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Exhibit 4.17
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[NAME OF COMPANY]
AND
FORM OF PLEDGE AGREEMENT
Dated as of ________, ____
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TABLE OF CONTENTS
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Section 1 Definitions.............................................. 2
Section 2 Pledge; Control and Perfection........................... 6
Section 2.1 The Pledge............................................... 6
Section 2.2 Control and Perfection................................... 7
Section 3 Distributions on Pledged Collateral...................... 8
Section 4 Substitution, Release, Repledge and Settlement of
Preferred Securities.................................. 10
Section 4.1 Substitution of Preferred Securities and the
Establishment of Growth Units......................... 10
Section 4.2 Pledge of Preferred Securities and Reestablishment of
Income Units.......................................... 10
Section 4.3 Termination Event........................................ 11
Section 4.4 Cash Settlement.......................................... 12
Section 4.5 Early Settlement......................................... 13
Section 4.6 Application of Proceeds Settlement....................... 14
Section 5 Voting Rights -- Preferred Securities.................... 15
Section 6 Rights and Remedies; Distribution of the Debentures; Tax
Event Redemption...................................... 16
Section 6.1 Rights and Remedies of the Collateral Agent.............. 16
Section 6.2 Distribution of the Debentures; Tax Event Redemption..... 17
Section 6.3 Substitutions............................................ 18
Section 7 Representations and Warranties; Covenants................ 18
Section 7.1 Representations and Warranties........................... 18
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Section 7.2 Covenants................................................ 19
Section 8 The Collateral Agent..................................... 19
Section 8.1 Appointment, Powers and Immunities....................... 19
Section 8.2 Instructions of the Company.............................. 20
Section 8.3 Reliance by Collateral Agent............................. 21
Section 8.4 Rights in Other Capacities............................... 21
Section 8.5 Non-Reliance on Collateral Agent......................... 21
Section 8.6 Compensation and Indemnity............................... 21
Section 8.7 Failure to Act........................................... 22
Section 8.8 Resignation of Collateral Agent.......................... 22
Section 8.9 Right to Appoint Agent or Advisor........................ 23
Section 8.10 Survival................................................. 23
Section 8.11 Exculpation.............................................. 23
Section 9 Amendment................................................ 24
Section 9.1 Amendment Without Consent of Holders..................... 24
Section 9.2 Amendment with Consent of Holders........................ 24
Section 9.3 Execution of Amendments.................................. 25
Section 9.4 Effect of Amendments..................................... 25
Section 9.5 Reference to Amendments.................................. 25
Section 10 Miscellaneous............................................ 26
Section 10.1 No Waiver................................................ 26
Section 10.2 Governing Law............................................ 26
Section 10.3 Notices.................................................. 26
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Section 10.4 Successors and Assigns................................... 26
Section 10.5 Counterparts............................................. 27
Section 10.6 Severability............................................. 27
Section 10.7 Expenses, etc............................................ 27
Section 10.8 Security Interest Absolute............................... 27
EXHIBIT A INSTRUCTION TO COLLATERAL AGENT
EXHIBIT B INSTRUCTION TO PURCHASE CONTRACT AGENT
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PLEDGE AGREEMENT
FORM OF PLEDGE AGREEMENT, dated as of ________, ____ (this "Agreement"),
among [Name of Company], a ________ corporation (the "Company"), __________, a
________ banking corporation, not individually but solely as collateral agent
(in such capacity, together with its successors in such capacity, the
"Collateral Agent") and in its capacity as a "securities intermediary" as
defined in Section 8-102(a)(14) of the Code (as defined herein) (in such
capacity, together with its successors in such capacity, the "Securities
Intermediary"), and , not individually but solely as purchase contract agent and
as attorney-in-fact of the Holders (as defined in the Purchase Contract
Agreement) from time to time of the Securities (as hereinafter defined) (in such
capacity, together with its successors in such capacity, the "Purchase Contract
Agent") under the Purchase Contract Agreement (as hereinafter defined).
RECITALS
The Company and the Purchase Contract Agent are parties to the Purchase
Contract Agreement, dated as of the date hereof (as modified and supplemented
and in effect from time to time, the "Purchase Contract Agreement"), pursuant to
which there may be issued up to ________ [________ Units] (the "Securities").
Each Security, at issuance, consists of a unit (the "Income Unit" or
"Income Units") comprised of (a) one stock purchase contract (the "Purchase
Contract") under which (i) the Holder will purchase from the Company on
________, ____ for an amount equal to the Stated Amount, a number of shares of
Common Stock equal to the Settlement Rate, and (ii) the Company will pay the
Holder Contract Adjustment Payments, if any, and (b) either beneficial ownership
of a __% ________, ____ Preferred Security (a "Preferred Security") issued by
__________________ (the "Trust"), having a liquidation amount equal to $50 (the
"Stated Amount") and maturing on ________, ____ or upon the occurrence of a Tax
Event Redemption, the Applicable Ownership Interest of the Treasury Portfolio.
Pursuant to the terms of the Purchase Contract Agreement and the Purchase
Contracts, the Holders, from time to time, of the Securities have irrevocably
authorized the Purchase Contract Agent, as attorney-in-fact of such Holders,
among other things, to execute and deliver this Agreement on behalf of such
Holders and to grant the pledge provided hereby of the Preferred Securities and
any Treasury Securities delivered in exchange therefor to secure each Holder's
obligations under the related Purchase Contract, as provided herein and subject
to the terms hereof. Upon such pledge the Preferred Securities will be
beneficially owned by the Holders but will be owned of record by the Purchase
Contract Agent subject to the Pledge hereunder.
Accordingly, the Company, the Collateral Agent, the Securities
Intermediary and the Purchase Contract Agent, on its own behalf and as
attorney-in-fact of the Holders from time to time of the Securities, agree as
follows:
Section 1. Definitions. For all purposes of this Agreement, except as
otherwise expressly provided or unless the context otherwise requires:
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(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(b) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision;
(c) the following terms have the meanings assigned to them in the
Purchase Contract Agreement: (i) Act, (ii) Agent, (iii) Board Resolution,
(iv) Cash Settlement, (v) Certificate, (vi) Common Stock, (vii) Contract
Adjustment Payments, (viii) Debentures, (ix) Early Settlement, (x) Early
Settlement Amount, (xi) Early Settlement Date, (xii) Holders, (xiii)
Opinion of Counsel, (xiv) Outstanding Securities, (xv) Purchase Contract,
(xvi) Purchase Contract Settlement Date, (xvii) Purchase Price, (xviii)
Remarketing Agent, (ix) Remarketing Agreement, (xx) Remarketing
Underwriting Agreement, (xxi) Settlement Rate, (xxii) Termination Event,
and (xxiii) Underwriting Agreement; and
(d) the following terms have the meanings assigned to them in the
Declaration: (i) Applicable Ownership Interest (ii) Applicable Principal
Amount, (iii) Failed Remarketing, (iv) Indenture, (v) Investment Company
Event, (vi) Primary Treasury Dealer, (vii) Property Trustee, (viii)
Quotation Agent, (ix) Redemption Amount, (x) Redemption Price, (xi) Tax
Event, (xii) Tax Event Redemption, (xiii) Tax Event Redemption Date, (xiv)
Treasury Portfolio, (xv) Treasury Portfolio Purchase Price.
"Agreement" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more agreements supplemental
hereto entered into pursuant to the applicable provisions hereof.
"Bankruptcy Code" means title 11 of the United States Code, or any other
law of the United States that from time to time provides a uniform system of
bankruptcy laws.
"Business Day" means any day other than a Saturday or Sunday that is not a
day on which banking institutions in Borough of Manhattan, The City of New York
are authorized or required by law, regulation or executive order to close.
"Cash" means any coin or currency of the United States as at the time
shall be legal tender for payment of public and private debts.
"Code" has the meaning specified in Section 6.1 hereof.
"Collateral" has the meaning specified in Section 2.1 hereof.
"Collateral Account" means the trust account (number ___) maintained at
_______________ in the name "_______________, as Purchase Contract Agent on
behalf of the holders of certain securities of the Trust subject to the security
interest of
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_______________, as Collateral Agent, for the benefit of [Name of Company], as
pledgee" and any successor account.
"Collateral Agent" has the meaning specified in the first paragraph of
this instrument.
"Company" means the Person named as the "Company" in the first paragraph
of this instrument until a successor shall have become such, and thereafter
"Company" shall mean such successor.
"Debenture Trustee" means ________, as trustee under the Indenture until a
successor is appointed thereunder, and thereafter means such successor trustee.
"Declaration" means the Amended and Restated Declaration of Trust of the
Trust, dated as of ________, ____ among the Company as sponsor, the trustees
named therein and the holders from time to time of undivided beneficial
interests in the assets of the Trust.
"Growth Unit" or "Growth Units" means a Purchase Contract with respect to
which Treasury Securities have been substituted for Preferred Securities or for
the appropriate Applicable Ownership Interest of the Treasury Portfolio, as the
case may be, as collateral to secure the Holder's obligations under such
Purchase Contract.
"Intermediary" means any entity that in the ordinary course of its
business maintains securities accounts for others and is acting in that
capacity.
"Permitted Investments" means any one of the following which shall mature
not later than the next succeeding Business Day (i) any evidence of indebtedness
with an original maturity of 365 days or less issued, or directly and fully
guaranteed or insured, by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof or such indebtedness constitutes
a general obligation of it); (ii) deposits, certificates of deposit or
acceptances with an original maturity of 365 days or less of any institution
which is a member of the Federal Reserve System having combined capital and
surplus and undivided profits of not less than US$ 200.0 million at the time of
deposit; (iii) investments with an original maturity of 365 days or less of any
Person that is fully and unconditionally guaranteed by a bank referred to in
clause (ii); (iv) repurchase agreements and reverse repurchase agreements
relating to marketable direct obligations issued or unconditionally guaranteed
by the United States Government or issued by any agency thereof and backed by
the full faith and credit of the United States Government; (v) investments in
commercial paper, other than commercial paper issued by the Company or its
affiliates, of any corporation incorporated under the laws of the United States
or any State thereof, which commercial paper has a rating at the time of
purchase at least equal to "A-1" by Standard & Poor's Ratings Services or at
least equal to "P-1" by Xxxxx'x Investors Service, Inc.; and (vi) investments in
money market funds registered under the Investment Company Act of 1940, as
amended, rated in the highest applicable rating category by S&P or Moody's.
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"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Pledge" has the meaning specified in Section 2.1 hereof.
"Pledged Preferred Securities" has the meaning specified in Section 2.1
hereof.
"Pledged Treasury Securities" has the meaning specified in Section 2.1
hereof.
"Preferred Securities" has the meaning specified in the Recitals.
"Proceeds" means all interest, dividends, cash, instruments, securities,
financial assets (as defined in ss. 8-102(a)(9) of the Code) and other property
from time to time received, receivable or otherwise distributed upon the sale,
exchange, collection or disposition of the Collateral or any proceeds thereof.
"Purchase Contract" has the meaning specified in the Recitals.
"Purchase Contract Agent" has the meaning specified in the first paragraph
of the recitals of this Agreement.
"Purchase Contract Agreement" has the meaning specified in the Recitals.
"Securities" has the meaning specified in the Recitals.
"Securities Intermediary" has the meaning specified in the first paragraph
of this Agreement.
"Security Entitlement" has the meaning set forth in Section 8-102(a)(17)
of the Code.
"Stated Amount" has the meaning specified in the Recitals.
"TRADES" means the Treasury/Reserve Automated Debt Entry System maintained
by the Federal Reserve Bank of New York pursuant to the TRADES Regulations.
"TRADES Regulations" means the regulations of the United States Department
of the Treasury, published at 31 C.F.R. Part 357, an 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
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form, delivery in appropriate physical form to the recipient accompanied
by any duly executed instruments of transfer, assignments in blank,
transfer tax stamps and any other documents necessary to constitute a
legally valid transfer to the recipient;
(ii) in the case of Collateral consisting of securities maintained
in book-entry form by causing a "securities intermediary" (as defined in
Section 8-102(a)(14) of the Code) to (i) credit a "securities 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; (ii) to issue a
confirmation to the recipient with respect to such credit and (iii) to
make appropriate notations in its books to reflect the security interest
of the recipient in such securities.
"Treasury Security" means a zero-coupon U.S. Treasury Security (Cusip
Number ________) which are the principal strips of the __% U.S. Treasury
Securities which mature on ________, ____.
"Trust" has the meaning specified in the Recitals.
"Value" with respect to any item of Collateral on any date means, as to
(i) a Preferred Security, the Stated Amount, (ii) Cash, the face amount thereof
and (iii) Treasury Securities, the aggregate principal amount thereof at
maturity.
Section 2. Pledge; Control and Perfection.
Section 2.1. The Pledge. The Holders from time to time acting through the
Purchase Contract Agent, as their attorney-in-fact, hereby pledge and grant to
the Collateral Agent, for the benefit of the Company, as collateral security for
the performance when due by such Holders of their respective obligations under
the related Purchase Contracts, a security interest in all of the right, title
and interest of such Holders (a) in the Preferred Securities constituting a part
of the Securities and all Proceeds thereof and any Treasury Securities delivered
in exchange for such Preferred Securities in accordance with Section 4 hereof,
in each case that have been Transferred to or received by the Collateral Agent
and not released by the Collateral Agent to such Holders under the provisions of
this Agreement (the "Collateral"); (b) in payments made by Holders pursuant to
Section 4.4; (c) in the Collateral Account and all securities, financial assets
and other property credited thereto and all Security Entitlements related
thereto; (d) in any Debentures delivered to the Collateral Agent upon the
occurrence of an Investment Company Event or a liquidation of the Trust as
provided in Section 6.2(e); in the Treasury Portfolio purchased on behalf of the
Holders of Income Units by the Collateral Agent upon the occurrence of a Tax
Event Redemption as provided in Section 6.2 and (f) all proceeds of the
foregoing. Prior to or concurrently with the execution and delivery of this
Agreement, the Purchase Contract Agent, on behalf of the initial Holders of the
Income Units, shall cause the Preferred Securities comprising a part of the
Income Units to be delivered to the Collateral Agent for the benefit of the
Company by physically delivering such securities to the Collateral Agent
endorsed in blank and the Collateral Agent delivering such securities to the
Securities Intermediary and causing the Securities Intermediary to credit the
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Collateral Account with such securities and send the Collateral Agent a
confirmation of the deposit of such securities.
In the event a Holder of Income Units so elects, such Holder may Transfer
Treasury Securities to the Collateral Agent for the benefit of the Company in
exchange for the release by the Collateral Agent on behalf of the Company of
Preferred Securities or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, with an aggregate stated liquidation
amount equal to the aggregate principal amount of the Treasury Securities so
Transferred, in the case of Preferred Securities, or with an appropriate
Applicable Ownership Interest (as specified in clause (A) of the definition of
such term) of the Treasury Portfolio equal to the aggregate principal amount of
the Treasury Securities so transferred, in the event that a Tax Event Redemption
has occurred, to the Purchase Contract Agent on behalf of such Holder. Treasury
Securities and the Treasury Portfolio, as applicable, shall be Transferred to
the Collateral Account maintained by the Collateral Agent at the Securities
Intermediary by book-entry transfer to the Collateral Account in accordance with
the TRADES Regulations and other applicable law and by the notation by the
Securities Intermediary on its books that a Security Entitlement with respect to
such Treasury Securities or Treasury Portfolio, has been credited to the
Collateral Account. For purposes of perfecting the Pledge under applicable law,
including, to the extent applicable, the TRADES Regulations of the Uniform
Commercial Code as adopted and in effect in any applicable jurisdiction, the
Collateral Agent shall be the agent of the Company as provided herein. The
pledge provided in this Section 2.1 is herein referred to as the "Pledge" and
the Preferred Securities (or the Debentures that are delivered pursuant to
Section 6.2 hereof) or Treasury Securities subject to the Pledge, excluding any
Preferred Securities (or the Debentures that are delivered pursuant to Section
6.2 hereof) or Treasury Securities released from the Pledge as provided in
Section 4 hereof, are hereinafter referred to as "Pledged Preferred Securities"
or the "Pledged Treasury Securities," respectively. Subject to the Pledge and
the provisions of Section 2.2 hereof, the Holders from time to time shall have
full beneficial ownership of the Collateral. Whenever directed by the Collateral
Agent acting on behalf of the Company, the Securities Intermediary shall have
the right to reregister the Preferred Securities or any other securities held in
physical form in its name.
Except as may be required in order to release Preferred Securities in
connection with a Holder's election to convert its investment from an Income
Unit to a Growth Unit, or except as otherwise required to release securities as
specified herein, neither the Collateral Agent nor the Securities Intermediary
shall relinquish physical possession of any certificate evidencing a Preferred
Security 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 Preferred Securities evidenced thereby from
the Pledge, the Securities Intermediary shall use its best efforts to obtain
physical possession of a replacement certificate evidencing any Preferred
Securities remaining subject to the Pledge hereunder registered to it or
endorsed in blank within 15 days of the date it relinquished possession. The
Collateral Agent shall promptly notify the Company of the Securities
Intermediary's failure to obtain possession of any such replacement certificate
as required hereby.
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Section 2.2. Control and Perfection. In connection with the Pledge granted
in Section 2.1, and subject to the other provisions of this Agreement, the
Holders from time to time acting through the Purchase Contract Agent, as their
attorney-in-fact, hereby authorize and direct the Securities Intermediary
(without the necessity of obtaining the further consent of the Purchase Contract
Agent or any of the Holders), and the Securities Intermediary agrees, to comply
with and follow any instructions and entitlement orders (as defined in ss.
8-102(a)(8) of the Code) that the Collateral Agent on behalf of the Company may
give in writing with respect to the Collateral Account, the Collateral credited
thereto and any security entitlements with respect to any thereof. Such
instructions and entitlement orders may, without limitation, direct the
Securities Intermediary to transfer, redeem, sell, liquidate, assign, deliver or
otherwise dispose of the Preferred Securities, the Treasury Securities, the
Treasury Portfolio, and any Security Entitlements with respect thereto and to
pay and deliver any income, proceeds or other funds derived therefrom to the
Company. The Holders from time to time acting through the Purchase Contract
Agent hereby further authorize and direct the Collateral Agent, as agent of the
Company, to itself issue instructions and entitlement orders, and to otherwise
take action, with respect to the Collateral Account, the Collateral credited
thereto and any security entitlements with respect to any thereof, pursuant to
the terms and provisions hereof, all without the necessity of obtaining the
further consent of the Purchase Contract Agent or any of the Holders. The
Collateral Agent shall be the Agent of the Company and shall act as directed in
writing by the Company. Without limiting the generality of the foregoing, the
Collateral Agent shall issue entitlement orders to the Securities Intermediary
when and as directed by the Company.
Section 3. Distributions on Pledged Collateral. So long as the Purchase
Contract Agent is the registered owner of the Pledged Preferred Securities it
shall receive all payments thereon. If the Pledged Preferred Securities are
reregistered, such that the Collateral Agent becomes the registered holder, all
payments of the Stated Amount of or, if applicable, the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio, or cash distributions on, the Pledged Preferred
Securities or on the appropriate Applicable Ownership Interest (as specified in
clause (B) of the definition of such term) of the Treasury Portfolio, as the
case may be, and all payments of the principal of, or cash distributions on, any
Pledged Treasury Securities received by the Collateral Agent that are properly
payable hereunder shall be paid by the Collateral Agent by wire transfer in same
day funds:
(i) In the case of (A) cash distributions with respect to the
Pledged Preferred Securities or the appropriate Applicable Ownership
Interest (as specified in clause (B) of the definition of such term) of
the Treasury Portfolio, as the case may be, and (B) any payments of the
Stated Amount or, if applicable, the appropriate Applicable Ownership
Interest (as specified in clause (A) of the definition of such term) of
the Treasury Portfolio with respect to any Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as
the case may be, that have been released from the Pledge pursuant to
Section 4.3 hereof, to the Purchase Contract Agent, for the benefit of the
relevant Holders of Securities, to the account designated by the Purchase
Contract Agent for such purpose, no later than 2:00 p.m., New York City
time, on the Business Day such payment is received by the
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Collateral Agent (provided that in the event such payment is received by
the Collateral Agent on a day that is not a Business Day or after 12:30
p.m., New York City time, on a Business Day, then such payment shall be
made no later than 10:30 a.m., New York City time, on the next succeeding
Business Day);
(ii) In the case of any principal payments with respect to any
Treasury Securities that have been released from the Pledge pursuant to
Section 4.3 hereof, to the Holders of the Growth Units to the accounts
designated by them in writing for such purpose no later than 2:00 p.m.,
New York City time, on the Business Day such payment is received by the
Collateral Agent (provided that in the event such payment is received by
the Collateral Agent on a day that is not a Business Day or after 12:30
p.m., New York City time, on a Business Day, then such payment shall be
made no later than 10:30 a.m., New York City time, on the next succeeding
Business Day); and
(iii) In the case of payments of the Stated Amount of any Pledged
Preferred Securities or the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio, as the case may be, or the principal of any Pledged Treasury
Securities, to the Company on the Purchase Contract Settlement Date in
accordance with the procedure set forth in Section 4.6(a) or 4.6(b)
hereof, in full satisfaction of the respective obligations of the Holders
under the related Purchase Contracts.
All payments received by the Purchase Contract Agent as provided herein shall be
applied by the Purchase Contract Agent pursuant to the provisions of the
Purchase Contract Agreement. If, notwithstanding the foregoing, the Purchase
Contract Agent shall receive any payments of the Stated Amount or, if
applicable, the appropriate Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) on account of any Preferred Security
or the appropriate Applicable Ownership Interest of the Treasury Portfolio, as
applicable that, at the time of such payment, is a Pledged Preferred Security or
the appropriate Applicable Ownership Interest of the Treasury Portfolio, as the
case may be, or a Holder of a Growth Unit shall receive any payments of
principal on account of any Treasury Securities that, at the time of such
payment, are Pledged Treasury Securities, the Purchase Contract Agent or such
Holder shall hold the same as trustee of an express trust for the benefit of the
Company (and promptly deliver the same over to the Company) for application to
the obligations of the Holders under the related Purchase Contracts, and the
Holders shall acquire no right, title or interest in any such payments of Stated
Amount or principal so received.
Section 4. Substitution, Release, Repledge and Settlement of Preferred
Securities.
Section 4.1. Substitution of Preferred Securities and the Establishment of
Growth Units. At any time on or prior to the fifth Business Day immediately
preceding the Purchase Contract Settlement Date (unless a Tax Event Redemption
has occurred), a Holder of Income Units shall have the right to substitute
Treasury Securities for the Pledged Preferred Securities securing such Holder's
obligations under the Purchase Contract(s) comprising a part of its Income Units
in integral multiples of 20 Income Units by (a) Transferring to the Collateral
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Agent Treasury Securities having a Value equal to the Stated Amount of the
Pledged Preferred Securities to be released and (b) delivering the related
Income 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 Treasury Securities to the Collateral
Agent pursuant to clause (a) above (stating the Value of the Treasury Securities
Transferred by such Holder) and requesting that the Purchase Contract Agent
instruct the Collateral Agent to release from the Pledge the Pledged Preferred
Securities related to such Income Units. The Purchase Contract Agent shall
instruct the Collateral Agent in the form provided in Exhibit A; provided,
however, that if a Tax Event Redemption has occurred and the Treasury Portfolio
has become a component of the Income Units, Holders of Income Units may make
such substitution only in integral multiples of ________ Income Units at any
time on or prior to the second Business Day immediately preceding the Purchase
Contract Settlement Date. Upon receipt of Treasury Securities from a Holder of
Income Units and the related instruction from the Purchase Contract Agent, the
Collateral Agent shall release the Pledged Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, and shall promptly Transfer such Pledged Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, free and clear of any lien, pledge or security interest created hereby,
to the Purchase Contract Agent.
Section 4.2. Pledge of Preferred Securities and Reestablishment of Income
Units. At any time on or prior to the fifth Business Day immediately preceding
the Purchase Contract Settlement Date (unless a Tax Event Redemption has
occurred), a Holder of Growth Units shall have the right to establish or
reestablish Income Units consisting of the Purchase Contracts and Preferred
Securities in integral multiples of 20 Income Units by (a) Transferring to the
Collateral Agent Preferred Securities having a Value equal to the Stated Amount
of the Pledged Treasury Securities to be released and (b) delivering the related
Growth 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 Preferred Securities to the Collateral
Agent pursuant to clause (a) above and requesting that the Purchase Contract
Agent instruct the Collateral Agent to release from the Pledge the Pledged
Treasury Securities related to such Growth Units. The Purchase Contract Agent
shall instruct the Collateral Agent in the form provided in Exhibit A; provided,
however, that if a Tax Event Redemption has occurred and the Treasury Portfolio
has become a component of the Income Units, Holders of Growth Units may make
such substitution only in integral multiples of ________ Growth Units, at any
time on or prior to the Business Day immediately preceding the Purchase Contract
Settlement Date. Upon receipt of the Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
from such Holder and the instruction from the Purchase Contract Agent, the
Collateral Agent shall release the Treasury Securities and shall promptly
Transfer such Treasury Securities, free and clear of any lien, pledge or
security interest created hereby, to the Purchase Contract Agent.
Section 4.3. Termination Event. Upon receipt by the Collateral Agent of
written notice from the Company or the Purchase Contract Agent that there has
occurred a Termination Event, the Collateral Agent shall release all Collateral
from the Pledge and shall
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promptly Transfer any Pledged Preferred Securities (or the Applicable Ownership
Interest of the Treasury Portfolio if a Tax Event Redemption has occurred) and
Pledged Treasury Securities to the Purchase Contract Agent for the benefit of
the Holders of the Income Units and the Growth Units, respectively, free and
clear of any lien, pledge or security interest or other interest created hereby.
If such Termination Event shall result from the Company's becoming a
debtor under the Bankruptcy Code, and if the Collateral Agent shall for any
reason fail promptly to effectuate the release and Transfer of all Pledged
Preferred Securities, the Treasury Portfolio or of the Pledged Treasury
Securities, as the case may be, as provided by this Section 4.3, the Purchase
Contract Agent shall (i) use its best efforts to obtain an opinion of a
nationally recognized law firm reasonably acceptable to the Collateral Agent to
the effect that, as a result of the Company's being the debtor in such a
bankruptcy case, the Collateral Agent will not be prohibited from releasing or
Transferring the Collateral as provided in this Section 4.3, and shall deliver
such opinion to the Collateral Agent within ten days after the occurrence of
such Termination Event, and if (y) the Purchase Contract Agent shall be unable
to obtain such opinion within ten days after the occurrence of such Termination
Event or (z) the Collateral Agent shall continue, after delivery of such
opinion, to refuse to effectuate the release and Transfer of all Pledged
Preferred Securities, of the Treasury Portfolio or of the Pledged Treasury
Securities, as the case may be, as provided in this Section 4.3, then the
Purchase Contract Agent shall within fifteen days after the occurrence of such
Termination Event commence an action or proceeding in the court with
jurisdiction of the Company's case under the Bankruptcy Code seeking an order
requiring the Collateral Agent to effectuate the release and transfer of all
Pledged Preferred Securities, of the Treasury Portfolio or of the Pledged
Treasury Securities, as the case may be, as provided by this Section 4.3 or (ii)
commence an action or proceeding like that described in subsection (i)(z) hereof
within ten days after the occurrence of such Termination Event.
Section 4.4. Cash Settlement. (a) Upon receipt by the Collateral Agent of
(i) a notice from the Purchase Contract Agent promptly after the receipt by the
Purchase Contract Agent of such notice that a Holder of an Income Unit or Growth
Unit has elected, in accordance with the procedures specified in Section
5.4(a)(i) or (d)(i) of the Purchase Contract Agreement, respectively, to settle
its Purchase Contract with cash and (ii) payment by such Holder on or prior to
11:00 a.m., New York City time, on the Business Day immediately preceding the
Purchase Contract Settlement Date in lawful money of the United States by
certified or cashiers' check or wire transfer in immediately available funds
payable to or upon the order of the Company, then the Collateral Agent shall,
upon the written direction of the Purchase Contract Agent, promptly invest any
Cash received from a Holder in connection with a Cash Settlement in Permitted
Investments. Upon receipt of the proceeds upon the maturity of the Permitted
Investments on the Purchase Contract Settlement Date, the Collateral Agent shall
pay the portion of such proceeds and deliver any certified or cashiers' checks
received, in an aggregate amount equal to the Purchase Price, to the Company on
the Purchase Contract Settlement Date, and shall distribute any funds in respect
of the interest earned from the Permitted Investments to the Purchase Contract
Agent for payment to the relevant Holders.
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(b) If a Holder of an Income Unit fails to notify the Agent of its
intention to make a Cash Settlement in accordance with paragraph 5.4(a)(i) of
the Purchase Contract Agreement, such failure shall constitute an event of
default under the Purchase Contract Agreement and hereunder, and the Holder
shall be deemed to have consented to the disposition of the pledged Preferred
Securities pursuant to the remarketing as described in paragraph 5.4(b) of the
Purchase Contract Agreement, which is incorporated herein by reference. If a
Holder of an Income Unit does notify the Agent as provided in paragraph
5.4(a)(i) of the Purchase Contract Agreement of its intention to pay the
Purchase Price in cash, but fails to make such payment as required by paragraph
5.4(a)(ii) of the Purchase Contract Agreement, the Preferred Securities of such
a Holder will not be remarketed but instead the Collateral Agent, for the
benefit of the Company, will exercise its rights as a secured party with respect
to such Preferred Securities at the direction of the Company. In addition, in
the event of a Failed Remarketing as described in paragraph 5.4(b) of the
Purchase Contract Agreement, such Failed Remarketing shall constitute an event
of default hereunder by such Holder and the Collateral Agent, for the benefit of
the Company, will also exercise its rights as a secured party with respect to
such Preferred Securities at the direction of the Company.
(c) If a Holder of a Growth Unit fails to notify the Purchase Contract
Agent of such Holder's intention to make a Cash Settlement in accordance with
paragraph 5.4(d)(i) of the Purchase Contract Agreement, or if a Holder of an
Income Unit does notify the Agent as provided in paragraph (d)(i) of the
Purchase Contract Agreement of its intention to pay the Purchase Price in cash,
but fails to make such payment as required by paragraph 5.4(d)(ii) of the
Purchase Contract Agreement, such failure shall constitute an event of default
hereunder by such Holder and upon the maturity of any Pledged Treasury
Securities or the Treasury Portfolio, if any, held by the Collateral Agent on
the Business Day immediately preceding the Purchase Contract Settlement Date,
the principal amount of the Pledged Treasury Securities or the Treasury
Portfolio received by the Collateral Agent shall, upon written direction of the
Purchase Contract Agent, be invested promptly in Permitted Investments. On the
Purchase Contract Settlement Date, an amount equal to the Purchase Price will be
remitted to the Company as payment thereof. In the event the sum of the proceeds
from the related Pledged Treasury Securities or the Treasury Portfolio, as the
case may be, and the investment earnings earned from such investments is in
excess of the aggregate Purchase Price of the Purchase Contracts being settled
thereby, the Collateral Agent will distribute such excess to the Purchase
Contract Agent for the benefit of the Holder of the related Growth Units or
Income Units when received.
Section 4.5. Early Settlement. Upon written notice to the Collateral Agent
by the Purchase Contract Agent that one or more Holders of Securities have
elected to effect Early Settlement of their respective obligations under the
Purchase Contracts forming a part of such Securities in accordance with the
terms of the Purchase Contracts and the Purchase Contract Agreement (setting
forth the number of such Purchase Contracts as to which such Holders have
elected to effect Early Settlement), and that the Purchase Contract Agent has
received from such Holders, and paid to the Company as confirmed in writing by
the Company, the related Early Settlement Amounts pursuant to the terms of the
Purchase Contracts and the Purchase Contract Agreement and that all conditions
to such Early Settlement have been satisfied, then the Collateral Agent shall
release from the Pledge, (a) Pledged Preferred
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Securities or the appropriate Applicable Ownership Interest of the Treasury
Portfolio in the case of a Holder of Income Units or (b) Pledged Treasury
Securities in the case of a Holder of Growth Units, as the case may be, with a
principal amount equal to the product of (i) the Stated Amount times (ii) the
number of such Purchase Contracts as to which such Holders have elected to
effect Early Settlement and shall Transfer all such Pledged Preferred Securities
or the appropriate Applicable Ownership Interest of the Treasury Portfolio or
Pledged Treasury Securities, as the case may be, free and clear of the Pledge
created hereby, to the Purchase Contract Agent for the benefit of the Holders.
Section 4.6. Application of Proceeds Settlement. (a) In the event a Holder
of Income Units (if a Tax Event Redemption has not occurred) has not elected to
make an effective Cash Settlement by notifying the Purchase Contract Agent in
the manner provided for in paragraph 5.4(a)(i) in the Purchase Contract
Agreement or has not made an Early Settlement of the Purchase Contract(s)
underlying its Income Units, such Holder shall be deemed to have elected to pay
for the shares of Common Stock to be issued under such Purchase Contract(s) from
the Proceeds of the related Pledged Preferred Securities. The Collateral Agent
shall, by 10:00 a.m., New York City time, on the fourth Business Day immediately
preceding the Purchase Contract Settlement Date, without any instruction from
such Holder of Income Units, present the related Pledged Preferred Securities to
the Remarketing Agent for remarketing. Upon receiving such Pledged Preferred
Securities, the Remarketing Agent, pursuant to the terms of the Remarketing
Agreement and the Remarketing Underwriting Agreement, will use its reasonable
efforts to remarket such Pledged Preferred Securities on such date at a price
not less than approximately ____% of the aggregate Stated Amount of such Pledged
Preferred Securities, plus accrued and unpaid distributions (including deferred
distributions), if any, thereon. After deducting as the Remarketing Fee an
amount not exceeding ____ basis points (.__%) of the aggregate Stated Amount of
the Pledged Preferred Securities from any amount of such Proceeds in excess of
the aggregate Stated Amount, plus such accrued and unpaid distributions
(including deferred distributions) of the remarketed Pledged Preferred
Securities, the Remarketing Agent will remit the entire amount of the Proceeds
of such remarketing to the Collateral Agent. On the Purchase Contract Settlement
Date, the Collateral Agent shall apply that portion of the Proceeds from such
remarketing equal to the aggregate Stated Amount, plus such accrued and unpaid
distributions (including deferred distributions) of such Pledged Preferred
Securities, to satisfy in full the obligations of such Holders of Income Units
to pay the Purchase Price to purchase the Common Stock under the related
Purchase Contracts. The remaining portion of such Proceeds, if any, shall be
distributed by the Collateral Agent to the Purchase Contract Agent for payment
to the Holders. If, the Remarketing Agent advises the Collateral Agent in
writing that it cannot remarket the related Pledged Preferred Securities of such
Holders of Income Units at a price not less than 100% of the aggregate Stated
Amount of such Pledged Preferred Securities plus any accrued and unpaid
distributions (including deferred distributions), thus resulting in a Failed
Remarketing and an event of default under the Purchase Contract Agreement and
hereunder, the Collateral Agent, for the benefit of the Company will, at the
written direction of the Company, dispose of the Pledged Preferred Securities in
accordance with applicable law and satisfy in full, from such disposition, such
Holder's obligation to pay the Purchase Price for the Common Stock.
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(b) In the event a Holder of Growth Units or Income Units (if a Tax Event
Redemption has occurred) has not made an Early Settlement of the Purchase
Contract(s) underlying its Growth Units or Income Units, such Holder shall be
deemed to have elected to pay for the shares of Common Stock to be issued under
such Purchase Contract(s) from the Proceeds of the related Pledged Treasury
Securities or the Treasury Portfolio, as the case may be. On the Business Day
immediately prior to the Purchase Contract Settlement Date, the Collateral Agent
shall, at the written direction of the Purchase Contract Agent, invest the Cash
proceeds of the maturing Pledged Treasury Securities or the Treasury Portfolio,
as the case may be, in overnight Permitted Investments. Without receiving any
instruction from any such Holder of Growth Units or Income Units, the Collateral
Agent shall apply the Proceeds of the related Pledged Treasury Securities or
Treasury Portfolio to the settlement of such Purchase Contracts on the Purchase
Contract Settlement Date.
In the event the sum of the Proceeds from the related Pledged Treasury
Securities or Treasury Portfolio and the investment earnings from the investment
in overnight Permitted Investments is in excess of the aggregate Purchase Price
of the Purchase Contracts being settled thereby, the Collateral Agent shall
distribute such excess, when received, to the Purchase Contract Agent for the
benefit of the Holders.
Section 5. Voting Rights -- Preferred Securities. The Purchase Contract
Agent may exercise, or refrain from exercising, any and all voting and other
consensual rights pertaining to the Pledged Preferred Securities or any part
thereof for any purpose not inconsistent with the terms of this Agreement and in
accordance with the terms of the Purchase Contract Agreement; provided, that the
Purchase Contract Agent shall not exercise or, as the case may be, shall not
refrain from exercising such right if, in the judgment of the Company, such
action would impair or otherwise have a material adverse effect on the value of
all or any of the Pledged Preferred Securities; and provided, further, that the
Purchase Contract Agent shall give the Company and the Collateral Agent at least
five days' prior written notice of the manner in which it intends to exercise,
or its reasons for refraining from exercising, any such right. Upon receipt of
any notices and other communications in respect of any Pledged Preferred
Securities, including notice of any meeting at which holders of Preferred
Securities are entitled to vote or solicitation of consents, waivers or proxies
of holders of Preferred Securities, the Collateral Agent shall use reasonable
efforts to send promptly to the Purchase Contract Agent such notice or
communication, and as soon as reasonably practicable after receipt of a written
request therefor from the Purchase Contract Agent, execute and deliver to the
Purchase Contract Agent such proxies and other instruments in respect of such
Pledged Preferred Securities (in form and substance satisfactory to the
Collateral Agent) as are prepared by the Purchase Contract Agent with respect to
the Pledged Preferred Securities.
Section 6. Rights and Remedies; Distribution of the Debentures; Tax Event
Redemption
Section 6.1. Rights and Remedies of the Collateral Agent. (a) In addition
to the rights and remedies specified in Section 4.4 hereof or otherwise
available at law or in equity, after an event of default hereunder the
Collateral Agent shall have all of the rights and remedies with respect to the
Collateral of a secured party under the Uniform Commercial Code as
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in effect in the State of New York (the "Code") (whether or not the Code is in
effect in the jurisdiction where the rights and remedies are asserted) and the
TRADES Regulations and such additional rights and remedies to which a secured
party is entitled under the laws in effect in any jurisdiction where any rights
and remedies hereunder may be asserted. Without limiting the generality of the
foregoing, such remedies may include, to the extent permitted by applicable law,
(i) retention of the Pledged Preferred Securities or other Collateral in full
satisfaction of the Holders obligations under the Purchase Contracts or (ii)
sale of the Pledged Preferred Securities or other Collateral in one or more
public or private sales.
(b) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, in the event the Collateral Agent is unable
to make payments to the Company on account of the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio or on account of principal payments of any Pledged
Treasury Securities as provided in Section 3 hereof in satisfaction of the
obligations of the Holder of the Securities of which such Pledged Treasury
Securities, or the appropriate Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) of the Treasury Portfolio, as
applicable, is a part under the related Purchase Contracts, the inability to
make such payments shall constitute an event of default hereunder and the
Collateral Agent shall have and may exercise, with reference to such Pledged
Treasury Securities, or such appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio, as applicable, and such obligations of such Holder, any and all of
the rights and remedies available to a secured party under the Code and the
TRADES Regulations after default by a debtor, and as otherwise granted herein or
under any other law.
(c) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, the Collateral Agent is hereby irrevocably
authorized to receive and collect all payments of (i) the Stated Amount of or,
cash distributions on, the Pledged Preferred Securities, (ii) the principal
amount of the Pledged Treasury Securities, or (iii) the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio, subject, in each case, to the provisions of Section
3, and as otherwise granted herein.
(d) The Purchase Contract Agent and each Holder of Securities, in the
event such Holder becomes the Holder of a Growth Unit, agrees that, from time to
time, upon the written request of the Collateral Agent, the Purchase Contract
Agent or such Holder shall execute and deliver such further documents and do
such other acts and things as the Collateral Agent may reasonably request in
order to maintain the Pledge, and the perfection and priority thereof, and to
confirm the rights of the Collateral Agent hereunder. The Purchase Contract
Agent shall have no liability to any Holder for executing any documents or
taking any such acts requested by the Collateral Agent hereunder, except for
liability for its own negligent act, its own negligent failure to act or its own
willful misconduct.
Section 6.2. Distribution of the Debentures; Tax Event Redemption. Upon
the occurrence of an Investment Company Event or a liquidation of the Trust, a
principal amount of the Debentures constituting the assets of the Trust and
underlying the Preferred Securities
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equal to the aggregated Stated Amount of the Pledged Preferred Securities shall
be delivered to the Collateral Agent in exchange for the Pledged Preferred
Securities. In the event the Collateral Agent receives such Debentures in
respect of Pledged Preferred Securities upon the occurrence of an Investment
Company Event or liquidation of the Trust, the Collateral Agent shall Transfer
the Debentures to the Collateral Account in the manner specified herein for
Pledged Preferred Securities to secure the obligations of the Holders of Income
Units to purchase the Company's Common Stock under the related Purchase
Contracts. Thereafter, the Collateral Agent shall have such security interests,
rights and obligations with respect to the Debentures as it had in respect of
the Pledged Preferred Securities as provided in Articles II, III, IV, V and VI
hereof.
Upon the occurrence of a Tax Event Redemption prior to the Purchase
Contract Settlement Date, the Redemption Price payable on the Tax Event
Redemption Date with respect to the Applicable Principal Amount of Debentures
shall be delivered to the Collateral Agent by the Property Trustee or upon a
dissolution of the Trust and the distribution of the related Debentures, the
Debenture Trustee on or prior to 12:30 p.m., New York City time, by check or
wire transfer in immediately available funds at such place and at such account
as may be designated by the Collateral Agent in exchange for the Pledged
Preferred Securities or Debentures, as the case may be. In the event the
Collateral Agent receives such Redemption Price, the Collateral Agent will, at
the written direction of the Company, apply an amount equal to the Redemption
Amount of such Redemption Price to purchase from the Quotation Agent, the
Treasury Portfolio and promptly remit the remaining portion of such Redemption
Price to the Purchase Contract Agent for payment to the Holders of Income Units.
The Collateral Agent shall Transfer the Treasury Portfolio to the Collateral
Account in the manner specified herein for Pledged Preferred Securities to
secure the obligation of all Holders of Income Units to purchase Common Stock of
the Company under the Purchase Contracts constituting a part of such Income
Units, in substitution for the Pledged Preferred Securities. Thereafter the
Collateral Agent shall have such security interests, rights and obligations with
respect to the Treasury Portfolio as it had in respect of the Pledged Preferred
Securities or Debentures, as the case may be, as provided in Articles II, III,
IV, V, and VI, and any reference herein to the Pledged Preferred Securities or
the Debentures shall be deemed to be reference to such Treasury Portfolio.
Section 6.3. Substitutions. Whenever a Holder has the right to substitute
Treasury Securities, Preferred Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, for Collateral
held by the Collateral Agent, such substitution shall not constitute a novation
of the security interest created hereby.
Section 7. Representations and Warranties; Covenants.
Section 7.1. Representations and Warranties. The Holders from time to
time, acting through the Purchase Contract Agent as their attorney-in-fact (it
being understood that the Purchase Contract Agent shall not be liable for any
representation or warranty made by or on behalf of a Holder), hereby represent
and warrant to the Collateral Agent, which representations and warranties shall
be deemed repeated on each day a Holder Transfers Collateral that:
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(a) such Holder has the power to grant a security interest in and
lien on the Collateral;
(b) such Holder is the sole beneficial owner of the Collateral
and, in the case of Collateral delivered in physical form, is
the sole holder of such Collateral and is the sole beneficial
owner of, or has the right to Transfer, the Collateral it
Transfers to the Collateral Agent, free and clear of any
security interest, lien, encumbrance, call, liability to pay
money or other restriction other than the security interest
and lien granted under Section 2 hereof;
(c) upon the Transfer of the Collateral to the Collateral Account,
the Collateral Agent, for the benefit of the Company, will
have a valid and perfected first priority security interest
therein (assuming that any central clearing operation or any
Intermediary or other entity not within the control of the
Holder involved in the Transfer of the Collateral, including
the Collateral Agent, gives the notices and takes the action
required of it hereunder and under applicable law for
perfection of that interest and assuming the establishment and
exercise of control pursuant to Section 2.2 hereof); and
(d) the execution and performance by the Holder of its obligations
under this Agreement will not result in the creation of any
security interest, lien or other encumbrance on the Collateral
other than the security interest and lien granted under
Section 2 hereof or violate any provision of any existing law
or regulation applicable to it or of any mortgage, charge,
pledge, indenture, contract or undertaking to which it is a
party or which is binding on it or any of its assets.
Section 7.2. Covenants. The Holders from time to time, acting through the
Purchase Contract Agent as their attorney-in-fact (it being understood that the
Purchase Contract Agent shall not be liable for any covenant made by or on
behalf of a Holder), hereby covenant to the Collateral Agent that for so long as
the Collateral remains subject to the Pledge:
(a) neither the Purchase Contract Agent nor such Holders will
create or purport to create or allow to subsist any mortgage,
charge, lien, pledge or any other security interest whatsoever
over the Collateral or any part of it other than pursuant to
this Agreement; and
(b) neither the Purchase Contract Agent nor such Holders will sell
or otherwise dispose (or attempt to dispose) of the Collateral
or any part of it except for the beneficial interest therein,
subject to the pledge hereunder, transferred in connection
with the Transfer of the Securities.
Section 8. The Collateral Agent. It is hereby agreed as follows:
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Section 8.1. Appointment, Powers and Immunities. The Collateral Agent
shall act as agent for the Company hereunder with such powers as are
specifically vested in the Collateral Agent by the terms of this Agreement,
together with such other powers as are reasonably incidental thereto. The
Collateral Agent: (a) shall have no duties or responsibilities except those
expressly set forth in this Agreement and no implied covenants or obligations
shall be inferred from this Agreement against the Collateral Agent, nor shall
the Collateral Agent be bound by the provisions of any agreement by any party
hereto beyond the specific terms hereof; (b) shall not be responsible for any
recitals contained in this Agreement, or in any certificate or other document
referred to or provided for in, or received by it under, this Agreement, the
Securities or the Purchase Contract Agreement, or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement
(other than as against the Collateral Agent), the Securities or the Purchase
Contract Agreement or any other document referred to or provided for herein or
therein or for any failure by the Company or any other Person (except the
Collateral Agent) to perform any of its obligations hereunder or thereunder or
for the perfection, priority or, except as expressly required hereby,
maintenance of any security interest created hereunder; (c) shall not be
required to initiate or conduct any litigation or collection proceedings
hereunder (except pursuant to directions furnished under Section 8.2 hereof,
subject to Section 8.6 hereof); (d) shall not be responsible for any action
taken or omitted to be taken by it hereunder or under any other document or
instrument referred to or provided for herein or in connection herewith or
therewith, except for its own negligence or willful misconduct; and (e) shall
not be required to advise any party as to selling or retaining, or taking or
refraining from taking any action with respect to, any securities or other
property deposited hereunder. Subject to the foregoing, during the term of this
Agreement, the Collateral Agent shall take all reasonable action in connection
with the safekeeping and preservation of the Collateral hereunder.
No provision of this Agreement shall require the Collateral Agent 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 be liable for any amount in excess of the Value of the Collateral.
Notwithstanding the foregoing, the Collateral Agent and Securities Intermediary
in its individual capacity hereby waive any right of setoff, bankers lien, liens
or perfection rights as securities intermediary or any counterclaim with respect
to any of the Collateral.
Section 8.2. Instructions of the Company. The Company shall have the
right, by one or more instruments in writing executed and delivered to the
Collateral Agent, 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,
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 shall be adequately indemnified as provided herein. Nothing in this
Section 8.2 shall impair the right of the Collateral Agent in its discretion to
take any action or omit to take any action which it deems proper and which is
not inconsistent with such direction.
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Section 8.3. Reliance by Collateral Agent. Each of the Securities
Intermediary and the Collateral Agent shall be entitled to rely upon any
certification, order, judgment, opinion, notice or other communication
(including, without limitation, any thereof by telephone, telecopy, telex or
facsimile) believed by it to be genuine and correct and to have been signed or
sent by or on behalf of the proper Person or Persons (without being required to
determine the correctness of any fact stated therein), and upon advice and
statements of legal counsel and other experts selected by the Collateral Agent
and the Securities Intermediary. As to any matters not expressly provided for by
this Agreement, the Collateral 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 and the
Securities Intermediary and their affiliates may (without having to account
therefor to the Company) accept deposits from, lend money to, make their
investments in and generally engage in any kind of banking, trust or other
business with the Purchase Contract Agent and any Holder of Securities (and any
of their respective subsidiaries or affiliates) as if it were not acting as the
Collateral Agent, and the Collateral Agent and its affiliates may accept fees
and other consideration from the Purchase Contract Agent and any Holder of
Securities without having to account for the same to the Company; provided that
each of the Securities Intermediary and the Collateral Agent covenants and
agrees with the Company that it shall not accept, receive or permit there to be
created in favor of itself and shall take no affirmative action to permit there
to be created in favor of any other Person, any security interest, lien or other
encumbrance of any kind in or upon the Collateral.
Section 8.5. Non-Reliance on Collateral Agent. Neither the Securities
Intermediary nor the Collateral Agent shall be required to keep itself informed
as to the performance or observance by the Purchase Contract Agent or any Holder
of Securities of this Agreement, the Purchase Contract Agreement, the Securities
or any other document referred to or provided for herein or therein or to
inspect the properties or books of the Purchase Contract Agent or any Holder of
Securities. The Collateral Agent shall not have any duty or responsibility to
provide the Company with any credit or other information concerning the affairs,
financial condition or business of the Purchase Contract Agent or any Holder of
Securities (or any of their respective affiliates) that may come into the
possession of the Collateral Agent or the Securities Intermediary or any of
their respective affiliates.
Section 8.6. Compensation and Indemnity. The Company agrees: (i) to pay
the Collateral Agent from time to time such compensation as shall be agreed in
writing between the Company and the Collateral Agent for all services rendered
by it hereunder and (ii) to indemnify the Collateral Agent and the Securities
Intermediary for, and to hold each of them harmless from and against, any loss,
liability or reasonable out-of-pocket expense incurred without negligence,
willful misconduct or bad faith on its part, arising out of or in connection
with the acceptance or administration of its powers and duties under this
Agreement, including the reasonable out-of-pocket costs and expenses (including
reasonable fees and expenses of counsel) of defending itself against any claim
or liability in connection with the exercise or performance of such powers and
duties.
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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 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 the Collateral Agent shall not 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 shall be
entitled to refuse to act until either (i) such conflicting or adverse claims or
demands shall have been finally determined by a court of competent jurisdiction
or settled by agreement between the conflicting parties as evidenced in a
writing, satisfactory to the Collateral Agent or (ii) the Collateral Agent shall
have received security or an indemnity satisfactory to the Collateral Agent
sufficient to save the Collateral Agent harmless from and against any and all
loss, liability or reasonable out-of-pocket expense which the Collateral Agent
may incur by reason of its acting. The Collateral Agent may in addition elect to
commence an interpleader action or seek other judicial relief or orders as the
Collateral Agent may deem necessary. Notwithstanding anything contained herein
to the contrary, the Collateral Agent shall not be required to take any action
that is in its opinion contrary to law or to the terms of this Agreement, or
which would in its opinion subject it or any of its officers, employees or
directors to liability.
Section 8.8. Resignation of Collateral Agent. Subject to the appointment
and acceptance of a successor Collateral Agent as provided below, (a) the
Collateral Agent may resign at any time by giving notice thereof to the Company
and the Purchase Contract Agent as attorney-in-fact for the Holders of
Securities, (b) the Collateral Agent may be removed at any time by the Company
and (c) if the Collateral Agent fails to perform any of its material obligations
hereunder in any material respect for a period of not less than 20 days after
receiving written notice of such failure by the Purchase Contract Agent and such
failure shall be continuing, the Collateral Agent may be removed by the Purchase
Contract Agent. The Purchase Contract Agent shall promptly notify the Company of
any removal of the Collateral Agent pursuant to clause (c) of the immediately
preceding sentence. Upon any such resignation or removal, the Company shall have
the right to appoint a successor Collateral Agent. If no successor Collateral
Agent shall have been so appointed and shall have accepted such appointment
within 30 days after the retiring Collateral Agent's giving of notice of
resignation or such removal, then the retiring Collateral Agent may petition any
court of competent jurisdiction for the appointment of a successor Collateral
Agent. The Collateral Agent shall be a bank which has an office in New York, New
York with a combined capital and surplus of at least $750,000,000. Upon the
acceptance of any appointment as Collateral Agent hereunder by a successor
Collateral Agent, such successor Collateral Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the retiring
Collateral Agent, and the retiring Collateral Agent shall take all appropriate
action to transfer any money and property held by it hereunder (including the
Collateral) to such successor Collateral Agent. The retiring Collateral Agent
shall, upon such succession, be discharged from its duties and obligations as
Collateral Agent hereunder. After any retiring Collateral Agent's resignation
hereunder as Collateral Agent, the provisions of this Section 8
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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.
Section 8.9. Right to Appoint Agent or Advisor. The Collateral Agent shall
have the right to appoint agents or advisors in connection with any of its
duties hereunder, and the Collateral Agent shall not be liable for any action
taken or omitted by, or in reliance upon the advice of, such agents or advisors
selected in good faith. The appointment of agents pursuant to this Section 8.9
shall be subject to prior consent of the Company, which consent shall not be
unreasonably withheld.
Section 8.10. Survival. The provisions of this Section 8 shall survive
termination of this Agreement and the resignation or removal of the Collateral
Agent.
Section 8.11. Exculpation. Anything in this Agreement to the contrary
notwithstanding, in no event shall the Collateral 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 or the
Securities Intermediary, or any of them, incurred without any act or deed that
is found to be attributable to gross negligence or willful misconduct on the
part of the Collateral Agent or the Securities Intermediary.
Section 9. Amendment.
Section 9.1. Amendment Without Consent of Holders. Without the consent of
any Holders, the Company, the Collateral Agent 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 and the Purchase Contract
Agent, for any of the following purposes:
(1) to evidence the succession of another Person to the Company, and
the assumption by any such successor of the covenants of the Company;
(2) to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred upon the
Company so long as such covenants or such surrender do not adversely
affect the validity, perfection or priority of the security interests
granted or created hereunder;
(3) to evidence and provide for the acceptance of appointment
hereunder by a successor Collateral Agent, Securities Intermediary or
Purchase Contract Agent; or
(4) to cure any ambiguity, to correct or supplement any provisions
herein which may be inconsistent with any other such provisions herein, or
to make any other provisions with respect to such matters or questions
arising under this Agreement, provided such action shall not adversely
affect the interests of the Holders.
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Section 9.2. Amendment with Consent of Holders. With the consent of the
Holders of not less than a majority of the Purchase Contracts at the time
outstanding, by Act of said Holders delivered to the Company, the Purchase
Contract Agent or the Collateral Agent, as the case may be, the Company, when
duly authorized, the Purchase Contract Agent and the Collateral Agent may amend
this Agreement for the purpose of modifying in any manner the provisions of this
Agreement or the rights of the Holders in respect of the Securities; provided,
however, that no such supplemental agreement shall, without the consent of the
Holder of each Outstanding Security adversely affected thereby,
(1) change the amount or type of Collateral underlying a Security
(except for the rights of holders of Income Units to substitute the
Treasury Securities for the Pledged Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as
the case may be, or the rights of Holders of Growth Units to substitute
Preferred Securities or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, as applicable, for the Pledged Treasury
Securities), impair the right of the Holder of any Security to receive
distributions on the underlying Collateral or otherwise adversely affect
the Holder's rights in or to such Collateral; or
(2) otherwise effect any action that would require the consent of
the Holder of each Outstanding Security affected thereby pursuant to the
Purchase Contract Agreement if such action were effected by an agreement
supplemental thereto; or
(3) reduce the percentage of Purchase Contracts the consent of whose
Holders is required for any such amendment.
It shall not be necessary for any Act of Holders under this Section to approve
the particular form of any proposed amendment, but it shall be sufficient if
such Act shall approve the substance thereof.
Section 9.3. Execution of Amendments. In executing any amendment permitted
by this Section, the Collateral Agent and the Purchase Contract Agent shall be
entitled to receive and (subject to Section 6.1 hereof, with respect to the
Collateral Agent, and Section 7.1 of the Purchase Contract Agreement, with
respect to the Purchase Contract Agent) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and that all conditions precedent, if
any, to the execution and delivery of such amendment have been satisfied.
Section 9.4. Effect of Amendments. Upon the execution of any amendment
under this Section, this Agreement shall be modified in accordance therewith,
and such amendment shall form a part of this Agreement for all purposes; and
every Holder of Certificates theretofore or thereafter authenticated, executed
on behalf of the Holders and delivered under the Purchase Contract Agreement
shall be bound thereby.
Section 9.5. Reference to Amendments. Security Certificates authenticated,
executed on behalf of the Holders and delivered after the execution of any
amendment pursuant to this Section may, and shall if required by the Collateral
Agent or the Purchase Contract Agent,
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bear a notation in form approved by the Purchase Contract Agent and the
Collateral Agent as to any matter provided for in such amendment. If the Company
shall so determine, new Security Certificates so modified as to conform, in the
opinion of the Collateral Agent, the Purchase Contract Agent and the Company, to
any such amendment may be prepared and executed by the Company and
authenticated, executed on behalf of the Holders and delivered by the Purchase
Contract Agent in accordance with the Purchase Contract Agreement in exchange
for Outstanding Security Certificates.
Section 10. Miscellaneous.
Section 10.1. No Waiver. No failure on the part of the Collateral Agent or
any of its agents to exercise, and no course of dealing with respect to, and no
delay in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise by the Collateral Agent
or any of its agents of any right, power or remedy hereunder preclude any other
or further exercise thereof or the exercise of any other right, power or remedy.
The remedies herein are cumulative and are not exclusive of any remedies
provided by law.
Section 10.2. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Without limiting
the foregoing, the above choice of law is expressly agreed to by the Securities
Intermediary, the Collateral Agent and the Holders from time to time acting
through the Purchase Contract Agent, as their attorney-in-fact, in connection
with the establishment and maintenance of the Collateral Account. The Company,
the Collateral Agent and the Holders from time to time of the Securities, acting
through the Purchase Contract Agent as their attorney-in-fact, hereby submit to
the nonexclusive jurisdiction of the United States District Court for the
Southern District of New York and of any New York state court sitting in New
York City for the purposes of all legal proceedings arising out of or relating
to this Agreement or the transactions contemplated hereby. The Company, the
Collateral Agent and the Holders from time to time of the Securities, acting
through the Purchase Contract Agent as their attorney-in-fact, irrevocably
waive, to the fullest extent permitted by applicable law, any objection which
they may now or hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum.
Section 10.3. Notices. All notices, requests, consents and other
communications provided for herein (including, without limitation, any
modifications of, or waivers or consents under, this Agreement) shall be given
or made in writing (including, without limitation, by telecopy) delivered to the
intended recipient at the "Address for Notices" specified below its name on the
signature pages hereof or, as to any party, at such other address as shall be
designated by such party in a notice to the other parties. Except as otherwise
provided in this Agreement, all such communications shall be deemed to have been
duly given when transmitted by telecopier or personally delivered or, in the
case of a mailed notice, upon receipt, in each case given or addressed as
aforesaid.
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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 and the Purchase Contract Agent, and the Holders
from time to time of the Securities, by their acceptance of the same, shall be
deemed to have agreed to be bound by the provisions hereof and to have ratified
the agreements of, and the grant of the Pledge hereunder by, the Purchase
Contract Agent.
Section 10.5. Counterparts. This Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
Section 10.6. Severability. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(i) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in order to carry out the
intentions of the parties hereto as nearly as may be possible and (ii) the
invalidity or unenforceability of any provision hereof in any jurisdiction shall
not affect the validity or enforceability of such provision in any other
jurisdiction.
Section 10.7. Expenses, etc. The Company agrees to reimburse the
Collateral Agent for: (a) all reasonable out-of-pocket costs and expenses of the
Collateral Agent (including, without limitation, the reasonable fees and
expenses of counsel to the Collateral Agent), in connection with (i) the
negotiation, preparation, execution and delivery or performance of this
Agreement and (ii) any modification, supplement or waiver of any of the terms of
this Agreement; (b) all reasonable costs and expenses of the Collateral Agent
(including, without limitation, reasonable fees and expenses of counsel) in
connection with (i) any enforcement or proceedings resulting or incurred in
connection with causing any Holder of Securities to satisfy its obligations
under the Purchase Contracts forming a part of the Securities and (ii) the
enforcement of this Section 10.7; and (c) all transfer, stamp, documentary or
other similar taxes, assessments or charges levied by any governmental or
revenue authority in respect of this Agreement or any other document referred to
herein and all costs, expenses, taxes, assessments and other charges incurred in
connection with any filing, registration, recording or perfection of any
security interest contemplated hereby.
Section 10.8. Security Interest Absolute. All rights of the Collateral
Agent and security interests hereunder, and all obligations of the Holders from
time to time hereunder, shall be absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of any provision of the
Purchase Contracts or the Securities or any other agreement or instrument
relating thereto;
(b) any change in the time, manner or place of payment of, or any
other term of, or any increase in the amount of, all or any of the
obligations of Holders of Securities under the related Purchase Contracts,
or any other amendment or waiver of any term of, or any consent to any
departure from any requirement of, the Purchase Contract Agreement or any
Purchase Contract or any other agreement or instrument relating thereto;
or
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(c) any other circumstance which might otherwise constitute a
defense available to, or discharge of, a borrower, a guarantor or a
pledgor.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
[COMPANY NAME]
By:
--------------------------------------
Name:
Title:
Address for Notices:
[Company Name]
[Address]
Attention:
Telecopy:
,
--------------------------
as Purchase Contract Agent and as attorney-in-fact of the
Holders from time to time of the Securities
By:
--------------------------------------
Name:
Title:
Address for Notices:
[To Come]
Attention: Corporate Trust Administration Department
Telecopy:
--------------------------
as Collateral Agent and as Securities Intermediary
By:
--------------------------------------
Name:
Title:
Address for Notices:
__________________
[To Come]
Attention: Corporate Trust Administration Department
Telecopy:
30
EXHIBIT A
INSTRUCTION FROM PURCHASE CONTRACT AGENT TO COLLATERAL AGENT
____________________
[To Come]
Attention: Corporate Trust
Administration Department
Re: [________ Units] of [Name of Company] (the "Company"), and
[Company] Financing I
We hereby notify you in accordance with Section 4.1 of the Pledge
Agreement, dated as of ________, ____, (the "Pledge Agreement") among the
Company, yourselves, as Collateral Agent, and ourselves, as Purchase Contract
Agent and as attorney-in-fact for the holders of [Income Units] [Growth Units]
from time to time, that the holder of securities listed below (the "Holder") has
elected to substitute [$__________ aggregate principal amount of Treasury
Securities] [$__________ Stated Amount of Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio] in exchange
for an equal Value of [Pledged Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio] [Pledged Treasury
Securities] held by you in accordance with the Pledge Agreement and has
delivered to us a notice stating that the Holder has Transferred [Treasury
Securities] [Preferred Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio] to you, as Collateral Agent. We hereby
instruct you, upon receipt of such [Pledged Treasury Securities] [Pledged
Preferred Securities or the appropriate Applicable Ownership Interest of the
Treasury Portfolio], to release the [Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio] [Treasury Securities]
related to such [Income Units] [Growth Units] to us in accordance with the
Holder's instructions. Capitalized terms used herein but not defined shall have
the meaning set forth in the Pledge Agreement.
Date: By:
----------------- ----------------------------
Name:
Title:
Signature Guarantee:
----------------
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Please print name and address of Registered Holder electing to substitute
[Treasury Securities] [Preferred Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio] for the [Pledged Preferred
Securities or the Treasury Portfolio] [Pledged Treasury Securities]:
--------------------------------- ---------------------------------
Name Social Security or other
Taxpayer Identification Number,
if any
---------------------------------
Address
---------------------------------
---------------------------------
32
EXHIBIT B
INSTRUCTION TO PURCHASE CONTRACT AGENT
______________________
[To Come]
Attention: Corporate Trust Administration
Telecopy:
Re: [________ Units] of [Name of Company]
(the "Company"), and [Company]
Financing I
The undersigned Holder hereby notifies you that it has delivered to
_____ ___, as Collateral Agent, [$ aggregate principal amount of Treasury
Securities] [$_______ aggregate Stated Amount of Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio of the
appropriate Applicable Ownership Interest of the Treasury Portfolio] in exchange
for an equal Value of [Pledged Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio] [Pledged Treasury
Securities] held by the Collateral Agent (the "Pledge Agreement"), in accordance
with Section 4.1 of the Pledge Agreement, dated January __, 1998, between you,
the Company and the Collateral Agent. The undersigned Holder hereby instructs
you to instruct the Collateral Agent to release to you on behalf of the
undersigned Holder the [Pledged Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio] [Pledged Treasury
Securities] related to such [Income Units] [Growth Units]. Capitalized terms
used herein but not defined shall have the meaning set forth in the Pledge
Agreement.
Dated:
-------------------------- -------------------------------
Signature
Signature Guarantee:
-----------------------
Please print name and address of Registered Holder:
-------------------------------- -------------------------------
Name Social Security or other
Taxpayer Identification Number,
if any
--------------------------------
Address
--------------------------------
--------------------------------
