UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D/A-2
Under the Securities Exchange Act of 1934
(Amendment No. 2)
SPRINT CORPORATION
(Name of Issuer)
Common Stock
(Title of Class of Securities)
852061407
(CUSIP Number)
Deutsche Telekom AG, Helmut Reuschenbach,
Senior Executive Director, Finance and Treasurer,
Friedrich-Ebert-Allee 140,
D-53113 Bonn, Germany; Phone (49-228) 181-8000
France Telecom S.A., Pierre Dauvillaire,
Group Executive Vice President, Resources
6 place d'Alleray, 75505 Paris Cedex 15, France
Phone (33-1) 44-44-84-72
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
May 26, 1998
(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(e), 13d-1(f) or 13d- 1(g), check the following box [ ].
Note: Schedules filed in paper format shall include a signed
original and five copies of the schedule, including all exhibits.
See Rule 13d-7(b) 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).
<PAGE>
SCHEDULE 13D
- -----------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Deutsche Telekom AG
IRS Identification Number: N/A
- -----------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [x]
(b) [ ]
- -----------------------------------------------------------------
3 SEC USE ONLY
- -----------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- -----------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
[ ]
- -----------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Germany
- -----------------------------------------------------------------
7 SOLE VOTING POWER
0
NUMBER OF --------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 86,236,036 shares of Class A Common Stock
OWNED BY shares of Common Stock (equivalent in voting
EACH power to 86,236,036 shares of Common Stock
REPORTING --------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 43,118,018 shares of Class A Common Stock
(equivalent in voting power to 43,118,018
shares of Common Stock
--------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- -----------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
86,236,036 shares of Class A Common Stock (equivalent
in voting power to 86,236,036 shares of Common Stock)
- -----------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES*
[ ]
- -----------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
100% of Class A Common Stock. If the Class A Common
Stock is converted to Common Stock, approximately 20.0%
of the Common Stock.
- -----------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- -----------------------------------------------------------------
* SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
- -----------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
France Telecom S.A.
IRS Identification Number: N/A
- -----------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [x]
(b) [ ]
- -----------------------------------------------------------------
3 SEC USE ONLY
- -----------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- -----------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
[ ]
- -----------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
France
- -----------------------------------------------------------------
7 SOLE VOTING POWER
0
NUMBER OF --------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 86,236,036 shares of Class A Common Stock
OWNED BY shares of Common Stock (equivalent in voting
EACH power to 86,236,036 shares of Common Stock
REPORTING --------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 43,118,018 shares of Class A Common Stock
(equivalent in voting power to 43,118,018
shares of Common Stock
--------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- -----------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
86,236,036 shares of Class A Common Stock (equivalent
in voting power to 86,236,036 shares of Common Stock)
- -----------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES*
[ ]
- -----------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
100% of Class A Common Stock. If the Class A Common
Stock is converted to Common Stock, approximately 20.0%
of the Common Stock.
- -----------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- -----------------------------------------------------------------
* 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 $2.50 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 Common Stock (as defined in Item 6 of Amendment No. 1
to the Schedule 13D of May 6, 1996 ("Amendment No. 1") which is
incorporated herein by reference) acquired by the persons filing
this joint statement on April 26, 1996 is convertible into Common
Stock. As of May 26, 1998, the rights of the holders of Class A
Common Stock are proposed to be altered in the manner described
in Item 6 hereof.
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 was
filed as Exhibit 1 to FT's and DT's Schedule 13D filing of
February 12, 1996 (the "Original Schedule 13D Filing") and is
incorporated herein by reference.
1. a. Deutsche Telekom AG ("DT") , an Aktiengesellschaft
formed under the laws of Germany.
b. Friedrich-Ebert-Allee 140, D-53113 Bonn, Germany.
c. DT provides telecommunications services and products.
d. During the last five years, DT has not been convicted
in any criminal proceeding.
e. During the last five years, DT has not been a party to
a civil proceeding of a judicial or administrative
body of competent jurisdiction nor 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 proceeding (excluding traffic violations
or similar misdemeanors) or (b) a party to a civil proceeding of
a judicial or administrative body of competent jurisdiction nor
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.
2. a. France Telecom S.A. ("FT"), a societe anonyme formed
under the laws of France.
b. 6 place d'Alleray, 75505 Paris Cedex 15, France.
<PAGE>
c. FT provides telecommunications services and
products.
d. During the last five years, FT has not been convicted
in any criminal proceeding.
e. During the last five years, FT has not been a party to
a civil proceeding of a judicial or administrative
body of competent jurisdiction nor 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 proceeding (excluding traffic violations
or similar misdemeanors) or (b) a party to a civil proceeding of
a judicial administrative body of competent jurisdiction nor 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.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
Each of FT and DT expects that the funds required to
purchase the shares of a newly created class of common stock of
the Issuer that FT and DT each have agreed to purchase pursuant
to the Master Agreement described in Item 6, subject to the terms
and conditions specified therein, will be provided by internally
generated funds. The obligations of DT and FT under the Master
Agreement to acquire such shares are not conditioned on the
ability of FT or DT to obtain financing therefor.
ITEM 4. PURPOSE OF THE ACQUISITION
DT and FT have entered into the Master Agreement with
the Issuer and the transactions contemplated thereby described in
Item 6 in order to purchase shares of a newly created class of
common stock from the Issuer to maintain their aggregate
percentage voting power in the Issuer's capital stock at the
current aggregate approximate 20% level following the
Transactions described in Item 6.
ITEM 5. NTEREST IN SECURITIES OF THE ISSUER
1. Deutsche Telekom AG
(a) DT is the beneficial owner of 86,236,036 shares of
Class A Common Stock, representing approximately 20.0% of the
voting power of the Issuer, calculated on the basis of the
344,303,011 shares of Common Stock and the 86,236,036 shares of
Class A Common Stock reported in the Form 10-Q Quarterly Report
(the "March 10-Q") filed by the Issuer with the SEC
<PAGE>
for the quarter ended March 31, 1998, as being outstanding at
March 31, 1998. See also Item 6 below.
(b) The rights of DT as a holder of shares of Class A
Common Stock have been or are proposed to be altered by, and are
or are proposed to be subject to, the terms and conditions of the
following agreements, documents and instruments, among others, as
more fully described in Item 6:
i. the Master Restructuring and Investment Agreement,
dated as of May 26, 1998, among the Issuer, FT and DT (the
"Master Agreement");
ii. the Amended and Restated Registration Rights
Agreement to be executed among the Issuer, FT and DT (the
"Amended Registration Rights Agreement");
iii. the Amended and Restated Standstill Agreement to
be executed among the Issuer, FT and DT (the "Amended
Standstill Agreement");
iv. the Top Up Right Agreement, dated as of May 26,
1998, among FT, DT and certain other parties (the "Top Up
Right Agreement");
v. the Amended and Restated Stockholders' Agreement to
be executed among the Issuer, FT and DT (the "Amended
Stockholders' Agreement");
vi. the initial amendments to the Articles of
Incorporation of the Issuer (the "Initial Charter
Amendments"), subject to approval and adoption at a special
meeting of stockholders of the Issuer;
vii. subsequent amendments to the Articles of
Incorporation of the Issuer (the "Subsequent Charter
Amendments", and together with the Initial Charter
Amendments, the "Charter Amendments"), subject to approval
and adoption at a special meeting of stockholders of the
Issuer; and
viii. the amendments to the Bylaws of the Issuer (the
"Bylaws Amendments"), subject to approval and adoption by
the Board of Directors of the Issuer.
(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 Common Stock
owned by DT.
(e) Not applicable.
<PAGE>
2. France Telecom S.A.
(a) FT is the beneficial owner of 86,236,036 shares of
Class A Common Stock, representing approximately 20.0% of the
voting power of the Issuer, calculated on the basis of the number
of shares of Common Stock and Class A Common Stock reported on
the March 10Q. See also Item 6 below.
(b) The rights of FT as a holder of shares of Class A
Common Stock have been or are proposed to be altered by, and are
or are proposed to be subject to, the terms and conditions of the
following agreements, documents and instruments, among others, as
more fully described in Item 6:
i. the Master Agreement;
ii. the Amended Registration Rights Agreement;
iii. the Amended Standstill Agreement;
iv. the Top Up Right Agreement;
v. the Amended Stockholders' Agreement;
vi. the Initial Charter Amendments;
vii. the Subsequent 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 Common Stock
owned by FT.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR
RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER.
The Master Agreement
Pursuant to the terms of the Master Agreement, and
subject to the terms and conditions contained therein, FT and DT
have each agreed to purchase shares of a newly created class of
common stock of the Issuer on the occurrence of certain events.
The Master Agreement is attached hereto as Exhibit 1 and the
description of the Master Agreement is qualified in its entirety
by reference to such exhibit.
<PAGE>
The Master Agreement is designed to enable FT and DT
to maintain an aggregate beneficial ownership of approximately
20% of the voting power of the Issuer after the occurrence of
certain proposed transactions involving the Issuer (the
"Transactions"), including (i) the creation of a new class of
common stock of the Issuer (in three series) reflecting the
financial performance of the Issuer's wireless businesses (the
"PCS Stock"), (ii) an exchange (the "CP Exchange") of Series 2
PCS Stock for certain partnership interests held by certain
investors (the "PCS Investors") in the existing wireless
businesses of the Issuer, which Series 2 PCS Stock will have
one-tenth of the voting power of the other series of PCS Stock;
(iii) a proposed initial public offering (the "IPO") of Series 1
PCS Stock by the Issuer; and (iv) a recapitalization (the
"Recapitalization") of the Issuer in which all outstanding shares
of Common Stock will be exchanged (except as described below in
respect of the Class A Common Stock) for shares of PCS Stock and
shares a new class of common stock reflecting the financial
performance of the Issuer's wireline business (the "FON Stock").
Pursuant to the Master Agreement, FT and DT have agreed to vote,
or cause to be voted, their shares of Class A Common Stock in
favor of each of the transactions contemplated thereby and not to
exercise any disapproval rights in connection therewith.
Pursuant to the Master Agreement, FT and DT have
agreed to, or have the right to, as the case may be, make the
following future acquisitions of shares of capital stock of the
Issuer:
Purchase of Series 3 PCS Stock at the Primary Closing.
A primary closing (the "Primary Closing") will be held on the
earlier of the consummation of the IPO or the Recapitalization.
On the date of the Primary Closing, each of FT and DT would
purchase one-half of the number of shares of Series 3 PCS Stock
sufficient for FT and DT, in the aggregate, to acquire beneficial
ownership of 25% of the aggregate voting power attributable to
the shares of Series 1 PCS Stock, Series 2 PCS Stock and certain
PCS Preferred Stock issued to third parties in the transactions
being consummated on such date, which will include the CP
Exchange.
Purchase of Series 3 PCS Stock at the Secondary
Closing. In the event that the IPO is not consummated at the
Primary Closing, a secondary closing would occur upon the
consummation of the IPO (the "Secondary Closing"). On the date of
the Secondary Closing, each of FT and DT would purchase one-half
of the number of shares of Series 3 PCS Stock sufficient for FT
and DT, in the aggregate, to acquire beneficial ownership of 25%
of the aggregate voting power attributable to the shares of
Series 1 PCS Stock issued to third parties in the IPO and Series
2 PCS Stock issued to the PCS Investors in connection with
purchase rights of the PCS Investors triggered by the IPO.
Purchase of Series 3 PCS Stock at the Greenshoe
Closing. In the event that the underwriters for the IPO exercise
an overallotment option in connection with the IPO (the
"Greenshoe") after the date of either the Primary Closing or the
Secondary Closing, an additional closing will be held (the
"Greenshoe Closing") at which each of FT and DT would purchase
one-half of the number of shares of Series 3 PCS Stock sufficient
for FT and DT, in the aggregate, to acquire beneficial ownership
of 25% of the aggregate voting power attributable to the shares
of
<PAGE>
Series 1 PCS Stock issued to third parties in the Greenshoe and
Series 2 PCS Stock issued to the PCS Investors in connection with
purchase rights of the PCS Investors triggered by the Greenshoe.
Additional Purchases of Series 3 PCS Stock. If the
Issuer issues additional Series 1 PCS Stock after the
Transactions, each of FT and DT will have the right to acquire
additional shares of Series 3 PCS Stock at the issuance price for
45 days thereafter or at the higher of the issuance price and the
current market price for a two-year period. In the event of a
sale by the PCS Investors of Series 2 PCS Shares to a third
party, such shares will automatically convert into Series 1 PCS
Stock with full voting rights, and each of FT and DT will be
entitled to acquire additional shares of PCS Stock from the
Issuer to prevent a resulting dilution in their aggregate voting
power.
Additional Purchases of Series 3 FON Stock. If the
Issuer issues additional Series 1 FON Stock after the
Transactions, FT and DT will have the right to acquire additional
shares of Series 3 FON Stock pursuant to the Amended
Stockholders' Agreement, on substantially the same terms as are
provided in the existing Stockholders' Agreement. In addition, if
additional shares of Series 1 PCS Stock are issued in connection
with a sale by the PCS Investors of Series 2 PCS Stock to a third
party and in certain other circumstances, FT and DT will have the
right to acquire from the Issuer either PCS Stock as described
above or a maximum aggregate amount of $300 million of additional
shares of Series 3 FON Stock subject to certain conditions.
Top Up Right Agreement. Pursuant to the terms of the
Top Up Right Agreement, and subject to the terms and conditions
contained therein, the PCS Investors have granted FT and DT
certain rights to purchase up to 18% of the amount of Series 2
PCS Stock being transferred by the PCS Stock Investors, which
transfers would trigger the conversion of such shares of Series 2
PCS Stock (having one-tenth of the votes per share of the Series
1 PCS Stock) into full voting Series 1 PCS Stock pursuant to the
Articles of Incorporation of the Issuer. The description of the
Top Up Right Agreement contained herein is qualified in its
entirety by reference to the Top Up Right Agreement attached
hereto as Exhibit 4.
Class A Common Stock
Pursuant to the terms of the Master Agreement and the
other agreements referred to therein, and subject to approval and
adoption of the Charter Amendments by the stockholders of the
Issuer, the terms of the Class A Common Stock would be altered as
described below.
Effect of Recapitalization. FT and DT would retain all
Class A Common Stock share certificates held by them prior to the
Recapitalization. Following the Recapitalization, however, the
rights of the remaining outstanding shares of Class A Common
Stock, including the right to vote and receive dividends, would
be based upon the rights of the underlying Series 3 PCS Stock and
Series 3 FON Stock that FT and DT would have received if each
such share of Class A Common Stock had been exchanged. No new
shares of Class A Common Stock will be issued after the
Recapitalization.
Voting Rights. The Class A Common Stock, Series 3 PCS
Stock and Series 3 FON Stock will vote as a class with respect to
the board representation and disapproval rights
<PAGE>
described in Item 6 of Amendment No. 1. In addition to such
rights, it is expected that FT and DT will have the right to
appoint at least one member of the Issuer's Capital Stock
Committee.
Voting Adjustment Provisions. Pursuant to the Charter
Amendments (should the Proposed Charter Amendments be approved
and adopted by the shareholders of the Issuer), if between the
date ten trading days prior to a record date for a dividend
payment or for a stockholder vote, Series 2 PCS Stock or Series 2
FON Stock (having one-tenth of the votes per share of the Series
1 PCS Stock or Series 1 FON Stock, respectively) convert into
Series 1 PCS Stock or Series 1 FON Stock, respectively, or there
occurs an increase in the per share vote of other voting
securities of the Issuer upon transfer, the per share vote of the
Class A Stock will be increased so that the aggregate percentage
voting power of DT and FT will not be diluted as a result of such
conversions or increases in voting power until the date following
the applicable dividend payment date or stockholder vote. These
provisions are designed to afford FT or DT a reasonable period of
time to acquire additional shares of capital stock of the Issuer
to preserve their aggregate percentage voting power in the
Issuer's capital stock.
Dispositions. In the event that after the
Recapitalization, either FT or DT desires to sell certain of its
FON Stock or PCS Stock interests, respectively, represented by
shares of Class A Common Stock, the Issuer will reduce such
interests in proportion to the number of shares sold without
causing an exchange of the outstanding Class A Common Stock
certificates. Upon the transfer of such FON Stock or PCS Stock
interests, respectively, the acquiror would receive shares of
Series 1 FON Stock or Series 1 PCS Stock, as the case may be.
The following amendments to existing agreements and
constituent documents of the Issuer are contemplated by the
Master Agreement:
Registration Rights. The Amended Registration Rights
Agreement will be amended to provide the PCS Investors certain
priorities to register their shares in the event that a limited
number of shares can be included in a registration being effected
on behalf of the PCS Investors, FT, DT and certain other parties.
The description of the Amended Registration Rights Agreement
contained herein is qualified in its entirety by reference to the
Amended Registration Rights Agreement attached hereto as Exhibit
2.
Transfer Restrictions. The transfer restrictions
described in Item 6 of Amendment No. 1 will continue to apply to
the Class A Common Stock and substantially all the Series 3 PCS
Stock acquired by FT and DT pursuant to the Master Agreement,
except that, pursuant to the Amended Stockholders' Agreement,
such transfer restrictions would not apply to certain shares of
PCS Stock acquired by FT and DT pursuant to the Master Agreement
and any shares of Series 3 PCS Stock acquired by FT and DT
pursuant to the equity purchase rights contained in the Amended
Stockholders' Agreement after the date of execution and delivery
thereof to maintain the aggregate beneficial ownership of the
voting power of the Issuer. The description of the amendment to
the transfer restrictions contained herein is qualified in its
entirety by reference to the Amended Stockholders' Agreement
attached hereto as Exhibit 5.
Relative Ownership Ratio. The 60/40 ownership ratio
described in Item 6 of Amendment No. 1 would continue to apply to
FT and DT's ownership of shares of the Issuer on
<PAGE>
an aggregate basis. Pursuant to the Amended Stockholders'
Agreement, however, an 80/20 ownership ratio will be applied to
FT and DT's ownership of each of Series 3 FON Stock and Series 3
PCS Stock. The description of the amendment to the relative
ownership ratio contained herein is qualified in its entirety by
reference to the Amended Stockholders' Agreement attached hereto
as Exhibit 5.
Purchases from the Issuer Prior to a Record Date. In
the event that the applicable anti-fraud rules prohibit DT and FT
from purchasing shares of FON Stock or PCS Stock during the
period of ten trading days beginning the ninth trading day before
a record date for a dividend payment or stockholder vote, each of
DT and FT will have the right, provided that certain conditions
are met, to purchase from the Issuer under the Amended
Stockholders' Agreement a number of shares that, together with
other shares DT and FT then otherwise have the right to purchase
under the Amended Stockholders' Agreement, will allow each of DT
and FT to maintain a 10% percentage voting power in the Issuer's
capital stock. This purchase right will only apply to FT or DT if
FT or DT held a percentage voting power in the Issuer's capital
stock of at least 10% on the most recent previous record date for
a dividend payment or stockholders' vote, and is designed to
permit each of DT and FT to purchase sufficient shares of capital
stock in order to preserve its percentage voting power in the
Issuer's capital stock at 10%.
Standstill Restrictions. The standstill restrictions
described in Item 6 of Amendment No. 1 would continue to restrict
FT and DT's aggregate percentage voting power in the Issuer's
capital stock to 20% until July 31, 2010 (and to 30% thereafter),
subject to certain exceptions and certain other terms and
conditions substantially similar to those contained in the
existing Standstill Agreement. Pursuant to the Amended Standstill
Agreement, however, FT and DT would be permitted to obtain
beneficial ownership of not more than 33% of the voting power of
either the FON Stock or the PCS Stock, subject to the 20% (or,
after July 31, 2010, 30%) aggregate overall voting power
limitation. Subject to the aggregate beneficial ownership
limitations contained in the Amended Standstill Agreement, FT and
DT would be permitted to make purchases of either FON Stock or
PCS Stock in the open market or from third parties (in addition
to their rights to make such purchases from the Issuer under the
Amended Stockholders' Agreement or from the PCS Investors
pursuant to the Top Up Right Agreement or otherwise). The
description of the Amended Standstill Agreement contained herein
is qualified in its entirety by reference to the Amended
Standstill Agreement attached hereto as Exhibit 3.
The forms of the proposed Charter Amendments are
expected to be made publicly available by the Issuer in
connection with the stockholders' meeting to be called to
consider approval thereof.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
All exhibits to this Amendment No. 2 to the Schedule
13D are incorporated by reference to the Original Schedule 13D
Filing filed on behalf of DT and FT on February 12, 1996 and the
Amendment No. 1 to the Schedule 13D filed on behalf of DT and FT
on May 6, 1996.
<PAGE>
Exhibit 1 Master Restructuring and Investment Agreement,
dated as of May 26, 1998, among Sprint
Corporation, France Telecom S.A. and Deutsche
Telekom AG.
Exhibit 2 Form of Amended and Restated Registration Rights
Agreement among Sprint Corporation, France
Telecom S.A. and Deutsche Telekom AG.
Exhibit 3 Form of Amended and Restated Standstill
Agreement among Sprint Corporation, France
Telecom S.A. and Deutsche Telekom AG.
Exhibit 4 Top Up Right Agreement, dated as of May 26,
1998, among France Telecom S.A., Deutsche
Telekom AG, Tele-Communications, Inc., Comcast
Corporation and Cox Communications, Inc.
Exhibit 5 Form of Amended and Restated Stockholders'
Agreement among Sprint Corporation, France
Telecom S.A. and Deutsche Telekom AG.
<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: May 28, 1998 DEUTSCHE TELEKOM AG
By: /s/ Helmut Reuschenbach
-------------------------------
Name: Helmut Reuschenbach
Title: Senior Executive Director
<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: May 28, 1998 FRANCE TELECOM S.A.
By: /s/ Thierry Girard
-------------------------------
Name: Thierry Girard
Title: Senior Vice President
<PAGE>
Schedule I
Directors and Executive Officers of Deutsche Telekom AG
I. The Board of Management
Dr. Ron Sommer
Chairman
Deutsche Telekom AG
Postfach 20 00
53105 Bonn
Detlef Buchal
Deutsche Telekom AG
Postfach 20 00
53105 Bonn
Dr. Hagen Hultzsch
Deutsche Telekom AG
Postfach 20 00
53105 Bonn
Dr. Heinz Klinkhammer
Deutsche Telekom AG
Postfach 20 00
53105 Bonn
Dr. Joachim Kroske
Deutsche Telekom AG
Postfach 20 00
53105 Bonn
Dipl. Ing. Gerd Tenzer
Deutsche Telekom AG
Postfach 20 00
53105 Bonn
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
II. Supervisory Board
Reinhard Ahrensmeier Parlamentarischer Staatssekretar
Chairman of the Central Works Council and Rainer Funke, MdB
Works Council at the Head Office of Member of the German Bundestag,
DeTeSystem and Deutsche Telekom Parliamentary State Secretary
Immobilien und Service GmbH Federal Ministry of Justice
Kaiser-Wilhelm-Ring 4-6 Heinemannstr. 6
48145 Munster 53175 Bonn
Veronika Altmeyer Prof. Dr. Peter Glotz
Member of the Central Executive President of Erfurt University
Committee of the Deutsche Kramerbrucke 9
Postgewerkschaft trade union 99084 Erfurt
Postfach 71 02 38 53113 Bonn
60525 Frankfurt/M.
Gert Becker Dr. Dr. h.c. Klaus Gotte
Former Chairman of the Board of Chairman of the Supervisory Board
Management of Degussa AG of MAN AG
60287 Frankfurt/M. Ungerer Str. 69
80805 Munchen
Helmut Dettmer Dr. sc. techn. Dieter Hundt
Vice Chairman of the Central Works Council Managing Partner of Allgaier Werke GmbH &
at Deutsche Telekon AG Co. KG, President of the National Union of
Friedrich-Ebert-Allee 140 German Employer Associations
53113 Bonn Postfach 40
73062 Ubingen
Josef Falbisoner Dipl. Ing. Franz-Josef Klare
Chairman of the Deutsche Postgewerkschaft Chairman of the Deutsche Postgewerkschaft
trade union, Southern Bavaria District trade union, Munster District
Schwanthaler Str. 64 Lortzingstr. 13
80336 Munich 48145 Munster
<PAGE>
Bundesminster a. D. Prof. Dr. Helmut Sihler
Dr. Ing Paul Kruger, MdB Member of Shareholders' Committee of
Member of the German Bundestag, Vice- Henkel KGaA
Chairman of the CDU/CSU Henkelstr. 67
parliamentary group 40191 Dusseldorf
53113 Bonn
Dr. h.c. Andre Leysen Dr. Jurgen Stark
Chairman of the Supervisory Board State Secretary
of AGFA-GEVAERT N.V. Federal Ministry of Finance
Septe Straat 27 Graurheindorfer Str. 108
B-2640 Mortsel 53117 Bonn
Michael Loffler Ursula Steinke
Chairman of the Works Council at Deutsche Chairwoman of the Works Council at Deutsche
Telekom AG's Branch Office in Leipzig Telekom's Northern District Strategic
Grimmaische Steinweg 9 Computer Center
04103 Leipzig Bunsenstr. 29
24145 Kiel
Maud Pagel Prof. Dr. h.c. Dieter Stolte
Member of the Central Works Council Director General of the Zweites Deutsches
at Deutsche Telekom AG Fernsehen broadcasting organization
Friedrich-Ebert-Allee 140 Postfach 40 40
53113 Bonn 55100 Mainz
Wolfgang Schmitt Wilhelm Wegner
Head of Deutsche Telekom AG's Regional Chairman of the the Central Works Council at
Directorate in Freiburg i.B. Deutsche Telekom AG
Berliner Allee 1 Friedrich-Ebert-Allee 140
79114 Freiburg im Breisgau 53113 Bonn
<PAGE>
Schedule II
Directors and Executive Officers of France Telecom S.A.
I. Board of Directors
Mr. Christophe AGUITON Mr. Pascal COLOMBANI
France Telecom Ministere de l'Education Nationale de la
6 place d'Alleray Recherche et de la Technologie
75505 Paris Cedex 15 110 rue Grenelle
France 75007 Paris
France
Mr. Jean-Paul BECHAT Mr. Jean-Francois DAVOUST
President Directeur General de SNECMA France Telecom
2 Boulevard General Martial Valin 6 place d'Alleray
75015 Paris 75505 Paris Cedex 15
France France
Mr. Christophe BLANCHARD-DIGNAC Mr. Jean-Pierre DELEZENNE
Directeur du Budget France Telecom
Ministere de l'Economic, 6 place d'Alleray
des Finances et de l'Industrie 75505 Paris Cedex 15
Direction du Budget France
139 rue de Bercy
75572 Paris Cedex 12
France
Mr. Michel BON Mr. Yannick d'ESCATHA
President de France Telecom President du Conseil d'Administration du
France Telecom Commissariat a l'Energie Atomique
6 place d'Alleray 31-33 rue de la Federation
75505 Paris Cedex 15 75752 Paris Cedex 15
France France
Mr. Francis BRUN-BUISSON Mr. Jean-Claude DESRAYAUD
Chef du Service Juridique et Technique de France Telecom
l'Information et de la Communication du 6 place d'Alleray
Premier Ministre 75505 Paris Cedex 15
69 rue de Varenne France
75007 Paris
France
<PAGE>
Mr. Raymond DURAND Mr. Didier LOMBARD
France Telecom Directeur General des Strategies Industrielles
6 place d'Alleray au Secretariat d'Etat a l'Industrie
75505 Paris Cedex 15 Ministere de l'Economic, des Finances et de
France l'Industrie
139 rue de Bercy
75572 Paris Cedex 12
France
Mr. Pierre GADONNEIX Mr. Simon NORA
President du Gaz de France Inspecteur General des Finances
23 rue Philibert Delorme
75017 Paris
France
Ms. Nadine GRANDMOUGIN Mr. Pierre PUECH
France Telecom France Telecom
6 place d'Alleray 6 place D'Alleray
75505 Paris Cedex 15 75505 Paris Cedex 15
France France
Mr. Francois GRAPPOTTE Mr. Jean SIMONIN
President Directeur General de LEGRAND Directeur de l'Agence Residentiels de
128 avenue du Marechal de Lattre de Tassigny Toulouse
87045 Limoges Cedex 108 rue de la Peripole
France BP 5856
31506 Toulouse Cedex
France
Mr. Nicolas JACHIET Dr. Ron SOMMER*
Chef du Service des Financements et des Chairman
Participations Deutsche Telekom AG
Minstere de l'Economie, des Finances et de Postfach 20 00
l'Industrie 53105 Bonn
139 rue de Bercy Germany
75572 Paris Cedex 12
France *A citizen of Germany
Mr. Jacques de LAROSIERE
Inspecteur General des Finances
<PAGE>
II. Executive Officers
Mr. Michel BON Mr. Jean-Yves GOUIFFES
Chairman and CEO Network Division
France Telecom France Telecom
6 Place d'Alleray 6 Place d'Alleray
75505 Paris Cedex 15 75505 Paris Cedex 15
France France
Mr. Jacques BURILLON Mr. Gerard MOINE
General Secretary Public Affairs
France Telecom France Telecom
6 Place d'Alleray 6 Place d'Alleray
75505 Paris Cedex 15 75505 Paris Cedex 15
France France
Mr. Jacques CHAMPEAUX Mrs. Marie-Claude PEYRACHE
Large Business Division Corporate Communications
France Telecom France Telecom
6 Place d'Alleray 6 Place d'Alleray
75505 Paris Cedex 15 75505 Paris Cedex 15
France France
Mr. Jean-Jacques DAMLAMIAN Mr. Jean-Francois PONTAL
Development Division Residential Small Business Division
France Telecom France Telecom
6 Place d'Alleray 6 Place d'Alleray
75505 Paris Cedex 15 75505 Paris Cedex 15
France France
Mr. Pierre DAUVILLAIRE
Finance Division
France Telecom
6 Place d'Alleray
75505 Paris Cedex 15
France
</TABLE>
Exhibit 1
- -----------------------------------------------------------------
MASTER RESTRUCTURING AND INVESTMENT AGREEMENT
Among
SPRINT CORPORATION,
FRANCE TELECOM S.A.
and
DEUTSCHE TELEKOM AG
Dated as of May 26, 1998
- -----------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I CLOSINGS; PURCHASE AND SALE OF SHARES..................1
Section 1.1. The Primary Closing......................1
Section 1.2. The Secondary Closing....................3
Section 1.3. The Greenshoe Closing....................4
Section 1.4. Purchase and Sale of Shares at
the Primary Closing......................5
Section 1.5. Purchase and Sale of Shares at
the Secondary and Greenshoe Closings.....6
Section 1.6. Antidilution.............................6
Section 1.7. Reduction of Purchased Shares............7
Section 1.8. Effect of Conversion.....................7
Section 1.9. Relationship of Purchases Under
this Agreement to CP Top Ups.............7
Section 1.10. Effect on Stockholders' Agreement........7
ARTICLE II CONDITIONS TO CLOSINGS.................................7
Section 2.1. Conditions of All Parties to
Primary Closing..........................8
Section 2.2. Sprint's Conditions Precedent to
the Primary Closing......................9
Section 2.3. Conditions Precedent to the
Primary Closing for FT and DT...........10
Section 2.4. Conditions Precedent to
Secondary and Greenshoe Closings
During the Anticipated IPO Period.......12
Section 2.5. Conditions Precedent to Secondary
and Greenshoe Closings After the
Anticipated IPO Period..................14
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SPRINT.............16
Section 3.1. Organization, Qualification, Etc........16
Section 3.2. Capital Stock and Other Matters.........16
Section 3.3. Validity of Shares......................16
Section 3.4. Corporate Authority; No
Violation...............................17
Section 3.5. No Conflict; No Default.................18
Section 3.6. Sprint Reports and Financial
Statements..............................18
Section 3.7. Absence of Certain Changes
or Events...............................19
Section 3.8. Litigation..............................19
Section 3.9. Proxy Statement; Other
Information.............................20
Section 3.10. Certain Tax Matters.....................20
Section 3.11. Amendments to the
Rights Agreement........................20
-i-
<PAGE>
Section 3.12. Other Registration Rights...............21
Section 3.13. Takeover Statutes.......................21
Section 3.14. Vote Required; Board
Recommendation..........................22
Section 3.15. Sprint Board Action.....................22
Section 3.16. King & Spalding Opinion.................22
Section 3.17. PCS Restructuring Agreement.............22
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF
THE BUYERS............................................22
Section 4.1. Representations and Warranties of FT....22
Section 4.2. Representations and Warranties of DT....25
ARTICLE V COVENANTS.............................................27
Section 5.1. Cooperation.............................27
Section 5.2. Certain Actions by Sprint...............29
Section 5.3. IPO Matters.............................31
Section 5.4. Tax Matters.............................31
Section 5.5. Brokers or Finders......................31
Section 5.6. No Action Relating to
Takeover Statutes; Applicability
of Future Statutes and
Regulations.............................32
Section 5.7. Management and Allocation Policies......32
Section 5.8. Sprint Action...........................32
Section 5.9. Standstill Agreement....................32
ARTICLE VI TERMINATION; ABANDONMENT..............................33
Section 6.1. Events of Termination...................33
Section 6.2. Effect of Termination...................34
Section 6.3. Reimbursement of Expenses...............34
Section 6.4. Abandonment of Purchase
and Sale of Capital Stock
at Primary Closing......................34
Section 6.5. Abandonment of Secondary
Closing and Greenshoe Closing...........35
ARTICLE VII MISCELLANEOUS.......................................36
Section 7.1. Survival of Representations
and Warranties..........................36
Section 7.2. Assignment..............................37
Section 7.3. Entire Agreement........................37
Section 7.4. Expenses................................38
Section 7.5. Waiver, Amendment, Etc..................38
Section 7.6. Binding Agreement; No Third
Party Beneficiaries.....................38
-ii-
<PAGE>
Section 7.7. Notices.................................38
Section 7.8. Governing Law; Dispute Resolution;
Equitable Relief........................40
Section 7.9. Severability............................41
Section 7.10. Translation.............................41
Section 7.11. Table of Contents; Headings;
Counterparts............................42
Section 7.12. Waiver of Immunity......................42
Section 7.13. Continuing Director Approval............42
Section 7.15. Currency................................43
ARTICLE VIII DEFINITIONS........................................43
Section 8.1 Certain Definitions.....................43
-iii-
<PAGE>
MASTER RESTRUCTURING AND INVESTMENT AGREEMENT
MASTER RESTRUCTURING AND INVESTMENT AGREEMENT, dated as of
May 26, 1998 (the "Agreement"), among Sprint Corporation, a
corporation organized under the laws of Kansas ("Sprint"); France
Telecom S.A., a societe anonyme formed under the laws of France
("FT"); and Deutsche Telekom AG, an Aktiengesellschaft formed
under the laws of Germany ("DT" and, with FT, the "Buyers").
RECITALS
--------
WHEREAS, Sprint, FT and DT entered into an Investment
Agreement dated as of July 31, 1995, as amended (the "Original
Investment Agreement"), pursuant to which the Buyers purchased
shares of capital stock of Sprint;
WHEREAS, concurrently with the execution and delivery of
this Agreement, Sprint is entering into the PCS Restructuring
Agreement, which provides for, among other things, (i) the CP
Exchange, (ii) the IPO and (iii) the Recapitalization
(capitalized terms used herein but not previously defined have
the meanings set forth in Article VIII of this Agreement); and
WHEREAS, in connection with the transactions contemplated
herein and in the PCS Restructuring Agreement, Sprint and the
Buyers desire to make certain changes to various existing
agreements among the Buyers and Sprint, and the Buyers desire to
purchase certain shares of capital stock from Sprint, all in
accordance with the terms and conditions hereof.
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements set forth herein, each of FT, DT
and Sprint (each a "Party" and collectively the "Parties") agrees
as follows:
ARTICLE I
CLOSINGS; PURCHASE AND SALE OF SHARES
-------------------------------------
Section 1.1. The Primary Closing. The Primary Closing shall
take place at the offices of King & Spalding, 1185 Avenue of the
Americas, New York, New York, at 10:00 a.m. (local time at the
place of the Primary Closing) on the date of the consummation of
the earlier to occur of the IPO or the Recapitalization, as the
case may be, or at such other location or on such other date or
time as the Parties hereto shall agree. On the Primary Closing
Date, (i) the CP Closing will occur, (ii) either the IPO or the
Recapitalization will be consummated, (iii) if the conditions to
Primary Closing specified in Sections 2.1(b) and 2.3(b) are
satisfied or waived prior to the Primary Closing, the purchase
and sale of shares of capital stock of Sprint contemplated by
Section 1.4 shall be consummated, and (iv) the Parties will take
the following actions:
(a) The Initial Charter Amendment and (if the
Recapitalization is to occur on the Primary Closing Date)
the Subsequent Charter Amendment shall be filed with the
Kansas Governmental Authorities.
<PAGE>
(b) Sprint shall deliver to each of FT and DT a copy
of the Bylaw Amendment and the resolutions adopted by
Sprint's Board of Directors in connection with the
transactions contemplated by this Agreement, certified by
the Secretary or an Assistant Secretary of Sprint.
(c) Sprint and the Buyers shall deliver to each other
a certificate to the effect that the representations and
warranties of such Party are accurate in all material
respects on the Primary Closing Date with the same effect
as if made on the Primary Closing Date (except that any
such statements which are expressly made as of a particular
date shall have been accurate as of such particular date
and except to the extent contemplated or permitted by this
Agreement or the PCS Restructuring Agreement).
(d) Sprint and the Buyers shall deliver to each other
a certificate that the covenants and agreements contained
herein that are required to be performed by such Party on
or prior to the Primary Closing have been performed in all
material respects.
(e) if the conditions to the Primary Closing specified
in Sections 2.1(b) and 2.3(b) are satisfied or waived prior
to the Primary Closing, certificates representing the
shares of Series 3 PCS Stock to be issued to FT at the
Primary Closing shall be delivered by Sprint to FT.
(f) if the conditions to the Primary Closing specified
in Sections 2.1(b) and 2.3(b) are satisfied or waived prior
to the Primary Closing, certificates representing the
shares of Series 3 PCS Stock to be issued to DT at the
Primary Closing shall be delivered by Sprint to DT.
(g) if the conditions to the Primary Closing specified
in Sections 2.1(b) and 2.3(b) are satisfied or waived prior
to the Primary Closing, cash (or, if the IPO does not occur
on the Primary Closing Date, Top Up Notes or a combination
of cash and Top Up Notes) in the amount of one-half of the
purchase price for the shares of Series 3 PCS Stock being
purchased by FT and DT on the Primary Closing Date shall be
delivered by each of FT and DT, such cash (if applicable)
to be delivered by wire transfer of immediately available
funds to an account designated by Sprint to FT and DT at
least five Business Days prior to the Primary Closing Date.
(h) The Amended and Restated Stockholders' Agreement,
in form reasonably satisfactory to each of the Parties
shall be executed and delivered by each Party in the
English and French languages.
(i) The Amended and Restated Registration Rights
Agreement, in form reasonably satisfactory to each of the
Parties, shall be executed and delivered by each Party in
the English and French languages.
-2-
<PAGE>
(j) The Amended and Restated Standstill Agreement, in
form reasonably satisfactory to each of the Parties, shall
be executed and delivered by each Party in the English and
French languages.
(k) The Amended and Restated DT Investor
Confidentiality Agreement, in form reasonably satisfactory
to each of the Parties, shall be executed and delivered by
DT and Sprint in the English language.
(l) The Amended and Restated FT Investor
Confidentiality Agreement, in form reasonably satisfactory
to each of the Parties, shall be executed and delivered by
FT and Sprint in the English and French languages.
All of the actions contemplated to occur at the Primary Closing
shall be deemed to have occurred simultaneously, and none of such
actions shall be effective unless all of such actions have
occurred or are waived by the necessary Parties. Notwithstanding
anything to the contrary in this Agreement, (i) the failure of
any of the conditions set forth in Sections 2.1(b) or 2.3(b) to
be satisfied or waived prior to or at the Primary Closing shall
not affect the Buyers' obligations under Article V to vote (or
cause to be voted) the shares of capital stock of Sprint they own
(directly or indirectly) in favor of the Initial Charter
Amendment, the Subsequent Charter Amendment, this Agreement, the
Amended Other Agreements, the PCS Restructuring Agreement and the
transactions contemplated hereby and thereby and any other
matters related thereto presented for a vote at the Stockholders
Meeting (including any class vote of the Class A Holders required
thereat or in connection therewith), and their agreement not to
exercise any disapproval rights which they may have under the
Articles or otherwise with respect to any such matters, (ii) the
failure of any of the conditions set forth in Sections 2.1(b) or
2.3(b) to be satisfied or waived prior to or at the Primary
Closing shall not affect the Parties' obligations to proceed with
all of the transactions and deliveries contemplated to be
undertaken at the Primary Closing (other than the purchase and
sale by the Buyers of the capital stock of Sprint), and such
transactions and deliveries in fact shall proceed if all of the
other conditions to the Primary Closing have been satisfied or
waived, and (iii) if the conditions to the purchase and sale of
the capital stock of Sprint at the Primary Closing are not
satisfied or waived prior to or at the Primary Closing, unless
this Agreement is otherwise terminated in accordance with its
terms, the purchase and sale by the Buyers of the capital stock
of Sprint contemplated to be purchased at the Primary Closing
shall occur on the fifth Business Day (unless the Parties
otherwise agree) following the satisfaction of all such
conditions to the purchase and sale of such capital stock.
Section 1.2. The Secondary Closing. If Sprint determines to
proceed with the IPO after the Primary Closing Date, the
Secondary Closing shall take place at the offices of King &
Spalding, 1185 Avenue of the Americas, New York, New York, at
10:00 a.m. (local time at the place of the Secondary Closing) on
the date determined by Sprint in accordance with Section 5.2(d)
or at such other location or on such other date or time as Sprint
may determine. At the Secondary Closing, (i) the IPO will be
consummated, and (ii) if the conditions to the Secondary Closing
specified in Section 2.4 or 2.5, as applicable, are satisfied or
waived prior to the Secondary Closing, the purchase
-3-
<PAGE>
and sale of shares of capital stock of Sprint contemplated by
Section 1.5 to occur at the Secondary Closing shall be
consummated, and the Parties will take the following actions:
(a) Sprint shall deliver to the Buyers the certificate
contemplated by Section 2.4(b)(iv), and the Buyers shall
deliver to Sprint the certificates contemplated by Section
2.4(c)(iii).
(b) Certificates representing the shares of Series 3
PCS Stock to be issued to FT at the Secondary Closing shall
be delivered by Sprint to FT.
(c) Certificates representing the shares of Series 3
PCS Stock to be issued to DT at the Secondary Closing shall
be delivered by Sprint to DT.
(d) Cash in the amount of one-half of the purchase
price for such shares of Series 3 PCS Stock being purchased
shall be delivered by each of FT and DT, such cash to be
delivered by wire transfer of immediately available funds
to an account designated by Sprint to FT and DT at least
five Business Days prior to the Secondary Closing Date.
All of the actions contemplated to occur at the Secondary Closing
shall be deemed to have occurred simultaneously, and none of such
actions shall be effective unless all of such actions have
occurred or are waived by the necessary Parties. Notwithstanding
anything to the contrary in this Agreement, but subject to the
provisions of Section 6.5, if the conditions to the purchase and
sale of the capital stock of Sprint at the Secondary Closing are
not satisfied or waived prior to or at the Secondary Closing the
purchase and sale by the Buyers of the capital stock of Sprint
contemplated to be purchased at the Secondary Closing shall occur
on the fifth Business Day (unless the Parties otherwise agree)
following the satisfaction of all such conditions to the purchase
and sale of the capital stock.
Section 1.3. The Greenshoe Closing. If the underwriters for
the IPO exercise an over-allotment option in connection with the
IPO (the "Greenshoe") after either the Primary Closing Date or
the Secondary Closing Date, the Greenshoe Closing shall take
place at the offices of King & Spalding, 1185 Avenue of the
Americas, New York, New York, at 10:00 a.m. (local time at the
place of the Greenshoe Closing) on the date determined by Sprint
in accordance with the terms of any underwriting agreement
entered into by Sprint in connection with the IPO or at such
other location or on such other date or time as Sprint may
determine. At the Greenshoe Closing, (i) the over-allotment
option granted to the underwriters will be consummated, and (ii)
if the conditions to the Greenshoe Closing specified in Section
2.4 or 2.5, as applicable, are satisfied or waived prior to the
Greenshoe Closing, the purchase and sale of shares of capital
stock of Sprint contemplated by Section 1.5 to occur at the
Greenshoe Closing shall be consummated, and the Parties will take
the following actions:
-4-
<PAGE>
(a) Sprint shall deliver to the Buyers the certificate
contemplated by Section 2.4(b)(iii), and the Buyers shall
deliver to Sprint the certificates contemplated by Section
2.4(c)(iii).
(b) Certificates representing the shares of Series 3
PCS Stock to be issued to FT at the Greenshoe Closing shall
be delivered by Sprint to FT.
(c) Certificates representing the shares of Series 3
PCS Stock to be issued to DT at the Greenshoe Closing shall
be delivered by Sprint to DT.
(d) Cash in the amount of one-half of the purchase
price for such shares of Series 3 PCS Stock being purchased
shall be delivered by each of FT and DT, such cash to be
delivered by wire transfer of immediately available funds
to an account designated by Sprint to FT and DT at least
five Business Days prior to the Greenshoe Closing Date.
All of the actions contemplated to occur at the Greenshoe Closing
shall be deemed to have occurred simultaneously, and none of such
actions shall be effective unless all of such actions have
occurred or are waived by the necessary Parties. Notwithstanding
anything to the contrary in this Agreement, but subject to the
provisions of Section 6.5, if the conditions to the purchase and
sale of the capital stock of Sprint at the Greenshoe Closing are
not satisfied or waived prior to or at the Greenshoe Closing the
purchase and sale by the Buyers of the capital stock of Sprint
contemplated to be purchased at the Greenshoe Closing shall occur
on the fifth Business Day (unless the Parties otherwise agree)
following the satisfaction of all such conditions to the purchase
and sale of the capital stock.
Section 1.4. Purchase and Sale of Shares at the Primary
Closing. Upon the terms and subject to the conditions of this
Agreement, Sprint 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 Series 3 PCS Stock at the Primary
Closing as set forth below in this Section 1.4:
(a) Subject to Sections 1.6, 1.7, 1.8 and 1.9, FT and
DT shall purchase that number of whole shares (rounded up
to the nearest whole share) of Series 3 PCS Stock
sufficient for FT and DT to have acquired Beneficial
Ownership, in the aggregate, equal to 25% of the aggregate
Voting Power attributable to the shares of Series 1 PCS
Stock, Series 2 PCS Stock and PCS Preferred Stock issued in
the CP Exchange, the IPO (if the IPO occurs on the Primary
Closing Date), the CP/IPO Top Up Purchase (if the IPO
occurs on the Primary Closing Date), the PCS Preferred
Issuance, and the CP/FT-DT Top Up Purchase to be effected
at the Primary Closing. Such shares shall be purchased at
the applicable price specified below in this Section 1.4(a)
and determined at the date of the Primary Closing as
follows:
-5-
<PAGE>
(i) if Sprint elects to complete the IPO on the
Primary Closing Date, the purchase price per share of
such shares of Series 3 PCS Stock shall be the IPO
Price net of any underwriting discounts in connection
with the IPO, which purchase price shall be paid in
cash in immediately available funds.
(ii) if Sprint elects to complete the
Recapitalization on the Primary Closing Date and prior
to the IPO, then the purchase price per share of such
shares of Series 3 PCS Stock shall be an amount equal
to the Volume Weighted Trading Average of the Series 1
PCS Stock for the period of 20 consecutive Trading
Days following the commencement of regular way trading
in connection with the Recapitalization, which
purchase price shall be paid by the issuance to Sprint
by FT and DT of Top Up Notes or a combination of cash
and Top Up Notes.
(b) Each of FT and DT agrees to purchase one-half of
the shares of Series 3 PCS Stock to be purchased pursuant
to Section 1.4(a). The purchase of shares of capital stock
by FT and DT pursuant to this Section 1.4 shall be
consummated concurrently, and no purchase of shares by FT
or DT pursuant to this Section 1.4 shall be made unless and
until the concurrent purchase by the other Party is so
effected.
Section 1.5. Purchase and Sale of Shares at the Secondary
and Greenshoe Closings. Upon the terms and subject to the
conditions of this Agreement, if the Secondary Closing or the
Greenshoe Closing occurs, subject to Sections 1.6, 1.7, 1.8 and
1.9, Sprint 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, at the Secondary Closing or the Greenshoe Closing, as
the case may be, that number of whole shares (rounded up to the
nearest whole share) of Series 3 PCS Stock sufficient for FT and
DT to have acquired Beneficial Ownership, in the aggregate, equal
to 25% of the aggregate Voting Power attributable to the shares
of Series 1 PCS Stock and Series 2 PCS Stock issued (i) in the
case of the Secondary Closing, in the IPO (if the IPO occurs on
the Secondary Closing Date), the CP/IPO Top Up Purchase (if the
IPO occurs on the Secondary Closing Date), and the CP/FT-DT Top
Up Purchase to be effected at the Secondary Closing, and (ii) in
the case of the Greenshoe Closing, in the Greenshoe, the
CP/Greenshoe Top Up Purchase and the CP/FT-DT Top Up Purchase to
be effected at the Greenshoe Closing. Such shares shall be
purchased at the IPO Price net of any underwriting discounts in
connection with the IPO. Each of FT and DT agrees to purchase
one-half of the shares of Series 3 PCS Stock to be purchased
pursuant to this Section 1.5. The purchase of shares of capital
stock by FT and DT pursuant to this Section 1.5 shall be
consummated concurrently, and no purchase of shares by FT or DT
pursuant to this Section 1.5 shall be made unless and until the
concurrent purchase by the other Party is so effected.
Section 1.6. Antidilution. The number of shares of Series 3
PCS Stock to be purchased by the Buyers hereunder and the
purchase price therefor shall be adjusted to reflect any stock
split, subdivision, stock dividend, or other reclassification,
consolidation or a combination of the Voting Securities of Sprint
or similar action or transaction after the date hereof, provided
that no adjustment shall be made under this Section 1.6 in
respect of the Recapitalization.
-6-
<PAGE>
Section 1.7. Reduction of Purchased Shares. At any
Applicable Closing, the number of shares of Series 3 PCS Stock to
be purchased by FT and DT hereunder shall be reduced by the
minimum number of shares, if any, necessary so that, following
such Applicable Closing, FT and DT and their respective
Affiliates shall Beneficially Own in the aggregate (rounded up to
the nearest whole share) 20% of the sum of (a) the aggregate
number of Votes of Sprint outstanding at that time (giving effect
to any other issuances of Voting Securities of Sprint to take
place concurrently with such Applicable Closing) and (b) the
aggregate number of Votes represented by the Voting Securities of
Sprint which FT and DT and their respective Affiliates have
committed to purchase from Sprint (but not including any Voting
Securities of Sprint to be purchased by FT and DT under this
Agreement, other than Voting Securities which have been purchased
prior to the Applicable Closing or which will be purchased at
such Applicable Closing). Any reduction in shares pursuant to
this Section 1.7 shall be borne one-half by each of FT and DT.
Section 1.8. Effect of Conversion. If after the date hereof
all outstanding shares of Class A Stock shall have been converted
into Non-Class A Common Stock pursuant to the Class A Provisions,
each share of Series 3 PCS Stock to have been issued by Sprint
pursuant to this Agreement shall instead be issued as one duly
issued, fully paid and nonassessable share of Series 1 PCS Stock.
Section 1.9. Relationship of Purchases Under this Agreement
to CP Top Ups. In connection with the exercise by FT and DT of
their rights under this Agreement to purchase shares of capital
stock of Sprint at each Applicable Closing, Sprint shall use its
reasonable efforts to coordinate the exercise of purchase rights
by the Cable Partners and FT and DT to avoid a series of
successive exercises of purchase rights triggered by a single
issuance.
Section 1.10. Effect on Stockholders' Agreement. To the
extent FT and DT purchase shares of Sprint capital stock pursuant
to this Agreement in respect of the CP Exchange, the IPO, the
Greenshoe, the CP/FT-DT Top Up, the CP/IPO Top Up, the
CP/Greenshoe Top Up and/or the issuance of the PCS Preferred
Stock, such purchase shall be in lieu of the Equity Purchase
Rights which FT and DT otherwise would have had under the
Stockholders' Agreement and the Amended and Restated
Stockholders' Agreement as a result of such events, and no such
Equity Purchase Rights as a result of such events may be
exercised under such documents with respect to the transactions
contemplated by this Agreement except to the extent that FT and
DT do not purchase shares of capital stock in respect of such
events because this Agreement is terminated or the Secondary
Closing or Greenshoe Closing is abandoned.
ARTICLE II
CONDITIONS TO CLOSINGS
----------------------
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Section 2.1. Conditions of All Parties to Primary Closing.
(a) The respective obligations of each Party to
consummate the transactions contemplated by this Agreement
to occur at the Primary Closing (other than the purchase
and sale of the capital stock of Sprint to be acquired by
FT and DT hereunder) are subject to the fulfillment at or
prior to the Primary Closing Date of each of the following
conditions, any or all of which may be waived in whole or
in part by the Party being benefitted thereby, to the
extent permitted by applicable Law:
(i) The matters presented for a vote of the
stockholders of Sprint at the Stockholders Meeting as
contemplated by Section 5.2(b) shall have been duly
approved by the requisite holders of capital stock of
Sprint in accordance with applicable Law and the
Articles and Bylaws of Sprint.
(ii) The CP Closing shall be consummated
simultaneously with the Primary Closing.
(iii) No preliminary or permanent injunction or
other order, decree or ruling issued by a Governmental
Authority, nor any statute, rule, regulation or
executive order promulgated or enacted by any
Governmental Authority, shall be in effect that
enjoins the actions to be effected at the Primary
Closing under clauses (a) and (b) and (h) through (m)
only of Section 1.1 of this Agreement or the
transactions contemplated by the PCS Restructuring
Agreement.
(iv) The IPO or the Recapitalization (whichever
Sprint has elected to complete concurrently with the
CP Exchange on the Primary Closing Date) shall be
consummated simultaneously with the Primary Closing.
(v) The Initial Charter Amendment and (if the
Recapitalization is to occur concurrently with the CP
Exchange) the Subsequent Charter Amendment shall have
been filed with the Kansas Secretary of State.
(b) The respective obligations of each Party to
consummate the purchase and sale of the capital stock of
Sprint to be purchased by FT and DT hereunder at the
Primary Closing are subject to the fulfillment at or prior
to the Primary Closing Date of each of the conditions
specified in Section 2.1(a) and each of the following
additional conditions, any or all of which may be waived in
whole or in part by the Party being benefitted thereby, to
the extent permitted by applicable Law:
(i) All consents, if any, required from the
Federal Communications Commission in order to permit
the purchase and sale of the shares of capital stock
of Sprint to be purchased by FT and DT at the Primary
Closing shall have been granted,
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in each case without any material limitation,
restriction, requirement or condition on Sprint, FT or
DT.
(ii) FT shall have received all approvals, if
any, of the French minister in charge of economic
affairs and finance (ministre charge de l'economie et
des finances) and all approvals, if any, of the French
minister in charge of posts and telecommunications
(ministre charge des postes et des telecommunications)
required in order to permit the purchase and sale of
the shares of capital stock of Sprint to be purchased
by FT and DT at the Primary Closing.
(iii) DT shall have received all approvals, if
any, of the Bundeskartellamt required in order to
permit the purchase and sale of the shares of capital
stock of Sprint to be purchased by FT and DT at the
Primary Closing.
(iv) All other material Governmental Approvals,
if any, required in order to permit the purchase and
sale of the shares of capital stock of Sprint to be
purchased by FT and DT at the Primary Closing shall
have been received.
(v) No Change of Control shall have occurred.
Section 2.2. Sprint's Conditions Precedent to the Primary
Closing. The obligations of Sprint to effect the transactions
contemplated by this Agreement to occur at the Primary Closing
(including the purchase and sale of the capital stock of Sprint
to be acquired by FT and DT hereunder at the Primary Closing) are
subject to the satisfaction, on or prior to the Primary Closing
Date, of each of the following conditions, compliance with which
or the occurrence of which may be waived in whole or in part by
Sprint:
(a) The representations and warranties of each of FT
and DT contained in this Agreement shall be accurate in all
material respects on the Primary Closing Date with the same
effect as if made on the Primary Closing Date (except that
any such statements which are expressly made as of a
particular date shall have been accurate as of such
particular date and except to the extent contemplated or
permitted by this Agreement or the PCS Restructuring
Agreement). At the Primary Closing, Sprint shall be
provided with a certificate to such effect from each of FT
and DT, signed by a duly authorized officer thereof.
(b) All covenants and agreements of each of FT and DT
contained in this Agreement and required to be performed on
or prior to the Primary Closing Date shall have been
performed in all material respects on or prior to the
Primary Closing. At the Primary Closing, Sprint shall be
provided with a certificate to such effect from each of FT
and DT, signed by a duly authorized officer thereof.
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(c) There shall not have occurred any change in
applicable Law or any change in facts beyond Sprint's
reasonable control, in either case occurring after the date
hereof, that would prevent King & Spalding from reaffirming
to Sprint on the Primary Closing Date its opinion described
in Section 3.7. For purposes of this Section 2.2(c), Law
also includes any Revenue Ruling, proposed regulations or
official notice of intent to propose regulations issued by
the Internal Revenue Service, or a bill introduced in the
House of Representatives or Senate of the United States or
legislation proposed by the United States Treasury
Department.
(d) Each of the Amended Other Agreements shall have
been executed by the Buyers which are parties thereto and
delivered to Sprint.
Section 2.3. Conditions Precedent to the Primary Closing
for FT and DT.
(a) The obligations of each of FT and DT to effect the
transactions contemplated by this Agreement to occur at the
Primary Closing (other than the purchase and sale of the
capital stock of Sprint to be acquired by FT and DT
hereunder at the Primary Closing) are subject to the
satisfaction, on or prior to the Primary Closing Date, of
the following conditions, compliance with which or the
occurrence of which may be waived in whole or in part by FT
and DT:
(i) All representations and warranties of Sprint
(other than the representations and warranties set
forth in Sections 3.6, 3.7 and 3.8) shall be accurate
in all material respects on the Primary Closing Date
with the same effect as if made on the Primary Closing
Date (except that any such statements which are
expressly made as of a particular date shall have been
accurate as of such particular date and except to the
extent contemplated or permitted by this Agreement or
the PCS Restructuring Agreement). At the Primary
Closing, FT and DT shall be provided with a
certificate to such effect from Sprint, signed by a
duly authorized officer thereof.
(ii) All covenants and agreements of Sprint
contained in this Agreement and required to be
performed on or prior to the Primary Closing Date
shall have been performed in all material respects on
or prior to the Primary Closing. At the Primary
Closing, FT and DT shall be provided with a
certificate to such effect from Sprint, signed by a
duly authorized officer thereof.
(iii) Sprint shall have amended its Articles in
accordance with the Initial Charter Amendment and (if
the Recapitalization is to occur on the Primary
Closing Date) the Subsequent Charter Amendment.
(iv) Sprint shall have duly adopted the Bylaw
Amendment and such amended terms shall be in full
force and effect.
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(v) Each of the Amended Other Agreements shall
have been executed by Sprint and delivered to the
Buyers which are parties thereto.
(vi) The Board of Directors shall have taken
appropriate action so that the provisions of Kan.
Stat. Ann. Section 17-12,101 (the "Business
Combination Statute") restricting "business
combinations" with "interested stockholders" (each as
defined in Kan. Stat. Ann. Section 17-12,100) 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 Sprint
pursuant to and permitted by this Agreement and the
Amended Other Agreements.
(vii) The Series 1 FON Stock and Series 1 PCS
Stock issuable upon conversion of the Class A Stock to
be issued pursuant to this Agreement shall have been
approved for listing on the New York Stock Exchange,
or if not so approved, shall have been approved for
listing on the American Stock Exchange or approved for
quotation on the National Association of Securities
Dealers Automated Quotations National Market System
subject to official notice of issuance.
(viii) Each of the Buyers shall have received
opinions dated as of the Primary Closing Date, from
counsel to the Company reasonably satisfactory to the
Buyers, in form reasonably satisfactory to the
Parties.
(b) The obligations of each of FT and DT to effect the
purchase and sale of the capital stock of Sprint to be
acquired by FT and DT hereunder at the Primary Closing are
subject to the satisfaction, on or prior to the Primary
Closing Date, of each of the conditions specified in
Section 2.3(a) and each of the following conditions,
compliance with which or the occurrence of which may be
waived in whole or in part by FT and DT:
(i) The representations and warranties of Sprint
set forth in Sections 3.6, 3.7 and 3.8 shall be
accurate in all material respects on the Primary
Closing Date with the same effect as if made on the
Primary Closing Date (except that any such statements
which are expressly made as of a particular date shall
have been accurate as of such particular date and
except to the extent contemplated or permitted by this
Agreement or the PCS Restructuring Agreement). At the
Primary Closing, FT and DT shall be provided with a
certificate to such effect from Sprint, signed by a
duly authorized officer thereof.
(ii) There shall not have occurred after the date
hereof any change in applicable Law that would cause
the Recapitalization to be deemed taxable to FT or DT
under French or German tax law.
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<PAGE>
(iii) Unless FT and DT have otherwise consented in
writing, the PCS Restructuring Agreement shall not
have been amended in a manner which fundamentally
changes the transactions contemplated by the PCS
Restructuring Agreement or which is materially adverse
to FT and DT.
Section 2.4. Conditions Precedent to Secondary and
Greenshoe Closings During the Anticipated IPO Period.
(a) If the IPO occurs within 180 days following the CP
Exchange, the respective obligations of each Party to
consummate the transactions contemplated by this Agreement
to occur at each of the Secondary Closing and the Greenshoe
Closing are subject to the fulfillment at or prior to each
of the Secondary Closing Date and Greenshoe Closing Date,
respectively, of the following conditions, which may be
waived in whole or in part by the Party being benefitted
thereby, to the extent permitted by applicable Law:
(i) No preliminary or permanent injunction or
other order, decree or ruling issued by a Governmental
Authority, nor any statute, rule, regulation or
executive order promulgated or enacted by any
Governmental Authority, shall be in effect that
enjoins the consummation of the transactions to be
effected at the Secondary Closing or the Greenshoe
Closing, as the case may be.
(ii) All material Governmental Approvals, if any,
required in order to permit the purchase and sale of
the shares of capital stock of Sprint to be purchased
by FT and DT at the Secondary Closing or the Greenshoe
Closing, as the case may be, shall have been received.
(b) If the IPO occurs within 180 days following the CP
Exchange, the obligation of each Buyer to consummate the
transactions contemplated hereby at a Secondary Closing or
Greenshoe Closing is subject to the fulfillment of each of
the following conditions on or prior to the date of such
Secondary Closing or Greenshoe Closing:
(i) The representations and warranties of Sprint
set forth in Sections 3.1, 3.2(a), 3.3, 3.4 and 3.5
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 Secondary Closing or Greenshoe Closing, as the
case may be, 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 PCS Restructuring Agreement, the
Amended Other Agreements or the Articles.
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(ii) The first two sentences of Section 3.6(a)
(as to SEC Documents filed prior to the Applicable
Closing) and Section 3.7 (but in the case of Section
3.7 only as to changes prior to the Applicable
Closing, but after the later of (x) the end of the
quarter covered by the last Quarterly Report on Form
10-Q of Sprint filed prior to the Applicable Closing,
and (y) the end of the year covered by the last Annual
Report on Form 10-K of Sprint filed prior to the
Applicable Closing) shall be true and correct in all
material respects at and as of the date of the
Secondary Closing or the Greenshoe Closing, as the
case may be, 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 Sprint compared to the last to be filed prior to
the Applicable Closing of the Annual Report on Form
10-K of Sprint or the Quarterly Report on Form 10-Q of
Sprint.
(iii) Sprint shall have performed and complied in
all material respects with its obligations under
Section 5.6 of this Agreement; Article FIFTH of the
Articles (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 and the Amended and Restated
Stockholders' Agreement.
(iv) Sprint shall have delivered to the Buyers a
certificate, dated the date of such Secondary Closing
or Greenshoe Closing, as the case may be, signed by a
duly authorized senior officer of Sprint, certifying
that the conditions specified in Sections 2.4(b)(i)
and (ii) have been fulfilled.
(v) No Change of Control shall have occurred.
(vi) There shall not have occurred after the date
hereof any change in applicable Law that would cause
the Recapitalization to be deemed taxable to FT or DT
under French and German tax law.
(c) The obligation of Sprint to consummate the
transactions contemplated hereby at a Secondary Closing or
Greenshoe Closing is subject to the fulfillment of each of
the following conditions on or prior to the date of such
Secondary Closing or Greenshoe Closing:
(i) The representations and warranties of the
Buyers set forth in Sections 4.1(a), 4.1(b), 4.1(d),
4.1(g), 4.2(a), 4.2(b), 4.2(d) and 4.2(g) 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
Secondary Closing or Greenshoe Closing, as the case
may be, 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,
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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 PCS Restructuring
Agreement, the Amended Other Agreements or the
Articles.
(ii) Each of the Buyers shall have performed and
complied in all material respects with its obligations
under Article I of this Agreement, Article II and
Section 7.5 of the Stockholders' Agreement and the
Amended and Restated Stockholders' Agreement, Sections
2.1, 3.1 and 3.2(b) of the Standstill Agreement and
the Amended and Restated Standstill Agreement, the
Investor Confidentiality Agreements and the Amended
and Restated Investor Confidentiality Agreements.
(iii) Each of the Buyers shall have delivered to
Sprint a certificate, dated the date of such Secondary
Closing or Greenshoe Closing, as the case may be,
signed by a duly authorized senior officer of such
Buyer, certifying that the conditions specified in
Sections 2.4(c)(i) and (ii) have been fulfilled.
(d) Except as set forth in this Section 2.4, no breach
of the representations, warranties, covenants or agreements
contained in this Agreement shall affect the obligations of
the Parties to consummate the purchase and sale of capital
stock of Sprint at any Secondary Closing or Greenshoe
Closing, provided that this sentence shall not affect any
other rights, liabilities, duties or obligations of the
Parties arising under this Agreement as a result of such
breach.
Section 2.5. Conditions Precedent to Secondary and
Greenshoe Closings After the Anticipated IPO Period.
(a) If the IPO occurs after 180 days following the CP
Exchange, the respective obligations of each Party to
consummate the transactions contemplated by this Agreement
to occur at each of the Secondary Closing and the Greenshoe
Closing are subject to the fulfillment at or prior to each
of the Secondary Closing Date and Greenshoe Closing Date,
respectively, of the following conditions which may be
waived in whole or in part by the Party being benefitted
thereby, to the extent permitted by applicable Law:
(i) No preliminary or permanent injunction or
other order, decree or ruling issued by a Governmental
Authority, nor any statute, rule, regulation or
executive order promulgated or enacted by any
Governmental Authority, shall be in effect that
enjoins the consummation of the transactions to be
effected at the Secondary Closing or the Greenshoe
Closing, as the case may be.
(ii) All other material Governmental Approvals,
if any, required in order to permit the purchase and
sale of the shares of capital stock of Sprint to be
purchased by FT and DT at the Secondary Closing or the
Greenshoe Closing, as the case may be, shall have been
received.
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(b) If the IPO occurs after 180 days following the CP
Exchange, in addition to the conditions set forth in
Section 2.4(b), the obligations of the Buyers to consummate
the transactions contemplated by this Agreement to occur at
each of the Secondary Closing and the Greenshoe Closing are
subject to the fulfillment at or prior to each of the
Secondary Closing Date and Greenshoe Closing Date,
respectively, of the following conditions, which may be
waived in whole or in part by the Buyers, to the extent
permitted by applicable Law:
(i) The representations and warranties of Sprint
contained in this Agreement shall be accurate in all
material respects on the date of the Applicable
Closing with the same effect as if made on the date of
the Applicable Closing (except that any such
statements which are expressly made as of a particular
date shall have been accurate as of such particular
date and except to the extent contemplated or
permitted by this Agreement or the PCS Restructuring
Agreement). At the Applicable Closing, the Buyers
shall be provided with a certificate to such effect
from Sprint, signed by a duly authorized officer
thereof.
(ii) There shall not have occurred after the date
hereof any change in applicable Law that would cause
the Recapitalization to be deemed taxable to FT or DT
under French and German tax law.
(c) If the IPO occurs after 180 days following the CP
Exchange, in addition to the conditions set forth in
Section 2.4(c), the obligations of Sprint to consummate the
transactions contemplated by this Agreement to occur at
each of the Secondary Closing and the Greenshoe Closing are
subject to the fulfillment at or prior to each of the
Secondary Closing Date and Greenshoe Closing Date,
respectively, of the following condition, which may be
waived in whole or in part by Sprint, to the extent
permitted by applicable Law:
The representations and warranties of each of FT and
DT contained in this Agreement shall be accurate in all
material respects on the date of the Applicable Closing
with the same effect as if made on the date of the
Applicable Closing (except that any such statements which
are expressly made as of a particular date shall have been
accurate as of such particular date and except to the
extent contemplated or permitted by this Agreement or the
PCS Restructuring Agreement). At the Applicable Closing,
Sprint shall be provided with a certificate to such effect
from each of FT and DT, signed by a duly authorized officer
thereof.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SPRINT
----------------------------------------
Sprint represents and warrants to each of FT and DT as
follows:
Section 3.1. Organization, Qualification, Etc. Sprint is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Kansas. Sprint has all requisite
corporate power and authority to: (a) enter into this Agreement,
the Amended Other Agreements and the letter agreement dated as of
the date hereof among the Parties hereto identifying certain
documents as being in form reasonably satisfactory to the Parties
(the "Letter Agreement"), (b) subject to approval by the
stockholders of Sprint and to the filing of the Proposed Charter
Amendments, issue and sell shares of Series 3 PCS Stock to the
Buyers pursuant to this Agreement and comply with its obligations
under this Agreement, each Amended Other Agreement and the Letter
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.
Section 3.2. Capital Stock and Other Matters.
(a) Schedule 3.2 sets forth the authorized capital
stock of Sprint and the number of each class of shares
issued and outstanding as of March 31, 1998. No bonds,
debentures, notes or other indebtedness of Sprint 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 Sprint may vote
are issued and outstanding on the date hereof. All of the
issued and outstanding shares of Sprint's capital stock are
validly issued, fully paid and nonassessable. No holder of
the outstanding shares of Sprint's capital stock is
entitled to preemptive rights with respect to any issuance
of shares of Class A Stock.
(b) Except as set forth in Schedule 3.2, no class of
capital stock of Sprint is entitled to preemptive rights.
Except as set forth in Schedule 3.2, there are no
stockholder agreements, voting trusts or other Contracts to
which Sprint 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 Sprint.
Section 3.3. Validity of Shares.
(a) Subject to obtaining the approval of the
stockholders of Sprint specified in Section 5.2(b) hereof
and to the filing of the Proposed Charter Amendments with
the appropriate Kansas Governmental Authorities, (i) when
the shares of Series 3 PCS Stock are issued and delivered,
in each case against payment therefor at each Applicable
Closing as provided hereby (including cash in an amount at
least equal to the aggregate par value of the shares), each
such share shall be validly issued, free of any Lien (other
than any Lien arising due to the action or inaction of any
of the Buyers), fully paid and a nonassessable share of
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capital stock of Sprint and (ii) upon the filing of the
Proposed Charter Amendments, each share of Class A Common
Stock into which the Class A Common Stock held by FT is
automatically reclassified and changed, and each share of
Class A Common Stock--Series DT into which the Class A
Common Stock held by DT is automatically reclassified and
changed, will be validly issued, free of any Lien (other
than any Lien arising due to the action or inaction of any
of the Buyers), fully paid and a nonassessable share of
capital stock of Sprint.
(b) Subject to obtaining the approval of the
stockholders of Sprint specified in Section 5.2(b) hereof
and to the filing of the Proposed Charter Amendments with
the appropriate Kansas Governmental Authorities, upon the
filing of the Proposed Charter Amendments:
(i) When shares of Series 3 FON Stock, Series 3
PCS Stock, Series 1 FON Stock or Series 1 PCS Stock,
as applicable, are delivered upon sale or exchange of
interests in the Class A Common Stock or Class A
Common Stock--Series DT, each such share will be
validly issued, free of any Lien (other than any Lien
arising due to the action or inaction of any of the
Buyers), fully paid and a nonassessable share of
capital stock of Sprint;
(ii) The holders of Class A Common Stock shall,
at any time, be entitled to all of the rights and
privileges pertaining to the ownership of Series 1 FON
Stock and Series 1 PCS Stock to the extent such Class
A Common Stock represents, at such time, Shares
Issuable With Respect To The Class A Equity Interest
In the FON Group and Shares Issuable With Respect To
The Class A Equity Interest In The PCS Group (as each
such term is defined in the Proposed Charter
Amendments); and
(iii) Each share of Sprint capital stock into
which any share of Class A Stock is reclassified upon
a recapitalization in accordance with ARTICLE SIXTH,
Section 1.2(e) of the Subsequent Charter Amendment
will be validly issued, free of any Lien (other than
any Lien arising due to the action or inaction of any
of the Buyers), fully paid and a nonassessable share
of capital stock of Sprint.
Section 3.4. Corporate Authority; No Violation. The
execution, delivery and performance of this Agreement, each
Amended Other Agreement and the Letter Agreement, and the
consummation of the transactions contemplated hereby and thereby
(including, without limitation, the issuance and sale of Sprint's
capital stock) have been duly authorized by all requisite
corporate action on the part of Sprint, subject to obtaining the
approval of the stockholders of Sprint specified in Section 5.2
hereof and to the filing of the Proposed Charter Amendments with
the appropriate Kansas Governmental Authorities and assuming
that, with respect solely to those provisions of the
Stockholders' Agreement, the Amended and Restated Stockholders'
Agreement, the Articles and the Proposed Charter Amendments that
require explicitly the receipt of Continuing Director approval
for the performance of obligations or consummation of
transactions on the part of Sprint thereunder,
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Continuing Director approval is obtained in the manner provided
therein. Upon the execution and delivery by Sprint of this
Agreement, each Amended Other Agreement and the Letter Agreement,
each such agreement will constitute a legal, valid and binding
agreement of Sprint, enforceable against Sprint in accordance
with its terms.
Section 3.5. No Conflict; No Default. Neither the
execution, delivery and performance by Sprint of this Agreement,
each Amended Other Agreement and the Letter Agreement, the
adoption of the Bylaws Amendment and the adoption and filing of
the Proposed Charter Amendments nor the consummation by Sprint of
the transactions contemplated hereby or thereby will: (i) subject
to the approval of the stockholders of Sprint contemplated by
Section 5.2 hereof and the filing of the Proposed Charter
Amendments 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 the
Stockholders' Agreement, the Amended and Restated Stockholders'
Agreement and the Proposed Charter Amendments that require
explicitly the receipt of Continuing Director approval for the
performance of obligations or consummation of transactions on the
part of Sprint 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 Schedule 3.5 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 Sprint and
its Subsidiaries taken as a whole or adversely affect in any
material respect Sprint's ability to perform its obligations
hereunder or under the Amended Other Agreements or the Letter
Agreement; (iii) except as set forth in Schedule 3.5, 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 Sprint
or any of its Subsidiaries pursuant to, any Contract to which
Sprint or any of its Subsidiaries is a party or by which Sprint
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 Sprint and its Subsidiaries
taken as a whole or adversely affect in any material respect
Sprint's ability to perform its obligations hereunder or under
the Amended Other Agreements or the Letter Agreement; or (iv)
except as set forth in Schedule 3.5, violate or conflict with any
Law applicable to Sprint or any of its Subsidiaries, or any of
the properties, businesses, or assets of any of Sprint 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 Sprint and its Subsidiaries
taken as a whole or adversely affect in any material respect
Sprint's ability to performs its obligations hereunder or under
the Amended Other Agreements or the Letter Agreement.
Section 3.6. Sprint Reports and Financial Statements.
(a) Sprint has previously made available to FT and DT
complete and correct copies of each: (i) annual report on
Form 10-K for Sprint; (ii) quarterly report on Form 10-Q
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for Sprint; (iii) definitive proxy statement for Sprint;
(iv) current report on Form 8-K for Sprint; and (v) other
form, report, schedule and statement, in the case of each
of clauses (i), (ii), (iii), (iv) and (v) filed by Sprint
with the SEC under the Exchange Act since January 1, 1997
(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, 1997, Sprint 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 Sprint 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).
Since March 31, 1998, Sprint 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 Sprint and its Subsidiaries taken as a
whole or materially and adversely affect Sprint's ability
to perform its obligations hereunder or under the Amended
Other Agreements or the Letter Agreement.
Section 3.7. Absence of Certain Changes or Events. Since
March 31, 1998 there has not been, occurred or arisen any change
in the business, financial condition or results of operations of
Sprint 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 Sprint and its Subsidiaries taken as a whole or any
change that adversely affects in any material respect Sprint's
ability to perform its obligations hereunder or under the Amended
Other Agreements or the Letter Agreement.
Section 3.8. Litigation. There is no Proceeding pending or,
to the best of Sprint's Knowledge, threatened against or relating
to Sprint 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 Sprint and its Subsidiaries taken as a
whole or affect adversely in any material respect Sprint's
ability to perform its obligations hereunder or under the Amended
Other Agreements or the Letter Agreement. There is no judgment,
decree, injunction, rule or order of any Governmental Authority
outstanding against
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Sprint or any of its Subsidiaries that, individually or in the
aggregate, is reasonably likely to have a Material Adverse Effect
on Sprint and its Subsidiaries taken as a whole or adversely
affect in any material respect Sprint's ability to perform its
obligations hereunder or under the Amended Other Agreements or
the Letter Agreement.
Section 3.9. 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 Sprint with respect to (i) information provided by FT,
DT or any of their Affiliates in writing specifically for
inclusion, or incorporation by reference, in the Proxy
Statement, or (ii) 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 the 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 Sprint is responsible for
filing with any Governmental Authority in connection with
the transactions contemplated hereby other than those
described in Section 3.9(a) have complied and will comply
in all material respects with applicable Law. All
information supplied or to be supplied by Sprint in any
document filed with any Governmental Authority in
connection with the transactions contemplated hereby or by
the Amended 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 Sprint 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 Amended Other
Agreement or the Letter Agreement.
Section 3.10. Certain Tax Matters. To the best of Sprint's
Knowledge and belief, it is reasonable to assert that Sprint 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 3.11. Amendments to the Rights Agreement. The Board
of Directors has taken, or prior to the Primary Closing will
take, 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) and 2.3 of
the Amended and Restated Standstill Agreement (but not Sections
2.1(a)(ii) or 2.2 thereof or Section 2.3 thereof to the extent
based upon an applicable Percentage Limitation (as defined in the
Amended and
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Restated Standstill Agreement) as determined by Section
2.1(a)(ii) 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 3.12. Other Registration Rights. Sprint has not
granted, and has not agreed to grant, any demand or incidental
registration rights to any Person other than (a) rights granted
pursuant to the Registration Rights Agreement and to be granted
pursuant to the Amended and Restated Registration Rights
Agreement, (b) rights to be granted to the Cable Partners
pursuant to the Cable Partners Registration Rights Agreement, and
(c) rights issued after the date hereof that will not adversely
affect the registration rights to be granted to the Buyers in the
Amended and Restated Registration Rights Agreement.
Section 3.13. 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. The ownership by FT and DT
and any subsidiary of FT and/or DT identified in the Acquiring
Person Statement of shares of Sprint's capital stock representing
in the aggregate less than one-third of the voting power of
Sprint (assuming for purposes of the Kansas Control Share
Acquisitions Statute that none of FT, DT, any subsidiary of FT
and/or DT 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 by the Original Investment Agreement, any Initial Other
Agreement, this Agreement, any Amended Other Agreement or the
Articles, 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 5.2
other than as set forth in Sections 4.1(f) and 4.2(f)) 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 Amended 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 other than as set forth in
Sections 4.1(f) and 4.2(f) and that none of such Persons acquires
any Voting Securities other than as contemplated or permitted by
this Agreement, any Initial Other Agreement, any Amended Other
Agreement or the Articles) except for statutes or regulations the
failure of Sprint with which to comply would not have a material
adverse effect on (a) the transactions contemplated in this
Agreement or any Amended Other Agreement, (b) the ability of the
Buyers to exercise fully their rights under this Agreement or any
Amended Other Agreement or the Articles, or (c) the intrinsic
value of an investment in Sprint's equity securities (provided
that a change in the market price of Sprint'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 Sprint's equity
securities).
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Section 3.14. Vote Required; Board Recommendation. The only
votes of the stockholders of Sprint required under Kansas law and
the Articles and Bylaws to approve (a) the Proposed Charter
Amendments and (b) such other matters, if any, related thereto or
to this Agreement as Sprint may determine to submit to the
stockholders of Sprint, are (i) the affirmative vote of the
holders of a majority of the outstanding shares of the Common
Stock, the Class A Common Stock, the Preferred Stock-First
Series, the Preferred Stock-Second Series and the Preferred
Stock-Fifth Series of Sprint, voting together as a single class,
(ii) the affirmative vote of the holders of a majority of the
outstanding shares of the Common Stock and Class A Common Stock,
voting as a single class, and (iii) the approval (or the failure
to disapprove) of the Class A Common Stock, voting or taking
action as a class. The Board of Directors has determined that the
proposals contemplated by Section 5.2(b) are advisable and in the
best interests of the stockholders of Sprint.
Section 3.15. Sprint Board Action. Prior to the date
hereof, the Board of Directors of Sprint has approved (i) the
Bylaw Amendment and (ii) the Management and Allocation Policies,
each to be effective at the Primary Closing.
Section 3.16. King & Spalding Opinion. On the date hereof,
Sprint has received from King & Spalding its opinion to the
effect that (i) the Recapitalization will constitute a
recapitalization within the meaning of Section 368(a)(1)(E) of
the Code, (ii) any outstanding stock which is designated as
common stock of Sprint in Sprint's Articles of Incorporation will
constitute voting stock of Sprint for federal income tax
purposes, and (iii) except with respect to cash paid in lieu of
fractional shares, if any, the holders of such stock of Sprint
will not recognize income, gain or loss in and as a result of the
Recapitalization. In rendering such opinion, King & Spalding may
receive and rely upon representations contained in certificates
of Sprint in form and substance reasonably acceptable to King &
Spalding.
Section 3.17. PCS Restructuring Agreement. A complete and
correct copy of the PCS Restructuring Agreement has been provided
to the Buyers.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE BUYERS
--------------------------------------------
Section 4.1. Representations and Warranties of FT. FT
represents and warrants to Sprint as follows:
(a) FT is a societe anonyme validly existing under the
laws of the Republic of France, and has all requisite power
and authority to: (i) enter into this Agreement, each of
the Amended Other Agreements and the Letter Agreement, (ii)
purchase the shares of Sprint's capital stock as provided
herein, and in the Amended and Restated Stockholders'
Agreement and the Articles as amended by the Proposed
Charter Amendments, and (iii)
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comply with its obligations under this Agreement, each
Amended Other Agreement and the Letter Agreement.
(b) (i) The execution, delivery and performance of
this Agreement, each Amended Other Agreement and the Letter
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 by FT of this Agreement, each
Amended Other Agreement and the Letter Agreement, 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, each Amended Other Agreement or
the Letter 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 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 Amended Other Agreements
or the Letter Agreement; (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 Amended
Other Agreements or the Letter Agreement; or (z) violate or
conflict with 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 Amended Other Agreements or the Letter
Agreement.
(c) 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 Amended Other
Agreements or the Letter Agreement. 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
Amended Other Agreements or the Letter Agreement.
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(d) FT is purchasing the shares of Sprint's capital
stock to be purchased by it pursuant to this Agreement and
the Amended and Restated 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 Amended and Restated 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
Amended and Restated Stockholders' Agreement are exempt
from registration pursuant to exceptions available under
such laws, and that Sprint's reliance upon such exemptions
is predicated upon FT's representations set forth in this
Agreement and the Amended and Restated Stockholders'
Agreement. FT understands that the shares of Sprint's
capital stock purchased by it pursuant to this Agreement
and the Amended and Restated 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 law of any other country or an
exemption from such registration is available.
(e) All documents that FT is responsible for filing
with any Governmental Authority in connection with the
transactions contemplated hereby or by the Amended Other
Agreements 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 Amended 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 Amended
Other Agreement or the Letter Agreement.
(f) FT is in compliance in all material respects with
Article 2 of the Standstill Agreement.
(g) Neither FT nor any 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. P. 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 7.8 hereof, 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 Amended Other Agreement
or the Letter Agreement.
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Section 4.2. Representations and Warranties of DT. DT
represents and warrants to Sprint 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, each of the Amended Other Agreements and
the Letter Agreement, (ii) purchase the shares of Sprint's
capital stock as provided herein, and in the Amended and
Restated Stockholders' Agreement and the Articles as
amended by the Proposed Charter Amendments and (iii) comply
with its obligations under this Agreement, each Amended
Other Agreement and the Letter Agreement.
(b) (i) The execution, delivery and performance of
this Agreement, each Amended Other Agreement and the Letter
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 by DT of this Agreement, each
Amended Other Agreement and the Letter Agreement, 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, each of the Amended Other
Agreements or the Letter Agreement, 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 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 Amended Other Agreements or the Letter
Agreement; (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 Amended Other Agreements
or the Letter Agreement.
(c) 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 Amended Other
Agreements or the Letter Agreement. 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
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performs its obligations hereunder or under the Amended
Other Agreements or the Letter Agreement.
(d) DT is purchasing the shares of Sprint's capital
stock to be purchased by it pursuant to this Agreement and
the Amended and Restated 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 Amended and Restated 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
Amended and Restated Stockholders' Agreement are exempt
from registration pursuant to exceptions available under
such laws, and that Sprint's reliance upon such exemptions
is predicated upon DT's representations set forth in this
Agreement and the Amended and Restated Stockholders'
Agreement. DT understands that the shares of Sprint's
capital stock purchased by it pursuant to this Agreement
and the Amended and Restated 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.
(e) All documents that DT is responsible for filing
with any Governmental Authority in connection with the
transactions contemplated hereby or by each Amended Other
Agreement 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 Amended 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 Amended
Other Agreement or the Letter Agreement.
(f) DT is in compliance in all material respects with
Article 2 of the Standstill Agreement.
(g) Neither DT nor any Subsidiary of DT 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. P. 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 7.8 hereof, 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
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any other legal process in any jurisdiction, in each case
relating to this Agreement or any Amended Other Agreement
or the Letter Agreement.
ARTICLE V
COVENANTS
---------
Section 5.1. Cooperation.
(a) Between the date hereof and the earlier of (i) the
last Applicable Closing to occur or (ii) the termination of
this Agreement, subject to the terms and conditions of this
Agreement, the Parties shall cooperate with each other and
use all commercially reasonable efforts to obtain all
necessary consents and approvals for the consummation of
the transactions contemplated hereby and otherwise to
satisfy the conditions to closing set forth in Article II
hereof. Without limiting the generality of the foregoing,
(A) each of FT and DT agrees to vote (or cause to be voted)
the shares of capital stock of Sprint it owns (directly or
indirectly) in favor of the Initial Charter Amendment, the
Subsequent Charter Amendment, this Agreement, the Amended
Other Agreements, the PCS Restructuring Agreement and the
transactions contemplated hereby and thereby and the other
matters related thereto presented for a vote at the
Stockholders Meeting (including any class vote of the Class
A Holders required thereat or in connection therewith), and
agrees not to exercise any disapproval rights which it may
have under the Articles or otherwise with respect to any
such matters, and (B) each Party shall use its commercially
reasonable efforts to obtain all consents and
authorizations of third parties and Governmental
Authorities and to make all filings with and give all
notices to third parties and Governmental Authorities which
may be necessary or required in order to effect the
transactions contemplated hereby.
(b) 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 Amended 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 Amended 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.
(c) Notwithstanding the foregoing, in connection with
any filing or submission required or action to be taken by
Sprint, FT or DT to consummate the transactions
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contemplated hereby, (i) neither Sprint nor any Affiliates
of Sprint shall be required to become subject to any
requirement or condition that it divest or "hold separate"
any assets or businesses or any similar transaction or
restriction, and (ii) neither Sprint nor any Affiliates of
Sprint shall be required to divest or hold separate or
otherwise take (or refrain from taking) or commit to take
(or refrain from taking) any action that limits its freedom
of action with respect to, or its ability to retain, any of
the businesses, product lines or assets of Sprint or any of
its Subsidiaries.
(d) Each Party shall (i) execute and deliver such
additional instruments and other documents as may be
reasonably requested by the other Parties hereto in
connection with the consummation of the transactions
contemplated hereby, 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
Amended Other Agreements and to satisfy the applicable
conditions to closing hereunder.
(e) 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 7.8 hereof or in any
corresponding section of any Amended Other Agreement, and
shall take such reasonable action as appropriate in order
to permit FT to so comply with such orders.
(f) 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 7.8 hereof or in any
corresponding section of any Amended Other Agreement, and
shall take such reasonable action as appropriate in order
to permit DT to so comply with such orders.
(g) Sprint shall, at the request of FT and DT, use its
commercially reasonable efforts to obtain, as soon as is
practicable, any United States regulatory approvals or
other regulatory relief as FT and DT reasonably deem
appropriate in order for FT and DT to exercise and benefit
from their rights under this Agreement, the Amended Other
Agreements and the Articles.
(h) In addition to any obligations under the
Standstill Agreement or the Amended and Restated 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
Amended Other Agreements prior to the consummation thereof.
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Section 5.Certain Actions by Sprint.
(a) As soon as is reasonably practicable after the
execution of this Agreement, Sprint shall prepare and file
with the SEC (i) the Proxy Statement to be mailed to Sprint
stockholders in connection with the Stockholders Meeting to
be held for the purpose of approving the Initial Charter
Amendment, the Subsequent Charter Amendment and amendments
to certain of Sprint's equity-based incentive plans in
connection with the creation of the PCS Stock, among other
things, and (ii) the Registration Statement containing the
IPO Prospectus covering the shares of Series 1 PCS Stock to
be sold in the IPO. Sprint shall use its commercially
reasonable efforts to cause the Proxy Statement to be
approved for mailing and the Registration Statement to
become effective under the Securities Act, each as promptly
as practicable after such filing, and shall take all
commercially reasonable actions required to be taken under
any applicable state blue sky or securities laws in
connection with the IPO and the Recapitalization.
(b) Sprint shall cause the Stockholders Meeting to be
held as soon as practicable after the date hereof. Sprint's
Board of Directors shall recommend that its stockholders
approve the Initial Charter Amendment, the Subsequent
Charter Amendment and the other matters related thereto
presented for a vote in the Proxy Statement (including
matters, if any, referred to in clause (b) of Section
3.14), and Sprint shall use commercially reasonable efforts
to obtain such stockholder approval. Sprint shall not be
deemed to have breached any obligation under this Agreement
by reason of the disclosure of information in the Proxy
Statement or any public announcement or other communication
with Sprint's stockholders if such disclosure is required
by Law, so long as the Board of Directors of Sprint shall
not have withdrawn, limited, qualified or conditioned the
recommendation referred to above. Sprint's conclusion that
any such disclosure is required by Law will be final and
binding on all the parties hereto if Sprint has received a
written opinion of counsel that such disclosure or
communication is required by Law. "Commercially reasonable"
efforts shall not be deemed to require any action that
would prevent Sprint's compliance with Section 3(a)(9) of
the Securities Act in connection with the Recapitalization.
Each of FT and DT shall provide such information regarding
itself and its Affiliates as may reasonably be requested by
Sprint for inclusion in the Proxy Statement. The
information provided by FT and DT in writing for inclusion
in the Proxy 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 in writing for inclusion 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, FT and DT shall
promptly notify Sprint of the occurrence of such event.
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(c) Sprint currently intends to close the IPO as soon
as practicable following the Trigger Date, assuming that
the other conditions to the closing (other than conditions
relating solely to the obligations of FT and DT to purchase
capital stock hereunder) have been satisfied or are capable
of being satisfied on or prior to the Primary Closing Date;
provided that the determination to proceed with the IPO at
any time shall remain in Sprint's sole discretion. If the
IPO occurs prior to the Recapitalization, the Primary
Closing shall occur simultaneously with the closing of the
IPO. If Sprint causes the IPO to be completed
simultaneously with the Primary Closing, Sprint shall
complete the Recapitalization by filing the Subsequent
Charter Amendment with the Kansas Secretary of State within
120 days following the Primary Closing and, unless the
Transfer Restrictions (as defined in the Amended and
Restated Stockholders Agreement) have been terminated
pursuant to Section 2.6(a) of the Amended and Restated
Stockholders Agreement, each of FT and DT will, and will
cause its controlled Affiliates to, for a period of one
hundred eighty (180) days following the Primary Closing
Date, refrain from engaging in any public sale or
distribution of any PCS Stock or securities convertible
into, or exchangeable or exercisable for, or the value of
which relates to or is based upon, PCS Stock.
(d) Subject to Section 5.2(e), if the IPO is not
completed on or prior to the 30th day following the Trigger
Date, then Sprint shall on the earlier of (i) the date
which is 10 days following such date subsequent to the
Trigger Date that Sprint reasonably determines that the IPO
is not capable of being completed on or prior to the 30th
day following the Trigger Date or (ii) the 40th day
following the Trigger Date, effect the Recapitalization by
filing the Initial Charter Amendment and the Subsequent
Charter Amendment with the Kansas Secretary of State,
assuming that the other conditions to closing have been
satisfied or are capable of being satisfied at the Primary
Closing. If Sprint causes the Recapitalization to be
completed as provided in this Section 5.2(d), the Primary
Closing hereunder shall occur simultaneously with the
completion of the Recapitalization. In such event, Sprint
currently intends to complete the IPO within 120 days after
the Primary Closing Date. If Sprint completes the
Recapitalization simultaneously with the Primary Closing
and the IPO is completed within such 120-day period, unless
the Transfer Restrictions (as defined in the Amended and
Restated Stockholders Agreement) have been terminated
pursuant to Section 2.6(a) of the Amended and Restated
Stockholders Agreement, each of FT and DT will, and will
cause its controlled Affiliates to, for a period commencing
at the time of the Primary Closing and ending 90 days
following the closing of the IPO, refrain from engaging in
any public sale or distribution of any PCS Stock or
securities convertible into, or exchangeable or exercisable
for, or the value of which relates to or is based upon, PCS
Stock.
(e) If the Trigger Date occurs after August 1, 1998,
and before September 1, 1998, the Trigger Date will be
deemed to occur on the earlier of (i) September 1, 1998 or
(ii) such date after August 1, 1998, that Sprint reasonably
determines that the IPO is not capable of being completed
on or prior to October 1, 1998.
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Section 5.3. IPO Matters. The IPO will be conducted
substantially in accordance with the terms of the PCS
Restructuring Agreement.
Section 5.4. Tax Matters. Each Party shall use all
reasonable efforts to cause the Recapitalization to constitute a
tax-free "reorganization" under Section 368(a) of the Code. Each
Party agrees that it will not take any action, and will not
permit any of its Subsidiaries or Affiliates to take any action,
that such party knows would cause the Recapitalization to fail to
qualify as a tax-free reorganization under Section 368(a) of the
Code. Each Party agrees to report the Recapitalization on all tax
returns and other filings as a reorganization under Section
368(a) of the Code. Absent a change in applicable Law, or a
change in facts beyond Sprint's reasonable control, Sprint agrees
that (i) it will not treat the closing of the transactions
contemplated by this Agreement and the Amended Other Agreements,
including with respect to the equity purchase rights of FT and DT
described herein and therein, as giving rise to any withholding
tax obligation (except in respect of any cash payments) and (ii)
it will not change the withholding rate otherwise applicable to
distributions as the result of the class votes provided to the
holders of the PCS Stock. For purposes of the preceding sentence,
change in applicable Law also includes any Revenue Ruling, and
(as of the proposed effective date thereof) any proposed
regulations or official notice of intent to propose regulations
issued by the Internal Revenue Service.
Section 5.5. Brokers or Finders.
(a) Other than Salomon Smith Barney and SBC Warburg
Dillon Read, 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 Sprint or any of its
Affiliates in connection with the transactions contemplated
by this Agreement and the Amended Other Agreements. Sprint
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 Sprint or any of its Affiliates in
connection with the transactions contemplated by this
Agreement and the Amended Other Agreements.
(b) Other than Credit Suisse First Boston, 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
Amended Other Agreements. FT agrees to indemnify and hold
Sprint 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 Amended Other
Agreements.
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(c) Other than Credit Suisse First Boston, 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
Amended Other Agreements. DT agrees to indemnify and hold
Sprint 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 Amended Other
Agreements.
Section 5.6. No Action Relating to Takeover Statutes;
Applicability of Future Statutes and Regulations. Sprint 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 Amended Other
Agreement or the Articles, 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 Amended Other
Agreement or the Articles.
Section 5.7. Management and Allocation Policies. Sprint
will not make any change in or amendment to the Management and
Allocation Policies or the Bylaw Amendment (or waive or otherwise
disregard any provision thereof) prior to the Recapitalization
without the consent of each of FT and DT.
Section 5.8. Sprint Action. Except to the extent that each
of the Buyers otherwise consents in writing, or as otherwise
contemplated by the PCS Restructuring Agreement, this Agreement
or the Amended Other Agreements, until the Primary Closing,
Sprint 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 Amended Other
Agreement, the Articles as proposed to be amended by the Proposed
Charter Amendments, and the Bylaws as proposed to be amended by
the Bylaws Amendment.
Section 5.9. Standstill Agreement. The discussions solely
among FT, DT and Sprint (and their respective legal counsel and
investment bankers) in connection with the negotiation, execution
and delivery of this Agreement and the Amended Other Agreements
and the discussions solely among FT, DT and Sprint (and their
respective legal counsel and investment bankers) in connection
with the consummation of the transactions contemplated thereby
shall not constitute a violation of the Standstill Agreement or
the Amended and Restated Standstill Agreement. In addition, the
discussions solely among FT, DT, Sprint and the Cable Partners
(and their respective legal counsel and investment bankers) prior
to the date hereof in connection with the negotiation, execution
and
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delivery of the Purchase Rights Agreement shall not constitute a
violation of the Standstill Agreement or the Amended and Restated
Standstill Agreement.
ARTICLE VI
TERMINATION; ABANDONMENT
------------------------
Section 6.1. Events of Termination. This Agreement may be
terminated and the transactions contemplated hereby abandoned at
any time prior to the Primary Closing:
(a) by mutual written consent of the Parties;
(b) by any Party, by notice to the other Parties, if
the actions to be taken by the Parties at the Primary
Closing under clauses (a), (b) and (h) through (m) only of
Section 1.1 hereof shall be prohibited by any final,
nonappealable order, decree or injunction of a Governmental
Authority;
(c) by any Party that is not in material breach of any
material covenant contained in this Agreement, by notice to
the other Parties if the Primary Closing has not occurred
on or before December 31, 1998;
(d) by any Party that is not in material breach of any
material covenant contained in this Agreement, by notice to
the other Parties following the time that any condition to
the Primary Closing set forth in Article II (other than any
conditions set forth in Sections 2.1(b) and 2.3(b)) has
become incapable of being satisfied on or prior to December
31, 1998;
(e) by any Party that is not in material breach of any
material covenant contained in this Agreement, by notice to
the other Parties following a material breach of any
material covenant contained in this Agreement by any other
Party if such breach remains uncured in any material
respect for 30 days following the giving of notice of the
breach of such material covenant from the Party seeking to
terminate this Agreement to each other Party; provided,
that the Party seeking to terminate this Agreement gives
written notice of such termination to each other Party
within 30 days following the end of such 30-day cure
period; or
(f) by FT or DT, if the Board of Directors shall have
withdrawn its recommendation of the proposals contemplated
by Section 5.2(b) hereof or shall have qualified its
recommendation in a manner materially adverse to FT and DT,
provided that for purposes of this clause (f) if the Board
of Directors continues its recommendation and approval of
such proposals, but reflects in its recommendation
additional information, the inclusion of such additional
information, in and of itself, shall not be deemed to be a
qualification that is materially adverse to FT and DT or
otherwise provide FT and DT with a termination right under
this clause (f).
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Section 6.2. Effect of Termination.
(a) If this Agreement is terminated in accordance with
Section 6.1, then this Agreement shall become null and void
and have no further effect, without any liability of any
Party to any other Party, except that the obligations of
the Parties pursuant to Section 6.3 and Article VII and
under any provision of this Agreement that expressly
provides for certain actions to occur simultaneously with
or following the termination of this Agreement shall
survive the termination of this Agreement indefinitely;
provided, that no such termination shall release or relieve
any Party hereto from liability for any willful material
breach of any material provision of this Agreement
occurring prior to such termination.
(b) If this Agreement is terminated in accordance with
Section 6.1, then the Initial Other Agreements shall
continue in full force and effect until terminated in
accordance with their respective terms, without any
amendment to the rights and obligations of the parties
thereto.
Section 6.3. Reimbursement of Expenses. If this Agreement
is terminated pursuant to Section 6.1(f), in addition to any
other remedies the Buyers may have hereunder, at law, in equity
or otherwise, Sprint 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 German Fee
Regulations) incurred by it relating to the transactions
contemplated by this Agreement and the Amended Other Agreements
(as set forth on a certificate or certificates executed by an
officer of each of FT and DT describing such expenses in
reasonable detail) up to a maximum aggregate amount of $5 million
for FT and DT collectively, to be allocated between FT and DT as
FT and DT shall so determine.
Section 6.4. Abandonment of Purchase and Sale of Capital
Stock at Primary Closing. The obligations of the parties to
consummate the purchase by FT and DT of the capital stock of
Sprint contemplated hereby to occur at the Primary Closing may be
abandoned at any time prior to the Primary Closing:
(a) by any Party, by notice to the other Parties, if
the purchase and sale of the capital stock of Sprint
contemplated to occur at the Primary Closing shall be
prohibited by any final, nonappealable order, decree or
injunction of a Governmental Authority; or
(b) if a Change of Control shall have occurred.
Notwithstanding any abandonment pursuant to this Section 6.4 of
the purchase and sale of the capital stock of Sprint to be
effected at the Primary Closing, this Agreement shall not be
terminated and such abandonment shall have no effect whatsoever
on (i) the Buyers' obligations under Article V to vote (or cause
to be voted) the shares of capital stock of Sprint they own
(directly or indirectly) in favor of the Initial Charter
Amendment, the Subsequent Charter Amendment, this Agreement, the
Amended Other Agreements, the PCS Restructuring Agreement and the
transactions contemplated
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hereby and thereby and any other matters related thereto
presented for a vote at the Stockholders Meeting (including any
class vote of the Class A Holders required thereat or in
connection therewith), and their agreement not to exercise any
disapproval rights which they may have under the Articles or
otherwise with respect to any such matters, or (ii) any other
actions to be taken by the Parties at the Primary Closing,
including the Parties' obligations to proceed with all of the
transactions and deliveries contemplated to be undertaken at the
Primary Closing (other than the purchase and sale by the Buyers
of the capital stock of Sprint), and such transactions and
deliveries in fact shall proceed if all of the other conditions
to the Primary Closing have been satisfied or waived.
Section 6.5. Abandonment of Secondary Closing and Greenshoe
Closing. The obligations of the parties to consummate the
purchase by FT and DT of the capital stock of Sprint contemplated
hereby to occur at the Secondary Closing and/or the Greenshoe
Closing may be abandoned at any time after the Primary Closing
and prior to such Secondary Closing or Greenshoe Closing, as the
case may be:
(a) by mutual written consent of the Parties;
(b) by any Party, by notice to the other Parties, if
the Secondary Closing or Greenshoe Closing, as the case may
be, shall be prohibited by any final, nonappealable order,
decree or injunction of a Governmental Authority;
(c) by any Party that is not in material breach of any
material covenant contained in this Agreement, by notice to
the other Parties if the Secondary Closing has not occurred
on or before June 30, 1999;
(d) by any Party that is not in material breach of any
material covenant contained in this Agreement, by notice to
the other Parties following the time that any condition to
closing set forth in Article II and applicable to the
purchase by FT and DT of capital stock pursuant to this
Agreement at the Secondary Closing or the Greenshoe Closing
has become incapable of being satisfied on or prior to June
30, 1999;
(e) by any Party that is not in material breach of any
material covenant contained in this Agreement, by notice to
the other Parties following a material breach of any
material covenant contained in this Agreement by any other
Party if such breach remains uncured in any material
respect for 30 days following the giving of notice of the
breach of such material covenant from the Party seeking to
terminate this Agreement to each other Party; provided,
that the Party seeking to abandon the Secondary Closing or
the Greenshoe Closing gives written notice of such
termination to each other Party within 30 days following
the end of such 30-day cure period; or
(f) if a Change of Control shall have occurred.
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Notwithstanding any abandonment of the Secondary Closing or the
Greenshoe Closing pursuant to this Section 6.5, this Agreement
shall not be terminated and such abandonment shall have no effect
whatsoever on the actions taken or to be taken by the Parties at
the Primary Closing, including the execution and delivery by the
Parties of the Amended Other Agreements.
ARTICLE VII
MISCELLANEOUS
-------------
Section 7.1. Survival of Representations and Warranties.
(a) The representations and warranties made by (i)
Sprint in Sections 3.1 through 3.5, the first two sentences
of Section 3.6(a) and Section 3.7 (but, in the case of
Section 3.7, only to the extent that a change described in
such Section relates to a Material Adverse Effect on Sprint
and its Subsidiaries taken as a whole that existed on the
Primary Closing 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 Sprint filed prior to the
Primary Closing Date and (y) the date of the end of the
year covered by the last Annual Report on Form 10-K of
Sprint filed prior to the Primary Closing Date) of this
Agreement, and (ii) the Buyers in Sections 4.1 and 4.2 of
this Agreement (the "Surviving Representations") will
survive, solely with respect to any damages relating to
each particular investment to be made at an Applicable
Closing, until the earlier to occur of (x) 15 months after
the date of the Applicable Closing and (y) 90 days after
the publication of the results of the first full audit of
the consolidated financial statements of Sprint and its
Subsidiaries by Sprint's independent auditors following the
Applicable Closing, such financial statements to include a
balance sheet and statements of income and cash flows as of
a date following the Applicable Closing and to be prepared
in accordance with GAAP applied on a consistent basis with
the financial statements included in the SEC Documents.
Sprint shall have the right to cause its independent
auditors to conduct such an audit at any time after the
Applicable Closing. 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 3.10, 4.1(g) and 4.2(g) shall survive without
limitation as to time. None of the other representations
and warranties made by any party in this Agreement or any
Amended Other Agreement or in any certificate or document
delivered pursuant hereto or thereto prior to or on the
Applicable Closing shall survive the Applicable Closing.
None of the representations and warranties made by any
Party in this Agreement or any Amended Other Agreement or
in any certificate or document delivered pursuant hereto or
thereto at the Secondary Closing or Greenshoe Closing shall
survive such Secondary Closing or Greenshoe 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,
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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 3.10
made by Sprint 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 $30 million. Sprint shall be entitled to
recovery with respect to breach of the Surviving
Representations 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 Sprint arising from or relating to such
breaches exceeds $30 million. Sprint shall not incur any
liability under the representation and warranty provided in
Section 3.10 or under any certificate pertaining to such
representation (even if Sprint 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 Sprint's
Knowledge and belief.
(c) Notwithstanding anything in this Section 7.1 to
the contrary, except solely with respect to the
representations and warranties in Section 3.3 relating to
the effect of the filing of the Proposed Charter Amendments
with respect to the Class A Common Stock, the Buyers shall
be entitled to Damages under this Section 7.1 only to the
extent such Damages directly relate to the investment in
Sprint being made by the Buyers pursuant to this Agreement,
and without limiting the generality of the foregoing, the
Buyers shall have no claim for Damages under this Agreement
with respect to any actual or alleged diminution in value
of, or other loss, liability or damage associated with, the
Buyers' existing investment in Sprint or any additional
purchases of capital stock of Sprint made by the Buyers
other than pursuant to this Agreement.
Section 7.2. 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.
Section 7.3. Entire Agreement. This Agreement, including
the Disclosure Schedules, the Exhibits attached hereto, and the
Amended 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 Original Investment
Agreement, or (c) the understanding set forth in Item 1 of
Schedule 2 to that certain memorandum dated June 22, 1995 among
Sprint, 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.
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Section 7.4. Expenses. Except as set forth in the next
sentence, 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 of the Amended Other Agreements to which it or any of its
Affiliates is a party, and the transactions contemplated hereby
and thereby. Each of the Parties agrees that a Party making a
request for this Agreement, the Letter Agreement, an Amended
Other Agreement or any other document related to this Agreement
and the Amended Other Agreements to be translated in the French
language shall be responsible for the expenses associated with
the preparation of such translations and that the non-requesting
Parties shall be responsible for the expenses associated with the
review of such translations by the non- requesting Parties and
their advisors.
Section 7.5. 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 7.6. Binding Agreement; No Third Party
Beneficiaries. This Agreement will be binding upon and inure to
the benefit of the Parties and their successors 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.
Section 7.7. 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: Group Executive Vice President
Tel: (33-1) 44-44-84-72
Fax: (33-1) 44-44-01-51
with a copy to: 6 place d'Alleray
75505 Paris Cedex 15
France
Attn: General Counsel
Tel: (33-1) 44-44-84-76
Fax: (33-1) 44-12-40-35
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with a copy to: Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
U.S.A.
Attn: Alfred J. Ross, Jr., Esq.
Tel: (212) 848-4000
Fax: (212) 848-8434
DT: Friedrich-Ebert-Allee 140
D-53113 Bonn
Germany
Tel: 49-228-181-9000
Fax: 49-228-181-8970
Attn: Chief Executive Officer
with a copy to: Cleary, Gottlieb, Steen & Hamilton
One Liberty Plaza
New York, New York 10006
U.S.A.
Attn: Robert P. Davis, Esq.
Tel: (212) 225-2000
Fax: (212) 225-3999
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 7.7 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.
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Section 7.8. 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
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 THE AMENDED 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 7.7. 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
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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 PARTES MAY HAVE, THEY SHALL BE ENTITLED
TO SPECIFIC PERFORMANCE AND TO INJUNCTIVE OR OTHER
EQUITABLE RELIEF AS A REMEDY FOR ANY SUCH BREACH TO THE
EXTENT PERMITTED BY APPLICABLE LAW. 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 7.9. 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, to the extent
permitted by applicable Law it shall be adjusted rather than
voided, if possible, in order to achieve the intent of the
Parties to the extent possible.
Section 7.10. Translation.
(a) The Parties have negotiated this Agreement in the
English language and have prepared successive drafts and
the definitive text of this Agreement in the English
language. For purposes of complying with the French
Translation Law, Sprint has prepared and the other Parties
have reviewed a French version of this Agreement, which
French version was executed and delivered simultaneously
with the execution and delivery of the English version
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hereof, such English version having likewise been executed
and delivered. The Parties deem the French and English
versions of this Agreement to be equally authoritative.
(b) The Parties acknowledge that the PCS Restructuring
Agreement, Initial Charter Amendment, the Subsequent
Charter Amendment, the Qualified Stock Purchaser Standstill
Agreement (as such term is defined in the Amended and
Restated Stockholders' Agreement), Sprint Stock Payment
Notes (as such term is defined in the Amended and Restated
Stockholders' Agreement) and Sprint Eligible Notes (as such
term is defined in the Amended and Restated Stockholders'
Agreement), and any draft forms thereof, are not required
to be translated into the French language to comply with
the French Translation Law and that the Exhibits to the
Letter Agreement are either not required to be translated
into the French language prior to the Primary Closing to
comply with the French Translation Law or are not required
to be translated into the French language either before or
after the Primary Closing to comply with the French
Translation Law.
Section 7.11. 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 7.12. 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 7.8, 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 7.13. 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 Sprint, 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 holder of Class A Common
Stock, 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 holder of Class A Common Stock contemplated
by the Amended Other Agreements or the Articles as amended by
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the Proposed Charter Amendments, (c) the transaction in question
is not a "Business Combination" within the meaning of the Fair
Price Provisions, or (d) the holder of Class A Common Stock that
is a party to the transaction, along with its Affiliates (as such
term is defined in Rule 12b-2 under the Exchange Act, as in
effect on October 1, 1982) and Associates (as such term is
defined in Rule 12b-2 under the Exchange Act, 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 Sprint,
Sprint shall not undertake such transaction or make such
determination unless it first delivers a certificate, signed by a
duly authorized officer of Sprint, 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 7.14. Changes in Law. The inclusion by the Parties
in the Amended Other Agreements and by Sprint in the Proposed
Charter Amendments of provisions contained in the Initial Other
Agreements and in the existing Articles which provided for the
termination, modification or vesting of certain rights and
obligations of the parties upon a change in the Law relating to
the United States Communications Act of 1934 is not intended to
create an inference that the Parties believe that no such changes
in the Law have occurred since the date of the Initial Other
Agreements and such provisions shall be interpreted with
reference to the respective dates of the Initial Other Agreements
and the date of filing of the Articles in connection with the
closing of the transactions contemplated by the Original
Investment Agreement.
Section 7.15. Currency. All amounts payable under this
Agreement and the Amended Other Agreements shall be payable in
U.S. dollars.
ARTICLE VIII
DEFINITIONS
-----------
Section 8.1. Certain Definitions. As used in this
Agreement, the following terms shall have the meanings specified
below:
"Acquiring Person Statement" means the acquiring person
statement dated November 17, 1995, delivered by FT, DT and
certain of their Affiliates pursuant to Section 17-1291 of the
Kansas Control Share Acquisitions Statute.
"Affiliates" means, with respect to any Person, any other
Person that directly or indirectly through one or more
intermediaries controls, is controlled by, or is under common
control with such Person. For purposes of this definition, the
term "controls" (including its correlative meanings "controlled
by" and "under common control with") shall mean the possession,
direct or indirect, of
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the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting
securities, by contract or otherwise.
"Agreement" means this Master Restructuring and Investment
Agreement, including the Schedules attached hereto.
"Amended and Restated Confidentiality Agreements" means the
Amended and Restated DT Investor Confidentiality Agreement and
the Amended and Restated FT Investor Confidentiality Agreement.
"Amended and Restated DT Investor Confidentiality
Agreement" means the confidentiality agreement between Sprint and
DT, in form reasonably satisfactory to each of the Parties.
"Amended and Restated FT Investor Confidentiality
Agreement" means the confidentiality agreement between Sprint and
FT, in form reasonably satisfactory to each of the Parties.
"Amended and Restated Registration Rights Agreement" means
the Amended and Restated Registration Rights Agreement among the
Parties, in form reasonably satisfactory to each of the Parties.
"Amended and Restated Standstill Agreement" means the
Amended and Restated Standstill Agreement among the Parties, in
form reasonably satisfactory to each of the Parties.
"Amended and Restated Stockholders' Agreement" means the
Amended and Restated Stockholders' Agreement among the Parties,
in form reasonably satisfactory to each of the Parties.
"Amended Other Agreements" means the Amended and Restated
Registration Rights Agreement, the Amended and Restated
Standstill Agreement, the Amended and Restated Stockholders'
Agreement, the Amended and Restated DT Investor Confidentiality
Agreement and the Amended and Restated FT Investor
Confidentiality Agreement.
"Applicable Closing" means the Primary Closing, the
Secondary Closing or the Greenshoe Closing, as provided by the
context of the sentence.
"Articles" means the Articles of Incorporation of Sprint,
as amended from time to time, including pursuant to the Proposed
Charter Amendments.
"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
8.1(a) hereto, and (b) in the case of DT, any Person occupying
any of the positions listed on Schedule 8.1(b) hereto, provided,
further, that, in each case, no Person occupying any such
position described in clause (a) or clause (b) hereof shall be
deemed an
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"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 Sprint. .
"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 Original Investment Agreement, this Agreement and the Amended
and Restated 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
thereof),
provided that (i) Class A Common Stock, FON Stock and PCS 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; (ii) FON Stock and PCS Stock
shall not be deemed to be Beneficially Owned by FT, DT or their
Affiliates or Associates by virtue of the top up rights and
standby commitments granted under the Purchase Rights Agreement
except to the extent that FT, DT or their Affiliates or
Associates have (A) acquired shares of FON Stock or PCS Stock
pursuant to the Purchase Rights Agreement, or (B) become
irrevocably committed to acquire, and the Cable Partners have
become irrevocably committed to sell, shares of Sprint FON Stock
or Sprint PCS Stock pursuant to the Purchase Rights Agreement
(with such Beneficial Ownership to be determined on a full-voting
basis), subject only to customary closing conditions, if any; and
(iii) FT, DT and their Affiliates and Associates shall not be
deemed to Beneficially Own any incremental Voting Power resulting
solely from the increase in Voting Power provided for by the
application of Section 7.5(d) of the Articles.
"Board of Directors" means the board of directors of
Sprint.
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"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" means DT and FT.
"Bylaw Amendment" means the amendment to the Bylaws in form
reasonably satisfactory to each Party to be effected by the Board
of Directors of Sprint in connection with this Agreement and the
PCS Restructuring Agreement.
"Cable Partner Registration Rights Agreement" means the
registration rights agreement among Sprint and the Cable Partners
to be entered into pursuant to the PCS Restructuring Agreement.
"Cable Partners" means TCI, Comcast and Cox.
"Change of Control" means a:
(a) decision by the Board of Directors to sell Control
of Sprint or not to oppose a third party tender offer for
Voting Securities of Sprint representing more than 35% of
the Voting Power of Sprint; 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 any series of Preferred Stock of Sprint; or
(ii) any unsolicited tender, exchange or other purchase
offer which has not be 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 Sprint 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 Stock" means the Class A Common Stock of
Sprint, as provided for in the Articles, including the Old Class
A Common Stock and the Class A Common Stock -- Series DT (each as
referred to in the Proposed Charter Amendments).
"Class A Holders" means the holders of the Class A Stock.
"Class A Provisions" has the meaning set forth in the
Articles, as amended from time to time, including by the Proposed
Charter Amendments.
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"Class A Stock" means (i) prior to the Primary Closing, the
Class A Common Stock, (ii) following the Primary Closing, but
prior to the Recapitalization, the Class A Common Stock and the
Series 3 PCS Stock, and (iii) following the Recapitalization, the
Class A Common Stock, the Series 3 FON Stock and the Series 3 PCS
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, 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 Internal Revenue Code of 1986, as amended,
and the rules and regulations promulgated thereunder.
"Comcast" means Comcast Corporation, a Pennsylvania
corporation.
"Common Stock" means the Common Stock, par value U.S. $2.50
per share, of Sprint.
"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 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.
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"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.
"Cox" means Cox Communications, Inc., a Delaware
corporation.
"CP Closing" means the consummation of the Mergers (as
defined in the PCS Restructuring Agreement) and the other
transactions contemplated by the PCS Restructuring Agreement.
"CP Exchange" means the issuance of shares of Series 2 PCS
Stock by Sprint at the CP Closing in exchange for certain
interests owned by the Cable Partners pursuant to the PCS
Restructuring Agreement.
"CP/FT-DT Top Up Purchase" means the purchase by the Cable
Partners under the PCS Restructuring Agreement of shares of
Series 2 PCS Stock in connection with the purchase by FT and DT
of shares of Sprint capital stock pursuant to this Agreement.
"CP/Greenshoe Top Up Purchase" means the purchase by the
Cable Partners under the PCS Restructuring Agreement of shares of
Series 2 PCS Stock in connection with the Greenshoe.
"CP/IPO Top Up Purchase" means the purchase by the Cable
Partners under the PCS Restructuring Agreement of shares of
Series 2 PCS Stock in connection with the IPO.
"Director" means a member of the Board of Directors.
"DT" has the meaning set forth in the preamble.
"Exchange Act" means the Securities Exchange Act of 1934,
as amended, and the rules and regulations thereunder.
"Fair Market Value" means, with respect to any asset,
shares or other property, the cash price at which a willing
seller would sell and a willing buyer would buy such asset,
shares or other property in an arm's-length 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 holders of Class A Stock.
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"Fair Price Provisions" means ARTICLE SEVENTH of the
Articles, and any successor provision thereto.
"FON Stock" means the Series 1 FON Stock, the Series 2 FON
Stock and the Series 3 FON Stock.
"French Translation Law" means the loi n(degree) 94-665 du
4 aout 1994 relative a l'emploi de la langue francaise.
"FT" has the meaning set forth in the preamble.
"FT Law and Decrees" means (a) Act N(degree) 83-675 of July
23, 1983 concerning the democratization of the public sector, (b)
Act. N(degree) 90-568 of July 2, 1990 concerning the organization
of the Post Office and Telecommunications public service as
amended by Act N(degree) 96-660 of July 26, 1996 concerning the
national undertaking France Telecom and (c) Decree N(degree)
96-1174 of December 27, 1996 approving the constitution of France
Telecom, including miscellaneous provisions concerning the
operation of France Telecom.
"GAAP" means United States generally accepted accounting
principles as in effect from time to time.
"German Fee Regulations" means Bundesgebuhrenordnung fur
Rechtsanwalte vom 26. Juli 1957 (BGBI) I S. 907 (as it or any
successor provision is from time to time in effect).
"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, 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,
Atlas S.A.
or any of their respective Subsidiaries.
"Greenshoe" has the meaning set forth in Section 1.3 of
this Agreement.
"Greenshoe Closing" means the consummation of the purchase
by FT and DT of shares of Sprint capital stock pursuant to
Section 1.3 of this Agreement.
"Greenshoe Closing Date" means the date of the Greenshoe
Closing.
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"Greenshoe Top Up Purchase" means the purchase by FT and DT
of a number of shares of Series 3 PCS Stock sufficient for FT and
DT, in the aggregate, to Beneficially Own 25% of the aggregate
Voting Power attributable to the shares of Series 1 PCS Stock and
Series 2 PCS Stock issued in the Greenshoe and the CP/Greenshoe
Top Up Purchase, respectively.
"Group" means any group within the meaning of Section
13(d)(3) of the Exchange Act.
"Independent Director" has the meaning set forth in the
Articles.
"Initial Charter Amendment" means the Amended and Restated
Articles of Incorporation of Sprint in form reasonably
satisfactory to each Party effecting the creation of the PCS
Stock and the creation of the PCS Group and the Sprint FON Group,
which Sprint shall file with the Kansas Governmental Authorities
on or before the Primary Closing Date.
"Initial Other Agreements" means the Registration Rights
Agreement, the Standstill Agreement, the Stockholders' Agreement,
and the Investor Confidentiality Agreements.
"Investor Confidentiality Agreements" means the
Confidentiality Agreement between Sprint and DT dated January 31,
1996 and the Confidentiality Agreement between Sprint and FT
dated January 31, 1996.
"IPO" means the initial primary underwritten public
offering of Series 1 PCS Stock pursuant to an effective
registration statement under the Securities Act, proposed to be
conducted by Sprint in accordance with Sections 5.2 and 5.3, that
Sprint currently expects to generate net proceeds of between $500
million and $1.1 billion.
"IPO Price" means the initial price per share at which
shares of Series 1 PCS Stock are purchased by the public in the
IPO.
"IPO Prospectus" means a prospectus located within the
Registration Statement covering the shares of Series 1 PCS Stock
to be sold in the IPO.
"Kansas Control Share Acquisitions Statute" means Kan.
Stat. Ann. Section 17-1286 et seq. (1988).
"Knowledge", or any phrase or term of similar meaning, when
used with respect to any of the Parties, means the actual
knowledge of the executive officers of such Party, without having
made any special investigation or inquiry regarding the
applicable subject matter.
"Law" means any foreign or domestic law, statute, code,
ordinance, rule or regulation promulgated, or any order,
judgment, writ, stipulation, award, injunction or decree entered,
by a Governmental Authority.
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"License" means any license, ordinance, authorization,
permit, certificate, variance, exemption, order, franchise or
approval, domestic or foreign.
"Lien" means any lien, pledge, claim, encumbrance, mortgage
or security interest in real or personal property.
"Management and Allocation Policies" means the policies to
be adopted by the Board of Directors, effective as of the Primary
Closing Date, governing the relationship between the PCS Group
(on the one hand) and the Sprint FON Group (on the other hand).
"Material Adverse Effect" on any party hereto means, with
respect to any Party, 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.
"Original Investment Agreement" has the meaning set forth
in the Recitals to this Agreement.
"Party" and "Parties" have the meaning set forth in the
Recitals to this Agreement.
"PCS Group" has the meaning set forth in the Initial
Charter Amendment.
"PCS Preferred Issuance" means the issuance of the PCS
Preferred Stock pursuant to the PCS Restructuring Agreement.
"PCS Preferred Stock" means the Preferred Stock -- Series 7
of Sprint, no par value per share, which shall be created and
issued pursuant to the terms of the PCS Restructuring Agreement.
"PCS Restructuring Agreement" means the Restructuring and
Merger Agreement, dated as of the date hereof, between Sprint and
the other parties listed therein.
"PCS Stock" means the Series 1 PCS Stock, the Series 2 PCS
Stock, the Series 3 PCS Stock and the PCS Preferred Stock.
"Person" means any individual, corporation, partnership,
limited liability company, trust, unincorporated association or
other entity.
"Primary Closing" means the closing of the actions
contemplated by this Agreement to take place concurrently with
the CP Exchange (which may include the CP Exchange Top Up
Purchase if the conditions to the CP Exchange Top Up Purchase
have been satisfied or waived by the appropriate parties), as
contemplated by this Agreement, held on the date and at the place
fixed in accordance with Article I.
"Primary Closing Date" means the date of the Primary
Closing.
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"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 Charter Amendments" means the Initial Charter
Amendment and the Subsequent Charter Amendment.
"Proxy Statement" means a proxy statement to be mailed to
Sprint stockholders in connection with the Stockholders Meeting.
"Purchase Rights Agreement" means the Top Up Right
Agreement dated May 26, 1998 among FT, DT and the Cable Partners
as in effect on the date hereof.
"Recapitalization" means the reclassification of Sprint
Common Stock into Series 1 FON Stock and Series 1 PCS Stock to be
effected by the filing of the Subsequent Charter Amendment.
"Registration Rights Agreement" means the Registration
Rights Agreement dated as of January 31, 1996, between Sprint, FT
and DT.
"Registration Statement" means a registration statement on
Form S-3 containing the IPO Prospectus covering the shares of
Series 1 PCS Stock to be sold in the IPO.
"SEC" means the Securities and Exchange Commission.
"Secondary Closing" means the consummation of the purchase
by FT and DT of shares of Sprint capital stock pursuant to
Section 1.2 of this Agreement.
"Secondary Closing Date" means the date of the Secondary
Closing.
"Securities Act" means the Securities Act of 1933, as
amended.
"Series 1 FON Stock" means the FON Common Stock -- Series
1, par value to be determined, of Sprint, which will be created
by the filing of the Subsequent Charter Amendment.
"Series 1 PCS Stock" means the PCS Common Stock -- Series
1, par value to be determined, of Sprint, which will be created
on or about the Primary Closing Date by the filing of the Initial
Charter Amendment.
"Series 2 FON Stock"means the FON Common Stock -- Series 2,
par value to be determined, of Sprint, which will be created by
the filing of the Subsequent Charter Amendment.
"Series 2 PCS Stock" means the PCS Common Stock -- Series
2, par value to be determined, of Sprint, which will be created
on or about the Primary Closing Date by the filing of the Initial
Charter Amendment.
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<PAGE>
"Series 3 FON Stock" means the FON Common Stock -- Series
3, par value to be determined, of Sprint, which will be created
by the filing of the Subsequent Charter Amendment.
"Series 3 PCS Stock" means the PCS Common Stock -- Series
3, par value to be determined, of Sprint, which will be created
on or about the Primary Closing Date by the filing of the Initial
Charter Amendment.
"Sprint" means Sprint Corporation, a Kansas corporation.
"Sprint FON Group" has the meaning set forth in the Initial
Charter Amendment.
"Sprint PCS" means Sprint Spectrum L.P., a Delaware limited
partnership.
"SprintSub" means Sprint Global Venture, Inc., a
wholly-owned subsidiary of Sprint.
"Standstill Agreement" means the Standstill Agreement,
dated as of July 31, 1995, among Sprint, FT and DT, as amended on
June 24, 1997.
"Stockholders' Agreement" means the Stockholders'
Agreement, dated as of January 31, 1996, among Sprint, FT and DT,
as amended on June 24, 1997.
"Stockholders Meeting" means a special meeting to be held
for the purpose of approving the Initial Charter Amendment, the
Subsequent Charter Amendment and amendments to certain of
Sprint's equity-based incentive plans in connection with the
creation of the PCS Stock, among other things.
"Strategic Merger" means a merger or other business
combination involving Sprint (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 Sprint 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.
-53-
<PAGE>
"Subsequent Charter Amendment" means the Amendment to the
Restated Articles of Incorporation of Sprint in form reasonably
satisfactory to each Party effecting the Recapitalization, which
Sprint shall file with the Kansas Governmental Authorities either
(i) on or before the Primary Closing Date or (ii) within 120 days
following the Primary Closing.
"Subsidiary" of any Person as of any relevant date means a
corporation, company or other entity (i) more than 50% of whose
outstanding shares or equity securities are, as of such date,
owned or controlled, directly or indirectly through one or more
Subsidiaries, by such Person, and the shares or securities so
owned entitle such Person and/or its Subsidiaries to elect at
least a majority of the members of the board of directors or
other managing authority of such corporation, company or other
entity notwithstanding the vote of the holders of the remaining
shares or equity securities so entitled to vote or (ii) which
does not have outstanding shares or securities, as may be the
case in a partnership, joint venture or unincorporated
association, but more than 50% of whose ownership interest is, as
of such date, owned or controlled, directly or indirectly through
one or more Subsidiaries, by such Person, and in which the
ownership interest so owned entitles such Person and/or
Subsidiaries to make the decisions for such corporation, company
or other entity.
"TCI" means Tele-Communications, Inc., a Delaware
corporation.
"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.
"Top Up Note" means notes of FT or DT, as applicable, in
form reasonably satisfactory to each of the Parties, made payable
to Sprint.
"Trading Days" 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 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 assets or securities in question is
sold, exchanged, assigned, transferred, conveyed, delivered or
otherwise disposed of.
"Trigger Date" means the date that the conditions to
closing set forth in Sections 8.1(a), 8.1(b) and 8.1(d) of the
PCS Restructuring Agreement have been satisfied or waived.
"Volume Weighted Trading Average" means, with respect to
any share of capital stock as of a specific date, the
volume-weighted average Closing Price for the 20 consecutive
Trading Days ending on the last Trading Day prior to such date.
-54-
<PAGE>
"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 Sprint 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
ARTICLE SIXTH of the Articles) with respect to matters other than
the election of directors at a meeting of the stockholders of
Sprint.
"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
Sprint, 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 holder of the Class A Stock.
"Wholly-Owned Subsidiary" means, as to any Person, a
Subsidiary of such Person in which 100% of the equity and voting
interest is owned, directly or indirectly, by such Person.
-55-
<PAGE>
IN WITNESS WHEREOF, the Parties have caused this Agreement
to be duly executed as of the date first above written.
SPRINT CORPORATION
By: /s/ William T. Esrey
--------------------------------
Name: William T. Esrey
Title: Chairman and Chief
Executive Officer
FRANCE TELECOM S.A.
By: /s/ Thierry Girard
--------------------------------
Name: Thierry Girard
Title: Senior Vice President
DEUTSCHE TELEKOM AG
By: /s/ Helmut Reuschenbach
--------------------------------
Name: Helmut Reuschenbach
Title: Senior Executive Director
-56-
<PAGE>
Schedule 3.2
Authorized Capital Stock
Common Stock 1,000,000,000 shares
Class A Common Stock 500,000,000 shares
Preferred Stock 20,000,000 shares
Shares of Capital Stock issued and outstanding at March 31, 1998.
Common-Issued 350,273,927 shares (1)
Common-Outstanding 344,303,011 shares (1)(2)
Class A Common 86,236,036 shares
Preferred Stock - First
Series, Convertible 42,515 shares
Preferred Stock - Second
Series, Convertible 254,211 shares
Preferred Stock - Fifth
Series 95 shares
Treasury Shares 5,970,916 shares (3)
(1) Includes estimate of aggregate shares issuable in Centel
merger based on outstanding Centel shares on date of merger and
exchange rate of 1.37 Sprint shares for each Centel share. No
fractional shares are issued in the exchange; therefore, as
exchanges occur, the original estimate must be adjusted, which is
done on a quarterly basis.
(2) Number reported on Sprint's Quarterly Report on Form 10-Q for
the quarter ended March 31, 1998. Includes 24,467 shares issuable
in connection with options exercised in March, 1998, but not
issued until April, 1998, and excludes 50,000 shares purchased by
Sprint in March, 1998, but not transferred into Sprint's name
until April, 1998.
(3) Excludes 24,467 shares issuable in connection with options
exercised in March, 1998, but not issued until April, 1998, and
includes 50,000 shares purchased by Sprint in March, 1998, but
not transferred into Sprint's name until April, 1998.
<PAGE>
Stockholder agreements, voting trusts and other Contracts
relating to the voting or transfer (including purchase) of any
shares or units of any Voting Securities of Sprint
Fidelity Trust Agreement between Sprint Corporation and Fidelity
Management Trust Company
Includes provisions regarding the voting by the Trustee of
shares of Sprint Common Stock in the following plans:
(1) Sprint Retirement Savings Plan for Bargaining
Unit Employees
(2) Sprint Retirement Savings Plan (includes TRASOP
and ESOP Suspense Account)
(3) Centel Retirement Savings Plan for Bargaining
Unit Employees
Centel Employees' Stock Ownership Trust between Centel
Corporation and The Northern Trust Company.
Includes provisions regarding the voting by the
Trustee of shares of Sprint Common Stock in the Centel
ESOP.
Agreement and Plan of Merger dated as of May 27, 1992, among
Sprint Corporation, FW Sub Inc and Centel Corporation (holders of
Centel common stock who have not exchanged their Centel
certificates for Sprint Common Stock are not permitted to vote
the shares of Sprint Common Stock to which they are entitled).
Various agreements with employees under employee stock plans
(restrict transfer of shares of Sprint Common Stock issued to
employees under the plans).
PCS Restructuring Agreement and related agreements with the Cable
Partners.
<PAGE>
Schedule 3.5
A. Governmental Approvals.
1. Satisfaction of all applicable requirements under
state securities or blue sky laws and the filing and
clearance of the Proxy Statement and the IPO
Registration Statement with the SEC.
2. The Series 1 PCS Stock and the Series 1 FON Stock
shall have been approved for listing on the New York
Stock Exchange or if not so approved, shall have been
approved for listing on the American Stock Exchange or
approved for quotation on the National Association of
Securities Dealers Automated National Market System.
3. Filing of the Charter Amendments with the appropriate
Kansas Governmental Authorities.
4. Approvals required for the Restructuring.
(a) 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.
(b) Consents required from the FCC shall have been
granted.
B. Third Party Approvals.
1. Approval of the Charter Amendments and related matters
by the stockholders of Sprint by the requisite vote
C. Defaults, Conflicts, Etc.
Any default (or any event that, with notice or lapse of
time or both, would become a default), or any event which
would give rise to any right of termination by any third
party, or any cancellation, amendment or acceleration of
any obligation or the loss of any benefit under, or the
creation of any Lien on, any of the assets or property of
Sprint or any of its Subsidiaries, arising in each case
solely from a failure to obtain any Governmental Approval
as listed in Section A of this Schedule 3.5 or any Third
Party Approval as listed in Section B of this Schedule 3.5.
D. Violations, Conflicts, Etc. with Applicable Law.
See Sections A and B of this Schedule 3.5.
<PAGE>
Schedule 8.1(a)
Associates of FT
All members of the FT Board of Directors, except for any such
members appointed by either the Government of France or any union
or employee group or any such members representing FT's publicly
traded shares.
Executive Officers:
Chief Executive Officer
Members of the Executive Committee:
Large Business Division
Development Division
Finance Division
Network Division
Residential and Small Business Division
Other Officers:
General Secretary
Director of Human Resources
Director of Public Affairs
Director of Corporate Communications
<PAGE>
Schedule 8.1(b)
Associates of DT*
The term "Associate," as used with respect to DT, shall mean any
person occupying any of the positions below:
A. Management Board Members
1. Chairman of the Management Board
2. Management Board Member, Business Customers
3. Management Board Member, International
4. Management Board Member, Networks
5. Management Board Member, Finance & Auditing
B. General Managers and Others
1. Corporate Policy, Corporate Strategy, Auditing
2. International Mergers & Acquisitions
3. Global Relationships
4. International Networks
5. International Finance/Mergers & Acquisitions
- --------
* In the event of a reorganization of DT, this listing shall
be deemed to be revised to include any successor position
that includes or otherwise incorporates duties and
responsibilities substantially similar in nature and scope
as the duties and responsibilities of the positions listed
herein.
If DT creates the position of General Counsel having
functions and responsibilities comparable to the typical
functions and responsibilities of a General Counsel of a
U.S. public company, such General Counsel position shall
become part of the foregoing list of positions of DT
Associates.
Exhibit 2
- -----------------------------------------------------------------
AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
AMONG
FRANCE TELECOM S.A.,
DEUTSCHE TELEKOM AG
AND
SPRINT CORPORATION
Dated as of ___________, 1998
- -----------------------------------------------------------------
<PAGE>
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT, dated
as of ____________, 1998 (the "Agreement"), among France Telecom
S.A., a societe anonyme 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, Sprint, FT and DT entered into an Investment
Agreement dated as of July 31, 1995, as amended (the "Investment
Agreement") pursuant to which FT and DT purchased shares of
capital stock of Sprint;
WHEREAS, in connection with the transactions contemplated
by the Investment Agreement, Sprint, FT and DT entered into a
Registration Rights Agreement dated as of January 31, 1996 (the
"Original Registration Rights Agreement");
WHEREAS, Sprint, FT and DT entered into a Master
Restructuring and Investment Agreement dated as of May 26, 1998
(the "FT/DT Restructuring Agreement"), which contemplates, among
other things, the purchase by FT and DT of shares of PCS Common
Stock -- Series 3, par value $ per share, of Sprint; and
WHEREAS, as a condition precedent to and in consideration
of the transactions contemplated in the FT/DT Restructuring
Agreement, Sprint, FT and DT are required to enter into this
Agreement and in reliance thereon Sprint, FT and DT have entered
into the FT/DT Restructuring Agreement;
NOW, THEREFORE, in consideration of these premises and the
covenants and agreements contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, each of FT, DT and Sprint, intending to be
legally bound, hereby agree that the Original Registration Rights
Agreement is hereby amended and restated in its entirety as
follows:
Section 1. Registration under the Securities Act.
Section 1.1 Registration on Request. (a) Request. Subject
to Article II of the Amended and Restated 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 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
<PAGE>
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 seven
registrations requested by holders of Eligible Securities
pursuant to this Section 1.1 shall have been effected unless, as
to no more than three 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
three registrations; provided, however, that if the Company
proposes to redeem pursuant to ARTICLE SIXTH, Section 2.2 of the
Articles 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 Amended and Restated 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 either (A) 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 on the
preceding ten Business Days of the Eligible Securities to be
registered (the "Relevant Average Closing Price"), or (B) the
registration relates to the sale of Post-Restructuring Series 3
PCS Shares and both (i) the aggregate market value of the
Post-Restructuring Series 3 PCS Shares so requested to be
registered exceeds $100 million on the date of delivery of the
request for registration based on the Relevant Average Closing
Price with respect to the Series 1 PCS Stock, and (ii) the
registration involves at least the lesser of (x)
Post-Restructuring Series 3 PCS Shares with an aggregate market
value of at least $200 million on the date of delivery of the
request for registration based on the Relevant Average Closing
Price with respect to the Series 1 PCS Stock, and (y) all of the
Post-Restructuring Series 3 PCS Shares owned by the Class A
Holders.
(b) Withdrawal. The Selling Stockholders shall 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 Amended and
Restated Stockholders' Agreement, at any time and from time to
time, may change the Planned Date of any registration
2
<PAGE>
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 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 Amended and Restated 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
3
<PAGE>
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) (A) if the
registration is effected during the CP Preference Period and
involves the sale of Sprint PCS Stock, unless the Company
exercises its option described in clause (ii) below, (w) first,
the Eligible Securities proposed to be included by the Selling
Stockholders, (x) second, so long as the Cable Partner
Registration Rights Agreement is in effect, any securities
requested to be included in such registration by the Cable
Partners, (y) third, 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) fourth, 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 (B) if the registration is not
effected during the CP Preference Period or does not involve the
sale of Sprint PCS Stock, unless the Company exercises its option
described in clause (ii) below, (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 and, so long as the Cable Partner
Registration Rights Agreement is in effect and the offering
involves the issuance of Sprint PCS Stock, the Cable Partners,
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
(provided, however, in the case of this clause (B) if the
registration is during the CP Secondary Preference Period and the
Cable Partner Registration Rights Agreement is in effect, unless
the Cable Partners otherwise consent, any shares of PCS Stock
proposed to be included in such registration by the Company, the
proceeds with respect to which will not be allocated to the PCS
Group, shall be third in priority, and the securities of such
other persons shall be fourth in priority), or (ii) at the option
of the Company, (x) first, the Eligible Securities proposed to be
included by the Selling Stockholders and the securities requested
to be included in such registration by the Company and, so long
as the Cable Partner Registration Rights Agreement is in effect
and the offering involves the sale of Sprint PCS Stock, the Cable
Partners, 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 and, if applicable, the Cable Partners, 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 (and, if applicable,
the Cable Partners') participation on a pro rata basis with the
Selling Stockholders, the managing or lead underwriter
4
<PAGE>
or underwriters determines in its good faith judgment that the
number of securities requested to be included in such
registration by the Selling Stockholders, the Company and, if
applicable, the Cable Partners 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, Series 1 FON Stock
(including Series 2 FON Stock that, upon such distribution would
convert into Series 1 FON Stock), Series 1 PCS Stock (including
Series 2 PCS Stock that, upon such distribution would convert
into Series 1 PCS 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 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.
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(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 which is effected during the CP Preference
Period and involves the sale of Sprint PCS Stock, (w) first, the
securities proposed to be included by the Cable Partners pursuant
to the Cable Partner Registration Rights Agreement (if then in
effect), (x) second, the securities proposed to be included by
the Company, (y) third, the Eligible Securities requested to be
included in such registration by the Selling Stockholders and (z)
fourth, the securities of other Persons requested to be included
in such registration;
(ii) if the registration is a primary registration on
behalf of the Company which is effected after the CP Preference
Period or does not involve the sale of Sprint PCS Stock, (x)
first, the securities proposed to be included by the Company, (y)
second, the Eligible Securities proposed to be included in such
registration by the Selling Stockholders and, if the registration
involves the sale of Sprint PCS Stock, the securities requested
to be included by the Cable Partners pursuant to the Cable
Partner Registration Rights Agreement each pro rata in accordance
with the number of Eligible Securities so proposed to be included
(if then in effect), and (z) third, the securities of 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 (provided,
however, that if the registration is during the CP Secondary
Preference Period and the Cable Partner Registration Rights
Agreement is in effect, unless the Cable Partners otherwise
consent, any shares of PCS Stock proposed to be included in such
registration by the Company, the proceeds with respect to which
will not be allocated to the PCS Group, shall be third in
priority, and the securities of such other persons shall be
fourth in priority); and
(iii) if the registration is a secondary registration
on behalf of a Person or Persons other than the Company or a
holder of Eligible Securities which is effected during the CP
Preference Period and involves the sale of Sprint PCS Stock, (w)
first, the securities proposed to be included by such other
Person or Persons, (x) second, the securities proposed to be
included by the Cable Partners pursuant to the Cable Partner
Registration Rights Agreement (other than the Cable Partner or
Cable Partners, if any, which initiated such secondary
registration), (y) third, 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, and (z) fourth, the securities of any other Persons
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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; and
(iv) if the registration is a secondary registration
on behalf of a Person or Persons other than the Company or a
holder of Eligible Securities which is effected after the CP
Preference Period or does not involve the sale of Sprint PCS
Stock, (w) first, the securities proposed to be included by such
other Person or Persons, (x) second, if such party exercising
demand registration rights is a Cable Partner, then any other
Cable Partners exercising incidental registration rights pursuant
to the Cable Partner Registration Rights Agreement, (y) third,
the securities of the Company, the Eligible Securities requested
to be included in such registration by the Selling Stockholders
and, if the registration involves the sale of Sprint PCS Stock
but the party exercising demand registration rights is not a
Cable Partner, the securities requested to be included by the
Cable Partners pursuant to the Cable Partner Registration Rights
Agreement, each pro rata in accordance with the number of
securities proposed to be registered by the Company and the
number of Eligible Securities and other securities so requested
to be included, respectively, 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;
(provided, however, that if the registration is during the CP
Secondary Preference Period and the Cable Partner Registration
Rights Agreement is in effect, unless the Cable Partners
otherwise consent, any shares of PCS Stock proposed to be
included in such registration by the Company, the proceeds with
respect to which will not be allocated to the PCS Group, shall be
third in priority, and the securities of such other persons shall
be fourth in priority).
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, unless otherwise
provided in an agreement between the Company and another Person
or Persons.
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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 prospectus 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,
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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, 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
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<PAGE>
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
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 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
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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 statement 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
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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, Series 1
FON Stock (including Series 2 FON Stock that, upon such
distribution would convert into Series 1 FON Stock), Series 1 PCS
Stock (including Series 2 PCS Stock that, upon such distribution
would convert into Series 1 PCS 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 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 with respect to which such holder
has a right to participate 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 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
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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
(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
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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. 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
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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
party, 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 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 Amended and Restated
Stockholders' Agreement and the provisions of Section 7.5(a) of
the Amended and Restated 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 Amended and Restated Stockholders
Agreement.
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Section 2. Definitions. Capitalized terms used herein and
not defined in this Section 2 shall have the meanings set forth
in the Amended and Restated Stockholders' Agreement, dated as of
__________, 1998, by and 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.
CP Preference Period: The period beginning on the CP
Registration Rights Commencement Date and ending on the earlier
of (i) the date upon which the Cable Partners have completed
registered public offerings of Registrable Securities (as defined
in the Cable Partner Registration Rights Agreement) with an
aggregate public offering price for such Registrable Securities
of $2,000,000,000 or (ii) the date which is 12 months after the
CP Registration Rights Commencement Date.
CP Registration Rights Commencement Date: (i) if the IPO
(as defined in the FT/DT Restructuring Agreement) is consummated
concurrently with the CP Closing, the date that is 180 days
following the CP Closing, (ii) if the IPO is not consummated
concurrently with the CP Closing but is consummated within 120
days of the CP Closing, the date that is the later of the
ninetieth day following the IPO or 180 days following the CP
Closing, or (iii) if the IPO is not consummated concurrently with
the CP Closing or within 120 days thereafter, the date that is
the 180th day following the CP Closing, unless any Cable Partner
shall decide to exercise one of its rights to a demand
registration after such 120th day following the CP Closing but
prior to such 180th day following the CP Closing, in which case
it shall be the date the demand notice is given pursuant to the
Cable Partner Registration Rights Agreement.
CP Secondary Preference Period: The period ending on the
earlier of (i) the fourth anniversary of the CP Registration
Rights Commencement Date or (ii) the date upon which the Cable
Partners have completed registered public offerings of
Registrable Securities with an aggregate public offering price
for such Registrable Securities of $3,000,000,000.
Eligible Securities: (a) shares of Non-Class A 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 Non-Class A Common Stock, or termination of the
Fundamental Rights, in each case pursuant to ARTICLE SIXTH,
Section 8.5 of the Articles and without violating Article 2 of
the Amended and Restated Standstill Agreement; (b) shares of
Non-Class A 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 Non-Class A 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 Non-Class A 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
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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 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).
PCS Group: The meaning set forth in the Articles.
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 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.
In addition, as used herein, the term "Cable Partners"
shall have the meaning given to such term in the FT/DT
Restructuring Agreement, and the term "Cable Partner Registration
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Rights Agreement" shall mean the Registration Rights Agreement
dated as of __________, 1998 among the Company and the Cable
Partners.
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 Amended and
Restated 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 Amended and Restated Stockholders'
Agreement, in the case of a Qualified Subsidiary, or an
instrument of assumption in the form of Exhibit C to the Amended
and Restated 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.
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: Group Executive Vice President Resources
Tel: (33-1) 44-44-84-72
Fax: (33-1) 44-44-01-51
with a copy to:
6 place d'Alleray
75505 Paris Cedex 15
France
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Attn: General Counsel
Tel: (33-1) 44-44-84-76
Fax: (33-1) 44-12-40-35
with a copy to:
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
U.S.A.
Attn: Alfred J. Ross, Jr., Esq.
Tel: (212) 848-4000
Fax: (212) 848-8434
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:
Cleary, Gottlieb, Steen & Hamilton
One Liberty Plaza
New York, New York 10006
U.S.A.
Attn: Robert P. Davis, Esq.
Tel: (212) 225-2000
Fax: (212) 225-3999
Company: 2330 Shawnee Mission
Parkway, East Wing
Westwood, Kansas 66205
U.S.A.
Attn: General Counsel
Tel: (913) 624-8440
Fax: (913) 624-8426
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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 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.
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
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<PAGE>
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 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
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<PAGE>
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 TO THE EXTENT PERMITTED BY
APPLICABLE LAW. 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 to the extent permitted by applicable law
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 this
Agreement in the English language, and have prepared successive
drafts and the definitive text of this Agreement in the English
language. For purposes of complying with the loi (degree)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 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
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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 under this
Agreement shall be payable in U.S. dollars.
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<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement
to be executed and delivered as of the date first above written.
SPRINT CORPORATION
By:_________________________
Name:
Title:
FRANCE TELECOM S.A.
By:_________________________
Name:
Title:
DEUTSCHE TELEKOM AG
By:_________________________
Name:
Title:
24
Exhibit 3
AMENDED AND RESTATED STANDSTILL AGREEMENT
-----------------------------------------
THIS AMENDED AND RESTATED STANDSTILL AGREEMENT (this
"Agreement") dated as of _______ __, 1998 by and among SPRINT
CORPORATION, a corporation formed under the laws of Kansas
("Sprint"), FRANCE TELECOM S.A., a societe anonyme formed under
the laws of France ("FT"), and DEUTSCHE TELEKOM AG, an
Aktiengesellschaft formed under the laws of Germany ("DT");
R E C I T A L S
---------------
WHEREAS, Sprint, FT and DT entered into an Investment
Agreement dated as of July 31, 1995, as amended (the "Investment
Agreement"), pursuant to which FT and DT purchased shares of
capital stock of Sprint;
WHEREAS, as a condition to Sprint's entering into the
Investment Agreement, Sprint, FT and DT entered into a Standstill
Agreement dated as of July 31, 1995, which agreement was amended
on June 24, 1997 (as so amended, the "Original Standstill
Agreement");
WHEREAS, Sprint, FT and DT entered into a Master
Restructuring and Investment Agreement dated as of May 26, 1998,
(the "FT/DT Restructuring Agreement"), which contemplates, among
other things, the purchase by FT and DT of shares of PCS Common
Stock -- Series 3, par value $ per share, of Sprint;
WHEREAS, as a condition precedent to and in consideration
of the transactions contemplated in the FT/DT Restructuring
Agreement, Sprint, FT and DT are required to enter into this
Agreement and in reliance thereon Sprint, FT and DT have entered
into the FT/DT Restructuring Agreement;
NOW, THEREFORE, in consideration of these premises and the
covenants and agreements contained herein, 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"
and collectively the "Parties"), intending to be legally bound,
hereby agree that the Original Standstill Agreement is hereby
amended and restated in its entirety as follows:
<PAGE>
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 mean any proposal involving a
transaction of the kind described in Section 8.6 of ARTICLE SIXTH
of Sprint's Articles.
"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.
"Amended and Restated Stockholders' Agreement" shall have
the meaning set forth in Article VIII of the FT/DT Restructuring
Agreement.
"Amended Other Agreements" shall mean the FT/DT
Restructuring Agreement, the Amended and Restated Stockholders'
Agreement, the Amended and Restated Registration Rights Agreement
(as defined in the Amended and Restated Stockholders' Agreement),
and the Amended and Restated Confidentiality Agreements (as
defined in the Amended and Restated Stockholders' Agreement).
"Beneficial Owner" (including, with its correlative
meanings, "Beneficially Own" and "Beneficial Ownership"), with
respect to any securities, shall mean any Person which:
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(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 FT/DT Restructuring Agreement and the Amended and Restated
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 (i) Class A Common Stock, Sprint FON Stock and
Sprint PCS 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; (ii)
Sprint FON Stock and Sprint PCS Stock shall not be deemed to be
Beneficially Owned by FT, DT or their Affiliates or Associates by
virtue of the top up rights and standby commitments granted under
the Purchase Rights Agreement except to the extent that FT, DT or
their Affiliates or Associates have (A) acquired shares of Sprint
FON Stock or Sprint PCS Stock pursuant to the Purchase Rights
Agreement, or (B) become irrevocably committed to acquire, and
the Cable Partners have become irrevocably committed to sell,
shares of Sprint FON Stock or Sprint PCS Stock pursuant to the
Purchase Rights Agreement (with such Beneficial Ownership to be
determined on a full-voting basis), subject only to customary
closing conditions, if any; and (iii) FT, DT and their Affiliates
and Associates shall not be deemed to Beneficially Own any
incremental Voting Power resulting solely from the increase in
Voting Power provided for by the application of Section 7.5(d) of
the Articles.
"Cable Partners" means Tele-Communications, Inc., Comcast
Corporation, and Cox Communications, Inc., and any of their
respective successors (by merger, consolidation, transfer or
otherwise) to all or substantially all of their respective
businesses or assets.
"Class A Common Stock" shall mean the Class A Common Stock,
par value U.S. $2.50 per share, of Sprint.
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"Class A Stock" shall mean the Class A Common Stock, the
Series 3 FON Stock and the Series 3 PCS Stock.
"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.
"CP Closing" shall have the meaning set forth in Article
VIII of the FT/DT Restructuring Agreement.
"DT" shall have the meaning set forth in the introductory
paragraph of this Agreement.
"FT" shall have the meaning set forth in the introductory
paragraph of this Agreement.
"FT/DT Restructuring Agreement" means the Master
Restructuring and Investment Agreement dated as of May 26, 1998
by and among Sprint, FT and DT.
"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.
"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 Limitations" shall have the meaning set
forth in Section 2.1(a)(i), as adjusted pursuant to Section
2.2(a).
"Initial Standstill Period" shall have the meaning set
forth in Section 2.1(a)(i).
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"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.
"Number of Shares Issuable With Respect to the Class A
Equity Interest in the FON Group" shall have the meaning set
forth in ARTICLE SIXTH, Section 10 of the Articles of
Incorporation of Sprint, as amended from time to time.
"Number of Shares Issuable With Respect to the Class A
Equity Interest in the PCS Group" shall have the meaning set
forth in ARTICLE SIXTH, Section 10 of the Articles of
Incorporation of Sprint, as amended from time to time.
"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 FON Stock" shall mean the shares of
Sprint FON Stock outstanding as of any particular date, plus (i)
all shares of Sprint FON Stock 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 FT/DT Restructuring Agreement and the
Amended and Restated Stockholders' Agreement, and (ii) the
aggregate Number of Shares Issuable With Respect to the Class A
Equity Interest in the FON Group.
"Outstanding Sprint PCS Stock" shall mean the shares of
Sprint PCS Stock outstanding as of any particular date, plus (i)
all shares of Sprint PCS Stock 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 Amended and Restated Stockholders'
Agreement, plus (ii) the aggregate Number of Shares Issuable With
Respect to the Class A Equity Interest in the PCS Group as of
such date.
"Outstanding Sprint Voting Securities" shall mean (i) the
Sprint Voting Securities outstanding as of any particular date,
plus (ii) 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 Amended and Restated
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.
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"Percentage Limitations" shall have the meaning set forth
in Sections 2.1(a)(i) and 2.1(a)(ii), each as adjusted pursuant
to Section 2.2(a).
"Percentage Limitation Adjustment Event" shall mean the
acquisition by an Other Holder of Beneficial Ownership of
Outstanding Sprint Voting Securities in excess of the applicable
Percentage Limitations as reflected in clause (A) of Section
2.1(a)(i) or clause (A) of Section 2.1(a)(ii), as the case may
be, 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 such applicable Percentage Limitations.
"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.
"Purchase Rights Agreement" shall mean the Top Up Rights
Agreement dated as of May 26, 1998 among FT, DT, Sprint and the
Cable Partners as in effect on such date.
"Qualified Stock Purchaser Standstill Agreement" shall mean
a Standstill Agreement in form and substance satisfactory to
Sprint, FT and DT.
"Qualified Subsidiary Standstill Agreement" shall mean a
Standstill Agreement in the form of Exhibit A.
"Recapitalization" shall have the meaning set forth in
Article VIII of the FT/DT Restructuring Agreement.
"Record Date Period" shall mean a period of ten Trading
Days beginning on the ninth Trading Day (as defined in the
Amended and Restated Stockholders' Agreement) before a record
date for a meeting of Sprint's stockholders or for the payment of
dividends and ending on (and including) such record date (which
shall be a Trading Day).
"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.
"Series 1 FON Stock" shall mean the FON Common Stock --
Series 1, par value U.S. $___ per share, of Sprint to be created
in connection with the Recapitalization.
"Series 1 PCS Stock" shall mean the PCS Common Stock --
Series 1, par value U.S. $___ per share, of Sprint to be created
by the Initial Charter Amendment.
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"Series 2 FON Stock" shall mean the FON Common Stock --
Series 2, par value U.S. $___ per share, of Sprint to be created
by the Subsequent Charter Amendment.
"Series 2 PCS Stock" shall mean the PCS Common Stock --
Series 2, par value U.S. $___ per share, of Sprint to be created
by the Initial Charter Amendment.
"Series 3 FON Stock" shall mean the FON Common Stock --
Series 3, par value U.S. $___ per share, of Sprint to be created
by the Subsequent Charter Amendment.
"Series 3 PCS Stock" shall mean the PCS Common Stock --
Series 3, par value U.S. $___ per share, of Sprint to be created
by the Initial Charter Amendment.
"Sprint" shall have the meaning set forth in the
introductory paragraph of this Agreement.
"Sprint FON Common Stock" shall mean (i) prior to the
Recapitalization, the Common Stock, par value U.S. $2.50 per
share, of Sprint, and (ii) following the Recapitalization, the
Series 1 FON Stock and the Series 2 FON Stock.
"Sprint FON Stock" shall mean the Sprint FON Common Stock
and the Series 3 FON Stock.
"Sprint PCS Common Stock" shall mean the Series 1 PCS Stock
and the Series 2 PCS Stock.
"Sprint PCS Preferred Stock" shall mean the Preferred Stock
- -- Series 7, no par value, of Sprint, which is to be created
prior to the CP Closing.
"Sprint PCS Stock" shall mean the Sprint PCS Common Stock,
the Sprint PCS Preferred Stock and the Series 3 PCS Stock.
"Sprint Rights Plan" shall mean the Rights Agreement dated
as of June 9, 1997, as amended, between Sprint and UMB Bank,
n.a., as rights agent.
"Sprint Voting Securities" shall mean the Sprint FON Common
Stock, the Sprint PCS Common Stock, the Sprint PCS Preferred
Stock, the Class A Stock and any other securities of Sprint
having the right to Vote.
"Strategic Investor" shall mean any Person which owns
directly any equity interests in a Qualified Subsidiary, other
than FT, DT, any wholly owned Subsidiary of FT or DT or a Passive
Financial Institution.
"Strategic Investor Standstill Agreement" shall mean a
Standstill Agreement in the form of Exhibit B.
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"Subsequent Percentage Limitations" shall have the meaning
set forth in Section 2.1(a)(ii), as adjusted pursuant to Section
2.2(a).
"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:
(i) 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;
(ii) with respect to Sprint only, the term "Vote" 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 Beneficially Owns or is committed to
acquire from Sprint or has the right to acquire (or to commit to
acquire) from Sprint pursuant to the Amended and Restated
Stockholders' Agreement;
(iii) except as set forth in clause (iv) of this definition,
with respect to Sprint only, in determining the number of Votes
outstanding at any date and/or represented by any Sprint Voting
Securities at any date, a record date for determining the
stockholders entitled to vote shall be deemed to have been set by
the Board of Directors of Sprint on each such date and
accordingly the number of Votes represented by the Sprint PCS
Stock on any given date shall be deemed to have been adjusted in
the manner provided in Section 3.2 of Article SIXTH of the
Articles as if such date were a record date for determining the
stockholders entitled to vote; and
(iv) notwithstanding clause (iii) of this definition,
during a Record Date Period, the number of Votes outstanding at
any date from and including the first day of such period and to
and including the last day of such period and/or represented by
any Sprint Voting Securities at any date during such period shall
be determined in the manner provided in Section 3.2 of Article
SIXTH with respect to the record date occurring on the last day
of such Record Date Period including, in the case of a record
date for the payment of dividends, as if such date were a record
date for determining the stockholders entitled to vote.
"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, provided that, in the case of Sprint, the
term "Voting Power" shall mean the aggregate number of Votes
represented by all Outstanding Sprint Voting Securities.
In addition to the foregoing, each of the following terms
shall have the respective meanings given to such term in Article
I of the Amended and Restated Stockholders' Agreement: Alien,
Applicable Law, Articles, Associate, Atlas, Change of Control,
Class A Provisions, Exchange Act, FCC, France, Germany,
Governmental Authority, Initial Charter Amendment, Joint Venture
Agreement, Joint Venture Documents, JV Entity, Passive Financial
Institution, Person, Qualified
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Stock Purchaser, Qualified Subsidiary, SEC and Subsidiary.
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 on or prior to July 31,
2010 (the "Initial Standstill Period"), if any of the
following would occur: (A) 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, (B) the Votes
represented by the shares of Class A Common Stock (to
the extent representing a Number of Shares Issuable
With Respect to the Class A Equity Interest in the FON
Group) and Sprint FON Stock Beneficially Owned in the
aggregate by FT, DT and their respective Affiliates
and Associates would represent in the aggregate more
than 33% of the Voting Power represented by the
Outstanding Sprint FON Stock, or (C) the Votes
represented by the shares of Class A Common Stock (to
the extent representing a Number of Shares Issuable
With Respect to the Class A Equity Interest in the PCS
Group) and Sprint PCS Stock Beneficially Owned in the
aggregate by FT, DT and their respective Affiliates
and Associates would
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represent in the aggregate more than 33% of the Voting
Power represented by the Outstanding Sprint PCS Stock
(clauses (A), (B) and (C) being collectively referred
to as the "Initial Percentage Limitations"); or
(ii) any Sprint Voting Securities after the Initial
Standstill Period, if any of the following would
occur: (A) 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, (B) the Votes represented by the
shares of Class A Common Stock (to the extent
representing a Number of Shares Issuable With Respect
to the Class A Equity Interest in the FON Group) and
Sprint FON Stock Beneficially Owned in the aggregate
by FT, DT and their respective Affiliates and
Associates would represent in the aggregate more than
33% of the Voting Power represented by the Outstanding
Sprint FON Stock, (C) the Votes represented by the
shares of Class A Common Stock (to the extent
representing a Number of Shares Issuable With Respect
to the Class A Equity Interest in the PCS Group) and
Sprint PCS Stock Beneficially Owned in the aggregate
by FT, DT and their respective Affiliates and
Associates would represent in the aggregate more than
33% of the Voting Power represented by the Outstanding
Sprint PCS Stock (clauses (A), (B) and (C) being
collectively referred to as the "Subsequent Percentage
Limitations"; the Initial Percentage Limitations and
the Subsequent Percentage Limitations, as the case may
be, also being referred to as the "Percentage
Limitations"), or (D) the Sprint Voting Securities
Beneficially Owned in the aggregate by FT and DT and
their respective Affiliates and Associates would
exceed 80% of the Aggregate Foreign Ownership
Limitation; or
(iii)any Sprint nonvoting equity securities, but not
including any "Derivative Security" (as defined in the
Purchase Rights Agreement) purchased by FT or DT from
the Cable Partners under the Purchase Rights Agreement
so long as the acquisition of the shares acquired as a
result of such derivative instruments is not otherwise
in violation of this Agreement.
(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
Limitations shall be increased to the extent necessary so that
Sections 2.1(a)(i) and 2.1(a)(ii) do not prohibit FT, DT and
their respective Affiliates from acquiring Beneficial Ownership
of additional Sprint Voting Securities so long as each of the
following
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conditions is satisfied: (i) 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 are 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, (ii) the Votes represented by the shares of Class A Common
Stock (to the extent representing a Number of Shares Issuable
With Respect to the Class A Equity Interest in the FON Group) and
Sprint FON Stock Beneficially Owned in the aggregate by FT, DT
and their respective Affiliates and Associates do not represent
in the aggregate more than 33% of the Voting Power represented by
the Outstanding Sprint FON Stock, (iii) the Votes represented by
the shares of Class A Common Stock (to the extent representing a
Number of Shares Issuable With Respect to the Class A Equity
Interest in the PCS Group) and Sprint PCS Stock Beneficially
Owned in the aggregate by FT, DT and their respective Affiliates
and Associates do not represent in the aggregate more than 33% of
the Voting Power represented by the Outstanding Sprint PCS Stock,
and (iv) the Sprint Voting Securities Beneficially Owned in the
aggregate by FT and DT and their respective Affiliates do 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)(ii) or 2.2(a) is prohibited
thereunder due to clause (D) of Section 2.1(a)(ii) or due to
clause (iv) of Section 2.2(a), then FT or DT may assign to one or
more non-Alien Qualified Stock Purchasers in accordance with
Section 7.2 of the Amended and Restated Stockholders' Agreement
their rights under Section 2.1(a)(ii) 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 clause (D) of Section
2.1(a)(ii) or clause (iv) of Section 2.2(a), as the case may be.
Section 2.3. Effect of Action by Sprint; Inadvertent Action.
(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 Limitations (i) solely as a result of an acquisition
of Sprint Voting Securities by Sprint (including as a result of a
redemption by Sprint of its Sprint PCS Preferred Stock) 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, (ii) if FT, DT and their Affiliates and Associates
are in compliance with clauses (B) and (C) of Section 2.1(a)(i)
(or, after the Initial Standstill Period, clauses (B) and (C) of
Section 2.1(a)(ii)), the Beneficial Ownership of Sprint Voting
Securities by FT, DT and their respective Affiliates and
Associates does not exceed the Percentage Limitation set forth in
clause (A) of Section 2.1(a)(i) (or, after the Initial Standstill
Period, clause (A) of Section 2.1(a)(ii)) by more than 0.5% and
the acquisitions of Beneficial Ownership which resulted in FT, DT
and their respective Affiliates and Associates exceeding such
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Percentage Limitation were undertaken in good faith and such
applicable Percentage Limitation was exceeded inadvertently,
(iii) solely as a result of any readjustment in the relative
Voting Power of the Sprint FON Stock and the Sprint PCS Stock in
accordance with the terms of the Articles, (iv) solely as a
result of a redemption or conversion of any Sprint PCS Stock
pursuant to ARTICLE SIXTH, Section 7 of the Articles, or (v)
because FT, DT or their respective Affiliates or Associates
acquire Beneficial Ownership of Sprint Voting Securities in
excess of the applicable Percentage Limitations in reliance on
information regarding the number of outstanding shares of Sprint
provided directly to any of FT, DT and their respective
Affiliates and Associates by Sprint in response to a request for
such information by any of FT, DT and their respective Affiliates
and Associates immediately prior to such purchase.
(b) Notwithstanding Section 2.3(a), the applicable
Percentage Limitations 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 (including
as a result of a redemption by Sprint of its Sprint PCS Preferred
Stock), (ii) in the case of Section 2.3(a)(ii), FT, DT or any of
their respective Affiliates or Associates acquires Beneficial
Ownership of any additional Sprint Voting Securities after it has
been notified or has knowledge that one or more of the applicable
Percentage Limitations has been exceeded, (iii) in the case of
Section 2.3(a)(iii), after a readjustment in the relative Voting
Power of the Sprint FON Stock and the Sprint PCS Stock which
results in FT, DT and their respective Affiliates and Associates
having Beneficial Ownership of Sprint Voting Securities in excess
of any of the applicable Percentage Limitations, FT, DT or any of
their respective Affiliates or Associates acquires Beneficial
Ownership of any additional Sprint Voting Securities, after being
notified of, or having knowledge of such readjustment in the
relative Voting Power, (iv) in the case of Section 2.3(a)(iv),
after the redemption or conversion of any Sprint PCS Stock
pursuant to ARTICLE SIXTH, Section 7 of the Articles which
results in FT, DT and their respective Affiliates and Associates
having Beneficial Ownership of Sprint Voting Securities in excess
of any of the applicable Percentage Limitations, FT, DT or any of
their respective Affiliates or Associates acquires Beneficial
Ownership of any additional Sprint Voting Securities after being
notified of, or having knowledge of, such redemption or
conversion, and (v) in the case of Section 2.3(a)(v), 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 clauses (i), (ii), (iii), (iv) and (v):
(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 any of the applicable
Percentage Limitations, or
(y) subject to the rights of Sprint in Section 5.7 of
the Amended and Restated Stockholders' Agreement, such
acquisition is effected pursuant to (A) the exercise of
equity purchase rights by FT or DT pursuant to the Amended
and Restated Stockholders' Agreement, or (B) market
purchases which are made solely in lieu of the exercise of
equity
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purchase rights by FT or DT pursuant to the Amended and
Restated 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 Limitations 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 Limitations 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
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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
Amended Other Agreements and the Joint Venture Documents:
(a) effect, seek, offer, propose (whether publicly or
otherwise) or cause or participate in, or assist any other Person
to effect, seek, offer or propose (whether publicly or otherwise)
or participate in:
(i) any acquisition of Beneficial Ownership of Sprint
Voting Securities or other equity interests in Sprint
which would result in a breach of Article 2 of this
Agreement;
(ii) any tender or exchange offer, merger, consolidation,
share exchange or business combination involving
Sprint or any material portion of its business or any
purchase of all or any substantial part of the assets
of Sprint or any material portion of its business,
provided that nothing in this clause (ii) shall
prohibit discussions by the Parties in connection with
the conduct of the business of the JV Entities in the
manner contemplated by the Joint Venture Documents or
in connection with offers by FT or DT to purchase
equity interests owned by Sprint in the JV Entities;
(iii)any recapitalization, restructuring, liquidation,
dissolution or other extraordinary transaction with
respect to Sprint or any material portion of its
business, provided that nothing in this clause (iii)
shall prohibit discussions by the Parties in
connection with the conduct of the business of the JV
Entities or in connection with offers by FT or DT to
purchase equity interests owned by Sprint in the JV
Entities; or
(iv) any "solicitation" of "proxies" (as such terms are
used in the proxy rules of the SEC but without regard
to the exclusion set forth in Section 14a-1(l)(2)(iv)
from the definition of "solicitation") with respect to
Sprint or any of its Affiliates or any action
resulting in such Person becoming a "participant" in
any "election contest" (as such terms are used in the
proxy rules of the SEC) with respect to Sprint or any
of its Affiliates;
(b) propose any matter for submission to a vote of
stockholders of Sprint or any of its Affiliates; provided that
nothing in this Section 3.1(b) shall restrict the manner in which
the members of the Board of Directors of Sprint elected by the
holders of Class A Stock may (i) vote on any matter submitted to
such Board, or (ii) participate in deliberations or discussions
of such Board (including making suggestions and raising issues to
the Board, so long as such actions do not otherwise violate any
other provision of this Section 3.1 or Section 3.2) in their
capacity as members of such Board and in no other capacity,
including any capacity such persons serving as directors
otherwise may have as a director, officer, employee, agent or
representative of any other Person, including any holder of Class
A Stock;
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(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, (iii) any vote by the holders of Class A Common
Stock, Series 3 FON Stock, or Series 3 PCS Stock with respect to
which holders of each such class or series of stock is entitled
to vote separately as a class, or (iv) any vote by the holders of
the Class A Stock with respect to which such holders are entitled
to vote together as a single class;
(g) take any other action to seek to affect the
control of the management or Board of Directors of Sprint or any
of its Affiliates; provided that nothing in this Section 3.1(g)
shall restrict the manner in which the members of the Board of
Directors of Sprint elected by the holders of Class A Stock may
(i) vote on any matter submitted to such Board, or (ii)
participate in deliberations or discussions of such Board
(including making suggestions and raising issues to the Board, so
long as such actions do not otherwise violate any other provision
of this Section 3.1 or Section 3.2) in their capacity as members
of such Board and in no other capacity, including any capacity
such persons serving as directors otherwise may have as a
director, officer, employee, agent or representative of any other
Person, including any holder of Class A Stock;
(h) enter into any discussions, negotiations,
arrangements or understandings with any Person (including any
Government Affiliate, Related Company or Qualified Stock
Purchaser) other than FT, DT, their Affiliates, Associates and
their respective directors, officers, employees, agents or
advisors with respect to any of the foregoing, or advise, assist,
encourage or seek to persuade others to take any action with
respect to any of the foregoing;
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<PAGE>
(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.
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Section 3.5. Notice of Proposals Regarding Acquisition
Transactions. Each of FT and DT agrees that it will notify Sprint
promptly if any inquiries or proposals which FT or DT reasonably
believes are of substance are received by, any information is
exchanged with respect to, or any negotiations or substantive
discussions are initiated or continued with, FT or DT or any of
their respective Affiliates regarding any Acquisition Proposal
involving Sprint or any purchase of any of the shares of capital
stock of Sprint Beneficially Owned by FT, DT or any of their
respective Affiliates pursuant to a tender offer or exchange
offer.
ARTICLE 4.
OBLIGATIONS OF OTHER ENTITIES
Section 4.1. Qualified Subsidiaries. FT and DT shall cause
each Person which, as a result of the acquisition of Beneficial
Ownership of any Sprint Voting Securities, would become a
Qualified Subsidiary to execute a Qualified Subsidiary Standstill
Agreement prior to and as a condition to the effectiveness of
such acquisition.
Section 4.2. Strategic Investors. FT and DT shall cause
each Person which, as a result of an acquisition of Beneficial
Ownership of any equity interest in a Qualified Subsidiary, would
become a Strategic Investor (and any Person who Beneficially Owns
more than 35% of the Voting Power, or otherwise Controls, such
acquiring Person) to execute a Strategic Investor Standstill
Agreement prior to and as a condition to the effectiveness of
such acquisition.
ARTICLE 5.
MISCELLANEOUS
Section 5.1. Termination. The provisions of this Agreement
shall terminate if the Company proceeds with a transaction
involving a Change of Control following the process described in
Section 4.1 of the Amended and Restated Stockholders' Agreement.
Any termination of this 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:
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<PAGE>
FT: 6 place d'Alleray
75505 Paris Cedex 15
France
Attention: Group Executive Vice President
Resources
Tel: (33-1) 44-44-84-72
Fax: (33-1) 44-44-01-51
with a copy to:
6 place d'Alleray
75505 Paris Cedex 15
France
Attention: General Counsel
Tel: (33-1) 44-44-84-76
Fax: (33-1) 44-12-40-35
and with a copy to:
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
U.S.A.
Attention: Alfred J. Ross, Jr., Esq.
Tel: (212) 848-4000
Fax: (212) 848-8434
DT: Friedrich-Ebert-Allee 140
D-53113 Bonn
Germany
Attention: Chief Executive Officer
Tel: 49-228-181-9000
Fax: 49-228-181-8970
with a copy to:
Cleary, Gottlieb, Steen & Hamilton
One Liberty Plaza
New York, New York 10006
U.S.A.
Attention: Robert P. Davis, Esq.
Tel: (212) 225-2000
Fax: (212) 225-3999
Sprint: 2330 Shawnee Mission Parkway
East Wing
Westwood, Kansas 66205
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<PAGE>
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 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.
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<PAGE>
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
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<PAGE>
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 TO THE EXTENT PERMITTED BY APPLICABLE
LAW. 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, to the
extent permitted by Applicable Law 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 this Agreement in the English language, and have
prepared successive drafts and the definitive text of this
Agreement in the English language. For purposes of complying with
loi n(degree) 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.
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<PAGE>
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. ss. 1602, et seq. The foregoing waiver shall
constitute a present waiver of immunity at any time any action is
initiated against FT or DT with respect to this Agreement.
Section 5.12. Remedies. In addition to any other remedies
which may be available to Sprint (including any remedies which
Sprint may have at law or in equity):
(a) Each of FT and DT agrees that Sprint shall have no
obligation to honor transfers of Sprint Voting Securities or
other equity interests in Sprint to FT, DT or any of their
respective Affiliates or Associates which would cause any of FT,
DT and their respective Affiliates or Associates to Beneficially
Own Sprint Voting Securities or other equity interests in Sprint
in violation of this Agreement, any such transfers shall be void
and of no effect, and Sprint shall be entitled to instruct any
transfer agent or agents for the equity interests in Sprint to
refuse to honor such transfers; and
(b) FT and DT acknowledge the provisions set forth in
ARTICLE SIXTH, Section 2.5 of the Articles, ARTICLE SIXTH,
Section 8.5(b) of the Articles, and Section 3.5 and Article VIII
of the Amended and Restated 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.
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IN WITNESS WHEREOF, Sprint, FT and DT have caused their
respective duly authorized officers to execute this Agreement as
of the day and year first above written.
SPRINT CORPORATION
By:____________________________
Name:
Title:
FRANCE TELECOM S.A.
By:____________________________
Name:
Title:
DEUTSCHE TELEKOM AG
By:____________________________
Name:
Title
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EXHIBIT A
STANDSTILL AGREEMENT
THIS STANDSTILL AGREEMENT (this "Agreement") dated as of
_______ __, 1998 by and among SPRINT CORPORATION, a corporation
formed under the laws of Kansas ("Sprint") and [QUALIFIED
SUBSIDIARY], a [company] [partnership] formed under the laws of
______________ ("Transferee").
R E C I T A L S
WHEREAS, Sprint, France Telecom S.A. and Deutsche Telekom
AG entered into an Investment Agreement dated as of July 31,
1995, as amended (the "Investment Agreement"), pursuant to which
FT and DT purchased shares of capital stock of Sprint;
WHEREAS, as a condition to Sprint's entering into the
Investment Agreement, Sprint, FT and DT entered into a Standstill
Agreement dated as of July 31, 1995, which agreement was amended
on June 24, 1997 (as so amended, the "Original Standstill
Agreement");
WHEREAS, Sprint, FT and DT entered into a Master
Restructuring and Investment Agreement dated as of May 26, 1998,
(the "FT/DT Restructuring Agreement"), which contemplates, among
other things, the purchase by FT and DT of shares of PCS Common
Stock -- Series 3, par value $ per share, of Sprint;
WHEREAS, as a condition to its entering into the FT/DT
Restructuring Agreement, Sprint required FT and DT to enter into
that certain Amended and Restated Standstill Agreement dated as
of _____________, 1998 (the "Standstill 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;
WHEREAS, Section 4.1 of the Standstill Agreement provides
that FT and DT shall cause each Qualified Subsidiary which
acquires any shares of Sprint Voting Securities to execute a
Qualified Subsidiary Standstill Agreement prior to and as a
condition to the effectiveness of such acquisition;
WHEREAS, Transferee is a Qualified Subsidiary to which [FT
and DT] has indicated that it intends to transfer Sprint Voting
Securities; and
WHEREAS, this Agreement is the Qualified Subsidiary
Standstill Agreement which Transferee is executing in compliance
with Section 4.1 of the Standstill Agreement.
NOW, THEREFORE, in consideration of these premises and the
covenants and agreements contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which
<PAGE>
are hereby acknowledged, Transferee and Sprint (each a "Party"
and collectively the "Parties"), intending to be legally bound,
hereby agree as follows:
ARTICLE 1.
DEFINITIONS AND CONSTRUCTION
Section 1.1. Certain Definitions. As used in this
Agreement, the following terms shall have the meanings specified
below:
"Acquisition Proposal" shall mean any proposal involving a
transaction of the kind described in Section 8.6 of ARTICLE SIXTH
of Sprint's Articles.
"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.
"Amended and Restated Stockholders' Agreement" shall have
the meaning set forth in Article VIII of the FT/DT Restructuring
Agreement.
"Amended Other Agreements" shall mean the FT/DT
Restructuring Agreement, the Amended and Restated Stockholders'
Agreement, the Amended and Restated Registration Rights Agreement
(as defined in the Amended and Restated Stockholders' Agreement),
and the Amended and Restated Confidentiality Agreements (as
defined in the Amended and Restated Stockholders' Agreement).
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"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 FT/DT Restructuring Agreement and the Amended and Restated
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 (i) Class A Common Stock, Sprint FON Stock and
Sprint PCS 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; (ii)
Sprint FON Stock and Sprint PCS Stock shall not be deemed to be
Beneficially Owned by FT, DT or their Affiliates or Associates by
virtue of the top up rights and standby commitments granted under
the Purchase Rights Agreement except to the extent that FT, DT or
their Affiliates or Associates have (A) acquired shares of Sprint
FON Stock or Sprint PCS Stock pursuant to the Purchase Rights
Agreement, or (B) become irrevocably committed to acquire, and
the Cable Partners have become irrevocably committed to sell,
shares of Sprint FON Stock or Sprint PCS Stock pursuant to the
Purchase Rights Agreement (with such Beneficial Ownership to be
determined on a full-voting basis), subject only to customary
closing conditions, if any; and (iii) FT, DT and their Affiliates
and Associates shall not be deemed to Beneficially Own any
incremental Voting Power resulting solely from the increase in
Voting Power provided for by the application of Section 7.5(d) of
the Articles.
"Cable Partners" means Tele-Communications, Inc., Comcast
Corporation, and Cox Communications, Inc., and any of their
respective successors (by merger, consolidation, transfer or
otherwise) to all or substantially all of their respective
businesses or assets.
"Class A Common Stock" shall mean the Class A Common Stock,
par value U.S. $2.50 per share, of Sprint.
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"Class A Stock" shall mean the Class A Common Stock, the
Series 3 FON Stock and the Series 3 PCS Stock.
"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.
"Controlled Affiliates," with respect to the Transferee,
shall mean any Affiliates of the Transferee which are, directly
or indirectly, controlled by the Transferee.
"CP Closing" shall have the meaning set forth in Article
VIII of the FT/DT Restructuring Agreement.
"DT" shall have the meaning set forth in the introductory
paragraph of this Agreement.
"FT" shall have the meaning set forth in the introductory
paragraph of this Agreement.
"FT/DT Restructuring Agreement" means the Master
Restructuring and Investment Agreement dated as of May 26, 1998
by and among Sprint, FT and DT.
"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.
"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 Limitations" shall have the meaning set
forth in Section 2.1(a)(i), as adjusted pursuant to Section
2.2(a).
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"Initial Standstill Period" shall have the meaning set
forth in Section 2.1(a)(i).
"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.
"Number of Shares Issuable With Respect to the Class A
Equity Interest in the FON Group" shall have the meaning set
forth in ARTICLE SIXTH, Section 10 of the Articles of
Incorporation of Sprint, as amended from time to time.
"Number of Shares Issuable With Respect to the Class A
Equity Interest in the PCS Group" shall have the meaning set
forth in ARTICLE SIXTH, Section 10 of the Articles of
Incorporation of Sprint, as amended from time to time.
"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 FON Stock" shall mean the shares of
Sprint FON Stock outstanding as of any particular date, plus (i)
all shares of Sprint FON Stock 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 FT/DT Restructuring Agreement and the
Amended and Restated Stockholders' Agreement, and (ii) the
aggregate Number of Shares Issuable With Respect to the Class A
Equity Interest in the FON Group.
"Outstanding Sprint PCS Stock" shall mean the shares of
Sprint PCS Stock outstanding as of any particular date, plus (i)
all shares of Sprint PCS Stock 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 Amended and Restated Stockholders'
Agreement, plus (ii) the aggregate Number of Shares Issuable With
Respect to the Class A Equity Interest in the PCS Group as of
such date.
"Outstanding Sprint Voting Securities" shall mean (i) the
Sprint Voting Securities outstanding as of any particular date,
plus (ii) 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 Amended and Restated
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.
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"Percentage Limitations" shall have the meaning set forth
in Sections 2.1(a)(i) and 2.1(a)(ii), each as adjusted pursuant
to Section 2.2(a).
"Percentage Limitation Adjustment Event" shall mean the
acquisition by an Other Holder of Beneficial Ownership of
Outstanding Sprint Voting Securities in excess of the applicable
Percentage Limitations as reflected in clause (A) of Section
2.1(a)(i) or clause (A) of Section 2.1(a)(ii), as the case may
be, 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 such applicable Percentage Limitations.
"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.
"Purchase Rights Agreement" shall mean the Top Up Rights
Agreement dated as of May 26, 1998 among FT, DT, Sprint and the
Cable Partners as in effect on such date.
"Qualified Stock Purchaser Standstill Agreement" shall mean
a Standstill Agreement in form and substance satisfactory to
Sprint, FT and DT.
"Qualified Subsidiary Standstill Agreement" shall mean a
Standstill Agreement in the form of Exhibit A to the Standstill
Agreement.
"Recapitalization" shall have the meaning set forth in
Article VIII of the FT/DT Restructuring Agreement.
"Record Date Period" shall mean a period of ten Trading
Days beginning on the ninth Trading Day (as defined in the
Amended and Restated Stockholders' Agreement) before a record
date for a meeting of Sprint's stockholders or for the payment of
dividends and ending on (and including) such record date (which
shall be a Trading Day).
"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.
"Series 1 FON Stock" shall mean the FON Common Stock --
Series 1, par value U.S. $___ per share, of Sprint to be created
in connection with the Recapitalization.
"Series 1 PCS Stock" shall mean the PCS Common Stock --
Series 1, par value U.S. $___ per share, of Sprint to be created
by the Initial Charter Amendment.
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"Series 2 FON Stock" shall mean the FON Common Stock --
Series 2, par value U.S. $___ per share, of Sprint to be created
by the Subsequent Charter Amendment.
"Series 2 PCS Stock" shall mean the PCS Common Stock --
Series 2, par value U.S. $___ per share, of Sprint to be created
by the Initial Charter Amendment.
"Series 3 FON Stock" shall mean the FON Common Stock --
Series 3, par value U.S. $___ per share, of Sprint to be created
by the Subsequent Charter Amendment.
"Series 3 PCS Stock" shall mean the PCS Common Stock --
Series 3, par value U.S. $___ per share, of Sprint to be created
by the Initial Charter Amendment.
"Sprint" shall have the meaning set forth in the
introductory paragraph of this Agreement.
"Sprint FON Common Stock" shall mean (i) prior to the
Recapitalization, the Common Stock, par value U.S. $2.50 per
share, of Sprint, and (ii) following the Recapitalization, the
Series 1 FON Stock and the Series 2 FON Stock.
"Sprint FON Stock" shall mean the Sprint FON Common Stock
and the Series 3 FON Stock.
"Sprint PCS Common Stock" shall mean the Series 1 PCS Stock
and the Series 2 PCS Stock.
"Sprint PCS Preferred Stock" shall mean the Preferred Stock
- -- Series 7, no par value, of Sprint, which is to be created
prior to the CP Closing.
"Sprint PCS Stock" shall mean the Sprint PCS Common Stock,
the Sprint PCS Preferred Stock and the Series 3 PCS Stock.
"Sprint Rights Plan" shall mean the Rights Agreement dated
as of June 9, 1997, as amended, between Sprint and UMB Bank,
n.a., as rights agent.
"Sprint Voting Securities" shall mean the Sprint FON Common
Stock, the Sprint PCS Common Stock, the Sprint PCS Preferred
Stock, the Class A Stock and any other securities of Sprint
having the right to Vote.
"Strategic Investor" shall mean any Person which owns
directly any equity interests in a Qualified Subsidiary, other
than FT, DT, any wholly owned Subsidiary of FT or DT or a Passive
Financial Institution.
"Strategic Investor Standstill Agreement" shall mean a
Standstill Agreement in the form of Exhibit B to the Standstill
Agreement.
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"Subsequent Percentage Limitations" shall have the meaning
set forth in Section 2.1(a)(ii), as adjusted pursuant to Section
2.2(a).
"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:
(i) 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;
(ii) with respect to Sprint only, the term "Vote" 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 Beneficially Owns or is committed to
acquire from Sprint or has the right to acquire (or to commit to
acquire) from Sprint pursuant to the Amended and Restated
Stockholders' Agreement;
(iii) except as set forth in clause (iv) of this
definition, with respect to Sprint only, in determining the
number of Votes outstanding at any date and/or represented by any
Sprint Voting Securities at any date, a record date for
determining the stockholders entitled to vote shall be deemed to
have been set by the Board of Directors of Sprint on each such
date and accordingly the number of Votes represented by the
Sprint PCS Stock on any given date shall be deemed to have been
adjusted in the manner provided in Section 3.2 of Article SIXTH
of the Articles as if such date were a record date for
determining the stockholders entitled to vote; and
(iv) notwithstanding clause (iii) of this definition,
during a Record Date Period, the number of Votes outstanding at
any date from and including the first day of such period and to
and including the last day of such period and/or represented by
any Sprint Voting Securities at any date during such period shall
be determined in the manner provided in Section 3.2 of Article
SIXTH with respect to the record date occurring on the last day
of such Record Date Period including, in the case of a record
date for the payment of dividends, as if such date were a record
date for determining the stockholders entitled to vote.
"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, provided that, in the case of Sprint, the
term "Voting Power" shall mean the aggregate number of Votes
represented by all Outstanding Sprint Voting Securities.
In addition to the foregoing, each of the following terms
shall have the respective meanings given to such term in Article
I of the Amended and Restated Stockholders' Agreement: Alien,
Applicable Law, Articles, Associate, Atlas, Change of Control,
Class A Provisions, Exchange Act, FCC, France, Germany,
Governmental Authority, Initial Charter Amendment, Joint Venture
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Agreement, Joint Venture Documents, JV Entity, Passive Financial
Institution, Person, Qualified Stock Purchaser, Qualified
Subsidiary, SEC and Subsidiary.
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
TRANSFEREE AND ITS AFFILIATES AND ASSOCIATES
Section 2.1. Acquisition Restrictions.
(a) Subject to Sections 2.2, 2.3 and 2.4, Transferee
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 on or prior to July 31,
2010 (the "Initial Standstill Period"), if any of the
following would occur: (A) 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, (B) the Votes
represented by the shares of Class A Common Stock (to
the extent representing a Number of Shares Issuable
With Respect to the Class A Equity Interest in the FON
Group) and Sprint FON Stock Beneficially Owned in the
aggregate by FT, DT and their respective Affiliates
and Associates would represent in the aggregate more
than 33% of the Voting Power represented by the
Outstanding Sprint FON Stock, or (C) the Votes
represented by the shares of Class A Common Stock (to
the extent representing a Number of Shares Issuable
With Respect to the Class A Equity Interest in the PCS
Group) and Sprint PCS Stock Beneficially Owned in the
aggregate by FT, DT and their respective Affiliates
and Associates would represent in the aggregate more
than 33% of the Voting Power represented by the
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Outstanding Sprint PCS Stock (clauses (A), (B) and (C)
being collectively referred to as the "Initial
Percentage Limitations"); or
(ii) any Sprint Voting Securities after the Initial
Standstill Period, if any of the following would
occur: (A) 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, (B) the Votes represented by the
shares of Class A Common Stock (to the extent
representing a Number of Shares Issuable With Respect
to the Class A Equity Interest in the FON Group) and
Sprint FON Stock Beneficially Owned in the aggregate
by FT, DT and their respective Affiliates and
Associates would represent in the aggregate more than
33% of the Voting Power represented by the Outstanding
Sprint FON Stock, (C) the Votes represented by the
shares of Class A Common Stock (to the extent
representing a Number of Shares Issuable With Respect
to the Class A Equity Interest in the PCS Group) and
Sprint PCS Stock Beneficially Owned in the aggregate
by FT, DT and their respective Affiliates and
Associates would represent in the aggregate more than
33% of the Voting Power represented by the Outstanding
Sprint PCS Stock (clauses (A), (B) and (C) being
collectively referred to as the "Subsequent Percentage
Limitations"; the Initial Percentage Limitations and
the Subsequent Percentage Limitations, as the case may
be, also being referred to as the "Percentage
Limitations"), or (D) the Sprint Voting Securities
Beneficially Owned in the aggregate by FT and DT and
their respective Affiliates and Associates would
exceed 80% of the Aggregate Foreign Ownership
Limitation; or
(iii) any Sprint nonvoting equity securities, but not
including any "Derivative Security" (as defined in the
Purchase Rights Agreement) purchased by FT or DT from
the Cable Partners under the Purchase Rights Agreement
so long as the acquisition of the shares acquired as a
result of such derivative instruments is not otherwise
in violation of this Agreement.
(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
Limitations shall be increased to the extent necessary so that
Sections 2.1(a)(i) and 2.1(a)(ii) do not prohibit Transferee from
acquiring Beneficial Ownership of additional Sprint Voting
Securities so long as each of the following conditions is
satisfied: (i) the Votes represented by the Sprint Voting
Securities Beneficially Owned in the aggregate by FT, DT and
their
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respective Affiliates and Associates and any Qualified Stock
Purchasers are 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, (ii) the
Votes represented by the shares of Class A Common Stock (to the
extent representing a Number of Shares Issuable With Respect to
the Class A Equity Interest in the FON Group) and Sprint FON
Stock Beneficially Owned in the aggregate by FT, DT and their
respective Affiliates and Associates do not represent in the
aggregate more than 33% of the Voting Power represented by the
Outstanding Sprint FON Stock, (iii) the Votes represented by the
shares of Class A Common Stock (to the extent representing a
Number of Shares Issuable With Respect to the Class A Equity
Interest in the PCS Group) and Sprint PCS Stock Beneficially
Owned in the aggregate by FT, DT and their respective Affiliates
and Associates do not represent in the aggregate more than 33% of
the Voting Power represented by the Outstanding Sprint PCS Stock,
and (iv) the Sprint Voting Securities Beneficially Owned in the
aggregate by FT and DT and their respective Affiliates do not at
any time exceed 80% of the Aggregate Foreign Ownership
Limitation.
(b) Subject to Section 2.4, if an acquisition by
Transferee of Beneficial Ownership of additional Sprint Voting
Securities otherwise permitted by Section 2.1(a)(ii) or 2.2(a) is
prohibited thereunder due to clause (D) of Section 2.1(a)(ii) or
due to clause (iv) of Section 2.2(a), then Transferee may assign
to one or more non-Alien Qualified Stock Purchasers in accordance
with Section 7.2 of the Amended and Restated Stockholders'
Agreement its rights under Section 2.1(a)(ii) 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 clause (D) of
Section 2.1(a)(ii) or clause (iv) of Section 2.2(a), as the case
may be.
Section 2.3. Effect of Action by Sprint; Inadvertent
Action.
(a) Subject to Section 2.3(b), Transferee shall not 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
Limitations (i) solely as a result of an acquisition of Sprint
Voting Securities by Sprint (including as a result of a
redemption by Sprint of its Sprint PCS Preferred Stock) 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, (ii) if FT, DT and their Affiliates and Associates
are in compliance with clauses (B) and (C) of Section 2.1(a)(i),
the Beneficial Ownership of Sprint Voting Securities by FT, DT
and their respective Affiliates and Associates does not exceed
the Percentage Limitation set forth in clause (A) of Section
2.1(a)(i) (or, after the Initial Standstill Period, clause (A) of
Section 2.1(a)(ii)) by more than 0.5% and the acquisitions of
Beneficial Ownership which resulted in FT, DT and their
respective Affiliates and Associates exceeding such Percentage
Limitation were undertaken in good faith and such applicable
Percentage Limitation was exceeded inadvertently, (iii) solely as
a result of any readjustment in the relative Voting Power of the
Sprint FON Stock and the Sprint PCS Stock in accordance with the
terms of the Articles, (iv) solely as a result of a redemption or
conversion of any Sprint PCS Stock pursuant to ARTICLE SIXTH,
Section 7 of the Articles, or (v) because FT, DT or their
respective Affiliates or Associates
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acquire Beneficial Ownership of Sprint Voting Securities in
excess of the applicable Percentage Limitations in reliance on
information regarding the number of outstanding shares of Sprint
provided directly to any of FT, DT and their respective
Affiliates and Associates by Sprint in response to a request for
such information by any of FT, DT and their respective Affiliates
and Associates immediately prior to such purchase.
(b) Notwithstanding Section 2.3(a), the applicable
Percentage Limitations 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 (including
as a result of a redemption by Sprint of its Sprint PCS Preferred
Stock), (ii) in the case of Section 2.3(a)(ii), FT, DT or any of
their respective Affiliates or Associates acquires Beneficial
Ownership of any additional Sprint Voting Securities after it has
been notified or has knowledge that one or more of the applicable
Percentage Limitations has been exceeded, (iii) in the case of
Section 2.3(a)(iii), after a readjustment in the relative Voting
Power of the Sprint FON Stock and the Sprint PCS Stock which
results in FT, DT and their respective Affiliates and Associates
having Beneficial Ownership of Sprint Voting Securities in excess
of any of the applicable Percentage Limitations, FT, DT or any of
their respective Affiliates or Associates acquires Beneficial
Ownership of any additional Sprint Voting Securities, after being
notified of, or having knowledge of such readjustment in the
relative Voting Power, (iv) in the case of Section 2.3(a)(iv),
after the redemption or conversion of any Sprint PCS Stock
pursuant to ARTICLE SIXTH, Section 7 of the Articles which
results in FT, DT and their respective Affiliates and Associates
having Beneficial Ownership of Sprint Voting Securities in excess
of any of the applicable Percentage Limitations, FT, DT or any of
their respective Affiliates or Associates acquires Beneficial
Ownership of any additional Sprint Voting Securities after being
notified of, or having knowledge of, such redemption or
conversion, and (v) in the case of Section 2.3(a)(v), 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 clauses (i), (ii), (iii), (iv) and (v):
(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 any of the applicable
Percentage Limitations, or
(y) subject to the rights of Sprint in Section 5.7 of
the Amended and Restated Stockholders' Agreement, such
acquisition is effected pursuant to (A) the exercise of
equity purchase rights by Transferee, FT or DT pursuant to
the Amended and Restated Stockholders' Agreement, or (B)
market purchases which are made solely in lieu of the
exercise of equity purchase rights by Transferee, FT or DT
pursuant to the Amended and Restated Stockholders'
Agreement following the issuance of securities by Sprint,
so long as (1) either (I) Transferee, 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
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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, Transferee agrees that it will not, and will cause each of
its Controlled 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 Transferee, any of the
Controlled Affiliates of Transferee or 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 Limitations 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 Limitations 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. Transferee agrees that
it will not, and it will cause each of its Controlled Affiliates
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 Amended Other Agreements and the Joint Venture
Documents:
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(a) effect, seek, offer, propose (whether publicly or
otherwise) or cause or participate in, or assist any other Person
to effect, seek, offer or propose (whether publicly or otherwise)
or participate in:
(i) any acquisition of Beneficial Ownership of Sprint
Voting Securities or other equity interests in Sprint
which would result in a breach of Article 2 of this
Agreement;
(ii) any tender or exchange offer, merger, consolidation,
share exchange or business combination involving
Sprint or any material portion of its business or any
purchase of all or any substantial part of the assets
of Sprint or any material portion of its business,
provided that nothing in this clause (ii) shall
prohibit discussions by the Parties in connection with
the conduct of the business of the JV Entities in the
manner contemplated by the Joint Venture Documents or
in connection with offers by FT or DT to purchase
equity interests owned by Sprint in the JV Entities;
(iii) any recapitalization, restructuring, liquidation,
dissolution or other extraordinary transaction with
respect to Sprint or any material portion of its
business, provided that nothing in this clause (iii)
shall prohibit discussions by the Parties in
connection with the conduct of the business of the JV
Entities or in connection with offers by FT or DT to
purchase equity interests owned by Sprint in the JV
Entities; or
(iv) any "solicitation" of "proxies" (as such terms are
used in the proxy rules of the SEC but without regard
to the exclusion set forth in Section 14a-1(l)(2)(iv)
from the definition of "solicitation") with respect to
Sprint or any of its Affiliates or any action
resulting in such Person becoming a "participant" in
any "election contest" (as such terms are used in the
proxy rules of the SEC) with respect to Sprint or any
of its Affiliates;
(b) propose any matter for submission to a vote of
stockholders of Sprint or any of its Affiliates; provided that
nothing in this Section 3.1(b) shall restrict the manner in which
the members of the Board of Directors of Sprint elected by the
holders of Class A Stock may (i) vote on any matter submitted to
such Board, or (ii) participate in deliberations or discussions
of such Board (including making suggestions and raising issues to
the Board, so long as such actions do not otherwise violate any
other provision of this Section 3.1 or Section 3.2) in their
capacity as members of such Board and in no other capacity,
including any capacity such persons serving as directors
otherwise may have as a director, officer, employee, agent or
representative of any other Person, including any holder of Class
A Stock;
(c) form, join or participate in a Group with respect
to any Sprint Voting Securities (other than any Group whose
members consist solely of FT, DT, Transferee, any of their
respective Affiliates and Associates and any Qualified
Subsidiaries);
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(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 Transferee, 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, Transferee and any other
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, (iii) any vote by the holders of Class A Common
Stock, Series 3 FON Stock, or Series 3 PCS Stock with respect to
which holders of each such class or series of stock is entitled
to vote separately as a class, or (iv) any vote by the holders of
the Class A Stock with respect to which such holders are entitled
to vote together as a single class;
(g) take any other action to seek to affect the
control of the management or Board of Directors of Sprint or any
of its Affiliates; provided that nothing in this Section 3.1(g)
shall restrict the manner in which the members of the Board of
Directors of Sprint elected by the holders of Class A Stock may
(i) vote on any matter submitted to such Board, or (ii)
participate in deliberations or discussions of such Board
(including making suggestions and raising issues to the Board, so
long as such actions do not otherwise violate any other provision
of this Section 3.1 or Section 3.2) in their capacity as members
of such Board and in no other capacity, including any capacity
such persons serving as directors otherwise may have as a
director, officer, employee, agent or representative of any other
Person, including any holder of Class A Stock;
(h) enter into any discussions, negotiations,
arrangements or understandings with any Person (including any
Government Affiliate, Related Company or Qualified Stock
Purchaser) other than FT, DT, their Affiliates, Associates and
their respective directors, officers, employees, agents or
advisors with respect to any of the foregoing, or advise, assist,
encourage or seek to persuade others to take any action with
respect to any of the foregoing;
(i) disclose to any Person (including any Government
Affiliate, Related Company or Qualified Stock Purchaser) other
than FT, DT, their Affiliates, Associates and their respective
directors, officers, employees, agents or advisors any intention,
plan or arrangement inconsistent with the foregoing or with the
restrictions on transfer set forth in Article II of the
Stockholders' Agreement or form any such intention which would
result in FT, DT or any of their respective
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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 Transferee.
(a) Subject to Section 3.2(b), Transferee 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, Transferee will use reasonable efforts to
consult with Sprint in good faith regarding the form and content
of any such communication, and Transferee 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 Transferee, nor any of
its Controlled Affiliates, 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
Transferee or its Controlled Affiliates 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 Transferee may
vote its Sprint Voting Securities.
Section 3.4. Quorum. Transferee shall use reasonable
efforts to ensure that it and its Controlled Affiliates shall be
present, in person or by proxy, at all meetings of stockholders
of Sprint so that all Sprint Voting Securities Beneficially Owned
by Transferee and its Controlled Affiliates shall be counted for
purposes of determining the presence of a quorum at such meeting.
Section 3.5. Notice of Proposals Regarding Acquisition
Transactions. Transferee agrees that it will notify Sprint
promptly if any inquiries or proposals which Transferee
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,
Transferee or any of its Controlled Affiliates regarding any
Acquisition Proposal involving Sprint or any purchase of any of
the shares of capital
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<PAGE>
stock of Sprint Beneficially Owned by Transferee or any of its
Controlled Affiliates pursuant to a tender offer or exchange
offer.
ARTICLE 4.
MISCELLANEOUS
Section 4.1. Termination. The provisions of this Agreement
shall terminate if Sprint proceeds with a transaction involving a
Change of Control following the process described in Section 4.1
of the Amended and Restated Stockholders' Agreement. Any
termination of this 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 4.2. 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:
Transferee:
[specify notice address]
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 4.2 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.
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Section 4.3. 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 4.4. 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 4.5. 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 4.Binding Agreement; No Third Party Beneficiaries.
This Agreement will be binding upon and inure to the benefit of
the Parties and their successors 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.
Section 4.6. 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 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
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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) TRANSFEREE 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 TRANSFEREE IN THE MANNER PROVIDED IN
SECTION 4.2. TRANSFEREE 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 TRANSFEREE 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. TRANSFEREE 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. TRANSFEREE 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 TO THE EXTENT PERMITTED BY APPLICABLE
LAW. 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
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REQUIREMENT FOR THE SECURING OR POSTING OF ANY BOND IN CONNECTION
WITH SUCH REMEDY.
Section 4.8. 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, to the
extent permitted by Applicable Law it shall be adjusted rather
than voided, if possible, in order to achieve the intent of the
Parties to the extent possible.
Section 4.9. Translation. [Include the following if
Transferee is a Qualified Subsidiary of FT: The parties hereto
have negotiated this Agreement in the English language, and have
prepared successive drafts and the definitive text of this
Agreement in the English language. For purposes of complying with
loi n(degree) 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.] [Include
the following if transferee is not a Qualified Subsidiary of FT:
This Agreement has been concluded in the English language and the
original English version will govern in the event of any
inconsistency between such version and any translation thereof.]
Section 4.10. 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 4.11. Waiver of Immunity. Transferee 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).
Transferee 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. ss. 1602, et seq. The foregoing waiver shall
constitute a present waiver of immunity at any time any action is
initiated against Transferee with respect to this Agreement.
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<PAGE>
Section 4.12. 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) Transferee agrees that Sprint shall have no
obligation to honor transfers of Sprint Voting Securities or
other equity interests in Sprint to FT, DT or any of their
respective Affiliates or Associates which would cause any of FT,
DT and their respective Affiliates or Associates to Beneficially
Own Sprint Voting Securities or other equity interests in Sprint
in violation of this Agreement, any such transfers shall be void
and of no effect, and Sprint shall be entitled to instruct any
transfer agent or agents for the equity interests in Sprint to
refuse to honor such transfers; and
(b) Transferee acknowledges the provisions set forth
in ARTICLE SIXTH, Section 2.5 of the Articles, ARTICLE SIXTH,
Section 8.5(b) of the Articles, and Section 3.5 and Article VIII
of the Amended and Restated 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.
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<PAGE>
IN WITNESS WHEREOF, Sprint and Transferee have caused their
respective duly authorized officers to execute this Agreement as
of the day and year first above written.
SPRINT CORPORATION
By:______________________
Name:
Title:
[QUALIFIED SUBSIDIARY]
By:______________________
Name:
Title:
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EXHIBIT B
STANDSTILL AGREEMENT
THIS STANDSTILL AGREEMENT (this "Agreement") dated as of
_______ __, 1998 by and among SPRINT CORPORATION, a corporation
formed under the laws of Kansas ("Sprint"), [STRATEGIC INVESTOR],
a [company] [partnership] formed under the laws of ___________
("Investor"), and [PARENT] ("Parent" shall include any entity
that Controls (as such term is defined in the Stockholders'
Agreement) the Investor);
R E C I T A L S
WHEREAS, Sprint, France Telecom S.A. ("FT") and Deutsche
Telekom AG ("DT") entered into an Investment Agreement dated as
of July 31, 1995, as amended (the "Investment Agreement"),
pursuant to which FT and DT purchased shares of capital stock of
Sprint;
WHEREAS, as a condition to Sprint's entering into the
Investment Agreement, Sprint, FT and DT entered into a Standstill
Agreement dated as of July 31, 1995, which agreement was amended
on June 24, 1997 (as so amended, the "Original Standstill
Agreement");
WHEREAS, Sprint, FT and DT entered into a Master
Restructuring and Investment Agreement dated as of May 26, 1998,
(the "FT/DT Restructuring Agreement"), which contemplates, among
other things, the purchase by FT and DT of shares of PCS Common
Stock -- Series 3, par value $ per share, of Sprint;
WHEREAS, as a condition to its entering into the FT/DT
Restructuring Agreement, Sprint has required that FT and DT enter
into that certain Standstill Agreement dated as of __________,
1998 (the "Standstill 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;
WHEREAS, Section 2.2 of the Stockholders' Agreement
provides that FT and DT may, under certain circumstances and in
accordance with the terms of Section 2.2 of the Stockholders'
Agreement, transfer shares of Class A Stock to one or more
Qualified Subsidiaries, each of which Qualified Subsidiaries
shall execute a Qualified Subsidiary Standstill Agreement prior
to and as a condition to the effectiveness of such transfer;
WHEREAS, under the terms of the Investment Agreement and
the Stockholders' Agreement, Strategic Investors collectively are
permitted to own up to 20% of the equity interests in a Qualified
Subsidiary, provided that any such Strategic Investor has
executed a Strategic Investor Standstill Agreement;
<PAGE>
WHEREAS, Investor has indicated an intention to become a
holder of equity interests in [specify Qualified Subsidiary in
which Investor is seeking to invest]; and
WHEREAS, this Agreement is a Strategic Investor Standstill
Agreement which Investor is executing in accordance with Section
2.2 of the Stockholders' Agreement and Section 4.2 of the
Standstill Agreement.
NOW, THEREFORE, in consideration of these premises and the
covenants and agreements contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, each of Investor, Parent and Sprint (each a
"Party" and collectively the "Parties"), intending to be legally
bound, hereby agree as follows:
ARTICLE 1.
DEFINITIONS AND CONSTRUCTION
Section 1.1. Certain Definitions. As used in this
Agreement, the following terms shall have the meanings specified
below:
"Acquisition Proposal" shall mean any proposal involving a
transaction of the kind described in Section 8.6 of ARTICLE SIXTH
of Sprint's Articles.
"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 Investor and Parent
shall not be deemed Affiliates of Sprint, and provided further,
that the term "Affiliate" with respect to FT and DT, shall have
the meaning set forth in the Standstill Agreement.
"Amended and Restated Stockholders' Agreement" shall have
the meaning set forth in Article VIII of the FT/DT Restructuring
Agreement.
"Amended Other Agreements" shall mean the FT/DT
Restructuring Agreement, the Amended and Restated Stockholders'
Agreement, the Amended and Restated Registration Rights Agreement
(as defined in the Amended and Restated Stockholders' Agreement),
and the Amended and Restated Confidentiality Agreements (as
defined in the Amended and Restated Stockholders' Agreement).
"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
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securities pursuant to any agreement, arrangement or
understanding (whether or not in writing), including pursuant to
the FT/DT Restructuring Agreement and the Amended and Restated
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).
"Class A Common Stock" shall mean the Class A Common Stock,
par value U.S. $2.50 per share, of Sprint.
"Class A Stock" shall mean the Class A Common Stock, the
Series 3 FON Stock and the Series 3 PCS Stock.
"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.
"CP Closing" shall have the meaning set forth in Article
VIII of the FT/DT Restructuring Agreement.
"DT" shall have the meaning set forth in the Recitals to
this Agreement.
"FT" shall have the meaning set forth in the Recitals to
this Agreement.
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"FT/DT Restructuring Agreement" means the Master
Restructuring and Investment Agreement dated as of May 26, 1998
by and among Sprint, FT and DT.
"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.
"Group" shall mean any group within the meaning of Section
13(d)(3) of the Exchange Act as in effect on the date hereof.
"Number of Shares Issuable With Respect to the Class A
Equity Interest in the FON Group" shall have the meaning set
forth in ARTICLE SIXTH, Section 10 of the Articles of
Incorporation of Sprint, as amended from time to time.
"Number of Shares Issuable With Respect to the Class A
Equity Interest in the PCS Group" shall have the meaning set
forth in ARTICLE SIXTH, Section 10 of the Articles of
Incorporation of Sprint, as amended from time to time.
"Outstanding Sprint FON Stock" shall mean the shares of
Sprint FON Stock outstanding as of any particular date, plus (i)
all shares of Sprint FON Stock 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 FT/DT Restructuring Agreement and the
Amended and Restated Stockholders' Agreement, and (ii) the
aggregate Number of Shares Issuable With Respect to the Class A
Equity Interest in the FON Group.
"Outstanding Sprint PCS Stock" shall mean the shares of
Sprint PCS Stock outstanding as of any particular date, plus (i)
all shares of Sprint PCS Stock 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 Amended and Restated Stockholders'
Agreement, plus (ii) the aggregate Number of Shares Issuable With
Respect to the Class A Equity Interest in the PCS Group as of
such date.
"Outstanding Sprint Voting Securities" shall mean (i) the
Sprint Voting Securities outstanding as of any particular date,
plus (ii) 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 Amended and Restated
Stockholders' Agreement.
"Qualified Stock Purchaser Standstill Agreement" shall mean
a Standstill Agreement in form and substance satisfactory to
Sprint, FT and DT.
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"Qualified Subsidiary Standstill Agreement" shall mean a
Standstill Agreement in the form of Exhibit A.
"Recapitalization" shall have the meaning set forth in
Article VIII of the FT/DT Restructuring Agreement.
"Record Date Period" shall mean a period of ten Trading
Days beginning on the ninth Trading Day (as defined in the
Amended and Restated Stockholders' Agreement) before a record
date for a meeting of Sprint's stockholders or for the payment of
dividends and ending on (and including) such record date (which
shall be a Trading Day).
"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.
"Series 1 FON Stock" shall mean the FON Common Stock --
Series 1, par value U.S. $___ per share, of Sprint to be created
in connection with the Recapitalization.
"Series 1 PCS Stock" shall mean the PCS Common Stock --
Series 1, par value U.S. $___ per share, of Sprint to be created
by the Initial Charter Amendment.
"Series 2 FON Stock" shall mean the FON Common Stock --
Series 2, par value U.S. $___ per share, of Sprint to be created
by the Subsequent Charter Amendment.
"Series 2 PCS Stock" shall mean the PCS Common Stock --
Series 2, par value U.S. $___ per share, of Sprint to be created
by the Initial Charter Amendment.
"Series 3 FON Stock" shall mean the FON Common Stock --
Series 3, par value U.S. $___ per share, of Sprint to be created
by the Subsequent Charter Amendment.
"Series 3 PCS Stock" shall mean the PCS Common Stock --
Series 3, par value U.S. $___ per share, of Sprint to be created
by the Initial Charter Amendment.
"Sprint" shall have the meaning set forth in the
introductory paragraph of this Agreement.
"Sprint FON Common Stock" shall mean (i) prior to the
Recapitalization, the Common Stock, par value U.S. $2.50 per
share, of Sprint, and (ii) following the Recapitalization, the
Series 1 FON Stock and the Series 2 FON Stock.
"Sprint FON Stock" shall mean the Sprint FON Common Stock
and the Series 3 FON Stock.
"Sprint PCS Common Stock" shall mean the Series 1 PCS Stock
and the Series 2 PCS Stock.
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"Sprint PCS Preferred Stock" shall mean the Preferred Stock
- -- Series 7, no par value, of Sprint, which is to be created
prior to the CP Closing.
"Sprint PCS Stock" shall mean the Sprint PCS Common Stock,
the Sprint PCS Preferred Stock and the Series 3 PCS Stock.
"Sprint Rights Plan" shall mean the Rights Agreement dated
as of June 9, 1997, as amended, between Sprint and UMB Bank,
n.a., as rights agent.
"Sprint Voting Securities" shall mean the Sprint FON Common
Stock, the Sprint PCS Common Stock, the Sprint PCS Preferred
Stock, the Class A Stock and any other securities of Sprint
having the right to vote.
"Standstill Agreement" shall have the meaning set forth in
the Recitals to this Agreement.
"Strategic Investor" shall mean any Person which owns
directly any equity interests in a Qualified Subsidiary, other
than FT, DT, any wholly owned Subsidiary of FT or DT or a Passive
Financial Institution.
"Strategic Investor Standstill Agreement" shall mean a
Standstill Agreement in the form of Exhibit B attached to the
Standstill Agreement.
"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:
(i) 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;
(ii) with respect to Sprint only, the term "Vote" 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 Beneficially Owns or is committed to
acquire from Sprint or has the right to acquire (or to commit to
acquire) from Sprint pursuant to the Amended and Restated
Stockholders' Agreement;
(iii) except as set forth in clause (iv) of this
definition, with respect to Sprint only, in determining the
number of Votes outstanding at any date and/or represented by any
Sprint Voting Securities at any date, a record date for
determining the stockholders entitled to vote shall be deemed to
have been set by the Board of Directors of Sprint on each such
date and accordingly the number of Votes represented by the
Sprint PCS Stock on any given date shall be deemed to have been
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adjusted in the manner provided in Section 3.2 of Article SIXTH
of the Articles as if such date were a record date for
determining the stockholders entitled to vote; and
(iv) notwithstanding clause (iii) of this definition,
during a Record Date Period, the number of Votes outstanding at
any date from and including the first day of such period and to
and including the last day of such period and/or represented by
any Sprint Voting Securities at any date during such period shall
be determined in the manner provided in Section 3.2 of Article
SIXTH with respect to the record date occurring on the last day
of such Record Date Period including, in the case of a record
date for the payment of dividends, as if such date were a record
date for determining the stockholders entitled to vote.
"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, provided that, in the case of Sprint, the
term "Voting Power" shall mean the aggregate number of Votes
represented by all Outstanding Sprint Voting Securities.
In addition to the foregoing, each of the following terms
shall have the respective meanings given to such term in Article
I of the Amended and Restated Stockholders' Agreement: Alien,
Applicable Law, Articles, Associate, Atlas, Change of Control,
Class A Provisions, Exchange Act, FCC, France, Germany,
Governmental Authority, Initial Charter Amendment, Joint Venture
Agreement, Joint Venture Documents, JV Entity, Major Competitor,
Person, Qualified Stock Purchaser, Qualified Subsidiary, SEC and
Subsidiary.
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
INVESTOR, PARENT AND THEIR AFFILIATES AND ASSOCIATES
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Section 2.1. Acquisition Restrictions. Subject to Section
2.2, each of Investor and Parent agrees that it will not, and
will cause each of its Affiliates and Associates not to, directly
or indirectly, acquire, offer to acquire, or agree to acquire, by
purchase or otherwise, Beneficial Ownership of Sprint Voting
Securities other than through its ownership of equity interests
in [specify Qualified Subsidiary in which Investor is seeking to
invest].
Section 2.2. Sprint Rights Plan. Each of Investor and
Parent 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 Investor or Parent 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).
ARTICLE 3.
OTHER STANDSTILL PROVISIONS; QUORUM
Section 3.1. Standstill Covenants. Each of Investor and
Parent 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
of FT, DT, any Qualified Subsidiary, any Qualified Stock
Purchaser, any other Strategic Investor or any Related Company or
any of their respective Affiliates), 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 Amended Other Agreements:
(a) effect, seek, offer, propose (whether publicly or
otherwise) or cause or participate in, or assist any other Person
to effect, seek, offer or propose (whether publicly or otherwise)
or participate in:
(i) any acquisition of Beneficial Ownership of Sprint
Voting Securities or other equity interests in Sprint
which would result in a breach of Article 2 of this
Agreement;
(ii) any tender or exchange offer, merger, consolidation,
share exchange or business combination involving
Sprint or any material portion of its business or any
purchase of all or any substantial part of the assets
of Sprint or any material portion of its business;
(iii) any recapitalization, restructuring, liquidation,
dissolution or other extraordinary transaction with
respect to Sprint or any material portion of its
business; or
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(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 Investor, Parent and any of their
Affiliates or Associates);
(d) grant any proxy with respect to any Sprint Voting
Securities to any Person not designated by Sprint, except for
proxies granted to individuals who are officers, employees or
regular agents or advisors of Investor who have received specific
instructions from Investor, 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 Investor and Parent;
(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, (iii) any vote by the holders of Class A Common
Stock, Series 3 FON Stock, or Series 3 PCS Stock with respect to
which holders of each such class or series of stock is entitled
to vote separately as a class, or (iv) any vote by the holders of
the Class A Stock with respect to which such holders are entitled
to vote together as a single class;
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(g) take any other action to seek to affect the
control of the management or Board of Directors of Sprint or any
of its Affiliates; provided that nothing in this Section 3.1(g)
shall restrict the manner in which the members of the Board of
Directors of Sprint elected by the holders of Class A Stock may
(i) vote on any matter submitted to such Board, or (ii)
participate in deliberations or discussions of such Board
(including making suggestions and raising issues to the Board, so
long as such actions do not otherwise violate any other provision
of this Section 3.1 or Section 3.2) in their capacity as members
of such Board and in no other capacity, including any capacity
such persons serving as directors otherwise may have as a
director, officer, employee, agent or representative of any other
Person, including any holder of Class A Stock;
(h) enter into any discussions, negotiations,
arrangements or understandings with any Person (including any of
FT, DT, any Qualified Subsidiary, any Qualified Stock Purchaser,
any other Strategic Investor, or any Related Company or any of
their respective Affiliates) other than the directors, officers,
employees, agents or advisors of Investor or Parent 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 of FT, DT,
any Qualified Subsidiary, any Qualified Stock Purchaser, any
other Strategic Investor, or any Related Company or any of their
respective Affiliates) other than the directors, officers,
employees, agents or advisors of Investor or Parent any
intention, plan or arrangement inconsistent with the foregoing or
with the restrictions on transfer set forth in Article II of the
Amended and Restated Stockholders' Agreement or form any such
intention which would result in Investor or Parent 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 Investor and Parent.
(a) Subject to Section 3.2(b), each of Investor and
Parent 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, Investor and Parent
will use reasonable efforts to consult with Sprint in good faith
regarding the form and content of any such communication, and
Investor and Parent will use reasonable efforts to coordinate any
such communication with any decisions reached by Sprint with
respect to disclosures relating to such matters.
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(b) Notwithstanding the provisions of Section 3.2(a),
unless required by Applicable Law, neither Investor nor Parent
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 Investor or Parent to take any action which would
otherwise violate any provision contained in Section 3.1.
Section 3.3. Notice of Proposals Regarding Acquisition
Transactions. Each of Investor and Parent agrees that it will
notify Sprint promptly if any inquiries or proposals which
Investor or Parent 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, Investor or Parent 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 Investor, Parent or any of their respective
Affiliates pursuant to a tender offer or exchange offer.
ARTICLE 4.
MISCELLANEOUS
Section 4.1. Termination. The provisions of this Agreement
shall terminate if Sprint proceeds with a transaction involving a
Change of Control following the process described in Section 4.1
of the Amended and Restated Stockholders' Agreement. Any
termination of this 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 4.2. 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:
Investor: [Specify notice address]
Parent: [Specify notice address]
Sprint: 2330 Shawnee Mission Parkway
East Wing
Westwood, Kansas 66205
U.S.A.
Attention: General Counsel
Tel: (913) 624-8440
Fax: (913) 624-8426
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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 4.2 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 4.3. 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 4.4. 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 4.5. 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 4.6. Binding Agreement; No Third Party
Beneficiaries. This Agreement will be binding upon and inure to
the benefit of the Parties and their successors 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.
Section 4.7. 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).
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(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 INVESTOR AND PARENT 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 INVESTOR AND PARENT IN THE MANNER
PROVIDED IN SECTION 4.2. INVESTOR AND PARENT 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 INVESTOR AND
PARENT 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 INVESTOR AND PARENT 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
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OF INVESTOR AND PARENT 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 TO THE EXTENT PERMITTED BY APPLICABLE
LAW. 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 4.8. 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, to the
extent permitted by Applicable Law it shall be adjusted rather
than voided, if possible, in order to achieve the intent of the
Parties to the extent possible.
Section 4.9. Language. [Include the following if Investor
or Parent is a Governmental Authority of France: The parties
hereto have negotiated this Agreement in the English language,
and have prepared successive drafts and the definitive text of
this Agreement in the English language. For purposes of complying
with loi nombre 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.] [Include
the following if Investor and Parent are not Governmental
Authorities of France: This Agreement has been concluded in the
English language and the original English version will govern in
the event of any inconsistency between such version and any
translation thereof.]
Section 4.10. 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 4.11. 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):
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(a) Each of Investor and Parent agrees that Sprint
shall have no obligation to honor transfers of Sprint Voting
Securities or other equity interests in Sprint to Investor,
Parent or any of their respective Affiliates or Associates which
would cause any of Investor, Parent and their respective
Affiliates or Associates to Beneficially Own Sprint Voting
Securities or other equity interests in Sprint in violation of
this Agreement, any such transfers shall be void and of no
effect, and Sprint shall be entitled to instruct any transfer
agent or agents for the equity interests in Sprint to refuse to
honor such transfers; and
(b) Investor and Parent acknowledge the provisions set
forth in ARTICLE SIXTH, Section 2.5 of the Articles, ARTICLE
SIXTH, Section 8.5(b) of the Articles, and Section 3.5 and
Article VIII of the Amended and Restated 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.
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IN WITNESS WHEREOF, Sprint, Investor and Parent have caused
their respective duly authorized officers to execute this
Agreement as of the day and year first above written.
SPRINT CORPORATION
By:_____________________
Name:
Title:
[STRATEGIC INVESTOR]
By:_____________________
Name:
Title:
[PARENT]
By:_____________________
Name:
Title
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EXHIBIT C
STANDSTILL AGREEMENT
THIS STANDSTILL AGREEMENT (this "Agreement") dated as of
_______ __, 1998 by and among SPRINT CORPORATION, a corporation
formed under the laws of Kansas ("Sprint"), [QUALIFIED STOCK
PURCHASER], a [company] [partnership] formed under the laws of
___________ ("Buyer"), and [PARENT] ("Parent" shall include any
entity that Controls (as such term is defined in the
Stockholders' Agreement) the Buyer);
R E C I T A L S
WHEREAS, Sprint, France Telecom S.A. ("FT") and Deutsche
Telekom AG ("DT") entered into an Investment Agreement dated as
of July 31, 1995, as amended (the "Investment Agreement"),
pursuant to which FT and DT purchased shares of capital stock of
Sprint;
WHEREAS, as a condition to Sprint's entering into the
Investment Agreement, Sprint, FT and DT entered into a Standstill
Agreement dated as of July 31, 1995, which agreement was amended
on June 24, 1997 (as so amended, the "Original Standstill
Agreement");
WHEREAS, Sprint, FT and DT entered into a Master
Restructuring and Investment Agreement dated as of May 26, 1998,
(the "FT/DT Restructuring Agreement"), which contemplates, among
other things, the purchase by FT and DT of shares of PCS Common
Stock -- Series 3, par value $ per share, of Sprint;
WHEREAS, as a condition to its entering into the FT/DT
Restructuring Agreement, Sprint required FT and DT to enter into
that certain Amended and Restated Standstill Agreement dated as
of _____________, 1998 (the "Standstill 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;
WHEREAS, Section 2.2(b) of the Standstill Agreement
provides that FT and DT may, under certain circumstances and in
accordance with the terms of Section 7.2 of the Amended and
Restated Stockholders' Agreement or Section 2.2(b) of the
Standstill Agreement, assign their right to purchase shares of
Class A Stock to a Qualified Stock Purchaser, which Qualified
Stock Purchaser shall execute a Qualified Stock Purchaser
Standstill Agreement prior to and as a condition to the
effectiveness of such assignment;
WHEREAS, Article VI of the Stockholders' Agreement provides
that Class A Holders may, under certain circumstances and in
accordance with the terms of Section 7.2 of the Stockholders'
Agreement, assign their right to purchase from Sprint shares of
Class A Stock to a Qualified Stock Purchaser, which Qualified
Stock Purchaser shall execute a Qualified Stock Purchaser
Standstill Agreement prior to and as a condition to the
effectiveness of such assignment;
<PAGE>
WHEREAS, Buyer is a Qualified Stock Purchaser to which
[name of Class A Holder making assignment] has indicated an
intention to transfer its right to purchase certain shares of
Class A Stock representing ___% of the Voting Power of Sprint;
and
NOW, THEREFORE, in consideration of these premises and the
covenants and agreements contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, each of Sprint, Buyer and Parent (each a
"Party" and collectively the "Parties"), intending to be legally
bound, hereby agree as follows:
ARTICLE 1.
DEFINITIONS AND CONSTRUCTION
Section 1.1. Certain Definitions. As used in this
Agreement, the following terms shall have the meanings specified
below:
"Acquisition Proposal" shall mean any proposal involving a
transaction of the kind described in Section 8.6 of ARTICLE SIXTH
of Sprint's Articles.
"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 Buyer and Parent shall
not be deemed Affiliates of Sprint, and provided further that the
term "Affiliate" with respect to FT and DT shall have the meaning
set forth in the Standstill Agreement.
"Amended and Restated Stockholders' Agreement" shall have
the meaning set forth in Article VIII of the FT/DT Restructuring
Agreement.
"Amended Other Agreements" shall mean the FT/DT
Restructuring Agreement, the Amended and Restated Stockholders'
Agreement, the Amended and Restated Registration Rights Agreement
(as defined in the Amended and Restated Stockholders' Agreement),
and the Amended and Restated Confidentiality Agreements (as
defined in the Amended and Restated Stockholders' Agreement).
"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 FT/DT Restructuring Agreement and the Amended and
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Restated 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).
"Class A Common Stock" shall mean the Class A Common Stock,
par value U.S. $2.50 per share, of Sprint.
"Class A Stock" shall mean the Class A Common Stock, the
Series 3 FON Stock and the Series 3 PCS Stock.
"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 Recitals to
this Agreement.
"FT" shall have the meaning set forth in the Recitals to
this Agreement.
"FT/DT Restructuring Agreement" means the Master
Restructuring and Investment Agreement dated as of May 26, 1998
by and among Sprint, FT and DT.
"Group" shall mean any group within the meaning of Section
13(d)(3) of the Exchange Act as in effect on the date hereof.
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"Number of Shares Issuable With Respect to the Class A
Equity Interest in the FON Group" shall have the meaning set
forth in ARTICLE SIXTH, Section 10 of the Articles of
Incorporation of Sprint, as amended from time to time.
"Number of Shares Issuable With Respect to the Class A
Equity Interest in the PCS Group" shall have the meaning set
forth in ARTICLE SIXTH, Section 10 of the Articles of
Incorporation of Sprint, as amended from time to time.
"Outstanding Sprint FON Stock" shall mean the shares of
Sprint FON Stock outstanding as of any particular date, plus (i)
all shares of Sprint FON Stock 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 FT/DT Restructuring Agreement and the
Amended and Restated Stockholders' Agreement, and (ii) the
aggregate Number of Shares Issuable With Respect to the Class A
Equity Interest in the FON Group.
"Outstanding Sprint PCS Stock" shall mean the shares of
Sprint PCS Stock outstanding as of any particular date, plus (i)
all shares of Sprint PCS Stock 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 Amended and Restated Stockholders'
Agreement, plus (ii) the aggregate Number of Shares Issuable With
Respect to the Class A Equity Interest in the PCS Group as of
such date.
"Outstanding Sprint Voting Securities" shall mean (i) the
Sprint Voting Securities outstanding as of any particular date,
plus (ii) 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 Amended and Restated
Stockholders' Agreement.
"Percentage Limitation" shall have the meaning set forth in
Section 2.1.
"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.
"Qualified Stock Purchaser Standstill Agreement" shall mean
a Standstill Agreement in form and substance satisfactory to
Sprint, FT and DT.
"Qualified Subsidiary Standstill Agreement" shall mean a
Standstill Agreement in the form of Exhibit A to the Standstill
Agreement.
"Recapitalization" shall have the meaning set forth in
Article VIII of the FT/DT Restructuring Agreement.
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"Record Date Period" shall mean a period of ten Trading
Days beginning on the ninth Trading Day (as defined in the
Amended and Restated Stockholders' Agreement) before a record
date for a meeting of Sprint's stockholders or for the payment of
dividends and ending on (and including) such record date (which
shall be a Trading Day).
"Related Company" shall mean any Person not Controlled by
Buyer or Parent, but in which Buyer, Parent 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.
"Series 1 FON Stock" shall mean the FON Common Stock --
Series 1, par value U.S. $___ per share, of Sprint to be created
in connection with the Recapitalization.
"Series 1 PCS Stock" shall mean the PCS Common Stock --
Series 1, par value U.S. $___ per share, of Sprint to be created
by the Initial Charter Amendment.
"Series 2 FON Stock" shall mean the FON Common Stock --
Series 2, par value U.S. $___ per share, of Sprint to be created
by the Subsequent Charter Amendment.
"Series 2 PCS Stock" shall mean the PCS Common Stock --
Series 2, par value U.S. $___ per share, of Sprint to be created
by the Initial Charter Amendment.
"Series 3 FON Stock" shall mean the FON Common Stock --
Series 3, par value U.S. $___ per share, of Sprint to be created
by the Subsequent Charter Amendment.
"Series 3 PCS Stock" shall mean the PCS Common Stock --
Series 3, par value U.S. $___ per share, of Sprint to be created
by the Initial Charter Amendment.
"Sprint" shall have the meaning set forth in the
introductory paragraph of this Agreement.
"Sprint FON Common Stock" shall mean (i) prior to the
Recapitalization, the Common Stock, par value U.S. $2.50 per
share, of Sprint, and (ii) following the Recapitalization, the
Series 1 FON Stock and the Series 2 FON Stock.
"Sprint FON Stock" shall mean the Sprint FON Common Stock
and the Series 3 FON Stock.
"Sprint PCS Common Stock" shall mean the Series 1 PCS Stock
and the Series 2 PCS Stock.
"Sprint PCS Preferred Stock" shall mean the Preferred Stock
- -- Series 7, no par value, of Sprint, which is to be created
prior to the CP Closing.
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"Sprint PCS Stock" shall mean the Sprint PCS Common Stock,
the Sprint PCS Preferred Stock and the Series 3 PCS Stock.
"Sprint Rights Plan" shall mean the Rights Agreement dated
as of June 9, 1997, as amended, between Sprint and UMB Bank,
n.a., as rights agent.
"Sprint Voting Securities" shall mean the Sprint FON Common
Stock, the Sprint PCS Common Stock, the Sprint PCS Preferred
Stock, the Class A Stock and any other securities of Sprint
having the right to Vote.
"Strategic Investor" shall mean any Person which owns
directly any equity interests in a Qualified Subsidiary, other
than FT, DT, any wholly owned Subsidiary of FT or DT or a Passive
Financial Institution.
"Strategic Investor Standstill Agreement" shall mean a
Standstill Agreement in the form of Exhibit B to Standstill
Agreement.
"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:
(i) 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;
(ii) with respect to Sprint only, the term "Vote" 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 Beneficially Owns or is committed to
acquire from Sprint or has the right to acquire (or to commit to
acquire) from Sprint pursuant to the Amended and Restated
Stockholders' Agreement;
(iii) except as set forth in clause (iv) of this
definition, with respect to Sprint only, in determining the
number of Votes outstanding at any date and/or represented by any
Sprint Voting Securities at any date, a record date for
determining the stockholders entitled to vote shall be deemed to
have been set by the Board of Directors of Sprint on each such
date and accordingly the number of Votes represented by the
Sprint PCS Stock on any given date shall be deemed to have been
adjusted in the manner provided in Section 3.2 of Article SIXTH
of the Articles as if such date were a record date for
determining the stockholders entitled to vote; and
(iv) notwithstanding clause (iii) of this definition,
during a Record Date Period, the number of Votes outstanding at
any date from and including the first day of such period and to
and including the last day of such period and/or represented by
any Sprint Voting Securities at
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any date during such period shall be determined in the manner
provided in Section 3.2 of Article SIXTH with respect to the
record date occurring on the last day of such Record Date Period
including, in the case of a record date for the payment of
dividends, as if such date were a record date for determining the
stockholders entitled to vote.
"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, provided that, in the case of Sprint, the
term "Voting Power" shall mean the aggregate number of Votes
represented by all Outstanding Sprint Voting Securities.
In addition to the foregoing, each of the following terms
shall have the respective meanings given to such term in Article
I of the Amended and Restated Stockholders' Agreement: Alien,
Applicable Law, Articles, Associate, Atlas, Change of Control,
Class A Provisions, Exchange Act, FCC, France, Germany,
Governmental Authority, Initial Charter Amendment, Joint Venture
Agreement, Joint Venture Documents, JV Entity, Passive Financial
Institution, Person, Qualified Stock Purchaser, Qualified
Subsidiary, SEC and Subsidiary.
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
BUYER, PARENT AND THEIR AFFILIATES AND ASSOCIATES
Section 2.Acquisition Restrictions. Subject to Section 2.2
and 2.3, each of Buyer and Parent agrees that it will not, and
will cause each of its Affiliates and Associates not to, directly
or indirectly, acquire, offer to acquire, or agree to acquire, by
purchase or otherwise, Beneficial Ownership of Sprint Voting
Securities if as a result of such acquisition, the Votes
represented by the Sprint Voting Securities Beneficially Owned in
the aggregate by Buyer and Parent and their respective Affiliates
and Associates would be in excess of __% [the definitive
agreement will specify the percentage assigned by Buyer in
accordance with Section 2.2(b)
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of the Standstill Agreement or Section 7.2 of the Amended and
Restated Stockholders' Agreement] of the Voting Power of Sprint
(the "Percentage Limitation").
Section 2.2. Effect of Action by Sprint; Inadvertent
Action.
(a) Subject to Section 2.3(b), neither Buyer nor
Parent shall be deemed in violation of this Article 2 if the
Beneficial Ownership of Sprint Voting Securities by Buyer, Parent
and their respective Affiliates and Associates exceeds the
Percentage Limitation (i) solely as a result of an acquisition of
Sprint Voting Securities by Sprint (including as a result of a
redemption by Sprint of its Sprint PCS Preferred Stock) that, by
reducing the number of Outstanding Sprint Voting Securities,
increases the proportionate number of Sprint Voting Securities
Beneficially Owned by Buyer, Parent and their respective
Affiliates and Associates, (ii) if the Beneficial Ownership of
Sprint Voting Securities by Buyer, Parent and their respective
Affiliates and Associates does not exceed the Percentage
Limitation by more than 0.5% and the acquisitions of Beneficial
Ownership which resulted in Buyer, Parent and their respective
Affiliates and Associates exceeding such Percentage Limitation
were undertaken in good faith and such Percentage Limitation was
exceeded inadvertently, (iii) solely as a result of any
readjustment in the relative Voting Power of the Sprint FON Stock
and the Sprint PCS Stock in accordance with the terms of the
Articles, (iv) solely as a result of a redemption or conversion
of any Sprint PCS Stock pursuant to ARTICLE SIXTH, Section 7 of
the Articles, or (v) because Buyer, Parent or their respective
Affiliates or Associates acquire Beneficial Ownership of Sprint
Voting Securities in excess of the Percentage Limitation in
reliance on information regarding the number of outstanding
shares of Sprint provided directly to any of Buyer, Parent and
their respective Affiliates and Associates by Sprint in response
to a request for such information by any of Buyer, Parent and
their respective Affiliates and Associates immediately prior to
such purchase.
(b) Notwithstanding Section 2.3(a), the Percentage
Limitation shall be deemed exceeded if (i) in the case of Section
2.3(a)(i), Buyer, Parent 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 (including as a result of a
redemption by Sprint of its Sprint PCS Preferred Stock), (ii) in
the case of Section 2.3(a)(ii), Buyer, Parent or any of their
respective Affiliates or Associates acquires Beneficial Ownership
of any additional Sprint Voting Securities after it has been
notified or has knowledge that the Percentage Limitation has been
exceeded, (iii) in the case of Section 2.3(a)(iii), after a
readjustment in the relative Voting Power of the Sprint FON Stock
and the Sprint PCS Stock which results in Buyer, Parent and their
respective Affiliates and Associates having Beneficial Ownership
of Sprint Voting Securities in excess of any of the Percentage
Limitation, Buyer, Parent or any of their respective Affiliates
or Associates acquires Beneficial Ownership of any additional
Sprint Voting Securities, after being notified of, or having
knowledge of such readjustment in the relative Voting Power, (iv)
in the case of Section 2.3(a)(iv), after the redemption or
conversion of any Sprint PCS Stock pursuant to ARTICLE SIXTH,
Section 7 of the Articles which results in Buyer, Parent and
their respective Affiliates and Associates having
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Beneficial Ownership of Sprint Voting Securities in excess of the
Percentage Limitation, Buyer, Parent or any of their respective
Affiliates or Associates acquires Beneficial Ownership of any
additional Sprint Voting Securities after being notified of, or
having knowledge of, such redemption or conversion, and (v) in
the case of Section 2.3(a)(v), Buyer, Parent 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 clauses
(i), (ii), (iii), (iv) and (v):
(x) upon the acquisition of Beneficial Ownership of
such additional Sprint Voting Securities, Buyer, Parent and
their respective Affiliates and Associates do not
Beneficially Own in the aggregate more than the Percentage
Limitation, or
(y) subject to the rights of Sprint in Section 5.7 of
the Amended and Restated Stockholders' Agreement, such
acquisition is effected pursuant to (A) the exercise of
equity purchase rights by Buyer or Parent pursuant to the
Amended and Restated Stockholders' Agreement, or (B) market
purchases which are made solely in lieu of the exercise of
equity purchase rights by Buyer or Parent pursuant to the
Amended and Restated Stockholders' Agreement following the
issuance of securities by Sprint, so long as (1) either (I)
Buyer or Parent, 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 Buyer, Parent and their
respective Affiliates and Associates does not exceed the
Percentage Ownership Interest of Buyer, Parent and their
respective Affiliates and Associates which would have been
in effect had Buyer, Parent and their respective Affiliates
exercised such equity purchase rights.
Section 2.3. Sprint Rights Plan. Notwithstanding the
provisions of Sections 2.1 and 2.2, each of Buyer and Parent
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 Buyer or Parent 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).
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ARTICLE 3.
OTHER STANDSTILL PROVISIONS; QUORUM
Section 3.1. Standstill Covenants. Each of Buyer and Parent
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 of FT, DT, any
Qualified Subsidiary, any other Qualified Stock Purchaser or any
Related Company or any of their respective Affiliates), 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 Amended Other Agreements:
(a) effect, seek, offer, propose (whether publicly or
otherwise) or cause or participate in, or assist any other Person
to effect, seek, offer or propose (whether publicly or otherwise)
or participate in:
(i) any acquisition of Beneficial Ownership of Sprint
Voting Securities or other equity interests in Sprint
which would result in a breach of Article 2 of this
Agreement;
(ii) any tender or exchange offer, merger, consolidation,
share exchange or business combination involving
Sprint or any material portion of its business or any
purchase of all or any substantial part of the assets
of Sprint or any material portion of its business;
(iii) any recapitalization, restructuring, liquidation,
dissolution or other extraordinary transaction with
respect to Sprint or any material portion of its
business; 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
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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 Buyer, Parent, 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 individuals who are officers, employees or
regular agents or advisors of Buyer who have received specific
instructions from Buyer 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;
(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, (iii) any vote by the holders of Class A Common
Stock, Series 3 FON Stock, or Series 3 PCS Stock with respect to
which holders of each such class or series of stock is entitled
to vote separately as a class, or (iv) any vote by the holders of
the Class A Stock with respect to which such holders are entitled
to vote together as a single class;
(g) take any other action to seek to affect the
control of the management or Board of Directors of Sprint or any
of its Affiliates; provided that nothing in this Section 3.1(g)
shall restrict the manner in which the members of the Board of
Directors of Sprint elected by the holders of Class A Stock may
(i) vote on any matter submitted to such Board, or (ii)
participate in deliberations or discussions of such Board
(including making suggestions and raising issues to the Board, so
long as such actions do not otherwise violate any other provision
of this Section 3.1 or Section 3.2) in their capacity as members
of such Board and in no other capacity, including any capacity
such persons serving as directors otherwise may have as a
director, officer, employee, agent or representative of any other
Person, including any holder of Class A Stock;
(h) enter into any discussions, negotiations,
arrangements or understandings with any Person (including any of
FT, DT, any Qualified Subsidiary, any other Qualified Stock
Purchaser or any Related Company or any of their respective
Affiliates) other than Buyer, Parent, 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;
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(i) disclose to any Person (including any of FT, DT,
any Qualified Subsidiary, any other Qualified Stock Purchaser or
any Related Company or any of their respective Affiliates) other
than Buyer, Parent, 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 Buyer, Parent 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 Buyer and Parent.
(a) Subject to Section 3.2(b), each of Buyer and
Parent 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, Buyer and Parent will
use reasonable efforts to consult with Sprint in good faith
regarding the form and content of any such communication, and
Buyer and Parent 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 Buyer nor Parent, 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 Buyer or Parent 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 Buyer, Parent and
their respective Affiliates may vote their Sprint Voting
Securities.
Section 3.4. Quorum. Each of Buyer and Parent 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
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Buyer and Parent 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 Buyer and Parent agrees that it will notify
Sprint promptly if any inquiries or proposals which Buyer or
Parent 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, Buyer or
Parent 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
Buyer, Parent or any of their respective Affiliates pursuant to a
tender offer or exchange offer.
ARTICLE 4.
MISCELLANEOUS
Section 4.1. Termination. The provisions of this Agreement
shall terminate if Sprint proceeds with a transaction involving a
Change of Control following the process described in Section 4.1
of the Amended and Restated Stockholders' Agreement. Any
termination of this 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 4.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:
Buyer: [Specify notice address]
Parent: [Specify notice address]
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
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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 4.2 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 4.3. 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 4.4. 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 4.5. 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 4.6. Binding Agreement; No Third Party
Beneficiaries. This Agreement will be binding upon and inure to
the benefit of the Parties and their successors 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.
Section 4.7. 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
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<PAGE>
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 BUYER AND PARENT 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 BUYER AND PARENT IN THE MANNER
PROVIDED IN SECTION 5.2. BUYER AND PARENT 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 BUYER AND
PARENT 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 BUYER AND PARENT 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
BUYER AND PARENT EXPRESSLY ACKNOWLEDGES THAT THE FOREGOING WAIVER
IS
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<PAGE>
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 TO THE EXTENT PERMITTED BY APPLICABLE
LAW. 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 4.8. Severability. The invalidity or unenforce-
ability 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, to the
extent permitted by Applicable Law it shall be adjusted rather
than voided, if possible, in order to achieve the intent of the
Parties to the extent possible.
Section 4.9. Language. This Agreement has been concluded in
the English language and the original English version will govern
in the event of any inconsistency between such version and any
translation thereof.
Section 4.10. 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 4.11. 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 Buyer and Parent agrees that Sprint shall
have no obligation to honor transfers of Sprint Voting Securities
or other equity interests in Sprint to Buyer, Parent or any of
their respective Affiliates or Associates which would cause any
of Buyer, Parent 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) Buyer and Parent acknowledge the provisions set
forth in ARTICLE SIXTH, Section 2.5 of the Articles, ARTICLE
SIXTH, Section 8.5(b) of the Articles, and Section 3.5 and
Article VIII of the Amended and Restated 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.
-17-
<PAGE>
IN WITNESS WHEREOF, Sprint, Buyer and Parent have caused
their respective duly authorized officers to execute this
Agreement as of the day and year first above written.
SPRINT CORPORATION
By:_________________________
Name:
Title:
[QUALIFIED STOCK PURCHASER]
By:_________________________
Name:
Title:
[PARENT]
By:_________________________
Name:
Title:
-18-
Exhibit 4
================================================================
------------------------------
TOP UP RIGHT AGREEMENT
------------------------------
Among
FRANCE TELECOM S.A.,
DEUTSCHE TELEKOM AG,
TELE-COMMUNICATIONS, INC.,
COMCAST CORPORATION,
and
COX COMMUNICATIONS, INC.,
MAY 26, 1998
================================================================
<PAGE>
THIS TOP UP RIGHT AGREEMENT (the "Agreement") is
entered into as of May 26, 1998, by and among FRANCE TELECOM
S.A., a societe anonyme formed under the laws of France ("FT"),
DEUTSCHE TELEKOM AG, an Aktiengesellschaft formed under the laws
of Germany ("DT"), TELE-COMMUNICATIONS, INC., a Delaware
corporation ("TCI"), COMCAST CORPORATION, a Pennsylvania
corporation ("Comcast") and COX COMMUNICATIONS, INC., a Delaware
corporation ("Cox", and together with TCI and Comcast, the "Cable
Parents").
WHEREAS, pursuant to a Restructuring and Merger
Agreement (the "Restructuring and Merger Agreement"), dated May
26, 1998, among Sprint, the Cable Parents and the other parties
listed therein, Cox and certain subsidiaries of the Cable Parents
(each, a "Cable Partner") will receive shares of Series 2 PCS
Stock in exchange for certain interests in Sprint PCS indirectly
owned by the Cable Parents (the "CP Exchange");
WHEREAS, such shares of Series 2 PCS Stock issued to
the Cable Partners in the CP Exchange carry 1/10th of a vote per
share;
WHEREAS, pursuant to the Articles of Incorporation of
Sprint, upon the transfer of any shares of Series 2 PCS Stock by
a Cable Partner to a Person that is not a Cable Partner or an
Affiliate or (in some circumstances) an Associate thereof, such
shares automatically convert into full voting shares of Sprint;
WHEREAS, FT and DT desire certain rights to purchase a
portion of the shares of Series 2 PCS Stock transferred by the
Cable Partners with respect to that amount of shares of Series 2
PCS Stock that results in the conversion of such shares to Series
1 PCS Stock;
WHEREAS, pursuant to a form of Amended and Restated
Stockholders' Agreement to be entered into in connection with the
CP Exchange among Sprint, FT and DT, FT and DT have certain
rights to purchase additional shares of Class A Stock (as defined
herein) so as to enable FT and DT to maintain a certain
percentage of the aggregate number of votes represented or to be
represented by the voting securities of Sprint;
WHEREAS, the Company, FT and DT entered into a Master
Restructuring and Investment Agreement dated as of May 26, 1998
(the "FT/DT Restructuring Agreement"), which contemplates, among
other things, the purchase by FT and DT of (i) shares of Series 3
PCS Stock in connection with the CP Exchange and (ii) shares of
Series 1 PCS Stock in connection with the proposed IPO (as
defined herein);
WHEREAS, unless otherwise indicated, capitalized terms
used in this Agreement but not defined in this Agreement have the
meanings given to such terms in the Restructuring and Merger
Agreement;
<PAGE>
NOW, THEREFORE, in consideration of (i) FT and DT's
respective undertakings to purchase shares of Series 3 PCS Stock
as set forth herein and in the FT/DT Restructuring Agreement,
(ii) FT and DT entering into the Amended Registration Rights
Agreement in connection with the CP Exchange among Sprint, FT and
DT (the "Registration Rights Agreement"), and (iii) FT and DT' s
respective undertakings to vote in favor of the Recapitalization,
and the mutual covenants and obligations hereinafter set forth,
the parties hereto, intending to be legally bound, hereby agree
as follows:
ARTICLE I
DEFINITIONS
-----------
"Associate" means, when used to indicate a
relationship with any Person, (i) a corporation or organization
of which such Person is a partner or is, directly or indirectly,
the beneficial owner of ten percent or more of any class of
equity securities and (ii) any trust or other estate in which
such Person has a substantial beneficial interest or as to which
such Person serves as trustee or in a similar capacity.
"Amended and Restated Standstill Agreement" means the
Amended and Restated Standstill Agreement to be entered into
among Sprint, FT and DT in connection with the CP Exchange as it
may be amended or supplemented from time to time.
"Business Day" means a day of the year on which banks
are not required or authorized to be closed in the State of New
York or in France or Germany.
"Class A Common Stock" means the Class A Common Stock,
par value $2.50 per share, of Sprint, as provided for in the
Current Sprint Charter.
"Class A Holders" means FT, DT and any Qualified
Subsidiary to which shares of Class A Stock or Non-Class A Common
Stock have been transferred in accordance with Section 2.2 of the
Stockholders' Agreement, and any Qualified Stock Purchaser that
acquires shares of Class A Stock pursuant to Article VI or
Section 5.1 of the Stockholders' Agreement or pursuant to Section
2.2(b) of the Amended and Restated Standstill Agreement.
"Class A Provisions" has the meaning set forth in the
Stockholders' Agreement.
"Class A Stock" means the Class A Common Stock, the
Series 3 FON Stock and the Series 3 PCS 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 price, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect
to securities listed of admitted to trading on The New York Stock
2
<PAGE>
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 price 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.
"CP Registration Rights Agreement" means the
Registration Rights Agreement in the form of Exhibit H attached
to the Restructuring and Merger Agreement to be entered into at
the Closing among Sprint, TCI, Comcast and Cox.
"Derivative Security" means any and all rights,
warrants, options, convertible securities, or exchangeable
securities or indebtedness, or other rights, exercisable for or
convertible into or exchangeable for, directly or indirectly,
shares of Sprint PCS Stock, whether at the time of issuance or
upon the passage of time or the occurrence of some future event,
but does not include shares of Sprint PCS Stock. Subject to
Section 3.05(b), the term "Derivative Security" also includes any
security whose value is determined by reference to the value of
Series 1 PCS Stock but is not otherwise within the definition of
the term "Derivative Security".
"Encumbrance" means any security interest, pledge,
mortgage, lien (including, without limitation, environmental and
tax liens), charge, encumbrance, adverse claim, preferential
arrangement or restriction of any kind, including, without
limitation, any restriction on the use, voting, transfer, receipt
of income or other exercise of any attributes of ownership.
"Exchange Act" means the Securities Exchange Act of
1933, as amended.
"FT/DT Restructuring Agreement" has the meaning set
forth in the preamble.
"Non-Class A Common Stock" means the Sprint FON Common
Stock and the Sprint PCS Common Stock.
"Person" means any individual, corporation,
partnership, limited liability company, trust, unincorporated
association or other entity.
"Qualified Stock Purchaser" shall have the meaning set
forth in the Stockholders' Agreement.
"Qualified Subsidiary" shall have the meaning set
forth in the Stockholders' Agreement.
3
<PAGE>
"Registration Rights Agreement" has the meaning set
forth in the preamble.
"Sprint PCS Stock" means the Series 1 PCS Stock, the
Series 2 PCS Stock and the Series 3 PCS Stock.
"Third Party" means any Person other than a Cable
Partner, FT, DT or any Affiliate thereof.
"Top Up Amount" means as to any Class A Holder with
respect to any Transfer, the lesser of (A) an amount of Series 2
PCS Stock such that such Class A Holder would maintain
immediately after such Transfer the percentage voting power in
Sprint equal to the percentage voting power in Sprint that such
Class A Holder held as of the immediately preceding record date
for the payment of dividends by Sprint immediately preceding such
Transfer and (B) such Class A Holder's pro rata share (allocated
on the basis of the amounts determined under clause (A) for all
Class A Holders with respect to such Transfer) of 18% of the
amount of Series 2 PCS Stock proposed to be Transferred.
"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.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
SECTION 2.01. Representations and Warranties. Each
party to this Agreement represents and warrants to the other
parties that, as of the date hereof:
(a) such party has full power and authority to execute
and deliver this Agreement and the execution and delivery
by such party of this Agreement has been duly authorized by
all necessary action; and
(b) this Agreement has been duly and validly executed
and delivered by such party and constitutes the binding
obligation of such party, enforceable against such party in
accordance with its terms.
SECTION 2.02. Representation and Warranties of FT. FT
represents and warrants to the other parties that compliance with
the loi no. 94-665 du 4 aout 1994 relative a l'emploi de la
langue francaise (or any other statute or regulation having a
similar effect) is not
4
<PAGE>
required in connection with the execution, delivery or
performance of this Agreement or in order for this Agreement to
be a valid and binding obligation of FT.
ARTICLE III
TOP UP RIGHT
SECTION 3.01. Top Up Right. (a) (i) In the event of
any pending or completed transfer by any Cable Partner (the
"Selling Cable Partner") of shares of Series 2 PCS Stock which
would trigger the conversion of such shares to shares of Series 1
PCS Stock pursuant to the Articles of Incorporation of Sprint
which conversion would in turn trigger an Equity Purchase Right
pursuant to the form of Amended and Restated Stockholders'
Agreement to be entered into among FT, DT and Sprint in
connection with the CP Exchange (each, a "Transfer"), the
applicable Cable Parent shall cause its Selling Cable Partner to
provide FT and DT, with a copy to Sprint, written notice of such
pending or, if prior notice is not required by the express terms
of this Agreement, completed Transfer (a "Notice of Pending or
Completed Disposition") of such shares (or of any pending or
completed disposition of any Derivative Securities) at the time
and in the manner set forth herein. Subject to the terms and
conditions set forth below, any Notice of Pending or Completed
Disposition required hereby shall be provided as promptly as
practicable in connection with any such Transfer, taking into
account the applicable method of and circumstances surrounding
the Transfer. With respect to certain such Transfers, to the
extent and subject to the terms and conditions set forth below,
each Class A Holder shall have the right (the "Top Up Right") to
purchase from the Selling Cable Partner all or a portion of the
amount of shares of Series 2 PCS Stock equal to the applicable
Top Up Amount for such Class A Holder (the "Offered Shares");
provided, however, that such right shall be exercisable with
respect to any Transfer only to the extent FT and DT have not
otherwise exercised their Equity Purchase Rights or made open
market purchases with respect to any such Transfer. In the event
that the Class A Holders are entitled to a Top Up Right pursuant
to the terms of this Article III, the Notice of Pending or
Completed Disposition shall, to the extent practicable in light
of the proposed or completed method of disposition as described
below, set forth the number of Offered Shares being offered, the
price (to the extent determined) at which the Selling Cable
Partner proposes to or has previously effected Transfer of the
shares of Series 2 PCS Stock which triggered the Top Up Right,
the method(s) of Transfer, and any other material terms of the
pending or completed Transfer.
To the extent a particular method of Transfer of
shares of Series 2 PCS Stock by a Selling Cable Partner does not
fit within a method of Transfer described in Sections 3.02
through 3.06, the parties will in good faith apply the provisions
set forth herein (the "Comparable Provisions") which would apply
to the particular method of Transfer which most closely
approximates the method of Transfer proposed by the Selling Cable
Partner in order to provide the Class A Holders with a
corresponding Top Up Right in connection with such Transfer (but
only to the extent the Comparable Provisions provide for a Top Up
Right).
5
<PAGE>
(ii) Any Top Up Right set forth in this Article III
shall be exercisable by written notice (a "Notice of Exercise")
to each Selling Cable Partner given in the manner set forth
below. Such Notice of Exercise shall state the number of Offered
Shares or portion of the applicable Top Up Amount that the Class
A Holder elects to purchase.
(iii) Upon the consummation of any purchase and sale
pursuant to this Article III, and against delivery of the
purchase price for such Offered Shares payable in immediately
available funds by wire transfer or check, the applicable Selling
Cable Partner shall deliver or cause to be delivered, and shall
transfer the ownership of the Offered Shares to be sold, free and
clear of any Encumbrance created by the Selling Cable Partner.
SECTION 3.02. Modified Dribble Out. In the event of
any Transfer of Series 2 PCS Stock by a Selling Cable Partner
identified in any Notice of Pending or Completed Disposition as a
"dribble out" Transfer, such Selling Cable Partner may, but is
not required to, offer to the Class A Holders a Top Up Right on
the terms and subject to the conditions set forth in Section
3.03(i) below, mutatis mutandis; provided, however, that the
aggregate amount of shares so identified as "dribble out" amounts
by each Selling Cable Partner in any three-month period shall not
exceed the lesser of (i) the then applicable average weekly
trading volume of the Sprint PCS Stock (as determined pursuant to
Rule 144) and (ii) 1% of the outstanding shares of Sprint PCS
Stock (the "Dribble Out Amount"). A Selling Cable Partner making
a "dribble out" Transfer shall deliver a Notice of Pending or
Completed Disposition promptly after each such Transfer (which
notice shall identify such Transfer as a "dribble out" Transfer).
If the Selling Cable Partner so elects to offer to the Class A
Holders a Top Up Right, the price at which each Class A Holder
shall have the right to purchase the Offered Shares (the "First
Offer Price") shall be equal to the price paid or to be paid by
the transferee(s) in respect of the "dribble out" Transfer(s) (or
the blended average price in the case of a series of such
Transfers).
SECTION 3.03. Cash Sales (Other than Underwritten
Public Offerings and Derivative Securities). In the event of any
Transfer by a Selling Cable Partner of shares of Series 2 PCS
Stock for cash in excess of the Dribble Out Amount, the Selling
Cable Partner will, except as set forth in Sections 3.04 and 3.05
below, at the applicable Selling Cable Partner's election, either
(i) permit the Class A Holders to exercise a Top Up Right by
Notice of Exercise given within 30 days following delivery of a
Notice of Pending or Completed Disposition at a First Offer Price
equal to the greater of (A) the blended average price paid by the
applicable Third Party purchasers and (B) the most recent Closing
Price at the time of exercise of the applicable Top Up Right or
(ii) provide the Class A Holders reasonable advance notice of
such Transfer (which, in the case of block or at the market
trades occurring within 10 Trading Days of such notice shall be
one Business Day and in the case of all other Transfers (other
than underwritten private placements) shall be 5 Business Days),
in which event, each Class A Holder shall be entitled to elect by
Notice of Exercise given prior to the earlier to occur of (I) the
close of business on the applicable transaction date and (II) the
fifth Business Day following the date of such notice, to exercise
the applicable Top Up Right in connection with such Transfer at a
per share price equal to the applicable transaction price (or the
blended average price in the case of a
6
<PAGE>
series of at-the-market Transfers). To assure participation in
transactions described in clause (i) or clause (ii) of the
previous sentence (as well as "dribble out" Transfers as to which
the applicable Selling Cable Partner offers a Top Up Right), a
Class A Holder may provide binding standby purchase commitments
to the Selling Cable Partners which will specify price ranges,
aggregate limits and term. Any such binding standby commitment is
revocable by the applicable Class A Holder on 5 Business Days'
notice (but not following the delivery of the applicable Notice
of Pending or Completed Disposition under clause (i) or (ii)
above or such a notice as to a "dribble out" Transfer as to which
the Selling Cable Partner offers a Top Up Right). No Transfers
described in this Section 3.03 shall be made during the five
Trading Day period (each, a "Blackout Period") which (x) either
precedes the record date for stockholder meetings of Sprint or
(y) terminates on the dividend payment date for Sprint capital
stock.
SECTION 3.04. Underwritten Public Offerings or Private
Placements. (a) In the event of any Transfer of Series 2 CPS
Stock by a Selling Cable Partner in an underwritten public
offering or underwritten private placement, the Top Up Right
described in this Section 3.04 will apply. The Selling Cable
Partner will provide the Class A Holders with a Notice of Pending
or Completed Disposition in respect of any such Transfer (i) at
the same time the applicable notice is provided to Sprint under
the CP Registration Rights Agreement (but in any event not less
than 10 Business Days prior to any Transfers made pursuant to any
underwritten public offering) or (ii) 20 days prior to any
dispositions made pursuant to any underwritten private placement.
In order to exercise its Top Up Right hereunder, a Class A Holder
must deliver a Notice of Exercise to the Selling Cable Partner no
later than the commencement of any "road show" (or other
corresponding marketing efforts) in connection with any public
offering or within 10 Business Days of receipt of a Notice of
Pending or Completed Disposition in connection with an
underwritten private placement. The Notice of Exercise may
provide that the portion of the Top Up Amount to be purchased by
the applicable Class A Holder is subject to change according to
the final offering price of the shares purchased by the
applicable Third Party purchasers. The First Offer Price will be
equal to such offering price, less one half of the per share
underwriting discount.
(b) The Notice of Exercise of any Class A Holder to
purchase shares of Series 2 PCS Stock pursuant to this Section
3.04 shall represent a binding commitment of such Class A Holder
(subject to the consummation of the applicable public offering or
private placement).
(c) Sprint will provide all Class A Holders with one
copy of the registration statement, and all amendments thereto,
promptly upon filing thereof with the SEC, in connection with any
underwritten public offering by a Selling Cable Partner
hereunder.
SECTION 3.05. Sales of Derivative Securities. (a)
Subject to comparable notice provisions to those set forth in
Section 3.04 hereof, the Class A Holders will have the right to
exercise a Top Up Right by acquiring an appropriate portion of
any Derivative Security proposed to be sold by any Selling Cable
Partner in a public offering or a private placement transaction
by providing a Notice of Exercise in the manner described in
Section 3.04 above, mutatis mutandis;
7
<PAGE>
provided, however, that except as set forth in the proviso in (b)
below, the Class A Holders have no Top Up Right with respect to a
Derivative Security that does not provide for settlement by
delivery of shares of PCS Stock (e.g., settlement in cash and/or
other currency only). To the extent that the issuance of any such
Derivative Security transfers voting rights with respect to the
underlying shares to the holder of such Derivative Security, a
Class A Holder shall acquire equivalent rights with respect to
the applicable portion of such underlying shares to the extent it
exercises its Top Up Right with respect to such Derivative
Security.
(b) Class A Holders shall not have any Top Up Right
upon delivery of shares of Series 2 PCS Stock to the holders of
such Derivative Securities upon settlement, exchange or
conversion of the Derivative Security; provided, however, that in
the event the applicable Selling Cable Partner sells shares of
Series 2 PCS Stock in order to obtain cash to pay a cash
settlement price with respect to Derivative Security, the
applicable Top Up Right set forth in this Article III apply.
SECTION 3.06. Non-Cash Sales. In the case of a
proposed Transfer for consideration other than cash (a "Non-Cash
Transfer"), the applicable Selling Cable Partner will, at its
election, either (i) if the transferee would be an "Associate" of
the Selling Cable Partner following such Non-Cash Transfer,
require the applicable transferee to assume the obligations of
the applicable Selling Cable Partner under this Agreement with
respect to the applicable shares of Series 2 PCS Stock and
require the transferee to execute and deliver an equivalent Top
Up Right Agreement with FT and DT, in which case such transferee
would enter into a standstill agreement with Sprint and the
applicable shares of Series 2 PCS Stock would not, pursuant to
the terms of the Articles of Incorporation of Sprint, convert
into Series 1 PCS Stock in connection with such Non-Cash Transfer
or (ii) whether or not such transferee is or would be an
"Associate," provide a Notice of Pending or Completed Disposition
in respect of such proposed Non-Cash Transfer 20 Business Days
prior to the proposed Transfer (or, if later, the date of the
applicable agreement regarding the proposed Transfer). In the
case of a Non-Cash Transfer to which a Selling Cable Partner
elects to have clause (ii) hereof apply, the Class A Holders will
have a Top Up Right at the time of such Transfer (exercisable by
delivery of a Notice of Exercise given prior to such Transfer) at
a First Offer Price equal to a cash price per share equivalent to
the value per share of the non-cash consideration paid in
connection with such Transfer as determined by independent
investment banks selected by the applicable Class A Holder and
the Selling Cable Partner (i.e., a customary 2+1 appraisal
process, with a third appraiser appointed only if the first two
appraisals differ by more than 10%). In the case of non-cash
consideration that is received by the Selling Cable Partner on a
tax-free basis, the value of such non-cash consideration for
purposes of determining the First Offer Price shall be
"grossed-up" by an amount equal to (x) the gain recognized by the
Selling Cable Partner on a per share basis divided by (y) one
minus the highest statutory federal and state income tax rate
applicable to income of the Selling Cable Partner. Each Cable
Parent shall cause its applicable Cable Partner to not consummate
Non-Cash Transfers pursuant to clause (ii) of this Section 3.06
during the Blackout Periods.
8
<PAGE>
SECTION 3.07. Inapplicable Events. Notwithstanding
anything else set forth in this Agreement, Class A Holders shall
not have a Top Up Right and the Cable Partners shall not be
required to deliver a Notice of Pending or Completed Disposition
in connection with (i) any transfer to Sprint, (ii) an automatic
conversion of shares of Series 2 PCS Stock into shares of Series
1 PCS Stock pursuant to the Articles of Incorporation of Sprint
and (iii) Transfers by a Cable Partner of Series 2 PCS Stock to
an Affiliate of a Cable Partner; provided, however, that any such
Affiliate transferee agrees in writing to be bound by the terms
of this Agreement and shall thereafter be deemed a "Cable
Partner" of the applicable Cable Parent hereunder.
ARTICLE IV
TERMINATION
SECTION 4.01. Termination. The obligations of the
Cable Parents and the Cable Partners hereunder shall terminate
(i) at such time as the "equity purchase rights" of the Class A
Holders contained in Article V of the form of Amended and
Restated Stockholders' Agreement to be entered into in connection
with the CP Exchange would terminate, (ii) as to DT or FT,
respectively, upon any material breach of this Agreement by DT or
FT, as the case maybe, including any determination that the
representation and warranty of FT in Section 2.02 is untrue in
any material respect, or (iii), as to any Cable Parent, at such
time as such Cable Parent and its subsidiaries no longer hold any
shares of Series 2 PCS Stock.
ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.01. Top-Up Obligation. FT and DT agree to
purchase shares of Series 3 PCS Stock in connection with the CP
Exchange and the IPO, in the manner and amounts, and subject to
the conditions specified in the FT/DT Restructuring Agreement.
SECTION 5.02. Registration Rights Agreement. FT and DT
agree to enter into the Registration Rights Agreement
simultaneously with the entering into of this Agreement.
SECTION 5.03. Agreement to Vote in Favor of CP
Exchange and Recapitalization. FT and DT agree to vote their
shares of Sprint Common Stock in favor of the CP Exchange and the
Recapitalization (including the Initial Charter Amendment and the
Subsequent Charter Amendment) and the other matters related
thereto presented for a vote of stockholders in connection
therewith.
SECTION 5.04. Other Agreements Have No Effect. FT and
DT agree that no amendment, modification or alteration of any
provision of the agreements entered into in connection herewith
or to be entered into in connection with the Master Restructuring
and Investment Agreement among FT, DT and Sprint dated as of May
26, 1998 (including the form
9
<PAGE>
of Amended and Restated Stockholders' Agreement) shall have any
effect on the rights and obligations of the parties hereunder or
otherwise affect the meaning of any term or provision hereof.
ARTICLE VI
MISCELLANEOUS
-------------
SECTION 6.01. 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: France Telecom S.A.
6 place d'Alleray
75505 Paris Cedex 15
France
Attn: Group Executive Vice President
Resources
Tel: (33 1) 44 44 84 72
Fax: (33 1) 44 44 01 51
with a copy to: France Telecom S.A.
6 place d'Alleray
75505 Paris Cedex 15
France
Attn: General Counsel
Tel: (33 1) 44 44 84 76
Fax: (33 1) 44 12 40 35
with a copy to: Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
U.S.A.
Attn: Alfred J. Ross, Jr., Esq.
Tel: (212) 848-4000
Fax: (212) 848-8434
10
<PAGE>
DT: Deutsche Telekom S.A.
Friedrich-Ebeert-Allee 140
D-53113 Bonn
Germany
Tel: 49-228-181-9000
Fax: 49-228-181-8970
Attn: Chief Executive Officer
with a copy to: Cleary, Gottlieb, Steen & Hamilton
One Liberty Plaza
New York, New York 10006
U.S.A.
Attn: Robert P. Davis, Esq.
Tel: (212) 225-2000
Fax: (212) 225-3999
Notice to FT or DT shall be deemed to be notice to its
Qualified Subsidiaries and Qualified Stock Purchasers.
TCI: Tele-Communications, Inc.
5619 DTC Parkway
Englewood, Colorado 80111
Telecopy: (303) 488-3200
Attention: President
with copies to: Tele-Communications, Inc.
5619 DTC Parkway
Englewood, Colorado 80111
Telecopy: (303) 488-3245
Attention: General Counsel
Baker & Botts, L.L.P.
599 Lexington Avenue
New York, New York 10022-6030
Telecopy: (212) 705-5125
Attention: John L. Graham
Cox: Cox Communications, Inc.
1400 Lake Hearn Drive
Atlanta, Georgia 30319-1464
Telecopy: (404) 847-6336
Attention: Dallas Clement
11
<PAGE>
with a copy to: Dow, Lohnes & Albertson
1200 New Hampshire Avenue, N.W.
Suite 800
Washington, D.C. 20036-6802
Telecopy: (202) 776-2222
Attention: David D. Wild
Comcast: Comcast Corporation
1500 Market Street
Philadelphia, Pennsylvania 19102-2148
Telecopy: (215) 981-7794
Attention: General Counsel
with a copy to: Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Telecopy: (212) 450-4800
Attention: Dennis S. Hersch
The parties to this Agreement shall promptly notify each other in
the manner provided in this Section 6.01 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 telecopies also shall be sent
concurrently by mail, but shall in any event be effective as
stated above.
SECTION 6.02. 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 or 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 6.03. Binding Agreement; Assignment; No Third
Party Beneficiaries. This Agreement will be binding upon and
inure to the benefit of the parties hereto and their successors
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.
SECTION 6.04. GOVERNING LAW; DISPUTE RESOLUTION;
EQUITABLE RELIEF. (a) THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN
12
<PAGE>
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 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 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 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.
(c) EACH PARTY HERETO 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 TO A COPY THEREOF TO SUCH PARTY IN THE MANNER PROVIDED IN
SECTION 6.01. EACH PARTY 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 SUCH PARTY WILL AT ALL TIMES
HAVE AN AGENT FOR SERVICE OR 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 OR 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 PARTY FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE
13
<PAGE>
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 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 6.05. Severability. The invalidity or
unenforceability of any provision hereof in any jurisdiction will
not effect 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 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 6.06. Headings; Counterparts. 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 6.07. 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 hereto, executed simultaneously
with this Agreement. This Agreement supersedes all prior
agreements and understandings between the parties with respect to
such subject matter, expect as so provided in the preceding
sentence.
SECTION 6.08. 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 6.04, from service of process, from attachment prior
to judgment, from attachment in aid of execution of a
14
<PAGE>
judgment, from execution pursuant to a judgment or an arbitral
award or from any other legal process in any jurisdiction, if,
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. ss. 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.
15
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly
executed this TOP UP RIGHT Agreement as of the day and
year first above written.
FRANCE TELECOM S.A.
_____________________________
By:
Title:
DEUTSCHE TELEKOM AG
_____________________________
By:
Title:
TELE-COMMUNICATIONS, INC.
_____________________________
By:
Title:
COMCAST CORPORATION
_____________________________
By:
Title:
COX COMMUNICATIONS, INC.
_____________________________
By:
Title:
Exhibit 5
=================================================================
AMENDED AND RESTATED
STOCKHOLDERS' AGREEMENT
Among
FRANCE TELECOM S.A.,
DEUTSCHE TELEKOM AG
and
SPRINT CORPORATION
Dated as of ----------, 1998
=================================================================
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS............................................2
ARTICLE II RESTRICTIONS ON TRANSFER OF
SHARES....................32
Section 2.1. General Transfer
Restrictions..................32
Section 2.2. Transfers to Qualified
Subsidiaries............32
Section 2.3. Other Transfers Prior to January 31,
2001......33
Section 2.4. Other
Transfers................................33
Section 2.5. Company Rights to
Purchase.....................34
Section 2.6. Termination of Transfer
Restrictions...........40
Section 2.7. Notice of Certain
Actions......................42
Section 2.8. Restrictive
Legends............................42
Section 2.9. Reorganization, Reclassification,
Merger, Consolidation
or Disposition of
Shares.......................44
Section 2.10. Strategic Mergers;
Business Combinations; Company
Tender for
Shares..............................44
Section 2.11. Effect of Proposed
Redemption..................44
ARTICLE III PROVISIONS CONCERNING DISPOSITION OF LONG
DISTANCE
ASSETS.......................................45
Section 3.1. Offers to FT and
DT............................45
Section 3.2. Assignment of
Rights...........................48
Section 3.3. Timing of
Disposition..........................48
Section 3.4. Method of
Purchase.............................48
Section 3.5. Termination of
Rights..........................49
ARTICLE IV PROVISIONS CONCERNING CHANGE OF
CONTROL...............50
Section 4.1. Sale of Assets or
Control......................50
Section 4.2. Required Share
Purchases.......................50
ARTICLE V EQUITY PURCHASE
RIGHTS................................51
Section 5.1. Right to
Purchase..............................51
Section 5.2.
Notice.........................................53
Section 5.3. Manner of Exercise; Manner of
Payment..........54
Section 5.4.
Adjustments....................................54
Section 5.5. Closing of
Purchases...........................55
Section 5.6. Terms of
Payment...............................55
Section 5.7. Suspension of Equity Purchase
Rights...........56
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<PAGE>
Page
ARTICLE VI HOLDINGS BY MAJOR
COMPETITORS.........................58
ARTICLE VII
COVENANTS.............................................59
Section 7.1. Reservation and Availability
of Capital
Stock...............................59
Section 7.2. Assignee
Purchasers............................59
Section 7.3. Automatic Exercise of Rights
with Respect to Option Shares;
Method of
Purchase.............................59
Section 7.4. Procedures for
Redemption......................61
Section 7.5. Joint Action by FT and
DT......................63
Section 7.6. Compliance with Tax
Laws.......................63
Section 7.7. Compliance with Security
Requirements..........63
Section 7.8. Major
Issuances................................64
Section 7.9. Participation by Class A Directors
in Certain Circumstances
......................65
Section 7.10.
Spin-offs......................................65
Section 7.11. FCC
Licenses...................................66
Section 7.12. Issuance of Class A
Stock......................66
Section 7.13. Defeasance of Fifth
Series.....................66
Section 7.14. Continuing
Directors...........................66
Section 7.15. Long Distance
Business.........................66
Section 7.16. Intellectual
Property..........................66
Section 7.17. Automatic Exercise of Rights with
Respect to CP Conversion
Shares; Method of
Purchase.....................67
ARTICLE VIII TERMINATION OF CERTAIN
RIGHTS.........................68
ARTICLE IX TAX
INDEMNIFICATION...................................69
Section 9.1. Indemnification for Company
Purchase...........69
Section 9.2. Indemnification for Supplementary
Payments.....70
Section 9.3. Rebate of
Indemnity............................70
Section 9.4. Exclusions from
Indemnity......................71
Section 9.5. Consequences of
Assignment.....................72
Section 9.6.
Verification...................................72
Section 9.7. Contest
Rights.................................73
ARTICLE X U.S. REAL PROPERTY TAX
MATTERS........................74
Section 10.1.
Notification...................................74
Section 10.2. Control of FIRPTA
Determination................74
Section 10.3. Issuance of Certification; Related
Matters.....75
-ii-
<PAGE>
Page
Section 10.4. Advisory
Costs................................75
Section 10.5.
Indemnity.....................................75
Section 10.6. Contest
Rights................................76
ARTICLE XI
MISCELLANEOUS........................................77
Section 11.1.
Notices.......................................77
Section 11.2. Waiver, Amendment,
etc........................78
Section 11.3. No
Partnership................................78
Section 11.4. Binding Agreement; Assignment;
No Third Party Beneficiaries
.................79
Section 11.5. GOVERNING LAW; DISPUTE RESOLUTION;
EQUITABLE
RELIEF..............................79
Section 11.6.
Severability..................................80
Section 11.7.
Translation...................................81
Section 11.8. Table of Contents; Headings;
Counterparts.....81
Section 11.9. Entire
Agreement..............................81
Section 11.10.Waiver of
Immunity............................81
Section 11.11.Acquisitions by FT
and DT of Stock from Third
Parties............82
Section 11.12.Effect of
Conversion..........................82
Section 11.13.Continuing Director
Approval..................82
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<PAGE>
AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT
THIS AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT, dated as
of _____________, 1998 (this "Agreement"), by and among SPRINT
CORPORATION, a corporation formed under the laws of Kansas (the
"Company"), FRANCE TELECOM S.A., a societe anonyme 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, the Company, FT and DT entered into an Investment
Agreement dated as of July 31, 1995, as amended (the "Investment
Agreement") pursuant to which FT and DT purchased shares of
capital stock of the Company;
WHEREAS, in connection with the transactions contemplated
by the Investment Agreement, the Company, FT and DT entered into
a Stockholders' Agreement dated as of January 31, 1996, which
agreement was amended on June 24, 1997 (the "1996 Stockholders'
Agreement");
WHEREAS, the Company, FT and DT entered into a Master
Restructuring and Investment Agreement dated as of May 26, 1998
(the "FT/DT Restructuring Agreement"), which contemplates, among
other things, the purchase by FT and DT of shares of Series 3 PCS
Stock;
WHEREAS, as a condition precedent to and in consideration
of the transactions contemplated in the FT/DT Restructuring
Agreement, the Company, FT and DT are required to enter into this
Agreement and in reliance thereon the Company, FT and DT have has
entered into the FT/DT Restructuring Agreement;
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements contained
herein and in the FT/DT Restructuring Agreement, and for other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, each of FT, DT and the Company
(each a "Party and collectively the "Parties"), intending to be
legally bound, hereby agrees that the 1996 Stockholders'
Agreement is hereby amended and restated in its entirety as
follows:
<PAGE>
ARTICLE I
DEFINITIONS
-----------
The following capitalized terms used in this Agreement will
have the following meanings:
"Affiliate" means, with respect to any Person, any
other Person that directly, or indirectly through one or more
intermediaries, Controls or is Controlled by, or is under common
Control with, such Person, provided that (a) no JV Entity shall
be deemed an Affiliate of any party hereto unless (i) FT, DT and
Atlas own a majority of the Voting Power of such JV Entity and
the Company does not have the Tie-Breaking Vote, or (ii) FT, DT
or Atlas has the Tie-Breaking Vote; (b) FT, DT and the Company
shall not be deemed Affiliates of each other; (c) Atlas shall be
deemed an Affiliate of FT and DT; and (d) the term "Affiliate"
shall not include any Governmental Authority of France or Germany
or any other Person Controlled, directly or 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.
"Amended and Restated Confidentiality Agreements"
means
the Amended and Restated DT Investor Confidentiality Agreement
and the Amended and Restated FT Investor Confidentiality
Agreement.
"Amended and Restated DT Investor Confidentiality
Agreement" means the Amended and Restated Investor
Confidentiality Agreement between the Company and DT dated as of
the date hereof.
"Amended and Restated FT Investor Confidentiality
Agreement" means the Amended and Restated Investor
Confidentiality Agreement between the Company and FT dated as of
the date hereof.
"Amended and Restated Registration Rights Agreement"
means the Amended and Restated Registration Rights Agreement
among the Company, FT and DT, dated as of the date hereof, as it
may be amended or supplemented from time to time.
"Amended and Restated Standstill Agreement" means the
Amended and Restated Standstill Agreement among the Company, FT
and DT, dated as of the date hereof, as it may be amended or
supplemented from time to time.
-2-
<PAGE>
"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 CP Period" means a period beginning on the
fifth day prior to a record date relating to a vote of the
stockholders of the Company or the payment of dividends to the
stockholders of the Company and ending on the day following such
record date.
"Applicable FON Ratio" shall have the meaning set
forth in Section 7.5(b) hereof.
"Applicable Overall Ratio" shall have the meaning set
forth in Section 7.5(a) hereof.
"Applicable PCS Ratio" shall have the meaning set
forth in Section 7.5(b) hereof.
"Articles" means the Articles of Incorporation of the
Company, as amended or supplemented from time to time.
"Assignment Notice" shall have the meaning set forth
in
Section 3.2 hereof.
"Associate" has the meaning ascribed to such term in
Rule 12b-2 under the Exchange Act, provided that when used to
indicate a relationship with FT or DT or their respective
Subsidiaries or Affiliates, the term "Associate" shall mean (a)
in the case of FT, any Person occupying any of the positions
listed on Schedule A hereto, and (b) in the case of DT, any
Person occupying any of the positions listed on Schedule B
hereto, provided, further, that, in each case, no Person
occupying any such position described in clause (a) or (b) hereof
shall be deemed an "Associate" of FT or DT, as the case may be,
unless the Persons occupying all such positions described in
clauses (a) and (b) hereof Beneficially Own, in the aggregate,
more than 0.2% of the Voting Power of the Company.
"Atlas" means the company formed 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.
"Available Record Date Blackout Shares," with respect
to any Record Date Blackout Period, means a number of shares of
Series 3 FON Stock and/or Series 3 PCS Stock, the allocation of
which is determined by Section 5.8, which after giving effect to
the issuance of such shares represents Votes in an amount equal
to the lesser of (i) 20% of the Voting Power of the Company minus
the sum of (x) the Percentage Ownership Interest of the Class A
Holders as of the beginning of such Record Date Blackout Period,
and (y) the Percentage Ownership Interest which would be
represented by shares with respect to which the Class A Holders
have Equity Purchase Rights, after giving effect to the issuance
of such shares, (ii) 0.75% of the outstanding
-3-
<PAGE>
Voting Power of Sprint as of the first day of the Record Date
Blackout Period, and (iii) 1.25% of the outstanding Voting Power
of Sprint as of the first day of the Record Date Blackout Period,
less the Percentage Ownership Interest represented by the number
of Shares purchased pursuant to Section 5.8 during the preceding
12 months.
"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, the FT/DT Restructuring 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 (i) Class A Common Stock, Sprint FON Stock and
Sprint PCS 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; (ii)
Sprint FON Stock and Sprint PCS Stock shall not be deemed to be
Beneficially Owned by FT, DT or their Affiliates or Associates by
virtue of the top up rights and standby commitments granted under
the Purchase Rights Agreement except to the extent that FT, DT or
their Affiliates or Associates have (A) acquired shares of Sprint
FON Stock or Sprint PCS Stock pursuant to the Purchase Rights
Agreement, or (B) become irrevocably committed to acquire, and
the Cable Partners have become irrevocably committed to sell,
shares of Sprint FON Stock or Sprint PCS Stock pursuant to the
Purchase Rights Agreement (with such Beneficial Ownership being
determined on a full-voting basis), subject only to customary
closing conditions, if any; and (iii) FT, DT and their Affiliates
and Associates shall not be deemed to Beneficially Own any
incremental Voting Power resulting
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solely from the increase in Voting Power provided for by the
application of Section 7.5(d) of the Articles.
"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 FT/DT
Restructuring 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.
"Cable Partners" means Tele-Communications, Inc.,
Comcast Corporation and Cox Communications, Inc. and any of their
respective successors (by merger, consolidation, transfer or
otherwise) to all or substantially all of their respective
businesses or assets.
"Cellular and Wireless Division" means the former
Cellular and Wireless Communications Services Division of the
Company.
"Change in Law" shall have the meaning set forth in
Section 10.2(b) hereof.
"Change of Control" means a:
(a) decision by the Board of Directors to sell Control
of the Company or not to oppose a third party tender offer
for Voting Securities of the Company representing more than
35% of the Voting Power of the Company; or
(b) change in the identity of a majority of the
Directors due to (i) a proxy contest (or the threat to
engage in a proxy contest) or the election of Directors by
the holders of Preferred Stock; or (ii) any unsolicited
tender, exchange or other purchase offer which has not been
approved by a majority of the Independent Directors,
provided that a Strategic Merger shall not be deemed to be
a Change of Control and, provided, further, that any
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.
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"Class A Common Stock" means the Class A Common Stock
of the Company, including the Old Class A Common Stock and the
Class A Common Stock -- Series DT (each as described in the
Articles).
"Class A Director" means any Director elected by the
Class A Holders pursuant to Section 2(a) of ARTICLE FIFTH of the
Articles or appointed by Class A Directors pursuant to Section
4(b) of ARTICLE FIFTH of the Articles.
"Class A FON Shares" means shares of Series 3 FON
Stock and Shares Issuable With Respect to the Class A Equity
Interest in the FON Group.
"Class A Holder Eligible Notes" means notes of a Class
A Holder issued pursuant to Section 5.6, substantially in the
form of Exhibit A attached hereto, made payable to the Company
which, in the written opinion of an investment banking firm of
recognized international standing addressed to the Company and
reasonably satisfactory to the Company, would sell, at the date
of their issuance, at a price equal to their principal amount
(taking into account the likely manner and timing of resale by
the Company), provided that no note of any Class A Holder shall
be deemed to be a Class A Holder Eligible Note (a) if such Class
A Holder's debt instruments are at that time rated by Moody's
Investors Service, Inc., Standard and Poor's Corporation or Duff
& Phelps Credit Rating Co., and if it is to be issued at a time
when such Class A Holder's debt instruments comparable to the
note proposed to be a Class A Holder Eligible Note (or, if rated,
such note itself) do not possess at least two of the three
following ratings: Baa3 or better (or a 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 Non-Class A Common
Stock have been transferred in accordance with Section 2.2
hereof, and any Qualified Stock Purchaser that acquires shares of
Class A Stock or Non- Class A Common Stock pursuant to Article VI
or Section 5.1 of this Agreement or pursuant to Section 2.2(b) of
the Amended and Restated Standstill Agreement (and shall include
such Persons even after all of the shares of Class A Stock have
been converted into Non-Class A Common Stock of the Company).
"Class A PCS Shares" means shares of Series 3 PCS
Stock and Shares Issuable With Respect to the Class A Equity
Interest in the PCS Group.
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"Class A Provisions" means Section 5 (but only with
respect to those provisions addressing the Class A Stock),
Section 6 (but only with respect to those provisions addressing
the Class A Stock), Section 8, Section 9 (but only with respect
to those provisions addressing the Class A Stock), Section 10,
Section 11 and Section 12 of ARTICLE SIXTH of the Company's
Articles of Incorporation, as amended from time to time.
"Class A Stock" means the Class A Common Stock, the
Series 3 FON Stock and the Series 3 PCS 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, 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 (but not pursuant to the FT/DT
Restructuring Agreement until such shares are acquired pursuant
to such 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 (but not pursuant to the FT/DT
Restructuring Agreement until such shares are acquired pursuant
to such agreement).
"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
Section 2.6(b)(ii) hereof, which, in the written opinion of an
investment banking firm of recognized international
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<PAGE>
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.
"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
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<PAGE>
(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.
"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.
"CP Closing" shall have the meaning set forth in
Article VIII of the FT/DT Restructuring Agreement.
"CP Conversion Shares" shall mean shares of Series 1
PCS Stock issued upon the conversion of shares of Series 2 PCS
Stock.
"Director" means a member of the Board of Directors.
"DT" shall have the meaning specified in the preamble.
"Eligible Purchaser" shall have the meaning set forth
in Section 2.5(c)(i) hereof.
"Equity Purchase Price" shall have the meaning set
forth in Section 5.5(b) hereof.
"Equity Purchase Right" shall have the meaning set
forth in Section 5.1 hereof.
"ESMR" means any commercial mobile radio service, and
the resale of such service, of the type authorized under the
rules for Specialized Mobile Radio Services designated under
Subpart S of Part 90 of the FCC's rules or similar Applicable
Laws of any other country in effect on the date hereof, including
the networking, marketing, distribution, sales, customer
interface and operations functions relating thereto.
"Europe" means the current geographic area covered by
the following countries and territories located on the European
continent, plus in the case of France, its 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,
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<PAGE>
Portugal, Romania, San Marino, Serbia, Slovakia, Slovenia, Spain,
Sweden, Switzerland, Turkey, Ukraine, United Kingdom, and Vatican
City.
"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 January 31, 1996;
(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) 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;
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<PAGE>
(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 the
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Joint Venture holds equity interests in such entity, such
Major Competitor's equity interests and Votes in such
entity as a percentage of the Voting Power of such entity
shall not, directly or indirectly, exceed 20 percent;
(c) Transfers of Long Distance Assets pursuant to an
underwritten, widely- distributed public offering at the
conclusion of which the Company and its 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 as such weighted
average useful life upon commercially reasonable terms to
the
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<PAGE>
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.
"FCC" means the Federal Communications Commission.
"FCC Order" means, with respect to any proposed
Transfer of Long Distance Assets by the Company, either:
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(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
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.
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"FON Trading Average" means (i) the Volume Weighted
Trading Average of the Series 1 FON Stock for the ten consecutive
Trading Days following the date of the Recapitalization, divided
by (ii) a fraction, the numerator of which is the number of
shares of Sprint FON Common Stock which are outstanding
immediately prior to the Recapitalization and the denominator of
which is the number of shares of Series 1 FON Stock issued in the
Recapitalization.
"Formula Price" means (i) prior to the
Recapitalization, 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 Sprint FON Common Stock on the date of the sale of such
share of Class A Common Stock, and (b) an amount equal to the
Weighted Average Price paid by the Class A Holders for the share
of 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 the purchase of such share of
Class A Common Stock until the date of redemption, (ii) after the
Recapitalization, as to a Class A FON Share, a per share price
equal to the greater of (a) the Market Price of a share of Series
1 FON Stock on the date of the sale of such Class A FON Share,
and (b) an amount equal to the Weighted Average Price paid by the
Class A Holders for the Class A FON Share, 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 the purchase of
such Class A FON Share until the date of redemption, and (iii) as
to a Class A PCS Share, a per share price equal to the greater of
(a) the Market Price of a share of Series 1 PCS Stock on the date
of the sale of such Class A PCS Share, and (b) an amount equal to
the Weighted Average Price paid by the Class A Holders for the
Class A PCS Share, 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 PCS
Share until the date of redemption. In determining the Weighted
Average Price paid by the Class A Holders for purposes of this
definition following the Recapitalization, the original purchase
price paid by the Class A Holders for shares of Class A Common
Stock acquired by the Class A Holders prior to the
Recapitalization shall be allocated among the Class A FON Shares
and the Class A PCS Shares as follows: (i) the amount allocated
to the Class A FON Shares shall be equal to the aggregate amount
paid by the Class A Holders for Class A Common Stock prior to the
Recapitalization, multiplied by (A) the FON Trading Average,
divided by (B) the sum of the FON Trading Average and the PCS
Trading Average, and (ii) the amount allocated to the Class A PCS
Shares shall be equal to the aggregate amount paid by the Class A
Holders for Class A Common Stock prior to the Recapitalization,
multiplied by (A) the PCS Trading Average, divided by (B) the sum
of the FON Trading Average and the PCS Trading Average.
"France" means the Republic of France, including
French Guiana, Guadeloupe, Martinique and Reunion, and its
territories and possessions.
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"FT" shall have the meaning specified in the preamble.
"FT/DT Joint Venture Termination" means any of the
following:
(a) the sale of Venture Interests by an FT/DT Party
pursuant to Section 20.5(b), 20.5(c) or 20.5(d) of the
Joint Venture Agreement; or
(b) the receipt by the Sprint Parties of the
Tie-Breaking Vote due to a Funding Default, Material
Non-Funding Default or Bankruptcy (as such terms are
defined in the Joint Venture Agreement) on the part of any
of the FT/DT Parties.
"FT/DT Party" shall have the meaning set forth in the
Joint Venture Agreement.
"FT/DT Restructuring Agreement" shall have the meaning
set forth in the Recitals.
"FT/DT Stock Payment Notes" means notes of FT and DT
in substantially the form of Exhibit E.
"FT/DT Weighted Purchase Price" means the Weighted
Average Price paid by FT, DT, their respective Qualified
Subsidiaries and any Qualified Stock Purchasers for Class A
Common Stock, Class A FON Shares or Class A PCS Shares, as the
case may be, calculated solely with respect to Class A Common
Stock, Class A FON Shares or Class A PCS Shares, as the case may
be, purchased from the Company pursuant to this Agreement, the
Investment Agreement or the FT/DT Restructuring Agreement. In
determining the FT/DT Weighted Purchase Price paid by the Class A
Holders for purposes of this definition following the
Recapitalization, the original purchase price paid by the Class A
Holders for shares of Class A Common Stock prior to the
Recapitalization shall be allocated among the Class A FON Shares
and the Class A PCS Shares as follows: (i) the amount allocated
to the Class A FON Shares shall be equal to the aggregate amount
paid by the Class A Holders for Class A Common Stock purchased
from the Company prior to the Recapitalization, multiplied by (A)
the FON Trading Average, divided by (B) the sum of the FON
Trading Average and the PCS Trading Average, and (ii) the amount
allocated to the Class A PCS Shares shall be equal to the
aggregate amount paid by the Class A Holders for Class A Common
Stock purchased from the Company prior to the Recapitalization,
multiplied by (A) the PCS Trading Average, divided by (B) the sum
of FON Trading Average and the PCS Trading Average.
"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.
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"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.
"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 July 31, 1995 who was not an
executive officer of the Company shall be deemed to be an
Independent Director hereunder.
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"Initial Charter Amendment" means the Amended and
Restated Articles of Incorporation of Sprint filed with the
Secretary of State of the State of Kansas on _____, 1998
effecting the creation of the PCS Stock, among other things.
"Investment Agreement" shall have the meaning set
forth in the Recitals.
"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" means the Joint Venture
Agreement dated as of June 22, 1995, as amended on January 31,
1996, and on June 30, 1997, by and among the Company, Sprint Sub,
FT, DT and Atlas.
"Joint Venture Documents" shall have the meaning set
forth in the Joint Venture Agreement.
"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:
(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;
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(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.
"Local Exchange Division" means the Local 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
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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
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
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 the Major
Issuance Threshold, as measured on the date of such issuance or
sale.
"Major Issuance Threshold" means, with respect to an
issuance of Voting Securities, 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.
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"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 Class A FON Share, the Market
Price of a share of Series 1 FON Stock; and (b) in the case of a
Class A PCS Share, the Market Price of a share of Series 1 PCS
Stock. The Market Price of any options, warrants, rights or other
securities convertible into or exercisable for a Class A FON
Share or a Class A PCS Share, as the case may be, shall be equal
to the Market Price of options, warrants, rights or other
securities convertible into or exercisable for Series 1 FON Stock
or Series 1 PCS Stock, respectively, upon the same terms and
otherwise containing the same terms as such options, warrants,
rights or other securities convertible into or exercisable for a
Class A FON Share or a Class PCS Share, as the case may be.
"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.
"1996 Stockholders' Agreement" shall have the meaning
set forth in the Recitals.
"Non-Class A Common Stock" means the Sprint FON Common
Stock and the Sprint PCS Common Stock.
"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 interests, assets, properties and businesses
attributed to the PCS Group (as defined in the Articles) in
accordance with ARTICLE SIXTH, Section 10 of the Articles; (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,
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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.
"Number of Shares Issuable With Respect to the Class A
Equity Interest in the FON Group" shall have the meaning set
forth in ARTICLE SIXTH, Section 10 of the Articles.
"Number of Shares Issuable With Respect to the Class A
Equity Interest in the PCS Group" shall have the meaning set
forth in ARTICLE SIXTH, Section 10 of the Articles.
"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.
"Other Investment Documents" means the Investment
Agreement, the FT/DT Restructuring Agreement, the Amended and
Restated Standstill Agreement, the Amended and Restated
Confidentiality Agreements, any Qualified Subsidiary Standstill
Agreement, the Amended and Restated 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 Amended and
Restated Standstill Agreement or any confidentiality agreement
entered into by a holder of equity interests of a Qualified
Subsidiary pursuant to the Amended and Restated Confidentiality
Agreements.
"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.
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"PCS Preferred Stock" means the Preferred Stock --
Series 7, no par value, of Sprint, which is to be created prior
to the CP Closing.
"PCS Trading Average" means (i) the Volume Weighted
Trading Average of the Series 1 PCS Stock for the ten consecutive
Trading Days following the date of the Recapitalization, divided
by (ii) a fraction, the numerator of which is the number of
shares of Sprint FON Common Stock which are outstanding
immediately prior to the Recapitalization and the denominator of
which is the number of shares of Series 1 PCS Stock issued in the
Recapitalization.
"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.
"Post-Restructuring Series 3 PCS Shares" shall mean
(i) the shares of Series 3 PCS Stock issued or to be issued to FT
and DT under the FT/DT Restructuring Agreement in respect of the
CP/FT-DT Top Up Purchase, the CP/IPO Top Up Purchase and the
CP/Greenshoe Top Up Purchase (each as defined in the FT/DT
Restructuring Agreement), (ii) the shares of Series 3 PCS Stock
to be issued to FT and DT after the date of this Agreement
pursuant to the Equity Purchase Rights to be exercised by FT and
DT under Article V of this Agreement, (iii) shares of Series 3
PCS Stock issued to FT or DT upon conversion of Sprint PCS Common
Stock acquired in purchases by FT and DT from third parties and
not in violation of the Amended and Restated Standstill
Agreement, and (iv) shares into which such shares described in
clauses (i), (ii) and (iii) are converted pursuant to any
recapitalization, it being understood that such term shall not
include any Sprint PCS Stock acquired by FT or DT in the
Recapitalization or pursuant to the FT/DT Restructuring Agreement
other than shares acquired in respect of the CP/FT-DT Top Up
Purchase, the CP/IPO Top Up Purchase and the CP/Greenshoe Top Up
Purchase.
"Preferred Stock" means any series of Preferred Stock
of the Company.
"Principal Investment Documents" shall have the
meaning set forth in Section 7.10 hereof.
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<PAGE>
"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.
"Purchase Rights Agreement" means the Top Up Right
Agreement dated as of May 26, 1998 among FT, DT and the Cable
Partners as in effect on such date.
"Qualified Joint Venture" means any operating joint
venture of which not more than 20% in the aggregate of the Voting
Power or outstanding equity interests thereof are owned by Major
Competitors of FT or DT or of the Joint Venture, and that
(a) has received contributions of assets by the other
participants therein which are predominately of a nature
similar or complementary to the Long Distance Assets
contributed by the Company;
(b) owns assets that are available for use by the
Company on a basis which is no less favorable than that
which is afforded to other participants in such joint
venture;
(c) would treat the Joint Venture, as a customer of
the joint venture, no less favorably than other similarly
situated customers;
(d) is operated in a manner not inconsistent with the
policies of the Joint Venture; and
(e) as to which the Company undertakes to use
commercially reasonable efforts to align the activities of
such joint venture with those of the Joint Venture,
including, without limitation, to use commercially
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
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<PAGE>
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 Amended and Restated
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
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 no Major Competitor or Major
Competitors of the Company or of the Joint Venture 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
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<PAGE>
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.
"Recapitalization" shall have the meaning set forth in
Article VIII of the FT/DT Restructuring Agreement.
"Record Date Blackout Period" means a period of ten
Trading Days beginning on the ninth Trading Day before a record
date for a meeting of the Company's stockholders or for the
payment of dividends with respect to Class A Stock and ending on
(and including) such record date (which shall be a Trading Day),
if during such period the Class A Holders are prohibited from
purchasing shares of Sprint FON Stock and Sprint PCS Stock from
third parties in the open market due to applicable anti-fraud
rules.
"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
Section 2.2(b) of ARTICLE SIXTH of the Company's Articles, 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 Section 2.2(d) of the
Company's Articles, at least equal to the redemption price
required to be paid by such Section 2.2.
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"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.
"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 June 9, 1997, between the Company and UMB Bank, N.A., as
amended on _______, 1998 and as it may be further 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.
"Series 1 FON Stock" means the FON Common Stock --
Series 1, par value U.S. $___ per share, of Sprint to be created
in the Subsequent Charter Amendment.
"Series 1 PCS Stock" means the PCS Common Stock --
Series 1, par value U.S. $___ per share, of Sprint to be created
by the Initial Charter Amendment.
"Series 2 FON Stock" means the FON Common Stock --
Series 2, par value U.S. $___ per share, of Sprint to be created
by the Subsequent Charter Amendment.
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"Series 2 PCS Stock" means the PCS Common Stock --
Series 2, par value U.S. $___ per share, of Sprint to be created
by the Initial Charter Amendment.
"Series 3 FON Stock" means the FON Common Stock --
Series 3, par value U.S. $___ per share, of Sprint to be created
by the Subsequent Charter Amendment.
"Series 3 PCS Stock" means the PCS Common Stock --
Series 3, par value U.S. $___ per share, of Sprint to be created
by the Initial Charter Amendment.
"Shares" means (a) shares of Class A Stock, Non-Class
A Common Stock, PCS Preferred 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 FT/DT Restructuring
Agreement, the Purchase Rights Agreement and this Agreement (but
not excluding any Voting Securities received upon the exercise of
such rights).
"Shares Issuable With Respect to the Class A Equity
Interest in the FON Group" shall have the meaning set forth in
ARTICLE SIXTH, Section 10 of the Articles.
"Shares Issuable With Respect to the Class A Equity
Interest in the PCS Group" shall have the meaning set forth in
ARTICLE SIXTH, Section 10 of the Articles.
"Sprint FON Common Stock" means (i) prior to the
Recapitalization, the Common Stock, par value U.S. $2.50 per
share, of the Company, and (ii) following the Recapitalization,
the Series 1 FON Stock and the Series 2 FON Stock.
"Sprint FON Stock" means the Sprint FON Common Stock
and the Series 3 FON Stock.
"Sprint PCS Common Stock" means the Series 1 PCS Stock
and the Series 2 PCS Stock.
"Sprint PCS Stock" shall mean the Sprint PCS Common
Stock and the Series 3 PCS Stock.
"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.
"Sprint Party" shall have the meaning set forth in the
Joint Venture Agreement.
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"Sprint Sub" shall have the meaning set forth in the
Joint Venture Agreement.
"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
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.
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"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
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
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(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.
"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.
"Volume Weighted Trading Average" means, with respect
to any share of capital stock as of a specific date, the
volume-weighted average Closing Prices of such security for the
relevant trading period.
"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 Non-Class
A Common Stock, the Class A Stock and the PCS Preferred Stock,
but shall not
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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 Non-Class A Common Stock or Class A 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 Non-Class A 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 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
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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 January 31, 2001.
Until
January 31, 2001, Shares shall not be Transferred by a Class A
Holder except as provided in Section 2.2, provided that
Post-Restructuring Series 3 PCS Shares shall not be subject to
the restriction set forth in this Section 2.3, but shall be
subject to the restrictions and limitations set forth in Sections
2.4 and 2.8.
Section 2.4. Other Transfers. If Section 2.3 hereof does
not
apply or is 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 (including any Transfer of Post-Restructuring
Series 3 PCS Shares):
(a) a Transfer in a single transaction or a series of
related transactions of Shares may be made to a Person or
Group (other than a Qualified Subsidiary or Subsidiaries or
FT or DT) that Beneficially Owns Voting Securities with a
number of Votes representing greater than five percent of
the Voting Power of the Company immediately following such
Transfer or Transfers only in connection with a Public
Offering in which:
(i) the Transferring Stockholder does not, to
the
best of its knowledge, Transfer a number of Shares
representing more than two percent of the Voting Power
of the Company to a Person or Group that, prior to
such Transfer, Beneficially Owned Voting Securities
entitled to a number of Votes representing three
percent or more of the Voting Power of the Company;
(ii) the Transferring Stockholder does not, to
the best of its knowledge, Transfer in a single
transaction or a series of related transactions to a
Person or Group a number of Shares representing more
than five percent of the Voting Power of the Company;
and
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(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;
(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, 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; and
(c) For so long as the sum of (i) the aggregate
Committed Percentage of the Class A Holders, and (ii) the
percentage of Voting Power of the Company which the Class A
Holders have the right to commit to purchase pursuant to
Sections 7.3 and 7.8 and Articles V and VI of this
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 (other than any
Post-Restructuring Series 3 PCS 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 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
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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,
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 (other than any Post-Restructuring Series 3 PCS 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, as
adjusted to comply with the requirements of Article IX, of the
Series 1 FON Stock or Series 1 PCS Stock, as the case may be, 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
Offered Shares) unless a majority of the Continuing Directors
shall have first approved (unless such approval is not required
under Section 11.13), at
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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 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 (other than any Post-Restructuring Series 3 PCS 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
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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 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 (other than any Post-Restructuring Series 3
PCS 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
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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 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
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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 King & Spalding, 1185 Avenue of the
Americas, New York, New York, 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 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
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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 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. (a) 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; Article FIFTH of the Articles (to the
extent such Article relates to the rights of the
holders of Class A Stock); or the Class A Provisions,
provided, that, if the Company so breaches any of
these obligations, and such breach is capable of being
cured without adversely affecting in any material
respect the Class A Holders or their rights hereunder
or under the Other Investment Documents, the Articles
or the Bylaws, (x) the date of termination of the
Transfer Restrictions
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<PAGE>
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) 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
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, falls below five percent;
(vi) 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
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 Stock
from the Company pursuant to Section 7.8 with respect
to such transaction and, for 180 days following the
date of such Major Issuance, not to make open market
purchases pursuant to Section 7.8 that would result in
the Class A Holders having an aggregate Committed
Percentage of ten percent or more, or (2) fail to
exercise their rights to purchase Class A 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;
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(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 Stock have been converted into shares of
Non-Class A Common Stock or the rights of the Class A
Holders under Section 8.2 of ARTICLE SIXTH of the
Articles are suspended pursuant to clauses (ii) or
(iii) of Section 8.5(b) of ARTICLE SIXTH of the
Articles, if, between January 31, 1998 and January 31,
2001, 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
8.2(a)(i), 8.2(a)(ii), 8.2(a)(iii) or 8.2(a)(iv) of
ARTICLE SIXTH of the Articles, 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) [Reserved]
Section 2.7. Notice of Certain Actions. Unless all of the
outstanding shares of Class A Stock have been converted into
shares of Non-Class A Common Stock or the rights of the Class A
Holders under Section 8.2 of ARTICLE SIXTH of the Articles are
suspended pursuant to clause (ii) or (iii) of Section 8.5(b) of
ARTICLE SIXTH of the Articles, until January 31, 2001, 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 8.2(a)(i) and 8.2(a)(ii) of ARTICLE SIXTH
of the Articles, or (b) the Company taking or engaging in,
directly or indirectly, any of the transactions described in
Sections 8.2(a)(iii) and 8.2(a)(iv) of ARTICLE SIXTH of the
Articles, 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
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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.
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.
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(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
legend.
(g) No Class A Holder may pledge Shares (other than
Post-Restructuring Series 3 PCS Shares) except to a Person that
is a bona fide financial institution. Prior to the consummation
of a pledge of Shares (other than Post-Restructuring Series 3 PCS
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 such 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 Series 1 FON Stock or Series 1 PCS
Stock, as the case may be, 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 (including the Recapitalization), 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
April 26, 1999, the Company shall, prior to redeeming any Shares
pursuant to Section 2.2 of ARTICLE SIXTH of the Articles,
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provide the Class A Holders with notice of its intention to so
redeem such Shares, which notice shall set forth the number of
such Shares held by the Class A Holders which are proposed to be
redeemed. For a period of 120 days thereafter (as extended day
for day for each day that such sales are actually delayed during
such time period because (i) the Shares proposed to be redeemed
cannot be sold due to the anti-fraud rules of the U.S. securities
laws, or (ii) the Company has delayed a proposed registration of
such Shares in accordance with Section 1.4 of the Amended and
Restated 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 2.2 of ARTICLE SIXTH of the Articles) (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) January
31, 2001 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) January 31,
2006, (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 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 8.2(b) of ARTICLE SIXTH of the Articles would be in
effect but for the fact that they have been suspended pursuant to
Sections 8.5(b)(ii) or (iii) of ARTICLE SIXTH of the Articles
(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
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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
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
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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 July 31,
1995 (calculated in each case as of the date the Company or such
Subsidiary entered into a definitive agreement to Transfer such
Long Distance Assets), equals or exceeds 30 percent of the Fair
Market Value of the Long Distance Assets of the Company and its
Subsidiaries taken as a whole (calculated as at the date the
Company or such Subsidiary enters into a definitive agreement to
effect such Transfer), the Company shall first deliver written
notice (the "LD Sale Notice") to each of FT and DT stating that
the Company proposes to effect such a Transfer and setting forth
in reasonable detail (i) the Long Distance Assets proposed to be
Transferred (the "Specified Long Distance Assets"), (ii) the
price which the Company expects to receive for such assets and
(iii) the other material terms and conditions of Transfer
(including the assumption of liabilities, if any, by the
transferee in connection therewith), provided that the Company
shall not be permitted to deliver such LD Sale Notice (and
accordingly may not proceed with such Transfer) unless a majority
of the Continuing Directors shall have first approved (unless
such approval is not required 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
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Governmental Approvals. Such notice must be delivered within 90
days after the date of receipt of the LD Sale Notice, such period
to be extended to the earlier to occur of (i) five Business Days
following the latest to occur of the next regularly scheduled
meetings of the Supervisory Boards of FT, DT and any Qualified LD
Purchaser (in case of such an assignment), and (ii) 150 days
following the date of receipt of the LD Sale Notice described
above (such period, the "LD Option Period").
Section 3.2. Assignment of Rights. At any time during the
LD
Option Period, upon 45 days' notice (an "Assignment Notice") to
the Company, FT and DT may assign the rights described in Section
3.1(c) to one or more 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 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 King & Spalding, 1185
Avenue of the Americas, 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,
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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) upon the conversion of all
of the outstanding shares of Class A Stock into Non-Class A
Common Stock pursuant to Sections 8.5(a), 8.5(b), 8.5(c) or
8.5(g) of ARTICLE SIXTH of the Articles, (b) 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, or (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. 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
8.2(b) of ARTICLE SIXTH of the Articles are suspended pursuant to
Section 8.5(b)(iv) of ARTICLE SIXTH of the Articles.
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ARTICLE IV
PROVISIONS CONCERNING CHANGE OF CONTROL
---------------------------------------
Section 4.1. Sale of Assets or Control. So long as shares
of
Class A Stock are outstanding, but subject to Article VIII of
this Agreement, if the Company determines to sell all or
substantially all of the assets of the Company or not to oppose a
tender offer by a Person other than any Class A Holder or Holders
for Voting Securities of the Company representing more than 35
percent of the Voting Power of the Company or to sell Control of
the Company or to effect a merger or other business combination,
which would result in a Person (other than FT or DT or any of
their Qualified Subsidiaries) holding Voting Securities of the
resulting entity representing 35 percent or more of the Voting
Power of such entity, the Company shall conduct such transaction
in accordance with reasonable procedures to be determined by the
Board of Directors, and permit FT and DT to participate in that
process on a basis no less favorable than that granted any other
participant.
Section 4.2. Required Share Purchases. If a Person other
than
FT, DT or any of their respective 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:
(i) if the tender offer involves only Series 1
FON Stock, Class A FON Shares as the holders of Series
1 FON Stock are permitted to sell taking into account
any proration,
(ii) if the tender offer involves only Series 1
PCS Stock, Class A PCS Shares as the holders of Series
1 PCS Stock are permitted to sell taking into account
any proration, or
(iii) if the tender offer involves both Series 1
FON Stock and Series 1 PCS Stock, Class A FON Shares
and Class A PCS Shares as the holders of Series 1 FON
Stock and Series 1 PCS Stock, respectively, 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 all but not less than all, of the Shares that they were
unable to tender on the same basis as the other shareholders, at
a price per share (x) in the case of Class A FON Shares, equal to
the price per share of Series 1 FON Stock offered pursuant to the
tender offer, (y) in the case of Class A PCS Shares, equal to the
price per share of Series 1 PCS Stock offered pursuant to the
tender offer, and (z) in the case of Class A FON
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Shares and Class A PCS Shares, equal to the price per share of
Series 1 FON Stock and Series 1 PCS Stock offered pursuant to the
tender offer. Notwithstanding the preceding sentence, 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 each class and/or
series of Class A Stock corresponding to the classes and/or
series of stock subject to the tender offer, publicly traded
securities with an aggregate Fair Market Value, and/or cash in an
amount, not less than the aggregate price per share of the Series
1 FON Stock and/or Series 1 PCS Stock, 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
<PAGE>
EQUITY PURCHASE RIGHTS
----------------------
Section 5.1. Right to Purchase. Except as provided in
Section
5.7 hereof, and except to the extent that the Class A Holders
have acquired shares pursuant to the FT/DT Restructuring
Agreement which otherwise would have given rise to Equity
Purchase Rights hereunder, 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 the applicable series or class of Class A Stock
corresponding to the underlying series or class of Non-Class A
Common Stock being issued, unless in the case of Section 5.1(d)
all of the Class A Holders provide the Company prior to such
purchase with written instructions to the contrary and such
instructions are not inconsistent with Section 7.5 hereof or the
Amended and Restated Standstill Agreement):
(a) except under the circumstances described in
clauses (e) and (f) below, if the Company shall issue (or
sell from treasury) shares of Sprint FON Common Stock prior
to the Recapitalization (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
Class A Common Stock, that number of additional shares of
Class A Common Stock 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 the Weighted Average Price paid for such shares of
Sprint FON Common Stock whose issuance gave rise to such
Equity Purchase Right;
(b) except under the circumstances described in
clauses (e) and (f) below, if after the Recapitalization
the Company shall issue (or sell from treasury) shares of
Sprint FON 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
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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 Series 3 FON Stock or Class A Common Stock, that number
of additional shares of Series 3 FON Stock 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 the Weighted Average Price paid for
such shares of Sprint FON Common Stock whose issuance gave
rise to such Equity Purchase Right;
(c) except to the extent the Class A Holders exercise
their rights provided in clause (d) below and except under
the circumstances described in clauses (e) and (f) below,
if the Company shall issue (or sell from treasury) shares
of Sprint PCS Common Stock (including, without limitation,
any CP Conversion Shares or 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 Series 3 PCS Stock
or Class A Common Stock, that number of additional shares
of Series 3 PCS Stock 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) if the Class A Holders exercise such Equity Purchase
Rights during the 45 day period after the date of issuance
(or sale from treasury) of such shares of Sprint PCS Common
Stock (the "Initial Decision Period") giving rise to the
Equity Purchase Right, the Market Price of a share of
Series 1 PCS Stock on the date of such issuance, or (y) if
the Class A Holders exercise such Equity Purchase Right
after the Initial Decision Period, the higher of (I) the
Market Price of a share of Series 1 PCS Stock on the date
of such issuance giving rise to the Equity Purchase Right,
and (II) the Market Price of a share of Series 1 PCS Stock
on the date of such exercise by FT and DT of the Equity
Purchase Right;
(d) except to the extent the Class A Holders exercise
their rights provided in clause (c) above, if (i) the
Company shall issue (or sell from treasury) CP Conversion
Shares, (ii) the Series 2 PCS Stock shall convert into
Series 1 PCS Stock pursuant to Section 7.5(a) of Article
SIXTH of the Articles, (iii) the Voting Power of the PCS
Preferred Stock shall increase due to a transfer of the PCS
Preferred Stock, or (iv) the CP Warrants shall be exercised
in exchange for the issuance of Sprint PCS Stock, that
number of additional shares of Series 3 FON Stock
sufficient for the Class A Holders to maintain their
aggregate Committed Percentage as in effect immediately
prior to such event, such Shares to be purchased at a per
share purchase price equal to the Market Price of a share
of Series 1 FON Stock on the date of such issuance giving
rise to the Equity Purchase Right; provided, that (x) the
Equity Purchase Rights under this Section 5.1(d) may not be
exercised unless prior to exercising such rights the Class
A Holders deliver a written certificate signed by their
respective chief financial officers to the effect that such
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Class A Holders have made a good faith determination that
it is not practicable or advisable at such time to acquire
shares of Series 1 FON Stock through open market purchases
or other purchases from third parties, and (y) the maximum
aggregate amount of Series 3 FON Stock which may be
purchased pursuant to this Section 5.1(d) (either in a
single purchase or in the aggregate through purchases over
time) shall not exceed $300 million;
(e) if the Company shall issue (or sell from treasury)
Voting Securities other than Sprint FON Common Stock or
Sprint PCS Common Stock, or issue shares of Sprint FON
Common Stock or Sprint PCS 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
April 26, 1996 (including pursuant to employee benefit
plans) or upon the conversion of any securities outstanding
on or before April 26, 1996) other than upon the conversion
or exchange of the Class A Stock or the Series 2 PCS Stock,
that number of additional shares of Series 3 FON Stock
and/or Series 3 PCS Common Stock, as the case may be,
sufficient for the Class A Holders to maintain their
aggregate Committed Percentage (and relative proportionate
holdings of Series 3 FON Stock and Series 3 PCS Stock) 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 Series 3 FON
Stock, the Market Price of a share of Series 1 FON Stock on
the date of the issuance which gave rise to such Equity
Purchase Right and (ii) in the case of the Series 3 PCS
Stock, the Market Price of a share of Series 1 PCS Stock on
the date of the issuance which gave rise to such Equity
Purchase Right; and
(f) if the Company shall issue (or sell from treasury)
shares of Sprint FON Common Stock or Sprint PCS 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
April 26, 1996 (including pursuant to employee benefit
plans) or upon the conversion of any securities outstanding
on or before April 26, 1996, other than upon the conversion
or exchange of the Class A Stock, that number of additional
shares of Series 3 FON Stock or Series 3 PCS Stock, as the
case may be, 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 the applicable FT/DT Weighted
Purchase Price.
Section 5.2. Notice. The Company shall deliver to each
Class A
Holder (a) written notice of the proposed issuance of any Voting
Securities 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
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for such Voting Securities and contain the calculation thereof,
provided that no such notices need be given in respect of (x) the
issuance of CP Conversion Shares (provided that the Company shall
give notice to the Class A Holders of the issuance of CP
Conversion Shares as soon as practicable after the surrender of
the related shares of Series 2 PCS Stock for conversion) or (y)
in respect of the issuance of shares of Sprint FON Stock or
Sprint PCS Stock, as the case may be, 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 January 31, 1996, 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 Sprint FON Stock or Sprint PCS Stock, as applicable, are
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, 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 or 7.17, as the
case may be; provided that the Class A Holders may exercise their
Equity Purchase Rights arising under Section 5.1(c) with respect
to an issuance of Shares by written notice to the Company
delivered prior to the second anniversary of the date of such
issuance. Payment for the additional Shares purchased or
subscribed for by Class A Holders which exercise their Equity
Purchase Rights shall be made as provided in Section 5.6 hereof
or as otherwise may be agreed by the Company and the exercising
Class A Holder or Holders. The total number of Shares issuable
upon such exercise shall be issued and delivered to the
appropriate Class A Holder against delivery to the Company of the
cash and any notes therefor as provided in Section 5.6 hereof or
as otherwise may be agreed by the Company and the exercising
Class A Holder or Holders. In connection with the occurrence of
any issuance that gives rise to Equity Purchase Rights and to
purchase rights of the Cable Partners under the PCS Restructuring
Agreement, Sprint shall use its reasonable efforts to coordinate
the exercise of purchase rights by the Cable Partners and FT and
DT to avoid a series of successive exercises of purchase rights
triggered by a single issuance.
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
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<PAGE>
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 Class A Stock or
Non-Class A Common Stock, as the case may be, during such time,
including the Recapitalization.
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 King & Spalding, 1185 Avenue of the Americas, 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 (i) the aggregate amount to be paid to the
Company is less than $200 million, (ii) the Equity Purchase
Rights relating to such purchase have arisen under Section
5.1(c) and such rights were exercised after the Initial
Decision Period or (iii) the Equity Purchase Rights
relating to such purchase have arisen under Section 5.1(d),
payment shall be made by the Class A 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,
unless the Equity Purchase Rights relating to such purchase
have arisen under Section 5.1(c) and such rights were
exercised after the Initial Decision Period or the Equity
Purchase Rights relating to such purchase have arisen under
Section 5.1(d), 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
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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, unless the Equity Purchase
Rights relating to such purchase have arisen under Section
5.1(c) and such rights were exercised after the Initial
Decision Period or the Equity Purchase Rights relating to
such purchase have arisen under Section 5.1(d), 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 5.8. 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 any of the applicable
Percentage Limitations as set forth in the Amended and Restated
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 any of the
applicable Percentage Limitations 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 any of such
applicable Percentage Limitations specified in clauses (a) and
(b) of this Section 5.7 suspend the right of such Class A Holders
to purchase additional shares of any class or series of capital
stock of the Company pursuant to this Agreement or otherwise
unless and until such purchase (including any purchase pursuant
to Section 7.3 or 7.17 hereof) would not result in the aggregate
Beneficial Ownership of the affected Class A Holders exceeding
any of such Percentage Limitations applicable to such Class A
Holders.
Section 5.8. Record Date Blackout Purchases.
(a) During a Record Date Blackout Period, if a Class A
Holder held a Percentage Ownership Interest equal to at
least 10% on the record date for a stockholders' meeting or
dividend payment which immediately preceded the Record Date
Blackout Period, such Class A Holders shall be entitled on
a pro rata basis with the other Class A Holders in
accordance with their respective Committed Percentages to
purchase from the Company shares of capital stock of the
Company in an aggregate amount for all Class A Holders
equal to the Available Record Date Blackout Shares for such
Record Date
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Blackout Period. The class of shares to be purchased (i.e.,
Series 3 FON Stock or Series 3 PCS Stock) shall be
determined as set in Section 5.8(b) below, and the price to
be paid for such shares shall be (i) with respect to Series
3 FON Stock, the Market Price of the Series 1 FON Stock as
of the date of purchase of the Series 3 FON Stock, and (ii)
with respect to Series 3 PCS Stock, the Market Price of the
Series 1 PCS Stock as of the date of purchase of the Series
3 PCS Stock. Each Class A Holder shall be entitled to
exercise the rights under this Section 5.8(b) by written
notice to the Company delivered prior to the second
Business Day before the record date relating to such Record
Date Blackout Period.
(b) The class of shares (i.e., Series 3 FON Stock or
Series 3 PCS Stock) to be issued to a Class A Holder under
Section 5.8(a) with respect to any Record Date Blackout
Period shall be determined as follows:
(i) if the ratio of the Class A FON Shares
owned
by such Class A Holder to the Class A PCS Shares owned
by such Class A Holder exceeds the then applicable
ratio of the Votes attributable to all outstanding
Sprint FON Stock to the Votes attributable to all
outstanding Sprint PCS Stock, the Company shall issue
Class A PCS Shares pursuant to Section 5.8(a) until
such time as the ratios are equal, at which time the
Company shall issue Class A FON Shares and Class A PCS
Shares in the same proportions as the then applicable
ratio of the Votes attributable to all outstanding
Sprint FON Stock to the Votes attributable to all
outstanding Sprint PCS Stock;
(ii) if the ratio of the Class A PCS Shares
owned
by such Class A Holder to the Class A FON Shares owned
by such Class A Holder exceeds the then applicable
ratio of the Votes attributable to all outstanding
Sprint PCS Stock to the Votes attributable to all
outstanding Sprint FON Stock, the Company shall issue
Class A FON Shares pursuant to Section 5.8(a) until
such time as the ratios are equal, at which time the
Company shall issue Class A FON Shares and Class A PCS
Shares in the same proportions as the then applicable
ratio of the Votes attributable to all outstanding
Sprint FON Stock to the Votes attributable to all
outstanding Sprint PCS Stock; and
(iii) if the ratio of the Class A PCS Shares
owned
by such Class A Holder to the Class A FON Shares owned
by such Class A Holder equals the then applicable
ratio of the Votes attributable to all outstanding
Sprint PCS Stock to the Votes attributable to all
outstanding Sprint FON Stock, the Company shall issue
Class A FON Shares and Class A PCS Shares in the same
proportions as the then applicable ratio of the Votes
attributable to all outstanding Sprint FON Stock to
the Votes attributable to all outstanding Sprint PCS
Stock.
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(c) Shares purchased from the Company pursuant to this
Section 5.8 shall be purchased and paid for in accordance with
Sections 5.4 and 5.5 (but not Section 5.6) of this Agreement,
mutatis mutandis, except that the closing of such purchase shall
occur on the Business Day immediately preceding the record date
relating to such Record Date Blackout Period and at the closing
the Class A Holders shall pay the purchase price for the Shares
so purchased in cash in immediately available funds.
ARTICLE VI
HOLDINGS BY MAJOR COMPETITORS
-----------------------------
Until January 31, 2006, 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 30 days
following the consummation of such Strategic Merger 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, subject to Applicable
Law and the receipt of any required material Governmental
Approvals, a number of shares of Class A Stock (which shall
consist of Series 3 FON Stock and Series 3 PCS Stock in the same
proportions as the Class A FON Shares and the Class A PCS Shares
are owned by the Class A Holders at the time of the event giving
rise to the Class A Holders' right to so commit) 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
the applicable Weighted Average Price paid by such Major
Competitor, unless the Major Competitor has only purchased Sprint
FON Stock or Sprint PCS Stock (but not both), in which event the
Shares relating to the class not so purchased by the Major
Competitor shall be purchased at the Market Price on the date of
the event giving rise to the Class A Holders' right to so commit;
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.
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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 capital stock and its issued
shares of capital stock held in its treasury, the full number of
shares of
(a) Series 1 FON Stock then deliverable upon the
conversion of all outstanding Class A FON Shares,
(b) Series 1 PCS Stock then deliverable upon the
conversion of all outstanding Class A PCS Shares,
(c) Series 3 FON Stock then deliverable upon
conversion of all of the shares of Sprint FON Common Stock,
and
(d) Series 3 PCS Stock then deliverable upon
conversion of all of the shares of Sprint PCS Common Stock,
in the case of each of clauses (a), (b), (c), (d), (e) and (f)
that the Class A Holders are permitted to acquire hereunder and
under the FT/DT Restructuring Agreement, the Articles and the
Amended and Restated Standstill Agreement.
Section 7.2. Assignee Purchasers. As a condition to the
assignment of rights to purchase shares of Class A Stock to a
Qualified Stock Purchaser pursuant to Article VI hereof or
pursuant to the Amended and Restated 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 with Respect to
Option Shares; Method of Purchase.
(a) 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 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
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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 Common Stock, Series 3 FON Stock or Series 3 PCS
Stock, as the case may be, 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 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
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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 Stock
as provided in Section 8.5 of ARTICLE SIXTH of the
Articles, 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
Section 2.2 of ARTICLE SIXTH 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
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shares of Class A Stock represent Votes constituting
greater than 20% of the aggregate Voting Power of the
Company, in each case 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.
(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 2.2(f) of ARTICLE SIXTH of the
Articles 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 April 26, 1999, 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 Stock in accordance with Section 2.2 of
ARTICLE SIXTH of the Articles and following a determination
by the Board of Directors that such redemption is necessary
or advisable to comply with the requirements of Section
310, to deliver a notice (a "Required Sale Notice") to the
Class A Holders requiring them to sell (a "Surplus Shares
Sale") that number of shares of Class A Stock (the "Surplus
Shares") necessary so that, immediately following such
Surplus Shares Sale, the aggregate Percentage Ownership
Interest of the Class A Holders shall be 20% or such
greater percentage specified in such notice as being
necessary or advisable for the Class A Holders to attain in
order to comply with the requirements of Section 310.
(ii) Upon receipt of the Required Sale Notice, the
Class A Holders shall sell the Surplus Shares in third
party or open market sales. The Surplus Shares Sale shall
be conducted as promptly as practicable following receipt
of the Required Sale Notice, but in no event later than 120
days following the date of receipt thereof, as extended day
for day for each day that such sales are actually delayed
during such time period because (i) the Surplus Shares
cannot be sold due to the anti-fraud rules of the U.S.
securities laws,
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or (ii) the Company has delayed a proposed registration of
the Surplus Shares in accordance with Section 1.4 of the
Amended and Restated 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 the overall Voting Power of the Company of one
of FT or DT (and its Qualified Subsidiaries) to the
aggregate Percentage Ownership Interest of the overall
Voting Power of the Company of the other of FT or DT (and
its Qualified Subsidiaries) shall not be greater than 3 to
2 (the "Applicable Overall Ratio").
(b) The ratio of the aggregate Percentage Ownership
Interest of the Voting Power represented by the Class A FON
Shares of one of FT or DT (and its Qualified Subsidiaries)
to the aggregate Percentage Ownership Interest of the
Voting Power represented by the Class A FON Shares of the
other of FT or DT (and its Qualified Subsidiaries) shall
not be greater than 4 to 1 (the "Applicable FON Ratio"). In
addition, the ratio of the aggregate Percentage Ownership
Interest of the Voting Power represented by the Class A PCS
Shares of one of FT or DT (and its Qualified Subsidiaries)
to the aggregate Percentage Ownership Interest of the
Voting Power represented by the Class A PCS Shares of the
other of FT or DT (and its Qualified Subsidiaries) shall
not be greater than 4 to 1 (the "Applicable PCS Ratio")
(c) 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
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contractor requires the Company to restrict access to any
properties or information reasonably related to such contract on
the basis of Applicable Law with respect to United States
national security matters and to the extent that other Applicable
Law requires the Company to restrict access to any properties or
information and, in accordance with such restrictions, access to
certain properties or information may not be given to any
Director elected by the Class A Holders without appropriate
security clearance, such Director will not be given access to
such properties or information and may not participate in
deliberations of the Board of Directors or the board of directors
of any of the Company's Subsidiaries in which such information
with 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 prior to January 31, 2001, 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 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), within 180 days after such Major Issuance the
Class A Holders may deliver to the Company a written notice
in which each Class A Holder commits to the Company to
purchase from third parties, within three years after such
notice, a number of shares of Series 1 FON Stock and/or
Series 1 PCS Stock, as the case may be, 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
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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) involving a
Spin-off,
(a) the Company shall cause the entity whose equity
interests are to be distributed in such Spin-off to
(i) execute agreements with each of FT, DT and
their respective Qualified Subsidiaries at the time of
such Spin-off no less favorable to FT and DT than this
Agreement, the Amended and Restated Registration
Rights Agreement, the Amended and Restated Standstill
Agreement, and the Amended and Restated
Confidentiality Agreements (the "Principal Investment
Documents"); and
(ii) 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 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
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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 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
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 or the Joint Venture Documents, the
Company shall not hold in the Local Exchange 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.
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Section 7.17. Automatic Exercise of Rights with Respect to
CP
Conversion Shares; Method of Purchase.
(a) For so long as the Class A Holders are entitled to
purchase Shares pursuant to Section 5.1, subject to
subsections (b), (d) and (e) of this Section 7.17, each
Class A Holder hereby agrees to exercise its rights to
purchase from the Company, and shall so purchase and the
Company shall sell, shares of Series 3 PCS Stock pursuant
to Section 5.1 hereof upon, and simultaneously with, any
issuance of CP Conversion Shares which occurs during an
Applicable CP Period.
(b) For so long as the Class A Holders are entitled to
purchase Shares pursuant to Section 5.1, subject to
subsections (d) and (e) of this Section 7.17,
contemporaneously with each issuance of CP Conversion
Shares during an Applicable CP Period,
(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 CP Conversion
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 CP Conversion
Shares; and
(ii) the principal amount of the applicable FT/DT
Stock Payment Note shall be increased by the amount of
the purchase price for such Shares (as determined in
accordance with Section 5.1 hereof), which principal
amount shall be repaid in accordance with the terms of
such FT/DT Stock Payment Note.
(c) Subject to subsections (b), (d) and (e), the
provisions of this Section 7.17 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 CP Conversion 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.
(d) This Section 7.17 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,
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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 7.17 thereafter shall become
operative and of full force and effect with respect to such
Class A Holder (i) if this Section 7.17 is not at that time
of no force and effect pursuant to clause (ii) of this
Section 7.17(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.
(e) The rights and obligations of the Class A Holders
and the Company under this Section 7.17 shall terminate
upon the conversion of all outstanding shares of Class A
Stock as provided in Section 8.5 of ARTICLE SIXTH of the
Articles, provided that such termination shall not affect
any rights of the Company to payment under any FT/DT Stock
Payment Notes then outstanding.
Section 7.18. Notice of Record Dates. Unless the aggregate
Committed Percentage of the Class A Holders falls below ten
percent, (i) at least ten Trading Days prior to the date so
fixed, the Company shall give written notice to FT and DT of each
date fixed by the Board of Directors as the record date (which
shall be a Trading Day) for a meeting of the stockholders of the
Company or for the payment of dividends in respect of the Sprint
FON Stock, the Sprint PCS Stock or the Class A Common Stock, and
(ii) at least ten Trading Days before such a record date for a
meeting of the stockholders of the Company or for the payment of
dividends, the Company shall provide FT and DT with a calculation
setting forth the respective votes to which each class and series
of Sprint FON Stock, Sprint PCS Stock and Class A Common Stock
shall be entitled in connection with such meeting of stockholders
(or, with respect to a record date for the payment of dividends,
would be entitled if such record date were a record date for a
meeting of stockholders and not a record date for the payment of
dividends).
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 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;
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(ii) upon the conversion of all of the outstanding
shares of Class A Stock into shares of Non-Class A Common
Stock pursuant to Sections 8.5(b), 8.5(d) or 8.5(g) of
ARTICLE SIXTH of the Articles;
(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; or
(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.
(b) The rights of the Class A Holders under Articles
III, IV, V and VI hereof, and Sections 7.3, 7.8, 7.13, 7.15 and
7.17 hereof, shall terminate upon (i) the conversion of all of
the outstanding shares of Class A Stock into shares of Non-Class
A Common Stock, pursuant to Section 8.5(h) of ARTICLE SIXTH of
the Articles.
(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 8.2 (except Sections 8.2(a)(iii) and 8.2(c)), 8.3, 8.4,
8.5 and 8.6 of ARTICLE SIXTH of the Articles are suspended
pursuant to Section 8.5(b) of ARTICLE SIXTH of the Articles.
(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,
7.13 and 7.17 hereof shall terminate upon (i) the conversion of
the outstanding shares of Class A Stock owned by such Qualified
Stock Purchaser into Non-Class A Common Stock, pursuant to
Section 8.5(k) of ARTICLE SIXTH of the Articles, and the rights
of a Qualified Stock Purchaser under Articles IV and VI hereof
and Sections 7.4, 7.8, 7.11, 7.13 and 7.17 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 8.2 (except Sections 8.2(a)(iii) and 8.2(c)), 8.3, 8.4,
8.5 and 8.6 of ARTICLE SIXTH of the Articles are suspended
pursuant to Section 8.5(k) of ARTICLE SIXTH of the Articles.
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 2.2(f) of
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ARTICLE SIXTH of the Articles (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 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 and as a result thereof such Class A Holder incurs
taxes in connection with the transaction contemplated in such
Section 7.4(d) 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 (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 shall be net of any refund of taxes that would have
been obtained had withholding under Section 1445 of the Code (or
any successor provision) applied to such Unrelated Party Sale.
Section 9.3. Rebate of Indemnity. Within nine months after
the
end of each of the five consecutive taxable years of an
Indemnitee starting with the taxable year in which the Company
has paid any amounts pursuant to Sections 9.1 or 9.2 in respect
of such Indemnitee (a "Company Tax Payment"), such Indemnitee
shall determine whether it is in a better after-tax economic
position as a result of such Company Tax Payment than it would
have been in had such Indemnitee (a) in the case of a Company Tax
Payment pursuant to Section 9.1, sold the Shares purchased by the
Company in an Unrelated Party Sale or (b) in the case of a
Company Tax Payment pursuant to Section 9.2, sold the Shares
disposed of pursuant to Section 7.4(d) of this Agreement in an
Unrelated Party Sale at the Formula Price (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
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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. 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 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 in an Unrelated Party Sale at the
Formula Price.
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
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similar document in writing within a reasonable
period of time before the relevant Company
Purchase or Supplementary Payment takes place;
(c) the imposition of Excess Taxes or Section 9.2
Excess Taxes on a transferee or assignee of an
original Class A Holder's Shares, but only to the
extent the amount of Excess Taxes or Section 9.2
Excess Taxes required to be paid by the Company
exceeds the amount of Excess Taxes or Section 9.2
Excess Taxes that would have been required to be
paid by the Company absent any transfer of such
original Class A Holder's Shares, provided, that
this Section 9.4(c) shall not apply if the
transferee or assignee is a Qualified Subsidiary
and has held such Shares for at least six months
prior to the date such Qualified Subsidiary first
undertook those discussions or 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;
(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 or 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 or 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 or Supplementary Payment by the third
party (taking into account the actual tax effect to the
Indemnitee of such third party purchase or 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 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
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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 or 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 or Supplementary Payment for U.S.
Federal income tax purposes, such Indemnitee shall thereafter
treat such Company Purchase or 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
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
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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 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 to the
1996 Stockholders' Agreement, 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 to the 1996 Stockholders' Agreement
(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
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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 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
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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
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 or compromise, and the Company shall bear any
further cost or expense of contesting any such issue.
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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: Group Executive
Vice President
Resources
Tel: (33-1) 44-44-84-72
Fax: (33-1) 44-44-01-51
with a copy to: 6 place d'Alleray
75505 Paris Cedex 15
France
Attn: General Counsel
Tel: (33-1) 44-44-84-76
Fax: (33-1) 44-12-40-35
and with a
copy to: Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
U.S.A.
Attn: Alfred J. Ross, Jr., Esq.
Tel: (212) 848-4000
Fax: (212) 848-8434
DT: Friedrich-Ebert-Allee 140
D-53113 Bonn
Germany
Tel: 49-228-181-9000
Fax: 49-228-181-8970
Attn: Chief Executive Officer
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with a copy to: Cleary, Gottlieb, Steen & Hamilton
One Liberty Plaza
New York, New York 10006
U.S.A.
Attn: Robert P. Davis, Esq.
Tel: (212) 225-2000
Fax: (212) 225-3999
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
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<PAGE>
other Class A Holder or Holders or the Company in any manner
whatsoever, and each Class A Holder will be solely responsible
and liable for its own acts.
Section 11.4. Binding Agreement; Assignment; No Third Party
Beneficiaries. This Agreement will be binding upon and inure to
the benefit of the parties hereto and their successors 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.
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
SERVICE UPON THE PROCESS AGENT, THE PARTY EFFECTING SUCH SERVICE
SHALL ALSO
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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 TO THE EXTENT
PERMITTED BY APPLICABLE LAW. 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, to the
extent permitted by applicable Law 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.
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<PAGE>
Section 11.7. Translation. The parties hereto have
negotiated
this Agreement in the English language, and have prepared
successive drafts and the definitive texts of 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
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. Acquisitions by FT and DT of Stock from
Third
Parties. Except as provided by Section 5.7, nothing in this
Agreement shall prohibit FT or DT from acquiring shares of Sprint
PCS Common Stock or Sprint FON Common Stock from third parties
other than
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the Company; provided, however, that such purchases may be made
only if permitted by the Amended and Restated Standstill
Agreement.
Section 11.12. Effect of Conversion. (a) If all of the
shares of
Class A Stock shall have been converted into Non-Class A Common
Stock, pursuant to Section 8.5 of ARTICLE SIXTH of the Articles,
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 Sprint FON Common Stock, (ii) in
the case of Series 3 FON Stock, instead be issued as one duly
issued, fully paid and nonassessable share of Series 1 FON Stock,
and (iii) in the case of Series 3 PCS Stock, instead be issued as
one duly issued, fully paid and nonassessable share of Series 1
PCS Stock.
(b) If all of the shares of Class A Stock held by a
Qualified Stock Purchaser shall have been converted into
Non-Class A Common Stock, pursuant to Section 8.5 of ARTICLE
SIXTH of the Articles, 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 Sprint FON Common Stock, (ii) in the case
of Series 3 FON Stock, instead be issued as one duly issued,
fully paid and nonassessable shares of Series 1 FON Stock, and
(iii) in the case of Series 3 PCS Stock, instead be issued as one
duly issued, fully paid and nonassessable shares of Series 1 PCS
Stock.
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 or by the Other Investment
Documents or the Articles, (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.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.
SPRINT CORPORATION
By: _________________________
Name:
Title:
FRANCE TELECOM S.A.
By:__________________________
Name:
Title:
DEUTSCHE TELEKOM AG
By: _________________________
Name:
Title:
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<PAGE>
Schedule A
Associates of FT
All members of the FT Board of Directors, except for any such
members appointed by either the Government of France or any union
or employee group or any such members representing FT's publicly
traded shares.
Executive Officers:
Chief Executive Officer
Members of the Executive Committee:
Large Business Division
Development Division
Finance Division
Network Division
Residential and Small Business Division
Other Officers:
General Secretary
Director of Human Resources
Director of Public Affairs
Director of Corporate Communications
<PAGE>
Schedule B
Associates of DT*
The term "Associate," as used with respect to DT, shall mean any
person occupying any of the positions below:
A. Management Board Members
1. Chairman of the Management Board
2. Management Board Member, Business Customers
3. Management Board Member, International
4. Management Board Member, Networks
5. Management Board Member, Finance & Auditing
B. General Managers and Others
1. Corporate Policy, Corporate Strategy, Auditing
2. International Mergers & Acquisitions
3. Global Relationships
4. International Networks
5. International Finance/Mergers & Acquisitions
- --------
* In the event of a reorganization of DT, this listing shall
be deemed to be revised to include any successor position
that includes or otherwise incorporates duties and
responsibilities substantially similar in nature and scope
as the duties and responsibilities of the positions listed
herein.
If DT creates the position of General Counsel having
functions and responsibilities comparable to the typical
functions and responsibilities of a General Counsel of a
U.S. public company, such General Counsel position shall
become part of the foregoing list of positions of DT
Associates.
<PAGE>
EXHIBIT A TO THE
STOCKHOLDERS' AGREEMENT
[SUBORDINATED] PROMISSORY NOTE
------------------------------
New York, New York
U.S. $____________ _____________, 19__
FOR VALUE RECEIVED, [CLASS A HOLDER], a _______________
[corporation] [partnership] ("Maker"), promises to pay to SPRINT
CORPORATION, a ________________ corporation ("Sprint"), or its
registered assigns (Sprint and its registered assigns being
referred to herein as "Payee"), at
__________________________________, or at such other place as
Payee may from time to time designate in writing, the principal
sum of _____________ United States Dollars (U.S. $___________),
together with interest on the principal balance hereof at the
rate hereinafter provided, in accordance with the terms and
conditions hereof.
1. Interest. Subject to Section 4 below, commencing on the
date hereof and continuing until repayment of the sums due
hereunder in full, the principal amount due hereunder shall bear
interest at a rate equal to [interest rate to be determined in
accordance with the Stockholders' Agreement] per annum and shall
be payable quarterly in arrears on the first day of each calendar
quarter commencing on ___________, 19__, and on the maturity of
this Note (whether by acceleration or otherwise). Interest
payable on the principal balance of this Note shall be computed
on the basis of a 360-day year for the actual number of days
elapsed.
2. Maturity. Unless sooner accelerated in accordance with
the terms of this Note, the entire principal amount due
hereunder, together with all accrued but unpaid interest thereon,
shall be due and payable in full on [maturity date or dates to be
determined in accordance with Section 5.6 of the Stockholders'
Agreement].
3. Optional Prepayment. [The following provision may be
included at the option of Maker: So long as there exists no Event
of Default (as hereinafter defined) or condition that with
notice, lapse of time, or both would constitute an Event of
Default, Maker may at its option prepay the outstanding principal
balance of this Note in whole, together with all accrued but
unpaid interest thereon, by providing prior written notice of
such payment to Payee not less than thirty (30) nor more than
ninety (90) days' prior to the date fixed for such prepayment.]
<PAGE>
4. Default Rate. From and after an occurrence of an Event
of Default and during the continuance thereof, the principal
balance due hereunder shall bear interest at a rate per annum
equal to two percent (2%) per annum in excess of the rate of
interest otherwise set out herein, subject to Section 5 below.
Default interest shall be due and payable by Maker upon demand of
Payee.
5. Maximum Lawful Rate. This Note is hereby expressly
limited so that in no contingency or event whatsoever, whether by
acceleration of maturity of the indebtedness evidenced hereby or
otherwise, shall the amount paid or agreed to be paid to Payee
for the use, forbearance or detention of money exceed the highest
lawful rate permissible under applicable law. If, from any
circumstances whatsoever, fulfillment of any provision hereof, at
the time performance of such provision occurs, shall involve
payment of interest in excess of that authorized by law, the
obligation to be fulfilled shall be reduced to the limit so
authorized by law, and if, from any circumstances, Payee shall
ever receive as interest an amount which would exceed the highest
lawful rate applicable to Maker, such amount which would be
excessive interest shall be applied to the reduction of the
unpaid principal balance hereof and not to the payment of
interest.
6. Method of Making Payments; Renewal of Obligations. All
payments with respect to principal and interest hereunder shall
be made by wire transfer of immediately available funds in United
States dollars to such account as Payee shall designate in
writing to Maker. Maker hereby expressly agrees that to the
extent that Maker makes a payment or payments on this Note and
such payment or payments, or any part thereof, are subsequently
invalidated, declared to be fraudulent or preferential, set aside
or are required to be repaid to a trustee, receiver, or any other
party under any bankruptcy act, state or national law, common law
or equitable cause, then to the extent of such payment or
repayment, the indebtedness evidenced hereby which is intended to
be satisfied by such payment or payments shall be revived and
continued in full force and effect as if said payment or payments
had not been made.
7. Events of Default. The occurrence of any one or more of
the following conditions or events shall constitute an "Event of
Default":
a. Failure to Pay. Maker fails to pay any payment of
principal or interest when due and payable or declared due
and payable in accordance with the terms of this Note and
such failure shall continue for three (3) Business Days;
b. Bankruptcy. (i) Maker [or either of Maker or FT if
Maker is a Qualified Subsidiary of FT; or either of Maker
or DT if Maker is a Qualified Subsidiary of DT; or any of
Maker, FT and DT if Maker is a Qualified Subsidiary of both
FT and DT] shall commence proceedings seeking either its
own bankruptcy or to be granted a suspension of payments or
any other proceeding under any bankruptcy, reorganization,
arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law of
any jurisdiction, whether now or hereafter in effect; (ii)
any proceeding such as
<PAGE>
described in clause (i) of this subsection 7(b) is
commenced or applied to be commenced against Maker [or
either of Maker or FT if Maker is a Qualified Subsidiary of
FT; or either of Maker or DT if Maker is a Qualified
Subsidiary of DT; or any of Maker, FT and DT if Maker is a
Qualified Subsidiary of both FT and DT], which proceeding
remains undismissed for a period of sixty (60) days or is
dismissed on the ground of lack of funds sufficient to
cover the costs of such proceedings; (iii) a custodian,
trustee, administrator or similar official is appointed
under any applicable law described in clause (i) of this
subsection 7(b) with respect to Maker [or either of Maker
or FT if Maker is a Qualified Subsidiary of FT; or either
of Maker or DT if Maker is a Qualified Subsidiary of DT or
Maker; or any of Maker, FT and DT if Maker is a Qualified
Subsidiary of both FT and DT], or such custodian, trustee,
administrator or similar official takes charge of all or
any substantial part of the property of Maker [or either of
Maker or FT if Maker is a Qualified Subsidiary of FT; or
either of Maker or DT if Maker is a Qualified Subsidiary of
DT; or any of Maker, FT and DT if Maker is a Qualified
Subsidiary of both FT and DT]; (iv) an adjudication is made
that Maker [or either of Maker or FT if Maker is a
Qualified Subsidiary of FT; or either of Maker or DT if
Maker is a Qualified Subsidiary of DT; or any of Maker, FT
and DT if Maker is a Qualified subsidiary of both FT and
DT] is insolvent or bankrupt; (v) any order of relief or
other order is entered approving any case or proceeding
such as is described in clause (ii) of this subsection
7(b); (vi) Maker [or either of Maker or FT if Maker is a
Qualified Subsidiary of FT; or either of Maker or DT if
Maker is a Qualified Subsidiary of DT; or any of Maker, FT
and DT if Maker is a Qualified Subsidiary of both FT and
DT] makes a general assignment for the benefit of its
creditors; or (vii) Maker [or either of Maker or FT if
Maker is a Qualified Subsidiary of FT; or either of Maker
or DT if Maker is a Qualified Subsidiary of DT; or any of
Maker, FT and DT if Maker is a Qualified Subsidiary of both
FT and DT] takes any corporate or similar action for the
purpose of effecting any of the actions, orders or events
described in the foregoing clauses of this subsection 7(b);
or
c. Repudiation of Guaranty. [This clause to be
included only if Maker is a Qualified Subsidiary of FT
and/or DT: The Guaranty (as hereinafter defined) shall
cease to be in full force and effect or the validity or
enforceability thereof is disaffirmed or repudiated by or
on behalf of [FT or DT], or at any time it is or becomes
unlawful for [FT or DT] to perform or comply with its
obligations under the Guaranty, or the obligations of [FT
or DT] under the Guaranty are not or cease to be legal,
valid and binding on [FT or DT].]
8. Remedies. Upon the occurrence of an Event of Default, at
the option of Payee, all amounts payable by Maker to Payee under
the terms of the Note shall immediately become due and payable by
Maker to Payee and Payee shall have all the rights, powers and
remedies available under the terms of this Note, by agreement,
under
<PAGE>
applicable law or otherwise. Notwithstanding the foregoing, upon
the occurrence of an Event of Default described in Section 7(b)
above, the amounts hereunder shall become automatically due and
payable without presentment, protest or demand of any kind.
9. Certain Withholding Obligations. Payee agrees that it
will provide any applicable statements or forms required to be
furnished under an applicable [residence of Maker] income tax
treaty or the tax laws of [residence of Maker] in order to obtain
any reduction in or exemption from [residence of Maker] tax on
interest paid under this Note. Maker agrees that it will timely
file any forms (with appropriate attachments) required to be
filed with [identify the appropriate tax authority] reporting any
payment of interest under this Note. All payments of interest
under this Note will be subject to the withholding of any
applicable [identify country of which Maker is resident] income
tax.
10. Representations and Warranties of Maker. Maker
represents and warrants to Payee that:
a. Existence of Maker as a [Corporation]
[Partnership]. [This representation will be adjusted
depending on the form of the entity that issues the Note.]
[Maker is a corporation validly existing and in good
standing under the laws of its jurisdiction of
incorporation and has full corporate power and authority to
execute and deliver this Note and to perform its
obligations hereunder.] [Maker is duly formed and in good
standing under the laws of its jurisdiction of formation
and has full partnership power and authority to execute and
deliver this Note and to perform its obligations
hereunder.]
[This paragraph to be used if FT is the Maker of the Note:
FT is an exploitant public validly existing under the laws
of the Republic of France, and has all requisite power and
authority to enter into this Note.]
[This paragraph to be used if DT is the Maker of the Note:
DT is an Aktiengesellschaft duly formed and validly
existing under the laws of the Republic of Germany, and has
all requisite corporate power and authority to enter into
this Note.]
b. No Conflicts. The execution and delivery of this
Note by Maker and the performance by Maker of its
obligations hereunder do not and will not (with or without
the giving of notice or the passage of time or both) (i)
conflict with or result in a breach or violation of the
certificate of incorporation, bylaws or other
organizational documents of Maker, (ii) conflict with or
result in a violation or breach of, or constitute a default
under, any statute, rule or regulation or any order,
judgment or decree of any court or governmental agency or
body having jurisdiction over Maker or any of its
properties or assets where such
<PAGE>
violation, breach or default would reasonably be expected
to result in a material adverse effect on the Maker, or
(iii) conflict with or result in a violation or breach of,
constitute a default under, result in or give to any person
any right of termination, cancellation or acceleration or
modification in or with respect to, any indenture,
mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which Maker is a party or by
which its assets are bound where such violation, breach,
default or right of termination, cancellation, acceleration
or modification would reasonably be expected to result in a
material adverse effect on the Maker.
c. No Consents. No consent, approval or action of,
filing with or notice to, any court or governmental agency
or body is required in connection with the execution,
delivery and performance by Maker of this Note or the
performance of its obligations hereunder.
d. Authority; Binding Effect. This Note has been duly
authorized, executed and delivered by Maker and constitutes
the valid and binding agreement of Maker enforceable
against Maker in accordance with its terms.
11. Costs of Collection. Maker agrees to pay all costs and
expenses of collection, including reasonable attorneys' fees and
expenses (but not including the portion of any fees determined
pursuant to the Bundesegebuhrenordnung fur Rechtsanwalte vom 26.
Juli 1957 (BGB1) I S. 907 (as it or any successor provision is
from time to time in effect), arising in connection with any
enforcement action by Payee in which it shall prevail, of any of
its rights under this Note whether by or through an
attorney-at-law or in an action in bankruptcy, insolvency or
other judicial proceedings.
12. Waivers; Amendment. No delay or failure on the part of
Payee to exercise any right or remedy accruing to Payee
hereunder, upon any default or breach by Maker of any term or
provision hereof, shall be held to be an abandonment thereof. No
delay on the part of Payee in exercising any of its rights or
remedies shall preclude Payee from the exercise thereof at any
time during the continuance of any default or breach. No waiver
of a single default or breach shall be deemed a waiver of any
subsequent default or breach. Payee may enforce any one or more
remedies hereunder successively or concurrently, at its option.
All waivers under this Note must be in writing signed by the
Party entitled to enforce the right waived. All amendments to
this Note must be in writing and signed by both the Maker and the
Payee.
Maker, its successors and assigns, and all other persons
liable for the payment of this Note, waive presentment for
payment, demand, protest, and notice of demand, dishonor, protest
and nonpayment, and consent to any and all renewals, extensions
or modifications that might be made by Payee as to the time of
payment of this Note from time to time.
<PAGE>
13. Subordination. [Maker shall elect (i) to not include
any subordination provisions, (ii) to include the terms and
provisions relating to subordination contained in the indenture
governing the subordinated debt securities of Maker which have
most recently prior to the date of this Note been sold in a
public offering or (iii) to include the following provision: The
indebtedness evidenced by this Note is subordinate and junior in
right of payment to all Senior Indebtedness (an defined below) to
the extent and in accordance with the terms and provisions set
forth in Exhibit A attached hereto and incorporated herein by
this reference. For purposes of this Section 13, the term "Senior
Indebtedness" shall mean all indebtedness of Maker, including the
principal of and premium, if any, and interest (including
interest accrued before and after the filing of any petition
seeking reorganization, arrangement, adjustment, or composition
of or in respect of Maker) on such indebtedness whether
outstanding on the date of this Note or thereafter created, (i)
for borrowed money, including all fees, expenses, reimbursements,
indemnities and other amounts payable under any credit document
or note evidencing money borrowed from banks, (ii) for money
borrowed by others and guaranteed, directly or indirectly, by
Maker, (iii) constituting purchase money indebtedness for the
payment of which Maker is directly or contingently liable, (iv)
constituting reimbursement obligations under bank letters of
credit, (v) under interest rate and currency swaps, caps, floors,
collars or similar agreements or arrangements intended to protect
Maker against fluctuations in interest or currency rates, or (vi)
under any lease of any real or personal property, whether
outstanding on the date of execution of this Note or thereafter
created, incurred or assumed, which obligations are capitalized
on the books of Maker in accordance with generally accepted
accounting principles, unless, in any such case, by the terms of
the instrument creating or evidencing such indebtedness it is
provided that such indebtedness is not superior in right of
payment to this Note or to other indebtedness which is pari passu
with, or subordinated to, this Note, and any amendments,
supplements, refinancings, modifications, refundings, deferrals,
renewals or extensions of any such Senior Indebtedness, or
securities, notes or other evidences of indebtedness issued in
exchange for such Senior Indebtedness. As used in the preceding
sentence the term "purchase money indebtedness" shall mean
indebtedness evidenced by a note, debenture, bond or other
similar instrument (whether or not secured by any lien or other
security interest) given in connection with the acquisition of
any business, properties or assets of any kind acquired by Maker;
provided, however, that, without limiting the generality of the
foregoing, the term "purchase money indebtedness" shall not
include any conditional sale contract or any account payable or
any other indebtedness created or assumed by Maker in the
ordinary course of business in connection with the obtaining of
inventories or services (such proviso not being intended to
exclude from "Senior Indebtedness" any indebtedness for borrowed
money incurred by Maker under working capital lines of credit).]
14. Guaranty. [This Section to be included only if Maker is
a Qualified Subsidiary of FT and/or DT: The performance by [Class
A Holder] of all
<PAGE>
of its obligations hereunder shall be unconditionally guaranteed
by [its parent, either FT or DT, or, as the case may be, both of
FT and DT if Maker is a Qualified Subsidiary by virtue of the
combined ownership in Maker of FT and DT] pursuant to a guaranty
in form and substance reasonably satisfactory to Sprint (as
hereafter amended, modified or supplemented, the "Guaranty").]
15. Securities Laws. THIS NOTE HAS NOT BEEN REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), THE SECURITIES LAWS OF ANY U.S. STATE OR OTHER APPLICABLE
SECURITIES LAWS IN RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION
REQUIREMENTS OF THE ACT AND SUCH LAWS. THIS NOTE IS BEING
ACQUIRED BY THE PAYEE HEREOF FOR INVESTMENT ONLY AND FOR SAID
PAYEE'S OWN ACCOUNT, AND NEITHER THIS NOTE NOR INTEREST HEREIN
MAY BE OFFERED FOR SALE, PLEDGED, HYPOTHECATED, SOLD, ASSIGNED OR
TRANSFERRED AT TIME EXCEPT IN COMPLIANCE WITH THE ACT, ANY
APPLICABLE U.S. STATE SECURITIES LAWS, ANY OTHER APPLICABLE
SECURITIES LAWS AND ANY OTHER LAWS WHICH ARE APPLICABLE TO SUCH
TRANSACTION AND IN COMPLIANCE WITH THE TERMS AND CONDITIONS OF
THIS NOTE. NEITHER THIS NOTE NOR ANY INTEREST HEREIN WILL BE
TRANSFERRED OF RECORD EXCEPT IN COMPLIANCE WITH THE ACT, SUCH
LAWS AND THE TERMS OF THIS NOTE; AND NO PERSON SHALL BE
RECOGNIZED AS HAVING ANY RIGHT HEREUNDER UNLESS SUCH PERSON HAS
BECOME THE REGISTERED HOLDER HEREOF.
16. 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 Note, 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 Note 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 hereto to the extent possible.
17. Notices. All notices and other communications required
or permitted under this Note should 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 (7) days after it has been sent by
registered or certified mail, return receipt requested,
addressed: (a) if to the Payee, at such address as such Payee
shall have furnished to the Maker in writing, or until any such
Payee so furnishes to the Maker an address, then to and at the
address of the last Payee of the Note who has furnished an
address to the Maker; or (b) if to the Maker [specify Maker's
address], or at such other address, or to the attention of such
other officer, as the Maker shall furnish to each Payee in
writing.
<PAGE>
18. Captions. The captions herein set forth are for
convenience only and should not be deemed to define, limit or
describe the scope or intent of this Note.
19. Successors; Assignment. The terms and provisions of
this Note shall be binding upon and inure to the benefit of the
successors [if FT is the Maker, include the following text:
(including, without limitation, any successor of FT in a
privatization)] and assigns of the Maker and the successors and
registered assigns of the Payee. [If FT is the Maker, include the
following sentence: 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 Note.] This Note may only be
transferred or assigned by the Payee in accordance with the terms
of this Section 19 and may not be transferred or assigned to any
Person who is a Major Competitor of France Telecom ("FT") or
Deutsche Telekom AG ("DT") or of the Joint Venture (as defined
below). The Maker will keep at its principal office a register in
which the Maker will provide for the registration of this Note
and for the registration of transfers of this Note. The Maker may
treat the person in whose name any Note is registered on such
register as owner thereof for the purpose of receiving payment of
the principal and of interest on this Note and for all other
purposes, and the Maker shall not be affected by any notice to
the contrary. All references in this Note to the Payee shall mean
the Person in whose name this Note is at the time registered on
such register. Upon surrender of this Note for registration or
transfer, or for exchange, to the Maker at the address set forth
above, the Maker will execute and deliver in exchange therefor, a
new Note or Notes in denominations of at least U.S. $ 50 million
(except one Note may be issued in a lesser principal amount if
the unpaid principal amount of the surrendered Note is not evenly
divisible by, or is less than, U.S. $ 50 million) as requested by
the Payee or transferee, which aggregate the unpaid principal
amount of such surrendered Note. Each such new Note shall be
dated so there will be no loss of interest on such surrendered
Note and shall otherwise be of like tenor and shall be registered
in the name or names of such person as such Payee or transferee
may request. In addition to the surrender of the Note being
transferred or assigned to Maker, in connection with a request
for the transfer or assignment of this Note or the exchange
hereof for one or more additional Notes, Maker must also receive
a written instrument of transfer in form satisfactory to Maker
and duly executed by the registered Payee of this Note and the
Payee must also have furnished to the Maker such assurances as
Maker may reasonably request that the transfer is in compliance
with the Act, all applicable state securities laws, any other
applicable securities law and any other laws which are applicable
to such transfer. Any purported transfer in violation of the
foregoing provision shall be null and void and of no force and
effect whatsoever. For purposes of this Section 19, the term
"Major Competitor" shall mean (a) with respect to FT or DT, an
entity that materially competes with a major portion of the
telecommunications services business of FT or DT in Europe, or an
entity 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 Payee reasonable evidence of the occurrence of
such steps; and (b) with respect to the
<PAGE>
Joint Venture, an entity that materially competes with a major
portion of the telecommunications services business of the Joint
Venture, or an entity 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, provided that the party so concluding
furnishes in writing to the Payee reasonable evidence of the
occurrence of such steps. For purposes of this Section 19, the
term "Joint Venture" shall mean the venture formed pursuant to
the Joint Venture Agreement dated as of June 22, 1995, as
amended, among Sprint Corporation, Sprint Global Venture Inc., FT
and DT.
20. Governing Law; Submission to Jurisdiction.
a. THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER 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. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
NOTE MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK
OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN
DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF
THIS NOTE, MAKER HEREBY ACCEPTS FOR ITSELF AND IN RESPECT
OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE
JURISDICTION OF THE AFORESAID COURTS. MAKER, AND THE PAYEE
BY THE ACCEPTANCE OF THIS NOTE, EACH IRREVOCABLY WAIVES
TRIAL BY JURY, AND MAKER HEREBY IRREVOCABLY WAIVES ANY
OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO
THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH
RESPECTIVE JURISDICTIONS.
c. MAKER HEREBY IRREVOCABLY DESIGNATES CT CORPORATION
SYSTEM AS ITS DESIGNEE, APPOINTEE AND LOCAL AGENT TO
RECEIVE, FOR AND ON BEHALF OF MAKER, SERVICE OF PROCESS IN
SUCH RESPECTIVE JURISDICTIONS IN ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS NOTE OR ANY DOCUMENT
RELATED THERETO. IT IS UNDERSTOOD THAT A COPY OF SUCH
PROCESS SERVED ON SUCH LOCAL AGENT WILL BE PROMPTLY
FORWARDED BY MAIL TO MAKER, BUT THE FAILURE OF MAKER TO
RECEIVE SUCH COPY SHALL NOT AFFECT IN ANY WAY THE SERVICE
OF SUCH PROCESS. MAKER FURTHER IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN
ANY SUCH ACTION OR PROCEEDING
<PAGE>
BY MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED
MAIL, POSTAGE PREPAID, TO MAKER, SUCH SERVICE TO BECOME
EFFECTIVE THIRTY (30) DAYS AFTER SUCH MAILING.
d. NOTHING HEREIN SHALL AFFECT THE RIGHT OF PAYEE TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST
MAKER IN ANY OTHER JURISDICTION.
21. Computation of Time. Whenever the last day for the
exercise of any privilege or the discharge of any duty under this
Note shall fall on a day other than a Business Day, (as defined
below), the party having such privilege or duty shall have until
5:00 p.m. (New York time) on the next succeeding Business Day to
exercise such privilege or to discharge such duty. For purposes
of this Note, the term "Business Day" shall mean any day other
than a day which is a Saturday or Sunday or other day on which
commercial banks in the City of New York, Paris, France or
Frankfurt am Main, Germany are authorized or required to remain
closed.
22. Language. [Include the following Section if (i) loi n
94-665 du 4 aout 1994 relative a l'emploi de 1a langue francaise
or another similar law is in effect in the Republic of France and
(ii) the Maker is FT or a Qualified Subsidiary of FT: The parties
have negotiated this Note in the English language, and have
prepared successive drafts and the definitive texts of this Note
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 Note, 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 hereto deem the French and English versions of this Note
to be equally authoritative.] [Otherwise, include the following:
This Note has been concluded in the English language and the
original English version will govern in the event of any
inconsistency between such version and any translation thereof.]
23. Waiver of Immunity. [This Section to be included only
if FT, DT or a Qualified Subsidiary of FT or DT is the Maker, or
if a Qualified Stock Purchaser that is a governmental agency or
instrumentality is the Maker: Maker 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 Note 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
<PAGE>
with respect to this Note or the subject matter hereof (including
any obligation for the payment of money). Maker 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. ss. 1602 et seq. The
foregoing waiver shall constitute a present waiver of immunity at
any time any action is initiated against Maker, FT and DT or any
of their Affiliates with respect to this Note.]
24. Judgment Currency.
a. Maker's obligations hereunder to make payments in
U.S. Dollars shall not be discharged or satisfied by any
tender or recovery pursuant to any judgment expressed in or
converted into any currency other than U.S. Dollars, except
to the extent that such tender or recovery actually results
in the effective receipt by the Payee of the full amount of
the U.S. Dollars expressed to be payable to the Payee
hereunder. If for the purpose of obtaining or enforcing
judgment against Maker in any court or in any jurisdiction,
it becomes necessary to convert into or from any currency
other than U.S. Dollars (such other currency being
hereinafter referred to as the "Judgment Currency") an
amount due in U.S. Dollars, the conversion shall be made,
and the currency equivalent determined, in each case, as on
the day immediately preceding the day on which the judgment
is given (such being hereafter referred to as the "Judgment
Currency Conversion Date").
b. If there is a change in the rate of exchange
prevailing between the Judgment Currency Conversion Date
and the date of actual payment of the amount due, Maker
covenants and agrees to pay, or cause to be paid, such
additional amounts, if any (but in any event not a lesser
amount), as may be necessary to ensure that the amount paid
in the Judgment Currency, when converted at the rate of
exchange quoted by a reputable independent financial
institution chosen by the Payee at its prevailing rate for
such currency exchange on the date of payment, will produce
the amount of U.S. Dollars which could have been purchased
with the amount of Judgment Currency stipulated in the
judgment or judicial award at the rate of exchange
prevailing on the Judgment Currency Conversion Date.
c. For purposes of determining the currency equivalent
for this Section, such amounts shall include any premium
and costs payable in connection with the purchase of U.S.
Dollars.
<PAGE>
IN WITNESS WHEREOF, Maker has caused this Note to be
executed by its duly authorized officers under its corporate seal
as of the date first above written.
[CLASS A HOLDER]
By:_________________________
Name:____________________
Title:___________________
[CORPORATE SEAL]
ATTEST:
___________________________
Name:______________________
Title:_____________________
<PAGE>
EXHIBIT A
FORM OF SUBORDINATION PROVISIONS
Subordination. (a) The indebtedness ("Subordinated
Indebtedness") evidenced by this Note is subordinate and junior
in right of payment to all Senior Indebtedness to the extent and
in the manner provided herein.
(b) Senior Indebtedness. The Senior Indebtedness shall
continue to be Senior Indebtedness and entitled to the benefits
of these subordination provisions irrespective of any amendment,
modification or waiver of any term of the Senior Indebtedness or
extension or renewal of the Senior Indebtedness.
(c) Subordination Upon Event of Default on Senior
Indebtedness. Upon the happening of an event of default with
respect to any Senior Indebtedness, as defined in the instrument
under which the same is outstanding, which occurs at the maturity
thereof or which automatically accelerates or permits the holders
thereof to accelerate the maturity thereof, then, unless and
until such event of default shall have been remedied or waived or
shall have ceased to exist, no direct or indirect payment (in
cash, property or securities or by setoff or otherwise) shall be
made or agreed to be made on account of the principal of, or
premium, if any, or interest on any Subordinated Indebtedness, or
as a sinking fund for the Subordinated Indebtedness, or in
respect of any redemption, retirement, purchase or other
acquisition of any of the Subordinated Indebtedness.
(d) Subordination in the Event of Insolvency. etc.
(i) In the event of:
(A) any insolvency, bankruptcy,
receivership, liquidation, reorganization,
readjustment, composition or other similar proceeding
relating to Maker, its creditors as such or its
property;
(B) any proceeding for the liquidation,
dissolution or other winding-up of Maker, voluntary or
involuntary, whether or not involving insolvency or
bankruptcy proceedings;
(C) any assignment by Maker for the benefit
of creditors; or
(D) any other marshalling of the assets of
Maker,
all Senior Indebtedness (including any interest thereon
accruing at the legal rate after the commencement of any
such proceedings and any additional interest that would
have accrued thereon but for the commencement of such
proceedings) shall first be paid in full before any payment
or distribution, whether in cash, securities or other
property, shall be
<PAGE>
made to any holder of any Subordinated Indebtedness on
account of any Subordinated Indebtedness. Any payment or
distribution, whether in cash, securities or other
property, which would otherwise (but for these
subordination provisions) be payable or deliverable in
respect of this Subordinated Indebtedness shall be paid or
delivered directly to the holders of Senior Indebtedness
(or to a banking institution selected by the court or
designated by the holders of Senior Indebtedness) in
accordance with the priorities then existing among such
holders until all Senior Indebtedness (including any
interest thereon accruing at the legal rate after the
commencement of any such proceedings and any additional
interest that would have accrued thereon but for the
commencement of such proceedings) shall have been paid in
full.
(ii) If the holder of any Subordinated
Indebtedness does not file a proper claim, proof of debt,
amendment of proof of debt, petition or other document as
shall be necessary in order to have such Subordinated
Indebtedness allowed in any proceeding referred to in
clause (i) of this subdivision (d) and in the form required
in any such proceeding prior to 30 days before the
expiration of the time to file such claim, proof of debt,
amendment of proof of debt, petition or other document,
then each holder of Senior Indebtedness is hereby
irrevocably granted the right (but not the obligation) to
file, and is hereby authorized to file, an appropriate
claim, proof of debt, amendment of proof of debt, petition
or other document for and on behalf of such Subordinated
Indebtedness.
(e) Subordination Upon Event of Default on
Subordinated Indebtedness. In the event that any Subordinated
Indebtedness shall be declared due and payable as the result of
the occurrence of any one or more defaults in respect thereof,
under circumstances when the terms of subdivision (d) are not
applicable, no payment shall be made in respect of any
Subordinated Indebtedness unless and until all Senior
Indebtedness shall have been paid in full; provided that payments
of Subordinated Indebtedness otherwise permitted hereunder may
resume if such declaration and its consequences shall have been
rescinded and all such defaults shall have been remedied or
waived or shall have ceased to exist unless such payments are
otherwise prohibited hereunder.
(f) Turnover of Improper Payments. If any payment or
distribution of any character or any security, whether in cash,
securities or other property, shall be received by any holder of
Subordinated Indebtedness in contravention of any of the terms
hereof and before all Senior Indebtedness shall have been paid in
full, such payment or distribution or security shall be received
in trust for the benefit of, and shall be paid over or delivered
and transferred to, the holders of the Senior Indebtedness at the
time outstanding in accordance with the proprieties then existing
among such holders for application to the payment of all Senior
Indebtedness remaining unpaid, to the extent necessary to pay all
such Senior Indebtedness in full. In the event of failure of any
holder of any Subordinated Indebtedness to endorse or assign any
such payment, distribution or security, each holder of Senior
Indebtedness is hereby irrevocably authorized to endorse or
assign the same.
(g) No Prejudice or Impairment. No present or future
holder of any Senior Indebtedness shall be prejudiced in the
right to enforce subordination of Subordinated
14
<PAGE>
Indebtedness by any act or failure to act on the part of Maker.
Nothing contained herein shall impair, as between Maker and the
holder of this Subordinated Indebtedness, the obligation of Maker
to pay to the holder hereof the principal hereof and interest
hereon as and when the same shall become due and payable in
accordance with the terms hereof, or prevent the holder of any
Subordinated Indebtedness from exercising all rights, powers and
remedies otherwise permitted by applicable law or hereunder upon
a default or Event of Default hereunder, all subject to the
rights of the holders of the Senior Indebtedness to receive cash,
securities or other property otherwise payable or deliverable to
the holders of Subordinated Indebtedness.
(h) Subrogation. Upon the payment in full of all
Senior Indebtedness and the due performance of all obligations of
Maker under the Senior Indebtedness, the holders of the
Subordinated Indebtedness shall be subrogated to all rights of
any holders of Senior Indebtedness to receive any further
payments or distributions applicable to the Senior Indebtedness
until the Subordinated Indebtedness shall have been paid in full,
and, for the purposes of such subrogation, no payment or
distribution received by the holders of Senior Indebtedness of
cash, securities or other property to which the holders of the
Subordinated Indebtedness would have been entitled except for
these subordination provisions shall, as between Maker and its
creditors other than the holders of Senior Indebtedness, on the
one hand, and the holders of Subordinated Indebtedness, on the
other, be deemed to be a payment or distribution by Maker to or
on account of Senior Indebtedness, and Maker hereby assigns,
without recourse, representation or warranty of any kind, to
Payee all and any claims which may be existing now or hereafter
against all holders of Senior Indebtedness in such event,
including but not limited to claims for reimbursement of such
payments or distributions received by such holders.
15
<PAGE>
EXHIBIT B
QUALIFIED SUBSIDIARY ASSUMPTION AGREEMENT*
Reference is hereby made to the Amended and Restated
Stockholders' Agreement, dated as of _____________, 1998 (the
"Stockholders' Agreement"), among Sprint Corporation, a Kansas
corporation (the "Company"); France Telecom, S.A., a societe
anonyme organized under the laws of France ("FT"); and Deutsche
Telekom AG, an Aktiengesellschaft organized under the laws of
Germany ("DT").
1. The undersigned is acquiring Shares (such term and
any other capitalized term defined in the Stockholders' Agreement
and used herein shall have the meanings specified in the
Stockholders' Agreement) from a Class A Holder on the date
hereof. Pursuant to the Stockholders' Agreement, for good and
valuable consideration and as a condition to the effectiveness of
such acquisition of Shares by the undersigned, the undersigned
hereby expressly confirms and agrees for the benefit of the
Company and each Class A Holder:
(a) to be bound by the terms and conditions of the
Stockholders' Agreement and to perform, observe
and assume each and every one of the covenants,
rights, promises, agreements, terms, conditions,
obligations and duties of a Class A Holder under
the Stockholders' Agreement upon the consummation
of its purchase of Shares;
(b) to be bound by the terms and conditions of the
Registration Rights Agreement and to perform,
observe and assume each and every one of the
covenants, rights, promises, agreements, terms,
conditions, obligations and duties of a holder of
Eligible Securities (as defined in the
Registration Rights Agreement) under the
Registration Rights Agreement;
(c) to execute and deliver concurrently herewith a
Qualified Subsidiary Standstill Agreement and a
Qualified Subsidiary Confidentiality Agreement;
(d) to cause all of the holders of its equity
interests (other than FT, DT and Passive Financial
Institutions) to execute and deliver concurrently
herewith a Strategic Investor Standstill
Agreement; and
(e) to cause all of the holders of its equity
interests (other than FT and DT) to execute and
deliver concurrently herewith a Strategic Investor
Confidentiality Agreement.
- --------
* [If the undersigned is a Qualified Subsidiary of FT, is an
agency or instrumentality of the Government of France or is
otherwise Controlled by the Government of France, this
Assumption Agreement shall be executed concurrently in both
English and French.]
<PAGE>
2. From and after the date hereof, (a) all references
to a "Class A Holder" or the "Class A Holders" in the
Stockholders' Agreement shall be deemed to be references to the
undersigned (along with the other Class A Holders), and (b) all
references to a "holder of Eligible Securities" or "holders of
Eligible Securities" in the Registration Rights Agreement shall
be deemed to be references to the undersigned (along with the
other holders of Eligible Securities).
3. Nothing in this Assumption Agreement shall relieve
any Class A Holder of any of its obligations under the
Stockholders' Agreement or any of the Other Investment Documents,
and the Class A Holder effecting the Transfer of Shares to the
undersigned shall remain liable for the performance by the
undersigned as a party.
4. The undersigned represents and warrants to the
Company that it is a Qualified Subsidiary within the meaning of
Article I of the Stockholders' Agreement.
5. The undersigned 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, the Stockholders' Agreement or the
Registration Rights Agreement from the jurisdiction of any
competent court described in Section 11.5 of the Stockholders'
Agreement or Section 3.6 of the Registration Rights Agreement,
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, the Stockholders'
Agreement or the Registration Rights Agreement or the subject
matter hereof or thereof (including any obligation for the
payment of money). The undersigned 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 the undersigned with respect to
this Agreement, the Stockholders' Agreement or the Registration
Rights Agreement.
IN WITNESS WHEREOF, the undersigned has duly executed
this Assumption Agreement as of this _____ day of ____________,
19__.
[NAME]
By__________________________
Name:
Title:
<PAGE>
EXHIBIT C
QUALIFIED STOCK PURCHASER
ASSUMPTION AGREEMENT
-------------------------
Reference is hereby made to the Amended and Restated
Stockholders' Agreement, dated as of ___________, 1998 (the
"Stockholders' Agreement"), among Sprint Corporation, a Kansas
corporation (the "Company"); France Telecom S.A., a societe
anonyme organized under the laws of France ("FT"); and Deutsche
Telekom AG, an Aktiengesellschaft organized under the laws of
Germany ("DT").
1. A Class A Holder (such term and any other
capitalized term defined in the Stockholders' Agreement and used
herein shall have the meanings specified in the Stockholders'
Agreement) has assigned to the undersigned on the date hereof the
right to acquire shares of Common Stock through purchases on the
open market or from third parties in accordance with Section
2.2(b) of the Amended and Restated Standstill Agreement or shares
of Class A Stock from the Company in accordance with Article VI
of the Stockholders' Agreement. Pursuant to the Stockholders'
Agreement, for good and valuable consideration and as a condition
to the effectiveness of such assignment and to the acquisition of
shares of Common Stock or Class A Stock by the undersigned, the
undersigned hereby expressly confirms and agrees, for the benefit
of the Company and each Class A Holder:
a. to be bound by the terms and conditions of the
Stockholders' Agreement and to perform, observe and
assume each and every one of the covenants, rights,
promises, agreements, terms, conditions, obligations
and duties of a Class A Holder under the Stockholders'
Agreement;
b. to be bound by the terms and conditions of the
Registration Rights Agreement and to perform, observe
and assume each and every one of the covenants,
rights, promises, agreements, terms, conditions,
obligations and duties of a holder of Eligible
Securities (as defined in the Registration Rights
Agreement) under the Registration Rights Agreement;
c. to execute and deliver concurrently herewith a
Qualified Stock Purchaser Standstill Agreement and a
Qualified Stock Purchaser Confidentiality Agreement;
and
d. to cause the Person or Persons, if any, which,
directly or indirectly, ultimately Control the
undersigned to execute and deliver concurrently
herewith such Qualified Stock Purchaser Standstill
Agreement and such Qualified Stock Purchaser
Confidentiality Agreement.
<PAGE>
2. From and after the date hereof, (a) all references
to a "Class A Holder" or the "Class A Holders" in the
Stockholders' Agreement shall be deemed to be references to the
undersigned (along with the other Class A Holders), and (b) all
references to a "holder of Eligible Securities" or "holders of
Eligible Securities" in the Registration Rights Agreement shall
be deemed to be references to the undersigned (along with the
other holders of Eligible Securities).
3. Nothing in this Assumption Agreement shall relieve
any of FT, DT or any of the other Class A Holders of any of its
obligations under the Stockholders' Agreement or any of the Other
Investment Documents.
4. The undersigned represents and warrants to the
Company that it (a) is not an Alien, (b) has the legal and
financial ability to purchase shares of Common Stock or Class A
Stock in accordance with Section 2.2 of the Amended and Restated
Standstill Agreement or Article VI of the Stockholders'
Agreement, as the case may be, and (c) will not be a Major
Competitor of the Company or of the Joint Venture immediately
following such purchase.
IN WITNESS WHEREOF, the undersigned has duly executed this
Assumption Agreement as of this _____ day of ____________, 19__.
[NAME]
By________________________________________
Name:
Title:
<PAGE>
EXHIBIT E
STOCK PAYMENT PROMISSORY NOTE
New York, New York
U.S. $____________________ _____________, 19__
FOR VALUE RECEIVED, [CLASS A HOLDER], a _______________
("Maker"), promises to pay to SPRINT CORPORATION, a Kansas
corporation ("Sprint"), or its assigns (Sprint and its assigns
being referred to herein as "Payee"), at ____________________
__________________, or at such other place as Payee may from time
to time designate in writing, on demand the outstanding amount of
the loans extended from time to time by the Payee to the Maker in
connection with the purchase by the Maker of shares of capital
stock of the Payee pursuant to Section 7.17 of the Amended and
Restated Stockholders' Agreement among Sprint, France Telecom
S.A. and Deutsche Telekom AG (the "Stock Purchase Loans"),
together with interest thereon at the rate of [one month LIBOR
for the first thirty days] [market rate to be determined
thereafter]. Interest on this Note shall be payable on demand up
to and through such time as the holder hereof shall demand
payment of the principal hereunder, and at such time all
principal and all accrued and unpaid interest shall be due and
payable in full.
1. Loan Amount. This Note is given to evidence loans made
or to be made by Payee in accordance with the terms of the
Amended and Restated Stockholders' Agreement (the "Stockholders'
Agreement"). Such loans shall be evidenced by this Note and shall
be subject to the terms of this Note and the Stockholders'
Agreement. The outstanding principal balance of this Note may be
reduced from time to time by payments and prepayments hereunder
and may be increased from time to time by additional loans in
connection with the Stockholders' Agreement. On the date of a
Stock Purchase Loan, Payee shall note on the Schedule the date
and amount of such loan and shall recompute and note on the
Schedule the aggregate principal amount of this Note outstanding
following such loan. Upon any payment or prepayment of this Note
in whole or in part, the Payee shall note on the Schedule the
date and amount of the principal paid or repaid and shall
recompute and note on the Schedule the aggregate principal amount
of this Note outstanding following such payment or prepayment.
Maker ackowledges that the notation of a Stock Purchase Loan or
payment or prepayment on the Schedule shall, in absence of
manifest error, constitute prima facie evidence of such loan or
payment or prepayment and that such borrowing or payment or
prepayment was made.
2. Default Rate. From and after an occurrence of an Event
of Default and during the continuance thereof, the principal
balance due hereunder shall bear interest at a rate per annum
equal to [one month LIBOR for the first thirty days] [market rate
to be determined thereafter] plus one percent (1%) per annum.
Default interest shall be due and payable by Maker upon demand of
Payee.
<PAGE>
3. Maximum Lawful Rate. This Note is hereby expressly
limited so that in no contingency or event whatsoever, whether by
acceleration of maturity of the indebtedness evidenced hereby or
otherwise, shall the amount paid or agreed to be paid to Payee
for the use, forbearance or detention of money exceed the highest
lawful rate permissible under applicable law. If, from any
circumstances whatsoever, fulfillment of any provision hereof, at
the time performance of such provision occurs, shall involve
payment of interest in excess of that authorized by law, the
obligation to be fulfilled shall be reduced to the limit so
authorized by law, and if, from any circumstances, Payee shall
ever receive as interest an amount which would exceed the highest
lawful rate applicable to Maker, such amount which would be
excessive interest shall be applied to the reduction of the
unpaid principal balance hereof and not to the payment of
interest.
4. Method of Making Payments; Renewal of Obligations. All
payments with respect to principal and interest hereunder shall
be made by wire transfer of immediately available funds in United
States dollars to such account as Payee shall designate in
writing to Maker. Maker hereby expressly agrees that to the
extent that Maker makes a payment or payments on this Note and
such payment or payments, or any part thereof, are subsequently
invalidated, declared to be fraudulent or preferential, set aside
or are required to be repaid to a trustee, receiver, or any other
party under any bankruptcy act, state or national law, common law
or equitable cause, then to the extent of such payment or
repayment, the indebtedness evidenced hereby which is intended to
be satisfied by such payment or payments shall be revived and
continued in full force and effect as if said payment or payments
had not been made.
5. Events of Default. The occurrence of any one or more of
the following conditions or events shall constitute an "Event of
Default":
a. Failure to Pay. Maker fails to pay the principal
and interest when due and payable or declared due and
payable in accordance with the terms of this Note and such
failure shall continue for three (3) Business Days;
b. Bankruptcy. (i) Maker shall commence proceedings
seeking either its own bankruptcy or to be granted a
suspension of payments or any other proceeding under any
bankruptcy, reorganization, arrangement, adjustment of
debt, relief of debtors, dissolution, insolvency or
liquidation or similar law of any jurisdiction, whether now
or hereafter in effect; (ii) any proceeding such as
described in clause (i) of this subsection 5(b) is
commenced or applied to be commenced against Maker, which
proceeding remains undismissed for a period of sixty (60)
days or is dismissed on the ground of lack of funds
sufficient to cover the costs of such proceedings; (iii) a
custodian, trustee, administrator or similar official is
appointed under any applicable law described in clause (i)
of this subsection 5(b) with respect to Maker or such
custodian, trustee, administrator or similar official takes
charge of all or any substantial part of the property of
Maker; (iv) an adjudication is made that Maker is insolvent
or bankrupt; (v) any order of relief or other order is
entered approving any case or proceeding such as is
described in clause (ii) of this subsection 5(b); (vi)
Maker makes a general assignment for the benefit of its
creditors; or
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<PAGE>
(vii) Maker takes any corporate or similar action for the
purpose of effecting any of the actions, orders or events
described in the foregoing clauses of this subsection 5(b).
6. Remedies. Upon the occurrence of an Event of Default, at
the option of Payee, all amounts payable by Maker to Payee under
the terms of the Note shall immediately become due and payable by
Maker to Payee and Payee shall have all the rights, powers and
remedies available under the terms of this Note, by agreement,
under applicable law or otherwise. Notwithstanding the foregoing,
upon the occurrence of an Event of Default described in Section
6(b) above, the amounts hereunder shall become automatically due
and payable without presentment, protest or demand of any kind.
7. Certain Withholding Obligations. Payee agrees that it
will provide any applicable statements or forms required to be
furnished under an applicable [residence of Maker] income tax
treaty or the tax laws of [residence of Maker] in order to obtain
any reduction in or exemption from [residence of Maker] tax on
interest paid under this Note. Maker agrees that it will timely
file any forms (with appropriate attachments) required to be
filed with [identify the appropriate tax authority] reporting any
payment of interest under this Note. All payments of interest
under this Note will be subject to the withholding of any
applicable [identify country of which Maker is resident] income
tax.
8. Representations and Warranties of Maker. Maker
represents and warrants to Payee that:
a. Existence of Maker.
[This paragraph to be used if FT is the Maker of the Note:
FT is a societe anonyme validly existing under the laws of
the Republic of France, and has all requisite power and
authority to enter into this Note.]
[This paragraph to be used if DT is the Maker of the Note:
DT is an Aktiengesellschaft duly formed and validly
existing under the laws of the Republic of Germany, and has
all requisite corporate power and authority to enter into
this Note.]
b. No Conflicts. The execution and delivery of this
Note by Maker and the performance by Maker of its
obligations hereunder do not and will not (with or without
the giving of notice or the passage of time or both) (i)
conflict with or result in a breach or violation of the
certificate of incorporation, bylaws or other
organizational documents of Maker, (ii) conflict with or
result in a violation or breach of, or constitute a default
under, any statute, rule or regulation or any order,
judgment or decree of any court or governmental agency or
body having jurisdiction over Maker or any of its
properties or assets where such violation, breach or
default would reasonably be expected to result in a
material adverse effect on the Maker, or (iii) conflict
with or result in a violation or breach of, constitute a
default under, result in or give to any person any right of
termination, cancellation or
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<PAGE>
acceleration or modification in or with respect to, any
indenture, mortgage, deed of trust, loan agreement, lease
or other agreement or instrument to which Maker is a party
or by which its assets are bound where such violation,
breach, default or right of termination, cancellation,
acceleration or modification would reasonably be expected
to result in a material adverse effect on the Maker.
c. No Consents. No consent, approval or action of,
filing with or notice to, any court or governmental agency
or body is required in connection with the execution,
delivery and performance by Maker of this Note or the
performance of its obligations hereunder.
d. Authority; Binding Effect. This Note has been duly
authorized, executed and delivered by Maker and constitutes
the valid and binding agreement of Maker enforceable
against Maker in accordance with its terms.
9. Costs of Collection. Maker agrees to pay all costs and
expenses of collection, including reasonable attorneys' fees and
expenses (but not including the portion of any fees determined
pursuant to the Bundesegebuhrenordnung fur Rechtsanwalte vom 26.
Juli 1957 (BGB1) I S. 907 (as it or any successor provision is
from time to time in effect), arising in connection with any
enforcement action by Payee, in which it shall prevail, of any of
its rights under this Note whether by or through an
attorney-at-law or in an action in bankruptcy, insolvency or
other judicial proceedings.
10. Waivers; Amendment. No delay or failure on the part of
Payee to exercise any right or remedy accruing to Payee
hereunder, upon any default or breach by Maker of any term or
provision hereof, shall be held to be an abandonment thereof. No
delay on the part of Payee in exercising any of its rights or
remedies shall preclude Payee from the exercise thereof at any
time during the continuance of any default or breach. No waiver
of a single default or breach shall be deemed a waiver of any
subsequent default or breach. Payee may enforce any one or more
remedies hereunder successively or concurrently, at its option.
All waivers under this Note must be in writing signed by the
Party entitled to enforce the right waived. All amendments to
this Note must be in writing and signed by both the Maker and the
Payee.
Maker, its successors and assigns, and all other persons
liable for the payment of this Note, waive presentment for
payment, demand, protest, and notice of demand, dishonor, protest
and nonpayment, and consent to any and all renewals, extensions
or modifications that might be made by Payee as to the time of
payment of this Note from time to time.
11. Securities Laws. THIS NOTE HAS NOT BEEN REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), THE SECURITIES LAWS OF ANY U.S. STATE OR OTHER APPLICABLE
SECURITIES LAWS IN RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION
REQUIREMENTS OF THE ACT AND SUCH LAWS. THIS NOTE IS BEING
ACQUIRED BY THE PAYEE HEREOF FOR INVESTMENT ONLY AND FOR SAID
PAYEE'S OWN ACCOUNT, AND NEITHER THIS
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<PAGE>
NOTE NOR INTEREST HEREIN MAY BE OFFERED FOR SALE, PLEDGED,
HYPOTHECATED, SOLD, ASSIGNED OR TRANSFERRED AT ANY TIME EXCEPT IN
COMPLIANCE WITH THE ACT, ANY APPLICABLE U.S. STATE SECURITIES
LAWS, ANY OTHER APPLICABLE SECURITIES LAWS AND ANY OTHER LAWS
WHICH ARE APPLICABLE TO SUCH TRANSACTION AND IN COMPLIANCE WITH
THE TERMS AND CONDITIONS OF THIS NOTE. NEITHER THIS NOTE NOR ANY
INTEREST HEREIN WILL BE TRANSFERRED OF RECORD EXCEPT IN
COMPLIANCE WITH THE ACT, SUCH LAWS AND THE TERMS OF THIS NOTE;
AND NO PERSON SHALL BE RECOGNIZED AS HAVING ANY RIGHT HEREUNDER
UNLESS SUCH PERSON HAS BECOME THE REGISTERED HOLDER HEREOF.
12. 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 Note, 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 Note 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 hereto to the extent possible.
13. Notices. All notices and other communications required
or permitted under this Note should 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 (7) days after it has been sent by
registered or certified mail, return receipt requested,
addressed: (a) if to the Payee, at such address as such Payee
shall have furnished to the Maker in writing, or until any such
Payee so furnishes to the Maker an address, then to and at the
address of the last Payee of the Note who has furnished an
address to the Maker; or (b) if to the Maker [specify Maker's
address], or at such other address, or to the attention of such
other officer, as the Maker shall furnish to each Payee in
writing.
14. Captions. The captions herein set forth are for
convenience only and should not be deemed to define, limit or
describe the scope or intent of this Note.
15. Successors; Assignment. The terms and provisions of
this Note shall be binding upon and inure to the benefit of the
successors and assigns of the Maker and the successors and
registered assigns of the Payee. This Note may only be
transferred or assigned by the Payee in accordance with the terms
of this Section 15 and may not be transferred or assigned to any
Person who is a Major Competitor of France Telecom SA ("FT") or
Deutsche Telekom AG ("DT") or of the Joint Venture (as defined
below). The Maker will keep at its principal office a register in
which the Maker will provide for the registration of this Note
and for the registration of transfers of this Note. The Maker may
treat the person in whose name any Note is registered on such
register as owner thereof for the purpose of receiving payment of
the principal and of interest (if applicable) on this Note and
for all other purposes, and the Maker shall not be affected by
any notice to the contrary. All references in this Note to the
Payee shall mean the Person in whose name this Note is at the
time registered on such register. Upon surrender of this Note for
registration or transfer, or for exchange, to the Maker
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<PAGE>
at the address set forth above, the Maker will execute and
deliver in exchange therefor, a new Note or Notes in
denominations of at least U.S. $50 million (except one Note may
be issued in a lesser principal amount if the unpaid principal
amount of the surrendered Note is not evenly divisible by, or is
less than, U.S. $50 million) as requested by the Payee or
transferee, which aggregate the unpaid principal amount of such
surrendered Note. Each such new Note shall be dated so there will
be no loss of interest on such surrendered Note and shall
otherwise be of like tenor and shall be registered in the name or
names of such person as such Payee or transferee may request. In
addition to the surrender of the Note being transferred or
assigned to Maker, in connection with a request for the transfer
or assignment of this Note or the exchange hereof for one or more
additional Notes, Maker must also receive a written instrument of
transfer in form satisfactory to Maker and duly executed by the
registered Payee of this Note and the Payee must also have
furnished to the Maker such assurances as Maker may reasonably
request that the transfer is in compliance with the Act, all
applicable state securities laws, any other applicable securities
law and any other laws which are applicable to such transfer. Any
purported transfer in violation of the foregoing provision shall
be null and void and of no force and effect whatsoever. For
purposes of this Section 15, the term "Major Competitor" shall
mean (a) with respect to FT or DT, an entity that materially
competes with a major portion of the telecommunications services
business of FT or DT in Europe, or an entity 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 Payee
reasonable evidence of the occurrence of such steps; and (b) with
respect to the Joint Venture, an entity that materially competes
with a major portion of the telecommunications services business
of the Joint Venture, or an entity 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, provided that the party so
concluding furnishes in writing to the Payee reasonable evidence
of the occurrence of such steps. For purposes of this Section 15,
the term "Joint Venture" shall mean the venture formed pursuant
to the Joint Venture Agreement dated as of June 22, 1995, as
amended, among Sprint Corporation, Sprint Global Venture Inc., FT
and DT.
16. Governing Law; Submission to Jurisdiction.
a. THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER 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. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
NOTE MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK
OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN
DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF
THIS NOTE, MAKER HEREBY ACCEPTS FOR ITSELF AND IN RESPECT
OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE
JURISDICTION OF THE AFORESAID COURTS.
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<PAGE>
MAKER, AND THE PAYEE BY THE ACCEPTANCE OF THIS NOTE, EACH
IRREVOCABLY WAIVES TRIAL BY JURY, AND MAKER HEREBY
IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT
LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED
ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR
PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS.
c. MAKER HEREBY IRREVOCABLY DESIGNATES CT CORPORATION
SYSTEM AS ITS DESIGNEE, APPOINTEE AND LOCAL AGENT TO
RECEIVE, FOR AND ON BEHALF OF MAKER, SERVICE OF PROCESS IN
SUCH RESPECTIVE JURISDICTIONS IN ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS NOTE OR ANY DOCUMENT
RELATED THERETO. IT IS UNDERSTOOD THAT A COPY OF SUCH
PROCESS SERVED ON SUCH LOCAL AGENT WILL BE PROMPTLY
FORWARDED BY MAIL TO MAKER, BUT THE FAILURE OF MAKER TO
RECEIVE SUCH COPY SHALL NOT AFFECT IN ANY WAY THE SERVICE
OF SUCH PROCESS. MAKER FURTHER IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN
ANY SUCH ACTION OR PROCEEDING BY MAILING OF COPIES THEREOF
BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO MAKER,
SUCH SERVICE TO BECOME EFFECTIVE THIRTY (30) DAYS AFTER
SUCH MAILING.
d. NOTHING HEREIN SHALL AFFECT THE RIGHT OF PAYEE TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST
MAKER IN ANY OTHER JURISDICTION.
17. Computation of Time. Whenever the last day for the
exercise of any privilege or the discharge of any duty under this
Note shall fall on a day other than a Business Day, (as defined
below), the party having such privilege or duty shall have until
5:00 p.m. (New York time) on the next succeeding Business Day to
exercise such privilege or to discharge such duty. For purposes
of this Note, the term "Business Day" shall mean any day other
than a day which is a Saturday or Sunday or other day on which
commercial banks in the City of New York, Paris, France or
Frankfurt am Main, Germany are authorized or required to remain
closed.
18. Language. [Include the following Section if (i) loi
n(degree) 94-665 du 4 aout 1994 relative a l'emploi de 1a langue
francaise or another similar law is in effect in the Republic of
France and (ii) the Maker is FT: The parties have negotiated this
Note in the English language, and have prepared successive drafts
and the definitive texts of this Note in the English language.
For purposes of complying with loi n(degree) 94-665 du 4 aout
1994 relative a l'emploi de la langue francaise, the Parties have
prepared a French version of this Note, 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
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<PAGE>
delivered. The parties hereto deem the French and English
versions of this Note to be equally authoritative.] [Otherwise,
include the following: This Note has been concluded in the
English language and the original English version will govern in
the event of any inconsistency between such version and any
translation thereof.]
19. Waiver of Immunity. Maker 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 Note 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 Note or the subject
matter hereof (including any obligation for the payment of
money). Maker 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. ss. 1602 et seq. The foregoing waiver shall constitute a
present waiver of immunity at any time any action is initiated
against Maker, FT and DT or any of their Affiliates with respect
to this Note.
20. Judgment Currency.
a. Maker's obligations hereunder to make payments in
U.S. Dollars shall not be discharged or satisfied by any
tender or recovery pursuant to any judgment expressed in or
converted into any currency other than U.S. Dollars, except
to the extent that such tender or recovery actually results
in the effective receipt by the Payee of the full amount of
the U.S. Dollars expressed to be payable to the Payee
hereunder. If for the purpose of obtaining or enforcing
judgment against Maker in any court or in any jurisdiction,
it becomes necessary to convert into or from any currency
other than U.S. Dollars (such other currency being
hereinafter referred to as the "Judgment Currency") an
amount due in U.S. Dollars, the conversion shall be made,
and the currency equivalent determined, in each case, as on
the day immediately preceding the day on which the judgment
is given (such being hereafter referred to as the "Judgment
Currency Conversion Date").
b. If there is a change in the rate of exchange
prevailing between the Judgment Currency Conversion Date
and the date of actual payment of the amount due, Maker
covenants and agrees to pay, or cause to be paid, such
additional amounts, if any (but in any event not a lesser
amount), as may be necessary to ensure that the amount paid
in the Judgment Currency, when converted at the rate of
exchange quoted by a reputable independent financial
institution chosen by the Payee at its prevailing rate for
such currency exchange on the date of payment, will produce
the amount of U.S. Dollars which could have been purchased
with the amount of Judgment Currency stipulated in the
judgment or judicial award at the rate of exchange
prevailing on the Judgment Currency Conversion Date.
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<PAGE>
c. For purposes of determining the currency equivalent
for this Section, such amounts shall include any premium
and costs payable in connection with the purchase of U.S.
Dollars.
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<PAGE>
IN WITNESS WHEREOF, Maker has caused this Note to be
executed by its duly authorized officers under its corporate seal
as of the date first above written.
[CLASS A HOLDER]
By:____________________
Name:_______________
Title:______________
[CORPORATE SEAL]
ATTEST:
____________________
Name:_______________
Title:______________
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