Exhibit 4(g)
EXECUTION COPY
PLEDGE AGREEMENT
DATED AS OF AUGUST 10, 2001
AMONG
SPRINT CORPORATION,
BANK ONE, NATIONAL ASSOCIATION,
AS COLLATERAL AGENT, CUSTODIAL AGENT
AND SECURITIES INTERMEDIARY
AND
BANK ONE, NATIONAL ASSOCIATION,
AS PURCHASE CONTRACT AGENT
PLEDGE AGREEMENT, dated as of August 10, 2001 (this "Agreement"), among
Sprint Corporation, a Kansas corporation (the "Company"), Bank One, National
Association, not individually but solely as collateral agent (in such capacity,
together with its successors in such capacity, the "Collateral Agent"), as
custodial agent (in such capacity, together with its successors in such
capacity, the "Custodial Agent") and as "securities intermediary" as defined in
Section 8-102(a)(14) of the Code (as defined herein) (in such capacity, together
with its successors in such capacity, the "Securities Intermediary"), and Bank
One, National Association, not individually but solely as purchase contract
agent and as attorney-in-fact of the Holders (as defined in the Purchase
Contract Agreement) from time to time of the Securities (as hereinafter defined)
(in such capacity, together with its successors in such capacity, the "Purchase
Contract Agent") under the Purchase Contract Agreement (as hereinafter defined).
RECITALS
WHEREAS, the Company and the Purchase Contract Agent are parties to the
Purchase Contract Agreement, dated as of the date hereof (as modified and
supplemented and in effect from time to time, the "Purchase Contract
Agreement"), pursuant to which there may be issued 60,000,000 Equity Units of
the Company (or 69,000,000 Equity Units if the Underwriters' overallotment
option is exercised in full) (the "Equity Units"), having a stated amount of $25
(the "Stated Amount") per Equity Unit; and
WHEREAS, the Equity Units will initially consist of 60,000,000 (or
69,000,000 if the underwriters' overallotment option is exercised in full with
respect to the Corporate Units) units (referred to as "Corporate Units") with a
stated amount, per Corporate Unit, equal to the Stated Amount. Each Corporate
Unit will initially consist of (a) a stock purchase contract (the "Purchase
Contract") under which the holder will purchase from the Company not later than
August 17, 2004 (the "Purchase Contract Settlement Date"), for an amount of cash
equal to the Stated Amount, a number of shares of PCS Common Stock, Series 1,
$1.00 par value per share (the "PCS Common Stock"), of the Company equal to the
Settlement Rate (as defined below) and (b) either beneficial ownership of a Note
(as defined below) or, following a Successful Initial Remarketing, Successful
Subsequent Remarketing or a Tax Event Redemption, the Applicable Ownership
Interest of the Treasury Portfolio; and
WHEREAS, if Holders of Corporate Units substitute collateral as
contemplated by Section 4.1, each unit created
thereby (referred to as "Treasury Units" and, together with the Corporate Units,
the "Securities") will initially consist of (a) a Purchase Contract under which
the Holder will purchase from the Company on the Purchase Contract Settlement
Date, for an amount in cash equal to the Stated Amount, a number of shares of
PCS Common Stock of the Company, equal to the Settlement Rate, and (b) a 1/40,
or 2.5%, undivided beneficial interest in a zero-coupon U.S. Treasury Security
(CUSIP No. 000000XX0) having a principal amount at maturity equal to $1,000 and
maturing on August 15, 2004 (the "Treasury Securities"); and
WHEREAS, pursuant to the terms of the Indenture (as defined below) Sprint
Capital will issue $1,500,000,000 aggregate principal amount of 6.00% Senior
Notes due 2006 fully and unconditionally guaranteed by the Company (or
$1,725,000,000 if the Underwriters' overallotment option is exercised) (the
"Notes"), each having a principal amount per Note equal to $25; and
WHEREAS, pursuant to the terms of the Purchase Contract Agreement and the
Purchase Contracts, the Holders, from time to time, of the Securities have
irrevocably authorized the Purchase Contract Agent, as attorney-in-fact of such
Holders, among other things, to execute and deliver this Agreement on behalf of
such Holders and to grant the pledge provided hereby of the Notes, any
Applicable Ownership Interest in the Treasury Portfolio and the Treasury
Securities to secure each Holder's obligations under the related Purchase
Contract, as provided herein and subject to the terms hereof; and
WHEREAS, upon such pledge, the Pledged Notes or the Applicable Ownership
Interests in the Treasury Portfolio, as the case may be, and the Pledged
Treasury Securities will be beneficially owned by the Holders but will be owned
of record by the Purchase Contract Agent subject to the Pledge hereunder.
NOW THEREFORE, in consideration of the foregoing premises, the Company, the
Collateral Agent, the Securities Intermediary, the Custodial Agent and the
Purchase Contract Agent, on its own behalf and as attorney-in-fact of the
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Holders from time to time of the Securities, agree as follows:
ARTICLE I
DEFINITIONS
For all purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(b) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision;
(c) initially capitalized terms used but not other wise defined herein
have the meanings assigned to such terms in the Purchase Contract Agreement; and
(d) the following terms have the meanings assigned
to them in this Section 1(d):
"Agreement" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more agreements supplemental
hereto entered into pursuant to the applicable provisions hereof.
"Bankruptcy Code" means title 11 of the United States Code, or any other
law of the United States that from time to time provides a uniform system of
bankruptcy laws.
"Business Day" means any day other than a Saturday, a Sunday or any other
day on which banking institutions and trust companies in Xxx Xxxx Xxxx (xx xxx
Xxxxx xx Xxx Xxxx) are permitted or required by any applicable law to close.
"Cash" means any coin or currency of the United States as at the time shall
be legal tender for payment of public and private debts.
"Code" has the meaning specified in Section 6.1 hereof.
"Collateral" has the meaning specified in Section 2.1 hereof.
"Collateral Account" means the securities account (number 6800057200)
maintained at Bank One Trust Company, N.A. in the name "Bank One, National
Association, as
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Purchase Contract Agent on behalf of the holders of certain securities of
Sprint Corporation, Collateral Account subject to the security interest of
Bank One, National Association, as Collateral Agent, for the benefit of Sprint
Corporation, as pledgee" and any successor account.
"Collateral Agent" has the meaning specified in the first paragraph of this
instrument.
"Company" means the Person named as the "Company" in the first paragraph of
this instrument until a successor shall have become such, and thereafter
"Company" shall mean such successor.
"Corporate Units" has the meaning specified in the Recitals.
"Custodial Agent" has the meaning specified in the first paragraph of this
instrument.
"Equity Units" has the meaning specified in the Recitals.
"Intermediary" means any entity that in the ordinary course of its business
maintains securities accounts for others and is acting in that capacity.
"Notes" has the meaning specified in the Recitals.
"Note Trustee" means Bank One, National Association, a national banking
association, as trustee under the Indenture until a successor is appointed
thereunder, and thereafter means such successor trustee.
"PCS Common Stock" means the PCS Common Stock, Series 1, $1.00 par value
per share, of the Company, or (i) if all outstanding shares of PCS Common Stock
have been converted into shares of FON Common Stock, Series 1, par value $2.00
per share (the "FON Common Stock"), pursuant to the Company's articles of
incorporation, the FON Common Stock or (ii) if all outstanding shares of PCS
Common Stock have been redeemed in exchange for shares of common stock of one
or more wholly-owned subsidiaries of the Company (the "Subsidiary Common Stock")
pursuant to Section 7.2 of Article Sixth of the Company's articles of
incorporation, the Subsidiary Common Stock, or (iii) or any other successor
securities as contemplated by the Purchase Contract
Agreement.
"Permitted Investments" means any one of the following which shall mature
not later than the next succeeding
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Business Day (i) any evidence of indebtedness with an original maturity of 365
days or less issued, or directly and fully guaranteed or insured, by the United
States of America or any agency or instrumentality thereof (provided that the
full faith and credit of the United States of America is pledged in support
thereof or such indebtedness constitutes a general obligation of the United
States of America); (ii) deposits, certificates of deposit or acceptances with
an original maturity of 365 days or less of any institution which is a member
of the Federal Reserve System having combined capital and surplus and undivided
profits of not less than US $200.0 million at the time of deposit; (iii)
investments with an original maturity of 365 days or less of any Person that is
fully and uncondi tionally guaranteed by a bank referred to in clause (ii);
(iv) investments in commercial paper, other than commercial paper issued by the
Company or its affiliates, of any corporation incorporated under the laws of
the United States or any State thereof, which commercial paper has a rating at
the time of purchase at least equal to "A-1" by Standard & Poor's Ratings
Services ("S&P") or at least equal to "P-1" by Xxxxx'x Investors Service, Inc.
("Moody's"); and (v) investments in money market funds registered under the
Investment Company Act of 1940, as amended, rated in the highest applicable
rating category by S&P or Moody's.
"Person" and "person" means any individual, corpora tion, limited liability
company, partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political sub
division thereof.
"Pledge" has the meaning specified in Section 2.1 hereof.
"Pledged Notes" has the meaning specified in Section 2.1 hereof.
"Pledged Treasury Securities" has the meaning specified in Section 2.1
hereof.
"Primary Treasury Dealer" means a primary U.S. govern ment securities
dealer in The City of New York.
"Proceeds" means all interest, dividends, cash, instruments, securities,
financial assets (as defined in Section 8-102(a)(9) of the Code) and other
property from time to time received, receivable or otherwise distributed upon
the sale, exchange, maturity, collection or disposition of the Collateral or any
proceeds thereof.
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"Purchase Contract" has the meaning specified in the Recitals.
"Purchase Contract Agent" has the meaning specified in the first paragraph
of this Agreement.
"Purchase Contract Agreement" has the meaning specified in the Recitals.
"Purchase Contract Settlement Date" has the meaning specified in the
Recitals.
"Securities" has the meaning specified in the Recitals.
"Securities Intermediary" has the meaning specified in the first paragraph
of this Agreement.
"Security Entitlement" has the meaning set forth in Section 8-102(a)(17) of
the Code.
"Separate Notes" means any Notes that are not Pledged Notes.
"Supplemental Remarketing Agreement" means the Supplemental Remarketing
Agreement, as defined in the Remarketing Agreement.
"Tax Event Redemption Date" means the date upon which a Tax Event
Redemption is to occur.
"TRADES" means the Treasury/Reserve Automated Debt Entry System maintained
by the Federal Reserve Bank of New York pursuant to the TRADES Regulations.
"TRADES Regulations" means the regulations of the United States Department
of the Treasury, published at 31 C.F.R. Part 357, as amended from time to time.
Unless other wise defined herein, all terms defined in the TRADES Regulations
are used herein as therein defined.
"Transfer" means, except as otherwise expressly provided herein, with
respect to the Collateral and in accordance with the instructions of the
Collateral Agent, the Purchase Contract Agent or the Holder, as applicable:
(i) in the case of Collateral consisting of securities which cannot be
delivered by book-entry or which the parties agree are to be delivered in
physical form, delivery in appropriate physical form to the recipient
accompanied by any duly executed instruments of transfer, assignments in
blank, transfer tax stamps
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and any other documents necessary to constitute a legally valid transfer
to the recipient;
(ii) in the case of Collateral consisting of securities maintained in
book-entry form by causing a "securities intermediary" (as defined in
Section 8-102(a)(14) of the Code) to (i) credit a "security entitlement"
(as defined in Section 8-102(a)(17) of the Code) with respect to such
securities to a "securities account" (as defined in Section 8-501(a) of the
Code) maintained by or on behalf of the recipient and (ii) to issue a
confirmation to the recipient with respect to such credit. In the case of
Collateral to be delivered to the Collateral Agent, the Securities
Intermediary shall be the securities intermediary and the securities
account shall be the Collateral Account.
"Treasury Securities" has the meaning specified in the Recitals.
"Value" with respect to any item of Collateral on any date means, as to (i)
a Note, the principal amount thereof, (ii) Cash, the face amount thereof and
(iii) Treasury Securities, the aggregate principal amount thereof at maturity.
ARTICLE II
PLEDGE; CONTROL AND PERFECTION
SECTION 2.1 The Pledge. (a) The Holders from time to time as
beneficial owners of the Collateral (as defined below) acting through the
Purchase Contract Agent, as their attorney-in-fact, and the Purchase Contract
Agent, as nominal owner of the Collateral, each hereby pledge and grant to the
Collateral Agent, for the benefit of the Company, as collateral security for the
performance when due by such Holders of their respective obligations under the
related Purchase Contracts, a security interest in all of the right, title and
interest of the Purchase Contract Agent and such Holders (i) in the Notes
constituting a part of the Securities and any Treasury Securities delivered in
exchange for any Notes (or, if applicable, the Applicable Ownership Interest in
the Treasury Portfolio), any Notes (or, if applicable, the Applicable Ownership
Interest in the Treasury Portfolio) delivered in exchange for any Treasury
Securities, in accordance with Article IV hereof, in each case that have been
Transferred to or received by the Collateral Agent and not released by the
Collateral Agent to such Holders under the provisions of this Agreement; (ii) in
payments made by Holders pursuant to Section 4.4; (iii) in
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the Collateral Account and all securities, financial assets, Cash and other
property credited thereto and all Security Entitlements related thereto; (iv)
in the Treasury Portfolio purchased on behalf of the Holders of Corporate Units
by the Collateral Agent upon the occurrence of a Successful Initial Remarketing,
Successful Subsequent Remarketing or a Tax Event Redemption as provided in
Article VI, or otherwise, and (v) all Proceeds of the foregoing (all of the
foregoing, collectively, the "Collateral").
Prior to or concurrently with the execution and delivery of this Agreement,
the Purchase Contract Agent, on behalf of the initial Holders of the Securities,
shall cause all Notes comprising a part of the Corporate Units to be Transferred
to the Collateral Agent for the benefit of the Company. Such Notes shall be
Transferred by physically delivering such Notes to the Securities Intermediary
indorsed in blank (or accompanied by a stock or bond power indorsed in blank)
and causing the Securities Intermediary to credit the Collateral Account with
such Notes such that security entitlements with respect to such Notes are
created in and credited to the Collateral Account. In the event a Holder of
Corporate Units so elects, such Holder may Transfer Treasury Securities to the
Collateral Agent for the benefit of the Company as provided in Section 4.1
hereof in exchange for the release by the Collateral Agent on behalf of the
Company of Notes or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, with an aggregate principal amount
equal to the aggregate principal amount of the Treasury Securities so
Transferred, in the case of Notes, or with an appropriate Applicable Ownership
Interest (as specified in clause (i) of the definition of such term) of the
Treasury Portfolio equal to the aggregate principal amount of the Treasury
Securities so transferred, in the event that a Successful Initial Remarketing,
Successful Subsequent Remarketing or a Tax Event Redemption has occurred, to the
Purchase Contract Agent on behalf of such Holder. In the event that a Holder of
Treasury Units so elects, such Holder may Transfer Notes or the appropriate
Applicable Ownership Interest of the Treasury Portfolio to the Collateral Agent
for the benefit of the Company as provided in Section 4.2 hereof in exchange for
the release by the Collateral Agent on behalf of the Company of Treasury
Securities with an aggregate principal amount at maturity equal to the aggregate
principal amount of the Notes or the appropriate Applicable Ownership Interest
(as specified in clause (i) of the definition of such term) of the Treasury
Portfolio so transferred to the Purchase Contract Agent on behalf of such
Holder. Treasury Securities and the appropriate Applicable Ownership Interest of
the Treasury Portfolio, as applicable, shall be
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Transferred to the Collateral Account maintained by the Collateral Agent at the
Securities Intermediary by book-entry transfer to the Collateral Account in
accordance with the TRADES Regulations and other applicable law and by the
notation by the Securities Intermediary on its books that a Security Entitlement
with respect to such Treasury Securities or appropriate Applicable Ownership
Interest of the Treasury Portfolio, has been credited to the Collateral Account.
(b) For purposes of perfecting the Pledge under applicable law, including,
to the extent applicable, the TRADES Regulations or the Uniform Commercial Code
as adopted and in effect in any applicable jurisdiction, the Collateral Agent
shall be the agent of the Company as provided herein. The pledge provided in
this Section 2.1 is herein referred to as the "Pledge" and the Notes or Treasury
Securities subject to the Pledge, excluding any Notes that are delivered
pursuant to Section 6.2 hereof or Treasury Securities released from the Pledge
as provided in Article IV hereof, are hereinafter referred to as "Pledged Notes"
or the "Pledged Treasury Securities," respectively. Subject to the Pledge and
the provisions of Section 2.2 hereof, the Holders from time to time shall have
full beneficial ownership of the Collateral. Whenever directed by the Collateral
Agent acting on behalf of the Company, the Securities Intermediary shall have
the right to reregister the Notes or any other securities held in physical form
in its name.
Except as may be required in order to release Notes in connection with a
Holder's election to convert its investment from a Corporate Unit to a Treasury
Unit, or except as otherwise required to release Notes as specified herein,
neither the Collateral Agent nor the Securities Intermediary shall relinquish
physical possession of any certificate evidencing a Note prior to the
termination of this Agreement, except Notes may be held in any clearing
corporation in an account including only assets of customers of the Collateral
Agent or Securities Intermediary. If it becomes necessary for the Securities
Intermediary to relinquish physical possession of a certificate in order to
release a portion of the Notes evidenced thereby from the Pledge, the Securities
Intermediary shall not relinquish such physical possession unless it shall first
be satisfied that it will be able to obtain physical possession of a replacement
certificate evidencing any Notes remaining subject to the Pledge hereunder
registered to it or indorsed in blank (or accompanied by a stock or bond power
indorsed in blank) within fifteen days of the date it relinquished possession.
The Securities Intermediary shall promptly
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notify the Company and the Collateral Agent of the Securities Intermediary's
failure to obtain possession of any such replacement certificate as required
hereby.
SECTION 2.2 Control and Perfection. (a) In connection with the Pledge
granted in Section 2.1, and subject to the other provisions of this Agreement,
the Holders from time to time acting through the Purchase Contract Agent, as
their attorney-in-fact, and the Purchase Contract Agent each hereby authorize
and direct the Securities Intermediary (without the necessity of obtaining the
further consent of the Purchase Contract Agent or any of the Holders), and the
Securities Intermediary agrees, to comply with and follow any instructions and
entitlement orders (as defined in Section 8-102(a)(8) of the Code) that the
Collateral Agent on behalf of the Company may give in writing with respect to
the Collateral Account, the Collateral credited thereto and any Security
Entitlements with respect to any thereof, it being the express intention of the
Holders acting through the Purchase Contract Agent, as their attorney-in-fact,
the Purchase Contract Agent, the Company, the Collateral Agent and the
Securities Intermediary that: (i) the Collateral Agent have "control" (within
the meaning of Sections 8-106 and 9-106 of the Code and the comparable
provisions of the Uniform Commercial Code as in effect in any other
jurisdiction) of the Collateral Account and all security entitlements,
investment property and financial assets from time to time held therein and (ii)
that the security interests created hereby be perfected by virtue of such
control. Such instructions and entitle ment orders may, without limitation,
direct the Securities Intermediary to transfer, redeem, sell, liquidate, assign,
deliver or otherwise dispose of the Notes, the Treasury Securities, the Treasury
Portfolio, and any Security Entitlements with respect thereto and to pay and
deliver any income, proceeds or other funds derived therefrom to the Company.
The Holders from time to time acting through the Purchase Contract Agent hereby
further authorize and direct the Collateral Agent, as agent of the Company, to
itself issue instructions and entitlement orders, and to otherwise take action,
with respect to the Collateral Account, the Collateral credited thereto and any
security entitlements with respect thereto, pursuant to the terms and provisions
hereof, all without the necessity of obtaining the further consent of the
Purchase Contract Agent or any of the Holders. The Collateral Agent shall be the
agent of the Company and shall act as directed in writing by the Company.
Without limiting the generality of the foregoing, the Collateral Agent shall
issue entitlement orders to the Securities Intermediary when and as directed by
the Company.
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(b) The Securities Intermediary hereby confirms and agrees that: (i) all
securities or other property underlying any financial assets credited to the
Collateral Account shall be registered in the name of the Securities
Intermediary, indorsed to the Securities Intermediary or in blank or credited to
another collateral account maintained in the name of the Securities Intermediary
and in no case will any financial asset credited to the Collateral Account be
registered in the name of the Purchase Contract Agent, the Collateral Agent, the
Company or any Holder, payable to the order of, or specially indorsed to, the
Purchase Contract Agent, the Collateral Agent, the Company or any Holder except
to the extent the foregoing have been specially indorsed to the Securities
Intermediary or in blank; (ii) all property delivered to the Securities
Intermediary pursuant to this Pledge Agreement (including, without limitation,
any Notes, the Treasury Portfolio or Treasury Securities) will be promptly
credited to the Collateral Account; (iii) the Collateral Account is an account
to which financial assets are or may be credited, and the Securities
Intermediary shall, subject to the terms of this Agreement, treat the Purchase
Contract Agent as entitled to exercise the rights of any financial asset
credited to the Collateral Account; (iv) the Securities Intermediary has not
entered into, and until the termination of this Agreement will not enter into,
any agreement with any other person relating to the Collateral Account and/or
any financial assets credited thereto pursuant to which it has agreed to comply
with entitlement orders (as defined in Section 8-102(a)(8) of the Code) of such
other person; and (v) the Securities Intermediary has not entered into, and
until the termination of this Agreement will not enter into, any agreement with
the Company, the Collateral Agent or the Purchase Contract Agent purporting to
limit or condition the obligation of the Securities Intermediary to comply with
entitlement orders as set forth in this Section 2.2 hereof.
(c) The Securities Intermediary hereby agrees that each item of property
(whether investment property, financial asset, security, instrument or cash)
credited to the Collateral Account shall be treated as a "financial asset"
within the meaning of Section 8-102(a)(9) of the Code.
(d) In the event of any conflict between this Agreement (or any portion
thereof) and any other agreement now existing or hereafter entered into, the
terms of this Agreement shall prevail.
(e) The Purchase Contract Agent hereby irrevocably constitutes and appoints
the Collateral Agent and the Company, with full power of substitution, as the
Purchase
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Contract Agent's attorneys-in-fact to take on behalf of, and in the
name, place and stead of, the Purchase Contract Agent and the Holders, any
action necessary or desirable to perfect and to keep perfected the security
interest in the Collateral referred to in Section 2.1. The grant of such
power-of-attorney shall not be deemed to require of the Collateral Agent any
specific duties or obligations not otherwise assumed by the Collateral Agent
hereunder.
ARTICLE III
DISTRIBUTIONS ON PLEDGED COLLATERAL
So long as the Purchase Contract Agent is the registered owner of the
Pledged Notes, it shall receive all payments thereon. If the Pledged Notes are
reregistered, such that the Collateral Agent becomes the registered holder, all
payments of principal on the Pledged Notes or, if applicable, the appropriate
Applicable Ownership Interest (as specified in clause (i) of the definition of
such term) of the Treasury Portfolio, or interest payments on the Pledged Notes
or on the appropriate Applicable Ownership Interest (as specified in clause (ii)
of the definition of such term) of the Treasury Portfolio, as the case may be,
and all payments of the principal of, or cash distributions on, any Pledged
Treasury Securities received by the Collateral Agent that are properly payable
hereunder shall be paid by the Collateral Agent by wire transfer in same day
funds:
(i) in the case of (A) interest payments with respect to the Pledged
Notes or the appropriate Applicable Ownership Interest (as specified in clause
(ii) of the definition of such term) of the Treasury Portfolio, as the case may
be, and (B) any payments of principal or, if applicable, the appropriate
Applicable Ownership Interest (as specified in clause (i) of the definition of
such term) of the Treasury Portfolio with respect to any Notes or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, that have been released from the Pledge pursuant to Section 4.1 or 4.3
hereof, to the Purchase Contract Agent, for the benefit of the relevant Holders
of Securities, to the account designated by the Purchase Contract Agent for such
purpose, no later than 2:00 p.m., New York City time, on the Business Day such
payment is received by the Collateral Agent (provided that in the event such
payment is received by the Collateral Agent on a day that is not a Business Day
or after 12:30 p.m., New York City time, on a Business Day, then such
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payment shall be made no later than 10:30 a.m., New York City time, on the next
succeeding Business Day);
(ii) in the case of any principal payments with respect to any
Treasury Securities that have been released from the Pledge pursuant to Section
4.2 or 4.3 hereof, to the Purchase Contract Agent, for the benefit of the
Holders of the Treasury Units, to the accounts designated by the Purchase
Contract Agent in writing for such purpose, no later than 2:00 p.m., New York
City time, on the Business Day such payment is received by the Collateral Agent
(provided that in the event such payment is received by the Collateral Agent on
a day that is not a Business Day or after 12:30 p.m., New York City time, on a
Business Day, then such payment shall be made no later than 10:30 a.m., New York
City time, on the next succeeding Business Day); and
(iii) in the case of payments of the Proceeds of any Pledged Notes or
the appropriate Applicable Ownership Interest (as specified in clause (i) of the
definition of such term) of the Treasury Portfolio, as the case may be, or the
Proceeds of any Pledged Treasury Securities, to the Company on the Purchase
Contract Settlement Date to the extent of the Purchase Price in accordance with
the procedure set forth in Section 4.6(a) or 4.6(b) hereof, in full satisfaction
of the respective obligations of the Holders under the related Purchase
Contracts and, to the extent such Proceeds exceed the Purchase Price, to the
Purchase Contract Agent for the benefit of the Holders.
All payments received by the Purchase Contract Agent as provided in
this Article III shall be applied by the Purchase Contract Agent pursuant to the
provisions of the Purchase Contract Agreement. If, notwithstanding the
foregoing, the Purchase Contract Agent shall receive any payments of the
principal amount of the Note or, if applicable, the appropriate Applicable
Ownership Interest (as specified in clause (i) of the definition of such term)
on account of any Pledged Note or the appropriate Applicable Ownership Interest
of the Treasury Portfolio, as applicable, that, at the time of such payment, is
subject to the Pledge, or a Holder of a Treasury Unit shall receive any payments
of principal on account of any Treasury Securities that, at the time of such
payment, are Pledged Treasury Securities, the Purchase Contract Agent or such
Holder shall hold the same as trustee of an express trust for the benefit of the
Company (and promptly deliver the same over to the Company) for application to
the obligations of the Holders under the related Purchase Contracts, and the
Holders shall acquire no
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right, title or interest in any such payments of principal so received.
ARTICLE IV
SUBSTITUTION, RELEASE, REPLEDGE AND SETTLEMENT OF NOTES
SECTION 4.1 Substitution for Notes and the Creation of Treasury Units.
At any time on or prior to the fifth Business Day immediately preceding the
Purchase Contract Settlement Date (or on or prior to the second Business Day
immediately preceding the Purchase Contract Settlement Date, if a Tax Event
Redemption or Successful Remarketing has occurred), a Holder of Corporate Units
shall have the right to substitute Treasury Securities for the Pledged Notes
(or, if a Tax Event Redemption or Successful Remarketing has occurred, the
appropriate Applicable Ownership Interest in the Treasury Portfolio) securing
such Holder's obligations under the Purchase Contract(s) compris ing a part of
its Corporate Units in integral multiples of 40 Corporate Units by (a)
Transferring to the Collateral Agent Treasury Securities having a Value equal to
the aggregate principal amount of the Pledged Notes (or appropriate Applicable
Ownership Interest (as defined in clause (i) of the definition of such term) in
the Treasury Portfolio as the case may be), to be released and (b) trans ferring
the related Corporate Units to the Purchase Contract Agent, accompanied by a
notice, substantially in the form of Exhibit B hereto, to the Purchase Contract
Agent stating that such Holder has Transferred the relevant Treasury Securities
to the Collateral Agent pursuant to clause (a) above (stating the Value of the
Treasury Securities Transferred by such Holder) and requesting that the Purchase
Contract Agent instruct the Collateral Agent to release from the Pledge the
Pledged Notes or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, related to such Corporate Units. The Purchase
Contract Agent shall instruct the Collateral Agent in the form provided in
Exhibit A; provided, however, that if a Tax Event Redemption or Successful
Remarketing has occurred and the Treasury Portfolio has become a component of
the Corporate Units, Holders of Corporate Units may make such substitution only
in integral multiples of 8,000 Corporate Units at any time on or prior to the
second Business Day immediately preceding the Purchase Contract Settlement Date.
Upon receipt of Treasury Securities from a Holder of Corporate Units and the
related instruction from the Purchase Contract Agent, the Collateral Agent shall
release the Pledged Notes or the appropriate Applicable Ownership
14
Interest of the Treasury Portfolio, as the case may be, and shall promptly
Transfer to the securities account specified by the Purchase Contract Agent
such Pledged Notes or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, free and clear of any lien, pledge or
security interest created hereby. All items Transferred and/or substituted by
any Holder pursuant to this Section 4.1, Section 4.2 or any other Section of
this Agreement shall be Transferred and/or substituted free and clear of all
liens, claims and encumbrances.
SECTION 4.2 Substitution of Treasury Securities and the Recreation of
Corporate Units. At any time on or prior to the fifth Business Day immediately
preceding the Purchase Contract Settlement Date (or on or prior to the second
Business Day immediately preceding the Purchase Contract Settlement Date, if a
Tax Event Redemption or Successful Remarketing has occurred), a Holder of
Treasury Units shall have the right to recreate Corporate Units in integral
multiples of 40 Corporate Units by (a) Transferring to the Collateral Agent
Notes having a Value equal to the Value of the Pledged Treasury Securities to be
released (or the appropriate Applicable Ownership Interest of the Treasury
Portfolio with the Applicable Ownership Interest (as defined in clause (i) of
the definition of such term) having a Value equal to the Value of the Pledged
Treasury Securities to be released) and (b) delivering the related Treasury
Units to the Purchase Contract Agent, accompanied by a notice, substantially in
the form of Exhibit B hereto, to the Purchase Contract Agent stating that such
Holder has transferred the relevant amount of Notes (or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be) to
the Collateral Agent pursuant to clause (a) above and requesting that the
Purchase Contract Agent instruct the Collateral Agent to release from the Pledge
the Pledged Treasury Securities underlying such Treasury Units. The Purchase
Contract Agent shall instruct the Collateral Agent in the form provided in
Exhibit A; provided, however, that if a Tax Event Redemption or Successful
Remarketing has occurred and the Treasury Portfolio has become a component of
the Corporate Units, Holders of Treasury Units may make such substitution only
in integral multiples of 8,000 Treasury Units, at any time on or prior to the
second Business Day immediately preceding the Purchase Contract Settlement Date.
Upon receipt of the Notes or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, as the case may be, from such Holder and the instruction
from the Purchase Contract Agent, the Collateral Agent shall release the
Treasury Securities having a corresponding aggregate principal amount from the
Pledge and shall promptly Transfer such Treasury Securities,
15
free and clear of any lien, pledge or security interest created hereby, to the
Purchase Contract Agent.
SECTION 4.3 Termination Event. Upon receipt by the Collateral Agent of
written notice from the Company or the Purchase Contract Agent that there has
occurred a Termination Event, the Collateral Agent shall release all Collateral
from the Pledge and shall promptly Transfer any Pledged Notes (or the Applicable
Ownership Interest of the Treasury Portfolio if a Tax Event Redemption or
Successful Remarketing has occurred) and Pledged Treasury Securities to the
Purchase Contract Agent for the benefit of the Holders of the Corporate Units
and the Treasury Units, respectively, free and clear of any lien, pledge or
security interest or other interest created hereby.
If such Termination Event shall result from the Company's becoming a debtor
under the Bankruptcy Code, and if the Collateral Agent shall for any reason fail
promptly to effectuate the release and Transfer of all Pledged Notes, the
Treasury Portfolio or of the Pledged Treasury Securities, as the case may be, as
provided by this Section 4.3, the Purchase Contract Agent shall (i) use
reasonable efforts to obtain an opinion of a nationally recognized law firm
reasonably acceptable to the Collateral Agent to the effect that, as a result of
the Company's being the debtor in such a bankruptcy case, the Collateral Agent
will not be prohibited from releasing or Transferring the Collateral as provided
in this Section 4.3, and, if it is able to obtain such opinion, shall deliver
such opinion to the Collateral Agent within ten days after the occurrence of
such Termination Event, and if (y) the Purchase Contract Agent shall be unable
to obtain such opinion within ten days after the occurrence of such Termination
Event or (z) the Collateral Agent shall continue, after delivery of such
opinion, to refuse to effectuate the release and Transfer of all Pledged Notes,
the Treasury Portfolio or the Pledged Treasury Securities, as the case may be,
as provided in this Section 4.3, then the Purchase Contract Agent shall within
fifteen days after the occurrence of such Termination Event commence an action
or proceeding in the court with jurisdic tion of the Company's case under the
Bankruptcy Code seeking an order requiring the Collateral Agent to effectuate
the release and transfer of all Pledged Notes, the Treasury Portfolio or of the
Pledged Treasury Securities, as the case may be, as provided by this Section 4.3
or (ii) commence an action or proceeding like that described in subsection
(i)(z) hereof within ten days after the occur rence of such Termination Event.
16
SECTION 4.4 Cash Settlement. (a) Upon receipt by the Collateral Agent
of (i) a notice from the Purchase Contract Agent promptly after the receipt by
the Purchase Contract Agent of such notice that a Holder of a Corporate Unit has
elected, in accordance with the procedures specified in Section 5.6(a)(i) of the
Purchase Contract Agreement to settle its Purchase Contract with Cash and (ii)
payment of the amount required to settle such Purchase Contract by such Holder
on or prior to 11:00 a.m., New York City time, on the Business Day immediately
preceding the Purchase Contract Settlement Date in lawful money of the United
States by certified or cashier's check or wire trans fer in immediately
available funds payable to or upon the order of the Company, then the Collateral
Agent shall, at the written direction of the Company, promptly invest any Cash
received from a Holder in connection with a Cash Settlement in Permitted
Investments. Upon receipt of the proceeds upon the maturity of the Permitted
Investments on the Purchase Contract Settlement Date, the Collateral Agent shall
pay the portion of such proceeds and deliver any certified or cashier's checks
received and any funds so wired, in an aggregate amount equal to the Purchase
Price, to the Company on the Purchase Contract Settlement Date, and shall
distribute any funds in respect of the interest earned from the Permitted
Investments to the Purchase Contract Agent for payment to the relevant Holders.
(b) If a Holder of a Corporate Unit (unless a Tax Event Redemption or an
earlier Successful Remarketing has occurred) fails to notify the Purchase
Contract Agent of its intention to make a Cash Settlement in accordance with
Section 5.6(a)(i) of the Purchase Contract Agreement, such failure shall
constitute an event of default under the Purchase Contract Agreement and
hereunder, and the Holder shall be deemed to have consented to the disposition
of the Pledged Notes pursuant to the Final Remarketing as described in Section
5.6(b) of the Purchase Contract Agreement, which is incorporated herein by
reference. If a Holder of a Corporate Unit does notify the Purchase Contract
Agent as provided in Section 5.6(a)(i) of the Purchase Contract Agreement of its
intention to pay the Purchase Price in cash, but fails to make such payment as
required by Section 5.6(a)(ii) of the Purchase Contract Agreement, the Pledged
Notes of such a Holder will not be remarketed but instead the Collateral Agent,
for the benefit of the Company, will exercise its rights as a secured party with
respect to such Notes at the direction of the Company to retain or dispose of
the Collateral in accordance with applicable law. In addition, in the event of a
Failed Final Remarketing as described in Section 5.6(b) of the Purchase Contract
Agreement, such Failed Final Remarketing shall
17
constitute an additional event of default hereunder by such Holder and the
Collateral Agent, for the benefit of the Company, will also exercise its rights
as a secured party with respect to such Pledged Notes at the direction of the
Company to retain or dispose of the Collateral in accordance with applicable
law.
SECTION 4.5 Early Settlement. Upon written notice to the Collateral
Agent by the Purchase Contract Agent that one or more Holders of Securities have
elected to effect Early Settlement (for purposes hereof, the term "Early
Settlement" to include a Redemption Early Settlement) of their respective
obligations under the Purchase Contracts forming a part of such Securities in
accordance with the terms of the Purchase Contracts and the Purchase Contract
Agreement (setting forth the number of such Purchase Contracts as to which such
Holders have elected to effect Early Settlement), and that the Purchase Contract
Agent has received from such Holders, and paid to the Company as confirmed in
writing by the Company, the related Early Settlement Amounts pursuant to the
terms of the Purchase Contracts and the Purchase Contract Agreement and that all
conditions to such Early Settlement have been satisfied, then the Collateral
Agent shall release from the Pledge, (a) Pledged Notes or the appropriate
Applicable Ownership Interest of the Treasury Portfolio in the case of a Holder
of Corporate Units or (b) Pledged Treasury Securities in the case of a Holder of
Treasury Units, as the case may be, in each case with an aggregate principal
amount, as the case may be, equal to the product of (i) the Stated Amount times
(ii) the number of such Purchase Contracts as to which such Holders have elected
to effect Early Settlement and shall Transfer all such Pledged Notes, the
appropriate Applicable Ownership Interest of the Treasury Portfolio or the
Pledged Treasury Securities, as the case may be, free and clear of the Pledge
created hereby, to the Purchase Contract Agent for the benefit of such Holders.
SECTION 4.6 Application of Proceeds; Settlement. (a) In the event a
Holder of Corporate Units (unless a Tax Event Redemption or an earlier
Successful Remarketing has occurred) has not elected to make an effective Cash
Settlement by notifying the Purchase Contract Agent (with a copy to the
Collateral Agent) in the manner provided for in paragraph 5.6(a)(i) in the
Purchase Contract Agreement and has not made an Early Settlement of the Purchase
Contracts underlying its Corporate Units, such Holder shall be deemed to have
elected to participate in the Final Remarketing of the Pledged Notes. The
Collateral Agent shall, by 10:00 a.m., New York City time, on the fourth
Business Day immediately preceding the Purchase Contract Settlement Date,
18
without any instruction from such Holder of Corporate Units, present the related
Pledged Notes to the Remarketing Agent for remarketing. Upon receiving such
Pledged Notes, the Remarketing Agent, pursuant to the terms of the Remarketing
Agreement and the Supplemental Remarketing Agreement, will use its reasonable
efforts to remarket such Pledged Notes on such date at a price of approximately
100.5% (but not less than 100%) of the aggregate Value of such Pledged Notes.
After deducting as the Remarketing Fee an amount not exceeding 25 basis points
(0.25%) of the aggregate Value of the remarketed Pledged Notes from any amount
of such Proceeds in excess of the aggregate Value of the Remarketed Pledged
Notes, the Remarketing Agent will remit the entire amount of the Proceeds of
such remarketing to the Collateral Agent. On the Purchase Contract Settlement
Date, the Collateral Agent shall apply that portion of the Proceeds from such
remarketing equal to the aggregate Value of such remarketed Pledged Notes to
satisfy in full the obligations of such Holders of Corporate Units to pay the
Purchase Price to purchase the PCS Common Stock under the related Purchase
Contracts. The remaining portion of such Proceeds, if any, shall be remitted by
the Collateral Agent to the Purchase Contract Agent for payment to the Holders.
If the Remarketing Agent advises the Collateral Agent in writing that it cannot
remarket the related Pledged Notes of such Holders of Corporate Units at a price
not less than 100% of the aggregate Value of such Pledged Notes or if the
remarket ing shall not have occurred because a condition precedent to the
remarketing shall not have been fulfilled, thus resulting in a Failed Final
Remarketing and an event of default under the Purchase Contract Agreement and
hereunder, the Collateral Agent, for the benefit of the Company will, at the
written direction of the Company, retain or dispose of the Pledged Notes in
accordance with applicable law and satisfy in full, from any such disposition or
retention, such Holder's obligation to pay the Purchase Price for the PCS Common
Stock.
In case of a PCS Stock Redemption, the Collateral Agent shall present the
related Pledged Notes to the Remarketing Agent for remarketing at a price of
approximately 100.5% (but not less than 100%) of the aggregate principal amount
of such Pledged Notes. Any such remarketing shall be on the same terms as the
Final Remarketing and, if effected, shall be the "Final Remarketing" for all
purposes under this Agreement.
(b) In the event a Holder of Treasury Units or Corporate Units (if a Tax
Event Redemption, Successful Initial Remarketing or Successful Subsequent
Remarketing has occurred) has not made an Early Settlement of the Purchase
19
Contracts underlying its Treasury Units or Corporate Units, such Holder shall be
deemed to have elected to pay for the shares of PCS Common Stock to be issued
under such Purchase Contracts from the Proceeds of the related Pledged Treasury
Securities or the appropriate Applicable Ownership Interest (as defined in
clause (i) of the definition of such term) of the Treasury Portfolio, as the
case may be. On the Business Day immediately prior to the Purchase Contract
Settlement Date, the Collateral Agent shall, at the written direction of the
Purchase Contract Agent, which written direction shall be furnished to the
Collateral Agent prior to 11:30 a.m. New York City time, invest the Cash
proceeds of the maturing Pledged Treasury Securities or the maturing appropriate
Applicable Ownership Interest (as defined in clause (i) of the definition of
such term) of the Treasury Portfolio, as the case may be, in overnight Permitted
Investments. Without receiving any instruction from any such Holder of Treasury
Units or Corporate Units, the Collateral Agent shall apply the Proceeds of the
related Pledged Treasury Securities or appropriate Applicable Ownership Interest
(as defined in clause (i) of the definition of such term) of the Treasury
Portfolio to the settlement of such Purchase Contracts on the Purchase Contract
Settlement Date.
In the event the sum of the Proceeds from the related Pledged Treasury
Securities or appropriate Applicable Ownership Interest (as defined in clause
(i) of the defini tion of such term) of the Treasury Portfolio, as the case may
be, and the investment earnings from the investment in overnight Permitted
Investments is in excess of the aggregate Purchase Price of the Purchase
Contracts being settled thereby, the Collateral Agent shall remit such excess,
when received, to the Purchase Contract Agent for the benefit of the Holders.
(c) Pursuant to the Remarketing Agreement and subject to the terms of the
Supplemental Remarketing Agreement, on or prior to the third Business Day
immediately preceding the Initial Remarketing Date or the Final Remarketing
Date, or the second Business Day immediately preceding a Subsequent Remarketing
Date, as applicable, but no earlier than the Payment Date immediately preceding
such date, holders of Separate Notes may elect to have their Separate Notes
remarketed by delivering their Separate Notes, together with a notice of such
election, substantially in the form of Exhibit C hereto, to the Custodial Agent.
The Custodial Agent shall hold such Separate Notes in an account separate from
the Collateral Account. A holder of Separate Notes electing to have its Separate
Notes remarketed will also have the right to withdraw such election by written
notice to the Custodial Agent, substantially in the form of
20
Exhibit D hereto, on or prior to the second Business Day immediately preceding
the Initial Remarketing Date, Subsequent Remarketing Date or the Final
Remarketing Date, as applicable, upon which notice the Custodial Agent shall
return such Separate Notes to such holder. On the Business Day immediately
preceding the Initial Remarketing Date, Subsequent Remarketing Date or the Final
Remarketing Date, as applicable, the Custodial Agent shall notify the
Remarketing Agent of the aggregate principal amount of the separate Notes to be
remarketed and will deliver to the Remarketing Agent for remarketing all
Separate Notes delivered to the Custodial Agent pursuant to this Section 4.6(c)
and not withdrawn pursuant to the terms hereof prior to such date. After
deducting the Remarketing Fee to the extent permitted under the terms of the
Remarketing Agreement, the Remarketing Agent will remit to the Custodial Agent
the remaining portion of the proceeds for the benefit of such holders. In the
event of a Failed Remarketing or a Failed Final Remarketing, as applicable, the
Remarketing Agent will promptly return such Separate Notes to the Custodial
Agent for redelivery to such holders.
ARTICLE V
VOTING RIGHTS - NOTES
The Purchase Contract Agent may exercise, or refrain from exercising, any
and all voting and other consensual rights pertaining to the Pledged Notes or
any part thereof for any purpose not inconsistent with the terms of this
Agreement and in accordance with the terms of the Purchase Contract Agreement;
provided, that the Purchase Contract Agent shall not exercise or, as the case
may be, shall not refrain from exercising such right if, in the judgment of the
Company, such action would impair or otherwise have a material adverse effect on
the Value of all or any of the Pledged Notes; and provided, further, that the
Purchase Contract Agent shall give the Company and the Collateral Agent at least
five days' prior written notice of the manner in which it intends to exercise,
or its reasons for refrain ing from exercising, any such right. Upon receipt of
any notices and other communications in respect of any Pledged Notes, including
notice of any meeting at which holders of Notes are entitled to vote or
solicitation of consents, waivers or proxies of holders of Notes, the Collateral
Agent shall use reasonable efforts to send promptly to the Purchase Contract
Agent such notice or communication, and as soon as reasonably practicable after
receipt of a written request therefor from the Purchase Contract Agent, execute
and deliver to the Purchase Contract Agent such proxies and
21
other instruments in respect of such Pledged Notes (in form and substance
satisfactory to the Collateral Agent) as are prepared by the Purchase Contract
Agent with respect to the Pledged Notes.
ARTICLE VI
RIGHTS AND REMEDIES; TAX EVENT REDEMPTION
SECTION 6.1 Rights and Remedies of the Collateral Agent. (a) In
addition to the rights and remedies specified in Section 4.4 hereof or otherwise
available at law or in equity, after an event of default hereunder, the
Collateral Agent shall have all of the rights and remedies with respect to the
Collateral of a secured party under the Uniform Commercial Code (or any
successor thereto) as in effect in the State of New York from time to time (the
"Code") (whether or not, to the extent permitted by law, the Code is in effect
in the jurisdiction where the rights and remedies are asserted) and the TRADES
Regulations and such additional rights and remedies to which a secured party is
entitled under the laws in effect in any jurisdiction where any rights and
remedies hereunder may be asserted. Wherever reference is made in this Agreement
to any section of the Code, such reference shall be deemed to include a
reference to any provision of the Code which is a successor to, or amendment of,
such section. Without limiting the generality of the foregoing, such remedies
may include, to the extent permitted by applicable law, (i) retention of the
Pledged Notes or other Collateral in full satisfaction of the Holder's
obligations under the Purchase Contracts or (ii) sale of the Pledged Notes or
other Collateral in one or more public or private sales.
(b) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, in the event the Collateral Agent is unable
to make payments to the Company on account of the appropriate Applicable
Ownership Interest (as specified in clause (i) of the definition of such term)
of the Treasury Portfolio or on account of principal payments of any Pledged
Treasury Securities as provided in Article III hereof in satisfaction of the
obligations of the Holder of the Securities of which such Pledged Treasury
Securities, or the appropriate Applicable Ownership Interest (as specified in
clause (i) of the definition of such term) of the Treasury Portfolio, as
applicable, is a part under the related Purchase Contracts, the inability to
make such payments shall constitute an event of default hereunder and the
Collateral Agent shall have and may exercise, with reference to such Pledged
Treasury Securities, or such appropriate Applicable
22
Ownership Interest (as specified in clause (i) of the definition of such term)
of the Treasury Portfolio, as applicable, and such obligations of such Holder,
any and all of the rights and remedies available to a secured party under the
Code and the TRADES Regulations after default by a debtor, and as otherwise
granted herein or under any other law.
(c) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, the Collateral Agent is hereby irrevocably
authorized to receive and collect all payments of (i) principal and interest on
the Pledged Notes, (ii) the principal amount of the Pledged Treasury Securities,
or (iii) the appropriate Applicable Ownership Interest of the Treasury
Portfolio, subject, in each case, to the provisions of Article III, and as other
wise granted herein.
(d) The Purchase Contract Agent, individually and as attorney-in-fact for
each Holder of Securities, agrees that, from time to time, upon the written
request of the Collateral Agent, the Purchase Contract Agent or such Holder
shall execute and deliver such further documents and do such other acts and
things as the Collateral Agent may reasonably request in order to maintain the
Pledge, and the perfection and priority thereof, and to confirm the rights of
the Collateral Agent hereunder. The Purchase Contract Agent shall have no
liability to any Holder for executing any documents or taking any such acts
requested by the Collateral Agent hereunder, except for liability for its own
negligent act, its own negligent failure to act or its own willful misconduct.
SECTION 6.2 Tax Event Redemption. Upon the occurrence of a Tax Event
Redemption of the Pledged Notes prior to August 17, 2004, or any earlier
Successful Remarketing, the aggregate Redemption Price payable on the Tax Event
Redemption Date with respect to the Pledged Notes shall be delivered to the
Collateral Agent by the Note Trustee on or prior to 12:00 p.m., New York City
time, by check or wire transfer in immediately available funds at such place and
at such account as may be designated by the Collateral Agent in exchange for the
Pledged Notes. In the event the Collateral Agent receives such Redemption Price,
the Collateral Agent will, at the written direction of the Company, apply an
amount, out of such Redemption Price, equal to the aggregate Redemption Amount
with respect to the Pledged Notes to purchase from the Quotation Agent the
Treasury Portfolio and promptly remit the remaining portion of such Redemption
Price to the Purchase Contract Agent for payment to the Holders of Corporate
Units. The Collateral
23
Agent shall Transfer the Treasury Portfolio to the Collateral Account to secure
the obligation of all Holders of Corporate Units to purchase PCS Common Stock
of the Company under the Purchase Contracts constituting a part of such
Corporate Units, in substitution for the Pledged Notes. Thereafter the
Collateral Agent shall have such security interests, rights and obligations
with respect to the Treasury Portfolio as it had in respect of the Pledged
Notes as provided in Articles 2, 3, 4, 5 and 6, and any reference herein to the
Notes shall be deemed to be reference to such Treasury Portfolio, and any
reference herein to interest on the Notes shall be deemed to be a reference to
distributions on such Treasury Portfolio.
SECTION 6.3 Initial and Subsequent Remarketing. Unless a Tax Event
Redemption shall have occurred, the Collateral Agent shall, by 10:00 a.m., New
York City time, on the fourth Business Day immediately preceding May 17, 2004,
or, in the case of any Subsequent Remarketing (written notice of which the
Collateral Agent shall have received from the Remarketing Agent), by 10:00 a.m.,
New York City time, on the second Business Day immediately preceding the date of
such Subsequent Remarketing, without any instruction from any Holder of
Corporate Units, present the related Pledged Notes to the Remarketing Agent for
remarketing. Upon receiving such Pledged Notes, the Remarketing Agent, pursuant
to the terms of the Remarketing Agreement and the Supplemental Remarketing
Agreement, will use its reasonable efforts to remarket such Pledged Notes on
such date at an aggregate price of approximately 100.5% (but not less than 100%)
of the Treasury Portfolio Purchase Price. After deducting as the Remarketing Fee
an amount not exceeding 25 basis points (0.25%) of the Treasury Portfolio
Purchase Price from any amount of such Proceeds in excess of the Treasury
Portfolio Purchase Price, the Remarketing Agent will remit the entire amount of
the Proceeds of such remar keting to the Collateral Agent on or prior to 12:00
p.m., New York City time, by check or wire transfer in immediately available
funds at such place and at such account as may be designated by the Collateral
Agent in exchange for the Pledged Notes. In the event the Collateral Agent
receives such Proceeds, the Collateral Agent will, at the written direction of
the Company, apply an amount equal to the Treasury Portfolio Purchase Price to
purchase from the Quotation Agent the Treasury Portfolio and promptly remit the
remaining portion of such Proceeds to the Purchase Contract Agent for payment to
the Holders of Corporate Units. The Collateral Agent shall Transfer the Treasury
Portfolio to the Collateral Account to secure the obligation of all Holders of
Corporate Units to purchase PCS Common Stock of the Company under the Purchase
Contracts constitut-
24
ing a part of such Corporate Units, in substitution for the Pledged Notes.
Thereafter the Collateral Agent shall have such security interests, rights and
obligations with respect to the Treasury Portfolio as it had in respect of the
Pledged Notes as provided in Articles 2, 3, 4, 5 and 6, and any reference herein
to the Notes shall be deemed to be reference to such Treasury Portfolio, and any
reference herein to interest on the Notes shall be deemed to be a reference to
distributions on such Treasury Portfolio.
SECTION 6.4 Substitutions. Whenever a Holder has the right to
substitute Treasury Securities, Notes or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, for Collateral held by
the Collateral Agent, such substitution shall not constitute a novation of the
security interest created hereby.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES; COVENANTS
SECTION 7.1 Representations and Warranties. The Holders from time to
time, acting through the Purchase Contract Agent as their attorney-in-fact (it
being under stood that the Purchase Contract Agent shall not be liable for any
representation or warranty made by or on behalf of a Holder), hereby represent
and warrant to the Collateral Agent, which representations and warranties shall
be deemed repeated on each day a Holder Transfers Collateral that:
(a) such Holder has the power to grant a security interest in and lien
on the Collateral;
(b) such Holder is the sole beneficial owner of the Collateral and, in the
case of Collateral delivered in physical form, is the sole holder of such
Collateral and is the sole beneficial owner of, or has the right to Transfer,
the Collateral it Transfers to the Collateral Agent, free and clear of any
security interest, lien, encumbrance, call, liability to pay money or other
restriction other than the security interest and lien granted under Article 2
hereof;
(c) upon the Transfer of the Collateral to the Collateral Account, the
Collateral Agent, for the benefit of the Company, will have a valid and
perfected first priority security interest therein (assuming that any central
clearing operation or any Intermediary or other entity not within the control of
the Holder involved in the Transfer of the Collateral, including the Collateral
Agent, gives the notices and takes the action required of it hereunder and
25
under applicable law for perfection of that interest and assuming the
establishment and exercise of control pursuant to Section 2.2 hereof); and
(d) the execution and performance by the Holder of its obligations under
this Agreement will not result in the creation of any security interest, lien or
other encumbrance on the Collateral other than the security interest and lien
granted under Article 2 hereof or violate any provision of any existing law or
regulation applicable to it or of any mortgage, charge, pledge, indenture,
contract or undertaking to which it is a party or which is binding on it or any
of its assets.
SECTION 7.2 Covenants. The Holders from time to time, acting through
the Purchase Contract Agent as their attorney-in-fact (it being understood that
the Purchase Contract Agent shall not be liable for any covenant made by or on
behalf of a Holder), hereby covenant to the Collateral Agent that for so long as
the Collateral remains subject to the Pledge:
(a) neither the Purchase Contract Agent nor such Holders will create or
purport to create or allow to subsist any mortgage, charge, lien, pledge or any
other security interest whatsoever over the Collateral or any part of it other
than pursuant to this Agreement; and
(b) neither the Purchase Contract Agent nor such Holders will sell or
otherwise dispose (or attempt to dispose) of the Collateral or any part of it
except for the beneficial interest therein, subject to the pledge here under,
transferred in connection with the Transfer of the Securities.
ARTICLE VIII
THE COLLATERAL AGENT
It is hereby agreed as follows:
SECTION 8.1 Appointment, Powers and Immunities. The Collateral Agent
shall act as Agent for the Company here under with such powers as are
specifically vested in the Collateral Agent by the terms of this Agreement,
together with such other powers as are reasonably incidental thereto. Each of
the Collateral Agent, the Custodial Agent and the Securities Intermediary: (a)
shall have no duties or responsibilities except those expressly set forth in
this Agreement and no implied covenants or obligations shall be
26
inferred from this Agreement against any of them, nor shall any of them be bound
by the provisions of any agreement beyond the specific terms hereof; (b) shall
not be responsi ble for any recitals contained in this Agreement, or in any
certificate or other document referred to or provided for in, or received by it
under, this Agreement, the Securities or the Purchase Contract Agreement, or for
the value, validity, effectiveness, genuineness, enforceability or sufficiency
of this Agreement (other than as against the Collateral Agent), the Securities
or the Purchase Contract Agreement or any other document referred to or provided
for herein or therein or for any failure by the Company or any other Person
(except the Collateral Agent, the Custodial Agent or the Securities
Intermediary, as the case may be) to perform any of its obligations hereunder or
thereunder or for the perfection, priority or, except as expressly required
hereby, maintenance of any security interest created hereunder; (c) shall not be
required to initiate or conduct any litigation or collection proceedings
hereunder (except in the case of the Collateral Agent, pursuant to directions
furnished under Section 8.2 hereof, subject to Section 8.6 hereof); (d) shall
not be responsible for any action taken or omitted to be taken by it hereunder
or under any other document or instrument referred to or provided for herein or
in connection herewith or therewith, except for its own negligence, bad faith or
willful misconduct; (e) shall not be required to advise any party as to selling
or retaining, or taking or refraining from taking any action with respect to,
the Securities or other property deposited hereunder; and (f) shall not be
responsible for the acts or omissions of any clearing corporation with whom
collateral is deposited. Subject to the foregoing, during the term of this
Agreement, the Collateral Agent shall take all reason able action in connection
with the safekeeping and preser vation of the Collateral hereunder.
No provision of this Agreement shall require the Collateral Agent, the
Custodial Agent or the Securities Intermediary to expend or risk its own funds
or otherwise incur any financial liability in the performance of any of its
duties hereunder. In no event shall the Collateral Agent, the Custodial Agent or
the Securities Intermediary be liable for any amount in excess of the Value of
the Collateral. Notwithstanding the foregoing, the Collateral Agent, the
Custodial Agent, the Purchase Contract Agent and Securities Intermediary, each
in its individual capacity, hereby waive any right of setoff, bankers lien,
liens or perfection rights as securities intermediary or any counter claim with
respect to any of the Collateral.
27
SECTION 8.2 Instructions of the Company. The Company shall have the
right, by one or more instruments in writing executed and delivered to the
Collateral Agent, the Custodial Agent or the Securities Intermediary, as the
case may be, to direct the time, method and place of conducting any proceeding
for the realization of any right or remedy available to the Collateral Agent, or
of exercising any power conferred on the Collateral Agent, the Custodial Agent
or the Securities Intermediary, as the case may be, or to direct the taking or
refraining from taking of any action authorized by this Agreement; provided,
however, that (i) such direction shall not conflict with the provisions of any
law or of this Agreement and (ii) the Collateral Agent, the Custodial Agent and
the Securities Intermediary shall be adequately indemnified as provided herein.
Nothing in this Section 8.2 shall impair the right of the Collateral Agent in
its discretion to take any action or omit to take any action which it deems
proper and which is not inconsistent with such direction.
SECTION 8.3 Reliance. Each of the Securities Intermediary, the
Custodial Agent and the Collateral Agent shall be entitled conclusively to rely
upon any certifica tion, order, judgment, opinion, notice or other communica
tion (including, without limitation, any thereof by tele phone, telecopy, telex
or facsimile) believed by it to be genuine and correct and to have been signed
or sent by or on behalf of the proper Person or Persons (without being required
to determine the correctness of any fact stated therein), and upon advice and
statements of legal counsel and other experts selected by the Collateral Agent,
the Custodial Agent or the Securities Intermediary, as the case may be. As to
any matters not expressly provided for by this Agreement, the Collateral Agent,
the Custodial Agent and the Securities Intermediary shall in all cases be fully
pro tected in acting, or in refraining from acting, hereunder in accordance with
instructions given by the Company in accordance with this Agreement.
SECTION 8.4 Rights in other Capacities. The Collateral Agent, the
Custodial Agent and the Securities Intermediary and their affiliates may
(without having to account therefor to the Company) accept deposits from, lend
money to, make their investments in and generally engage in any kind of banking,
trust or other business with the Purchase Contract Agent, any Holder of
Securities and any holder of separate Notes (and any of their respective sub
sidiaries or affiliates) as if it were not acting as the Collateral Agent, the
Custodial Agent or the Securities Intermediary, as the case may be, and the
Collateral Agent, the Custodial Agent and the Securities Intermediary and
28
their affiliates may accept fees and other consideration from the Purchase
Contract Agent, any Holder of Securities or any holder of separate Notes without
having to account for the same to the Company; provided that each of the
Securities Intermediary, the Custodial Agent and the Collateral Agent covenants
and agrees with the Company that it shall not accept, receive or permit there to
be created in favor of itself and shall take no affirmative action to permit
there to be created in favor of any other Person, any security interest, lien or
other encumbrance of any kind in or upon the Collateral and the Collateral shall
be segre gated or the books and records of the Collateral Agent and not
commingled with any other assets of any such Person.
SECTION 8.5 Non-Reliance. None of the Securities Intermediary, the
Custodial Agent or the Collateral Agent shall be required to keep itself
informed as to the performance or observance by the Purchase Contract Agent or
any Holder of Securities of this Agreement, the Purchase Contract Agreement, the
Securities or any other document referred to or provided for herein or therein
or to inspect the properties or books of the Purchase Contract Agent or any
Holder of Securities. The Collateral Agent, the Custodial Agent and the
Securities Intermediary shall not have any duty or responsibility to provide the
Company or the Remarketing Agent with any credit or other information concerning
the affairs, financial condition or business of the Purchase Contract Agent, any
Holder of Securities or any holder of separate Notes (or any of their respective
subsidiaries or affiliates) that may come into the possession of the Collateral
Agent, the Custodial Agent or the Securities Intermediary or any of their
respective affiliates.
SECTION 8.6 Compensation and Indemnity. The Company agrees: (i) to pay
each of the Collateral Agent, the Securities Intermediary and the Custodial
Agent such compen sation as set forth in Schedule A attached hereto and made a
part hereof, for all services rendered by each of them here under and (ii) to
indemnify the employee, officers, directors and agent of the Collateral Agent,
the Custodial Agent and the Securities Intermediary for, and to hold each of
them harmless from and against, any loss, liability or reasonable out-of-pocket
expense incurred without negli gence, willful misconduct or bad faith on its
part, arising out of or in connection with the acceptance or administra tion of
its powers and duties under this Agreement, includ ing the reasonable
out-of-pocket costs and expenses (including reasonable fees and expenses of
counsel) of defending itself against any claim or liability in connec tion with
the exercise or performance of such powers and
29
duties. The Collateral Agent, the Custodial Agent and the Securities
Intermediary shall each promptly notify the Company of any third-party claim
which may give rise to the indemnity hereunder and give the Company the
opportunity to participate in the defense of such claim with counsel reasonably
satisfactory to the indemnified party, and no such claim shall be settled
without the written consent of the Company, which consent shall not be
unreasonably withheld.
SECTION 8.7 Failure to Act. In the event of any ambiguity in the
provisions of this Agreement or any dispute between or conflicting claims by or
among the parties hereto or any other Person with respect to any funds or
property deposited hereunder, the Collateral Agent, the Securities Intermediary
and the Custodial Agent shall be entitled, after prompt notice to the Company
and the Purchase Contract Agent, at its sole option, to refuse to comply with
any and all claims, demands or instructions with respect to such property or
funds so long as such dispute or conflict shall continue, and neither the
Collateral Agent, the Securities Intermediary nor the Custodial Agent shall be
or become liable in any way to any of the parties hereto for its failure or
refusal to comply with such conflicting claims, demands or instructions. The
Collateral Agent, the Securities Intermediary and the Custodial Agent shall be
entitled to refuse to act until either (i) such conflicting or adverse claims or
demands shall have been finally deter mined by a court of competent jurisdiction
or settled by agreement between the conflicting parties as evidenced in a
writing, satisfactory to the Collateral Agent, the Securities Intermediary or
the Custodial Agent, as the case may be, or (ii) the Collateral Agent, the
Securities Intermediary or the Custodial Agent, as the case may be, shall have
received security or an indemnity reasonably satisfactory to the Collateral
Agent, the Securities Intermediary or the Custodial Agent, as the case may be,
sufficient to save the Collateral Agent, the Securities Intermediary or the
Custodial Agent, as the case may be, harmless from and against any and all loss,
liability or reasonable out-of-pocket expense which the Collateral Agent, the
Securities Intermediary or the Custodial Agent, as the case may be, may incur by
reason of its acting without bad faith, willful misconduct or negligence. The
Collateral Agent, the Securities Intermediary or the Custodial Agent may in
addition elect to commence an interpleader action or seek other judicial relief
or orders as the Collateral Agent, the Securities Intermediary or the Custodial
Agent, as the case may be, may deem necessary. Notwithstanding any thing
contained herein to the contrary, neither the Collateral Agent, the Securities
Intermediary nor the
30
Custodial Agent shall be required to take any action that is in its opinion
contrary to law or to the terms of this Agreement, or which would in its
opinion subject it or any of its officers, employees or directors to liability.
SECTION 8.8 Resignation. Subject to the appoint ment and acceptance of
a successor Collateral Agent, the Securities Intermediary or Custodial Agent as
provided below, (a) the Collateral Agent, the Securities Intermediary and the
Custodial Agent may resign at any time by giving notice thereof to the Company
and the Purchase Contract Agent as attorney-in-fact for the Holders of
Securities, (b) the Collateral Agent, the Securities Intermediary and the
Custodial Agent may be removed at any time by the Company and (c) if the
Collateral Agent, the Securities Intermediary or the Custodial Agent fails to
perform any of its material obligations hereunder in any material respect for a
period of not less than 20 days after receiving written notice of such failure
by the Purchase Contract Agent and such failure shall be continuing, the
Collateral Agent, the Securities Intermediary or the Custodial Agent may be
removed by the Purchase Contract Agent. The Purchase Contract Agent shall
promptly notify the Company of any removal of the Collateral Agent, the
Securities Intermediary or the Custodial Agent pursuant to clause (c) of the
immedi ately preceding sentence. Upon any such resignation or removal, the
Company shall have the right to appoint a successor Collateral Agent, Securities
Intermediary or Custodial Agent, as the case may be. If no successor Collateral
Agent, Securities Intermediary or Custodial Agent, as the case may be, shall
have been so appointed and shall have accepted such appointment within 30 days
after the retiring Collateral Agent's, Securities Intermediary's or Custodial
Agent's giving of notice of resignation or such removal, then the retiring
Collateral Agent, Securities Intermediary or Custodial Agent, as the case may
be, may petition any court of competent jurisdiction for the appoint ment of a
successor Collateral Agent, Securities Intermediary or Custodial Agent, as the
case may be. Each of the Collateral Agent, the Securities Intermediary and the
Custodial Agent shall be a bank which has an office in New York, New York with a
combined capital and surplus of at least $75,000,000. Upon the acceptance of any
appointment as Collateral Agent, Securities Intermediary or Custodial Agent, as
the case may be, hereunder by a successor Collateral Agent, Securities
Intermediary or Custodial Agent, as the case may be, such successor shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Collateral Agent, Securities Intermediary or
Custodial Agent, as the case may be, and the retiring Collateral Agent,
Securities
31
Intermediary or Custodial Agent, as the case may be, shall take all
appropriate action to transfer any money and property held by it hereunder
(including the Collateral) to such successor. The retiring Collateral Agent,
Securities Intermediary or Custodial Agent shall, upon such succession, be
discharged from its duties and obligations as Collateral Agent, Securities
Intermediary or Custodial Agent hereunder. After any retiring Collateral
Agent's, Securities Intermediary's or Custodial Agent's resignation hereunder as
Collateral Agent, Securities Intermediary or Custodial Agent, the provisions of
this Article 8 shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as the Collateral
Agent, the Securities Intermediary or the Custodial Agent. Any resignation or
removal of the Collateral Agent hereunder shall be deemed for all purposes of
this Agreement as the simultaneous resignation or removal of the Custodial Agent
and the Securities Intermediary.
SECTION 8.9 Right to Appoint Agent or Advisor. The Collateral Agent
shall have the right to appoint agents or advisors in connection with any of its
duties hereunder, and the Collateral Agent shall not be liable for any action
taken or omitted by, or in reliance upon the advice of, such agents or advisors
selected in good faith. The appointment of agents pursuant to this Section 8.9
shall be subject to prior consent of the Company, which consent shall not be
unreasonably withheld.
SECTION 8.10 Survival. The provisions of this Article 8 shall survive
termination of this Agreement and the resignation or removal of the Collateral
Agent, the Securities Intermediary or the Custodial Agent.
SECTION 8.11 Exculpation. Anything in this Agreement to the contrary
notwithstanding, in no event shall any of the Collateral Agent, the Custodial
Agent or the Securities Intermediary or their officers, employees or agents be
liable under this Agreement to any third party for indirect, special, punitive,
or consequential loss or damage of any kind whatsoever, including lost profits,
whether or not the likelihood of such loss or damage was known to the Collateral
Agent, the Custodial Agent or the Securities Intermediary, or any of them,
incurred without any act or deed that is found to be attributable to gross
negligence, willful misconduct or bad faith on the part of the Collateral Agent,
the Custodial Agent or the Securities Intermediary.
32
ARTICLE IX
AMENDMENT
SECTION 9.1 Amendment Without Consent of Holders. Without the consent
of any Holders or the holders of any Separate Notes, the Company, the Collateral
Agent, the Custodial Agent, the Securities Intermediary and the Purchase
Contract Agent, at any time and from time to time, may amend this Agreement, in
form satisfactory to the Company, the Collateral Agent, the Custodial Agent, the
Securities Intermediary and the Purchase Contract Agent, for any of the
following purposes:
(a) to evidence the succession of another Person to the Company, and
the assumption by any such successor of the covenants of the Company; or
(b) to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred upon the
Company so long as such covenants or such surrender do not adversely affect
the validity, perfection or priority of the security interests granted or
created hereunder; or
(c) to evidence and provide for the acceptance of appointment
hereunder by a successor Collateral Agent, Securities Intermediary,
Purchase Contract Agent or Custodial Agent; or
(d) to cure any ambiguity, to correct or supple ment any provisions
herein which may be inconsistent with any other such provisions herein, or
to make any other provisions with respect to such matters or questions
arising under this Agreement, provided such action shall not adversely
affect the interests of the Holders.
SECTION 9.2 Amendment with Consent of Holders. With the consent of the
Holders of not less than a majority of the Purchase Contracts at the time
outstanding, by Act of said Holders delivered to the Company, the Purchase
Contract Agent or the Collateral Agent, as the case may be, the Company, when
duly authorized, the Purchase Contract Agent, the Collateral Agent, the
Custodial Agent and the Securities Intermediary may amend this Agreement for the
purpose of modifying in any manner the provisions of this Agreement or the
rights of the Holders in respect of the Securities; provided, however, that no
such supplemental agreement
33
shall, without the consent of the Holder of each Outstanding Security affected
thereby,
(a) change the amount or type of Collateral under lying a Security
(except for the rights of holders of Corporate Units to substitute the
Treasury Securities for the Pledged Notes or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, or the
rights of Holders of Treasury Units to substitute Notes or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as applicable, for
the Pledged Treasury Securities), impair the right of the Holder of any
Security to receive distributions on the underlying Collateral or otherwise
adversely affect the Holder's rights in or to such Collateral; or
(b) otherwise effect any action that would require the consent of the
Holder of each Outstanding Security affected thereby pursuant to the
Purchase Contract Agreement if such action were effected by an agreement
supplemental thereto;
(c) reduce the amount payable or distributable to Holders upon the
remarketing of Notes; or
(d) reduce the percentage of Purchase Contracts the consent of whose
Holders is required for any such amendment.
If any amendment referred to above would adversely affect only the Corporate
Units or the Treasury Units, then only the affected class of Holders shall be
entitled to vote on the amendment and the amendment shall not be effective
except with the consent of the Holders of not less than a majority of the
affected class. It shall not be necessary for any Act of Holders under this
Article 9 to approve the particular form of any proposed amendment, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 9.3 Execution of Amendments. In executing any amendment
permitted by this Section, the Collateral Agent, the Custodial Agent, the
Securities Intermediary and the Purchase Contract Agent shall be entitled to
receive and (subject to Section 8.1 hereof, with respect to the Collateral
Agent, and Section 7.1 of the Purchase Contract Agreement, with respect to the
Purchase Contract Agent) shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of such amendment is authorized or permitted
by this Agreement and that all conditions precedent, if any, to the execution
and
34
delivery of such amendment have been satisfied. All amend ments must be in
writing, signed by all parties to this Agreement.
SECTION 9.4 Effect of Amendments. Upon the execution of any amendment
under this Article 9, this Agreement shall be modified in accordance therewith,
and such amendment shall form a part of this Agreement for all purposes; and
every Holder of Certificates theretofore or thereafter authenticated, executed
on behalf of the Holders and delivered under the Purchase Contract Agreement
shall be bound thereby.
SECTION 9.5 Reference to Amendments. Security Certificates
authenticated, executed on behalf of the Holders and delivered after the
execution of any amendment pursuant to this Article 9 may, and shall if required
by the Collateral Agent or the Purchase Contract Agent, bear a notation in form
approved by the Purchase Contract Agent and the Collateral Agent as to any
matter provided for in such amendment. If the Company shall so determine, new
Security Certificates so modified as to conform, in the opinion of the
Collateral Agent, the Purchase Contract Agent and the Company, to any such
amendment may be prepared and executed by the Company and authenticated,
executed on behalf of the Holders and delivered by the Purchase Contract Agent
in accordance with the Purchase Contract Agreement and without charge or expense
to Holders in exchange for Outstanding Security Certificates.
ARTICLE X
MISCELLANEOUS
SECTION 10.1 No Waiver. To the extent permitted by law, no failure on
the part of any party hereto or any of its agents to exercise, and no course of
dealing with respect to, and no delay in exercising, any right, power or remedy
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise by any party hereto or any of its agents of any right, power or remedy
hereunder preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. To the extent permitted by law, the remedies
herein are cumulative and are not exclusive of any remedies provided by law.
SECTION 10.2 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS. Without limiting the foregoing, the above
35
choice of law is expressly agreed to by the Securities Intermediary, the
Collateral Agent, the Custodial Agent and the Holders from time to time acting
through the Purchase Contract Agent, as their attorney-in-fact, in connection
with the establishment and maintenance of the Collateral Account. The Company,
the Collateral Agent, the Securities Intermediary, the Custodial Agent and the
Holders from time to time of the Securities, acting through the Purchase
Contract Agent as their attorney-in-fact, hereby submit to the nonexclusive
jurisdiction of the United States District Court for the Southern District of
New York and of any New York state court sitting in New York City for the
purposes of all legal proceedings arising out of or relating to this Agreement
or the transactions contemplated hereby. The Company, the Collateral Agent, the
Securities Intermediary, the Custodial Agent and the Holders from time to time
of the Securities, acting through the Purchase Contract Agent as their
attorney-in-fact, irrevocably waive, to the fullest extent permitted by
applicable law, any objection which they may now or hereafter have to the laying
of the venue of any such proceeding brought in such a court and any claim that
any such proceeding brought in such a court has been brought in an inconvenient
forum, as well as to trial by jury.
SECTION 10.3 Notices. Unless otherwise speci fied, any notices,
requests, consents or other communica tions given or made hereunder or pursuant
hereto shall be made in writing or transmitted by any standard form of tele
communication, including telephone or telecopy, and con firmed in writing. All
written notices and confirmations of notices by telecommunication shall be
deemed to have been validly given or made when delivered or mailed, registered
or certified mail, return receipt requested and postage pre paid. All such
notices, requests, consents or other communi cations shall be addressed as
follows: if to the Company, to 0000 Xxxxxxx Xxxxxxx Xxxxxxx, Xxxxxxxx, XX 00000,
U.S.A., Attention: Corporate Secretary (fax no. (000) 000-0000), and if faxed,
any such notice shall be confirmed in writing, with a copy to King & Spalding,
0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, XX 00000, Attention: Xxxx X. Xxxxxxx,
Esq. (fax no. (000) 000-0000); if to the Collateral Agent, to Bank One, National
Association, 000 Xxxx Xxxxx Street, Mail Code OHI-0181, Xxxxxxxx, Xxxx 00000,
Attention: Global Corporate Trust Services Division; and if to the Purchase
Contract Agent, to Bank One, National Association, 000 Xxxx Xxxxx Street, Mail
Code OHI-0181, Xxxxxxxx, Xxxx 00000, Attention: Global Corporate Trust Services
Division or to such other address as any of the above shall specify to the other
in writing.
36
SECTION 10.4 Successors and Assigns. Subject to Article XI, this
Agreement shall be binding upon and inure to the benefit of the respective
successors and assigns of the Company, the Collateral Agent, the Custodial
Agent, the Securities Intermediary and the Purchase Contract Agent, and the
Holders from time to time of the Securities, by their acceptance of the same,
shall be deemed to have agreed to be bound by the provisions hereof and to have
ratified the agreements of, and the grant of the Pledge hereunder by, the
Purchase Contract Agent.
SECTION 10.5 Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument, and any of the parties hereto may execute this Agreement by
signing any such counterpart.
SECTION 10.6 Severability. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(i) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be construed in order to carry out the intentions of the
parties hereto as nearly as may be possible and (ii) the invalidity or
unenforceability of any provision hereof in any jurisdiction shall not affect
the validity or enforceability of such provision in any other jurisdiction.
SECTION 10.7 Expenses, etc. The Company agrees to reimburse the
Collateral Agent and the Custodial Agent for: (a) all reasonable out-of-pocket
costs and expenses of the Collateral Agent and the Custodial Agent (including,
without limitation, the reasonable fees and expenses of counsel to the
Collateral Agent and the Custodial Agent), in connection with (i) the
negotiation, preparation, execution and delivery or performance of this
Agreement and (ii) any modification, supplement or waiver of any of the terms of
this Agreement; (b) all reasonable costs and expenses of the Collateral Agent
(including, without limitation, reasonable fees and expenses of counsel) in
connection with (i) any enforcement or proceedings resulting or incurred in
connection with causing any Holder of Securities to satisfy its obligations
under the Purchase Contracts forming a part of the Securities and (ii) the
enforcement of this Section 10.7; and (c) all transfer, stamp, documentary or
other similar taxes, assessments or charges levied by any governmental or
revenue authority in respect of this Agreement or any other document referred to
herein and all costs, expenses, taxes, assessments and other charges incurred in
connection with any filing, registration,
37
recording or perfection of any security interest contem plated hereby.
SECTION 10.8 Security Interest Absolute. All rights of the Collateral
Agent and security interests here under, and all obligations of the Holders from
time to time hereunder, shall be absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of any provision of the
Purchase Contracts or the Securities or any other agreement or instrument
relating thereto;
(b) any change in the time, manner or place of payment of, or any other
term of, or any increase in the amount of, all or any of the obligations of
Holders of Securities under the related Purchase Contracts, or any other
amendment or waiver of any term of, or any consent to any departure from any
requirement of, the Purchase Contract Agreement or any Purchase Contract or any
other agreement or instrument relating thereto; or
(c) any other circumstance which might otherwise constitute a defense
available to, or discharge of, a borrower, a guarantor or a pledgor.
ARTICLE XI
SECTION 11.1 Assignment of Agreement. (a) In the event that the
Company is entering into a Spin-Off Transaction to which Section 5.8(c) of the
Purchase Contract Agreement applies, the Company may assign its rights and
obligations under this Agreement to any Person that, at the time of or
immediately before the effective date of such assignment, is an Affiliate of the
Company, provided (i) such Person is a corporation organized under the laws of
the United States of America or a State thereof or the District of Columbia and
such Person shall expressly assume all the obligations of the Company under this
Agreement and (ii) such Person is not, immediately after such assignment, in
default of its payment obligation or other material obligations under this
Agreement.
(b) The Company shall provide Holders with no less than 30 days prior
written notice of any Spin-Off Transaction to which Section 5.8(c) of the
Purchase Contract Agreement applies and its intent to assign this Agreement to
an Affiliate pursuant to this Section 11.1.
38
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
SPRINT CORPORATION,
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Vice President - Finance and
Assistant Treasurer
BANK ONE, NATIONAL ASSOCIATION, as Purchase
Contract Agent and as attorney-in-fact of the
Holders from time to time of the Securities
By: /s/ Xxxxx X. Xxxx
Name: Xxxxx X. Xxxx
Title: Authorized Signer
BANK ONE, NATIONAL
ASSOCIATION,
as Collateral Agent, Custodial
Agent and Securities
Intermediary
By: /s/ Xxxxx X. Xxxx
Name: Xxxxx X. Xxxx
Title: Authorized Signer
EXHIBIT A
INSTRUCTION FROM PURCHASE CONTRACT AGENT TO COLLATERAL AGENT
Bank One, National Association
000 Xxxx Xxxxx Xxxxxx
Mail Code, OHI-0181
Xxxxxxxx, Xxxx 00000
Attention: Global Corporate Trust Services Division
Re: Sprint Corporation (the "Company")
We hereby notify you in accordance with Section [4.1] [4.2] of the Pledge
Agreement, dated as of August 10, 2001, (the "Pledge Agreement") among the
Company, yourselves, as Collateral Agent, Custodial Agent and Securities
Intermediary and ourselves, as Purchase Contract Agent and as attorney-in-fact
for the holders of [CORPORATE UNITS] [TREASURY UNITS] from time to time, that
the holder of the Securities listed below (the "Holder") has elected to
substitute $[ ] [aggregate principal amount of Treasury Securities] [aggregate
principal amount of Notes or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, as the case may be,] in exchange for an equal Value of
[Pledged Notes or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be,] [Pledged Treasury Securities] held by you in
accordance with the Pledge Agreement and has delivered to us a notice stating
that the Holder has Transferred [Treasury Securities] [Notes or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,] to
you, as Collateral Agent. We hereby instruct you, upon receipt of such [Pledged
Treasury Securities] [Pledged Notes or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be,], and upon the payment
by such Holder of any applicable fees, to release the [Notes or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,]
[Treasury Securities] related to such [Corporate Units] [Treasury Units] to us
in accordance with the Holder's instructions. Capitalized terms used herein but
not defined shall have the meaning set forth in the Pledge Agreement.
Date: _____________ BANK ONE, NATIONAL ASSOCIATION
By: _______________________________
Name:
Title:
40
Please print name and address of Registered Holder electing to substitute
[Treasury Securities] [Notes or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, as the case may be,] for the [Pledged Notes or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be,] [Pledged Treasury Securities]:
___________________________ ____________________________________
Name Social Security or other Taxpayer
Identification Number, if any
___________________________
Address
___________________________
___________________________
41
EXHIBIT B
INSTRUCTION TO PURCHASE CONTRACT AGENT
Bank One, National Association
000 Xxxx Xxxxx Xxxxxx
Mail Code, OHI-0181
Xxxxxxxx, Xxxx 00000
Attention: Global Corporate Trust Services Division
Re: Equity Units of Sprint Corporation (the "Company")
The undersigned Holder hereby notifies you that it has delivered to Bank
One, National Association, as Collateral Agent, [$[ ] aggregate principal amount
of Treasury Securities] [$[ ] aggregate principal amount of Notes or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, the case
may be,] in exchange for an equal Value of [Pledged Notes or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,]
[Pledged Treasury Securities] held by the Collateral Agent, in accordance with
Section [4.1][4.2] of the Pledge Agreement, dated [ ], 2001 (the "Pledge
Agreement"), between you, the Company and the Collateral Agent. The undersigned
Holder has paid the Collateral Agent all applicable fees relating to such
exchange. The under signed Holder hereby instructs you to instruct the
Collateral Agent to release to you on behalf of the under signed Holder the
[Pledged Notes or the appropriate Applicable Ownership Interest of the Treasury
Portfolio] [Pledged Treasury Securities] related to such [Corporate Units]
[Treasury Units]. Capitalized terms used herein but not defined shall have the
meaning set forth in the Pledge Agreement.
Dated: _______________ ______________________________
Signature
Please print name and address of Registered Holder:
___________________________ _________________________________
Name Social Security or other Taxpayer
Identification Number, if any
___________________________
Address
___________________________
___________________________
42
EXHIBIT C
INSTRUCTION TO CUSTODIAL AGENT REGARDING REMARKETING
Bank One, National Association
000 Xxxx Xxxxx Xxxxxx
Mail Code, OHI-0181
Xxxxxxxx, Xxxx 00000
Attention: Global Corporate Trust Services Division
Re: Notes of Sprint Corporation (the "Company")
The undersigned hereby notifies you in accordance with Section 4.6(c) of
the Pledge Agreement, dated as of August 10, 2001 (the "Pledge Agreement"),
among the Company, yourselves, as Collateral Agent, Securities Intermediary and
Custodial Agent, and Bank One National Association, as Purchase Contract Agent
and as attorney-in-fact for the Holders of Corporate Units and Treasury Units
from time to time, that the undersigned elects to deliver $[ ] aggregate
principal amount of Notes for delivery to the Remarketing Agent on the Business
Day immediately preceding the [Initial Remarketing Date] [applicable Subsequent
Remarketing Date] [Final Remarketing Date] for remarketing pursuant to Section
4.6(c) of the Pledge Agreement. The undersigned will, upon request of the
Remarketing Agent, execute and deliver any additional documents deemed by the
Remarketing Agent or by the Company to be necessary or desirable to complete the
sale, assignment and transfer of the Notes tendered hereby.
The undersigned hereby instructs you, upon receipt of the Proceeds of such
remarketing from the Remarketing Agent to deliver such Proceeds to the
undersigned in accordance with the instructions indicated herein under "A.
Payment Instructions". The undersigned hereby instructs you, in the event of a
Failed [Initial] [Subsequent] [Final] Remarketing, upon receipt of the Notes
tendered herewith from the Remarketing Agent, to be delivered to the person(s)
and the address(es) indicated herein under "B. Delivery Instructions."
With this notice, the undersigned hereby (i) represents and warrants that
the undersigned has full power and authority to tender, sell, assign and
transfer the Notes tendered hereby and that the undersigned is the record owner
of any Notes tendered herewith in physical form or a participant in The
Depositary Trust Company ("DTC") and the beneficial owner of any Notes tendered
herewith by book- entry transfer to your account at DTC and (ii) agrees to be
bound by the terms and conditions of Section 4.6(c) of the
43
Pledge Agreement. Capitalized terms used herein but not defined shall have the
meaning set forth in the Pledge Agreement.
Date: ________________
BANK ONE, NATIONAL ASSOCIATION
By: _________________________
Name:
Title:
44
A. PAYMENT INSTRUCTIONS
Proceeds of the remarketing should be paid by check in the name of the person(s)
set forth below and mailed to the address set forth below.
_______________________
Name(s)
_______________________
_______________________
_________________________
Address
_______________________
(Tax Identification or Social Security
Number)
B. DELIVERY INSTRUCTIONS
In the event of a failed remarketing, Notes which are in physical form should be
delivered to the person(s) set forth below and mailed to the address set forth
below.
_________________________
Name(s)
_______________________
_______________________
__________________________
Address
_______________________
(Tax Identification or Social Security
Number)
45
In the event of a failed remarketing, Notes which are in book-entry form should
be credited to the account at The Depositary Trust Company set forth below.
__________________________
DTC Account Number
Name of Account Party: _______________________
46
EXHIBIT D
INSTRUCTION TO CUSTODIAL AGENT REGARDING
WITHDRAWAL FROM REMARKETING
Bank One, National Association
000 Xxxx Xxxxx Xxxxxx
Mail Code, OHI-0181
Xxxxxxxx, Xxxx 00000
Attention: Global Corporate Trust Services Division
Re: Notes of Sprint Corporation (the "Company")
The undersigned hereby notifies you in accordance with Section 4.6(c) of
the Pledge Agreement, dated as of August 10, 2001 (the "Pledge Agreement") among
the Company, yourselves, as Collateral Agent, Securities Intermediary and
Custodial Agent and Bank One, National Association, as Purchase Contract Agent
and as attorney-in-fact for the Holders of Corporate Units and Treasury Units
from time to time, that the undersigned elects to withdraw the $[ ] aggregate
principal amount of Notes delivered to the Custodial Agent on [ ], 2001 for
remarketing pursuant to Section 4.6(c) of the Pledge Agreement. The undersigned
hereby instructs you to return such Notes to the undersigned in accordance with
the undersigned's instructions. With this notice, the Undersigned hereby agrees
to be bound by the terms and conditions of Section 4.6(c) of the Pledge
Agreement. Capitalized terms used herein but not defined shall have the meaning
set forth in the Pledge Agreement.
Date: _____________
BANK ONE, NATIONAL ASSOCIATION
By: ______________________________
Name:
Title:
47
