EXHIBIT 0-000
XXX ENERGY COMPANY,
THE BANK OF NEW YORK,
AS COLLATERAL AGENT, CUSTODIAL AGENT
AND SECURITIES INTERMEDIARY
AND
THE BANK OF NEW YORK,
AS PURCHASE CONTRACT AGENT
PLEDGE AGREEMENT
DATED AS OF JUNE 25, 2002
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions..................................................................................2
ARTICLE II
PLEDGE; CONTROL AND PERFECTION
SECTION 2.1 The Pledge...................................................................................4
SECTION 2.2 Control and Perfection.......................................................................5
ARTICLE III
PAYMENTS ON PLEDGED COLLATERAL
SECTION 3.1 Payments.....................................................................................7
SECTION 3.2 Application of Payments......................................................................8
ARTICLE IV
SUBSTITUTION, RELEASE, REPLEDGE AND SETTLEMENT OF NOTES
SECTION 4.1 Collateral Substitution and the Creation of Stripped Equity Security Units...................9
SECTION 4.2 Collateral Substitution and the Re-Creation of Equity Security Units.........................9
SECTION 4.3 Termination Event...........................................................................10
SECTION 4.4 Early Settlement; Merger Early Settlement; Cash Settlement..................................11
SECTION 4.5 Remarketing: Application of Proceeds: Settlement............................................11
ARTICLE V
VOTING RIGHTS -- NOTES
SECTION 5.1 Exercise by Purchase Contract Agent.........................................................13
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PAGE
ARTICLE VI
RIGHTS AND REMEDIES; TAX EVENT REDEMPTION
SECTION 6.1 Rights and Remedies of the Collateral Agent.................................................14
SECTION 6.2 Substitutions...............................................................................15
SECTION 6.3 Tax Event Redemption........................................................................15
ARTICLE VII
REPRESENTATIONS AND WARRANTIES; COVENANTS
SECTION 7.1 Representations and Warranties..............................................................16
SECTION 7.2 Covenants...................................................................................16
ARTICLE VIII
THE COLLATERAL AGENT
SECTION 8.1 Appointment, Powers and Immunities..........................................................17
SECTION 8.2 Instructions of the Company.................................................................18
SECTION 8.3 Reliance....................................................................................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 and Removal.....................................................................21
SECTION 8.9 Right to Appoint Agent or Advisor...........................................................22
SECTION 8.10 Survival....................................................................................22
SECTION 8.11 Exculpation.................................................................................22
ARTICLE IX
AMENDMENT
SECTION 9.1 Amendment Without Consent of Holders........................................................22
SECTION 9.2 Amendment with Consent of Holders...........................................................23
SECTION 9.3 Execution of Amendments.....................................................................24
SECTION 9.4 Effect of Amendments........................................................................24
SECTION 9.5 Reference to Amendments.....................................................................24
ARTICLE X
MISCELLANEOUS
SECTION 10.1 No Waiver...................................................................................24
SECTION 10.2 Governing Law...............................................................................25
SECTION 10.3 Notices.....................................................................................25
SECTION 10.4 Successors and Assigns......................................................................25
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PAGE
SECTION 10.5 Counterparts................................................................................26
SECTION 10.6 Severability................................................................................26
SECTION 10.7 Expenses Etc................................................................................26
SECTION 10.8 Security Interest Absolute..................................................................26
SECTION 10.9 Waiver of Jury Trial........................................................................27
EXHIBIT A Instruction from Purchase Contract Agent 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
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PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of June 25, 2002 (this "Agreement"), among
DTE ENERGY COMPANY, a Michigan corporation (the "Company"), THE BANK OF NEW
YORK, a New York banking corporation, not individually but solely as collateral
agent (in such capacity, together with its successors in such capacity, the
"Collateral Agent"), as custodial agent (in such capacity, together with its
successors in such capacity, the "Custodial Agent") and as "securities
intermediary" as defined in Section 8-102(a)(14) of the Code (as defined herein)
(in such capacity, together with its successors in such capacity, the
"Securities Intermediary"), and THE BANK OF NEW YORK, a New York banking
corporation, not individually but solely as purchase contract agent and as
attorney-in-fact of the Holders from time to time of the Equity Security Units
and Stripped Equity Security Units (in such capacity, together with its
successors in such capacity, the "Purchase Contract Agent") under the Purchase
Contract Agreement (as defined herein).
RECITALS
WHEREAS, the Company and the Purchase Contract Agent are parties to the
Purchase Contract Agreement, dated as of the date hereof (as modified and
supplemented and in effect from time to time, the "Purchase Contract
Agreement"), pursuant to which there may be issued 6,000,000 Equity Security
Units of the Company (or 6,900,000 Equity Security Units if the Underwriters
exercise their over-allotment option in full) each having a Stated Amount of
$25.
WHEREAS, each Equity Security Unit will be comprised of (a) a Purchase
Contract and (b) either beneficial ownership of (i) a Note, (ii) following the
successful remarketing of the Notes in accordance with the Purchase Contract
Agreement and the Remarketing Agreement, the appropriate Applicable Ownership
Interest in the Treasury Portfolio or (iii) following a Tax Event Redemption in
accordance with the Purchase Contract Agreement, the appropriate Applicable
Ownership Interest in the Tax Event Treasury Portfolio.
WHEREAS, in accordance with the terms of the Purchase Contract
Agreement, a holder of Equity Security Units may separate the Notes from the
related Purchase Contracts by substituting for such Notes Treasury Securities
that will pay in the aggregate an amount equal to the aggregate principal amount
of such Equity Security Units. Upon such separation, the Equity Security Units
will become Stripped Equity Security Units. Each Stripped Equity Security Unit
will be comprised of (a) a Purchase Contract and (b) a 1/40 undivided beneficial
interest in a Treasury Security.
WHEREAS, pursuant to the terms of the Purchase Contract Agreement and
the Purchase Contracts, the Holders, from time to time, of the Equity Security
Units and Stripped Equity Security Units have irrevocably authorized the
Purchase Contract Agent, as attorney-in-fact of such Holders, among other
things, to execute and deliver this Agreement on behalf of such Holders and to
grant the pledge provided hereby of the Notes, any Treasury Securities and any
Applicable Ownership Interest in the Treasury Portfolio or Tax Event Treasury
Portfolio, as the case may be, delivered in exchange therefor to secure each
Holder's obligations under the related Purchase Contract, as provided herein and
subject to the terms hereof.
NOW, THEREFORE, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, 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 Equity Security Units and Stripped Equity
Security Units, agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions.
For all purposes of this agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) capitalized terms used but not defined herein are used as defined
in the Purchase Contract Agreement;
(b) the defined terms in this Agreement have the meanings assigned to
them in this Article and include the plural as well as the singular; and
(c) the words "herein," ""hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision.
"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.
"Code" has the meaning specified in Section 6.1(a) hereof.
"Collateral" has the meaning specified in Section 2.1(a) hereof.
"Collateral Account" means the securities account (number 016352)
maintained at The Bank of New York in the name "The Bank of New York, a New York
banking corporation, as Purchase Contract Agent on behalf of the holders of
certain securities of DTE Energy Company, Collateral Account subject to the
security interest of The Bank of New York, as Collateral Agent, for the benefit
of DTE Energy Company, as pledgee" and any successor account.
"Collateral Agent" has the meaning specified in the first paragraph of
this Agreement
"Company" means the Person named as the "Company" in the first
paragraph of this Agreement until a successor shall have become such pursuant to
the applicable provisions of the Purchase Contract Agreement, and thereafter
"Company" shall mean such successor.
"Custodial Agent" has the meaning specified in the first paragraph of
this Agreement.
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"Intermediary" means any entity that in the ordinary course of its
business maintains securities accounts for others and is acting in that
capacity.
"Pledge" has the meaning specified in Section 2.1 hereof.
"Pledged Applicable Ownership Interest in the Treasury Portfolio" has
the meaning specified in Section 2.1(c) hereof.
"Pledged Applicable Ownership Interest in the Tax Event Treasury
Portfolio" has the meaning specified in Section 2.1(c) hereof.
"Pledged Notes" has the meaning specified in Section 2.1(c) hereof.
"Pledged Treasury Securities" has the meaning specified in Section
2.1(c) 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 Agent" has the meaning specified in the first
paragraph of this Agreement.
"Purchase Contract Agreement" has the meaning specified in the
Recitals.
"Securities Intermediary" has the meaning specified in the first
paragraph of this Agreement.
"Security Entitlement" has the meaning set forth in Section
8-102(a)(17) of the Code.
"Separate Notes" means any Notes that are not Pledged Notes.
"Tax Event Redemption Date" means the date upon which a Tax Event
Redemption is to occur.
"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;
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(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 (a) 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 (b) 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. In addition, any Transfer of Treasury Securities and
appropriate Applicable Ownership Interest in the Treasury Portfolio or
Tax Event Treasury Portfolio hereunder shall be made in accordance with
the TRADES Regulations and other applicable law.
ARTICLE II
PLEDGE; CONTROL AND PERFECTION
SECTION 2.1 The Pledge.
(a) The Holders from time to time acting through the Purchase Contract
Agent, as their attorney-in-fact, and the Purchase Contract Agent, as such
attorney-in-fact and as nominal owner of the Collateral, hereby pledge and grant
to the Collateral Agent, for the benefit of the Company, as collateral security
for the performance when due by such Holders of their respective obligations
under the related Purchase Contracts, a security interest in all of the right,
title and interest of the Purchase Contract Agent and such Holders in:
(i) (A) the Notes and any Applicable Ownership Interest in the
Treasury Portfolio or Tax Event Treasury Portfolio, as the case may be,
constituting a part of the Equity Security Units, or the Treasury
Securities constituting a part of the Stripped Equity Security Units,
(B) any Treasury Securities delivered in exchange for any Notes in
accordance with Section 4.1 hereof, and (C) any Notes delivered in
exchange for any Treasury Securities in accordance with Section 4.2
hereof, in each case that have been Transferred to or otherwise
received by the Collateral Agent and not released by the Collateral
Agent to such Holders under the provisions of this Agreement;
(ii) the Collateral Account and all securities, financial
assets, security entitlements, cash and other property credited thereto
and all Security Entitlements related thereto; and
(iii) all Proceeds of the foregoing (all of the foregoing,
collectively, the "Collateral").
(b) Prior to or concurrently with the execution and delivery of this
Agreement, the Purchase Contract Agent, on behalf of the initial Holders of the
Equity Security Units, shall cause the Notes comprising a part of the Equity
Security Units to be Transferred to the Securities Intermediary for credit to
the Collateral Account.
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(c) The pledge provided in this Section 2.1 is herein referred to as
the "Pledge" and the Notes (or the Notes that are delivered pursuant to Section
6.2 hereof), Treasury Securities or Applicable Ownership Interest in the
Treasury Portfolio or Tax Event Treasury Portfolio, as the case may be, subject
to the Pledge, excluding any Notes or Treasury Securities released from the
Pledge as provided in Sections 4.1 and 4.2 hereof, respectively, are hereinafter
referred to as "Pledged Notes," "Pledged Treasury Securities," "Pledged
Applicable Ownership Interest in the Treasury Portfolio," or "Pledged Applicable
Ownership Interest in the Tax Event Treasury Portfolio," 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. 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. Whenever directed by the Collateral Agent acting on
behalf of the Company, the Securities Intermediary shall have the right to
re-register in its name the Notes or any other securities held in physical form.
(d) Except as may be required in order to release Notes in connection
with a Tax Event Redemption or with a Holder's election to convert its
investment from an Equity Security Unit to a Stripped Equity Security Unit, or
except as otherwise required to release Notes as specified herein, neither the
Collateral Agent, the Custodial Agent nor the Securities Intermediary shall
relinquish physical possession of any certificate evidencing a Note 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 Notes evidenced thereby from the Pledge, the Company or
the Purchase Contract Agent shall use its best efforts to obtain physical
possession of a replacement certificate evidencing any Notes remaining subject
to the Pledge hereunder registered to the Securities Intermediary or endorsed in
blank within fifteen days of the date the Securities Intermediary relinquished
possession. The Securities Intermediary shall promptly notify the Company and
the Collateral Agent of the Securities Intermediary's failure to obtain
possession of any such replacement certificate as required hereby.
SECTION 2.2 Control and Perfection.
(a) In connection with the Pledge granted in Section 2.1, and subject
to the other provisions of this Agreement, the Holders from time to time acting
through the Purchase Contract Agent, as their attorney-in-fact, and the Purchase
Contract Agent as nominal owner of the Collateral 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 may deliver with respect to the Collateral Account, the
Collateral credited thereto and any Security Entitlements with respect to any
thereof. In the event the Securities Intermediary receives from the Holders or
the Purchase Contract Agent entitlement orders which conflict with entitlement
orders received from the Collateral Agent, the Securities Intermediary shall
follow the entitlement orders received from the Collateral Agent. Such
instructions and entitlement orders may, without limitation, direct the
Securities Intermediary to transfer, redeem, assign, or otherwise deliver the
Notes, the Treasury Securities, any Applicable Ownership Interest in the
Treasury Portfolio or the Tax
5
Event Treasury Portfolio, as the case may be, and any Security Entitlements with
respect thereto or sell, liquidate or dispose of such assets through a broker
designated by the Company, 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 only in accordance with the terms hereof or as otherwise directed in writing
by the Company. Without limiting the generality of the foregoing, the Collateral
Agent shall issue entitlement orders to the Securities Intermediary as directed
in writing 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, or its nominee, indorsed to the
Securities Intermediary, or its nominee, 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, or payable to
the order of, or specially indorsed to, the Purchase Contract Agent,
the Collateral Agent, the Company or any Holder except to the extent
the foregoing have been specially indorsed to the Securities
Intermediary or in blank;
(ii) all property delivered to the Securities Intermediary
pursuant to this Pledge Agreement (including, without limitation, any
Notes, Treasury Securities or any Applicable Ownership Interest in the
Treasury Portfolio or Tax Event Treasury Portfolio, as the case may be)
will be promptly credited to the Collateral Account;
(iii) the Collateral Account is an account to which financial
assets are or may be credited, and the Securities Intermediary shall,
subject to the terms of this Agreement, treat the Purchase Contract
Agent as entitled to exercise the rights of any financial asset
credited to the Collateral Account;
(iv) the Securities Intermediary has not entered into, and
until the termination of this Agreement will not enter into, any
agreement with any other Person relating to the Collateral Account
and/or any financial assets credited thereto pursuant to which it has
agreed to comply with entitlement orders (as defined in Section
8-102(a)(8) of the Code) of such other Person;
(v) the Securities Intermediary has not entered into, and
until the termination of this Agreement will not enter into, any
agreement with the Company, the Collateral Agent or the Purchase
Contract Agent purporting to limit or condition the obligation of
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the Securities Intermediary to comply with entitlement orders as set
forth in this Section 2.2 hereof;
(vi) 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; and
(vii) 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.
(c) The Purchase Contract Agent hereby irrevocably constitutes and
appoints the Collateral Agent and the Company, with full power of substitution,
as the Purchase Contract Agent's attorney-in-fact to take on behalf of, and in
the name, place and stead of, the Purchase Contract Agent and the Holders, any
action necessary or desirable to perfect and to keep perfected the security
interest in the Collateral referred to in Section 2.1. The grant of such
power-of-attorney shall not be xxxx xx to require of the Collateral Agent any
specific duties or obligations not otherwise assumed by the Collateral Agent
hereunder. Notwithstanding the foregoing, in no event shall the Collateral Agent
or Securities Intermediary be responsible for the preparation or filing of any
financing or continuation statements in the appropriate jurisdictions or
responsible for maintenance or perfection of any security interest hereunder.
ARTICLE III
PAYMENTS ON PLEDGED COLLATERAL
SECTION 3.1 Payments.
So long as the Purchase Contract Agent is the registered owner of the
Pledged Notes, Pledged Applicable Ownership Interest in the Tax Event Treasury
Portfolio, Pledged Applicable Ownership Interest in the Treasury Portfolio or
Pledged Treasury Securities, it shall receive all payments thereon. If the
Pledged Notes are reregistered, such that the Collateral Agent becomes the
registered holder, all payments of the principal of, or interest on, the Pledged
Notes and all payments of the principal of, or cash distributions on, any
Pledged Applicable Ownership Interest in the Tax Event Treasury Portfolio,
Pledged Treasury Securities or any Pledged Applicable Ownership Interest in the
Treasury Portfolio, that are received by the Collateral Agent and 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) quarterly cash distributions on Equity
Security Units that include Pledged Notes, any Pledged Applicable
Ownership Interest in the Tax Event Treasury Portfolio or any Pledged
Applicable Ownership Interest in the Treasury Portfolio, any interest
payments with respect to the Pledged Notes or the appropriate Pledged
Applicable Ownership Interest in the Treasury Portfolio or the Tax
Event Treasury Portfolio (in each case, as specified in clause (B) of
the definition of Applicable
7
Ownership Interest), as the case may be, and (B) any payments of
principal or, if applicable, the appropriate Applicable Ownership
Interest in the Treasury Portfolio or the Tax Event Treasury Portfolio
(in each case, as specified in clause (A) of the definition of such
term), as the case may be, with respect to any Notes, or the
appropriate Applicable Ownership Interest in the Treasury Portfolio or
the Tax Event 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 the
Equity Security Units, to the account designated by the Purchase
Contract Agent for such purpose, no later than 11:00 a.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
9:00 a.m., New York City time, on a Business Day, then such payment
shall be made no later than 11:00 a.m., New York City time, on the next
succeeding Business Day);
(ii) in the case of any 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 Stripped Equity Security Units to the
accounts designated by them in writing for such purpose no later than
2:00 p.m., New York City time, on the Business Day such payment is
received by the Collateral Agent (provided that in the event such
payment is received by the Collateral Agent on a day that is not a
Business Day or after 10 a.m., New York City time, on a Business Day,
then such payment shall be made no later than 11:00 a.m., New York City
time, on the next succeeding Business Day); and
(iii) in the case of payments in respect of any Pledged Notes,
Pledged Treasury Securities or the appropriate Pledged Applicable
Ownership Interest in the Treasury Portfolio or Tax Event Treasury
Portfolio (in each case, as specified in clause (A) of the definition
of Applicable Ownership Interest), as the case may be, to be paid upon
settlement of such Holder's obligations to purchase Common Stock under
the Purchase Contract, to the Company on the Stock Purchase Date in
accordance with the procedure set forth in Section 4.5(a) or 4.5(b)
hereof, in full satisfaction of the respective obligations of the
Holders under the related Purchase Contracts.
SECTION 3.2 Application of Payments.
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 principal on account of any Note or
the appropriate Applicable Ownership Interest in the Treasury Portfolio or Tax
Event Treasury Portfolio (in each case, as specified in clause (A) of the
definition of Applicable Ownership Interest), as applicable, that, at the time
of such payment, is a Pledged Note, appropriate Pledged Applicable Ownership
Interest in the Treasury Portfolio or appropriate Pledged Applicable Ownership
Interest in the Tax Event Treasury Portfolio (in each case, as specified in
clause (A) of the definition of Applicable Ownership Interest), as the case may
be, or the Purchase Contract Agent 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 shall hold the same as
trustee of an express trust for the benefit of the
8
Company (and promptly deliver the same over to the Company) for application to
the obligations of the Holders under the related Purchase Contracts, and the
Holders shall acquire no right, title or interest in any such payments of
principal so received.
ARTICLE IV
SUBSTITUTION, RELEASE, REPLEDGE AND SETTLEMENT OF NOTES
SECTION 4.1 Collateral Substitution and the Creation of Stripped Equity
Security Units.
At any time prior to the earlier of a successful remarketing of the
Notes in accordance with the provisions of Section 5.4 of the Purchase Contract
Agreement or a Tax Event Redemption Date, a Holder of Equity Security Units
shall have the right to substitute Treasury Securities for the Pledged Notes
securing such Holder's obligations under the Purchase Contracts comprising a
part of such Equity Security Units, in integral multiples of 40 Equity Security
Units, by (a) Transferring to the Collateral Agent Treasury Securities having an
aggregate principal amount at maturity equal to the aggregate Stated Amount of
such Equity Security Units and (b) delivering such Equity Security Units to the
Purchase Contract Agent, accompanied by a notice, substantially in the form of
Exhibit B hereto, to the Purchase Contract Agent stating that such Holder has
caused a Transfer of Treasury Securities to the Collateral Agent pursuant to
clause (a) above (stating the principal amount and the CUSIP numbers of the
Treasury Securities Transferred by such Holder) and requesting that the Purchase
Contract Agent instruct the Collateral Agent to release from the Pledge the
Pledged Notes related to such Equity Security Units, whereupon the Purchase
Contract Agent shall promptly give such instruction in writing to the Collateral
Agent in the form provided in Exhibit A hereto; provided that, notwithstanding
the foregoing, such Holder may not substitute such Treasury Securities for such
Pledged Notes pursuant to this Section 4.1 during any period beginning after
5:00 p.m., New York City time, on the fourth Business Day immediately preceding
the first Business Day of a Remarketing Period and, if applicable, ending at
9:00 a.m., New York City time, on the fourth Business Day immediately succeeding
the third Business Day of such Remarketing Period. Upon receipt of Treasury
Securities from a Holder of Equity Security Units and the related written
instruction from the Purchase Contract Agent, the Collateral Agent shall release
the Pledged Notes and shall promptly Transfer such Pledged Notes, free and clear
of any lien, pledge or security interest created hereby, to the Purchase
Contract Agent. All items Transferred and/or substituted by any Holder pursuant
to this Section 4.1, Section 4.2 or any other Section of this Agreement shall be
Transferred and/or substituted free and clear of all liens, claims and
encumbrances.
SECTION 4.2 Collateral Substitution and the Re-Creation of Equity
Security Units.
At any time prior to the earlier of a successful remarketing of the
Notes in accordance with the provisions of Section 5.4 of the Purchase Contract
Agreement or a Tax Event Redemption Date, a Holder of Stripped Equity Security
Units shall have the right to reestablish Equity Security Units consisting of
the Purchase Contracts and Notes in integral multiples of 40
9
Stripped Equity Security Units by (x) Transferring to the Collateral Agent Notes
in an aggregate principal amount equal to the aggregate principal amount at
maturity of the Treasury Securities comprising part of such Stripped Equity
Security Units and (y) delivering such Stripped Equity Security Units to the
Purchase Contract Agent, accompanied by a notice, substantially in the form of
Exhibit B hereto, to the Purchase Contract Agent stating that such Holder has
Transferred Notes to the Collateral Agent and requesting that the Purchase
Contract Agent instruct the Collateral Agent to release from the Pledge the
Pledged Treasury Securities related to such Stripped Equity Security Units,
whereupon the Purchase Contract Agent shall give such instruction to the
Collateral Agent in the form provided in Exhibit A hereto; provided that,
notwithstanding the foregoing, such Holder of Stripped Equity Security Units
shall not have the right to reestablish Equity Security Units pursuant to this
Section 4.2 during any period beginning after 5:00 p.m., New York City time, on
the fourth Business Day immediately preceding the first Business Day of a
Remarketing Period and, if applicable, ending at 9:00 a.m., New York City time,
on the fourth Business Day immediately succeeding the third Business Day such
Remarketing Period. Upon receipt of the Notes from such Holder and the
instruction from the Purchase Contract Agent, the Collateral Agent shall release
the Pledged Treasury Securities and shall promptly Transfer such Pledged
Treasury Securities, free and clear of any lien, pledge or security interest
created hereby, to the Purchase Contract Agent.
SECTION 4.3 Termination Event.
(a) Upon receipt by the Collateral Agent of written notice from the
Company or the Purchase Contract Agent that there has occurred a Termination
Event, the Collateral Agent shall release all Collateral from the Pledge and
shall promptly Transfer any Pledged Notes, Pledged Applicable Ownership Interest
in the Treasury Portfolio or Pledged Applicable Ownership Interest in the Tax
Event Treasury Portfolio, as the case may be, and Pledged Treasury Securities to
the Purchase Contract Agent for the benefit of the Holders of the Equity
Security Units and the Stripped Equity Security Units, respectively, free and
clear of any lien, pledge or security interest or other interest created hereby.
(b) If such Termination Event shall result from the Company's becoming
a debtor under the Bankruptcy Code, and if the Collateral Agent shall for any
reason fail promptly to effectuate the release and Transfer of all Pledged
Notes, Pledged Applicable Ownership Interest in the Treasury Portfolio, Pledged
Applicable Ownership Interest in the Tax Event Treasury Portfolio, or 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 at the expense of the
Company an opinion of counsel 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 Notes,
Pledged Applicable Ownership Interest in
10
the Treasury Portfolio, Pledged Applicable Ownership Interest in the
Tax Event Treasury Portfolio or Pledged Treasury Securities, as the
case may be, as provided in this Section 4.3, then the Purchase
Contract Agent shall, at the Company's expense and within fifteen days
after the occurrence of such Termination Event, commence an action or
proceeding in the court with jurisdiction of the Company's case under
the Bankruptcy Code seeking an order requiring the Collateral Agent to
effectuate the release and transfer of all Pledged Notes, Pledged
Applicable Ownership Interest in the Treasury Portfolio, Pledged
Applicable Ownership Interest in the Tax Event Treasury Portfolio or
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 Early Settlement; Merger Early Settlement; Cash Settlement.
Upon written notice to the Collateral Agent by the Purchase Contract
Agent that one or more Holders of Equity Security Units or Stripped Equity
Security Units have elected to effect Early Settlement or Merger Early
Settlement or that one or more Holders of Equity Security Units have elected to
effect Cash Settlement, in each case, of their respective obligations under the
Purchase Contracts forming a part of such Equity Security Units or Stripped
Equity Security Units 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,
Merger Early Settlement or Cash Settlement), and that the Purchase Contract
Agent has received from such Holders, and paid to the Company, as confirmed to
the Collateral Agent in writing by the Company, the related Early Settlement
Amounts, Merger Early Settlement Amounts or the Purchase Prices in the case of
the Cash Settlement, as the case may be, pursuant to the terms of the Purchase
Contracts and the Purchase Contract Agreement and that all conditions to such
Early Settlement, Merger Early Settlement or Cash Settlement, as the case may
be, have been satisfied, then the Collateral Agent shall release from the Pledge
(a) Pledged Notes, the appropriate Pledged Applicable Ownership Interest in the
Tax Event Treasury Portfolio or the appropriate Pledged Applicable Ownership
Interest in the Treasury Portfolio, as the case may be, in the case of a Holder
of Equity Security Units effecting Early Settlement or Merger Early Settlement
or (b) Pledged Treasury Securities, in the case of a Holder of Stripped Equity
Security Units effecting Early Settlement or Merger Early Settlement, relating
to such Purchase Contracts as to which such Holders have elected to effect Early
Settlement, Merger Early Settlement or Cash Settlement, and shall Transfer all
such Pledged Notes, Pledged Applicable Ownership Interests in the Treasury
Portfolio, Pledged Applicable Ownership Interest in the Tax Event 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
such Holders.
SECTION 4.5 Remarketing: Application of Proceeds: Settlement.
(a) Pursuant to the Purchase Contract Agreement, the Purchase Contract
Agent shall notify, by 10:00 a.m., New York City time, on the third Business Day
immediately preceding the first Business Day of a Remarketing Period, the
Remarketing Agent and the Collateral Agent of
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the aggregate principal amount of Notes comprising Equity Security Units to be
remarketed. The Collateral Agent shall, by 12:00 p.m., New York City time, on
the third Business Day immediately preceding the first Business Day of a
Remarketing Period, without any instruction from Holders of Equity Security
Units, deliver the Pledged Notes to be remarketed to the Remarketing Agent for
remarketing. After deducting as the remarketing fee an amount not exceeding 25
basis points (0.25%) of the total proceeds of such remarketing of Pledged Notes,
the Remarketing Agent will deliver the Treasury Portfolio purchased from the
proceeds of the remarketing to the Purchase Contract Agent, which shall
thereupon deliver such Treasury Portfolio to the Collateral Agent. Upon receipt
of the Treasury Portfolio from the Purchase Contract Agent following a
successful remarketing, (i) the Collateral Agent, for the benefit of the
Company, shall thereupon hold in the Collateral Account such Treasury Portfolio
to secure the obligations under the Purchase Contracts of Holders of Equity
Security Units and to fund the quarterly interest payment due to such Holders of
Equity Security Units on the Stock Purchase Date, and (ii) the remaining
portion, if any, of the proceeds of such successful remarketing shall be
distributed by the Remarketing Agent to the Purchase Contract Agent for payment
to such Holders of Equity Security Units. On the Stock Purchase Date, the
Collateral Agent shall, at the direction of the Company, (i) apply that portion
of the payments received in respect of the Pledged Applicable Ownership Interest
in the Treasury Portfolio equal to the aggregate Stated Amount of the related
Equity Security Units to satisfy in full the obligations of such Holders of
Equity Security Units to pay the Purchase Price under the related Purchase
Contracts and (ii) apply the remaining portion to pay the quarterly interest
payment due to such Holders of Equity Security Units on such Stock Purchase
Date, which such quarterly interest payment shall be paid on the Pledged Notes
in an amount equal to the Coupon Rate for such quarterly interest payment.
(b) Within three Business Days following any Last Failed Remarketing,
the Pledged Notes delivered to the Remarketing Agent pursuant to Section 4.5(a)
hereof shall be returned to the Collateral Agent, together with written notice
from the Remarketing Agent of the Last Failed Remarketing. The Collateral Agent,
for the benefit of the Company, shall thereupon hold such Pledged Notes to
secure the obligations of Holders of Equity Security Units under the Purchase
Contracts. The Remarketing Agent shall make one or more attempts to remarket the
Notes in accordance with the procedures set forth in the Purchase Contract
Agreement and the Remarketing Agreement, provided that the requirements of
Section 5.4(b)(ii) of the Purchase Contract Agreement have been met. If by 4:00
p.m., New York City time, on the fifth Business Day immediately preceding the
Stock Purchase Date the Remarketing Agent has failed to remarket the Notes at
approximately, but not less than, 100.50% of the Remarketing Value (as described
in the Purchase Contract Agreement) resulting in an event of default under the
Purchase Contract Agreement, the Remarketing Agent shall advise the Collateral
Agent in writing that it has failed to remarket the related Pledged Notes of
such Holders of Equity Security Units on such date. The Collateral Agent, for
the benefit of the Company will, at the written direction of the Company,
exercise its rights as a secured party with respect to the Pledged Notes and use
commercially reasonable efforts to dispose of the Pledged Notes in accordance
with applicable law and apply the proceeds from such disposition in full
satisfaction of such Holders' obligations to pay the Purchase Price for the
Common Stock; provided, that if upon the occurrence of a Last Failed Remarketing
on the fifth Business Day immediately preceding the Stock Purchase Date, the
Collateral Agent exercises such rights for the benefit of the Company
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with respect to such Pledged Notes, any accrued and unpaid interest on
such Pledged Notes will become payable by the Company to the Purchase Contract
Agent for payment to the Holder of the Equity Security Units to which such
Pledged Notes relate in accordance with the Purchase Contract Agreement.
(c) In the event a Holder of Stripped Equity Security Units has not
made an Early Settlement or Merger Early Settlement of the Purchase Contracts
underlying its Stripped Equity Security Units, such Holder shall be deemed to
have elected to pay for the shares of Common Stock to be issued under such
Purchase Contracts from the payments received in respect of the related Pledged
Treasury Securities. Without receiving any instruction from any such Holder, the
Collateral Agent shall apply such payments to the settlement of such Purchase
Contracts on the Stock Purchase Date. In the event the payments received in
respect of the related Pledged Treasury Securities are 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 such Holders of Stripped Equity Security
Units.
(d) On or prior to 11:00 a.m., New York City time, on the fourth
Business Day preceding the first Business Day of any Remarketing Period, holders
of Separate Notes may elect to have their Separate Notes remarketed by
delivering their Separate Notes, together with a notice of such election,
substantially in the form of Exhibit C hereto, to the Custodial Agent. On the
third Business Day prior to the first Business Day of any Remarketing Period, by
10:00 a.m., New York City time, the Custodial Agent shall notify the Remarketing
Agent of the number of such Separate Notes to be remarketed. The Custodial Agent
will hold such Separate Notes in an account separate from the Collateral
Account. A holder of Separate Notes electing to have its Separate Notes
remarketed will also have the right to withdraw such election by written notice
to the Custodial Agent, substantially in the form of Exhibit D hereto, on or
prior to the fifth Business Day immediately preceding the first Business Day of
any Remarketing Period and any Subsequent Remarketing Period, upon which notice
the Custodial Agent will return such Separate Notes to such holder. By 12:00
p.m. New York City time on the third Business Day immediately preceding the
first Business Day of any Remarketing Period and any Subsequent Remarketing
Period, the Custodial Agent at the written direction of the Remarketing Agent
will deliver to the Remarketing Agent for remarketing all Separate Notes
delivered to the Custodial Agent pursuant to this Section 4.5(d) and not
withdrawn pursuant to the terms hereof prior to such date. The portion of the
proceeds from such remarketing equal to the amount calculated in respect of such
Separate Notes as set forth in Section 5.4(b) of the Purchase Contract Agreement
will automatically be remitted by the Remarketing Agent to the Custodial Agent
for the benefit of the holders of such Separate Notes In addition, after
deducting as the remarketing fee an amount not exceeding 25 basis points (0.25%)
of the total proceeds of such remarketing of such Separate Notes, the
Remarketing Agent will remit to the Custodial Agent the remaining portion of the
proceeds, if any, for the benefit of such holders of such Separate Notes. If,
despite using its reasonable best efforts, the Remarketing Agent advises the
Custodial Agent in writing that there has been a Last Failed Remarketing on the
last Business Day of a Remarketing Period, the Remarketing Agent shall, within
three Business Days of such Last Failed Remarketing, return such Separate Notes
to the Custodial Agent for redelivery to such holders of such Separate Notes.
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ARTICLE V
VOTING RIGHTS -- NOTES
SECTION 5.1 Exercise by Purchase Contract Agent.
The Purchase Contract Agent may exercise, or refrain from exercising,
any and all voting and other consensual rights pertaining to the Pledged Notes
or any part thereof for any purpose not inconsistent with the terms of this
Agreement and in accordance with the terms of the Purchase Contract Agreement;
provided, that the Purchase Contract Agent shall not exercise or, as the case
may be, shall not refrain from exercising such right if, in the judgment of the
Company, such action would impair or otherwise have a material adverse effect on
the value of all or any of the Pledged Notes; and provided, further, that the
Purchase Contract Agent shall give the Company and the Collateral Agent at least
five days prior written notice of the manner in which it intends to exercise, or
its reasons for refraining from exercising, any such right. Upon receipt of any
notices and other communications in respect of any Pledged Notes, including
notice of any meeting at which holders of Notes are entitled to vote or
solicitation of consents, waivers or proxies of holders of Notes, the Collateral
Agent shall use reasonable efforts to send promptly to the Purchase Contract
Agent such notice or communication, and as soon as reasonably practicable after
receipt of a written request therefor from the Purchase Contract Agent, execute
and deliver to the Purchase Contract Agent such proxies and other instruments in
respect of such Pledged Notes (in form and substance satisfactory to the
Collateral Agent) as are prepared by the Company with respect to the Pledged
Notes.
ARTICLE VI
RIGHTS AND REMEDIES; TAX EVENT REDEMPTION
SECTION 6.1 Rights and Remedies of the Collateral Agent.
(a) In addition to the rights and remedies available at law or in
equity, after an event of default under the Purchase Contracts, the Collateral
Agent shall have all of the rights and remedies with respect to the Collateral
of a secured party under the Uniform Commercial Code (or any successor thereto)
as in effect in the State of New York from time to time (the "Code") (whether or
not the Code is in effect in the jurisdiction where the rights and remedies are
asserted) and the TRADES Regulations and such additional rights and remedies to
which a secured party is entitled under the laws in effect in any jurisdiction
where any rights and remedies hereunder may be asserted. Wherever reference is
made in this Agreement to any section of the Code, such reference shall be
deemed to include a reference to any provision of the Code that is a successor
to, or amendment of, such section. Without limiting the generality of the
foregoing, such remedies may include, to the extent permitted by applicable law,
(i) retention of the Pledged Notes or other Collateral in full satisfaction of
the Holders' obligations under the Purchase Contracts or (ii) sale of the
Pledged Notes or other Collateral in one or more public or private sales, in
each case at the written direction of the Company.
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(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 any Pledged Notes, Pledged
Applicable Ownership Interest in the Treasury Portfolio, Pledged Applicable
Ownership Interest in the Tax Event Treasury Portfolio or Pledged Treasury
Securities as provided in Article III hereof in satisfaction of the obligations
of the Holders of Equity Security Units or Stripped Equity Security Units of
which such Pledged Notes, Pledged Applicable Ownership Interest in the Treasury
Portfolio, Pledged Applicable Ownership Interest in the Tax Event Treasury
Portfolio or Pledged Treasury Securities, as applicable, is a part under the
related Purchase Contracts, the inability to make such payments shall constitute
an event of default under the Purchase Contracts and the Collateral Agent shall
have and may exercise, with reference to such Pledged Notes, Pledged Treasury
Securities, Pledged Applicable Ownership Interest in the Treasury Portfolio or
Pledged Applicable Ownership Interest in the Tax Event 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 principal amount of,
or interest on, the Pledged Notes, or (ii) the principal amount of, or interest
(if any) on, the Pledged Applicable Ownership Interest in the Treasury
Portfolio, Pledged Applicable Ownership Interest of the Tax Event Treasury
Portfolio or Pledged Treasury Securities, subject, in each case, to the
provisions of Article III, and as otherwise granted herein.
(d) The Purchase Contract Agent, individually and as attorney-in-fact
for each Holder of Equity Security Units and Stripped Equity Security Units,
agrees that, from time to time, upon the written request of the Company or the
Collateral Agent (acting upon the written request of the Company), the Purchase
Contract Agent or such Holder shall execute and deliver such further documents
and do such other acts and things as the Company or the Collateral Agent (acting
upon the written request of the Company) 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 Company or the Collateral Agent (acting upon the written
request of the Company) hereunder, except for liability for its own negligent
act, its own negligent failure to act, its bad faith or its own willful
misconduct.
SECTION 6.2 Substitutions.
Whenever a Holder has the right to substitute Treasury Securities or
Notes, 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 6.3 Tax Event Redemption.
Upon the occurrence of a Tax Event Redemption prior to a successful
remarketing of the Pledged Notes, the aggregate Redemption Price payable on the
Tax Event Redemption Date with
15
respect to such Pledged Notes shall be delivered to the Collateral Agent by the
Trustee on or prior to 12:00 p.m., New York City time, on such date by wire
transfer in immediately available funds at such place and at such account as may
be designated by the Collateral Agent in exchange for the Pledged Notes. In the
event the Collateral Agent receives such Redemption Price, the Collateral Agent
will, at the written direction of the Company, apply an amount, out of such
Redemption Price, equal to the aggregate Redemption Amount with respect to the
Pledged Notes to purchase from the Quotation Agent the Tax Event Treasury
Portfolio and promptly remit the remaining portion of such Redemption Price to
the Purchase Contract Agent for payment to the Holders of Equity Security Units.
The Collateral Agent shall Transfer the Tax Event Treasury Portfolio to the
Collateral Account to secure the obligation of all Holders of Equity Security
Units to purchase Common Stock of the Company under the Purchase Contracts
constituting a part of such Equity Security Units, in substitution for the
Pledged Notes. Thereafter the Collateral Agent shall have such security
interests, rights and obligations with respect to the Tax Event Treasury
Portfolio as it had in respect of the Pledged Notes as provided in Articles II,
III, IV, V and VI, and any reference herein to the Notes shall be deemed to be a
reference to such Tax Event Treasury Portfolio, and any reference herein to
interest on the Notes shall be deemed to be a reference to distributions on such
Tax Event Treasury Portfolio.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES; COVENANTS
SECTION 7.1 Representations and Warranties.
The Holders from time to time, acting through the Purchase Contract
Agent as their attorney-in-fact (it being understood that the Purchase Contract
Agent shall not be liable for any representation or warranty made by or on
behalf of a Holder), hereby represent and warrant to the Collateral Agent, which
representations and warranties shall be deemed repeated on each day a Holder
Transfers Collateral that:
(a) such Holder has the power to grant a security interest in and lien
on the Collateral;
(b) such Holder is the sole beneficial owner of the Collateral and, in
the case of Collateral delivered in physical form, is the sole holder of such
Collateral and is the sole beneficial owner of, or has the right to Transfer,
the Collateral it Transfers to the Collateral Agent, free and clear of any
security interest, lien, encumbrance, call, liability to pay money or other
restriction other than the security interest and lien granted under Section 2.1
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
16
(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 2.1 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 Equity Security Units and
Stripped Equity Security Units.
ARTICLE VIII
THE COLLATERAL AGENT
SECTION 8.1 Appointment, Powers and Immunities.
(a) 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:
(i) 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;
(ii) 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 Equity
Security Units or Stripped Equity Security Units 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 Equity Security Units or
Stripped Equity Security Units 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
17
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,
existence, validity, perfection or maintenance of any security
interest created hereunder;
(iii) shall not be required to initiate or conduct any
litigation or collection proceedings hereunder (except in the case of
the Collateral Agent, pursuant to written directions furnished under
Section 8.2 hereof, subject to Section 8.6 hereof);
(iv) 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 gross negligence, bad faith or willful
misconduct; and
(v) 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 Equity Security Units or Stripped Equity Security Units 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.
(b) 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 or for any special, indirect, individual, consequential
damages or lost profits or loss of business, arising in connection with this
Agreement even if the Collateral Agent, the Custodial Agent or the Securities
Intermediary has been advised of the likelihood of such loss or damage being
incurred and regardless of the form of action. Notwithstanding the foregoing,
the Collateral Agent, the Custodial Agent, the Purchase Contract Agent and
Securities Intermediary, each in its individual capacity, hereby waive any right
of setoff, bankers lien, liens or perfection rights as securities intermediary
or any counterclaim with respect to any of the Collateral.
(c) The Collateral Agent, Custodial Agent and Securities Intermediary
shall have no liability whatsoever for the action or inaction of any Clearing
Agency or any book-entry system thereof. In no event shall any Clearing Agency
or any book-entry system thereof be deemed an agent or subcustodian of the
Collateral Agent, Custodial Agent and Securities Intermediary. The Collateral
Agent, Custodial Agent and Securities Intermediary shall not be responsible or
liable for any failure or delay in the performance of its obligations under this
Agreement arising out of or caused, directly or indirectly, by circumstances
beyond its reasonable control, including, without limitation, acts of God;
earthquakes; fires; floods; war (whether declared or undeclared); terrorism;
civil or military disturbances; sabotage; epidemics; riots; interruptions, loss
or malfunctions of utilities, computer (hardware or software) or communications
service; accidents;
18
labor disputes; acts of civil or military authority; governmental actions; or
inability to obtain labor, material, equipment or transportation.
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 each
receive indemnity reasonably satisfactory to it as provided herein. Nothing in
this Section 8.2 shall impair the right of the Collateral Agent in its
discretion to take any action or omit to take any action which it deems proper
and which is not inconsistent with such direction.
SECTION 8.3 Reliance.
Each of the Securities Intermediary, the Custodial Agent and the
Collateral Agent shall be entitled conclusively to rely upon any certification,
order, judgment, opinion, notice or other communication (including, without
limitation, any thereof by telephone or facsimile) reasonably 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 of legal counsel and other experts
selected by the Collateral Agent, the Custodial Agent or the Securities
Intermediary, as the case may be. As to any matters not expressly provided for
by this Agreement, the Collateral Agent, the Custodial Agent and the Securities
Intermediary shall in all cases be fully protected in acting, or in refraining
from acting, hereunder in accordance with instructions given by the Company in
accordance with this Agreement.
SECTION 8.4 Rights in Other Capacities.
The Collateral Agent, the Custodial Agent and the Securities
Intermediary and their affiliates may (without having to account therefor to the
Company) accept deposits from, lend money to, make their investments in and
generally engage in any kind of banking, trust or other business with the
Purchase Contract Agent, any Holder of Equity Security Units or Stripped Equity
Security Units and any holder of Separate Notes (and any of their respective
subsidiaries or affiliates) as if it were not acting as the Collateral Agent,
the Custodial Agent or the Securities Intermediary, as the case may be, and the
Collateral Agent, the Custodial Agent and the Securities Intermediary and their
affiliates may accept fees and other consideration from the Purchase Contract
Agent, any Holder of Equity Security Units or Stripped Equity Security Units or
any holder of Separate Notes without having to account for the same to the
Company; provided that each of the Securities Intermediary, the Custodial Agent
and the Collateral Agent covenants and agrees with the Company that, except as
provided in this Agreement, it shall not accept, receive or permit there to be
created in favor of itself (and waives any right of set-off or
19
banker's lien with respect to) and shall take no affirmative action to permit
there to be created in favor of any other Person, any security interest, lien or
other encumbrance of any kind in or upon the Collateral and the Collateral shall
not be commingled with any other assets of any such Person.
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 Equity Security
Units or Stripped Equity Security Units of this Agreement, the Purchase Contract
Agreement, the Equity Security Units or Stripped Equity Security Units 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 Equity
Security Units or Stripped Equity Security Units. The Collateral Agent, the
Custodial Agent and the Securities Intermediary shall not have any duty or
responsibility to provide the Company or the Remarketing Agent with any credit
or other information concerning the affairs, financial condition or business of
the Purchase Contract Agent, any Holder of Equity Security Units or Stripped
Equity Security Units or any holder of Separate Notes (or any of their
respective subsidiaries or affiliates) that may come into the possession of the
Collateral Agent, the Custodial Agent or the Securities Intermediary or any of
their respective affiliates.
SECTION 8.6 Compensation and Indemnity.
The Company agrees:
(a) to pay each of the Collateral Agent, the Custodial Agent and the
Securities Intermediary from time to time such compensation as shall be agreed
in writing between the Company and the Collateral Agent, Custodial Agent or the
Securities Intermediary, as the case may be, for all services rendered by each
of them hereunder, and
(b) to fully indemnify the Collateral Agent, the Custodial Agent, the
Securities Intermediary, the Purchase Contract Agent and their officers,
directors and agents for, and to hold each of them harmless from and against,
any and all loss, liability, claim, damage or reasonable out-of-pocket expense
incurred without gross negligence, bad faith or willful misconduct on its part,
arising out of or in connection with the acceptance or administration of its
powers and duties under this Agreement, including the out-of-pocket costs and
expenses (including 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 or collecting such amounts. The Collateral Agent, the
Custodial Agent and the Securities Intermediary shall each promptly notify the
Company of any third party claim that may give rise to the indemnity hereunder
and give the Company the opportunity to participate in the defense of such claim
with counsel reasonably satisfactory to the indemnified party, and no such claim
shall be settled without the written consent of the Company, which consent shall
not be unreasonably withheld. The provisions of this Section 8.6 shall survive
the resignation or removal of the Collateral Agent, the Custodial Agent and the
Securities Intermediary or the termination of this Agreement.
20
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, Custodial Agent and the Securities Intermediary 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 none of the Collateral Agent, Custodial Agent or
the Securities Intermediary 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, Custodial Agent and the
Securities Intermediary 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, reasonably satisfactory to the Collateral
Agent, Custodial Agent or the Securities Intermediary, as the case may be, or
(ii) the Collateral Agent, the Custodial Agent or the Securities Intermediary,
as the case may be, shall have received security or an indemnity reasonably
satisfactory to the Collateral Agent, Custodial Agent or the Securities
Intermediary, as the case may be, sufficient to save the Collateral Agent,
Custodial Agent or the Securities Intermediary, as the case may be, harmless
from and against any and all loss, liability or reasonable out-of-pocket expense
that the Collateral Agent, Custodial Agent or the Securities Intermediary, as
the case may be, may incur by reason of its acting without willful misconduct or
gross negligence. The Collateral Agent, Custodial Agent or the Securities
Intermediary may in addition elect to commence an interpleader action or seek
other judicial relief or orders as the Collateral Agent, Custodial Agent or the
Securities Intermediary, as the case may be, may deem necessary. Notwithstanding
anything contained herein to the contrary, none of the Collateral Agent,
Custodial Agent or the Securities Intermediary 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 and Removal.
Subject to the appointment and acceptance of a successor Collateral
Agent, Custodial Agent or Securities Intermediary, as provided below, (a) the
Collateral Agent, Custodial Agent and the Securities Intermediary 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 Equity Security Units and Stripped Equity
Security Units, (b) the Collateral Agent, Custodial Agent and the Securities
Intermediary may be removed at any time by the Company, (c) if the Collateral
Agent, Custodial Agent or the Securities Intermediary 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,
Custodial Agent or the Securities Intermediary may be removed by the Purchase
Contract Agent, and (d) if the Collateral Agent, the Custodial Agent or the
Securities Intermediary is the same Person as the Purchase Contract Agent and an
event of default occurs under the Purchase Contract Agreement or this Agreement,
except an event of default as a result of a Last Failed Remarketing on the fifth
Business Day immediately preceding the Stock Purchase Date, the Collateral
Agent, the Custodial Agent or the Securities Intermediary shall resign
immediately in
21
accordance with the provisions of Section 8.8 hereof. The Purchase Contract
Agent shall promptly notify the Company of any removal of the Collateral Agent,
the Custodial Agent or the Securities Intermediary pursuant to clause (c) of the
immediately preceding sentence. The Company shall promptly notify the Purchase
Contract Agent of any removal of the Collateral Agent, the Custodial Agent or
the Securities Intermediary pursuant to clause (b) of the second preceding
sentence. Upon any such resignation or removal, the Company shall have the right
to appoint a successor Collateral Agent, Custodial Agent or Securities
Intermediary, as the case may be. If no successor Collateral Agent, Custodial
Agent or Securities Intermediary, 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, Custodial Agent's or Securities Intermediary's
giving of notice of resignation or such removal, then the retiring Collateral
Agent, Custodial Agent or Securities Intermediary, as the case may be, may at
the Company's expense petition any court of competent jurisdiction for the
appointment of a successor Collateral Agent, Custodial Agent or Securities
Intermediary, as the case may be. Each of the Collateral Agent, Custodial Agent
and the Securities Intermediary shall be a bank which has an office in New York,
New York with a combined capital and surplus of at least $50,000,000. Upon the
acceptance of any appointment as Collateral Agent, Custodial Agent or Securities
Intermediary, as the case may be, hereunder by a successor Collateral Agent,
Custodial Agent or Securities Intermediary, 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, Custodial Agent or
Securities Intermediary, as the case may be, and the retiring Collateral Agent,
Custodial Agent or Securities Intermediary, 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 after the payment of any
outstanding fees, expenses and indemnities due and owing to such remaining
party, its counsel and its agents. The retiring Collateral Agent, Custodial
Agent or Securities Intermediary shall, upon such succession, be discharged from
its duties and obligations as Collateral Agent, Custodial Agent or Securities
Intermediary hereunder. After any retiring Collateral Agent's, Custodial Agent's
or Securities Intermediary's resignation hereunder as Collateral Agent,
Custodial Agent or Securities Intermediary, the provisions of this Section 8.8,
and Section 8.6 hereof, 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, Custodial Agent or Securities Intermediary. 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 hereunder.
SECTION 8.9 Right to Appoint Agent or Advisor.
The Collateral Agent shall have the right to appoint or consult with
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 (other than legal counsel) pursuant to this Section 8.9
shall be subject to prior consent of the Company, which consent shall not be
unreasonably withheld.
22
SECTION 8.10 Survival.
The provisions of this Article VIII shall survive termination of this
Agreement and the resignation or removal of the Collateral Agent, the Custodial
Agent or the Securities Intermediary.
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.
ARTICLE IX
AMENDMENT
SECTION 9.1 Amendment Without Consent of Holders.
Without the consent of any Holders or the holders of any Separate
Notes, the Company, when authorized by a Board Resolution, 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:
(i) to evidence the succession of another Person to the
Company, and the assumption by any such successor of the covenants of
the Company;
(ii) 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;
(iii) to evidence and provide for the acceptance of
appointment hereunder by a successor Collateral Agent, Custodial Agent,
Securities Intermediary or Purchase Contract Agent; or
(iv) 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.
23
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 by a Board Resolution, 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
Equity Security Units or Stripped Equity Security Units; provided, however, that
no such supplemental agreement shall, without the consent of the Holder of each
Outstanding Unit adversely affected thereby,
(i) change the amount or type of Collateral underlying an
Equity Security Unit or Stripped Equity Security Unit (except for the
rights of holders of Equity Security Units to substitute the Treasury
Securities for the Pledged Notes or the rights of Holders of Stripped
Equity Security Units to substitute Notes for the Pledged Treasury
Securities), impair the right of the Holder of any Equity Security Unit
or Stripped Equity Security Unit to receive distributions on the
underlying Collateral or otherwise adversely affect the Holder's rights
in or to such Collateral; or
(ii) otherwise effect any action that would require the
consent of the Holder of each Outstanding Unit affected thereby
pursuant to the Purchase Contract Agreement if such action were
effected by an agreement supplemental thereto; or
(iii) 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 receive and (subject to Section 8.1 hereof, with respect to
the Collateral Agent, and Section 7.1 of the Purchase Contract Agreement, with
respect to the Purchase Contract Agent) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and that all conditions precedent, if
any, to the execution and delivery of such amendment have been satisfied and, in
the case of an amendment pursuant to Section 9.1, that such amendment does not
adversely affect the validity, perfection or priority of the security interests
granted or created hereunder.
SECTION 9.4 Effect of Amendments.
Upon the execution of any amendment under this Article IX, this
Agreement shall be modified in accordance therewith, and such amendment shall
form a part of this Agreement for
24
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.
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 Certificates so modified as to conform, in the opinion of the
Collateral Agent, the Purchase Contract Agent and the Company, to any such
amendment may be prepared and executed by the Company and authenticated,
executed on behalf of the Holders and delivered by the Purchase Contract Agent
in accordance with the Purchase Contract Agreement and without charge or expense
to the Holders in exchange for outstanding Certificates.
ARTICLE X
MISCELLANEOUS
SECTION 10.1 No Waiver.
No failure on the part of any party hereto or any of its agents to
exercise, and no course of dealing with respect to, and no delay in exercising,
any right, power or remedy hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise by any party hereto or any of its agents of
any right, power or remedy hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. The remedies herein
are cumulative and are not exclusive of any remedies provided by law.
SECTION 10.2 Governing Law.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ITS PRINCIPLES OF CONFLICTS
OF LAWS. Without limiting the foregoing, the above choice of law is expressly
agreed to by the Securities Intermediary, the Collateral Agent, the Custodial
Agent and the Holders from time to time acting through the Purchase Contract
Agent, as their attorney-in-fact, in connection with the establishment and
maintenance of the Collateral Account, which law, for purposes of the Code,
shall be deemed to be the law governing all Security Entitlements related
thereto. In addition, such parties agree that, for purposes of the Code, New
York shall be the Securities Intermediary's jurisdiction. The Company, the
Collateral Agent and the Holders from time to time of the Equity Security Units
and Stripped Equity Security Units, 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
25
the Equity Security Units and Stripped Equity Security Units, 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.
Unless otherwise stated herein, 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 personally delivered or, in the case of a mailed notice or
notice transmitted by telecopier, 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 Equity Security Units or Stripped
Equity Security Units, 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, the Securities
Intermediary and the Custodial Agent for:
26
(a) all reasonable costs and all reasonable expenses of the Collateral
Agent, the Custodial Agent and the Securities Intermediary (including, without
limitation, the reasonable fees and expenses of counsel to the Collateral Agent,
the Custodial Agent and the Securities Intermediary and its agents), 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 Equity Security Units or Stripped Equity
Security Units to satisfy its obligations under the Purchase Contracts forming a
part of the Equity Security Units and Stripped Equity Security Units 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 Equity Security Units or Stripped Equity Security
Units 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 Equity Security Units or Stripped Equity Security Units 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.
SECTION 10.9 Waiver of Jury Trial.
EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE
UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND
THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
[SIGNATURE PAGE FOLLOWS]
27
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
DTE ENERGY COMPANY
By:__________________________________________
Name: X.X. Xxxxxx
Title: Assistant Treasurer
Address for Notices:
0000 0xx Xxxxxx, 000 XXX
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Assistant Treasurer
Telecopy: (000) 000-0000
THE BANK OF NEW YORK, as Purchase Contract Agent
and as attorney-in-fact of the Holders from time
to time of the Equity Security Units and
Stripped Equity Security Units
By:__________________________________________
Name:
Title:
Address for Notices:
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
Telecopy: (000) 000-0000
THE BANK OF NEW YORK, as Collateral Agent,
Custodial Agent and Securities Intermediary
By:__________________________________________
Name:
Title:
Address for Notices:
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
Telecopy: (000) 000-0000
EXHIBIT A
INSTRUCTION FROM PURCHASE CONTRACT
AGENT TO COLLATERAL AGENT
THE BANK OF NEW YORK,
as Collateral Agent
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Equity Security Units of DTE ENERGY COMPANY (the "Company")
----------------------------
We hereby notify you in accordance with Section [4.1] [4.2] of the
Pledge Agreement, dated as of June 25, 2002 (the "Pledge Agreement") among the
Company, you, as Collateral Agent, Custodial Agent and Securities Intermediary
and us, as Purchase Contract Agent and as attorney-in-fact for the holders of
[Equity Security Units] [Stripped Equity Security Units] from time to time, that
the holder of Equity Security Units or Stripped Equity Security Units listed
below (the "Holder") has elected to substitute [$________ aggregate principal
amount of Treasury Securities (CUSIP No. 000000XX0)] [$________ aggregate
principal amount of Notes] in exchange for the related [Pledged Notes] [Pledged
Treasury Securities] held by you in accordance with the Pledge Agreement and has
delivered to us a notice stating that the Holder has Transferred [Treasury
Securities] [Notes] to you, as Collateral Agent. We hereby instruct you, upon
receipt of such [Pledged Treasury Securities] [Pledged Notes], and upon the
payment by such Holder of any applicable fees, to release the [Notes] [Treasury
Securities] related to such [Equity Security Units] [Stripped Equity Security
Units] to us in accordance with the Holder's instructions. Capitalized terms
used herein but not defined shall have the meaning set forth in the Pledge
Agreement.
Date:
THE BANK OF NEW YORK,
as Purchase Contract Agent
By:__________________________________________
Name:
Title:
Please print name and address of Registered Holder electing to substitute
[Treasury Securities] [Notes] for the [Pledged Notes] [Pledged Treasury
Securities]:
Name:____________________________________
Social Security or other Taxpayer Identification
Number, if any:__________________________
Address:_____________________________
_____________________________________
DTC Account No.__________________
A-1
EXHIBIT B
INSTRUCTION TO PURCHASE CONTRACT AGENT
THE BANK OF NEW YORK,
as Purchase Contract Agent
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Corporate Trust Administration
Telecopy: (000) 000-0000
Re: Equity Security Units of DTE ENERGY COMPANY (the "Company")
The undersigned Holder hereby notifies you that it has delivered to The
Bank of New York, as Collateral Agent, Custodial Agent and Securities
Intermediary [$________ aggregate principal amount of Treasury Securities (CUSIP
No. 000000XX0)] [$_________ aggregate principal amount of Notes] in exchange for
the related [Pledged Notes] [Pledged Treasury Securities] held by the Collateral
Agent, in accordance with Section [4.1] [4.2] of the Pledge Agreement, dated
June 25, 2002 (the "Pledge Agreement"), among you, the Company and the
Collateral Agent. The undersigned Holder has paid the Collateral Agent all
applicable fees relating to such exchange. The undersigned Holder hereby
instructs you to instruct the Collateral Agent to release to you on behalf of
the undersigned Holder the [Pledged Notes] [Pledged Treasury Securities] related
to such [Equity Security Units] [Stripped Equity Security Units]. Capitalized
terms used herein but not defined shall have the meaning set forth in the Pledge
Agreement.
Date:______________________________ Signature:______________________________
Signature Guarantee:____________________
Please print name and address of Registered Holder:
Name:__________________________________________
Social Security or other Taxpayer Identification Number, if any:
_______________________________________________
Address:_______________________________________
_______________________________________________
DTC Participant No._____________
B-1
EXHIBIT C
INSTRUCTION TO CUSTODIAL AGENT REGARDING REMARKETING
THE BANK OF NEW YORK,
as Custodial Agent
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
Re: Notes of DTE ENERGY COMPANY (the "Company")
The undersigned hereby notifies you in accordance with Section 4.5(d)
of the Pledge Agreement, dated as of June 25, 2002 (the "Pledge Agreement"),
among the Company, yourselves, as Collateral Agent, Securities Intermediary and
Custodial Agent, and The Bank of New York, as Purchase Contract Agent and as
attorney-in-fact for the Holders of Equity Security Units and Stripped Equity
Security Units from time to time, that the undersigned elects to deliver
$________ aggregate principal amount of Notes for delivery to the Remarketing
Agent on or prior to 11:00 a.m., New York City time, on the fourth Business Day
immediately preceding the first Business Day of any Remarketing Period or any
Subsequent Remarketing Period for remarketing pursuant to Section 4.5(d) of the
Pledge Agreement. The undersigned will, upon request of the Remarketing Agent,
execute and deliver any additional documents deemed by the Remarketing Agent or
by the Company to be necessary or desirable to complete the sale, assignment and
transfer of the Notes tendered hereby.
The undersigned hereby instructs you, upon receipt of the proceeds of
such remarketing from the Remarketing Agent, net of amounts payable to the
Remarketing Agent in accordance with the Pledge Agreement, to deliver such
proceeds to the undersigned in accordance with the instructions indicated herein
under "A. Payment Instructions." The undersigned hereby instructs you, in the
event of a Last Failed Remarketing in the Remarketing Period to which this
notice relates, upon receipt of the Notes tendered herewith from the Remarketing
Agent, to be delivered to the person(s) and the address(es) indicated herein
under "B. Delivery Instructions."
With this notice, the undersigned hereby (i) represents and warrants
that the undersigned has full power and authority to tender, sell, assign and
transfer the Notes tendered hereby and that the undersigned is the record owner
of any Notes tendered herewith in physical form or a participant in The
Depository Trust Company ("DTC") and the beneficial owner of any Notes tendered
herewith by book-entry transfer to your account at DTC and (ii) agrees to be
bound by the terms and conditions of Section 4.5(d) of the Pledge Agreement.
Capitalized terms used herein but not defined shall have the meaning set forth
in the Pledge Agreement.
Date:______________________________ Signature:_____________________________
Signature Guarantee:___________________
Name:
Social Security or other Taxpayer Identification Number, if any:
Address:
C-1
A. PAYMENT INSTRUCTIONS
Proceeds of the remarketing should be paid by check in the name of the person(s)
set forth below and mailed to the address set forth below.
Name(s): ------------------------------------------------------
(Please Print)
Address: ------------------------------------------------------
(Please Print)
(Zip Code)
(Tax Identification or Social Security Number):
B. DELIVERY INSTRUCTIONS
In the event of a Last Failed Remarketing in a Remarketing Period to which this
notice relates, Notes which are in physical form should be delivered to the
person(s) set forth below and mailed to the address set forth below.
Name(s): ------------------------------------------------------
(Please Print)
Address: ------------------------------------------------------
(Please Print)
(Zip Code)
(Tax Identification or Social Security Number):
In the event of a Last Failed Remarketing in a Remarketing Period to which this
notice relates, Notes which are in book-entry form should be credited to the
account at The Depository Trust Company set forth below.
Name of Account Party: DTC Account Number:
C-2
EXHIBIT D
INSTRUCTION TO CUSTODIAL AGENT REGARDING
WITHDRAWAL FROM REMARKETING
THE BANK OF NEW YORK,
as Custodial Agent
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
Re: Notes of DTE ENERGY COMPANY (the "Company")
The undersigned hereby notifies you in accordance with Section 4.5(d)
of the Pledge Agreement, dated as of June 25, 2002 (the "Pledge Agreement"),
among the Company, yourselves, as Collateral Agent, Securities Intermediary and
Custodial Agent and The Bank of New York, as Purchase Contract Agent and as
attorney-in-fact for the Holders of Equity Security Units and Stripped Equity
Security Units from time to time, that the undersigned elects to withdraw the
$_________ aggregate principal amount of Notes delivered to the Custodial Agent
on ________, 2005 for remarketing pursuant to Section 4.5(d) of the Pledge
Agreement. The undersigned hereby instructs you to return such Notes to the
undersigned in accordance with the undersigned's instructions. With this notice,
the Undersigned hereby agrees to be bound by the terms and conditions of Section
4.5(d) of the Pledge Agreement. Capitalized terms used herein but not defined
shall have the meaning set forth in the Pledge Agreement.
Date:______________________________ Signature:_______________________________
Signature Guarantee:_____________________
Name:
Social Security or other Taxpayer Identification Number, if any:
Address:
In the event of a Last Failed Remarketing in a Remarketing Period to which this
notice relates, Notes which are in book-entry form should be credited to the
account at The Depository Trust Company set forth below.
Name of Account Party: DTC Account Number:
D-1
