<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
SPRINT CORPORATION
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(NAME OF ISSUER)
COMMON STOCK
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(TITLE OF CLASS OF SECURITIES)
852061407
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(CUSIP NUMBER)
DEUTSCHE TELEKOM AG, JOACHIM KROESKE, CHIEF FINANCIAL OFFICER,
FRIEDRICH-EBERT-ALLEE 140,
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D-53113 BONN, GERMANY; PHONE (49-228) 181-8000
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FRANCE TELECOM, HENRI CHAINTREUIL, VICE PRESIDENT, 6 PLACE D'ALLERAY,
75505 PARIS CEDEX 15, FRANCE
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PHONE (33-1) 44-44-19-94
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(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON
AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS)
JANUARY 31, 1996
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(DATE OF EVENT WHICH REQUIRES FILING
OF THIS STATEMENT)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [_].
Check the following box if a fee is being paid with this statement [X]. (A fee
is not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
(Continued on following page(s))
Page 1 of 27 pages
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SCHEDULE 13D
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CUSIP NO. 852061407 PAGE 2 OF 27 PAGES
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NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Deutsche Telekom AG
IRS Identification Number: N/A
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [X]
(b) [ ]
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SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
WC
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e)
5 [ ]
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CITIZENSHIP OR PLACE OF ORGANIZATION
6
Germany
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SOLE VOTING POWER
7
NUMBER OF
0
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8 63,525,674.96 shares of Class A Preference Stock
(equivalent in voting power to 61,596,583.44 shares
OWNED BY of Common Stock)
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EACH SOLE DISPOSITIVE POWER
9 31,762,837.48 shares of Class A Preference Stock
REPORTING (equivalent in voting power to 30,798,291.72 shares
of Common Stock)
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
0
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11 63,525,674.96 shares of Class A Preference Stock
(equivalent in voting power to 61,596,583.44 shares
of Common Stock)
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[ ]
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
100% of Class A Preference Stock. If the Class A Preference Stock is
converted to Common Stock, approximately 15% of the Common Stock.
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TYPE OF REPORTING PERSON*
14
CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
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CUSIP NO.852061407 PAGE 3 OF 27 PAGES
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NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
France Telecom
IRS Identification Number: N/A
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [X]
(b) [ ]
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SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
WC
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e)
5 [ ]
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CITIZENSHIP OR PLACE OF ORGANIZATION
6
France
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SOLE VOTING POWER
7
NUMBER OF
0
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8 63,525,674.96 shares of Class A Preference Stock
(equivalent in voting power to 61,596,583.44 shares
OWNED BY of Common Stock)
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9 31,762,837.48 shares of Class A Preference Stock
REPORTING (equivalent in voting power to 30,798,291.72 shares
of Common Stock)
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
0
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11 63,525,674.96 shares of Class A Preference Stock
(equivalent in voting power to 61,596,583.44 shares
of Common Stock)
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[ ]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
100% of Class A Preference Stock. If the Class A Preference Stock is
converted to Common Stock, approximately 15% of the Common Stock.
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
OO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
ITEM 1. SECURITY AND ISSUER
The class of equity securities to which this Statement on Schedule 13D relates
is the common stock, par value $1.00 per share (the "Common Stock"), of Sprint
Corporation, a Kansas corporation (the "Issuer"), with its principal executive
offices located at 2330 Shawnee Mission Parkway, Westwood, Kansas 66205. The
Class A Stock (as defined in Item 6) acquired by the persons filing this joint
statement is convertible into Common Stock in the manner described in Item 6.
ITEM 2. IDENTITY AND BACKGROUND
The persons listed in numbers 1 and 2 below are persons filing this joint
statement. A copy of their written agreement relating to the filing of this
joint statement is filed as Exhibit 1 hereto.
1. a. Deutsche Telekom AG ("DT"), an Aktiengesellschaft formed under the laws
of Germany.
b. Friedrich-Ebert-Allee 140, D-53113 Bonn, Germany.
c. During the last five years, DT has not been convicted in any criminal
proceeding.
d. During the last five years, DT has not been a party to a civil proceeding
of a judicial or administrative body of competent jurisdiction and as a
result of such proceeding is or was subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding any
violation with respect to such laws.
Information regarding the directors and executive officers of DT is set forth
on Schedule I attached hereto, which Schedule is incorporated herein by
reference. Except as set forth on Schedule I, all of the directors and executive
officers of DT are citizens of Germany. During the last five years, to the best
knowledge of DT, no person named on Schedule I has been (a) convicted in a
criminal proceding (excluding traffic violations or similar misdemeanors) or (b)
a party to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding and as a result of such
proceeding is or was subject to a judgment, decree of final order enjoining
future violations of, or prohibiting or mandating activities subject to, federal
or state securities laws or finding any violation with respect to such laws.
2. a. France Telecom ("FT"), an exploitant public formed under the laws of
France.
b. 6 place d'Alleray, 75505 Paris Cedex 15, France.
c. During the last five years, FT has not been convicted in any criminal
proceeding.
d. During the last five years, FT has not been a party to a civil proceeding
of a judicial or administrative body of competent jurisdiction and as a
result of such proceeding is or was subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding any
violation with respect to such laws.
Information regarding the directors and executive officers of FT is set forth
on Schedule II attached hereto, which Schedule is incorporated herein by
reference. Except as set forth on Schedule II, all of the directors and
executive officers of FT are citizens of France. During the last five years, to
the best knowledge of FT, no person named on Schedule II has been (a) convicted
in a criminal proceding (excluding traffic violations or similar misdemeanors)
or (b) a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding and as a result of
such proceeding is or was subject to a judgment, decree of final order enjoining
future violations of, or prohibiting or mandating activities subject to, federal
or state securities laws or finding any violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
Each of FT and DT (and/or their respective designated subsidiaries) will
require funds in an aggregate of up to $2.1 billion (depending on whether the
Cellular Spin-Off is effected) to purchase shares of Class A Stock. In
connection with the $3 billion in aggregate amount of Class A Preference Stock
acquired on the Initial Issuance Date, FT and DT used cash on hand. With respect
to further acquisitions of Class A Stock, if any, FT expects that such funds
will be provided by cash on hand, borrowings or other sources, or a combination
thereof, and DT expects that such funds will be provided by cash flow from
current operations. The obligations of FT and DT under the Investment Agreement
to acquire further shares of Class A Stock are not conditioned upon the ability
of FT or DT to obtain financing therefor.
Page 4 of 27 Pages
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ITEM 4. PURPOSE OF THE ACQUISITION
DT and FT have entered into the investment arrangement described in Item 6
with the Issuer in order to participate and invest in the markets in which the
Issuer operates and as part of the related transactions described in Item 6.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
1. Deutsche Telekom AG
(a) DT is the beneficial owner of 63,525,674.96 shares of Class A Preference
Stock, representing approximately 15% of the voting power of the outstanding
Common Stock. The calculation of the foregoing percentage is based on the
number of shares of Common Stock shown as being outstanding on the Form 10-K
Annual Report filed by the Issuer with the SEC for the year ended December 31,
1994.
(b) The shares of Class A Stock (including the Class A Preference Stock) are
subject to the terms and conditions of the following agreements, documents and
instruments, among others, all as more fully described in Item 6:
i. the Investment Agreement, dated as of July 31, 1995, as amended,
among the Issuer, FT and DT (the "Investment Agreement");
ii. the Registration Rights Agreement, dated as of January 31, 1995,
among the Issuer, FT and DT (the "Registration Rights Agreement");
iii. the Standstill Agreement, dated as of July 31, 1995, among the
Issuer, FT and DT (the "Standstill Agreement");
iv. the Coordination Agreement, dated as of July 31, 1995, between FT
and DT (the "Coordination Agreement");
v. the Joint Venture Agreement, dated June 22, 1995, as amended (the
"Joint Venture Agreement"), among the Issuer, Sprint Global Venture, Inc.
("Sprint Sub"), FT, DT and Atlas Telecommunications SA ("Atlas")
vi. the Stockholders' Agreement, dated as of January 31, 1995, among the
Issuer, FT and DT (the "Stockholders' Agreement");
vii. the amendments to the Articles of Incorporation of the Issuer (the
"Charter Amendments") approved and adopted at a special meeting of
stockholders of the Issuer held on January 29, 1996, and filed by the Issuer
with the Secretary of State of the State of Kansas on January 30, 1996; and
viii. the amendments to the Bylaws of the Issuer (the "Bylaws
Amendments") approved and adopted at a special meeting of stockholders of the
Issuer held on January 29, 1996, and effective upon the Initial Issuance Date.
(c) Except as described herein, there have been no transactions by DT in
securities of the Issuer during the past sixty days.
(d) No one other than DT is known to have the right to receive or the power to
direct the receipt of dividends from, or the proceeds from the sale of, the
shares of Class A Stock (including the Class A Preference Stock) purchased by
DT.
(e) Not applicable.
Page 5 of 27 Pages
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2. France Telecom
(a) FT is the beneficial owner of 63,525,674.96 shares of Class A Preference
Stock, representing approximately 15% of the voting power of the outstanding
Common Stock. The calculation of the foregoing percentage is based on the
number of shares of Common Stock shown as being outstanding on the Form 10-K
Annual Report filed by the Issuer with the SEC for the year ended December 31,
1994.
(b) The shares of Class A Stock (including the Class A Preference Stock) are
subject to the terms and conditions of the following agreements, documents and
instruments, among others, all as more fully described in Item 6:
i. the Investment Agreement;
ii. the Registration Rights Agreement;
iii. the Standstill Agreement;
iv. the Coordination Agreement;
v. the Joint Venture Agreement;
vi. the Stockholders' Agreement;
vii. the Charter Amendments; and
viii. the Bylaws Amendments.
(c) Except as described herein, there have been no transactions by FT in
securities of the Issuer during the past sixty days.
(d) No one other than FT is known to have the right to receive or the power to
direct the receipt of dividends from, or the proceeds from the sale of, the
shares of Class A Stock (including the Class A Preference Stock) purchased by
FT.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
PURCHASE OF CLASS A STOCK
On January 31, 1996 (the "Initial Issuance Date"), at the first closing (the
"First Closing") under the Investment Agreement (as defined in Item 5), each of
FT and DT purchased 31,762,837.48 shares of Class A Preference Stock, par value
$1.00 per share (the "Class A Preference Stock"), of the Issuer.
The basic objective of the Investment Agreement is for FT and DT to purchase
Class A Common Stock, par value $2.50 per share (the "Class A Common Stock" and,
together with the Class A Preference Stock, the "Class A Stock"), of the Issuer
representing in the aggregate approximately 20% of the voting power of the
Issuer after such purchase. Under the circumstances and subject to the
conditions described in more detail below, the shares of Class A Preference
Stock purchased by FT and DT and/or certain of their designated subsidiaries
(collectively, the "Class A Holders") are
Page 6 of 27 Pages
<PAGE>
convertible into shares of Class A Common Stock, and the shares of Class A
Preference Stock and the shares of Class A Common Stock are convertible into
Common Stock. See, generally, the Investment Agreement attached hereto as
Exhibit 2 and incorporated herein by reference. The description of the
Investment Agreement contained herein is qualified in its entirety by reference
to such exhibit.
Purchase of Class A Preference Stock at the First Closing. On January 31,
1996, in accordance with the terms of the Investment Agreement, which provides
for a formula to determine the number, type and price of shares to be purchased,
FT and DT purchased $3 billion in aggregate liquidation value (and a $47.225 per
share liquidation value) of shares of Class A Preference Stock on the Initial
Issuance Date because (i) the Issuer's proposed spinoff of its cellular
operations to the holders of Common Stock (the "Cellular Spin-Off") was pending
on such date and (ii) the average closing market price (the "First Closing
Average Sprint Price") of a share of Common Stock for the 20 trading day period
ended 15 trading days before the Initial Issuance Date was greater than $38.963.
Pursuant to the terms of the Investment Agreement, the price (as adjusted from
time to time, the "Conversion Price") at which a share of Class A Preference
Stock acquired by FT and DT converts into a share of Class A Common Stock is,
subject to adjustment as described below, $48.704.
Purchase of Class A Common Stock at the Deferred Common Stock Closing. If (i)
the Cellular Spin-Off has occurred or has been abandoned, (ii) the conditions to
the establishment of the Conversion Date (as defined below in "Certain Terms
Relating to the Class A Preference Stock -- Conversion into Class A Common
Stock") have been satisfied, and (iii) the shares of Class A Preference Stock
are to be converted on the Conversion Date, unless such Conversion Date has been
deferred by FT and DT as described in the following paragraph, then FT and DT,
subject to certain conditions, will purchase from the Issuer additional shares
of Class A Common Stock equal to the excess of (i) 86,236,036 shares over (ii)
the sum of (x) the number of shares of Class A Common Stock issued upon the
conversion of the outstanding shares of Class A Preference Stock and (y) the
number of shares of Class A Common Stock 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 the Class A Holders or which have been
redeemed. The purchase price of each such additional share of Class A Common
Stock will be the Conversion Price at which shares of Class A Preference Stock
were converted into shares of Common Stock. Unless otherwise agreed by the
parties, the closing (the "Deferred Common Stock Closing") of such purchase will
occur on the later of (i) the Conversion Date and (ii) the date on which all of
the conditions precedent to such closing have been satisfied or waived.
Purchase of Class A Preference Stock at the Supplemental Preference Stock
Closing. As described below in "Certain Terms Relating to the Class A
Preference Stock -- Conversion into Class A Common Stock"), FT and DT may elect
to defer conversion of the Class A Preference Stock in accordance with the
Articles of Association of the Issuer (as amended by the Charter Amendments (as
defined in Item 5) thereto filed in connection with the First Closing, the
"Articles") if the Conversion Price is in excess of 135% of the average closing
market price (the "Average Sprint Price") of a share of Common Stock for the 20
consecutive trading day period ended on the 10th business day prior to the
Conversion Date. If FT and DT elect to defer such conversion, then, subject to
certain conditions, FT and DT will purchase from the Issuer additional shares of
Class A Preference Stock having an aggregate liquidation value equal to the
excess of (i) the product of 86,236,036 and the per share Conversion Price of
the outstanding Class A Preference Stock over (ii) the aggregate liquidation
value of the shares of Class A Preference Stock previously purchased. The
purchase price of each such share will be equal to its liquidation value.
Unless otherwise agreed by the parties, the closing (the "Supplemental
Preference Stock Closing") of such purchase will occur ten business days after
the later of (i) the date on which the election to defer conversion pursuant to
the Articles is made and (ii) the date on which all of the conditions precedent
to such closing have been satisfied or waived.
Purchase of Optional Shares. Each of FT and DT will have the right, but not
the obligation, to purchase from the Issuer additional shares (the "Optional
Shares") of either (i) Class A Common Stock, if the Issuer has previously issued
Class A Common Stock (the date on which such Class A Common Stock was first
issued being referred to as the "Class A Common Issuance Date"), or (ii) Class A
Preference Stock, if the Supplemental Preference Stock Closing has occurred.
The number of Optional Shares that each of FT and DT will be entitled to
purchase at the closing for such shares (the "Optional Shares Closing")
generally will be equal to one-half of the number of shares of Class A Common
Stock equal to, or one-half of the number of additional shares of Class A
Preference Stock convertible into a number of additional shares of Class A
Common Stock equal to, 25% of the number of shares of Common Stock issued after
June
Page 7 of 27 Pages
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14, 1994 and on or prior to the date of the Supplemental Preference Stock
Closing or the Class A Common Issuance Date, whichever first occurs (the
"Investment Completion Date").
Shares of Class A Preference Stock purchased at the Optional Shares Closing
will have a per share liquidation value equal to their per share purchase price
and, upon the issuance of such shares at the Optional Shares Closing, the
Conversion Price will be adjusted as described below in "Certain Terms Relating
to the Class A Preference Stock --Conversion Into Class A Common Stock."
With respect to shares of Common Stock issued after June 14, 1994 and on or
prior to the Investment Completion Date, other than (subject to certain
exceptions) those shares of Common Stock issued in respect of stock options,
warrants or other rights in existence on or before the Initial Issuance Date or
upon the conversion of any securities outstanding on or before the Initial
Issuance Date, the purchase price of the Optional Shares will be based on the
weighted average per unit price paid for such Common Stock. With respect to
shares of Common Stock issued after June 14, 1994 and on or prior to the
Investment Completion Date in respect of stock options, warrants or other rights
in existence on or before the Initial Issuance Date or upon the conversion of
any securities outstanding on or before the Initial Issuance Date, the purchase
price of the Optional Shares will be based on the higher of (i) the per share
price at which Class A Common Stock was issued and sold to FT and DT at the
Class A Common Issuance Date or at which Class A Preference Stock was issued at
the Supplemental Preference Stock Closing and (ii) the weighted average price
paid for such Common Stock.
Adjustments. The number of shares of Class A Stock to be purchased by FT and
DT and the purchase price for such shares will be adjusted to reflect any stock
split, subdivision, stock dividend or other reclassification, consolidation or
combination of the voting securities of the Issuer or similar action or
transaction occurring between June 14, 1994 and the Investment Completion Date.
No such adjustment will be made in respect of the Cellular Spin-Off. In
addition, the number of shares of Class A Stock to be purchased by FT and DT
will be reduced by the minimum number of shares, if any, necessary to ensure
that after the Investment Completion Date FT and DT will own in the aggregate no
more than 20% of the sum of (i) the outstanding voting power of the Issuer and
(ii) the voting power of the Issuer which FT and DT have committed to purchase.
Effect of Conversion. If after the Initial Issuance Date the Fundamental
Rights (as defined below in "--Conversion of Class A Common Stock; Termination
of Fundamental Rights") 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, shares of Class A Stock to have been
issued by the Issuer shall instead be issued as Common Stock.
TERMS OF CLASS A STOCK
In General
The Charter Amendments establish the terms of the Class A Stock, including
voting rights, and also supplement the terms of the Common Stock in order to set
forth the rights of the holders of the Common Stock in relation to those of the
holders of the Class A Stock. See, generally, the Charter Amendments attached
hereto as Exhibit 8 and incorporated herein by reference. The description of
the Charter Amendments contained herein is qualified in its entirety by
reference to such exhibit.
The terms of the Class A Common Stock generally will be equivalent on a per
share basis to the terms of the Common Stock except for special voting and other
rights of the Class A Common Stock described below. The terms of the Class A
Preference Stock generally will be identical to the terms of the Class A Common
Stock with respect to rights to representation on the Issuer's Board of
Directors (the "Board") and disapproval rights, but will differ from the Class A
Common Stock in other respects, such as the right to receive dividends and
liquidation rights, voting rights and protection from dilution.
Page 8 of 27 Pages
<PAGE>
Certain Terms Relating to the Class A Preference Stock
Dividends. 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, but after payment of dividends to holders of shares of all series of
Preferred Stock of the Issuer (the "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, quarterly dividends in an amount per share equal to:
(i) until the Investment Completion Date, the aggregate per share amount
of all dividends and distributions declared on the Common Stock since the
immediately preceding dividend payment date for the Class A Preference Stock
(other than extraordinary dividends and distributions), multiplied by $47.225
and divided by the Conversion Price at the time in effect, and
(ii) from and after the Investment Completion Date, the aggregate per
share amount of dividends declared on the Common Stock since the immediately
preceding dividend payment date for the Class A Preference Stock (or, with
respect to the first dividend payment date after the Investment Completion
Date, since the Investment Completion Date) multiplied by the aggregate amount
paid by the Class A Holders for all outstanding shares of Class A Preference
Stock, including any shares of Class A Preference Stock converted from any
other form of the Issuer's capital stock, divided by the number of shares of
Class A Preference Stock outstanding (such aggregate amount paid divided by
the number of shares outstanding being referred to herein as the "Liquidation
Preference") and divided by the Conversion Price at the time in effect.
The Charter Amendments set forth details relating to the priority in payment
of dividends on the Class A Preference Stock and the consequences of the
Issuer's failure to pay such dividends in a timely manner.
Liquidation Rights. In the event of any voluntary or involuntary liquidation,
dissolution, or winding up of the Issuer, the holders of any series of Preferred
Stock which has not been specifically made to rank junior or on a parity with
Class A Preference Stock in the distribution of assets upon liquidation,
dissolution or winding-up of the Issuer will be entitled to receive their
liquidation preferences before any distributions are made to the holders of the
Class A Preference Stock. No distribution may be made to the holders of shares
of capital stock junior to the Class A Preference Stock until the holders of the
Class A Preference Stock, other than shares of Class A Preference Stock acquired
by the Class A Holders upon conversion of shares of Common Stock pursuant to the
Articles (the "Converted Preference Stock"), have received the Liquidation
Preference per share of Class A Preference Stock. The Converted Preference
Stock shall, immediately prior to such liquidation, dissolution or winding-up,
automatically convert back into the number of shares of Common Stock which were
converted into Converted Preference Stock pursuant to the Articles.
Voting Rights. Except as may otherwise be required by law, and except in
connection with the election of directors and the exercise of certain
disapproval rights, the shares of Class A Preference Stock will be entitled to
the number of votes equal to the number of shares of Class A Common Stock into
which the then outstanding shares of Class A Preference Stock would, at the time
of determination, be convertible.
Anti-Dilution Provisions. The Articles provide for protection of the holders
of the Class A Preference Stock against dilution relating to stock splits,
mergers, exchanges and certain other dilutive transactions.
Conversion into Class A Common Stock. Shares of Class A Preference Stock are
convertible into shares of Class A Common Stock as described below.
Timing of Conversion. Shares of Class A Preference Stock will automatically
convert into Class A Common Stock (or into Common Stock if the Fundamental
Rights shall have terminated as to all outstanding shares of Class A Preference
Stock) at the Conversion Price on the date (the "Conversion Date") which is the
earliest of (x) 35 trading days after the occurrence of the Cellular Spin-Off,
(y) 30 days after the abandonment of the Cellular Spin-Off and (z) 60 days after
the fifth anniversary of the Initial Issuance Date. Notwithstanding the
foregoing, if after the Cellular Spin-Off occurs shares of Class A Preference
Stock otherwise would be converted at a Conversion Price equal to or greater
than 135%
Page 9 of 27 Pages
<PAGE>
of the Average Sprint Price for the 20 trading days ended on the 10th
business day prior to the Conversion Date, the Class A Holders may elect to
defer the conversion until the first business day following the 30th business
day after the occurrence of a period of 20 trading days in which the Conversion
Price is not more than 135% of the Average Sprint Price over such period or
until the Class A Holders otherwise elect to convert at the Conversion Price.
Re-Fixing of Conversion Price. Effective on the date of the Cellular Spin-
Off, the Conversion Price in effect immediately prior to the Cellular Spin-Off
will automatically be re-fixed by deducting from such Conversion Price an amount
equal to the product of (i) the quotient of $48.704 divided by the Average
Sprint Price used in calculating such Conversion Price, multiplied by (ii) a
base factor (the "Cellular Spin-Off Reduction Factor") used to reflect the
reduction in value of the Issuer due to the Cellular Spin-Off. The Cellular
Spin-Off Reduction Factor depends upon the average closing price of the common
stock of the spun-off entity ("Spinco") for the 20 trading days following the
Cellular Spin-Off, as adjusted to reflect the number of outstanding shares of
Spinco common stock relative to the number of outstanding shares of Common Stock
(the "Adjusted Cellular Price"). In general, if the Adjusted Cellular Price is
between $3.25 and $7.25, the Cellular Spin-Off Reduction Factor will be $5.25;
if the Adjusted Cellular Price is lower than $3.25, the Cellular Spin-Off
Reduction Factor will be below $5.25; and if the Adjusted Cellular Price is
higher than $7.25, the Cellular Spin-Off Reduction Factor will be higher than
$5.25. The Cellular Spin-Off Reduction Factor and the ranges used to calculate
such factor will be adjusted to reflect (i) the level of indebtedness to be
borne by Spinco to the extent it differs from the $2.955 per share specified in
the Investment Agreement, and (ii) the purchase and sale prices of any
acquisitions and dispositions effected by the Issuer's cellular and wireless
division prior to the Cellular Spin-Off.
The Conversion Price will also be adjusted to reflect the purchase price of
any additional shares of Class A Preference Stock acquired by FT and DT (i) at
an Optional Shares Closing, (ii) pursuant to their equity purchase rights under
the Stockholders' Agreement (as defined in Item 5) or (iii) pursuant to the
automatic conversion of Common Stock into Class A Stock under the Articles.
Conversion Following Certain Rights Plan Events. Upon the occurrence of
certain events under the Rights Plan, dated August 8, 1989, as amended (the
"Rights Plan") of the Issuer, each share of Class A Preference Stock will
convert into shares of Class A Common Stock at a Conversion Price of $47.225.
See also "Conversion of Class A Common Stock; Termination of Fundamental
Rights."
Certain Terms Relating to the Class A Common Stock
Dividends. Subject to exceptions set forth in the Articles, the holders of
shares of Class A Common Stock will be entitled to receive, when, as and if
declared by the Board, dividends on the shares of Class A Common Stock in an
amount per share equal to the per share amount of any dividend on the Common
Stock.
Liquidation Rights. In the event of any voluntary or involuntary liquidation,
dissolution, or winding up of the Issuer, after payment or provision for payment
of the debts and other liabilities of the Issuer, including the liquidation
preferences of any existing series of preferred or preference stock of the
Issuer then outstanding, the holders of the Class A Common Stock and the holders
of the Common Stock will share ratably in any remaining assets of the Issuer.
Voting Rights. Except as may otherwise be required by law, and except in
connection with the election of directors and the exercise of certain
disapproval rights, each share of Class A Common Stock will be entitled to one
vote on each matter in respect of which the holders of shares of Common Stock
are entitled to vote, and the holders of shares of Class A Common Stock will
vote together as a single class with the holders of shares of the Common Stock
and all other classes or series of capital stock of the Issuer which have
general voting power. No holder of capital stock of the Issuer, including the
Class A Holders, is entitled to cumulative voting of his or her shares of
capital stock in the election of any members of the Board. With respect to
certain breaches of the Standstill Agreement (as defined in Item 5), FT and/or
DT will not be entitled to vote any of their shares of capital stock of the
Issuer with respect to the matter arising from or relating to such breach.
Page 10 of 27 Pages
<PAGE>
Anti-Dilution Provisions. The Issuer may not effect any reclassification,
subdivision or combination of the outstanding Class A Common Stock unless at the
same time the Common Stock is reclassified, subdivided or combined so that the
holders of the Common Stock remain entitled, in the aggregate, to voting power
of the Issuer representing the same percentage relative to the Class A Common
Stock as was represented by the Common Stock prior to such reclassification,
subdivision or combination. Holders of Class A Common Stock have identical
anti-dilution protection if such modifications are made to the Common Stock. In
connection with such a reclassification, subdivision or combination of Common
Stock, the Issuer would also be required to maintain all of the rights provided
to the Class A Holders in the Articles.
In addition, in the case of any consolidation or merger of the Issuer with or
into any other entity (other than a merger or consolidation which does not
result in any reclassification, conversion, exchange or cancellation of the
Common Stock) or any other reclassification of the Common Stock into any other
form of capital stock of the Issuer, each holder of Class A Common Stock will
have the right to 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 in such merger, consolidation
or reclassification had such Class A Holder converted its shares of Class A
Common Stock into Common Stock immediately prior to such merger, consolidation
or reclassification.
Associated Rights. Each share of Class A Common Stock will have attached one-
half of a right issued pursuant to the Rights Plan.
Certain Terms Relating to All Class A Stock
Board Representation Rights
As and from the Initial Issuance Date, the Class A Holders have the right to
representation on the Board equal to the percentage of the Issuer's voting power
owned by the Class A Holders, rounded up or down to the nearer whole number of
directors. On the Initial Issuance Date, FT and DT exercised such right and
elected Mr. Michel Bon and Dr. Ron Sommer to the Board. In addition, for so
long as it is necessary in order to allow FT and DT to receive certain benefits
under tax treaties between the United States and France and between the United
States and Germany, respectively, the Class A Holders will be entitled to elect
not less than 20% of the members of the Board at any time when their actual
percentage of the Issuer's voting power is at least 20%. Moreover, the Class A
Holders will be entitled to elect a minimum of two directors so long as the
percentage of voting securities of the Issuer owned by them, plus the percentage
they are committed to purchase (collectively, and determined on a basis that
includes as outstanding the shares they are committed to purchase, the
"Committed Percentage"), does not fall below 10% due to transfers or, if the
Committed Percentage is below 10% for 180 consecutive days following a Major
Issuance, until the later of (i) three years after the consummation of such
Major Issuance and (ii) the Investment Completion Date. In addition, until the
Investment Completion Date, so long as the aggregate liquidation value of the
outstanding Class A Preference Stock is at least $1.5 billion (or a lesser
amount resulting from a purchase by the Issuer of shares of Class A Preference
Stock pursuant to the Stockholders' Agreement in order for the Issuer to comply
with Section 310 of the Communications Act of 1934, as amended (the
"Communications Act")), the Class A Holders will be entitled to elect a minimum
of two directors to the Board.
Unless prohibited by law or the rules of the New York Stock Exchange (the
"NYSE"), the Class A Holders will be entitled to one representative on each
committee of the Board. After examining the relevant circumstances, the NYSE
has indicated that it would be opposed to the Class A Holders having a
representative on the Audit Committee of the Board.
The Articles provide that any Class A Director may be removed from office with
or without cause by the affirmative vote of the holders of a majority of the
outstanding shares of Class A Stock voting separately as a class or with cause
by the affirmative vote of the holders of two-thirds of the outstanding voting
securities of the Issuer voting as a single class.
Disapproval Rights
Page 11 of 27 Pages
<PAGE>
Pursuant to the terms of the Class A Stock, the Class A Holders will have the
right for specified periods of time to disapprove the taking of certain actions
by the Issuer. These rights will include the right to disapprove certain
business transactions of the Issuer, issuances of 30% or more of the Issuer's
voting power (a "Major Issuance") and certain transactions involving Major
Competitors of FT/DT (as such term is defined under "Major Competitors" below).
Certain Business Transactions. The Class A Holders will have the right to
disapprove the following actions by the Issuer until the second anniversary of
the Initial Issuance Date (through action by the holders of a majority of the
shares of Class A Stock):
(i) other than certain exempt transactions defined in the Articles as
"Exempt Asset Divestitures" and "Exempt Long Distance Asset Divestitures", any
transaction or series of related transactions resulting in divestitures of
assets with a fair market value in excess of 20% of the Issuer's market
capitalization as of the date of the definitive agreement relating to the last
such divestiture;
(ii) other than Exempt Asset Divestitures and Exempt Long Distance Asset
Divestitures, any transaction or series of related transactions (including a
merger or other business combination) resulting in the acquisition for cash or
debt securities having a maturity of less than one year of:
(A) businesses defined in the Articles as "Core Businesses", the
purchase price of which exceeds 20% of the Issuer's market capitalization
immediately prior to such acquisition; or
(B) businesses other than Core Businesses, the purchase price of
which exceeds 5% of the Issuer's market capitalization immediately prior
to such acquisition,
provided that if an acquisition involves both Core Businesses and other
businesses and the ratio of the fair market value of the Core Businesses to be
acquired to the fair market value of the other businesses to be acquired
exceeds 1.75 to 1, then the Class A Holders will only be entitled to
disapproval rights as set forth in clause (ii)(A) above;
(iii) the issuance by the Issuer of any capital stock or debt with class
voting rights and certain disapproval rights which are in scope and duration
as extensive as or more extensive than the rights granted to the Class A
Holders;
(iv) the declaration of extraordinary cash dividends or cash
distributions to stockholders of the Issuer during any one year in excess of
5% of the market capitalization of the Issuer (if the Investment Completion
Date has not occurred by the end of such two-year period, the Class A Holders
will continue to have the right to disapprove such dividends or distributions
until the occurrence of the Investment Completion Date);
(v) any merger or other business combination in which the Issuer is not
the surviving parent corporation; and
(vi) any Major Issuance.
Beginning two years after the Initial Issuance Date, the Issuer may take any
of the foregoing actions despite the disapproval of such action by FT and DT.
However, if despite such disapproval the Issuer nevertheless takes any of the
actions described in clauses (i), (ii), (iii), (iv) or (vi) above following the
second anniversary, but prior to the fifth anniversary, of the Initial Issuance
Date, the transfer restrictions described below applicable to the Class A Stock
(other than those restrictions relating to transfers to a holder of more than 5%
of the Issuer's voting power) will terminate, unless in the case of a Major
Issuance the Class A Holders have exercised their equity purchase rights in
respect of such Major Issuance.
Page 12 of 27 Pages
<PAGE>
In addition, during the five-year period following the Initial Issuance Date,
a Major Issuance will require the approval of two-thirds of the Independent
Directors (as defined in the Articles), and after such five-year period will
require the approval of a majority of the Independent Directors as long as any
shares of Class A Stock are outstanding.
Governing Documents, Etc. The Class A Holders will have the right to
disapprove the following actions until no shares of Class A Stock are
outstanding:
(i) amendments to the Articles, the Bylaws of the Issuer (as amended by
the Bylaws Amendments (defined in Item 5) the "Bylaws") or the Rights Plan
that would adversely affect the rights of the Class A Holders under the
Articles or the Bylaws;
(ii) issuance by the Issuer of any capital stock or debt (including
pursuant to a merger or other business combination) with more than one vote
per share or otherwise having supervoting powers;
(iii) any merger or other business combination involving the Issuer that
results in a Change of Control (as defined below in "-- Change of Control
Rights"), unless the surviving corporation expressly (x) assumes all of the
Issuer's obligations to the Class A Holders with respect to the assets defined
in the Articles as "Long Distance Assets" and all of the provisions of the
Registration Rights Agreement (as defined in Item 5) and (y) agrees to be
bound by the rights of FT, DT and their affiliates to exercise greater control
over the Joint Venture (as defined in Item 6) following certain occurrences;
(iv) any merger or other business combination involving the Issuer that
does not result in a Change of Control, unless (x) the Issuer survives as the
parent entity, or (y) the surviving corporation expressly assumes all of the
Issuer's obligations in respect of the rights of the Class A Holders granted
pursuant to the Articles, the Bylaws, the Stockholders' Agreement and the
Registration Rights Agreement; and
(v) for so long as any shares of Class A Preference Stock are
outstanding, the issuance by the Issuer 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 the Issuer senior to such rights of
the Class A Preference Stock.
Long Distance Assets. Until the earliest of (i) the fifth anniversary of the
Initial Issuance Date, (ii) the date on which the ownership by FT and DT of the
Long Distance Assets is no longer prohibited by Section 310 of the
Communications Act, (iii) the date on which the FT/DT Parties elect to accept
the Issuer's offer to sell all of the interests (the "Venture Interests") of the
Issuer and certain of its affiliates (the "Sprint Parties") in the companies
comprising the Joint Venture (the "JV Entities") following a Change of Control,
and (iv) the date on which the Sprint Parties exercise their right to sell all
of the Venture Interests to the FT/DT Parties following a Change of Control
(such period, the "Initial Period"), no sale of a Cumulative amount of 5% or
more of the fair market value of Long Distance Assets, other than Exempt Long
Distance Asset Divestitures, may be consummated by the Issuer if it is
disapproved by the Class A Holders. As used herein, the term "Cumulative" means
a percentage representing the aggregate fair market value of all Long Distance
Assets previously sold or proposed to be sold in the transaction for which such
calculation is being made, divided by the fair market value of Long Distance
Assets existing on the date of the definitive agreement with respect to such
transaction.
Major Competitors. During the ten-year period following the Initial Issuance
Date, the Issuer may not consummate any transaction or take any other action
that would result in, or is taken for the purpose of encouraging or
facilitating, a Major Competitor of FT/DT (as defined in the Articles) having,
or being granted by the Issuer, any right, permission or approval to acquire,
10% or more of the outstanding voting power of the Issuer if such transaction or
action is disapproved by the Class A Holders, unless such transaction is a
Strategic Merger (as defined in the Articles).
Major Competitor Rights
Until the tenth anniversary of the Initial Issuance Date, if a Major
Competitor of FT/DT obtains securities representing 20% or more of the
outstanding voting power of the Issuer as the result of a Strategic Merger, the
Class A
Page 13 of 27 Pages
<PAGE>
Holders will have the right to commit within 30 days after the latter of
the consummation of such Strategic Merger and the Initial Issuance Date, to
purchase from the Issuer or its successor in the Strategic Merger, and the
Issuer or such successor will be obligated to sell to the Class A Holders after
the Investment Completion Date, a number of shares of Class A Stock such that
the aggregate percentage ownership of the Class A Holders shall be equal to the
percentage ownership interest of such Major Competitor following the
consummation of such Strategic Merger. If the Class A Holders do not so elect,
(i) the Issuer will take all actions necessary to lift all restrictions imposed
by the Issuer on the ability of the Class A Holders to purchase shares from
third parties, (ii) the Issuer will be obligated to ensure that the Class A
Holders will have rights (other than rights deriving solely from the number of
shares of voting securities of the Issuer owned) in scope and duration at least
as extensive as certain rights granted by the Issuer to such Major Competitor,
regardless of whether the Class A Holders exercise their right to increase their
ownership, and (iii) if such Major Competitor has been granted rights by the
Issuer equivalent or superior to the board representation rights of the Class A
Holders, the disapproval rights of the Class A Holders, the rights with respect
to Major Competitors of FT/DT, the right of first offer with respect to Long
Distance Assets, the equity purchase rights of the Class A Holders, and the
protections provided to the Class A Holders in the event of a Change of Control
or an Exclusionary Tender Offer (collectively, the "Minority Rights") of the
Class A Holders, then for a period of five years following the date of closing
of such transaction FT, DT, Atlas or any qualifying subsidiary of FT, DT or
Atlas which owns interests in the JV Entities (collectively the "FT/DT Parties")
will obtain rights which will give them greater control over the Joint Venture.
Change of Control Rights
If the Issuer determines to effect an Acquisition Proposal (as defined below
in this paragraph), the Issuer will conduct such transaction in accordance with
reasonable procedures to be determined by the Board and permit FT and DT to
participate in that process on a basis no less favorable than that granted any
other participant. In general, this provision is designed to permit FT and DT
to participate as a bidder in such transaction on an equal basis with all other
bidders seeking to acquire control of the Issuer.
In addition, if the Board determines to effect a transaction involving a
Change of Control, the standstill provisions applicable to FT and DT pursuant to
the Standstill Agreement will terminate. If a Change of Control occurs, the
Class A Holders will not be obligated to proceed with any additional purchases
of Class A Stock which would have been required under the Investment Agreement.
Finally, in the case of a Change of Control, the FT/DT Parties will obtain
rights which will give them greater control over the Joint Venture, provided
that if, at any time following such Change of Control, the Sprint Parties offer
to sell all of their Venture Interests to the FT/DT Parties at a price equal to
the appraised value thereof, and the FT/DT Parties decline such offer, then, at
such time, such rights will terminate. During the two year period beginning on
the fifth anniversary of the consummation of a Change of Control, the Sprint
Parties will have the right to require the FT/DT Parties to purchase all of the
Venture Interests of the Sprint Parties at the appraised value thereof. If the
FT/DT Parties accept such offer or such right is exercised by the Sprint
Parties, the disapproval rights of the Class A Holders with respect to the Long
Distance Assets of the Issuer will terminate.
As used herein, an "Acquisition Proposal" means a determination by the Issuer
to sell all or substantially all of its assets or not to oppose a third-party
tender, exchange or other purchase offer for more than 35% of the voting power
of the Issuer or to sell control of the Issuer or to effect a merger or other
business combination, the result of which would be a 35% or larger stockholder
(other than FT, DT and those majority-owned subsidiaries of FT and/or DT which
satisfy certain criteria ("Qualified Subsidiaries")) in the resulting entity. A
"Change of Control" means:
(i) a decision by the Board to sell control of the Issuer or not to
oppose a third party tender offer for the Issuer's voting securities
representing more than 35% of the voting power of the Issuer, or
(ii) a change in the identity of the majority of the Board due to (x) a
proxy contest (or the threat to engage in a proxy contest) or the election of
directors by the holders of Preferred Stock, or (y) any unsolicited tender,
exchange or other purchase offer which has not been approved by a majority of
the Independent Directors,
Page 14 of 27 Pages
<PAGE>
except that neither a Strategic Merger nor any transaction between the Issuer
and FT and/or DT shall be deemed to be a Change of Control.
Exclusionary Tender Offer Rights
In addition to the rights of the Class A Holders upon a Change of Control, if
the Board determines not to oppose a tender offer by a person other than FT, DT
or their respective affiliates for 35% or more of the Issuer voting power which
does not permit the Class A Holders to sell an equal or greater percentage of
their shares as the other holders of the voting securities of the Issuer are
permitted to sell (an "Exclusionary Tender Offer"), the Class A Holders will
have the right (but not the obligation) to cause the conversion into Common
Stock of all or part of the shares of Class A Stock held by them. Upon such
election, each share of Class A Common Stock so designated will automatically
convert into one duly issued, fully paid and nonassessable share of Common Stock
and each share of Class A Preference Stock will automatically convert into,
generally, a number of shares of Common Stock equivalent to the number of shares
of Class A Common Stock into which it would be convertible.
In the event of an Exclusionary Tender Offer in which the Class A Holders do
not elect to convert their shares of Class A Stock into Common Stock as
described above, upon the completion of the purchase by a third party of
securities representing not less than 35% of the Issuer's voting power in such
Exclusionary Tender Offer, the Class A Holders will have the option to require
the Issuer to purchase at the tender offer price all, but not less than all, of
the shares that they were unable to tender on the same basis as the other
stockholders, unless under the terms of the tender offer such Class A Holders
are entitled to receive publicly traded securities and/or cash in an equivalent
amount in a business combination transaction required to be effected within 90
days after the consummation of the tender offer.
Equity Purchase Rights
The Stockholders' Agreement provides that, following the Investment Completion
Date and for so long as the Committed Percentage of the Class A Holders is not
less than 10% for more than a specified period and unless such right is
otherwise terminated, when the Issuer issues additional shares of Common Stock
or other voting securities each of the Class A Holders will have the right,
subject to certain restrictions, to maintain its proportionate ownership of the
Issuer's voting power (based on such Class A Holder's Committed Percentage) by
purchasing additional shares of Class A Stock from the Issuer. See, generally,
the Stockholders' Agreement attached hereto as Exhibit 7 and incorporated herein
by reference. The description of the Stockholders' Agreement contained herein
is qualified in its entirety by reference to such exhibit.
The purchase price for such shares will depend upon the nature of the issuance
which gives rise to such purchase right, as provided in the Stockholders'
Agreement.
Major Issuance Rights
The Stockholders' Agreement provides that, if the Committed Percentage of the
Class A Holders is diluted to less than 10% of the outstanding voting power of
the Issuer as a result of a Major Issuance, the Class A Holders will be
entitled, in addition to any equity purchase rights referred to above entitling
them to purchase shares from the Issuer to increase their ownership of the
outstanding voting power of the Issuer, during the three-year period following
the consummation of such Major Issuance to increase their Committed Percentage
to 10% of the outstanding voting power of the Issuer if within 180 days after
such Major Issuance (or, if Class A Preference Stock is outstanding and if the
Initial Issuance Date has not yet occurred, within 180 days of the Initial
Issuance Date), the Class A Holders commit to the Issuer to increase their
interest to 10% of the outstanding voting power of the Issuer through purchases
from third parties.
Long Distance Assets Rights
The Stockholders' Agreement provides that, following the Initial Period and
prior to the tenth anniversary of the Initial Issuance Date, with certain
exceptions, if a disposition of Long Distance Assets by the Issuer would result
in the disposition of a Cumulative amount of 30% or more of the fair market
value of Long Distance Assets since the date of
Page 15 of 27 Pages
<PAGE>
the Investment Agreement, the Class A Holders will have a right of first offer
with respect to the assets of which the Issuer proposes to dispose, unless such
right of first offer has been otherwise terminated. In connection with such a
disposition, for so long as the restrictions contained in Section 310 of the
Communications Act apply, FT and DT will have the right to assign their right to
purchase such Long Distance Assets to a buyer (a "Qualified LD Purchaser")
having the legal and financial capacity to buy such assets which would not be a
Major Competitor of Sprint (as defined below in "Conversion of Class A Common
Stock; Termination of Fundamental Rights -- Conversion Following Breach of Joint
Venture Agreement") based on the business of the Issuer following such
disposition. Upon learning the identity of the prospective Qualified LD
Purchaser proposed by FT and DT, the Issuer will be entitled to abandon the
disposition which gave rise to such right in FT and DT.
Registration Rights
The Class A Holders have been granted certain registration rights by the
Issuer pursuant to the Registration Rights Agreement. See, generally, the
Registration Rights Agreement attached hereto as Exhibit 3 and incorporated
herein by reference. The description of the Registration Rights Agreement
contained herein is qualified in its entirety by reference to such exhibit.
The holders of a majority of the Class A Stock will be entitled to demand one
registration in any 12-month period, up to a maximum of seven registrations.
The Issuer will be responsible for the registration expenses in connection with
the first five of such registrations; the holders of the Class A Stock
requesting registration will be responsible for the registration expenses in
connection with the remaining two registrations. The Issuer is not required to
effect any registration unless the market value of the Class A Stock requested
to be registered exceeds $200 million. The holders of the Class A Stock will
also have the right to participate in all registrations of Common Stock by the
Issuer on behalf of itself or any other party, other than registrations on Forms
S-4 or S-8, registrations in connection with an exchange offer or offerings
solely to the Issuer's existing stockholders or pursuant to dividend
reinvestment plans or dividend reinvestment and stock purchase plans.
Transfer Restrictions
Pursuant to the Stockholders' Agreement, the Class A Holders have agreed not
to transfer any equity interests in the Issuer until the fifth anniversary of
the Initial Issuance Date, except for transfers to FT, DT, Qualified
Subsidiaries, and in certain circumstances, Qualified Stock Purchasers (such
permitted transfers being "Section 2.2 Transfers"). After the general
prohibition on transfers is no longer applicable, until such time as the sum of
(i) the Committed Percentage of the Class A Holders and (ii) the percentage of
the voting power of the Issuer represented by voting securities of the Issuer
which the Class A Holders have the right to commit to purchase pursuant to the
Investment Agreement and the Stockholders' Agreement is less than 3 1/2% of the
outstanding voting power of the Issuer for more than 150 days, no Class A Holder
may make any transfer to, or resulting in, a holder of more than 5% of the
voting power of the Issuer, other than in an underwritten public offering. In
connection with any such public offering, a Class A Holder may not to the best
of its knowledge (i) sell more than 2% of the outstanding voting power of the
Issuer to any person or group that, prior to such sale, owned 3% or more of such
voting power of the Issuer, (ii) sell more than 5% of the outstanding voting
power of the Issuer to any person or group or (iii) sell to a person or group
required under Section 13(d) of the Exchange Act to file a Schedule 13D with
respect to the Issuer (a "Schedule 13D Filer") or to a person or group who, as a
result of such sale, would become a Schedule 13D Filer.
So long as the sum of (i) the Committed Percentage of the Class A Holders and
(ii) the percentage of the voting power of the Issuer which the Class A Holders
have the right to commit to purchase pursuant to the Investment Agreement and
the Stockholders' Agreement is greater than 5%, but less than 9% (immediately
following a transfer of shares of Class A Stock by the Class A Holders) or 10%
(for more than 150 days immediately following the issuance of additional voting
securities of the Issuer other than pursuant to a Major Issuance), no Class A
Holder may transfer shares of Class A Stock representing more than 1% of the
voting power of the Issuer to any one person or group of persons in any
transaction or series of transactions, except in connection with a public
offering, or transfer shares other than in a public offering to any "Major
Competitor of Sprint."
Page 16 of 27 Pages
<PAGE>
Each proposed sale by the Class A Holders of equity securities of the Issuer
to a third party, other than Section 2.2 Transfers, will be subject to the
rights of first offer and first refusal specified in the Stockholders'
Agreement.
In the event of a Change of Control resulting from a determination by the
Board to sell all or substantially all of the assets of the Issuer (or not to
oppose a third-party tender offer for more than 35% of the Issuer's voting
power) or to sell control of the Issuer or to effect a merger or other business
combination, the result of which is a 35% or larger stockholder (other than FT,
DT or any of their Qualified Subsidiaries) in the resulting entity the Class A
Holders generally will have the right to sell their shares of Class A Stock in
such transaction free of any restriction on transfer (except for transfers to
large holders) set forth in the Stockholders' Agreement.
The transfer restrictions (other than those relating to transfers to large
holders) and the rights of first offer and first refusal will terminate (i) if
the Joint Venture is terminated due to a material breach by the Issuer, (ii) on
the first anniversary of a termination of the Joint Venture for any reason other
than a material breach by the Issuer or the FT/DT Parties, (iii) if the Issuer
breaches certain material provisions of the Investment Agreement or the related
documents, (iv) if the Issuer proceeds with a transaction involving an
Acquisition Proposal, (v) if the Class A Holders own shares (A) representing
less than 10% of the outstanding Common Stock and the Class A Common Stock for
150 days due to share issuances by the Issuer (other than a Major Issuance), or
(B) representing less than 9% of the outstanding Common Stock and the Class A
Common Stock due to sales by the Class A Holders (provided that the Issuer's
right of first offer shall continue until the Class A Holders own or are
committed to acquire or have the right to commit to acquire less than 5% of the
voting power of the Issuer), (vi) if the Class A Holders own shares representing
less than 10% of the outstanding Common Stock and Class A Common Stock as a
result of a Major Issuance and the Class A Holders fail to exercise their right
to purchase additional Class A Common Stock in connection therewith, (vii) if
there is a greater than 20% holder of voting securities of the Issuer (other
than the Class A Holders) or there is a Change of Control, or (viii) if the
Issuer undertakes certain transactions between the second and fifth
anniversaries of the Initial Issuance Date notwithstanding the disapproval of FT
and DT (other than with respect to a Major Issuance following which the Class A
Holders exercise their equity purchase rights with respect thereto).
Standstill Restrictions
As a condition to entering into the Investment Agreement, FT, DT and the
Issuer have entered into the Standstill Agreement. See, generally, the
Standstill Agreement attached hereto as Exhibit 4 and incorporated herein by
reference. The description of the Standstill Agreement contained herein is
qualified in its entirety by reference to such exhibit.
The Standstill Agreement imposes restrictions on the ability of FT and DT and
their respective "affiliates" and "associates" (as defined in the Standstill
Agreement) to acquire additional voting power in the Issuer that would result in
FT, DT and their respective affiliates and associates beneficially owning more
than 20% of the Issuer's voting power during the first fifteen years following
the date of the Standstill Agreement (the "Initial Percentage Limitation") and
more than the lesser of (i) 30% of the Issuer's voting power and (ii) that
percentage of the Issuer's outstanding voting securities equal to 80% of the
Foreign Ownership Limitation (as defined below) (the "Subsequent Percentage
Limitation," and together with the Initial Percentage Limitation, the
"Percentage Limitations"). For purposes of the Standstill Agreement, the
"Foreign Ownership Limitation" means the maximum aggregate percentage of the
Issuer's voting securities 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
the Issuer or any of its affiliates to conduct any portion of the business of
the Issuer or such affiliate, as such maximum aggregate percentage may be
increased from time to time by amendments to Section 310 or by actions of the
FCC. In addition, the Standstill Agreement imposes restrictions on the ability
of FT, DT and their respective affiliates and associates to initiate or
participate in proposals with respect to the control of the Issuer. The term
"associate" in the Standstill Agreement generally has the meaning ascribed to
such term in Rule 12b-2 under the Exchange Act, except that such definition has
been limited with respect to the "associates" of FT and DT for purposes of the
Standstill Agreement.
Under the Standstill Agreement, FT and DT and their respective affiliates
generally will be permitted, subject to the Rights Plan, to increase their
beneficial ownership beyond the applicable Percentage Limitation to the extent
Page 17 of 27 Pages
<PAGE>
required to match the percentage ownership of voting securities of the Issuer
owned by any other shareholder, provided that the beneficial ownership of FT and
DT and their respective affiliates does not exceed 80% of the Foreign Ownership
Limitation. In addition, neither FT nor DT shall be deemed in violation of the
beneficial ownership restriction if the beneficial ownership of the Issuer's
voting securities by FT and DT exceeds the applicable Percentage Limitation
solely due to (i) an acquisition of the Issuer's voting securities by the
Issuer, unless FT and DT have previously been notified of such acquisition, or
(ii) purchases by FT and DT of voting securities of the Issuer in reliance on
information regarding the number of outstanding voting securities of the Issuer
provided by the Issuer to FT and DT, unless FT and DT have previously been
notified that such information is incorrect.
If an acquisition by FT or DT or their respective affiliates and associates of
beneficial ownership of additional voting securities of the Issuer otherwise
permitted by the Standstill Agreement is prohibited because it would result in
FT or DT and their respective affiliates and associates beneficially owning a
percentage of the outstanding voting securities of the Issuer greater than that
percentage equal to 80% of the Foreign Ownership Limitation, then in accordance
with the terms of the Stockholders' Agreement, FT and DT may assign their rights
to purchase the additional shares of voting securities of the Issuer they would
otherwise be entitled to purchase under the Standstill Agreement to an entity
that FT and DT reasonably believe has the legal and financial ability to
purchase such shares and that would not be an Alien or a Major Competitor of
Sprint immediately following such purchase (a "Qualified Stock Purchaser").
The Standstill Agreement provides a number of other restrictions on the
actions or public announcements which may be undertaken or made by FT, DT and
their respective affiliates and associates.
FT and DT have agreed to cause (i) their Qualified Subsidiaries which acquire
shares of Class A Stock, (ii) each person other than FT, DT or a passive
financial institution which acquires an equity interest in a Qualified
Subsidiary (each, a "Strategic Investor"), and (iii) each Qualified Stock
Purchaser which acquires any shares of Class A Stock, in each case to execute a
standstill agreement prior to and as a condition to the effectiveness of such
acquisition.
Redemptions
Outstanding shares of Common Stock held by Aliens (as defined in the
Communications Act) and, in certain circumstances, Class A Stock held by Aliens
may be redeemed at prices provided in the Articles by action of the Board to the
extent necessary, in the judgment of the Board, to comply with Section 310 of
the Communications Act. Shares of Class A Stock may be redeemed only 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 the Issuer
immediately prior to the time of such redemption. In addition, prior to
redeeming shares of Class A Stock, the Issuer is required to consult in good
faith with the Class A Holders to consider alternatives to redemption, and the
Issuer may not redeem such shares unless the Independent Directors determine in
good faith that, after considering all reasonable alternatives, the failure to
redeem such shares would have a material adverse effect on the Issuer.
For so long as the Class A Preference Stock is outstanding, the Issuer is not
authorized to redeem shares of Class A Preference Stock to the extent such
redemption would result in the Class A Holders owning shares of Class A
Preference Stock with an aggregate liquidation value of less than $1.5 billion.
However, to the extent the Class A Preference Stock represents more than 20% of
the Issuer's voting power, the Issuer may require the Class A Holders to sell to
the Issuer such number of shares of Class A Preference Stock as in the
reasonable good faith judgment of the Board is necessary to comply with the
requirements of Section 310 of the Communications Act, even if such sale would
result in the Class A Preference Stock having an aggregate liquidation value of
less than $1.5 billion.
Conversion of Class A Common Stock; Termination of Fundamental Rights
As discussed below, under certain circumstances, shares of Class A Common
Stock will automatically convert into shares of Common Stock, or, if any shares
of Class A Preference Stock are outstanding, the rights of the holders of the
Class A Preference Stock to elect directors and exercise disapproval rights and
the right of FT and DT to participate in a proposed Change of Control (the
"Fundamental Rights") associated with such Class A Preference Stock will
terminate.
Page 18 of 27 Pages
<PAGE>
Conversion Following Reduction in Ownership. If, after the Investment
Completion Date, the aggregate Committed Percentage of the Class A Holders is
below 10% for more than 180 consecutive days other than due to sales by the
Class A Holders, each outstanding share of Class A Common Stock will
automatically convert into one share of Common Stock or, if shares of Class A
Preference Stock are outstanding, the Fundamental Rights will terminate, unless
the Committed Percentage falls below 10% for more than 180 consecutive days due
to a Major Issuance, in which case the Class A Common Stock will not convert or
the Fundamental Rights will not terminate, as the case may be, until the later
of (i) three years after the consummation of such Major Issuance and (ii) the
Investment Completion Date. If after the Investment Completion Date the
Committed Percentage falls below 10% due to a sale by the Class A Holders, each
outstanding share of Class A Common Stock will automatically and immediately
convert into one share of Common Stock or, if any shares of Class A Preference
Stock are outstanding, the Fundamental Rights will immediately terminate.
Moreover, if prior to the Investment Completion Date the Class A Holders own in
the aggregate less than $1.5 billion of Class A Preference Stock due to a
transfer of such Class A Preference Stock by the Class A Holders (other than a
transfer required by the Issuer to comply with Section 310 of the Communications
Act), the Fundamental Rights will terminate.
Conversion Following Breach of Certain Related Investment Documents. Except
as described below, each outstanding share of Class A Common Stock will,
following certain procedural steps, convert into one share of Common Stock or,
if any shares of Class A Preference Stock are outstanding, the Fundamental
Rights will terminate, if (i) FT, DT or any Qualified Subsidiary breaches in any
material respect its obligations with respect to transfers of Class A Stock to
large stockholders, (ii) FT, DT or any Qualified Subsidiary breaches in any
material respect any other restriction on the transfer of Class A Stock or (iii)
FT, DT or any Qualified Subsidiary breaches its obligations under certain
specified provisions of the Standstill Agreement or under any standstill
agreement into which such Qualified Subsidiary has entered (a "Qualified
Subsidiary Standstill Agreement"), as the case may be, subject to certain
procedures.
Conversion Following Failure to Purchase Class A Stock. The Fundamental
Rights associated with any outstanding Class A Preference Stock will terminate
if any Class A Holder fails to purchase Class A Stock at any closing at which it
is required to effect such a purchase.
Conversion Following Breach of the Joint Venture Agreement. Except as
described below, each outstanding share of Class A Common Stock will
automatically convert into one share of Common Stock or, if any shares of Class
A Preference Stock are outstanding, the Fundamental Rights will immediately
terminate, if (i) the Sprint Parties receive the right to control the management
of the Joint Venture as a result of the sale by Atlas of all or a substantial
part of its telecommunications assets used to provide services to the Joint
Venture to a Major Competitor of Sprint or as a result of certain breaches of
the Joint Venture Agreement or the Related Joint Venture Documents or (ii) the
Joint Venture is terminated due to certain actions by the FT/DT Parties. A
"Major Competitor of Sprint" is defined generally as a company which materially
competes with a major portion of the telecommunications services business of the
Issuer in North America or the business of the Joint Venture or a company which
has taken substantial steps to become such a Major Competitor.
If the Joint Venture is terminated due to certain actions on the part of the
Sprint Parties or if the FT/DT Parties receive the right to control the
management of the Joint Venture due to certain breaches of the Joint Venture
Agreement by the Sprint Parties, each share of Class A Common Stock outstanding
will automatically convert into one share of Common Stock on the third
anniversary of such termination or, if any shares of Class A Preference Stock
are outstanding, the Fundamental Rights will terminate on such third
anniversary. If the Joint Venture is terminated for reasons other than those
described in the preceding paragraph or the preceding sentence, (i) on the date
of such termination the Minority Rights of the Class A Holders, other than
rights to representation on the Board and with respect to certain matters
relating to the governing documents and related matters of the Issuer, will
immediately terminate and (ii) on the third anniversary of such termination of
the Joint Venture, each share of Class A Common Stock outstanding will
automatically convert into one share of Common Stock or, if any shares of Class
A Preference Stock are outstanding, all of the remaining Fundamental Rights will
terminate.
Conversion Following Change of Control. Upon the occurrence of a Change of
Control (other than a Change of Control arising from a change in the identity of
a majority of the Board due to (i) a proxy contest, (ii) the election of
Page 19 of 27 Pages
<PAGE>
directors by the holders of the Preferred Stock, or (iii) an unauthorized tender
offer not approved by a majority of the Independent Directors), the Minority
Rights, except for rights as to Long Distance Assets and rights to participate
in a Change of Control, will terminate. The Issuer is obligated in such a
situation to negotiate in good faith with any potential acquiror of control to
provide the Class A Holders with rights equivalent to the rights of the Class A
Holders to representation on the Board. Upon such Change of Control, the Class
A Holders will have the right, but not the obligation, to cause the conversion
of their Class A Stock into Common Stock.
Conversion Following Failure to Maintain Ownership Ratios. If the ratio of the
number of shares of Class A Stock held either of FT or DT and its Qualified
Subsidiaries to the number held by the other of FT or DT and its Qualified
Subsidiaries exceeds 50/50 prior to the Investment Completion Date for more than
60 days after notice from the Issuer to FT and DT, each share of Class A Common
Stock outstanding will automatically convert into one share of Common Stock or,
if any shares of Class A Preference Stock are outstanding, the Fundamental
Rights will terminate. Following the Investment Completion Date, such ratio may
not exceed 60/40.
Conversion Following Transfers to Persons Other Than FT, DT, a Qualified
Subsidiary or a Qualified Stock Purchaser. If any shares of Class A Stock are
transferred (other than pursuant to a transfer to FT, DT, a Qualified Subsidiary
or a Qualified Stock Purchaser in accordance with the Stockholder's Agreement)
without the approval of the Issuer, the shares of Class A Stock so transferred
will automatically convert into shares of Common Stock.
Conversion Following Actions by Qualified Stock Purchasers. If a Qualified
Stock Purchaser becomes a Major Competitor of the Issuer, the shares of Class A
Common Stock owned by such Qualified Stock Purchaser will immediately convert
into Common Stock or, if any shares of Class A Preference Stock are owned by
such Qualified Stock Purchaser, the Fundamental Rights associated with such
Class A Preference Stock will terminate. In addition, if such Qualified Stock
Purchaser (i) breaches in any material respect its obligations with respect to
transfers of Class A Stock to large stockholders, (ii) breaches in any material
respect any other restrictions on the transfer of Class A Stock or (iii)
breaches its obligations under certain specified provisions of a standstill
agreement into which such Qualified Stock Purchaser has entered in accordance
with the Standstill Agreement (a "Qualified Stock Purchaser Standstill
Agreement"), the shares of Class A Common Stock owned by such Qualified Stock
Purchaser will, following certain procedural steps, immediately convert into
Common Stock or, if any shares of Class A Preference Stock are owned by such
Qualified Stock Purchaser, the Fundamental Rights associated with such Class A
Preference Stock will terminate.
Effect of Conversion of Class A Common Stock or Termination of Fundamental
Rights. A conversion of Class A Common Stock into Common Stock or termination of
Fundamental Rights will in most circumstances cause the termination of the
disapproval rights of the Class A Holders under the Articles and the termination
of the rights of the Class A Holders under the Stockholders' Agreement with
respect to (a) dispositions of Long Distance Assets, (b) Changes of Control, (c)
equity purchase rights, (d) Major Competitors of FT/DT, (e) Major Issuances, and
(f) certain other matters. In addition, certain of the foregoing rights will be
suspended if there is a suspension of the Fundamental Rights. Upon such
conversion of the Class A Common Stock or the termination of the Fundamental
Rights, the term of office of all Class A Directors will terminate. The
vacancies resulting from such termination will be filled by the remaining
Directors then in office, acting by majority vote.
The shares of Class A Stock issued by the Issuer pursuant to the Investment
Agreement, the Stockholders' Agreement or the Articles subsequent to a
conversion of all of the shares of Class A Common Stock into Common Stock or a
termination of the Fundamental Rights will automatically convert into shares of
Common Stock.
Conversion in Connection With An Exclusionary Tender Offer. If the Board
determines not to oppose an Exclusionary Tender Offer by a person other than FT,
DT or their respective affiliates, and the terms of such tender offer do not
permit the Class A Holders to sell an equal or greater percentage of their
shares in Class A Stock as the other stockholders of the Issuer are permitted to
sell in such tender offer, the Class A Holders may require the Issuer to convert
certain of their shares of Class A Stock into Common Stock.
Conversion of Common Stock into Class A Stock. Unless the Fundamental Rights
have been terminated with respect to all outstanding shares of Class A
Preference Stock, (i) following the Class A Common Issuance Date and until
Page 20 of 27 Pages
<PAGE>
the conversion of all of the shares of Class A Common Stock into shares of
Common Stock, each share of Common Stock acquired by a Class A Holder will
automatically convert into one share of Class A Common Stock on the date of
such acquisition, and (ii) following the occurrence of the Supplemental
Preference Stock Closing and prior to the Class A Common Issuance Date (the date
on which Class A Common Stock was first issued being referred to as the "Class A
Common Issuance Date"), each share of Common Stock acquired by a Class A Holder
will automatically convert into that number of shares of Class A Preference
Stock equal to the quotient of (x) the number of shares of Class A Preference
Stock outstanding immediately prior to such acquisition divided by (y) the
number of shares of Class A Common Stock or Common Stock into which such
previously outstanding shares of Class A Preference Stock would at such time be
convertible at the then applicable Conversion Price. The ability of FT and DT to
acquire shares of Common Stock is limited by the Standstill Agreement.
CERTAIN ADDITIONAL RELEVANT DOCUMENTS
Coordination Agreement
The Coordination Agreement, dated as of July 31, 1995, between FT and DT (the
"Coordination Agreement") sets forth the terms on which FT and DT agree to
coordinate their joint investment in the Issuer. In addition to their general
undertaking to use reasonable efforts to reach consensus on coordinated action
within the necessary time frames, FT and DT have agreed, among other things, as
follows:
(a) In the event that FT and DT are permitted to acquire additional shares
of Class A Stock (other than pursuant to Sections 2.1 through 2.5 of the
Investment Agreement) and Common Stock, each of FT and DT will be entitled to
acquire one half of the aggregate amount thereof which they are both entitled to
acquire, provided that if either of them owns less than half of such shares at
such time, the party owning less shall be entitled to acquire up to all of such
additional shares until both FT and DT own an equal number of voting securities
of the Issuer, and provided, further, that if either FT or DT does not want to
acquire any or all of such additional shares, the other of them may acquire such
unwanted shares;
(b) In the event that FT and DT cannot decide how to vote their Class A
Stock (including how to exercise their disapproval rights) with respect to any
matter despite their undertakings to do so, they generally agree to abstain from
voting their Class A Stock with respect to such matter;
(c) FT and DT will alternate between themselves from year to year (with the
first year being determined by lot) the right to appoint an extra director to
the Board at such times as they are entitled to appoint an odd number of
directors to the Board, and will alternate in a manner to be determined their
right to appoint one or an odd number of directors to committees of the Board;
(d) In the event that FT and DT are entitled to acquire all or part of the
Long Distance Assets, each of FT and DT will be entitled to acquire an equal
undivided interest in such assets, provided that if either FT or DT does not
want to acquire any or all of its share of such Long Distance Assets the other
of them may acquire such unwanted share;
(e) In the event that FT and DT are entitled to propose a transaction
resulting in a Change of Control of the Issuer, both parties agree to make such
proposal jointly or not at all. If one party desires to make a proposal alone,
it will not be entitled to proceed without the other's consent. Subject to
applicable fiduciary and other duties, if one of them has made a permitted
Change of Control proposal the other of them will not transfer its Class A Stock
into such a proposal made by a third party;
(f) In the event that FT or DT propose to sell any of their shares of
Class A Stock, the other of them shall generally have a right of first refusal
to acquire such shares; and
(g) Each of FT and DT have agreed to indemnify the other for Indemnifiable
Losses (as defined in the Coordination Agreement) caused by it as the result of
breaches by it of the Coordination Agreement, the Investment Agreement, and the
related documentation, among other matters.
Page 21 of 27 Pages
<PAGE>
See, generally, the Coordination Agreement attached hereto as Exhibit 5 and
incorporated herein by reference. The description of the Coordination Agreement
contained herein is qualified in its entirety by reference to such exhibit.
Joint Venture Agreement
- -----------------------
Concurrently with the First Closing under the Investment Agreement, the
Issuer, FT and DT also consummated a closing under the Joint Venture Agreement,
dated June 22, 1995, as amended (the "Joint Venture Agreement"), among the
Issuer, Sprint Global Venture, Inc. ("Sprint Sub"), FT, DT and Atlas. The
Issuer, Sprint Sub, FT, DT and Atlas are collectively referred to as the "Joint
Venture Parties." The Joint Venture Parties entered into the joint venture (the
"Joint Venture") for the purpose of providing certain global telecommunications
services (the "Joint Venture Services") from time to time, which at the outset
of the Joint Venture will include (i) global international data, voice and video
business services for multinational companies and business customers, (ii)
international services for consumers, initially based on card services for
travelers, and (iii) a "carrier's carrier" business which will provide certain
transport services for the Issuer, FT, DT and other carriers.
The Joint Venture Services will be distributed in the rest of Europe (other
than France and Germany) by a group of JV Entities referred to as the "ROE
Group" and in the rest of the world (other than Europe and the United States) by
a separate group of JV Entities referred to as the "ROW Group." The Joint
Venture Parties also formed an additional group of JV Entities referred to as
the "GBN Group" to own and operate a global transmission network over which the
Joint Venture Services and other traffic will be routed as agreed by the Joint
Venture Parties, subject to applicable law and to existing arrangements of the
Joint Venture Parties. With respect to the ROW Group and the GBN Group, each of
Sprint Sub and Atlas initially will own, directly or indirectly, 50% of the
outstanding voting equity of the parent entity of each such group. With respect
to the ROE Group, Sprint Sub and Atlas initially will own, directly or
indirectly, 33-1/3% and 66-2/3%, respectively, of the voting equity of the
parent entity of such group.
See, generally, the Joint Venture Agreement attached hereto as Exhibit 6
and incorporated herein by reference. The description of the Joint Venture
Agreement contained herein is qualified in its entirety by reference to such
exhibit.
Bylaws Amendments
- -----------------
The amendments to the Bylaws of the Issuer (the "Bylaws Amendments")
approved and adopted at a special meeting of stockholders of the Issuer held on
January 29, 1996, and effective upon the Initial Issuance Date, reflected the
establishment of the Class A Stock and the directors to be elected by the Class
A Holders. The Bylaws Amendments also add a provision requiring a majority of
the Board to be Independent Directors. See, generally, the Bylaws Amendments
attached hereto as Exhibit 9 and incorporated herein by reference. The
description of the Bylaws Amendments contained herein is qualified in its
entirety by reference to such exhibit.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
- ------- --------------------------------
Exhibit 1 Joint Filing Agreement, dated February 9, 1996, between France
Telecom and Deutsche Telecom AG relating to the filing of this
joint Schedule 13D statement.
Exhibit 2 Investment Agreement, dated as of July 31, 1995, as amended
November 21, 1995, among Sprint Corporation, France Telecom and
Deutsche Telekom AG.
Exhibit 3 Registration Rights Agreement, dated January 31, 1996, among
Sprint Corporation, France Telecom and Deutsche Telekom AG.
Exhibit 4 Standstill Agreement, dated as of July 31, 1995, among Sprint
Corporation, France Telecom and Deutsche Telekom AG.
Page 22 of 27 Pages
<PAGE>
Exhibit 5 Coordination Agreement, dated as of July 31, 1995, between
France Telecom and Deutsche Telekom AG.
Exhibit 6 Joint Venture Agreement, dated June 22, 1995, as amended
January 31, 1996, among Sprint Corporation, Sprint Global
Venture, Inc., France Telecom, Deutsche Telekom AG and Atlas
Telecommunications SA.
Exhibit 7 Stockholders' Agreement, dated January 31, 1996, among Sprint
Corporation, France Telecom and Deutsche Telekom AG.
Exhibit 8 Charter Amendments
Exhibit 9 Bylaws Amendments
All material to be filed as exhibits to this Schedule 13D are enclosed herein.
Page 23 of 27 Pages
<PAGE>
After reasonable inquiry and to my best knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
DATED: February 12, 1996 DEUTSCHE TELEKOM AG
By: /s/ Joachim Kroeske
-----------------------------
Title: Chief Financial Officer
Page 24 of 27 Pages
<PAGE>
After reasonable inquiry and to my best knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
DATED: February 12, 1996 FRANCE TELECOM
By: /s/ H. Chaintreuil
-----------------------------
Page 25 of 27 Pages
<PAGE>
Schedule I
Directors and Executive Officers of Deutsche Telekom AG
I. Vorstand
- -----------
Dr. Ron Sommer Lothar Holzwarth
Vorstandsvorsitzender Mitglied im Betriebsrat bei der
Deutsche Telekom AG Telekom Niederlassung 2 Stuttgart
Postfach 20 00 Postfach 50 20 20
53105 Bonn 70369 Stuttgart
Detlef Buchal Dr. sc. techn. Dieter Hundt
Deutsche Telekom AG Geschaftsfuhrender Gesellschafter
Postfach 20 00 Allgaier-Werker GmbH & Co. KG
Postfach 40
53105 Bonn
73062 Uhingen
Frerich Gorts
Vorstandsmitglied Dipl. Ing. Franz-Josef Klare
Deutsche Telekom AG Deutsche Postgewerkschaft
Postfach 20 00 Lortzingstr. 13
53105 Bonn 48145 Munster
Dr. Hagen Hultzsch Bundesminster a.D.
Vorstandsmitglied Dr. Ing. Paul Kruger, MdB
Deutsche Telekom AG Bundeshaus
Postfach 20 00
53113 Bonn
53105 Bonn
Rolf-Dieter Leister
Dr. Joachim Kroske Vorsitzender des Aufsichtsrates
Vorstandsmitglied der Deutschen Telekom AG
Deutsche Telekom AG Postfach 20 00
Postfach 20 00
53105 Bonn
53105 Bonn
Dr. h.c. Andre Leysen
Dr. Herbert May Vorsitzender des Aufsichtsrats
Vorstandsmitglied der AGFA-GEVAERT
Deutsche Telekom AG Septe Straat 27
Postfach 20 00
B-2640 Mortsel
53105 Bonn
Michael Loffler
Dipl. Ing. Gerd Tenzer Stellvertr. Vorsitzender
Vorstandsmitglied des Betriebsrats
Deutsche Telekom AG Telekom Niederlassung Leipzig
Postfach 20 00 Grimmaische Steinweg 9
53105 Bonn 04103 Leipzig
II. Aufsichtsrat Maud Pagel
- ---------------- Stellvertr. Vorsitzende
des Gesamtbetriebsrats
Veronika Altmeyer der Deutschen Telekom AG
stellvertr. Vorsitzende des Auf- Friedrich-Ebert-Allee 140
sichtsrats der Deutschen Telekom AG
Deutsche Postgewerkschaft 53113 Bonn
Postfach 71 02 38
60525 Frankfurt/M. Dr. Klaus Gotte
Vorsitzender des Vorstands
der MAN AG
Dipl. Ing. Ungerer Str. 69
Paul Burkhart
Prasident der 80805 Munchen
Direktion Telekom Stuttgart
Postfach 10 10 40
Klaus Pleines
70009 Stuttgart Bezirksleiter der
Deutschen Postgewerkschaft
Bezirk Koblenz/Trier
Gert Becker Postfach 405
Vorsitzender des Vorstands
der Degussa AG 56004 Koblenz
60287 Frankfurt/M.
Will Russ
Bundesvorsitzender des Deutschen
Parlamentarischer Staatssekretar Postverbandes
Rainer Funke. MdB Schaumburg-Lippe-Str. 5
Bundesministerium fur Justiz
Heinemannstr. 6 53113 Bonn
53175 Bonn
Ursula Steinke
Mitglied im Betriebsrat
Hans Gimstein (SCZ)
Vorsitzender des Gesamtbetriebstrats Bunsenstr. 29
der Deutschen Telekom AG
Friedrich-Ebert-Allee 140 24145 Kiel
53113 Bonn
Prof. Dr. h.c. Dieter Stolte
Indendant des ZDF
Prof. Dr. Peter Glotz Postfach 40 40
Bundeshaus
55100 Mainz
53113 Bonn
Dr. Gert Haller
Sprecher der Geschaftsfuhrung
der Wustenrot Holding GmbH
71630 Ludwigsburg
Page 26 of 27 Pages
<PAGE>
Schedule II
Directors and Executive Officers of France Telekom
1. Highest ranking executives of France Telecom
Michel Bon Mr. Francois GRAPPOTTE
President President Directeur General de
Chairman LEGRAND
Societe LEGRAND
Charles Rozmaryn 128, av. due Marcchal
Directeur General de Lattre -de- Tassigny
Chief Executive Officer 87045 Limoges Cedex
Jean-Jacques Damlamian Mr. Yannick d'ESCATHA
Directeur Executif de la Branche Administrateur General
Developpement du CEA
Group Executive CEA
31-33, rue de la Federation
Jean-Yves Gouiffes 75752 Paris Cedex 15
Directeur Executif de la Branche
Rescau Mr. Marc LADREIT de LACHARRIERE
Group Executive President de FIMALAC
FIMALAC
Jacques Champeaux 97, rue de Lille
Directeur Executif de la Branche 75007 Paris
Enterprises
Group Executive Mr. Michel BON
President de France Telecom
Jean-Francois Pontal
Directeur Executif da la Branche Mr. Francis BRUN-BUISSON
Grand Public Chef du Service Juridique et
Group Executive Technique de l'Information
Service Juridique et
2. Members of the Board of France Telecom Technique de l'Information
69, rue de Varenne
Mr. Pierre PEUCH 75007 Paris
Employee of France Telecom
Mr. Christophe BLANCHARD-DIGNAC
Mr. Jean-Francois DAVOUST Directeur du Budget
Employee of France Telecom Ministere des Finances
Direction du Budget
Mrs. Monique MARTIN 139 rue de Bercy
Employee of France Telecom 75572 Paris Cedex 12
Mrs. Francine BAVAY Mr. Michel BLANGY
Employee of France Telecom Directeur General
de l'Administration
Mr. Christophe AGUITON Ministere de l'Interieur
Employee of France Telecom 1 Bis, place des Saussaics
75800 Paris
Mr. Raymond DURAND
Employee of France Telecom Mr. Pierre LESTRADE
Inspecteur General
Mr. Roland SAINT-CRIQ Ministere des Postes et
Employee of France Telecom Telecommunications
et de l'Espacc
Mr. Gilles MORTIER Inspection Generale
Directeur de la Federation 20, avenue de Segur
des Familles Rurales 75700 Paris
Federation des Familles Rurales
7. Cite d'Antin Mr. Didier LOMBARD
75009 Paris Directeur General
Direction des Strategies
Mr. Eric HAYAT Industrielles
Directeur General Adjoint de Ministere de l'Industrie
STERIA ct President de et du Commerce Exterieur
Syntec-Informatique
STERIA Mr. Thierry AULAGNON
12, rue Paul Dautier Chef du Service des
78140 Velizy Financements et des
Syntec-Informatique participations
Ministere des Finances
Mr. Simon NORA Direction du Tresor
Conseiller Banque Lehman
Brothers Mr. Pierre POTIER
56, rue du Fg Saint Honore Directeur General
75008 Paris de la recherche et de la
Technologic
Direction Generale
de la Recherche et de la
Technologic
1, rue Descartes
75231 Paris Cedex 05
Page 27 of 27 Pages
<PAGE>
EXHIBIT 1
---------
AGREEMENT OF JOINT FILING
-------------------------
Deutsche Telekom AG and France Telecom hereby agree that the Statement on
Schedule 13D to which this agreement is attached as an exhibit, as well as all
future amendments to such Statement, shall be filed jointly on behalf of each of
them. This agreement is intended to satisfy the requirements of Rule 13d-
1(f)(1)(iii) under the Securities Exchange Act of 1934, as amended.
Dated: February 12, 1996. DEUTSCHE TELEKOM AG
By: /s/ Joachim Kroeske
-------------------------------
Title: Chief Financial Officer
By: /s/ Juergen Bohm
-------------------------------
Title: Executive Vice President
FRANCE TELECOM
By: /s/ H. Chaintreuil
-------------------------------
<PAGE>
EXHIBIT 2
---------
INVESTMENT AGREEMENT
AMONG
SPRINT CORPORATION,
FRANCE TELECOM
AND
DEUTSCHE TELEKOM AG
DATED AS OF JULY 31, 1995
1
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
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<C> <S> <C>
ARTICLE I DEFINITIONS..................................................... 5
ARTICLE II PURCHASE AND SALE OF SHARES.................................... 23
Section 2.1. First Closing............................................ 23
Section 2.2. Additional Preference Stock Closing...................... 26
Section 2.3. Supplemental Preference Stock Closing.................... 28
Section 2.4. Deferred Common Stock Closing............................ 28
Section 2.5. Purchases of Optional Shares............................. 29
Section 2.6. Antidilution............................................. 31
Section 2.7. Reduction of Purchased Shares............................ 31
Section 2.8. Effect of Conversion..................................... 31
ARTICLE III CONDITIONS TO THE FIRST CLOSING............................... 32
Section 3.1. Conditions to Each Party's Obligations................... 32
Section 3.2. Conditions to the Buyers' Obligations.................... 33
Section 3.3. Conditions to the Company's Obligations.................. 35
ARTICLE IV CONDITIONS TO AN ADDITIONAL PREFERENCE STOCK CLOSING,
SUPPLEMENTAL PREFERENCE STOCK CLOSING AND
DEFERRED COMMON STOCK CLOSING................................. 35
Section 4.1. Condition to Each Party's Obligations.................... 35
Section 4.2. Conditions to the Buyers' Obligations.................... 36
Section 4.3. Conditions to the Company's Obligations.................. 37
Section 4.4. Effect of Certain Breaches............................... 38
ARTICLE V CONDITIONS TO THE OPTIONAL SHARES CLOSING....................... 38
Section 5.1. Condition to Each Party's Obligations.................... 38
Section 5.2. Conditions to the Buyers' Obligations.................... 38
Section 5.3. Conditions to the Company's Obligations.................. 40
Section 5.4. Effect of Certain Breaches............................... 41
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF THE COMPANY.................. 41
Section 6.1. Organization, Qualification, Etc......................... 41
Section 6.2. Capital Stock and Other Matters.......................... 41
Section 6.3. Validity of Shares....................................... 42
Section 6.4. Corporate Authority; No Violation........................ 42
Section 6.5. Company Reports and Financial Statements................. 43
Section 6.6. Absence of Certain Changes or Events..................... 43
Section 6.7. Investigations; Litigation............................... 43
Section 6.8. Proxy Statement; Other Information....................... 44
Section 6.9. Certain Tax Matters...................................... 44
Section 6.10. Amendments of the Rights Agreement....................... 44
Section 6.11. Other Registration Rights................................ 44
Section 6.12. Takeover Statutes........................................ 44
Section 6.13. Vote Required; Board Recommendation...................... 45
Section 6.14. Long Distance Business................................... 45
ARTICLE VII REPRESENTATIONS AND WARRANTIES OF THE BUYERS.................. 45
Section 7.1. Representations and Warranties of FT..................... 45
Section 7.2. Representations and Warranties of DT..................... 47
</TABLE>
2
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<TABLE>
<CAPTION>
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<C> <S> <C>
ARTICLE VIII COVENANTS OF THE COMPANY.................................... 48
Section 8.1. Conduct of Business by the Company...................... 48
Section 8.2. Access and Information.................................. 49
Section 8.3. No Solicitation, Etc.................................... 49
Section 8.4. Stockholders Approval................................... 50
Section 8.5. Proxy Statement Filings................................. 50
Section 8.6. Use of Proceeds......................................... 50
Section 8.7. Advice of Changes....................................... 50
Section 8.8. No Action Relating to Takeover Statutes; Applicability
of Future Statutes and Regulations..................... 51
Section 8.9. Spin-offs............................................... 51
Section 8.10. Conduct of Business of Cellular......................... 51
ARTICLE IX OTHER AGREEMENTS.............................................. 52
Section 9.1. Information for Inclusion in the Proxy Statement........ 52
Section 9.2. Further Assurances...................................... 53
Section 9.3. Public Announcements.................................... 53
Section 9.4. Notification............................................ 54
Section 9.5. Brokers or Finders...................................... 54
Section 9.6. Notice of Proposals Regarding Acquisition Transactions.. 54
Section 9.7. Execution of Standstill Agreement....................... 55
Section 9.8. Confidentiality Agreements.............................. 55
Section 9.9. Actions by FT and DT in Connection with the Cellular
Spin-off............................................... 55
Section 9.10. Adjustment Certificates................................. 55
ARTICLE X TERM AND TERMINATION........................................... 55
Section 10.1. Termination............................................. 55
Section 10.2. Reimbursement of Expenses............................... 57
ARTICLE XI MISCELLANEOUS................................................. 57
Section 11.1. Survival of Representations and Warranties.............. 57
Section 11.2. Assignment.............................................. 58
Section 11.3. Entire Agreement........................................ 58
Section 11.4. Expenses................................................ 59
Section 11.5. Waiver, Amendment, Etc.................................. 59
Section 11.6. Binding Agreement; No Third Party Beneficiaries......... 59
Section 11.7. Notices................................................. 59
Section 11.8. GOVERNING LAW; DISPUTE RESOLUTION;
EQUITABLE RELIEF....................................... 60
Section 11.9. Severability............................................ 61
Section 11.10. Translation............................................. 61
Section 11.11. Table of Contents; Headings; Counterparts............... 62
Section 11.12. Waiver of Immunity...................................... 62
Section 11.13. Continuing Director Approval............................ 62
Section 11.14. Currency................................................ 62
</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
3
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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
4
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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 opportunities around the world as further provided therein;
and
Whereas, FT and DT (each a "Buyer") desire to purchase 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.
5
<PAGE>
"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 correlative meanings, "Beneficially
Own" and "Beneficial Ownership"), 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, pursuant to this 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
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
6
<PAGE>
(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 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 contemplated by this Agreement,
the Transactions or the Atlas Transactions (each as defined in the Joint
Venture Agreement)) which such Party or any of their respective Subsidiaries
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
respective 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)
materially 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 Burdensome 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 Agreement. For purposes of this definition, no Qualified
Subsidiary 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.
7
<PAGE>
"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.
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"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 transaction 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 Paragraph 7 of the Amendment
entitled "GENERAL PROVISIONS RELATING 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 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 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 particular section of the Communications Act shall refer to such
section as the same may be hereafter renumbered or otherwise amended.
9
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"Company" has the meaning set forth in the preamble.
"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, franchise, 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 otherwise.
"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 television (but not
including any programming or content-related activities with respect thereto).
"Damages" has the meaning specified in Section 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 Directors.
"Disclosure Schedules" means the Company Disclosure Schedule, the FT
Disclosure Schedule and the DT Disclosure Schedule.
10
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"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 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.
"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 interests 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
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"),
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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 favorable 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 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 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 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
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 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 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 Qualified 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 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 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;
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(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 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 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 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
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 materially and adversely affect the operation of the Long Distance
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 the
Company 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 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 Distance Assets, including any renewal or extension
thereof, 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 promulgated 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-
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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.
"First Closing" has the meaning specified in Section 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 n(degrees) 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 n(degrees) 90-568 du 2 juillet 1990
relative a l'organisation du service public de la poste et des
telecommunications (as amended by Loi n(degrees) 91-1406 du 31 decembre 1991
portant diverses dispositions d'ordre social), (b) Decret n(degrees) 90-1112 du
12 decembre 1990 portant statut de France Telecom (as amended by Decret
n(degrees) 95-460 du 25 avril 1995 modifiant le decret n(degrees) 90-1112 du 12
decembre 1990 portant statut de France Telecom), (c) Decret n(degrees) 90-1213
du 29 decembre 1990 relatif au cahier des charges de France Telecom et au code
des postes et telecommunications, and (d) Decret n(degrees) 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, supranational, regional, state or local political
subdivision, any governmental or administrative body,
14
<PAGE>
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 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.
"Group" means any group within the meaning of Section 13(d)(3) of the
Exchange Act.
"HSR Act" has the meaning specified in Section 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 respective Subsidiaries, (b) is not a former officer of the Company, 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 the Company, or any Class
A Holder, or their respective 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 Nominating Committee 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 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
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 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
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 hereof who is not an executive officer
of the Company shall be deemed to be an Independent Director hereunder.
"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 specified 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, authorization, permit, certificate,
variance, exemption, order, franchise or approval, domestic or foreign.
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<PAGE>
"Lien" means 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.
"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 relating 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 Communications 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 Subsidiaries that are not
reflected in the Company'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 the Company or any of its Subsidiaries to, or
reclassified by the Company or any of its Subsidiaries as part of, the Long
Distance Division;
(d) any assets acquired by the Company after December 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 primarily 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 services primarily related to any Non-Long Distance Business.
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"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 concluded, in its good faith judgment, will be
such a competitor 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 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 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, condition 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.
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"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 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 the Company or any
Subsidiary of the Company pursuant to the Joint Venture Agreement; 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 distance telecommunications services of the Company
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 wireless services, whether
fixed or mobile, or related to telecommunications services provided through
communications 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 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.
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"Optional Shares" has the meaning specified in Section 2.5(a) hereof.
"Optional Shares Closing" has the meaning specified 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 definition 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, pension 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 respect 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 Governmental Authority.
"Proposals" mean (a) the proposal for the stockholders 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 connection with the Proposals or any schedules or exhibits required
to be filed with the SEC in connection therewith.
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"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 aggregate, 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
Financial Institutions, 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
directly 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 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 interests
(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 Registration 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 supplemented
from time to time.
"Rights" has the meaning set forth in Section 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.
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"SEC Documents" has the meaning specified in Section 6.5(a) hereof.
"Securities Act" means the Securities Act of 1933, as amended, and the rules
and regulations of the SEC promulgated 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 Securities 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 Agreement, 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 Exhibit 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 business 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 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 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)
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" 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
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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.
"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 Governmental 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, 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 the Company
pursuant to a merger or other business combination 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 foreclosure 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 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 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 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 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.
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"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 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 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
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 average 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 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 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.
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
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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 Section 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 Average 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
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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
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 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
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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
purchased 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 immediately
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
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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
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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 purchased 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
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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 Closing") 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 conditions 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 outstanding shares of Class A
Preference Stock for conversion 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
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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
conversion 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 conversion 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 aggregated 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.
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(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 purchased 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
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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 Obligations. 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 conditions 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 contemplated 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 Communities, 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 transactions 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 (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.
(g) 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 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.
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(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 Article 13 of the Joint
Venture Agreement shall have been fulfilled 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 percent 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 authority (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 percent 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 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 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 Section 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 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
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 (i) above.
Section 3.2. Conditions to the Buyers' Obligations. 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 conditions on or prior
to the Initial Issuance Date:
(a) The representations and warranties of the Company made pursuant to
this Agreement and the Other Agreements shall be true and correct in all
material respects at and as of the date hereof and at
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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 changes, 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. (S) 17-12,101 (1994) (the "Business
Combination Statute") restricting "business combinations" with "interested
stockholders" (each as defined in Kan. Stat. Ann. (S) 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 opinions, 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 Corporation Code of the State of Kansas and filed
with the appropriate 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 purpose 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 limitation, by
any waiver, amendment or termination of the Rights Agreement). No Change of
Control shall have occurred.
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Section 3.3. Conditions to the Company's Obligations. 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 conditions 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 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) FT and DT and each of their respective Affiliates 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 changes, 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 Subsidiaries, or imposing a
Burdensome Condition as to the Company or Sprint Sub, in each case arising
from such transactions. 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 pursuant to this Agreement.
(d) Each Buyer shall have delivered to the Company 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 Obligations. 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
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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' Obligations. 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 conditions 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 Issuance Date) and Section 6.6 (but in the
case of Section 6.6 only as to changes prior to the Initial Issuance
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 correct does not relate to, and is not reasonably likely to relate
to, a material adverse change in the business, operations, results of
operations, financial condition, assets or liabilities of the Company
compared 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 Section 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,
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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 Buyers 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 Obligations. 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 conditions 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
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 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).
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(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 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 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 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(b).
(c) Each Buyer shall have delivered to the Company 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 Obligations. 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
entered, 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' Obligations. 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 following 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 Optional Shares Closing as if such representations
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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 Issuance Date) and Section 6.6 (but in the
case of Section 6.6 only as to changes prior to the Initial Issuance
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 correct does not relate to, and is not reasonably likely to relate
to, a material adverse change in the business, operations, results of
operations, financial condition, assets or liabilities of the Company
compared 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 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 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 Section 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 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
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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 Closing, 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 Obligations. 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 following
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 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 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 satisfied, 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 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
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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 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 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 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 Company 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 existing 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
number of each class of shares issued and outstanding, the number of each class
of shares reserved for issuance pursuant to convertible securities, options and
other agreements, 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, debentures, 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.
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(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 Agreement 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 performance by the Company of this
Agreement and each Other Agreement, 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, violate or
conflict with any provision of the Articles or Bylaws, 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; (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 Agreements; (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 result in the creation of any Lien on any of the assets or properties of the
Company or any of its Subsidiaries pursuant 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 properties 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 obligations 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
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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 Agreements.
Section 6.5. Company Reports and Financial Statements. (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 Documents (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, financial 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
regulatory 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 Schedule, or as the Company has previously advised
the Buyers in writing on or prior to the date hereof, there is no Proceeding
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 Company'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 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 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 Agreements.
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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 supplement thereto, will at the time of the mailing of the definitive Proxy
Statement, and at the time of the Stockholders' Meeting, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in 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
agreement 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,
Distribution 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 provisions 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 affiliates 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
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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,"
"moratorium," "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 respective 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
securities shall not, in and of itself, be deemed to have a material adverse
effect on the intrinsic value of an investment in the Company's equity
securities).
Section 6.13. Vote Required; Board Recommendation. 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 Preferred 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 requisite 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.
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(b) (i) The execution, delivery and performance of this Agreement and
each Other Agreement, and the consummation 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 agreement will constitute a legal, valid
and binding agreement of FT, enforceable against FT in accordance with its
terms.
(ii) Neither the execution, delivery and performance 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 respect 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 adversely 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 Agreement 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 Agreement 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.
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(f) Except for such rights as may be conferred on FT as contemplated by
this Agreement and the Other Agreements, as of the date hereof, neither FT
nor any of its Affiliates 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 (including, without limitation, pursuant to the
Foreign Sovereign Immunities Act, 28 U.S.C. Paragraph 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 judgment 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 requisite corporate power and authority
to: (i) enter into this Agreement and each of the Other Agreements, (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 consummation of the transactions contemplated
hereby and thereby, 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 agreement of DT, enforceable against DT in
accordance with its terms.
(ii) Neither the execution, delivery and performance 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 documents 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 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
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 material 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 Subsidiaries, 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 obligations hereunder or under the Other
Agreements.
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(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 Agreement 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 Agreements, as of the date hereof neither DT
nor any of its Affiliates 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 consents in writing, or as otherwise contemplated
by this Agreement, the Other Agreements or the Joint Venture Documents, 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, repurchase or otherwise acquire, Voting
Securities of the Company (including any securities convertible or
exchangeable into such Voting Securities) in excess of Voting Securities
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.
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(c) The Company shall not amend or propose to amend the Articles or
Bylaws 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, 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 attorney/client privilege.
Section 8.3. No Solicitation, Etc. (a) Until the First Closing, neither the
Company nor any of its Subsidiaries or Affiliates 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 a transaction of the kind
described in Section 8 of the Class A Provisions (an "Acquisition Proposal") 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 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 in nature and scope similar to the
arrangements and relationships contemplated by this Agreement or the Joint
Venture Agreement if
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inconsistent with the purposes and scope of this Agreement and the Joint
Venture (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.
(c) Until the approval by the stockholders of the Company of the
Proposals 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 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 Alternative 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 recommendation, the Board of Directors shall (a) as soon as practicable
after the date hereof, in accordance with Applicable 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 determined 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.
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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
contemplated 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
combination," "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 interests 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.
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(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 distribution
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
distribution 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
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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 contained 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 misleading. 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 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, 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 filings 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 possible.
(c) Each of the Parties shall use its reasonable efforts to resolve such
objections, if any, as any Governmental Authority may assert with respect to
this Agreement and the Other Agreements and the transactions contemplated
hereby and thereby 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 Agreements or the transactions
contemplated 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
jurisdiction as provided in Section 11.8 hereof or in any corresponding 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
jurisdiction as provided in Section 11.8 hereof or in any corresponding 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.
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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 fulfilled, 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 material 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 contemplated 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 transactions
contemplated by this Agreement and the Other Agreements. 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 transactions
contemplated by this Agreement and the Other Agreements. 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 Acquisition 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).
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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 Confidentiality 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 Maximum 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 February 15, 1996/1/ other than as a result of the
failure of the Party seeking to terminate this Agreement to perform its
obligations under this Agreement or the Other Agreements;
(ii) by FT or DT:
(1) upon the occurrence of a Change of Control,
(2) if the Company or any of its Subsidiaries or Affiliates, or any
of their respective officers, directors, employees, agents or
representatives (including, without limitation, investment bankers,
attorneys and accountants), undertakes any action prohibited by clause
(b) of Section 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 relates)
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,
- --------
/1/ Pursuant to a letter agreement dated as of November 21, 1995, Sprint, FT
and DT agreed to change this date from December 31,1995 to February 15, 1996.
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(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 Directors or any committee thereof of
substantive negotiations with respect to any transaction or action
whose consummation would be prohibited by Section 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 committee thereof is notified
during any meeting of the Board of Directors or such committee of
negotiations 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 negotiations 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 receipt 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 Agreements, 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 obligations under this Agreement or the Other Agreements,
(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 Proposals, 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 accordance with the terms thereof; or
56
<PAGE>
(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 Agreement 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 Confidentiality 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 receiving 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 foregoing, 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 provision is from time to time in
effect) (the "German Fee Regulations")) incurred by it relating to the
transactions contemplated 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 prepared 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 respect 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 pursuant hereto or thereto prior to or on the Initial
Issuance Date shall survive the First Closing. None of the representations and
warranties made by any Party in this Agreement or any Other Agreement or in any
certificate or document delivered pursuant hereto or thereto at the Optional
Shares Closing or Article IV Closing shall survive such Optional Shares Closing
or
57
<PAGE>
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 hereunder, 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 obligations 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 obligations 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' Agreement, 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.
58
<PAGE>
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 documents 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, accountants,
investment bankers, brokers, or other Persons engaged by it) incurred in
connection with the preparation, negotiation, 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
59
<PAGE>
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 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 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 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, WITHOUT LIMITATION, CLAIMS FOR INTERIM RELIEF, COUNTERCLAIMS,
ACTIONS WITH MULTIPLE DEFENDANTS AND ACTIONS IN WHICH SUCH PARTY IS IMPLIED).
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.
60
<PAGE>
(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 THE OTHER AGREEMENTS, 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 11.7. 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 OCCURRED, 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 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 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.
61
<PAGE>
(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; Counterparts. 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
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 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
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. (P)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 Provisions 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 payable in U.S. dollars.
62
<PAGE>
In Witness Whereof, the Parties have caused this Agreement to be duly
executed as of the date first above written.
Sprint Corporation
/s/ W. T. Esrey
By: _________________________________
Name: William T. Esrey
Title: Chairman and Chief
Executive Officer
France Telecom
/s/ Charles Rozmaryn
By: _________________________________
Name: Charles Rozmaryn
Title: Directeur General
Deutsche Telekom AG
/s/ Ron Sommer
By: _________________________________
Name: Dr. Ron Sommer
Title: Vorsitzender des Vorstandes
63
<PAGE>
CONFIDENTIAL
------------
SPRINT CORPORATION
2330 Shawnee Mission
Parkway, East Wing
Westwood, Kansas 66205
U.S.A.
As of November 21, 1995
FRANCE TELECOM
6 place d'Alleray
75505 Paris Cedex 15
France
DEUTSCHE TELEKOM AG
Godesberger Allee 107B
D-53175 Bonn
Germany
Re: Investment Agreement, dated as of July 31, 1995, among Sprint
Corporation, France Telecom and Deutsche Telekom AG
Gentlemen:
Reference is made to the Investment Agreement, dated as of July 31, 1995
(the "Investment Agreement"), among Sprint Corporation ("Sprint"), France
Telecom ("FT") and Deutsche Telekom AG ("DT"). Capitalized terms used without
definition herein shall have the meanings set forth in the Investment Agreement.
Each of Sprint, FT and DT hereby agrees as follows:
1. Paragraph (i) of Section 10.1(a) of the Investment Agreement is
hereby amended to delete therefrom the terms "December 31, 1995" and to
insert in lieu thereof the terms "February 15, 1996".
<PAGE>
2. This letter shall not constitute a waiver or amendment of any other
provision of the Investment Agreement not explicitly waived or amended
hereby. The provisions of the Investment Agreement are and shall remain
in full force and effect as amended hereby.
3. This letter 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).
4. The Parties have negotiated this letter in the English language,
and have prepared successive drafts and the definitive texts of this
letter in the English language. For purposes of complying with the
French Translation Law, the Parties have prepared a French version of
this letter, 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
letter to be equally authoritative.
Please acknowledge the foregoing agreement by signing this letter agreement
in the space provided below and returning one copy to each of the undersigned.
This letter agreement may be executed in counterparts, which together shall
constitute one and the same instrument.
Very truly yours,
SPRINT CORPORATION
By: /s/ W.T. Esrey
-------------------------------
Name: W.T. Esrey
Title: Chairman
Agreed as of the date
first above written.
FRANCE TELECOM
<PAGE>
By: /s/ Michel Bon
---------------------------
Name: Michel Bon
Title: Vice President
DEUTSCHE TELEKOM AG
By: /s/ Dr. Ron Sommer
---------------------------
Name: Dr. Ron Sommer
Title: Vorsitzender des Vorstandes
By: /s/ Dr. Gead Tenzer
---------------------------
Name: Gead Tenzer
Title: Mitglied des Vorstandes
<PAGE>
EXHIBIT 3
===============================================================================
REGISTRATION RIGHTS AGREEMENT
AMONG
FRANCE TELECOM,
DEUTSCHE TELEKOM AG
AND
SPRINT CORPORATION
Dated as of January 31, 1996
===============================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<C> <S> <C>
Section 1. Registration under the Securities Act. 1
1.1. Registration on Request 1
1.2. Incidental Registration 5
1.3. Registration Procedures 7
1.4. Delay of Filing or Sales 12
1.5. Underwritten Offerings 13
1.6. Preparation; Reasonable Investigation 14
1.7. Indemnification 15
1.8. Effect of Other Agreements Among the Parties
Hereto 18
Section 2. Definitions 19
Section 3. Miscellaneous. 21
3.1. Rule 144 21
3.2. Additional Parties 21
3.3. Notices 21
3.4. Waiver, Amendment, etc 23
3.5. Binding Agreement; No Third Party
Beneficiaries 23
3.6. Governing Law; Dispute Resolution; Equitable
Relief 23
3.7. Severability 25
3.8. Translation 25
3.9. Table of Contents; Headings; Counterparts 25
3.10. Entire Agreement 25
3.11. Waiver of Immunity 26
3.12. Currency 27
</TABLE>
<PAGE>
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of January 31, 1996 (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 Venture, Inc., a wholly-owned
subsidiary of the Company ("Sprint Sub"), FT and DT have formed a joint venture
to provide telecommunications services as provided in the Joint Venture
Agreement, dated as of June 22, 1995, as amended, among Sprint Sub, FT, DT and
the Company, and to pursue various telecommunications opportunities around the
world as further provided therein;
WHEREAS, pursuant to the Investment Agreement, dated as of July 31, 1995,
as amended, among FT, DT and the Company (the "Investment Agreement"), FT and DT
are purchasing from the Company shares of Class A Stock of the Company; 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
any Qualified Subsidiaries or Qualified Stock Purchasers and certain related
rights and obligations of the Company.
NOW, THEREFORE, in consideration of the mutual covenants and obligations
set forth herein, each of FT, DT and the Company agrees as follows:
Section 1. Registration under the Securities Act.
Section 1.1 Registration on Request. (a) Request. Subject to Article II
of the Stockholders' Agreement, at any time, upon the written request of the
holders of a majority of the Eligible Securities then outstanding requesting
that the Company effect the registration under
<PAGE>
the Securities Act of a specified number of Eligible Securities, the Company
shall promptly give written notice of such requested registration to all holders
of Eligible Securities and thereupon the Company shall use its reasonable
efforts to effect the registration under the Securities Act of the Eligible
Securities which the Company has been so requested to register by the Selling
Stockholders, for disposition for cash in accordance with the intended method or
methods of disposition specified by the Selling Stockholders (which method of
disposition shall be in accordance with the registration requirements of the
United States securities laws), provided that (i) the Company shall not be
required to effect any registration pursuant to this Section 1.1 if during the
twelve-month period immediately preceding such request for registration the
Company has previously effected a registration pursuant to this Section 1.1,
(ii) subject to Section 1.1(g), the Company shall not be required to effect any
registration pursuant to this Section 1.1 after five registrations requested by
holders of Eligible Securities pursuant to this Section 1.1 shall have been
effected unless, as to no more than two additional registrations, the holders of
a majority of the Eligible Securities then outstanding deliver at any time a
notice to the effect that such holders agree to pay all Registration Expenses in
connection with such additional two registrations; provided, however, that if
the Company proposes to redeem pursuant to Section 2 of that portion of ARTICLE
SIXTH of the Articles entitled "GENERAL PROVISIONS RELATING TO ALL STOCK" shares
of Class A Stock from the Class A Holders in an amount in excess of 0.25% of the
Voting Securities of the Company, and the Selling Stockholders sell such shares
pursuant to Section 2.11 or 7.4 of the Stockholders' Agreement in a registered
offering pursuant to which the Selling Stockholders have exercised a demand
registration right, such registration shall not count toward the maximum number
of registrations provided in this clause (ii) to the proviso to Section 1.1(a),
(iii) the Company shall not be obligated to cause any special audit to be
undertaken with any such registration, and (iv) the Company shall not be
required to effect any registration requested by holders of Eligible Securities
pursuant to this Section 1.1 unless the aggregate market value of all Eligible
Securities so requested to be registered exceeds $200 million on the date of
delivery of the request for registration (based on the average closing price per
share of Common Stock on the preceding ten Business Days).
(b) Withdrawal. The Selling Stockholders shall
<PAGE>
have the right to request withdrawal of any registration statement filed
pursuant to this Section 1.1 (and the Company shall so withdraw such
registration statement) so long as such registration statement has not become
effective, provided that, in such case, such Selling Stockholder shall pay all
related out-of-pocket Registration Expenses reasonably incurred by the Company
unless a registration statement shall be effected pursuant to this Section 1.1
within 270 days after such withdrawal. The Selling Stockholders, in accordance
with Section 2.5 of the Stockholders' Agreement, at any time and from time to
time, may change the Planned Date of any registration statement to any date not
more than 120 days after the original Planned Date with respect to such
registration statement.
(c) Effective Registration Statement. A registration requested pursuant
to this Section 1.1 shall not be deemed to be effected (i) if a registration
statement with respect thereto shall not have become effective under the
Securities Act (including, without limitation, because of a withdrawal of such
registration statement by the Selling Stockholders prior to the effectiveness
thereof pursuant to Section 1.1(b) hereof), (ii) if, after it has become
effective, such registration is interfered with for any reason by any stop
order, injunction or other order or requirement of the Commission or any other
Governmental Authority, and the result of such interference is to prevent the
Selling Stockholders from disposing of more than one-third of the Eligible
Securities proposed to be sold in accordance with the intended methods of
disposition or the Company exercises its rights under Section 1.4 and the result
is a delay in the proposed distribution of any Eligible Securities in excess of
120 days and the Selling Stockholders determine not to sell Eligible Securities
pursuant to such registration as a result of such delay, or (iii) if the
conditions to closing specified in the purchase agreement or underwriting
agreement entered into in connection with any underwritten offering shall not be
satisfied or waived with the consent of the Selling Stockholders holding two-
thirds of the Eligible Securities that were to have been sold thereunder, other
than as a result of any breach by any Selling Stockholder or any underwriter of
its obligations thereunder or hereunder.
(d) Registration Statement Form. Registration statements filed under this
Section 1.1 shall be on such form of the Commission as shall be selected by the
Company, and as shall permit the disposition of the subject Eligible Securities
for cash in accordance with the intended method
<PAGE>
or methods of disposition specified by the Selling Stockholders. The Selling
Stockholders may propose that the Company include in a registration statement
additional information or material specified by any Selling Stockholder and the
Company shall make a good faith determination whether to include such
information or material in such registration statement.
(e) Expenses. Except as otherwise provided herein, the Company shall
pay all Registration Expenses in connection with any registration requested
pursuant to this Section 1.1 and shall pay such other expenses if and to the
extent required by Section 2.5 of the Stockholders' Agreement.
(f) Selection of Underwriters. If a registration pursuant to this
Section 1.1 relates to an underwritten offering, the managing or lead
underwriter or underwriters shall be an underwriter or underwriters of
internationally recognized standing selected by the Selling Stockholders holding
a majority of the Eligible Securities proposed to be registered, with the
approval of the Company, which approval shall not be unreasonably withheld.
(g) Priority in Requested Registrations. If a registration pursuant to
this Section 1.1 involves an underwritten offering, and the managing or lead
underwriter or underwriters shall advise the Selling Stockholders in writing (a
copy of which shall be provided to the Company by the Selling Stockholders)
that, in its or their opinion, the number of securities requested to be included
in such registration by the Selling Stockholders, the Company and any other
Person exceeds the number which can be sold in such offering within a price
range acceptable to the Selling Stockholders, the Company shall include in such
registration the number of securities that the Selling Stockholders are so
advised can be sold in such offering, as follows: (i) (x) first, the Eligible
Securities proposed to be included by the Selling Stockholders, (y) second, the
securities requested to be included in such registration by the Company unless
otherwise provided in an agreement between the Company and another Person or
Persons, and (z) third, the securities of any other Person or Persons proposed
to be included in such registration, in accordance, as to the priorities among
such other Persons, with the rights contained in the respective agreements into
which such Persons and the Company have entered, or (ii) at the option of the
Company, (x) first, the Eligible Securities
<PAGE>
proposed to be included by the Selling Stockholders and the securities requested
to be included in such registration by the Company, each pro rata in accordance
with the number of Eligible Securities proposed to be included by the Selling
Stockholders and the number of securities so proposed to be included by the
Company, respectively, and (y) second, the securities of any other Person or
Persons proposed to be included in such registration, in accordance, as to the
priorities among such other Persons, with the rights contained in the respective
agreements into which such Persons and the Company have entered, provided, if
the Company selects the option set forth in clause (ii), such registration shall
not count toward the maximum number of registrations provided in Section
1.1(a)(ii) if due to the Company's participation on a pro rata basis with the
Selling Stockholders, the managing or lead underwriter or underwriters
determines in its good faith judgment that the number of securities requested to
be included in such registration by the Selling Stockholders and the Company
exceeds the number which can be sold in such offering within a price range
acceptable to the Selling Stockholders.
(h) Inconsistent Rights. The Company shall not grant to any holder of
its securities any registration rights inconsistent with the provisions of this
Section 1.1.
Section 1.2. Incidental Registration. (a) Right to Include Eligible
Securities. If the Company at any time proposes to register any shares of its
Common Stock or other common equity securities under the Securities Act (other
than by a registration on Form S-4 or S-8 or any successor or similar forms or
filed in connection with an exchange offer or any offering of securities solely
to the Company's existing stockholders or otherwise pursuant to a dividend
reinvestment plan or a dividend reinvestment and stock purchase plan, and other
than pursuant to Section 1.1) for sale pursuant to an underwritten public
offering or other similarly organized selling effort, whether or not for sale
for its own account, the Company shall give prompt written notice to each holder
of Eligible Securities of its intention to do so and of the rights of such
holders under this Section 1.2. Upon the written request of any holder of
Eligible Securities made within 30 days after the delivery of any such notice
(which request shall specify the Eligible Securities intended to be disposed of
by any holder thereof), the Company shall use its reasonable efforts to effect
the registration under the Securities Act of all Eligible Securities which the
Company has been so requested to
<PAGE>
register by the Selling Stockholders, to the extent required to permit the
disposition for cash (in accordance with the intended methods thereof specified
by the Selling Stockholders, which method of disposition shall be in accordance
with United States securities laws) of the Eligible Securities so to be
registered. If, at any time after giving written notice of its intention to
register any such securities and prior to the effective date of the registration
statement filed in connection with such registration, the Company shall
determine for any reason not to register or to delay registration of such
securities, the Company may, at its election, give written notice of such
determination to each Selling Stockholder and, thereupon, (i) in the case of a
determination not to register, the Company need not register any Eligible
Securities in connection with such registration (but shall, in such case, pay
the reasonable fees and expenses of counsel to the Selling Stockholders
(excluding the portion of any fees determined pursuant to the German Fee
Regulations) unless the Company effects a similar registration to which Sections
1.1 or 1.2 applies within 270 days of the Company's election not to register),
without prejudice, however, to the rights of the holders of Eligible Securities
(including the Selling Stockholders) to request that such registration be
effected as a registration under Section 1.1, and (ii) in the case of a
determination to delay registering, the Company may delay registering any
Eligible Securities for the same period as the delay in registering such other
securities. No registration effected under this Section 1.2 shall relieve the
Company of its obligation to effect any registration upon request under Section
1.1.
(b) Priority in Incidental Registrations. If a registration pursuant to
this Section 1.2 involves an underwritten offering, and the managing or lead
underwriter or underwriters shall advise the Company in writing (a copy of which
shall be provided by the Company to each Person requesting registration of
Eligible Securities or other securities of the Company), that, in its or their
opinion, the number of securities requested and otherwise proposed to be
included in such registration exceeds the number that can be sold in such
offering within a price range acceptable to the Company, the Company shall
include in such registration, up to the number of securities that the Company is
so advised can be sold in such offering, (i) if the registration is a primary
registration on behalf of the Company, (x) first, the securities proposed to be
included by the Company and (y) second, the Eligible Securities requested to
<PAGE>
be included in such registration by the Selling Stockholders and the securities
of other Persons requested to be included in such registration, each pro rata in
accordance with the number of securities proposed to be included by such other
Persons and the number of Eligible Securities so requested to be included,
respectively; and (ii) if the registration is a secondary registration on behalf
of a Person or Persons other than the Company or a holder of Eligible
Securities, (x) first, the securities proposed to be included by such other
Person or Persons (unless, the Company shall have negotiated an equal or better
priority with such Person or Persons), (y) second, the securities of the Company
and the Eligible Securities requested to be included in such registration by the
Selling Stockholders, each pro rata in accordance with the number of securities
proposed to be registered by the Company and the number of Eligible Securities
so requested to be included, respectively (unless the Company has negotiated an
equal or better priority with such other Person or Persons, in which case the
securities proposed to be included by the Company shall have higher priority
than the Eligible Securities proposed to be included by the Selling
Shareholders), and (z) third, the securities of any other Persons requested to
be included in such registration in accordance with the rights contained in the
respective agreements into which such Persons and the Company have entered.
Notwithstanding the aforesaid, if at any time the Company proposes to effect a
registration under this Section 1.2 the Selling Stockholders are entitled to
effect a disposition of Eligible Securities pursuant to Rule 144(k) (or any
successor provision) under the Securities Act, the aforesaid priorities shall be
changed so that the Eligible Securities proposed to be included by the Selling
Stockholders shall have the lowest priority of all securities proposed to be
registered in such registration.
(c) Inconsistent Rights. The Company shall not grant to any holder of its
securities any registration rights inconsistent with the provisions of this
Section 1.2.
(d) Expenses. Except as otherwise provided in this Agreement, the Company
shall pay all Registration Expenses in connection with any registration
requested pursuant to this Section 1.2.
(e) Selection of Underwriters. If an incidental registration pursuant to
this Section 1.2 involves an underwritten offering, the managing or lead
underwriter or underwriters shall be selected by the Company.
<PAGE>
Section 1.3. Registration Procedures. If and whenever the Company is
required to use its reasonable efforts to effect the registration of any
Eligible Securities under the Securities Act as provided in Sections 1.1 and
1.2, the Company shall as expeditiously as possible:
(a) prepare and as soon thereafter as possible file with the
Commission the requisite registration statement to effect such registration
and thereafter use its reasonable efforts to cause such registration
statement to become effective, provided that before filing such
registration statement or any amendments thereto, the Company shall furnish
to the counsel to the Selling Stockholders copies of all such documents
proposed to be filed, which documents will be subject to the review of such
counsel;
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement continuously effective for a period of either (i) not less than
120 days (subject to extension pursuant to the last paragraph of this
Section 1.3) or, if such registration statement relates to an underwritten
offering, such longer period as in the opinion of counsel for the
underwriters a prospectus is required by law to be delivered in connection
with sales of securities by an underwriter or dealer; or (ii) such shorter
period as is required for the disposition of all of the securities covered
by such registration statement in accordance with the intended methods of
disposition by the seller or sellers thereof set forth in such registration
statement (but in any event not before the expiration of any longer period
of effectiveness required under the Securities Act), and to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement until such time as all of
such securities have been disposed of in accordance with the intended
methods of disposition by the seller or sellers thereof set forth in such
registration statement;
(c) furnish to each seller of securities covered by such registration
statement such number of conformed copies of such registration statement
and of each such amendment and supplement thereto (in each case including
all exhibits), such number of copies of the pro-
<PAGE>
spectus contained in such registration statement (including each
preliminary prospectus and any summary prospectus) and any other prospectus
filed under Rule 424 under the Securities Act, in conformity with the
requirements of the Securities Act, and such other documents in order to
facilitate the disposition of such securities owned by such seller in
accordance with such seller's intended method of disposition, as such
seller may reasonably request, but only during such time as the Company
shall be required under the provisions hereof to cause such registration
statement to remain current;
(d) use its reasonable efforts to register or qualify securities
covered by such registration statement under such other securities or blue
sky laws of such jurisdictions in the United States as each seller thereof
shall reasonably request, to keep such registration or qualification in
effect for so long as such registration statement remains in effect, and to
take any other action which may be reasonably necessary to enable such
seller to consummate the disposition in such jurisdictions in the United
States of the securities owned by such seller, provided that the Company
shall not for any such purpose be required to (i) qualify generally to do
business as a foreign corporation in any jurisdiction where it would not
otherwise be required to qualify but for the requirements of this
subsection (d), (ii) consent to general service of process in any such
jurisdiction, (iii) subject itself to taxation in any such jurisdiction or
(iv) conform its capitalization or the composition of its assets at the
time to the securities or blue sky laws of such jurisdiction;
(e) use its reasonable efforts to cause all securities covered by such
registration statement to be registered with or approved by such other
United States Governmental Authorities as may be necessary by virtue of the
business and operations of the Company to enable the sellers to consummate
the disposition thereof;
(f) use its reasonable efforts to furnish to each Selling Stockholder a
signed counterpart, addressed to such Selling Stockholder (and the
underwriters, if any), of
(i) an opinion of counsel for the Company,
<PAGE>
dated the effective date of such registration statement (and, if such
registration includes an underwritten public offering, dated the date
of the closing under the underwriting agreement), reasonably
satisfactory in form and substance to such Selling Stockholder, and
(ii) a "comfort" letter, dated the effective date of such
registration statement (and, if such registration includes an
underwritten public offering, dated the date of the closing under the
underwriting agreement), reasonably satisfactory in form and substance
to such Selling Stockholder, signed by the independent public
accountants who have certified the Company's financial statements
included in such registration statement,
covering substantially the same matters with respect to such registration
statement (and the prospectus included therein) and, in the case of the
accountants' letter, with respect to events subsequent to the date of such
financial statements, as are customarily covered in opinions of issuer's
counsel and in accountants' letters delivered to the underwriters in
underwritten public offerings of securities;
(g) furnish to each such Selling Stockholder at least five Business
Days prior to the filing thereof a copy of any amendment or supplement to
such registration statement or prospectus (other than any amendment or
supplement in the form of a filing which the Company is required to make
pursuant to the Exchange Act) and not file any such amendment or supplement
to which any such Selling Stockholder shall have reasonably objected on the
grounds that, in the opinion of counsel to such Selling Stockholder, such
amendment or supplement does not comply in all material respects with the
requirements of the Securities Act;
(h) notify each Selling Stockholder, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act, upon
discovery that, or upon the discovery of the happening of any event as a
result of which, the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to make
the statements therein not
<PAGE>
misleading in the light of the circumstances under which they were made,
and at the request of any such Selling Stockholder promptly prepare and
furnish to such Selling Stockholder a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be necessary so
that, as thereafter delivered to the purchasers of such securities, such
prospectus shall not include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading in the light of the circumstances
under which they were made;
(i) otherwise use its reasonable efforts to comply with all
applicable rules and regulations of the Commission, and make available to
its security holders, as soon as reasonably practicable, an earnings
statement covering a period of at least twelve months beginning after the
effective date of such registration statement, which earnings statement
shall satisfy the provisions of Section 11(a) of the Securities Act;
(j) use its reasonable efforts to provide customary assistance to the
underwriters in their selling efforts and presentations to prospective
investors; and
(k) use its reasonable efforts to cause all such Eligible Securities
covered by such registration statement to be listed on a national
securities exchange or on the National Association of Securities Dealers,
Inc. National Market System (if such Eligible Securities are not already so
listed), and on each other securities exchange on which similar securities
issued by the Company are then listed, if the listing of such Eligible
Securities is then permitted under the rules of such exchange.
The Company may require each Selling Stockholder to furnish the
Company in writing for inclusion in the registration statement such information
regarding such Selling Stockholder and the distribution of such Eligible
Securities being sold as the Company may from time to time reasonably request.
Each Selling Stockholder agrees by becoming a holder of Eligible
Securities that upon receipt of any notice from the Company of the happening of
any event of the
<PAGE>
kind described in subsection (h) of this Section 1.3, such Selling Stockholder
shall forthwith discontinue such Selling Stockholder's disposition of Eligible
Securities pursuant to the registration statement relating to such Eligible
Securities until such Selling Stockholder's receipt of the copies of the
supplemented or amended prospectus contemplated by subsection (h) of this
Section 1.3 and, if so directed by the Company, such Selling Stockholder shall
use its reasonable efforts to deliver to the Company (at the Company's expense)
all copies, other than permanent file copies then in such Selling Stockholder's
possession, of the prospectus relating to such Eligible Securities current at
the time of receipt of such notice. If the Company shall give any such notice,
the applicable time period mentioned in subsection (b) of this Section 1.3
during which a registration statement is to remain effective shall be extended
by the number of days during the period from and including the date of the
giving of such notice pursuant to subsection (h) of this Section 1.3, to and
including the date when each Selling Stockholder shall have received the copies
of the supplemented or amended prospectus contemplated by subsection (h) of this
Section 1.3.
Section 1.4. Delay of Filing or Sales. (a) The Company shall have
the right, upon giving notice to the Selling Stockholders of the exercise of
such right, to delay filing a registration statement or to require such Selling
Stockholders not to sell any Eligible Securities pursuant to a registration
statement for a period of 270 days from the date on which such notice is given,
or such shorter period of time as may be specified in such notice or in a
subsequent notice delivered by the Company to such effect prior to or during the
effectiveness of the registration statement, if (i) the Company is engaged in or
proposes to engage in discussions or negotiations with respect to, or has
proposed or taken a substantial step to commence, or there otherwise is pending,
any merger, acquisition, other form of business combination, divestiture, tender
offer, financing or other transaction, or there is an event or state of facts
relating to the Company, in each case which is material to the Company (any such
negotiation, step, event or state of facts being herein called a "Material
Activity"), (ii) such Material Activity would, in the opinion of counsel for the
Company, require disclosure so as to permit the Eligible Securities to be sold
in compliance with law, and (iii) such disclosure would, in the reasonable
judgment of the Company, be adverse to its interests, provided that the Company
shall have no right to delay the filing of a registration state-
<PAGE>
ment or the selling of Eligible Securities if at any time during the twelve
months preceding the date on which such notice was given the Company had delayed
either the filing of a registration statement that included Eligible Securities
pursuant to Section 1.1(a) or the selling of Eligible Securities pursuant to a
registration statement filed in accordance with Section 1.1(a).
(b) The Company shall have no obligation to include in any notice
contemplated by Section 1.4(a) any reference to or description of the facts
based upon which the Company is delivering such notice. The Company shall pay
all Registration Expenses and all reasonable fees and expenses of counsel for
the Selling Stockholders (excluding the portion of any fees determined pursuant
to the German Fee Regulations) with respect to any registration of Eligible
Securities or sales thereof that has been delayed for more than 90 days pursuant
to this Section 1.4, unless the Company effects a similar registration to which
Section 1.1 or 1.2 applies within 270 days of the first delivery of a notice
contemplated by Section 1.4(a).
Section 1.5. Underwritten Offerings. (a) Requested Underwritten
Offerings. If requested by the underwriters of any underwritten offering of
Eligible Securities pursuant to a registration requested under Section 1.1, the
Company shall enter into an underwriting agreement with such underwriters for
such offering. Such agreement shall be reasonably satisfactory in substance and
form to each Selling Stockholder, the Company and the underwriters and shall
contain representations, warranties, indemnities and agreements customarily
included by an issuer in underwriting agreements with respect to secondary
distributions, including, without limitation, indemnities to the effect and to
the extent provided in Section 1.7. The Selling Stockholders shall be parties to
such underwriting agreement and may, at their option, require that any or all of
the conditions precedent to the obligations of such underwriters under such
underwriting agreement be conditions precedent to the obligations of such
Selling Stockholders.
(b) Incidental Underwritten Offerings. If the Company at any time
proposes to register any of its Common Stock or other common equity securities
under the Securities Act as contemplated by Section 1.2 and such securities are
to be distributed by or through one or more underwriters, the Company shall, if
requested by the Selling Stockholders as provided in Section 1.2 and subject to
the provisions of
<PAGE>
Section 1.2(b), use its reasonable efforts to arrange for such underwriters to
include those Eligible Securities designated by the Selling Stockholders among
the securities to be distributed by such underwriters. The Selling Stockholders
shall be parties to the underwriting agreement between the Company and such
underwriters.
(c) Holdback Agreements. (i) Each holder of Eligible Securities
agrees by becoming a holder of such Eligible Securities not to effect any public
sale or distribution of any equity securities of the Company, or any securities
convertible into or exchangeable or exercisable for such securities, including a
sale pursuant to Rule 144 under the Securities Act (or any similar provision
then in force), during the ten days before and the 90 days after any
underwritten registration pursuant to Section 1.1 or 1.2 has become effective,
except as part of such underwritten registration.
(ii) The Company agrees not to effect any public sale or distribution
of its equity securities or securities convertible into or exchangeable or
exercisable for any of such securities during the ten days before and the 90
days after any underwritten registration pursuant to Section 1.1 or 1.2 has
become effective, except as part of such underwritten registration and except
pursuant to (v) registrations on Form S-4 or S-8, or any successor or similar
forms thereto or otherwise pursuant to a dividend reinvestment plan or a
dividend reinvestment and stock purchase plan; (w) sales upon exercise or
exchange, by the holder thereof, of options, warrants or convertible securities;
(x) any other agreement to issue equity securities or securities convertible
into or exchangeable or exercisable for any of such securities in effect on the
date the Selling Stockholders deliver to the Company the request to register, or
include in a registration, Eligible Securities under Section 1.1 or Section 1.2,
as the case may be; (y) any acquisition or similar transaction; and (z) any
dividend reinvestment plan or employee benefit plan (if necessary for such plan
to fulfill its funding obligations in the ordinary course).
Section 1.6. Preparation; Reasonable Investigation. In connection
with the preparation and filing of each registration statement under the
Securities Act pursuant to this Agreement in which the Selling Stockholders
include Eligible Securities in such registration, the Company shall (a) give the
Selling Stockholders, their underwriters, if
<PAGE>
any, and their respective advisors and counsel the opportunity to participate in
the preparation of such registration statement, each prospectus included therein
or filed with the Commission, and each amendment thereof or supplement thereto
(other than any amendment or supplement in the form of a filing which the
Company is required to make pursuant to the Exchange Act), (b) give the Selling
Stockholders and their respective advisors and counsel such access to its books
and records and such opportunities to discuss the business of the Company with
its officers and the independent public accountants who have certified its
financial statements as shall be necessary, in the opinion of such Selling
Stockholders' counsel, to conduct a reasonable investigation within the meaning
of the Securities Act, and (c) consult with the Selling Stockholders concerning
the selection of underwriter's counsel for such offering and registration.
Section 1.7. Indemnification. (a) Indemnification by the Company. In
the event of any registration of any securities of the Company under the
Securities Act pursuant to Section 1.1 or 1.2, the Company shall, and hereby
does, indemnify and hold harmless each Selling Stockholder, its directors,
officers, employees, agents and advisors, and each other Person, if any, who
controls such Selling Stockholder within the meaning of the Securities Act,
against any losses, claims, damages or liabilities, joint or several, to which
each such Person may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of
or are based upon
(i) any untrue statement or alleged untrue statement of any material
fact contained (x) in any registration statement under which such
securities were registered under the Securities Act, any preliminary
prospectus, final prospectus or summary prospectus contained therein or
used in connection with the offering of securities covered thereby, or any
amendment or supplement thereto, or (y) in any application or other
document or communication (in this Section 1.7 collectively called an
"application") executed by or on behalf of the Company or based upon
written information furnished by or on behalf of the Company filed in any
jurisdiction in order to qualify any securities covered by such
registration statement under the "blue sky" or securities laws thereof, or
<PAGE>
(ii) any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein
not misleading,
and the Company will reimburse such Person for any reasonable legal or any other
expenses (excluding the portion of any legal fees determined pursuant to the
German Fee Regulations) incurred by it in connection with investigating or
defending any such loss, claim, liability, action or proceeding, provided that
the Company shall not be liable in any such case to the extent that any such
loss, claim, damage, liability (or action or proceeding in respect thereof) or
expense arises out of or is based upon an untrue statement or alleged untrue
statement, or omission or alleged omission, made in such registration statement,
any such preliminary prospectus, final prospectus, summary prospectus, amendment
or supplement, or in any application, in reliance upon and in conformity with
written information prepared and furnished to the Company by any Selling
Stockholder or, in the case of a registration under Section 1.1 hereof, any
underwriter specifically for use in the preparation thereof and provided,
further, that the Company shall not be liable to any Person who participates as
an underwriter (other than the Selling Stockholders insofar as they may be
deemed underwriters within the meaning of the Securities Act) in any such
registration or any other Person who controls such underwriter within the
meaning of the Securities Act, in any such case to the extent that any such
loss, claim, damage, liability (or action or proceeding in respect thereof) or
expense arises out of such Person's failure to send or give a copy of the final
prospectus, as the same may be then supplemented or amended, to the Person
asserting an untrue statement or alleged untrue statement or omission or alleged
omission at or prior to the written confirmation of the sale of the securities
to such Person if such statement or omission was timely corrected in such final
prospectus. Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of any such Person and shall survive the
transfer of such securities by such Person. The Company shall not be obligated
to pay the fees and expenses of more than one counsel or firm of counsel for all
parties indemnified in respect of a claim for each jurisdiction in which such
counsel is required unless a conflict of interest exists between such
indemnified party and any other indemnified party in respect of such claim.
(b) Indemnification by the Selling Stockholders.
<PAGE>
The Company may require, as a condition to including any Eligible Securities
held by a Selling Stockholder in any registration statement filed pursuant to
Sections 1.1 and 1.2, that the Company shall have received an undertaking
satisfactory to it from such Selling Stockholder, to indemnify and hold harmless
(in the same manner and to the same extent as set forth in subsection (a) of
this Section 1.7) the Company, each director, officer, employee, agent and
advisor of the Company and each other Person, if any, who controls the Company
within the meaning of the Securities Act, with respect to any untrue statement
or alleged untrue statement in or omission or alleged omission from such
registration statement, any preliminary prospectus, final prospectus or summary
prospectus contained therein, or any amendment or supplement thereto, or any
application, if such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written
information prepared and furnished to the Company by such Selling Stockholder
specifically for use in the preparation of such registration statement,
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement, or such application. Such indemnity shall remain in full force and
effect, regardless of any investigation made by or on behalf of the Company or
any such director, officer, employee, agent, advisor or controlling Person and
shall survive the transfer of such securities by such Selling Stockholder. The
indemnity provided by each Selling Stockholder under this Section 1.7(b) shall
be only with respect to its own misstatements and omissions and not with respect
to those of any other seller or prospective seller of securities, and not
jointly and severally, and shall be limited in amount to the net amount of
proceeds received by such Selling Stockholder from the sale of Eligible
Securities pursuant to such registration statement.
(c) Notices of Claims, etc. Promptly after receipt by an indemnified
party of notice of the commencement of any action or proceeding involving a
claim referred to in the preceding subsections of this Section 1.7, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party, give written notice to the latter of the commencement of
such action, provided that the failure of any indemnified party to give notice
as provided herein shall not relieve the indemnifying party of its obligations
under the preceding subsections of this Section 1.7, except to the extent that
the indemnifying party is actually prejudiced by such failure to give notice.
In case any such action is brought against an indemnified par-
<PAGE>
ty, unless a conflict of interest between such indemnified and indemnifying
parties exists in respect of such claim, the indemnifying party shall be
entitled to participate in and to assume the defense thereof, jointly with any
other indemnifying party similarly notified to the extent that it may wish, with
counsel reasonably satisfactory to such indemnified party, and after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, if the indemnifying party is entitled to do so hereunder,
the indemnifying party shall not be liable to such indemnified party for any
legal or other expenses subsequently incurred by the latter in connection with
the defense thereof other than reasonable costs of investigation. No
indemnifying party shall, without the consent of the indemnified party, consent
to entry of any judgment or enter into any settlement which does not include as
an unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect to such claim or
litigation.
(d) Other Remedies. If for any reason the indemnity set forth in the
preceding subsections of this Section 1.7 is unavailable, or is insufficient to
hold harmless an indemnified party, other than by reason of the exceptions
provided therein, then the indemnifying party shall contribute to the amount
paid or payable by the indemnified party as a result of such losses, claims,
damages or liabilities in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and the indemnified
party on the other hand in connection with the offering of securities and the
statements or omissions or alleged statements or omissions which resulted in
such loss, claim, damage, or liability, as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue statement of a material fact or the omission to state a
material fact relates to information supplied by the indemnifying party or by
the indemnified party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statements or omissions.
No party shall be liable for contribution under this subsection (d) except to
the extent and under such circumstances as such party would have been liable to
indemnify under this Section 1.7 if such indemnification were enforceable under
applicable law.
Section 1.8. Effect of Other Agreements Among the
<PAGE>
Parties Hereto. Nothing in this Agreement shall be construed to alter in any
manner whatsoever any rights or obligations of the Company, FT, DT, any
Qualified Subsidiary or any Qualified Stock Purchaser contained in any other
agreement among such Persons entered into concurrently herewith, including, but
not limited to, the restrictions on transfer of shares of capital stock of the
Company contained in Article II of the Stockholders' Agreement and the
provisions of Section 7.5(a) of the Stockholders' Agreement. In addition, any
sales of Eligible Securities made pursuant to this Agreement shall be effected
only in strict accordance with Article II and Section 7.5(a) of the Stockholders
Agreement.
Section 2. Definitions. Capitalized terms used herein and not defined
in this Section 2 shall have the meanings set forth in the Stockholders'
Agreement, dated as of January 31, 1996, among FT, DT and the Company. As used
herein, the following terms have the following respective meanings:
Commission: The Securities and Exchange Commission or any other
Federal agency at the time administering the Securities Act.
Eligible Securities: (a) shares of Common Stock held by a party to
this Agreement (other than the Company) acquired prior to the conversion of
all shares of Class A Stock into shares of Common Stock, or termination of
the Fundamental Rights, in each case pursuant to Section 7 of the Class A
Provisions and without violating Article 2 of the Standstill Agreement; (b)
shares of Common Stock into which shares of Class A Stock held by a party
to this Agreement (other than the Company) may be converted, provided that
for all purposes under this Agreement, the holders of such shares of Class
A Stock shall be deemed to be the holders of such shares of Common Stock
into which such shares of Class A Stock may be converted; and (c) any
securities issued or issuable with respect to such Class A Stock or such
Common Stock by way of a stock dividend or stock split or in connection
with a combination of shares, recapitalization, merger, consolidation or
other reorganization or otherwise. As to any particular Eligible
Securities, once issued such securities shall cease to be Eligible
Securities when (i) a registration statement with respect to the sale of
such securities shall have become effective under
<PAGE>
the Securities Act and such securities shall have been disposed of, (ii)
they shall have been distributed to the public pursuant to Rule 144 (or any
successor provisions) under the Securities Act, (iii) they shall have been
otherwise transferred (except transfers to a Qualified Subsidiary or
Qualified Stock Purchaser), new certificates for them not bearing a legend
restricting further transfer shall have been delivered by the Company and
subsequent disposition of them shall not require registration or
qualification of them under the Securities Act or any state securities or
blue sky law then in force, or (iv) they shall have ceased to be
outstanding.
Exchange Act: The Securities Exchange Act of 1934, or any similar
Federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
German Fee Regulations: The Bundesgebuhrenordnung fur Rechtsanwalte
vom 26. Juli 1957 (BGBl) I S. 907 (as it or any successor provision may be
in effect from time to time).
Registration Expenses: All expenses incident to the Company's
performance of or compliance with Sections 1.1, 1.2 and 1.3 hereof,
including, without limitation, (a) all registration, filing and NASD fees,
(b) all fees and expenses of complying with securities or blue sky laws,
(c) all word processing, duplicating and printing expenses, (d) messenger
and delivery expenses, (e) the reasonable fees and disbursements of counsel
for the Company (excluding the portion of any fees determined pursuant to
the German Fee Regulations) and of its independent public accountants,
including the expenses of any "comfort" letters required by or incident to
such performance and compliance, (f) premiums and other costs of policies
of insurance against liabilities arising out of the public offering of the
Eligible Securities being registered (if the Company elects to obtain any
such insurance), and (g) any fees and disbursements of underwriters
customarily paid by issuers or sellers of securities, but excluding
underwriting discounts and commissions, provided, that (i) except as
otherwise specifically provided herein, fees and disbursements of counsel
to one or more Selling Stockholders and (ii) transfer taxes shall not be
included as Registration Expenses and shall not be paid
<PAGE>
by the Company.
Securities Act: The Securities Act of 1933, or any similar Federal
statute, and the rules and regulations of the Commission thereunder, all as
the same shall be in effect at the time.
Selling Stockholders: Holders of Eligible Securities that with
respect to a particular registration have delivered to the Company a
request to register, or include in a registration, Eligible Securities held
by them under Section 1.1 or Section 1.2 of this Agreement.
Section 3. Miscellaneous.
Section 3.1. Rule 144. The Company shall file the reports required to
be filed by it under the Securities Act and the Exchange Act and the rules and
regulations adopted by the Commission thereunder (or, if the Company is not
required to file such reports, shall, upon the request of any holder of Eligible
Securities, make publicly available other information) and shall take such
further action as any holder of Eligible Securities may reasonably request, all
to the extent required from time to time to enable such holder to sell Eligible
Securities without registration under the Securities Act pursuant to (a) Rule
144 under the Securities Act, as such Rule may be amended from time to time, or
(b) any similar rule or regulation hereafter adopted by the Commission. Upon the
request of any holder of Eligible Securities, the Company shall deliver to such
holder a written statement as to whether it has complied with such requirements.
Section 3.2. Additional Parties. Upon the Transfer of any shares of
Class A Stock to a Qualified Subsidiary or Qualified Stock Purchaser in
accordance with the terms of the Stockholders' Agreement, such Qualified
Subsidiary or Qualified Stock Purchaser shall become a party to this Agreement
by agreeing in writing to be bound by the terms and conditions of this Agreement
pursuant to an instrument of assumption in the form of Exhibit B to the
Stockholders' Agreement, in the case of a Qualified Subsidiary, or an instrument
of assumption in the form of Exhibit C to the Stockholders' Agreement, in the
case of a Qualified Stock Purchaser, and shall thereby be deemed a holder of
Eligible Securities for the purposes of this Agreement.
<PAGE>
Section 3.3. 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.
Washington, D.C. 20006
U.S.A.
Attn: Werner Hein, Esq.
Tel: (202) 778-8726
Fax: (202) 861-0473
Company: 2330 Shawnee Mission
Parkway, East Wing
Westwood, Kansas 66205
U.S.A.
<PAGE>
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 3.3 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 3.4. 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 3.5. Binding Agreement; 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 shall be construed to confer upon or
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
<PAGE>
entity formed to continue the business activities of FT shall assume the rights
and obligations of FT under this Agreement.
Section 3.6. 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 TO THIS AGREEMENT 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 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. EACH PARTY HERETO 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. 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 3.3. 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
<PAGE>
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.
(C) EACH PARTY HERETO AGREES THAT MONEY DAMAGES WOULD NOT BE A
SUFFICIENT REMEDY FOR THE OTHER PARTIES HERETO FOR ANY BREACH OF THIS AGREEMENT
BY IT, AND THAT IN ADDITION 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 SUCH A
BREACH HAS OCCURRED, AND TO WAIVE ANY REQUIREMENT FOR THE SECURING OR POSTING OF
ANY BOND IN CONNECTION WITH SUCH REMEDY.
Section 3.7. 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 hereto
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 this Agreement to the
extent possible.
Section 3.8. Translation. 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 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 simultaneously with the execution and delivery of the English version
hereof, such
<PAGE>
English version having likewise been executed and delivered. The parties deem
the French and English versions of this Agreement to be equally authoritative.
Section 3.9. Table of Contents; Headings; Counterparts. 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 3.10. Entire Agreement. This Agreement embodies the entire
agreement and understanding of the parties hereto 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 3.11. 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 set off or counterclaim relating to this Agreement from
the jurisdiction of any competent court described in Section 3.6, 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. (P) 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 3.12. Currency. All amounts payable
<PAGE>
under this Agreement shall be payable in U.S. dollars.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered as of the date first above written.
SPRINT CORPORATION
By: /s/ Don A. Jensen
------------------------------
Title: Secretary
FRANCE TELECOM
By: /s/ Henri Chantreuil
------------------------------
Title: Vice President
DEUTSCHE TELEKOM AG
By: /s/ Dr. Herbert May
------------------------------
Title: Member of the Board of
Management
<PAGE>
EXHIBIT 4
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");
WITNESSETH:
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.
1
<PAGE>
"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.
2
<PAGE>
"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.
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"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).
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"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.
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"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;
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(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.
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(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:
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(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
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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.
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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
11
<PAGE>
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
12
<PAGE>
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.
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<PAGE>
(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 n(degrees) 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
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. (S)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
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<PAGE>
(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
/s/ W. T. Esrey
By: _________________________________
William T. Esrey
Chairman and Chief Executive
Officer
FRANCE TELECOM
/s/ Charles Rozmaryn
By: _________________________________
Charles Rozmaryn
Directeur General
DEUTSCHE TELEKOM AG
/s/ Ron Sommer
By: _________________________________
Dr. Ron Sommer
Vorsitzender des Vorstandes
15
<PAGE>
EXHIBIT 5
================================================================================
COORDINATION AGREEMENT
Between
FRANCE TELECOM
and
DEUTSCHE TELEKOM AG
Dated as of July 31, 1995
===============================================================================
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
<S> <C>
ARTICLE I PRINCIPLES OF COORDINATION.................................. 5
Section 1.1 Joint or Coordinated Action............................ 5
Section 1.2 Relative Shareholdings................................. 5
Section 1.3 Holdings of Associates................................. 5
Section 1.4 No Impairment of Rights................................ 6
Section 1.5 Further Assurances..................................... 6
ARTICLE II PURCHASES OF CLASS A STOCK................................... 6
Section 2.1 Optional Purchase Rights................................ 6
Section 2.2 Pricing Elections....................................... 7
Section 2.3 Conversion Elections.................................... 7
Section 2.4 Redemption Election..................................... 8
Section 2.5 Qualified Stock Purchasers.............................. 8
ARTICLE III PURCHASES OF COMMON STOCK.................................... 8
Section 3.1 Applicability........................................... 8
Section 3.2 Purchase Allocations.................................... 8
Section 3.3 Coordination of Market Purchases........................ 9
ARTICLE IV GOVERNANCE PROVISIONS........................................ 9
Section 4.1 Voting of Securities.................................... 9
Section 4.2 Mutual Support of Board Nominees........................10
Section 4.3 Number of Directors.....................................10
Section 4.4 Committee Representation................................10
Section 4.5 Replacement of Directors................................10
Section 4.6 Stockholder Matters.....................................11
Section 4.7 Actions with Respect to Obligations
of the Company........................................11
ARTICLE V LONG DISTANCE ASSETS.........................................12
Section 5.1 Sale of Long Distance Assets............................12
Section 5.2 Qualified LD Purchasers.................................12
Section 5.3 Lien Foreclosures.......................................13
ARTICLE VI SALES OF SHARES..............................................13
Section 6.1 Right of First Offer....................................13
Section 6.2 Sales of Shares to the Company..........................14
Section 6.3 Coordination of Market Sales............................14
Section 6.4 Registration Rights.....................................14
ARTICLE VII CHANGE OF CONTROL OF THE COMPANY.............................15
Section 7.1 Joint Action............................................15
Section 7.2 Competing Proposals.....................................15
ARTICLE VIII INDEMNIFICATION..............................................15
Section 8.1 Indemnification.........................................15
Section 8.2 Additional Provisions...................................16
</TABLE>
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<TABLE>
<S> <C>
ARTICLE IX MISCELLANEOUS................................................16
Section 9.1 Termination.............................................16
Section 9.2 Notices.................................................17
Section 9.3 Waiver, Amendment, etc..................................18
Section 9.4 No Partnership..........................................18
Section 9.5 Binding Agreement; Transfers; No Third
Party Beneficiaries...................................18
Section 9.6 No Assignment of Certain Purchase Rights................18
Section 9.7 Qualified Subsidiaries..................................19
Section 9.8 Governing Law; Dispute Resolution;
Equitable Relief.....................................19
Section 9.9 Severability............................................19
Section 9.10 Headings; Counterparts..................................20
Section 9.11 Entire Agreement........................................20
Section 9.12 Language of Agreement...................................20
</TABLE>
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COORDINATION AGREEMENT
COORDINATION AGREEMENT, dated as of July 31, 1995 (this "Agreement"),
between 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, Sprint Corporation, a corporation organized under the laws of the
State of Kansas (the "Company"), FT and DT have agreed to form a global Joint
Venture to provide telecommunications services as provided in the Joint Venture
Agreement dated as of June 22, 1995, among the Company, Sprint Global Venture,
Inc., a wholly-owned subsidiary of the Company, FT and DT (the "Joint Venture
Agreement"), and to pursue various telecommunications opportunities around the
world as further provided therein; and
WHEREAS, pursuant to an Investment Agreement, dated as of July 31, 1995,
among the Company, FT and DT (the "Investment Agreement"), FT and DT have agreed
to purchase from the Company shares of Class A Stock (such and other capitalized
terms being used without definition in this Agreement having the meanings set
forth in the documents referred to in the Glossary of Terms set forth in
APPENDIX A hereto, which is incorporated by reference herein) of the Company,
including, in certain cases (subject to satisfaction of certain conditions set
forth in the Relevant Documents), Class A Common Stock representing in the
aggregate approximately 20% of the outstanding common equity of the Company; and
WHEREAS, pursuant to the Investment Agreement:
(a) (i) FT, DT and the Company will enter into the Stockholders'
Agreement, the Registration Rights Agreement and the Standstill Agreement, (ii)
FT and the Company shall enter into the FT Investor Confidentiality Agreement,
and (iii) DT and the Company shall enter into the DT Investor Confidentiality
Agreement (all such agreements, together with the Investment Agreement, are
collectively referred to as the "Investment Documents"); and
(b) the Company will duly adopt the Amendment, the Bylaws Amendment and
the amendment to the Rights Agreement contemplated in the Investment Agreement
(the Articles, Bylaws and Rights Agreement, as so amended, are collectively
referred to as the "Corporate Documents" and, together with the Investment
Documents, the "Relevant Documents"); and
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<PAGE>
WHEREAS, FT and DT will each hold their shares of Class A Stock separately;
and
WHEREAS, FT and DT desire to enter into this Agreement to coordinate their
activities, and to specify their respective rights and obligations with regard
to their investment in the Company;
NOW, THEREFORE, in consideration of the mutual covenants and obligations
set forth herein, each of the parties hereby agrees as follows:
ARTICLE I
PRINCIPLES OF COORDINATION
--------------------------
Section 1.1 Joint or Coordinated Action. The parties desire to coordinate
the exercise of their respective rights and obligations as parties to the
Investment Documents and as holders of Class A Stock under the Corporate
Documents, and the parties shall make reasonable efforts in good faith to reach
consensus on appropriate coordinated action within the necessary time frames. If
the parties are unable to reach consensus on coordinated action despite their
efforts pursuant to this Section 1.1, the relevant provisions of this Agreement
shall apply.
Section 1.2 Relative Shareholdings. For so long as the restrictions set
forth in Section 7.5(b) of the Stockholders' Agreement (or any successor
provision thereto) shall remain in effect, and notwithstanding any other
provision hereof to the contrary, no party shall acquire or dispose of shares of
Class A Stock or other Voting Securities of the Company if, as a result thereof,
the ratio of the Committed Percentage of one party (and its Qualified
Subsidiaries) to the Committed Percentage of the other party (and its Qualified
Subsidiaries) would be greater than (i) until the Investment Completion Date, 1
to 1, and (ii) thereafter, 3 to 2.
Section 1.3 Holdings of Associates. Each party shall make reasonable
efforts to ensure that all of the Persons listed on Schedule A to the Investment
Agreement (as to FT) or Schedule B to the Investment Agreement (as to DT) shall,
in the aggregate, Beneficially Own Voting Securities of the Company representing
less than 0.05% of the Voting Power of the Company. In addition, the parties
shall consult with each other on a regular basis concerning such other
arrangements as they may from time to time deem necessary or reasonably
appropriate for the purpose of monitoring and administering the provisions of
the Standstill Agreement relating to Voting Securities of the Company
Beneficially Owned by such Associates.
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Section 1.4 No Impairment of Rights. Except with the concurrence of the
other party or to the extent otherwise expressly required by this Agreement, no
party shall take any action with respect to the subject matter of this Agreement
if such action would impair the rights of the other party under this Agreement
or any of the Relevant Documents or would impair the ability of the other party
to comply with its obligations hereunder or thereunder.
Section 1.5 Further Assurances. Each party shall, within any applicable
time periods, execute and deliver such additional agreements, documents or other
instruments as may be necessary, or as may be reasonably requested by the other
party, to give effect to the rights and obligations provided for in this
Agreement, to render effective the transactions contemplated hereby, and
otherwise to carry out, to the fullest extent possible, the intent and purposes
of this Agreement and to enable the parties to achieve the practical benefits
intended hereby.
ARTICLE II
PURCHASES OF CLASS A STOCK
--------------------------
Section 2.1 Optional Purchase Rights. (a) If the Relevant Documents
permit the parties to acquire shares of Class A Stock of the Company other than
pursuant to Sections 2.1 through 2.5, inclusive, of the Investment Agreement
(such non-excluded shares being the "Elective Shares"), then each party shall be
entitled to purchase (directly from the Company, if appropriate, or otherwise
pursuant to arrangements reasonably satisfactory to each party) half of such
Elective Shares; provided that, at a time when one party Beneficially Owns fewer
Voting Securities of the Company than the other party, the party owning fewer
shares shall be entitled (but not obligated) to acquire as many (including all)
of such Elective Shares as shall permit it to Beneficially Own the same number
of Voting Securities of the Company as the other party after giving effect to
the acquisition by both parties (or by such party, as the case may be) of all
such Elective Shares. If the Relevant Documents specify a number of Elective
Shares each party may purchase individually which is different from that amount
determined pursuant to the preceding sentence, then the parties will make such
arrangements as are reasonably necessary to enable each party to acquire the
number of Elective Shares determined pursuant to the preceding sentence. Such
arrangements may include having the party that wants to purchase fewer Elective
Shares act as the nominee of the other party. Each party shall make reasonable
efforts to purchase all of the Elective Shares which it is entitled to purchase
pursuant to the Relevant Documents.
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<PAGE>
(b) Except with respect to purchases made pursuant to Section 7.3 of the
Stockholders' Agreement, each party shall, promptly (and, in any event, not
later than fifteen days prior to any notification deadline set forth in the
Relevant Documents) after becoming aware of its right to do so, notify the other
party in writing of the extent to which it intends to purchase from the Company
any Elective Shares to which it is entitled. If one party does not elect to
purchase all of the Elective Shares to which it is entitled, then the other
party may elect to purchase such number as it shall desire to purchase of the
Elective Shares which the initial party has indicated it is not interested in
purchasing, and the parties will make such arrangements as are reasonably
necessary to enable such other party to acquire such Elective Shares. Such
arrangements may include having the party that did not want to purchase such
Elective Shares act as the nominee of the other party.
Section 2.2 Pricing Elections. If, pursuant to Section 3(b)(iii)(x),
3(b)(iii)(y)(3)(A) or 3(b)(iii)(y)(4)(B) of the Class A Provisions, the parties
shall be entitled to Fix the Conversion Price of their Class A Preference Stock
at the Target Price, the New Target Price or 93.308% of the New Target Price, as
the case may be, they shall confer in a timely manner and shall make reasonable
efforts to agree on whether or not to exercise such election. If the parties
cannot agree on the action to be taken, they shall not exercise such election.
Section 2.3 Conversion Elections. (a) If, pursuant to Section 3(a)(iii)
of the Class A Provisions, the parties shall be entitled to postpone the
conversion of their Class A Preference Stock into Class A Common Stock, they
shall confer in a timely manner and shall make reasonable efforts to agree on
whether or not to exercise such election. If the parties cannot agree on the
action to be taken, they shall notify the Company that they elect to postpone
the conversion of their Class A Preference Stock.
(b) If, pursuant to Section 3(b)(v) or 7(f)(ii) of the Class A Provisions,
the parties shall be entitled to convert their Class A Preference Stock into
Class A Common Stock or into Common Stock, as the case may be, they shall confer
in a timely manner and shall make reasonable efforts to agree on whether or not
to exercise such election. If the parties cannot agree on the action to be
taken, they shall not exercise such election.
(c) If, pursuant to Section 7(m) of the Class A Provisions, the parties
shall be entitled to convert certain shares of their Class A Preference Stock
into Common Stock, they shall confer in a timely manner and shall make
reasonable efforts to agree on whether or not to exercise such election. If the
parties cannot agree on the action to be taken, each party shall be entitled to
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elect to convert the number of its own such shares as it deems appropriate and
all parties shall join in notifying the Company of each such election.
Section 2.4 Redemption Election. If, pursuant to Section 7(n) of the
Class A Provisions, the parties shall be entitled to request the Company to
redeem their Class A Preference Stock, they shall confer in a timely manner and
shall make reasonable efforts to agree on whether or not to exercise such
election. If the parties cannot agree on the action to be taken, they shall
notify the Company that they elect to have the Company redeem their Class A
Preference Stock.
Section 2.5 Qualified Stock Purchasers. If at any time the parties are
permitted pursuant to the Relevant Documents to assign their rights to purchase
shares to a Qualified Stock Purchaser, then the parties shall confer promptly to
decide whether to assign such rights, and shall make reasonable efforts to agree
on a single Qualified Stock Purchaser to act jointly for both of them. If the
parties cannot agree on such a single Qualified Stock Purchaser or on any of the
material terms relating thereto, they may each proceed independently.
ARTICLE III
PURCHASES OF COMMON STOCK
-------------------------
Section 3.1 Applicability. Until the Minimum Holding Termination Date,
all purchases of Common Stock by the parties from a Person other than the
Company shall be made only as provided in this Article III. The term "Minimum
Holding Termination Date" shall mean the earliest of (i) the date on which the
Transfer Restrictions are terminated pursuant to Section 2.6 of the
Stockholders' Agreement, (ii) the date on which all of the Class A Stock
converts to Common Stock of the Company, and (iii) the tenth anniversary of the
Initial Issuance Date.
Section 3.2 Purchase Allocations. (a) If the Relevant Documents permit
the parties to acquire shares of Common Stock or other Voting Securities of the
Company (other than Class A Stock), then each party shall be entitled to
purchase half of such shares or Voting Securities; provided that, at a time when
one party Beneficially Owns fewer Voting Securities of the Company than the
other party, then the party owning fewer shares shall, notwithstanding anything
in this Agreement or in any Relevant Document, be entitled (but not obligated)
to acquire as many (including all) of such additional shares as shall permit it
to Beneficially Own the same number of Voting Securities of the Company as the
other party after giving effect to the acquisition by both parties (or by such
party, as the case may be) of all
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<PAGE>
such additional shares. If the Relevant Documents specify a number of shares of
Common Stock or other Voting Securities of the Company (other than Class A
Stock) that each party may purchase individually which is different from that
number of such shares determined pursuant to the preceding sentence, then the
parties will make such arrangements as are reasonably necessary to enable each
party to acquire the number of such shares determined pursuant to the preceding
sentence. Such arrangements may include having the party that wants to purchase
fewer such shares act as the nominee of the other party.
(b) Promptly (and, in any event, not later than fifteen days prior to any
notification deadline set forth in the Relevant Documents) after becoming aware
of its right to do so, each party shall notify the other party in writing of the
extent to which it intends to purchase shares of Common Stock in accordance
herewith and with the Relevant Documents. If one party elects to purchase less
than all (including none) of the Common Stock to which it is entitled, then the
other party may elect to purchase all or any number of the shares of Common
Stock which the initial party has indicated it is not interested in purchasing.
The parties shall promptly agree upon a period (the "Market Purchase Period")
within which they plan to purchase the shares of Common Stock they each have
agreed to purchase (the "Market Shares").
Section 3.3 Coordination of Market Purchases. The parties shall establish
a purchasing strategy with respect to all purchases of Market Shares designed to
minimize the market impact of such purchases. To the greatest extent possible,
the parties shall purchase Market Shares jointly in the same transactions and/or
through the same brokers, with the number of shares purchased allocated pro rata
in accordance with the allocation of Market Shares agreed to pursuant to Section
3.2.
ARTICLE IV
GOVERNANCE PROVISIONS
---------------------
Section 4.1 Voting of Securities. (a) Promptly following notice from the
Company that the holders of the Class A Stock may vote on or take any Class A
Action with respect to any issue unrelated to the election of Class A Directors,
the parties shall confer in good faith to come to a common position on how to
vote on or take such Class A Action with respect to such issue. Each party
shall, mindful of its obligation pursuant to Section 7.5(b) of the Stockholders'
Agreement, make reasonable efforts to accommodate, to the greatest extent
practicable and in a manner reasonably satisfactory to each party, the position
of the other party. In the exceptional circumstance that, notwithstanding the
foregoing and after consultation at the highest levels, the parties are unable
to agree upon a common position on such issue,
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<PAGE>
the parties shall abstain from voting on such issue or shall abstain from taking
such Class A Action with respect to such issue, as the case may be.
(b) Following the conversion of all of the Class A Stock into shares of
Common Stock of the Company, each party shall, if so requested by the other
party (i) confer in good faith concerning any issue upon which the Common Stock
shall be entitled to vote, and (ii) make reasonable efforts to come to a common
position if possible on how to vote with respect to such issue.
(c) Each party shall cause its Qualified Subsidiaries to vote the shares of
Class A Stock held by them in accordance with any agreement reached with respect
thereto pursuant to this Section 4.1.
Section 4.2 Mutual Support of Board Nominees. The parties shall confer to
ensure that each of their candidates to the Company's board of directors is
chosen from substantially equivalent levels of management within their
respective organizations. A party may nominate a board candidate from outside
such party's organization only with the consent of the other party. In any
election of Class A Directors by the Class A Holders, each party shall vote its
shares of Class A Stock in support of the candidate or candidates nominated by
the other party.
Section 4.3 Number of Directors. Except as otherwise provided in this
Section 4.3, each of the parties shall be entitled to nominate to the board of
directors of the Company one-half of the total number of Class A Directors that
the holders of Class A Stock have the right to elect. If the number of Class A
Directors is an odd number, then the right to appoint the remaining director
shall rotate between the parties from year to year, with the appointment right
in the first year determined by lot.
Section 4.4 Committee Representation. Each party shall be entitled to
designate one-half of the number of Class A Directors that the holders of Class
A Stock are entitled or permitted to nominate to the Executive Committee and
each other committee of the board of directors of the Company; provided that, if
the holders of Class A Stock are entitled to nominate only one or any other odd
number of directors to a committee, then the right to designate the sole or odd-
numbered director shall alternate in a manner reasonably agreed to by the
parties.
Section 4.5 Replacement of Directors. At the request of one party, the
other party shall vote its shares of Class A Stock to remove the director or
directors nominated by such requesting
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<PAGE>
party, and shall vote its shares of Class A Stock to elect or appoint as
directors any replacements therefor nominated or designated by such requesting
party.
Section 4.6 Stockholder Matters. Except as provided in the following
sentence, each of the parties shall attend all meetings of the stockholders of
the Company either in person (through an authorized officer, employee or agent
of such party) or by proxy. If either party wishes not to attend any such
meeting in person, it shall notify the other party in writing in advance thereof
and shall grant such proxy to the other party (or to its officers, employees or
agents who will be acting for such other party) if such other party so requests.
Nothing in this Section 4.6 shall be construed as limiting the manner in which
any party may vote on any matter, whether in person, by written consent or by
proxy.
Section 4.7 Actions with Respect to Obligations of the Company.
(a) Waivers or Consents. Each party shall promptly notify the other
in writing of its receipt of any request from the Company for a waiver of a
requirement that the Company perform any of its obligations under the
Relevant Documents or for a consent (other than any consent of the nature
referred to in Section 4.1(a)) to any action to be taken by the Company.
If the parties cannot agree on whether to grant such waiver or consent, as
the case may be, such waiver or consent shall not be granted; provided that
either party may grant such a waiver or consent if such waiver or consent
(i) relates to any action, omission or set of facts or circumstances solely
affecting such party, and (ii) would not impair in any manner the rights of
the other party under, or impair in any manner the ability of the other
party to comply with its obligations under, this Agreement or the Relevant
Documents.
(b) Declarations of Breach or Default. Each party shall confer
promptly with the other if it is concerned that the Company (or any related
party) may have breached of any of its (or such related party's)
obligations under the Relevant Documents. If, after such consultations,
the parties cannot agree on whether to declare formally that such a breach
constitutes a default under the Relevant Documents, such declaration shall
not be made; provided that (i) either party may make such a declaration if
such declaration (x) relates to any action, omission or set of facts or
circumstances solely affecting such party, and (y) would not impair in any
manner the rights of the other party under, or impair in any manner the
ability of the other party to comply with its obligations under, this
Agreement or the Relevant Documents, and (ii) nothing in this clause
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<PAGE>
(b) shall estop or otherwise limit the ability of a party to assert by way
of defense or counterclaim that such a breach or default has occurred.
ARTICLE V
LONG DISTANCE ASSETS
--------------------
Section 5.1 Sale of Long Distance Assets. (a) If the parties receive an
LD Sale Notice from the Company pursuant to Section 3.1(c) of the Stockholders'
Agreement, each party shall be entitled to purchase a 50% undivided interest in
the Specified Long Distance Assets subject to such LD Sale Notice. Each party
shall make reasonable efforts to exercise its rights to purchase Specified Long
Distance Assets pursuant to the Relevant Documents.
(b) Within thirty days of its receipt of an LD Sale Notice, each party
shall notify the other party in writing of the amount, if any, of the undivided
interest in such Specified Long Distance Assets such party is willing to
purchase. If one party elects not to purchase the entire undivided interest to
which it is entitled in such Specified Long Distance Assets, then the other
party may purchase all or any portion of the undivided interest therein which
the first party has elected not to purchase.
(c) If, after giving effect to the foregoing, the parties have elected
between them to purchase less than all of the Specified Long Distance Assets,
then the parties shall promptly notify the Company in writing that they shall
not purchase such Specified Long Distance Assets. If, after giving effect to
the foregoing, the parties have elected (or if one party, in accordance with the
foregoing, has elected) to purchase all of such Specified Long Distance Assets,
the parties shall so notify the Company in writing and shall take all actions
necessary to purchase such Specified Long Distance Assets from the Company.
Such actions shall, to the extent necessary or reasonably appropriate, be
performed by each party (whether or not such party is an acquiring party) and
shall include the execution and delivery of such assignments, instruments of
transfer and other instruments as are necessary or reasonably appropriate for
the acquisition of such Specified Long Distance Assets. Each party shall be
responsible for its share (based upon the undivided interest such party has
agreed to purchase) of all costs relating to such purchase.
Section 5.2 Qualified LD Purchasers. (a) If the parties are at any time
permitted to assign their right to purchase Specified Long Distance Assets
described in an LD Sale Notice to a Qualified LD Purchaser, they shall make
reasonable efforts to agree upon a single Qualified LD Purchaser within the LD
Option
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<PAGE>
Period described in Section 3.1(d) of the Stockholders' Agreement. If the
parties shall have selected a single prospective Qualified LD Purchaser to act
for them, they shall notify the Company of their selection.
(b) If the parties cannot agree upon a single Qualified LD Purchaser or
upon any of the material terms relating thereto, then each party may select a
Qualified LD Purchaser to act for it alone; provided that it has first consulted
with the other party and has made reasonable efforts to select a Qualified LD
Purchaser to act for it reasonably acceptable to such other party. If each of
the parties shall have selected a prospective Qualified LD Purchaser to act for
it in accordance with the foregoing sentence, they shall notify the Company of
their selections.
(c) If, after giving effect to the foregoing, the parties are unable to
select a single Qualified LD Purchaser to act for them collectively, or are
unable to select Qualified LD Purchasers to act for them individually, the
parties shall notify the Company of their election not to purchase the Specified
Long Distance Assets described in the LD Sale Notice referred to above.
Section 5.3 Lien Foreclosures. The provisions of this Article V shall
apply, mutatis mutandis, to the parties' exercise of any right to purchase set
forth in Section 3.1(b) of the Stockholders' Agreement arising out of the
foreclosure or other execution upon Long Distance Assets encumbered by a Lien of
the nature referred to in such Section 3.1(b).
ARTICLE VI
SALES OF SHARES
---------------
Section 6.1 Right of First Offer. If either party (the "Selling Party")
proposes at any time to Transfer shares of Class A Stock (or shares of Common
Stock into which shares of Class A Stock have been converted pursuant to the
Articles), other than to one of its Qualified Subsidiaries or to the other party
or one of the other party's Qualified Subsidiaries, the Selling Party shall
deliver a written notice (the "Offer Notice") to the other party (the "Offeree
Party") setting forth in reasonable detail (i) the number of shares proposed to
be Transferred, (ii) the price per share at which such shares are proposed to be
Transferred, and (iii) any other terms and conditions of such offer which are
material. If, within thirty days of its receipt of an Offer Notice, the Offeree
Party has notified the Selling Party of its acceptance thereof, then the Offeree
Party shall be obligated to purchase, and the Selling Party shall be obligated
to sell, all (but not less than all) of the shares offered
-10-
<PAGE>
pursuant to the Offer Notice (or, if less, the maximum number of shares
permitted to be acquired under Section 1.2 hereof) on the terms and conditions
set forth therein (subject, however, to receipt of any required material
Governmental Approvals or Third Party Approvals, compliance with Applicable Law,
and the absence of any injunction or similar legal order prohibiting such
Transfer). If the Offeree Party's purchase of such shares has not been
consummated within 180 days of the date of the Offer Notice relating thereto,
the Selling Party shall be entitled to Transfer such shares to any other Person
on terms no more favorable than those set forth in such Offer Notice.
Section 6.2 Sales of Shares to the Company. If the parties shall be
obligated to sell shares of Class A Stock to the Company pursuant to the
Relevant Documents, they shall confer promptly to decide upon all requisite
terms upon which such sale is to be consummated that may need to be decided by
them. If the parties shall have the right to sell shares of Class A Stock to
the Company pursuant to the Relevant Documents and the Relevant Documents do not
expressly state the number of shares each party may sell to the Company or do
not expressly state some other material term or condition of such sale, the
parties shall confer promptly to decide whether to sell such shares to the
Company and/or to decide upon all requisite additional terms upon which such
sale is to be consummated. If the parties are unable to agree on the terms upon
which to exercise a right to sell shares to the Company, then they shall notify
the Company in writing of their decision not exercise such right.
Section 6.3 Coordination of Market Sales. With respect to all sales by
the parties of Voting Securities of the Company not otherwise covered hereby,
the parties shall make reasonable efforts to agree upon a selling strategy with
respect to such sales designed to minimize the market impact of such sales.
Section 6.4 Registration Rights. Prior to exercising any demand
registration right pursuant to the Registration Rights Agreement, the parties
shall make reasonable efforts to agree on whether to exercise such right
together and, if so, on the timing and the other material terms thereof
(including, if applicable, the selection of a managing or lead underwriter or
underwriters therefor). If either party does not desire to exercise such a
demand registration right at such time and only three or fewer such demands
remain under the Registration Rights Agreement, then the other party may proceed
only with the consent of the former (which consent shall not be unreasonably
delayed or withheld). With respect to each demand registration in which both
parties are participating, the parties shall request the Company to register a
number of shares equal to the sum of the number of shares each party wishes to
register, and any scale-backs or other reductions in the number of shares
registered shall be
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<PAGE>
allocated between the parties pro rata in accordance with their initial
requests. Each party may exercise all incidental registration rights pursuant
to the Registration Rights Agreement independently of the other party.
ARTICLE VII
CHANGE OF CONTROL OF THE COMPANY
--------------------------------
Section 7.1 Joint Action. If the parties shall have the right under the
Relevant Documents to propose any transaction having the goal of obtaining
Control of the Company (a "Control Proposal"), they shall confer promptly to
decide whether (and, if applicable, how) to make such Control Proposal. If both
parties desire to make a Control Proposal, then they must act jointly or not at
all. If one party (the "Bidding Party") desires to make a Control Proposal and
the other party does not, then Bidding Party may proceed only with the consent
of the other party.
Section 7.2 Competing Proposals. Each party hereby agrees, except as
their fiduciary or other statutory duties may otherwise require, not to Transfer
its shares of Class A Stock (or of any Common Stock into which such shares may
be converted pursuant to the Articles) to a Person making a Control Proposal in
competition with any Control Proposal being made by the Bidding Party in
conformity with Section 7.1.
ARTICLE VIII
INDEMNIFICATION
---------------
Section 8.1 Indemnification. Each party (in such capacity, the
"Indemnifying Party") hereby indemnifies, and holds the other party (the
"Indemnified Party") harmless from and against, any and all losses, liabilities,
damages, obligations, deficiencies, payments, costs and expenses (including
without limitation the costs and expenses of any and all actions, suits,
proceedings, demands, assessments, judgments, settlements, and compromises
relating thereto and reasonable attorneys' fees and expenses of investigation in
connection therewith), but excluding indirect, incidental and consequential
damages, damages relating to lost business opportunities and indirect or
intangible losses) (each such non-excluded item an "Indemnifiable Loss")
suffered by the Indemnified Party arising out of, or due to, directly or
indirectly:
(a) any breach of any covenant or agreement to be performed by the
Indemnifying Party under this Agreement;
(b) any breach of any covenant or agreement to be performed by the
Indemnifying Party (whether to be performed
-12-
<PAGE>
alone or jointly with the Indemnified Party) in favor of the Company or any
other Person under any of the Relevant Documents; or
(c) any inaccuracy or other breach of any representation or warranty
made by the Indemnifying Party in favor of the Company or any other Person
under any of the Relevant Documents.
Section 8.2 Additional Provisions. The parties shall cooperate in good
faith regarding the defense, settlement and compromise of any third party claims
and the retention of legal counsel with respect thereto. Any claim with respect
to an Indemnifiable Loss made pursuant hereto shall be asserted in writing by
the Indemnified Party to the Indemnifying Party within 30 days of the
Indemnified Party's discovery of such Indemnifiable Loss. Except as provided in
Section 9.8(c), this Article VIII shall be the sole and exclusive remedy of the
parties with respect to any matter covered by Section 8.1. In addition, the
dispute resolution procedures referred to in Section 9.8(b) shall be the sole
and exclusive means for resolving any dispute between the parties with respect
to any matter covered by Section 8.1.
ARTICLE IX
MISCELLANEOUS
-------------
Section 9.1 Termination. (a) This Agreement shall terminate and be of no
further force and effect on the date of the termination of the Investment
Agreement, in the event that the Investment Agreement is terminated in
accordance with Section 10.1 thereof prior to the occurrence of the First
Closing thereunder.
(b) In addition, after the First Closing under the Investment Agreement,
this Agreement shall terminate and be of no further force and effect on the date
on which neither of the parties shall own any shares of Class A Stock; provided
that:
(i) the provisions of Sections 4.2 through 4.6, inclusive, shall
survive until the date, if later, on which the parties shall have
permanently lost their rights to be represented on the Company's Board of
Directors pursuant to ARTICLE FIFTH of the Articles;
(ii) the provisions of Sections 4.1(b), 6.1, 6.3 and 6.4 shall survive
until the date, if later, which is the earlier of (x) the date on which the
Registration Rights Agreement terminates in accordance with its terms and
(y)
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<PAGE>
the date on which only one of the parties hereto owns any Voting Securities
of the Company; and
(iii) any right or remedy of a party under this Agreement arising
during or relating to periods prior to such termination, including pursuant
to Article VIII, shall survive such termination.
Section 9.2 Notices. All notices and other communications required or
permitted by this Agreement shall be made in writing, and any such notice or
communication shall be deemed delivered when delivered in person (including by
courier), transmitted by telex or facsimile, or seven days after it has been
sent by air mail, as follows:
If to FT:
6 place d'Alleray
75505 Paris Cedex 15
France
Attn: Executive Vice President - International
Tel: (33-1) 4444-1994
Fax: (33-1) 4654-5369
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
If to DT:
Friederich-Ebert-Allee 140
D-53113 Bonn
Germany
Attn: Chief Executive Officer
Tel: (49-228) 181-9000
Fax: (49-228) 181-8970
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<PAGE>
with a copy to:
Mayer, Brown & Platt
2000 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
U.S.A.
Attn: Werner Hein, Esq.
Tel: (202) 778-0726
Fax: (202) 861-0473
The parties to this Agreement shall promptly notify each other in the manner
provided in this Section 9.2 of any change in their respective addresses;
provided that a notice of change of address shall not be deemed to have been
given until actually received by the addressee. Communications by telex or
facsimile also shall be sent concurrently by mail, but shall in any event be
effective as stated above.
Section 9.3 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, each party. 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 9.4 No Partnership. This Agreement is not intended, nor should
anything herein be construed, to create the relationship of partners, principal
and agent, employer and employee, or other fiduciary relationship between the
parties or among the parties and the Company.
Section 9.5 Binding Agreement; Transfers; No Third Party Beneficiaries.
This Agreement will be binding upon and inure to the benefit of the parties
hereto and their successors 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,
other than with respect to Qualified Subsidiaries pursuant to Section 9.7.
Section 9.6 No Assignment of Certain Purchase Rights. No party shall,
without the prior written consent of the other party, assign (other than to its
Qualified Subsidiaries or any Qualified Stock Purchaser or Qualified LD
Purchaser, as the case
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<PAGE>
may be) any right held by it to purchase shares of Class A Stock or other Voting
Securities of the Company or any right held by it to purchase Specified Long
Distance Assets.
Section 9.7 Qualified Subsidiaries. Each party shall cause its Qualified
Subsidiaries to take such action as may be required to ensure such party's
compliance herewith and with the Relevant Documents. To the extent permitted by
the Relevant Documents, each party may assign to any of its Qualified
Subsidiaries any right of such party pursuant to the Relevant Documents to
acquire or dispose of Class A Stock or other Voting Securities of the Company or
Specified Long Distance Assets; provided that such Qualified Subsidiary shall
have executed and delivered an assumption agreement in form and substance
reasonably satisfactory to the other party pursuant to which such Qualified
Subsidiary shall be bound by the terms of this Agreement; and provided, further,
that, notwithstanding the foregoing, the assigning party shall remain liable for
the full and timely performance of all of its obligations hereunder. Each party
agrees to act as agent for each of its Qualified Subsidiaries in connection with
the receipt or giving of any and all notices or approvals under this Agreement
and the Relevant Documents.
Section 9.8 Governing Law; Dispute Resolution; Equitable Relief.
(a) Governing Law. 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) Dispute Resolution. All disputes under and all disagreements as
to the interpretation and effect of this Agreement shall be subject to the
exclusive remedy of arbitration. For purposes hereof, the procedures set
forth in Article 21 of the Joint Venture Agreement shall apply, mutatis
mutandis.
(c) Equitable Relief. Each party agrees that money damages would not
be a sufficient remedy for the other parties hereto for any breach of this
Agreement by it, and that in addition to all other remedies that may be
available to the arbitral tribunal, the arbitral tribunal may order
specific performance and injunctive or other equitable relief as a remedy
for any such breach. Each party agrees not to oppose the granting of such
relief, and to waive any requirement for the securing or posting of any
bond in connection with such remedy.
Section 9.9 Severability. The invalidity or unenforceability of any
provision hereof in any jurisdiction will
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<PAGE>
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 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 9.10 Headings; Counterparts. The headings in this Agreement are
for convenience of reference only and will not affect the construction of any
provision 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 9.11 Entire Agreement. This Agreement, together with the
agreements and instruments referred to herein, embodies the entire agreement and
understanding of the parties hereto in respect of the subject matter contained
herein. This Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter.
Section 9.12 Language of Agreement. The parties have negotiated and
drafted this Agreement and the Memorandum of Understanding, dated June 14, 1994,
among each of the parties hereto and the Company, in the English language, and
have prepared successive drafts and the definitive texts of such Memorandum of
Understanding and this Agreement in the English language. For purposes of
complying with the loi n 94-665 du aout 1994 relative a l'emploi de la langue
francaise, the parties have prepared a French version of the 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.
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<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first above written.
FRANCE TELECOM
By: /s M. Charles Rozmaryn
----------------------------
Name:
Title:
DEUTSCHE TELEKOM AG
By: /s Dr. Ron Sommer
----------------------------
Name:
Title:
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<PAGE>
APPENDIX A
GLOSSARY OF TERMS
Term Where Defined
- ---- -------------
Affiliate Stockholders' Agreement
Agreement Preamble to this Agreement
Amendment Investment Agreement
Applicable Law Stockholders' Agreement
Articles Stockholders' Agreement
Beneficially Own Stockholders' Agreement
Bidding Party Section 7.1 of this Agreement
Bylaws Stockholders' Agreement
Bylaws Amendment Investment Agreement
Class A Action Stockholders' Agreement
Class A Common Stock Investment Agreement
Class A Directors Articles
Class A Preference Stock Investment Agreement
Class A Provisions Articles
Class A Stock Second Recital to this
Agreement
Committed Percentage Stockholders' Agreement
Common Stock Articles
Company First Recital to this Agreement
Conversion Price Articles
Control Proposal Section 7.1 of this Agreement
A-1
<PAGE>
Corporate Documents Third Recital to this Agreement
DT Preamble to the Agreement
Elective Shares Section 2.1 of this Agreement
Fix Articles
FT Preamble to this Agreement
Government Approvals Stockholders' Agreement
Indemnifiable Loss Section 8.1 of this Agreement
Indemnified Party Section 8.1 of this Agreement
Indemnifying Party Section 8.1 of this Agreement
Initial Issuance Date Investment Agreement
Investment Agreement Second Recital to this
Agreement
Investment Completion Date Investment Agreement
Investment Documents Third Recital to this Agreement
Investor Confidentiality Agreement Stockholders' Agreement
Joint Venture Joint Venture Agreement
Joint Venture Agreement First Recital to this Agreement
LD Option Period Stockholders' Agreement
LD Sale Notice Stockholders' Agreement
Market Purchase Period Section 3.2(b) of this
Agreement
Market Shares Section 3.3 of this Agreement
A-2
<PAGE>
Minimum Holding Termination Date Section 3.1 of this Agreement
Offer Notice Section 6.1 of this Agreement
Offeree Party Section 6.1 of this Agreement
Person Stockholders' Agreement
Qualified LD Purchaser Stockholders' Agreement
Qualified Stock Purchaser Stockholders' Agreement
Qualified Subsidiary Stockholders' Agreement
Registration Rights Agreement Stockholders' Agreement
Relevant Documents Third Recital to this Agreement
Rights Agreement Stockholders' Agreement
Selling Party Section 6.1 of this Agreement
Specified Long Distance Assets Stockholders' Agreement
Standstill Agreement Stockholders' Agreement
Stockholders' Agreement Articles
Subsequent Issuance Date Investment Agreement
Third Party Approvals Stockholders' Agreement
Transfer Stockholders' Agreement
Transfer Restrictions Stockholders' Agreement
Voting Power Standstill Agreement
Voting Securities Stockholders' Agreement
A-3
<PAGE>
EXHIBIT 6
- --------------------------------------------------------------------------------
JOINT VENTURE AGREEMENT
DATED AS OF JUNE 22, 1995
AMONG
SPRINT CORPORATION,
SPRINT GLOBAL VENTURE, INC.,
FRANCE TELECOM
AND
DEUTSCHE TELEKOM AG
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
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
</TABLE>
<PAGE>
<TABLE>
<S> <C>
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
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<TABLE>
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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
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<TABLE>
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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
</TABLE>
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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
</TABLE>
<PAGE>
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
<PAGE>
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
<PAGE>
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,
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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
DEFINITIONS AND CONSTRUCTION
Section 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
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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).
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"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
- iv -
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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
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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
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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.
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"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
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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.
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"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.
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"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
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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.
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"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.
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"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
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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
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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.
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"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.
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"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.
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"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;
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(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
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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
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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
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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);
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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 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.
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"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
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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
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<PAGE>
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
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<PAGE>
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 Additional Definitions.
Defined Term Defined in
- ------------ ----------
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<PAGE>
"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)
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"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 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
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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.
-----------------
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.
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:
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(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
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(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:
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(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;
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(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;
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(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
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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
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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
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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
the ROW Territory;
(iii) marketing and delivering in the ROW Territory the products and
services provided by the Global
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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.
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(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.
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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
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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
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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
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(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
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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
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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
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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;
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(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.
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(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.
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(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
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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
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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
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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,
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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
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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.
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(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
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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) 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
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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
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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
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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;
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(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
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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
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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
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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
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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.
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(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.
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(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
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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
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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,
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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.
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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
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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
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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
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Party agrees will not be unreasonably withheld. If any such other Party
withholds its consent to such Investment or Par ticipation, 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
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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
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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
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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,
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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 repre sent more than 5%
of the aggregate voting power of the outstand ing 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.
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(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
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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 Activity"), 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.
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(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
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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
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(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").
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(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
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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.
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(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
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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;
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(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
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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
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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
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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
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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
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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
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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:
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(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
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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
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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
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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
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(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,
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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 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
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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
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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
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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
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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)
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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
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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
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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.
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(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
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(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
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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
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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
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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
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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.
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(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).
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(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
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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
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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
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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
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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.
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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.
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(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.
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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
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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
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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.
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(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
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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:
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(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;
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(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.
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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
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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
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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
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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
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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,
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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.
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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
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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
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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
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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
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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,
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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
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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
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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
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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
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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
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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
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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
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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.
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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
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<PAGE>
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. (S) 1602, et seq. The
- clxv -
<PAGE>
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.
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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.
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<PAGE>
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/ William T. Esrey
------------------------------
Name: William T. Esrey
Title: Chairman and Chief Executive Officer
SPRINT GLOBAL VENTURE, INC.
By: /s/ William T. Esrey
------------------------------
Name: William T. Esrey
Title: President
FRANCE TELECOM
By: /s/ Marcel Roulet
------------------------------
Name: Marcel Roulet
Title: President de France Telecom
DEUTSCH TELEKOM AG
By: /s/ Dr. Ron Sommer
------------------------------
Name: Dr. Ron Sommer
Title: Vorsitzender des Vorstandes
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<PAGE>
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:_____________________________
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<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).
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<PAGE>
AMENDMENT NO. 1 TO
JOINT VENTURE AGREEMENT
-----------------------
THIS AMENDMENT NO. 1 TO JOINT VENTURE AGREEMENT (this "Amendment"), dated
as of January 31, 1996, by and among SPRINT CORPORATION, a Kansas corporation
("Sprint"), SPRINT GLOBAL VENTURE, INC., a Kansas corporation ("Sprint Sub"),
FRANCE TELECOM, an exploitant public formed under the laws of France ("FT"),
DEUTSCHE TELEKOM AG, an Aktiengesellschaft formed under the laws of Germany
("DT"), and ATLAS TELECOMMUNICATIONS S.A., a societe anonyme formed under the
laws of Belgium ("Atlas");
W I T N E S S E T H:
-------------------
WHEREAS, Sprint, Sprint Sub, FT and DT have entered into that certain Joint
Venture Agreement, dated as of June 22, 1995 (the "June 22 JVA"), pursuant to
which Sprint, Sprint Sub, FT and DT agreed to form the Joint Venture to provide
telecommunications services and to pursue various telecommunications
opportunities around the globe;
WHEREAS, Sprint, Sprint Sub, FT and DT wish to amend the June 22 JVA to
reflect certain agreements reached by Sprint, Sprint Sub, FT and DT subsequent
to their entering into the June 22 JVA;
WHEREAS, Atlas wishes to become a Party to the June 22 JVA as amended by
this Amendment; and
WHEREAS, in furtherance of the objectives set forth above, the Parties
desire to enter into this Amendment.
NOW, THEREFORE, in consideration of the premises and the representations,
warranties, covenants and agreements contained herein, in the June 22 JVA 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:
<PAGE>
ARTICLE 1.
DEFINITIONS AND CONSTRUCTION
Section 1.1. Certain Definitions; Interpretation. Capitalized terms used
and not otherwise defined herein shall have the meaning ascribed thereto in the
Joint Venture Agreement. Section 1.3 of the June 22 JVA shall apply to this
Amendment.
ARTICLE 2.
AMENDMENTS; ETC.
Section 2.1. Amendments to Article 1 of the June 22 JVA.
(a) The definition of "Atlas Joint Venture Agreement" contained in
Section 1.1 of the June 22 JVA is amended to read in its entirety as follows:
"'Atlas Joint Venture Agreement' shall mean the Amended and
Restated Joint Venture Agreement between FT and DT dated as of January
22, 1996 relating to the Atlas joint venture between FT and DT."
(b) The definition of "Atlas Joint Venture Documents " contained in
Section 1.1 of the June 22 JVA is amended to read in its entirety as follows:
"'Atlas Joint Venture Documents' shall mean the Atlas Joint
Venture Agreement, the Statuts, the Shareholders Agreement, the DT
Collateral Agreements and the FT Collateral Agreements, as such terms
are defined in the Atlas Joint Venture Agreement, except for the
Intellectual Property Agreement between Transpac S.A. and FT to be
entered into prior to February 29, 1996 pursuant to Article 4.01(d)(2)
of the Atlas Joint Venture Agreement which shall become an FT
Collateral Agreement on the date such agreement is executed."
(c) "Atlas/ROE Services Agreement " shall mean the Atlas/ROE Services
Agreement as defined in Section 3.2.
(d) The definition of "Atlas Transactions" contained in Section 1.1
of the June 22 JVA is amended to read in its entirety as follows:
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"'Atlas Transactions' shall mean the transactions contemplated by
the Atlas Joint Venture Documents to be consummated on or prior to the
'First Closing' (as defined in the Atlas Joint Venture Documents)."
(e) The definition of "GBN Entities" contained in Section 1.1 of the
June 22 JVA is amended to read in its entirety as follows:
"'GBN Entities' shall mean the GBN Parent Entity and all other JV
Entities formed or acquired for the purpose of conducting the GBN
Business."
(f) The definition of "Intellectual Property Agreements" contained in
Section 1.1 of the June 22 JVA is amended to read in its entirety as follows:
"'Intellectual Property Agreements' shall mean the Sprint
Technical Information Contribution Agreement, the Atlas Technical
Information Contribution Agreement, the Trademark Contribution
Agreement between Sprint Sub and ROW Services, L.L.C., the Trademark
Contribution Agreement between DT and ROE Holdco B.V., the Trademark
Contribution Agreement between DT and ROW Holdco B.V., the Trademark
Sale and Assignment Agreement between Sprint International
Communications Corporation and ROE Holdco B.V., the Trademark Sale and
Assignment Agreement between Sprint International Communications
Corporation and ROW Holdco B.V., the Technical Information License and
Access Master Agreement, the JV Trademark License and Master Agreement
and the Trademark License and Master Agreement, in each case to be
mutually agreed to by the Parties and entered into pursuant to Section
15.19."
(g) The definition of "JV Entities" contained in Section 1.1 of the
June 22 JVA is amended to read in its entirety as follows:
"'JV Entity' shall mean the GBN Parent Entity, the ROW Parent
Entity and the ROE Parent Entity, and each other Person formed or
acquired 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
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<PAGE>
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."
(h) The definition of "Restricted Services" contained in Section 1.1
of the June 22 JVA is amended to read in its entirety as follows:
"'Restricted Services' shall mean those services listed on
Schedule 1.1(f)."
(i) The definitions of "ROE Entities" and "ROW Entities" contained in
Section 1.1 of the June 22 JVA are amended to read in their entirety as follows:
"'ROE Entities' shall mean the ROE Parent Entity and all other JV
Entities formed or acquired 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."
"'ROW Entities' shall mean the ROW Parent Entity and all other JV
Entities formed or acquired 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."
(j) The following definition of "Atlas Full Implementation Date" is
inserted in Section 1.1 immediately following the definition of "Assumed
Liabilities:"
" 'Atlas Full Implementation Date' shall mean the date on which
each of FT and DT shall have contributed to Atlas substantially all of
the businesses and assets which it committed to contribute to Atlas at
the Second Closing (as defined in the Atlas Joint Venture Documents),
provided that the fair market value of Atlas immediately following
such contribution is at least equal to ECU 1 billion."
(k) The definitions of "DT Intellectual Property Agreements," "FT
Intellectual Property Agreements" and "Sprint Intellectual Property Agreements"
contained in Section 1.1 of the June 22 JVA are deleted in their entirety.
(l) The last sentence of Section 1.3 of the June 22 JVA is deleted in
its entirety.
Section 2.2. Amendments to Article 2 of the Joint Venture Agreement.
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<PAGE>
(a) Section 2.1(c) of the June 22 JVA is amended to read in its
entirety as follows:
"(c) To the extent provided in the Services Agreements, the
Joint Venture will also be a nonexclusive sales representative or
reseller with respect to the products and services of FT, DT and
Sprint set forth on Schedule 2.1(c)."
(b) Section 2.2(b) of the June 22 JVA is amended to read in its
entirety as follows:
"(b) The Parties also agree that, except as prohibited by
Applicable Law or as otherwise provided in the Operative Agreements:
(1) each of FT and DT and their respective Subsidiaries (other than
Atlas and its Subsidiaries) will be the exclusive distributors of the
JV Services in their respective Home Countries; (2) Sprint and its
Subsidiaries will be the exclusive distributors of the JV Services in
their 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 or its Subsidiaries 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 or its
Subsidiaries in order to permit Atlas or its Subsidiaries to perform
such obligation, it shall cause such product or service to be so made
available to Atlas or its Subsidiaries. Sprint further agrees that if
(x) Sprint Sub or its Subsidiaries 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 or its
Subsidiaries in order to permit Sprint Sub or its Subsidiaries to
perform such obligation, it shall cause such product or service to be
so made available to Sprint Sub or its Subsidiaries."
Section 2.3. Amendments to Article 3 of the Joint Venture Agreement.
Section 3.2 of the June 22 JVA is amended to read in its entirety as follows:
"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,
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<PAGE>
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 shall perform certain
global and regional functions allocated to the ROE Group pursuant to a
services contract to be negotiated by Atlas and the ROE Group and
approved by the Parties (the "Atlas/ROE Services Agreement"). The
Parties agree that in negotiating any such services contract, the
Parties will use the terms set forth in Exhibit 3.2 as the starting
point for such negotiations, to the extent that such terms are
relevant to the structure of the Joint Venture at the time of such
negotiations. 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 2.4. Governance Provisions. In accordance with Sections 15.27,
15.28 and 15.29 of the June 22 JVA, certain of the Parties or their Affiliates
are entering into the Shareholders Agreements concurrently with this Amendment.
In accordance with Section 15.30 of the Joint Venture Agreement, the Parties
have approved the form of the Constituent Documents. The Parties acknowledge
that certain of the provisions contained in the Shareholders Agreements or the
Constituent Documents which implement Articles 4, 5, 6 and 7 and Section 18.1 of
the Joint Venture Agreement are inconsistent with such provisions of the June 22
JVA and agree that the provisions of the Shareholders Agreement and the
Constituent Documents shall, to the extent inconsistent with the provisions of
the June 22 JVA, supersede such provisions of the June 22 JVA.
Section 2.5. Funding Principles. In accordance with Sections 15.27, 15.28
and 15.29 of the Joint Venture Agreement, certain of the Parties or their
Affiliates are entering into the Shareholders Agreements concurrently with this
Amendment. The Parties acknowledge that certain of the provisions contained in
the Shareholders Agreements which implement Sections 8.1, 8.2 and 8.3 and
Article 11 of the Joint Venture Agreement are inconsistent with such provisions
of the June 22 JVA and agree that the provisions of the Shareholders Agreement
shall, to the extent inconsistent with such provisions of the June 22 JVA,
supersede such provisions of the June 22 JVA.
Section 2.6. Tax Matters Agreement. In accordance with Section 15.33 of
the Joint Venture Agreement, the Parties are entering into the Tax Matters
Agreement concurrently with this Amendment. The Parties acknowledge that
certain of the provisions contained in the Tax Matters Agreement are
inconsistent with certain provisions of the June 22 JVA and agree that the
provisions
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<PAGE>
of the Tax Matters Agreement shall, to the extent inconsistent with the
provisions of the June 22 JVA, supersede such provisions of the June 22 JVA.
Section 2.7. Master Transfer Agreement; Employee Matters Agreement;
Intellectual Property Agreements. In accordance with Sections 15.18 and 15.17,
respectively, of the Joint Venture Agreement, the Parties are entering into the
Master Transfer Agreement and the Employee Matters Agreement concurrently with
this Amendment. The Parties acknowledge that certain of the provisions
contained in the Master Transfer Agreement and the Employee Matters Agreement
are inconsistent with Schedule 11.1(a) of the June 22 JVA (e.g. such provisions
do not provide for the transfer of certain assets listed on Schedule 11.1(a))
and that certain provisions of certain Intellectual Property Agreements may be
inconsistent with such Schedule, and agree that the provisions of the Master
Transfer Agreement, the Employee Matters Agreement and such Intellectual
Property Agreements, to the extent inconsistent with Schedule 11.1(a) of the
June 22 JVA, shall supersede Schedule 11.1(a) of the June 22 JVA.
Section 2.8. Amendments to Article 10 of the June 22 JVA.
(a) Section 10.3(a)(i) of the June 22 JVA is amended to read in its
entirety as follows:
"(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 Sections 10.3(c) and (d), any
Party or any of its Affiliates shall remain free to Offer
such national long distance services in any country or
territory within the ROE Territory to the extent permitted
by Applicable Law until and unless the Joint Venture is able
to control (as such term is used within the meaning of
Regulation 4064/89 (OJ L395 of 30.12.1989) on the control of
concentrations between undertakings as of the date hereof)
such Affiliated National Operation or Affiliated Public
Telephone Operator located within such country or territory,
and provided further 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;"
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(b) Section 10.4(d) of the June 22 JVA is amended to read in its
entirety as follows:
"(d) Excluded Businesses. Subject to Section 10.5, the
ownership by a Party (directly or indirectly through an Affiliate) of
any ownership interest in any Excluded Business and the conduct by
such Party or its Affiliate of such Excluded Business with any
Person."
(c) Section 10.4(o) of the June 22 JVA is amended by deleting the
words "on Schedule 10.4(o) hereto" and inserting in their place the words "on a
schedule to the Master Transfer Agreement."
(d) Section 10.4(p) of the June 22 JVA is amended to read in its
entirety as follows:
"(p) Sprint's Businesses in France and Germany. Sprint is
currently negotiating with each of DT and FT regarding a possible sale
of the voice, data, card, and messaging businesses of Sprint and its
Affiliates in France and Germany. The Parties agree that 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. In addition, nothing in Article 10 of this Agreement shall
be construed to prohibit Sprint and its Affiliates from entering into
new customer contracts in connection with such businesses for four (4)
months after Closing in the case of the voice businesses and six (6)
months after Closing in the case of the data and messaging, and card
businesses, provided, however, that such contracts are within the
current scope of business of such businesses. Sprint agrees that it
will sell, divest or wind down such businesses within twelve (12)
months after Closing (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)."
(e) Section 10.5(a) of the June 22 JVA is amended to read in its
entirety as follows:
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"The Parties have agreed upon the scope of each Excluded Business
(the "Approved Scope"), which Approved Scope is set forth on Schedule
10.5(a) hereto. 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."
(f) Section 10.5 of the June 22 JVA is amended by adding a new
Section 10.5(c) as follows:
"(c) Except as otherwise set forth in this Section 10.5(c), it
shall be deemed within the Approved Scope of a Party's Excluded
Business for such Party (directly or indirectly through an Affiliate)
to increase its Investment or Participation in such Excluded Business.
Each Party shall give prior written notice to the Global Venture Board
of any increase in its Investment or Participation in any of its
Excluded Businesses. If as a result of such increase in its
Investment or Participation, the Party (directly or indirectly through
an Affiliate) obtains Control of such Excluded Business (such Excluded
Business after such increase, the "Controlled Excluded Business") and
such business Offers Competing Services or Competing LD Services, such
Party shall use commercially reasonable efforts to cause such
Controlled Excluded Business to enter into an Affiliation Agreement
with the appropriate JV Entity, and the Joint Venture shall negotiate
in good faith to enter into an Affiliation Agreement with such
Controlled Excluded Business, all in accordance with Section 16.8(c),
unless the representatives of the Parties on the Global Venture Board
other than the representative of the Party that controls the
Controlled Excluded Business, in their sole and absolute discretion
shall have not approved the entering into of an Affiliation Agreement
with such Controlled Excluded Business. No Party shall be obligated to
cause any Controlled Excluded Business to enter into an Affiliation
Agreement pursuant to this Agreement if any material element of such
Affiliation Agreement, as contemplated by Section 16.8(c), would
violate either Applicable Law or any material contractual obligations
of the Party with respect to such Controlled Excluded Business. If any
Party fails to perform its obligation to use commercially reasonable
efforts to cause its Controlled Excluded Business to enter into an
Affiliation Agreement with the appropriate JV Entity, such Controlled
Excluded Business shall be deemed to exceed its Approved Scope."
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(g) Section 10.6(b) of the June 22 JVA is amended by inserting the
following language at the end thereof:
"The Parties further confirm that, notwithstanding the foregoing,
this Section 10.6(b) shall not apply to 'FT or DT Products and
Services' as defined in Section V.L. of the Final Judgment filed in
U.S. v. Sprint Corporation, Civ. No. 95-1304 (D.D.C. July 17, 1995),
provided that, for purposes hereof, such FT or DT Products or Services
are agreed to include not only 'leased lines or international half
circuits between the United States and France or between the United
States and Germany' as defined in Subpart V.L(iii) of such Final
Judgment, but also international leased lines or international half
circuits between France or Germany and any other country or
territory."
Section 2.9. GBN Assets. Notwithstanding anything to the contrary
contained in Article 11 of the Joint Venture Agreement, the Master Transfer
Agreement shall not be required to identify the Sprint GBN Assets, FT GBN Assets
or the DT GBN Assets, and the Parties shall not be required to transfer the
Sprint GBN Assets, the FT GBN Assets or the DT GBN Assets to the JV Entities
within the GBN Group or any Regional Operating Group.
Section 2.10. Amendments to Article 12 of the June 22 JVA.
(a) Section 12.1(a) of the June 22 JVA is amended by replacing the
words "Debevoise & Plimpton, 875 Third Avenue" with the words "Mayer, Brown &
Platt, 1675 Broadway."
(b) Section 12.1(b) of the June 22 JVA is amended by deleting clause
(i) thereof.
(c) Section 12.2(g) of the June 22 JVA is deleted in its entirety.
Section 2.11. Governmental Approvals. Each of the Parties hereby waives
those conditions contained in Sections 13.1(a)(i), 13.1(a)(ii), 13.1(a)(iv) and
13.1(a)(vi) to the obligations of such Party and its Affiliates to make their
respective capital contributions described in Section 11.1 and the obligations
of such Party and its 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. Each of the Parties further agrees to take
those actions described in Section 15.2 with respect to the Governmental
Approvals referred to in the previous sentence until such time as such
Governmental Approvals have been obtained.
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<PAGE>
Section 2.12. Business Plans. Each of the Parties hereby irrevocably
waives the condition to the obligations of such Party and its Affiliates to make
their respective capital contributions described in Section 11.1 and the
obligations of such Party and its 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 contained in Section 13.1(e)
that the Closing Business Plans for the Regional Operating Groups be in form and
substance satisfactory to each Party.
Section 2.13. Amendments to Article 13 of the June 22 JVA.
(a) Section 13.1 of the June 22 JVA is amended by adding a new
Section 13.1 (f) as follows:
"(f) National Antitrust Approvals. Notwithstanding anything to
the contrary in this Agreement or in any other Operative Agreement:
(a) the Parties agree that the receipt of any Governmental Approval
under national Applicable Laws relating to antitrust or merger control
(a "National Antitrust Approval") shall not be a condition to the
obligation of any Party and its Affiliates to make their respective
capital contributions described in Section 11.1 and the obligation of
such Party and its 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; and (b) no
representation or warranty to be made on or prior to the Closing Date
by any party to any Operative Agreement in such agreement or any
document to be delivered pursuant thereto shall be deemed to be made
with respect to any National Antitrust Approval."
(b) Section 13.2(h) of the June 22 JVA is deleted in its entirety.
(c) Each of the Parties hereby irrevocably waives its right to assert
a Burdensome Condition resulting from (i) except as set forth in clause (iii)
below, the absence of any Governmental Approvals of the Transactions as of the
Closing Date pursuant to Article 85, or the laws of any member EU country
(including France and Germany) that would otherwise be preempted by the receipt
of a final exemption under Article 85(3) of the Treaty of Rome, (ii) the terms
of FCC Declaratory Ruling and Order No. 95-498 released January 11, 1996 or the
terms of the Final Judgment filed in U.S. v. Sprint Corporation, Civ. No. 95-
1304 (D.D.C. July 17, 1995) or,
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<PAGE>
in each case, any modified terms if such modified terms do not materially
deviate from the original terms thereof, or (iii) the imposition of any
conditions to the receipt of a final exemption under Article 85(3) of the Treaty
of Rome to the extent that such conditions do not materially deviate from those
set forth in the public notice pursuant to Article 19(3) of EC Regulation 17,
published in the Official Journal of the European Communities, OJ No. C 377, 15
December 1995, p. 337/13 (including any conditions agreed to as of the date of
this Amendment by FT, DT or the French or German governments with the EU
authorities in connection with the Transactions or the Atlas Transactions).
Section 2.14. Amendments to Article 15 of the June 22 JVA.
(a) Sections 15.12(c), 15.12(d), 15.12(e), 15.12(f) and 15.12(g) of
the June 22 JVA are deleted in their entirety.
(b) Section 15.13 of the June 22 JVA is amended by deleting the words
"in a manner anticipated by the Tax Matters Agreement" in each place in which
such words appear.
(c) Sections 15.14(b) and 15.14(c) of the June 22 JVA are amended to
read in their entirety as follows:
"(b) Subject to Section 15.14(e), 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 under any other Operative Agreement, and (iii)
cause Atlas and each such Qualified Venture Subsidiary to fulfill
their respective obligations under this Agreement and under any other
Operative Agreement.
(c) Subject to Section 15.14(e), 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 under any other Operative Agreement, and (iii)
cause Atlas and each such Qualified Venture Subsidiary to fulfill
their respective obligations under this Agreement and under any other
Operative Agreement."
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<PAGE>
(d) New Sections 15.14(d), (e) and (f) which shall read in their
entirety as follows are added to the June 22 JVA:
"(d) Atlas agrees with Sprint that it will (i) ensure that Atlas
France, Atlas Germany and each other Subsidiary of Atlas and their
respective personnel are as fully committed to the success of the
Joint Venture as Atlas, (ii) devote sufficient resources to Atlas
France, Atlas Germany and each such other Subsidiary of Atlas so that
they can comply fully with their respective obligations under this
Agreement and under any other Operative Agreement, and (iii) cause
Atlas France, Atlas Germany and each such other Subsidiary of Atlas to
fulfill their respective obligations under this Agreement and under
any other Operative Agreement.
(e) From and after the Atlas Full Implementation Date, the
respective commitments of FT and DT under Sections 15.14(b)(ii) and
(iii) and 15.14(c)(ii) and (iii) shall not apply to: (A) the Atlas
obligations contained in Section 15.14(d)(ii) and (iii) unless the
obligations of Atlas France, Atlas Germany or other Subsidiary of
Atlas are Shareholders Obligations; or (B) the obligations of Atlas or
a Qualified Venture Subsidiary under any other Operative Agreement
unless such obligations are Shareholder Obligations; provided,
however, that: (i) each of FT and DT shall within one (1) year
following such date (and, in any event, prior to the fifth anniversary
of the Closing) give written notice to the Sprint Parties of its
election to proceed under this Section 15.14(e); (ii) from the Closing
Date and until the date of such election, each of FT and DT shall not
have withdrawn, removed or distributed, or permitted Atlas to
withdraw, remove or distribute, whether through dividends,
distributions, loans or otherwise, any of the businesses or assets
that DT or FT were committed to contribute to Atlas in accordance with
the Atlas Joint Venture Documents through the Atlas Full
Implementation Date (other than cash dividends paid out of current or
retained earnings) unless, after giving effect to such withdrawal, the
fair market value of Atlas as of the date of such withdrawal is at
least equal to ECU 1 billion; and (iii) after such election and until
the fifth anniversary of the Closing Date, each of FT and DT shall not
withdraw, remove or distribute, or permit Atlas to withdraw, remove or
distribute, whether through dividends, distributions, loans or
otherwise, any of the businesses or assets that DT or FT were
committed to
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<PAGE>
contribute to Atlas in accordance with the Atlas Joint Venture
Documents through the Atlas Full Implementation Date (other than cash
dividends paid out of current or retained earnings) unless, after
giving effect to such withdrawal, the fair market value of Atlas is at
least equal to ECU 1 billion.
(f) Notwithstanding anything to the contrary in any Operative
Agreement, if a Subsidiary of a Party (a "Transferring Subsidiary") is
a party to any other Operative Agreement and such Subsidiary is
permitted thereunder to assign its rights thereunder to another
Subsidiary of such Party (a "Transferee Subsidiary") without the
consent of the other parties (the "Non-Assigning Parties"), such Party
shall not permit such assignment unless, if requested by any Non-
Assigning Party, such Party enters into a "keepwell" of the Transferee
Subsidiary's obligations under such Operative Agreement in form and
substance reasonably acceptable to such Non-Assigning Party. Upon
agreement on such "keepwell" arrangement, the Non-Assigning Parties
shall release the Transferring Subsidiary of its obligations under
such Operative Agreement. Notwithstanding the foregoing, such Party
shall not be required to enter into such a "keepwell" arrangement and
the Transferring Subsidiary shall have the right to assign its rights
under such Operative Agreement if the Transferee Subsidiary is
otherwise covered by a "keepwell" arrangement pursuant to an Operative
Agreement."
(e) Sections 15.23 and 15.26 of the June 22 JVA are deleted in their
entirety and all references in the Joint Venture Agreement to the Global
Backbone Network Services Agreement and the X.75 Interconnect Management
Agreement are deleted.
(f) Section 15.32 of the June 22 JVA is deleted in its entirety.
(g) Section 15.34 of the June 22 JVA is deleted in its entirety and
all references in the Joint Venture Agreement to the Plan Action/Special Matter
Accounting Principles are deleted.
(h) A new Section 15.35 shall be added to read in its entirety as
follows:
"Section 15.35. Department of Justice Consent Decree. The
Parties hereby agree to take all reasonable actions necessary to cause
the JV Entities (other than ROW Services, L.L.C.) to be bound by that
certain Final Judgment attached as an exhibit to the stipulation
entered into by Sprint, ROW Services, L.L.C. and the United States."
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<PAGE>
Section 2.15. Amendments to Article 16 of the June 22 JVA.
(a) The first sentence of Section 16.8(c) of the June 22 JVA is
amended to read in its entirety as follows:
"(c) Each Affiliation Agreement entered into pursuant to this
Section 16.8 shall, to the extent applicable and permitted by
Applicable Law, be consistent with the principles contained in the
Services Agreements, and shall, as applicable, provide (i) that the
Affiliating Subsidiary, Affiliating Entity, or Controlled Excluded
Business will become a distributor of the services of the Joint
Venture, (ii) that the Affiliating Subsidiary, Affiliating Entity or
Controlled Excluded Business 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, Affiliating Entity, or Controlled Excluded
Business will route its international traffic over the Global Backbone
Network and the networks of the Regional Operating Groups."
(b) Section 16.8(d) of the June 22 JVA is amended by adding at the
end of the last sentence thereof the words "or Section 10.5(c)."
Section 2.16. Amendments to Article 19 of the June 22 JVA.
(a) Section 19.1 of the June 22 JVA is amended by adding, after the
words "Venture Interest" in the third line, the words "held by it, other than
those held by it indirectly through a JV Entity,".
(b) The words "held by a Party, other than those held by such Party
indirectly through a JV Entity," are inserted after the words "Section 19.1" in
the fourth line of Section 19.3 of the June 22 JVA.
(c) The last sentence of Section 19.3(e) is amended to read in its
entirety as follows:
"Upon satisfaction of such conditions, subject to the terms of
the other Operative Agreements, the Transferee Party shall succeed to
all of the rights of the Selling Party under this Agreement and the
other Operative Agreements."
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<PAGE>
Section 2.17. Amendments to Article 20 of the June 22 JVA.
(a) The first sentence of Section 20.5(b) is amended to read in its
entirety as follows:
"Except as provided in Section 20.5(c), 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."
(b) Section 20.5(c) of the June 22 JVA is amended to read in its
entirety as follows:
"(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), or of a failure by the
maker of a True Up Note (as defined in the Master Transfer Agreement)
(a "True Up Default") to pay any amount under such note when due, then
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
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<PAGE>
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) or in the case of a True up Default 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 and,
as applicable, the cure of such Funding Default or Material Non-
Funding Default, the Sprint Parties shall cease to have the Tie-
Breaking Vote; provided, however, that upon the occurrence of 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) under Section 9.1, 9.2, 15.11, 15.12(b),
17.2, 17.3 or 18.1(b) or Article 10 of this Agreement or under any
Article 21.1 Agreement (other than a Material Non-Funding Default by
any such Person under a provision of an Article 21.1 Agreement which
is similar to Section 15.12(e), 15.13, 15.14(c) or 20.2(c) or Article
19 of this Agreement), the consummation by the Non-Defaulting Party of
the purchase of the Venture Interests of the Defaulting European Party
as provided in this Section 20.5(c) shall be treated, without any
further action by such Non-Defaulting
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European Party, as a cure of such Material Non-Funding Default. 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)."
Section 2.18. Amendments to Article 21 of the June 22 JVA. Section 21.1
is amended by adding the following new Section 21.1(g):
"(g) Each of the Parties agrees that the arbitration provisions
of this Article 21 preclude the Parties from commencing proceedings
under Section 592 et seq. of the German, Civil Procedures with respect
to any Dispute and agrees not to initiate any proceedings under such
Section with respect to any Dispute."
Section 2.19. Amendments to Article 22 of the June 22 JVA. Section 22.2
is amended to read in its entirety as follows:
"Section 22.2. Transition Plan. The Parties agree that,
following the occurrence of an event described in Section 22.1, they
will negotiate in good faith to develop a plan (the "Transition
Plan") which will govern the rights and obligations of the parties
under the Operative Agreements. The Transition Plan will be based on
the principles described in Schedule 22.2. 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."
Section 2.20. Amendments to Article 23 of the June 22 JVA.
(a) The address for DT contained in Section 23.1 is amended to read
in its entirety as follows:
"DT: Deutsche Telekom AG
Friedrich-Ebert-Allee 140
D-53113 Bonn
Germany
Attn: Chief Executive Officer
Tel: 011-49-228-181-4000
Fax: 011-49-228-181-8602
(b) The following is added to the end of Section 23.1:
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"Atlas
Telecommunications S.A.: Park Atrium
Rue des Colonies 11
B-1000 Bruxelles
Belgium
Attn: Vice President,
Legal & Regulatory Affairs
Tel: 011-32-2-545-2000
Fax: 011-32-2-545-2005
with a copy to:
Debevoise & Plimpton
21 Avenue George V
75008 Paris
France
Attn: James A. Kiernan III, Esq.
Tel: 011-331-40-73-12-12
Fax: 011-331-47-20-50-82
with a copy to:
Cleary, Gottlieb, Steen & Hamilton
Ulmenstrasse 37-39
60325 Frankfurt am Main
Germany
Attn: Russell Pollack, Esq.
Tel: 011-49-69-971-030
Fax: 011-49-69-971-03199"
(c) Section 23.7 is amended to read in its entirety as follows:
"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 prior communications
between the Parties relating to the subject matter hereof, other than
(i) the side letter dated June 22, 1995, among Sprint, FT and DT
regarding the right of Sprint to elect a member to the Atlas board of
directors and (ii) those written agreements executed and delivered
contemporaneously with the first amendment to this Agreement."
(d) Section 23.14 is amended to read in its entirety as follows:
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<PAGE>
"Section 23.14. Waiver of Immunity. Each of FT, DT and Atlas
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 set-off or counterclaim relating to this Agreement
from the jurisdiction of any competent court, from service of process,
from attachment prior to judgment, from attachment in aid of
execution, from execution pursuant to a judgment or an arbitral award
or from any other legal process in any jurisdiction, it, for itself
and its property, and for each of its Subsidiaries and its property,
expressly, irrevocably and unconditionally waives, and agrees not to
plead or claim any such immunity with respect to matters arising with
respect to this Agreement or the subject matter hereof (including any
obligation for the payment of money). Each of FT, DT and Atlas 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. (S) 1602 et seq. The
foregoing waiver shall constitute a present waiver of immunity at any
time any action is initiated against FT, DT, Atlas or any of their
Subsidiaries with respect to this Agreement."
(e) The first sentence of Section 23.16 is amended to read in its
entirety as follows:
"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,
except for an obligation to make money payments prohibited by action
of a Governmental Authority until the Parties obtain all Governmental
Approvals contemplated by Section 13.1(a)) 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,
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<PAGE>
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."
Section 2.21. Amendments to Schedules to the June 22 JVA.
(a) Schedules 13.1(a)(viii), 14.1(c), 14.2(a)(iii) and 14.3(a)(iii)
are amended to read in their entirety as set forth in the corresponding
schedules to this Amendment.
(b) Schedules 14.2(b)(ii), 14.3(b)(ii), 14.4(c) and 14.4(e) referred
to in Sections 14.2(b)(ii), 14.3(b)(ii), 14.4(c) and 14.4(e) of the June 22 JVA
are attached to this Amendment. The delivery of the foregoing schedules
constitutes satisfaction of the obligations of the FT/DT Parties pursuant to
Section 15.36 of the June 22 JVA, and as of the execution of this Amendment, the
Review Period shall be terminated.
Section 2.22. Amendments to Exhibits to the June 22 JVA. As required by
the EU and agreed by the Parties, paragraph (b) of Section 5 of Exhibit 15.24 is
amended by inserting the following language at the end thereof:
"Notwithstanding the foregoing or anything in Product Supplement
No. 15, the Parties agree that the Phoenix Entities shall not serve as
such non-exclusive sales representatives with respect to
International Private Lines ('IPLs') from FT or DT, but will act,
where appropriate, as a reseller of such IPLs."
ARTICLE 3.
ATLAS SIGNING DATE
Section 3.1. Atlas Signing Date. Atlas hereby acknowledges its agreement
(i) to be bound by the terms of the Joint Venture Agreement as amended by this
Amendment as a "Party" and as an "FT/DT Party" and (ii) to comply with the
obligations imposed by the Joint Venture Agreement as amended by this Amendment
on Atlas and Atlas has caused its respective duly authorized officers to execute
this Amendment as of the date hereof, which date shall be the "Atlas Signing
Date" for purposes of the Joint Venture Agreement. The obligations of FT and DT
pursuant to Section 15.12(b) of the June 22 JVA shall be deemed to be satisfied
in full upon the due execution by Atlas of this Amendment and the Review Period
shall be deemed to have expired.
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<PAGE>
ARTICLE 4.
MISCELLANEOUS
Section 4.1. Miscellaneous. For the avoidance of doubt, the Parties
hereby confirm that (a) Article 23 as amended by this Amendment and (b) Article
21 apply to this Amendment.
Section 4.2. Section Numbering. Sections of the June 22 JVA shall be
renumbered as necessary as a result of this Amendment and references to such
renumbered sections shall be deemed to refer to such sections as renumbered.
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IN WITNESS WHEREOF, Sprint, Sprint Sub, FT, DT and Atlas have caused their
respective duly authorized officers to execute this Amendment as of the day and
year first above written.
SPRINT CORPORATION
By: /s/ Don Jensen
------------------------------
Name: Don Jensen
Title: Secretary
SPRINT GLOBAL VENTURE, INC.
By: /s/ Don Jensen
------------------------------
Name: Don Jensen
Title: Vice President
FRANCE TELECOM
By: /s/ Michel Hirsch
------------------------------
Name: Michel Hirsch
Title: Executive Vice President
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DEUTSCHE TELEKOM AG
By: /s/ Brigitte Lammers
------------------------------
Name: Brigitte Lammers
Title: Attorney-in-fact
ATLAS TELECOMMUNICATIONS S.A.
By:
------------------------------
Name:
Title:
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SCHEDULE 1.1(f)
TO AMENDMENT NO. 1
TO THE JOINT VENTURE AGREEMENT
------------------------------
RESTRICTED SERVICES
-------------------
None
<PAGE>
SCHEDULE 10.5(a)
TO AMENDMENT NO. 1
TO THE JOINT VENTURE AGREEMENT
------------------------------
EXCLUDED BUSINESSES
-------------------
[TO COME]
<PAGE>
SCHEDULE 13.1(a)(viii)
TO AMENDMENT NO. 1
TO THE JOINT VENTURE AGREEMENT
------------------------------
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. 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) pursuant to Article 32 of the Cahier des
Charges of FT, as approved by decret n'90-1213 of December 29, 1990.
2. Prior approval of the proposed investment of Atlas in Atlas France by
the French minister in charge of economic affairs and finance
(ministre charge de l'economie et des finances) for the purpose of
Article 12 of decret n-89-938 of December 29, 1989.
<PAGE>
SCHEDULE 14.1(c)
TO AMENDMENT NO. 1
TO THE JOINT VENTURE AGREEMENT
------------------------------
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 approval of the Bundeskartellamt to carry out the transactions
contemplated by the Atlas Joint Venture Documents.
4. The approval of the Bundeskartellamt to carry out the Transactions.
5. An exemption from the Commission of the European Communities pursuant
to Article 85(3) of the Treaty of Rome exempting the transactions
contemplated by the Atlas Joint Venture Documents from the operation
of Article 85(1) of the Treaty of Rome.
<PAGE>
SCHEDULE 14.2(a)(iii)
TO AMENDMENT NO. 1
TO THE JOINT VENTURE AGREEMENT
------------------------------
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 approval of the Bundeskartellamt to carry out the transactions
contemplated by the Atlas Joint Venture Documents.
4. The approval of the Bundeskartellamt to carry out the Transactions.
5. An exemption from the Commission of the European Communities pursuant
to Article 85(3) of the Treaty of Rome exempting the transactions
contemplated by the Atlas Joint Venture Documents from the operation
of Article 85(1) of the Treaty of Rome.
<PAGE>
SCHEDULE 14.2(b)(ii)
TO AMENDMENT NO. 1
TO THE JOINT VENTURE AGREEMENT
------------------------------
FT GOVERNMENTAL
APPROVALS RELATING TO ATLAS
---------------------------
1. An exemption from the Commission of the European Communities, pursuant
to Article 85(3) of the Treaty of Rome, exempting the Atlas Joint
Venture Documents and the transactions contemplated thereby from the
operation of Article 85(1) of the Treaty of Rome.
2. The approval of the Bundeskartellamt to carry out the transactions
contemplated by the Atlas Joint Venture Documents.
<PAGE>
SCHEDULE 14.3(a)(iii)
TO AMENDMENT NO. 1
TO JOINT VENTURE AGREEMENT
--------------------------
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. The approval of the Bundeskartellamt to carry out the transactions
contemplated by the Atlas Joint Venture Documents.
4. The approval of the Bundeskartellamt to carry out the Transactions.
5. An exemption from the Commission of the European Communities pursuant
to Article 85(3) of the Treaty of Rome exempting the transactions
contemplated by the Atlas Joint Venture Documents from the operation
of Article 85(1) of the Treaty of Rome.
<PAGE>
SCHEDULE 14.3(b)(ii)
TO AMENDMENT NO. 1
TO THE JOINT VENTURE AGREEMENT
------------------------------
DT GOVERNMENTAL
APPROVALS RELATING TO ATLAS
---------------------------
1. An exemption from the Commission of the European Communities, pursuant
to Article 85(3) of the Treaty of Rome, exempting the Atlas Joint
Venture Documents and the transactions contemplated thereby from the
operation of Article 85(1) of the Treaty of Rome.
2. The approval of the Bundeskartellamt to carry out the transactions
contemplated by the Atlas Joint Venture Documents.
<PAGE>
SCHEDULE 14.4(c)
TO AMENDMENT NO. 1
TO THE JOINT VENTURE AGREEMENT
------------------------------
ATLAS GOVERNMENTAL APPROVALS
----------------------------
1. 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.
2. The approval of the Bundeskartellamt to carry out the Transactions.
3. 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.
4. The approval of the Bundeskartellamt to carry out the transactions
contemplated by the Atlas Joint Venture Documents.
5. An exemption from the Commission of the European Communities,
pursuant to Article 85(3) of the Treaty of Rome, exempting the Atlas
Joint Venture Documents and the transactions contemplated thereby from
the operation of Article 85(1) of the Treaty of Rome.
<PAGE>
SCHEDULE 14.4(e)
TO AMENDMENT NO. 1
TO THE JOINT VENTURE AGREEMENT
------------------------------
LITIGATION INVOLVING ATLAS
--------------------------
1. Proceedings in connection with the Governmental Approvals described in
Schedule 14.2(b)(ii), Schedule 14.3(b)(ii) and Schedule 14.4(c).
<PAGE>
SCHEDULE 22.2
TO AMENDMENT NO. 1
TO THE JOINT VENTURE AGREEMENT
------------------------------
TRANSITION PRINCIPLES
---------------------
1. From the date it informs the parties of its decision to withdraw
from the Joint Venture and until the date which is one year after the
date of actual withdrawal from the Joint Venture (such actual date of
withdrawal or other termination of the Joint Venture is herein
referred to as the "Withdrawal Date"), a withdrawing party shall
cooperate fully with the Joint Venture in notifying Joint Venture
customers of the change in the relationship between the Joint Venture
and the withdrawing party provided, however, that no such notification
or public announcement of the withdrawal of a party from the Joint
Venture shall be made until the Withdrawal Date, unless an earlier
announcement shall be required by law or stock market rules. For
purposes of identifying customers under contracts in existence on the
Withdrawal Date, (i) if Sprint is the withdrawing party, customers for
which Sprint is the Distributing Entity will be considered customers
of Sprint with respect to contracts in existence on the Withdrawal
Date, (ii) if FT is the withdrawing party, customers for which FT is
the Distributing Entity will be considered customers of FT with
respect to contracts in existence on the Withdrawal Date, (iii) if DT
is the withdrawing party, customers for which DT is the Distributing
Entity will be considered customers of DT with respect to contracts in
existence on the Withdrawal Date, and (iv) all other customers under
contracts in existence on the Withdrawal Date will be considered
customers of the Joint Venture.
2. At the request of the Joint Venture, for a period of one year after
the Withdrawal Date, the withdrawing party shall continue to support
on a cost reimbursement basis the marketing/sales negotiations of the
Joint Venture that are underway at the time of such withdrawal until
such time as the Joint Venture secures alternative support
capabilities.
3. Article 10 of the JVA (noncompete) shall cease to apply to a
withdrawing party after the Withdrawal Date. During the one-year
period after the Withdrawal Date, the withdrawing party shall not
offer products or services to customers of the Joint Venture in
competition with the Joint Venture or offer products or services in
competition with the Joint Venture to prospective customers of the
<PAGE>
Joint Venture with which the Joint Venture has engaged in confidential
communications or negotiations prior to the Withdrawal Date. In
addition, during such period, neither the Joint Venture nor any non-
withdrawing party shall offer products or services in competition with
the withdrawing party to customers of the withdrawing party. Nothing
in this paragraph 3 shall be deemed to prohibit any activities that
would be permitted under the noncompete provisions of Article 10 of
the JVA were it still in effect during such period. Further, nothing
in this paragraph 3 shall be deemed to prohibit a withdrawing party
from indirectly offering products or services to such customers or
prospective customers of the Joint Venture through another
international telecommunications alliance with which the withdrawing
party becomes associated following its withdrawal from the Joint
Venture; provided, however, that if a party withdraws from the Joint
Venture following its default or bankruptcy, such withdrawing party
shall not be permitted to compete with the Joint Venture through
another international telecommunications alliance during the one-year
period after the Withdrawal Date.
4. The withdrawing party shall continue to support Joint Venture
customers in its home country under contracts of the Joint Venture in
existence on the Withdrawal Date on the same terms and conditions
until the Joint Venture is able to secure alternative support in the
home country of the withdrawing party, but in any event for a period
which shall continue until the earlier of (i) the "pay back" date of
such contracts of the Joint Venture which are supported by the
withdrawing party and (ii) the expiration of such contracts of the
Joint Venture which are supported by the withdrawing party. The
withdrawing party shall also continue to support new sales of Joint
Venture products and services, such support not to continue beyond two
years after the Withdrawal Date. Similarly, the Joint Venture and
each non-withdrawing party shall continue to support the customers of
the withdrawing party under contracts of the withdrawing party in
existence on the Withdrawal Date on the same terms and conditions
until the withdrawing party is able to secure alternative support, but
in any event for a period which shall continue until the earlier of
(i) the "pay back" date of such contracts of the withdrawing party
which are supported by the Joint Venture and (ii) the expiration of
such contracts of the withdrawing party which are supported by the
Joint Venture. The Joint Venture, the withdrawing party and each non-
withdrawing party shall use all commercially reasonable efforts to
secure such alternative support as promptly as practicable after the
Withdrawal Date.
5. The transition rules with respect to trademarks and intellectual
property of a withdrawing party and trademarks and intellectual
property of the Joint Venture
<PAGE>
or the other parties used by the withdrawing party shall be as
provided in the Intellectual Property Agreements.
6. Subject to paragraph 7, all outsourcing, service bureau and similar
service and support contracts between the withdrawing party and the
Joint Venture shall remain in place on the same terms and conditions
at the discretion of the Joint Venture for a period of up to 2 years
after the Withdrawal Date to provide for an orderly and timely
transition, or for such longer period as may be necessary to permit
the Joint Venture to fulfill contracts with customers which are
supported by such outsourcing, service bureau and similar service and
support arrangements, and the withdrawing party shall cooperate at its
own expense during such period in transferring capabilities, processes
and systems to alternative support capabilities.
7. To the extent practicable, the Joint Venture shall have the right to
purchase at fair market value the systems, capital equipment and
other assets of the withdrawing party and, to the extent permitted by
Applicable Law, employ the personnel of the withdrawing party to the
extent that such personnel, systems, capital equipment and other
assets are dedicated substantially to providing support and services
to the Joint Venture under outsourcing or service bureau or similar
service and support contracts.
8. A Plan Action project that can be accounted for separately and that
can be transferred to the Joint Venture under the JVA shall be
considered an integral part of the Joint Venture, and the Joint
Venture shall have the right to buy out the withdrawing party at the
time of the withdrawal of such party from the Joint Venture (within
the same two-year period and on the same terms as would apply to the
buy out rights of a non-Plan Action party with respect to such Plan
Action project) and to integrate the Plan Action project into the
Joint Venture.
9. All Affiliation Agreements between the Joint Venture and operating
companies (such as National Operations and Public Telephone Operators)
in which the withdrawing party may have an equity interest on the
Withdrawal Date shall remain in place in accordance with their terms
and conditions.
10. If only one European party is the withdrawing party, the withdrawing
European party shall have the rights and obligations of the
withdrawing party contained in this Transition Plan. The non-
withdrawing European party shall have the rights and obligations of a
non-withdrawing party contained in this Transition Plan.
<PAGE>
EXHIBIT 7
STOCKHOLDERS' AGREEMENT
Among
FRANCE TELECOM,
DEUTSCHE TELEKOM AG
and
SPRINT CORPORATION
Dated as of January 31, 1996
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C> <C>
Page
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
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
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
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
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
Exhibit A -- Form of Class A Holder Eligible Note
Exhibit B -- Form of Qualified Subsidiary Assumption
Agreement
</TABLE>
<PAGE>
<TABLE>
<S> <C>
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
</TABLE>
<PAGE>
STOCKHOLDERS' AGREEMENT
STOCKHOLDERS' AGREEMENT, dated as of January 31, 1996 (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 Venture, Inc., a wholly-
owned Subsidiary of the Company ("Sprint Sub"), FT and DT have agreed to form a
joint venture to provide telecommunications services as provided in the Joint
Venture Agreement dated as of June 22, 1995, as amended, among Sprint Sub, FT,
DT and the Company (the "Joint Venture Agreement"), and to pursue various
telecommunications opportunities around the world as further provided therein;
WHEREAS, pursuant to the Investment Agreement, dated as of July 31,
1995, as amended, among FT, DT and the Company (including all schedules thereto,
and as may be further amended from time to time, the "Investment Agreement"), FT
and DT collectively 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:
<PAGE>
"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 indirectly, 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
Communications 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 (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.
"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
<PAGE>
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 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 correlative meanings, "Beneficially
Own" and "Beneficial Ownership"), 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, 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 dispose 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 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 thereof),
provided that Class A Stock and Common Stock held by one of FT or
<PAGE>
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" means the board of directors of the Company.
"Brokers' Transactions" means brokers' transactions 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
<PAGE>
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 transaction between the Company and FT and DT
or otherwise involving FT and DT and any of their direct or indirect
Subsidiaries 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
<PAGE>
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 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 such Class A Holder in
accordance 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 Section 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 Fundamental 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.
<PAGE>
"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 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" 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 Agreement.
"Common Stock" means the Common Stock of the Company.
"Company" shall have the meaning set forth in the preamble.
"Company Eligible Notes" means notes of the Company (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
<PAGE>
Section 2.6(b)(ii) hereof, which, in the written opinion of an investment
banking firm of recognized 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 meaning 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 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.
<PAGE>
"Contract" means 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.
"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 otherwise.
"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.
<PAGE>
"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 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.
"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 interests in such entity or (ii) any joint venture
that is
<PAGE>
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 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 Articles 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 associated with the use of such assets prior to
such Transfer and upon commercially reasonable terms to the Company as
determined
<PAGE>
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 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 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 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 Qualified 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;
<PAGE>
(c) Transfers of Long Distance Assets pursuant to an underwritten, widely-
distributed public offering at the conclusion of which the Company 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 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 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 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
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 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
<PAGE>
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 materially and adversely affect the operation
of the Long Distance 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 the
Company or any of its Subsidiaries to any Person in connection with any
contractual arrangement (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 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 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.
<PAGE>
"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 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 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
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.
"FIRPTA Determination" means with respect to any sale, exchange (including
a deemed exchange) or other disposition by a
<PAGE>
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
<PAGE>
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 pursuant to ARTICLE FIFTH of the Articles, and the
rights of the holders of Class A Preference Stock provided in Sections 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, supranational, 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 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.
<PAGE>
"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 respective Subsidiaries, (b) is not a former officer of the Company, 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 the Company, or any Class A
Holder, or their respective 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 Nominating Committee 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 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 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 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 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 the Company shall be
deemed to be an Independent Director hereunder.
<PAGE>
"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, authorization, permit, certificate,
variance, exemption, order, franchise or approval, domestic or foreign.
"Lien" means 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.
"Lien Transfer" shall mean the granting of any Lien on any Long Distance
Asset, other than:
<PAGE>
(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 relating 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" shall have the meaning set forth in the Class A
Provisions.
"Local Exchange Division" means the Local Communications 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 Subsidiaries that are not
reflected in the Company'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 the Company or any of its Subsidiaries to, or reclassified by the
Company or any of its Subsidiaries as part of, the Long Distance Division;
(d) any assets acquired by the Company after December 31, 1994 that are
used or held for use primarily for the benefit of the Long Distance Business;
and
<PAGE>
(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 primarily 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 services 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 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 concluded, in its good faith judgment, will be
such a competitor 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
<PAGE>
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 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 hereto reasonable evidence of
the occurrence of such steps.
"Major Issuance" means 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 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 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 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, condition 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 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 the Company or any
Subsidiary of the Company pursuant to the Joint Venture Agreement; or any
<PAGE>
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 distance telecommunications services of the Company 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 wireless services, whether fixed or mobile, or related
to telecommunications services provided through communications 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 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 Confidentiality Agreement, the DT Investor
Confidentiality
<PAGE>
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
Subsidiary pursuant to the Standstill Agreement or any confidentiality agreement
entered into by a holder of equity interests of a Qualified Subsidiary pursuant
to the FT Investor Confidentiality 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, pension 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 respect 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.
<PAGE>
"Principal Investment Documents" shall have the meaning set forth in
Section 7.10 hereof.
"Private Offer Notice Period" shall have the meaning 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 Governmental 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 effective 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
<PAGE>
reasonable efforts to align the activities of such joint venture with those of
the Joint Venture, including, without limitation, to use commercially reasonable
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
Venture), 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 transmissions
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 disapprove
(and thereby prohibit) decisions relating to acquisitions 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 proposed 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 purchase
shares in accordance with Section 2.2 of the Standstill 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
<PAGE>
Stock Purchaser and the Person or Persons, if any, which, directly or
indirectly, ultimately Control a Qualified 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
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 aggregate, 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 by FT and DT and Wholly-Owned Subsidiaries,
plus Voting Securities, if any, owned by Passive Financial Institutions 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 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
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
"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 hereto.
"Qualified Subsidiary Standstill Agreement" shall have the meaning set
forth in the Investment Agreement.
<PAGE>
"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,
together with any cash to be paid as part of the redemption price pursuant to
subsection (b) 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, 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 Registration 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 Section 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
<PAGE>
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 Exchange 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 Communications 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 promulgated 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 Securities 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.
<PAGE>
"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 business 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 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 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)
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.
"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 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.
"Supervisory Board" means, as the case may be, the
<PAGE>
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, certificate, 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, 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 the Company pursuant
to a merger or other business combination 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 foreclosure or other execution upon any of
the assets of the Company or any of its Subsidiaries other than foreclosures
<PAGE>
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 investments);
(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 provision of such
treaty, or
(e) any other favorable treaty benefit or statutory 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
<PAGE>
the Company 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 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 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 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 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 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
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,
<PAGE>
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 average 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 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
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 restricted 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
<PAGE>
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 Approvals, 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 Subsidiary owns Shares. At least ten days prior to any proposed
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
<PAGE>
(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 Schedule 13D with respect to the Company (a "Schedule 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 purchasers 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
<PAGE>
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 Articles 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 (2) of Section 2.6(a)(v)
shall have occurred) or ten percent (if the events described in clause (1) of
Section 2.6(a)(v) 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 (other than a Qualified
Subsidiary or Subsidiaries or FT or DT) 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 Transferring 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 Period").
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 Stockholder 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 specified in reasonable detail in such notice), compliance with
Applicable Law and the absence of any injunction or similar legal order
preventing such transaction,
<PAGE>
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 Section 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 purchase 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 Approvals 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 Company 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 Transferring 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 Business 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 provided, 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
<PAGE>
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 Stockholder 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 reasonable detail in such Buy Notice), compliance
with Applicable 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 Section 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 Transferring 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 pursuant 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 paragraph (b) and the obligations of the Class A
Holders to make a Second Offer. Any
<PAGE>
Offered Shares which continue to be held by the Transferring Stockholder
following the applicable 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 purchase 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 Notice shall constitute an
offer to the Company or its assignee, as provided below, which is irrevocable
during 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
Private 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 receipt 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 Directors 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
<PAGE>
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 Section 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 Subject Shares within the time period provided in
Section 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 purchase Shares from a purchaser that is not an Eligible
Purchaser (an "Other Purchaser"), prior to such Transferring Stockholder's
accepting such offer, such Transferring 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 receipt 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 preventing 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 Section 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
<PAGE>
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 Directors 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 purchase of the Refusal
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
Refusal Shares to the Other Purchaser at the Refusal 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 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 Company or 180 days after the date
provided in Section 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 Refusal 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 Company or its assignee free and clear of Liens,
(B) deliver to
<PAGE>
the Company or its assignee a certificate 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 substance
reasonably satisfactory to the Company or its assignee, representing that (1)
such Transferring Stockholder is validly existing and has validly authorized
such Transfer, (2) such Transfer 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 deliver to such Transferring
Stockholder an amount (the "Purchase Price") in cash or in cash and securities
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
<PAGE>
principal 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 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-third of the difference between the Purchase Price and $200
million (for purposes of this Section 2.5, the "One-Third Quantity") 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 Company 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 Restrictions; 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 Termination or (y) a
Corporation Joint Venture Termination;
(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
<PAGE>
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 delayed 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 following 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 diligent 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 proceed with a transaction
described in Section 4.1 hereof;
(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
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 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 Articles 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
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 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
<PAGE>
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
Company 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
outstanding 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
pursuant 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, notwithstanding 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 Company 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 Section 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.
<PAGE>
(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 Subsidiaries 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 engaging in,
directly or indirectly, any of the transactions described 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 (including, 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 ("TRANSFERRED") UNLESS AND UNTIL REGISTERED UNDER THE ACT
OR UNLESS SUCH TRANSFER IS EXEMPT FROM REGISTRATION OR IS OTHERWISE IN
COMPLIANCE WITH THE ACT.
<PAGE>
THE TRANSFER OF THE SHARES EVIDENCED BY THIS CERTIFICATE IS SUBJECT TO THE
RESTRICTIONS ON TRANSFER PROVIDED FOR IN THE STOCKHOLDERS' AGREEMENT, DATED
JANUARY 31, 1996, 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 VIOLATION OF SUCH STOCKHOLDERS' AGREEMENT.
THE SHARES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON VOTING
PROVIDED FOR IN THE STOCKHOLDERS' 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 respective 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 Company 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 certificate 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 certificates to be exchanged
for a certificate or certificates that do not bear such
<PAGE>
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 Holder, 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 respect 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 permitted by, and in accordance with, the
terms of this Agreement, and (ii) under no circumstances shall such pledgee be
entitled to exercise voting rights, consent rights or disapproval 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 provisions of this Article II shall apply, to
the fullest extent 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 exercised 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 limitation, in connection with any stock dividends, splits, reverse
splits, combinations, reclassifications, recapitalizations, mergers,
consolidations and the like occurring after the date hereof.
Section 2.10. Strategic Mergers; Business Combinations; Company Tender
for Shares. Notwithstanding anything 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
<PAGE>
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 Committed 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 foregoing, 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 defined 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 modified 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 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 Agreement) following an offer by the Company or Sprint Sub
pursuant to Section 17.2(a) of
<PAGE>
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 transferee 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 accordingly may not proceed
with such Transfer) 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, 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 foreclosure or other execution, such notice to
constitute an exclusive and, subject to Section 3.2, irrevocable
<PAGE>
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
conditions, 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 Creditor shall release such Lien, (y) FT and DT shall
be subrogated 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 obligations 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 documents 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
foreclosure 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 Sections 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 factors, 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
definitive 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
<PAGE>
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 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. 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 disapproval 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 proposed Transfer and notifies each of FT and DT of such
abandonment within thirty Business Days of delivery of an LD Disapproval Notice
(in which case the provisions of this Article 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 Section 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
<PAGE>
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 Qualified 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 thereof, 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 Article 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 Transferred, 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 Section 3.2), the Company may not engage in a transaction involving
substantially identical Long Distance Assets for one year from the date of the
LD Sale Notice. Any such subsequent transaction within a Restricted Period
shall be subject 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
<PAGE>
provided in Section 3.1, the closing of the purchase 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 Governmental
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 delivered 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 requirement 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
scheduled 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)
<PAGE>
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 Percentage of the Class A Holders shall be below ten
percent for more than 180 consecutive days following a Major Issuance, (c) 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 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, 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.
<PAGE>
Section 4.2. Required Share Purchases. If a Person other than FT, DT
or any of their respective Affiliates 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 Section 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 Section 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):
<PAGE>
(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 Percentage 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
<PAGE>
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 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 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, provided 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 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 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,
<PAGE>
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
issuance, 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 contain 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 accordance with the terms thereof or
grants or exercises pursuant to qualified or non-qualified employee benefit
plans, arrangements 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 securities or the adoption of such plans, arrangements and
contracts thirty days prior to the date of such issuance or adoption (such
shares of Common Stock collectively hereinafter 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 Completion 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 Payment. The Class A
Holders may exercise their Equity Purchase 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
<PAGE>
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, certificates 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 Agreement 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
<PAGE>
Holder, or Qualified Stock Purchaser 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 respective 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 Agreement (without regard to Section
2.3 of such agreement), or (b) the number of Voting Securities of the Company
Beneficially Owned in the aggregate by any Qualified Stock Purchaser and its
Affiliates and Associates exceeds the applicable Percentage Limitation as set
forth in the Qualified 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
<PAGE>
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
exceeding such Percentage Limitation applicable to such Class A Holders.
ARTICLE VI
HOLDINGS BY MAJOR COMPETITORS
- -----------------------------
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 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 Strategic
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 Percentage 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 purchase such Shares from the Company if
such Class A Holders assigning such rights to a non-Alien Qualified Stock
Purchaser 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
<PAGE>
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 determined in good faith by the Class A Holders
to be reasonably 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
<PAGE>
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 entitled 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 simultaneously with, any issuance of
Option Shares.
(c) For so long as the Class A Holders are entitled to purchase Shares
pursuant to Section 5.1, subject to subsections (e) and (f) of this Section 7.3,
contemporaneously 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 Section 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 Section 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 representing 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 accordance with the procedures set forth in clause (y),
below) 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 exercising Class
<PAGE>
A Holder, subject to clause (y) below, and (y) simultaneously with such payment,
the Company shall apply such Mandatory Payment Amount to the payment 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 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 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 condition
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 Section
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 terminate upon the conversion of all outstanding shares
of Class A Common Stock or the termination of the Fundamental Rights as to all
outstanding
<PAGE>
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 RELATING TO ALL STOCK, Section 2 of the
Articles, provided that notwithstanding the foregoing, the Company may, after
consultation 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 outstanding 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
<PAGE>
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 measures 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 obtaining 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
<PAGE>
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 Section 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 aggregate 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 certification, 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 Requirements. 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
<PAGE>
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 respect to such properties
is disclosed. Any such exclusion shall be reflected accurately in the minutes of
such deliberations. 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 controlled 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 Issuance
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 applicable) 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,
<PAGE>
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 committing 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 Section 7.8, the Class A Holders shall
automatically and without 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 accurately 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
<PAGE>
Spin-off no less favorable to FT and DT than this Agreement, the Registration
Rights Agreement, the Standstill Agreement, the FT Investor Confidentiality
Agreement and the DT Investor 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 Investment
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 respective 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 securities 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 indirectly, 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
<PAGE>
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
Subsidiaries and Qualified Stock Purchasers.
Section 7.13. Defeasance of Fifth Series. If at any time following
the Initial Issuance Date, the consolidated 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 recent 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 Amendment or the Joint Venture Documents, the Company shall not
hold in the Local Exchange Division, the Cellular and Wireless 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 property not included in the definition
of Long Distance Assets owned or licensed by the Company which is reasonably
necessary 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
<PAGE>
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 Articles 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 involving 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 Completion Date, the aggregate
liquidation value of the Class A Preference Stock
<PAGE>
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 Articles 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 Fundamental 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 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 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
Provisions.
(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 conversion 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 Purchase. If the Company
purchases Shares held by a Class A Holder under Section 2.5 or 7.4 of this
Agreement or Section 2(f) of that portion of ARTICLE SIXTH of the Articles
entitled "GENERAL PROVISIONS RELATING TO ALL STOCK" or Section 3(a) of the Class
A Provisions (a "Company Purchase") in the context where such Sections provide
that such purchase price or redemption price be modified in accordance with this
Article IX and as a result
<PAGE>
thereof such Class A Holder (together with any Class A Holder described in
Section 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 indemnify 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
withholding 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
Supplementary 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 contemplated 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, "Section 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
<PAGE>
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
Unrelated 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 Indemnitee 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
Agreement 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 notifies 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 Company 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
<PAGE>
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 necessary so that such Indemnitee is in the same
after-tax economic position, after taking into account the tax consequences 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 Agreement or Section 3(a) of the Class A
Provisions in an Unrelated 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. Notwithstanding 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 document 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,
<PAGE>
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
negotiations 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
conversion shall be considered held by a Qualified Subsidiary during the period
such Qualified Subsidiary held the Share that was surrendered in connection with
such conversion);
(d) penalties arising solely from actions taken by such Indemnitee in
connection with unrelated transactions; and
(e) the Excess Taxes or Section 9.2 Excess Taxes are imposed on the
Company Purchase, Supplementary Payment or Requested Sale Supplementary Payment
solely because such Indemnitee conducts unrelated activities in the United
States sufficient to cause such Indemnitee to be treated as engaged in a trade
or business in the United States for U.S. federal income tax purposes and such
Indemnitee's income or gain from the Company Purchase, 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 provisions of
this Article with respect to the purchase, Supplementary 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 Payment 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
<PAGE>
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 dispute 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 dispute. 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 Indemnitee 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 limitation, in a preliminary or "30-day"
letter) that such Indemnitee is liable for Excess Taxes or Section 9.2 Excess
Taxes, such Indemnitee shall promptly notify the Company in writing of such fact
and
<PAGE>
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. Internal 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 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 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 connection 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 associated with the employment of such counsel. The provisions
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 Indemnitee. 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
<PAGE>
described in Section 10.3 will be necessary so as to allow for reasonable time
for the performance 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 Article X, to the extent that the Company may make
such representations in its good faith judgment. The Company 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 referred to in Section 10.2, the Company shall,
upon the presentation by the Notifying Class A Holders of a reasonable 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
<PAGE>
thereunder and as tested on the determination dates described in U.S. Treasury
Regulation (S) 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 (S) 1.897-2 (or any successor provision) 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 appropriate 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 refrain 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 severally, 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 collects 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 penalties) 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 Notifying Class A Holder based upon the
opinion provided by such Notifying Class A
<PAGE>
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 Section 10.5 hereof.
(b) If the Company receives written notice from the U.S. Internal Revenue
Service (including, without limitation, in a preliminary or "30-day" letter)
regarding any item for which any Class A Holder may be liable under Section 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 paragraph 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 required to pay any
amounts pursuant to Section 10.5 in excess of the amounts they would have paid
had the Company consented to such settlement
<PAGE>
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
<PAGE>
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
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 11.2. 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, principal 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
<PAGE>
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 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. 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
<PAGE>
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
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.
(c) EACH PARTY HERETO AGREES THAT MONEY DAMAGES WOULD NOT BE A SUFFICIENT
REMEDY FOR THE OTHER PARTIES HERETO FOR ANY BREACH OF THIS AGREEMENT BY IT, AND
THAT IN ADDITION 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 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 hereto
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 this
Agreement to the extent possible.
<PAGE>
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 purposes 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 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.
Section 11.8. Table of Contents; Headings; Counterparts. 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 agreement 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
jurisdiction 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
<PAGE>
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. (P) 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 11.11. Board Membership. (a) FT confirms 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 converted 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 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.
(b) If all of the shares of Class A Common Stock held by a Qualified Stock
Purchaser shall have been converted into Common Stock or if there is a
termination of Fundamental 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
<PAGE>
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 Provisions 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: /s/ Don A. Jensen
---------------------------------
Name: Don A. Jensen
Title: Secretary
FRANCE TELECOM
By: /s/ Henri Chaintreuil
---------------------------------
Name: Henri Chaintreuil
Title: Vice President
<PAGE>
DEUTSCHE TELEKOM AG
By: /s/ Dr. Herbert May
---------------------------------
Name: Dr. Herbert May
Title: Member of the Board of
Management
<PAGE>
EXHIBIT 8
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 entirety 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 business relationships
with public operators, governmental agencies, governmental
instrumentalities, corporations, partnerships and other organizations,
entities or persons (whether domestic or foreign) for the construction,
leasing, ownership, operation and maintenance of telecommunications and
other information transmission
<PAGE>
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 indebtedness 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 entirety 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
<PAGE>
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
Section 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 Holders. (i) Except as
otherwise provided in Sections 7(b), 7(f) and 7(k) of the Class A
Provisions, 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
<PAGE>
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 permitted under Section 310 to be
elected by shareholders 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 Section 7 of the Class A Provisions, (B) the redemption 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 Directors. If at any time the number of Directors that the
Class A Holders have the right to elect pursuant 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
<PAGE>
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 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 as Class A Directors.
(iii) (1) Notwithstanding anything to the contrary in this Section
2, but subject to paragraphs (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) Provisions") 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)
Provisions are, with respect to both FT and DT, either not a
Necessary Condition or not a Sufficient Condition to secure any
Treaty
<PAGE>
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 Condition 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 Benefits 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 Section
2(a)(iii)(1) Provisions shall again become effective.
Notwithstanding any revocation or withdrawal pursuant to the
proviso contained in the immediately preceding 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
<PAGE>
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 Section 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
Corporation with other facts and information reasonably requested by
this Corporation that are reasonably necessary for this Corporation to
determine whether the Section 2(a)(iii)(1) Provisions 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 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).
(4) If FT and DT determine, after the Investment Completion Date, that the
Section 2(a)(iii)(1) Provisions 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
Corporation 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)
<PAGE>
Provisions 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 certificate 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 Directors over (y) the sum
of the number of
<PAGE>
Directors 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 Incorporation. The Class A Holders shall have no right to vote
for Directors under this Section 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 serving as members of the Board of
Directors, including such elected Alien, would constitute 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 practicable, 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.
<PAGE>
(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 directorships 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 maintain 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, disqualification 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 stockholders 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,
<PAGE>
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 Directors under Section 310.
(c) Any additional Director of any class elected to fill a vacancy
resulting from an increase 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
Section 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
<PAGE>
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 Corporation. No Bylaw shall be adopted by stockholders which shall
impair or impede the implementation of the foregoing.
(b) The Board of Directors is expressly authorized 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 Corporation Code or with these Articles of Incorporation,
provided that 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 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 reinstated
for so long as the cause for removal continues 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.
<PAGE>
(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 election to the Board of Directors, an Alien,
subsequently 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 Section 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 outstanding, 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 Directors 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,
<PAGE>
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 Directors under Section
310, 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 Aliens as Directors to the fullest
extent that the Class A Holders are entitled to elect Directors
pursuant to Section 2(a) of this ARTICLE FIFTH without violating the
requirements of Section 310.
(ii) So long as any Class A Stock is outstanding, 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 Directors would not constitute a majority of the Board of
Directors, the total number of Directors shall automatically and
without further action be increased 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 Provisions.
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
<PAGE>
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. Notwithstanding 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-
<PAGE>
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 Stockholder" 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
PROVISIONS 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 subsection (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 November 21, 1995 and within one year prior to
the Redemption Date shall not (unless otherwise determined by the
Board of
<PAGE>
Directors) 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
<PAGE>
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 written 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 redemption, the redemption
price, the place or places of payment and that payment will be made
upon presentation and surrender of the certificates representing 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
Redemption 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 equitable, 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
<PAGE>
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 Investment 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 Completion 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.
<PAGE>
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
Corporation 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 Beneficially 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 response 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 pursuant 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, Beneficially Owned by Aliens.
4. Factual Determinations. The Board of Directors shall have the power
and duty to construe and
<PAGE>
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 definition
of these Articles of Incorporation to the given facts; and (d) any other
matter relating to the applicability or effect of Section 2 of these
GENERAL PROVISIONS 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, Strategic 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
<PAGE>
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, relating 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 PROVISIONS RELATING TO COMMON STOCK:
GENERAL PROVISIONS RELATING TO COMMON STOCK
AND CLASS A STOCK
1. Except as expressly set forth in ARTICLE 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 involuntary liquidation,
dissolution or winding up of this
<PAGE>
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 liquidation, 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 involuntary 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
<PAGE>
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 securities
convertible into or exchangeable for shares of Class A 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
<PAGE>
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 reclassification, subdivision or
combination of the outstanding shares of Class A 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 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 outstanding
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 PROVISIONS 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.
<PAGE>
(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 (including 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
<PAGE>
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 Abandonment)(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 denominator 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
<PAGE>
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 securities 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
<PAGE>
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 nonassessable 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
<PAGE>
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 representing 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-
<PAGE>
poration or in blank, or accompanied by proper instruments of transfer to
this Corporation. This Corporation 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
<PAGE>
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
conversion 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 establish 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
<PAGE>
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
<PAGE>
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
<PAGE>
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 Minimum 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
<PAGE>
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 consecutive 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 (if
the Cellular Spin-off Date shall have not occurred) and 93.308%
of the New Target Price (if the Cellular Spin-off Date shall have
occurred), the first such notice to be effective;
<PAGE>
(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
<PAGE>
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
<PAGE>
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 provided 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,
<PAGE>
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
pursuant 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
<PAGE>
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 Fundamental 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
<PAGE>
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 stockholders 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 outstanding 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 dividends 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 Corporation 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
liquidation, 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 ranking 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-
<PAGE>
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 Subsidiary of this
Corporation to purchase or otherwise acquire for consideration any shares
of stock of this Corporation unless this Corporation could, under Section
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 reasonable 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 Corporation 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
<PAGE>
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 related transactions (other
than Exempt Asset Divestitures or Exempt Long Distance Asset
Divestitures) that results, directly or indirectly, in Transfers
of assets of this Corporation 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 definitive 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 definitive agreement to
effect such Transfer and (y) 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 Transfers);
(ii) any transaction or series of related transactions
(including, without limitation, mergers, purchases of stock or
assets, joint ventures or other acquisitions), but excluding any
transaction constituting an Exempt Asset Divestiture or Exempt
Long Distance Asset Divestiture, resulting, directly or
indirectly, in the acquisition by this Corporation or its
Subsidiaries for cash or
<PAGE>
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 Capitalization
(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
(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), 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
<PAGE>
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 comparable 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 occurrence of a default in
payment of dividends or redemption price, or (c) such rights
described in clause (y) are granted in connection 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, individually or in the aggregate, exceed five
percent of Market Capitalization as at the Business Day
immediately preceding the declaration of the last such dividend
or distribution (other than in connection with transactions
within the meaning of clause (e) of the definition of Exempt
Asset Divestitures or clause (g) of the definition of Exempt Long
Distance Asset Divestitures); or
(v) any merger or other business combination 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 Corporation with a nationally
recognized expertise in
<PAGE>
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 Agreement) 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 direct or indirect
Transfer (other than in connection with an Exempt Long Distance Asset
Divestiture) 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 Subsidiaries since the
Initial Issuance Date (other than in Exempt Long Distance Asset
Divestitures) (calculated in each case as at the date this Corporation
or any such Subsidiary enters into a definitive agreement to effect
each such respective Transfer) exceeds five percent of the Fair Market
Value of the Long Distance Assets of this Corporation and its
Subsidiaries, on a consolidated basis (calculated as at the date this
Corporation or any such Subsidiary enters into a definitive
<PAGE>
agreement to effect the last such Transfer).
(c) Except as otherwise provided in Section 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 (including, 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 combination involving this
Corporation that results directly or indirectly in a Change of
Control, unless the surviving corporation expressly (x) assumes
all of this Corporation'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 otherwise 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 accordance with Articles 17 and 18 of the Joint
Venture Agreement;
(iv) any merger or other business combination 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
<PAGE>
(y) the surviving corporation expressly assumes all
of this Corporation's obligations in respect of the rights
of the Class A Holders granted pursuant to these Articles of
Incorporation 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 anniversary of the Initial
Issuance Date, this Corporation 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.
<PAGE>
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, permission
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 Stockholders' Agreement, this Corporation (or its
successor 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
restrictions, 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 parties 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
<PAGE>
(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
Competitor 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
reasonable 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 Corporation, 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 Fundamental Rights.
-------------------------------------------------------
(a) Failure to Maintain Ownership. If, after the
<PAGE>
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 outstanding, 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 Fundamental 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
<PAGE>
acquisition of Common Stock for purposes of Section 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 Subsidiary Standstill
Agreement, in each case in a Control Context, or otherwise breaches
Sections 3.1(a)(ii), (iii) or (iv) or Section 3.1(g) of the Standstill
Agreement or any corresponding provision of any Qualified Subsidiary
Standstill Agree-
<PAGE>
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 occurred 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
<PAGE>
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 susceptible to cure;
(II) such cure period shall continue only for so long as
each Breaching Holder
<PAGE>
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 Agreement, 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 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 (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 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.
<PAGE>
(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 susceptible 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
Sections 4 (except 4(a)(iii) and 4(c)), 5, 6, 7 and 8 of
<PAGE>
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 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 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.
(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)
<PAGE>
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
<PAGE>
Venture Agreement or (ii) the Joint Venture is otherwise 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 Sections 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
outstanding 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
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 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 Provisions.
(f) Change of Control. If there is a Change of Control within the
meaning of clause (a) of the definition of Change of Control, (i) the
rights provided to the Class A Holders in ARTICLE FIFTH of these Articles
of Incorporation, and Sections 4 (except Sections 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 consummation, this Corporation shall engage in good faith
negotiations with any potential acquiror of Control to provide the Class A
Holders with rights equivalent to
<PAGE>
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 Restrictions 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 Conversion 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, 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 Restrictions 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 nonassessable 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 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) 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
nonassessable 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
<PAGE>
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
consecutive 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
<PAGE>
an acquisition of Common Stock for purposes of Section 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
<PAGE>
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
<PAGE>
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 Conversion Time, upon the
delivery to this Corporation of the certificates formerly representing
Converted Shares, this Corporation shall deliver or cause to be delivered,
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
Converted 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 established, to the satisfaction of this Corporation,
that such tax has been paid.
<PAGE>
(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
Provisions, this Corporation shall not, directly or indirectly, 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 automatically
convert (without the payment of any consideration) into one duly issued,
fully paid and nonassessable 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.
<PAGE>
(ii) Each outstanding share of Class A Common Stock owned by a Qualified
Stock Purchaser shall automatically convert (without the payment of any
consideration) into one duly issued, fully paid and nonassessable 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
Stockholders' Agreement;
(x) such Qualified Stock Purchaser breaches any of the provisions of
Article 2 of the Qualified 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 Section
3.1(g)) or 3.2 of the Qualified Stock Purchaser 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)
<PAGE>
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 Purchaser fails to perform
the actions described in clauses (I) or (II) above within the time periods
<PAGE>
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
<PAGE>
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
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), 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.
(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
practical, but in no event later than the 20th Business Day from the
Breach Notice Date (or, if such
<PAGE>
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; 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).
<PAGE>
(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 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.
(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 context of
efforts by such Qualified Stock Purchaser or any other Person having the
purpose or effect of changing 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 Common Stock issued by this Corporation
pursuant to the Investment Agreement, the Stockholders' Agreement or
<PAGE>
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 and each share of Class A Preference
Stock to be so issued shall automatically convert (without the payment of
any consideration) into duly issued, fully paid and nonassessable shares of
Common Stock based on the number of related Class A Conversion Shares,
provided that such conversion shall not be considered an acquisition of
Common Stock for purposes 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
respective Affiliates for Voting Securities of this Corporation
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 proration, 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
outstanding, 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
automatically convert (without the payment of any consideration) into one
duly issued, fully paid and nonassessable 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,
<PAGE>
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 abandonment 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
<PAGE>
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 Section 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, provided 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 Stockholders' Agreement has occurred and the date of a final,
nonappealable judgment of a court of competent 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
<PAGE>
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 Section 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 electing 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)
<PAGE>
into that number of duly issued, fully paid and nonassessable 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 Section 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 Provisions, 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 Corporation, (c) determines to
effect a merger or other
<PAGE>
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, subdivision 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 combination 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,
restrictions and conditions on such rights contained herein.
(b) Without limiting the generality of the foregoing, 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 reclassification,
conversion, exchange or cancellation of the Common Stock) or any
reclassification of the Common Stock into any other form of capital stock
of this
<PAGE>
Corporation, whether in whole or in part, each Class A Holder shall, after
such consolidation, merger or reclassification, have the right (but not the
obligation), 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 Section 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
<PAGE>
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 accordance with
Kan. Stat. Ann. (S) 17-6003 and (S) 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 certificate shall have the effect of amending these Articles of
Incorporation automatically so as to eliminate 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 entitled 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:
<PAGE>
"Acquisition" shall mean 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.
"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, Controlled by FT, DT or Atlas.
"Alien" shall mean "aliens", "their representatives", "a foreign
government or representatives thereof" or "any corporation organized under
the laws of a
<PAGE>
foreign country" as such terms are used in Section 310(b)(4) of the
Communications Act of 1934, as amended, or as hereafter may be amended, or
any successor 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, 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 to the Stockholders' Agreement
and (b) in the case of DT, any Person occupying any of the positions listed
on Schedule B to the Stockholders' Agreement, 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
<PAGE>
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 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, without limitation, pursuant to the
Investment Agreement and the Stockholders' Agreement, or upon the
exercise of conversion rights,
<PAGE>
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 has
"beneficial ownership" of (as determined pursuant to Rule 13d-3 under
the Exchange Act 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 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.
<PAGE>
"Capitalization Ratio" shall mean 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
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
<PAGE>
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 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 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.
<PAGE>
"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 Incorporation.
"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 Incorporation.
<PAGE>
"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 represented 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 committed 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
<PAGE>
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 agreement, note, bond,
indenture, mortgage, deed of trust, lease, franchise, contract, or other
agreement, obligation, 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 management 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-
<PAGE>
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 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' Agreement, 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
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 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
<PAGE>
(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" 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,
<PAGE>
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 principals 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
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
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
telecommunications 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
<PAGE>
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 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
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 term of such IT Service Contract shall be for a period at
least as
<PAGE>
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 connection with any contractual arrangement (for purposes of this
definition, a "Non-IT Service Contract") pursuant to which such Person
undertakes 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 Corporation, (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 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.
"Exempt Long Distance Asset Divestitures" shall mean, with respect to
this Corporation and its Subsid-
<PAGE>
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 percent;
(c) Transfers of Long Distance Assets pursuant to an underwritten,
widely-distributed public 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 similar financing transactions after which
this Corporation and its Subsidiaries continue in possession 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;
<PAGE>
(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 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 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 this Corporation 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 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 Distance
Business. Any such IT Service Contract involving Transfers of Long
Distance Assets, including any renewal or extension thereof, shall
<PAGE>
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 services to this Corporation 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 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 Distance Assets of
this Corporation, (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 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 extension thereof, shall be deemed to be a Long Distance
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.
<PAGE>
"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
resolution 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 Commission.
"FCC Order" shall mean, with respect to any proposed Transfer of Long
Distance Assets by this Corporation, 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 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
<PAGE>
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
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,
<PAGE>
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, 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.
"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 provided in Sections 4, 5, 6 and 8 of the Class A
Provisions.
"Germany" shall mean the Federal Republic of Germany.
"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, tribunal,
administrative hearing body, arbitration panel, 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.
<PAGE>
"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 Corporation, 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 relationships 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 Corporation, 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
<PAGE>
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
schedules 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 Agreement 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
<PAGE>
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.
"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 relating 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
<PAGE>
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 Corporation'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 reclassified 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
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 this Corporation or any
of its Subsidiaries outside of the Long Distance Division, but which
continue to be owned by this Corpo-
<PAGE>
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 transferred 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
architectures, provided that the term "Long Distance Business" 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 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 this Corporation reasonable evidence of the occurrence of such
steps; (b) with respect to this Corporation, a Person that
<PAGE>
materially competes with a major portion of the telecommunications 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 Provisions.
"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 Corporation with a number of Votes equal to or
greater than 30 percent of the Voting Power of this Corporation immediately
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
<PAGE>
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.
"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
<PAGE>
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 Sprint 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
<PAGE>
$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 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 distance telecommunications services of this Corporation or other
<PAGE>
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 wireless
services, whether fixed or mobile, or related to telecommunications
services provided through communications 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 associated with the Voting Securities of this Corporation
<PAGE>
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 Incorporation.
"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
<PAGE>
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 ARTICLE
SIXTH of these Articles of Incorporation 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 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
Section 3(a)(i) of the Class A Provisions.
"Registration Rights Agreement" shall mean the
<PAGE>
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 Agreement, dated as of August 8,
1989, between this Corporation 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
<PAGE>
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 Stockholders' 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 Stockholders' 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.
<PAGE>
"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 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) 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
<PAGE>
(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
divided 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 Agreement, and shall include any successor provision
thereto.
"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 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" 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
<PAGE>
prohibited by the Class A Provisions, or (d) any foreclosure 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
Corporation; 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 statutory 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 certifies that such benefit is
reasonably
<PAGE>
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 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 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 Telephony
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 arrangement contemplated
thereby, except to the extent relating 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.
<PAGE>
"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 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 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 Agreement 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
<PAGE>
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
Corporation 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 Corporation 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 Provisions 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 Corporation 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 "PREFERRED STOCK-FOURTH
SERIES," the first sentence of the
<PAGE>
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 (hereinafter referred to as a "quarterly
dividend period"), which quarterly dividend periods shall commence on
January 1, April 1, July 1 and October 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 (payable in cash, based upon the
fair market value at the time the non-cash dividend or other
distribution is declared as determined in good faith by the Board of
Directors) of all non-cash dividends or other distributions other than
a dividend payable 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
reclassification 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 entirety 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
<PAGE>
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 agreement in respect thereof shall, except as
hereinafter expressly provided, require the affirmative 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 beneficially owned by such Interested
Securityholder, voting together as a single class (it being understood
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 Incorporation). 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).
<PAGE>
We further certify that thereafter, pursuant to the resolution and in
accordance with the bylaws of this Corporation 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 proposed 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 9
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 Corporation 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
Secretary 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, require the owner of the lost
or destroyed certificate, 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.
<PAGE>
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,
contractually or otherwise, to any such holder, the right to purchase
additional securities of the Corporation.
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 Incorporation, 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
<PAGE>
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 election 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 ARTICLE 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
nominated 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 Independent Directors (as such
term is defined in the Articles of Incorporation of the Corporation). If
the facts warrant, the Chairman of the meeting
<PAGE>
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 nomination 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 Regulation 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 stockholder. 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 executive 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
<PAGE>
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,
whichever 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
meeting, 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 properly 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
Corporation'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 Directors, 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).
<PAGE>
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 entitled to cast one vote for each share of voting stock standing of
record on the books of the Corporation, 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
<PAGE>
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
Directors, 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
business 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:
<PAGE>
SECTION 2. Each Director upon his election shall qualify by filing his
written acceptance with the Secretary or an Assistant Secretary and by
fulfilling 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 Executive Committee or any committee established
pursuant to SECTION 12 of ARTICLE IV (an "Other Committee") 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
meetings 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 otherwise 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 participation in
such meeting by means of such a device shall constitute presence in
person at such meeting. 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
<PAGE>
equipment which allows all persons participating in such meeting to hear
each other, and participation in such meeting by means of such a device
shall constitute presence in person at such meeting.
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 ARTICLE 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 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, 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 Corporation as a director, officer, employee or agent of
another corporation,
<PAGE>
partnership, 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
reasonably believed to be in or not opposed to the best
interests of the Corporation (or such other corporation or
organization), 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 equivalent, 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 reasonable cause to believe that such person's
conduct was unlawful.
(2) Action by or in the Right of the Corporation. 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 Corporation
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 corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees)
actually and
<PAGE>
reasonably incurred by such person in connection with the
defense or settlement 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
determine 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. Notwithstanding, 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 otherwise 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,
employee or agent shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by
such person in connection therewith.
(4) Determination Required. Any indemnification under paragraph (1)
or (2) of this sub-Section (a) (unless ordered by a court)
shall be made by the Corporation only as authorized in the
specific
<PAGE>
case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances
because such director, officer, employee or agent has met the
applicable standard of conduct set forth in said paragraph.
Such determination shall be made (i) by the Board of Directors
by a majority vote of a quorum consisting of directors who were
not parties 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 satisfactory 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
Corporation as authorized in this sub-Section (a).
(b) Insurance. The Corporation may, when authorized 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 venture, 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
<PAGE>
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, common or statutory.
(c) Nonexclusivity; Duration. The indemnifications and rights provided
by, or granted pursuant to, this SECTION 10 shall not be deemed
exclusive of any other indemnifications, 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 insurance set forth in sub-Section (b) shall
likewise not be deemed exclusive.
23. The first paragraph of SECTION 12 of ARTICLE IV of the Bylaws is
hereby renumbered as SECTION 11 and shall be amended to read in its
entirety as follows:
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
<PAGE>
Directors. The Executive Committee between regular meetings of the Board
of Directors shall manage the business and property of the Corporation
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 Incorporation 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 telephone 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 constitute a quorum for the
transaction of business at any meeting for which notice has been given to
all members in accordance with ARTICLE IV, SECTION 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 membership on which by such a director
would be prohibited by any law or by the rules of the New York
<PAGE>
Stock Exchange or (iii) the compensation committee, if the Board of
Directors determines that such a director would not be considered a
"disinterested person" within the meaning of Rule 16b-3(c)(2)(i)
promulgated under the Securities Exchange 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 statutes of Kansas, shall have and may exercise all the
powers and authority of the Board of Directors.
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 President, 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
Secretary, 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 Directors.
All other officers shall be elected by the Board of Directors. All
officers shall hold office 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
<PAGE>
time. The Board of Directors may designate the Chairman of the Board as
the Chief Executive Officer 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 management of the Corporation's
business and affairs between the Chairman of the Board and the President.
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 otherwise 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 office and shall perform such other duties as
are authorized by the Board of Directors. The Chairman of the Board or
the President shall sign contracts, certificates and other instruments of
the Corporation as authorized by the Board of Directors. 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 examination and approval annually; and semi-annually,
or when directed by the Board of Directors, he shall submit to each
director a statement of the
<PAGE>
condition of the business and accounts of the Corporation; and shall
perform all such other duties as are incident to his office. An Assistant
Treasurer, in the absence or inability of the Treasurer, shall perform
all the duties of the Treasurer 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 deleted 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 Directors, 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 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.
