EXHIBIT 5
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COORDINATION AGREEMENT
Between
FRANCE TELECOM
and
DEUTSCHE TELEKOM AG
Dated as of July 31, 1995
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TABLE OF CONTENTS
Page
ARTICLE I PRINCIPLES OF COORDINATION.................................. 5
Section 1.1 Joint or Coordinated Action............................ 5
Section 1.2 Relative Shareholdings................................. 5
Section 1.3 Holdings of Associates................................. 5
Section 1.4 No Impairment of Rights................................ 6
Section 1.5 Further Assurances..................................... 6
ARTICLE II PURCHASES OF CLASS A STOCK................................... 6
Section 2.1 Optional Purchase Rights................................ 6
Section 2.2 Pricing Elections....................................... 7
Section 2.3 Conversion Elections.................................... 7
Section 2.4 Redemption Election..................................... 8
Section 2.5 Qualified Stock Purchasers.............................. 8
ARTICLE III PURCHASES OF COMMON STOCK.................................... 8
Section 3.1 Applicability........................................... 8
Section 3.2 Purchase Allocations.................................... 8
Section 3.3 Coordination of Market Purchases........................ 9
ARTICLE IV GOVERNANCE PROVISIONS........................................ 9
Section 4.1 Voting of Securities.................................... 9
Section 4.2 Mutual Support of Board Nominees........................10
Section 4.3 Number of Directors.....................................10
Section 4.4 Committee Representation................................10
Section 4.5 Replacement of Directors................................10
Section 4.6 Stockholder Matters.....................................11
Section 4.7 Actions with Respect to Obligations
of the Company........................................11
ARTICLE V LONG DISTANCE ASSETS.........................................12
Section 5.1 Sale of Long Distance Assets............................12
Section 5.2 Qualified LD Purchasers.................................12
Section 5.3 Lien Foreclosures.......................................13
ARTICLE VI SALES OF SHARES..............................................13
Section 6.1 Right of First Offer....................................13
Section 6.2 Sales of Shares to the Company..........................14
Section 6.3 Coordination of Market Sales............................14
Section 6.4 Registration Rights.....................................14
ARTICLE VII CHANGE OF CONTROL OF THE COMPANY.............................15
Section 7.1 Joint Action............................................15
Section 7.2 Competing Proposals.....................................15
ARTICLE VIII INDEMNIFICATION..............................................15
Section 8.1 Indemnification.........................................15
Section 8.2 Additional Provisions...................................16
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ARTICLE IX MISCELLANEOUS................................................16
Section 9.1 Termination.............................................16
Section 9.2 Notices.................................................17
Section 9.3 Waiver, Amendment, etc..................................18
Section 9.4 No Partnership..........................................18
Section 9.5 Binding Agreement; Transfers; No Third
Party Beneficiaries...................................18
Section 9.6 No Assignment of Certain Purchase Rights................18
Section 9.7 Qualified Subsidiaries..................................19
Section 9.8 Governing Law; Dispute Resolution;
Equitable Relief.....................................19
Section 9.9 Severability............................................19
Section 9.10 Headings; Counterparts..................................20
Section 9.11 Entire Agreement........................................20
Section 9.12 Language of Agreement...................................20
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COORDINATION AGREEMENT
COORDINATION AGREEMENT, dated as of July 31, 1995 (this "Agreement"),
between FRANCE TELECOM, an EXPLOITANT PUBLIC formed under the laws of France
("FT"), and DEUTSCHE TELEKOM AG, an AKTIENGESELLSCHAFT formed under the laws of
Germany ("DT").
RECITALS
--------
WHEREAS, Sprint Corporation, a corporation organized under the laws of the
State of Kansas (the "Company"), FT and DT have agreed to form a global Joint
Venture to provide telecommunications services as provided in the Joint Venture
Agreement dated as of June 22, 1995, among the Company, Sprint Global Venture,
Inc., a wholly-owned subsidiary of the Company, FT and DT (the "Joint Venture
Agreement"), and to pursue various telecommunications opportunities around the
world as further provided therein; and
WHEREAS, pursuant to an Investment Agreement, dated as of July 31, 1995,
among the Company, FT and DT (the "Investment Agreement"), FT and DT have agreed
to purchase from the Company shares of Class A Stock (such and other capitalized
terms being used without definition in this Agreement having the meanings set
forth in the documents referred to in the Glossary of Terms set forth in
APPENDIX A hereto, which is incorporated by reference herein) of the Company,
including, in certain cases (subject to satisfaction of certain conditions set
forth in the Relevant Documents), Class A Common Stock representing in the
aggregate approximately 20% of the outstanding common equity of the Company; and
WHEREAS, pursuant to the Investment Agreement:
(a) (i) FT, DT and the Company will enter into the Stockholders'
Agreement, the Registration Rights Agreement and the Standstill Agreement, (ii)
FT and the Company shall enter into the FT Investor Confidentiality Agreement,
and (iii) DT and the Company shall enter into the DT Investor Confidentiality
Agreement (all such agreements, together with the Investment Agreement, are
collectively referred to as the "Investment Documents"); and
(b) the Company will duly adopt the Amendment, the Bylaws Amendment and
the amendment to the Rights Agreement contemplated in the Investment Agreement
(the Articles, Bylaws and Rights Agreement, as so amended, are collectively
referred to as the "Corporate Documents" and, together with the Investment
Documents, the "Relevant Documents"); and
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WHEREAS, FT and DT will each hold their shares of Class A Stock separately;
and
WHEREAS, FT and DT desire to enter into this Agreement to coordinate their
activities, and to specify their respective rights and obligations with regard
to their investment in the Company;
NOW, THEREFORE, in consideration of the mutual covenants and obligations
set forth herein, each of the parties hereby agrees as follows:
ARTICLE I
PRINCIPLES OF COORDINATION
--------------------------
Section 1.1 Joint or Coordinated Action. The parties desire to coordinate
the exercise of their respective rights and obligations as parties to the
Investment Documents and as holders of Class A Stock under the Corporate
Documents, and the parties shall make reasonable efforts in good faith to reach
consensus on appropriate coordinated action within the necessary time frames. If
the parties are unable to reach consensus on coordinated action despite their
efforts pursuant to this Section 1.1, the relevant provisions of this Agreement
shall apply.
Section 1.2 Relative Shareholdings. For so long as the restrictions set
forth in Section 7.5(b) of the Stockholders' Agreement (or any successor
provision thereto) shall remain in effect, and notwithstanding any other
provision hereof to the contrary, no party shall acquire or dispose of shares of
Class A Stock or other Voting Securities of the Company if, as a result thereof,
the ratio of the Committed Percentage of one party (and its Qualified
Subsidiaries) to the Committed Percentage of the other party (and its Qualified
Subsidiaries) would be greater than (i) until the Investment Completion Date, 1
to 1, and (ii) thereafter, 3 to 2.
Section 1.3 Holdings of Associates. Each party shall make reasonable
efforts to ensure that all of the Persons listed on Schedule A to the Investment
Agreement (as to FT) or Schedule B to the Investment Agreement (as to DT) shall,
in the aggregate, Beneficially Own Voting Securities of the Company representing
less than 0.05% of the Voting Power of the Company. In addition, the parties
shall consult with each other on a regular basis concerning such other
arrangements as they may from time to time deem necessary or reasonably
appropriate for the purpose of monitoring and administering the provisions of
the Standstill Agreement relating to Voting Securities of the Company
Beneficially Owned by such Associates.
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Section 1.4 No Impairment of Rights. Except with the concurrence of the
other party or to the extent otherwise expressly required by this Agreement, no
party shall take any action with respect to the subject matter of this Agreement
if such action would impair the rights of the other party under this Agreement
or any of the Relevant Documents or would impair the ability of the other party
to comply with its obligations hereunder or thereunder.
Section 1.5 Further Assurances. Each party shall, within any applicable
time periods, execute and deliver such additional agreements, documents or other
instruments as may be necessary, or as may be reasonably requested by the other
party, to give effect to the rights and obligations provided for in this
Agreement, to render effective the transactions contemplated hereby, and
otherwise to carry out, to the fullest extent possible, the intent and purposes
of this Agreement and to enable the parties to achieve the practical benefits
intended hereby.
ARTICLE II
PURCHASES OF CLASS A STOCK
--------------------------
Section 2.1 Optional Purchase Rights. (a) If the Relevant Documents
permit the parties to acquire shares of Class A Stock of the Company other than
pursuant to Sections 2.1 through 2.5, inclusive, of the Investment Agreement
(such non-excluded shares being the "Elective Shares"), then each party shall be
entitled to purchase (directly from the Company, if appropriate, or otherwise
pursuant to arrangements reasonably satisfactory to each party) half of such
Elective Shares; provided that, at a time when one party Beneficially Owns fewer
Voting Securities of the Company than the other party, the party owning fewer
shares shall be entitled (but not obligated) to acquire as many (including all)
of such Elective Shares as shall permit it to Beneficially Own the same number
of Voting Securities of the Company as the other party after giving effect to
the acquisition by both parties (or by such party, as the case may be) of all
such Elective Shares. If the Relevant Documents specify a number of Elective
Shares each party may purchase individually which is different from that amount
determined pursuant to the preceding sentence, then the parties will make such
arrangements as are reasonably necessary to enable each party to acquire the
number of Elective Shares determined pursuant to the preceding sentence. Such
arrangements may include having the party that wants to purchase fewer Elective
Shares act as the nominee of the other party. Each party shall make reasonable
efforts to purchase all of the Elective Shares which it is entitled to purchase
pursuant to the Relevant Documents.
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(b) Except with respect to purchases made pursuant to Section 7.3 of the
Stockholders' Agreement, each party shall, promptly (and, in any event, not
later than fifteen days prior to any notification deadline set forth in the
Relevant Documents) after becoming aware of its right to do so, notify the other
party in writing of the extent to which it intends to purchase from the Company
any Elective Shares to which it is entitled. If one party does not elect to
purchase all of the Elective Shares to which it is entitled, then the other
party may elect to purchase such number as it shall desire to purchase of the
Elective Shares which the initial party has indicated it is not interested in
purchasing, and the parties will make such arrangements as are reasonably
necessary to enable such other party to acquire such Elective Shares. Such
arrangements may include having the party that did not want to purchase such
Elective Shares act as the nominee of the other party.
Section 2.2 Pricing Elections. If, pursuant to Section 3(b)(iii)(x),
3(b)(iii)(y)(3)(A) or 3(b)(iii)(y)(4)(B) of the Class A Provisions, the parties
shall be entitled to Fix the Conversion Price of their Class A Preference Stock
at the Target Price, the New Target Price or 93.308% of the New Target Price, as
the case may be, they shall confer in a timely manner and shall make reasonable
efforts to agree on whether or not to exercise such election. If the parties
cannot agree on the action to be taken, they shall not exercise such election.
Section 2.3 Conversion Elections. (a) If, pursuant to Section 3(a)(iii)
of the Class A Provisions, the parties shall be entitled to postpone the
conversion of their Class A Preference Stock into Class A Common Stock, they
shall confer in a timely manner and shall make reasonable efforts to agree on
whether or not to exercise such election. If the parties cannot agree on the
action to be taken, they shall notify the Company that they elect to postpone
the conversion of their Class A Preference Stock.
(b) If, pursuant to Section 3(b)(v) or 7(f)(ii) of the Class A Provisions,
the parties shall be entitled to convert their Class A Preference Stock into
Class A Common Stock or into Common Stock, as the case may be, they shall confer
in a timely manner and shall make reasonable efforts to agree on whether or not
to exercise such election. If the parties cannot agree on the action to be
taken, they shall not exercise such election.
(c) If, pursuant to Section 7(m) of the Class A Provisions, the parties
shall be entitled to convert certain shares of their Class A Preference Stock
into Common Stock, they shall confer in a timely manner and shall make
reasonable efforts to agree on whether or not to exercise such election. If the
parties cannot agree on the action to be taken, each party shall be entitled to
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elect to convert the number of its own such shares as it deems appropriate and
all parties shall join in notifying the Company of each such election.
Section 2.4 Redemption Election. If, pursuant to Section 7(n) of the
Class A Provisions, the parties shall be entitled to request the Company to
redeem their Class A Preference Stock, they shall confer in a timely manner and
shall make reasonable efforts to agree on whether or not to exercise such
election. If the parties cannot agree on the action to be taken, they shall
notify the Company that they elect to have the Company redeem their Class A
Preference Stock.
Section 2.5 Qualified Stock Purchasers. If at any time the parties are
permitted pursuant to the Relevant Documents to assign their rights to purchase
shares to a Qualified Stock Purchaser, then the parties shall confer promptly to
decide whether to assign such rights, and shall make reasonable efforts to agree
on a single Qualified Stock Purchaser to act jointly for both of them. If the
parties cannot agree on such a single Qualified Stock Purchaser or on any of the
material terms relating thereto, they may each proceed independently.
ARTICLE III
PURCHASES OF COMMON STOCK
-------------------------
Section 3.1 Applicability. Until the Minimum Holding Termination Date,
all purchases of Common Stock by the parties from a Person other than the
Company shall be made only as provided in this Article III. The term "Minimum
Holding Termination Date" shall mean the earliest of (i) the date on which the
Transfer Restrictions are terminated pursuant to Section 2.6 of the
Stockholders' Agreement, (ii) the date on which all of the Class A Stock
converts to Common Stock of the Company, and (iii) the tenth anniversary of the
Initial Issuance Date.
Section 3.2 Purchase Allocations. (a) If the Relevant Documents permit
the parties to acquire shares of Common Stock or other Voting Securities of the
Company (other than Class A Stock), then each party shall be entitled to
purchase half of such shares or Voting Securities; provided that, at a time when
one party Beneficially Owns fewer Voting Securities of the Company than the
other party, then the party owning fewer shares shall, notwithstanding anything
in this Agreement or in any Relevant Document, be entitled (but not obligated)
to acquire as many (including all) of such additional shares as shall permit it
to Beneficially Own the same number of Voting Securities of the Company as the
other party after giving effect to the acquisition by both parties (or by such
party, as the case may be) of all
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such additional shares. If the Relevant Documents specify a number of shares of
Common Stock or other Voting Securities of the Company (other than Class A
Stock) that each party may purchase individually which is different from that
number of such shares determined pursuant to the preceding sentence, then the
parties will make such arrangements as are reasonably necessary to enable each
party to acquire the number of such shares determined pursuant to the preceding
sentence. Such arrangements may include having the party that wants to purchase
fewer such shares act as the nominee of the other party.
(b) Promptly (and, in any event, not later than fifteen days prior to any
notification deadline set forth in the Relevant Documents) after becoming aware
of its right to do so, each party shall notify the other party in writing of the
extent to which it intends to purchase shares of Common Stock in accordance
herewith and with the Relevant Documents. If one party elects to purchase less
than all (including none) of the Common Stock to which it is entitled, then the
other party may elect to purchase all or any number of the shares of Common
Stock which the initial party has indicated it is not interested in purchasing.
The parties shall promptly agree upon a period (the "Market Purchase Period")
within which they plan to purchase the shares of Common Stock they each have
agreed to purchase (the "Market Shares").
Section 3.3 Coordination of Market Purchases. The parties shall establish
a purchasing strategy with respect to all purchases of Market Shares designed to
minimize the market impact of such purchases. To the greatest extent possible,
the parties shall purchase Market Shares jointly in the same transactions and/or
through the same brokers, with the number of shares purchased allocated pro rata
in accordance with the allocation of Market Shares agreed to pursuant to Section
3.2.
ARTICLE IV
GOVERNANCE PROVISIONS
---------------------
Section 4.1 Voting of Securities. (a) Promptly following notice from the
Company that the holders of the Class A Stock may vote on or take any Class A
Action with respect to any issue unrelated to the election of Class A Directors,
the parties shall confer in good faith to come to a common position on how to
vote on or take such Class A Action with respect to such issue. Each party
shall, mindful of its obligation pursuant to Section 7.5(b) of the Stockholders'
Agreement, make reasonable efforts to accommodate, to the greatest extent
practicable and in a manner reasonably satisfactory to each party, the position
of the other party. In the exceptional circumstance that, notwithstanding the
foregoing and after consultation at the highest levels, the parties are unable
to agree upon a common position on such issue,
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the parties shall abstain from voting on such issue or shall abstain from taking
such Class A Action with respect to such issue, as the case may be.
(b) Following the conversion of all of the Class A Stock into shares of
Common Stock of the Company, each party shall, if so requested by the other
party (i) confer in good faith concerning any issue upon which the Common Stock
shall be entitled to vote, and (ii) make reasonable efforts to come to a common
position if possible on how to vote with respect to such issue.
(c) Each party shall cause its Qualified Subsidiaries to vote the shares of
Class A Stock held by them in accordance with any agreement reached with respect
thereto pursuant to this Section 4.1.
Section 4.2 Mutual Support of Board Nominees. The parties shall confer to
ensure that each of their candidates to the Company's board of directors is
chosen from substantially equivalent levels of management within their
respective organizations. A party may nominate a board candidate from outside
such party's organization only with the consent of the other party. In any
election of Class A Directors by the Class A Holders, each party shall vote its
shares of Class A Stock in support of the candidate or candidates nominated by
the other party.
Section 4.3 Number of Directors. Except as otherwise provided in this
Section 4.3, each of the parties shall be entitled to nominate to the board of
directors of the Company one-half of the total number of Class A Directors that
the holders of Class A Stock have the right to elect. If the number of Class A
Directors is an odd number, then the right to appoint the remaining director
shall rotate between the parties from year to year, with the appointment right
in the first year determined by lot.
Section 4.4 Committee Representation. Each party shall be entitled to
designate one-half of the number of Class A Directors that the holders of Class
A Stock are entitled or permitted to nominate to the Executive Committee and
each other committee of the board of directors of the Company; provided that, if
the holders of Class A Stock are entitled to nominate only one or any other odd
number of directors to a committee, then the right to designate the sole or odd-
numbered director shall alternate in a manner reasonably agreed to by the
parties.
Section 4.5 Replacement of Directors. At the request of one party, the
other party shall vote its shares of Class A Stock to remove the director or
directors nominated by such requesting
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party, and shall vote its shares of Class A Stock to elect or appoint as
directors any replacements therefor nominated or designated by such requesting
party.
Section 4.6 Stockholder Matters. Except as provided in the following
sentence, each of the parties shall attend all meetings of the stockholders of
the Company either in person (through an authorized officer, employee or agent
of such party) or by proxy. If either party wishes not to attend any such
meeting in person, it shall notify the other party in writing in advance thereof
and shall grant such proxy to the other party (or to its officers, employees or
agents who will be acting for such other party) if such other party so requests.
Nothing in this Section 4.6 shall be construed as limiting the manner in which
any party may vote on any matter, whether in person, by written consent or by
proxy.
Section 4.7 Actions with Respect to Obligations of the Company.
(a) Waivers or Consents. Each party shall promptly notify the other
in writing of its receipt of any request from the Company for a waiver of a
requirement that the Company perform any of its obligations under the
Relevant Documents or for a consent (other than any consent of the nature
referred to in Section 4.1(a)) to any action to be taken by the Company.
If the parties cannot agree on whether to grant such waiver or consent, as
the case may be, such waiver or consent shall not be granted; provided that
either party may grant such a waiver or consent if such waiver or consent
(i) relates to any action, omission or set of facts or circumstances solely
affecting such party, and (ii) would not impair in any manner the rights of
the other party under, or impair in any manner the ability of the other
party to comply with its obligations under, this Agreement or the Relevant
Documents.
(b) Declarations of Breach or Default. Each party shall confer
promptly with the other if it is concerned that the Company (or any related
party) may have breached of any of its (or such related party's)
obligations under the Relevant Documents. If, after such consultations,
the parties cannot agree on whether to declare formally that such a breach
constitutes a default under the Relevant Documents, such declaration shall
not be made; provided that (i) either party may make such a declaration if
such declaration (x) relates to any action, omission or set of facts or
circumstances solely affecting such party, and (y) would not impair in any
manner the rights of the other party under, or impair in any manner the
ability of the other party to comply with its obligations under, this
Agreement or the Relevant Documents, and (ii) nothing in this clause
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(b) shall estop or otherwise limit the ability of a party to assert by way
of defense or counterclaim that such a breach or default has occurred.
ARTICLE V
LONG DISTANCE ASSETS
--------------------
Section 5.1 Sale of Long Distance Assets. (a) If the parties receive an
LD Sale Notice from the Company pursuant to Section 3.1(c) of the Stockholders'
Agreement, each party shall be entitled to purchase a 50% undivided interest in
the Specified Long Distance Assets subject to such LD Sale Notice. Each party
shall make reasonable efforts to exercise its rights to purchase Specified Long
Distance Assets pursuant to the Relevant Documents.
(b) Within thirty days of its receipt of an LD Sale Notice, each party
shall notify the other party in writing of the amount, if any, of the undivided
interest in such Specified Long Distance Assets such party is willing to
purchase. If one party elects not to purchase the entire undivided interest to
which it is entitled in such Specified Long Distance Assets, then the other
party may purchase all or any portion of the undivided interest therein which
the first party has elected not to purchase.
(c) If, after giving effect to the foregoing, the parties have elected
between them to purchase less than all of the Specified Long Distance Assets,
then the parties shall promptly notify the Company in writing that they shall
not purchase such Specified Long Distance Assets. If, after giving effect to
the foregoing, the parties have elected (or if one party, in accordance with the
foregoing, has elected) to purchase all of such Specified Long Distance Assets,
the parties shall so notify the Company in writing and shall take all actions
necessary to purchase such Specified Long Distance Assets from the Company.
Such actions shall, to the extent necessary or reasonably appropriate, be
performed by each party (whether or not such party is an acquiring party) and
shall include the execution and delivery of such assignments, instruments of
transfer and other instruments as are necessary or reasonably appropriate for
the acquisition of such Specified Long Distance Assets. Each party shall be
responsible for its share (based upon the undivided interest such party has
agreed to purchase) of all costs relating to such purchase.
Section 5.2 Qualified LD Purchasers. (a) If the parties are at any time
permitted to assign their right to purchase Specified Long Distance Assets
described in an LD Sale Notice to a Qualified LD Purchaser, they shall make
reasonable efforts to agree upon a single Qualified LD Purchaser within the LD
Option
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Period described in Section 3.1(d) of the Stockholders' Agreement. If the
parties shall have selected a single prospective Qualified LD Purchaser to act
for them, they shall notify the Company of their selection.
(b) If the parties cannot agree upon a single Qualified LD Purchaser or
upon any of the material terms relating thereto, then each party may select a
Qualified LD Purchaser to act for it alone; provided that it has first consulted
with the other party and has made reasonable efforts to select a Qualified LD
Purchaser to act for it reasonably acceptable to such other party. If each of
the parties shall have selected a prospective Qualified LD Purchaser to act for
it in accordance with the foregoing sentence, they shall notify the Company of
their selections.
(c) If, after giving effect to the foregoing, the parties are unable to
select a single Qualified LD Purchaser to act for them collectively, or are
unable to select Qualified LD Purchasers to act for them individually, the
parties shall notify the Company of their election not to purchase the Specified
Long Distance Assets described in the LD Sale Notice referred to above.
Section 5.3 Lien Foreclosures. The provisions of this Article V shall
apply, mutatis mutandis, to the parties' exercise of any right to purchase set
forth in Section 3.1(b) of the Stockholders' Agreement arising out of the
foreclosure or other execution upon Long Distance Assets encumbered by a Lien of
the nature referred to in such Section 3.1(b).
ARTICLE VI
SALES OF SHARES
---------------
Section 6.1 Right of First Offer. If either party (the "Selling Party")
proposes at any time to Transfer shares of Class A Stock (or shares of Common
Stock into which shares of Class A Stock have been converted pursuant to the
Articles), other than to one of its Qualified Subsidiaries or to the other party
or one of the other party's Qualified Subsidiaries, the Selling Party shall
deliver a written notice (the "Offer Notice") to the other party (the "Offeree
Party") setting forth in reasonable detail (i) the number of shares proposed to
be Transferred, (ii) the price per share at which such shares are proposed to be
Transferred, and (iii) any other terms and conditions of such offer which are
material. If, within thirty days of its receipt of an Offer Notice, the Offeree
Party has notified the Selling Party of its acceptance thereof, then the Offeree
Party shall be obligated to purchase, and the Selling Party shall be obligated
to sell, all (but not less than all) of the shares offered
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pursuant to the Offer Notice (or, if less, the maximum number of shares
permitted to be acquired under Section 1.2 hereof) on the terms and conditions
set forth therein (subject, however, to receipt of any required material
Governmental Approvals or Third Party Approvals, compliance with Applicable Law,
and the absence of any injunction or similar legal order prohibiting such
Transfer). If the Offeree Party's purchase of such shares has not been
consummated within 180 days of the date of the Offer Notice relating thereto,
the Selling Party shall be entitled to Transfer such shares to any other Person
on terms no more favorable than those set forth in such Offer Notice.
Section 6.2 Sales of Shares to the Company. If the parties shall be
obligated to sell shares of Class A Stock to the Company pursuant to the
Relevant Documents, they shall confer promptly to decide upon all requisite
terms upon which such sale is to be consummated that may need to be decided by
them. If the parties shall have the right to sell shares of Class A Stock to
the Company pursuant to the Relevant Documents and the Relevant Documents do not
expressly state the number of shares each party may sell to the Company or do
not expressly state some other material term or condition of such sale, the
parties shall confer promptly to decide whether to sell such shares to the
Company and/or to decide upon all requisite additional terms upon which such
sale is to be consummated. If the parties are unable to agree on the terms upon
which to exercise a right to sell shares to the Company, then they shall notify
the Company in writing of their decision not exercise such right.
Section 6.3 Coordination of Market Sales. With respect to all sales by
the parties of Voting Securities of the Company not otherwise covered hereby,
the parties shall make reasonable efforts to agree upon a selling strategy with
respect to such sales designed to minimize the market impact of such sales.
Section 6.4 Registration Rights. Prior to exercising any demand
registration right pursuant to the Registration Rights Agreement, the parties
shall make reasonable efforts to agree on whether to exercise such right
together and, if so, on the timing and the other material terms thereof
(including, if applicable, the selection of a managing or lead underwriter or
underwriters therefor). If either party does not desire to exercise such a
demand registration right at such time and only three or fewer such demands
remain under the Registration Rights Agreement, then the other party may proceed
only with the consent of the former (which consent shall not be unreasonably
delayed or withheld). With respect to each demand registration in which both
parties are participating, the parties shall request the Company to register a
number of shares equal to the sum of the number of shares each party wishes to
register, and any scale-backs or other reductions in the number of shares
registered shall be
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allocated between the parties pro rata in accordance with their initial
requests. Each party may exercise all incidental registration rights pursuant
to the Registration Rights Agreement independently of the other party.
ARTICLE VII
CHANGE OF CONTROL OF THE COMPANY
--------------------------------
Section 7.1 Joint Action. If the parties shall have the right under the
Relevant Documents to propose any transaction having the goal of obtaining
Control of the Company (a "Control Proposal"), they shall confer promptly to
decide whether (and, if applicable, how) to make such Control Proposal. If both
parties desire to make a Control Proposal, then they must act jointly or not at
all. If one party (the "Bidding Party") desires to make a Control Proposal and
the other party does not, then Bidding Party may proceed only with the consent
of the other party.
Section 7.2 Competing Proposals. Each party hereby agrees, except as
their fiduciary or other statutory duties may otherwise require, not to Transfer
its shares of Class A Stock (or of any Common Stock into which such shares may
be converted pursuant to the Articles) to a Person making a Control Proposal in
competition with any Control Proposal being made by the Bidding Party in
conformity with Section 7.1.
ARTICLE VIII
INDEMNIFICATION
---------------
Section 8.1 Indemnification. Each party (in such capacity, the
"Indemnifying Party") hereby indemnifies, and holds the other party (the
"Indemnified Party") harmless from and against, any and all losses, liabilities,
damages, obligations, deficiencies, payments, costs and expenses (including
without limitation the costs and expenses of any and all actions, suits,
proceedings, demands, assessments, judgments, settlements, and compromises
relating thereto and reasonable attorneys' fees and expenses of investigation in
connection therewith), but excluding indirect, incidental and consequential
damages, damages relating to lost business opportunities and indirect or
intangible losses) (each such non-excluded item an "Indemnifiable Loss")
suffered by the Indemnified Party arising out of, or due to, directly or
indirectly:
(a) any breach of any covenant or agreement to be performed by the
Indemnifying Party under this Agreement;
(b) any breach of any covenant or agreement to be performed by the
Indemnifying Party (whether to be performed
-12-
alone or jointly with the Indemnified Party) in favor of the Company or any
other Person under any of the Relevant Documents; or
(c) any inaccuracy or other breach of any representation or warranty
made by the Indemnifying Party in favor of the Company or any other Person
under any of the Relevant Documents.
Section 8.2 Additional Provisions. The parties shall cooperate in good
faith regarding the defense, settlement and compromise of any third party claims
and the retention of legal counsel with respect thereto. Any claim with respect
to an Indemnifiable Loss made pursuant hereto shall be asserted in writing by
the Indemnified Party to the Indemnifying Party within 30 days of the
Indemnified Party's discovery of such Indemnifiable Loss. Except as provided in
Section 9.8(c), this Article VIII shall be the sole and exclusive remedy of the
parties with respect to any matter covered by Section 8.1. In addition, the
dispute resolution procedures referred to in Section 9.8(b) shall be the sole
and exclusive means for resolving any dispute between the parties with respect
to any matter covered by Section 8.1.
ARTICLE IX
MISCELLANEOUS
-------------
Section 9.1 Termination. (a) This Agreement shall terminate and be of no
further force and effect on the date of the termination of the Investment
Agreement, in the event that the Investment Agreement is terminated in
accordance with Section 10.1 thereof prior to the occurrence of the First
Closing thereunder.
(b) In addition, after the First Closing under the Investment Agreement,
this Agreement shall terminate and be of no further force and effect on the date
on which neither of the parties shall own any shares of Class A Stock; provided
that:
(i) the provisions of Sections 4.2 through 4.6, inclusive, shall
survive until the date, if later, on which the parties shall have
permanently lost their rights to be represented on the Company's Board of
Directors pursuant to ARTICLE FIFTH of the Articles;
(ii) the provisions of Sections 4.1(b), 6.1, 6.3 and 6.4 shall survive
until the date, if later, which is the earlier of (x) the date on which the
Registration Rights Agreement terminates in accordance with its terms and
(y)
-13-
the date on which only one of the parties hereto owns any Voting Securities
of the Company; and
(iii) any right or remedy of a party under this Agreement arising
during or relating to periods prior to such termination, including pursuant
to Article VIII, shall survive such termination.
Section 9.2 Notices. All notices and other communications required or
permitted by this Agreement shall be made in writing, and any such notice or
communication shall be deemed delivered when delivered in person (including by
courier), transmitted by telex or facsimile, or seven days after it has been
sent by air mail, as follows:
If to FT:
0 xxxxx x'Xxxxxxx
00000 Xxxxx Cedex 15
France
Attn: Executive Vice President - International
Tel: (00-0) 0000-0000
Fax: (00-0) 0000-0000
with a copy to:
Debevoise & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
X.X.X.
Attn: Xxxxx Xxxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
If to DT:
Xxxxxxxxxx-Xxxxx-Xxxxx 000
X-00000 Xxxx
Xxxxxxx
Attn: Chief Executive Officer
Tel: (00-000) 000-0000
Fax: (00-000) 000-0000
-14-
with a copy to:
Xxxxx, Xxxxx & Xxxxx
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
X.X.X.
Attn: Xxxxxx Xxxx, 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 9.2 of any change in their respective addresses;
provided that a notice of change of address shall not be deemed to have been
given until actually received by the addressee. Communications by telex or
facsimile also shall be sent concurrently by mail, but shall in any event be
effective as stated above.
Section 9.3 Waiver, Amendment, etc. This Agreement may not be amended or
supplemented, and no waivers of or consents to departures from the provisions
hereof shall be effective, unless set forth in a writing signed by, and
delivered to, each party. No failure or delay of any party in exercising any
power or right under this Agreement will operate as a waiver thereof, nor will
any single or partial exercise of any right or power, or any abandonment or
discontinuance of steps to enforce such right or power, preclude any other or
further exercise thereof or the exercise of any other right or power.
Section 9.4 No Partnership. This Agreement is not intended, nor should
anything herein be construed, to create the relationship of partners, principal
and agent, employer and employee, or other fiduciary relationship between the
parties or among the parties and the Company.
Section 9.5 Binding Agreement; Transfers; No Third Party Beneficiaries.
This Agreement will be binding upon and inure to the benefit of the parties
hereto and their successors and permitted assigns. Except as set forth herein
and by operation of law, no party to this Agreement may assign or delegate all
or any portion of its rights, obligations or liabilities under this Agreement
without the prior written consent of each other party to this Agreement.
Nothing expressed or implied herein is intended or will be construed to confer
upon or to give to any third party any rights or remedies by virtue hereof,
other than with respect to Qualified Subsidiaries pursuant to Section 9.7.
Section 9.6 No Assignment of Certain Purchase Rights. No party shall,
without the prior written consent of the other party, assign (other than to its
Qualified Subsidiaries or any Qualified Stock Purchaser or Qualified LD
Purchaser, as the case
-15-
may be) any right held by it to purchase shares of Class A Stock or other Voting
Securities of the Company or any right held by it to purchase Specified Long
Distance Assets.
Section 9.7 Qualified Subsidiaries. Each party shall cause its Qualified
Subsidiaries to take such action as may be required to ensure such party's
compliance herewith and with the Relevant Documents. To the extent permitted by
the Relevant Documents, each party may assign to any of its Qualified
Subsidiaries any right of such party pursuant to the Relevant Documents to
acquire or dispose of Class A Stock or other Voting Securities of the Company or
Specified Long Distance Assets; provided that such Qualified Subsidiary shall
have executed and delivered an assumption agreement in form and substance
reasonably satisfactory to the other party pursuant to which such Qualified
Subsidiary shall be bound by the terms of this Agreement; and provided, further,
that, notwithstanding the foregoing, the assigning party shall remain liable for
the full and timely performance of all of its obligations hereunder. Each party
agrees to act as agent for each of its Qualified Subsidiaries in connection with
the receipt or giving of any and all notices or approvals under this Agreement
and the Relevant Documents.
Section 9.8 Governing Law; Dispute Resolution; Equitable Relief.
(a) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York (regardless of the
laws that might otherwise govern under applicable principles of conflicts
of law).
(b) Dispute Resolution. All disputes under and all disagreements as
to the interpretation and effect of this Agreement shall be subject to the
exclusive remedy of arbitration. For purposes hereof, the procedures set
forth in Article 21 of the Joint Venture Agreement shall apply, mutatis
mutandis.
(c) Equitable Relief. Each party agrees that money damages would not
be a sufficient remedy for the other parties hereto for any breach of this
Agreement by it, and that in addition to all other remedies that may be
available to the arbitral tribunal, the arbitral tribunal may order
specific performance and injunctive or other equitable relief as a remedy
for any such breach. Each party agrees not to oppose the granting of such
relief, and to waive any requirement for the securing or posting of any
bond in connection with such remedy.
Section 9.9 Severability. The invalidity or unenforceability of any
provision hereof in any jurisdiction will
-16-
not affect the validity or enforceability of the remainder hereof in that
jurisdiction or the validity or enforceability of this Agreement, including that
provision, in any other jurisdiction. To the extent permitted by applicable
law, each party waives any provision of law that renders any provision hereof
prohibited or unenforceable in any respect. If any provision of this Agreement
is held to be unenforceable for any reason, it shall be adjusted rather than
voided, if possible, in order to achieve the intent of the parties to this
Agreement to the extent possible.
Section 9.10 Headings; Counterparts. The headings in this Agreement are
for convenience of reference only and will not affect the construction of any
provision hereof. This Agreement may be executed in one or more counterparts,
each of which when so executed and delivered will be deemed an original but all
of which will constitute one and the same Agreement.
Section 9.11 Entire Agreement. This Agreement, together with the
agreements and instruments referred to herein, embodies the entire agreement and
understanding of the parties hereto in respect of the subject matter contained
herein. This Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter.
Section 9.12 Language of Agreement. The parties have negotiated and
drafted this Agreement and the Memorandum of Understanding, dated June 14, 1994,
among each of the parties hereto and the Company, in the English language, and
have prepared successive drafts and the definitive texts of such Memorandum of
Understanding and this Agreement in the English language. For purposes of
complying with the loi n 94-665 du aout 1994 relative a l'emploi de la langue
francaise, the parties have prepared a French version of the Agreement, which
French version was executed and delivered simultaneously with the execution and
delivery of the English version hereof, such English version having likewise
been executed and delivered. The parties deem the French and English versions
of this Agreement to be equally authoritative.
-17-
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first above written.
FRANCE TELECOM
By: /s M. Xxxxxxx Xxxxxxxx
----------------------------
Name:
Title:
DEUTSCHE TELEKOM AG
By: /s Dr. Xxx Xxxxxx
----------------------------
Name:
Title:
-18-
APPENDIX A
GLOSSARY OF TERMS
Term Where Defined
---- -------------
Affiliate Stockholders' Agreement
Agreement Preamble to this Agreement
Amendment Investment Agreement
Applicable Law Stockholders' Agreement
Articles Stockholders' Agreement
Beneficially Own Stockholders' Agreement
Bidding Party Section 7.1 of this Agreement
Bylaws Stockholders' Agreement
Bylaws Amendment Investment Agreement
Class A Action Stockholders' Agreement
Class A Common Stock Investment Agreement
Class A Directors Articles
Class A Preference Stock Investment Agreement
Class A Provisions Articles
Class A Stock Second Recital to this
Agreement
Committed Percentage Stockholders' Agreement
Common Stock Articles
Company First Recital to this Agreement
Conversion Price Articles
Control Proposal Section 7.1 of this Agreement
A-1
Corporate Documents Third Recital to this Agreement
DT Preamble to the Agreement
Elective Shares Section 2.1 of this Agreement
Fix Articles
FT Preamble to this Agreement
Government Approvals Stockholders' Agreement
Indemnifiable Loss Section 8.1 of this Agreement
Indemnified Party Section 8.1 of this Agreement
Indemnifying Party Section 8.1 of this Agreement
Initial Issuance Date Investment Agreement
Investment Agreement Second Recital to this
Agreement
Investment Completion Date Investment Agreement
Investment Documents Third Recital to this Agreement
Investor Confidentiality Agreement Stockholders' Agreement
Joint Venture Joint Venture Agreement
Joint Venture Agreement First Recital to this Agreement
LD Option Period Stockholders' Agreement
LD Sale Notice Stockholders' Agreement
Market Purchase Period Section 3.2(b) of this
Agreement
Market Shares Section 3.3 of this Agreement
A-2
Minimum Holding Termination Date Section 3.1 of this Agreement
Offer Notice Section 6.1 of this Agreement
Offeree Party Section 6.1 of this Agreement
Person Stockholders' Agreement
Qualified LD Purchaser Stockholders' Agreement
Qualified Stock Purchaser Stockholders' Agreement
Qualified Subsidiary Stockholders' Agreement
Registration Rights Agreement Stockholders' Agreement
Relevant Documents Third Recital to this Agreement
Rights Agreement Stockholders' Agreement
Selling Party Section 6.1 of this Agreement
Specified Long Distance Assets Stockholders' Agreement
Standstill Agreement Stockholders' Agreement
Stockholders' Agreement Articles
Subsequent Issuance Date Investment Agreement
Third Party Approvals Stockholders' Agreement
Transfer Stockholders' Agreement
Transfer Restrictions Stockholders' Agreement
Voting Power Standstill Agreement
Voting Securities Stockholders' Agreement
A-3
