common Stock for purposes of Sec-
tion 7(i) of the Class A Provisions.
(ii) For purposes of calculating the Ownership
Ratio, FT and DT shall be deemed to own shares of Class
A Stock owned by a Qualified Subsidiary as follows:
(x) if only one of FT or DT owns, directly
or indirectly, Votes in such Qualified Subsidiary,
FT or DT, as the case may be, shall be deemed to
own all of the shares of Class A Stock owned by
such Qualified Subsidiary; and
(y) if both FT and DT own, directly or
indirectly, Votes in such Qualified Subsidiary,
each of FT and DT shall be deemed to own its
respective Applicable Percentage of the shares of
Class A Stock owned by such Qualified Subsidiary.
As used herein, the "Applicable Percentage" shall
mean the percentage of the equity interests of
such Qualified Subsidiary owned, directly or
indirectly, by FT or DT, as the case may be.
(h) Unauthorized Transfers. Unless approved by
this Corporation, upon any Transfer of shares of
Class A Stock (other than a Transfer to a Qualified
Subsidiary, a Qualified Stock Purchaser or to FT or DT,
in each case which Transfer is effected in accordance
with the provisions of Article II of the Stockholders'
Agreement), (i) in the case of a Transfer of Class A
Common Stock, each share of Class A Common Stock so
Transferred shall automatically convert (without the
payment of any consideration) into one duly issued,
fully paid and nonassessable share of Common Stock as
of the date of such Transfer and (ii) in the case of a
Transfer of Class A Preference Stock, (x) if at the
date of Transfer the Conversion Price has been Fixed,
each share of Class A Preference Stock so Transferred
shall automatically convert (without the payment of any
consideration) into that number of duly issued, fully
paid and nonassessable shares of Common Stock equal to
the number of related Class A Conversion Shares, or (y)
if at the date of Transfer the Conversion Price has not
been Fixed, each share of Class A Preference Stock so
Transferred shall automatically convert at the Target
Price (without the payment of any consideration) into
that number of duly issued, fully paid and
nonassessable shares of Common Stock equal to the
number of related Class A Conversion Shares, provided
that no conversion of Class A Stock pursuant to this
Section 7(h) shall be considered to be an acquisition
of Common Stock for purposes of Section 7(i) of the
Class A Provisions.
(i) Conversion of Common Stock into Class A
Stock. Unless the Fundamental Rights shall have been
previously terminated as to all outstanding shares of
Class A Preference Stock, (i) following the Class A
Common Issuance Date and until the conversion of all of
the shares of Class A Common Stock pursuant to this
Section 7, each share of Common Stock acquired by a
Class A Holder shall automatically convert (without the
payment of any consideration) into one duly issued,
fully paid and nonassessable share of Class A Common
Stock at the date of such acquisition; and (ii)
following the date of the Supplemental Preference Stock
Closing and prior to the Class A Common Issuance Date,
each share of Common Stock acquired by a Class A Holder
shall automatically convert (without payment of any
consideration) into that number of duly issued, fully
paid and nonassessable shares of Class A Preference
Stock at the date of such purchase equal to the
quotient of (A) the number of shares of Class A
Preference Stock outstanding immediately prior to such
acquisition, divided by (B) the number of Class A
Conversion Shares associated with such outstanding
shares of Class A Preference Stock.
(j) Notice of Conversion; Exchange of Stock
Certificates; Effect of Conversion of all Class A
Stock, etc. (i) Immediately upon the conversion of
shares of Class A Stock into shares of Common Stock, or
shares of Common Stock into shares of Class A Stock, as
the case may be and in each case pursuant to this
Section 7 (the shares of Class A Stock or shares of
Common Stock so converted hereinafter referred to as
the "Converted Shares"), the rights of the holders of
such Converted Shares, as such, shall cease and the
holders thereof shall be treated for all purposes as
having become the record owners of the shares of Class
A Stock or Common Stock, as the case may be, issuable
upon such conversion (the "New Shares"), provided that
such Persons shall be entitled to receive when paid any
dividends declared on the Converted Shares as of a
record date preceding the time the Converted Shares
were converted (the "Conversion Time") and unpaid as of
the Conversion Time. If the stock transfer books of
this Corporation shall be closed at the Conversion
Time, such Person or Persons shall be deemed to have
become such holder or holders of record of the New
Shares at the opening of business on the next
succeeding day on which such stock transfer books are
open.
(ii) As promptly as practicable after the Conver-
sion Time, upon the delivery to this Corporation of the
certificates formerly representing Converted Shares,
this Corporation shall deliver or cause to be deliv-
ered, to or upon the written order of the record holder
of such certificates, a certificate or certificates
representing the number of duly issued, fully paid and
nonassessable New Shares into which the Converted
Shares formerly represented by such certificates have
been converted in accordance with the provisions of
this Section 7.
(iii) This Corporation shall pay all United States
federal, state or local documentary, stamp or similar
issue or transfer taxes payable in respect of the issue
or delivery of New Shares upon the conversion of Con-
verted Shares pursuant to this Section 7, provided that
this Corporation shall not be required to pay any tax
which may be payable in respect of any registration of
Transfer involved in the issue or delivery of New
Shares in a name other than that of the registered
holder of shares converted or to be converted, and no
such issue or delivery shall be made unless and until
the person requesting such issue has paid to this
Corporation the amount of any such tax or has estab-
lished, to the satisfaction of this Corporation, that
such tax has been paid.
(iv) This Corporation shall at all times reserve
and keep available, out of the aggregate of its
authorized but unissued Class A Common Stock, Class A
Preference Stock and Common Stock and its issued Common
Stock held in its treasury, for the purpose of
effecting the conversion of the Common Stock, Class A
Preference Stock and Class A Common Stock contemplated
hereby, the full number of shares of Common Stock then
deliverable upon the conversion of all outstanding
shares of Class A Stock, and the full number of shares
of Class A Stock that would be deliverable upon
conversion of all of the shares of Common Stock and
Class A Preference Stock the Class A Holders are
permitted to acquire hereunder and under the Investment
Agreement, the Stockholders' Agreement and the
Standstill Agreement.
(v) Following conversion of all outstanding
shares of Class A Common Stock into shares of Common
Stock pursuant to this Section 7 of the Class A Provi-
sions, this Corporation shall not, directly or indi-
rectly, issue, or sell from the treasury, any shares of
Class A Common Stock. Following conversion of all
outstanding shares of Class A Preference Stock into
shares of Class A Common Stock (or Common Stock, as the
case may be) this Corporation shall not, directly or
indirectly, issue, or sell from the treasury, any
shares of Class A Preference Stock.
(k) Class A Stock Held by Qualified Stock
Purchasers. (i) If any Qualified Stock Purchaser
shall become a Major Competitor of this Corporation or
of the Joint Venture, on the date the writing referred
to in the definition of Major Competitor in Section 12
of these Class A Provisions is delivered to each
Class A Holder, each share of Class A Common Stock
owned by such Qualified Stock Purchaser shall automat-
ically convert (without the payment of any consider-
ation) into one duly issued, fully paid and nonassess-
able share of Common Stock, or if shares of Class A
Preference Stock are outstanding, the Fundamental
Rights shall terminate as to the particular shares of
Class A Preference Stock owned by such Qualified Stock
Purchaser.
(ii) Each outstanding share of Class A Common
Stock owned by a Qualified Stock Purchaser shall auto-
matically convert (without the payment of any consid-
eration) into one duly issued, fully paid and non-
assessable share of Common Stock, or if shares of Class
A Preference Stock are outstanding, the Fundamental
Rights shall terminate as to the particular shares of
Class A Preference Stock owned by such Qualified Stock
Purchaser, in each case if:
(v) such Qualified Stock Purchaser breaches
in any material respect its obligations under
Section 2.4 of the Stockholders' Agreement;
(w) such Qualified Stock Purchaser breaches
in any material respect its obligations under
Article II (other than Section 2.4) of the Stock-
holders' Agreement;
(x) such Qualified Stock Purchaser breaches
any of the provisions of Article 2 of the Quali-
fied Stock Purchaser Standstill Agreement;
(y) such Qualified Stock Purchaser breaches
any of the provisions of Section 3.1 or 3.2 of the
Qualified Stock Purchaser Standstill Agreement in
a Control Context, or such Qualified Stock
Purchaser otherwise breaches Sections 3.1(a)(ii),
(iii) or (iv) or Section 3.1(g) of the Qualified
Stock Purchaser Standstill Agreement; or
(z) such Qualified Stock Purchaser breaches
any of the provisions of Sections 3.1 (except
Section 3.1(a)(ii), (iii) or (iv), or Sec-
tion 3.1(g)) or 3.2 of the Qualified Stock Pur-
chaser Standstill Agreement, in each case other
than in a Control Context;
provided, that such Qualified Stock Purchaser shall
deliver a notice
(I) except with respect to a breach of
the type described in clause (y) above, in
accordance with clauses (iii)(x) or (iv)(x)
below, in which case no conversion of the
Class A Common Stock owned by such Qualified
Stock Purchaser shall take place and the
Fundamental Rights shall not terminate as to
the particular shares of Class A Preference
Stock owned by such Qualified Stock Purchaser
unless such breach fails to be cured within
the time provided for cure in such clause
(iii) or (iv), as the case may be;
(II) in accordance with clauses
(iii)(y), (iv)(y) or (v) below, in which case
no conversion of the Class A Common Stock
owned by such Qualified Stock Purchaser shall
take place and the Fundamental Rights shall
not terminate as to the particular shares of
Class A Preference Stock owned by such
Qualified Stock Purchaser until there is
issued a final nonappealable decision or
order of a court of competent jurisdiction
finding that such breach has occurred and, if
applicable, was not cured within the time
provided for cure in clauses (iii) or (iv)
below, as the case may be; or
(III) admitting that such a breach has
occurred, and (if applicable) cannot be cured
within the time periods provided for cure in
clauses (iii) or (iv) below, in which case
each outstanding share of Class A Common
Stock owned by such Qualified Stock Purchaser
shall automatically convert (without the
payment of any consideration) into one duly
issued, fully paid and nonassessable share of
Common Stock upon delivery of such notice, or
if shares of Class A Preference Stock are
outstanding, the Fundamental Rights shall
terminate as to the particular shares of
Class A Preference Stock owned by such
Qualified Stock Purchaser; and
provided, further, that if such Qualified Stock Pur-
chaser fails to perform the actions described in
clauses (I) or (II) above within the time periods
provided for performing such actions in clauses (iii),
(iv) or (v) below, it shall be deemed to have taken the
action described in clause (III) above.
(iii) For any alleged breach of the type
described in clauses (w), (x) or (z) of clause (ii)
above, such Qualified Stock Purchaser shall have the
right, within five Business Days after the date (for
purposes of this clause (iii), the "Breach Notice
Date") that notice of such breach is delivered to such
Qualified Stock Purchaser by this Corporation, to
deliver to this Corporation a notice either:
(x) committing to effect a cure as soon as
practical, in which case such Qualified Stock
Purchaser shall effect such cure as soon as
practical, but in no event later than the 20th
Business Day from the Breach Notice Date (or, with
respect to an alleged breach of clauses (w) or
(x), if such cure cannot be effected within such
time period due to the anti-fraud rules of the
U.S. securities laws, such longer period as is
reasonably necessary to cure such breach in a
manner consistent with such rules), provided that
(I) such Qualified Stock Purchaser
shall have no right to cure unless such
breach is susceptible to cure;
(II) such cure period shall continue
only for so long as such Qualified Stock
Purchaser shall be undertaking to effect such
a cure in a diligent manner;
(III) with respect to an alleged breach
of clause (ii)(x) above, this Corporation
shall have the right at any time after the
end of such 20-day period to purchase such
number of shares of Class A Stock as is
necessary to return such Qualified Stock
Purchaser to the ownership level permitted by
the Qualified Stock Purchaser Standstill
Agreement, at a price equal to the lower of
(A) the Market Price for such Shares at the
time of such redemption and (B) the price
paid by such Qualified Stock Purchaser for
such Shares, provided that this Corporation
may only exercise such right if a majority of
the Continuing Directors shall have first
approved, at a meeting at which at least
seven Continuing Directors are present, such
a purchase of Shares, unless a Fair Price
Condition has been satisfied; and
(IV) withdrawal of the action alleged to
have caused such breach shall not, in and of
itself, give rise to a presumption that such
breach has been cured; or
(y) disputing that such a breach has
occurred, provided that during such time as the
most recent decision or order of a court of compe-
tent jurisdiction is to the effect that such
breach has occurred and was not cured within the
time provided for cure in clause (x) of this
clause (iii), the rights provided to such Quali-
fied Stock Purchaser under Sections 4 (except
4(a)(iii) and 4(c)), 5, 6, 7 and 8 of the Class A
Provisions and the right of such Qualified Stock
Purchaser to elect members of the Board of Direc-
tors as a holder of the Class A Common Stock under
ARTICLE FIFTH of these Articles of Incorporation
shall be suspended and may not be exercised by
such Qualified Stock Purchaser.
(iv) For any alleged breach of the type described
in clause (ii)(v) above, such Qualified Stock Purchaser
shall have the right, within five Business Days after
the date (for purposes of this clause (iv), the "Breach
Notice Date") that notice of such breach is delivered
to such Qualified Stock Purchaser by this Corporation,
to deliver to this Corporation a notice either:
(x) committing to effect a cure as soon as
practical, in which case such Qualified Stock
Purchaser shall effect such cure as soon as prac-
tical, but in no event later than the 20th Busi-
ness Day from the Breach Notice Date (or, if such
cure cannot be effected within such time period
due to the anti-fraud rules of the U.S. securities
laws, such longer period as is reasonably neces-
sary to cure such breach in a manner consistent
with such rules), provided that
(I) such Qualified Stock Purchaser
shall have no right to cure unless such
breach is susceptible to cure;
(II) such cure period shall continue
only for so long as such Qualified Stock
Purchaser shall be undertaking to effect such
a cure in a diligent manner; and
(III) withdrawal of the action alleged to
have caused such breach shall not, in and of
itself, give rise to a presumption that such
breach has been cured; or
(y) disputing that such a breach has
occurred;
provided that, in each case, from the Breach Notice
Date until the earlier to occur of the cure of such
breach and the issuance of a decision or order of a
court of competent jurisdiction finding that such
breach has not occurred or was cured within the time
provided for cure in clause (x) of this clause (iv),
the rights provided to such Qualified Stock Purchaser
under Sections 4 (except 4(a)(iii) and 4(c)), 5, 6, 7
and 8 of the Class A Provisions and the right of such
Qualified Stock Purchaser to elect members of the Board
of Directors as a holder of the Class A Common Stock
under ARTICLE FIFTH of these Articles of Incorporation
shall be suspended and may not be exercised by such
Qualified Stock Purchaser; and provided, further, that
following such decision or order, such rights shall be
suspended during such time as the most recent decision
or order of a court of competent jurisdiction is to the
effect that such breach has occurred and was not cured
within the time provided for cure in clause (x) of this
clause (iv).
(v) For any alleged breach of the type described
in clause (ii)(y) above, such Qualified Stock Purchaser
shall have the right, within five Business Days after
the date (for purposes of this clause (v), the "Breach
Notice Date") that notice of such breach is delivered
to such Qualified Stock Purchaser by this Corporation,
to deliver to this Corporation a notice disputing that
such a breach has occurred, provided that from the
Breach Notice Date until the issuance of a decision or
order of a court of competent jurisdiction finding that
such breach has not occurred, the rights provided to
such Qualified Stock Purchaser under Sections 4 (except
4(a)(iii) and 4(c)), 5, 6, 7 and 8 of the Class A
Provisions and the right of such Qualified Stock Pur-
chaser to elect members of the Board of Directors as a
holder of the Class A Common Stock under ARTICLE FIFTH
of these Articles of Incorporation shall be suspended
and may not be exercised by such Qualified Stock Pur-
chaser and provided, further, that following such
decision or order, such rights shall be suspended
during such time as the most recent decision or order
of a court of competent jurisdiction is to the effect
that such breach has occurred.
(vi) For purposes of this Section 7(k), an
alleged breach shall be deemed to have occurred in a
Control Context if the action or actions alleged to
have given rise to such breach were taken in the con-
text of efforts by such Qualified Stock Purchaser or
any other Person having the purpose or effect of chang-
ing or influencing the control of this Corporation.
(vii) No conversion pursuant to this Section 7(k)
shall be considered an acquisition for purposes of
Section 7(i) of the Class A Provisions.
(l) Effect of Conversion or Termination of
Fundamental Rights. Following the earlier of
(i) conversion of all of the shares of Class A Common
Stock pursuant to this Section 7 and (ii) a termination
of the Fundamental Rights as to all outstanding shares
of Class A Preference Stock, each share of Class A
Stock issued by this Corporation pursuant to the
Investment Agreement, the Stockholders' Agreement or
these Articles of Incorporation shall automatically
convert (without the payment of any consideration) into
one duly issued, fully paid and nonassessable share of
Common Stock, provided that such conversion shall not
be considered an acquisition of Common Stock for pur-
poses of Section 7(i) of the Class A Provisions.
(m) Exclusionary Tender Offer. If the Board of
Directors shall determine not to oppose a tender offer
by a Person other than FT, DT or any of their respec-
tive Affiliates for Voting Securities of this Cor-
poration representing not less than 35 percent of the
Voting Power of this Corporation, and the terms of such
tender offer do not permit the Class A Holders to sell
an equal or greater percentage of their Shares as the
other holders of Voting Securities of this Corporation
are permitted to sell taking into account any pro-
ration, all, but not less than all, of the Class A
Holders shall have the right (but not the obligation)
to deliver to this Corporation a written notice
requesting (x) if Class A Common Stock is then out-
standing, conversion of certain shares of Class A
Common Stock designated by the Class A Holders into
Common Stock, upon which delivery each share of Class A
Common Stock so designated in such notice shall auto-
matically convert (without the payment of any con-
sideration) into one duly issued, fully paid and non-
assessable share of Common Stock, and (y) if Class A
Preference Stock is then outstanding, (A) if at the
time of delivery of the notice the Conversion Price has
been Fixed, conversion of certain shares of Class A
Preference Stock designated by the Class A Holders into
Common Stock, upon which delivery each share of Class A
Preference Stock so designated shall convert (without
the payment of any consideration) into that number of
duly issued, fully paid and nonassessable shares of
Common Stock equal to the number of related Class A
Conversion Shares, or (B) if at the time of delivery of
the notice the Conversion Price has not been Fixed,
conversion at the Target Price of certain shares of
Class A Preference Stock designated by the Class A
Holders into Common Stock, upon which delivery each
share of Class A Preference Stock so designated shall
convert (without the payment of any consideration) at
the Target Price into that number of duly issued, fully
paid and nonassessable shares of Common Stock equal to
the number of related Class A Conversion Shares,
provided that (i) conversion pursuant to this clause
(m) shall not be considered to be an acquisition of
Common Stock for purposes of Section 7(i) of the Class
A Provisions, (ii) unless the Class A Common Stock
shall have otherwise been converted into Common Stock,
or the Fundamental Rights shall have been terminated as
to all outstanding shares of Class A Preference Stock,
in each case pursuant to Section 7 of these Class A
Provisions upon or prior to the consummation or aban-
donment of the transaction contemplated by such tender
offer, immediately following the consummation of such
transaction or the delivery by this Corporation to each
Class A Holder of a notice that such transaction has
been abandoned, each share of Common Stock, if any,
held by a Class A Holder shall automatically reconvert
(without the payment of any consideration) into one
duly issued, fully paid and nonassessable share of
Class A Common Stock (if Class A Common Stock was
outstanding immediately prior to delivery of the
notice) or that number of duly issued, fully paid and
nonassessable shares of Class A Preference Stock on the
same basis as shares of Class A Preference initially
converted into Common Stock (if Class A Preference
Stock was outstanding immediately prior to delivery of
the notice); and (iii) only those shares of Class A
Common Stock or Class A Preference Stock, as the case
may be, related to shares of Common Stock that were not
so reconverted shall be deemed for any purpose under
these Articles, the Stockholders' Agreement, the
Investment Agreement, the Standstill Agreement, the
Registration Rights Agreement, or any agreement or
document related thereto to have been converted into
Common Stock pursuant to this Section 7(m) of the Class
A Provisions, and the Class A Common Stock or Class A
Preference Stock so reconverted, as the case may be,
shall be deemed to have been at all times outstanding
shares of Class A Common Stock or Class A Preference
Stock, as the case may be.
(n) Events under the Stockholders' Agreement.
While shares of Class A Preference Stock are
outstanding, but prior to the time the Conversion Price
shall have been Fixed,
(i) if the event described in Sec-
tion 2.6(a)(iii) of the Stockholders' Agreement
shall occur and not have been cured within the
time period specified therein, the holders of a
majority of the Class A Preference Stock may
deliver a notice of election to this Corporation
within 20 Business Days following the date that
such cure period has lapsed (or such earlier date
that this Corporation provides notice to each of
FT and DT that it will not effect such cure)
electing either that (x) upon delivery of such
notice, the Transfer Restrictions cease to be of
further force and effect, and each share of Class
A Preference Stock Transferred thereafter (other
than to a Qualified Subsidiary or Class A Holder)
convert upon such Transfer at the Target Price
(without the payment of consideration) into that
number of duly issued, fully paid and
nonassessable shares of Common Stock equal to the
number of related Class A Conversion Shares, or
(y) this Corporation redeem each share of Class A
Preference Stock for cash at a per share price
equal to its Liquidation Preference on the 90th
day following the delivery of such notice, pro-
vided that this Corporation, if it disputes that
such a breach has occurred, shall not be obligated
to so redeem the Class A Stock until the earlier
of the date the parties agree that a breach
described in Section 2.6(a)(iii) of the Stock-
holders' Agreement has occurred and the date of a
final, nonappealable judgment of a court of com-
petent jurisdiction to the effect that such a
breach has occurred (in which case the amount to
be paid shall include interest at a rate equal to
12.5 basis points over the Applicable LIBOR Rate,
less any dividends paid or payable on the Class A
Preference Stock with respect to such period, from
the 90th day following the initial court judgment
until the date of payment), provided, further,
that if the Class A Holders elect the redemption
option provided in the preceding clause (y), this
Corporation may in lieu of such redemption, by
notice delivered to the Class A Holders prior to
(A) if this Corporation is contesting that such a
breach has occurred, the expiration of the 90th
day following the initial court judgment, or (B)
if this Corporation is not so contesting, the 30th
day following delivery of a notice of election by
the Class A Holders hereunder, elect to cause the
Transfer Restrictions to cease to be of further
force and effect, and each share of Class A
Preference Stock Transferred thereafter (other
than to a Qualified Subsidiary or Class A Holder)
to convert upon such Transfer at the Minimum Price
at the date of such Transfer (without payment of
any consideration) into that number of duly
issued, fully paid and nonassessable shares of
Common Stock equal to the number of related Class
A Conversion Shares, provided that this
Corporation shall be deemed to have made this
election unless, prior to the expiration of the
time periods set forth in the preceding clauses
(A) and (B), as the case may be, a majority of the
Continuing Directors shall have approved, at a
meeting at which at least seven Continuing
Directors are present, the redemption option set
forth in clause (y) above, unless a Fair Price
Condition has been satisfied.
(ii) if any of the events described in Sec-
tion 2.6(a) of the Stockholders' Agreement (other than
clause (iii) or (iv) thereof) shall occur, the holders
of a majority of the Class A Preference Stock may
deliver a notice of election to this Corporation elect-
ing that, upon delivery of such notice, the Transfer
Restrictions cease to be of further force and effect,
and each share of Class A Preference Stock Transferred
thereafter (other than to a Qualified Subsidiary or
Class A Holder) convert upon such Transfer at the
Target Price (without the payment of consideration)
into that number of duly issued, fully paid and non-
assessable shares of Common Stock equal to the number
of related Class A Conversion Shares.
(o) Transfers if Not Redeemed. Each Share of
Class A Preference Stock Transferred pursuant to
Section 2.6(c) of the Stockholders' Agreement shall
automatically convert (without the payment of any
consideration) at the Minimum Price on the date of such
Transfer into that number of duly issued, fully paid
and nonassessable Shares of Common Stock equal to the
number of related Class A Conversion Shares, provided
that such conversion shall not be considered an
acquisition of Common Stock for purposes of Sec-
tion 7(i) of the Class A Provisions.
(p) Events under Rights Agreement. If there
shall occur a Stock Acquisition Date (as defined in the
Rights Agreement) or an event described in clause (ii)
of Section 3(a) of the Rights Agreement (without regard
to the ten business day period (or such longer period
as the Board shall determine) described therein), in
each case other than due to an action on the part of
any Class A Holder, the holders of a majority of the
outstanding shares of Class A Preference Stock may
deliver a notice of election to this Corporation
electing that, immediately prior to the Distribution
Date (as defined in the Rights Agreement), each share
of Class A Preference Stock shall convert at the Target
Price (without the payment of any consideration) into
that number of duly issued, fully paid and
nonassessable shares of Class A Common Stock equal to
the number of related Class A Conversion Shares.
8. Change of Control Procedures. As long as
shares of Class A Stock are outstanding, but subject to
Sections 7(a), (b), (f) and (k) of the Class A Pro-
visions, if this Corporation, directly or indirectly,
(a) determines to sell all or substantially all of the
assets of this Corporation, (b) determines not to
oppose a third-party tender, exchange or other purchase
offer for Voting Securities with a number of Votes in
excess of 35 percent of the Voting Power of this Cor-
poration, (c) determines to effect a merger or other
business combination involving this Corporation that
would result in a Person (other than any Class A
Holder) holding Voting Securities of the resulting
entity representing 35 percent or more of the Voting
Power of such entity or (d) otherwise determines to
sell Control of this Corporation, this Corporation
shall conduct such transaction in accordance with
reasonable procedures to be determined by the Board of
Directors, and permit FT and DT to participate in that
process on a basis no less favorable than that granted
any other participant.
9. No Dilution or Impairment. (a) After the
Class A Common Issuance Date, no reclassification, sub-
division or combination of the outstanding shares of
Common Stock shall be effected directly or indirectly
(including without limitation any reclassification,
subdivision or combination effected pursuant to a
consolidation, merger or liquidation) unless at the
same time the Class A Common Stock is reclassified,
subdivided, combined or consolidated so that the
holders of the Class A Common Stock (i) are entitled,
in the aggregate, to a number of Votes representing the
same percentage of the Voting Power of this Corporation
relative to the Common Stock as were represented by the
shares of Class A Common Stock outstanding immediately
prior to such reclassification, subdivision or combi-
nation and (ii) maintain all of the rights associated
with the Class A Common Stock set forth in these
Articles of Incorporation, including without limitation
the right to receive dividends and other distributions
(including liquidating and other distributions) that
are equivalent to those payable per share in respect of
shares of Common Stock, subject to the limitations, re-
strictions and conditions on such rights contained
herein.
(b) Without limiting the generality of the fore-
going, in the case of any consolidation or merger of
this Corporation with or into any other entity (other
than a merger which does not result in any reclassi-
fication, conversion, exchange or cancellation of the
Common Stock) or any reclassification of the Common
Stock into any other form of capital stock of this
Corporation, whether in whole or in part, each Class A
Holder shall, after such consolidation, merger or
reclassification, have the right (but not the obliga-
tion), by notice delivered to this Corporation or any
successor thereto within 90 days after the consummation
of such consolidation, merger or reclassification, to
(i) in the case of Class A Common Stock, convert each
share of Class A Common Stock held by it into the kind
and amount of shares of stock and other securities and
property which such Class A Holder would have been
entitled to receive upon such consolidation, merger, or
reclassification if such Class A Holder had converted
its shares of Class A Common Stock into Common Stock
immediately prior to such merger, consolidation or
reclassification or (ii) in the case of Class A
Preference Stock, receive preferred or preference stock
of this Corporation or the ultimate parent entity of
any successor thereto with rights no less favorable to
the Class A Holders than those applicable to the Class
A Preference Stock (including, without limitation, the
right to receive dividends and liquidating and other
distributions) set forth in these Articles of
Incorporation, the Bylaws, the Investment Agreement,
the Stockholders' Agreement and the Registration Rights
Agreement. This Corporation shall not effect, directly
or indirectly, any such reclassification, subdivision
or combination of outstanding shares of Common Stock
unless it delivers to the Class A Holders written
notice of its intent to take such action at least ten
Business Days before taking such action.
(c) The conversion ratio expressed in Sec-
tion 3(c)(ii) of the portion of ARTICLE SIXTH entitled
GENERAL PROVISIONS RELATING TO COMMON STOCK
AND CLASS A STOCK and the Dividend Factor shall
be adjusted to reflect any stock split, subdivision, stock
dividend, or other reclassification, consolidation or a
combination of this Corporation's Voting Securities or
similar action or transaction undertaken after June 22,
1995, provided that no adjustment shall be made under
this Section 9(c) in respect of the Cellular Spin-off
or any Spin-off.
10. Class Voting. Except as otherwise provided
in Section 2(a) of ARTICLE FIFTH or in the Class A
Provisions, the Class A Holders shall not have, nor be
entitled to, a class vote with respect to any matter to
be voted on by the stockholders of this Corporation.
11. Amendment of Class A Provisions and ARTICLE
FIFTH. The Class A Provisions and Section 2(a)(iii) of
ARTICLE FIFTH of these Articles of Incorporation may be
amended in any manner which would not materially alter
or change the powers, preferences or rights of the
holders of shares of the Common Stock or Preferred
Stock so as to affect such powers, preferences or
rights adversely, by the Board of Directors of this
Corporation with the affirmative vote of only the
holders of at least two-thirds of the outstanding
shares of Class A Stock, voting together as a single
class, and without the affirmative vote of the holders
of shares of the Common Stock or the Preferred Stock.
Upon the retirement of shares of Class A Stock, (i)
such shares shall not resume the status of authorized
and unissued shares of that class, (ii) such shares
shall not be reissued, and (iii) upon the execution,
acknowledgment and filing of a certificate in accor-
dance with Kan. Stat. Ann. Section 17-6003 and Section
17-6603 (or any successor provisions) stating that the
reissuance of such shares is prohibited, identifying the
shares and reciting their retirement, then the filing of
such certificate shall have the effect of amending these
Articles of Incorporation so as to reduce accordingly
the number of authorized shares of Class A Common Stock
or Class A Preference Stock, as the case may be, or if
such retired shares constitute all of the authorized
shares of such class, then the filing of such cer-
tificate shall have the effect of amending these
Articles of Incorporation automatically so as to elimi-
nate all references to such class of stock therefrom.
12. Definitions. For purposes of ARTICLE FIFTH
of these Articles of Incorporation, the provisions of
ARTICLE SIXTH of these Articles of Incorporation enti-
tled GENERAL PROVISIONS RELATING TO ALL STOCK,
GENERAL PROVISIONS RELATING TO COMMON STOCK
AND CLASS A STOCK, GENERAL PROVISIONS RELATING
TO COMMON STOCK, and the Class A Provisions:
"Acquisition" shall mean the acquisition by
Cellular of assets (which may include the acquisition
of the common equity interests in a Person) that con-
stitute a business that, prior to such acquisition, has
been operated as a company or a division or has other-
wise been operated as a separate business.
"Adjusted Aggregate Liquidation Preference" shall
mean the difference between (a) the aggregate of the
Liquidation Preference of the outstanding shares of
Class A Preference Stock (including Section 7(i)
Preference Shares whether or not converted pursuant to
Section 3(c)(ii) of the Class A Provisions), minus (b)
the Section 7(i) Aggregate Purchase Price.
"Adjusted Cellular Price" shall mean, subject to
adjustment as provided in the Class A Provisions, the
Average Cellular Price multiplied by the Capitalization
Ratio.
"Affiliate" shall mean, with respect to any
Person, any other Person that directly, or indirectly
through one or more intermediaries, Controls or is
Controlled by, or is under common Control with, such
Person, provided that (a) no JV Entity shall be deemed
an Affiliate of any Class A Holder or this Corporation
unless (i) FT, DT and Atlas own a majority of the
Voting Power of such JV Entity and this Corporation
does not have the Tie-Breaking Vote (as defined in
Section 18.1 of the Joint Venture Agreement), or (ii)
FT, DT or Atlas has the Tie-Breaking Vote; (b) FT, DT
and this Corporation shall not be deemed Affiliates of
each other; (c) Atlas shall be deemed an Affiliate of
FT and DT; and (d) the term "Affiliate" shall not
include any Governmental Authority of France or Germany
or any other Person Controlled, directly or indirectly,
by any such Governmental Authority except in each case
for FT, DT, Atlas and any other Person directly, or
indirectly through one or more intermediaries, Con-
trolled by FT, DT or Atlas.
"Alien" shall mean "aliens", "their representa-
tives", "a foreign government or representatives there-
of" or "any corporation organized under the laws of a
foreign country" as such terms are used in Sec-
tion 310(b)(4) of the Communications Act of 1934, as
amended, or as hereafter may be amended, or any suc-
cessor provision of law.
"Applicable LIBOR Rate" shall mean the one-month
London Interbank Offered Rate (the "Quoted Rate")
listed in the "Money Rates Box" of The Wall Street
Journal (New York Edition) (or any successor
publication) on the day on which such interest is to
begin to accrue, provided that if such day is a day on
which the Quoted Rate is not listed in The Wall Street
Journal (New York Edition) (or such successor
publication) or The Wall Street Journal (New York
Edition) (or such successor publication) is not
published, the Applicable LIBOR Rate shall be the
Quoted Rate on the most recent day prior to such date
on which a Quoted Rate is listed in The Wall Street
Journal (New York Edition) (or such successor
publication).
"Applicable Ratio" shall have the meaning set
forth in Section 7.5(a) of the Stockholders' Agreement.
"Associate" shall have the meaning ascribed to
such term in Rule 12b-2 under the Exchange Act, pro-
vided that when used to indicate a relationship with FT
or DT or their respective Subsidiaries or Affiliates,
the term "Associate" shall mean (a) in the case of FT,
any Person occupying any of the positions listed on
Schedule A to the Stockholders' Agreement and (b) in
the case of DT, any Person occupying any of the posi-
tions listed on Schedule B to the Stockholders' Agree-
ment, provided, further, that, in each case, no Person
occupying any such position described in clause (a) or
(b) hereof shall be deemed an "Associate" of FT or DT,
as the case may be, unless the Persons occupying all
such positions described in clauses (a) and (b) hereof
Beneficially Own, in the aggregate, more than 0.2% of
the Voting Power of the Company.
"Atlas" shall mean the company [formed] [to be
formed] as a societe anonyme under the laws of Belgium
pursuant to the Joint Venture Agreement, dated as of
December 15, 1994, between FT and DT, as amended.
"Average Cellular Price" shall mean, subject to
adjustment as provided in the Class A Provisions, the
average of the Closing Prices of a share of Cellular
Common Stock for the 20 consecutive Trading Days on
which such shares are traded "regular way" starting on
the first such Trading Day after the Cellular Spin-off
Date.
"Average Price" shall mean, as to a security, the
average of the Closing Prices of a security for the 20
consecutive Trading Days ending on the fifteenth
Trading Day prior to the date of determination or
ending on such other date specified herein.
"Average Sprint Price" shall mean, subject to
adjustment as provided in the Class A Provisions, the
Average Price of a share of Common Stock at the date of
determination specified herein. For purposes of this
definition, if any portion of the relevant
determination period occurs prior to the Cellular Spin-off
and the Closing Price of Common Stock on any
Trading Day during the determination period is quoted
"ex" the distribution of Cellular Common Stock, the
Closing Price of the Common Stock for such Trading Day
will be adjusted by adding the product of the Closing
Price of the Cellular Common Stock for such Trading Day
multiplied by the Capitalization Ratio.
"Beneficial Owner" (including, with its correla-
tive meanings, "Beneficially Own" and "Beneficial
Ownership"), with respect to any securities, shall mean
any Person which:
(a) has, or any of whose Affiliates or Asso-
ciates has, directly or indirectly, the right to
acquire (whether such right is exercisable imme-
diately or only after the passage of time) such
securities pursuant to any agreement, arrangement
or understanding (whether or not in writing),
including, without limitation, pursuant to the
Investment Agreement and the Stockholders' Agree-
ment, or upon the exercise of conversion rights,
exchange rights, warrants or options, or other-
wise;
(b) has, or any of whose Affiliates or Asso-
ciates has, directly or indirectly, the right to
vote or dispose of (whether such right is exer-
cisable immediately or only after the passage of
time) or has "beneficial ownership" of (as deter-
mined pursuant to Rule 13d-3 under the Exchange
Act but including all such securities which a
Person has the right to acquire beneficial owner-
ship of whether or not such right is exercisable
within the 60-day period specified therein) such
securities, including pursuant to any agreement,
arrangement or understanding (whether or not in
writing); or
(c) has, or any of whose Affiliates or Asso-
ciates has, any agreement, arrangement or under-
standing (whether or not in writing) for the pur-
pose of acquiring, holding, voting or disposing of
any securities which are Beneficially Owned,
directly or indirectly, by any other Person (or
any Affiliate thereof),
provided that Class A Stock and Common Stock held by
one of FT or DT or its Affiliates shall not also be
deemed to be Beneficially Owned by the other of FT or
DT or its Affiliates.
"Board of Directors" shall mean the board of
directors of this Corporation.
"Business Day" shall mean any day other than a day
on which commercial banks in The City of New York,
Paris, France, or Frankfurt am Main, Germany, are
required or authorized by law to be closed.
"Buyers" shall have the meaning set forth in the
Investment Agreement.
"Bylaws" shall mean the Bylaws of this Corporation
as amended or supplemented from time to time.
"Capitalization Ratio" shall mean the quotient of
the number of shares of Cellular Common Stock out-
standing immediately following the Cellular Spin-off,
divided by the number of shares of Common Stock
immediately following the Cellular Spin-off.
"Cellular" shall mean (a) until immediately prior
to the Cellular Spin-off Date, the Cellular and
Wireless Division, (b) immediately prior to the
Cellular Spin-off Date, the direct or indirect wholly
owned subsidiary of this Corporation owning the assets
of the Cellular and Wireless Division, the shares of
which subsidiary are to be distributed to this
Corporation's stockholders in connection with the
Cellular Spin-off, and (c) on and after the Cellular
Spin-off Date, such company, provided that the term
"Cellular" shall not include any assets retained by
this Corporation after the Cellular Spin-off Date.
"Cellular and Wireless Division" shall mean the
Cellular and Wireless Communications Services Division
of this Corporation.
"Cellular Common Stock" shall mean the shares of
common stock of Cellular.
"Cellular Spin-off" shall mean the distribution by
this Corporation on a pro rata basis to the holders of
the Common Stock of shares of Cellular Common Stock
representing all of the common equity of Cellular.
"Cellular Spin-off Date" shall mean the date on
which shares of Cellular Common Stock are distributed
to the holders of Common Stock.
"Cellular Spin-off Reduction Factor" shall mean,
subject to adjustment as provided in the Class A
Provisions, (a) $5.25, if the Adjusted Cellular Price
is not less than $3.25 or more than $7.25, or (b) if
the Adjusted Cellular Price is more than $7.25 but not
more than $8.25, $5.25 plus 50% of the difference
between the Adjusted Cellular Price and $7.25, or
(c) if the Adjusted Cellular Price is more than $8.25,
$5.75 plus the difference between the Adjusted Cellular
Price and $8.25, or (d) if the Adjusted Cellular Price
is less than $3.25 but not less than $2.25, $5.25 minus
50% of the difference between $3.25 and the Adjusted
Cellular Price or (e) if the Adjusted Cellular Price is
below $2.25, $4.75 minus the difference between $2.25
and the Adjusted Cellular Price. Notwithstanding the
foregoing, (i) if the Net Cellular Indebtedness
immediately after the Cellular Spin-off exceeds $2.955,
each dollar amount set forth in the first sentence of
this definition (other than the Adjusted Cellular
Price) shall be reduced dollar-for-dollar by such
excess; (ii) if $2.955 exceeds the Net Cellular
Indebtedness, each such dollar amount shall be
increased dollar-for-dollar by such excess; and (iii)
if Cellular has effected any Acquisition and/or
Disposition after June 22, 1995 and prior to the
Cellular Spin-off Date, such dollar amounts shall be
increased by the Net Cellular Acquisition Amount, if
positive, and decreased by the absolute value of the
Net Cellular Acquisition Amount, if negative.
"Change of Control" shall mean a:
(a) decision by the Board of Directors to
sell Control of this Corporation or not to oppose
a third party tender offer for Voting Securities
of this Corporation representing more than 35% of
the Voting Power of this Corporation; or
(b) change in the identity of a majority of
the Directors due to (i) a proxy contest (or the
threat to engage in a proxy contest) or the elec-
tion of Directors by the holders of Preferred
Stock; or (ii) any unsolicited tender, exchange or
other purchase offer which has not been approved
by a majority of the Independent Directors,
provided that a Strategic Merger shall not be deemed to
be a Change of Control and provided, further, that any
transaction between this Corporation and FT and DT or
otherwise involving FT and DT and any of their direct
or indirect Subsidiaries which are party to a Contract
therefor shall not be deemed to be a Change of Control.
"Class A Action" shall mean action by the holders
of a majority of the shares of Class A Stock taken by a
vote at either a regular or special meeting of the
stockholders of this Corporation or of the holders of
the Class A Stock or by written consent delivered to
the Secretary of this Corporation.
"Class A Common Issuance Date" shall mean the date
this Corporation first issues shares of Class A Common
Stock.
"Class A Common Stock" shall have the meaning set
forth in ARTICLE SIXTH of these Articles of Incorpora-
tion.
"Class A Conversion Shares" shall mean, the shares
of Class A Common Stock or Common Stock into which the
then outstanding shares of Class A Preference Stock
(or, as the case may be, a specified number of shares
of Class A Preference Stock) would, at the time of
determination, be convertible at the then applicable
Conversion Price if the conditions to establishment of
the Conversion Date had been met.
"Class A Director" shall mean any Director elected
by the Class A Holders pursuant to Section 2(a) of
ARTICLE FIFTH of these Articles of Incorporation,
appointed by Class A Directors pursuant to Section 4(b)
of ARTICLE FIFTH of these Articles of Incorporation, or
elected by the Class A Holders pursuant to Section 3(d)
of the Class A Provisions.
"Class A Holders" shall mean (a) the holders of
the Class A Stock or the Class A Preference Stock, as
the case may be, and (b) any Qualified Stock Purchaser
who has executed with this Corporation a Qualified
Stock Purchaser Assumption Agreement (as such term is
defined in the Stockholders' Agreement), for so long as
such Person holds Class A Preference Stock or Class A
Common Stock.
"Class A Preference Stock" shall have the meaning
set forth in ARTICLE SIXTH of these Articles of Incor-
poration.
"Class A Provisions" shall mean the portion of ARTICLE
SIXTH of these Articles of Incorporation entitled GENERAL
PROVISIONS RELATING TO CLASS A STOCK.
"Class A Stock" shall mean the Class A Common
Stock or, if shares of Class A Preference Stock are
outstanding, the Class A Preference Stock.
"Closing Price" shall mean, with respect to a
security on any day, the last sale price, regular way,
or in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular
way, in either case as reported in the principal
consolidated transaction reporting system with respect
to securities listed or admitted to trading on The New
York Stock Exchange, Inc. or, if such security is not
listed or admitted to trading on such exchange, as
reported in the principal consolidated transaction
reporting system with respect to securities listed on
the principal national securities exchange on which the
security is listed or admitted to trading or, if the
security is not listed or admitted to trading on any
national securities exchange, the last quoted sale
price or, if not so quoted, the average of the high bid
and low asked prices in the over-the-counter market, as
reported by NASDAQ or such other system then in use,
or, if on any such date such security is not quoted by
any such organization, the average of the closing bid
and asked prices as furnished by a professional market
maker making a market in the security selected in good
faith by the Board of Directors. If the security is
not publicly held or so listed or publicly traded,
"Closing Price" shall mean the Fair Market Value of
such security.
"Committed Percentage" shall mean, as to any Class
A Holder, the percentage obtained by dividing the
aggregate number of Votes represented or to be repre-
sented by the Voting Securities of this Corporation
(a) owned of record by such Class A Holder or by its
nominees; and (b) which such Class A Holder has com-
mitted to this Corporation to purchase pursuant to
Articles V and VI and Sections 7.3 and 7.8 of the
Stockholders Agreement and Article II of the Investment
Agreement, by the sum of (i) the Voting Power of this
Corporation, plus (ii) the Votes to be represented by
any Voting Securities of this Corporation such Class A
Holder has committed to this Corporation to purchase
from this Corporation pursuant to Articles V and VI and
Section 7.3 of the Stockholders' Agreement and Article
II of the Investment Agreement.
"Continuing Director" shall have the meaning set
forth in the Fair Price Provisions.
"Contract" shall mean any loan or credit agree-
ment, note, bond, indenture, mortgage, deed of trust,
lease, franchise, contract, or other agreement, obli-
gation, instrument or binding commitment of any nature.
"Control" shall mean, with respect to a Person or
Group, any of the following:
(a) ownership by such Person or Group of
Votes entitling it to exercise in the aggregate
more than 35 percent of the Voting Power of the
entity in question; or
(b) possession by such Person or Group of
the power, directly or indirectly, (i) to elect a
majority of the board of directors (or equivalent
governing body) of the entity in question; or
(ii) to direct or cause the direction of the man-
agement and policies of or with respect to the
entity in question, whether through ownership of
securities, by contract or otherwise.
"Conversion Date" shall have the meaning set forth
in Section 3(a)(i) of the Class A Provisions.
"Conversion Price" shall have the meaning set
forth in Section 3(b) of the Class A Provisions.
"Core Businesses" shall mean all businesses in the
fields of telecommunications and information technology
and applications, and equipment, software applications
and consumer and business services related thereto or
making use of the technology thereof, including value-
added consumer and business services generated through
or as a result of underlying telecommunications ser-
vices using all technology (voice, data and image) and
physical transport, network intelligence, and software
applications, and cable television (but not including
any programming or content-related activities with
respect thereto).
"Corporation Eligible Notes" shall mean notes of
this Corporation, substantially in the form of "Company
Eligible Notes" as provided in the Stockholders' Agree-
ment, made payable to a Class A Holder as provided in
Sections 7(f) and 7(n) of the Class A Provisions,
which, in the written opinion of an investment banking
firm of recognized international standing addressed to
the Class A Holder and reasonably satisfactory to such
Class A Holder, would sell, at the date of their
issuance, at a price equal to their principal amount
(taking into account the likely manner and timing of
resale by such Class A Holder), provided that no note
of this Corporation shall be deemed to be a Corporation
Eligible Note (a) if it is to be issued at a time when
this Corporation's debt instruments comparable to the
notes proposed to be a Corporation Eligible Note (or
such note itself) do not possess at least two of the
three following ratings: Baa3 or better (or a compa-
rable rating if the rating system is changed) by
Moody's Investors Service, Inc.; BBB- or better (or a
comparable rating if the rating system is changed) by
Standard and Poor's Corporation; and BBB- or better (or
a comparable rating if the rating system is changed) by
Duff & Phelps Credit Rating Co., and (b) unless
nationally-recognized counsel shall have delivered an
opinion in form and substance reasonably satisfactory
to each payee that such notes are enforceable obliga-
tions of this Corporation in accordance with the terms
thereof.
"Corporation Joint Venture Termination" shall mean
any of the following:
(a) the sale of Venture Interests by a
Sprint Party pursuant to Section 20.5(a) of the
Joint Venture Agreement; or
(b) the receipt by the FT/DT Parties of the
Tie-Breaking Vote due to a Funding Default,
Material Non-Funding Default or Bankruptcy (as
such terms are defined in the Joint Venture
Agreement) on the part of any of the Sprint Par-
ties.
"Director" shall mean a member of the Board of
Directors.
"Disposition" means the disposition by Cellular of
assets (which may include the disposition of common
equity interests in a Person) that constitute a
business that, prior to such disposition, has been
operated as a company or a division or has otherwise
been operated as a separate business.
"Dividend Factor" shall mean 43,118,018, as
adjusted as provided in Section 9(c) of the Class A
Provisions.
"DT" shall mean Deutsche Telekom AG, an
Aktiengesellschaft formed under the laws of Germany.
"ESMR" shall mean any commercial mobile radio
service, and the resale of such service, of the type
authorized under the rules for Specialized Mobile Radio
Services designated under Subpart S of Part 90 of the
FCC's rules or similar Applicable Laws of any other
country in effect on the date hereof, including the
networking, marketing, distribution, sales, customer
interface and operations functions relating thereto.
"Europe" shall mean the current geographic area
covered by the following countries and territories
located on the European continent, plus, in the case of
France, its territories and possessions located outside
the European continent: Albania, Andorra, Austria,
Belgium, Bosnia-Hercegovina, Bulgaria, Croatia, Cyprus,
Czech Republic, Denmark, Estonia, Finland, France,
Germany, Gibraltar, Greece, Hungary, Iceland, Ireland,
Italy, Latvia, Liechtenstein, Lithuania, Luxembourg,
Macedonia, Malta, Monaco, Montenegro, Netherlands,
Norway, Poland, Portugal, Romania, San Marino, Serbia,
Slovakia, Slovenia, Spain, Sweden, Switzerland, Turkey,
Ukraine, United Kingdom, and Vatican City.
"Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended, and the rules and regulations
of the United States Securities and Exchange Commission
promulgated thereunder.
"Exempt Asset Divestitures" shall mean, with
respect to this Corporation and its Subsidiaries:
(a) Transfers of assets, shares or other
equity interests (other than Long Distance Assets)
to joint ventures approved by FT and DT prior to
the Initial Issuance Date;
(b) Transfers of assets, shares or other
equity interests (other than Long Distance Assets)
to (i) any entity in exchange for equity interests
in such entity if, after such transaction, this
Corporation owns at least 51 percent of both the
Voting Power and equity interests in such entity
or (ii) any joint venture that is an operating
joint venture not controlled by any of its prin-
cipals and in which (x) this Corporation has the
right, acting alone, to disapprove (and thereby
prohibit) decisions relating to acquisitions and
divestitures involving more than 20 percent of the
Fair Market Value of such entity's assets,
mergers, consolidations and dissolution or liqui-
dation of such entity and the adoption of such
entity's business plan, and (y) Major Competitors
of the Joint Venture do not in the aggregate own
more than 20% of the equity interests or Voting
Power; or
(c) transactions in which this Corporation
exchanges one or more (i) local exchange telephone
businesses for one or more such businesses or
(ii) public cellular or wireless radio tele-
communications service systems for one or more
such systems, provided that this Corporation shall
not, directly or indirectly, receive cash in any
such transaction in an amount greater than 20
percent of the Fair Market Value of the property
or properties Transferred by it;
(d) Transfers of assets, shares or other
equity interests (other than Long Distance Assets)
by this Corporation to any of its Subsidiaries, or
by any of its Subsidiaries to this Corporation or
any other Subsidiary of this Corporation;
(e) (i) any Spin-off of equity interests of
a wholly-owned Subsidiary that is not a Subsidiary
which, directly or indirectly, owns Long Distance
Assets (for purposes of this definition, the
"Spun-off Entity"), provided that, in the case of
a Spin-off which is consummated following the
Initial Issuance Date, the Class A Holders receive
securities in the Spun-off Entity of a separate
class with rights no less favorable to the Class A
Holders than those applicable to the Class A Stock
set forth in these Articles of Incorporation and
the Bylaws, or (ii) the Cellular Spin-off, unless
a Notice of Abandonment has been delivered;
(f) Transfers of assets (other than Long
Distance Assets) of this Corporation or any of its
Subsidiaries that are primarily or exclusively
used in connection with providing information
technology or data processing functions or ser-
vices (collectively, for purposes of this defi-
nition, the "IT Assets") to any Person that regu-
larly provides information technology or data
processing functions or services on a commercial
basis, in connection with a contractual arrange-
ment (for purposes of this definition, an "IT
Service Contract") pursuant to which such Person
undertakes to provide information technology or
data processing functions or services to this
Corporation or any of its Subsidiaries of substan-
tially the same nature as the services associated
with the use of such assets prior to such Transfer
and upon commercially reasonable terms to this
Corporation as determined in good faith by this
Corporation, provided that (i) the term of such IT
Service Contract shall be for a period at least as
long as the weighted average useful life of such
assets, or this Corporation or such Subsidiary
shall have the right to cause such IT Service
Contract to be renewed or extended for a period at
least as long as such weighted average useful life
upon commercially reasonable terms to this
Corporation as determined in good faith by this
Corporation, and (ii) the Transfer of such assets
will not materially and adversely affect the
operation of this Corporation; or
(g) Transfers of assets (other than Long
Distance Assets or IT Assets) of this Corporation
or any of its Subsidiaries to any Person in con-
nection with any contractual arrangement (for
purposes of this definition, a "Non-IT Service
Contract") pursuant to which such Person under-
takes to provide services to this Corporation or
any of its Subsidiaries of substantially the same
nature as the services associated with the use of
such assets prior to such Transfer and upon
commercially reasonable terms to this Corporation
as determined in good faith by this Corporation,
provided, that (i) the Fair Market Value of such
assets, together with the Fair Market Value of
assets of this Corporation Transferred to such
Person or other Persons in related transactions,
do not represent more than five percent of the
Fair Market Value of the assets of this Corpora-
tion, (ii) the Transfer of such assets will not
materially and adversely affect the operation of
this Corporation, and (iii) the term of such Non-IT
Service Contract shall be for a period at least
as long as the weighted average useful life of the
assets so Transferred or this Corporation or such
Subsidiary has the right to cause such Non-IT Ser-
vice Contract to be renewed or extended for a
period at least as long as such weighted average
useful life upon commercially reasonable terms to
this Corporation as determined in good faith by
this Corporation.
"Exempt Long Distance Asset Divestitures" shall
mean, with respect to this Corporation and its Subsid-
iaries:
(a) Transfers of Long Distance Assets to a
Qualified Joint Venture;
(b) Transfers of Long Distance Assets to any
entity if this Corporation and its Subsidiaries
after such transaction own at least 70 percent of
both the Voting Power and equity interests of such
entity, provided that if a Major Competitor of FT
or DT or of the Joint Venture holds equity
interests in such entity, such Major Competitor's
equity interests and Votes in such entity as a
percentage of the Voting Power of such entity
shall not, directly or indirectly, exceed 20 per-
cent;
(c) Transfers of Long Distance Assets pur-
suant to an underwritten, widely-distributed pub-
lic offering at the conclusion of which this
Corporation and its Subsidiaries shall own at
least 51 percent of both the Voting Power and
equity interests in the entity that owns such Long
Distance Assets;
(d) Transfers in the ordinary course of
business of Long Distance Assets determined by
this Corporation to be unnecessary for the orderly
operation of this Corporation's business, and
sale-leasebacks of Long Distance Assets and simi-
lar financing transactions after which this Cor-
poration and its Subsidiaries continue in posses-
sion and control of the Long Distance Assets
involved in such transaction;
(e) Transfers of Long Distance Assets by
this Corporation to any of its Subsidiaries, or by
any of its Subsidiaries to this Corporation or any
other Subsidiary of this Corporation;
(f) Transfers of Long Distance Assets to FT
or DT or any assignee thereof pursuant to the
Stockholders' Agreement;
(g) any Spin-off of equity interests of a
wholly-owned Subsidiary which, directly or indi-
rectly, owns Long Distance Assets (for purposes of
this definition, the "Spun-off Entity"), provided
that the Class A Holders receive securities in the
Spun-off Entity of a separate class with rights no
less favorable to the Class A Holders than those
applicable to the Class A Stock set forth in these
Articles of Incorporation and the Bylaws;
(h) Transfers of Long Distance Assets of
this Corporation or any of its Subsidiaries that
are primarily or exclusively used in connection
with providing information technology or data
processing functions or services (collectively,
for purposes of this definition, the "IT Assets")
to any Person that regularly provides information
technology or data processing functions or ser-
vices on a commercial basis, in connection with a
contractual arrangement (for purposes of this
definition, an "IT Service Contract") pursuant to
which such Person undertakes to provide informa-
tion technology or data processing functions or
services to this Corporation or any of its Sub-
sidiaries of substantially the same nature as the
services associated with the use of such Long
Distance Assets prior to such Transfer and upon
commercially reasonable terms to this Corporation
as determined in good faith by this Corporation,
provided that (i) the term of such IT Service
Contract shall be for a period at least as long as
the weighted average useful life of such Long
Distance Assets, or this Corporation or such
Subsidiary shall have the right to cause such IT
Service Contract to be renewed or extended for a
period at least as long as such weighted average
useful life upon commercially reasonable terms to
this Corporation as determined in good faith by
this Corporation, and (ii) the Transfer of such
Long Distance Assets will not materially and
adversely affect the operation of the Long Dis-
tance Business. Any such IT Service Contract
involving Transfers of Long Distance Assets,
including any renewal or extension thereof, shall
be deemed to be a Long Distance Asset; or
(i) Transfers of Long Distance Assets (other
than IT Assets) of this Corporation or any of its
Subsidiaries to any Person in connection with any
contractual arrangement (for purposes of this
definition, a "Non-IT Service Contract") pursuant
to which such Person undertakes to provide ser-
vices to this Corporation or any of its Sub-
sidiaries of substantially the same nature as the
services associated with the use of such Long
Distance Assets prior to such Transfer and upon
commercially reasonable terms to this Corporation
as determined in good faith by this Corporation,
provided, that (i) the Fair Market Value of such
Long Distance Assets, together with the Fair
Market Value of Long Distance Assets Transferred
to such Person or other Persons in related
transactions, do not represent more than three
percent of the Fair Market Value of the Long Dis-
tance Assets of this Corporation, (ii) the Trans-
fer of such Long Distance Assets will not mate-
rially and adversely affect the operation of the
Long Distance Business, and (iii) the term of such
Non-IT Service Contract shall be for a period at
least as long as the weighted average useful life
of the Long Distance Assets so Transferred or this
Corporation or such Subsidiary has the right to
cause such Service Contract to be renewed or
extended for a period at least as long as such
weighted average useful life upon commercially
reasonable terms to this Corporation as determined
in good faith by this Corporation. Any such Non-IT
Service Contract involving Transfers of Long
Distance Assets, including any renewal or exten-
sion thereof, shall be deemed to be a Long Dis-
tance Asset.
"Extraordinary Dividend" shall mean, with respect
to capital stock of this Corporation, a cash dividend
or other cash distribution, other than (a) a regular
periodic dividend payable in cash; or (b) a dividend
payable in accordance with the terms of the Preferred
Stock or the Class A Preference Stock.
"Fair Market Value" shall mean, with respect to
any asset, shares or other property, the cash price at
which a willing seller would sell and a willing buyer
would buy such asset, shares or other property in an
arm's-length negotiated transaction without undue time
restraints, as determined in good faith by a majority
of the Independent Directors as certified in a resolu-
tion delivered to all of the Class A Holders.
"Fair Price Condition" shall have the meaning set
forth in that section of ARTICLE SIXTH of these
Articles of Incorporation entitled GENERAL PROVISIONS
RELATING TO ALL STOCK.
"Fair Price Provisions" shall mean ARTICLE SEVENTH
of these Articles of Incorporation, and any successor
provision thereto.
"FCC" shall mean the Federal Communications Com-
mission.
"FCC Order" shall mean, with respect to any pro-
posed Transfer of Long Distance Assets by this Cor-
poration, either:
(a) an effective written order or other
final action from the FCC (either in the first
instance or upon review or reconsideration) either
declaring that FT and DT are not prohibited by
Section 310 from owning such Long Distance Assets
or stating that no such declaration is required,
and as to which no Proceeding shall be pending or
threatened that presents a substantial possibility
of resulting in a reversal thereof; or
(b) an effective written order from, or
other final action taken by, the FCC pursuant to
delegated authority (either in the first instance
or upon review or reconsideration) either declar-
ing that FT and DT are not prohibited by Section
310 from owning such Long Distance Assets, or
stating that no such declaration is required,
which order or final action shall no longer be
subject to further administrative review, and as
to which no Proceeding shall be pending or threat-
ened that presents a substantial possibility of
resulting in a reversal thereof;
For purposes of clause (b) of this definition, an order
from, or other final action taken by, the FCC pursuant
to delegated authority shall be deemed no longer sub-
ject to further administrative review:
(x) if no petition for reconsideration or appli-
cation for review by the FCC of such order or
final action has been filed within thirty
days after the date of public notice of such
order or final action, as such 30-day period
is computed and as such date is defined in
Sections 1.104 and 1.4 (or any successor
provisions), as applicable, of the FCC's
rules, and the FCC has not initiated review
of such order or final action on its own
motion within forty days after the date of
public notice of the order or final action,
as such 40-day period is computed and such
date is defined in Sections 1.117 and 1.4 (or
any successor provisions) of the FCC's rules;
or
(y) if any such petition for reconsideration or
application for review has been filed, or, if
the FCC has initiated review of such order or
final action on its own motion, the FCC has
issued an effective written order or taken
final action to the effect set forth in
clause (a) above.
"Fix" or "Fixed" shall mean, in relation to the
Conversion Price, the initial establishment of the
Conversion Price in accordance with Section 3(b) of the
Class A Provisions.
"Fixed Closing Date" means the date of the first
closing to occur under the Investment Agreement after
the date on which the Conversion Price is Fixed.
"France" shall mean the Republic of France,
including French Guiana, Guadeloupe, Martinique and
Reunion, and its territories and possessions.
"FT" shall mean France Telecom, an exploitant
public formed under the laws of France.
"FT/DT Joint Venture Termination" shall mean any
of the following:
(a) the sale of Venture Interests by an
FT/DT Party pursuant to Section 20.5(b), 20.5(c)
or 20.5(d) of the Joint Venture Agreement; or
(b) the receipt by the Sprint Parties of the
Tie-Breaking Vote due to a Funding Default, Mate-
rial Non-Funding Default or Bankruptcy (as such
terms are defined in the Joint Venture Agreement)
on the part of any of the FT/DT Parties.
"FT/DT Party" shall have the meaning set forth in
the Joint Venture Agreement.
"Fundamental Rights" means the rights of holders
of Class A Preference Stock to elect Directors and the
rights of the holders of Class A Preference Stock pro-
vided in Sections 4, 5, 6 and 8 of the Class A Pro-
visions.
"Germany" shall mean the Federal Republic of
Germany.
"Governmental Authority" shall mean any federa-
tion, nation, state, sovereign, or government, any
federal, supranational, regional, state or local
political subdivision, any governmental or administra-
tive body, instrumentality, department or agency or any
court, tribunal, administrative hearing body, arbi-
tration panel, commission or other similar dispute
resolving panel or body, and any other entity exercis-
ing executive, legislative, judicial, regulatory or
administrative functions of a government, provided that
the term "Governmental Authority" shall not include FT,
DT, Atlas or any of their respective Subsidiaries.
"Group" shall mean any group within the meaning of
Section 13(d)(3) of the Exchange Act.
"Independent Director" shall mean any member of
the Board of Directors who (a) is not an officer or
employee of this Corporation, or any Class A Holder, or
any of their respective Subsidiaries, (b) is not a
former officer of this Corporation, or any Class A
Holder, or any of their respective Subsidiaries,
(c) does not, in addition to such person's role as a
Director, act on a regular basis, either individually
or as a member or representative of an organization,
serving as a professional adviser, legal counsel or
consultant to this Corporation, or any Class A Holder,
or their respective Subsidiaries, if, in the opinion of
the Nominating Committee of the Board of Directors of
this Corporation (the "Nominating Committee") or the
Board of Directors if a Nominating Committee is not in
existence, such relationship is material to this Cor-
poration, any Class A Holder, or the organization so
represented or such person, and (d) does not represent,
and is not a member of the immediate family of, a
person who would not satisfy the requirements of the
preceding clauses (a), (b) and (c) of this sentence. A
person who has been or is a partner, officer or
director of an organization that has customary
commercial, industrial, banking or underwriting rela-
tionships with this Corporation, any Class A Holder, or
any of their respective Subsidiaries, that are carried
on in the ordinary course of business on an arms-length
basis and who otherwise satisfies the requirements set
forth in clauses (a), (b), (c) and (d) of the first
sentence of this definition, may qualify as an
Independent Director, unless, in the opinion of the
Nominating Committee or the Board of Directors if a
Nominating Committee is not in existence, such person
is not independent of the management of this Cor-
poration, or any Class A Holder, or any of their
respective Subsidiaries, or the relationship would
interfere with the exercise of independent judgment as
a member of the Board of Directors. A person who
otherwise satisfies the requirements set forth in
clauses (a), (b), (c) and (d) of the first sentence of
this definition and who, in addition to fulfilling the
customary director's role, also provides additional
services directly for the Board of Directors and is
separately compensated therefor, would nonetheless
qualify as an Independent Director. Notwithstanding
anything to the contrary contained in this definition,
each Director as of the date of the execution of the
Investment Agreement who is not an executive officer of
this Corporation shall be deemed to be an Independent
Director hereunder.
"Initial Issuance Date" shall mean the first date
that any shares of Class A Stock are issued.
"Investment Agreement" shall mean the Investment
Agreement, dated as of July 31, 1995, among FT, DT and
this Corporation (and all exhibits and sched-
ules thereto), as it may be amended or supplemented
from time to time.
"Investment Completion Date" shall mean the date
of the Supplemental Preference Stock Closing (as such
term is defined in the Investment Agreement) or the
Class A Common Issuance Date, whichever shall first
occur.
"Investment Documents" means the Investment Agree-
ment and the Stockholders' Agreement.
"Joint Venture" shall mean the joint venture
formed by FT, DT, this Corporation and Sprint Sub, as
provided in the Joint Venture Agreement.
"Joint Venture Agreement" shall mean the Joint
Venture Agreement, dated as of June 22, 1995 among FT,
DT, Sprint Sub, and this Corporation.
"JV Entity" shall have the meaning set forth in
the Joint Venture Agreement.
"Lien" shall mean any mortgage, pledge, security
interest, adverse claim, encumbrance, lien (statutory
or otherwise) or charge of any kind (including any
agreement to give any of the foregoing, any conditional
sale or other title retention agreement, any lease in
the nature thereof, and the filing of or agreement to
give any financing statement under the Uniform Com-
mercial Code or similar Applicable Law of any juris-
diction) or any other type of preferential arrangement
for the purpose, or having the effect, of protecting a
creditor against loss or securing the payment or
performance of an obligation.
"Lien Transfer" shall mean the granting of any
Lien on any Long Distance Asset, other than:
(a) a lien securing purchase money indebtedness
that does not have a term longer than the estimated
useful life of such Long Distance Asset;
(b) Liens or other comparable arrangements relat-
ing to the financing of accounts receivable; and
(c) Liens securing any other indebtedness for
borrowed money, provided that (i) the amount of such
indebtedness, when added to the aggregate amount of
purchase money indebtedness referred to in clause (a)
above, does not exceed 30% of the total book value of
the Long Distance Assets as at the date of the most
recently published balance sheet of this Corporation,
(ii) the indebtedness secured by such Liens is secured
only by Liens on Long Distance Assets, (iii) the face
amount of such indebtedness does not exceed the book
value of the Long Distance Assets subject to such
Liens, and (iv) such indebtedness is for a term no
longer than the estimated useful life of the Long
Distance Assets subject to such Liens.
"Liquidation Preference" shall mean, at a date of
determination, the quotient of (a) the sum of (i) the
products of (x) each share of Class A Preference Stock
(other than Section 7(i) Preference Shares or shares of
Class A Preference Stock purchased from this
Corporation at the Optional Shares Closing (as such
term is defined in the Investment Agreement) or
pursuant to Article V or VI of the Stockholders'
Agreement), times (y) the liquidation value thereof for
each such share, (ii) the aggregate purchase price of
shares of Class A Preference Stock purchased from this
Corporation at the Optional Shares Closing or pursuant
to Article V or VI of the Stockholders' Agreement, and
(iii) the Section 7(i) Aggregate Purchase Price,
divided by (b) the number of shares of Class A
Preference Stock outstanding, in each case immediately
prior to the date of determination, plus an amount
equal to accrued and unpaid dividends and distributions
thereon, whether or not declared, on such date of
determination.
"Local Exchange Division" shall mean the Local
Communications Services Division of this Corporation.
"Long Distance Assets" shall mean:
(a) the assets reflected in this Corporation's
balance sheet for the year ended December 31, 1994 as
included in the Long Distance Division;
(b) any assets acquired by this Corporation or
any of its Subsidiaries following December 31, 1994
that are reflected in this Corporation's balance sheet
as included in the Long Distance Division;
(c) any assets of this Corporation or any of its
Subsidiaries that are not reflected in this Corpora-
tion's balance sheet for the year ended December 31,
1994 as included in the Long Distance Division, which
after December 31, 1994 are transferred by this
Corporation or any of its Subsidiaries to, or reclassi-
fied by this Corporation or any of its Subsidiaries as
part of, the Long Distance Division;
(d) any assets acquired by this Corporation after
December 31, 1994 that are used or held for use
primarily for the benefit of the Long Distance Busi-
ness; and
(e) any assets referred to in clauses (a) through
(c) above that are used or held for use primarily for
the benefit of the Long Distance Business which are
transferred or reclassified by this Corporation or any
of its Subsidiaries outside of the Long Distance Divi-
sion, but which continue to be owned by this Corpo-
ration or any of its Subsidiaries;
provided that the term "Long Distance Assets" shall not
include (i) any assets that are used or held for use
primarily for the benefit of any Non-Long Distance
Business, or (ii) any other assets reflected in this
Corporation's balance sheet for the year ended
December 31, 1994 as included in the Cellular and
Wireless Division or the Local Exchange Division (other
than as such assets in the Cellular and Wireless
Division or the Local Exchange Division may be trans-
ferred or reclassified in accordance with paragraph (c)
of this definition).
"Long Distance Business" shall mean all long
distance telecommunications activities and services of
this Corporation and its Subsidiaries at the relevant
time, including (but not limited to) all long distance
transport services, switching and value-added services
for voice, data, video and multimedia transmission,
migration paths and intelligent overlapping archi-
tectures, provided that the term "Long Distance Busi-
ness" shall not include any activities or services
primarily related to any Non-Long Distance Business.
"Long Distance Division" shall mean the Long
Distance Communications Services Division of this
Corporation.
"Lower Threshold Sprint Price" shall mean $34.982
(subject to adjustment as provided in the Class A
Provisions).
"Major Competitor" shall mean (a) with respect to
FT or DT, a Person that materially competes with a
major portion of the telecommunications services
business of FT or DT in Europe or a Person that has
taken substantial steps to become such a Major Com-
petitor and which FT or DT has reasonably concluded, in
its good faith judgment, will be such a competitor in
the near future in France or Germany, provided that FT
and/or DT furnish in writing to this Corporation rea-
sonable evidence of the occurrence of such steps;
(b) with respect to this Corporation, a Person that
materially competes with a major portion of the tele-
communications services business of this Corporation in
North America, or a Person that has taken substantial
steps to become such a Major Competitor and which this
Corporation has reasonably concluded, in its good faith
judgment, will be such a competitor in the near future
in the United States of America provided that this
Corporation furnish in writing to each Class A Holder
reasonable evidence of the occurrence of such steps;
and (c) with respect to the Joint Venture, a Person
that materially competes with a major portion of the
telecommunications services business of the Joint
Venture, or a Person that has taken substantial steps
to become such a Major Competitor and which FT, DT or
this Corporation has reasonably concluded, in its good
faith judgment, will be such a competitor in the near
future, provided that FT, DT or this Corporation
furnish in writing to the other two of them reasonable
evidence of the occurrence of such steps.
"Major Competitor Transaction" shall have the
meaning set forth in Section 6(a) of the Class A Provi-
sions.
"Major Issuance" shall mean any transaction,
including, but not limited to, a merger or business
combination, resulting, directly or indirectly, in the
issuance (or sale from treasury) in connection with
such transaction of Voting Securities of this Corpora-
tion with a number of Votes equal to or greater than 30
percent of the Voting Power of this Corporation imme-
diately prior to such issuance.
"Market Capitalization" shall mean, with respect
to this Corporation at any date, the sum of the average
Market Price over the immediately preceding 20 Business
Days of each share of outstanding capital stock of this
Corporation, securities convertible into such capital
stock and options, warrants or other rights to acquire
such capital stock.
"Market Price" shall mean with respect to a
security on any date, the Closing Price of such
security on the Trading Day immediately prior to such
date. The Market Price shall be deemed to be equal to
(a) in the case of a share of Class A Common Stock, the
Market Price of a share of Common Stock; and (b) in the
case of a share of Class A Preference Stock, the
Liquidation Preference. The Market Price of any
options, warrants, rights or other securities convert-
ible into or exercisable for Class A Common Stock
(except for the Class A Preference Stock) shall be
equal to the Market Price of options, warrants, rights
or other securities convertible into or exercisable for
Common Stock upon the same terms and otherwise contain-
ing the same terms as such options, warrants, rights or
other securities convertible into or exercisable for
Class A Common Stock.
"Maximum Price" shall mean, subject to adjustment
as provided in the Class A Provisions, the lesser of
(a) 125% of the Average Sprint Price for the relevant
trading period provided for herein and (b) $48.704.
"Minimum Dividend Amount" shall mean $0.25 per
share per quarter.
"Minimum Price" shall mean, subject to adjustment
as provided in the Class A Provisions, 135% of the
Average Sprint Price for the relevant period as
provided for herein.
"Modified Lower Threshold" shall mean, subject to
adjustment as provided in the Class A Provisions, the
quotient of (A) the sum of (i) the product of the Lower
Threshold Sprint Price multiplied by that number of
days prior to the Cellular Spin-off Date in any Spin-off
Trading Period and (ii) the product of the New
Lower Threshold Sprint Price multiplied by that number
of days beginning on and including the Cellular Spin-off
Date in such Spin-off Trading Period, divided by
(B) 20.
"Modified New Lower Threshold" shall mean, subject
to adjustment as provided in the Class A Provisions,
the quotient of (A) the sum of (i) the product of the
Second Anniversary Lower Threshold Sprint Price
multiplied by that number of days prior to the Cellular
Spin-off Date in any Spin-off Trading Period and
(ii) the product of 93.308% of the New Lower Threshold
Sprint Price multiplied by that number of days
beginning on and including the Cellular Spin-off Date
in such Spin-off Trading Period, divided by (B) 20.
"NASDAQ" means the National Association of
Securities Dealers, Inc. Automated Quotations System.
"Net Cellular Acquisition Amount" shall mean,
subject to adjustment as provided in the Class A
Provisions, the difference, which may be a negative
number, of the aggregate Purchase Prices paid by
Cellular for Acquisitions after June 22, 1995, minus
the aggregate value of the Sales Prices received by
Cellular in connection with Dispositions after June 22,
1995, such difference to be calculated on a per share
basis using the number of outstanding shares of Common
Stock immediately after the Cellular Spin-off Date.
"Net Cellular Indebtedness" shall mean, subject to
adjustment as provided in the Class A Provisions, the
amount of indebtedness for borrowed money of Cellular
outstanding immediately after the Cellular Spin-off
Date, minus the amount of Cellular's cash at such time,
such amount to be calculated on a per share basis using
the number of outstanding shares of Common Stock
immediately after the Cellular Spin-off Date.
"New Lower Threshold Price" shall mean, subject to
adjustment as provided in the Class A Provisions, the
Lower Threshold Sprint Price minus .9630 times the
Cellular Spin-off Reduction Factor.
"New Maximum Price" shall mean, subject to
adjustment as provided in the Class A Provisions,
(a) if the Cellular Spin-off Date occurs prior to the
First Closing for the relevant period specified herein,
the lesser of (i) 125% of the Average Sprint Price for
the relevant period specified herein and (ii) $48.704
minus 125% of the Cellular Spin-off Reduction Factor
and (b) if the Cellular Spin-off Date occurs after the
First Closing, the Maximum Price minus the product of
(i) the lesser of (x) 1.25 and (y) the quotient of
$48.704 divided by the Average Sprint Price used in
calculating such Maximum Price, multiplied by (ii) the
Cellular Spin-off Reduction Factor.
"New Minimum Price" shall mean, subject to
adjustment as provided in the Class A Provisions, the
Minimum Price minus 135% of the Cellular Spin-off
Reduction Factor.
"New Target Price" shall mean, subject to
adjustment as provided in the Class A Provisions, the
Target Price minus 130% of the Cellular Spin-off
Reduction Factor, provided that, if the Cellular Spin-off Date
does not occur prior to the Initial Issuance
Date and the Average Sprint Price determined at the
Initial Issuance Date is within the Sprint Price Range,
the New Target Price shall be the Target Price minus
the product of (a) the quotient of $47.225 divided by
such Average Sprint Price, multiplied by (b) the
Cellular Spin-off Reduction Factor.
"New Upper Threshold Sprint Price" shall mean,
subject to adjustment as provided in the Class A
Provisions, the Upper Threshold Sprint Price minus 1.04
times the Cellular Spin-off Reduction Factor.
"Non-Long Distance Business" shall mean (a) the
ownership of any equity or other interests in the Joint
Venture or any of the JV Entities; the enforcement or
performance of any of the rights or obligations of this
Corporation or any Subsidiary of this Corporation
pursuant to the Joint Venture Agreement; or any activi-
ties or services of the Joint Venture or any of the JV
Entities; (b) the Triple Play Activities; (c) any
activities or services primarily related to the provi-
sion of subscriber connections to a local exchange or
switch providing access to the public switched tele-
phone network; (d) any activities or services primarily
related to the provision of exchange access services
for the purpose of originating or terminating long
distance telecommunications services; (e) any activi-
ties or services primarily related to the resale by the
Local Exchange Division of long distance tele-
communications services of this Corporation or other
carriers; (f) any activities or services primarily
related to the provision of inter-LATA long distance
telecommunications services that are incidental to the
local exchange services business of the Local Exchange
Division; (g) any activities or services primarily
related to the provision of intra-LATA long distance
telecommunications services; (h) any activities or
services (whether local, intra-LATA or inter-LATA)
primarily related to the provision of cellular, PCS,
ESMR or paging services, mobile telecommunications
services or any other voice, data or voice/data wire-
less services, whether fixed or mobile, or related to
telecommunications services provided through commu-
nications satellite systems (whether low, medium or
high orbit systems); and (i) the use of the "Sprint"
brand name or any other brand names, trade names or
trademarks owned or licensed by this Corporation or any
of its Subsidiaries.
"North America" shall mean the current geographic
area covered by the following countries: Canada, the
United States of Mexico and the United States of
America.
"Notice of Abandonment" shall have the meaning set
forth in Section 3(a)(i) of the Class A Provisions,
provided that if the Cellular Spin-off Date does not
occur on or prior to the fifth anniversary of the
Initial Issuance Date, the Company shall be
conclusively deemed to have delivered a Notice of
Abandonment on such fifth anniversary.
"PCS" shall mean a radio communications system of
the type authorized under the rules for broadband
personal communications services designated as Subpart
E of Part 24 of the FCC's rules or similar Applicable
Laws of any other country, including the network,
marketing, distribution, sales, customer interface and
operations functions relating thereto.
"Percentage Ownership Interest" shall mean, with
respect to any Person, that percentage of the Voting
Power of this Corporation represented by Votes associ-
ated with the Voting Securities of this Corporation
owned of record by such Person or by its nominees.
"Per Share Common Dividend" shall have the meaning
set forth in Section 2(a)(ii) of the Class A
Provisions.
"Per Share Distributed Value" shall have the
meaning set forth in Section 3(b)(vii) of the Class A
Provisions.
"Person" shall mean an individual, a partnership,
an association, a joint venture, a corporation, a
business, a trust, any entity organized or existing
under Applicable Law, an unincorporated organization or
any Governmental Authority.
"Preferred Stock" shall have the meaning set forth
in ARTICLE SIXTH of these Articles of Incorporation.
"Preferred Stock Director" shall have the meaning
set forth in ARTICLE FIFTH of these Articles of Incor-
poration.
"Proceeding" shall mean any action, litigation,
suit, proceeding or formal investigation or review of
any nature, civil, criminal, regulatory or otherwise,
before any Governmental Authority.
"Purchase Price" shall mean, as to Acquisitions by
Cellular, the amount paid in cash plus the Fair Market
Value of non-cash consideration paid to effect such
Acquisition, provided that indebtedness assumed by
Cellular shall not be included in the Purchase Price
paid in respect of any Acquisition to the extent that
it is included in Net Cellular Indebtedness.
"Qualified Joint Venture" shall have the meaning
set forth in Article I of the Investment Agreement.
"Qualified Stock Purchaser" shall mean a Person
that (a) FT and DT reasonably believe has the legal and
financial ability to purchase shares of Class A Stock
from this Corporation in accordance with Article VI of
the Stockholders' Agreement and (b) would not be a
Major Competitor of this Corporation or of the Joint
Venture immediately following such purchase.
"Qualified Stock Purchaser Standstill Agreement"
shall have the meaning set forth in the Standstill
Agreement.
"Qualified Subsidiary" shall have the meaning set
forth in the Investment Agreement.
"Qualified Subsidiary Standstill Agreement" shall
have the meaning set forth in the Investment Agreement.
"Redemption Date" shall mean the date fixed by the
Board of Directors for the redemption of any shares of
capital stock of this Corporation pursuant to Section 2
of the provisions of ARTICLE SIXTH of these Articles of
Incorporation entitled GENERAL PROVISIONS RELATING TO
ALL STOCK.
"Redemption Securities" shall mean any debt or
equity securities of this Corporation, any of its
Subsidiaries, or any combination thereof having such
terms and conditions as shall be approved by the Board
of Directors and which, together with any cash to be
paid as part of the redemption price pursuant to
subsection (b) of Section 2 of the provisions of ARTI-
CLE SIXTH of these Articles of Incorporation entitled
GENERAL PROVISIONS RELATING TO ALL STOCK or Sec-
tion 3(a)(i) of the Class A Provisions, in the opinion
of an investment banking firm of recognized national
standing selected by the Board of Directors (which may
be a firm which provides other investment banking,
brokerage or other services to this Corporation), have
a Market Price, at the time notice of redemption is
given pursuant to subsection (d) of Section 2 of the
provisions of ARTICLE SIXTH of these Articles of
Incorporation entitled GENERAL PROVISIONS RELATING TO
ALL STOCK of Section 3(a)(i) of the Class A Provisions,
at least equal to the redemption price required to be
paid by subsection (a) of such Section 2 or Sec-
tion 3(a)(i) of the Class A Provisions.
"Registration Rights Agreement" shall mean the
Registration Rights Agreement, dated the Initial
Issuance Date, among FT, DT and this Corporation, as it
may be amended or supplemented from time to time.
"Requested Sale" shall have the meaning set forth
in Section 3(a)(i) of the Class A Provisions.
"Rights Agreement" shall mean the Rights Agree-
ment, dated as of August 8, 1989, between this Corpo-
ration and UMB Bank, n.a., as amended on June 4, 1992
and as of July 31, 1995, and as it may be amended or
supplemented from time to time.
"Sales Price" shall mean, as to any Disposition by
Cellular, the amount received in cash plus the Fair
Market Value of non-cash consideration received to
effect such Disposition, provided that any indebtedness
assumed or retained by Cellular shall not be deducted
from the Sales Price to the extent that it is included
in Net Cellular Indebtedness.
"Second Anniversary Lower Threshold Sprint Price"
shall mean, subject to adjustment as provided in the
Class A Provisions, $32.641.
"Section 310" shall have the meaning set forth in
Section 2(a) of ARTICLE FIFTH of these Articles of
Incorporation.
"Section 7(i) Aggregate Purchase Price" means the
aggregate purchase price paid for shares of Common
Stock purchased by the Class A Holders which are
converted into Class A Preference Stock pursuant to
Section 7(i) of the Class A Provisions.
"Section 7(i) Preference Shares" shall mean shares
of Class A Preference Stock acquired by the Class A
Holders upon conversion of shares of Common Stock
pursuant to Section 7(i) of the Class A Provisions.
"Shares" shall mean (a) shares of Class A Stock,
Common Stock or any other Voting Securities of this
Corporation, (b) securities of this Corporation
convertible into Voting Securities of this Corporation
and (c) options, warrants or other rights to acquire
such Voting Securities, but in the case of clause (c)
excluding any rights of the Class A Holders or FT and
DT to acquire Voting Securities of this Corporation
pursuant to the Investment Agreement and the Stock-
holders' Agreement (but not excluding any Voting
Securities received upon the exercise of such rights).
"Spin-off" shall mean any spin-off or other pro
rata distribution of equity interests of a wholly-owned
direct or indirect Subsidiary of this Corporation to
the stockholders of this Corporation, provided that the
term "Spin-off" shall not include the Cellular Spin-off
unless a Notice of Abandonment has been delivered.
Spin-off Trading Period" shall mean any 20
consecutive Trading Day period which begins on or after
the 19th Trading Day before the Cellular Spin-off Date
or which ends on or before the 18th Trading Day after
the Cellular Spin-off Date.
"Sprint Party" shall have the meaning set forth in
the Joint Venture Agreement.
"Sprint Price Range" shall mean from and including
the Lower Threshold Sprint Price to and including the
Upper Threshold Sprint Price.
"Sprint Sub" shall mean Sprint Global Venture,
Inc.
"Standstill Agreement" shall mean the Standstill
Agreement, dated as of July 31, 1995, among FT, DT and
this Corporation, as it may be amended or supplemented
from time to time.
"Stockholders' Agreement" shall mean the Stock-
holders' Agreement, dated as of the Initial Issuance
Date, among FT, DT and this Corporation (and all
exhibits thereto), as it may be amended or supplemented
from time to time.
"Strategic Investor" shall have the meaning set
forth in the Investment Agreement.
"Strategic Merger" shall mean a merger or other
business combination involving this Corporation (a) in
which the Class A Holders are entitled to retain or
receive, as the case may be, voting equity securities
of the surviving parent entity in exchange for or in
respect of (by conversion or otherwise) such Class A
Stock, with an aggregate Fair Market Value equal to at
least 75% of the sum of (i) the Fair Market Value of
all consideration which such Class A Holders have a
right to receive with respect to such merger or other
business combination, and (ii) if this Corporation is
the surviving parent entity, the Fair Market Value of
the equity securities of the surviving parent entity
which the Class A Holders are entitled to retain,
(b) immediately after which the surviving parent entity
is an entity whose voting equity securities are regis-
tered pursuant to Section 12(b) or Section 12(g) of the
Exchange Act or which otherwise has any class or series
of its voting equity securities held by at least 500
holders and (c) immediately after which no Person or
Group (other than the Class A Holders) owns Voting
Securities of such surviving parent entity with Votes
equal to more than 35 percent of the Voting Power of
such surviving parent entity.
"Subsidiary" shall mean, with respect to any
Person (the "Parent"), any other Person in which the
Parent, one or more direct or indirect Subsidiaries of
the Parent, or the Parent and one or more of its direct
or indirect Subsidiaries (a) have the ability, through
ownership of securities individually or as a group,
ordinarily, in the absence of contingencies, to elect a
majority of the directors (or individuals performing
similar functions) of such other Person, and (b) own
more than 50% of the equity interests, provided that
Atlas shall be deemed to be a Subsidiary of each of FT
and DT.
"Supervoting Powers" shall mean, as to the capital
stock and debt securities of this Corporation:
(a) Common Stock entitled to more than one
Vote per share (other than pursuant to the Rights
Agreement); or
(b) Voting Securities of this Corporation
other than Common Stock entitled to a number of
Votes per share or unit, as the case may be,
greater than the quotient of (i) the price per
share or unit, as the case may be, at which such
security will be issued by this Corporation di-
vided by (ii) the Market Price per share of Common
Stock on the date of issuance.
"Target Price" shall mean $47.225 (subject to
adjustment as provided in the Class A Provisions).
"Tie-Breaking Vote" shall have the meaning set
forth in Section 18.1(a) of the Joint Venture Agree-
ment, and shall include any successor provision there-
to.
"Total Requested Sale Proceeds" shall have the
meaning set forth in Section 3(a)(i) of the Class A
Provisions.
"Trading Day" shall mean, with respect to any
security, any day on which the principal national secu-
rities exchange on which such security is listed or
admitted to trading or NASDAQ, if such security is
listed or admitted to trading thereon, is open for the
transaction of business (unless such trading shall have
been suspended for the entire day) or, if such security
is not listed or admitted to trading on any national
securities exchange or NASDAQ, any day other than a
Saturday, Sunday, or a day on which banking
institutions in the State of New York are authorized or
obligated by law or executive order to close.
"Transfer" shall mean any act pursuant to which,
directly or indirectly, the ownership of the assets or
securities in question is sold, transferred, conveyed,
delivered or otherwise disposed, but shall not include
(a) any grant of Liens, (b) any conversion or exchange
of any security of this Corporation pursuant to a
merger or other business combination involving this
Corporation, (c) any transfer of ownership of assets to
the surviving entity in a Strategic Merger or pursuant
to any other merger or other business combination not
prohibited by the Class A Provisions, or (d) any fore-
closure or other execution upon any of the assets of
this Corporation or any of its Subsidiaries other than
foreclosures resulting from Lien Transfers.
"Treaty Benefit" shall mean:
(a) the 5% rate of dividend withholding (or any
successor rate applicable to non-portfolio
investments);
(b) the exemption from income tax with respect to
dividends paid or profits distributed by this
Corporation;
(c) the exemption from income tax with respect to
gains or profits derived from the sale,
exchange, or disposal of stock in this Corpo-
ration; or
(d) the exemption from taxes on capital with
respect to stock in this Corporation;
under, in the case of (a), (b), (c) and (d) above,
either (i) the relevant income tax treaty between
the United States and France, in the case of FT,
and the United States and Germany, in the case of
DT, or (ii) any provisions of French statutory
law, in the case of FT, or German statutory law,
in the case of DT, which refers to, or is based on
or derived from, any provision of such treaty, or
(e) any other favorable treaty benefit or statu-
tory benefit, that specifically requires the
ownership of a certain amount of voting power
or voting interest in this Corporation, under
a provision of the relevant income tax treaty
between the United States and France or the
statutory laws of France, in the case of FT,
or the relevant income tax treaty between the
United States and Germany or the statutory
laws of Germany, in the case DT, provided
that the chief tax officer of FT or DT cer-
tifies that such benefit is reasonably
expected to provide to FT or DT, as the case
may be, combined tax savings in the year such
certification is made and in future years of
at least U.S. $15 million.
"Triple Play Activities" shall mean (a) the owner-
ship of any equity or other interests in MajorCo, L.P.
or any of its successors or Affiliates; the enforcement
or performance of any of the rights or obligations of
this Corporation or any Subsidiary of this Corporation
pursuant to the Agreement of Limited Partnership of
MajorCo, L.P. or any other agreement or arrangement
contemplated thereby, except to the extent relating to
the provision of services by this Corporation as the
long distance telecommunications provider to MajorCo,
L.P.; or any activities or services of MajorCo, L.P. or
any of its successors or Affiliates; (b) the ownership
of any equity or other interests in any Teleport Entity
(as that term is defined in the Contribution Agreement
(the "Contribution Agreement"), dated as of March 28,
1995, by and among TCI Network Services, Comcast Tele-
phony Services, Cox Telephony Partnership, MajorCo,
L.P. and NewTelco, L.P.); or any activities or services
of any Teleport Entity or any of their respective
successors or Affiliates; and (c) the ownership of any
equity or other interests in PhillieCo, L.P., or any of
its successors or Affiliates; the enforcement or
performance of any of the rights or obligations of this
Corporation or any Subsidiary of this Corporation
pursuant to the Amended and Restated Agreement of
Limited Partnership of PhillieCo, L.P., dated as of
February 17, 1995, or any other agreement or arrange-
ment contemplated thereby, except to the extent relat-
ing to the provision of services by this Corporation as
the long distance telecommunications provider to
PhillieCo, L.P.; or any activities or services of
PhillieCo, L.P. or any of its successors or Affiliates.
"Upper Threshold Sprint Price" shall mean, subject
to adjustment as provided in the Class A Provisions,
$37.780.
"Venture Interests" shall have the meaning set
forth in the Joint Venture Agreement.
"Vote" shall mean, with respect to any entity, the
ability to cast a vote at a stockholders', members' or
comparable meeting of such entity with respect to the
election of directors, managers or other members of
such entity's governing body, or the ability to cast a
general partnership or comparable vote, provided that
with respect to this Corporation only, the term "Vote"
shall mean the ability to exercise general voting power
(as opposed to the exercise of special voting or disap-
proval rights such as those set forth in the Class A
Provisions) with respect to matters other than the
election of directors at a meeting of the stockholders
of this Corporation.
"Voting Power" shall mean, with respect to any
entity as at any date, the aggregate number of Votes
outstanding as at such date in respect of such entity.
"Voting Securities" shall mean, with respect to an
entity, any capital stock or debt securities of such
entity if the holders thereof are ordinarily, in the
absence of contingencies, entitled to a Vote, even
though the right to such Vote has been suspended by the
happening of such a contingency, and in the case of
this Corporation, shall include, without limitation,
the Common Stock and the Class A Stock, but shall not
include any shares issued pursuant to the Rights Agree-
ment to the extent such issuance is caused by action of
a Class A Holder.
"Weighted Average Price" shall mean the weighted
average per unit price paid by the purchasers of any
capital stock, debt instrument or security of this
Corporation. In determining the price of shares of
Common Stock or Class A Common Stock issued upon the
conversion or exchange of securities or issued upon the
exercise of options, warrants or other rights, the
consideration for such shares shall be deemed to
include the price paid to purchase the convertible
security or the warrant, option or other right, plus
any additional consideration paid upon conversion or
exercise. If any portion of the price paid is not
cash, the Independent Directors (acting by majority
vote) shall determine in good faith the Fair Market
Value of such non-cash consideration. If any new
shares of Common Stock are issued together with other
shares or securities or other assets of this Cor-
poration for consideration which covers both the new
shares and such other shares, securities or other
assets, the portion of such consideration allocable to
such new shares shall be determined in good faith by
the Independent Directors (acting by majority vote), in
each case as certified in a resolution sent to all
Class A Holders.
13. Notices. All notices made by this Cor-
poration pursuant to the Class A Provisions shall be
made in writing and any such notice shall be deemed
delivered when the same has been delivered in person
to, or transmitted by telex or telecopier to, or seven
days after it has been sent by air mail to the
addresses of, all of the Class A Holders as indicated
on the stock transfer books of this Corporation.
Communications by telex or telecopier also shall be
sent concurrently by air mail, but shall in any event
be effective as stated above.
14. No Other Beneficiaries. The Class A Pro-
visions are intended for the benefit of the Class A
Holders only, and nothing in the Class A Provisions is
intended or will be construed to confer upon or to give
any third party or other stockholder of this Cor-
poration any rights or remedies by virtue hereof. Any
term of the Class A Provisions may be waived by the
holders of at least two-thirds of the outstanding
shares of Class A Stock, voting together as a single
class.
8. In the portion of ARTICLE SIXTH entitled
"PREFERRED STOCK-FOURTH SERIES," the first sentence of
the provision entitled "Designation and Amount" is
hereby amended to delete the words "two and one-half
million (2,500,000)" and to substitute therefor the
words "six million two hundred fifty thousand
(6,250,000)".
9. In the portion of ARTICLE SIXTH entitled "PRE-
FERRED STOCK-FOURTH SERIES," the first sentence of the
provision entitled "Dividends" is hereby amended to
read in its entirety as follows:
The dividend rate on the shares of the Fourth
Series shall be for each quarterly dividend (here-
inafter referred to as a "quarterly dividend
period"), which quarterly dividend periods shall
commence on January 1, April 1, July 1 and Octo-
ber 1 in each year (or in the case of original
issuance, from the date of original issuance) and
shall end on and include the day next preceding
the first date of the next quarterly dividend
period, at a rate per quarterly dividend period
(rounded to the nearest cent) equal to the greater
of (a) $10.00 or (b) subject to the provision for
adjustment hereinafter set forth, 100 times the
aggregate per share amount of all cash dividends,
and 100 times the aggregate per share amount (pay-
able in cash, based upon the fair market value at
the time the non-cash dividend or other distrib-
ution is declared as determined in good faith by
the Board of Directors) of all non-cash dividends
or other distributions other than a dividend pay-
able in shares of Common Stock or Class A Common
Stock, as the case may be, or a subdivision of the
outstanding shares of Common Stock or Class A
Common Stock, as the case may be (by reclassifi-
cation or otherwise), declared (but not withdrawn)
on the Common Stock of the Corporation or the
Class A Common Stock of the Corporation, as the
case may be, during the immediately preceding
quarterly dividend period, or, with respect to the
first quarterly dividend period, since the first
issuance of any share or fraction of a share of
the Fourth Series.
10. The introductory paragraph to Paragraph 1 of
ARTICLE EIGHTH is hereby amended to read in its entire-
ty as follows:
1. Prevention of "Greenmail." Any direct or
indirect purchase or other acquisition by this
Corporation of any Equity Security (as hereinafter
defined) of any class at a price above Market
Price (as hereinafter defined) from any Interested
Securityholder (as hereinafter defined) who has
beneficially owned any Equity Security of the
class to be purchased for less than two years
prior to the date of such purchase or any agree-
ment in respect thereof shall, except as here-
inafter expressly provided, require the affirma-
tive vote of the holders of at least a majority of
the voting power of the then outstanding shares of
capital stock of this Corporation entitled to vote
generally in the election of directors (the
"Voting Stock"), excluding Voting Stock bene-
ficially owned by such Interested Securityholder,
voting together as a single class (it being under-
stood that for the purposes of this ARTICLE
EIGHTH, each share of the Voting Stock shall have
the number of votes granted to it pursuant to
ARTICLE SIXTH of this Certificate of Incorpora-
tion). Such affirmative vote shall be required
notwithstanding the fact that no vote may be
required, or that a lesser percentage may be
specified, by law or any agreement with any
national securities exchange, or otherwise, but
(i) no such affirmative vote shall be required
with respect to any purchase, redemption or other
acquisition by this Corporation of capital stock
from FT, DT, any Qualified Subsidiary or any
Qualified Stock Purchaser pursuant to the
provisions of the Investment Documents (as such
term is defined in Section 12 of the provisions of
ARTICLE SIXTH of these Articles of Incorporation
entitled GENERAL PROVISIONS RELATING TO CLASS A
STOCK) or these Articles of Incorporation, and
(ii) no such affirmative vote shall be required
with respect to any purchase or other acquisition
of securities made as part of a tender or exchange
offer by this Corporation to purchase securities
of the same class made on the same terms to all
holders of such securities and complying with the
applicable requirements of the Securities Exchange
Act of 1934 and the rules and regulations
thereunder (or any subsequent provisions replacing
such Act, rules or regulations).
We further certify that thereafter, pursuant to the
resolution and in accordance with the bylaws of this Cor-
poration and the laws of the State of Kansas, the Board of
Directors called a meeting of stockholders for consideration
of the proposed amendment, and thereafter, pursuant to
notice and in accordance with the statutes of the State of
Kansas, the stockholders convened and considered the pro-
posed amendment.
We further certify that at the meeting the requisite
percentage of the stockholders entitled to vote voted in
favor of the proposed amendment.
We further certify that the amendment was duly adopted
in accordance with the provisions of K.S.A. 17-6602, as
amended.
In Witness Whereof, we have hereunto set our hands and
affixed the seal of this Corporation this _______________
day of ______________________, 19_______.
__________________________________
[President] [Vice President]
__________________________________
[Secretary] [Assistant Secretary]<PAGE>
State of ______
ss.
County of ______________________
Be it remembered that before me, a Notary Public in and
for the aforesaid county and state, personally appeared
______________________________________, [President] [Vice
President] and ________________________________ [Secretary]
[Assistant Secretary], of the corporation named in this
document, who are known to me to be the same persons who
executed the foregoing certificate and duly acknowledged its
execution of the same this ________________________________
day of ___________________________________, 19 ___.
(Seal) __________________________
Notary Public
My appointment or commission expires _____________, 19__.
<PAGE>
Exhibit 99(b)
PROPOSED AMENDMENTS TO
THE BYLAWS
OF
SPRINT CORPORATION
* * *
1. SECTION 2 of ARTICLE I of the Bylaws shall be
amended to read in its entirety as follows:
SECTION 2. The principal office of the Corpora-
tion is located at 2330 Shawnee Mission Parkway,
Westwood, Kansas.
2. SECTION 1 of ARTICLE II of the Bylaws shall be
amended to read in its entirety as follows:
SECTION 1. All certificates of stock shall be
signed by the Chairman of the Board of Directors,
the President or a Vice President and the Secre-
tary or an Assistant Secretary, and sealed with
the corporate seal.
3. SECTION 2 of ARTICLE II of the Bylaws shall be
amended to read in its entirety as follows:
SECTION 2. Transfers of stock shall be made on
the books of the Corporation upon the surrender of
the old certificate properly endorsed, and said
old certificate shall be cancelled before a new
certificate is issued.
4. SECTION 3 of ARTICLE II of the Bylaws shall be
amended to read in its entirety as follows:
SECTION 3. A new certificate of stock may be
issued in the place of any certificate theretofore
issued, alleged to have been lost or destroyed,
and the Corporation may, in its discretion, re-
quire the owner of the lost or destroyed certifi-
cate, or its legal representative, to give a bond
sufficient to indemnify the Corporation against
any claim that may be made against it on account
of the alleged loss of any certificate.
5. SECTION 4 of ARTICLE II of the Bylaws shall be
amended to read in its entirety as follows:
SECTION 4. No holder of shares of any class of
this Corporation, or holder of any securities or
obligations convertible into shares of any class
of this Corporation, shall have any preemptive
right whatsoever to subscribe for, purchase or
otherwise acquire shares of this Corporation of
any class, whether now or hereafter authorized;
provided, however, that nothing in SECTION 4 shall
prohibit the Corporation from granting, contrac-
tually or otherwise, to any such holder, the right
to purchase additional securities of the Corpora-
tion.
6. ARTICLE III of the Bylaws shall be titled
"Stockholders' Meetings."
7. SECTION 2 of ARTICLE III of the Bylaws shall
be amended to read in its entirety as follows:
SECTION 2. A special meeting of the holders of
any one or more classes of the capital stock of
the Corporation entitled to vote as a class or
classes with respect to any matter, as required by
law or as provided in the Articles of Incorpora-
tion, may be called at any time and place by the
Chairman, the President or the Board of Directors,
and shall be called by the Chairman, the President
or the Secretary on the written request of the
holders of record of a majority of the shares of
stock of such class or classes issued and
outstanding and entitled to vote.
8. SECTION 3 of ARTICLE III of the Bylaws shall
be amended to read in its entirety as follows:
SECTION 3. Notice of the time and place of all
annual meetings and of the time, place and purpose
of all special meetings (other than meetings of
the holders of the Class A Stock separately as a
class) shall be mailed by the Secretary to each
stockholder at his last known post office address
as it appears on the records of the Corporation at
least twenty (20) days before the date set for
such meeting.
9. The first sentence of SECTION 4 of ARTICLE III
of the Bylaws shall be amended to read in its entirety
as follows:
SECTION 4. Nominations of persons for election to
the Board of the Corporation at a meeting of the
stockholders may be made by or at the direction of
the Board of Directors or may be made (a) in the
case of persons to be elected by stockholders
other than the holders of Class A Stock, at a
meeting of stockholders by any stockholder of the
Corporation who is not a holder of shares of Class
A Stock and who is entitled to vote for the elec-
tion of Directors at the meeting, and (b) in the
case of persons to be elected by the holders of
shares of Class A Stock as provided for in the
Articles of Incorporation of the Corporation (the
"Class A Directors"), at a meeting of stockholders
by any holder of shares of Class A Stock, in each
case in compliance with the notice procedures set
forth in this SECTION 4 of ARTICLE III.
10. The last two sentences of SECTION 4 of ARTI-
CLE III of the Bylaws shall be deleted and replaced in
their entirety as follows:
No person shall be eligible for election as a
Director of the Corporation at a meeting of the
stockholders (a) unless such person has been nom-
inated in accordance with the procedures set forth
herein; and (b) unless nominated by holders of the
Class A Stock or the Preferred Stock, such person
is an Independent Nominee, as hereinafter defined,
provided that nominees need not be Independent
Nominees if election of such nominees would not
result in less than a majority of the Board of
Directors following such election being Indepen-
dent Directors (as such term is defined in the
Articles of Incorporation of the Corporation). If
the facts warrant, the Chairman of the meeting
shall determine and declare to the meeting that a
nomination does not satisfy one or both of the
requirements set forth in clauses (a) and (b) of
the preceding sentence and the defective nomina-
tion shall be disregarded. As used herein,
"Independent Nominee" means a person who, if
elected, would be an Independent Director as such
term is defined in the Articles of Incorporation
of the Corporation. Nothing in this SECTION 4
shall be construed to affect the requirements for
proxy statements of the Corporation under Regula-
tion 14A of the Exchange Act.
11. A new SECTION 5 of ARTICLE III of the Bylaws
shall be added which shall read in its entirety as
follows:
SECTION 5. At any meeting of the stockholders
(other than a separate meeting of the holders of
the Class A Stock), only such business shall be
conducted as shall have been properly brought
before the meeting. To be properly brought before
a meeting (other than a separate meeting of the
holders of the Class A Stock), business must be
(a) specified in the notice of meeting (or any
supplement thereto) given by or at the direction
of the Board of Directors, (b) otherwise properly
brought before the meeting by or at the direction
of the Board of Directors, or (c) otherwise
properly brought before the meeting by a stock-
holder. For business to be properly brought
before a meeting by a stockholder, the stockholder
must have given timely notice thereof in writing
to the Secretary of the Corporation. To be
timely, a stockholder's notice shall be delivered
to or mailed and received at the principal execu-
tive offices of the Corporation not less than
fifty (50) days nor more than seventy-five (75)
days prior to the meeting; provided, however, that
in the event that less than sixty-five (65) days'
notice or prior public disclosure of the date of
the meeting is given or made to stockholders,
notice by the stockholder to be timely must be so
received no later than the close of business on
the fifteenth (15th) day following the day on
which such notice of the date of the meeting was
mailed or such public disclosure was made, which-
ever first occurs. Such stockholder's notice to
the Secretary shall set forth (a) as to each
matter the stockholder proposes to bring before
the meeting, a brief description of the business
desired to be brought before the meeting and the
reasons for conducting such business at the meet-
ing, and (b) as to the stockholder giving the
notice (i) the name and record address of the
stockholder, (ii) the class and number of shares
of capital stock of the Corporation which are
beneficially owned by the stockholder and
(iii) any material interest of the stockholder in
such business. No business shall be conducted at
a meeting of the stockholders (other than a
separate meeting of the holders of the Class A
Stock) unless proposed in accordance with the
procedures set forth herein. The Chairman of the
meeting shall, if the facts warrant, determine and
declare to the meeting that business was not prop-
erly brought before the meeting in accordance with
the foregoing procedure and such business shall
not be transacted. To the extent this SECTION 5
shall be deemed by the Board of Directors or the
Securities and Exchange Commission, or finally
adjudged by a court of competent jurisdiction, to
be inconsistent with the right of stockholders to
request inclusion of a proposal in the Corpora-
tion's proxy statement pursuant to Rule 14a-8
promulgated under the Securities Exchange Act of
1934, as amended, such rule shall prevail.
12. SECTION 5 of ARTICLE III of the Bylaws shall
be renumbered as SECTION 6 of ARTICLE III and shall be
amended to read in its entirety as follows:
SECTION 6. The Chairman of the Board of Direc-
tors, or in his absence the President, or in his
absence or inability to act, a Vice President
shall preside at all stockholders' meetings (other
than meetings of the holders of the Class A Stock
separately as a class).
13. SECTION 6 of ARTICLE III of the Bylaws shall
be renumbered as SECTION 7 of ARTICLE III and shall be
amended to read in its entirety as follows:
Except as otherwise provided in the Articles of
Incorporation of the Corporation, at each meeting
of the stockholders, each stockholder shall be en-
titled to cast one vote for each share of voting
stock standing of record on the books of the Cor-
poration, in his name, and may cast such vote
either in person or by proxy. All proxies shall
be in writing and filed with the Secretary of the
meeting.
14. SECTION 7 of ARTICLE III of the Bylaws shall
be renumbered as SECTION 8 and amended to read in its
entirety as follows:
SECTION 8. Except as otherwise provided in the
Articles of Incorporation of the Corporation, each
stockholder other than a holder of shares of Class
A Stock shall have the right to vote, in person or
by proxy, a number of votes equal to the number of
shares of stock owned by the stockholder for each
Director to be elected (other than those to be
elected by the holders of shares of Class A Stock
as provided for in the Articles of Incorporation
of the Corporation). Each holder of shares of
Class A Stock shall have the right to vote, in
person or by proxy, a number of votes equal to the
number of shares of Class A Stock owned by such
holder (or such other number of votes as may be
provided in the Articles of Incorporation of the
Corporation) for each director to be elected by
the holders of Class A Stock as provided for in
the Articles of Incorporation of the Corporation.
Stockholders shall not be entitled to cumulative
voting of their shares in elections of Directors.
15. SECTION 8 of ARTICLE III of the Bylaws shall
be renumbered as SECTION 9 and amended to read in its
entirety as follows:
SECTION 9. At any meeting held for the purpose of
electing directors, (i) the presence in person or
by proxy of the holders of at least a majority of
the then outstanding shares of Class A Stock shall
be required and be sufficient to constitute a
quorum of such class for the election by such
class of Class A Directors and (ii) the presence
in person or by proxy of the holders of at least a
majority of the then outstanding voting shares of
the Corporation other than the Class A Stock shall
be required and be sufficient to constitute a
quorum for the election of directors other than
Class A Directors. At any such meeting or
adjournment thereof the absence of a quorum of the
holders of Class A Stock shall not prevent the
election of directors other than Class A Direc-
tors, and the absence of a quorum of the holders
of voting shares other than Class A Stock shall
not prevent the election of Class A Directors. At
a meeting held for any purpose other than the
election of directors, shares representing a
majority of the votes entitled to be cast on such
matter, present in person or represented by proxy,
shall constitute a quorum. In the absence of the
required quorum at any meeting of stockholders, a
majority of such holders present in person or by
proxy shall have the power to adjourn the meeting,
from time to time, without notice (except as
required by law) other than an announcement at the
meeting, until a quorum shall be present.
16. SECTION 9 of ARTICLE III of the Bylaws shall
be renumbered as SECTION 10 and amended to read in its
entirety as follows:
SECTION 10. At each of the annual stockholders'
meetings, one of the executive officers of the
Corporation shall submit a statement of the busi-
ness done during the preceding year, together with
a report of the general financial condition of the
Corporation.
17. SECTION 2 of ARTICLE IV of the Bylaws shall
be amended to read in its entirety as follows:
SECTION 2. Each Director upon his election shall
qualify by filing his written acceptance with the
Secretary or an Assistant Secretary and by ful-
filling any prerequisite to qualification that may
be set forth in the Articles of Incorporation of
the Corporation.
18. SECTION 5 of ARTICLE IV of the Bylaws shall
be amended to read in its entirety as follows:
SECTION 5. Notice of all regular and special
meetings of the Board of Directors or the Execu-
tive Committee or any committee established pur-
suant to SECTION 12 of ARTICLE IV (an "Other Com-
mittee") shall be sent to each Director or member
of such committee, as the case may be, by the
Secretary, by a means reasonably calculated to be
received at least seven (7) days prior to the time
fixed for such meeting, or notice of special meet-
ings of the Board of Directors or the Executive
Committee or any Other Committee may be given by
telephone, telegraph, telefax or telex to each
Director or member of such committee, as the case
may be, at least twenty-four (24) hours prior to
the time fixed for such meeting, or on such
shorter notice as the person or persons calling
the meeting may reasonably deem necessary or
appropriate in the circumstances. To the extent
provided in the notice of the meeting or as other-
wise determined by the Chairman of the Board or
the Board of Directors, Directors may participate
in any regular or special meeting by means of
conference telephone or similar communications
equipment which allows all persons participating
in such meeting to hear each other, and participa-
tion in such meeting by means of such a device
shall constitute presence in person at such meet-
ing. In addition, Class A Directors who have not
received notice of any special meeting of the
Board of Directors or the Executive Committee or
any Other Committee, as the case may be, at least
six (6) days prior to the time fixed for such
meeting may participate in such meeting by means
of conference telephone or similar communications
equipment which allows all persons participating
in such meeting to hear each other, and participa-
tion in such meeting by means of such a device
shall constitute presence in person at such meet-
ing.
19. SECTION 7 of ARTICLE IV of the Bylaws shall
be amended to read in its entirety as follows:
SECTION 7. The directors shall elect the officers
of the Corporation and fix their salaries. Such
election shall be made at the Directors' meeting
following each annual stockholders' meeting.
20. SECTION 8 of ARTICLE IV of the Bylaws shall
be deleted in its entirety.
21. SECTIONS 9 and 10 of ARTICLE IV of the Bylaws
are hereby renumbered as SECTIONS 8 and 9 of ARTI-
CLE IV, respectively.
22. SECTION 11 of ARTICLE IV of the Bylaws is
hereby renumbered as SECTION 10 and shall be amended to
read in its entirety as follows:
SECTION 10
(a) Indemnification.
(1) Actions Other Than Those by or in the
Right of the Corporation. The Corpora-
tion shall indemnify any person who was
or is a party or is threatened to be
made a party to any threatened, pending
or completed action, suit or proceeding,
whether civil, criminal, administrative
or investigative (other than an action
by or in the right of the Corporation)
by reason of the fact that such person
is or was a director, officer, employee
or agent of the Corporation, or is or
was serving at the request of the Corpo-
ration as a director, officer, employee
or agent of another corporation, part-
nership, joint venture, trust or other
enterprise, against expenses (including
attorneys' fees), judgments, fines and
amounts paid in settlement actually and
reasonably incurred by such person in
connection with such action, suit or
proceeding if such person acted in good
faith and in a manner such person rea-
sonably believed to be in or not opposed
to the best interests of the Corporation
(or such other corporation or organiza-
tion), and, with respect to any criminal
action or proceeding, had no reasonable
cause to believe such person's conduct
was unlawful. The termination of any
action, suit or proceeding by judgment,
order, settlement, conviction, or upon a
plea of nolo contendere or its equiva-
lent, shall not, of itself, create a
presumption that the person did not act
in good faith and in a manner which such
person reasonably believed to be in or
not opposed to the best interests of the
Corporation, and, with respect to any
criminal action or proceeding, had rea-
sonable cause to believe that such per-
son's conduct was unlawful.
(2) Action by or in the Right of the Corpo-
ration. The Corporation shall indemnify
any person who was or is a party or is
threatened to be made a party to any
threatened, pending or completed action
or suit by or in the right of the Corpo-
ration to procure a judgment in its
favor by reason of the fact that such
person is or was a director, officer,
employee or agent of the Corporation, or
is or was serving at the request of the
Corporation as a director, officer,
employee or agent of another corpora-
tion, partnership, joint venture, trust
or other enterprise, against expenses
(including attorneys' fees) actually and
reasonably incurred by such person in
connection with the defense or settle-
ment of such action or suit if such
person acted in good faith and in a
manner such person reasonably believed
to be in or not opposed to the best
interests of the Corporation (or such
other corporation or organization) and
except that no indemnification shall be
made in respect of any claim, issue or
matter as to which such person shall
have been adjudged to be liable to the
Corporation (or such other corporation
or organization) unless and only to the
extent that the court in which such
action or suit was brought shall deter-
mine upon application that, despite the
adjudication of liability but in view of
all the circumstances of the case, such
person is fairly and reasonably entitled
to indemnity for such expenses which
such court shall deem proper.
(3) Successful Defense of Action. Notwith-
standing, and without limitation of, any
other provision of this SECTION 10, to
the extent that a director, officer,
employee or agent of the Corporation has
been successful on the merits or other-
wise in defense of any action, suit or
proceeding referred to in paragraph (1)
or (2) of this sub-Section (a), or in
defense of any claim, issue or matter
therein, such director, officer, employ-
ee or agent shall be indemnified against
expenses (including attorneys' fees)
actually and reasonably incurred by such
person in connection therewith.
(4) Determination Required. Any indemnifi-
cation under paragraph (1) or (2) of
this sub-Section (a) (unless ordered by
a court) shall be made by the Corpora-
tion only as authorized in the specific
case upon a determination that indem-
nification of the director, officer,
employee or agent is proper in the cir-
cumstances because such director, offi-
cer, employee or agent has met the ap-
plicable standard of conduct set forth
in said paragraph. Such determination
shall be made (i) by the Board of Direc-
tors by a majority vote of a quorum con-
sisting of directors who were not par-
ties to the particular action, suit or
proceeding, or (ii) if such a quorum is
not obtainable, or, even if obtainable,
a quorum of disinterested directors so
directs, by independent legal counsel in
a written opinion, or (iii) by the
stockholders.
(5) Advance of Expenses. Expenses incurred
in defending a civil or criminal action,
suit or proceeding may be paid by the
Corporation in advance of the final
disposition of such action, suit or
proceeding upon receipt of a satisfac-
tory undertaking by or on behalf of the
director, officer, employee or agent to
repay such amount if it shall ultimately
be determined that such person is not
entitled to be indemnified by the Corpo-
ration as authorized in this sub-Sec-
tion (a).
(b) Insurance. The Corporation may, when autho-
rized by the Board of Directors, purchase and
maintain insurance on behalf of any person
who is or was a director, officer, employee
or agent of the Corporation, or is or was
serving at the request of the Corporation as
a director, officer, employee or agent of
another corporation, partnership, joint ven-
ture, trust or other enterprise against any
liability asserted against such person and
incurred by such person in any such capacity,
or arising out of such person's status as
such, whether or not the Corporation would
have the power to indemnify him against such
liability under the provisions of sub-Section
(a). The risks insured under any insurance
policies purchased and maintained on behalf
of any person as aforesaid or on behalf of
the Corporation shall not be limited in any
way by the terms of this SECTION 10 and to
the extent compatible with the provisions of
such policies, the risks insured shall extend
to the fullest extent permitted by law, com-
mon or statutory.
(c) Nonexclusivity; Duration. The indemnifica-
tions and rights provided by, or granted
pursuant to, this SECTION 10 shall not be
deemed exclusive of any other indemnifica-
tions, rights or limitations of liability to
which any person may be entitled under any
Bylaw, agreement, vote of stockholders or
disinterested directors, or otherwise, either
as to action in such person's official
capacity or as to action in another capacity
while holding office, and they shall continue
although such person has ceased to be a
director, officer, employee or agent and
shall inure to the benefit of such person's
heirs, executors and administrators. The
authorization to purchase and maintain insur-
ance set forth in sub-Section (b) shall like-
wise not be deemed exclusive.
23. The first paragraph of SECTION 12 of ARTI-
CLE IV of the Bylaws is hereby renumbered as SECTION 11
and shall be amended to read in its entirety as fol-
lows:
The Chief Executive Officer of the Corporation,
together with no more than five additional
Directors elected by stockholders other than
holders of shares of Class A Stock, and at least
one Class A Director selected by the holders of a
majority of the shares of Class A Stock, shall
constitute an Executive Committee of the Board of
Directors. The Executive Committee between reg-
ular meetings of the Board of Directors shall
manage the business and property of the Corpora-
tion and shall have the same power and authority
as the Board of Directors; provided, however, the
Executive Committee shall not act (other than to
make recommendations) in those cases where it is
provided by law or by the Articles of Incor-
poration of the Corporation that any vote or
action in order to bind the Corporation shall be
taken by the Directors. Members of the Executive
Committee may participate in any meeting of the
Executive Committee by means of conference tele-
phone or similar communications equipment which
allows all persons participating in the meeting to
hear each other, and participation in a meeting by
means of such a device shall constitute presence
in person at such meeting.
24. The last paragraph of the new SECTION 11 of
ARTICLE IV of the Bylaws shall be amended to read in
its entirety as follows:
A majority of the Executive Committee shall con-
stitute a quorum for the transaction of business
at any meeting for which notice has been given to
all members in accordance with ARTICLE IV, SEC-
TION 5 hereof or for which notice has been waived
by all members.
25. A new section, numbered SECTION 12, shall be
inserted after SECTION 11 of ARTICLE IV, to read in its
entirety as follows:
SECTION 12. If the Board of Directors shall form
any committee other than the Executive Committee,
such committee shall have at least one member who
is a Class A Director; provided, however, that no
Class A Director shall be a member of (i) any
committee established pursuant to the provisions
of any law relating to the national security of
the United States, (ii) any committee the member-
ship on which by such a director would be prohib-
ited by any law or by the rules of the New York
Stock Exchange or (iii) the compensation commit-
tee, if the Board of Directors determines that
such a director would not be considered a "disin-
terested person" within the meaning of Rule
16b-3(c)(2)(i) promulgated under the Securities Ex-
change Act of 1934, as amended. Any committee so
formed, to the extent provided in the resolution
of the Board of Directors pursuant to which it was
formed or in the Bylaws or pursuant to the stat-
utes of Kansas, shall have and may exercise all
the powers and authority of the Board of Direc-
tors.
26. SECTION 1 of ARTICLE V of the Bylaws shall be
amended to read in its entirety as follows:
SECTION 1. The officers of this Corporation shall
be a Chairman of the Board of Directors, a Presi-
dent, as many Vice Presidents as the Board of
Directors may from time to time deem advisable and
one or more of which may be designated Executive
Vice President or Senior Vice President, a Secre-
tary, a Treasurer, and such Assistant Secretaries
and Assistant Treasurers as the Board of Directors
may from time to time deem advisable, and such
other officers as the Board of Directors may from
time to time deem advisable and designate. The
Chairman of the Board of Directors shall be a
member of and be elected by the Board of Direc-
tors. All other officers shall be elected by the
Board of Directors. All officers shall hold of-
fice until their respective successors are elected
and shall have qualified. Any two of said offices
may be held by one person except the office of
President and Vice President.
27. SECTION 2 of ARTICLE V of the Bylaws shall be
amended to read in its entirety as follows:
SECTION 2. The Chairman of the Board of Directors
shall preside at all meetings of the Directors and
stockholders at which he is present and shall have
such other duties, power and authority as may be
prescribed by the Board of Directors from time to
time. The Board of Directors may designate the
Chairman of the Board as the Chief Executive Offi-
cer of the Corporation with all of the powers
otherwise conferred upon the President of the
Corporation under these Bylaws, or it may, from
time to time, divide the responsibilities, duties
and authority for the general control and manage-
ment of the Corporation's business and affairs
between the Chairman of the Board and the Presi-
dent.
28. SECTION 3 of ARTICLE V of the Bylaws shall be
amended to read in its entirety as follows:
SECTION 3. Unless the Board of Directors other-
wise provides, the President shall be the Chief
Executive Officer of the Corporation with such
general executive powers and duties of supervision
and management as are usually vested in such of-
fice and shall perform such other duties as are
authorized by the Board of Directors. The Chair-
man of the Board or the President shall sign con-
tracts, certificates and other instruments of the
Corporation as authorized by the Board of Direc-
tors. If the Chairman of the Board is designated
as the Chief Executive Officer of the Corporation,
the President shall perform such duties as may be
delegated to him by the Board of Directors and as
are conferred by law exclusively upon such office.
29. SECTION 6 of ARTICLE V of the Bylaws shall be
amended to read in its entirety as follows:
SECTION 6. The Treasurer shall have custody of
all money and securities of the Corporation and
shall give bond in such sum and with such sureties
as the directors may specify, conditioned upon the
faithful performance of the duties of his office.
He shall keep regular books of account and shall
submit them, together with all his records and
other papers, to the directors for their examina-
tion and approval annually; and semi-annually, or
when directed by the Board of Directors, he shall
submit to each director a statement of the condi-
tion of the business and accounts of the Corpora-
tion; and shall perform all such other duties as
are incident to his office. An Assistant Trea-
surer, in the absence or inability of the Trea-
surer, shall perform all the duties of the Trea-
surer and such other duties as may be required.
30. ARTICLE VI of the Bylaws shall be retitled
"Dividends" and SECTION 2 of ARTICLE VI shall be de-
leted in its entirety.
31. ARTICLE VII of the Bylaws shall be amended to
read in its entirety as follows:
SECTION 1. Except as otherwise provided in the
Articles of Incorporation of the Corporation and
SECTION 2 of this ARTICLE VII, the Bylaws may be
amended, altered or repealed by the Board of Di-
rectors, subject to the power of stockholders to
amend, alter or repeal the Bylaws; or the Bylaws
shall be amended in such other manner as may from
time to time be authorized by the laws of the
State of Kansas.
SECTION 2. The following provisions of the Bylaws
may not be amended, altered, repealed or made
inoperative or ineffective by adoption of other
provisions to the Bylaws without the affirmative
vote of the holders of record of a majority of the
shares of Class A Stock then outstanding, voting
separately as a class, at any annual or special
meeting of stockholders, the notice of which shall
have specified or summarized the proposed amend-
ment, alteration or repeal of the Bylaws: ARTICLE
III, SECTIONS 2, 4, 5, 8 and 9; ARTICLE IV, SEC-
TIONS 5, 6, 10, 11 and 12; ARTICLE VI, SECTION 1;
and ARTICLE VII, SECTIONS 1 and 2.
