Exhibit 6
PLEDGE AGREEMENT
DATED AS OF AUGUST [ ], 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 [ ], 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 40,000,000 Equity Units of
the Company (or 46,000,000 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 40,000,000 (or
46,000,000 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 newly issued 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 $[ ] aggregate principal amount of [ ]% Senior
Notes due 2006 fully and unconditionally guaranteed by the Company (or $[ ] if
the Underwriters' overallotment option is exercised) (the "Notes"), each having
a principal amount per Note equal to $[ ]; 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 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 otherwise 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 [ ])
maintained at [ ] in the name "[ ], as 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 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
unconditionally 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, corporation, limited
liability company, partnership, joint venture, association, joint-stock company,
trust, unincorporated organization or government or any agency or political
subdivision 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. government 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.
"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 otherwise 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 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 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 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 use its best efforts
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 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 entitlement 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.
(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 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 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 Articles 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 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, Successful Initial Remarketing or Successful
Subsequent Remarketing has occurred, the appropriate Applicable Ownership
Interest in the Treasury Portfolio) securing such Holder's obligations under the
Purchase Contract(s) comprising 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 transferring 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,
Successful Initial Remarketing, Successful Subsequent 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 [ ] 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 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 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, Successful
Initial Remarketing or Successful Subsequent 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 [ ]
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, 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,
Successful Initial Remarketing or Successful Subsequent 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 jurisdiction 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 occurrence of such Termination Event.
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 transfer 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,
Successful Initial Remarketing or Successful Subsequent 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 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 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 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, 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 remarketing 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.
(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
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 definition 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 second Business Day
immediately preceding the Initial Remarketing Date, Subsequent Remarketing Date
or the Final 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 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 refraining 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 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 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 otherwise 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 the Purchase Contract Settlement Date,
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
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 a 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 remarketing 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 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 6.4 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 understood 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 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
hereunder, 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 hereunder 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 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
responsible 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 reasonable
action in connection with the safekeeping and preservation 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 counterclaim with
respect to any of the Collateral.
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 certification, order, judgment, opinion, notice or other communication
(including, without limitation, any thereof by telephone, 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
protected 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
subsidiaries 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 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
segregated 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 compensation as set forth in Schedule A attached hereto and made a
part hereof, for all services rendered by each of them hereunder 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 negligence, willful misconduct or bad faith on its
part, arising out of or in connection with the acceptance or administration of
its powers and duties under this Agreement, including the reasonable out-of-
pocket costs and expenses (including reasonable fees and expenses of counsel) of
defending itself against any claim or liability in connection with the exercise
or performance of such powers and 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 determined 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 anything contained herein to
the contrary, neither the Collateral Agent, the Securities Intermediary nor the
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 appointment 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
immediately 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 appointment 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 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.
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 or
Purchase Contract Agent; or
(d) to cure any ambiguity, to correct or supplement 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 shall, without the consent of the Holder of each
Outstanding Security affected thereby,
(a) change the amount or type of Collateral underlying 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 delivery of such amendment have been satisfied. All amendments 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 limiting
the foregoing, the above 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 specified, any notices,
--------
requests, consents or other communications given or made hereunder or pursuant
hereto shall be made in writing or transmitted by any standard form of
telecommunication, including telephone or telecopy, and confirmed 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 prepaid. All such
notices, requests, consents or other communications 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.
SECTION 10.4 Successors and Assigns. 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, recording or perfection of any security interest
contemplated hereby.
SECTION 10.8 Security Interest Absolute. All rights of the
---------------------------
Collateral Agent and security interests hereunder, 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.
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:
-------------------------
Name:
Title:
BANK ONE, NATIONAL ASSOCIATION,
as Purchase Contract Agent and as attorney-in-
fact of the Holders from time to time of the
Securities
By:
-------------------------
Name:
Title:
BANK ONE, NATIONAL ASSOCIATION,
as Collateral Agent, Custodial Agent and
Securities Intermediary
By:
-------------------------
Name:
Title:
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 [ ], 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:
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
----------------------------
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 [___],
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 undersigned
Holder hereby instructs you to instruct the Collateral Agent to release to you
on behalf of the undersigned 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
--------------------------
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 [ ], 2001 (the "Pledge Agreement"), among
the Company, yourselves, as Collateral Agent, Securities Intermediary and
Custodial Agent, and [ ], 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 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:
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)
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:
-----------------------
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 [ ], 2001 (the "Pledge Agreement") among the
Company, yourselves, as Collateral Agent, Securities Intermediary and Custodial
Agent and [ ], 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:
