Exhibit 4(e)
EXECUTION COPY
PURCHASE CONTRACT AGREEMENT
BETWEEN
SPRINT CORPORATION
AND
BANK ONE, NATIONAL ASSOCIATION,
AS PURCHASE CONTRACT AGENT
DATED AS OF August 10, 2001
TABLE OF CONTENTS
Page
ARTICLE I
Definitions and Other Provisionsof General
Applications
SECTION 1.1. Definitions 1
Section 1.2. Compliance Certificates and Opinions 19
SECTION 1.3. Form of Documents Delivered to Agent 19
SECTION 1.4. Acts of Holders; Record Dates 20
SECTION 1.5. Notices 22
SECTION 1.6. Notice to Holders; Waiver 23
SECTION 1.7. Effect of Headings and Table of Contents 23
SECTION 1.8. Successors and Assigns 23
SECTION 1.9. Separability Clause 23
SECTION 1.10. Benefits of Agreement 24
SECTION 1.11. Governing Law 24
SECTION 1.12. Legal Holidays 24
SECTION 1.13. Counterparts 24
SECTION 1.14. Inspection of Agreement 25
ARTICLE II
Certificate Forms
SECTION 2.1. Forms of Certificates Generally 25
SECTION 2.2. Form of Agent's Certificate of
Authentication 26
ARTICLE III
The Securities
SECTION 3.1. Title and Terms; Denominations 26
SECTION 3.2. Rights and Obligations Evidenced by the
Certificates 27
SECTION 3.3. Execution, Authentication, Delivery
and Dating 28
SECTION 3.4. Temporary Certificates 29
SECTION 3.5. Registration; Registration of Transfer
and Exchange 29
SECTION 3.6. Book-Entry Interests 31
SECTION 3.7. Notices to Holders 32
SECTION 3.8. Appointment of Successor Clearing Agency 32
ii
SECTION 3.9. Definitive Certificates 32
SECTION 3.10. Mutilated, Destroyed, Lost and
Stolen Certificates 33
SECTION 3.11. Persons Deemed Owners 34
SECTION 3.12. Cancelation 35
SECTION 3.13. Establishment of Treasury Units 35
SECTION 3.14. Reestablishment of Corporate Units 37
SECTION 3.15. Transfer of Collateral upon
Occurrence of Termination Event 39
SECTION 3.16. No Consent to Assumption 40
SECTION 3.17. CUSIP Numbers 40
ARTICLE IV
The Notes and the Applicable Ownership Interest
of the Treasury Portfolio
SECTION 4.1. Interest and Other Payments;
Rights to Payments Preserved;
Distribution Rate Reset; Notice 41
SECTION 4.2. Notice and Voting 42
SECTION 4.3. Tax Event Redemption 43
SECTION 4.4. CUSIP Numbers 43
ARTICLE V
The Purchase Contracts
SECTION 5.1. Purchase of Shares of PCS Common Stock 44
SECTION 5.2. Contract Adjustment Payments 45
SECTION 5.5. Initial and Subsequent Remarketing 54
SECTION 5.6. Payment of Purchase Price;
Final Remarketing 57
SECTION 5.7. Delivery of Shares of PCS Common Stock 60
SECTION 5.8. Adjustment of Settlement Rate 61
SECTION 5.9. Notice of Adjustments and
Certain Other Events 72
SECTION 5.10. Termination Event; Notice 73
SECTION 5.11. Early Settlement 74
SECTION 5.12. No Fractional Shares 76
SECTION 5.13. Charges and Taxes 76
ARTICLE VI
Remedies
SECTION 6.1. Unconditional Right of Holders to
Purchase PCS Common Stock 77
SECTION 6.2. Restoration of Rights and Remedies 77
iii
SECTION 6.3. Rights and Remedies Cumulative 77
SECTION 6.4. Delay or Omission Not Waiver 78
SECTION 6.5. Undertaking for Costs 78
SECTION 6.6. Waiver of Stay or Extension Laws 78
ARTICLE VII
The Agent
SECTION 7.1. Certain Duties and Responsibilities 79
SECTION 7.2. Notice of Default 80
SECTION 7.3. Certain Rights of Agent 80
SECTION 7.4. Not Responsible for Recitals or
Issuance of Securities 81
SECTION 7.5. May Hold Securities 81
SECTION 7.6. Money Held in Custody 81
SECTION 7.7. Compensation and Reimbursement 81
SECTION 7.8. Corporate Agent Required; Eligibility 82
SECTION 7.9. Resignation and Removal;
Appointment of Successor 83
SECTION 7.10. Acceptance of Appointment by Successor 84
SECTION 7.11. Merger, Conversion, Consolidation or
Succession to Business 85
SECTION 7.12. Preservation of Information;
Communications to Holders 85
SECTION 7.13. No Obligations of Agent 85
SECTION 7.14. Tax Compliance 86
ARTICLE VIII
Supplemental Agreements
SECTION 8.1. Supplemental Agreements Without
Consent of Holders 86
SECTION 8.2. Supplemental Agreements with
Consent of Holders 87
SECTION 8.3. Execution of Supplemental Agreements 88
SECTION 8.4. Effect of Supplemental Agreements 89
SECTION 8.5. Reference to Supplemental Agreements 89
ARTICLE IX
Consolidation, Merger, Sale or Conveyance
SECTION 9.1. Covenant Not to Merge, Consolidate, Sell
or Convey Property Except Under Certain
Conditions 89
SECTION 9.2. Rights and Duties of Successor Corporation 90
iv
SECTION 9.3. Opinion of Counsel Given to Agent 90
ARTICLE X
Covenants
SECTION 10.1. Performance Under Purchase Contracts 91
SECTION 10.2. Maintenance of Office or Agency 91
SECTION 10.3. Company to Reserve PCS Common Stock 92
SECTION 10.4. Covenants as to PCS Common Stock 92
ARTICLE XI
Assignment
SECTION 11.1. Assignment of Agreement 92
v
EXHIBIT A Form of Corporate Units Certificate
EXHIBIT B Form of Treasury Units Certificate
EXHIBIT C Instruction From Purchase Contract Agent
to Collateral Agent
EXHIBIT D Instruction to Purchase Contract Agent
EXHIBIT E Notice to Settle by Separate Cash
PURCHASE CONTRACT AGREEMENT, dated as of August 10, 2001 between Sprint
Corporation, a Kansas corporation (the "Company"), and Bank One, National
Association, a national banking corporation, acting as purchase contract agent
for the Holders of Securities from time to time (the "Agent").
WITNESSETH:
For and in consideration of the premises and the purchase of the Securities
by the Holders thereof, it is mutually agreed as follows:
ARTICLE I
Definitions and Other Provisions
of General Applications
SECTION 1.1. 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; and
nouns and pronouns of the masculine gender include the feminine and neuter
genders;
(b) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles in the United States;
(c) 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;
(d) the following terms have the meanings given to them in this
Section 1.1(d).
"Act" when used with respect to any Holder, has the meaning specified
in Section 1.4.
"Affiliate" has the same meaning as given to that term in Rule 405 of
the Securities Act of 1933, as amended, as is in effect on the date hereof.
"Agent" means the Person named as the "Agent" in the first paragraph
of this instrument until a successor Agent shall have become such pursuant to
the applicable
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provisions of this Agreement, and thereafter "Agent" shall mean such Person.
"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.
"Applicable Benchmark Treasury" means direct obligations of the United
States, which may be obligations traded on a when-issued basis only, having a
maturity comparable to the remaining term to maturity of the Notes, as agreed
upon by the Company and the Reset Agent. The rate for the Applicable Benchmark
Treasury will be the bid side rate displayed at 10:00 A.M., New York City time,
on the applicable Reset Date in the Telerate system (or if the Telerate system
is no longer available on such Reset Date or in the opinion of the Reset Agent,
after consultation with the Company, no longer an appropriate system from which
to obtain such rate, such other nationally recognized quotation system as, in
the opinion of the Reset Agent, after consultation with the Company, is
appropriate). If such rate is not so displayed, the rate for the Applicable
Benchmark Treasury shall be, as calculated by the Reset Agent, the yield to
maturity for the Applicable Benchmark Treasury, expressed as a bond equivalent
on the basis of a year of 365 or 366 days, as applicable, and applied on a daily
basis, and computed by taking the arithmetic mean of the secondary market bid
rates, as of 10:30 A.M., New York City time, on such Reset Date of three leading
United States government securities dealers selected by the Reset Agent after
consultation with the Company (which may include the Reset Agent or an Affiliate
thereof).
"Applicable Market Value" means the average of the Closing Price per
share of PCS Common Stock on each of the 20 consecutive Trading Days ending on
the third Trading Day immediately preceding the Purchase Contract Settlement
Date or, for purposes of determining cash payable in lieu of fractional shares
in connection with an Early Settlement, the third Trading Day immediately
preceding the relevant Early Settlement Date.
"Applicable Ownership Interest" means, with respect to a Corporate
Unit and the Treasury Securities in the Treasury Portfolio, (i) a 1/40, or 2.5%,
undivided beneficial ownership interest in a $1,000 principal or interest amount
of a principal or interest strip in a U.S. Treasury Security included in such
Treasury Portfolio that matures on or prior to August 15, 2004 and (ii) for the
scheduled interest payment date on the Notes that occurs on
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the Purchase Contract Settlement Date, in the case of a Successful Initial
Remarketing or Successful Subsequent Remarketing, or after the Tax Event
Redemption Date and on or before the Purchase Contract Settlement Date, in the
case of a Tax Event Redemption, a .0375% undivided beneficial ownership interest
in a $1,000 face amount of such Treasury Security which is a principal or
interest strip maturing before such interest payment date.
"Applicable Principal Amount" means the aggregate principal amount of
the Notes which are (i) components of Corporate Units on the Initial Remarketing
Date, any Subsequent Remarketing Date or the Final Remarketing Date, as
applicable or (ii) are not components of Corporate Units but are validly
tendered for remarketing by the Holder of such Notes on any Remarketing Date.
"Authorized Newspaper" means a daily newspaper, in the English
language, customarily published on each day that is a Business Day in The City
of New York, whether or not published on days that are Legal Holidays, and of
general circulation in The City of New York. The Authorized Newspaper for the
purposes of the Reset Announcement Date may be The Wall Street Journal.
"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.
"Beneficial Owner" means, with respect to a Book-Entry Interest, a
Person who is the owner of such Book-Entry Interest as reflected on the books of
the Clearing Agency or on the books of a Person maintaining an account with such
Clearing Agency (directly as a Clearing Agency Participant or as an indirect
participant, in each case in accordance with the rules of such Clearing Agency).
"Board of Directors" means the board of directors of the Company or a
duly authorized committee of that board.
"Board Resolution" means one or more resolutions of the Board of
Directors, a copy of which has been certified by the Secretary or an Assistant
Secretary of the Company to have been duly adopted by the Board of Directors and
to be in full force and effect on the date of such certification and delivered
to the Agent.
"Book-Entry Interest" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as described in Section 3.6.
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"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 Settlement" has the meaning set forth in Section 5.6(a)(i).
"Certificate" means a Corporate Units Certificate
or a Treasury Units Certificate.
"Class A Common Stock" means the Company's Class A common stock, par
value $2.50 per share.
"Clearing Agency" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as a
depositary for the Securities and in whose name, or in the name of a nominee of
that organization, shall be registered a Global Certificate and which shall
undertake to effect book entry transfers and pledges of the Securities.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Price" of the PCS Common Stock on any date of determination
means the closing sale price (or, if no closing price is reported, the last
reported sale price) of the PCS Common Stock on the NYSE on such date or, if the
PCS Common Stock is not listed for trading on the NYSE on any such date, as
reported in the composite transactions for the principal United States national
or regional securities exchange on which the PCS Common Stock is so listed, or
if the PCS Common Stock is not so listed on a United States national or regional
securities exchange, as reported by the Nasdaq National Market or, if the PCS
Common Stock is not so reported, the last quoted bid price for the PCS Common
Stock in the over-the-counter market as reported by the National Quotation
Bureau or similar organization, or, if such bid price is not available, the
market value of the PCS Common Stock on such date as determined by a nationally
recognized independent investment banking firm retained for this purpose by the
Company.
"Collateral" has the meaning specified in Section 2.1 of the Pledge
Agreement.
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"Collateral Agent" means Bank One, National Association, as Collateral
Agent under the Pledge Agreement until a successor Collateral Agent shall have
become such pursuant to the applicable provisions of the Pledge Agreement, and
thereafter "Collateral Agent" shall mean the Person who is then the Collateral
Agent thereunder.
"Collateral Substitution" has the meaning specified in Section 3.13.
"Common Equity Securities" means shares of a class of stock of the
Company that is not entitled to priority over any other class of stock of the
Company in the payment of dividends or with respect to rights upon the
liquidation, dissolution or winding up of the Company.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor or assignee shall have become
such pursuant to the applicable provision of this Agreement, and thereafter
"Company" shall mean such successor or assignee.
"Contract Adjustment Payments" means, in the case of Corporate Units
and Treasury Units, the amount payable by the Company in respect of each
Purchase Contract constituting a part of such Corporate Unit or Treasury Unit,
equal to 1.125% per year of the Stated Amount, in each case computed on the
basis of a 360 day year of twelve 30 day months, plus (i) any Deferred Contract
Adjustment Payments accrued pursuant to Section 5.2 and (ii) the amount of any
Dividend Adjustment Amount.
"Conversion" has the meaning specified in Section 5.8(b).
"Corporate Trust Office" means the principal corporate trust office of
the Agent at which, at any particular time, its corporate trust business shall
be administered, which office at the date hereof is located at 000 Xxxx Xxxxx
Street, Mail Code OH1-0181, Xxxxxxxx, Xxxx 00000, Attention: Global Corporate
Trust Services Division.
"Corporate Units" means the collective rights and obligations of a
Holder of a Corporate Units Certificate in respect of a Note or an appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
subject in each case to the Pledge thereof, and the related Purchase Contract.
"Corporate Units Certificate" means a certificate evidencing the
rights and obligations of a Holder in respect
6
of the number of Corporate Units specified on such certificate.
"Corporate Units Register" and "Corporate Units Registrar" have the
respective meanings specified in Section 3.5.
"Coupon Rate" means the percentage rate per annum at which each Note
will bear interest initially.
"Current Market Price" has the meaning specified in Section 5.8(a)(8).
"Depositary" means, initially, DTC until another Clearing Agency
becomes its successor.
"Deferred Contract Adjustment Payments" has the meaning specified in
Section 5.4.
"Dividend Adjustment Amount" shall mean, (i) to the extent all
outstanding shares of PCS Common Stock are converted or recapitalized into
shares of any other capital stock or the annual dividend rate on the PCS Common
Stock is increased after the date of this Agreement, an amount equal to the
regular cash dividends paid on the maximum number of shares of capital stock or
PCS Common Stock, as the case may be, purchasable upon the settlement of each
Purchase Contract or (ii) if the Company merges, consolidates or consummates any
other business combination with, or sells, assigns, transfers, leases or conveys
all or substantially all of its assets and properties to, any person or
institution that is not organized and existing under the laws of the United
States or any U.S. State or the District of Columbia and, as a result, the
Contract Adjustment Payments become subject to withholding taxes imposed by one
or more non-U.S. jurisdictions, an amount equal to the amount necessary so that
the amount of Contract Adjustment Payments actually received by Holders will be
the same, net of non-U.S. withholding taxes, as if the non-U.S. withholding
taxes were not imposed on the Contract Adjustment Payments.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"Early Settlement" has the meaning specified in Section 5.11(a).
"Early Settlement Amount" has the meaning specified in Section
5.11(a).
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"Early Settlement Date" has the meaning specified in Section 5.11(a).
"Early Settlement Rate" has the meaning specified in Section 5.11(b).
"Exchange Act" means the Securities Exchange Act of 1934 and any
statute successor thereto, in each case as amended from time to time, and the
rules and regulations promulgated thereunder.
"Expiration Date" has the meaning specified in Section 1.4.
"Expiration Time" has the meaning specified in Section 5.8(a)(6).
"Failed Final Remarketing" has the meaning specified in Section
5.4(b).
"Failed Remarketing" has the meaning specified in Section 5.5.
"Final Remarketing" has the meaning specified in Section 5.6(b).
"Final Remarketing Date" has the meaning specified in Section 5.4(b).
"FON Common Stock" means the FON Common Stock, Series 1, par value
$2.00 per share, of the Company.
"Global Note Certificate" means a certificate evidencing the
respective rights and obligations of Holders in respect of the number of Notes
specified on such certificate and which is registered in the name of a Clearing
Agency or a nominee thereof.
"Global Certificate" means a Certificate that evidences all or part of
the Securities and is registered in the name of a Depositary or a nominee
thereof.
"Holder", when used with respect to a Security, means the Person in
whose name the Security evidenced by a Corporate Units Certificate and/or
Treasury Units Certificate is registered in the related Corporate Units Register
and/or Treasury Units Register, as the case may be.
"Indenture" means the Indenture dated as of October 1, 1998 between
the Company, Sprint Capital and the Indenture Trustee, as amended and
supplemented by the First
8
Supplemental Indenture dated as of January 15, 1999 between the Company, Sprint
Capital and the Indenture Trustee pursuant to which the Notes will be issued by
Sprint Capital.
"Indenture Trustee" means Bank One, National Association, a national
banking association, as trustee under the Indenture, or any successor thereto.
"Initial Remarketing" has the meaning specified in Section 5.3.
"Initial Remarketing Date" means the third Business Day immediately
preceding May 17, 2004.
"Issuer Order" or "Issuer Request" means a written order or request
signed in the name of the Company by its Chairman of the Board, its President or
a Vice President and by its Chief Financial Officer, its Treasurer, an Assistant
Treasurer, its Secretary or an Assistant Secretary, and delivered to the Agent.
"NYSE" means the New York Stock Exchange, Inc..
"New York Office" shall have the meaning set forth in Section 10.2
"Notes" means the series of notes of Sprint Capital designated the
6.00% Senior Notes due 2006 and fully and unconditionally guaranteed by the
Company pursuant to the Indenture, to be issued under the Indenture as of the
date hereof.
"Notes Holder" or "Holder of Notes" means the Person in whose name the
Note evidenced by a Notes Certificate is registered in the Debt Securities
Register under the Indenture.
"Notes Terms" means the resolutions of the pricing committee of the
Board of Directors of Sprint Capital Corporation dated as of August 7, 2001
setting forth the terms and conditions of the Notes pursuant to the Indenture.
"Officer's Certificate" means a certificate of the Company signed on
its behalf by the Chairman of the Board, the President, any Vice President, the
Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary of
the Company and delivered to the Agent.
"Opinion of Counsel" means an opinion in writing signed by legal
counsel, who may be an employee of or
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counsel to the Company or an Affiliate and who shall be reasonably acceptable
to the Agent.
"Outstanding Securities," with respect to the Corporate Units or
Treasury Units, means, as of the date of determination, all Corporate Units or
Treasury Units, as the case may be, evidenced by Certificates theretofore
authenticated, executed and delivered under this Agreement, except:
(i) If a Termination Event has occurred, (A) Treasury Units for which
the Stated Amount of Treasury Securities has been theretofore deposited
with the Agent in trust for the Holders of such Treasury Units and (B)
Corporate Units for which the Stated Amount of the related Notes or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the
case may be, has been theretofore deposited with the Agent in trust for the
Holders of such Corporate Units;
(ii) Corporate Units or Treasury Units evidenced by Certificates
theretofore canceled by the Agent or delivered to the Agent for cancelation
or deemed canceled pursuant to the provisions of this Agreement; and
(iii) Corporate Units or Treasury Units evidenced by Certificates in
exchange for or in lieu of which other Certificates have been
authenticated, executed on behalf of the Holder and delivered pursuant to
this Agreement, other than any such Certificate in respect of which there
shall have been presented to the Agent proof satisfactory to it that such
Certificate is held by a bona fide purchaser in whose hands the Corporate
Units or Treasury Units evidenced by such Certificate are valid obligations
of the Company;
provided, however, that in determining whether the Holders of the requisite
number of the Corporate Units or Treasury Units have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Corporate Units
or Treasury Units owned by the Company or any Affiliate of the Company shall be
disregarded and deemed not to be outstanding, except that, in determining
whether the Agent shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Corporate Units or
Treasury Units which a Responsible Officer of the Agent knows to be so owned
shall be so disregarded. Corporate Units or Treasury Units so owned which have
been pledged in good faith may be regarded as Outstanding Securities if the
pledge establishes to the
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satisfaction of the Agent the pledge's right so to act with respect to such
Corporate Units or Treasury Units and that the pledge is not the Company or any
Affiliate of the Company.
"Payment Date" means each February 17, May 17, August 17 and November
17, commencing November 17, 2001.
"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, 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 this Agreement.
"PCS Conversion Provisions" mean Section 7.1(A)(2) of Article Sixth of
the Company's Articles of Incorporation, as amended, or any successor
provisions.
"PCS Mandatory Redemption Provision" means Section 7.1(A)(1)(b)(i) or
(ii) of Article Sixth of the Company's Articles of Incorporation, as amended, or
any successor provision.
"PCS Optional Redemption Provision" means Section 7.2 of Article Sixth
of the Company's Articles of Incorporation, as amended, or any successor
provision.
"PCS Stock Redemption" has the meaning specified in Section 5.8(d).
"Permitted Investments" has the meaning set forth in the Pledge
Agreement.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint-stock company, limited
liability company, trust, unincorporated association or government or any agency
or political subdivision thereof or any other entity of whatever nature.
"Pledge" means the pledge under the Pledge Agreement of the Notes or
the appropriate Applicable Ownership Interest of the Treasury Portfolio, as the
case may be, and of the Treasury Securities, in each case
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constituting a part of the Securities.
"Pledge Agreement" means the Pledge Agreement, dated as of the date
hereof, by and among the Company, the Collateral Agent and the Agent, on its own
behalf and as attorney-in-fact for the Holders from time to time of the
Securities, as the same may hereafter be amended in accordance with the terms
thereof.
"Predecessor Certificate" means a Predecessor Corporate Units
Certificate or a Predecessor Treasury Units Certificate.
"Predecessor Corporate Units Certificate" of any particular Corporate
Units Certificate means every previous Corporate Units Certificate evidencing
all or a portion of the rights and obligations of the Company and the Holder
under the Corporate Units evidenced thereby; and, for the purposes of this
definition, any Corporate Units Certificate authenticated and delivered under
Section 3.10 in exchange for or in lieu of a mutilated, destroyed, lost or
stolen Corporate Units Certificate shall be deemed to evidence the same rights
and obligations of the Company and the Holder as the mutilated, destroyed, lost
or stolen Corporate Units Certificate.
"Predecessor Treasury Units Certificate" of any particular Treasury
Units Certificate means every previous Treasury Units Certificate evidencing all
or a portion of the rights and obligations of the Company and the Holder under
the Treasury Units evidenced thereby; and, for the purposes of this definition,
any Treasury Units Certificate authenticated and delivered under Section 3.10 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Treasury Units
Certificate shall be deemed to evidence the same rights and obligations of the
Company and the Holder as the mutilated, destroyed, lost or stolen Treasury
Units Certificate.
"Primary Treasury Dealer" means a primary U.S. government securities
dealer in The City of New York.
"Prior Cash Distribution" has the meaning specified in Section 5.8(a).
"Prior Company Tender" has the meaning specified in Section 5.8(a).
"Proceeds" has the meaning set forth in the Pledge Agreement.
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"Purchase Contract", when used with respect to any Security, means the
contract forming a part of such Security and obligating the Company to sell and
the Holder of such Security to purchase PCS Common Stock on the terms and
subject to the conditions set forth in this Agreement.
"Purchase Contract Settlement Date" means August 17, 2004.
"Purchase Contract Settlement Fund" has the meaning specified in
Section 5.7.
"Purchase Price" has the meaning specified in Section 5.1.
"Purchased Shares" has the meaning specified in Section 5.8(a)(6).
"Quotation Agent" means (i) any of X.X. Xxxxxx Securities Inc.,
Xxxxxxx Xxxxx Government Securities, Inc. or UBS Warburg LLC or their
respective successors, or (ii) any other Primary Treasury Dealer selected by
the Company.
"Recapitalization Transaction" has the meaning specified in Section
5.8(b)(1).
"Record Date" for the distribution payable in respect of the Notes or
the Applicable Ownership Percentage of the Treasury Portfolio payable on any
Payment Date means the first day of the month in which the relevant Payment Date
occurs.
"Redemption Amount" means, for each Note, the product of (i) the
principal amount of such Note and (ii) a fraction the numerator of which is the
applicable Treasury Portfolio Purchase Price and the denominator of which is the
applicable Tax Event Redemption Principal Amount.
"Redemption Early Settlement" has the meaning specified in Section
5.8(d).
"Redemption Price" means the redemption price per Note equal to the
Redemption Amount plus any accrued and unpaid interest on such Note to the date
of redemption.
"Register" means the Corporate Units Register and the Treasury Units
Register.
"Registrar" means the Corporate Units Registrar and the Treasury Units
Registrar.
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"Remarketing Agent" has the meaning set forth in the Remarketing
Agreement.
"Remarketing Agreement" means the Remarketing Agreement dated as of
August 10, 2001 by and among the Company, Sprint Capital, UBS Warburg LLC and
the Purchase Contract Agent.
"Remarketing Fee" has the meaning specified in Section 5.5.
"Reorganization Event" has the meaning specified in Section 5.8(c).
"Reset Agent" has the meaning set forth in the Remarketing Agreement.
"Reset Announcement Date" means, the tenth Business Day immediately
preceding any Reset Effective Date.
"Reset Date" means the date of any Successful Remarketing.
"Reset Effective Date" means the third Business Day immediately
following any Reset Date.
"Reset Rate" means the interest rate per annum (as determined by the
Reset Agent), equal to the sum of (i) the Reset Spread and (ii) the rate of
interest on the Applicable Benchmark Security in effect on the Reset Date.
"Reset Spread" means (i) if the Reset Date is on or prior to the
twelfth Business Day before August 17, 2004, a spread amount to be determined by
the Reset Agent on the applicable Reset Announcement Date as the appropriate
spread so that the Reset Rate will be the interest rate that the Notes should
bear in order for the Applicable Principal Amount of Notes to have an
approximate aggregate market value of 100.5% of the Treasury Portfolio Purchase
Price on such Reset Date and (ii) if the Reset Date is on the third Business Day
immediately prior to August 17, 2004, a spread amount determined by the Reset
Agent on the applicable Reset Announcement Date as the appropriate spread so
that the Reset Rate will be the interest rate that the Notes should bear in
order for the Notes to have an approximate market value of 100.5% of their
principal amount on the third Business Day immediately prior to August 17, 2004.
"Responsible Officer," when used with respect to the Agent, means any
officer of the Agent assigned by the Agent to administer its corporate trust
matters.
14
"Security" means a Corporate Unit or a Treasury Unit.
"Senior Indebtedness" means, with respect to Contract Adjustment
Payments, indebtedness of any kind of the Company unless the instrument under
which such indebtedness is incurred expressly provides that it is on a parity in
right of payment with or subordinate in right of payment to the Contract
Adjustment Payments.
"Settlement Rate" has the meaning specified in Section 5.1.
"Spin-Off Transaction" means a transfer or other distribution by the
Company of a significant portion of its assets and liabilities to holders of any
class of its common stock through a spin-off, split-off, split-up or other
similar transaction.
"Sprint Capital" means Sprint Capital Corporation, a Delaware
corporation.
"Stated Amount" means $25.00.
"Subsequent Remarketing" has the meaning specified in Section 5.5(a).
"Subsequent Remarketing Date" has the meaning specified in Section
5.5(a).
"Subsidiary" means (i) a corporation, a majority of whose capital
stock with voting power, under ordinary circumstances, to elect directors is, at
the date of determination, directly or indirectly owned by the Company, by one
or more Subsidiaries of the Company or by the Company and one or more
Subsidiaries of the Company, (ii) a partnership in which the Company or a
Subsidiary of the Company holds a majority interest in the equity capital or
profits of such partnership, or (iii) any other person (other than a
corporation) in which the Company, a Subsidiary of the Company or the Company
and one or more Subsidiaries the Company, directly or indirectly, at the date of
determination, has (x) at least a majority ownership interest or (y) the power
to elect or direct the election of a majority of the directors or other
governing body of such person.
"Substitute Securities" means (i) obligations fully guaranteed by the
United States of America; (ii) demand deposits, time deposits or certificates of
deposit of depository institutions or trust companies, the
15
commercial paper, if any, of which has the highest rating from the rating
agencies; (iii) commercial paper or other short-term obligations having, at the
time of the investment therein, a rating in the highest rating category from the
rating agencies; or (iv) notes or bankers' acceptances issued by any depository
institutions or trust companies, the commercial paper, if any, of which has the
highest rating from the rating agencies.
"Successful Final Remarketing" has the meaning specified in Section
5.6(b).
"Successful Initial Remarketing" has the meaning specified in Section
5.5.
"Successful Remarketing" means any of a Successful Initial
Remarketing, Successful Subsequent Remarketing or Successful Final Remarketing.
"Successful Subsequent Remarketing" has the meaning specified in
Section 5.5(a).
"Tax Event" means the receipt by the Company of an opinion of a
nationally recognized independent tax counsel experienced in such matters (which
may be King & Spalding) to the effect that, as a result of (i) any amendment to,
change in, or announced proposed change in, the laws (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein affecting taxation, (ii) any amendment to or change
in an interpretation or application of such laws or regulations by any
legislative body, court, governmental agency or regulatory authority or (iii)
any interpretation or pronouncement that provides for a position with respect to
such laws or regulations that differs from the generally accepted position on
the date the Notes are issued, which amendment, change or proposed change is
effective or which interpretation or pronouncement is announced on or after the
date of the first issuance of Notes under the Indenture, there is more than an
insubstantial risk that interest or original issue discount paid or accrued by
Sprint Capital on the Notes would not be deductible, in whole or in part, by the
Company or Sprint Capital for United States federal income tax purposes.
"Tax Event Redemption" means, if a Tax Event shall occur and be
continuing, the redemption of the Notes, at the option of the Company, in whole
but not in part, on not less than 30 days nor more than 60 days notice.
16
"Tax Event Redemption Date" means the date upon which a Tax Event
Redemption is to occur.
"Tax Event Redemption Principal Amount" means either (i) if the Tax
Event Redemption Date occurs prior to August 17, 2004 or any earlier Successful
Remarketing, the aggregate principal amount of the Notes which are components of
Corporate Units on the Tax Event Redemption Date or (ii) if the Tax Event
Redemption Date occurs on or after August 17, 2004 or any earlier Successful
Remarketing, the aggregate principal amount of the Notes outstanding on such Tax
Event Redemption Date.
"Termination Date" means the date, if any, on which a Termination
Event occurs.
"Termination Event" means the occurrence of any of the following
events: (i) at any time on or prior to the Purchase Contract Settlement Date, a
judgment, decree or court order shall have been entered granting relief under
the Bankruptcy Code, adjudicating the Company to be insolvent, or approving as
properly filed a petition seeking reorganization or liquidation of the Company
or any other similar applicable Federal or State law, and, unless such judgment,
decree or order shall have been entered within 60 days prior to the Purchase
Contract Settlement Date, such decree or order shall have continued undischarged
and unstayed for a period of 60 days; or (ii) at any time on or prior to the
Purchase Contract Settlement Date, a judgment, decree or court order for the
appointment of a receiver or liquidator or trustee or assignee in bankruptcy or
insolvency of the Company or of its property, or for the winding up or
liquidation of its affairs, shall have been entered, and, unless such judgment,
decree or order shall have been entered within 60 days prior to the Purchase
Contract Settlement Date, such judgment, decree or order shall have continued
undischarged and unstayed for a period of 60 days; or (iii) at any time on or
prior to the Purchase Contract Settlement Date the Company shall file a petition
for relief under the Bankruptcy Code, or shall consent to the filing of a
bankruptcy proceeding against it, or shall file a petition or answer or consent
seeking reorganization or liquidation under the Bankruptcy Code or any other
similar applicable Federal or State law, or shall consent to the filing of any
such petition, or shall consent to the appointment of a receiver or liquidator
or trustee or assignee in bankruptcy or insolvency of it or of its property, or
shall make an assignment for the benefit of creditors, or shall admit in writing
its inability to pay its debts generally as they become due.
17
"Threshold Appreciation Price" has the meaning specified in Section
5.1.
"TIA" means the Trust Indenture Act of 1939, as amended, or any
successor statute.
"Trading Day" means a day on which the PCS Common Stock (i) is not
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (ii) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the PCS Common Stock.
"Treasury Portfolio" means (1) in connection with the Initial
Remarketing or any Subsequent Remarketing, a portfolio of Treasury Securities
consisting of (a) principal or interest strips of Treasury Securities which
mature on or prior to August 15, 2004 in an aggregate amount equal to the
Applicable Principal Amount and (b) with respect to the scheduled interest
payment date on the Notes that occurs on the Purchase Contract Settlement Date,
principal or interest strips of Treasury Securities which mature on or prior to
August 15, 2004 in an aggregate amount equal to the aggregate interest payment
that would be due on the Applicable Principal Amount of the Notes on such date
if the Coupon Rate on the Notes were not reset to the Reset Rate and (2) in
connection with a Tax Event Redemption, (a) if the Tax Event Redemption Date
occurs prior to August 17, 2004 or any earlier Successful Remarketing, a
portfolio of zero-coupon Treasury Securities consisting of (i) principal or
interest strips of Treasury Securities which mature on or prior to August 15,
2004 in an aggregate amount equal to the applicable Tax Event Redemption
Principal Amount and (ii) with respect to each scheduled interest payment date
on the Notes that
18
occurs after the Tax Event Redemption Date and on or before the Purchase
Contract Settlement Date, principal or interest strips of Treasury Securities
which mature on or prior to such interest payment date in an aggregate amount
equal to the aggregate interest payment that would be due on the applicable Tax
Event Redemption Principal Amount of the Notes on such date if the Coupon Rate
on the Notes were not reset to the Reset Rate, and (b) if the Tax Event
Redemption Date occurs on or after August 17, 2004 or any earlier Successful
Remarketing, a portfolio of zero-coupon Treasury Securities consisting of (i)
principal or interest strips of Treasury Securities which mature on or prior to
August 15, 2006 in an aggregate amount equal to the applicable Tax Event
Redemption Principal Amount and (ii) with respect to each scheduled interest
payment date on the Notes that occurs after the Tax Event Redemption Date,
principal or interest strips of such Treasury Securities which mature on or
prior to such interest payment date in an aggregate amount equal to the
aggregate interest payment that would be due on the applicable Tax Event
Redemption Principal Amount of the Notes on such date. The Company may in its
sole discretion choose to substitute Substitute Securities for the Treasury
Securities which compose the Treasury Portfolio, in which case such Substitute
Securities shall be deemed to be Treasury Securities for all purposes under this
definition.
"Treasury Portfolio Purchase Price" means the lowest aggregate price
quoted by a Primary Treasury Dealer to the Quotation Agent (i) in the case of a
Tax Event Redemption, on the third Business Day immediately preceding the Tax
Event Redemption Date for the purchase of the applicable Treasury Portfolio for
settlement on the Tax Event Redemption Date and (ii) in the case of any
Successful Remarketing other than the Final Remarketing for the purchase of the
applicable Treasury Portfolio for settlement on the third Business Day
immediately after such Successful Remarketing.
"Treasury Security" or "Treasury Securities" means zero-coupon U.S.
Treasury Securities (CUSIP Number 000000XX0) which are the principal strip of
the U.S. Treasury Securities which mature on August 15, 2004.
"Treasury Units" means the collective rights and obligations of a
Holder of a Treasury Units Certificate in respect of the Treasury Securities,
subject to the Pledge thereof, and the related Purchase Contract.
"Treasury Units Certificate" means a certificate evidencing the rights
and obligations of a Holder in respect of the number of Treasury Units specified
on such certificate.
"Treasury Units Register" and "Treasury Units Registrar" have the
respective meanings specified in Section 3.5.
"Triggering Distribution" has the meaning specified in Section 5.8(a).
"Triggering Tender Offer" has the meaning specified in Section 5.8(a).
19
"Vice President" means any vice president, whether or not designated
by a number or a word or words added before or after the title "vice president."
Section 1.2. Compliance Certificates and Opinions. Except as otherwise
expressly provided by this Agreement, upon any application or request by the
Company to the Agent to take any action under any provision of this Agreement,
the Company shall furnish to the Agent an Officer's Certificate stating that all
conditions precedent, if any, provided for in this Agreement relating to the
proposed action have been complied with and, if reasonably requested by the
Agent, an Opinion of Counsel stating that, in the opinion of such counsel, all
such conditions precedent, if any, have been complied with, except that in the
case of any such application or request as to which the furnishing of such
documents is specifically required by any provision of this Agreement relating
to such particular application or request, no additional certificate or opinion
need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Agreement shall include:
(1) a statement that each Person signing such certificate or opinion
has read such covenant or condition and the definitions herein relating
thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such Person, he or she or
it has made such examination or investigation as is necessary to enable
such individual to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such Person,
such condition or covenant has been complied with.
SECTION 1.3. Form of Documents Delivered to Agent. In any case where
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified by,
or covered by the opinion of, only one such Person, or that they be so certified
or covered by only one document, but one such Person may certify or give an
opinion
20
with respect to some matters and one or more other such Persons as to
other matters, and any such Person may certify or give an opinion as to such
matters in one or several documents.
Any certificate or opinion of the Company may be based, insofar as it
relates to legal matters, upon a certificate or opinion of, or representations
by, counsel, unless the Company knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
the matters upon which his certificate or opinion is based are erroneous. Any
such certificate or Opinion of Counsel may be based, insofar as it relates to
factual matters, upon a certificate or opinion of, or representations by, the
Company stating that the information with respect to such factual matters is in
the possession of the Company unless the Person giving such certificate or
Opinion of Counsel knows, or in the exercise of reasonable care should know,
that the certificate or opinion or representations with respect to such matters
are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Agreement, they may, but need not, be consolidated and
form one instrument.
SECTION 1.4. Acts of Holders; Record Dates. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Agreement to be given or taken by Holders may be embodied in and evidenced
by one or more instruments of substantially similar tenor signed by such Holders
in person or by agent duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments are delivered to the Agent and, where it is hereby expressly
required, to the Company. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Holders signing such instrument or instruments. Proof of execution
of any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Agreement and (subject to Section 7.1)
conclusive in favor of the Agent and the Company, if made in the manner provided
in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner which the Agent deems
sufficient.
21
(c) The ownership of Securities shall be proved by the Corporate Units
Register or the Treasury Units Register, as the case may be.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Certificate shall bind every future
Holder of the same Certificate and the Holder of every Certificate issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Agent or the
Company in reliance thereon, whether or not notation of such action is made upon
such Certificate.
(e) The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities entitled to give, make or take
any request, demand, authorization, direction, notice, consent, waiver or other
action provided or permitted by this Agreement to be given, made or taken by
Holders of Securities. If any record date is set pursuant to this paragraph, the
Holders of the Outstanding Securities, on such record date, and no other
Holders, shall be entitled to take the relevant action with respect to the
Corporate Units or the Treasury Units, as the case may be, whether or not such
Holders remain Holders after such record date; provided that no such action
shall be effective hereunder unless taken on or prior to the applicable
Expiration Date by Holders of the requisite number of Outstanding Securities on
such record date. Nothing in this paragraph shall be construed to prevent the
Company from setting a new record date for any action for which a record date
has previously been set pursuant to this paragraph (whereupon the record date
previously set shall automatically and with no action by any Person be canceled
and of no effect), and nothing in this paragraph shall be construed to render
ineffective any action taken by Holders of the requisite number of Outstanding
Securities on the date such action is taken. Promptly after any record date is
set pursuant to this paragraph, the Company, at its own expense, shall cause
notice of such record date, the proposed action by Holders and the applicable
Expiration Date to be given to the Agent in writing and to each Holder of
Securities in the manner set forth in Section 1.6.
With respect to any record date set pursuant to this Section, the
Company may designate any date as the "Expiration Date" and from time to time
may change the Expiration Date to any earlier or later day; provided that no
such change shall be effective unless notice of the proposed new Expiration Date
is given to the Agent in writing, and to each Holder of Securities in the manner
set
22
forth in Section 1.6, on or prior to the existing Expiration Date. If an
Expiration Date is not designated with respect to any record date set pursuant
to this Section, the Company shall be deemed to have initially designated the
180th day after such record date as the Expiration Date with respect thereto,
subject to its right to change the Expiration Date as provided in this
paragraph. Notwithstanding the foregoing, no Expiration Date shall be later than
the 180th day after the applicable record date.
SECTION 1.5. Notices. Any request, demand, authorization, direction,
notice, consent, waiver or Act of Holders or other document provided or
permitted by this Agreement to be made upon, given or furnished to, or filed
with,
(1) the Agent by any Holder or by the Company shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided) if
made, given, furnished or filed in writing and personally delivered or
mailed, first-class postage prepaid, to the Agent at 000 Xxxx Xxxxx Street,
Mail Code OH1-0181, Xxxxxxxx, Xxxx 00000, Attention: Global Corporate Trust
Services Division, or at any other address previously furnished in writing
by the Agent to the Holders and the Company; or
(2) the Company by the Agent or by any Holder shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided) if
made, given, furnished or filed in writing and personally delivered or
mailed, first-class postage prepaid, to the Company at Sprint Corporation,
0000 Xxxxxxx Xxxxxxx Xxxxxxx, Xxxxxxxx, Xxxxxx 00000, Attention: Corporate
Secretary, or at any other address previously furnished in writing to the
Agent by the Company; or
(3) the Collateral Agent by the Agent, the Company or any Holder shall
be sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if made, given, furnished or filed in writing and
personally delivered or mailed, first-class postage prepaid, addressed to
the Collateral Agent at 000 Xxxx Xxxxx Street, Mail Code OH1-0181,
Xxxxxxxx, Xxxx 00000, Attention: Global Corporate Trust Services Division,
or at any other address previously furnished in writing by the Collateral
Agent to the Agent, the Company and the Holders; or
(4) the Indenture Trustee by the Company shall be sufficient for every
purpose hereunder (unless
23
otherwise herein expressly provided) if made, given, furnished or filed in
writing and personally delivered or mailed, first-class postage prepaid,
addressed to the Indenture Trustee at 000 Xxxx Xxxxx Street, Mail Code
OH1-0181, Xxxxxxxx, XX 00000, Attention: Global Corporate Trust Services
Division, or at any other address previously furnished in writing by the
Indenture Trustee to the Company.
SECTION 1.6. Notice to Holders; Waiver. Where this Agreement provides
for notice to Holders of any event, such notice shall be sufficiently given
(unless otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid, to each Holder affected by such event, at its
address as it appears in the applicable Register, not later than the latest
date, and not earlier than the earliest date, prescribed for the giving of such
notice. In any case where notice to Holders is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders. Where this Agreement provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders shall be filed with the Agent, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Agent shall
constitute a sufficient notification for every purpose hereunder.
SECTION 1.7. Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
SECTION 1.8. Successors and Assigns. All covenants and agreements in
this Agreement by the Company shall bind its successors and assigns, whether so
expressed or not.
SECTION 1.9. Separability Clause. In case any provision in this
Agreement or in the Securities shall be invalid, illegal or unenforceable, then,
to the extent permitted by law, the validity, legality and enforceability
24
of the remaining provisions hereof and thereof shall not in any way be affected
or impaired thereby.
SECTION 1.10. Benefits of Agreement. Nothing in this Agreement or in
the Securities, express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder and, to the extent provided
hereby, the Holders, any benefits or any legal or equitable right, remedy or
claim under this Agreement. The Holders from time to time shall be beneficiaries
of this Agreement and shall be bound by all of the applicable terms and
conditions hereof and of the Securities evidenced by their Certificates by their
acceptance of delivery of such Certificates.
SECTION 1.11. Governing Law. THIS AGREEMENT AND THE SECURITIES SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
SECTION 1.12. Legal Holidays. (a) In any case where any Purchase
Contract Settlement Date shall not be a Business Day, then (notwithstanding any
other provision of this Agreement, the Corporate Units Certificates or the
Treasury Units Certificates), the Purchase Contracts shall not be performed on
such date, but the Purchase Contracts shall be performed on the immediately
following Business Day with the same force and effect as if performed on the
Purchase Contract Settlement Date.
(b) If any date on which Contract Adjustment Payments are to be made
on the Purchase Contracts is not a Business Day, then payment of the Contract
Adjustment Payments payable on that date will be made on the next succeeding day
which is a Business Day, and no interest or payment will be paid in respect of
the delay. However, if that Business Day is in the next succeeding calendar
year, the payment will be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on that Payment Date.
SECTION 1.13. Counterparts. This Agreement may be executed in any
number of counterparts by the parties hereto on separate counterparts, each of
which, when so executed and delivered, shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument.
SECTION 1.14. Inspection of Agreement. A copy of this Agreement shall
be available at all reasonable times
25
during normal business hours at the Corporate Trust Office for inspection by any
Holder.
SECTION 1.15. Consent to Tax Treatment of Securities. Each Holder of a
Security, by acceptance thereof, shall be deemed to have agreed (i) to treat
itself (or, if the Holder holds the Security on behalf of the actual beneficial
owner of the Security in a nominee, custodial, or similar arrangement, such
actual beneficial owner) as the owner, for U.S. federal income tax purposes, of
the Notes or the Applicable Ownership Interest of the Treasury Portfolio
included in such Holder's Corporate Units, or the Treasury Securities included
in such Holder's Treasury Units, as the case may be and (ii) to treat the Notes
as indebtedness for U.S. federal income tax purposes.
ARTICLE II
Certificate Forms
SECTION 2.1. Forms of Certificates Generally. The Corporate Units
Certificates (including the form of Purchase Contract forming part of the
Corporate Units evidenced thereby) shall be in substantially the form set forth
in Exhibit A hereto, with such letters, numbers or other marks of identification
or designation and such legends or endorsements printed, lithographed or
engraved thereon as may be required by the rules of any securities exchange on
which the Corporate Units are listed or any depositary therefor, or as may,
consistently herewith, be determined by the officers of the Company executing
such Corporate Units Certificates, as evidenced by their execution of the
Corporate Units Certificates.
The definitive Corporate Units Certificates shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers of the Company executing such
Corporate Units Certificates, consistent with the provisions of this Agreement,
as evidenced by their execution thereof.
The Treasury Units Certificates (including the form of Purchase
Contract forming part of the Treasury Units evidenced thereby) shall be in
substantially the form set forth in Exhibit B hereto, with such letters, numbers
or other marks of identification or designation and such legends or endorsements
printed, lithographed or engraved thereon as may be required by the rules of any
securities exchange on which the Treasury Units are listed or any depositary
therefor, or as may, consistently herewith, be
26
determined by the officers of the Company executing such Treasury Units
Certificates, as evidenced by their execution of the Treasury Units
Certificates.
The definitive Treasury Units Certificates shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers of the Company executing such
Treasury Units Certificates, consistent with the provisions of this Agreement,
as evidenced by their execution thereof.
Every Global Certificate authenticated, executed on behalf of the
Holders and delivered hereunder shall bear a legend in substantially the
following form:
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED IN THE
NAME OF THE CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE
EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF
THIS CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY
PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT.
SECTION 2.2. Form of Agent's Certificate of Authentication. The form
of the Agent's certificate of authentication of the Corporate Units shall be in
substantially the form set forth on the form of the Corporate Units
Certificates.
The form of the Agent's certificate of authentication of the Treasury
Units shall be in substantially the form set forth on the form of the Treasury
Units Certificates.
ARTICLE III
The Securities
SECTION 3.1. Title and Terms; Denominations. The aggregate number of
Corporate Units and Treasury Units evidenced by Certificates authenticated,
executed on behalf of the Holders and delivered hereunder is limited to
60,000,000 (or 69,000,000 if the Underwriters' overallotment option is exercised
in full) except for Certificates authenticated, executed and delivered upon
registration of transfer of, in exchange for, or in lieu of, other
27
Certificates pursuant to Section 3.4, 3.5, 3.9, 3.10, 3.13, 3.14, 5.9 or 8.5.
The Certificates shall be issuable only in registered form and only in
denominations of a single Corporate Unit or Treasury Unit and any integral
multiple thereof.
SECTION 3.2. Rights and Obligations Evidenced by the Certificates.
Each Corporate Units Certificate shall evidence the number of Corporate Units
specified therein, with each such Corporate Unit representing the ownership by
the Holder thereof of a beneficial interest in a Note or the Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, subject to the
Pledge of such Note or the Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, by such Holder pursuant to the Pledge Agreement,
and the rights and obligations of the Holder thereof and the Company under one
Purchase Contract. The Agent as attorney-in-fact for, and on behalf of, the
Holder of each Corporate Unit shall pledge, pursuant to the Pledge Agreement,
the Note or the Applicable Ownership Interest of the Treasury Portfolio, as the
case may be, forming a part of such Corporate Unit, to the Collateral Agent and
grant to the Collateral Agent a security interest in the right, title, and
interest of such Holder in such Note or the Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, for the benefit of the Company, to
secure the obligation of the Holder under each Purchase Contract to purchase the
PCS Common Stock of the Company.
Each Treasury Units Certificate shall evidence the number of Treasury
Units specified therein, with each such Treasury Unit representing the ownership
by the Holder thereof of a 1/40, or 2.5%, undivided beneficial interest in a
Treasury Security with a principal amount at maturity equal to $1,000, subject
to the Pledge of such Treasury Security by such Holder pursuant to the Pledge
Agreement, and the rights and obligations of the Holder thereof and the Company
under one Purchase Contract. The Agent as attorney-in-fact for, and on behalf
of, the Holder of each Treasury Unit shall pledge, pursuant to the Pledge
Agreement, the beneficial interest in the Treasury Security to the Collateral
Agent and grant to the Collateral Agent a security interest in the right, title
and interest of such Holder in such Treasury Security, for the benefit of the
Company, to secure the obligation of the Holder under each Purchase Contract to
purchase the PCS Common Stock of the Company.
28
Prior to the purchase of PCS Common Stock under each Purchase
Contract, such Purchase Contracts shall not entitle the Holder of a Security to
any of the rights of a holder of shares of PCS Common Stock, including, without
limitation, the right to vote or receive any dividends or other payments or to
consent or to receive notice as a stockholder in respect of the meetings of
stockholders or for the election of directors of the Company or for any other
matter, or any other rights whatsoever as a shareholder of the Company, except
as expressly provided under Section 5.2(a).
SECTION 3.3. Execution, Authentication, Delivery and Dating. Subject
to the provisions of Sections 3.13 and 3.14 hereof, upon the execution and
delivery of this Agreement, and at any time and from time to time thereafter,
the Company may deliver Certificates executed by the Company to the Agent for
authentication, execution on behalf of the Holders and delivery, together with
its Issuer Order for authentication of such Certificates, and the Agent in
accordance with such Issuer Order shall authenticate, execute on behalf of the
Holders and deliver such Certificates.
The Certificates shall be executed on behalf of the Company by its
Chairman of the Board, its President or one of its Vice Presidents and its
Treasurer or one of its Assistant Treasurers or its Secretary or one of its
Assistant Secretaries. The signature of any of these officers on the
Certificates may be manual or facsimile.
Certificates bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Certificates or did not
hold such offices at the date of such Certificates.
No Purchase Contract evidenced by a Certificate shall be valid until
such Certificate has been executed on behalf of the Holder by the manual
signature of an authorized signatory of the Agent, as such Holder's
attorney-in-fact. Such signature by an authorized signatory of the Agent shall
be conclusive evidence that the Holder of such Certificate has entered into the
Purchase Contracts evidenced by such Certificate.
Each Certificate shall be dated the date of its authentication.
29
No Certificate shall be entitled to any benefit under this Agreement
or be valid or obligatory for any purpose unless there appears on such
Certificate a certificate of authentication substantially in the form provided
for herein executed by an authorized signatory of the Agent by manual signature,
and such certificate upon any Certificate shall be conclusive evidence, and the
only evidence, that such Certificate has been duly authenticated and delivered
hereunder.
SECTION 3.4. Temporary Certificates. Pending the preparation of
definitive Certificates, the Company shall execute and deliver to the Agent, and
the Agent shall authenticate, execute on behalf of the Holders, and deliver, in
lieu of such definitive Certificates, temporary Certificates which are in
substantially the form set forth in Exhibit A or Exhibit B hereto, as the case
may be, with such letters, numbers or other marks of identification or
designation and such legends or endorsements printed, lithographed or engraved
thereon as may be required by the rules of any securities exchange on which the
Corporate Units or Treasury Units are listed, or as may, consistently herewith,
be determined by the officers of the Company executing such Certificates, as
evidenced by their execution of the Certificates.
If temporary Certificates are issued, the Company will cause
definitive Certificates to be prepared without unreasonable delay. After the
preparation of definitive Certificates, the temporary Certificates shall be
exchangeable for definitive Certificates upon surrender of the temporary
Certificates at the Corporate Trust Office or the New York office, at the
expense of the Company and without charge to the Holder. Upon surrender for
cancelation of any one or more temporary Certificates, the Company shall execute
and deliver to the Agent, and the Agent shall authenticate, execute on behalf of
the Holder, and deliver in exchange therefor, one or more definitive
Certificates of like tenor and denominations and evidencing a like number of
Corporate Units or Treasury Units, as the case may be, as the temporary
Certificate or Certificates so surrendered. Until so exchanged, the temporary
Certificates shall in all respects evidence the same benefits and the same
obligations with respect to the Corporate Units or Treasury Units, as the case
may be, evidenced thereby as definitive Certificates.
SECTION 3.5. Registration; Registration of Transfer and Exchange. The
Agent shall keep at the Corporate Trust Office a Register (the "Corporate Units
Register") in which, subject to such reasonable regulations
30
as it may prescribe, the Agent shall provide for the registration of Corporate
Units Certificates and of transfers of Corporate Units Certificates (the Agent,
in such capacity, the "Corporate Units Registrar") and a Register (the "Treasury
Units Register") in which, subject to such reasonable regulations as it may
prescribe, the Agent shall provide for the registration of Treasury Units
Certificates and of transfers of Treasury Units Certificates (the Agent, in
such capacity, the "Treasury Units Registrar").
Upon surrender for registration of transfer of any Certificate at the
Corporate Trust Office or the New York Office, the Company shall execute and
deliver to the Agent, and the Agent shall authenticate, execute on behalf of the
designated transferee or transferees, and deliver, in the name of the designated
transferee or transferees, one or more new Certificates of any authorized
denominations, like tenor, and evidencing a like number of Corporate Units or
Treasury Units, as the case may be.
At the option of the Holder, Certificates may be exchanged for other
Certificates, of any authorized denominations and evidencing a like number of
Corporate Units or Treasury Units, as the case may be, upon surrender of the
Certificates to be exchanged at the Corporate Trust Office or the New York
Office. Whenever any Certificates are so surrendered for exchange, the Company
shall execute and deliver to the Agent, and the Agent shall authenticate,
execute on behalf of the Holder, and deliver the Certificates which the Holder
making the exchange is entitled to receive.
All Certificates issued upon any registration of transfer or exchange
of a Certificate shall evidence the ownership of the same number of Corporate
Units or Treasury Units, as the case may be, and be entitled to the same
benefits and subject to the same obligations, under this Agreement as the
Corporate Units or Treasury Units, as the case may be, evidenced by the
Certificate surrendered upon such registration of transfer or exchange.
Every Certificate presented or surrendered for registration of
transfer or for exchange shall (if so required by the Agent) be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to
the Company and the Agent duly executed, by the Holder thereof or its attorney
duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of a Certificate, but
31
the Company and the Agent may require payment from the Holder of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Certificates, other
than any exchanges pursuant to Sections 3.4, 3.9 and 8.5 not involving any
transfer.
Notwithstanding the foregoing, the Company shall not be obligated to
execute and deliver to the Agent, and the Agent shall not be obligated to
authenticate, execute on behalf of the Holder and deliver, any Certificate
presented or surrendered for registration of transfer or for exchange on or
after the Business Day immediately preceding the earlier of the Purchase
Contract Settlement Date or the Termination Date. In lieu of delivery of a new
Certificate, upon satisfaction of the applicable conditions specified above in
this Section and receipt of appropriate registration or transfer instructions
from such Holder, the Agent shall (i) if the Purchase Contract Settlement Date
has occurred, deliver the shares of PCS Common Stock issuable in respect of the
Purchase Contracts forming a part of the Securities evidenced by such
Certificate (together with any cash or other property to which the Holder is
entitled), or (ii) if a Termination Event shall have occurred prior to the
Purchase Contract Settlement Date, transfer the Notes, the appropriate
Applicable Ownership Interest of the Treasury Portfolio or the Treasury
Securities, as the case may be, evidenced thereby, in each case subject to the
applicable conditions and in accordance with the applicable provisions of
Article Five hereof.
SECTION 3.6. Book-Entry Interests. The Certificates, on original
issuance, will be issued in the form of one or more fully registered Global
Certificates, to be delivered to the Depositary by, or on behalf of, the
Company. Such Global Certificate shall initially be registered on the books and
records of the Company in the name of Cede & Co., the nominee of the Depositary,
and no Beneficial Owner will receive a definitive Certificate representing such
Beneficial Owner's interest in such Global Certificate, except as provided in
Section 3.9. The Agent shall enter into an agreement with the Depositary if so
requested by the Company. Unless and until definitive, fully registered
Certificates have been issued to Beneficial Owners pursuant to Section 3.9:
(a) the provisions of this Section 3.6 shall be in full force and
effect;
(b) the Company shall be entitled to deal with the Clearing Agency for
all purposes of this Agreement
32
(including receiving approvals, votes or consents hereunder) as the Holder
of the Securities and the sole holder of the Global Certificate(s) and
shall have no obligation to the Beneficial Owners;
(c) to the extent that the provisions of this Section 3.6 conflict
with any other provisions of this Agreement, the provisions of this Section
3.6 shall control; and
(d) the rights of the Beneficial Owners shall be exercised only
through the Clearing Agency and shall be limited to those established by
law and agreements between such Beneficial Owners and the Clearing Agency
and/or the Clearing Agency Participants. The Clearing Agency will make book
entry transfers among Clearing Agency Participants.
SECTION 3.7. Notices to Holders. Whenever a notice or other
communication to the Holders is required to be given under this Agreement, the
Company or the Company's agent shall give such notices and communications to the
Holders and, with respect to any Securities registered in the name of a Clearing
Agency or the nominee of a Clearing Agency, the Company or the Company's agent
shall, except as set forth herein, have no obligations to the Beneficial Owners.
SECTION 3.8. Appointment of Successor Clearing Agency. If any Clearing
Agency elects to discontinue its services as securities depositary with respect
to the Securities, the Company may, in its sole discretion, appoint a successor
Clearing Agency with respect to the Securities.
SECTION 3.9. Definitive Certificates. If (i) a Clearing Agency elects
to discontinue its services as securities depositary with respect to the
Securities and a successor Clearing Agency is not appointed within 90 days after
such discontinuance pursuant to Section 3.8, (ii) the Company elects to
terminate the book-entry system through the Clearing Agency with respect to the
Securities, or (iii) there shall have occurred and be continuing a default by
the Company in respect of its obligations under one or more Purchase Contracts,
or one or more Notes, then upon surrender of the Global Certificates
representing the Book-Entry Interests with respect to the Securities by the
Clearing Agency, accompanied by registration instructions, the Company shall
cause definitive Certificates to be delivered to Beneficial Owners in accordance
with the instructions of the Clearing Agency. The Company shall not be liable
for any delay in delivery of such instructions and
33
may conclusively rely on and shall be protected in relying on, such
instructions.
SECTION 3.10. Mutilated, Destroyed, Lost and Stolen Certificates. If
any mutilated Certificate is surrendered to the Agent, the Company shall execute
and deliver to the Agent, and the Agent shall authenticate, execute on behalf of
the Holder, and deliver in exchange therefor, a new Certificate at the cost of
the Holder, evidencing the same number of Corporate Units or Treasury Units, as
the case may be, and bearing a Certificate number not contemporaneously
outstanding.
If there shall be delivered to the Company and the Agent (i) evidence
to their satisfaction of the destruction, loss or theft of any Certificate, and
(ii) such security or indemnity at the cost of the Holder as may be required by
them to hold each of them and any agent of any of them harmless, then, in the
absence of notice to the Company or the Agent that such Certificate has been
acquired by a bona fide purchaser, the Company shall execute and deliver to the
Agent, and the Agent shall authenticate, execute on behalf of the Holder, and
deliver to the Holder, in lieu of any such destroyed, lost or stolen
Certificate, a new Certificate, evidencing the same number of Corporate Units or
Treasury Units, as the case may be, and bearing a Certificate number not
contemporaneously outstanding.
Notwithstanding the foregoing, the Company shall not be obligated to
execute and deliver to the Agent, and the Agent shall not be obligated to
authenticate, execute on behalf of the Holder, and deliver to the Holder, a
Certificate on or after the Business Day immediately preceding the earlier of
the Purchase Contract Settlement Date or the Termination Date. In lieu of
delivery of a new Certificate, upon satisfaction of the applicable conditions
specified above in this Section and receipt of appropriate registration or
transfer instructions from such Holder, the Agent shall (i) if the Purchase
Contract Settlement Date has occurred, deliver the shares of PCS Common Stock
issuable in respect of the Purchase Contracts forming a part of the Securities
evidenced by such Certificate (together with any cash or other property to which
the Holder is entitled), or (ii) if a Termination Event shall have occurred
prior to the Purchase Contract Settlement Date, transfer the Notes, the
appropriate Applicable Ownership Interest of the Treasury Portfolio or the
Treasury Securities, as the case may be, evidenced thereby, in each case subject
to the applicable conditions and in accordance with the applicable provisions of
Article Five hereof.
34
Upon the issuance of any new Certificate under this Section, the
Company and the Agent may require the payment by the Holder of a sum sufficient
to cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the reasonable fees and expenses of
the Agent) connected therewith.
Every new Certificate issued pursuant to this Section in lieu of any
destroyed, lost or stolen Certificate shall constitute an original additional
contractual obligation of the Company and of the Holder in respect of the
Security evidenced thereby, whether or not the destroyed, lost or stolen
Certificate (and the Securities evidenced thereby) shall be at any time
enforceable by anyone, and shall be entitled to all the benefits and be subject
to all the obligations of this Agreement equally and proportionately with any
and all other Certificates delivered hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Certificates.
SECTION 3.11. Persons Deemed Owners. Prior to due presentment of a
Certificate for registration of transfer, the Company and the Agent, and any
agent of the Company or the Agent, may treat the Person in whose name such
Certificate is registered as the owner of the Corporate Units or Treasury Units
evidenced thereby, for the purpose of receiving interest on the Notes or on the
maturing quarterly interest strips of the Treasury Portfolio, as applicable,
receiving payment of Contract Adjustment Payments, performance of the Purchase
Contracts and for all other purposes whatsoever, whether or not any interest on
the Notes shall be overdue and notwithstanding any notice to the contrary, and
neither the Company nor the Agent, nor any agent of the Company or the Agent,
shall be affected by notice to the contrary.
Notwithstanding the foregoing, with respect to any Global Certificate,
nothing herein shall prevent the Company, the Agent or any agent of the Company
or the Agent, from giving effect to any written certification, proxy or other
authorization furnished by any Clearing Agency (or its nominee), as a Holder,
with respect to such Global Certificate or impair, as between such Clearing
Agency and owners of beneficial interests in such Global Certificate, the
operation of customary practices governing the exercise of rights of such
Clearing Agency (or its nominee) as Holder of such Global Certificate.
35
SECTION 3.12. Cancelation. All Certificates surrendered for delivery
of shares of PCS Common Stock on or after the Purchase Contract Settlement Date,
upon the transfer of Notes, the appropriate Applicable Ownership Interest of the
Treasury Portfolio or Treasury Securities, as the case may be, after the
occurrence of a Termination Event or pursuant to an Early Settlement, or upon
the registration of a transfer or exchange of a Security, or a Collateral
Substitution or the re-establishment of a Corporate Unit or Treasury Unit shall,
if surrendered to any Person other than the Agent, be delivered to the Agent
and, if not already canceled, shall be promptly canceled by it. The Company may
at any time deliver to the Agent for cancelation any Certificates previously
authenticated, executed and delivered hereunder which the Company may have
acquired in any manner whatsoever, and all Certificates so delivered shall, upon
Issuer Order, be promptly canceled by the Agent. No Certificates shall be
authenticated, executed on behalf of the Holder and delivered in lieu of or in
exchange for any Certificates canceled as provided in this Section, except as
expressly permitted by this Agreement. All canceled Certificates held by the
Agent shall upon written request be returned to the Company.
If the Company or any Affiliate of the Company shall acquire any
Certificate, such acquisition shall not operate as a cancelation of such
Certificate unless and until such Certificate is delivered to the Agent canceled
or for cancelation.
SECTION 3.13. Establishment of Treasury Units. A Holder may separate
the Notes or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as applicable, from the related Purchase Contracts in respect of a
Corporate Unit by substituting for such Notes or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, Treasury
Securities in an aggregate principal amount of such Notes or the appropriate
Applicable Ownership Interest (as specified in clause (i) of the definition of
such term) of the Treasury Portfolio, as applicable (a "Collateral
Substitution"), at any time from and after the date of this Agreement and on or
prior to the fifth Business Day immediately preceding the Purchase Contract
Settlement Date in the case of the Notes and on or prior to the second Business
Day immediately preceding the Purchase Contract Settlement Date in the case of
the appropriate Applicable Ownership Interest of the Treasury Portfolio, in each
case by:
(a) depositing with the Collateral Agent Treasury Securities having an
aggregate principal amount equal
36
to the aggregate principal amount of the Notes comprising part of such
Corporate Units or the appropriate Applicable Ownership Interest (as
specified in clause (i) of the definition of such term) of the Treasury
Portfolio comprising part of such Corporate Units, as the case may be, and
(b) transferring the related Corporate Units to the Agent accompanied
by a notice to the Agent, substantially in the form of Exhibit D hereto,
stating that the Holder has transferred the relevant amount of Treasury
Securities to the Collateral Agent and requesting that the Agent instruct
the Collateral Agent to release the Notes or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be,
underlying such Corporate Units, whereupon the Agent shall promptly give
such instruction to the Collateral Agent, substantially in the form of
Exhibit C hereto.
Upon receipt of the Treasury Securities described in clause (a) above
and the instruction described in clause (b) above, in accordance with the terms
of the Pledge Agreement, the Collateral Agent will release to the Agent, on
behalf of the Holder, Notes or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, as the case may be, having the appropriate aggregate
principal amount in the case of such Notes or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, from the
Pledge, free and clear of the Company's security interest therein, and upon
receipt thereof the Agent shall promptly:
(i) cancel the related Corporate Units;
(ii) transfer the Notes or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, to the Holder; and
(iii) authenticate, execute on behalf of such Holder and deliver a
Treasury Units Certificate executed by the Company in accordance with
Section 3.3 evidencing the same number of Purchase Contracts as were
evidenced by the canceled Corporate Units.
Holders who elect to separate the Notes or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, from the
related Purchase Contract and to substitute Treasury Securities for such Notes
or the appropriate Applicable Ownership Interest of the Treasury Portfolio, as
the case may be, shall be
37
responsible for any fees or expenses payable to the Collateral Agent for its
services as Collateral Agent in respect of the substitution, and the Company
shall not be responsible for any such fees or expenses.
Holders may make Collateral Substitutions (i) only in integral
multiples of 40 Corporate Units if Notes are being substituted for by Treasury
Securities, or (ii) only in integral multiples of 8,000 Corporate Units if the
appropriate Applicable Ownership Interests of the Treasury Portfolio are being
substituted for by Treasury Securities.
In the event a Holder making a Collateral Substitution pursuant to
this Section 3.13 fails to effect a book-entry transfer of the Corporate Units
or fails to deliver a Corporate Units Certificate(s) to the Agent after
depositing Treasury Securities with the Collateral Agent, the Notes or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, constituting a part of such Corporate Units, and any interest on such
Note or the Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, shall be held in the name of the Agent or its nominee in trust for the
benefit of such Holder, until such Corporate Units are so transferred or the
Corporate Units Certificate is so delivered, as the case may be, or, with
respect to a Corporate Units Certificate, such Holder provides evidence
satisfactory to the Company and the Agent that such Corporate Units Certificate
has been destroyed, lost or stolen, together with any indemnity that may be
required by the Agent and the Company.
Except as described in this Section 3.13, for so long as the Purchase
Contract underlying a Corporate Unit remains in effect, such Corporate Unit
shall not be separable into its constituent parts, and the rights and
obligations of the Holder in respect of the Notes or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, and Purchase
Contract comprising such Corporate Unit may be acquired, and may be transferred
and exchanged, only as a Corporate Unit.
SECTION 3.14. Reestablishment of Corporate Units. A Holder of a
Treasury Unit may recreate Corporate Units at any time (i) if a Tax Event
Redemption or a Successful Remarketing has not occurred, on or prior to the
fifth Business Day immediately preceding the Purchase Contract Settlement Date,
and (ii) if a Tax Event Redemption or a Successful Remarketing has occurred and
an Applicable Ownership Interest in the Treasury Portfolio has become a
component of the Corporate Units, on or prior to the second
38
Business Day immediately preceding the Purchase Contract Settlement Date, in
each case by:
(a) depositing with the Collateral Agent Notes or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may
be, having an aggregate principal amount in the case of the Notes, or an
appropriate Applicable Ownership Interest (as defined in clause (i) of the
definition of such term) of the Treasury Portfolio, as the case may be,
equal to the aggregate principal amount of the Treasury Securities
comprising part of the Treasury Units and
(b) transferring the related Treasury Units to the Agent accompanied
by a notice to the Agent, substantially in the form of Exhibit D hereto,
stating that the 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 and requesting that the Agent instruct
the Collateral Agent to release the Treasury Securities underlying such
Treasury Units, whereupon the Agent shall promptly give such instruction to
the Collateral Agent, substantially in the form of Exhibit C hereto.
Upon receipt of the Notes or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, described in clause (a)
above and the instruction described in clause (b) above, in accordance with the
terms of the Pledge Agreement, the Collateral Agent will release to the Agent,
on behalf of the Holder, the Treasury Securities having a corresponding
aggregate principal amount from the Pledge, free and clear of the Company's
security interest therein, and upon receipt thereof the Agent shall promptly:
(i) cancel the related Treasury Units;
(ii) transfer the Treasury Securities to the Holder; and
(iii) authenticate, execute on behalf of such Holder and deliver a
Corporate Units Certificate executed by the Company in accordance with
Section 3.3 evidencing the same number of Purchase Contracts as were
evidenced by the canceled Treasury Units.
Holders of Treasury Units may reestablish Corporate Units in integral
multiples of 40 Treasury Units for 40 Corporate Units if a Tax Event Redemption
or a Successful Remarketing has not occurred, and in integral
39
multiples of 8,000 Treasury Units for 8,000 Corporate Units if a Tax Event or a
Successful Remarketing has occurred.
In the event a Holder re-establishing Corporate Units pursuant to this
Section 3.14 fails to effect a book-entry transfer of the Treasury Units or
fails to deliver a Treasury Units Certificate(s) to the Agent after depositing
Notes or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, with the Collateral Agent, the Treasury
Securities constituting a part of such Treasury Units shall be held in the name
of the Agent or its nominee in trust for the benefit of such Holder, until such
Treasury Units are so transferred or the Treasury Units Certificate is so
delivered, as the case may be, or, with respect to a Treasury Units Certificate,
such Holder provides evidence satisfactory to the Company and the Agent that
such Treasury Units Certificate has been destroyed, lost or stolen, together
with any indemnity that may be required by the Agent and the Company.
Except as provided in this Section 3.14, for so long as the Purchase
Contract underlying a Treasury Unit remains in effect, such Treasury Unit shall
not be separable into its constituent parts and the rights and obligations of
the Holder of such Treasury Unit in respect of the Treasury Security and
Purchase Contract comprising such Treasury Unit may be acquired, and may be
transferred and exchanged, only as a Treasury Unit.
SECTION 3.15. Transfer of Collateral upon Occurrence of Termination
Event. Upon the occurrence of a Termination Event and the transfer to the Agent
of the Notes, the appropriate Applicable Ownership Interest of the Treasury
Portfolio or the Treasury Securities, as the case may be, underlying the
Corporate Units and the Treasury Units pursuant to the terms of the Pledge
Agreement, the Agent shall request transfer instructions with respect to such
Notes or the appropriate Applicable Ownership Interest of the Treasury Portfolio
or Treasury Securities, as the case may be, from each Holder by written request
mailed to such Holder at its address as it appears in the Corporate Units
Register or the Treasury Units Register, as the case may be. Upon book-entry
transfer of the Corporate Units or Treasury Units or delivery of a Corporate
Units Certificate or Treasury Units Certificate to the Agent with such transfer
instructions, the Agent shall transfer the Notes, the Applicable Ownership
Interest of the Treasury Portfolio or Treasury Securities, as the case may be,
underlying such Corporate Units or Treasury Units, as the case may be, to such
Holder by book-entry transfer, or other appropriate procedures, in accordance
with such instructions; provided,
40
however, that, to the extent that a Holder of Corporate Units or Treasury Units
would otherwise be entitled to receive less than $1,000 principal amount at
maturity of the Treasury Portfolio or the Treasury Securities, the Agent shall
dispose of such securities for cash, and transfer the appropriate amount of such
cash to such Holder in accordance with such Holder's instructions. In the event
a Holder of Corporate Units or Treasury Units fails to effect such transfer or
delivery, the Notes, the appropriate Applicable Ownership Interest of the
Treasury Portfolio or Treasury Securities, as the case may be, underlying such
Corporate Units or Treasury Units, as the case may be, and any distributions
thereon, shall be held in the name of the Agent or its nominee in trust for the
benefit of such Holder, until such Corporate Units or Treasury Units are
transferred or the Corporate Units Certificate or Treasury Units Certificate is
surrendered or such Holder provides satisfactory evidence that such Corporate
Units Certificate or Treasury Units Certificate has been destroyed, lost or
stolen, together with any indemnity that may be required by the Agent and the
Company.
SECTION 3.16. No Consent to Assumption. Each Holder of a Security, by
acceptance thereof, shall be deemed expressly to have withheld any consent to
the assumption under Section 365 of the Bankruptcy Code or otherwise, of the
Purchase Contract by the Company, receiver, liquidator or a person or entity
performing similar functions, its trustee in the event that the Company becomes
the debtor under the Bankruptcy Code or subject to other similar state or
federal law providing for reorganization or liquidation.
SECTION 3.17. CUSIP Numbers. The Company in issuing the Securities may
use "CUSIP" numbers (if then generally in use), and, if so, the Agent shall use
"CUSIP" numbers in notices of redemption as a convenience to Holders; provided
that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Securities or as contained
in any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall
not be affected by any defect in or omission of such numbers. The Company will
promptly notify the Agent of any changes in the "CUSIP" numbers.
ARTICLE IV
41
The Notes and the Applicable Ownership Interest of the
Treasury Portfolio
SECTION 4.1. Interest and Other Payments; Rights to Payments
Preserved; Distribution Rate Reset; Notice. Interest on any Note or
distributions on the appropriate Applicable Ownership Interest in the Treasury
Portfolio, as the case may be, which is paid on any Payment Date shall, subject
to receipt thereof by the Agent from the Collateral Agent as provided by the
terms of the Pledge Agreement, be paid to the Person in whose name the Corporate
Units Certificate (or one or more Predecessor Corporate Units Certificates) of
which such Note or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, is a part is registered at the close of business
on the Record Date for such Payment Date.
Each Corporate Units Certificate evidencing Notes or the Applicable
Ownership Interest of the Treasury Portfolio delivered under this Agreement upon
registration of transfer of or in exchange for or in lieu of any other Corporate
Units Certificate shall carry the rights to interest or distributions (as
applicable) accrued and unpaid, and interest, distributions or other payments to
accrue, which were or will be carried by the Notes or the Applicable Ownership
Interest in the Treasury Portfolio underlying such other Corporate Units
Certificate.
In the case of any Corporate Units with respect to which Cash
Settlement of the underlying Purchase Contract is properly effected prior to
11:00 a.m., New York City time on the Business Day immediately preceding the
Purchase Contract Settlement Date pursuant to prior notice, or with respect to
which Early Settlement of the underlying Purchase Contract is properly effected
on an Early Settlement Date, or with respect to which a Collateral Substitution
is properly effected, in each case on a date that is after any Record Date and
on or prior to the next succeeding Payment Date, interest on the Notes or
distributions on the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, underlying such Corporate Units otherwise payable
on such Payment Date shall be payable on such Payment Date notwithstanding such
Cash Settlement or Early Settlement or Collateral Substitution, and such
interest or distributions shall, subject to receipt thereof by the Agent, be
payable to the Person in whose name the Corporate Units Certificate (or one or
more Predecessor Certificates) was registered at the close of business on the
Record Date. Except as otherwise expressly provided in the immediately preceding
sentence, in the case of any Corporate Units with respect to which Cash
Settlement or Early Settlement of the
42
underlying Purchase Contract is effected on the Business Day immediately
preceding the Purchase Contract Settlement Date or an Early Settlement Date, as
the case may be, or with respect to which a Collateral Substitution has been
effected, interest or distributions on the related Notes or on the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
that would otherwise be payable after the Purchase Contract Settlement Date or
Early Settlement Date shall not be payable hereunder to the Holder of such
Corporate Units; provided, however, that to the extent that such Holder
continues to hold the separated Notes that formerly comprised a part of such
Holder's Corporate Units, such Holder shall be entitled to receive interest on
such separated Notes.
The applicable Coupon Rate on the Notes will be reset on the Reset
Date to the applicable Reset Rate (such Reset Rate to be in effect on and after
the applicable Reset Effective Date). In the event of a Failed Final
Remarketing, the Coupon Rate on the Notes outstanding on and after the Purchase
Contract Settlement Date shall not be reset. On the applicable Reset
Announcement Date the Reset Spread and the Applicable Benchmark Treasury to be
used to determine the Reset Rate shall be announced by the Company or Sprint
Capital. On the Business Day immediately following the Reset Announcement Date,
the Notes Holders shall be notified of such Reset Spread and Applicable
Benchmark Treasury by the Company or Sprint Capital. Such notice shall be
sufficiently given to Holders of Notes if published in an Authorized Newspaper.
SECTION 4.2. Notice and Voting. Under the terms of the Pledge
Agreement, the Agent will be entitled to exercise the voting and any other
consensual rights pertaining to the Notes pledged with the Collateral Agent but
only to the extent instructed by the Holders as described below. Upon receipt of
notice of any meeting at which holders of Notes are entitled to vote or upon any
solicitation of consents, waivers or proxies of holders of Notes, the Agent
shall, as soon as practicable thereafter, mail to the Holders of Corporate Units
a notice (a) containing such information as is contained in the notice or
solicitation, (b) stating that each Holder on the record date set by the Agent
therefor (which, to the extent possible, shall be the same date as the record
date for determining the holders of Notes entitled to vote) shall be entitled to
instruct the Agent as to the exercise of the voting rights pertaining to the
Notes underlying their Corporate Units and (c) stating the manner in which such
instructions may be given. Upon the written request of the Holders of Corporate
Units on such record date, the Agent
43
shall endeavor insofar as practicable to vote or cause to be voted, in
accordance with the instructions set forth in such requests, the maximum number
of Notes as to which any particular voting instructions are received. In the
absence of specific instructions from the Holder of a Corporate Unit, the Agent
shall abstain from voting the Notes underlying such Corporate Units. The Company
hereby agrees, if applicable, to solicit Holders of Corporate Units to timely
instruct the Agent in order to enable the Agent to vote such Notes.
SECTION 4.3. Tax Event Redemption. Upon the occurrence of a Tax Event
Redemption prior to August 17, 2004 or any earlier Successful Remarketing,
pursuant to the terms of the Pledge Agreement, the Collateral Agent will apply,
out of the aggregate Redemption Price for the Notes that are components of
Corporate Units, an amount equal to the aggregate Redemption Amount for the
Notes that are components of Corporate Units to purchase on behalf of the
Holders of Corporate Units the Treasury Portfolio and promptly remit the
remaining portion of such Redemption Price to the Agent for payment to the
Holders of such Corporate Units. The Treasury Portfolio will be substituted for
the pledged Notes, and will be held by the Collateral Agent in accordance with
the terms of the Pledge Agreement to secure the obligation of each Holder of a
Corporate Unit to purchase the PCS Common Stock of the Company under the
Purchase Contract constituting a part of such Corporate Units. Following the
occurrence of a Tax Event Redemption prior to August 17, 2004 or any earlier
Successful Remarketing, the Holders of Corporate Units and the Collateral Agent
shall have such security interests, rights and obligations with respect to the
Treasury Portfolio as the Holder of Corporate Units and the Collateral Agent had
in respect of the Notes, as the case may be, subject to the Pledge thereof as
provided in the Pledge Agreement, and any reference herein or in the
Certificates to the Note shall be deemed to be a reference to such Treasury
Portfolio and any reference herein or in the Certificates to interest on the
Notes shall be deemed to be a reference to corresponding distributions on the
Treasury Portfolio. The Company may cause to be made in any Corporate Units
Certificates thereafter to be issued such change in phraseology and form (but
not in substance) as may be appropriate to reflect the substitution of the
Treasury Portfolio for Notes as collateral.
SECTION 4.4. CUSIP Numbers. The Company in issuing the Notes may use
"CUSIP" numbers (if then generally in use), and, if so, the Indenture Trustee
shall use "CUSIP" numbers in notices of redemption as a convenience to
44
Holders; provided that any such notice may state that no representation is made
as to the correctness of such numbers either as printed on the Notes or as
contained in any notice of a redemption and that reliance may be placed only on
the other identification numbers printed on the Notes, and any such redemption
shall not be affected by any defect in or omission of such numbers. The Company
will promptly notify the Indenture Trustee and the Agent of any changes in the
"CUSIP" numbers.
ARTICLE V
The Purchase Contracts
SECTION 5.1. Purchase of Shares of PCS Common Stock. Each Purchase
Contract shall, unless a Termination Event or an Early Settlement has occurred,
obligate the Holder of the related Security to purchase, and the Company to
sell, on the Purchase Contract Settlement Date at a price equal to the Stated
Amount (the "Purchase Price"), a number of shares of PCS Common Stock equal to
the Settlement Rate unless, on or prior to the Purchase Contract Settlement
Date, there shall have occurred a Termination Event with respect to the Security
of which such Purchase Contract is a part. The "Settlement Rate" is equal to (a)
if the Applicable Market Value is equal to or greater than $29.89 (the
"Threshold Appreciation Price"), .8364 shares of PCS Common Stock per Purchase
Contract, (b) if the Applicable Market Value is less than the Threshold
Appreciation Price but is greater than $24.50, the number of shares of PCS
Common Stock per Purchase Contract equal to the Stated Amount divided by the
Applicable Market Value and (c) if the Applicable Market Value is less than or
equal to $24.50, 1.0204 shares of PCS Common Stock per Purchase Contract, in
each case subject to adjustment as provided in Section 5.6 (and in each case
rounded upward or downward to the nearest 1/10,000th of a share). As provided in
Section 5.10, no fractional shares of PCS Common Stock will be issued upon
settlement of Purchase Contracts.
No fractional shares of PCS Common Stock will be issued by the Company
with respect to the payment of Contract Adjustment Payments on the Purchase
Contract Settlement Date. In lieu of fractional shares otherwise issuable with
respect to such payment of Contract Adjustment Payments, the Holder will be
entitled to receive an amount in cash as provided in Section 5.12.
Each Holder of a Corporate Unit or a Treasury Unit, by its acceptance
thereof, (a) irrevocably authorizes
45
the Agent to enter into and perform the related Purchase Contract on its behalf
as its attorney-in-fact (including the execution of Certificates on behalf of
such Holder), (b) agrees to be bound by the terms and provisions thereof, (c)
covenants and agrees to perform its obligations under such Purchase Contracts,
(d) consents to the provisions hereof, irrevocably authorizes the Agent as its
attorney-in-fact to enter into and perform the Pledge Agreement on its behalf as
its attorney-in-fact and (f) consents to and agrees to be bound by the Pledge of
the Notes, the Treasury Portfolio or the Treasury Securities pursuant to the
Pledge Agreement; provided that upon a Termination Event, the rights of the
Holder of such Security under the Purchase Contract may be enforced without
regard to any other rights or obligations. Each Holder of a Corporate Unit or
Treasury Unit, by its acceptance thereof, further covenants and agrees, that, to
the extent and in the manner provided in Section 5.6 and the Pledge Agreement,
but subject to the terms thereof, Proceeds of the Treasury Securities, the Notes
or the Treasury Portfolio, as applicable, on the Purchase Contract Settlement
Date shall be paid by the Collateral Agent to the Company in satisfaction of
such Holder's obligations under such Purchase Contract and such Holder shall
acquire no right, title or interest in such Proceeds.
Upon registration of transfer of a Certificate, the transferee shall
be bound (without the necessity of any other action on the part of such
transferee), under the terms of this Agreement, the Purchase Contracts
underlying such Certificate and the Pledge Agreement and the transferor shall be
released from the obligations under this Agreement, the Purchase Contracts
underlying the Certificates so transferred and the Pledge Agreement. The Company
covenants and agrees, and each Holder of a Certificate, by its acceptance
thereof, likewise covenants and agrees, to be bound by the provisions of this
paragraph.
SECTION 5.2. Contract Adjustment Payments. Subject to Section 5.4
herein, the Company shall pay, on each Payment Date, the Contract Adjustment
Payments, if any, payable in respect of each Purchase Contract to the Person in
whose name a Certificate (or one or more Predecessor Certificates) is registered
at the close of business on the Record Date next preceding such Payment Date in
such coin or currency of the United States as at the time of payment shall be
legal tender for payments. The Contract Adjustment Payments, if any, will be
payable at the New York Office maintained for that purpose or, at the option of
the Company, by check mailed to the address of the Person entitled thereto at
such Person's address as it appears on
46
the Corporate Units Register or the Treasury Units Register or by wire transfer
to the account designated by a prior written notice by such Person.
Upon the occurrence of a Termination Event, the Company's obligation
to pay Contract Adjustment Payments (including any accrued Deferred Contract
Adjustment Payments), if any, shall cease.
Each Certificate delivered under this Agreement upon registration of
transfer of or in exchange for or in lieu of (including as a result of a
Collateral Substitution or the re-establishment of a Corporate Unit) any other
Certificate shall carry the rights to Contract Adjustment Payments, if any,
accrued and unpaid, and to accrue Contract Adjustment Payments, if any, which
were carried by the Purchase Contracts underlying such other Certificates.
Subject to Section 5.11, in the case of any Security with respect to
which Early Settlement of the underlying Purchase Contract is effected on an
Early Settlement Date, or in respect of which Cash Settlement of the underlying
Purchase Contract is effected on the Business Day immediately preceding the
Purchase Contract Settlement Date, or with respect to which a Collateral
Substitution or an establishment or re-establishment of a Corporate Unit
pursuant to Section 3.14 is effected, in each case on a date that is after any
Record Date and on or prior to the next succeeding Payment Date, Contract
Adjustment Payments on the Purchase Contracts underlying such Securities
otherwise payable on such Payment Date shall be payable on such Payment Date
notwithstanding such Cash Settlement, Early Settlement, Collateral Substitution
or establishment or re-establishment of Corporate Units, and such Contract
Adjustment Payments shall be paid to the Person in whose name the Certificate
evidencing such Security (or one or more Predecessor Certificates) is registered
at the close of business on such Record Date. Except as otherwise expressly
provided in the immediately preceding sentence, in the case of any Security with
respect to which Cash Settlement or Early Settlement of the underlying Purchase
Contract is effected on the Business Day immediately preceding the Purchase
Contract Settlement Date or on an Early Settlement Date, as the case may be, or
with respect to which a Collateral Substitution or an establishment or
re-establishment of a Corporate Unit has been effected, Contract Adjustment
Payments, if any, that would otherwise be payable after the Early Settlement
Date, Collateral Substitution or such establishment or re-establishment with
respect to such Purchase Contract shall not be payable.
47
Section 5.3. Subordination of Contract Adjustment Payments. (a) The
Company's obligations with respect to Contract Adjustment Payments, if any,
will be subordinated and junior in right of payment to the Company's obligations
under any Senior Indebtedness.
(b) In the event (i) of any payment by, or distribution of assets of,
the Company of any kind or character, whether in cash, property or securities,
to creditors upon any dissolution, winding-up, liquidation or reorganization of
the Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, or (ii) subject to the provisions of this
Section 5.3, that (1) a default shall have occurred and be continuing with
respect to the payment of principal, interest or any other monetary amounts due
and payable on any Senior Indebtedness and such default shall have continued
beyond the period of grace, if any, specified in the instrument evidencing such
Senior Indebtedness (and the Agent shall have received written notice thereof
from the Company or one or more holders of Senior Indebtedness or their
representative or representatives or the trustee or trustees under any indenture
pursuant to which any such Senior Indebtedness may have been issued), or (2) the
maturity of any Senior Indebtedness shall have been accelerated because of a
default in respect of such Senior Indebtedness (and the Agent shall have
received written notice thereof from the Company or one or more holders of
Senior Indebtedness or their representative or representatives or the trustee or
trustees under any indenture pursuant to which any such Senior Indebtedness may
have been issued), then:
(A) the holders of all Senior Indebtedness shall first be entitled to
receive, in the case of clause (i) above, payment of all amounts due or to
become due upon all Senior Indebtedness and, in the case of subclauses (1)
and (2) of clause (ii) above, payment of all amounts due thereon, or
provision shall be made for such payment in money or money's worth, before
the Holders of any of the Securities are entitled to receive any Contract
Adjustment Payments on the Purchase Contracts underlying the Securities;
(B) any payment by, or distribution of assets of, the Company of any
kind or character, whether in cash, property or securities, to which the
Holders of any of the Securities would be entitled except for the
provisions of this Section 5.3, including any such payment or distribution
which may be payable or deliverable by reason of the payment of any other
48
indebtedness of the Company being subordinated to the payment of such
Contract Adjustment Payments on the Purchase Contracts underlying the
Securities, shall be paid or delivered by the Person making such payment or
distribution, whether a trustee in bankruptcy, a receiver or liquidating
trustee or otherwise, directly to the holders of such Senior Indebtedness
or their representative or representatives or to the trustee or trustees
under any indenture under which any instruments evidencing any of such
Senior Indebtedness may have been issued, ratably according to the
aggregate amounts remaining unpaid on account of such Senior Indebtedness
held or represented by each, to the extent necessary to make payment in
full of all Senior Indebtedness remaining unpaid after giving effect to any
concurrent payment or distribution (or provision therefor) to the holders
of such Senior Indebtedness, before any payment or distribution is made of
such Contract Adjustment Payments to the Holders of such Securities; and
(C) in the event that, notwithstanding the foregoing, any payment by,
or distribution of assets of, the Company of any kind or character, whether
in cash, property or securities, including any such payment or distribution
which may be payable or deliverable by reason of the payment of any other
indebtedness of the Company being subordinated to the payment of Contract
Adjustment Payments on the Purchase Contracts underlying the Securities,
shall be received by the Agent or the Holders of any of the Securities when
such payment or distribution is prohibited pursuant to this Section 5.3,
such payment or distribution shall be paid over to the holders of such
Senior Indebtedness or their representative or representatives or to the
trustee or trustees under any indenture pursuant to which any instruments
evidencing any such Senior Indebtedness may have been issued, ratably as
aforesaid, for application to the payment of all Senior Indebtedness
remaining unpaid until all such Senior Indebtedness shall have been paid in
full, after giving effect to any concurrent payment or distribution (or
provision therefor) to the holders of such Senior Indebtedness.
(c) For purposes of this Section 5.3, the words "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other Person
provided for by a plan of reorganization or readjustment, the payment of which
is subordinated at least to the extent provided in
49
this Section 5.3, with respect to such Contract Adjustment Payments on the
Securities to the payment of all Senior Indebtedness which may at the time be
outstanding; provided that (A) the indebtedness or guarantee of indebtedness,
as the case may be, that constitutes Senior Indebtedness is assumed by the
Person, if any, resulting from any such reorganization or readjustment, and (B)
the rights of the holders of the Senior Indebtedness are not, without the
consent of each such holder adversely affected thereby, altered by such
reorganization or readjustment.
(d) Any failure by the Company to make any payment on or perform any other
obligation under Senior Indebtedness, other than any indebtedness incurred by
the Company or assumed or guaranteed, directly or indirectly, by the Company for
money borrowed (or any deferral, renewal, extension or refunding thereof) or any
indebtedness or obligation as to which the provisions of this Section 5.3, shall
have been waived by the Company in the instrument or instruments by which the
Company incurred, assumed, guaranteed or otherwise created such indebtedness or
obligation, shall not be deemed a default or event of default if (A) the Company
shall be disputing its obligation to make such payment or perform such
obligation and (B) either (x) no final judgment relating to such dispute shall
have been issued against the Company which is in full force and effect and is
not subject to further review, including a judgment that has become final by
reason of the expiration of the time within which a party may seek further
appeal or review, and (y) in the event a judgment that is subject to further
review or appeal has been issued, the Company shall in good faith be prosecuting
an appeal or other proceeding for review and a stay of execution shall have been
obtained pending such appeal or review.
(e) Subject to the payment in full of all Senior Indebtedness, the Holders
of the Securities shall be subrogated (equally and ratably with the holders of
all obligations of the Company which by their express terms are subordinated to
Senior Indebtedness of the Company to the same extent as payment of the Contract
Adjustment Payments in respect of the Purchase Contracts underlying the
Securities is subordinated and which are entitled to like rights of subrogation)
to the rights of the holders of Senior Indebtedness to receive payments or
distributions of cash, property or securities of the Company applicable to the
Senior Indebtedness until all such Contract Adjustment Payments owing on the
Securities shall be paid in full, and as between the Company, its creditors
other than holders of such Senior Indebtedness and the Holders, no such payment
or distribution made to the holders of Senior Indebtedness by
50
virtue of this Section 5.3 that otherwise would have been made to the Holders
shall be deemed to be a payment by the Company on account of such Senior
Indebtedness, it being understood that the provisions of this Section 5.3 are
intended solely for the purpose of defining the relative rights of the Holders,
on the one hand, and the holders of Senior Indebtedness, on the other hand.
(f) Nothing contained in this Section 5.3 or elsewhere in this Agreement or
in the Securities is intended to or shall impair, as among the Company, its
creditors other than the holders of Senior Indebtedness and the Holders, the
obligation of the Company, which is absolute and unconditional, to pay to the
Holders such Contract Adjustment Payments on the Securities as and when the same
shall become due and payable in accordance with their terms, or is intended to
or shall affect the relative rights of the Holders and creditors of the Company
other than the holders of Senior Indebtedness, nor shall anything herein or
therein prevent the Agent or any Holder from exercising all remedies otherwise
permitted by applicable law upon default under this Agreement, subject to the
rights, if any, under this Section 5.3, of the holders of Senior Indebtedness in
respect of cash, property or securities of the Company received upon the
exercise of any such remedy.
(g) Upon payment or distribution of assets of the Company referred to in
this Section 5.3, the Agent and the Holders shall be entitled to rely upon any
order or decree made by any court of competent jurisdiction in which any such
dissolution, winding up, liquidation or reorganization proceeding affecting the
affairs of the Company is pending or upon a certificate of the trustee in
bankruptcy, receiver, assignee for the benefit of creditors, liquidating trustee
or agent or other person making any payment or distribution, delivered to the
Agent or to the Holders, for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of the Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Section 5.3.
(h) The Agent shall be entitled to rely on the delivery to it of a written
notice by a Person representing himself to be a holder of Senior Indebtedness
(or a trustee or representative on behalf of such holder) to establish that such
notice has been given by a holder of Senior Indebtedness or a trustee or
representative on behalf of any such holder or holders. In the event that the
Agent determines in good faith that further evidence is required
51
with respect to the right of any Person as a holder of Senior Indebtedness to
participate in any payment or distribution pursuant to this Section 5.3, the
Agent may request such Person to furnish evidence to the reasonable satisfaction
of the Agent as to the amount of Senior Indebtedness held by such Person, the
extent to which such Person is entitled to participate in such payment or
distribution and any other facts pertinent to the rights of such Person under
this Section 5.3, and, if such evidence is not furnished, the Agent may defer
payment to such Person pending judicial determination as to the right of such
Person to receive such payment.
(i) Nothing contained in this Section 5.3 shall affect the obligations of
the Company to make, or prevent the Company from making, payment of the Contract
Adjustment Payments, except as otherwise provided in this Section 5.3.
(j) Each Holder of Securities, by his acceptance thereof, authorizes and
directs the Agent on his, her or its behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in this
Section 5.3 and appoints the Agent his, her or its attorney-in-fact, as the case
may be, for any and all such purposes.
(k) The Company shall give prompt written notice to the Agent of any fact
known to the Company that would prohibit the making of any payment of moneys to
or by the Agent in respect of the Securities pursuant to the provisions of this
Section. Notwithstanding the provisions of this Section 5.3 or any other
provisions of this Agreement, the Agent shall not be charged with knowledge of
the existence of any facts that would prohibit the making of any payment of
moneys to or by the Agent, or the taking of any other action by the Agent,
unless and until the Agent shall have received written notice thereof mailed or
delivered to a Responsible Officer of the Agent from the Company, any Holder,
any paying agent or the holder or representative of any Senior Indebtedness;
provided that if at least two Business Days prior to the date upon which by the
terms hereof any such moneys may become payable for any purpose, the Agent shall
not have received with respect to such moneys the notice provided for in this
Section, then, anything herein contained to the contrary notwithstanding, the
Agent shall have full power and authority to receive such moneys and to apply
the same to the purpose for which they were received and shall not be affected
by any notice to the contrary that may be received by it within two Business
Days prior to or on or after such date.
52
(l) The Agent in its individual capacity shall be entitled to all the
rights set forth in this Section with respect to any Senior Indebtedness at the
time held by it, to the same extent as any other holder of Senior Indebtedness
and nothing in this Agreement shall deprive the Agent of any of its rights as
such holder.
(m) No right of any present or future holder of any Senior Indebtedness to
enforce the subordination herein shall at any time or in any way be prejudiced
or impaired by any act or failure to act on the part of the Company or by any
noncompliance by the Company with the terms, provisions and covenants of this
Agreement, regardless of any knowledge thereof which any such holder may have or
be otherwise charged with.
(n) Nothing in this Section 5.3 shall apply to claims of, or payments to,
the Agent under or pursuant to Section 7.07.
With respect to the holders of Senior Indebtedness, (A) the duties and
obligations of the Agent shall be determined solely by the express provisions of
this Agreement; (B) the Agent shall not be liable except for the performance of
such duties and obligations as are specifically set forth in this Agreement; (C)
no implied covenants or obligations shall be read into this Agreement against
the Agent; and (D) the Agent shall not be deemed to be a fiduciary as to such
holders.
Section 5.4. Deferral of Contract Adjustment Payments. (a) The Company
shall have the right, at any time prior to the Purchase Contract Settlement
Date, to defer the payment of any or all of the Contract Adjustment Payments
otherwise payable on any Payment Date, but only if the Company shall give the
Holders and the Agent written notice of its election to defer each such deferred
Contract Adjustment Payment (specifying the amount to be deferred, if less than
the entire amount payable) at least 10 Business Days prior to the earlier of (i)
the next succeeding Payment Date or (ii) the date the Company is required to
give notice of the Record Date or Payment Date with respect to payment of such
Contract Adjustment Payments to the NYSE or other applicable self-regulatory
organization or to Holders of the Securities, but in any event not less than one
Business Day prior to such Record Date. Any Contract Adjustment Payments so
deferred shall, to the extent permitted by law, bear additional Contract
Adjustment Payments thereon at the rate of 7.125% per year (computed on the
basis of a 360-day year of 12 30-day months), compounding on each succeeding
Payment Date, until paid in full (such deferred installments of
53
Contract Adjustment Payments, if any, together with the additional Contract
Adjustment Payments accrued thereon, being referred to herein as the "Deferred
Contract Adjustment Payments"). Deferred Contract Adjustment Payments, if any,
shall be due on the next succeeding Payment Date except to the extent that
payment is deferred pursuant to this Section. No Contract Adjustment Payments
may be deferred to a date that is after the Purchase Contract Settlement Date
and no such deferral period may end other than on a Payment Date. If the
Purchase Contracts are terminated upon the occurrence of a Termination Event,
the Holder's right to receive Contract Adjustment Payments, if any, and Deferred
Contract Adjustment Payments shall terminate.
(b) In the event that the Company elects to defer the payment of Contract
Adjustment Payments on the Purchase Contracts until a Payment Date prior to the
Purchase Contract Settlement Date, then all Deferred Contract Adjustment
Payments, if any, shall be payable to the registered Holders as of the close of
business on the Record Date immediately preceding such Payment Date.
(c) In the event that the Company elects to defer the payment of Contract
Adjustment Payments on the Purchase Contracts until the Purchase Contract
Settlement Date, each Holder shall receive on the Purchase Contract Settlement
Date in lieu of a cash payment a number of shares of PCS Common Stock (in
addition to a number of shares of PCS Common Stock equal to the Settlement Rate)
equal to (A) the aggregate amount of Deferred Contract Adjustment Payments
payable to such Holder (net of any required tax withholding on such Deferred
Contract Adjustment Payment, which shall be remitted in cash to the applicable
taxing jurisdiction) divided by (B) the Applicable Market Value.
(d) No fractional shares of PCS Common Stock will be issued by the Company
with respect to the payment of Deferred Contract Adjustment Payments on the
Purchase Contract Settlement Date. In lieu of fractional shares otherwise
issuable with respect to such payment of Deferred Contract Adjustment Payments,
the Holder shall be entitled to receive an amount in cash as provided in Section
5.10.
(e) In the event the Company exercises its option to defer the payment of
Contract Adjustment Payments then, until the Deferred Contract Adjustment
Payments have been paid, the Company shall not declare or pay dividends on, make
distributions with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any series of PCS Common Stock other than:
54
(i) purchases, redemptions or acquisitions of shares of capital stock
of the Company in connection with any employment contract, benefit plan or
other similar arrangement with or for the benefit of employees, officers or
directors or a stock purchase or dividend reinvestment plan, or the
satisfaction by the Company of its obligations pursuant to any contract or
security outstanding on the date the Company exercises its right to defer
the Contract Adjustment Payments;
(ii) as a result of a reclassification of any series of PCS Common
Stock or the exchange or conversion of one series of PCS Common Stock for
another series of PCS Common Stock;
(iii) the purchase of fractional interests in any series of PCS Common
Stock pursuant to the conversion or exchange provisions of such series of
PCS Common Stock or the security being converted or exchanged;
(iv) dividends or distributions in any series of PCS Common Stock (or
rights to acquire capital stock) or repurchases, acquisitions or
redemptions of any series of PCS Common Stock in exchange for or out of the
net cash proceeds of the sale of any series of PCS Common Stock (or
securities convertible into or exchangeable for shares of any series of PCS
Common Stock);
(v) redemptions, exchanges or repurchases of any rights outstanding
under a shareholder rights plan or the declaration or payment thereunder of
a dividend or distribution of or with respect to rights in the future; or
(F) redemptions of PCS Common Stock pursuant to Section 7.1 or Article
Sixth of the Company's articles of incorporation or any successor
provision.
SECTION 5.5. Initial and Subsequent Remarketing. (a) Unless a Tax
Event Redemption has occurred or the Company exercises its right to defer
remarketing pursuant to Section 5.5(c), the Company shall engage the Remarketing
Agent pursuant to the Remarketing Agreement to sell the Notes of Corporate Unit
Holders (and other Note Holders that duly elect pursuant to the Remarketing
Agreement to have their Notes remarketed) (the "Initial Remarketing") on the
third Business Day immediately preceding May 17, 2004 (the "Initial Remarketing
Date"). In the event the Initial Remarketing is a Failed Remarketing or has been
deferred by the Company pursuant to Section 5.5(c), unless a Tax Event
55
Redemption has occurred, upon request from the Company and Sprint Capital, the
Remarketing Agent shall use its reasonable efforts from time to time prior to
the twelfth Business Day before August 17, 2004 to remarket all of the Notes of
Corporate Unit Holders who have not otherwise notified the Agent on or prior to
the second business day before any Subsequent Remarketing of their intention to
make an Early Settlement of the related Purchase Contracts (each such subsequent
remarketing being referred to as a "Subsequent Remarketing" and each date on
which a Subsequent Remarketing takes place being referred to as a "Subsequent
Remarketing Date"). In order to facilitate the remarketing, the Agent shall
notify, by 10:00 a.m., New York City time, on the Business Day immediately
preceding the Initial Remarketing Date or any Subsequent Remarketing Date, the
Remarketing Agent of the aggregate principal amount of Notes to be remarketed.
Concurrently, the Collateral Agent, pursuant to the terms of the Pledge
Agreement, shall present such Notes to the Remarketing Agent for remarketing.
Upon receipt of such notice from the Agent and such Notes from the Collateral
Agent, the Remarketing Agent shall, on the Initial Remarketing Date or any
Subsequent Remarketing Date, use its reasonable efforts to remarket such Notes
on such date at an aggregate price of approximately 100.5% (but not less than
100%) of the Treasury Portfolio Purchase Price. If the Remarketing Agent is able
to remarket the Notes at a price equal to or greater than 100% of the Treasury
Portfolio Purchase Price (a "Successful Initial Remarketing" or "Successful
Subsequent Remarketing", as applicable), the portion of the proceeds from such
Successful Initial Remarketing or Successful Subsequent Remarketing equal to the
Treasury Portfolio Purchase Price shall be applied to purchase the Treasury
Portfolio. In addition, the Remarketing Agent may deduct as a remarketing fee
("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. Any proceeds in excess of those required
to pay the Treasury Portfolio Purchase Price and the Remarketing Fee shall be
remitted to the Agent for payment to the Holders of the related Corporate Units.
Holders of Corporate Units whose Notes are so remarketed shall not otherwise be
responsible for the payment of any Remarketing Fee in connection therewith. The
Treasury Portfolio shall be substituted for the Notes of Corporate Unit Holders
and shall be pledged to the Collateral Agent to secure the Corporate Unit
Holders' obligation to pay the Purchase Price for the PCS Common Stock under the
related Purchase Contracts on the Purchase Contract Settlement Date. Following
the occurrence of a Successful Initial Remarketing or Successful Subsequent
Remarketing, the Holders of
56
Corporate Units and the Collateral Agent shall have such security interests,
rights and obligations with respect to the Treasury Portfolio as the Holder of
Corporate Units and the Collateral Agent had in respect of the Notes, as the
case may be, subject to the Pledge thereof as provided in the Pledge Agreement,
and any reference herein or in the Certificates to the Note shall be deemed to
be a reference to such Treasury Portfolio and any reference herein or in the
Certificates to interest on the Notes shall be deemed to be a reference to
corresponding distributions on the Treasury Portfolio. The Company may cause to
be made in any Corporate Units Certificates thereafter to be issued such change
in phraseology and form (but not in substance) as may be appropriate to reflect
the substitution of the Treasury Portfolio for Notes as collateral.
(b) If, on the Initial Remarketing Date or any Subsequent Remarketing
Date, the Remarketing Agent (despite using its reasonable efforts) cannot
remarket the related Notes (other than to the Company or Sprint Capital) of such
Holders of Corporate Units at a price not less than 100% of the Treasury
Portfolio Purchase Price or a condition precedent to the remarketing set forth
in the Remarketing Agreement has not been satisfied, the remarketing shall be
deemed to have failed (a "Failed Remarketing"). The Company shall cause a notice
of a Failed Remarketing to be published on the Business Day immediately
following the Failed Remarketing in an Authorized Newspaper.
(c) Notwithstanding the foregoing, any obligation on the part of the
Company, Sprint Capital or the Remarketing Agent to remarket the Notes on the
Initial Remarketing Date or otherwise, other than the Final Remarketing Date or
upon any PCS Stock Redemption, shall be subject to the Company's or Sprint
Capital's right to defer any remarketing to the extent the Company determines in
good faith that effecting a remarketing on such date is not in its best
interests.
(d) Not later than 7 calendar days nor more than 15 calendar days
immediately prior to any Reset Announcement Date, the Company or Sprint Capital
shall request that the Clearing Agency or its nominee (or any successor Clearing
Agency or its nominee) notify the Beneficial Owners or Clearing Agency
Participants holding Corporate Units or Treasury Units of such Reset
Announcement Date and, in the case of a Final Remarketing, the procedures to be
followed by Holders of Corporate Units who intend to elect Cash Settlement on
the Business Day immediately preceding the Purchase Contract Settlement Date.
57
SECTION 5.6. Payment of Purchase Price; Final Remarketing. (a) (i)
Unless a Tax Event Redemption, Successful Remarketing, Termination Event or
Early Settlement has occurred, each Holder of a Corporate Unit may pay in cash
("Cash Settlement") the Purchase Price for the shares of PCS Common Stock to be
purchased pursuant to a Purchase Contract if such Holder notifies the Agent by
use of a notice in substantially the form of Exhibit E hereto of its intention
to make a Cash Settlement. Such notice shall be made on or prior to 5:00 p.m.,
New York City time, on the fifth Business Day immediately preceding the Purchase
Contract Settlement Date. The Agent shall promptly notify the Collateral Agent
of the receipt of such a notice from a Holder intending to make a Cash
Settlement.
(ii) A Holder of a Corporate Unit who has so notified the Agent of its
intention to make a Cash Settlement is required to pay the Purchase Price
to the Collateral Agent 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 cashiers' check or wire
transfer, in each case in immediately available funds payable to or upon
the order of the Company. Any cash received by the Collateral Agent will be
invested promptly by the Collateral Agent in Permitted Investments and paid
to the Company on the Purchase Contract Settlement Date in settlement of
the Purchase Contract in accordance with the terms of this Agreement and
the Pledge Agreement. Any funds received by the Collateral Agent in respect
of the investment earnings from the investment in such Permitted
Investments, will be distributed to the Agent when received for payment to
the Holder.
(iii) If a Holder of a Corporate Unit fails to notify the Agent of its
intention to make a Cash Settlement in accordance with paragraph (a)(i)
above, such failure shall constitute an event of default and the Holder
shall be deemed to have consented to the disposition of the pledged Notes
pursuant to the Final Remarketing as described in paragraph (b) below. If a
Holder of a Corporate Unit does notify the Agent as provided in paragraph
(a)(i) above of its intention to pay the Purchase Price in cash, but fails
to make such payment as required by paragraph (a)(ii) above, such failure
shall also constitute a default; however, the 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
58
with respect to such Notes, including but not limited to those rights
specified in paragraph (c) below.
(b) Unless a Tax Event Redemption or an earlier Successful Remarketing
has occurred, the Notes of Corporate Unit Holders who have not notified the
Agent of their intention to effect a Cash Settlement as provided in paragraph
(a)(i) above shall be sold by the Remarketing Agent (the "Final Remarketing") on
the third Business Day immediately preceding the Purchase Contract Settlement
Date (the "Final Remarketing Date"). The Agent shall notify, by 10:00 a.m., New
York City time, on the Business Day immediately preceding the Final Remarketing
Date, the Remarketing Agent of the aggregate principal amount of Notes to be
remarketed. Concurrently, the Collateral Agent, pursuant to the terms of the
Pledge Agreement, shall present for remarketing such Notes to the Remarketing
Agent. Upon receipt of such notice from the Agent and such Notes from the
Collateral Agent, the Remarketing Agent shall, on the Final Remarketing Date,
use its reasonable efforts to remarket such Notes on such date at a price of
approximately 100.5% (but not less than 100%) of the aggregate principal amount
of such Notes.
If the Remarketing Agent is able to remarket the Notes at a price
equal to or greater than 100% of the aggregate principal amount of Notes (a
"Successful Final Remarketing"), the Remarketing Agent shall remit the entire
amount of the proceeds from such Successful Final Remarketing to the Collateral
Agent; provided, however, that the Remarketing Agent may deduct as the
Remarketing Fee an amount not exceeding 25 basis points (0.25%) of the aggregate
principal amount of the remarketed Notes from any amount of the proceeds of a
Successful Final Remarketing in excess of the aggregate principal amount of the
remarketed Notes. The portion of the proceeds equal to the aggregate principal
amount of Notes shall automatically be applied by the Collateral Agent, in
accordance with the Pledge Agreement, to satisfy in full such Corporate Units
Holders' obligations to pay the Purchase Price for the PCS Common Stock under
the related Purchase Contracts on the Purchase Contract Settlement Date. Any
proceeds in excess of those required to pay the Purchase Price and the
Remarketing Fee shall be remitted to the Agent for payment to the Holders of the
related Corporate Units. Corporate Units Holders whose Notes are so remarketed
shall not otherwise be responsible for the payment of any Remarketing Fee in
connection therewith. If, on the Final Remarketing Date, the Remarketing Agent
(despite using its reasonable efforts) cannot remarket the related Notes (other
than to the Company or Sprint Capital) of such Holders of Corporate Units at a
59
price not less than 100% of the aggregate principal amount of the Notes or a
condition precedent to the Final Remarketing set forth in the Remarketing
Agreement has not been satisfied, the remarketing shall be deemed to have failed
(a "Failed Final Remarketing") and, in accordance with the terms of the Pledge
Agreement, the Collateral Agent for the benefit of the Company shall exercise
its rights as a secured party with respect to such Notes, including those
actions specified in paragraph (c) below. The Company shall cause a notice of
such Failed Final Remarketing to be published on the second Business Day
immediately preceding the Purchase Contract Settlement Date in an Authorized
Newspaper.
(c) With respect to any Notes beneficially owned by Holders who have
elected Cash Settlement but failed to deliver cash as required in (a)(ii) above,
or with respect to Notes which were included in a Failed Final Remarketing, the
Collateral Agent for the benefit of the Company reserves all of its rights as a
secured party with respect thereto and, subject to applicable law and paragraph
(h) below, may, among other things, (i) retain the Notes in full satisfaction of
the Holders obligations under the Purchase Contracts or (ii) sell the Notes in
one or more public or private sales.
(d) Unless a Termination Event or an Early Settlement has occurred,
the Purchase Contract underlying each Treasury Unit and, if a Tax Event
Redemption or a Successful Initial Remarketing or Successful Subsequent
Remarketing has occurred, each Corporate Unit will be settled with the Proceeds
at maturity of the Treasury Security or the Applicable Ownership Interest (as
defined in clause (i) of the definition of such term) of the Treasury Portfolio,
as applicable. Upon receipt of such Proceeds, the Collateral Agent will invest
the Proceeds promptly in Permitted Investments and pay the Proceeds to the
Company on the Purchase Contract Settlement Date in accordance with the terms of
this Agreement and the Pledge Agreement. Any such Proceeds received by the
Collateral Agent in excess of the Purchase Price and any funds received by the
Collateral Agent in respect of the investment earnings from the investment in
such Permitted Investments will be distributed to the Agent when received for
payment to the Holder.
(e) Any distribution to Holders of excess funds and interest described
above, shall be payable at the New York Office maintained for that purpose or,
at the option of the Holder, by check mailed to the address of the Person
entitled thereto at such address as it appears on the Register.
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(f) Unless a Holder settles the underlying Purchase Contract through
the Early Settlement in the manner described in Section 5.11, the Company shall
not be obligated to issue (or otherwise deliver) any shares of PCS Common Stock
in respect of a Purchase Contract or deliver any certificate therefor to the
Holder unless it shall have received payment in full of the Purchase Price for
the shares of Common Stock to be purchased thereunder in the manner set forth in
this Section 5.6.
(g) Upon Cash Settlement of any Purchase Contract, (i) the Collateral
Agent shall in accordance with the terms of the Pledge Agreement cause the
pledged Notes underlying the relevant Security to be released from the Pledge by
the Collateral Agent free and clear of any security interest of the Company and
transferred to the Agent for delivery to the Holder thereof or its designee as
soon as practicable and (ii) subject to the receipt thereof from the Collateral
Agent, the Agent shall, by book-entry transfer, or other appropriate procedures,
in accordance with instructions provided by the Holder thereof, transfer such
Notes (or, if no such instructions are given to the Agent by the Holder, the
Agent shall hold such Notes and any distributions thereon in the name of the
Agent or its nominee in trust for the benefit of such Holder).
(h) The obligations of the Holders to pay the Purchase Price are
non-recourse obligations and are payable solely out of any Cash Settlement or
the Proceeds of any Collateral pledged to secure the obligations of the Holders
and in no event shall Holders be liable for any deficiency between the Proceeds
of Collateral and the Purchase Price.
SECTION 5.7. Delivery of Shares of PCS Common Stock. Unless a
Termination Event or an Early Settlement shall have occurred, on the Purchase
Contract Settlement Date, upon its receipt of payment in full of the Purchase
Price for the shares of PCS Common Stock purchased by the Holders pursuant to
the foregoing provisions of this Article and subject to Section 5.8(c), the
Company shall issue (or otherwise deliver) and deposit with the Agent, for the
benefit of the Holders of the Outstanding Securities, one or more certificates
representing shares of PCS Common Stock registered in the name of the Agent (or
its nominee) as custodian for the Holders (such certificates for shares of PCS
Common Stock, together with any dividends or distributions for which both a
record date and payment date for such dividend or distribution has occurred on
or after the Purchase Contract Settlement Date, being hereinafter referred to as
the "Purchase Contract Settlement Fund") to which the Holders are entitled
hereunder. Subject to the
61
foregoing, upon surrender of a Certificate to the Agent on or after the Purchase
Contract Settlement Date, together with settlement instructions thereon duly
completed and executed, the Holder of such Certificate shall be entitled to
receive in exchange therefor a certificate representing that number of whole
shares of PCS Common Stock which such Holder is entitled to receive pursuant to
the provisions of this Article Five (after taking into account all Securities
then held by such Holder) together with cash in lieu of fractional shares as
provided in Section 5.12 and any dividends or distributions with respect to such
shares constituting part of the Purchase Contract Settlement Fund, but without
any interest thereon, and the Certificate so surrendered shall forthwith be
canceled. Such shares shall be registered in the name of the Holder or the
Holder's designee as specified in the settlement instructions provided by the
Holder to the Agent. If any shares of PCS Common Stock issued (or otherwise
delivered) in respect of a Purchase Contract are to be registered to a Person
other than the Person in whose name the Certificate evidencing such Purchase
Contract is registered, no such registration shall be made unless the Person
requesting such registration has paid any transfer and other taxes required by
reason of such registration in a name other than that of the registered Holder
of the Certificate evidencing such Purchase Contract or has established to the
satisfaction of the Company that such tax either has been paid or is not
payable.
SECTION 5.8. Adjustment of Settlement Rate. (a) Adjustments for
Dividends, Distributions, Stock Splits, Etc (for purposes of paragraphs (1)-(10)
of this Section 5.8(a), the outstanding shares of PCS Common Stock shall include
shares issuable in respect of Class A Common Stock):
(1) In case the Company shall pay or make a dividend in PCS Common
Stock or other distribution on the PCS Common Stock in PCS Common Stock,
the Settlement Rate, as in effect at the opening of business on the day
following the date fixed for the determination of stockholders entitled to
receive such dividend or other distribution shall be increased by dividing
such Settlement Rate by a fraction, the numerator of which shall be the
number of shares of PCS Common Stock outstanding at the close of business
on the date fixed for such determination and the denominator of which shall
be the sum of such number of shares and the total number of shares
constituting such dividend or other distribution, such increase to become
effective immediately after the opening of business on
62
the day following the date fixed for such determination. For the purposes
of this paragraph (1), the number of shares of PCS Common Stock at any time
outstanding shall not include shares held in the treasury of the Company
but shall include any shares issuable in respect of any scrip certificates
issued in lieu of fractions of shares of PCS Common Stock. If, after any
such date fixed for determination, any dividend or distribution is not in
fact paid, the Settlement Rate shall be immediately readjusted, effective
as of the date the Board of Directors determines not to pay such dividend
or distribution, to the Settlement Rate that would have been effect if such
determination date had not been fixed. The Company will not pay any
dividend or make any distribution on shares of PCS Common Stock held in the
treasury of the Company unless the shares held in treasury represent an
intergroup interest in accordance with generally accepted accounting
principles.
(2) In case the Company shall issue rights, options or warrants to all
holders of its PCS Common Stock (not being available on an equivalent basis
to Holders of the Securities upon settlement of the Purchase Contracts
underlying such Securities) entitling them, for a period expiring within 45
days after the record date for the determination of stockholders entitled
to receive such rights, options or warrants, to subscribe for or purchase
shares of PCS Common Stock at a price per share less than the Current
Market Price per share of the PCS Common Stock on the date fixed for the
determination of stockholders entitled to receive such rights, options or
warrants (other than pursuant to a dividend reinvestment plan or share
purchase plan), the Settlement Rate in effect at the opening of business on
the day following the date fixed for such determination shall be increased
by dividing such Settlement Rate by a fraction, the numerator of which
shall be the number of shares of PCS Common Stock outstanding at the close
of business on the date fixed for such determination plus the number of
shares of PCS Common Stock which the aggregate offering price of the total
number of shares of PCS Common Stock so offered for subscription or
purchase would purchase at such Current Market Price and the denominator of
which shall be the number of shares of PCS Common Stock outstanding at the
close of business on the date fixed for such determination plus the number
of shares of PCS Common Stock so offered for subscription or purchase, such
increase to become effective immediately after the opening of business on
63
the day following the date fixed for such determination. For the purposes
of this paragraph (2), the number of shares of PCS Common Stock at any time
outstanding shall not include shares held in the treasury of the Company
but shall include any shares issuable in respect of any scrip certificates
issued in lieu of fractions of shares of PCS Common Stock. The Company
shall not issue any such rights, options or warrants in respect of shares
of PCS Common Stock held in the treasury of the Company, unless the shares
held in treasury represent an intergroup interest in accordance with
generally accepted accounting principles. Upon the expiration of any such
rights, options or warrants without being exercised, the Settlement Rate
shall again immediately be adjusted such that the numerator and denominator
used in the prior adjustment pursuant to this Section 5.8(a)(2) only gives
effect to the number of shares of PCS Common Stock actually purchased upon
expiration of such 45-day period (and the related aggregate offering price
of such shares).
(3) In case outstanding shares of PCS Common Stock shall be subdivided
or split into a greater number of shares of PCS Common Stock, the
Settlement Rate in effect at the opening of business on the day following
the day upon which such subdivision or split becomes effective shall be
proportionately increased, and, conversely, in case outstanding shares of
PCS Common Stock shall each be combined into a smaller number of shares of
PCS Common Stock, the Settlement Rate in effect at the opening of business
on the day following the day upon which such combination becomes effective
shall be proportionately reduced, such increase or reduction, as the case
may be, to become effective immediately after the opening of business on
the day following the day upon which such subdivision, split or combination
becomes effective.
(4) In case the Company shall, by dividend or otherwise, distribute to
all holders of its PCS Common Stock evidences of its indebtedness, shares
of capital stock, securities, cash or other property (but excluding any
rights or warrants referred to in paragraph (2) of this Section, any
dividend or distribution paid exclusively in cash and any dividend or
distribution referred to in paragraph (1) of this Section), the Settlement
Rate shall be increased so that the same shall equal the rate determined by
dividing the Settlement Rate in effect immediately prior to the close of
business on the date fixed for
64
the determination of stockholders entitled to receive such distribution by
a fraction of which the numerator shall be the Current Market Price per
share of the PCS Common Stock on the date fixed for such determination less
the then fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a Board Resolution filed
with the Agent) on such date of the portion of the evidences of
indebtedness, shares of capital stock, securities, cash or other property
so distributed applicable to one share of PCS Common Stock and the
denominator shall be such Current Market Price per share of the PCS Common
Stock, such adjustment to become effective immediately prior to the opening
of business on the day following the date fixed for the determination of
stockholders entitled to receive such distribution. In any case in which
this paragraph (4) is applicable, paragraph (2) of this Section shall not
be applicable.
(5) In case the Company shall, by dividend or otherwise, distribute
cash to all holders of its PCS Common Stock (excluding (x) any cash that is
distributed in a Reorganization Event to which Section 5.8(c) applies or
(y) cash that is distributed as part of a distribution referred to in
paragraph (4) of this Section (such distributions, other than regular
quarterly dividends, the "Triggering Distribution"), in an aggregate amount
that, combined together with:
(I) the aggregate amount of any other distributions (such
distributions, other than regular quarterly dividends, the "Prior Cash
Distributions") made exclusively in cash to all holders of its PCS
Common Stock within the 12 months before the date of payment of the
Triggering Distribution for which no adjustment pursuant to this
paragraph (5) or paragraph (6) of this Section has been made; and
(II) the aggregate of any cash plus the fair market value, as of
the expiration of the applicable tender or exchange offer referred to
below (as determined by the Board of Directors, whose determination
shall be conclusive and described in a Board Resolution filed with the
Agent), of consideration payable in respect of any tender or exchange
offer (other than consideration payable in respect of any odd-lot
tender offer) by the Company or any of its Subsidiaries (each, a
"Prior Company Tender") for all or any portion of
65
the PCS Common Stock concluded within the 12 months before the date
of payment of the Triggering Distribution and for which no adjustment
has been under this paragraph (5) or paragraph (6);
exceeds 1% of the product of the Current Market Price per share of the PCS
Common Stock on the record date for the Triggering Distribution and the
number of shares of PCS Common Stock outstanding on that date, then,
immediately after the close of business on the record date for the
Triggering Distribution, the Settlement Rate shall be adjusted for each
Prior Cash Distribution, each Prior Company Tender, and the Triggering
Distribution, successively, in the order of their occurrence as follows:
(X) with respect to each Prior Cash Distribution or the
Triggering Distribution, as the case may be, by multiplying the
Settlement Rate (either as in effect at such time or as adjusted with
respect to an earlier adjustment pursuant to this paragraph)
immediately before the distribution by a fraction, (A) the numerator
of which is the Current Market Price per share of the PCS Common Stock
on the record date for the distribution and (B) the denominator of
which is the Current Market Price per share of the PCS Common Stock on
the record date for the distribution less the amount of cash per share
distributed in the distribution, and
(Y) with respect to each Prior Company Tender, by multiplying the
Settlement Rate (either as in effect at such time or as adjusted with
respect to an earlier adjustment pursuant to this paragraph) at the
last time for which tenders could be accepted (the "Expiration Date")
by a fraction (i) the numerator of which is the product of (A) the
Current market Price per share of the PCS Common Stock at the
Expiration Time and (B) the number of shares of PCS Common Stock
outstanding immediately after completion of the Prior Company Tender
and (ii) the denominator of which is (A) the product of (I) the
Current Market Price per share of the PCS Common Stock at the
Expiration Time and (II) the number of shares of PCS Common Stock
outstanding immediately before the Expiration Time less (B) the total
amount of consideration paid in the Prior Company Tender for the
shares of PCS Common Stock tendered.
66
(6) In case of a tender or exchange offer (other than an odd-lot
tender offer) made by the Company or any Subsidiary of the Company for all
or any portion of the PCS Common Stock (a "Triggering Tender Offer") shall
expire and such Triggering Tender Offer (as amended upon the expiration
thereof) that shall require the payment to stockholders based on the
acceptance (up to any maximum specified in the terms of the Triggering
Tender Offer) of an aggregate consideration having a fair market value (as
determined by the Board of Directors, whose determination shall be
conclusive and described in a Board Resolution filed with the Agent) that
combined together with:
(I) the aggregate of the cash plus the fair market value (as
determined by the Board of Directors, whose determination shall be
conclusive and described in a Board Resolution filed with the Agent),
as of the expiration of the Triggering Tender Offer, of consideration
payable in respect of any Prior Company Tender (other than
consideration payable in respect of any odd-lot tender offer) by the
Company or any Subsidiary of the Company (each for all or any portion
of the PCS Common Stock expiring within the 12 months preceding the
expiration of the Triggering Tender Offer and in respect of which no
adjustment pursuant to paragraph (5) or this paragraph (6) has been
made), and
(II) the aggregate amount of any Prior Cash Distributions made
exclusively in cash to all holders of its PCS Common Stock within the
12 months before the expiration of the Triggering Tender Offer and in
respect of which no adjustment pursuant to paragraph (5) or this
paragraph (6) has been made.
exceeds 1% of the product of the Current Market Price per share of the
PCS Common Stock on the Expiration Date of the Triggering Tender Offer
and the number of shares of PCS Common Stock outstanding on that date,
then, immediately prior to the opening of business on the date after
the date of the Expiration Time, the Settlement Rate shall be adjusted
for each Prior Cash Distribution, each Prior Company Tender, and the
Triggering Tender Offer, successively, in the order of their
occurrence as follows:
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(X) with respect to each Prior Cash Distribution, by multiplying
the Settlement Rate (either as in effect at such time or as adjusted
with respect to an earlier adjustment pursuant to this paragraph)
immediately before the distribution by a fraction, (A) the numerator
of which is the Current Market Price per share of the PCS Common Stock
on the record date for the distribution and (B) the denominator of
which is the Current Market Price per share of the PCS Common Stock on
the record date for the distribution less the amount of cash per share
distributed in the distribution, and
(Y) with respect to each Prior Company Tender or the Triggering
Tender Offer, by multiplying the Settlement Rate (either as in effect
at such time or as adjusted with respect to any earlier adjustment
pursuant to this paragraph) at the Expiration Date by a fraction (i)
the numerator of which is the product of (A) the Current Market Price
per share of the PCS Common Stock at the Expiration Time and (B) the
number of shares of PCS Common Stock outstanding immediately after
completion of the Prior Company Tender and (ii) the denominator of
which is (A) the product of (I) the Current Market Price per share of
the PCS Common Stock at the Expiration Time and (II) the number of
shares of PCS Common Stock outstanding immediately before the
Expiration Time less (B) the total amount of consideration paid in the
Prior Company Tender for the shares of PCS Common Stock tendered.
(7) The "Current Market Price" per share of PCS Common Stock on any
day means the average of the daily Closing Prices for the five consecutive
Trading Days selected by the Company commencing not more than 30 Trading
Days before, and ending not later than, the earlier of the day in question
and the day before the "ex date" with respect to the issuance or
distribution requiring such computation. For purposes of this paragraph,
the term "ex date", when used with respect to any issuance or distribution,
shall mean the first date on which the PCS Common Stock trades regular way
on such exchange or in such market without the right to receive such
issuance or distribution.
(8) All adjustments to the Settlement Rate, shall be calculated to the
nearest 1/10,000th of a share of PCS Common Stock (or if there is not a
nearest
68
1/10,000th of a share to the next lower 1/10,000th of a share). No
adjustment in the Settlement Rate shall be required unless such adjustment
would require an increase or decrease of at least one percent therein;
provided, however, that any adjustments which by reason of this
subparagraph are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. If an adjustment is made to the
Settlement Rate pursuant to paragraph (1), (2), (3), (4), (5), (6) or (9)
of this Section 5.8(a), an adjustment shall also be made to the Applicable
Market Value solely to determine which of clauses (a), (b) or (c) of the
definition of Settlement Rate in Section 5.1 will apply on the Purchase
Contract Settlement Date. Such adjustment shall be made by multiplying the
Applicable Market Value by a fraction of which the numerator shall be the
Settlement Rate immediately after such adjustment pursuant to paragraph
(1), (2), (3), (4), (5), (6) or (9) of this Section 5.6(a) and the
denominator shall be the Settlement Rate immediately before such
adjustment; provided, however, that if such adjustment to the Settlement
Rate is required to be made pursuant to the occurrence of any of the events
contemplated by paragraph (1), (2), (3), (4), (5), (6) or (9) of this
Section 5.8(a) during the period taken into consideration for determining
the Applicable Market Value, appropriate and customary adjustments shall be
made to the Settlement Rate.
(9) The Company may make such increases in the Settlement Rate, in
addition to those required by this Section, as it considers to be advisable
in order to avoid or diminish any income tax to any holders of shares of
PCS Common Stock resulting from any dividend or distribution of stock or
issuance of rights or warrants to purchase or subscribe for stock or from
any event treated as such for income tax purposes or for any other reasons.
(b) Adjustment for Certain Recapitalization Transactions.
(1) If the Company completes an exchange offer, recapitalization,
reorganization or similar transaction (a "Recapitalization Transaction")
pursuant to which some, but not all, of the shares of PCS Common Stock
outstanding immediately prior to such transaction are exchanged for or
converted, changed or reclassified into other Common Equity Securities,
then thereafter each Holder of Securities will receive on the Purchase
Contract Settlement Date with respect to each Purchase
69
Contract forming a part thereof, at such Holder's election, either (i)
shares of PCS Common Stock at a Settlement Rate equal to the Settlement
Rate in effect immediately prior to such Recapitalization Transaction as
adjusted in accordance with subsection (a) of this Section 5.8 (A) for any
premium paid to holders of PCS Common Stock in such Recapitalization
Transaction other than in the form of such other Common Equity Securities
representing a greater economic interest in the Company than the shares of
PCS Common Stock in respect of which such Common Equity Securities were
issued (but without adjustment for any such premium paid in the form of
such other Common Equity Securities) and (B) for any transactions or events
occurring after such Recapitalization Transaction that require an
adjustment to the Settlement Rate under subsection (a) of this Section 5.8
or (ii) shares of such other Common Equity Securities at a Settlement Rate
determined under Section 5.1 based on the Applicable Market Value of such
other Common Equity Securities and equal to the Settlement Rate in effect
immediately prior to such Recapitalization Transaction multiplied by the
number of such other Common Equity Securities issued in respect of one
share of PCS Common Stock in such Recapitalization Transaction and as
adjusted in accordance with subsection (a) of this Section 5.8 (A) for any
premium paid to holders of PCS Common Stock in such Recapitalization
Transaction other than in the form of such other Common Equity Securities
and (B) for any transactions or events occurring after such
Recapitalization Transaction that require an adjustment to the Settlement
Rate under subsection (a) of this Section 5.8, with the provisions of such
subsection applying to events relating to such other Common Equity
Securities to the same extent as they apply to events relating to the PCS
Common Stock. In the event that any Recapitalization Transaction of the
type contemplated by this paragraph (1) occurs, the Company shall, at least
30 Business Days prior to the Purchase Contract Settlement Date, provide
each Holder with an election form pursuant to which the Holder may elect to
receive either PCS Common Stock or the other Common Equity Securities upon
settlement of the Purchase Contracts as provided in this paragraph (1). Any
Holder for whom the Company has not received a completed election form on
or before the Business Day immediately preceding the Purchase Contract
Settlement Date will be deemed to have elected to receive PCS Common Stock.
(2) If (i) the Company completes a Recapitalization Transaction
pursuant to which all of
70
the shares of PCS Common Stock outstanding immediately prior to such
transaction are exchanged for or converted, changed or reclassified into
shares of other Common Equity Securities, or (ii) all of the outstanding
shares of PCS Common Stock are converted into shares of FON Common Stock or
common stock of a Subsidiary pursuant to the PCS Conversion Provisions or
PCS Optional Redemption Provision (in any case, a "Conversion") then
thereafter each Holder of Securities will receive on the Purchase Contract
Settlement Date with respect to each Purchase Contract forming a part
thereof only such other Common Equity Securities at a Settlement Rate
determined under Section 5.1 based on the Applicable Market Value of such
other Common Equity Securities and equal to the Settlement Rate in effect
immediately prior to such Recapitalization Transaction or Conversion
multiplied by the number of such other Common Equity Securities issued in
respect of one share of PCS Common Stock in such Recapitalization
Transaction or Conversion and as adjusted in accordance with subsection (a)
of this Section 5.8 (A) for any premium paid to holders of PCS Common Stock
in such Recapitalization Transaction other than in the form of such other
Common Equity Securities and (B) for any transactions or events occurring
after such Recapitalization Transaction or Conversion that require an
adjustment to the Settlement Rate under subsection (a) of this Section 5.8,
with the provisions of such subsection applying to events relating to such
other Common Equity Securities to the same extent as they apply to events
relating to the PCS Common Stock.
(c) Adjustment for Consolidation, Merger, Spin-Off Transaction or Other
Reorganization Event. In the event of (i) any Recapitalization Transaction
pursuant to which all outstanding shares of PCS Common Stock are exchanged for
or converted, changed or reclassified into cash, securities or other property
not including Common Equity Securities, (ii) any consolidation, merger or other
business combination of the Company with or into another Person (other than a
merger, consolidation or other business combination in which the Company is the
continuing corporation and in which the PCS Common Stock outstanding immediately
prior to the merger, consolidation or other business combination is not
exchanged for cash, securities or other property of the Company or another
corporation), (iii) any sale, transfer, lease or conveyance to another Person of
the property of the Company as an entirety or substantially as an entirety, (iv)
any statutory exchange of securities of the Company with another Person (other
than in connection with a merger acquisition or other business combination), (v)
any Spin-Off
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Transaction involving the conversion, exchange or reclassification of all of the
outstanding shares of PCS Common Stock into securities of another Person or a
combination of securities of another Person and Common Equity Securities or (vi)
any liquidation, dissolution or winding up of the Company other than as a result
of or after the occurrence of a Termination Event (any such event described in
clauses (i)-(vi), a "Reorganization Event"), the Settlement Rate will be
adjusted to provide that each Holder of Securities will receive on the Purchase
Contract Settlement Date with respect to each Purchase Contract forming a part
thereof (or upon any Early Settlement), the kind and amount of securities, cash
and other property receivable upon such Reorganization Event (without any
interest thereon, and without any right to dividends or distribution thereon
which have a record date that is prior to the Purchase Contract Settlement Date)
by a Holder of the number of shares of PCS Common Stock issuable on account of
each Purchase Contract if the Purchase Contract Settlement Date had occurred
immediately prior to such Reorganization Event assuming such Holder of PCS
Common Stock is not a Person with which the Company consolidated or into which
the Company merged or which merged into the Company or to which such sale or
transfer was made, as the case may be (any such Person, a "Constituent Person"),
or an Affiliate of a Constituent Person to the extent such Reorganization Event
provides for different treatment of PCS Common Stock held by Affiliates of the
Company and non-affiliates and such Holder failed to exercise its rights of
election, if any, as to the kind or amount of securities, cash and other
property receivable upon such Reorganization Event (provided that if the kind or
amount of securities, cash and other property receivable upon such
Reorganization Event is not the same for each share of PCS Common Stock held
immediately prior to such Reorganization Event by other than a Constituent
Person or an Affiliate thereof and in respect of which such rights of election
shall not have been exercised (a "non-electing share"), then for the purpose of
this Section the kind and amount of securities, cash and other property
receivable upon such Reorganization Event by each non-electing share shall be
deemed to be the kind and amount so receivable per share by the non-electing
shares).
In the event of such a Reorganization Event described in clauses
(ii)-(vi) above, the Person formed by such consolidation, merger, Spin-Off
Transaction, business combination or exchange or the Person which acquires or
leases the assets of the Company or, in the event of a liquidation or
dissolution of the Company, the Company or a liquidating trust created in
connection therewith, shall execute and deliver to the Agent an agreement
supplemental
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hereto providing that the Holders of each Outstanding Security shall have the
rights provided by this Section 5.8. Such supplemental agreement shall provide
for adjustments which, for events subsequent to the effective date of such
supplemental agreement, shall be as nearly equivalent as may be practicable to
the adjustments provided for in this Section. In the event of a Reorganization
Event described in clause (i) above, the adjustment provisions of this Section
shall apply to the extent practicable to any securities issued in the
Recapitalization Transaction. The above provisions of this Section shall
similarly apply to successive Reorganization Events.
(d) Redemption of PCS Common Stock. In case the Company shall pay a
dividend on or redeem all or most of the outstanding shares of PCS Common Stock
pursuant to the PCS Mandatory Redemption Provision in or for cash, securities or
other property (any such redemption, a "PCS Stock Redemption"), the Company
shall provide Holders of Purchase Contracts with no less than 30 days prior
written notice of such dividend or PCS Stock Redemption. In that event, Holders
of Purchase Contracts, in the case of such a dividend, may, and in the case of
such a PCS Stock Redemption, must elect Early Settlement at any time on or prior
to the third Business Day immediately preceding such redemption. In connection
with any Early Settlement pursuant to this Section 5.8(d) (a "Redemption Early
Settlement"), notwithstanding Section 5.11(b), Holders shall be entitled to
receive (i) the number of shares of PCS Common Stock equal to the Settlement
Rate as if the date of Early Settlement was the Purchase Contract Settlement
Date plus (ii) an amount of cash equal to the present value of each of the
Contract Adjustment Payments to which such Holder would have been entitled if
such Holder had held such Purchase Contract until the Purchase Contract
Settlement Date, discounted back from the date each such Contract Adjustment
Payment would have been made to the date of Early Settlement at a discount rate
equal to 7.125%, compounded quarterly. In the event that a Holder of Treasury
Units elects to engage in a Redemption Early Settlement, such Holder shall also
be entitled to surrender the Treasury Securities underlying such Treasury Units
(in lieu of cash payment of the Stated Amount upon Early Settlement as set forth
in Section 5.11), in full satisfaction of such Holder's obligation to deliver
the Purchase Price upon such Redemption Early Settlement. In case of a PCS Stock
Redemption, the Company and Sprint Capital shall cause the Remarketing Agent to
remarket the Notes at a price of approximately 100.5% (but not less than 100%)
of the aggregate principal amount of such Notes. Any such remarketing must be on
the same terms as the Final
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Remarketing and, if effected, shall be the "Final Remarketing" for purposes of
this Agreement.
SECTION 5.9. Notice of Adjustments and Certain Other Events. (a)
Whenever the Settlement Rate is adjusted as herein provided, the Company shall:
(i) forthwith compute the Settlement Rate in accordance with Section
5.8 and prepare and transmit to the Agent an Officer's Certificate setting
forth the Settlement Rate, the method of calculation thereof in reasonable
detail, and the facts requiring such adjustment and upon which such
adjustment is based; and
(ii) within 10 Business Days following the occurrence of an event that
requires an adjustment to the Settlement Rate pursuant to Section 5.8 (or
if the Company is not aware of such occurrence, as soon as practicable
after becoming so aware), provide a written notice to the Holders of the
Securities of the occurrence of such event and a statement in reasonable
detail setting forth the method by which the adjustment to the Settlement
Rate was determined and setting forth the adjusted Settlement Rate.
(b) The Agent shall not at any time be under any duty or responsibility to
any Holder of Securities to determine whether any facts exist which may require
any adjustment of the Settlement Rate, or with respect to the nature or extent
or calculation of any such adjustment when made, or with respect to the method
employed in making the same. The Agent shall not be accountable with respect to
the validity or value (or the kind or amount) of any shares of PCS Common Stock,
or of any securities or property, which may at the time be issued or delivered
with respect to any Purchase Contract; and the Agent makes no representation
with respect thereto. The Agent shall not be responsible for any failure of the
Company to issue, transfer or deliver any shares of PCS Common Stock pursuant to
a Purchase Contract or to comply with any of the duties, responsibilities or
covenants of the Company contained in this Article.
SECTION 5.10. Termination Event; Notice. The Purchase Contracts and
all obligations and rights of the Company and the Holders thereunder, including,
without limitation, the rights and obligations of Holders to purchase PCS Common
Stock, shall immediately and automatically terminate, without the necessity of
any notice or action by any Holder, the Agent or the Company, if, on or prior to
the Purchase Contract Settlement Date, a Termination Event shall have occurred.
Upon and after the
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occurrence of a Termination Event, the Securities shall thereafter represent the
right to receive the Notes or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, as the case may be, forming a part of such Securities in
the case of Corporate Units, or Treasury Securities in the case of Treasury
Units, in accordance with the provisions of Section 4.3 of the Pledge Agreement;
provided, however, that, to the extent that a Holder of Corporate Units or
Treasury Units would otherwise be entitled to receive less than $1,000 principal
amount at maturity of the Treasury Portfolio or the Treasury Securities, the
Agent shall dispose of such securities for cash, and transfer the appropriate
amount of such cash to such Holder in accordance with such Holder's
instructions. Upon the occurrence of a Termination Event, the Company shall
promptly but in no event later than two Business Days thereafter give written
notice to the Agent, the Collateral Agent and to the Holders, at their addresses
as they appear in the Register.
SECTION 5.11. Early Settlement. (a) Subject to and upon compliance
with the provisions of this Section 5.11, at the option of the Holder thereof,
Purchase Contracts underlying Securities having an aggregate Stated Amount equal
to $1,000 or an integral multiple thereof may be settled early ("Early
Settlement") in the case of Corporate Units (unless a Tax Event Redemption or
any earlier Successful Remarketing has occurred) on or prior to the fifth
Business Day immediately preceding the Purchase Contract Settlement Date and in
the case of Treasury Units on or prior to the second Business Day immediately
preceding the Purchase Contract Settlement Date, in each case, as provided
herein; provided however, that if a Tax Event Redemption or any earlier
Successful Remarketing has occurred and the Treasury Portfolio has become a
component of the Corporate Units, Purchase Contracts underlying Corporate Units
may be settled early on or prior to the second Business Day immediately
preceding the Purchase Contract Settlement Date, but only in an aggregate amount
of 40 Corporate Units or in an integral multiple thereof. In order to exercise
the right to effect Early Settlement with respect to any Purchase Contracts, the
Holder of the Certificate evidencing Securities shall deliver such Certificate
to the Agent at the Corporate Trust Office or the New York Office duly endorsed
for transfer to the Company or in blank with the form of Election to Settle
Early on the reverse thereof duly completed and accompanied by payment (payable
to the Company) in immediately available funds in an amount (the "Early
Settlement Amount") equal to the product of (i) the Stated Amount times (ii) the
number (A) of Purchase Contracts with respect to which the Holder
75
has elected to effect Early Settlement, plus (B) if such delivery is made with
respect to any Purchase Contracts during the period from close of business on
any Record Date next preceding any Payment Date to the opening of business on
such Payment Date, an amount equal to the Contract Adjustment Payments, if any,
payable on such Payment Date with respect to such Purchase Contracts; provided
that no payment shall be required pursuant to clause (B) of this sentence if the
Company shall have elected to defer the Contract Adjustment Payments which would
otherwise be payable on such Payment Date. Except as provided in the immediately
preceding sentence and subject to the second to last paragraph of Section 5.2,
no payment or adjustment shall be made upon Early Settlement of any Purchase
Contract on any Contract Adjustment Payments accrued on such Purchase Contract
or on account of dividends on the PCS Common Stock issued upon such Early
Settlement or on account of any Deferred Contract Adjustment Payments. If the
foregoing requirements are first satisfied with respect to Purchase Contracts
underlying any Securities at or prior to 5:00 p.m., New York City time, on a
Business Day, such day shall be the "Early Settlement Date" with respect to such
Securities and if such requirements are first satisfied after 5:00 p.m., New
York City time, on a Business Day or on a day that is not a Business Day, the
"Early Settlement Date" with respect to such Securities shall be the next
succeeding Business Day.
(b) Upon Early Settlement of Purchase Contracts by a Holder of the
related Securities and payment of any transfer or similar taxes payable by such
Holder in connection with the issuance of the related PCS Common Stock to any
person other than such Holder, the Company shall issue, and the Holder shall be
entitled to receive, .8364 shares of PCS Common Stock on account of each
Purchase Contract as to which Early Settlement is effected (the "Early
Settlement Rate"). The Early Settlement Rate shall be adjusted in the same
manner and at the same time as the Settlement Rate is adjusted. As promptly as
practicable after Early Settlement of Purchase Contracts in accordance with the
provisions of this Section 5.11, the Company shall issue and shall deliver to
the Agent at the Corporate Trust Office a certificate or certificates for the
full number of shares of PCS Common Stock issuable (or otherwise required to be
delivered) upon such Early Settlement together with payment in lieu of any
fraction of a share, as provided in Section 5.12.
(c) No later than the third Business Day after the applicable Early
Settlement Date the Company shall cause (i) the shares of PCS Common Stock
issuable (or otherwise
76
required to be delivered) upon Early Settlement of Purchase Contracts to be
delivered, and (ii) the related Notes or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, in the case of Corporate Units, or the
related Treasury Securities, in the case of Treasury Units, to be released from
the Pledge by the Collateral Agent and transferred, in each case to the Agent
for delivery to the Holder thereof or its designee.
(d) Upon Early Settlement of any Purchase Contracts, and subject to
receipt of shares of PCS Common Stock from the Company and the Notes, the
appropriate Applicable Ownership Interest of the Treasury Portfolio or Treasury
Securities, as the case may be, from the Collateral Agent, as applicable, the
Agent shall, in accordance with the instructions provided by the Holder thereof
on the applicable form of Election to Settle Early on the reverse of the
Certificate evidencing the related Securities, (i) transfer to the Holder the
Notes, Treasury Portfolio or Treasury Securities, as the case may be, forming a
part of such Securities, and (ii) deliver to the Holder a certificate or
certificates for the full number of shares of PCS Common Stock issuable (or
otherwise required to be delivered) upon such Early Settlement together with
payment in lieu of any fraction of a share, as provided in Section 5.12.
(e) In the event that Early Settlement is effected with respect to
Purchase Contracts underlying less than all the Securities evidenced by a
Certificate, upon such Early Settlement the Company shall execute and the Agent
shall authenticate, countersign and deliver to the Holder thereof, at the
expense of the Company, a Certificate evidencing the Securities as to which
Early Settlement was not effected.
SECTION 5.12. No Fractional Shares. No fractional shares or scrip
representing fractional shares of PCS Common Stock shall be issued or delivered
upon settlement on the Purchase Contract Settlement Date or upon Early
Settlement of any Purchase Contracts. If Certificates evidencing more than one
Purchase Contract shall be surrendered for settlement at one time by the same
Holder, the number of full shares of PCS Common Stock which shall be delivered
upon settlement shall be computed on the basis of the aggregate number of
Purchase Contracts evidenced by the Certificates so surrendered. Instead of any
fractional share of PCS Common Stock which would otherwise be deliverable upon
settlement of any Purchase Contracts on the Purchase Contract Settlement Date or
upon Early Settlement, the Company, through the Agent, shall make a cash payment
in respect of such fractional interest in an amount equal to
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the value of such fractional shares times the Applicable Market Value. The
Company shall provide the Agent from time to time with sufficient funds to
permit the Agent to make all cash payments required by this Section 5.12 in a
timely manner.
SECTION 5.13. Charges and Taxes. The Company will pay all stock
transfer and similar taxes attributable to the initial issuance and delivery of
the shares of PCS Common Stock pursuant to the Purchase Contracts and in payment
of any Deferred Contract Adjustment Payment; provided, however, that the Company
shall not be required to pay any such tax or taxes which may be payable in
respect of any exchange of or substitution for a Certificate evidencing a
Security or any issuance of a share of PCS Common Stock in a name other than
that of the registered Holder of a Certificate surrendered in respect of the
Securities evidenced thereby, other than in the name of the Agent, as custodian
for such Holder, and the Company shall not be required to issue or deliver such
share certificates or Certificates unless or until the Person or Persons
requesting the transfer or issuance thereof shall have paid to the Company the
amount of such tax or shall have established to the satisfaction of the Company
that such tax has been paid or that no such tax is due.
ARTICLE VI
Remedies
SECTION 6.1. Unconditional Right of Holders to Purchase PCS Common
Stock. The Holder of any Corporate Units or Treasury Units shall have the right,
which is absolute and unconditional, (A), subject to the right of the Company to
defer payment thereof pursuant to Section 5.4, and to the forfeiture of any
Deferred Contract Adjustment Payments upon Early Settlement pursuant to Section
5.11(c) or upon the occurrence of a Termination Event, to receive payment of
each installment of the Contract Adjustment Payments, if any, with respect to
the Purchase Contract constituting a part of such Security on the respective
Payment Date for such Security and (B) to purchase PCS Common Stock pursuant to
such Purchase Contract and to institute suit for the enforcement of such right
to purchase PCS Common Stock, and such right shall not be impaired without the
consent of such Holder.
SECTION 6.2. Restoration of Rights and Remedies. If any Holder has
instituted any proceeding to enforce any right or remedy under this Agreement
and such proceeding has
78
been discontinued or abandoned for any reason, or has been determined adversely
to such Holder, then and in every such case, subject to any determination in
such proceeding, the Company and such Holder shall be restored severally and
respectively to their former positions hereunder and thereafter all rights and
remedies of such Holder shall continue as though no such proceeding had been
instituted.
SECTION 6.3. Rights and Remedies Cumulative. Except as otherwise
provided with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Certificates in the last paragraph of Section 3.10, no right or
remedy herein conferred upon or reserved to the Holders is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
SECTION 6.4. Delay or Omission Not Waiver. No delay or omission of any
Holder to exercise any right or remedy upon a default shall impair any such
right or remedy or constitute a waiver of any such right. Every right and remedy
given by this Article or by law to the Holders may be exercised from time to
time, and as often as may be deemed expedient, by such Holders.
SECTION 6.5. Undertaking for Costs. All parties to this Agreement
agree, and each Holder of Corporate Units or Treasury Units, by its acceptance
of such Corporate Units or Treasury Units shall be deemed to have agreed, that
any court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Agreement, or in any suit against the Agent for any
action taken, suffered or omitted by it as Agent, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
provided that the provisions of this Section shall not apply to any suit
instituted by the Company, to any suit instituted by the Agent, to any suit
instituted by any Holder, or group of Holders, holding in the aggregate more
than 10% of the Outstanding Securities, or to any suit instituted by any Holder
for the enforcement of interest on any Notes on or after the respective Payment
Date therefor in respect of any Security held by such
79
Holder, or for enforcement of the right to purchase shares of PCS Common Stock
under the Purchase Contracts constituting part of any Security held by such
Holder.
SECTION 6.6. Waiver of Stay or Extension Laws. The Company covenants
(to the extent that it may lawfully do so) that it will not at any time insist
upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, which may affect the covenants or the performance of this
Agreement; and the Company (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law and covenants that it
will not hinder, delay or impede the execution of any power herein granted to
the Agent or the Holders, but will suffer and permit the execution of every such
power as though no such law had been enacted.
ARTICLE VII
The Agent
SECTION 7.1. Certain Duties and Responsibilities. (a) (1) The Agent
undertakes to perform, with respect to the Securities, such duties and only such
duties as are specifically set forth in this Agreement and the Pledge Agreement,
and no implied covenants or obligations shall be read into this Agreement
against the Agent; and
(2) The Agent may, with respect to the Securities, conclusively rely,
as to the truth of the statements and the correctness of the opinions
expressed therein, upon certificates or opinions furnished to the Agent and
conforming to the requirements of this Agreement, but in the case of any
certificates or opinions which by any provision hereof are specifically
required to be furnished to the Agent, the Agent shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Agreement, but need not confirm or investigate the
accuracy of mathematical calculations stated therein.
(b) No provision of this Agreement shall be construed to relieve the Agent
from liability for its own negligent action, its own negligent failure to act,
or its own wilful misconduct or bad faith, except that:
(1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
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(2) the Agent shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it shall be proved by a court
of competent jurisdiction that the Agent was negligent in ascertaining the
pertinent facts; and
(3) no provision of this Agreement shall require the Agent to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of
its rights or powers.
(c) Whether or not therein expressly so provided, every provision of this
Agreement relating to the conduct or affecting the liability of or affording
protection to the Agent shall be subject to the provisions of this Section.
(d) The Agent is authorized to execute and deliver the
Pledge Agreement in its capacity as Agent.
SECTION 7.2. Notice of Default. Within 30 days after the occurrence of
any default by the Company hereunder of which a Responsible Officer of the Agent
has actual knowledge, the Agent shall transmit by mail to the Company and the
Holders of Securities, as their names and addresses appear in the Register,
notice of such default hereunder, unless such default shall have been cured or
waived.
SECTION 7.3. Certain Rights of Agent. Subject to the provisions of
Section 7.1:
(a) the Agent may rely and shall be protected in acting or refraining from
acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document believed by it to
be genuine and to have been signed or presented by the proper party or
parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by an Officer's Certificate, Issuer Order or Issuer
Request, and any resolution of the Board of Directors of the Company may be
sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Agreement the Agent shall deem
it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Agent (unless other
evidence be herein specifically prescribed) may, in the
81
absence of bad faith on its part, rely upon an Officer's Certificate of
the Company;
(d) the Agent may consult with counsel of its selection and the advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(e) the Agent shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document,
but the Agent, in its discretion, may make reasonable further inquiry or
investigation into such facts or matters related to the execution, delivery
and performance of the Purchase Contracts as it may see fit, and, if the
Agent shall determine to make such further inquiry or investigation, it
shall be given a reasonable opportunity to examine the books, records and
premises of the Company, personally or by agent or attorney; and
(f) the Agent may execute any of the powers hereunder or perform any duties
hereunder either directly or by or through agents or attorneys or an
Affiliate and the Agent shall not be responsible for any misconduct or
negligence on the part of any agent or attorney or an Affiliate appointed
with due care by it hereunder.
SECTION 7.4. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Certificates shall be taken as the
statements of the Company and the Agent assumes no responsibility for their
accuracy. The Agent makes no representations as to the validity or sufficiency
of either this Agreement or of the Securities, or of the Pledge Agreement or the
Pledge. The Agent shall not be accountable for the use or application by the
Company of the proceeds in respect of the Purchase Contracts.
SECTION 7.5. May Hold Securities. Any Registrar or any other agent of
the Company, or the Agent and its Affiliates, in their individual or any other
capacity, may become the owner or pledgee of Securities and may otherwise deal
with the Company, the Collateral Agent or any other Person with the same rights
it would have if it were not Registrar or such other agent, or the Agent.
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SECTION 7.6. Money Held in Custody. Money held by the Agent in custody
hereunder need not be segregated from the other funds except to the extent
required by law or provided herein. The Agent shall be under no obligation to
invest or pay interest on any money received by it hereunder except as otherwise
expressly provided herein or as otherwise agreed in writing with the Company.
SECTION 7.7. Compensation and Reimbursement. The Company agrees:
(1) to pay to the Agent such compensation for all services rendered by
it hereunder in accordance with Schedule A attached hereto and made a part
hereof;
(2) except as otherwise expressly provided herein, to reimburse the
Agent upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Agent in accordance with any provision of
this Agreement (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence, willful
misconduct or bad faith; and
(3) to indemnify the Agent, its officers, directors, employees, agents
and any predecessor Agent for, and to hold it harmless against, any loss,
liability or expense, including taxes (other than taxes based upon,
measured by or determined by the income of the Agent) incurred without
negligence, willful misconduct or bad faith on its part, arising out of or
in connection with the acceptance or administration of its duties
hereunder, including the costs and expenses of defending itself against any
claim or liability in connection with the exercise or performance of any of
its powers or duties hereunder.
The provisions of this Section shall survive the resignation or
termination of the Agent or the termination of this Agreement.
SECTION 7.8. Corporate Agent Required; Eligibility. There shall at all
times be an Agent hereunder which shall be a corporation organized and doing
business under the laws of the United States of America, any State thereof or
the District of Columbia, authorized under such laws to exercise corporate trust
powers, having (or being a subsidiary of a bank holding company having) a
combined capital and surplus of at least $50,000,000, subject to supervision or
examination by Federal or State authority and
83
having an office in the Borough of Manhattan, The City of New York, if there be
such a corporation in the Borough of Manhattan, The City of New York, qualified
and eligible under this Article and willing to act on reasonable terms. If such
corporation publishes reports of condition at least annually, pursuant to law
or to the requirements of said supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time the Agent shall cease to
be eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article. The provisions of this Section shall survive the termination of this
Agreement.
SECTION 7.9. Resignation and Removal; Appointment of Successor. (a) No
resignation or removal of the Agent and no appointment of a successor Agent
pursuant to this Article shall become effective until the acceptance of
appointment by the successor Agent in accordance with the applicable
requirements of Section 7.10.
(b) The Agent may resign at any time by giving written notice thereof
to the Company 60 days prior to the effective date of such resignation. If the
instrument of acceptance by a successor Agent required by Section 7.10 shall not
have been delivered to the Agent within 30 days after the giving of such notice
of resignation, the resigning Agent may petition any court of competent
jurisdiction for the appointment of a successor Agent.
(c) The Agent may be removed at any time by Act of the Holders of a
majority in number of the Outstanding Securities delivered to the Agent and the
Company. If the instrument of acceptance by a successor Agent required by
Section 7.10 shall not have been delivered to the Agent within 30 days after the
giving of such notice of resignation, the resigning Agent may petition any court
of competent jurisdiction for the appointment of a successor Agent.
(d) If at any time
(1) the Agent fails to comply with Section 310(b) of the TIA, as if
the Agent were an indenture trustee under an indenture qualified under the
TIA, after written request therefor by the Company or by any Holder who has
been a bona fide Holder of a Security for at least six months, or
84
(2) the Agent shall cease to be eligible under Section 7.8 and shall
fail to resign after written request therefor by the Company or by any such
Holder, or
(3) the Agent shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or a receiver of the Agent or of its property shall
be appointed or any public officer shall take charge or control of the
Agent or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then, in any such case, (i) the Company by a
Board Resolution may remove the Agent, or (ii) any Holder who has been a
bona fide Holder of a Security for at least six months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Agent and the appointment of a
successor Agent.
(e) If the Agent shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Agent for any cause, the
Company, by a Board Resolution, shall promptly appoint a successor Agent and
shall comply with the applicable requirements of Section 7.10. If no successor
Agent shall have been so appointed by the Company and accepted appointment in
the manner required by Section 7.10, any Holder who has been a bona fide Holder
of a Security for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Agent.
(f) The Company shall give, or shall cause such successor Agent to
give, notice of each resignation and each removal of the Agent and each
appointment of a successor Agent by mailing written notice of such event by
first-class mail, postage prepaid, to all Holders as their names and addresses
appear in the applicable Register. Each notice shall include the name of the
successor Agent and the address of its Corporate Trust Office and New York
Office, if any.
SECTION 7.10. Acceptance of Appointment by Successor. (a) In case of
the appointment hereunder of a successor Agent, every such successor Agent so
appointed shall execute, acknowledge and deliver to the Company and to the
retiring Agent an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Agent shall become effective and such
successor Agent, without any further act, deed or conveyance, shall become
vested with all the rights, powers, agencies and duties of
85
the retiring Agent; but, on the request of the Company or the successor Agent,
such retiring Agent shall, upon payment of its charges, execute and deliver an
instrument transferring to such successor Agent all the rights, powers and
trusts of the retiring Agent and shall duly assign, transfer and deliver to
such successor Agent all property and money held by such retiring Agent
hereunder.
(b) Upon request of any such successor Agent, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Agent all such rights, powers and agencies referred
to in paragraph (a) of this Section.
(c) No successor Agent shall accept its appointment unless at the time
of such acceptance such successor Agent shall be qualified and eligible under
this Article.
SECTION 7.11. Merger, Conversion, Consolidation or Succession to
Business. Any corporation into which the Agent may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Agent shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Agent, shall be the successor of the Agent hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Certificates shall have been
authenticated and executed on behalf of the Holders, but not delivered, by the
Agent then in office, any successor by merger, conversion or consolidation to
such Agent may adopt such authentication and execution and deliver the
Certificates so authenticated and executed with the same effect as if such
successor Agent had itself authenticated and executed such Securities.
SECTION 7.12. Preservation of Information; Communications to Holders.
(a) The Agent shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders received by the Agent in its
capacity as Registrar.
(b) If three or more Holders (herein referred to as "applicants")
apply in writing to the Agent, and furnish to the Agent reasonable proof that
each such applicant has owned a Security for a period of at least six months
preceding the date of such application, and such application states that the
applicants desire to communicate with other Holders with respect to their rights
under this Agreement or
86
under the Securities and is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, then the Agent shall
mail to all the Holders copies of the form of proxy or other communication which
is specified in such request, with reasonable promptness after a tender to the
Agent of the materials to be mailed and of payment, or provision for the
payment, of the reasonable expenses of such mailing.
SECTION 7.13. No Obligations of Agent. Except to the extent otherwise
provided in this Agreement, the Agent assumes no obligations and shall not be
subject to any liability under this Agreement, the Pledge Agreement or any
Purchase Contract in respect of the obligations of the Holder of any Security
thereunder. The Company agrees, and each Holder of a Certificate, by his
acceptance thereof, shall be deemed to have agreed, that the Agent's execution
of the Certificates on behalf of the Holders shall be solely as agent and
attorney-in-fact for the Holders, and that the Agent shall have no obligation to
perform such Purchase Contracts on behalf of the Holders, except to the extent
expressly provided in Article V hereof.
SECTION 7.14. Tax Compliance. (a) The Agent, on its own behalf and on
behalf of the Company, will comply with all applicable certification,
information reporting and withholding (including "backup" withholding)
requirements imposed by applicable tax laws, regulations or administrative
practice with respect to (i) any payments made with respect to the Securities or
(ii) the issuance, delivery, holding, transfer, redemption or exercise of rights
under the Securities. Such compliance shall include, without limitation, the
preparation and timely filing of required returns and the timely payment of all
amounts required to be withheld to the appropriate taxing authority or its
designated agent.
(b) The Agent shall comply with any written direction received from
the Company with respect to the application of such requirements to particular
payments or Holders or in other particular circumstances, and may for purposes
of this Agreement rely on any such direction in accordance with the provisions
of Section 7.1(a)(2) hereof.
(c) The Agent shall maintain all appropriate records documenting
compliance with such requirements, and shall make such records available, on
written request, to the Company or its authorized representative within a
reasonable period of time after receipt of such request.
87
ARTICLE VIII
Supplemental Agreements
SECTION 8.1. Supplemental Agreements Without Consent of Holders.
Without the consent of any Holders, the Company and the Agent, at any time and
from time to time, may enter into one or more agreements supplemental hereto, in
form satisfactory to the Company and the Agent, for any of the following
purposes:
(1) to evidence the succession of another Person to the Company, and
the assumption by any such successor of the covenants of the Company herein
and in the Certificates; or
(2) 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; or
(3) to evidence and provide for the acceptance of appointment
hereunder by a successor Agent; or
(4) to make provision with respect to the rights of Holders pursuant
to the requirements of Section 5.8(c); or
(5) to cure any ambiguity, to correct or supplement any provisions
herein which may be inconsistent with any other 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 8.2. Supplemental Agreements with Consent of Holders. With the
consent of the Holders of not less than a majority of the Outstanding Purchase
Contracts voting together as one class, by Act of said Holders delivered to the
Company and the Agent, the Company, when authorized by a Board Resolution, and
the Agent may enter into an agreement or agreements supplemental hereto for the
purpose of modifying in any manner the terms of the Purchase Contracts or the
provisions of this Agreement or the rights of the Holders in respect of the
Securities (other than the Notes, which may be modified only in accordance with
the applicable provisions of the Indenture; provided, however, that, except as
contemplated herein, no such supplemental agreement shall, without the consent
of the Holder of each Outstanding Security affected thereby,
88
(1) change any Payment Date;
(2) change the amount or the type of Collateral required to be Pledged
to secure a Holder's obligations under any Purchase Contract, impair the
right of the Holder of any Purchase Contract to receive distributions on
the related Collateral (except for the rights of Holders of Corporate Units
to substitute the Treasury Securities for the pledged Notes or the rights
of holders of Treasury Units to substitute Notes for the Pledged Treasury
Securities) or otherwise adversely affect the Holder's rights in or to such
Collateral or adversely alter the rights in or to such Collateral;
(3) reduce any Contract Adjustment Payments, if any, or any Deferred
Contract Adjustment Payment, or change any place where, or the coin or
currency in which, any Contract Adjustment Payment is payable;
(4) impair the right to institute suit for the enforcement of any
Purchase Contract, any Contract Adjustment Payment, if any, or any Deferred
Contract Adjustment Payment;
(5) reduce the number of shares of PCS Common Stock (or the amount of
any other property) to be purchased pursuant to any Purchase Contract,
increase the price to purchase shares of PCS Common Stock (or any other
property) upon settlement of any Purchase Contract, change the Purchase
Contract Settlement Date or otherwise adversely affect the Holder's rights
under any Purchase Contract; or
(6) reduce the percentage of the outstanding Purchase Contracts the
consent of whose Holders is required for any such supplemental agreement;
provided, that if any amendment or proposal referred to above would adversely
affect only the Corporate Units or the Treasury Units, then only the affected
class of Holder as of the record date for the Holders entitled to vote thereon
will be entitled to vote on such amendment or proposal, and such amendment or
proposal shall not be effective except with the consent of Holders of not less
than a majority of such class.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental agreement, but it shall
be sufficient if such Act shall approve the substance thereof.
89
SECTION 8.3. Execution of Supplemental Agreements. In executing, or
accepting the additional agencies created by, any supplemental agreement
permitted by this Article or the modifications thereby of the agencies created
by this Agreement, the Agent shall be entitled to receive and (subject to
Section 7.1) shall be fully protected in relying upon, an Opinion of Counsel
stating that the execution of such supplemental agreement is authorized or
permitted by this Agreement. The Agent may, but shall not be obligated to, enter
into any such supplemental agreement which affects the Agent's own rights,
duties or immunities under this Agreement or otherwise.
SECTION 8.4. Effect of Supplemental Agreements. Upon the execution of
any supplemental agreement under this Article, this Agreement and the Securities
shall be modified in accordance therewith, and such supplemental agreement 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 hereunder shall be bound thereby.
SECTION 8.5. Reference to Supplemental Agreements. Certificates
authenticated, executed on behalf of the Holders and delivered after the
execution of any supplemental agreement pursuant to this Article may, and shall
if required by the Agent, bear a notation in form approved by the Agent as to
any matter provided for in such supplemental agreement. If the Company shall so
determine, new Certificates so modified as to conform, in the opinion of the
Agent and the Company, to any such supplemental agreement may be prepared and
executed by the Company and authenticated, executed on behalf of the Holders and
delivered by the Agent in exchange for Outstanding Certificates.
ARTICLE IX
Consolidation, Merger, Sale or Conveyance
SECTION 9.1. Covenant Not to Merge, Consolidate, Sell or Convey
Property Except Under Certain Conditions. The Company covenants that it will not
merge, consolidate or consummate any other business combination with any other
Person or sell, assign, transfer, lease or convey all or substantially all of
its properties and assets to any Person or group of affiliated Persons in one
transaction or a series of related transactions, unless (a) either the Company
shall be the continuing corporation or the successor Person or its parent entity
shall expressly assume all the obligations of the Company under the Purchase
Contracts,
90
this Agreement, the Remarketing Agreement and the Pledge Agreement by one or
more supplemental agreements in form reasonably satisfactory to the Agent
and the Collateral Agent, executed and delivered to the Agent and the Collateral
Agent by such corporation, and (b) the Company or such successor Person or its
parent entity, as the case may be, shall not, immediately after such merger,
consolidation or other business combination, or such sale, assignment, transfer,
lease or conveyance, be in default of its payment or other material obligations
under this Agreement, including its obligations to deliver PCS Common Stock (or
other property) on the Purchase Contract Settlement Date or any Early Settlement
Date, the Remarketing Agreement, the Purchase Contracts or the Pledge Agreement.
SECTION 9.2. Rights and Duties of Successor Corporation. In case of
any such consolidation, merger, sale, assignment, transfer, lease or conveyance
and upon any such assumption by a successor corporation in accordance with
Section 9.1, such successor corporation shall succeed to and be substituted for
the Company with the same effect as if it had been named herein as the Company
and its predecessor shall, except in the case of a lease, be released from its
obligations under this Agreement. Such successor corporation thereupon may cause
to be signed, and may issue either in its own name or in the name of Sprint
Corporation any or all of the Certificates evidencing Securities issuable
hereunder which theretofore shall not have been signed by the Company and
delivered to the Agent; and, upon the order of such successor corporation,
instead of the Company, and subject to all the terms, conditions and limitations
in this Agreement prescribed, the Agent shall authenticate and execute on behalf
of the Holders and deliver any Certificates which previously shall have been
signed and delivered by the officers of the Company to the Agent for
authentication and execution, and any Certificate evidencing Securities which
such successor corporation thereafter shall cause to be signed and delivered to
the Agent for that purpose. All the Certificates so issued shall in all respects
have the same legal rank and benefit under this Agreement as the Certificates
theretofore or thereafter issued in accordance with the terms of this Agreement
as though all of such Certificates had been issued at the date of the execution
hereof.
In case of any such consolidation, merger, sale, assignment, transfer,
lease or conveyance, such change in phraseology and form (but not in substance)
may be made in the Certificates evidencing Securities thereafter to be issued as
may be appropriate.
91
SECTION 9.3. Opinion of Counsel Given to Agent. The Agent, subject to
Sections 7.1 and 7.3, shall receive an Opinion of Counsel as conclusive evidence
that any such consolidation, merger, sale, assignment, transfer, lease or
conveyance, and any such assumption, complies with the provisions of this
Article and that all conditions precedent hereunder to the consummation of any
such consolidation, merger, sale, assignment, transfer, lease or conveyance have
been met.
ARTICLE X
Covenants
SECTION 10.1. Performance Under Purchase Contracts. The Company
covenants and agrees for the benefit of the Holders from time to time of the
Securities that it will duly and punctually perform its obligations under the
Purchase Contracts in accordance with the terms of the Purchase Contracts and
this Agreement.
SECTION 10.2. Maintenance of Office or Agency. The Company will
maintain or cause to be maintained in the Borough of Manhattan, The City of New
York an office or agency (a "New York Office") where Certificates may be
presented or surrendered for payment and for acquisition of shares of PCS Common
Stock (or other property) upon settlement of the Purchase Contracts on the
Purchase Contract Settlement Date or Early Settlement and for transfer of
Collateral upon occurrence of a Termination Event, where Certificates may be
surrendered for registration of transfer or exchange, for a Collateral
Substitution or re-establishment of a Corporate Unit and where notices and
demands to or upon the Company in respect of the Securities and this Agreement
may be served. The Company will give prompt written notice to the Agent of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Agent with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office, and the Company hereby appoints the Agent as its agent to receive all
such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies where Certificates may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any
92
manner relieve the Company of its obligation to maintain an office or agency in
the Borough of Manhattan, The City of New York for such purposes. The Company
will give prompt written notice to the Agent of any such designation or
rescission and of any change in the location of any such other office or agency.
The Company hereby designates the Borough of Manhattan, the City of
New York, as the places of payment for the Securities, and hereby appoints the
Agent, acting through its Corporate Trust Office in Columbus, Ohio, as the
registrar, paying agent and transfer agent for the Corporate Units and the
Treasury Units and for the other purposes contemplated by this Section 10.2.
SECTION 10.3. Company to Reserve PCS Common Stock. The Company shall
at all times prior to the Purchase Contract Settlement Date reserve and keep
available, free from preemptive rights, out of its authorized but unissued PCS
Common Stock the full number of shares of PCS Common Stock issuable against
tender of payment in respect of all Purchase Contracts constituting a part of
the Securities evidenced by Outstanding Certificates.
SECTION 10.4. Covenants as to PCS Common Stock. The Company covenants
that all shares of PCS Common Stock which may be issued against tender of
payment in respect of any Purchase Contract constituting a part of the
Outstanding Securities will, upon issuance, be duly authorized, validly issued,
fully paid and nonassessable. The Company shall comply with all applicable
securities laws regulating the offer, issuance and delivery of shares of PCS
Common Stock upon settlement of Purchase Contracts and will endeavor to list
such shares on each national securities exchange or automated quotation system
on which the PCS Common Stock is then listed.
ARTICLE XI
Assignment
SECTION 11.1. Assignment of Agreement. (a) In the event that the
Company is entering into a Spin-Off Transaction to which Section 5.8(c) applies,
the Company may assign its rights and obligations under this Agreement to any
Person that, at the time of or immediately before the effective date of such
assignment, is an Affiliate of the Company, provided (i) such Person is a
corporation organized under the laws of the United States of America or a State
thereof or the District of Columbia and such Person shall
93
expressly assume all the obligations of the Company under the Purchase
Contracts, this Agreement, the Pledge Agreement and the Remarketing Agreement
and (ii) such Person is not, immediately after such assignment, in default of
its payment obligations or other material obligations under the Purchase
Contracts, this Agreement, the Remarketing Agreement or the Pledge Agreement.
(b) The Company shall provide Holders of Purchase Contracts with no
less than 30 days prior written notice of any Spin-Off Transaction to which
Section 5.8(c) applies and its intent to assign the Purchase Contracts to an
Affiliate pursuant to this Section 11.1.
[Signature pages follow.]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
SPRINT CORPORATION,
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Vice President, Finance and
Assistant Treasurer
By: /s/ Xxx Xxxxx
Name: Xxx Xxxxx
Title: Vice President and Corporate Secretary
BANK ONE, NATIONAL ASSOCIATION, as
Purchase Contract Agent
By: /s/ Xxxxx X. Xxxx
Name: Xxxxx X. Xxxx
Title: Authorized Signer
EXHIBIT A
(Form of Face of Corporate Units Certificate)
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED IN THE
NAME OF THE CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE
EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF
THIS CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY
PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC") TO THE COMPANY
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO., OR IN SUCH OTHER
NAME AS IF REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC, IF ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
No. _____
CUSIP No. 825 061 60 5 Number of Corporate Units _______
7.125% Corporate Units
This Corporate Units Certificate certifies that Cede & Co. is the
registered Holder of the number of Corporate Units set forth above. Each
Corporate Unit represents (i) either (a) beneficial ownership by the Holder of
$25 principal amount of 6.00% Senior Notes due August 17, 2006 (the "Note")of
Sprint Capital Corporation, a Delaware corporation, subject to the Pledge of
such Note by such Holder pursuant to the Pledge Agreement or (b) upon the
occurrence of a Tax Event Redemption prior to August 17, 2004 or any earlier
Successful Remarketing, the appropriate Applicable Ownership Interest of the
Treasury Portfolio, subject to the Pledge of such Applicable Ownership Interest
of the Treasury Portfolio by such Holder pursuant to the Pledge Agreement, and
(ii) the rights and obligations of the Holder under one Purchase Contract with
Sprint Corporation, a Kansas corporation (the "Company," which term, as used
herein, includes its successors pursuant to the Purchase Contract Agreement).
All capitalized terms used herein which
2
are defined in the Purchase Contract Agreement have the meaning set forth
therein.
Pursuant to the Pledge Agreement, the Notes or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
constituting part of each Corporate Unit evidenced hereby have been pledged to
the Collateral Agent, for the benefit of the Company, to secure the obligations
of the Holder under the Purchase Contract comprising a portion of such Corporate
Unit.
The Pledge Agreement provides that all payments of principal on the
Pledged Notes (as defined in the Pledge Agreement) 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 interest payments on any
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, constituting part of the Corporate Units received by the Collateral
Agent 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 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, or (B)
any payments of principal 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, 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 the Pledge Agreement to the
Agent to the account designated by the Agent, 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 if on any date on which Contract Adjustment Payments are to be
made on the Purchase Contracts is not a Business Day, then payment of the
Contract Adjustment Payments payable on that date will be made on the next
succeeding day which is a Business Day, and no interest or payment will be paid
in respect of the delay) and (ii) in the case of payments of principal on any
pledged Notes or the appropriate Applicable Ownership Interest (as specified in
clause (i) of the definition of such term) of the Treasury Portfolio that has
not been released from the Pledge pursuant to the Pledge Agreement, as the case
may be, to the Company on the Purchase Contract Settlement Date (as defined
herein) in accordance with the terms of the Pledge Agreement, in full
satisfaction of the respective obligations of the Holders of the Corporate Units
of which such pledged Notes or the Treasury Portfolio, as the case
3
may be, are a part under the Purchase Contracts forming a part of such Corporate
Units. Payments on any Notes or distributions 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, forming part of a Corporate Unit
evidenced hereby which are payable quarterly in arrears on February 17, May 17,
August 17 and November 17 (a "Payment Date"), each year, commencing November 17,
2001, shall, subject to receipt thereof by the Agent from the Collateral Agent,
be paid to the Person in whose name this Corporate Units Certificate (or a
Predecessor Corporate Units Certificate) is registered at the close of business
on the Record Date for such Payment Date.
Each Purchase Contract evidenced hereby obligates the Holder of this
Corporate Units Certificate to purchase, and the Company to sell, on August 17,
2004 (the "Purchase Contract Settlement Date"), at a price equal to $25.00 (the
"Stated Amount"), a number of shares of PCS Common Stock, Series 1, $1.00 par
value per share ("PCS Common Stock"), of the Company equal to the Settlement
Rate, unless on or prior to the Purchase Contract Settlement Date there shall
have occurred a Termination Event or an Early Settlement with respect to the
Corporate Units of which such Purchase Contract is a part, all as provided in
the Purchase Contract Agreement and more fully described on the reverse hereof.
The purchase price (the "Purchase Price") for the shares of PCS Common Stock
purchased pursuant to each Purchase Contract evidenced hereby, if not paid
earlier, shall be paid on the Purchase Contract Settlement Date by application
of payment received in respect of the 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, pledged to secure the obligations
under such Purchase Contract of the Holder of the Corporate Units of which such
Purchase Contract is a part.
Payments on the Notes or distributions 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, will be payable at the Corporate
Trust Office of the Agent and at the New York Office or, at the option of the
Company, by check mailed to the address of the Person entitled thereto as such
address appears on the Corporate Units Register.
The Company shall pay on each Payment Date in respect of each Purchase
Contract forming part of a Corporate Unit evidenced hereby an amount (the
"Contract
4
Adjustment Payments") equal to 1.125% per year of the Stated Amount, computed on
the basis of a 360-day year of 12 30 day months, subject to deferral at the
option of the Company as provided in the Purchase Contract Agreement and more
fully described on the reverse hereof. Such Contract Adjustment Payments shall
be payable to the Person in whose name this Corporate Units Certificate (or a
Predecessor Corporate Units Certificate) is registered at the close of business
on the Record Date for such Payment Date.
Contract Adjustment Payments will be payable at the Corporate Trust
Office of the Agent and at the New York Office or, at the option of the Company,
by check mailed to the address of the Person entitled thereto as such address
appears on the Corporate Units Register.
Reference is hereby made to the further provisions set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Agent by manual signature, this Corporate Units Certificate shall not be
entitled to any benefit under the Pledge Agreement or the Purchase Contract
Agreement or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
SPRINT CORPORATION,
By:__________________________
Name:
Title:
By:__________________________
Name:
Title:
5
HOLDER SPECIFIED ABOVE (as to obligations of such Holder under the Purchase
Contracts evidenced hereby)
By: BANK ONE, NATIONAL
ASSOCIATION, not individually
but solely as attorney-in-fact
of such Holder
By:___________________________
Name:
Title:
Dated:
6
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Corporate Units Certificates referred to in the within
mentioned Purchase Contract Agreement.
By: BANK ONE, NATIONAL
ASSOCIATION, as Purchase
Contract Agent
By:
_____________________________________
Authorized Signatory
Dated:
7
(Form of Reverse of Corporate Units Certificate)
Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of August 10, 2001 (as may be supplemented from
time to time, the "Purchase Contract Agreement"), between the Company and Bank
One, National Association, as Purchase Contract Agent (including its successors
thereunder, herein called the "Agent"), to which Purchase Contract Agreement and
supplemental agreements thereto reference is hereby made for a description of
the respective rights, limitations of rights, obligations, duties and immunities
thereunder of the Agent, the Company and the Holders and of the terms upon which
the Corporate Units Certificates are, and are to be, executed and delivered.
Each Purchase Contract evidenced hereby obligates the Holder of this
Corporate Units Certificate to purchase, and the Company to sell, on the
Purchase Contract Settlement Date at a price equal to the Purchase Price, a
number of shares of PCS Common Stock equal to the Settlement Rate, unless, on or
prior to the Purchase Contract Settlement Date, there shall have occurred a
Termination Event or an Early Settlement with respect to the Security of which
such Purchase Contract is a part. The "Settlement Rate" is equal to (a) if the
Applicable Market Value (as defined below) is equal to or greater than $29.89
(the "Threshold Appreciation Price"), .8364 shares of PCS Common Stock per
Purchase Contract, (b) if the Applicable Market Value is less than the Threshold
Appreciation Price but is greater than $24.50, the number of shares of PCS
Common Stock per Purchase Contract equal to the Stated Amount divided by the
Applicable Market Value and (c) if the Applicable Market Amount is less than or
equal to $24.50, 1.0204 shares of PCS Common Stock per Purchase Contract, in
each case subject to adjustment as provided in the Purchase Contract Agreement.
No fractional shares of PCS Common Stock will be issued upon settlement of
Purchase Contracts, as provided in the Purchase Contract Agreement.
Each Purchase Contract evidenced hereby which is settled either
through Early Settlement or Cash Settlement shall obligate the Holder of the
related Corporate Units to purchase at the Purchase Price, and the Company to
sell, a number of shares of PCS Common Stock equal to the Early Settlement Rate
or the Settlement Rate, as applicable.
The "Applicable Market Value" means the average of the Closing Price
per share of PCS Common Stock on each of the 20 consecutive Trading Days ending
on the third Trading Day immediately preceding the Purchase Contract Settlement
8
Date or, for purposes of determining cash payable in lieu of fractional shares
in connection with an Early Settlement, the third Trading Day immediately
preceding the relevant Early Settlement Date.
The "Closing Price" of the PCS Common Stock on any date of
determination means the closing sale price (or, if no closing price is reported,
the last reported sale price) of the PCS Common Stock on the NYSE on such date
or, if the PCS Common Stock is not listed for trading on the NYSE on any such
date, as reported in the composite transactions for the principal United States
national or regional securities exchange on which the PCS Common Stock is so
listed, or if the PCS Common Stock is not so listed on a United States national
or regional securities exchange, as reported by the Nasdaq National Market, or,
if the PCS Common Stock is not so reported, the last quoted bid price for the
PCS Common Stock in the over-the-counter market as reported by the National
Quotation Bureau or similar organization, or, if such bid price is not
available, the market value of the PCS Common Stock on such date as determined
by a nationally recognized independent investment banking firm retained for this
purpose by the Company.
A "Trading Day" means a day on which the PCS Common Stock (a) is not
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (b) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the PCS Common Stock.
In accordance with the terms of the Purchase Contract Agreement, the
Holder of this Corporate Units Certificate shall pay the Purchase Price for the
shares of PCS Common Stock purchased pursuant to each Purchase Contract
evidenced hereby by effecting a Cash Settlement or an Early Settlement or from
the Proceeds of a remarketing of the related Pledged Notes of such holders.
Unless a Tax Event Redemption, Termination Event or a Successful Remarketing has
occurred, a Holder of Corporate Units who does not elect to make an effective
(a) Cash Settlement on or prior to 5:00 p.m. New York City time on the fifth
Business Day immediately preceding the Purchase Contract Settlement Date, or (b)
Early Settlement on or prior to 5:00 p.m. New York City time on the fifth
Business Day immediately preceding the Purchase Contract Settlement Date, shall
pay the Purchase Price for the shares of PCS Common Stock to be issued (or
otherwise delivered) under the related Purchase Contract from the Proceeds of
the sale of the related pledged Notes held by the Collateral Agent.
9
Unless a Tax Event Redemption, Termination Event or a Successful Remarketing has
occurred, such sale will be made by the Remarketing Agent pursuant to the terms
of the Supplemental Remarketing Agreement and the Remarketing Agreement on the
third Business Day immediately preceding the Purchase Contract Settlement Date.
If a Tax Event Redemption or an earlier Successful Remarketing has occurred, a
Holder of Corporate Units who does not elect to make an effective Early
Settlement on or prior to 5:00 p.m. New York City time on the second Business
Day immediately preceding the Purchase Contract Settlement Date shall pay the
Purchase Price with the Proceeds at maturity of the Applicable Ownership
Interest (as specified in clause (i) of the definition of such term) of the
Treasury Portfolio.
The Company shall not be obligated to issue (or otherwise deliver) any
shares of PCS Common Stock in respect of a Purchase Contract or deliver any
certificates therefor to the Holder unless it shall have received payment in
full of the aggregate Purchase Price for the shares of PCS Common Stock to be
purchased thereunder in the manner herein set forth.
Under the terms of the Pledge Agreement, the Agent will be entitled to
exercise the voting and any other consensual rights pertaining to the Pledged
Notes. Upon receipt of notice of any meeting at which holders of Notes are
entitled to vote or upon the solicitation of consents, waivers or proxies of
holders of Notes, the Agent shall, as soon as practicable thereafter, mail to
the Corporate Units holders a notice (a) containing such information as is
contained in the notice or solicitation, (b) stating that each Corporate Units
holder on the record date set by the Agent therefor (which, to the extent
possible, shall be the same date as the record date for determining the holders
of Notes entitled to vote) shall be entitled to instruct the Agent as to the
exercise of the voting rights pertaining to the Notes constituting a part of
such holder's Corporate Units and (c) stating the manner in which such
instructions may be given. Upon the written request of the Corporate Units
Holders on such record date, the Agent shall endeavor insofar as practicable to
vote or cause to be voted, in accordance with the instructions set forth in such
requests, the maximum number of Notes as to which any particular voting
instructions are received. In the absence of specific instructions from the
Holder of a Corporate Unit, the Agent shall abstain from voting the Notes
evidenced by such Corporate Units.
Upon the occurrence of a Tax Event Redemption prior to August 17, 2004
or any earlier Successful
10
Remarketing, pursuant to the terms of the Pledge Agreement, the Collateral Agent
will apply, out of the aggregate Redemption Price for the Notes that are
components of Corporate Units, an amount equal to the aggregate Redemption
Amount for the Notes that are components of Corporate Units to purchase on
behalf of the Holders of Corporate Units, the Treasury Portfolio and, promptly
remit the remaining portion of such Redemption Price to the Agent for payment to
the Holders of such Corporate Units.
Upon the occurrence of a Successful Initial Remarketing or Successful
Subsequent Remarketing, pursuant to the terms of the Remarketing Agreement, the
Remarketing Agent will apply an amount equal to the Treasury Portfolio Purchase
Price to purchase on behalf of the Holders of Corporate Units, the Treasury
Portfolio, and, after deducting the Remarketing Fee to the extent permitted
under the terms of the Remarketing Agreement, promptly remit the remaining
portion of such Proceeds of the Successful Remarketing to the Agent for payment
to the Holders of such Corporate Units.
Following the occurrence of a Tax Event Redemption prior to the
Purchase Contract Settlement Date or an earlier Successful Remarketing, the
Holders of Corporate Units and the Collateral Agent shall have such security
interests rights and obligations with respect to the Treasury Portfolio as the
Holder of Corporate Units and the Collateral Agent had in respect of the Notes,
as the case may be, subject to the Pledge thereof as provided in the Pledge
Agreement and any reference herein to the Note shall be deemed to be a reference
to such Treasury Portfolio and any reference herein or in the Certificates to
interest on the Notes shall be deemed to be a reference to corresponding
distributions on the Treasury Portfolio.
The Corporate Units Certificates are issuable only in registered form
and only in denominations of a single Corporate Unit and any integral multiple
thereof. The transfer of any Corporate Units Certificate will be registered and
Corporate Units Certificates may be exchanged as provided in the Purchase
Contract Agreement. The Corporate Units Registrar may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents
permitted by the Purchase Contract Agreement. No service charge shall be
required for any such registration of transfer or exchange, but the Company and
the Agent may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. A Holder who elects to
substitute Treasury Securities for Notes or the appropriate Applicable Ownership
Interest of
11
the Treasury Portfolio, thereby creating Treasury Units, shall be responsible
for any fees or expenses payable in connection therewith. Except as provided in
the Purchase Contract Agreement, for so long as the Purchase Contract underlying
a Corporate Unit remains in effect, such Corporate Units shall not be separable
into its constituent parts, and the rights and obligations of the Holder of such
Corporate Units in respect of Notes or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, and the Purchase
Contract constituting such Corporate Units may be transferred and exchanged only
as a Corporate Unit. A Holder of a Corporate Unit may create a Treasury Unit by
delivering to the Collateral Agent Treasury Securities in an aggregate principal
amount equal to the aggregate principal amount of the 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, in
exchange for the release of such pledged Notes or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, in accordance
with the terms of the Purchase Contract Agreement and the Pledge Agreement. From
and after such Collateral Substitution, the Security for which such Pledged
Treasury Securities secures the Holder's obligation under the Purchase Contract
shall be referred to as a "Treasury Unit." A Holder may make such Collateral
Substitution only in integral multiples of 40 Corporate Units for 40 Treasury
Units; provided, however, that if a Tax Event Redemption or an earlier
Successful Remarketing has occurred and the Treasury Portfolio has become a
component of the Corporate Units, a Holder may make such Collateral
Substitutions only in integral multiples of 8,000 Corporate Units for 8,000
Treasury Units. Such Collateral Substitution may cause the equivalent aggregate
Stated Amount of this Certificate to be increased or decreased; provided,
however, the equivalent aggregate Stated Amount outstanding under this Corporate
Units Certificate shall not exceed $1,725,000,000. All such adjustments to the
equivalent aggregate Stated Amount of this Corporate Units Certificate shall be
duly recorded by placing an appropriate notation on the Schedule attached
hereto.
A Holder of Treasury Units may recreate Corporate Units by delivering
to the Collateral Agent Notes or the appropriate Applicable Ownership Interest
of the Treasury Portfolio, with an aggregate principal amount, in the case of
such Notes, or with the appropriate Applicable Ownership Interest (as specified
in clause (i) of the definition of such term) of the Treasury Portfolio, in the
case of such appropriate Applicable Ownership Interest of the Treasury
Portfolio, equal to the aggregate principal amount of the
12
Pledged Treasury Securities in exchange for the release of such Pledged Treasury
Securities in accordance with the terms of the Purchase Contract Agreement and
the Pledge Agreement. Any such recreation of a Corporate Unit may be effected
only in multiples of 40 Treasury Units for 40 Corporate Units; provided,
however, that if a Tax Event Redemption or an earlier Successful Remarketing has
occurred and the Treasury Portfolio has become a component of the Corporate
Units, a Holder may make such substitution only in integral multiples of 8,000
Treasury Units for 8,000 Corporate Units.
Subject to the next succeeding paragraph, the Company shall pay, on
each Payment Date, the Contract Adjustment Payments, payable in respect of each
Purchase Contract to the Person in whose name the Corporate Units Certificate
evidencing such Purchase Contract is registered at the close of business on the
Record Date for such Payment Date.
The Company shall have the right, at any time prior to the Purchase
Contract Settlement Date, to defer the payment of any or all of the Contract
Adjustment Payments otherwise payable on any Payment Date, but only if the
Company shall give the Holders and the Agent written notice of its election to
defer Contract Adjustment Payments as provided in the Purchase Contract
Agreement. Any Contract Adjustment Payments so deferred shall, to the extent
permitted by law, bear additional Contract Adjustment Payments thereon at the
rate of 7.125% per year (computed on the basis of a 360-day year of 12 30 day
months), compounding on each succeeding Payment Date, until paid in full (such
deferred installments of Contract Adjustment Payments, if any, together with the
additional Contract Adjustment Payments accrued thereon, are referred to herein
as the "Deferred Contract Adjustment Payments"). Deferred Contract Adjustment
Payments, if any, shall be due on the next succeeding Payment Date except to the
extent that payment is deferred pursuant to the Purchase Contract Agreement. No
Contract Adjustment Payments may be deferred to a date that is after the
Purchase Contract Settlement Date and no such deferral period may end other than
on a Payment Date.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments on the Purchase Contracts until a Payment Date prior to the
Purchase Contract Settlement Date, then all Deferred Contract Adjustment
Payments, if any, shall be payable to the registered Holders as of the close of
business on the Record Date immediately preceding such Payment Date.
13
In the event that the Company elects to defer the payment of Contract
Adjustment Payments on the Purchase Contracts until the Purchase Contract
Settlement Date, the Holder of this Corporate Units Certificate will receive on
the Purchase Contract Settlement Date, in lieu of a cash payment, a number of
shares of PCS Common Stock (in addition to the number of shares of PCS Common
Stock equal to the Settlement Rate) equal to (i) the aggregate amount of
Deferred Contract Adjustment Payments payable to the Holder of this Corporate
Units Certificate divided by (ii) the Applicable Market Value.
In the event the Company exercises its option to defer the payment of
Contract Adjustment Payments, then, until the Deferred Contract Adjustment
Payments have been paid, the Company shall not declare or pay dividends on, make
distributions with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any series of PCS Common Stock other than
(i) purchases, redemptions or acquisitions of shares of any series of PCS Common
Stock in connection with any employment contract, benefit plan or other similar
arrangement with or for the benefit of employees, officers or directors or a
stock purchase or dividend reinvestment plan, or the satisfaction by the Company
of its obligations pursuant to any contract or security outstanding on the date
the Company exercises its rights to defer the Contract Adjustment Payments; (ii)
as a result of a reclassification of any series of PCS Common Stock or the
exchange or conversion of one series of PCS Common Stock for another series of
PCS Common Stock; (iii) the purchase of fractional interests in shares of any
series of PCS Common Stock pursuant to the conversion or exchange provisions of
any series of PCS Common Stock or the security being converted or exchanged;
(iv) dividends or distributions in any series of PCS Common Stock (or rights to
acquire capital stock) or repurchases, acquisitions or redemptions of any series
of PCS Common Stock in connection with the issuance or exchange of any series of
PCS Common Stock (or securities convertible into or exchangeable for shares of
any series of PCS Common Stock; (v) redemptions, exchanges or repurchases of any
rights outstanding under a shareholder rights plan or the declaration or payment
thereunder of a dividend or distribution of or with respect to rights in the
future; or (vi) redemptions of PCS Common Stock pursuant to Article Sixth or
Section 7.1 of the Company's articles of incorporation.
The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights and
obligations of Holders to purchase PCS Common Stock, shall immediately and
14
automatically terminate, without the necessity of any notice or action by any
Holder, the Agent or the Company, if, on or prior to the Purchase Contract
Settlement Date, a Termination Event shall have occurred. Upon the occurrence of
a Termination Event, the Company shall promptly but in no event later than two
Business Days thereafter give written notice to the Agent, the Collateral Agent
and to the Holders, at their addresses as they appear in the Corporate Units
Register. Upon and after the occurrence of a Termination Event, the Collateral
Agent shall release the Notes or the appropriate Applicable Ownership Interest
of the Treasury Portfolio, as the case may be, from the Pledge in accordance
with the provisions of the Pledge Agreement.
Subject to and upon compliance with the provisions of the Purchase
Contract Agreement, at the option of the Holders thereof, Purchase Contracts
underlying Securities having an aggregate Stated Amount equal to $1,000 or an
integral multiple thereof may be settled early ("Early Settlement"; for purposes
hereof, the term "Early Settlement" shall include a Redemption Early Settlement)
as provided in the Purchase Contract Agreement; provided, however, that if a Tax
Event Redemption or any earlier Successful Remarketing has occurred and the
Treasury Portfolio has become a component of the Corporate Units, Holders may
early settle Corporate Units only in integral multiples of 8,000 Corporate
Units. In order to exercise the right to effect Early Settlement with respect to
any Purchase Contracts evidenced by this Corporate Units Certificate, the Holder
of this Corporate Units Certificate shall deliver this Corporate Units
Certificate to the Agent at the Corporate Trust Office or the New York Office
duly endorsed for transfer to the Company or in blank with the form of Election
to Settle Early set forth below duly completed and accompanied by payment in the
form of immediately available funds payable to the Company in an amount (the
"Early Settlement Amount") equal to the product of (i) the Stated Amount times
(ii) the number of Purchase Contracts with respect to which the Holder has
elected to effect Early Settlement. Upon Early Settlement of Purchase Contracts
by a Holder of the related Securities, the pledged Notes or the appropriate
Applicable Ownership Interest of the Treasury Portfolio underlying such
Securities shall be released from the Pledge as provided in the Pledge Agreement
and the Holder shall be entitled to receive a number of shares of PCS Common
Stock on account of each Purchase Contract forming part of a Corporate Units as
to which Early Settlement is effected equal to the Early Settlement Rate. The
Early Settlement Rate shall initially be equal to .8364 shares of PCS Common
Stock and shall be adjusted in the same manner and at the same time as the
Settlement Rate is
15
adjusted as provided in the Purchase Contract Agreement.
Upon registration of transfer of this Corporate Units Certificate, the
transferee shall be bound (without the necessity of any other action on the part
of such transferee, except as may be required by the Agent pursuant to the
Purchase Contract Agreement) under the terms of the Purchase Contract Agreement,
the Pledge Agreement and the Purchase Contracts evidenced hereby and the
transferor shall be released from the obligations under the Purchase Contract
Agreement, the Pledge Agreement and the Purchase Contracts evidenced by this
Corporate Units Certificate. The Company covenants and agrees, and the Holder,
by its acceptance hereof, likewise covenants and agrees, to be bound by the
provisions of this paragraph.
The Holder of this Corporate Units Certificate, by its acceptance
hereof, authorizes the Agent to enter into and perform the related Purchase
Contracts forming part of the Corporate Units evidenced hereby on his behalf as
his attorney-in-fact, expressly withholds any consent to the assumption (i.e.,
affirmance) of the Purchase Contracts by the Company or its trustee in the event
that the Company becomes the subject of a case under the Bankruptcy Code, agrees
to be bound by the terms and provisions thereof, covenants and agrees to perform
its obligations under such Purchase Contracts, consents to the provisions of the
Purchase Contract Agreement, authorizes the Agent to enter into and perform the
Pledge Agreement on its behalf as its attorney-in-fact, and consents to the
Pledge of the Notes or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, underlying this Corporate Units
Certificate pursuant to the Pledge Agreement. The Holder further covenants and
agrees, that, to the extent and in the manner provided in the Purchase Contract
Agreement and the Pledge Agreement, but subject to the terms thereof, Proceeds
of the pledged Notes or the appropriate Applicable Ownership Interest (as
specified in clause (i) of the definition of such term) of the Treasury
Portfolio on the Purchase Contract Settlement Date shall be paid by the
Collateral Agent to the Company in satisfaction of such Holder's obligations
under such Purchase Contract and such Holder shall acquire no right, title or
interest in such Proceeds.
Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of a majority of the
Purchase Contracts.
The Purchase Contracts shall for all purposes be
16
governed by, and construed in accordance with, the laws of the State of New
York, without regard to principles of conflicts of laws.
The Company, the Agent and its Affiliates and any agent of the Company
or the Agent may treat the Person in whose name this Corporate Units Certificate
is registered as the owner of the Corporate Units evidenced hereby for the
purpose of receiving payments of interest payable quarterly on the Notes or on
the maturing quarterly interest strips of the Treasury Portfolio, as applicable,
performance of the Purchase Contracts and for all other purposes whatsoever,
whether or not any payments in respect thereof be overdue and notwithstanding
any notice to the contrary, and neither the Company, the Agent nor any such
agent shall be affected by notice to the contrary.
The Purchase Contracts shall not, prior to the settlement thereof,
entitle the Holder to any of the rights of a holder of shares of PCS Common
Stock.
A copy of the Purchase Contract Agreement is available for inspection
at the offices of the Agent.
17
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM as tenants in common
UNIF GIFT MIN ACT ____________Custodian____________
(cust) (minor)
Under Uniform Gifts to Minors Act
___________________________________
(State)
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not as tenants in
common Additional abbreviations may also be used though not in the above list.
___________________________________
FOR VALUE RECEIVED, the undersigned hereby sell(s),
assign(s) and transfer(s) unto______________________
____________________________________________________________________
(Please insert Social Security or Taxpayer I.D. or other Identifying Number of
Assignee)___________________ (Please Print or Type Name and Address Including
Postal Zip Code of Assignee) the within Treasury Units Certificates and all
rights thereunder, hereby irrevocably constituting and appointing
______________________________________________ attorney to transfer
said Treasury Units Certificates on the books of Sprint Corporation with full
power of substitution in the premises.
Dated: _________________
________________________________
Signature
NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Treasury Units Certificates in every
particular, without alteration or enlargement or any change whatsoever.
18
Signature Guarantee:_____________________________________
Signatures must be
guaranteed by an "eligible guarantor institution" meeting the requirements of
the Registrar, which requirements include membership or participation in the
Security Transfer Agent Medallion Program ("STAMP") or such other "signature
guarantee program" as may be determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities Exchange Act of
1934, as amended.
19
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of PCS Common
Stock deliverable upon settlement on or after the Purchase Contract Settlement
Date of the Purchase Contracts underlying the number of Corporate Units
evidenced by this Corporate Units Certificate be registered in the name of, and
delivered, together with a check in payment for any fractional share, to the
undersigned at the address indicated below unless a different name and address
have been indicated below. If shares are to be registered in the name of a
Person other than the undersigned, the undersigned will pay any transfer tax
payable incident thereto.
Dated: _______________________
Signature ____________________
Signature Guarantee: ___________________
(if assigned to another person) Signatures must be guaranteed by an
"eligible guarantor institution" meeting the requirements of the Registrar,
which requirements include membership or participation in the Security Transfer
Agent Medallion Program ("STAMP") or such other "signature guarantee program" as
may be determined by the Registrar in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.
If shares are to be registered in the name of and delivered to a Person
other than the Holder, please (i) print such Person's name and address
REGISTERED HOLDER and (ii) provide a guarantee of your signature: Please print
name and address of Registered Holder:
Name
_____________________________
_____________________________
Address
_____________________________
_____________________________
_____________________________
_____________________________
REGISTERED HOLDER
20
_____________________________
Social Security or other
Taxpayer Identification
Number, if any
Please print name and address of Registered Holder:
Name
__________________________
__________________________
Address
__________________________
__________________________
__________________________
21
ELECTION TO SETTLE EARLY
The undersigned Holder of this Corporate Units Certificate hereby
irrevocably exercises the option to effect Early Settlement in accordance with
the terms of the Purchase Contract Agreement with respect to the Purchase
Contracts underlying the number of Corporate Units evidenced by this Corporate
Units Certificate specified below. The option to effect Early Settlement may be
exercised only with respect to Purchase Contracts underlying Corporate Units
with an aggregate Stated Amount equal to $1,000 or an integral multiple thereof;
provided, however, that if a Tax Event Redemption or an earlier Successful
Remarketing has occurred and the Treasury Portfolio has become a component of
the Corporate Units, Holders may early settle Corporate Units only in integral
multiples of 8,000 Corporate Units. The undersigned Holder directs that a
certificate for shares of PCS Common Stock deliverable upon such Early
Settlement be registered in the name of, and delivered, together with a check in
payment for any fractional share and any Corporate Units Certificate
representing any Corporate Units evidenced hereby as to which Early Settlement
of the related Purchase Contracts is not effected, to the undersigned at the
address indicated below unless a different name and address have been indicated
below. Pledged Notes or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, deliverable upon such Early Settlement
will be transferred in accordance with the transfer instructions set forth
below. If shares are to be registered in the name of a Person other than the
undersigned, the undersigned will pay any transfer tax payable incident thereto.
Dated:______________________________
_______________________________________
Signature
Signature Guarantee (if assigned to another person):
_______________________________________
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
22
Number of Securities evidenced hereby as to which Early Settlement of the
related Purchase Contracts is being elected:
If shares of PCS Common Stock or Corporate Units Certificates are to be
registered in the name of and delivered to and pledged Notes, or an Applicable
Ownership Interest in the Treasury Portfolio, as the case may be, are to be
transferred to a Person other than the Holder, please (i) print such Person's
name and address and (ii) provide a guarantee of your signature:
Name
____________________________
____________________________
Address
____________________________
____________________________
____________________________
Name
____________________________
____________________________
Address
____________________________
____________________________
____________________________
REGISTERED HOLDER
Please print name and address of Registered Holder:
Name
____________________________
____________________________
Address
____________________________
____________________________
____________________________
Social Security or other
Taxpayer Identification
Number, if any ___________
23
Transfer Instructions for pledged Notes, or the Applicable Ownership Interest in
the Treasury Portfolio, as the case may be, Transferable Upon Early Settlement
or a Termination Event:
______________________________________________________________________
______________________________________________________________________
24
[TO BE ATTACHED TO GLOBAL CERTIFICATES] SCHEDULE OF INCREASES OR DECREASES
IN GLOBAL CERTIFICATE
The following increases or decreases in this Global Certificate have been
made:
Signature of
Stated Amount authorized
Amount of Amount of of this Global signatory of
decrease in increase in Certificate Purchase
Stated Amount Stated Amount following such Contract Agent
of the Global of the Global decrease or or Securities
Date Certificate Certificate increase Custodian
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
EXHIBIT B
(Form of Face of Treasury Units Certificate)
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED IN THE
NAME OF THE CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE
EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF
THIS CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY
PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO., OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC, (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
No. _____
CUSIP NO. 825 061 60 5 Number of Treasury Units
7.125 % Treasury Units
This Treasury Units Certificate certifies that Cede & Co. is the
registered Holder of the number of Treasury Units set forth above. Each Treasury
Units represents (i) a 1/40, or 2.5%, undivided beneficial ownership interest in
a Treasury Security having a principal amount at maturity equal to $1,000,
subject to the Pledge of such Treasury Security by such Holder pursuant to the
Pledge Agreement, and (ii) the rights and obligations of the Holder under one
Purchase Contract with Sprint Corporation, a Kansas corporation (the "Company,"
which term, as used herein, includes its successors pursuant to the Purchase
Contract Agreement). All capitalized terms used herein which are defined in the
Purchase Contract Agreement have the meaning set forth therein.
Pursuant to the Pledge Agreement, the Treasury Securities constituting
part of each Treasury Units evidenced hereby have been pledged to the Collateral
Agent, for the benefit of the Company, to secure the obligations of
2
the Holder under the Purchase Contract comprising a portion of such Treasury
Units.
The Pledge Agreement provides that all payments of the principal of
any Treasury Securities received by the Collateral Agent shall be paid by the
Collateral Agent by wire transfer of same day funds (i) in the case of any
principal payments with respect to any Treasury Securities that have been
released from the Pledge pursuant to the Pledge Agreement, to the Holders of the
applicable Treasury Units to the accounts designated by them 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 (ii) in the case of the principal of any Pledged
Treasury Securities, to the Company on the Purchase Contract Settlement Date (as
defined herein) in accordance with the terms of the Pledge Agreement, in full
satisfaction of the respective obligations of the Holders of the Treasury Units
of which such Pledged Treasury Securities are a part under the Purchase
Contracts forming a part of such Treasury Units.
Each Purchase Contract evidenced hereby obligates the Holder of this
Treasury Units Certificate to purchase, and the Company to sell, on August 17,
2004 (the "Purchase Contract Settlement Date"), at a price equal to $25.00 (the
"Stated Amount"), a number of shares of PCS Common Stock, Series 1, $1.00 par
value per share ("PCS Common Stock"), of the Company equal to the Settlement
Rate, unless on or prior to the Purchase Contract Settlement Date there shall
have occurred a Termination Event or an Early Settlement with respect to the
Treasury Units of which such Purchase Contract is a part, all as provided in the
Purchase Contract Agreement and more fully described on the reverse hereof. The
purchase price (the "Purchase Price") for the shares of PCS Common Stock
purchased pursuant to each Purchase Contract evidenced hereby, if not paid
earlier, shall be paid on the Purchase Contract Settlement Date by application
of the Proceeds from the Treasury Securities pledged to secure the obligations
under such Purchase Contract in accordance with the terms of the Pledge
Agreement.
3
The Company shall pay on each Payment Date in respect of each Purchase
Contract forming part of a Treasury Unit evidenced hereby an amount (the
"Contract Adjustment Payments") equal to 1.125% per year of the Stated Amount,
computed on the basis of a 360-day year of 12 30 day months, subject to deferral
at the option of the Company as provided in the Purchase Contract Agreement and
more fully described on the reverse hereof. Such Contract Adjustment Payments
shall be payable to the Person in whose name this Treasury Units Certificate (or
a Predecessor Treasury Units Certificate) is registered at the close of business
on the Record Date for such Payment Date.
Contract Adjustment Payments will be payable at the Corporate Trust
Office of the Agent and at the New York Office or, at the option of the Company,
by check mailed to the address of the Person entitled thereto as such address
appears on the Corporate Units Register.
Reference is hereby made to the further provisions set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Agent by manual signature, this Treasury Units Certificate shall not be
entitled to any benefit under the Pledge Agreement or the Purchase Contract
Agreement or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
SPRINT CORPORATION,
By:___________________________
Name:
Title:
By:___________________________
Name:
Title:
4
HOLDER SPECIFIED ABOVE (as to obligations of such Holder under the Purchase
Contracts)
By: BANK ONE NATIONAL
ASSOCIATION, not individually
but solely as attorney-in-fact
of such Holder
By:___________________________
Name:
Title:
Dated:
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Treasury Units referred to in the within-mentioned
Purchase Contract Agreement.
By: BANK ONE, NATIONAL
ASSOCIATION, as Purchase
Contract Agent
By:___________________________
Authorized Signatory
5
(Form of Reverse of Treasury Units Certificate)
Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of August 10, 2001 (as may be supplemented from
time to time, the "Purchase Contract Agreement"), between the Company and Bank
One, National Association, as Purchase Contract Agent (including its successors
thereunder, herein called the "Agent"), to which the Purchase Contract Agreement
and supplemental agreements thereto reference is hereby made for a description
of the respective rights, limitations of rights, obligations, duties and
immunities thereunder of the Agent, the Company and the Holders and of the terms
upon which the Treasury Units Certificates are, and are to be, executed and
delivered.
Each Purchase Contract evidenced hereby obligates the Holder of this
Treasury Units Certificate to purchase, and the Company to sell, on the Purchase
Contract Settlement Date at the Purchase Price, a number of shares of PCS Common
Stock equal to the Settlement Rate, unless, on or prior to the Purchase Contract
Settlement Date, there shall have occurred a Termination Event or an Early
Settlement with respect to the Security of which such Purchase Contract is a
part. The "Settlement Rate" is equal to (a) if the Applicable Market Value (as
defined below) is equal to or greater than $29.89 (the "Threshold Appreciation
Price"), .8364 shares of PCS Common Stock per Purchase Contract, (b) if the
Applicable Market Value is less than the Threshold Appreciation Price but is
greater than $24.50, the number of shares of PCS Common Stock per Purchase
Contract equal to the Stated Amount divided by the Applicable Market Value and
(c) if the Applicable Market Amount is less than or equal to $24.50, 1.0204
shares of PCS Common Stock per Purchase Contract, in each case subject to
adjustment as provided in the Purchase Contract Agreement. No fractional shares
of PCS Common Stock will be issued upon settlement of Purchase Contracts, as
provided in the Purchase Contract Agreement.
Each Purchase Contract evidenced hereby which is settled through Early
Settlement shall obligate the Holder of the related Treasury Units to purchase
at the Purchase Price, and the Company to sell, a number of shares of PCS Common
Stock equal to the Early Settlement Rate.
The "Applicable Market Value" means the average of the Closing Price
per share of PCS Common Stock on each of the 20 consecutive Trading Days ending
on the third Trading Day immediately preceding the Purchase Contract Settlement
Date or, for purposes of determining cash payable in lieu of fractional shares
in connection with an Early Xxxxxxxxxx,
0
the third Trading Day immediately preceding the relevant Early Settlement Date.
The "Closing Price" of the PCS Common Stock on any date of
determination means the closing sale price (or, if no closing price is reported,
the last reported sale price) of the PCS Common Stock on NYSE national or
regional on such date or, if the PCS Common Stock is not listed for trading on
the NYSE on any such date, as reported in the composite transactions for the
principal United States national or regional securities exchange on which the
PCS Common Stock is so listed, or if the PCS Common Stock is not so listed on a
United States national or regional securities exchange, as reported by the
Nasdaq National Market or, if the PCS Common Stock is not so reported, the last
quoted bid price for the PCS Common Stock in the over-the-counter market as
reported by the National Quotation Bureau or similar organization, or, if such
bid price is not available, the market value of the PCS Common Stock on such
date as determined by a nationally recognized independent investment banking
firm retained for this purpose by the Company.
A "Trading Day" means a day on which the PCS Common Stock (a) is not
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (b) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the PCS Common Stock.
In accordance with the terms of the Purchase Contract Agreement, the
Holder of this Treasury Units Certificate shall pay the Purchase Price for the
shares of PCS Common Stock purchased pursuant to each Purchase Contract
evidenced hereby by effecting either an Early Settlement of each such Purchase
Contract or by applying a principal amount of the Pledged Treasury Securities
underlying such Holder's Treasury Units equal to the Stated Amount to the
purchase of the PCS Common Stock. A Holder of Treasury Units who does not elect,
on or prior to 5:00 p.m. New York City time on the second Business Day
immediately preceding the Purchase Contract Settlement Date, to make an Early
Settlement, shall pay the Purchase Price for the shares of PCS Common Stock to
be issued (or otherwise delivered) on the related Purchase Contract by applying
a principal amount of the Pledged Treasury Securities as aforesaid.
The Company shall not be obligated to issue (or otherwise deliver) any
shares of PCS Common Stock in respect of a Purchase Contract or deliver any
certificates therefor
7
to the Holder unless it shall have received payment in full of the aggregate
Purchase Price for the shares of PCS Common Stock to be purchased thereunder in
the manner herein set forth.
The Treasury Units Certificates are issuable only in registered form
and only in denominations of a single Treasury Units and any integral multiple
thereof. The transfer of any Treasury Units Certificate will be registered and
Treasury Units Certificates may be exchanged as provided in the Purchase
Contract Agreement. The Treasury Units Registrar may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents
permitted by the Purchase Contract Agreement. No service charge shall be
required for any such registration of transfer or exchange, but the Company and
the Agent may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. A Holder who elects to
substitute Notes or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, for Treasury Securities, thereby
recreating Corporate Units, shall be responsible for any fees or expenses
payable in connection therewith. Except as provided in the Purchase Contract
Agreement, for so long as the Purchase Contract underlying a Treasury Units
remains in effect, such Treasury Units shall not be separable into its
constituent parts, and the rights and obligations of the Holder of such Treasury
Units in respect of the Treasury Security and the Purchase Contract constituting
such Treasury Units may be transferred and exchanged only as a Treasury Units. A
Holder of Treasury Units may recreate Corporate Units by delivering to the
Collateral Agent Notes or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, with an aggregate principal amount, in the case of such
Notes, or with the appropriate Applicable Ownership Interest (as specified in
clause (i) of the definition of such term) of the Treasury Portfolio, in the
case of such appropriate Applicable Ownership Interest of the Treasury
Portfolio, equal to the aggregate principal amount of the pledged Treasury
Securities in exchange for the release of such pledged Treasury Securities in
accordance with the terms of the Purchase Contract Agreement and the Pledge
Agreement. From and after such substitution, the Security for which such pledged
Notes or appropriate Applicable Ownership Interest of the Treasury Portfolio, as
the case may be, secures the Holder's obligation under the Purchase Contract
shall be referred to as a "Corporate Units." A Holder may make such a
substitution only in integral multiples of 40 Treasury Units for 40 Corporate
Units; provided, however, that if a Tax Event Redemption or a Successful
Remarketing has occurred and the Treasury
8
Portfolio has become a component of the Corporate Units, a Holder may make such
substitution only in integral multiples of 8,000 Treasury Units for 8,000
Corporate Units. Such substitution may cause the equivalent aggregate Stated
Amount of this Certificate to be increased or decreased; provided, however, the
equivalent aggregate Stated Amount outstanding under this Treasury Units
Certificate shall not exceed $1,725,000,000. All such adjustments to the
equivalent aggregate Stated Amount of this Treasury Units Certificate shall be
duly recorded by placing an appropriate notation on the Schedule attached
hereto.
A Holder of a Corporate Unit may create a Treasury Unit by delivering
to the Collateral Agent Treasury Securities in an aggregate principal amount of
the 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, in exchange for the release of such pledged Notes or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, in accordance with the terms of the Purchase Contract Agreement and the
Pledge Agreement. Any such creation of a Treasury Units may be effected only in
multiples of 40 Corporate Units for 40 Treasury Units; provided, however, if a
Tax Event Redemption or an earlier Successful Remarketing has occurred and the
Treasury Portfolio has become a component of the Corporate Unit, a Holder may
make such Collateral Substitution only in integral multiples of 8,000 Corporate
Units for 8,000 Treasury Units.
Subject to the next succeeding paragraph, the Company shall pay, on
each Payment Date, the Contract Adjustment Payments, payable in respect of each
Purchase Contract to the Person in whose name the Treasury Units Certificate
evidencing such Purchase Contract is registered at the close of business on the
Record Date for such Payment Date.
The Company shall have the right, at any time prior to the Purchase
Contract Settlement Date, to defer the payment of any or all of the Contract
Adjustment Payments otherwise payable on any Payment Date, but only if the
Company shall give the Holders and the Agent written notice of its election to
defer Contract Adjustment Payments as provided in the Purchase Contract
Agreement. Any Contract Adjustment Payments so deferred shall, to the extent
permitted by law, bear additional Contract Adjustment Payments thereon at the
rate of 7.125% per year (computed on the basis of a 360-day year of 12 30 day
months), compounding on each succeeding Payment Date, until paid in
9
full (such deferred installments of Contract Adjustment Payments, if any,
together with the additional Contract Adjustment Payments accrued thereon, are
referred to herein as the "Deferred Contract Adjustment Payments"). Deferred
Contract Adjustment Payments, if any, shall be due on the next succeeding
Payment Date except to the extent that payment is deferred pursuant to the
Purchase Contract Agreement. No Contract Adjustment Payments may be deferred to
a date that is after the Purchase Contract Settlement Date and no such deferral
period may end other than on a Payment Date.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments on the Purchase Contracts until a Payment Date prior to the
Purchase Contract Settlement Date, then all Deferred Contract Adjustment
Payments, if any, shall be payable to the registered Holders as of the close of
business on the Record Date immediately preceding such Payment Date.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments on the Purchase Contracts until the Purchase Contract
Settlement Date, the Holder of this Treasury Units Certificate will receive on
the Purchase Contract Settlement Date, in lieu of a cash payment, a number of
shares of PCS Common Stock (in addition to the number of shares of PCS Common
Stock equal to the Settlement Rate) equal to (i) the aggregate amount of
Deferred Contract Adjustment Payments payable to the Holder of this Treasury
Units Certificate divided by (ii) the Applicable Market Value.
In the event the Company exercises its option to defer the payment of
Contract Adjustment Payments, then, until the Deferred Contract Adjustment
Payments have been paid, the Company shall not declare or pay dividends on, make
distributions with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any series of PCS Common Stock other than
(i) purchases, redemptions or acquisitions of shares of any series of PCS Common
Stock in connection with any employment contract, benefit plan or other similar
arrangement with or for the benefit of employees, officers or directors or a
stock purchase or dividend reinvestment plan, or the satisfaction by the Company
of its obligations pursuant to any contract or security outstanding on the date
the Company exercises its rights to defer the Contract Adjustment Payments; (ii)
as a result of a reclassification of any series of PCS Common Stock or the
exchange or conversion of one series of PCS Common Stock for another series of
PCS Common Stock; (iii) the purchase of fractional interests in shares of any
10
series of PCS Common Stock pursuant to the conversion or exchange provisions of
any series of PCS Common Stock or the security being converted or exchanged;
(iv) dividends or distributions in any series of PCS Common Stock (or rights to
acquire capital stock) or repurchases, acquisitions or redemptions of any series
of PCS Common Stock in connection with the issuance or exchange of any series of
PCS Common Stock (or securities convertible into or exchangeable for shares of
any series of PCS Common Stock; (v) redemptions, exchanges or repurchases of any
rights outstanding under a shareholder rights plan or the declaration or payment
thereunder of a dividend or distribution of or with respect to rights in the
future; or (vi) redemptions of PCS Common Stock pursuant to Article Sixth or
Section 7.1 of the Company's articles of incorporation.
The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights and
obligations of Holders to purchase PCS Common Stock shall immediately and
automatically terminate, without the necessity of any notice or action by any
Holder, the Agent or the Company, if, on or prior to the Purchase Contract
Settlement Date, a Termination Event shall have occurred. Upon the occurrence of
a Termination Event, the Company shall promptly but in no event later than two
Business Days thereafter give written notice to the Agent, the Collateral Agent
and to the Holders, at their addresses as they appear in the Treasury Units
Register. Upon and after the occurrence of a Termination Event, the Collateral
Agent shall release the Treasury Securities from the Pledge in accordance with
the provisions of the Pledge Agreement.
Subject to and upon compliance with the provisions of the Purchase
Contract Agreement, at the option of the Holders thereof, Purchase Contracts
underlying Securities having an aggregate Stated Amount equal to $1,000 or an
integral multiple thereof may be settled early ("Early Settlement"; for purposes
hereof, the term "Early Settlement" shall include a Redemption Early Settlement)
as provided in the Purchase Contract Agreement. In order to exercise the right
to effect Early Settlement with respect to any Purchase Contracts evidenced by
this Treasury Units Certificate, the Holder of this Treasury Units Certificate
shall deliver this Treasury Units Certificate to the Agent at the Corporate
Trust Office or the New York Office duly endorsed for transfer to the Company or
in blank with the form of Election to Settle Early set forth below duly
completed and accompanied by payment in the form of immediately available funds
payable to the Company in an amount (the "Early Settlement Amount") equal to the
product
11
of (i) the Stated Amount times (ii) the number of Purchase Contracts with
respect to which the Holder has elected to effect Early Settlement. Upon Early
Settlement of Purchase Contracts by a Holder of the related Securities, the
Pledged Treasury Securities underlying such Securities shall be released from
the Pledge as provided in the Pledge Agreement and the Holder shall be entitled
to receive a number of shares of PCS Common Stock on account of each Purchase
Contract forming part of a Treasury Units as to which Early Settlement is
effected equal to the Early Settlement Rate. The Early Settlement Rate shall
initially be equal to .8364 shares of PCS Common Stock and shall be adjusted in
the same manner and at the same time as the Settlement Rate is adjusted as
provided in the Purchase Contract Agreement.
Upon registration of transfer of this Treasury Units Certificate, the
transferee shall be bound (without the necessity of any other action on the part
of such transferee, except as may be required by the Agent pursuant to the
Purchase Contract Agreement) under the terms of the Purchase Contract Agreement,
the Pledge Agreement and the Purchase Contracts evidenced hereby and the
transferor shall be released from the obligations under the Purchase Contract
Agreement, the Pledge Agreement and the Purchase Contracts evidenced by this
Treasury Units Certificate. The Company covenants and agrees, and the Holder, by
his acceptance hereof, likewise covenants and agrees, to be bound by the
provisions of this paragraph.
The Holder of this Treasury Units Certificate, by its acceptance
hereof, authorizes the Agent to enter into and perform the related Purchase
Contracts forming part of the Treasury Units evidenced hereby on his behalf as
its attorney-in-fact, expressly withholds any consent to the assumption (i.e.,
affirmance) of the Purchase Contracts by the Company or its trustee in the event
that the Company becomes the subject of a case under the Bankruptcy Code, agrees
to be bound by the terms and provisions thereof, covenants and agrees to perform
its obligations under such Purchase Contracts, consents to the provisions of the
Purchase Contract Agreement, authorizes the Agent to enter into and perform the
Pledge Agreement on its behalf as its attorney-in-fact, and consents to the
Pledge of the Treasury Securities underlying this Treasury Units Certificate
pursuant to the Pledge Agreement. The Holder further covenants and agrees, that,
to the extent and in the manner provided in the Purchase Contract Agreement and
the Pledge Agreement, but subject to the terms thereof, Proceeds of the pledged
Treasury Securities on the Purchase Contract Settlement Date shall be paid by
the Collateral Agent to the Company in satisfaction of such Holder's obligations
under
12
such Purchase Contract and such Holder shall acquire no right, title or interest
in such Proceeds.
Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of a majority of the
Purchase Contracts.
The Purchase Contracts shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York, without regard
to principles of conflicts of laws.
The Company, the Agent and its Affiliates and any agent of the Company
or the Agent may treat the Person in whose name this Treasury Units Certificate
is registered as the owner of the Treasury Units evidenced hereby for the
purpose of receiving payments on the Treasury Securities and performance of the
Purchase Contracts and for all other purposes whatsoever, whether or not any
payments in respect thereof be overdue and notwithstanding any notice to the
contrary, and neither the Company, the Agent nor any such agent shall be
affected by notice to the contrary.
The Purchase Contracts shall not, prior to the settlement thereof,
entitle the Holder to any of the rights of a holder of shares of PCS Common
Stock.
A copy of the Purchase Contract Agreement is available for inspection
at the offices of the Agent.
13
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM as tenants in common
UNIF GIFT MIN ACT ____________Custodian____________
(cust) (minor)
Under Uniform Gifts to Minors Act
_________________________________
(State)
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not as tenants in
common Additional abbreviations may also be used though not in the above list.
_________________________________
FOR VALUE RECEIVED, the undersigned hereby sell(s),
assign(s) and transfer(s) unto______________________
____________________________________________________________________
(Please insert Social Security or Taxpayer I.D. or other Identifying Number of
Assignee)___________________ (Please Print or Type Name and Address Including
Postal Zip Code of Assignee) the within Treasury Units Certificates and all
rights thereunder, hereby irrevocably constituting and appointing
______________________________________________ attorney to transfer
said Treasury Units Certificates on the books of Sprint Corporation with full
power of substitution in the premises.
Dated: _________________
_______________________________
Signature
NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Treasury Units Certificates in every
particular, without alteration or enlargement or any change whatsoever.
Signature
Guarantee:_________________________________________________
14
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
15
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of PCS
Common Stock deliverable upon settlement on or after the Purchase Contract
Settlement Date of the Purchase Contracts underlying the number of Treasury
Units evidenced by this Treasury Units Certificate be registered in the name of,
and delivered, together with a check in payment for any fractional share, to the
undersigned at the address indicated below unless a different name and address
have been indicated below. If shares are to be registered in the name of a
Person other than the undersigned, the undersigned will pay any transfer tax
payable incident thereto.
Dated: __________________________________________________
Signature _______________________________________________
Signature Guarantee: ____________________________________
(if assigned to another person) _________________________
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
If shares are to be registered in the name of and delivered to a Person
other than the Holder, please (i) print such Person's name and address and (ii)
provide a guarantee of your signature:
Name
________________________________
________________________________
Address
________________________________
________________________________
________________________________
________________________________
REGISTERED HOLDER
_____________________________
Social Security or other
Taxpayer Identification
Number, if any
16
Please print name and address of Registered Holder:
Name
______________________________
______________________________
Address
______________________________
______________________________
______________________________
17
ELECTION TO SETTLE EARLY
The undersigned Holder of this Treasury Units Certificate hereby
irrevocably exercises the option to effect Early Settlement in accordance with
the terms of the Purchase Contract Agreement with respect to the Purchase
Contracts underlying the number of Treasury Units evidenced by this Treasury
Units Certificate specified below. The option to effect Early Settlement may be
exercised only with respect to Purchase Contracts underlying Treasury Units with
an aggregate Stated Amount equal to $1,000 or an integral multiple thereof. The
undersigned Holder directs that a certificate for shares of PCS Common Stock
deliverable upon such Early Settlement be registered in the name of, and
delivered, together with a check in payment for any fractional share and any
Treasury Units Certificate representing any Treasury Units evidenced hereby as
to which Early Settlement of the related Purchase Contracts is not effected, to
the undersigned at the address indicated below unless a different name and
address have been indicated below. Pledged Treasury Securities deliverable upon
such Early Settlement will be transferred in accordance with the transfer
instructions set forth below. If shares are to be registered in the name of a
Person other than the undersigned, the undersigned will pay any transfer or
similar tax payable incident thereto.
Dated:________________
_____________________________
Signature
Signature Guarantee: ____________________________________
(if assigned to another person)
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
Number of Securities evidenced hereby as to which Early Settlement of
the related Purchase Contracts is being elected:
18
If shares of PCS Common Stock or Treasury Units Certificates are to be
registered in the name of and delivered to and pledged Treasury Securities are
to be transferred to a Person other than the Holder, please (i) print such
Person's name and address and (ii) provide a guarantee of your signature:
Name
________________________________
________________________________
Address
________________________________
________________________________
________________________________
Name
________________________________
________________________________
Address
________________________________
________________________________
________________________________
________________________________
Social Security or other
Taxpayer Identification
Number, if any
Please print name and address of Registered Holder:
Name
________________________________
________________________________
Address
________________________________
________________________________
________________________________
Transfer Instructions for
pledged Treasury Securities
Upon Early Settlement or
a Termination Event:
________________________________
________________________________
________________________________
19
[TO BE ATTACHED TO GLOBAL CERTIFICATES] SCHEDULE OF INCREASES OR
DECREASES IN GLOBAL CERTIFICATE The following increases or decreases in this
Global Certificate have been made:
Signature of
Stated Amount authorized
Amount of Amount of of this Global signatory of
decrease in increase in Certificate Purchase
Stated Amount Stated Amount following such Contract Agent
of the Global of the Global decrease or or Securities
Date Certificate Certificate increase Custodian
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
EXHIBIT C
INSTRUCTION FROM PURCHASE CONTRACT AGENT TO COLLATERAL AGENT
Bank One, National Association
000 Xxxx Xxxxx Xxxxxx
Mail Code OH1-0181
Xxxxxxxx, Xxxx 00000
Attention: Global Corporate Trust Services Division
Re: Equity Units of Sprint Corporation (the "Company")
We hereby notify you in accordance with Section [4.1] [4.2] of the Pledge
Agreement, dated as of August 10, 2001, (the "Pledge Agreement") among the
Company, yourselves, as Collateral Agent, Custodial Agent and Securities
Intermediary and ourselves, as Purchase Contract Agent and as attorney-in-fact
for the holders of [Corporate Units] [Treasury Units] from time to time, that
the holder of the Securities listed below (the "Holder") has elected to
substitute [$_____ aggregate principal amount of Treasury Securities] [$_______
aggregate principal amount of Notes or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be,] in exchange for an
equal value of [Pledged Notes or the appropriate Applicable Ownership Interest
of the Treasury Portfolio, as the case may be,] [Pledged Treasury Securities]
held by you in accordance with the Pledge Agreement and has delivered to us a
notice stating that the Holder has Transferred [Treasury Securities] [Notes or
the appropriate Applicable Ownership Interest of the Treasury Portfolio, as the
case may be,] to you, as Collateral Agent. We hereby instruct you, upon receipt
of such [Pledged Treasury Securities] [Pledged Notes or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,],
and upon the payment by such Holder of any applicable fees, to release the
[Notes or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be,] [Treasury Securities] related to such [Corporate
Units] [Treasury Units] to us in accordance with the Holder's instructions.
Capitalized terms used herein but not defined shall have the meaning set forth
in the Pledge Agreement.
Date:_____________
By:______________________
Name:
Title:
Signature Guarantee:_____________
2
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 D
INSTRUCTION TO PURCHASE CONTRACT AGENT
Bank One, National Association
000 Xxxx Xxxxx Xxxxxx
Mail Code OH1-0181
Xxxxxxxx, Xxxx 00000
Attention: Global Corporate Trust Services Division
Re: Equity Units of Sprint Corporation (the "Company")
The undersigned Holder hereby notifies you that it has delivered to
Bank One, National Association, as Collateral Agent, [$_______ aggregate
principal amount of Treasury Securities] [$ aggregate principal amount of Notes
or the appropriate Applicable Ownership Interest of the Treasury Portfolio, 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 the Collateral Agent, in
accordance with Section [4.1], [4.2] of the Pledge Agreement, dated August 10,
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
Signature Guarantee: ______________
Please print name and address of Registered Holder:
__________________________ _________________________________
Name Social Security or other
Taxpayer Identification
Number, if any
2
_________________________________________________________________________
_________________________________________________________________________
Address
EXHIBIT E
NOTICE TO SETTLE BY SEPARATE CASH
Bank One, National Association
000 Xxxx Xxxxx Xxxxxx
Mail Code OH1-0181
Xxxxxxxx, Xxxx 00000
Attention: Global Corporate Trust Services Division
Re: Equity Units of Sprint Corporation (the "Company")
The undersigned Holder hereby irrevocably notifies you in accordance
with Section 5.6 of the Purchase Contract Agreement dated as of August 10, 2001
among the Company and yourselves, as Purchase Contract Agent and as
Attorney-in-Fact for the Holders of the Purchase Contracts, that such Holder has
elected to pay to the Collateral Agent, 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 cashiers check or]
wire transfer, in each case in immediately available funds), $_________ as the
Purchase Price for the shares of PCS Common Stock issuable to such Holder by the
Company under the related Purchase Contract on the Purchase Contract Settlement
Date. The undersigned Holder hereby instructs you to notify promptly the
Collateral Agent of the undersigned Holders election to make such cash
settlement with respect to the Purchase Contracts related to such Holder's
[Corporate Units] [Treasury Units].
Dated:_____________
_______________________________________
Signature
Signature Guarantee:______________
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
Please print name and address of Registered Holder:
_____________________________________________________________________
Name Social Security
or other Taxpayer
Identification Number, if any
4
__________________________
Address
__________________________
__________________________