TEXAS UTILITIES COMPANY
,
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as Collateral Agent, Custodial Agent
and Securities Intermediary
AND
,
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as Purchase Contract Agent
FORM OF PLEDGE AGREEMENT
Dated as of , 1998
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TABLE OF CONTENTS
PAGE
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RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1. Definitions . . . . . . . . . . . . . . . . . . . 2
Section 2. Pledge; Control and Perfection. . . . . . . . . . 5
Section 2.1. The Pledge . . . . . . . . . . . . . 5
Section 2.2. Control and Perfection. . . . . . . . 7
Section 3. Distributions on Pledged Collateral . . . . . . . 8
Section 4. Substitution, Release, Repledge and
Settlement of Debt Securities . . . . . . . . . . . . . 9
Section 4.1. Substitution for Debt Securities and
the Creation of Type B Securities. . . . . . . . . 9
Section 4.2. Substitution of Treasury Securities
and the Creation of Type A Securities. . . . . . . 10
Section 4.3. Termination Event . . . . . . . . . . 10
Section 4.4. Cash Settlement . . . . . . . . . . . 11
Section 4.5. Early Settlement. . . . . . . . . . . 12
Section 4.6. Application of Proceeds Settlement. . 13
Section 5. Voting Rights -- Debt Securities . . . . . . . . 14
Section 6. Rights and Remedies; Distribution of the
Debentures; Tax Event Redemption . . . . . . . . . . . . 15
Section 6.1. Rights and Remedies of the
Collateral Agent . . . . . . . . . . . . . . . . . 15
Section 6.2. Tax Event Redemption. . . . . . . . . 16
Section 7. Representations and Warranties; Covenants . . . . 16
Section 7.1. Representations and Warranties. . . . 16
Section 7.2. Covenants . . . . . . . . . . . . . . 17
Section 8. The Collateral Agent. . . . . . . . . . . . . . . 18
Section 8.1. Appointment, Powers and Immunities . 18
Section 8.2. Instructions of the Company . . . . . 19
Section 8.3. Reliance by Collateral Agent. . . . 19
Section 8.4. Rights in Other Capacities. . . . . . 19
Section 8.5. Non-Reliance on Collateral Agent . . 19
Section 8.6. Compensation and Indemnity . . . . . 20
Section 8.7. Failure to Act. . . . . . . . . . . . 20
Section 8.8. Resignation of Collateral Agent. . . 20
Section 8.9. Right to Appoint Agent or Advisor. . 21
Section 8.10. Survival. . . . . . . . . . . . . . 21
Section 8.11. Exculpation. . . . . . . . . . . . 21
Section 9. Amendment . . . . . . . . . . . . . . . . . . . . 22
Section 9.1. Amendment Without Consent of
Holders. . . . . . . . . . . . . . . . . . . . . . 22
Section 9.2. Amendment with Consent of Holders. . 22
Section 9.3. Execution of Amendments . . . . . . . 23
Section 9.4. Effect of Amendments. . . . . . . . 23
Section 9.5. Reference to Amendments. . . . . . . 23
Section 10. Miscellaneous. . . . . . . . . . . . . . . . . . 23
Section 10.1. No Waiver. . . . . . . . . . . . . 23
Section 10.2. Governing Law . . . . . . . . . . . 24
Section 10.3. Notices. . . . . . . . . . . . . . 24
Section 10.4. Successors and Assigns. . . . . . . 24
Section 10.5. Counterparts. . . . . . . . . . . . 24
Section 10.6. Severability. . . . . . . . . . . . 24
Section 10.7. Expenses, etc. . . . . . . . . . . . 25
Section 10.8. Security Interest Absolute. . . . . 25
EXHIBIT A Instruction to Collateral Agent
EXHIBIT B Instruction to Purchase Contract Agent
EXHIBIT C Instruction to Custodial Agent Regarding Remarketing
EXHIBIT D Instruction to Custodial Agent Regarding Withdrawal
From Remarketing
PLEDGE AGREEMENT
FORM OF PLEDGE AGREEMENT, dated as of , 1998
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(this "Agreement"), among Texas Utilities Company, a Texas
corporation (the "Company"), , not individually but
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solely as collateral agent (in such capacity, together with its
successors in such capacity, the "Collateral Agent") as custodial
agent (in such capacity, together with its successors in such
capacity, the "Custodial Agent") and in its capacity as a
"securities intermediary" as defined in Section 8-102(a)(14) of
the Code (as defined herein) (in such capacity, together with its
successors in such capacity, the "Securities Intermediary"), and
, not individually but solely as purchase contract
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agent and as attorney-in-fact of the Holders (as defined in the
Purchase Contract Agreement) from time to time of the Securities
(as hereinafter defined) (in such capacity, together with its
successors in such capacity, the "Purchase Contract Agent") under
the Purchase Contract Agreement (as hereinafter defined).
RECITALS
The Company and the Purchase Contract Agent are parties
to the Purchase Contract Agreement, dated as of the date hereof
(as modified and supplemented and in effect from time to time,
the "Purchase Contract Agreement"), pursuant to which there may
be issued up to New Securities of the Company, having
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a stated amount of $10 (the "Stated Amount") per New Security.
The New Securities will initially consist of (A)
,000,000 units (referred to as "Type A Securities") with a face
--
amount, per Type A Security, equal to the Stated Amount and (B)
,000,000 units (referred to as "Type B Securities" and,
--
together with the Type A Securities, the "Securities") with a
face amount, per Type B Security, equal to the Stated Amount.
Each Type A Security will initially be comprised of (a) a stock
purchase contract (a "Purchase Contract") under which the
holder will purchase from the Company on (the "Purchase
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Contract Settlement Date"), for an amount of cash equal to the
Stated Amount, a number of newly issued shares of common stock,
no par value per share (the "Common Stock"), of the Company equal
to the Settlement Rate (as defined below) and (b) either
beneficial ownership of a Debt Security (as defined below) or
upon the occurrence of a Tax Event Redemption the Applicable
Ownership Interest of the Treasury Portfolio. Each Type B
Security will initially be comprised of (a) a Purchase Contract
under which (i) the holder will purchase from the Company on the
Purchase Contract Settlement Date, for an amount in cash equal to
the Stated Amount, a number of newly issued shares of Common
Stock of the Company, equal to the Settlement Rate, and (ii) the
Company will pay the Holder Contract Adjustment Payments (as
defined below) at the rate of % of the Stated Amount per annum,
--
and (b) a 1/100 undivided beneficial interest in a zero-coupon
U.S. Treasury Security (CUSIP No. ) having a principal
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amount equal to $1,000 and maturing on (the "Treasury
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Securities").
Pursuant to the terms of the Indenture (as defined
below), the Company will issue % Series D Senior Notes
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due (the "Debt Securities") in an aggregate principal amount
equal to the aggregate Stated Amount of all Type A Securities.
Pursuant to the terms of the Purchase Contract
Agreement and the Purchase Contracts, the Holders, from time to
time, of the Securities have irrevocably authorized the Purchase
Contract Agent, as attorney-in-fact of such Holders, among other
things, to execute and deliver this Agreement on behalf of such
Holders and to grant the pledge provided hereby of the Debt
Securities, any Applicable Ownership Interest in the Treasury
Portfolio and any Treasury Securities to secure each Holder's
obligations under the related Purchase Contract, as provided
herein and subject to the terms hereof. Upon such pledge, the
Debt Securities will be beneficially owned by the Holders but
will be owned of record by the Purchase Contract Agent subject to
the Pledge hereunder.
Accordingly, the Company, the Collateral Agent, the
Securities Intermediary, the Custodial Agent and the Purchase
Contract Agent, on its own behalf and as attorney-in-fact of the
Holders from time to time of the Securities, agree as follows:
Section 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;
(b) the words "herein," "hereof" and "hereunder"
and other words of similar import refer to this
Agreement as a whole and not to any particular Article,
Section or other subdivision;
(c) the following terms have the meanings assigned
to them in the Purchase Contract Agreement: (i) Act,
(ii) Agent, (iii) Board Resolution, (iv) Cash
Settlement, (v) Certificate, (vi) Contract Adjustment
Payments, (vii) Debentures, (viii) Early Settlement,
(ix) Early Settlement Amount, (x) Early Settlement
Date, (xi) Failed Remarketing, (xii) Holder, (xiii)
Opinion of Counsel, (xiv) Outstanding Securities, (xv)
Purchase Contract, (xvi) Purchase Contract Settlement
Date, (xvii) Remarketing Agent, (xviii) Remarketing
Agreement, (xix) Remarketing Underwriting Agreement,
(xx) Settlement Rate, and (xxi) Termination Event; and
(d) the following terms have the meanings assigned
to them in the Indenture and the Officer's Certificate
establishing the terms of the New Securities (i)
Applicable Ownership Interest, (ii) Applicable
Principal Amount, (iii) Primary Treasury Dealer, (iv)
Quotation Agent, (v) Redemption Amount, (vi) Redemption
Price, (vii) Tax Event, (viii) Tax Event Redemption,
(ix) Tax Event Redemption Date, (x) Treasury Portfolio,
(xi) Treasury Portfolio Purchase Price.
"Agreement" means this instrument as originally
executed or as it may from time to time be supplemented or
amended by one or more agreements supplemental hereto entered
into pursuant to the applicable provisions hereof.
"Bankruptcy Code" means title 11 of the United States
Code, or any other law of the United States that from time to
time provides a uniform system of bankruptcy laws.
"Business Day" means any day other than a Saturday, a
Sunday or any other day on which banking institutions in The City
of New York (in the State of New York) are permitted or required
by any applicable law to close.
"Cash" means any coin or currency of the United States
as at the time shall be legal tender for payment of public and
private debts.
"Code" has the meaning specified in Section 6.1 hereof.
"Collateral" has the meaning specified in Section 2.1
hereof.
"Collateral Account" means the securities account
(number ) maintained at in the name
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" , as Purchase Contract Agent on behalf of the holders
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of Securities subject to the security interest of the Pledge
Agreement, of as Collateral Agent, for the benefit of
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Texas Utilities Company, as pledgee" and any successor account.
"Collateral Agent" has the meaning specified in the
first paragraph of this instrument.
"Common Stock" has the meaning specified in the
Recitals.
"Company" means the Person named as the "Company" in
the first paragraph of this instrument until a successor shall
have become such, and thereafter "Company" shall mean such
successor.
"Custodial Agent" has the meaning specified in the
Recitals.
"Debt Securities" has the meaning specified in the
Recitals.
"Indenture" means the Trust Indenture, dated
, between the Company and the Trustee with respect to
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the Debt Securities.
"Intermediary" means any entity that in the ordinary
course of its business maintains securities accounts for others
and is acting in that capacity.
"Officer's Certificate" means the instrument setting
forth the terms of the Debt Securities pursuant to the Indenture.
"Permitted Investments" means any one of the following
which shall mature not later than the next succeeding Business
Day (i) any evidence of indebtedness with an original maturity of
365 days or less issued, or directly and fully guaranteed or
insured, by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit
of the United States of America is pledged in support thereof or
such indebtedness constitutes a general obligation of it); (ii)
deposits, certificates of deposit or acceptances with an original
maturity of 365 days or less of any institution which is a member
of the Federal Reserve System having combined capital and surplus
and undivided profits of not less than US $200.0 million at the
time of deposit; (iii) investments with an original maturity of
365 days or less of any Person that is fully and unconditionally
guaranteed by a bank referred to in clause (ii); (iv) investments
in commercial paper, other than commercial paper issued by the
Company or its affiliates, of any corporation incorporated under
the laws of the United States or any State thereof, which
commercial paper has a rating at the time of purchase at least
equal to "A-1" by Standard & Poor's Ratings Services ("S&P") or
at least equal to "P-1" by Xxxxx'x Investors Service, Inc.
("Moody's"); and (v) investments in money market funds registered
under the Investment Company Act of 1940, as amended, rated in
the highest applicable rating category by S&P or Moody's.
"Person" means any individual, corporation, limited
liability company, partnership, joint venture, association,
joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Pledge" has the meaning specified in Section 2.1
hereof.
"Pledged Debt Securities" has the meaning specified in
Section 2.1 hereof.
"Pledged Treasury Securities" has the meaning specified
in Section 2.1 hereof.
"Proceeds" means all interest, dividends, cash,
instruments, securities, financial assets (as defined in Section
8-102(a)(9) of the Code) and other property from time to time
received, receivable or otherwise distributed upon the sale,
exchange, collection or disposition of the Collateral or any
proceeds thereof.
"Purchase Contract" has the meaning specified in the
Recitals.
"Purchase Contract Agent" has the meaning specified in
the first paragraph of this Agreement.
"Purchase Contract Agreement" has the meaning specified
in the Recitals.
"Securities" has the meaning specified in the Recitals.
"Securities Intermediary" has the meaning specified in
the first paragraph of this Agreement.
"Security Entitlement" has the meaning set forth in
Section 8-102(a)(17) of the Code.
"Separate Debt Securities" means any Debt Securities
that are not Pledged Debt Securities.
"Stated Amount" has the meaning specified in the
Recitals.
"TRADES" means the Treasury/Reserve Automated Debt
Entry System maintained by the Federal Reserve Bank of New York
pursuant to the TRADES Regulations.
"TRADES Regulations" means the regulations of the
United States Department of the Treasury, published at 31 C.F.R.
Part 357, as amended from time to time. Unless otherwise defined
herein, all terms defined in the TRADES Regulations are used
herein as therein defined.
"Transfer" means, with respect to the Collateral and in
accordance with the instructions of the Collateral Agent, the
Purchase Contract Agent or the Holder, as applicable:
(i) in the case of Collateral
consisting of securities which
cannot be delivered by book-entry
or which the parties agree are to
be delivered in physical form,
delivery in appropriate physical
form to the recipient accompanied
by any duly executed instruments of
transfer, assignments in blank,
transfer tax stamps and any other
documents necessary to constitute a
legally valid transfer to the
recipient;
(ii) in the case of Collateral
consisting of securities maintained
in book-entry form by causing a
"securities intermediary" (as
defined in Section 8-102(a)(14) of
the Code) to (i) credit a "security
entitlement" (as defined in Section
8-102(a)(17) of the Code) with
respect to such securities to a
"securities account" (as defined in
Section 8-501(a) of the Code)
maintained by or on behalf of the
recipient and (ii) to issue a
confirmation to the recipient with
respect to such credit. In the
case of Collateral to be delivered
to the Collateral Agent, the
securities intermediary shall be
the Securities Intermediary and the
securities account shall be the
Collateral Account.
"Treasury Security" means a zero-coupon U.S. Treasury
Security (Cusip Number ) which are the principal strips
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of the U.S. Treasury Securities which mature on .
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"Trustee" means , as trustee under the
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Indenture until a successor is appointed thereunder, and thereafter
means such successor trustee.
"Value" with respect to any item of Collateral on any
date means, as to (i) Debt Securities, the aggregate principal
amount thereof, (ii) Cash, the face amount thereof and (iii)
Treasury Securities, the aggregate principal amount thereof at
maturity.
Section 2. Pledge; Control and Perfection.
Section 2.1. The Pledge. The Holders from time to
time acting through the Purchase Contract Agent, as their
attorney-in-fact, hereby pledge and grant to the Collateral
Agent, for the benefit of the Company, as collateral security for
the performance when due by such Holders of their respective
obligations under the related Purchase Contracts, a security
interest in (i) all of the right, title and interest of such
Holders (a) in the Debt Securities and Treasury Securities
constituting a part of the Securities and any Treasury Securities
delivered in exchange for any Debt Securities, and any Debt
Securities delivered in exchange for any Treasury Securities, in
accordance with Section 4 hereof, in each case that have been
Transferred to or received by the Collateral Agent and not
released by the Collateral Agent to such Holders under the
provisions of this Agreement; (b) in payments made by Holders
pursuant to Section 4.4; (c) in the Collateral Account and all
securities, financial assets, Cash and other property credited
thereto and all Security Entitlements related thereto; (d) in the
Treasury Portfolio purchased on behalf of the Holders of Type A
Securities by the Collateral Agent upon the occurrence of a Tax
Event Redemption as provided in Section 6.2 and (e) all Proceeds
of the foregoing (all of the foregoing, collectively, the
"Collateral"). Prior to or concurrently with the execution and
delivery of this Agreement, the Purchase Contract Agent, on
behalf of the initial Holders of the Securities, shall cause the
Debt Securities comprising a part of the Type A Securities, and
the Treasury Securities comprising a part of the Type B
Securities, to be Transferred to the Collateral Agent for the
benefit of the Company. Such Debt Securities shall be Transferred
by physically delivering such Securities to the Securities
Intermediary endorsed in blank and causing the Securities
Intermediary to credit the Collateral Account with such
Securities and sending the Collateral Agent a confirmation of the
deposit of such Securities. In the event a Holder of Type A
Securities so elects, such Holder may Transfer Treasury
Securities to the Collateral Agent for the benefit of the Company
in exchange for the release by the Collateral Agent on behalf of
the Company of Debt Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be,
with an aggregate stated liquidation amount equal to the
aggregate principal amount of the Treasury Securities so
Transferred, in the case of Debt Securities, or with an
appropriate Applicable Ownership Interest (as specified in clause
(A) of the definition of such term) of the Treasury Portfolio
equal to the aggregate principal amount of the Treasury
Securities so transferred, in the event that a
Tax Event Redemption has occurred, to the Purchase Contract Agent
on behalf of such Holder. Treasury Securities and the Treasury
Portfolio, as applicable, shall be Transferred to the Collateral
Account maintained by the Collateral Agent at the Securities
Intermediary by book-entry transfer to the Collateral Account in
accordance with the TRADES Regulations and other applicable law
and by the notation by the Securities Intermediary on its books
that a Security Entitlement with respect to such Treasury
Securities or Treasury Portfolio, has been credited to the
Collateral Account. For purposes of perfecting the Pledge under
applicable law, including, to the extent applicable, the TRADES
Regulations or the Uniform Commercial Code as adopted and in
effect in any applicable jurisdiction, the Collateral Agent shall
be the agent of the Company as provided herein. The pledge
provided in this Section 2.1 is herein referred to as the
"Pledge" and the Debt Securities or Treasury Securities subject
to the Pledge, excluding any Debt Securities or Treasury
Securities released from the Pledge as provided in Section 4
hereof, are hereinafter referred to as "Pledged Debt Securities"
or the "Pledged Treasury Securities," respectively. Subject to
the Pledge and the provisions of Section 2.2 hereof, the Holders
from time to time shall have full beneficial ownership of the
Collateral. Whenever directed by the Collateral Agent acting on
behalf of the Company, the Securities Intermediary shall have the
right to reregister the Debt Securities or any other Securities
held in physical form in its name.
Except as may be required in order to release Debt
Securities in connection with a Holder's election to convert its
investment from Type A Securities to Type B Securities, or except
as otherwise required to release Securities as specified herein,
neither the Collateral Agent nor the Securities Intermediary
shall relinquish physical possession of any certificate
evidencing Debt Securities or Treasury Securities prior to the
termination of this Agreement. If it becomes necessary for the
Securities Intermediary to relinquish physical possession of a
certificate in order to release a portion of the Debt Securities
evidenced thereby from the Pledge, the Securities Intermediary
shall use its best efforts to obtain physical possession of a
replacement certificate evidencing any Debt Securities remaining
subject to the Pledge hereunder registered to it or endorsed in
blank within fifteen days of the date it relinquished possession.
The Securities Intermediary shall promptly notify the Company and
the Collateral Agent of the Securities Intermediary's failure to
obtain possession of any such replacement certificate as required
hereby.
Section 2.2. Control and Perfection. (a) In
connection with the Pledge granted in Section 2.1, and subject to
the other provisions of this Agreement, the Holders from time to
time acting through the Purchase Contract Agent, as their
attorney-in-fact, hereby authorize and direct the Securities
Intermediary (without the necessity of obtaining the further
consent of the Purchase Contract Agent or any of the Holders),
and the Securities Intermediary agrees, to comply with and follow
any instructions and entitlement orders (as defined in Section
8-102(a)(8) of the Code) that the Collateral Agent on behalf of
the Company may give in writing with respect to the Collateral
Account, the Collateral credited thereto and any security
entitlements with respect to any thereof. Such instructions and
entitlement orders may, without limitation, direct the Securities
Intermediary to transfer, redeem, sell, liquidate, assign,
deliver or otherwise dispose of the Debt Securities, the Treasury
Securities, the Treasury Portfolio, and any Security Entitlements
with respect thereto and to pay and deliver any income, proceeds
or other funds derived therefrom to the Company. The Holders from
time to time acting through the Purchase Contract Agent hereby
further authorize and direct the Collateral Agent, as Agent of
the Company, to itself issue instructions and entitlement orders,
and to otherwise take action, with respect to the Collateral
Account, the Collateral credited thereto and any security
entitlements with respect thereto, pursuant to the terms and
provisions hereof, all without the necessity of obtaining the
further consent of the Purchase Contract Agent or any of the
Holders. The Collateral Agent shall be the Agent of the Company
and shall act as directed in writing by the Company. Without
limiting the generality of the foregoing, the Collateral Agent
shall issue entitlement orders to the Securities Intermediary
when and as directed by the Company.
(b) The Securities Intermediary hereby confirms and
agrees that: (i) all securities or other property underlying any
financial assets credited to the Collateral Account shall be
registered in the name of the Securities Intermediary, indorsed
to the Securities Intermediary or in blank or credited to another
Collateral Account maintained in the name of the Securities
Intermediary and in no case will any financial asset credited to
the Collateral Account be registered in the name of the Purchase
Contract Agent, the Collateral Agent, the Company or any Holder,
payable to the order of, or specially indorsed to, the Purchase
Contract Agent, the Collateral Agent, the Company or any Holder
except to the extent the foregoing have been specially indorsed
to the Securities Intermediary or in blank; (ii) all property
delivered to the Securities Intermediary pursuant to this Pledge
Agreement (including, without limitation, any Debt Securities,
the Treasury Portfolio or Treasury Securities) will be promptly
credited to the Collateral Account; (iii) the Collateral Account
is an account to which financial assets are or may be credited,
and the Securities Intermediary shall, subject to the terms of
this Agreement, treat the Purchase Contract Agent as entitled to
exercise the rights of any financial asset credited to the
Collateral Account; (iv) the Securities Intermediary has not
entered into, and until the termination of the this Agreement
will not enter into, any agreement with any other person relating
to the Collateral Account and/or any financial assets credited
thereto pursuant to which it has agreed to comply with
entitlement orders (as defined in Section 8-102(a)(8) of the
Code) of such other person; and (v) the Securities Intermediary
has not entered into, and until the termination of this Agreement
will not enter into, any agreement with the debtor or the secured
party purporting to limit or condition the obligation of the
Securities Intermediary to comply with entitlement orders as set
forth in this Section 2.2 hereof.
(c) The Securities Intermediary hereby agrees that each
item of property (whether investment property, financial asset,
security, instrument or cash) credited to the Collateral Account
shall be treated as a "financial asset" within the meaning of
Section 8-102(a)(9) of the Code.
(d) In the event of any conflict between this Agreement
(or any portion thereof) and any other agreement now existing or
hereafter entered into, the terms of this Agreement shall
prevail.
Section 3. Distributions on Pledged Collateral. So
long as the Purchase Contract Agent is the registered owner of
the Pledged Debt Securities, it shall receive all payments
thereon. If the Pledged Debt Securities are reregistered, such
that the Collateral Agent becomes the registered holder, all
payments of the Stated Amount or, if applicable, the appropriate
Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio, or payments
of interest on, the Pledged Debt Securities or distributions on
the appropriate Applicable Ownership Interest (as specified in
clause (B) of the definition of such term) of the Treasury
Portfolio, as the case may be, and all payments of the principal
of, or cash distributions on, any Pledged Treasury Securities
received by the Collateral Agent that are properly payable
hereunder shall be paid by the Collateral Agent by wire transfer
in same day funds:
(i) In the case of (A) payment of interest with
respect to the Pledged Debt Securities or cash
distributions on the appropriate Applicable
Ownership Interest (as specified in clause (B) of
the definition of such term) of the Treasury
Portfolio, as the case may be, and (B) any
payments of the Stated Amount or, if applicable,
the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such
term) of the Treasury Portfolio with respect to
any Debt Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as
the case may be, that have been released from the
Pledge pursuant to Section 4.3 hereof, to the
Purchase Contract Agent, for the benefit of the
relevant Holders of Securities, to the account
designated by the Purchase Contract Agent for such
purpose, no later than 2:00 p.m., New York City
time, on the Business Day such payment is received
by the Collateral Agent (provided that in the
event such payment is received by the Collateral
Agent on a day that is not a Business Day or after
12:30 p.m., New York City time, on a Business Day,
then such payment shall be made no later than
10:30 a.m., New York City time, on the next
succeeding Business Day);
(ii) In the case of any principal payments with respect
to any Treasury Securities that have been released
from the Pledge pursuant to Section 4.3 hereof, to
the Holders of the Type B Securities 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
(iii) In the case of payments of the principal of
any Pledged Debt Securities or the Stated
Amount of the appropriate Applicable
Ownership Interest (as specified in clause
(A) of the definition of such term) of the
Treasury Portfolio, as the case may be, or
the principal of any Pledged Treasury
Securities, to the Company on the Purchase
Contract Settlement Date in accordance with
the procedure set forth in Section 4.6(a) or
4.6(b) hereof, in full satisfaction of the
respective obligations of the Holders under
the related Purchase Contracts.
All payments received by the Purchase Contract Agent as provided
herein shall be applied by the Purchase Contract Agent pursuant
to the provisions of the Purchase Contract Agreement. If,
notwithstanding the foregoing, the Purchase Contract Agent shall
receive any payments of the Stated Amount or, if applicable, the
appropriate Applicable Ownership Interest (as specified in clause
(A) of the definition of such term) on account of any Debt
Security or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as applicable that, at the time of such
payment, is a Pledged Debt Security or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be,
or a Holder of a Type B Securities shall receive any payments of
principal on account of any Treasury Securities that, at the time
of such payment, are Pledged Treasury Securities, the Purchase
Contract Agent or such Holder shall hold the same as trustee of
an express trust for the benefit of the Company (and promptly
deliver the same over to the Company) for application to the
obligations of the Holders under the related Purchase Contracts,
and the Holders shall acquire no right, title or interest in any
such payments of Stated Amount or principal so received.
Section 4. Substitution, Release, Repledge and
Settlement of Debt Securities.
Section 4.1. Substitution for Debt Securities and the
Creation of Type B Securities. At any time on or prior to the
fifth Business Day immediately preceding the Purchase Contract
Settlement Date (unless a Tax Event Redemption has occurred), a
Holder of Type A Securities shall have the right to substitute
Treasury Securities for the Pledged Debt Securities securing such
Holder's obligations under the Purchase Contract(s) comprising a
part of its Type A Securities in integral multiples of 100 Type A
Securities by (a) Transferring to the Collateral Agent Treasury
Securities having a Value equal to the aggregate Stated Amount of
the Pledged Debt Securities to be released and (b)(i) in the
event that Contract Adjustment Payments are at a higher rate for
Type B Securities than for Type A Securities, delivering to the
Purchase Contract Agent Cash in an amount equal to the excess of
the Contract Adjustment Payments that would have accrued since
the last Payment Date through the date of substitution on the
Type B Securities being created by the Holder, over the Contract
Adjustment Payments that have accrued over the same time period
on the related Type A Securities, which amount the Purchase
Contract Agent shall promptly remit to the Company, and (ii)
delivering the related Type A Securities to the Purchase Contract
Agent, accompanied by a notice, substantially in the form of
Exhibit B hereto, to the Purchase Contract Agent stating that
such Holder has Transferred Treasury Securities to the Collateral
Agent pursuant to clause (a) above (stating the Value of the
Treasury Securities Transferred by such Holder) and requesting
that the Purchase Contract Agent instruct the Collateral Agent to
release from the Pledge the Pledged Debt Securities related to
such Type A Securities. The Purchase Contract Agent shall
instruct the Collateral Agent in the form provided in Exhibit A;
provided, however, that if a Tax Event Redemption has occurred
and the Treasury Portfolio has become a component of the Type A
Securities, Holders of Type A Securities may make such
substitution only in integral multiples of Type A
Securities at any time on or prior to the second Business Day
immediately preceding the Purchase Contract Settlement Date.
Upon receipt of Treasury Securities from a Holder of Type A
Securities and the related instruction from the Purchase Contract
Agent, the Collateral Agent shall release the Pledged Debt
Securities or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, as the case may be, and shall promptly
Transfer such Pledged Debt Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the
case may be, free and clear of any lien, pledge or security
interest created hereby, to the Purchase Contract Agent.
Section 4.2. Substitution of Treasury Securities and
the Creation of Type A Securities. At any time on or prior to
the fifth Business Day immediately preceding the Purchase
Contract Settlement Date (unless a Tax Event Redemption has
occurred), a Holder of Type B Securities shall have the right to
establish or reestablish Type A Securities consisting of the
Purchase Contracts and Debt Securities in integral multiples of
100 Type A Securities by (a) Transferring to the Collateral Agent
Debt Securities having a Value equal to the Value of the Pledged
Treasury Securities to be released and (b) delivering the related
Type B Securities to the Purchase Contract Agent, accompanied by
a notice, substantially in the form of Exhibit B hereto, to the
Purchase Contract Agent stating that such Holder has transferred
Debt Securities to the Collateral Agent pursuant to clause (a)
above and requesting that the Purchase Contract Agent instruct
the Collateral Agent to release from the Pledge the Pledged
Treasury Securities related to such Type B Securities. The
Purchase Contract Agent shall instruct the Collateral Agent in
the form provided in Exhibit A; provided, however, that if a Tax
Event Redemption has occurred and the Treasury Portfolio has
become a component of the Type A Securities, Holders of Type B
Securities may make such substitution only in integral multiples
of Type B Securities, at any time on or prior to the
Business Day immediately preceding the Purchase Contract
Settlement Date. Upon receipt of the Debt Securities or the
appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, from such Holder and the
instruction from the Purchase Contract Agent, the Collateral
Agent shall release the Treasury Securities and shall promptly
Transfer such Treasury Securities, free and clear of any lien,
pledge or security interest created hereby, to the Purchase
Contract Agent.
Section 4.3. Termination Event. Upon receipt by the
Collateral Agent of written notice from the Company or the
Purchase Contract Agent that there has occurred a Termination
Event, the Collateral Agent shall release all Collateral from the
Pledge and shall promptly Transfer any Pledged Debt Securities
(or the Applicable Ownership Interest of the Treasury Portfolio
if a Tax Event Redemption has occurred) and Pledged Treasury
Securities to the Purchase Contract Agent for the benefit of the
Holders of the Type A Securities and the Type B Securities,
respectively, free and clear of any lien, pledge or security
interest or other interest created hereby.
If such Termination Event shall result from the
Company's becoming a debtor under the Bankruptcy Code, and if the
Collateral Agent shall for any reason fail promptly to effectuate
the release and Transfer of all Pledged Debt Securities, the
Treasury Portfolio or of the Pledged Treasury Securities, as the
case may be, as provided by this Section 4.3, the Purchase
Contract Agent shall (i) use its best efforts to obtain an
opinion of a nationally recognized law firm reasonably acceptable
to the Collateral Agent to the effect that, as a result of the
Company's being the debtor in such a bankruptcy case, the
Collateral Agent will not be prohibited from releasing or
Transferring the Collateral as provided in this Section 4.3, and
shall deliver such opinion to the Collateral Agent within ten
days after the occurrence of such Termination Event, and if (y)
the Purchase Contract Agent shall be unable to obtain such
opinion within ten days after the occurrence of such Termination
Event or (z) the Collateral Agent shall continue, after delivery
of such opinion, to refuse to effectuate the release and Transfer
of all Pledged Debt Securities, the Treasury Portfolio or the
Pledged Treasury Securities, as the case may be, as provided in
this Section 4.3, then the Purchase Contract Agent shall within
fifteen days after the occurrence of such Termination Event
commence an action or proceeding in the court with jurisdiction
of the Company's case under the Bankruptcy Code seeking an order
requiring the Collateral Agent to effectuate the release and
transfer of all Pledged Debt Securities, the Treasury Portfolio
or of the Pledged Treasury Securities, as the case may be, as
provided by this Section 4.3 or (ii) commence an action or
proceeding like that described in subsection (i)(z) hereof within
ten days after the occurrence of such Termination Event.
Section 4.4. Cash Settlement. (a) Upon receipt by the
Collateral Agent of (i) a notice from the Purchase Contract Agent
promptly after the receipt by the Purchase Contract Agent of such
notice that a Holder of an Type A Securities or Type B Securities
has elected, in accordance with the procedures specified in
Section 5.4(a)(i) or (d)(i) of the Purchase Contract Agreement,
respectively, to settle its Purchase Contract with Cash and (ii)
payment by such Holder on or prior to 11:00 a.m., New York City
time, on the Business Day immediately preceding the Purchase
Contract Settlement Date in lawful money of the United States by
certified or cashiers' check or wire transfer in immediately
available funds payable to or upon the order of the Company, then
the Collateral Agent shall, promptly invest any Cash received
from a Holder in connection with a Cash Settlement in Permitted
Investments. Upon receipt of the proceeds upon the maturity of
the Permitted Investments on the Purchase Contract Settlement
Date, the Collateral Agent shall pay the portion of such proceeds
and deliver any certified or cashiers' checks received, in an
aggregate amount equal to the Purchase Price, to the Company on
the Purchase Contract Settlement Date, and shall distribute any
funds in respect of the interest earned from the Permitted
Investments to the Purchase Contract Agent for payment to the
relevant Holders.
(b) If a Holder of Type A Securities fails to notify
the Purchase Contract Agent of its intention to make a Cash
Settlement in accordance with Section 5.4(a)(i) of the Purchase
Contract Agreement, such failure shall constitute an event of
default under the Purchase Contract Agreement and hereunder, and
the Holder shall be deemed to have consented to the disposition
of the pledged Debt Securities pursuant to the remarketing as
described in Section 5.4(b) of the Purchase Contract Agreement,
which is incorporated herein by reference. If a Holder of Type
A Securities does notify the Agent as provided in Section
5.4(a)(i) of the Purchase Contract Agreement of its intention to
make a Cash Settlement, but fails to make such payment as
required by Section 5.4(a)(ii) of the Purchase Contract
Agreement, the Debt Securities of such a Holder will not be
remarketed but instead the Collateral Agent, for the benefit of
the Company, will exercise its rights as a secured party with
respect to such Debt Securities at the direction of the Company
to retain or dispose of the Collateral in accordance with
applicable law. In addition, in the event of a Failed Remarketing
as described in Section 5.4(b) of the Purchase Contract
Agreement, such Failed Remarketing shall constitute an event of
default hereunder by such Holder and the Collateral Agent, for
the benefit of the Company, will also exercise its rights as a
secured party with respect to such Debt Securities at the
direction of the Company to retain or dispose of the Collateral
in accordance with applicable law.
(c) If a Holder of a Type B Securities fails to notify
the Purchase Contract Agent of such Holder's intention to make a
Cash Settlement in accordance with Section 5.4(d)(i) of the
Purchase Contract Agreement, or if a Holder of a Type B
Securities does notify the Agent as provided in paragraph
5.4(d)(i) of the Purchase Contract Agreement of its intention to
make a Cash Settlement, but fails to make such payment as
required by paragraph 5.4(d)(ii) of the Purchase Contract
Agreement, such failure shall constitute an event of default
hereunder by such Holder and upon the maturity of any Pledged
Treasury Securities or the Treasury Portfolio, if any, held by
the Collateral Agent on the Business Day immediately preceding
the Purchase Contract Settlement Date, the principal amount of
the Pledged Treasury Securities or the Treasury Portfolio
received by the Collateral Agent shall, upon written direction of
the Company, be invested promptly in Permitted Investments. On
the Purchase Contract Settlement Date, an amount equal to the
Purchase Price will be remitted to the Company as payment
thereof. In the event the sum of the proceeds from the related
Pledged Treasury Securities or the Treasury Portfolio, as the
case may be, and the investment earnings earned from such
investments is in excess of the aggregate Purchase Price of the
Purchase Contracts being settled thereby, the Collateral Agent
will distribute such excess to the Purchase Contract Agent for
the benefit of the Holder of the related Type B Securities or
Type A Securities when received.
Section 4.5. Early Settlement. Upon written notice to
the Collateral Agent by the Purchase Contract Agent that one or
more Holders of Securities have elected to effect Early
Settlement of their respective obligations under the Purchase
Contracts forming a part of such Securities in accordance with
the terms of the Purchase Contracts and the Purchase Contract
Agreement (setting forth the number of such Purchase Contracts as
to which such Holders have elected to effect Early Settlement),
and that the Purchase Contract Agent has received from such
Holders, and paid to the Company as confirmed in writing by the
Company, the related Early Settlement Amounts pursuant to the
terms of the Purchase Contracts and the Purchase Contract
Agreement and that all conditions to such Early Settlement have
been satisfied, then the Collateral Agent shall release from the
Pledge, (a) Pledged Debt Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio in the case of a
Holder of Type A Securities or (b) Pledged Treasury Securities in
the case of a Holder of Type B Securities in each case with a
principal amount equal to the product of (i) the Stated Amount
times (ii) the number of such Purchase Contracts as to which such
Holders have elected to effect Early Settlement and shall Transfer
all such Pledged Debt Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio or Pledged Treasury
Securities, as the case may be, free and clear of the Pledge
created hereby, to the Purchase Contract Agent for the benefit of
the Holders.
Section 4.6. Application of Proceeds Settlement. (a)
In the event a Holder of Type A Securities (if a Tax Event
Redemption has not occurred) has not elected to make an effective
Cash Settlement by notifying the Purchase Contract Agent in the
manner provided for in paragraph 5.4(a)(i) in the Purchase
Contract Agreement or has not made an Early Settlement of the
Purchase Contract(s) underlying its Type A Securities, such
Holder shall be deemed to have elected to pay for the shares of
Common Stock to be issued under such Purchase Contract(s) from
the Proceeds of the related Pledged Debt Securities. The
Collateral Agent shall, by 10:00 a.m., New York City time, on the
fourth Business Day immediately preceding the Purchase Contract
Settlement Date, without any instruction from such Holder of Type
A Securities, present the related Pledged Debt Securities to the
Remarketing Agent for remarketing. Upon receiving such Pledged
Debt Securities, the Remarketing Agent, pursuant to the terms of
the Remarketing Agreement and the Remarketing Underwriting
Agreement, will use its reasonable efforts to remarket such
Pledged Debt Securities on such date at a price not less than
approximately 100.5% of the aggregate Value of such Pledged Debt
Securities, plus accrued and unpaid distributions (including
deferred distributions), if any, thereon. After deducting as the
Remarketing Fee an amount not exceeding 25 basis points (.25%) of
the aggregate Value of the Pledged Debt Securities from any
amount of such Proceeds in excess of the aggregate Value, plus
such accrued and unpaid distributions (including deferred
distributions) of the remarketed Pledged Debt Securities, the
Remarketing Agent will remit the entire amount of the Proceeds of
such remarketing to the Collateral Agent. On the Purchase
Contract Settlement Date, the Collateral Agent shall apply that
portion of the Proceeds from such remarketing equal to the
aggregate Value, plus such accrued and unpaid distributions
(including deferred distributions) of such Pledged Debt
Securities, to satisfy in full the obligations of such Holders of
Type A Securities to pay the Purchase Price to purchase the
Common Stock under the related Purchase Contracts. The remaining
portion of such Proceeds, if any, shall be distributed by the
Collateral Agent to the Purchase Contract Agent for payment to
the Holders. If the Remarketing Agent advises the Collateral
Agent in writing that it cannot remarket the related Pledged Debt
Securities of such Holders of Type A Securities at a price not
less than 100% of the aggregate Value of such Pledged Debt
Securities plus any accrued and unpaid distributions (including
deferred distributions), thus resulting in a Failed Remarketing
and an event of default under the Purchase Contract Agreement and
hereunder, the Collateral Agent, for the benefit of the Company
will, at the written direction of the Company, retain or dispose
of the Pledged Debt Securities in accordance with applicable law
and satisfy in full, from any such disposition or retention, such
Holder's obligation to pay the Purchase Price for the Common
Stock.
(b) In the event a Holder of Type B Securities or Type
A Securities (if a Tax Event Redemption has occurred) has not
made an Early Settlement of the Purchase Contract(s) underlying
its Type B Securities or Type A Securities, such Holder shall be
deemed to have elected to pay for the shares of Common Stock to
be issued under such Purchase Contract(s) from the Proceeds of
the related Pledged Treasury Securities or the Treasury
Portfolio, as the case may be. On the Business Day immediately
prior to the Purchase Contract Settlement Date, the Collateral
Agent shall, at the written direction of the Purchase Contract
Agent, invest the Cash proceeds of the maturing Pledged Treasury
Securities or the Treasury Portfolio, as the case may be, in
overnight Permitted Investments. Without receiving any
instruction from any such Holder of Type B Securities or Type A
Securities, the Collateral Agent shall apply the Proceeds of the
related Pledged Treasury Securities or Treasury Portfolio to the
settlement of such Purchase Contracts on the Purchase Contract
Settlement Date.
In the event the sum of the Proceeds from the related
Pledged Treasury Securities or Treasury Portfolio and the
investment earnings from the investment in overnight Permitted
Investments is in excess of the aggregate Purchase Price of the
Purchase Contracts being settled thereby, the Collateral Agent
shall distribute such excess, when received, to the Purchase
Contract Agent for the benefit of the Holders.
(c) Pursuant to the Remarketing Agreement and subject
to the terms of the Remarketing Underwriting Agreement, on or
prior to the fifth Business Day immediately preceding the
Purchase Contract Settlement Date, but no earlier than the
Payment Date immediately preceding the Purchase Contract
Settlement Date, holders of Separate Debt Securities may elect to
have their Separate Debt Securities remarketed by delivering
their Separate Debt Securities, together with a notice of such
election, substantially in the form of Exhibit C hereto, to the
Custodial Agent. The Custodial Agent will hold such Separate Debt
Securities in an account separate from the Collateral Account. A
holder of Separate Debt Securities electing to have its Separate
Debt Securities remarketed will also have the right to withdraw
such election by written notice to the Custodial Agent,
substantially in the form of Exhibit D hereto, on or prior to the
fifth Business Day immediately preceding the Purchase Contract
Settlement Date, upon which notice the Custodial Agent will
return such Separate Debt Securities to such holder. On the
fourth Business Day immediately preceding the Purchase Contract
Settlement Date, the Custodial Agent will deliver to the
Remarketing Agent for remarketing all separate Debt Securities
delivered to the Custodial Agent pursuant to this Section 4.6(c)
and not withdrawn pursuant to the terms hereof prior to such
date. The portion of the proceeds from such remarketing equal to
the aggregate Value of such Separate Debt Securities will
automatically be remitted by the Remarketing Agent to the
Custodial Agent for the benefit of the holders of such Separate
Debt Securities. In addition, after deducting as the Remarketing
Fee an amount not exceeding 25 basis points (.25%) of the Value
of the remarketed Separate Debt Securities, from any amount of
such proceeds in excess of the aggregate Value of the remarketed
Separate Debt Securities plus any accrued and unpaid
distributions (including deferred distributions, if any), the
Remarketing Agent will remit to the Custodial Agent the remaining
portion of the proceeds, if any, for the benefit of such holders.
If, despite using its reasonable efforts, the Remarketing Agent
advises the Custodial Agent in writing that it cannot remarket
the related Separate Debt Securities of such holders at a price
not less than 100% of the aggregate Value of such Separate Debt
Securities plus accrued and unpaid distributions (including
deferred distributions) and thus resulting in a Failed
Remarketing, the Remarketing Agent will promptly return such
Separate Debt Securities to the Custodial Agent for redelivery to
such holders.
Section 5. Voting Rights -- Debt Securities. The
Purchase Contract Agent may exercise, or refrain from exercising,
any and all voting and other consensual rights pertaining to the
Pledged Debt Securities or any part thereof for any purpose not
inconsistent with the terms of this Agreement and in accordance
with the terms of the Purchase Contract Agreement; provided, that
the Purchase Contract Agent shall not exercise or, as the case
may be, shall not refrain from exercising such right if, in the
judgment of the Company, such action would impair or otherwise
have a material adverse effect on the value of all or any of the
Pledged Debt Securities; and provided, further, that the Purchase
Contract Agent shall give the Company and the Collateral Agent at
least five days' prior written notice of the manner in which it
intends to exercise, or its reasons for refraining from
exercising, any such right. Upon receipt of any notices and other
communications in respect of any Pledged Debt Securities,
including notice of any meeting at which holders of Debt
Securities are entitled to vote or solicitation of consents,
waivers or proxies of holders of Debt Securities, the Collateral
Agent shall use reasonable efforts to send promptly to the
Purchase Contract Agent such notice or communication, and as soon
as reasonably practicable after receipt of a written request
therefor from the Purchase Contract Agent, execute and deliver to
the Purchase Contract Agent such proxies and other instruments in
respect of such Pledged Debt Securities (in form and substance
satisfactory to the Collateral Agent) as are prepared by the
Purchase Contract Agent with respect to the Pledged Debt
Securities.
Section 6. Rights and Remedies; Distribution of the
Debentures; Tax Event Redemption
Section 6.1. Rights and Remedies of the Collateral
Agent. (a) In addition to the rights and remedies specified in
Section 4.4 hereof or otherwise available at law or in equity,
after an event of default hereunder, the Collateral Agent shall
have all of the rights and remedies with respect to the
Collateral of a secured party under the Uniform Commercial Code
as in effect in the State of New York (the "Code") (whether or
not the Code is in effect in the jurisdiction where the rights
and remedies are asserted) and the TRADES Regulations and such
additional rights and remedies to which a secured party is
entitled under the laws in effect in any jurisdiction where any
rights and remedies hereunder may be asserted. Without limiting
the generality of the foregoing, such remedies may include, to
the extent permitted by applicable law, (i) retention of the
Pledged Debt Securities or other Collateral in full satisfaction
of the Holders' obligations under the Purchase Contracts or (ii)
sale of the Pledged Debt Securities or other Collateral in one or
more public or private sales.
(b) Without limiting any rights or powers otherwise
granted by this Agreement to the Collateral Agent, in the event
the Collateral Agent is unable to make payments to the Company on
account of the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the
Treasury Portfolio or on account of principal payments of any
Pledged Treasury Securities as provided in Section 3 hereof in
satisfaction of the obligations of the Holder of the Securities
of which such Pledged Treasury Securities, or the appropriate
Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio, as
applicable, is a part under the related Purchase Contracts, the
inability to make such payments shall constitute an event of
default hereunder and the Collateral Agent shall have and may
exercise, with reference to such Pledged Treasury Securities, or
such appropriate Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) of the Treasury
Portfolio, as applicable, and such obligations of such Holder,
any and all of the rights and remedies available to a secured
party under the Code and the TRADES Regulations after default by
a debtor, and as otherwise granted herein or under any other law.
(c) Without limiting any rights or powers otherwise
granted by this Agreement to the Collateral Agent, the Collateral
Agent is hereby irrevocably authorized to receive and collect all
payments of (i) the Stated Amount of, or cash distributions on,
the Pledged Debt Securities, (ii) the principal amount of the
Pledged Treasury Securities, or (iii) the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition
of such term) of the Treasury Portfolio, subject, in each case,
to the provisions of Section 3, and as otherwise granted herein.
(d) The Purchase Contract Agent and each Holder of
Securities, in the event such Holder becomes the Holder of Type B
Securities, agree that, from time to time, upon the written
request of the Collateral Agent, the Purchase Contract Agent or
such Holder shall execute and deliver such further documents and
do such other acts and things as the Collateral Agent may
reasonably request in order to maintain the Pledge, and the
perfection and priority thereof, and to confirm the rights of the
Collateral Agent hereunder. The Purchase Contract Agent shall
have no liability to any Holder for executing any documents or
taking any such acts requested by the Collateral Agent hereunder,
except for liability for its own negligent act, its own negligent
failure to act or its own willful misconduct.
Section 6.2. Tax Event Redemption. Upon the
occurrence of a Tax Event Redemption prior to the Purchase
Contract Settlement Date, the Redemption Price payable on the Tax
Event Redemption Date with respect to the Applicable Principal
Amount of Debt Securities shall be delivered to the Collateral
Agent by the Trustee on or prior to 12:30 p.m., New York City
time, by check or wire transfer in immediately available funds at
such place and at such account as may be designated by the
Collateral Agent in exchange for the Pledged Debt Securities. In
the event the Collateral Agent receives such Redemption Price,
the Collateral Agent will, at the written direction of the
Company, apply an amount equal to the Redemption Amount of such
Redemption Price to purchase from the Quotation Agent, the
Treasury Portfolio and promptly remit the remaining portion of
such Redemption Price to the Purchase Contract Agent for payment
to the Holders of Type A Securities. The Collateral Agent shall
Transfer the Treasury Portfolio to the Collateral Account in the
manner specified herein for Pledged Debt Securities to secure the
obligation of all Holders of Type A Securities to purchase Common
Stock of the Company under the Purchase Contracts constituting a
part of such Type A Securities, in substitution for the Pledged
Debt Securities. Thereafter the Collateral Agent shall have such
security interests, rights and obligations with respect to the
Treasury Portfolio as it had in respect of the Pledged Debt
Securities, as provided in Sections 2, 3, 4, 5 and 6, and any
reference herein to the Pledged Debt Securities shall be deemed
to be a reference to such Treasury Portfolio.
Section 6.3. Substitutions. Whenever a Holder has the
right to substitute Treasury Securities, Debt Securities or the
appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, for Collateral held by the
Collateral Agent, such substitution shall not constitute a
novation of the security interest created hereby.
Section 7. Representations and Warranties; Covenants.
Section 7.1. Representations and Warranties. The
Holders from time to time, acting through the Purchase Contract
Agent as their attorney-in-fact (it being understood that the
Purchase Contract Agent shall not be liable for any
representation or warranty made by or on behalf of a Holder),
hereby represent and warrant to the Collateral Agent, which
representations and warranties shall be deemed repeated on each
day a Holder Transfers Collateral that:
(a) such Holder has the power to grant
a security interest in and lien on
the Collateral;
(b) such Holder is the sole beneficial
owner of the Collateral and, in the
case of Collateral delivered in
physical form, is the sole holder
of such Collateral and is the sole
beneficial owner of, or has the
right to Transfer, the Collateral
it Transfers to the Collateral
Agent, free and clear of any
security interest, lien,
encumbrance, call, liability to pay
money or other restriction other
than the security interest and lien
granted under Section 2 hereof;
(c) upon the Transfer of the Collateral
to the Collateral Account, the
Collateral Agent, for the benefit
of the Company, will have a valid
and perfected first priority
security interest therein (assuming
that any central clearing operation
or any Intermediary or other entity
not within the control of the
Holder involved in the Transfer of
the Collateral, including the
Collateral Agent, gives the notices
and takes the action required of it
hereunder and under applicable law
for perfection of that interest and
assuming the establishment and
exercise of control pursuant to
Section 2.2 hereof); and
(d) the execution and performance by
the Holder of its obligations under
this Agreement will not result in
the creation of any security
interest, lien or other encumbrance
on the Collateral other than the
security interest and lien granted
under Section 2 hereof or violate
any provision of any existing law
or regulation applicable to it or
of any mortgage, charge, pledge,
indenture, contract or undertaking
to which it is a party or which is
binding on it or any of its assets.
Section 7.2. Covenants. The Holders from time to
time, acting through the Purchase Contract Agent as their
attorney-in-fact (it being understood that the Purchase Contract
Agent shall not be liable for any covenant made by or on behalf
of a Holder), hereby covenant to the Collateral Agent that for so
long as the Collateral remains subject to the Pledge:
(a) neither the Purchase Contract Agent
nor such Holders will create or
purport to create or allow to
subsist any mortgage, charge, lien,
pledge or any other security
interest whatsoever over the
Collateral or any part of it other
than pursuant to this Agreement;
and
(b) neither the Purchase Contract Agent
nor such Holders will sell or
otherwise dispose (or attempt to
dispose) of the Collateral or any
part of it except for the
beneficial interest therein,
subject to the pledge hereunder,
transferred in connection with the
Transfer of the Securities.
Section 8. The Collateral Agent. It is hereby agreed
as follows:
Section 8.1. Appointment, Powers and Immunities. The
Collateral Agent shall act as Agent for the Company hereunder
with such powers as are specifically vested in the Collateral
Agent by the terms of this Agreement, together with such other
powers as are reasonably incidental thereto. Each of the
Collateral Agent, the Custodial Agent and the Securities
Intermediary: (a) shall have no duties or responsibilities except
those expressly set forth in this Agreement and no implied
covenants or obligations shall be inferred from this Agreement
against any of them, nor shall any of them be bound by the
provisions of any agreement by any party hereto beyond the
specific terms hereof; (b) shall not be responsible for any
recitals contained in this Agreement, or in any certificate or
other document referred to or provided for in, or received by it
under, this Agreement, the Securities or the Purchase Contract
Agreement, or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement
(other than as against the Collateral Agent), the Securities or
the Purchase Contract Agreement or any other document referred to
or provided for herein or therein or for any failure by the
Company or any other Person (except the Collateral Agent, the
Custodial Agent or the Securities Intermediary, as the case may
be) to perform any of its obligations hereunder or thereunder or
for the perfection, priority or, except as expressly required
hereby, maintenance of any security interest created hereunder;
(c) shall not be required to initiate or conduct any litigation
or collection proceedings hereunder (except in the case of the
Collateral Agent, pursuant to directions furnished under Section
8.2 hereof, subject to Section 8.6 hereof); (d) shall not be
responsible for any action taken or omitted to be taken by it
hereunder or under any other document or instrument referred to
or provided for herein or in connection herewith or therewith,
except for its own negligence or willful misconduct; and (e)
shall not be required to advise any party as to selling or
retaining, or taking or refraining from taking any action with
respect to, the Securities or other property deposited hereunder.
Subject to the foregoing, during the term of this Agreement, the
Collateral Agent shall take all reasonable action in connection
with the safekeeping and preservation of the Collateral
hereunder.
No provision of this Agreement shall require the
Collateral Agent, the Custodial Agent or the Securities
Intermediary to expend or risk its own funds or otherwise incur
any financial liability in the performance of any of its duties
hereunder. In no event shall the Collateral Agent, the Custodial
Agent or the Securities Intermediary be liable for any amount in
excess of the Value of the Collateral. Notwithstanding the
foregoing, the Collateral Agent, the Custodial Agent and
Securities Intermediary, each in its individual capacity, hereby
waive any right of setoff, bankers lien, liens or perfection
rights as securities intermediary or any counterclaim with
respect to any of the Collateral.
Section 8.2. Instructions of the Company. The Company
shall have the right, by one or more instruments in writing
executed and delivered to the Collateral Agent, the Custodial
Agent or the Securities Intermediary, as the case may be, to
direct the time, method and place of conducting any proceeding
for the realization of any right or remedy available to the
Collateral Agent, or of exercising any power conferred on the
Collateral Agent, the Custodial Agent or the Securities
Intermediary, as the case may be, or to direct the taking or
refraining from taking of any action authorized by this
Agreement; provided, however, that (i) such direction shall not
conflict with the provisions of any law or of this Agreement and
(ii) the Collateral Agent, the Custodial Agent and the Securities
Intermediary shall be adequately indemnified as provided herein.
Nothing in this Section 8.2 shall impair the right of the
Collateral Agent in its discretion to take any action or omit to
take any action which it deems proper and which is not
inconsistent with such direction.
Section 8.3. Reliance by Collateral Agent. Each of the
Securities Intermediary, the Custodial Agent and the Collateral
Agent shall be entitled conclusively to rely upon any
certification, order, judgment, opinion, notice or other
communication (including, without limitation, any thereof by
telephone, telecopy, telex or facsimile) believed by it to be
genuine and correct and to have been signed or sent by or on
behalf of the proper Person or Persons (without being required to
determine the correctness of any fact stated therein), and upon
advice and statements of legal counsel and other experts selected
by the Collateral Agent, the Custodial Agent or the Securities
Intermediary, as the case may be. As to any matters not expressly
provided for by this Agreement, the Collateral Agent, the
Custodial Agent and the Securities Intermediary shall in all
cases be fully protected in acting, or in refraining from acting,
hereunder in accordance with instructions given by the Company in
accordance with this Agreement.
Section 8.4. Rights in Other Capacities. The
Collateral Agent, the Custodial Agent and the Securities
Intermediary and their affiliates may (without having to account
therefor to the Company) accept deposits from, lend money to,
make their investments in and generally engage in any kind of
banking, trust or other business with the Purchase Contract Agent
and any Holder of Securities (and any of their respective
subsidiaries or affiliates) as if it were not acting as the
Collateral Agent, the Custodial Agent or the Securities
Intermediary, as the case may be, and the Collateral Agent, the
Custodial Agent and the Securities Intermediary and their
affiliates may accept fees and other consideration from the
Purchase Contract Agent and any Holder of Securities without
having to account for the same to the Company; provided that each
of the Securities Intermediary, the Custodial Agent and the
Collateral Agent covenants and agrees with the Company that it
shall not accept, receive or permit there to be created in favor
of itself and shall take no affirmative action to permit there to
be created in favor of any other Person, any security interest,
lien or other encumbrance of any kind in or upon the Collateral.
Section 8.5. Non-Reliance on Collateral Agent. None of
the Securities Intermediary, the Custodial Agent or the
Collateral Agent shall be required to keep itself informed as to
the performance or observance by the Purchase Contract Agent or
any Holder of Securities of this Agreement, the Purchase Contract
Agreement, the Securities or any other document referred to or
provided for herein or therein or to inspect the properties or
books of the Purchase Contract Agent or any Holder of Securities.
The Collateral Agent, the Custodial Agent and the Securities
Intermediary shall not have any duty or responsibility to provide
the Company with any credit or other information concerning the
affairs, financial condition or business of the Purchase Contract
Agent or any Holder of Securities (or any of their respective
affiliates) that may come into the possession of the Collateral
Agent, the Custodial Agent or the Securities Intermediary or any
of their respective affiliates.
Section 8.6. Compensation and Indemnity. The Company
agrees: (i) to pay each of the Collateral Agent and the Custodial
Agent from time to time such compensation as shall be agreed in
writing between the Company and the Collateral Agent or the
Custodial Agent, as the case may be, for all services rendered by
each of them hereunder and (ii) to indemnify the Collateral
Agent, the Custodial Agent and the Securities Intermediary for,
and to hold each of them harmless from and against, any loss,
liability or reasonable out-of-pocket expense incurred without
negligence, willful misconduct or bad faith on its part, arising
out of or in connection with the acceptance or administration of
its powers and duties under this Agreement, including the
reasonable out-of-pocket costs and expenses (including reasonable
fees and expenses of counsel) of defending itself against any
claim or liability in connection with the exercise or performance
of such powers and duties.
Section 8.7. Failure to Act. In the event of any
ambiguity in the provisions of this Agreement or any dispute
between or conflicting claims by or among the parties hereto or
any other Person with respect to any funds or property deposited
hereunder, the Collateral Agent and the Custodial Agent shall be
entitled, after prompt notice to the Company and the Purchase
Contract Agent, at its sole option, to refuse to comply with any
and all claims, demands or instructions with respect to such
property or funds so long as such dispute or conflict shall
continue, and neither the Collateral Agent nor the Custodial
Agent shall be or become liable in any way to any of the parties
hereto for its failure or refusal to comply with such conflicting
claims, demands or instructions. The Collateral Agent and the
Custodial Agent shall be entitled to refuse to act until either
(i) such conflicting or adverse claims or demands shall have been
finally determined by a court of competent jurisdiction or
settled by agreement between the conflicting parties as evidenced
in a writing, satisfactory to the Collateral Agent or the
Custodial Agent, as the case may be, or (ii) the Collateral Agent
or the Custodial Agent, as the case may be, shall have received
security or an indemnity satisfactory to the Collateral Agent or
the Custodial Agent, as the case may be, sufficient to save the
Collateral Agent or the Custodial Agent, as the case may be,
harmless from and against any and all loss, liability or
reasonable out-of-pocket expense which the Collateral Agent or
the Custodial Agent, as the case may be, may incur by reason of
its acting. The Collateral Agent or the Custodial Agent may in
addition elect to commence an interpleader action or seek other
judicial relief or orders as the Collateral Agent or the
Custodial Agent, as the case may be, may deem necessary.
Notwithstanding anything contained herein to the contrary,
neither the Collateral Agent nor the Custodial Agent shall be
required to take any action that is in its opinion contrary to
law or to the terms of this Agreement, or which would in its
opinion subject it or any of its officers, employees or directors
to liability.
Section 8.8. Resignation of Collateral Agent. Subject
to the appointment and acceptance of a successor Collateral Agent
or Custodial Agent as provided below, (a) the Collateral Agent
and the Custodial Agent may resign at any time by giving notice
thereof to the Company and the Purchase Contract Agent as
attorney-in-fact for the Holders of Securities, (b) the
Collateral Agent and the Custodial Agent may be removed at any
time by the Company and (c) if the Collateral Agent or the
Custodial Agent fails to perform any of its material obligations
hereunder in any material respect for a period of not less than
20 days after receiving written notice of such failure by the
Purchase Contract Agent and such failure shall be continuing, the
Collateral Agent or the Custodial Agent may be removed by the
Purchase Contract Agent. The Purchase Contract Agent shall
promptly notify the Company of any removal of the Collateral
Agent pursuant to clause (c) of the immediately preceding
sentence. Upon any such resignation or removal, the Company shall
have the right to appoint a successor Collateral Agent or
Custodial Agent, as the case may be. If no successor Collateral
Agent or Custodial Agent, as the case may be, shall have been so
appointed and shall have accepted such appointment within 30 days
after the retiring Collateral Agent's or Custodial Agent's giving
of notice of resignation or such removal, then the retiring
Collateral Agent or Custodial Agent, as the case may be, may
petition any court of competent jurisdiction for the appointment
of a successor Collateral Agent or Custodial Agent, as the case
may be. Each of the Collateral Agent and the Custodial Agent
shall be a bank which has an office in New York, New York with a
combined capital and surplus of at least $75,000,000. Upon the
acceptance of any appointment as Collateral Agent or Custodial
Agent, as the case may be, hereunder by a successor Collateral
Agent or Custodial Agent, as the case may be, such successor
shall thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Collateral Agent or
Custodial Agent, as the case may be, and the retiring Collateral
Agent or Custodial Agent, as the case may be, shall take all
appropriate action to transfer any money and property held by it
hereunder (including the Collateral) to such successor. The
retiring Collateral Agent or Custodial Agent shall, upon such
succession, be discharged from its duties and obligations as
Collateral Agent or Custodial Agent hereunder. After any retiring
Collateral Agent's or Custodial Agent's resignation hereunder as
Collateral Agent or Custodial Agent, the provisions of this
Section 8 shall continue in effect for its benefit in respect of
any actions taken or omitted to be taken by it while it was
acting as the Collateral Agent or Custodial Agent. Any
resignation or removal of the Collateral Agent hereunder shall be
deemed for all purposes of this Agreement as the simultaneous
resignation or removal of the Custodial Agent and the Securities
Intermediary.
Section 8.9. Right to Appoint Agent or Advisor. The
Collateral Agent shall have the right to appoint agents or
advisors in connection with any of its duties hereunder, and the
Collateral Agent shall not be liable for any action taken or
omitted by, or in reliance upon the advice of, such agents or
advisors selected in good faith. The appointment of agents
pursuant to this Section 8.9 shall be subject to prior consent of
the Company, which consent shall not be unreasonably withheld.
Section 8.10. Survival. The provisions of this Section
8 shall survive termination of this Agreement and the resignation
or removal of the Collateral Agent or the Custodial Agent.
Section 8.11. Exculpation. Anything in this Agreement
to the contrary notwithstanding, in no event shall any of the
Collateral Agent, the Custodial Agent or the Securities
Intermediary or their officers, employees or agents be liable
under this Agreement to any third party for indirect, special,
punitive, or consequential loss or damage of any kind whatsoever,
including lost profits, whether or not the likelihood of such
loss or damage was known to the Collateral Agent, the Custodial
Agent or the Securities Intermediary, or any of them, incurred
without any act or deed that is found to be attributable to gross
negligence or willful misconduct on the part of the Collateral
Agent, the Custodial Agent or the Securities Intermediary.
Section 9. Amendment.
Section 9.1. Amendment Without Consent of Holders.
Without the consent of any Holders or the holders of any Separate
Debt Securities, the Company, the Collateral Agent, the Custodial
Agent, the Securities Intermediary and the Purchase Contract
Agent, at any time and from time to time, may amend this
Agreement, in form satisfactory to the Company, the Collateral
Agent, the Custodial Agent, the Securities Intermediary and the
Purchase Contract Agent, for any of the following purposes:
(1) to evidence the succession of another Person
to the Company, and the assumption by any such
successor of the covenants of the Company; 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 so long as such
covenants or such surrender do not adversely affect the
validity, perfection or priority of the security
interests granted or created hereunder; or
(3) to evidence and provide for the acceptance of
appointment hereunder by a successor Collateral Agent,
Securities Intermediary or Purchase Contract Agent; or
(4) to cure any ambiguity, to correct or
supplement any provisions herein which may be
inconsistent with any other such provisions herein, or
to make any other provisions with respect to such
matters or questions arising under this Agreement,
provided such action shall not adversely affect the
interests of the Holders.
Section 9.2. Amendment with Consent of Holders. With
the consent of the Holders of not less than a majority of the
Purchase Contracts at the time outstanding, by Act of said
Holders delivered to the Company, the Purchase Contract Agent or
the Collateral Agent, as the case may be, the Company, when duly
authorized, the Purchase Contract Agent, the Collateral Agent,
the Custodial Agent and the Securities Intermediary may amend
this Agreement for the purpose of modifying in any manner the
provisions of this Agreement or the rights of the Holders in
respect of the Securities; provided, however, that no such
supplemental agreement shall, without the consent of the Holder
of each Outstanding Security adversely affected thereby,
(1) change the amount or type of Collateral
underlying a Security (except for the rights of holders
of Type A Securities to substitute the Treasury
Securities for the Pledged Debt Securities or the
appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, or the rights
of Holders of Type B Securities to substitute Debt
Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as applicable, for
the Pledged Treasury Securities), impair the right of
the Holder of any Security to receive distributions on
the underlying Collateral or otherwise adversely affect
the Holder's rights in or to such Collateral; or
(2) otherwise effect any action that would require
the consent of the Holder of each Outstanding Security
affected thereby pursuant to the Purchase Contract
Agreement if such action were effected by an agreement
supplemental thereto; or
(3) reduce the percentage of Purchase Contracts
the consent of whose Holders is required for any such
amendment.
It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed amendment,
but it shall be sufficient if such Act shall approve the
substance thereof.
Section 9.3. Execution of Amendments. In executing any
amendment permitted by this Section, the Collateral Agent, the
Custodial Agent, the Securities Intermediary and the Purchase
Contract Agent shall be entitled to receive and (subject to
Section 6.1 hereof, with respect to the Collateral Agent, and
Section 7.1 of the Purchase Contract Agreement, with respect to
the Purchase Contract Agent) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such
amendment is authorized or permitted by this Agreement and that
all conditions precedent, if any, to the execution and delivery
of such amendment have been satisfied.
Section 9.4. Effect of Amendments. Upon the execution
of any amendment under this Section 9, this Agreement shall be
modified in accordance therewith, and such amendment shall form a
part of this Agreement for all purposes; and every Holder of
Certificates theretofore or thereafter authenticated, executed on
behalf of the Holders and delivered under the Purchase Contract
Agreement shall be bound thereby.
Section 9.5. Reference to Amendments. Security
Certificates authenticated, executed on behalf of the Holders and
delivered after the execution of any amendment pursuant to this
Section may, and shall if required by the Collateral Agent or the
Purchase Contract Agent, bear a notation in form approved by the
Purchase Contract Agent and the Collateral Agent as to any matter
provided for in such amendment. If the Company shall so
determine, new Security Certificates so modified as to conform,
in the opinion of the Collateral Agent, the Purchase Contract
Agent and the Company, to any such amendment may be prepared and
executed by the Company and authenticated, executed on behalf of
the Holders and delivered by the Purchase Contract Agent in
accordance with the Purchase Contract Agreement in exchange for
Outstanding Security Certificates.
Section 10. Miscellaneous.
Section 10.1. No Waiver. No failure on the part of the
Collateral Agent or any of its agents to exercise, and no course
of dealing with respect to, and no delay in exercising, any
right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise by the
Collateral Agent or any of its agents of any right, power or
remedy hereunder preclude any other or further exercise thereof
or the exercise of any other right, power or remedy. The remedies
herein are cumulative and are not exclusive of any remedies
provided by law.
Section 10.2. Governing Law. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK. Without limiting the foregoing, the above
choice of law is expressly agreed to by the Company, the
Securities Intermediary, the Custodial Agent, the Collateral
Agent and the Holders from time to time acting through the
Purchase Contract Agent, as their attorney-in-fact, in connection
with the establishment and maintenance of the Collateral Account.
The Company, the Collateral Agent and the Holders from time to
time of the Securities, acting through the Purchase Contract
Agent as their attorney-in-fact, hereby submit to the
nonexclusive jurisdiction of the United States District Court for
the Southern District of New York and of any New York state court
sitting in New York City for the purposes of all legal
proceedings arising out of or relating to this Agreement or the
transactions contemplated hereby. The Company, the Collateral
Agent and the Holders from time to time of the Securities, acting
through the Purchase Contract Agent as their attorney-in-fact,
irrevocably waive, to the fullest extent permitted by applicable
law, any objection which they may now or hereafter have to the
laying of the venue of any such proceeding brought in such a
court and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum.
Section 10.3. Notices. All notices, requests, consents
and other communications provided for herein (including, without
limitation, any modifications of, or waivers or consents under,
this Agreement) shall be given or made in writing (including,
without limitation, by telecopy) delivered to the intended
recipient at the "Address for Notices" specified below its name
on the signature pages hereof or, as to any party, at such other
address as shall be designated by such party in a notice to the
other parties. Except as otherwise provided in this Agreement,
all such communications shall be deemed to have been duly given
when transmitted by telecopier or personally delivered or, in the
case of a mailed notice, upon receipt, in each case given or
addressed as aforesaid.
Section 10.4. Successors and Assigns. This Agreement
shall be binding upon and inure to the benefit of the respective
successors and assigns of the Company, the Collateral Agent, the
Custodial Agent, the Securities Intermediary and the Purchase
Contract Agent, and the Holders from time to time of the
Securities, by their acceptance of the same, shall be deemed to
have agreed to be bound by the provisions hereof and to have
ratified the agreements of, and the grant of the Pledge hereunder
by, the Purchase Contract Agent.
Section 10.5. Counterparts. This Agreement may be
executed in any number of counterparts, all of which taken
together shall constitute one and the same instrument, and any of
the parties hereto may execute this Agreement by signing any such
counterpart.
Section 10.6. Severability. If any provision hereof is
invalid and unenforceable in any jurisdiction, then, to the
fullest extent permitted by law, (i) the other provisions hereof
shall remain in full force and effect in such jurisdiction and
shall be liberally construed in order to carry out the intentions
of the parties hereto as nearly as may be possible and (ii) the
invalidity or unenforceability of any provision hereof in any
jurisdiction shall not affect the validity or enforceability of
such provision in any other jurisdiction.
Section 10.7. Expenses, etc. The Company agrees to
reimburse the Collateral Agent and the Custodial Agent for: (a)
all reasonable out-of-pocket costs and expenses of the Collateral
Agent and the Custodial Agent (including, without limitation, the
reasonable fees and expenses of the necessary services of a
Securities Intermediary and of counsel to the Collateral Agent
and the Custodial Agent), in connection with (i) the negotiation,
preparation, execution and delivery or performance of this
Agreement and (ii) any modification, supplement or waiver of any
of the terms of this Agreement; (b) all reasonable costs and
expenses of the Collateral Agent (including, without limitation,
reasonable fees and expenses of counsel) in connection with (i)
any enforcement or proceedings resulting or incurred in
connection with causing any Holder of Securities to satisfy its
obligations under the Purchase Contracts forming a part of the
Securities and (ii) the enforcement of this Section 10.7; and (c)
all transfer, stamp, documentary or other similar taxes,
assessments or charges levied by any governmental or revenue
authority in respect of this Agreement or any other document
referred to herein and all costs, expenses, taxes, assessments
and other charges incurred in connection with any filing,
registration, recording or perfection of any security interest
contemplated hereby.
Section 10.8. Security Interest Absolute. All rights
of the Collateral Agent and security interests hereunder, and all
obligations of the Holders from time to time hereunder, shall be
absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of any
provision of the Purchase Contracts or the Securities
or any other agreement or instrument relating thereto;
(b) any change in the time, manner or place of
payment of, or any other term of, or any
increase in the amount of, all or any of the
obligations of Holders of Securities under the related
Purchase Contracts, or any other amendment or waiver of
any term of, or any consent to any departure from any
requirement of, the Purchase Contract Agreement or any
Purchase Contract or any other agreement or instrument
relating thereto; or
(c) any other circumstance which might otherwise
constitute a defense available to, or discharge of, a
borrower, a guarantor or a pledgor.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above
written.
TEXAS UTILITIES COMPANY
By:
------------------------------
Name:
Title:
Address for Notices:
Texas Utilities Company
0000 Xxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attention: Treasurer
Telecopy:
,
-------------------------
as Purchase Contract Agent and as
attorney-in-fact of the Holders from
time to time of the Securities
By:
------------------------------
Name:
Title:
Address for Notices:
,
------------------------------
as Collateral Agent, Custodial
Agent and as Securities Intermediary
By:
----------------------------
Name:
Title:
Address for Notices:
EXHIBIT A
INSTRUCTION FROM PURCHASE CONTRACT AGENT TO COLLATERAL AGENT
Re: Securities of Texas Utilities Company (the "Company")
We hereby notify you in accordance with Section [4.1]
[4.2] of the Pledge Agreement, dated as of , 1998, (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 [Type A Securities] [Type B Securities] from time to
time, that the holder of Securities listed below (the "Holder")
has elected to substitute [$ principal amount of Treasury
-----
Securities] [$ principal amount of Debt Securities or
-------
Stated Amount of the appropriate Applicable Ownership Interest of
the Treasury Portfolio] in exchange for an equal Value of
[Pledged Debt Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio] [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] [Debt Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio] to you,
as Collateral Agent. We hereby instruct you, upon receipt of such
[Pledged Treasury Securities] [Pledged Debt Securities or the
appropriate Applicable Ownership Interest of the Treasury
Portfolio], to release the [Debt Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio]
[Treasury Securities] related to such [Type A Securities] [Type B
Securities] 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:
---------
Please print name and address of Registered Holder electing to
substitute [Treasury Securities] [Debt Securities or the
appropriate Applicable Ownership Interest of the Treasury
Portfolio] for the [Pledged Debt Securities or the Treasury
Portfolio] [Pledged Treasury Securities]:
________________________ __________________________________
Name Social Security or other Taxpayer
Identification Number, if any
Address
--------------------------------
--------------------------------
--------------------------------
EXHIBIT B
INSTRUCTION TO PURCHASE CONTRACT AGENT
Re: Securities of Texas Utilities Company (the "Company")
The undersigned Holder hereby notifies you that it has
delivered to , as Collateral Agent,
-------------------------
[$ principal amount of Treasury Securities] [$
------- ---------
principal amount of Debt Securities or Stated Amount of the
appropriate Applicable Ownership Interest of the Treasury
Portfolio] in exchange for an equal Value of [Pledged Debt
Securities or the appropriate Applicable Ownership Interest
of the Treasury Portfolio] [Pledged Treasury Securities] held
by the Collateral Agent, in accordance with Section 4.1 of the
Pledge Agreement, dated , 1998 (the "Pledge Agreement"),
--------
between you, the Company and the Collateral Agent. The undersigned
Holder hereby instructs you to instruct the Collateral Agent to
release to you on behalf of the undersigned Holder the [Pledged
Debt Securities or the appropriate Applicable Ownership Interest
of the Treasury Portfolio] [Pledged Treasury Securities] related
to such [Type A Securities] [Type B Securities]. 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
Address
-------------------------------
-------------------------------
-------------------------------
EXHIBIT C
INSTRUCTION TO CUSTODIAL AGENT REGARDING REMARKETING
Re: Securities of Texas Utilities Company (the "Company")
The undersigned hereby notifies you in accordance with
Section 4.6(c) of the Pledge Agreement, dated as of ,
--------
1998 (the "Pledge Agreement"), among the Company, yourselves, as
Collateral Agent, Securities Intermediary and Custodial Agent,
and , as Purchase Contract Agent and as
--------------
attorney-in-fact for the Holders of Type A Securities and Type B
Securities from time to time, that the undersigned elects to
deliver $ principal amount of Debt Securities for
--------
delivery to the Remarketing Agent on the fourth Business Day
immediately preceding the Purchase Contract Settlement Date for
remarketing pursuant to Section 4.6(c) of the Pledge Agreement.
The undersigned will, upon request of the Remarketing Agent,
execute and deliver any additional documents deemed by the
Remarketing Agent or by the Company to be necessary or desirable
to complete the sale, assignment and transfer of the Debt
Securities tendered hereby.
The undersigned hereby instructs you, upon receipt of
the Proceeds of such remarketing from the Remarketing Agent to
deliver such Proceeds to the undersigned in accordance with the
instructions indicated herein under "A. Payment Instructions".
The undersigned hereby instructs you, in the event of Failed
Remarketing, upon receipt of the Debt Securities tendered
herewith from the Remarketing Agent, to deliver such Debt
Securities to the person(s) and the address(es) indicated herein
under "B. Delivery Instructions."
With this notice, the undersigned hereby (i) represents
and warrants that the undersigned has full power and authority to
tender, sell, assign and transfer the Debt Securities tendered
hereby and that the undersigned is the record owner of any Debt
Securities tendered herewith in physical form or a participant in
The Depositary Trust Company ("DTC") and the beneficial owner of
any Debt Securities tendered herewith by book-entry transfer to
your account at DTC and (ii) agrees to be bound by the terms and
conditions of Section 4.6(c) of the Pledge Agreement. Capitalized
terms used herein but not defined shall have the meaning set
forth in the Pledge Agreement.
Date:___________________________ _____________________________
By:
--------------------------
Name:
Title:
Signature Guarantee:
------
Please print name and address:
-------------------------- -----------------------------
Name Social Security or other Taxpayer
Identification Number, if any
Address
---------------------------------
---------------------------------
---------------------------------
A. PAYMENT INSTRUCTIONS B. DELIVERY INSTRUCTIONS
Proceeds of the remarketing In the event of a Failed
should be paid by check in the Remarketing, Debt
name of the person(s) set Securities which are in
forth below and mailed to the physical form should be
address set forth below. delivered to the person(s)
set forth below and mailed
Name(s) to the address set forth
below.
------------------------------
(Please Print) Name(s)
Address ---------------------------
(Please Print)
------------------------------
Address
------------------------------
(Please Print) ---------------------------
---------------------------
------------------------------ (Please Print)
(Zip Code)
---------------------------
------------------------------ (Zip Code)
(Tax Identification or Social
Security Number)
---------------------------
(Tax Identification or
Social Security Number)
In the event of a Failed
Remarketing, Debt
Securities which are in
book-entry form should be
credited to the account at
The Depositary Trust
Company set forth below.
----------------------
DTC Account Number
Name of Account
Party:
---------------------
EXHIBIT D
INSTRUCTION TO CUSTODIAL AGENT REGARDING
WITHDRAWAL FROM REMARKETING
Re: Securities of Texas Utilities Company (the "Company")
The undersigned hereby notifies you in accordance with
Section 4.6(c) of the Pledge Agreement, dated as of ,
---------
1998 (the "Pledge Agreement") among the Company, yourselves, as
Collateral Agent, Securities Intermediary and Custodial Agent and
, as Purchase Contract Agent
and as attorney-in-fact for the Holders of Type A Securities and
Type B Securities from time to time, that the undersigned elects
to withdraw the $ principal amount of Debt Securities
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delivered to the Custodial Agent on for remarketing
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pursuant to Section 4.6(c) of the Pledge Agreement. The
undersigned hereby instructs you to return such Debt Securities
to the undersigned in accordance with the undersigned's
instructions. With this notice, the Undersigned hereby agrees to
be bound by the terms and conditions of Section 4.6(c) of the
Pledge Agreement. Capitalized terms used herein but not defined
shall have the meaning set forth in the Pledge Agreement.
Date:
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By:
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Name:
Title:
Signature Guarantee:___________
Please print name and address:
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Name Social Security or other Taxpayer
Identification Number, if any
Address
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