Exhibit 5
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AMENDED AND RESTATED
STOCKHOLDERS' AGREEMENT
Among
FRANCE TELECOM S.A.,
DEUTSCHE TELEKOM AG
and
SPRINT CORPORATION
Dated as of ----------, 1998
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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
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
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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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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:
ARTICLE I
DEFINITIONS
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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.
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"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
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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 Xxx 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 Xxxxx'x
Investors Service, Inc., Standard and Poor's Corporation or Duff
& Xxxxxx 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 Xxxxx'x 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
& Xxxxxx 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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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 Xxxxx'x
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 & Xxxxxx 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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(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, Xxxxxxxxxxx, Xxxxxx, Xxxxxx,
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Xxxxxxxx, 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;
-10-
(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
-12-
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.
-14-
"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.
-15-
"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.
-16-
"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.
-17-
"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;
-18-
(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
-19-
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.
-20-
"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,
-21-
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.
-22-
"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.
-23-
"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
-24-
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
-25-
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.
-26-
"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.
-27-
"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 0 XXX Xxxxx.
"Xxxxxx XXX Xxxxx" 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.
-28-
"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.
-29-
"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
-30-
(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
-31-
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
-32-
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
-33-
(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
-36-
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
-37-
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 & Xxxxxxxx, 0000 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
-39-
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
-40-
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;
-41-
(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
-42-
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, 0000, XXXXX XXXXXX XXXXXXXXXXX, XXXXXX
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
-46-
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 & Xxxxxxxx, 0000
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
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
-51-
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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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 & Xxxxxxxx, 0000 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: 0 xxxxx x'Xxxxxxx
00000 Xxxxx Cedex 15
France
Attn: Group Executive
Vice President
Resources
Tel: (00-0) 00-00-00-00
Fax: (00-0) 00-00-00-00
with a copy to: 0 xxxxx x'Xxxxxxx
00000 Xxxxx Cedex 15
France
Attn: General Counsel
Tel: (00-0) 00-00-00-00
Fax: (00-0) 00-00-00-00
and with a
copy to: Shearman & Sterling
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
X.X.X.
Attn: Xxxxxx X. Xxxx, Xx., Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
DT: Xxxxxxxxx-Xxxxx-Xxxxx 000
X-00000 Xxxx
Xxxxxxx
Tel: 00-000-000-0000
Fax: 00-000-000-0000
Attn: Chief Executive Officer
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with a copy to: Cleary, Gottlieb, Xxxxx & Xxxxxxxx
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
X.X.X.
Attn: Xxxxxx X. Xxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
Sprint: 0000 Xxxxxxx Xxxxxxx
Xxxxxxx, Xxxx Wing
Westwood, Kansas 66205
U.S.A.
Attn: General Counsel
Tel: (000) 000-0000
Fax: (000) 000-0000
with a copy to: King & Spalding
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
X.X.X.
Attn: Xxxxx X. Xxxxxxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
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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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 XX XXXXXX XX 0000 XXXXXXXX, XXX XXXX,
XXX XXXX 00000, 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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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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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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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
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.
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.]
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
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
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
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.
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
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.
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
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
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
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.
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:_____________________
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
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
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
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.]
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:
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.
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:
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.
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
-2-
(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
-3-
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
-4-
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
-5-
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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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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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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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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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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